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YP Annual Report 2020

Sep 2, 2021

51950_rns_2021-09-02_b09c1b11-7d33-4eb8-b9e4-74ea514f1c6c.pdf

Annual Report

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Stock Code: 2023

==> picture [450 x 56] intentionally omitted <==

ANNUAL REPORT 2020

Information declaration: http://sii.twse.com.tw Open information website: http://mops.twse.com.tw Company website: https://www.yiehphui.com.tw

Published Date: May 15, 2021

I. Names, Titles and Contact Information of the Company's Spokesperson and Deputy Spokesperson:

Spokesperson: Yung-Hsien Chen Title: Executive Deputy General Manager Tel: (07) 611-7181 Email: [email protected]

Deputy Spokesperson: Wen-Chung Tien Title: Associate Manager Tel: (07) 611-7181 Email: [email protected]

II. Address and Telephone Number of HQ and Factory:

Head Office: No.369, Yuliao Rd., Qiaotou Dist., Kaohsiung City 825, Taiwan (R.O.C.) Tel: (07) 611-7181

Factory: No.369, Yuliao Rd., Qiaotou Dist., Kaohsiung City 825, Taiwan (R.O.C.) (Kaohsiung Plant)

Tel: (07) 611-7181

Factory: No.369, Yuliao Rd., Qiaotou Dist., Kaohsiung City 825, Taiwan (R.O.C.) (Kaohsiung Plant)

Tel: (07) 611-7181

Factory: No.6, Gongye 6th Rd., Pingtung City, Pingtung County 900, Taiwan (R.O.C.) (Pingtung Plant)

Tel: (08) 755-0979

Factory: No.909, Fuxing Rd., Luzhu Dist., Kaohsiung City 821, Taiwan (R.O.C.) (Luzhu Plant)

Phone: (07) 697-4428

Factory: No.600, Zhong’an Rd., Yanchao Dist., Kaohsiung City 824, Taiwan (R.O.C.) (Yancao Plant)

Phone: (07) 616-3001

III. Name, address, website, and telephone of stock transfer agency:

Name: Shareholder Service Dept., Taipei Office, Yieh Phui Enterprise Co.,Ltd Address: 15F., No.30, Beiping E. Rd., Zhongzheng Dist., Taipei City 100, Taiwan (R.O.C.)

Company website: www.yiehphui.com.tw Tel: (02) 2395-6780

IV. Contact Information of the Certified Public Accountants for the Latest Financial Report:

Names of CPAs: Huang Ling-Wen, Tsai Shu-Man

Name of Accounting Firm: Crowe Horwath (TW) CPAs

Address: 27F., No.6, Siwei 3rd Rd., Lingya Dist., Kaohsiung City 802, Taiwan (R.O.C.)

Website: www.crowehorwath.net/tw

Tel: (07) 331-2133

V. Overseas Trading Places for Listed Marketable Securities and Ways of Making Inquiries:

Listing location: none Ways for query: none

  • VI. Company website: www.yiehphui.com.tw

Content

Content Content
Chapter 1 Letter to Shareholders…………………………………….. ………..1
Chapter 2 Company Profile……………………………………………..............11
I. Date of Incorporation……………………………………………................11
II. Corporate History……………………………………………......................11
Chapter 3 Corporate Governance Report………………………...................13
I. Organization……………………………………………..............................13
II. Information on the Directors, President, Vice President, Associate Managers
and Heads of Departments and Branch Offices……………........................16
III. Compensations to Directors, President and Vice Presidents……………….27
IV. Implementation of Corporate Governance…………………………………35
V. Information on CPA Expenses……………………………………………...86
VI. Information on replacement of certified public accountants……………….87
VII. The Company's Chairman, President, Manager of Finance or Accounting
who has worked in CPA Firms or their Affiliates within the latest Fiscal
Year………………………………...……………………………………….87
VIII. Transfer or Pledge of Equity by the Company's Directors, Executive Officers
and Shareholders with more than 10% of the Company's Shares………….87
IX. Information on the Top 10 Holders of the Company's Shares Who Are
Identified as Related Parties, Spouse or Relative within Second-Degree of
Kinship...……………………………………………………………………88
X. Number of Shares Invested by the Company, any of the Company's Directors,
Supervisors and Executive Officers and Businesses Directly or Indirectly
Controlled by the Company and Consolidated Percentage of
Shareholding…………………………………………..……………………94
Chapter 4 Funding Status……………. …………………………..……………..96
I. Capital and Shares………………………………………………………….96
(I)
Source of Share Capital…………………………………………….96
(II)
Structure of Shareholders…………………………………………..99
(III)
Conditions of Share Distribution…………………………………..100
(IV)
List of Major Shareholders………………………………………...101
(V)
Fair Market Value, Net Worth, Profit, Dividend per Share and Other
Relevant Information for the Most Recent Two Years…………….102
(VI)
Dividend Policy and Implementation……………………………..104
(VII) Impact on Business Performance and Earnings Per Share (EPS) of
any Stock Dividend Distribution Proposed or Adopted at the Most
Recent Shareholders’ Meeting……………………………………..105
(VIII) Compensation to Employees and Directors……………………….106
(IX)
Repurchase of Shares by the Company……………………………108
II. Issuance of Corporate Bonds……………………………………………...108
III. Issuance of Preferred Shares………………………………………………108
IV. Issuance of Depository Receipts…………………………………………..108
V. Issuance of Employee Stock Option Certificates………………………….108
VI. Issuance of New Shares in Connection with Mergers and Acquisitions…..108
VII. Implementation of the Capital Utilization Plan…………………………...108
Chapter 5 Operational Overview…………………………...............................109
I. Business Content………………………………………………………….109
(I)
Scope of Business…………………………………………………109
(II)
Industry Overview…………………………………………............114
(III)
Overview of Technology and R&D……………………………….116
(IV)
Short- and Long-Term Business Development Plans……………..119
II. Market, Production and Sales Overview………………………………….119
(I) Market Analysis………………………………………………………….119
(II) Usage and Manufacturing Processes for the Company's Main Products.122
(III) The Supply Status of the Major Raw Materials………………………...125
(IV) Information of customers that contribute to more than 10% of total sales
in last two years………………………………………………………...126
(V) Production Volume and Value of the Most Recent Two Years………….128
(VI) Sales Volume and Value of the Most Recent Two Years……………….128
III.
Employee Information of the Most Recent Two Years up to the Printing of
this Annual Report………………………………………………………...129
IV.
Environmental Expenditures……………………………………..……….130
V. Labor-management Relations……………………………………………..132
VI Major Contracts…………………………………………………………...138
Chapter 6 Financial Conditions…………………………………………….....140
I. Condensed Balance Sheet and Consolidated Income Statement for the Most
Recent Five Years…………………………………………………………140
II. Financial Analysis of the Most Recent Five Years………………………..144
III.
The Audit Committee's Audit Report on the Most Recent Fiscal Year…...150
IV.
The Most Recent Fiscal Year's Consolidated Financial Statements of the
Parent Company and Subsidiaries Audited and Attested by the CPA…….151
V. Parent Company Only Financial Statement for the Most Recent Fiscal
Year………………………………………………………………………..277
VI. Impact on the Company's Financial Status due to Financial Difficulties
Experienced by the Company and Its Related Companies………………..387
Chapter 7 Review, Analysis, and Risks of Financial Status and
Performance…………………………………………………….........388
I. Financial Status……………………………………………………………388
II. Financial Performance…………………………………………………….389
III.
Cash Flow…………………………………………………………………394
IV.
Material Capital Expenditures in the Most Recent Fiscal Year and Their
Impact on the Company's Financial Affairs……………………………….396
V. Investment Policies for the Most Recent Fiscal Year, the Main Reasons for
the Profits or Losses Generated thereby, Improvement Plans, and Investment
Plans for the Coming Year………………………………………………...396
VI.
Risk Analysis and Review………………………………………………...398
VII. Other Important Issues…………………………………………………….403
Chapter 8 Special Items…………………………………….................................404
I. Information on Affiliated Companies……………………………………..404
II. Private Placement of Marketable Securities………………………………421
III.
Holding or Disposal of the Company's Shares by Subsidiaries…………...421
IV.
Supplementary Agenda……………………………………………………421
Chapter 9 Events Which Have Material Impact on Shareholders'
Equity or the Company’s Securities as Prescribed in Article
36, Paragraph 3, Subparagraph 2 of the Securities and
Exchange Act, Have Occurred from the Most Recent Year to
the Printing Date of This Report………………………………..422

Chapter 1 Letter to Shareholders

To Shareholders:

Due to the pandemic, the World Steel Association predicted the global steel demand in October 2020 that the demand will decrease by 2.4% to 1.7251 billion tons, but it will recover to 1.7951 billion tons, or 4.1% increase. In addition, IMF in January 2021 predicted that the global growth will be -3.5% in 2020, while that for 2021 and 2022 will be 5.5% and 4.5% respectively. This shows a rebound under the stimulus policies of the countries around the world in the post-epidemic era.

China has achieved the capacity reduction of 150 million tons upper bound in 2018 as scheduled in the thirteenth five-year plan. In 2020 the fifth Congress proposed the fourteenth five-year plan (2021-2025), disclosing the main path of domestic/international double cycle. The focus is the domestic cycle, increasing domestic demand and consumption. In 2021 Ministry of Industry and Information Technology announces several times that steel capacity reduction is critical of carbon neutral. The implementation of “Enforcement Regulations Governing the Capacity Replacement in the Iron and Steel Industry” is not in doubt and no steel production increase. This capacity/production control will ensure the steel production decrease. The steel reform is still in force.

In addition, the steel export of China has broken 100 million tons to 112.4 million tons since 2015, but decreased later to 64.55 million tons in 2019 and 53.67 million tons in 2020. This shows the decrease in importance of China’s steel industry to global market after the reform.

As the US economy continues to grow and people on unemployment benefit are relatively less, meaning that the US employment has not deteriorated. The $1.9 trillion stimulus pact will improve the finance of the people on the bottom and their consumption. Vaccine popularization will inhibit the pandemic and help the job market, all reflecting on the orders from manufacturing and production index, leading to improved consumption and further recovery.

EU strongly recovered in the third quarter in 2020, but the emergence of the second wave of pandemic prompted another lockdown resulting in fluctuation in the fourth quarter of year 2020. As the vaccination progresses and lifting of lockdown, the growth in the first quarter of 2021 will be positive. EU releases the most recent economic estimation: the growth rate will be 3.7% in 2021 and 3.9% in 2022.

This year will be special in that the world economy. Global economy will improve strongly as the pandemic goes away. However, the trade war between China and the US will not ameliorate with the Biden presidency. There will be many black swans and grey rhinos post-pandemic. The fluctuation of the steel market is the norm and Yieh Phui will deal with it via flexibility and innovation, in confronting the challenges by creating high

－1－

values.

I.Report on the Operation of 2020

Due to the impact of the pandemic, the revenue of Yieh Phui decreases by NT$4.035 billion or 16.16% and the sales by 7.55% from 2020 to 2019. In contrast, Yieh Phui (China) increases by NT$3.537 billion or 15.69% because of higher volume and price. In addition, the sales of Yieh Hsing decreases by 24.99% and the revenue by NT$945 million or 14.47%. Overall, the consolidated revenue NT$ 55.422 billion is lower by 7.15% than NT$59.688 billion last year. In comparison with 2019, the consolidated net profit is NT$518 million NT$2.218 billion better than last year’s NT$1.7 billion. Among that, NT$735 million is due to the parent company NT$2.136 billion better than a loss of NT$1.401 billion last year in comparison with 2019.

  1. The Performance of Business Plan:

Consolidated Information of Financial Statements Unit NT$ in (000)

Year
Item
2020		 2019 Changes Changes%
Operaiton Revenue 55,421,795 59,687,597 -4,265,802
-7.15%
Operaiton Costs 51,270,778 57,138,479 -5,867,701
-10.27%
Operaiton Gross Profit(Loss) 4,151,017 2,549,118 1,601,899
62.84%
Operaiton Expenses 3,017,931 3,444,311 -426,380
-12.38%
Operaiton Net Profit(Loss) 1,133,086 -895,193 2,028,279
226.57%
Non-operation Revenue and
Expenses		 -550,296 -1,090,273 539,977
49.53%
Net Profit(Loss)before Tax 582,790 -1,985,466 2,568,256
129.35%
Income Tax Expenses 65,202 -285,181 350,383
122.86%
Net Profit (Loss) after Tax 517,588 -1,700,285 2,217,873
130.44%
Other Comprehensive Income
(net)		 61,475 -329,270 390,745
118.67%
Total Amount of
Comprehensive Income in this
Term
579,063		 -2,029,555 2,608,618
-128.53%
Net Profit that Belongs to the
Ownerof theParentCompany		 735,238 -1,401,081 2,136,319
152.48%
Net Profit that Belongs to the
Non-controlling equity		 -217,650 -299,204 81,554
27.26%
Total Amount of
Comprehensive Income that
Belongs to the Owner of the
Parent Company		 813,293 -1,745,191 2,558,484
146.60%
Total Amount of
Comprehensive Income that
Belongs to the
Non-controllingequity		 -234,230 -284,364 50,134
17.63%

－2－

Financial Information of Company

Year
Item
2020		 2019 2019 Changes Changes Changes%
Operaiton Revenue 20,936,210 24,971,014 -4,034,804 -16.16%
Operaiton Costs 19,419,910 24,305,157 -4,885,247 -20.10%
Operaiton Gross
Profit(Loss)		 1,516,300 665,857 850,443 127.72%
Operaiton Expenses 1,147,932 1,238,112 -90,180 -7.28%
Operaiton Net
Profit(Loss)		 368,368 -572,255 940,623 164.37%
Non-operation
RevenueandExpenses		 468,997 -1,168,073 1,637,070 140.15%
Net Profit (Loss)
beforeTax		 837,365 -1,740,328 2,577,693 148.12%
Income Tax Expenses -102,127 339,247 -441,374 -130.10%
Net Profit (Loss) after
Tax		 735,238 -1,401,081 2,136,319 152.48%
2. Execution of the Budget: Yieh-Phui has not disclosed financial guidance and is not
applicable to the rules on disclosing the execution of the budget for 2020.
3. Analysis of the Revenue/Expenditure and Profitability :
Consolidated Financial Report Information
Item
2020
2019
Net cash inflow of operation activities (thousand
dollars)
1,846,136
2,821,675
Equity/Assets(%)
33.12
32.77
Liabilities/Assets(%)
66.88
67.23
Long-term Funds accounting for the ratio of real
estates, plants and equipments(%)
123.22
130.12
Current ratio(%)
76.15
75.73
Quick ratio(%)
31.62
40.66
Return on assets(%)
1.51
-0.76
Return on equity (%)
1.87
-5.96
Netprofit margin(%)
0.93
-2.85
Earningsper share(dollar)
0.39
-0.73
Number of shares bythe end of theyear(share)
1,890,569,518
1,913,327,518
Item 2020 2019
Net cash inflow of operation activities (thousand
dollars)
1,846,136
2,821,675
Equity/Assets(%) 33.12
32.77
Liabilities/Assets(%) 66.88
67.23
Long-term Funds accounting for the ratio of real
estates, plants and equipments(%)
123.22
130.12
Current ratio(%) 76.15
75.73
Quick ratio(%) 31.62
40.66
Return on assets(%) 1.51
-0.76
Return on equity (%) 1.87
-5.96
Netprofit margin(%) 0.93
-2.85
Earningsper share(dollar) 0.39
-0.73
Number of shares bythe end of theyear(share) 1,890,569,518
1,913,327,518

－3－

Financial Information of Company

Financial Information of Company
Item 2020 2019
Net cash inflow of operation activities (thousand
dollars)
633,888
421,321
Equity/Assets(%) 57.84
54.22
Liabilities/Assets(%) 42.16
45.78
Long-term Funds accounting for the ratio of real
estates, plants and equipments(%)
469.85
472.25
Current ratio(%) 50.75
53.14
Quick ratio(%) 21.78
25.87
Return on assets(%) 2.23
-2.15
Return on equity (%) 2.81
-5.22
Netprofit margin(%) 3.51
-5.61
Earningsper share(dollar) 0.39
-0.73
Number of shares bythe end of theyear(share) 1,890,569,518
1,913,327,518

4. Research and Development

To cope with the global trend of green energy, major international enterprises join RE100 (Renewable Energy) as advocated by the Climate Group and Carbon Disclosure Project (CDP), promising to achieve 100% renewable energy from 2020 to 2050. This will great influence the downstream supply chains and their demand for renewable energy. Promoting power generation via renewable means and reducing the demand of fossil fuel has been an international trend. The government of Taiwan has also put that as a national goal, aiming to have 20% power generation to be green (only 4.6% in 2018). Among these, the solar power will be over 70% from 2.5GW in 2018 to 20GW in 2025. Up to December of 2020, the installment is only 5.82GW. For the next five years, the demand of steel for solar panel brackets will be 1.4 million tons (280,000 tons per year) in the case of ground type solar power generation, the kind that needs steel material most.

The Legislative Yuan passed the modification of the “Act of Developing Renewable Energy” on April 12, 2019 and implemented on May 1 the same year, stipulating that big power users have to establish or purchase a certain amount of green power. On January 1, 2021, the government implemented a measure that designates big power users (5000 KW or above) have to install renewable power generation facilities. Users of power over 5000KW have to use 10% renewable energy. That is, 10% or 500KW of the power has to come from owned/bought green power with five years grace period. Also, there is early bird discount program. If done before 2023, it has to be

－4－

only 8% and 9% before 2024. There are four options to satisfy the rule, self-built power generation, purchase of voucher or power, set up energy storage, or payment of NT$4.06 per unit. No doubt, the demand for green energy will soar to conform to the new regulation. Since the quality of solar panel bracket varies widely. Yieh Phui is determined to be an SSRSS (Solar Steel Racket Solution Supplier) based in Taiwan and deploys suitable materials to deal with the drastic environment of Taiwan. It formally produces hot-dip 5%Al-Mg-Zn coated (PhuizerMax®) & prepainted 5%Al-Zn coated steel coils (SolarKing™) for forming of solar panel brackets, supplying major solar power generation in Taiwan with local materials, timely services, and suitable materials selection of high-strength, high-corrosion-resistant steel. The sale for the coated steel for solar panel brackets has been over 100,000 tons, winning the recognition of domestic and foreign businesses, reducing carbon emissions and working hard for the development of renewable energy.

On product differentiation, Yieh Phui has successfully developed anti-microbial metallic coated steel sheets – regular spangle, used for the pipes for air-conditioning, and gained recognition by the public construction projects of Hong Kong, such as MRT and hospitals, and those of Macao. Yieh Phui continues to develop other high-end prepainted steel sheets and Al-Zn coated steel sheets for inner panels of ovens. The sales have steadily increased in 2016 and expected to expand in the projects of other appliances. In addition, Yieh Phui has finalized the production of Printed Prepainted Steel Sheets (wood & hairline patterns) for special applications in the industry and will deliver those products in 2017, enhancing the market prospect and the diversity of our offers. In 2018, Yieh Phui plans to develop coated steel with anti-microbial plus and anti-fingerprint treatment to be used in ducting and green construction materials in hospitals and luxurious residences, enhancing market expansion and product diversification. Yieh Phui introduced PVF liquid painted and laminated products in 2019, highly anti-corrosion, anti-climate and easy to process in high end construction market, with a quality much better than PVDF. In 2020, to comply with the trend of green energy by the governments around the world, Yieh Phui developed high-strength, high-corrosion-resistant Al-Mg-Zn coated steel and has won the recognition worldwide with accumulated sale of 70,000 tons.

The trend of globalization has triggered the EU to issue the regulation of RoHS and WEEE, which focus on the recycling of electronic appliances, environment friendly production and their re-use. This policy has won the recognition of the whole world and Yieh Phui has developed products compliant with those regulations and earned big and long-term orders of major appliance producers. Later on in 2007 the EU issued REACH, controlling 16 ingredients in the materials, mixtures and products exporting to EU that may cause cancers, deformation and toxicity to the human reproductive system. Up to the end of 2020, there have been 224 such items and they have been put into Yieh Phui’s quality control and auditing system to protect the environment and

－5－

the health of consumers. Recently, EU asks again to set a deadline on the use of steel products that contain hexavalent chromium and other new environmental instructions on construction materials like metallic and color coated steel sheets. The company has been aggressively and speedily developing multi-combination and multi-purpose products with suppliers of surface treatment and paints, becoming the first among Taiwan’s competitors to produce outdoor environmentally protective coated steel products. Yieh Phui will cooperate with the sales channels of the supply chain of dealers and roll formers, making sure that our products will reach the world market seamlessly; In 2019 to deal with the safeguard measures, Yieh Phui developed an environmental protection process that can replace oil treatment. The sale has reached 140,000 tons by the end of 2020 successfully breaking the obstacles of the global crunch and making another achievement of product development and sales.

Ⅱ. Overview of 2021 Business Plan:

1. Business strategy

Yieh Phui has been developing the global market for many years and achieved a system of order transfer that makes us far more flexible than domestic competitors. With a well-developed distribution system, we will continue to secure the established distribution channels and existing customers , With multiple goals of developing niche markets and products, it seeks alliance, and increases market shares.

As NTD continues to appreciate, in 2020 Yieh Phui has adjusted the domestic sale to 40%-45%, showing that the company has emphasized the importance of domestic market as always. Either metallic coated or prepainted steel sheets are among the top three sale volumes domestically. We actively provide assistance to our downstream processing service providers to minimize the risks of unstable quality, poor capital flow, delayed shipment and exchange rate fluctuation. Our active approach directly enhanced our market competitiveness.

At this stage, over 55%-60% of the Company's total sales come from exports. Therefore, the fluctuation of the global market deeply influences and drives the Company's performance. In addition, anti-dumping and export defensive measure taken by Australia, Thailand, Indonesia, and the US see the rising tide of protectionism. These events highlighted the disadvantageous position of Taiwan in the global trade chain. Thus, besides relying on the government to expedite the signing of free trade agreement and join CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership), we will continue to consolidate the resources in the steel industry and seek ways to lower the cost of sales to help our customers and the Company maximize market competitiveness

－6－

  1. Expected sales and marketing strategies:

The Company's projected sales for 2021 include galvanized steel sheets at794,337 tons, pre-painted steel sheets at 235,894 tons, rolled steel coils at 220 tons, steel structure engineering at 29,000 tons, crane equipment 48 units, and others (sale and purchase, OEM, and scraps) at 122,8650 tons. The total comes to 1,182,316 tons and 48 units of cranes.

The Company's (consolidated) projected sales for the major products in 2021 include: galvanized steel sheets at 1,430,337 tons, pre-painted steel sheets at691,894 tons, rolled steel sheets at 216,220 tons, steel structure engineering at 29,000 tons, crane equipment 48 units, wires at 329,000 tons, stainless steel at74,650 tons, steel pipes at 125,700 tons and, other products at 139,702 tons.

Yieh Phui will maintain the competitive edge on good quality, stable channels, flexible sales, and excellent services. Also, we will deal with the changes in the environment, getting hold of the market to achieve the profitability goals of 2021.

Ⅲ .Corporate Strategies for Future Development

To maintain stable growth, Yieh Phui has finished the fourth expansion done in Changshu Economic Development Zone, Jiangsu, of Yieh Phui (China). The total production of hot-dip galvanizing in Taiwan and China has reached 26 million tons per year, and has become one of the best independent producers for hot-dip galvanized steel sheets in the world. The fourth expansion of Yieh Phui (China) includes a one-million ton pickling and tandem cold mill (PLTCM), 500,000 tons of continuous annealing line (CAL), a 400,000 tons of hot-dip galvanizing line that can produce galvannealed steel sheets and a 220,000 tons of coil coating line. In addition, under the third hot-dip galvanizing line, an aluminum coated equipment is added. The products of the expansion will supply the massive cars and appliances markets in China.

Yieh Phui and Yieh Phui (China) both can produce hot-dip galvanized, hot-dip 5% Al-Zn coated, and hot-dip 55% Al-Zn coated steel coils. In addition Yieh Phui (China) can produce hot-dip Al-Zi coated steel coils and prepainted hot-dip galvanized steel coils using the above materials as a base with all sorts of variety and sizes to satisfy the needs of one-stop shopping for customers worldwide. The competitiveness and profitability is second to none.

In recent years, under the dual-production base model formed by Yieh Phui and Yieh Phui (China), the Company has begun to reinforce dual-axis operations through developing export markets outside of China and the niche markets. In response to the environmental trends, we have also been actively developing green steel products, aiming to exceed the competitors in the industry through the blue ocean strategy. In

－7－

addition to the domestic market of China, Yieh Phui (China) pays attention to the ASEAN market after RCEP to deal with the tariff differences via Taiwan and China, adjusting production accordingly. This will enhance our market share and competitiveness in ASEAN and other world markets. This will strengthen Yieh Phui’s position as a global steel enterprise.

Yieh Phui offers safe and healthy living environment, Yieh Phui has pioneered the supply of “Anti-Microbial Coated Steel Sheets”. In 2018, to deal with rigorous concerns on hygiene of living, Yieh Phui developed “PhuizerGreen AMC Plus and ColorGreen AMC Plus ”. The products of “PhuizerGreen AMC Plus”, “ColorGreen AMC Plus ”, and “ColorGreen AS & AMC Plus ” all conform to the environmental regulation of RoHS and REACH of EU and are leading the trend of the time.

The product of hot-dip 5% Al-Zn coated and Al-Mg-Zn coated steel sheets are easy to process and highly anti-corrosion, suitable for use in solar power installation, satisfying the needs for green power worldwide.

Thus, Yieh Phui’s sale strategy is to focus on the high end markets and strengthen alliance with local agents to enhance timely service and develop suitable high-end & high quality products.

Ⅳ .Impact from competition, legal environment, and overall economy

  1. The impact of external environment to domestic market ：

  2. Cheap imports of steel products poured into Taiwan, filling the market with low-price, low-quality materials that pose potential risks to people’s lives and the quality of public infrastructure. As a countermeasure, the government joined the domestic coated steel manufacturers to put forward anti-dumping complaints against China and South Korea in 2016. The anti-dumping tax had been levied since August 22, 2016. Since the five year term is imminent, proposal has been made on February 19, 2021 to the government for ending the tax. In addition to the case above, there are still lower priced steel materials importing to Taiwan and the impact is closely monitored.

Besides, the US started the implementation of section 232 on March 23, 2018 and has imposed 25% duty on imported steel products, arousing protectionism worldwide. Since the implementation of a three-year ultimate defensive measure on imported steel by EU on February 2, 2019, Taiwan’s export to EU has been limited. The new US administration was inaugurated on January 20, 2021, and has yet not to announce its policy on Section 232.

For the domestic market, the investment has slowed down and the clampdown on

－8－

farmhouses, building on farmland and tearing down on new violations have contributed to the lower the demand for galvanized steel products, hurting the domestic market. In contrast, to deal with the energy policy of the government, the rise of green energy industry, the increase in solar power and wind power, all will contribute to related industries and the sale of coated steel.

In addition, President Biden’s trade policy toward China and the pandemic situation are still blocking the prospect of China’s economy and the steel market. To avoid any adverse impact, Taiwanese businessmen based in China have massively moved back to Taiwan, benefiting the domestic market.

2.

The impact of external environment to the market of China ：

Between 2008 and 2015,China has rapidly expanded its steel production and exports. Many countries around the world have retaliated, forcing China to implement supply side reform. In 2016, China strongly cuts steel capacity; in 2017 China further enforced cuts on dirty steel and allows no production during winter. China limited steel production to protect the environment in 2018 and introduced capacity duo control in 2021. With more rigorous environment protection policies, global protectionism and the trade war between the US and China, the steel industry reform will be on-going and more infrastructure will be done in China. The export of steel from China will decline as it did since 2016, rendering good prospect for the steel business of the world.

3.

The impact of external environment to the export market ：

In the global market, due to anti-dumping of numerous countries and defensive measures against China’s dumping, Taiwan has been adversely affected, particularly the accusation on anti-dumping and anti-subsidy by the US. The most severe impact is the section 232 imposition of 25% tariff on steel and aluminum, causing the dramatic increase of the price of steel. This prompted EU to adopt ultimate defensive measure on imported steel in February 2019. When there is over-supply of steel in EU and the US, the demand for imported products will drastically dwindle.

In November 2020, the "Regional Comprehensive Economic Partnership Agreement" (RCEP) was signed in the free trade negotiations between the 10 ASEAN countries plus China and 5 foreign countries (excluding India). Compared 、 to major competitors: China Japan and South Korea, Taiwan will be less competitive due to the lack of preferential tariff in Southeast markets. Also, Vietnam has increased steel capacity and utilization, becoming a competitor to Taiwan and massively hindering Taiwan’s steel export.

Under comprehensive vaccination, the world will be able to get over the impact of the pandemic gradually, bringing good prospect of the economy. In addition,

－9－

Worldsteel released the demand for global steel in October 2020, predicting the demand to go down by 2.4% in 2020, but increase by 4.1% in 2021. After a difficult 2020, 2021 will be a drastic turn for the steel industry. Though there may still be challenges or fluctuations, Yieh Phui surely will cope with them in a timely fashion.

Chairman: I-Shou Lin

Manager: Lin-Maw Wu

Accounting Supervisor: Chien-Hung Lin

－10－

Chapter 2 Company Profile

I. Date of Incorporation:

Date of incorporation: April 14, 1978

License number: Unified Business No. 75947936

II. Corporate History:

  1. Mergers and Acquisitions in the most recent year up to the date of publication of this annual report: none.

  2. Invested companies: please see details on page 404

  3. Company restructuring: none

  4. Massive transfer or exchange of the Company's shares by directors, supervisors or persons holding more than 10 percent of the Company's shares: none

  5. Major changes in ownership and its impact on the Company: none.

  6. Major changes in management or business: none

  7. Other important matters that may affect shareholders' interests and their impact on the Company:

1978.04 Kuo Chiao Enterprise Co., Ltd. was established with a capital of NT$1,600,000.

1986.03 Revised company name to Yieh Phui Enterprise Co., Ltd.

1990 Production began by establishing the first cold-rolling machine (January), the first pickling production line (May), and the first continuous coating production line (December).

1991.05 Production began by establishing the first galvanization production line.

1993.08 Galvanized steel plate and painted steel plate certified by the Japanese company of JIS MARK.

1994.04 Production began by establishing the second galvanizing line. 1995.07 Yieh Phui officially became a listed company. 1996.08 Production began by establishing the second cold-rolling machine. 1997.02 Acquisition of the second continuous coating line. 1997.07 Introduced the TPM management developed by Japan Institute of Plant Maintenance (JIPM).

1997.09 Production began by establishing the third galvanizing line. 1998.05 Officially signed the contract for the fourth continuous galvanizing line, for an annual output of 250,000 tons. Environmental protection specialist won awards and commended by the President.

1999.05 Signed a contract with KHI Japan for the third rolling line. 2000.02 The fourth continuous galvanizing line (Pingtung) launched into a hot test. 2000.05 The third continuous paint line launched into a hot test. 2001.11 Won the JIPM TPM Awards.

2002.11 Official ground-breaking ceremony for the Changshu Technomaterial Co., Ltd. In Mainland China (total investment of US$231 million with a capital of US$79 million).

－11－

2003.01 The board of directors approved purchase of the assets of Yieh Hsing steel pipe factory I, steel pipe factory II, galvanizing factory, cold rolling mill machinery division and administration building and investment in Lien kang Heavy Industrial Co., Ltd (approved by the board of directors).

2004.12 Won the JIPM-TPM Awards for continuous pursuit of excellence.

2005.08 Merged Lien Kang Heavy Industrial Co., Ltd. and established Engineering Business Division.

2006.08 Yieh Phui Enterprise Co., Ltd. took over EMMT Systems Corp.

2010.03 Won the JIPM "Special Award for TPM Achievement 2009".

2011.03 Yieh Phui's origional steel pipe business division spun off to Shin Yang Steel Co., Ltd., a 100% owned subsidiary of Yieh Phui.

2011.07 The brand"Yieh Phui" was named one of Taiwan's Top Brands in the Centennial Celebration Campaign of the Ministry of Economic Affairs. 2016.03 Won the JIPM Advanced Special Award 2015.

2018.08 Elected as the "Tax ID Leader of the Year" by the Ministry of Finance. 2018.12 Won the gold certification of TTQS, Talen Quality-management system, issued by the Ministry of Labor.

2019.12 Won the "Health Management Award" and "Excellent Promotion Staff" award of outstanding excellent healthy workplaces from the Health Promotion Administration, Ministry of Health and Welfare in 2019.

2020.11 Passed the gold certification of Talent Quality-management System (TTQS),

－12－

Chapter 3 Corporate Governance Report

I. Organization:

(I) Structure of Organization :

December 31, 2020

Organization of Yieh Phui Enterprise Co., Ltd.

==> picture [715 x 389] intentionally omitted <==

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

Remuneration Board of Directors Audit Committee
Committee
The Auditor's Office
Chairman
Chairman's Office
Vice Chairman
President
China Business
Division Technology Planning Office
Overseas Technology Steel Pipe Technology Office
Office
Trade Safeguards and Investigation
Expansion Planning Office
Committee
Executive Vice President
Dept. of Administration and
Analytics
President's Staff
Office Dept. of Business Planning
Dept. of Innovation Promotion
Vice President - Global Marketing & Sales Vice President - Finance Vice President - Technology Vice President - Planning Administration DivisionVice President, Vice President - Engineering Vice President - Production
Assistant VP - Global Assistant VP - Technology Assistant VP - Planning Vice President's Office
Marketing & Sales
Vice President's Vice Vice President's Vice President's Vice President's Vice Vice President's
Office President's Office Office Office President's Office Technology
Office Office Development
－13－
Pre-
Sales Division I ng & Domestic Marketi Sales Division II ng & Domestic Marketi Sales Division I Export Marketing & Sales Division II Export Marketing & Division Marketing Development Finance Division Investing Division Technology Division Division Technical Service Division Information System Division Production Planning Division Sales Management Research Office Import and Market Human Resources Public Affairs Office Office TPM Development Office Purchasing Division Division Mechanical Production Production Division Steel Structure Technology Division Steel Structure Production Division Pickling and Rolling Production Division Galvanizing Steel Production Division Painting Steel Division Pingtung Production Utilities Division Division I Mechanical Maint Division II Division I Electrical Engineering Division II Electrical Engineering Office Engineering Design
Industrial Safety & Health Construction Division Steel Structure Sales & enance Mechanical Maintenance
----- End of picture text -----

－13－

(II) Roles and Responsibility of Departments:

Department Content of Business
The Auditor's Office Implements the audit system and provides advises for improvement to the
management.
Expansion Planning
Committee		 Sets equipment standards and specifications, plans and analyzes overall
expansion and manages coordination and installationprogress.
Trade Safeguards and
Investigation Office
Handles domestic and international anti-dumping and trade remedy actions.
President's Staff
Office		 Carries out organizational planning and coordination, implements and manages
the internal control system and standardization, tracks and analyzes corporate
goals andperformance,andpromotes innovation affairs.
Division I and
Division II of the
Domestic Marketing
& SellingDivisions		 Processes requests for import and export price quotes and orders, manages
contacts for shipment and executes sales campaigns.
Division I and
Division II of the
Export Marketing &
SellingDivisions		 Manages development of the domestic and international markets.
Marketing
Development
Division		 Carries out accounting, tax filing, costing, budgeting and variance analysis,
financial management, asset management and shareholder services.
Finance Division Carries out studies on foreign investments and analysis on the effectiveness.
Investing Division Manages production technology development, quality control and product
specifications.
TechnologyDivision Manages after-sale services and technical improvement.
Technical Service
Division		 Manages development of the Company's computerized management system,
installation and maintenance of hardware equipment.
Information System
Division		 Manages production schedules based on the orders and production plan, order
deliveryand shipment and trackingand raw material storage and management.
Production Planning
Division		 Manages shipping of customer orders, vehicle dispatch and shipment verification.
Sales Management
Division		 Carries out survey and analysis on the domestic and foreign markets and manages
raw materialsprocurement.
Import and Market
Research Office		 Manages personnel, general affairs and documents and other relevant matters.
Human Resources Handlespublic relations affairs.
Public Affairs Office Manages and implements the Company's workplace and labor safety and health
related matters.
Industrial Safety &
Health Office		 Implements TPM Management activities, including individual improvement,
self-maintenance, planned maintenance, education and training, health and safety,
quality management, initial flow management, planning and monitoring the
efficiencyof indirect departments.

－14－

TPM Development
Office		 Manages procurement and related matters.
Purchasing Division Manages marketing, contracting, budgeting, cost control and work progress for
engineering projects,actingto control and coordinated cross-departmental works.
Steel Structure Sales
& Construction
Division		 Manages manufacturing, installation and contractors for steel structures and
coordinates related works.
Steel Structure
Production Division		 Manages technology planning, project quality control and construction drawings
for steel structures.
Steel Structure
TechnologyDivision		 Manages sales, production planning, design, manufacturing and installation
related matters for liftingequipment and other engineering projects.
Mechanical
Production Division		 Manages improvement of production equipment and processes.
Technology
Development Office		 Manages production line operations, production efficiency and quality
improvement.
Production Divisions Manages operations and maintenance of public and wastewater treatment
facilities.
Utilities Division Manages service and maintenance of on-site mechanical equipment and facilities.
Mechanical
Maintenance 1,2,2		 Manages service and maintenance of on-site electrical facilities.
Division I and
Division II of the
Electrical
EngineeringDivision
Carries out improvement of production line equipment, design of expansion
projects and review of design drawings.

－15－

II. Information on the Directors, President, Vice President, Associate Managers and Heads of Departments and Branch Offices:

(I) Information on Directors

March31,2021 March31,2021 March31,2021 March31,2021
Title Nationality
or Place of
Registration		 Name Gender Date Elected
(Appointed)		 Term Date of First
Elected		 Shares Held When Elected Number of Shares Held Shares held by spouse and
underage children		 Shares held
other p		 in names of
ersons		 Education and Work
Experiences		 Current Position in the
Company and/or Other
Company		 Any Executive Officer,
Director or Supervisor Who
is a Spouse or Relative
within the Second Degree
of Kinship		 Remarks
(Note)
Number of
Shares		 Shareholding
ratio		 Number of
Shares		 Shareholding
ratio		 Number of
Shares		 Shareholding
ratio		 Number of
Shares		 Shareholding
ratio		 Title Name Relations
Chairman Taiwan,
R.O.C.		 Kuo Chiao Investment &
Development Co., Ltd.
Representative: I-Shou Lin		 Male 2019.06.21 Three
years		 2004.06.20 60,657,497
157,096		 3.23 61,870,646
160,237		 3.27 52,470 0 0 0 Yieh United - Chairman of the
Board
Yieh Hsing - Director		 Yieh Phui - Chairman of the
Board
Able Win International
Investment Limited - chairman
of the board
Wei Hung Investment Co.,
Ltd. - Chairman of the Board		 None None None None
Director Taiwan,
R.O.C.		 Kuo Chiao Investment &
Development Co., Ltd.
Representative: Lin-Maw Wu		 Male 2019.06.21 Three
years		 2005.09.28 60,657,497
136,252		 3.23 61,870,646
204,026		 3.27 0 0 0 0 EMBA, National Sun Yat-Sen
University
Yieh Phui, VP Global
Marketing and Sales		 Yieh Phui - President
Yieh Phui (China) - Chairman
of the Board
Shin Yang Steel Co., Ltd. -
Chairman of the Board		 None None None None
Taiwan,
R.O.C.		 Kuo Chiao Investment &
Development Co., Ltd.
Representative: Ping-Yung
Liang		 Male 2019.06.21 Three
years		 2015.10.15 60,657,497
45,196		 3.23 61,870,646
46,099		 3.27 136,950 0 0 0 Department of Industrial and
Information Management,
National Cheng Kung
University
Deputy CEO of Yieh Lian
Group Head Office, President
of YUSCO, Senior Consultant
and Special Assistant to the
Chairman - YUSCO		 Chairman of the Group
Purchasing Management
Committee and Special
Assistant to the Chairman,
Union Group		 None None None None
Taiwan,
R.O.C.		 Kuo Chiao Investment &
Development Co., Ltd.
Representative: Ching-Tsung
Huang		 Male 2019.06.21 Three
years		 2005.09.28 60,657,497
0		 3.23 61,870,646
0		 3.27 12,018 0 0 0 Department of Accounting,
Feng Chia University
Special Assistant, Eliter
International Corp.		 Chia Yuan Investment &
Development Co., Ltd -
Chairman of the Board
Hsing Long Investment &
Development Co., Ltd. -
Director
Lien Shua Investment
Development Co., Ltd. -
Director		 None None None None
Independent
Director		 Taiwan,
R.O.C.		 Chin-Shu Sun Male 2019.06.21 Three
years		 2013.06.20 0 0.00 0 0.00 0 0 0 0 Department of Accountancy,
National Cheng Kung
University
CPA, Republic of China in
practice for over 40 years
Chairman of the Kaohsiung
City Institute of Certified
Public Accountants
Member of the National
Federation of CPA
Associations of R.O.C.
Supervisor of the Taiwan
Provincial Institute of Certified
Public Accountants
Yieh Phui - Independent
Director
Yieh Hsing Enterprise Co.,
Ltd. - Independent Director
Li Hsin Management
Consultant - Chairman
Co-Tech Development
Corporation - Independent
Director
Chi Chiang Enterprise Co.,
Ltd. - Chairman
Chi Hsin Management
Consultant Co., Ltd. -
Chairman
Jing-Shin Co.,Ltd. - Chairman		 None None None None
Independent
Director		 Taiwan,
R.O.C.		 Te-Yuan Yang Male 2019.06.21 Three
years		 2016.06.22 0 0.00 0 0.00 0 0 0 0 PhD Economics, University of
California, Santa Barbara
Assistant Lecturer, Department
of Economics, University of
California, Santa Barbara
Director, Department of
Finance, National Kaohsiung
University of Science and
Technology
Member of Remuneration
Committee, Yieh Phui
Enterprise Co., Ltd.
Member of Remuneration
Committee, Yieh Hsing Co.,
Ltd.
Yieh Hsing Enterprise Co.,
Ltd. - Independent Director
Yieh Phui - Independent		 None None None None

－16－

Title Nationality
or Place of
Registration		 Name Gender Date Elected
(Appointed)		 Term Date of First
Elected		 Shares Held When Elected Number of Shares Held Shares held by spouse and
underage children		 Shares held by spouse and
underage children		 Shares held
other p		 in names of
ersons		 Education and Work
Experiences		 Current Position in the
Company and/or Other
Company		 Any Executive Officer,
Director or Supervisor Who
is a Spouse or Relative
within the Second Degree
of Kinship		 Any Executive Officer,
Director or Supervisor Who
is a Spouse or Relative
within the Second Degree
of Kinship		 Any Executive Officer,
Director or Supervisor Who
is a Spouse or Relative
within the Second Degree
of Kinship		 Remarks
(Note)
Number of
Shares		 Shareholding
ratio		 Number of
Shares		 Shareholding
ratio		 Number of
Shares		 Shareholding
ratio		 Number of
Shares		 Shareholding
ratio		 Title Name Relations
Independent
Director		 Professor, Department of
Money and Banking, National
Kaohsiung University of
Science and Technology		 Director
Taiwan,
R.O.C.		 Wen-I Chang Male 2019.06.21 Three
years		 2017.06.22 0 0.00 0 0.00 0 0 0 0 Passed the Civil Service
Special Examinations Class B
for Customs Officers and Civil
Service Special Examinations
for Tax Personnel in 1976
Internal revenue agent and
section head in Revenue
Service Office, Kaohsiung
County
Revenue assessor, section
chief, and inspector in
Kaohsiung Branch National
Tax Administration of
Southern Taiwan
Province(NTAS), Ministry of
Finance
nspector and auditor in
Fengshan Branch, National
Taxation Bureau of Kaohsiung,
Ministryof Finance		 Member of Remuneration
Committee, Yieh Phui
Enterprise Co., Ltd.
Member of Remuneration
Committee, Yieh Hsing Co.,
Ltd.
Yieh Hsing Enterprise Co.,
Ltd. - Independent Director
Yieh Phui - Independent
Director		 None None None None
Note: The Chairman of the Company and the President or equivalent (the top manager) are the same person, ar
explain the reasons, rationality, necessity and corresponding measures (such as increasing the number of
directors who do not serve as employees or managers, etc.) related information.		 e relatives of each other, such as spouse or first
independent directors, And there should be mor		 relative, and should
e than half of the

－17－

Table 1: Major Shareholders of Institutional Shareholders

March31,2021 March31,2021
Name of institutional
shareholders(Note 1)		 Major shareholders of institutional
shareholders(Note 2)		 Shareholding Ratio
Kuo Chiao Investment &
Development Co., Ltd.		 Yu Hong industrial Co., Ltd. 39.66%
KIU LING AMUSEMENT CO., Ltd. 12.55%
Kuo-Tung Investment and Development
Co.,Ltd.
12.27%
Wei Hong Investment and Development
Co.,Ltd.
11.43%
Yieh Mau Enterprise Co., Ltd. 11.23%

Note 1: For legal person directors and supervisors, the names of the institutional shareholders shall be disclosed. Note 2: Please declare names of the major shareholders (top 10 shareholders) and their shareholding of the

corporate shareholders. If the major shareholders are institutional shareholders, please fill out Table 2 below.

Note 3: The legal shareholder is not a company organizer. The name and shareholding ratio of the shareholder that should be disclosed previously disclosed name of the funder or donor and their contribution amount or contribution ratio.

－18－

Table 2: Major shareholders of the major institutional shareholders

Table 2: Major shareholders of the major institutional shareholders Table 2: Major shareholders of the major institutional shareholders Table 2: Major shareholders of the major institutional shareholders
March 31,2021
Name of Institutional Shareholder
(Note 1)
Major Shareholders of Institutional
Shareholders(Note 2)		 Shareholding Ratio
Yu Hong Industrial Co., Ltd. Tsung-ChengLin 26.00%
Tsung-Ching Lin 18.00%
Tsung-Hsien Lin 18.00%
Lin Chi-Long 18.00%
Lin Li-Chuan 10.00%
KIU LING AMUSEMENT CO.,
Ltd.		 Lin Li-Chuan 15.00%
Tsung-Ching Lin 20.00%
Tsung-ChengLin 20.00%
Tsung-Hsien Lin 20.00%
Jiayuan Investment Development
Co.,Ltd.
11.00%
Yu Hongindustrial Co., Ltd. 10.00%
Kuo-Tung
Investment
and
Development Co.,Ltd.		 Weiqiao Investment Development
Co.,Ltd.
30.03%

Lian Shuo Investment Development
Co.,Ltd.
24.00%
Wei
Hong
Investment
and
Development Co.,Ltd.
22.21%
Yieh Mau Enterprise Co., Ltd. 13.80%
Wei
Hong
Investment
and
Development Co., Ltd.		 Yieh Mau Enterprise Co., Ltd. 25.41%
I-Shou Lin 18.21%
Xinglong Investment Development
Co.,Ltd.
20.19%
Weiqiao Investment Development
Co.,Ltd.
13.40%
Chia
Yuan
Investment
and
Development Co.,Ltd.
11.39%
Lian Shuo Investment Development
Co.,Ltd.
10.42%
Yieh Mau Enterprise Co., Ltd.
 Tsung-ChengLin 10.75%
Lin Chi-Long 12.85%
Xinglong Investment Development
Co.,Ltd.
19.34%
Wei
Hong
Investment
and
Development Co.,Ltd.
18.26%
Weiqiao Investment Development
Co.,Ltd.
11.01%

~~Note 1: As shown in Table 1 above, when a major shareholder is an institutional shareholder, disclose the name of~~ the institution.

Note 2: Names of major shareholders (ranked top 10 in terms of shareholding) in the corporate shareholders and their shareholding ratio shall be filled in this section. Note 3: The legal shareholder is not a company organizer. The name and shareholding ratio of the shareholder that should be disclosed previously disclosed name of the funder or donor and their contribution amount or contribution ratio.

－19－

March 31, 2021

Director profile (2)

Requirement
Name
(Note 1)		 Has more than 5 years of work experience
and the following professional qualifications		 Has more than 5 years of work experience
and the following professional qualifications		 Has more than 5 years of work experience
and the following professional qualifications		 Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Currently
serving as
the
independent
director of
other public
companies

Serve in
lecturer roles
or above in
public or
private college
institutions in
one of the
following
departments:
business
administration,
law, finance,
accounting, or
another
discipline
relevant to the
company's
operations

Currently
serving as
ajudge,
prosecutor,
lawyer,
accountant,
or other
professional
practice or
technician
that must
undergo
national
examinations
and
specialized
license.		 Work
experience
necessary for
Business
administration,
legal affairs,
finance,
accounting, or
business sector
of the
Company

1		 2 3 4 5 6 7 8 9 10 11 12
Director: I-Shou Lin ✓ - - ✓ - - - ✓ ✓ ✓ ✓ ✓ - None
Director: Ping-Yung
Liang		 ✓ - - ✓ - - ✓ ✓ ✓ ✓ ✓ ✓ - None
Director: Lin-Maw
Wu		 ✓ - - ✓ - - ✓ ✓ ✓ ✓ ✓ ✓ - None
Director:
Ching-TsungHuang		 ✓ - - ✓ - - ✓ ✓ ✓ ✓ ✓ ✓ - None
Independent
Director: Te-Yuan
Yang		 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 2
Independent
Director: Chin-Shu
Sun		 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 3
Independent
Director: Wen-I
Chang		 ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 2

Note 1: The number of fields depends on the actual number.

  • Note 2: Please “  ” the box under each criteria number if the director or supervisor meets the criteria two years prior to resuming the position or during the term of service.

  • （ 1 ） A person who is not employee of the Company or its affiliated enterprises.

  • （ 2 ） A person who is not serving as a Director or Supervisor of the Corporation or any affiliated business (this does not apply in cases where the person is an Independent Director of the Company, its parent or subsidiary established in pursuant to this law or local laws and regulations).

  • （ 3 ） A natural person who is not a shareholder that hold more than 1% of the Company’s total shares or rank among top-10 shareholders, this applies for the Director him/herself, spouse, minor children, or shares held under others’ names.

  • （ 4 ） Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the officers in the preceding (1), or of any of the above persons in the preceding (2) and (3).

  • （ 5 ） Not a director, supervisor, or employee of a corporate/institutional shareholder that directly holds five percent or more of the total number of issued shares of the Bank, ranks as its top five shareholders, or has representative director(s) serving on the company’s board as director(s) or supervisor(s) based on paragraph 1 or paragraph 2, Article 27 of the Company Law, except where the Bank and its parent company, subsidiaries or subsidiaries of the same parent are serving concurrently as independent directors set up in accordance with the Securities and Exchange Act or local laws.

  • （ 6 ） Not a director, supervisor or employee of a company controlled by the same person who has shares over half of the Company's director seats or voting rights (except for an independent director

－20－

appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent).

  • （ 7 ） Not a director, supervisor, or employee of another company or institution who, or whose spouse, is a chairman, president, or person holding an equivalent position of the Company (except for an independent director appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent).

  • （ 8 ） Not a director, supervisor, managerial officer, or shareholder holding 5% or more of the shares of a specified company or institution that has a financial or business relationship with the Company (except for a specific company or institution holding more than 20% but less than 50% of the total issued shares of the Company and concurrently serving as an independent director, as appointed in accordance with the Act or the laws and regulations of the local country, at the Company and its parent or subsidiary or a subsidiary of the same parent).

  • （ 9 ） Not a professional individual, sole proprietorship, partnership, owner of a company or institution, partner, director, supervisor, managerial officer or spouse thereof that provides auditing service for the Company or any of its affiliates, or provides commercial, legal, financial, or accounting service with cumulative remuneration less than NT$500,000 in the past two years. This restriction does not apply to a member of the Remuneration Committee, Public Tender Offer Review Committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Securities and Exchange Act or to the Business Mergers and Acquisitions Act or related laws or regulations.

  • （ 10 ） Who have spousal or second-degree kinship relationships to any other director within the Company

  • （ 11 ） Where none of the circumstances in the subparagraphs of Article 30 of the Company Act applies.

  • （ 12 ） No person shall be elected in the capacity of the government, a juristic person, or a representative thereof, as provided in Article 27 of the Company Act.

－21－

(III) Information on the Company's President, Vice President, Associate Manager, and the Supervisors of all the Company's divisions and branch units.

March31,2021 March31,2021 March31,2021 March31,2021
Title Nationality Name Gender Date Elected
(Appointed)		 when elected Shares held by spouse or minor
children		 Shares held in nam es of other persons Education and Work
Experiences		 Positions Currently
Held in Other
Companies		 Managers who have spousal or
second-degree family relationships
within the Company		 Remarks
(Note)
Number of
Shares		 Shareholding
ratio		 Number of
Shares		 Shareholding
ratio		 Number of Shares Shareholding ratio Title Name Relations
President Taiwan, R.O.C. Lin-Maw Wu Male 2002.10.22 204,026 0 0 0 0 0 Master, National Sun Yat-Sen
University
Yieh Phui, VP Global
Marketing and Sales		 Yieh Phui (China) -
Chairman of the
Board
Yieh United -
Supervisor
Yieh Hsing -
Chairman		 None None None None
Senior Consultant Taiwan, R.O.C. Tian-Ji Zhang Male 2005.08.01 161,972 0 0 0 0 0 National Chengchi University
Finance Manager, Yieh Phui		 Kuo Chiao -
Supervisor
Chien Huan -
Supervisor
Chen Hua - Chairman
Chen Hao - Chairman		 None None None None
Senior Consultant Taiwan, R.O.C. Hsien-Tung Liu Male 2006.09.08 0 0 0 0 0 0 MBA, Embry-Riddle
Aeronautical University,
Colorado, USA
TangEng- Chairman		 Yeo Yih Steel -
Chairman		 None None None None
Senior Consultant Taiwan, R.O.C. Ching-Tsung Huang Male 2014.05.16 0 0 12,018 0 0 0 Feng Chia University
Special Assistant, Eliter
International Corp.		 Chia Yuan Investment
& Development Co.,
Ltd - Chairman of the
Board
Hsing Long
Investment &
Development Co.,
Ltd. - Director
Lien Shua Investment
Development Co.,
Ltd. - Director		 None None None None
Senior Consultant Taiwan, R.O.C. Hsien-Yao Chang Male 2017.09.01 0 0 0 0 0 0 PhD in Political Science,
Pantheon-Sorbonne
University, France
Legislator of 6th and 7th
Legislative Yuan
Specially appointed deputy
minister, Mainland Affairs
Council, Executive Yuan
Vice Chairman and Chief
Secretary, Straits Exchange
Foundation		 None None None None None
Special Assistant Taiwan, R.O.C. Chia-Cheng Lin Male 2012.08.01 0 0 0 0 0 0 The Taipei College of Science
and Technology
Vice President, Planning, Yieh
Phui		 E-United Group -
Chairman
Cheng Hsin Security -
Chairman		 None None None None
Special Assistant Taiwan, R.O.C. Chen-Wu Chang Male 2005.08.01 0 0 0 0 0 0 National Cheng Kung
University
Associate Manager,
Information System Division,		 E-United Group -
Vice Chairman		 None None None None

－22－

Title Nationality Name Gender Date Elected
(Appointed)		 when elected when elected Shares held by spouse or minor
children		 Shares held by spouse or minor
children		 Shares held in names of other persons Shares held in names of other persons Education and Work
Experiences		 Positions Currently
Held in Other
Companies		 Managers who have spousal or
second-degree family relationships
within the Company		 Managers who have spousal or
second-degree family relationships
within the Company		 Managers who have spousal or
second-degree family relationships
within the Company		 Remarks
(Note)
Number of
Shares		 Shareholding
ratio		 Number of
Shares		 Shareholding
ratio		 Number of Shares Shareholding ratio Title Name Relations
Yieh Phui
EMMT Systems Corp. -
Chairman
AWID Asia Corporation -
Chairman
Vice President -
Planning		 Taiwan, R.O.C. Wei-Cheng Chen Male 2006.03.14 340 0 0 0 0 0 University of Oklahoma
Associate Manager,
Production Planning Division
- Yieh Phui		 None None None None None
Vice President -
Production		 Taiwan, R.O.C. Yang-Cheng Lan Male 2003.10.01 0 0 0 0 0 0 National Cheng Kung
University
Plant Manager - Pre-painting
Steel Production Division		 None None None None None
Executive Vice
President		 Taiwan, R.O.C. Yung-Hsien Chen Male 2005.04.01 121,177 0 5 0 0 0 Tamkang University
Associate Manager, Finance
Division, Yieh Phui		 Yieh Phui (China) -
VP Finance
Yieh Hsing - VP
Finance
Yieh United -
Supervisor		 None None None None
Vice President -
Global Marketing
& Sales		 Taiwan, R.O.C. Shih-Chi Yang Male 2006.12.01 0 0 0 0 0 0 National Chengchi University
Manager, Global Marketing &
Sales,Yieh Phui		 None None None None None
Production
Assistant
Vice President		 Taiwan, R.O.C. Te-Jen Huang Male 2006.03.01 0 0 0 0 0 0 National Cheng Kung
University
Manager, Technology Division
- Yieh Phui		 None None None None None
Vice President -
Technology		 Taiwan, R.O.C. Ting-Kuo Shih Male 2004.06.01 0 0 0 0 0 0 National Cheng Kung
University
Manager, Technology Division
- Yieh Phui		 None None None None None
Production
Assistant
Vice President		 Taiwan, R.O.C. Cheng-Feng Wu Male 2005.12.01 318 0 700 0 0 0 National Chiao Tung
University
Manager, Electrical
Maintenance Division, Yieh
Phui		 None None None None None
Vice President,
Administration
Division		 Taiwan, R.O.C. Wen-Pin Lin Male 2008.05.16 109 0 302 0 0 0 Feng Chia University
Manager, Management
Division		 None None None None None
Vice President of
Technical Planning
Office		 Taiwan, R.O.C. Sen-Lung Chen Male 2003.08.16 21,325 0 1,655 0 0 0 National Cheng Kung
University
Manager, Technical Service
Division,Phieh Phui		 Director - Yieh Phui
(China)		 None None None None
Senior Manager Taiwan, R.O.C. Kuo-Lin Yang Male 2004.06.01 1,703 0 0 0 0 0 National Kaohsiung University
of Applied Sciences
Plant Manager, Galvanizing
Steel Production Division		 VP Technology - Yieh
Phui (China)		 None None None None
Senior Consultant Taiwan, R.O.C. Yong-Fang Zhang Male 1997.05.01 179,041 0 1,512 0 0 0 National Taiwan Ocean
University
Associate Manager, Plating
Plant,Yieh Phui		 Vice Chairman and
President - Yieh Phui
(China)		 None None None None
Senior Manager Taiwan, R.O.C. Wen-Chih Liu Male 2014.12.01 0 0 0 0 0 0 Master Degree, National
Taiwan University
Manager, US Kraft Heinz
Company Taiwan
Manager,Unilever Taiwan		 Tianjin Lianfa - Vice
President		 None None None None

－23－

Title Nationality Name Gender Date Elected
(Appointed)		 when elected when elected Shares held by spouse or minor
children		 Shares held by spouse or minor
children		 Shares held in names of other persons Shares held in names of other persons Education and Work
Experiences		 Positions Currently
Held in Other
Companies		 Managers who have spousal or
second-degree family relationships
within the Company		 Managers who have spousal or
second-degree family relationships
within the Company		 Managers who have spousal or
second-degree family relationships
within the Company		 Remarks
(Note)
Number of
Shares		 Shareholding
ratio		 Number of
Shares		 Shareholding
ratio		 Number of Shares Shareholding ratio Title Name Relations
Senior Manager Taiwan, R.O.C. Chuan-Hsiang Huang Male 2015.04.01 0 0 0 0 0 0 National Chung Hsing
University		 E-United Group -
Assistant Vice
Chairman		 None None None None
Professional
Engineer		 Taiwan, R.O.C. Wen-Chao Huang Male 2008.03.01 44,969 0 0 0 0 0 Institute of Metallurgical
Materials, Illinois Institute of
Technology
Manager, Technical
Management Office		 Yieh Phui (China) -
Vice President		 None None None None
Associate Manager,
Galvanizing
Production
Division		 Taiwan, R.O.C. Shun-Chin Tsao Male 2009.10.01 0 0 0 0 0 0 National Taiwan Ocean
University
Plant Manager, Yieh Phui
PingtungPlant		 None None None None None
Professional
Manager		 Taiwan, R.O.C. Jung-Chang Liao Male 2009.11.01 0 0 0 0 0 0 National Chiao Tung
University
Manager, Production Planning
Division,Yieh Phui		 Associate Manager,
E-United Group		 None None None None
Mechanical
Production
Division
Associate Manager		 Taiwan, R.O.C. Chiu-Lin Pan Male 2010.03.01 122,712 0 0 0 0 0 National Chiayi Institute of
Agriculture
Plant Manager, Mechanical
Production Division, Yieh
Phui		 None None None None None
Senior Manager Taiwan, R.O.C. Chi-Chen Li Male 2010.10.01 826 0 0 0 0 0 National Sun Yat-Sen
University
Manager, President Staff's
Office		 E-United Group -
Assistant Vice
Chairman		 None None None None
Associate Manager,
Mechanical
Maintenance
Division		 Taiwan, R.O.C. Sheng-Wei Sung Male 2011.09.01 2,853 0 0 0 0 0 Chin-Yi Institute of
Technology
Chung Hung Co., Ltd.		 None None None None None
Associate Manager,
Finance
Department		 Taiwan, R.O.C. Chien-Hung Lin Male 2012.03.05 0 0 0 0 0 0 National Chengchi University
Manager, Chinfon Commercial
Bank Co., Ltd.
Manager, Far Eastern
International Bank
None		 None None None None
Senior Manager Taiwan, R.O.C. Wei-Cheng Chen Male 2012.11.08 33,943 0 0 0 0 0 Provincial Pingtung Institute
of Agriculture
RESA Engineering Corp.
Ting Ku Construction Co.,
Ltd.		 E-United Group -
Vice Chairman		 None None None None
Associate Manager,
Domestic
Marketing & Sales
Division I		 Taiwan, R.O.C. Ming-Chi Tien Male 2014.09.01 0 0 0 0 0 0 Chung Yuan Christian
University
Manager, Domestic Marketing
& Sales Division		 None None None None None
Associate Manager,
Steel Structural
Sales &
Construction
Division		 Taiwan, R.O.C. Wei-Kung Chang Male 2015.04.01 0 0 0 0 0 0 Cultural University
Associate Manager, Steel Tube
Division, Hsin Yang		 None None None None None
Associate Manager
of Information
System Division		 Taiwan, R.O.C. Chun-Kai Huang Male 2015.05.01 0 0 0 0 0 0 National Kaohsiung Institute
of Technology
Manager, Information System
Division		 None None None None None
Associate Manager,
Production
PlanningDivision		 Taiwan, R.O.C. Yuan-Hsing Kuo Male 2015.06.01 0 0 0 0 0 0 Feng Chia University
Senior Manager, Sales
Management Division		 None None None None None
Assistant Manager, Taiwan,R.O.C. Wen-ChengPan Male 2015.09.01 5,753 0 0 0 0 0 ChungYuan Christian None None None None None

－24－

Title Nationality Name Gender Date Elected
(Appointed)		 when elected when elected Shares held by spouse or minor
children		 Shares held by spouse or minor
children		 Shares held in names of other persons Shares held in names of other persons Education and Work
Experiences		 Positions Currently
Held in Other
Companies		 Managers who have spousal or
second-degree family relationships
within the Company		 Managers who have spousal or
second-degree family relationships
within the Company		 Managers who have spousal or
second-degree family relationships
within the Company		 Remarks
(Note)
Number of
Shares		 Shareholding
ratio		 Number of
Shares		 Shareholding
ratio		 Number of Shares Shareholding ratio Title Name Relations
Vice President's
Office		 University
Senior Manager, President
Staff's Office
Associate Manager,
TPM Development
Office		 Taiwan, R.O.C. Wen-I. Weng Male 2016.01.06 44,753 0 0 0 0 0 The Taipei College of Science
and Technology		 None None None None None
Assistant Vice
President,
Technology
Division		 Taiwan, R.O.C. Ping-Lin Yang Male 2016.03.01 0 0 0 0 0 0 I-Shou University
Senior Manager, Technology
Division		 None None None None None
Associate Manager,
Technical
Management Office		 Taiwan, R.O.C. Chung-Chan Chiang Male 2016.03.01 130 0 0 0 0 0 Feng Chia University
Senior Manager, Technology
Development Office		 None None None None None
Associate Manager,
Trade Management
Office		 Taiwan, R.O.C. Wen-Chung Tien Male 2017.02.01 91,939 0 0 0 0 0 Feng Chia University
Finance Manager		 None None None None None
Associate Manager,
Public Affairs
Office		 Taiwan, R.O.C. Chia-En Kuo Male 2017.02.01 0 0 0 0 0 0 Chung Yuan Christian
University
Manager, Import and Market
SurveyOffice		 None None None None None
Associate Manager,
Domestic
Marketing & Sales
Division II		 Taiwan, R.O.C. Wei-Pin Kan Male 2017.03.01 0 0 0 0 0 0 Yung Ta Institute of
Technology & Commerce
Manager, Domestic Marketing
& Sales Division I		 None None None None None
Professional
Manager		 Taiwan, R.O.C. Zhen-Hsiang Lin Male 2018.06.01 1,094 0 0 0 0 0 National Kaohsiung Marine
University
Senior Manager		 Yilian Group
Associate Manager		 None None None None
Associate Manager,
Utilities Division		 Taiwan, R.O.C. Hui-Fung Li Male 2018.06.01 2,426 0 9,455 0 0 0 National Taiwan Ocean
University
Senior Manager		 None None None None None
Professional
Manager		 Taiwan, R.O.C. Hui-Jung Liao Male 2019.03.01 76 0 4 0 0 0 National Kaohsiung First
University of Science and
Technology
Senior Manager		 Yilian Group
Associate Manager		 None None None None
Professional
Manager		 Taiwan, R.O.C. Zhi-Jian Cheng Male 2019.05.01 0 0 0 0 0 0 Daye University Master
Professional Manager		 Yieh Phui (China) -
Vice President		 None None None None
Associate Manager,
Market
Development
Division		 Taiwan, R.O.C. Wen-Hong Chen Male 2019.07.01 0 0 0 0 0 0 Master, National Sun Yat-Sen
University
Market Development Manager		 None None None None None
Associate Manager,
Export Division I		 Taiwan, R.O.C. Fu-Cai Huang Male 2019.07.01 0 0 0 0 0 0 Chung Yuan Christian
University
Export Manager II		 None None None None None
Associate Manager,
Pingtung
Production
Division		 Taiwan, R.O.C. Tian-fu Hong Male 2020.03.02 37,300 0 1,869 0 0 0 National Kaohsiung University
of Applied Sciences
Pingtung Production Manager		 None None None None None
Professional
Engineer		 Taiwan, R.O.C. Chin-Liang, Tsai Male 2020.07.11 0 0 0 0 0 0 Kao Yuan University
Associate Manager of Yieh
Phui(China)		 Assistant Vice
President - Yieh Phui
(China)		 None None None None
Professional
Manager		 Taiwan, R.O.C. Wei-Min Chen Male 2020.07.11 0 0 0 0 0 0 Cultural University
Assistant Vice President, Yieh
Phui(China)		 Yieh Phui (China) -
Vice President		 None None None None
Professional
Engineer		 Taiwan, R.O.C. Chao-Hsien, Li Male 2020.07.11 1,534 0 0 0 0 0 Cheng Shiu Junior College of
Technology
Associate Manager of Yieh		 Assistant Vice
President - Yieh Phui
(China)		 None None None None

－25－

Title Nationality Name Gender Date Elected
(Appointed)		 when elected when elected Shares held by spouse or minor
children		 Shares held by spouse or minor
children		 Shares held in names of other persons Shares held in names of other persons Education and Work
Experiences		 Positions Currently
Held in Other
Companies		 Managers who have spousal or
second-degree family relationships
within the Company		 Managers who have spousal or
second-degree family relationships
within the Company		 Managers who have spousal or
second-degree family relationships
within the Company		 Remarks
(Note)
Number of
Shares		 Shareholding
ratio		 Number of
Shares		 Shareholding
ratio		 Number of Shares Shareholding ratio Title Name Relations
Phui(China)
Professional
Manager		 Taiwan, R.O.C. Chi-Min Chou Male 2020.09.01 0 0 0 0 0 0 Ph.D., National Cheng Kung
University
Manager,E-United Group		 Yilian Group
Associate Manager		 None None None None
Professional
Manager		 Taiwan, R.O.C. Cheng-Yen Hsieh Male 2020.09.01 56,469 0 0 0 0 0 I-Shou University
Head of General Affairs
Section, Yieh Phui Enterprise
Co.,Ltd		 Yilian Group
Senior Manager		 None None None None

Remarks: Where the Chairperson of the Board of Directors and the General Manager or person of an equivalent post (the highest level manager) of a company are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto. (such as increasing the number of Independent Directors and there should be more than half of the Directors who do not concurrently serve as employees or managers, etc.

－26－

III. Compensations to Directors, President, and Vice Presidents:

(I) Remuneration of Directors and Independent Directors (it shall disclose the remuneration paid to each individual)

Unit: NT$ thousands

Ti tle Name Remuneratio Remuneratio n of directo rs Sum of It
C, and D
Ra		 ems A, B,
to NIAT
tio		 Compensations Paid to Conc Compensations Paid to Conc Compensations Paid to Conc Compensations Paid to Conc urrent Employees urrent Employees Sum of Items A, B,
C, D, E, F, and G to
NIAT Ratio		 Sum of Items A, B,
C, D, E, F, and G to
NIAT Ratio		 Receiving
remuneratio
n from
reinvestment
enterprises
other than
the
Company’s
subsidiaries
or parent
company
Base Remuneration
(A)		 Retirement Pension
(B)		 Dire
Remune		 ctors'
ration (C)		 Business e xpense (D) Salary, bonus, and
special expenses (E)		 Retirement pension
(F)		 Employee rem uneration (G)
The
Compan
y		 All
companie
s listed in
this
financial
report		 The
Compan
y		 All
companie
s listed in
this
financial
report		 The
Compan
y		 All
companie
s listed in
this
financial
report		 The
Compan
y		 All
companie
s listed in
this
financial
report		 The
Compan
y		 All
companie
s listed in
this
financial
report		 The
Compan
y		 All
companie
s listed in
this
financial
report		 The
Compan
y		 All
companie
s listed in
this
financial
report		 The Company All companies
listed in this
financial report		 The
Compan
y		 All
companie
s listed in
this
financial
report
Cash
amoun
t		 Stock
amoun
t		 Cash
amoun
t		 Stock
amoun
t
Director Chairman Kuo Chiao
Investment &
Development
Co. Ltd
Representative
: I-Shou Lin		 4,173 6,254 - 112 112 560 1,076 0.66 1.01 8,760 10,962 10,907 10,907 3 - 3 - 3.33 3.99 11,110
Director Kuo Chiao
Investment &
Development
Co. Ltd
Representative
: Lin-Maw Wu
Director Kuo Chiao
Investment &
Development
Co. Ltd
Representative
: Ping-Yung
Liang
Director Kuo Chiao
Investment &
Development
Co. Ltd
Representative
: Ching-Tsung
Huang
Independen
t Director		 Independen
t Director		 Chin-Shu Sun 2,215 3,162 - - - - - 432 0.30 0.49 - - - - - - - - 0.30 0.49 -
Independen
t Director		 Te-Yuan Yang
Independen
t Director		 Wen-I Chang

－27－

  1. Please state the policy, system, standards and structure of independent directors ’remuneration payment, and describe the relevance to the amount of remuneration according to the responsibilities, risks, and time invested: (1) Remuneration for Independent Directors is paid on a monthly basis but not participating in the annual distribution of director's remuneration.

  2. (2) According to the Company's operating performance, the same year-end consolation fund will be awarded.

  3. Other than disclosure in the above table, Director remunerations earned by providing services (e.g. providing consulting services as a non-employee): None

  4. In this table, in the column of concurrent employees receiving related remuneration - "Retirement pension" has increased significantly from 2019, which is the pension received by Director Wu.

Table of Remuneration Range

(2) According to the Company's operating performance, the same year-end consolation
2.
Other than disclosure in the above table, Director remunerations earned by providing
3.
In this table, in the column of concurrent employees receiving related remuneration -		 fund will be awarded.
services (e.g. providing consulting services as a non-employee): None
"Retirement pension" has increased significantly from 2019, which is the pension received by Director Wu.
Table of Remuneration Range		 fund will be awarded.
services (e.g. providing consulting services as a non-employee): None
"Retirement pension" has increased significantly from 2019, which is the pension received by Director Wu.
Table of Remuneration Range		 fund will be awarded.
services (e.g. providing consulting services as a non-employee): None
"Retirement pension" has increased significantly from 2019, which is the pension received by Director Wu.
Table of Remuneration Range		 fund will be awarded.
services (e.g. providing consulting services as a non-employee): None
"Retirement pension" has increased significantly from 2019, which is the pension received by Director Wu.
Table of Remuneration Range
Table of Remuneration Ranges for Directors Name of Director
Total of (A+B+C+D) Total of (A+B+C+D+E+F+G)
The Company All companies listed in
this financial report H		 The Company All companies listed in this
financial report I
Less than NT$ 1,000,000 Lin-Maw Wu, Ching-Tsung
Huang, Ping-Yung Liang,
Chin-Shu Sun, Te-Yuan
Yang, Wen-I Chang		 Ching-Tsung Huang,
Ching-Tsung Huang, Te-Yuan
Yang		 Chin-Shu Sun, Te-Yuan
Yang, Wen-I Chang		 Te-Yuan Yang
From NT$ 1,000,000 to 1,999,999 Chin-Shu Sun, Wen-I Chang Ping-Yung Liang Ping-Yung Liang, Chin-Shu Sun,
Wen-I Chang
From NT$2,000,000 to 34,999,999 Lin-Maw Wu Ching-Tsung Huang Ching-Tsung Huang
From NT$3,500,000 to 4,999,999 I-Shou Lin I-Shou Lin I-Shou Lin
From NT$5,000,000 to 9,999,999 I-Shou Lin
From NT$10,000,000 to 14,999,999
From NT$15,000,000 to 29,999,999 Lin-Maw Wu Lin-Maw Wu
From NT$30,000,000 to 49,999,999
From NT$50,000,000 to 99,999,999
NT$100,000,000 or more
Total

－28－

(II) Remuneration for President and Vice Presidents (aggregate remuneration with name(s) indicated for each remuneration range)

Unit: NT$thousands Unit: NT$thousands Unit: NT$thousands
Title Name Salary (A) Retirement Pension (B) Bonuses and Special
Allowance etc. (C)		 Employee Remuneration (D) Sum of items A, B, C
and D to net income
after taxes (NIAT)
Ratio		 Receiving
remuneration
from
reinvestment
enterprises
other than
the
Company’s
subsidiaries
or parent
company
The
Company		 All
companies
listed in this
financial
report		 The
Company		 All
companies
listed in
this
financial
report		 The
Company		 All
companies
listed in
this
financial
report		 The Company All companies listed in
this financial report
(note 5)		 The
Company		 All
companies
listed in
this
financial
report
Cash
amount		 Stock
amount		 Cash
amount		 Stock
amount
President Lin-Maw Wu 17,250 19,725 11,357 11,366 4,329 4,705 7 - 7 - 4.48 4.87 1,225
Executive VP
concurrently
serve as Vice
President -
Finance		 Yung-Hsien
Chen
Vice President -
Global
Marketing &
Sales		 Shih-Chi
Yang
Vice President -
Production		 Yang-Cheng
Lan
Vice President -
Planning		 Wei-Cheng
Chen
Vice President -
Technology		 Ting-Kuo
Shih

－29－

Vice President -
Steel Pipe
Technology		 Chang-Hsin
Ming
( as of
November 30)
Vice President -
Engineering		 Yao-Hsing
Chien
Vice President,
Administration
Division		 Wen-Pin Lin

*Regardless of titles, compensations of employees with positions equivalent to President and Vice Presidents (such as General Manager, CEO, Director, etc.) shall be disclosed.

－30－

Table of Remuneration Range

Table of Remuneration Range
Compensations of Presidents and Vice Presidents by
Range		 Names ofthePresident and VicePresidents
The Company Allcompanieslistedinthisfinancial reportE
Less than NT$1,000,000
From NT$1,000,000 to 1,999,999 Chang-Hsin Ming,Wen-Pin Lin
From NT$ 2,000,000 to 34,999,999 Yung-Hsian Chen, Shih-Chi Yang, Yang-Cheng
Lan, Wei-Cheng Chen, Ting-Kuo Shih,
Yao-Hsing Chien		 Shih-Chi Yang , Yang-Cheng Lan,
Wei-Cheng Chen, Ting-Kuo Shih,
Chang-Hsin Ming, Yao-Hsing Chien,
Wen-Pin Lin
From NT$3,500,000 to 4,999,999 Yung-Hsien Chen
From NT$5,000,000 to 9,999,999
From NT$10,000,000 to 14,999,999
From NT$15,000,000 to 29,999,999 Lin-Maw Wu Lin-Maw Wu
FromNT$30,000,000 to49,999,999
From NT$50,000,000 to 99,999,999
NT$100,000,000 or more
Total

－31－

(III) Names of Managerial Officers on Employees' Compensations and the Status of Distribution

December 31, 2020
Unit: NT$ thousands		 December 31, 2020
Unit: NT$ thousands		 December 31, 2020
Unit: NT$ thousands		 December 31, 2020
Unit: NT$ thousands		 December 31, 2020
Unit: NT$ thousands
Title
(Note 1)		 Name
(Note 1)		 Stock amount Cash amount Total Percentage of total
compensations to
NIAT(%)
Manager President Lin-Maw Wu 0 35 35 0.0048%
Executive Vice
President		 Yung-Hsien Chen
Vice President -
Global Marketing
& Sales		 Shih-Chi Yang
Vice President -
Production		 Yang-Cheng Lan
Vice President -
Planning		 Wei-Cheng Chen
Vice President -
Technology		 Ting-Kuo Shih
Vice President,
Administration
Division		 Wen-Pin Lin
Associate
Manager		 Sheng-Wei Sung
Associate
Manager		 Shun-Chin Tsao
Professional
Engineer		 Wen-Chao Huang
Senior Consultant
Tian-Ji Zhang
Associate
Manager		 Hui-Fung Li
Senior Consultant Yong-FangZhang
Assistant Vice
President		 Te-Jen Huang
Professional
Engineer		 Chao-Hsien, Li
Professional
Engineer		 Chin-Liang, Tsai
Special Assistant Chen-Wu Chang
Associate
Manager		 Chun-Kai Huang
Associate
Manager		 Wei-Pin Kan
Associate
Manager		 Chung-Chan
Chiang
Associate
Manager		 Wen-Cheng Pan
Senior Manager Chi-Chen Li
Associate
Manager		 Tian-fu Hong
Associate
Manager		 Yuan-Hsing Kuo
Assistant Vice
President		 Cheng-Feng Wu
Assistant Vice
President		 Ping-Lin Yang
Senior Manager Kuo-Lin Yang
Professional
Manager		 Cheng-Yen Hsieh
Associate
Manager		 Wen-Hong Chen
Professional
Manager		 Zhen-Hsiang Lin
Associate
Manager		 Wen-I. Weng
Associate
Manager		 Ming-Chi Tien
Associate Fu-Cai Huang

－32－

Title
(Note 1)		 Name
(Note 1)		 Stock amount Cash amount Total Percentage of total
compensations to
NIAT(%)
Manager
Professional
Manager		 Zhi-Jian Cheng
Professional
Manager		 Jung-Chang Liao
Associate
Manager		 Chia-En Kuo
Professional
Manager		 Hui-Jung Liao
Professional
Manager		 Wei-Cheng Chen
Professional
Manager		 Chi-Min Chou
Associate
Manager		 Wen-Chung Tien
Associate
Manager		 Chiu-Lin Pan
Senior Consultant Hsien-TungLiu
Professional
Manager		 Wei-Min Chen
Associate
Manager		 Chien-Hung Lin
Special Assistant Chia-ChengLin
Senior Manager Wen-Chih Liu
Senior Manager Chuan-Hsiang
Huang
Senior Consultant
Ching-Tsung
Huang
Associate
Manager		 Wei-Kung Chang
Senior Consultant Hsien-Yao Chang

  • (IV) Name of employees receiving top 10 highest compensations and status of payment: Please refer to page 32 for details.

  • (V) Compare and analyze the total compensations paid to each of this Company's Directors, Supervisors, President, and Vice Presidents in the most recent two years by all companies listed in this Company's consolidated financial statements as a percentage of NIAT and describe the policies, standards, and packages for payment of and the procedures for determining of such compensations and its linkage to business performance

  • (1) Total compensations paid to the Company’s Directors, Supervisors, General Managers, and Deputy General Managers in the 2 most recent years and its proportion to NIAT.

2019 2019 2020 2020
Title Total
remuneration
paid to
Directors,
Supervisors,
President, and
Vice Presidents
as a % of net
income		 Total remuneration
paid to Directors,
Supervisors,
President, and Vice
Presidents in the
consolidated
financial statements
as a % of net
income		 Total
remuneration
paid to Directors,
Supervisors,
President, and
Vice Presidents
as a % of net
income		 Total remuneration
paid to Directors,
Supervisors,
President, and Vice
Presidents in the
consolidated
financial statements
as a % of net
income
Director -1.04% -1.48% 3.63% 4.48%

－33－

President
and Vice
Presidents		 -1.45% -1.59% 4.48% 4.87%

  • (2) Policies, standards, and packages of remuneration:

  • The Company pays fixed monthly traveling expenses to the Directors, monthly fixed remuneration and the same annual consolation fund to Independent Directors.

    • The salary of the Chairman shall be agreed upon by the board of directors in accordance with the standards of relevant industries and listed companies, and other payment shall be paid in accordance with the remuneration system.

  • The Company's remuneration paid to managerial officers is determined in accordance with the Company's remuneration system, overall operating performance, and the managerial officer's performance evaluation. Overall performance evaluation such as net profit after tax rate and personal appraisal items: 1. planning power 2. sense of responsibility 3. coordination 4. work performance 5. value of service 6. expertise in the job 7. moral integrity and other items.

  • In accordance with Article 30-1 of the Articles of Incorporation, the remuneration of the directors shall be less than 0.1% of the profits, if any, and the remuneration of the employees shall be more than 0.2%. In 2020, the remuneration of the directors was 0.1% of the profit and the remuneration of the managers was 0.2% of the profit.

  • (3) Procedures for setting remuneration and its relevance to business performance

  • The procedures for formulating remuneration packages are reviewed on a regular basis for the reasonableness of the remuneration structure in accordance with the Company's Remuneration Committee. Directors serve as employee and managers participate in operation and reasonable remuneration is provided which takes into consideration the Company's overall operation performance, individual performance achievement rate, and level of contribution to the company's performance are subject to review by the Remuneration Committee and submitted to the Board of Directors submitted to the board of directors for general agreement.

－34－

IV. Implementation of Corporate Governance

(I) Operations of the Board of Directors

The Board of Directors met 12 times in 2020. Attendance is as follows:

Title Name (Note 1) Times of
attendance in
person		 Times of
attendance
by proxy		 Percentage of
attendance in
person (%)
(Note 2)		 Remarks
Chairman Kuo Chiao Investment &
Development Co., Ltd.
Representative: I-Shou Lin		 11 1 91.89% Re-elected on June 21, 2019
Director a Kuo Chiao Investment &
Development Co., Ltd.
Representative: Ping-Yung Liang		 12 0 100.00% Re-elected on June 21, 2019
Director c Kuo Chiao Investment &
Development Co., Ltd.
Representative: Lin-Maw Wu		 12 0 100.00% Re-elected on June 21, 2019
Director d Kuo Chiao Investment &
Development Co., Ltd.
Representative: Ching-Tsung
Huang		 11 1 91.89% Re-elected on June 21, 2019
Independent
Director a		 Te-Yuan Yang 12 0 100.00% Re-elected on June 21, 2019
Independent
Director b		 Chin-Shu Sun 12 0 100.00% Re-elected on June 21, 2019
Independent
Director d		 Wen-I Chang 12 0 100.00% Re-elected on June 21, 2019
Other required disclosure:
I.
Where the proceedings of the board meeting include one of the following circumstances, then describe the date, session, topic
discussed, opinions of every Independent Director, and the Company's handling the opinions of Independent Directors:
(I)
For items listed in Article 14-3 of the Securities and Exchange Act: Please refer to Note 1 of Other required disclosure in
operations of the Auditing Committee on page 41 to page 43.
(II) In addition to the previous issues, other resolutions made by the Board of Directors which are opposed or reserved by the
Independent Directors and have records or written statements: None.
II.
Regarding recusals of Directors from voting due to conflicts of interests, the names of the Directors, contents of motions, reasons for
recusal, and results of voting shall be specified: Please refer to Note 1.
III.
The Company shall disclose the evaluation cycle and period, evaluation scope, method and evaluation content of the board of
directors' self (or peer) evaluation. Please refer to Note 2 Evaluation the performance of the Board of Directors.
IV.
The goals (such as establishing the Audit Committee and increase information transparency, etc.) of strengthening the functionality
of the Board of Directors in the current and immediately preceding fiscal years, and the evaluation of their executions.
(I)
2019.3.21 The Board of Directors establishes corporate governance supervisors to assist Directors to comply with laws and
regulations, handle the Board of Directors and shareholders' meetings in accordance with the law, and provide Directors with
information necessary for the execution of business in order to enhance the effectiveness of the Board of Directors.
(II) 2019.1.05 The Board of Directors passed the Board performance evaluation method, regularly evaluated the Board of
Directors, functional Committees and Individual Directors, and submitted the evaluation results to the Board of Directors on
2021.01.29.
(III) Conduct educational courses for directors to enhance their professional knowledge.
The Company website discloses the quarterly and annual financial report and company regulations in English

－35－

Note 1

Note 1
Date Proposal Agenda Resolution Reasons for avoiding
Conflicts of Interest
2020.01.10 Proposal
2		 To discuss the
2019 annual
(including years
of service) and
special incentive
bonuses for the
Chairman
approved by the
Remuneration
Committee.		 Except for those
Directors who
recused themselves
from participation,
discussion, and
voting at the
meeting as required
by law, all Directors
presented at the
meeting did not
present any
objection and
approved the
proposal as
proposed.		 Since the second case
discussed the year-end
(including seniority)
and special incentive
bonus of Chairman
I.S. Lin, which is
related to his own
interests, he should
voluntary recuse.
Chairman I.S. Lin
appointed Director
lin-Maw Wu has been
appointed as the acting
Chairman of the
second case.
2020.01.10 Proposal
3		 To discuss the
year-end
consolation fund
approved by the
Company's
Remuneration
Committee for
Independent
Directors
concurrently
serving as Audit
Committee
members.		 Except for those
Directors who
recused themselves
from participation,
discussion, and
voting at the
meeting as required
by law, all Directors
presented at the
meeting did not
present any
objection and
approved the
proposal as
proposed.		 The third proposal was
related to
compensations paid to
Independent Directors
Chin-Shu Sun,
Te-Yuan Yang, and
Wen-I Chang;
therefore, they recused
themselves from the
meeting to avoid
conflict of interest.
2020.01.10 Proposal
4		 To discuss the
year-end
consolation fund
approved by the
Company's
Remuneration
Committee for
Independent		 Except for those
Directors who
recused themselves
from participation,
discussion, and
voting at the
meeting as required
bylaw,all Directors		 The 4th proposal was
related to
Remunerations paid to
Independent Directors
who are also members
of the Remuneration
Committee, namely,
Chin-Shu Sun,

－36－

Directors
concurrently
serving as
Renumeration
Committee
members.		 presented at the
meeting did not
present any
objection and
approved the
proposal as
proposed.		 Ching-Hui Hsieh , and
Te-Yuan Yang ,
therefore, they recused
themselves from the
meeting to avoid
conflict of interest
2020.01.10 Proposal
5		 To discuss the
2019 annual
(including years
of service) and
special incentive
bonuses for the
managers
approved by the
Remuneration
Committee.		 Except for those
Directors who
recused themselves
from participation,
discussion, and
voting at the
meeting as required
by law, all Directors
presented at the
meeting did not
present any
objection and
approved the
proposal as
proposed.		 Since the 5th proposal
was related to the
year-end (including
years of service) and
special incentive
bonuses paid to
President Lin-Maw
Wu and the senior
consultant
Ching-Tsung Huang,
they recused
themselves from the
meeting to avoid
conflict of interest.
2020.05.06 Proposal
5		 Proposed to sell
part of the land of
Pingnan Plant in
Pingnan Industrial
Park held by the
Company to Zhao
Heng Energy
Technology Co.,
Ltd.		 Except for those
Directors who
recused themselves
from participation,
discussion, and
voting at the
meeting as required
by law, all Directors
presented at the
meeting did not
present any
objection and
approved the
proposal as
proposed.		 Since Director
Ching-Tsung Huang is
a director of Zhao
Heng, he recused
himself from the
meeting to avoid
conflict of interest.
2020.07.15 Proposal
1		 Proposed to sell
part of the land
held by the
Companyat the		 Director
Ching-Tsung Huang
proposed the
appraisal amount of		 Since Chairman
I-Shou Lin and
Director Lin-Maw Wu
are Directors of Shin

－37－

Pingnan Plant in
Pingnan Industrial
Park.		 NT$154,786,225 as
the transaction
amount, which was
approved by the
directors except for
those directors who
recused themselves
from the discussion
and vote in
accordance with the
law.		 Phui in the case of land
sale, they should
voluntary recuse in
accordance with the
law, and Director
Ping-Yung Liang has
been appointed as the
Acting Chairman by
Chairman I-Shou Lin.
2020.07.24 Proposal
1		 To discuss the
Company intends
to participate in
the capital
increase of Great
Emperor Hotel
Co. Ltd.
(hereinafter
referred to as
Great Emperor).		 Except for those
Directors who
recused themselves
from participation,
discussion, and
voting at the
meeting as required
by law, all Directors
presented at the
meeting did not
present any
objection and
approved the
proposal as
proposed.		 Since Chairman
I-Shou Lin and
Director Lin-Maw Wu
are Directors of Great
Emperor in the case of
capital increase, they
should voluntary
recuse in accordance
with the law, and
Director Ping-Yung
Liang has been
appointed as the
Acting Chairman by
Chairman I-Shou Lin
2020.07.24 Proposal
2		 To discuss the
Company's intent
to participate in
the capital
increase case of
Zhenhua
International Co.,
Ltd. (hereinafter
referred to as
Zhenhua).		 Except for those
Directors who
recused themselves
from participation,
discussion, and
voting at the
meeting as required
by law, all Directors
presented at the
meeting did not
present any
objection and
approved the
proposal as
proposed.		 Since Chairman
I-Shou Lin and
Director Lin-Maw Wu
are directors of
Kingsgarden in the
case capital increase,
they should voluntary
recuse in accordance
with the law, Director
Ping-Yung Liang has
been appointed as the
Acting Chairman by
Chairman I-Shou Lin

－38－

2020.11.09 Proposal
1		 To discuss the
appointment of
Mr. Lin-Maw Wu
as the President.		 Except for those
Directors who
recused themselves
from participation,
discussion, and
voting at the
meeting as required
by law, all Directors
presented at the
meeting did not
present any
objection and
approved the
proposal as
proposed.		 As the proposal was
related to
remunerations paid to
President Lin-Maw
Wu; therefore, he
recused themselves
from the meeting to
avoid conflict of
interest.
2020.12.01 Proposal
2		 To discuss the
Company intends
to participate in
the capital
increase of Great
Emperor Hotel
Co. Ltd.
(hereinafter
referred to as
Great Emperor).		 Except for those
Directors who
recused themselves
from participation,
discussion, and
voting at the
meeting as required
by law, all Directors
presented at the
meeting did not
present any
objection and
approved the
proposal as
proposed.		 Since Chairman
I-Shou Lin and
Director Lin-Maw Wu
are Directors of Great
Emperor in the case of
capital increase, they
should voluntary
recuse in accordance
with the law, and
Director Ping-Yung
Liang has been
appointed as the
Acting Chairman by
Chairman I-Shou Lin

－39－

Note 2

Evaluation the performance of the Board of Directors

Evaluation
cycle		 Period Scope Methods Content
Once a year 2020.01.01~
2020.12.31		 Board of Directors Self-evaluation of
the Board of
Directors		 1.
Participation of the Company's operation (7 items)
2.
Improvement in the Board's decision making quality (10
items)
3.
Composition and structure of the Board (7 items)
5.
Internal control (5 items)
4.
Selection and continuing education of the directors (5 items)
Evaluation result: Better than Standard
Individual Director Self-evaluation of
Directors		 1.
Execution of the Company's goals and tasks (2 items)
2.
Understanding of the director's roles and responsibilities (2
items)
3.
Participation procedure of the Company's operation (6 items)
4.
Management and communication of the internal relations (3
items)
5.
Expertise and continuing education of the directors (3 items)
6.
Internal control (3 items)
Evaluation result: Better than Standard
Audit Committee/
Remuneration
Committee		 Self-evaluation of
Functional
Committees		 1.
Participation of the Company's operation (4 items)
2.
Recognition of the duties of the functional committees (4/3
items)
3.
Improving functional committee's decision-making (6/6
items)
4.
Composition of functional committee, and election and
appointment of committee members (3/3 items)
5.
Internal control (3 items)
Evaluation result: Better than Standard

(II) Operations of the Audit Committee:

Operations of the Auditing Committee

The Audit Committee met 10 times in 2020. Attendance is as follows:

Title Name Times of
attendance in
person(B)		 Times of
attendance
by proxy		 Percentage of attendance
in person (%) (B/A)
(Note)		 Remarks
Independent
Directora		 Te-Yuan
Yang		 10 0 100.00% None
Independent
Directorb		 Chin-Shu
Sun		 10 0 100.00% None
Independent
Directord		 Wen-I
Chang		 10 0 100.00% None
Other required disclosure:
I.
If the Audit Committee has any of the following circumstances, the date, session, proposal content, the
resolution of the Audit Committee and the Company's response toward the audit Committee's opinions
shall be specified.
(I)
For items listed in Article 14-5 of the Securities and Exchange Act: Please refer to note 1.
(II) Except the preceding issues, other resolutions approved by two-thirds of all Directors but yet to be
approved by the Audit Committee: Please refer to note 1.
II.
In regard to any recusal of independent directors from voting due to conflict of interests, the name of the
independent directors, the proposal, reasons for recusal due to conflict of interests and voting outcomes
should be stated: None
III. Communication between directors and head of internal audit and CPA (including material issues, audit
methods and results relating to the Company's finances and business).
Notes:(I)Communications between the internal auditor and Independent Directors once ayear. The

－40－

communication status:

  1. After the audit report and tracking improvement report were submitted and approved, an official letter and a copy of the report are sent to each of the Independent Directors for review by double registered mail.

  2. Seminar held on March 17, 2020: Audit Business Report Implementation Status. The Company's independent directors have maintained optimal communication with the head of internal audit.

  3. (II) Communication between the Company's CPA and Independent Directors twice a year. The

  4. communication status :

  5. Meeting held on March 17, 2020: Communicated with the governing body and discussed audit conclusion matters for Yieh Phui Enterprise Co., Ltd. in 2019.

  6. Meeting held on November 9, 2020: Communicated with the governing body and discussed audit planning matters for Yieh Phui Enterprise Co., Ltd. in 2020.

    • Communications between the Company's Independent Directors and CPAs are effective, where consensus over various communication matters is achieved.

Please visit Yieh Phui’s website for the aforementioned communication matters.

Note:

  • When (an) independent director(s) resign(s) before the end of the year,specify the date of resignation in the remark column. THe actual attendance rate (%) shall be calculated using the number of the Salary and Remuneration Committee meetings and the numbers of actual attendant during the term of service.

  • When election of independent directors is held before the end of the year, list the names of both the incoming and outgoing independent supervisors in the remark column with annotations specifying whether the independent directors are outgoing, incoming or re-elected, as well as the date of the election. The actual attendance rate (%) shall be calculated based on the number of meetings held during the member’s term in the compensation committee and the number of actual attendance of this member.

Note 1

(1) 2020Work Focus:

The Audit Committee held 10 meetings in 2020, mainly reviewing:

  1. Annual financial report.

  2. Assessment of the effectiveness of the internal control system.

  3. Amend and establish the Company's internal control system.

  4. Material assets or derivatives trading

  5. Material loaning of funds, and provision of endorsements/guarantees

  6. Assessment of the appointment and independence of the CPAs

－41－

(II) 2020 Operation:

Board of
Directors		 Proposals and Follow-up Actions Art. 14-5
of the
Securities
and
Exchange
Act		 Resolutions made
by the Audit
Committee and
how the
resolutions were
dealt with by the
Board of
Directors.
1st meeting in
2020
2020.01.10		 1. Engagement in transaction of forward
exchange derivatives.		 V Approved by all
members
presented,
proposed to the
Board and
approved by all
directors
presented at the
meeting without
any objection.
(Resolutions
passed by
two-thirds of all
Directors but yet
to be approved by
the Audit
Committee)
2nd meeting in
2020
2020.03.17		 1. 2019 Business Report, Financial Statements
and Consolidated Financial Statements.
2. To adopt 2019 deficit compensation.
3. 2019 Statement of Internal Control System.
4. Acting as joint guarantor and co-issuer of
promissory notes for joint credit applications
of subsidiaries
5. Engagement in transaction of forward
exchange derivatives.		 V
3rd meeting in
2020
2020.05.06		 1. 2020 assessment of the appointment and
independence of the CPAs
2. Amendment to Internal Control System of
the Shareholder Service Unit
3. Sale of part of the land held by the Company
in Pingnan Industrial Park
4. Endorsement and guarantee for subsidiaries
5. Engagement in transaction of forward
exchange derivatives.		 V
4th Meeting in
2020
2020.06.17		 1. Addition of "Management of Procedures for
Buying Back Treasury Shares" of Internal
Control System "General Management" and
amendment.
2. Engagement in transaction of forward
exchange derivatives.		 V
5th Meeting in
2020
2020.07.15		 1. Sold part of the land held by the Company in
Pingnan Industrial Park.		 V
6th Meeting in
2020
2020.07.24		 1. Participation in capital increase of subsidiary.
2. Engagement in transaction of forward
exchange derivatives.		 V
7th Meeting in
2020
2020.09.23		 1. Endorsements/Guarantees Provided for
subsidiaries.		 V
8th Meeting in
2020
2020.11.09		 1. Loaning Provided to subsidiaries.
2. Endorsements/Guarantees Provided for
subsidiaries.
3. Engagement in transaction of forward
exchange derivatives.		 V
9th Meeting in
2020		 1. Sell the land of Pingnan Plant in Pingnan
Industrial Park held bythe Company.		 V

－42－

2020.12.01 2. Participate in the capital increase of the
subsidiary.
10th Meeting in
2020
2020.12.28		 1. 2021 Audit Plan
2. Amendment to the financial statement
preparation process and internal audit
implementation rules for "general
management" of internal control.
3. Amendment to internal control "General
Management" for supervision and
management of subsidiaries and some
provisions of "Supervision of Subsidiaries".
4. Engagement in transaction of forward
exchange derivatives.		 V

－43－

(III) The state of the company's implementation of corporate governance, any variance from the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies, and the reason for any such variance.

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Deviations from the
Corporate Governance
Best-Practice Principles for
TWSE/TPEx Listed
CompaniesandReasons
Y N Summary
I.
Has the Company established and disclosed
its code of practice on corporate
governance based on "Corporate
Governance Best Practice Principles for
TWSE/TPEx Listed Companies"?
V		 In accordance with the latest amendments to the
Corporate Governance Best Practice Principles for
TWSE/GTSM Listed Companies, the Company
approved the amendment of the Corporate
Governance Code by the Board of Directors on
December 24, 2019.		 No significant difference is
found between the
Company's practices and
Article 1 of the Corporate
Governance Best Practice
Principles for TWSE/TPEx
Listed Companies.
II.
The shareholding structure of the Company
and shareholders' rights
(I)
Did the company establish an
internal procedure for handling
shareholder proposals, inquiries,
disputes, and litigations? Are such
matters handled according to the
internal procedure?
(II)
Did the company maintain a register
of major shareholders with
controlling power as well as a
register of persons exercising
ultimate control over those major
shareholders?
(III)
Did the company establish and
enforce risk control and firewall
systems with its affiliated
businesses?
(IV)
Did the company stipulate internal
rules that prohibit company insiders
from trading securities using
information not disclosed to the
V
V
V
V		 (I)
The Company's Shareholder Service
Department is a dedicated unit set up to handle
suggestions from and disputes relating to
shareholders. The Shareholder Service Section
on the Company's website is also set up with
contact information to facilitate shareholder
contact and inquiry.
(II) The Company has a a list of the major
shareholders of the Company and the
controlling parties of these shareholders.
(III) The Company has established appropriate risk
control mechanisms and firewalls in accordance
with the Procedure for Supervision and
Management of Subsidiaries, the Procedure for
Lending and Guarantee, the Procedure for
Acquisition and Disposal of Assets and
Procedure for Management of Related-Party
Transactions.
(IV) The Company has set up the Procedure for
(I) No significant
difference is found
between the Company's
practices and Article 13
of the Corporate
Governance Best
Practice Principles for
TWSE/TPEx Listed
Companies.
(II) No significant
difference is found
between the Company's
practices and Article 19
of the Corporate
Governance Best
Practice Principles for
TWSE/TPEx Listed
Companies.
(III) No significant

－44－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Deviations from the
Corporate Governance
Best-Practice Principles for
TWSE/TPEx Listed
Companies and Reasons
Y N Summary
market? Handling of Internal Material Information to
regulate internal practices.		 difference is found
between the Company's
practices and Article 14
of the Corporate
Governance Best
Practice Principles for
TWSE/TPEx Listed
Companies.
(IV) No significant
difference is found
between the Company's
practices and the
Corporate Governance
Best Practice Principles
for TWSE/TPEx Listed
Companies.
III.
Organization and responsibilities of the
Board of Directors
(I)
Has a policy of diversity been
established and implemented for the
composition of the Board of
Directors?
(II)
In addition to Remuneration
Committee and Audit Committee
established according to law, has the
Company voluntarily established
other functional committees?
(III)
Does the Company establish
performance evaluation methods
and methods for the Board of

V
V		 V (I)
The specific management policies of the Board of
Directors on the formulation of diversified policies
regarding the composition of the members are as
follows:
The specific management policies of the Board of
Directors on the formulation of diversified policies
regarding the composition of the members are as
follows:
1. The nomination and election of members of the
Company's Board of Directors is conducted in
accordance with regulations as stipulated in the
Articles of Incorporation, wherein a candidate
nomination system is adopted,the education and		 (I)
No significant
difference is found
between the
Company's practices
and Article 20 of the
Corporate Governance
Best Practice
Principles for
TWSE/TPEx Listed
Companies.
(III) No significant
difference is found
between the
Company'spractices

－45－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Deviations from the
Corporate Governance
Best-Practice Principles for
TWSE/TPEx Listed
CompaniesandReasons
Y N Summary
Directors, conduct performance
evaluation annually and regularly,
and report the results of
performance evaluation to the
Board of Directors, and apply these
as the references of remuneration of
Individual Directors and nomination
and renewal?
(IV)
Does the Company regularly
implement assessments on the
independence of CPAs?
V		 experience of candidates is evaluated, and
practices are conducted in accordance with
“Regulations Governing Election of Directors” and
“Code of Conducts for Corporate Governance” for
diversification and independence.
2. In order to strengthen corporate governance and
promote the sound development of the
composition and structure of the Board of
Directors, the Company revised " Diversification
of Board Members" in Article 20, Item 2 of the
"Corporate Governance Best-Practice Principles"
in 2019 states: The composition of the Board of
Directors shall take into account the Company's
operation style and business development needs,
and shall evaluate various diversified aspects, like
basic composition (such as gender, nationality, age,
etc.), professional knowledge and skills (such as
accounting, law, industry, finance, etc.).
3. The current Board of Directors consists of 7
directors, including 4 directors and 3 independent
directors, with extensive experience and expertise
in industry knowledge, international markets,
finance and accounting, taxation, business and
management. The company operates a
multi-faceted policy, and the target percentage of
board members with industrial experience and
financial, tax and accounting expertise is 70% or
more. Currently, five of the seven directors have
the aforementioned experience, with a ratio of
71.4%.
4.The proportionof Directors withemployee status

and Article 37 of the
Corporate Governance
Best Practice
Principles for
TWSE/TPEx Listed
Companies.
(IV) No significant
difference is found
between the
Company's practices
and Article 28 of the
Corporate Governance
Best Practice
Principles for
TWSE/TPEx Listed
Companies.

－46－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Deviations from the
Corporate Governance
Best-Practice Principles for
TWSE/TPEx Listed
CompaniesandReasons
Y N Summary
in the Company is 29%, and the proportion of
Independent Directors is 43%. The term of one
Independent Directors are in the third term, the
term of two Independent Directors is in the second
term, and the age of three Directors is over 70
years old. Two are between 61 and 70 years old,
and two are under 60 years old. Implementation of
diversification of members of the Board of
Directors: Please refer to (Note 1)
(II) The Company set up functional Committees in
compliance with relevant regulations.
(III) The Company passed the performance appraisal
method and its appraisal method at December
28, 2020 by Board of Directors, and conducts
performance appraisal regularly every year, and
the evaluation should be performed by an
external professional independent agency at
least every three years.
The results of the performance appraisal in
2020 are superior to the standard. Please refer to
the Company's website for relevant contents,
which has been submitted to the Board of
Directors on January 29, 2021 and can be used
as a reference for nominating Directors.
(IV) The Company assesses the independence of
CPAs once every year. The result of the
assessment was reported to and approved by the
Board of Directors on May 5, 2021. It carried
out assessment on the independence of CPA
Ling-Wen Huang and CPA Shu-Man Tsai of the
Crowe (TW) CPAs, bothofwhom are qualified

－47－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Deviations from the
Corporate Governance
Best-Practice Principles for
TWSE/TPEx Listed
CompaniesandReasons
Y N Summary
for being the Company's CPAs.
Assessed items:
1. Not serving as a Director, Supervisor, managerial
officer, or a position of significant influence, and
not a stakeholder of the Company
2. No direct and indirect conflicts of interests with
the Company
3. No profits gained from the Company's
investments or interests shared with the Company
4. Not a natural person shareholder who directly or
indirectly holds more than 1% of the total
number of shares issued by Yieh Phui or is one of
the top ten shareholders by shareholding
5. Not commissioned by the Company to audit and
certify financial statement for seven consecutive
years.
6. The accounting firm has issued the "Impartiality
andIndependenceDeclaration Letter."
IV.
Is the listed and OTC company equipped
with competent and appropriate number of
corporate governance personnel, and
designated corporate governance director to
be responsible for corporate governance
related matters (including but not limited to
providing information required by directors
and supervisors to carry out business,
assisting directors and supervisors to
comply with laws and regulations,
managing meetings related matters of the
Board of Directors and shareholders'
meeting in accordance with laws, making
V		 The finance department is a part-time corporate
governance unit.
March 31, 2019 The Board of Directors is in charge
of corporate governance by designated the Executive
Vice President as corporate governance officer. He
has more than three years of experience in financial,
stock or business management in public companies.
His main powers are to assist in providing the
information needed for the Directors to carry out
their business, assist the Directors, complying with
laws and regulations, and handle the Board of
Directors and related matters of the shareholders'
meetingaccordingto law,makingminutes of the		 No significant difference is
found between the
Company's practices and
Article 3-1 of the Corporate
Governance Best Practice
Principles for TWSE/TPEx
Listed Companies.

－48－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Deviations from the
Corporate Governance
Best-Practice Principles for
TWSE/TPEx Listed
CompaniesandReasons
Y N Summary
minutes of the Board of Directors and
shareholders' meeting, etc.)?		 Board of Directors and shareholders' meeting, and
other matters stipulated in the articles of association
or contract. The corporate governance officer has
completed 18 hours of training courses. Please refer
to (Note 2) for the information of training courses.
V.
Has the company set up channels of
communication for stakeholders (including
but not limited to shareholders, employees,
customers and suppliers), dedicated a
section of your company's website for
stakeholder affairs and adequately
responded to stakeholders' inquiries on
significant corporate social responsibility
issues?		 V With stakeholders either as a correspondent bank,
other creditors, an employee, consumer, supplier,
community, or a company, the Company makes
available clear communication channels, respects and
secures their interests guaranteed by law. The
Company sets up a stakeholders' section with contact
information of the various responsible units available
on the official website, constructs questionnaires for
stakeholders to understand the key issues they care
about, so as to adjust the Company's operating
policiesaccordingly.		 No significant difference is
found between the
Company's practices and
Article 51 of the Corporate
Governance Best Practice
Principles for TWSE/TPEx
Listed Companies.
VI.
Does the Company commission
professional shareholder services agency to
hold Shareholders' Meeting and other
relevant affairs?		 V The Company’s shareholder service unit is staffed
with professionals with required certification and
continuing education to ensure that the shareholder
meetings are legal, effective and safe.		 No significant difference is
found between the
Company's practices and
Article 7 of the Corporate
Governance Best Practice
Principles for TWSE/TPEx
Listed Companies.
VII.
Information Disclosure
(I)
Did the company establish a website
to disclose information on financial
operations and corporate
governance?
V		 (I)
The Company has set up a website for
disclosure of information relating to the
Company's operations, financial and corporate
governance practices in Chinese and English.
Investors can also view the information at the		 (I)
No significant
difference is found
between the
Company's practices
and Article 57 of the

－49－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Deviations from the
Corporate Governance
Best-Practice Principles for
TWSE/TPEx Listed
CompaniesandReasons
Y N Summary
(II)
Did the company adopt other means
of information disclosure (such as
establishing an English language
website, delegating a professional to
collect and disclose company
information, implement a
spokesperson system, and
disclosing the process of investor
conferences on the company
website)?
(III)
Does the Company publish and
report its annual financial report
within two months after the end of a
fiscal year, and publish and report
its financial reports for the first,
second and third quarters as well as
its operating status for each month
before the specified deadline?

V		 V Market Observation Post System (MOPS).
(II) The Company has set up an English website
and appointed dedicated personnel to handle
information collection and disclosure. The
Company has also set up a spokesperson system
to ensure timely and adequate disclosure of the
Company’s information.
An investors conference was held in 2020, of
which the video records are readily available on
the Company's website.
(III) The Company will gradually adjust its internal
operations and announce financial reports
earlier.
Corporate
Governance Best
Practice Principles
for TWSE/TPEx
Listed Companies.
(II) No significant
difference is found
between the
Company's practices
and Article 57 of the
Corporate Governance
Best Practice
Principles for
TWSE/TPEx Listed
Companies.
(III) There are some
differences was found
between the
Company's practices
and Article 55 of the
Corporate Governance
Best Practice
Principles for
TWSE/GTSM Listed
Companies and the
Company's practices.
VIII. Has the Company disclosed other
information to facilitate a better
understanding of its corporate governance
(Including but not limited to employee's		 V 1. For employee rights and benefits, please refer to
Page132
2. The Company has set up an online platform with
disclosure of the contact number and email of the		 No significant difference is
found between the
Company's practices and
Article 39,47,49,50,51,

－50－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Deviations from the
Corporate Governance
Best-Practice Principles for
TWSE/TPEx Listed
CompaniesandReasons
Y N Summary
rights, employee care, investor relations,
supplier relations, stakeholders' rights,
further studies of Directors and
Supervisors, implementation of risk
management policies and measurement
standards, implementation of customer
policies and purchase of liability insurance
for the Directors and Supervisors of the
Company)?		 Shareholder Service Department to facilitate
shareholder communication and information
transparency, providing the suppliers and
stakeholders an overview of the Company’s
operations and practices.
3. The Company provides the directors updated
information on laws and regulations and schedules
of available opportunities for continuing education.
4. The Company at all time takes notice of and
understands relevant laws and regulations as
stipulated or amended by the competent authority,
so as to minimize its potential operation risks.
5. The Company has purchased for directors a
liability insurance policy, of which the extent of
coverage and contents were reported to the Board
of Directors on the Board Meeting held on May 5,
2021.
6. For the Company's "Directors' and Supervisors'
Continuing Education", please refer to the
Directors' Continuing Education section in this
annual report. (Note 3)		 52, and 53 of the Corporate
Governance Best Practice
Principles for TWSE/TPEx
Listed Companies.
IX. Please specify the Company's measures to improve the items listed in the corporate governance review result by Taiwan Stock Exchange's
Corporate Governance Center and the improvement plans for items yet to be improved. (Leave blank if the company was not evaluated.)
Evaluation Indicators
Improved
Did the Company attend or voluntarily hold investor conferences
at least two times in the year being evaluated, and were the first
and last investor conferences in the year held at least 3 months
apart?
A total of two investor conferences will be held in 2020.
Evaluation Indicators
Priority improvement and actions for items notyet

－51－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Current Operation(Note) Deviations from the
Corporate Governance
Best-Practice Principles for
TWSE/TPEx Listed
CompaniesandReasons		 Deviations from the
Corporate Governance
Best-Practice Principles for
TWSE/TPEx Listed
CompaniesandReasons
Y N Summary
improved
Does the Company establish an intellectual property management
plan which is linked to operational targets, disclose the execution
process on the Company's website or the Annual Report, and
report to the Board of Directors at least once a year?		 In 2021, a plan will be proposed and presented to the Board of
Directors.

Note: Provide a brief description in the appropriate column, regardless whether yes or no is selected.

Note 1: Implementation status of diversification of members of the Board of Directors:

Diversified
core projects
Name of
Director		 Basic organization Basic organization Industry experience Industry experience Professional capabilities Professional capabilities Professional capabilities
Nationality Gender Concurrent
positions in
the
Company		 Age Term of office of
Independent Directors		 Business
management		 Sound
business
judgments		 Knowledge
of the
industry		 Leadership
ability		 Accounting Taxation Finance International
Market
Perspective
50 to
60		 61 to
70		 70 to
80		 Less
than 3
years		 3 to 9
years		 Over 9
years
I-Shou Lin Taiwan,
R.O.C.		 Male V V V V V V V
Lin-Maw
Wu		 Taiwan,
R.O.C.		 Male V V V V V V V
Ping-Yung
Liang		 Taiwan,
R.O.C.		 Male V V V V V
Ching-Tsung
Huang		 Taiwan,
R.O.C.		 Male V V V V V V V V
Chin-Shu
Sun		 Taiwan,
R.O.C.		 Male V V V V V V V V

－52－

Te-Yuan
Yang		 Taiwan,
R.O.C.		 Taiwan,
R.O.C.		 Male V V V V V V V
Wen-I
Chang		 Taiwan,
R.O.C.		 Male V V V V V V V
Note2:The continuing educationofthe Corporate Governance Officer:2019 to2020
Title Name Date Organizer Course Name Numberof Hours
Chief
Corporate
Governance
Officer		 Yung-Hsien
Chen		 September
18		 AccountingResearchandDevelopmentFoundation TotalValueManagement 2
Accounting Research and Development Foundation Corporate Strategy in Response to the Climate
Change and GlobalWarming		 2
Accounting Research and Development Foundation Board of Directors and Supervisors’ Responsibilities
andBoardPractices		 2
November
19		 Taiwan Stock Exchange (TWSE) Publicity meeting for effectively exerting the
functions of Directors		 3
November
15		 Taiwan Corporate Governance Association The 15th International Forum on Corporate
Governance - Directors' Financial Reporting
Obligations, Global Institutional Investors' Active
Role in Strengthening the Corporate Governance
Ecology, the Application of Business Judgment
Rules, the Implementation of Independent Director
System, and the Performance of Independent
Directors' Responsibilities		 6
February
21,2020		 Taiwan Corporate Governance Association Trend and Risk Management for Digital Technology
andArtificial Intelligence		 3
Total 18

Note 3: The continuing education of the Directors in 2020:

Title Name Date Organizer Course Name Numberof Hours
Chairman I-Shou Lin October 7 Taiwan Corporate Governance Association Trends and Challenges in Information Security
Governance		 3
Director Lin-Maw Wu October 7 Taiwan Corporate Governance Association New Thought of Intelligent PropertyManagement 3
Taiwan Corporate Governance Association Trends and Challenges in Information Security
Governance		 3
Director Ping-Yung
Liang		 October 7 Taiwan Corporate Governance Association New Thought of Intelligent Property Management 3
Taiwan Corporate Governance Association Trends and Challenges in Information Security
Governance		 3
Independent Te-Yuan Yang October 7 Taiwan Corporate Governance Association New Thought of Intelligent Property Management 3

－53－

Director Taiwan Corporate Governance Association Trends and Challenges in Information Security
Governance		 3
Independent
Director		 Chin-Shu Sun August 24 National Federation of CPA Associations of R.O.C. Real Estate Trusts and Uniting the Base and Building 6
Independent
Director		 Wen-I Chang October 7 Taiwan Corporate Governance Association New Thought of Intelligent Property Management 3
Taiwan Corporate Governance Association Trends and Challenges in Information Security
Governance		 3

－54－

(IV) Information on the Members of the Remuneration Committee

Title
(Note 1)		 Requirement
Name
Do the Directors have five or more years of work
experience
and the following professionalqualifications?
Do the Directors have five or more years of work
experience
and the following professionalqualifications?
Do the Directors have five or more years of work
experience
and the following professionalqualifications?		 Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Independence criteria (Note 2) Number of
other
publicly-listed
companies
concurrently
serving as a
member of the
compensation
committee		 Remarks
Currently serving
as an instructor
or a higher post
in a private or
public college o
runiversity in the
field o fbusiness,
law, finance,
accounting, or
the business
sector of the
Company
Currently serving as
ajudge, prosecutor,
lawyer, accountant, or
other professional
practice or technician
that must undergo
national examinations
and specialized
license.
Work
experience
necessary for
business
administer,
legal affairs,
finance,
accounting,
or business
sector of the
Company		 1 2 3 4 5 6 7 8 9 10
Independent
Director		 Te-Yuan Yang ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 1
Independent
Director		 Chin-Shu Sun ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 1
Independent
Director		 Wen-I Chang ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 1

  • Note 1: For title, please identify whether the person is a Director, Independent Director or other.

  • Note 2: Please put quotation mark the boxes below each criterion if a member meets these conditions within two years prior to being elected and during his/her term of service.

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

  • (2) Not a Director or Supervisor of the Company or any of its affiliates (the Independent Directors of the Company or its parent company, subsidiary or subsidiary of the same parent company established in accordance with this law or local laws and regulations are not subject to this restriction).

  • (3) Not a natural person shareholder who holds more than one percent (1%) of issued shares or is ranked top ten in terms of the total quantity of shares held, including the shares held in the name of the person’s spouse, minor children, or in the name of others.

  • (4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the officers in the preceding (1), or of any of the above persons in the preceding (2) and (3).

  • (5) Not a director, supervisor, or employee of a corporate/institutional shareholder that directly holds five percent or more of the total number of issued shares of the Bank, ranks as its top five shareholders, or has representative director(s) serving on the company’s board as director(s) or supervisor(s) based on paragraph 1 or paragraph 2, Article 27 of the Company Law, except where the Bank and its parent company, subsidiaries or subsidiaries of the same parent are serving concurrently as independent directors set up in accordance with the Securities and Exchange Act or local laws.

  • (6) Not a director, supervisor, or employee of the bank of which the majority of board seats or voting shares is controlled by a company that also controls the same of the Bank, except where the Bank and its parent company, subsidiaries or subsidiaries of the same parent are serving concurrently as independent directors set up in accordance with the Securities and Exchange Act or local laws.

  • (7) Not a director, supervisor, or employee of a compay of which the chairman or CEO (or equivalent) themselves or their spouse also serve as the Bank’s chairman or CEO (or equivalent), except where the Bank and its parent company, subsidiaries or subsidiaries of the same parent are serving concurrently as independent directors set up in accordance with the Securities and Exchange Act or local laws.

  • (8) Not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a

－55－

specified company or institution that has a financial or business relationship with the Bank, except where a specific company or institution holds more than 20% of the total number of issued shares of the Bank and not more than 50% of the shares and is serving concurrently as independent directors set up in accordance with the Securities and Exchange Act or local laws.

  • (9) Not a member of Remuneration Committee, Public Tender Offer Review Committee, or Special Committee for Merger and Acquisition pursuant to Securities and Exchange Act or Business Mergers and Acquisitions Act, not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting services or consultation to the Bank or to any affiliate, or a spouse thereof, and the service provided is an “audit service” or a “non-audit service which total compensation within the recent two years exceeds NT$500,000”. This restriction does not apply to a member of the Remuneration Committee, Public Tender Offer Review Committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Securities and Exchange Act or to the Business Mergers and Acquisitions Act or related laws or regulations.

  • (10) Where none of the circumstances in the subparagraphs of Article 30 of the Company Act applies.

－56－

Operations of the Remuneration Committee

  • I. There are three members in the Remuneration Committee of the Company.

  • II. Term of the Committee: June 21, 2019 to June 20, 2022. The Remuneration Committee held 2 meetings from January to March 2021 and 2 meetings (A) in 2020, in which the qualification and attendance of the Remuneration Committee members are stated as follows:


follows:
Title Name Times of
attendance
in person
(B)		 Times of
attendance
by proxy		 Percentage of
actual
attendance (%)
(B/A)
(Note)		 Remarks
Convener Te-Yuan
Yang		 2 0 100% Scope of Authority:
Discuss and vote on
matters related to
remuneration at the
Company, and submit
proposals and
recommendations to the
Board of Directors.
Members Chin-Shu
Sun		 2 0 100%
Members Wen-I
Chang		 2 0 100%

Regular review of Remuneration:

The function of the Company's Remuneration Committee evaluates the Company's Directors and managers' remuneration policies and systems, and meets at least twice a year. . The Power of Remuneration Committee

(1) Establishes and periodically reviews the performance evaluation and policies, system, standards, and structure of the remuneration for Directors and managers.

(2) Evaluate remuneration paid to Directors and managers on a regular basis.

Information on Remuneration Committee Meeting:

To discuss and result of resolutions of the Remuneration Committee from 2020 to March 2021 and the Company's handling of opinions of the Committee:

Date of
Meeting		 Agenda Result of
Resolution		 The Company's actions in
response to the opinions of
the Remuneration
Committee
The 2nd
meeting of
the 4th
term
2020.01.10		 1. Review the incentive bonuses
for the Chairman and
managers
2. Review of the year-end
consolation fund for the
independent directors, who are
also a member of the Audit
Committee
3. Review of the year-end
consolation fund for the
independent directors, who are
also a member of the
RemunerationCommittee		 All Directors
present at the
meeting
adopted the
resolution
without
dissidence		 Reporting to the Board of
Directors
All Directors present at the
meeting adopted the
resolution without
dissidence
The 3rd
meeting of
the 4th
term
2020.11.09		 1. Review of the target,
achievement and remuneration
system and structure of
directors and managers
Review of the President's
remunerationofthe Company		 All Directors
present at the
meeting
adopted the
resolution
without		 Reporting to the Board of
Directors
All Directors present at the
meeting adopted the
resolution without
dissidence

－57－

dissidence
The 4th
meeting of
the 4th
term
110.01.29		 1. Review of the increase in
employee salaries and wages,
adjustment and amount of the
Chairman's remuneration
2. Review of the 2020 year-end
(including years of service)
and performance bonus for the
Chairman
3. Review of the year-end
consolation fund for the
independent directors, who are
also a member of the Audit
Committee
4. Review of the year-end
consolation fund for the
independent directors, who are
also a member of the
Remuneration Committee
5. Review of the annual increase
in employee salaries and
wages, adjustment and amount
of the managerial officers'
remuneration
6. Review of 2020 year-end
(including years of service)
and performance bonus for the
Company's managerial
officers.		 All Directors
present at the
meeting
adopted the
resolution
without
dissidence		 Reporting to the Board of
Directors
All Directors present at the
meeting adopted the
resolution without
dissidence
The 5th
meeting of
the 4th
term
110.03.24		 1. Review of 2020 Company's
employee compensation and
director compensation
distribution		 All Directors
present at the
meeting
adopted the
resolution
without
dissidence		 Reporting to the Board of
Directors
All Directors present at the
meeting adopted the
resolution without
dissidence

Other required disclosure:

I. If the Board of Directors does not adopt or amend the recommendations made by the Audit Committee, the date and session of the Board of Directors' meeting, resolutions, voting results and handling of opinions of the Remuneration Committee by the Company shall be disclosed (if the remuneration approved by the Board of Directors is better than that of the Remuneration Committee, the discrepancies and related reasons shall be stated): None

II. If the members of the Remuneration Committee have any dissenting opinion or qualified opinions on the resolutions of the Remuneration Committee, where such opinions are documented or issued through written statements, the date and session of the meeting of the Remuneration Committee, resolutions, all the members' opinions and handling of these opinions shall be stated: None

－58－

(V) Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies



TWSE/GTSM Listed Companies
Assessed items Current Operation(Note 1) Gaps with the Corporate Social
Responsibility Best Practice
Principles for TWSE/GTSM Listed
Companies and root causes
Y N Brief Description (Note 2)
1.
Has the Company assessed the
environmental, social, and corporate
governance risks related to its operations
based on the principle of materiality and
established related risk management
policies or strategies? (Note 3)		 In 2020, the Company conducted a
questionnaire survey on 18 issues that may be
of concerned by stakeholders, and identified 5
of them as the critical issues that stakeholders
are most concerned: Operational Financial
Performance, Corporate Governance,
Compliance with Regulations, Occupational
Health and Safety, Risk Management. Relevant
Departments of the Company have completed
risk identification on these five major issues
and formulated management policies
respectively, including policies or
commitments, short, medium and long-term
objectives, responsibility allocation, input of
resources and specific action plans. For details
please refer to 2020 Yieh Phui CSR report.		 Operations listed in the left column
are referenced with Chapter II
Exercising Corporate Governance of
the Corporate Social Responsibility
Best Practice Principles for
TWSE/TPEx Listed Companies.
Results of actual implementation are
listed below:
No significant difference is found
between the Company's practice and
Article 9 of the Corporate Social
Responsibility Best Practice
Principles for TWSE/GTSM Listed
Companies.
II.
Does
the
Company
establish
an
exclusively (or part-time) dedicated unit
for
promoting
Corporate
Social
Responsibility? Is the unit authorized by
the Board of Directors to implement CSR
activities at the executive level? Does the		 To implement corporate social responsibility
and sustainable business management, we
integrate our core competencies into our social
welfare activities to promote public welfare.
Our achievements has been widely recognized
by
the
society
and
created
business		 No significant difference is found
between the Company's practice and
Article 9 of the Corporate Social
Responsibility
Best
Practice
Principles for TWSE/GTSM Listed
Companies.

－59－

unit report the progress of such activities to the Board of Directors?

opportunities and competitive for our corporation. The Company set up a Social Responsibility and Sustainable Development Committee chaired by the President as chairman. The Committee was organized with five functional taskforce and a secretariat office. Information on the functions of each taskforce and the responsible unit is further provided below:

  1. The Corporate Governance Taskforce is responsible for (1) internal control system (2) accounting system (3) operational performance (4) risk management (5) communication with banks (6) compliance; the Finance Division is responsible for coordination of the operations. 2. The Green Energy-saving Taskforce is responsible for energy-saving, water-saving, carbon emission reduction, waste reduction and green process; the Production Division is responsible for coordination of the operations.. 3. The Safety and Health Management Taskforce is responsible for environmental safety and health, disaster prevention and control, environmental protection, organization communication and environmental audit and

－60－

improvements; The Health and Safety Division is responsible for coordination of the operations..

  1. The Product Liability Taskforce is responsible for quality assurance, product environmental considerations and design, communication on product-related environmental issue, product safety, technology patents, customer satisfaction and supply chain management; The Technology Division is responsible for coordination of the operations.

  2. The Employee and Social Engagement Taskforce is responsible for recruitment, employee training, labor relations, employee care, community engagement and charity events; the operations is coordinated by Administrative Department.

  3. The Secretariat office and President Staff's Office act concurrently to implement CSR policies, track the progress of corporate social responsibility goals/policy implementation and compile the corporate social responsibility report. On May 20, 2020, the Board of Directors has reported to the Board of Directors on major themes and risk

－61－

execution.
III. Environmental Issues
(I)
Has the Company referred to the
nature of its industry to establish a
suitable environment management
system (EMS)?		 (I) The Company mainly uses energy and
resources such as steel, paint, zinc ingots,
water, electricity and NG to produce
galvanized and painted steel products, steel
structures and lifting equipment. The waste
water and process waste gas generated
during the production process satisfy the
mandated discharge standards after being
properly handled through waste water and
waste gas treatment facilities. For the
treatment and disposal of solid industrial
wastes, they shall be disposed by a
licensed industrial solids waste treatment
and disposal company according to the
provisions of the Environmental Protection
Law; the methods of shielding and
isolation are used for noise control to
ensure compliance with the Noise Control
Act of the Environmental Protection
Agency, the Company has strict standards
for the use of raw materials, production
processes emissions and noise controls to
ensure the health of employees and the
friendliness to the environment.
Yieh Phui is the first steel company in
Taiwan to obtain ISO 14001 environmental
management system. With the mission of
"global citizenship", Yieh Phui has been
promotingindustrial waste reduction and		 (I) No significant difference is
found between the Company's
practice and Article 11 and 13
of
the
Corporate
Social
Responsibility
Best
Practice
Principles for TWSE/GTSM
Listed Companies.

－62－

actively cooperating with the government's national policy of energy saving and carbon reduction by conducting in-plant greenhouse gas inventories and various energy saving and carbon reduction projects to reduce greenhouse gas emissions. With the continuous efforts of all the staff, Yieh Phui has obtained several environmental sustainability-related certifications (ISO 14001 Environmental Management System Certification, Greenhouse Gas Inventory Verification Statement, ISO 50001 Energy Management System Certification), and environmental-related awards. The latest certificate of ISO 14001 environmental management system certification is valid from October 24, 2020 to October 23, 2023; the latest certificate of ISO 50001 energy management system certification is valid from December 4, 2020 to December 3, 2023.

(2) No significant difference is found between Article 12, 13 and 16 of the Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies.

Yieh Phui executes an environmental audit following the ISO 14001 Environmental Management System to identify the significant environmental issues, which is then followed up by a series of environment-related meetings to draft plans and set the goals and tracking targets for environmental management.

－63－

(II) Is the Company committed to
improving
usage
efficiency
of
various
resources
and
utilizing
renewable resources with reduced
environmental impact?		 (II) Since its incorporation in 1988, Yieh Phui
Enterprise Co., Ltd. keeps investing in
equipment
for
control
of
pollution,
promoting the use of clean energy,
implementing
manufacturing
processes
that prevent pollution, including:
1.
RTO(Regenerative
Thermal
Oxidizer)
2.
Waste Acid Recovery Equipment
3.
Waste Management
4.
Wastewater Recovery and Reuse
Processes
5.
Using natural gas, a clean fuel, as
power
source
for
the
various
manufacturing processes
Yieh
Phui
Enterprise
Co.,
Ltd.
is
committed to enhancing the utilization
efficiency of the resources. Taking into
consideration the impact on the ecology,
the Company implements a series of
operations to minimize the impact on the
environment,
including
improving
manufacturing processes to reduce the
consumption of resources and energy,
reducing use of hazardous substances,
avoiding
emission
of
environmental
pollution and waste and handle waste
properly,
enhancing
recyclability
and
reusability of raw materials and products
to maximize sustainabilityof renewable		 (III) No significant difference is
found between the Company's
practice and Article 17 of the
Corporate Social Responsibility
Best Practice Principles for
TWSE/TPEx Listed Companies.
(IV) No significant difference is
found between Article 15, 16
and 17 of the Corporate Social
Responsibility
Best
Practice
Principles for TWSE/GTSM
Listed Companies.

－64－

(III) Has the Company assessed the
potential risks and opportunities
arising from climate change at
present and in the future and taken
related countermeasures?
(IV) Has the Company the calculated the
greenhouse gas emissions, water
consumption, and total weight of
waste over the past two years and
established the policies with regard
to energy conservation and carbon
reduction,
greenhouse
gas
reductions, water consumption, and
waste management?
resources, extending use life of the
products to cut down the burden on the
environment and upgrading the efficiency
of water resources to ensure sustainability
of water resources.
(III) The risks of climate change that the
Company may face now or in the future
are "flooding", "Drought and Water
Shortage" and "Water, Electricity, Oil and
Gas Supply", which may impact the
company's
operations,
including
the
acquisition
of
raw
materials,
manufacturing and transportation safety
etc. In terms of market opportunities, in
order to reduce global carbon emissions,
solar power related industries have begun
to flourish. The demand for solar mounting
racks will grow substantially in the future.
For details, please refer to the Yieh Phui
CSR Report 2020.
(IV) Since 2014, the Company's production site
has
been
inspected
annually
by
government recognized greenhouse gas
inspection agency. For other information
about energy saving and carbon reduction,
greenhouse
gas
reduction,
water
consumption or other waste management
in 2020, please refer to the 2020 Yieh Phui
CSR Report.
IV. Social Issues Operations listed in the left column

－65－

(I) Has the company referred to relevant  (I) The Company adopts human-based are referenced with Chapter IV laws and international human rights management, respects personal opinions Preserving Public Welfare of the instruments to stipulate relevant and abides by labor laws and Corporate Social Responsibility Best management policies and internationally recognized basic human Practice Principles for TWSE/TPEx procedures? rights principles. The employment policy Listed Companies. The following is based on the belief of "integrity and describes the details of the righteousness" without discrimination or implementation: any differential treatment in language, (I) No significant difference is attitude and behavior based on race, class, found between Articles 18 and language, thought, religion, party, native 19 of the Corporate Social place, birthplace, gender, sexual Responsibility Best Practice orientation, age, marriage, appearance, Principles for TWSE/TPEx facial features, physical and mental Listed Companies. disorders, constellation, blood type or (II) Has the Company established and  previous union membership. offered proper employee benefits (II) In order to establish a harmonious working (including remuneration, leave, and environment, the Company will provide other benefits) and reflected the equal opportunities to employees in terms business performance or results in of remuneration, employment conditions, (II) No significant difference is employee remuneration training and promotion. According to the found between the Company's appropriately? labor laws and regulations, the employees practice and Article 21 of the shall not suffer from work overload and "Corporate Social risk due to long working hours; special Responsibility Best Practice leave shall be based on two hours Principles for TWSE/GTSM increments, and employees can choose to Listed Companies". take compensatory leave or overtime pay for overtime duty, so employees be able to attain the perfect balance between work and family. The Company was awarded the

－66－

(III) Has the company provided  employees with safe and healthy work environments as well as regular classes on health and safety?

"Outstanding Healthy Workplace Certificate" by the "National Health Agency of the Ministry of Health and Welfare" and the "Sports Department Sports Enterprise Certification" by Sports Administration Ministry of Education. The Company provides various kinds of subsidies and benefits, including subsidies in childbirth, marriage, travel, funeral and burial, hospitalization due to general injury or occupational injury, as well as student grants and incentives for employees' children.

The production and sales bonus shall be paid according to the Company's monthly production, marketing operation performance and personal performance. In addition, the annual performance bonus shall be paid according to the Company's annual profit and individual performance.

(III) Healthy and Safe Workplace

  1. Healthy and Safe management system Yieh Phui continues to run the occupational safety and health management system, and also continues to maintain the system's functional perfection. We also promote the company to obtain the ISO 45001 certification in 2020 with the continuous efforts of all colleagues. 2. Workplace safety

(III) No significant difference is found between the Company's practices and Article 20 of the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies.

－67－

The project will introduce 14 topics on the industrial safety site. Through each topic, employees can understand the safety and health of the plant. Through the physical and physical experience, the Company will enhance the safety awareness and feeling of safety. A total of 660 people were trained in 2020.

  1. Various health and safety educational training

The Company enhances the safety and health knowledge and skills of its employees and cultivate them to develop the proper attitude of safety and health operations. A variety of pre-work and on-job safety and health educational training courses cater to our employees for multiple purposes. A total of 597 people were trained in 2020.

  1. Observation of incompatible (imperfect) points The supervisor of the unit will access the surveillance screen (priority) or cell phone recording (when there is no surveillance screen) to find out the inconsistencies in the work of colleagues through the video screen to continuously improve the safety of colleagues' work, and the content of the recording can also be used for education and training. The number of

－68－

improvement cases in 2020 was 793, and the improvement ratio was 97.9%. 5. False incident reporting system

(IV) Has the Company established an  effective competency career development training program for employees?

(V) Has the Company followed relevant
laws, regulations and international
guidelines for the customer health
and safety, customer privacy, and
marketing
and
labeling
of
its
products
and
services
and
established
related
consumer
protection policies and grievance
procedures?

It is possible that any employee might be faced with many types of danger in various workplaces. The Company provides all units with a safe working environment those hazards are extinguished before the occurrence. A total of 2,870 cases of false proposal were reported in 2020.

  1. Monthly Activities of Work Safety

May 2 is the "Yieh Phui Safety Day." An expanded scale of morning seminar is presided by the President, and the award ceremony of "Highest Mountain of Safety" for each unit takes place at the seminar.

  1. Health management and promotion activities:

For the health of the employees, the hardware and software division set up a health scientific management center. The system has set up a world-class equipment and professional coach to provide employee consultation services. The Company has established a system record for employees' consultation and the software and software department will also be organized for a regular period of two years of service and the

(IV) No significant difference is found between the Company's practice and Article 21 of the "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies".

(V) No significant difference is found between the Company's

－69－

Group's employees' health and safety practice and Article 24 of the activities, and the Group will also "Corporate Social promote the health of the employees. Responsibility Best Practice (IV) Employee Training and Career Principles for TWSE/GTSM Development Listed Companies".

The Company has established a clear set of training system chart to offer diversified training in order to strengthen the skills of the staff from the new recruits to senior level staff. The training system will be further developed into a learning map for each position. For instance, a processing engineer will follow the map and start from fundamental capacity in the initial year. Through this, the Company will then arrange management courses according to departmental needs. In 2020, we promoted the succession/key talent program and conducted succession management courses for department supervisors. In addition, we developed a talent reserve program for employees at each rank who are eligible to retire. (V) The Company awarded the "QC 08000 IECQ HSPM Hazardous Substance Process Management Certification" in 2007. We are the 1st steel company in the world in compliance with the EU RoHS. From the purchase of raw materials to the storage (IV) Has the Company established the  and transportation of products, including

－70－

supplier management policies requesting suppliers to comply with laws and regulations related to environmental protection, occupational safety and health or labor rights and supervised their compliance?

packaging and labeling operations and the product specifications, everything complies with relevant regulations and international standards to ensure customer's health and safety.

The Company has the responsibility to (VI) No significant difference is protect the personal information of found between the Company's customers. Without the customer's practice and Article 26 of the authorization, it will never disclosure to "Corporate Social Responsibility third parties for use or use it without prior Best Practice Principles for notice, and it strictly manages customer TWSE/GTSM Listed information, protect customer privacy and Companies". abide by marketing ethics.

Yie Phui attaches great importance to the response and opinions of customers, and provides the best services to protect the interest of customers with the follows means:

  1. Set up customer service department and management system to ensure service quality and protect customers' interests.

  2. Conduct regular customer satisfaction survey for internal assessment.

  3. Provide complete pre-sale and post-sale services.

  4. Provide customers with complete product information and standardized contract.

  5. In 2020, due to COVID-19, the business unit adopted telephone and video conferencing services to customers, inquired customer feedback, listeedn to

－71－

customers' suggestions, asked about product quality and usage and gave customers recommendations on using the product.

(VI) The Company has provided a "Safety, Hygiene and Environmental Protection Construction Management Specification" for suppliers. It requires suppliers to follow relevant regulations on issues such as environmental protection, occupational safety and health or labor human rights. The Company is the first in the world to be awarded "IECQ 0800000 HSPM Hazardous Substance Process Management Certification". It ensures that products meet the requirements of national environmental laws and regulations and is responsible for protecting the earth's environment. When signing a contract with a supplier, the Company may terminate the contract at any time in accordance with the Company's "Code of Integrity" in case of violation of the policies. V. Did the Company follows internationally  The Company's corporate social responsibility No significant difference is found recognized guidelines to prepare and report follows the guidelines of the Global between the practices of the publish reports such as its Corporate Reporting Initiative (GRI) guidelines "Company and Article 9 of the Social Responsibility Report disclosing (Standard) and is compiled with the core option Corporate Social Responsibility Best non-financial information of the disclosure principles. Also refer to the ISO Practice Principles for TWSE/GTSM Company? Has the Company received 26000 Social Responsibility Standards Guide, Listed Companies".

－72－

assurance or certification of the aforesaid "United Nations Global Compact (UNGC)", reports from a third party accreditation and United Nations Sustainable Development institution? Goals (SDGs). The 2020 Corporate Social Responsibility Report Committee was verified by Afnor Asia, and the verification results were in accordance with the AA 1000AS2008 guarantee standard, type 1 intermediate guarantee level.

  • VI. Where the Company has stipulated its own Best Practices on CSR according to the "Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies", please describe any gaps between the prescribed best practices and actual activities taken by the Company: Yieh Phui Enterprise established the "Corporate Social Responsibility Best Practice Principles" on May 6, 2020. In general, the implementation status of the Company's corporate social responsibility practices conform to the corporate social responsibility best practice principles, as disclosed in the "Status of corporate governance operations, and deviation with the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and the reasons" section above.

  • VII. Other important information helpful in understanding CSR operation:

Yieh Phui Enterprise discloses the results of implementation of corporate social responsibility practices in the annual financial reports of the respective year and updates the latest news in the Company's external website from time to time, providing an overview on the status of implementation of corporate social responsibility and results to the stakeholders.

  • Note 1: If "Yes" under the "Status of Operations" is ticked off, please explain the key policies, strategies, and measures adopted and their implementation results; if "No" is ticked off, please give the reason and specify related policies, strategies, and measures to be adopted in the future.

  • Note 2: Companies who have compiled CSR reports may specify the ways to access the CSR and the page numbers of the cited content in place of the above-requested description.

  • Note 3: The principle of materiality refers to environmental, social and corporate governance issues that have significant impacts on the company's investors and other stakeholders.

－73－

(VI) The situation and reasons for the implementation of integrity management and the difference with the listed Company's code of integrity management

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Gaps with the Ethical
Corporate Management
Best Practice Principles for
TWSE/GTSM Listed
Companies, and the cause of
the said gaps
Y N Summary
I.
Formulating Policies and Plans for Integrity Operation
(I)
Has the Company established the ethical corporate
management policies approved by the Board of
Directors and specified in its rules and external
documents the ethical corporate management
policies and practices and the commitment of the
Board of Directors and senior management to
rigorous and thorough implementation of such
policies?
(II)
Has the Company established a risk assessment
mechanism against unethical conduct, analyze and
assess on a regular basis business activities within
its business scope which are at a higher risk of being
involved in unethical conduct, and establish
prevention programs accordingly, which shall at
least include the preventive measures specified in
Paragraph 2, Article 7 of the "Ethical Corporate
Management
Best
Practice
Principles
for
TWSE/GTSM Listed Companies"?
(III)
Has the Company specified in its prevention
programs the operating procedures, guidelines,

















(I) The Company's Board of Directors approved
the Yieh Phui Corporate Management Best
Practice Principles in 2016, setting a policy of
ethical business practices under the models of
honesty, transparency and responsibility and
establishing a good corporate governance and
risk control mechanism to create a business
environment for sustainable development.
(II) Employees involved in finance, business and
procurement
shall
submit
"Employee
Guarantee" and the current employees shall
renew it every three years. If the employees fail
to submit or renew the "Employee Guarantee"
every three years, they shall apply for
"Personnel Guarantee Insurance".
(III) The Company has set up the Employee Work
Rules and Guidelines for Employee Incentives,














(I) No significant
difference is found
between the
Company's practices
and Article 5 of the
Ethical Corporate
Management Best
Practice Principles for
TWSE/TPEx Listed
Companies.
(II) No significant
difference is found
between the
Company's practices
and Article 7 of the
"Ethical Corporate
Management Best
Practice Principles for
TWSE/GTSM Listed
Companies".
(III) In contrast to Articles
6 and 7 of the "Code
of Good Faith

－74－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Gaps with the Ethical
Corporate Management
Best Practice Principles for
TWSE/GTSM Listed
Companies, and the cause of
the said gaps
Y N Summary
punishments for violations, and a grievance system
and implemented them and review the prevention
programs on a regular basis?
Reward and Punishment, so as to provide a
norm for employees’ behavior in the Company.
Management for
Listed OTC
Companies", it is
currently stated that
the operating
procedures only
regulate employees.
II.
Implementation of ethical business operations
(I)
Has the Company evaluated ethical records of its
counterparty? Does the contract signed by the
Company and its trading counterparty clearly
provide terms on ethical conduct?
(II)
Has the Company set up a dedicated unit under the
Board of Directors to promote ethical corporate
management and regularly (at least once every year)
report to the Board of Directors the implementation
of the ethical corporate management policies and
prevention programs against unethical conduct?
(III)
Has the company established policies preventing
conflict of interests, provided proper channels of
appeal, and enforced these policies and channels











(I) The Company's Procedure for Procurement
Management specifies a clause of termination
or cessation for unethical conducts in the
purchase agreement.
(II) The Company’s Ethical Corporate Management
Best Practice Team is the dedicated unit
(formed by the President Staff’s Office, the
Finance Division and HR Division) set up for
operations
and
supervision
of
corporate
management
practices,
including
revision,
implementation, interpretation, consultation,
reporting and filing of ethical corporate
business
best
practice
related
operating
procedures and code of conducts. There were
no unethical conducts in 2020.
(III) The Company set up the Code of Conduct, by
which the Directors, Supervisors and managers














(I)
No
significant
difference
is
found
between
the
Company's
practices
and Article 9 of the
Ethical
Corporate
Management
Best
Practice Principles for
TWSE/TPEx
Listed
Companies.
(II) In contrast to Article
17 of the "Ethical
Corporate
Management
Best
Practice Principles for
TWSE/GTSM Listed
Companies",
the
Company has not yet
reported to the Board
of Directorsthis year

－75－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Gaps with the Ethical
Corporate Management
Best Practice Principles for
TWSE/GTSM Listed
Companies, and the cause of
the said gaps
Y N Summary
accordingly?
(IV)
Has the Company established effective accounting
systems and internal control systems to implement
ethical corporate management and had its internal
audit unit, based on the results of assessment of the
risk of involvement in unethical conduct, devise
relevant audit plans and audit the compliance with
the prevention programs accordingly or entrusted a
CPA to conduct the audit?
(V)
Does the Company regularly organize internal and
external training for ethical corporate management?








are bound to act in the best interest of the
Company, deal with official business in an
objective and effective way and refrain their
spouse, parents, children or relative within the
second-degree
of
kinship
from
gaining
improper benefits using their positions in the
Company. The Directors, Supervisors and
managers shall follow the Procedure for the
Board of Directors Meeting when discussing
proposal and shall abstain from discussions and
voting if found to be in conflict of interests.
(IV) The Company set up an accounting system and
an internal control system. In addition to audit
activities conducted by the commissioned CPA,
the
Company's
internal
audit
unit
also
implements regular audit plan every year.
(V) The HR Division provides information on the
Company’s work rules and guidelines for
rewards and punishments during new employee
education and training courses. Employees
involving in the Company’s financial operations
are required to participate in the ethical business
best practice related courses organized by the
Taiwan Stock Exchange Corporation to meet



















its ethical corporate
management
policy,
plan for preventing
unethical
conducts
and
its
supervision
and implementation.
(III) No
significant
difference
is
found
between
the
Company's
practices
and Article 19 of the
Ethical
Corporate
Management
Best
Practice Principles for
TWSE/TPEx
Listed
Companies.
(IV) No
significant
difference
is
found
between
the
Company's
practices
and Article 20 of the
"Ethical
Corporate
Management
Best
Practice Principles for
TWSE/GTSM Listed
Companies".

－76－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Gaps with the Ethical
Corporate Management
Best Practice Principles for
TWSE/GTSM Listed
Companies, and the cause of
the said gaps
Y N Summary
compliance with relevant regulations. (V) No
significant
difference
is
found
between
the
Company's
practices
and Article 22 of the
"Ethical
Corporate
Management
Best
Practice Principles for
TWSE/GTSM Listed
Companies".
III. Operation of whistle-blowing mechanism in the
company
(I)
Has
the
company
established
concrete
whistle-blowing and reward systems and accessible
whistle-blowing channels? Does the company
assign a suitable and dedicated individual for the
case being exposed by the whistle-blower?
(II)
Has the Company established the standard operating
procedures for investigating reported misconduct,
follow-up measures to be adopted after the
investigation,
and
related
confidentiality
mechanisms?








(I) The Company set up the whistle-blower
incentive standards in the Employee Work
Rules and the Guidelines for Reward and
Punishment. In addition to the Company's
internal network, any named employee and
individual not working in the Company may
report directly to the corporate governance unit.
The corporate governance unit assigns a
dedicated personnel to handle the matters.
(II) The standard operating procedures (SOP) and
relevant
systems
of
confidentiality
for
investigating the case being exposed by the
whistle-blower is under developing.










Compared with Article 23 of
the
"Ethical
Corporate
Management Best Practice
Principles for TWSE/GTSM
Listed Companies", there is
still no standard operating
procedures
(SOP)
and
relevant
systems
of
confidentiality
for
investigating the case being
exposed
by
the
whistle-blower.

－77－

Assessed items Current Operation(Note) Current Operation(Note) Current Operation(Note) Gaps with the Ethical
Corporate Management
Best Practice Principles for
TWSE/GTSM Listed
Companies, and the cause of
the said gaps
Y N Summary
(III)
Has the company adopted protection against
inappropriate
disciplinary
actions
for
the
whistle-blower?

(III) No incident of inappropriate actions against the
whistle-blower has occurred in the Company.
IV. Strengthening information disclosure
Does the Company disclose its ethical corporate
management
policies
and
the
results
of
its
implementation on the Company’s website and
MOPS?


(1) The Company's Board of Directors has passed
the "Yieh Phui Enterprise Co., Ltd." and announced
the "Ethical Corporate Management Best Practice
Principles" in 2016, and disclosed it on our website.


Difference from Article 25
of the "Ethical Corporate
Management Best Practice
Principles for TWSE/GTSM
Listed Companies", the
Company has set up the
Yieh Phui Corporate
Management Best Practice
Principles, but quantified
data arenotyet available.
V. Where the Company has stipulated its own best practices on ethical corporate management according to the "Ethical Corporate Management Best
Practice Principles for TWSE/GTSM Listed Companies", please describe any gaps between the prescribed best practices and actual activities taken
by the Company:
The Company has set up the Yieh Phui Corporate Management Best Practice Principles. In general, the content conforms with the Ethical Corporate
Management Best Practice Principles for TWSE/GTSM Listed Companies.
VI. Other information helpful to understand the integrity operation of the company: (e.g., the company's amendment of its principles of integrity
operation)
The Company revised the content of the original work rules based on the Ethical Corporate Management Best Practice Principles for TWSE/TPEx
Listed Companies to make it more complete and conform to the principles of ethical practices.

Note: Provide a brief description in the appropriate column, regardless whether yes or no is selected.

－78－

  • (VII) If the Company has set up corporate governance principles and relevant rules, the Company shall disclose methods for inquiry: The Company has set up relevant corporate governance procedures and guidelines, including Corporate Social Responsibility Best Practice Principles, Audit Committee Charter, Corporate Social Responsibility Best Practice Principles, Rules of Procedure for Shareholders Meetings, Rules of Procedure for Board of Directors Meetings, Remuneration Committee Charter, Codes of Ethical Conduct, Ethical Corporate Management Best Practice Principles, Rules Governing the Scope of Powers of Independent Directors, Self-Evaluation or Peer Evaluation of the Board of Directors. The information can be found on the MOPS; please see the cover of this annual report for the web link.

  • (VIII) Other important information to facilitate better understanding of the Company's corporate governance activities may be disclosed here:

1. The Company has set up the "Procedures for Handling Material Inside Information", which is made available through the Company's internal website for free browsing by the directors, managers and all employees.

2. For details on the Company's corporate governance operations, please refer to page42 of this annual report or visit the MOPS; please see the cover of this annual report for the web link.

－79－

(IX) The following information relating to implementation of the internal control system shall be disclosed:

1. The Company's Internal Control Statement

Yieh Phui Enterprise Co., Ltd. Statement of Internal Control System

Date: March 24, 2021

Aurora makes the following statement according to the self-evaluation conducted of the internal control system in 2020:

  • I. The Company acknowledges that the establishment, implementation and conservation of the internal control system are the responsibilities of the Board of Directors and the managers of the Company. The Company has constructed such system. The objectives of the internal control system include achieving various objectives in business benefits and efficiency (including profitability, performance, and protection of assets and safety); ensuring the reliability, timeliness, transparency, and regulatory compliance of reporting; and providing reasonable assurance.

  • II. The internal control system has inherent constraints, and no matter how comprehensive its design may be, an effective internal control system is only capable of providing adequate assurance for achieving the above-mentioned objectives. Moreover, the effectiveness of the internal control system may be altered from changes in the environment and under different situations. Nevertheless, the Company's internal control system contains self-monitoring mechanisms, and the Company takes immediate remedial actions in response to any identified deficiencies.

  • III. The Company assesses for the effectiveness of the internal control system's design and practices through the effectiveness of internal control system, as stated in the "Protocols and Measures for the Establishment of Internal Control System in Publicly Listed Companies" (hereinafter referred to as "the Protocols"). The criteria adopted by the Regulations identify five key components of managerial internal control:(1) Control Environment;(2) Risk Assessment; (3) Control Activities; (4) Information and Communication; and(5) Monitoring Activities. Each constituent element includes a number of categories. Please refer to The Regulations for the aforementioned categories.

  • IV. The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid Regulations.

  • V. In accordance with the aforementioned evaluation, Aurora has found that the design and implementation of the internal control system (including the assessment and management of subsidiaries), as of December 31, 2020, including the efficacy of understanding operations, the efficiency of achievement of objectives, reliability in reporting, timeliness, and compliance with the relevant guidelines and laws, are effective and can reasonably provide assurance of the aforesaid goals.

  • VI. This Statement will be an integral part of the annual report and the prospectus of the Company and disclosed. If the aforementioned content contains illegal matters such as any fraudulent or hidden information, the Company will be in question of breaching Articles 20, 32, 171, and 174 in the Securities and Exchange Act and face legal consequences.

  • VII. The Statement has been resolved by the Company's Board of Directors on March 24, 2021. All of the seven Directors presented at the meeting approved the content of this statement.

Yieh Phui Enterprise Co., Ltd.

Chairman of the Board: I-Shou Lin Signature

President: Lin-Maw Wu Signature

2. Any CPA commissioned to conduct a project review of the ICS shall disclose the CPA’s audit report: None.

－80－

  • (X) Any legal penalty enacted upon this Company, any penalty imposed to its personnel by the Company for violation of internal control rules, major fallacies and status of improvements in the most recent year up to the publication date of this report: None.

  • (XI) Significant resolutions made in/by the Shareholders' Meeting and the Board of Directors in the most recent fiscal year up to the date of publication of this Annual Report:

1. Shareholders' Meeting

Number of
times		 Time of
Meeting		 Material resolution Status of
implementation
2020
Shareholders'
Meeting		 June 18,
2020		 Reports Issues:
1. 2019 Business Report
2. 2018 Audit Committee's Review Report
3. Report on repurchase of ordinary shares.		 Not applicable
Approved Items:
1. Recognition of 2019 Final Accountrs
2. To adopt 2019 deficit compensation.		 Yieh Phui had followed
the decision to post it
on the web site of the
company on June 18,
2020.
Topics for Discussion:
1. To discuss the amendment to the
Company's "Rules of Procedure for
Shareholders' Meetings."		 Yieh Phui had posted
it on the company
web site on June 18,
2020 and will follow
the revised
procedures.
2. To discuss the amendment to the
Company's "Articles of Incorporation."		 The change of the
number of shares by
Official Letter No.
10901118540
approved by the
Ministry of Economic
Affairs was registered
and announced on the
Company's website on
July 7,2020.

－81－

2. Board of Directors Meeting

Number of
times		 Time of
Meeting		 Material resolution
1st
Meeting
Board of
Directors		 January 10,
2020		 1. To discuss of 2020 Business Plan.
2. To discuss the 2019 annual (including years of service) and
special incentive bonuses for the Chairman approved by the
Remuneration Committee.
3. To discuss the year-end consolation fund approved by the
Company's Remuneration Committee for Independent Directors
concurrentlyservingas Audit Committee members.
4. To discuss the year-end consolation fund approved by the
Company's Remuneration Committee for Independent Directors
concurrentlyservingas Renumeration Committee members.
5. To discuss the 2019 annual (including years of service) and
special incentive bonuses for the managers approved by the
Remuneration Committee.
6. To discuss the Company’s intent to engage in the derivatives
transactions.
2nd
Meeting
Board of
Directors		 March 13,
2020		 1. In order to protect the Company's credit and shareholders' rights,
we intend to repurchase the Company's shares on the centralized
trading market in accordance with Article 28-2 of the Securities
and Exchange Act and "Regulations Governing Share
Repurchase byExchange-Listed and OTC-Listed Companies".
3rd
Meeting
Board of
Directors		 March 17,
2020		 1.
To discuss 2020 Shareholders' Meeting.
2.
Proposed 2019 Business Report, Financial Statements and
Consolidated Financial Statements.
3.
To adopt 2019 deficit compensation.
4.
To discuss the amendment to the "Rules of Procedure for
Shareholders' Meetings."
5.
To discuss the amendment to the "Rules of Procedures for Board
of Directors' Meetings."
6.
To discuss the amendment to the "Audit Committee Charter."
7.
To discuss the amendment to the "Remuneration Committee
Charter."
8.
To discuss the amendment to the "Articles of Incorporation."
9.
The right to accept shareholder proposals at the 2020 Annual
General Meetingof Shareholders
10. 2019 Statement of Internal Control System.
11. Matters respectingthe Companyactingasjointguarantor and

－82－

co-issuer of promissory notes for joint credit applications
ofsubsidiaryYieh Phui(HongKong)Holdings Limited.
12. To discuss the Company's intent to engage in the forward
exchange derivatives transactions.
4th
Meeting
Board of
Directors		 May 6, 2020 1.
To discuss the payments paid to CPAs for 2020, and to assess
their independence.
2.
To discuss the amendment to "Corporate Social Responsibility
Best Practice Principles."
3.
Amendment to the Company's "Internal Control System of the
Shareholder Service Unit."
4.
Proposed to sell part of the land of Pingnan Plant in Pingnan
Industrial Park held by the Company to Taoyuan Environment
Scientific Co.,Ltd.
5.
Proposed to sell part of the land of Pingnan Plant in Pingnan
Industrial Park held by the Company to Zhao Heng Energy
TechnologyCo.,Ltd.
6.
Ratification for the Company’s endorsements/guarantees of
NT$180 million for Shin Yang Steel Co., Ltd. (Shin Yang Co.
hereinafter).
7.
Ratification for the Company’s endorsements/guarantees of
NT$200 million for Shin Yang Steel Co., Ltd. (Shin Yang Co.
hereinafter).
8.
To discuss the Company's intent to engage in the forward
exchange and interest rate swaps derivatives transactions.
5th
Meeting
Board of
Directors		 June 17, 2020 1.
To discuss the establishment of "Procedures for Buying Back
TreasuryShares"
2.
To discuss the addition of "Management of Procedures for
Buying Back Treasury Shares" of Internal Control System
"General Management" and amendment.
3.
To discuss the Company's 2020 Corporate Social Responsibility
Report
4.
To discuss the Company's intent to engage in the forward
exchange and interest rate swaps derivatives transactions.
6th
Meeting
Board of
Directors		 July 15, 2020 1.
Proposed to sell part of the land held by the Company at the
Pingnan Plant in Pingnan Industrial Park.
7th
Meeting		 July 24, 2020 1.
To discuss the Company intends to participate in the capital
increase of Great Emperor Hotel Co. Ltd.(hereinafter referred to

－83－

Board of
Directors		 as Great Emperor).
2.
To discuss the Company's intent to participate in the capital
increase case of Zhenhua International Co., Ltd. (hereinafter
referred to as Zhenhua).
3.
To discuss the Company's intent to engage in the forward
exchange andinterestrate swaps derivatives transactions.
8th
Meeting
Board of
Directors		 August 4,
2020		 1.
To discuss the cancelation of treasury shares buyback and
stipulating the base date for capital reduction.
9th
Meeting
Board of
Directors		 September
23, 2020		 1.
To discuss the resignation of the Company's President.
2.
To discuss the dismissal of Mr. Lin-Maw Wu as the
spokesperson of the Company.
3.
Ratification of the Company’s endorsements/guarantees of
NT$300 million for Shin Yang Steel Co., Ltd. (Shin Yang Co.
hereinafter)
10th
Meeting
Board of
Directors		 November 9,
2020		 1.
To discuss the appointment of Mr. Lin-Maw Wu as the President.
2.
To discuss the appointment of the spokesperson and deputy
spokesperson of the Company.
3.
To discuss the performance goals of the Directors and managers
and the salary and remuneration system and structure proposed
bythe Company's Remuneration Committee.
4.
To discuss the loan with United Brightening Development Corp.
(hereinafter referred to as United Brightening).
5.
The Company's intent to endorsements/guarantees for Shing
Yang Steel Co., Ltd. (hereinafter referred to as Shing Yang) in
the amount of NT$100 million.
6.
To discuss the Company’s intent to engage in the derivatives
transactions.
11th
Meeting
Board of
Directors		 December 1,
2020		 1.
Proposal of sale of the land of Pingnan Plant in Pingnan
Industrial Park held bythe Company.
2.
To discuss the Company intends to participate in the capital
increase of Great Emperor Hotel Co. Ltd. (hereinafter referred to
as Great Emperor).
3.
To discuss the Company's appointment of Mega International
Commercial Bank as the coordinating bank for the formation of
a syndicate of creditors.
12th
Meeting
Board of
Directors		 December
28, 2020		 1.
To discuss 2021 Audit Plan.
2.
To discuss the amendment to the financial statement preparation
process and internal audit implementation rules for "General

－84－

Management" of internal control.
3.
To discuss the amendment to internal control "General
Management" for supervision and management of subsidiaries
and some provisions of "Regulations for Supervision of
Subsidiaries"
4.
To discuss the amendment to the "Self-Evaluation or Peer
Evaluation of the Board of Directors" and "Rules Governing the
Scope of Powers of Independent Directors."
5.
Discussion of the Company’s intention to engage in transaction
of financial derivatives.

  • (XII) Major contents of any dissenting opinions on record or stated in a written statement made by Directors or Supervisors regarding key resolutions of the Directors' Meeting in the most recent year up to the publication date of this report: None.

  • (XIII) In the most recent fiscal year and as of the date of publication of the Annual Report, a summary of the resignation and dismissal of the Company personnel including Chairman, President, accounting managers, finance managers, internal auditing managers and R&D managers: None

－85－

V. Information on the CPA Expenses:

Accountant Fees by Range (Please tick a range or fill in the amount)

Accounting Firm Name of CPA Name of CPA Auditing Period Remarks
Crowe Horwath China
Certified Public
Accountants		 Ling-Wen
Huang		 Tsai
Shu-Man		 January 1, 2020 to
December 31, 2020

Note: Where this Company replaces the CPA or accounting firm, please list the audit periods of the former and succeeding CPAs or firms and the reason for the replacement in the remark column.

Unit: NTD thousands

Category of Fees
Interval of the amount		 Category of Fees
Interval of the amount		 Audit Fees Non-Audit
Fees		 Total
1 Less thanNT$2,000 thousand 1,610
2 2,000 thousand (inclusive) to 4,000
thousand NTD
3 NT$4,000 thousand (inclusive) to
NT$6,000 thousand		 4,050
4 NT$6,000 thousand (inclusive) to
NT$8,000 thousand
5 NT$8,000 thousand (inclusive) to
NT$10,000 thousand
6 OverNT$10,000 thousand (inclusive)

Information on CPA Expenses

Unit: NT$ thousands

Account
ing Firm
Name of
CPA
Audit Fees		 Non-Audit Fees Non-Audit Fees Non-Audit Fees Auditing
period		 Remarks
System
design		 Business
registratio
n		 Human
resource		 Misc.
(Note2)		 Subtota
l
Crowe
Horwath
China
Certified
Public
Account
ants		 Ling-We
n Huang		 4,050 0 14 0 1,596 1,610 January 1,
2020 to
December
31, 2020		 IFRS 9 conversion
consultancy fee
NT$451,000,
transfer pricing
report review fee
NT$ 350,000,
consolidated and
individual English
financial statements
fee NT$325,000,
group report
NT$200,000,
individul report
NT$150,000 and
other NT$120,000.

Tsai
Shu-Ma
n

Note 1: Where this Company replaces the CPA or accounting firm, the auditing periods of the former and successor CPA or firm shall be annotated separately with the reason for replacement noted. The accounting and non-accounting fees paid to the former and successor CPA or firm shall also be disclosed.

－86－

  • Note 2: Non-audit fees shall be annotated separately in various service items. If the Others column in non-audit fees reaches 25% of the total non-audit fees, the service details should be listed in the Remarks column.

VI. Information on replacement of certified public accountants: None

  • VII. The Company's Chairman, President, Manager of Finance or Accounting who has worked in CPA Firms or their Affiliates within the latest Fiscal Year: None.

  • VIII. Transfer or Pledge of Equity by the Company's Directors, Executive Officers and Shareholders with more than 10% of the Company's Shares: 1. Transfer of shares and changes in equity pledge relating to the Directors, managers and primary shareholders

Title Name 2020 2020 As of March 31 of the
current year		 As of March 31 of the
current year
Number of
Shares Held
Increase
(decrease)		 Increase
(decrease) in
equity pledges
Increase
(decrease)		 Number of
Shares Held
Increase
(decrease)		 Increase
(decrease) in
equity pledges
Increase
(decrease)
Director Lin-Maw Wu 65,049 - -
-
Manager Hsien-Tung Liu (207,708) - -
-
Manager Chen-Wu Chang (820) - -
-
Manager Cheng-Feng Wu (1,000) - -
-
Manager Chiu-Lin Pan - - 78,800
-
Manager Hui-Jung Liao - - (8,000)
-
Manager Hui-Fung Li (18,000) - (21,000)
-
Manager Wen-I. Weng (21,000) - -
-
Manager Tien Ming-Chi (6,134) - -
-
Manager Wen-Chao Huang 44,969 - -
-
Manager Tian-fu Hong 15,373 -
Manager Cheng-Yen Hsieh 39,714
Major
Shareholder
Yieh United Steel Corporation
(YUSCO)		 - 14,500,000 -
(38,000,000)
Shares held
in the
names of
other
persons		 Li Hui Development Co., Ltd. - (2,000,000) -
-

Note: Increase in the number of shares held by Lin-Maw Wu, Wen-Chao Huang, Tian-fu Hong, Cheng-Yen Hsieh and Chiu-Lin Pan have been transferred in from the employee share trust.

2. Equity Transfer Information: Not applicable. 3. Equity pledge information: Not applicable.

－87－

IX. Information on the Top 10 Holders of the Company's Shares Who Are Identified as Related Parties, Spouse or Relative within Second-Degree of Kinship:

Relationship information between 10 largest shareholders

April 26, 2021

Name (Note 1) Shares held personally when elected Shares held personally when elected Shares held by
spouse or minor
children		 Shares held by
spouse or minor
children		 Shares held in others'; names Shares held in others'; names NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 Remarks
Number of Shares Shareholding
ratio		 Number
of Shares		 Shareh
olding
ratio		 Number of
Shares		 Shareholdi
ng ratio		 Type Relations
(1)
Yieh United Co., Ltd.
Representative: I-Shou Lin		 302,105,336 15.98% - - 111,143,993 5.88% Weiqiao Investment Development
Co., Ltd.
E-Da Hospital
Wei Hong Investment and
Development Co., Ltd.
Xinglong Investment Development
Co., Ltd.
Lian Shuo Investment Development
Co., Ltd.
Chi Yi Investment Co.,Ltd.		 Chairman is the
same person
Kuo
Chiao
Investment
and
Development Co., Ltd.
Li Hui Development Co.,Ltd.		 It's director is the
Chairman of Yieh
United
Ta Ching Motor Industrial Co., Ltd. Its Director is the
Chairman of Yieh
United.
(2)
Wei Chiao Investment Development
Co., Ltd.
Representative: I-Shou Lin		 205,719,551 10.88% - - - - Yieh United Steel Corporation
(YUSCO)
E-Da Hospital
Wei Hong Investment and
Development Co., Ltd.
Xinglong Investment Development
Co., Ltd.
Lian Shuo Investment Development
Co., Ltd.
Chi Yi Investment Co.,Ltd.		 Chairman is the
same person
Kuo
Chiao
Investment
and
Development Co., Ltd.
Li Hui Development Co.,Ltd.		 It's director is the
Chairman of Wei
Chiao
Ta ChingMotor Industrial Co.,Ltd. -

－88－

Name (Note 1) Shares held personally when elected Shares held personally when elected Shares held by
spouse or minor
children		 Shares held by
spouse or minor
children		 Shares held in others'; names Shares held in others'; names NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 Remarks
Number of Shares Shareholding
ratio		 Number
of Shares		 Shareh
olding
ratio		 Number of
Shares		 Shareholdi
ng ratio		 Type Relations
(3)
Li Hui Development Co., Ltd.
Representative: Yin-Chen Wang		 79,472,261 4.20% - - - - E-Da Hospital
Wei Hong Investment and
Development Co., Ltd.
Xinglong Investment Development
Co., Ltd.
Lian Shuo Investment Development
Co., Ltd.
Chi Yi Investment Co., Ltd.
Yieh United Steel Corporation
(YUSCO)
Weiqiao Investment Development
Co.,Ltd.		 It's chairman is a
director of Li Hui
Kuo
Chiao
Investment
and
Development Co., Ltd.
Ta ChingMotor Industrial Co.,Ltd.		 -
(4)
Wei
Hong
Investment
and
Development Co., Ltd.
Representative: I-Shou Lin		 79,157,532 4.19% - - - - Yieh United Steel Corporation
(YUSCO)
Weiqiao Investment Development
Co., Ltd.
E-Da Hospital
Xinglong Investment Development
Co., Ltd.
Lian Shuo Investment Development
Co., Ltd.
Chi Yi Investment Co.,Ltd.		 Chairman is the
same person
Kuo
Chiao
Investment
and
Development Co., Ltd.
Li Hui Development Co.,Ltd.		 Its director is the
Chairman of Wei
Hung
Ta Ching Motor Industrial Co., Ltd. Its director is the
Chairman of Wei
Hung

－89－

Name (Note 1) Shares held personally when elected Shares held personally when elected Shares held by
spouse or minor
children		 Shares held by
spouse or minor
children		 Shares held in others'; names Shares held in others'; names NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 Remarks
Number of Shares Shareholding
ratio		 Number
of Shares		 Shareh
olding
ratio		 Number of
Shares		 Shareholdi
ng ratio		 Type Relations
(5)
E-Da Healthcare Group
Representative: I-Shou Lin		 66,997,208 3.54% - - - - Yieh United Steel Corporation
(YUSCO)
Weiqiao Investment Development
Co., Ltd.
Wei Hong Investment and
Development Co., Ltd.
Xinglong Investment Development
Co., Ltd.
Lian Shuo Investment Development
Co., Ltd.
Chi Yi Investment Co.,Ltd.		 Chairman is the
same person
Kuo Chiao Investment and
Development Co., Ltd.
Li Hui Development Co.,Ltd.		 Its director is the
Chairman of E-Da
Hospital
Ta Ching Motor Industrial Co., Ltd. Its Chairman is a
Director of E-Da
Healthcare Group
(6)
Hsing
Lung
Investment
&
Development Co., Ltd
Representative: I-Shou Lin		 66,607,694 3.52% - - - - Yieh United Steel Corporation
(YUSCO)
Weiqiao Investment Development
Co., Ltd.
E-Da Hospital
Wei Hong Investment and
Development Co., Ltd.
Lian Shuo Investment Development
Co., Ltd.
Chi Yi Investment Co.,Ltd.		 Chairman is the
same person
Kuo
Chiao
Investment
and
Development Co., Ltd.
Li Hui Development Co.,Ltd.		 It's director is the
Chairman of
Hsing-Lung
Ta Ching Motor Industrial Co., Ltd. Its directors is the
supervisor of Hsing
Lung

－90－

Name (Note 1) Shares held personally when elected Shares held personally when elected Shares held by
spouse or minor
children		 Shares held by
spouse or minor
children		 Shares held in others'; names Shares held in others'; names NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 Remarks
Number of Shares Shareholding
ratio		 Number
of Shares		 Shareh
olding
ratio		 Number of
Shares		 Shareholdi
ng ratio		 Type Relations
(7)
Kuo
Chiao
Investment
and
Development Co., Ltd.
Representative: He-Hsing Lai		 61,870,646 3.27% - - - - Yieh United Steel Corporation
(YUSCO)
Weiqiao Investment Development
Co., Ltd.
E-Da Hospital
Wei Hong Investment and
Development Co., Ltd.
Xinglong Investment Development
Co., Ltd.
Lian Shuo Investment Development
Co., Ltd.
Chi Yi Investment Co., Ltd.		 Its director is the
Chairman of Kuo
Chiao
Ta Ching Motor Industrial Co., Ltd. Its chairman of the
board is the
supervisor of Kuo
Chiao
Li Hui Development Co.,Ltd. -
(8)
Lian Shuo Investment Development
Co., Ltd.
Representative: I-Shou Lin		 59,763,216 3.16% - - - - Yieh United Steel Corporation
(YUSCO)
Weiqiao Investment Development
Co., Ltd.
E-Da Hospital
Wei Hong Investment and
Development Co., Ltd.
Xinglong Investment Development
Co., Ltd.
Chi Yi Investment Co.,Ltd.		 Chairman is the
same person
Kuo
Chiao
Investment
and
Development Co., Ltd.
Li Hui Development Co.,Ltd.		 It's director is the
Chairman of Lian
Shuo
Ta ChingMotor Industrial Co.,Ltd. -

－91－

Name (Note 1) Shares held personally when elected Shares held personally when elected Shares held by
spouse or minor
children		 Shares held by
spouse or minor
children		 Shares held in others'; names Shares held in others'; names NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 Remarks
Number of Shares Shareholding
ratio		 Number
of Shares		 Shareh
olding
ratio		 Number of
Shares		 Shareholdi
ng ratio		 Type Relations
(9)
Wei Chiao Investment Development
Co., Ltd
Representative: Tian-Ji Zhang		 51,041,053 2.70% - - - - Yieh United Steel Corporation
(YUSCO)
Weiqiao Investment Development
Co., Ltd.
E-Da Hospital
Lian Shuo Investment Development
Co., Ltd.
Wei Hong Investment and
Development Co., Ltd.
Chi Yi Investment Co., Ltd.
Xinglong Investment Development
Co., Ltd.
Li Hui Development Co.,Ltd.		 -
Kuo
Chiao
Investment
and
Development Co., Ltd.		 Its chairman of the
board is the
supervisor of Ta
ChingMotors
(10) Chi Yi Investment Co., Ltd.
Representative: I-Shou Lin		 42,202,410 2.23% - - - - Yieh United Steel Corporation
(YUSCO)
Weiqiao Investment Development
Co., Ltd.
E-Da Hospital
Wei Hong Investment and
Development Co., Ltd.
Xinglong Investment Development
Co., Ltd.
Lian Shuo Investment Development
Co.,Ltd.		 Chairman is the
same person
Kuo
Chiao
Investment
and
Development Co., Ltd.
Li Hui Development Co.,Ltd.		 It's director is the
Chairman of Chi Yi
Ta ChingMotor Industrial Co.,Ltd. -

－92－

Name (Note 1) Shares held personally when elected Shares held personally when elected Shares held by
spouse or minor
children		 Shares held by
spouse or minor
children		 Shares held in others'; names Shares held in others'; names NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 NAME AND RELATIONSHIP BETWEEN THE
COMPANY’S TOP TEN SHAREHOLDERS, OR SPOUSES
OR RELATIVES WITHIN TWO DEGREES(NOTE 3)		 Remarks
Number of Shares Shareholding
ratio		 Number
of Shares		 Shareh
olding
ratio		 Number of
Shares		 Shareholdi
ng ratio		 Type Relations
(11) I-Shou Lin 160,237 0.00% 52,470 - - - Yieh United Steel Corporation
(YUSCO)
Weiqiao Investment Development
Co., Ltd.
E-Da Hospital
Wei Hong Investment and
Development Co., Ltd.
Xinglong Investment Development
Co., Ltd.
Lian Shuo Investment Development
Co., Ltd.
Chi Yi Investment Co., Ltd.		 Chairman is the
same person
(12)Yin-Chen Wang 0 0.00% - - - - Li Hui Development Co., Ltd. Chairman is the
same person
(13)Tien-Chi Chang 161,972 0.00% - - - - Ta Ching Motor Industrial Co., Ltd. Chairman is the
same person
(14) He-Hsing Lai 0 0.00% - - - - Kuo
Chiao
Investment
and
Development Co.,Ltd.		 Chairman is the
sameperson

Note 1: Please separately identify the names of corporate shareholders and their respective representatives within substantial shareholders.

Note 2: The calculation of shareholding ratio should separately indicate percentage of shares held under the person’s own identity, under spouse, minor children, and others’ identities.

Note 3: The relationships between the shareholders listed above, including legal persons and natural persons, shall be disclosed.

－93－

X. Number of Shares Invested by the Company, any of the Company's Directors, Supervisors and Executive Officers and Businesses Directly or Indirectly Controlled by the Company and Consolidated Percentage of Shareholding: Consolidated shareholding percentage

December 31, 2020

Unit: Shares; %


Unit: Shares;%
Unit: Shares;%
Reinvestment (Note) Investments by this
Company		 Investments of Directors,
Supervisors, Managers and
directly
or
indirectly
controlled businesses


Comprehensive
Investment
Number of
Shares		 Sharehol
ding
Ratio		 Number of
Shares		 Sharehol
ding
Ratio		 Number of
Shares		 Sharehol
ding
Ratio
GOODHONOR HOLDINGS
LTD.		 46,400 100.00% 0
0.00%		 46,400 100.00%
Yieh Phui (Hong Kong)
HoldingsLimited		 233,500,000 100.00% 0
0.00%		 233,500,000 100.00%
WORTHING HONOR
HOLDINGSLTD.		 100,000 100.00% 0
0.00%		 100,000 100.00%
Shin PhuiSteelCorporation 23,917,289 100.00% 0 0.00% 23,917,289 100.00%
Shin Yang SteelCo.,Ltd. 87,696,000 100.00% 0
0.00%		 87,696,000 100.00%
Xin BangInvestmentCo.,Ltd. 21,202,500 100.00% 0
0.00%		 21,202,500 100.00%
CHAMPION LOGISTIC INC.
(SAMOA)		 89,656
89.66%		 10,344 10.34% 100,000 100.00%
Gen-Wan Technology Corp 3,292,827 86.99% 854
0.02%		 3,293,681 87.01%
EMMTSystems Corporation 40,032,935
78.51%		 3,813,554
7.48%		 43,846,489 85.99%
Yieh HsingEnterprise Co.,Ltd. 304,654,386
57.41%		 218,633
0.04%		 304,873,019 57.45%
E-United JapanCo.,Ltd. 470
47.00%		 0
0.00%		 470 47.00%
Kuo ChangEnterprise Co.,Ltd. 107,370,104
99.04%		 0
0.00%		 107,370,104 99.04%
United Brightening
DevelopmentCorp.		 150,893,035
95.56%		 0
0.00%		 150,893,035 95.56%
Cheng ShinSecurity Co.,Ltd. 1,400,000
35.00%		 400,000 10.00% 1,800,000 45.00%
Eliter InternationalCorp. 283,583,868
32.84%		 92,498,777 10.71% 376,082,645 43.56%
E-Da DevelopmentCo.,Ltd. 209,619,406
28.44%		 43,791,485
5.94%		 253,410,891 34.38%
Yieh Mau Corporation 52,657,693
23.00%		 0
0.00%		 52,657,693 23.00%
ASIAZONECO.,LTD. 15,090,000
32.80%		 0
0.00%		 15,090,000 32.80%
E-Da TourCo.,Ltd. 1,349,000
19.00%		 0
0.00%		 1,349,000 19.00%
E-Da Bus Co.,Ltd. 1,845,307 17.09% 0
0.00%		 1,845,307 17.09%
Skylark Hot-Spring Resort Co.,
Ltd.		 1,170,000
14.63%		 0
0.00%		 1,170,000 14.63%
TangengIronWorks Co.,Ltd. 39,553,000
11.30%		 69,500,000 19.86% 109,053,000 31.16%
Hung Yu Asset Management
Co.,Ltd.		 119,920,000
80.00%		 0
0.00%		 119,920,000 80.00%
LIAN SO (H.K.) CO.,
LIMITED		 16,560,000
80.00%		 0
0.00%		 16,560,000 80.00%
YIEH PHUI AMERICA,INC. 1,000 100.00% 0
0.00%		 1,000 100.00%
E-DaRecreationCo.,Ltd. 7,410,000 19.00% 0 0.00% 7,410,000 19.00%
Li Hui DevelopmentCo.,Ltd. 64,045,000
44.56%		 0
0.00%		 64,045,000 44.56%
ChiChangEnterprise Co.,Ltd. 1,042,200
45.00%		 0
0.00%		 1,042,200 45.00%
Yieh United Steel Corporation
(YUSCO)		 676,660,515
25.82%		 131,098,624
5.00%		 807,759,139 30.83%
E-DaVisual Effects Co.,Ltd. 1,470,000
49.00%		 0
0.00%		 1,470,000 49.00%
YiChun Technology Co.,Ltd. 0.00% 8,330,000 92.50% 8,330,000 92.50%
E-Da Health Biotechnology
Co.,Ltd.		 380,000
19.00%		 380,000 19.00% 760,000 38.00%
APPLIED WIRELESS
IDENTIFICATIONS GROUP		 0.00% 40,488,461 91.47% 40,488,461 91.47%

－94－

Reinvestment (Note) Investments by this
Company		 Investments by this
Company		 Investments of Directors,
Supervisors, Managers and
directly
or
indirectly
controlled businesses		 Investments of Directors,
Supervisors, Managers and
directly
or
indirectly
controlled businesses


Comprehensive
Investment


Comprehensive
Investment
Number of
Shares		 Sharehol
ding
Ratio		 Number of
Shares		 Sharehol
ding
Ratio		 Number of
Shares		 Sharehol
ding
Ratio
INC.
AWID AsiaCo.,Ltd. 0.00% 3,030,000 100.00% 3,030,000 100.00%
Awid China Co., Ltd.
(Changshu)		 0.00% 0 100.00% 0 100.00%
Yieh Phui (China)
TechnomaterialCo.,Ltd.		 0.00% 0 100.00% 0 100.00%
Changshu Changhui Trading
Limited		 0.00% 0 100.00% 0 100.00%
Tianjin Lianfa Precision Steel
Corporation		 0.00% 0 100.00% 0 100.00%
Yi Hua InternationalCo.,Ltd. 0.00% 1,169,000 70.00% 1,169,000 70.00%
Wabo Global Trading
Corporation		 0.00% 6,000,000 100.00% 6,000,000 100.00%
PT.E-UnitedFerroIndonesia. 0.00% 3,425,000 100.00% 3,425,000 100.00%
PT. YIEH FERRO
INDONESIA		 0.00% 500,000 100.00% 500,000 100.00%
PT. GENBA INDO
RESOURCES		 0.00% 0 100.00% 0 100.00%
PT.GENBA MULTI MINERAL
0.00% 0 100.00% 0 100.00%
Asiamax MiningIndonesia 0.00% 54,500 100.00% 54,500 100.00%
Lian Yang (Hong Kong)
TradingLimited		 0.00% 100,000 100.00% 100,000 100.00%
Chao Ying Investment and
Development Co.,Ltd.		 0.00% 30,400,000 100.00% 30,400,000 100.00%
Zhen Hua International Co.,
Ltd.		 213,000,000
50.12%		 212,000,000 49.88% 425,000,000 100.00%
ZhenhaoHotelCo.,Ltd. 252,000,000 54.55% 210,000,000 45.45% 462,000,000 100.00%

Note: The equity method was employed for this Company's long-term investments.

－95－

Chapter 4 Funding Status

I. Capital and Shares (I) Source of Share Capital

Unit: NT$ thousands, thousand shares

Year
and
month		 Issue
Price		 Authorized Capital Authorized Capital Paid-in capital Paid-in capital Remarks Remarks
Number of
Shares		 Amount Number of
Shares		 Amount Sources of
capital		 Settlement
of payment
for shares
with assets
other than
cash
Others
84.05 10 600,000
6,000,000
339,422
3,394,220		 Capitalization
of earnings
NT$950,227		 None May 10, 1995 TDDC (1)
No. 27765
85.04 10 600,000
6,000,000
424,278
4,242,780		 Capitalization
of earnings
NT$848,556		 None March 3, 1996 TDDC (1)
No. 21718
86.01 10 600,000
6,000,000
484,278
4,842,780
Capital
increase by
cash
NT$600,000		 None October 22, 1996 TDDC (1)
No. 59340
86.06 10 600,000
6,000,000
508,492
5,084,920		 Capitalization
of earnings
NT$242,139		 None May 30, 1997 TDDC (1)
No. 43183
87.06 10 750,000
7,500,000
584,766
5,847,660		 Capitalization
of earnings
NT$762,738		 None April 30, 1998 TDDC (1)
No. 35445
88.09 10 750,000
7,500,000
672,481
6,724,810		 Capitalization
of earnings
NT$877,149		 None August 10, 1999 TDDC (1)
No. 73628
88.11 10 750,000
7,500,000
747,481
7,474,810
Capital
increase by
cash
NT$750,000		 None November 11, 1999 TDDC
(1) No. 87166
89.06 10 1,000,000 10,000,000
837,178
8,371,780		 Capitalization
of earnings
NT$896,977		 None June 21, 2000 TDDC (1)
No. 53713
90.02 10 1,000,000 10,000,000
797,178
7,971,780
Capital
reduction
(cancellation
of treasury
stocks)
NT$400,000		 None November 14, 2000 TDCC
(1) No. 85102
Nov.29, 2000 TDCC (1)
No. 97250
Jan. 17, 2001 TDCC No.
102095
Feb. 08, 2001 TDCC (3)
No.107419
90.10 10 1,000,000 10,000,000
829,065
8,290,659		 Capitalization
of earnings
NT$318,871		 None July 14, 2001 TDCC (1)
No. 144750
90.12 10 1,000,000 10,000,000
809,065
8,090,660
Capital
reduction
(cancellation
of treasury
stocks)
NT$200,000		 None September 5, 2001 TDCC
(3) No. 156354
92.09 10 1,250.000 12,500,000 922,335 9,223,352 Capitalization
of earnings
NT$1,132,692		 None August, 12, 2003 TDCC (1)
No. 0920136291

－96－

92.12 10 1,250,000 12,500,000 994.605 9.946.051 Domestic
corporate
bonds
conversion
NT$722,699		 None None January 20, 2004 MOEA
Official Letter No.
0930101042
93.03 10 1,250,000 12,500,000 1,034,618 10,346,181 Domestic
corporate
bonds
conversion
NT$400,130		 None April 21, 2004 MOEA
Official Letter No.
09301068070
93.09 10 1,250,000 12,500,000 1,074,722 10,747,216 Domestic and
overseas
corporate
bond
conversion
NT$401,035		 None November 10, 2004 MOEA
Official Letter No.
09301213380
93.12 10 1,250,000 12,500,000 1,095,303 10,953,026 Domestic and
overseas
corporate bond
conversion
NT$205,811
None		 February 24, 2005 MOEA
No. 09401031080
94.03 10 1,320,000 13,200,000 1,195,303 11,953,026 Capital
increase by
cash
NT$1,000,000		 None March 28, 2005 MOEA No.
09401048940
94.03 10 1,320,000 13,200,000 1,196,258 11,962,580 Domestic and
overseas
corporate bond
conversion
NT$9,553
None		 April 26, 2005 MOEA No.
09401072640
94.08 10 1,520,000 15,200,000 1,256,071 12,560,709 Capitalization
of earnings
NT$598,129		 None September 19, 2005 MOEA
No. 09401176700
94.08 10 1,520,000 15,200,000 1,260,930 12,609,299 Merger capital
increase
NT$48,590		 None September 30, 2005 MOEA
No. 09401184830
95.10 10 2,000,000 20,000,000 1,349,195 13,491,950 Capitalization
of earnings
NT$882,651		 None October 25, 2006 MOEA
No. 09501235990
96.09 10 2,000,000 20,000,000 1,389,671 13,896,708 Capitalization
of earnings
NT$404,758		 None October 16, 2007 MOEA
No. 09601251540
97.10 10 2,000,000 20,000,000 1,459,154 14,591,543 Capitalization
of earnings
NT$69,483		 None October 21, 2008 MOEA
No. 09701268630
98.03 10 2,000,000 20,000,000 1,411,863 14,118,633 Capital
reduction
(cancellation
of treasury
stocks)
NT$47,291		 None March 27, 2009 MOEA No.
09801060200
98.09 10 2,000,000 20,000,000 1,454,219 14,542,192 Capitalization
of earnings
NT$42,356		 None September 22, 2009 MOEA
No. 09801218880
99.10 10 2,000,000 20,000,000 1,526,930 15,269,302 Capitalization
of earnings
NT$72,711		 None October 05, 2010 MOEA
No. 09901224020
100.10 10 2,000,000 20,000,000 1,603,276 16,032,767 Capitalization
of earnings
NT$76,346		 None October 11, 2011 MOEA
No. 10001229410
101.10 10 2,000,000 20,000,000 1,635,342 16,353,422 Capitalization
of earnings
NT$32,065		 None October 03, 2012 MOEA
No. 10101203790

－97－

103.09 10 2,000,000 20,000,000 1,668,049 16,680,491 Capitalization
of earnings
NT$32,707		 None September 12, 2014 MOEA
Official Letter No.
10301190130
104.09 10 2,000,000 20,000,000 1,718,090 17,180,905 Capitalization
of earnings
NT$50,041		 None September 21, 2015 MOEA
No. 10401195830
106.09 10 2,000,000 20,000,000 1,821,176 18,211,760 Capitalization
of earnings
NT$103,085		 None September 26, 2017 MOEA
Official Letter No.
10601132590
107.09 10 2,000,000 20,000,000 1,875,811 18,758,112 Capitalization
of earnings
NT$54,635		 None September 17, 2018 MOEA
Official Letter No.
10701118100
2019.09
10		 2,000,000 20,000,000 1,913,327 19,133,275 Capitalization
of earnings
NT$37,516		 None September 19, 2019 MOEA
Official Letter No.
10801128440
2020.09
10		 2,000,000 20,000,000 1,890,569 18,905,695 Cancellation of
treasury stocks
NT$22,758

None		 September 15, 2020 MOEA
Official Letter No.
10901163030

Note 1: The information for the current year as of the publication date of this annual report shall be filled. Note 2: The effective (approval) date together with the doc. No. should be added for any capital increase. Note 3: Those that issue the stock below the par value shall indicate so in a clear manner. Note 4: Provide information on those who pledged currency debts, technology or business reputation in exchange for shares, including the type and amount of the pledges. Note 5: Private placement shall be indicated in a clear manner.

－98－

Unit: shares

Unit: shares
Share
Category		 Authorized Capital Remarks
Outstanding Shares
(Note)		 Unissued Shares Total
Registered
common
shares		 1,890,569,518 109,430,482 2,000,000,000 Shares of
listed
companies

Information on shelf registration

Unit: NT$ thousands, thousand shares

Types of
securities
Estimated issuance
amount
Amount of
issued
The purpose and
expected benefits
of the issued
shares
Pre-set period of
issuance of the
unissued portion Remarks
Total
number
of shares
Approved
amount
Number
of
Shares
Price
Not
applicable
(II)
Structure of Shareholders:
Structure of Shareholders
As of April 26. 2021
Structure of
Shareholders
Quantity
Government
Agencies
Financial
Institutions
Other Legal
Persons
Natural
Person
Foreign
company
or
individual
Mainland/natural
person
Total
Number of
Individuals
1
1
186
96,337
172
1
96,698
Number of
Shares Held
13
5,499,605 1,214,482,443 564,456,952 106,130,504
1 1,890,569,518
Shareholding
Ratio
0.00%
0.29%
64.24%
29.85%
5.62%
0.00%
100.00%
Shares Held byCapital from Mainland China: 0%
Note: Companies primarily-listed on TWSE and Taipei Exchange shall disclose the proportion of its shares
held by investors from Mainland China. Investors from Mainland China refers to natural persons,
legal persons, organizations, institutions or companies in areas other than Taiwan and Mainland
China invested by persons of such identity as defined in Article 3 of the Regulations Governing
Investment of Mainland Chinese in Taiwan.		 Types of
securities
Estimated issuance
amount
Amount of
issued
The purpose and
expected benefits
of the issued
shares
Pre-set period of
issuance of the
unissued portion Remarks
Total
number
of shares
Approved
amount
Number
of
Shares
Price
Not
applicable
(II)
Structure of Shareholders:
Structure of Shareholders
As of April 26. 2021
Structure of
Shareholders
Quantity
Government
Agencies
Financial
Institutions
Other Legal
Persons
Natural
Person
Foreign
company
or
individual
Mainland/natural
person
Total
Number of
Individuals
1
1
186
96,337
172
1
96,698
Number of
Shares Held
13
5,499,605 1,214,482,443 564,456,952 106,130,504
1 1,890,569,518
Shareholding
Ratio
0.00%
0.29%
64.24%
29.85%
5.62%
0.00%
100.00%
Shares Held byCapital from Mainland China: 0%
Note: Companies primarily-listed on TWSE and Taipei Exchange shall disclose the proportion of its shares
held by investors from Mainland China. Investors from Mainland China refers to natural persons,
legal persons, organizations, institutions or companies in areas other than Taiwan and Mainland
China invested by persons of such identity as defined in Article 3 of the Regulations Governing
Investment of Mainland Chinese in Taiwan.		 Types of
securities
Estimated issuance
amount
Amount of
issued
The purpose and
expected benefits
of the issued
shares
Pre-set period of
issuance of the
unissued portion Remarks
Total
number
of shares
Approved
amount
Number
of
Shares
Price
Not
applicable
(II)
Structure of Shareholders:
Structure of Shareholders
As of April 26. 2021
Structure of
Shareholders
Quantity
Government
Agencies
Financial
Institutions
Other Legal
Persons
Natural
Person
Foreign
company
or
individual
Mainland/natural
person
Total
Number of
Individuals
1
1
186
96,337
172
1
96,698
Number of
Shares Held
13
5,499,605 1,214,482,443 564,456,952 106,130,504
1 1,890,569,518
Shareholding
Ratio
0.00%
0.29%
64.24%
29.85%
5.62%
0.00%
100.00%
Shares Held byCapital from Mainland China: 0%
Note: Companies primarily-listed on TWSE and Taipei Exchange shall disclose the proportion of its shares
held by investors from Mainland China. Investors from Mainland China refers to natural persons,
legal persons, organizations, institutions or companies in areas other than Taiwan and Mainland
China invested by persons of such identity as defined in Article 3 of the Regulations Governing
Investment of Mainland Chinese in Taiwan.		 Types of
securities
Estimated issuance
amount
Amount of
issued
The purpose and
expected benefits
of the issued
shares
Pre-set period of
issuance of the
unissued portion Remarks
Total
number
of shares
Approved
amount
Number
of
Shares
Price
Not
applicable
(II)
Structure of Shareholders:
Structure of Shareholders
As of April 26. 2021
Structure of
Shareholders
Quantity
Government
Agencies
Financial
Institutions
Other Legal
Persons
Natural
Person
Foreign
company
or
individual
Mainland/natural
person
Total
Number of
Individuals
1
1
186
96,337
172
1
96,698
Number of
Shares Held
13
5,499,605 1,214,482,443 564,456,952 106,130,504
1 1,890,569,518
Shareholding
Ratio
0.00%
0.29%
64.24%
29.85%
5.62%
0.00%
100.00%
Shares Held byCapital from Mainland China: 0%
Note: Companies primarily-listed on TWSE and Taipei Exchange shall disclose the proportion of its shares
held by investors from Mainland China. Investors from Mainland China refers to natural persons,
legal persons, organizations, institutions or companies in areas other than Taiwan and Mainland
China invested by persons of such identity as defined in Article 3 of the Regulations Governing
Investment of Mainland Chinese in Taiwan.		 Types of
securities
Estimated issuance
amount
Amount of
issued
The purpose and
expected benefits
of the issued
shares
Pre-set period of
issuance of the
unissued portion Remarks
Total
number
of shares
Approved
amount
Number
of
Shares
Price
Not
applicable
(II)
Structure of Shareholders:
Structure of Shareholders
As of April 26. 2021
Structure of
Shareholders
Quantity
Government
Agencies
Financial
Institutions
Other Legal
Persons
Natural
Person
Foreign
company
or
individual
Mainland/natural
person
Total
Number of
Individuals
1
1
186
96,337
172
1
96,698
Number of
Shares Held
13
5,499,605 1,214,482,443 564,456,952 106,130,504
1 1,890,569,518
Shareholding
Ratio
0.00%
0.29%
64.24%
29.85%
5.62%
0.00%
100.00%
Shares Held byCapital from Mainland China: 0%
Note: Companies primarily-listed on TWSE and Taipei Exchange shall disclose the proportion of its shares
held by investors from Mainland China. Investors from Mainland China refers to natural persons,
legal persons, organizations, institutions or companies in areas other than Taiwan and Mainland
China invested by persons of such identity as defined in Article 3 of the Regulations Governing
Investment of Mainland Chinese in Taiwan.		 Types of
securities
Estimated issuance
amount
Amount of
issued
The purpose and
expected benefits
of the issued
shares
Pre-set period of
issuance of the
unissued portion Remarks
Total
number
of shares
Approved
amount
Number
of
Shares
Price
Not
applicable
(II)
Structure of Shareholders:
Structure of Shareholders
As of April 26. 2021
Structure of
Shareholders
Quantity
Government
Agencies
Financial
Institutions
Other Legal
Persons
Natural
Person
Foreign
company
or
individual
Mainland/natural
person
Total
Number of
Individuals
1
1
186
96,337
172
1
96,698
Number of
Shares Held
13
5,499,605 1,214,482,443 564,456,952 106,130,504
1 1,890,569,518
Shareholding
Ratio
0.00%
0.29%
64.24%
29.85%
5.62%
0.00%
100.00%
Shares Held byCapital from Mainland China: 0%
Note: Companies primarily-listed on TWSE and Taipei Exchange shall disclose the proportion of its shares
held by investors from Mainland China. Investors from Mainland China refers to natural persons,
legal persons, organizations, institutions or companies in areas other than Taiwan and Mainland
China invested by persons of such identity as defined in Article 3 of the Regulations Governing
Investment of Mainland Chinese in Taiwan.		 Types of
securities
Estimated issuance
amount
Amount of
issued
The purpose and
expected benefits
of the issued
shares
Pre-set period of
issuance of the
unissued portion Remarks
Total
number
of shares
Approved
amount
Number
of
Shares
Price
Not
applicable
(II)
Structure of Shareholders:
Structure of Shareholders
As of April 26. 2021
Structure of
Shareholders
Quantity
Government
Agencies
Financial
Institutions
Other Legal
Persons
Natural
Person
Foreign
company
or
individual
Mainland/natural
person
Total
Number of
Individuals
1
1
186
96,337
172
1
96,698
Number of
Shares Held
13
5,499,605 1,214,482,443 564,456,952 106,130,504
1 1,890,569,518
Shareholding
Ratio
0.00%
0.29%
64.24%
29.85%
5.62%
0.00%
100.00%
Shares Held byCapital from Mainland China: 0%
Note: Companies primarily-listed on TWSE and Taipei Exchange shall disclose the proportion of its shares
held by investors from Mainland China. Investors from Mainland China refers to natural persons,
legal persons, organizations, institutions or companies in areas other than Taiwan and Mainland
China invested by persons of such identity as defined in Article 3 of the Regulations Governing
Investment of Mainland Chinese in Taiwan.		 Types of
securities
Estimated issuance
amount
Amount of
issued
The purpose and
expected benefits
of the issued
shares
Pre-set period of
issuance of the
unissued portion Remarks
Total
number
of shares
Approved
amount
Number
of
Shares
Price
Not
applicable
(II)
Structure of Shareholders:
Structure of Shareholders
As of April 26. 2021
Structure of
Shareholders
Quantity
Government
Agencies
Financial
Institutions
Other Legal
Persons
Natural
Person
Foreign
company
or
individual
Mainland/natural
person
Total
Number of
Individuals
1
1
186
96,337
172
1
96,698
Number of
Shares Held
13
5,499,605 1,214,482,443 564,456,952 106,130,504
1 1,890,569,518
Shareholding
Ratio
0.00%
0.29%
64.24%
29.85%
5.62%
0.00%
100.00%
Shares Held byCapital from Mainland China: 0%
Note: Companies primarily-listed on TWSE and Taipei Exchange shall disclose the proportion of its shares
held by investors from Mainland China. Investors from Mainland China refers to natural persons,
legal persons, organizations, institutions or companies in areas other than Taiwan and Mainland
China invested by persons of such identity as defined in Article 3 of the Regulations Governing
Investment of Mainland Chinese in Taiwan.		 Types of
securities
Estimated issuance
amount
Amount of
issued
The purpose and
expected benefits
of the issued
shares
Pre-set period of
issuance of the
unissued portion Remarks
Total
number
of shares
Approved
amount
Number
of
Shares
Price
Not
applicable
(II)
Structure of Shareholders:
Structure of Shareholders
As of April 26. 2021
Structure of
Shareholders
Quantity
Government
Agencies
Financial
Institutions
Other Legal
Persons
Natural
Person
Foreign
company
or
individual
Mainland/natural
person
Total
Number of
Individuals
1
1
186
96,337
172
1
96,698
Number of
Shares Held
13
5,499,605 1,214,482,443 564,456,952 106,130,504
1 1,890,569,518
Shareholding
Ratio
0.00%
0.29%
64.24%
29.85%
5.62%
0.00%
100.00%
Shares Held byCapital from Mainland China: 0%
Note: Companies primarily-listed on TWSE and Taipei Exchange shall disclose the proportion of its shares
held by investors from Mainland China. Investors from Mainland China refers to natural persons,
legal persons, organizations, institutions or companies in areas other than Taiwan and Mainland
China invested by persons of such identity as defined in Article 3 of the Regulations Governing
Investment of Mainland Chinese in Taiwan.		 Types of
securities
Estimated issuance
amount
Amount of
issued
The purpose and
expected benefits
of the issued
shares
Pre-set period of
issuance of the
unissued portion Remarks
Total
number
of shares
Approved
amount
Number
of
Shares
Price
Not
applicable
(II)
Structure of Shareholders:
Structure of Shareholders
As of April 26. 2021
Structure of
Shareholders
Quantity
Government
Agencies
Financial
Institutions
Other Legal
Persons
Natural
Person
Foreign
company
or
individual
Mainland/natural
person
Total
Number of
Individuals
1
1
186
96,337
172
1
96,698
Number of
Shares Held
13
5,499,605 1,214,482,443 564,456,952 106,130,504
1 1,890,569,518
Shareholding
Ratio
0.00%
0.29%
64.24%
29.85%
5.62%
0.00%
100.00%
Shares Held byCapital from Mainland China: 0%
Note: Companies primarily-listed on TWSE and Taipei Exchange shall disclose the proportion of its shares
held by investors from Mainland China. Investors from Mainland China refers to natural persons,
legal persons, organizations, institutions or companies in areas other than Taiwan and Mainland
China invested by persons of such identity as defined in Article 3 of the Regulations Governing
Investment of Mainland Chinese in Taiwan.
Structure of
Shareholders
Quantity

Government
Agencies
Financial
Institutions		 Other Legal
Persons		 Natural
Person		 Foreign
company
or
individual		 Mainland/natural
person
Total
Number of
Individuals		 1
1		 186 96,337 172
1		 96,698
Number of
Shares Held		 13
5,499,605		 1,214,482,443 564,456,952 106,130,504
1		 1,890,569,518
Shareholding
Ratio
0.00%
0.29%		 64.24% 29.85% 5.62%
0.00%		 100.00%
Shares Held byCapital from Mainland China: 0%
Companies primarily-listed on TWSE and Taipei Exchange shall disclose the proportion of its shares
held by investors from Mainland China. Investors from Mainland China refers to natural persons,
legal persons, organizations, institutions or companies in areas other than Taiwan and Mainland
China invested by persons of such identity as defined in Article 3 of the Regulations Governing
Investment of Mainland Chinese in Taiwan.

－99－

(III) Conditions of Share Distribution: Status of Stock dispersion

As of April 26. 2021

ShareholdingRange Number of Shareholders Number of Shares Held ShareholdingRatio
1 to 999 39,318 7,008,555
0.37%
1,000 to 5,000 40,280 88,060,140
4.63%
5,001 to 10,000 8,162 65,580,395
3.47%
10,001 to 15,000 2,657 33,774,276
1.79%
15,001 to 20,000 1,944 35,733,894
1.89%
20,001 to 30,000 1,555 39,582,186
2.09%
30,001 to 50,000 1,254 50,301,657
2.66%
50,001 to 100,000 830 59,279,522
3.14%
100,001 to 200,000 379 52,984,913
2.80%
200,001~400,000 143 40,758,780
2.16%
400,001~600,000 57 28,906,410
1.53%
600,001~800,000 23 16,078,565
0.85%
800,001 to 1,000,000 22 19,764,596
1.05%
1,000,001 or more 74 1,352,755,629
71.57%
Total 96,698 1,890,569,518
100%

Preferred shares

Preferred shares Preferred shares Preferred shares Preferred shares
As of April 26. 2021
Shareholding Range Number of Shareholders Number of Shares Held Shareholding Ratio
Create new ranges as needed Not applicable
Total

－100－

(IV) List of Major Shareholders: List of Substantial Shareholders

As of April 26. 2021

As of April 26. 2021
Shares
Name of Substantial
Shareholders
Number of Shares Held		 Shareholding Ratio
Yieh United Steel Corporation(YUSCO) 302,105,336 15.98%
Weiqiao Investment Development Co.,
Ltd.		 205,719,551 10.88%
Li Hui Development Co.,Ltd. 79,472,261 4.20%
Wei Hong Investment and Development
Co.,Ltd.		 79,157,532 4.19%
E-Da Hospital 66,997,208 3.54%
Xinglong Investment Development Co.,
Ltd.		 66,607,694 3.52%
Kuo Chiao Investment and Development
Co.,Ltd.		 61,870,646 3.27%
Lian Shuo Investment Development Co.,
Ltd.		 59,763,216 3.16%
Ta ChingMotor Industrial Co.,Ltd. 51,041,053 2.70%
Chi Yi Investment Co., Ltd. 42,202,410 2.23%

－101－

(V) Fair Market Value, Net Worth, Profit, Dividend per Share and Other Relevant Information for the Most Recent Two Years: Market Value Per Share, Net Values, Earnings and Dividends

Year
Item		 Year
Item		 Year
Item		 2019 2020 From the beginning
of the year to
March 31, 2021
(Note 8)
Market
Price per
Share
(Note 1)		 Max. 10.30 14.80 13.85
Min. 8.77 7.56 12.95
Average 9.40 9.54 13.4
Net worth
per share
(Note 2)		 Before distribution - - -
After distribution - - -
Earnings
per share		 Weighted average number
of shares
1,913,327
thousand
shares		 1,890,569
thousand shares		 1,890,569 thousand
shares
Earnings per share (note 3) -0.73 0.39 0.58
Dividend
per share		 Cash dividend - - -
Stock
dividends		 Dividends
from
retained earnings
-		 - -

Capital
surplus
distribution
-		 - -
Accumulated unpaid
dividend (Note 4)		 - - -
Return on
Investment		 Price-to-earnings ratio (Note
5)
-		 - -

Price-to-dividend ratio
(Note 6)		 - - -
Cash dividend yield (note 7) - - -

*If any revenue or capital surplus is transferred to capital increase or common stock, further disclose information on market prices and cash dividends retroactively adjusted based on the number of shares after distribution.

Note 1: List the highest and lowest market price of the common shares for each year, and refer to the transaction value and transaction volume to calculate average market price for each year.

  • Note 2: this should be filled by using the shares already issued by year-end as a basis, and also by referencing the allocation that the shareholders meeting has decided on for

－102－

the subsequent year.

  • Note 3: if there are any retroactive adjustments needed due to stock grants, Earnings per share before and after the adjustment should be listed.

  • Note 4: If there are any conditions in issuing equity securities that allow for unpaid out dividend for the year to be accumulated to subsequent years in which there is profit, the Company should separately disclose the accumulated unpaid out dividend up to that year.

  • Note 5: P/E Ratio = Average closing price for each share for the year/earnings per share Note 6: P/D Ratio = Average closing price for each share for the year/cash dividend per share

  • Note 7: Cash dividend yield = cash dividend per share/average closing price per share for the year

  • Note 8: for net worth per share and net earnings per share, data from the latest quarter that has been verified by a CPA up until the date of publication of the Annual Report should be filled. For all other columns, the Company should fill the year's information until the date of publication of the Annual Report.

－103－

  • (VI) Dividend Policy and Implementation:

  • Dividend policy stipulated in the Company's Articles of Incorporation is as follows:

    • Article 31: The retained earning derived from the final accounting is distributed according to the following principles:

    • A. Dividend Policy:

The life cycle of the Company's industry is in the mature period. The dividend policy is in line with the current and future development plans, taking into account the investment environment, demand for capital, domestic and foreign competitions and shareholder benefits. Each year, no less than 20% of the distributable earnings is distributed to the shareholders as dividends. However, when the accumulated distributable earning is less than 20% of the paid-in capital, dividends will not be allotted.

  • B. Conditions and timing of distribution:

The surplus earnings per unit of the Company shall be calculated as legal reserve. After completing all the tax losses and make up for the losses of the previous years, the Company shall first set aside 10% of its balance as legal reserve. After the balance of the shareholders' equity is set aside, the rest of the earning shall be distributed through resolutions of shareholders' meeting.

  • C. Types of dividends:

    • Cash dividends are distributed at between 20% to 100% of total dividends distributed in accordance with the actual profitability while stock dividends are distributed at between 0% to 80% of the total dividends distributed.

  • D. Distribution of dividends depends on the operation results. The Board of Directors plans distribution of dividends and forwards the plan to the shareholders' meeting for final decision.

  • The proposed dividend distribution of Shareholders’ Meeting this year: The Company proposes to list 2020 profit distribution, as shown below in details:

Yieh Phui Enterprise Co., Ltd.

Profit Distribution

2020

Unit: NTD

details:
Yieh Phui Enterprise Co., Ltd.
Profit Distribution
2020
Unit: NTD
Item Amount
Deficit to be offset at the beginning of the year (614,437,690)
Plus: Remeasurement of the confirmed benefit plan included in the
retained surplus		 53,636,691
Minus: Changes in related companies and joint ventures recognized using
the equity method		 (1,338,826)
Minus: Changes in ownership interest in subsidiaries (10,119,739)
Plus: Disposal of equity instruments at fair value through other
comprehensive income		 756,000
Plus: Profit before tax 735,237,746
Minus: Legal reserve (16,373,418)
Minus: Special reserve (147,360,764)
Undistributed surplus at the end of theperiod 0

－104－

(VII) Impact on Business Performance and Earnings Per Share (EPS) of any Stock Dividend Distribution Proposed or Adopted at the Most Recent Shareholders’ Meeting:

Unit: NT$ thousands (excluding NT$ for earnings per share)

Year
Item		 Year
Item		 Year
Item
2021 (Note 1)
(Estimated)
Beginning paid-in capital 18,905,695
Distribution of
dividends this
year		 Cash dividendper share -
Surplus to capital increase stock dividendper share -
Capital reserve to capital increase stock dividend per
share
-
Changes in
Operating
Performance		 Operatingincome Not applicable (Note
2)
Ratio of increase (decrease) in operating profit over the
sameperiod lastyear
Net income after tax
Ratio of increase (decrease) in NIAT over the same
period lastyear
Earningsper share
Ratio of increase (decrease) in EPS over the same period
lastyear
Annual average return on investment (reciprocal of
average annual interest rate)
Pro forma
earnings per
share and P/E
ratio		 If the surplus to capital
increase is realized through
cash dividend		 Pro formaper share earnings Not applicable (Note
2)
Pro forma average annual
return on investment
If capital reserve to capital
increase is not implemented		 Pro formaper share earnings
Pro forma average annual
return on investment
If the capital reserve is not
paid and the surplus to
capital increase is paid
through cash dividend		 Pro formaper share earnings
Pro forma average annual
return on investment

Note 1: Awaiting the resolution by the 2021 shareholders' meeting Note 2: According to the Regulations Governing the Publication of Financial Forecasts of Public Companies, the Company is not required to disclose financial projections for 2021.

－105－

(VIII) Compensation to Employees and Directors:

  1. The number or range of compensations of employees and Directors as stated in the Company's Articles of Association:

  2. Article 30-1 of the Articles of Incorporation of the Company provides the following:

If the Company makes a profit in the year (the so-called profit refers to the before tax profit before deducting compensation of employees and Directors), more than 0.2% shall be allotted for employees' compensation and 0.1% or less for compensations of the Directors. However, the Company shall reserve a portion of profit to make up for accumulated losses, if any.

  1. Accounting basis for discrepancies between the estimated and actual distributed amount of remunerations in the form of shares to the Company's employees and Directors in this period.

  2. A. Estimation Basis: When the profit gained in this year is at the same level of the previous year, use the distribution structure for estimation of this year's distribution.

  3. B. Calculation basis for compensations paid with shares: the Company pays compensations of employees, directors in cash, never with stock dividends.

  4. C. Accounting practice when the amount of actual distribution is different from the estimated amount: If there is a difference between the actual distributed amount and the estimated amount, the difference shall be adjusted in the month recognized by the shareholders' meeting. The Company shall pay the remunerations of employees, and Directors in the amount recognized by the shareholders' meeting.

  5. Information on approval by the Board of Directors of distribution of compensation:

  6. (1) The amount of any employee compensation distributed in cash or stocks and compensation for directors. If differences are found in the estimated expenses in the year, the difference, cause and reconciliation of the difference shall be disclosed:

Unit: NT$ Unit: NT$
Estimated
amount for
2020		 Approved
amount by the
Board of
Directors on
March 24,
2021		 Difference
between
estimate
and actual
payment		 Causes Status
Employee
compensaion		 447,196 447,196 0 None None
Directors'
remuneration		 223,598 223,598 0 None None
  • (2) The amount of any employee compensation distributed in stocks, and the size of that amount as a percentage of the sum of the after-tax net income stated in the parent company only financial reports or individual financial reports for the current period and total employee compensation. Not applicable.

－106－

  1. Actual distribution of compensation to employees, directors and supervisors in the previous year (including number of shares, total and per-share price) and the difference to the estimated amount, stating the amount of difference, cause and reconciliation.
Estimated
amount for
2019		 Ratified
amount by the
Board of
Directors on
March 17,
2020		 Amount of
actual
payment		 Difference
between
estimate and
actual
payment		 Causes Status
Employee
compensation
incash
0		 0 0 0 None None
Employee
compensation
inshares
0		 0 0 0 None None
Directors'
remuneration
0		 0 0 0 None None

－107－

(IX) Repurchase of Shares by the Company:

Unit: NT$

Share Buyback frequency The Eighth Buyback
Purpose for share buyback To enhance the credit of the company and
therights ofstockholders
Buyback period 2020.03.16~2020.05.15
Buyback price range NT$8-9.5 per share
Number and type of share buyback Common shares
22,758,000 shares
Buyback volume NT$185,259,045
The purchased shares as a percentage of
theplanned buyback		 22.76%
Number of shares to be written off or
transfer		 0 shares
Accumulated shareholding 22,758,000 shares
Accumulated shareholding as a
percentage of outstandingshares(%)		 1.19%
Reasons for repurchase that have been
reported but not completed		 To respect the market mechanism and
safeguard the interests of the stockholders,
Yieh Phui has not fully implemented the
planned
share
buyback
due
to
the
fluctuation of the stock.

II. Issuance of Corporate Bonds: The Company has not issued any corporate bonds in the most recent year up to the publication date of this annual report.

  • III. Issuance of Preferred Shares: The Company has not issued any preferred shares in the most recent year up to the publication date of this annual report.

  • IV. Issuance of Depository Receipts: The Company has not issued any depository receipts in the most recent year up to the publication date of this annual report.

  • V. Issuance of Employee Stock Option Certificates: None.

  • VI. Issuance of New Shares in Connection with Mergers and Acquisitions: None.

VII. Implementation of the Capital Utilization Plan: None

－108－

Chapter 5 Operational OVerview

I. Business Content:

(I) Scope of Business:

  1. The main contents of the Company's consolidated business:

Horticulture Service Basic Industrial Chemical Manufacturing Other Non-metallic Mineral Products Manufacturing Iron and Steel Refining Iron and Steel Rolls over Extends and Crowding Iron and Steel Casting Iron and Steel Rolling, Drawing, and Extruding Steel Wires and Cables Manufacturing Metal Architectural Components Manufacturing Metal line Products Manufacturing Other Fabricated Metal Products Manufacturing Not Elsewhere Classified Metal Surface Treating Machinery and Equipment Manufacturing Other Machinery Manufacturing Not Elsewhere Classified Electronic Parts and Components Manufacturing Automobiles and Parts Manufacturing Motor Vehicles and Parts Manufacturing Wholesale of Flowers Wholesaling of hardware Wholesale of Building Materials Wholesale of Machinery Wholesale of Motor Vehicle Parts and Supplies Other Wholesale Trade Retail sale of Flowers Retail Sale of Ironware Retail Sale of Building Materials Retail Sale of Machinery and Equipment Retail Sale of Motor Vehicle Parts and Supplies Retail Sale of Other Retail Trade Not Elsewhere Classified International Trade Steel Construction Residence and Buildings Lease Construction and Development Specialized Field Construction and Development New County and Community Construction and Investment Real Estate Commerce Real Estate Rental and Leasing Rental and Leasing Business Wired Communication Equipment and Apparatus Manufacturing Telecommunication Equipment and Apparatus Manufacturing Manufacture of computer and peripherals

－109－

Parts Manufacturing Precision Instruments Manufacturing Medical Materials and Equipment Manufacturing Electric Appliance Installation Apparatus Installation Construction International Trade Software Design Services Electric Appliance and Audiovisual Electric Products Repair Shops Electrical Machinery, Avionics and Supplies Manufacturing

Energy technology service Industry

Surface treatment, manufacturing, processing, wholesale, retail, domestic sale and export of stainless steel wire material, carbon steel wire material, free-cutting steel wire material, alloy steel wire material, rolling door material, steel pipe, stainless steel pipe, mechanical parts, steel strip, steel strip, can, alloy steel and stainless steel.

Processing, manufacturing, trade, domestic sale and export of various types of parts and hardware for scooter and bicycles.

Delegate construction companies in building public housing, lease and sale of commercial building.

Design, processing and sale of iron plate and composite steel frame.

Design, processing, manufacturing and sale of mechanical frame.

Processing, manufacturing and sale of galvanized iron plate, coated iron plate and cold pressed steel plate.

Processing, manufacturing, domestic sale and export of rolled steel, steel, structural steel, steel wire, iron strip and iron wire.

Operation of farm, livestock farm.

Manufacture, processing, trade and import and export of various types of paper pulp, paper and their raw materials.

Design, manufacture, installation and maintenance of machinery and equipment for steel mill, power plant, petrochemical plant, incineration plant and water treatment plant, including piping, pipe support, ventilation equipment, flue pipe, dust collector, fire extinguishing system, pressure vessel, furnace, annealing tank, heating furnace, conveyer and crane.

All business items that are not prohibited or restricted by the law, except those that are subject to special approval.

  1. Proportion of consolidated businesses
Main Products Amount Ratio %
Pickled steelcoils 13,835 0.02
Rolled steelcoil 5,916,984 10.68
Galvanized steelcoils 22,431,095 40.47
Pre-painted steelcoils 15,965,819 28.81
Steelpipe 2,046,253 3.69
Wire 5,407,927 9.76
Construction revenue 1,086,627 1.96
Electronic products 626,286 1.13
Others 1,926,969 3.48
Total revenue 55,421,795 100.00

－110－

  1. The Company's current consolidated product items include: manufacturing, processing, and trade of pickled steel coil, cold-rolled steel coil, (aluminum) zinc plated steel coil, coated steel coil, steel coil products, mechanical parts, piping engineering design, stainless steel wire, carbon steel wire, alloy steel wire and free-cutting steel wire, steel bar and straight bar, OEM/ODM, RFID products, walkie-talkie, smart monitoring system for LED street light.

  2. Consolidated planned new product development:

Item Goal
1. High corrosion resistance,
high mechanical strength
prepainted steel		 Following the government policy of domestic production and
development of green energy, YP plans to overcome the limit
on thickness of prepainted production and develop capability
for producting prepainted steel with thickness of 1.6 to 2.3mm
to increase the possibility of using YP products in green
energyindustry.
2. Environmentally-friendly
prepainted steel for
solar-sharing photovoltaic
brackets		 Development of environmentally-friendly paint coating with
high flexibility for use in solar-sharing photovoltaic brackets
to prevent contaminations caused by the falling of chalked
paint flakes containing chromeand prevent lossin the catch.
3. Drawing quality thin gauge
galvanized steel		 Development of car shaft parts suitable for stamping and
drawing for Volkswagen, with a thickness of 0.2mm. Main
applications are rotary shafts including window wiper, car
door, rear trunk, and could be expanded to other vehicle
applicationsin thefuture.
4. Pre-painted steel
forphotovoltaic bracket		 Development of economical bracket material for applications
in harsh environments such as C5 and CX, with equal
corrosion resistance, better price and yield than post-painted
galvanized steel.
5. Anti-microbial plus metallic
coated steel product with
nanoMark		 It is developed for the ducting (regular spangle) of top-class
mansions located in Hong Kong and Singapore.
In addition to inhibit the growth of ordinary pathogens, it shows
notableinhibitionon legionella.
6. Anti-microbial plus color
coated steel product with
nanoMark		 Nano zinc will be added into the paint to inhibit more types of
pathogens and increase its performance. To promote the new
productvia acquisitionof nanoMark.
7. Anti-microbial and
anti-fingerprint treated
metallic coated steel product		 Develop low-temperature anti- microbial and anti-fingerprint
treated metallic coated steel product so that product is equipped
with self-cleaning and anti- microbial features, able to reduce
contact between human body and bacteria, and improve operating
environment.The product isapplicableforductingand decking.
8. HSLA steel product Develop high-strength low-alloy (HSLA) galvanized steel sheet,
reduces carbon content to avoid decrease in weldability. The
product isapplicablefor automotive structuralparts.
9. Cold-rolled products of
SEDDQ grade		 Develop SEDDQ cold-rolled steel sheet for extra deep drawing,
increases products' added value. The product is applicable for
automotive panel.
10. Phosphorus-added
high-strength IF cold-rolled
steel		 Develop Phosphorus-added high-strength IF cold-rolled steel,
increases products' added value, product diversification and
satisfies customers' special requirements.
The product isapplicablefor automotive panel.
11. Bake hardening cold-rolled
steel product		 Develop bake hardening cold-rolled steel products, increases
products' added value and product diversification, and satisfies
customers' special requirements. The product is applicable for
automotive panel.

－111－

Item Goal
12. Duplex steel cold-rolled steel
product		 Develop duplex cold-rolled steels products, increases products'
added value and product diversification, and satisfies customers'
special requirements. The product is applicable for automotive
structuralparts.
13. Aluminum coated steel
product		 Develop Aluminum coated steel products, increases products' added
value and product diversification, and satisfies customers' special
requirements.The product isapplicablefor automotive parts.
14. Tank with high precision
cutting fluid filtration function		 Develop tank with high precision cutting fluid filtration function, to
extend cutting fluid's recycling useful life, thus reducing cost.
Applicablefor rollgrindingmachines.
15. Welding wheel with
self-cleaning and self-cooling
functions		 Develop welding wheel with self-cleaning and self-cooling
function, increases efficiency of the welding machine and success
rate of welding. Applicable forgalvanized wire.
16. Self-lubricating steel product Develop anti-fingerprint treated metallic coated steel product with
self-lubricating function, increasing product's processing and
forming performance.
17. HSLA cold-rolled steel
product		 Develop high-strength low-alloy (HSLA) cold-rolled steel sheets,
reduces steel sheets' carbon content to avoid drop in weldability.
The product isapplicablefor automotive structuralparts.
18. High corrosion resistant
zinc-aluminum coated steel
product		 To cater to the requirements of materials for ABB electrical box,
develops high corrosion-resistant zinc-aluminum coated steel
products undersaltspraytesting.
19. Cut and corrosion resistant
PVDF color coated steel
product		 Develop cut and corrosion resistant PVDF color coated steel
products, satisfying customer's special requirements. The product is
applicableforengineering work in harshenvironment.
20. Strip simulated annealing test
equipment		 Self-develop test equipment for use in simulated annealing, to
reduce input and loss during online testing.
21. Portable metallographic
testing method		 Research and develop simple and fast metallographic detection
methods, to be used in fast metallographic detection for advanced
carsteel(duplexsteel,TRIPsteel)manufactured
22. Pickling communication disk
temperature control system		 Real-time monitoring of environmental temperature of electrical
control room, prevent protective power outage due to overheating.
23. A new shape of backup roll
development		 Change backup roll forming in existing rolling mill to prevent
slanted steel sheet
24. A type of equipment with
highly efficient HCL gas
absorption		 Use in ARP HCL recovery and reuse, to reduce loss of materials
and environmental pollution
25. A type of new air knife ystem
that reduces over
galvanization at the edge		 Use to improve coated products' thick edge problem
26. A type of highly efficient
online testing for surface
defects		 Use in PLTCM for fast online examination of detect resistance on
the surface, to avoid defects from entering the rolling mill resulting
in breakage
27. Galvanized products for
steel-plastic composite sheet		 Surface and forming quality are emphasized in the development of
this product. It is currently used in China and North America
container body market. It has high tensile strength, is convenient
and light weight, and has added values such as economical value,
safety, energy-savingand environmentallyfriendly.
28. High weather resistance and
self-cleaning color coated
steel sheet		 Develop new type of self-cleaning color coated steel sheet, with
hydrophilic additives added to the coating material, giving the
product surface excellent self-cleaning and stain resistant
characteristics. It is applicable for outdoor building materials of
high added value.
29. Cold-rolled transformation
induced plasticity steel		 Develop cold-rolled transformation induced plasticity steel
products, increases products' added value, product diversification

－112－

Item Goal
product and satisfies customers' special requirements. The product is
applicable for automotive structural parts.
30. Cold-rolled products for flux
cored wire		 Develop cold-rolled products for flux cored wire, increases
products' added value, product diversification and satisfies
customers'special requirements.
31. Cold-rolled products for
Bundy tube		 Develop cold-rolled products for Bundy tube, increase products'
added value & product diversification, and satisfy customers'
special requirements,applicablefor freezers.
32. Cold-rolled products for rice
cooker		 Develop cold-rolled products for rice cooker, increases products'
added value, product diversification and satisfies customers' special
requirements.
33. Tungsten Carbide Coated Roll Increase useful life of zinc pot and stability of quality
34. The development of antistatic,
efficient anti-microbial
pre-painted steel		 Antistatic, efficient anti-microbial pre-painted steel sheet is
developed by combining antistatic agents and anti-microbial paint
coatings. The product can be applied to construction projects with
specificrequirements toincrease product competitiveness.
35. The development of efficient
anti-microbial metallic coated
steel		 Efficient anti-microbial metallic coated steel with anti-microbial
passivation is developed for construction projects with specific
requirements toincrease product competitiveness.
36. The development of hot-dip
Al-Si hot stamping steel		 Hot-dip Al-Si hot stamping steel, a product with bright market
prospects for automotive safety parts, is developed to increase
productvariety.
37. The development of
photocatalytic antibacterial
pre-painted steel		 Antibacterial pre-painted steel sheet was developed by combining
paint coatings with photocatalysts, which can be applied to
construction projects with specific requirements to increase product
competitiveness.
38. The development of advanced
high strength dual phase
DP590 hot-dip galvanized
steel		 DP590 dual phase steel, which is widely applied for automotive
safety structural part in the market at present , is developed to
increase product variety.

－113－

(II) Industry Overview:

1. Current state and development of the industry

Steel, being a necessary raw material for social and economic development, is a key indicator to evaluate a country's industrial production capability. Every country in the world deems its steel industry a a sign of state power. To improve a nation’s competitiveness, every country, developing and developed alike, takes an proactive stance in boosting the industry.

In the earlier phase, domestic steel industry develops in line with the post-war needs for economic development, and gains a footing gradually through the period in which the government carries out its economic planning and development in several phases. Generally, development of domestic steel industry can be broken down into 5 phases: The infancy phase before 1971; the growth phase in mid-1970s after the incorporation of China Steel Corporation (CSC); the mature period in 1980s when CSC launched its expansion of phase 2 and phase 3 construction, and private investors actively participates in plant construction.

After endeavors for half a century, domestic steel industry has shifted in line with the economic development from making steel out of scraps in the early days to adopting highly-mechanized steel mills and steel mills equipped with electric furnaces. The most advanced production techniques are also introduced, providing a complete basis for Taiwan's steel industry. Currently, domestic steel industry possess a comprehensive system comprising upstream, midstream, and downstream suppliers. Except for ultra-special steel products, it wields the ability to produce the various steels by itself.

The steel industry has a high capital and high technology-intensive characteristics, and the development of the industry must rely on the support of industrial, electrical machinery, civil, transportation and information industries, and the integration of downstream industries, and thus, the industry is highly capable of the industry's industrial and industrial development. Thus, the Company has made great contribution to the industry and thus has a significant output in the industry. Thus, the Company has made great contribution to the industry and the industry is highly committed to the industry. Thus, the Company has made great contribution to the industry and the industry is expected to have a significant output. Thus, the Company has made great contribution to the industry and the industry's overall economic growth.

  1. Relationship between upstream, mid-stream and downstream companies:

From the production history of iron and steel advanced countries, plated steel has the effect of replacing hot-rolled and cold-rolled steel. The rapid growth of the demand can be seen from the continued demand growth of global plated steel materials in recent years. Also, plated steel materials such as galvanized and coated steel plate are equipped with features such as: excellent corrosion resistance, easy processing, nice exterior, long useful life, low maintenance cost, recyclable and reusable and can replace wood, etc. With global climate anomalies and increase in environmental protection awareness in recent years, it has become an ideal environmental friendly material for infrastructure.

If upstream steel mills are able to supply low cost and competitive raw materials to mid and downstream companies, and let mid and downstream companies to turn to processing, export or for domestic sale, it will effectively increase the performance of processing and export, enhance the growth of gross domestic product (GDP). In addition, if upstream steel mills are able to further provide mid and downstream companies with in-depth processing, creating raw materials with higher added

－114－

values, it would be able to bring out the effect of up, mid and downstream supply chain integration. The industry's foundation will then continue to expand, and mid and downstream companies will be able to better obtain industrial upgrade opportunities, create cluster effect, increase investment proportion in Taiwan, and create more job opportunities.

Yieh Phui is a professional manufacturer of plated steel materials such as galvanized products, coated steel coil, etc. Before the 90s, the supply of domestic plated steel material was less than demand, and had to rely on import to satisfy the gap after the significant increase in consumption. As such, the Company strove to replace imports with self-manufactured products. Besides attaining the goal of replacing imports with domestic products, it also relieves downstream processing companies of the inconvenience of delay in delivery date, unstable quality, tying down of funds, exchange rate risk, etc., that arise due to import. It directly increases operating efficiency and improves international competitiveness.

3. Product competitiveness and development trend:

In recent years, global plated steel material consumption continues to see a stable growth, leading to continued increase in production capacity. Influenced by globalization trend, the change of market share accelerated. Adapting to the change and adjusting the operating strategies to adapt to the global market pose a challenge.

As an island, the economy in Taiwan is the so-called "shallow-plate" type, of which natural resources are limited and economic growth heavily relies on international trades and income generated by exporting. With the backdrop of global marketing in steel, in terms of Free Trade Agreement (FTA), Taiwan is currently relatively weaker than other competing countries. This results in decrease in export competitiveness due to difference in tariff. Improvement in the short run is not expected and requires the government's active intervention.

However, the Company will strive to maintain flexible operation, and continue to enhance our product categories, dimension combination, equipment capacity, etc. which are more superior to our peers'. We will also expand our marketing channels, providing customers with more comprehensive services and feedback on raw materials purchase. Besides actively increasing product quality and image, we will also actively develop new products, to realize the blue ocean strategy, exceed our competitors, and conform to environmental protection trend. Our product specifications are geared towards environmental friendly green products, with the aim to increase operating performance.

－115－

(III) Overview of Technology and R&D:

  1. Consolidated research and development expenses invested in last fiscal year, up to the date of publishing of this annual report:

  2. A total of NT$92,748(000) in 2020, and NT$25,663(000) between January and March 2021.

  3. Consolidated products successfully researched and developed

Item Date of
Development		 Results
Environmental consumer product
development and mobile learning		 February
2016		 Successfully developed SGLC products (thickness 0.2mm -
0.3mm) of good flatness, and with substrate content and process
adjustment, is applicable for electronic and electrical products
for shallow drawn forming and welding, to meet the
requirements of lightweight and low cost.
EP Energy Segment Checklist November
2016		 Successfully developed HSLA galvanized products steel sheet
with thickness of more than 2.0 mm and tensile strength of 410
MPa and 480 MPa, applicable for high processing and welding
in motorcars and station wagon. This product complies with the
requirements of European Union's RoHS and automotive
directive.
Environmental
trivalent-chromium metallic
coated steel product for outdoor
use		 June 2017 The successful development of environmental trivalent
chromium metallic coated steel sheets for outdoor building
materials complies with the EU Directive of not using
hexavalent chromium before September 20, 2017; it was
produced approximately 15,000 tons in the fourth quarter of
2017 and saved approximatelyNT$8 million of solution cost.
Environmental color coated steel
product for outdoor use		 August 2017 The successful development of color coated steel product for
outdoor building materials complies with the relevant
regulations of the EU and Japan on 2019 green chrome-free
green building materials, and the development progress and
product physical and chemical properties are significantly ahead
of those in the domestic coating industry, increasing YP's
product competitiveness all over the world.
Environmental chrome-free color
coated steel product for
stone-coating metal products		 October
2017		 Successfully developed environmental chrome-free color coated
steel product for stone-coating metal tiles in Europe. The
performance evaluated by customers is better than that of
European competitive steel products. This makes YP a leading
player in the EU's relatively competitive market and has
obtained great attention from customers of the US, Japan,
Australia and New Zealand.
High performance nano
environmental passivating and
surfacing coated steel sheets		 June 2018
October
2018		 Surfacing and coated steel sheets were successfully developed.
With the verifications of Food Industry Research and
Development Institute and SGS, the products are anti-bacterial
and anti-mold that can prevent bacteria with strong resistance,
such as SA, Corynebacterium Diphtheriae, Legionella
pneumophila, Aspergillus niger. The products are certified by
Taiwan Nanotechnology Industry Development Association
(TANIDA), wildly implemented in wall and air-con system in
medical institutions, food and biotechnology factories, libraries,
theaters, shopping malls, airports, MRT stations, and other
public areas. Theycan avoid the risks of cluster infection.
Environmentally friendly surface
treatment for pre-painted steel
substrate		 April 2019 Successfully developed chrome-free surface pretreatment which
is decomposed during degreasing process in the coil coating
line. By replacing conventional oil treatment, the new
pretreatment successfully breached the barrier of the European
Safeguards, with a accumulated annual sale of more than 60,000
tons.
High performance indicators
(continued)		 July 2019 By fully understanding the paint properties and adjusting the
curing temperature profile, paint supply and coating
technologies for PVF(polyvinyl fluoride)were successfully

－116－

Item Date of
Development		 Results
developed. PVF offers higher weather and chemical resistance
than PVDF and is suitable for high-end construction projects
and environments classified as C5 and CX.
High performance
TEDLAR film laminated
steel		 February
2020		 Successfully developed DuPont TEDLAR PVF
(polyvinyl fluoride) film laminated steel. Composed
of more than 99% of fluoropolymer, the film provides
very high weather and chemical resistance which is
ideal for high-end construction projects and can
greatlyincrease the value of Yieh Phuiproducts.
Anti-fingerprint coating
with high corrosion
resistance for outdoor
applications		 September
2020		 In addition, in order to maintain its anti-cancer
performance, the high intensity of the production
process is expected to lead to an anti-cancer and
anti-cancer breakthrough.
HSLA cold-rolled steel product At 31
December
2016		 14003658 Successfully developed HSLA cold-rolled steel of
260MPa grade tensile strength, applicable for automotive
structuralparts.
HSLA metallic coated steel
product		 March 2016 Successfully developed HSLA cold-rolled metallic coated steel
sheet of 260MPa grade tensile strength, applicable for
automotive structuralparts.
Pickling communication disk
temperature control system		 June 2016 Real-time monitoring of environmental temperature of electrical
control room, prevent protective power outage due to
overheating.
A new shape of backup roll
development		 October
2016		 Change backup roll forming in existing rolling mill to prevent
slanted steel sheet
Anti-microbial and
anti-fingerprint treated metallic
coated steel product		 March 2017 Develop low-temperature anti- microbial and anti-fingerprint
treated metallic coated steel product so that product is equipped
with self-cleaning and anti- microbial features, able to reduce
contact between human body and bacteria, and improve
operating environment. The product is applicable for ducting
and decking.
Aluminum coated steel product October
2017		 Develop aluminum coated steel products, increases products'
added value and product diversification, and satisfies customers'
special requirements. The product is applicable for automotive
parts.
Self-lubricating metallic coated
steel product		 November
2017		 Develop anti-fingerprint treated metallic coated steel product
with self-lubricating function, increasing product's processing
and forming performance.
HSLA cold-rolled steel product October
2017		 Successfully developed HSLA cold-rolled steel of 340MPa
grade tensile strength,applicable for automotive structuralparts.
High corrosion resistant
zinc-aluminum coated steel
products		 April 2017 To cater to the requirements of materials for ABB electrical box,
develops high corrosion-resistant zinc-aluminum coated steel
products under salt spraytesting.
A type of equipment with highly
efficient HCLgas absorption		 March 2017 Use in ARP HCL recovery and reuse, to reduce loss of materials
and environmentalpollution
Cold-rolled products for Bundy
tube		 December
2017		 Develop cold-rolled products for Bundy tube, increase products'
added value & product diversification, and satisfy customers'
special requirements, applicable for condensers of refrigerators
and freezers.
The development of high strength
low alloy hot-dip galvanized
H260LA,H420LA steel		 June 2018 Successfully developed the high strength low alloy hot-dip
galvanized steel sheet, it is applied for the
automobile stamping parts.
The development of high strength
interstitial free H220YD hot-dip
galvanized steel		 July 2018 Starting from the market demand, develop the coating products
conforming to EN10346-HX220YD which applicable for the
automotive stamping parts.
The development of lubricant October In order topurifythe recyclingof the temperingemulsion and

－117－

Item Date of
Development		 Results
circulation system for temper
mill at hot-dip galvanizingline		 2018 reduce the cost, one filtering device is developed to remove zinc
or iron fines in the lubricant circulation system.
The development of high strength
low alloy hot-dip galvanized
HX300LA steel		 November
2018		 Successfully developed the high strength low alloy hot-dip
galvanized steel sheet, it is applied for the automobile stamping
parts.
The development of thermal
spraying tungsten carbide
WC-12Co coated roll		 November
2018		 In order to effectively increase service life of zinc pot roll and
improve the quality of hot-dip galvanized steel sheet, Yieh
Phui(China) developed one thermal spraying tungsten carbide
coated roll.

－118－

(IV) Short- and Long-Term Business Development Plans

1. Long-Term Business Development Plans:

Long-term business development direction is the fundamentals of continuing to develop niche products and niche market. The Company flexibly adjusts product profile based on customer requirements, continues to develop market or products for end use, embarks on the environmental-friendly trend, to cater to the rapid market growth in Asia regions and other emerging industrial countries, as well as catering to existing sales channels.

2. Short-term Business Development Plan

Taiwan is a thin market, and the Company estimates that it was one of the top three suppliers of hot-dip galvanized and pre-painted steel products. Although domestic sales do not make up majority of overall sales, in response to COVID-19 and the strong exchange rate of the New Taiwan Dollar, especially significant during violent international market condition.

The short-term goal is to actively strengthen the product portfolio and implement the business direction of securing domestic market share. At present, the main product applications are focused on four major material solutions such as health and environmental protection, renewable energy, safety and fire protection, and information electronics, while satisfying domestic customers' demand for material quality improvement and expanding the business scope of the Company.

II. Market, Production and Sales Overview

(I) Market Analysis:

  1. Product's main sales regions:

The Company's plated and coated products continue to be marketed to the world, with sales channels in various places around the world. Besides the basic domestic market, export markets include China, Southeast Asia, Middle East, United States, Canada, E.U., Australia and other regions.

  1. Market share and market's future supply and demand situation and growth: According to the steel demand forecast of Taiwan (2020-2021) issued by Taiwan Iron and Steel Association in 2020, the annual demand of hot-dip galvanizing (including GI, GA, gf and GL) in 2019 was about 1.292 million tons, a decrease of 8.376% compared with about 1.41 million tons in 2018, which was caused by the Section 232 Tariffs on Steel & Aluminum of U.S. and the U.S.-China trade war, which caused the instability of international steel market, and the domestic market was also affected. Reflecting this, the demand for hot-dip galvanizing in 2020 is expected to stand at 1.24 million tons, decreased by 4.0% from 2019. However, in recent years, China has continued to promote the reform of the steel industry, and in 2021 will implement the policy of double control

－119－

of production capacity and output, both for the domestic and international steel market is a positive message.

The Company will continue to implement global marketing strategy. The export ratio is expected to be 55~60% in 2020. In addition to fully satisfying domestic market demand this year, we will flexibly adjust to market conditions, place an appropriate proportion of our products in the international market and strive to increase the added value of our products, and flexibly adjust customer orders to ensure operating efficiency and performance.

  1. Analyze the advantages and disadvantages of competitive niche and development prospect, and then provide countermeasures against the disadvantages:

Advantages:

  • A. The product line of plating and coating are complete and the output ranks first in the industry. Under the production conditions of economic scale, the Company can fulfill the market demand, and the cost competitiveness is superior to other companies. In recent years, the Company actively develops various green eco-friendly products, and is able to increase the products' added value and fulfill the customers' various order requirements.

  • B. With the frequent global climate anomalies, and increasing attention paid to environmental protection, galvanized and coated steel products processed from steel and iron raw materials are equipped with environmental friendly, recyclable and reusable properties, possessing high development potential in the future.

  • C. The purchase of hot rolling raw materials is mainly from domestic sources, which can avoid risks such as exchange rate, delivery date and quality. In particular, the strong rise in the New Taiwan dollar in 2020 has significantly reduced the impact of international fluctuations.

  • D. According to the statistics of the CRU International Steel Journal, the global consumption of plated steel in 2020 is about 167,110,000 tons, a decrease of 13,530,000 tons from the 18.063 million tons in 2019, a decrease of 7.5%. It is obvious that the economy of each country was in temporary recession due to the impact of COVID-19. However, during the years from 2010 to 2020, the average compound annual growth rate of consumption has reached 1.9%, suggesting that plated steel sheets are still flourishing in various areas.

  • E. Compared with the industry, the Company continues to implement internal management, which is conducive to the progress of production and marketing The Company had introduced Total

－120－

Productive Maintenance (TPM) as early as 1998, of which the first-level TPM focused on "equipment," the second-level TPM focused on "personnel," the third-level TPM focused on "corporate image" and "quality service," the fourth-level TPM focused on "touching service," and the fifth-level TPM focused on "comprehensive service," so as to make Yieh Phui an enterprise valuing both manufacturing and services. The Company has currently committed itself to "Becoming world's best iron and steel manufacturing and service enterprise by 2020."

Unfavorable factors:

  • A. Ever since Taiwan became a member of WTO in 2002, import tariff on steel products has been eliminated. Along with the fact that domestic infrastructure construction slows down, domestic demands for steel are not easy to rise. Although the Company wields an advantage in quality, the competition from low-price steel imports is inevitable, the Company must change and innovate in time to meet business challenges.

  • B. The Company adopts a high proportion of export sales strategy. The international market fluctuates with the global economic situation, making it not as stable as the domestic market. In recent years, the prosperity of trade protection in various countries highlights the Company's difficult situation in global trade.

  • C. The progress of the signing of Free Trade Agreement (FTA) between Taiwan and other countries is slow, resulting in a gradual decrease in Taiwan's foreign trade competitiveness, and making sales in the global market more difficult. 10 Association of Southeast Asian Nations (ASEAN) countries and 5 non regional countries (excluding India) including Mainland China conducted free trade negotiations. The "Regional Comprehensive Economic Partnership", (RCEP) has completed on November 15, 2020. Except for Taiwan, almost all economies with some scale in Asia are included. China, Japan and South Korea will be more competitive in the Southeast Asian market due to import tariff preferences, and Taiwan will continue to be excluded.

－121－

(II) Usage and Manufacturing Processes for the Company's Main Products

1. Main Products:

Product Item

Main usage

  • Pickled steel coils

Pickled steel coils For use in electrical appliances, furniture and motor cars, industrial machinery, etc. Cold rolled steel coil For use in electrical appliances, furniture and motor cars, industrial machinery, etc.

  • Galvanized steel coils Raw materials for construction industry, household appliances, hardware, automobile industry, machinery

  • Pre-painted steel coils Raw materials for construction industry, household appliances, hardware, automobile industry, machinery

  • Steel coil products Raw materials for construction industry, household appliances, automobile industry (scooter, bicycle), machinery

  • Building's steel structure Building structure of residential buildings, office buildings, supermarkets, etc.

  • Plant's steel structure Plant structure for electronic plant, power plant, steel mill, incineration plant, etc.

  • Bridge's steel structure For use in roads and bridges Frame crane Bridge crane for transportation and hoisting in industrial plants

  • Straddle Carrier Lifting equipment for arranging and transportation of containers at container yard

  • Container crane Lifting equipment for hoisting of container at ports and harbors

  • Steel pipe Raw materials for construction industry, furniture, automobile industry (scooter, bicycle), machinery

－122－

2. Manufacturing process:

==> picture [472 x 650] intentionally omitted <==

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

Hot-rolled steel
coil
Pickling Pickled steel
coils
Warehouse
outbound
Cold rolling Cold rolled steel
coil
Galvanization Galvanized steel Warehouse
coils inbound
Coating Pre-painted steel
coils
Hot-rolled/cold-rolled steel
coil
Slitting
Warehouse
outbound
Tubing Hot-rolled/cold-r
olled steel pipe
Warehouse
inbound
Galvanization Galvanized steel
pipe
Hot-rolled/pickled/cold-rolled
steel coil Warehouse
outbound
Hot rolling/Pickling/cold
rolling
Cutting/Slitting Cutting steel plate, steel Warehouse
inbound
strip
Finished product inspection
Finished product inspection
Finished product inspection
----- End of picture text -----

－123－

Manufacturing process

==> picture [304 x 220] intentionally omitted <==

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

Steel plate/structural
steel
Raw material
production
Cold working Hoisting at site
Welding Warehouse
inbound
Coating Finished product
inspection
----- End of picture text -----

==> picture [188 x 215] intentionally omitted <==

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

Steel plate/machinery/electrical
product
Cold working On-site
inspection
Welding Hoisting
Machining Factory test
Coating Assembly
----- End of picture text -----

==> picture [101 x 169] intentionally omitted <==

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

Square tube, H-beam
Product: Steel structure
for buildings
Product: Steel structure
for plants
Product: Steel structure
for bridges
----- End of picture text -----

==> picture [107 x 119] intentionally omitted <==

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

Product: Overhead crane
Product: Straddle Carrier
Product: Container crane
----- End of picture text -----

－124－

(III) The Supply Status of the Major Raw Materials:

Main raw materials Supply by domestic
suppliers		 Supply by foreign
suppliers
Steel rolls 91.45% 8.55%
Paint 100.00% 0.00%
Zinc (aluminum)
ingots		 50.69% 49.31%
Steel billet 78.88% 21.12%

－125－

(IV) Information of customers that contribute to more than 10% of total sales in last two years:

  1. List of suppliers that contribute to more than 10% of the Company's net purchase:

Information of major suppliers in the most recent 2 fiscal years

2019 2019 2019 2019 2020 2020 2020 2020 As of last quarter of 2021 (Note 2) As of last quarter of 2021 (Note 2) As of last quarter of 2021 (Note 2) As of last quarter of 2021 (Note 2)
Item
Type		 Amount Percentage of annual
net purchase (%)		 Relationships
with the
issuer
Type		 Amount Percentage to net
purchase in the year
up to the previous
quarter(%)		 Relationships
with the issuer		 Type Amount Percentage to net purchase
in the year up to the
previous quarter (%)		 Relationships
with the
issuer
1 4017 13,519,552 27.36% Non-related
parties		 4017 9,774,480 21.53% Non-related
parties		 4017 3,508,041 21.96% Non-related
parties
2 A00194 1,764,373 11.05% Non-related
parties
3
Others 35,886,383 72.64% Others 35,625,669 78.47% Others 10,701,338 66.99%
Net
purchases
ofgoods		 49,405,934 100.00% Net
purchases of
goods		 45,400,149 100.00% Net
purchases
ofgoods		 15,973,752 100.00%

  • Note 1: List the names of suppliers with more than 10% of the total purchase amount in the most recent 2 fiscal years, as well as the purchase amount and proportion. However, if it is not allowed to disclose the names of suppliers or trading partners as individuals and non related parties due to contractual agreements, it can be coded as such.

  • Note 2: Until the date of publication of the annual report, a company whose stock is listed on the stock exchange or traded over the counter, shall disclose the most recent financial statement audited or attested by the CPA, if any.

Reason for increase or decrease: cater to business requirements

－126－

  1. List of customers that contribute to more than 10% of the Company's consolidated net sales:

Information of ma or customers for the most recent 2 fiscal ears j y

2019 2019 2019 2019 2020 2020 2020 2020 As of last quarter of 2021 (Note 2) As of last quarter of 2021 (Note 2) As of last quarter of 2021 (Note 2) As of last quarter of 2021 (Note 2)
Item Type Amount % of
annual net
sales		 Relations
hips with
the issuer
Type		 Amount % of
annual
net sales		 Relations
hips with
the issuer
Type		 Amount Percentage
to net sales
in the year
up to the
previous
quarter(%)		 Relation
ships
with the
issuer
1
2
3
4
5
6
7
8
9
10
Others 59,687,597
100.00%		 Others 55,421,795 100.00% Others 18,690,275 100.00%
Net Sales 59,687,597
100.00%		 Net Sales 55,421,795 100.00% Net Sales 18,690,275 100.00%

Note 1: List the names of suppliers with more than 10% of the total sales amount in the most recent 2 fiscal years, as well as the purchase amount and proportion. However, if it is not allowed to disclose the names of suppliers or trading partners as individuals and non related parties due to contractual agreements, it can be coded as such.

Note 2: Until the date of publication of the annual report, a company whose stock is listed on the stock exchange or traded over the counter, shall disclose the most recent financial statement audited or attested by the CPA, if any.

－127－

(V) Production Volume and Value of the Most Recent Two Years

Unit: tons; NT$ thousands

Year
Production
and volume
Main products
(or department)
2020
2020
2020		 2019 2019 2019
Production
capacity		 Production
volume		 Production
value		 Production
capacity		 Production
volume		 Production
value
Pickled steel coils 2,110,000
1,355,379		 20,400,347 2,110,000 1,092,291
18,171,900
Rolled steel coil 1,020,000
452,181		 7,285,921 1,020,000 444,877
7,985,921
Hard rolled steel coil 1,600,000
1,360,172		 21,183,907 1,600,000 1,306,035
21,513,930
Cold rolled steel coil 500,000
134,373		 2,389,222 500,000 99,805
1,907,895
Galvanized steel coils 2,300,000
1,857,690		 34,696,562 1,900,000 1,610,579
32,909,003
Pre-painted steel coils 920,000
566,363		 13,413,166 710,000 495,765
12,743,276
OEM steel coil -
95,670		 204,123 - 74,221
148,766
Others -
103,877		 1,031,286 - 104,131
1,103,883
Steel pipe 300,000
195,148		 3,566,878 300,000 232,512
4,814,523
Bridge crane -
17		 263,850 - 13
259,720
Steel structure -
28,266		 757,732 - 30,116
1,295,239
Wire 500,000
216,449		 5,533,835 500,000 288,144
6,737,439
Total 9,250,000
6,365,584		 110,726,829 8,640,000 5,778,490
109,591,495

Note 1: Production capacity refers to the volume of product that can be produced by a company using existing production equipment and under normal operation, after taking into consideration factors such as necessary downtime, holiday, etc.

Note 2: Substitutable production capacity may be included in the production capacity and be stated in the note.

(VI) Sales Volume and Value of the Most Recent Two Years:

Unit: tons; NT$ thousands

Unit: tons; NT$ thousands Unit: tons; NT$ thousands Unit: tons; NT$ thousands Unit: tons; NT$ thousands
Year
Sales
volume
Main products
(or department)
2020		 2019
Domestic sales Export Domestic sales Export
Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Pickled steel coils 60
564		 881 12,326 165 2,077
2,234		 33,666
Rolled steelcoil 1,568
16,587		 - - 1,523 18,939 - -
Hardrolled steelcoil -
-		 228,699 3,721,976 148 2,595
271,660		 4,617,169
Coldrolled steelcoil 207 3,258 124,974 2,171,622 - -
93,759		 1,649,109
Galvanized steel coils 301,284
5,548,437		 870,181 18,343,998 300,733 6,353,649
782,735		 18,280,314
Pre-painted steel coils 68,615
2,235,273		 467,091 12,610,376 66,221 2,343,995
436,786		 12,771,671
Trading 41,325
639,395		 - - 49,667 818,830
-		 -
OEM steel coil 45,623
167,736		 125 272 35,020 119,464
250		 1,306
Wire 206,257 4,372,320 17,925 1,217,471 268,046 4,896,073
21,277		 1,565,052
Steelpipe 59,402
1,228,892		 47,288 983,472 85,663 1,637,304
67,449		 1,767,019
Bridge crane 17
304,112		 - 818 13 269,096
-		 7
Steel structure 28,266
830,300		 - - 30,116 1,377,586
-		 -
Others 37,735
320,459		 67,614 692,131 45,827 421,592
68,711		 741,086
Total 790,361 15,667,333 1,824,776 39,754,462 883,142 18,261,199
1,744,861		 41,426,398

－128－

III. Employee Information of the Most Recent Two Years up to the Printing

of this Annual Report:

of this Annual Report: of this Annual Report:
Year 2019 2020 Current year up to
March 31, 2021
(Note)
Number of
employees		 Male 3,634 3,758
3,828
Female 645 886
959
Total 4,279 4,644
4,787
Averageage 40.22 39.93
39.87
Average yearofservices 10.81 10.08
10.02
Education level PhD 0.30% 0.30%
0.29%
Masters 7.36% 7.39%
7.14%
University 53.07% 53.27%
53.75%
Senior
(Vocational) High		 34.73% 35.31%
35.10%
Below high
school		 4.53% 3.73%
3.72%

Note: The annual data shall be updated as of the publication date of this annual report.

－129－

IV. Environmental Expenditures:

(I) Total damages (include compensation) and punishment due to environmental pollution in last fiscal

year up till January 14, 2021:

Item 2017 2018 2019 2020 January 14, 2021
Pollution
(type, extent)		 None In violation of
the provisions of
the "Air
Pollution control
Act", burning,
melting, refining,
grinding, casting,
conveying or
other operations
are carried out,
resulting in the
generation of
obvious granular
pollutants,
scattered in the
air or other
people's property.

None		 The storage,
removal or
disposal methods
and facilities for
business waste in
violation of the "
Waste Disposal
Act" shall
comply with the
regulations of the
central
competent
authority.


None
Compensation
recipient or
unit imposing
the
punishment		 None The unit
imposing the
punishment is
Kaohsiung City
Government
Environmental
Protection
Agency		 None The unit
imposing the
punishment is
Kaohsiung City
Government
Environmental
Protection
Agency		 None
Compensation
amount or
punishment		 None Fine of
NT$100,000, and
2 hours of
environmental
education
workshop.
None		 Fine of
NT$60,000 and 2
hours of
environmental
education
workshop.
None
Other damages
None		 None None None None

(II) Future countermeasures and possible expenditure:

  1. Improvement plans:

  2. (1) Implement environmental protection, abide by the various environmental protection laws and regulations.

(2) Abide by ISO 14001 system, and carry out regular checks and identification in accordance to the environmental protection laws and regulations.

  • (3) Actively implement management by wandering around in the plant, and deficiency correction preventive measures.

(4) Take part in various environmental law seminars and strengthen communication and

coordination with the competent authority.

Item 2020 2021 2022 2023
Pollution
control
equipme
nt to be
purchase
or
expendit
ure		 1. Supplies
replacement and
cleaning of air
pollution control
equipment.
2. VOCs air pollution
charges.
3. Sulfur oxides and
nitrogen oxides
emissioncharge.		 1. Supplies
replacement and
cleaning of air
pollution control
equipment.
2. VOCs air pollution
charges.
3. Sulfur oxides and
nitrogen oxides
emissioncharge.		 1. Supplies
replacement and
cleaning of air
pollution control
equipment.
2. VOCs air pollution
charges.
3. Sulfur oxides and
nitrogen oxides
emissioncharge.		 1. Supplies
replacement and
cleaning of air
pollution control
equipment.
2. VOCs air pollution
charges.
3. Sulfur oxides and
nitrogen oxides
emissioncharge.
Expected
Improve		 1. Replace Raschig
ring,heat storage		 1. Replace Raschig
ring,heat storage		 1. Replace Raschig
ring,heat storage		 1. Replace Raschig
ring,heat storage

－130－

Item 2020 2020 2021 2021 2022 2022 2023 2023
ments materials and dust
filter bag regularly
to improve air
quality
(approximately
NT$3,224.5
thousand).
2. Expected to pay
VOC emission
charges of
NT$357.5 thousand
per year.
3. Expected to pay
sulfur oxides and
nitrogen oxides
emission charges of
NT$181.5 thousand
peryear.		 materials and dust
filter bag regularly
to improve air
quality
(approximately
NT$3,224.5
thousand).
2. Expected to pay
VOC emission
charges of
NT$357.5 thousand
per year.
3. Expected to pay
sulfur oxides and
nitrogen oxides
emission charges of
NT$181.5 thousand
peryear.		 materials and dust
filter bag regularly
to improve air
quality
(approximately
NT$3,224.5
thousand).
2. Expected to pay
VOC emission
charges of
NT$357.5 thousand
per year.
3. Expected to pay
sulfur oxides and
nitrogen oxides
emission charges of
NT$181.5 thousand
peryear.		 materials and dust
filter bag regularly
to improve air
quality
(approximately
NT$3,224.5
thousand).
2. Expected to pay
VOC emission
charges of
NT$357.5 thousand
per year.
3. Expected to pay
sulfur oxides and
nitrogen oxides
emission charges of
NT$181.5 thousand
peryear.
Amount Approx.$ 3763.5
thousand		 Approx.$ 3763.5
thousand		 Approx.$ 3763.5
thousand		 Approx.$ 3763.5
thousand
2.
Expected environmental protection capital expenditures for next three years
3.
Impact after improvements
Item 2020 2021 2022 2023
Impact on netprofit Low impact Low impact Low impact Low impact
Impact on competitive
position
Continue to increase environmental protection performance, promote harmony in
neighborhood,and maintaingood corporate image.

－131－

V. Labor-management Relations: (I) Existing important labor-management agreements and implementation situation:

The Company belongs to the iron and steel industry. Our employees are competent, and we implement people-oriented management. We fallow the clauses in the " Universal Declaration of Human Rights", The "the UN Guiding Principles on Business and Human Rights", "The United Nations Global Compact, (UNGC)" ", and "International Labor Organization" - recognize the right of everyone to freely choose / accept work for a living, treat and respect colleagues, contract staff and interns with dignity. In addition to providing guidance and training on job-related capacities, the Company provides legal, equitable and quality labor conditions to ensure that employees and their families lead a stable life; employees actively participate in matters of labor management relations while the Company develops a harmonious business environment both for the employer and the employees through honesty:

  1. Respect basic human rights, demonstrating diversity and equal opportunities for all

  2. (1) To ensure equal employment opportunities, an employer shall not discriminate against job applicants on the basis of race, social class, language, belief, religion, political party, origin, birth place, sex, sexual orientation, age, marital status, appearance, features, disability, horoscope, blood type or past membership of a labor union. The employer shall not conduct discriminative physical, verbal, or dispositional action based on the above listed.

  3. (2) The company has formulated a clear and fair employee policy/standards and do not employ child labor, and provide employees with fair wages and equal salary for the same type of jobs without discrimination. To boost morale and retain/attract talent, the salary for employees is irregularly adjusted with reference to price changes and salaries within the industry. In fiscal 2020, due to the impact of COVID-19 and after considering the operating conditions, the salary was adjusted on January 1, 2021, with an average salary increase of 3.2%.

  4. (3) The Company deploys fairness of employment, remuneration, training, evaluation, and promotion opportunities, and the provision of effective and appropriate grievance mechanisms. Employee complaint channels such as "Operations without Illegal Intervention", "Sexual Harassment Prevention Regulation", "Workplace Unlawful Prevention" and "Sexual Harassment Prevention Committee" are all established to prevent and respond to the rights and interests of employees.

  5. (4) Established internal regulations of award and punishment for cases of management level or peer bullying and workplace violence such as physical and verbal assaults, intimidation and threatening, etc.

  6. (5) Employee Welfare Committee encourages employees to establish

－132－

diverse clubs and promote leisure and entertainment to cultivate peer connection.

  1. Healthy and safe workplace

  2. (1) The Company has obtained the "Excellent Healthy Workplace" award by the "Healthy Workplace Certification of National Health Service, Ministry of Health and Welfare".

  3. (2) The Company has obtained "Sports Enterprise Certification of Sports Administration, MOE".

  4. (3) The Company has a health management center, which is equipped with fitness equipment and health station testers. In addition to employing trainers to provide guidance, the company can also analyze and record the physical and mental status indicators of employees, so that the company not only carries out TPM comprehensive equipment quality maintenance, but also pays more attention to the promotion and improvement of the physical and mental status of employees.

  5. (4) The Company provide each employee annual medical checkups by E-Da Hospital, serving as a preliminary health check for the employees.

  6. (5) The Company worked with E-Da Hospital in setting up a clinic in the factory, assist employees in health management and regularly hold various healthy activities, encourage employees to participate freely in order to provide a healthy life for employees.

  7. (6) The Company worked with E-Da Hospital to provide "Employee Health Management Planning and Services". Through the establishment of the Company's exclusive health care manager, we analyzed the annual health examination results and work-related factors, tracked specific personnel by grouping, prevented potential health risks, and provided the Company's employee health management, health information, medical consultation and other services.

  8. (7) The working hours are based on labor laws and regulations to ensure that employees are not exposed to the risks of overwork and excessive hours. The regulations governing the determination of work hours and extended work hours are specified in the regulation to regularly manage and care for employees' attendance status and health risks.

－133－

  1. Communication and rewards

  2. (1) The Company spares no effort in setting up internal communication channel. GroupWise e-mail system is now widely used by the employees, reducing the overuse of paper and reports.

  3. (2) Sets up labor-management meetings, meetings for members of occupational safety and health committee, meetings for labor retirement reserve fund supervisory committee and meetings for employee benefits committee, providing a communication platform for both labor and management respecting employees rights, benefits, and occupational safety.

  4. (3) The Company information corner is set up in the Company's internal website to allow employees to obtain timely information of the Company's directions through diversified communication platform. The setup of employee's voice provides employees a timely and two-way communication channel, making communication more efficient.

  5. (4) The Company has regulations on rewards and punishments. In addition to reporting rewards for great achievements, merit recording and awards, the company may also issue a "bonus" to encourage employees according to the decision of the superior.

  6. (5) To encourage the Company's employees to raise suggestions on improving operation, and attain the goal of improving performance, the Company has an innovation proposal management mechanism, where benefits and awards are calculated based on the benefits from the improvement proposals.

  7. (6) Every year, the Company holds a voting campaign to award and publicly recognize outstanding employees, so they can serve as role models for our employees in the workplace, and become the benchmark for the Company to promote a quality corporate culture of "teamwork, professional skills, service value, and innovation".

  8. (7) In recognition of the fact that internal instructors still devote their time to planning courses, producing teaching materials, delivering courses, and evaluating their effectiveness outside of their personal work, we will report outstanding instructors each year based on such indicators as the number of hours taught, the number of instructors, the satisfaction of students, and the evaluation of training units, and give them awards and recognition.

  9. Welfare and training

  10. (1) The Company treats its staff as one of its important assets. Besides purchasing labor and health insurance in accordance with the regulations, employees may also be protected by group insurance and travel insurance, comprising life insurance and business travel insurance, with premiums fully paid by the Company, providing employees with better security in terms of work and life.

－134－

  • (2) Besides enjoying the benefits of group insurance for themselves, employees may also purchase discounted insurances in critical illness, medical, cancer insurance and personal accident, for their immediate family members and spouse, so that both the employees and their families are well taken care of.

  • (3) Cooperates with E-Da Healthcare Group in providing discounts on medical expenditures incurred by employees' spouse or direct blood relatives.

  • (4) The Company provides various kinds of subsidies and benefits, including subsidies in childbirth, marriage, travel, funeral and burial, hospitalization due to general injury or occupational injury, as well as subsidies and incentives for their children.

  • (5) The Company has established a well-organized Employee Welfare Committee, which is composed of representatives of various departments to organize various employee welfare measures and activities.

  • (6) Employees who have served more than three months may apply for Yieh Phui's stock ownership. 20% of stock ownership is set aside as awards every year, to attain the objective of long-term savings, accumulated wealth, and a stable lifestyle in the future.

  • (7) Bonus shall be paid according to the Company's monthly sales performance and personal performance.

  • (8) The year-end performance bonus will be paid according to the Company's annual business profit and personal performance.

  • (9) Cooperates with Mega International Commercial Bank in providing employees with no more than 10 times of inter-bank withdrawals, ATM transfers and internet bank transfers per month with no administrative charges.

  • (10) Employees may apply special leave and compensatory leave on 2-hourly basis, so that they can strike a better balance between work and family.

  • (11) Employees are allowed to extend their working hours and to perform duties in exchange for days off or for overtime allowance. The flexibility in working hours enable staff to have a balance between work and life.

  • (12) The Group's Leisure and Entertainment Business provides the employees with exclusive discounts on leisure and relaxation.

  • (13) The Company has established a comprehensive talent cultivation and development program and received the gold medal recognition from the Ministry of Labor for the "TTQS Talent Development Quality Management System" for corporate organizations, enhancing training effectiveness with a complete and systematic strategic training system.

  • (14) The Company cares for and encourages new employees, immediately

－135－

communicates the company's values and policies to new employees on time, to provide employees with a friendly and safe working environment.

  • (15) The Company provides ongoing management training, professional training, on the job training, and assist our employees in obtaining the necessary professional licenses for their jobs. We also provide subsidies for our employees to study at I-Shou University to acquire the knowledge, skills, and attitudes needed to improve their work performance and achieve organizational goals.

  • (16) For employees with specific duties, we are required to conduct relevant training/courses and regular retraining in accordance with the Occupational Safety and Health Act, and assist employees to obtain various occupational safety licenses according to their duties to ensure the safety and health of their work and environment, and to prevent occupational disasters from occurring.

  • (17) The Company has set up a knowledge platform for education trainings, and integrated the platform with digital learnings, so as to put forward a systematic operation and management.

  • (18) Finance personnel obtaining relevant qualifications specified by the competent authority:

    • A. The Company's chief financial officer has passed the course of "Professional Certification for Accounting Manager of Public Listed Company" of the Accounting Research and Development Foundation.

    • B. Two audit personnel from the Company have obtained "Basic Proficiency Test for Corporate Internal Control" organized by the Securities and Futures Institute.

    • C. One finance personnel from the Company has obtained "Certificate of Competency in Corporate Action" awarded by the Securities and Futures Institute.

    • D. One finance personnel from the Company has obtained "Certified Public Accountant" license awarded by the Ministry of Examination.

  • Retirement measures and implementation:

  • (1) In order to provide a stable lifestyle for employees after retirement, in accordance with the Labor Standards Act, has established employees retirement mechanism. Regular employees of the Company who meet the retirement requirements of articles 53 and 54 of the Labor Standards Act will be given pension funs based on their years of service in the Company.

  • (2) The Company, according to the Regulations for the Allocation and Management of the Workers' Retirement Reserve Funds, sets aside 6% of employees' actual salary as retirement reserve every month, fills in the

－136－

Retirement Reserve Deposit Slip, and deposit into Bank of Taiwan before the 20th of the following month.

(II) List of damages due to labor-management disputes in the last two years: None

－137－

VI. Major Contracts:

Nature of the
Contract		 Contracting Parties Contract start/end
date		 Major Contents Restrictive
Clauses
Surface rights
contract		 Shin Phui Steel
Corporation		 June 15, 2001-
June 14, 2051		 1. Royalties payment method:
Payment of NT$120,000 thousand
to be amortized over 50 years.
2. As of December 31,2020,
NT$46,900 thousand was
allocated.
Surface rights
contract		 Shin Yang Steel Co.,
Ltd.		 April 1, 2015 -
March 31, 2025		 1. Rental collection method:
Monthly rental of NT$983
thousand closing at the beginning
of each month.
2. Rental income recognized in 2020
was NT$11,796 thousand.
Construction
contract		 Six travelling
container cranes at
track 40T of Pier 120
rear storage area,
Kaohsiung Harbor,
Port of Keelung		 August 14, 2015 -
March 31, 2021		 Total contract value: NT$311,100
thousand.
Construction
contract		 New Spring
Construction's E-DA
Asia Plaza ground
structure construction
project
March 30, 2015 -
June 30, 2021		 Total contract price: NT$1,928,244
thousand.
Construction
contract		 Construction of phase
1 Pangu buildings by
Greaten Construction
Co.,Ltd.
August 7, 2017 -
May 31, 2021		 Total contract price: NT$220,806
thousand.
Construction
contract		 Manufacturing and
installation of 13
overhead cranes,
their steel tracks and
safety electric
bus-way for GMTC
steel furnace plant at
Liuying		 December 27, 2017 -
June 30, 2021		 Total contract price: NT$313,600
thousand.
Construction
contract		 Development project
phase 1 of district C
of the core area of
Shalun Smart Green
Energy Science City
by Reiju
Construction		 April 19, 2018 - June
30, 2021		 Total contract price: NT$260,203
thousand.

－138－

Nature of the
Contract		 Contracting Parties Contract start/end
date		 Major Contents Restrictive
Clauses
Construction
contract		 Manufacture and
installation of
overhead cranes sized
300t(150t+150t)x
43m for the Wind
Power Department of
Century Iron and
Steel Industrial Co.
Ltd.
September 10, 2018 -
June 30, 2021		 Contract price: NT$205,000
thousand.
Construction
contract		 New Spring-e-Da
Asia Commercial
Building
Construction Project
- Steel Structure
Engineering		 July 3, 2018 -
December 31, 2021		 Total contract price: NT$1,320,433
thousand.
Construction
contract		 Tainan New Urban
District New Crystal
Section Warehouse
New Construction
Project of Dung Wei
Construction Co.,
Ltd.		 May 20, 2019 -
March 31, 2021		 Total contract price: NT$207,251
thousand.
Construction
contract		 The project of 14
cranes and electric
tracks installation of
CSBC Corporation,
Taiwan.		 August 19, 2019 -
April 30, 2021		 Total contract value: NT$170,567
thousand.
Construction
contract		 Tung Ho Steel TSMC
Hsinchu Science Park
New R&D Center
Phase I OFFICE B
building production
project

September 14, 2020 -
July 30, 2022		 Total contract value: NT$190,546
thousand.

－139－

Chapter 6 Financial Conditions

I. Condensed Balance Sheet and Consolidated Income Statement for the Most Recent Five Years

(I) Condensed balance sheet (consolidated)

Chapter 6 Financial Conditions
Condensed Balance Sheet and Consolidated Income Statement for the Most
Recent Five Years
(I)
Condensed balance sheet (consolidated)		 Chapter 6 Financial Conditions
Condensed Balance Sheet and Consolidated Income Statement for the Most
Recent Five Years
(I)
Condensed balance sheet (consolidated)		 Chapter 6 Financial Conditions
Condensed Balance Sheet and Consolidated Income Statement for the Most
Recent Five Years
(I)
Condensed balance sheet (consolidated)		 Chapter 6 Financial Conditions
Condensed Balance Sheet and Consolidated Income Statement for the Most
Recent Five Years
(I)
Condensed balance sheet (consolidated)		 Chapter 6 Financial Conditions
Condensed Balance Sheet and Consolidated Income Statement for the Most
Recent Five Years
(I)
Condensed balance sheet (consolidated)		 Chapter 6 Financial Conditions
Condensed Balance Sheet and Consolidated Income Statement for the Most
Recent Five Years
(I)
Condensed balance sheet (consolidated)		 Chapter 6 Financial Conditions
Condensed Balance Sheet and Consolidated Income Statement for the Most
Recent Five Years
(I)
Condensed balance sheet (consolidated)		 Chapter 6 Financial Conditions
Condensed Balance Sheet and Consolidated Income Statement for the Most
Recent Five Years
(I)
Condensed balance sheet (consolidated)
Unit: NT$thousands
Year
Item
Financial Information for last 5 years		 From the
beginning of
the year to
March 31,
2021
Financial
Information
(Consolidated)
2016 2017 2018 2019 2020
Current assets 24,414,242 27,335,270 25,004,843 20,910,987 20,619,331
21,821,037
Property, plant, and
equipment		 37,867,059 39,326,842 41,118,529 43,146,104 46,222,080
46,828,396
Intangibleassets 9,533 8,880 452,363 432,499 374,347
352,566
Other assets 19,745,656 20,557,356 20,485,858 19,263,272 16,816,612
17,018,904
Total assets 82,036,490 87,228,348 87,061,593 83,752,862 84,032,370
86,020,903
Current
Liabilities		 Before
distribution		 23,911,787 27,092,385 26,727,244 27,611,293 27,077,797
26,481,939
After
distribution
-		 - - - -
-
Non-current liabilities 27,880,724 30,500,102 30,692,717 28,691,649 29,123,459
30,695,212
Total
liabilities		 Before
distribution		 51,792,511 57,592,487 57,419,961 56,302,942 56,201,256
57,177,151
After
distribution
-		 - - - -
-
Equity attributable to
shareholders of the
parent company		 27,537,651 27,841,691 27,787,869 25,850,231 26,469,211
27,479,452
Share capital 17,180,905 18,211,760 18,758,113 19,133,275 18,905,695
18,905,695
Capitalsurplus 4,737,131 4,873,770 4,883,218 4,884,281 4,929,007
4,929,007
Retained
earnings		 Before
distribution		 5,786,966 5,392,816 4,705,770 2,810,846 3,589,018
4,693,891
After
distribution
-		 - - - -
-
Other equity -167,351 -636,655 -559,232 -978,171 -954,509
-1,049,141
Treasury stock - - - - -
-
Non-controlling
interests		 2,706,328 1,794,170 1,853,763 1,599,689 1,361,903
1,364,300
Total
Equity		 Before
distribution		 30,243,979 29,635,861 29,641,632 27,449,920 27,831,114
28,843,752
After
distribution
-		 - - - -
-

Source: The above consolidated financial statements of the first quarter of 2021 have been audited by the CPA

－140－

Condensed balance sheet (Parent company only)

Unit: NT$ thousands


Unit: NT$thousands
Unit: NT$thousands
Unit: NT$thousands
Unit: NT$thousands
Unit: NT$thousands
Year
Item
Financial Information for last 5 years
2016 2017 2018 2019 2020
Current assets 8,199,957 9,254,088 7,510,760
6,798,509
6,276,773
Property, plant, and
equipment		 8,559,554 8,106,718 7,656,732
7,386,910
7,108,161
Intangibleassets - - -
-
-
Other assets 31,473,561 33,581,429 35,499,170
33,493,056
32,380,542
Total assets 48,233,072 50,942,235 50,666,662
47,678,475
45,765,476
Current
Liabilities		 Before
distribution
11,076,491		 12,540,901 12,031,176
12,793,730
12,367,634
After
distribution
-		 - -
-
-
Non-current liabilities 9,618,930 10,559,643 10,847,617
9,034,514
6,928,631
Total liabilities Before
distribution
20,695,421		 23,100,544 22,878,793
21,828,244
19,296,265
After
distribution
-		 - -
-
-
Share capital 17,180,905 18,211,760 18,758,113
19,133,275
18,905,695
Capitalsurplus 4,737,131 4,873,770 4,883,218
4,884,281
4,929,007
Retained
earnings		 Before
distribution
5,786,966		 5,392,816 4,705,770
2,810,846
3,589,018
After
distribution
-		 - -
-
-
Other equity -167,351 -636,655 -559,232
-978,171
-954,509
Treasury stock - - -
-
-
Equity 27,537,651 27,841,691 27,787,869
25,850,231
26,469,211

－141－

(II) Statements of Comprehensive Income (Consolidated)

Unit: NT$ thousands

Year
Item
Financial Information for last 5 years
Financial Information for last 5 years
Financial Information for last 5 years
Financial Information for last 5 years
Financial Information for last 5 years		 Financial
information as
of March 31,
2021
(Consolidated)
2016 2017 2018 2019 2020
Operating
revenue		 52,847,410 71,158,662 73,856,189 59,687,597 55,421,795
18,690,275
Gross operating
profit		 7,206,359
6,299,383		 5,911,201 2,549,118 4,151,017
1,994,655
Operating income
(loss)		 3,844,037
2,211,374		 1,458,510 (895,193) 1,133,086
1,063,467
Non-operating
revenues and
expenses		 (471,965)
(406,009)		 (1,102,964) (1,090,273) (550,296)
342,676
Income before
income tax		 3,372,072
1,805,365		 355,546 (1,985,466) 582,790
1,406,143
Net income (loss)
from continuing
operations		 2,378,545
1,345,310		 264,944 (1,700,285) 517,588
1,113,347
Loss from
discontinued
operations		 - - - - - -
Net income (loss)
for the period		 2,378,545
1,345,310		 264,944 (1,700,285) 517,588
1,113,347
Other
comprehensive
income (loss) (Net		 (904,716)
(504,626)		 (21,012) (329,270) 61,475
(99,918)

income after tax)
Total
comprehensive
income		 1,473,829
840,684		 243,932 (2,029,555) 579,063
1,013,429
Net Profit that
Belongs to the
Owner of the
Parent Company		 2,502,005
1,367,405		 308,506 (1,401,081) 735,238
1,104,219
Net Profit that
Belongs to the
Non-controlling
Interests		 (123,460)
(22,095)		 (43,562) (299,204) (217,650)
9,128
Total
comprehensive
income (loss)
attributable to
owners of parent
company		 1,612,620
878,961		 293,049 (1,745,191) 813,293
1,011,012
Total
comprehensive
income (loss)
attributable to
non-controlling
interests		 (138,791)
(38,277)		 (49,117) (284,364) (234,230)
2,417
Earnings per
share		 1.46
0.75		 0.16 -0.73 0.39
0.58

Source: The above consolidated financial statements of the first quarter of 2020 have been audited by the CPA

－142－

Consolidated income statement (Parent company only)

Unit: NT$ thousands

Year
Item
Financial Information for last 5 years
Financial Information for last 5 years
Financial Information for last 5 years
Financial Information for last 5 years
Financial Information for last 5 years
2016 2017 2018 2019 2020
Operatingrevenue 23,867,665 29,179,218 30,026,324 24,971,014
20,936,210
Gross operating
profit		 3,857,918
3,789,635		 2,438,766 665,857
1,516,300
Operating income
(loss)		 2,064,727
1,461,329		 876,087 (572,255)
368,368
Non-operating
revenues and
expenses		 948,024
208,432		 (587,176) (1,168,073)
468,997
Income before
income tax		 3,012,751
1,669,761		 288,911 (1,740,328)
837,365
Net income (loss)
from continuing
operations		 2,502,005
1,367,405		 308,506 (1,401,081)
735,238
Loss from
discontinued
operations		 -
-		 - - -
Net income (loss) for
the period
2,502,005
1,367,405		 308,506 (1,401,081)
735,238
Other comprehensive
income (loss) (Net
income after tax)
(889,385)
(488,444)		 (15,457) (344,110)
78,055
Total comprehensive
income		 1,612,620
878,961		 293,049 (1,745,191)
813,293
Earningsper share 1.46 0.75 0.16 -0.73 0.39

(III) Names of CPAs for The Most Recent Five Years and Audit Opinions

  1. Names of CPAs for The Most Recent Five Years and Their Audit Opinions
Year Name of accounting firm Name of CPA Auditors’ Opinions
2016: Crowe Horwath China
CertifiedPublicAccountants		 Ling-Wen Huang,
Jen-YaoHsieh		 Unqualified opinion
2017 Crowe Horwath China
CertifiedPublicAccountants		 Ling-Wen Huang,
Jen-YaoHsieh		 Unqualified opinion
2018 Crowe Horwath China
CertifiedPublicAccountants		 Ling-Wen Huang,
Jen-YaoHsieh		 Unqualified opinion
2019 Crowe Horwath China
CertifiedPublicAccountants		 Ling-Wen Huang,
Shu-Man Tsai		 Unqualified opinion
2020 Crowe Horwath China
Certified Public Accountants		 Ling-Wen Huang,
Shu-Man Tsai		 Unqualified opinion
  1. Change of CPA in the last five years if any: In response to the need of internal organization adjustments by Crowe (TW) CPAs, the Company has since 2019 Q2 financial statements attestation, changed the CPAs from Ling-Wen Huang and Jen-Yao Hsieh to CPAs Ling-Wen Huang and Shu-Man Tsai.

－143－

II. Financial Analysis of the Most Recent Five Years

Consolidated financial analysis

Year (Note 1)
Item analyzed (Note 3)		 Year (Note 1)
Item analyzed (Note 3)		 FinFinancial Analysis of The Most Recent Five Years FinFinancial Analysis of The Most Recent Five Years FinFinancial Analysis of The Most Recent Five Years FinFinancial Analysis of The Most Recent Five Years FinFinancial Analysis of The Most Recent Five Years Financial
information as
of March 31,
2021
2016 2017 2018 2019 2020
Financial
Structure
(%)		 Liabilities to assets ratio 63.13 66.02 65.95 67.23
66.88
66.47
Long-term capital to
property, plant, and
equipment ratio		 153.50 152.91 146.73 130.12
123.22
127.14
Solvency
(%)		 Current ratio 102.10 100.90 93.56 75.73
76.15
82.40
Quick ratio 58.52 52.82 47.75 40.66
31.62
32.97
Interest coverage ratio 5.27 2.61 1.28 -0.51
1.51
6.36
Operating
Performance
Analysis		 Receivables turnover ratio
(times)		 16.05 16.77 15.60 14.69
18.67
7.05
Average collection period
(days)		 22.74 21.77 23.40 24.84
19.55
51.77
Inventory turnover ratio
(times)		 6.50 7.11 6.68 6.31
6.30
1.74

Accounts payables turnover
ratio(times)		 18.27 20.86 25.48 26.03
29.68
9.42
Days'salesin inventory 56.15 51.34 54.64 57.84
57.93
209.77
Property, plant, and
equipment (PP&E) turnover
ratio(times)		 1.43 1.84 1.84 1.42
1.24
0.40
Total asset turnover ratio
(times)		 0.67 0.84 0.85 0.72
0.66
0.22
Profitability
Analysis		 Return on total assets(%) 3.83 2.69 1.46 -0.76
1.71
1.56
Return on equity (%) 8.03 4.49 0.89 -5.96
1.87
3.93
Pre-tax income to paid-in
capital ratio(%) (Note 7)		 19.63 9.91 1.90 -10.38
3.08
7.44
Netprofit margin(%) 4.50 1.89 0.36 -2.85
0.93
5.96
Earningsper share(NT$) 1.46 0.75 0.16 -0.73
0.39
0.58
Cash flow Cash flow ratio (%) 14.11 0 8.74 10.22
6.82
1.38
Cash flow adequacy ratio
(%)		 44.44 32.72 36.83 43.90
38.11
30.89
Cash re-investment ratio (%) 4.14 0 2.33 2.99
2.06
0.37
Leverage Operating leverage 1.87 2.85 4.05 -
3.66
1.88
Financial leverage 1.26 2.03 7.51 -
-
1.33

－144－

Please state the causes of changes in each financial ratio for the preceding two fiscal years. (except when the change is less than 20% ).

  1. Decrease in quick ratio: Mainly due to increase in inventories and prepayments during the period.

  2. Increase in interest protection multiples: Mainly due to the increase in net income before tax for the period. 3. Increase in Receivables turnover (times): Mainly due to the early collection of some receivables during the period, resulting in an increase in the turnover rate.

  3. Decrease in average collection period: Mainly due to the early collection of some receivables during the period, resulting in an increase in the turnover rate and a decrease in the average number of collection days.

  4. Increase in return on assets: Mainly due to the increase in current net profit.

  5. Increase in return on equity: Mainly due to increase in current net profit.

  6. Increase in ratio of income before tax to paid-up capital: Mainly due to increase in current net profit before tax compared to the same period last year.

  7. Increase in net profit margin: Mainly due to increase in current net profit.

  8. Increase in earnings per share: Mainly due to increase in current net profit.

  9. Decrease in cash flow ratio: Mainly due to the decrease in net cash flow from operating activities.

  10. Decrease in cash reinvestment ratio: Mainly due to the decrease in net cash flow from operating activities in the current period compared to the previous period.

  11. Operating leverage: Mainly due to the increase in net operating profit compared to the prior period.

1. Financial Structure

  • (1) Debt-asset ratio = total liabilities/total assets.

  • (2) Long-term capital to property, plant and equipment ratio = (total equity + non-current liabilities)/net property, plant and equipment.

  • Solvency

  • (1) Current ratio = current assets/current liabilities.

  • (2) Quick ratio = (current assets – inventory – prepaid expense)/current liabilities.

  • (3) Interest protection multiples = net income before income tax and interest expense/current interest expense.

  • Operating Performance Analysis

  • (1) Receivables (including accounts receivable and notes receivable arising from business operations) turnover rate = net sales/average receivables (including accounts receivable and notes receivable arising from business operations) for each period

  • (2) Average collection period = 365/receivables turnover ratio.

  • (3) Inventory turnover ratio = cost of goods sold/average inventory amount.

  • (4) Payable (including accounts payable and business-related notes payable) turnover ratio = cost of goods sold/average payable balance of the period (including accounts payable and business-related notes payable).

  • (5) Average days of sales = 365/inventory turnover.

  • (6) Property, plant, and equipment (PP&E) turnover ratio = net sales/average PP&E

  • (7) Total asset turnover ratio = net sales / average total assets.

  • Profitability Analysis

  • (1) Return on assets = (net income + interest expense x (1– tax rate))/average total assets.

(2) Return on equity = net income after tax/ average total equity 

  - (3) Net profit margin = net income/net sales.

  - (4) Earnings per share = (income or loss attributable to owners of parent company – dividends on preferred shares) / weighted average number of issued shares. (Note 4)

  1. Cash flow

    • (1) Cash flow ratio = net operating cash flow/current liabilities.

    • (2) Net cash flow adequacy ratio = net operating cash flow in last 5 years/(capital expenditures + inventory increase + cash dividend) in last 5 years.

    • (3) Cash re-investment ratio = (Net operating cash flow – cash dividend) / (gross property, plant and equipment + long-term investment + other non-current assets + working capital). (Note 5)

  2. Leverage:

    • (1) Operating leverage = (Net operating revenue - variable operating change cost and expense)/Operating income (Note 6).

  3. (2) Financial leverage = Operating income/(operating income - interest expenses).

  4. The following shall be noted when using the above formula for earnings per share:

  5. It should be based on the weighted average number of shares of common stock rather than

－145－

the number of issued shares at the end of the year.

  1. When there is a cash capital increase or treasury stock transaction, the period of time in circulation shall be considered in calculating the weighted average number of shares.

  2. In the case of capital increase out of earnings or capital surplus, the calculation of earnings per share for the past fiscal year and the fiscal half-year shall be retrospectively adjusted based on the capital increase ratio, without the need to consider the issuance period for the capital increase.

  3. If the preferred shares are non-convertible cumulative preferred shares, the dividend of the current year (whether issued or not) shall be subtracted from net profit after tax, or added to net loss after tax. In the case of non-cumulative preferred shares, if there is net profit after tax, dividend on preferred shares shall be subtracted from net profit after tax; no adjustment is required in case of loss.

Special attention should be paid to the following matters when carrying out cash flow analysis:

  1. Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.

  2. Capital expenditures refer to the cash outflows for annual capital investment.

  3. The increase in inventory is counted only when the balance at the end of the period is greater than the balance at the beginning of the period. If the inventory decreases at the end of the year, it is counted as zero.

  4. Cash dividend includes cash dividends from common stocks and preferred stocks.

  5. Gross property, plant and equipment value refers to the total value of property, plant and equipment before subtracting accumulated depreciation.

The issuer shall classify the operating costs and operating expenses as fixed or variable according to their nature. If it involves estimation or subjective judgment, attention should be paid to its reasonableness and consistency.

  • Where company shares have no par value or where the par value per share is not NT$ 10, any calculations that involve paid-up capital ratio shall be replaced with the equity ratio attributable to the owners of the parent company as stated in the balance sheet.

－146－

Individual financial analysis

Year (Note 1)
Item analyzed (Note 2)		 Year (Note 1)
Item analyzed (Note 2)		 Year (Note 1)
Item analyzed (Note 2)
FinFinancial Analysis of The Most Recent Five Years
FinFinancial Analysis of The Most Recent Five Years
FinFinancial Analysis of The Most Recent Five Years
FinFinancial Analysis of The Most Recent Five Years
FinFinancial Analysis of The Most Recent Five Years
2016 2017 2018 2019 2020
Financial
Structure
(%)		 Liabilities to assets ratio 42.91 45.35 45.16
45.78
42.16
Long-term capital to
property, plant, and
equipment ratio		 434.09 473.70 504.59
472.25
469.85
Solvency
(%)		 Current ratio 74.03 73.79 62.43
53.14
50.75
Quick ratio 38.51 38.28 28.66
25.87
21.78
Interest coverage ratio 9.47 5.21 1.65
-3.05
3.19
Operating
Performance
Analysis		 Receivables turnover ratio
(times)		 16.59 19.25 18.55
16.71
15.40
Average collection period
(days)		 22.00 18.96 19.68
21.85
23.70
Inventory turnover ratio
(times)		 6.85 6.51 6.96
6.85
5.83

Accounts payables
turnover ratio(times)		 16.25 20.25 22.05
17.43
17.58
Days' sales in inventory 53.28 56.07 52.45
53.30
62.64
Property, plant, and
equipment (PP&E)
turnover ratio (times)		 2.73 3.50 3.81
3.32
2.89
Total asset turnover ratio
(times)		 0.51 0.59 0.59
0.51
0.45
Profitability
Analysis		 Returnon total assets (%) 5.98 3.42 1.30
-2.15
2.23
Returnonequity (%) 9.37 4.94 1.11
-5.22
2.81
Percentage
to net
Income
Capital
Ratio(%)
Operating
income		 12.02 8.02 4.67
-2.99
1.95
Pre-tax net
profit		 17.54 9.17 1.54
-9.10
4.43
Netprofit margin(%) 10.48 4.69 1.03
-5.61
3.51
Earnings pershare (NT$) 1.46 0.75 0.16
-0.73
0.39
Cash flow Cash flow ratio (%) 18.09 4.28 16.99
3.29
5.13
Cash flow adequacy ratio
(%)		 138.01 117.14 128.60
159.22
130.57
Cash re-investment ratio
(%)		 4.10 1.07 4.05
0.80
1.23
Leverage Operating leverage 1.87 2.59 2.78
-
4.12
Financial leverage 1.21 1.37 2.02
-
-

－147－

Please state the causes of changes in each financial ratio for the preceding two fiscal years. (except when the change is less than 20% ).

  1. Increase in interest protection multiples: Mainly due to increase in net profit before tax.

  2. Increase in return on assets: Mainly due to the increase in current net profit.

  3. Increase in return on equity: Mainly due to increase in current net profit.

  4. Increase in the ratio of operating profits to paid-in-capital Mainly due to increase in operating profits. 5. Increase in ratio of income before tax to paid-up capital: Mainly due to increase in current net profit before tax compared to the same period last year.

  5. Increase in net profit margin: Mainly due to increase in current net profit.

  6. Increase in earnings per share: Mainly due to increase in current net profit.

  7. Increase in Cash flow ratio: Mainly due to increase in net operating cash flows

  8. Increase in cash flow ratio: Mainly due to increase in net cash flow from operating activities.

  9. Operating leverage: Mainly due to the increase in net operating profit compared to the prior period.

  10. Financial Structure

    • (1) Debt-asset ratio = total liabilities/total assets.

    • (2) Long-term capital to fixed assets ratio = (shareholders' equity + long-term liabilities)/net fixed assets.

  11. Solvency

    • (1) Current ratio = current assets/current liabilities.

    • (2) Quick ratio = (current assets – inventory – prepaid expense)/current liabilities.

    • (3) Interest protection multiples = net income before income tax and interest expense/current interest expense.

  12. Operating Performance Analysis

    • (1) Receivables (including accounts receivable and notes receivable arising from business operations) turnover rate = net sales/average receivables (including accounts receivable and notes receivable arising from business operations) for each period

    • (2) Average collection period = 365/receivables turnover ratio.

    • (3) Inventory turnover ratio = cost of goods sold/average inventory amount.

    • (4) Payable (including accounts payable and business-related notes payable) turnover ratio = cost of goods sold/average payable balance of the period (including accounts payable and business-related notes payable).

    • (5) Average days of sales = 365/inventory turnover.

    • (6) Fixed assets turnover ratio ＝ net sales / average total assets.

    • (7) Total asset turnover ratio = net sales / average total assets.

  13. Profitability Analysis

    • (1) Return on assets = (net income + interest expense x (1– tax rate))/average total assets.

    • (2) Return on equity = profit and loss after tax/average shareholders' equity.

    • (3) Net profit margin = net income/net sales.

    • (4) Earnings per share = (net profit after tax – dividends on preferred shares)/weighted average number of issued shares. (Note 4)

  14. Cash flow

    • (1) Cash flow ratio = net operating cash flow/current liabilities.

    • (2) Net cash flow adequacy ratio = net operating cash flow in last 5 years/(capital expenditures + inventory increase + cash dividend) in last 5 years.

    • (3) Cash re-investment ratio = (Net cash flow from operating activities – cash dividend)/(gross fixed assets value + long-term investment + other assets + working capital). (Note 5)

  15. Leverage:

    • (1) Operating leverage = (Net operating revenue - variable operating change cost and expense)/Operating income (Note 6).

  16. (2) Financial leverage = Operating income/(operating income - interest expenses).

  17. The following shall be noted when using the above formula for earnings per share:

  18. It should be based on the weighted average number of shares of common stock rather than the number of issued shares at the end of the year.

  19. When there is a cash capital increase or treasury stock transaction, the period of time in circulation shall be considered in calculating the weighted average number of shares.

  20. In the case of capital increase out of earnings or capital surplus, the calculation of earnings per share for the past fiscal year and the fiscal half-year shall be retrospectively adjusted based on the capital increase ratio, without the need to consider the issuance period for the

－148－

capital increase.

  1. If the preferred shares are non-convertible cumulative preferred shares, the dividend of the current year (whether issued or not) shall be subtracted from net profit after tax, or added to net loss after tax. In the case of non-cumulative preferred shares, if there is net profit after tax, dividend on preferred shares shall be subtracted from net profit after tax; no adjustment is required in case of loss.

Special attention should be paid to the following matters when carrying out cash flow analysis:

  1. Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement.

  2. Capital expenditures refer to the cash outflows for annual capital investment.

  3. The increase in inventory is counted only when the balance at the end of the period is greater than the balance at the beginning of the period. If the inventory decreases at the end of the year, it is counted as zero.

  4. Cash dividend includes cash dividends from common stocks and preferred stocks.

  5. Gross fixed assets refer to the total fixed assets before the deduction of accumulated depreciation.

  6. The issuer shall classify the operating costs and operating expenses as fixed or variable according to their nature. If it involves estimation or subjective judgment, attention should be paid to its reasonableness and consistency.

－149－

III. The Audit Committee's Audit Report on the Most Recent Fiscal Year:

While preparing the Company's 2020 business report, consolidated financial statement (including individual financial statement), and loss make-up proposal, the Board of Directors commissioned Crowe (TW) CPAs to audit the financial statement, and issue an audit report. The aforementioned business report, financial statement, and loss make-up proposal have been audited by this Audit Committee, and the committee does not find any discrepancies, so this report is made according to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act. Kindly review accordingly.

Yieh Phui Enterprise Co., Ltd. 2021 Annual Shareholders' Meeting

Chairman of the Audit Committee: Te-Yuan Yang

March 24, 2021

－150－

IV. The Most Recent Fiscal Year's Consolidated Financial Statements of the Parent Company and Subsidiaries Audited and Attested by the CPA:

Representation Letter

The entities that are required to be included in the combined financial statements of Yieh Phui Enterprise Co., Ltd. as of and for the year ended December 31, 2020 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Financial Statements of Affiliated Enterprises and Consolidated Business Reports are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards No.10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Yieh Phui Enterprise Co., Ltd. and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

Yieh Phui Enterprise Co., Ltd.

By

Yi Shou Lin Chairman

March 24, 2021

－151－

==> picture [102 x 30] intentionally omitted <==

國富浩華聯合會計師事務所 Crowe (TW) CPAs 80250高雄市苓雅區四維三路6 號27樓之1 27F-1., No.6, Siwei 3rd Rd., Lingya Dist., Kaohsiung City 80250, Taiwan Tel +886 7 3312133 Fax +886 7 3331710 www.crowe.tw

Independent Auditors’ Report

To the Board of Directors and Shareholders Yieh Phui Enterprise Co., Ltd.

Opinion

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

In our opinion, based on our audits and the report of the other independent accountants, as described in the other matters section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the report of other independent accountants, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

－152－

Key Audit Matters

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

Key audit matters for the Group's consolidated financial statements for the year ended December 31, 2020 are stated as follows:

Revenue recognition

Please refer to Note 4.23 to the consolidated financial statements for the accounting policy on revenue recognition; Note 5.1.(1) for major accounting estimates and assumptions of revenue recognition; and Note 6.31 for the details of revenue recognition.

Description of key audit matter

Due to fierce competition in the industry, the Group may be affected by the growth of its performance and competition in the same industry, which increases the risk of recognition of operating income. Therefore, we determined the revenue recognition for those product lines and customers with significant sales increase in 2020 as a key audit matter.

How the matter was addressed in our audit

Our key audit procedures included analyzing the industry trends, income types, product lines, and customers' two-year operating income status to confirm whether there are abnormal circumstances or centralized transactions and identify possible risks; understanding and testing the internal control procedure to assess the effectiveness of the relevant internal control for revenue recognition; conducting a sample test on the sales transactions of the top ten new customers to confirm the sales transaction actually occured and performing sales cutoff test.

Valuation of inventory

Please refer to Note 4.8 to the consolidated financial statements for the accounting policy on inventories; Note 5.2.(6) for major accounting estimates and assumptions of inventories; and Note 6.6 for inventory valuation.

Description of key audit matter

The Group's inventory amounted to $8,532,107 thousand (net of $8,777,453 thousand of total inventory less $245,346 thousand of allowance for inventory valuation loss) as of December 31, 2020, which accounted for 10.15% of total assets. The inventory valuation is measured at the lower of inventory cost and net realizable value. Given that the valuation of net realizable value of inventory has a significant impact on critical judgments and estimates and since inventory valuation is dependent on the influence of drastic fluctuations of international metal price, we have thus included this item in the key audit matters.

How the matter was addressed in our audit

Our key audit procedures included obtaining management’s assessment data which determines the lower of inventory cost and net realizable value; sampling estimated selling prices to the most recent sales records; and assessing the appropriateness of management's basis for estimating the net realizable value.

－153－

Other Matters

We did not audit the financial statements of certain associates accounted for using equity method. Those financial statements were audited by the other independent accountants, whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the consolidated financial statements was based solely on the reports of the other independent accountants. Investments in these associates amounted to $4,608,127 thousand and $4,796,695 thousand, representing 5.48% and 5.73% of total consolidated assets as of December 31, 2020 and 2019, and the share of profit of these associates accounted for using equity method amounted to ($178,629) thousand and 17,752 thousand, representing (30.65%) and (0.89%) of total consolidated income before income tax for the years then ended, respectively. In addition, the share of other comprehensive income of these associates accounted for using equity method amounted to ($9,939) thousand and ($578) thousand, representing (16.17%) and 0.18% of total consolidated comprehensive income for the years then ended, respectively.

We have also audited the standalone financial statements of Yieh Phui Enterprise Co., Ltd. as of and for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion with emphasis of matter.

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

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

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

－154－

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

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

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

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

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

  5. Evaluate the overall presentation, structure and content of the consolidated financia1 statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

We also provide those charged with governance with a statement that we have complied with relevant ethica1 requirements regarding independence, and to communicate with them all re1ationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements 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

－155－

about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Ling Wen Huang and Shu Man Tsai.

Crowe (TW) CPAs Kaohsiung, Taiwan Republic of China March 24, 2021

Notice to Readers

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

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

－156－

YIEH PHUI ENTERPRISE CO., LTD CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

Assets
CURRENT ASSETS
Cash and cash equivalents
Financial assets at fair value through profit
or loss - current
Contract assets - current
Notes receivable, net
Accounts receivable, net
Accounts receivable - related parties, net
Other receivables
Other receivables - related parties
Current tax assets
Inventories
Prepayments
Noncurrent assets held for sale
Other financial assets - current
Total Current Assets
NONCURRENT ASSETS
Financial assets at fair value through profit
or loss - noncurrent
Financial assets at fair value through other
comprehensive income or loss - noncurrent
Investments accounted for using equity method
Property, plant and equipment
Right-of-use assets
Investment properties
Intangible assets
Deferred tax assets
Other noncurrent assets
Refundable deposits
Net defined benefit assets - noncurrent
Other financial assets - noncurrent
Total Noncurrent Assets
TOTAL ASSETS		 Note
6(1)
6(2)
6(31)
6(3)
6(4)
7
6(5)
7
6(6)
6(7)
6(8)
6(9)
6(2)
6(10)
6(11)
6(12)
6(13)
6(14)
6(15)
6(37)
6(16)
6(17)
6(24)
8		 December 31,2020
Amount
%
$ 3,730,782
4
697,978
1
334,945
-
572,750
1
1,860,885
2
185,803
-
132,208
-
74,919
-
4,834
-
8,532,107
11
3,524,160
4
160,114
-
807,846
1
20,619,331
24
-
-
725,334
1
13,864,013
17
46,222,080
55
495,998
1
101,583
-
374,347
-
960,802
1
20,769
-
222,895
-
10,777
-
414,441
1
63,413,039
76
$84,032,370
100		 December 31,2019 December 31,2019
Amount
$ 3,730,782
697,978
334,945
572,750
1,860,885
185,803
132,208
74,919
4,834
8,532,107
3,524,160
160,114
807,846
20,619,331
-
725,334
13,864,013
46,222,080
495,998
101,583
374,347
960,802
20,769
222,895
10,777
414,441
63,413,039
$84,032,370		 Amount
$ 5,023,717
428,279
822,605
845,312
1,682,946
789,857
190,469
2,940
10,559
7,749,584
1,935,447
23,342
1,405,930
20,910,987
289,289
709,886
14,661,318
43,146,104
526,096
622,562
432,499
983,851
11,590
925,853
-
532,827
62,841,875
$83,752,862		 %
6
1
1
1
2
1
-
-
-
9
2
-
2
25
-
1
18
50
1
1
1
1
-
1
-
1
75
100

－157－

Liabilities and Equity
CURRENT LIABILITIES
Short-term loans
Short-term notes and bills payable
Financial liabilities at fair value through profit
or loss - current
Contract liabilities - current
Notes payable
Accounts payable
Other payables
Current tax liabilities
Provisions - current
Liabilities directly associated with noncurrent
assets held for sale
Lease liabilities - current
Advance receipts
Current portion of long-term loans
Total Current Liabilities
NONCURRENT LIABILITIES
Long-term loans
Deferred tax liabilities
Lease liabilities - noncurrent
Long-term deferred revenue
Net defined benefit liability - noncurrent
Guarantee deposits
Total Noncurrent Liabilities
TOTAL LIABILITIES
EQUITY ATTRIBUTABLE TO OWNERS OF
THE PARENT
Share capital
Common stock
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Other equity
Total equity attributable to owners of the parent
NON-CONTROLLING INTERESTS
Total Equity
TOTAL LIABILITIES AND EQUITY		 Note
6(18)
6(19)
6(2)
6(31)
6(20)
6(21)
6(8)
6(13)
6(22)
6(22)
6(37)
6(13)
6(23)
6(24)
6(25)
6(26)
6(27)
6(28)
6(30)		 December 31,2020
Amount
%
$ 14,925,307
17
1,289,365
2
14,495
-
2,119,604
3
469,760
1
995,914
1
1,753,874
2
14,393
-
93,802
-
70,070
-
8,419
-
-
-
5,322,794
6
27,077,797
32
28,561,294
34
2,205
-
73,501
-
28,038
-
439,736
1
18,685
-
29,123,459
35
56,201,256
67
18,905,695
22
4,929,007
6
2,866,052
3
559,232
1
163,734
-
(954,509)
(1)
26,469,211
31
1,361,903
2
27,831,114
33
$84,032,370
100		 December 31,2019 December 31,2019
Amount
$ 14,925,307
1,289,365
14,495
2,119,604
469,760
995,914
1,753,874
14,393
93,802
70,070
8,419
-
5,322,794
27,077,797
28,561,294
2,205
73,501
28,038
439,736
18,685
29,123,459
56,201,256
18,905,695
4,929,007
2,866,052
559,232
163,734
(954,509)
26,469,211
1,361,903
27,831,114
$84,032,370		 Amount
$ 15,597,746
931,272
-
972,787
799,965
1,188,827
1,651,603
3,486
90,806
7,630
7,813
72
6,359,286
27,611,293
28,009,760
2,533
81,469
29,577
550,777
17,533
28,691,649
56,302,942
19,133,275
4,884,281
2,866,052
559,232
(614,438)
(978,171)
25,850,231
1,599,689
27,449,920
$83,752,862		 %
19
1
-
1
1
1
2
-
-
-
-
-
8
33
33
-
-
-
1
-
34
67
23
6
3
1
(1)
(1)
31
2
33
100

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

－158－

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Item Note Year Ended December 31 Year Ended December 31 Year Ended December 31
2020 2019
Amount % Amount %
OPERATING REVENUE
OPERATING COST
GROSS PROFIT
OPERATING EXPENSES
Selling and marketing expenses
General and administrative expenses
Research and development expenses
Expected credit loss
Total operating expenses
INCOME (LOSS) FROM OPERATIONS
NON-OPERATING INCOME AND EXPENSES
Interest income
Other income
Other gains and losses
Finance costs
Share of profit (loss) of associates and joint ventures
Total non-operating income and expenses
INCOME (LOSS) BEFORE INCOME TAX
INCOME TAX (EXPENSE) BENEFIT
NET INCOME (LOSS)
OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit plans
Unrealized gain (loss) on investments in equity instruments
designated as at fair value through other comprehensive income
Share of other comprehensive income (loss) of associates and
joint ventures
Income tax benefit (expense) related to items that will not be
reclassified subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations
Share of other comprehensive income (loss) of associates and
joint ventures
Income tax benefit (expense) related to items that may
be reclassified subsequently to profit or loss
Total other comprehensive income (loss), net of income tax
TOTAL COMPREHENSIVE INCOME (LOSS)
NET INCOME (LOSS) ATTRIBUTABLE TO:
Shareholders of the parent
Non-controlling interests
Total
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO:
Shareholders of the parent
Non-controlling interests
Total
EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share
Diluted earnings (loss) per share		 6(31)
6(6)
6(33)
6(34)
6(35)
6(36)
6(37)
6(38)
6(39)
6(39)		 $55,421,795
(51,270,778)		 100
(93)		 $59,687,597
(57,138,479)		 100
(95)
4,151,017
(2,015,222)
(909,885)
(92,748)
(76)		 7
(3)
(2)
-
-		 2,549,118
(2,380,383)
(954,670)
(91,803)
(17,455)		 5
(4)
(2)
-
-
(3,017,931) (5) (3,444,311) (6)
1,133,086 2 (895,193) (1)
105,057
546,409
824,336
(1,146,553)
(879,545)		 -
1
1
(1)
(2)		 124,964
535,892
632,134
(1,315,673)
(1,067,590)		 -
1
1
(2)
(2)
(550,296) (1) (1,090,273) (2)
582,790
(65,202)		 1
-		 (1,985,466)
285,181		 (3)
-
517,588 1 (1,700,285) (3)
43,250
(11,208)
155,183
(8,650)
62,132
(155,248)
(23,984)		 -
-
-
-
-
-
-		 84,399
(15,997)
(19,582)
(16,880)
(317,854)
(116,231)
72,875		 -
-
-
-
(1)
-
-
61,475 - (329,270) (1)
$579,063 1 $ (2,029,555) (4)
$735,238
(217,650)		 1
-		 $ (1,401,081)
(299,204)		 (2)
(1)
$517,588 1 $ (1,700,285) (3)
$813,293
(234,230)		 1
-		 $ (1,745,191)
(284,364)		 (4)
-
$579,063 1 $(2,029,555) (4)
$0.39 $(0.73)
$0.39 $ (0.73)

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

－159－

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1,2019
Appropriations of prior year's earnings:
Legal reserve
Cash dividends to ordinary shareholders
Capital increase out of retained earning
Reversal of special reserve
Changes in equity of associates and joint ventures
Net income (loss) in 2019
Other comprehensive income (loss) in 2019,
Net of income tax
Total comprehensive income (loss) in 2019
Difference between consideration and carrying
amount of subsidiaries acquired or disposed
Changes in ownership interests in subsidiaries
Adjustment of non-controlling interests
BALANCE AT DECEMBER 31, 2019
Changes in equity of associates and joint ventures
Net income (loss) for 2020
Other comprehensive income (loss) in 2020,
Net of income tax
Total comprehensive income (loss) in 2020
Buy-back of treasury shares
Cancellation of treasury shares
Difference between consideration and carrying
amount of subsidiaries acquired or disposed
Changes in ownership interests in subsidiaries
Adjustment of non-controlling interests
Disposal of financial instruments designated at fair
value through other comprehensive income
BALANCE AT DECEMBER 31, 2020		 Common Stock Capital Surplus Retained Earnings Other Equity Item TreasuryStock Shareholders of
the parent		 Non-controlling
Interests		 Total Equity
Legal Reserve Special Reserve Unappropriated
Earnings
(Accumulated
Deficits)		 Exchange
Differences on
Translating Foreign
Operations		 Unrealized Gain (Loss)
On Financial Assets at
Fair Value Through Other
Comprehensive Income		 Gain (Loss) on
Hedging
Instruments
$18,758,113
-
-
375,162
-
-
-
-		 $ 4,883,218
-
-
-
-
(73)
-
-		 $2,835,202
30,850
-
-
-
-
-
-		 $636,655
-
-
-
(77,423)
-
-
-		 $ 1,233,913
(30,850)
(187,581)
(375,162)
77,423
3,744
(1,401,081)
74,829		 $(723,803)
-
-
-
-
-
-
(366,243)		 $157,892
-
-
-
-
-
-
(52,355)		 $6,679
-
-
-
-
-
-
(341)		 $ -
-
-
-
-
-
-
-		 $27,787,869
-
(187,581)
-
-
3,671
(1,401,081)
(344,110)		 $1,853,763
-
-
-
-
1,689
(299,204)
14,840		 $29,641,632
-
(187,581)
-
-
5,360
(1,700,285)
(329,270)
- - - - (1,326,252) (366,243) (52,355) (341) - (1,745,191) (284,364) (2,029,555)
-
-
-		 1,136
-
-		 -
-
-		 -
-
-		 -
(9,673)
-		 -
-
-		 -
-
-		 -
-
-		 -
-
-		 1,136
(9,673)
-		 (1,136)
9,673
20,064		 -
-
20,064
19,133,275
-
-
-		 4,884,281
(21)
-
-		 2,866,052
-
-
-		 559,232
-
-
-		 (614,438)
(1,339)
735,238
53,637		 (1,090,046)
-
-
(97,490)		 105,537
-
-
121,862		 6,338
-
-
46		 -
-
-
-		 25,850,231
(1,360)
735,238
78,055		 1,599,689
-
(217,650)
(16,580)		 27,449,920
(1,360)
517,588
61,475
- - - - 788,875 (97,490) 121,862 46 - 813,293 (234,230) 579,063
-
(227,580)
-
-
-
-		 -
42,373
2,374
-
-
-		 -
-
-
-
-
-		 -
-
-
-
-
-		 -
-
-
(10,120)
-
756		 -
-
-
-
-
-		 -
-
-
-
-
(756)		 -
-
-
-
-
-		 (185,207)
185,207
-
-
-
-		 (185,207)
-
2,374
(10,120)
-
-		 -
-
(2,374)
10,120
(11,302)
-		 (185,207)
-
-
-
(11,302)
-
$18,905,695 $4,929,007 $2,866,052 $559,232 $163,734 $(1,187, 536) $226,643 $6,384 $ - $26,469,211 $1,361,903 $27,831,114

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

－160－

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

Item Year Ended December 31 Year Ended December 31
2020 2019
1.CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) before income tax
Adjustments to reconcile profit and loss :
Depreciation
Amortization
Expected credit loss
Net loss (gain) on financial assets and liabilities at fair value
through profit or loss
Interest expense
Interest income
Dividend income
Share of(gain) lossof associates and joint ventures
Loss on disposal and retirement of property, plant and equipment
Transfer of property, plant and equipment to expenses
Gain on disposal of investment properties
Gain on disposal of noncurrent assets held for sale
Gain on disposal of investments
Other income recognized from rent concessions
Others
Total adjustments to reconcile profit and loss
Changes in operating assets and liabilities
Net changes in operating assets:
Decrease (increase) in financial assets as at fair value through
profit or loss
Decrease (increase) in contract assets
Decrease (increase) in notes receivable
Decrease (increase) in accounts receivables
Decrease (increase) in accounts receivables - related parties
Decrease (increase) in other receivables
Decrease (increase) in inventories
Decrease (increase) in prepayments
Decrease (increase) in other financial assets
Decrease (increase) in other operating assets
Total net changes in operating assets		 $582,790
1,652,369
40,493
76
12,267
1,146,553
(105,057)
(43,344)
879,545
14,764
16,699
(750,473)
(49,270)
-
(413)
(580)		 $ (1,985,466)
1,728,926
42,353
17,455
(2,958)
1,315,673
(124,964)
(106,632)
1,067,590
26,700
16,394
(341,434)
(401,121)
(20)
-
(217)
2,813,629 3,237,745
27,701
488,914
272,469
(179,085)
603,990
(73,797)
(782,523)
(1,573,613)
(3,714)
(10,777)		 23,615
(290,493)
805,737
289,776
377,419
130,600
2,597,867
(49,671)
576
-
(1,230,435) 3,885,426

－161－

Year Ended December 31

Item 2020 2019
Net changes in operating liabilities:
Increase (decrease) in contract liabilities
Increase (decrease) in notes payable
Increase (decrease) in accounts payable
Increase (decrease) in other payables
Increase (decrease) in provisions
Increase (decrease) in advance receipts
Increase (decrease) in net defined benefit liability
Total net changes in operating liabilities
Total net changes in operating assets and liabilities
Total adjustments
Cash generated from (used in) operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash generated from (used in) operating activities
2.CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other
comprehensive income
Proceeds from disposal of financial assets at fair value through
other comprehensive income
Proceeds from capital reduction of financial assets at fair value
through other comprehensive income
Proceeds from disposal of financial assets at fair value through
profit or loss
Acquisition of investments accounted for using equity method
Proceeds from disposal of investments accounted for using equity
method
Proceeds from capital reduction of investments accounted for
using equity method
Acquisition of noncurrent assets held for sale
Proceeds from disposal of noncurrent assets held for sale
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Decrease (increase) in refundable deposits		 1,146,817
(330,205)
(192,913)
180,797
2,996
(72)
(67,791)		 (437,711)
(356,484)
(56,921)
(35,189)
(20,286)
3
(98,138)
739,629 (1,004,726)
2,880,700
6,118,445
(490,806)
2,322,823
2,905,613
110,396
43,344
(1,156,347)
(56,870)		 4,132,979
125,400
106,632
(1,325,093)
(218,243)
1,846,136 2,821,675
(58,620)
15,876
16,087
-
(84,537)
-
140
(190)
137,531
(4,599,380)
620
702,958		 (15,000)
-
4,234
550,145
(372,387)
203
679
(1,652)
566,075
(4,251,566)
329
424,764

－162－

Year Ended December 31

Item 2020 2019
Acquisition of intangible assets
Acquisition of right-of-use assets
Acquisition of investment properties
Proceeds from disposal of investment properties
Decrease (increase) in other financial assets
Decrease (increase) in other noncurrent assets
Net cash generated from (used in) investing activities
3.CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term loans
Increase (decrease) in short-term notes and bills payable
Increase in long-term loans
Repayment of long-term loans
Increase (decrease) in guarantee deposits received
Repayments of principal of lease liabilities
Increase (decrease) in other noncurrent liabilities
Cash dividends paid
Payments for buy-back of treasury shares
Increase (decrease) in non-controlling interests
Net cash generated from (used in) financing activities
4.EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS
5.NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
6.CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
7.CASH AND CASH EQUIVALENTS, END OF YEAR		 (12,637)
(7,943)
(20,065)
1,177,685
720,184
(197)		 (4,768)
(1,187)
(13,930)
434,619
(715,757)
(4,056)
(2,012,488) (3,399,255)
(672,439)
358,000
6,114,376
(6,612,879)
1,152
(8,400)
(1,539)
-
(185,207)
(11,302)		 (403,890)
94,000
8,669,625
(8,378,067)
2,784
(9,325)
(3,277)
(187,581)
-
20,064
(1,018,238) (195,667)
(108,345) 274,038
(1,292,935)
5,023,717		 (499,209)
5,522,926
$3,730,782 $5,023,717

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

－163－

YIEH PHUI ENTERPRISE CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2018

(Amounts In Thousands of New Taiwan Dollars, Unless specified Otherwise)

1. GENERAL INFORMATION

  • 1.1 Yieh Phui Enterprise Co., Ltd. (hereinafter referred to as the Company) was established in April 1978, currently a listed company in Taiwan Stock Exchange (hereafter referred to as TWSE). The Company engages mainly in the processing, manufacturing marketing and import/export trading of rolled steel coils, refined steel, molded steel, steel/iron wires, galvanized/ pre-painted/surface-treated metals.

  • 1.2 The Company’s Board of Directors resolved on May 23, 2005 to merge (simplified merger) with Lien Kang Heavy Industrial Co., Ltd, with the Company as the surviving company. The record date of the merger was set on August 30, 2005. Every 2.5 common shares of Lien Kang Heavy Industrial Co., Ltd. were converted into 1 common share of the Company. The Company issued additional 4,859 thousand common shares for this merger. Rights and obligations of holders of the newly issued shares were the same as those of the Company’s original shareholders.

  • 1.3 Lien Kang Heavy Industrial Co., Ltd., incorporated on November 23, 1989, mainly engages in manufacturing, processing, and trading of the various mechanical spare parts, as well as pipe installation and engineering design/manufacture/installation.

  • 1.4 The Company's steel pipe department, due to its business expansion, was separated from the Company, and was named as Shin Yang Steel Co., Ltd. Relevant investment on this was approved by the Board of Directors on January 18, 2011, and a total of 191 employees were transferred to Shin Yang Steel Co., Ltd.

  • 1.5 For main operation activities of the Company and its subsidiaries (hereinafter referred to as “the Group”), please refer to Note 4.3(2)

  • 1.6 These consolidated financial statements are presented in the Company’s functional currency, New Taiwan Dollars.

2. THE AUTHORIZATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on March 24, 2021.

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

  • 3.1 Effect of adoption of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of SIC (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

New standards, interpretations and amendments endorsed by FSC effective from 2020 are as follows:

－164－

Effective date New, Revised or Amended Standards and Interpretations Announced by IASB Amendments to IFRS 3 “Definition of a Business” January 1, 2020 Amendments to IAS 1 and IAS 8 “Definition of Material” January 1, 2020 Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate January 1, 2020 Benchmark Reform” Amendments to IFRS 16 “New Coronavirus Pneumonia June 1, 2020 (Note) Related Rent Concessions”

(Note) The FSC allows companies to apply the amendment in advance on January 1, 2020.

The Group has assessed the aforementioned standards and interpretations, and there’s no significant effect to the Group’s financial position and financial performance.

3.2 Effect of new issuances or amendments to IFRSs as endorsed by the FSC but not yet adopted

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

Effective Date New, Revised or Amended Standards and Interpretations Announced by IASB Amendments to IFRS 4 “Extension of the Temporary June 25, 2020 (Effective Exemption from Applying IFRS 9” from issue date) Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 January 1, 2021 “Interest Rate Benchmark Reform - Phase 2”

(Note) The amendments are applicable for the annual reporting period beginning on or after January 1, 2021.

The Group has evaluated the aforementioned standards and interpretations, and there’s no significant effect to the Group’s financial position and financial performance.

3.3 Effect of IFRSs issued by IASB but not yet endorsed and issued into effect by 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, Revised or Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or Contribution
of Assets between an Investor and its Associate or Joint
Venture”
IFRS 17 “Insurance Contracts”
Amendments to IFRS 17
Amendments to IAS 1 “Classification of Liabilities as
Current or Non-current”
Amendments to IAS 16 “Property, Plant and Equipment-
Proceeds before Intended Use”
Amendments to IAS 37 “Onerous Contract - Cost of
Fulfilling a Contract”
Amendments to IFRS 3 “Reference to the Conceptual
Framework”
Annual Improvements to IFRS Standards 2018-2020
Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting
Estimates”		 Effective Date Announced
by IASB (Note 1)
To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
January 1, 2022 (Note 4)
January 1, 2022 (Note 5)
January 1, 2023
January 1, 2023

－165－

  • Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

  • Note 2: Group should apply these amendments retrospectively. However, the amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

  • Note 3: This amendment applies to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

  • Note 4: This amendment applies to business combinations whose acquisition date starts in the annual reporting period after January 1, 2022.

  • Note 5: The amendments to IFRS 9 are applicable to swap or modification of terms of financial liabilities incurred during the annual reporting period beginning on January 1, 2022. The amendment to IAS 41 is applicable to fair value measurement during the annual reporting period beginning after January 1, 2022. The amendments to IFRS 1 are retrospectively applied to the annual reporting period beginning after January 1, 2022.

  • A. Amendments to IAS 1 “Classification of Liabilities as Current or Noncurrent”

  • The amendments clarify that when the Group judges whether liability is classified as noncurrent, the Group should assess whether the Group has the right to defer liquidation period after the reporting period at least twelve months. If the Group has the entity’s right

  • on the end of the reporting period, liability must be classified as non-current whatever the Group expects whether executing the right or not. If the Group must follow certain condition to obtain the right to defer settlement of liability, the Group must have completed certain condition on the end of reporting period even if lender tests the Group whether following certain condition later. The aforementioned liquidation means that transferring cash, other economic resources or the Group’s equity instruments to counterparty to let liability wipe out. If liability clause will follow counterparty’s choice to liquidate liability by the Group’s equity instruments, this option must follow the regulations of IAS 32 “Financial Instruments: Presentation” to be recognized in equity individually and doesn’t have affect on the classification of liability.

  • B. Amendment to IAS 16 “Property, Plant and Equipment: Proceeds before Intended Use” The amendment stipulates that the sales price of the project produced in order to make property, plant and equipment reach the necessary location and state that can meet the expected operation mode of the management is not suitable as a cost reduction of the asset. The aforementioned items should be measured in accordance with IAS 2 “Inventory”, and the sales price and cost should be recognized in profit and loss in accordance with the applicable standards.

  • This amendment is applicable to factories, property and equipment that reach the necessary locations and conditions for the management's expected operation mode after January 1, 2021 (the beginning of the earliest expression period). When the Company initially applies the amendments, it will recognize the cumulative effect of the amendments applied initially as an adjustment to the opening balance of the retained earnings (or other components of equity, as appropriate) at the beginning of the earliest expression period , and re-edit the information during the comparison period.

－166－

  • C. Amendment to IAS 37 “Onerous Contract - Cost of Fulfilling a Contract”

  • The amendment stipulates that when assessing whether the contract is onerous, “Cost of Fulfilling a Contract” should include the incremental cost of fulfilling a contract (for example, direct labor and raw materials) and the allocation of other costs directly related to fulfilling a contract (for example, the depreciation expenses of property, plant and equipment items used in fulfilling a contract are allocated).

  • The Group will recognize the cumulative effect on the retained earnings on the first application date when the amendment is first applied.

  • D. Amendment to IFRS 3“Reference to the Conceptual Framework”

  • The amendment is to update the index of the conceptual framework and add the requirement that the acquirer shall apply IFRIC 21“Levies”to determine whether there is an obligation to pay levies on the acquisition date.

  • E. Annual Improvements to IFRS Standards 2018-2020

  • The annual improvement in the IFRS 2018-2020 includes amendments to certain standards. Among them, the amendment of IFRS 9 “Expenses included in the “10%” test for the purpose of derecognise financial liabilities” is to assess whether there is a significant difference between the swap of financial liabilities or the modification of terms, When comparing cash flow projections of the new and old contract terms (including the net amount of fees charged for signing a new contract or modifying the contract), whether there is a 10% difference, the aforesaid fees collected should only include the payment between the borrower and the lender paid for.

  • F. Amendments to IAS 1 ‘’Disclosure of Accounting Policies’’ This amendment is to improve the disclosure of accounting policies and provide more useful information for major users of financial statements.

  • G. Amendments to IAS 8 ‘’Definition of Accounting Estimates’’

  • This amendment defines accounting estimates as the monetary amount of financial statements subject to measurement uncertainty, and provides further explanations and examples to help companies distinguish between changes in accounting policies and changes in accounting estimates.

As of the date the consolidated financial statements were issued, the Group continues in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the aforementioned standards or interpretations and related applicable period. The related impact will be disclosed when the Group completes the evaluation.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented unless otherwise stated.

4.1 Statement of Compliance

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the IFRSs, IASs interpretations as well as related guidance endorsed by the FSC with the effective dates.

－167－

4.2 Basis of Preparation

  • (1) Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

  • A. Financial assets and financial liabilities at fair value through profit or loss (including derivative instruments).

  • B. Financial assets and liabilities measured at fair value through other comprehensive income.

  • C. Liabilities on cash-settled share-based payment arrangements measured at fair value.

  • D. Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

  • (2) The preparation of the consolidated financial statements in conformity with the IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

4.3 Basis of Consolidation

  • (1) The basis for the consolidated financial statements:

  • A. All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

  • B. Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

  • C. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the noncontrolling interests even if this results in the non-controlling interests having a deficit balance.

  • D. Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

  • E. When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost

－168－

on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss or transferred directly to retained earnings as appropriate, on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

(2) The subsidiaries in the consolidated financial statements:

Investee / Subsidiary
Main Businesses
1. Yieh Phui Enterprise Co., Ltd. (the Company)
Good Honor Holdings Ltd.
Investment
Shin Yang Steel Co., Ltd.
Steel products related
businesses
Yieh Phui (Hong Kong)
Holdings Limited
Investment
Yieh Hsing Enterprise Co.,
Ltd.
Wire rods trading
Great Emperor Hotel Co.,
Ltd.
Hotel industry
Kings Garden International
Co., Ltd.
Leasing, sales, and
development of
residential and
commercial buildings,
department stores
Shin Phui Steel Corporation
Trading of steel
products
Worthing Honor Holdings
Ltd.
Investment
Sin Bang Investment &
Development Co., Ltd.
Investment
Gen-Wan Technology Corp
Telecommunication
Champion Logistic Inc.
Investment
EMMT Systems
Corporation
Manufacturing and
marketing of military
specification printed
circuit boards
Kuo Chang Enterprise Co.,
Ltd.
Wholesale of hardware
United Brightening
Development Corp.
Technical consultation
for steel products		 Percentage ofOwnership Percentage ofOwnership
December 31,
2020
100.00%
100.00%
100.00%
57.41%
54.55%
50.12%
100.00%
100.00%
100.00%
86.99%
89.66%
78.51%
99.04%
95.56%		 December 31,
2019
100.00%
100.00%
100.00%
56.98%
41.18%
49.28%
100.00%
100.00%
100.00%
86.99%
89.66%
78.10%
99.04%
95.56%

－169－

Investee / Subsidiary
Main Businesses
Hong Yuh Assets
Management Co., Ltd.
Management service
Lian So (H.K) Co., Limited
Investment
Yieh Phui America Inc.
Steel trading
2. Hong Yuh Assets Management Co., Ltd.
Lien-Hsin steel Co., Ltd.
Metal manufacturing
industry
Lien-Sheng steel Co., Ltd.
Metal manufacturing
industry
Lien-Heng Mining Co., Ltd. Nickle mining
Lien-Hung Mining Co., Ltd. Nickle mining
Asiamax Mining Indonesia
Nickle mining
3. Gen-Wan Technology Corp.
EMMT Systems
Corporation
Manufacturing and
marketing of military
specification printed
circuit boards
4. Yieh Phui (Hong Kong) Holdings Limited
Yieh Phui (China)
Technomaterial Co., Ltd.
Manufacturing and
marketing of pickled,
cold rolled, galvanized
and prepainted steel
coils
5. Yieh Phui (China) Technomaterial Co., Ltd.
Tianjin Lianfa Precision
Steel Corporation
Manufacturing and
marketing of special
high grade alloy
Changshou ChangHuei
Trading Co.
Trading of steel
products
6. EMMT Systems Corporation
Applied Wireless
Identifications Group, Inc.
RFID
Groupco Technology Inc.
Radio
7. Applied Wireless Identifications Group, Inc.
AWID Asia Co., Ltd.
Telecommunications
equipment wholesale
8. AWID Asia Co., Ltd.
AWID Sanghai Co., Ltd.
Telecommunications
equipment wholesaling
AWID Changshou Co., Ltd.
Telecommunications
equipment wholesaling		 Percentage ofOwnership Percentage ofOwnership
December 31,
2020
December 31,
2019
80.00%
80.00%
80.00%
80.00%
100.00%
100%
47.88%
47.88%
10.00%
10.00%
75.00%
75.00%
19.00%
19.00%
100.00%
100.00%
7.48%
7.48%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
91.47%
91.47%
49.97%
49.97%
100.00%
100.00%
-
100.00%
(Please refer to Note 4 3. (2) A. for details)
100.00%
100.00%		 December 31,
2019

－170－

Investee / Subsidiary
Main Businesses
9. Shin Phui Steel Corporation
Groupco Technology
Radio
Great Emperor Hotel Co.,
Ltd.
Hotel industry
Kings Garden International
Co., Ltd.
Leasing, sales, and
development of
residential and
commercial buildings,
department stores
10. Yieh Hsing Enterprise Co., Ltd.
Great Emperor Hotel Co.,
Ltd.
Hotel industry
Kings Garden International
Co., Ltd.
Leasing, sales, and
development of
residential and
commercial buildings,
department stores
11. Kings Garden International Co., Ltd.
Yi Hua International Co.,
Ltd.
Leasing, selling and
development of
residential and
commercial buildings
Hua Li International Co.,
Ltd.
Daily necessities
wholesale
12. United Brightening Development Corp.
Chao Ying Investment
Development Co., Ltd.
Investment
Champion Logistic Inc.
Investment
13. Lian So (H.K)Co., Limited
Lien-Hsin Steel Co., Ltd.
Metal manufacturing
industry
Lien-Sheng Steel Co., Ltd.
Metal manufacturing
industry
Lian Yang (Hong Kong)
Trading Limited
Trading business
14. Lien-Hsin Steel Co., Ltd.
Lien-Heng Mining Co., Ltd.
(Note)
Nickle mining
Lien-Hung Mining Co., Ltd.
(Note)
Nickle mining		 Percentage ofOwnership Percentage ofOwnership
December 31,
2020
December 31,
2019
42.53%
42.53%
0.01%
0.01%
0.01%
0.01%
45.44%
58.81%
49.87%
50.71%
70.00%
70.00%
100%
100%
(Please refer to Note 4 3. (2) A. for details)
100.00%
100.00%
10.34%
10.34%
52.12%
52.12%
90.00%
90.00%
100.00%
100.00%
25.00%
25.00%
81.00%
81.00%		 December 31,
2019

(Note): Due to legal restriction within the local jurisdiction, 25% shareholding of LienHeng Mining Co., Ltd. and 51% shareholding of Lien-Hung Mining Co., Ltd. are registered temporarily under the name of a third-party; in order that the rights be secured, the third-party has pledged all shares under his/her name to the Group through a contract agreement.

－171－

  • A. Increase and decrease in consolidated subsidiaries:

    • Hua Li International Co., Ltd. which was invested by Kingsgarden International Co., Ltd. with 100% shareholding, was incorporated in October 2019. In addition, AWID Shanghai Co., Ltd. had gone through liquidation in July 2020.

  • B. The financial statements of subsidiaries, Changshou ChangHuei Trading Co. and Good Honor Holdings Ltd. and Worthing honor Holdings Ltd. for 2020 and 2019, were not audited. The management considered unaudited financial statements of these subsidiaries will not have a significant impact on the consolidated financial statements.

  • (3) Subsidiaries not consolidated in the consolidated financial statements: None.

  • (4) Adjustments for subsidiaries with different accounting periods: Not applicable.

  • (5) Major restrictions:

As of December 31, 2020 and 2019, cash and bank deposits of $2,242,530 thousand, and $3,039,247 thousand, respectively are deposited in China and subject to the local foreign exchange control. Such foreign exchange control restricts fund remitting out from China (except for regular dividends).

  • (6) Securities issued by the parent company and held by subsidiaries: None.

  • (7) Information about subsidiaries with significant non-controlling interest: December 31, 2020：

December 31, 2020：
Name ofSubsidiary
Yieh Hsing Enterprise Co., Ltd.
Others
Total
December 31, 2019：
Name of Subsidiary
Yieh Hsing Enterprise Co., Ltd.
Others
Total		 Shareholding %
42.59%
Shareholding%
43.02%		 Non-controlling
interests
$977,330
384,573
$1,361,903
Non-controlling
interests
$1,178,613
421,076
$1,599,689

  • A. Please refer to Table 10 and Table 11 in Note 13 for the main operation location and countries of registration of the subsidiaries listed above.

  • B. Summary of the financial information are as follows:

  • a. Balance Sheets:

Yieh Hsing Enterprise Co., Ltd. and its Subsidiaries

Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity		 December31,2020
$2,457,761
10,481,456
2,929,969
2,584,687
$7,424,561		 December31,2019
$3,279,346
20,282,292
3,043,549
14,148,958
$6,369,131

－172－

b. Statements of Comprehensive Income：

b. Statements of Comprehensive In come： come：
Operating revenue
Net income
Other comprehensive income (net after tax)
Total comprehensive income (loss)
Total comprehensive income (loss)
attributable to non-controlling interests
Dividends paid to non-controlling interest		 Yieh Hsing Enterprise Co., Ltd.
andits Subsidiaries
2020
$5,589,791
($484,760)
1,384
($483,412)
($200,511)
$ -		 2019
$6,552,804
($652,969)
18,750
($634,219)
($269,459)
$ -

c. Statements of Cash Flows：

Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents, beginning of the period
Cash and cash equivalents, end of the period		 Yieh Hsing Enterprise Co., Ltd.
and its Subsidiaries		 Yieh Hsing Enterprise Co., Ltd.
and its Subsidiaries
2020
($332,199)
(2,747,335)
2,829,954
($249,580)
458,375
$208,795		 2019
($224,007)
(3,410,684)
3,777,337
$142,646
315,729
$458,375

4.4 Foreign Currencies

  • (1) Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company’s functional currency.

  • (2) In preparing the financial statements of each individual consolidated entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Such exchange differences are recognized in profit or loss in the year in which they arise. 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 included in profit or loss for the year except for exchange differences arising on 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 in terms of historical cost in foreign currencies are not retranslated.

－173－

  • (3) For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into New Taiwan Dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity (attributed to noncontrolling interests as appropriate).

4.5 Classification of Current and Noncurrent Assets and Liabilities

  • (1) Steel Department and Other Non-heavy Industry Department

  • A. Assets that meet one of the following criteria are classified as current assets:

    • a. Assets that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

    • b. Assets held primarily for trading purposes;

    • c. Assets that are expected to be realized within 12 months after the balance sheet date;

    • d. Cash and cash equivalents, excluding those that are restricted, or to be exchanged or used to settle liabilities at least twelve months after the balance sheet date.

Otherwise they are classified as non-current assets.

  • B. Liabilities that meet one of the following criteria are classified as current liabilities:

  • a. Liabilities that are expected to be settled within the normal operating cycle;

  • b. Assets held primarily for trading purposes;

  • c. Liabilities that are expected to be settled within 12 months after the balance sheet date. (Even if a long-term refinancing or re-arrangement of payment agreements is completed after the balance sheet date and before the issuance of the financial report is approved, it is classified as current liabilities).

  • d. Liabilities for which the repayment date cannot be extended unconditionally to more than 12 months after balance sheet date. 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.

Otherwise they are classified as non-current liabilities

  • (2) Heavy Industry Department

The business cycle of the majority of the construction contracts is longer than12 months. As a result, assets and liabilities related to the construction contracts are classified as current or non-current assets and liabilities according to the business cycle.

4.6 Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value (including the original maturity of the time deposits within three months).

4.7 Financial instruments

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

Financial assets and financial liabilities are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are

－174－

recognized immediately in profit or loss.

(1) Financial assets

The Group adopts trade-date accounting to recognize and derecognize financial assets.

  • A. Category of financial assets and measurement

  • Financial assets are classified into the following categories: financial assets at FVTPL, financial assets at amortized cost, and investments in equity instruments at FVTOCI.

  • a. Financial asset at FVTPL

    • Financial asset is classified as at FVTPL when the financial asset is mandatorily classified or it is designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

    • Financial assets are designated initially at FVTPL, if the designation can eliminated or significantly reduces the measurement or recognition of inconsistencies.

    • Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividends or interest earned on such a financial asset. Fair value is determined in the manner described in Note 12(3).

  • b. Financial assets at amortized cost

    • Financial assets that meet the following conditions are subsequently measured at amortized cost:

    • (a) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

    • (b) The contractual terms of the financial assets give rise on specified date to cash flow that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss. Expect for the following two cases, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset.

  • (a) Purchased or originated credit-impaired financial assets: for those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

  • (b) Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets: for those financial assets, the Group shall apply the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

  • c. Investments in equity instruments at FVTOCI

  • On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

－175－

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, they will be transferred to retained earnings. Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss when the Group’s right to receive the dividends is established, unless the Group’s right clearly represent a recovery of part of the cost of the investment.

  • B. Impairment of financial assets

  • a. At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable), investments in debt instruments that are measured at FVTOCI, lease receivable and contract assets.

  • b. The Group always recognizes lifetime Expected Credit Loss (i.e. ECL) for accounts receivables. For other financial assets, the Group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equaling to 12-month ECL.

  • c. Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. In contrast, lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

  • d. The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

  • C. Derecognition of financial assets

  • The Group derecognises a financial asset when one of the following conditions is met:

  • a. The contractual rights to receive cash flows from the financial asset expire.

  • b. The contractual rights to receive cash flows from the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.

  • c. The Group neither retains nor transfers substantially all risks and rewards of ownership of the financial asset; however, it has not retained control of the financial asset.

On derecognition of financial asset at amortized cost in its entirety, the difference between the financial asset’s carrying amount and the sum of the consideration received is recognized in profit or loss. On derecognition of equity instruments at fair value through other comprehensive income in its entirety, the cumulative profit and loss will be transferred directly to retained earning without reclassified into profit and loss.

－176－

  • (2) Equity instruments

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument.

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

  • (3) Financial liabilities

  • A. Subsequent measurement

    • All financial liabilities are measured at amortised cost using the effective interest method.

  • B. Derecognition of financial liabilities

    • The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

4.8 Inventories

  • Inventories, under a perpetual system, are measured at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

4.9 Noncurrent assets held for sale

When the carrying amount of non-current assets (or disposal categories) is mainly recovered through sales transactions rather than continued use, and it is highly likely to be sold, it is classified as an asset held for sale. Assets classified as noncurrent assets held for sale are measured at the lower of the carrying amount and fair value less costs to sell.

4.10 Investments accounted for using equity method - associates

  • (1) Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly, 20% or more of the voting power of the investee. Investments in associates are initially recognised at cost and are accounted for using the equity method.

  • (2) The Group’s share of its associate’s profit or loss after the date of acquisition is recognised in the Group’s profit or loss, and its share of changes in the associate’s other comprehensive income is recognised in the Group’s other comprehensive income. When the Group’s share of losses of its associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group discontinues recognizing its share of further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

  • (3) Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been

－177－

adjusted where necessary to ensure consistency with the policies adopted by the Group.

  • (4) In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

  • (5) Upon loss of significant influence over an associate, the Group remeasures any retained investment in the former associate at its fair value. Any difference between the fair value and carrying amount is recognised in profit or loss.

  • (6) When the Group disposes its investment in an associate, if it loses significant influence over the associate, the Group shall account for all amounts previously recognised in other comprehensive income in relation to that investment on the same basis as would have been required if the associate had directly disposed of the related assets or liabilities. If it still retains significant influence over the associate, then the Group shall reclassify to profit or loss the proportion of the gain or loss that had previously been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities.

  • (7) When the Group disposes its investment in an associate, if it loses significant influence over the associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it still retains significant influence over the associate, then the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

4.11 Property, Plant and Equipment

  • (1) Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

  • (2) Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repair and maintenance is recognized in profit or loss as incurred.

  • (3) Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each end of reporting year. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change.

－178－

The estimated useful lives of property, plant and equipment are as follows: Buildings:

Main plants 15 to 56 years Main office buildings 40 to 60 years Other accessory equipment 5 to 35 years Machinery and equipment 2 to 38 years Other equipment 2 to 32 years

  • (4) An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on 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.

4.12 Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are recognised as non-current liabilities and are amortised to profit or loss over the estimated useful lives of the related assets using the straight-line method.

4.13 Leases

The Group assesses whether the contract is (or includes) a lease at the date of the contract.

  • (1) The Group as lessee

  • Except for payments for low-value asset and short-term leases which will be recognized as expenses on a straight-line basis, the Group will recognize right-ofuse assets and lease liabilities for all leases at the inception of lease. Right-of-use asset

The right-of-use asset is initially measured at cost (including the initial measurement amount of the lease liability, the payments less incentives, initial direct costs and the estimated recover cost), the subsequent measurement is based on the cost less accumulated depreciation and accumulated impairment loss, and adjusting the amount of re-measures of lease liabilities.

The right-of-use asset recognized depreciation is using the straight-line basis from the date of the lease until the expiration of the useful life or the expiration of the lease term, the depreciation is provided that the title of the underlying asset will be acquired at the end of the lease period or, if the cost of the right-of-use asset reflects the execution of the purchase option

Lease liability

The lease liability is initially measured by the present value of the lease payment (including fixed payment, substantive fixed payment, change in lease payment depending on the index or rate, etc.). If the implied interest rate on the lease is easy to determine, the lease payment is discounted using that interest rate. If the interest rate is not easy to determine, the lessee's increase borrowing rate is used. If the lease period, the evaluation of the purchase choice, the amount of expected to be paid under the residual value guarantee or the change in the index or rate used to determine the lease payment result in a change in the future lease payment, the Group will measure the lease liability and adjust the right to use assets

－179－

relatively. If the carrying amount has been reduced to zero, the remaining amount will recognize in the profit and loss. Lease liabilities are presented in a single-line project on the consolidated balance sheet.

Lease payments in lease agreements that do not depend on the index or rate are recognized as expenses in the period in which they occur.

  • (2) The Group as lessor

  • Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

  • Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

4.14 Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes) and include land held for a currently undetermined future use.

Investment properties are initially measured at cost, including transaction costs, and subsequently measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

Investment properties under construction are stated at cost less accumulated impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Depreciation of these assets commences when the assets are ready for their intended use.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

4.15 Intangible assets

Separately acquired intangible assets with finite useful lives are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis over the estimated lives as follows:

  • (1) Mineral right : 12 years

  • (2) Computer software: 2 to 5 years;

  • (3) Trademarks and patents: the period of contractual rights or the future economic benefits flowing to the Group.

The estimated useful life and amortization method for an intangible asset are reviewed at each financial year-end. Any changes in estimates is accounted for on a prospective basis.

An intangible asset is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising from the disposal of the assets is determined as the difference between the disposal proceeds and the carrying amount of the asset and is recognized in profit or loss.

4.16 Other non-current assets - exploration and evaluation assets

Exploration and evaluation assets are initially measured at cost and classified as either tangible assets or intangible assets according to the nature of the assets acquired, and such classification shall be consistently applied. Tangible assets (e.g. vehicles and drilling rigs) are subsequently measured at cost less accumulated

－180－

depreciation and accumulated impairment, whereas intangible assets (eg. rights to explore minerals) are subsequently measured at cost less accumulated impairment. An exploration and evaluation asset is no longer be classified as such when the technical feasibility and commercial viability of extracting a mineral resource are demonstrable. Prior to reclassification of an exploration and evaluation asset, the entity shall assess the impairment of which and recognize an impairment loss accordingly.

4.17 Impairment of non-financial assets

The Group assesses at the end of reporting period the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. When the indication of impairment loss recognized in prior years for an asset other than goodwill no longer exists, the impairment loss is reversed to the extent of the loss previously recognized in profit or loss.

4.18 Provisions

Provisions (including warranty, onerous contracts, short-term employee benefits, and liability derecognition) are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.

4.19 Employee benefits

Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expenses in that period when the employees render service.

Pensions

  • (1) Defined contribution plans

  • For defined contribution plans, the contributions are recognised as pension expenses when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund from the plan or a reduction in future contributions to the plan.

  • (2) Defined benefit plans

  • a. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior period. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The discount rate is determined by using the interest rates of government bonds (at the

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balance sheet date) of a currency and term consistent with the currency and term of the defined benefit plans.

  • b. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

c. Past service costs are recognised immediately in profit or loss.

Employees’ compensation and directors’ and supervisors’ remuneration

Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal or constructive obligations and those amounts can be reliably estimated. Any difference between the amount accrued and the amount actually distributed is accounted for a change in accounting estimate.

Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of an employee’s employment as a result of either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of benefits in exchange for the termination of employment. The Group recognises expense when it can no longer withdraw an offer of termination benefits or when it recognises related restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date are discounted to their present value.

4.20 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are recognized in equity as a deduction from the proceeds.

4.21 Share-based payment transactions

  • (1) For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. And ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.

  • (2) For the cash-settled share-based payment arrangements, the employee services received and the liability incurred are measured at the fair value of the liability to pay for those services, and are recognised as compensation cost and liability over the vesting period. The fair value of the liability shall be remeasured at each balance sheet date until settled at the settlement date, with any changes in fair value recognised in profit or loss.

4.22 Income tax

  • (1) The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

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  • (2) The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

  • (3) Deferred income tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

  • (4) Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred income tax assets are reassessed.

  • (5) Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

  • (6) A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

4.23 Revenue Recognition

The Group recognizes revenue from contracts with customers in accordance with the principles and steps as stated below:

  • (1) Identify the contract with the customer;

  • (2) Identify the performance obligations in the contract;

  • (3) Determine the transaction price;

  • (4) Allocate the transaction price to the performance obligations in contracts; and

  • (5) Recognize revenue upon satisfaction of performance obligations.

  • The Group does not adjust the transaction price in a contract for the effects of a significant financing component, if the period between when the customer pays for the goods or services and when the entity transfers the goods or services is one year

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or less.

  • (1) Sale of goods

  • Sales revenue from goods mainly comes from the sales of galvanized steel coils, painted steel coils, steel pipes and electronic materials. Sales revenue is recognized when the control of goods is passed to customers. Since customers have obtained the right to set the price and make use of the goods and assumed the responsibility for resale and risks of obsolescence, the Group recognizes revenue and accounts receivable at such time point, presented as the net amount after deducting sales returns, discounts and allowance. When supplying materials for processing, control of the processed goods is not transferred, in which case it is not recognized as revenue.

  • (2) Service revenue

Service revenue is recognized when the service is rendered. Revenue from service rendered in accordance with contracts is recognized in proportion to the completion of a contract.

  • (3) Revenue from construction contracts

A real estate contract is a construction contract under which the real estate units have been controlled by customers in the process of construction, in which case the Group recognizes revenue over time. Since construction costs are directly related to the stage of completion of performance obligations, the Group measures the stage of completion by the ratio of real costs incurred to date to total expected costs. The Group recognizes contract assets over the construction period, and transfers them to accounts receivables upon billing the customers. Where the construction proceeds received exceed the recognized amount, the difference is recognized as contract liability. Construction retainage, which is the amount withheld by customers in accordance with the contractual terms in order to assure that the Group will satisfy its contractual obligation, is recognized as a contract asset before the Group completes its performance obligation. If the outcome of the performance obligations cannot be measured reliably, construction revenue is recognized only to the extent of the expenses incurred for satisfaction of performance obligations that are expected to be recovered.

  • (4) Revenue from leases, dividends and interests

  • A. The rental revenue shall be recognized as revenue in the duration of the lease based on straight-line method.

  • B. Dividend revenue from investments is recognized when the rights of shareholders to receive payment are established, provided that the economic profits arising from such transaction are highly probable to flow to the Group and the amount of such benefits can be reliably measured.

  • C. Interest revenue is recognized based on outstanding principal and applicable effective interest according to passage of time on an accrual basis.

4.24 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of those assets until substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

To the extent that an entity borrows funds specifically for the purpose of obtaining a qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalisation as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings.

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Except for those qualifying capitalization, all other borrowing costs are recognized as an expense in profit or loss as incurred.

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND MAJOR SOURCES OF ASSUMPTION UNCERTAINTY

The Group considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. The effect of a change in an accounting estimate shall be recognized prospectively by including it in profit or loss in the period of the change, if the change affects that period only, or in the period of the change and future periods, if the change affects both.

In the preparation of the consolidated financial statements, the critical accounting judgments the Group has made and the major sources of estimation and assumption uncertainty are described as follows:

5.1 Critical judgements in applying accounting policies

(1) Revenue recognition

The Group follows IFRS 15 to determine if it controls the specified good or service before that good or service is transferred to the customer, and the Group is acting as a principal or an agent in that transaction. When the Group acts as an agent, revenue is recognized on a net basis.

The Group acts as a principal as that it meets one of the following situations:

  • A. The Group gains control over the goods from the other party before transferring goods to customers.

  • B. The Group controls the right of providing service by the other party in order to control the ability of the party to provide service to customers.

  • C. The Group gain control over goods or service from the other party in order to combine with other goods or services to provide specific goods or services to customers.

The indicators (not limited to) which assist making judgment on whether the Group controls the goods or services before transferring goods or services to customers:

  • A. The Group has primary responsibilities for the goods or services it provides;

  • B. The Group bears inventory risk before transferring the specific goods or services to customer, or after transferring the control to customer (for example, if the customer has the right to return).

  • C. The Group has the discretion to set prices.

(2) Lease term

In determining the lease term, the Group considers all the facts and circumstances that generate an economic incentive to exercise (or not exercise) the option, including all expected change of facts and circumstances from the inception of commencement to the exercise of the option. The considerations include the contract clause and conditions of the period covered by the option, the significant leasehold improvements made (or expected) during the contract period, and the importance of the underlying assets to the Group's operations. The lease period is reassessed when significant events or major changes occur within the control of the Group.

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5.2 Critical accounting estimates and assumptions

(1) Estimated impairment of financial assets

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

(2) Process of fair value measurement and evaluation

When the assets and liabilities at fair value with no active market, the Group determines whether to use outside appraisal and using proper evaluation techniques based on related regulation or its own judgment.

If the Level 1 input value is not available while evaluating, the Group refers to the analysis of the investee’s financial position and operating outcome, recent trading price, quotes on non-active market of same equity instrument, quotes on active market of similar equity instrument and evaluation multiples of comparable companies. If the future input value is different from expectation, the fair value might change. The Group updates input values quarterly according to the market status in order to monitor if the measurement of fair value is appropriate.

(3) Impairment assessment of tangible and intangible assets

In the course of impairment assessments, the Group determines, based on how assets are utilised and relevant industrial characteristics, the useful lives of assets and the future cash flows of a specific group of the assets. Changes in economic circumstances or the Group’s strategy might result in material impairment of assets in the future.

(4) Impairment assessment of investments accounted for using the equity method

The Group assesses the impairment of an investment accounted for using the equity method once there is any indication that it might have been impaired and its carrying amount cannot be recoverable. The Group assesses the recoverable amounts of an investment accounted for using the equity method based on the present value of the Group’s share of expected future cash flows of the investee or the present value of expected cash dividends receivable from the investee and expected future cash flows from disposal of the investment, analyzing the reasonableness of related assumptions.

(5) Realisability of deferred tax assets

Deferred assets are recognised only to the extent that it is probable that future taxable profits will be available against which the deferred tax asset can be utilised. The Group’s management assesses the realisability of deferred tax assets by making critical accounting judgements and significant estimates of expected future revenue growth rate and gross profit rate, the tax exemption period, available tax credits, and tax planning, etc. Changes in global economic environment, industrial environment, and laws and regulations might result in material adjustments to deferred tax assets.

(6) Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value; thus, the Group estimates the net realizable value of inventory for obsolescence and unmarketable items on balance sheet date due to the rapid technology changes and

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writes down inventories to the net realisable value.

(7) Calculation of accrued pension obligations

When calculating the present value of defined pension obligations, the Group uses judgments and actuarial assumptions to determine related estimates, including discount rates and future salary increase rate. Changes in these assumptions may have a significantly impact on the carrying amount of defined pension obligations.

(8) Tenant's increase in borrowing interest rate

The fair values at the time of the decision to increase the borrowing rate of the lessee used in the lease payment, the risk-free interest rate and the same currency is used as the reference rate, and the estimated lessee's credit risk sticker and lease specific adjustments (such as asset-specific and secured factors) are taken into account.

6. DETAILS OF SIGNIFICANT ACCOUNTS

6.1 Cash and cash equivalents

Cash and cash equivalents
Item
Cash on hand
Checking account
Demand deposits
Time deposits (with original maturities
within three months)
Total		 December 31
2020
$7,995
696,295
2,903,492
123,000
$3,730,782		 2019
$6,394
732,449
4,239,184
45,690
$5,023,717
  • 1.The financial institutions dealing with the Group are credit worthy, and the Group does transactions with a number of financial institutions to diversify credit risk that are unlikely to be expected to default.

2.The Group had no cash and cash equivalents pledged to others.

6 . 2 Financial assets at fair value through profit or loss

Item
Financial assets - current:
Non-derivative Financial assets
mandatorily measured at FVTPL
Mutual funds
Domestic unlisted preferred stock
Derivatives
Cross currency swap contracts
Total		 December 31 December 31
2020
$35,327
662,651
-
$697,978		 2019
$43,769
376,755
7,755
$428,279

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Financial assets - noncurrent:
Non-derivative financial assets
mandatorily measured at FVTPL
Domestic unlisted preferred stock
Financial bonds
Total
Financial liabilities - current:
Derivatives
Forward exchange contracts
Exchange interest rate swap contracts
Total		 $ -
-
$ -
$14,237
258
$14,495		 $279,285
10,004
$289,289
$ -
-
$ -

  • 1.The Group had no financial assets at fair value through profit or loss pledged to others. 2.Please refer to Note 12(2) for credit risk management and evaluation method.

  • 3.The Group enters derivatives to hedge exchange rate risk of assets denominated in foreign currencies. However, as the Group does not plan on adopting hedge accounting, those contracts are accounted for as financial instruments at fair value through profit or loss upon initial recognition. Outstanding contracts are as follows:

  • (1) Exchange interest rate swap contracts

December 31, 2020：

December 31, 2020：
Nominal Principal
(inthousands)
USD 10,000		 ContractPeriod
April 22, 2020 to
March 29, 2021		 Paid Interest
Rate
0.6%		 Received
FloatingInterestRate
LIBOR three months

December 31, 2019：None

  • (2) Forward exchange contracts December 31 2020：
December 31, 2019：None
(2) Forward exchange contracts
December 31 2020：
Currency
Contract Period
EUR(BUY)
RMB(SELL)
April 3, 2020 to
January 19, 2021
USD(SELL)
RMB(BUY)
July 6, 2020 to
July 15, 2021
December 31, 2019：None		 Execution Rate
7.6782-8.00
6.9998-7.11		 Contract
Amount (in
thousands)
EUR 4,300
USD 10,000

(3) Cross currency swap contracts December 31, 2020：None December 31, 2019：

Received Contract Amount Paid Interest Interest Rate Currency Contract Period (in thousands) Rate Range Range USD(SELL) January 9, 2019 USD 19,000 6.35%-7.21% LIBOR+4.15% RMB(BUY) to June 24, 2020 RMB 129,243

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6.3 Notes receivable, net

Notes receivable, net
Item
At amortized cost
Notes receivable
Less: Loss allowance
Net		 December 31
2020
$572,859
(109)
$572,750		 2019
$845,328
(16)
$845,312

  • 1.As of December 31, 2020 and 2019, the Group pledged a portion of its notes receivable as collateral for its borrowings. Please refer to Note 8.

  • 2.Please refer to Note 7.3.5. for accounts receivable with related parties

  • 3.Please refer to Note 6.4 for the relevant disclosure of loss allowance for notes receivable.

  • 4.The Group has transferred the endorsement of the bank acceptance bills of the Mainland to the suppliers to pay the accounts payable. As the risks and rewards of the notes have been transferred, the Group has derecognized the bank acceptance bills and the corresponding accounts payable. The suppliers still have the right to request the Group to settle the payment if the outstanding bank acceptance notes are not fulfilled at the end of the period. Therefore, the Group continues to participate in the notes. The Group's maximum loss of the continued involvement in the derecognized bank acceptance bills is the amount of bank acceptance bills that have been transferred but not yet matured. As of December 31, 2020 and 2019, the balances were RMB191,122 thousand, and RMB441,574 thousand, respectively. These notes will expire within 1~12 months after the balance sheet date. In consideration of the credit risk of the bank acceptance bills, the Group's assessment of the fair value of its continuing involvement is not significant. The Group did not recognise any gains and losses on the transfer of the bank's acceptance for the year ended December 31, 2020 and 2019.

6.4 Accounts receivable, net

Accounts receivable, net
Item
At amortized cost
Accounts receivable
Less: Loss allowance
Net		 December 31
2020
$1,866,089
(5,204)
$1,860,885		 2019
$1,706,965
(24,019)
$1,682,946

  • A. The Group’s accounts receivables that are not overdue nor impaired all meet the credit standards stipulated based on the counterparties' industrial characteristics, operation scale, and profitability. The average credit period varies: 30~60 days for Carbon Steel Department, and interest-bearing deferred payment is allowed upon mutual agreement; 7~26 days for the sale of steel products; agreed days for the Engineering Department based on the contractual terms; and 60~90 days for other departments.

  • B. For the information about the Group’s accounts receivable pledged as collateral, please see Note 8 for details.

  • C. The Group factored part of its accounts receivables to banks without recourse. The Group had already transferred substantially all risks and rewards upon factoring the

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accounts receivables, which were thereby derecognized from the balance sheet. Please refer to Note 12 (4) for related information.

  • D.The Group applies the simplified approach to provisions for expected credit losses prescribed by IFRS 9, which permits the use of a lifetime expected credit losses provision for trade receivables. The expected credit losses on trade receivables are estimated by reference to past account aging records of the debtor, an analysis of the debtor’s current financial position, industrial trend. which receivables are past due. As the Group’s historical credit losses experience does not show significantly different loss patterns for different customer segments, the provision for losses based on past due status of receivables is not further distinguished between the Group’s different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery of the receivable. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables which are due. Where recoveries are made, these are recognized in profit or loss.

The Group measures the allowance for notes receivable, accounts receivable according and contract assets to the preparation matrix (including related parties)：

December 31,
2020
Not past due
December 31,
2019
Not past due
181 to 365 days
Total		 Expected
credit loss
rate
0%-0.5%
Expected
credit loss
rate
0%-0.5%
100%		 Gross
carrying
amount
$2,625,420
Gross
carrying
amount
$3,326,056
16,699
$3,342,755		 Allowance for
doubtful
accounts(ECL)
($5,982)
Allowance for
doubtful
accounts(ECL)
($7,941)
(16,699)
($24,640)		 Amortized
cost
$2,619,438
Amortized
cost
$3,318,115
-
$3,318,115

Movements of the loss allowance for notes receivable and accounts receivable (including related parties) were as follows:

including related parties) were as follows:
Beginning balance
Add: Provision for impairment
Less: Write-offs
Impact of foreign exchange differences
Ending balance		 Year Ended December 31
2020
$24,640
1,330
(19,961)
(27)
$5,982		 2019
$8,754
16,782
(349)
(547)
$24,640

As of December 31, 2020 and 2019, the above provision has already taken into consideration collateral or other credit enhancement. The other credit enhancement (e.g., banker’s acceptance and L/C) possessed by above receivables were $1,724,005 thousand, and $2,032,654 thousand, respectively.

Please refer to Note 12(2) for the relevant credit risk management and assessment.

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6.5 Other receivables

Item
Business tax refundable
Proceeds receivable from disposal of land
Proceeds receivable arising from sale of
funds
Interest receivable
Others
Total
Less: Loss allowance
Net
Inventories and operating cost
Item
Steel Department and other Non-heavy
Industry Department:
Raw materials
Supplies
Work in progress
Finished goods
Other inventories
Subtotal
Less: Valuation allowance
Net
Heavy Industry Department：
Raw materials
Supplies
Subtotal
Less: Valuation allowance
Net
Total		 December 31 December 31
2020
2019
$114,141
$112,629
-
48,560
-
6,181
967
6,305
17,100
16,794
$132,208
$190,469
-
-
$132,208
$190,469
December 31		 2019
$112,629
48,560
6,181
6,305
16,794
$190,469
-
$190,469
2020
$3,841,296
427,821
1,051,510
3,067,695
286,136
$8,674,458
(244,928)
$8,429,530
$99,989
3,006
$102,995
(418)
$102,577
$8,532,107		 2019
$3,426,910
409,573
1,086,084
2,738,642
268,945
$7,930,154
(418,538)
$7,511,616
$233,533
5,436
$238,969
(1,001)
$237,968
$7,749,584

6.6 Inventories and operating cost

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1.Inventory gains (losses) recognized as cost of sales are as follows:

1.Inventory gains (losses) recognized as cost of sales are as follows: of sales are as follows:
Item
Cost of inventories sold
Construction cost
loss on retirement of Inventory
Unallocated manufacturing overhead
Inventory counting gain (loss)
Purchase and construction contract loss
(recovery gain)
Inventory valuation loss and obsolescence
loss (recovery gain)
Impact of foreign exchange difference
Total operating cost		 Year Ended December 31
2020
2019
$50,130,911
$55,223,661
978,208
1,434,748
32,635
56,364
302,449
212,147
547
1,149
2,263
(8,701)
(174,193)
158,603
(2,042)
60,508
$51,270,778
$57,138,479
2019
$55,223,661
1,434,748
56,364
212,147
1,149
(8,701)
158,603
60,508
$57,138,479

  • 2.The Group recognized inventory valuation loss (recovery gain) of ($174,193) thousand and $158,603 thousand for the year ended December 31, 2020 and 2019, respectively, due to inventory's write-down to net realizable value, or the net realizable value of inventories recovered as a result of market stabilization that enabled the Group to raise prices on certain products.

  • 3.The Group has no inventories pledged to others.

6.7 Prepayments

Prepayments
Item
Prepaid material purchase
Prepaid (overpaid) sales tax
Prepaid insurance
Prepaid sea freight
Prepaid syndicated loan arrangement fee
Other prepayments
Total		 December 31
2020
$2,688,591
661,438
74,113
26,479
15,100
58,439
$3,524,160		 2019
$1,293,220
505,202
65,515
21,694
-
49,816
$1,935,447

  • 1.Prepaid syndicated loan arrangemen fee was paid to lead bank of syndicated loan. In December 2020, the Group entered a syndicated loan agreement with 9 joint lending banks including Megabank, with a credit line of $45 billion, The syndicated loan agreement was first actually drawn in January 2021.

  • Please refer to Note 7.3.7. for prepayments with related parties

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6.8 Noncurrent assets held for sale / Liabilities directly associated with noncurrent assets held for sale

Noncurrent assets held for sale / Liabilities
assets held for sale		 directly associated with noncurrent
Item
Noncurrent assets held for sale
Less：Accumulated impairment
Net
Liabilities directly associated with
noncurrent assets held for sale		 December 31
2020
2019
$160,114
$23,342
-
-
$160,114
$23,342
$70,070
$7,630
2020
$160,114
-
$160,114
$70,070

  • 1.As stated in Note 9.10, In December 2020, the Group entered into a contract to sell part of land in Pingnan Section, Fangliao Township, Pingtung County. The total contract price was $699,980 thousand, and the disposal was expected to be completed within 12 months. As of December 31, 2020, $70,070 thousand have been collected.

  • 2.In November 2019, the Group entered into a contract to sell part of land in Pingbei Section, Jiadong Township, Pingtung County. The total contract price was $76,344 thousand. In March 2020, the ownership transfer was completed in accordance with the scheduled payment terms as stipulated in the contract.

  • 3.Please refer to Note 8 for the information of noncurrent assets held for sale pledged as collateral.

6.9 Other financial assets - current

Item
Time deposits within three months
Pledged demand deposits
Pledged time deposits
Total		 December 31 December 31
2020
$30,395
644,677
132,774
$807,846		 2019
$26,681
741,017
638,232
$1,405,930

6.10 Financial assets at fair value through other comprehensive income or loss - noncurrent

noncurrent
Item
Equity instruments：
Domestic listed stocks
Domestic unlisted stocks
Subtotal
Valuation adjustment
Total		 December31
2020
2019
$45,000
$45,000
587,102
560,182
$632,102
$605,182
93,232
104,704
$725,334
$709,886
2019
$45,000
560,182
$605,182
104,704
$709,886
  1. The Group invests in domestic listed and unlisted stocks in accordance with its medium/long-term strategies and expects to make a profit through long-term investment. Management of the Group believes that it is not consistent with the afore-mentioned long-term investment planning if the short-term fair value changes of such investment are presented in profit or loss. Therefore, the Group elects to designate such investment as to be measured at FVTOCI.

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  1. For related credit risk management and means of assessing, please refer to Note 12(2).

  2. As of December 31, 2020 and 2019, the Group had no financial assets at FVTOCI pledged as collateral.

6.11 Investments accounted for using equity method

Investee
Associates:
Associates with significance:
Eliter International Corp.
E-Da Development Corp.
Tangeng Iron Works Co., Ltd.
Yieh United Steel Corp.
Associates without significance
Total		 December 31 December 31
2020
$3,515,714
1,351,328
3,910,332
3,131,828
1,954,811
$13,864,013		 2019
$3,536,605
1,448,243
4,094,392
3,763,677
1,818,401
$14,661,318

  1. Associates:

  2. (1) Major associates of the Group are as follows:

CompanyName
Eliter International Corp.
E-Da Development Corp.
Tangeng Iron Works Co., Ltd.
Yieh United Steel Corp.		 ShareholdingPercentage ShareholdingPercentage
December 31, 2020
43.56%
34.38%
31.16%
30.51%		 December 31, 2019
43.56%
34.38%
31.16%
30.31%

Please refer to Table 10 and Table 11 in Note 13 for the nature of business, main operation location and countries of registration of the associates listed above.

  • (2) The summarized financial information in respect of the Group’s major associates is as follows:

  • A. Balance Sheets

Eliter International Corp.

Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Equity
Share in associates’ net assets
Unrealized loss from transactions
with associates
Carrying amount of associate		 December 31,2020
$7,219,188
4,963,316
2,693,464
1,273,422
$8,215,618
$3,578,420
(62,706)
$3,515,714		 December 31,2019
$6,971,622
5,195,803
1,603,831
2,299,960
$8,263,634
$3,599,334
(62,729)
$3,536,605

－194－

E-Da Development Corp.

E-Da Development Corp. pment Corp.
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Equity
Share in associates’ net assets
Unrealized loss from transactions
with associates
Carrying amount of associate
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Equity
Share in associates’ net assets
Unrealized loss from transactions
with associates
Carrying amount of associate
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Equity
Share in associates’ net assets
Unrealized loss from transactions
with associates
Carrying amount of associate		 December 31, 2020
December 31, 2019
$605,393
$867,776
7,974,851
8,123,713
886,455
1,021,390
3,741,418
3,735,304
$3,952,371
$4,234,795
$1,358,987
$1,456,096
(7,659)
(7,853)
$1,351,328
$1,448,243
TangengIron Works Co., Ltd.		 December 31, 2019
$867,776
8,123,713
1,021,390
3,735,304
$4,234,795
$1,456,096
(7,853)
$1,448,243
December 31, 2020
$3,180,884
23,623,947
2,439,751
11,815,071
$12,550,009
$3,910,332
-
$3,910,332
Yieh United		 December 31, 2019
$4,274,280
23,749,927
3,638,556
11,244,913
$13,140,738
$4,094,392
-
$4,094,392
Steel Corp.
December 31, 2020
$8,876,058
35,131,909
21,887,485
11,607,523
$10,512,959
$3,204,035
(72,207)
$3,131,828		 December 31, 2019
$8,343,346
36,320,870
23,899,830
8,107,714
$12,656,672
$3,835,884
(72,207)
$3,763,677

－195－

B.Statements of Comprehensive Income

tatements of Comprehensive Income
Operating revenue
Net income (loss)
Other comprehensive income (loss) (net
after tax)
Total comprehensive income (loss)
Dividends received from associate
Operating revenue
Net income (loss)
Other comprehensive income (loss) (net
after tax)
Total comprehensive income (loss)
Dividends received from associate
Operating revenue
Net income (loss)
Other comprehensive income (loss) (net
after tax)
Total comprehensive income (loss)
Dividends received from associate
Operating revenue
Net income (loss)
Other comprehensive income (loss) (net
after tax)
Total comprehensive income (loss)
Dividends received from associate		 Eliter International Corp.
2020
2019
$267,888
$229,538
($66,028)
($144,372)
18,011
(5,901)
($48,017)
($150,273)
$ -
$ -
E-Da Development Corp.		 2019
$229,538
($144,372)
(5,901)
($150,273)
$ -
2020
2019
$704,305
$795,002
($322,389)
($294,609)
39,953
(14,958)
($282,436)
($309,567)
$ -
$ -
TangengIron Works Co., Ltd.		 2019
$795,002
($294,609)
(14,958)
($309,567)
$ -
2020
$10,828,679
($665,673)
74,943
($590,730)
$ -
Yieh United		 2019
$12,350,956
$14,953
49,483
$64,436
$ -
Steel Corp.
2020 2019
$31,873,617 $35,843,299
($1,877,471)
(259,646)		 ($3,046,907)
(325,289)
($2,137,117) ($3,372,196)
$ - $ -

－196－

  • (3)Shares of individually insignificant associates of the Group are summarized as follows:
follows:
Share of:
Net income
Other comprehensive income (loss) (net after tax)
Total comprehensive income (loss)		 Year Ended December 31
2020
$47,617
34,089
$81,706		 2019
$29,989
(42,032)
($12,043)
  • (4)Associates of the Group with quoted prices in active market (Level 1 fair value inputs) are as follow:
inputs) are as follow:
Yieh United Steel Corp. (Note)
Tangeng Iron Works Co., Ltd.
Total		 December 31
2020
$4,983,188
4,220,351
$9,203,539		 2019
$3,506,463
4,678,374
$8,184,837

  • (Note): The fair value information above does not include shares acquired in private placement, which are not allowed to be transferred freely in open markets.

  • (5)For Skylark Hot Spring & Resort Corp., E-Da Tour Bus Corporation, E-Da Bus Transportation Co., Ltd., and E-Da Entertainment Co., the Group has significant influence over which as a result of being a director in such entities. Consequently, those entities are accounted for using equity method.

  • (6)After considering the amount and distribution of other shareholders which are not extremely dispersed, the Group is not able to lead the company’s activities. Thus, the Group has no control even though it holds 38%, 45%, 43.56%, 34.38% and 30.51% of E-Da Health Biotechnology Co., Ltd., Zheng Xin Security Co., Ltd., Eliter International Corp., E-Da Development Corp., and Yieh United Steel Corp. and is the single largest shareholder. The management believes the Group only had significant impact to these companies, so classified them as the associates.

  • (7)The Group participated in the private placement of Yieh United Steel Corp. in February 2017, and December 2015, and subscribed at $7 per share, with the total subscription amount of $204,876 thousand and $1,100,400 thousand, respectively. Pursuant to the Securities and Exchange Act, securities from private placement can only be traded freely in the open markets when they are held for three years from the delivery date and the issuer has to complete the supplementary procedures of public offering.

  • (8)Due to cross ownership and the adoption of equity method between the Group and Yieh United Steel Corp., an investee accounted for using equity method, investment gain (loss) is recognized using the treasury stock approach.

  • (9)All investments accounted for using equity method and the Group’s share of profit or loss and other comprehensive income in the investees, except for E United Japan Co., Ltd., which is calculated based on its unaudited financial statements, are calculated based on audited financial statements of those investees. However, the Group’s management believes unaudited financial statements of above investees would not have a significant impact on the Group.

－197－

(10)As of December 31, 2020 and 2019, the Group pledged part of its investments accounted for using equity method as collateral for its borrowings. Please refer to Note 8.

6.12 Property, Plant and Equipment

Property, Plant and Equipment
Item
Land
Buildings and structures
Machinery
Other equipment
Equipment to be inspected and construction in
progress
Total cost
Less: Accumulated depreciation
Accumulated impairment
Total		 December 31
2020
$6,008,209
8,485,254
40,118,043
3,230,583
15,077,536
$72,919,625
(26,375,533)
(322,012)
$46,222,080		 2019
$6,008,209
8,480,633
34,700,290
3,280,289
16,386,255
$68,855,676
(25,222,049)
(487,523)
$43,146,104
Cost
Balance, January 1, 2020
Additions
Transferred to expenses
Disposals
write-down accumulated
Impairment
Reclassification
Impact of foreign exchange
differences
December 31, 2020
Accumulated depreciation
and impairment
Balance, January 1, 2020
Depreciation
Reclassification
Disposals
write-down accumulated
Impairment
Impact of foreign exchange
differences
December 31, 2020		 Land Buildings and
structures
$8,480,633
7,955
-
(8,592)
-
(35,664)
40,922
$8,485,254
$3,771,355
233,024
11,164
(7,846)
-
12,398
$4,020,095		 Machinery Other equipment Equipment to be
inspected and
construction in
progress		 Total
$6,008,209
-
-
-
-
-
-		 $34,700,290
78,823
-
(262,395)
-
5,417,949
183,376		 $3,280,289
211,439
-
(331,286)
-
57,132
13,009		 $16,386,255
4,231,920
(16,699)
-
(152,445)
(5,439,417)
67,922		 $68,855,676
4,530,137
(16,699)
(602,273)
(152,445)
-
305,229
$6,008,209 $40,118,043 $3,230,583 $15,077,536 $72,919,625
$ -
-
-
-
-		 $19,396,108
1,172,288
(11,164)
(249,687)
-
77,005		 $2,211,471
230,486
-
(329,356)
-
2,106		 $330,638
-
-
-
(152,445)
-		 $25,709,572
1,653,798
-
(586,889)
(152,445)
91,509
$ - $20,384,550 $2,114,707 $178,193 $26,697,545

－198－

Cost Land Buildings and
structures		 Machinery Other equipment Equipment to be
inspected and
construction in
progress		 Total
$6,007,639
570
-
-
-
-		 $8,648,387
6,025
-
(81,492)
16,851
(109,138)		 $35,150,954
70,873
(111)
(96,467)
61,741
(486,700)		 $3,319,698
186,610
-
(251,676)
77,976
(52,319)		 $12,628,421
4,126,507
(16,283)
-
(156,568)
(195,822)		 $65,755,099
4,390,585
(16,394)
(429,635)
-
(843,979)
Balance, January 1, 2019
Additions
Transferred to expenses
Disposals
Reclassification
Impact of foreign exchange
differences
Balance, December 31, 2019
Accumulated depreciation
and impairment
$6,008,209 $8,480,633 $34,700,290 $3,280,289 $16,386,255 $68,855,676
$ -
-
-
-		 $3,635,942
244,913
(79,604)
(29,896)		 $18,443,813
1,212,924
(75,009)
(185,620)		 $2,226,177
254,320
(247,993)
(21,033)		 $330,638
-
-
-		 $24,636,570
1,712,157
(402,606)
(236,549)
Balance, January 1, 2019
Depreciation
Disposals
Impact of foreign exchange
differences
Balance, December 31, 2019
$ - $3,771,355 $19,396,108 $2,211,471 $330,638 $25,709,572
  • 1.Reconciliations of current additions and the acquisition of property, plant and equipment in statement of cash flows were as follows:
Item
Increase in property, plant and equipment
Increase/decrease in payables for purchase of
equipment
Cash paid for acquisition of property, plants and
equipment		 Year Ended December 31 Year Ended December 31
2020
$4,530,137
69,243
$4,599,380		 2019
$4,390,585
(139,019)
$4,251,566

  • 2.Please refer to Note 6.36 for details of the amount of capitalized borrowing costs.

  • 3.Impairment losses for property, plant and equipment recognized for 2020 and 2019 were both $0 thousand.

  • 4.As of December 31, 2019, the Group’s cumulative impairment losses was $223,116 of the painting equipment and other equipment in Pingnan plant due to the termination of expansion of such plant, of which the Pingnan plant’s land was sold in 2020, so the plant’s equipment has been cumulative impairment losses by $152,445 thousand to reduce equipment to be inspected and construction in progress. As of December 31, 2020, the accumulative impairment losses were $70,671 thousand.

  • 5.For the information about property, plant and equipment pledged as collateral, please see Note 8 for details.

  • 6.The Group’s land amounting to both $78,568 thousand as of December 31 2020 and 2019 is unable to be registered under the name of the Group due to regulation restriction. Accordingly, the ownership was registered under the name of an individual with a mortgage registration as safeguard measures.

－199－

6.13 Lease Agreement

A. Right-of-use asset

A . Right-of-use asset
Item December 31
2020
$486,602
37,907
$524,509
(28,511)
-
$495,998
Building		 2019
Land $503,019
38,759
$541,778
(15,682)
-
$526,096
Total
$ 38,759
1,927
(810)
(1,969)		 $ 541,778
11,721
(12,000)
(16,990)
$37,907 $524,509
$ 6,026
6,283
(810)
(495)		 $ 15,682
15,896
(2,759)
(308)
$11,004 $28,511
Building Total
$ -
810
37,949
-		 $ -
501,501
40,544
(267)
$38,759 $541,778
$ -
6,179
(153)		 $ -
16,066
(384)
$6,026 $15,682

－200－

The discount rate interval for lease liabilities is 1.9661%-2.4%.

Please refer to Note 12(2) for lease liabilities with repayment periods.

  • C. Significant lease activities and clause

The Group rented land and buildings for operation. The lease terms range from 1 to 31 years. Part of the lease may be extended with its duration and is calculated based on the area of the land leased and the rate based on the announced land value of the current year. In accordance with the contract, without the lessor’s consent, the Group is not allowed to sublet the leased object to the third party. There is no sign of impairment of right-of-use assets, hence the Group didn’t assess the impairment as of December 31, 2020 and 2019.

  • D. Other lease information:

  • (1) The current lease relevant expense information was as follows:

Item
Short-term lease expense
Gross cash outflow (Note)		 Year Ended December 31 Year Ended December 31
2020
$19,091
$27,491		 2019
$20,910
$30,235

(Note): Including principle paid for lease liability.

  • E. For the information about right-of-use assets pledged as collateral, please see Note 8 for details.

6.14 Investment properties

Item
Land
Buildings
Construction in progress
Total cost
Less: Accumulated depreciation
Accumulated impairment
Total		 December 31 December 31
2020
$124,968
47,006
-
$171,974
(2,382)
(68,009)
$101,583		 2019
$605,403
46,281
40,554
$692,238
(1,667)
(68,009)
$622,562
  1. Investment properties and accumulated depreciation and impairment c hanges are as follows
follows
Cost Land Buildings Construction
inprogress		 Total
$605,403
-
44,569
(378,652)
(146,352)
-		 $46,281
-
-
-
-
725		 $40,554
20,065
(44,569)
-
(16,050)
-		 $692,238
20,065
-
(378,652)
(162,402)
725
Balance, January 1, 2020
Additions
Reclassification
Disposals
Transferred to noncurrent assets held for sale
Impact of foreign exchange differences
Balance, December 31, 2020
$124,968 $47,006 $- $171,974

－201－

Accumulated depreciation and impairment

Accumulated depreciation and impairment
Balance, January 1, 2020
Depreciation
Impact of foreign exchange differences
Balance, December 31, 2020
Cost		 $68,009
-
-		 $1,667
675
40
-
-
-		 $69,676
675
40
$68,009 $2,382
$ -		 $70,391
Land Buildings Construction
inprogress		 Total
$760,128
-
(132,853)
(21,872)
-		 $48,196
-
-
-
(1,915)
$36,988
13,930
(8,894)
(1,470)
-
$845,312

13,930
(141,747)
(23,342)
(1,915)
Balance, January 1, 2019
Additions
Disposals
Transferred to noncurrent assets held for sale
Impact of foreign exchange differences
Balance, December 31, 2019
Accumulated depreciation and impairment
$605,403 $46,281
$40,554
$692,238
$68,009
-
-		 $1,033
703
(69)
-
-
-		 $69,042
703
(69)
Balance, January 1, 2019
Depreciation
Impact of foreign exchange differences
Balance, December 31, 2019
$68,009 $1,667
$ -		 $69,676

Please refer to Note 6.8 for details on transferred to noncurrent assets held for sale.

  • 2.Rental revenue and direct operating expenses of investment properties:
Item
Rental revenue from investment properties
Direct operating expenses incurred by the
investment properties with rental revenue
generating in current period
Direct operating expenses incurred by the
investment properties with no rental revenue
generating in current period		 Year Ended December 31 Year Ended December 31
2020
$ -
$-
$3,324		 2019
$ -
$-
$8,459

  • 3.As of December 31, 2020 and 2019, the fair values of investment properties held by the Group were $123,953 thousand and $1,599,330 thousand, respectively, which were based on evaluation appraised by independent appraisers as of December 2019 and 2017. Such evaluation adopted the comparative approach by reference to the market evidence similar to the real estate transaction prices. Those are Level 3 fair value inputs. Please refer to Note 12(3). The Group believes that there would not be any material fluctuation in the fair value of such investment properties after their appraisal. Appraisal will be taken place every two years on the investment properties.

  • For the information about investment properties pledged as collateral, please see Note 8 for details.

－202－

  1. The Group’s land amounting to both $8,987 thousand as of December 31 2020 and 2019 is unable to be registered under the name of the Group due to regulation restriction. Accordingly, the ownership was registered under the name of an individual with a mortgage registration as safeguard measures.

6.15 Intangible assets

Item December 31 December 31 December 31
2020
$464,202
8,207
17,406
$489,815
(115,468)
-
$374,347
Trademarks
Others
$8,207
$6,133
-
4,768
-
(434)
-
(226)
$8,207
$10,241
Trademarks
Others
$8,207
$10,241
-
12,637
-
(5,493)
-
21
$8,207
$17,406
$ -
$5,470
-
121
-
(5,493)
-
20
$ -
$118		 2019
$504,111
8,207
10,241
$522,559
(90,060)
-
$432,499
Trademarks
$8,207
-
-
-
$8,207
Trademarks
$8,207
-
-
-
$8,207
$ -
-
-
-
$ -		 Total
$10,241
12,637
(5,493)
21		 $522,559
12,637
(5,493)
(39,888)
$17,406 $489,815
$5,470
121
(5,493)
20		 $90,060
40,493
(5,493)
(9,592)
$118 $115,468
Others Total
$6,133
4,768
(434)
(226)		 $498,808
4,768
(434)
19,417
$10,241 $522,559

－203－

Accumulated amortization and
impairment
Balance, January 1, 2019
Amortization
Disposals
Impact of foreign exchange differences
Balance, December 31, 2019		 $ 40,373
42,295
-
1,922
$84,590		 $ -
-
-
-
$ -		 $6,072
58
(434)
(226)		 $46,445
42,353
(434)
1,696
$5,470 $90,060

6.16 Other non-current assets

Other non-current assets
Item
Intangible exploration and evaluation assets
Other
Total
Less: Accumulated impairment
Net		 December 31
2020
$10,536
10,233
$20,769
-
$20,769		 2019
$11,590
-
$11,590
-
$11,590

The above-mentioned intangible exploration and evaluation assets are mainly the rights to explore nickel laterite ores, which will be reclassified as “Intangible assets - drilling rights to minerals” when the technical feasibility and commercial viability of extracting a mineral resource are demonstrable in the future.

6.17 Refundable deposits

Refundable deposits
December 31
Item 2020 2019
Deposit for dumping margins $148,596 $851,218
Performance deposits 16,921 27,544
Rent deposits 32,135 33,616
Others 25,243 13,475
Total $225,895 $925,853

An antidumping investigation into the corrosion-resistant steel sold from Taiwan, conducted by the Department of Commerce of the U.S. in June 2015, had completed in July 2016, with an official announcement that all corrosion resistant products manufactured in or sold from Taiwan must temporarily bear a dumping margin duty. The custom was also instructed to impose a temporary dumping margin on all entries of merchandise sold by the Group to the U.S. that had been covered by the investigation. The antidumping duty is imposed by the U.S. using the retrospective system. The difference between the tax rate of the provisional tax rate paid and the final survey result is presented as “refundable deposit”.

－204－

6.18 Short-term Loans

Short-term Loans
Type of Loan
Credit loans
Credit for material purchase
Mortgage loans
Total
Type of Loan
Credit loans
Credit for material purchase
Mortgage loans
Total		 December 31, 2020
Amount
$7,636,483
6,696,824
592,000
$14,925,307
December		 Interest Rate
1.39%-5.00%
0.93%-2.55%
1.81%-2.83%
31, 2019
Amount
$6,797,255
8,150,491
650,000
$15,597,746		 Interest Rate
1.33%-5.50%
1.54%-3.98%
2.09%-2.84%

Some financial assets, and property, plant, and equipment, investment properties, notes receivable, and accounts receivable are pledged as collateral for short-term loans. Please refer to Note 8 for details.

6.19 Short-term notes and bills payable

Item
Commercial paper payable
Less: Unamortized discount
Net
Interest Rate Range		 December 31 December 31
2020
$1,292,000
(2,635)
$1,289,365
1.67%-2.78%		 2019
$934,000
(2,728)
$931,272
1.70%-2.78%

The Group pledged some of its property, plant, and equipment, and investment properties as collateral for some of its short-term bills payable. Please refer to Note 8 for details.

－205－

6.20 Other Payables

Other Payables
Item
Compensations payable
Equipment payable
Interest payable
Utility expense payable
Consumables payable
Export and transportation expense payable
Business tax payable
Cash dividends payable - from previous
period
Repairing charges payable
Others
Total		 December 31
2020
$539,677
491,363
55,613
49,025
28,272
82,812
50,213
23,065
18,341
415,493
$1,753,874		 2019
$408,153
560,606
63,945
50,256
25,407
74,538
56,562
22,994
19,223
369,919
$1,651,603

Please refer to Note 7.3.6. for related party transactions

6.21 Provisions - current

Item
Employee benefits
Warranty
Onerous contract
Derecognized liabilities
Total		 December 31 December 31
2020
$83,394
3,469
3,269
3,670
$93,802		 2019
$82,750
3,013
1,006
4,037
$90,806
Employee Onerous Derecognized Derecognized
Item benefits
Warranty		 contract liabilities Total
January 1, 2020 $82,750 $3,013 $1,006 $4,037 $98,806
Recognized in current period 83,394 2,068 3,269 - 88,731
Write-off in current period (82,750) (1,612) (1,006) (367) (85,735)
December 31, 2020 $83,394 $3,469 $3,269 $3,670 $93,802
Employee Onerous Derecognized
Item benefits Warranty contract liabilities Others Total
January 1, 2019 $81,585
$2,290		 $9,707
$ 3,577
$13,933
$111,092
Recognized in current
period		 82,750 3,013 1,006 460
-		 87,229
Write-off in current
period		 (81,585) (2,290) (9,707) - (13,933) (107,515)
December 31, 2019 $82,750
$3,013		 $1,006
$4,037
$ -		 $90,806

－206－

  • 1.Provision for employee benefits is an estimate of the short-term service leave vested to employees.

  • 2.The Group’s “provision for warranty” is the warranty for the sales of electronic products, and is estimated based upon the historical warranty data of such products.

  • 3.Provision for onerous contracts covers the expected loss of construction contract.

6.22 Long-term Loans and Current Portion of Long-term Loans

Item
Bank syndicated loans:
The Company
Subsidiaries
Subtotal
Secured loans from banks
Unsecured loans from banks
Other financial institutions
Total
Less: Unamortized discount
Less: Current portion
Long-term loans
Interest rate range		 December 31 December 31
2020
$7,312,500
25,292,911
$32,605,411
924,240
424,026
26,313
$33,979,990
(95,902)
(5,322,794)
$28,561,294
1.50%-5.56%		 2019
$8,275,000
23,923,488
$32,198,488
1,808,880
429,089
42,036
$34,478,493
(109,447)
(6,359,286)
$28,009,760
1.50%-5.65%

  1. Please refer to Note 8 for the collateral of the above bank loans.

  2. According to syndicated loan agreements with banks, the Group needs to maintain several financial ratios, including current ratio, liability ratio and interest coverage ratio, at a certain level, calculated based on the audited annual consolidated financial statements and the reviewed semi-annual consolidated financial statements or the audited annual financial statements of subsidiaries for the duration of the contracts. Since the Group failed to meet certain financial ratios in 2020, it needed to pay to the managing bank a compensation at 0.125% of the loan balance within agreed time, or was subject to 0.10%~1.50% incremental on its interest rate. However, this was not seen as a breach of contract, Except for the subsidiary-Yieh Phui (Hong Kong) Holdings Limited’s joint loan of Taiwan Business Bank, if the improvement is not completed before September 30 of the following year, the joint lending banks must discuss and determine whether there is a breach of contract.

6.23 Long-term Deferred Revenue

The subsidiary, Tianjin Lianfa Precision Steel Corporation Beneficiary, had received a subsidy for engineering construction from the Tianjin Economic Technological Development Area of RMB 11,470 thousand in 2006. As it is a government grant associated with assets, donation income would be recognized based on percentage used for the recognition of depreciation expense. Details are set out below:

－207－

December 31
Item 2020 2019
Deferred revenue from government
grants:
Subsidy for engineering construction $50,064 $49,292
Less: Accumulated revenue recognized (22,026) (19,715)
Ending balance $28,038 $29,577

6.24 Benefit Plan After Retirement

  • 1.Defined contribution plan

  • (1) The pension system based on the Labor Pension Act which is applicable to the Group’s domestic entities resided in the R.O.C. is a defined contribution plan managed by government. Companies would make monthly contribution equal to 6% of each employee's monthly salary to the employees' individual pension accounts at the Bureau of Labor Insurance. Subsidiaries outside the R.O.C. also participate in the local defined contribution plan and makes contribution to the local government accordingly.

  • (2) The Group recognized pension expense of $124,738 thousand and $120,468 thousand for the year ended December 31, 2020 and 2019, respectively.

  • 2.Defined benefit plans

  • (1) The pension plan under the Labor Standards Law, which is applicable to the Group’s domestic entities, is a defined benefit pension plan managed by the government. Under the defined benefit pension plan, pension benefits are based on the average monthly salaries and wages of the last 6 months prior to retirement and the duration of employment. Those companies contribute monthly an amount equal to 4.2% ~ 10% of the employees' monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, under the name of the independent retirement fund committee. Before the end of year, if the balance at the retirement fund is not sufficient to cover all employees retiring next year, a lump-sum deposit should be made before March-end of the following year to cover the difference. The retirement fund is managed by the Bureau of Labor Funds, Ministry of Labor. The Group does not have rights to influence its investment management strategy.

  • (2) The amounts recognized in the consolidated balance sheet for obligation from defined benefit plans are as

Item
Present value of defined benefit
obligations
Fair value of planned assets
Net defined benefit liability
Recorded as:
Net defined benefit assets - Noncurrent
Net defined benefit liability - Noncurrent
Total		 December 31 December 31
2020
$1,603,957
(1,174,998)
$428,959
$(10,777)
439,736
$428,959		 2019
$1,726,682
(1,175,905)
$550,777
$ -
550,777
$550,777

－208－

(3) Movements in net defined benefit liability are as follows:

Year Ended December 31, 2020

Year Ended December 31, 2020 Year Ended December 31, 2020 020
Item
Balance as of January 1
Cost of service
Current service cost
Interest expense (income)
Recognized in profit and loss
Remeasurement
Return on plan asset
(Amounts included in interest
income or expense are excluded)
Actuarial (gains) losses -
Effect of change in demographic
assumptions
Effect of change in financial
assumptions
Experience adjustment
Recognized in other comprehensive
income
Pension fund contribution
Paid pension
Balance as of December 31
Item
Balance as of January 1
Cost of service
Current service cost
Past service cost
Interest expense (income)
Recognized in profit and loss
Remeasurement
Return on plan asset
(Amounts included in interest
income or expense are excluded)
Actuarial (gains) losses -
Effect of change in demographic
assumptions
Effect of change in financial
assumptions
Experience adjustment
Recognized in other comprehensive
income		 Present value of
defined benefit
obligations
Fair value of
planned assets
Net defined
benefit liability
$1,726,682
($1,175,905)
$550,777
6,549
-
6,549
11,838
(8,237)
3,601
$18,387
($8,237)
$10,150
$ -
($38,243)
($38,243)
19
-
19
56,776
-
56,776
(61,802)
-
(61,802)
($5,007)
($38,243)
($43,250)
-
(72,950)
(72,950)
(136,105)
120,337
(15,768)
$1,603,957
($1,174,998)
$428,959
Year Ended December 31, 2019		 Net defined
benefit liability
$550,777
6,549
3,601
$10,150
($38,243)
19
56,776
(61,802)
($43,250)
(72,950)
(15,768)
$428,959
Present value of
defined benefit
obligations
$1,787,468
8,628
(395)
13,322
$21,555
$ -
203
8,750
(56,454)
($47,501)		 Fair value of
planned assets
($1,054,154)
-
-
(8,184)
($8,184)
($36,898)
-
-
-
($36,898)		 Net defined
benefit liability
$733,314
8,628
(395)
5,138
$13,371
($36,898)
203
8,750
(56,454)
($84,399)

－209－

Pension fund contribution
Paid pension
Balance as of December 31		 -
(34,840)
$1,726,682		 (110,378)
33,709
($1,175,905)		 (110,378)
(1,131)
$550,777

  • (4) Through the pension plan under the Labor Standards Law, the Group is exposed to the following risks:

  • A. Investment risk

The pension funds are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government's designated authorities or under the mandated management by Bureau of Labor Funds, Ministry of Labor. However, the rate of return on the Group’ s planned assets shall not be less than the average interest rate on a two-year time deposit published by the local banks.

  • B.Interest rate risk

A decrease in the government bond interest rate will increase the present value of the defined benefit obligation, however, the return on the debt investments of the plan assets will also increase. Those two will partially offset each other. C.Salary risk

The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

  • (5) The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions adopted on the valuation date were as follows:
valuation date were as follows:
Item
Discount rate
Future salary increase rate
Average maturity period of defined
benefit obligations		 Measurement date
December 31, 2020
0.30%-0.80%
2.00%
8.5-9 years		 December 31, 2019
0.70%-1.00%
2.00%
8.4-9 years

  • A. Assumptions on future mortality experience are set based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

  • B. If a reasonable change in one of the principal assumptions for actuarial valuation occurred and all other assumptions were held constant, the increase (decrease) in the present value of defined benefit obligation would be as follows:

follows:
Item
Discount rate
Increase by 0.25%
Decrease by 0.25%
Expected growth rate of salaries
Increase by 0.25%
Decrease by 0.25%		 December 31
2020
(36,030)
37,243
37,860
(36,675)		 2019
(39,338)
40,708
41,446
(40,114)

－210－

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

  • (6) The Group expects to make contributions of $69,244 thousand to the pension plans for the year ended December 31, 2021.

6.25 Common Stock

  • 1.Quantities and values of the Company’s outstanding common shares at the beginning and ending of periods were as follows:
Item
January 1
Cancellation of treasury stock
December 31
Item
January 1
Capitalization of earnings
December 31		 Year Ended December 31, 2020
Shares
(thousand shares)
Amount
1,913,327
$19,133,275
(22,758)
(227,580)
1,890,569
$18,905,695
Year Ended December 31, 2019		 Year Ended December 31, 2020
Shares
(thousand shares)
Amount
1,913,327
$19,133,275
(22,758)
(227,580)
1,890,569
$18,905,695
Year Ended December 31, 2019
Shares
(thousand shares)
1,875,811
37,516
1,913,327		 Amount
$18,758,113
375,162
$19,133,275

  • 2.As of December 31, 2020, the Company had an authorized capital of $20,000,000 thousand with 2,000,000 thousand shares.

  • 3.The Company’s Board of Directors resolved on August 4, 2020 to cancel its treasury stocks. The amount of capital reduction was $227,580 thousand, with 22,758 thousand shares eliminated, and the capital reduction ratio was 1.19%. The record date for capital reduction was set on August 14, 2020.

  • 4.The Company’s shareholders’ meeting held on June 20, 2019 resolved to capitalize earnings of $375,162 thousand. The plan was approved by FSC on July 12, 2019 and 37,516 thousand shares of common share at the par value of $10 were issued. The record date for capital increase was set on September 2, 2019.

6.26 Capital Surplus

Item
Share premium
Treasury stock transaction
Difference between the price received
from acquisition or disposal of a
subsidiary and its book value
Change in ownership interests in
subsidiaries accounted for using equity
method
Changes in associates and joint ventures
recognized under equity method
Total		 December 31 December 31
2020
$4,060,366
600,112
218,574
8,665
41,290
$4,929,007		 2019
$4,060,366
557,739
216,200
8,665
41,311
$4,884,281

－211－

Under the Company Act, capital surplus arising from shares issued at premium or from donation may be used for offsetting deficit. Furthermore, if the Company has no accumulated loss, capital surplus may be used for issuing new shares or distributing cash in proportion to shareholders' original holdings. In accordance with regulations in the Securities and Exchange Act, when the above-mentioned capital surplus is used for capitalization, the total amount every year shall not exceed 10% of the paid-in capital. The Company may use capital surplus to offset loss only when the amount of earnings and reserves are insufficient to offset the loss. The capital surplus generated from investment under equity method shall not be used for any purposes.

6.27 Retained Earnings

  • 1.A residual dividend distribution policy is adopted in accordance with the Company’s business expansion and profitability after considering the fact that the Company is currently in its growing phase. The annual net income, if any, should be used to pay off all the taxes and duties, as well as to compensate prior deficits. The remaining amount, if any, should be appropriated in the following order of presentation: (1) 10% as legal reserve;

  • (2) set aside or reverse a certain amount as or of special reserve according to operating needs or laws or regulations;

  • (3) the remaining net income plus unappropriated earnings from prior years may be used as dividends or bonus for shareholders after proposed by the Board of Directors and resolved by the shareholders meeting.

  • In principle, earnings shall be distributed in the form of stock dividends in accordance with the Company’s capital requirement for business expansion and profitability. Cash dividends are distributed at between 20% to 100% of total dividends distributed in accordance with the actual profitability while stock dividends are distributed at between 0% to 80% of the total dividends distributed.

  • 2.Legal reserves may only be used for offsetting deficits and issuing new shares or distributing cash in proportion to shareholders’ original holdings. However, when new shares are issued or cash is distributed, the amount shall be limited to 25% of the reserves in excess of the paid-in capital.

  • 3.Special reserve

Item
Provision for debit balance of other equity
Provision upon initial application of IFRSs
Total		 December 31 December 31
2020
$231,475
327,757
$559,232		 2019
$231,475
327,757
$559,232

  • (1) The Company may allocate earnings only after providing special reserve for debt balance in other equity on the date of balance sheet, and the reversal of debit balance in other equity, if any, may be stated into allocable earnings.

  • (2) Upon first-time adoption of IFRSs, the special reserve provided pursuant to the official letter under Jin-Guan-Jheng-Fa-Zih No. 1010012865 dated April 6, 2012 may be reversed to allocable retained earnings in proportion to the special reserve as provided originally, if the Company uses, disposes of or reclassifies the relevant assets in the future.

－212－

  • 4.The Company’s appropriations of earnings for 2019 had been approved in the shareholders’ meeting held in June 2020. No dividends will be distributed to the shareholders due to accumulated deficit. Earnings distribution proposals and dividends per share for 2018, which were resolved by the shareholders’ meeting in June 2019, are stated below：
June 2019, are stated below：
Item
Legal reserve
Reversal of special reserve
Cash dividends for common stock
Stock dividends for common stock
Total		 Year Ended December 31, 2018
Earnings appropriation
proposal
$30,850
(77,423)
187,581
375,162
$516,170		 Dividends
per share(NTD)
0.1
0.2
  1. The appropriation of 2020 earnings had been proposed by the board of directors on March 2021. Details were summarized below:
Item
Legal reserve
Appropriation for special reserve
Cash dividends for common stock
Stock dividends for common stock
Total		 Year Ended December 31, 2020 Year Ended December 31, 2020
Earnings appropriation
proposal
$16,373
147,631
-
-
$163,734		 Dividends
per share(NTD)
-
-
  • 6.Information about earnings distribution approved by the Board of Directors and resolved by the shareholders meeting is available at the Taiwan Stock Exchange Market Observation Post System website.

6.28 Other Equity Items

6.28 Other Equity Items
Item Exchange
differences on
translation of
foreign
financial
statements		 Unrealized gain
(loss) on financial
asset at fair value
through other
comprehensive
income		 Gain (loss) on
hedging
instruments		 Total
Balance, January 1, 2020
Exchange differences on
translation of foreign financial
statements
Unrealized gain (loss) on
financial assets at fair value
through other comprehensive
income
Share of associates and joint
ventures accounted for using
equity method
Disposal of unrealized gain
(loss) on financial assets at fair
value through other
comprehensive income
Balance, December 31, 2020		 ($1,090,046)
48,541
-
(146,031)
-		 $105,537
-
(10,749)
132,656
(756)		 $6,388
-
-
46
-		 ($978,171)
48,541
(10,794)
(13,329)
(756)
($1,187,536) $226,643 $6,384 ($954,509)

－213－

Item Exchange
differences on
translation of
foreign
financial
statements		 Unrealized gain
(loss) on financial
asset at fair value
through other
comprehensive
income		 Gain (loss) on
hedging
instruments		 Total
Balance, January 1, 2019
Exchange differences on
translation of foreign financial
statements
Unrealized gain (loss) on
financial assets at fair value
through other comprehensive
income
Share of associates and joint
ventures accounted for using
equity method
Balance, December 31, 2019		 ($723,803)
(254,956)
-
(111,287)		 $157,892
-
(16,198)
(36,157)		 $6,679
-
-
(341)		 ($559,232)
(254,956)
(16,198)
(147,785)
($1,090,046) $105,537 $6,338 ($978,171)

6.29 Treasury stock

  • 1.P Purpose of treasury stock and changes in quantity:

Unit: Thousand Shares

Year EndedDecember31,2020 Year EndedDecember31,2020
January1
-		 Addition
22,758		 Reduction
(22,758)		 December31
-

  • 2.In order to protect the Company’s credit and shareholders’ equity, the Company’s Board of Directors resolved on March 13, 2020 to repurchase 100,000 thousand shares from March 16 to May 15, 2020. The number of shares repurchased by the Company as of May 15, 2020 is 22,758 thousand shares, with the amount of $185,207 thousand. The Company’s Board of Directors resolved on August 4, 2020 to cancel its treasury stocks with 22,758 thousand shares eliminated, and the capital reduction ratio was 1.19%. The record date for capital reduction was set on August 14, 2020.

  • 3.Pursuant to the Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus.

  • 4.Pursuant to the Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to shareholder’s rights before it is reissued.

－214－

6.30 Non-controlling Interest

Item
Beginning balance
Share attributable to non-controlling interest:
Net loss for the current year
Other comprehensive income of the year
Remeasurement of defined benefit plans
Exchange differences on translation of foreign financial
statements
Unrealized gain (loss) on financial asset at fair value through
other comprehensive income
Share of associates and joint ventures accounted for using equity
method
Exchange differences on translation of foreign financial
statements
Unrealized gain (loss) on financial asset at fair value through
other comprehensive income
Remeasurement of defined benefit plans
Gain (loss) on hedging instruments
Changes in associates and joint ventures recognized under equity
method
Increase in non-controlling interest - capital increase by cash
Decrease in non-controlling interest - sale
Decrease in non-controlling interest - Refund of capital reduction
Increase (decrease) in non-controlling interest
Ending balance		 Year Ended December 31 Year Ended December 31
2020
$1,599,689
(217,650)
1,296
(17,051)
(414)
(2,606)
1,756
438
1
-
1,777
(11,004)
(2,075)
7,746
$1,361,903		 2019
$1,853,763
(299,204)
9,588
6,786
201
(1,406)
(543)
220
(6)
1,689
26,098
(6,034)
-
8,537
$1,599,689

6.31 Operating Revenue

Operating Revenue
Item
Revenue from contracts with customers
Sales revenue
Construction revenue
Realized (unrealized) profits from sales
Total sales revenue from contracts with customers
Less: Sales return
Sales discount
Net operating revenue		 Year Ended December 31
2020
2019
$54,423,363
$58,278,577
1,086,627
1,497,479
217
217
$55,510,207
$59,776,273
(31,150)
(23,182)
(57,262)
(65,494)
$55,421,795
$59,687,597
2020
$54,423,363
1,086,627
217
$55,510,207
(31,150)
(57,262)
$55,421,795

1.Segments of revenue from contracts with customers

The Group’s source of revenue comes from providing goods and services that are transferred either over time or at a specific timing. Revenue can be split into the following segments:

－215－

(1) Segmented by revenue from different types of goods and services: 2020：

2020：
Steel coils and Construction
steelpipes Wire rods revenue Others Total
External customer
Contract revenue $46,590,000 $5,407,927 $1,086,844 $2,337,024 $55,421,795
Timingof revenue recognition
Revenue recognized at a $46,590,000 $5,407,927 $ - $2,337,024 $54,334,951
specific timing
Revenue recognized over - - $1,086,844 - 1,086,844
time
Total $46,590,000 $5,407,927 $1,086,844 $2,337,024 $55,421,795
2019：
Steel coils and Construction
steelpipes Wire rods revenue Others Total
External customer
Contract revenue $48,237,922 $6,165,940 $1,497,696 $3,786,039 $59,687,597
Timingof revenue recognition
Revenue recognized at a $48,237,922 $6,165,940 $ - $3,786,039 $58,189,901
specific timing
Revenue recognized over - - 1,497,696 - 1,497,696
time
Total $48,237,922 $6,165,940 $1,497,696 $3,786,039 $59,687,597

(2) For detailed revenue information by business segments, please refer to Note 14. 2.Contract Balances

Contract Balances
Item
Notes receivable and accounts receivable
Contract assets - current
Steel structure construction and overhead
cranes
Contract liabilities - current
Unearned sales revenue
Advance construction receipts
Total		 December 31
2020
$2,619,438
$334,945
$2,035,162
84,442
$2,119,604		 2019
$3,318,115
$822,605
$857,294
115,493
$972,787

(1) Changes in contract assets and contract liabilities were caused mainly by the difference of timing between when performance obligations were fulfilled and when customers make payments.

(2) Allowance for contract assets:

when customers make payments.
) Allowance for contract assets:
Expected credit loss rate
Gross carrying amount
Loss allowance (Lifetime ECL)
Net		 December 31
2020
0%-0.5%
$336,080
(1,135)
$334,945		 2019
0%-0.5%
$824,994
(2,389)
$822,605

－216－

The Group recognizes allowance losses on contract assets based on expected credit losses during existence. Contract assets will be transferred to accounts receivable at the time of billing. Its credit risk characteristics are the same as accounts receivable generated from similar contracts. Therefore, the Group believes that the expected credit loss rate of accounts receivable can also be applied to contracts. Changes in allowance losses on contract assets were as follows:

follows:
Beginning balance
Add: Provision for (Reversal of)
impairment
Ending balance		 Year Ended December 31
2020
$2,389
(1,254)
$1,135		 2019
$1,715
674
$2,389

  • (3) Contract liabilities recognized for the years ended December 31, 2020 and 2019 under operating revenue amounted to $857,294 thousand and $1,264,258 thousand.

  • (4) As of December 31, 2020 and 2019, the transaction prices allocated to the performance obligations that were not fully satisfied amounted to $637,615 thousand and $1,150,238 thousand, respectively. The Group will recognize revenue as the construction is being completed and the expected timing for recognition of revenue is on various dates through December 2022.

6.32 Employee benefits, depreciation and amortization expense

Nature
Employee benefits
Salary
Insurance
Pension (Note 1)
Other employee benefits
Depreciation (Note 1)
Amortization
Total		 Year Ended December 31,2020 Year Ended December 31,2020 Year Ended December 31,2020
OperatingCost
$1,455,944
138,589
98,686
337,936
1,545,588
-
$3,576,743		 OperatingExpense
$792,422
67,790
36,005
97,089
86,839
40,493
$1,120,638		 Total
$2,248,366
206,379
134,691
435,025
1,632,427
40,493
$4,697,381
Nature
Employee benefits
Salary
Insurance
Pension (Note 2)
Other employee benefits
Depreciation (Note 2)
Amortization
Total		 Year Ended December 31,2019 Year Ended December 31,2019 Year Ended December 31,2019
OperatingCost
$1,469,104
150,096
100,240
368,629
1,596,243
-
$3,684,312		 OperatingExpense
$706,546
66,143
33,219
96,041
122,581
42,353
$1,066,883		 Total
$2,175,650
216,239
133,459
464,670
1,718,824
42,353
$4,751,195

－217－

(Note 1)Excluding pension of $197 thousand and depreciation of $19,942 thousand under equipment prepayments.

  • (Note 2)Excluding pension of $380 thousand and depreciation of $10,102 thousand under equipment prepayments.

  • 1.According to Articles of Incorporation, compensation to employees and remuneration to directors shall neither be less than 0.2 % nor greater than 0.1% of the net income before tax and before which the compensation to employees and remuneration to directors are deducted from. Compensation to employees and remuneration to directors for 2020 was distributed at 0.2% and 0.1% of the net income before tax and Due to the accumulated loss of the Company for 2019, the estimated amount of the above compensation and remuneration were both $0 thousand. Any changes in the amounts, if any, after the annual financial statements were authorized for issue, shall be recorded as a change in accounting estimate, and should be adjusted the next year.

  • 2.Compensation to employees and remuneration to directors for the years ended December 31, 2020 and 2019 has been resolved and approved by the Board of Directors in March 2021 and 2020. Relevant amounts recognized in the financial statements are as follows:

Resolved distributed amount
Recognized amount in the
annual financial report
Difference amount		 Year Ended December 31 Year Ended December 31 Year Ended December 31
2020
Employees’
Compensation
Directors’
Remuneration
$ 447
$ 224
447
224
$ -
$ -		 2019
Employees’
Compensation
$ 447
447
$ -		 Employees’
Compensation
$ -
-
$ -		 Directors’
Remuneration
$ -
-
$ -

The above-mentioned employee compensation was distributed in cash.

  • 3.Information about employee compensation and remuneration to directors approved by the Board of Directors is available at the Taiwan Stock Exchange Market Observation Post System website.

6.33 Interest Income

Interest Income
Item
Bank deposits
Cross currency swap contracts deposits
Refundable deposits
Others
Total		 Year Ended December 31
2020
$23,889
10,253
70,786
129
$105,057		 2019
$61,069
60,788
-
3,107
$124,964

－218－

6.34 Other Income

Item
Dividend income
Other income
Income from subsidy
Dumping margins
Return of refundable deposits
Income from sales of scraps
Income from subsidy
Others
Subtotal
Total		 Year Ended December 31 Year Ended December 31
2020
$43,344
28,855
-
291,160
49,947
86,755
46,348
503,065
$546,409		 2019
$106,632
-
255,998
71,952
63,416
-
37,894
429,260
$535,892

  • 1.The Group’s Rolling Plant No. 3 was caught on fire in April 2018, resulting in damage of part of the equipment therein. The carrying amount of the damaged equipment was $85,048 thousand. Aside from recognizing deductible for fire loss of $7,000 thousand, an insurance claim receivable for the damaged part in the amount of $78,048 thousand was also recognized in December 31, 2018. In July 2020, January 2020, and January 2019, the Group has obtained $124,554 thousand, $166,606 thousand, and $150,000 thousand in insurance claim. After offsetting the insurance claim receivable, $124,554 thousand, $166,606 thousand, and $71,952 thousand are recorded as “other income”.

  • 2.The Group has applied to the Industrial Development Bureau for various subsidies such as salary and working capital affected by the Severe Pneumonia with Novel Pathogens. The Group had recognized government subsidy income of $86,755 thousand as ‘‘other income’’.

  • 3.For information on dumping margins, please refer to Note 6.17.

6.35 Other gains and losses

Other gains and losses
Item
Valuation gain (loss) on financial assets mandatorily
measured at FVTPL
Net foreign exchange gain (loss)
Gain (loss) from disposal of property, plant, and
equipment
Gain on disposal of investment properties
Gain on disposal of noncurrent assets held for sale
Dumping margins
Others
Total		 Year Ended December 31
2020
$(12,267)
112,947
(14,764)
750,473
49,270
(46,192)
(15,131)
$824,336		 2019
$2,406
(71,202)
(26,700)
341,434
401,121
-
(14,925)
$632,134

1.For information on dumping margins, please refer to Note 6.17.

－219－

6.36 Finance Costs

Finance Costs
Item
Interest expense:
Interest on loans
Interest on lease liabilities
Subtotal
Less: Amount qualified for capitalization
Finance costs		 Year Ended December 31
2020
2019
$1,559,132
$1,763,137
1,168
1,340
$1,560,300
$1,764,477
(413,747)
(448,804)
$1,146,553
$1,315,673
2020
$1,559,132
1,168
$1,560,300
(413,747)
$1,146,553

6.37 Income Tax

1.Income tax expense

(1) Components of income tax expense

1) Components of income tax expense
Item
Current income tax expense
Adjustment to prior year income taxes
Tax on undistributed retained earnings
Tax on repatriation of offshore funds
Land value incremental tax
Deferred income tax on temporary
differences originated and reversed
Income tax expense (benefit)		 Year Ended December 31
2020
$33,457
-
208
12,240
27,597
(8,300)
$65,202		 2019
$42,972
111
1,513
-
25,741
(355,518)
($285,181)

(2) Income tax expense (benefit) associates with other comprehensive income

Item
Remeasurement of defined benefit plans
Exchange differences on translation of
foreign financial statements
Total		 Year Ended December 31 Year Ended December 31
2020
$8,650
23,984
$32,634		 2019
$16,880
(72,875)
($55,995)

－220－

  • 2.Reconciliation of income before income tax and income tax expense recognized in profit or loss is as follows:
profit or loss is as follows:
Item
Income (loss) before tax
Income tax expense (benefit) at the statutory
rate
Tax effect of adjusting items:
Investment loss (gain) recognized under
equity method
Unrealized inventory valuation loss
(recovery gain)
Timing difference of revenue recognition
Unrealized (realized) investment loss
Unrealized (realized) impairment loss
Gain (loss) on sale of land exempt from
income tax
Paid (unpaid) pension
Tax-exempt subsidy income under Special
Act for Relief
Other adjustments
Loss carryforwards
Adjustment to prior year income taxes
Additional tax on undistributed retained
earnings
Tax on repatriation of offshore funds
Land value increment tax
Net changes of deferred income tax
Income tax expense (benefit) recognized in
profit or loss		 2020
$582,790
$150,356
179,909
(30,360)
7,378
(15,932)
(30,489)
(160,012)
(15,714)
(9,217)
27,451
(65,913)
-
208
12,240
27,597
(8,300)
$65,202		 2019
($1,985,466)
($439,402)
213,518
33,270
(1,526)
(12,265)
-
(148,608)
(19,627)
-
78,846
338,766
111
1,513
25,741
(355,518)
($285,181)

The Group was subject to a tax rate of 20%as stipulated in the Income Tax Act of the Republic of China. The taxable amount in other jurisdictions is calculated based on the tax rate applicable therein.

The Group applied for and was approved the repatriation of offshore funds (including mainland China) within the time limit in accordance with the “The Management, Utilization, and Taxation of Repatriated Offshore Funds Act ” effective from August 15, 2019. The applicable tax rate exempt from taxation is 8% for the first year and 10% for the second year under the general income tax system. A profit-seeking enterprise may apply to the Ministry of Economic Affairs for engaging in substantive investment within one year from the date of repatriating funds and has a 50% tax refund preference when completing the investment within the time limit.

－221－

3.Deferred income tax assets or liabilities from temporary differences, loss carry forwards and investment credits:

Item
Deferred income tax assets
Temporary differences
Investment income (loss)
recognized under equity method
Financial statements translation
differences of foreign operations
Provision for inventory valuation
loss
Investments loss under the cost
approach
Impairment loss from property,
plant and equipment
Timing differences in recognition
of cost and sales revenue
Booking tax difference for
depreciation
Net defined benefit liabilities
Loss carryforwards
Others
Subtotal
Deferred income tax liabilities
Temporary differences
Unrealized exchange gains
Net defined benefit assets
Others
Subtotal
Total
Item
Deferred income tax assets
Temporary differences
Investment income (loss)
recognized under equity method
Financial statements translation
differences of foreign operations
Provision for inventory valuation
loss
Investments loss under the cost
approach
Impairment loss from property,
plant and equipment
Timing differences in recognition
of cost and sales revenue
Booking tax difference for
depreciation
Net defined benefit liabilities
Loss carryforwards
Others
Subtotal		 Year Ended December 31, Year Ended December 31, 2020
Beginning
balance
$281,029
288,743
56,959
5,000
73,897
3,282
59,838
110,156
110,580
54,367
$983,851
($594)
-
(1,939)
($2,533)
$981,318		 Recognized in
profit or loss
Recognized in
other
comprehensive
income
$62,689
$ -
-
(23,984)
(22,870)
-
-
-
(30,489)
-
7,975
-
(6,144)
-
(13,559)
(8,650)
12,317
-
(1,847)
-
$7,972
$(32,634)
$544
$ -
(2,155)
-
1,939
-
$328
$ -
$8,300
$(32,634)
Year Ended December 31,		 Effect of
Exchange
Rate Changes
$ -
-
1,613
-
-
-
-
-
-
-
$1,613
$ -
-
-
$ -
$1,613
2019		 Ending
balance
$343,618
204,759
35,702
5,000
43,408
11,257
53,694
87,947
122,897
52,520
$960,802
($50)
(2,155)
-
($2,205)
$958,597
Beginning
balance
$7,020
155,868
14,388
5,000
73,897
4,808
63,415
146,808
68,261
44,193
$583,658		 Recognized in
profit or loss
$274,009
-
38,953
-
-
(1,526)
(3,577)
(19,772)
42,319
10,176
$340,582		 Recognized in
other
comprehensive
income
$ -
72,875
-
-
-
-
-
(16,880)
-
-
$55,995		 Effect of
Exchange
Rate Changes
$ -
-
3,618
-
-
-
-
-
-
(2)
$3,616		 Ending
balance
$281,029
228,743
56,959
5,000
73,897
3,282
59,838
110,156
110,580
54,367
$983,851

－222－

Deferred income tax liabilities
Temporary differences
Unrealized exchange gains
Investment income (loss)
recognized under equity method
Others
Subtotal
Total		 ($57)
(16,769)
(721)
($17,547)
$566,111		 ($537)
16,769
(1,296)
$14,936
$355,518		 $ -
-
-
$-
$55,995		 $ -
-
78
$78
$3,694		 ($594)
-
(1,939)
($2,533)
$981,318

4.Items not recognized as deferred income tax assets:

December 31
Item
2020
Investment loss recognized under equity method
$1,027,590
Impairment loss of investments under the cost
approach
48,499
Loss carryforwards
1,306,952
Others
153,397
Total
$2,536,438
5.The Company’s income tax returns through 2018 have been ratified
authorities.
Other Comprehensive Income
Year Ended December
Item
Before tax
Income tax
expense
(benefit)
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit plans
$43,250
($8,650)
Unrealized gain (loss) on financial assets at fair
value through other comprehensive income
(11,208)
-
Share of associates and joint ventures accounted
for using equity method:
Remeasurement of defined benefit plans
20,771
-
Unrealized valuation gain (loss) on financial
assets at fair value through other
comprehensive income
134,412
-
Subtotal
$187,225
($8,650)		 December 31
Item
2020
Investment loss recognized under equity method
$1,027,590
Impairment loss of investments under the cost
approach
48,499
Loss carryforwards
1,306,952
Others
153,397
Total
$2,536,438
5.The Company’s income tax returns through 2018 have been ratified
authorities.
Other Comprehensive Income
Year Ended December
Item
Before tax
Income tax
expense
(benefit)
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit plans
$43,250
($8,650)
Unrealized gain (loss) on financial assets at fair
value through other comprehensive income
(11,208)
-
Share of associates and joint ventures accounted
for using equity method:
Remeasurement of defined benefit plans
20,771
-
Unrealized valuation gain (loss) on financial
assets at fair value through other
comprehensive income
134,412
-
Subtotal
$187,225
($8,650)		 December 31 December 31 December 31 2019
$856,053
48,499
1,343,196
107,190
$2,354,938
by the tax
31,2020
Before tax
$43,250
(11,208)
20,771
134,412
$187,225		 Income tax
expense
(benefit)
($8,650)
-
-
-
($8,650)		 After tax
$34,600
(11,208)
20,771
134,412
$178,575

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

6.38 Other Comprehensive Income

－223－

Items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of foreign
financial statements
Share of associates and joint ventures accounted
for using equity method:
Exchange differences on translation of
foreign financial statements
Gain (loss) on hedging instruments
Subtotal
Recognized in other comprehensive income
Item
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit plans
Unrealized gain (loss) on financial assets at fair
value through other comprehensive income
Share of associates and joint ventures accounted
for using equity method:
Remeasurement of defined benefit plans
Unrealized valuation gain (loss) on financial
assets at fair value through other
comprehensive income
Subtotal
Items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of foreign
financial statements
Share of associates and joint ventures accounted
for using equity method:
Exchange differences on translation of
foreign financial statements
Gain (loss) on hedging instruments
Subtotal
Recognized in other comprehensive income		 $62,132
($30,642)
(155,295)
6,658
47
-
($93,116)
($23,984)
$94,109
($32,634)
Year EndedDecember		 $62,132
($30,642)
(155,295)
6,658
47
-
($93,116)
($23,984)
$94,109
($32,634)
Year EndedDecember		 $31,490
(148,637)
47
($117,100)
$61,475
31, 2019
Before tax
$84,399
(15,997)
17,118
(36,700)
$48,820
($317,854)
(115,884)
(347)
($434,085)
($385,265)		 Income tax
expense
(benefit)
($16,880)
-
-
-
($16,880)
$69,684
3,191
-
$72,875
$55,995		 After tax
$67,519
(15,997)
17,118
(36,700)
$31,940
($248,170)
(112,693)
(347)
($361,210)
($329,270)

－224－

6.39 Earnings (loss) Per Share

Item
A.Basic earnings (loss) per share
Net income (loss) attributable to shareholders of
parent company
Weighted average number of outstanding shares
(thousand shares)
Basic earnings (loss) per share (after tax) (NT$)
B.Diluted earnings (loss) per share
Net income (loss) attributable to shareholders of
parent company
Weighted average number of outstanding shares
(thousand shares)
Impact on employees' compensation (Note)
Weighted average number of ordinary shares
outstanding after dilution (thousand shares)
Diluted earnings (loss) per share (after tax)
(NT$)		 Year Ended December 31 Year Ended December 31
2020
$735,238
1,894,147
$0.39
$735,238
1,894,147
33
1,894,180
$0.39		 2019
($1,401,081)
1,913,327
($0.73)
($1,401,081)
1,913,327
-
1,913,327
($0.73)

(Note) Since the Group offered to settle compensation paid to employees in cash or shares, the Group assumed the entire amount of the compensation would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

6.40 Transactions with Non-controlling Interests

  1. Acquisition of additional equities in subsidiaries 2020:

Between January and December 2020, the Group had purchased in cash additional shares of 0.43% and 0.41% for the subsidiaries, Yieh Hsing Enterprise Co., Ltd. and EMMT System Corporation with $8,733 thousand and $2,271 thousand, resulting in the changes in its shareholding percentage from 56.98% to 57.41% and 78.10% to 78.51%, respectively. Since the said transaction did not change the Group’s control over the said subsidiaries, it is deemed as an equity transaction.

Carrying amount of non-controlling
interests acquired
Capital surplus - consideration paid to
non-controlling interests
Capital surplus - Difference between
consideration and carrying amount of
subsidiaries acquired or disposed		 Yieh Hsing
Enterprise Co.,Ltd.
$10,893
(8,733)
$2,160		 EMMT System
Corporation
$2,485
(2,271)
$214

－225－

2019:

Between January and December 2019, the Group had purchased in cash additional shares of 0.25% for the subsidiaries, Yieh Hsing Enterprise Co., Ltd., with $6,034 thousand, resulting in the changes in its shareholding percentage from 56.73% to 56.98%, respectively. Since the said transaction did not change the Group’s control over the said subsidiaries, it is deemed as an equity transaction.

Carrying amount of non-controlling
interests acquired
Capital surplus - consideration paid to
non-controlling interests
Capital surplus - Difference between
consideration and carrying amount of
subsidiaries acquired or disposed		 Yieh Hsing
Enterprise Co.,Ltd.
$7,170
(6,034)
$1,136

  1. Change in ownership interests in subsidiaries

  2. (1)The sub-subsidiary, Kings Garden International Co., Ltd., issued common stocks in March 2020. After the subscription, the Company’s shareholding increased from 49.28% to 50.12%, Yieh Hsing Enterprise Co., Ltd.’s shareholding reduced from 50.71% to 49.87%, and Shin Phui Steel Corporation’s shareholding remained 0.01%. Since the said transaction did not change the Group’s control over the said subsidiary, it is deemed as an equity transaction.

Subscription in cash
Share of equity of subsidiaries’ net assets
computed using relative equity changes
Recognized changes in ownership
interests in subsidiaries accounted for
using equity method		 Yieh Phui
Enterprise Co.,
Ltd.
($72,100)
70,603
($1,497)		 Yieh Hsing
Enterprise Co.,
Ltd.
$ -
852
$852		 Shin Phui
Steel
Corporation
$ -
1
1

(2)The sub-subsidiary, Great Emperor Hotel Co., Ltd. issued common stocks between June and October 2020. After the subscription, the Company’s shareholding increased from 41.18% to 54.55%, Yieh Hsing Enterprise Co., Ltd.’s shareholding reduced from 58.81% to 45.44%, and Shin Phui Steel Corporation’s shareholding remained 0.01%. Since the said transaction did not change the Group’s control over the said subsidiary, it is deemed as an equity transaction.

Subscription in cash
Share of equity of subsidiaries’ net assets
computed using relative equity changes
Recognized changes in ownership
interests in subsidiaries accounted for
using equity method		 Yieh Phui
Enterprise Co.,
Ltd.
($1,081,500)
1,059,256
($22,244)		 Yieh Hsing
Enterprise Co.,
Ltd.
$ -
12,763
$12,763		 Shin Phui
Steel
Corporation
$ -
5
$ 5

－226－

7. RELATED PARTY TRANSACTIONS

7.1 Parent and ultimate controlling party.

The Company is the ultimate controlling party of the Group.

7.2 Names of related parties and relationship categories

Name of relatedparty
Yieh United Steel Corp.
Yieh Mau Corp.
Asiazone Co., Ltd.
Zheng Xin Security Co., Ltd.
Eliter International Corp.
Unipattern Corporation Co., Ltd.
E-Da Bus Transportation Co., Ltd.
E-DA Tour Bus Co., Ltd.
E-Da Development Corp.
E- Da Visual Effects Company Limited.
E Mau Development Corp.
Yieh Hong Enterprise Co., Ltd.
Yieh Mau Corp.
Li-Hsin Co., Ltd.
Fujian Lian Wei Logistics Co., Ltd.
Fujian Lian De Enterprise Co., Ltd.
Skylark International Hotel Co., Ltd.
Pacific Harbor Stevedoring Corporation
Royal Palace Hong Kong Style
Restaurant Co., Ltd.
Jinghua Commercial Asset Management
Limited
I-Hsiang-Le International Co., Ltd.
Chiao-Ling Leisure Co., Ltd.
New Spring Construction Corp.
E-Da Royal Hotel Company Ltd.
E-Da Hospital
I-Shou University
I-Shou University Internship Center
Long Hua Travel Services Co., Ltd.
I-Shou International School
Yieh Mau International Co., Ltd.
Shin Huo Environmental Engineering
Co., Ltd
Yulin Industrial Co., Ltd
E-Da Cancer Hospital
Guan Ying Enterprise Co., Ltd.
E-Da Dachang Hospital		 Relatedpartycategory
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party

－227－

Zhengzi Technology Co., Ltd Other related party
E-DA Healthcare Preschool Other related party
E-DA Bassinet Monther and Baby Care Other related party
Center
You, Jing-Sheng Other related party
Chen,Yung-Shian Other related party

7.3 Significant transactions with related parties

Balance and transactions between the Company and subsidiaries (i.e., related parties) were eliminated and not disclosed when preparing such consolidated financial statements. Disclosure of related party transactions are as follows:

  1. Operating revenue
Item
Sales revenue
Construction
revenue		 Relatedpartycategory
Associates
Other related parties
Total
Associates
Other related parties
Subtotal
Less: Construction revenue
that are eliminated in
consolidation
Total		 Year Ended December 31
2020
2019
$1,659,929
$3,165,523
898,533
2,134,157
$2,558,462
$5,299,680
$2,023
$5,053
471,628
969,048
$473,651
$974,101
(47,939)
(147,277)
$425,712
$826,824
2020
$1,659,929
898,533
$2,558,462
$2,023
471,628
$473,651
(47,939)
$425,712

  • (a) Selling price to the Group's related parties, including hot rolled steel coils, galvanized steel coils, scraps (bars), etc. and trading terms were the same with those to other customers. Payment terms were within one to two months.

  • (b) Selling price of hot-rolled steel coil and nickel laterite ores to related parties are set by reference to the purchase price of a non-related party as a trading counterparty. Payment term is 3 months.

  • (c) Selling price of carbon steel and steel scraps to related parties were set with reference to the purchase price of a non-related party as a trading counterparty. Payment term is monthly, and closes in 15 days.

  • (d) The construction contracts between the Group and above-mentioned related parties were established at prices negotiated by both parties. Contract proceeds were collected according to the payment terms stated in these contracts. Unless agreed on by both parties, payments cannot be delayed.

  • (e) Since the Group contracted from and sub-contracted to related parties a portion of steel construction engineering at the same time, where the construction engineering belonged to the same project, the accounting treatment of which was deemed the same as such project would have been managed and supervised by other related parties. In 2020 and 2019, the eliminated construction revenue was $47,939 thousand, and $147,277 thousand, respectively.

－228－

2. Purchases

Purchases
Relatedpartycategory
Associate：
Yieh United Steel Corp.
Other related parties
Total		 Year Ended December 31
2020
$3,567,447
3,525,973
$7,093,420		 2019
$4,525,596
1,069,144
$5,594,740

Items purchased by the Group from above related parties were mainly stainless billets, carbon steel billets, Steel plate, cold rolled steel coils, and hot rolled steel coils. The purchase prices are similar to that offered to other suppliers. Payment term is L/C at sight (not significantly different than terms to other suppliers) or T/T before shipment.

  1. Contract assets
Contract assets
Relatedpartycategory
Associates
Other related party:
New Spring construction Corp.
Total
Less: Loss allowance
Total		 December 31
2020
$164
92,604
92,768
-
$92,768		 2019
$3,435
518,380
521,815
-
$521,815
  1. Contract liability
Contract liability
Relatedpartycategory
Associates
Other related party:
New Spring construction Corp.
Others
Total		 December 31
2020
$1,239
38,183
1,091
$40,513		 2019
$-
84,625
1,091
$85,716
  1. Receivables from related parties (excluding loans to related parties and contract assets )
assets )
Item
Notes receivable		 Related party category
Associates
Other related parties
Total
Less: Loss allowance
Net		 December31
2020
$5,604
22
5,626
-
$5,626		 2019
$45
23
68
-
$68

－229－

Item
Accounts receivable
Other receivables		 Relatedpartycategory
Associate:
Asiazone Co., Ltd.
Yieh United Steel Corp.
Other
Other related party：
Fujian Lian Wei Logistics Co., Ltd.
Others
Total
Less: Loss allowance
Net
Associate:
Yieh United Steel Corp.
Others
Other related parties
Total
Less: Loss allowance
Net		 December31 December31
2020
$159,072
25,862
82
-
1,456
186,472
(669)
$185,803
$74,203
88
628
74,919
-
$74,919		 2019
$169,307
446,230
-
173,026
1,899
790,462
(605)
$789,857
$2,134
160
646
2,940
-
$2,940
  1. Payables to related parties (excluded loans from related parties)
6. Payables to related parties (excluded loans from related parties) 6. Payables to related parties (excluded loans from related parties) lated parties) lated parties) lated parties)
December31
Item
Related party category
2020
2019
Notes payable
Associates
$253
$2,638
Other related parties
240
1,159
Total
$493
$3,797
Accounts payable
Associates
$-
$20,525
Other related parties
9,907
6,876
Total
$9,907
$27,401
Other payables
Associates
$105,575
$27,833
Other related parties
28,313
8,628
Total
$133,888
$36,461
Advance receipts
Other related parties
$-
$72
7. Prepayments
December 31
Relatedpartycategory
2020
2019
Other related parties
$113,383
$28,823		 December31
2020
2019
$253
$2,638
240
1,159
$493
$3,797
$-
$20,525
9,907
6,876
$9,907
$27,401
$105,575
$27,833
28,313
8,628
$133,888
$36,461
$-
$72
December 31		 2019
$2,638
1,159
$3,797
$20,525
6,876
$27,401
$27,833
8,628
$36,461
$72
2020
$113,383		 2019
$28,823

－230－

  1. Asset transaction

  2. (1)Acquisition of property, plant and equipment: 2020:

2020:
Type of relatedparty
Other related party：
New Spring Construction Corp.
Associate：
Unipattern Corporation Co., Ltd.
Other		 Transaction target
Construction in progress
(Note 1)
Construction in progress
(Note 2)
Other equipment		 Transaction
amount
$745,001
287,075
1,379

(Note 1) The above-mentioned transaction prices were by reference to appraisal reports offered by professional institutions, and were agreed on by both parties upon negotiation or through price comparison. As of December 31, 2020, the unpaid portion were $10,767 thousand.

(Note 2) The above-mentioned transaction prices were agreed on by both parties upon negotiation. As of December 31, 2020, the unpaid portion were $97,817 thousand.

2019:

2019:
Type of relatedparty
Other related party：
New Spring Construction Corp.
Associates		 Transaction target
Construction in progress
(Note 1)
Other equipment (Note 2)		 Transaction
amount
$997,478
136,381

(Note 1) The above-mentioned transaction prices were by reference to appraisal reports offered by professional institutions, and were agreed on by both parties upon negotiation or through price comparision. As of December 31, 2019, the unpaid portion were $28,262 thousand.

(Note 2) The above-mentioned transaction prices were agreed on by both parties upon negotiation. As of December 31, 2019, the transaction payments were fully paid.

  • (2)Disposal of property, plant and equipment: 2020:
2020:
Type of related party /
Name
Other related party		 Transactiontarget
Transportation
equipment		 Transaction
amount
$215		 Gain or loss on
disposal
$49

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2020, all the transaction amount was fully recovered.

－231－

2019:

2019:
Type of related party /
Name
Associates		 Transaction target
Transportation
equipment		 Transaction
amount
$50		 Gain or loss on
disposal
$42

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2019, all the transaction amount was fully recovered.

(3)Acquisition of investment properties:

2020:

2020:
Type of relatedparty/ Name
Other related party：
New Spring Construction Corp.		 Transaction content
Construction in progress		 Transaction
amount
$14,367

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2020, the unpaid portion was $14,367 thousand.

2019:

2019:
Type of related party / Name
Other related party：
New Spring Construction Corp.		 Transactioncontent
Construction in progress		 Transaction
amount
$8,411

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2019, the transaction price was fully paid.

(4)Disposal of other assets: 2020: None.

2019:

2020: None.
2019:
Type of related party
Associate		 Transactiontarget
26 thousand shares of
E-Da Cultural Creative
Industry Co., Ltd.		 Transaction
amount
$203		 Gain or loss on
disposal
$20

The above-mentioned transaction price of shares was agreed on by both parties upon negotiation with reference to the net worth per share of the investees. As of December 31, 2019, all the transaction amount was fully recovered.

－232－

9. Others

(1)Miscellaneous income

ers
Miscellaneous income
Relatedpartycategory
Associates
Other related parties
Total		 Year Ended December 31
2020
$21,169
538
$21,707		 2019
$21,503
1,088
$22,591

These were mainly technical service income, and sporadic rent income. The rent price was determined by contract and received monthly or quarterly.

(2)Miscellaneous expenses

Miscellaneous expenses
Relatedpartycategory
Associates
Other related parties
Total		 Year Ended December 31
2020
$64,072
94,560
$158,632		 2019
$57,997
118,555
$176,552

These were mainly service charges, export expenses, and not applicable to IFRS 16 of rent expense. The rent price was determined by contract and paid monthly or quarterly.

(3)Construction contracts

  • (a)Construction contracts in progress with related parties as of December 31, 2020 were as follows:
Type of related
party / Name
Associates
Other related party：
New Spring
Construction Corp.		 Name ofconstruction
Door type double host
grab of overhead cranes,
etc.
Above-ground structures
construction for E-Da Asia
Commercial Plaza, etc.		 Total contract
price
$8,596
$3,388,026
(Note)		 contract assets
/liabilities
$164 / $1,239
92,604 / 38,183
  • (b)Construction contracts in progress with related parties as of December 31, 2019 were as follows:
Type of related
party/ Name
Associates
Other related party：
New Spring
Construction Corp.		 Name of construction
Flue pipe installation
construction.
Above-ground structures
construction for E-Da Asia
Commercial Plaza, etc.		 Total contract
price
$12,271
$3,376,861
(Note)		 contract assets
/ liabilities
$3,435 / $ -
518,380 / 84,625

－233－

  • (Note) As stated in Note 7.3.1.(e), where the Group contracts from and subcontracts to related parties the same construction project, the accounting treatment of which is deemed the same as such construction project would have been commissioned to other related parties to manage and supervise.

  • Where the Group participated in the cash offering by related parties and consequently increased its investment are disclosed as follows: 2020:

Investee
Associate：
E Mau Development Crop.
2019:
Investee
Associate：
E-Da Development Crop.
E-Da Bus Transportation Co., Ltd.
E-DA Tour Bus Co., Ltd.		 Investment Increment
Shares
(thousand shares)
Amount
5,504
$55,040
Investment Increase
Shares
(thousand shares)
Amount
27,507
$275,073
1,367
13,669
1,140
11,400		 ShareholdingPercentage ShareholdingPercentage
Before
Offering
After
Offering
0%
25.60%
ShareholdingPercentage		 After
Offering
Shares
(thousand shares)
27,507
1,367
1,140		 Before
Offering
34.38%
17.09%
19.00%		 After
Offering
34.38%
17.09%
19.00%
  1. Part lands of the Group are unable to be registered under the name of the Group.

Type of related party Major transaction Other related parties Some of the Group’s lands recorded as property, plant, and equipment as well as investment properties, are unable to be registered under the name of the Group temporarily and registered under individuals, Chen Yung-Shian (executive vice president of the Company) and You Jing-Sheng (assistant vice financial president of Yieh Hsing subsidiary) due to regulation restriction. Accordingly, the lands are mortgage registered to the Group as safeguard measures.

7.4 Information about remunerations to the major management:

Item
Salary and other short-term employee benefits
Benefits after retirement
Other long-term employee benefits
Termination benefits
Share-based payments
Total		 Year Ended December 31 Year Ended December 31
2020
$103,886
12,866
-
-
-
$116,752		 2019
$91,537
1,578
-
-
-
$93,115

－234－

8. PLEDGED ASSETS

The following assets have been pledged as collateral for long-term and short-term loans:

he following assets have been pledged as collate ral for long-term and short-term loans: ral for long-term and short-term loans:
Item
Pledged demand deposits
Pledged time deposits
Subtotal of other financial assets - current
Pledged demand deposits
Pledged time deposits
Subtotal of other financial assets - noncurrent
Property, plant and equipment (net)
Noncurrent assets held for sale
Right-of-use asset
Investment properties
Investments accounted for using equity
method
Notes receivable and accounts receivable
Total		 December 31
2020
$644,677
132,774
$777,451
$139,740
274,701
$414,441
$23,941,229
159,832
165,047
22,355
1,729,055
358,347
$27,567,757		 2019
$741,017
638,232
$1,379,249
$130,202
402,625
$532,827
$24,934,945
23,342
57,975
502,790
1,415,693
176,523
$29,023,344

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

  • (1) Guarantee notes issued by the Group to banks for loans and purchases performance totaled $49,066,365 thousand, and $49,635,722 thousand as of December 31, 2020 and 2019, respectively.

  • (2) Guarantee notes received by the Group for its contract performance and creditor’s right totaled $176,854 thousand, and $187,662 thousand, as of December 31, 2020 and 2019, respectively.

  • (3) The unused letters of credit as of December 31, 2020, and 2019 are as follows:

Item
L/C Amount		 December 31 December 31
2020
USD20,970
NTD437,122
JPY 1,094,460
EUR 71		 2019
USD19,634
NTD708,194
JPY4,679

  • (4) As of December 31, 2020 and 2019, guarantees provided to banks by the Group for performance and warranty amounted to $49,103 thousand, and $134,679 thousand, respectively.

  • (5) As of December 31, 2020 and 2019, guarantee letters of credit issued by the Group for export business totaled USD9,600 thousand, and USD13,400 thousand, respectively.

  • (6) The Group entered into raw material purchase agreements with suppliers of billets, including JSPL and EAST, etc. The price was agreed on by both parties upon negotiation. As of December 31, 2020, the unperformed portion totaled 20,150 tons, amounting to $280,670 thousand.

－235－

(7) Capital expenditures committed but not yet incurred are as follows:

December 31

Item 2020 2019 Property, plant and equipment $1,908,014 $3,619,656

(8) Establishment of important construction contracts

(a) As of December 31, 2020, estimated total contract costs, contract costs paid, and expected completion dates but not completed are summarized below:

Type of construction Contract price
/Total estimated
construction cost		 Construction
cost paid
/Completion %		 Expected year of
completion /Accumulated
profit or loss recognized
Manufacture and
installation of overhead
cranes sized
300t(150t+150t)*43m
for the Wind Power
Department of Century
Iron and Steel Industrial
Co.,Ltd.		 205,000
171,912		 166,713
96.98%		 Year 2021
32,087
6 40T-gantry cranes for
storage in the rear area at
Wharf No. 120 of
KaohsiungHarbor		 311,100
260,717		 259,326
99.47%		 Year 2021
50,114
Construction of phase 1
Pangu buildings by
Greaten Construction
Co.,Ltd.		 220,807
207,766		 194,406
93.57%		 Year 2021
12,202
Manufacturing and
installation of 13
overhead cranes, their
steel tracks and safety
electric bus-way for
GMTC steel furnace
plant atLiuying		 313,600
307,704		 261,376
84.94%		 Year 2021
5,008
Development project
phase 1 of district C of
the core area of Shalun
Smart Green Energy
Science City by Reiju
Construction		 260,203
257,273		 248,773
96.70%		 Year 2021
2,833
Steel structure
engineering construction
of E-Da Empire
Buildings by New
Spring Construction
Corp.		 1,320,433
1,280,441		 1,176,100
91.85%		 Year 2021
36,733

－236－

New Construction of
New Crystal Section of
Tainan City by Dongpu
Construction		 207,251
196,791		 174,345
88.59%		 Year 2021
9,268
Manufacturing and
installation of 14
overhead cranes, and
safety electric bus-way
by CSBC Corporation
Taiwan		 170,567
165,017		 123,319
74.73%		 Year 2021
4,148
TSMC’s R&D Center
Phase I Office building
B production project in
hsin - chu science park
by Tung Ho Steel
Enterprise Corp.		 190,546
172,309		 35,252
20.46%		 Year 2022
3,731

(b) As of December 31, 2019, estimated total contract costs, contract costs paid, and expected completion dates but not completed are summarized below:

Type of construction Contract price
/Total estimated
construction cost		 Construction
cost paid
/Completion %		 Expected year of
completion /Accumulated
profit or loss recognized

Construction and
installation of 40T*42M
tracked overhead
container crane for
China Container
Transport at pier 10 and
11 of Taichung Harbor		 202,300
205,019
204,853
99.92%
Year 2020
(2,716)
Manufacture and
installation of overhead
cranes sized
300t(150t+150t)*43m
for the Wind Power
Department of Century
Iron and Steel Industrial
Co., Ltd.		 205,000
200,458		 156,173
77.91%		 Year 2020
3,539
6 40T-gantry cranes for
storage in the rear area
at Wharf No. 120 of
Kaohsiung Harbor		 311,100
260,717		 259,208
99.42%		 Year 2020
50,091

Construction of phase 1
Pangu buildings by
Greaten Construction
Co., Ltd.		 220,807
224,596		 185,857
82.75%		 Year 2020
(3,789)
Manufacturing and
installation of 13
overhead cranes, their
steel tracks and safety
electric bus-way for
GMTC steel furnace
plant at Liuying		 313,600
312,494		 227,278
72.73%		 Year 2020
804

－237－

YKK Taiwan's Chungli
Plant No.2 construction
project by Chung Lu
Construction		 341,610
335,419		 317,844
94.76%		 Year 2020
5,867
Development project
phase 1 of district C of
the core area of Shalun
Smart Green Energy
Science City by Reiju
Construction		 261,804
260,244		 247,754
95.20%		 Year 2020
1,485
Steel structure
engineering construction
of E-Da Empire
Buildings by New
Spring Construction
Corp.		 1,320,433
1,280,441		 779,886
60.91%		 Year 2020
24,358
New Construction of
New Crystal Section of
Tainan City for Dongpu
Construction		 203,675
200,918		 45,632
22.71%		 Year 2020
626
Manufacturing and
installation of 14
overhead cranes, and
safety electric bus-way
for CSBC Corporation
Taiwan		 170,567
165,017		 18,659
11.31%		 Year 2020
628

  • (9) Great Emperor Hotel Co., Ltd. and Kings Garden International Co., Ltd., two subsidiaries, entered into the syndicated loan agreements with Land Bank of Taiwan and First Commercial Bank in August 2014. Yieh United Steel Corp., Yieh Phui Enterprise Co., Ltd., and Yieh Hsing Enterprise Co., Ltd. issued a commitment letter before the first use that the Company and its related parties shall jointly hold more than 50% of Kings Garden International Co., Ltd. and Great Emperor Hotel Co., Ltd.’s issued shares and gain the majority of directors' seats at all times. The Group held 100% of Kings Garden International Co., Ltd. and Great Emperor Hotel Co., Ltd. and acquired all directors' seats of both companies as of December 31, 2020.

  • (10) In December, 2020, the Group sold part of Land in Pingnan Section, Fangliao Township, Pingtung County. The total contract price is $699,980 thousand, from which the expected disposal gain of $540,116 thousand is derived. The abovementioned transaction price is determined by both parties upon negotiation by reference to the appraisal report made by Evermore Valuation Real Estate Appraisal Firm. As of December 31, 2020, contract deposits of $70,070 thousand have been collected. The ownership transfer will be completed in accordance with the scheduled payment terms as stipulated in the contracts.

10. SIGNIFICANT DISASTER LOSS:NONE.

11. SIGNIFICANT SUBSEQUENT EVENTS:NONE.

－238－

12. OTHERS

(1) Capital risk management

As the Group needs to maintain sufficient capital to meet the needs for expansion and plant and equipment improvement, capital management of the Group focuses on ensuring there are sufficient financial resources and operating plans to meet the demands for operating capital, capital expenditure, research and development expense, loan repayment and dividend distribution in the next 12 months.

(2) Financial Instruments

  1. Financial risk of financial instruments

The Group’s daily operations are affected by various financial risks, e.g. market risk (including exchange rate, interest rate and price risks), credit risk and liquidity risk. The Group is devoted to identify, assess and avoid market uncertainties in order to eliminate the potential adverse effects of market changes on the financial performance.

Before engaging in significant transactions, due approval process by the Board of Directors must be carried out based on related protocols and internal control procedures. While the financial plan is underway, the Group shall comply with relevant financial operation procedures on the overall financial risk management and segregation of duties at all times.

The nature and degree of significant financial risks

  • A. Market risks

  • (A)Foreign exchange rate risk

The Group is exposed to exchange rate risk arising from the sales, purchases and borrowings in currencies other than the Group’s functional currency, as well as from net investment of foreign operations. Functional currencies adopted by entities within the Group mainly comprise New Taiwan Dollars, RMB, USD, and IDR. However, such transactions are denominated mainly in RMB and USD. To avoid a decrease in the value of assets dominated in foreign currency and volatility in future cash flows due to changes in exchange rates, the Group hedges the exchange rate risk with foreign-currency borrowings and derivative financial instruments .Those derivative financial instruments can diminish but not completely eliminate the impacts of changes in exchange rate. As net investments in foreign operations are for strategic purposes, they are not hedged by the Group.

－239－

a. Exchange rate exposure and sensitivity analysis

Amount
in Foreign
Currency
(Foreign currency: Functional currency)
Financial assets
Monetaryitems
USD:NTD
53,635
USD:RMB
22,968
EUR:USD
3,683
Investments
accounted for using
equitymethod
USD:NTD
25,620
Financial liabilities
Monetaryitems
USD:NTD
29,640
USD:RMB
126,571
EUR:RMB
3,669
EUR:USD
3,666
Amount
in Foreign
Currency
(Foreign currency: Functional currency)
Financial assets
Monetaryitems
USD:NTD
48,250
USD:RMB
24,564
EUR:USD
4,323
USD:IDR
3,322
Investments
accounted for using
equitymethod
USD:NTD
24,737
Financial liabilities
Monetaryitems
USD:RMB
120,368
EUR:RMB
4,316		 Exchange
rate		 December31,2020 December31,2020 December31,2020
Presented
amount
(New Taiwan
Dollars)
1,533,891
654,169
129,005
729,644
844,145
3,604,751
128,531
128,394		 SensitivityAnalysis
Range
of
change
Up 1%
Up 1%
Up 1%
Up 1%
Up 1%
Up 1%
Up 1%
Up 1%
December31,		 Effects on
profit or
loss
15,339
6,542
1,290
-
(8,441)
(36,048)
(1,285)
(1,284)
2019		 Effects
on
Equity
28.48
6.5294
1.2299
28.48
28.48
6.5294
8.025
1.2299
Exchange
rate		 -
-
-
7,296
-
-
Presented
amount
(New Taiwan
Dollars)
1,446,787
736,427
145,181
101,641
741,614
3,608,632
144,977		 SensitivityAnalysis
Range of
change
Up 1%
Up 1%
Up 1%
Up 1%
Up 1%
Up 1%
Up 1%		 Effects on
profit or
loss
14,468
7,364
1,452
1,016
-
(36,086)
(1,450)		 Effects
on
Equity
29.98
6.9762
1.1203
13,924.50
29.98
6.9762
7.8155		 -
-
-
7,416
-
-

If NTD appreciates against the above-mentioned currencies, held all other variables constant, the impact generated as of December 31, 2020 and 2019 would stay the same with the reverse result.

－240－

Note: Referring to non-functional currency of the respective consolidated entities denominated in foreign currency, including inter-group transaction items that have been written off, and exchange risks that can not be fully written off.

  • b. Due to the exchange rate volatility, total exchange gains and losses (including realized and unrealized) from the Group’s monetary items amounted to $112,947 thousand and ($71,202) thousand for the years ended December 31, 2020 and 2019, respectively.

  • (B) Price risk

Since the Group’s investment in securities is classified as financial assets at FVTPL or financial assets at FVTOCI on the consolidated balance sheet, the Group does not expose to price risks of securities. The Group mainly invests in domestic listed and unlisted stocks and beneficiary certificates. The price of such securities can be affected by changes in future value of those investment targets.

If the security price goes up or down by 1%, the post-tax profit or loss for the year 2020 and 2019 will increase or decrease by $6,980 thousand and $7,098 thousand due to the increase or decrease of the fair value of financial assets measured at FVTPL. The post-tax other comprehensive income for the year 2020 and 2019 will increase or decrease by $7,253 thousand and $7,099 thousand due to the increase or decrease of the fair value of financial assets measured at FVTOCI.

  • (C) Interest rate risk

The carrying amount of the Group’s financial assets and financial liabilities that are exposed to interest rate risk at the reporting date is stated as follows:

follows:
Item
With fair value interest rate risk
Financial assets
Financial liabilities
Net
With cash flow interest rate risk
Financial assets
Financial liabilities
Net		 CarryingAmount
December 31,2020
$1,223,521
(1,371,285)
($147,764)
$3,705,050
(48,809,395)
($45,104,345)		 December 31,2019
$1,385,094
(1,020,554)
$364,540
$5,523,436
(49,966,792)
($44,443,356)

a. Sensitivity analysis of those with fair value interest rate risk: The Group classifies its investment in preferred stocks with fixed income as financial assets measured at FVTPL. Fair value of such preferred stock investment changes in line with the interest rate changes in the market. If the market interest rate goes up 1% and other variables are held constant, the profit or loss for the year 2020 and 2019 will increase or decrease by $2,436 thousand and $8,101 thousand, respectively.

－241－ 

  - b. Sensitivity analysis of those with cash flow interest rate risk: The interest-fluctuate instruments possessed by the Group were floatinginterest assets (liabilities). Therefore the effective interest rate, as well as the future cash flows, changes along with the market movement. Every one percent reduce (increase) in the market interest will increase (decrease) the net profit by ($451,043) thousand and ($444,434) thousand for the years 2020 and 2019, respectively.

  • B.Credit risk

  • Credit risk refers to the risk of financial loss to the Group arising from default by counter-parties of financial instruments on the contract obligations. Credit risk of the Group mainly comes from receivables under operating activities and bank deposits and other financial instruments under investing activities. Credit risks related to operation and finance risks are managed separately. Credit risk related to operations

To maintain the quality of accounts receivable, the Group has established the procedures for credit risk management with regards to its operations. Risk assessment on individual customer includes factors that could affect the customer's ability to pay, such as the customer's financial status, the Group’s internal credit ratings, historical transactions and current economic conditions. Financial credit risk

The credit risks of bank deposits and other Financial instruments are measured and monitored by the Group’s financial departments. The Group does not expect significant credit risk because the counterparties are creditworthy and investment-graded financial institutions, companies and government agencies without any significant default concerns. In addition, the Group does not have any debt instrument investments that are either measured at amortized cost, or at FVTOCI.

  • (A) Credit concentration risk

As of December 31, 2020 and 2019, the top ten clients accounted for 48.61% and 45.14% of the Group’s accounts receivable, indicating a credit concentration risk. However, no significant credit concentration risk was shown from the remaining accounts receivables.

  • (B) Measurement of expected credit impairment loss

  • a. Accounts receivables and contract assets apply the simplified approach. Please refer to Note 6.4. and Note 6.31. for details.

  • b. Indications for determining whether the credit risk is increased significantly: None (the Group does not have any debt instrument investments that are either measured at amortized cost, or at FVTOCI).

  • c. Collaterals and other credit enhancement held to avoid credit risks from financial assets

    • The following table shows the maximum exposure to credit risk regarding financial assets recognized in the consolidated balance sheets, pledged collateral, master netting arrangements and other credit enhancement held by the Group:

－242－

Decreased amount of maximum exposure to credit risks
Carrying Net Settlement Other Credit
December31,2020 Amount Collateral Agreement Enhancement Total
Credit-impaired financial $- $- $- $- $-
instruments to which
impairment requirements
of IFRS9 are applicable
Financial instruments to
which the impairment
requirements of IFRS 9
are not applicable:
Financial assets at fair 697,978 - - - -
value through profit and
loss
Financial assets 725,334 - - - -
measured at FVTOCI
Total $1,423,312 $- $- $- $-
December31,2019
Credit-impaired financial
instruments to which
impairment requirements
of IFRS9 are applicable
Financial instruments to
which the impairment
requirements of IFRS 9
are not applicable:
Financial assets at fair
value through profit and
loss
Financial assets
measured at FVTOCI
Total		 Carrying
Amount
$16,699
717,568
709,886
$1,427,454		 Decreased amount of maximum exposure to credit risks amount of maximum exposure to credit risks amount of maximum exposure to credit risks
Collateral
$-
-
-
$-		 Net Settlement
Agreement
$-
-
-
$-		 Other Credit
Enhancement
$-
-
-
$-		 Total
$-
-
-
$-

C.Liquidity risk

(A) Overview

The Group’s objecting in managing liquidity risk is to maintain a sufficient level of cash and cash equivalents, highly-liquid marketable securities and credit lines with banks for daily operations in order to ensure the financial flexibility of the Group.

  • (B) The table below shows an analysis of the financial liabilities held by the Group with defined repayment terms based on maturity dates and undiscounted payment at maturity:

－243－

Non-derivative financial
Liabilities		 December 12,2020 December 12,2020 December 12,2020
Within 6
months		 7-12 months 1-2 years 2-5 years Over 5
years
$ -
-
-
-
-
53,440
11,826,625
5,885
$11,885,950
$-		 Contractual
cash flows
$ 14,925,307
1,292,000
469,760
995,914
1,753,874
97,247
33,979,990
18,685
$53,532,777
$14,495		 Carrying
amount
Short-term loans
Short-term notes and bills
payable
Notes payable
Accounts payable
Other payables
Lease liabilities
(including current)
Long-term loans
(including
current portion)
Guarantee deposits
Received
Subtotal
Derivative financial
liabilities		 $ 12,089,375
1,292,000
469,760
995,914
1,753,874
4,198
3,005,392
1,211		 $2,835,932
-
-
-
-
5,721
2,329,412
1,131		 $ -
-
-
-
-
8,992
7,745,904
3,272		 $ -
-
-
-
-
24,896
9,072,657
7,186		 $ 14,925,307
1,289,365
469,760
995,914
1,753,874
81,920
33,884,088
18,685
$19,611,724 $5,172,196 $7,758,168 $9,104,739 $53,418,913
$14,495 $- $- $- 14,495
Cross currency swap
contracts

Further information on lease liability maturity analysis is as follows:

Lease liabilities
Non-derivative financial
Liabilities		 Less than 1 year
1-5 years
$33,888		 5-10 years 10-15 years
$12,278		 10-15 years
$12,278		 Over 20 years
$15,673		 Total
undiscounted
leasepayments
$9,919 $13,211 $97,247
Within 6
months		 7-12 months 1-2 years 2-5 years Over 5
years
$ -
-
-
-
-
62,343
7,235,780
3,131
$7,301,254		 Contractual
cash flows
$ 15,597,746
934,000
799,965
1,188,827
1,651,603
107,319
34,478,493
17,533
$54,775,486		 Carrying
amount
Short-term loans
Short-term notes and bills
payable
Notes payable
Accounts payable
Other payables
Lease liabilities
(including current)
Long-term loans
(including
current portion)
Guarantee deposits
Received
Subtotal		 $ 13,978,543
934,000
799,785
1,188,827
1,651,603
5,766
3,223,243
2,026		 $1,619,203
-
180
-
-
3,310
3,151,262
1,845		 $ -
-
-
-
-
9,279
8,168,322
559		 $ -
-
-
-
-
26,621
12,699,886
9,972		 $ 15,597,746
931,272
799,965
1,188,827
1,651,603
89,282
34,369,046
17,533
$21,783,793 $4,775,800 $8,178,160 $12,736,479 $54,645,274

Further information on lease liability maturity analysis is as follows:

Lease liabilities Less than 1 year
1-5 years
$35,900		 5-10 years 10-15 years
$12,278		 15-20
years
$12,278		 Over 20 years
$19,397		 Total
undiscounted
leasepayments
$9,076 $18,390 $107,319

The Group does not expect a maturity analysis of which the cash flows timing would be significantly earlier, or the actual amount would be significantly different.

－244－

2. Types of Financial instruments

Financial assets
Financial assets measured at amortized cost
Cash and cash equivalents
Notes receivables and accounts receivables
(including related parties)
Other receivables(including related parties)
Other financial assets - current
Refundable deposits
Other financial assets - noncurrent
Financial assets at fair value through profit or loss
- current
Financial assets at fair value through profit or loss
- noncurrent
Financial assets at fair value through other
comprehensive income or loss - noncurrent
Financial liabilities
Financial liabilities measured at amortized costs
Short-term loans
Short-term notes and bills payable
Notes receivables and accounts payable
(including related parties)
Other payables (including related parties)
Long-term loans (including current portion)
Guarantee deposits
Lease liabilities (including due within one year)
Financial liabilities at fair value through profit or
loss - current		 December31 December31
2020
$3,730,782
2,619,438
207,127
807,846
222,895
414,441
697,978
-
725,334
14,925,307
1,289,365
1,465,674
1,753,874
33,884,088
18,685
81,920
14,495		 2019
$5,023,717
3,318,115
193,409
1,405,930
925,853
532,827
428,279
289,289
709,886
15,597,746
931,272
1,988,792
1,651,603
34,369,046
17,533
89,282
-

(3) Fair Value Information:

  1. For information on fair value of financial assets and financial liabilities not measured at fair value, please refer to Note 12(3)3.For fair value of investment property measured at cost, please refer to Note 6.14. For fair value of investments in associates with quoted prices in an open market, please refer to Note 6.11

  2. Definition of the three levels in fair value:

  3. Level 1:

Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks, beneficiary certificates, on-the-run Taiwan central government bonds and derivative instruments with quoted market prices is included in Level 1.

－245－

Level 2

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Company’s investment in off-the-run government bonds, corporate bonds, bank debentures, convertible bonds and most derivative instruments is included in Level 2. Level 3

Unobservable inputs for the asset or liability. The fair value of the Group’s investment in certain derivative instruments, equity investment without active market and investment property is included in Level 3.

  1. Financial instruments not measured at fair value

  2. Management of the Group thinks that the carrying amount of financial instruments not measured at fair value, including cash and cash equivalents, accounts receivables, other financial assets, refundable deposits, short term loans, short-term bills payable, accounts payable, lease liabilities (including current and noncurrent), long-term loans (including current portion), and guarantee deposits received, is the reasonable approximation of their fair value.

  3. Fair value hierarchy:

The fair value hierarchy of financial instrument is measured at fair value on a recurring basis. Information about the Group’s fair value hierarchy is disclosed in the following table:

the following table:
Item
Assets:
Recurringfairvalue
Financial assets at fair value
through profit or loss
Non-derivative financial assets
held for trading
Domestic unlisted stocks
Financial assets measured at
FVTOCI
Domestic unlisted stocks
Domestic listed stocks
Total
Liabilities:
Recurringfair value
Financial liabilities at fair value
through profit or loss
Derivative financial instruments		 December31,2020
Level 1
$35,327
-
-
29,789
$65,116
$-		 Level 2
$ -
-
-
-
$-
$14,495		 Level 3
$ -
662,651
695,545
-
$1,358,196
$-		 Total
$35,327
662,651
695,545
29,789
$1,423,312
$14,495

－246－

Item
Assets:
Recurringfair value
Financial assets at fair value
through profit or loss
Non-derivative financial assets
held for trading
Domestic unlisted stocks
Derivative financial instruments
Financial assets measured at
FVTOCI
Domestic unlisted stocks
Domestic listed stocks
Total		 December 31,2019 December 31,2019
Level 1
$43,769
-
-
-
33,885
$77,654		 Level 2
$10,004
-
7,755
-
-
$17,759		 Level3
$ -
656,040
-
676,001
-
$1,332,041		 Total
$53,773
656,040
7,755
676,001
33,885
$1,427,454

  1. Fair value valuation technique for instruments measured at fair value: (1) The fair value of financial instruments with quoted prices in active markets is the quoted market prices. Market prices published by major trading centers and exchanges for on-the-run government bonds are the basis for the fair value of listed equity instruments and debt instruments with quoted prices in active markets. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. If one of the conditions fails, the market is not deemed active. In general, indications of an inactive market include a wide bid-ask spread, a significant increase in the bid-ask spread and low level of trading volume. The fair value of financial instruments with active markets held by the Group are stated by their natures and types as follows:

  2. a. Listed stocks: closing prices

b. Open-end funds: net worth

  • (2) Except for financial assets with an active market, the fair value of other financial assets is obtained either based on the valuation technique or by reference to the quotes from counter-parties. Fair value can be obtained by using a valuation technique that refers to the fair value of financial instruments having substantially the same terms and characteristics, the discounted cash flow method, or other valuation technique e.g. the one that applies market information available on the balance sheet date to a pricing model for calculation.

The fair value of the Group’s holding of unlisted stocks for which no active market exists is estimated by using the market approach, which refers to the valuation of similar entities, quoted prices from a third party, the net worth of an entity and the operating performance. In addition, the significant unobservable inputs mainly comprise liquidity discount, in which the possible changes would not result in a potentially material financial effect. Therefore, the Group does not disclose the quantitative information.

－247－

  • (3) When evaluating financial instruments that are non-standard and with lower complexity, e.g. debt instruments with no active markets, interest rate swaps, foreign exchange swaps and options, the Group adopts valuation techniques that are commonly used by market participants. The parameters used in the valuation models for those financial instruments are normally observable data in the market.

  • (4) Valuation of derivative financial instruments adopts valuation models that are commonly used by market participants, e.g. discounted cash flows method and option pricing model.

  • (5) Outputs from the valuation models are estimates and valuation techniques may not be able to reflect all relevant factors of the financial and nonfinancial instruments held by the Group. Therefore, when needed, estimates from the valuation model would be adjusted based on additional parameters, e.g. model risk or liquidity risk. According to the Group's policies of fair value valuation management and relevant control procedures, the Group's management considers that valuation adjustments as being necessary and appropriate for a fair and just presentation of financial and non-financial instruments on the individual balance sheet. Every price data and parameters used in the valuation is reviewed thoroughly and adjusted for current market conditions.

  • (6) The Group incorporates the adjustment of credit risk assessment into the fair value measurement of financial and non-financial instruments to reflect the credit risk of counter-party and the credit quality of the Group.

  • Transfers between Level 1 and Level 2 fair value hierarchy: None

  • Statement of changes in Level 3 fair value hierarchy:

Item
Beginning balance
Addition
Disposal
Redemption of preferred stock
Proceeds from capital reduction
Recognized in profit and loss
Recognized in other comprehensive income
Ending balance		 Investment in unquoted
financial instruments		 Investment in unquoted
financial instruments
Year EndedDecember31
2020
$1,332,041
58,620
(15,876)
-
(16,087)
6,611
(7,113)
$1,358,196		 2019
$1,905,843
15,000
-
(550,145)
(4,234)
(15,590)
(18,833)
$1,332,041
  1. Valuation process for Level 3 fair value measurement: Valuation process regarding fair value Level 3 is conducted by the Group’s finance department, by which the independence of fair value of financial instruments is verified though use of independent data source in order to make the valuation results close to market conditions. Such valuation results are regularly reviewed so as to ensure their reasonableness.

－248－

(4) Transfer of financial assets:

  1. Transferred financial assets fully derecognized

The Group entered into accounts receivable factoring agreement with Chang Hwa Bank. According to the contract, the Group does not bear the risk of default over the transferred accounts receivables but only the loss from trade disputes. As the Group did not have any continued participation over those transferred accounts receivables, they were derecognized from the accounts. Information on outstanding receivables is as follows: December 31, 2020：

Counter-party
Chang Hwa Bank		 Factoring
Amount
$-		 Amount
Collected
in Cash
-		 Advance
Amount -
End of the
Period
$-		 Annual Interest
Rate for the
Advance
Amount
-		 Line of Credit
EUR 3,200

December 31, 2019：

Counter-party
Chang Hwa Bank		 Factoring
Amount
$27,884
(EUR 829)		 Amount
Collected
in Cash
-		 Advance
Amount -
End of the
Period
$25,096
(EUR 746)		 Annual Interest
Rate for the
Advance
Amount
1.16464%		 Line of Credit
EUR 3,200
  1. Transferred financial assets not fully derecognized: None

(5) Offsetting financial assets and financial liabilities: None.

13. SUPPLEMENTARY DISCLOSURES

  • A. Significant transactions information

  • (a)Financing provided to others (Table 1)

  • (b)Endorsements/guarantees provided (Table 2)

  • (c)Marketable securities held (excluding investments in subsidiaries and associates) (Table 3)

  • (d)Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (Table 4)

  • (e)Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (Table 5)

  • (f)Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (Table 6)

  • (g)Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 7)

  • (h)Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 8)

  • (i)Trading in derivative instruments (Note 6.2)

  • (j)The business relationship between the parent and the subsidiaries and significant transactions between them(Table 9)

  • B. Information on investees (Table 10)

  • C. Information on investments in mainland China (Table 11)

  • D. Information of major shareholders: List all shareholders with a stake of 5 percent or greater in shareholding percentage and the number of shares. (Table 12)

－249－

TABLE 1

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Financing provided to others For The Year Ended December 31, 2020

Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency
No. Creditor Borrower General
ledger
account		 Related
party		 Maximum
outstanding
balance for
the period		 Ending
balance		 Amount
actually
drawn		 Interest
rate		 Nature
of
loan		 Transaction
amount		 Reason
for
short-term
financing		 Allowance
for
doubtful
accounts		 Collateral Limit on loans
granted to
a single party		 Ceiling on
total loans
granted
Item Value
0 Yieh Phui
Enterprise Co.,
Ltd.		 United Brightening
Development Corp.		 Other
receivables -
relatedparty		 Y 65,000 － － 2.25% 2 － Operating
capital		 － － － 10,587,684
(Note 3)		 10,587,684
(Note 3)
1 Yieh Phui (Hong
Kong) Holdings
Limited		 Yieh Phui (China)
Technomaterial Co.,
Ltd.		 Long-term
receivable –
related party and
Other
receivables -
relatedparty
Y		 3,893,985
(RMB20,160)
(USD121,240)
(EUR 4,300)		 2,258,176
(RMB 6,930)
(USD 73,733)
(EUR 3,655)		 2,258,176
(RMB 6,930)
(USD 73,733)
(EUR 3,655)		 2.00%-
7.69%		 2 － Operating
capital		 － － － 10,587,684
(Note 3)		 10,587,684
(Note 3)
2 Yieh Phui (China)
Technomaterial
Co.,Ltd.		 Tianjin Lianfa
Precision Steel
Corporation		 Long-term
receivable –
relatedparty		 Y 109,260
(RMB 25,000)		 109,120
(RMB 25,000)		 109,120
(RMB 25,000)		 4.00% 2 － Operating
capital		 － － － 10,587,684
(Note 3)		 10,587,684
(Note 3)
3 Good Honor
Holdings Ltd.		 Yieh Phui (Hong
Kong) Holdings
Limited		 Long-term
receivable –
relatedparty		 Y 136,125
(USD 4,500)		 － － － 2 － Operating
capital		 － － － 10,587,684
(Note 3)		 10,587,684
(Note 3)
4 Shin Yang Steel
Co., Ltd.		 Yieh Phui (Hong
Kong) Holdings
Limited		 Other
receivables -
relatedparty		 Y 351,482
(USD 12,200)		 176,576
(USD 6,200)		 176,576
(USD 6,200)		 2.00%-
4.00%		 2 － Operating
capital		 － － － 333,274
(Note 2)		 333,274
(Note 1)
5 Applied Wireless
Identifications Group,
Inc.		 Yieh Phui (Hong
Kong) Holdings
Limited		 Other
receivables -
relatedparty		 Y 66,550
(USD 2,200)		 62,656
(USD 2,200)		 62,656
(USD 2,200)		 2.00%-
4.00%		 2 － Operating
capital		 － － － 92,373
(Note 2)		 92,373
(Note 1)
6 Shin Phui Steel
Corporation		 Sin Bang Investment
& Development Co.,
Ltd.		 Other
receivables -
relatedparty		 Y 11,340 － － 2.00% 2 － Operating
capital		 － － － 100,172
(Note 2)		 100,172
(Note 1)

(Note 1) The maximum amount of total loans to others shall not exceed 40% of the creditor's net worth.

(Note 2) The maximum amount of loans granted to a single entity shall not exceed 40% of the creditor's net worth.

(Note 3) Total loans between foreign entities that are 100% owned directly or indirectly by the Company shall not exceed 40% of the Company’s net worth and loans to a single entity shall not exceed 40% of the Company’s net worth.

(Note 4) Nature of loans is classified as follows: Entities having business relations with the Company is ‘1’; entities with needs for short-term financing is ‘2’.

(Note 5) Transactions between the aforesaid subsidiaries and the parent company have been written off.

－250－

TABLE 2

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Endorsements/guarantees provided For The Year Ended December 31, 2020

Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency
No. Endorser/
guarantor		 Party being endorsed/guaranteed Limit on
endorsement/
guarantees
provided for a
single party		 Maximum
balance for the
period		 Ending balance Amount
actually drawn		 Amount of
endorsement/
guarantees
collateralized
by properties


Ratio of
accumulated
endorsement/
guarantee to
net equity per
latest financial
statement		 Maximum
endorsement/
guarantee
allowable		 Guarantee
provided by
parent
company to
subsidiary		 Guarantee
provided by
a subsidiary
to parent
company		 Guarantee
provided to
subsidiaries
in Mainland
China
Company
name		 Relationship with
the endorser/
guarantor
0 Yieh Phui
Enterprise Co.,
Ltd. (Note 1)		 Yieh Phui (China)
Technomaterial Co.,
Ltd.		 Investee of the
Company’s
Sub-subsidiary		 26,469,211 6,500,970
(RMB 1,487,500)		 6,492,640
(RMB 1,487,500)		 1,473,120
(RMB 337,500)		 － 24.53% 26,469,211 Y － Y
Shin Yang Steel Co.,
Ltd.		 Subsidiary of the
Company		 26,469,211 1,236,000 1,236,000 769,950 336,000 4.67% 26,469,211 Y － －
Yieh Phui (Hong
Kong) Holdings
Limited		 Subsidiary of the
Company		 26,469,211 5,687,000
(USD 188,000)		 3,446,080
(USD 121,000)		 2,101,536
(USD 68,233)
(RMB 6,930)
(EUR 3,655)
－		 13.02% 26,469,211 Y － －
1 Shin Phui Steel
Corporation
(Note 2)		 Yieh Phui Enterprise
Co., Ltd.		 Parent company of
the company		 1,252,190 942,230 942,230 942,230 942,230 376,.23% 1,252,190 － Y －
2 Kings Garden
International Co.,
Ltd. (Note 3)		 Great Emperor Hotel
Co., Ltd.		 (Note 10) 30,626,362 8,175,000 8,175,000 7,396,000 8,175,000 186.85% 30,626,362 － － －
3 Great Emperor
Hotel Co., Ltd.
(Note 4)		 Kings garden
International Co., Ltd.		 (Note 10) 31,979,764 7,583,000 7,583,000 6,821,000 7,583,0000 165.98% 31,979,764 － － －
4 Shin Yang Steel
Co., Ltd. (Note 6)		 Yieh Phui Enterprise
Co., Ltd.		 Parent company of
the company		 2,499,554 900,000 900,000 420,000 900,000 108,02% 2,499,554 － Y －
5 Yieh Phui (China)
Technomaterial
Co., Ltd. (Note 5)		 Tianjin Lianfa
Precision Steel
Corporation		 Subsidiary of the
Company		 9,555,471 43,398
(RMB 9,930)		 43,342
(RMB 9,930)		 43,342
(RMB 9,930)		 － 0.45% 9,555,471 Y － Y
6 Champion
Logistic Inc.
(Note 7)		 Yieh Phui (Hong
Kong) Holdings
Limited		 The same ultimate
parent company		 5,322
(USD 187)		 484,000
(USD 16,000)		 － － － － 5,322
(USD 187)		 － － －
7 Sin Bang
Investment &
Development Co.,
Ltd.(Note 8)		 United Brightening
Development Corp.		 The same ultimate
parent company		 465,909 200,000 200,000 200,000 200,000 85.85% 465,909 － － －

－251－

  • (Note 1): The maximum amount of endorsement/guarantee provided by the Company shall not exceed the Company’s net worth. The same limit applies to the endorsement/guarantee provided by the Company to a single subsidiary.

  • (Note 2): The maximum amount of endorsement/guarantee provided by Shin Phui Steel Corporation shall not exceed 5 times of Shin Phui’s net worth. The same limit applies to the endorsement/guarantee provided by Shin Phui Steel Corporation to a single entity.

  • (Note 3): The maximum amount of endorsement/guarantee provided by Kings Garden International Co., Ltd. shall not exceed 7 times of Kings Garden’s net worth. The same limit applies to the endorsement/guarantee provided by Kings Garden International Co., Ltd. to a single entity.

  • (Note 4): The maximum amount of endorsement/guarantee provided by Great Emperor Hotel Co., Ltd. shall not exceed 7 times of Great Emperor Hotel’s net worth. The same limit applies to endorsement/guarantee provided by Great Emperor Hotel Co., Ltd. to a single entity.

  • (Note 5): The maximum amount of endorsement/guarantee provided by Yieh Phui (China) Technomaterial Co., Ltd. shall not exceed the net worth of Yieh Phui (China) Technomaterial Co., Ltd. The same limit applies to the endorsement/guarantee provided Yieh Phui (China) Technomaterial Co., Ltd. to a single subsidiary.

  • (Note 6): The maximum amount of endorsement/guarantee provided by Shin Yang Steel Co., Ltd. shall not exceed 3 times of Shin Yang’s net worth. The same limit applies to the endorsement/guarantee provided by Shin Yang Steel Co., Ltd. to a single entity.

  • (Note 7): The maximum amount of endorsement/guarantee provided by Champion Logistic Inc. shall not exceed 100% of its net worth; the same limit applies to the endorsement/guarantee provided by Champion Logistic Inc. to a single entity.

  • (Note 8) : The maximum amount of endorsement/guarantee provided by Sin Bang Investment & Development Co., Ltd. shall not exceed 2 times of Sin Bang’s net worth. The same limit applies to the endorsement/guarantee provided by Sin Bang Investment & Development Co., Ltd. to a single entity.

  • (Note 9): The net worth referred to above is based on the latest financial statements audited or reviewed by independent auditors. (Note 10): Mutually guaranteed companies based on the need of construction contract.

－252－

TABLE 3

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Marketable securities held (excluding investments in subsidiaries and associates) For The Year Ended December 31, 2020

Unit: Thousand Shares；Thousands of NT Dollar/ Foreign Currency

Unit: Thousand Sha res；Thousands of NT Dollar/ Foreign Currency res；Thousands of NT Dollar/ Foreign Currency res；Thousands of NT Dollar/ Foreign Currency res；Thousands of NT Dollar/ Foreign Currency
Securities held by Marketable securities Relationship with the
securities issuer		 General ledger account As of December 31, 2020 Note
Shares (in
**thousands) **		 **Carrying value ** Ownership (%) Fair value
Yieh Phui Enterprise
Co., Ltd.		 Fund/ Fubon 3-Year Maturity Asia USD Bond Fund None Financial assets at fair value through profit or
loss - current		 500
4,552
－		 4,552
Fund/Taishin Strategy Senior Total Return High Yield Bond
Fund		 None Financial assets at fair value through profit or
loss - current		 300
3,055
－		 3,055
Fund/ United 4 to 6 Years Trigger Sovereign EMD Term
Fund		 None Financial assets at fair value through profit or
loss - current		 10
2,889
－		 2,889
Fund/ Franklin Templeton SinoAm AI Hi-Tech Fund None Financial assets at fair value through profit or
loss - current		 1,000
10,350
－		 10,350
Preferred stock/ Eliter International Corp.- Preferred stock E An investee accounted
for usingequitymethod		 Financial assets at fair value through profit or
loss - current		 19,706
213,292
－		 213,292
Total 234,138 234,138
Stock/ TaiwanVes-Power Co., Ltd. Related party in
substance		 Financial assets at fair value through other
comprehensive income or loss - noncurrent		 1,800
53,910
3.60%		 53,910
Stock/ New Spring Construction Corp. Related party in
substance		 Financial assets at fair value through other
comprehensive income or loss - noncurrent		 15,863
119,370
15.49%		 119,370
Stock/ Ascentke Venture Capital Corp. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 85
6,208
6.42%		 6,208
Stock/ Taiwan Implant Technology Company, Ltd. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 701
6,777
4.20%		 6,777

－253－

Securities held by Marketable securities Relationship with the
securities issuer		 General ledger account As of December 31, 2020 As of December 31, 2020 As of December 31, 2020 As of December 31, 2020 Note
Shares (in
**thousands) **		 **Carrying value ** Ownership (%) Fair value
Yieh Phui Enterprise
Co., Ltd.
Stock/ Sunny Bank		 None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 4,541
38,256
0.16%		 38,256
Stock/ Universal Venture Capital Investment Co., Ltd. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 1,100
6,266
0.91%		 6,266
Stock/ Yieh Corporation Limited Related party in
substance		 Financial assets at fair value through other
comprehensive income or loss - noncurrent		 200
86,559
4.35%		 86,559
Stock/ Pacific Harbor Stevedoring Corporation Director of the entity is
the Company’s director		 Financial assets at fair value through other
comprehensive income or loss - noncurrent		 150
4,494
3.00%		 4,494
Stock/ ImageDJ Software Corp. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 24
535
0.96%		 535
Stock/ Chao-Feng Venture Capital Co., Ltd. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 1,000
7,508
0.79%		 7,508
Stock/ Skylark International Hotel Co., Ltd. Related party in
substance		 Financial assets at fair value through other
comprehensive income or loss - noncurrent		 20,528
304,001
13.68%		 304,001
Stock/ Neolink Capital Corp. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 3,000
27,243
2.57%		 27,243
Stock/ Asia Pacific Telecom Co., Ltd. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 2,949
29,789
0.08%		 29,789
Total 690,916 690,916
Shin Phui Steel
Corporation		 Stock/Zhaoheng Energy Technology Co., Ltd. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 1,425
14,962
9.50%		 14,962
Worthing Honor
Holdings Ltd.		 Stock/ SEE Corporation None Financial assets at fair value
throughprofit		 None Financial assets at fair value through profit
or loss - current		 1 － － －
EMMT Systems
Corporation		 Fund/ KGI Emerging Asia Sustainable Selection Bond Fund None Financial assets at fair value through profit or
loss - current		 180
1,837
－		 1,837
Stock/ Rodan (Taiwan) Ltd. None Financial assets at fair value through other
comprehensive income - noncurrent		 17 － 0.73% －
Kuo Chang
Enterprise Co., Ltd.		 Preferred stock/ Eliter International Corp.- Preferred stock D An investee of the Parent
Company under equity
method.		 Financial assets at fair value through profit
or loss - current		 1,997
21,771
－		 21,771
Preferred stock/ Eliter International Corp.- Preferred stock E An investee of the Parent
Company under equity
method.		 Financial assets at fair value through profit
or loss - current		 1,498
16,209
－		 16,209
Total 37,980 37,980
Stock/Zhaoheng Energy Technology Co., Ltd. None Financial assets at fair value through other
comprehensive income - noncurrent		 1,425
14,962
9.50%		 14,962

－254－

Securities held by Marketable securities Relationship with the
securities issuer		 General ledger account As of December 31, 2020 As of December 31, 2020 As of December 31, 2020 As of December 31, 2020 Note
Shares (in
**thousands) **		 **Carrying value ** Ownership (%) Fair value
United Brightening
Development Corp.		 Preferred stock/ Eliter International Corp.- Preferred stock D An investee of the Parent
Company under equity
method.		 Financial assets at fair value through profit
or loss - current		 26,914
293,362
－		 293,362
Preferred stock/ Eliter International Corp.- Preferred stock E An investee of the Parent
Company under equity
method.		 Financial assets at fair value through profit
or loss - current		 479
5,187
－		 5,187
Total 298,549 298,549
Yieh Hsing
Enterprise Co., Ltd		 Fund/ SinoPac CSI 300 Dividend Index Fund None Financial assets at fair value through profit
or loss - current		 221
4,686
－		 4,686
Fund/ Amundi TW - Emerging Markets High Yield Bond
Fund		 None Financial assets at fair value through profit
or loss - current		 100
991
－		 991
Fund/ Franklin Templeton SinoAm AI Hi-Tech Fund None Financial assets at fair value through profit
or loss - current		 200
2,070
－		 2,070
Fund/TCB US Short Duration High Yield Bond Fund None Financial assets at fair value through profit
or loss - current		 200
1,979
－		 1,979
Fund/Emerging Asian Markets Bonds 2026 None Financial assets at fair value through profit
or loss - current		 10
2,919
－		 2,919
Preferred stock/Eliter International Corp.- Preferred stock D An investee accounted
for usingequitymethod		 Financial assets at fair value through profit
or loss - current		 5,934
64,678
－		 64,678
Preferred stock/Eliter International Corp.- Preferred stock E An investee accounted
for usingequitymethod		 Financial assets at fair value through profit
or loss - current		 4,450
48,152
－		 48,152
Total 125,475 － 125,475
Stock/ Pacific Harbor Stevedoring Corporation Director of the entity is
the Company’s chairman		 Financial assets at fair value through other
comprehensive income - noncurrent		 150
4,494
3.00%		 4,494

－255－

TABLE 4

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital For The Year Ended December 31, 2020

Unit: Thousand Shares；Thousands of NT Dollar

Unit: Thousand S Unit: Thousand S hares；Th ousands of NT Dollar ousands of NT Dollar
Investor Marketable
securities		 General
ledger
account		 Counterparty Relationship
with the
investor		 Beginning balance **Addition ** **Disposal ** Ending balance
Number
of shares		 Amount Number
of shares		 Amount Number
of shares		 Selling
price		 Book
value		 Gain
(loss) on
disposal		 Number
of shares		 Amount
Yieh Phui
Enterprise
Co., Ltd.		 Champion
Logistic Inc.		 Investments
accounted
for using
equity
method		 Proceeds from
Capital reduction		 Subsidiary of
the Company		 13,000 412,991 － － 12,910 － 408,219
(Note 1)		 － 90 4,772
Great
Emperor
Hotel Co.,
Ltd.		 Investments
accounted
for using
equity
method		 Capital increase
by cash		 Investee of
the
Company’s
Sub-
subsidiary		 147,000 1,453,417 105,000 1,038,513
(Note 2)		 － － － － 252,000 2,491,930

(Note 1):Including proceeds from capital reduction of ($386,342) thousand, cash dividend ($23,180) thousand, gain (loss) on investments accounted for using equity method and shares of other comprehensive income of $1,303 thousand.

(Note 2):Including capital increase by cash of $1,081,500 thousand, income and loss on investment accounted for using equity method in the amount of ($20,743) thousand and accumulated earning/loss of ($22,244) thousand recognized due to the failure to subscribe to new shares in proportion to its shareholding percentage.

－256－

TABLE 5

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital For The Year Ended December 31, 2020

Unit: Thousands of NT Dollar Unit: Thousands of NT Dollar Unit: Thousands of NT Dollar Unit: Thousands of NT Dollar
Company
name		 Real estate Transaction
date		 Transaction
amount		 Payment
terms		 Counterparty Relationship
with the seller		 Prior transaction of related counterparty Price reference Purpose of
acquisition		 Other
terms
Owner Relationship Transfer
Date		 Amount
Kings Garden
International
Co., Ltd.		 Construction
of commercial
building at
E-da Asia Plaza		 January 28,
2014
~
November
12, 2020		 5,749,569 5,251,984 New Spring
Construction Corp.,
Taiwan Cement
Corporation, Yieh
Hsing Enterprise Co.,
Ltd. and Yieh Phui
Enterprise Co., Ltd.
Union Engineering
Co., Ltd. Teco Electric
& Machinery Co.,
Ltd., Hsin.Kao Gas
Co,. Ltd. etc.		 Related party
in substance,
Parent
company,
ultimate
parent
company		 － － － － Determined at
prices agreed
on by both
parties upon
negotiation or
through price
comparison
with reference
to appraisal
reports issued
by professional
appraisal
institutions		 To build a
boutique
shopping
mall		 None
Great
Emperor
Hotel Co.,
Ltd.		 6,394,040 5,539,852 For
development
of an
international
hotel

Note: Transactions between the aforesaid subsidiaries and the parent company are eliminated.

－257－

TABLE 6

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital For The Year Ended December 31, 2020

Unit: Thousands of NT Dollars Unit: Thousands of NT Dollars Unit: Thousands of NT Dollars
Real estate
disposed by		 Real estate Transaction
date or
date of
the event		 Acquisition
date		 Carrying
value		 Transaction
amount(Note
2)		 Status of
collection of
proceeds		 Gain (loss)
on disposal		 Counterparty Relationship
with the
seller		 Reason for
disposal		 Price
reference		 Other
terms
Yieh Phui
Enterprise
Co., Ltd.		 No.0001,-0002、No.0001-
0041、No.0001-0040, Pingbei
Section, Jiadong Township,		 May 6, 2020 June 6 ,2006 219,007 606,873 Fully
recovery		 387,866 Zhaoyuneng
Technology
Co., Ltd.		 － Enrich the
working
capital of the
company		 Euro-Asia
Asset
Evaluation
Group		 None
No.0001- 0030, Pingbei Section,
Jiadong Township		 August
21,2019		 June 6 ,2006 49,958 171,978 Fully
recovery		 122,020 Daheng
Resources
Technology
Co., Ltd.		 － Enrich the
working
capital of the
company		 Euro-Asia
Asset
Evaluation
Group		 None
No.0001- 0021, Pingbei Section,
Jiadong Township		 May 6, 2020 67,882 209,658 141,776
No.0001-0027, Pingnan Section,
Fangliao Township		 December
1,2020		 June 6 ,2006 159,832 699,634 70,000 (Note１) Shenfeng
Special
Application
Materials Co.,
Ltd.		 － Enrich the
working
capital of the
company		 Evermore
Valuation
Real Estate
Appraisal
Firm		 None

(Note 1): As of December 31, 2020, the transfer has not been completed, Please refer to Note 6.8 and Note 9.10.

(Note 2): The amount of the contract price without tax minus the necessary fee.

－258－

TABLE 7

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital For The Year Ended December 31, 2020

Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency
Purchaser/
seller		 Counterparty Relationship with
the counterparty		 **Transaction ** Differences in transaction
terms compared to third
party transactions		 Notes/accounts receivable (payable) Note
Purchases
(sales)		 Amount Percentage of
total
purchases
(sales)
Credit term		 Unitprice Credit term Balance Percentage of total
notes/accounts
receivable
(payable)
Yieh Phui
Enterprise Co.,
Ltd.		 Yieh Hong Enterprise
Co., Ltd.		 Related party in
substance		 Purchases T/T or Sight L/C before
goods acceptance.		 － － － － －
3,273,609 19.52%
Yieh United Steel
Corporation		 An investee
accounted for using
equity method		 Sales Galvanized steel coils；
payment periods were
within one to two months.
carbon steel: payment term
is monthly, and closes in
15 days. Project is
contractuallyagreed
－		 － 19,261 1.44% Accounts receivable
183,665 0.88% 5,557 19.92% Note receivable
Yieh Corporation
Limited		 Related party in
substance		 Sales 1-2 months － － 988 0.07% Accounts receivable
886,253 4.23%
Asiazone Co., Limited An investee
accounted for using
equitymethod		 Sales 1-2 months － － 154,046 11.48% Accounts receivable
1,017,050 4.86%
Shin Yang Steel Co.,
Ltd.		 Subsidiary of the
Company		 Sales 731,972 3.50% 1-2 months － － 46,715 3.48% Accounts receivable
New Spring
Construction Corp.		 Related party in
substance		 Sales 471,629 2.25% Pursuant to the
agreement		 － － － － －
Shin Phui Steel
Corporation		 Subsidiary of the
Company		 Sales 224,504 1.07% 1-2 months － － 13,821 1.03% Accounts receivable

－259－

Purchaser/
**seller **		 Counterparty Relationship with
the counterparty		 Transaction Transaction Differences in transaction
terms compared to third
party transactions		 Differences in transaction
terms compared to third
party transactions		 Notes/accounts receivable(payable) Notes/accounts receivable(payable) Note
Purchases
(sales)		 Amount Percentage of
total
purchases
(sales)
Credit term		 Unit price Credit term Balance Percentage of total
notes/accounts
receivable
(payable)
Shin Yang Steel
Co., Ltd.		 Yieh Hong
Enterprise Co.,
Ltd.		 Related party in
substance		 Purchases 215,664 13.27% T/T or Sight L/C before goods
acceptance.		 － － － － －
Yieh Phui (Hong
Kong) Holdings
Limited
Yieh United Steel
Corporation		 An investee of the
Parent Company
under equity
method.		 Sales 215,565
(USD 7,292)		 100.00% The agreed period is 3 months, but
a grace period may be granted by
mutual agreement.		 － － － － －
Yieh Phui
(China)
Technomaterial
Co., Ltd.		 Tianjin Lianfa
Precision Steel
Corporation		 Subsidiaries Sales 1,390,254
(RMB 324,612)		 5.33% 1-2 months － － 143,566
(RMB 32,892)		 31.70% Accounts
receivable
Asiazone Co.,
Limited		 An investee of the
Parent Company
under equity
method.		 Sales 174,207
(USD 5,864)		 0.66% 1-2 months － － 5,026
(USD 176)		 1.11% Accounts
receivable
Yieh Hsing
Enterprise Co.,
Ltd.		 Yieh United
Steel
Corporation		 An investee
accounted for
using equity
method		 Purchases 3,506,331 75.27% T/T or Sight L/C before
goods acceptance.		 － － － － －

Note: Transactions between the aforesaid subsidiaries and the parent company are eliminated.

－260－

TABLE 8

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital For The Year Ended December 31, 2020

Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency
Creditor Counterparty Relationship with the
counterparty		 Ending balance Turnover rate Overdue receivables Amount collected
subsequent to the end
of the reporting period
(Note 2)		 Allowance for
doubtful
accounts
Amount Action
taken
Yieh Phui
Enterprise Co.,Ltd.		 Asiazone Co.,
Limited		 Affiliated enterprises 154,046
6.29		 － － 154,046
－
Yieh Phui (Hong
Kong) Holdings
Limited		 Yieh Phui (China)
Technomaterial Co., Ltd.		 Subsidiaries 2,258,176
(RMB 6,930)
(USD 73,733)
(EUR 3,655)


(Note 1)		 － － － －
Shin Yang Steel
Co., Ltd.		 Yieh Phui (Hong
Kong) Holdings
Limited		 Fellow subsidiary 176,576
(USD 6,200)

(Note 1)		 － － － －
Yieh Phui (China)
Technomaterial
Co., Ltd.		 Tianjin Lianfa Precision
Steel Corporation		 Subsidiaries 109,120
(RMB 25,000)
(Note 1)		 － － － －
143,566
(RMB 32,892)
8.29		 － － RMB 32,892
－

(Note 1): These are accounts receivable financing, on which the calculation of turnover doesn’t apply. (Note 2): Amounts received as of March 24, 2021.

(Note 3): Transactions between the aforesaid subsidiaries and the parent company have been written off.

－261－

TABLE 9

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Intercompany Relationship and Significant Intercompany Transactions For The Year Ended December 31, 2020

Individual transactions not exceeding NT$50,000 thousand are not disclosed. Transactions disclosed in assets or revenue will not be disclosed in the opposite transaction.

Unit: Thousands of NT Dollars/Foreign Currency

Number
(Note 1)		 Company name Counterparty Relationship
(Note 2)		 Transaction Transaction
Account Amount Transaction terms Percentage of
consolidated total
operating revenues or
total assets(Note 3)
0 Yieh Phui Enterprise Shin Phui Steel Corporation 1 Right-of-use asset 70,700
－		 0.08%
Sales revenue 224,504
－		 0.41%
Shin Yang Steel Co., Ltd. 1 Sales revenue 731,972
－		 1.32%
1 Shin Yang Steel Co.,
Ltd.		 Yieh Phui (Hong Kong)
Holdings Limited		 3 Other receivables 176,576
－		 0.21%
2 Yieh Phui (Hong Kong)
Holdings Limited		 Yieh Phui (China)
Technomaterial Co., Ltd.		 1 Long-term receivables 2,258,176
－		 2.69%
(RMB 6,930)
(USD 73,733)
(EUR 3,655)
3 Yieh Phui (China)
Technomaterial Co.,
Ltd.		 Tianjin Lianfa Precision Steel
Corporation
1		 Sales revenue 1,390,524 － 2.51%
(RMB 324,612)
Accounts receivable 143,566
(RMB 32,892)		 － 0.17%
Long-term receivables 109,120
(RMB 25,000)		 － 0.13%
4 APPLIED
WIRELESS
IDENTIFICATIONS		 Yieh Phui (Hong Kong)
Holdings Limited		 3 Long-term receivables 62,656
(USD 2,200)		 － 0.07%

－262－

  • Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

  • (1) Parent company is ‘0’.

  • (2) The subsidiaries are numbered in order starting from ‘1’.

  • Note 2: Relationship between transaction company and counterparty is classified into the following three categories:

  • (1) Parent company to subsidiary.

  • (2) Subsidiary to parent company.

  • (3) Subsidiary to subsidiary.

  • Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

  • Note 4: Transactions between the aforesaid subsidiaries and the parent company have been written off.

－263－

TABLE 10

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Information on Investees For The Year Ended December 31, 2020)

Unit: Thousands of NT Unit: Thousands of NT Dollar/ Foreign Currency Dollar/ Foreign Currency Dollar/ Foreign Currency
Investor Investee Location Main business activities Initial investment amount Shares held as the period-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December 31,
2020
December 31,
2019
Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
Yieh Phui
Enterprise
Co., Ltd.		 Yieh Phui (Hong Kong) Holdings
Limited		 Hong Kong Investment 7,455,887
7,455,887
233,500
100%
9,502,034
958,220
958,220
Champion Logistic Inc. Samoa Investment 118,287
504,629
90
89.66%
4,772
2,537
2,275
Eliter International Corp. Kaohsiung City Construction of
buildings		 2,833,595
2,833,595
283,584
32.84%
2,650,801
(66,028)		 (21,686)
Yieh Hsing Enterprise Co., Ltd. Kaohsiung City Wire rods trading 2,261,296
2,252,564
304,654
57.41%
971,579
(470,091)		 (258,106)
Tangeng Iron Works Co., Ltd. Kaohsiung City Steel trading 1,453,572
1,453,572
39,553
11.30%
1,154,704
(665,673)		 (75,227)
E-Da Development Corp. Kaohsiung City Leisure development 2,096,196
2,096,196
209,619
28.44%
1,116,484
(322,389)		 (91,695)
United Brightening Development
Corp.		 Kaohsiung City Technical consultation
for steel products
manufacturing		 1,815,593
1,836,383
150,893
95.56%
1,445,019
(130,697)		 (124,897)
Shin Yang Steel Co., Ltd. Kaohsiung City Steel products related
business		 870,000
870,000
87,696
100%
834,458
(84,845)		 (84,353)
Yieh Mau Corp. Kaohsiung City Trading &
manufacturing		 422,605
422,605
52,658
23%
699,843
124,369
28,599
Kuo Chang Enterprise Co., Ltd. Kaohsiung City Wholesale of hardware 1,356,261
1,287,428
107,370
99.04%
1,062,054
(87,756)		 (86,914)
Asiazone Co., Limited Hong Kong Steel trading 595,424
595,424
15,090
32.80%
637,907
66,148
21,699
Shin Phui Steel Corporation Kaohsiung City Trading of steel products 214,236
185,736
23,917
100%
252,846
5,272
6,378
Sin Bang Investment &
Development Co.,Ltd.		 Kaohsiung City Investment 284,709
265,809
21,203
100%
232,955
(13,968)		 (13,968)

－264－

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as theperiod-end Shares held as theperiod-end Shares held as theperiod-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December 31,
2020
December 31,
2019
Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
Yieh Phui
Enterprise
Co., Ltd.		 EMMT Systems Corporation Taichung City Manufacturing and
marketing of military
specification printed
circuit boards		 310,347
308,076
40,033
78.51%
529,305
131,458
102,995
Good Honor Holdings Ltd. British Virgin
Islands		 Investment 14,723
14,723
46
100%
3,901
30
30
Gen-Wan Technology Corp. Kaohsiung City Telecommunication 148,610
148,610
3,293
86.99%
44,511
9,656
8,400
Cheng Shin Security Co., Ltd. Kaohsiung City Security 14,000
14,000
1,400
35%
9,598
(8,943)		 (3,130)
E-Da Bus Transportation Co.,
Ltd.		 Kaohsiung City Bus transportation 49,755
49,755
1,845
17.09%
684
(53,017)		 (9,058)
E-DA Tour Bus Co., Ltd. Kaohsiung City Bus transportation 20,900
20,900
1,349
19%
13,108
(1,419)		 (270)
Worthing Honor Holdings Ltd. British Virgin
Islands		 Investment 6,672
6,672
100
100%
2,629
3
3
E United Japan Co., Ltd. Japan Steel trading 8,027
8,027
－		 47%
4,147
602
283
Skylark Hot Spring & Resort
Corp.		 Kaohsiung City Hotel industry 11,700
11,700
1,170
14.63%
-		 (1,714) -
E-Da Entertainment Co., Ltd. Kaohsiung City Entertainment industry 74,100
74,100
7,410
19%
57,924
(954)		 (181)
Li Hui Development Co., Ltd. Kaohsiung City Investment 321,216
321,216
64,045
44.56%
310,169
(1,935)		 (862) (Note 1)
Ji Chang Enterprise Co., Ltd. Kaohsiung City Investment 5,050
5,050
1,042
45%
4,692
(113)		 (51) (Note 1)
Yieh United Steel Corporation Kaohsiung City Steel products related
businesses		 5,023,625
4,995,078
676,661
25.82%
2,653,964
(1,877,471)		 (500,363) (Note 1)
Hong Yuh Assets Management
Co.,Ltd.		 Kaohsiung City Management service 1,167,200
1,167,200
119,920
80%
426,085
(118,128)		 (94,502)

－265－

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as the period-end Shares held as the period-end Shares held as the period-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note

December 31,
2020
December 31,
2019
Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
Yieh Phui
Enterprise
~~C~~o., Ltd.		 E-Da Visual Effects Company
Limited.		 Kaohsiung City Entertainment industry 10,393
10,393
1,470
49%
-		 (8,342) -
Lian So(H.K) Co., Limited Hong Kong Investment 507,342
507,342
16,560
80%
289,013
(51,082)		 (40,865)
E-Da Health Biotechnology Co.,
Ltd.		 Kaohsiung City Manufacturer of food
additives		 3,800
3,800
380
19%
3,691
(68)		 (13)
Yieh Phui America Inc. U.S. Trading of steel
products		 292
292
1
100%
66,156
16,125
16,125
Great Emperor Hotel Co., Ltd. Kaohsiung City Hotel industry 2,595,600
1,514,100
252,000
54.55%
2,491,930
(42,689)		 (20,743)
Prepayment for stock
subscription - Great Emperor
Hotel Co., Ltd.		 Kaohsiung City Hotel industry - 133,597
-		 - - - -
Kings Garden International Co.,
Ltd.		 Kaohsiung City Leasing, sales, and
development of
residential and
commercial buildings,
department stores		 2,193,900
2,121,800
213,000
50.12%
2,087,966
(37,389)		 (18,694)
Prepayment for stock
subscription -Great Emperor
Hotel Co., Ltd.		 Kaohsiung City Leasing, sales, and
development of
residential and
commercial buildings,
department stores		 209,066
-		 - - 209,066
-		 -
Total 34,473,979
33,496,259
-		 - 29,773,995
(2,730,291)		 (300,571)
Shin Phui
Steel
Corporation		 Groupco Technology Inc. Taichung City RADIO 37,492
37,492
3,830
42.53%
3,933
50		 21
Yieh United Steel
Corporation		 Kaohsiung City Steel products related
businesses		 24,562
24,562
3,178
0.12%
12,356
(1,877,471)		 (2,063) (Note 1)
Great Emperor Hotel Co., Ltd. Kaohsiung City Hotel industry 515
515
50
0.01%
494
(42,689)		 (5)
Kings Garden International Co.,
Ltd.		 Kaohsiung City Leasing, sales, and
development of
residential and
commercial buildings,
department stores		 515
515
50
0.01%
490
(37,389)		 (4)

－266－

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as the period-end Shares held as the period-end Shares held as the period-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December31,
2020
December 31,
2019
Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
Gen-Wan
Technology
Corp.		 EMMT Systems
Corporation		 Taichung City Manufacturing and
marketing of
military specification printed
circuit boards		 27,630
27,630
3,814
7.48%
50,422
131,458		 9,832
EMMT
Systems
~~C~~orporation		 Groupco Technology Inc. Taichung City RADIO 45,000
45,000
4,500
49.97%
4,621
50		 25
Applied Wireless
Identifications Group, Inc.		 San Francisco,
US		 RFID 242,545
242,545
40,488
91.47%
208,035
27,841		 25,466
UniPattern Corporation Taipei City Manufacturing of computer
and peripherals		 54,960
54,960
5,200
43.33%
59,889
16,344		 7,082
Applied
Wireless
Identifications
Group, Inc.		 AWID Asia Co., Ltd. Kaohsiung City Telecommunications
equipment
wholesale		 71,456 75,220 3,030
100.00%
19,044
1,058		 1,058
Shin Yang
Steel Co., Ltd.		 Yieh United Steel
Corporation		 Kaohsiung City Steel products related
businesses		 17,385
17,385
2,195
0.08%
8,536
(1,877,471)		 (1,427) (Note 1)
Sin Bang
Investment &
Development
Co., Ltd.		 Tangeng Iron Works Co., Ltd. Kaohsiung City Steel trading 265,482
265,482
7,224
2.07%
210,896
(665,673)		 (13,740)
Kuo Chang
Enterprise Co.,
Ltd.
Yieh United Steel
Corporation		 Kaohsiung City Steel products related
businesses		 439,197
439,197
56,817
2.17%
220,949
(1,877,471)		 (36,886) (Note 1)
Eliter International Corp. Kaohsiung City Construction of buildings 219,977
219,977
21,558
2.50%
201,556
(66,028)		 (1,649)
Tangeng Iron Works Co.,
Ltd.		 Kaohsiung City Steel trading 786,714
786,714
21,328
6.09%
921,017
(665,673)		 (40,564)
United
Brightening
Development
Corp.		 Chao Ying Investment
Development Co., Ltd.		 Kaohsiung City Investment 341,992
341,992
30,400
100.00%
261,132
(17,077)		 (17,077)
Yieh United Steel
Corporation		 Kaohsiung City Steel products related
businesses		 449,508
449,508
58,151
2.22%
226,136
(1,877,471)		 (37,751) (Note 1)
Champion Logistic Inc. Samoa Investment 4,798
49,376
10
10.34%
551
2,537		 262

－267－

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as the period-end held as the period-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December 31,
2020
December 31,
2019
Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
United
Brightening
Development
Corp.		 Tangeng Iron Works Co., Ltd. Kaohsiung City Steel trading 1,177,838
1,177,838
32,050
9.16%
1,363,948
(665,673)		 (60,957)
Eliter International Corp. Kaohsiung City Construction of buildings 70,393
70,393
6,898
0.80%
64,506
(66,028)		 (528)
Chao Ying
Investment
Development
Co.,Ltd.		 Tangeng Iron Works Co., Ltd. Kaohsiung City Steel trading 336,957
336,957
8,898
2.54%
259,767
(665,673)		 (16,923)
Hong Yuh
Assets
Management
Co., Ltd.		 Lien-Hsin Steel Co., Ltd. Indonesia Metal manufacturing
industry		 514,670
514,670
1,640
47.88%
303,216
(84,766)		 (40,589)
Prepayment of stock
subscription- Lien-Hsin Steel
Co.,Ltd.		 Indonesia Metal manufacturing
industry		 55,440
-		 - - 55,440
-		 -
Lien-Sheng Steel Co., Ltd. Indonesia Metal manufacturing
industry		 1,633
1,633
0.05
10.00%
436
(1,926)		 (193)
Lien-Hung Mining Co., Ltd. Indonesia Nickle mining 100,303
100,303
3,787
19.00%
63,985
(42,105)		 (8,000)
Prepayment of stock
subscription - Lien-Hung
Mining Co.,Ltd.		 Indonesia Nickle mining 7,367
-		 - - 7,367
-		 -
Lien-Heng Mining Co., Ltd. Indonesia Nickle mining 9,371
9,371
381
75.00%
(28,583)		 (5,371) (4,028)
Prepayment of stock
subscription - Lien Heng
Mining Co.,Ltd.		 Indonesia Nickle mining 69,365
69,365
-		 - 69,365
-		 -
Asiamax Mining Indonesia Indonesia Nickle mining 89,386
89,386
55
100.00%
48,337
(22,429)		 (22,429)
Lian So (H.K)
Co., Limited		 Lien-Sheng Steel Co., Ltd. Indonesia Metal manufacturing
industry		 12,816
13,491
0.45
90.00%
3,926
(1,926)		 (1,733)
Lian Yang (Hong Kong)
Trading Limited		 Hong Kong Trading business 2,848
2,998
100
100.00%
13,263
(991)		 (991)
Lien-Hsin Steel Co., Ltd. Indonesia Metal manufacturing
industry		 508,368 535,143
1,785
52.12%
330,024
(84,766)		 (44,177)

－268－

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as the period-end Shares held as the period-end Shares held as the period-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December 31,
2020		 December 31,
2019		 Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
Lien-Hsin steel
Co., Ltd.
Lien-Hung Mining Co., Ltd.		 Indonesia Nickle mining 429,574
442,565
16,142
81.00%
260,827
(42,105)		 (34,105)
Prepayment of stock
subscription - Lien-Hung
MiningCo.,Ltd.		 Indonesia Nickle mining 72,393
-		 - - 72,393
-		 -
Lien-Heng Mining Co., Ltd. Indonesia Nickle mining 20,267
20,506
127
25.00%
(9,528)		 (5,371) (1,343)
Yieh Hsing
Enterprise Co.,
Ltd.		 Great Emperor Hotel Co., Ltd. Kaohsiung City Hotel industry 2,099,500
2,099,500
209,950
45.44%
2,076,113
(42,689)		 (22,079)
Kings Garden International
Co., Ltd.		 Kaohsiung City Leasing, sales, and
development of residential
and commercial buildings,
department stores		 2,119,500
2,119,500
211,950
49.87%
2,077,673
(37,389)		 (18,690)
United Winner Metals L.P Virginia, US Scrap steel recycling 107,334
107,334
-		 33.75%
91,738
13,269		 4,479
Cheng Shin Security Co., Ltd. Kaohsiung City Security 4,000
4,000
400
10.00%
2,742
(8,943)		 (895)
Eliter International Corp. Kaohsiung City Construction of buildings 639,772
639,772
64,043
7.42%
598,851
(66,028)		 (4,897)
E-Da Development Corp. Kaohsiung City Leisure development 437,915
437,915
43,791
5.94%
234,844
(322,389)		 (19,156)
Yieh United Steel
Corporation		 Kaohsiung City Steel products related
business		 20,204
20,204
2,542
0.10%
9,887
(1,877,471)		 (1,650) (Note 1)
E-Da Health Biotechnology
Co., Ltd.		 Kaohsiung City Manufacturer of food
additives		 3,800
3,800
380
19.00%
3,691
(68)		 (13)

－269－

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as the period-end Shares held as the period-end Shares held as the period-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December 31,
2020		 December 31,
2019		 Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
Kings Garden
International
Co., Ltd.		 Yi Hua International Co., Ltd Kaohsiung City Leasing, selling and
development of residential
and commercial buildings		 7,000 7,000 1,169 70.00%
16,100		 5,502 3,851
Hua Li International Co., Ltd. Kaohsiung City Daily necessities, cosmetics
wholesaler		 60,000
60,000
6,000
100.00%
46,402
(12,783)		 (12,783)
E-Mau Development Co., Ltd. Kaohsiung City Department stores,
amusement parks, and hotel
industry		 27,520
-		 2,752
12.80%
27,494
(204)		 (26)
Great Emperor
Hotel Co., Ltd.
E-Mau Development Co., Ltd.		 Kaohsiung City Department stores,
amusement parks, and hotel
industry		 27,520
-		 2,752
12.80%
27,494
(204)		 (26)

(Note 1): Due to cross ownership and the adoption of equity method between the Company and Yieh United Steel Corporation, investment gain/loss is accounted for using the treasury stock approach. Thus, the income/loss of investee for the period excludes gain/loss accounted for using equity method by Yieh United Steel Corporation in relation to the Company.

(Note 2): Transactions between the aforesaid subsidiaries and the parent company are eliminated.

－270－

TABLE 11

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Information on Investment in Mainland China For The Year Ended December 31, 2020

Unit: Thousands of NT Dollar/ Foreign Currency

Name of Investee in
Mainland China		 Main business
activities		 Total Amount
of
Paid-inCapital		 Investment
method
(Note 1)		 Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2020		 Investment Flows Investment Flows Accumulated
Outflow of
Investment
from
Taiwan as of
December 31,
2020		 Net Income
(Loss) of
the
Investee		 Ownership
held by
the
Company
(direct or
indirect)
(%)		 Share of
Profit/Loss
(Note 2)		 Carrying
Amount
as of
December 31,
2020		 Accumulated
Inward
Remittance of
Earnings as of
December 31,
2020
Outflow Inflow
**Investor **
Yieh Phui
Enterprise
Co., Ltd.		 Yieh Phui (China)
Techno material Co., Ltd.		 Manufacturing and
marketing of pickled,
cold rolled,
galvanized and
pre-painted steel coils		 6,726,976
(USD 236,200)
(Note 6)		 (2) a 6,650,080
(USD 233,500)
－		 － 6,650,080
(USD 233,500		 988,624 100% 988,624
(2) 2		 9,555,471 －
Changshou ChangHuei
Trading Co.		 Trading of steel
products		 43,648
(RMB 10,000)		 (2) a
(Note 4)		 － － － － 490 100% 490
(2) 3		 46.307 －
Tianjin Lianfa Precision
Steel Corporation		 Manufacturing and
marketing of special
highgrade alloy		 384,480
(USD 13,500)		 (2) a
(Note 5)		 － － － － 384 100% 384
(2) 2		 135.919 －
AWID Asia
Co., Ltd.		 AWID Sanghai Co., Ltd.
(Note 7)		 Telecommunications
equipment
wholesale		 19,936
(USD 700)		 (1) 19,936
(USD 700)
－		 19,936
(USD 700)
－		 152 100% 152
(2) 3		 － －
AWID Changshou Co., Ltd. Telecommunications
equipment
wholesale		 8,544
(USD 300)		 (1) 8,544
(USD 300)
－		 － 8,544
(USD 300)		 (799) 100% (799)
(2) 2		 2,753 －
Investee in
Mainland China		 Accumulated Investment in Mainland
China
as of December 31, 2020		 Investment Amounts Authorized by
Investment Commission, MOEA		 Upper Limit on
Investment
**Investor **
Yieh Phui Enterprise Co., Ltd. Yieh Phui (China) Technomaterial Co., Ltd. 6,650,080 (USD 233,500)
6,726,976 (USD 236,200)		 15,881,527
AWID Asia Co., Ltd. AWID Sanghai Co., Ltd. － － －
AWID Changshou Co., Ltd. 8,544 (USD 300)
8,544 (USD 300)		 80,000

－271－

  • (Note 1): Investment methods are classified into the following three categories.

    • (1) Directly invest in a company in Mainland China.

    • (2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China. a. Yieh Phui (Hong Kong) Holdings Limited

    • (3) Others

  • (Note 2): Investment gain or loss recognized in the current period:

    • (1) Please specify if it is in the preparation stage without any investment gains or losses generated.

    • (2) Recognition basis of investment profit or loss is categorized into three types, which shall be identified.

      1. Financial statements audited and certified by the international CPA firms that cooperates with ROC CPA firms.

      2. Financial statements reviewed, or audited and certified by the CPA firm of the parent company in Taiwan. 3. Others

  • (Note 3): The figures in the Table shall be expressed in New Taiwan Dollars. Carrying amount at the end of the period is converted using the exchange rate on the reporting date (USD:NTD 1: 28.48; RMB: NTD 1: 4.3648). Investment gain or loss recognized in the current period is converted using the average exchange rate in from January 1 to December 31, 2020 (USD: NTD 1: 29.5604; RMB: NTD 1: 4.2840).

  • (Note 4): Yieh Phui (China) Technomaterial Co., Ltd. invests in Changshou ChangHuei Trading Co. with equity funds of RMB 10 million. As of December 31, 2020, accumulated investment amounted to RMB 10 million.

  • (Note 5): The Company originally holds 100% of Tianjin Lianfa Precision Steel Corporation Beneficiary (paid-in capital equals USD 13,500 thousand) through its holding in Hsing Jui Investments Limited. It transfered its ownership to Yieh Phui (China) Technomaterial Co., Ltd. at RMB 20,000 thousand in July 2015. The said proceed, net of tax, of RMB 19,990 thousand (equivalent to USD 3,213 thousand) has been transferred back to the Company’s account in Taiwan.

  • (Note 6): Yieh Phui (China) Technomaterial Co., Ltd. recapitalized its retained earnings of USD 2,700 thousand in April 2016.

  • (Note 7): AWID Sanghai Co., Ltd. was liquidated in July 2020.

  • (Note 8): Investment in Changshu Chief Leading Edge Construction Materials Co., Ltd. was completely sold in February 2013. Investment amount and earnings were received. Investment in Jiangsu J & Y Engineering Co., Ltd. was liquidated in 2012. Thus:

    • (1) Accumulated investment of NT$ 498,539 thousand by investees in China that were disposed of.

    • (2) Investment gains received from China investees that were disposed: NT$ 69,518 thousand.

  • (2) Significant transactions between the Company and investees in Mainland China during January 1 and December 31, 2020, directly or indirectly through the third area are as follows:

  • Significant transactions between the Company and investees in China: Table 7 attached ~ Table 8 attached in Note 13.

  • Financing between the Company and investees in China: Table 1 attached in Note 13.

  • Endorsement and guarantee provided by the Company for investees in China: Table 2 attached in Note 13.

－272－

TABLE 12

Yieh Phui Enterprise Co., Ltd. and Subsidiaries Information of Major Shareholders December 31, 2020

Name of major shareholder Number of shares Percentage of ownership (%)
Yieh United Steel Corporation 302,105,336 15.97%
Weiqiao Investment Development Co., Ltd. 205,719,551 10.88%
Wei Hong Investment Development Co., Ltd. 100,188,532 5.29%

Note: The information of major shareholders is based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (included treasury shares) by the Company as of December 31, 2020. The share capital in consolidated financial report may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

－273－

14. Segment Information

(1)General information

For the purpose of management, the Group separates its operations based on business unit and has four reportable segments as below:

  • Business Unit Yieh Phui: Primarily engaging in manufacturing and marketing of coated steel and manufacturing and installation of crane.

  • Business Unit Yieh Hsing: Primarily engaging in manufacturing and marketing of steel pipe, steel sheet, and wire rods.

  • Business Unit Yieh Phui (China, including Yieh Phui Hong Kong): Primarily engaging in manufacturing and marketing of coated steel.

  • Other business units: Primarily engaging in manufacturing and marketing of steel, iron, and military supplies, wholesale of telecommunication equipment, and investment business.

(2) Measurement basis

Management monitors the operation results of its segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss before tax and is measured consistently with profit or loss before tax in the consolidated financial statements. Furthermore, because the information of assets and liabilities is not reported to the chief operating decision maker for operation decision making, segment assets and liabilities are not disclosed. The accounting policies for reportable segments are the same as Group’s accounting policies described in Note 2.

(3) Segment information details:

－274－

Year 2020
Sales from external
customers
Sales among
intersegments
Total sales
Operating income
(loss)
Non-operating
income and
expenses
Loss before
income tax
Income tax
benefit
Net loss
Total assets
Total liabilities
Year 2019
Sales from external
customers
Sales among
intersegments
Total sales
Operating income
(loss)
Non-operating
income and
expenses
Loss before
income tax
Income tax
benefit
Net loss
Total assets
Total liabilities		 Business
Unit Yieh
Phui
$19,990,323
970,859
$20,961,182
$390,938
Business
Unit Yieh
Phui
$23,892,475
1,138,427
$25,030,902
$(519,522)		 Business
Unit Yieh
Hsing
$5,589,791
-
$5,589,791
$(321,838)
Business
Unit Yieh
Hsing
$6,552,804
－
$6,552,804
$(477,681)		 Business
Unit Yieh
Phui(China)
$24,939,377
1,390,254
$26,329,631
$1,228,376
Business
Unit Yieh
Phui(China)
$23,326,516
1,421,521
$24,748,037
$138,186		 All other
business
units
$4,950,243
86,062
$5,036,305
$(167,409)
All other
business
units
$6,063,079
452,295
$6,515,374
$(37,165)		 Elimination
$(47,939)
(2,447,175)
$(2,495,114)
$3,019
Elimination
$(147,277)
(3,012,243)
$(3,159,520)
$989		 Total
$55,421,795
-
$55,421,795
$1,133,086
(550,296)
$582,790
(65,202)
$517,588
$84,032,370
$56,201,256
Total
$59,687,597
－
$59,687,597
$(895,193)
(1,090,273)
$(1,985,466)
285,181
$(1,700,285)
$83,752,862
$56,302,942

－275－

(4) Information on product and service:

Revenue derived from main goods and services provided by the Company’s continuing operations are classified by business segment. Please refer to disclosure of revenue by business segment.

(5) Geographical information:

Geographical information:
Area
Sales from external customers:
Taiwan
US
Asia
Europe
Others
Total
Area
Non-current assets:
Taiwan
China
Others
Total		 Year Ended December 31
2020
2019
$15,667,333
$18,261,199
4,759,271
5,767,800
30,689,670
28,877,668
4,270,816
6,672,707
34,705
110,223
$55,421,795
$59,689,597
Year Ended December 31		 2019
$18,261,199
5,767,800
28,877,668
6,672,707
110,223
$59,689,597
2020
$45,021,757
15,307,015
750,018
$61,078,790		 2019
$43,076,902
15,449,795
873,472
$59,400,169

(6) Major customer information: No customer has reached the disclosure standard.

－276－

V. Parent Company Only Financial Statement for the Most Recent Fiscal Year

==> picture [101 x 30] intentionally omitted <==

國富浩華聯合會計師事務所 Crowe (TW) CPAs 80250高雄市苓雅區四維三路6 號27樓之1 27F-1., No.6, Siwei 3rd Rd., Lingya Dist., Kaohsiung City 80250, Taiwan Tel +886 7 3312133 Fax +886 7 3331710 www.crowe.tw

Independent Auditors’ Report

To the Board of Directors and Shareholders Yieh Phui Enterprise Co., Ltd.

Opinion

We have audited the accompanying standalone balance sheets of Yieh Phui Enterprise Co., Ltd. (the “Company") as of December 31, 2020 and 2019, and the standalone statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the standalone financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the report of the other independent accountants, as described in the other matters section of our report, the accompanying standalone financial statements present fairly, in all material respects, the standalone financial position of the Company as of December 31, 2020 and 2019, and its standalone financial performance and its standalone 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 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 standalone 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 and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the report of other independent accountants, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

Key audit matters for the Company's standalone financial statements for the year ended December 31, 2020 are stated as follows:

－277－

Revenue recognition

Please refer to Note 4.18 to the standalone financial statements for the accounting policy on revenue recognition; Note 5.1.(1) for major accounting estimates and assumptions of revenue recognition; and Note 6.26 for the details of revenue recognition.

Description of key audit matter

Due to fierce competition in the industry, the Company may be affected by the growth of its performance and competition in the same industry, which increases the risk of recognition of operating income. Therefore, we determined the revenue recognition for those product lines and customers with significant sales increase in 2020 as a key audit matter.

How the matter was addressed in our audit

Our key audit procedures included analyzing the industry trends, income types, product lines, and customers' two-year operating income status to confirm whether there are abnormal circumstances or centralized transactions and identify possible risks; understanding and testing the internal control procedure to assess the effectiveness of the relevant internal control for revenue recognition; conducting a sample test on the sales transactions of the top ten new customers to confirm the sales transaction actually occured and performing sales cutoff test.

Valuation of inventory

Please refer to Note 4.7 to the standalone financial statements for the accounting policy on inventories; Note 5.2.(6) for major accounting estimates and assumptions of inventories; and Note 6.6 for inventory valuation.

Description of key audit matter

The Company's inventory amounted to $3,351,119 thousand (net of $3,352,306 thousand of total inventory less $1,187 thousand of allowance for inventory valuation loss) as of December 31, 2020, which accounted for 7.32% of total assets. The inventory valuation is measured at the lower of inventory cost and net realizable value. Given that the valuation of net realizable value of inventory has a significant impact on critical judgments and estimates and since inventory valuation is dependent on the influence of drastic fluctuations of international metal price, we have thus included this item in the key audit matters.

How the matter was addressed in our audit

Our key audit procedures included obtaining management’s assessment data which determines the lower of inventory cost and net realizable value; sampling estimated selling prices to the most recent sales records; and assessing the appropriateness of management's basis for estimating the net realizable value.

Other Matters

We did not audit the financial statements of certain associates accounted for using equity method. Those financial statements were audited by the other independent accountants, whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the standalone financial statements was based solely on the reports of the other independent accountants. Investments in these associates amounted to $4,518,839 thousand and $4,704,770 thousand, representing 9.87% and 9.87% of total standalone assets as of December 31, 2020 and 2019, and the share of profit of these

－278－

associates accounted for using equity method amounted to $(175,775) thousand and $17,477 thousand, representing (20.99%) and (1.00%) of total standalone income before income tax for the years then ended, respectively. In addition, the share of other comprehensive income of these associates accounted for using equity method amounted to $(10,372) thousand and $(857) thousand, representing (13.29%) and 0.25% of total standalone comprehensive income for the years then ended, respectively.

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

Management is responsible for the preparation and fair presentation of the standalone 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 the standalone financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors' Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone 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 standalone financial statements.

As part of an audit in accordance with the 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 standalone 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.

－279－

  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 standalone 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 standalone financia1 statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  5. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the standalone 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.

We also provide those charged with governance with a statement that we have complied with relevant ethica1 requirements regarding independence, and to communicate with them all re1ationships 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 standalone 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.

－280－

The engagement partners on the audit resulting in this independent auditors’ report are Ling Wen Huang and Shu Man Tsai.

Crowe (TW) CPAs Kaohsiung, Taiwan Republic of China March 24, 2021

Notice to Readers

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

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

－281－

YIEH PHUI ENTERPRISE CO., LTD STANDALONE BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

Assets
CURRENT ASSETS
Cash and cash equivalents
Financial assets at fair value through profit
or loss - current
Contract assets - current
Notes receivable, net
Accounts receivable, net
Accounts receivable - related parties, net
Other receivables
Current tax assets
Inventories
Prepayments
Noncurrent assets held for sale
Other financial assets - current
Total Current Assets
NONCURRENT ASSETS
Financial assets at fair value through profit
or loss - noncurrent
Financial assets at fair value through other
comprehensive income or loss - noncurrent
Investments accounted for using equity method
Property, plant and equipment
Right-of-use assets
Investment properties
Deferred tax assets
Refundable deposits
Other financial assets - noncurrent
Total Noncurrent Assets
TOTAL ASSETS		 Note
6(1)
6(2)
6(26)
6(3)
6(4)
7
6(5)
6(6)
6(7)
6(8)
8
6(2)
6(9)
6(10)
6(11)
6(12)
6(13)
6(32)
6(14)
8		 December 31,2020
Amount
%
$ 338,824
1
234,138
1
322,636
1
27,788
-
1,101,844
2
234,163
1
110,574
-
99
-
3,351,119
7
231,594
1
159,832
-
164,162
-
6,276,773
14
-
-
690,916
2
29,773,995
65
7,108,161
14
298,214
1
443,349
1
705,423
2
422,407
1
46,238
-
39,488,703
86
$45,765,476
100		 December 31,2019 December 31,2019
Amount
$ 338,824
234,138
322,636
27,788
1,101,844
234,163
110,574
99
3,351,119
231,594
159,832
164,162
6,276,773
-
690,916
29,773,995
7,108,161
298,214
443,349
705,423
422,407
46,238
39,488,703
$45,765,476		 Amount
$ 665,530
307,571
740,413
4,936
1,099,058
250,730
162,291
48
3,314,013
175,341
23,342
55,236
6,798,509
220,577
704,405
29,201,599
7,386,910
303,393
964,339
799,215
1,139,390
160,138
40,879,966
$47,678,475		 %
1
1
2
-
2
1
-
-
7
-
-
-
14
-
1
62
15
1
2
2
3
-
86
100

－282－

Liabilities and Equity
CURRENT LIABILITIES
Short-term loans
Short-term notes and bills payable
Contract liabilities - current
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Provisions - current
Liabilities directly associated with noncurrent
assets held for sale
Lease liabilities - current
Current portion of long-term loans
Total Current Liabilities
NONCURRENT LIABILITIES
Long-term loans
Lease liabilities - noncurrent
Net defined benefit liability - noncurrent
Guarantee deposits
Total Noncurrent Liabilities
Total Liabilities
Share capital
Share capital
Common stock
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Other equity
Total Equity
TOTAL LIABILITIES AND EQUITY		 Note
6(15)
6(16)
6(26)
7
6(17)
6(18)
6(8)
6(12)
6(19)
6(19)
6(12)
6(20)
6(21)
6(22)
6(23)
6(24)		 December 31,2020
Amount
%
$ 7,911,299
18
599,115
1
515,069
1
345,662
1
405,811
1
6,031
-
463,749
1
52,176
-
70,000
-
10,307
-
1,988,415
4
12,367,634
27
6,324,384
14
199,663
-
402,584
1
2,000
-
6,928,631
15
19,296,265
42
18,905,695
41
4,929,007
11
2,866,052
7
559,232
1
163,734
-
(954,509)
(2)
26,469,211
58
$45,765,476
100		 December 31,2019 December 31,2019
Amount
$ 7,911,299
599,115
515,069
345,662
405,811
6,031
463,749
52,176
70,000
10,307
1,988,415
12,367,634
6,324,384
199,663
402,584
2,000
6,928,631
19,296,265
18,905,695
4,929,007
2,866,052
559,232
163,734
(954,509)
26,469,211
$45,765,476		 Amount
$ 8,136,122
598,840
500,945
615,689
496,418
339,516
401,777
50,819
7,630
9,639
1,636,335
12,793,730
8,319,270
209,141
504,003
2,100
9,034,514
21,828,244
19,133,275
4,884,281
2,866,052
559,232
(614,438)
(978,171)
25,850,231
$47,678,475		 %
18
1
1
1
1
1
1
-
-
-
3
27
18
-
1
-
19
46
40
10
6
1
(1)
(2)
54
100

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

－283－

YIEH PHUI ENTERPRISE CO., LTD.

STANDALONE STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE
OPERATING COST
GROSS PROFIT
OPERATING EXPENSES
Selling and marketing expenses
General and administrative expenses
Total operating expenses
INCOME (LOSS) FROM OPERATIONS
NON-OPERATING INCOME AND EXPENSES
Interest income
Other income
Other gains and losses
Finance costs
Share of profit (loss) of subsidaries, associates and joint ventures
Total non-operating income and expenses
INCOME (LOSS) BEFORE INCOME TAX
INCOME TAX BENEFIT(EXPENSES)
NET INCOME (LOSS)
OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit plans
Unrealized gain (loss) on investments in equity instruments
designated as at fair value through other comprehensive Income
Share of other comprehensive income (loss) of subsidiaries,
associates and joint ventures
Income tax benefit (expense) related to items that will not be
reclassified subsequently to profit or loss
Items that may be reclassified subsequently to profit or loss:
Share of other comprehensive income (loss) of subsidiaries,
associates and joint ventures
Income tax benefit (expense) related to items that may
be reclassified subsequently to profit or loss
Total other comprehensive income (loss), net of income tax
TOTAL COMPREHENSIVE INCOME (LOSS)
EARNINGS PER SHARE
Basic earnings (loss) per share
Diluted earnings (loss) per share		 Note Year Ended December 31 Year Ended December 31 Year Ended December 31
2020 2019
Amount % Amount %
6(26)
6(6)
6(28)
6(29)
6(30)
6(31)
6(32)
6(33)
6(34)
6(34)		 $20,936,210
(19,419,910)
100
(93)		 $24,971,014
(24,305,157)		 100
(97)
1,516,300
(824,390)
(323,542)
7

(3)

(2)		 665,857
(905,328)
(332,784)		 3
(4)
(1)
(1,147,932)
(5)		 (1,238,112) (5)
368,368
2		 (572,255) (2)
73,103
429,017
649,638
(382,190)
(300,571)		 -

2

3
(2)
(1)		 10,799
526,172
671,353
(430,122)
(1,946,275)		 -
2
3
(2)
(8)
468,997 2 (1,168,073) (5)
837,365
(102,127)
4
-		 (1,740,328)
339,247		 (7)
1
735,238
4		 (1,401,081) (6)
37,591
(12,402)
157,828
(7,518)
(73,460)
(23,984)		 -

-

-

-
-
-		 55,074
(16,454)
(5,131)
(11,015)
(439,459)
72,875		 -
-
-
-
(2)
(1)
78,055 - (344,110) (1)
$813,293
4		 $(1,745,191) (7)
$0.39 $ (0.73)
$0.39 $ (0.73)

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

－284－

YIEH PHUI ENTERPRISE CO., LTD. STANDALONE STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

Item
BALANCE AT JANUARY 1, 2019
Appropriations of prior year's earnings:
Legal reserve
Cash dividends to ordinary shareholders
Capital increase out of retained earning
Reversal of special reserve
Changes in associates and joint ventures using the equity method
Net income (loss) for 2019
Other comprehensive income (loss) for 2019, net of income tax
Total comprehensive income (loss) for 2019
Difference between consideration and carrying
amount of subsidiaries acquired or disposed
Changes in ownership interests in subsidiaries
BALANCE AT DECEMBER 31, 2019
Changes in associates and joint ventures using the equity method
Net income (loss) for 2020
Other comprehensive income (loss) for 2020, net of income tax
Total comprehensive income (loss) for 2020
Buy-back of treasury shares
Cancellation of treasury shares
Difference between consideration and carrying
amount of subsidiaries acquired or disposed
Changes in ownership interests in subsidiaries
Disposal of financial instruments designated at fair value
through other comprehensive income
BALANCE AT DECEMBER 31, 2020		 Common Stock Capital Surplus Retained Earnings Other EquityItem TreasuryStock
$ -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(185,207)
185,207
-
-
-
$ -		 Total Equity
Legal Reserve Special Reserve Unappropriated
Earnings
(Accumulated
Deficits)		 Exchange
Differences on
Translating Foreign
Operations		 Unrealized Gain (Loss)
on Financial Assets at
Fair Value Through Other
Comprehensive Income		 Gain (loss) on
Hedginginstruments
$18,758,113
-
-
375,162
-
-
-
-		 $4,883,218
-
-
-
-
(73)
-
-		 $2,835,202
30,850
-
-
-
-
-
-		 $636,655
-
-
-
(77,423)
-
-
-		 $1,233,913
(30,850)
(187,581)
(375,162)
77,423
3,744
(1,401,081)
74,829		 $(723,803)
-
-
-
-
-
-
(366,243)		 $157,892
-
-
-
-
-
-
(52,355)		 $6,679
-
-
-
-
-
-
(341)		 $27,787,869
-
(187,581)
-
-
3,671
(1,401,081)
(344,110)
- - - - (1,326,252) (366,243) (52,355) (341) (1,745,191)
-
-		 1,136
-		 -
-		 -
-		 -
(9,673)		 -
-		 -
-		 -
-		 1,136
(9,673)
19,133,275
-
-
-		 4,884,281
(21)
-
-		 2,866,052
-
-
-		 559,232
-
-
-		 (614,438)
(1,339)
735,238
53,637		 (1,090,046)
-
-
(97,490)		 105,537
-
-
121,862		 6,338
-
-
46		 25,850,231
(1,360)
735,238
78,055
- - - - 788,875 (97,490) 121,862 46 813,293
-
(227,580)
-
-
-		 -
42,373
2,374
-
-		 -
-
-
-
-		 -
-
-
-
-		 -
-
-
(10,120)
756		 -
-
-
-
-		 -
-
-
-
(756)		 -
-
-
-
-		 (185,207)
-
2,374
(10,120)
-
$18,905,695 $4,929,007 $2,866,052 $559,232 $163,734 $(1,187,536) $226,643 $6,384 $26,469,211

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

－285－

YIEH PHUI ENTERPRISE CO., LTD.

STANDALONE STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

Item Year Ended December 31 Year Ended December 31
2020 2019
1.CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) before income tax
Adjustments to reconcile profit and loss:
Depreciation
Net loss (gain) on financial assets and liabilities at fair value
through profit or loss
Interest expense
Interest income
Dividend income
Share of loss (gain) of associates, subsidiaries and joint ventures
Loss on disposal and retirement of property, plant and equipment
Gain on disposal of investment properties
Gain on disposal of non-current assets held for sale
Gain on disposal of investments
Other income recognized from rent concessions
Others
Total adjustments to reconcile profit and loss
Changes in operating assets and liabilities
Net changes in operating assets:
Decrease (increase) in financial assets as at fair value through
profit or loss
Decrease (increase) in contract assets
Decrease (increase) in notes receivable
Decrease (increase) in accounts receivables
Decrease (increase) in accounts receivables - related parties
Decrease (increase) in other receivables
Decrease (increase) in inventories
Decrease (increase) in prepayments
Total net changes in operating assets
Net changes in operating liabilities:
Increase (decrease) contract liabilities
Increase (decrease) in notes payable
Increase (decrease) in accounts payable
Increase (decrease) in accounts payable - related parties
Increase (decrease) in other payables
Increase (decrease) in provisions
Increase (decrease) in net defined benefit liability
Total net changes in operating liabilities
Total net changes in operating assets and liabilities
Total adjustments
Cash generated from (used in) operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash generated from (used in) operating activities		 $ 837,365
509,644
(3,673)
382,190
(73,103)
(42,969)
300,571
10,968
(750,788)
(49,270)
-
(413)
3,252		 $ (1,740,328)

543,985
8,656

430,122
(10,799)
(105,987)

1,946,275

19,102
(341,433)
(401,121)
(20)
-
29,986
286,409 2,118,766
16,335
419,031
(22,943)
(3,886)
16,504
(332)
(37,106)
(41,153)		 26,837
(205,844)
24,052
(204,497)

460,991
97,835

469,891
98,840
346,450 768,105
14,124
(270,027)
(90,607)
(333,485)
47,937
1,357
(63,829)		 (325,886)
(10,826)
(207,374)
332,774
(59,659)
(17,139)
(53,082)
(694,530) (341,192)
(348,080) 426,913
(61,671) 2,545,679
775,694
73,452
219,732
(395,102)
(39,888)		 805,351
10,878
184,287
(428,214)
(150,981)
633,888 421,321

－286－

Item Year Ended December 31 Year Ended December 31
2020 2019
2.CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other
comprehensive income
Proceeds from capital reduction of financial assets at fair value
through other comprehensive income
Proceeds from disposal of financial assets at fair value through profit
or loss
Acquisition of investments accounted for using equity method
Proceeds from disposal of investments accounted for using equity
method
Proceeds from capital reduction of investments accounted for
using equity method
Acquisition of noncurrent assets held for sale
Proceeds from disposal of noncurrent assets held for sale
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Decrease (increase) in refundable deposits
Acquisition of right-of-use assets
Acquisition of investment properties
Proceeds from disposal of investment properties
Decrease (increase) in other financial assets
Net cash generated from (used in) investing activities
3.CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term loans
Increase (decrease) in short-term notes and bills payable
Increase in long-term loans
Repayment of long-term loans
Increase (decrease) in guarantee deposits received
Repayments of principal of lease liabilities
Cash dividends paid
Payments for buy-back of treasury shares
Net cash generated from (used in) financing activities
4.NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
5.CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
6.CASH AND CASH EQUIVALENTS, END OF YEAR		 $ (15,000)
16,087
284,488
(1,559,693)
-
581,023
(190)
137,461
(208,317)
-
716,983
(7,943)
(20,065)
1,178,282
4,974		 $ (15,000)

4,234

455,076
(1,556,286)
203

917,846
(1,652)

566,075
(287,888)
50
155,714
(1,187)
(13,930)
434,619
117,060
1,108,090 774,934
(224,823)
-
200,000
(1,848,307)
(100)
(10,247)
-
(185,207)		 507,740
100,000

-
(1,267,473)
100
(10,574)
(187,581)
-
(2,068,684) (857,788)
(326,706)
665,530		 338,467

327,063
$338,824
$665,530

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

－287－

YIEH PHUI ENTERPRISE CO., LTD. NOTES TO STANDALONE FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Amounts In Thousands of New Taiwan Dollars, Unless specified Otherwise)

1 GENERAL INFORMATION

  • 1.1 Yieh Phui Enterprise Co., Ltd. (hereinafter referred to as the Company) was established in April 1978, currently a listed company in Taiwan Stock Exchange (hereafter referred to as TWSE). The Company engages mainly in the processing, manufacturing marketing and import/export trading of rolled steel coils, refined steel, molded steel, steel/iron wires, galvanized/pre-painted/surface-treated metals.

  • 1.2 The Company’s Board of Directors resolved on May 23, 2005 to merge (simplified merger) with Lien Kang Heavy Industrial Co., Ltd, with the Company as the surviving company. The record date of the merger was set on August 30, 2005. Every 2.5 common shares of Lien Kang Heavy Industrial Co., Ltd. were converted into 1 common share of the Company. The Company issued additional 4,859 thousand common shares for this merger. Rights and obligations of holders of the newly issued shares were the same as those of the Company’s original shareholders.

  • 1.3 Lien Kang Heavy Industrial Co., Ltd., incorporated on November 23, 1989, mainly engages in manufacturing, processing and trading of the various mechanical spare parts, as well as pipe installation and engineering design /manufacture / installation.

  • 1.4 The Company's steel pipe department, due to its business expansion, was separated from the Company, and was named as Shin Yang Steel Co., Ltd.. Relevant investment on this was approved by the Board of Directors on January 18, 2011, and a total of 191 employees were transferred to Shin Yang Steel Co., Ltd.

  • 1.5 These standalone financial statements are presented in the Company’s functional currency, New Taiwan Dollars.

  • 2 THE AUTHORIZATION OF THE STANDALONE FINANCIAL STATEMENTS The accompanying standalone financial statements were approved and authorized for issue by the Board of Directors on March 24, 2021.

3 APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

  • 3.1 Effect of adoption of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of SIC (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

New standards, interpretations and amendments endorsed by FSC effective from 2020 are as follows:

－288－

Effective date New, Revised or Amended Standards and Interpretations Announced by IASB Amendments to IFRS 3 “Definition of a Business” January 1, 2020 Amendments to IAS 1 and IAS 8 “Definition of Material” January 1, 2020 Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate January 1, 2020 Benchmark Reform” Amendments to IFRS 16 “New Coronavirus Pneumonia June 1, 2020 (Note) Related Rent Concessions”

  • (Note) The FSC allows companies to apply the amendment in advance on January 1, 2020.

The Company has assessed the aforementioned standards and interpretations, and there’s no significant effect to the Company’s financial position and financial performance.

3.2 Effect of new issuances or amendments to IFRSs as endorsed by the FSC but not yet adopted

New standards, interpretations and amendments endorsed by the FSC effective from 2021 are as follows:

2021 are as follows:
New,Revised or AmendedStandards and Interpretations
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”		 Effective Date
Announced byIASB
June 25, 2020 (Effective
from issue date)
January 1, 2021 (Note)

(Note) The amendments are applicable for the annual reporting period beginning on or after January 1, 2021.

The Company has evaluated the aforementioned standards and interpretations, and there’s no significant effect to the Company’s financial position and financial performance.

3.3 Effect of IFRSs issued by IASB but not yet endorsed and issued into effect by FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

in the IFRSs as endorsed by the FSC are as follows:
New,Revised or Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of
Assets between an Investor and its Associate or Joint
Venture”
IFRS 17 “Insurance Contracts”
Amendments to IFRS 17
Amendments to IAS 1 “Classification of Liabilities as Current
or Non-current”
Amendments to IAS 16 “Property, Plant and Equipment-
Proceeds before Intended Use”
Amendments to IAS 37 “Onerous Contract - Cost of Fulfilling		 Effective Date
Announced by IASB
(Note 1)
To be determined by
IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022 (Note 2)
January 1, 2022 (Note 3)

－289－

Effective Date Announced by IASB (Note 1)

New, Revised or Amended Standards and Interpretations a Contract”

Amendments to IFRS 3 “Reference to the Conceptual January 1, 2022 (Note 4) Framework” Annual Improvements to IFRS Standards 2018-2020 January 1, 2022 (Note 5) Amendments to IAS 1 “Disclosure of Accounting Policies” January 1, 2023 Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023

  • Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

  • Note 2: Companies should apply these amendments retrospectively. However, the amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

  • Note 3: This amendment applies to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

  • Note 4: This amendment applies to business combinations whose acquisition date starts in the annual reporting period after January 1, 2022.

  • Note 5: The amendments to IFRS 9 are applicable to swap or modification of terms of financial liabilities incurred during the annual reporting period beginning on January 1, 2022. The amendment to IAS 41 is applicable to fair value measurement during the annual reporting period beginning after January 1, 2022. The amendments to IFRS 1 are retrospectively applied to the annual reporting period beginning after January 1, 2022.

  • A. Amendments to IAS 1 “Classification of Liabilities as Current or Noncurrent” The amendments clarify that when the Company judges whether liability is classified as noncurrent, the Company should assess whether the Company has the right to defer liquidation period after the reporting period at least twelve months. If the Company has the entity’s right on the end of the reporting period, liability must be classified as non-current whatever the Company expects whether executing the right or not. If the Company must follow certain condition to obtain the right to defer settlement of liability, the Company must have completed certain condition on the end of reporting period even if lender tests the Company whether following certain condition later. The aforementioned liquidation means that transferring cash, other economic resources or the Company’s equity instruments to counterparty to let liability wipe out. If liability clause will follow counterparty’s choice to liquidate liability by the Company’s equity instruments, this option must follow the regulations of IAS 32 “Financial Instruments: Presentation” to be recognized in equity individually and doesn’t have affect on the classification of liability.

  • B. Amendment to IAS 16 “Property, Plant and Equipment: Proceeds before Intended Use”

  • The amendment stipulates that the sales price of the project produced in order to make property, plant and equipment reach the necessary location and state that

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can meet the expected operation mode of the management is not suitable as a cost reduction of the asset. The aforementioned items should be measured in accordance with IAS 2 “Inventory”, and the sales price and cost should be recognized in profit and loss in accordance with the applicable standards.

This amendment is applicable to factories, property and equipment that reach the necessary locations and conditions for the management's expected operation mode after January 1, 2021 (the beginning of the earliest expression period). When the Company initially applies the amendments, it will recognize the cumulative effect of the amendments applied initially as an adjustment to the opening balance of the retained earnings (or other components of equity, as appropriate) at the beginning of the earliest expression period , and re-edit the information during the comparison period.

  • C. Amendment to IAS 37 “Onerous Contract - Cost of Fulfilling a Contract”

  • The amendment stipulates that when assessing whether the contract is onerous, “Cost of Fulfilling a Contract” should include the incremental cost of fulfilling a contract (for example, direct labor and raw materials) and the allocation of other costs directly related to fulfilling a contract (for example, the depreciation expenses of property, plant and equipment items used in fulfilling a contract are allocated).

The Company will recognize the cumulative effect on the retained earnings on the first application date when the amendment is first applied.

  • D. Amendment to IFRS 3“Reference to the Conceptual Framework”

  • The amendment is to update the index of the conceptual framework and add the requirement that the acquirer shall apply IFRIC 21“Levies”to determine whether there is an obligation to pay levies on the acquisition date.

  • E. Annual Improvements to IFRS Standards 2018-2020

  • The annual improvement in the IFRS 2018-2020 includes amendments to certain standards. Among them, the amendment of IFRS 9 “Expenses included in the “10%” test for the purpose of derecognise financial liabilities” is to assess whether there is a significant difference between the swap of financial liabilities or the modification of terms, When comparing cash flow projections of the new and old contract terms (including the net amount of fees charged for signing a new contract or modifying the contract), whether there is a 10% difference, the aforesaid fees collected should only include the payment between the borrower and the lender paid for.

  • F. Amendments to IAS 1 ‘’Disclosure of Accounting Policies’’

  • This amendment is to improve the disclosure of accounting policies and provide more useful information for major users of financial statements.

  • G. Amendments to IAS 8 ‘’Definition of Accounting Estimates’’

  • This amendment defines accounting estimates as the monetary amount of financial statements subject to measurement uncertainty, and provides further explanations and examples to help companies distinguish between changes in accounting policies and changes in accounting estimates.

As of the date the parent company only financial statements were issued, the Company continues in evaluating the impact on its financial position and financial performance as a result of the initial adoption of the aforementioned standards or

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interpretations and related applicable period. The related impact will be disclosed when the Company completes the evaluation.

4 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these standalone financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

4.1 Statement of Compliance

The accompanying standalone financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

4.2 Basis of Preparation

  • (1) Except for the following items, the standalone financial statements have been prepared under the historical cost convention:

  • A. Financial assets and financial liabilities at fair value through profit or loss (including derivative instruments).

  • B. Financial assets and liabilities measured at fair value through other comprehensive income.

  • C. Liabilities on cash-settled share-based payment arrangements measured at fair value.

  • D. Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

  • (2) The preparation of the standalone financial statements in conformity with the IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the standalone financial statements are disclosed in Note 5.

  • (3) When preparing the standalone financial statements, the Company account for subsidiaries, associates and joint ventures by using the equity method. In order to agree with the amount of net income, other comprehensive income and equity attributable to shareholders of the parent in the standalone financial statements, the differences of the accounting treatment between the standalone basis and the consolidated basis are adjusted under the heading of investments accounted for using equity method, share of profits of subsidiaries, associates and joint ventures and share of other comprehensive income of subsidiaries, associates and joint ventures in the standalone financial statements.

4.3 Foreign Currencies

  • (1) Foreign currency transactions and balance

  • A. Foreign currency transactions are translated into the functional currency using the exchange rates on the trade dates or measurement date. Therefore, foreign exchange differences resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

  • B. Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

  • C. Non-monetary items measured at fair value that are denominated in foreign

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currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising on 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 in terms of historical cost in foreign currencies are not retranslated.

  • (2) Translation of foreign operations

  • A. The operating results and financial position of all the Company’s subsidiaries, associates and joint ventures that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

    • (a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

    • (b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

    • (c) All resulting exchange differences are recognized in other comprehensive income.

  • B. When the foreign operation partially disposed of or sold is an associate, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Company retains partial interest in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.

  • C. When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Company retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

4.4Classification of Current and Noncurrent Assets and Liabilities

(1) Steel Department

  • A. Assets that meet one of the following criteria are classified as current assets:

  • a. Assets that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

  • b. Assets held primarily for trading purposes;

  • c. Assets that are expected to be realized within 12 months after the balance sheet date;

  • d. Cash and cash equivalents, excluding those that are restricted, or to be exchanged or used to settle liabilities at least twelve months after the balance sheet date.

Otherwise they are classified as non-current assets.

  • B. Liabilities that meet one of the following criteria are classified as current liabilities:

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  - a. Liabilities that are expected to be settled within the normal operating cycle;

  - b. Assets held primarily for trading purposes;

  - c. Liabilities that are expected to be settled within 12 months after the balance sheet date. (Even if a long-term refinancing or re-arrangement of payment agreements is completed after the balance sheet date and before the issuance of the financial report is approved, it is classified as current liabilities).

  - d. Liabilities for which the repayment date cannot be extended unconditionally to more than 12 months after balance sheet date. 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.

  - Otherwise they are classified as non-current liabilities

  • (2) Heavy Industry Department

  • The business cycle of the majority of the construction contracts is longer than 12 months. As a result, assets and liabilities related to the construction contracts are classified as current or non-current assets and liabilities according to the business cycle.

4.5 Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value (including the original maturity of the time deposits within three months).

4.6 Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. 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.

  • (1) Financial assets

The Company adopts trade-date accounting to recognize and derecognize financial assets.

  • A. Category of financial assets and measurement

  • Financial assets are classified into the following categories: financial assets at FVTPL, financial assets at amortized cost, and investments in equity instruments at FVTOCI.

  • a. Financial asset at FVTPL

    • Financial asset is classified as at FVTPL when the financial asset is mandatorily classified or it is designated as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria. Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividends or interest earned on such a financial asset. Fair value is determined in the manner described in Note 12(3).

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  • b. Financial assets at amortized cost

  • Financial assets that meet the following conditions are subsequently measured at amortized cost:

  • (a) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

  • (b) The contractual terms of the financial assets give rise on specified date to cash flow that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss. Except for the following two cases, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset. 

  - (a) Purchased or originated credit-impaired financial assets: for those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

  - (b) Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets: for those financial assets, the Company shall apply the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

  • c. Investments in equity instruments at FVTOCI

    • On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

    • Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, they will be transferred to retained earnings.

    • Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the Company’s right clearly represent a recovery of part of the cost of the investment.

  • B. Impairment of financial assets

  • a. At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable), investments in debt instruments that are measured at FVTOCI, lease receivable and contract assets.

  • b. The Company always recognizes lifetime Expected Credit Loss (i.e. ECL) for accounts receivables. For other financial assets, the Company recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial

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recognition, the Company measures the loss allowance for that financial instrument at an amount equaling to 12-month ECL.

  • c. Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. In contrast, lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.

  • d. The Company recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account.

  • C. Derecognition of financial assets

  • The Company derecognises a financial asset when one of the following conditions is met:

  • a. The contractual rights to receive cash flows from the financial asset expire.

  • b. The contractual rights to receive cash flows from the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.

  • c. The Company neither retains nor transfers substantially all risks and rewards of ownership of the financial asset; however, it has not retained control of the financial asset.

On derecognition of financial asset at amortized cost in its entirety, the difference between the financial asset’s carrying amount and the sum of the consideration received is recognized in profit or loss. On derecognition of equity instruments at fair value through other comprehensive income in its entirety, the cumulative profit and loss will be transferred directly to retained earning without reclassified into profit and loss.

  • (2) Equity instruments

The Company classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability and an equity instrument.

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

  • (3) Financial liabilities

  • A. Subsequent measurement

    • All financial liabilities are measured at amortised cost using the effective interest method.

  • B. Derecognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

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4.7 Inventories

  • Inventories, under a perpetual system, are measured at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

4.8 Noncurrent assets held for sale

When the carrying amount of non-current assets (or disposal categories) is mainly recovered through a sale transaction rather than continued use, and is highly likely to be sold, it is classified as an asset held for sale. Assets classified as noncurrent assets held for sale are measured at the lower of the carrying amount and fair value less costs to sell.

4.9 Investments accounted for using equity method / subsidiaries and associates

  • (1) Subsidiary are all entities controlled by the Company (including structured entities) .The Company controls an entity when the Company is exposed, or variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

  • (2) Unrealized gains or losses resulting from inter-company transactions with subsidiaries are eliminated. Necessary adjustments are made to the accounting policies of subsidiaries, to be consistent with the accounting policies of the Company.

  • (3) The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognize its share in the subsidiary’s loss proportionately.

  • (4) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transaction with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

  • (5) When the Company loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Company had directly disposed of the related assets or liabilities.

  • (6) Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence,

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if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for under equity method and are initially recognized at cost.

  • (7) The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

  • (8) Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

  • (9) In the case where an associate issues new shares and the Company does not subscribe or proportionately acquire the new shares, which results in a change in the Company’s ownership percentage of the associate while maintains significant influence on the associate, then “Capital surplus” and “Investments accounted for using under the equity method” shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

  • (10)When the Company disposes of its investment in an associate, if it loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

  • (11)According to “Regulations Governing the Preparation of Financial Statements by Securities Issuers”, profit for the year and other comprehensive income for the year reported in the standalone financial statement, shall equal to profit for the year and other comprehensive income attributable to owners of the parent reported in the standalone financial statements, equity reported in the standalone financial statements shall equal to equity attributable to owners of parent reported in the standalone financial statements.

4.10 Property, Plant and Equipment

  • (1) Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

  • (2) Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic

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benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repair and maintenance is recognized in profit or loss as incurred.

  • (3) Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each end of reporting year. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change.

The estimated useful lives of property, plant and equipment are as follows: Buildings

Buildings
Main plants 40 to 55 years
Main office buildings 40 to 60 years
Other accessory equipment 8 to 35 years
Machinery and equipment 2 to 38 years
Other equipment 3 to 32 years
  • (4) An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on 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.

4.11 Leases

  • The Company assesses whether the contract is (or includes) a lease at the date of the contract.

  • (1) The Company as lessee

  • Except for payments for low-value asset and short-term leases which will be recognized as expenses on a straight-line basis, the Company will recognize right-of-use assets and lease liabilities for all leases at the inception of lease. Right-of-use asset

The right-of-use asset is initially measured at cost (including the initial measurement amount of the lease liability, the payments less incentives, initial direct costs and the estimated recover cost), the subsequent measurement is based on the cost less accumulated depreciation and accumulated impairment loss, and adjusting the amount of re-measures of lease liabilities.

The right-of-use asset recognized depreciation is using the straight-line basis from the date of the lease until the expiration of the useful life or the expiration of the lease term, the depreciation is provided that the title of the underlying asset will be acquired at the end of the lease period or, if the cost of the right-ofuse asset reflects the execution of the purchase option Lease liability

The lease liability is initially measured by the present value of the lease payment (including fixed payment, substantive fixed payment, change in lease payment

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depending on the index or rate, etc.). If the implied interest rate on the lease is easy to determine, the lease payment is discounted using that interest rate. If the interest rate is not easy to determine, the lessee's increase borrowing rate is used. If the lease period, the evaluation of the purchase choice, the amount of expected to be paid under the residual value guarantee or the change in the index or rate used to determine the lease payment result in a change in the future lease payment, the Company will measure the lease liability and adjust the right to use assets relatively. If the carrying amount has been reduced to zero, the remaining amount will recognize in the profit and loss. Lease liabilities are presented in a single-line project on the standalone balance sheet.

Lease payments in lease agreements that do not depend on the index or rate are recognized as expenses in the period in which they occur.

  • (2) The Company as lessor

  • Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

  • Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

4.12 Investment properties

  • Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes) and include land held for a currently undetermined future use.

Investment properties are initially measured at cost, including transaction costs, and subsequently measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

Investment properties under construction are stated at cost less accumulated impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Depreciation of these assets commences when the assets are ready for their intended use.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

4.13 Impairment of non-financial assets

  • The Company assesses at the end of reporting period the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. When the indication of impairment loss recognized in prior years for an asset other than goodwill no longer exists, the impairment loss is reversed to the extent of the loss previously recognized in profit or loss.

4.14 Provisions

  • Provisions (including short-term employee benefits, and onerous contracts) are recognised when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will

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be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date. The discount rate (or rates) shall be a pre-tax rate (or rates) that reflect(s) current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognised as interest expense. Provisions are not recognised for future operating losses.

4.15 Employee benefits

Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expenses in that period when the employees render service.

Pensions

  • (1) Defined contribution plans

For defined contribution plans, the contributions are recognised as pension expenses when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund from the plan or a reduction in future contributions to the plan.

  • (2) Defined benefit plans

  • a. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior period. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The discount rate is determined by using the interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the defined benefit plans.

  • b. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

  • c. Past-service costs are recognised immediately in profit or loss.

Employees’ compensation and directors’ and supervisors’ remuneration

Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expenses and liabilities, provided that such recognition is required under legal or constructive obligations and those amounts can be reliably estimated. Any difference between the amount accrued and the amount actually distributed is accounted for a change in accounting estimate.

Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of an employee’s employment as a result of either the Company’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of benefits in exchange for the termination of employment. The Company recognises expense when it can no longer withdraw an offer of termination benefits or when it recognises related

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restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date are discounted to their present value.

4.16 Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are recognized in equity as a deduction from the proceeds.

4.17 Income tax

  • (1) The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

  • (2) The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

  • (3) Deferred income tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.

  • (4) Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred income tax assets are reassessed.

  • (5) Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

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  • (6) A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

4.18 Revenue Recognition

  • The Company recognizes revenue from contracts with customers in accordance with the principles and steps as stated below:

  • (1) Identify the contract with the customer;

  • (2) Identify the performance obligations in the contract;

  • (3) Determine the transaction price;

  • (4) Allocate the transaction price to the performance obligations in contracts; and

  • (5) Recognize revenue upon satisfaction of performance obligations.

The Company does not adjust the transaction price in a contract for the effects of a significant financing component, if the period between when the customer pays for the goods or services and when the entity transfers the goods or services is one year or less.

  • (1) Sale of goods

Sales revenue from goods mainly comes from the sales of galvanized steel coils and painted steel coils. Sales revenue is recognized when the control of goods is passed to customers. Since customers have obtained the right to set the price and make use of the goods and assumed the responsibility for resale and risks of obsolescence, the Company recognizes revenue and accounts receivable at such time point, presented as the net amount after deducting sales returns, discounts and allowance. When supplying materials for processing, control of the processed goods is not transferred, in which case it is not recognized as revenue.

  • (2) Service revenue

Service revenue is recognized when the service is rendered. Revenue from service rendered in accordance with contracts is recognized in proportion to the completion of a contract.

  • (3) Revenue from construction contracts

A real estate contract is a construction contract under which the real estate units have been controlled by customers in the process of construction, in which case the Company recognizes revenue over time. Since construction costs are directly related to the stage of completion of performance obligations, the Company measures the stage of completion by the ratio of real costs incurred to date to total expected costs. The Company recognizes contract assets over the construction period, and transfers them to accounts receivables upon billing the customers. Where the construction proceeds received exceed the recognized amount, the difference is recognized as contract liability. Construction retainage, which is the amount withheld by customers in accordance with the contractual terms in order to assure that the Company will satisfy its contractual obligation, is recognized as a contract asset before the Company completes its performance obligation. If the outcome of the performance obligations cannot be measured reliably, construction revenue is recognized only to the extent of the expenses incurred for satisfaction of performance obligations that are expected to be recovered.

－303－

  • (4) Revenue from leases, dividends and interests

  • A. The rental revenue shall be recognized as revenue in the duration of the lease based on straight-line method.

  • B. Dividend revenue from investments is recognized when the rights of shareholders to receive payment are established, provided that the economic profits arising from such transaction are highly probable to flow to the Company and the amount of such benefits can be reliably measured.

  • C. Interest revenue is recognized based on outstanding principal and applicable effective interest according to passage of time on an accrual basis.

4.19 Borrowing costs

  • Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of those assets until substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.

To the extent that an entity borrows funds specifically for the purpose of obtaining a qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalisation as the actual borrowing costs incurred on that borrowing during the period less any investment income on the temporary investment of those borrowings.

Except for those qualifying capitalization, all other borrowing costs are recognized as an expense in profit or loss as incurred.

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND MAJOR SOURCES OF ASSUMPTION UNCERTAINTY

The Company considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. The effect of a change in an accounting estimate shall be recognized prospectively by including it in profit or loss in the period of the change, if the change affects that period only, or in the period of the change and future periods, if the change affects both.

In the preparation of the standalone financial statements, the critical accounting judgments the Company has made and the major sources of estimation and assumption uncertainty are described as follows:

5.1 Critical judgements in applying accounting policies

(1) Revenue recognition

The Company follows IFRS 15 to determine if it controls the specified good or service before that good or service is transferred to the customer, and the Company is acting as a principal or an agent in that transaction. When the Company acts as an agent, revenue is recognized on a net basis.

The Company acts as a principal as that it meets one of the following situations:

  • A. The Company gains control over the goods from the other party before transferring goods to customers.

  • B. The Company controls the right of providing service by the other party in order to control the ability of the party to provide service to customers.

  • C. The Company gain control over goods or service from the other party in order to combine with other goods or services to provide specific goods or services to customers.

－304－

The indicators (not limited to) which assist making judgment on whether the Company controls the goods or services before transferring goods or services to customers:

  • A. The Company has primary responsibilities for the goods or services it provides;

  • B. The Company bears inventory risk before transferring the specific goods or services to customer, or after transferring the control to customer (for example, if the customer has the right to return).

  • C. The Company has the discretion to set prices.

(2) Lease term

In determining the lease term, the Company considers all the facts and circumstances that generate an economic incentive to exercise (or not exercise) the option, including all expected change of facts and circumstances from the inception of commencement to the exercise of the option. The considerations include the contract clause and conditions of the period covered by the option, the significant leasehold improvements made (or expected) during the contract period, and the importance of the underlying assets to the Company's operations. The lease period is reassessed when significant events or major changes occur within the control of the Company.

5.2 Critical accounting estimates and assumptions

(1) Estimated impairment of financial assets

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and in selecting the inputs to the impairment calculation, based on the Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

(2) Process of fair value measurement and evaluation

When the assets and liabilities at fair value with no active market, the Company determines whether to use outside appraisal and using proper evaluation techniques based on related regulation or its own judgment.

If the Level 1 input value is not available while evaluating, the Company refers to the analysis of the investee’s financial position and operating outcome, recent trading price, quotes on non-active market of same equity instrument, quotes on active market of similar equity instrument and evaluation multiples of comparable companies. If the future input value is different from expectation, the fair value might change. The Company updates input values quarterly according to the market status in order to monitor if the measurement of fair value is appropriate.

(3) Impairment assessment of tangible and intangible assets

In the course of impairment assessments, the Company determines, based on how assets are utilised and relevant industrial characteristics, the useful lives of assets and the future cash flows of a specific company of the assets. Changes in economic circumstances or the Company’s strategy might result in material impairment of assets in the future.

(4) Impairment assessment of investments accounted for using the equity method

The Company assesses the impairment of an investment accounted for using the equity method once there is any indication that it might have been impaired and its carrying amount cannot be recoverable. The Company assesses the recoverable

－305－

amounts of an investment accounted for using the equity method based on the present value of the Company’s share of expected future cash flows of the investee or the present value of expected cash dividends receivable from the investee and expected future cash flows from disposal of the investment, analyzing the reasonableness of related assumptions.

(5) Realisability of deferred tax assets

Deferred assets are recognised only to the extent that it is probable that future taxable profits will be available against which the deferred tax asset can be utilised. The Company’s management assesses the realisability of deferred tax assets by making critical accounting judgements and significant estimates of expected future revenue growth rate and gross profit rate, the tax exemption period, available tax credits, and tax planning, etc. Changes in global economic environment, industrial environment, and laws and regulations might result in material adjustments to deferred tax assets.

(6) Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value; thus, the Company estimates the net realizable value of inventory for obsolescence and unmarketable items on balance sheet date due to the rapid technology changes and writes down inventories to the net realisable value.

(7) Calculation of accrued pension obligations

When calculating the present value of defined pension obligations, the Company uses judgments and actuarial assumptions to determine related estimates, including discount rates and future salary increase rate. Changes in these assumptions may have a significantly impact on the carrying amount of defined pension obligations.

(8) Tenant's increase in borrowing interest rate

The fair values at the time of the decision to increase the borrowing rate of the lessee used in the lease payment, the risk-free interest rate and the same currency is used as the reference rate, and the estimated lessee's credit risk sticker and lease specific adjustments (such as asset-specific and secured factors) are taken into account.

6. DETAILS OF SIGNIFICANT ACCOUNTS 6.1 Cash and cash equivalents

Item
Cash on hand
Checking account
Demand deposits
Cash Equivalents
Time deposits (with original maturities
within three months)
Total		 December 31 December 31
2020
$1,740
163,868
173,216
-
$338,824		 2019
$1,940
152,593
481,017
29,980
$665,530

－306－

  • 1.The financial institutions dealing with the Company are credit worthy, and the Company does transactions with a number of financial institutions to diversify credit risk that are unlikely to be expected to default.

  • 2.The Company had no cash and cash equivalents pledged to others.

6.2 Financial assets at fair value through profit or loss

Item
Financial assets - current:
Non-derivative financial assets
mandatorily measured at FVTPL
Mutual funds
Domestic unlisted preferred stock
Total
Financial assets - noncurrent:
Non-derivative financial assets
mandatorily measured at FVTPL
Domestic unlisted preferred stock
Financial bonds
Total		 December 31
2020
2019
$20,846
$23,461
213,292
284,110
$234,138
$307,571
$-
$210,573
-
10,004
$-
$220,577		 December 31
2020
2019
$20,846
$23,461
213,292
284,110
$234,138
$307,571
$-
$210,573
-
10,004
$-
$220,577
2019
$23,461
284,110
$307,571
$210,573
10,004
$220,577

  • 1.The Company had no financial assets at fair value through profit or loss pledged to others.

  • 2.Please refer to Note 12(2) for credit risk management and evaluation method.

6.3 Notes receivable, net

Notes receivable, net
Item
At amortized cost
Notes receivable
Less: Loss allowance
Net		 December 31
2020
$27,895
(107)
$27,788		 2019
$4,952
(16)
$4,936

  • 1.The Company had no notes receivable pledged to others.

  • 2.Please refer to Note 7.3.5. for accounts receivable with related parties

  • 3.The relevant disclosure of loss allowance for notes receivable. Please refer to Note 6.4.

6.4 Accounts receivable, net

Accounts receivable, net
Item
At amortized cost
Accounts receivable
Less: Loss allowance
Net		 December 31
2020
$1,106,491
(4,647)
$1,101,844		 2019
$1,102,605
(3,547)
$1,099,058

－307－

  • A. Accounts receivable are created by the Company by selling goods, and the average collection period for Carbon Steel Department is 30~60 days. The collection period for Engineering Department is based on contractual terms. The Company’s accounts receivables all meet the credit standards stipulated based on the counterparties' industrial characteristics, operation scale and profitability.

  • B. The Company had no accounts receivable pledged to others.

  • C. The Company applies the simplified approach to provisions for expected credit losses prescribed by IFRS 9, which permits the use of a lifetime expected credit losses provision for trade receivables. The expected credit losses on trade receivables are estimated by reference to past account aging records of the debtor, an analysis of the debtor’s current financial position, industrial trend. which receivables are past due. As the Company’s historical credit losses experience does not show significantly different loss patterns for different customer segments, the provision for losses based on past due status of receivables is not further distinguished between the Company’s different customer base.

The Company writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery of the receivable. For trade receivables that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables which are due. Where recoveries are made, these are recognized in profit or loss.

The Company measures the allowance for notes receivable, and accounts receivable to the preparation matrix (including related parties)：

December 31,
2020
Not past due
December 31,
2019
Not past due		 Expected
credit loss
rate
0%-0.5%
Expected
credit loss
rate
0%-0.5%		 Gross
carrying
amount
$1,369,217
Gross
carrying
amount
$1,358,892		 Allowance for
doubtful
accounts(ECL)
$(5,422)
Allowance for
doubtful
accounts(ECL)
$(4,168)		 Amortized
cost
$1,363,795
Amortized
cost
$1,354,724

Movements of the loss allowance for notes receivable and accounts receivable (including related parties) were as follows:

Year Ended December 31

Beginning balance
Add: Provision for impairment
Less: Reversal of impairment
Ending balance		 2020
$4,168
1,254
-
$5,422		 2019
$4,842
-
(674)
$4,168

－308－

As of December 31, 2020 and 2019, the above provision has already taken into consideration collateral or other credit enhancement. The other credit enhancement (e.g., L/C) possessed by above receivables were $1,009,197 thousand, and $954,434 thousand, respectively.

Please refer to Note 12(2) for the relevant credit risk management and assessment.

6.5 Other receivables

Item
Business tax refundable
Guarantee fee receivable
Manpower support receivable
Purchase allowance receivable
Proceeds receivable from disposal of
land
Proceeds receivable arising from sale
of funds
Others
Total
Less: Loss allowance
Net		 December 31 December 31
2020
$98,500
6,263
1,863
125
-
-
3,823
$110,574
-
$110,574		 2019
$97,000
6,805
2,531
1,537
48,560
3,139
2,719
$162,291
-
$162,291

Please refer to Note 7.3.5 for related party transactions.

6.6 Inventories and operating cost

Item
Steel Department：
Raw materials
Supplies
Work in progress
Finished goods
By-products and scraps
Subtotal
Less: Valuation allowance
Net		 December 31 December 31
2020
$1,321,864
17,564
428,903
1,398,131
82,850
$3,249,312
(769)
$3,248,543		 2019
$ 1,444,900
17,492
510,236
1,191,650
71,961
$3,236,239
(160,193)
$3,076,046

－309－

Heavy Industry Department：
Raw materials
Supplies
Subtotal
Less: Valuation allowance
Net
Total		 $99,988
3,006
$102,994
(418)
$102,576
$3,351,119		 $233,532
5,436
$238,968
(1,001)
$237,967
$3,314,013

1.Inventory gains (losses) recognized as cost of sales are as follows:

Item
Cost of inventories sold
Construction cost
Processing cost
Unallocated manufacturing overhead
Purchase and construction contract loss
(recovery gain)
Inventory valuation loss and
obsolescence loss (recovery gain)
Total operating cost		 Year Ended December 31 Year Ended December 31
2020
$18,257,540
1,021,635
182,135
116,344
2,263
(160,007)
$19,419,910		 2019
$22,340,173
1,554,784
138,201
128,101
(1,410)
145,308
$24,305,157

2.The Company recognized inventory valuation loss (recovery gain) of $(160,007) thousand and $145,308 thousand for the years ended December 31, 2020 and 2019, respectively, due to inventory’s write-down to net realizable value, or the net realizable value of inventories recovered as a result of market stabilization that enabled the Company to raise prices on certain products.

  1. The Company had no inventory pledged as collateral.

6.7 Prepayments

Prepayments
Item
Prepaid material purchase
Prepaid insurance
Prepaid sea freight
Prepaid syndicated loan arrangement fee
Other prepayments
Total		 December 31
2020
$152,716
40,599
19,216
15,100
3,963
$231,594		 2019
$96,317
38,751
21,694
-
18,579
$175,341

－310－

  • 1.Prepaid syndicated loan arrangemen fee was paid to lead bank of syndicated loan. In December 2020, the Company entered a syndicated loan agreement with 9 joint lending banks including Megabank, with a credit line of $45 billion, The syndicated loan agreement was first actually drawn in January 2021.

  • Please refer to Note 7.3.7. for prepayments with related parties

6.8 Noncurrent assets held for sale / Liabilities directly associated with noncurrent assets held for sale

assets held for sale
Item
Noncurrent assets held for sale
Less：Accumulated impairment
Net
Liabilities directly associated with
noncurrent assets held for sale		 December 31
2020
$159,832
-
$159,832
$70,000		 2019
$23,342
-
$23,342
$7,630

  • 1.As stated in Note 9.10, In December 2019, the Company entered into a contract to sell part of land in Pingnan Section, Fangliao Township, Pingtung County. The total contract price was $699,634 thousand, and the disposal was expected to be completed within 12 months. As of December 31, 2020, $70,000 thousand have been collected.

  • 2.In November 2019, the Company entered into a contract to sell part of land in Pingbei Section, Jiadong Township, Pingtung County. The total contract price was $76,344 thousand. In March 2020, the ownership transfer was completed in accordance with the scheduled payment terms as stipulated in the contract.

  • 3.Please refer to Note 8 for the information of noncurrent assets held for sale pledged as collateral.

6.9 Financial assets at fair value through other comprehensive income or loss - noncurrent

Financial assets at fair value through
noncurrent		 other comprehensive income or loss - other comprehensive income or loss -
Item
Equity instruments：
Domestic listed stocks
Domestic unlisted stocks
Subtotal
Valuation adjustment
Total		 December 31
2020
$45,000
556,953
$601,953
88,963
$690,916		 2019
$45,000
558,040
$603,040
101,365
$704,405
  • 1.The Company invests in domestic listed and unlisted stocks in accordance with its medium/long-term strategies and expects to make a profit through long-term investment. Management of the Company believes that it is not consistent with the afore-mentioned long-term investment planning if the short-term fair value changes of such investment are presented in profit or loss. Therefore, the Company elects to designate such investment as to be measured at FVTOCI.

－311－

  • 2.For related credit risk management and means of assessing, please refer to Note 12(2).

  • 3.As of December 31, 2020 and 2019, the Company had no financial assets at FVTOCI pledged as collateral.

6.10 Investments accounted for using equity method

Investee
Subsidiaries:
Yieh Phui (Hong Kong) Holdings Limited
Yieh Hsing Enterprise Co., Ltd.
Kuo Chang Enterprise Co., Ltd.
United Brightening Development Corp.
Great Emperor Hotel Co., Ltd.
Kings Garden International Co., Ltd.
Others
Subtotal
Associates:
Associates with significance:
Yieh United Steel Corp.
Eliter International Corp.
Tangeng Iron Works Co., Ltd.
E-Da Development Corp.
Associates without significance
Subtotal
Prepaid investment:
Great Emperor Hotel Co., Ltd.
Kings Garden International Co., Ltd.
Total		 December 31 December 31
2020
$9,502,034
971,579
1,062,054
1,445,019
2,491,930
2,087,966
2,686,631
$20,247,213
$2,653,964
2,650,801
1,154,704
1,116,484
1,741,763
$9,317,716
$-
209,066		 2019
$8,390,606
1,207,867
1,080,043
1,587,809
1,453,417
2,036,058
3,367,592
$19,123,392
$3,193,845
2,666,548
1,221,462
1,196,618
1,666,137
$9,944,610
$133,597
-
$29,773,995 $29,201,599

1.Subsidiaries:

  • (1) For information of the Company’s subsidiaries, please refer to Note 4.3 of the Company’s Year 2020 consolidated financial statements.

  • (2) Investments accounted for using equity method and the Company’s share of profit or loss and share of other comprehensive income were calculated based on audited financial statements, except for those of Good Honor Holdings Ltd. and Worthing Honor Holdings Ltd. However, management of the Company considered no material adjustment if the financial statements of afore-mentioned subsidiaries had been audited.

－312－

2.Associates:

  • (1) Major associates of the Company are as follows:
CompanyName
Yieh United Steel Corp.
Eliter International Corp.
Tangeng Iron Works Co., Ltd.
E-Da Development Corp.		 ShareholdingPercentage ShareholdingPercentage
December 31,2020
25.82%
32.84%
11.30%
28.44%		 December 31,2019
25.62%
32.84%
11.30%
28.44%

Please refer to Table 9 and Table 10 in Note 13 for the nature of business, main operation location and countries of registration of the associates listed above.

  • (2) The summarized financial information in respect of the Company’s major associates is as follows:

  • A. Balance Sheets

associates is as follows:
A. Balance Sheets
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Equity
Share in associates’ net assets
Unrealized loss from transactions
with associates
Carrying amount of associate
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Equity
Share in associates’ net assets
Unrealized loss from transactions
with associates
Carrying amount of associate		 Yieh United Steel Corp.
December 31, 2020
December 31, 2019
$8,876,058
$8,343,346
35,131,909
36,320,870
21,887,485
23,899,830
11,607,523
8,107,714
$10,512,959
$12,656,672
$2,714,726
$3,254,607
(60,762)
(60,762)
$2,653,964
$3,193,845
Eliter International Corp.		 December 31, 2019
$8,343,346
36,320,870
23,899,830
8,107,714
$12,656,672
$3,254,607
(60,762)
$3,193,845
December 31, 2020
$7,219,188
4,963,316
2,693,464
1,273,422
$8,215,618
$2,698,295
(47,494)
$2,650,801		 December 31, 2019
$6,971,622
5,195,803
1,603,831
2,299,960
$8,263,634
$2,714,066
(47,518)
$2,666,548

－313－

Tangeng Iron Works Co., Ltd.

TangengIron Works Co., Ltd. TangengIron Works Co., Ltd. TangengIron Works Co., Ltd. orks Co., Ltd. orks Co., Ltd.
December 31, 2020
December 31, 2019
Current assets
$3,180,884
$4,274,280
Noncurrent assets
23,623,947
23,749,927
Current liabilities
2,439,751
3,638,556
Noncurrent liabilities
11,815,071
11,244,913
Equity
$12,550,009
$13,140,738
Share in associates’ net assets
$1,154,704
$1,221,462
Unrealized loss from transactions
with associates
-
-
Carrying amount of associate
$1,154,704
$1,221,462
E-Da Development Corp.
December 31,2020
December 31,2019
Current assets
$605,393
$867,776
Noncurrent assets
7,974,851
8,123,713
Current liabilities
886,455
1,021,390
Noncurrent liabilities
3,741,418
3,735,304
Equity
$3,952,371
$4,234,795
Share in associates’ net assets
$1,124,143
$1,204,471
Unrealized loss from transactions
with associates
(7,659)
(7,853)
Carrying amount of associate
$1,116,484
$1,196,618
B.Statements of Comprehensive Income
Yieh United Steel Corp.
2020
2019
Operating revenue
$31,873,617
$35,843,299
Net income (loss)
($1,877,471)
($3,046,907)
Other comprehensive income (loss) (net after tax)
(259,646)
(325,289)
Total comprehensive income (loss)
($2,137,117)
($3,372,196)
Dividends received from associate
$-
$-
Eliter International Corp.
2020
2019
Operating revenue
$267,888
$229,538
Net income (loss)
$(66,028)
($144,372)
Other comprehensive income (loss) (net after tax)
18,011
(5,901)
Total comprehensive income (loss)
($48,017)
($150,273)
Dividends received from associate
$-
$-		 December 31, 2020
December 31, 2019
$3,180,884
$4,274,280
23,623,947
23,749,927
2,439,751
3,638,556
11,815,071
11,244,913
$12,550,009
$13,140,738
$1,154,704
$1,221,462
-
-
$1,154,704
$1,221,462
E-Da Development Corp.		 December 31, 2019
$4,274,280
23,749,927
3,638,556
11,244,913
$13,140,738
$1,221,462
-
$1,221,462
December 31,2019
$867,776
8,123,713
1,021,390
3,735,304
$4,234,795
$1,204,471
(7,853)
$1,196,618
Steel Corp.
2020
2019
$31,873,617
$35,843,299
($1,877,471)
($3,046,907)
(259,646)
(325,289)
($2,137,117)
($3,372,196)
$-
$-
Eliter International Corp.
2020
2019
$267,888
$229,538
$(66,028)
($144,372)
18,011
(5,901)
($48,017)
($150,273)
$-
$-		 2019
$35,843,299
($3,046,907)
(325,289)
($3,372,196)
$-
2020
$267,888
$(66,028)
18,011
($48,017)
$-

－314－

Operating revenue
Net income (loss)
Other comprehensive income (loss) (net after tax)
Total comprehensive income (loss)
Dividends received from associate
Operating revenue
Net income (loss)
Other comprehensive income (loss) (net after tax)
Total comprehensive income (loss)
Dividends received from associate		 TangengIron Works Co., Ltd.
2020
2019
$10,828,679
$12,350,956
($665,673)
$14,953
74,943
49,483
($590,730)
$64,436
$ -
$ -
E-Da Development Corp.
2020
2019
$704,305
$795,002
($322,389)
($294,609)
39,953
(14,958)
($282,436)
($309,567)
$ -
$ -
2020
$704,305
($322,389)
39,953
($282,436)
$ -
  • (3) Shares of individually insignificant associates of the Company are summarized as follows:
as follows:
Share of:
Net income (loss)
Other comprehensive income (loss) (net after tax)
Total comprehensive income (loss)		 Year Ended December 31
2020
$37,015
38,807
$75,822		 2019
$23,068
(39,810)
($16,742)
  • (4) Associates of the Company with quoted prices in active market (Level 1 fair value inputs) are as follow:
value inputs) are as follow:
Yieh United Steel Corp. (Note)
Tangeng Iron Works Co., Ltd.
Total		 December 31
2020
$4,019,579
1,530,701
$5,550,280		 2019
$2,797,426
1,696,824
$4,494,250
  • (Note): The fair value information above does not include shares acquired in private placement, which are not allowed to be transferred freely in open markets.

－315－

  • (5) For Tangeng Iron Works Co., Ltd., Skylark Hot Spring & Resort Corp., E-Da Tour Bus Corporation, E-Da Bus Transportation Co., Ltd., E-Da Entertainment Co. and E-Da Health Biotech Co., Ltd, the Company has significant influence either as a result of holding more than 20% of their respective shares with its subsidiairies, or being a director in such entities. Consequently, those entities are accounted for using equity method. The company and its subsidiaries hold company Z together

  • (6) After considering the amount and distribution of other shareholders which are not extremely dispersed, the Company is not able to lead the company’s activities. Thus, the Company and its subsidiaries has no control even though it holds 38%, 45%, 43.56%, 34.38% and 30.51% of E-Da Health Biotechnology Co., Ltd., Zheng Xin Security Co., Ltd., Eliter International Corp., E-Da Development Corp., and Yieh United Steel Corp. and is the single largest shareholder. The management believes the Company only had significant impact to these companies, so classified them as the associates.

  • (7) The Company participated in the private placement of Yieh United Steel Corp. in February 2017, and December 2015, and subscribed at $ 7 per share, with the total subscription amount of $204,876 thousand and $1,100,400 thousand, respectively. Pursuant to the Securities and Exchange Act, securities from private placement can only be traded freely in the open markets when they are held for three years from the delivery date and the issuer has to complete the supplementary procedures of public offering.

  • (8) Due to cross ownership and the adoption of equity method between the Company and Yieh United Steel Corp., an investee accounted for using equity method, investment gain (loss) is recognized using the treasury stock approach.

  • (9) Except for E United Japan Co., Ltd., investments accounted for using equity method and the Company’s share of profit or loss and other comprehensive income are calculated based on audited financial statements of those investees. However, the Company’s management considers no material impact if the financial statements of above investees had been audited.

  • (10) As of December 31, 2020 and 2019, no investments under equity method were pledged as collateral by the Company.

6.11 Property, Plant and Equipment

Property, Plant and Equipment
Item
Land
Buildings and structures
Machinery
Other equipment
Equipment to be inspected and
construction in progress
Total cost
Less: Accumulated depreciation
Accumulated impairment
Total		 December 31
2020
$1,507,283
3,619,042
12,664,614
831,549
363,056
$18,985,544
(11,806,712)
(70,671)
$7,108,161		 2019
$1,507,283
3,619,138
12,805,210
1,042,585
435,118
$19,409,334
(11,799,308)
(223,116)
$7,386,910

－316－

Cost Land Buildings and
structures		 Machinery
$12,805,210
49,763
(253,612)
63,253
-
$12,664,614
$8,948,169
330,789
(244,410)
-
$9,034,548		 Other equipment Equipment to be
inspected and
construction in
progress		 Total
$1,507,283
-
-
-
-		 $3,619,138
5,043
(8,362)
3,223
-		 $1,042,585
13,206
(236,262)
12,020
-		 $435,118
158,879
-
(78,496)
(152,445)		 $19,409,334
226,891
(498,236)
-
(152,445)
Balance, January 1, 2020
Additions
Disposals
Reclassifications
Write-off cumulative
impairment
Balance, December 31, 2020
Accumulated depreciation
and impairment
$1,507,283 $3,619,042 $831,549 $363,056 $18,985,544
$ -
-
-
-		 $2,086,060
109,696
(7,778)
-		 $765,079
54,187
(235,080)
-		 $223,116
-
-
(152,445)		 $12,022,424
494,672
(487,268)
(152,445)
Balance, January 1, 2020
Depreciation
Disposals
Write-off cumulative
impairment
Balance, December 31, 2020
Cost
$ - $2,187,978 $584,186 $70,671 $11,877,383
Land Buildings and
structures
$3,685,177
5,255
(81,188)
9,894
$3,619,138
$2,057,363
108,199
(79,502)
$2,086,060		 Machinery Other equipment Equipment to be
inspected and
construction in
progress		 Total
$1,506,714
569
-
-		 $12,806,994
47,696
(75,982)
26,502		 $1,151,102
9,017
(151,496)
33,962		 $289,490
215,986
-
(70,358)		 $19,439,477
278,523
(308,666)
-
Balance, January 1, 2019
Additions
Disposals
Reclassifications
Balance, December 31, 2019
Accumulated depreciation
and impairment
$1,507,283 $12,805,210 $1,042,585 $435,118 $19,409,334
$ -
-
-		 $8,642,254
366,581
(60,666)		 $860,012
54,413
(149,346)		 $223,116
-
-		 $11,782,745
529,193
(289,514)
Balance, January 1, 2019
Depreciation
Disposals
Balance, December 31, 2019
$ - $8,948,169 $765,079 $223,116 $12,022,424
  • 1.Reconciliations of current additions and the acquisition of property, plant and equipment in statement of cash flows were as follows:
Item
Increase in property, plant and equipment
Increase/decrease in payables for purchase of
equipment
Cash paid for acquisition of property, plants
and equipment		 Year Ended December 31 Year Ended December 31
2020
$226,891
(18,574)
$208,317		 2019
$278,523
9,365
$287,888

－317－

  • 2.Please refer to Note 6.31 for details of the amount of capitalized borrowing costs.

  • 3.Impairment losses for property, plant and equipment recognized for 2020 and 2019 were both $0 thousand.

  • 4.As of December 31, 2019, the Company’s cumulative impairment losses was $223,116 of the painting equipment and other equipment in Pingnan plant due to the termination of expansion of such plant, of which the Pingnan plant’s land was sold in 2020, so the plant’s equipment has been cumulative impairment losses by $152,445 thousand to reduce equipment to be inspected and construction in progress. As of December 31, 2020, the accumulative impairment losses were $70,671 thousand.

  • 5.For the information about property, plant and equipment pledged as collateral, please see Note 8 for details.

  • 6.The Company’s land amounting to both $8,516 thousand as of December 31 2020 and 2019 is unable to be registered under the name of the Company due to regulation restriction. Accordingly, the ownership was registered under the name of an individual with a mortgage registration as safeguard measures.

6.12 Lease Agreement

A. Right-of-use asset

Item December 31 December 31 2019
$291,555
26,630
$318,185
(14,792)
-
$303,393
Total
2020
$300,031
26,630
$326,661
(28,447)
-
$298,214
Land
Buildings
$291,555
$26,630
9,793
-
(1,317)
-
$300,031
$26,630
$10,531
$4,261
10,711
4,261
(1,317)
-
$19,925
$8,522
Land
Buildings
$ -
$ -
288,959
26,630
2,596
-
$291,555
$26,630
$ -
$ -
10,531
4,261
$10,531
$4,261
Land
$291,555
9,793
(1,317)
$300,031
$10,531
10,711
(1,317)
$19,925
Land
$ -
288,959
2,596
$291,555
$ -
10,531
$10,531
$ 318,185
9,793
(1,317)
$326,661
$ 14,792
14,972
(1,317)
$28,447
Total
$ -
315,589
2,596
$318,185
$ -
14,792
$14,792

－318－

B. Lease liabilities

. Lease liabilities
Item
Carrying amount of lease liabilities
-
current
-
noncurrent		 December 31
2020
$10,307
$199,663		 2019
$9,639
$209,141

The discount rate interval for lease liabilities is 1.9661%.

Please refer to Note 12(2) for lease liabilities with repayment periods. C. Significant lease activities and clause

The Company rented land and buildings for operation. The lease terms range from 1 to 31 years. Part of the lease may be extended with its duration and is calculated based on the area of the land leased and the rate based on the announced land value of the current year. In accordance with the contract, without the lessor’s consent, the Company is not allowed to sublet the leased object to the third party. There is no sign of impairment of right-of-use assets, hence the Company didn’t assess the impairment as of December 31, 2020 and 2019.

D. Other lease information:

(1) The current lease relevant expense information was as follows:

er lease information:
The current lease relevant expense		 information was as follows: information was as follows:
Item
Short-term lease expense
Gross cash outflow (Note)		 Year Ended December 31
2020
$12,517
$22,764		 2019
$14,015
$24,589

(Note): Including principle paid for lease liability.

6.13 Investment properties

Investment properties
Item
Land
Construction in progress
Total cost		 December 31
2020
$443,349
-
$443,349		 2019
$923,785
40,554
$964,339
  1. Investment properties and accumulated depreciation and impairment c hanges are as follows
as follows
Cost Land Construction
inprogress		 Total
$923,785
-
(378,934)
(146,062)
44,560		 $40,544
20,065
-
(16,059)
(44,560)		 $964,339
20,065
(378,934)
(162,121)
-

－319－

Cost Land
$1,078,509
-
(132,852)
(21,872)
$923,785		 Construction
inprogress		 Total
$36,988
13,930
(8,894)
(1,470)		 $1,115,497
13,930
(141,746)
(23,342)
Balance, January 1, 2019
Additions
Disposals
Transferred to noncurrent assets
held for sale
Balance, December 31, 2019
$40,554 $964,339
  • 1.Rental revenue and direct operating expenses of investment properties:
Item
Rental revenue from investment properties
Direct operating expenses incurred by the investment
properties with rental revenue generating in current period
Direct operating expenses incurred by the investment
properties with no rental revenue generating in current
period		 Year Ended December 31 Year Ended December 31
2020
$11,796
$1,775
$3,324		 2019
$11,796
$1,787
$8,459

  • 2.As of December 31, 2020 and 2019, the fair values of investment properties held by the Company were $861,405 thousand and $2,336,794 thousand, respectively, which were based on evaluation appraised by independent appraisers as of December, 2019. Such evaluation adopted the comparative approach by reference to the market evidence similar to the real estate transaction prices. Those are Level 3 fair value inputs. Please refer to Note 12(3). The Company believes that there would not be any material fluctuation in the fair value of such investment properties after their appraisal. Appraisal will be taken place every two years on the investment properties.

  • Please refer to Note 8 for investment properties pledged to others.

6.14 Refundable deposits

Refundable deposits
Item
Deposit for dumping margins
Customs duty guarantee
Rent deposits
Others
Total		 December 31
2020
$148,596
270,560
3,234
17
$422,407		 2019
$851,218
284,810
3,345
17
$1,139,390

－320－

An antidumping investigation into the corrosion-resistant steel sold from Taiwan, conducted by the Department of Commerce of the U.S. in June 2015, had completed in July 2016, with an official announcement that all corrosion resistant products manufactured in or sold from Taiwan must temporarily bear a dumping margin duty. The custom was also instructed to impose a temporary dumping margin on all entries of merchandise sold by the Company to the U.S. that had been covered by the investigation. The antidumping duty is imposed by the U.S. using the retrospective system. The difference between the tax rate of the provisional tax rate paid and the final survey result is presented as “refundable deposit”.

6.15 Short-term Loans

Type of Loan
Credit for material purchase
Credit loans
Total
Type of Loan
Credit for material purchase
Credit loans
Total		 December 31, 2020 December 31, 2020
Amount
Interest Rate
$ 4,613,299
0.93%-2.00%
3,298,000
1.39%-2.05%
$7,911,299
December 31, 2019		 Interest Rate
Amount
$4,919,122
3,217,000
$8,136,122		 Interest Rate
1.54%-3.98%
1.34%-2.17%

Some financial assets, and property, plant, and equipment are pledged as collateral for short-term loans. Please refer to Note 8 for details.

6.16 Short-term notes and bills payable

Item
Commercial paper payable
Less: Unamortized discount
Net
Interest Rate Range		 December 31 December 31
2020
$600,000
(885)
$599,115
1.67%-1.85%		 2019
$600,000
(1,160)
$598,840
1.70%-1.80%

－321－

6.17 Other Payables

6.17 Other Payables
Item
Compensations payable
Export and transportation expenses payable
Utility expense payable
Cash dividends payable - from previous
period
Interest payable
Repairing charges payable
Equipment payable
Others
Total		 December 31
2020
$204,534
79,177
33,524
23,065
15,674
14,689
22,939
70,147
$463,749		 2019
$156,283
64,873
33,781
22,996
19,262
16,216
4,365
84,001
$401,777

Please refer to Note 7.3.6 for related party transactions.

6.18 Provisions - current

6.18 Provisions - current
December 31
Item 2020 2019
Employee benefits $48,907 $49,813
Onerous contract 3,269 1,006
Total $52,176 $50,819
Employee Onerous
Item benefits contract Total
January 1, 2020 $49,813 $1,006 $50,819
Recognized in current period 48,907 3,269 52,176
Write-off in current period (49,813) (1,006) (50,819)
December 31, 2020 $48,907 $3,269 $52,176
Employee Onerous
Item benefits contract Others Total
January 1, 2019 $48,711 $ 2,416 $16,831 $67,958
Recognized in current period 49,813 1,006 - 50,819
Write-off in current period (48,711) (2,416) (16,831) (67,958)
December 31, 2019 $49,813 $1,006 $ - $50,819

1.Provision for employee benefits is an estimate of the short-term service leave vested to employees.

2.Provision for onerous contracts covers the expected loss of construction contract.

－322－

6.19 Long-term Loans and Current Portion of Long-term Loans

December 31

Item
Bank syndicated loans:
Secured loans from banks
Unsecured loans from banks
Total
Less: Unamortized discount
Less: Current portion
Long-term loans
Interest rate range		 2020
$7,312,500
764,240
248,000
$8,324,740
(11,941)
(1,988,415)
$6,324,384
1.45%-2.25%		 2019
$8,275,000
1,509,380
188,667
$9,973,047
(17,442)
(1,636,335)
$8,319,270
1.82%-2.25%

  • 1.Please refer to Note 8 for the collateral of the above bank loans.

  • 2.According to syndicated loan agreements with banks, the Company needs to maintain several financial ratios, including current ratio, liability ratio and interest coverage ratio, at a certain level, calculated based on the audited annual consolidated financial statements and the reviewed semi-annual consolidated financial statements for the duration of the contracts. Since the Company failed to meet certain financial ratios in 2020, it needed to pay to the managing bank a compensation at 0.15% of the loan balance within agreed time. However, this was not seen as a breach of contract.

6.20 Benefit Plan After Retirement

  • 1.Defined contribution plan

  • The pension system based on the Labor Pension Act which is applicable to the Company’s domestic entities is a defined contribution plan managed by government. Companies would make monthly contribution equal to 6% of each employee's monthly salary to the employees' individual pension accounts at the Bureau of Labor Insurance.

  • Contributions based on the percentage stipulated in the defined contribution pension plans of the Company and recognized as expenses in the standalone statement of comprehensive income were $49,882 thousand and $50,228 thousand for the years ended December 31, 2020 and 2019, respectively

  • 2.Defined benefit plans

  • (1)The pension plan under the Labor Standards Law, which is applicable to the Company’s domestic entities, is a defined benefit pension plan managed by the government. Under the defined benefit pension plan, pension benefits are based on the average monthly salaries and wages of the last 6 months prior to retirement and the duration of employment. Those companies contribute monthly an amount equal to 10% of the employees' monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, under the name of the independent retirement fund committee. Before the end of year, if the balance at the retirement fund is not sufficient to cover all employees retiring next year, a lump-sum deposit should be made before March-end of the following year to cover the difference. The retirement fund is managed by the Bureau of Labor

－323－

Funds, Ministry of Labor. The Company does not have rights to influence its investment management strategy.

  • (2)The amounts recognized in the standalone balance sheet for obligations from defined benefit plans are as
defined benefit plans are as
Item
Present value of defined benefit
obligations
Fair value of planned assets
Net defined benefit liability		 December 31
2020
$1,241,948
(839,364)
$402,584		 2019
$1,338,657
(834,654)
$504,003

(3)Movements in net defined benefit liability are as follows:

Item
Balance as of January 1
Cost of service
Current service cost
Interest expense (income)
Recognized in profit and loss
Remeasurement
Return on plan asset
(Amounts included in interest
income or expense are excluded)
Actuarial (gains) losses -
Effect of change in demographic
assumptions
Effect of change in financial
assumptions
Experience adjustment
Recognized in other
comprehensive income
Pension fund contribution
Paid pension
Balance as of December 31		 Year Ended December 31,2020 Year Ended December 31,2020 Year Ended December 31,2020
Present value of
defined benefit
obligations
$1,338,657
4,311
9,114
13,425
-
16
44,909
(55,398)
(10,473)
-
(99,661)
$1,241,948		 Fair value of
planned assets
($834,654)
-
(5,801)
(5,801)
(27,118)
-
-
-
(27,118)
(60,669)
88,878
$(839,364)		 Net defined
benefit liability
$504,003
4,311
3,313
7,624
(27,118)
16
44,909
(55,398)
(37,591)
(60,669)
(10,783)
$402,584

－324－

Year Ended December 31, 2019

Item
Balance as of January 1
Cost of service
Current service cost
Past service cost
Interest expense (income)
Recognized in profit and loss
Remeasurement
Return on plan asset
(Amounts included in interest
income or expense are excluded)
Actuarial (gains) losses -
Effect of change in demographic
assumptions
Effect of change in financial
assumptions
Experience adjustment
Recognized in other
comprehensive income
Pension fund contribution
Paid pension
Balance as of December 31		 Present value of
defined benefit
obligations
$1,370,595
6,073
(395)
10,133
15,811
-
203
6,306
(33,280)
(26,771)
-
(20,978)
$1,338,657		 Fair value of
planned assets
($758,436)
-
-
(5,779)
(5,779)
(28,303)
-
-
-
(28,303)
(63,114)
20,978
($834,654)		 Net defined
benefit liability
$612,159
6,073
(395)
4,354
10,032
(28,303)
203
6,306
(33,280)
(55,074)
(63,114)
-
$504,003
  • (4)Through the pension plan under the Labor Standards Law, the Company is exposed to the following risks:

A.Investment risk

The pension funds are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government's designated authorities or under the mandated management by Bureau of Labor Funds, Ministry of Labor. However, the rate of return on the Company’ s planned assets shall not be less than the average interest rate on a two-year time deposit published by the local banks.

B.Interest rate risk

A decrease in the government bond interest rate will increase the present value of the defined benefit obligation, however, the return on the debt investments of the plan assets will also increase. Those two will partially offset each other. C.Salary risk

The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

－325－

  • (5)The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions adopted on the valuation date were as follows:
valuation date were as follows:
Item
Discount rate
Future salary increase rate
Average maturity period of defined
benefit obligations		 Measurement date
December 31, 2020
0.30%
2.00%
9 years		 December 31, 2019
0.70%
2.00%
9 years

  • A.Assumptions on future mortality experience are set based on the 5th Taiwan Standard Ordinary Experience Mortality Table.

  • B.If a reasonable change in one of the principal assumptions for actuarial valuation occurred and all other assumptions were held constant, the increase (decrease) in the present value of defined benefit obligation would be as follows:

follows:
Item
Discount rate
Increase by 0.25%
Decrease by 0.25%
Expected growth rate of salaries
Increase by 0.25%
Decrease by 0.25%		 December 31
2020
($28,346)
$29,306
$28,738
($27,949)		 2019
($31,096)
$32,185
$31,689
($30,780)

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

  • (6)The Company expects to make contributions of $56,445 thousand to the pension plans for the year ended December 31, 2021.

6.21 Common Stock

  • 1.Quantities and values of the Company’s outstanding common shares at the beginning and ending of periods were as follows:
Item
January 1
Cancellation of treasury shares
December 31		 Year Ended December31,2020 Year Ended December31,2020
Shares
(thousand shares)
1,913,327
(22,758)
1,890,569		 Amount
$19,133,275
(227,580)
$18,905,695

－326－

Item
January 1
Capitalization of earnings
December 31		 Year Ended December31,2019 Year Ended December31,2019
Shares
(thousand shares)
1,875,811
37,516
1,913,327		 Amount
$18,758,113
375,162
$19,133,275

  • 2.As of December 31, 2020, the Company had an authorized capital of $20,000,000 thousand with 2,000,000 thousand shares.

  • 3.The Company’s Board of Directors resolved on August 4, 2020 to cancel its treasury stocks. The amount of capital reduction was $227,580 thousand, with 22,758 thousand shares eliminated, and the capital reduction ratio was 1.19%. The record date for capital reduction was set on August 14, 2020.

  • 4.The Company’s shareholders’ meeting held on June 20, 2019 resolved to capitalize earnings of $375,162 thousand. The plan was approved by FSC on July 12, 2019 and 37,516 thousand shares of common share at the par value of $10 were issued. The record date for capital increase was set on September 2, 2019.

6.22 Capital Surplus

Item
Share premium
Treasury stock transaction
Difference between the price received
from acquisition or disposal of a
subsidiary and its book value
Change in ownership interests in
subsidiaries accounted for using equity
method
Changes in associates and jointventures
recognized under equity method
Total		 December 31 December 31
2020
$4,060,366
600,112
218,574
8,665
41,290
$4,929,007		 2019
$4,060,366
557,739
216,200
8,665
41,311
$4,884,281

Under the Company Act, capital surplus arising from shares issued at premium or from donation may be used for offsetting deficit. Furthermore, if the Company has no accumulated loss, capital surplus may be used for issuing new shares or distributing cash in proportion to shareholders' original holdings. In accordance with regulations in the Securities and Exchange Act, when the above-mentioned capital surplus is used for capitalization, the total amount every year shall not exceed 10% of the paid-in capital. The Company may use capital surplus to offset loss only when the amount of earnings and reserves are insufficient to offset the loss. The capital surplus generated from investment under equity method shall not be used for any purposes.

－327－

6.23 Retained Earnings

  • 1.A residual dividend distribution policy is adopted in accordance with the Company’s business expansion and profitability after considering the fact that the Company is currently in its growing phase. The annual net income, if any, should be used to pay off all the taxes and duties, as well as to compensate prior deficits. The remaining amount, if any, should be appropriated in the following order of presentation:

  • (1)10% as legal reserve;

  • (2)set aside or reverse a certain amount as or of special reserve according to operating needs or laws or regulations;

  • (3)the remaining net income plus unappropriated earnings from prior years may be used as dividends or bonus for shareholders after proposed by the Board of Directors and resolved by the shareholders meeting.

  • In principle, earnings shall be distributed in the form of stock dividends in accordance with the Company’s capital requirement for business expansion and profitability. Cash dividends are distributed at between 20% to 100% of total dividends distributed in accordance with the actual profitability while stock dividends are distributed at between 0% to 80% of the total dividends distributed.

  • 2.Legal reserves may only be used for offsetting deficits and issuing new shares or distributing cash in proportion to shareholders’ original holdings. However, when new shares are issued or cash is distributed, the amount shall be limited to 25% of the reserves in excess of the paid-in capital.

  • 3.Special reserve

3.Special reserve
Item
Provision for debit balance of other equity
Provision upon initial application of IFRSs
Total		 December 31
2020
$231,475
327,757
$559,232		 2019
$231,475
327,757
$559,232

  • (1)The Company may allocate earnings only after providing special reserve for debt balance in other equity on the date of balance sheet, and the reversal of debit balance in other equity, if any, may be stated into allocable earnings.

  • (2)Upon first-time adoption of IFRSs, the special reserve provided pursuant to the official letter under Jin-Guan-Jheng-Fa-Zih No. 1010012865 dated April 6, 2012 may be reversed to allocable retained earnings in proportion to the special reserve as provided originally, if the Company uses, disposes of or reclassifies the relevant assets in the future.

  • 4.The Company’s appropriations of earnings for 2019 had been approved in the shareholders’ meeting held in June 2020. No dividends will be distributed to the shareholders due to accumulated deficit. Earnings distribution proposals and dividends per share for 2018, which were resolved by the shareholders’ meeting in June 2019, are stated below：

－328－

Item
Legal reserve
Appropriation for (reversal of) special reserve
Cash dividends for common stock
Stock dividends for common stock
Total		 Year Ended December 31, 2018 Year Ended December 31, 2018
Earnings appropriation
proposal
$30,850
(77,423)
187,581
375,162
$516,170		 Dividends
per share(NTD)
0.1
0.2
  1. The appropriation of 2020 earnings had been proposed by the board of directors on March 2021. Details were summarized below:
Item
Legal reserve
Appropriation for (reversal of) special reserve
Cash dividends for common stock
Stock dividends for common stock
Total		 Year Ended December 31, 2020 Year Ended December 31, 2020
Earnings appropriation
proposal
$16,373
147,631
-
-
$163,734		 Dividends
per share(NTD)
-
-
  • 6.Information about earnings distribution approved by the Board of Directors and resolved by the shareholders meeting is available at the Taiwan Stock Exchange Market Observation Post System website.

6.24 Other Equity Items

6.24 Other Equity Items
Item Exchange
differences on
translation of
foreign financial
statements		 Unrealized gain
(loss) on financial
asset at fair value
through other
comprehensive
income		 Gain (loss) on
hedging
instruments		 Total
Balance, January 1, 2020
Unrealized gain (loss) on financial
assets at fair value through other
comprehensive income
Share of associates and joint
ventures accounted for using equity
method
Disposal of unrealized gain (loss) on
financial assets at fair value through
other comprehensive income
Balance, December 31, 2020		 ($1,090,046)
-
(97,490)
-		 $105,537
(12,402)
134,264
(756)		 $6,338
-
46
-		 ($978,171)
(12,402)
36,820
(756)
$(1,187,536) $226,643 $6,384 $(954,509)

－329－

Item Exchange
differences on
translation of
foreign financial
statements		 Unrealized gain
(loss) on financial
asset at fair value
through other
comprehensive
income		 Gain (loss) on
hedging
instruments		 Total
Balance, January 1, 2019
Unrealized gain (loss) on financial
assets at fair value through other
comprehensive income
Share of associates and joint
ventures accounted for using equity
method
Balance, December 31, 2019		 ($723,803)
-
(366,243)		 $157,892
(16,454)
(35,901)		 $6,679
-
(341)
($559,232)
(16,454)
(402,485)
($1,090,046) $105,537 $6,338
($978,171)

6.25 Treasury stock

  • 1.Purpose of treasury stock and changes in quantity:

Unit: Thousand Shares

Year Ended December 31,2020 Year Ended December 31,2020
January1
-		 Addition
22,758		 Reduction
(22,758)		 December31
-

  • 2.In order to protect the Company’s credit and shareholders’ equity, the Company’s Board of Directors resolved on March 13, 2020 to repurchase 100,000 thousand shares from March 16 to May 15, 2020. The number of shares repurchased by the Company as of May 15, 2020 is 22,758 thousand shares, with the amount of $185,207 thousand. The Company’s Board of Directors resolved on August 4, 2020 to cancel its treasury stocks with 22,758 thousand shares eliminated, and the capital reduction ratio was 1.19%. The record date for capital reduction was set on August 14, 2020.

  • 3.Pursuant to the Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realized capital surplus.

  • 4.Pursuant to the Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to shareholder’s rights before it is reissued.

－330－

6.26 Operating Revenue

Operating Revenue
Item
Revenue from contracts with customers
Sales revenue
Construction revenue
Processing revenue
Realized (unrealized) profits from sales
Total sales revenue from contracts with
customers
Less: Sales return
Sales discount
Net operating revenue		 Year Ended December 31
2020
$19,686,105
1,135,230
167,736
(3,252)
$20,985,819
-
(49,609)
$20,936,210		 2019
$23,307,579
1,646,688
119,464
(29,986)
$25,043,745
-
(72,731)
$24,971,014

1.Segments of revenue from contracts with customers

The Company’s source of revenue comes from providing goods and services that are transferred either over time or at a specific timing. Revenue can be split into the following segments:

(1)Segmented by revenue from different types of goods and services: 2020：

2020：
External customer
Contract revenue
Timing of revenue recognition
Revenue recognized at a
specific timing
Revenue recognized over time
Total
2019：
External customer
Contract revenue
Timing of revenue recognition
Revenue recognized at a
specific timing
Revenue recognized over time
Total		 Steel coils and
steelpipes
$19,636,496
$19,636,496
-
$19,636,496
Steel coils and
steelpipes
$23,234,848
$23,234,848
-
$23,234,848		 Construction
revenue
$1,131,978
$ -
1,131,978
$1,131,978
Construction
revenue
$1,616,702
$ -
1,616,702
$1,616,702		 Others
$167,736
$167,736
-
$167,736
Others
$119,464
$119,464
-
$119,464		 Total
$20,936,210
$19,804,232
1,131,978
$20,936,210
Total
$24,971,014
$23,354,312
1,616,702
$24,971,014

－331－

(2)For detailed revenue information by business segments, please refer to Note 14. 2.Contract Balances

Contract Balances
Item
Notes receivable and accounts
receivable
Contract assets - current
Steel structure construction and
overhead cranes
Contract liabilities - current
Unearned sales revenue
Advance construction receipts
Total		 December 31
2020
$1,363,795
$322,636
$434,560
80,509
$515,069		 2019
$1,354,724
$740,413
$385,452
115,493
$500,945

  • (1)Changes in contract assets and contract liabilities were caused mainly by the difference of timing between when performance obligations were fulfilled and when customers make payments.

  • (2)Allowance for contract assets:

when customers make payments.
Allowance for contract assets:
Expected credit loss rate
Gross carrying amount
Loss allowance (Lifetime ECL)
Net		 December 31
2020
0%-0.5%
$323,771
(1,135)
$322,636		 2019
0%-0.5%
$742,802
(2,389)
$740,413

The Company recognizes allowance losses on contract assets based on expected credit losses during existence. Contract assets will be transferred to accounts receivable at the time of billing. Its credit risk characteristics are the same as accounts receivable generated from similar contracts. Therefore, the Company believes that the expected credit loss rate of accounts receivable can also be applied to contracts. Changes in allowance losses on contract assets were as follows:

follows:
Beginning balance
Add: Provision (Reversal) for
impairment
Ending balance		 Year Ended December 31
2020
$2,389
(1,254)
$1,135		 2019
$1,715
674
$2,389

(3)Contract liabilities recognized for the years ended December 31, 2020 and 2019 under operating revenue amounted to $385,452 thousand and $686,125 thousand.

－332－

  • (4)As of December 31, 2020 and 2019, the transaction prices allocated to the performance obligations that were not fully satisfied amounted to $674,268 thousand and $1,234,863 thousand, respectively. The Company will recognize revenue as the construction is being completed and the expected timing for recognition of revenue is on various dates through December 2022.

6.27 Employee benefits, depreciation and amortization expense

Year Ended December 31, 2020

Nature
Employee benefits
Salary
Insurance
Pension (Note 1)
Remuneration to directors
Other employee benefits
Depreciation
Total		 OperatingCost
$651,786
71,366
39,591
-
137,709
484,214
$1,384,666		 OperatingExpense
$312,765
29,779
17,206
7,060
40,401
25,430
$432,641		 Total
$964,551
101,145
56,797
7,060
178,110
509,644
$1,817,307
Nature
Employee benefits
Salary
Insurance
Pension (Note 2)
Remuneration to directors
Other employee benefits
Depreciation
Total		 Year Ended December 31, 2019 Year Ended December 31, 2019 Year Ended December 31, 2019
OperatingCost
$624,630
73,915
41,417
-
128,165
513,440
$1,381,567		 OperatingExpense
$304,046
31,682
18,327
6,111
35,713
30,545
$426,424		 Total
$928,676
105,597
59,744
6,111
163,878
543,985
$1,807,991

(Note 1) Excluding pension of $709 thousand recognized as equipment prepayments. (Note 2) Excluding pension of $516 thousand recognized as equipment prepayments.

  • 1.As of December 31, 2020 and 2019, the Company had 1,402 and 1,420 employees, respectively. Among them 4 directors did not serve concurrently as employees in 2020 and 2019, respectively.

  • Additional disclosures are as follows:

  • (1)Average employee benefits for the year ended December 31, 2020 was $930 thousand (Amounts of employee benefits for the year ended December 31, 2020 less amounts of remuneration of directors for the year ended December 31, 2020/number of employees for the year ended December 31, 2020 less number of directors not serving concurrently as employees for the year ended December 31, 2020).

Average employee benefits for the year ended December 31, 2019 was $888

－333－

thousand (Amounts of employee benefits for the year ended December 31, 2019 less amounts of remuneration of directors for the year ended December 31, 2019/number of employees for the year ended December 31, 2019 less number of directors not serving concurrently as employees for the year ended December 31, 2019).

  • (2)Average salaries for the year ended December 31, 2020 was $690 thousand (Amounts of salaries for the year ended December 31, 2020/number of employees for the year ended December 31, 2020 less number of directors not serving concurrently as employees for the year ended December 31, 2019).

  • Average salaries for the year ended December 31, 2019 was $656 thousand (Amounts of salaries for the year ended December 31, 2019/number of employees for the year ended December 31, 2019 less number of directors not serving concurrently as employees for the year ended December 31, 2019).

  • (3)Changes of adjustments of average salaries was5.18% (Average salaries for the year ended December 31, 2020 less average salaries for the year ended December 31, 2019/average salaries for the year ended December 31, 2019).

  • (4) The company has established an audit committee, and the remuneration of independent directors has been included in the remuneration to directors for disclosure.

  • (5)The Company’s remuneration policies are as follows:

  • A.The remuneration of the directors of the company shall be determined in accordance with the rules of the remuneration system and structure of the company, with reference to the levels of competitors and listed companies. If the company has net income, it shall be allocated in accordance with the provisions of the Articles of Incorporation, and shall be reported to the shareholders meeting after being reviewed by the remuneration committee and approved by the board of directors. If the director is also an employee, remuneration should be paid in accordance with the rules of B and C below.

  • B.The remuneration standards for the general manager, senior executive vice president and vice general manager of the company shall be determined by the human resource department in accordance with the relevant rules of the company's personnel performance appraisal, then depend on individual performance and contribution to the overall operation of the company, and with reference to the market peer levels. The remuneration standard shall be reviewed by the remuneration committee and approved by the board of directors.

  • C.The remuneration policy of the company is based on individual's ability, contribution to the company, and personal performance, and it is positively correlated with operating performance. The overall remuneration package mainly includes three parts: basic salary, bonuses, employees’ compensation, and benefits, etc. According to the remuneration standards, the basic salary is based on the market competition situation of the position held by the employee and the remuneration policy. Bonuses and employees’ compensation are paid in connection with the achievement of the employee's, department goals or the company's operating performance; the benefit design should be based on the premise of complying with the law and taking into account the demands of the employees.

－334－

  • 3.According to Articles of Incorporation, compensation to employees and remuneration to directors shall neither be less than 0.2 % nor greater than 0.1% of the net income before tax and before which the compensation to employees and remuneration to directors are deducted from. Compensation to employees and remuneration to directors for 2020 was distributed at 0.2% and 0.1% of the net income before tax and Due to the accumulated loss of the Company for 2019, the estimated amount of the above compensation and remuneration were both $0 thousand. Any changes in the amounts, if any, after the annual financial statements were authorized for issue, shall be recorded as a change in accounting estimate, and should be adjusted the next year.

  • 4.Compensation to employees and remuneration to directors for the years ended December 31, 2020 and 2019 has been resolved and approved by the Board of Directors in March 2021 and 2020. Relevant amounts recognized in the financial statements are as follows:

Year Ended December 31

Resolved distributed
amount
Recognized amount in
the annual financial
report
Difference amount		 2020
Employees’
Compensation
Directors’
Remuneration
$447
$224
447
224
$ -
$ -		 2019 2019
Employees’
Compensation
$447
447
$ -		 Employees’
Compensation
$ -
-
$ -		 Directors’
Remuneration
$ -
-
$ -

The above-mentioned employee compensation was distributed in cash.

  • 5.Information about employee compensation and remuneration to directors approved by the Board of Directors is available at the Taiwan Stock Exchange Market Observation Post System website.

6.28 Interest Income

Interest Income
Item
Bank deposits
Refundable deposits
Loans to others
Others
Total		 Year Ended December 31
2020
$2,036
70,786
152
129
$73,103		 2019
$7,693
-
-
3,106
$10,799

－335－

6.29 Other Income

Other Income
Item
Rental income
Dividend income
Other income
Dumping margins
Income from insurance claim of fire
Income from sales of scraps
Guaranteed fee income
Others
Subtotal
Total		 Year Ended December 31
2020
$15,052
42,969
-
291,160
31,746
28,748
19,342
370,996
$429,017		 2019
$14,975
105,987
246,943
71,952
34,828
31,245
20,242
405,210
$526,172

  • 1.The Company’s Rolling Plant No. 3 was caught on fire in April 2018, resulting in damage of part of the equipment therein. The carrying amount of the damaged equipment was $85,048 thousand. Aside from recognizing deductible for fire loss of $7,000 thousand, an insurance claim receivable for the damaged part in the amount of $78,048 thousand was also recognized in December 31, 2018. In July 2020, January 2020, and January 2019, the Company has obtained $124,554 thousand, $166,606 thousand, and $150,000 thousand in insurance claim. After offsetting the insurance claim receivable, $124,554 thousand, $166,606 thousand, $71,952 thousand are recorded as “other income”.

  • 2.For information on dumping margins, please refer to Note 6.14.

6.30 Other gains and losses

Other gains and losses
Item
Valuation gain (loss) of financial assets mandatorily
measured at FVTPL
Net foreign exchange gain (loss)
Gain (loss) from disposal of property, plant, and
equipment
Gain on disposal of investment properties
Gain on disposal of noncurrent assets held for sale
Dumping margins (Note)
Others
Total		 Year Ended December 31
2020
$3,673
(85,486)
(10,968)
750,788
49,270
(46,192)
(11,447)
$649,638		 2019
$(8,088)
(33,204)
(19,102)
341,433
401,121
-
(10,807)
$671,353

(Note)For information on dumping margins, please refer to Note 6.14.

－336－

6.31 Finance Costs

Finance Costs
Item
Interest on loans
Interest on lease liabilities
Subtotal
Less: Amount qualified for capitalization
Finance costs		 Year Ended December 31
2020
2019
$380,708
$427,099
3,675
3,843
$384,383
$430,942
(2,193)
(820)
$382,190
$430,122
2019
$427,099
3,843
$430,942
(820)
$430,122

6.31 Income Tax 1.Income tax expense (1)Components of income tax expense

come Tax
ncome tax expense
(1)Components of income tax expense
Item
Current income tax expense
Adjustment to prior year income taxes
Tax on repatriation of offshore funds
Land value incremental tax
Deferred income tax originating and
reversed temporary differences
Income tax expense (benefit)		 Year Ended December 31
2020
$ -
-
12,240
27,597
62,290		 2019
$ -
124
-
25,741
(365,112)
$102,197 ($339,247)
(2)Income tax expense (benefit) associates with other comprehensive income
Year Ended December 31
Item
2020
2019
Share of other comprehensive income of
subsidiaries, associates and joint ventures
accounted for using equity method
Exchange differences on translation of
foreign financial statements
$23,984
($72,875)
Remeasurement of defined benefit plans
7,518
11,015
Total
$31,502
($61,860)		 (2)Income tax expense (benefit) associates with other comprehensive income
Year Ended December 31
Item
2020
2019
Share of other comprehensive income of
subsidiaries, associates and joint ventures
accounted for using equity method
Exchange differences on translation of
foreign financial statements
$23,984
($72,875)
Remeasurement of defined benefit plans
7,518
11,015
Total
$31,502
($61,860)		 (2)Income tax expense (benefit) associates with other comprehensive income
Year Ended December 31
Item
2020
2019
Share of other comprehensive income of
subsidiaries, associates and joint ventures
accounted for using equity method
Exchange differences on translation of
foreign financial statements
$23,984
($72,875)
Remeasurement of defined benefit plans
7,518
11,015
Total
$31,502
($61,860)
2020 2019
$23,984
7,518		 ($72,875)
11,015
$31,502 ($61,860)

－337－

2.Reconciliation of income before income tax and income tax expense recognized in profit or loss is as follows:

in profit or loss is as follows:
Item
Income (loss) before tax
Income tax expense (benefit) at the statutory rate
Tax effect of adjusting items:
Investment loss (gain) recognized under equity method
Unrealized inventory valuation loss (recovery gain)
Timing difference of revenue recognition
Unrealized (realized) investment loss
Non-levied securities and futures trading income (loss)
Gain (loss) on sale of land exempt from income tax
Unrealized (realized) impairment loss
Other adjustments
Loss carryforwards
Tax on repatriation of offshore funds
Adjustment to prior year income taxes
Land value increment tax
Net changes of deferred income tax
Income tax benefit recognized in profit or loss		 Year Ended December 31
2020
$837,365
$167,473
60,114
(32,002)
7,414
(12,215)
(4,408)
(160,012)
(30,489)
4,125
-
12,240
-
27,597
62,290
$102,127		 2019
($1,740,328)
($348,066)
389,255
29,062
(1,778)
(12,265)
130
(148,608)
-
45,232
47,038
-
124
25,741
(365,112)
($339,247)

The Company applied for and was approved the repatriation of offshore funds (including mainland China) within the time limit in accordance with the “The Management, Utilization, and Taxation of Repatriated Offshore Funds Act” effective from August 15, 2019. The applicable tax rate exempt from taxation is 8% for the first year and 10% for the second year under the general income tax system. A profit-seeking enterprise may apply to the Ministry of Economic Affairs for engaging in substantive investment within one year from the date of repatriating funds and has a 50% tax refund preference when completing the investment within the time limit.

3.Deferred income tax assets or liabilities from temporary differences, loss carry forwards and investment credits:

Item
Deferred income tax assets:
Temporary differences
Investment income (loss) recognized
under equity method
Exchange differences on translation of
foreign financial statements
Provision for inventory valuation loss
Impairment loss from property, plant
and equipment
Provision for sales return & discount		 Year Ended December 31,2020 Year Ended December 31,2020
Beginning
balance
$ 273,241
228,742
32,239
44,623
2,039		 Recognized in
profit or loss
$12,956
-
(32,002)
(30,489)
(1,431)		 Recognized in other
comprehensive
income
$ -
(23,984)
-
-
-		 Ending
balance
$286,197
204,758
237
14,134
608

－338－

Booking difference for depreciation
19,233
(1,255)
-
Compensation to unused annual leave
9,963
(182)
-
Net defined benefit liability
100,801
(12,766)
(7,518)
Timing differences in recognition of
cost and sales revenue
2,977
7,414
-
Unrealized exchange loss
6,824
(5,108)
-
Others
31,495
633
-
Unrealized loss carryforwards
47,038
(60)
-
Total
$799,215
$(62,290)
$(31,502)
Year Ended December 31,2019
Item
Beginning
balance
Recognized in
profit or loss
Recognized in other
comprehensive
income
Deferred income tax assets:
Temporary differences
Investment income (loss) recognized
under equity method
$ -
$ 273,241
$ -
Exchange differences on translation of
foreign financial statements
155,867
-
72,875
Provision for inventory valuation loss
3,177
29,062
-
Impairment loss from property, plant
and equipment
44,623
-
-
Provision for sales return & discount
3,366
(1,327)
-
Booking difference for depreciation
18,881
352
-
Compensation to unused annual leave
9,742
221
-
Net defined benefit liability
122,431
(10,615)
(11,015)
Timing differences in recognition of
cost and sales revenue
4,755
(1,778)
-
Unrealized exchange loss
-
6,824
-
Others
26,226
5,269
-
Unrealized loss carryforwards
-
47,038
-
Subtotal
$389,068
$348,287
$61,860
Deferred income tax liabilities:
Temporary differences
Unrealized exchange gains
$ (56)
$56
$ -
Investment income (loss) recognized
under equity method
(16,769)
16,769
-
Subtotal
($16,825)
$16,825
$-
Total
$372,243
$365,112
$61,860
4.Items not recognized as deferred income tax assets:
December 31
Item
2020
Investment loss recognized under equity
method
$606,637
Impairment loss on investments under
the cost approach
48,499
Remeasurement of defined benefit plans
14,574
Exchange differences on translation of
foreign financial statements
73,700
Total
$743,410		 19,233
9,963
100,801
2,977
6,824
31,495
47,038
$799,215		 (1,255)
-
(182)
-
(12,766)
(7,518)
7,414
-
(5,108)
-
633
-
(60)
-
$(62,290)
$(31,502)
Year Ended December 31,2019		 (1,255)
-
(182)
-
(12,766)
(7,518)
7,414
-
(5,108)
-
633
-
(60)
-
$(62,290)
$(31,502)
Year Ended December 31,2019		 (1,255)
-
(182)
-
(12,766)
(7,518)
7,414
-
(5,108)
-
633
-
(60)
-
$(62,290)
$(31,502)
Year Ended December 31,2019		 17,978
9,781
80,517
10,391
1,716
32,128
46,978
$705,423
Ending
balance
$273,241
228,742
32,239
44,623
2,039
19,233
9,963
100,801
2,977
6,824
31,495
47,038
$799,215
$ -
-
$-
$799,215
2020
$606,637
48,499
14,574
73,700
$743,410		 2019
$500,338
48,499
35,016
19,287
$603,140

－339－

  • 5.The Company’s income tax returns through 2018 have been ratified by the tax authorities.

6.33 Other Comprehensive Income

Item
Items that will not be reclassified
subsequently to profit or loss：
Remeasurement of defined benefit plans
Unrealized gain (loss) on financial assets at
fair value through other comprehensive
income
Share of subsidiaries, associates and joint
ventures accounted for using equity method:
Remeasurement of defined benefit plans
Unrealized valuation gain (loss) on
financial assets at fair value through other
comprehensive income
Subtotal
Items that may be reclassified subsequently to
profit or loss:
Share of subsidiaries, associates and joint
ventures accounted for using equity method:
Exchange differences on translation of
foreign financial statements
Gains (loss) on hedging instruments
Subtotal
Recognized in other comprehensive income
Item
Items that will not be reclassified
subsequently to profit or loss：
Remeasurement of defined benefit plans
Unrealized gain (loss) on financial assets at
fair value through other comprehensive
income
Share of subsidiaries, associates and joint
ventures accounted for using equity method:
Remeasurement of defined benefit plans
Unrealized valuation gain (loss) on
financial assets at fair value through other
comprehensive income
Subtotal		 Year Ended December 31, 2020 Year Ended December 31, 2020 Year Ended December 31, 2020
Before tax
Income tax expense
(benefit)
After tax
$37,591
$(7,518)
$30,073
(12,402)
-
(12,402)
23,564
-
23,564
134,264
-
134,264
$183,017
$(7,518)
$175,499
(73,506)
(23,984)
(97,490)
46
-
46
$(73,460)
$(23,984)
$(97,444)
$109,557
$(31,502)
$78,055
Year Ended December 31, 2019		 After tax
$30,073
(12,402)
23,564
134,264
$175,499
(97,490)
46
$(97,444)
$78,055
Before tax
$55,074
(16,454)
30,770
(35,901)
$33,489		 Income tax expense
(benefit)
($11,015)
-
-
-
($11,015)		 After tax
$44,059
(16,454)
30,770
(35,901)
$22,474

－340－

Items that may be reclassified subsequently to
profit or loss:
Share of subsidiaries, associates and joint
ventures accounted for using equity method:
Exchange differences on translation of
foreign financial statements
(439,118)
Gain (loss) on hedging instruments
(341)
Subtotal
($439,459)
Recognized in other comprehensive income
($405,970)
6.34 Earnings (loss) Per Share
Item
A.Basic earnings (loss) per share
Net income (loss) attributable to
shareholders of parent company
Weighted average number of outstanding
shares (thousand shares)
Basic earnings (loss) per share (after tax)
(NT$)
B.Diluted earnings (loss) per share
Net income (loss) attributable to
shareholders of parent company
Weighted average number of outstanding
shares (thousand shares)
Impact on employees' compensation
(Note)
Weighted average number of ordinary
shares outstanding after dilution
(thousand shares)
Diluted earning (loss) per share (after tax)
(NT$)		 Items that may be reclassified subsequently to
profit or loss:
Share of subsidiaries, associates and joint
ventures accounted for using equity method:
Exchange differences on translation of
foreign financial statements
(439,118)
Gain (loss) on hedging instruments
(341)
Subtotal
($439,459)
Recognized in other comprehensive income
($405,970)
6.34 Earnings (loss) Per Share
Item
A.Basic earnings (loss) per share
Net income (loss) attributable to
shareholders of parent company
Weighted average number of outstanding
shares (thousand shares)
Basic earnings (loss) per share (after tax)
(NT$)
B.Diluted earnings (loss) per share
Net income (loss) attributable to
shareholders of parent company
Weighted average number of outstanding
shares (thousand shares)
Impact on employees' compensation
(Note)
Weighted average number of ordinary
shares outstanding after dilution
(thousand shares)
Diluted earning (loss) per share (after tax)
(NT$)		 72,875
(366,243)
-
(341)
$72,875
($366,584)
$61,860
($344,110)
Year Ended December 31		 72,875
(366,243)
-
(341)
$72,875
($366,584)
$61,860
($344,110)
Year Ended December 31		 (366,243)
(341)
($366,584)
($344,110)
2020
$735,238
1,894,147
$0.39
735,238
1,894,147
33
1,894,180
$0.39		 2019
$(1,401,081)
1,913,327
$(0.73)
$(1,401,081)
1,913,327
-
1,913,327
$(0.73)

(Note) Since the Company offered to settle compensation paid to employees in cash or shares, the Company assumed the entire amount of the compensation would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

－341－

7.RELATED PARTY TRANSACTIONS

7.1 Parent and ultimate controlling party.

The Company is the ultimate controlling party of the Group.

7.2 Names of related parties and relationship categories

Names of related parties
Shin Yang Steel Co., Ltd.
Shin Phui Steel Corporation
Yieh Hsing Enterprise Co., Ltd.
Great Emperor Hotel Co., Ltd.
Kingsgarden International Co., Ltd.
Yieh Phui (Hong Kong) Holdings Limited
Yieh Phui (China) Technomaterial Co., Ltd.
Tianjin Lianfa Precision Steel Corporation
Kuo Chang Enterprise Co., Ltd.
United Brightening Development Corp.
Sin Bang Investment & Development Co., Ltd.
Hong Yuh Assets Management Co., Ltd.
EMMT Systems Corporation
Gen-Wan Technology Corp.
AWID Asia Co., Ltd.
Yieh Phui America Inc.
Yieh United Steel Corp.
Yieh Mau Corp.
Asiazone Co., Ltd.
Cheng Shin Security Co., Ltd.
Eliter International Corp.
Unipattern Corporation Co., Ltd.
E-Da Bus Co., Ltd.
E-DA Tour Bus Co., Ltd.
E-Da Development Co., Ltd
E-Da Visual Effects Company Limited.
Yieh Hong Enterprise Co., Ltd.
Yieh Corporation Limited
LI-SIN Business Co., Ltd.
Skylark International Hotel Co., Ltd.
Pacific Harbor Stevedoring Corporation
Royal Palace Hong Kong Style Restaurant
Co., Ltd.
Chiao-Ling Leisure Co., Ltd.
New Spring Construction Corp.
E-Da Royal Hotel Company Ltd.
E-Da Hospital
I-Shou University
I-Shou University Internship Center
Long Hua Travel Services Co., Ltd.
Chen,Yung-Shian		 Related party category
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party
Other related party

－342－

7.3 Significant transactions with related parties

1.Operating revenue

Operating revenue
Item
Sales revenue
Construction
revenue		 Related party
category/Name
Subsidiaries
Associates
Other related parties
Total
Subsidiaries
Associates
Other related parties
Total		 Year Ended December31
2020
$970,195
1,198,693
886,253
$3,055,141
$664
2,023
471,628
$474,315		 2019
$1,196,381
1,649,934
1,332,992
$4,179,307
$1,933
5,053
969,047
$976,033

  • (a)Selling price to the Company's related parties, including hot rolled steel coils, galvanized steel coils, scraps (bars), etc. and trading terms were the same with those to other customers. Payment terms were within one to two months.

  • (b)Selling price of carbon steel and steel scraps to related parties were set with reference to the purchase price of a non-related party as a trading counterparty. Payment term is monthly, and closes in 15 days.

  • (c)The construction contracts between the Company and above-mentioned related parties were established at prices negotiated by both parties. Contract proceeds were collected according to the payment terms stated in these contracts. Unless agreed on by both parties, payments cannot be delayed.

2.Purchases

Purchases
Relatedpartycategory/Name
Subsidiaries
Associates
Other related party:
Yieh Hong Enterprise Co., Ltd.
Others
Total		 Year Ended December 31
2020
$4,996
50,563
3,273,609
34,265
$3,363,433		 2019
$331,794
208,746
996,124
34,235
$1,570,899

Items purchased by the company from above related parties were mainly stainless billets and carbon steel billets. The purchase prices were similar to that offered to other suppliers. Payment term is LC at sight or T/T before shipment (not significantly different than terms to other suppliers).

－343－

3.Contract assets

3.Contract assets
Item
Relatedpartycategory/Name
Contract
assets
Subsidiaries
Associates
Other related party:
New Spring construction Corp.
Others
Total
Less: Loss allowance
Net
4.Contract liability
Item
Relatedpartycategory/Name
Contract
liabilities
Subsidiaries
Associates
Other related party:
New Spring construction Corp.
Net		 Year Ended December 31
2020
2019
$563
$ -
-
3,271
92,604
518,380
164
164
$93,331
$521,815
-
-
$93,331
$521,815
Year Ended December31		 2019
$ -
3,271
518,380
164
$521,815
-
$521,815
2020
$5,180
1,239
38,183
$44,602		 2019
$-
-
84,625
$84,625

5.Receivables from related parties (excluding loans to related parties and Contract assets )

assets )
Item
Notes receivable
Accounts
receivable		 Relatedpartycategory/Name
Other related parties
Associate:
Yieh United Steel Corp.
Others
Total
Less: Loss allowance
Net
Subsidiaries
Associate:
Asiazone Co., Ltd.
Others
Other related parties
Total
Less: Loss allowance
Net		 December 31
2020
$22
5,557
47
$5,626
-
$5,626
$60,536
154,046
19,261
988
$234,831
(668)
$234,163		 2019
$23
-
45
$68
-
$68
$63,122
169,307
17,006
1,900
$251,335
(605)
$250,730

－344－

December31
Item
Relatedpartycategory/Name
2020
2019
Other receivables
Subsidiaries
$8,943
$10,305
Associates
1,562
1,900
Other related parties
1
570
Total
10,506
$12,775
Less: Loss allowance
-
-
Net
10,506
$12,775
6.Payables to related parties (excluded loans from related parties)
December 31
Item
Relatedpartycategory/Name
2020
2019
Notes payable
Other related parties
$166
$2,506
Accounts payable
Subsidiary:
Shin Yang Steel Co., Ltd.
$-
$333,615
Other related parties
6,031
5,901
Total
$6,031
$339,516
Other payables
Subsidiaries
$1,790
$1,371
Associates
2,414
35
Other related parties
16,523
4,610
Total
$20,727
$6,016		 December31 December31
2019
$10,305
1,900
570
$12,775
-
$12,775
2020
$166
$-
6,031
$6,031
$1,790
2,414
16,523
$20,727		 2019
$2,506
$333,615
5,901
$339,516
$1,371
35
4,610
$6,016

7.Prepayments

Prepayments
Relatedpartycategory/Name
Other related party:
Yieh Hong Enterprise Co., Ltd.		 December31
2020
$108,340		 2019
$24,215

8.Asset transaction

(1)Acquisition of property, plant and equipment: 2020:

020:
Type of relatedparty
Subsidiaries
Associates
Other related parties		 Transaction target
Equipment prepayment
computer equipment
computer equipment		 Transaction
amount
$406
1,250
254

The above-mentioned transaction prices were agreed on by both parties upon negotiation with reference to appraisal reports. As of December 31, 2020, the transaction payments were fully paid.

－345－

2019:

019:
Type of relatedparty
Subsidiaries
Other related parties		 Transaction target
Equipment prepayment
Wall construction and
computer equipment		 Transaction
amount
$106,015
1,157

The above-mentioned transaction prices were agreed on by both parties upon negotiation with reference to appraisal reports. As of December 31, 2019, the transaction payments were fully paid.

(2)Disposal of property, plant and equipment:

2020:None 2019:

020:None
019:
Type of relatedparty
Associates		 Transaction target
Transportation
equipment		 Transaction
amount
$50		 Gain or loss on
disposal
$42

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2019, all the transaction amount was fully recovered.

(3)Acquisition of investment properties:

2020:

2020:
Type of relatedparty/ Name
Other related party：
New Spring Construction Corp.		 Transaction content
Construction in progress		 Transaction
amount
$14,367

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2020, the unpaid portion was $14,367 thousand.

2019:

thousand.
2019:
Type of relatedparty/ Name
Other related party：
New Spring Construction Corp.		 Transaction content
Construction in progress		 Transaction
amount
$8,411

The above-mentioned transaction price was agreed on by both parties upon negotiation. As of December 31, 2019, the transaction price was fully paid.

(4) Disposal of investment properties:

2020:

Transaction Gain or loss Type of related party Transaction target amount on disposal Subsidiary: $154,786 $112,805 Shin Phui Steel Corporation Land

－346－

The above-mentioned transaction price was set by reference to appraisal reports offered by professional institutions, and were agreed on by both parties upon negotiation or through price comparison. As of December 31, 2020, all the transaction amount was fully recovered. 2019: None.

(5) Disposal of financial assets 2020:

Transaction Gain or loss Type of related party Transaction target amount on disposal Subsidiary: 26,275 thousand shares United Brightening of Eliter International $284,488 $- Development Corp. Corp.- Preferred stock D

The above-mentioned transaction price of shares was agreed on by both parties upon negotiation with reference to the net worth per share of the investees. As of December 31, 2020, the transaction amount was fully recovered. 2019: None.

(6)Disposal of other assets: 2020: None. 2019:

(6)Disposal of other assets:
2020: None.
2019:
Type of relatedparty
Associates		 Transaction target
26 thousand shares of
E-Da Cultural Creative
Industry Co., Ltd.		 Transaction
amount
$203		 Gain or loss
on disposal
$20

The above-mentioned transaction price of shares was agreed on by both parties upon negotiation with reference to the net worth per share of the investees. As of December 31, 2019, the transaction amount was fully recovered.

9.Lessee agreement:

  • (1)Acquisition of right-of-use assets:

2020: None. 2019:

2020: None.
2019:
AccountingItem
Acquisition of right-of-use
assets		 Relatedpartycategory
Subsidiaries		 Transaction amount
$250,757

Due to the application of IFRS 16 on January 1, 2019, the Company increased $250,757 thousand of right-of-use assets.

－347－

(2) Lease liabilities:

(2) Lease liabilities: (2) Lease liabilities:
December 31
AccountingItem
Transaction target
2020
2019
Lease liabilities
Subsidiaries
$157,851
$165,426
Year Ended December 31
Item
Related PartyCategory
2020
2019
Lease liabilities
Subsidiaries
$3,167
$3,311
Rent expense
Associates
$5,256
$5,466
Other related parties
2,008
2,036
Total
$7,264
$7,502		 December 31
2019
Lease liabilities
Item
Lease liabilities
Rent expense		 $165,426
2020
$3,167
$5,256
2,008
$7,264		 2019
$3,311
$5,466
2,036
$7,502

Above lease terms are based on the contract, and rent is paid monthly or quarterly.

10.Lessor agreement:

The Company leased the lands in Yuliao Rd., Qiaotou Dist and Ding-Yen-Tien Section in Kaohsiung City, with a total area of 45,785 square meters to its subsidiary, Shin Yang Steel Co., Ltd. under operating leases. The lease term started is from April 1, 2015 to March 31, 2025, for a total of 10 years. The rent is collected on a monthly basis with reference to the rent level of similar assets. Rental income were both $11,796 thousand for the years ended December 31, 2020 and 2019. As of December 31, 2020 and 2019, the total lease payments to be received in the future were $50,133 thousand and $61,929 thousand, respectively.

11.Loans to related parties:

(1)Other receivables

2020:

11.Loans to related parties:
(1)Other receivables
2020:
Type of relatedparty / Name
Subsidiary：
United Brightening Development Corp.		 December 31,2020
Endingbalance
$ -		 Highest balance
$60,000

(2)Interest income

(2)Interest income
Type of relatedparty/ Name
Subsidiary：
United Brightening Development Corp.
Interest Rate Range		 Year Ended
December 31,2020
$152
2.25%

2019: None.

－348－

12.Endorsements and guarantees:

  • (1)The Company borrowed from banks for related parties and details of endorsement were as follows:
rsement were as follows:
Type of relatedparty
Subsidiaries		 December31,2020
Currency
USD
CNY
NTD		 Amount
121,000
1,487,500
1,236,000
Type of relatedparty
Subsidiaries		 December31,2019 December31,2019
Currency
USD
CNY
NTD		 Amount
147,000
1,487,500
1,236,000
  • (2)Lands were provided by subsidiaries as collateral for bank loans amounted to both $1,842,230 thousand as of December 31, 2020 and 2019.

13.Others

  • (1)Miscellaneous income
thers
Miscellaneous income
Relatedpartycategory/Name
Subsidiary：
Shin Yang Steel Co., Ltd.
Yieh Phui (Hong Kong) Holdings Limited
Yieh Phui (China) Technomaterial Co., Ltd.
Others
Associate：
Yieh United Steel Corp.
Others
Other related parties
Total		 Year Ended December 31
2020
$9,497
9,708
15,941
4,619
20,889
160
323
$61,137		 2019
$10,384
11,291
16,538
5,115
20,716
186
530
$64,760

These were mainly guarantee fee, and technical service income, etc.

(2)Miscellaneous expenses

Miscellaneous expenses
Relatedpartycategory
Subsidiaries
Associates
Other related parties
Total		 Year Ended December 31
2020
$6,508
32,321
79,645
$118,474		 2019
$6,261
31,747
99,035
$137,043

－349－

These were mainly technical service, and export cost, etc.

(3)Construction contracts

(a)Construction contracts in progress with related parties as of December 31, 2020 were as follows:

2020 were as follows:
Type of related Total contract contract assets
party/Name Name of construction price / liabilities
Subsidiaries Plant column beam $2,167 $563 / $ -
renewal and assembly
engineering, etc.
Associates Door type double host 5,296 - / 1,239
grab of overhead cranes,
etc.
Other related party：
New Spring Ground structures 3,388,026 92,604 / 38,183
Construction Corp. construction for E-Da
Asia Commercial Plaza,
etc.
Others LED screen construction 3,300 164 / -
(b)Construction contracts in progress with related parties as of December 31,
2019 were as follows:
Type of related Total contract contract assets
party/Name Name of construction price / liabilities
Associates Door type double host $8,971 $3,271 / $ -
grab of overhead cranes,
etc.
Other related party：
New Spring Ground structures 3,376,861 518,380 /84,625
Construction Corp. construction for E-Da
Asia Commercial Plaza,
etc.
Other LED screen construction 3,300 164 / -

14.Where the Company participated in the cash offering by related parties and consequently increased its investment are disclosed as follows: 2020:

2020:
Investee
Subsidiary：
Kuo Chang Enterprise Co., Ltd.
Great Emperor Hotel Co., Ltd. Corp.
Kings Garden International Co., Ltd.		 Investment Increase
Amount
$68,833
1,081,500
72,100		 Shareholding
Percentage
Shares
(thousand
shares)
6,883
105,000
7,000		 Before
Offering
99.04%
41.18%
49.28%		 After
Offering
99.04%
54.55%
50.12%

－350－

Kings Garden International Co., Ltd.
Shin Phui Steel Corporation
Sin Bang Investment & Development
Co., Ltd.
United Brightening Development Corp.		 Investment Increase
-
209,066
17,850
178,500
1,890
18,900
2,389
23,890		 Shareholding
Percentage
50.12%
(Note)
100.00%
100.00%
100.00%
100.00%
95.56%
95.56%

(Note) Prepaid investment 2019:

(Note) Prepaid investment
2019:
Investee
Subsidiary：
Kuo Chang Enterprise Co., Ltd.
Hong Yuh Assets Management Co., Ltd.
Great Emperor Hotel Co., Ltd. Corp.
Great Emperor Hotel Co., Ltd. Corp.
Kings Garden International Co., Ltd.
Associate：
E-Da Development Crop.
E-DA Tour Bus Co., Ltd.
E-Da Bus Transportation Co., Ltd.		 Investment Increase
Amount
$30,702
103,200
298,700
133,597
659,200
227,538
11,400
13,669		 Shareholding
Percentage
Shares
(thousand
shares)
3,070
10,320
29,000
-
64,000
22,754
1,140
1,367		 Before
Offering
99.04%
80.00%
35.98%
41.18%
39.27%
28.44%
19.00%
17.09%		 After
Offering
99.04%
80.00%
41.18%
(Note)
49.28%
28.44%
19.00%
17.09%

(Note) Prepaid investment

  • 15.The Company entrusted the subsidiary, Yieh Phui America Inc., to sell the prepainted and galvanized steel coils amounted to $2,472,052 thousand and $2,973,461 thousand, respectively. Due to the above transactions, the contract liabilities were $252,055 thousand and $286,719 thousand as of December 31, 2020 and 2019, respectively.

  • 16.Part lands of the Company are unable to be registered under the name of the Company.

Some of the Company’s lands recorded as property, plant, and equipment, are unable to be registered under the name of the Company temporarily and registered under individuals, Chen Yung-Shian (executive vice president of the Company) due to regulation restriction. Accordingly, the lands are mortgage registered to the Company as safeguard measures.

－351－

7.4 Information about remunerations to the major management:

Item
Salary and other short-term employee benefits
Benefits after retirement
Other long-term employee benefits
Termination benefits
Share-based payments
Total		 Year Ended December 31 Year Ended December 31
2020
$30,663
11,357
-
-
-
$42,020		 2019
$28,514
560
-
-
-
$29,074

8.PLEDGED ASSETS

The following assets have been pledged as collateral for long-term and short-term loans:

Item
Pledged demand deposits
Subtotal of other financial assets - current
Pledged demand deposits
Pledged time deposits
Sub-total of other financial assets - noncurrent
Property, plant and equipment (net)
Noncurrent assets held for sale
Investment properties
Total		 December 31 December 31
2020
$164,162
164,162
46,078
160
46,238
6,422,400
159,832
443,349
$7,235,981		 2019
$55,236
55,236
46,055
114,083
160,138
6,857,942
23,342
923,785
$8,020,443

9.SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED

CONTRACT COMMITMENTS

(1)Guarantee notes issued to banks by the Company for loans and purchases performance totaled $25,050,703 thousand and $26,791,984 thousand of as December 31, 2020 and 2019, respectively.

  • (2) Guarantee notes received by the Company for its contract performance and creditor’s right totaled $169,019 thousand and $179,826 thousand as of December 31, 2020 and 2019, respectively.

(3)The unused letters of credit as of December 31, 2020 and 2019 are as follows:

December 31,2020
L/C Amount
SecurityDeposit
NTD294,737
-
USD 14,362
-
JPY 1,094,460
-
EUR 71
-		 December 31,2019 December 31,2019
L/C Amount
NTD294,737
USD 14,362
JPY 1,094,460
EUR 71		 L/C Amount
NTD 436,680
USD
3,360
JPY
4,679		 SecurityDeposit
-
-
-

(4)Capital expenditures committed but not yet incurred are as follows:

Item
Property, plant and equipment		 December 31 December 31
2020
$ 362,477		 2019
$ 445,707

－352－

  • (5)For the Company’s endorsement for others as of the years ended December 31, 2020 and 2019, please refer to Note 7.3.12.

  • (6)As of December 31, 2020 and 2019, guarantees provided to banks by the Company for performance and warranty amounted to $31,963 thousand, and $115,823 thousand, respectively.

  • (7)As of December 31, 2020 and 2019, guarantee letters of credit issued by the Company for export business totaled USD $0 thousand and USD $3,800 thousand, respectively.

  • (8)Establishment of important construction contracts

  • (a)As of December 31, 2020, estimated total contract costs, contract costs paid, and expected completion dates but not completed are summarized below:

Type of construction Contract price
/Total estimated
construction cost		 Construction
cost paid
/Completion%		 Expected year of
completion /Accumulated
profit or loss recognized
Above-ground structures
construction for E-Da Asia
Commercial Plaza		 1,928,244
1,810,500		 1,776,054
98.10%		 Year 2021
115,504
Manufacture and installation
of overhead cranes sized
300t(150t+150t)*43m for the
Wind Power Department of
Century Iron and Steel
Industrial Co. Ltd.		 205,000
171,912		 166,713
96.98%		 Year 2021
32,087
6 40T-gantry cranes for
storage in the rear area at
Wharf No. 120 of Kaohsiung
Harbor		 311,100
260,717		 259,326
99.47%		 Year 2021
50,114
Construction of phase 1
Pangu buildings by Greaten
Construction Co.,Ltd.		 220,807
207,766		 194,406
93.57%		 Year 2021
12,202
Manufacturing and
installation of 13 overhead
cranes, their steel tracks and
safety electric bus-way for
GMTC steel furnace plant at
Liuying		 313,600
307,704		 261,376
84.94%		 Year 2021
5,008
Development project phase 1
of district C of the core area
of Shalun Smart Green
Energy Science City by Reiju
Construction		 260,203
257,273		 248,773
96.70%		 Year 2021
2,833
Steel structure engineering
construction of E-Da Empire
Buildings by New Spring
ConstructionCorp.		 1,320,433
1,280,441		 1,176,100
91.85%		 Year 2021
36,733
New Construction of New
Crystal Section of Tainan City
byDongpu Construction		 207,251
196,791		 174,345
88.59%		 Year 2021
9,268

－353－

Manufacturing and
installation of 14 overhead
cranes, and safety electric bus-
way for CSBC Corporation
Taiwan		 170,567
165,017		 123,319
74.73%		 Year 2021
4,148
TSMC’s R&D Center Phase I
Office building B production
project in hsin - chu science
park by Tung Ho Steel
Enterprise Corp.		 190,546
172,309		 35,252
20.46%		 Year 2022
3,731

(b)As of December 31, 2019, estimated total contract costs, contract costs paid, and expected completion dates but not completed are summarized below:

Type of construction Contract price
/Total estimated
construction cost		 Construction
cost paid
/Completion %		 Expected year of
completion /Accumulated
profit or loss recognized
Above-ground structures
construction for E-Da Asia
Commercial Plaza		 1,928,244
1,811,465		 1,731,965
95.61%		 Year 2020
111,655
Construction and installation
of 40T*42M tracked overhead
container crane for China
Container Transport at pier 10
and 11 of TaichungHarbor		 202,300
205,019		 204,853
99.92%		 Year 2020
(2,716)
Manufacture and installation
of overhead cranes sized
300t(150t+150t)*43m for the
Wind Power Department of
Century Iron and Steel
Industrial Co. Ltd.		 205,000
200,458		 156,173
77.91%		 Year 2020
3,539
6 40T-gantry cranes for
storage in the rear area at
Wharf No. 120 of Kaohsiung
Harbor		 311,100
260,717		 259,208
99.42%		 Year 2020
50,091
Construction of phase 1
Pangu buildings by Greaten
Construction Co.,Ltd.		 220,807
224,596		 185,857
82.75%		 Year 2020
(3,789)
Manufacturing and
installation of 13 overhead
cranes, their steel tracks and
safety electric bus-way for
GMTC steel furnace plant at
Liuying		 313,600
312,494		 227,278
72.73%		 Year 2020
804
YKK Taiwan's Chungli Plant
No.2 construction project by
ChungLuConstruction		 341,610
335,419		 317,844
94.76%		 Year 2020
5,867

－354－

Development project phase 1
of district C of the core area
of Shalun Smart Green
Energy Science City by Reiju
Construction		 261,804
260,244		 247,754
95.20%		 Year 2020
1,485
Steel structure engineering
construction of E-Da Empire
Buildings by New Spring
ConstructionCorp.		 1,320,433
1,280,441		 779,886
60.91%		 Year 2020
24,358
New Construction of New
Crystal Section of Tainan
CitybyDongpu Construction		 203,675
200,918		 45,632
22.71%		 Year 2020
626
Manufacturing and
installation of 14 overhead
cranes, and safety electric
bus-way for CSBC
Corporation Taiwan		 170,567
165,017		 18,659
11.31%		 Year 2020
628

  • (9)Great Emperor Hotel Co., Ltd. and Kings Garden International Co., Ltd., two subsidiaries, entered into the syndicated loan agreements with Land Bank of Taiwan and First Commercial Bank in August 2014. Yieh United Steel Corp., Yieh Phui Enterprise Co., Ltd., and Yieh Hsing Enterprise Co., Ltd. issued a commitment letter before the first use that. the Company and its related parties shall jointly hold more than 50% of Kings Garden International Co., Ltd. and Great Emperor Hotel Co., Ltd.’s issued shares and gain the majority of directors' seats at all times. The Group held 100% of Kings Garden International Co., Ltd. and Great Emperor Hotel Co., Ltd. and acquired all directors' seats of both companies as of December 31, 2020.

  • (10)In December, 2020, the Company sold part of Land in Pingnan Section, Fangliao Township, Pingtung County. The total contract price is $699,634 thousand, from which the expected disposal gain of $539,802 thousand is derived. The abovementioned transaction price is determined by both parties upon negotiation by reference to the appraisal report made by Evermore Valuation Real Estate Appraisal Firm. As of December 31, 2020, contract deposits of $70,000 thousand have been collected. The ownership transfer will be completed in accordance with the scheduled payment terms as stipulated in the contracts.

10.SIGNIFICANT DISASTER LOSS:NONE.

11.SIGNIFICANT SUBSEQUENT EVENTS:NONE.

12.OTHERS

(1) Capital risk management

As the Company needs to maintain sufficient capital to meet the needs for expansion and plant and equipment improvement, capital management of the Company focuses on ensuring there are sufficient financial resources and operating plans to meet the demands for operating capital, capital expenditure, research and development expense, loan repayment and dividend distribution in the next 12 months.

－355－

(2) Financial Instruments

  1. Financial risk of financial instruments

The Company’s daily operations are affected by various financial risks, e.g. market risk (including exchange rate, interest rate and price risks), credit risk and liquidity risk. The Company is devoted to identify, assess and avoid market uncertainties in order to eliminate the potential adverse effects of market changes on the financial performance.

Before engaging in significant transactions, due approval process by the Board of Directors must be carried out based on related protocols and internal control procedures. While the financial plan is underway, the Company shall comply with relevant financial operation procedures on the overall financial risk management and segregation of duties at all times.

The nature and degree of significant financial risks

  • A. Market risks

  • (A) Foreign exchange rate risk:

    • The Company is exposed to exchange rate risk arising from the sales, purchases and borrowings in currencies other than the Company’s functional currency, as well as from net investment of foreign operations. Functional currencies adopted by entities within the Company mainly comprise New Taiwan Dollars, Such transactions are denominated mainly in USD. To avoid a decrease in the value of assets dominated in foreign currency and volatility in future cash flows due to changes in exchange rates, the Company hedges the exchange rate risk with foreign-currency borrowings and derivative financial instruments .Those derivative financial instruments can diminish but not completely eliminate the impacts of changes in exchange rate. As net investments in foreign operations are for strategic purposes, they are not hedged by the Company. a. Exchange rate exposure and sensitivity analysis:
Amount
in Foreign
Currency
(Foreign currency: Functional currency)
Financial assets
Monetaryitems
USD:NTD
34,689
Investments
accounted for using
equitymethod
USD:NTD
368,905
Financial liabilities
Monetaryitems
USD:NTD
23,852		 Exchange
rate		 December31,2020 December31,2020 December31,2020
Presented
amount
(New Taiwan
Dollars)
988,035
10,506,412
679,337		 SensitivityAnalysis
Range
of
change
Up 1%
Up 1%
Up 1%		 Effects on
profit or
loss
9,880
-
(6,793)		 Effects
on
Equity

28.48
28.48
28.48		 -
105,064
-

－356－

December 31, 2019 Sensitivity Analysis

Amount
in Foreign
Currency
(Foreign currency: Functional currency)
Financial assets
Monetaryitems
USD:NTD
72,293
Investments
accounted for using
equitymethod
USD:NTD
334,512
Financial liabilities
Monetaryitems
USD:NTD
1,549		 Exchange
rate

29.98
29.98
29.98		 Presented
amount
(New Taiwan
Dollars)
2,167,350
10,028,670
46,430		 Range
of
change
Up 1%
Up 1%
Up 1%		 Effects on
profit or
loss
21,674
-
(464)		 Effects
on
Equity
-
100,287
-

If NTD appreciates against the above-mentioned currencies, held all other variables constant, the impact generated as of December 31, 2020 and 2019 would stay the same with the reverse result.

  • b. Due to the exchange rate volatility, total exchange gains and losses (including realized and unrealized) from the Company’s monetary items amounted to $(85,486) thousand and $(33,204) thousand for the years ended December 31, 2020 and 2019, respectively.

  • (B) Price risk

  • Since the Company’s investment in securities is classified as financial assets at FVTPL or financial assets at FVTOCI on the standalone balance sheet, the Company does not expose to price risks of securities. The Company mainly invests in domestic listed and unlisted stocks and beneficiary certificates. The price of such securities can be affected by changes in future value of those investment targets.

  • If the security price goes up or down by 1%, the post-tax profit or loss for the year 2020 and 2019 will increase or decrease by $2,341 thousand and $5,281 thousand due to the increase or decrease of the fair value of financial assets measured at FVTPL. The post-tax other comprehensive income for the year 2020 and 2019 will increase or decrease by $6,909 thousand and $7,044 thousand due to the increase or decrease of the fair value of financial assets measured at FVTOCI.

  • (C) Interest rate risk

The carrying amount of the Company’s financial assets and financial liabilities that are exposed to interest rate risk at the reporting date is stated as follows:

liabilities that are exposed to
as follows:		 interest rate risk at the reporting date is stated
Item
With fair value interest rate risk
Financial assets
Financial liabilities
Net		 Carrying Amount
December 31,2020
$213,452
(809,085)
$(595,633)		 December 31,2019
$638,746
(817,620)
$(178,874)

－357－

Carrying Amount

Carrying Amount
With cash flow interest rate risk
Financial assets
Financial liabilities
Net		 $383,456
(16,224,098)
$(15,840,642)		 $592,312
(18,091,727)
$(17,499,415) 
  - a. Sensitivity analysis of those with fair value interest rate risk: The Company classifies its investment in preferred stocks with fixed income as financial assets measured at FVTPL. Fair value of such preferred stock investment changes in line with the interest rate changes in the market. If the market interest rate goes up 1% and other variables are held constant, the profit or loss for the year 2020 and 2019 will decrease by $1,774 thousand and $6,109 thousand, respectively.

  - b.Sensitivity analysis of those with cash flow interest rate risk: The interest-fluctuate instruments possessed by the Company were floating-interest assets (liabilities). Therefore the effective interest rate, as well as the future cash flows, changes along with the market movement. Every one percent reduce (increase) in the market interest will increase (decrease) the net profit by $(158,406) thousand and $(174,994) thousand for the years 2020 and 2019, respectively.

  • B. Credit risk

  • Credit risk refers to the risk of financial loss to the Company arising from default by counter-parties of financial instruments on the contract obligations. Credit risk of the Company mainly comes from receivables under operating activities and bank deposits and other financial instruments under investing activities. Credit risks related to operation and finance risks are managed separately.

Credit risk related to operations

To maintain the quality of accounts receivable, the Company has established the procedures for credit risk management with regards to its operations. Risk assessment on individual customer includes factors that could affect the customer's ability to pay, such as the customer's financial status, the Company’s internal credit ratings, historical transactions and current economic conditions. Financial credit risk

The credit risks of bank deposits and other Financial instruments are measured and monitored by the Company’s financial departments. The Company does not expect significant credit risk because the counterparties are creditworthy and investment-graded financial institutions, companies and government agencies without any significant default concerns. In addition, the Company does not have any debt instrument investments that are either measured at amortized cost, or at FVTOCI.

  • (A) Credit concentration risk

As of December 31, 2020 and 2019, the top ten clients accounted for 61.71% and 69.24% of the Company’s accounts receivable, indicating a credit concentration risk. However, no significant credit concentration risk was shown from the remaining accounts receivables.

－358－

  • (B) Measurement of expected credit impairment loss

  • a. Accounts receivables and contract assets apply the simplified approach. Please refer to Note 6.4 and Note 6.26 for details.

  • b. Indications for determining whether the credit risk is increased significantly: None (the Company does not have any debt instrument investments that are either measured at amortized cost, or at FVTOCI).

  • c. Collaterals and other credit enhancement held to avoid credit risks from financial assets

The following table shows the maximum exposure to credit risk regarding financial assets recognized in the standalone balance sheets, pledged collateral, master netting arrangements and other credit enhancement held by the Company:

Decreased amount of maximum exposure to credit risks

December31,2020
Credit-impaired financial
instruments to which impairment
requirements of IFRS9 are
applicable
Financial instruments to which
the impairment requirements of
IFRS 9 are not applicable：
Financial assets at fair value
through profit and loss
Financial assets measured at
FVTOCI
Total		 CarryingAmount
$-
234,138
690,916
$925,054		 Collateral
$-
-
-
$-		 Net Settlement
Agreement
$-
-
-
$-		 Other Credit
Enhancement
$-
-
-
$-		 Total
$-
-
-
$-
December31,2019
Credit-impaired financial
instruments to which impairment
requirements of IFRS9 are
applicable
Financial instruments to which
the impairment requirements of
IFRS 9 are not applicable：
Financial assets at fair value
through profit and loss
Financial assets measured at
FVTOCI
Total		 CarryingAmount
$-
528,148
704,405
$1,232,553		 Decreased amount of maximum exposure to credit risks Decreased amount of maximum exposure to credit risks Decreased amount of maximum exposure to credit risks Decreased amount of maximum exposure to credit risks
Collateral
$-
-
-
$-		 Net Settlement
Agreement
$-
-
-
$-		 Other Credit
Enhancement
$-
-
-
$-		 Total
$-
-
-
$-
  • C. Liquidity risk

(A) Liquidity risk management

The Company’s objecting in managing liquidity risk is to maintain a sufficient level of cash and cash equivalents, highly-liquid marketable securities and credit lines with banks for daily operations in order to ensure the financial flexibility of the Company.

－359－

  • (B) The table below shows an analysis of the financial liabilities held by the Company with defined repayment terms based on maturity dates and undiscounted payment at maturity:
Non-derivative financial
Liabilities		 December 31, 2020 December 31, 2020 December 31, 2020
Within 6
months		 7-12 months 1-2 years 2-5 years Over 5
years
$ -
-
-
-
-
206,162
56,200
2,000
$264,362		 Contractual
cash flows
$7,911,299
600,000
345,662
411,842
463,749
270,097
8,324,740
2,000
$18,329,389		 Carrying
amount
Short-term loans
Short-term notes and
bills payable
Notes payable
Accounts payable
Other payables
Long-term loans
(including current
portion)
Long-term loans
(including current
portion)
Guarantee deposits
Received
Subtotal		 $ 7,161,299
600,000
345,662
411,842
463,749
6,407
857,070
-		 $750,00
-
-
-
-
7,928
1,133,570
-		 $ -
-
-
-
-
13,400
4,094,760
-		 $ -
-
-
-
-
36,200
2,183,140
-		 $7,911,299
599,115
345,662
411,842
463,749
209,970
8,312,799
2,000
$9,846,029 $1,891,498 $4,108,160 $2,219,340 $18,256,436

Further information on the maturity analysis of lease liabilities is as follows:

follows: follows: follows:
Less than 1year
1-5years
5-10years
10-15years
15-20
years
Over 20years
Lease liabilities
$14,335
$49,600
$42,933
$42,278
$42,278
$78,673
December 31, 2019
Non-derivative financial
Liability
Within 6
months
7-12 months
1-2 years
2-5 years
Over 5
years
Contractual
cash flows
Short-term loans
$ 7,286,122
$850,000
$ -
$ -
$ -
$ 8,136,122
Short-term notes and bills
payable
600,000
-
-
-
-
600,000
Notes payable
615,689
-
-
-
-
615,689
Accounts payable
835,934
-
-
-
-
835,934
Other payables
401,777
-
-
-
-
401,777
Long-term loans
(including current portion)
5,472
7,928
13,400
39,796
215,967
282,563
Long-term loans
(including current portion)
801,237
837,070
1,950,640
6,313,520
70,580
9,973,047
Guarantee deposits
Received
-
-
-
-
2,100
2,100
Subtotal
$10,546,231
$1,694,998
$1,964,040
$6,353,316
$288,647
$20,847,232		 Less than 1year 1-5years 5-10years 10-15years Over 20years
$78,673		 Total
undiscounted
leasepayments
$14,335 $49,600 $42,933 $42,278 $270,097
Within 6
months		 7-12 months 1-2 years 2-5 years Over 5
years
$ -
-
-
-
-
215,967
70,580
2,100
$288,647		 Contractual
cash flows
Carrying
amount
Short-term loans
Short-term notes and bills
payable
Notes payable
Accounts payable
Other payables
Long-term loans
(including current portion)
Long-term loans
(including current portion)
Guarantee deposits
Received
Subtotal		 $ 7,286,122
600,000
615,689
835,934
401,777
5,472
801,237
-		 $850,000
-
-
-
-
7,928
837,070
-		 $ -
-
-
-
-
13,400
1,950,640
-		 $ -
-
-
-
-
39,796
6,313,520
-		 $ 8,136,122
600,000
615,689
835,934
401,777
282,563
9,973,047
2,100		 $ 8,136,122
598,840
615,689
835,934
401,777
218,780
9,955,605
2,100
$10,546,231 $1,694,998 $1,964,040 $6,353,316 $20,847,232 $20,764,847

Further information on the maturity analysis of lease liabilities is as follows:

follows:
Lease liabilities Less than 1year 1-5years 5-10years 10-15years 15-20
years
$42,277		 Over 20years
$87,129		 Total
undiscounted
leasepayments
$13,400 $53,196 $44,283 $42,278 $282,563

－360－

The Company does not expect a maturity analysis of which the cash flows timing would be significantly earlier, or the actual amount would be significantly different.

  1. Types of Financial instruments
Financial assets
Financial assets measured at amortized cost
Cash and cash equivalents
Notes receivables and accounts receivables
(including related parties)
Other receivables(including related parties)
Other financial assets - current
Refundable deposits
Other financial assets - noncurrent
Financial assets at fair value through profit or loss
– current
Financial assets at fair value through profit or loss
– noncurrent
Financial assets at fair value through other
comprehensive income or loss - noncurrent
Financial liabilities
Financial liabilities measured at amortized costs
Short-term loans
Short-term notes and bills payable
Notes receivables and accounts payable
(including related parties)
Other payables (including related parties)
Long-term loans (including current portion)
Lease liabilities (including current portion)
Deposits received		 December 31 December 31
2020
$338,824
1,363,795
110,574
164,162
422,407
46,238
234,138
-
690,916
7,911,299
599,115
757,504
463,749
8,312,799
209,970
2,000		 2019
$665,530
1,354,724
162,291
55,236
1,139,390
160,138
307,571
220,577
704,405
8,136,122
598,840
1,451,623
401,777
9,955,605
218,780
2,100

(3) Fair Value Information:

  1. For information on fair value of financial assets and financial liabilities not measured at fair value, please refer to Note 12(3)3. For fair value of investment property measured at cost, please refer to Note 6.13. For fair value of investments in associates with quoted prices in an open market, please refer to Note 6.10.

  2. Definition of the three levels in fair value:

Level 1:

Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks, beneficiary certificates, on-the-run Taiwan central government bonds and derivative instruments with quoted market prices is included in Level 1.

－361－

Level 2

Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Company’s investment in off-the-run government bonds, corporate bonds, bank debentures, convertible bonds and most derivative instruments is included in Level 2.

Level 3

Unobservable inputs for the asset or liability. The fair value of the Company’s investment in certain derivative instruments, equity investment without active market and investment property is included in Level 3.

  1. Financial instruments not measured at fair value

  2. Management of the Company thinks that the carrying amount of financial instruments not measured at fair value except those listed in the table below, including cash and cash equivalents, accounts receivables, other financial assets, refundable deposits, short term loans, short-term bills payable, accounts payable, lease liabilities (including current and non-current), long-term loans (including current portion), and deposits received, is the reasonable approximation of their fair value.

  3. Fair value hierarchy:

The fair value hierarchy of financial instrument is measured at fair value on a recurring basis. Information about the Company’s fair value hierarchy is disclosed in the following table:

in the following table:
Item
Assets:
Recurringfair value
Financial assets at fair value
through profit or loss
Non-derivative financial assets
held for trading
Domestic unlisted stocks
Financial assets measured at
FVTOCI
Domestic unlisted stocks
Domestic listed stocks
Total
Item
Assets:
Recurringfairvalue
Financial assets at fair value
through profit or loss
Non-derivative financial assets
held for trading
Domestic unlisted stocks
Financial assets measured at
FVTOCI
Domestic unlisted stocks
Domestic listed stocks
Total		 December 31,2020
Level 1
$20,846
-
-
29,789
$50,635		 Level 2
Level 3
$ -
$ -
-
213,292
-
661,127
-
-
$-
$874,419
December31,2019		 Total
$20,846
213,292
661,127
29,789
$925,054
Level 1
$23,461
-
-
33,885
$57,346		 Level 2
$10,004
-
-
-
$10,004		 Level 3
$ -
494,683
670,520
-
$1,165,203		 Total
$33,465
494,683
670,520
33,885
$1,232,553

－362－

  1. Fair value valuation technique for instruments measured at fair value:

  2. (1) The fair value of financial instruments with quoted prices in active markets is the quoted market prices. Market prices published by major trading centers and exchanges for on-the-run government bonds are the basis for the fair value of listed equity instruments and debt instruments with quoted prices in active markets. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. If one of the conditions fails, the market is not deemed active. In general, indications of an inactive market include a wide bid-ask spread, a significant increase in the bid-ask spread and low level of trading volume. The fair value of financial instruments with active markets held by the Company are stated by their natures and types as follows:

  3. a. Listed stocks: closing prices b. Open-end funds: net worth

  4. (2) Except for financial assets with an active market, the fair value of other financial assets is obtained either based on the valuation technique or by reference to the quotes from counter-parties. Fair value can be obtained by using a valuation technique that refers to the fair value of financial instruments having substantially the same terms and characteristics, the discounted cash flow method, or other valuation technique e.g. the one that applies market information available on the balance sheet date to a pricing model for calculation.

  5. The fair value of the Company’s holding of unlisted stocks for which no active market exists is estimated by using the market approach, which refers to the valuation of similar entities, quoted prices from a third party, the net worth of an entity and the operating performance. In addition, the significant unobservable inputs mainly comprise liquidity discount, in which the possible changes would not result in a potentially material financial effect. Therefore, the Company does not disclose the quantitative information.

  6. (3) When evaluating financial instruments that are non-standard and with lower complexity, e.g. debt instruments with no active markets, interest rate swaps, foreign exchange swaps and options, the Company adopts valuation techniques that are commonly used by market participants. The parameters used in the valuation models for those financial instruments are normally observable data in the market.

  7. (4) Valuation of derivative financial instruments adopts valuation models that are commonly used by market participants, e.g. discounted cash flows method and option pricing model.

  8. (5) Outputs from the valuation models are estimates and valuation techniques may not be able to reflect all relevant factors of the financial and nonfinancial instruments held by the Company. Therefore, when needed, estimates from the valuation model would be adjusted based on additional parameters, e.g. model risk or liquidity risk. According to the Company's policies of fair value valuation management and relevant control procedures, the Company's management considers that valuation

－363－

adjustments as being necessary and appropriate for a fair and just presentation of financial and non-financial instruments on the standalone balance sheet. Every price data and parameters used in the valuation is reviewed thoroughly and adjusted for current market conditions.

  • (6) The Company incorporates the adjustment of credit risk assessment into the fair value measurement of financial and non-financial instruments to reflect the credit risk of counter-party and the credit quality of the Company.

  • Transfers between Level 1 and Level 2 fair value hierarchy: None

  • Statement of changes in Level 3 fair value hierarchy:

Item
Beginning balance
Addition
Disposal
Redemption of preferred stock
Proceeds from capital reduction
Recognized in profit and loss
Recognized in other comprehensive income
Ending balance		 Investment in unquoted
financial instruments		 Investment in unquoted
financial instruments
Year Ended December 31
2020
$1,165,203
15,000
(284,488)
-
(16,087)
3,097
(8,306)
$874,419		 2019
$1,642,253
15,000
-
(455,076)
(4,234)
(13,450)
(19,290)
$1,165,203

  1. Valuation process for Level 3 fair value measurement: Valuation process regarding fair value Level 3 is conducted by the Company’s finance department, by which the independence of fair value of financial instruments is verified though use of independent data source in order to make the valuation results close to market conditions. Such valuation results are regularly reviewed so as to ensure their reasonableness.

  2. (4) Transfer of financial assets: None.

  3. (5) Offsetting financial assets and financial liabilities: None.

－364－

13.SUPPLEMENTARY DISCLOSURES

  • A. Significant transactions information

  • (a) Financing provided to others (Table 1)

  • (b) Endorsements/guarantees provided (Table 2)

  • (c) Marketable securities held (excluding investments in subsidiaries and associates) (Table 3)

  • (d) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (Table 4)

  • (e) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (Table 5)

  • (f) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital (Table 6)

  • (g) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 7)

  • (h) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 8)

  • (i) Trading in derivative instruments (Note 6.2)

  • B. Information on investees (Table 9)

  • C. Information on investments in mainland China (Table 10)

  • D. Information of major shareholders: List all shareholders with a stake of 5 percent or greater in shareholding percentage and the number of shares. (Table 11)

－365－

TABLE 1

Yieh Phui Enterprise Co., Ltd. Financing provided to others For The Year Ended December 31, 2020

Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency
No. Creditor Borrower General
ledger
account		 Related
party		 Maximum
outstanding
balance for
the period		 Ending
balance		 Amount
actually
drawn		 Interest
rate		 Nature
of
loan		 Transaction
amount		 Reason
for
short-term
financing		 Allowance
for
doubtful
accounts		 Collateral Limit on loans
granted to
a single party		 Ceiling on
total loans
granted
Item Value
0 Yieh Phui
Enterprise Co.,
Ltd.		 United Brightening
Development Corp.		 Other
receivables -
relatedparty		 Y 65,000 － － 2.25% 2 － Operating
capital		 － － － 10,587,684
(Note 3)		 10,587,684
(Note 3)
1 Yieh Phui (Hong
Kong) Holdings
Limited		 Yieh Phui (China)
Technomaterial Co.,
Ltd.		 Long-term
receivable –
related party and
Other
receivables -
relatedparty
Y		 3,893,985
(RMB20,160)
(USD121,240)
(EUR 4,300)		 2,258,176
(RMB 6,930)
(USD 73,733)
(EUR 3,655)		 2,258,176
(RMB 6,930)
(USD 73,733)
(EUR 3,655)		 2.00%-
7.69%		 2 － Operating
capital		 － － － 10,587,684
(Note 3)		 10,587,684
(Note 3)
2 Yieh Phui (China)
Technomaterial
Co.,Ltd.		 Tianjin Lianfa
Precision Steel
Corporation		 Long-term
receivable –
relatedparty		 Y 109,260
(RMB 25,000)		 109,120
(RMB 25,000)		 109,120
(RMB 25,000)		 4.00% 2 － Operating
capital		 － － － 10,587,684
(Note 3)		 10,587,684
(Note 3)
3 Good Honor
Holdings Ltd.		 Yieh Phui (Hong
Kong) Holdings
Limited		 Long-term
receivable –
relatedparty		 Y 136,125
(USD 4,500)		 － － － 2 － Operating
capital		 － － － 10,587,684
(Note 3)		 10,587,684
(Note 3)
4 Shin Yang Steel
Co., Ltd.		 Yieh Phui (Hong
Kong) Holdings
Limited		 Other
receivables -
relatedparty		 Y 351,482
(USD 12,200)		 176,576
(USD 6,200)		 176,576
(USD 6,200)		 2.00%-
4.00%		 2 － Operating
capital		 － － － 333,274
(Note 2)		 333,274
(Note 1)
5 Applied Wireless
Identifications Group,
Inc.		 Yieh Phui (Hong
Kong) Holdings
Limited		 Other
receivables -
relatedparty		 Y 66,550
(USD 2,200)		 62,656
(USD 2,200)		 62,656
(USD 2,200)		 2.00%-
4.00%		 2 － Operating
capital		 － － － 92,373
(Note 2)		 92,373
(Note 1)
6 Shin Phui Steel
Corporation		 Sin Bang Investment
& Development Co.,
Ltd.		 Other
receivables -
relatedparty		 Y 11,340 － － 2.00% 2 － Operating
capital		 － － － 100,172
(Note 2)		 100,172
(Note 1)

(Note 1) The maximum amount of total loans to others shall not exceed 40% of the creditor's net worth.

(Note 2) The maximum amount of loans granted to a single entity shall not exceed 40% of the creditor's net worth.

(Note 3) Total loans between foreign entities that are 100% owned directly or indirectly by the Company shall not exceed 40% of the Company’s net worth and loans to a single entity shall not exceed 40% of the Company’s net worth.

(Note 4) Nature of loans is classified as follows: Entities having business relations with the Company is ‘1’; entities with needs for short-term financing is ‘2’.

－366－

TABLE 2

Yieh Phui Enterprise Co., Ltd. Endorsements/guarantees provided For The Year Ended December 31, 2020

Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency
No. Endorser/
guarantor		 Party being endorsed/guaranteed Limit on
endorsement/
guarantees
provided for a
singleparty		 Maximum
balance for the
period		 Ending balance Amount
actually drawn		 Amount of
endorsement/
guarantees
collateralized
by properties

Ratio of
accumulated
endorsement/
guarantee to
net equity per
latest financial
statement		 Maximum
endorsement/
guarantee
allowable		 Guarantee
provided by
parent
company to
subsidiary		 Guarantee
provided by
a subsidiary
to parent
company		 Guarantee
provided to
subsidiaries
in Mainland
China
Company
name		 Relationship with
the endorser/
guarantor
0 Yieh Phui
Enterprise Co.,
Ltd. (Note 1)		 Yieh Phui (China)
Technomaterial Co.,
Ltd.		 Investee of the
Company’s
Sub-subsidiary		 26,469,211 6,500,970
(RMB 1,487,500)		 6,492,640
(RMB 1,487,500)		 1,473,120
(RMB 337,500)		 － 24.53% 26,469,211 Y － Y
Shin Yang Steel Co.,
Ltd.		 Subsidiary of the
Company		 26,469,211 1,236,000 1,236,000 769,950 336,000 4.67% 26,469,211 Y － －
Yieh Phui (Hong
Kong) Holdings
Limited		 Subsidiary of the
Company		 26,469,211 5,687,000
(USD 188,000)		 3,446,080
(USD 121,000)		 2,101,536
(USD 68,233)
(RMB 6,930)
(EUR 3,655)		 － 13.02% 26,469,211 Y － －
1 Shin Phui Steel
Corporation
(Note 2)		 Yieh Phui Enterprise
Co., Ltd.		 Parent company of
the company		 1,252,190 942,230 942,230 942,230 942,230 376,.23% 1,252,190 － Y －
2 Kings Garden
International Co.,
Ltd. (Note 3)		 Great Emperor Hotel
Co., Ltd.		 (Note 10) 30,626,362 8,175,000 8,175,000 7,396,000 8,175,000 186.85% 30,626,362 － － －
3 Great Emperor
Hotel Co., Ltd.
(Note 4)		 Kings garden
International Co., Ltd.		 (Note 10) 31,979,764 7,583,000 7,583,000 6,821,000 7,583,0000 165.98% 31,979,764 － － －
4 Shin Yang Steel
Co., Ltd. (Note 6)		 Yieh Phui Enterprise
Co., Ltd.		 Parent company of
the company		 2,499,554 900,000 900,000 420,000 900,000 108,02% 2,499,554 － Y －
5 Yieh Phui (China)
Technomaterial
Co., Ltd.(Note 5)		 Tianjin Lianfa
Precision Steel
Corporation		 Subsidiary of the
Company		 9,555,471 43,398
(RMB 9,930)		 43,342
(RMB 9,930)		 43,342
(RMB 9,930)		 － 0.45% 9,555,471 Y － Y
6 Champion
Logistic Inc.
(Note 7)		 Yieh Phui (Hong
Kong) Holdings
Limited		 The same ultimate
parent company		 5,322
(USD 187)		 484,000
(USD 16,000)		 － － － － 5,322
(USD 187)		 － － －
7 Sin Bang
Investment &
Development Co.,
Ltd.(Note 8)		 United Brightening
Development Corp.		 The same ultimate
parent company		 465,909 200,000 200,000 200,000 200,000 85.85% 465,909 － － －

－367－

  • (Note 1): The maximum amount of endorsement/guarantee provided by the Company shall not exceed the Company’s net worth. The same limit applies to the endorsement/guarantee provided by the Company to a single subsidiary.

  • (Note 2): The maximum amount of endorsement/guarantee provided by Shin Phui Steel Corporation shall not exceed 5 times of Shin Phui’s net worth. The same limit applies to the endorsement/guarantee provided by Shin Phui Steel Corporation to a single entity.

  • (Note 3): The maximum amount of endorsement/guarantee provided by Kings Garden International Co., Ltd. shall not exceed 7 times of Kings Garden’s net worth. The same limit applies to the endorsement/guarantee provided by Kings Garden International Co., Ltd. to a single entity.

  • (Note 4): The maximum amount of endorsement/guarantee provided by Great Emperor Hotel Co., Ltd. shall not exceed 7 times of Great Emperor Hotel’s net worth. The same limit applies to endorsement/guarantee provided by Great Emperor Hotel Co., Ltd. to a single entity.

  • (Note 5): The maximum amount of endorsement/guarantee provided by Yieh Phui (China) Technomaterial Co., Ltd. shall not exceed the net worth of Yieh Phui (China) Technomaterial Co., Ltd. The same limit applies to the endorsement/guarantee provided Yieh Phui (China) Technomaterial Co., Ltd. to a single subsidiary.

  • (Note 6): The maximum amount of endorsement/guarantee provided by Shin Yang Steel Co., Ltd. shall not exceed 3 times of Shin Yang’s net worth. The same limit applies to the endorsement/guarantee provided by Shin Yang Steel Co., Ltd. to a single entity.

  • (Note 7): The maximum amount of endorsement/guarantee provided by Champion Logistic Inc. shall not exceed 100% of its net worth; the same limit applies to the endorsement/guarantee provided by Champion Logistic Inc. to a single entity.

  • (Note 8) : The maximum amount of endorsement/guarantee provided by Sin Bang Investment & Development Co., Ltd. shall not exceed 2 times of Sin Bang’s net worth. The same limit applies to the endorsement/guarantee provided by Sin Bang Investment & Development Co., Ltd. to a single entity.

(Note 9): The net worth referred to above is based on the latest financial statements audited or reviewed by independent auditors.

(Note 10): Mutually guaranteed companies based on the need of construction contract.

－368－

TABLE 3

Yieh Phui Enterprise Co., Ltd. Marketable securities held (excluding investments in subsidiaries and associates) For The Year Ended December 31, 2020

Unit: Thousand Shares；Thousands of NT Dollar/ Foreign Currency Unit: Thousand Shares；Thousands of NT Dollar/ Foreign Currency Unit: Thousand Shares；Thousands of NT Dollar/ Foreign Currency Unit: Thousand Shares；Thousands of NT Dollar/ Foreign Currency Unit: Thousand Shares；Thousands of NT Dollar/ Foreign Currency Unit: Thousand Shares；Thousands of NT Dollar/ Foreign Currency
Securities held by Marketable securities Relationship with the
securities issuer		 General ledger account As of December 31, 2020 Note
Shares (in
**thousands) **		 **Carrying value ** Ownership (%) Fair value
Yieh Phui Enterprise
Co., Ltd.		 Fund/ Fubon 3-Year Maturity Asia USD Bond Fund None Financial assets at fair value through profit or
loss - current		 500
4,552
－		 4,552
Fund/Taishin Strategy Senior Total Return High Yield Bond
Fund		 None Financial assets at fair value through profit or
loss - current		 300
3,055
－		 3,055
Fund/ United 4 to 6 Years Trigger Sovereign EMD Term
Fund		 None Financial assets at fair value through profit or
loss - current		 10
2,889
－		 2,889
Fund/ Franklin Templeton SinoAm AI Hi-Tech Fund None Financial assets at fair value through profit or
loss - current		 1,000
10,350
－		 10,350
Preferred stock/ Eliter International Corp.- Preferred stock E An investee accounted
for usingequitymethod		 Financial assets at fair value through profit or
loss - current		 19,706
213,292
－		 213,292
Total 234,138 234,138
Stock/ TaiwanVes-Power Co., Ltd. Related party in
substance		 Financial assets at fair value through other
comprehensive income or loss - noncurrent		 1,800
53,910
3.60%		 53,910
Stock/ New Spring Construction Corp. Related party in
substance		 Financial assets at fair value through other
comprehensive income or loss - noncurrent		 15,863
119,370
15.49%		 119,370
Stock/ Ascentke Venture Capital Corp. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 85
6,208
6.42%		 6,208
Stock/ Taiwan Implant Technology Company, Ltd. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 701
6,777
4.20%		 6,777

－369－

Securities held by Marketable securities Relationship with the
securities issuer		 General ledger account As of December 31, 2020 As of December 31, 2020 As of December 31, 2020 As of December 31, 2020 Note
Shares (in
**thousands) **		 **Carrying value ** Ownership (%) Fair value
Yieh Phui Enterprise
Co., Ltd.
Stock/ Sunny Bank		 None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 4,541
38,256
0.16%		 38,256
Stock/ Universal Venture Capital Investment Co., Ltd. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 1,100
6,266
0.91%		 6,266
Stock/ Yieh Corporation Limited Related party in
substance		 Financial assets at fair value through other
comprehensive income or loss - noncurrent		 200
86,559
4.35%		 86,559
Stock/ Pacific Harbor Stevedoring Corporation Director of the entity is
the Company’s director		 Financial assets at fair value through other
comprehensive income or loss - noncurrent		 150
4,494
3.00%		 4,494
Stock/ ImageDJ Software Corp. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 24
535
0.96%		 535
Stock/ Chao-Feng Venture Capital Co., Ltd. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 1,000
7,508
0.79%		 7,508
Stock/ Skylark International Hotel Co., Ltd. Related party in
substance		 Financial assets at fair value through other
comprehensive income or loss - noncurrent		 20,528
304,001
13.68%		 304,001
Stock/ Neolink Capital Corp. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 3,000
27,243
2.57%		 27,243
Stock/ Asia Pacific Telecom Co., Ltd. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 2,949
29,789
0.08%		 29,789
Total 690,916 690,916
Shin Phui Steel
Corporation		 Stock/Zhaoheng Energy Technology Co., Ltd. None Financial assets at fair value through other
comprehensive income or loss - noncurrent		 1,425
14,962
9.50%		 14,962
Worthing Honor
Holdings Ltd.		 Stock/ SEE Corporation None Financial assets at fair value
through profit		 None Financial assets at fair value through profit
or loss - current		 1 － － －
EMMT Systems
Corporation		 Fund/ KGI Emerging Asia Sustainable Selection Bond Fund None Financial assets at fair value through profit or
loss - current		 180
1,837
－		 1,837
Stock/ Rodan (Taiwan) Ltd. None Financial assets at fair value through other
comprehensive income - noncurrent		 17 － 0.73% －
Kuo Chang
Enterprise Co., Ltd.		 Preferred stock/ Eliter International Corp.- Preferred stock D An investee of the Parent
Company under equity
method.		 Financial assets at fair value through profit
or loss - current		 1,997
21,771
－		 21,771
Preferred stock/ Eliter International Corp.- Preferred stock E An investee of the Parent
Company under equity
method.		 Financial assets at fair value through profit
or loss - current		 1,498
16,209
－		 16,209
Total 37,980 37,980
Stock/Zhaoheng Energy Technology Co., Ltd. None Financial assets at fair value through other
comprehensive income - noncurrent		 1,425
14,962
9.50%		 14,962

－370－

Securities held by Marketable securities Relationship with the
securities issuer		 General ledger account As of December 31, 2020 As of December 31, 2020 As of December 31, 2020 As of December 31, 2020 Note
Shares (in
**thousands) **		 **Carrying value ** Ownership (%) Fair value
United Brightening
Development Corp.		 Preferred stock/ Eliter International Corp.- Preferred stock D An investee of the Parent
Company under equity
method.		 Financial assets at fair value through profit
or loss - current		 26,914
293,362
－		 293,362
Preferred stock/ Eliter International Corp.- Preferred stock E An investee of the Parent
Company under equity
method.		 Financial assets at fair value through profit
or loss - current		 479
5,187
－		 5,187
Total 298,549 298,549
Yieh Hsing
Enterprise Co., Ltd		 Fund/ SinoPac CSI 300 Dividend Index Fund None Financial assets at fair value through profit
or loss - current		 221
4,686
－		 4,686
Fund/ Amundi TW - Emerging Markets High Yield Bond
Fund		 None Financial assets at fair value through profit
or loss - current		 100
991
－		 991
Fund/ Franklin Templeton SinoAm AI Hi-Tech Fund None Financial assets at fair value through profit
or loss - current		 200
2,070
－		 2,070
Fund/TCB US Short Duration High Yield Bond Fund None Financial assets at fair value through profit
or loss - current		 200
1,979
－		 1,979
Fund/Emerging Asian Markets Bonds 2026 None Financial assets at fair value through profit
or loss - current		 10
2,919
－		 2,919
Preferred stock/Eliter International Corp.- Preferred stock D An investee accounted
for usingequitymethod		 Financial assets at fair value through profit
or loss - current		 5,934
64,678
－		 64,678
Preferred stock/Eliter International Corp.- Preferred stock E An investee accounted
for usingequitymethod		 Financial assets at fair value through profit
or loss - current		 4,450
48,152
－		 48,152
Total 125,475 － 125,475
Stock/ Pacific Harbor Stevedoring Corporation Director of the entity is
the Company’s chairman		 Financial assets at fair value through other
comprehensive income - noncurrent		 150
4,494
3.00%		 4,494

－371－

TABLE 4

Yieh Phui Enterprise Co., Ltd.

Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital For The Year Ended December 31, 2020

Unit: Thousand Shares；Thousands of NT Dollar

Unit: Thousand S Unit: Thousand S hares；Th ousands of NT Dollar ousands of NT Dollar
Investor Marketable
securities		 General
ledger
account		 Counterparty Relationship
with the
investor		 Beginning balance Addition Disposal Ending balance
Number
of shares		 Amount Number
of shares		 Amount Number
of shares		 Selling
price		 Book
value		 Gain
(loss) on
disposal		 Number
of shares		 Amount
Yieh Phui
Enterprise
Co., Ltd.		 Champion
Logistic Inc.		 Investments
accounted for
using equity
method		 Proceeds from
Capital reduction		 Subsidiary of
the Company		 13,000 412,991 － － 12,910 － 408,219
(Note 1)		 － 90 4,772
Great
Emperor
Hotel Co.,
Ltd.		 Investments
accounted for
using equity
method		 Capital increase
by cash		 Investee of
the
Company’s
Sub-
subsidiary		 147,000 1,453,417 105,000 1,038,513
(Note 2)		 － － － － 252,000 2,491,930

(Note 1):Including proceeds from capital reduction of ($386,342) thousand, cash dividend ($23,180) thousand, gain (loss) on investments accounted for using equity method and shares of other comprehensive income of $1,303 thousand.

(Note 2):Including capital increase by cash of $1,081,500 thousand, income and loss on investment accounted for using equity method in the amount of ($20,743) thousand and accumulated earning/loss of ($22,244) thousand recognized due to the failure to subscribe to new shares in proportion to its shareholding percentage.

－372－

TABLE 5

Yieh Phui Enterprise Co., Ltd. Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital For The Year Ended December 31, 2020

Unit: Thousands Unit: Thousands Unit: Thousands of NT Dollar
Company
name		 Real estate Transaction
date		 Transaction
amount		 Payment
terms		 Counterparty Relationship
with the seller		 Prior transaction of related counterparty Price reference Purpose of
**acquisition **		 Other
terms
Owner Relationship Transfer
Date		 Amount
Kings Garden
International
Co., Ltd.		 Construction
of commercial
building at
E-da Asia Plaza		 January 28,
2014
~
November
12, 2020		 5,749,569 5,251,984 New Spring
Construction Corp.,
Taiwan Cement
Corporation, Yieh
Hsing Enterprise Co.,
Ltd. and Yieh Phui
Enterprise Co., Ltd.
Union Engineering
Co., Ltd. Teco Electric
& Machinery Co.,
Ltd., Hsin.Kao Gas
Co,. Ltd. etc.		 Related party
in substance,
Parent
company,
ultimate
parent
company		 － － － － Determined at
prices agreed
on by both
parties upon
negotiation or
through price
comparison
with reference
to appraisal
reports issued
by professional
appraisal
institutions		 To build a
boutique
shopping
mall		 None
Great
Emperor
Hotel Co.,
Ltd.		 6,394,040 5,539,852 For
development
of an
international
hotel

－373－

TABLE 6

Yieh Phui Enterprise Co., Ltd. Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital For The Year Ended December 31, 2020

Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency
Real estate
disposed by		 Real estate Transaction
date or
date of
the event		 Acquisition
date		 Carrying
value		 Transaction
amount(Note
2)		 Status of
collection of
proceeds		 Gain (loss)
on disposal		 Counterparty Relationship
with the
seller		 Reason for
disposal		 Price
reference		 Other
terms
Yieh Phui
Enterprise
Co., Ltd.		 No.0001,-0002、No.0001-
0041、No.0001-0040, Pingbei
Section, Jiadong Township,		 May 6, 2020 June 6 ,2006 219,007 606,873 Fully
recovery		 387,866 Zhaoyuneng
Technology
Co., Ltd.		 － Enrich the
working
capital of the
company		 Euro-Asia
Asset
Evaluation
Group		 None
No.0001- 0030, Pingbei Section,
Jiadong Township		 August
21,2019		 June 6 ,2006 49,958 171,978 Fully
recovery		 122,020 Daheng
Resources
Technology
Co., Ltd.		 － Enrich the
working
capital of the
company		 Euro-Asia
Asset
Evaluation
Group		 None
No.0001- 0021, Pingbei Section,
Jiadong Township		 May 6, 2020 67,882 209,658 141,776
No.0001-0027, Pingnan Section,
Fangliao Township		 December
1,2020		 June 6 ,2006 159,832 699,634 70,000 (Note１) Shenfeng
Special
Application
Materials Co.,
Ltd.		 － Enrich the
working
capital of the
company		 Evermore
Valuation
Real Estate
Appraisal
Firm		 None

(Note 1): As of December 31, 2020, the transfer has not been completed, Please refer to Note 6.8 and Note 9.10.

(Note 2): The amount of the contract price without tax minus the necessary fee.

－374－

TABLE 7

Yieh Phui Enterprise Co., Ltd. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital For The Year Ended December 31, 2020

Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency
Purchaser/
**seller **		 Counterparty Relationship with
the counterparty		 Transaction
Differences in transaction
terms compared to third
party transactions
Notes/accounts receivable(payable)
Note
Purchases
(sales)		 Amount Percentage of
total
purchases
(sales)
Credit term		 Unit price Credit term Balance Percentage of total
notes/accounts
receivable
(payable)
Yieh Phui
Enterprise Co.,
Ltd.		 Yieh Hong Enterprise
Co., Ltd.		 Related party in
substance		 Purchases T/T or Sight L/C before
goods acceptance.		 － － － － －
3,273,609 19.52%
Yieh United Steel
Corporation		 An investee
accounted for using
equity method		 Sales Galvanized steel coils；
payment periods were
within one to two months.
carbon steel: payment term
is monthly, and closes in
15 days. Project is
contractuallyagreed
－		 － 19,261 1.44% Accounts receivable
183,665 0.88% 5,557 19.92% Note receivable
Yieh Corporation
Limited		 Related party in
substance		 Sales 1-2 months － － 988 0.07% Accounts receivable
886,253 4.23%
Asiazone Co., Limited An investee
accounted for using
equitymethod		 Sales 1-2 months － － 154,046 11.48% Accounts receivable
1,017,050 4.86%
Shin Yang Steel Co.,
Ltd.		 Subsidiary of the
Company		 Sales 731,972 3.50% 1-2 months － － 46,715 3.48% Accounts receivable
New Spring
Construction Corp.		 Related party in
substance		 Sales 471,629 2.25% Pursuant to the
agreement		 － － － － －
Shin Phui Steel
Corporation		 Subsidiary of the
Company		 Sales 224,504 1.07% 1-2 months － － 13,821 1.03% Accounts receivable

－375－

Purchaser/
**seller **		 Counterparty Relationship with
the counterparty		 Transaction Transaction Differences in transaction
terms compared to third
party transactions		 Differences in transaction
terms compared to third
party transactions		 Notes/accounts receivable(payable) Notes/accounts receivable(payable) Note
Purchases
(sales)		 Amount Percentage of
total
purchases
(sales)
Credit term		 Unit price Credit term Balance Percentage of total
notes/accounts
receivable
(payable)
Shin Yang Steel
Co., Ltd.		 Yieh Hong
Enterprise Co.,
Ltd.		 Related party in
substance		 Purchases 215,664 13.27% T/T or Sight L/C before goods
acceptance.		 － － － － －
Yieh Phui (Hong
Kong) Holdings
Limited
Yieh United Steel
Corporation		 An investee of the
Parent Company
under equity
method.		 Sales 215,565
(USD 7,292)		 100.00% The agreed period is 3 months, but
a grace period may be granted by
mutual agreement.		 － － － － －
Yieh Phui
(China)
Technomaterial
Co., Ltd.		 Tianjin Lianfa
Precision Steel
Corporation		 Subsidiaries Sales 1,390,254
(RMB 324,612)		 5.33% 1-2 months － － 143,566
(RMB 32,892)		 31.70% Accounts
receivable
Asiazone Co.,
Limited		 An investee of the
Parent Company
under equity
method.		 Sales 174,207
(USD 5,864)		 0.66% 1-2 months － － 5,026
(USD 176)		 1.11% Accounts
receivable
Yieh Hsing
Enterprise Co.,
Ltd.		 Yieh United
Steel
Corporation		 An investee
accounted for
using equity
method		 Purchases 3,506,331 75.27% T/T or Sight L/C before
goods acceptance.		 － － － － －

－376－

TABLE 8

Yieh Phui Enterprise Co., Ltd. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital For The Year Ended December 31, 2020

Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency Unit: Thousands of NT Dollars/Foreign Currency
Creditor Counterparty Relationship with the
counterparty		 Ending balance Turnover rate Overdue
receivables
Amount collected
subsequent to the end
of the reporting period
(Note 2)
Allowance for
doubtful
accounts
Amount Action
taken
Yieh Phui
Enterprise Co.,Ltd.		 Asiazone Co.,
Limited		 Affiliated enterprises 154,046
6.29		 － － 154,046
－
Yieh Phui (Hong
Kong) Holdings
Limited		 Yieh Phui (China)
Technomaterial Co., Ltd.		 Subsidiaries 2,258,176
(RMB 6,930)
(USD 73,733)
(EUR 3,655)


(Note 1)		 － － － －
Shin Yang Steel
Co., Ltd.		 Yieh Phui (Hong
Kong) Holdings
Limited		 Fellow subsidiary 176,576
(USD 6,200)

(Note 1)		 － － － －
Yieh Phui (China)
Technomaterial
Co., Ltd.		 Tianjin Lianfa Precision
Steel Corporation		 Subsidiaries 109,120
(RMB 25,000)
(Note 1)		 － － － －
143,566
(RMB 32,892)
8.29		 － － RMB 32,892
－

(Note 1): These are accounts receivable financing, on which the calculation of turnover doesn’t apply.

(Note 2): Amounts received as of March 24, 2021.

－377－

TABLE 9

Yieh Phui Enterprise Co., Ltd. Information on Investees For The Year Ended December 31, 2020

Unit: Thousands of NT Dollar/ Foreign Currency

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as the period-end held as the period-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December 31,
2020
December 31,
2019
Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
Yieh Phui
Enterprise
Co., Ltd.		 Yieh Phui (Hong Kong) Holdings
Limited		 Hong Kong Investment 7,455,887
7,455,887
233,500
100%
9,502,034
958,220
958,220
Champion Logistic Inc. Samoa Investment 118,287
504,629
90
89.66%
4,772
2,537
2,275
Eliter International Corp. Kaohsiung City Construction of
buildings		 2,833,595
2,833,595
283,584
32.84%
2,650,801
(66,028)		 (21,686)
Yieh Hsing Enterprise Co., Ltd. Kaohsiung City Wire rods trading 2,261,296
2,252,564
304,654
57.41%
971,579
(470,091)		 (258,106)
Tangeng Iron Works Co., Ltd. Kaohsiung City Steel trading 1,453,572
1,453,572
39,553
11.30%
1,154,704
(665,673)		 (75,227)
E-Da Development Corp. Kaohsiung City Leisure development 2,096,196
2,096,196
209,619
28.44%
1,116,484
(322,389)		 (91,695)
United Brightening Development
Corp.		 Kaohsiung City Technical consultation
for steel products
manufacturing		 1,815,593
1,836,383
150,893
95.56%
1,445,019
(130,697)		 (124,897)
Shin Yang Steel Co., Ltd. Kaohsiung City Steel products related
business		 870,000
870,000
87,696
100%
834,458
(84,845)		 (84,353)
Yieh Mau Corp. Kaohsiung City Trading &
manufacturing		 422,605
422,605
52,658
23%
699,843
124,369
28,599
Kuo Chang Enterprise Co., Ltd. Kaohsiung City Wholesale of hardware 1,356,261
1,287,428
107,370
99.04%
1,062,054
(87,756)		 (86,914)
Asiazone Co., Limited Hong Kong Steel trading 595,424
595,424
15,090
32.80%
637,907
66,148
21,699
Shin Phui Steel Corporation Kaohsiung City Trading of steel products 214,236
185,736
23,917
100%
252,846
5,272
6,378
Sin Bang Investment &
Development Co.,Ltd.		 Kaohsiung City Investment 284,709
265,809
21,203
100%
232,955
(13,968)		 (13,968)

－378－

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as theperiod-end Shares held as theperiod-end Shares held as theperiod-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December 31,
2020
December 31,
2019
Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
Yieh Phui
Enterprise
Co., Ltd.		 EMMT Systems Corporation Taichung City Manufacturing and
marketing of military
specification printed
circuit boards		 310,347
308,076
40,033
78.51%
529,305
131,458
102,995
Good Honor Holdings Ltd. British Virgin
Islands		 Investment 14,723
14,723
46
100%
3,901
30
30
Gen-Wan Technology Corp. Kaohsiung City Telecommunication 148,610
148,610
3,293
86.99%
44,511
9,656
8,400
Cheng Shin Security Co., Ltd. Kaohsiung City Security 14,000
14,000
1,400
35%
9,598
(8,943)		 (3,130)
E-Da Bus Transportation Co.,
Ltd.		 Kaohsiung City Bus transportation 49,755
49,755
1,845
17.09%
684
(53,017)		 (9,058)
E-DA Tour Bus Co., Ltd. Kaohsiung City Bus transportation 20,900
20,900
1,349
19%
13,108
(1,419)		 (270)
Worthing Honor Holdings Ltd. British Virgin
Islands		 Investment 6,672
6,672
100
100%
2,629
3
3
E United Japan Co., Ltd. Japan Steel trading 8,027
8,027
－		 47%
4,147
602
283
Skylark Hot Spring & Resort
Corp.		 Kaohsiung City Hotel industry 11,700
11,700
1,170
14.63%
-		 (1,714) -
E-Da Entertainment Co., Ltd. Kaohsiung City Entertainment industry 74,100
74,100
7,410
19%
57,924
(954)		 (181)
Li Hui Development Co., Ltd. Kaohsiung City Investment 321,216
321,216
64,045
44.56%
310,169
(1,935)		 (862) (Note 1)
Ji Chang Enterprise Co., Ltd. Kaohsiung City Investment 5,050
5,050
1,042
45%
4,692
(113)		 (51) (Note 1)
Yieh United Steel Corporation Kaohsiung City Steel products related
businesses		 5,023,625
4,995,078
676,661
25.82%
2,653,964
(1,877,471)		 (500,363) (Note 1)
Hong Yuh Assets Management
Co.,Ltd.		 Kaohsiung City Management service 1,167,200
1,167,200
119,920
80%
426,085
(118,128)		 (94,502)

－379－

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as theperiod-end Shares held as theperiod-end Shares held as theperiod-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December 31,
2020
December 31,
2019
Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
Yieh Phui
Enterprise
~~C~~o., Ltd.		 E-Da Visual Effects Company
Limited.		 Kaohsiung City Entertainment industry 10,393
10,393
1,470
49%
-		 (8,342) -
Lian So(H.K) Co., Limited Hong Kong Investment 507,342
507,342
16,560
80%
289,013
(51,082)		 (40,865)
E-Da Health Biotechnology Co.,
Ltd.		 Kaohsiung City Manufacturer of food
additives		 3,800
3,800
380
19%
3,691
(68)		 (13)
Yieh Phui America Inc. U.S. Trading of steel
products		 292
292
1
100%
66,156
16,125
16,125
Great Emperor Hotel Co., Ltd. Kaohsiung City Hotel industry 2,595,600
1,514,100
252,000
54.55%
2,491,930
(42,689)		 (20,743)
Prepayment for stock
subscription - Great Emperor
Hotel Co., Ltd.		 Kaohsiung City Hotel industry - 133,597
-		 - - - -
Kings Garden International Co.,
Ltd.		 Kaohsiung City Leasing, sales, and
development of
residential and
commercial buildings,
department stores		 2,193,900
2,121,800
213,000
50.12%
2,087,966
(37,389)		 (18,694)
Prepayment for stock
subscription -Great Emperor
Hotel Co., Ltd.		 Kaohsiung City Leasing, sales, and
development of
residential and
commercial buildings,
department stores		 209,066
-		 - - 209,066
-		 -
Total 34,473,979
33,496,259
-		 - 29,773,995
(2,730,291)		 (300,571)
Shin Phui
~~S~~teel
Corporation		 Groupco Technology Inc. Taichung City RADIO 37,492
37,492
3,830
42.53%
3,933
50		 21
Yieh United Steel
Corporation		 Kaohsiung City Steel products related
businesses		 24,562
24,562
3,178
0.12%
12,356
(1,877,471)		 (2,063) (Note 1)
Great Emperor Hotel Co., Ltd. Kaohsiung City Hotel industry 515
515
50
0.01%
494
(42,689)		 (5)
Kings Garden International Co.,
Ltd.		 Kaohsiung City Leasing, sales, and
development of
residential and
commercial buildings,
department stores		 515
515
50
0.01%
490
(37,389)		 (4)

－380－

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as theperiod-end held as theperiod-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December 31,
2020
December 31,
2019
Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
Gen-Wan
Technology
Corp.		 EMMT Systems
Corporation		 Taichung City Manufacturing and
marketing of
military specification printed
circuit boards		 27,630 27,630 3,814 7.48% 50,422 131,458 9,832
EMMT
~~S~~ystems
Corporation		 Groupco Technology Inc. Taichung City RADIO 45,000 45,000 4,500 49.97% 4,621 50 25
Applied Wireless
Identifications Group,Inc.		 San Francisco,
US		 RFID 242,545 242,545 40,488 91.47% 208,035 27,841 25,466
UniPattern Corporation Taipei City Manufacturing of computer
andperipherals		 54,960 54,960 5,200 43.33% 59,889 16,344 7,082
Applied
Wireless
Identifications
Group,Inc.		 AWID Asia Co., Ltd. Kaohsiung City Telecommunications
equipment
wholesale		 71,456 75,220 3,030 100.00% 19,044 1,058 1,058
Shin Yang
Steel Co., Ltd.		 Yieh United Steel
Corporation		 Kaohsiung City Steel products related
businesses		 17,385 17,385 2,195 0.08% 8,536 (1,877,471) (1,427) (Note 1)
Sin Bang
Investment &
Development
Co.,Ltd.		 Tangeng Iron Works Co., Ltd. Kaohsiung City Steel trading 265,482 265,482 7,224 2.07% 210,896 (665,673) (13,740)
Kuo Chang
Enterprise Co.,
Ltd.
Yieh United Steel
Corporation		 Kaohsiung City Steel products related
businesses		 439,197 439,197 56,817 2.17% 220,949 (1,877,471) (36,886) (Note 1)
Eliter International Corp. Kaohsiung City Construction of buildings 219,977 219,977 21,558 2.50% 201,556 (66,028) (1,649)
Tangeng Iron Works Co.,
Ltd.		 Kaohsiung City Steel trading 786,714 786,714 21,328 6.09% 921,017 (665,673) (40,564)
United
Brightening
Development
Corp.		 Chao Ying Investment
Development Co., Ltd.		 Kaohsiung City Investment 341,992 341,992 30,400 100.00% 261,132 (17,077) (17,077)
Yieh United Steel
Corporation		 Kaohsiung City Steel products related
businesses		 449,508 449,508 58,151 2.22% 226,136 (1,877,471) (37,751) (Note 1)
Champion Logistic Inc. Samoa Investment 4,798 49,376 10 10.34% 551 2,537 262

－381－

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as theperiod-end held as theperiod-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December 31,
2020
December 31,
2019
Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
United
Brightening
Development
Corp.		 Tangeng Iron Works Co., Ltd. Kaohsiung City Steel trading 1,177,838 1,177,838 32,050 9.16% 1,363,948 (665,673) (60,957)
Eliter International Corp. Kaohsiung City Construction of buildings 70,393 70,393 6,898 0.80% 64,506 (66,028) (528)
Chao Ying
Investment
Development
Co.,Ltd.		 Tangeng Iron Works Co., Ltd. Kaohsiung City Steel trading 336,957 336,957 8,898 2.54% 259,767 (665,673) (16,923)
Hong Yuh
Assets
Management
Co., Ltd.		 Lien-Hsin Steel Co., Ltd. Indonesia Metal manufacturing
industry		 514,670 514,670 1,640 47.88% 303,216 (84,766) (40,589)
Prepayment of stock
subscription- Lien-Hsin Steel
Co.,Ltd.		 Indonesia Metal manufacturing
industry		 55,440 - - - 55,440
-		 -
Lien-Sheng Steel Co., Ltd. Indonesia Metal manufacturing
industry		 1,633 1,633 0.05 10.00% 436 (1,926) (193)
Lien-Hung Mining Co., Ltd. Indonesia Nickle mining 100,303 100,303 3,787 19.00% 63,985 (42,105) (8,000)
Prepayment of stock
subscription - Lien-Hung
MiningCo.,Ltd.		 Indonesia Nickle mining 7,367 - - - 7,367
-		 -
Lien-Heng Mining Co., Ltd. Indonesia Nickle mining 9,371 9,371 381
75.00%		 (28,583) (5,371) (4,028)
Prepayment of stock
subscription - Lien Heng
MiningCo.,Ltd.		 Indonesia Nickle mining 69,365 69,365 - - 69,365
-		 -
Asiamax Mining Indonesia Indonesia Nickle mining 89,386 89,386 55 100.00% 48,337 (22,429) (22,429)
Lian So (H.K)
Co., Limited		 Lien-Sheng Steel Co., Ltd. Indonesia Metal manufacturing
industry		 12,816 13,491 0.45 90.00% 3,926 (1,926) (1,733)
Lian Yang (Hong Kong)
TradingLimited		 Hong Kong Trading business 2,848 2,998 100
100.00%		 13,263 (991) (991)
Lien-Hsin Steel Co., Ltd. Indonesia Metal manufacturing
industry		 508,368 535,143 1,785 52.12% 330,024 (84,766) (44,177)

－382－

Investor Investee Location Main business activities Initial investment amount Initial investment amount Shares held as the period-end Shares held as the period-end Shares held as the period-end Net Income
(Loss) of the
Investee		 Share of
Profit/Loss
of Investee		 Note
December 31,
2020		 December 31,
2019		 Shares (in
thousands)		 Percentage of
Ownership		 Carrying
Value
Lien-Hsin steel
Co., Ltd.
Lien-Hung Mining Co., Ltd.		 Indonesia Nickle mining 429,574
442,565
16,142
81.00%
260,827
(42,105)		 (34,105)
Prepayment of stock
subscription - Lien-Hung
Mining Co.,Ltd.		 Indonesia Nickle mining 72,393
-		 - - 72,393
-		 -
Lien-Heng Mining Co., Ltd. Indonesia Nickle mining 20,267
20,506
127
25.00%
(9,528)		 (5,371) (1,343)
Yieh Hsing
Enterprise Co.,
Ltd.		 Great Emperor Hotel Co., Ltd. Kaohsiung City Hotel industry 2,099,500
2,099,500
209,950
45.44%
2,076,113
(42,689)		 (22,079)
Kings Garden International
Co., Ltd.		 Kaohsiung City Leasing, sales, and
development of residential
and commercial buildings,
department stores		 2,119,500
2,119,500
211,950
49.87%
2,077,673
(37,389)		 (18,690)
United Winner Metals L.P Virginia, US Scrap steel recycling 107,334
107,334
-		 33.75%
91,738
13,269		 4,479
Cheng Shin Security Co., Ltd. Kaohsiung City Security 4,000
4,000
400
10.00%
2,742
(8,943)		 (895)
Eliter International Corp. Kaohsiung City Construction of buildings 639,772
639,772
64,043
7.42%
598,851
(66,028)		 (4,897)
E-Da Development Corp. Kaohsiung City Leisure development 437,915
437,915
43,791
5.94%
234,844
(322,389)		 (19,156)
Yieh United Steel
Corporation		 Kaohsiung City Steel products related
business		 20,204
20,204
2,542
0.10%
9,887
(1,877,471)		 (1,650) (Note 1)
E-Da Health Biotechnology
Co., Ltd.		 Kaohsiung City Manufacturer of food
additives		 3,800
3,800
380
19.00%
3,691
(68)		 (13)
Kings Garden
International
Co., Ltd.		 Yi Hua International Co., Ltd Kaohsiung City Leasing, selling and
development of residential
and commercial buildings		 7,000 7,000 1,169 70.00%
16,100		 5,502 3,851
Hua Li International Co., Ltd. Kaohsiung City Daily necessities, cosmetics
wholesaler		 60,000
60,000
6,000
100.00%
46,402
(12,783)		 (12,783)
E-Mau Development Co., Ltd. Kaohsiung City Department stores,
amusement parks, and hotel
industry		 27,520
-		 2,752
12.80%
27,494
(204)		 (26)
Great Emperor
Hotel Co., Ltd.
E-Mau Development Co., Ltd.		 Kaohsiung City Department stores,
amusement parks, and hotel
industry		 27,520
-		 2,752
12.80%
27,494
(204)		 (26)

(Note 1): Due to cross ownership and the adoption of equity method between the Company and Yieh United Steel Corporation, investment gain/loss is accounted for using the

treasury stock approach. Thus, the income/loss of investee for the period excludes gain/loss accounted for using equity method by Yieh United Steel Corporation in relation to the Company.

－383－

TABLE 10

Yieh Phui Enterprise Co., Ltd. Information on Investment in Mainland China For The Year Ended December 31, 2020

Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency
Ownership
held by Accumulated
the Carrying Inward
Net Income Company Amount Remittance of
(Loss) of (direct or Share of as of Earnings as of
the indirect) Profit/Loss December 31, December 31,
Investee (%) (Note 2) 2020 2020
Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency Unit: Thousands of NT Dollar/ Foreign Currency
Name of Investee in
MainlandChina		 Main business
activities		 Total Amount
of
Paid-inCapital		 Investment
method
(Note 1)		 Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2020		 Investment Flows Accumulated
Outflow of
Investment
from
Taiwan as of
December 31,
2020		 Net Income
(Loss) of
the
Investee		 Ownership
held by
the
Company
(direct or
indirect)
(%)		 Share of
Profit/Loss
(Note 2)		 Carrying
Amount
as of
December 31,
2020		 Accumulated
Inward
Remittance of
Earnings as of
December 31,
2020
Outflow Inflow
Investor
Yieh Phui
Enterprise
Co., Ltd.		 Yieh Phui (China)
Techno material Co., Ltd.		 Manufacturing and
marketing of pickled,
cold rolled,
galvanized and
pre-painted steel coils		 6,726,976
(USD 236,200)
(Note 6)		 (2) a 6,650,080
(USD 233,500)
－		 － 6,650,080
(USD 233,500
988,624		 100% 988,624
(2) 2		 9,555,471 －
Changshou ChangHuei
Trading Co.		 Trading of steel
products		 43,648
(RMB 10,000)		 (2) a
(Note 4)		 － － － － 490 100% 490
(2) 3		 46.307 －
Tianjin Lianfa Precision
Steel Corporation		 Manufacturing and
marketing of special
high grade alloy		 384,480
(USD 13,500)		 (2) a
(Note 5)		 － － － － 384 100% 384
(2) 2		 135.919 －
AWID Asia
Co., Ltd.		 AWID Sanghai Co., Ltd.
(Note 7)		 Telecommunications
equipment
wholesale		 19,936
(USD 700)		 (1) 19,936
(USD 700)
－		 19,936
(USD 700)
－		 152 100% 152
(2) 3		 － －
AWID Changshou Co., Ltd. Telecommunications
equipment
wholesale		 8,544
(USD 300)		 (1) 8,544
(USD 300)
－		 － 8,544
(USD 300)
(799)		 100% (799)
(2) 2		 2,753 －
Investee in
Mainland China		 Accumulated Investment in Mainland
China
as of December 31, 2020		 Investment Amounts Authorized by
Investment Commission, MOEA		 Upper Limit on
Investment
Investor
Yieh Phui Enterprise Co., Ltd. Yieh Phui (China) Technomaterial Co., Ltd. 6,650,080 (USD 233,500)
6,726,976 (USD 236,200)		 15,881,527
AWID Asia Co., Ltd. AWID Sanghai Co., Ltd. － － －
AWID Changshou Co., Ltd. 8,544 (USD 300)
8,544 (USD 300)		 80,000

－384－

(Note 1): Investment methods are classified into the following three categories.

  • (1) Directly invest in a company in Mainland China.

  • (2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China. a. Yieh Phui (Hong Kong) Holdings Limited

  • (3) Others

(Note 2): Investment gain or loss recognized in the current period:

  • (1) Please specify if it is in the preparation stage without any investment gains or losses generated.

  • (2) Recognition basis of investment profit or loss is categorized into three types, which shall be identified.

    1. Financial statements audited and certified by the international CPA firms that cooperates with ROC CPA firms.

    2. Financial statements reviewed, or audited and certified by the CPA firm of the parent company in Taiwan.

    3. Others

  • (Note 3): The figures in the Table shall be expressed in New Taiwan Dollars. Carrying amount at the end of the period is converted using the exchange rate on the reporting date (USD:NTD 1: 28.48; RMB: NTD 1: 4.3648). Investment gain or loss recognized in the current period is converted using the average exchange rate in from January 1 to December 31, 2020 (USD: NTD 1: 29.5604; RMB: NTD 1: 4.2840).

  • (Note 4): Yieh Phui (China) Technomaterial Co., Ltd. invests in Changshou ChangHuei Trading Co. with equity funds of RMB 10 million. As of December 31, 2020, accumulated investment amounted to RMB 10 million.

  • (Note 5): The Company originally holds 100% of Tianjin Lianfa Precision Steel Corporation Beneficiary (paid-in capital equals USD 13,500 thousand) through its holding in Hsing Jui Investments

  • Limited. It transferred its ownership to Yieh Phui (China) Technomaterial Co., Ltd. at RMB 20,000 thousand in July 2015. The said proceed, net of tax, of RMB 19,990 thousand (equivalent to USD 3,213 thousand) has been transferred back to the Company’s account in Taiwan.

(Note 6): Yieh Phui (China) Technomaterial Co., Ltd. recapitalized its retained earnings of USD 2,700 thousand in April 2016.

(Note 7): AWID Sanghai Co., Ltd. was liquidated in July 2020.

(Note 8): Investment in Changshu Chief Leading Edge Construction Materials Co., Ltd. was completely sold in February 2013. Investment amount and earnings were received. Investment in Jiangsu J

& Y Engineering Co., Ltd. was liquidated in 2012. Thus: 

  - (1) Accumulated investment of NT$ 498,539 thousand by investees in China that were disposed of.

  - (2) Investment gains received from China investees that were disposed: NT$ 69,518 thousand.

  • (2) Significant transactions between the Company and investees in Mainland China during January 1 and December 31, 2020, directly or indirectly through the third area are as follows:

  • Significant transactions between the Company and investees in China: Table 7 attached ~ Table 8 attached in Note 13.

  • Financing between the Company and investees in China: Table 1 attached in Note 13.

  • Endorsement and guarantee provided by the Company for investees in China: Table 2 attached in Note 13.

－385－

TABLE 11

Yieh Phui Enterprise Co., Ltd. Information of Major Shareholders December 31, 2020

Name of major shareholder Number of shares Percentage of ownership (%)
Yieh United Steel Corporation 302,105,336 15.97%
Weiqiao Investment Development Co., Ltd. 205,719,551 10.88%
Wei Hong Investment Development Co., Ltd. 100,188,532 5.29%

Note: The information of major shareholders is based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (included treasury shares) by the Company as of December 31, 2020. The share capital in consolidated financial report may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

14. SEGMENTINFORMATION

Information regarding business segments has been disclosed in the consolidated financial statements. Therefore, the Company does not disclose such information in the standalone financial statements.

－386－

VI. Impact on the Company's Financial Status due to Financial Difficulties Experienced by the Company and Its Related Companies: None.

－387－

Chapter 7 Review, Analysis, and Risks of Financial Status and Performance

I. Financial Status:

Comparative analysis of financial conditions

Chapter 7 Review, Analysis, and Risks of Financial Status and
Performance
I.
Financial Status:
Comparative analysis of financial conditions		 Chapter 7 Review, Analysis, and Risks of Financial Status and
Performance
I.
Financial Status:
Comparative analysis of financial conditions		 Chapter 7 Review, Analysis, and Risks of Financial Status and
Performance
I.
Financial Status:
Comparative analysis of financial conditions		 Chapter 7 Review, Analysis, and Risks of Financial Status and
Performance
I.
Financial Status:
Comparative analysis of financial conditions		 Chapter 7 Review, Analysis, and Risks of Financial Status and
Performance
I.
Financial Status:
Comparative analysis of financial conditions
Unit: NT$ thousands
Year
Item		 2020 2019 Differences
Amount %
Current assets 20,619,331 20,910,987 -291,656
-1.39%
Non-current assets 63,413,039 62,841,875 571,164
0.91%
Totalassets 84,032,370 83,752,862 279,508
0.33%
Current Liabilities 27,077,797 27,611,293 -533,496
-1.93%
Non-current liabilities 29,123,459 28,691,649 431,810
1.51%
Total liabilities 56,201,256 56,302,942 -101,686
-0.18%
Total equity of owners of
parentcompany		 26,469,211 25,850,231 618,980
2.39%
Non-controllinginterests 1,361,903 1,599,689 -237,786
-14.86%
Totalequity 27,831,114 27,449,920 381,194
1.39%
Total liabilities and equity 84,032,370 83,752,862 279,508
0.33%
Changes in percentage of the ratio are analyzed as follows (change of 20%):
1. There has been no significant change in thepast twophases.

－388－

II. Financial Performance

1. Comparative analysis of financial performance

Unit: NT$ thousands

Year
Item
2020		 2019 Increases
(decreases)		 Change
ratio%
Operatingrevenue- net 55,421,795 59,687,597 -4,265,802
-7.15%
Operating costs 51,270,778 57,138,479 -5,867,701
-10.27%
Gross operating profit(loss) 4,151,017 2,549,118 1,601,899
62.84%
Operating expenses 3,017,931 3,444,311 -426,380
-12.38%
Operating income (loss) -
net		 1,133,086 -895,193 2,028,279
226.57%
Non-operating revenues
and expenses		 -550,296 -1,090,273 539,977
49.53%
Net income (loss) before
tax		 582,790 -1,985,466 2,568,256
129.35%
Income tax expenses
(gains)		 65,202 -285,181 350,383
122.86%
Current netprofit(loss) 517,588 -1,700,285 2,217,873
130.44%
Other comprehensive
income (net)		 61,475 -329,270 390,745
118.67%
Total comprehensive
income		 579,063 -2,029,555 2,608,618
128.53%
Analysis of change in ratios:
1. Increase in gross operating profit, operating income, net income before tax and current
net profit: Since the beginning of this year, due to the severe global epidemic and the
impact of the blockade by various countries, the export orders were at the bottom.
However, with the gradual easing of the epidemic and the release of demand from the
steel market in mainland China, coupled with the active resumption of construction and
the accelerated promotion of public works by various countries, the demand for steel
increased, driving steel prices up, and the Company returned to profit-making.
2. Increase in non-operating revenues and expenses: Mainly due to the recording of
insurance claim income of $291,160 thousand, the decrease in interest rate of some
loans and the favorable exchange rate difference, resulting in the decrease in the finance
cost decreased by $169,120 thousand and increase in exchange benefit by $184,149
thousand compared with the previous period.
3. Increase in income tax expense: Mainly due to the increase in the current profits.
4. Increase in other comprehensive income: Mainly due to the increase in unrealized
valuation gains on financial assets measured at fair value through other comprehensive
income recognized under the equity method compared to the previous period.
5. Increase in total comprehensive income: See 1-4 above.

  1. Increase in gross operating profit, operating income, net income before tax and current net profit: Since the beginning of this year, due to the severe global epidemic and the impact of the blockade by various countries, the export orders were at the bottom. However, with the gradual easing of the epidemic and the release of demand from the steel market in mainland China, coupled with the active resumption of construction and the accelerated promotion of public works by various countries, the demand for steel increased, driving steel prices up, and the Company returned to profit-making.

  2. Increase in non-operating revenues and expenses: Mainly due to the recording of insurance claim income of $291,160 thousand, the decrease in interest rate of some loans and the favorable exchange rate difference, resulting in the decrease in the finance cost decreased by $169,120 thousand and increase in exchange benefit by $184,149 thousand compared with the previous period.

  3. Increase in other comprehensive income: Mainly due to the increase in unrealized valuation gains on financial assets measured at fair value through other comprehensive income recognized under the equity method compared to the previous period.

－389－

  1. Explanation of significant changes in gross margin of main products or

departments in the most recent two years

(1) The changes of gross profit in the last two years

Unit: NT$ thousands

Year 2019 2019 2019 2020 2020 2020
Product
Category		 Operating
revenue		 Gross
operating
profit		 Gross
Margin
Percentage		 Operating
revenue		 Gross
operating
profit
 Gross
Margin
Percentage		 Change
Galvanized
steelcoils
24,633,962		 942,134
3.82%		 23,892,436 1,587,022 6.64% 73.68%
Pre-painted
steelcoils
15,115,666		 1,227,606
8.12%		 14,845,649 1,758,644 11.85% 45.86%
Steel pipe 3,404,323 222,293
6.53%		 2,212,364
50,031		 2.26% -65.37%
Wire 6,461,125 -220,029
-3.41%		 5,589,791
-188,959		 -3.38% 0.73%
Others 10,072,520 377,115
3.74%		 8,881,556
944,279		 10.63% 183.97%
Total 59,687,597 2,549,118
4.27%		 55,421,795 4,151,017 7.49% 75.38%

Details of main products with 20% change in gross margin between 2019 and 2020: Unit: NT$ thousands/ton

Year 2019 2020
Item
Galvanized steel
coils		 Unit Cost 21.867 19.041
UnitPrice 22.736 20.395
Sales Volume 1,083,468 1,171,466
Pre-painted steel
coils		 Unit Cost 27.610 24.429
UnitPrice 30.051
27.712
Sales Volume 503,007 535,706
Steel pipe Unit Cost 20.782
20.267
UnitPrice 22.234
20.736
Sales Volume 153,112
106,690
Others Unit Cost 16.183 13.754
UnitPrice 16.813 15.390
Sales Volume 599,092
577,094

Unit: NT$ thousands

Main Products Analyzed Items From 2019 to 2020
Galvanized steel coils I.
Analysis ofdifferencesinoperatingrevenue
(Q'-Q)×P 2,000,740
(P'-P)×Q (2,536,274)
(P'-P)×(Q'-Q) (205,993)
P'Q'-PQ (741,527)
II.
Analysis ofdifferencesinoperating costs
(Q'-Q)×P 1,924,221
(P'-P)×Q (3,061,949)

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(P'-P)×(Q'-Q) (248,688)
P'Q'-PQ (1,386,416)
III. Gross profit change 644,889
Pre-painted steel coils I.
Analysis of differences in operating revenue
(Q'-Q)×P 982,600
(P'-P)×Q (1,176,161)
(P'-P)×(Q'-Q) (76,457)
P'Q'-PQ (270,018)
II.
Analysis ofdifferencesinoperating costs
(Q'-Q)×P 902,799
(P'-P)×Q (1,599,855)
(P'-P)×(Q'-Q) (103,999)
P'Q'-PQ (801,055)
III. Gross profit change 531,038
Steel pipe I.
Analysis ofdifferencesinoperatingrevenue
(Q'-Q)×P (1,032,156)
(P'-P)×Q (229,335)
(P'-P)×(Q'-Q) 69,532
P'Q'-PQ (1,191,959)
II.
Analysis ofdifferencesinoperating costs
(Q'-Q)×P (964,759)
(P'-P)×Q (78,842)
(P'-P)×(Q'-Q) 23,904
P'Q'-PQ (1,019,697)
III. Gross profit change (172,262)
Others I.
Analysis ofdifferencesinoperatingrevenue
(Q'-Q)×P (369,853)
(P'-P)×Q (852,411)
(P'-P)×(Q'-Q) 31,300
P'Q'-PQ (1,190,964)
II.
Analysis of differences in operating costs
(Q'-Q)×P (356,006)
(P'-P)×Q (1,455,569)
(P'-P)×(Q'-Q) 53,447
P'Q'-PQ (1,758,128)
III. Gross profit change 567,164

Note: P’Q’ ： Recent years' unit price, quantity

P Q: Previous year's unit price, quantity

Reasons for difference in price and volume:

I. Galvanized steel coil:

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The unit price of galvanized steel coil products in 2020 is lower than that in 2019, where it has a comparative price disadvantage of NT$741,527 thousand. In terms of cost, with the drop in unit cost in 2020, there is a favorable cost variance of NT$1,386,416 thousand. Because the range of unit price reduced was smaller than that of unit cost decrease, the operating gross profit of galvanized steel coil products in 2020 is increased by NT$644,889 thousand compared with that in 2019.

II. Coated steel coil:

2020 coated steel coil products' unit selling price drops, compared to 2019, generating unfavorable sales price variance of NT$270,018 thousand. In terms of cost, where it has a comparative cost advantage of NT$801,055 thousand in 2020 due to the decrease of unit cost. Because the range of unit price reduced was smaller than that of unit cost decrease, the operating gross profit of coated steel coil products in 2020 is increased by NT$531,038 thousand compared with that in 2019.

3. Steel pipe:

2020 steel pipe products' unit price decreases compared to 2019, generating unfavorable sales price variance of NT$1,191,959 thousand. In terms of cost, where it has a comparative cost advantage of NT$1,019,697 thousand in 2020 due to the decrease of unit cost. Because the range of unit price reduced was larger than that of unit cost decrease, the operating gross profit of steel tube products in 2020 is reduced by NT$172,262 thousand compared with that in 2019.

IV. Others:

2020 other products' unit selling price drops compared to 2019, generating unfavorable sales price variance of NT$1,190,964 thousand. In terms of cost, where it has a comparative cost advantage of NT$1,758,128 thousand in 2020 due to the decrease of unit cost. Because the range of unit price reduced was smaller than that of unit cost decrease, the operating gross profit of other products in 2020 is reduced by NT$567,164 thousand compared with that in 2019.

3. Expected sales volume and basis

2021 Expected Sales Volume

Main Products Quantity (tons)
Rolled steel coil 216,220
Galvanized steel coils 1,430,337
Pre-painted steel coils 691,894
Steel structure engineering
29,000
Bridge crane (number) 48
Wire 329,000
Stainless steel 74,650
Steel pipe 125,700
Others 139,702

With the 2021 production capacity planning by the sales departments of each company in assessing production capacity and sales quantity, the projected 2021 sales volume by main

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products are as follows:

Rolled steel coil: Besides estimated 216,220 tons for sales, the most of the remaining steel coils are put into production.

Galvanized steel coil: Due to the increase in international iron and steel price and increase in steel demand, the estimated sales volume is approximately 1,430,337 tons. Coated steel coil: Due to the increase in international iron and steel price and increase in steel demand, the estimated sales volume is approximately 691,894 tons.

Wire: Due to the increase in international iron and steel price and increase in steel demand, the estimated sales volume is approximately 329,000 tons. Steel Pipes: Due to the increase in international iron and steel price and increase in steel demand, the estimated sales volume is approximately 125,700 tons. Others: Mainly include steel structure, steel plate, stainless steel, scrap and by-products.

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III. Cash Flow:

Analysis of changes in cash flow for the past year, improvement plans for liquidity shortage, and cash liquidity analysis for the next year

  1. Analysis of changes in 2020 cash flow and improvement plans for liquidity shortage
Year
Item
2020		 2019 Percentage of
change
Cash flow ratio 6.82% 10.22% -33.27%
Cash flow adequacyratio 38.11% 43.90% -13.19%
Cash re-investment ratio 2.06% 2.99% -31.10%
Decrease in cash re-investment ratio:
This was mainly due to the decrease in net cash flow from operating activities compared
to the previous period.

2020

Unit: NT$ thousands

Unit: NT$ thousands Unit: NT$ thousands
Cash balance at
beginning of year		 Net operating
cash flow of the
year		 Annual cash
inflow/outflow		 Cash surplus
(inadequacy)		 Remedial measures for
cash inadequacy
Investment
plans		 Financial
plans
5,023,717 1,846,136 (3,139,071) 3,730,782 - -
1. Analysis of current year's cash flow change:
(1) Operating activities: Net cash inflow of NT$1,846,136 thousand due to profit before
tax of NT$582,790 thousand and depreciation expense of NT$1,652,369 thousand.
(2) Investment activities: Net cash outflow of NT$2,012,488 thousand, mainly due to
purchase of property, plant and equipment of NT$4,599,380 thousand, disposal of
investment property of NT$1,177,685, decrease in refundable deposits of NT$702,958
thousand, decrease in other financial assets of NT$720,184, resulting in current
investment activities generating net cash outflow.
(3) Financing activities: The net cash inflow of NT$1,018,238 is a result of the repayment
of short-term borrowings of NT$672,439 thousand and repayment of long-term
borrowings of NT$498,503 thousand.
2. Remedial measures for cash inadequacy: No cash inadequacies.
  1. Cash liquidity analysis for the upcoming year

Unit: NT$ thousands

Unit: NT$thousands Unit: NT$thousands
Cash balance at
beginning of year
(1)		 Expected net
operating cash
flow for the year
(2)		 Net investment
and financing
cash flows (3)		 Expected cash
surplus
(inadequacy)
(1)+(2)-(3)		 Remedial measures for
projected cash deficit
Investment
plans
Financing
plans
3,730,782 3,000,790 (1,176,236) 5,555,336 - -

－394－

  • (1) Analysis of next year's cash flow changes:

  • Operating activities: As global iron and steel industry continue to see a stable operating growth, current period's operating activities is expected to generate a net cash inflow.

  • Investment activities: Net cash outflows mainly due to extension and engagement in new constructions

  • Financing activities: Because of the repayment of bank loans, fund-raising activities resulted in net cash outflows.

  • (2) Remedial measures for expected cash inadequacy: None

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IV. Material Capital Expenditures in the Most Recent Fiscal Year and Their Impact on the Company's Financial Affairs: None.

V. Investment Policies for the Most Recent Fiscal Year, the Main Reasons for the Profits or Losses Generated thereby, Improvement Plans, and

Investment Plans for the Coming Year

  1. Investment policies for last year:

  2. For long-term business development considerations, besides maintaining our market advantage in our core business, carbon steel, and maintain profitability, we also branch into stainless steel domain, increasing diversified income by adopting a diversified investment strategy.

  3. Causes of business profit or loss in investments, and countermeasures: (1) Tang Eng Iron Works Co., Ltd.

    • Main reason for the loss in 2020:

The first half of 2020 was affected by COVID-19 and the decline in international nickel prices, which aggravated the situation of the stainless steel industry, which was already in a serious imbalance between supply and demand. The contraction of production and sales volume, the loss of idle capacity and the high gross loss all had an adverse impact on the Company's operations. Improvement plans:

The Company will improve the operating performance, and stopping the loss is the first priority. The Company will also actively activate idle assets and create revenue from outside the industry so as to fill the Company's accumulated losses and improve the financial structure of the Company.

  • (2) Yieh United Steel Corporation (YUSCO)

Main reason for the loss in 2020:

In recent years, the global stainless steel industry has undergone structural changes, and our major competitors have carried out cross-border resource integration to cost down, so as to improve the competitive advantages. Nickel pig iron is widely used in China, even in Indonesia, where laterite is used to extract nickel and hot steel plants are used to smelt stainless steel, bringing revolutionary development to the industry. The quantity of import stainless steel embryos and hot rolling are on the rise. Because of impacted by the low price products from China and Indonesia, Taiwan's upstream enterprises are facing great competitive pressure. Yieh United Steel Corp. is the leader of domestic stainless steel supplier, and has suffered the most from the competition. The COVID-19 epidemic in 2020 had a huge impact on the global economy. The global automotive, machinery and construction industries were forced to shut down due to the impact of the epidemic, resulting in a drastic reduction in global steel demand and a significant impact on the export of steel products. In addition to the COVID-19 outbreak, the trade dispute and protectionism between the U.S.

－396－

and China continue to dampen the demand and market for steel products, resulting in lower overall profitability for YUSCO.

Improvement plans:

YUSCO has a complete production line, a complete and flexible product portfolio, a professional technical team and the ability to develop and innovate in response to the changes in the stainless steel industry. In response to the changes in the stainless steel industry, YUSCO's future development will focus on the joint planning of nickel mining, ferronickel plant and stainless steel smelting plant in Indonesia with the group's resources, and the mined nickel will provide the raw material for the future ferronickel plant to be built there. In addition, we are actively seeking suitable land in Indonesia for the construction of a ferronickel plant and smelter, which will provide YUSCO with cost-competitive ferronickel, flat steel billets or steel coils upon completion of the construction. The availability of a stable and cost-competitive material source will help YUSCO to have a more flexible and efficient production material mix, which will greatly enhance the market competitiveness of our products.

  1. Investment plans for next year:

In line with the Company's diversification management policy, the Company will keep investing in stainless steel business and tourism, recreation, and relevant industries.

－397－

VI. Risk Analysis and Review:

  • (I) Impact on the Company's consolidated profit and loss performance due to changes in interest rate, exchange rates, and inflation, as well as the future countermeasures:

  • Impact of interest income and exchange rate changes on the company's profit and loss in 2020:

Unit: NT$ thousands

Unit: NT$thousands
Item Category 2020 Amount/
Percentage of
Impact		 Future response measures
Interest
Rate		 Interest
income
(expense)		 (1,146,553) In 2020, due to the impact of the COVID-19
epidemic, the central banks of major countries such
as the U.S. adopted an accommodative monetary
policy, and the central bank of Taiwan also reduced
the rediscount rate by 0.25% to 1.125% on March
19, 2020, in order to revitalize the domestic
economy and reduce the burden on enterprises,
resulting in lower interest expenses for the year
compared to the previous year. Although the
economic momentum recovered slightly in the
fourth quarter, the international interest rate levels
of both the U.S. dollar and the Renminbi remained
low without inflationary pressure, so interest
expense remained within 2.5% of revenue. Looking
forward to 2021, interest rates will rise in response
to the international economic recovery as the
post-epidemic period approaches in the major
domestic and international financing markets. The
Company will pay close attention to the trend of
interest rate in the capital market, and strictly
control interest expenditure.
Percentage of
Revenue (%)
2.069%
Exchange
rates		 Exchange
gain(loss)		 112,947 Besides adopting natural hedging and FX Swap
transactions, the Company also conducts foreign
exchange settlement/purchase reconciliation when
there is a need to settle or purchase foreign
exchange.
Percentage of
Revenue (%)
0.204%
Operating
revenue		 55,421,795

  1. Our products are widely used in the factory buildings, residential door panels and household appliances as intermediate materials, and the product usages will be expanded to vehicle steel plates in the future. We understood that most of our business related to boom and bust cycle, therefore, adding customer service to existing management activities is important for promoting YPS (Yieh phii production services System) business activities and to improve the quality of work, keep zero waste and reduce costs, so as to reduce the impact of inflation on the Company's revenue.

  2. (II) The policies to engage in high-risk, high-leverage investments, lending funds to others, endorsements and guarantees, and the transactions of derivative products, the main reasons for profits and losses, and the future countermeasures:

The Company does not engage in high risk and highly leveraged investments. Endorsements and guarantees shall be carried out in accordance with the Company's

－398－

Operating Procedures for Loaning of Funds and Making of Endorsements and Guarantees. Derivative product transactions shall comprise mainly of exchange rate and interest hedging products. Hence, there is no material gain or loss. In the future, the Company will continue to carry out prudent assessment, and avoid investments and transactions with excessive risks.

  • (III) Projection of research and development plans and R&D investment expenditures: With the rise in health awareness, consumers not only expect steel materials to comply with environmental protection requirements. In 2008, Yieh PhuiIn developed new products in the direction of reducing the contact between human body and bacteria, and provided antibacterial steel products that can improve the health environment to meet the market demand. At present, Yieh Phui Enterprise's anti-bacteria, healthy eco-friendly steel plate is fully used on the air-conditioning and duct system of National Cheng Kung University's Yun-Suan Sun Green Building Research Center (also known as the Magic School of Green Technologies). The university is the first in the world to have a 100% green building, and is also Taiwan's first zero-carbon emission building. This innovative building with the characteristics of green energy was awarded EEWH's highest Diamond Grade Building Label by the Ministry of the Interior in April 2011. In May 2011, it was again awarded U.S. Green Building Council LEED's highest Platinum Grade Building Label. As of March 2015 and June 2018, Yieh Phui once again developed a nano-grade environmental friendly, fingerprint resistant steel plate and high-effective-nano passivated steel plate which both passed the certification by the Industrial Development Bureau, Ministry of Economic Affairs, and was awarded Nano Label, setting a new milestone in innovative research and development. The high-effective-nano passivated steel plate is especially effective in antibacterial and anti-mildew ability regarding staphylococcus, diphtheria, legionella pneumophila and rhizopus nigricans on the long run. Since August 2018, Taiwan, Hong Kong and Singapore have accumulated orders of up to 4,000 tons in hospitals and public transportation areas such as subway systems, a manifestation of Yieh Phui's continuous efforts to work towards further milestones of excellence. Pertaining to the above, Yieh Phui has continued its current successful research and development model, and cooperates with suppliers of surface treatment and coating materials to develop new products, and integrates with the supply chain's sales system such as dealers or molding plants, to maximize the products' benefits. In 2014, the Company plans to once again cooperate with hot-rolling and cold-rolling suppliers to develop high forming and high tensile strength steel for structural building materials and steel plate for automotive molding. Also, it will develop low cost processing products that conform to Australia's G450 and Japan's STK 700 specifications, and rose metallic paint, wood grain and marble grain coated steel plate, to be used on home appliances or indoor purposes, creating greater added value for the Company. Also, in response to the concept of global village, EU has implemented directives, RoHS and WEEE, in 2006, which emphasize that electronic and electrical appliances are to comply with the requirements of product, environmentally friendly processing and recycle and reuse. It has also received response and attention from governments and industries throughout the world. At that time, as Yieh Phui has completed the

－399－

research and development of eco-friendly products and processes, it received large amount and long-term orders from home appliance brands. In June 2007, the Company obtained the IECQ QC080000 certification to ensure safer and more efficient product quality assurance and management, and to boost customers' confidence in the value of our products.

In the past two years, EU launch another two directives in 2nd phases, in which building materials such as plated and coated products are required to be surface treated without using any chromium or hexavalent chromium, while maintaining their product characteristics; the Company successfully developed its outdoor environmental friendly plated and coated products as early as May 2017, making the application of building materials use can be smoothly replaced with environmentally friendly products, and create good results in sales.

The government is still firm in the development and direction of green energy when implementing the nuclear abolition policy and plans increase the proportion of green enegy in Taiwan to account for 20% of the average annual domestic electricity consumption by 2025 (about 27GW), of which 20GW will be developed by solar systems; The medium solar photovoltaic system must use high-strength corrosion-resistant support to maintain its efficient and durable power generation, so Ye Hui has invested resources since the end of 107 to develop corrosion-resistant steel more suitable for Taiwan’s tropical monsoon and high temperature, high humidity environment. We hope to occupy the earthquake-resistant, highly corrosion-resistant galvanized aluminum-magnesium alloy coated steel products and application of solar photovoltaic system support frame products in 2021.

This year's research and development projects are expected to be completed by 2021 Q4, with an estimated investment amount of around NT$101,600 thousand. Upon successful research and development, it will provide more complete product portfolio of environmental friendly home appliances and building materials. Also, with the promotion and production of high quality and usage products, it would be able to create more profit.

  • (IV) The impact of changes of important domestic and foreign policies and laws on the Company’s finance and business, and the countermeasures: None

  • (V) The impact of changes in technologies and industries on the Company’s finance and business, and the countermeasures:

  • The Company's main products are traditional iron and steel products. With more than 50 years of technological development, our technologies are considerably stable, and we do not see major changes. Hence, technology and industry changes without significant impact on the Company's products.

  • (VI) The impacts of changes of corporate image on the company's crisis management and the countermeasures:

  • In line with the vision of "Becoming world's best iron and steel manufacturing and service enterprise by 2020", the Company set annual targets to be participated and executed by all staffs in a top-down approach. Trainings and counselling are also improved to enhance corporate image.

  • (VII) Expected benefits of mergers and possible risks: None

  • (VIII) Expected benefits and possible risks of plant expansion:

－400－

  • The Company's subsidiary in Mainland China, Yieh Phui (China) Technomaterial Co., Ltd., is expanding its plant in Changshu Economic Development Zone, to achieve an annual capacity of 620,000 tons of galvanized steel roll, and 420,000 tons of color coated steel roll. It is estimated that with the mass production in the future, besides increasing the sale of steel plate for motor cars, it can also provide more comprehensive color steel roll products, thereby increasing revenue. However, there is still a potential threat of demand reduction of iron and steel from worldwide and China due to global economic slowdown.

  • (IX) Risks due to concentrated procurement and sales, and the countermeasures: Besides choosing suppliers that we have long-term cooperation and good relationship with to be our raw materials supplier, we also maintain good relationship with potential suppliers, so as to ensure stable supply of materials, high production yield, and higher advantage over competitors in terms of long-term cost.

  • Our products are sold to countries all over the world, and we engaged the largest local dealers and customers, with the strongest sales capabilities, establishing highly fragmented market. Also, the Company carries products with all sizes, which is beneficial for the Company to cultivate good market transfer ability in the face of constantly changing market.

  • (X) The impact on the Company, and risks arising from major exchange or transfer of shares by directors, supervisors or major shareholders with over 10% of shareholdings, and the countermeasures:

  • The Company's Directors, Supervisor and major shareholders with more than 10% shareholding, pose no risk of significant equity transfer due to their high shareholding and low movement.

  • (XI) The impact to the Company, and risk due to changes in managerial authority, and the countermeasures: None

  • (XII) For any litigious or non-litigious matters, the company and company's Directors, Supervisors, Presidents, person with actual responsibility in the company, and major shareholders holding more than 10% of the company's shares, shall be disclosed. If there has been any substantial impact upon shareholders' equity or prices for the company's securities as a result of any litigation, non-litigious proceeding, or administrative dispute involving the company that was finalized or remained pending during the most recent 2 fiscal years or during the current fiscal year up to the printing date of the annual report, the report shall disclose the facts in dispute, amount in dispute, commencement date, main parties involved, and current status of the case as at the date of printing of the report: None.

  • (XIII) Other material risks and countermeasures: None

  • Risk Description: Internal risk of information security

  • Impact: Leakage of company's confidential information

  • Affected stakeholder: employees and clients Suppliers

Responding methods:

[Implementation of Information Security Policy]

To ensure smooth execution regarding the Company's information assets, information security and various corporate operations, "Information Security Policy" is established and announced by the President on November 15, 2012 for all employees to follow. In addition to

implementing various information security protection and management regulations, it is also compliant with the government's information security-related policies and regulations. The Company has been awarded the certification of "AEO Safety Certification" by the

－401－

Customs Administration, Ministry of Finance which include 14 major items and 220 related items of the universal, regulatory standard of 170 countries around the certification of "AEO Safety Certification" by the Customs Administration, Ministry of Finance in December 2012.

[Information Security Check Measures]

  • Regular information security control operations are conducted annually to audit the status of information security measures for each information safety operation.

  • In line with the internal control self-inspection conducted by the company annually, the company also receives external review and verification for the internal control and inspection of ISO 9001/QC 080000, etc.

[Information Security Management Mechanism]

To formulate various information operation management methods for the safety protection management of the Company's employees and information Department, including the following

  • Corporate Information Security Management Regulations

  • Electronic Media Management Regulations

  • Use of Personal Computer Software

  • Computer Hardware Application Regulations

  • Internet Telephone Communication Management Regulations

  • Standard Operation Standards for Abnormal Information Facilities

  • Standard Setting of Computer Server Room Settings

  • Host Backup Operation Standard

[Information Security Management Measures]

  • For important hardware, network switches, uninterruptible power supply (UPS), and air-conditioning systems, backup systems are established as well as real-time monitoring, alarming for the temperature and humidity of computer centres and fire systems. Data backup structure and initiatives are set up at separate locations.

  • For security threats from external networks, intrusion prevention system (IPS) is established along the DDos protection, as well as the filtering spam e-mails, firewall, illegal software monitoring and web filter management are also in place.

  • The use of firewalls and computer connection networks, Internet access records and e-mail activities are recorded in detail.

  • The key personnel shall be assigned One-Time Password (OTP) APP to the personal mobile phone; each login into the Company's IT system is required with a dynamic password (different every time) generated from the mobile APP.

  • EIP important documents can only be viewed online. When opening important documents, watermarks are generated (Display open date and time, user name, computer IP), keep user records in detail.

  • For restriction and the usage of USB connections to a computer, all copy operations from computer to USB are prohibited. Partial authority is accessible on computers while the process of file-copying shall be recorded in a detail manner.

[Information Security Educational Training]

To cultivate the Company employees' information security risk awareness, the Company regularly hosts digital curriculum and online testing of the Company's employees in the fourth quarter of every year. The results of the Company's employee information security training and online tests to help employees' awareness of the risks of information security and threat to the Company.

－402－

==> picture [228 x 102] intentionally omitted <==

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企業資訊安全教育訓練人數
1250
1200
1150
1100
2016 年 2017 年 2018 年 2019 年 2020 年
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  • [Risk protection of data facilities]

  • Signing of maintenance contracts: To prevent the risks of damage to the important data facilities, the system is designed to establish a maintenance contract with the system companies. The maintenance contract is signed to maintain the stability of the system and device.

  • Emergency response drills: The emergency response drills for the data centers are scheduled to be held twice every year to prepare data staff with an emergency and urgent solution to a speedy recovery of all related application and services from emergency situations.

  • Data backup and verification: The regular backup and verification of important hardware data are done to ensure that the Company's business is rapidly restored to the operations, and disruption of operations and corporate losses are minimized.

VII. Other Important Issues: None

－403－

Chapter 8 Special Items

I. Information on Affiliated Companies:

  1. Overview of affiliated companies:

  2. (I) Consolidated Operating Report of Affiliates

  3. (1) Organization chart of affiliated companies: as of December 31, 2020

==> picture [1091 x 440] intentionally omitted <==

==> picture [1091 x 147] intentionally omitted <==

－404－

2.
Basic information of various affiliated businesses
Data date: December 31,2020;Unit: NT$thousands(exchange rate for US$:28.48) (exchange rate for RMB: 4.3648) (exchange rate for IDR: 0.0020)		 2.
Basic information of various affiliated businesses
Data date: December 31,2020;Unit: NT$thousands(exchange rate for US$:28.48) (exchange rate for RMB: 4.3648) (exchange rate for IDR: 0.0020)		 2.
Basic information of various affiliated businesses
Data date: December 31,2020;Unit: NT$thousands(exchange rate for US$:28.48) (exchange rate for RMB: 4.3648) (exchange rate for IDR: 0.0020)		 2.
Basic information of various affiliated businesses
Data date: December 31,2020;Unit: NT$thousands(exchange rate for US$:28.48) (exchange rate for RMB: 4.3648) (exchange rate for IDR: 0.0020)		 2.
Basic information of various affiliated businesses
Data date: December 31,2020;Unit: NT$thousands(exchange rate for US$:28.48) (exchange rate for RMB: 4.3648) (exchange rate for IDR: 0.0020)
Company name Date of
Incorporation		 Address Paid-up capital Main businesses
activities
Yieh Phui Enterprise Co., Ltd. 1978.04.14 No. 369, Yuliao Road, Qiaotou District, Kaohsiung City NT$18,905,695 Galvanized, coated
steel coil
WORTHING HONOR HOLDINGS LTD. 1995.07.24 Tropic Isle Building P.O.BOX 438, Road Town, Tortola
B.V.I.		 US$100 Investments
GOODHONOR HOLDINGS LTD. 1995.12.04 Tropic Isle Building P.O.BOX 438, Road Town, Tortola
B.V.I.		 US$46 Investments
Shin Phui Steel Corporation 1990.06.25 2nd Floor, No.9, Section 1, Xuecheng Road, Dashu
District, Kaohsiung City		 NT$239,173 Trading of steel
products
Yieh Phui (Hong Kong) Holdings Limited 2010.06.10 20th Floor, Tesbury Centre, 28 Queen's Road, Hong
Kong		 US$233,500 Investments
Yieh Phui (China) Technomaterial Co., Ltd. 2002.01.28 No.1, Yehui Road, Riverside Industrial Park, Changshu
City, Jiangsu Province, China		 RMB$1,689,322 Galvanized, coated
steel coil
Gen-Wan Technology Corp 2000.05.01 2nd Floor, No.9, Section 1, Xuecheng Road, Dashu
District,Kaohsiung City		 NT$37,852 Telecommunication
subcontract
EMMT Systems Corporation 1988.10.04 No. 16-1, South 2nd Road, Taichung Export Processing
Zone, Tanzi District, Taichung City		 NT$509,906 Manufacture of
military standard
printed circuit
boards and module
boards
Groupco Technology Inc. 2006.09.05 1st Floor, No. 100, Shengli 3rd Street, Ganzhe Village,
Tanzi Village, Taichung City		 NT$90,050 Wholesale of
telecommunications
equipment and
electronicmaterials
APPLIED WIRELESS IDENTIFICATIONS
GROUP,INC.		 1997.07.09 Gorporation Trust Center, 1209 Orange Street,
Wilmington,Delaware, USA		 US$441 RFID technology
product
AWID Asia Co., Ltd. 2008.07.15 3rd Floor, No.9, Section 1, Xuecheng Road, Dashu
District, Kaohsiung City		 NT$30,300 Wholesale of
telecommunications
equipment and

－405－

Company name Date of
Incorporation		 Address Paid-up capital Main businesses
activities
electronic materials
Awid China Ltd. 2016.6.28 No.1, Yehui Road, Riverside Industrial Park, Changshu
City, Jiangsu Province, China		 US$300 Wholesale of
telecommunications
equipment and
electronicmaterials
Yieh Hsing Enterprise Co., Ltd. 1978.07.18 No. 369, Baomi Road, Baimi Village, Gangshan
District, Kaohsiung City		 NT$5,306,516 Production and
sales of steel pipe,
steel coil products,
wire
Great Emperor Hotel CO., LTD. 2011.11.24 No. 222, Longdexin Rd., Gushan Dist., Kaohsiung City NT$4,620,000 Hotel Industry, etc.
Kings Garden International CO., LTD. 2011.11.24 No. 115, Dashun 1st Rd., Gushan Dist., Kaohsiung City NT$4,250,000 Departmental
stores,
supermarkets, etc.
Shin Yang Steel Co., Ltd. 2011.02.15 No.297, Yuliao Road, Qiaotou District, Kaohsiung City NT$876,960 Black steel pipe,
galvanized steel
pipe, EMT steel
pipe, rectangular
tube, API casing,
pipeline, etc.
CHAMPION LOGISTIC INC. 2002.02.08 Offshore Chambers,P.O.Box 217,Apia,Samoa US$100 Investments
Tianjin Lianfa Precision Steel Corporation 2006.07.20 No.125, Zhongnan 6th Street, West Zone, Tianjin
Economic-Technological Development Area		 RMB$143,438 Steel
manufacturing,
processing, sale,
etc.
Changshu Ever Glory Trading Co.,Ltd. 2014.08.15 No.1, Yehui Road, Riverside Industrial Park, Changshu
City, Jiangsu Province, China		 RMB$10,000 Wholesale and
import and export,
etc. of various
fabricated metal
products
Sin Bang Investment & Development Co., Ltd. 2001.05.10 2nd Floor, No.9, Section 1, Xuecheng Road, Dashu
District,Kaohsiung City		 NT$212,025 Investments

－406－

Company name Date of
Incorporation		 Address Paid-up capital Main businesses
activities
Hong Yuh Assets Management Co.,Ltd. 2007.01.10 2nd Floor, No.9, Section 1, Xuecheng Road, Dashu
District, Kaohsiung City		 NT$1,499,000 Wholesale and real
estate related
management
consultancy
United Brightening Development Corp. 2002.10.01 2nd Floor, No.9, Section 1, Xuecheng Road, Dashu
District, Kaohsiung City		 NT$1,579,000 Technical
consultation for
steel products
manufacturing
Kuo Chang Enterprise Co., Ltd. 2003.07.01 2nd Floor, No.9, Section 1, Xuecheng Road, Dashu
District,Kaohsiung City		 NT$1,084,108 Wholesaling of
hardware
Chao Ying Investment Development Co.,, Ltd. 2001.05.11 2nd Floor, No.9, Section 1, Xuecheng Road, Dashu
District,Kaohsiung City		 NT$304,000 Investments
Pt. E-United Ferro Indonesia 2014.09.16 Perwata Tower,Lt.2 Suite DEF Jl.Pluit Selatan
Raya,Kav.1,Kel.Penjaringan,Kec. Penjaringan,Jakarta
Utara 14440		 US$34,250 Metal
manufacturing
industry
PT. YIEH FERRO INDONESIA 2016.3.17 Perwata Tower,Lt.2 Suite DEF Jl.Pluit Selatan
Raya,Kav.1,Kel.Penjaringan,Kec. Penjaringan,Jakarta
Utara 14440		 US$500 Metal
manufacturing
industry
LIAN SO(H.K)CO., LIMITED 2015.01.16 20th Floor, Tesbury Centre, 28 Queen's Road, Hong
Kong		 US$20,700 Investments
Yi Hua International Co., Ltd. 2015.10.05 3rd Floor, No.5, Section 1, Xuecheng Road, Dashu
District, Kaohsiung City		 NT$16,700 Residence and
Buildings Lease
Construction and
Development
YIEH PHUI AMERICA, INC. 2018.03.20 18300 Sutter Boulevard Morgan Hill,Ca 95037 US$- Steel trading
Lian Yang (Hong Kong) Trading Limited 2018.04.09 20th Floor, Tesbury Centre, 28 Queen's Road, Hong
Kong		 US$100 Trading business
PT. GENBA INDO RESOURCES 2006.03.13 Perwata Tower,Lt.2 Suite DEF Jl.Pluit Selatan
Raya,Kav.1,Kel.Penjaringan,Kec. Penjaringan,Jakarta
Utara 14440		 IDR$5,075,000 Nickle mining
Pt. Genba Multi Mineral 2006.03.13 Perwata Tower,Lt.2 Suite DEF Jl.Pluit Selatan
Raya,Kav.1,Kel.Penjaringan,Kec.Penjaringan,Jakarta		 IDR$199,289,810 Nickle mining

－407－

Company name Date of
Incorporation		 Address Paid-up capital Main businesses
activities
Utara 14440
Pt. Asiamax Mining Indonesia 2008.05.09 Jalan Trans Sulawesi, Desa Mohoni,Kecamatan Petasia
Timur,Kabupaten Morowali Utara,
ProvinsiSulawesi Tengah,94671,Indonesia		 IDR$53,243,700 Nickle mining
Wabo Global Trading Corporation 2019.10.30 3rd Floor, No.5, Section 1, Xuecheng Road, Dashu
District,KaohsiungCity		 NT$60,000 Cosmetics
wholesale

Note: 1. All affiliated companies, regardless of its scale, shall be disclosed.

Note: 2. If the affiliated company has plant, and the sales value of the plant's products exceeds 10% of the controlling company's operating revenue, the plant's name, date of incorporation, address and the main product items manufactured by the plant shall be stated.

Note: 3. If the affiliated company is a foreign company, the company name and address shall be stated in English, the date of incorporation indicated in Gregorian format, and paid-up capital indicated in foreign currency (the exchange rate on the date of report shall be stated).

  • (4) Companies presumed to have a relationship of control and subordination according to Article 369-3 of the Company Act: None.

－408－

  • (4) The industries that are covered by the affiliated companies, and their distribution of work if the businesses of affiliated companies are interconnected with others:

  • A. The main operating businesses of all affiliated companies are plated steel products manufacturing, steel products trading, steel products cutting and slitting, manufacture of black steel pipe, galvanized steel pipe, EMT steel pipe, rectangular tube, API casing and pipeline, etc., investment, hotel industry and departmental stores, supermarkets, nickel iron manufacturing, etc.

  • (Base date: December 31, 2020)

Industry Name of affiliated company Business relationship with other affiliated
companies
Investment holding
companies		 Yieh Phui(HongKong)HoldingsLimited Holdingcompanyof Yieh Phui(China)
Sin Bang Investment & Development Co.,
Ltd.		 Investment of Yieh Phui
Chao Ying Investment Development Co.,,
Ltd.		 Investment of United Brightening
Development Corp.
HongYuh AssetsManagementCo.,Ltd. Investment of Yieh Phui
UnitedBrighteningDevelopmentCorp. Holdingcompanyof Zhaoying
LIANSO(H.K)CO.,LIMITED Investment of Yieh Phui
Overseas
investment
companies		 WORTHINGHONOR HOLDINGSLTD. Investment of Yieh Phui
CHAMPION LOGISTICINC. Investment of Yieh Phui
GOODHONOR HOLDINGS LTD. Investment of Yieh Phui
Iron and steel
industry		 Yieh Phui(China)Technomaterial Co.,Ltd. Investment of Yieh Phui(HongKong)
Shin Phui Steel Corporation Sale of someproducts of Yieh Phui
Yieh HsingEnterprise Co.,Ltd. Investment of Yieh Phui
Shin YangSteel Co.,Ltd. Investment of Yieh Phui
Tianjin Lianfa Precision Steel Corporation Investment of Yieh Phui(China)
YIEH PHUI AMERICA,INC. Sale of someproducts of Yieh Phui
Electronics
industry		 Gen-Wan Technology Corp Investment of Yieh Phui
EMMTSystems Corporation InvestmentofGen-Wan Technology
GroupcoTechnologyInc. Investmentof EMMTSystems Corporation
APPLIED WIRELESS IDENTIFICATIONS
GROUP,INC.		 Investment of EMMT Systems Corporation
AWID Asia Co., Ltd. A reinvestment company of APPLIED
WIRELESS IDENTIFICATIONS
GROUP,INC.
Awid ChinaLtd. Investment of AWID
Hotel industry GreatEmperor HotelCO.,LTD. Investment of Yieh Phui
Departmental
stores,
supermarkets,etc.		 Kings Garden InternationalCO.,LTD.. Investment of Yieh Phui
Yi HuaInternationalCo.,Ltd. Investment of Kingsgarden
Wabo Global Trading Corporation Investment of Kingsgarden
Trading business Changshu Changhui TradingLimited Investment of Yieh Phui(China)
Kuo ChangEnterprise Co.,Ltd. Investment of Yieh Phui
Lian Yang (HongKong)TradingLimited Investment of Lian So(H.K.)
Metal
manufacturing
industry		 Pt. E-United Ferro Indonesia Investment of PT. E-UNITED FERRO
INDONESIA
PT. YIEH FERRO INDONESIA Investment of Lian So (H.K.)
Nickle mining PT. GENBA INDO RESOURCES Investment of PT. E-UNITED FERRO
INDONESIA
Pt. Genba Multi Mineral Invested enterprise of Lian-Shin
Pt. Asiamax Mining Indonesia Investment of PT. E-UNITED FERRO
INDONESIA

－409－

(5). The names of the directors, supervisors,and presidents of each affiliated enterprises, and the number of shares they hold or the amount of capital they contributed:

Information of affiliated company's Directors, Supervisors and presidents as of December 31, 2020


31, 2020
31, 2020
Unit: Shares;%
Company name Title Name or representative Shareholding (Note2)(Note 3)
Note (1) Number of
Shares		 Shareholdin
g Ratio
Yieh Phui Enterprise
Co., Ltd.		 Chairman Kuo Chiao Investment &
Development Co., Ltd.
Representative:I-ShouLin		 61,870,646
3.27%
Director Kuo Chiao Investment &
Development Co., Ltd.
Representative:Ping-YungLiang		 61,870,646
3.27%
Director Kuo Chiao Investment &
Development Co., Ltd.
Representative:Lin-Maw Wu		 61,870,646
3.27%
Director Kuo Chiao Investment &
Development Co., Ltd.
Representative: Ching-Tsung
Huang		 61,870,646
3.27%
Independent
Director
Chin-Shu Sun		 - -
Independent
Director
Wen-I Chang		 - -
Independent
Director
Te-Yuan Yang		 - -
Manager Lin-Maw Wu - -
GOOD HONOR
HOLDINGS LTD.		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Pi-Hsian Li		 46,400
100.00%
WORTHING
HONOR
HOLDINGSLTD.		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Pi-Hsian Li		 100,000
100.00%
Yieh Phui (Hong
Kong) Holdings
Limited		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Pi-Hsian Li		 233,500,000
100.00%
Shin Phui Steel
Corporation		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Yung-Hsien
Chen		 23,917,289
100.00%
Director Yieh Phui Enterprise Co., Ltd.
Representative: I-Shou Lin		 23,917,289
100.00%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 23,917,289
100.00%
Supervisor Yieh Phui Enterprise Co., Ltd.
Representative: He-Hsing Lai		 23,917,289
100.00%
Shin Yang Steel Co.,
Ltd.		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 87,696,000
100.00%
Director Yieh Phui Enterprise Co., Ltd.
Representative: I-Shou Lin		 87,696,000
100.00%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Yung-Hsien
Chen		 87,696,000
100.00%

－410－

Company name Title Name or representative Shareholding (Note2)(Note 3) Shareholding (Note2)(Note 3)
Note (1) Number of
Shares		 Shareholdin
gRatio
Supervisor Yieh Phui Enterprise Co., Ltd.
Representative: Ching-Tsung
Huang		 87,696,000
100.00%
Manager MingChang-Hsin - -
Hong Yuh Assets
Management Co.,Ltd.		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 119,920,000
80.00%
Director Yieh United Steel Corporation
(YUSCO)
Representative:I-ShouLin		 14,990,000
10.00%

Director		 Yieh Phui Enterprise Co., Ltd.
Representative: Yung-Hsien
Chen		 119,920,000
80.00%
Supervisor Yieh Mau Corporation
Representative: Tian-Ji Zhang		 14,990,000
10.00%
Supervisor Yieh Mau Corporation
Representative: Hung-Chih
Chang		 14,990,000
10.00%
Pt. E-United Ferro
Indonesia		 Chairman Pi-Hsien Li - -
Director Yung-Hsien Chen - -
Director Zhong-Qi Guo - -
Director Lin-Maw Wu - -
Director Cheng-TungLin - -
Director Ming-TongWu - -
Supervisor Chia-ChengLin - -
Sin Bang Investment
& Development Co.,
Ltd.		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Yung-Hsien
Chen		 21,202,500
100.00%
Director Yieh Phui Enterprise Co., Ltd.
Representative: I-Shou Lin		 21,202,500
100.00%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Ping-Yung Liang		 21,202,500
100.00%
Supervisor Yieh Phui Enterprise Co., Ltd.
Representative: Tian-Ji Zhang		 21,202,500
100.00%
Yieh Phui (China)
Technomaterial Co.,
Ltd.		 Chairman Yieh Phui (Hong Kong)
Holdings Limited
Representative:Lin-Maw Wu		 - -
Director Yieh Phui (Hong Kong)
Holdings Limited
Representative:Tian-Ji Zhang		 - -
Director Yieh Phui (Hong Kong)
Holdings Limited
Representative: Yong-Fang
Zhang		 - -
Director Yieh Phui (Hong Kong)
Holdings Limited
Representative: Sen-LongChen		 - -

－411－

Company name Title Name or representative Shareholding (Note2)(Note 3) Shareholding (Note2)(Note 3)
Note (1) Number of
Shares		 Shareholdin
gRatio
Director Yieh Phui (Hong Kong)
Holdings Limited
Representative: Yung-Hsien
Chen		 - -
Supervisor Yieh Phui (Hong Kong)
Holdings Limited
Representative: Ching-Tsung
Huang		 - -
Manager Yong-FangZhang - -
Changshu Changhui
Trading Limited		 Chairman Yieh Phui (China)
Technomaterial Co., Ltd.
Representative: Yong-Fang
Zhang		 - -
Director Yieh Phui (China)
Technomaterial Co., Ltd.
Representative:Lin-Maw Wu		 - -
Director Yieh Phui (China)
Technomaterial Co., Ltd.
Representative: Yung-Hsien
Chen		 - -
Supervisor Yieh Phui (China)
Technomaterial Co., Ltd.
Representative: Ching-Tsung
Huang		 - -
Tianjin Lianfa
Precision Steel
Corporation		 Chairman Yieh Phui (China)
Technomaterial Co., Ltd.
Representative: Yong-Fang
Zhang		 - -
Director Yieh Phui (China)
Technomaterial Co., Ltd.
Representative:Lin-Maw Wu		 - -
Director Yieh Phui (China)
Technomaterial Co., Ltd.
representative:Yung-HsienChen		 - -
Supervisor Yieh Phui (China)
Technomaterial Co., Ltd.
Representative: Ching-Tsung
Huang		 - -
Gen-Wan Technology
Corp		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Yung-Hsien
Chen		 3,292,827
86.99%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 3,292,827
86.99%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Tian-Ji Zhang		 3,292,827
86.99%
Supervisor Wei Chiao Investment &
Development Co., Ltd.
Representative:He-HsingLai		 23,261
0.61%
EMMT Systems
Corporation		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Chen-Wu Chang		 40,032,935
78.51%

－412－

Company name Title Name or representative Shareholding (Note2)(Note 3) Shareholding (Note2)(Note 3)
Note (1) Number of
Shares		 Shareholdin
gRatio
Director Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 40,032,935
78.51%
Director Yieh Phui Enterprise Co., Ltd.
Representative: I-Shou Lin		 40,032,935
78.51%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Chia-ChengLin		 40,032,935
78.51%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Yung-Hsien
Chen		 40,032,935
78.51%
Supervisor Gen-Wan Technology Corp
Representative: Tian-Ji Zhang		 3,813,554
7.48%
Groupco Technology
Inc.		 Chairman EMMT Systems Corporation
Representative: Chen-Wu Chang		 4,500,000
49.97%
Director EMMT Systems Corporation
Representative: Lin-Maw Wu		 4,500,000
49.97%
Director EMMT Systems Corporation
Representative: Yung-Hsien
Chen		 4,500,000
49.97%
Director Chen Ke-Qin 530,000
5.89%
Director EMMT Systems Corporation
Representative: Tian-Ji Zhang		 4,500,000
49.97%
Supervisor Shin Phui Steel Corporation
Representative: Ching-Tsung
Huang		 3,830,000
42.53%
Supervisor Shin Phui Steel Corporation
Representative: He-Hsing Lai		 3,830,000
42.53%
APPLIED
WIRELESS
IDENTIFICATIONS
GROUP,INC.		 Chairman EMMT Systems Corporation
Representative: Chen-Wu Chang		 40,488,461
91.47%
Director EMMT Systems Corporation
Representative: Lin-Maw Wu		 40,488,461
91.47%
Director EMMT Systems Corporation
Representative: Ching-Tsung
Huang		 40,488,461
91.47%
Director EMMT Systems Corporation
Representative: Yung-Hsien
Chen		 40,488,461
91.47%
Director EMMT Systems Corporation
Representative: Yu-Sheng Huang		 40,488,461
91.47%
AWID Asia Co., Ltd. Chairman Applied Wireless Identifications
Group, Inc.
Representative: Chen-Wu Chang		 3,030,000
100.00%
Director Applied Wireless Identifications
Group, Inc.
Representative: Lin-Maw Wu		 3,030,000
100.00%

－413－

Company name Title Name or representative Shareholding (Note2)(Note 3) Shareholding (Note2)(Note 3)
Note (1) Number of
Shares		 Shareholdin
gRatio
Director Applied Wireless Identifications
Group, Inc.
Representative: Yung-Hsien
Chen		 3,030,000
100.00%
Supervisor Applied Wireless Identifications
Group, Inc.
Representative:Tian-Ji Zhang		 3,030,000
100.00%
CHAMPION
LOGISTIC INC.		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Pi-Hsien Li		 89,656
89.66%
Director I-Shou Lin - -
Director Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 89,656
89.66%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Yung-Hsien
Chen		 89,656
89.66%
Yieh Hsing
Enterprise Co., Ltd.		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 304,654,386
57.41%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Sen-Long Chen		 304,654,386
57.41%
Director Yieh Phui Enterprise Co., Ltd.
Representative: I-Shou Lin		 304,654,386
57.41%
Director Yieh United Steel Corporation
(YUSCO)
Representative:Yu-KunSu		 85,717,552
16.15%
Independent
Director
Chin-Shu Sun		 - -
Independent
Director
Wen-I Chang		 - -
Independent
Director
Te-Yuan Yang		 - -
Manager Sen-LungChen - -
Great Emperor Hotel
CO., LTD.		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Tian-Ji Zhang		 252,000,000
54.55%
Director Yieh Phui Enterprise Co., Ltd.
Representative: I-Shou Lin		 252,000,000
54.55%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 252,000,000
54.55%
Director Yieh Hsing Enterprise Co., Ltd.
Representative: Tsang-Wai
Cheung		 209,950,000
45.44%
Director Yieh Hsing Enterprise Co., Ltd.
Representative: Yung-Hsien
Chen		 209,950,000
45.44%
Supervisor Shin Phui Steel Corporation
Representative: Hong-Chi Zhang		 50,000
0.01%
Kings Garden
International CO.,		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Tian-Ji Zhang		 213,000,000
50.12%

－414－

Company name
LTD..		 Title Name or representative Shareholding (Note2)(Note 3) Shareholding (Note2)(Note 3)
Note (1) Number of
Shares		 Shareholdin
gRatio
Director Yieh Phui Enterprise Co., Ltd.
Representative: I-Shou Lin		 213,000,000
50.12%
Director Yieh Hsing Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 211,950,000
49.87%
Supervisor Shin Phui Steel Corporation
Representative: Hong-Chi Zhang		 50,000
0.01%
Yi Hua International
Co., Ltd.		 Chairman Kings Garden International CO.,
LTD..
Representative: Chun-Sheng,Lin		 1,169,000
70.00%
Director Kings Garden International CO.,
LTD..
Representative: Yung-Hsien
Chen		 1,169,000
70.00%
Director Jinghua Commercial Asset
Management Limited
Representative: Chun-WanWang		 501,000
30.00%
Supervisor Ching-ShengYu - -
Kuo Chang
Enterprise Co., Ltd.		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Yung-Hsien
Chen		 107,370,104
99.04%
Director Yieh Phui Enterprise Co., Ltd.
Representative: I-Shou Lin		 107,370,104
99.04%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 107,370,104
99.04%
Supervisor Shin Yang Investment &
Development Co., Ltd.
Representative: Hung-Chih
Chang		 1,040,744
0.96%
United Brightening
Development Corp.		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Yung-Hsien
Chen		 150,893,035
95.56%
Director Yieh Phui Enterprise Co., Ltd.
Representative: I-Shou Lin		 150,893,035
95.56%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 150,893,035
95.56%
Supervisor Xinyang Investment
Development Co., Ltd.
Representative: Hung-Chih
Chang		 7,006,965
4.44%
Chao Ying
Investment
Development Co.,,
Ltd.		 Chairman United Brightening Development
Corp.
Representative:Lin-Maw Wu
30,400,000
100.00%
Director United Brightening Development
Corp.
Representative:I-ShouLin
30,400,000
100.00%
Director United Brightening Development
Corp.
Representative: Tian-Ji Zhang
30,400,000
100.00%

－415－

Company name Title Name or representative Shareholding (Note2)(Note 3) Shareholding (Note2)(Note 3)
Note (1) Number of
Shares		 Shareholdin
gRatio
Supervisor United Brightening Development
Corp.
Representative: Ching-Tsung
Huang
30,400,000
100.00%
LIAN SO(H.K)CO.,
LIMITED		 Chairman Pi-Hsien Li - -
Director Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 16,560,000
80.00%
Director Yieh United Steel Corporation
(YUSCO)
Representative:Yu-KunSu		 2,070,000
10.00%
Director Yieh Mau Corporation
Representative: Tian-Ji Zhang		 2,070,000
10.00%
Awid China Ltd. Chairman AWID Asia Co., Ltd.
Representative: Lin-Maw Wu		 - -
Director AWID Asia Co., Ltd.
Representative: Ching-Tsung
Huang		 - -
Director AWID Asia Co., Ltd.
Representative: Yung-Hsien
Chen		 - -
Supervisor AWID Asia Co., Ltd.
Representative: Tian-Ji Zhang		 - -
PT. YIEH FERRO
INDONESIA		 Chairman Pi-Hsien Li - -
Director Lin-Maw Wu - -
Director Zhong-Qi Guo - -
Director Cheng-TungLin - -
Director Ming-TongWu - -
Director Yung-Hsien Chen - -
Supervisor Chia-ChengLin - -
PT. GENBA INDO
RESOURCES		 Chairman Lin-Maw Wu - -
Director Chia-ChengLin - -
Director Achmad Kurniadi - -
Director Cheng-TungLin - -
Supervisor Yung-Hsien Chen - -
Pt. Genba Multi
Mineral		 Chairman Lin-Maw Wu - -
Director Chia-ChengLin - -
Director Achmad Kurniadi - -
Director Cheng-TungLin - -
Supervisor Yung-Hsien Chen - -
YIEH PHUI
AMERICA, INC.		 Chairman Yieh Phui Enterprise Co., Ltd.
Representative: Lin-Maw Wu		 1,000
100.00%
Director Yieh Phui Enterprise Co., Ltd.
Representative: Pi-Hsian Li		 1,000
100.00%

－416－

Company name Title Name or representative Shareholding (Note2)(Note 3) Shareholding (Note2)(Note 3)
Note (1) Number of
Shares		 Shareholdin
gRatio
Manager Yieh Phui Enterprise Co., Ltd.
Representative: Yung-Hsien
Chen		 1,000
100.00%
Lian Yang (Hong
Kong) Trading
Limited		 Chairman LIAN SO(H.K)CO., LIMITED
Representative: Pi-Hsian Li		 100,000
100.00%
Pt. Asiamax Mining
Indonesia		 Chairman Yung-Hsien Chen - -
Director Wei-Min Chen - -
Director Cheng-TungLin - -
Supervisor Chia-ChengLin - -
Wabo Global Trading
Corporation		 Chairman Kings Garden International CO.,
LTD..
Representative: Chun-Sheng,Lin		 6,000,000
100.00%

Director		 Kings Garden International CO.,
LTD..
Representative:I-ShouLin		 6,000,000
100.00%

Director		 Kings Garden International CO.,
LTD..
Representative: Yung-Hsien
Chen		 6,000,000
100.00%
Supervisor Kings Garden International CO.,
LTD..
Representative: Tian-Ji Zhang		 6,000,000
100.00%

Note 1: If the affiliated company is a foreign company, list the personnel holding equivalent positions.

Note 2: If the invested company is a company limited by shares, fill in the number of shares and proportion of shareholding. For others, fill in the investment amount and indicate the proportion of contribution.

  • Note 3: If the director or supervisor is a legal person, the related information of the representatives shall be disclosed.

－417－

6. Operational overview of related companies:

Data date: December 31, 2020
Unit: NT$thousands		 Data date: December 31, 2020
Unit: NT$thousands		 Data date: December 31, 2020
Unit: NT$thousands		 Data date: December 31, 2020
Unit: NT$thousands		 Data date: December 31, 2020
Unit: NT$thousands		 Data date: December 31, 2020
Unit: NT$thousands		 Data date: December 31, 2020
Unit: NT$thousands		 Data date: December 31, 2020
Unit: NT$thousands
Company name Capital Total assets Total
liabilities		 Net value Operating
revenue		 Operating
income		 Current profit
and loss (after
tax)

Earnings per
share (NT$)
(after tax)
Yieh Phui Enterprise Co.,Ltd. 18,905,695
45,765,476
19,296,264
26,469,212
20,936,209
368,368
735,238
0.39
WORTHINGHONOR HOLDINGSLTD. 2,848
2,629
-		 2,629
-		 - 3
-
GOODHONOR HOLDINGSLTD. 1,321
3,901
-		 3,901
-		 (1) 30
-
Shin PhuiSteelCorporation 239,173
345,270
94,832
250,438
237,105
6,594
5,272
0.21
Gen-Wan Technology Corp 37,852
51,261
93
51,168
-		 (161) 9,656
2.55
Yieh Phui (China) Technomaterial Co.,
Ltd.		 7,373,554
24,029,110
14,473,678
9,555,432
26,087,128
1,249,836
988,899
-
Changshu Changhui TradingLimited 43,648
46,337
29
46,307
-		 (129) 490
-
EMMTSystems Corporation 509,906
769,841
95,656
674,185
439,017
91,053
131,458
2.58
GroupcoTechnologyInc. 90,050
10,378
1,130
9,248
5,068
(2)		 50
0.01
APPLIED WIRELESS
IDENTIFICATIONS GROUP,INC.		 12,570
277,353
46,419
230,933
211,330
24,882
27,841
-
AWID AsiaCo.,Ltd. 30,300
22,646
3,602
19,044
22,912
1,782
1,058
0.35
Awid ChinaLtd. 8,707
2,819
66
2,753
2,323
(752)		 (800) -

－418－

Company name Capital Total assets Total
liabilities		 Net value Operating
revenue		 Operating
income		 Current profit
and loss (after
tax)

Earnings per
share (NT$)
(after tax)
Yieh HsingEnterprise Co.,Ltd. 5,306,516
12,939,217
5,514,657
7,424,560
5,589,791
(321,837)		 (470,091) (0.89)
Great Emperor HotelCO.,LTD. 4,620,000
12,292,537
7,724,000
4,568,538
5,602
(42,894)		 (42,689) (0.11)
Kings Garden InternationalCO.,LTD.. 4,250,000
11,316,264
6,941,069
4,375,195
-		 (39,728) (37,389) (0.09)
Yi Hua InternationalCo.,Ltd. 16,700
29,779
6,779
23,000
16,006
6,877
5,502
3.29
Wabo Global Trading Corporation 60,000
60,242
3,607
56,634
-		 (2,571) (2,551) (0.43)
Shin Yang SteelCo.,Ltd. 876,960
2,138,892
1,305,707
833,185
2,212,364
(78,437)		 (84,845) (0.97)
HongYuh AssetsManagementCo.,Ltd. 1,499,000
564,897
32,291
532,606
-		 (34,266) (118,128) (1.03)
Sin Bang Investment & Development Co.,
Ltd.		 212,025
233,029
74
232,955
-		 (234) (13,968) (0.68)
Tianjin Lianfa PrecisionSteelCorporation
626,081
443,778
579,696
(135,918)		 1,427,444
(12,335)		 384
-
Yieh Phui(HongKong)HoldingsLimited 6,650,080
11,847,618
2,345,584
9,502,034
215,565
(8,653)		 958,220
-
CHAMPIONLOGISTICINC. 2,848
5,382
60
5,322
-		 (161) 2,537
-
UnitedBrighteningDevelopmentCorp. 1,579,000
1,791,150
719,965
1,071,185
-		 (273) (130,697) (0.83)
Chao Ying Investment Development Co.,,
Ltd.		 304,000
261,198
66
261,132
-		 (164) (17,077) (0.56)
Kuo ChangEnterprise Co.,Ltd. 1,084,108
1,104,220
317,591
786,629
-		 (460) (87,756) (0.83)

－419－

Company name Capital Total assets Total
liabilities		 Net value Operating
revenue		 Operating
income		 Current profit
and loss (after
tax)

Earnings per
share (NT$)
(after tax)
LIAN SO(H.K)CO.,LIMITED 589,536
362,009
742
361,267
-		 (4,202) (51,082) -
YIEH PHUI AMERICA,INC. - 485,312
419,157
66,156
24,972
22,570
16,125
-
Lian Yang (HongKong)TradingLimited 2,848
13,293
30
13,263
-		 (1,008) (991) -
Pt.E-UnitedFerroIndonesia 781,174
696,301
10,260
686,040
-		 (22,226) (84,766) -
PT.YIEH FERROINDONESIA 13,169
4,521
160
4,362
-		 (1,933) (1,926) -
PT. GENBA INDORESOURCES 10,150
28,794
2,901
25,893
-		 (5,766) (5,371) -
Pt. Genba Multi Mineral 398,580
114,926
8,650
106,276
-		 (45,498) (42,105) -
Pt.Asiamax MiningIndonesia 106,487
49,658
1,321
48,337
9,493
(24,357)		 (22,429) -

(II) Consolidated financial statements of affiliated companies: refer to page 151 for details. (III) Affiliation report: none.

－420－

II. Private Placement of Marketable Securities: None

III. Holding or Disposal of the Company's Shares by Subsidiaries: None

IV. Supplementary Agenda: None.

－421－

Chapter 9 Events Which Have Material Impact on Shareholders' Equity or the Company’s Securities as Prescribed in Article 36, Paragraph 3, Subparagraph 2 of the Securities and Exchange Act, Have Occurred from the Most Recent Year to the Printing Date of This Report: None

－422－

Company seal: Yieh Phui Enterprise Co., Ltd.

Company representative: I-Shou Lin

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