TSE Code: 1605
Walsin Lihwa Corporation
2020 Annual Report
Printed on March 30, 2021
For related information, please visit:
http://www.walsin.com
http://mops.twse.com.tw
1. Spokesperson
Name: David Wen
Title:
Special Assistant to Chairman
Tel:
+886-2-8726-2211
Email: walsinspk@walsin.com
2. Deputy Spokesperson
Name: Sophi Pan
Title:
Chief of Staff
Tel:
+886-2-8726-2211
Email: walsinspk@walsin.com
3. Address and Phone Number of Head Office, Branches and Plants
Taipei Head Office 25F, No.1, Songzhi Rd., Taipei
Taichung Plant
No.57, Jing 3rd Rd., Wuqi Dist., Taichung City
Tel: +886-2-8726-2211
Tel: +886-4-2659-5552
Hsinchuang Plant No.397, Hsinshu Rd., Hsin Chuang Dist., New Taipei City
Tel: +886-2-2202-9121
Yangmei Plant
No. 566, Gaoshi Rd., Yangmei Dist., Taoyuan City
Tel: +886-3-478-6171
Yenshui Plant
No. 3-10, Shi Jou Liau, Chin Shuei Li, Yenshui Dist., Tainan City Tel: +886-6-652-0911
4. Stock Transfer Agent
Name: Walsin Lihwa Joint Shareholders Service Office
Add:
Tel:
8F., No.398, Xingshan Rd., Neihu Dist., Taipei City
+886-2-2790-5885
Website: http://stock.walsin.com/
5. Independent Auditors
Company: Deloitte Touche Tohmatsu Limited
Auditors: Wen-Yea, Shyu and Kwan-Chung, Lai
Add:
Tel:
20F, No. 100, Songren Rd., Xinyi Dist., Taipei
+886-2-2725-9988
Website:
http://www.deloitte.com.tw
6. Overseas Securities Exchange
Issued globally and traded on the Luxembourg Stock Exchange, Portal and London Stock Exchange
The information is available at http://mops.twse.com.tw
7. Email Address of Investor Relations Contact: walsinspk@walsin.com
8. Corporate Website: http://www.walsin.com/
Contents
I Letter to Shareholders ......................................................................................................... 1
II Company Profile
1. Date of establishment ..................................................................................................................... 5
2. Company History & Evolution ......................................................................................................... 5
III Corporate Governance Report
1. Organizational Chart ....................................................................................................................... 8
2. Profiles of Board Directors, President, Vice Presidents and Department Heads ......................... 10
3. Remunerations to Directors, President and Vice Presidents in the Most Recent Year ................ 24
4. Corporate Governance Status ...................................................................................................... 31
5. Information on CPAs' fees .......................................................................................................... 101
6. Information on the replacement of CPAs: .................................................................................. 102
7. Chairman, President, or managers responsible for financial or accounting affairs who worked for
the firm to which the certifying CPA belongs or its affiliate in the most recent year ................ 102
8. Transfer and pledge of shares of the directors, managers and shareholders holding more than
10% of the company's shares ..................................................................................................... 103
9. Information on relationships amongst the top ten shareholders and their relationships with
spouses or relatives within the second degree of kinship .......................................................... 105
10. The number of shares of the same investee held by the Company, its directors, managers and
which the Company controls directly or indirectly, with the aggregate shareholding percentages
.................................................................................................................................................. 109
IV Fundraising Overview
1. The Company’s Capital and Shares ............................................................................................. 110
2. Issuance of Corporate Bonds: None. .......................................................................................... 116
3. Issuance of Preferred Shares: None. .......................................................................................... 116
4. Issuance of Global Depositary Receipts (GDRs) .......................................................................... 116
5. Exercise of Employee Stock Option Plan (ESOP): None. ............................................................. 116
6. Mergers, acquisitions or issuance of new shares for acquisition of shares of other companies: ....
................................................................................................................................................ 116
7. Implementation of capital allocation plan: None. ...................................................................... 119
V
Business Overview
1. Business activities ....................................................................................................................... 120
2. Market Analysis and Sales Overview .......................................................................................... 129
3. Employee Data ............................................................................................................................ 137
Contents
4. Environmental Protection Expenditure Information .................................................................. 138
5. Employees-employer relations ................................................................................................... 145
6. Material Contracts ...................................................................................................................... 152
VI Financial Information
1. Brief Balance Sheets and Comprehensive Income Statements of Recent Five Years ................ 153
2. Financial Analysis of Recent Five Years ....................................................................................... 157
3. Audit Committee’s Review Report for the Recent Year ............................................................. 160
4. Financial report of the most recent year .................................................................................... 161
5. Financial report of the parent company of the most recent year audited and certified by
Supervisors .................................................................................................................................. 294
6. Any financial crunch confronted by the Company or its subsidiaries and related impacts in the
most recent year and up to the date of annual report publication ........................................... 382
VII
Review of Financial Conditions, Financial Performance, and Risk Management
1. Financial Status - Consolidated (Based on IFRSs) ....................................................................... 383
2. Financial Performance - Consolidated (Based on IFRSs) ............................................................ 384
3. Cash Flow - Consolidated (Based on IFRSs) ................................................................................ 385
4. Effect of Major Capital Expenditure on Financial Business Operations ..................................... 386
5. Investment Policy of the Past Year, Profit/Loss Analysis, Improvement Plan and Investment Plan
for the Coming Year .................................................................................................................... 386
6. Risk Management and Assessment of the Following Items for the Past Year and the Year to Date
................................................................................................................................................ 387
7. Other Major Issues: None ........................................................................................................... 389
VIII
Special Disclosures .................................................................................................... 390
1. Summary of Affiliates Companies ............................................................................................... 390
2. Progress of private placement of securities during the latest year and up to the date of annual
report publication ....................................................................................................................... 397
3. The subsidiaries’ shareholding or disposal of the company’s shares during the latest year and up
to the date of annual report publication .................................................................................... 397
4. Other supplemental information ................................................................................................ 397
5. Corporate events with material impact on shareholders' equity or stock prices set forth in
Subparagraph 2, Paragraph 2, Article 36 of the Securities and Exchange Act during the most
recent year and up to the annual report publication date. ........................................................ 397
I Letter to Shareholders
Dear Shareholders,
The Company's overall profitability in 2020 performed better than that of the previous year, especially in the
residential product "Jingyaun" in Nanjing, which has been sold and whose revenue has been recognized in
March as scheduled; the Wire and Cable and Stainless Steel Businesses showed steady growth in profitability;
our re-invested electronics businesses maintained their past operating performance despite the risk of supply
chain disruptions. Looking ahead to 2021, in addition to continuing to develop a vertically integrated business
strategy to control the supply of raw materials and enhance productivity, the Company will also spare no effort
to promote process transformation and automation. While expanding its business footprint, the Company is
also actively implementing its plan to transform into a manufacturing service industry.
Accomplishments in 2020
Due to the sale of Nanjing copper bar business and the impact of the pandemic of COVID-19, the Company's
revenue was relatively lower; however, with improved operations in the Stainless Steel Business, diversified
product offerings in the Wire and Cable Business, and profits from the sale of buildings and reinvestments in
the Real Estate Business, the Company reported a consolidated revenue of NT$112.5 billion, a consolidated
gross profit of NT$12.5 billion, an after-tax net income of NT$6.69 billion, and earnings per share of NT$2.04
for the year 2020.
Wire and Cable Business:
The Cable and Wire Business showed steady profitability. With stable demand for its main products, power and
telecommunication cables, the Company still maintains its leading position in terms of market share. The
market demand for cables for the renewable energy industry, which cables have been actively used in recent
years, has also increased gradually with the government's policy of actively promoting solar energy and wind
power generation, but this proportion of revenue relative to the overall revenue has not yet increased
significantly.
1
Letter to Shareholders
Stainless Steel Business:
The Stainless Steel Business reported an increase in profit for 2020 compared to previous years. Although the
expansion of production capacity in Mainland China and Indonesia resulted in oversupply, the Company
reduced the impact of excessive competition on profitability by developing new steel grades and expanding
product specifications, while effectively improving production processes and controlling raw material costs to
enhance the operating profitability of the Stainless Steel Business. In response to changes in the industry value
chain, the Company has invested in the construction of a nickel pig iron plant and its supporting power plant in
Indonesia to take advantage of raw material supply and costs.
Real Estate Business:
Phase III of the residential product "Jingyuan" in built in Lot D of Nanjing Walsin Centro was approved by the
Nanjing Municipal Government in March 2021 and has been sold out, and the sales revenue will be recognized
one after another according to the progress of housing delivery, which will significantly contribute to the profit
of the Real Estate Business. The operation of the shopping mall "ONE Mall" was not affected by the pandemic
of COVID-19, with steady growth in customer traffic and sales; the rental income flow of Xinyi Building of the
Company's Taipei headquarters was stable.
Summary of 2021 Business Plan
Wire and Cable Business:
It is committed to developing innovative business models and providing customers with precise distribution
and shortened delivery periods. The Copper Wire BU will continue to expand its market presence with the cost
advantage of economy of scale; the Insulated Wire & Cable BU, in keeping with the trend of Taiwan's factory
construction and renewable energy policy, will use brand management to increase sales of existing cable
products, and continue to develop new products and markets for renewable energy products such as solar and
wind power generation.
2
Stainless Steel Business:
In the face of environmental issues and changes in the value chain of the stainless steel industry, effective cost
control and revenue enhancement are challenges facing the Stainless Steel BU. In addition to continuously
optimizing the production process and reducing costs by controlling and sorting raw materials, it will also
actively develop new steel grades and adjust the proportion of high-value products to increase revenue growth.
Commodity Business:
The Company has integrated the procurement of raw materials and risk management of each production BU to
stabilize the source of raw materials and avoid the impact of price fluctuations. It also invested in the
construction of a nickel pig iron plant and a supporting power plant in Indonesia in early 2020, and expects to
start the mass production in the second half of 2021. It further followed the trend of changing industrial
structure by helping the manufacturing BUs reduce production costs, in order to enhance its industrial
competitiveness.
Real Estate Business:
In response to the relocation of new residents and the arrival of enterprises in Walsin Centro, and with a view
to the creation of a leisure mall space in the new retail era, the floors, brands and traffic flows of ONE Mall
were adjusted to create better purchase rates and clustering effects; at the same time, it continues to
construct Office Building No. 1, which is connected to ONE Mall, and actively launched the leasing and sales
program.
Future corporate development strategy under the influence of external competition,
regulations and overall business operation
Looking ahead to this year, with the global pandemic not yet under effective control, the recovery of the
economy is still uncertain, and the volatility of the financial and raw material markets is likely to increase. The
short-term operating challenges in meeting customer demand in a timely manner are testing the Company's
ability to maintain stable growth and profitability. On the premise of continuous focus on environmental
protection, renewable energy issues and corporate sustainable development, the Company's long-term
operation strategy is based on Industry 4.0, insisting on energy saving and environmental protection, research
3
Letter to Shareholders
and development innovation, and creating customer value through manufacturing services to enhance its core
competence. In the difficult environment caused by the pandemic last year, the Company still managed to
produce good operating results, and we are confident that we will have a successful year in terms of
operational performance.
Chairman Yu-Lon Chiao
4
II Company Profile
1. Date of establishment December 2, 1966
2. Company History & Evolution
1966 Walsin Wire & Cable Co., Ltd. established.
1969 Walsin and Lihwa merged and renamed as Walsin Lihwa Wire & Cable Co., Ltd.
1970
Formed technological partnerships with Western Electric in the U.S. and Fujikura in Japan and began
production of plastic insulation telephone cable.
1972
Began production of EP rubber high-voltage cables.
The Company's shares were listed on the Taiwan Stock Exchange.
1977
Completed the Hsinchuang plant for SCR copper rod production, with annual manufacturing capacity
of 50,000 metric tons of low-oxygen copper rods.
1982
Expanded SCR production facilities to increase annual manufacturing capacity to 100,000 metric tons
of low-oxygen copper rods.
1987
Construction of the Yangmei plant completed.
Entered the semiconductor IC industry by investing in Winbond Electronics Corp. and Sumi-Pac Corp.
In the following decade, the Company expanded into passive component, LCD panel, PCB thin board
and other industries.
1991
Invested in PT. Walsin Lippo Industries in Indonesia to expand aluminum wire business into the
Southeast Asian market.
1992
Company renamed Walsin Lihwa Corporation.
Electronics division merged with the acquired Wanbang Electronics to form the new Walsin
Technology Corp.
Established plants in Shanghai and Jiangyin to produce power cables and steel cables, thus beginning a
new chapter in China investment.
1993
Expanded into the stainless steel industry by forming Walsin Cartech Specialty Steel, a joint venture
with Carpenter Technology Corp. in the U.S.
Established the Wuhan wire and cable plant for optical communication cable production.
1995
Formed Walsin (China) Investment Co., Ltd. and set up four operating locations in China's major cities,
including Hangzhou, Shanghai and Nanjing, for the production of power cables, bare copper wires and
fiber optic cables.
1997
Established specialty steel plants in Changshu and in Baihe, Shanghai, for the production and sale of
seamless steel tubes and straight steel bars.
Formed HannStar Board Corp. to expand into the PCB industry.
5
Company Profile
1998
Acquired and incorporated the assets of Walsin Cartech into the company.
Conducted enterprise re-engineering and full implementation of the SAP enterprise resource
management system.
Expanded into the TFT-LCD industry by forming HannStar Display Corp.
2000
Established the Dongguan plant for bare copper wire production.
2002
Expansion of Yanshui specialty steel plant was carried out to include slab steelmaking facilities.
2003 With Yanshui specialty steel plant beginning slab production, the company expanded into the stainless
steel plate market.
2005
Set up new plants in Nanjing, Changshu and Jiangyin to produce copper products as well as seamless
steel pipes and steel wire products.
Shanghai and Hangzhou power cable plants completed expansion and increased production capacity;
began mass production of 220kV EHV cables.
Expansion of Yanshui specialty steel plant to include slab steelmaking facilities was completed.
2006
New copper production plant in Nanjing completed, with annual production capacity of 250,000
metric tons. Total copper production increased from 400,000 to 650,000 metric tons.
Development of 500kV EHV cables for Hangzhou power plant was invested and received certification.
The Company's consolidated revenue exceeded NT$100 billion.
2007
Expanded steel production capacity by acquiring stake in Yantai Huanghai Iron and Steel Co., Ltd.
Changshu specialty steel plant passed review by the National Nuclear Safety Administration and
received certification for nuclear power plant sales.
Hangzhou power cable plant began expansion efforts and construction of the second VCV process
tower and added high voltage cable production lines.
2008
Expansion of Yantai plant for stainless steel manufacturing process; added new stainless steel billet
products.
2009
Yantai stainless steel plant completed transformation of stainless steel manufacturing processes;
stainless steel and high-grade alloy steel products were added.
Changshu plant's seamless steel tube production began Phase 2 expansion to increase production
capacity.
Completion of the new A6 building in Xinyi Development Zone and the relocation of Walsin Lihwa
headquarters.
2010
Nanjing Walsin Centro began construction in Nanjing's Hexi Newtown. A multi-purpose commercial
center spanning one million square meters will be developed over several phases.
Partnered with Nanjing municipal government to create the Nanjing Taiwan Trade Mart, thus
establishing a cross-Strait commercial trading platform.
6
2012
Construction of two office buildings in C1 land plot of Nanjing Walsin Centro completed and
transferred to the Jiangsu Branch of the China Development Bank and the Nanjing Branch of China
Guangfa Bank.
2013
Cold rolled steel coil production officially commenced at the Taichung Harbor stainless steel roll plant.
2014
First batch of premium residential buildings in C2 land plot in Nanjing Walsin Centro delivered; phased
development of D and AB land plots planned.
2016
The Company marked its 50th anniversary.
2017
Taiwan and China, have recorded steady increase in overall steelmaking and annual production of
710,000 metric tons.
2018
The coarse crusher was launched in Yanshui plant to improve the product quality and yield rate.
Phase I office buildings in Nanjing Walsin Centro on AB land plot and Phase II houses on D land plot were
delivered.
2019 Walsin shopping mall in Nanjing was open for operation, serving as a representative landmark for Walsin's
entrance to shopping mall industry.
2020
The Company established Walsin Nickel Industrial Indonesia to extend into the production and sale of
upstream raw materials for stainless steel.
7
Corporate Governance Report
III Corporate Governance Report
1. Organizational Chart
(1) Company Organization Chart (March 30, 2021)
8
(2) Principal Duties of Various Departments
Department
Audit Committee
Compensation
Committee
Sustainable
Development
Committee
Job Duties & Functions
Assisting the Board of Directors in decision-making and supervising matters, including the correctness and accuracy of
the Company’s financial statements, the engagement (dismissal), independence and performance of attesting CPA,
internal control, legal compliance and risk management.
Drafting and periodically reviewing the performance evaluation of board directors and managers, as well as the policy,
system, standard and structure of compensation. Periodically evaluating and determining the compensation for board
directors and managers.
Formulating corporate social responsibility vision and strategy; inspecting the Group's overall as well as various
committees' steering and overseeing implementation performances via regular meetings; annual CSR results to be
submitted to the Board of Directors in the following year.
Auditing Office
Responsible for planning and auditing internal auditing systems.
Stainless Steel BG
Wire & Cable BG
Product Types: Stainless steel slabs (ingots), hot-rolled steel coils, cold-rolled steel coils, hot-rolled rods and cold drawn
straight bars, and stainless steel seamless pipes and alloy steel pipes, including ordinary fluid pipes, heat-exchanging
pipes, boiler pipes, instrumentation tubes, steel wires for pre-stressed concrete, stranded steel wires, zinc-plated steel
wires for bridge cables, zinc-plated stranded steel wires, PE for bridge bracing cables and epoxy-coated stranded steel
wires.
Responsible for integrating the functions of business, technology, manufacturing, operation and administration of each
BU.
The managers of this BG are responsible for its profit/loss, improving long-term competitiveness and executing the
Company's strategies.
Product Types: Copper rods and wires that power cable and wire industries use as basic raw materials for conductors, as
well as low-, medium- and high-voltage PVC cables, cross-linking PE cables, specialty & professional fire-resistant, fire-
retardant, low-smoke and halogen-free cables for different industries, rubber cables, communication cables, related
materials for cable insulation, as well as other plastic accessories.
Responsible for integrating the functions of business, technology, manufacturing of each BU.
The managers of this BG are responsible for its profit/loss, improving long-term competitiveness and executing the
Company's strategies.
Commodity BG
Responsible for raw material procurement transactions, control of raw material price risk, and operation management
of Walsin Nickel Industrial Indonesia.
The managers of this BG are responsible for its profit/loss, improving long-term competitiveness and executing the
Company's strategies.
Business Items: Developing composite commercial properties, real estate management, etc.
Commerce & Real
Estate BG
IT Center
Administration
Management Center
Human Resources
Division
Financial Management
Center
The managers of this BG are responsible for its profit/loss, improving long-term competitiveness and executing the
Company's strategies.
Establishment of information system for Industry 4.0 business operation, establishment of reliable/safe information
system environment, realization of platform for cloud information service and establishment of big data analysis.
Responsible for human resources, procurement, media and general affairs, etc.
Organization planning, drafting of human resources policies and employment and performance reviews, performance
management, personnel administration, remuneration and benefits, learning and development, employee relations,
establishment of a human resources system, etc.
Responsible for the operation of financial accounting system and participating in the management and decision-making.
Accounting Division
Responsible for accounting, asset management, credit management, operating analysis, etc.
Financial Division
Responsible for funding, financial planning, investment management, risk management, etc.
Legal Division
Responsible for legal risk management and the preparation and management of various contracts, legal disputes,
litigation or non-litigation cases.
Environment, Health &
Safety Division
Responsible for the Company's environmental protection, occupational safety and health management and other
related matters, and promoting and implementing the company-wide environment, safety and health business
strategies and plans.
9
Corporate Governance Report
2. Profiles of Board Directors, President, Vice Presidents and Department Heads
(1)
Information on Directors
Title
Nationality
or
Registration
Country
Name Gender
Term
Began
Term
Date First
Elected
Shares Held When
Elected
Shares Currently Held
Shares Currently Held by
Spouse and Underage
Children
Number of
shares
Percentage
Number of
shares
Percentage
Number of
shares
Percentage
Chairman
R.O.C.
Yu-Lon
Chiao
Male May 29,
3 years April 10,
45,961,773
1.38% 45,961,773
1.42% 19,638,314
0.61%
2020
1981
Vice
Chairman
R.O.C.
Patricia
Chiao
Female May 29,
3 years May 31,
91,969,006
2.77% 91,969,006
2.85% 0
0.00%
2020
2005
(Note2)
Director
R.O.C.
Yu-
Cheng
Chiao
Male May 29,
3 years April 10,
39,508,661
1.19% 39,508,661
1.22% 19,032,428
0.59%
2020
1981
Director
R.O.C.
Yu-
Heng
Chiao
Male May 29,
3 years April 18,
57,792,197
1.74% 60,202,197
1.87% 13,065,390
0.41%
2020
1990
10
Key Education/Work Experience
Other Current Positions Within the Company
Degree
Other Officer, Director or Supervisor who
are Spouse or Relative within Second
December 31, 2020
Shares Held in Name of
Others
Number of
shares
0
Percentage
0.00%
Business Administration Department,
University
The
Company's former President and Vice
Chairman.
of Washington;
Chairman of Concord Venture Capital Group
Vice Chairman of Hangzhou Walsin Power
Cable & Wire Co., Ltd.; Director/ Vice
of Walton
President
Advanced Engineering,
Inc., Ltd., and
subsidiaries of Walsin Lihwa Corporation.
Commissioner
0
0
former
assistant
0.00% MBA at College of Notre Dame; the
Company’s
vice
president of Investment Dept., assistant
vice president of Financial Dept., head
of Financial Investment Dept., assistant
vice president of Commodity Center and
Financial
Investment Management
Center, President of Insulated Wire &
Cable BU.
University of Washington Masters of
Business
Electrical
Administration The Company's former
chairman.
Engineer
0.00%
and
0
0.00%
Golden Gate University, Master of
Business Administration The Company's
former
vice
chairman.
vice president
and
Director of Walsin Lihwa Holding Co., Ltd.,
Walsin Specialty Steel Holding Co., Ltd.,
Walsin Specialty Steel Corporation, and Joint
Success Enterprises Limited; President of
Chin-Xin Investment Co., Ltd.
of Walsin
Chairman
Electronics
of Winbond
Corporation and Chin-Xin Investment Co.,
Ltd; Director
Technology
Corporation, Nuvoton Technology Corp,
Jincheng Construction Co., Ltd., United
Industrial Gases Co., Ltd., MiTAC Holdings
Corporation, Landmark Group Holdings Ltd.,
Peaceful River Corporation, Winbond
Winbond
Corporation,
International
Electronics
America,
Corporation
Marketplace Management Limited, Nuvoton
Investment Holding Ltd., Pigeon Creek
Holding Co., Ltd., and Songyong Investment
Co., Ltd.; CEO of Winbond Electronics
Corporation; Manager of Goldbond LLC;
Independent Director, member of the Audit
the
Committee
Compensation
Taiwan
at
Cement Corp.;
Independent Director,
member of the Audit Committee and
convener of the Compensation Committee
International
Technology
Synnex
at
Corporation.
Chairman of Walsin Technology Corporation,
Walton
Inc.,
HannStar Board Corp., Global Brands
Manufacture, Prosperity Dielectrics Co., Ltd.,
Info-Tek Corp., VVG Co. Ltd., HannStar Board
Corporation
Silitech
Technology Corporation; Director of Career
Technology Mfg. Co., Ltd., Sheng Cheng
Industry, Yu Yue Corporation, An Xin e-
Commerce and Inpaq Technology Co., Ltd.
Engineering,
Committee
Advanced
convener
(Jiangyi),
and
and
of
Note
(Note
1)
None
None
None
Position
Name
Relationship
Vice Chairman
Director
Director
Director
Chairman
Director
Director
Director
Chairman
Vice Chairman
Director
Director
Patricia
Chiao
Yu-Cheng
Chiao
Yu-Heng
Chiao
Wei-Shin
Ma
Yu-Lon
Chiao
Yu-Cheng
Chiao
Yu-Heng
Chiao
Wei-Shin
Ma
Yu-Lon
Chiao
Patricia
Chiao
Yu-Heng
Chiao
Wei-Shin
Ma
Younger
sister
Older
brother
Younger
brother
Sister-in-law
Older
brother
Older
brother
Younger
brother
Sister-in-law
Younger
brother
Younger
sister
Younger
brother
Sister-in-law
Chairman
Yu-Lon
Chiao
Vice Chairman
Patricia
Chiao
Director
Yu-Cheng
Older
None
brother
Older
sister
Older
Director
Chiao
Wei-Shin
Ma
brother
Sister-in-law
11
Corporate Governance Report
Title
Nationality
or
Registration
Country
Name Gender
Term
Began
Term
Date First
Elected
Shares Held When
Elected
Shares Currently Held
Number of
shares
Percentage
Number of
shares
Percentage
Shares Currently Held by
Spouse and Underage
Children
Number of
shares
Percentage
Director
R.O.C.
Andrew
Hsia
Male May 29,
3 years May 29,
0
0.00%
0
0.00%
0
0.00%
2020
2020
Director
R.O.C.
Wei-
Shin Ma
Female May 29,
3 years June 11,
244,033
0.01%
244,033
0.01% 55,926,346
1.73%
2020
2014
Director
R.O.C.
Independe
nt Director
R.O.C.
Chin-Xin
Investm
ent Co.,
Ltd
Represe
ntative:
Pei-
Ming
Chen
Ming-
Ling
Hsueh
-
May 29,
2020
3 years
Male
Legal
Person:
May 31,
2005
(Note3)
Represen
tative:
May 29,
2020
Male May 29,
3 years June 11,
2020
2014
210,011,000
6.31%
220,011,000
6.82%
-
-
0
0
0.00%
0.00%
0
0
0%
0
0.00%
0.00%
0
0.00%
12
Key Education/Work Experience
Other Current Positions Within the Company
Degree
Position
Name
Relationship
Other Officer, Director or Supervisor who
are Spouse or Relative within Second
Note
(Note
1)
December 31, 2020
Shares Held in Name of
Others
Number of
shares
0
Percentage
0.00%
0
0.00%
the
Chengchi University;
He received his bachelor's degree in law
from Fu Jen Catholic University and his
master's degree in diplomacy from the
National
he
graduated from Graduate Institute of
Legal Studies, University of Oxford, UK
(M. Litt); he was Head of the Political
Section of the R.O.C. Representative
in the United States, Deputy
Office
Representative
R.O.C.
of
Representative Office in Canada, Head
of the R.O.C. Representative Office in
New York, R.O.C. Representative Office
in India, Political Deputy Minister of
Ministry of Foreign Affairs, Deputy
Minister of Ministry of National
Defense, and Chairman of the Mainland
Affairs Council, Executive Yuan.
Ph.D., College of Humanities and Social
Sciences of National
Tsing Hua
University, Peking University, Master of
Business Administration
for Senior
Managers, University of California
(Berkeley), Department of East Asian
Languages;
Yuanta
Chairman
Securities Investment Trust Corporation
and HannStar Display Corp.
of
0
0.00% M.S. in Electrical Engineering, University
of Detroit, USA; B.S.
in Electrical
Engineering, National Cheng Kung
Nuvoton
Director,
University;
Technology Co. Ltd. and Vice President
of DRAM Products Business Group of
Winbond Electronics Co.
0
0.00%
University, Master
Soochow
in
Accountancy; Bloomsburg University of
Pennsylvania, Master of Business
Administration; PwC Taiwan Director;
Executive Director, Taiwan Corporate
Governance
Adjunct
Professor, School of Science and
Technology Management, National
Tsing Hua University
Association;
Vice President & Spokesman of Phu My Hung
Holding Group; Chief Representative of
Central Trading & Development Corporation.
None
None
None
None
Chairman of HannsTouch Solution
Inc.,
Golden Apple Investment Company, White
Stone Management Consultancy; Director of
HannStar Color Co. and Winbond Electronics
Corporation
Chairman
Vice Chairman
Director
Director
Yu-Lon
Chiao
Patricia
Chiao
Yu-Cheng
Chiao
Yu-Heng
Chiao
None
Brother-in-
law
Sister-in-law
Brother-in-
law
Brother-in-
law
President of Winbond Electronics Co. Ltd.
None
None
None
None
Independent Director of Yuanta Financial
Holdings & Yuanta Commercial Bank, TTY
Biopharm
Technology
Corporation.
Lite-On
and
None
None
None
None
13
Corporate Governance Report
Title
Nationality
or
Registratio
n Country
Name Gender
Term
Began
Term
Date First
Elected
Shares Held When
Elected
Shares Currently Held
Number of
shares
Percentage
Number of
shares
Percentage
Shares Currently Held by
Spouse and Underage
Children
Number of
shares
Percentage
Independe
nt Director
R.O.C.
King-
Ling Du
Male May 29,
3 years June 11,
0
0.00%
0
0.00%
1,000
0.00%
2020
2014
Independe
nt Director
R.O.C.
Shiang-
Chung
Chen
Male May 29,
3 years June 11,
0
0.00%
0
0.00%
0
0.00%
2020
2014
Independe
nt Director
R.O.C.
Fu-
Hsiung
Hu
Male May 29,
3 years May 29,
0
0.00%
0
0.00%
0
0.00%
2020
2020
Note 1: Where the chairman 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 of, necessity of, and the measures adopted in response to, the above situation.
Note 2: Patricia Chiao served on the Company’s Board between May 31, 2005 and June 10, 2014 and from May 25, 2016 until now.
Note 3: Chin-Xin Investment Co., Ltd served on the Company’s Board between May 31, 2005 and June 10, 2014 and from May 26, 2015
until now.
Note 4: Hui-Ming Cheng, Director, Tung-Yi Chan, Representative of Chin-Xin Investment Co., Ltd, and Juei-Lung Chen, Independent Director,
were dismissed because their term of office expired on May 29, 2020.
Note 5: The Audit Committee was established on May 26, 2017 to replace the supervisors.
14
Shares Held in Name of
Others
Key Education/Work Experience
Other Current Positions Within the Company
Degree
1)
December 31, 2020
Other Officer, Director or Supervisor who
Note
are Spouse or Relative within Second
(Note
Number of
shares
0
Percentage
Position
Name
Relationship
0.00% Mississippi State University, Masters in
Director of Sheh Fung Screws Co., Ltd and
None
None
None
None
Green River Holding Co., Ltd.; Independent
Director of Ta Liang TechnologyCo., Ltd.
Investment
Foundation;
Chairman and President of Mercuries Data
Systems Ltd.; Chairman of Hipact Tech Inc.,
Nanjing Mercuries Development of Software
Co., Ltd., Mercuries Insurance Agent Co.,
Ltd.; Director of Mercuries Holdings
Corporation, Mercuries Data Systems Ltd.,
Inc., Shang-Hong
Shang-Ling
Investment Inc., Yangzheng Investment Co.,
Ltd.and EASYCARD
Investment Holding
Company, Taiwan Masters Golf Promotion
Foundation, and Institute for National Policy
of
Research
Digicentre Co., Ltd.; Independent Director of
Teco Image Systems Inc.; Director of the
Friends of the Police Association of the
Vice President of
Republic of China,
and Prevention
Criminal
Association of
the Republic of China;
Chiarman of the Security Police Third Corps
the Police Friendship
Police Club of
Association of
the Republic of China;
Director of Taipei Independent Directors
Association
Independent Managing Director of O-Bank
Co., Ltd.
Investigation
Supervisor
Mechanical Engineering; New York
University, financial management
research; Stanford University, Advance
marketing research; U.S. representative
of China Steel Corporation (Steel
Division, U.S. Purchasing Group of
Executive Yuan), Deputy General
Manager of Business Department,
Engineering Department, Corporate
Planning Department, and Executive
Deputy General Manager; General
Manager, Kaohsiung Rapid Transit
Corporation; Chairman, China Ecotek
Corporation.
The School of Industrial Engineering at
of
Purdue University;
Mercuries Data Systems Ltd.
President
0
0.00%
0
0.00% M.A., Graduate School of Business,
National Taiwan University; Managing
Director, Central Trust Bureau; Director
of Mega Bank; Director of Department
of Economic Energy and Agriculture,
Executive Yuan; Vice Chairman of
Council of Agriculture; Chairman of
National Animal Industry Foundation,
and
Institute of Animal
Credit
and
Technology,
Information
Taiwan
Center
Cooperative Securities
Science
Joint
and
None
None
None
None
None
None
None
None
15
Corporate Governance Report
1. Major shareholders of institutional shareholder
Name of Institutional Shareholder
Major Shareholders of Institutional Shareholders (Note)
December 31, 2020
Shareholding
Chin-Xin Investment Co., Ltd
Winbond Electronics Corp.
Walsin Lihwa Corporation
Huali Investment Corp.
Yu-Cheng Chiao
Yu-Lon Chiao
Yu-Heng Chiao
Yu-Chi Chiao
Walsin Technology Corporation.
HannStar Board Corporation
Prosperity Dielectrics Co., Ltd.
37.69%
36.99%
4.43%
3.14%
3.14%
3.14%
3.14%
1.86%
1.34%
0.72%
Note: Top ten shareholders of institutional shareholder.
2. Major Shareholders in Previous Table who are Institutional Investors and their Major Shareholders
Name of Institutional Shareholder
Major Shareholders of Institutional Shareholders (Note)
Shareholding
December 31, 2020
Walsin Lihwa Corporation
Chin-Xin Investment Co., Ltd
Yu-Cheng Chiao
PGIA General International Stock Index Fund, one of the fund series managed
by PGIA, under the custody of JP Morgan Chase Bank N.A., Taipei Branch
22.21%
5.55%
1.60%
1.31%
Winbond Electronics Corporation
Vanguard Emerging Markets Stock Index Fund managed by Vanguard Group
1.01%
under the custody of JP Morgan Chase Bank N.A., Taipei Branch
LGT Bank (Singapore) Investment Fund under the custody of JP Morgan Chase
1.13%
Bank N.A. Taipei Branch
Pai-Yung Hong
Singapore Government Fund Account under the custody ofCitibank, N.A., Taipei
Branch
Norges Bank Investment Fund under the custody of Citibank, Taipei Branch
Note: Top ten shareholders of the institutional shareholder.
Yu-Lon Chiao
Name of Institutional Shareholder
Major Shareholders of Institutional Shareholders (Note)
LGT Bank (Singapore) Investment Fund under the custody of Business
Department, Standard Chartered Bank (Taiwan) Ltd.
Winbond Electronics Corporation
Chin-Xin Investment Co., Ltd
Walsin Lihwa Corporation
TECO Electric and Machinery Co., Ltd.
Huali Investment Corp.
Rong Jiang Co., Ltd.
Patricia Chiao
Yu-Heng Chiao
Note: Top ten shareholders of the institutional shareholder.
Investment Account of Banque Pictet & CIE SA under the custody of HSBC
Norges Bank Investment Fund under the custody of Citibank, Taipei Branch
0.97%
0.91%
0.89%
0.74%
March 30, 2021
Shareholding
7.20%
6.47%
6.41%
5.98%
2.91%
2.86%
2.72%
1.78%
1.63%
1.63%
16
Name of Institutional Shareholder
Major Shareholders of Institutional Shareholders (Note)
Shareholding
December 31, 2020
Huali Investment Corp.
HannStar Color Co. Ltd.
Walsin Lihwa Corporation
HannStar Board Corporation
Global Brands Manufacture Ltd.
New Labor Pension Fund
Walton Advanced Engineering, Inc.
Walsin Technology Corporation
Kim Eng Securities Private Co., Ltd. investment account under the custody of
Citibank Taiwan Ltd.
Yu-Heng Chiao
Winbond Electronics Corporation
PGIA General International Stock Index Fund, one of the fund series managed
by PGIA, under the custody of JP Morgan Chase Bank N.A., Taipei Branch
Giga Investment Co.
Walsin Technology Corporation
Walsin Lihwa Corporation
Career Technology (Mfg.) Co., Ltd.
Chin-Xin Investment Co., Ltd
Yu-Heng Chiao
HannStar Board Corporation
Pai-Yung Hong
Special Account of BNP Paribas, Singapore Branch under the custody of HSBC
Prosperity Dielectrics Co., Ltd.
Yeu-Hong Qiu
PGIA General International Stock Index Fund, one of the fund series managed
by PGIA, under the custody of JP Morgan Chase Bank N.A., Taipei Branch
Prosperity Dielectrics Co., Ltd.
Walsin Technology Corporation
Walton Advanced Engineering, Inc.
Yu-Heng Chiao
Ta-Ho Maritime Corporation
ABC Taiwan Electronics Corp
Su, Ying-Ying
Zhu, You-Yi
Tsao, Chung-Ya
Pang, Chen-Tai
Li, Kuei-Mei
Note: Top ten shareholders of the institutional shareholders.
100%
18.30%
7.46%
3.11%
2.86%
2.74%
2.74%
2.64%
1.77%
1.46%
1.37%
20.32%
12.06%
5..43%
3.54%
2.06%
1.86%
1.49%
1.07%
1.05%
0.93%
43.13%
0.75%
0.62%
0.55%
0.47%
0.24%
0.15%
0.15%
0.15%
0.15%
17
Corporate Governance Report
3. Work experience, Professional Knowledge and Independence of Directors
Whether Possessing at least 5 Years of
Work Experience and the Following
Specialized Qualifications
An instructor
or higher
position in the
department of
commerce,
law, finance,
accounting or
other
department
related to the
business
needs of the
Company in a
public or
private junior
college or
university
A judge, public
prosecutor,
attorney,
accountant, or
other
professional or
technical
specialist
related to the
needs of the
Company who
has passed a
national
examination
and received a
certificate
Having
work
experience
in
commerce,
law,
finance, or
accounting
or a
profession
necessary
for the
business of
the
Company
Meets the Following Independence Criteria (Note)
December 31, 2020
1
2
3
4
5
6
7
8
9
10 11
12
Number
of Other
Public
Compani
es in
which the
Director
also
Serves as
an
Independ
ent
Director
No
No
No
No
No
No
No
Yes
No
No
No
No
No
No
No
No
No
No
Yes
No
No
No
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
0
0
2
0
0
0
0
3
1
1
1
Qualification
Name
Yu-Lon Chiao
Patricia Chiao
Yu-Cheng Chiao
Yu-Heng Chiao
Andrew Hsia
Wei-Shin Ma
Chin-Xin
Investment Co.,
Ltd
Representative:
Pei-Ming Chen
Ming-Ling Hsueh
King-Ling Du
Shiang-Chung
Chen
Fu-Hsiung Hu
Note: If the Director meets any of the following criteria in the two years before being elected or during the term of office, please
check "" in the corresponding boxes.
(1) Not an employee of the Company or any of its affiliates;
(2) Not a Director or Supervisor of the Company or its affiliates (the same does not apply to independent directors 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).
(3) Not a natural-person shareholder whose shareholding, together with those of his/her spouse, minor children and shares
held under others' names, exceed 1% of the total number of outstanding shares of the Company, or ranks the person in
the top ten shareholders of the Company.
(4) Not a managerial officer listed in (1), neither is a spouse, relative within second degree of kinship, or lineal relative within
third degree of kinship of any of the persons in (2) and (3) above.
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total
number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its
representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act
(the same does not apply to independent directors 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).
(6) If a majority of the company's director seats or voting shares and those of any other company are controlled by the same
person: Not a director, supervisor, or employee of that other company (the same does not apply to independent directors
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) If the chairperson, general manager, or person holding an equivalent position of the company and a person in any of
those positions at another company or institution are the same person or are spouses: Not a director (or governor),
supervisor, or employee of that other company or institution (the same does not apply to independent directors
18
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, officer, or shareholder holding five percent or more of the shares, of a specified company or
institution that has a financial or business relationship with the company (the same does not apply to any specified
company or institution that holds 20 percent or more and no more than 50 percent of the total number of issued shares
of the Company where independent directors are 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).
(9) Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship,
partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or
that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company
for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse
thereof; provided, 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 Act or
to the Business Mergers and Acquisitions Act or related laws or regulations.
(10) Not having a marital relationship or a relative within the second degree of kinship to any other Director of the Company.
(11) Not having any of the situations set forth in Article 30 of the Company Act of the R.O.C.
(12) Not a government agency, juristic person, or its representative set forth in Article 27 of the Company Act of the R.O.C.
19
Corporate Governance Report
(2) Profile of President, Vice Presidents and Department Heads
Title
Nationality
Name
Gender
R.O.C.
Fred Pan
Male
President &
President of
Commerce & Real
Estate BG
Shares Held
Shares Held by Spouse and
Shares Held in Name of
Underage Children
Others
Number of
shares
Percentage
Number of
shares
Percentage
Number of
shares
Percentage
107,300
0.00%
0
0.00%
0
0.00%
Date
appointed
July 16,
2007
Executive Vice
President & Head
of Finance Dept.
R.O.C.
C.C. Chen Male
May 1,
2010
235,722
0.01%
0
0.00%
0
0.00%
President of
Insulated Wire &
Cable BG
R.O.C.
Jin-Renn
Leu
Male
August 13,
2014
40,900
0.00%
11,000
0.00%
0
0.00%
President of
Stainless Steel BG
R.O.C.
Kevin Niu
Male
December
4, 2017
20,000
0.00%
0
0.00%
0
0.00%
President of
Commodity BG
R.O.C.
Josh Chia Male
June 13,
2019
0
0.00%
1,559
0.00%
0
0.00%
20
December 31, 2020
Education/Work Experience
Other Current Positions at Other Companies
MBA of US Tulane University; Finance Chief of Marketing of
Philips Taiwan Semiconductor, Finance Chief of Sales of
Philips Asia Pacific Semiconductor;
the Company's
Accounting Division head, Chief of Staff and Vice President.
Master of Accounting Graduate School, National Taiwan
University; Audit Team Leader of Deloitte Touche Tohmatsu
Limited, Financial Assistant Vice President of Promisedland,
Partner of GACPA, Partner of Tianyao United Accountants;
the Company's Manager of Performance Analysis
Department of Financial Service Center, Head of Financial
Management Center, Head of Accounting Division, Head of
China Management Division, Vice President of Specialty
Steel BG, Head of Yantai BU, Head and Vice President of
Specialty Steel BU, and President of Commodity BG.
M.S. in Electrical Engineering, Yuan Ze University; Assistant
Manager
Communication
Division/Communication Technology Division, Manager of
Communication Technology/Quality Assurance Technology
Division, Electrical Production/Communication Operation
Division, Director of Hsinchuang BU, Vice President of Cable
& Wire BG; Head of Wire BU of the Company.
Optical
of
Ph.D., Carnegie Mellon University, Pittsburgh, USA;
Quantitative Analyst of U.S. based Provident Capital
Management, Special Assistant to CEO of Chinatimes
Network Technology, Associate Manager of Financial
Trading Department of Yuanta Securities, Vice President of
Securities Department of CTBC Bank, Vice President of
Derivatives Department of KGI Securities; Chief Marketing
Officer and Head of Resources Management Center of the
Company.
MPA in Finance, New York University; MBA in Accounting,
National Taiwan University; Bachelor of Accounting,
National Taiwan University; Head of Asset and Liability
Management
Department/Performance Management
Department/ Corporate Finance Department of Standard
Chartered Bank,
Executive Vice President & Accounting Officer of Finance
Division of Standard Chartered Bank, Vice President of
Accounting Department of Fubon Bank (China) Co., Ltd.; the
Company's Project Director of the President Office, Head of
Finance Division and Vice President of Financial
Management Center.
Manager who is Spouse or
Relative within the Second
Degree
Title Name Relationship
None None
None
Shares
Acquired
by
Managers
under
Employee
Stock
Options
None
Note
(Note
2)
None
None None
None
None
None
Joint
Investment,
Vice Chairman of Nanjing Walsin Property
Management Co., Ltd.; Director of Walsin
Ltd., Walsin
(Nanjing) Development Co.,
Success
International
Enterprises Limited; Director and President of
Jincheng Construction Co., Ltd., Walsin China
Investment Co., Ltd., Walsin Lihwa (Changzhou)
Investment Co., Ltd.
Chairman of Shanghai Baihe Walsin Lihwa
Specialty Steel Products Co., Ltd. and PT. Walsin
Nickel Industrial Indonesia; Director of Walsin
International
China
Investment Co., Ltd. and Walsin Info-Electric Inc.
Investment, Walsin
Director of Shanghai Walsin Lihwa Power Wire &
Cable Co.,
Ltd., Chung Tai Technology
Development Engineering Co., Ltd., and Taiwan
Electric Research & Testing Center
None None
None
None
None
Chairman of Yantai Walsin Stainless Steel Co.,
Ltd. and Jiangyin Walsin Specialty Alloy Materials
Co., Ltd.
None None
None
None
None
Director of Walsin Precision Technology Co., Ltd.
and PT. Walsin Nickel Industrial Indonesia.
None None
None
None
None
21
Corporate Governance Report
Title
Nationality
Name
Gender
Head of Corporate
Governance
R.O.C.
Sherry Ho Male
Shares Held
Shares Held by Spouse and
Shares Held in Name of
Underage Children
Others
Number of
shares
Percentage
Number of
shares
Percentage
Number of
shares
Percentage
0
0.00%
0
0.00%
0
0.00%
Date
appointed
June 13,
2019
Director of
Accounting
R.O.C.
Richard Wu Male
May 1,
2010
110,400
0.00%
0
0.00%
0
0.00%
Note 1: Date appointed is the first time appointed department heads.
Note 2: Where the chairman 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 of, necessity of, and the measures adopted in response to, the above situation.
Note 3: Mr. Tain-Rong Chen, Mr. Witty Liao, Mr. Juei-Lung Chen, Mr. David Liou, and Mr. Allen Hsu transfered to other posts, effective from
April 1, 2020.
Post-Period Note: Ms. Sherry Ho transferred to other post on January 22, 2021, and Head of Corporate Governance was assumed by Ms.
Hueiping Lo.
22
Education/Work Experience
Other Current Positions at Other Companies
Manager who is Spouse or
Relative within the Second
Degree
Title Name Relationship
Bachelor of Law, Soochow University; Master of Laws, Case
Western Reserve University; Researcher, Strategic Planning
Research Department, General Research Institute, RITEK
Corporation; Manager, Legal Department, Legal Intellectual
Property Division, Lite-On IT Corporation..
Director of Jiangyin Walsin Specialty Alloy
Materials Co., Ltd. and Changshu Walsin
Specialty Steel Co., Ltd.
None None
None
Shares
Acquired
by
Managers
under
Employee
Stock
Options
None
Note
(Note
2)
None
Department of Accounting, Zhongyuan University; Team
Leader of Deloitte, Deputy Manager of Southern Taiwan
Accounting Firm, Deputy Manager of Kunjin Co., Ltd., and
Financial Manager of Shanglin Enterprise; Associate
Manager, Cost Section, Yenshiu Plant of the Company,
Control Officer of Stainless Steel BU, Head of Auditing
Division, and Head of General Manager Office.
Supervisor of Jincheng Construction Co., Ltd.,
Walsin Info-Electric Corp., Min Maw Precision
Industry Corp.; Supervisor of Walsin China
Investment Co., Ltd., Dongguan Walsin Wire &
Cable Co. Ltd., Shanghai Walsin Lihwa Power
Wire & Cable Co., Ltd., Changshu Walsin
Specialty Steel Co., Ltd., Yantai Walsin Stainless
Steel Co., Ltd., Jiangyin Huaxin Special Alloy
Material Co., Ltd., Jiangying Walsin Steel Cable
Co., Ltd., Nanjing Taiwan Trade Mart, Walsin
(Nanjing) Real Estate Development Co., Ltd. and
Nanjing Walsin Property Management Co., Ltd.
None None
None
None
None
23
Corporate Governance Report
3. Remunerations to Directors, President and Vice Presidents in the Most Recent Year
(1) Remuneration to Directors (including Independent Directors)
Directors Remuneration
Remuneration (A)
(Note 2)
Pension (B)
Remuneration to Directors
(C)
(Note 3)
Business Expense (D)
(Note 4)
Company
All
Companies
In Financial
Statements
(Note 7)
Company
All
Companies
In Financial
Statements
(Note 7)
Company
All
Companies
In Financial
Statements
(Note 7)
Company
All
Companies
In Financial
Statements
(Note 7)
42,780,000
42,780,000
0
0
24,970,000
24,970,000
4,371,547
4,395,547
2,890,500
2,890,500
0
0
9,080,000
9,080,000
3,426,831
3,426,831
Title
(Note 1)
Name
(Note 1)
Chairman
Vice Chairman
Director
Director
Director
Director
Legal Person
Director and
Representative
Director
Independent
Director
Independent
Director
Independent
Director
Independent
Director
Independent
Director
Yu-Lon Chiao
Patricia Chiao
Yu-Cheng Chiao
Hui-Ming Cheng
(Note 12)
Yu-Heng Chiao
Wei-Shin Ma
Chin-Xin
Investment Co.,
Ltd
Representative:
Pei-Ming Chen
(Note 13)
Andrew Hsia
(Note 14)
Ming-Ling Hsueh
King-Ling Du
Shiang-Chung
Chen
Steve Ruey-Long
Chen(Note 15)
Fu-Hsiung Hu
(Note 16)
D
i
r
e
c
t
o
r
I
n
d
e
p
e
n
d
e
n
t
D
i
r
e
c
t
o
r
1.
In order to facilitate the management of the remuneration of directors and functional committee members of the Company, the Company has established the "Rules for the
Remuneration of Directors and Functional Committee Members", which clearly define the criteria for the remuneration payable to independent directors according to their individual
professional input and performance, while taking into account the reasonableness of individual performance, the Company's operating performance and future risks.
2. Except as disclosed in the above chart, remuneration to directors received due to the service provided to all companies listed in the financial statement in the most recent year: 0
24
Ratio of total (A), (B), (C)
and (D) to after-tax loss
(Note 10) (%)
Salary, Bonus and
Special Allowance (E)
(Note 5)
Remuneration Received as Employee
Pension (F)
Employee Bonus (G) (Note 6)
Ratio of total (A), (B), (C),
(D), (E), (F) and (G) to After-
tax Income (Note 10) (%)
Company
All
Companies
In Financial
Statements
Compan
y
All
Companies
In Financial
Statements
(Note 7)
Company
All Companies
In Financial
Statements
(Note 7)
Company
Cash Bonus
Stock
Bonus
All Companies
In Financial Statements
(Note 7)
Cash Bonus
Stock Bonus
Company
All
Companies
In Financial
Statements
Remuneration
from Re-
investments other
than Subsidiaries
(Note 11)
Unit: NT$
1.0779
1.0782
0
0
0
0
0
0
0
0
1.0779
1.0782
141,304,504
0.2301
0.2301
0
0
0
0
0
0
0
0
0.2301
0
0.2301
25
Corporate Governance Report
Table of Remuneration Ranges
Range of Remuneration Paid
to Directors
NT$100,000,000
Total
11
11
11
11
Note 1: This Table lists incumbent Directors in 2020 and their respective remuneration.
Note 2: The Company’s Independent Directors and Directors who are authorized by the Board of Directors to regularly involve in the Company’s operation
may receive remuneration; the amount of remuneration shall be reviewed in accordance with Director’s participation and value contributed in the
Company’s operation, together with reference of international and domestic industrial practice, by the Remuneration Committee and submitted to
the Board of Directors for approval.
Note 3: Remunerations to Directors in 2020 approved by the Board of Directors have been listed.
Note 4: Refers to the expenses incurred by Directors in 2020 to perform relevant duties (including transportation, attendance fees, special disbursements
and various allowances).
Note 5: Refers to the salaries, additional pay, severance pay, various rewards, incentives, treasury stock price difference, transportation subsidies, special
allowance, various allowances and salary expenses listed in accordance with IFRS 2 "share-based payment", including shares acquired under
employee stock option, restricted new shares to employees and shares acquired from participation in cash capital increase option and so forth,
received by Directors who are also employees (including as President, vice president, managers and employees) in 2020. In addition, the Company's
remuneration to chauffeurs totaled NT$2,339,173/year.
Note 6: Refers to Directors also working as an employee (including as President, vice president, managers and employees) and receiving employee bonus
(including stocks and cash) in 2020; employee bonus for 2020 was approved by the Board of Directors.
Note 7: Refers to the total pay to the Company's Directors from all companies in the consolidated statements (including the Company).
Note 8: For the remuneration paid to Directors of the Company by the Company, names of every Director shall be disclosed in their corresponding range
within the remuneration schedule.
Note 9: For the remuneration paid to Directors of the Company by all companies in the consolidated statements (including the Company), names of every
Director shall be disclosed in their corresponding range within the remuneration schedule.
Note 10: After-tax net income refers to the after-tax net income of individual financial statement in 2020.
Note 11: a. This field shows the amount of related remunerations a Director of the Company receives from investees other than subsidiaries of the Company.
b. The remuneration refers to remuneration, bonus (including bonuses to employees, Directors and Supervisors) and related remunerations for the
performance of duties received by a Director of the Company serving as a Director, Supervisor or manager of an investee of the Company other than
26
subsidiaries.
Note 12: Mr. Hui-Ming Cheng was released from his position on May 29, 2020.
Note 13: Representative of Chin-Xin Investment Co., Ltd was changed to Mr. Pei-Ming Chen on May 29, 2020.
Note 14: Mr. Andrew Hsia was newly appointed on May 29, 2020.
Note 15: Mr. Steve Ruey-Long Chen was released from his position on May 29, 2020.
Note 16: Mr. Fu-Hsiung Hu was newly appointed on May 29, 2020.
＊ The remuneration content disclosed in this Table differs from the income concept of the Income Tax Act; therefore, this Table acts as a form of
information disclosure and does not serve for the purpose of taxation
27
Corporate Governance Report
(2) Remunerations to President and Vice Presidents
Remuneration (A)
Pension (B) (Note 2)
Bonus and Special Allowances (C)
(Note 3)
Title
(Note 1)
Name
(Note 1)
Company
All Companies
In Financial
Statements
(Note 5)
Company
All Companies
In Financial
Statements
(Note 5)
Company
All Companies
In Financial
Statements
(Note 5)
President & President of
Commerce & Real Estate BG
Fred Pan
Former Vice President
Steve Juei-Lung
Chen (Note 10)
David Liou (Note
11)
Kevin Niu
Chief Information Officer of
Information Center
President of Stainless Steel
BG
Sales Vice President of
Insulated Wire & Cable BG
President of Insulated Wire
& Cable BG
Manufacturing Vice
President of Stainless Steel
BG
Executive Vice President &
Head of Finance Dept.
President of Commodity BG Josh Chia
C.C. Chen
Jin-Renn Leu
Tain-Rong Chen
(Note 13)
Witty Liao (Note 12)
23,262,374
23,262,374
1,414,050
1,414,050
14,211,385
14,235,385
Table of Remuneration Ranges
Range of Remuneration Paid to
President and Vice Presidents
NT$100,000,000
Total
Note 1:
Note 2:
Note 3:
Note 4:
Note 5:
Note 6:
Note 7:
Note 8:
9
9
This Table discloses a summary of the payments managers' ranked vice president (and equivalents) or above received in 2020.
Refers to pension set aside pursuant to the law.
Refers to various bonuses, incentives, company car rental fees, vehicle subsidies, special allowance and salary expenses listed in accordance with IFRS 2 "share-based
payment", including shares acquired under employee stock options, restricted new shares to employees and shares acquired from participation in cash capital increase
options and so forth, received by managers ranked vice president (and equivalents) or above in 2020. In addition, the Company's remuneration to chauffeurs totaled
NT$1,039,554/year.
Refers to employee bonuses (including stock and cash bonuses) approved by the Board of Directors for distribution to managers ranked vice president (and equivalents) or
above in 2020.
Discloses the total payment to manager’s ranked vice president (and equivalents) or above from all companies in the consolidated statements (including the Company).
a. This field shows the amount of related remuneration managers ranked vice president (and equivalents) or above received from investees other than subsidiaries of the
Company.
b. The remuneration refers to pay, bonus (including bonuses to employees, Directors and Supervisors) and related remunerations for the performance of duties received
by the Company's managers ranked vice president (and equivalents) or above while serving as a Director, Supervisor or manager of an investee of the Company other than
subsidiaries.
For the remuneration the Company has paid, names of every manager ranked vice president (and equivalents) or above shall be disclosed in their corresponding range
within the remuneration scale.
For the remuneration paid to managers ranked vice president (and equivalents) above by all investees (including the Company), names of every manager shall be disclosed
in their corresponding range within the remuneration scale.
After-tax net income refers to the after-tax net income of individual financial statement in 2020.
Note 9:
Note 10: Mr. Steve Juei-Lung Chen was released from his position on March 31, 2020.
Note 11: Mr. David Liou was released from his position on March 31, 2020.
Note 12: Mr. Witty Liao was released from his position on March 31, 2020.
Note 13: Mr. Tain-Rong Chen was released from his position on March 31, 2020.
＊
The remuneration content disclosed in this Table differs from the income concept of the Income Tax Act; therefore, this Table acts as a form of information disclosure and does
not serve for the purpose of taxation.
28
Employee Bonus (D) (Note 4)
Ratio of total (A), (B), (C) and (D) to After-tax
Income (%) (Note 9)
Company
All Companies
In Financial
Statements
(Note 5)
Cash Bonus
Stock
Bonus
Cash Bonus
Stock
Bonus
Company
All Companies
In Financial Statements
(Note 5)
Unit: NT$
Remuneration from Re-investments
or Parent Company other than
Subsidiaries
(Note 6)
2,006,573
0
2,006,573
0
0.6112
0.6115
3,559,885
(3) Distribution of Employee Bonus to Managers
Title
Name
Stock bonus
Cash Bonus
Total
Total to After-tax
Net Income (%)
March 5, 2020
Percentage of the
President & President of
Commerce & Real Estate BG
Executive Vice President &
Head of Finance Dept.
President of Stainless Steel
BG
Fred Pan
C.C. Chen
Kevin Niu
President of Insulated Wire
& Cable BG
Jin-Renn Leu
President of Commodity BG
Josh Chia
Head of Accounting Dept.
Richard Wu
Head of Legal Department
Sherry Ho
M
a
n
a
g
e
r
s
and Head of Corporate
Governace
0
2,387,600
2,387,600
0.0357
※ This Table lists managers in active duty as of the end of 2020 and their summarized 2020 employee bonus for managers
approved by the Board of Directors.
※ After-tax net income refers to the after-tax net income of individual financial statement in 2020.
29
Corporate Governance Report
(4) Analysis of total remunerations to Directors, President, vice presidents etc. as a percentage of the
stand-alone after-tax net income in the last two years and description of the policy, standards and
packages of remunerations, procedure for making such decision and relation to business performance:
1. Analysis of total remunerations to Directors, President, vice presidents etc. as a percentage of the stand-alone
after-tax net income in the last two years:
Title
Director
President and Vice President
Total Remunerations as Percentage (%) of After-tax Net Income (Losses)
2020
2019
Company
1.31
0.61
Companies
in Consolidated
Financial Statements
1.31
0.61
Company
2.00
2.41
Companies
in Consolidated
Financial Statements
2.00
2.45
2. Description of the policy, standards and packages of remunerations, procedure for making such decision and
relation to business performance:
The Company's policy for remunerating its directors is formulated based on the Company Act and the
Company's Articles of Incorporation. The remuneration of directors for the current year shall be limited to an
amount not exceeding 1% of the current year's earnings and shall be paid in accordance with the Rules
Governing the Compensation of Directors and Functional Members of the Company. The Company's operating
strategy, profitability, future development and industry condition, as well as each director’s participation in
and contribution to the Company’s operation, have also been taken into account in order to give them
reasonable remuneration. The Compensation Committee then submits a proposal, which is passed at a board
meeting before the policy takes effect.
Remuneration policy toward President, vice presidents and equivalent managers is formulated in accordance
with the Company's Regulations for the Evaluation of Managerial Performance and Compensation and based
on operating strategy, profitability, performance and contribution to the Company. Prevailing market salary
level is also taken into account. The policy is submitted by the Compensation Committee and takes effect after
it is passed at a Boarding meeting.
The said principles may be adjusted based on economic conditions, the Company's future development, and
profitability and operating risks.
30
4. Corporate Governance Status
(1) Overview of Board of Directors Operation
The Board of Directors totally held 9 meetings in 2020.
1. The attendance records for Directors are as follows:
Title
Name
Attended in
Person
Attended by
Proxy
Chairman
Vice Chairman
Director
Director
Director
Director
Director
Director
Director
Independent
Director
Independent
Director
Independent
Director
Independent
Director
Independent
Director
Yu-Lon Chiao
Patricia Chiao
Yu-Cheng Chiao
Yu-Heng Chiao
Hui-Ming Cheng
Andrew Hsia
Wei-Shin Ma
Chin-Xin Investment Co., Ltd
Representative: Tung-Yi Chan
Chin-Xin Investment Co., Ltd
Representative: Pei-Ming
Chen
Ming-Ling Hsueh
King-Ling Du
Shiang-Chung Chen
Steve Ruey-Long Chen
Fu-Hsiung Hu
9
9
8
8
5
4
7
4
4
9
9
9
3
4
0
0
2
1
0
0
2
1
0
0
0
0
2
0
Attendance
Percentage
(%)
100%
100%
78%
89%
100%
100%
78%
Remarks
Note1
Note2
80%
Note1
100%
Note2
100%
100%
100%
60%
100%
Note1
Note2
Note 1: Directors Hui-Ming Cheng and Tung-Yi Chan and Independent Director Steve Ruey-Long Chen were
released from their position on May 29, 2020.
Note 2: Directors Andrew Hsia and Pei-Ming Chen and Independent Director Fu-Hsiung Hu were newly
appointed as the Company's directors of the 19th term.
2. The attendance records for Independent Directors are as follows:
18th Term
Chen, Steve
Ruey-Long
Ming-Ling
Hsueh
King-Ling Du
Shiang-Chung
Chen
18th Meeting
January 10,
2020
19th Meeting
February 27,
2020
: Attended in Person; ◎: Attended by Proxy; ×: Absent
21st Meeting
April 10,
2020
22nd Meeting
May 7,
2020
20th Meeting
March 20, 2020
◎
◎
31
Corporate Governance Report
19th Term
1st Meeting
May 29, 2020
2nd Meeting
August 4, 2020
3rd Meeting
November 13, 2020
4th Meeting
November 20,
2020
Ming-Ling
Hsueh
King-Ling Du
Shiang-Chung
Chen
Fu-Hsiung Hu
Other details that need to be recorded in meeting minutes:
1. In the event of the occurrence of any of the following scenarios with the operation of the Board of Directors,
the dates of meetings, session number, resolution, opinions of all Independent Directors and the Company's
subsequent action in response to these opinions shall be clearly stated:
(1) Matters and items stipulated in Article 14-3 of the Securities and Exchange Act.
Board of
Directors
Meeting
Content of Proposal and Resolution
Proposal:
Resolution:
Proposal:
18th Term
18th
Meeting
January 10,
2020
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
the CPA
Proposal for the replacement of CPAs due
to internal rotation mechanism of Deloitte
Taiwan, and the annual remuneration
firm and
payable
the
to
assessment of the
independence and
suitability of the CPAs.
Proposal passed.
Proposal to approve the capital injection
into a subsidiary of the Company, Walsin
Nickel Industrial Indonesia, for building a
nickel pig iron plant and a power plant at
PT Indonesia Morowali Industrial Park.
Proposal passed.
Proposal to purchase a two-year US$178.5
million corporate bond issued by Golden
Harbour International Pte., to start the
business of sourcing raw materials for
nickel pig iron and stainless steel.
Proposal passed.
lend US$250 million to a
Proposal to
subsidiary of the Company, Walsin Nickel
Industrial Indonesia.
Proposal passed.
Proposal to approve the loan of funds by
Walsing International Investment Co., Ltd.
and Walsin Lihwa Holdings Limited to the
Independent
Directors’
Opinion(s)
December 31, 2020
Independent
Directors
with
Recorded or
Written
Opposing or
Reserved
Opinion(s)
Company’s
Handling of
Independent
Directors’
Opinion(s)
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
32
Board of
Directors
Meeting
Content of Proposal and Resolution
Independent
Directors’
Opinion(s)
December 31, 2020
Independent
Directors
with
Recorded or
Written
Opposing or
Reserved
Opinion(s)
Company’s
Handling of
Independent
Directors’
Opinion(s)
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Recusal:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Recusal:
18th Term
19th
Meeting
February 27,
2020
held
bonuses
by Walsin
Investment Co., Ltd.
Company, in a total amount of US$582
million and RMB1,127 million.
Proposal passed.
Proposal to approve the sale of the real
Lihwa
property
(Changzhou)
to
Nanjing Walsin Property Management Co.
liquidation of Changzhou
the
and
Investment Co.
Proposal passed with certain revisions.
Proposal to approve the liquidation of the
Company's BVI holding company, Energy
Pilot Limited.
Proposal passed.
Proposal to review manager’s performance
and
2019
as
as well
compensation.
Proposal passed.
Advice on Chairman’s and Vice Chairman’s
2019 performance bonus.
Proposal passed.
Yu-Lon Chiao, Patricia Chiao
Advice on Company’s distributions for
employee
2019
remunerations.
Proposal passed.
Proposal to approve the change of the
Company's Chief Audit Executive.
Proposal passed.
Proposal
the Company's
Compensation Committee Charter and
Meeting Procedures.
Proposal passed.
Proposal
to prepare
management's reports on the
control system for 2019.
Proposal passed.
Proposal to amend the Company's Audit
Committee
and Meeting
Procedures.
Proposal passed.
Proposal to lift the non-competition ban
for the Company’s Directors of 19th term.
Proposal passed.
Ming-Ling Hsueh, King-Ling Du, Shiang-
Chung Chen, Yu-Lon Chiao, Yu-Cheng
Chiao,
the Company's
internal
to amend
director
Charter
and
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
33
Corporate Governance Report
Board of
Directors
Meeting
Content of Proposal and Resolution
Independent
Directors’
Opinion(s)
December 31, 2020
Independent
Directors
with
Recorded or
Written
Opposing or
Reserved
Opinion(s)
Company’s
Handling of
Independent
Directors’
Opinion(s)
Yu-Heng Chiao, Wei-Shin Ma, and Tung-Yi
Chan
Proposal to approve the investment of PT.
Walsin Lippo Industries in constructing a
medium and high voltage cable factory in
the amount of around US$27 million.
Due to re-plan schedule, all the directors
present and acting on behalf of the
directors agreed to replace the case after
consultation by the chairman.
Proposal to acquire shares in HannStar
in an amount not
Display Corporation
exceeding NTD540 million.
Proposal passed.
Wei-Shin Ma
Proposal to repurchase 40 million shares of
the Company's stock on the centralized
exchange market and to register the
cancellation of such shares within six
months from the date of repurchase.
Due to the rapid changes in the market,
this proposal has been postponed for
further discussion in the best interest of
the Company.
Proposal to approve the investment to be
made by a subsidiary of the Company,
Walsin Nickel
in
Industrial
building a nickel pig iron plant and a power
in the amount of
in
plant
US$350 million.
Proposal passed.
Proposal to lift the non-competition ban
for the Company’s Directors of 19th term.
Proposal passed.
Proposal
Procedures
Transactions.
Proposal passed.
Proposal to repurchase 40 million shares of
the Company's stock on the centralized
exchange market and to register the
cancellation of such shares within six
months from the date of repurchase.
Proposal passed.
In response to the reorganization of the
Board of Directors,
is proposed to
appoint four independent directors, Mr.
the Company's
Financial Derivatives
to amend
Indonesia,
Indonesia,
for
it
Proposal:
Resolution:
Proposal:
Resolution:
Recusal:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
18th Term
20th
Meeting
March 18,
2020
18th Term
21st Meeting
April 10,
2020
Resolution:
Proposal:
19th Term
2nd Meeting
August 4,
34
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
Board of
Directors
Meeting
2020
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
19th Term
2nd Meeting
August 4,
2020
Resolution:
Proposal:
Resolution:
Proposal:
19th Term
3rd Meeting
November
13, 2020
Content of Proposal and Resolution
Independent
Directors’
Opinion(s)
December 31, 2020
Independent
Directors
with
Recorded or
Written
Opposing or
Reserved
Opinion(s)
Company’s
Handling of
Independent
Directors’
Opinion(s)
to engage
the Company's
Ming-Ling Hsueh, Mr. King-Ling Du, Mr.
Shiang-Chung Chen and Mr. Fu-Hsiung Hu,
as members of
the Compensation
Committee of the Company of the fourth
term for the period from August 4, 2020 to
May 28, 2023 (the date of expiration of the
current term of the Board of Directors).
Proposal passed.
Proposal
to amend
Compensation Committee Charter.
Proposal passed.
the Company's
Proposal
Sustainable
committee
development
members of the second term in response
to the reorganization of the Company's
Board of Directors.
Proposal passed.
Proposal to amend the Company's internal
control system of financing cycle - internal
control principles of stock services.
Proposal passed.
Proposal to approve the loan of funds from
Walsin Lihwa (China) Investment Co., Ltd.
to Hangzhou Walsin Power Cable & Wire,
in the amount of RMB 80 million for the
period of one year.
Proposal passed.
Proposal to approve the loan of funds from
the Company to Walsin Nickel Industrial
Indonesia in the form of a US$250 million
three-year non-revolving facility and a
US$70 million one-year revolving facility.
Proposal passed.
Proposal to approve the change of the
Company's Head of Finance.
Proposal passed.
Proposal to repurchase 60 million shares of
the Company's stock on the centralized
exchange market and to register the
cancellation of such shares within six
months from the date of repurchase.
Proposal passed.
Proposal to formulate the Company's 2021
Audit Plan.
Proposal passed.
Proposal to amend the Company's Rules
from
for Suggestions and Complaints
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
None
35
Corporate Governance Report
Board of
Directors
Meeting
Content of Proposal and Resolution
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
19th Term
3rd Meeting
November
13, 2020
19th Term
4th Meeting
November
20, 2020
Resolution:
Proposal:
Resolution:
Related Parties.
Proposal passed.
Proposal to reduce the capital of Walsin
Specialty Steel Holding Co., Ltd. by US$54
million.
Proposal passed.
Proposal to the new loan of funds from
Walsin Info-Electric Inc. to the Company in
the form of a NT$130 million non-revolving
facility.
Proposal passed.
In order to establish a vertically integrated
cable smart base and logistics center, it is
proposed to establish a new low-voltage
wire and cable production
for
construction use and a three-dimensional
automatic warehouse at its Yangmei Plant,
and to build a factory and purchase
equipment.
Proposal passed.
Proposal to conduct a share swap by
issuing new shares as the consideration for
the assumption of newly issued shares of
TECO Electric and Machinery Co., Ltd.
Proposal passed.
line
Independent
Directors’
Opinion(s)
December 31, 2020
Independent
Directors
with
Recorded or
Written
Opposing or
Reserved
Opinion(s)
Company’s
Handling of
Independent
Directors’
Opinion(s)
None
None
None
None
None
None
None
None
None
None
None
None
(2) In addition to the foregoing, there were other matters to be resolved by directors board meetings about
which an independent director expressed objections or reservations that had been included in records or
stated in writing: Not applicable
2. Director recusals due to conflicts of interests totaled 3 times.
No.
1
Term/Meeting
Date
18th Term
18th Meeting
January 10, 2020
Name(s) of
Directors
Yu-Lon Chiao,
Patricia Chiao
Proposal
Advice on Chairman’s and Vice
Chairman’s 2019 performance
bonus
Reason for
Recusal
Personally
interested
December 31, 2020
Participated in
Vote or Not
Recused as
provided by
law
2
18th Term
19th Meeting
February 27, 2020
Yu-Lon Chiao,
Yu-Cheng Chiao,
Yu-Heng Chiao,
Wei-Shin Ma,
Tung-Yi Chan,
Ming-Ling
Hsueh,
King-Ling Du,
Shiang-Chung
Chen
36
to
non-
lift
Proposal
the
ban
competition
Company’s Directors according to
Article 209 of the Company Act
the
for
Personally
interested
Recused as
provided by
law
No.
Term/Meeting
Date
Name(s) of
Directors
3
18th Term
19th Meeting
February 27, 2020
Wei-Shin Ma
Proposal
Proposal to acquire shares
in
HannStar Display Corporation in
an amount not exceeding NTD540
million.
Reason for
Recusal
Participated in
Vote or Not
Personally
interested
Recused as
provided by
law
3. Frequency, period, scope, method, and items of self-evaluation of the Board of Directors:
Frequency
Period
Scope
Method
Item
2020/01/01
Once every year
~
2020/12/31
Board
Directors
of
2020/01/01
Once every year
~
2020/12/31
Functional
Committees
(including
Compensatio
n Committee,
Audit
Committee
and
Sustainable
development
committee)
Internal
self-
evaluation
of the Board
of Directors
Internal
self-
evaluation
of
functional
committees
the
1.
2.
Involvement in the operation of
the Company.
Improve the quality of Board
decisions.
3. Composition and structure of
the board of directors.
4.
5.
1.
Selection
Education of Directors.
and
Continuing
Internal control.
Involvement in the operation of
the Company.
2. Awareness of responsibilities of
the functional committees.
3.
Improve the quality of decision
making
functional
the
in
committees.
4. Composition and selection of
functional committee members.
5.
Internal control.
1. Understanding of the company's
objectives and tasks.
2. Awareness
of
directors'
responsibilities.
2020/01/01
Once every year
~
Each director
2020/12/31
Self or peer
performanc
e evaluation
of
board
members
3.
4.
Involvement in the operation of
the Company.
Internal
management
communication.
relationship
and
every
3
Once
years
2017/08/01
~
2018/07/31
of
Board
Directors and
each
functional
committee
Evaluation
by
external
organization
an
5. Professional
and
continuing
education of directors.
6.
Internal control.
Eight aspect of evaluation of the
Board of Directors: composition,
guidance, authorization, supervision,
communication, internal control and
risk management,
self-regulation,
and others.
4. Evaluation of achievement of enhancing the Board’s performance (e.g. establishing an Audit Committee and
increasing information transparency):
37
Corporate Governance Report
(1) Formulation of regulations related to the corporate governance: In addition to explicitly stating the powers
and duties of the Board of Directors in the company's articles of incorporation, the Company also follows
rules and regulations including the "Board of Directors Procedural Regulations", "Guidelines for the Ethical
Conduct of Directors and Supervisors", "Procedures for the Processing of Critical Internal Information",
"Corporate Governance Principles and Practice", "Corporate Management Integrity Principles", "Behavioral
Guidelines and Operation Procedures for Honest Practices", "Guidelines for the Ethical Conduct of
Employees", "Rules for Suggestions and Complaints from Related Parties", "Practical Guidelines for
Corporate Social Responsibility" and "Corporate Social Responsibility Policies" in order to strengthen
operations of the Board of Directors as well as corporate governance. In addition, in accordance with the
latest laws and regulations, the "Corporate Governance Best Practice Principles", "Procedures for Ethical
Management and Guidelines for Conduct", "Board of Directors Meeting Regulations", "Ethical Conduct
Guidelines for Directors of the Board and Managerial Officers", "Practical Guidelines for Corporate Social
Responsibility", "Rules for Suggestions and Complaints from Related Parties" and "Regulations for the
Evaluation of the Board of Directors' Performance" were amended and approved by the Board of Directors
in 2020.
(2) Evaluation of the Performance of the Board of Directors: To implement corporate governance and enhance
the Company's board functions, and to set forth performance objectives to improve the operation
efficiency of the board of directors, the Rules of Performance Evaluation of the Board of Directors (these
"Rules") were established pursuant to the Corporate Governance Best-Practice Principles for TWSE/TPEx
Listed Companies and shall apply to the Board of Directors, functional committee and individual directors.
These Rules were established on October 28, 2015, and the most recent amendment to them was
approved by the Board of Directors on November 13, 2020. Each agenda working group shall provide a
questionnaire for the board members to complete in each December and provide the completed
attachments and information related to performance evaluation for the board members' reference.
The overall performance self-evaluation of our Board of Directors should cover at least the following five
major aspects:
I. Regarding external evaluation, in November 2018, the Company appointed the Taiwan Corporate
Governance Association ("TCGA") to conduct an evaluation of the effectiveness of the Board of
Directors for the period from August 1, 2017 to July 31, 2018. The association and its executive
committee members had no business dealings with the Company and conduct such evaluation based
on eight aspects of evaluation of the Board of Directors,
including composition, guidance,
authorization, supervision, communication, internal control and risk management, self-regulation and
others, as well as on-site interviews with relevant members with reference to the implementation of
the 38 indicators provided by the Company. On November 28, 2018, TCGA issued an evaluation report
on the effectiveness of the Board of Directors. The Company's unit-in-charge reported the evaluation
results to the Board of Directors on January 21, 2019 and posted the same on the Company's website.
The implementations of the recommendations of the external evaluation institution in 2020 are as follows:
Recommendations of External Evaluation Institution
Implementations
Composition of the Board
of Directors
Establishment
Governance
Committee
of
Corporate
and Nominating
In June 2019, the Company set up
and appointed Sherry Ho, Head of
Legal Affairs, as Head of Corporate
Governance, to enhance corporate
governance and strengthen the
functions of
the Board of
Directors. In 2020, the Company
will execute the business of the
Secretary of the Board of Directors
38
Recommendations of External Evaluation Institution
Implementations
to
However,
corporate
strengthen
committee.
the
corporate
and
the
governance.
Company has not yet established a
nomination
Since,
according
corporate
governance blueprint announced
in 2020, the project will be the
governance
2021
evaluation
the
and
target,
competent authorities continue to
study
of
compulsorily establishing such a
body
listed
in the future for
companies, the establishment of a
nomination committee before the
next
is
advisable.
re-election
feasibility
director
the
Internal Control and Risk
Management
Designating a dedicated unit to
track and manage and report on
the Company's senior executive
training and succession plans
In respect of the executive training
and succession plans, Chairman
expresses and exchanges
ideas
with the Directors from time to
time, and discusses the succession
plans with them.
Board
Supporting System, etc.
Meeting
Orientation system designed for
new Directors
On May 26, 2020, the Board of
Directors of 19th was given a
briefing
Company's
business, operations and their
duties as a director.
the
on
Board Oversight
review
of
of
the
Periodic
developments
interested
parties for the Board to keep
abreast of and respond to
Stakeholders' opinions
in 2020
were collected and reported to
the Board of Directors on
November 13, 2020.
II. Annual internal evaluation for 2020:
The 2020 Board of Directors' performance self-evaluation results go as follows:
1. Board of Directors' overall average score 4.89 points (full score: 5 points)
2. 2Board members' overall average score 4.88 points (full score: 5 points).
In December 2020, the Company conducted an internal annual board performance evaluation of the board
of directors, individual board members and functional committees in accordance with the evaluation
indicators and evaluation procedures specified in these Rules, and compiled and scored the data after the
questionnaires were collected, and made recommendations for improvement in 2020. This year, the
Company has made recommendations for improvement in the level of Directors' participation in the
Company's operations, as well as the follow-ups on the recommendations made by an external evaluation
institution in 2018, both of which were consolidated and reported to the Compensation Committee on
January 13, 2021 and the Board of Directors' meeting on January 22, 2010, the details of which were
disclosed on the Company's website.
39
Corporate Governance Report
(3) Implementing the performance evaluation of the functional committees: In accordance with the
"Regulations for the Evaluation of the Performance of the Board of Directors (including Functional
Committees) and their Remunerations" formulated by the Compensation Committee based on the latest
version published by the Competent Authority, our functional committees' members in December every
year evaluate themselves by the assessment indicators to measure the corporate leadership strategic
directions and oversee the corporate operational performance in an effort to improve shareholders' long-
term value. The Company’s Regulations for the Evaluation of the Performance of the Board of Directors
was amended by the resolution of the board meeting dated May 6, 2019 and will be implemented in 2020.
The Company's Audit Committee, Compensation Committee, and Sustainable development committee
conducted their own evaluation in accordance with the evaluation indicators in December 2020, and the
Board of Directors reported the evaluation results on January 22, 2021 and disclosed them on the
Company's website.
(4) Actively participating in corporate governance: In recent years, the Company has actively participated in
the promotion of the corporate governance and the transparency in information disclosure. Walsin Lihwa
was listed as the top 5% outstanding companies by four consecutive times of Corporate Governance
Evaluation from 2017 to 2020. The Company will continue making efforts to maintain among the top with
respect to the Corporate Governance Evaluation Results. The Company not only will continue to strive to
actively participate in the corporate governance evaluation, but also has formed a project to improve
corporate governance matters and enhance corporate governance capabilities.
(5) Enhancing the board’s functions and decision-making quality: In order to bring into play the functions and
decision-making quality of the Board of Directors, our company regularly holds strategic meetings on a
quarterly basis to enable the directors to understand our financial and business conditions and the
formulation of major business strategies and the implementation of related plans. In addition, quarterly
operational meetings are also held to help directors understand the operational content through reporting
by operating units, so as to improve the performance of the Board of Directors. In the meantime, the
directors may provide their effective guidance out of their expertise and experience to the operating units
during such meetings.
(6) Heavy reliance on the independent directors’ functions: Authorizing independent directors to utilize their
own expertise and regularly participate in our company's investment assessment projects and matters
relevant to corporate governance. The Audit Committee was formally established by all independent
directors after the shareholders' meeting on May 26, 2017, and the Audit Committee of the second term
was formed by all independent directors on May 29, 2020; the Compensation Committee of the fourth
term was established on August 4, 2020, with all independent directors acting as its members. On
November 1, 2019, the Board of Directors resolved to establish the Sustainable development committee,
with the Chairman, Vice Chairman and all independent directors serving as its members. On August 4, 2020,
the Chairman, Vice Chairman and all independent directors were appointed as members of the Sustainable
development committee of the second term of the Company. These three functional committees continue
to assist the Board of Directors in its oversight responsibilities.
(7) Raising the transparency of corporate data: On the MOPS and our official website, we voluntarily disclose
the related law and regulations which we follow, the important resolutions adopted at Board meetings and
the relevant information to help shareholders understand our activities and to raise transparency in our
corporate information.
40
(II) Operation of the Audit Committee
1. The major matters reviewed by the Audit Committee include:
(1) Adoption of or amendment to the internal control system pursuant to Article 14-1 of the Securities and
Exchange Act.
(2) Assessment of the effectiveness of the internal control system.
(3) Adoption of or amendment to procedures for financial or operational actions of material significance, such
as acquisition or disposal of assets, derivatives trading, extension of loans to others, or endorsements or
guarantees for others, pursuant to Article 36-1 of the Securities and Exchange Act.
(4) Matters bearing on the personal interest of a director.
(5) Material asset or derivatives transactions.
(6) Material loans, endorsements, or provision of guarantees.
(7) The offering, issuance, or private placement of any equity-type securities.
(8) The engagement or dismissal of a CPA, or the compensation given thereto.
(9) The appointment or discharge of a financial, accounting, or internal auditing officer.
(10) Annual financial reports signed or sealed by the Chairman, manager and accounting officer.
(11) Any other material matter so required by the Company or the Competent Authority.
2. Audit Committee's Annual Work Summary:
(1) Agenda arrangement (for Audit Committee meetings and communication meetings)
(2) Handling matters related to the meeting of the Audit Committee in accordance with the law (meeting notice,
proceedings)
(3) Follow-ups and execution of improvements requested by the Audit Committee
(4) Providing company information required by independent directors to assist them in fully exercising their
powers
(5) Annual self-assessment of the Audit Committee
(6) Establishing and revising the organizational regulations and relevant operating procedures
(7) Announcement of relevant matters concerning the Audit Committee pursuant to law (organizational
regulations and operational status)
(8) Whether any employee, manager and director has entered into related-party transactions and possible
conflicts of interest in such transactions
(9) Suggestions and complaints from interested parties
(10) Management of exchange rate risks
(11) Information Security
(12) Work safety/environmental protection and legal compliance
3. The Audit Committee of the first term started on May 26, 2017 and ended on May 25, 2020. The meetings were
held a total of 6 times in 2020, and the attendance of the independent directors in 2020 is as follows:
Personally
Attended
Attended by
Proxy
Attendance
rate (%)
Name
Title
Remarks
6
Convener Ming-Ling Hsueh
4
Member
6
Member
Member
6
The Audit Committee of the second term started on May 29, 2020 and ended on May 28, 2023. The meetings
were held 5 times in 2020, and the attendance of the independent directors in 2020 is as follows:
Chen, Steve Ruey-Long
King-Ling Du
Shiang-Chung Chen
100%
100%
0
2
0
0
100%
67% Dismissed on May 25, 2020
Title
Name
Convener Ming-Ling Hsueh
Member
Member
Member
King-Ling Du
Shiang-Chung Chen
Fu-Hsiung Hu
Personally
Attended
Attended by
Proxy
Attendance
rate (%)
Remarks
5
5
5
5
0
0
0
0
100%
100%
100%
100% Newly appointed on May
25, 2020
41
Corporate Governance Report
4. Other matters that need to be recorded in meeting minutes:
(1) If any of the following circumstances occurs during the operation of the Audit Committee, the Board meeting
date, meeting number, the proposal contents, the resolution of the Audit Committee and our company's
handling of the Audit Committee's opinions shall be clearly described.
A. Items listed in Article 14-5 of the Securities and Exchange Act:
Audit
Committee
Meeting
Number and
Date
Board of
Directors
Meeting
Number and
Date
Proposals and Resolutions
December 31, 2020
Company’s
Handling of Audit
Committee
Member’s
Opinion
Proposal:
Approval for the Company’s 2020 annual
business plan.
Resolution: Proposal passed.
Proposal:
Proposal for the replacement of CPAs due to
internal rotation mechanism of Deloitte
remuneration
the annual
Taiwan, and
payable to the CPA firm and the assessment
of the independence and suitability of the
CPAs.
Resolution: Proposal passed.
Proposal:
Proposal to approve the capital injection into
a subsidiary of the Company, Walsin Nickel
Industrial Indonesia, for building a nickel pig
iron plant and a power plant at PT Walsin
Nickel Industrial Indonesia.
Proposal passed.
Proposal to purchase a two-year US$178.5
million corporate bond issued by Golden
Harbour
International Pte., to start the
business of sourcing raw materials for nickel
pig iron and stainless steel.
Proposal passed.
to
Proposal
lend US$250 million to a
subsidiary of the Company, Walsin Nickel
Industrial Indonesia.
Proposal passed.
Proposal to approve the loan of funds by
Walsing International Investment Co., Ltd.
and Walsin Lihwa Holdings Limited to the
in a total amount of US$582
Company,
million and RMB1,127 million.
Proposal passed.
Proposal to approve the sale of the real
property held by Walsin Lihwa (Changzhou)
Investment Co., Ltd. ("Changzhou Investment
Co.) to Nanjing Walsin Property Management
Co. and
liquidation of Changzhou
the
Investment Co.
Proposal passed.
Proposal to approve the liquidation of the
Company's BVI holding company, Energy Pilot
Limited.
Proposal passed.
1st Term
22nd Meeting
January 8, 2020
18th Term
18th Meeting
January 10,
2020
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
42
Directors
approved
proposal
unanimously.
Directors
approved
proposal
unanimously.
the
the
Directors
approved
proposal
unanimously.
the
Directors
approved
proposal
unanimously.
the
Directors
approved
proposal
unanimously.
Directors
approved
proposal
unanimously.
the
the
the
Directors
approved
proposal
unanimously. At
specific
conditions,
the
third parties have
first priority.
Directors
approved
proposal
unanimously.
the
Audit
Committee
Meeting
Number and
Date
Board of
Directors
Meeting
Number and
Date
Proposals and Resolutions
Company’s
Handling of Audit
Committee
Member’s
Opinion
Proposal:
Approval for the Company’s 2019 business
report, balance sheet, income statement,
statement of
in equity and
changes
statement of cash flows.
Directors
approved
proposal
unanimously.
the
Resolution: Proposal passed.
for
Proposal:
the
Company’s
Approval
2019
consolidated balance sheet, consolidated
income statement, consolidated statement
in equity and consolidated
of changes
statement of cash flows.
Directors
approved
proposal
unanimously.
the
1st Term
23rd Meeting
February 17,
2020
18th Term
19th Meeting
February 27,
2020
Resolution: Proposal passed.
Proposal:
Approval for the affiliates’ 2019 consolidated
business report and financial statements.
Resolution: Proposal passed.
Proposal:
Approval for the Company’s 2019 profit
distribution plan.
Resolution: Proposal passed.
Proposal:
Approval for the Company’s 2019 declaration
of internal control system.
Resolution: Proposal passed.
Proposal:
Resolution:
Proposal:
Resolution:
Recusal:
Proposal to amend the Company's Audit
Committee Charter and Meeting Procedures.
Proposal passed.
Proposal to lift the non-competition ban for
the Company’s Directors of 19th term.
Proposal passed.
Ming-Ling Hsueh, Juei-Lung Chen, King-Ling
Du, Shiang-Chung Chen recused themselves
respectively
Proposal:
Resolution:
Proposal to approve the
investment of
Walsin Lippo in constructing a medium and
high voltage cable factory in the amount of
around US$27 million.
Proposal passed.
the
the
the
the
Directors
approved
proposal
unanimously.
Directors
approved
proposal
unanimously.
Directors
approved
proposal
unanimously.
Directors
approved
proposal
unanimously.
Except Mr. Ming-
Ling Hsueh, Juei-
Lung Chen, King-
Ling Du,
and
Shiang-Chung
Chen
because
personally
interested, all the
other members
approved
the
proposal
unanimously.
Due
re-plan
to
schedule, all the
directors present
and acting on
behalf
the
directors agreed
the
to
replace
after
case
by
consultation
the chairman.
recused
of
of
43
Corporate Governance Report
Audit
Committee
Meeting
Number and
Date
Board of
Directors
Meeting
Number and
Date
1st Term
24th Meeting
February 27,
2020
18th Term
19th Meeting
February 27,
2020
Proposals and Resolutions
Proposal:
Resolution:
Proposal:
Resolution:
Approval for the affiliates’ 2018 consolidated
business report and financial statements.
Proposal passed.
Approval for the Company’s 2018 profit
distribution plan.
Proposal passed.
Proposal:
Resolution:
Approval for the Company’s 2018 declaration
of internal control system.
Proposal passed.
Proposal:
Resolution:
Proposal:
Resolution:
Recusal:
Proposal to amend the Company's Audit
Committee Charter and Meeting Procedures.
Proposal passed.
Proposal to lift the non-competition ban for
the Company’s Directors of 19th term.
Proposal passed.
Ming-Ling Hsueh, Steve Ruey-Long Chen,
King-Ling Du, and Shiang-Chung Chen
recused themselves respectively
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
1st Term
25th Meeting
March 18, 2020
18th Term
20th Meeting
March 18,
2020
1st Term
26th Meeting
April 10, 2020
18th Term
21st Meeting
April 10,
2020
Resolution:
Proposal:
Resolution:
44
Proposal to approve the investment of PT.
Walsin Lippo Industries ("Walsin Lippo") in
constructing a medium and high voltage
cable factory in the amount of around US$27
million.
Proposal passed.
Proposal to repurchase 40 million shares of
the Company's stock on the centralized
exchange market and
the
cancellation of such shares within six months
from the date of repurchase.
Proposal passed.
register
to
Proposal to approve the investment to be
made by a subsidiary of the Company, Walsin
Nickel Industrial Indonesia,
in building a
nickel pig iron plant and a power plant in
Indonesia, in the amount of US$350 million.
Proposal passed.
Proposal to repurchase 40 million shares of
the Company's stock on the centralized
exchange market and
the
cancellation of such shares within six months
from the date of repurchase.
Proposal passed.
register
to
Directors
approved
proposal
unanimously.
the
Company’s
Handling of Audit
Committee
Member’s
Opinion
Directors
approved
proposal
unanimously.
Directors
approved
proposal
unanimously.
Directors
approved
proposal
unanimously.
the
the
the
the
Directors
approved
proposal
unanimously.
Except that Mr.
Ming-Ling Hsueh,
Steve
Mr.
Ruey-Long Chen ,
Mr. King-Ling Du,
and Mr. Shiang-
Chung
Chen
recused
themselves
because they had
personal
a
interest
this
in
proposal, all the
directors
other
approved
the
proposal
unanimously.
Directors
approved
proposal
unanimously.
the
in
Due to the rapid
the
changes
this
market,
proposal
has
been postponed
for
further
discussion in the
best
interest of
the Company.
Directors
approved
proposal
unanimously.
the
Audit
Committee
Meeting
Number and
Date
Board of
Directors
Meeting
Number and
Date
Proposals and Resolutions
Proposal:
Resolution:
Proposal to lift the non-competition ban for
the Company’s Directors of 19th term.
Proposal passed.
2st Term
2nd Meeting
July 27, 2020
19th Term 2nd
Meeting
August 4,
2020
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
2st Term
3rd Meeting
August 4, 2020
19th Term 2nd
Meeting
August 4,
2020
Resolution:
amend
the
Financial
for
to
Proposal
Procedures
Transactions.
Proposal passed.
Company's
Derivatives
Proposal to amend the Company's internal
control system of financing cycle - internal
control principles of stock services.
Proposal passed.
Directors
approved
proposal
unanimously.
the
Proposal to approve the loan of funds from
Walsin Lihwa (China) Investment Co., Ltd. to
Hangzhou Walsin Power Cable & Wire, in the
amount of RMB 80 million for the period of
one year.
Proposal passed.
Proposal to approve the loan of funds from
the Company to Walsin Nickel Industrial
Indonesia in the form of a US$250 million
three-year non-revolving facility and a US$70
million one-year revolving facility.
Proposal passed.
Directors
approved
proposal
unanimously.
the
Directors
approved
proposal
unanimously.
the
Proposal to approve the change of the
Company's Head of Finance.
Proposal passed.
Proposal to repurchase 60 million shares of
the Company's stock on the centralized
the
exchange market and
cancellation of such shares within six months
from the date of repurchase.
Proposal passed.
register
to
Company’s
Handling of Audit
Committee
Member’s
Opinion
Directors
approved
proposal
unanimously.
Directors
approved
proposal
unanimously.
the
the
the
Directors
approved
proposal
unanimously.
Except that Ms.
Wei-Shin
Ma
recused
themselves
because she had
personal
a
interest
this
in
proposal, all the
directors
other
approved
the
proposal
unanimously.
Directors
approved
proposal
unanimously.
Directors
approved
proposal
unanimously.
the
the
Proposal:
Resolution:
Proposal to formulate the Company's 2021
Audit Plan.
Proposal passed.
Proposal to reduce the capital of Walsin
Specialty Steel Holding Co., Ltd. by US$54
million.
Proposal passed.
2st Term
3rd Meeting
August 4, 2020
19th Term 2nd
Meeting
August
2020
4,
Proposal:
Resolution:
Proposal:
Resolution:
Proposal to the new loan of funds from
Walsin Info-Electric Inc. to the Company in
the form of a NT$130 million non-revolving
facility.
Proposal passed.
Directors
approved
proposal
unanimously.
the
45
Corporate Governance Report
Audit
Committee
Meeting
Number and
Date
Board of
Directors
Meeting
Number and
Date
2st Term
4th Meeting
October 27,
2020
19th Term
3rd Meeting
November
13, 2020
Proposals and Resolutions
Proposal:
In order to establish a vertically integrated
cable smart base and logistics center, it is
proposed to establish a new low-voltage wire
and cable production line for construction
use and a three-dimensional automatic
warehouse at its Yangmei Plant, and to build
a factory and purchase equipment.
Proposal passed.
Company’s
Handling of Audit
Committee
Member’s
Opinion
Directors
approved
proposal
unanimously.
the
2st Term
5th Meeting
November 20,
2020
19th Term
4th Meeting
November
20, 2020
Resolution:
Proposal:
Resolution:
Proposal to conduct a share swap by issuing
new shares as the consideration for the
assumption of newly issued shares of TECO
Electric and Machinery Co., Ltd.
Proposal passed.
Directors
approved
proposal
unanimously.
the
B. Except for the foregoing items, the items that were not approved by the Audit Committee but were
resolved by more than two-thirds of all directors: No such situation.
(2) Independent directors recusing themselves from conflicts of interest:
No.
Term/Meeting
Date
Name
Proposal
1
2
1st Term
23rd Meeting
February 17,
2020
1st Term
24th Meeting
February 17,
2020
Ming-Ling
Hsueh, Juei-
Lung Chen,
King-Ling
Du, Shiang-
Chung Chen
Ming-Ling
Hsueh, King-
Ling Du,
Shiang-
Chung Chen
Approval for lifting the non-
competition ban for the
Company’s Directors
according to Article 209 of
the Company Act.
Approval for lifting the non-
competition ban for the
Company’s Directors
according to Article 209 of
the Company Act.
Reason for
Recusal
December 31, 2020
Participated in
Vote or Not
Personally
interested
Recused as
provided by
law
Personally
interested
Recused as
provided by
law
(3) Communication between independent directors, the chief internal auditor and CPAs (which should
include major events, methods, results, etc. as regards our Company's financial and business
conditions):
A. Communication policy between independent directors, chief internal auditor and CPAs:
(A) The CPAs are invited to attend Audit Committee meetings at least twice a year and to report to
the Audit Committee on the review or audit results of our Company’s and its affiliates’ financial
statements and the internal control audit status. The CPA shall fully communicate any material
adjustments to entries or any amendments to laws and regulations.
(B) If necessary, a communication meeting may be called at any time with the CPAs.
(C) The chief internal auditor shall meet with the independent directors regularly in Audit
Committee meetings at least once a quarter to report on the internal audit implementation of
our Company and the internal control operations. In case of major irregularities, the meeting
may be called at any time.
(D) The convener of the Audit Committee shall discuss the internal audit operation with the chief
internal auditor every quarter non-periodically aside from the above regular meetings.
46
B. Summary of previous communications between independent directors and CPAs for 2020:
Date
Independent directors have good communication with CPAs.
Directors’
Recommendation
None.
Communication Highlights
Audit
Committee
Meeting
2020/1/8
The independent directors evaluate
and discuss the annual
compensation of the CPAs and the
independence and suitability
thereof.
Audit
Committee
Meeting
2020/2/17
The CPAs have provided a
description of the key audits of the
stand-alone and consolidated
financial statements for the year
2019 and the results of the audit.
Audit
Committee
Meeting
2020/7/27
The CPAs provide an explanation of
the audit results of the
consolidated financial statements
for the second quarter of 2020.
None.
None.
Communication
Meeting
2020/12/9
1. The CPAs explained the scope,
method and discovery of the
annual audit for 2020 and
discussed with the Audit
Committee members on the key
audit matters.
2. The independent directors
assessed and discussed the
independence and competency
of the CPAs.
1. Directors
requested the
CPAs to
communicate
with the
internal auditor
about the
internal control
related issues.
2. Directors
requested the
CPAs to provide
updates on
significant legal
changes.
Execution Result
The annual appointment and
evaluation of the CPAs was
approved by the Audit Committee
and proposed for discussion at
the 18th meeting of the Board of
Directors of 18th term on January
10, 2020.
The stand-alone and consolidated
financial statements for the year
2019 were approved by the Audit
Committee and submitted for
discussion at the 19th meeting of
the Board of Directors of 18th
term on February 27, 2020.
The consolidated financial
statements for the second
quarter of 2020 were approved by
the Audit Committee and
reported to the second meeting
of the Board of Directors of 19th
term on August 4, 2020.
1. Key audit matters for the 2020
financial statements were
confirmed.
2. The engagement and
assessment of the CPAs was
submitted to the sixth
meeting of the Audit
Committee of second term on
January 13, 2021 for
discussion.
47
Corporate Governance Report
C. Summary of previous communications between independent directors and the chief internal auditor
for 2020:
Date
Communication Highlights
Audit
Committee
Meeting
2020/1/8
1.The chief audit reported to
the independent directors
on "communication
between the Independent
Directors and the chief
internal auditor for 2019".
Directors’
Recommendation
None.
Execution Result
The communication has been
disclosed on the Company's
website.
1.Compliance in each
1. Any violation found by
Audit
Committee
Meeting
2019/2/17
1.The implementation of the
audit for the fourth quarter
of 2019 was reported.
2.Regular review of the
Company's risk
management policies and
procedures on a regular
basis.
department should be
factored in the
performance assessment
of relevant department
heads, with relevant
disciplinary actions being
taken accordingly in case
of any repeated and/or
severe violations.
2.Ethical business
management practices
should be communicated
to our suppliers on a
regular basis to establish
a job rotation
mechanism.
3.Risks management should
be incorporated into
audit planning, with the
annual audit report being
submitted to the Audit
Committee and the
board of directors.
None.
Change of the Chief Audit
Executive.
The implementation of the
audit for the first quarter of
2020 was reported.
None.
The implementation of the
audit for the first quarter of
2020 was reported.
1. Compliance with the
standard operating
procedures should be
strictly demanded.
2. Work safety
internal auditors should be
factored in the performance
assessment of the individual
department heads, with
necessary disciplinary
actions being taken
accordingly.
2. The Business Integrity
Center should draft an
annual plan to continue
promoting business
integrity to our suppliers
and the avoidance of
conflicts of interest
associated with sensitive
positions.
3.Risk assessment results have
been incorporated into the
annual audit plan and will
be reported to the board of
directors.
The proposal to change the
Chief Audit Executive has been
passed by the Audit
Committee and submitted to
the board of directors for
approval.
Report on audit
implementation in the 1st
quarter of 2020 has been
passed by the Audit
Committee and reported to
the board of directors.
1. Effective inspection and
removal of potential safety
hazards on a regular basis
and regular follow-ups for
improvement.
management operations
should be reinforced
and implemented
2. Drafting specific rules for
disciplinary actions to
clarify the management
Audit
Committee
Meeting
2020/2/27
Audit
Committee
Meeting
2020/4/30
Audit
Committee
Meeting
2020/7/27
48
Date
Communication Highlights
Directors’
Recommendation
throughout plant sites.
1. The implementation of the
audit for the third quarter
of 2020 was reported.
1. None.
2. None.
3. None.
2. Discussion of 2021
annual audit plan.
3. Revision of Guidelines
for Suggestions and
Complaints by
Stakeholders.
Audit
Committee
Meeting
2020/10/27
Execution Result
responsibilities.
3. Establishment of the
consciousness of work
safety disciplines among all
employees.
1. Report on audit
implementation in the 3rd
quarter of 2020 has been
passed by the Audit
Committee and reported
to the board of directors.
2. 2021 annual audit plan has
been passed by the Audit
Committee and submitted
to the board of directors
for discussion.
3. Guidelines for Suggestions
and Complaints by
Stakeholders have been
passed by the Audit
Committee and submitted
to the board of directors
for discussion.
49
Corporate Governance Report
(3) Differences between our corporate governance and the Corporate Governance Best-Practice Principles
for TWSE- and TPEx-listed Companies and reason(s):
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
and Reason(s)
In line with the
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
In line with the
Corporate
Governance Best-
Practice Principles
for TWSE- and
TPEx-listed
Companies.
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
1. Has the company set and
Yes
disclosed the principles for
practicing corporate
governance according to the
Corporate Governance Best-
Practice Principles for TWSE-
TPEx-listed Companies?
2. The Company's ownership
structure and shareholders’
equity
(1) Has the company
Yes
implemented a set of
internal procedures to
handle shareholders'
suggestions, queries,
disputes and litigations?
The Company has formulated the Corporate Governance
Principles and Practice according to the "Corporate
Governance Best-Practice Principles for TWSE- TPEx-listed
Companies", which were amended as approved by the
Board of Directors in 2020 and were disclosed on the
Company's website.
https://www.walsin.com/walsin/userfiles/file/rule09_
TC20200428.pdf
(1) Our Shareholders Service & Contact Office is in charge of
handling various shareholder recommendations,
queries and disputes. The Company also provides
related contact details on the Company's website and
in the annual report and has set up a stakeholder
mailbox to collect stakeholders' questions and
suggestions.
(2) Has the company had a
Yes
(2) The Company periodically discloses the list of ultimate
controllers of its principal shareholders pursuant to the
laws and regulations.
list of major
shareholders who
actually control the
company or a list of
ultimate controller of
such shareholders?
(3) Has the company
Yes
(3) 1. The Company has drafted rules governing the
established and
implemented risk
control/management
and firewall mechanisms
between the company
and its affiliated firms?
(4) Has the company set
Yes
internal regulations that
prohibit the company's
personnel from taking
supervision of its subsidiaries, which have been
approved by the Board.
2. All of the Company's affiliates are subsidiaries; the
Company directly or indirectly retains at least 50% of
their shares. Business dealings with affiliates are
treated as transactions with third parties.
3. The Company has drawn up rigorous rules governing
the lending, the endorsement/ guarantees as well as
the management of disposal/acquisition of assets
and derivatives transactions to/for/with its affiliates.
(4) In order to establish an effective handling and disclosure
mechanism for major internal information processing
operations, so that unauthorized information leakage
can be avoided, consistency and accuracy of
50
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
and Reason(s)
advantage of
information that has not
been disclosed to the
public to purchase or sell
securities?
information disclosed by the Company to the public
can be maintained and insider trading can be
prevented, the Company has established the
"Procedures for Major Internal Information Processing
Operations," for observation by all. In addition, the
Company has made available copies of such
procedures to the Company's Directors, incorporated
them in the Company's internal regulations and
uploaded an electronic copy to the Company's
electronic bulletin board for the perusal by all
managerial officers and employees at any time. The
Company's Directors' and Managerial Officers' Code of
Ethical Conduct was amended on August 4, 2020. Such
codes are regulations pertaining to the prohibition of
insider trading pursuant to the Company's internal
regulations and the Securities and Exchange Act. These
codes are incorporated in the Company's internal
regulations and uploaded as an electronic copy to the
Company's electronic bulletin board for the perusal by
relevant personnel.
In December 2020, the Company conducted
educational training and awareness-raising for
directors and managers (and other managers above
such levels) on "education on insider trading
prevention", which strengthened directors' and
managers' compliance with the regulations prohibiting
insider trading; in addition, some educational and
awareness-raising articles on compliance with the
regulations prohibiting insider trading were published
on the Company's internal education and training
platform "Walsin Liwha College", so that all managers
may read and understand information related to
ethical management. Such information has been
disclosed on the Company's website.
3. The composition and duties
of the Board
(1) Has the Board of
Yes
Directors devised a plan
for a more diverse
composition of the
Board? If so, has the plan
been implemented?
(1) The Company's "Corporate Governance Guidelines and
Practices" already includes clear guidelines for
diversifying the Board of Directors. When the Company
re-elected its board members in 2020, it followed this
principle of diversity and elected not only
shareholders, but also industry elites and
financial/accounting experts. In order to promote and
realize gender equality, increase the number of
In line with the
Corporate
Governance Best-
Practice Principles
for TWSE- and
TPEx-listed
Companies.
51
Corporate Governance Report
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
and Reason(s)
women participating in the decision-making process,
as well as to enhance the composition of the Board of
Directors, we also have women on our Board of
Directors.
The Company has a total of 11 Directors, including 4
Independent Directors (36%). Independent Directors
were re-elected for fewer than 3 terms. Among the
Directors, 4 are aged 65 years and older, 5 are aged 55
to 64, and 2 are under 55 years old. In order to
implement Taiwan's gender equality policy, increase
women's participation in decision-making and improve
the structure of the Board of Directors, the Company's
Board of Directors also includes two female directors
(18%).
In terms of the Company's board members, one of
whom, Director Mr. Andrew Hsia, comes from the
diplomatic system, has an international perspective
and has a good grasp of the Southeast Asian markets,
and therefore may fully assist the Company in making
relevant investment decisions. There are two female
members on the board; besides, Director Wei-Shin Ma
specializes in technological leadership, operational
judgment and operational management; Director
Patricia Chiao specializes in operational management,
investment judgment and human resources.
Furthermore, all of the Company's Independent
Directors have industry knowledge and international
market perspectives; among them, Ming-Ling Hsueh,
specializes in finance, accounting and corporate
governance; in addition to his financial and securities
trading expertise, Fu-Hsiung Hu has a strong talent for
information technology; King-Ling Du is familiar with
the Company's stainless steel industry and its patterns,
and has participated in important investment projects
and provided important advice on investment
decisions; Shiang-Chung Chen specializes in
technological leadership and is familiar with the
Company's stainless steel industry, and provided
industry-related decision-making advice.
The Company attaches importance to the diversity of
the composition of the Board of Directors. The target
52
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
and Reason(s)
of more than 15% of directorships being held by
women is currently 18%; therefore, the
implementation thereof exceeds the target. The target
number of independent directors is three in
accordance with the law; however, the Company
values corporate governance and thus has four
independent directors (one in excess of the statutory
target), accounting for 36% of all directors of the
Company.
The elite directors of the Company were selected from
the industry to participate in major investment
projects related to the Company's business, assist the
Company's financial, accounting and corporate
governance businesses according to their expertise,
and assist the Company in making favorable decisions
through their diverse experience, which gives rise to
extensive and professional advice. The average age
target for future re-elections of directors shall be
reduced by 5% of the average age of the original
directors when the Company's Board of Directors was
formed, and the Company moves towards a younger
age target for future directors. In the future, the
Company will continue to invite suitable candidates to
join the Board of Directors based on the above
objectives in order to strengthen the balance of the
Board of Directors in light of the Company's
development strategy and changes in the internal and
external environment.
Diversification of the Board of Directors' members has
been implemented as shown in Note 3.
Yes
(2) In addition to
establishing a
Compensation
Committee and an Audit
Committee, which are
required by law, is the
company willing to also
voluntarily establish
other types of functional
committees?
(2) In addition to the committee established according to
the laws, the Company’s 7th session of the 17th Board
of Directors on April 29, 2015 further set up the CSR
Committee and the Integrity Management Committee.
On November 1, 2019, the 17th meeting of the Board
of Directors of the 18th term resolved to establish the
Sustainable Development Committee, in which the
Chairman, Vice-Chairman and all Independent
Directors act as members, and to transform the
committees on corporate social responsibility, ethical
management, environmental safety and health
management, green operations, customer service and
53
Corporate Governance Report
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
and Reason(s)
(3) Has the company
Yes
established methods for
appraising the
performance of the
Board of Directors as
well as actual procedures
for executing the
appraisals? If so, has the
company executed
appraisals of the
performance of the
Board annually? Are the
results of the
performance evaluations
reported to the Board of
Directors and used as a
reference for individual
directors' remuneration
and nomination for
reappointment?
suppliers-employee relations and social care into a
promotion center, which is audited, monitored and
tracked by the Sustainable Development Committee.
(3) To improve our corporate governance, on October 28,
2015, the 10th session of the 17th Board of Directors
approved the proposal of the Compensation
Committee to amend and divide the "Regulations
Governing the Performance Appraisal and
Remunerations for the Board of Directors (Including
Functional Committees)" into the "Regulations for the
Board of Directors' Performance Appraisal" and the
"Regulations for the Payment of Remunerations to
Directors and Members of Functional Committees".
In accordance with the latest regulations, the
Company's Board members in December of each year
evaluate their own performance based on established
indicators regarding the leadership in strategy
direction and supervision of the Company's
operation/management in an effort to improve
shareholders' long-term value.
In accordance with the "Regulations for Board
Performance Evaluation " amended by the Board of
Directors in 2018, the Company engaged the Taiwan
Corporate Governance Association to evaluate the
effectiveness of the Company's Board of Directors, and
the Company obtained professional, objective
evaluation results and suggestions through the
guidance of, and idea exchanges with, the evaluation
members. Such results and suggestions then have
been reported to the Board of Directors on January 21,
2019, and used as a reference in the compensation of
individual directors and nominations for
reappointment.
In accordance with the latest laws and regulations, the
Company amended its "Regulations for Board
Performance Evaluation" at the 3rd meeting of the
Board of Directors of the 19th term on November 13,
2020. The Board of Directors, Audit Committee and
Compensation Committee also conducted their own
evaluation in December 2020 and reported to the
Board of Directors on January 22, 2021. Subsequently,
the Sustainable Development Committee conducted
its own evaluation in February 2020, which will be
54
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
and Reason(s)
published on the Company's website after being
reported to the Board of Directors, and the results of
these evaluations will be used as a reference in
individual directors' compensation and nominations
for reappointment.
(4) Has the company
Yes
(4) Before we appoint a new CPA annually, its
periodically evaluated
the level of
independence of the
CPA?
4. Has the TWSE- or TPEx-listed
Yes
company designated a
proper number of
competent staff in charge of
the corporate governance-
related affairs (including but
not limited to providing
information for the Directors
and Supervisors to execute
their duties, assisting the
Directors and Supervisors
with legal compliance,
handling the affairs related
to the Board meetings and
the Shareholders Meeting as
prescribed by law,
preparing the minutes of the
Board meetings and the
Shareholders Meeting, etc.)?
independence and competency shall be examined by
the Audit Committee and Board of Directors for
approval by resolution. In addition, we request the
CPA to provide an "Impartiality and Independence
Statement" each year. We have to confirm that except
for the expenses paid to the CPA for certifying our
financial statements and for handling certain financial,
tax affairs, we have no other business dealings with
the CPA and that their family members have not
violated the independence requirements. Only after
such confirmation, will we consider the CPA's
appointment and the relevant expenses.
Items for assessment of the CPA's independence are
shown as Note 4.
The Company appointed a Head of Corporate Governance
as resolved by the Board of Directors on June 12, 2019. The
key responsibilities of the Head of Corporate Governance
include the meeting affairs in connection with board
meetings, preparation of such meetings' minutes,
assistance for Directors with the onboarding and continuing
education, provision of information required for the
business execution by Directors, assistance for Directors
with legal compliance and other matters set out in the
Articles of Incorporation of the Company or contracts. The
Company has also designated the Head of Legal Affairs, Ms.
Sherry Ho, as the Head of Corporate Governance to
enhance corporate governance and strengthen the
functions of the Board of Directors. Ms. Sherry Ho has more
than three years of experience as a legal director of a public
company and is qualified to be the Head of Corporate
Governance.
On January 22, 2021, the Board of Directors approved the
change of the Head of Corporate Governance, appointing
the Vice President of the Company, Ms. Hueiping Lo, as the
Head of Corporate Governance, and dismissing the Head of
Legal Affairs, Ms. Sherry Ho, as the Head of Corporate
In line with the
Corporate
Governance Best-
Practice Principles
for TWSE- and
TPEx-listed
Companies.
55
Corporate Governance Report
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
and Reason(s)
governance. Vice President Hueiping Lo has more than
three years of experience as a financial officer of a public
company and meets the statutory qualifications as the head
of corporate governance.
On June 12, 2019, the Company's Board of Directors also
approved the "Standard Operating Procedures for Handling
Directors' Requests", through the establishment of which
the Directors have appropriate operating procedures for
handling information necessary for the performance of
their business.
The business execution for the year 2020 are explained as
follows:
i. Arranging board meetings (board, strategy and
ii.
operation meetings).
Coordinating the reporting time and content of each
committee (the Corporate Social Responsibility and
Integrity Management Committee).
iii. Handling matters related to the meetings of the
board in accordance with law:
Notifying the Direcotrs of the proposed board
meeting agenda 7 days in advance, calling the
meeting, providing the meeting information, and
preparing the minutes of the board meeting within
20 days after the meeting.
Following up on and executing the matters that need
improvement as requested by the Board of
Directors.
Providing company information required by the
Directors to assist them in the full exercise of their
authority.
Self-assessment of the Directors and the Board of
Directors.
iv.
v.
vi.
vii. Assisting directors and independent directors in
drawing up annual advanced study plans and
arranging advanced study courses based on the
characteristics of the Company's industry and the
background of directors' education and experiences
(Note 6).
viii. Giving regular feedback to interested parties as
required by law and corporate governance
ix. Operating the Corporate Governance Team and
conducting corporate governance evaluations.
56
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
and Reason(s)
Yes
5. Has the company established
channels for communicating
with interested parties
(including but not limited to
shareholders, employees,
customers, suppliers, etc.),
set up a dedicated interested
parties area on the
company's website, as well
as appropriately responded
to important CSR issues that
interested parties are
concerned about?
x. Assisting Directors and each Committee with legal
compliance: Reporting to the Board of Directors,
independent directors and the Audit Committee on
the governance and operation of the Company, and
confirming whether the convening of the Company's
shareholders' meeting and the Board of Directors
meeting are in compliance with the relevant laws
and corporate governance rules.
xi. Directors' legal registration and reporting matters as
xii.
well as the management of corporate-governance-
related disclosure.
The members of the Board of Directors and
functional committees are provided at the time of
their inauguration and are regularly updated on the
latest legal and regulatory developments in the field
of the Company's operations and corporate
governance.
1. The Company has been maintaining open communication
channels with interested parties that include customers,
shareholders, banks it has business dealings with,
employees, suppliers, communities, competent
authorities, or persons so connected with the Company.
Communication channels can be found on the
Company's internal and external websites as well as in its
annual reports, to facilitate understanding of the
Company's CSR issues that interested parties are
concerned about, so that appropriate responses can be
made.
2. The Company has established, and the Board of Directors
has amended in 2020, the "Procedures for Interested
Parties to Submit Complaints and Recommendations to
the Supervisory Unit", through which interested parties
can communicate with the Company’s supervisory unit
directly, propose constructive advice and file complaints.
The Company has a contact channel on its website
designated to stakeholders; a mailbox also exists on the
employee portal site, thus providing internal and
external personnel with a means to make suggestions
and file complaints to the Company. Information
received shall be handled by the Auditing Office.
3. The Company regularly reports to the Board of Directors
on its communications with various interested parties on
an annual basis starting from 2019. The communications
in 2020 have been reported to the Board of Directors at
In line with the
Corporate
Governance Best-
Practice Principles
for TWSE- and
TPEx-listed
Companies.
57
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
and Reason(s)
Such matters are
handled by the
Company’s
shareholder
service. Matters
related to
shareholders’
meetings are
conducted in
accordance with
the Company’s
Articles of
Incorporation and
laws and
regulations, so that
shareholders’
meetings are
convened in a legal,
valid and safe
fashion.
In line with the
Corporate
Governance Best-
Practice Principles
for TWSE- and
TPEx-listed
Companies.
Corporate Governance Report
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
the board meeting on November 13, 2020 Details of both
communications were disclosed on the Company's
website:
https://www.walsin.com/walsin/userfiles/file/Sustainabl
eDevelopmentConnect_2020v2_pdf.pdf
No The Company has handled such affairs by itself since March
1993.
6. Has the company appointed
a professional shareholders
service agency to handle
affairs related to the
Shareholders Meeting?
7. Information disclosure
(1) Has the company
established a corporate
website to disclose
information regarding
the company's financial,
business and corporate
governance statuses?
(2) Has the company adopted
other ways to disclose
information (e.g.,
maintaining an English-
language website,
appointing responsible
people to handle
corporate information
collection and disclosure,
appointing
spokespersons,
Yes
(1) Please visit Walsin Lihwa Corporation's Chinese/English
website: http: //www.walsin.com
Yes
(2) The Company has a dedicated department for
collecting its information and periodically updating its
website. The Company has implemented one-
spokesperson policy, with one or more deputy
spokespersons. It has also established the "Procedures
for Major Internal Information Processing Operations"
that requires management as well as employees to
properly keep financial as well as business secrets. We
also require that personnel follow the "Corporate
Governance Principles and Practices". Any change of
our spokesperson or deputy spokespersons shall
58
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
and Reason(s)
webcasting investor’s
conferences, etc.)?
(3) Does the Company
Yes
announce and report its
annual financial report
within two months after
the end of the fiscal
year, and announce and
report its first, second
and third quarter
financial report and
operations for each
month well in advance of
the required deadline?
(3) 1.
immediately be made public.
The Company's website regularly discloses major
announcements, transactions with key stakeholders
and investors conferences at:
http://www.walsin.com/walsin/page.do?menuId=65
In order for investors to obtain adequate and
accurate financial information in a timely manner,
the Company's annual financial report is
submitted to the Audit Committee and the Board
of Directors for approval within two months after
the end of the year, and the financial report is
announced on the Market Observation Post
System on the date of approval by the Board of
Directors; the financial report for the first, second
and third quarter is submitted to the Audit
Committee and the Board of Directors for
approval one week before the statutory
announcement deadline, and the financial report
is announced on the Market Observation Post
System on the date of report to the Board of
Directors.
8. Has the company had other
information that is helpful
for understanding the status
of corporate governance
(including but not limited to
employee rights and
interests, investor relations,
supplier relations, rights of
interested parties, further
education sought by
Directors and Supervisors,
implementation of risk
management policies and
risk evaluation standards,
implementation of customer
policies, the taking out of
liability insurance for
Directors and Supervisors)?
2. The Company's operations for each month are also
fully disclosed on the Company's website and the
Market Observation Post System before the
statutory deadline.
Yes
1. Please read "(5) Implementation of Corporate Social
Responsibility" of this year's Annual Report for
information concerning the Company's systems,
measures, implementation of employee rights and
interests, investor relations, supplier relations and rights
of interested parties.
2. Please read "III. Corporate Governance Report-4. Status
of Corporate Governance (8) Other important
information helpful for improving understanding of the
governance of the company," "VII. Financial Condition
and Review and Analysis of Financial Performance and
Risks 6. Risk matters should be analyzed and assessed for
the most recent year and up to the date of printing of
the annual report as follows," and "III. Corporate
Governance Report- 4. Status of Corporate Governance
(6) Fulfillment of ethical management and differences
between our ethical management and the Ethical
Corporate Management Best Practice Principles for
TWSE/TPEx Listed Companies and reason(s)
In line with the
Corporate
Governance Best-
Practice Principles
for TWSE- and
TPEx-listed
Companies.
59
Corporate Governance Report
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE- TPEx-
listed Companies
and Reason(s)
9. With respect to the results of the annual Corporate Governance Evaluation most recently issued by the Corporate
Governance Center of Taiwan Stock Exchange, please describe the improvements and provide priority and measures to
enhance those matters that have not yet been improved.
1. With respect to the 2020 Corporate Governance Evaluation results, our improvements in 2021 are as follows:
Appointed a Head of Corporate Governance .Quarterly institutional investor meetings were held to increase the level
of information disclosure and certification of annual carbon dioxide or other greenhouse gas emissions.
2. Matters to be prioritized and measures: Strengthen the certainty of the meeting date of the board of directors to
ensure the financial report disclosure schedule and enhance information transparency.
Note 1: The Company shall provide explanations in the summary description box, regardless of whether actual governance
is ticked "Yes" or "No."
Note 2: The corporate governance self-evaluation report mentioned here refers to the corporate governance evaluation
conducted and explained by the company itself and is a report on how the company enforces corporate governance.
Note 3: Diversification of the Board of Directors' members has been implemented as follows.
Diversification items
I
n
t
e
r
n
a
t
i
o
n
a
l
C
o
m
m
e
r
c
e
a
n
d
T
r
a
d
e
P
r
o
c
u
r
e
m
e
n
t
e
n
v
i
r
o
n
m
e
n
t
a
l
p
r
o
t
e
c
t
i
o
n
l
R
e
n
e
w
a
b
e
e
n
e
r
g
y
a
n
d
I
n
f
o
r
m
a
t
i
o
n
t
e
c
h
n
o
o
g
y
l
Title
Name
Gender
Chairman
Vice Chairman
Director
Director
Director
Director
Director
Independent
Director
Independent
Director
Independent
Director
Independent
Director
Yu-Lon Chiao
Patricia Chiao
Yu-Cheng Chiao
Yu-Heng Chiao
Andrew Hsia
Pei-Ming Chen
Wei-Shin Ma
Ming-Ling Hsueh
King-Ling Du
Shiang-Chung Chen
Fu-Hsiung Hu
M
F
M
M
M
M
F
M
M
M
M
m
a
n
a
g
e
m
e
n
t
i
A
d
m
n
i
s
t
r
a
t
i
v
e
I
n
d
u
s
t
r
y
k
n
o
w
e
d
g
e
l
E
c
o
n
o
m
i
c
a
n
d
f
i
n
a
n
c
i
a
l
l
a
w
I
n
d
u
s
t
r
i
a
l
t
e
c
h
n
o
o
g
y
l
M
a
r
k
e
t
i
n
g
60
Note 4: Items for assessment of the CPA's independence
Appraisal Items
1. The CPA and/or any of his/her family members has/have no direct or indirect significant
financial interest in the Company.
2. The CPA and/or any of his/her family members has/have no financing or guarantee act with
the Company or its directors.
3. The CPA and/or any of his/her family members has/have no commercial relations with the
Company, its directors and managers, which affects the CPA's independence.
4. Currently or in the most recent two years, the CPA does/did not hold any posts in the
Company, such as the director, manager or any post which significantly influences the auditing
work, neither did company promise its CPA any foregoing post.
5. During the audit period, no family member of the CPA held the posts in the Company, such as
the director, managers or any post which directly and significantly influences the audit work.
6. During the audit period, none of the CPA's direct blood relations, direct relations by marriage,
or collateral blood relations within the second degree of kinship acts as the Company's
directors, managers or any position that has a direct and material effect on the audit work.
7. The CPA did not receive from the Company or its directors, managers, or major shareholders
any offer or gift, the value of which exceeds the usual social etiquette standards.
8. The CPA's audit
regarding
independence/conflicts of interests without any violation of the independence or any
unsettled conflict of interests.
the necessary procedures
implemented
team has
Results
Compliant with
Independence?
True
True
True
True
True
True
True
True
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Note: Family members: They mean the CPA's spouse (or cohabitant), minors or other dependents.
Audit period: It usually begins from the date on which the members of the audit team start auditing and ends on the date
when the audit report is issued. If the audit case is cyclical, the cycle period belongs to the audit period.
Note 5: No more than 1% of the earnings of the Company for a given year may be distributed to its directors and managers
as their remuneration for such year in accordance with Paragraph 1, Article 25 of the Company's Articles of
Incorporation. In order to regularly assess the remuneration of directors and managers, directors and managers are
remunerated according to their degree of participation in the Company's operations and personal performance, and
in accordance with the Company's "Rules Governing the Compensation of Directors and Functional Members" and
"Rules Governing the Evaluation of Manager's Performance and Management of Compensation". Such
remuneration will be further calculated and reasonably paid in a proportion of such earnings by taking into
consideration the evaluation items specified therein, such as the directors' individual professional input and
performance, the manager's business strategy and medium- and long-term strategic plans, and how the policy plans
and performance indicators at all levels are carried out in accordance with the current year's operating objectives. In
addition, the director and manager remuneration system will be reviewed from time to time based on the actual
operating status and relevant laws and regulations.
Note 6: The further education received by Independent Directors and other Directors is disclosed in "(VIII) Other important
information helpful for improving understanding of the governance of the company" under "4. Corporate
Governance Status" in this report.
61
Corporate Governance Report
(4) Composition, duties and operation of the Compensation Committee:
On 2011/09/27, the Company established the Compensation Committee and drew up the "Regulations
Governing the Organization of the Compensation Committee". The Compensation Committee of the fourth term
is comprised of four members, who currently all are Independent Directors. The Committee is aimed at helping
the Board establish and periodically review the performance appraisal of Directors and managers and the
remuneration policy, system, standards and structure, as well as periodically review and determine the
remunerations for Directors and managers.
1. Information of the members of the Compensation Committee
Criteria
Identity
Name
Whether Possessing at least 5 Years of
Work Experience and the Following
Specialized Qualifications
A judge, public
prosecutor,
attorney,
accountant, or
other
professional or
technical
specialist
related to the
needs of the
Company who
has passed a
national
examination
and received a
certificate
Having
work
experienc
e in
commerc
e, law,
finance,
or
accountin
g or a
professio
n
necessar
y for the
business
of the
Company
An instructor
or higher
position in
the
department
of
commerce,
law, finance,
accounting
or other
department
related to
the business
needs of the
Company in
a public or
private
junior
college or
university
Meet the independence criteria (Note)
1
2
3
4
5
6
7
8
9
10
Number of
Other Public
Companies in
which the
Member also
Rem
arks
Serves as an on
the
Compensation
Committee
Independent
Director
King-Ling
Du
Independent
Director
Ming-Ling
Hsueh
Independent
Director
Shiang-
Chung
Chen
Independent
Director
Fu-Hsiung
Hu
No
Yes
No
No
No
Yes
No
No
Yes
Yes
Yes
Yes
1
3
1
1
Note: If the member meets any of the following criteria in the two years before being elected or during the term
of office, please check "" in the corresponding box.
(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 same does not apply to
independent directors 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).
(3) Not a natural-person shareholder whose shareholding, together with those of his/her spouse, minors and
shares held under others' names, exceeds 1% of the total number of outstanding shares of the company,
or ranks in the top ten shareholders of the company.
(4) Not managerial officer listed in (1), neither is a spouse, relative within the second degree of kinship, or
direct blood relative within the third degree of kinship of any of the persons in (2) and (3) above.
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the
total number of issued shares of the company, or that ranks among the top five in shareholdings, or that
designates its representative to serve as a director or supervisor of the company under Article 27,
Paragraph 1 or 2 of the Company Act (the same does not apply to independent directors appointed in
62
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).
(6) If a majority of the company's director seats or voting shares and those of any other company are
controlled by the same person: Not a director, supervisor, or employee of that other company (the same
does not apply to independent directors 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) If the chairperson, general manager, or person holding an equivalent position of the company and a
person in any of those positions at another company or institution are the same person or are spouses:
Not a director (or governor), supervisor, or employee of that other company or institution (the same does
not apply to independent directors 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, officer, or shareholder holding five percent or more of the shares, of a specified
company or institution that has a financial or business relationship with the company (the same does not
apply to any specified company or institution that holds 20 percent or more and no more than 50 percent
of the total number of issued shares of the Company where independent directors are 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).
(9) Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole
proprietorship, partnership, company, or institution that, provides auditing services to the company or
any affiliate of the company, or that provides commercial, legal, financial, accounting or related services
to the company or any affiliate of the company for which the provider in the past 2 years has received
cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, 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 Act or to the
Business Mergers and Acquisitions Act or related laws or regulations.
(10) Not having any of the situations set forth in Article 30 of the Company Act of the R.O.C.
2. Information on Operation of the Compensation Committee
The Company's Compensation Committee operates in accordance with the Company's Compensation
Committee Charter and holds at least two regular meetings each year. In 2020, the members attended the
meetings as follows:
There are 3 members of the Compensation Committee of the third term, and their term of office started on
May 26, 2017 and ended on May 25, 2020. The Compensation Committee met 3 times in 2020. The
attendance records of the committee members are as follows:
Title
Name
Attended in Person
Attended by Proxy
Attendance Rate (%)
Convener King-Ling Du
Member Ming-Ling Hsueh
Member
Shiang-Chung Chen
3
3
3
0
0
0
100%
100%
100%
There are 4 members of the Compensation Committee of the fourth term, and their term of office started on
August 4, 2020 and will end on May 28, 2023. The Compensation Committee met twice in 2020 (including the
preparatory meeting on August 4, 2020). The attendance records of the committee members are as follows:
Title
Name
Attended in Person
Attended by Proxy
Attendance Rate (%)
Convener King-Ling Du
Member Ming-Ling Hsueh
Member
Shiang-Chung Chen
Member
Fu-Hsiung Hu
2
2
2
2
0
0
0
0
100%
100%
100%
100%
63
Corporate Governance Report
(4) The matters for discussion and resolution by the Compensation Committee and the Company’s handling of
the opinions of the members of the Compensation Committee:
Compensation
Committee
Meeting Number
and Date
Board of Directors
Meeting Number
and Date
Proposals and Resolutions
Proposal:
Approval for the Company’s 2019
Manager performance evaluation and
bonus and compensation.
Resolution: After consultation and discussion
with the members present by the
Chairman about the change to the
corporate performance ratings, the
proposal passed and sent to the
Board of Directors for approval.
Approval for the Company’s 2019
Chairman
Chairman
performance bonus.
Proposal:
Vice
and
3rd Term
13th Meeting
January 8, 2020
18th Term
18th Meeting
January 10, 2020
Resolution: After consultation and discussion
with the members present by the
Chairman, the proposal passed with
unanimous consent and sent to the
Board of Directors for approval.
Approval for the 2020 objectives set
by the managers.
Proposal:
Proposal:
Proposal:
Resolution:
Resolution: After consultation and discussion
with the members present by the
Chairman, the proposal passed with
unanimous consent and sent to the
Board of Directors for approval.
Approval for the amendment to the
Company's Management Rules for
Managerial Officer's Performance
Evaluation and Compensation.
After consultation and discussion
with the members present by the
Chairman, the proposal passed with
certain amendments and sent to
the Board of Directors for approval.
Approval for the distribution of
director
and
manager/employee compensation
for 2019.
After consulting with the members
present, the Chairman discussed
and confirmed that the director
is based on their
compensation
professionalism, participation in the
Company's affairs and the results of
their personal self-assessment; the
manager compensation is based on
their performance and contribution
to the Company. This proposal was
passed and sent to the Board of
Directors for approval.
compensation
Resolution:
3rd Term
14th Meeting
February 17, 2020
None.
64
Company’s
Handling of
Compensation
Committee
Member’s Opinion
passed
Directors
the proposals with
unanimous
consent.
passed
Directors
the proposals with
unanimous
consent.
Directors
passed
the proposals with
unanimous
consent.
Directors passed
the
proposals
with unanimous
consent.
Due
the
to
adjustment of the
amount of profit,
the amount of
compensation to
be allocated was
discussed
and
separately
the amount so
resolved was not
sent to the Board
of Directors
for
approval.
Compensation
Committee
Meeting Number
and Date
Board of Directors
Meeting Number
and Date
3rd Term
14th Meeting
February 17, 2020
18th Term
19th Meeting
February 27, 2020
3rd Term
15th Meeting
February 27, 2020
18th Term
19th Meeting
February 27, 2020
4th Term
1st Meeting
October 27, 2020
19th Term
3rd Meeting
November 13,
2020
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Company’s
Handling of
Compensation
Committee
Member’s Opinion
Directors passed
the
proposals
with unanimous
consent.
Directors
passed
the proposals with
unanimous
consent.
Directors
passed
the proposals with
unanimous
consent.
Proposals and Resolutions
that
compensation
the
is based on
Approval for the amendment to the
Company's
Compensation
Committee Charter.
After consultation and discussion
with the members present by the
Chairman, the proposal passed with
unanimous consent and sent to the
Board of Directors for approval.
Re-discussion on the distribution of
and
director
manager/employee
compensation
for 2019.
After consulting with the members
present, the Chairman discussed and
director
confirmed
compensation
their
professionalism, participation in the
Company's affairs and the results of
their personal self-assessment; the
manager compensation is based on
their performance and contribution to
the Company. This proposal was
passed and sent to the Board of
Directors for approval.
Approval for the amendment to the
Company's Rules for Evaluating the
Performance of
the Board of
Directors.
The Chairman consulted with the
adjusted
members present
certain contents of Schedule
II,
Schedule III and Schedule IV. The rest
of the amendment was approved
without objection and sent to the
Board of Directors for approval.
and
Other details that need to be recorded:
Decisions made by the Compensation Committee for which certain committee members were against or
had reservations that were recorded or expressed via written statements: None
3. Scope of Duties of the Compensation Committee
The Compensation Committee shall exercise the care of a good administrator to faithfully perform the
following duties and present its recommendations to the Board of Directors for discussion.
(1) Periodically reviewing the Compensation Committee Charter and making recommendations for
amendments.
(2) Establishing and periodically reviewing the annual and performance goals for the directors and managers
of the Company and the policies, systems, standards, and structure for their compensation, as well as
disclosing the standards for evaluating their performance in the annual report.
(3) Periodically assessing the degree to which performance goals for the directors and managers of the
Company have been achieved, and setting the types and amounts of their individual compensation, as
well as disclosing the director and manager compensation in the annual report.
65
Corporate Governance Report
The Committee shall perform the duties under the preceding paragraph in accordance with the following
principles:
(1) Ensuring that the compensation arrangements of the Company comply with applicable laws and
regulations and are sufficient to recruit outstanding talents.
(2) Performance assessments and compensation levels of directors and managerial officers shall take into
account the general pay levels in the industry, as well as the reasonableness of the correlation between
the individual's performance and the Company's operational performance and future risk exposure.
(3) There shall be no incentive for the directors or managerial officers to pursue compensation by engaging in
activities that exceed the risk appetite of the Company.
(4) For directors and senior managerial officers, the percentage of remuneration to be distributed based on
their short-term performance and the time for payment of any variable compensation shall be decided
with regard to the characteristics of the industry and the nature of the Company's business.
(5) Reasonableness shall be taken into account when the contents and amounts of the compensation of the
directors, supervisors, and managerial officers are set. It is not advisable for decisions on the
compensation of the directors, supervisors, and managerial officers to run counter to financial
performance to a material extent. It is not advisable for said compensation to be higher than that in the
preceding year in the event of a material decline in profits or of long-term losses. If it is still higher than
that in the preceding year, the reasonableness shall be explained in the annual report and reported at a
shareholders' meeting.
(6) No member of the Committee may participate in discussion and voting when the Committee is deciding
on that member's individual compensation.
"Compensation" as used in the preceding two paragraphs includes cash compensation, stock options,
profit sharing and stock ownership, retirement benefits or severance pay, allowances or stipends of any
kind, and other substantive incentive measures. Its scope shall be consistent with the compensation for
directors and managerial officers as set out in the Regulations Governing Information to be published in
Annual Reports of Public Companies.
If the decision-making and handling of any matter relating to the remuneration of directors and
managerial officers of a subsidiary is delegated to the subsidiary but requires ratification by the board of
directors of the Company, the Committee shall be asked to make recommendations before the matter is
submitted to the board of directors for deliberation.
(7) The Committee shall explain at the meeting the remuneration of any of its members that is to be
discussed at such meeting. Such members shall not join the discussion and vote if it may do harm to the
interests of the Company, and shall recuse themselves from the discussion and voting, and shall not
exercise their voting rights on behalf of other members.
66
(5) Fulfillment of social responsibility and differences between our corporate social responsibilities and
the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and
reason(s)
The Company established the Corporate Social Responsibility Committee in April 2015 and the Sustainable
Development Committee in November 2019 by merging the existing Corporate Social Responsibility Committee
and Ethical Management Committee. The Sustainable Development Committee is responsible for formulating
corporate sustainability strategies and visions and promoting and managing CSR-related work.
The relevant matters under charge and the organizational structure of the Sustainable Development Committee
go as follows:
Duties of the Committees
Department
Sustainable Development
Committee
Ethical Management
Promotion Center
Environment, Safety and
Health Promotion Center
Green Operation Promotion
Center
Customer Service and Supplier
Management Promotion
Center
Responsibility and function
It is our highest-leveled CSR organization which establishes our corporate sustainable
development vision and strategy, reviews the overall operational directions of the Group
and each promotion center through regular meetings and oversees the implementation
results. It reports the annual CSR results to the Board of Directors in the following year.
It is responsible for formulating and promoting policies and systems related to ethical
management, integrating integrity and ethical values into the Company's business
strategies, and assisting the Board of Directors and the senior management in checking and
evaluating the effectiveness of the preventive measures established to implement ethical
management.
It is responsible for formulating our environmental protection, safety and health policies,
implementation
implementing
performance. Being composed of the heads of cross-business units and related
departmental cadres, it carries out the interdepartmental integration and implementation
promotion on related issues.
It is responsible for formulating the green operation strategy and identifying green
products and services with future value based on the implementations of CSR, including
product design, material procurement, manufacturing, and sales and service systems,
which are all green oriented.
It is responsible for formulating policies and implementation plans for the improvement of
customer service quality and supplier management, overseeing and reporting on the
implementation performance. Being composed of the heads of cross-business units and
related plans, overseeing and
reporting on
the
67
Corporate Governance Report
Department
Employees Relations and
Social Care Promotion Center
Secretary Office
Report Preparation Team
Responsibility and function
it carries out the
integration and
interdepartmental
related departmental cadres,
implementation promotion on related issues.
It is responsible for promoting and building a safe and healthy working environment for
employees to fully utilize their talents for reasonable compensation and benefits. It also
develops social care policies to actively participate in the public welfare, social cares and
CSR education, so as to pay back to society with concrete, continuous action.
It is a staff unit established under the Sustainable Development Committee and is
responsible for assisting the Committee in exercising its responsibilities, tracking resolution
issues and coordinating the integration of the operations of the various promotion centers.
It is responsible for the preparation of CSR reports and the disclosure of CSR-related
information and the CSR promotion.
Deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons for deviation
In line with the
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies.
Actual governance (Note 1)
Assessment items
Yes No
Summary description (Note 2)
I.
Yes
Does the Company conduct
of
assessments
risk
and
environmental,
social
issues
corporate governance
the Company's
related
to
formulate
and
operations
risk management
relevant
policies
in
strategies
or
accordance with the principle
of materiality? (Note 3)
In order to ensure the sound operation and
sustainable development of the Company, the
"Rules
and
for Risk Management Policies
Procedures" were approved by the 19th meeting
Board of Directors of the 18th term in February 2020
to establish an overall risk management system.
impact and
For the purpose of reducing the
influence of
internal and external risks, the
Company's Sustainable Development Committee,
President's Office, and other risk management units
have identified risks related to environmental, social
issues and planned
and corporate governance
relevant management and control measures
in
accordance with the principle of materiality, the
business and operational characteristics of the
Company. Management policies, strategies or
mechanisms for each risk category are summarized
in Note 4.
and
environmental
In 2020, the Company introduced a risk assessment
tool
for the risk of dishonest behavior and
conducted risk analysis of seven major types of
dishonest behavior for the three functions of sales,
safety
and
procurement. The assessment results and related
handling mechanism were reported to the Board of
Directors in November 2020. (For the report, please
refer
to
https://www.walsin.com/walsin/userfiles/file/Risk
ManagementReport2020.pdf)
protection,
68
Actual governance (Note 1)
Assessment items
Yes No
Summary description (Note 2)
Deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons for deviation
Ii.
Yes
Has The Company Established
A Dedicated Or Non-Dedicated
Department For Fulfilling CSR,
With The Board Of Directors
High-Ranking
Authorizing
Managers To Handle Such
Efforts And
The
Relevant Progress To The
Board Of Directors?
Report
The Company's 7th meeting of the Board of
Directors of the 17th term approved the
establishment of the "Corporate Social
Responsibility Committee" in April 2015, and the
17th meeting of the Board of Directors of the 18th
term in November 2019 approved the
establishment and organization of the "Sustainable
Development Committee" by merging the existing
"Corporate Social Responsibility Committee" and
"Ethical Management Committee". The Sustainable
Development Committee is responsible for
developing corporate sustainability strategies and
visions to promote CSR-related work and
management. The Committee is composed of the
Chairman as convener, and the Vice Chairman and
all independent directors as members. The
Committee has five promotion centers, including
the Ethical Management Promotion Center, the
Environment, Safety and Health Management
Promotion Center, the Green Operation Promotion
Center, the Customer Service and Supplier
Management Promotion Center, and the Employee
Relations and Social Care Promotion Center. It has
reported to the Board of Directors on 11th January
2020 on the implementation of CSR in 2019 and the
2020 implementation plan. It has reported to the
Board of Directors on 22th January 2021 on the
implementation of CSR in 2020 and the 2021
implementation plan.
Environmental Issues
III.
(1) Has the Company established
a
environmental
management system based on
its
characteristics of
the
industry?
proper
In line with the
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies.
Yes
(1) The environmental management of the
Company's domestic and overseas plants has
been carried out in accordance with
government regulations and international
environmental protection conventions. The
plants in Taiwan (Hsinchuang Plant 1,
Hsinchuang Plant 2, Yangmei Copper Wire
Plant, Taichung Plant and Yanshui Plant) and
China (Shanghai Power Plant, Jiangyin Plant,
Yantai Plant and Changshu Plant) have all
received the "Environmental Management
System" certification (ISO 14001:2015). The
Company will also continue to improve and
refine our environmental management
performance.
(2) Has the company made efforts
to improve the efficiency of
Yes
(2) The Company mainly produces wire and cable
and stainless steel. After these two types of
69
Corporate Governance Report
Actual governance (Note 1)
Assessment items
Yes No
Summary description (Note 2)
Deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons for deviation
resources utilization and use
recycled materials which have
a
the
impact
environment?
low
on
(3) Has the company assessed the
current and future potential
risks and opportunities of
climate
the
change
business and taken measures
to address climate related
issues?
for
products have gone through the stages of
production, use and disposal, they can be
recycled and reused to return to their life cycle,
which is in line with the concept of recycling for
new products in a circular economy. In addition
to using recycled stainless steel and carbon
steel as raw materials, Walsin also uses
recycled pallets, iron frames, and iron (wood)
shafts as packaging materials for copper wire
and cable, accounting for 44.52% of recycled
steel materials and 63.7% of recycled
packaging materials in 2020.
Please refer to 2020 CSR Report 3.2 (Green
Operations) for the above specific results.
Yes
(3) The Company has formulated its risk
management policies and procedures to
incorporate climate change and environmental
risks into its management in accordance with
its business operations and operating
characteristics. The Company also introduced
the TCFD framework to identify the risks and
opportunities caused by climate change, and
further developed strategies in response based
on the significant risks and opportunities, so as
to establish relevant indicators and a
governance framework for climate change
according to such strategies. For relevant
details, please refer to the Company's website
on "Climate Change Risks and Opportunities
Management" page under "Corporate Social
Responsibility" section
(https://www.walsin.com/csr/cht/index.html).
(4) Has the Company compiled
statistics on greenhouse gas
water
emissions,
(GHG)
consumption and total weight
of waste in the past two years,
and formulated policies on
energy conservation, carbon
reduction, GHG
reduction,
water consumption reduction
or other waste management?
Yes
(4) The Company's Environmental, Health and
Safety Promotion Center under the Sustainable
Development Committee has set targets for
energy saving and carbon reduction, water
management and waste reuse in accordance
with Walsin Lihwa Environmental, Health and
Safety Policy, including a 10% carbon reduction
by 2025 compared to 2014, a 15% reduction in
water use in 2030 compared to 2014, and
capital expenditures to replace production
equipment, develop green processes, and
promote source improvement.
70
Actual governance (Note 1)
Assessment items
Yes No
Summary description (Note 2)
Deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons for deviation
Our annual statistics on greenhouse gas
emissions, water consumption and total waste
volume indicate total greenhouse gas
emissions of 538,538 metric tons of CO2e, total
water consumption of 16,292 million liters and
total waste of 245,439 metric tons in 2020, a
decrease by 9.1%, 5.85% and 3.0%,
respectively, compared to 2019.
Please refer to Chapter 5 (Low Carbon
Environmental Protection and Energy Saving)
of the CSR Report for the above specific results.
Yes
IV. Social Issues
(1) Has the Company established
its management policies and
procedures in accordance with
relevant laws, regulations, as
well
international
conventions regarding human
rights?
as
Yes
(2) Has the company established
and implemented reasonable
employee benefit measures
(including
compensation,
vacation and other benefits)
and
reflected
operating performance or
results
employee
in
compensation?
properly
(1) The Company complies with the laws and
regulations of each of its global operating
locations, commits itself to protecting the basic
human rights of its employee, supports and
complies with the internationally recognized
human rights conventions and guidelines such
as United Nations Universal Declaration of
Human Rights, United Nations Global Compact
Organization
and
Convention, establishes the spirit of fair,
reasonable, friendly treatment of and respect
for all employees with dignity, including regular
staff, temporary staff, expatriate staff, interns,
and contractors, and extends this spirit to our
partners.
International
Labor
(2) The Company attaches
importance to the
physical and mental health and welfare of our
employees and provides comprehensive and
diversified welfare measures. It has work rules
and related management regulations, which
cover basic wages, working hours, annual
leaves more than what is provided in the Labor
for
Standards
subsidies
Act,
group
transportation/communication/meal,
insurance and health check-ups, and the
provision of staff restaurants, dormitories,
transportation vehicles, parking spaces, etc. A
staff welfare committee has also been set up
and elected by the employees to handle
various welfare matters, including subsidies for
funeral, celebrations, childbirth,
wedding,
travel and club activities,
festival
bonus/Labor's Day bonus, birthday money gift,
children's scholarships, interest-free loans, and
three
In line with the
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies.
71
Corporate Governance Report
Actual governance (Note 1)
Assessment items
Yes No
Summary description (Note 2)
hospitalization grants.
Deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons for deviation
and
(3) Has the company provided a
healthy work
safe
for employees
environment
and provided education on
safety
for
employees on a regular basis?
health
and
The Company conducts regular market salary
surveys to ensure that its overall compensation
is competitive in the labor market; it also
provides performance bonuses and production
bonuses based on the Company's operational
performance, the achievement of team goals
its
and
employees. We also pay our employees at a
rate of not less than 1% of our current year's
profit to motivate those who have performed
well.
individual performance of
the
Yes
(3) The Company has had a safety & health
management organization and management
personnel, established safety work guidelines,
standards for the safe operation of machinery
and equipment and periodically
inspected
various machines and relevant training in an
effort to provide the employees with safety
In
education and health examinations.
addition, workshops are held periodically to
share safety knowledge with employees.
Safety
Environmental,
The Company has established the ISO 45001
occupational safety and health management
system at each of its plant in 2020, and the
Occupational Safety and Health Committee and
and Health
the
Management Committee regularly review the
implementation
safety
regulations. In terms of employee health, in
addition to the regular health checkups that
are superior to those specified in the laws and
regulations, various health promotion activities
such as health seminars and consultation with
clinical physicians are conducted by the nursing
staff of each of our plants in Taiwan to improve
a safe and friendly workplace.
workplace
of
Yes
(4) Has the company established
an
career
effective
development and capability
training
its
program
employees?
for
72
(4) The company has developed a training system
and learning blueprint according to each level
and profession, so that employees can follow
them in learning and improving their abilities.
The Company provides appropriate training
resources and plans budgets for them every
job
year, depending on
current
the
Actual governance (Note 1)
Assessment items
Yes No
Summary description (Note 2)
Deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons for deviation
requirements and career development needs
of employees. At the same time, in the first and
second half of each year, during
the
implementation of performance appraisal, in
addition to conducting the annual work review
in conjunction with colleagues, supervisors
understand
the potentials of colleagues,
professions and areas to be improved based on
their implementation of their work, and jointly
formulate development plans for training,
rotation and participation in projects.
Yes
(5) Does the Company comply
with relevant regulations and
international
standards
regarding customer health and
privacy,
customer
safety,
marketing and labeling of its
products and services, and has
it formulated relevant policies
and complaint procedures to
protect consumer rights?
to
the
In order
(5) Our products and services are marketed and
clearly labeled in accordance with local and
international regulations and standards or
requirements of our
pursuant
to protect business
customers.
information and
the
Company establishes a code of ethical conduct
for employees and
security
policies and relevant regulations (Note 5) to
prevent any unauthorized access to, alteration
to, or improper disclosure of any information
that may infringe on customer privacy and
rights.
customer privacy,
information
the
information, and
In addition to providing its latest information,
product
telephone
numbers and e-mail addresses of the persons-
in-charge of each business on its website, the
Company has established communication
channels through which interested parties can
make complaints or communicate with the
Company. Upon receipt of a communication
from an interested party, the Company will
transfer the case to a dedicated person for
him/her to initiate operational procedures, in
order to complete the case and reply to the
interested party within the time limit.
We have not violated any laws or regulations
safety,
regarding
customer privacy, marketing and labeling of
our products and services in 2020.
customer health
and
the
latest
For
product
information, contact phone numbers and
emails, please refer to
information,
73
Corporate Governance Report
Actual governance (Note 1)
Assessment items
Yes No
Summary description (Note 2)
Deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons for deviation
https://www.walsin.com/walsin/page.do?men
uId=7
(6)
the
environmental
In order to strengthen and implement the
sustainable management of its suppliers, the
Company has established a supply chain
sustainability policy, and requires suppliers to
comply with
protection,
occupational safety and health or labor human
rights regulations
in purchase orders and
contracts. Key suppliers and new suppliers, in
addition to signing the "Supplier Management
Commitment Letter", also need to conduct
self-assessments
Supplier
through
Sustainability Assessment Questionnaire, and
the Company also carries out on-site interviews
with them, in order to comply with CSR-related
regulations along with the partnering suppliers
and ensure that the supply chain fulfills its CSR
commitments and implements the Principles
for Supplier CSR Performance Assessment.
Since 2014, we have been compiling CSR reports
with reference to the Global Reporting Initiative's
(GRI) G4 Standards, and since 2017, the report
structure has followed the core options of the latest
GRI Standards. In 2020, we introduced the
Sustainability Accounting Standards Board (SASB)
Industry Standard and the Task Force on the
Climate-related Financial Disclosures (TCFD)
framework to provide stakeholders with more
complete and transparent ESG information.
Since 2015, we have engaged Deloitte Taiwan to
perform third-party assurance checks on our reports
and have obtained the CPA Statement of Limited
Assurance. The third-party assurance checks are
performed in accordance with the standards set
forth in Statement of Standard on Assurance No. 1,
"Assurance Cases Other Than Audits or Reviews of
Historical Financial Information" and "Rules for the
Preparation and Reporting of Corporate Social
Responsibility Reports by Public Companies." As of
the date of publication, the 2020 Annual Corporate
Social Responsibility Report is being under
assurance checks by Deloitte Taiwan, which is
expected to issue a statement of assurance in May
2021.
Yes
relevant
(6) Does the company have a
supplier management policy
requiring suppliers to comply
regulations
with
environmental
governing
protection,
occupational
safety and health, or human
rights in the workplace, and
how is it implemented?
Yes
V. Did
reports
Company make
the
reference
international
to
standards or guidelines for the
preparation
in
of
its corporate social
preparing
responsibility reports and other
reports
that disclose non-
financial information about the
Company? Did the Company
obtain a third-party certification
agency's
or
confirmation
assurance opinion on
said
reports?
74
In line with the
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies.
VI.
Yes No
Assessment items
Actual governance (Note 1)
Summary description (Note 2)
Deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons for deviation
If your company has established CSR principles based on "Corporate Social Responsibility Best Practice Principles for
TWSE/GTSM Listed Companies", please describe differences between the principles and their implementation:
In December 2014, the Company has established, based on "Corporate Social Responsibility Best Practice Principles
for TWSE/GTSM Listed Companies", CSR principles which has also been approved by the Board of Directors. In
January 2018, the Board of Directors approved the first revision of the Company's "Corporate Social Responsibility
Best Practice Principles", and also in April 2020, the second revision thereof, in accordance with the revision of the
"Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies". The "Corporate Social
Responsibility Best Practice Principles" serves as the guidelines to establish and to execute related policies related to
corporate governance, ESH management, customer service and supplier management, green operation, employee
relations and social care. There are no discrepancies between the principles and actual practice.
VII. Other key information useful for explaining the status of CSR practices:
(1) With regard to developing a sustainable environment, please refer to "Operating Status, Environmental Protection
Expenditure Status" in the annual report.
(2) With regard to the Company's observing relevant labor regulations by safeguarding the lawful rights and interests of
its employees and providing a safe and healthy work environment for its employees, please refer to "Operating
Status, Labor-Management Relations" in the annual report.
•
•
•
(3) "Growth and integration with the local communities" is the philosophy in the social care of Walsin Lihwa. It is a
in four directions: "Minority Support", "Environment Conservation",
implementation focused
continuous
"Community Development", and "Corporate Citizen". These include:
"Illuminating the Corners of Taiwan":
The Company has initiated the 5-year sponsorship project "Illuminating the Corners of Taiwan" in the end of 2016 to
give back to society. The projects hopes to pay it forward by offering 5 elementary and junior high schools in rural
Taiwan with relatively low resources more comprehensive faculty, environment and equipment and to develop
characteristic physical and musical education.
"Elementary and Junior High School Newspaper Reading Project":
Starting from 2014, this partnership between Mandarin Daily News sponsors newspapers for primary/junior high
schools in the counties and cities in Taiwan where our plants located. The school teachers led students to understand
the subjects of newspaper reports, and through interactive discussions, expanded their horizons and laid the
foundation for their language skills. In 2020, we sponsored 79 classes in 16 schools in New Taipei City, Taoyuan City,
Taichung City, Tainan City and Kaohsiung City, benefiting 1,180 students. Since 2019, Walsin, together with the Walsin
Technology Foundation and Mandarin Daily News, has launched a bilingual reading education program. In 2020, we
promoted this program in 893 classes in a total of 39 junior high schools in Taoyuan City and Kaohsiung City,
benefiting a total of 24,145 students. With the advantage of the English and Chinese bilingual texts in "Junior High
School Student Daily" offered by Mandarin Daily News, students' listening, speaking, reading and writing skills in both
Chinese and English improved and their interests in the world and reading were opened. In addition, we also
cooperated with Yingge Elementary School, Yingge District, New Taipei City and Ren-Kuan Elementary School, Yanshui
District, Tainan City to organize newspaper reading games and activities, where 37 colleagues volunteered to play
with the schoolchildren, with the view to inspiring children's interest in learning through educational entertainment
and visualization of knowledge.
"Baoshan Vegetation Project":
To promote cultivation of talents for conservation, collection and management of aboriginal Taiwan plant resources,
Walsin Lihwa cooperated with College of Agriculture and Natural Resources, National Chung Hsing University to install
a screen-house and an outdoors nursery, cultivate seedlings for afforestation applications and, environmental
education and promotion for conservation, and protect Taiwan's diverse protected animal and plant resources. In
order to focus on the contribution to and implementation of the project, starting from 2018, the Company and
Winbond Electronics Corporation cooperated to incorporate Huabao Seed Breeding Co., Ltd., responsible for
promoting Taiwan's forest germplasm conservation and indigenous plants revegetation projects. In 2020, we
implemented the related planning and training progress according to the plan
75
Corporate Governance Report
Actual governance (Note 1)
Assessment items
Yes No
Summary description (Note 2)
Deviation from
Corporate Social
Responsibility Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons for deviation
• Sponsorship for the Heavy Particle Cancer Treatment Center of Taipei Veterans General Hospital:
In 2019, Walsin Lihwa, Winbond Electronics Corporation, business groups of Walsin Technology and HannStar Display
Corporation within the Walsin Group made a joint two-year donation of a total of NT$50 million for the purchase of
state-of-the-art medical equipment, including heavy-particle and advanced medical equipment, in order to bring the
Group's spirit of public welfare into full play and to unite more social forces to improve medical standards for the
benefit of the people of Taiwan. Installation testing of equipment commenced in June 2020 after completion of the
Treatment Center Building and the base. Another new cutting-edge technology for cancer treatment is expected to
be available to the nation by the end of 2021.
• Supporting Traditional Chinese Opeara and Cross-Cultural Activities:
In order to support the passing down of traditional Chinese opera culture, Walsin has continuously sponsored the
Wei Hai-Ming Beijing Opera Arts Cultural Education Foundation in 2020 to support the preservation of traditional
Beijing Opera culture so that more people can understand the beauty of the art of Chinese opera. In October 2020, in
support of the arts and cultural activities, we hosted on the building plaza in our headquarters the "2020 Chiense
Opera Season - Sukkot Autumn Collection Cultural Celebration", featuring the decloration artwork "Glass Hut" by
artist Leon Fenster. On the day of the festival, there were also performances by artists from various countries, which
added an artistic atmosphere to the regional development.
(4) In 2020, Walsin Lihwa was listed as the top 5% outstanding companies as published by the Taiwan Stock Exchange in
the 7th "Corporate Governance Evaluation." The Company was awarded the "National Performance Health
Workplace - Health Care Award" by the National Health Administration, Ministry of Health and Welfare (Hsinchuang
Plant), the first place in the Taichung City Workplace Health Promotion Competition Program - Workplace Walking
Promotion Competition (Taichung Plant), and the Sports Enterprise Certification by the Sports Administration,
Ministry of Education (Yanshui Plant). The Company was also awarded the "Model Donation for Education" by the
Yilan County Government for the "Light Up the Corners of Taiwan" project, and Performance Award and Platinum
Report Award of Top 50 Taiwan Corporate Sustainability Award from TCSA.
(5) For details on the Company's other CSR related operations, please go to the Walsin Lihwa website CSR section
(http://www.walsin.com/csr/cht/index.html)and read our 2020 CSR report.
Note 1: If "Yes" is checked, please explain the important policies, strategies, measures and their implementation; if "No" is
checked, please explain the reasons and the plans to adopt the relevant policies, strategies and measures in the
future.
Note 2: If the company has prepared the CSR report, the execution description may just instead indicate the method to
consult such report and the corresponding index page numbers.
Note 3: The principle of materiality refers to the environmental, social and corporate governance issues that have a material
impact on investors and other interested parties of the Company.
Note 4:
Issues
Risk Category
Corporate
Governance and
Economic Issue
• Strategy and
Operations
• Legal
Management Policies, Strategies or Mechanisms
• Business units regularly report strategic issues to the Directors
and therefore reduce strategic risks through the participation,
advice and supervision of board members.
• The Company's culture of "Ethical Management" emphasizes
that all business activities must be conducted in accordance
with local laws and regulations. We also require our employees
to comply with laws and regulations, corporate rules and
procedures, and guide them to conduct themselves in
accordance with laws and regulations and ethical standards
76
Issues
Risk Category
Management Policies, Strategies or Mechanisms
through education, internal audit, internal control and other
management measures.
• Capital Expenditure
• Major capital expenditures shall be reported to the Audit
• Information
Security
• Changes in Interest
Rates
Committee and the Board of Directors for review and approval.
• The Company continuously introduces advanced information
security solutions, establishes data protection mechanisms,
organizes education and training, promotes new information
security knowledge and raises staff awareness of information
security.
• The Company monitors changes in the interest rate markets,
controls existing long and short term borrowing positions and
uses market instruments to lock in interest rate costs in a timely
manner.
• Changes in
• The Company develops a hedging strategy and carries out
Exchange Rates
• Raw Material
Prices and Supply
Chains
• Technology Risks
Environmental
Issues
Climate Change and
Environmental Risks
Social Issues
• Management Risks
exchange rate hedging in conjunction with relevant hedging
instruments such as spot rate trading and forward rate trading.
Control of risks associated with foreign currency exchange rates
and related hedging operations are performed with respect to
major capital expenditures and capital transfers that may cause
changes in foreign currency positions.
• The Company carries out market risk management of its raw
materials-related operations. It also prudently evaluates and
actively develops new material sources to avoid monopoly by a
few suppliers. In addition, we establish a safe inventory of raw
materials and purchase some raw materials in stock to allow for
flexibility.
• We deeply understand the needs of customers and end-use
applications, and accelerate the technical development of
product materials manufacturing processes and applications, in
order to strengthen our technical capabilities to respond to
rapid changes in the external environment.
• The Company's environment, safety and health and energy
policy is "Green Manufacturing, Happy Enterprise and
Sustainable Development" and is committed to "Compliance
with Regulations, Risk Control, Pollution Prevention, Energy
Saving and Waste Reduction and Performance Enhancement."
• We promote energy management systems to establish energy
management performance indicators, so as to facilitate long-
term energy efficiency control. We also Invest in green
electricity and gradually build up a product carbon footprint, in
order to improve carbon reduction performance and prepare
for carbon rights operations in advance. Besides, we
continuously identify and develop waste reuse technologies to
improve resource recycling efficiency.
• Employees are Walsin's most important asset and major driving
force. Walsin cares about its employees, their families and their
lives, listens to their voices and strengthens the communication
channels between employees and employers to promote
harmonious relationships. We also ensure that the existing
human resources management procedures and related
77
Corporate Governance Report
Issues
Risk Category
Management Policies, Strategies or Mechanisms
• Occupational
Safety Risks
administrative practices comply with the laws and regulations.
• We maintain the consistency of the environment, safety and
health management systems in all plants through ESH
education and training, and implement operational risk factor
checks and regulations to reduce the incidence of occupational
safety incidents. We also require contractors to sign an
Environment, Safety and Health Policy Commitment to jointly
comply with the requirements of the environment, safety and
health law and to reduce occupational safety hazards.
• Corporate Image
• The Company has established a crisis management response
Risks
mechanism for risks that may affect its image.
For more information on the implementation of risk management, please refer to 1.3 Management Policy Disclosure,
2.4.3 Risk Management and related sections in the Company's 2020 CSR Report
(https://www.walsin.com/csr/cht/download.html)
Note 5: Information security policies and relevant regulations include rules for information security organization
management, information asset management, personnel security management, physical and environmental
security management, communication and operation management, access control management, information
system acquisition, development and maintenance management standards,
incident
management, business continuity management, and compliance management.
information security
78
(6) Fulfillment of ethical management and differences between our ethical management and the Ethical
Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and reason(s)
Deviation from
Ethical Corporate
Management Best
Practice Principles
for TWSE/TPEx
Listed Companies
and reasons for
deviation
line with the
In
Ethical Corporate
Management Best
Practice Principles
TWSE/TPEx
for
Listed Companies.
Implementation status
Assessment items
Yes No
Summary
Yes
(I)
I.
Establishment
management
solutions
of
policies
ethical
and
(I) Has the Company formulated its
ethical management policies
approved by
the Board of
Directors and stated its ethical
management
and
practices in its internal rules and
external documents? Do the
Board of Directors and senior
management actively fulfill their
commitment
ethical
to
management polices?
policies
to
our
fulfill
effort
the government,
The Company has always insisted on honest
business practices. We abide by the laws set
forth by
implement our
corporate governance principles and make our
utmost
corporate
responsibilities. Our Board passed our "Ethical
Corporate Management Best Practice Principles"
and our "Procedures for Ethical Management
and Guidelines for Conduct" as the Company's
policies for ethical management practices. The
full texts are also disclosed in electronic form on
the Company's website
to showcase our
commitment to implementing and overseeing
ethical management policies.
the
latest
amended
laws and
In accordance with
the Company
the
regulations,
Procedures
for Ethical Management and
Guidelines for Conduct by the Board of Directors
in 2020 and published it on the Company's
website in electronic format. The directors and
senior executives signed a Statement of Ethical
their
Management
determination to operate with integrity. At the
same
to ethical
information related
management was published on the corporate
website and internal website for the directors'
reference to convey the importance of operating
with integrity and to actively implement and
monitor the
implementation of the ethical
management policy.
demonstrate
time,
to
(II) Has the Company established an
assessment mechanism for the
risk of unethical conduct to
regularly analyze and evaluate
business activities with a higher
risk of unethical conduct in its
scope
and
formulated a plan based on such
analysis
to
conduct,
prevent
and evaluation
unethical
business,
of
Yes
(II) 1. The Company's prevention plan and scope of
Article 6 of the Ethical Corporate Management
Best Practice Principles have specifically covered
the business activities with higher risk of
dishonest behavior or other activities specified in
each paragraph of Paragraph 2 of Article 7 of the
Ethical Corporate Management Best Practice
Principles for TWSE/TPEx Listed Companies. The
Company has
relevant
strengthened
preventive measures through the establishment
the
79
Corporate Governance Report
Implementation status
Assessment items
Yes No
Summary
Deviation from
Ethical Corporate
Management Best
Practice Principles
for TWSE/TPEx
Listed Companies
and reasons for
deviation
which should cover at least the
preventive measures
under
Paragraph 2, Article 7 of the
Ethical Corporate Management
Best Practice Principles
for
TWSE/TPEx Listed Companies?
of internal rules and regulations and practices,
education and
training, daily promotion,
contractual agreements and inclusion in the
employee performance evaluation.
cover
management
responsibility
2. On February 27, 2020, the Board of Directors
approved
the "Risk
the establishment of
Management Policies and Procedures" as the
highest guiding principle for the Company's risk
management. The Company will regularly assess
the risks on an annual basis and formulate and
implement management policies for each risk,
which
objectives,
organizational structure, attribution of authority
and
risk management
and
procedures, so as to effectively identify, measure
and control the Company's risks and control the
risks arising from business activities within an
acceptable range.
The Company's risk management includes:
(1) Risks of interest rate changes
(2) Risks of exchange rate changes
(3) Climate change and environmental risks
(4) Occupational safety risks
(5) Raw material prices and supply chain risks
(6) Information security risks
(7) Strategic and operational risks
(8) Capital expenditure risks
(9) Legal risks
(10) Technology risks
(11) Management risks
(12) Corporate image risks
carry out
management
the Company's
3. In respect of the Company's risk management
in 2020, each risk management unit and audit
risk
unit will
and
environment
countermeasures, and President will organize
and
and
coordination of risk management. The risk
control measures
risk management
and
operations will be reported to the Board of
Directors in case of material risk events.
implementation
oversee
the
4. The Company included a risk-related course in
2020 as mandatory onboarding training for new
recruits to enhance risk culture awareness and
80
Implementation status
Assessment items
Yes No
Summary
Deviation from
Ethical Corporate
Management Best
Practice Principles
for TWSE/TPEx
Listed Companies
and reasons for
deviation
knowledge, in line with the globalization policy.
5. In 2020, the Company established a risk
assessment mechanism for dishonest acts and
used the six types of dishonest acts listed in
Paragraph 2 of Article 7 of the Ethical Corporate
Management Best Practice Principles
for
TWSE/TPEx Listed Companies as the scope of
assessment to promote the assessment of
dishonest acts, and based on the assessment
results, prepared a prevention and treatment
plan and reported to the Audit Committee on
November 20, 2020 (Note 1).
Yes
the
(III) Has the Company defined and
implemented
operating
procedures, conduct guidelines,
disciplinary
complaint
and
systems for non-compliance in
its unethical conduct prevention
program, and regularly reviewed
and
foregoing
program?
revised
the
for
Best
Procedures
(III) 1. In accordance with the Company's Ethical
Corporate Management
Practice
Ethical
and
Principles
Management and Guidelines for Conduct, it
has established punishment policies and a
complaint filing system for employees who
is
violate
integrated with the employee performance
evaluation.
2. In 2020,
regulations, which
relevant
the
the Company
reviewed and
ethical
cooperated with
latest
management policies, as well as amended the
Director Code of Ethical Conduct, Employee
Code of Ethical Conduct and Regulations
the Handling of Business by
Governing
Employees, to ensure that we must behave
honestly and uprightly to our stakeholders in
compliance with the ethical management
policies. These regulations also stipulate that
when performing their duties, employees shall
not accept bribes or other improper benefits
from companies, customers, competitors and
suppliers, or bribe others. All of the above
regulations have been implemented in the
employees' daily operations.
3. The
has
company
strengthened
the
implementation of prevention programs
through internal education and training, daily
contractual agreements and
promotion,
inclusion
performance
in
assessment.
employee
81
Deviation from
Ethical Corporate
Management Best
Practice Principles
for TWSE/TPEx
Listed Companies
and reasons for
deviation
In
line with the
Ethical Corporate
Management Best
Practice Principles
for
TWSE/TPEx
Listed Companies.
Corporate Governance Report
Implementation status
Assessment items
Yes No
Summary
Yes
2. Ensuring ethical business practice
(I) Has the Company evaluated the
ethical management practices
records of the companies it does
business with as well as explicitly
included ethical management
practices
the
clauses
contracts?
in
(I) 1. The Company prevents
transacting with
companies with unethical management
practice records by adopting the following
approaches:
(1)When selecting a business partner, the
Company reviews the partner’s past trading
history and credit record. When inviting
bids, suppliers shall be informed of the
principle of a fair, open and transparent
supplier selection policy.
(2)Entities we are selling to: Except for
procurement projects from the government,
the Company shall track the
long-term
credit information of distributors, with the
reputation of new distributors obtained
through credit reference agencies and other
companies in the industry.
2. Including honest practice provisions
in
contracts:
(1)Procurement contracts: We have either had
honest business practices clauses added to
the contracts or have the supplier sign an
honest business practices statement.
(2)Sales contracts: Honest business practices
clauses have been added to all such
contracts.
3. The Company also non-periodically holds
supplier conventions for suppliers of different
plants
integrity
management of suppliers.
advocate
the
for
to
Yes
(II) Has the company established a
dedicated
non-dedicated
or
department under the Board of
Directors
to ensure honest
business practices? Does this
department periodically report
their status of implementation
to the Board of Directors?
(II) Pursuant to Article 16 of our "Principles for
Honest Business Practices",
the Board of
Directors resolved and set up an "Honest
Business Practice Committee"
in 2015. The
Committee is responsible for establishing the
integrity management policies and misconduct
prevention programs and
the
implementation thereof. It periodically meets at
least once a quarter and regularly reports its
implementation status to the Board of Directors
annually.
supervising
The Company resolved at its 17th meeting of the
Board of Directors of the 18th term on November
Sustainable
establish
1,
2019
the
to
82
Implementation status
Assessment items
Yes No
Summary
Deviation from
Ethical Corporate
Management Best
Practice Principles
for TWSE/TPEx
Listed Companies
and reasons for
deviation
Development Committee, where all Independent
Directors act as committee members, and
change into promotion centers and merge into
its
the Sustainable Development Committee
Corporate Social Responsibility, Ethical Corporate
Management, Environment, Safety and Health
Management, Green Operation, Customer
and
Service
Employee Relations and Social Care Committees,
which are to be reviewed, supervised and
tracked by
the Sustainable Development
Committee. The committee meets twice a year,
and reports regularly to the Board on
its
implementation.
Supplier Management,
and
The Company's Ethical Management Promotion
Center is the responsible unit for formulating and
overseeing the implementation of the Company's
ethical management policies and preventive
measures. It is mainly put in charge of the
following matters and shall regularly report to
the Sustainable Development Committee and the
Board of Directors:
1. Assisting to
into
integrate honesty and ethical
operating
values
strategies, as well as formulating related
measures against corruption to ensure honest
business practices.
the Company's
2. Formulating programs
to guard against
dishonest behavior, as well as formulating
related standard operating procedures and
behavioral guidelines for work and business
operations within each program.
3. Making plans
for
functions;
internal departments,
organization and
installing a
mechanism for mutual supervision and check
& balance for business activities within the
operating scope with higher risks of dishonest
behavior.
4. Setting
in motion and coordinating
the
promotion and training for honest policies.
5. Making plans for a complaint filing system
of
the
effectiveness
while
ensuring
implementation.
6. Assisting the Board of Directors and the
to examine and evaluate
management
whether or not preventive measures to ensure
83
Corporate Governance Report
Implementation status
Assessment items
Yes No
Summary
Deviation from
Ethical Corporate
Management Best
Practice Principles
for TWSE/TPEx
Listed Companies
and reasons for
deviation
the
implementation of honest business
practices have been working effectively;
compiling regular reports based on the
compliance assessment of related business
procedures.
The Company’s Ethical Management Promotion
Team members are introduced as follows (with
different functions):
1. Secretary Office (Legal Division): Responsible
for the operation of the Ethical Management
Promotion Team,
the establishment and
revision of the Code of Business Integrity
Practice and its operating procedures and
guidelines, ensuring compliance with laws and
legal and effective
regulations as well as
implementation of
regulations, and
compiling regular reports based on the
compliance assessment of related business
procedures.
its
2. Promotion and Education (Human Resources
Division and Legal Division): Promoting and
highlighting the importance of integrity.
(1) HR: Training and education on
the
integrity culture and conduct.
(2) Legal: Training and education on legal
compliance.
3. Reward and punishment (Human Resources
Division): Establishing a clear and effective
disciplinary system as basis for performance
evaluation.
4. Supervision and management (Auditing Office)
(1) Offering suggestions for the supervision
and check and balance mechanism.
for a complaint
(2) Making plans
filing
system.
5. Execution
Units
(Division
Heads/Controllers/Function Heads):
(1) Cooperating with
the execution and
implementation of the operation of, and
matters
Ethical
the
relating
Management Promotion Team.
to,
(2) Regularly being supervised and audited.
(3) Formulating relevant operating rules for
specific preventive measures.
The Ethical Management Promotion Team
(Committee) held a total of four meetings during
84
Implementation status
Assessment items
Yes No
Summary
2020.
Deviation from
Ethical Corporate
Management Best
Practice Principles
for TWSE/TPEx
Listed Companies
and reasons for
deviation
Yes
(III) Has the company established
policies to prevent conflicts of
interest,
such
policies and provided adequate
channels of communication?
implemented
of
has
and
(IV) Has the Company established an
effective accounting system and
internal control system for the
ethical
implementation
management,
its
internal audit unit drawn up an
audit plan based on the results
of the assessment of the risk of
unethical conduct, in order to
verify compliance with such plan
for prevention of unethical
conduct, or has it engaged a CPA
firm to perform the audit?
(V) Does
the Company
regularly
conduct
internal and external
educational training on ethical
management?
Yes
Yes
training
The ethical management promotions and
the
educational
Promotion Team in 2020 is disclosed in this
annual report (V) Explanations for Educational
Training on Ethical Management.
implemented by
(III) The Company has established
the Ethical
Corporate Management Best Practice Principles
and the Procedures for Ethical Management and
Guidelines for Conduct to regulate Directors,
managers and employees in terms of obligations
to the Company, external business activities,
pecuniary transactions, avoidance of conflicts of
interest and the management of classified
information. The Company has a contact channel
on its website that provides a means for filing
complaints about violation of honest business
practice, a mailbox also exists on the employee
portal site, thus providing internal and external
personnel with a means to make suggestions to
the Company. Information received shall be
handled by the Auditing Office.
(IV) The Company actively works to ensure ethical
business practices. The Auditing Office (or hired
CPA, when necessary) shall regularly audit
to
relevant compliance statuses according
accounting policies, internal control policies, as
well as other relevant regulations. The Auditing
Office will periodically report its auditing results
during Board meetings.
(V) During new-employee training, the Company
periodically states its principles towards ethical
management practices. It also periodically holds
courses on corporate governance as well as
ethical management practices
asks
employees
to participate. The Company's
Procurement Department also informs suppliers
of our ethical management practices principles in
and
85
Corporate Governance Report
Implementation status
Assessment items
Yes No
Summary
Deviation from
Ethical Corporate
Management Best
Practice Principles
for TWSE/TPEx
Listed Companies
and reasons for
deviation
order to prevent unethical business practices.
1. A dedicated section for ethical management
was set up on the employee portal website on
May 15, 2017, where educational materials
regarding compliance are posted and the most
updated internal policies and regulations of
the Company from its internal platforms are
gathered, allowing all employees to read and
comprehend related information on ethical
management practices.
2. In April and May of 2020, we held a meeting
on compliance with the integrity management
regulations at each plant (Note 1).
3. In June 2020, we published the "Promotion for
Ethical Management" and "Antitrust Law You
Should All Know" on our internal platform
promoted
"Ethical Management"
"Competition
The
Boundaries of Joint Actions" to our directors
and senior executives in June of the same
year.
Cooperation
and
and
-
4. In October 2020, we published several
educational articles on compliance, such as
Legal Education and Ethical Management -
Commercial Bribery, for our relevant business
units, allowing all employees to read and
comprehend related information on ethical
management practices.
to
the
suppliers
5. The Company is committed to building a firm
and stable Walsin culture (from the company
side,
and
affiliates,
counterparties). In order to implement the
specific practices of the ethical management
policy and the project to prevent unethical
conduct
the
Company actively carried out complete
training on relevant topics such as ethical
management and legal compliance for staff in
all plants
in 2020: (1 hours per training
session)
anti-corruption),
(including
6. In addition, the Company actively promoted
the concept of ethical management and
intellectual property rights (including anti-
corruption) in different plants in 2020: (3
hours per training session)
Plant
No. of
Participating
86
Implementation status
Assessment items
Yes No
Summary
Yes
(I)
3.
Status
of
reporting mechanism
the
Company's
(I) Has the Company established
concrete reporting and rewards
set up convenient
systems,
reporting
and
appropriate,
any
appointed
dedicated staffer to deal with
the person who has been
reported?
channels
Yanshui and Taichung
Plants
Hsinchuang and
Yangmei Plants
Suppliers
33
48
The Company's website provides a "Reporting
Violations of Ethical Management Practices"
area, which allows people to file complaints
about violations against ethical management
practices. There is also a "company mailbox" on
the employee portal website, providing internal
and external personnel with a means to file
complaints. The Auditing Office is responsible for
and
handling
recommendations
violations.
the violations are verified,
disciplinary action shall be taken in accordance
with the Company's regulations.
related
If
Yes
Yes
Yes
(II) Has the Company established
standard operating procedures
for investigation of and related
confidentiality
information
mechanisms for complaints?
(III) Has the company adopted any
the
to
be
measure
informers
inappropriately treated?
protect
they
lest
4. Improved Information Disclosure
Has the Company disclosed the
content of its Ethical Corporate
Management
Practice
Principles as well as related
implementation results on
its
website and the MOPS?
Best
(II) The Company has formulated the "Measures for
Stakeholder Recommendations and Complaints,"
thereby protecting the identity as well as data of
those who provide suggestions or feedback.
(III) All reported cases are filed under the classified
category, with a case opened to handle the issue.
In addition, dedicated personnel are appointed
to handling related tasks and issues in order to
ensure the privacy of reporter and avoid unfair
revenge or treatment.
to disclose
its website
The Company has established a Corporate Governance
page on
its ethical
management-related information; it also discloses the
implementation status and execution results of its
ethical management practice in the annual CSR report
and
Corporate
Management Best Practice Principles, Procedures for
Ethical Management and Guidelines for Conduct,
Director Code of Ethical Conduct, and Employee Code
of Ethical Conduct on the MOPS.
Company's
Ethical
also
the
Deviation from
Ethical Corporate
Management Best
Practice Principles
for TWSE/TPEx
Listed Companies
and reasons for
deviation
In
line with the
Ethical Corporate
Management Best
Practice Principles
for
TWSE/TPEx
Listed Companies.
line with the
In
Ethical Corporate
Management Best
Practice Principles
TWSE/TPEx
for
Listed Companies.
5.
If the company has established its ethical corporate management principles in accordance with the "Ethical
Corporate Management Best Practice Principles for TWSE- and TPEx-listed Companies", please state the difference
between such principles and implementation: In line with the "Ethical Corporate Management Best Practice
Principles for TWSE/TPEx Listed Companies."
6. Other key information useful for explaining the status of the implementation of honest business practices: (Such as
87
Corporate Governance Report
Implementation status
Assessment items
Yes No
Summary
Deviation from
Ethical Corporate
Management Best
Practice Principles
for TWSE/TPEx
Listed Companies
and reasons for
deviation
the status of the Company's efforts to review and correct its Ethical Corporate Management Best Practice
Principles):
In order to encourage R&D, protect technology and R&D achievements, optimize processes, promote product
innovation, upgrade and smart manufacturing through the intellectual property rights system, thereby achieving a
high-value transformation strategy for the Company's growth, the Company introduced the Taiwan Intellectual
Property System (TIPS) in 2020 and reported the implementation status and annual plan at the board of directors'
meeting on November 13, 2020. On December 2, 2020, the Company was certified by TIPS and the certificate is valid
until December 31, 2021 (Note 2).
Note 1: Report on the implementation of the Company's ethical management risk assessment mechanism:
https://www.walsin.com/walsin/userfiles/file/RiskManagementReport2020.pdf
Note 2: The operation of the Company's intellectual property rights management:
https://www.walsin.com/walsin/userfiles/file/intellectual_property_management2020.pdf
(7)
If the company has formulated corporate governance principles as well as other related regulations,
it should disclose how they can be looked up: Our Company's corporate governance principles as well
as relative regulations can be looked up on our Company website.
88
(8) Other important information helpful for improving understanding of the governance of the company:
1. Further education on themes encompassing corporate governance the Company's Directors have received
in the most recent year:
Title
Name
Start Date
End Date
Organizer
Course name
Date
As of December 31, 2020
Hours
On this
date
Year
Total
Chairman
Yu-Lon
Chiao
2020/04/10
2020/04/10
2020/11/13
2020/11/13
Vice
Chairman
Patricia
Chiao
2020/04/10
2020/04/10
2020/11/13
2020/11/13
2020/04/10
2020/04/10
Taiwan
Governance Association
Corporate
Taiwan
Governance Association
Corporate
Taiwan
Governance Association
Corporate
Taiwan
Governance Association
Corporate
Taiwan
Governance Association
Corporate
2020/04/23
2020/04/23
Taiwan
Governance Association
Corporate
Directors
Yu-
Cheng
Chiao
2020/08/06
2020/08/06
Taiwan
Governance Association
Corporate
2020/08/06
2020/08/06
Taiwan
Governance Association
Corporate
2020/12/17
2020/12/17
2020/12/17
2020/12/17
2020/04/10
2020/04/10
Directors
Yu-Heng
Chiao
2020/11/13
2020/11/13
2020/12/17
2020/12/17
2020/12/17
2020/12/17
2020/09/21
2020/09/21
2020/10/16
2020/10/16
2020/10/21
2020/10/21
2020/11/03
2020/11/03
2020/11/13
2020/11/13
2020/04/10
2020/04/10
2020/11/13
2020/11/13
Director
Andrew
Hsia
Director
Wei-
Shin Ma
Taiwan
Governance Association
Corporate
Taiwan
Governance Association
Corporate
Taiwan
Governance Association
Corporate
Taiwan
Governance Association
Corporate
Taiwan
Governance Association
Corporate
Taiwan
Governance Association
Corporate
Taiwan
Exchange
Stock
Corporation/Taipei Exchange
Intellectual
Property
Management and Corporate
Management Risk
Securities
and
Institute
Taiwan
Governance Association
Taiwan Corporate
Governance Association
Corporate
Futures
Taiwan Corporate
Governance Association
Taiwan Corporate
Governance Association
Transformation
Value
Auditing
Enhancement - From Big Data Auditing to
Risk Intelligence Dashboard
and
Fast-Changing Semiconductor Industry
Transformation
Auditing
Value
Enhancement - From Big Data Auditing to
Risk Intelligence Dashboard
and
Fast-Changing Semiconductor Industry
and
Experience
Transformation
Auditing
Value
Enhancement - From Big Data Auditing to
Risk Intelligence Dashboard
Augmented Reality Technology and Smart
Sharing of
Manufacturing;
Growth of Sino-America Silicon Group
(formerly, Globalwafers) through Mergers
and Acquisitions
AI Embarks on an Evolutionary Path:
Evolutionary Calculation; Multi-Generational
Leadership in Pursuit of Communion
The New Digital Reality in the Post-COVID
Era; The Latest Development Trend of AIoT
and Its Application in Smart Manufacturing
How to Find a Solution for Idealism in
Chaos? Current International and Cross-
Strait Situation
Internet of Things, Big Data and Artificial
Intelligence; Managers' Responsibilities
Value
Transformation
Auditing
Enhancement - From Big Data Auditing to
Risk Intelligence Dashboard
and
Fast-Changing Semiconductor Industry
How to Find a Solution for Idealism in
Chaos? Current International and Cross-
Strait Situation
Internet of Things, Big Data and Artificial
Intelligence; Managers' Responsibilities
Agenda of the "Corporate Governance 3.0 -
A Blueprint for Sustainable Development"
Summit
Intellectual Property Management and
Corporate Management Risk
2020 Annual Briefing on Prevention of
Insider Trading and Insider Equity Trading
Civil and Criminal Liability of Directors of
Public Companies
Fast-Changing Semiconductor Industry
Transformation
Auditing
Value
Enhancement - From Big Data Auditing to
Risk Intelligence Dashboard
and
Fast-Changing Semiconductor Industry
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
6
6
18
12
15
6
89
Corporate Governance Report
Title
Name
Start Date
End Date
Organizer
Course name
Date
Hours
On this
date
Year
Total
2020/08/06
2020/08/06
Taiwan Corporate
Governance Association
Represen
tative of
Corporat
e Director
Pei-Ming
Chen
2020/08/06
2020/08/06
2020/11/13
2020/11/13
2020/12/17
2020/12/17
2020/12/17
2020/12/17
Taiwan Corporate
Governance Association
Taiwan Corporate
Governance Association
Taiwan Corporate
Governance Association
Taiwan Corporate
Governance Association
2020/04/29
2020/04/29
Taiwan
Governance Association
Corporate
2020/06/02
2020/06/02 Taiwan Securities Association
2020/07/07
2020/07/07 Taiwan Securities Association
2020/09/01
2020/09/01 Taiwan Securities Association
2020/09/09
2020/09/09
2020/09/09
2020/09/09
2020/10/21
2020/10/21
2020/10/30
2020/10/30
Independ
ent
Director
Ming-
Ling
Hsueh
Corporate
Corporate
Taiwan
Governance Association
Taiwan
Governance Association
Taiwan
Governance Association
Taiwan
Governance Association
Corporate
Corporate
2020/12/02
2020/12/02
Taiwan
Governance Association
Corporate
2020/12/22
2020/12/22
2020/12/31
2020/12/31
Corporate
Taiwan
Governance Association
Taiwan
Governance Association
Corporate
2020/04/10
2020/04/10
Taiwan
Governance Association
Corporate
2020/04/29
2020/04/29
2020/07/29
2020/07/29
Futures
and
Securities
Institute
Taiwan
Governance Association
Corporate
2020/04/10
2020/04/10
Taiwan
Governance Association
Corporate
2020/11/13
2020/11/13
2020/05/14
2020/05/14
Corporate
Taiwan
Governance Association
Securities
Institute
and
Futures
Independ
ent
Director
King-
Ling Du
Independ
ent
Director
Shiang-
Chung
Chen
Independ
ent
Fu-
Hsiung
90
AI Embarks on an Evolutionary Path:
Evolutionary Calculation; Multi-Generational
Leadership in Pursuit of Communion
The New Digital Reality in the Post-COVID
Era; The Latest Development Trend of AIoT
and Its Application in Smart Manufacturing
Fast-Changing Semiconductor Industry
How to Find a Solution for Idealism in
Chaos? Current International and Cross-
Strait Situation
Internet of Things, Big Data and Artificial
Intelligence; Managers' Responsibilities
The Trend of Global Corporate Sustainability
- Strategic Thinking on Connecting to SDGs
and Promoting Circular Economy
Risk Management Mechanism
the
Financial Industry in View of the Loss of
Issuance of Warrants by Securities Firms
Money Laundering Prevention Trends and
Policy Development after the Third Round of
Mutual Evaluation
The Financial Consumer Protection Act and
the Fair Dealing Principle
The Role of
in
Corporate Management and Governance (1)
The Role of
in
Corporate Management and Governance (2)
Independent Directors
Independent Directors
in
Ethical Management and ISO37001
Blueprint
Legal Issues Related to Material Internal
Corporate Information
The 16th Corporate Governance Summit-
Corporate Governance Moving Forward -
Corporate Governance
3.0,
Planning and Practice of Sustainable
Independent
Development
Blueprint,
Rights
and Management
Directors
Competition,
Audit
of
Supervision
Committee and Board of Directors on
Internal Control and Risk Management,
Supervision of Audit Committee and Board
of Directors on Mergers and Acquisitions
and Public Takeover Cases
The Role of
in
Corporate Management and Governance(3)
Strategies for Companies to Leverage the
Capital Market in Today's Environment
Auditing
Value
Transformation
Enhancement - From Big Data Auditing to
Risk Intelligence Dashboard
Corporate Sustainability Accelerators-CSRs,
ESGs and SDGs
Management Rights Competition and Case
Studies
Value
Auditing
Enhancement - From Big Data Auditing to
Risk Intelligence Dashboard
Independent Directors
Transformation
and
and
Fast-Changing Semiconductor Industry
analysis of corporate financial information
and its use for decision making
3
3
3
3
3
3
3
3
3
1
1
3
3
6
1
1
3
3
3
3
3
3
15
28
9
6
21
Title
Name
Start Date
End Date
Organizer
Course name
Date
Hours
On this
date
Year
Total
Director
Hu
2020/05/20
2020/05/20
2020/07/02
2020/07/02
2020/07/09
2020/07/09
Securities
Institute
Securities
Institute
Securities
Institute
and
Futures
and
Futures
and
Futures
Employee Compensation Strategies and
Tools
Money Laundering Prevention and Counter
Terrorism Practice
New Version of Corporate Governance and
the Guidelines for Exercise of Powers by the
Board of Directors
2020/11/13
2020/11/13
2020/12/08
2020/12/08
2020/12/22
2020/12/22
Corporate
Taiwan
Governance Association
Taiwan Academy of Banking
and Finance
Taiwan Academy of Banking
and Finance
Fast-Changing Semiconductor Industry
Corporate Governance Seminar - ESG and
Sustainable Governance
Operation Management Model by Emerging
Technologies
3
3
3
3
3
3
2. For the attendance of Board meetings by Directors, please refer to "Corporate Governance Report. 4. Status of
Corporate Governance (1), (2)."
3. Further education in corporate governance participated by the Company's managers (including President, Vice
President, Managers of BUs, Accounting head, Finance head, etc.) in 2020:
Title
Name
Start Date
End Date
Organizer
Course name
Date
As of December 31, 2020
Hours
On this
date
Year
Total
2020/04/10 2020/04/10
Taiwan
Governance Association
Corporate
President
Fred
Pan
2020/11/13 2020/11/13
2020/12/17 2020/12/17
Taiwan
Governance Association
Corporate
Taiwan
Governance Association
Corporate
2020/12/17 2020/12/17
Taiwan
Governance Association
Corporate
Executive Vice
President & Vice
C.C.
President of
Chen
2020/04/10 2020/04/10
Taiwan
Governance Association
Corporate
Finance
2020/11/13 2020/11/13
Taiwan
Governance Association
Corporate
President of
Kevin
Stainless Steel BG
Niu
2020/04/10 2020/04/10
Taiwan
Governance Association
Corporate
2020/11/13 2020/11/13
Taiwan
Governance Association
Corporate
President of
Jin-
Insulated Wire
Renn
2020/04/10 2020/04/10
& Cable BG
Leu
Taiwan
Governance Association
Corporate
President of
Commodity BG
Josh
Chia
2020/04/10 2020/04/10
Taiwan
Governance Association
Corporate
2020/11/13 2020/11/13
Head of
Sherry 2020/04/10 2020/04/10
Taiwan
Governance Association
Taiwan
Governance Association
Corporate
Corporate
Risk
Risk
Semiconductor
Semiconductor
Auditing Transformation and Value
- From Big Data
Enhancement
Auditing
Intelligence
to
Dashboard
Fast-Changing
Industry
How to Find a Solution for Idealism in
Chaos? Current
International and
Cross-Strait Situation
Internet of Things, Big Data and
Artifical
Intelligence; Managers'
Responsibilities
Auditing Transformation and Value
- From Big Data
Enhancement
Intelligence
to
Auditing
Dashboard
Fast-Changing
Industry
Auditing Transformation and Value
- From Big Data
Enhancement
Auditing
Intelligence
to
Dashboard
Fast-Changing
Industry
Auditing Transformation and Value
- From Big Data
Enhancement
Auditing
Intelligence
to
Dashboard
Auditing Transformation and Value
- From Big Data
Enhancement
Auditing
Intelligence
to
Dashboard
Fast-Changing
Industry
Auditing Transformation and Value
- From Big Data
Enhancement
Semiconductor
Semiconductor
Risk
Risk
Risk
3
3
3
3
3
3
3
3
3
3
3
3
12
6
6
3
6
12
91
Corporate Governance Report
Title
Name
Start Date
End Date
Organizer
Course name
Date
Hours
On this
date
Year
Total
to
Risk
Intelligence
Semiconductor
Auditing
Dashboard
Group Tax Management Trends in the
Post-COVID Era
2020 Annual Briefing on Prevention of
Insider Trading and Insider Equity
Trading
Fast-Changing
Industry
Auditing Transformation and Value
- From Big Data
Enhancement
Auditing
Intelligence
to
Dashboard
Fast-Changing
Industry
Continuing Education Course
Accounting Supervisors of
Securities Firms and Stock Exchanges
for
Issuer,
Semiconductor
Risk
3
3
3
3
3
3
9
Corporate
Ho
Governance
2020/10/16 2020/10/16
2020/10/22 2020/10/22
2020/11/13 2020/11/13
Taiwan
Governance Association
Corporate
Securities
Institute
and
Futures
Taiwan
Governance Association
Corporate
2020/04/10 2020/04/10
Taiwan
Governance Association
Corporate
Director of
Richard
Accounting
Wu
2020/11/13 2020/11/13
2020/12/3 2020/12/4
Taiwan
Governance Association
Corporate
Accounting Research
Development Foundation
and
92
(9) Implementation Status of Internal Control System
1. Statement on Internal Control
Walsin Lihwa Corporation
Statement on Internal Control System
Date: February 26, 2021
In 2020, the Company conducted an internal examination in accordance with its Internal Control Regulations
and hereby declares as follows:
1. The Company is aware that it is the Board’s and managers' responsibility to establish, implement and
maintain an internal control system, and the Company has set up such a system. The purpose of the
system is to ensure the effectiveness and efficiency (including profitability, performance and protection of
assets) of the Company's operations, compliance with relevant laws and regulations and that its financial
statements are reliable, up to date and easily accessible.
Internal control systems have their inherent limitations. No matter how well they are designed, an
effective internal control system can only reasonably ensure achievement of the three above objectives.
In addition, an internal control system's effectiveness may change as the environment and circumstances
change. The internal control system of the Company features a self-monitoring mechanism. Once
identified, the Company will take actions to rectify any deficiency.
2.
3. The Company determines whether the design and implementation of its internal control system is
effective by referring to the criteria stated in the Regulations Governing Establishment of Internal Control
Systems by Public Companies (hereinafter the "Regulations"). The Regulations provides measures for
judging the effectiveness of the internal control system. There are five components of an internal control
system, as specified in the Regulations, which are broken down based on the management-control
process, namely: (1) control environment, (2) risk evaluation, (3) control operation, (4) information and
communication and (5) monitoring. Each of the elements in turn contains certain audit items. Refer to the
Regulations for details.
4. The Company uses the above criteria to determine whether the design and implementation of its internal
control system is effective.
5. After an evaluation of the Company's internal control system based on the above criteria, the Company is
of the opinion that, as of December 31, 2020, its internal control system (including supervision and
management of subsidiaries) is effective and therefore can reasonably ensure achievement of the above
objectives, which include awareness of the degree to which operating results and goals are achieved,
compliance with the law and that its financial reporting is reliable, up to date and easily accessible.
6. This statement shall become a principal part of the Company's annual report and prospectus and be made
available to the public. Any illegal misrepresentation or omission relating to the public statement above is
subject to the legal consequences under Articles 20, 32, 171 and 174 of the Securities and Exchange Act.
7. This statement has been approved on February 26, 2021 by the Board, with none of the 11 Directors
present opposing it.
Walsin Lihwa Corporation
Chairman: Yu-Lon Chiao
President: Fred Pan
93
Corporate Governance Report
2. If CPAs are engaged to review the internal control system, their report shall be disclosed: None.
(10) Where the Company and its personnel have been penalized according to the law, or the Company has
penalized its personnel for having violated its internal control system (and if the result of the penalty
is likely to have a material impact on shareholders' interests or the price of securities) as of the day
when the annual report was prepared in the most recent year, the contents of such penalty, major
deficiencies and corrective actions shall be specified: None.
(11) In the most recent year, resolutions passed at the AGM and board meetings, as of the day the annual
report was prepared.
The Company hosted its 2019 AGM on May 24, 2019 at the 1st Floor Multimedia Conference Room, No.15, Alley
168, Xingshan Road, Neihu District, Taipei City. The following decisions, with implementation details, were made
during the meeting:
Matters for Approval and Discussion :
Proposal No. 1
Description:
Acknowledgement of the Company's 2018 Business Report, Balance Sheet, Consolidated
Income Statement, Changes in Equity Statement and Cash Flow Statement.
Resolution:
According to the voting result, the number of affirmative votes exceeded the legal threshold,
so the proposal was passed.
Implementation
This was announced as an important resolution on the day of the Shareholders Meeting.
Status:
Proposal No. 2
Description:
Acknowledgement of the Company's 2018 Profit Distribution Table.
Resolution:
According to the voting result, the number of affirmative votes exceeded the legal threshold,
so the proposal was passed.
Implementation
June 24, 2019 was the ex-dividend record date and the dividends were paid out on July 17,
Status:
2019. (Cash dividend of NT$1.2 was paid per share.)
Proposal No. 3
Description:
Amendments to the Company's Regulations Governing Acquisition or Disposal of Assets.
Resolution:
According to the voting result, the number of affirmative votes exceeded the legal threshold,
so the proposal was passed.
Implementation
Relevant operations were handled in accordance with the amended procedures and the
Status:
revised articles were disclosed on our official website.
Proposal No. 4
Description:
Amendments to the Company's Procedures for Financial Derivatives Transactions.
Resolution:
According to the voting result, the number of affirmative votes exceeded the legal threshold,
so the proposal was passed.
Implementation
Relevant operations were handled in accordance with the amended procedures and the
Status:
revised articles were disclosed on our official website.
Proposal No. 5
Description:
Amendments to the Company's Procedures for Lending Capital to Others and Procedures for
Endorsements and Guarantees.
Resolution:
Relevant operations were handled in accordance with the amended procedures and the
revised articles were disclosed on the MOPS as well as our official website.
94
Implementation
Relevant operations were handled in accordance with the amended procedures and the
Status:
revised articles were disclosed on the MOPS as well as our official website.
Proposal No. 6
Description:
Amendments to the Company's Methods of Election of Directors of the Board.
Resolution:
7 Directors: Yu-Lon Chiao, Patricia Chiao, Yu-Cheng Chiao, Yu-Heng Chiao, Andrew Hsia, Wei-
Shin Ma and Chin-Xin Investment Co., Ltd.
4 Independent Directors: Ming-Ling Hsueh, King-Ling Du, Shiang-Chung Chen and Fu-Hsiung
Hu
Implementation
Relevant operations were handled in accordance with the amended procedures and the
Status:
revised articles were disclosed on the MOPS as well as our official website.
Proposal No. 7
Description:
Lifting the non-competition ban on directors imposed by Article 209 of the Company Act.
Resolution:
According to the voting result, the number of affirmative votes exceeded the legal threshold,
so the proposal was passed.
Implementation
This was announced as a piece of material information on the day of the Shareholders'
Status:
Meeting.
Important resolutions adopted by 2020 Board meetings as of the day of this annual report
2020/01/10 (18th Meeting of the 18th Term)
Important
Proposal for the replacement of CPAs due to internal rotation mechanism of Deloitte Taiwan, and
Resolution:
the annual remuneration payable to the CPA firm and the assessment of the independence and
suitability of the CPAs.
Results:
Proposal passed.
Important
The Company intends to increase the capital of its subsidiary, Walsin Nickel Industrial Indonesia, to
Resolution:
construct a nickel pig iron plant and power plant at PT Indonesia Morowali Industrial Park,
Indonesia. Please review and approve the same.
Result:
Proposal Passed.
Important
The Company intends to purchase two-year US$178.5 million corporate bonds issued by Golden
Resolution:
Harbour International Pte. Ltd. to develop nickel iron and stainless steel raw material procurement
business. Please review and approve the same.
Result:
Proposal Passed.
Important
The Company intends to extend a loan to Walsin Nickel Industrial Indonesia in the amount of
Resolution:
US$250 million. Please review and approve the same.
Result:
Important
Resolution:
Result:
Important
Resolution:
Proposal Passed.
Proposal to approve the loans from Walsin International Investment and Walsin Lihwa Holding
Limited to the Company and its subsidiaries in a total of US$582 million and RMB1,127 million.
Proposal Passed.
Proposal to sell the real estate held by Walsin Lihwa (Changzhou) Investment Co., Ltd. to Nanjing
Walsin Property Management Co., Ltd. and liquidate Walsin Lihwa (Changzhou) Investment Co.,
Result:
Ltd.
Proposal Passed. (Under specific conditions, the third parties have first priority.)
Proposal to liquidate Energy Pilot Limited, a BVI holding company.
Important
Resolution:
95
Corporate Governance Report
Result:
Proposal Passed.
Important
Proposal to review managers' performance evaluation as well as bonuses and compensation for
Resolution:
2019.
Result:
Proposal Passed.
Important
Proposal for the distribution of the performance bonus for Chairman and Vice Chairman for 2019.
Resolution:
Result:
Recusal:
Proposal Passed.
Yu-Lon Chiao and Patricia Chiao
2020/02/27 (19th Meeting of the 18th Term)
Important
Resolution:
Distribution of remuneration to directors and employees for 2019.
Result:
Proposal Passed.
Important
Resolution:
Proposal to change the internal audit manager.
Result:
Proposal Passed.
Important
Resolution:
Proposal of the 2019 Profit Distribution Table.
Result:
Proposal Passed.
Important
Resolution:
Proposal of the 2019 Internal Control System Statement.
Result:
Proposal Passed.
Important
Resolution:
Result:
Important
Resolution:
Result:
Recusal:
Important
Resolution:
Amendments to the Company’s Articles of Incorporation.
Proposal Passed.
Proposal to lift the non-competition ban for the Company’s Directors of the 19th term
Proposal Passed.
Related directors recused themselves according to their potential conflict of interest.
Approval for holding the 2020 AGM regularly.
Result:
Proposal Passed.
Important
PT. Walsin Lippo Industries intends to invest about US$27 million to build a medium and high
Resolution:
voltage cable plant.
Result:
This proposal was withdrawn after the Chairman obtained the consent of all of the directors
present and acting by proxy because it was proposed to plan the timetable again.
Proposal to acquire new shares in HannStar Color Co. in an amount not exceeding NT$540 million.
Proposal Passed.
Wei-Shin Ma
Important
Resolution:
Result:
Recusal:
2020/03/18 (20th Meeting of the 18th Term)
Important
Resolution:
Result:
It is proposed to advance the bankruptcy consortium's expenses in the bankruptcy proceedings of
Powtec ElectroChemical Corporation in the amount not exceeding NT$150 million.
Proposal passed.
2020/04/10 (21st Meeting of the 18th Term)
96
Proposal to lift the non-competition ban for the Company’s Directors of 19th term.
Proposal passed.
Proposal to amend the Company's Corporate Social Responsibility Best Practice Principles.
Important
Resolution:
Result:
Important
Resolution:
Result:
Proposal passed.
Important
Proposal to amend certain provisions of the Company's Corporate Governance Best Practice
Resolution:
Principles.
Result:
Proposal passed.
Important
Proposal to amend certain provisions of the Company's Procedures for Ethical Management and
Resolution:
Guidelines for Conduct.
Proposal passed.
Proposal to amend the Company's Procedures for Financial Derivatives Transactions.
Result:
Important
Resolution:
Result:
Proposal passed.
Important
Resolution:
Proposal to add an agenda of the 2020 AGM of the Company.
Result:
Proposal passed.
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Proposal to change the Company's managerial officers.
Proposal passed.
Proposal to approve the investment to be made by a subsidiary of the Company, Walsin Nickel
Industrial Indonesia, in building a nickel pig iron plant and a power plant in Indonesia, in the
amount of US$350 million.
Proposal passed.
Proposal to repurchase 40 million shares of the Company's stock on the centralized exchange
market and to register the cancellation of such shares within six months from the date of
repurchase.
Result:
Proposal passed.
2020/05/29 (1st Meeting of the 19th Term)
Important
Resolution:
Election of the Chairman and Vice Chairman of the Company.
Result:
Proposal passed.
2020/08/04 (2nd Meeting of the 19th Term)
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
In response to the reorganization of the Board of Directors, it is proposed to appoint four
independent directors, Mr. Ming-Ling Hsueh, Mr. King-Ling Du, Mr. Shiang-Chung Chen and Mr.
Fu-Hsiung Hu, as members of the Compensation Committee of the Company of the fourth term for
the period from August 4, 2020 to May 28, 2023 (the date of expiration of the current term of the
Board of Directors).
Proposal passed.
Proposal to amend the Company's Compensation Committee Charter.
Proposal passed.
Proposal to engage the Company's Sustainable development committee members of the second
term in response to the reorganization of the Company's Board of Directors.
Result:
Proposal passed.
97
Corporate Governance Report
Important
Resolution:
Proposal to amend certain provisions of the Company's Board of Directors Meeting Regulations.
Result:
Proposal passed.
Important
Proposal to amend certain provisions of the Company's Ethical Conduct Guidelines for Directors of
Resolution:
the Board
Result:
Proposal passed.
Important
Proposal to amend the Company's internal control system - Internal Control System for Stock
Resolution:
Service Office.
Result:
Proposal passed.
Important
Resolution:
Proposal to change the Company's managerial officers.
Result:
Proposal passed.
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Result:
Proposal to set a record date for cancellation of the Company's twenty-fourth share repurchase of
40 million shares for the capital reduction.
Proposal passed.
Proposal to approve the loan of funds from Walsin Lihwa (China) Investment Co., Ltd. to Hangzhou
Walsin Power Cable & Wire in the amount of RMB 80 million for the period of one year.
Proposal passed.
Proposal to approve the loan of funds from the Company to Walsin Nickel Industrial Indonesia in
the form of a US$250 million three-year non-revolving facility and a US$70 million one-year
revolving facility.
Proposal passed.
The Company intends to apply for an overseas investment facility of NT$1.2 billion from the
Export-Import Bank of the Republic of China.
Proposal passed.
Proposal to repurchase 60 million shares of the Company's stock on the centralized exchange
market and to register the cancellation of such shares within six months from the date of
repurchase.
Proposal passed.
2020/11/13 (3rd Meeting of the 19th Term)
Important
Resolution:
Result:
Important
Proposal to amend the Company's Rules for Suggestions and Complaints from Related Parties.
Proposal passed.
Proposal to amend the Rules for Board of Directors' Performance Evaluation and their related
Resolution:
schedules.
Result:
Proposal passed.
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Proposal to set a record date for cancellation of the Company's twenty-fifth share repurchase of 60
million shares for the capital reduction.
Proposal passed.
In order to establish a vertically integrated cable smart base and logistics center, it is proposed to
establish a new low-voltage wire and cable production line for construction use and a three-
dimensional automatic warehouse at its Yangmei Plant, and to build a factory and purchase
equipment.
Proposal passed.
Proposal to lift the non-competition ban on the Company's managerial officers.
Result:
Proposal passed.
98
Important
Resolution:
Result:
Important
Resolution:
Proposal to reduce the capital of Walsin Specialty Steel Holding Co., Ltd. by US$54 million.
Proposal passed.
Proposal to the new loan of funds from Walsin Info-Electric Inc. to the Company in the form of a
NT$130 million non-revolving facility.
Result:
Proposal passed.
2020/11/20 (4th Meeting of the 19th Term)
Important
Resolution:
Proposal to conduct a share swap by issuing new shares as the consideration for the assumption of
newly issued shares of TECO Electric and Machinery Co., Ltd.
Result:
Proposal passed.
2021/01/22 (5th Meeting of the 19th Term)
Important
Proposal to evaluate the annual compensation of the CPAs and the independence and suitability
Resolution:
thereof.
Result:
Important
Proposal passed.
Proposal to approve the loans from the subsidiary to the Company and its other subsidiaries in a
Resolution:
total of US$682 million and RMB1,127 million.
Result:
Proposal passed.
Important
The Company intends to acquire additional shares of TECO Electric and Machinery Co., Ltd. for not
Resolution:
more than NT$1.8 billion.
Result:
Proposal passed.
Important
Proposal to review managers' performance evaluation as well as bonuses and compensation for
Resolution:
2020.
Result:
Proposal Passed.
Important
Resolution:
Result:
Recusal:
Proposal for the distribution of the performance bonus for Chairman and Vice Chairman for 2020.
Proposal Passed.
Yu-Lon Chiao and Patricia Chiao
2021/02/26 (6th Meeting of the 19th Term)
Important
Distribution of remuneration to directors and employees for 2020.
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Proposal passed.
Proposal of the 2020 Profit Distribution Table.
Proposal passed.
Proposal of the 2020 Internal Control System Statement.
Proposal passed.
Amendments to the Company’s Articles of Incorporation.
Result:
Proposal passed.
Important
Resolution:
Amendments to the Company’s Shareholder Meeting Regulations.
Result:
Proposal passed.
Important
Proposal to lift the non-competition ban for the Company’s Directors according to Article 209 of
99
Corporate Governance Report
Resolution: the Company Act.
Result:
Proposal passed.
Recusal:
Important
Resolution:
Yu-Lon Chiao and Wei-Shin Ma
Approval for holding the 2021 AGM regularly.
Result:
Proposal passed.
Important
Proposal to inject a capital of US$45 million from Walsin Lihwa Holding Co., Ltd. to Walsing
Resolution:
International Investment Co., Ltd.
Result:
Important
Resolution:
Proposal passed.
Proposal to approve the loan of funds by Walsing International Investment Co., Ltd. and to the
Company, in a total amount of US$45 million.
Result:
Proposal passed.
Important
Resolution:
The Company intends to issue domestic secured corporate bonds for the purpose of enhancing its
medium- and long-term working capital and strengthening its financial structure.
Result:
Proposal passed.
Important
Resolution:
Walsin Lihwa Holding Co., Ltd., a subsidiary of the Company, proposes to transfer all of its shares of
Borrego Solar Systems, Inc. to the Company at fair value, and to reduce its capital by the same
amount.
Result:
Proposal passed.
Important
Resolution:
Walsin Specialty Steel Holding Co., Ltd., a subsidiary of the Company, proposes to transfer all of its
shares of Walsin Precision Technology Sdn. Bhd., Inc. to the Company at fair value, and to reduce
its capital by the same amount.
Result:
Proposal passed.
Important
Resolution:
Jiangying Walsin Steel Cable Co., Ltd., a subsidiary of the Company, proposes to sell all of its real
estate to Jiangyin Walsin Specialty Alloy Materials Co., Ltd. at a transaction price of RMB62.57
million.
Result:
Proposal passed.
(12)
(13)
In the most recent year, as of the day the annual report was prepared, directors held different
opinions (on record or with written statement) about important resolutions passed at Board meetings
and the major contents are: None.
In the most recent year, as of the day the annual report was prepared, any of Chairman, President,
accounting manager, financial manager, internal audit manager, corporate governance manager and
R&D manager resigned or was discharged:
Title
Name
Date of appointment
Date of dismissal
As of March 30, 2021
Reason for resignation
or dismissal
Chief Audit
Executive
Yi-Chen Feng
2013/08/12
2020/04/01
Position Adjustment
Financial Manager
Josh Chia
2019/06/12
2020/08/04
Position Adjustment
Head of Corporate
Governance
Sherry Ho
2019/06/12
2021/01/22
Position Adjustment
100
5.
Information on CPAs' fees
(I) CPA fee schedule
Name of CPA firm
CPA name
Period of the Audit
Remarks
Deloitte Touche Tohmatsu
Limited
Wen-Ya Hsu
Kuan-Chung
Lai
2020/1/1 ~ 2020/12/31
None
Item
Audit fees
Non-audit fees
Total
Unit: NT$ thousands
Fee schedule
1
Less than 2,000
2 2,000 (inclusive) ~ 4,000
3 4,000 (inclusive) ~ 6,000
4 6,000 (inclusive) ~ 8,000
5 8,000 (inclusive) ~ 10,000
6 10,000 (inclusive) and above
14,100
11,151
25,251
(II) Paying at least one-fourth of non-audit fees to the certifying CPA, the certifying CPA firm and its affiliates:
Name of CPA
firm
CPA name
Audit
fees
d
e
s
i
g
n
S
y
s
t
e
m
Non-audit fees
H
u
m
a
n
R
e
s
o
u
r
c
e
s
r
e
g
i
s
t
r
a
t
i
o
n
B
u
s
i
n
e
s
s
O
t
h
e
r
s
S
u
b
-
t
o
t
a
l
Unit: NT$1,000
CPA audit period
Remarks
Wen-Ya
Hsu
Kuan-
Chung Lai
Deloitte
Touche
Tohmatsu
Limited
14,100 7,612
40 -
3,499
11,15
1
2020/01/01 ~ 2020/12/31
Other non-
audit fees: CSR
consulting,
CSR reports,
agreed-upon
procedures
result reports
and public
statements
(III) Change of CPA firm and the audit fees paid in the year of the change are less than those paid in the
previous year: Not applicable.
(IV) Audit fees paid in the current year are at least 10% less than those paid in the previous year: Not
applicable.
101
Corporate Governance Report
6.
Information on the replacement of CPAs:
(I) About the previous CPAs:
Date of replacement
Reason for the replacement and
explanation
Explain whether the appointer
terminates or CPA refuses to
accept appointment
Signing an audit report other
than without reservation in the
most recent two years and the
reason
January 10, 2020
Organizational changes of Deloitte Touche Tohmatsu Limited
Contracting parties
Accountants
Appointer
Not applicable.
Situation
Voluntarily terminates
appointment
Refuses to accept (continued)
appointment
In 2019 and 2018 respectively, the CPAs signed an unmodified opinion with other
matter paragraph because the opinion expressed by the CPAs adopted the audit
report of other CPAs.
Not applicable.
Not applicable.
Not applicable.
Do they have opinions different
from the issuer?
Yes
Other disclosures
None
Description: None.
None.
(II) About the succeeding CPAs:
Name of CPA firm
CPA name
Date of appointment
Before appointment, any consultations and results that
may be reported on the accounting methods or
principles on specific transactions
Succeeding CPAs' written opinions that are different
from those of the previous CPAs
(III) Previous CPAs' letter in reply: Not applicable.
Accounting principles or practice
Disclosure in financial statements
Audit scope or process
Other
Deloitte Touche Tohmatsu Limited
Wen-Ya Hsu and Kuan-Chung Lai
January 10, 2020
None.
None.
7. Chairman, President, or managers responsible for financial or accounting affairs who worked for
the firm to which the certifying CPA belongs or its affiliate in the most recent year: None.
102
8. Transfer and pledge of shares of the directors, managers and shareholders holding more than
10% of the company's shares
(I) Changes to the shares of the directors, managers and shareholders holding more than 10% of the
company's shares:
Title
Name
Chairman
Vice Chairman
Director
Director
Director
Director
Director
Director
Independent Director
Independent Director
Independent Director
Independent Director
Yu-Lon Chiao
Patricia Chiao
Yu-Cheng Chiao
Yu-Heng Chiao
Hui-Ming Cheng (Note 1)
Andrew Hsia (Note 2)
Wei-Shin Ma
Chin-Xin Investment Co.,
Ltd.
Representative: Tung-Yi
Chan (Note 1)
Representative: Pei-
Ming Chen (Note 2)
Ming-Ling Hsueh
King-Ling Du
Shiang-Chung Chen
Steve Ruey Long Chen
(Note 1)
Fu-Hsiung Hu (Note 2)
Fred Pan
C.C. Chen
Independent Director
President and Senior General
Manager of Real Estate BG
Executive Vice President & Vice
President of Finance
President of Insulated Wire &
Cable BG
President of Stainless Steel BG
President of Commodity BG
Head of Corporate Governance Hueiping Lo (Note 3)
Head of Accounting Dept.
Vice President
Kevin Niu
Josh Chia
Jin-Renn Leu
Richard Wu
Steve Ruey Long Chen
(Note 3)
Tain-Rong Chen (Note 4)
Witty Liao (Note 4)
Senior General Manager of
Stainless Steel BU
Senior General Manager of
Copper Wire BU
Chief Information Officer
Chief of Staff and Head of
Human Resources Department
Head of Corporate Governance Sherry Ho (Note 5)
Shareholders holding over 10%
of outstanding shares
David Liou (Note 4)
Allen Hsu (Note 4)
None
No. of shares
held
Increase
(decrease)
0
0
0
2,610,000
(200,000)
(270,000)
0
0
10,000,000
0
0
0
0
0
0
0
0
0
0
20,000
0
0
0
0
0
0
0
0
0
-
2020
Shares pledged
Increase (decrease)
Current fiscal year up
to March 30, 2021
Shares
No. of
pledged
shares held
Increase
Increase
(decrease)
(decrease)
(5,000,000) 1,200,000
0
20,000,000 1,200,000 20,000,000
0
0 1,152,890
(5,000,000)
870,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-
0
0
0
0
-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-
0
0
0
0
0
-
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-
103
Corporate Governance Report
Note 1: Those directors were dismissed due to expiry of their term of office on May 29, 2020, and the change to the
shares held by them was calculated until such date.
Note 2: Those directors were newly appointed on May 29, 2020, and the change to the shares held by them was
calculated commencing from such date.
Note 3: Ms. Hueiping Lo was newly appointed on January 22, 2021; the change to the shares held by her was calculated
commencing from such date.
Note 4: Those officers transferred to other posts effective from April 1, 2020, and the change to the shares held by
them was calculated until such date.
Note 5: Ms. Sherry Ho transferred to other post effective from January 22, 2021; the change to the shares held by her
was calculated until such date.
(2) Information on change in the number of shares retained:
Name
Reason for
Share Transfer
Transaction Date
Counterparty
Relationship between
counterparty and the
Company, Directors, and
shareholders who hold
more than 10% of all
shares
Number of
Shares
Transaction
Price
Yu-Heng Chiao Disposal: Gift
Yu-Heng Chiao Disposal: Gift
Yu-Heng Chiao Disposal: Gift
Yu-Heng Chiao Disposal: Gift
2020/7/29
2020/7/29
2020/7/29
2020/7/29
Zi-Rui Chiao
Zi-Jun Chiao
Zi-Yu Chiao
Zi-Yue Chiao
Son
Son
Son
Son
50,000
50,000
50,000
50,000
13.9
13.9
13.9
13.9
(3) Information on Share Pledges: None
104
9. Information on relationships amongst the top ten shareholders and their relationships with
spouses or relatives within the second degree of kinship
Shares Held Themselves
Shares Held by Spouse
and Underage Children
Shares Held Under
Name of Others
Number of Shares
Percenta
ge
Number of
Shares
Percent
age
Number of
Shares
Percen
tage
As of March 30, 2021
Name and relationships of
related parties to top ten
shareholders (spouse and
relatives within the second
degree) (Note 1)
Name
Relationship
Rem
arks
247,025,000
7.20%
-
-
-
- -
-
Note
2
Name
LGT Bank
(Singapore)
Investment Fund
under the
custody of
Business
Department,
Standard
Chartered Bank
(Taiwan) Ltd.
Winbond
Electronics
Corporation
222,000,000
6.47%
-
-
-
-
Representative of
Winbond
Electronics
Corporation
: Yu-Cheng Chiao-
40,661,551
1.19%
19,032,428
0.55%
0 0.00%
Chin-Xin
Investment
Co., Ltd
Huali
Investment
Co., Ltd.
Patricia
Chiao
Yu-Heng
Chiao
Chin-Xin
Investment
Co., Ltd
Huali
Investment
Co., Ltd.
Patricia
Chiao
Yu-Heng
Chiao
Its chairman is
the same as the
chairman of said
institutional
shareholder
Its chairman is a
second-degree
relative of the
chairman of said
institutional
shareholder
She is a second-
degree relative
of the chairman
of said
institutional
shareholder
He is a second-
degree relative
of the chairman
of said
institutional
shareholder
Its chairman is
the same as the
chairman of said
institutional
shareholder
Its chairman is a
second-degree
relative of the
chairman of said
institutional
shareholder
She is a second-
degree relative
of the chairman
of said
institutional
shareholder
Second degree
of kinship with
the chairman of
-
-
-
-
-
-
-
-
105
Corporate Governance Report
Shares Held Themselves
Shares Held by Spouse
and Underage Children
Shares Held Under
Name of Others
Name
Number of Shares
Percenta
ge
Number of
Shares
Percent
age
Number of
Shares
Percen
tage
Chin-Xin
Investment Co.,
Ltd
220,011,000
6.41%
-
-
-
-
Representative of
Chin-Xin
Investment Co.,
Ltd
: Yu-Cheng Chiao
40,661,551
1.19%
19,032,428
0.55%
-
-
As of March 30, 2021
Name and relationships of
related parties to top ten
shareholders (spouse and
relatives within the second
degree) (Note 1)
Name
Relationship
Rem
arks
the said
institutional
shareholder
Its chairman is
the same as the
chairman of said
institutional
shareholder
Its chairman is a
second-degree
relative of the
chairman of said
institutional
shareholder
She is a second-
degree relative
of the chairman
of said
institutional
shareholder
He is a second-
degree relative
of the chairman
of said
institutional
shareholder
Its chairman is
the same as the
chairman of said
institutional
shareholder
Its chairman is a
second-degree
relative of the
chairman of said
institutional
shareholder
She is a second-
degree relative
of the chairman
of said
institutional
shareholder
He is a second-
degree relative
of the chairman
of said
institutional
shareholder
Winbond
Electronics
Corporatio
n
Huali
Investment
Co., Ltd.
Patricia
Chiao
Yu-Heng
Chiao
Winbond
Electronics
Corporatio
n
Huali
Investment
Co., Ltd.
Patricia
Chiao
Yu-Heng
Chiao
-
-
-
-
-
-
-
-
106
Shares Held Themselves
Shares Held by Spouse
and Underage Children
Shares Held Under
Name of Others
Name
Number of Shares
Percenta
ge
Number of
Shares
Percent
age
Number of
Shares
Percen
tage
As of March 30, 2021
Name and relationships of
related parties to top ten
shareholders (spouse and
relatives within the second
degree) (Note 1)
Name
Relationship
Rem
arks
TECO Electric and
Machinery Co.,
205,332,690
5.98%
-
-
-
- None
None
Ltd.
Huali Investment
Co., Ltd.
100,000,000
2.91
-
-
-
Huali Investment
Co., Ltd.
Representative:
Yu-Chi Chiao-
51,635,470
1.50%
2,814,471
0.08%
-
-
Winbond
Electronics
Corporatio
n
Chin-Xin
Investment
Co., Ltd
Patricia
Chiao
Yu-Heng
Chiao
Winbond
Electronics
Corporatio
n
Chin-Xin
Investment
Co., Ltd
Patricia
Chiao
Yu-Heng
Chiao
Its chairman is a
second-degree
relative of the
chairman of said
institutional
shareholder
Its chairman is a
second-degree
relative of the
chairman of said
institutional
shareholder
She is a second-
degree relative
of the chairman
of said
institutional
shareholder
He is a second-
degree relative
of the chairman
of said
institutional
shareholder
Its chairman is a
second-degree
relative of the
chairman of said
institutional
shareholder
Its chairman is a
second-degree
relative of the
chairman of said
institutional
shareholder
She is a second-
degree relative
of the chairman
of said
institutional
shareholder
He is a second-
degree relative
of the chairman
of said
institutional
shareholder
Rong Jiang Co.,
Ltd.
98,294,000
2.86%
Patricia Chiao
93,169,006
2.72%
-
-
-
-
-
-
- None
None
-
Winbond
Electronics
Corporatio
n
Chin-Xin
Investment
Its chairman is a
second-degree
relative of said
shareholder
Its chairman is a
second-degree
-
-
-
-
-
-
-
-
-
-
-
-
107
Corporate Governance Report
As of March 30, 2021
Shares Held Themselves
Shares Held by Spouse
and Underage Children
Shares Held Under
Name of Others
Name
Number of Shares
Percenta
ge
Number of
Shares
Percent
age
Number of
Shares
Percen
tage
Yu-Heng Chiao
61,072,197
1.78%
13,065,390
0.38%
-
-
Name and relationships of
related parties to top ten
shareholders (spouse and
relatives within the second
degree) (Note 1)
Name
Relationship
Co., Ltd
Huali
Investment
Co., Ltd.
Yu-Heng
Chiao
Winbond
Electronics
Corporatio
n
Chin-Xin
Investment
Co., Ltd
Huali
Investment
Co., Ltd.
Patricia
Chiao
relative of said
shareholder
Its chairman is a
second-degree
relative of said
shareholder
He is a second-
degree relative
of said
shareholder
Its chairman is a
second-degree
relative of said
shareholder
Its chairman is a
second-degree
relative of said
shareholder
Its chairman is a
second-degree
relative of said
shareholder
He is a second-
degree relative
of said
shareholder
Investment
Account of
Banque Pictet &
CIE SA under the
custody of HSBC
Norges Bank
Investment Fund
under the
custody of
Citibank, Taipei
Branch
56,078,000
1.63%
56,072,360
1.63%
-
-
-
-
-
-
-
-
-
- -
-
Rem
arks
-
-
-
-
-
-
Note
2
Note
2
Note 1: Disclosure of relationship pursuant to rules indicated on the issuer's financial statement.
Note 2: The shareholder was a foreign fund account and inquiries have been made of its representative with relevant information
requested: None.
108
10. The number of shares of the same investee held by the Company, its directors, managers and
which the Company controls directly or indirectly, with the aggregate shareholding
percentages
As of December 31, 2020; Units: Shares; %
Investment of directors,
managers or enterprises
under their direct or
indirect control.
Number of
shares
Percentage
Re-Investment Companies
(Note)
Walsin Lihwa Holdings Limited
Walsin Specialty Steel Corp.
Ace Result Global Limited
Min Maw Precision Industry
Corp.
Chin-Cherng Construction Co.
Hua Tuo Green Resources Co.,
Ltd.
Walsin Info-Electric Corp.
PT. Walsin Lippo Industries
PT. Walsin Lippo Kabel
Joint Success Enterprises Limited
Chin-Xin Investment Co., Ltd
HannStar Color Co. Ltd.
Concord Venture Capital Group
Winbond Electronics Corporation
Walton Advanced Engineering,
Inc.
Walsin Technology Corporation
Powertec Electronic Chemical
Material Corp.
PT. Walsin Nickel Industrial
Indonesia
Note: Equity method used.
Investment by the
Company
Number of
shares
483,230,393
285,903,187
44,739,988
Percentag
e
100.00
100.00
100.00
26,565,000
100.00
515,699,455
99.22
1,000,000
100.00
-
-
-
-
-
-
29,854,246
10,500
1,050,000
36,058,184
179,468,270
49,831,505
26,670,699
883,848,423
-
99.51
-
70.00
-
70.00
37,461,816
49.05
49,313,317
37.00
12,070,677
33.97
26.67
1,934,486
22.21 363,155,417
109,628,376
21.65
12,970,805
88,902,325
18.30
16,659,774
318,522,792
22.46
500,000
50.00
-
-
-
-
-
-
-
-
-
-
-
50.95
10.16
8.23
1.94
9.12
2.56
3.43
-
-
Combined Investment
Number of
shares
483,230,393
285,903,187
44,739,988
Percentage
100.00
100.00
100.00
26,565,000
100.00
515,699,455
99.22
1,000,000
100.00
29,854,246
10,500
1,050,000
73,520,000
228,781,587
61,902,182
28,605,185
1,247,003,840
122,599,181
105,562,099
318,522,792
99.51
70.00
70.00
100,00
47.16
42.20
28.61
31.33
24.21
21.73
22.46
500,000
50.00
109
Fundraising Overview
IV Fundraising Overview
1. The Company’s Capital and Shares
(1) Sources of Share Capital
1. Historical Sources of Share Capital
MM/YY
Issua
nce
Price
Authorized capital
Paid-in capital
Remarks
Shares
Amount
Shares
Amount
Sources of capital
11/02
10
6,500,000,000
65,000,000,000
3,512,976,276
35,129,762,760
06/03
10
6,500,000,000
65,000,000,000
3,412,976,276
34,129,762,760
11/03
10
6,500,000,000
65,000,000,000
3,366,067,276
33,660,672,760
01/04
10
6,500,000,000
65,000,000,000
3,266,067,276
32,660,672,760
04/04
10
6,500,000,000
65,000,000,000
3,174,491,276
31,744,912,760
07/04
10
6,500,000,000
65,000,000,000
3,078,236,276
30,782,362,760
08/04
10
6,500,000,000
65,000,000,000
3,079,012 601
30,790,126,010
05/05
10
6,500,000,000
65,000,000,000
3,006,294,601
30,062,946,010
08/05
10
6,500,000,000
65,000,000,000
3,310,913,261
33,109,132,610
04/06
10
6,500,000,000
65,000,000,000
3,244,314,261
32,443,142,610
11/08
10
6,500,000,000
65,000,000,000
3,194,314,261
31,943,142,610
02/09
10
6,500,000,000
65,000,000,000
3,179,200,422
31,792,004,220
09/09
10
6,500,000,000
65,000,000,000
3,119,200,422
31,192,004,220
11/09
10
6,500,000,000
65,000,000,000
3,069,200,422
30,692,004,220
12/10
10
6,500,000,000
65,000,000,000
3,609,200,422
36,092,004,220
01/11
10
6,500,000,000
65,000,000,000
3,614,890,804
36,148,908,040
04/11
10
6,500,000,000
65,000,000,000
3,616,000,258
36,160,002,580
06/13
10
6,500,000,000
65,000,000,000
3,576,000,258
35,760,002,580
05/15
10
6,500,000,000
65,000,000,000
3,516,000,258
35,160,002,580
Treasury stock capital decreased
by 100,000,000 shares
Treasury stock capital decreased
by 100,000,000 shares
Treasury stock capital decreased
by 46,909,000 shares
Treasury stock capital decreased
by 100,000,000 shares
Treasury stock capital decreased
by 91,576,000 shares
Treasury stock capital decreased
by 96,255,000 shares
Bond conversion entitlement
certificates converted to common
shares
Treasury stock capital decreased
by 72,718,000 shares
Capital increased by earnings
recapitalization
Treasury stock capital decreased
by 66,599,000 shares
Treasury stock capital decreased
by 50,000,000 shares
Treasury stock capital decreased
by 27,124,000 shares and
overseas convertible bonds
converted to 12,010,161 common
shares
Treasury stock capital decreased
by 60,000,000 shares
Treasury stock capital decreased
by 50,000,000 shares
Cash capital increased by
540,000,000 shares
Overseas convertible bonds
converted to 5,690,382 shares
Overseas convertible bonds
converted to 1,109,454
Treasury stock capital decreased
by 40,000,000 shares
Treasury stock capital decreased
by 60,000,000 shares
10/16
10
6,500,000,000
65,000,000,000
3,396,000,258
33,960,002,580 Treasury stock capital decreased
None
06/17
10
6,500,000,000
65,000,000,000
3,366,000,258
33,660,002,580
08/18
10
6,500,000,000
65,000,000,000
3,326,000,258
33,260,002,580
09/20
10
6,500,000,000
65,000,000,000
3,286,000,258
32,860,002,580
12/20
10
6,500,000,000
65,000,000,000
3,226,000,258
32,260,002,580
by 120,000,000 shares
Treasury stock capital decreased
by 30,000,000 shares
Treasury stock capital decreased
by 40,000,000 shares
Treasury stock capital decreased
by 40,000,000 shares
Treasury stock capital decreased
by 60,000,000 shares
None
None
None
None
01/11
10
6,500,000,000
65,000,000,000
3,431,332,948
34,313,329,480 Share swap of 205,332,690 shares
None
110
Paid with
property
other than
cash
No
No
No
No
No
No
Other
Note
1
Note
2
Note
3
Note
4
Note
5
Note
6
No
None
No
No
No
No
No
No
No
No
No
No
No
No
Note
7
Note
8
Note
9
Note
10
Note
11
Note
12
Note
13
Note
14
None
None
Note
15
Note
16
Note
17
Note
18
Note
19
Note
20
Note
21
Note
22
Note 1: Approval letter Tai-Cai-Zheng (3) No. 0910155823, dated
2002.10.16
Note 2: Approval letter Tai-Cai-Zheng (3) No. 0920110106, dated
2003.03.25
Note 3: Approval letter (2001) Tai-Cai-Zheng (3) No. 101196, dated
2001.02.08
Note 4: Approval letter Tai-Cai-Zheng (3) No. 0920159026, dated
2003.12.15
Note 5: Approval letter Tai-Cai-Zheng (3) No. 0930110000, dated
2004.03.24
Note 6: Approval letter Tai-Cai-Zheng (3) No. 0930125152, dated
2004.06.03
Note 7: Approval letter Jin-Guan-Zheng (3) No. 0940110778, dated
2005.03.30
Note 8: Approval letter Jin-Guan-Zheng (1) No. 0940124111, dated
2005.06.16
Note 9: Approval letter Jin-Guan-Zheng (3) No. 0950105881, dated
2006.02.20
Note 10: Letter Jin-Guan-Zheng (3) No. 09700511511, dated
2008.09.24
Note 11: Letter Jin-Guan-Zheng (3) No. 0970065169, dated
2008.11.28
Note 12: Letter Jin-Guan-Zheng (Jiao) No. 0980027679, dated
2009.06.06
Note 13: Letter Jin-Guan-Zheng (Jiao) No. 0980050862, dated
2009.09.21
Note 14: Letter Jin-Guan-Zheng (Fa) No. 0990051578, dated
2010.09.28
Note 15: Letter Jin-Guan-Zheng (Jiao) No. 0990025440, dated
2010.05.12
Note 16: Letter Jin-Guan-Zheng (Jiao) No. 1050021717, dated
2016.05.27
Note 17: Letter Jin-Guan-Zheng (Jiao) No. 1050040371, dated
2016.10.03
Note 18: Letter Jin-Guan-Zheng (Jiao) No. 1030014322, dated
2014.04.17
Note 19: Letter Jin-Guan-Zheng (Jiao) No. 1040026231, dated
2015.07.08
Note 20: Letter Jin-Guan-Zheng (Jiao) No. 1090341078, dated
2020.05.05
Note 21: Letter Jin-Guan-Zheng (Jiao) No. 1090359858, dated
2020.09.29
Note 22: Letter Jin-Guan-Zheng (Fa) No. 1090377120, dated
2015.07.08
2. Types of Shares
Authorized Capital
Shares Issued and
Outstanding (Note 1)
Unissued Shares
Total
As of March 30, 2021
Remarks
3,431,332,948
3,068,667,052
6,500,000,000
(Note 2)
Types of
Shares
Common
Shares
Note 1: Publicly-traded shares.
Note 2: The Company’s capital includes NT$8,000,000,000 for the issuance of share warrants, corporate bonds with share
warrants or preferred shares with share warrants, up to eight hundred million shares at a par value of NT$10 per share,
which may be issued in separate tranches.
3. Information on Shelf Registration: None.
(2) Shareholder Structure
Shareholders
Numbers
Government
Financial
Other Legal
Institutions
Institutions
Persons
As of March 30, 2021
Foreign
Individuals
Institutions and
Total
Individuals
Number
3
42
280
151,842
326
152,493
No. of Shares
8,954,054 41,670,274 1,133,616,187 1,450,894,709
796,197,724
3,431,332,948
Held
Shareholding
0.26%
1.22%
33.04%
42.28%
23.20%
100%
Note 1: Ratio of shares held by investors in China: 0%.
111
Fundraising Overview
(3) Distribution of Shareholders
1. Distribution of Common Shares:
Shareholding
1 to 999
1,000 to 5,000
5,001 to 10,000
10,001 to 15,000
15,001 to 20,000
20,001 to 30,000
30,001 to 50,000
50,001 to 100,000
100,001 to 200,000
200,001 to 400,000
400,001 to 600,000
600,001 to 800,000
800,001 to 1,000,000
1,000,001 and more
Total
Number of shareholders
62,393
59,379
14,714
4,959
3,326
2,750
2,100
1,559
664
319
80
42
25
183
152,493
Shares Held (Note)
14,230,173
136,015,083
113,574,624
62,456,463
61,481,493
69,786,078
83,963,747
113,533,399
95,285,539
87,020,543
39,937,202
29,207,765
22,353,513
2,502,487,326
3,431,332,948
As of March 30, 2021
Shareholding
0.42%
3.96%
3.31%
1.82%
1.79%
2.03%
2.45%
3.31%
2.78%
2.54%
1.16%
0.85%
0.65%
72.93%
100%
2. Distribution of Preferred Shares: None.
(4) List of Major Shareholders
Major Shareholders
As of March 30, 2021
Shares
Number of Shares
Held
Shareholding (Note)
LGT Bank (Singapore) Investment Fund under the custody of Business
Department, Standard Chartered Bank (Taiwan) Ltd.
Winbond Electronics Corporation
Chin-Xin Investment Co., Ltd
TECO Electric and Machinery Co., Ltd.
Huali Investment Corp.
Rong Jiang Co., Ltd.
Patricia Chiao
Yu-Heng Chiao
Investment Account of Banque Pictet & CIE SA under the custody of HSBC
Norges Bank Investment Fund under the custody of Citibank, Taipei Branch
247,025,000
222,000,000
220,011,000
205,332,690
100,000,000
98,294,000
93,169,006
61,072,197
56,078,000
56,072,360
7.20%
6.47%
6.41%
5.98%
2.91%
2.86%
2.72%
1.78%
1.63%
1.63%
112
(5) Stock Price, Net Value, Earnings, Dividends and Related Information for the Past Two Years
Item
Share
Price
(Note 1)
High
Low
Average
Net Value
per Share
(Note 2)
Basic
Diluted
Year
2019
18.60
13.15
16.14
23.27
22.77
2020
22.60
10.45
16.18
26.18
25.23
Weighted average shares
3,326,000,258
3,276,127,526
Earnings
per Share
Dividend
per Share
Earnings per share
Cash dividend (Note 3)
Stock
Dividend
Accumulated unpaid
dividend (Note 4)
-
-
Return
Analysis
Price-earnings ratio (Note 5)
Price-dividend ratio (Note 6)
Cash dividend yield (Note 7)
0.95
0.50
-
-
-
16.51
31.36
0.03
2.04
0.90
-
-
-
7.50
16.99
0.06
Current Year up to
March 30, 2021
19.45
16.30
18.20
-
-
-
-
-
-
-
-
-
-
-
* If shares are distributed in connection with a capital increase out of earnings or capital reserves, information on market
prices and cash dividends retroactively adjusted based on the number of shares after distribution shall be disclosed.
Note 1: The highest and lowest share prices for each year are provided, with the average price for the year computed based
on each year’s transaction amount and volume.
Note 2: Use the number of the outstanding issued shares at year’s end and the distribution passed at the following year’s
shareholders' meeting to fill in.
Note 3: If it is necessary to make adjustments retroactively due to situations such as issuance of bonus shares, the earnings
per share before and after the adjustments should be listed.
Note 4: If the conditions of the equity issuance require that dividends not yet distributed for the year be accumulated and
paid out in a later year with positive earnings, the dividends that have been accumulated up to the current year and
not yet distributed shall be disclosed separately.
Note 5: Price-earnings ratio = Average per share closing price for the year / earnings per share.
Note 6: Price-dividend ratio = Average per share closing price for the year / cash dividend per share.
Note 7: Cash dividend yield = Cash dividend per share / average per share closing price for the year.
(6) Dividend Policy and Implementation Status
1. Dividends Policy Specified in the Company's Articles of Association
The Company has a variety of products in different stages of development. In order to promote sustainable
development of the Company, the Company’s dividend issuance policy is based on the Company's future plans,
industry environment, cash-flow requirements, financial structure and profit status. Dividends will be issued
on a conservative, sustainable basis. The Company shall reserve no lesser than 40% of the balance amount as
shareholder’s profit after offsetting its loss and tax payment in the previous year, capital reserve and special
reserve. The profits shall be distributed in cash or in form of shares; cash dividends shall not be lesser than
70% of the total dividends.
2. Dividends Distribution to be Proposed to the Shareholders’ Meeting
According to the decision of the Company's 6th board meeting of the 19th term, cash dividends issued to
shareholders in 2020 shall be NT$3,088,199,653, averaging NT$0.9 per share (which is calculated based on the
Company’s 3,431,332,948 issued and outstanding common shares).
This dividend issuance is approved by the 2021 AGM, which authorized the chairman of the board to
determine the ex-dividend date and other details. In the future, if the Company repurchases shares, thereby
influencing the amount of outstanding shares and changing the distributable cash dividend per share, it is
113
Fundraising Overview
proposed that the shareholders meeting authorize the chairman of the board to adjust the number of
outstanding stocks on the ex-dividend date.
The smallest unit of the cash dividend is NT$1. Amounts smaller than NT$1 will be rounded down; the
Company will credit them as other income.
3. Explanation regarding expected major changes to dividend policy:
In order to ensure the stability of the Company's financial structure and the principle of equity for the
Company's dividend policy, Paragraph 1 of Article 28-1 of the Company's Articles of Incorporation has been
amended as follows in accordance with the letter issued by the Financial Supervisory Commission dated
March 31, 2021 (Ref. No. Jin-Guan-Zheng-Fa-Zi-1090150022):
The share dividend policy of the Company should be stable for the purpose of sustainable operation and
development. In case of any earnings on the final account, the Company shall allot as shareholder dividends
no lesser than 40% of the balance of such earnings after offsetting its loss, paying income tax, setting aside the
legal reserve, and setting aside the special reserve as adjusted based on the net decrease in other
shareholders' equity as stipulated in Article 28 hereof. Such dividends shall be distributed in cash or in form of
shares; cash dividends shall not be lesser than 70% of the total dividends.
To ensure the stability of the financial structure, and based on the principle of equitable dividend payout, if
the Company has no earnings to distribute or has earnings but the amount of earnings is significantly less than
the actual earnings distributed previously, the Company may distribute all or part of the reserves or the
undistributed earnings in the previous period. If there is a non-recurring, material income in the Company's
earnings for the year, all or a part of such income may be retained without being subject to the percentage
limitation set forth in Paragraph 1 hereof.
(7) Effect of the proposed stock dividends (to be adopted by the Shareholders' Meeting) on the operating
performance and earnings per share: Not applicable.
(8) Compensation for employees and directors:
1. The Company's Articles of Incorporation includes the amount and coverage of compensation for employees
and directors
Article 25-1:
If the Company turns a profit in a year, no less than 1% of the profit should be distributed to its employees as
compensation and no more than 1% to directors as compensation. The actual amount should be determined
by a board meeting where no less than two-thirds of the directors are present and more than half of the
directors present votes to approve the suggested amounts. The amounts should be reported to the
shareholders meeting. However, if the Company still has accumulated deficit from previous terms, it should
first reserve the amount needed to settle the outstanding balance.
Employee bonuses may be distributed by way of stock or cash dividends and the Company may issue bonuses
to employees of parents or subsidiaries of the Company that meets the conditions set by the board of directors.
The board of directors shall be authorized to determine the method of distribution.
The qualification requirements of or the distribution rules for the employees who are entitled to the treasury
stock transferred, the employee warrants issued, subscription for new shares issued, and the restricted stock
awards issued by the Company, including the employees of parents or subsidiaries of the company meeting
certain specific requirements, shall be formulated by the board of directors as authorized.
2. Basis for estimates of compensations for employees and directors for this term, basis for calculating employee
stock compensation and accounting procedures for when there is a discrepancy between the estimated and
actual amount
(1) Basis for estimates of compensations for employees and directors for this term: Estimated by ratio of the
pre-tax income as determined by the Articles of Incorporation.
(2) Basis for calculating employee stock compensation: Not applicable.
(3) Accounting procedures for when there is a discrepancy between the estimated and actual amount: Please
find relevant accounting procedures in “Financial Overview: 4. Financial report of the most recent year 24
NET PROFIT (LOSS) FROM CONTINUING OPERATIONS” of this annual report for further explanation.
3. Information regarding board of directors' approval of employee compensation
114
(1) Amount to be paid in the form of cash and stocks to employees and directors: The board has approved
NT$68,500,000 to be paid in cash to employees and NT$34,050,000 to directors for 2020.
(2) Difference from estimated amount, reason and actions required: No difference.
(3)The amount of employee compensation in the form of stock and its percentage of the Company's after-tax
income (as reported in the financial statement of this term) and total employee compensation: Not
applicable.
4. Actual payment status (including stocks, cash and stock price) for employee and director compensation from
the previous year; discrepancies (if any) between the actual payment and estimated amount, as well as the
reasons for and actions required by the discrepancies
(1) Cash and stock compensation for employees; compensation amount for directors: for 2019, the Company
issued NT$48,500,000 to employees and NT$21,000,000 to directors.
(2) Differences between the estimated amount of compensation for employees and directors, as well as the
reasons for and actions required by the discrepancies: No differences.
(3) Please find relevant accounting procedures in “Financial Overview: 4. Financial report of the most recent
year 24 Profits from Continuing Operating Units” of this annual report for further explanation.
(9) Share Repurchases:
1. Those having been executed:
No.
24th
25th
Purpose of Repurchase
Protecting the Company's Credit and
Protecting the Company's Credit and
Shareholders' Rights and Interests
Shareholders' Rights and Interests
Repurchase Period
(Actual: April 13, 2020 to April 23,
(Actual: August 5, 2020 to September
April 13, 2020 to June 12, 2020
August 5, 2020 to October 4, 2020
2020)
22, 2020
Range of Repurchase Prices
NT$10.5 to NT$16.5 per share
NT$11.5 to NT$17.5 per share
Type and No. of Shares
Repurchased
40,000,000 shares of common stock
60,000,000 shares of common stock
Amount of Repurchased Shares
NT$518,191,997
NT$981,916,409
Ratio of the Number of
Repurchased Shares to the
Number of Scheduled
Repurchased Shares
No. of Shares Cancelled and
Transferred
Cumulative Number of Shares
Held by the Company
Ratio of the Cumulative Number
of Shares Held by the Company
to the Total Number of Shares
in Issue
2. Those being executed: None.
100%
100%
40,000,000 shares of common stock
60,000,000 shares of common stock
0
0
0
0
115
Fundraising Overview
2. Issuance of Corporate Bonds: None.
3. Issuance of Preferred Shares: None.
4. Issuance of Global Depositary Receipts (GDRs)
Item
Date of Issuance
October 3, 1995
November 9, 2010
Place of issue and trading
Issued globally and traded on the Luxembourg Stock Exchange, Portal and
London Stock Exchange
Total amount
US$121,800,000
Offer price per unit
US$12.18
Total units issued
10,000,000 units
US$290,313,085
US$5.38
53,961,540 units
Source of underlying security
Issuance of new common shares for
Issuance of new common shares for
cash capital increase
cash capital increase
Underlying security
Common stocks: 100,000,000 shares
Common stocks: 539,615,400 shares
Rights and obligations
of depositary receipt holder
Conducted in accordance with the laws of the Republic of China and with the
provisions of the Depository Agreement. Refer to the Covenants of
Depository Agreement for the key terms and conditions.
Trustee
None
Depository institution:
Deutsche Bank
None
Citibank
Custodial bank
Mega International Commercial Bank Citibank (Taiwan)
Balance outstanding
Distribution of fees incurred
from issuance and the
outstanding period of the GDRs
2,224 units of global depositary receipts and 22,248 shares of securities
represented.
1. Issuance fees: The issuing company will be responsible for the entirety of
this fee.
2. Fees during outstanding period: The issuing company will be responsible
for this fee.
Covenants of Depository
Agreement and
Omitted
Custodial Agreement
(
U
n
i
t
:
U
S
$
)
M
a
r
k
e
t
p
r
i
c
e
p
e
r
u
n
i
t
2020
Current year as of
March 30, 2021
High
Low
Average
High
Low
Average
7.37
3.60
5.17
6.93
5.87
6.43
5. Exercise of Employee Stock Option Plan (ESOP): None.
6. Mergers, acquisitions or issuance of new shares for acquisition of shares of other companies:
116
(a) If the Company has completed any merger or acquisition or assumed new shares issued by other companies in the
most recent year and up to the date of this annual report, the following should be disclosed:
The following is the assessment opinion of Yuanta Securities Co., Ltd., the lead securities underwriter, for the most recent quarter:
Walsin Lihwa Corporation ("Walsin") issued new shares to acquire the newly issued common shares of TECO Electric and
Machinery Co., Ltd. ("TECO") in 2020. This share swap has been reported to the Financial Supervisory Commission via the letter
(Ref. No. Jing-Guan-Zheng-Fa-Zi-1090377120) dated December 16, 2020, and the change of corporate registration was
completed on January 14, 2021, with January 6, 2021 as the record date for the share swap. In accordance with Subparagraph 8,
Paragraph 1, Article 9 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, Walsin requested
us, the lead securities underwriter, to issue an opinion on the impact of the issuance of new shares as the consideration of the
assumption of shares of TECO on the finance, business and shareholders' equity of Walsin as of the first quarter of 2021.
1. Impact on the issuer's business
Among the core businesses of Walsin, the wire and cable business includes copper wires, power cables, communication cables
and stainless steel materials produced by it are widely used in power transmission, telecommunication networks, transportation,
industrial production and other infrastructure projects, while TECO's main businesses are various types of machinery and
equipment, power generation and distribution machinery and electrical appliances for use in server rooms, renewable energy
(including offshore wind power) and energy storage, integrated development projects, public works and transportation projects,
medical biotechnology and factories. Both parties have their own niche and market segmentation in terms of product categories
and sales channels. This strategic cooperation will not only cultivate the professional fields of both parties, but also enable the
integration of group resources and cross-marketing to achieve complementary effects in customer marketing and product lines,
provide more diversified and complete products and services to customers of both parties, enhance the market presence and
brand value of both parties, and strive for more cooperation opportunities with major global manufacturers to improve overall
competitiveness. Overall, the share swap will help enhance the business of both parties, and the various benefits are expected to
lead to a good performance for both parties after the share swap.
2. Impact on the issuer's finance
The assumption of TECO's shares through the issuance of new shares by Walsin is intended to seek a long-term and stable
partnership through mutual investment. It is expected that this alliance will combine the expertise of both parties through their
long-standing experience in technology and understanding of the market, and provide integration of existing R&D resources to
avoid excessive learning costs. By jointly using and sharing development resources and combining the strengths of both
companies, they will be able to expand the market and enhance their overall operating performance and profitability. In addition,
due to TECO's good operations and profitability, Walsin may receive dividend income by acquiring its equity interest through the
share swap. Therefore, this share swap alliance should have positive financial benefits to Walsin.
3. Impact on the issuer's shareholders' equity
The strategic alliance between Walsin and TECO is a share swap to establish a close partnership, rather than a merger or
acquisition, and they may still retain their respective areas of expertise so that they may continue to cultivate their vertical
markets. In addition, with the complementary sharing of marketing resources and full cooperation, they will integrate the
resources of each other's enterprises to give full play to the complementary effect of customer marketing and product lines and
increase the economic scale benefits, which will expand the scale of their operation and enhance their overall operational
117
Fundraising Overview
performance, strengthen the competitiveness of their industries, and create positive value for their shareholders. Overall, it is
expected that this share swap will help to enhance the operations and profitability of both parties and create maximum corporate
value for their shareholders, which should be conducive to creating competitive advantages for both parties and enhancing their
shareholders' equity in the future.
4. Whether the benefits of the assumption of shares are apparent
The strategic alliance between Walsin and TECO is a share swap to establish a close partnership, and they may still retain their
respective areas of expertise so that they may continue to cultivate their vertical markets. In addition, with the complementary
sharing of marketing resources and full cooperation, they will integrate the resources of each other's enterprises to give full play
to the complementary effect of customer marketing and product lines and increase the economic scale benefits, which should be
conducive to their overall operational performance and profitability. The benefits of this share swap will gradually be realized as a
result.
(b) If the Board of Directors has resolved to issue new shares through merger, acquisition or assumption of shares of
other companies in the most recent year and up to the date of this annual report, the implementation status and
basic information of the merged or assumed companies should be disclosed.
1. The implementation status of the issuance of new shares through merger or assumption of shares of other
companies as resolved by the Board of Directors in the most recent year up to the date of this annual report
The Company's assumption of new shares issued by TECO Electric and Machinery Co., Ltd. has been passed by resolution of the
directors of the Company and TECO on November 20, 2020. On the record date for the share swap, January 6, 2021, the
Company carried out a capital increase by issuing 205,332,690 shares of common stock with a par value of NT$10 per share for a
total amount of NT$2,053,326,900 in exchange for 171,103,730 shares of common stock newly issued by TECO. The share swap
ratio of 1 share of the Company's common stock for 0.8333 share of TECO's common stock was calculated by reference to the
due diligence report, the evaluation of the share swap ratio and the reasonable opinion of the CPAs provided by the professional
advisors of both parties, and based on the financial information such as market prices, net worth and profitability of both
companies.
118
2. Basic Information of Company Whose Shares Have Been Assumed
Company Name
Company Address
Responsible Person
Paid-In Capital
TECO Electric and Machinery Co., Ltd.
5F., No. 19-9, Sanchong Rd., Nangang Dist., Taipei City
Unit: NT$
Sophia Chwen-Jy Chiu
21,387,966
Major Business Items
transportation, industrial, refrigeration and air conditioning,
Production, sales and
installation of various electrical,
electronics and business equipment and their accessories
Electrical and mechanical products, automation and intelligent
Major Products
system products, home appliances and air conditioning products,
power engineering and equipment, and others
Total Assets
Total Liabilities
Total
Shareholders'
Equity
Financial Data of the
Operating Income
Most Recent Year
Gross Profit
Operating Income
Profit or Loss for
the Period
Earnings
per
Share
7. Implementation of capital allocation plan: None.
105,679,071,000
38,053,839,000
67,625,232,000
45,823,430,000
10,756,093,000
3,534,057,000
3,811,648,000
1.81
119
Business Overview
V .. Business Overview
1. Business activities
(1) Scope of Business
1. Primary business content, primary products and revenue ratio.
Business unit
Business activities
Products
Wire
cables
and
Manufacture and sale of
bare
wire,
copper
various electrical wires,
related
and
cables
connection materials
and accessories, as well
as the contracting and
high-
execution
voltage
cable
engineering.
of
Stainless
steel
Forging, processing and
selling of stainless steel
and nickel pipe.
Commercial
real
estate
business
Others
Real estate
Solar engineering etc.
2. New products under development
Bare copper strips, copper stranded
wires, copper cables, power cables,
high-voltage connectors and
their
telecommunication
accessories and
copper/ optical
fiber cables and
industry power cables.
Billets, slabs, hot-rolled plates/coils,
cold-rolled coils, wire rods, hot-rolled
bars, cold-finished bars, steel ingot,
pierced billets, stainless steel foil and
strands
commercial
Parking
leasing, residential housing and office
buildings sales
space
sales,
Revenue Ratio
The Company and its
merged subsidiaries
Amount
(NT$ million)
%
41,379
36.8
46,031
40.9
7,100
6.3
18,037
16.0
Business unit
Wire and cables
Stainless steel
New products under development
(1) Composite cable for large machinery
(2) Cable monitoring and supervisory control and data acquisition (DTS)
(3) Cables for offshore wind turbines
(4) Industrial wire harnesses
(5) Wire harnesses for new energy vehicles and power supplement systems
(1) Expand the development of high-strength stainless steel supply types,
sizes, conditions and product types:
Precipitation hardening type, Austenitic iron series, martensite iron series,
duplex type
(2) High-performance stainless steel for automotive components with high
heat resistance, wear resistance, free-machining and soft magnetic
properties
(3) High-strength and wear-resistant Martensitic stainless steel for machinery
and equipment
(4) High-performance stainless steel with free-machining, corrosion resistance
and high-definition cleanliness for computer, communications, and
consumer-electronics products
(5) High heat-resistant Austenitic stainless steel
for
industrial high-
temperature conveying equipment
120
(2) Industry overview
1. The current status and development of the industry
(1) Wire and Cable Business
According to forecast report issued by the International Copper Study Group (ICSG), global copper
production in 2020 was 20.45 million tonnes, a decrease of 1.5% from the previous year, mainly due to
the closure of most of the mining sites caused by the COVID-19 pandemic, especially in Peru. In 2020,
refined copper production was 24.43 million tonnes, up by 1.6% from the previous year, while
consumption was 24.49 million tonnes, up by 0.2% from the previous year, with a supply and demand
gap of 60,000 tonnes, down 330,000 tonnes from the previous year. Overall, demand is likely to recover.
China is the world's largest consumer of copper and its annual copper rod sales have been increasing
year over year. According to the statistics from International Wrought Copper Council (IWCC), the annual
sales volume in China in 2020 was similar to that in 2019, reaching 8.29 million tonnes. Annual copper
rod sales in Taiwan have not fluctuated significantly over the past four years, with annual sales of
approximately 360,000 tonnes of copper rod in 2020.
The market structure of Taiwan's wire and cable industry is mainly domestic sales, supplemented by
foreign sales. According to the Department of Statistics of the Ministry of Economic Affairs, Taiwan's wire
and cable production in 2020 was 229,000 tons, an increase of 15.7% over the previous year, of which
domestic production was approximately 212,000 tons, an increase of 10.7% over the previous year. The
Taiwan market benefited from a trio of returning Taiwanese businesses, local enterprises and foreign
investors, with private investment reaching a new high. The Action Plan to Welcome Taiwan Businesses
Back to Invest in Taiwan has attracted 209 companies, and by the end of 2020, Taiwan businesses had
invested NT$472.5 billion in Taiwan. With the Taiwanese government's active promotion of renewable
energy policy, major global players in the renewable energy industry are actively participating in Taiwan's
renewable energy construction, which has driven the demand for plant expansion and an increase in the
number of residential, commercial and public constructions cases, resulting in a rebound in market
demand.
(2) Stainless Steel Business
International Stainless Steel Forum (ISSF) announced that the global stainless steel (crude steel) output in
2020 was 50.89 million metric tons, a year-on-year decrease of 3%. It is mainly because the global supply
experienced a negative growth due to COVID-19. The largest area of production was China, and the
output of stainless steel (crude steel) reached 30.14 million metric tons, an increase of 3% compared
with 2019. The output of Asia (excluding China), Europe and the Americas were 6.43, 6.32 and 2.14
million metric tons respectively, which increased by 18%, 7% and 17% respectively compared with 2019.
G
10,000 tonnes
l
o
b
a
l
S
Europe
Americas
China
Asia
Others
121
Business Overview
tainless Steel Production by Regions (Source: ISSF; Unit: 1,000 metric tons)
In terms of the structure of stainless steel products, the output of plate products in 2020 was 37.27
million metric tons, accounting for 84% of the total output, and the output of long steel products was
7.33 million metric tons, accounting for 16% of the total output. Among the long steel products, the
output of straight bars, wire rods and small steel embryos were 2.99, 2.47, and 1.77 million metric tons
respectively, accounting for 42%, 34%, and 24% of the output of the long products respectively. About
48% of the end-use applications of long steel products are used for industrial production (such as
machined parts), 22% for industrial production (e.g. machined parts), 16% for consumer durable goods
and 12% for transportation. The top five long-strip stainless steel companies around the world by output
are Tsingshan, Walsin Lihwa, S+B, Viraj and Nippon Steel. (The above output figures are estimated by
Walsin.)
The increase in production capacity in recent years has been concentrated in China and Indonesia, led by
the world's largest steel plant, Tsingshan Group, with an annual production capacity of over 10 million
metric tons, followed by Baowu Steel Group (5 million metric tons), Jiangsu Delong, and Beihai Chengde
(million metric tons), which are actively expanding their factories.
Benefiting from its cost advantage thanks to RKEF integration, Tsingshan Group’s low-cost production
marched into the market; Jiangsu Delong built a nickel iron plant in Indonesia and transports the raw
materials back to mainland China at lower costs to increase production in China; Baowu Steel Group
entered the Indonesian nickel iron market, and the stainless steel capacity project is now under
construction; Beihai Chengde takes the advantage of its own nickel iron production capacity and
cooperates with the Philippine nickel miners; therefore, there are three major competition areas in the
northern, central and southern parts of China.
(3) Commercial Real Estate Business
In 2020, the total commercial residential sales area in Nanjing exceeded 10.26 million square meters
again, a year-on-year increase of over 6%, following the high level in 2018, and the average transaction
price was RMB25,842 per square meter, an increase of 5% compared to last year. While the Chinese
government's severe regulation that lasted for more than four years stifled the transaction prices of new
residential properties, the actual transaction prices of popular properties in the core area were raised in
2020 through the addition of renovation packages (which did not count in the price statistics), thereby
increasing the profits of developers. The monetary easing policy and the further concentration of
population in central cities have also boosted active transactions in the real estate market.
122
2. Relationships with suppliers in the industry's supply chain:
(1) Wire and Cable Business
Electrolytic Copper plates (imported)
PVC/PC plastic materials
Bare copper strips (wires)
Chemical coatings
Wire and cable
Telecommunication cables
Electric wires
Enamel insulated wires
Computer assembly
Home appliances
Home appliances
Electromechanical machines
Power generation, Power
transmission & distribution,
Electromechanical &
engineering,
Transportation & buildings,
New Energy
Telecommunications
engineering
Network engineering
(2) Stainless Steel Business
Alloy products from recycled stainless steel
Slabs
Bloom/Billet
Hot-rolled steel coil
Wire rods
Hot rolled straight
rods
Seamless steel pipes
Cold-drawn bars
Medical equipment, food industry,
Screw nuts, springs,
Industrial parts,
Boilers,
Forged Flanges
construction and furnishing, kitchen
welding rod , steel
shafts, CNC lathe
automobiles,
Connectors
appliances and tools, chemical
cable , braided cable
parts and the 3C
energy industry
containers/pipes,
and hardware wire
industry
and petrochemical
heat exchangers, drainage pipes,
petrochemical industry
industry
123
Business Overview
3. Product development trends and competition
(1) Wire and Cable Business
Development Trends: Under the global trend of energy saving, carbon reduction and environmental
protection, Taiwan's energy policy is currently oriented towards "increasing natural gas power
generation and expanding renewable energy sources", and the government has announced the
promotion of the "Renewable Energy Technology Industry Innovation Program" in order to drive the
renewable energy technology and industry in Taiwan. In response to the demand for capital for
renewable power and environmental protection investment, Taipower has increased the size of its issue
of corporate bonds year by year, and the bonds it issued in 2020 reached a record high of NT$84.1 billion.
In this context, the demand for power cables is increasing, and the cable industry started to develop
cables and related products and services required by the renewable energy industry.
Market Competition: The demand for plant expansion is driven by the return of Taiwanese businesses,
and the large volume of residential, commercial and public constructions projects, coupled with the
government's active promotion of renewable energy policies, has increased demand, but overall capacity
is still suffering from oversupply and competition is still fierce.
(2) Stainless Steel Business
Development Trends: Emphasis on the development of customized steel types, the development of high-
quality, high-priced and high-margin products and precision and special steel types (for the application
side), strengthening the development of the transportation, automotive engine and energy industry (for
the industry side), with a focus on meeting customer demand for our products, jointly developing new
products and applications, and improving customer adhesion.
Market Competition: The global demand for stainless steel is slowing down, but China and Indonesia is
expanding their production lines, resulting in low-cost supply of stainless steel and overcapacity due to
increased competition, which firstly affects the profit margin of middle and low-end general-purpose
steel grades. Steel makers are eliminating the weak and leaving the strong, or actively changing their
operation mode to focus on niche industrial applications with high certification threshold to add value to
their products through end-use differentiation.
(3) Commercial Real Estate Business
Development Trends: For real estate in Nanjing, developments mainly tend to center around urban areas,
are large scale and are no longer retail-based. Residential and commercial products have become the
mainstream of urban center development. Developers place more value on experiential and interactive
products. Demand for department stores and retail stores keeps weakening, while dining, entertainment
and recreation increasingly dominate consumer spending. In terms of residential development, the high-
end market is becoming main trend. This trend has been unchanging for the recent years.
Market Competition: The urban center is a hot spot for the housing markets. Land supply is scarce and
projects are few in number. The real estate industry is also centered on development enterprises with
low gearing and abundant cash flow. In 2020, state-owned funds have become an important source of
investment for local project developments, and the market becomes balanced, active and more orderly.
124
(3) Overview of Technology and R&D
1. R&D Expenses and Results
R&D Expenses
Wire and cables
From Jan. 1, 2020 to March 30, 2021, the R&D expenses were around NT$ 170
million.
(1) Wires used in large-machinery and renewable-energy industries: continue
technical development and innovation.
(2) Accelerate the development of key cable materials and environmentally
friendly cable materials.
(3) Continue to create core technologies in flexible cable and rubber, co-
international
develop related products and global markets with our
strategic partners.
(4) Co-develop advanced material technologies and harness units of ultra-high
power electric energy supplement system.
(1) Expand the development of high-strength stainless steel materials, size,
condition and product type:
-Development of precipitation hardening type bloom, improvement of
product specifications, development of different aging conditions and
shaped bars
-Development of large bars of Austenitic iron series and improvement
of product specifications; QT process of martensite iron series with
corrosion resistance
- Free-machining precipitation hardening type; corrosion-resistant
martensite iron for construction fasteners
-Duplex type with excellent corrosion resistance
R&D Profile
(2) Accelerate the development of high performance stainless steel for
automotive parts and components.
Stainless steel
-High-strength heat resistance for engine fasteners; high strength wear
resistance for engine pistons
-Excellent free-machining performance for throttles; high-strength
corrosion resistance for oil supply system; excellent free-machining and
soft magnetic properties
(3) Actively invest in the development of high-strength and wear-resistant
martensite iron stainless steel for machinery and equipment:
-Materials for machine tools, bearings for automation equipment, linear
rails... etc.
(4) Continue to develop high-performance stainless steel for computer,
communications, and consumer electronics products:
-Both free-machining and corrosion resistance ferrite iron series; high-
definition Austenitic iron series
(5) Combine the middle and downstream industrial chains to enhance
imported materials
industrial value and replace high-performance
development and service programs:
-Development of austenitic stainless steel with excellent heat resistance
for high temperature transmission network cables
125
Business Overview
2. Present and future R&D projects, as well as the estimated R&D investment expenditure
Business
unit
Plan for the most recent
year
Current progress
We plan to invest NT$50,000,000 for R&D, including:
Mass
production
completion
time
Main reasons that future
development
will succeed
Lightweight research and
development plan for large
machine cable products
(1) Established
verification methodology
(2) Developed chemical
materials
2021
Wire and
cables
Development of offshore
wind power cable
Large-machinery cable
lifespan simulation
verification project
(1) Product design meets
the needs of the wind
turbine system
manufacturers
(2)For HV cable,
connector assembly and
testing specifications are
established
(1) Developed and
designed the cable
(2) Certified
development of
materials
2021
2022
We plan to invest NT$56,000,000 in R&D, including:
Understanding the choices
on product-application
parameters; improving
structural design of flexible
cables through testing
data; improving
development and
manufacture of core raw
materials.
(1)It is the only one with
complete development
and testing capacity of
dynamic cable in Taiwan.
(2) Having the ability of
independent development
and verification of
materials.
(1)It is the only one with
complete development
and testing capacity of
dynamic cable in Taiwan.
(2) Having the ability of
independent development
and verification of
materials.
Continuous casting
parameter setting, hot-
rolling process parameter
setting
Big BLOOM development,
product specifications
improvement
Development of different
aging states and different
product shapes (shaped
rods) of martensite iron
stainless steel
Development of high
corrosion resistant duplex
stainless steel
Self-refining, development
and production by iron-
nickel-based superalloy
stainless steel plant
Development of stainless
steel for high FD electrode
Stainless
steel
Trial production stage
Q3, 2021
Trial production/mass
production improvement
stage
Q2, 2021
heat treatment parameter
setting, mold design, cold
drawing parameter setting
mass production
improvement stage
Q2, 2021
Trial production stage
Q4, 2021
Trial production stage
Q2, 2021
Cooperation between
continuous rolling mill and
roughing mill
Continuous casting
parameter setting, hot-
rolling process parameter
setting
Hot-rolling process
parameter setting and
heat treatment parameter
settings
Development of heat-
resistant stainless steel
Trial production/mass
production improvement
stage
Q2, 2021
Alloy design, pickling
process setting
126
Business
unit
Plan for the most recent
year
Current progress
Mass
production
completion
time
Development of QT process
for high strength martensite
iron stainless steel
Trial production/mass
production improvement
stage
Q1, 2021
Development of free-
machining ferritic iron
stainless steel
Trial/mass production
improvement stage
Q3, 2021
Development of high-
strength and wear-resistant
martensite iron stainless
steel
Nickel-based alloy
development
Development of soft
magnetic stainless steel for
automobiles
Trial/mass production
improvement stage
Q3, 2021
Trial production stage
Q3, 2021
Trial production stage
Q4, 2021
Stainless steel development
of automobile throttle valve Trial production stage
Q4, 2021
Development of stainless
steel for automobile fuel
supply system
Trial production stage
Q4, 2020
Main reasons that future
development
will succeed
Heat treatment
parameter setting,
equipment capacity
improvement
Alloy design, continuous
casting parameter settings,
hot-rolling process
parameter settings, heat
treatment parameter
settings and product
turnability research.
Hot-rolling process
parameter settings and
heat treatment parameter
settings
Hot rolling path parameter
setting, heat treatment
parameter setting
Alloy design, heat
treatment parameter
setting, cold drawing
process design
Heat treatment parameter
setting, cold drawing
process design
Alloy design, heat
treatment parameter
setting, cold drawing
process design
127
Business Overview
(4) Business Plan – Long-term and Short-term
1. Wire and Cable Business
Short-Term: Fully grasping customer demand, improving our standards for our products and services to gain
market presence, and enhancing customer satisfaction with product prices, quality, delivery schedule and
services in order to become a leading brand in the industry in Taiwan. In view of the construction of solar
power plants, the high market share of solar cables is expected to be maintained. In compliance with the
government's requirements for the domestic production of core components for offshore wind power plants,
the Company aims to become a qualified supplier in the international offshore wind turbine industry chain.
Large machinery cable is actively developed through after-sales markets and import substitution. In response
to the government's Renewable Energy Technology Industry Innovation Promotion Program, we are
developing wiring harnesses for new energy vehicle cables and power replenishment systems.
Long-Term: We will seize the development opportunities brought by the global smart grid, smart
manufacturing, smart building and new energy industries. We will also strengthen our cable production, sales,
and research capabilities, and use them to develop overseas markets by grasping and exploring the
opportunity of solar energy and offshore wind power construction demand driven by the government's active
renewable energy nationalization policy, while expanding into electric vehicle charging piles, offshore wind
power land-based substation turnkey projects, and solar energy and storage projects. In addition to
developing the market in Japan, we are also expanding our market presence in less developed countries in
ASEAN, actively developing industrial wires, seeking strategic partners, and expanding our market presence in
order to maintain our leadership in the industry.
2. Stainless Steel Business
Short-Term: Taiwan: As low price competition continues to erode our profits, with Walsin's current customer
demand being diversified, Walsin will adjust its direction to meet the demand of different customer segments,
strengthen the services for our existing customers, and reach out to direct customers. For the wire rod, we
will actively expand niche steel sales portfolio in line with market conditions to expand the volume of orders
of favorable steel grades, while continuing the research and development and the capital expenditure to
increase the application of new steel types and new industries and stabilize product quality. We will focus on
the development of direct customer channels and the expansion of available specifications in order to expand
our market share.
Mainland China: For steel billets and seamless pipes, we will develop high value-added steel types, for the
purpose of increasing the sales of high-value steel types. For the cold refined rods, we will increase the
volume
of
orders
from
direct
customers
and
strengthen
the
collaboration
between
marketing/technology/business for serving customers, to ensure the completion of the integrated material
application supply chain, so that the upstream and downstream can work more closely together.
Long-term: Taiwan: We will integrate upstream investments in nickel pig iron to enhance the competitiveness
of Walsin's stainless steel products. For bar materials, in addition to maintaining the major customers with
high demand, the Company will actively develop new customer bases and expand suitable markets for export.
For bar materials, in addition to continuing to strengthen the advantages in our integrated production lines,
we will increase the quality and output of deep-processed products. For wire rods, the long-term goal is to
increase the proportion of niche steel grades in our sales mix. In terms of operations, we are strengthening
our competitiveness by accelerating internal process improvement and Industry 4.0 automation projects.
Mainland China: We will solve capacity bottlenecks through capital expenditures, improve integrated, highly-
efficient manufacturing processes, improve the precision of our products, enrich the product mix and focus on
certification application markets, such as transportation, petrochemical, boiler, nuclear power, and food, as
128
key development industries, in cooperation with the national policy and industry development potential; we
will also deepen the technical service capacity and market management, hoping to enhance the added value
of our products and brands.
3. Commercial Real Estate Business
Short-Term: Our Real Estate Business has finished the sale and delivery of final batch of Phase 3 residential
buildings on Plot D, and the construction of the main structure and roofing. Curtain wall construction will soon
be completed and the roofing will be realized. Preliminary preparations for the lease and sale of No.1 Tower
will be completed and pre-leasing will begin at the same time to form a stable source of income, and
construction and delivery will be accelerated under good, comprehensive quality control. At the same time,
we will steadily advance the design and development of the third phase of Lot AB by reference to the latest
international certification standards in order to enhance the added value of our products.
Long-Term: During the course of promotion and marketing, the Walsin Centro is used as a carrier to integrate
commercial, office and other products to create a product image by marketing, so that the Walsin Centro
Shopping Center will become a new shopping, leisure and gathering center for Nanjing citizens, enabling the
two super-high-rise landmark office towers in Walsin Centro to become a hub for Nanjing's premium business
headquarters clients. At the same time, we will maintain relations with the supplier and the up-, middle- and
downstream industries, establish our competitive advantages, strengthen the operational capacity and
management efficiency of large-scale urban complexes, and create our brand value with efficient, high-quality
and reliable management, while looking for low-risk, high-profit new development projects.
2. Market Analysis and Sales Overview
(1) Market Analysis
1. Sales region(s) and market share of main products
(1) Wire and Cable Business
The Company is focused the development of the wire and cable business and offers a one-stop
comprehensive production line from the upstream bare copper wire, copper rod production, to the
research and production of all types of cables such as power cables, communication copper cables and
fiber optic cables. The main sales regions include Taiwan and Mainland China. The 2020 sales of the
Company's power cable products was approximately NT$11 billion, and that of bare copper wise was
about NT$29 billion. According to the Department of Statistics of the Ministry of Economic Affairs, the
domestic sales of power cable products in Taiwan in 2020 was estimated to reach NT$41 billion. Therefore,
the Company had a market share of approximately 20% or more.
(2) Stainless Steel Business
The Company is a major global stainless steel material company, with stainless steel products such as
stainless steel billet, cold- and hot-rolled steel coils, wire rods, bars, seamless steel pipe and precision roll
bonding steel. The main sales regions include Taiwan, Mainland China, Korea, Southeast Asia, Australia,
Europe and North America, etc. Our stainless steel wire rod and bar products occupy a significant position
on the global market and we offer customers optimal lead times and services with sales offices distributed
across the Strait, a vertically integrated supply chain and a standardized production process.
Sales of stainless steel products made by the Company in Taiwan amounted to 571,000 tonnes in 2020.
The Company's domestic market shares reach 60% (wire rods), 40% (hot-rolled steel coils), 35% (cold-
rolled steel coils) and 35% (bars); the Company’s global market shares are 9% (wire rods), 13% (hot-rolled
steel coils) and 4% (bars).
Note: The foreign market shares are estimated only in respect of the territories to which we sell products
and the available specifications.
129
Business Overview
(3) Real Estate Business
In 2020, the area of business land transactions in Nanjing was 10.49 million square meters. This was a five-
year high, up 23.4% from last year. The development scale of Walsin Centro in Nanjing Hexi is 1 million
square meters, and the finished residential units have been sold out. The main products are shopping
center operation, office building No. 1 under construction and building No. 2 design planning.
2. Overview of supply and demand and projected growth
(1) Wire and Cable Business
According to the global copper production forecast by the International Copper Study Group (ICSG), global
copper supply will grow by about 4.5% in 2021. In terms of refined copper production, ICSG expects refined
copper production to grow by 1.1% in 2021. On the copper demand side, infrastructure development in key
countries such as China and India, as well as the global trend towards cleaner energy, will continue to support
copper demand, with refined copper consumption forecast to grow by 1.1% in 2021.The strong demand for
infrastructure in China after the pandemic of COVID 19, coupled with the continued demand for cable
construction in the global renewable energy and electrification industries, has pushed up copper prices and
represents a positive demand for cable-related products. Due to the accelerated return of Taiwanese
businesses to Taiwan, the amount of investment implemented in 2021 may further increase. Semiconductor
companies are advancing advanced manufacturing processes and localization of the supply chains, with
upstream, midstream and downstream companies expanding their capital expenditures. The government is
actively promoting renewable energy policies such as offshore wind power and solar photovoltaic. In 2021, it is
estimated that three offshore wind farms will be completed with a capacity of 886MW, and the total amount of
solar photovoltaic installations will rise to 8.75GW, resulting in strong renewable energy development. In line
with this trend, Taipower's increase in grid and power plant construction, its expected bond issuance of
hundreds of billions of New Taiwan Dollars in 2021, and the demand for electrical and mechanical equipment
brought about by the renewable energy industry collectively generate demand for cables, resulting in better
future orders.
(2) Stainless Steel Business
Global stainless steel output in 2020 was 50.89 million tonnes, a decrease of 3% compared to 2019. Due to the
impact of the pandemic, the growth rate turned from 5% - 6% in the past to a negative figure. It is estimated
that the global stainless steel output will grow by 7% to 54 million tonnes in 2021, which is back to the upward
trend.
In addition, China is still the world's largest stainless steel supplier, with a production of over 30 million metric
tons in 2020, accounting for 59% of global production. With Indonesia producing 5 million tonnes, China and
Indonesia's combined production accounting for 70% of the world's stainless steel production, it is estimated
that Indonesia's production will grow and China's production will remain flat and slow.
(3) Real Estate Business
Looking into the future, as the development plan for the southern part of Hexi moves forward and is being
implemented, the number and density of the resident population will continue to increase, and the regional
130
development will become more mature. The opening of Walsin Shopping Mall has changed the business
landscape of the entire new Hexi district, becoming a new iconic consumer destination. The joining of Sun Hung
Kai Office Tower, a competitor in the periphery of Walsin Centro, in such tower some business owners have
moved, raised the market position and new product standards of Nanjing Grade A Office Tower. The demand
for office and shopping will be stable and sufficient in the future, and therefore the real estate market will
continue to develop steadily
3. Competitive niche, favorable and unfavorable factors for long-term growth and response
measures
Wire and Cable Business
Competitive
Niche
(1) We have the advantage of stable internal supply of important raw materials of copper metal
and can give full play to the benefits from the upstream and downstream integration.
(2) Long-term supply of products and services related to demand for project engineering,
accumulating rich supplier experience and having brand advantages.
(3) Advantages such as local supply and branding will help to enter the industrial cable field
such as solar energy, offshore wind power and port infrastructure.
(1) The performance of quality, service and delivery is highly satisfactory to customers and we
Favorable
Factors
have brand power in the Taiwanese engineering market.
(2) The high-voltage cable demand in the public sector sees signs of recovery, benefiting from
the renewable energy policy.
(3) The increase in private investment is driving cable demand for factory expansion, housing
and commercial office.
Unfavorable
Factors
(1) The uncertainties in real estate investments remain. Due to labor shortage and low birth
rate, the growth of market demand will be weakened, while the fluctuations of demand are
hard to predict.
Response
Measures
(2) The private sector faces oversupply and price competition.
(1) Through Industry 4.0 and production and sales intelligence to improve efficiency and
service capacity.
Stainess Steel Business
(1) The long strips are produced and sold by a single plant, with resource integration,
Competitive
Niche
economies of scale and rapid and stable delivery in cooperation with rolling schedules.
(2) Plate materials have the advantage of short delivery period.
(3) The production by the new equipment in Taichung Plant and Yanshui Plant will be beneficial
to adjustments to the product mix and improvement of product quality.
(1) Taiwan's cold-rolled steel coils are protected by anti-dumping duties.
(2) China's environmental protection policies have increased their momentum, gradually
improving the overcapacity of crude steel.
(3) Environmental awareness arises, increasing the cost of operation and reducing profit
Favorable
Factors
margins for competitors.
(1) Tsingshan set up a nickel iron plant and stainless steel plant in Indonesia, which integrate
production processes from raw materials to final products, thus significantly reducing
production costs and bringing us strong low-cost competition.
Unfavorable
Factors
(2) Global trade protectionism, frequent anti-dumping cases, EU steel defense measures and
China's increase in exports affect global steel liquidity and reduce the Company's export
volume.
(3) The Company lacks hot rolling production line in mainland China, making its delivery and
quality stability insufficient.
Response
Measures
(1) Investing in upstream raw materials by building a nickel iron plant in Indonesia to improve
the international competitiveness of our stainless steel and increase the hedging position at
the raw material end.
131
Business Overview
Stainess Steel Business
(2) In addition to continuing to strengthen the advantages in our integrated production lines,
we will gradually develop product specifications and high value-added steel grades, as well
as actively expand the sales volume of niche steel and increase the quality of processed
products.
(3) Maintaining major customers, actively developing new customer bases and expanding
suitable markets for export
(4) Solving capacity bottlenecks through capital expenditures,
integrated
manufacturing processes and enriching the product mix; internally, continuing to improve
processes and carrying out industrial 4.0 automation projects to improve the product
precision.
improving
Real Estate Business
(1) Location advantages: Walsin Centro is located in the core area of Nanjing Hexi New City, at
the intersection of Metro Lines 2 and 10 and trams, and is the center of the New City.
(2) Business advantage: Huaxin City is positioned as an international city complex, including
office buildings, commercial centers, quality houses and other types of products. The
functions of various industries complement and promote each other, which is the most
competitive product in the real estate industry.
(3) Scale advantage: The floors under development reaches more than 1 million square meters,
and the Walsin Centro has become a landmark project in Nanjing. The headquarters of four
large national financial institutions have been moved into the office buildings, while the
official opening of One Mall has changed the commercial landscape of Hexi New Town and
raised the expectation of the value of office buildings, thereby having a spillover effect on
rental and sales of office buildings of later phases.
(4) Quality advantage: In line with the new trend of market demand, energy-saving and
environmentally-friendly new materials and new technologies are widely used, attention is
paid to the humanization of design and the durability and maintainability of products from
the details, so that the products gain a competitive edge, thus making the Company quickly
occupy the market and shape the brand.
(1) Due to the scarcity of land and the important role of real estate in economic proportion,
financial investment and currency valuation, real estate has a long-term role in maintaining
and increasing asset value.
(2) The economy promoted by the Chinese government has continued to develop for many
years. The central city has great ability to promote and control the economy, which makes
the high-end office building market stable for a long time, and demand growth can be
expected.
(3) The establishment of National Jiangbei New District will drive Nanjing into a new round of
sustainable development, bringing stable growth and prosperity to the real estate market.
The project is located in Hexi, and we will be able to fully enjoy the resulting growth
benefits.
(4) With the delivery of residential housing in the project, the resident population is growing
rapidly; transportation facilities and public ancillary services have been completed, the
market is fully mature, and business demand continues to grow steadily.
(5) The development of CBD is close to completion, and the further concentrated demand for
high-end office buildings in the central area of Hexi will lead that in Nanjing.
(1) Land prices and construction costs keep rising, which increases the risks inherent in the real
estate market. There are many challenges in the expectations of profits from new deliveries
of land.
(2) There are many developers involved in land auctions, and it is not easy to obtain high-
quality land suitable for development.
(3) The city continues to expand, showing a multi-centered situation, diverting some of the
customers, while the scale and number of commercial shopping centers in the region are
both increasing, thus intensifying the competition.
(4) The office buildings under construction in the science park nearby the project, which benefit
from a large volume and low land costs, which has an indirect impact on the overall office
building markets.
Competitive
Niche
Favorable
Factors
Unfavorable
Factors
Response
Measures
(1) Optimizing the development process and improving the accuracy of drawings, outsourcing
and procurement through the improvement of internal processes to save the development
132
cost of the project.
Real Estate Business
(2) Doing product planning and design. On the basis of accurately understanding customer
needs, focusing on product differentiation and personalization, and meet market
expectations with featured products and services.
(3) Making full use of the opportunities to continuously introduce products into the market,
establishing differentiated brands through the spread of brand products, and enabling us to
achieve brand premium.
(4) Tracking and responding in advance the policy trends of government departments governing
relevant industries in a timely manner, and timely seizing the best timing for lease and sales
according to market changes.
(2) Key applications and production processes of main products
1. Key Applications of Main Products
Key Applications
Main Products
Copper material
Power cables
Wire and cable conductor, home appliances, electrical and electronic devices,
transformers, etc.
Primarily used for power plants, power transmission and distribution, plant facilities,
transportation construction, construction of power transmission lines, etc.
Hot-rolled wire rods, hot-rolled straight rods, flanges, seamless steel pipes, etc.
Hot-rolled steel coils, hot-rolled plates, heavy forgings, etc.
Screws and nuts, springs, welding rods, steel wires, braids and hardware wires, etc.
Chemical tanks, pipes for industry and building and pipes for petrochemical industry
Steel billets
Flat billet
Wire rods
Hot-rolled coil (flat
panel category)
Cold rolled coil (flat
panel category)
Peeled straight rods
Cold finish straight rods Shafts, medical equipment, furniture decoration items, turning parts, electric machine
Building decoration, kitchen utensils, appliances, medical equipment, electronic
communications, chemical tanks and steel tubes
Forging materials, turning parts, electric machine accessories, etc.
Stainless steel seamless
pipe
Real estate
accessories, etc.
Petrochemical heat exchanger; fluid pipe and instrument pipe boiler station pipe;
nuclear power station pipe; shipboard fluid pipe and instrument pipe; turning pipe.
Housing, office buildings and shopping malls
2. Production Process
(1) Wire and Cable Business
Copper plate
Shaft furnace
Casting machine
Pull-in rolling
Dissolution
Casting / rolling
Cable
Extruder
Collection
machine
Extruder
Coating / extrusion
Collection
Insulation / extrusion
Reduction
Copper bar
Wire drawing
machine
Wire drawing
Wire stranding
machine
Wire stranding
133
Business Overview
(2) Stainless Steel Business
Billet/Slab
Hot-Rolled Bar
Pickling Line
Die Casting
Ingot
Forging Machine
(Outsourced)
Forged straight bar
Wire Rod
Refining Furnace
Raw Material
EAF
VOD
Billet/ Slab
CC
Cold/Hot-Rolled Coil
MRP
Billet
Slab
Reheating
Furnace
HRM 200
RB 200
Intermediate 3-
Roll Block
Pre-Finishing 3-
Roll Block
Finishing Block
Wire rod
Bar in coil
HR Wire Rod
Dual-Module
Block
Pickling Line
Annealing
Furnace
HR Bar in Coil
Hot-Rolled-Black Coil
Hot-Rolled Coil
Hot Rolling Mill
Reheating
Furnace
Outsourced
Peeling &
Reeling Bar
Peeling &
Reeling
Straightening
Annealing
Furnace
HR straight bar
6-Rolled Cold Rolling Mill
Hot-Rolled No.1 Coil
Coating
Cold Drawing
Round Bar
Hex
Square
Shaped Bar
Cold-Drawn Bar
Centerless
Grinding
CG Bar
Seamless Steel Pipe
2D Coil
Skin Leveling Line
2D Coil
Hot Extrusion
Precision Foil
Materials
Inspection
Billet
Billet
Preparation
Preparation
Hot Perforation
Pierced Billets
Inspection
Cold Rolling/Cold
Drawing
Slitting
Rolling
Cleaning
Annealing
Pickling
Straightening
Heat Treatment
De-Oiling
Shipping
Packing
Precision Foil
Slitting
Tension Leveling
Lossless
Inspection/Physical &
Chemical Trial
Water Pressure
Trial/ Infiltration
Seamless Steel Pipe
Final
Inspection
Packing &
Shipping
(3) Supply Status of Main Raw Materials
Business Unit
Main Raw Materials
Description of Supply Status
Copper plates
supplemented by spot purchases. Procurement must be
Primarily based on
long-term
annual
contracts
and
Wire and
cables
Polyethylene
Other chemical materials
Pure nickel, high carbon nickel
iron, high carbon ferrochrome,
Stainless
stainless steel scraps, grade 1
Steel
steel scraps, molybdenum iron,
zinc ingot and zinc aluminum
ingot.
coordinated with the finished product sales volume.
Adopts monthly/quarterly quantity bargaining method and
includes imported and local supplies.
Adopts monthly/quarterly quantity bargaining method and raw
materials should mainly be locally sourced.
In addition to being sourced from Taiwan, raw materials are also
from Japan, Australia, New Caledonia, South Africa, Europe,
United States and China.
134
Business Unit
Main Raw Materials
Description of Supply Status
Land
development strategy and participate
in government
land
Implement land reserves pursuant to the Company’s real estate
Construction
Projects
and
Materials
Commercial
Real Estate
Retailers
auction tenders.
The Company further reduces costs and enhances effectiveness
by selecting good quality construction companies and as well as
material and equipment suppliers through tenders.
Integrating resources and doing a good job of gathering high-end
enterprises and small but beautiful, refined quality customers
office demand and signing contract with merchants according to
the Company's project positioning, business objectives and
development ideas for the phase 2 of the office building on Plot
AB,.
(4) The names, procurement (sales) amounts and ratio for suppliers whose total procurement (sales) for
any year in the last two years reached 10%.
1. Major supplier information for the last two years
Year
2019
Item
Name
Amount
Percentage of
Total
Purchases (%)
Relationsh
ip with
Issuer
Name
Amount
Unit: NT$ thousands
2020
Percentage of
Total
Purchases (%)
Relations
hip with
Issuer
Net
Purchases
114,797,340
100.0
-
Net
Purchases
96,999,993
100.0
-
Note: There is no supplier accounting for more than 10% of total amount of purchases.
2. Major customer information for the last two years
Unit: NT$ thousands
Year
2019
2020
Item Name
Amount
Percentage of
Net Sales (%)
Name
Amount
Net Sales
112,546,603
Note: There is no customer accounting for more than 10% of the total sales amount.
134,804,405
Net Sales
100.0
Relations
hip with
Issuer
-
Percentage of
Net Sales (%)
100.0
Relations
hip with
Issuer
-
(5) Output volume and value for the last two years
Year
Production
value/main product
Production
capacity
2019
Production
volume
Value
Production
capacity
Currency Unit: NT$1,000
Volume Unit: Metric Ton
2020
Production
volume
Value
Bare copper wire
Wire and cables
Steel strands
Stainless steel strips
and bars
377,000
50,520
110,000
555,720
296,722
44,075,404
252,000
179,540
26,181,718
35,803
103,079
503,273
8,684,347
2,999,185
49,414
110,000
37,176
73,254
8,373,610
1,727,335
30,401,240
555,720
465,909
25,822,376
Stainless steel coils
336,000
315,705
20,067,052
336,000
293,378
17,120,951
Seamless steel pipes
18,000
14,378
2,304,933
14,400
13,869
2,365,798
Total
Note: Product capacity means the quantity that can be produced under normal operation with the existing
production equipment while taking into account factors such as work stoppage and holidays.
108,532,161
81,591,788
135
Business Overview
(6) Sales volume and value for the last two years
2019
2020
Currency Unit: NT$ 1,000
Volume Unit: Metric Ton
Domestic Sales
Exports
Domestic Sales
Exports
Year
Value of
Main
Products/
Sales
volume and
value
Main
Products
volume
Sales
Sales value
Sales
volume
Sales value
Sales
volume
Sales value
Sales
volume
Sales value
Bare copper
wire
Wire and
cables
Steel
strands
Stainless
steel strips
and bars
Stainless
steel coils
Seamless
steel pipes
Others
(Note)
Total
217,458
32,216,360
85,225
16,484,646
107,301
14,032,750
76,782 14,355,105
38,367
10,324,691
1,935
489,960
38,126
9,993,726
1,309
338,225
106,052
2,825,009
6,883
170,520
77,094
1,817,662
1,922
41,465
347,546
21,543,798 121,035
9,140,002
324,350
19,148,761 106,619
7,517,159
257,399
15,921,321
70,014
4,263,113
247,348
13,858,213
53,539
3,057,936
5,525
646,685
8,853
1,867,654
6,496
1,036,023
7,067
1,313,758
-
18,290,010
-
620,636
-
25,528,265
-
507,555
101,767,874
33,036,531
85,415,400
27,131,203
Note: “Others" include sales of non-core business products as well as real estate business, rental and product
income revenues.
136
3. Employee Data
(1) Employees of Walsin Lihwa Holdings Limited:
Year
Number of employees
Average age
Average years of service
Education
background
(%)
Ph.D.
Master's
University/College
High school
Below high school
2019
4,781
39.8
9.6
0.5
9.1
39.2
32.5
18.7
Note: Walsin Lihwa Holdings Limited includes its subsidiaries
(2) Employees of Walsin Lihwa Corp.:
Year
Number of employees
Average age
Average years of service
Education
background
(%)
Ph.D.
Master's
University/College
High school
Below high school
2019
2,675
38.9
9.7
0.9
15.7
41.1
28.0
14.3
As of March 30, 2021
Current Year as of
March 30, 2021
4,964
40.0
9.7
0.5
9.9
42.5
30.1
17.0
As of March 30, 2021
Current Year as of
March 30, 2021
2,742
39.0
9.9
0.9
17.3
42.9
25.9
13.0
2020
4,931
38.9
9.5
0.5
9.7
43.0
28.3
18.5
2020
2,676
39.2
10.0
0.9
16.3
43.3
27.1
12.4
137
Business Overview
4. Environmental Protection Expenditure Information
(1) For the most recent year and up to the date of publication of the annual report, the losses suffered by
the Company as a result of environmental pollution (including compensations and violations of
environmental protection laws and regulations found in environmental protection inspections; the
punishment date, the letter number, the legal basis for the punishment, the legal provision and the
content of the punishment shall be specified), and the estimated amount of such losses that may
occur now and in the future and the countermeasures against them; if they are not reasonably
possible to estimate, the facts that they cannot be reasonably estimated should be stated.
Taiwan Plants: Yanshui Plant
Punishment Date
Punishment Letter
No.
Punishing Unit
Reason
Punishment
for
Countermeasures
Basis
Legal
Punishment
Basis
Legal
Punishment
for
for
Amount of Penalty
Punishment Date
Punishment Letter
No.
July 7, 2020
Huan-Shui-Shui-Cai-Zi-109070104
Environmental Protection Bureau, Tainan City Government
The amount of discharge water and recycled water intake repeatedly exceeded the
daily discharge and intake of water as approved by water pollution control measures
plan
The use and drainage mechanism should be formulated for each unit, and the daily
use target value should be set for each unit. If the value is close to the target value,
the reminder mechanism will be activated for better control.
Violation of Paragraph 1, Article 14 of the Water Pollution Control Act
Those enterprises that discharge wastewater or sewage into surface water bodies
shall apply to the special municipality, county or city competent authority for
discharge permit or simple discharge permit document and shall follow the items
registered on the document while discharging. The enterprises shall not change the
items unless they have the permission from the special municipality, county or city
competent authority.
NT$135,000
August 4, 2020
Huan-Shui-Shui-Cai-Zi-109080122
Punishing Unit
Reason
Punishment
Environmental Protection Bureau, Tainan City Government
Exceeding the standard effluent
for
Countermeasures
Basis
Legal
Punishment
Basis
Legal
Punishment
for
for
Amount of Penalty
Punishment Date
Punishment Letter
No.
We immediately repaired the malfunctioning equipment and launched the installed
water treatment equipment, and actively invested in capital expenditure on related
equipment in order to meet the Company's requirements for environmental
protection and legal compliance.
Violation of Paragraph 1, Article 7 of the Water Pollution Control Act
Those enterprises, sewage systems or building sewage treatment facilities that
discharge wastewater or sewage into surface water bodies shall comply with effluent
standards.
NT$2,376,000
November 6, 2020
Huan- Kong-Gu-Cai-Zi-109110304
Punishing Unit
Environmental Protection Bureau, Tainan City Government
Reason
for MRP and VOD did not effectively collect particulate matter, and their operation
138
Punishment
produced visible particulate matter dispersed in the air.
Countermeasures
Basis
Legal
Punishment
Basis
Legal
Punishment
for
for
Amount of Penalty
An improvement report was submitted to the Environmental Protection Bureau for
review on December 7, 2020, and the airtightness of the doors and windows of the
operation environment was repaired to ensure the normal operation of the dust
collection equipment, while the dust suppression on the road was carried out with a
sprinkler truck. On December 5, 2020, the Environmental Protection Bureau came to
the plant to review our improvement and closed the case.
Subparagraph 1, Paragraph 1, Article 32 of Air Pollution Control Act
Within each class of control region or within total quantity control zones, any burning,
melting, refining, grinding, casting, conveyance or other operation that causes the
production of significant particulate pollutants dispersed into the air or onto the
property of others is prohibited.
NT$150,000
Punishment Date
November 9, 2020
Punishment Letter
No.
Huan-Shui-Shui-Cai-Zi-109110198
Punishing Unit
Reason
Punishment
Environmental Protection Bureau, Tainan City Government
Exceeding the standard effluent
for
Countermeasures
Basis
Legal
Punishment
Basis
Legal
Punishment
for
for
Containment has been carried out immediately and the case has been closed by the
Environmental Protection Bureau. Follow-up, regular checks will be made
subsequently to avoid omissions.
Violation of Paragraph 1, Article 7 of the Water Pollution Control Act
Those enterprises, sewage systems or building sewage treatment facilities that
discharge wastewater or sewage into surface water bodies shall comply with effluent
standards.
Amount of Penalty
NT$171,600
The above-mentioned defects have been corrected and improved and have been reviewed and documented by
regulatory authorities. The Company will continue to enhance its environmental management around its
factories. We also plan to prevent the recurrence of violation via internal control, environmental education &
training, as well as our annual KPI evaluation system.
(2) Future response measures (including improvement measures) and possible expenses:
Despite the large amount of manpower, materials and funding invested in environmental protection to comply
with international benchmarks over the years, Walsin Holdings was still fined for pollution. To keep pollution
under adequate control, the Company requires factories in Taiwan and overseas to step up self-regulation to
avoid human errors and to implement economically feasible environmental management projects. Internal audit
and environmental education & training (including regulatory identification) will also be applied to assist in
reinforcing self-regulation and horizontal development at various factories. Environmental investment plans and
management measures are as follows:
1. Obtained ISO-14001 certification for system management:
In line with international environmental conventions, factories in both Taiwan (Hsinchuang plant 1,
Hsinchuang plant 2, Yangmei plant, Taichung plant and Yanshui plant) and mainland China (Shanghai Walsin
Lihwa Power Wire & Cable plant, Nanjing plant, Jiangyin plant, Yantai plant and Changshu plant) have all
obtained "Environmental Management System" certification. In order to ensure the operational effectiveness
of Walsin's environmental management system, the Company hired a professional consulting team in 2017 to
instruct 10 domestic and overseas factories to transition to ISO 14001:2015. Basic operation for ISO 45001
was also introduced as a pilot program, as environmental protection and vocational safety & health
management system are integrated into a universal operating model across the entire group while on-site
guidance is also provided. Consistency in documentation and stability in system operation are required of
139
Business Overview
these factories. Through educational training at various factories, the spirit of the management system is
deeply ingrained in actual factory operation after multiple training sessions focusing on topics ranging from
regulatory interpretation to actual operation. Furthermore, with a proactive attitude, we will continue to
improve our overall environmental protection efforts and vocational safety & health condition. We will strive
to enhance environmental performance, reduce environmental loss, improve corporate image and boost our
international competitiveness. Walsin has completed the
its
management system at all of its factories at home and abroad in 2018, with the certificates being valid for
three years.
integration and version conversion of
2. Air pollution management:
Comply with the air pollution control laws in Taiwan and in China and apply for permits for fixed (atmospheric)
pollution source ranges that are progressively announced. The various plants in Taiwan and in China have
obtained operating (emission of pollutants) permits for various manufacturing processes and facilities,
reducing atmospheric emissions.
3. Greenhouse gas emission and campaign for reduction:
To counter climate change and global warming, reduction in greenhouse gas emission is a necessary measure.
GHGs inventories provide compliance basis for efforts to reduce greenhouse gas emission.
Since 2015, the Company has established the "Safe Environment Information Platform--the ability to conduct
GHGs inventories and to calculate carbon emission for products" to collect greenhouse gas emissions at home
and abroad. Through continuous review every year and smart system management, the Company keeps
optimizing its greenhouse gas emissions. Through the electronic system, we can grasp the current year's
quarterly emissions and compare them with the same period last year, and further produce the trend graph
for the quarterly meeting of the Environmental, Safety and Health Management Committee to review the
carbon emissions regularly, so as to effectively review and manage the Company's carbon emissions. In
addition, in order to improve the company-wise operation of the greenhouse gas control system, we also plan
to promote the implementation of ISO 14064-1 in each plant. Currently, our Taichung and Yanshui plants in
Taiwan have obtained ISO 14064-1 certification, and the latest certificates and expiration dates are regularly
posted on our CSR website every August. It is expected that the Hsinchuang and Yangmei plants will obtain
the new version of ISO 14064:2018 certification in 2021, and at the same time, we plan to promote the
introduction of ISO 14064-1 in overseas plants and obtain such certification in 2022. At the same time, we are
also actively participating in overseas carbon emission trading to integrate into China’s carbon trading market,
which can not only ensure that the Company has sufficient carbon allowance in the future, but also promote
measures such as energy conservation through advanced technology, thereby laying a good foundation for
the Company's long-term operation and development.
Greenhouse Gas Emission and Intensity Analysis of Plants in Taiwan and Overseas
台灣及海外區溫室氣體排放量及強度分析表
Emission (CO2e in
排放量（公噸CO2e）
metric tons)
Product volume
產品量（公噸）
(metric tons)
Intensity (CO2e in metric tons
強度
/Product volume in metric tons)
（公噸CO2e／公噸產品量）
1200000
1000000
800000
600000
789,641
0.42
988,484
895,250
1,058,845
1,045,778
1,021,880
855,378
850,267
866,022
888,209 904,500
0.54
811,425
0.58
0.37
0.38
0.35
0.40
0.39
0.41
0.40
0.40
0.39
400000
331,760
0.31
369,650
0.29
398,245
278,337
251,884
301,196
413,876
422,140
334,703
353,325 364,590
421,178
312,743
391,899
227,751
225,795
E
m
排
i
s
放
s
i
o
n
量
200000
0
y
t
i
s
n
e
t
n
強
I
度
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Taiwan Overseas
海外
臺灣
Taiwan
臺灣
海外
Overseas
臺灣
Taiwan
海外
Overseas
Taiwan
臺灣
海外
Overseas
臺灣
Taiwan
海外
Overseas
Taiwan
台灣
海外
Overseas
Taiwan
台灣
海外
Overseas
2014
103年
2015
104年
2016
105年
2017
106年
2018
107年
2019
108年
2020
109年
140
4. Wastewater treatment:
The wastewater from each of Walsin Lihwa's plants has been properly treated and discharged through
wastewater treatment facilities in the plant site and the wastewater quality testing has been regularly
conducted to avoid the impact of wastewater discharge on the environment. Management at source is most
important in water conservation. Based on water quality characteristics, the treatment procedures were
designed and recycling units were installed, so the wastewater has been discharged to nearby rivers according
to regulations or piped to recycling units in order to effectively use limited water resources. Each plant site
has adjusted equipment and process to reduce water consumption and improve wastewater recycling system,
so as to enhance the recycling ratio of the process water.
The average pollutant concentration in wastewater discharged by the factories in 2020 met the effluent
criteria. The recycling ratio of Taiwan plants reached as high as 96.72%.
5. Strict control of industrial waste:
Walsin Lihwa upholds the idea of circular economy; therefore, the 4Rs (reduce, reuse, recycle and recovery)
have constituted the foundation for our company's waste production and control. When Walsin Lihwa's
copper wire and steel products are used and disposed of, 97.25% of the waste, a year-on-year increase by
0.29%, can be recycled for reuse. The utilization rate of non-hazardous and hazardous waste ranges from
98.69% to 99.21% and from 78.05% to 99.28% respectively. We recycle and reuse partial waste produced by
ourselves and the rest is removed, treated, or reused by qualified companies we have appointed. In 2020, the
reuse rate of hazardous waste in our Taiwan plants increased by 2.419% compared to 2019. The landfill rate in
our Taiwan plants decreased by 65% (from 0.6% to 0.21%) compared to 2019, mainly due to the
transportation of all waste acid from the Yanshui Plant to the Taichung Plant for acid treatment and reuse,
thus reducing the output of sludge. The landfill rate in our overseas operations reduced by 25.19% compared
to 2019 (from 1.31% to 0.98%), mainly because the dust collection of Yantai Plant was done in the plant for
reuse in furnaces rather than being outsourced. In the future, the target landfill rate will continue to be less
than 1%. The Company has been striving to achieve a landfill rate of less than 1%. The Taiwan plants have
achieved a landfill rate of less than 1% since 2019, and the overseas plants are still working hard to do so. For
its stainless steel ballast, the Company is committed to the basic research and innovative application of
diversified resources. From the beginning to the present, a total of about 210,000 metric tons of oxide ballast
and nearly 60,000 metric tons of reduced ballast have been resourced. The potential products developed
through the above means include engineering aggregate, cement raw material admixtures, fiber reinforced
cement boards, and indoor high-pressure bricks. Aside from continuing to promote source reduction of waste
and recycling of waste in the plant, the Company will, in conjunction with the strength of the overall supply
chain, reduce the amount of raw materials and reduce the harm that production may bring to the
environment. The Company will continue to implement the circular economy concept by innovating the
environmental protection technology. In addition to continuously strengthening the sustainable growth, the
Company has established strict control and auditing mechanisms for waste flow and screening of qualified
vendors to ensure that waste flows are proper and legal.
Waste output and disposal by Taiwan and overseas operations in 2020 (Unit: Metric ton):
Region
Taiwan
Overseas
Disposal
Non-hazardous
Hazardous
Total
Non-hazardous
Hazardous
Total
Recycling (for
reuse)
Incineration
Burial
Other treatment
(e.g., physical
treatment)
Total
Recycling rate
Incineration rate
Burial rate
127,115.11
56,431.28
183,546.39
49,716.98
7,923.46
57,640.44
808.95
53.95
-
342.23
808.95
396.18
121.94
538.16
3.00
52.54
124.94
590.70
147.89
10.56
158.45
-
2,172.67
2,172.67
128,125.90
56,784.07
184,909.97
50,377.08
10,151.67
60,528.75
99.21%
0.63%
0.04%
99.38%
0.00%
0.60%
99.26%
0.44%
0.21%
98.69%
0.24%
1.07%
78.05%
0.03%
0.52%
95.23%
0.21%
0.97%
141
Business Overview
Other treatment
(e.g., physical
treatment)
Note: Except for the hazardous waste from dust collection by Yanshui Plant and Yantai Plant, which are
21.40%
0.12%
0.00%
0.02%
0.09%
3.59%
recycled in the plant, and the waste acid from Taichung Plant, which is disposed of and recycled in the
plant (22,572.28 metric tons in total), all hazardous and non-hazardous waste generated is disposed of
outside of the plant.
6. Improving energy use efficiency:
Walsin Lihwa upholds the business philosophy of "Green Manufacturing, Happy Enterprise and Sustainable
Management". In addition to committing to quality management, pollution prevention, environmental
protection, safety and health, our company adopts "Enhancing energy efficiency and promoting clean energy"
as its energy management guidelines to fulfill its social responsibility in energy conservation and carbon
reduction. We aggressively incorporate energy-saving equipment, efficient technologies, environment-friendly
facilities and environmental protection designs and green process into promoting improvement of energy
efficiency at source. In response to the governments' energy policies and measures, we educate our
employees about energy conservation and inventory the energy consumed by equipment and facilities to seek
opportunities for improving our energy performance and to also effectively implement our energy saving
plans.
7. Energy conservation and carbon reduction:
Walsin Lihwa's energy saving and carbon reduction management strategy focuses on "implementing lean
production management" - "controlling reasonable energy consumption per unit of product", "managing and
improving equipment energy efficiency" and "reducing energy consumption and carbon emissions in the
smelting process". In addition to reviewing ourselves by reference to the energy consumption per unit of
product by our overseas peers, we are also actively implementing energy management and energy saving
measures at the internal level. At the same time, we have introduced international standards year by year -
ISO 50001 energy management system in 2018, and completed the internal planning and construction of ISO
50001 energy management electronic system in 2019-2020 to improve the immediacy of energy management
and more focused management. In 2020, we promoted and completed the certification of the new version of
ISO 50001:2018 on the basis of the existing ones, introduced advanced structures and incorporated risks and
opportunities, thereby controlling the preventive measures to solve unpredictable shocks before they occur,
and improving energy efficiency according to the system standard. In addition, in 2020, we started a trial run
of energy consumption and carbon emission inventory for major products in our Taiwan plants, and we expect
to start obtaining basic data on energy consumption and carbon emission per unit of major products in 2022
and plan to launch a smart system in 2023. With the support of the electronic system, we hope to strengthen
our energy management and enhance our energy-saving technology and efficiency control, and to gradually
become a leading benchmark in the industry by industry-government-academia cooperation, industry
benchmark learning, and continuous improvement and innovation internally.
142
Energy Management
System Counseling
Invited an energy consultancy
company to give counseling to
Taiwan plants on ISO50001:2011
Maintained Energy Management System /
Transition to New Energy Management System
3-Year Energy Management
Plan/Carbon Pricing
Taiwan plants and overseas plants (Shanghai
Power Plant and Yantai) implemented
energy management under the provisions of
the ISO Management System
ESH Committee announced 3-
Year Energy Management Plan
in 2020
Passed Energy Management
System Certification
1. Taiwan plants obtained
ISO50001:2011 certification
2. Overseas plants (Shanghai and
Yantai Plants) obtained
SO50001:2011 certification
Passed New Energy Management
System Certification
1. Taiwan plants obtained ISO50001:2018
certification
2. Overseas plants (Shanghai and Yantai Plants)
obtained SO50001:2018 certification
2020 Energy Saving Plans for our plants in various regions
Plant site Project type
Energy-saving
type
Quantities
planned
Energy
conserved
Energy-saving
calorific value
Carbon
reductio
n (t)
Amounts saved
for carbon
reduction
Electricity (1000
54
11,258.68
97,545.17 5,730.66
Manufacturi
kWh)
Taiwan
ng process /
Natural gas
Offices
(1000 m3)
Others (t)
Total
Electricity (1000
kWh)
Natural gas
(1000 m3)
Steam (m3)
Overseas
Manufacturi
ng process
4
1
59
12
2
1
951.01
35,824.49 1,987.82
NTD 38,057,000
364.63
0.00
364.63
-
133,369.66 8,083.11
4,619.89
40,026.72 4,372.77
563.71
21,234.79 1,232.33
MYR
16,000
RMB
2,762,000
2,120.00
5,842.72
233.20
Total
15
67,104.23 5,838.30
Approx.
NTD 50,039,000
143
Business Overview
9. Primary pollution control facilities purchased in the most recent year as well as their applications and benefits
possible: (Listing only those valued at NT$100,000/RMB20,000 and above)
In 2020, Taiwan plants' investment in environmental protection equipment increased by 158.86% compared
to 2019, with the amount increasing from NT$80 million to NT$290 million:
2020 Environmental protection
accounting expenses
Taiwan plants (NT$1,000)
Mainland China plants
Malaysian plant
(RMB1,000)
(MYR1,000)
Environment
protection
Environment protection
cost
Category
cost item
Expenses
Capital
expenditures
Expenses
Capital
expenditures
Expenses
Capital
expenditures
Environment
E01-01
Pollution
2,413
206,445
1,103
11,764
Equipment
prevention expenses
cost
Environment
E02-01
Resource
410,033
protection
circulation fee
related
E02-02
Natural
management
resources fee
fee
E02-03
Green
procurement
E02-04
Educational
training fee
E02-05 Test-derived fee
E02-06 Monitoring fee
Other
E02-07 R&D cost
-
50
58
1,056
1,016
3,480
473
environment
protection
related fees
E02-08 Social activities
cost
E02-09
Damage
2,851
compensation cost
E02-10 Fees charged by
21,696
governments
-
-
-
-
-
-
-
-
-
-
3,587
4,447
58
0
39
115
0
43
0
131
-
-
-
-
-
-
-
-
-
-
Sum
Subtotal
443,126
206,445
9,523
Total
649,571
11,764
21,287
-
14
-
-
-
-
4
-
-
-
3
21
-
-
-
-
-
-
-
-
-
-
-
-
21
When Walsin Lihwa sets up (expands) its plants, it always considers the types and quantities of pollutants that
may be generated and assesses and sets up relevant pollution prevention equipment to avoid environmental
pollution. In 2020, for sake of the process improvements, all of its plants invested in pollution prevention for a
total of capital expenditure of NT$215,250,000 (Taiwanese plants) and RMB 14,074,000 (overseas plants).
They include the pollution prevention equipment valued at NT$100,000/RMB20,000 and above and are listed
as follows:
(1) Taiwanese plants
Plant area
Equipment name
Quantity
Yanshui
Yanshui
Yanshui
Yanshui
Molybdenum removal from effluent
Water plant system VII / VIII / effluent
flow meter improvement
Construction of biological treatment
equipment
Change of position of the effluent port
Yanshui
Main dust collection, mixing and
1
1
1
1
1
Investment
cost
(Currency:
NT$1,000)
Anticipated benefits
61,000
2,608
124,000
17,665
Molybdenum removal process is legal and
compliant with the rules
Improvement on the flow meter is legal and
compliant with the rules
Biological treatment process is legal and
compliant with the rules
Changed of position of the effluent port is legal
and compliant with the rules
4,000 Main dust collection, mixing and conveying
144
Plant area
Equipment name
Quantity
conveying
Hsinchuang Cloud-based public works system
Construction of power demand
Taichung
reduction system
Taichung
Taichung
IC ion chromatography
Installation of scrubbers for air ducts of
waste water plants
1
1
1
1
(2) Overseas Plants
Investment
cost
(Currency:
NT$1,000)
Anticipated benefits
prevent dust collection and ash from escaping
1,992 Real-time monitoring to prevent accidents
In response to the current applied power
2,460
demand of 16000kw from Taipower to avoid
breach of contract
1,100
425
It helps check the concentration of some metal
ions in the discharged water
Sulfuric acid scrubbing and removal of waste
gas from barrels of wastewater plants
Plant area
Equipment name
Quantity
Investment cost
(Currency: RMB 1,000)
Anticipated benefits
Air quality monitoring
Anti-dust fence for scrap steel plant
New garbage dump project
Slag field car wash platform
Yantai
Walsin
Yantai
Walsin
Yantai
Walsin
Yantai
Walsin
Dongguan
Rain and sewage diversion project
Walsin
Shanghai
Walsin
Jiangying
Walsin
Jiangying
Walsin
Jiangying
Walsin
Changshu
Walsin
Sealed water recycling under CCV
Repair and maintenance of
wastewater sedimentation tank
Construction of wastewater
treatment temporary storage tank
and adjustment tank
Phosphating tank, boronizing tank
and lime tank replacement
Reconstruction of the pipe network
in the living area of the factory
Changshu
Laboratory transformation
Walsin
1
1
1
1
1
1
1
1
1
1
1
275
250
80
140
371
300
151
Monitoring unorganized emissions and
dust in the plant area to meet the
requirements of environmental
protection regulations
Reducing unorganized emissions from
steel scrap loading and unloading
Avoiding spilling rubbish and separating
rubbish
Reducing flour dust on the roads of the
factory and therefore dust
Rainwater and sewage diversion for
discharge
Cooling water purification is legal and
compliant with the rules
Reducing the concentration of metal
ions in produced wastewater
Temporary storage tank reduces the
300
impact of the pickling tank and reduces
the use of liquid
1,607
Rain and sewage diversion enables
pickling without dripping
Draining ground rainwater directly
10,000
from the plant area complies with
environmental protection requirements
600
The collection and discharge of waste
acid gas is more in line with regulations
5. Employees-employer relations
(1) Worker-Management Relations and Welfare
The pursuit of excellence, innovation and learning and friendly environment form the basis of sustainable
development at Walsin Lihwa. Its respect and attention to "people" is reflected in its human resources
management systems and various worker-management relations mechanisms, which are described as follows:
1. Smooth worker-management communication channels
145
Business Overview
(1) In 1976 the Company established an industry union to advocate suitable policies and the voice and
proposals of workers are communicated using an employer and employee dual-channel communication
method.
(2) Union representatives employer-employee negotiation meetings are held each quarter. Union
representative conferences are held every year to establish a good bridge of communication between
employers and employees.
(3) The Company publishes the "Walsin People Digital Newsletter" to share information on critical business
operations and management. The company has also established an international communication platform
to hold online events and opinion surveys.
2. The Company's remuneration is established on the principle of being able to attract and retain talent as
follows:
(1) Salary: The Company ensures that its overall remuneration is competitive in the market through regular
market salary surveys every year. The Company's remuneration policy is based on the following
principles:
• A reasonable and competitive overall remuneration based on the market value of each
professional function and the employee's contribution to their responsibilities.
• Bonus payments are made in accordance with the Company's operational performance, the
achievement of team objectives and the employee's personal contribution and performance.
• Employees are paid and compensated on the basis of their academic experience, technical
expertise, professional seniority and personal performance, without discrimination based on
gender, race, religion, political affiliation, marital status or union affiliation.
• The starting salary standards for fresh graduates and foreign workers comply with local laws and
regulations.
• We create harmonious labor relations within the scope of the law, in accordance with the
relevant local laws and regulations.
(2) Bonuses and Rewards: The reward and compensation system offered by the Company is designed to
motivate employees who perform well in their work. Performance bonuses and
production bonuses are granted based on the Company's operational performance,
achievement of team goals and individual performance, and employees are
remunerated according to the Company's profitability.
3. We also provide a diverse welfare system that includes the following:
Insurance & Protection
Subsidies
Other Benefits
insurance
(life
injury
hospitalization
insurance,
• Labor insurance
• Health insurance
• Group
insurance, accidental
insurance,
insurance, cancer
etc.)
• Overseas Travel and Expatriate
Insurance
• Regular health checks for all
staff
• Monthly pension payment
• Severance payments, pensions
146
• Travel Subsidies
• Subsidies for club activities
• Wedding and Funeral Grant
• Maternity benefit
• Supervisor's Health Benefits
• Hospitalization condolences
• Scholarship
Children
• Various
loans
interest-free
(emergency loans, education
loans for employees' children,
home purchase loans)
for Staff and
• Birthday Gift Vouchers
• 3 Festival Gift Money (Voucher)
• Labor's Day Souvenirs
• Staff dorms (for some factories)
• Commuter Bus (Factories)
• Annual leave of absence on a pro
rata basis upon onboarding, which
is better than what is provided by
law
• We invite experts and scholars to
give
life,
lectures on quality of
financial
mindfulness,
management,
to
colleagues
• Discount for employees by signing
contracts with vendors
• Gold medal for senior staff
travel
and
4. Under the "Walsin Lihwa Employee Learning and Development System," each employee is incorporated into
the Company's operating strategies, policies and target objectives based on his/her capabilities, job
performance and career development. This enables employees, job performance and the organization to be
fully integrated and to achieve synergies in employee learning and development. The content of the system
includes the following:
(1) Professional talent training in all levels
(2) Management talent training
(3) New employee orientation
(4) Employee general education courses
(5) Self-motivation course
(6) Quality and safety awareness course
In 2020, the Company spent a total of NT$13,160,000 on employee education and training. Details are as
follows:
Total training participation
Total training hours
35,218
67,709
Average training hours per
employee
14
Training statistics above include data from Taiwan and the subsidiaries in China.
5. Retirement system:
To provide job security to employees, the Company has established a retirement system pursuant to
regulatory requirements with specific measures as follow:
(1) Established a "Pension Oversight Committee" in 1986, whereby workers' pension funds are deposited
monthly into a pension account at the Bank of Taiwan.
(2) The Company has commissioned external consultants to prepare a pension fund actuarial report annually
since 1994 and set aside a pension reserve fund each month based on the actuarial report in order to
satisfy pension applications made by employees eligible for retirement.
(3) In line with the implementation of the new pension system in 2005, the company has continued the
issuance of the pension fund to retired employees who have elected to receive the pension under the old
system. As for employees adopting the new system, 6% of their salary will be monthly withdrawn as
retirement pension and deposited into each employee's personal account at Labor Insurance Bureau.
Employees may voluntarily contribute within the 6% to satisfy personal demand in retirement preparation
based on personal needs.
(4) According to the revisions of the Labor Standards Act in 2015, the Company assesses the balance in the
designated labor pension reserve funds account, calculate required labor pension funds for the laborers
who meet the legal retire criteria in the follow following year and make up the difference before the end of
March the following year.
(5) In addition to compliance with the aforementioned retirement regulations and in recognition of the
contributions made by retired employees, the company also issues commemorative medals and awards to
retired employees. Meanwhile, the Employee Welfare Committee as well as the industry union has also
issued retirement souvenirs to fully reflect the company's gratitude towards retired employees.
(6) For employees in China, the subsidiaries enroll their employees in pension plans as required by law and
make monthly contributions to the pension plans according to the local regulations in order to provide
adequate retirement protection for the employees.
6. Employee Code of Conduct:
To ensure that employees comply with obligations to the Company, customers, competitors and suppliers
during business operations, the Company has established an Employee Code of Conduct in order to regulate
employee behavior. The highlights of this Code are as follows:
147
Business Overview
(1) Obligation to the Company: All Company employees must be dedicated, studious, conform to all rules of
the Company and ensure confidentiality.
(2) Obligation to customers: When conducting business dealings in representation of this Company, the
employee's attitude must be humble and without any arrogance or pride lest damaging the Company's
image.
(3) Obligation to competitors: The Company's employees should gather competitor information to serve as a
reference for Company strategy in a legal and open manner.
(4) Obligation to suppliers: Negotiations and transactions with suppliers by employees must uphold the
principles of fairness, reasonableness and reciprocity in order to achieve a win-win result.
As a guide for employees to follow ethical standards and corporate governance, the Company has established
additionally an Employee Code of Ethical Conduct. The highlights of this Code are as follows:
(1) Prevention of conflicts of interests
(2) Prevention of opportunities to obtain personal gains
(3) Duty of confidentiality
(4) Fair trade
(5) Protection and appropriate use of Company assets
(6) Legal compliance
(7) Prohibition of gifts, bribes or any improper benefits
(8) Prohibition of external communication of information against the Company
(9) Equal employment opportunity and prohibition of discrimination
(10) Health and safety in workplace
(11) Correctly prepared documents and duty to maintain records
(12) Respect for intellectual property
(2) Protective measures taken to ensure a safe working environment and maintain employees' personal
safety
Walsin Lihwa's ESH and energy policy is "Green Manufacturing, Happy Enterprise and Sustainable Management"
by "Compliance, Risk Control, Health Care, Performance Enhancement, Consultation and Communication, and
All Employee Participation". Our safety culture strategy is "people-oriented, all-employee participation" and
"grassroots-oriented, rooted management". We will gradually improve the friendly environment and raise the
safety awareness of employees and workers to achieve the goal of "corporate sustainability, social co-prosperity,
environmental friendliness and employee harmony".
The health and safety system and administrative measures are as follows:
1. Comprehensively obtained
international certification for occupational safety and health
management system and safety management system (based on Taiwan Occupational Safety and Health
Management System (TOSHMS) in Taiwan and work safety standardization in China)
ISO45001
This year, Walsin Lihwa completed the establishment of ISO45001 occupational safety and health
management system in each plant, and reviewed the performance indicators of each unit in the Occupational
Safety and Health Committee and Environmental, Safety and Health Management Committee meetings. The
performance indicators are categorized into two types: active (promotion of key systems, support from the
top management of each plant, and disclosure of management systems, etc.) and passive (work-related
accidents and penalties from the competent authorities), and are planned and implemented in compliance
with laws and regulations. In addition, through the frequency of general (special) health checkups and testing
items for employees, we have implemented measures that are better than those stipulated by the regulations
to enhance employee work safety and promote health care, and to establish and move toward an all-around
safe and friendly Walsin Lihwa workplace through the management mechanism.
148
2. Designated health and safety and environmental management units or staff
Each of Walsin Lihwa's domestic and overseas plants also has its own Occupational Safety and Health
Committee (in Taiwan)/Safety Production Committee (in China). Those committees require a certain
percentage of labor representatives to participate and hold their own meeting every quarter to review the
work safety. In addition to the passing down of practical experience and the dissemination of ethical principles
in occupational safety, we provide a platform for the exclusive Environmental Safety and Health Committee
meeting minutes system and an electronic signature system for quarterly meeting results, and send internal
newsletters through the intranet with work-safety-related emails to share our experiences.
The Taiwanese plants have a safety and health committee in accordance with the law, and its labor
representatives are in compliance with regulatory requirements and meet quarterly.
Plants
China
Taiwan
General Members
Labor Representatives
61
56
16
31
3. Optimization and upgrade of Safe Job Procedure (SJP) and Risk Assessment Database Management System
In addition to the Risk Assessment Guidelines published by the Occupational Safety and Health Administration
of the Ministry of Labor in Taiwan and the dual-system LECD risk assessment method in China, the risk
assessment system has been set up in 13 system management modes based on the characteristics of Walsin
Lihwa's industry, so that each process and operation step, ranging from the initial condition investigation,
hazard factor determination, to risk assessment identification, can be presented objectively and rationally.
Since 2020, in line with the Group's policy and organizational changes, we have carried out a comprehensive
risk assessment system revision, and 2,675 Safe Job Procedures (SJPs) have been revised through discussions
among the dedicated staff and collaborative partners of 170 units in 10 plants at home and abroad. In this
way, each work participating in the formulation of SJPs may commonly comply with the operating procedures.
In 2020, 65 workers in the plants met with 65 minor or more serious incidents (including minor injuries; Note
1) and 114 false alarm incidents (false alarm rate of 208.06%; Note 2), which were included in the initiation of
risk assessment and safety revision of safety standards. Therefore, workers were involved to focus on work
safety together.
At the beginning of the implementation of this system, a large number of documents were managed
electronically, and inconsistencies in the document versions were quite frequent. In 2020's revision, the staff
has been retrained and implement one-stop management: implementing equipment risk control → daily point
inspection and maintenance list → responsible person immediately grasps the risk information. In addition,
considering the dual system in Mainland China, it is scheduled to increase the LECD risk control conversion in
2021 and add a special item for "facility/equipment" risk assessment, so that each plant can use it boldly to
facilitate verification.
4. Training on occupational safety and health for workers
The Walsin Lihwa Group believes that the focus of safety and health education and training is to enhance the
mindset, awareness and ability of employees and contractors on safety and health. In recent years, we have
gradually managed all employees' personal education and training records through Walsin Lihwa Academy,
and we can update the safety and health training information and provide inquiries in real time to make the
management, control and verification of safety and health training more effective. In addition, in 2020, each
plant in Taiwan actively promoted "basic safety and health training for contractors" activities. Therefore, new
contractor employees must receive one hour of safety and health education training before construction, and
pass the test before they can start their work, while the old contractor employees must receive at least one
hour of refresher training each year and complete and pass the test. The training classes and hours are as
follows:
149
Business Overview
Occupational Safety Educational
Training
Item
Newcomer Training
In-Service Training
Project Type (Including Emergency
Response)
Pre-Site Training for Contractors
Plants in Taiwan
Plants in China
Number of Persons
Number of Times
Number of Persons
Number of Times
352
2,698
1,935
1,792
-
714
34
119
232
3,491
358
542
-
843
41
292
In addition to the various professional safety and health technology and safety and health management
courses, Walsin Lihwa has set up an e-learning platform to provide colleagues with a convenient and easy self-
learning environment for pre-course preview and post-course review of occupational safety and health
information, and to combine the learning effectiveness and diversity of the physical courses to stabilize and
deepen the development of knowledge and skills, so as to extend the fun of learning and exploration of new
knowledge.
5. Emergency response: Integrated escape and fire drills implemented by the head office
In 2020, a total of 161 employees at the Taipei headquarters went through the fire escape drill, accounting for
74% of the 217 people working at the headquarters on that day. The escape drills for each department lasted
from 4 to 15 minutes and are expected to strengthen the escape capability at the headquarters in 2021 by
reducing the escape time.
6. Optimization of Contractor Management Information System
In addition to its commitment to fulfilling its corporate social responsibilities, the Company also requires that
its contractors should sign an environmental safety and social commitment letter with it to jointly comply with
the requirements of the environmental safety and health laws and reduce occupational disasters. In 2019, we
planned to promote the establishment of the contractor security and hygiene management system in Taiwan
(Yanshui Plant and Taichung Plant) first; based on the traditional contractor management, we have developed
and built the contractor security management and mobile phone application system with the advanced
intelligent system management. We hope to achieve the goal of ensuring the perfect construction measures
of contractors and promoting the participation of all employees in construction supervision through the gate-
keeping at all levels and the transparency of project construction information. Through the successful
experience of the Yanshui Plant and Taichung Plant, it was extended to all plants in Taiwan in the second half
of 2020, and in 2021, we plan to extend the installation of such system to all plants in China.
7. Improvement on environmental safety deficiencies and disasters
(1) Review of Accidents and Education: All work-related accidents are required to be rectified at the site of
the disaster, and the unit-in-charge is required to re-examine the operation, review the risks, and
improve the operation procedures depending on the situation, and at the same time, build disaster cases
and implement promotion and education on the Safe Job Procedures (SJPs) to avoid recurrence of such
accidents.
(2) Regular Compilation of Disaster Analysis and Learning: Quarterly safety committee meetings are held to
review and allow each plant to share their learning and vigilance.
(3) Review and Standardization of Common Operations: For the common disasters of mechanical equipment
(cutting and winding) and electrical equipment (induction), in addition to making improvement thereon in
the disaster area, we also review the common operations (energy breaking operations) and
standardization of the contractor management mode of each plant, so that each plant can follow the
same rules and regulations according to the local conditions, reduce the complexity of the cross-plant
(regional) communication interface, and improve the efficiency of safety management.
8. Continue to strengthen safety and health control intensity
150
(1) Combining with the production system, we start and implement the environmental safety and health
learning and standardization
in the plant, so as to achieve benchmark
management system
(corresponding to the position)
(2)
.Specialized Safety Management: Energy breaking operations, special equipment, equipment safety...etc
9. Establish friendly, safe and healthy workplace through health promotion
(1) Promote employee care, build a health management platform, and create a healthy workplace
Employees are the most important assets of a company, and Walsin Lihwa is committed to promoting
employee care, health promotion and management, and occupational disease prevention, and designs
feasible employee health promotion plans every year. With the focus on risk identification management,
health hazard assessment and labor environment review, we hold health seminars and health promotion
activities to promote preventive medicine and disease prevention, and strengthen the concept of
employee health; we have also built a health management system since 2020. Employees can check
health information through the health information platform provided by the system, and can also click
health or health education information through the platform, so that all employees can manage their
own health and improve their health balance, creating a healthy workplace where employees can feel at
ease, rest assured, and satisfied.
Health promotion is an important part of primary prevention in preventive medicine that positively and
actively prompts and encourages employees to change their health behaviors and habits, and increase
correct health knowledge, self-efficacy concepts and health belief patterns.
Walsin Lihwa is committed to providing a safe working environment for its employees and helping them
to balance work and life. The concept of disease prevention and early detection and treatment is very
important. In order to protect the health of employees and prevent the occurrence of occupational
diseases, Walsin Lihwa not only provides health examination services that are better and more frequent
than those provided by the law and, but also promotes a series of activities related to the prevention and
improvement of human factors engineering, prevention of diseases caused by overload, prevention of
unlawful infringement, and maternal labor health protection in accordance with the Occupational Safety
and Health Act to enhance employees' awareness of their own health. In 2020, a total of 18 pregnant
female employees received maternal labor health protection, with hazard identification, risk assessment,
and job description confirmation completed by health care providers through telephone or face-to-face
interviews, and health education information provided during pregnancy and after delivery. We aim to
promote health, prevent occupational diseases, and continue to promote better health.
(2) Risk management of in-plant hazardous operations
Every year, Walsin Lihwa also conducts health checkups and analyzes the results of the checkups
according to the risk management and inspection of items from in-plant special hazardous operation
(organic solvents, dust, high temperature, ionizing radiation, lead, manganese, nickel, and noise
operations) to establish a health protection plan against hazard materials, so that employees can have a
good working environment and avoid occupational diseases that may affect individuals and families, and
even cause losses to the Company. Therefore, creating a healthy workplace environment and giving care
and support can enhance the confidence and productivity of employees and create a win-win result.
(3) 2020 Promotion of Healthy Workplaces
Walsin continues to focus on the three main directions of creating a safe working environment,
protecting employee health and work-life balance to protect the physical and mental health of employees
and their families. The active promotion of occupational health and wellness management programs has
also received multiple recognitions: Yanshui Plant was awarded 2020 Sports Enterprise Certification by
the Sports Administration, Ministry of Education; Hsinchuang Plant was awarded 2020 National Excellent
Health Workplace - "Health Care Award"; Taichung Plant was awarded 2020 Taichung City Workplace
Health Promotion Competition Program - First Place in Workplace Walking Promotion Competition. We
also held a total of 6 blood donation events, where 426 people donated a total of 738 bags of blood.
151
Business Overview
(3) Labor dispute losses and countermeasures from the most recent year to the publication date of this
annual report: None.
Main Content
Restrictive Clauses
The loan is a three-year, non-
revolving facility, in the total
amount of USD 300 million.
indebtedness/Tangible
1. Current ratio >=100%
2. Debt ratio<=120%
(Net
Net Worth)
Interest
3.
>=150%
4. Net tangible assets >= NT$55
billion
coverage
ratio
Main Content
Restrictive Clauses
Walsin Centro AB area phase
two design, consultancy,
construction, power
distribution, etc.,in a total of
RMB129,874,000.
None
Main Content
Restrictive Clauses
Design and construction of a
self-built plant including ferro-
nickel smelting and thermal
power generation projects. The
total contract price is
approximately US$93 million.
Nickel-iron rotary kiln - ore-
heater production line
equipment and thermal power
generation unit procurement.
The contract price is US$250
million.
None
None
6. Material Contracts
(1) Walsin Lihwa Corporation
Nature of
Contract
Contracting
Parties
Loan
Agreement
DBS Bank
Contract
Term Dates
The
agreement
was signed
on March
23, 2020,
with the
maturity of
the loan
falling on
April 15,
2023
(2) Walsin (Nanjing) Development Co., LTD.
Nature of
Contract
Construction
Agreement
Contract
Term Dates
2019/05 ~
Contracting
Parties
45 companies
including
Shanghai
Construction
No.1 (Group)
Co., Ltd.
(3) Walsin Nickel Industrial Indonesia
Nature of
Contract
Engineering
Agreement
Equipment
Purchase and
Sale
Agreement
Contracting
Parties
PT.Plenty
Bumi
International
and ETERNAL
TSINGSHAN
GROUP
LIMITED
ETERNAL
TSINGSHAN
GROUP
LIMITED
Contract
Term Dates
2020/04/ ~
2020/04/ ~
152
VI Financial Information
1. Brief Balance Sheets and Comprehensive Income Statements of Recent Five Years
(1) Condensed Balance Sheet – Consolidated (Based on IFRSs)
Unit: NT$ thousands
Year
Financial Summary for the Last Five Years
Items
2016
2017
2018
2019
2020
Current Assets
55,356,705
63,652,434
58,726,913
60,789,794
56,176,808
Property,Plant and
Equipment
Intangible Assets
Other Assets
Total Assets
Current
Liabilities
Before
Distibution
After
Distibution
20,483,863
20,984,890
25,083,436
27,845,109
34,294,221
177,029
169,726
164,451
168,134
175,000
38,161,617
45,443,695
48,679,310
49,263,365
60,917,977
114,179,214
130,250,745
132,654,110
138,066,402
151,564,006
32,360,784
34,618,169
32,146,970
40,743,553
31,458,157
34,688,984
37,944,169
36,138,170
42,406,553
34,546,357
Non-current Liabilities
16,536,425
23,352,320
21,242,797
18,756,735
32,825,019
Total
Liabilities
Before
Distibution
After
Distibution
Equity Attributable to
owners of the Company
Capital Stock
Capital Surplus
Retained
Earnings
Before
Distibution
After
Distibution
Other Equity
Treasury Stock
Non-controlling
Interests
Total
Equity
Before
Distibution
After
Distibution
48,897,209
57,970,489
53,389,767
59,500,288
67,371,376
51,225,409
61,296,489
57,380,967
61,163,288
65,998,842
63,365,942
70,523,463
77,328,012
77,384,341
84,468,235
33,960,002
33,660,002
33,260,002
33,260,002
32,260,002
15,701,403
15,854,392
15,966,420
16,055,238
15,690,406
15,211,219
19,234,380
32,144,727
31,179,511
36,330,187
12,883,019
15,908,380
28,153,527
29,516,511
33,241,987
(897,872)
2,090,607
(4,043,137)
(3,110,410)
187,640
(608,810)
(315,918)
0
0
0
1,916,063
1,756,793
1,936,331
1,181,773
2,812,595
65,282,005
72,280,256
79,264,343
78,566,114
87,280,830
62,953,805
68,954,256
75,273,143
76,903,114
84,192,630
153
Financial Information
(2) Condensed Balance Sheet - Unconsolidated (Based on IFRSs)
Unit: NT$ thousands
Year
Financial Summary for the Last Five Years
Items
2016
2017
2018
2019
2020
Current Assets
12,619,660
15,188,603
16,809,906
16,615,466
18,421,337
Property,Plant and
Equipment
Intangible Assets
13,853,939
14,356,176
16,432,206
17,621,858
17,493,296
-
-
-
-
-
Other Assets
67,646,531
76,090,868
86,063,522
86,140,209
104,556,223
Total Assets
94,120,130
105,635,647
119,305,634
120,377,533
140,470,856
Current
Liabilities
Before
Distibution
After
Distibution
Non-current Liabilities
Total
Liabilities
Before
Distibution
After
Distibution
Capital Stock
Capital Surplus
Retained
Earnings
Before
Distibution
After
Distibution
Other Equity
Treasury Stock
Total
Equity
Before
Distibution
After
Distibution
14,688,116
12,497,690
21,561,638
25,700,349
24,192,375
17,016,316
15,823,690
25,552,838
27,363,349
27,280,575
16,066,072
22,614,494
20,415,984
17,292,843
31,810,246
16,066,072
22,614,494
20,415,984
17,292,843
56,002,621
16,066,072
22,614,494
20,415,984
17,292,843
59,090,821
33,960,002
33,660,002
33,260,002
33,260,002
32,260,002
15,701,403
15,854,392
15,966,420
16,055,238
15,690,406
15,211,219
19,234,380
32,144,727
31,179,511
36,330,187
12,883,019
15,908,380
28,153,527
29,516,511
33,241,987
(897,872)
2,090,607
(4,043,137)
(3,110,410)
187,640
(608,810)
(315,918)
0
0
0
63,365,942
70,523,463
77,328,012
77,384,341
84,468,235
61,037,742
67,197,463
73,336,812
75,721,341
81,380,035
154
(3) Condensed Income Statements - Consolidated (Based on IFRSs)
Year
Financial Summary for the Last Five Years
Unit: NT$ thousands (Excpet EPS)
Items
Net Sales
Gross Profit
Operating Income
Non-operating
Revenue and
Expense
Profit before Taxes
Gain from Continued
Operations
Loss from
Discontinued
Operations
Profit for the year
Other
comprehensive
income,net of
income tax
Total comprehensive
income for the year
Profit for the year
attributable to
owners of the
company
Profit for the year
attributable to non-
controlling interests
Total comprehensive
income for the year
attributable to
owners of the
company
Total comprehensive
income for the year
attributable to non-
controlling interests
Earnings Per Share
2016
2017
2018
2019
2020
143,355,241
167,792,585
190,915,137
134,804,405
112,546,603
9,564,407
12,004,831
15,935,365
9,390,566
12,468,338
5,321,774
7,895,645
11,026,209
4,059,474
7,385,062
851,597
1,498,803
5,644,765
680,793
1,865,603
6,173,371
9,394,448
16,670,974
4,740,267
9,250,665
4,838,503
6,694,013
11,959,287
3,783,324
7,005,801
-
-
-
-
-
4,838,503
6,694,013
11,959,287
3,783,324
7,005,801
(239,696)
2,786,719
(3,142,772)
915,620
3,338,209
4,598,807
9,480,732
8,816,515
4,698,944
10,344,010
4,568,125
6,559,984
11,756,781
3,149,679
6,691,149
270,378
134,029
202,506
633,645
314,652
4,252,535
9,362,394
8,612,785
4,082,661
10,114,207
346,272
118,338
203,730
616,283
229,803
1.33
1.97
3.53
0.95
2.04
155
Financial Information
(4) Condensed Income Statements - Unconsolidated (Based on IFRSs)
Year
Financial Summary for the Last Five Years
Unit: NT$ thousands (Excpet EPS)
Items
Net Sales
Gross Profit
Operating Income
Non-operating
Revenue and
Expense
Profit before Taxes
Gain from Continued
Operations
Loss from
Discontinued
Operations
Profit for the year
Other
comprehensive
income,net of
income tax
Total comprehensive
income for the year
Earnings Per Share
2016
2017
2018
2019
2020
67,074,039
76,123,074
85,099,970
71,596,648
64,097,690
5,982,561
5,318,064
3,840,250
4,155,851
4,457,566
4,785,519
3,836,535
2,122,510
2,445,178
2,681,141
390,100
3,290,917
10,123,522
644,517
3,982,969
5,175,619
7,127,452
12,246,032
3,089,695
6,664,110
4,568,125
6,559,984
11,756,781
3,149,679
6,691,149
-
-
-
-
-
4,568,125
6,559,984
11,756,781
3,149,679
6,691,149
(315,590)
2,802,410
(3,143,996)
932,982
3,423,058
4,252,535
9,362,394
8,612,785
4,082,661
10,114,207
1.33
1.97
3.53
0.95
2.04
(5) Auditors’ Opinion from 2016 to 2020
Year
2016
2017
2018
2019
2020
CPA
Deloitte & Touche
Hung-Bin Yu, Kenny Hong
Deloitte & Touche
Ming-Yu Chiu, Hung-Bin Yu
Deloitte & Touche
Kenny Hong, Ming-Yu Chiu
Deloitte & Touche
Wen-Yea, Shyu, Kwan-Chung, Lai
Deloitte & Touche
Wen-Yea, Shyu, Kwan-Chung, Lai
Audit Opinion
An Unmodified Opinion with an Other
Matter Paragraph
An Unmodified Opinion with an Other
Matter Paragraph
An Unmodified Opinion with an Other
Matter Paragraph
An Unmodified Opinion with an Other
Matter Paragraph
An Unmodified Opinion with an Other
Matter Paragraph
156
2.
Financial Analysis of Recent Five Years
(1) Financial Analysis – Consolidated (Based on IFRSs)
Analysis Items
Capital
structure (％)
Liquidity
analysis (%)
Year
Financial Analysis for the Last Five Years
2016
2017
2018
2019
2020
Debt Ratio
42.82
44.50
40.24
43.09
42.41
Ratio of long-term Capital to Property,
Plant and Equipment
Current Ratio
Quick Ratio
399.42
455.72
400.69
349.51
350.22
171.06
183.87
182.68
149.20
178.57
76.01
80.75
94.86
89.96
93.02
Interest Coverage Ratio (times)
2,011.36
1,931.29
2,536.69
947.08
1,813.14
Accounts Receivable Turnover (Times)
Average Collection Period
Inventory Turnover (Times)
Operating
Accounts Payable Turnover (times)
Performance
Average Days in Sales
Property,
plant
Turnover (Times)
and
equipment
Total Assets Turnover (Times)
Return on Total Assets (%)
Return on Stockholders’ equity (%)
Profitability
Pre-tax Income to Paid-in Capital (%)
analysis
Profit Ratio (%)
Earnings (loss) Per Share (NT$)
(Note 1)
Cash Flow Ratio (%)
Cash Flow Adequacy Ratio (%)
Cash Reinvestment Ratio (%)
Cash
Flow(Note 2)
Leverage
Operating Leverage
Financial Leverage
9.83
37.13
5.38
17.98
67.84
7.53
1.31
4.65
7.51
18.17
3.37
11.75
31.06
5.24
17.39
69.65
8.09
1.37
5.77
9.73
27.90
3.98
12.56
29.06
5.99
18.67
60.93
8.28
1.45
9.47
15.78
50.12
6.26
10.06
36.28
5.21
15.32
70.05
5.09
0.99
3.12
4.79
14.25
2.80
10.35
35.26
4.64
13.30
78.66
3.62
0.77
5.12
8.44
28.67
6.22
1.33
1.97
3.53
0.95
2.04
22.98
92.90
7.69
2.28
1.06
22.23
83.19
5.32
1.49
1.06
9.39
62.30
0.00
1.48
1.06
21.17
72.07
4.51
2.93
1.15
22.72
68.03
4.58
2.06
1.07
Analysis of financial ratio difference for the last two years (Not required if the difference does not exceed 20%)
A. Compared to 2019, interest coverage ratio, return on total assets, return on stockholders’ equity, pre-tax
income to paid-in capital, profit ratio and earnings per share in 2020 show an increase. It’s because that profit
before tax and profit for the year ended December 31, 2020 increased.
B. Compared to 2019, property, plant and equipment turnover and total assets turnover in 2020 show a
decrease. It’s because that operating revenue for the year ended December 31, 2020 decreased.
C. Compared to 2019, average collection period in 2020 show a decrease. It’s because that operating revenue for
the year ended December 31, 2020 increased.
Note 1 If net cash provided by operating activities is negative , shall not be calculated.
Note 2 Financial analysis formulas show as the following:
1.Financial Structure:
(1)Debt Ratio＝Total liabilities／Total assets
(2)Ratio of Long-term Capital to Property, plant and equipment＝(Stockholders’ equity＋non-current
liabilities)／net worth of Property, plant and equipment
2.Solvency:
(1)Current Ratio＝Current assets／Current liabilities
(2)Quick Ratio＝(Current assets－inventories－prepaid expenses)／Current liabilities
157
Financial Information
(3)Interest Coverage Ratio＝Income before tax and interest expenses／Current Interest expenses
3.Operating Performance:
(1)Receivable (included trade receivables and operating notes receivable) Turnover＝ Net sales／
Average receivables for each period (included trade receivables and operating notes receivable)
(2)Average Collection Period Turnover Days＝365／Receivable turnover
(3)Inventory Turnover＝Cost of sales／Average inventories
(4) Payables (included trade payables and operating notes payable) Turnover＝Cost of sales／
Average payables for each period (included trade payables and operating notes payable)
(5)Average Days in Sales＝365／Inventory turnover
(6)Property, Plant and Equipment Turnover＝Net sales／Average of property, plant and equipment,
net
(7)Total Assets Turnover＝Net sales／Average of total assets
4.Profitability:
(1)Return on Total Assets＝〔Net income after tax＋interest expense×（1－tax rate）〕／ Average
of total assets
(2)Return on Stockholders’ equity＝Net income after tax／Average of stockholders’ equity
(3)Profit Ratio＝Net income after tax／Net sales
(4)Earnings (loss) Per Share＝Net income attributable to owners－stock dividend -preferred）／
Weighted average of outstanding shares
5.Cash Flow:
(1)Cash Flow Ratio＝Net cash provided by operating activities／Current liabilities
(2)Cash Flow Adequacy Ratio＝Net cash provided by operating activities in recently five years／
Recently five years of ( capital expenses＋increase of inventories+ cash dividend)
(3)Cash Reinvestment Ratio＝(Net cash provided by operating activities- cash dividend)／ (Property,
plant and equipment, gross +long-term investment + other non-current assets + working capital)
6.Leverage:
(1)Operating Leverage＝(Net sales－variable operating cost and expense)／Operating income
(2)Financial Leverage＝Operating income／(Operating income－interest expense)
158
(2) Financial Analysis –Unconsolidated (Based on IFRSs)
Analysis Items
2016
2017
2018
2019
2020
Year
Financial Analysis for the Last Five Years
Debt Ratio
32.67
33.23
35.18
35.71
39.86
Capital
structure (％)
Liquidity
analysis (%)
Operating
Performance
Profitability
analysis
Cash
Flow(Note 2)
Leverage
to
Turnover
Receivable
Ratio of Long-term Capital
Property, plant and equipment
Current Ratio
Quick Ratio
Interest Coverage Ratio (times)
Accounts
(Times)
Average Collection Period
Inventory Turnover (Times)
Accounts Payable turnover (times)
Average Days in Sales
Property, plant and equipment
Turnover (Times)
Total Assets Turnover (Times)
Return on Total Assets (%)
Return on Stockholders’ equity (%)
Pre-tax Income to Paid-in Capital
(%)
Profit Ratio (%)
Earnings Per Share (NT$)
Cash Flow Ratio (%)
Cash Flow Adequacy Ratio (%)
Cash Reinvestment Ratio (%)
Operating Leverage
Financial Leverage
573.35
648.76
594.83
537.27
664.70
85.91
28.86
121.53
44.92
77.96
22.20
64.65
26.77
76.14
30.89
1,210.70
1,741.08
2,652.81
676.50
1,571.22
36.83
9.91
9.00
20.65
40.55
5.26
0.70
5.26
7.30
33.13
11.01
8.20
19.34
44.51
5.39
0.76
6.96
9.79
31.71
32.56
32.75
11.51
7.94
20.33
45.96
5.52
0.75
10.86
15.90
11.21
6.53
21.25
55.89
4.20
0.59
3.08
4.07
11.14
6.67
23.75
54.72
3.65
0.49
5.47
8.26
15.24
21.17
36.81
9.28
20.65
6.81
1.33
18.53
46.64
2.46
1.71
8.61
1.97
29.65
47.63
1.44
2.03
13.81
3.53
9.03
34.25
0.00
2.55
4.39
0.95
18.90
46.95
0.89
2.63
10.43
2.04
16.21
45.79
2.10
2.52
1.20
Analysis of financial ratio difference for the last two years (Not required if the difference does not exceed
20%)
A. Compared to 2019, interest coverage ratio, return on total assets, return on stockholders’ equity,
pre-tax income to paid-in capital, profit ratio and earnings per share in 2020 show an increase. It’s
because that profit before tax and profit for the year ended December 31, 2020 increased.
1.28
1.29
1.10
1.12
B. Compared to 2019, property, plant and equipment turnover and total assets turnover in 2020 show
an decrease. It’s because that operating revenue for the year ended December 31, 2020 decreased.
C. Compared to 2019, operating leverage show a decrease. It’s because that operating revenue for the
year ended December 31, 2020 increased.
Note 1: If net cash provided by operating activities is negative , shall not be calculated.
Note 2: Financial analysis formulas see Table (1).
159
Financial Information
3. Audit Committee’s Review Report for the Recent Year
Audit Committee’s Report
The Board of Directors has prepared the Company’s 2020 Business Report, Financial
Statements, and proposal for allocation of earnings. The Financial Statements had been
audited by Deloitte & Touche Accountants, Wen-Ya Hsu and Kuan-Chung Lai and has
issued an audit report.
The Business Report, Financial Statements, and earnings allocation proposal have
been reviewed and determined to be correct and accurate by the Audit Committee
members of Walsin Lihwa Corporation. According to Article 14-4 of the Securities and
Exchange Act and Article 219 of the Company Law, we hereby submit this report.
Walsin Lihwa Corporation
Chairman of the Audit Committee: Ming-Ling Hsueh
February 26, 2021
160
4.Financial Statements of Recent Years
INDEPENDENT AUDITORS’ REPORT
The Board of Directors and Shareholders
Walsin Lihwa Corporation
Opinion
We have audited the accompanying consolidated financial statements of Walsin Lihwa Corporation
and its subsidiaries (the “Group”), which comprise the consolidated balance sheets as of December 31,
2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash
flows for the years 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 reports of other auditors (as set out in the Other Matter
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 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 audit of the consolidated financial statements for the year ended December 31,
2020 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.
We conducted our audit of the consolidated financial statements for the year ended December 31,
2019 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements
by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory
Commission of the Republic of China on February 25, 2020 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. 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 consolidated financial statements as of and for the year ended December 31, 2020.
These matters were addressed in the context of our audit of the consolidated financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The following are the key audit matters of the consolidated financial statements of the Group as of and
for the year ended December 31, 2020:
161
Financial Information
Sales Revenue Recognition
In 2020, the main products of the Group's wires and cables business unit include bare copper wires,
wires and cables. The fluctuation in prices of bare copper wires is often subject to the movement in
prices of raw materials, and thus some of the sales prices are set according to the market prices agreed
under the contracts at the time of shipments. The Group prepares reports on point of sale transactions
by referring to the actual shipments and market price adjustments as the basis for revenue recognition.
Due to the large number of transactions and different market prices that have been agreed upon by
customers, the processing, recording and maintenance of such reports are performed manually in
which their amounts are significant to the consolidated financial statements. Therefore, the accuracy of
revenue recognized from sales of bare copper wires was considered as a key audit matter. Refer to
Notes 4 and 23 to the consolidated financial statements for related accounting policies and disclosure
of information relating to revenue recognition.
Our audit procedures performed in respect of the above key audit matter were as follows:
1. We obtained an understanding and tested the reasonableness of revenue recognition policy and
internal control procedures over the sales of bare copper wires, and evaluated the effectiveness of
relevant internal controls.
2. We performed sampling and reconciliation of sales prices and quantities with their respective
amounts in the contracts and verified the accuracy of market price adjustments.
3. We verified the accuracy of monthly reports by recalculating the sales revenue and confirmed that
the recognized amounts were consistent with those recorded in the general ledger.
Other Matter
The financial statements of certain subsidiaries included in the consolidated financial statements as of
and for the years ended December 31, 2020 and 2019 were audited by other auditors. Our opinion,
insofar as it relates to such subsidiaries, is based solely on the reports of other auditors. The total assets
of such subsidiaries amounted to NT$10,148,841 thousand and NT$10,076,558 thousand, which
constituted 6.70% and 7.30% of the Group’s consolidated total assets, as of December 31, 2020 and
2019, respectively, and the total net operating revenue of such subsidiaries amounted to
NT$18,427,711 thousand and NT$15,531,341 thousand, which constituted 16.37% and 11.52% of the
Group’s consolidated total net operating revenue, for the years ended December 31, 2020 and 2019,
respectively.
The financial statements of certain equity-method investees included in the consolidated financial
statements as of and for the year ended December 31, 2019 was audited by other auditors. The
investment in such investees decreased to NT$0 thousand as of December 31, 2019 and the investment
loss amounted to NT$1,004,729 thousand, which constituted (21.20%) of the Group consolidated
profit before income tax for the year ended December 31, 2019.
We have also audited the parent company only financial statements of Walsin Lihwa Corporation as of
and for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion
with other 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
162
Securities Issuers and 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, 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.
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.
163
Financial Information
5. Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision, and performance of the group audit. We remain
solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements for the year ended
December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
The engagement partners on the audit resulting in this independent auditors’ report are Wen-Yea Shyu
and Kwan-Chung Lai.
Deloitte & Touche
Taipei, Taiwan
Republic of China
February 26, 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 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.
164
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)
Financial assets at fair value through profit or loss - current (Notes 4 and 7)
Financial assets at amortized cost - current (Notes 4 and 9)
Derivative financial assets for hedging - current (Notes 4 and 8)
Contract assets - current (Notes 4 and 10)
Notes receivable (Note 11)
Trade receivables (Note 11)
Finance lease receivables (Notes 4 and 12)
Other receivables (Note 27)
Inventories (Notes 4 and 13)
Other financial assets (Note 6)
Other current assets
Total current assets
NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 4 and 7)
Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 14)
Investments accounted for using the equity method (Notes 4 and 16)
Property, plant and equipment (Notes 4 and 17)
Right-of-use assets (Notes 4 and 18)
Investment properties (Notes 4 and 19)
Other intangible assets
Deferred tax assets - non-current (Notes 4 and 25)
Refundable deposits
Long-term finance lease receivables (Notes 4 and 12)
Other non-current assets
Total non-current assets
TOTAL
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 20)
Financial liabilities at fair value through profit or loss - current (Notes 4 and 7)
Derivative financial liabilities for hedging - current (Notes 4 and 8)
Contract liabilities - current
Notes payable
Trade payables
Current tax liabilities (Notes 4 and 25)
Other payables
Lease liabilities - current (Notes 4 and 18)
Current portion of long-term borrowings (Note 20)
Other current liabilities (Note 27)
Total current liabilities
NON-CURRENT LIABILITIES
Long-term borrowings (Note 20)
Deferred tax liabilities - non-current (Notes 4 and 25)
Lease liabilities - non-current (Notes 4 and 18)
Net defined benefit liabilities (Notes 4 and 21)
Other non-current liabilities (Note 28)
Total non-current liabilities
Total liabilities
EQUITY ATTRIBUTABLE TO OWNERS OF WLC (Note 22)
Share capital
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Total retained earnings
Other equity
Exchange differences on translation of the financial statements of foreign operations
Unrealized gain on financial assets at fair value through other comprehensive income
Total other equity
Total equity attributable to owners of WLC
NON-CONTROLLING INTERESTS
Total equity
2020
2019
Amount
%
Amount
%
$ 11,944,408
73,329
1,315,970
8,282
4,460,992
2,974,132
7,543,131
56,128
887,091
21,080,535
705,277
5,127,533
56,176,808
5,683,859
6,910,644
32,767,091
34,294,221
1,664,406
9,874,926
175,000
2,428,545
221,314
720,585
646,607
95,387,198
8
-
1
-
3
2
5
-
1
14
-
3
37
4
5
22
23
1
6
-
2
-
-
-
63
$ 11,753,006
69,795
1,470,571
-
4,014,672
3,576,333
7,637,759
54,278
8,076,664
22,019,088
317,733
1,799,895
60,789,794
-
5,323,365
29,012,467
27,845,109
1,363,823
10,032,989
168,134
2,048,176
183,291
776,713
522,541
77,276,608
8
-
1
-
3
3
6
-
6
16
-
1
44
-
4
21
20
1
7
-
2
-
1
-
56
$ 151,564,006
100
$ 138,066,402
100
$
6,591,019
8,374
-
1,499
235,258
7,494,471
4,557,761
5,143,921
75,261
6,162,400
1,188,193
31,458,157
31,406,829
214,457
274,442
384,299
544,992
32,825,019
64,283,176
32,260,002
15,690,406
5,428,200
3,110,410
27,791,577
36,330,187
(5,905,135)
6,092,775
187,640
84,468,235
2,812,595
87,280,830
4
-
-
-
-
5
3
4
-
4
1
21
21
-
-
-
-
21
42
21
11
4
2
18
24
(4)
4
-
56
2
58
$ 12,457,481
6,026
14,346
518
342,409
6,967,817
4,587,562
4,901,323
76,467
6,564,196
4,825,408
40,743,553
16,929,215
179,314
225,505
536,614
886,087
18,756,735
59,500,288
33,260,002
16,055,238
5,113,232
4,043,138
22,023,141
31,179,511
(5,546,359)
2,435,949
(3,110,410)
77,384,341
1,181,773
78,566,114
9
-
-
-
-
5
3
4
-
5
3
29
12
-
-
1
1
14
43
24
12
3
3
16
22
(4)
2
(2)
56
1
57
TOTAL
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
$ 151,564,006
100
$ 138,066,402
100
165
Financial Information
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2020 AND 2019
(In Thousands of US Dollars)
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)
Financial assets at fair value through profit or loss - current (Notes 4 and 7)
Financial assets at amortized cost - current (Notes 4 and 9)
Derivative financial assets for hedging - current (Notes 4 and 8)
Contract assets - current (Notes 4 and 10)
Notes receivable (Note 11)
Trade receivables (Note 11)
Finance lease receivables (Notes 4 and 12)
Other receivables (Note 27)
Inventories (Notes 4 and 13)
Other financial assets (Note 6)
Other current assets
Total current assets
NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 4 and 7)
Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 14)
Investments accounted for using the equity method (Notes 4 and 16)
Property, plant and equipment (Notes 4 and 17)
Right-of-use assets (Notes 4 and 18)
Investment properties (Notes 4 and 19)
Other intangible assets
Deferred tax assets - non-current (Notes 4 and 25)
Refundable deposits
Long-term finance lease receivables (Notes 4 and 12)
Other non-current assets
Total non-current assets
TOTAL
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 20)
Financial liabilities at fair value through profit or loss - current (Notes 4 and 7)
Derivative financial liabilities for hedging - current (Notes 4 and 8)
Contract liabilities - current
Notes payable
Trade payables
Current tax liabilities (Notes 4 and 25)
Other payables
Lease liabilities - current (Notes 4 and 18)
Current portion of long-term borrowings (Note 20)
Other current liabilities (Note 27)
Total current liabilities
NON-CURRENT LIABILITIES
Long-term borrowings (Note 20)
Deferred tax liabilities - non-current (Notes 4 and 25)
Lease liabilities - non-current (Notes 4 and 18)
Net defined benefit liabilities (Notes 4 and 21)
Other non-current liabilities (Note 28)
Total non-current liabilities
Total liabilities
EQUITY ATTRIBUTABLE TO OWNERS OF WLC (Note 22)
Share capital
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Total retained earnings
Other equity
Exchange differences on translation of the financial statements of foreign operations
Unrealized gain on financial assets at fair value through other comprehensive income
Total other equity
Total equity attributable to owners of WLC
NON-CONTROLLING INTERESTS
Total equity
2020
2019
Amount
%
Amount
%
$
419,396
2,575
46,207
291
156,636
104,429
264,857
1,971
31,148
740,187
24,764
180,040
1,972,501
199,574
242,649
1,150,530
1,204,151
58,441
346,732
6,145
85,272
7,771
25,301
22,703
3,349,269
8
-
1
-
3
2
5
-
1
14
-
3
37
4
5
22
23
1
6
-
2
-
-
-
63
$
412,676
2,451
51,635
-
140,965
125,573
268,180
1,906
283,591
773,142
11,156
63,199
2,134,474
-
186,916
1,018,696
977,707
47,887
352,282
5,904
71,916
6,436
27,272
18,348
2,713,364
8
-
1
-
3
3
6
-
6
16
-
1
44
-
4
21
20
1
7
-
2
-
1
-
56
$ 5,321,770
100
$ 4,847,838
100
$
231,426
294
-
53
8,260
263,149
160,034
180,615
2,643
216,376
41,720
1,104,570
1,102,768
7,530
9,636
13,494
19,135
1,152,563
2,257,133
1,132,725
550,927
190,597
109,214
975,828
1,275,639
(207,343)
213,932
6,589
2,965,880
98,757
3,064,637
4
-
-
-
-
5
3
4
-
4
1
21
21
-
-
-
-
21
42
21
11
4
2
18
24
(4)
4
-
56
2
58
$
437,412
212
504
18
12,023
244,656
161,080
172,097
2,685
230,484
169,431
1,430,602
594,425
6,296
7,918
18,842
31,113
658,594
2,089,196
1,167,837
563,737
179,538
141,964
773,285
1,094,787
(194,746)
85,532
(109,214)
2,717,147
41,495
2,758,642
9
-
-
-
-
5
3
4
-
5
3
29
12
-
-
1
1
14
43
24
12
3
3
16
22
(4)
2
(2)
56
1
57
TOTAL
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
$ 5,321,770
100
$ 4,847,838
100
166
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2020
2019
Amount
%
Amount
%
OPERATING REVENUE (Notes 4 and 23)
$
112,546,603
100
$
134,804,405
100
OPERATING COSTS (Notes 4 and 13)
(100,078,265)
(89)
(125,413,839)
(93)
GROSS PROFIT
12,468,338
11
9,390,566
OPERATING EXPENSES
Selling and marketing expenses
General and administrative expenses
Research and development expenses
Total operating expenses
PROFIT FROM OPERATIONS
NON-OPERATING INCOME AND EXPENSES
Interest income
Dividend income
Other income
(Loss) gain on disposal of property, plant and
equipment
Gain on disposal of investment property (Note
31)
Gain (loss) on valuation of financial assets and
liabilities
(Recognition) reversal of impairment loss
(Notes 4 and 24)
Other expenses
Foreign exchange (loss) gain, net
Interest expense
(Loss) gain on disposal of investments (Note
24)
Share of profit of associates under the equity
method
1,868,164
3,091,413
123,699
5,083,276
7,385,062
261,523
110,990
136,095
(7,979)
-
732,121
674
(381,505)
(66,726)
(539,982)
(75,927)
1,696,319
Total non-operating income and expenses
1,865,603
PROFIT BEFORE INCOME TAX FROM
CONTINUING OPERATIONS
9,250,665
INCOME TAX EXPENSE (Notes 4 and 25)
(2,244,864)
NET PROFIT FOR THE YEAR
7,005,801
2
3
-
5
6
-
-
-
-
-
1
-
-
-
-
-
1
2
8
2,076,993
3,111,371
142,728
5,331,092
4,059,474
268,338
136,772
195,467
854,514
246,877
(106,368)
(1,680,575)
(338,237)
112,757
(559,596)
822,882
727,962
680,793
4,740,267
7
2
2
-
4
3
-
-
-
1
-
-
(1)
-
-
-
1
-
1
4
(2)
6
(956,943)
(1)
3,783,324
3
(Continued)
167
Financial Information
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2020
2019
Amount
%
Amount
%
OTHER COMPREHENSIVE INCOME (LOSS)
Items that may not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit plans
Unrealized gain on financial assets at fair
value through other comprehensive
income
Share of the other comprehensive income of
associates accounted for using the equity
method
Items that will be reclassified subsequently to
profit or loss:
Exchange loss on translation of foreign
operations
Gain on cash flow hedges
Share of other comprehensive loss of
associates under the equity method
$
36,292
1,077,834
2,664,780
3,778,906
(358,081)
-
(82,616)
(440,697)
Other comprehensive income for the year
3,338,209
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
NET INCOME ATTRIBUTABLE TO:
Owners of WLC
Non-controlling interests
COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Owners of WLC
Non-controlling interests
EARNINGS PER SHARE (Note 26)
Basic
Diluted
$
$
$
$
$
10,344,010
6,691,149
314,652
7,005,801
10,114,207
229,803
10,344,010
$
$
2.04
2.04
-
1
1
2
(2)
-
-
(2)
-
3
2
1
3
3
-
3
-
1
2
3
-
-
-
-
3
9
6
-
6
9
-
9
$
(22,278)
1,185,769
1,747,483
2,910,974
(1,766,406)
1,151
(230,099)
(1,995,354)
915,620
4,698,944
3,149,679
633,645
3,783,324
4,082,661
616,283
4,698,944
$
$
0.95
0.95
$
$
$
$
$
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
(Concluded)
168
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of U.S. Dollars, Except Earnings Per Share)
OPERATING REVENUE (Notes 4 and 23)
$
3,951,777
2020
Amount
%
100
2019
Amount
%
$ 4,733,301
100
OPERATING COSTS (Notes 4 and 13)
(3,513,984)
(89)
(4,403,576)
(93)
GROSS PROFIT
437,793
11
329,725
OPERATING EXPENSES
Selling and marketing expenses
General and administrative expenses
Research and development expenses
Total operating expenses
PROFIT FROM OPERATIONS
NON-OPERATING INCOME AND EXPENSES
Interest income
Dividend income
Other income
(Loss) gain on disposal of property, plant and
equipment
Gain on disposal of investments properties
(Note 31)
(Gain) loss gain on valuation of financial assets
and liabilities
(Recognition) reversal of impairment loss
(Notes 4 and 24)
Other expenses
Foreign exchange (loss) gain, net
Interest expense
(Loss) gain on disposal of investments (Note
24)
Share of profit of associates under the equity
method
Total non-operating income and expenses
PROFIT BEFORE INCOME TAX FROM
CONTINUING OPERATIONS
INCOME TAX EXPENSE (Notes 4 and 25)
NET PROFIT FOR THE YEAR
65,596
108,547
4,343
178,486
259,307
9,183
3,897
4,779
(280)
-
25,706
24
(13,396)
(2,343)
(18,960)
(2,666)
59,562
65,506
324,813
(78,823)
245,990
2
3
-
5
6
-
-
-
-
-
1
-
-
-
-
-
1
2
8
(2)
6
72,928
109,248
5,011
187,187
142,538
9,422
4,802
6,863
30,004
8,668
(3,735)
(59,009)
(11,873)
3,959
(19,649)
28,893
25,560
23,905
166,443
(33,601)
132,842
7
2
2
-
4
3
-
-
-
1
-
-
(1)
-
-
-
1
-
1
4
(1)
3
(Continued)
169
Financial Information
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of U.S. Dollars, Except Earnings Per Share)
2020
2019
Amount
%
Amount
%
OTHER COMPREHENSIVE INCOME (LOSS)
Items that may not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit plans
Unrealized gain on financial assets at fair
value through other comprehensive income
Share of the other comprehensive income of
associates accounted for using the equity
method
Items that will be reclassified subsequently to
profit or loss:
Exchange loss on translation of foreign
operations
Gain on cash flow hedges
Share of other comprehensive loss of
associates under the equity method
$
1,274
37,845
93,567
132,686
(12,572)
-
(2,901)
(15,473)
Other comprehensive income for the year
117,213
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR
NET INCOME ATTRIBUTABLE TO:
Owners of WLC
Non-controlling interests
COMPREHENSIVE INCOME ATTRIBUTABLE
TO:
Owners of WLC
Non-controlling interests
EARNINGS PER SHARE (Note 26)
Basic
Diluted
$
$
$
$
$
363,203
234,942
11,048
245,990
355,134
8,069
363,203
$
$
0.07
0.07
-
1
1
2
(2)
-
-
(2)
-
3
2
1
3
3
-
3
-
1
2
3
-
-
-
-
3
9
6
-
6
9
-
9
$
(782)
41,635
61,358
102,211
(62,023)
40
(8,079)
(70,062)
32,149
$
164,991
$
110,592
22,249
$
132,841
$
143,352
21,639
$
164,991
$
$
0.03
0.03
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
(Concluded)
170
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)
Share Capital
Capital Surplus
Legal Reserve
Retained Earnings
Special
Reserve
Unappropriated
Earnings
Exchange
Differences on
Translating
Foreign
Operations
Other Equity
Unrealized Gain
(Loss) on Financial
Assets at Fair Value
through Other
Comprehensive
Income
Equity Attributable to Owners of WLC
Cash Flow
Hedges
Treasury
Shares
Total
Non-controlling
Interests
Total Equity
BALANCE AT JANUARY 1, 2019
$ 33,260,002
$ 15,966,420
$ 3,937,554
$ 2,712,250
$ 25,494,923
$ (3,567,540)
$
(474,446 )
$
(1,151)
$
-
$ 77,328,012
$ 1,936,331
$ 79,264,343
Appropriation of 2018 earnings (Note 22)
Legal reserve
Special reserve
Cash dividends distributed by WLC
Excess of the consideration received over the carrying
amount of the subsidiaries' disposed net assets
Change in capital surplus and retained earnings from
investments in associates under the equity method
Net profit for the year ended December 31, 2019
Other comprehensive income (loss) for the year ended
December 31, 2019, net of income tax
Total comprehensive income (loss) for the year ended
December 31, 2019
Others
Changes in non-controlling interests
-
-
-
-
-
-
-
-
-
-
-
-
-
1,175,678
-
-
-
1,330,888
-
(615 )
89,443
-
-
-
(10 )
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,175,678)
(1,330,888)
(3,991,200)
(123,950)
55,134
3,149,679
-
-
-
-
-
-
-
-
-
-
(55,134 )
-
(54,879)
(1,978,819)
2,965,529
3,094,800
(1,978,819)
2,965,529
-
-
-
-
-
-
BALANCE, DECEMBER 31, 2019
33,260,002
16,055,238
5,113,232
4,043,138
22,023,141
(5,546,359)
2,435,949
Appropriation of 2019 earnings (Note 22)
Legal reserve
Special reserve
Cash dividends distributed by WLC
Excess of the consideration received over the carrying
amount of the subsidiaries' disposed net assets
Change in capital surplus from investments in associates
under the equity method
Net profit for the year ended December 31, 2020
Other comprehensive income (loss) for the year ended
December 31, 2020, net of income tax
Total comprehensive income (loss) for the year ended
December 31, 2020
Buy-back of ordinary shares
Cancelation of treasury shares
Others
Changes in non-controlling interests
-
-
-
-
-
-
-
-
-
-
-
-
-
135,304
-
-
-
-
(1,000,000)
(500,108 )
-
-
(28 )
-
314,968
-
-
-
(932,728 )
-
(314,968)
932,728
(1,663,000)
-
-
-
-
-
-
-
-
-
-
(97,145 )
-
(2,481)
97,145
6,691,149
27,863
(358,776)
3,753,971
6,719,012
(358,776)
3,753,971
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
BALANCE, DECEMBER 31, 2020
$ 32,260,002
$ 15,690,406
$ 5,428,200
$ 3,110,410
$ 27,791,577
$ (5,905,135)
$
6,092,775
$
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
1
7
1
-
-
-
-
-
-
1,151
1,151
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,991,200 )
(124,565 )
89,443
-
-
-
-
-
-
-
(3,991,200)
(124,565)
89,443
3,149,679
633,645
3,783,324
932,982
(17,362)
915,620
4,082,661
616,283
4,698,944
(10 )
-
(10)
-
(1,370,841)
(1,370,841)
77,384,341
1,181,773
78,566,114
-
-
(1,663,000 )
(2,481 )
135,304
-
-
-
-
-
-
-
(1,663,000)
(2,481)
135,304
6,691,149
314,652
7,005,801
3,423,058
(84,849)
3,338,209
-
10,114,207
229,803
10,344,010
(1,500,108 )
(1,500,108 )
-
(28 )
-
-
-
(1,500,108)
-
(28)
-
1,401,019
1,401,019
$ 84,468,235
$ 2,812,595
$ 87,280,830
1,500,108
-
-
-
$
1
7
2
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of U.S. Dollars)
Share Capital
Capital Surplus
Legal Reserve
Special Reserve
Retained Earnings
Equity Attributable to Owners of WLC
Exchange
Differences on
Translating
Foreign
Operations
Unappropriated
Earnings
Other Equity
Unrealized Gain
(Loss) on
Financial Assets
at Fair Value
through Other
Comprehensive
Income
Cash Flow
Hedges
Treasury Shares
Total
Non-controlling
Interests
Total Equity
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
BALANCE AT JANUARY 1, 2019
$ 1,167,837
$
560,619
$
138,257
$
95,233
$
895,187
$
(125,265)
$
(16,659)
$
(40)
$
Appropriation of 2018 earnings (Note 22)
Legal reserve
Special reserve
Cash dividends distributed by WLC
Excess of the consideration received over the
carrying amount of the subsidiaries' disposed
net assets
Change in capital surplus and retained earnings
from investments in associates under the equity
method
Net profit for the year ended December 31, 2019
Other comprehensive income (loss) for the year
ended December 31, 2019, net of income tax
Total comprehensive income (loss) for the year
ended December 31, 2019
Others
Changes in non-controlling interests
-
-
-
-
-
-
-
-
-
-
-
-
-
(22 )
3,140
-
-
-
-
-
41,281
-
-
-
46,731
-
(41,281)
(46,731)
(140,140)
-
-
-
-
-
-
-
-
-
-
(1,936)
-
(4,352)
1,936
110,592
(1,926)
(69,481)
104,127
108,666
(69,481)
104,127
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
BALANCE, DECEMBER 31, 2019
1,167,837
563,737
179,538
141,964
773,285
(194,746)
85,532
Appropriation of 2019 earnings (Note 22)
Legal reserve
Special reserve
Cash dividends distributed by WLC
Excess of the consideration received over the
carrying amount of the subsidiaries' disposed
net assets
Change in capital surplus from investments in
associates under the equity method
Net profit for the year ended December 31, 2020
Other comprehensive income (loss) for the year
ended December 31, 2020, net of income tax
Total comprehensive income (loss) for the year
ended December 31, 2020
Buy-back of ordinary shares
-
-
-
-
-
-
-
-
-
-
-
-
-
4,751
-
-
-
-
Cancelation of treasury shares
(35,112 )
(17,560 )
Others
Changes in non-controlling interests
-
-
(1 )
-
11,059
-
-
-
(32,750)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(11,059)
32,750
(58,392)
(87)
3,411
234,942
-
-
-
-
-
-
-
-
-
-
(3,411)
-
978
(12,597)
131,811
235,920
(12,597)
131,811
-
-
-
-
-
-
-
-
-
-
-
-
BALANCE, DECEMBER 31, 2020
$ 1,132,725
$
550,927
$
190,597
$
109,214
$
975,828
$
(207,343)
$
213,932
$
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
-
-
-
-
-
-
40
40
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$ 2,715,169
$
67,989
$ 2,783,158
-
-
(140,140 )
(4,374 )
3,140
110,592
-
-
-
-
-
22,249
-
-
(140,140)
(4,374)
3,140
132,841
32,760
(610)
32,150
143,352
21,639
164,991
-
-
2,717,147
-
(48,133)
41,495
-
-
(58,392 )
(87 )
4,751
234,942
-
-
-
-
-
11,048
-
(48,133)
2,758,642
-
-
(58,392)
(87)
4,751
245,990
120,192
(2,979)
117,213
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
355,134
8,069
(52,672 )
(52,672 )
363,203
(52,672)
-
(1)
-
-
-
52,672
-
-
-
$
-
(1 )
-
49,193
49,193
$ 2,965,880
$
98,757
$ 3,064,637
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax
Adjustments for:
Depreciation expense
Amortization expense
Expected credit loss (reversed) recognized on trade receivables
Net (gain) loss on fair value change of financial assets and
liabilities designated as at fair value through profit or loss
Interest expense
Interest income
Dividend income
Compensation cost of employees share options
Share of profit of associates under the equity method
Loss (gain) on disposal of property, plant and equipment
Gain on the disposal of investment property
Gain on disposal of other assets
Loss (gain) on disposal of investments
Impairment loss (reversed) recognized on non-financial assets
Gain on lease modification
Unrealized loss on foreign currency exchange
Changes in operating assets and liabilities
Increase in contract assets
Decrease (increase) in notes receivable
Decrease in trade receivables
Decrease (increase) in other receivables
Decrease in inventories
(Increase) decrease in other current assets
Increase in other financial assets
(Increase) decrease in other operating assets
Increase (decrease) in financial liabilities held for trading
Decrease in notes payable
Increase (decrease) in trade payables
Increase in contract liabilities
Increase in other payables
Decrease in net defined benefit liabilities
Increase (decrease) in other current liabilities
(Decrease) increase in other operating liabilities
Cash generated from operations
Interest paid
Interest received
Dividends received from associates
Income tax paid
Net cash generated from operating activities
7,147,930
2020
2019
$
9,250,665
$
4,740,267
2,405,513
35,485
12,209
(732,121)
539,982
(261,523)
(110,990)
8,804
(1,696,319)
7,979
-
-
75,927
(674)
(38)
962
(446,320)
602,201
311,810
467,742
938,706
(2,794,980)
(387,544)
(366,618)
75,283
(107,151)
526,654
981
152,124
(152,315)
532,710
(133,769)
8,755,375
(534,655)
294,277
789,298
(2,156,365)
2,163,455
11,223
(15,124)
106,368
559,596
(268,338)
(136,772)
14,145
(727,962)
(854,514)
(246,877)
(17)
(822,882)
1,680,575
-
23,887
(1,424,808)
(575,022)
3,452,476
(229,770)
1,820,757
130,079
(203,478)
23,252
(1,109,374)
(67,470)
(1,540,007)
518
855,977
(108,789)
(234,597)
466,206
7,482,980
(561,991)
193,009
2,569,560
(1,056,367)
8,627,191
(Continued)
173
Financial Information
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through other
comprehensive income
Purchase of financial assets at fair value through profit or loss
Purchase of financial assets at amortized cost
Disposal of financial assets at amortized cost
Disposal of financial assets for hedging
Acquisition of associates accounted for using the equity method
Net cash flow on disposal of subsidiaries
Payments for property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Payments for intangible assets
Payments for right-of-use assets
Payments for investment properties
Proceeds from disposal of investment properties
Increase in other receivables
2020
2019
$
(507,274) $
(5,353,790)
-
252,140
-
-
2,025,974
(8,816,415)
21,684
(36,228)
(9,327)
(18,989)
(546)
-
(223,150)
(169,868)
-
(6,167)
-
1,151
(280,064)
3,237,032
(5,280,057)
182,590
(1,212)
(3,948)
-
(1,211)
250,420
(273,335)
Net cash used in investing activities
(12,665,921)
(2,344,669)
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in short-term borrowings
Increase in long-term borrowings
Decrease in long-term borrowings
Repayment of the principal portion of lease liabilities
Payments for buy-back of ordinary shares
Dividends paid to owners of WLC
Changes in non-controlling interests
Other financing activities
(5,804,988)
20,640,014
(6,564,196)
(83,862)
(1,500,108)
(1,662,891)
586,927
(28)
2,564,195
10,500,000
(11,564,196)
(74,619)
-
(3,991,018)
(299,831)
(10)
Net cash generated from (used in) financing activities
5,610,868
(2,865,479)
EFFECTS OF EXCHANGE RATE CHANGES ON THE
BALANCE OF CASH HELD IN FOREIGN CURRENCIES
98,525
(1,070,191)
NET INCREASE IN CASH AND CASH EQUIVALENTS
191,402
2,346,852
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF
THE YEAR
11,753,006
9,406,154
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
$
11,944,408
$ 11,753,006
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
(Concluded)
174
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of U.S. Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax
Adjustments for:
Depreciation expense
Amortization expense
Expected credit loss (reversed) recognized on trade receivables
Net (gain) loss on fair value change of financial assets and
liabilities designated as at fair value through profit or loss
Interest expense
Interest income
Dividend income
Compensation cost of employees share options
Share of profit of associates accounted for using the equity
method
Loss (gain) on disposal of property, plant and equipment
Gain on the disposal of investment property
Gain on disposal of other assets
Loss (gain) on disposal of investments
Impairment loss (reversed) recognized on non-financial assets
Gain on lease modification
Unrealized loss on foreign currency exchange
Changes in operating assets and liabilities
Increase in contract assets
Decrease (increase) in notes receivable
Decrease in trade receivables
Decrease (increase) in other receivables
Decrease in inventories
(Increase) decrease in other current assets
Increase in other financial assets
(Increase) decrease in other operating assets
Increase (decrease) in financial liabilities held for trading
Decrease in notes payable
Increase (decrease) in trade payables
Increase in contract liabilities
Increase in other payables
Decrease in net defined benefit liabilities
Increase (decrease) in other current liabilities
(Decrease) increase in other operating liabilities
Cash generated from operations
Interest paid
Interest received
Dividends received from associates
Income tax paid
Net cash generated from operating activities
2020
2019
$
324,813
$ 166,442
84,463
1,246
429
(25,706)
18,960
(9,183)
(3,897)
309
(59,562)
280
-
-
2,666
(24)
(1)
34
(15,671)
21,145
10,948
16,424
32,960
(98,138)
(13,608)
(12,873)
2,643
(3,762)
18,492
34
5,341
(5,348)
18,705
(4,697)
307,422
(18,773)
10,333
27,714
(75,715)
250,981
75,964
394
(531)
3,735
19,649
(9,422)
(4,802)
497
(25,560)
(30,004)
(8,668)
(1)
(28,893)
59,009
-
839
(50,028)
(20,190)
121,225
(8,068)
63,931
4,567
(7,145)
816
(38,953)
(2,369)
(54,073)
18
30,055
(3,820)
(8,237)
16,370
262,747
(19,733)
6,777
90,223
(37,092)
302,922
(Continued)
175
Financial Information
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of U.S. Dollars)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through other
comprehensive income
Purchase of financial assets at fair value through profit or loss
Purchase of financial assets at amortized cost
Disposal of financial assets at amortized cost
Disposal of financial assets for hedging
Acquisition of associates under the equity method
Net cash flow on disposal of subsidiaries
Payments for property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Payments for intangible assets
Payments for right-of-use assets
Payments for investment properties
Proceeds from disposal of investment properties
Increase in other receivables
2020
2019
$
(17,812)
(187,984)
-
8,853
-
-
71,137
(309,565)
761
(1,272)
(327)
(667)
(19)
-
(7,835)
$
(5,964)
-
(217)
-
40
(9,834)
113,660
(185,395)
6,411
(43)
(139)
-
(43)
8,793
(9,597)
Net cash used in investing activities
(444,730)
(82,328)
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in short-term borrowings
Increase in long-term borrowings
Decrease in long-term borrowings
Repayment of the principal portion of lease liabilities
Payments for buy-back of ordinary shares
Dividends paid to owners of WLC
Changes in non-controlling interests
Other financing activities
(203,827)
724,720
(230,484)
(2,945)
(52,672)
(58,388)
20,608
(1)
90,035
368,680
(406,046)
(2,620)
-
(140,134)
(10,528)
-
Net cash generated from (used in) financing activities
197,011
(100,613)
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE
OF CASH HELD IN FOREIGN CURRENCIES
NET INCREASE IN CASH AND CASH EQUIVALENTS
3,458
6,720
(37,577)
82,404
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF
THE YEAR
412,676
330,272
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
$
419,396
$ 412,676
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
(Concluded)
176
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)
1. GENERAL INFORMATION
Walsin Lihwa Corporation (“WLC”) was incorporated in December 1966 and commenced
business in December 1966. WLC made various investments in construction, electronics, material
science, real estate, etc., to diversify its operations. WLC’s main products are wires, cables and
stainless steel.
WLC’s shares have been listed on the Taiwan Stock Exchange (TWSE) since November 1972. In
October 1995 and November 2010, WLC increased its share capital and issued Global Depositary
Receipts (GDR), which were listed on the Luxembourg Stock Exchange under stock number
168527.
The consolidated financial statements are presented in WLC’s functional currency, the New
Taiwan dollar.
2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements of WLC and its subsidiaries (collectively, the “Group”)
were approved by the board of directors of WLC on February 26, 2021.
3. APPLICATION OF NEW AND REVISED STANDARDS, AMENDMENTS AND
INTERPRETATIONS
a. Initial application of the amendments to the International Financial Reporting Standards
(IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC
Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the
Financial Supervisory Commission (FSC)
Except for the following, the initial application of the IFRSs endorsed and issued into effect
by the FSC did not have material impact on the Group’s accounting policies:
1) Amendments to IFRS 3 “Definition of a Business”
The Group applies the amendments to IFRS 3 to transactions that occur on or after
January 1, 2020. The amendments clarify that to be considered a business, an acquired set
of activities and assets must include, at a minimum, an input and a substantive process that
together significantly contribute to the ability to create outputs. To determine whether an
acquired process is substantive, there will be different judgement requirements depending
on whether there are outputs at the acquisition date. In addition, the amendments introduce
an optional concentration test that permits a simplified assessment of whether or not an
acquired set of activities and assets is a business.
177
Financial Information
2) Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate Benchmark Reform”
Upon retrospective application of the amendments, the Group complied with the hedge
accounting requirements under the assumption that the interest rate benchmark (such as
the London Interbank Offered Rate or LIBOR) on which the hedged cash flows and cash
flows from the hedging instrument are based will not be altered as a result of interest rate
benchmark reform.
3) Amendments to IAS 1 and IAS 8 “Definition of Material”
The Group adopted the amendments starting from January 1, 2020. The threshold of
materiality that could influence users has been changed to “could reasonably be expected
to influence”. Accordingly, disclosures in the consolidated financial statements do not
include immaterial information that may obscure material information has been deleted.
4) Amendment to IFRS 16 “Covid-19-Related Rent Concessions”
The Group elected to apply the practical expedient provided in the amendment to IFRS 16
with respect to rent concessions negotiated with the lessor as a direct consequence of the
COVID-19. The related accounting policies are stated in Note 4. Prior to the application of
the amendment, the Group was required to determine whether the abovementioned rent
concessions are lease modifications and thus have to be accounted for as lease
modifications.
The Group applied the amendment from January 1, 2020. Retrospective application of the
amendment has no impact on the retained earnings as of January 1, 2020.
b. The IFRSs endorsed by the FSC for application starting from 2021
New IFRSs
Effective Date
Announced by IASB
Amendments to IFRS 4 “Extension of the Temporary
Exemption from Applying IFRS 9”
Effective immediately upon
promulgation by the IASB
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS
January 1, 2021
16 “Interest Rate Benchmark Reform - Phase 2”
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark
Reform - Phase 2”
“Interest Rate Benchmark Reform - Phase 2” primarily amends IFRS 9, IFRS 7 and IFRS
16 to provide practical relief from the impact of the interest rate benchmark reform.
Changes in the basis for determining contractual cash flows as a result of
interest rate benchmark reform
The changes in the basis for determining contractual cash flows of financial assets,
financial liabilities or lease liabilities are accounted for by updating the effective interest
rate at the time the basis is changed, provided the changes are necessary as a direct
consequence of the reform and the new basis is economically equivalent to the previous
basis.
178
Hedge accounting
The amendments provide the following temporary exceptions to hedging relationships that
are subject to the reform:
1) The changes to the hedging relationship that are needed to reflect changes required by
the reform are treated as a continuation of the existing hedging relationship, and do
not result in the discontinuation of hedge accounting or the designation of a new
hedging relationship.
2) If an entity reasonably expects that an alternative benchmark rate will be separately
identifiable within a period of 24 months, it is not prohibited from designating the rate
as a non-contractually specified risk component if it is not separately identifiable at
the designation date.
3) After a cash flow hedging relationship is amended, the amount accumulated in the
gain/(loss) on hedging instruments of cash flow hedge is deemed to be based on the
alternative benchmark rate on which the hedged future cash flows are determined.
4) An entity should allocate the hedged items of a group hedge that is subject to the
reform to subgroups based on whether the hedged items have been changed to
reference an alternative benchmark rate, and should designate the hedged benchmark
rate separately.
c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC
New IFRSs
Effective Date
Announced by IASB (Note 1)
“Annual Improvements to IFRS Standards 2018-2020”
Amendments to IFRS 3 “Reference to the Conceptual
January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
Framework”
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”
To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
Amendments to IAS 1 “Disclosure of Accounting Policies”
January 1, 2023 (Note 6)
Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023 (Note 7)
January 1, 2022 (Note 4)
Amendments to IAS 16 “Property, Plant and Equipment -
Proceeds before Intended Use”
Amendments to IAS 37 “Onerous Contracts - Cost of
January 1, 2022 (Note 5)
Fulfilling a Contract”
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: The amendments to IFRS 9 will be applied prospectively to modifications and
exchanges of financial liabilities that occur on or after the annual reporting periods
beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture”
will be applied prospectively to the fair value measurements on or after the annual
179
Financial Information
reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1
“First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting
periods beginning on or after January 1, 2022.
Note 3: The amendments are applicable to business combinations for which the acquisition
date is on or after the beginning of the annual reporting period beginning on or after
January 1, 2022.
Note 4: 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 5: The amendments are applicable to contracts for which the entity has not yet fulfilled
all its obligations on January 1, 2022.
Note 6: The amendments will be applied prospectively for annual reporting periods
beginning on or after January 1, 2023.
Note 7: The amendments are applicable to changes in accounting estimates and changes in
accounting policies that occur on or after the beginning of the annual reporting
period beginning on or after January 1, 2023.
1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture”
The amendments stipulate that, when the Group sells or contributes assets that constitute a
business (as defined in IFRS 3) to an associate, the gain or loss resulting from the
transaction is recognized in full. Also, when the Group loses control of a subsidiary that
contains a business but retains significant influence, the gain or loss resulting from the
transaction is recognized in full.
Conversely, when the Group sells or contributes assets that do not constitute a business to
an associate, the gain or loss resulting from the transaction is recognized only to the extent
of the Group’s interest as an unrelated investor in the associate, i.e., the Group’s share of
the gain or loss is eliminated. Also, when the Group loses control of a subsidiary that does
not contain a business but retains significant influence over an associate, the gain or loss
resulting from the transaction is recognized only to the extent of the Group’s interest as an
unrelated investor in the associate, i.e., the Group’s share of the gain or loss is eliminated.
2) Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
The amendments clarify that for a liability to be classified as non-current, the Group shall
assess whether it has the right at the end of the reporting period to defer settlement of the
liability for at least twelve months after the reporting period. If such rights are in existence
at the end of the reporting period, the liability is classified as non-current regardless of
whether the Group will exercise that right. The amendments also clarify that, if the right to
defer settlement is subject to compliance with specified conditions, the Group must
comply with those conditions at the end of the reporting period even if the lender does not
test compliance until a later date.
The amendments stipulate
the
aforementioned settlement refers to a transfer of cash, other economic resources or the
Group’s own equity instruments to the counterparty that results in the extinguishment of
liability classification,
the purpose of
that, for
180
the liability. However, if the terms of a liability that could, at the option of the
counterparty, result in its settlement by a transfer of the Group’s own equity instruments,
and if such option is recognized separately as equity in accordance with IAS 32 “Financial
Instruments: Presentation”, the aforementioned terms would not affect the classification of
the liability.
3) Annual Improvements to IFRS Standards 2018-2020
Several standards, including IFRS 9 “Financial Instruments”, were amended in the annual
improvements. IFRS 9 requires the comparison of the discounted present value of the cash
flows under the new terms, including any fees paid net of any fees received, with that of
the cash flows under the original financial liability when there is an exchange or
modification of debt instruments. The new terms and the original terms are substantially
different if the difference between those discounted present values is at least 10%. The
amendments to IFRS 9 clarify that the only fees that should be included in the above
assessment are those fees paid or received between the borrower and the lender.
4) Amendments to IFRS 3 “'Reference to the Conceptual Framework”
The amendments replace the references to the Conceptual Framework of IFRS 3 and
specify that the acquirer shall apply IFRIC 21 “Levies” to determine whether the event
that gives rise to a liability for a levy has occurred at the acquisition date.
5) Amendments to IAS 16 “Property, Plant and Equipment: Proceeds before Intended Use”
The amendments prohibit an entity from deducting from the cost of an item of property,
plant and equipment any proceeds from selling items produced while bringing that asset to
the location and condition necessary for it to be capable of operating in the manner
intended by management. The cost of those items is measured in accordance with IAS 2
“Inventories”. Any proceeds from selling those items and the cost of those items are
recognized in profit or loss in accordance with applicable standards.
The amendments are applicable only to items of 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. The Group will restate its
comparative information when it initially applies the aforementioned amendments.
6) Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”
The amendments specify that when assessing whether a contract is onerous, the “cost of
fulfilling a contract” includes both the incremental costs of fulfilling that contract (for
example, direct labor and materials) and an allocation of other costs that relate directly to
fulfilling contracts (for example, an allocation of depreciation for an item of property,
plant and equipment used in fulfilling the contract).
The Group will recognize the cumulative effect of the initial application of the
amendments in the retained earnings at the date of the initial application.
7) Amendments to IAS 1 “Disclosure of Accounting Policies”
The amendments specify that the Group should refer to the definition of material to
determine its material accounting policy information to be disclosed. Accounting policy
information is material if it can reasonably be expected to influence decisions that the
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primary users of general purpose financial statements make on the basis of those financial
statements. The amendments also clarify that:
Accounting policy information that relates to immaterial transactions, other events or
conditions is immaterial and need not be disclosed;
The Group may consider the accounting policy information as material because of the
nature of the related transactions, other events or conditions, even if the amounts are
immaterial; and
Not all accounting policy information relating to material transactions, other events or
conditions is itself material.
The amendments also illustrate that accounting policy information is likely to be
considered as material to the financial statements if that information relates to material
transactions, other events or conditions and:
a) The Group changed its accounting policy during the reporting period and this change
resulted in a material change to the information in the financial statements;
b) The Group chose the accounting policy from options permitted by the standards;
c) The accounting policy was developed in accordance with IAS 8 “Accounting Policies,
Changes in Accounting Estimates and Errors” in the absence of an IFRS that
specifically applies;
d) The accounting policy relates to an area for which the Group is required to make
significant judgements or assumptions in applying an accounting policy, and the
Group discloses those judgements or assumptions; or
e) The accounting is complex and users of the financial statements would otherwise not
understand those material transactions, other events or conditions.
8) Amendments to IAS 8 “Definition of Accounting Estimates”
The amendments define that accounting estimates are monetary amounts in financial
statements that are subject to measurement uncertainty. In applying accounting policies,
the Group may be required to measure items at monetary amounts that cannot be observed
directly and must instead be estimated. In such a case, the Group uses measurement
techniques and inputs to develop accounting estimates to achieve the objective. The
effects on an accounting estimate of a change in a measurement technique or a change in
an input are changes in accounting estimates unless they result from the correction of prior
period errors.
Except for the above impact, as of the date the consolidated financial statements were
authorized for issue, the Group is continuously assessing the possible impact that the
application of other standards and interpretations will have on the Group’s financial position
and financial performance and will disclose the relevant impact when the assessment is
completed.
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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Statement of compliance
The consolidated financial statements have been prepared in accordance with the Regulations
Governing the Preparation of Financial Reports by Securities Issuers, other regulations and
IFRSs as endorsed and issued into effect by FSC.
b. Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis except
for financial instruments that are measured at fair values. Historical cost is generally based on
the fair value of the consideration given in exchange for assets.
The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the
fair value measurement inputs are observable and the significance of the inputs to the fair
value measurement in its entirety, which are described as follows:
1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices); and
3) Level 3 inputs are unobservable inputs for the asset or liability.
c. Classification of current and non-current assets and liabilities
Current assets include:
Assets held primarily for the purpose of trading;
Assets expected to be realized within 12 months after the reporting period; and
Cash and cash equivalents unless the asset is restricted from being exchanged or used to
settle a liability for at least 12 months after the reporting period.
Current liabilities include:
Liabilities held primarily for the purpose of trading;
Liabilities due to be settled within 12 months after the reporting period and
Liabilities for which WLC does not have an unconditional right to defer settlement for at
least 12 months after the reporting period. Terms of a liability that could, at the option of
the counterparty, result in its settlement by the issue of equity instruments do not affect its
classification.
Assets and liabilities that are not classified as current are classified as non-current.
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d. Basis of consolidation
Principle of preparation of the consolidated financial statements
The consolidated financial statements incorporate the financial statements of WLC and the
entities controlled by WLC. Control is achieved when the Group has the power to govern
the financial and operating policies of an entity so as to obtain benefits from its activities.
Income and expenses of subsidiaries acquired or disposed of during the period are
included in the consolidated statement of profit or loss and other comprehensive income
from the effective date of acquisition up to the effective date of disposal, as appropriate.
When necessary, adjustments are made to the financial statements of subsidiaries to bring
their accounting policies into line with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated in full upon
consolidation.
Total comprehensive income of subsidiaries is attributed to the owners of the Group and
to the non-controlling interests even if this results in the non-controlling interests having a
deficit balance.
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group
losing control over the subsidiaries are accounted for as equity transactions. The carrying
amounts of the Group’s interests and the non-controlling interests are adjusted to reflect
the changes in their relative interests in the subsidiaries. Any difference between the
amount by which the non-controlling interests are adjusted and the fair value of the
consideration paid or received is recognized directly in equity and attributed to the owners
of the Group.
When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss
and is calculated as the difference between (i) the aggregate of the fair value of the
consideration received and any investment retained in the former subsidiary at its fair
value at the date when control is lost and (ii) the assets (including any goodwill) and
liabilities and any non-controlling interests of the former subsidiary at their carrying
amounts at the date when control is lost. The Group accounts for all amounts recognized
in other comprehensive income in relation to that subsidiary on the same basis as would
be required if the Group had directly disposed of the related assets or liabilities.
Refer to Note 15 and Table 8 for the percent of ownership, main businesses and details of
the subsidiaries.
e. Foreign currencies
In preparing the financial statements of each individual company entity, transactions in
currencies other than the entity’s functional currency are recognized at the rates of exchange
prevailing at the dates of the transactions.
Non-monetary items measured at fair value that are denominated in foreign currencies are
retranslated at the rates prevailing at the date when the fair value was determined. Exchange
differences arising on the retranslation of non-monetary items are included in profit or loss for
the period except for exchange differences arising from the retranslation of non-monetary
items in respect of which gains and losses are recognized directly in other comprehensive
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income, in which case, the exchange differences are also recognized directly in other
comprehensive income.
Non-monetary items that are measured at historical cost in a foreign currency are not
retranslated.
For the purposes of presenting consolidated financial statements, the assets and liabilities of
the Group’s foreign operations (including of the subsidiaries and associates in other countries
with currencies used different from the Group) 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 are
recognized in other comprehensive income (attributed to the owners of the Group and
non-controlling interests as appropriate).
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign
operation, or a disposal involving loss of control over a subsidiary that includes a foreign
operation, or a disposal involving loss of significant influence over an associate that includes a
foreign operation), all of the exchange differences accumulated in equity in respect of that
operation attributable to the owners of the Group are reclassified to profit or loss.
In relation to a partial disposal of a subsidiary that does not result in the Group losing control
over the subsidiary, the proportionate share of accumulated exchange differences are
re-attributed to non-controlling interests of the subsidiary and are not recognized in profit or
loss. For all other partial disposals, the proportionate share of the accumulated exchange
differences recognized in other comprehensive income is reclassified to profit or loss.
f.
Inventories
Inventories consist of raw materials, supplies, finished goods and work-in-process and are
stated at the lower of cost or net realizable value. Inventory write-downs are made by item,
except where it may be appropriate to Group similar or related items. Net realizable value is
the estimated selling price of inventories less all estimated costs of completion and costs
necessary to make the sale. Inventories are recorded at weighted-average cost on the balance
sheet date.
Inventories include real estate and constructions-in-progress, which are stated at acquisition
costs plus construction costs incurred. Interest expenses on constructions-in-progress are
capitalized.
g. Investment in associates
An associate is an entity over which the Group has significant influence and that is neither a
subsidiary nor an interest in a joint venture.
The results and assets and liabilities of associates are incorporated in these consolidated
financial statements using the equity method of accounting. Under the equity method, an
investment in an associate is initially recognized at cost and adjusted thereafter to recognize
the Group’s share of the profit or loss and other comprehensive income of the associate. The
Group also recognizes the changes in the Group’s share of equity of associates.
Any excess of the cost of acquisition over the Group’s share of the net fair value of the
identifiable assets and liabilities of an associate recognized at the date of acquisition is
recognized as goodwill, which is included within the carrying amount of the investment and is
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not amortized. Any excess of the Group’s share of the net fair value of the identifiable assets
and liabilities over the cost of acquisition, after reassessment, is recognized immediately in
profit or loss.
When the Group subscribes for additional new shares of the associate, at a percentage
different from its existing ownership percentage, the resulting carrying amount of the
investment differs from the amount of the Group’s proportionate interest in the associate. The
Group records such a difference as an adjustment to investments with the corresponding
amount charged or credited to capital surplus - changes in the Group’s share of equity of
associates. If the Group’s ownership interest is reduced due to the additional subscription of
the new shares of associate, the proportionate amount of the gains or losses previously
recognized in other comprehensive income in relation to that associate is reclassified to profit
or loss on the same basis as would be required if the investee had directly disposed of the
related assets or liabilities. When the adjustment should be debited to capital surplus, but the
capital surplus recognized from investments accounted for by the equity method is
insufficient, the shortage is debited to retained earnings.
When the Group’s share of losses of an associate equals or exceeds its interest in that
associate, the Group discontinues recognizing its share of further losses. Additional losses and
liabilities are recognized only to the extent that the Group has incurred legal obligations, or
constructive obligations, or made payments on behalf of that associate.
The entire carrying amount of the investment (including goodwill) is tested for impairment as
a single asset by comparing its recoverable amount with its carrying amount. Any impairment
loss recognized is deducted from investment and carrying amount of investment is net of
impairment loss. Any reversal of that impairment loss is recognized to the extent that the
recoverable amount of the investment subsequently increases.
The Group discontinues the use of the equity method from the date on which it ceases to have
significant influence over the associate. Any retained investment is measured at fair value at
that date and the fair value is regarded as its fair value on initial recognition as a financial
asset. The difference between the previous carrying amount of the associate attributable to the
retained interest and its fair value is included in the determination of the gain or loss on
disposal of the associate. The Group accounts for all amounts previously recognized in other
comprehensive income in relation to that associate on the same basis as would be required if
that associate had directly disposed of the related assets or liabilities.
When the Group entity transacts with its associate, profits and losses resulting from the
transactions with the associate are recognized in the Group’s consolidated financial statements
only to the extent of interests in the associate that are not related to the Group.
h. Property, plant and equipment
Property, plant and equipment are stated at cost, less subsequent accumulated depreciation and
subsequent accumulated impairment loss.
Property, plant and equipment in the course of construction for production, supply or
administrative purposes are measured at cost, less any recognized impairment loss. Cost
includes professional fees and borrowing costs eligible for capitalization. Such properties are
depreciated and classified to the appropriate categories of property, plant and equipment when
completed and ready for intended use.
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Depreciation on property, plant and equipment is recognized using the straight-line method.
Each significant part is depreciated separately. The estimated useful lives, residual values and
depreciation method are reviewed at the end of each reporting period, with the effect of any
changes in estimate accounted for on a prospective basis.
On derecognition of an item of property, plant and equipment, the difference between the
sales proceeds and the carrying amount of the asset is recognized in profit or loss.
i.
Investment properties
Investment properties are properties held to earn rentals and/or for capital appreciation
(including property under construction for such purposes). Investment properties also include
land held for a currently undetermined future use.
Investment properties are measured initially at cost, including transaction costs. Subsequent to
initial recognition, investment properties are measured at cost less accumulated depreciation
and accumulated impairment loss. Depreciation is recognized using the straight-line method.
For a transfer from the investment properties classification to property, plant and equipment,
the deemed cost of the property for subsequent accounting is its carrying amount at the
commencement of owner-occupation.
For a transfer from the property, plant and equipment classification to investment properties,
the deemed cost of the property for subsequent accounting is its carrying amount at the end of
owner-occupation.
On derecognition of an investment property, the difference between the net disposal proceeds
and the carrying amount of the asset and is included in profit or loss.
j.
Intangible assets
Intangible assets are measured initially at cost and subsequently measured at cost less
accumulated amortization and accumulated impairment loss. Amortization is recognized on a
straight-line basis. The estimated useful life, residual value, and amortization method are
reviewed at the end of each reporting period, with the effect of any changes in estimate
accounted for on a prospective basis. Intangible assets with indefinite useful lives that are
acquired separately are measured at cost less accumulated impairment loss.
On derecognition of an intangible asset, the difference between the net disposal proceeds and
the carrying amount of the asset, are recognized in profit or loss.
k. Impairment of property, plant and equipment, right-of-use asset, intangible assets other than
goodwill and assets related to contract costs
At the end of each reporting period, the Group reviews the carrying amounts of its impairment
of property, plant and equipment, right-of-use asset, intangible assets other than goodwill and
assets related to contract costs, to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the extent of the impairment loss. When it is not
possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets
are allocated to the individual cash-generating units on a reasonable and consistent basis of
allocation.
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Intangible assets with indefinite useful lives and intangible assets not yet available for use are
tested for impairment at least annually and whenever there is an indication that the assets may
be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. If the
recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying
amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable
amount.
When an impairment loss subsequently is reversed, the carrying amount of the asset or
cash-generating unit is increased to the revised estimate of its recoverable amount, but only to
the extent of the carrying amount that would have been determined had no impairment loss
been recognized for the asset or cash-generating unit in prior years. A reversal of an
impairment loss is recognized immediately in profit or loss.
l. Financial instruments
Financial assets and financial liabilities are recognized when a company entity becomes a
party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial liabilities at fair value through profit or
loss) are added to or deducted from the fair value of the financial assets or financial liabilities,
as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition
of financial assets or financial liabilities at fair value through profit or loss are recognized
immediately in profit or loss.
Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a
trade date basis.
1) Measurement category
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 assets at FVTPL
Financial assets are classified as at FVTPL when such a financial asset is mandatorily
classified or 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. Fair value is determined in the manner described in Note
30.
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b) Financial assets at amortized cost
Financial assets that meet the following conditions are subsequently measured at
amortized cost:
i. The financial asset is held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows
ii. The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding
Subsequent to initial recognition, financial assets at amortized cost, including cash and
cash equivalents, trade receivables at amortized cost are measured at amortized cost,
which equals the gross carrying amount determined using the effective interest method
less any impairment loss. Exchange differences are recognized in profit or loss.
Interest income is calculated by applying the effective interest rate to the gross
carrying amount of such a financial asset, except for:
i. Purchased or originated credit-impaired financial assets, for which interest income
is calculated by applying the credit-adjusted effective interest rate to the amortized
cost of such financial assets; and
ii. Financial assets that are not credit-impaired on purchase or origination but have
subsequently become credit-impaired, for which interest income is calculated by
applying the effective interest rate to the amortized cost of such financial assets in
subsequent reporting periods.
Cash equivalents include time deposits with original maturities within 3 months from
the date of acquisition or time deposits with original maturities within 3-12 months
from the date of acquisition and the interest paid to deposits which are terminated
before maturity are higher than demand deposits, which are highly liquid, readily
convertible to a known amount of cash and are subject to an insignificant risk of
changes in value. These cash equivalents are held for the purpose of meeting
short-term cash commitments.
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 as 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 are recognized in profit or loss
when the Group’s right to receive the dividends is established, unless the dividends
clearly represent a recovery of part of the cost of the investment.
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Financial Information
2) Impairment of financial assets
The Group recognizes a loss allowance for expected credit losses on financial assets at
amortized cost (including trade receivables), investments in debt instruments that are
measured at FVTOCI, operating/finance lease receivables, as well as contract assets.
The Group always recognizes lifetime Expected Credit Losses (ECLs) for trade
receivables and operating/finance lease receivables. For all other financial instruments, the
Group recognizes lifetime ECLs 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 equal to 12-month ECLs.
Expected credit losses reflect the weighted average of credit losses with the respective
risks of default occurring as the weights. Lifetime ECLs represents the expected credit
losses that will result from all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECLs represents the portion of lifetime ECLs that is
expected to result from default events on a financial instrument that are possible within 12
months after the reporting date.
For internal credit risk management purposes, the Group considers the following
situations as indication that a financial asset is in default (without taking into account any
collateral held by the Group):
a) Internal or external information shows that the debtor is unlikely to pay its creditors.
b) Financial asset is more than 90 days past due unless the Group has reasonable and
corroborative information to support a more lagged default criterion.
The impairment loss of all financial assets is recognized in profit or loss by a reduction in
their carrying amounts through a loss allowance account, except for investments in debt
instruments that are measured at FVTOCI, for which the loss allowance is recognized in
other comprehensive income and the carrying amounts of such financial assets are not
reduced.
3) Derecognition of financial assets
The Group derecognizes a financial asset only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and substantially all the
risks and rewards of ownership of the asset to another party.
On derecognition of a financial asset at amortized cost in its entirety, the difference
between the asset’s carrying amount and the sum of the consideration received and
receivable is recognized in profit or loss. The cumulative gain or loss which had been
recognized in other comprehensive income is transferred directly to retained earnings,
without recycling through profit or loss.
Equity instruments
Equity instruments issued by the Group are recognized at the proceeds received, net of direct
issue costs.
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Repurchase of WLC’s own equity instruments is recognized in and deducted directly from
equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or
cancellation of WLC’s own equity instruments.
Financial liabilities
1) Subsequent measurement
Except the following situation, all the financial liabilities are measured at amortized cost
using the effective interest method:
a) Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liabilities are either
held for trading or are designated as at FVTPL.
Financial liabilities held for trading are stated at fair value, with any gain or loss
arising on remeasurement recognized in profit or loss. Fair value is determined in the
manner described in Note 30.
b) Financial guarantee contracts
Financial guarantee contracts issued by the Group, if not designated as at FVTPL, are
subsequently measured at the higher of:
i. The amount of the loss allowance reflecting expected credit losses; and
ii. The amount initially recognized less, where appropriate, the cumulative amount of
income recognized in accordance with the revenue recognition policies.
2) Derecognition of financial liabilities
The difference between the carrying amount of the financial liability derecognized and the
consideration paid, including any non-cash assets transferred or liabilities assumed, is
recognized in profit or loss.
Derivative financial instruments
The Group enters into a variety of derivative financial instruments to manage its exposure to
interest rate and foreign exchange rate risks, including foreign exchange forward contracts,
interest rate swaps and cross currency swaps.
Derivatives are initially recognized at fair value at the date on which the derivative contracts
are entered into and are subsequently remeasured to their fair value at the end of each
reporting period. The resulting gain or loss is recognized in profit or loss immediately unless
the derivative is designated and effective as a hedging instrument; in which event, the timing
of the recognition in profit or loss depends on the nature of the hedging relationship. When the
fair value of a derivative financial instrument is positive, the derivative is recognized as a
financial asset; when the fair value of a derivative financial instrument is negative, the
derivative is recognized as a financial liability.
Derivatives embedded in hybrid contracts that contain financial asset hosts that is within the
scope of IFRS 9 are not separated; instead, the classification is determined in accordance with
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Financial Information
the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not
financial assets that is within the scope of IFRS 9 (e.g. financial liabilities) are treated as
separate derivatives when they meet the definition of a derivative; their risks and
characteristics are not closely related to those of the host contracts; and the host contracts are
not measured at FVTPL.
m. Hedge accounting
The Group designates certain hedging instruments, which include derivatives, embedded
derivatives and non-derivatives in respect of foreign currency risk, as either fair value hedges
or cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for
as cash flow hedges.
1) Fair value hedges
Gain or losses on derivatives that are designated and qualify as fair value hedges are
recognized in profit or loss immediately, together with any changes in the fair value of the
hedged asset or liability that are attributable to the hedged risk. The change in the fair
value of the hedging instrument and the change in the hedged item attributable to the
hedged risk are recognized in profit or loss in the line item relating to the hedged item.
The Group discontinues hedge accounting only when the hedging relationship ceases to
meet the qualifying criteria; for instance, when the hedging instrument expires or is sold,
terminated or exercised.
2) Cash flow hedges
The effective portion of gains or losses on derivatives that are designated and qualify as
cash flow hedges is recognized in other comprehensive income. The gain or loss relating
to the ineffective portion is recognized immediately in profit or loss.
The associated gains or losses that were recognized in other comprehensive income are
reclassified from equity to profit or loss as a reclassification adjustment in the line item
relating to the hedged item in the same period when the hedged item affects profit or loss.
If a hedge of a forecast transaction subsequently results in the recognition of a
non-financial asset or a non-financial liability, the associated gains and losses that were
recognized in other comprehensive income are removed from equity and included in the
initial cost of the non-financial asset or non-financial liability.
The Group discontinues hedge accounting only when the hedging relationship ceases to
meet the qualifying criteria; for instance, when the hedging instrument expires or is sold,
terminated or exercised. The cumulative gain or loss on the hedging instrument that has
been previously recognized in other comprehensive income from the period when the
hedge was effective remains separately in equity until the forecast transaction occurs.
When a forecast transaction is no longer expected to occur, the gain or loss accumulated in
equity is recognized immediately in profit or loss.
n. Levies
Levies imposed by a government are accrued as other liabilities when the transactions or
activities that trigger the payment of such levies occur. If the obligating event occurs over a
period of time, the liability is recognized progressively. If an obligation to pay a levy is
triggered upon reaching a minimum threshold, the liability is recognized when that minimum
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threshold is reached.
o. Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that the Group will be required to settle the obligation, and
a reliable estimate can be made of the amount of the obligation.
p. Revenue recognition
The Group identifies contracts with the customers, allocates the transaction price to the
performance obligations and recognizes revenue when performance obligations are satisfied.
1) Revenue from the sale of goods and real estate
Revenue from the sale of goods and real estate comes from sales of wires, cables, stainless
steel and real estate. Sales of wires, cables and stainless steel are recognized as revenue
when the customer has full discretion over the manner of distribution and the price to sell
the goods, has the primary responsibility for sales to future customers and bears the risks
of obsolescence.
The Group does not recognize revenue on materials delivered to subcontractors because
this delivery does not involve a transfer of control.
Regarding contracts relating to the sale of real estate in the course of ordinary activities, a
fixed transaction price is received in instalments and recognized as a contract liability. The
transaction price, after adjusting for the effect of the significant financing component, is
recognized as revenue when the construction is completed and the real estate is transferred
to the buyer.
2) Revenue from the rendering of services
Service income is recognized when services are rendered. Revenue should be recognized
over time by measuring the progress toward complete satisfaction of the performance
obligation. Payment for installation services is not due from the customer until the
installation services are complete, and therefore, a contract asset is recognized over the
period in which the installation services are performed. The contract asset is reclassified to
trade receivables when installation is complete.
3) Construction contract revenue
A contract asset is recognized during construction and is reclassified to trade receivables
at the point at which it is invoiced to the customer. If the milestone payment exceeds the
revenue recognized to date, then the Group recognizes a contract liability for the
difference. Certain payments retained by the customer as specified in the contract are
intended to ensure that the Group adequately completes all of its contractual obligations.
Such retention receivables are recognized as contract assets until the Group satisfies its
performance obligation.
When it is not able to reasonably measure the Group’s progress toward satisfaction of the
performance obligation but expects to recover costs, the Group recognizes revenue only to
the extent of costs incurred.
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Financial Information
q. Leases
At the inception of a contract, the Group assesses whether the contract is, or contains, a
lease.
a) 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.
Under finance leases, the lease payments comprise fixed payments and variable lease
payments which depend on an index or a rate. The net investment in a lease is
measured at (a) the present value of the sum of the lease payments receivable by a
lessor and any unguaranteed residual value accrued to the lessor plus (b) initial direct
costs and is presented as a finance lease receivable. Finance lease income is allocated
to the relevant accounting periods so as to reflect a constant, periodic rate of return on
the Group’s net investment outstanding in respect of 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.
b) The Group as lessee
The Group recognizes right-of-use assets and lease liabilities for all leases at the
commencement date of a lease, except for short-term leases and low-value asset leases
accounted for applying a recognition exemption where lease payments are recognized
as expenses on a straight-line basis over the lease terms.
Right-of-use assets are initially measured at cost, which comprises the initial
measurement of lease liabilities adjusted for lease payments made at or before the
commencement date, plus any initial direct costs incurred and an estimate of costs
needed to restore the underlying assets, and less any lease incentives received.
Right-of-use assets are subsequently measured at cost less accumulated depreciation
and impairment losses and adjusted for any remeasurement of the lease liabilities.
Right-of-use assets are depreciated using the straight-line method from the
commencement dates to the earlier of the end of the useful lives of the right-of-use
assets or the end of the lease terms.
Lease liabilities are initially measured at the present value of the lease payments,
which comprise fixed payments, in-substance fixed payments, variable lease payments
which depend on an index or a rate, residual value guarantees, the exercise price of a
purchase option if the Group is reasonably certain to exercise that option, and
payments of penalties for terminating a lease if the lease term reflects such
termination, less any lease incentives receivable. The lease payments are discounted
using the interest rate implicit in a lease, if that rate can be readily determined. If that
rate cannot be readily determined, the Group uses the lessee’s incremental borrowing
rate.
194
Subsequently, lease liabilities are measured at amortized cost using the effective
interest method, with interest expense recognized over the lease terms. When there is a
change in a lease term, a change in the amounts expected to be payable under a
residual value guarantee, a change in the assessment of an option to purchase an
underlying asset, or a change in future lease payments resulting from a change in an
index or a rate used to determine those payments, the Group remeasures the lease
liabilities with a corresponding adjustment to the right-of-use-assets. However, if the
carrying amount of the right-of-use assets is reduced to zero, any remaining amount of
the remeasurement is recognized in profit or loss. Lease liabilities are presented on a
separate line in the consolidated balance sheets.
Variable lease payments that do not depend on an index or a rate are recognized as
expenses in the periods in which they are incurred.
r. Government grants
Government grants are not recognized until there is reasonable assurance that the Group will
comply with the conditions attached to them and that the grants will be received.
Government grants are recognized in profit or loss on a systematic basis over the periods in
which the Group recognizes as expenses the related costs that the grants intend to compensate.
Government grants that are receivable as compensation for expenses or losses already
incurred or for the purpose of giving immediate financial support to the Group with no future
related costs are recognized in profit or loss in the period in which they are received.
The benefit of a government loan received at a below-market rate of interest is treated as a
government grant measured as the difference between the proceeds received and the fair value
of the loan based on prevailing market interest rates.
s. Employee benefits
1) Short-term employee benefits
Liabilities recognized in respect of short-term employee benefits are measured at the
undiscounted amount of the benefits expected to be paid in exchange for the related
service.
2) Retirement benefits
Payments to defined contribution retirement benefit plans are recognized as an expense
when employees have rendered service entitling them to the contributions.
Defined benefit costs (including service cost, net interest and remeasurement) under the
defined benefit retirement benefit plans are determined using the projected unit credit
method. Service cost (including current service cost) and net interest on the net defined
benefit liability (asset) are recognized as employee benefits expense in the period they
occur. Remeasurement, comprising actuarial gains and losses, and the return on plan
assets (excluding interest), are recognized in other comprehensive income in the period in
which they occur. Remeasurement recognized in other comprehensive income is reflected
immediately in retained earnings and will not be reclassified to profit or loss.
195
Financial Information
Net defined benefit liability (asset) represents the actual deficit (surplus) in the Group’s
defined benefit plan. Any surplus resulting from this calculation is limited to the present
value of any refunds from the plans or reductions in future contributions to the plans.
Pension cost for an interim period is calculated on a year-to-date basis by using the
actuarially determined pension cost rate at the end of the prior financial year, adjusted for
significant market fluctuations since that time and for significant plan amendments,
settlements, or other significant one-off events.
t. Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
1) Current tax
According to the Income Tax Law in the ROC, an additional tax on unappropriated
earnings is provided for as income tax in the year the shareholders approve to retain
earnings.
Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s
tax provision.
2) Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of
assets and liabilities in the consolidated financial statements and the corresponding tax
bases used in the computation of taxable profit. Deferred tax liabilities are generally
recognized for all taxable temporary differences. Deferred tax assets are generally
recognized for all (deductible temporary differences and unused loss carry forward) to the
extent that it is probable that taxable profits will be available against which those
deductible temporary differences can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where the
Group is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising
from deductible temporary differences associated with such investments and interests are
only recognized to the extent that it is probable that there will be sufficient taxable profits
against which to utilize the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period
and reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered. A previously unrecognized
deferred tax asset is also reviewed at the end of each reporting period and recognized to
the to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply
in the period in which the liability is settled or the asset realized, based on tax rates (and
tax laws) that have been enacted or substantively enacted by the end of the reporting
period. The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Group expects, at the end
196
of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
u. Translation into U.S. dollar
The financial statements are stated in New Taiwan dollars. The translation of New Taiwan
dollar amounts into U.S. dollar amounts for 2020 and 2019 is included solely for the
convenience of readers, using the average exchange rate of NT$28.48 to US$1.00 quoted by
the Bank of Taiwan on December 31, 2020. The convenience translation should not be
construed as representations that the New Taiwan dollar amounts have been, could have been,
or could in the future be, converted into U.S. dollars at this or any other exchange rate.
5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Group’s accounting policies (refer to Note 4), management is required to
make judgments, estimates and assumptions about the carrying amounts of assets and liabilities
that are not readily apparent from other sources. The accounts include allowance for doubtful
trade receivable accounts, inventory valuation losses, depreciation, impairment, pension, deferred
tax assets, etc. The estimates and associated assumptions are based on historical experience and
other factors that are considered to be relevant. Actual results may differ from these estimates.
The Group considers the economic implications of the COVID-19 when making its critical
accounting estimates. The estimates and underlying assumptions are audited on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the estimate is revised if
the revision affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.
6. CASH AND CASH EQUIVALENTS
Cash on hand
Checking accounts and cash in bank
Cash equivalents
Time deposits
Short-term bills
December 31
2020
2019
$
3,216
9,723,431
$
3,698
6,194,981
2,108,064
109,697
5,444,929
109,398
$ 11,944,408
$ 11,753,006
The market rate intervals of cash in the bank at the end of the year were as follows (except for the
checking accounts’ interest rate of 0.00%):
Bank balance
Short-term bills
December 31
2020
2019
0.001%-3.90% 0.01%-3.27%
0.34%-0.35%
0.18%
197
Financial Information
As of December 31, 2020 and 2019, certain time deposits were classified and pledged as follows:
Purpose
December 31
2020
2019
Other financial assets - current
Restricted time deposits
Restricted deposits
Negotiable certificate of deposits (not expired)
To secure short-term borrowings and letters of
$
2,300
523,952
$
-
234,758
credit
To meet contract requirements for completing
14,516
37,013
construction
Repatriation of offshore funds
Project grants
65,760
19,400
625,928
-
-
271,771
Non-current assets
Refundable deposits
To meet contract requirements for completing
51,528
85,358
Time deposits
construction
To meet required security deposit
To meet long-term borrowing of credit
878
8,730
61,136
600
8,595
94,553
$ 687,064
$ 366,324
7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial assets mandatorily classified as at FVTPL
Derivative financial assets (not under hedge accounting)
Commodity futures contracts
Exchange rate swap contracts
Options
Hybrid financial assets
Corporate bonds
December 31
2020
2019
$
$
73,329
-
-
5,683,859
69,510
285
-
-
Financial assets at FVTPL
$ 5,757,188
$
69,795
Current
Non-current
Financial liabilities held for trading
Derivative financial liabilities (not under hedge accounting)
Foreign exchange forward contracts
Financial liabilities at FVTPL
Current
Non-current
$
73,329
5,683,859
$
69,795
-
$ 5,757,188
$
69,795
$
$
$
$
8,374
$
6,026
8,374
$
6,026
$
8,374
-
6,026
-
8,374
$
6,026
198
a. As of December 31, 2020 and 2019, outstanding commodity futures not under hedge
accounting were as follows:
Type of
Transaction
Quantity
(Tons)
Trade Date
Expiration
Date
Exercise Price
(In Thousands)
Market Price
(In Thousands)
Valuation
(Loss) Gain
(In Thousands)
December 31, 2020
Commodity futures
contracts
Copper
Nickel
Copper
Zinc
Stainless steel
December 31, 2019
Commodity futures
contracts
Cooper
Cooper
Cooper
Nickel
Nickel
Nickel
Zinc
Buy
10,250
Sell
Buy
Buy
Buy
Buy
Sell
Buy
Buy
Sell
Buy
Buy
882
1,125
155
3,000
9,625
8,875
3,750
1,020
2,634
106
205
2020.04.30-
2020.12.31
2020.10.15-
2020.12.17
2020.10.12-
2020.12.30
2020.12.09-
2020.12.30
2020.12.31
2021.01.20-
2021.10.20
2021.01.15-
2021.03.17
2021.01.31-
2021.07.31
2021.01.31-
2021.02.28
2021.03.31
US$ 76,919
US$ 79,276
US$
2,357
US$ 14,560
US$ 14,597
US$
(37 )
RMB 63,272
RMB 65,034
RMB 1,762
RMB 3,318
RMB 3,233
RMB
(85 )
RMB 40,121
RMB 40,110
RMB
(11)
2019.08.12-
2019.12.31
2019.12.11-
2019.12.30
2019.11.11-
2019.12.30
2019.12.27-
2019.12.31
2019.10.17-
2019.12.23
2019.12.17
2019.10.29-
2019.12.25
2020.02.19-
2020.05.20
2020.01.15
2020.01.01-
2020.04.30
2020.03.27-
2020.03.31
2020.01.17-
2020.03.23
2020.01.31-
2020.03.31
2020.01.31-
2020.02.28
US$ 58,603
US$ 59,235
US$
632
US$ 54,386
US$ 54,657
US$
(271 )
RMB 177,900
RMB 185,097
RMB 7,197
US$ 14,511
US$ 14,333
US$
(178 )
US$ 38,116
US$ 36,994
US$
1,122
RMB 11,822
RMB 11,839
RMB
17
RMB 3,836
RMB 3,701
RMB
(135 )
b. At the end of the year, outstanding foreign exchange forward contracts not under hedge
accounting were as follows:
Currencies
Maturity Date
Notional Amount
(In Thousands)
December 31, 2020
Sell
Buy
EUR to MYR
USD to MYR
EUR to USD
USD to NTD
USD to RMB
USD to NTD
USD to JPY
USD to SGD
2021.01.15-2021.06.28 EUR887/MYR4,378
USD300/MYR1,210
EUR8,180/USD10,065
USD10,000/NTD280,870
2021.01.29
2021.04.08
2021.04.08
2021.01.04-2021.01.28 USD115,000/RMB752,822
USD60,000/NTD1,699,190
USD5,343/JPY553,220
USD38,781/SGD51,851
2021.01.05
2021.01.28
2021.01.19
(Continued)
199
Financial Information
December 31, 2019
Sell
Buy
Currencies
Maturity Date
Notional Amount
(In Thousands)
EUR to MYR
USD to MYR
USD to RMB
USD to NTD
USD to JPY
USD to RMB
EUR to USD
USD to SGD
2020.01.14-2020.09.30 EUR836/MYR3,897
2020.07.30-2020.09.30 USD900/MYR3,783
2020.01.31
USD5,000/RMB35,002
2020.01.03-2020.01.08 USD50,000/NTD1,505,900
2020.01.08
2020.01.06
2020.03.10
2020.11.16
USD7,537/JPY800,000
USD30,000/RMB212,320
EUR5,690/USD6,359
USD31,341/SGD42,457
(Concluded)
c. As of December 31, 2019, outstanding exchange rate swap contracts not under hedge
accounting were as follows:
Currency
Maturity Date
Notional Amount
(In Thousands)
December 31, 2019
USD to JPY
2020.01.08
USD3,985/JPY434,000
d. For the years ended December 31, 2020 and 2019, the Group’s strategy for commodity futures
contracts, foreign exchange forward contracts and exchange rate swap contracts was to hedge
exposures to fluctuations of essential materials’ prices and foreign exchange rates. However,
those derivative financial instruments did not meet the criteria of hedge effectiveness;
therefore, they were not accounted for by hedge accounting.
e. In January 2020, the Group bought 2-year corporate bonds of Golden Harbour International
Pte. Ltd. in the amount of US$178,500 thousand. The bonds are embedded derivative
instruments that pay a fixed interest rate of 5% plus a floating spread per annum.
f.
In January 2020, the Group bought an option contract for US$50 thousand. Under the
contract, the issuer of the option will make an unconditional payment to the Group for the
principal and interest of the abovementioned bonds if Golden Harbour International Pte. Ltd
fails to redeem the bonds at maturity.
8. DERIVATIVE FINANCIAL INSTRUMENTS FOR HEDGING
December 31
2020
2019
Financial assets - current
Fair value hedges - exchange rate swap contracts
$
8,282
$
-
(Continued)
200
December 31
2020
2019
Financial liabilities - current
Fair value hedges - exchange rate swap contracts
$
-
$ 14,346
(Concluded)
The Group used exchange rate swap contracts to minimize its exposure to changes in the
exchange rate of its foreign-currency trade receivable and trade payable. The exchange rate swaps
and the corresponding financial assets have the same terms, and management believes that the
exchange rate swaps are highly effective hedging instruments. The outstanding exchange rate
swap contracts of the Group at the end of the year were as follows:
Currency
Maturity Date
Notional Amount
(In Thousands)
December 31, 2020
Exchange rate swap
USD to NTD
2021.01.13
USD21,000/NTD607,457
contracts
USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to RMB
USD to RMB
USD to RMB
USD to RMB
USD to RMB
2021.01.13
2021.01.13
2021.01.13
2021.01.13
2021.01.13
2021.01.13
2021.01.13
2021.01.15
2021.01.15
2021.01.15
2021.01.15
2021.01.15
USD21,000/NTD607,467
USD30,000/NTD867,795
USD30,000/NTD867,810
USD30,000/NTD867,810
USD30,000/NTD867,810
USD27,000/NTD781,029
USD11,000/NTD318,197
USD21,000/RMB141,259
USD21,000/RMB141,246
USD80,000/RMB538,128
USD40,000/RMB269,040
USD27,000/RMB181,607
December 31, 2019
Exchange rate swap
USD to NTD
2020.01.14
USD41,000/NTD1,252,837
contracts
USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to RMB
USD to RMB
USD to RMB
USD to RMB
USD to RMB
USD to RMB
USD to RMB
2020.02.05
2020.02.05
2020.02.05
2020.02.05
2020.02.05
2020.01.16
2020.02.07
2020.02.07
2020.02.07
2020.02.07
2020.02.07
2020.02.07
USD20,000/NTD607,060
USD35,000/NTD1,063,895
USD10,000/NTD303,980
USD17,000/NTD517,455
USD17,000/NTD517,455
USD22,000/RMB155,706
USD20,000/RMB140,100
USD20,000/RMB140,882
USD10,000/RMB70,445
USD35,000/RMB246,533
USD17,000/RMB119,485
USD17,000/RMB119,581
201
Financial Information
Gain (loss) on the hedging instruments
Loss (gain) on the hedged items
$
8,282
$ 42,075
$ (14,346)
$ (50,141)
For the Year Ended December 31
2020
2019
9. FINANCIAL ASSETS AT AMORTIZED COST
December 31
2020
2019
Current
Foreign investments
Interest rate-linked structured investment deposits
$ 1,315,970
$ 1,470,571
The interest rates for interest rate-linked structured investment deposits were 3.2% and 3.7% as of
December 31, 2020 and 2019, respectively.
10. CONTRACT ASSETS
As of December 31, 2020 and 2019, contract balances were as follows:
Contract assets
Cable installation
Solar power systems installation
Less: Allowance for impairment loss
December 31
2020
2019
$
781,196
3,679,796
-
331,591
$
3,683,081
-
Contract assets - current
$ 4,460,992
$ 4,014,672
The changes in the balance of contract assets primarily result from the timing difference between
the Group’s satisfaction of performance obligations and the respective customer’s payment.
11. NOTES RECEIVABLE AND TRADE RECEIVABLES
December 31
2020
2019
$ 2,974,132
$ 3,576,333
(Continued)
Notes receivable
Notes receivable
202
Trade receivables
Trade receivables
Less: Allowance for impairment loss
December 31
2020
2019
$ 7,637,153
(94,022)
$ 7,706,726
(68,967)
$ 7,543,131
$ 7,637,759
(Concluded)
The average credit period on the sale of goods was 60 days. In determining the collectability of a
trade receivable, the Group considered any change in the credit quality of the trade receivable
since the date credit was initially granted to the end of the reporting period. The Group adopted a
policy of only dealing with entities that are rated the equivalent of investment grade or higher and
obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial
loss from defaults. The Group uses other publicly available financial information or its own
trading records to rate its major customers. The Group’s exposure and the credit ratings of its
counterparties are continuously monitored, and the aggregate value of transactions concluded is
spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that
are reviewed and approved by the risk management committee annually. In this regard, the
management believes the Group’s credit risk is significantly reduced.
The Group applies the simplified approach prescribed by IFRS 9 to measure the loss allowance
for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade
receivables are estimated using a provision matrix by reference to the past default experience with
the respective debtors and an analysis of the debtors’ current financial positions. As the Group’s
historical credit loss experience does not show significantly different loss patterns for different
customer segments, the loss allowance based on the past due status of receivables is not further
distinguished according to different segments of the Group’s customer base.
The Group writes off a trade receivable when there is information indicating that the debtor is
experiencing 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, they are recognized in profit or loss.
The following table details the loss allowance of trade receivables based on the Group’s provision
matrix.
December 31, 2020
Not Past Due
Less than 90
Days
91 to 180 Days
181 to 365 Days
More than 365
Days
Total
0%
0%-2%
0%-50%
0%-100%
50%-100%
Expected credit loss
rate
Gross carrying amount
Loss allowance
(lifetime ECLs)
$ 4,721,878
$ 2,367,951
-
(1,937)
Amortized cost
$ 4,721,878 $ 2,365,914
$
$
276,842
(8,503)
268,339
$
$
153,113
(13,451)
139,662
$
$
117,369
$ 7,637,153
(70,131 )
(94,022)
47,238
$ 7,543,131
203
Financial Information
December 31, 2019
Expected credit loss
rate
Gross carrying amount
Loss allowance
(lifetime ECLs)
Not Past Due
Less than 90
Days
91 to 180 Days
181 to 365 Days
More than 365
Days
Total
0%
0%-2%
0%-50%
0%-100%
50%-100%
$ 6,392,603 $ 1,019,275
-
(6,470)
$
$
101,389
(3,800)
97,589
$
$
95,993
(14,331)
81,662
$
$
97,466 $ 7,706,726
(44,366 )
(68,967)
53,100 $ 7,637,759
Amortized cost
$ 6,392,603 $ 1,012,805
The movements of the loss allowance of trade receivables were as follows:
Balance at January 1
Add: Amount recovered
Add (less): Net remeasurement of loss allowance
Less: Amounts written off
Foreign exchange gains and losses
For the Year Ended December 31
2020
2019
$
68,967
26,688
12,209
(13,135)
(707)
$ 120,910
-
(15,124)
(34,166)
(2,653)
Balance at December 31
$
94,022
$ 68,967
12. FINANCE LEASE RECEIVABLES
Undiscounted lease payments
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6 onwards
Less: Unearned finance income
Net investment in leases presented as finance lease
receivables
Current
Non-current
For the Year Ended December 31
2020
2019
$
$
$
$
81,359
81,359
81,359
81,359
81,359
531,735
938,530
(161,817)
$
81,359
81,359
81,359
81,359
81,359
613,094
1,019,889
(188,898)
776,713
$
830,991
56,128
720,585
$
54,278
776,713
776,713
$
830,991
204
The power supply contracts of solar power equipment are recognized in accordance with the
accounting policies of finance leases. The average term of finance leases entered into was 20
years.
The interest rate inherent in the leases was fixed at the contract date for the entire lease term. The
average effective interest rate contracted was approximately 3.30% per annum as of December 31,
2020 and 2019.
The finance lease receivables as of December 31, 2020 and lease receivables as of December 31,
2019 were neither past due nor impaired.
The amounts of finance lease receivables and lease receivables pledged as collateral for bank
borrowings are set out in Note 32.
13. INVENTORIES
Manufacturing and trading industries
Raw materials
Raw materials in transit
Supplies
Work-in-process
Finished goods and merchandise
Contracts in progress
Real estate development industry
Undeveloped land
Buildings and land held for sale
Contracts in progress
December 31
2020
2019
$
3,804,593 $ 3,431,920
1,962,559
1,426,333
1,606,782
1,420,645
2,525,817
2,495,808
5,464,469
5,493,205
317,612
-
14,958,196 14,991,547
3,434
218,402
5,900,503
6,122,339
3,434
2,030,702
4,993,405
7,027,541
$ 21,080,535 $ 22,019,088
a. The cost of inventories recognized as cost of goods sold for the years ended December 31,
2020 and 2019 was NT$99,095,630 thousand and NT$124,756,314 thousand, respectively.
b. The cost of inventories recognized as cost of goods sold for the year ended December 31,
2020 included reversal of inventory write-downs of NT$323,333 thousand. The cost of
inventories recognized as cost of goods sold for the year ended December 31, 2019 included
reversal of inventory write-downs of NT$148,763 thousand. Previous write-downs had been
reversed as a result of the inventory close out.
c. The purchase of inventory for the real estate development industry is primarily for the land,
construction costs of future construction and construction projects which are still under
development of Walsin (Nanjing) Construction Co., Ltd.
d. Walsin (Nanjing) Construction Co., Ltd. entered into an agreement with third parties for the
sale of real estate as of December 31, 2020 and 2019; the selling prices for the related
residential buildings and office buildings were RMB1,346,175 thousand and RMB130,630
thousand, respectively. The sales of the real estate in the amounts of NT$5,495,319 thousand
205
Financial Information
and NT$571,573 thousand were recorded as operating revenue for the years ended December
31, 2020 and 2019, respectively.
e. As of December 31, 2020 and 2019, Walsin (Nanjing) Construction Co., Ltd. did not receive
the contract payment of the presold real estate.
14. FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER
COMPREHENSIVE INCOME
Domestic listed ordinary shares
HannStar Display Corp.
HannStar Board Corp.
TECO Electric & Machinery Corp.
Domestic unlisted ordinary shares
Foreign unlisted ordinary shares
Current
Non-current
December 31
2020
2019
$ 3,685,476
2,763,734
26,378
339,955
95,101
$ 2,089,584
2,639,800
-
320,842
273,139
$ 6,910,644
$ 5,323,365
$
-
6,910,644
-
$
5,323,365
$ 6,910,644
$ 5,323,365
These investments in equity instruments are held for medium- to long-term strategic purposes.
Accordingly, the management selected to designate these investments in equity instruments as at
FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value
in profit or loss would not be consistent with the Group’s strategy of holding these investments
for long-term purposes.
15. SUBSIDIARIES
a. Subsidiaries included in consolidated financial statements
The consolidated entities as of December 31, 2020 and 2019 were as follows:
Investor
Investee
Main Business
% of Ownership
December 31
2020
2019
Walsin Lihwa
Corporation
Walsin Lihwa Holdings Limited
Investment holding
100.00
100.00
(WLHL)
Concord Industries Limited (CIL)
Touch Micro-System Technology
Investment holding
OEM on MEMS foundry service
Corp. (TMTC)
Ace Result Global Limited
Energy Pilot Limited (Energy Pilot)
Investment holding
Investment holding
Market Pilot Limited (Market Pilot)
Investment holding
Min Maw Precision Industry Corp.
Solar power systems management,
(Min Maw)
design, and installation
100.00
-
(Note 6)
100.00
-
(Note 7)
-
(Note 10)
100.00
100.00
100.00
(Liquidating)
100.00
100.00
100.00
100.00
(Continued)
206
% of Ownership
December 31
Investor
Investee
Main Business
Walsin Info-Electric Corp. (Walsin
Mechanical and electrical,
Info-Electric)
communications, and power
systems
Jin-Cherng Construction Co.
Construction business
(Jin-Cherng)
Joint Success Enterprises Limited
P.T. Walsin Lippo Industries (P.T.
Investments
Manufacture and sale of cables and
Walsin)
wires
2020
99.51
99.22
49.05
70.00
PT. Walsin Lippo Kabel
Waltuo Green Resources Corp.
Cables and wires
Waste disposal, resource recovery and
70.00
100.00
cement products
PT. Walsin Nickel Industrial
Manufacture and sale of nickel pig
Indonesia
iron
WLHL
Walsin (China) Investment Co., Ltd.
Jiangyin Walsin Steel Cable Co., Ltd.
Investment holding
Manufacture and sale of steel cables
50.00
(Note 5)
100.00
100.00
(JHS)
and wires
Shanghai Walsin Lihwa Power Wire
Manufacture and sale of cables and
95.71
& Cable Co., Ltd.
wires
2019
98.87
99.22
49.05
70.00
70.00
100.00
-
100.00
100.00
95.71
Dongguan Walsin Wire & Cable Co.,
Manufacture and sale of bare copper
100.00
100.00
Ltd.
cables and wires
Renowned International Limited
Investments
Walsin International Investments
Investments
Limited
Borrego Solar System, Inc.
Nanjing Walsin Expo Exhibition Co.,
Solar power system
Exhibition service
Ltd.
Nanjing Taiwan Trade Mart
Management Co., Ltd.
Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
Nanjing Walsin Metal Co., Ltd.
Business and assets management,
consulting and advertising services
Manufacture and sale of cold-rolled
stainless steel and flat-rolled
products
Manufacture and sale of copper alloy
Nanjing Walsin Metal Co., Ltd.
Manufacture and sale of copper alloy
-
(Note 8)
100.00
73.66
-
(Note 1)
100.00
83.97
100.00
75.29
-
(Note 1)
100.00
18.37
18.37
-
(Note 2)
-
(Note 2)
Walsin (China)
Investment Co.,
Ltd.
Renowned
International
Limited
CIL
Jin-Cherng
Walsin Specialty Steel Corp.
Sale of specialty steel products and
100.00
investment
Changshu Walsin Specialty Steel Co.,
Manufacture and sale of specialized
100.00
Ltd.
Shanghai Baihe Walsin Lihwa
Specialty Steel Co., Ltd.
steel tubes, rods and wires
Manufacture and sale of stainless steel
100.00
Yantai Walsin Stainless Steel Co.,
Production and sale of new-type alloy
100.00
Ltd.
Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
materials
Manufacture and sale of cold-rolled
stainless steel and flat-rolled
products
81.63
Walsin Precision Technology Sdn.
Manufacture and sale of stainless steel
100.00
Bhd.
XiAn Walsin Metal Product Co., Ltd.
Production and sale of medium and
100.00
XiAn Walsin Opto-electronic Limited
Light emitter diode and solar power
heavy specialty steel plates
XiAn Lu Jing Technology Co., Ltd.
Solar module assembly
assembly
Walsin Lihwa (Changzhou)
Investment Co., Ltd.
Joint Success Enterprises Limited
Walsin (Nanjing) Construction
Limited
Commerce and investments
Investments
Construction, rental and sale of
buildings and industrial factories
-
(Note 3)
-
(Note 3)
-
(Note 11)
50.95
100.00
Nanjing Walsin Property Management
Property management, business
100.00
Co., Ltd.
management and housing leasing
-
(Note 2)
-
(Note 2)
100.00
100.00
100.00
100.00
81.63
100.00
100.00
-
(Note 3)
100.00
100.00
50.95
100.00
100.00
(Continued)
207
Financial Information
Investor
Investee
Main Business
% of Ownership
December 31
2020
2019
Walsin Nanjing Culture and Arts Co.,
Organize culture and arts
100.00
100.00
Ltd.
Walsin Nanjing Commercial
Management Co., Ltd.
Energy Pilot Limited
Green Lake Capital, LLC.
communication activity, cultural
performance, culture and arts
forwarding agency
Business management, food
marketing, catering services and
sale of groceries
Solar power business
Green Lake Exchange, LLC.
Solar power business
Market Pilot Limited
XiAn Walsin United Technology Co.,
Electronic devices and module
Ltd.
-
(Note 9)
-
(Note 4)
-
(Note 4)
-
(Note 12)
100.00
100.00
(Liquidating)
-
(Note 4)
100.00
(Concluded)
Note 1: Nanjing Walsin Expo Exhibition Co., Ltd. was liquidated on December 27, 2019
and received its deregistration certificate on December 31, 2019.
Note 2: In May 2019, the Group entered into an agreement with Zhuhai Gree Electric
Enterprise Co., Ltd. for the disposal of the Group’s equity interest in Nanjing Walsin
Metal Co., Ltd. On May 27, 2019, the Group’s representatives (director and
supervisor) resigned from Nanjing Walsin Metal Co., Ltd. and the Group ceased to
have control over Nanjing Walsin Metal Co., Ltd. See Note 27 for the detailed
information.
Note 3: XiAn Walsin Metal Product Co., Ltd. merged XiAn Lu Jing Technology Co., Ltd.
and XiAn Walsin Opto-electric Limited by absorption.
Note 4: The liquidation of Green Lake Capital, LLC and Green Lake Exchange, LLC was
completed on May 24, 2020 and November 4, 2019, respectively.
Note 5: In January 2020, the Group invested capital to establish PT. Walsin Nickel Industrial
Indonesia (“WNII”). New Hono Investment Pte. Ltd (“NHI”) held 42% equity of
WNII. According to the joint venture agreement signed by WLH and NHI in
January 2020, WLH had the right to purchase 100% of NHI’s shares on the terms
agreed by all parties to acquire 42% equity of WNII indirectly.
Note 6: The liquidation of Touch Micro-system Technology Corp. was completed on June 5,
2020.
Note 7: The liquidation of Energy Pilot Limited was completed on September 3, 2020.
Note 8: The liquidation of Renowned International Limited was completed on August 24,
2020.
Note 9: The liquidation of Walsin Nanjing Commercial Management Co., Ltd. was
completed on December 7, 2020.
Note 10: The liquidation of Market Pilot Limited was completed on December 9, 2020.
Note 11: The liquidation of Walsin Lihwa (Changzhou) Investment Co., Ltd. was completed
on October 19, 2020.
208
Note 12: The liquidation of XiAn Walsin United Technology Co., Ltd. was completed on
December 7, 2020.
b. The following entities were excluded from consolidation as of December 31, 2020 and 2019:
% of Ownership
December 31
Investor
Investee
Main Business
2020
2019
Note
WLHL
Walcom Chemical Industrial
Commerce
65.00
65.00
Note
Limited
Note: The investee has a capital of HK$500 thousand and total assets of HK$1 thousand. As
of December 31, 2020 and 2019, the investee had no sales, and its total assets were
less than 1% of the Group’s consolidated total assets.
The financial statements of certain aforementioned subsidiaries included in the consolidated
financial statements were not audited by the auditor of WLC, but were reviewed by other
auditors. As of December 31, 2020 and 2019, the combined total assets were NT$10,148,841
thousand and NT$10,076,558 thousand, respectively. For the years ended December 31, 2020
and 2019, the combined total net operating revenue of such subsidiaries were NT$18,427,711
thousand and NT$15,531,341 thousand, respectively.
16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investments in associates:
Name of Associate
Carrying
Value
Ownership
Percentage
Carrying
Value
Ownership
Percentage
December 31
2020
2019
Material associates
Winbond Electronics Corp.
Walton Advanced Engineering,
Inc.
Walsin Technology Corp.
Associates that are not
individually material
$ 14,595,661
22.21
$ 13,599,856
22.21
2,601,028
7,068,731
21.65
18.30
2,549,401
6,188,821
21.65
18.30
Others
8,501,671
6,674,389
$ 32,767,091
$ 29,012,467
Refer to Table 8 “Information on Investees” and Table 9 “Information on Investments in
Mainland China” for the nature of activities, principal place of business and country of
incorporation of the associates.
The Group is the single largest shareholder of the abovementioned material associates in which
the Group has an ownership percentage of less than 50%. Considering the relative size and wide
209
Financial Information
dispersion of the voting rights owned by other shareholders, the Group has no ability to direct the
relevant activities of the associates and therefore has no control over these associates.
On December 30, 2019, the Group subscribed for 47,861 thousand shares of Powertec
Electrochemical Corp. through a private placement for a cash consideration of NT$239,303
thousand. The transfer of the aforementioned ordinary shares within 3 years from the acquisition
date is prohibited by regulations.
On February 26, 2020, Powertec Electrochemical Corp. filed for bankruptcy with resolution of the
board of directors in accordance with Company Act, No. 211 and relevant regulations.
Management of WLC carried out an impairment review by comparing their respective
recoverable amounts with the carrying amounts. Based on the assessment, the recoverable amount
of WLC’s interest in Powertec Electrochemical Corp. of NT$1,678,639 thousand was less than
the carrying amount. The amount was recognized as impairment loss under non-operating income
and expenses in 2019. On April 10, 2020, Powertec Electrochemical Corp. was declared bankrupt
by the Taipei District Court.
Fair values (Level 1) of investments in associates with available published price quotation are
summarized as follows:
Name of Associate
Winbond Electronics Corp.
Walton Advanced Engineering, Inc.
Walsin Technology Corp.
December 31
2020
2019
$ 25,675,797 $ 17,279,237
$
1,512,872 $ 1,277,171
$ 20,491,986 $ 21,247,656
All the associates are accounted for using the equity method.
The Group’s share of profit and other comprehensive income of associates for the years ended
December 31, 2020 and 2019 were based on the associates’ financial statements audited by
independent auditors for the same period.
a. Material associates
December 31, 2020
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
Non-controlling interests
210
Winbond
Electronics
Corp.
$ 47,530,801
78,512,439
(25,475,006)
(29,975,547)
70,592,687
(5,143,568)
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
$
6,497,236 $ 39,636,422
11,013,279 42,416,526
(3,189,422) (19,714,368)
(2,436,908) (16,684,386)
11,884,185 45,654,194
(7,033,732)
-
$ 65,449,119
$ 11,884,185 $ 38,620,462
(Continued)
Winbond
Electronics
Corp.
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
Current assets
Proportion of the Group’s ownership
$ 47,530,801
22.21%
Equity attributable to the Group
Other adjustments
Carrying amount
Operating revenue
$ 14,536,249
59,412
$ 14,595,661
$ 60,683,171
Net profit for the year
Other comprehensive income (loss)
$
1,519,043
3,291,251
Total comprehensive income for the
year
$
4,810,294
$
$
$
$
$
$
6,497,236 $ 39,636,422
18.30%
21.65%
2,572,926 $ 7,067,545
1,186
28,102
2,601,028 $ 7,068,731
5,399,201 $ 35,599,197
254,887 $ 7,217,645
657,013
(49,194)
205,693 $ 7,874,658
(Concluded)
December 31, 2019
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
Non-controlling interests
Winbond
Electronics
Corp.
$ 37,557,286
67,247,614
(17,515,468)
(23,432,245)
63,857,187
(2,836,565)
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
$
3,836,916 $ 29,074,560
13,271,223 31,069,984
(2,219,782) (16,312,658)
(3,196,283)
(7,294,140)
11,692,074 36,537,746
(2,716,095)
-
$ 61,020,622
$ 11,692,074 $ 33,821,651
Proportion of the Group’s ownership
22.21%
21.65%
18.30%
Equity attributable to the Group
Other adjustments
Carrying amount
Operating revenue
$ 13,552,680
47,176
$ 13,599,856
$ 48,771,434
Net profit for the year
Other comprehensive income (loss)
$
1,477,287
1,294,756
$
$
$
$
2,531,334 $ 6,189,362
(541)
18,067
2,549,401 $ 6,188,821
6,158,099 $ 30,140,875
165,048 $ 6,648,906
(9,168)
1,120,375
Total comprehensive income for the
year
$
2,772,043
$
1,285,423 $ 6,639,738
211
Financial Information
b. Associates that are not individually material
The Group’s share of:
Gain (loss) from continuing operations
Other comprehensive income
For the Year Ended December 31
2020
2019
$
119,854
1,809,645
(653,272)
$
1,003,210
Total comprehensive income for the year
$ 1,929,499
$
349,938
The Group’s share of profit and other comprehensive income of associates for the years ended
December 31, 2020 and 2019 was based on the associates’ financial statements audited by
independent auditors for the same period.
The financial statements of certain equity-method investees included in the financial
statements as of and for the year ended December 31, 2019 were audited by other auditors.
The investment in such investees amounted to NT$0 thousand and the investment loss
amounted to NT$1,004,729 thousand for the year ended December 31, 2019.
17. PROPERTY, PLANT AND EQUIPMENT
Assets used by the Group
$ 34,294,221 $ 27,845,109
Land
Buildings and
Improvements
Machinery and
Equipment
Other
Equipment
Construction in
Progress
Total
December 31
2020
2019
Cost
Balance at January 1, 2020
Additions
Disposals
Reclassified
Reclassified as inventories
Effect of foreign currency
exchange differences
Balance at December 31,
$ 3,453,378 $ 16,144,426
71,752
(6,290 )
206,871
(20,674 )
30,617
-
-
-
$ 25,268,998
250,651
(252,518 )
501,545
-
$ 6,375,790
554,663
(132,739)
292,364
(2,782)
$ 2,001,693 $ 53,244,285
8,747,930
(407,023 )
-
(23,456 )
7,840,247
(15,476 )
(1,000,780 )
-
-
149,569
37,608
45,834
(248,696 )
(15,685 )
2020
$ 3,483,995 $ 16,545,654
$ 25,806,284
$ 7,133,130
$ 8,576,988
$ 61,546,051
Accumulated depreciation
and impairment
Balance at January 1, 2020
Disposals
Disposal of subsidiaries
Impairment losses
recognized in profit or
loss
Depreciation expenses
Reclassified
Reclassified as inventories
Effect of foreign currency
exchange differences
212
$
8,067 $ 5,531,108
(5,723 )
-
$ 15,120,400
(243,278 )
$ 4,739,601
(128,359)
$
- $ 25,399,176
(377,360 )
-
-
-
-
-
-
696,929
-
-
-
1,021,262
(976 )
-
(691)
385,930
976
(2,086)
-
43,658
50,723
34,289
-
-
-
-
(691 )
2,104,121
-
(2,086 )
-
128,670
(Continued)
Land
Buildings and
Improvements
Machinery and
Equipment
Other
Equipment
Construction in
Progress
Total
Balance at December 31,
2020
$
8,067 $ 6,265,972
$ 15,948,131
$ 5,029,660
$
- $ 27,251,830
Carrying amount at
December 31, 2020
Cost
$ 3,475,928 $ 10,279,682
$ 9,858,153
$ 2,103,470
$ 8,576,988 $ 34,294,221
Balance at January 1, 2019
Additions
Disposals
Disposal of subsidiaries
Transferred from inventory
Reclassified
Effect of foreign currency
exchange differences
$ 2,383,150 $ 8,999,161
153,104
1,057,564
(66 )
(65,596 )
(169,709 )
-
227,364
-
7,402,255
12,730
$ 25,882,142
237,851
(289,369 )
(964,730 )
-
607,089
$ 6,514,788
256,600
(359,356)
(173,177)
7,230
232,577
$ 6,884,427 $ 50,663,668
5,127,820
(735,561 )
(1,350,737 )
263,372
(4,990 )
3,422,701
(21,174 )
(43,121 )
28,778
(8,259,641 )
-
(402,153 )
(203,985 )
(102,872)
(10,277 )
(719,287 )
Balance at December 31,
2019
$ 3,453,378 $ 16,144,426
$ 25,268,998
$ 6,375,790
$ 2,001,693 $ 53,244,285
Accumulated depreciation
and impairment
Balance at January 1, 2019
Disposals
Disposal of subsidiaries
Impairment losses
recognized in profit or
loss
Depreciation expenses
Reclassified
Effect of foreign currency
exchange differences
Balance at December 31,
$
8,067 $ 5,191,042
(29,999 )
(86,540 )
-
-
$ 15,465,478
(239,411 )
(915,362 )
$ 4,915,645
(307,960)
(142,965)
$
- $ 25,580,232
(577,370 )
-
(1,144,867 )
-
-
-
-
-
515,880
2,969
421
999,536
(32,187 )
1,369
332,638
28,779
-
-
-
1,790
1,848,054
(439 )
-
(62,244 )
(158,075 )
(87,905)
-
(308,224 )
2019
$
8,067 $ 5,531,108
$ 15,120,400
$ 4,739,601
$
- $ 25,399,176
Carrying amount at
December 31, 2019
$ 3,445,311 $ 10,613,318
$ 10,148,598
$ 1,636,189
$ 2,001,693 $ 27,845,109
(Concluded)
The above items of property, plant and equipment are depreciated on a straight-line basis over the
following estimated useful lives:
Buildings and improvements
Machinery and equipment
Other equipment
3-50 years
3-20 years
3-15 years
The Group’s main buildings and electrical and mechanical power equipment are depreciated over
their estimated useful lives of 20-50 years and 18-20 years, respectively.
On September 27, 2019, Shanghai Baihe Walsin Lihwa Specialty Steel Co., Ltd. entered into an
agreement with Shanghai Qingpu District Baihei Town Land Expropriation Office to sell the
right-of-use assets and property, plant and equipment at Baihei Town, Qingpu District, Shanghai
for RMB242,887 thousand (NT$1,089,054 thousand). The transaction was completed in
December 2019, resulting in proceeds of RMB213,900 thousand (NT$959,486 thousand) from the
disposal of property, plant and equipment under non-operating income and expenses.
213
Financial Information
WLC owns parcels of land which were registered in the name of certain individuals because of
certain regulatory restrictions. To secure its ownership of such parcels of land, WLC keeps in its
possession the land titles with the annotation of the land being pledged to WLC. As of December
31, 2020 and 2019, the recorded total carrying amount of such parcels of land amounted to
NT$491,917 thousand.
18. LEASE ARRANGEMENTS
a. Right-of-use assets
Carrying amount
Land
Buildings
Transportation equipment
Additions to right-of-use assets
Disposal of subsidiaries
Disposal
Depreciation charge for right-of-use assets
Land
Buildings
Transportation equipment
b. Lease liabilities
Carrying amount
Current
Non-current
December 31
2020
2019
$ 1,480,251
156,056
28,099
$ 1,139,658
193,133
31,032
$ 1,664,406
$ 1,363,823
For the Year Ended December 31
2020
2019
$ 424,199
-
$
(1,245)
$
$ 107,244
$ (42,551)
$ (34,317)
$
53,383
62,564
15,469
$ 40,593
54,085
12,771
$ 131,416
$ 107,449
December 31
2020
2019
$
75,261
$ 274,442
$ 76,467
$ 225,505
214
Range of discount rate for lease liabilities was as follows:
Land
Buildings
Transportation equipment
c. Other lease information
December 31
2020
2019
0.83%-6.123% 1.75%-6.123%
1.409%-6.1%
3.038%-5.75% 3.038%-5.75%
1.409%-8%
For the Year Ended December 31
2020
2019
Expenses relating to short-term leases
Expenses relating to low-value asset leases
Expenses relating to variable lease payments not
included in the measurement of lease liabilities
Total cash outflow for leases
$
$
77,768
663
$ 72,462
749
$
$
8,683
$ (170,946)
$
9,621
$ (158,649)
19. INVESTMENT PROPERTIES
Completed investment properties
$
9,874,926 $ 10,032,989
December 31
2020
2019
Cost
Balance at January 1, 2020
Additions
Transferred to inventories
Effects of foreign currency exchange differences
Balance at December 31, 2020
Balance at January 1, 2019
Additions
Disposals
Reclassified
Transferred from property, plant and equipment
Effect of foreign currency exchange differences
Balance at December 31, 2019
Completed
Investment
Properties
$ 12,248,696
547
(2,188)
24,310
$ 12,271,365
$ 12,331,072
12,397
(106,214)
70,729
4,990
(64,278)
$ 12,248,696
(Continued)
215
Financial Information
Accumulated depreciation and impairment
Balance at January 1, 2020
Depreciation expense
Effect of foreign currency exchange differences
Balance at December 31, 2020
Balance at January 1, 2019
Disposal
Reclassified
Transferred from property, plant and equipment
Depreciation expense
Effect of foreign currency exchange differences
Balance at December 31, 2019
Completed
Investment
Properties
$ 2,215,707
169,976
10,756
$ 2,396,439
$ 2,089,425
(75,177)
18,559
439
207,952
(25,491)
$ 2,215,707
(Concluded)
The completed investment properties are depreciated under the straight-line method over their
estimated useful lives of 20 to 50 years.
The main investment properties of the Group are Walsin Xin Yi Building and the completed
investment properties of Walsin (Nanjing) Construction Co., Ltd. The building’s valuation was
commissioned by independent appraisal agencies (third parties). As of December 31, 2020 and
2019, the fair values of completed investment properties’ were NT$33,971,481 thousand and
NT$33,762,178 thousand, respectively.
20. BORROWINGS
Short-term borrowings
Current portion of long-term borrowings
Long-term borrowings
$ 6,591,019 $ 12,457,481
$ 6,162,400 $ 6,564,196
$ 31,406,829 $ 16,929,215
December 31
2020
2019
216
a. Short-term borrowings as of December 31, 2020 and 2019 were as follows:
December 31
2020
2019
Interest Rate
%
Amount
Interest Rate
%
Amount
Procurement loans
Bank’s lines of credit
0.7-0.9
0.65
$
5,091,019
1,500,000
-
0.8-5.75
$
-
12,457,481
$
6,591,019
$ 12,457,481
Refer to Notes 6 and 32 for collateral pledged for short-term borrowings as of December 31,
2019.
b. Long-term borrowings as of December 31, 2020 and 2019 were as follows:
December 31
2020
Significant Covenant
Amount
2019
Amount
Bank of Taiwan
Long-term credit loan, principal repayment at maturity,
$
-
$ 1,000,000
Taishin International Bank
Taipei Fubon Commercial
Bank
Chang Hwa Commercial
Bank
First Commercial Bank
First Commercial Bank
Hua Nan Commercial Bank
Hua Nan Commercial Bank
from August 7, 2017 to May 9, 2020
Long-term credit loan; principal repayment at maturity,
from September 22, 2017 to September 22, 2020
Long-term credit loan; principal repayment at maturity,
from September 22, 2017 to September 22, 2020
Long-term credit loan; principal repayment at maturity,
from September 22, 2017 to September 22, 2020
Long-term credit loan; principal repayment at maturity,
from September 22, 2017 to September 22, 2020
Long-term credit loan; principal repayment at maturity,
from December 28, 2018 to December 28, 2021
Long-term credit loan; principal repayment at maturity,
from March 5, 2018 to March 5, 2021
Long-term credit loan; principal repayment at maturity,
from December 28, 2018 to December 28, 2021
-
-
-
-
2,000,000
1,000,000
1,500,000
1,000,000
1,000,000
1,000,000
1,500,000
1,500,000
1,500,000
1,500,000
Chinatrust Commercial Bank Mid-term credit loan; principal repayment at maturity,
1,000,000
1,000,000
from March 5, 2018 to March 5, 2021
Mega International
Long-term credit loan; principal repayment at maturity,
1,000,000
1,000,000
Commercial Bank Co.,
Ltd.
from March 5, 2018 to March 5, 2021
Bank of Taiwan
Long-term credit loan; principal repayment at maturity,
3,000,000
3,000,000
Cathay United Bank
Long-term credit loan; principal repayment at maturity,
1,500,000
1,500,000
from March 4, 2019 to March 4, 2022
from March 4, 2019 to March 4, 2022
Taiwan Cooperative Bank
Long-term credit loan; principal repayment at maturity,
1,000,000
1,000,000
from March 4, 2019 to March 4, 2022
Taipei Fubon Commercial
Long-term credit loan; principal repayment at maturity,
1,000,000
1,000,000
Bank
from June 3, 2019 to June 3, 2022
Chang Hwa Commercial
Long-term credit loan; principal repayment at maturity,
1,000,000
1,000,000
Bank
KGI Bank
from June 3, 2019 to June 3, 2022
Long-term credit loan; principal repayment at maturity,
1,500,000
1,500,000
from June 3, 2019 to June 3, 2022
Chinatrust Commercial Bank Long-term credit loan; principal repayment at maturity,
1,500,000
1,500,000
Standard Chartered Bank
DBS Bank
from September 3, 2019 to September 3, 2022
Long-term credit loan; applied for the extension of the
final maturity date to December 31, 2022 on
December 18, 2020; principal repayment at maturity,
from January 14, 2020 to December 31, 2022
Long-term credit loan; extended the drawdown term to
3 years on September 30, 2020; principal repayment
at maturity, from March 30, 2020 to March 30, 2023
5,352,144
3,028,500
-
-
(Continued)
217
Financial Information
December 31
2020
Significant Covenant
DBS Bank
DBS Bank
Standard Chartered Bank
Long-term credit loan; extended the drawdown term to
3 years on September 30, 2020; principal repayment
at maturity, from March 30, 2020 to March 30, 2023
Long-term credit loan; extended the drawdown term to
3 years on October 15, 2020; principal repayment at
maturity, from April 15, 2020 to April 15, 2023
Long-term credit loan; applied for the extension of the
final maturity date to December 31, 2022 on
December 18, 2020; principal repayment at maturity,
from December 3, 2020 to December 31, 2022
2019
Amount
Amount
3,018,600
3,010,000
2,093,000
Bank of Taiwan
Long-term credit loan; principal repayments at
3,000,000
maturity, from September 22, 2020 to September 22,
2025; principal to be repaid in two phases: From the
5th year, repayments are due once every six months;
at rates of 20% and 80%, respectively.
The Export-Import Bank of
the Republic of China
Long-term credit loan from September 22, 2020 to
1,137,770
September 22, 2025; principal to be repaid evenly in
seven phases; 1st repayment due 48 months after the
drawdown date, after which repayments are due once
every six months
-
-
-
-
-
Cathay United Bank
Long-term secured loan; from December 15, 2011 to
117,844
137,485
December 15, 2021; the grace period for principal is
6 months, after which repayments are due monthly
Long-term secured loan; from September 27, 2012 to
September 27, 2022; the grace period for principal is
6 months, after which repayments are due monthly
Long-term secured loan; from February 21, 2012 to
February 21, 2022; the grace period for principal is 6
months, after which repayments are due monthly
Long-term secured loan; from December 25, 2013 to
October 11, 2023; the grace period for principal is 6
months, after which repayments are due monthly
Long-term secured loan; from February 14, 2014 to
October 11, 2023; the grace period for principal is 6
months, after which repayments are due monthly
Long-term secured loan; from October 6, 2014 to
October 11, 2023; the grace period for principal is 6
months, after which repayments are due monthly
Cathay United Bank
Cathay United Bank
Taipei Fubon Bank
Taipei Fubon Bank
Taipei Fubon Bank
Less: Current portion of
long-term borrowings
122,844
141,019
101,218
117,632
31,167
34,833
27,467
30,667
28,675
31,775
37,569,229
(6,162,400 )
23,493,411
(6,564,196 )
$ 31,406,829
$ 16,929,215
(Concluded)
1) Under the loan agreements with DBS Bank, WLC should maintain certain financial ratios
during the loan term, which are based on the annual and semi-annual consolidated
financial statements audited by the independent auditors. The financial ratios are as
follows:
a) Ratio of current assets to current liabilities not less than 100%;
b) Ratio of total liabilities less cash and cash equivalents to tangible net worth not more
than 120%;
c) Ratio of net income before interest expenses, taxation, depreciation and amortization
to interest expenses not less than 150%; and
d) Tangible net worth (net worth less intangible assets) not less than NT$55,000,000
thousand.
218
2) As of December 31, 2020 and 2019, the effective interest rate range of the credit
borrowings was 0.10%-1.50% and 1.25%-1.40% per annum, respectively. As of
December 31, 2020 and 2019, the effective interest rate range of the secured borrowings
was 1.66%-2.07% and 1.94%-2.27% per annum, respectively.
3) As of December 31, 2020 and 2019, the Group’s current portion of long-term borrowings
were NT$6,162,400 thousand and NT$6,564,196 thousand, respectively, under the loan
agreements. The Group’s consolidated financial statements for the years ended December
31, 2020 and 2019 showed that the Group was in compliance with the aforementioned
financial ratio requirements.
4) Refer to Note 32 for collaterals pledged on bank borrowings as of December 31, 2020 and
2019.
21. RETIREMENT BENEFIT PLANS
a. Defined contribution plan
WLC and its subsidiaries in the ROC adopted a pension plan under the Labor Pension Act
(LPA), which is a state-managed defined contribution plan. Under the LPA, WLC and its
subsidiaries in the ROC make monthly contributions to employees’ individual pension
accounts at 6% of monthly salaries and wages.
The total expense recognized in profit or loss for the years ended December 31, 2020 and
2019 was NT$89,868 thousand and NT$89,411 thousand, respectively, which represents
contributions payable to these plans by the Group at rates specified in the rules of the plans.
b. Defined benefit plans
The defined benefit plans adopted by WLC and Walsin Info-Electric in accordance with the
Labor Standards Act are operated by the government of the ROC. Pension benefits are
calculated on the basis of the length of service and average monthly salaries of the 6 months
before retirement. WLC and Walsin Info-Electric contribute amounts equal to 2% of total
monthly salaries and wages to a pension fund administered by the pension fund monitoring
committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s
name. Before the end of each year, the Group assesses the balance in the pension fund. If the
amount of the balance in the pension fund is inadequate to pay retirement benefits for
employees who conform to retirement requirements in the next year, the Group is required to
fund the difference in one appropriation that should be made before the end of March of the
next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the
“Bureau”); the Group has no right to influence the investment policy and strategy.
The amounts included in the consolidated balance sheets in respect of the Group’s defined
benefit plans are as follows:
December 31
2020
2019
Present value of defined benefit obligation
Fair value of plan assets
$ 1,371,774
(1,083,800)
$ 1,462,115
(1,003,099)
Net defined benefit liabilities
$
287,974
$
459,016
219
Financial Information
Present Value
of the Defined
Benefit
Obligation
Fair Value of
the Plan Assets
Net Defined
Benefit
Liability (Asset)
$ 1,462,879
$
(881,651)
$
581,228
14,653
1,941
14,575
31,169
-
-
(8,778)
(8,778)
14,653
1,941
5,797
22,391
-
(30,782)
(30,782)
3,142
32,948
17,478
53,568
-
(69,456)
(16,045)
1,462,115
12,743
10,917
23,660
-
-
-
(30,782)
(151,344)
69,456
-
(1,003,099)
-
(7,483)
(7,483)
3,142
32,948
17,478
22,786
(151,344)
-
(16,045)
459,016
12,743
3,434
16,177
-
(32,941)
(32,941)
3,949
30,358
(45,036)
(10,729)
-
(88,652)
(14,620)
-
-
-
(32,941)
(128,929)
88,652
-
3,949
30,358
(45,036)
(43,670)
(128,929)
-
(14,620)
Balance at January 1, 2019
Service cost
Current service cost
Past service cost
Net interest expense (income)
Recognized in profit or loss
Remeasurement
Return on plan assets (excluding
amounts included in net
interest)
Actuarial loss - change in
demographic assumption
Actuarial loss - changes in
financial assumption
Actuarial loss - experience
adjustments
Recognized in other comprehensive
income (loss)
Contributions from the employer
Benefits paid
Account paid
Balance at December 31, 2019
Service cost
Current service cost
Net interest expense (income)
Recognized in profit or loss
Remeasurement
Return on plan assets (excluding
amounts included in net
interest)
Actuarial loss - changes in
demographic assumptions
Actuarial loss - changes in
financial assumptions
Actuarial gain - experience
adjustments
Recognized in other comprehensive
income (loss)
Contributions from the employer
Benefits paid
Account paid
Balance at December 31, 2020
$ 1,371,774
$ (1,083,800)
$
287,974
220
An analysis by function of the amounts recognized in profit or loss in respect of the defined
benefit plans is as follows:
Operating costs
Selling and marketing expenses
General and administrative expenses
Research and development expenses
For the Year Ended December 31
2020
2019
$
9,465
1,286
4,947
479
$ 12,015
1,630
8,512
234
$ 16,177
$ 22,391
Through the defined benefit plans under the Labor Standards Act, the Group is exposed to the
following risks:
1) Investment risk: The plan assets are invested in domestic and foreign equity and debt
securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau
or under the mandated management. However, in accordance with relevant regulations,
the return generated by plan assets shall not be below the interest rate for a 2-year time
deposit with local banks.
2) Interest risk: A decrease in the government bond interest rate will increase the present
value of the defined benefit obligation; however, this will be partially offset by an increase
in the return on the plans’ debt investments.
3) Salary risk: The present value of the defined benefit obligation is calculated using the
future salaries of plan participants. As such, an increase in the salaries of the plan
participants will increase the present value of the defined benefit obligation.
The actuarial valuations of the present value of the defined benefit obligation were carried out
by qualified actuaries. The significant assumptions used for the purposes of the actuarial
valuations were as follows:
Discount rates
Expected rates of salary increase
December 31
2020
0.50%
2.25%
2019
0.75%
2.25%
If possible reasonable change in each of the significant actuarial assumptions will occur and
all other assumptions will remain constant, the present value of the defined benefit obligation
will increase (decrease) as follows:
Discount rates
0.5% increase
0.5% decrease
Expected rates of salary increase
0.5% increase
0.5% decrease
December 31
2020
2019
$ (59,752)
$ 63,935
$ 61,541
$ (58,145)
$ (64,814)
$ 69,431
$ 66,962
$ (63,183)
221
Financial Information
The above sensitivity analysis may not be representative of the actual changes in the present
value of the defined benefit obligation as it is unlikely that the changes in assumptions will
occur in isolation of one another as some of the assumptions may be correlated.
22. EQUITY
Share capital
Ordinary shares
Capital surplus
Retained earnings
Others
Non-controlling interests
a. Share capital
Ordinary shares
Number of shares authorized (in thousands)
Amount of authorized shares
Number of issued and fully paid shares (in thousands)
Amount of issued shares
December 31
2020
2019
$ 32,260,002 $ 33,260,002
15,690,406 16,055,238
36,330,187 31,179,511
(3,110,410)
1,181,773
187,640
2,812,595
$ 87,280,830 $ 78,566,114
December 31
2020
2019
6,500,000
6,500,000
$ 65,000,000 $ 65,000,000
3,326,000
$ 32,260,002 $ 33,260,002
3,226,000
As of December 31, 2019, the amount of WLC’s paid-in capital was NT$33,260,002
thousand, consisted of 3,326,000 thousand shares at par value of NT$10.
WLC cancelled 100,000 thousand treasury shares in August 2020 and November 2020. As of
December 31, 2020, the amount of WLC’s paid-in capital was NT$32,260,002 thousand,
consisted of 3,260,002 thousand shares at par value of NT$10.
As of December 31, 2020, two thousand GDRs of WLC were traded on the Luxemburg Stock
Exchange. The number of ordinary shares represented by the GDRs was 22 thousand shares
(one GDR represents 10 ordinary shares).
b. Capital surplus
Issuance of ordinary shares
Share of changes in capital surplus of associates
Treasury share transactions
December 31
2020
2019
$
9,867,654 $ 10,173,533
331,766
2,448,303
(Continued)
467,070
2,254,074
222
December 31
2020
2019
Gain on disposal of property, plant and equipment
Others
2,074,231
1,027,377
2,074,231
1,027,405
$ 15,690,406 $ 16,055,238
(Concluded)
The premium from shares issued in excess of par (share premium from issuance of ordinary
shares, conversion of bonds and treasury share transactions) and donations may be used to
offset a deficit; in addition, when the Group has no deficit, such capital surplus may be
distributed as cash dividends or transferred to share capital (limited to a certain percentage of
the Group’s capital surplus and to once a year).
The capital surplus arises from changes in capital surplus of subsidiaries accounted for using
the equity method, employee share options and share warrants may not be used for any
purpose.
c. Retained earnings and dividend policy
Based on WLC’s Articles of Incorporation, 10% of WLC’s annual earnings, net of tax and
any deficit, should be appropriated as legal reserve until this reserve equals WLC’s paid-in
capital. Also, WLC appropriated earnings to special reserve based on the applicable laws and
regulations. Any remaining balance of distributable earnings resolved by the shareholders will
be retained partially by WLC and will be distributed to shareholders. WLC shall reserve no
lesser than 40% of the balance amount as shareholder’s profit after offsetting its loss and tax
payments in the previous year, capital reserve and special reserve. The profits shall be
distributed in cash or in form of shares; Cash dividends shall not be lesser than 70% of the
total dividends.
An appropriation of earnings to a legal reserve shall be made until the legal reserve equals
WLC’s paid-in capital. The legal reserve may be used to offset any deficits. If WLC has no
deficit and the legal reserve has exceeded 25% of WLC’s paid-in capital, the excess may be
transferred to capital or distributed in cash.
Items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No.
1030006415 issued by the FSC and in the directive titled “Questions and Answers for Special
Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed
from a special reserve by WLC.
The appropriation of earnings for 2019 and 2018, which were approved in the shareholders’
meeting on May 29, 2020 and May 24, 2019, respectively, were as follows:
Appropriation of Earnings
Dividends Per Share (NT$)
2019
2018
Legal reserve
Special reserve
Cash dividends
$
314,968
(932,728)
1,663,000
$ 1,175,678
1,330,888
3,991,200
$ 1,045,240
$ 6,497,766
2019
$
-
-
0.5
2018
$
-
-
1.2
223
Financial Information
The appropriation of earnings for 2020, which were proposed by WLC’s board of directors on
February 26, 2021, were as follows:
Legal reserve
Special reserve
Cash dividends
Appropriation
of Earnings
Dividends Per
Share (NT$)
$
681,368
(398,160)
3,088,200
$ 3,371,408
$
-
-
0.9
The appropriations of earnings for 2020 are subject to the resolution of the shareholders in
their meeting to be held on May 28, 2021.
d. Special reserve
Special reserve
$ 3,110,410
$ 4,043,138
Information regarding any changes to the above special reserve was as follows:
December 31
2020
2019
Balance at January 1
Appropriations
December 31
2020
2019
$ 4,043,138
(932,728)
$ 2,712,250
1,330,888
Balance at December 31
$ 3,110,410
$ 4,043,138
e. Other equity items
1) Exchange differences on translation of the financial statements of foreign operations
Balance at January 1
Share from subsidiaries and associates accounted
For the Year Ended December 31
2020
2019
$ (5,546,359)
$ (3,567,540)
for using the equity method
(358,776)
(1,978,819)
Balance at December 31
$ (5,905,135)
$ (5,546,359)
Exchange differences relating to the translation of the results and net assets of the Group’s
foreign operations from their functional currencies to the Group’s presentation currency
(the New Taiwan dollar) were recognized directly in other comprehensive income and
accumulated in the foreign currency translation reserve. Exchange differences previously
accumulated in the foreign currency translation reserve were reclassified to profit or loss
on the disposal of the foreign operation.
224
2) Unrealized valuation gain (loss) on financial assets at FVOCI
For the Year Ended December 31
2020
2019
Balance at January 1
Unrealized gain - equity instruments
Share from associates accounted for using the
equity method
$ 2,435,949
1,258,198
(474,446)
$
1,572,352
2,398,628
1,338,043
Balance at December 31
$ 6,092,775
$ 2,435,949
3) Cash flow hedges
Balance at January 1
Transferred to initial carrying amount of hedged
items
Balance at December 31
For the Year Ended December 31
2020
2019
$
$
-
-
-
$ (1,151)
1,151
$
-
The cash flow hedging reserve represents the cumulative effective portion of gains or
losses arising from changes in fair value of hedging instruments entered into for cash flow
hedges. The cumulative gain or loss arising from changes in fair value of the hedging
instruments that was recognized and accumulated under the heading of cash flow hedging
reserve will be reclassified to profit or loss only when the hedged transaction affects the
profit or loss, or included as a basis adjustment to the non-financial hedged item.
f. Treasury shares
Treasury share transactions for the year ended December 31, 2020 were summarized as
follows:
Purpose of
Buy-back
To restore credibility
and preserve
shareholders’
rights
Number of
Shares at
January 1,
2020
Increase
During the
Period
Decrease
During the
Period
Number of
Shares at
December 31,
2020
-
100,000,000
100,000,000
-
Article 28.2 of the Securities and Exchange Act stipulates that the number of treasury shares
held by WLC should not exceed 10% of the number of shares issued and that the cost of
acquisition of treasury shares should not exceed the total of retained earnings, additional
paid-in capital and other realized capital surplus. In addition, WLC shall neither pledge
treasury shares nor exercise shareholders’ rights on these shares, such as rights to dividends
and to vote.
225
Financial Information
23. OPERATING REVENUE
Sales revenue
Sales of real estate
Revenue from the rendering of services
Construction contract revenue
Rental income
Other revenue
For the Year Ended December 31
2020
2019
$ 105,217,487 $ 131,991,667
571,573
224,120
485,431
1,193,894
337,720
5,495,319
160,465
43,350
1,201,247
428,735
$ 112,546,603 $ 134,804,405
24. NET PROFIT (LOSS) FROM CONTINUING OPERATIONS
Non-operating Income and Expense - Gain (Loss) on Disposal of Investment
Loss on disposal of investments - commodity futures
Gain on disposal of subsidiaries (Note 27)
Gain (loss) on disposal of investments - foreign exchange
forward contracts
Gain on disposal of investments - exchange rate swap
contracts
Loss on disposal of investments - options
For the Year Ended December 31
2020
2019
$
(217,842)
-
$ (1,287,899)
2,145,199
142,504
(34,418)
2,349
(2,938)
-
-
$
(75,927)
$
822,882
Non-operating Income and Expense - Impairment Loss Reversed (Recognized)
Investments accounted for using the equity method
Property, plant and equipment
Others (value increment tax)
For the Year Ended December 31
2020
2019
$
$
-
691
17
$ (1,678,639)
(1,790)
(146)
674
$ (1,680,575)
226
Employee Benefits Expense, Depreciation and Amortization
For the Year Ended December 31, 2020
Operating
Costs
Operating
Expenses
Non-operating
Expenses and
Losses
Total
Short-term employment
benefits
Post-employment benefits $
$
Other employee benefits
$ 3,132,714
103,937
410,065
Depreciation
Property, plant and
equipment
Right-of-use assets
Investment properties
$ 1,839,259
31,990
164,050
$ 2,035,299
Amortization
$
5,664
$ 2,254,057
75,465
$
232,115
$
$
$
$
261,784
99,426
5,926
367,136
29,821
$
$
$
$
$
$
- $ 5,386,771
179,402
- $
642,180
- $
3,078 $ 2,104,121
131,416
169,976
-
-
3,078 $ 2,405,513
- $
35,485
For the Year Ended December 31, 2019
Operating
Costs
Operating
Expenses
Non-operating
Expenses and
Losses
Total
Short-term employment
benefits
Post-employment benefits $
$
Other employee benefits
$ 3,606,413
218,489
431,794
Depreciation
Property, plant and
equipment
Right-of-use assets
Investment properties
$ 1,663,677
19,296
200,125
$ 1,883,098
Amortization
$
3,378
$ 2,123,478
134,462
$
265,680
$
$
$
$
179,015
88,153
7,827
274,995
7,845
$
$
$
$
$
$
- $ 5,729,891
352,951
- $
697,474
- $
5,362 $ 1,848,054
107,449
207,952
-
-
5,362 $ 2,163,455
- $
11,223
According to WLC’s Articles, WLC accrues compensation of employees and remuneration of
directors and supervisors at rates of no less than 1% and no higher than 1%, respectively, of net
profit before income tax, compensation of employees, and remuneration of directors and
supervisors. For the years ended December 31, 2020 and 2019, the compensation of employees
amounted to NT$68,500 thousand and NT$48,500 thousand, respectively, and the remuneration
of directors and supervisors amounted to NT$34,050 thousand and NT$21,000 thousand,
respectively. The compensation of employees and the remuneration of directors and supervisors
for the years ended December 31, 2020 and 2019 were approved by the Group’s board of
directors on February 26, 2021 and February 27, 2020, respectively.
227
Financial Information
Material differences between such estimated amounts and the amounts proposed by the board of
directors on or before the date the annual consolidated financial statements are authorized for
issue are adjusted in the year the compensation and remuneration were recognized. If there is a
change in the proposed amounts after the annual consolidated financial statements are authorized
for issue, the differences are recorded as a change in the accounting estimate.
The employees’ compensation and the remuneration of directors and supervisors for the years
ended December 31, 2019 and 2018 resolved by WLC’s board of directors on February 27, 2020
and February 22, 2019, respectively, and the respective amounts were recognized in the
consolidated financial statements.
Information on the employees’ compensation and remuneration of directors and supervisors
resolved by WLC’s board of directors for 2021 and 2020 is available at the Market Observation
Post System website of the Taiwan Stock Exchange.
25. INCOME TAXES RELATING TO CONTINUING OPERATIONS
a. The major components of tax expense were as follows:
Current tax
In respect of the current year
Income tax on unappropriated earnings
Adjustments for prior year
Land value increment tax
Others
Deferred tax
In respect of the current year
Adjustments for prior year
For the Year Ended December 31
2020
2019
$ 1,155,082
48,843
(5,279)
1,375,227
16,218
2,590,090
$
955,935
418,342
(151,896)
75,742
-
1,298,123
(280,516)
(64,710)
(345,226)
(377,663)
36,483
(341,180)
Income tax expense recognized in profit or loss
$ 2,244,864
$
956,943
A reconciliation of accounting profit and income tax expense is as follows:
For the Year Ended December 31
2020
2019
Profit before tax from continuing operations
$ 9,250,665
$ 4,740,267
Income tax expense calculated at the statutory rate
Equity in investees’ net gain
Foreign dividend income
Tax-exempt dividend income
(Loss) gain on disposal of equity investments
Loss on investments
Tax-exempt grants
Others
$ 2,961,094
(1,008,704)
-
(21,701)
(560,411)
-
(3,880)
(344,580)
$ 1,112,669
(768,494)
6,529
(26,125)
7,370
(164,000)
-
(59,418)
(Continued)
228
For the Year Ended December 31
2020
2019
Unrecognized loss carryforwards/deductible temporary
differences
Adjustments for prior years’ tax
Effect of tax rate changes
Income tax on unappropriated earnings
Land value increment tax
(131,035)
(69,989)
48,843
1,375,227
Income tax expense recognized in profit or loss
$ 2,244,864
$
469,741
(115,413)
418,342
75,742
956,943
(Concluded)
In July 2019, the president of the ROC announced the amendments to the statute for Industrial
Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter
that are reinvested in the construction or purchase of certain assets or technologies are allowed
as deduction when computing the income tax on unappropriated earnings. When calculating
the tax on unappropriated earnings, the Group only deducts the amount of the unappropriated
earnings that has been reinvested in capital expenditure.
In addition, in accordance with Rule No. 10904550440 issued by the Ministry of Finance of
Taiwan (MOF), the Group has deducted the amount of dividends distributed in 2020
attributable to the increase in the beginning retained earnings for 2018 as a result of initial
adoption of IFRS 9 and IFRS 15 when calculating the tax on unappropriated earnings for
2018.
b. Current tax assets and liabilities
Current tax assets
Tax refund receivable (recorded under other
non-current assets - others)
Current tax liabilities
Income tax payable
c. Deferred tax assets and liabilities
Deferred tax assets
Loss carryforwards
Pension expense not currently deductible
Provision for devaluation loss on obsolete and
slow-moving inventories
Provision for impairment loss on idle assets
Unrealized gross profit from intercompany
transactions
December 31
2020
2019
$
47,864
$
976
$ 4,557,761
$ 4,587,562
December 31
2020
2019
$
300,951
32,000
$
34,564
17,000
6,489
34,097
58,000
94,626
18,000
2,474
(Continued)
229
Financial Information
Provision for devaluation loss on long-term
investments
Difference between financial and tax accounting of
the depreciation of property, plant and equipment
Prepaid expense
Others
Deferred income tax liabilities
Difference between financial and tax accounting of
the depreciation of property, plant and equipment
Reserve for land value increment tax
Others
Deferred tax assets - non-current
Deferred tax liabilities - non-current
December 31
2020
2019
547,000
552,000
400
1,173,984
316,157
121
1,031,313
257,547
(60,930)
(173,329)
19,802
(13,589)
(148,006)
(17,721)
$ 2,214,088
$ 1,868,862
$ 2,428,545
(214,457)
$ 2,048,176
(179,314)
$ 2,214,088
$ 1,868,862
(Concluded)
d. Deductible temporary differences and unused loss carryforwards for which no deferred tax
assets have been recognized in the consolidated balance sheets were as follows:
Loss Carryforwards
Expiry in 2020
Expiry in 2021
Expiry in 2022
Expiry in 2023
Expiry in 2024
Expiry in 2025
December 31
2020
2019
$
$
-
643,157
77,524
109,241
90,064
3,937
293,031
633,209
111,545
123,151
134,536
-
$
923,923
$ 1,295,472
e. The Group’s tax loss carryforwards as of December 31, 2020 were as follows:
Expiry Year
2021
2022
2023
2024
2025
2029
2030
230
Tax Loss
Carryforwards
$
649,914
77,524
127,316
90,064
16,037
84
263,935
$ 1,224,874
f. Except for 2017, WLC’s income tax returns through 2017 had been examined and cleared by
the tax authorities.
26. EARNINGS PER SHARE
For the Year Ended December 31
2020
2019
Amounts
(Numerator)
Net Profit for
the Year
Attributable to
Owners of
WLC
Number of
Shares
(Denominator)
(In Thousands)
Earnings Per
Share (In
Dollars)
Net Profit for
the Year
Attributable to
Owners of
WLC
Amounts
(Numerator)
Net Profit for
the Year
Attributable to
Owners of
WLC
Earnings Per
Share (In
Dollars)
Net Profit for
the Year
Attributable to
Owners of
WLC
Number of
Shares
(Denominator)
(In Thousands)
Basic earnings per share
Net income
Effect of potentially
$ 6,691,149
3,276,128
$
2.04
$
3,149,679
3,326,000
$
0.95
dilutive ordinary shares
Diluted earnings per
share
-
4,100
-
4,136
Employee bonus
$ 6,691,149
3,280,228
$
2.04
$
3,149,679
3,330,136
$
0.95
27. DISPOSAL OF SUBSIDIARIES
In May 2019, the Group entered into a sale agreement with Zhuhai Gree Electric Enterprise Co.,
Ltd. for the disposal of the Group’s equity interest in Nanjing Walsin Metal Co., Ltd. On May 27,
2019, the Group’s representatives (director and supervisor) resigned from Nanjing Walsin Metal
Co., Ltd. and the Group ceased to have control over Nanjing Walsin Metal Co., Ltd.
a. Consideration received from disposals
Consideration received in cash and cash equivalents
Sales proceeds receivable (recorded under other receivables)
Total consideration received
b. Analysis of assets and liabilities on the date control was lost
Current assets
Cash and cash equivalents
Notes receivable
Trade receivables
Inventories
Other receivables
Other current assets
Nanjing Walsin
Metal Co., Ltd.
$
97,528
6,553,570
$ 6,651,098
$ 1,321,694
148,312
1,442,433
1,656,511
330,610
26,392
(Continued)
231
Financial Information
Non-current assets
Property, plant and equipment
Right-of-use assets
Refundable deposits
Other non-current assets
Total assets
Current liabilities
Financial liabilities at fair value through profit or loss - current
Notes payable and trade payables
Other payables
Other current liabilities
Non-current liabilities
Other non-current liabilities
Total liabilities
Net assets disposed
c. Gain on disposals of subsidiaries
Consideration received from disposal of equity shares
Costs of disposal
Non-controlling interests
Carrying amount of equity investment at the date of disposal
Effect of foreign currency exchange
Gain on disposals
205,870
42,551
3,108
59,982
$ 5,237,463
$
75,838
169,473
126,421
153,582
6,777
$
532,091
$ 4,705,372
(Concluded)
$ 6,651,098
(3,335)
262,777
(4,705,372)
(59,969)
$ 2,145,199
The gain on disposal of equity shares was recorded under gain on disposal of investment for
the year ended December 31, 2019.
d. Net consolidated cash inflow on the date control was lost
Consideration received from disposal of equity shares
Less: Receivables from disposal of investment at the end of the period
(recorded under other receivables)
Less: Cash and cash equivalent balances at the date of disposal
Add: Advance deposits (recorded under other current liabilities)
Effect on foreign currency exchange from loss of control
Net cash inflow on disposals of subsidiaries
$ 6,651,098
(6,553,570)
(1,321,694)
4,478,042
(16,844)
$ 3,237,032
The registration of the equity transaction had been completed on August 9, 2019. As of
December 31, 2019, the Group received a payment of RMB978,685 thousand (NT$4,205,732
thousand) from the disposal of equity interest in Nanjing Walsin Metal Co., Ltd.; however,
due to the deposit requirement of equity transaction, it was accounted for under other current
liabilities as of December 31, 2019. The sales proceeds receivable were collected and the
advance deposits were released on April 29, 2020.
232
28. OPERATING LEASE ARRANGEMENTS
Operating leases relate to leases of investment properties owned by the Group with lease terms
between 5 and 10 years, with an option to extend for another 10 years. All operating lease
contracts contain market review clauses in the event that the lessees exercise their options to
renew. The lessees do not have bargain purchase options to acquire the assets at the expiry of the
lease periods.
As of December 31, 2020 and 2019, deposits received under operating leases amounted to
NT$303,187 thousand and NT$303,648 thousand, respectively (recorded under other non-current
liabilities).
As of December 31, 2020, the Group’s future minimum lease receivables on non-cancelable
operating lease commitments are as follows:
2021
2022-2026
After 2026
29. CAPITAL MANAGEMENT
$ 1,306,730
3,088,547
202,863
$ 4,598,140
The Group’s capital management objective is to ensure that it has the necessary financial
resources and operational plan so that it can cope with the next 12 months working capital
requirements, capital expenditures, debt repayments and dividends spending.
The capital structure of the Group consists of net debt (borrowings offset by cash and cash
equivalents) and equity attributable to owners of the Group (comprising issued capital, reserves,
retained earnings and other equity).
Key management personnel of the Group review the capital structure on a quarterly basis. As part
of this review, the key management personnel, consider the cost of capital and the risks associated
with each class of capital. Based on recommendations of the key management personnel, in order
to balance the overall capital structure, the Group may adjust the amount of dividends paid to
shareholders, the number of new shares issued or repurchased, and/or the amount of new debt
issued or existing debt redeemed.
30. FINANCIAL INSTRUMENTS
a. Fair value of financial instruments that are not measured at fair value
The management considers the carrying amounts of financial assets and financial liabilities
recognized in the consolidated financial statements as approximates of the fair values.
b. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy
233
Financial Information
December 31, 2020
Level 1
Level 2
Level 3
Total
Financial assets at FVTPL
Derivatives not designated as
hedging instruments
$
Corporate bonds
Derivatives financial assets
for hedging
73,329
-
$
-
-
$
-
5,683,859
$
73,329
5,683,859
-
8,282
-
8,282
$
73,329
$
8,282
$ 5,683,859
$ 5,765,470
Financial assets at fair value
FVOCI
Investments in equity
instruments
Listed securities in the
ROC
Unlisted securities
Financial liabilities at
FVTPL
Derivatives not designated as
$ 6,475,588
-
$ 6,475,588
$
$
-
-
-
$
$
-
435,056
$ 6,475,588
435,056
435,056
$ 6,910,644
hedging instruments
$
-
$
8,374
$
$
8,374
December 31, 2019
Financial assets at FVTPL
Derivatives not designated as
Level 1
Level 2
Level 3
Total
hedging instruments
$
69,510
$
285
$
-
$
69,795
Financial assets at fair value
FVOCI
Investments in equity
instruments
Listed securities in the
ROC
Unlisted securities
234
$ 4,729,384
-
$ 4,729,384
$
$
-
-
-
$
$
-
593,981
$ 4,729,384
593,981
593,981
$ 5,323,365
(Continued)
Level 1
Level 2
Level 3
Total
Financial liabilities at
FVTPL
Derivatives not designated as
hedging instruments
$
Derivative financial liabilities
for hedging
$
-
-
-
$
$
6,026
14,346
20,372
$
$
-
$
6,026
-
14,346
-
$
20,372
(Concluded)
2) There were no transfers between Levels 1, 2 and 3 for the years ended December 31, 2020
and 2019.
3) Financial assets which belong to Level 3 are recognized in other comprehensive income -
change in fair value, and there are no other adjustment.
4) Valuation techniques and inputs applied for Level 2 fair value measurement
Financial Instruments
Valuation Techniques and Inputs
Derivatives - foreign
Discounted cash flow. Future cash flows are estimated
exchange forward contracts
based on observable forward exchange rates at the end
of the reporting period and contract forward rates,
discounted at a rate that reflects the credit risk of
various counterparties.
Derivatives - exchange rate
Discounted cash flow. Future cash flows are estimated
swap contracts
based on observable forward exchange rates at the end
of the reporting period and contract forward rates,
discounted at a rate that reflects the credit risk of
various counterparties.
5) Valuation techniques and inputs applied for Level 3 fair value measurement
Financial Instruments
Valuation Techniques and Inputs
Unlisted equity securities
Market approach. Fair values are determined based on
Derivatives - options
observable and comparable companies’ fair values at
the end of the reporting period, adjusted by price
earnings ratio and price-to-book ratio of the investees.
Option pricing models. Fair values are determined using
option pricing models where significant unobservable
input is historical volatility.
Hybrid instruments -
corporate bonds
Discounted cash flow. Future cash flows are estimated
based on contract rates and discounted at a rate that
reflects the credit risk of various counterparties.
235
Financial Information
c. Categories of financial instruments
Financial assets
Financial assets at amortized cost
Cash and cash equivalents
Contract assets - current
Notes receivable and trade receivables (including
related parties)
Finance lease receivables (current and non-current)
Other receivables
Other financial assets
Refundable deposits
Financial assets at amortized cost - current
Derivative financial assets for hedging
Financial assets at FVTPL (current and non-current)
Financial assets at FVTOCI (current and non-current)
Financial liabilities
Financial liabilities at FVTPL (current and
non-current)
Derivative financial liabilities for hedging (current and
non-current)
Financial liabilities at amortized cost
Short-term borrowings
Notes payable and trade payables
Other payables
Long-term borrowings (including current portion)
Deposits received (accounted for as other current
and non-current liabilities)
d. Financial risk management objectives and policies
December 31
2020
2019
$ 11,944,408
4,460,992
$ 11,753,006
4,014,672
10,517,263
776,713
887,091
705,277
221,314
1,315,970
8,282
5,757,188
6,910,644
11,214,092
830,991
8,076,664
317,733
183,291
1,470,571
-
69,795
5,323,365
8,374
-
6,026
14,346
6,591,019
7,729,729
5,143,921
37,569,229
12,457,481
7,310,226
4,901,323
23,493,411
532,530
5,168,697
The Group’s major financial instruments included equity and investments, borrowings, trade
receivables, and trade payables. The Group’s corporate treasury function provides services to
the business, coordinates access to domestic and international financial markets, monitors and
manages the financial risks relating to the operations of the Group through internal risk reports
which analyze exposures by degree and magnitude of risks. These risks include market risk,
credit risk and liquidity risk.
The Group seeks to minimize the effects of these risks by using derivative financial
instruments to hedge risk exposures. The use of financial derivatives is governed by the
Group’s policies approved by the board of directors, which provides written principles on
foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and
non-derivative financial instruments, and investments of excess liquidity. Compliance with
policies and exposure limits is reviewed by the internal auditors on a continuous basis. The
Group did not enter into or trade financial instruments for speculative purposes.
236
1) Market risk
The Group’s activities exposed is primarily to the financial risks of changes in foreign
currency exchange rates and interest rates. The Group entered into foreign exchange
forward contracts and interest rate swaps contracts to hedge foreign currency risk and
interest rate risk.
There had been no change to the Group’s exposure to market risks or the manner in which
these risks were managed and measured.
a) Foreign currency risk
The Group had foreign currency denominated sales and purchases, which exposed the
Group to foreign currency risk. Exchange rate exposures were managed within
approved policy parameters utilizing foreign exchange forward contracts.
It is the Group’s policy to negotiate the terms of the hedge derivatives to match the
terms of the hedged item to maximize hedge effectiveness.
The carrying amounts of the Group’s foreign currency denominated monetary assets
and monetary liabilities (including those eliminated on consolidation) at the end of the
reporting period were as follows:
Assets
U.S. dollar
Japanese yen
Euro
Singapore dollar
Hong Kong dollar
Australian dollar
Malaysian ringgit
Indonesian rupiah
Liabilities
U.S. dollar
Japanese yen
Euro
Malaysian ringgit
December 31
2020
2019
$
7,361,149
27,663
487,961
-
8,771
12,493
713,350
111,268
$ 4,820,850
30,990
350,497
2,091
9,444
1,946
21,814
16,418
14,723,112
1,108
159
48,113
10,306,467
-
-
54,505
237
Financial Information
The carrying amounts of the Group’s derivatives exposed to foreign currency risk at
the end of the reporting period were as follows:
Assets
U.S. dollar
Euro
Liabilities
U.S. dollar
Euro
December 31
2020
2019
$
8,661,457
-
$
252,948
219,193
8,951,264
317,514
11,092,136
-
Sensitivity analysis
The Group was mainly exposed to the U.S. dollars.
The following table details the Group’s sensitivity to a 1% increase and decrease in
the New Taiwan dollar (functional currency) against the relevant foreign currencies.
The sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts the translation at the end of the reporting period for a 1%
change in foreign currency rates.
Profit or loss
b) Interest rate risk
U.S. Dollar Impact
For the Year Ended December 31
2020
2019
$ (95,784)
$ (163,248)
The Group was exposed to interest rate risk because entities in the Group borrow
funds at both fixed and floating interest rates.
The carrying amount of the Group’s financial assets and financial liabilities with
exposure to interest rates at the end of the reporting period were as follows:
Cash flow interest rate risk
Financial assets
Financial liabilities
Sensitivity analysis
December 31
2020
2019
$
1,315,970
44,160,248
$ 1,470,571
35,950,892
The sensitivity analysis below was determined based on the Group’s exposure to
interest rates for financial instruments at the end of the year. For floating rate
liabilities, the analysis was prepared assuming the amount of each liability outstanding
238
at the end of the year was outstanding for the whole year.
If interest rates had been 100 basis points, higher and all other variables were held
constant, the Group’s pre-tax profit for the years ended December 31, 2020 and 2019
would have decreased by NT$428,443 thousand and NT$344,803 thousand,
respectively.
Hedge accounting
For the year ended December 31, 2020
The Group’s hedging strategy is to enter into exchange rate swap contracts to avoid
exchange rate exposure on 100% of the fair value of its foreign currency denominated
receipts and payments and to manage exchange rate exposure. Those transactions are
designated as fair value hedges. Adjustments are recognized directly in profit or loss
and are presented as hedged items on the consolidated statements of comprehensive
income.
Hedging
Instrument
Currency
Notional
Amount
Fair value hedges
Maturity
Forward Price
Balance Sheet
Asset
Liability
Effectiveness
Line Item in
Carrying Amount
Calculating Hedge
Change in Value Used for
Exchange rate swap
USD to NTD
USD21,000/
2021.1.13
$
590,059
Financial liabilities
$
contracts
NTD607,457
for hedging
Exchange rate swap
USD to NTD
USD30,000/
2021.1.13
842,940
Financial liabilities
contracts
NTD867,795
for hedging
Exchange rate swap
USD to NTD
USD30,000/
2021.1.13
842,940
Financial liabilities
contracts
NTD867,810
for hedging
Exchange rate swap
USD to NTD
USD21,000/
2021.1.13
590,058
Financial liabilities
contracts
NTD607,467
for hedging
Exchange rate swap
USD to NTD
USD30,000/
2021.1.13
842,940
Financial liabilities
contracts
NTD867,810
for hedging
Exchange rate swap
USD to NTD
USD27,000/
2021.1.13
758,646
Financial liabilities
contracts
NTD781,029
for hedging
Exchange rate swap
USD to NTD
USD30,000/
2021.1.13
842,940
Financial liabilities
contracts
NTD867,810
for hedging
Exchange rate swap
USD to NTD
USD11,000/
2021.1.13
309,078
Financial liabilities
contracts
NTD318,197
for hedging
-
-
-
-
-
-
-
-
Exchange rate swap
USD to RMB
USD21,000/
2021.1.15
RMB
145,695
Financial assets for
RMB
4,436
contracts
RMB141,259
hedging
Exchange rate swap
USD to RMB
USD80,000/
2021.1.15
RMB
555,027
Financial assets for
RMB
16,899
contracts
RMB538,128
hedging
Exchange rate swap
USD to RMB
USD21,000/
2021.1.15
RMB
145,669
Financial assets for
RMB
4,423
contracts
RMB141,246
hedging
Exchange rate swap
USD to RMB
USD40,000/
2021.1.15
RMB
277,466
Financial assets for
RMB
8,426
contracts
RMB269,040
hedging
Exchange rate swap
USD to RMB
USD27,000/
2021.1.15
RMB
187,300
Financial assets for
RMB
5,693
contracts
RMB181,607
hedging
$
(17,398 )
$
(24,855 )
(24,870 )
(17,409 )
(24,870 )
(22,383 )
(24,870 )
(9,119 )
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations
resulting in a financial loss to the Group. At the end of the year, the Group’s maximum
exposure to credit risk, which would cause a financial loss to the Group due to the failure
of the counterparty to discharge its obligation and due to the financial guarantees provided
by the Group, could be equal to the total of the following:
a) The carrying amount of the respective recognized financial assets as stated in the
balance sheets; and
b) The maximum amount the entity would have to pay if the financial guarantee is called
upon, irrespective of the likelihood of the guarantee being exercised.
239
Financial Information
The Group adopted a policy of only dealing with creditworthy counterparties and
obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of
financial loss from defaults. The Group’s exposure and the credit ratings of its
counterparties are continuously monitored, and the aggregate value of transactions
concluded is spread amongst the approved counterparties. Also, credit exposure is
controlled by setting credit limits that are reviewed and approved annually.
In order to minimize credit risk, the management of the Group has delegated a team
responsible for the determination of credit limits, credit approvals and other monitoring
procedures to ensure that follow-up action is taken to recover overdue receivables. In
addition, the Group reviews the recoverable amount of each individual trade receivable at
the end of the reporting period to ensure that adequate impairment losses are made for
irrecoverable amounts. In this regard, the directors of the Group consider that the Group’s
credit risk was significantly reduced.
3) Liquidity risk
The Group manages liquidity risk by monitoring and maintaining a level of cash and cash
equivalents deemed adequate to finance the Group’s operations and mitigate the effects of
fluctuations in cash flows. In addition, management monitors the utilization of bank
borrowings and ensures compliance with loan covenants.
a) The following table details the Group’s remaining contractual maturities for its
non-derivative financial liabilities with agreed upon repayment periods.
December 31, 2020
Non-derivative
financial liabilities
Variable interest rate
liabilities
Lease liabilities
Non-interest bearing
December 31, 2019
Non-derivative
financial liabilities
Variable interest rate
liabilities
Lease liabilities
Non-interest bearing
1 Year
1-2 Years
2-5 Years
5+ Years
Total
$ 12,753,419
110,061
13,262,780
$ 18,144,584
69,523
28,216
$ 12,124,475
129,031
115,184
$ 1,137,770
153,615
-
$ 44,160,248
462,230
13,406,180
$ 26,126,260
$ 18,242,323
$ 12,368,690
$ 1,291,385
$ 58,028,658
1 Year
1-2 Years
2-5 Years
5+ Years
Total
$ 19,021,677
90,125
17,220,360
$ 7,162,400
76,861
26,850
$ 9,766,815
87,691
119,567
$
-
129,181
13,469
$ 35,950,892
383,858
17,380,246
$ 36,332,162
$ 7,266,111
$ 9,974,073
$
142,650
$ 53,714,996
240
b) The Group’s derivative financial instruments with agreed upon settlement dates were
as follows:
December 31, 2020
On Demand
or Less Than
1 Month
1-3 Months
3 Months to
1 Year
1-5 Years
Total
Net settled
Commodity
futures
contracts
Exchange
forward
contracts
Exchange rate
swap
contracts
$
(617)
$
62,663
$
11,283
$
- $ 73,329
(8,020)
(44)
(310)
-
(8,374)
8,282
-
-
-
8,282
$
(355)
$
62,619
$
10,973
$
- $ 73,237
December 31, 2019
On Demand
or Less Than
1 Month
1-3 Months
3 Months to
1 Year
1-5 Years
Total
Net settled
Commodity
futures
contracts
Exchange
forward
contracts
Exchange rate
swap
contracts
$ 36,980
$
32,803
$
(273)
$
- $ 69,510
(120)
1,941
(7,847)
-
(6,026)
(8,689)
(5,372)
-
-
(14,061)
$ 28,171
$
29,372
$
(8,120)
$
- $ 49,423
241
Financial Information
e. Transfers of financial assets
Factored trade receivables that are not overdue at the end of the year were as follows:
Proceeds
from
Receivables
Factoring
Amount
Reclassified
to Other
Receivables
Advances
Received -
Unused
Advances
Received -
Used
Counterparty
December 31, 2020
Annual
Interest
Rates on
Advances
Received
(Used) (%)
CTBC bank
$ 137,121
$
21,266
US$ 2,700
December 31, 2019
CTBC bank
162,569
13,636
US$ 2,700
-
-
-
-
31. TRANSACTIONS WITH RELATED PARTIES
Balances and transactions between WLC and its subsidiaries, which are related parties of WLC,
have been eliminated on consolidation and are not disclosed in this note. Details of transactions
between the Group and other related parties are disclosed as below:
a. Related party name and category
Related Party Name
Related Party Category
Associate
Winbond Electronics Corp.
Associate
Walsin Technology Corp.
Associate
Walton Advanced Engineering, Inc.
Associate
Chin-Xin Investment Co., Ltd.
Changzhou China Steel Precision Materials Co., Ltd. Associate
Associate
Hangzhou Walsin Power Cable & Wire Co., Ltd.
Associate
Walsin Color Co., Ltd.
Associate
Prosperity Dielectrics Co., Ltd.
Associate
Nuvoton Technology Corporation
Substantive related party
HannStar Display Corp.
Substantive related party
Kuong Tai Metal Industrial Co., Ltd.
Substantive related party
HannStar Board Corp.
Substantive related party
Global Brands Manufacture Ltd.
Substantive related party
Info-Tek Corp.
b. Sales
Associates
Other related parties
242
For the Year Ended December 31
2020
2019
$
8,782
903,376
$ 11,336
958,959
$ 912,158
$ 970,295
c. Rental income
Associates
Other related parties
d. Purchases of goods
Associates
Other related parties
e. Administrative expenses
Associates
Other related parties
For the Year Ended December 31
2020
2019
$
44,514
993
$ 41,765
12,355
$
45,507
$ 54,120
For the Year Ended December 31
2020
2019
$
30,100
3,891
$ 30,830
2,676
$
33,991
$ 33,506
For the Year Ended December 31
2020
2019
$
12,955
10,725
$ 11,232
12,311
$
23,680
$ 23,543
The stock registration matters of WLC and related parties were handled together. The related
fees allocated to the related parties were charged against general and administrative expenses.
f. Dividend income
HannStar Display Corp.
HannStar Board Corp.
Other related parties
g. Notes receivable
Associates
Other related parties
For the Year Ended December 31
2020
2019
$
-
106,722
2,890
$ 71,188
58,825
4,816
$ 109,612
$ 134,829
December 31
2020
2019
$
$
6,312
-
$
4,073
28,248
6,312
$ 32,321
243
Financial Information
h. Trade receivables
Associates
Other related parties
i. Notes payable
Associates
j. Trade payables
Associates
Other related parties
k. Other receivables (excluding financing provided)
Associates
Other related parties
l. Financing provided
December 31
2020
2019
$
-
39,054
$
330
26,393
$
39,054
$ 26,723
December 31
2020
2019
$
16,857
$ 14,837
December 31
2020
2019
-
684
684
$
$
721
116
837
December 31
2020
2019
9,945
2,598
$
8,784
2,549
$
$
$
$
12,543
$ 11,333
Financing provided for years ended December 31, 2020 and 2019 are as follows:
Related Parties
Hangzhou Walsin Power
Cable & Wire Co., Ltd.
December 31, 2020
Highest
Balance for
the Period
Ending
Balance
Interest
Income
Interest Rate
$ 350,663
$ 349,187
$
16,159 4.35%-4.79%
244
Related Parties
Hangzhou Walsin Power
Cable & Wire Co., Ltd.
m. Guarantee deposits
Associates
Other related parties
December 31, 2019
Highest
Balance for
the Period
Ending
Balance
Interest
Income
Interest Rate
$ 367,935
$ 343,786
$
17,402
4.79%
December 31
2020
2019
$
$
7,225
282
$
8,916
417
7,507
$
9,333
n. Disposal of property, plant and equipment (included investment properties)
For the Year Ended December 31
2020
2019
Price
Gain on
Disposals
Price
Gain on
Disposals
Prosperity Dielectrics
Co., Ltd.
$
295
$
295
$ 278,246
$ 246,877
In 2019, the Group disposed of investment properties to Prosperity Dielectrics Co., Ltd. The
valuation was arrived at by reference to market evidence of transaction prices for similar
properties and appraisal report.
o. Compensation of key management personnel
The remuneration of directors and key executives was as follows:
Short-term benefits
Post-employment benefits
December 31
2020
2019
$ 127,218
1,414
$ 117,365
17,594
$ 128,632
$ 134,959
The remuneration of directors and key executives, as determined by the remuneration
committee, was based on the performance of individuals and market trends.
245
Financial Information
32. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY
The following assets were provided as collaterals for bank borrowings, the deposits for
completing constructions and tariff guarantees for imported raw materials:
Refundable deposits (recorded under other financial assets -
current)
Restricted deposits (recorded under other financial assets -
current)
Pledged time deposits (recorded under other financial assets
- non-current)
Finance lease receivables - current
Finance lease receivables - non-current
Other non-current assets
December 31
2020
2019
$
79,977
$
45,962
538,468
271,771
8,730
56,128
720,585
52,406
8,595
54,278
776,713
85,958
$ 1,456,294
$ 1,243,277
33. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS
In addition to those disclosed in other notes, unrecognized commitments and significant
contingencies of the Group at December 31, 2020 and 2019 were as follows:
a. Outstanding letters of credit not reflected in the accompanying consolidated financial
statements as of December 31, 2020 and 2019 were as follows (in thousands):
U.S. Dollar
Japanese Yen
Euro
Renminbi
New Taiwan dollar
December 31
2020
2019
US$ 17,455
JPY 108,812
EUR 4,770
RMB 13,134
NT$ 82,347
US$ 20,182
JPY 94,529
EUR 5,277
RMB 13,134
NT$ 30,799
b. As of December 31, 2020, the outstanding standby letters of credit not reflected in the
accompanying financial statements amounted to approximately NT$392,784 thousand, US$30
thousand and RMB41,533 thousand. As of December 31, 2019, the outstanding standby
letters of credit not reflected in these consolidated financial statements amounted to
approximately NT$336,075 thousand, US$10 thousand and RMB59,390 thousand. As of
December 31, 2020 and 2019, tariff letters of credit amounted to approximately NT$434,000
thousand and NT$524,000 thousand, RMB3,500 thousand.
c. Non-cancelable copper plate procurement contracts with commodity trading companies such
as ERAMET and MITSUBISHI with total contract values of US$22,681 thousand and
US$23,404 thousand were in effect as of December 31, 2020 and 2019, respectively.
d. The Group entered into a contract for the construction of new plant and purchases of
machinery and equipment with PT. Plenty Bumi International and Eternal Tsingshan Group
Limited. As of December 31, 2020, unrecognized commitments amounted to US$115,670
246
thousand.
34. OTHER ITEMS
Due to the impact of the COVID-19 pandemic in 2020, some of the Group’s subsidiaries had
suspended operations in compliance with local regulatory guidelines. The Group’s operations
have returned to normal; therefore, there was no material impact on the Group’s going concern,
asset impairment and financing risk. With pandemic uncertainties, the Group will continue to
monitor the situation.
35. SIGNIFICANT EVENTS AFTER THE REPORTING PERIOD
On January 6, 2011, WLC issued 205,332,690 shares in exchange for 171,103,730 shares of
TECO Electric & Machinery Co., Ltd. WLC and TECO agreed to build a strategic alliance to
enhance competitiveness and cooperation in next generation smart grid, smart manufacturing, and
green energy industry.
In addition, the acquisition of shares of TECO Electric & Machinery Co., Ltd. for a total price of
no more than NT$1.8 billion was approved by WLC’s board of directors on January 22, 2011.
36. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN
CURRENCIES
The Group’s significant financial assets and liabilities dominated in foreign currencies aggregated
by the foreign currencies other than functional currencies of the entities in the Group and the
related exchange rates between the foreign currencies and the respective functional currencies
were as follows:
December 31, 2020
Financial assets
Monetary items
U.S. dollar
Japanese yen
Euro
Hong Kong dollar
Australian dollar
Malaysian ringgit
Indonesian rupiah
Non-monetary items
U.S. dollar
Renminbi
Foreign
Currency
Exchange Rate
Carrying
Amount
$
258,467
100,120
13,934
2,388
596
105,067
54,811,630
201,893
43,268
28.4800
0.2763
35.0200
3.6730
21.9500
6.7895
0.0020
28.4800
4.3648
$ 7,361,149
27,663
487,961
8,771
12,493
713,350
111,268
5,749,918
188,857
(Continued)
247
Financial Information
Financial liabilities
Monetary items
U.S. dollar
Japanese yen
Malaysian ringgit
Swiss franc
Renminbi
Non-monetary items
U.S. dollar
December 31, 2019
Financial assets
Monetary items
U.S. dollar
Japanese yen
Euro
Singapore dollar
Hong Kong dollar
Australian dollar
Malaysian ringgit
Indonesian rupiah
Non-monetary items
U.S. dollar
Financial liabilities
Monetary items
U.S. dollar
Malaysian ringgit
Swiss franc
Non-monetary items
U.S. dollar
Foreign
Currency
Exchange Rate
Carrying
Amount
516,963
4,011
7,086
182,191
17
28.4800
0.2763
6.7895
4.3648
32.3050
14,723,112
1,108
48,113
795,234
549
6,377
28.4800
181,613
(Concluded)
Foreign
Currency
Exchange Rate
Carrying
Amount
$
160,802
112,281
10,435
94
2,454
93
3,102
7,531,211
29.9800
0.2760
33.5900
22.2800
3.8490
21.0050
7.0330
0.0022
$ 4,820,850
30,990
350,497
2,091
9,444
1,946
21,814
16,418
9,554
29.9800
286,428
343,778
7,750
17
29.9800
7.0330
30.925
10,306,467
54,505
526
1,848
29.9800
55,402
For the years ended December 31, 2020 and 2019, realized and unrealized net foreign exchange
gains (losses) were NT$(66,726) thousand and NT$112,757 thousand, respectively. It is
impractical to disclose net foreign exchange gains (losses) by each significant foreign currency
due to the variety of the foreign currency transactions and functional currencies in the Group.
248
37. SEPARATELY DISCLOSED ITEMS
a. Information about on significant transactions and information on investees:
1) Financing provided to others (Table 1)
2) Endorsements/guarantees provided (Table 2)
3) Marketable securities held (Table 3)
4) 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)
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the
paid-in capital (Table 5)
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the
paid-in capital (None)
7) Total purchases from or sales to related parties amounting to at least NT$100 million or
20% of the paid-in capital (Table 6)
8) Receivables from related parties amounting to at least NT$100 million or 20% of the
paid-in capital (Table 7)
9) Trading in derivative instrument (Notes 7 and 8)
10) Information on investees (Table 8)
11) Intercompany relationships and significant intercompany transactions (Table 10)
b. Information on investments in mainland China:
1) Information on any investee company in mainland China, showing the name, principal
business activities, paid-in capital, method of investment, inward and outward remittance
of funds, ownership percentage, net income of investees, investment income or loss,
carrying amount of the investment at the end of the period, repatriations of investment
income, and limit on the amount of investment in the mainland China area (Table 9)
2) Any of the following significant transactions with investee companies in mainland China,
either directly or indirectly through a third party, and their prices, payment terms, and
unrealized gains or losses (Table 9):
a) The amount and percentage of purchases and the balance and percentage of the related
payables at the end of the period;
b) The amount and percentage of sales and the balance and percentage of the related
receivables at the end of the period;
c) The amount of property transactions and the amount of the resultant gains or losses;
d) The balance of negotiable instrument endorsements or guarantees or pledges of
collateral at the end of the period and the purposes;
249
Financial Information
e) The highest balance, the ending period balance, the interest rate range, and total
current period interest with respect to the financing of funds; and
f) Other transactions that have a material effect on the profit or loss for the period or on
the financial position, such as the rendering or receipt of services.
c. Information of major shareholders: List all shareholders with ownership of 5% or greater
showing the name of the shareholder, the number of shares owned, and percentage of
ownership of each shareholder (Table 11)
38. SEGMENT INFORMATION
a. Basic information
1) Classification
Information reported to the chief operating decision maker for the purpose of resource
allocation and assessment of segment performance focuses on the types of goods or
services delivered or provided.
a) Wires and cables
The segment’s main products include copper rods, wires, connectors and components
which are sold to industries involving cables and wires, communications cable, heavy
electronics, home electrical appliances and construction.
b) Stainless steel
The segment’s main products included smelting, rolled stainless steel, carbon steel and
precision alloy wire which are sold to industries involving construction components,
crankshafts, machine tools, plumbing, heat exchange, drainage, petrochemicals and
construction.
c) Real estate
Real estate is responsible for the development of commercial and real estate
complexes and real estate management. Furthermore, the modes of operation are the
construction of residences, offices, markets and hotels, and the offering of rental
space, operating management and after-sales services.
d) Administration and investing
The segment of administration and investing refers to other investments in mainland
China.
2) Estimates of operating segment income and expenses, assets and liabilities
Accounting policies of operating segments are the same with those summarized in Note 4
to the consolidated financial statements. Operating segment income and expenses are
measured based on estimated future potential profit and pre-tax operating profit adjusted
by hedge accounting. Sales and transfers between segments are treated as transactions
250
with third parties and evaluated at fair value.
The Group does not allocate income tax expense (benefit), investment income (loss)
recognized under equity method, foreign exchange gain (loss), net investment income
(loss), gain (loss) on disposal of investments, gain (loss) on valuation of financial assets
and liabilities and extraordinary items to reportable segments. The amounts reported are
consistent with the report used by chief operating decision maker.
3) Identification of operating segments
The reported operating segments are classified according to the different products and
services that are managed separately because they use different technology and selling
strategies.
b. Financial information
1) Segment revenue and results:
For the year ended December 31, 2020
External net sales and operating
revenue
Operating profit
Net non-operating income (expenses)
Net interest income (expenses)
Share of profit of associates under
the equity method
Dividend income
Loss on disposal of property, plant
and equipment
Gain on disposal of investments
Foreign exchange loss, net
Gain on financial assets and
liabilities at fair value through
profit or loss
Impairment loss reversed
Net other income (expenses)
Consolidated income before income
tax
For the year ended December 31, 2019
External net sales and operating
revenue
Operating profit
Net non-operating income (expenses)
Net interest income (expenses)
Share of profit of associates under
the equity method
Dividend income
Gain on disposal of property, plant
and equipment
Gain on disposal of investment
properties
Gain on disposal of investments
Foreign exchange gain, net
Loss on financial assets and
liabilities at fair value through
profit or loss
Impairment loss recognized
Net other income (expenses)
Consolidated income before income
tax
Wires and
Cables
Stainless Steel
Real Estate
Administration
and Investing
Total
(In Thousands of NT$)
$
41,378,992
1,242,325
$
46,030,715
1,196,472
$ 7,099,820
3,583,825
$ 18,037,076
1,198,817
$ 112,546,603
7,221,439
(278,459)
1,696,319
110,990
(7,979)
87,696
(66,726)
732,121
674
(245,410)
$
9,250,665
60,557,082
1,148,885
56,737,975
879,274
2,098,825
283,341
15,410,523
1,719,631
$ 134,804,405
4,031,131
(291,258)
727,962
136,772
854,514
246,877
822,882
112,757
(106,368)
(1,680,575)
(114,427)
$
4,740,267
251
Financial Information
2) Segment assets and liabilities
Wires and
Cables
Stainless Steel
Real Estate
Administration
and Investing
Total
Segment assets
December 31, 2020
December 31, 2019
$ 11,209,815
7,794,262
$
$ 30,235,244
$ 31,357,528
$ 27,684,853
$ 28,269,666
$ 82,434,094 $ 151,564,006
$ 70,644,946 $ 138,066,402
Segment liabilities
December 31, 2020
December 31, 2019
$
$
3,902,905
2,140,001
$ 14,463,048
$ 13,311,082
$ 12,371,783
$ 14,311,511
$ 33,545,440 $ 64,283,176
$ 29,737,694 $ 59,500,288
3) Geographical information
The Group’s revenue from external customers and non-current assets, excluding those
classified as held for sale, financial instruments, deferred tax assets, and post-employment
benefit, categorized by geographical location is as follows:
Revenue from External
Customers
2020
2019
Non-current Assets
December 31
2020
2019
Asia
United States
$ 90,763,089
$ 116,540,861
$ 46,169,318
$ 39,430,534
of America
Europe
Others
17,896,829
2,048,572
1,838,113
14,561,842
2,451,408
1,250,294
156,460
-
-
214,988
-
-
$ 112,546,603
$ 134,804,405
$ 46,325,778
$ 39,645,522
Note: Revenue from external customers is classified by geographical location.
4) Information about major customer
No single customer contributed 10% or more to the Group’s revenue for both 2020 and
2019.
252
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2020
(In thousands of New Taiwan Dollars and U.S. Dollars)
No.
Lender
Borrower
Financial
Statement
Account
0 Walsin Lihwa
Corporation
PT. Walsin Nickel
Other
Industrial
Indonesia
receivables
Notes:
Related
Party
Highest Balance
for the Period
Ending
Balance
Actual Amount
Borrowed
Interest
Rate (%)
Nature of
Financing
Business
Transaction
Amount
Reasons for
Short-term
Financing
Allowance
for
Impairmen
t Loss
Collateral
Item Value
Financing Limit
for Each
Borrower
(Note 1)
Aggregate
Financing Limit
(Note 1)
Yes
$
(US$
16,809,300
570,000)
$ 16,233,600
(US$ 570,000 )
$
(US$
5,340,000
187,500)
3.50 Operating capital
$
- Operating capital
and equipment
purchase
$
-
-
$
- $
33,787,294
(US$ 1,186,352)
$
33,787,294
(US$ 1,186,352)
1. According to the financing provided by Walsin Lihwa Corporation, the limit on the amount of financing provided to a single enterprise that holds directly or indirectly 100% of the voting rights of a subsidiary cannot exceed 40% of the equity presented in the
TABLE 1
consolidated financial statements of Walsin Lihwa Corporation.
a. The limit on the amount of financing provided to a single enterprise was as follows:
PT. Walsin Nickel Industrial Indonesia = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
b. The limit on the amount of financing provided was as follows:
The limit on the amount of financing provided = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
2. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars.
3. The currency exchange rate as of December 31, 2020 was as follows: US$ to NT$ = 1:28.48.
2
5
3
253
2
5
4
WALSIN LIHWA HOLDINGS LIMITED AND SUBSIDIARIES
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)
TABLE 1-1
No.
Lender
Borrower
Financial
Statement
Account
Related
Party
Highest Balance
for the Period
Ending Balance
Actual Amount
Borrowed
Interest
Rate (%)
Nature of
Financing
Business
Transaction
Amount
Reasons for
Short-term
Financing
Allowance
for
Impairment
Loss
Collateral
Item Value
Financing Limit
for Each
Borrower
(Note 1)
Aggregate
Financing Limit
(Note 1)
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
1 Walsin Lihwa
Walsin (China)
Other receivables
Yes
Holdings Limited
Investment Co., Ltd.
Walsin Lihwa
Corporation
Other receivables
Yes
9,589,228
$
(US$
154,000)
(RMB 1,127,000)
6,050,000
200,000)
(US$
$
(US$
(RMB
(US$
-
-)
-)
-
-)
$
(US$
(RMB
(US$
-
- )
-)
-
-)
2.48-3.68 Operating
$
- Operating capital
$
capital
0.19-1.65 Operating
- Operating capital
capital
2 Walsin (China)
Hangzhou Walsin
Other receivables
Yes
Investment Co.,
Ltd.
Power Cable & Wire
Co., Ltd.
(RMB
350,663
80,000)
(RMB
349,187
80,000)
349,187
(RMB 80,000 )
4.35-4.79 Operating
- Operating capital
capital
Walsin (Nanjing)
Other receivables
Yes
Construction Limited
Yantai Walsin Stainless
Steel Co., Ltd.
Other receivables
Yes
Jiangyin Walsin
Other receivables
Yes
Specialty Alloy
Materials Co., Ltd.
Changshu Walsin
Other receivables
Yes
Specialty Steel Co.,
Ltd.
Dongguan Walsin Wire
& Cable Co., Ltd.
Jiangyin Walsin Steel
Cable Co., Ltd.
Shanghai Walsin Lihwa
Power Wire & Cable
Co., Ltd.
Other receivables
Yes
Other receivables
Yes
Other receivables
Yes
10,958,225
(RMB 2,500,000)
6,798,490
(US$
80,000)
(RMB 1,000,000)
1,884,545
(US$
45,000)
(RMB 120,000)
2,057,850
58,000)
70,000)
3,116,526
80,000)
(US$
(RMB 160,000)
2,055,216
(US$
10,000)
(RMB 400,000)
272,250
9,000)
(US$
(RMB
(US$
10,912,100
(RMB 2,500,000)
6,601,762
(US$
100,000)
(RMB 860,000)
1,805,381
(US$
45,000)
(RMB 120,000)
1,957,379
58,000)
70,000)
2,976,774
80,000)
(US$
(RMB 160,000)
2,030,736
(US$
10,000)
(RMB 400,000)
256,320
9,000)
(US$
(RMB
(US$
1,091,502
(RMB 250,067)
3,955,741
(US$ 72,304 )
(RMB 434,500)
1,267,388
(US$ 44,501 )
-)
(RMB
1,327,424
(US$ 46,609 )
-)
(RMB
2,235,367
(US$ 78,489 )
-)
(RMB
1,569,987
(US$
9,973 )
(RMB 294,617)
255,551
8,973 )
(US$
4.05-5.22 Operating
- Operating capital
capital
1.65-3.915 Operating
- Operating capital
1.65
1.65
1.65
capital
Operating
capital
Operating
capital
Operating
capital
- Operating capital
- Operating capital
- Operating capital
1.65-3.915 Operating
- Operating capital
capital
1.65
Operating
capital
- Operating capital
-
-
-
-
-
-
-
-
-
-
-
$
- $
33,787,294
(US$ 1,186,352)
$
33,787,294
(US$ 1,186,352)
-
-
-
-
-
-
-
-
-
-
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
-
(US$
1,673,785
58,770)
(US$
1,673,785
58,770)
-
-
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
-
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
-
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
-
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
-
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
-
(US$
418,446
14,693)
(US$
1,673,785
58,770)
3 Dongguan Walsin
Walsin (China)
Other receivables
Yes
Wire & Cable Co.,
Ltd.
Investment Co., Ltd.
2,849,139
US$
-
(RMB 650,000)
2,837,146
US$
-
(RMB 650,000)
2,453,494
US$
-
(RMB 562,104)
2.7-3.1 Operating
- Operating capital
-
-
capital
-
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
4 Walsin International
Investments
Limited
Walsin (China)
Other receivables
Yes
Investment Co., Ltd.
Walsin Lihwa
Corporation
Other receivables
Yes
16,472,548
382,000)
(US$
(RMB 1,127,000)
6,050,000
200,000)
(US$
15,798,535
382,000)
(US$
(RMB 1,127,000)
5,696,000
200,000)
(US$
10,521,079
(US$ 258,000 )
(RMB 727,000)
5,696,000
(US$ 200,000)
1.48-3.68 Operating
- Operating capital
capital
0.06-1.2 Operating
- Operating capital
capital
-
-
-
-
-
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
-
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
(Continued)
Notes:
1. According to the financing regulations provided by Walsin Lihwa Holdings Limited, Walsin (China) Investment Co., Ltd., Dongguan Walsin Wire & Cable Co., Ltd. and Walsin International Investments Limited, the total limit on the amount of the financing
provided to a single enterprise that holds directly or indirectly 100% of the voting rights of a subsidiary whose equity is 100%-owned, directly or indirectly by the parent company cannot exceed 40% of the equity of the parent company as presented in the
consolidated financial statements of Walsin Lihwa Corporation. The limit on the amount of financing provided to a single enterprise that holds less than 100% of a subsidiary whose equity is less than 100%-owned, directly or indirectly by its parent company,
cannot exceed 40% of the parent company’s equity as presented in its the consolidated financial statements of. a subsidiary. If the financing is an one-time funding, the amount for an individual loan shall not exceed 40 % of the financing company's net worth as
stated in the financing company’s most current consolidated financial statements. If it is a revolving funding, the amount for an individual loan shall not exceed 10 % of the financing company's net worth in the financing company’s most current consolidated
financial statements.
a. The limit on the amount of financing provided to a single enterprise was as follows:
Jiangyin Walsin Steel Cable Co., Ltd. = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
Shanghai Walsin Lihwa Power Wire & Cable Co., Ltd. = US$146,926×10%＝US$14,693 ($418,446)
Walsin (China) Investment Co., Ltd. = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
Walsin Lihwa Corporation = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
Walsin (Nanjing) Construction Limited = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
Yantai Walsin Stainless Steel Co., Ltd. = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
Jiangyin Walsin Specialty Alloy Materials Co., Ltd. = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
Changshu Walsin Specialty Steel Co., Ltd. = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
Dongguan Walsin Wire & Cable Co., Ltd. = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
Walsin Lihwa Holdings Limited = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
Hangzhou Walsin Power Cable & Wire Co., Ltd. = US$146,926 × 40%＝US$58,770 ($1,673,785)
b. The limit on the amount of financing provided was as follows:
Walsin Lihwa Corporation = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
Walsin (China) Investment Co., Ltd. = US$146,926 × 40%＝US$58,770 ($1,673,785)
2. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars and Renminbi.
3. The currency exchange rates as of December 31, 2020 were as follows: US$ to NT$ = 1:28.48; RMB to NT$ = 1:4.36484; US$ to RMB = 1:6.5249.
(Concluded)
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2
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6
CONCORD INDUSTRIES LIMITED AND SUBSIDIARIES
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)
TABLE 1-2
No.
Lender
Borrower
Financial
Statement
Account
Related
Party
Highest Balance
for the Period
Ending Balance
Actual Amount
Borrowed
Interest
Rate (%)
Nature of
Financing
Business
Transaction
Amount
Reasons for
Short-term
Financing
Allowance
for
Impairment
Loss
Collateral
Item
Value
Financing Limit
for Each
Borrower
(Note 1)
Aggregate
Financing Limit
(Note 1)
5 Concord Industries
Walsin (China)
Other receivables
Yes
Limited
Investment Co.,
Ltd.
$
(US$
5,535,750
183,000)
$
US$
-
-
$
US$
6 Yantai Walsin
Walsin (China)
Other receivables
Yes
Stainless Steel
Co., Ltd.
Investment Co.,
Ltd.
4,383,290
(RMB 1,000,000)
4,364,840
(RMB 1,000,000)
RMB
-
-
-
-
2.48
Operating
capital
$
3.10
Operating
capital
7 Changshu Walsin
Specialty Steel
Co., Ltd.
Walsin (China)
Other receivables
Yes
Investment Co.,
Ltd.
8 Jiangyin Walsin
Walsin (China)
Other receivables
Yes
Specialty Alloy
Materials Co.,
Ltd.
Investment Co.,
Ltd.
(RMB
306,830
70,000)
(RMB
305,539
70,000)
(RMB
213,720
48,964)
2.7-3.1 Operating
capital
876,658
(RMB 200,000)
872,968
(RMB 200,000)
758,155
(RMB 173,696)
2.7-3.1 Operating
capital
-
-
-
-
Operating capital
$
Operating capital
Operating capital
Operating capital
-
-
-
-
-
$
-
-
-
-
-
-
-
$
33,787,294
(US$ 1,186,352)
$
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
Notes:
1. According to the financing regulations of Concord Industries Limited, Yantai Walsin Stainless Steel Co., Ltd., Changshu Walsin Specialty Steel Co., Ltd. and Jiangyin Walsin Specialty Alloy Materials Co., Ltd., the limit on the amount of financing provided to a
single enterprise that holds directly or indirectly 100% of the voting rights of a subsidiary cannot exceed 40% of the parent company’s equity presented in the consolidated financial statements of Walsin Lihwa Corporation.
a. The limit on the amount of financing provided to a single enterprise was as follows:
Walsin (China) Investment Co., Ltd. = $$84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
b. The limit on the amount of financing provided was as follows:
The limit on the amount of financing provided = $$84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
2. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars.
3. The currency exchange rates as of December 31, 2020 were as follows: US$ to NT$ = 1:28.48; RMB to NT$ = 1:4.36484; US$ to RMB = 1:6.5249.
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TABLE 1-3
JIN-CHERNG CONSTRUCTION CO. AND SUBSIDIARIES
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)
No.
Lender
Borrower
Financial
Statement
Account
Related
Party
Highest Balance
for the Period
Ending Balance
Actual
Amount
Borrowed
Interest
Rate (%)
Nature of
Financing
Business
Transaction
Amount
Reasons for
Short-term
Financing
Allowance
for
Impairment
Loss
Collateral
Item
Value
Financing Limit
for Each
Borrower
(Note 1)
Aggregate
Financing Limit
(Note 1)
9 Joint Success
Enterprises
Limited
Walsin (Nanjing)
Construction
Co., Ltd.
Other receivables
Yes
$
(US$
801,020
26,480)
$
(US$
754,150
26,480)
$ 754,150
(US$ 26,480 )
2.48
Operating capital
$
10 Walsin
Walsin (China)
Other receivables
Yes
(Nanjing)
Construction
Limited
Investment Co.,
Ltd.
2,191,645
(RMB 500,000)
2,182,420
(RMB 500,000)
RMB
-
-
-
Operating capital
-
-
Operating capital
$
Operating capital
-
-
-
$
-
$
33,787,294
(US$ 1,186,352)
$
33,787,294
(US$ 1,186,352)
-
-
33,787,294
(US$ 1,186,352)
33,787,294
(US$ 1,186,352)
Notes:
1. According to the financing regulation provided by Joint Success Enterprises Limited, the total limit on the amount of the financing provided to a subsidiary whose equity is 100% owned, directly or indirectly by the parent company, cannot exceed 40% of the
equity of the parent company as presented in the consolidated financial statements of Walsin Lihwa Corporation. The limit on the amount of financing provided to a subsidiary whose equity is less than 100% owned, directly or indirectly by its parent company,
cannot exceed 40% of the parent company’s equity as presented in the parent company’s most current consolidated financial statements. If the financing is a one-time funding, the amount for an individual loan shall not exceed 40 % of the parent company’s net
worth in the parent company’s most current consolidated financial statements. If it is a revolving fund, the amount for an individual loan shall not exceed 10 % of the parent company’s net worth in the parent company’s most current consolidated financial
statements.
a. The limit on the amount of financing provided to a single enterprise was as follows:
Walsin (Nanjing) Construction Co., Ltd. = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
Walsin (China) Investment Co., Ltd. = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
b. The limit on the amount of financing provided was as follows:
The limit on the amount of financing provided = $84,468,235 × 40% ＝ $33,787,294 (US$1,186,352)
2. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars and Renminbi.
3. The currency exchange rates as of December 31, 2020 were as follows: US$ to NT$ = 1:28.48; RMB to NT$ = 1:4.36484; US$ to RMB = 1:6.5249.
2
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7
257
2
5
8
WALSIN INFO-ELECTRIC CORP. AND SUBSIDIARIES
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars)
TABLE 1-4
No.
Lender
Borrower
Financial
Statement
Account
Related
Party
Highest Balance
for the Period
Ending
Balance
Actual
Amount
Borrowed
Interest
Rate (%)
Nature of
Financing
Business
Transaction
Amount
Reasons for
Short-term
Financing
Collateral
Allowance for
Impairment Loss
Item Value
Financing Limit
for Each
Borrower
(Note 1)
Aggregate
Financing
Limit
(Note 1)
11 Walsin Info-Electric
Walsin Lihwa
Other receivables
Yes
$
130,000 $ 130,000 $
72,000
0.70 Operating capital
$
- Operating capital
$
-
-
$
-
$
137,045
$
137,045
Corp.
Corporation
Notes:
1. According to the financing regulation provided by Walsin Info-Electric Corp., the total limit on the amount of the financing provided to a subsidiary whose equity is 100% owned, directly or indirectly by the parent company, cannot exceed 40% of the equity of
the parent company as presented in the consolidated financial statements of Walsin Lihwa Corporation. The limit on the amount of financing provided to a subsidiary whose equity is less than 100% owned, directly or indirectly by its parent company, cannot
exceed 40% of the parent company’s equity as presented in the parent company’s most current consolidated financial statements. If the financing is a one-time funding, the amount for an individual loan shall not exceed 40 % of the parent company’s net worth in
the parent company’s most current consolidated financial statements. If it is a revolving fund, the amount for an individual loan shall not exceed 10 % of the parent company’s net worth in the parent company’s most current consolidated financial statements.
a. The limit on the amount of financing provided to a single enterprise was as follows:
Walsin Lihwa Corporation = $342,613 × 40% ＝ $137,045
b. The limit on the amount of financing provided was as follows:
The limit on the amount of financing provided = $342,613 × 40% ＝ $137,045
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TABLE 2
WALSIN LIHWA HOLDINGS LIMITED AND SUBSIDIARIES
ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)
Endorsee/Guarantee
No.
(Note 1)
Endorser/Guarantor
Name
Relationship
(Note 2)
Limits on
Endorsement/
Guarantee Given
on Behalf of Each
Party (Note 3)
Maximum Amount
Endorsed/
Guaranteed During
the Period
Outstanding
Endorsement/
Guarantee at the
End of the Period
(Note 4)
Actual
Amount
Borrowed
Amount
Endorsed/
Guaranteed by
Collateral
Ratio of
Accumulated
Endorsement/
Guarantee to Net
Equity in Latest
Financial
Statements (%)
Aggregate
Endorsement/
Guarantee Limit
Endorsement/
Guarantee Given
by Parent on
Behalf of
Subsidiaries
Endorsement/
Guarantee Given
by Subsidiaries on
Behalf of Parent
Endorsement/
Guarantee
Given on
Behalf of
Companies
1
Dongguan Walsin Wire
& Cable Co., Ltd.
Walsin
c
(China)
Investment
Co., Ltd.
Notes:
$
10,461,103
(US$ 367,314)
$
1,361,358
(RMB 310,579)
$
1,355,628
(RMB 310,579)
$
US$
-
-
$
-
1.73
$
84,468,235
No
No
Yes
1. The information on Walsin Lihwa Corporation and its subsidiaries is listed and labeled on the entitled “No.” column.
“0” represents Walsin Lihwa Corporation.
a.
b. Subsidiaries are numbered consecutively starting from 1.
2. The relationship between Walsin Lihwa Corporation and the endorsed/guaranteed entities can be classified into the following categories
a. A company with which Walsin Lihwa Corporation does business.
b. A company in which Walsin Lihwa Corporation directly and indirectly holds more than 50% of the voting shares.
c. A company that directly and indirectly holds more than 50% of the voting shares in Walsin Lihwa Corporation.
d. A company in which Walsin Lihwa Corporation directly or indirectly holds 90% or more of the voting shares.
e. A company that fulfills Walsin Lihwa Corporation’s contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.
f. A company in which all capital contributing shareholders make endorsements/guarantees for it and Walsin Lihwa Corporation’s joint-investment company in proportion to their shareholding percentages.
g. A company in the same industry as Walsin Lihwa Corporation whereby either provides among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each
other.
3. According to the endorsements/guarantees provided and financing provided by Walsin Lihwa Corporation, the total limit on the amount of endorsements/guarantees cannot exceed 100% of the net value of Walsin Lihwa Corporation’s current
parent-company-only financial statements (including the consolidated financial statements). The limit on the amount of endorsements/guarantees provided and financing provided to a single enterprise cannot exceed the net value of the guaranteed company. The
limit on the amount of guarantees provided to an investee in which over 66.67% of the common shares are held cannot exceed the amount which is 250% of the net value multiplied by the equity percentage of the guarantee provider; however, the limits
mentioned above are not applicable to Walsin Lihwa Corporation’s wholly-owned holding companies incorporated in duty-free areas overseas.
a. The limit on the amount of endorsements/guarantees provided was as follows:
NT$84,468,235 × 100% ＝ 84,468,235
b. The limit on the amount of endorsements/guarantees provided to a single entity was as follows:
Walsin (China) Investment Co., Ltd.: US$146,926 × 250% × 100% ＝ US$367,314
4. The currency exchange rates as of December 31, 2020 were as follows: US$ to NT$ = 1:28.48; RMB to NT$ = 1:4.36484.
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6
0
CONCORD INDUSTRIES LIMITED AND SUBSIDIARIES
ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)
TABLE 2-1
Endorsee/Guarantee
No.
(Note 1)
Endorser/Guarantor
Name
Relationship
(Note 2)
Limits on
Endorsement/
Guarantee Given
on Behalf of Each
Party (Note 3)
Maximum Amount
Endorsed/
Guaranteed During
the Period
Outstanding
Endorsement/
Guarantee at the
End of the Period
(Note 4)
Actual Amount
Borrowed
Amount
Endorsed/
Guaranteed by
Collateral
Ratio of
Accumulated
Endorsement/
Guarantee to Net
Equity in Latest
Financial
Statements (%)
Aggregate
Endorsement/
Guarantee
Limit
Endorsement/
Guarantee Given
by Parent on
Behalf of
Subsidiaries
Endorsement/
Guarantee Given
by Subsidiaries on
Behalf of Parent
Endorsement/
Guarantee
Given on Behalf
of Companies
2
Jiangyin Walsin
Specialty Alloy
Materials Co., Ltd.
Walsin (China)
Investment
Co., Ltd.
d
$
(US$
10,461,103
367,314)
$
1,361,358
(RMB 310,579)
$
1,355,628
(RMB 310,579)
$
US$
-
-
$
-
1.73
$ 84,468,235
No
No
Yes
Notes:
1. The information on Walsin Lihwa Corporation and its subsidiaries is listed and labeled on the entitled “No.” column.
“0” represents Walsin Lihwa Corporation.
a.
b. Subsidiaries are numbered consecutively starting from 1.
2. The relationship between Walsin Lihwa Corporation and the endorsed/guaranteed entities can be classified into six categories.
a. A company with which Walsin Lihwa Corporation does business.
b. A company in which Walsin Lihwa Corporation directly and indirectly holds more than 50% of the voting shares.
c. A company that directly and indirectly holds more than 50% of the voting shares in Walsin Lihwa Corporation.
d. A company in which Walsin Lihwa Corporation directly or indirectly holds 90% or more of the voting shares.
e. A company that fulfills Walsin Lihwa Corporation’s contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.
f. A company in which all capital contributing shareholders make endorsements/guarantees for it and Walsin Lihwa Corporation’s joint-investment company in proportion to their shareholding percentages.
g. A company in the same industry as Walsin Lihwa Corporation whereby either provides among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each
other.
3. According to the endorsements/guarantees provided and financing provided by Walsin Lihwa Corporation, the total limit on the amount of endorsements/guarantees cannot exceed 100% of the net value of Walsin Lihwa Corporation’s current
parent-company-only financial statements (including the consolidated financial statements). The limit on the amount of endorsements/guarantees provided and financing provided to a single enterprise cannot exceed the net value of the guaranteed company. The
limit on the amount of guarantees provided to an investee in which over 66.67% of the common shares are held cannot exceed the amount which is 250% of the net value multiplied by the equity percentage of the guarantee provider; however, the limits
mentioned above are not applicable to Walsin Lihwa Corporation’s wholly-owned holding companies incorporated in duty-free areas overseas.
a. The limit on the amount of endorsements/guarantees provided was as follows:
NT$84,468,235 × 100% ＝ NT$84,468,235
b. The limit on the amount of endorsements/guarantees provided to a single entity was as follows:
Walsin (China) Investment Co., Ltd.: US$146,926 × 250% × 100% ＝ US$367,314
4. The currency exchange rates as of December 31, 2020 were as follows: US$ to NT$ = 1:28.48; RMB to NT$ = 1:4.36484
TABLE 3
WALSIN LIHWA CORPORATION
MARKETABLE SECURITIES HELD
DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars)
Holding
Company Name
Type and Name of Issuer of
Marketable Securities
Relationship with the Holding
Company
Financial Statement Account
December 31, 2020
Number of
Shares/Units
Carrying
Amount
Percentage of
Ownership
(%)
Fair Value
Note
Walsin Lihwa
Corporation
Share
HannStar Display Corp.
The holding company is a director of the
HannStar Board Corp.
TECO Electric & Machinery Co.,
Ltd.
issuer company
-
-
Kuong Tai Metal Industrial Co.,
The holding company is a director of the
Ltd.
issuer company
Taiwan Submarine Cable Co.,
Ltd. (formerly known as
One-Seven Trading Co., Ltd.)
The holding company is a director of the
issuer company
Global Investment Holdings
The holding company is a director of the
WK Technology Fund
Universal Venture Capital
Investment
issuer company
-
-
Hwa Bao Botanic Conservation
The holding company is a supervisor of
Corp.
the issuer company
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
299,632,180
$ 3,685,476
9.90
$ 3,685,476
63,753,952
2,763,734
12.06
2,763,734
954,000
26,378
9,631,802
210,382
30,000
184
5,221,228
50,078
380,477
5,949
1,400,000
11,128
0.05
9.39
6.67
2.97
1.91
1.16
3,000,000
29,920
15.00
26,378
210,382
184
50,078
5,949
11,128
29,920
2
6
1
261
2
6
2
CONCORD INDUSTRIES CONSTRUCTION CO. AND SUBSIDIARIES
MARKETABLE SECURITIES HELD
DECEMBER 31, 2020
(In Thousands of Renminbi)
TABLE 3-1
Holding Company Name
Type and Name of Issuer of
Marketable Securities
Relationship
with the Holding
Company
Financial Statement Account
Number of
Shares/Units
Carrying
Amount
Percentage of
Ownership (%)
Fair Value
Note
December 31, 2020
XiAn Lv Jing Technology
Co., Ltd.
Certification of capital verification
Shaanxi Tianhong Silicon Industrial
Corporation
Jiangyin Walsin Specialty
Alloy Materials Co., Ltd.
Certification of capital verification
Shaanxi Electronic Group
Optoelectronics Technology Co., Ltd.
-
-
Financial assets at fair value through other
comprehensive income - non-current
N/A
$
-
19.00
$
-
Financial assets at fair value through other
comprehensive income - non-current
N/A
21,788
6.02
21,788
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
JIN-CHERNG CONSTRUCTION CO. AND SUBSIDIARIES
MARKETABLE SECURITIES HELD
DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars)
Holding Company
Name
Type and Name of Issuer of
Marketable Securities
Relationship with the
Holding Company
Financial Statement Account
Number of
Shares/Units
Carrying
Amount
Percentage of
Ownership (%)
Fair Value
Note
December 31, 2020
Jin-Cherng
Share
Construction Co.
Chinshan Hotspring Development Co.,
Ltd.
Gsharp Corporation
-
-
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
8
$
270,000
-
-
8.00
2.73
$
-
-
TABLE 3-2
2
6
3
263
2
6
4
WALSIN INFO-ELECTRIC CORP. AND SUBSIDIARIES
MARKETABLE SECURITIES HELD
DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars)
TABLE 3-3
Holding Company Name
Type and Name of Issuer of
Marketable Securities
Relationship with the
Holding Company
Financial Statement Account
December 31, 2020
Number of
Shares/Units
Carrying
Amount
Percentage of
Ownership (%)
Fair Value
Note
Walsin Info-Electric Corp.
Share
W T International Inc.
Ufi Space Co., Ltd.
-
-
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
228,000
$ 2,614
270,000
29,700
5.43
1.07
$ 2,614
29,700
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
WALSIN LIHWA CORPORATION
MARKETABLE SECURITIES ACQUIRED OR 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
(In Thousands of New Taiwan Dollars)
Company
Name
Type and Name of
Marketable Securities
Financial Statement
Account
Purpose of
Transaction
Relationship
Beginning Balance
Acquisition
Disposal
Ending Balance
Number of
Shares
Amount
Number of
Shares
Amount
Number of
Shares
Amount
Carrying
Amount
Gain (Loss)
on Disposal
Number of
Shares
Amount
TABLE 4
Walsin Lihwa Share
Corporation Walsin Lihwa Holdings
Limited
PT. Walsin Nickel
Industrial Indonesia
Concord Industries
Limited
Corporate bonds
Golden Harbour
International Pte. Ltd.
Investments
accounted for
using the equity
method
Investments
accounted for
using the equity
method
Investments
accounted for
using the equity
method
Capital investment
Subsidiary
320,230,393
$ 20,054,589 163,000,000 $ 6,081,203
(Note 1)
-
$
- $
-
$
-
483,230,393 $ 26,135,792
Capital investment
Subsidiary
-
-
500,000
Capital
Subsidiary
505,903,187
11,007,234
20,000,000
investment/capital
reduction
1,306,341
(Note 1)
569,400
(Note 1)
5,683,859
(Note 2)
-
-
-
-
500,000
1,306,341
240,000,000
-
6,945,453
(Note 1)
-
285,903,187
4,631,181
-
-
-
-
N/A
5,683,859
Financial assets at
Golden Harbour
-
N/A
-
N/A
fair value through
profit or loss
International Pte.
Ltd.
Note 1: The amount included subscription for shares, investment income or loss and the share of the change in capital surplus from investments in associates accounted for using the equity method.
Note 2: The amount included evaluation of income or loss.
2
6
5
265
2
6
6
WALSIN LIHWA HOLDINGS LIMITED AND SUBSIDIARIES
MARKETABLE SECURITIES ACQUIRED OR 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
(In Thousands of Renminbi)
Company Name
Type and Name of
Marketable Securities
Financial
Statement
Account
Counterparty Relationship
Number of
Shares
Amount
Number of
Shares
Amount
Number of
Shares
Amount
Carrying
Amount
Beginning Balance
Acquisition
Disposal
Gain
(Loss) on
Disposal
Ending Balance
Number of
Shares
Amount
Walsin Lihwa
Holdings Limited Walsin International
Share
Investments Limited
Investments
Capital
Subsidiary
10,000,002
$ (15,896 )
4,293,960,200
$
accounted for
using the equity
method
investment
3,890,346
(Note)
-
$
-
$
-
$
-
4,303,960,202
$
3,874,450
TABLE 4-1
Walsin (China)
Investment Co.,
Ltd.
Certificate of capital
verification
Fubon Bank (China)
RMB structured
deposits
Standard Chartered
structured deposits
Financial assets at
amortized cost
Fubon Bank
Financial assets at
amortized cost
Standard
Chartered
Dongguan Walsin
Wire & Cable
Co., Ltd.
Certificate of capital
verification
Shanghai Pudong
Development Bank
RMB structured
deposits
China CITIC Bank
RMB structured
deposits
Financial assets at
amortized cost
Shanghai Pudong
Development
Bank
Financial assets at
amortized cost
China CITIC
Bank
-
-
-
-
Note: The amount included subscription for shares and investment income or loss.
N/A
N/A
N/A
N/A
-
-
-
-
N/A
1,400,000
N/A
1,105,020
1,100,000
5,020
N/A
300,000
N/A
200,000
N/A
200,822
200,000
822
N/A
N/A
385,000
N/A
387,233
385,000
2,233
N/A
N/A
1,200,000
N/A
1,204,493
1,200,000
4,493
N/A
-
-
-
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
CONCORD INDUSTRIES LIMITED AND SUBSIDIARIES
MARKETABLE SECURITIES ACQUIRED OR 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
(In Thousands of Renminbi)
Company Name
Type and Name of
Marketable Securities
Financial
Statement
Account
Counterparty Relationship
Beginning Balance
Acquisition
Disposal
Ending Balance
Number of
Shares
Amount
Number of
Shares
Amount
Number of
Shares
Amount
Carrying
Amount
Gain (Loss) on
Disposal
Number of
Shares
Amount
Walsin Lihwa
(Changzhou)
Investment
Co., Ltd.
Certificate of capital
verification
Shanghai Bank No. 2
Structured Product
Financial assets at
amortized cost
Bank of Shanghai
-
N/A
$
340,000
N/A
$
340,000
N/A
$
686,260
$
680,000
$
6,260
N/A
$
-
TABLE 4-2
2
6
7
267
2
6
8
PT. WALSIN NICKEL INDUSTRIAL INDONESIA
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
(In Thousands of New Taiwan Dollars)
Buyer
Property
Event Date
Transaction
Amount
Payment Status
Counterparty
Relationship
Information on Previous Title Transfer If Counterparty Is A Related Party
Property Owner
Transaction Date
Relationship
Amount
TABLE 5
i
F
n
a
n
c
a
i
l
Pricing Reference
Purpose of
Acquisition
Other
Terms
I
n
f
o
r
m
a
t
i
o
n
PT. Walsin Nickel
Industrial
Indonesia
Land and plant Contract date:
2020/04/22
$2,686,315 According to the
PT. Plenty Bumi
N/A
N/A
N/A
N/A
N/A
Market quotations Production and
N/A
contract
International and
Eternal Tsingshan
Group Limited
operation
WALSIN LIHWA CORPORATION
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
(In Thousands of New Taiwan Dollars)
Company Name
Related Party
Relationship
Transaction Details
Abnormal Transaction
Purchase/
Sale
Amount
% of
Total
Payment Terms
Unit Price
Payment
Terms
Notes/Accounts
Receivable (Payable)
% of
Total
Ending
Balance
Note
TABLE 6
Walsin Lihwa
Corporation
Cable Co., Ltd.
subsidiary
Dongguan Walsin Wire &
100% indirectly owned
Sales
$ (2,482,034)
(2) The payment terms are set by
Normal
Normal
$
207,701
2
Jiangyin Walsin Specialty
Alloy Materials Co.,
Ltd.
subsidiary
100% indirectly owned
Sales
(200,926)
-
Koung Tai Metal
Director of the related
Sales
(903,376)
Industrial Co., Ltd.
party
Normal
Normal
99,820
1
Normal
Normal
39,054
-
quotations on the local market, and
the transaction terms are similar to
those of general customers.
The payment terms are set by
quotations on the local market, and
the transaction terms are similar to
those of general customers.
(1) The payment terms are set by
quotations on the local market, and
the transaction terms are similar to
those of general customers.
2
6
9
269
2
7
0
WALSIN LIHWA HOLDINGS LIMITED 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
(In Thousands of New Taiwan Dollars)
Company Name
Related Party
Relationship
Transaction Details
Abnormal Transaction
Purchase/
Sale
Amount
% of
Total
Payment Terms
Unit Price
Payment
Terms
Notes/Accounts
Receivable (Payable)
% of
Total
Ending
Balance
Note
Dongguan Walsin Wire &
Cable Co., Ltd.
Walsin Lihwa
Corporation
Parent company Purchases $ 2,482,034
22
The payment terms are set by
Normal
Normal
$
(207,701)
(90)
quotations on the local market, and
the transaction terms are similar to
those of general customers.
TABLE 6-1
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
TABLE 6-2
CONCORD INDUSTRIES LIMITED 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
(In Thousands of Renminbi)
Company Name
Related Party
Relationship
Transaction Details
Abnormal Transaction
Purchase/
Sale
Amount
% of
Total
Payment Terms
Unit Price
Payment
Terms
Notes/Accounts
Receivable (Payable)
% of
Total
Ending
Balance
Note
Yantai Walsin
Changshu Walsin
Both subsidiaries of
Sales
$ (234,934)
(11) The payment terms are set by
Normal
Normal
$
30,471
5
Stainless Steel
Co., Ltd.
Specialty Steel Co.,
Ltd.
Concord Industries
Limited
Jiangyin Walsin Specialty
Alloy Materials Co.,
Ltd.
Both subsidiaries of
Sales
(172,669)
Concord Industries
Limited
quotations on the local market, and
the transaction terms are similar to
those of general customers.
(8) The payment terms are set by
quotations on the local market, and
the transaction terms are similar to
those of general customers.
Normal
Normal
26,445
4
Parent company
Purchases
46,306
20
The payment terms are set by
Normal
Normal
(22,869)
(33)
Jiangyin Walsin
Specialty Alloy
Materials Co.,
Ltd.
Walsin Lihwa
Corporation
Yantai Walsin Stainless
Both subsidiaries of
Purchases
172,669
73
Steel Co., Ltd.
Concord Industries
Limited
quotations on the local market, and
the transaction terms are similar to
those of general customers.
The payment terms are set by
quotations on the local market, and
the transaction terms are similar to
those of general customers.
Normal
Normal
(26,445)
(39)
Changshu Walsin
Specialty Steel
Co., Ltd.
Yantai Walsin Stainless
Both subsidiaries of
Purchases
234,934
60
The payment terms are set by
Normal
Normal
(30,471)
(29)
Steel Co., Ltd.
Concord Industries
Limited
quotations on the local market, and
the transaction terms are similar to
those of general customers.
2
7
1
271
2
7
2
WALSIN LIHWA CORPORATION
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars)
Company Name
Related Party
Relationship
Financial Statement Account and
Ending Balance
Turnover
Rate
Amount
Action Taken
Overdue
Amount
Received in
Subsequent
Period
Allowance for
Impairment
Loss
Walsin Lihwa Corporation Dongguan Walsin Wire &
100% indirectly owned subsidiary Trade receivables
$ 207,701
4.27
$
Cable Co., Ltd.
PT. Walsin Nickel Industrial
50% owned subsidiary
Long-term receivables 5,349,885
Indonesia
-
-
-
-
-
$
174,724
$
-
-
-
TABLE 7
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
WALSIN LIHWA HOLDINGS LIMITED AND SUBSIDIARIES
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
DECEMBER 31, 2020
(In Thousands of Renminbi and U.S. Dollars)
Company Name
Related Party
Relationship
Financial Statement Account and
Ending Balance
Turnover
Rate
Overdue
Amount
Action
Taken
Amount
Received in
Subsequent
Period
Allowance for
Impairment
Loss
TABLE 7-1
Walsin Lihwa Holdings
Walsin (China) Investment Co., Ltd.
100% directly owned subsidiary
Other receivables RMB 321,124
Limited
Walsin (China)
Walsin Lihwa Holdings Limited
Parent company
Other receivables US$
4,900
Investment Co., Ltd.
Yantai Walsin Stainless Steel Co., Ltd. Both subsidiaries of Walsin Lihwa
Corporation
Changshu Walsin Specialty Steel Co.,
Both subsidiaries of Walsin Lihwa
Ltd.
Corporation
Other receivables US$
Other receivables US$
72,407
RMB 435,970
46,675
Jiangyin Walsin Specialty Alloy
18.37% directly owned subsidiary Other receivables US$
44,564
Materials Co., Ltd.
Jiangyin Walsin Steel Cable Co., Ltd.
100% directly owned subsidiary
Other receivables US$
9,987
RMB 295,409
8,986
Shanghai Walsin Lihwa Power Wire &
Cable Co., Ltd.
95.71% directly owned subsidiary Other receivables US$
Walsin (Nanjing) Construction Co., Ltd. Both subsidiaries of Walsin Lihwa
Other receivables RMB 250,291
Hangzhou Walsin Power Cable & Wire
Associate
Other receivables RMB
81,218
Corporation
Co., Ltd.
XiAn Walsin Metal Product Co., Ltd. Both subsidiaries of Walsin Lihwa
Other receivables RMB 173,857
Corporation
Nanjing Taiwan Trade Mart
Management Co., Ltd.
Both subsidiaries of Walsin Lihwa
Other receivables RMB
55,292
Corporation
Dongguan Walsin Wire & Cable Co.,
100% directly owned subsidiary
Other receivables US$
78,600
Ltd.
Walsin International
Walsin Lihwa Corporation Limited
Parent company
Other receivables RMB 1,305,589
Investments Limited
Walsin (China) Investment Co., Ltd.
Both subsidiaries of Walsin Lihwa
Other receivables RMB 2,436,212
Corporation
Note: Amounts are stated in thousands of Renminbi, except those stated in thousands of U.S. dollars.
2
7
3
273
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
7
4
TABLE 7-2
CONCORD INDUSTRIES LIMITED AND SUBSIDIARIES
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
DECEMBER 31, 2020
(In Thousands of Renminbi)
Company Name
Related Party
Relationship
Financial Statement Account and
Ending Balance
Turnover
Rate
Amount
Overdue
Action
Taken
Amount
Received in
Subsequent
Period
Allowance for
Impairment
Loss
Yantai Walsin Stainless Steel Co.,
Changshu Walsin Specialty
Both are subsidiaries of Concord
Trade receivables
$
30,471
7.92
$
Ltd.
Steel Co., Ltd.
Industries Limited
Jiangyin Walsin Specialty
Both are subsidiaries of Concord
Trade receivables
26,445
7.15
Alloy Materials Co., Ltd.
Industries Limited
Changshu Walsin Specialty Steel
Walsin (China) Investment Co.,
Both are subsidiaries of Walsin
Other receivables
49,075
Co., Ltd.
Ltd.
Lihwa Corporation
Jiangyin Walsin Specialty Alloy
Walsin (China) Investment Co.,
Both are subsidiaries of Walsin
Other receivables
174,069
Materials Co., Ltd.
Ltd.
Lihwa Corporation
-
-
-
-
-
-
-
-
-
-
$
25,808
$
17,301
-
-
-
-
-
-
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
JIN-CHERNG CONSTRUCTION CO. AND SUBSIDIARIES
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
DECEMBER 31, 2020
(In Thousands of Renminbi)
Company Name
Related Party
Relationship
Financial Statement Account
and Ending Balance
Turnover
Rate
Amount
Action Taken
Overdue
Amount
Received in
Subsequent
Period
Allowance for
Impairment
Loss
Joint Success Enterprises
Walsin (Nanjing) Construction Co., Ltd. Subsidiary
Other receivables
$ 177,219
-
$
-
-
$
-
$
-
Limited
TABLE 7-3
2
7
5
275
2
7
6
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE GROUP EXERCISES SIGNIFICANT INFLUENCE
FOR THE YEAR ENDED DECEMBER 31, 2020
1.
Information of investees that Walsin Lihwa Corporation has controlling power or significant influence over was as follows (in thousands of New Taiwan dollars):
TABLE 8
i
F
n
a
n
c
a
i
l
Net Income
(Loss) of the
Investee
Share of Profit
(Loss)
Note
I
n
f
o
r
m
a
t
i
o
n
Investor
Company
Walsin Lihwa
Corporation
Investee Company
Location
Original Investment Amount
Main Businesses and
Products
December 31,
2020
December 31,
2019
Number of Shares
Carrying Amount
As of December 31, 2020
Percentage
of
Ownership
(%)
Walsin Lihwa Holdings
Vistra Corporate Services Centre Wickhams Cay II,
Investments
$ 14,760,298
$ 9,861,333
483,230,393
100.00
$
26,135,792
$ 958,095
$ 963,213
Limited
Road Town, Tortola, VG1110 British Virgin Islands
Concord Industries
Vistra Corporate Services Centre Wickhams Cay II,
Investments
12,724,589
19,281,719
285,903,187
100.00
4,631,181
365,570 365,570
Limited
Touch Micro-System
Technology Corp.
Ace Result Global
Limited
Road Town, Tortola, VG1110 British Virgin Islands
566 Gaoshin Road, Yangmei Township, Taoyuan 326
Taiwan, R.O.C.
Vistra Corporate Services Centre Wickhams Cay II,
Road Town, Tortola, VG1110 British Virgin Islands
OEM on MEMS foundry
-
750,000
-
-
-
(50 )
(50 )
(Note 1)
services
Investments
1,587,416
1,587,416
44,739,988
100.00
339,349
29,383
29,383
Energy Pilot Limited
Vistra Corporate Services Centre Wickhams Cay II,
Investments
Road Town, Tortola, VG1110 British Virgin Islands
Market Pilot Limited
Vistra Corporate Services Centre Wickhams Cay II,
Investments
Road Town, Tortola, VG1110 British Virgin Islands
-
562,829
-
3,799,884
-
-
-
-
-
-
9,331
9,331
(Note 2)
(1,004 )
(1,004 )
(Note 3)
25F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Solar power systems
180,368
180,368
26,565,000
100.00
334,644
38,121
38,121
Min Maw Precision
Industry Corp.
Taiwan, R.O.C.
Waltuo Green Resources
No. 47, Bade Rd., Yanshui District, Tainan City 73743,
Corporation
Taiwan, R.O.C.
Jin-Cherng Construction
5th Floor, 192 Jingye 1st Road, Jhongshan District,
Co.
Taipei 104, Taiwan, R.O.C.
Walsin Info-Electric
25F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Corp.
Taiwan, R.O.C.
PT. Walsin Lippo
JI. MH. Thamrin Block A1-1, Delta Silicon Industrial
Park, Lippo Cikarang, Bekasi 17550, Indonesia
PT. Walsin Lippo Kabel JI. Jati 3 Blok J7/5, Newton Techno Park, Serang,
Industries
Cikarang Selatan, Bekasi, Jawa Barat
management, design, and
installation
Waste disposal, resource
recovery and cement
products
Construction
Mechanical and electrical,
communications, and
power systems
Steel wires
Production and sale of
cables and wires
10,000
10,000
1,000,000
100.00
8,837
(732 )
(732 )
611,688
611,688
515,699,455
99.22
6,452,096
720,099 714,449
270,034
66,406
29,854,246
99.51
340,934
3,385
3,373
481,663
481,663
10,500
70.00
783,754
23,311
16,317
11,656
11,656
1,050,000
70.00
8,916
12,617
8,832
Joint Success Enterprises
Vistra Corporate Services Centre Wickhams Cay II,
Investments
1,164,273
1,164,273
36,058,184
49.05
5,319,464
1,398,647 647,736
Limited
Road Town, Tortola, VG1110 British Virgin Islands
Chin-Xin Investment
26F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Investments
2,237,969
2,237,969
179,468,270
37.00
6,002,698
196,303
62,125
Co., Ltd.
Taiwan, R.O.C.
Walsin Color Co., Ltd.
1F., No. 5, Ln. 199, Liaoning St., Zhong Shan Dist.,
Management of
457,610
457,610
49,831,505
33.97
1,132,611
54,447
18,496
Taipei City, Taiwan, R.O.C.
Concord II Venture
Capital Co., Ltd.
Winbond Electronics
Corp.
4F., No. 76, Sec. 2, Dunhua S. Rd., Da’an Dist., Taipei
City 106, Taiwan (R.O.C.)
No. 8, Keya 1st Rd., Daya Township, Taichung County
428, Taiwan, R.O.C.
Walton Advanced
Engineering, Inc.
No. 18, Yugang N. 1st Rd., Qianzhen Dist., Kaohsiung
City 806, Taiwan, R.O.C.
investments and
conglomerates
Venture capital and
consulting affairs
Research, development,
production and sale of
semiconductors and
related components
Production, sale, and
testing of
semiconductors
257,860
257,860
26,670,699
26.67
185,428
(39,579 )
(10,556 )
7,429,920
7,429,920
883,848,423
22.21
14,595,661
1,359,787 302,009
1,185,854
1,185,854
109,628,376
21.65
2,601,028
254,887
57,735
(Continued)
Investor
Company
Investee Company
Location
Original Investment Amount
Main Businesses and
Products
December 31,
2020
December 31,
2019
Number of Shares
Carrying Amount
As of December 31, 2020
Percentage
of
Ownership
(%)
Net Income (Loss)
of the Investee
Share of Profit
(Loss)
Note
Walsin Technology
24F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Corp.
Powertec
Electrochemical
Corp.’s
Taiwan, R.O.C.
13 F, No. 337, Fuxing N. Rd., Songshan Dist.,
Taipei City 105, Taiwan, R.O.C.
Production and sale of
ceramic capacitors
Basic industrial
chemical
manufacturing and
energy technical
services
$ 1,649,039 $ 1,649,039
88,902,325
18.30
$
7,068,731
$
6,638,742
$
1,216,721
2,945,925 2,945,925
318,522,792
22.46
-
-
-
PT. Walsin Nickel
Industrial Indonesia
Gedung Wisma Mulia LT. 41 JL Jend Gatot Subroto
No. 42 Kuningan Barat Mmpang Prapatan Kota
ADM. Jakarta Selatan Dki Jakarta
Manufacture and sale of
1,509,171
-
500,000
50.00
1,306,341
(38,694)
(134,405)
nickel pig iron
Note 1: The liquidation of Touch Micro-system Technology Corp. was completed on June 5, 2020.
Note 2: The liquidation of Energy Pilot Limited was completed on September 3, 2020.
Note 3: The liquidation of Market Pilot Limited was completed on December 9, 2020.
(Continued)
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2.
Information of investees that Walsin Lihwa Holdings Limited and its subsidiaries have controlling power or significant influence over was as follows (in thousands of U.S. dollars/Hong Kong dollars/Renminbi):
Investor Company
Investee Company
Location
Main Businesses and
Products
December 31, 2020 December 31, 2019
Number of
Shares
Percentage
of
Ownership
(%)
Carrying Amount
Net Income
(Loss) of the
Investee
Share of Profit
(Loss)
Note
Original Investment Amount
As of December 31, 2020
Walsin Lihwa Holdings
Walsin (China)
Rm. 2804, 28th Floor, Shanghai Mart
Investments
US$
78,600
US$
78,600
N/A
100.00
$
958,675
$
68,982
$
68,982
Limited
Investment Co.,
Ltd.
Tower, No. 2299, Yanan Road (West),
Shanghai, China
Walsin International
Investments
Limited
Renowned
International
Limited
Walcom Chemicals
Industrial Limited
Borrego Solar
Systems, Inc.
Nanjing Taiwan
Trade Mart
Management Co.,
Ltd.
Jiangsu Taiwan
Trade Mart
Development Co.,
Ltd.
Hangzhou Walsin
Power Cable &
Wire Co., Ltd.
Shanghai Walsin
Lihwa Power
Wire & Cable Co.,
Ltd.
Jiangyin Walsin
Steel Cable Co.,
Ltd.
Unit 9-15, 22/F, Millennium City, 378
Kwun Tong Road, Kwun Tong,
Kowloon, Hong Kong
Investments
HK$ 4,303,960
HK$
10,000
4,303,960,202
100.00
3,874,450
(11,584)
(11,584)
Vistra Corporate Services Centre
Investments
US$
8,469
US$
8,469
-
-
-
(32,165)
(27,009) (Note 1)
Wickhams Cay II, Road Town, Tortola,
VG1110, BVI
Unit 714,7/F, Miramat Tower, 1-23
Kimberley Road, Tsimshatsui,
Kowloon, Hong Kong
6210 Lake Shore Drive, San Diego,
CA92119, USA
No. 230, Hexi Avenue, Nanjing
No. 901, Yingtian Avenue, Jianye Zone,
Nanjing
No. 9, 12 Road, Xiasha Economic &
Technology Development Zone,
Hangzhou, Zhejiang
No. 1128 Liuxiang Road, Nanxiang
Town, Jiading, Shanghai
No. 679 Binjiang Road (West), Binjiang
Economic & Technology Development
Zone, Jiangyin, Jiangsu
Commerce
US$
0.030
US$
0.030
325,000
65.00
0.191
HK$
-
HK$
-
US$
15,000
US$
15,000
1,460,458
73.66
658,633
290,535
215,917
US$
1,000
US$
1,000
N/A
100.00
(99,224)
(12,287)
(12,287)
2,000
2,000
N/A
20.00
2,126
60
29
Specializes in commercial,
residential, and public
sector turnkey,
grid-connected solar
electric systems
Business and asset
management, consulting
and advertising services
Nanjing Taiwan Trade Mart
Management Co., Ltd.
development and
construction, and
management
Production and sale of cables
US$
25,405
US$
25,405
N/A
14.41
45,379
28,153
4,057
and wires
Production and sale of cables
US$
14,956
US$
14,956
N/A
95.71
238,259
18,961
18,147
and wires
Manufacture and sale of steel
US$
26,041
US$
26,041
N/A
100.00
181,444
18,348
18,348
cables and wires
Dongguan Walsin
Xiniupo Industrial Zone District, Dalang
Wire & Cable Co.,
Ltd.
Town, Dongguan, Guangdong
Production and sale of bare
copper cables and wires
US$
26,000
US$
26,000
N/A
100.00
378,705
20,541
20,541
Jiangyin Walsin
No. 677, Binjiang West Road, Jiangyin
Cold-rolled stainless steel and
US$
9,000
US$
9,000
N/A
18.37
70,572
29,116
5,349
Walsin (China)
Investment Co., Ltd.
Specialty Alloy
Materials Co.,
Ltd.
City, Jiangsu
flat rolled products
Note 1: The liquidation of Renowned International Limited was completed on August 24, 2020.
Note 2: Amounts are stated in thousands of Renminbi, except those stated in thousands of U.S. dollars and Hong Kong dollars.
(Continued)
3.
Information of investees that Concord Industries Limited and its subsidiaries have controlling power or significant influence over was as follows (in thousands of U.S. dollars/Renminbi):
Investor
Company
Investee Company
Location
Main Businesses and
Products
December 31, 2020 December 31, 2019
Original Investment Amount
As of December 31, 2020
Percentage
of
Ownership
(%)
Carrying
Amount
Number of
Shares
Net Income
(Loss) of the
Investee
Share of Profit
(Loss)
Note
Concord Industries
Walsin Specialty Steel Corp. Vistra Corporate Services Centre Wickhams Cay
Commerce and investments
US$
Limited
II, Road Town, Tortola, VG1110, BVI
Walsin Precision
2115-1, Kawasan Perindustrian air Keroh, Fasaiv,
Air Keroh, 75450 Melaka, Malaysia
Production and sale of
stainless steel plates
US$
101,400
(Note 2)
8,470
US$
US$
101,400
(Note 2)
8,470
101,400,000
100.00
$ 222,140 $
45,457 $
45,457
32,178,385
100.00
168,042
12,543
12,543
Technology Sdn. Bhd.
Jiangyin Walsin Specialty
Alloy Materials Co., Ltd.
XiAn Walsin Metal Product
Co., Ltd.
No. 677, Binjiang West Road, Jiangyin City,
Cold-rolled stainless steel and
US$
40,000
US$
40,000
Jiangsu
2/F, Building B, No. 15, Shanglinyuan First Road,
New Industrial Park, Hi-and-New Tech Park of
XiAn, Shaanxi
flat-rolled products
Production and sale of
medium and heavy
specialized stainless steel
plates
US$
55,350
US$
10,150
N/A
N/A
81.63
313,598
29,116
23,768
100.00
(173,371 )
(2,499 )
(2,499 )
(Note 4)
Yantai Walsin Stainless
No. 2 Wuzhishan Road, ETDZ Yantai City,
Production and sale of
US$
132,927
US$
132,927
N/A
54.40
412,010
5,384
2,929
(Note 3)
Steel Co., Ltd.
Shantung Province, P.R.C.
Changzhou China Steel
No. 281, Changhong Road (West), Wujin
Precision Materials Co.,
Ltd.
Economic & Technology Development Zone,
Changzhou City, Jiangsu Province
Walsin Lihwa (Changzhou)
Investment Co., Ltd.
6/F, No. 2, Tenglong Road, Wujin Economic
Development Area, Jiangsu
electronic components and
new alloy materials
Melting and forging of
nonferrous metallic
materials and composites as
well as new types of alloys
Commerce and investments
US$
XiAn Walsin
No. 15, Shanglinyuan First Road, Hi-and-New
LED, micro projector, and
US$
Opto-electronic Limited
Tech Park of XiAn, Shaanxi
XiAn Lv Jing Technology
No. 15, Shanglinyuan First Road, Hi-and-New
solar cell assembly
Solar module assembly
US$
Co., Ltd.
Tech Park of XiAn, Shaanxi
US$
13,080
US$
13,080
N/A
30.00
87,024
355
107
-
-
-
US$
49,000
US$
-
US$
45,200
N/A
N/A
N/A
-
-
-
-
3,820
3,820
-
-
-
-
-
-
(Note 4)
(Note 4)
Jiangyin Walsin
Yantai Walsin Stainless
No. 2 Wuzhishan Road, ETDZ Yantai City,
Production and sale of
168,086
168,086
N/A
45.60
345,361
5,384
2,455
(Note 3)
Specialty Alloy
Materials Co.,
Ltd.
Walsin Specialty
Steel Corp.
Steel Co., Ltd.
Shantung Province, P.R.C.
electronic components and
new alloy materials
Shanghai Baihe Walsin
No. 2402, Waiqingsong Road, Baihe Town, Qing
Manufacture and sale of
US$
39,000
US$
39,000
N/A
100.00
50,644
(1,866 )
(1,866 )
Lihwa Specialty Steel Co.,
Ltd.
Pu Zone, Shanghai
stainless steel
Changshu Walsin Specialty
No. 56 Renmin Road, Haiyu Town, Changshu
Steel Co., Ltd.
City, Jiangsu Province
Manufacture and sale of
specialized steel tubes
US$
97,000
US$
97,000
N/A
100.00
152,217
47,358
47,358
Note 1: Amounts are stated in thousands of Renminbi, except those stated in thousands of U.S. dollars.
Note 2: The amount included capitalization of retained earnings of US$4,500 thousand.
Note 3: Yantai Walsin Stainless Steel Co., Ltd. merged the Yantai Huanguai Iron & Steel Co., Ltd. and Yantai Dazong.
Note 4: XiAn Walsin Metal Product Co., Ltd. merged the XiAn Lv Jing Technology Co., Ltd. and XiAn Walsin Opto-electronic Limited
(Continued)
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4.
Information of investees that Jin-Cherng Construction Co. and its subsidiaries have controlling power or significant influence over was as follows (in thousands of U.S. dollars/New Taiwan dollars/Renminbi):
Investor
Company
Investee Company
Location
Main Businesses and
Products
December 31, 2020 December 31, 2019
Number of
Shares
Percentage
of
Ownership
(%)
Carrying Amount
Net Income (Loss)
of the Investee
Share of Profit
(Loss)
Note
Original Investment Amount
As of December 31, 2020
Jin-Cherng
Joint Success Enterprises
Construction
Co.
Limited
Vistra Corporate Services Centre
Wickhams Cay II, Road Town,
Tortola, VG1110, BVI
Investments
$
1,202,993
$
1,202,993
37,461,816
50.95
$
5,423,712
$
1,398,647
$
712,611
Dinghsin Development
5th Floor, 192 Jingye 1st Road,
Investment of real estate and
8,540
8,540
2,119,200
35.32
39,680
3,130
1,106
Co., Ltd.
Concord II Venture
Capital Co., Ltd.
Jhongshan District, Taipei 104,
Taiwan, R.O.C.
4F., No. 76, Sec. 2, Dunhua S. Rd.,
Da’an Dist., Taipei City 106,
Taiwan (R.O.C.)
related business
Venture capital and consulting
1,603
1,603
172,342
0.17
1,198
(39,579)
(7)
affairs
Chin-Xin Investment Co.,
26F., No. 1, Songzhi Rd., Xinyi Dist.,
Investments
54,154
54,154
3,264,092
0.67
110,423
196,303
1,132
Joint Success
Enterprises
Limited
Walsin (Nanjing)
Construction
Co., Ltd.
Ltd.
Taipei City, Taiwan, R.O.C.
Walsin (Nanjing)
No. 236 Jiangdong Road, Jianye
Construction Co., Ltd.
District, Nanjing, Jiangsu Province
Construction, rental and sale
of buildings and industrial
factories
US$
50,000
US$
50,000
N/A
100.00
RMB 2,275,761
RMB 326,364
RMB 326,364
Nanjing Walsin Property
Management Co., Ltd.
Walsin Nanjing Culture
and Arts Co., Ltd.
Walsin Nanjing
Commercial
Management Co., Ltd.
No. 230, Hexi Avenue, Jianye Zone,
Property management,
RMB
1,000
RMB
1,000
N/A
100.00
RMB
196
RMB
(327)
RMB
(327)
Nanjing, Jiangsu
business management and
housing leasing
Room 3, 1st basement, No. 236,
Organize culture and arts
RMB
1,500
RMB
1,500
N/A
100.00
RMB
(1,995)
RMB
(1,093)
RMB
(1,093)
Jiangdong Middle Road, Jianye
District, Nanjing City, Jiangsu.
communication activity,
cultural performance,
culture and arts forwarding
agency
Room 3, 1st basement, No. 236,
Business management, food
RMB
-
RMB
6,500
N/A
-
RMB
-
RMB
(1,236)
RMB
(1,236)
Jiangdong Middle Road, Jianye
District, Nanjing City, Jiangsu.
marketing, catering services
and sale of groceries
(Note
2)
Note 1: Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars and Renminbi.
Note 2: The liquidation of Walsin Nanjing Commercial Management Co., Ltd. was completed on December 7, 2020
(Continued)
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Information of investees that Energy Pilot Limited and its subsidiaries have controlling power or significant influence over was as follows (in thousands of U.S. dollars):
Investor Company
Investee Company
Location
Main Businesses and
Products
December 31, 2020 December 31, 2019 Number of Shares
Carrying Amount
Net Income (Loss)
of the Investee
Share of Profit
(Loss)
Note
Original Investment Amount
As of December 31, 2020
Percentage
of
Ownership
(%)
Energy Pilot Limited Green Lake Capital, LLC.
2500 Venture Oaks Way, Ste 390
Sacramento CA 95833, USA
Solar power business
$
-
$
20,670
N/A
-
$
-
$
301
$
301
(Note)
Note: The liquidation of Green Lake Capital, LLC. was completed on May 24, 2020.
(Continued)
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6.
Information of investees that Market Pilot Limited has controlling power or significant influence over was as follows (in thousands of Renminbi):
Investor Company
Investee Company
Location
Main Businesses and
Products
December 31, 2020 December 31, 2019
Number of
Shares
Percentage
of
Ownership
(%)
Carrying Amount
Net Income (Loss)
of the Investee
Share of Profit
(Loss)
Note
Original Investment Amount
As of December 31, 2020
Market Pilot Limited XiAn Walsin United
Technology Co., Ltd.
1/F, Building A, No. 29, Jinye First
Road, Gaoxin District, XiAn,
Shannxi
Electronic devices and
$
-
$
642,719
N/A
-
$
-
$
(159)
$
(159)
(Note)
modules
Note: The liquidation of XiAn Walsin United Technology Co., Ltd. was completed on December 7, 2020.
(Continued)
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Information of investees that Ace Result Global Limited has controlling power or significant influence over was as follows (in thousands of Renminbi):
Original Investment Amount
Investor
Company
Investee Company
Location
Main Businesses and
Products
December 31, 2020 December 31, 2019 Number of Shares
Carrying Amount
Net Income (Loss)
of the Investee
Share of Profit
(Loss)
Note
As of December 31, 2020
Percentage
of
Ownership
(%)
Ace Result Global
Limited
Hangzhou Walsin Power
Cable & Wire Co., Ltd.
No. 9, 12 Road, Xiasha
Production and sale of cables
$
271,744
$
271,744
N/A
24.52
$
77,219
$
28,153
$
6,903
Economic & Technology
Development Zone,
Hangzhou, Zhejiang
and wires
(Concluded)
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4
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
INFORMATION ON INVESTMENTS IN MAINLAND CHINA
FOR THE YEAR ENDED DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)
A. Walsin Lihwa Corporation
TABLE 9
1. The names of investee companies in mainland China, their main businesses and products, total amount of paid-in capital, investment type, investment flows, percentage of ownership in investment, investment gain or loss, carrying amount, accumulated
inward remittance of earnings and upper limit on investment in mainland China were as follows:
Investee Company
Main Businesses and
Products
Paid-in Capital
Method of
Investment
(Note 1)
Jiangyin Walsin Steel Cable
Manufacture and sale of steel
Co., Ltd.
cables and wires
$
(US$
569,600
20,000)
Shanghai Walsin Lihwa
Manufacture and sale of
Power Wire & Cable Co.,
Ltd.
cables and wires
(US$
445,057
15,627)
Hangzhou Walsin Power
Cable & Wire Co., Ltd.
Manufacture and sale of
cables and wires
4,616,038
(US$ 162,080)
Walsin (China) Investment
Investments
Co., Ltd.
2,238,528
78,600)
(US$
Changshu Walsin Specialty
Steel Co., Ltd.
Manufacture and sale of
specialized steel tubes
2,762,560
97,000)
(US$
Shanghai Baihe Walsin
Manufacture and sale of
Lihwa Specialty Steel Co.,
Ltd.
stainless steel
(US$
484,160
17,000)
(Note 7)
Dongguan Walsin Wire &
Cable Co., Ltd.
Manufacture and sale of bare
copper cables and wires
(US$
740,480
26,000)
Jiangyin Walsin Specialty
Manufacture and sale of
Alloy Materials Co., Ltd.
cold-rolled stainless steel
and flat rolled products
1,395,520
49,000)
(US$
XiAn Walsin Metal Product
Manufacture and sale of
Co., Ltd. (Note 13)
specialized stainless steel
plates
1,576,368
55,350)
(US$
Yantai Walsin Stainless
Production and sale of
Steel Co., Ltd.
Walsin Lihwa (Changzhou)
Investment Co., Ltd.
(Note 16)
electronic components and
new alloy materials
Commerce and investments
7,833,851
(US$ 275,065)
(Note 11)
US$
-
-
b
b
b
b
b
b
b
b
b
b
b
Accumulated
Outward
Remittance for
Investment from
Taiwan as of
January 1, 2020
$
(US$
(US$
(US$
(US$
(US$
(US$
(US$
(US$
741,648
26,041)
(Note 2)
425,947
14,956)
(Note 3)
2,592,591
91,032)
(Note 4)
2,238,528
78,600)
(Note 5)
2,762,560
97,000)
(Note 6)
1,110,720
39,000)
(Note 8)
740,480
26,000)
(Note 9)
1,395,520
49,000)
(Note 10)
Remittance of Funds
Outward
Inward
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(US$
289,072
10,150)
569,600
(US$ 20,000 )
(US$
3,785,761
132,927)
(US$
1,395,520
49,000)
-
-
-
-
Accumulated
Outward
Remittance for
Investment from
Taiwan as of
December 31, 2020
$
(US$
(US$
(US$
(US$
(US$
(US$
(US$
(US$
741,648
26,041)
(Note 2)
425,947
14,956)
(Note 3)
2,592,591
91,032)
(Note 4)
2,238,528
78,600)
(Note 5)
2,762,560
97,000)
(Note 6)
1,110,720
39,000)
(Note 8)
740,480
26,000)
(Note 9)
1,395,520
49,000)
(Note 10)
(US$
858,672
30,150)
(US$
3,785,761
132,927)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Net Income
(Loss) of the
Investee
%
Ownership
of Direct or
Indirect
Investment
Investment
Gain (Loss)
(Note 16)
Carrying
Amount as of
December 31,
2020
Accumulated
Repatriation of
Investment Income
as of
December 31, 2020
$ 78,641
100.00
$ 78,641 $ 791,974
$
81,268
95.71
77,779 1,039,962
120,666
38.93
46,975
535,121
295,662
100.00
295,662 4,184,463
202,980
100.00
202,980
664,403
(7,998 )
100.00
(7,998 )
221,053
88,040
100.00
88,040 1,652,987
124,794
100.00
124,794 1,676,841
(10,711 )
100.00
(10,711 )
(756,737 )
23,076
100.00
23,076 3,305,803
-
-
-
-
-
-
-
-
-
-
-
(Continued)
1,395,520
(US$ 49,000 )
US$
-
-
16,373
-
16,373
-
Investee Company
Main Businesses and Products
Paid-in Capital
Changzhou China Steel
Melting and forging of nonferrous
Precision Materials Co.,
Ltd.
metallic materials and composites
as well as new types of alloys
$
(US$
1,241,728
43,600)
XiAn Walsin United
Electronic devices and modules
Technology Co., Ltd.
(Note 17)
US$
-
-
Nanjing Taiwan Trade Mart
Management Co., Ltd.
Business and asset management,
consulting and advertising
services
(US$
28,480
1,000)
XiAn Lv Jing Technology
Co., Ltd. (Note 13)
Solar module assembly
Shaanxi Tianhong Silicon
Industrial Corporation
Polysilicon production
Jiangsu Taiwan Trade Mart
Development Co., Ltd.
Development and management of
Nanjing Taiwan Trade Mart
Management Co., Ltd.
Shaanxi Electronic Group
Communications equipment and
Optoelectronics
Technology Co., Ltd.
(Note 14)
electronic components
US$
-
-
5,237,808
(RMB 1,200,000)
(RMB
43,648
10,000)
679,156
(RMB 155,597)
Walsin (Nanjing)
Construction, rental and sale of
Construction Co., Ltd.
buildings and industrial factories
(US$
1,424,000
50,000)
Nanjing Walsin Property
Management Co., Ltd.
Property management, business
management and housing leasing
(RMB
Walsin Nanjing Culture and
Organize culture and arts
Arts Co., Ltd.
communication activity, cultural
performance, culture and arts
forwarding agency
(RMB
4,365
1,000)
6,547
1,500)
Walsin Nanjing Commercial
Management Co., Ltd.
(Note 18)
Business management, food
marketing, catering services and
sale of groceries
RMB
-
-
2. The upper limit on investment of WLC in mainland China was as follows:
Method of
Investment
(Note 1)
Accumulated
Outward
Remittance for
Investment from
Taiwan as of
January 1, 2020
Remittance of Funds
Outward
Inward
Accumulated
Outward
Remittance for
Investment from
Taiwan as of
December 31, 2020
Net Income
(Loss) of the
Investee
%
Ownership
of Direct or
Indirect
Investment
Investment
Gain (Loss)
(Note 16)
Carrying
Amount as of
December 31,
2020
b
b
b
c
b
b
b
b
b
b
b
$
(US$
372,518
13,080)
$
(US$
2,846,804
99,958)
(US$
28,480
1,000)
(US$
US$
(US$
569,600
20,000)
-
-
8,658
304)
RMB
-
-
(US$
1,418,304
49,800)
(Note 15)
RMB
RMB
RMB
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
$
(US$
372,518
13,080)
$
1,522
30.00
$
459 $ 379,846
2,846,804
(US$ 99,958 )
-
-
(681 )
-
(681 )
-
-
-
(US$
28,480
1,000)
(52,663 )
100.00
(52,663 )
(433,097 )
569,600
(US$ 20,000 )
-
-
-
-
-
-
-
-
-
-
-
-
-
-
US$
US$
-
-
-
-
(US$
8,658
304)
RMB
-
-
(US$
1,418,304
49,800)
(Note 15)
RMB
RMB
RMB
-
-
-
-
-
-
-
-
-
-
(2,768,581 )
19.00
-
-
(Note 12)
257
20.00
124
9,280
19,455
6.02
-
95,101
1,398,820
99.60
1,393,263 9,893,857
(1,400 )
99.60
(1,393 )
851
(4,685 )
99.60
(4,668 )
(8,673 )
(5,298 )
99.60
(5,276 )
-
Accumulated Outward Remittance for
Investment in Mainland China as of
December 31, 2020(NT$ and US$ in Thousands)
Investment Amounts Authorized by the
Investment Commission, MOEA
(NT$ and US$ in Thousands)
Upper Limit on the Amount of Investments Stipulated by
the Investment Commission, MOEA
(NT$ in Thousands)
$
(US$
16,241,859
570,290)
$
(US$
18,412,647
646,511)
N/A (Note 19)
Accumulated
Repatriation of
Investment
Income as of
December 31,
2020
$
869,210
(US$ 30,520 )
-
-
-
-
-
-
-
-
-
-
(Continued)
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Notes:
1. Investments can be classified into the following three categories:
a. Direct investment in mainland China.
b. Reinvestment in mainland China through companies in a third country.
c. Others.
2. Including US$7,563 thousand of investment through Walsin (China) Investment Co., Ltd.
3. Including US$7,929 thousand of investment through Walsin (China) Investment Co., Ltd.
4. Including US$2,800 thousand of investment through Walsin (China) Investment Co., Ltd., and US$22,730 thousand dividends appropriated from Dongguan Walsin Wire & Cable Co., Ltd., Jiangying Walsin Steel Cable Co., Ltd., Shanghai Walsin
Lihwa Power Wire & Cable Co., Ltd. and Hangzhou Walsin Power Cable & Wire Co., Ltd.
5. Capital investment of US$28,600 thousand was contributed from the accounts payable of Walsin (China) Investment Co., Ltd. to Walsin Lihwa Holdings Limited.
6. Including US$8,000 thousand of investment through Walsin Specialty Steel Corp. and US$42,000 thousand dividends appropriated from Changshu Walsin Specialty Steel Co., Ltd. and Shanghai Baihe Walsin Lihwa Specialty Steel Co., Ltd.
7. Inclusive of capital reduction to cover accumulated deficits US$22,000 thousand.
8. Including US$4,800 thousand of investment through Walsin (China) Investment.
9. Investment through Walsin (China) Investment Co., Ltd.
10. Including investments through Walsin (China) Investment Co., Ltd. of US$4,500 thousand and US$4,500 thousand of the own capital of Walsin (China) Investment Co., Ltd.
11. Including investments of its own capital of RMB578,796 thousand from Shanghai Baihe Walsin Lihwa Specialty Steel Co., Ltd., Changzhou Wujin NSL Co., Ltd. and Changshu Walsin Specialty Steel Co., Ltd. and RMB3,750 thousand made through
Changzhou Wujin NSL Co., Ltd. Including US$32,927 thousand investment through Yantai Huanghai Iron and Steel Co., Ltd. and Yantai Dazhong Recycling Resource Co., Ltd. which were merged.
12. The amount was adjusted by the capital of XiAn Lv Jing Technology Co., Ltd. of RMB228,000 thousand and by the fair value.
13. XiAn Walsin Metal Product Co., Ltd. merged XiAn Lv Jing Technology Co., Ltd. and XiAn Walsin Opto-electronic Limited.
14. Shaanxi Electronic Group Optoelectronics Technology Co., Ltd. was formerly known as Shaanxi Optoelectronics Technology Co., Ltd.
15. The amount included investment through Joint Success Enterprise Limited approved in the previous years.
16. The liquidation of Walsin Lihwa (Changzhou) Investment Co., Ltd. was completed on October 19, 2020.
17. The liquidation of XiAn Walsin United Technology Co., Ltd. was completed on December 7, 2020.
18. The liquidation of Walsin Nanjing Commercial Management Co., Ltd. was completed on December 7, 2020.
19. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars and Renminbi.
20. The currency exchange rates as of December 31, 2020 were as follows: US$ to NT$ = 1:28.48, RMB to NT$ = 1:4.36484. The average exchange rates of December 31, 2020 were as follows: US$ to NT$ = 1:29.549, RMB to NT$ = 1:4.28608.
21. Amount was recognized based on reviewed financial statements.
22. Upper limit on investment:
WLC was approved as the operation headquarter by the Industrial Development Bureau, Ministry of Economic Affairs and is thus exempted from the related regulations of “Regulations Governing the Approval of Investment or Technical Cooperation
in Mainland China”.
(Continued)
B.
Jin-Cherng Construction Co.
1. The names of investee companies in mainland China, their main businesses and products, total amount of paid-in capital, investment type, investment flows, percentage of ownership in investment, investment gain or loss, carrying amount, accumulated
inward remittance of earnings and upper limit on investment in mainland China were as follows:
(In Thousands of U.S. and Renminbi)
Investee Company
Main Businesses and
Products
Paid-in
Capital
Method of
Investment
Accumulated
Outward
Remittance for
Investment from
Taiwan as of
January 1, 2020
Remittance of Funds
Outward
Inward
Accumulated
Outward
Remittance for
Investment from
Taiwan as of
December 31, 2020
Net Income
(Loss) of the
Investee
%
Ownership
of Direct or
Indirect
Investment
Investment
Gain (Loss)
(Note 2)
Carrying
Amount as of
December 31,
2020
Accumulated
Repatriation of
Investment Income
as of
December 31, 2020
Walsin (Nanjing)
Construction, rental and sale of
US$ 50,000 Note 1
US$ 25,475
$
Construction Limited
buildings and industrial
factories
Nanjing Walsin Property
Management Co., Ltd.
Property management, business
management and housing
leasing
1,000 Note 1
Walsin Nanjing Culture
and Arts Co., Ltd.
Organize culture and arts
1,500 Note 1
communication activity,
cultural performance, culture
and arts forwarding agency
Walsin Nanjing
Commercial
Management Co., Ltd.
Business management, food
marketing, catering services
and sale of groceries
- Note 1
-
-
-
-
-
-
-
2. The upper limit on investment in mainland China
$
-
US$ 25,475
$
326,364
50.95
$
166,282
$ 1,159,500
$
-
-
-
(327)
50.95
(166)
100
(1,093)
50.95
(557)
(1,016)
(1,236)
50.95
(630)
-
Accumulated Outward Remittance for
Mainland China as of December 31, 2020
(US$ in Thousands)
Investment Amounts Authorized by the
Investment Commission, MOEA
(US$ in Thousands)
Upper Limit on the Amount of Investments Stipulated by the
Investment Commission, MOEA
(NT$ in Thousands)
US$$25,475
US$$25,475
NT$3,901,555 (Note 3)
Note 1:
Investing in companies in mainland China through the companies already established and existing in the areas other than Taiwan and mainland China.
Note 2: Amount was recognized based on reviewed financial statements.
Note 3: The upper limit on investment in mainland China was as follows:
NT$6,502,592 thousand × 60% = NT$3,901,555 thousand.
Note 4: Amounts are stated in thousands of Renminbi, except those stated in thousands of U.S. dollars.
-
-
-
-
(Concluded)
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WALSIN LIHWA CORPORATION AND INVESTEES
INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars, US Dollars and Renminbi)
TABLE 10
No.
Investee Company
Counterparty
Relationship
Financial Statement
Accounts
Amount
Payment Terms
Transaction Details
% of Total
Sales or
Assets
2020
0 Walsin Lihwa Corporation Dongguan Walsin Wire & Cable
Co., Ltd.
Changshu Walsin Specialty Steel
Co., Ltd.
Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
Dongguan Walsin Wire & Cable
Co., Ltd.
Changshu Walsin Specialty Steel
Co., Ltd.
Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
Shanghai Walsin Lihwa Power
Wire & Cable Co., Ltd.
Yantai Walsin Stainless Steel Co.,
Ltd.
PT. Walsin Nickel Industrial
Indonesia
1 Walsin Lihwa Holdings
Walsin (China) Investment Co.,
Limited
Ltd.
Walsin Lihwa Corporation
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Trade receivables
$
207,701 The terms are set by quotations on the local market
and are similar to those of general customers
Trade receivables
7,732 The terms are set by quotations on the local market
and are similar to those of general customers
Trade receivables
99,820 The terms are set by quotations on the local market
Sales
Sales
Sales
Sales
Sales
and are similar to those of general customers
2,482,034 The terms are set by quotations on the local market
and are similar to those of general customers
47,457 The terms are set by quotations on the local market
and are similar to those of general customers
200,926 The terms are set by quotations on the local market
and are similar to those of general customers
1,733 The terms are set by quotations on the local market
and are similar to those of general customers
18,654 The terms are set by quotations on the local market
and are similar to those of general customers
Long-term receivables
5,349,885 Based on capital demand
Other receivables
RMB 321,124 Based on capital demand
Trade receivables
RMB
10,499 The terms are set by quotations on the local market
and are similar to those of general customers
2
Joint Success Enterprise
Walsin (Nanjing) Construction
Limited
Co., Ltd.
Transactions between parent
company and subsidiaries
Other receivables
RMB 177,219 Based on capital demand
-
-
-
2
-
-
-
-
4
1
-
1
(Continued)
No.
Investee Company
Counterparty
Relationship
Financial
Statement
Accounts
Transaction Details
Amount
Payment Terms
% of Total
Sales or
Assets
3 Walsin (China)
Walsin Lihwa Holdings Limited
Investment Co., Ltd.
Transactions between parent
company and subsidiaries
Other receivables US$
4,900 Based on capital demand
Yantai Walsin Specialty Steel Co., Ltd.
Transactions between subsidiaries Other receivables US$
72,407
RMB 435,970
Based on capital demand
Jiangyin Walsin Specialty Alloy Materials Co.,
Transactions between subsidiaries Other receivables US$
44,564 Based on capital demand
Ltd.
Jiangyin Walsin Steel Cable Co., Ltd.
Shanghai Walsin Lihwa Power Wire & Cable
Co., Ltd.
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Other receivables US$
9,987
RMB 295,409
Based on capital demand
Other receivables US$
8,986 Based on capital demand
Changshu Walsin Specialty Steel Co., Ltd.
Walsin (Nanjing) Construction Co., Ltd.
Hangzhou Walsin Power Cable & Wire Co., Ltd. Associates
XiAn Walsin Metal Product Co., Ltd.
Nanjing Taiwan Trade Mart Management Co.,
Transactions between subsidiaries Other receivables US$
46,675 Based on capital demand
Transactions between subsidiaries Other receivables RMB 250,291 Based on capital demand
81,218 Based on capital demand
Transactions between subsidiaries Other receivables RMB 173,857 Based on capital demand
55,292 Based on capital demand
Transactions between subsidiaries Other receivables RMB
Other receivables RMB
Ltd.
Dongguan Walsin Wire & Cable Co., Ltd
4 Walsin International
Walsin Lihwa Corporation
Investments Limited
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Other receivables US$
78,600 Based on capital demand
Other receivables RMB 1,305,589 Based on capital demand
Walsin (China) Investment Co., Ltd.
Transactions between subsidiaries Other receivables RMB 2,436,212 Based on capital demand
5 Yantai Walsin Stainless
Steel Co., Ltd.
Changshu Walsin Specialty Steel Co., Ltd.
Transactions between subsidiaries Trade receivables RMB
30,471 The terms are set by quotations on the local market
and are similar to those of general customers
Jiangyin Walsin Specialty Alloy Materials Co.,
Transactions between subsidiaries Trade receivables RMB
26,445 The terms are set by quotations on the local market
Ltd.
and are similar to those of general customers
Changshu Walsin Specialty Steel Co., Ltd.
Transactions between subsidiaries Sales
RMB 234,934 The terms are set by quotations on the local market
Jiangyin Walsin Specialty Alloy Materials Co.,
Transactions between subsidiaries Sales
RMB 172,669 The terms are set by quotations on the local market
Ltd.
and are similar to those of general customers
and are similar to those of general customers
6 Jiangyin Walsin
Yantai Walsin Stainless Steel Co., Ltd.
Transaction between subsidiaries Other receivables RMB
6,228 Based on capital demand
Specialty Alloy
Materials Co., Ltd.
Yantai Walsin Stainless Steel Co., Ltd.
Transaction between subsidiaries Trade receivables RMB
2,066 The terms are set by quotations on the local market
and are similar to those of general customers
Yantai Walsin Stainless Steel Co., Ltd.
Transaction between subsidiaries Sales
RMB
11,060 The terms are set by quotations on the local market
and are similar to those of general customers
Walsin (China) Investment Co., Ltd.
Transaction between subsidiaries Other receivables RMB 174,069 Based on capital demand
7 Walsin Specialty Steel
Changshu Walsin Specialty Steel Co., Ltd.
Corp.
Shanghai Baihe Walsin Lihwa Specialty Steel
Co., Ltd.
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Other receivables RMB
8,453 Based on capital demand
Other receivables RMB
553 Based on capital demand
2
8
9
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-
3
1
1
-
1
1
-
1
-
1
4
7
-
-
1
1
-
-
-
1
-
-
(Continued)
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No.
Investee Company
Counterparty
Relationship
Financial Statement
Accounts
Amount
Payment Terms
Transaction Details
% of Total
Sales or
Assets
8 Changshu Walsin Specialty
Jiangyin Walsin Specialty Alloy
Transaction between subsidiaries Trade receivables
Steel Co., Ltd.
Materials Co., Ltd.
Yantai Walsin Stainless Steel Co.,
Transaction between subsidiaries Trade receivables
Ltd.
Walsin Lihwa Corporation
Transactions between subsidiaries
Sales
and parent company
Jiangyin Walsin Specialty Alloy
Transaction between subsidiaries Sales
Materials Co., Ltd.
Yantai Walsin Stainless Steel Co.,
Transaction between subsidiaries Sales
Ltd.
Walsin (China) Investment Co., Ltd. Transactions between subsidiaries Other receivables
Transactions between subsidiaries Trade receivables
Changzhou China Steel Precision
RMB
RMB
RMB
RMB
RMB
RMB
RMB
71
7,122
50
871
6,677
1,220
Materials Co., Ltd.
Changzhou China Steel Precision
Materials Co., Ltd.
Transactions between subsidiaries Sales
RMB
1,945
2019
0 Walsin Lihwa Corporation Dongguan Walsin Wire & Cable Co.,
Ltd.
Nanjing Walsin Metal Co., Ltd.
Changshu Walsin Specialty Steel Co.,
Ltd.
Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
Dongguan Walsin Wire & Cable Co.,
Ltd.
Changshu Walsin Specialty Steel Co.,
Ltd.
Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
Nanjing Walsin Metal Co., Ltd.
Shanghai Walsin Lihwa Power Wire
& Cable Co., Ltd.
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Trade receivables
$
955,288
Trade receivables
Trade receivables
Trade receivables
Sales
Sales
Sales
Sales
Sales
35,579
16,734
28,382
4,045,695
60,608
130,807
19,156
1,149
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
49,075 Based on capital demand
1 Walsin Lihwa Holdings
Limited
Walsin (China) Investment Co., Ltd. Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Walsin Lihwa Corporation
Other receivables
RMB 1,748,310 Based on capital demand
Other receivables
RMB 1,129,975 Based on capital demand
2 Nanjing Walsin Metal Co.,
Shanghai Walsin Lihwa Power Wire
Transactions between subsidiaries Sales
Ltd.
& Cable Co., Ltd.
Dongguan Walsin Wire & Cable Co.,
Transactions between subsidiaries Sales
Ltd.
RMB 154,826
RMB
70,184
The terms are set by quotations on the local market
and are similar to those of general customers
The terms are set by quotations on the local market
and are similar to those of general customers
3 Concord Industries Limited Walsin (China) Investment Co., Ltd. Transactions between subsidiaries Other receivables
RMB 1,241,764 Based on capital demand
-
-
-
-
-
-
-
-
1
-
-
-
3
-
-
-
5
4
1
-
4
(Continued)
No.
Investee Company
Counterparty
Relationship
Financial
Statement
Accounts
Transaction Details
Amount
Payment Terms
% of Total
Sales or
Assets
4 Joint Success Enterprise
Walsin (Nanjing) Construction Co., Ltd.
Limited
Transactions between parent
company and subsidiaries
Other receivables RMB
188,808 Based on capital demand
5 Walsin (China)
Walsin Lihwa Holdings Limited
Transactions between subsidiaries
Other receivables US$
4,900 Based on capital demand
Investment Co., Ltd.
and parent company
Yantai Walsin Specialty Steel Co., Ltd.
Jiangyin Walsin Specialty Alloy Materials Co.,
Transactions between subsidiaries Other receivables US$
Transactions between subsidiaries Other receivables US$
63,725 Based on capital demand
44,744 Based on capital demand
Ltd.
Jiangyin Walsin Steel Cable Co., Ltd.
Shanghai Walsin Lihwa Power Wire & Cable
Co., Ltd.
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Other receivables US$
9,848
RMB 191,758
Based on capital demand
Other receivables US$
8,784 Based on capital demand
Changshu Walsin Specialty Steel Co., Ltd.
Walsin (Nanjing) Construction Co., Ltd.
Hangzhou Walsin Power Cable & Wire Co., Ltd. Associates
Shanghai Baihe Walsin Lihwa Specialty Steel
53,963 Based on capital demand
Transactions between subsidiaries Other receivables US$
Transactions between subsidiaries Other receivables RMB 921,772 Based on capital demand
81,319 Based on capital demand
92,777 Based on capital demand
Other receivables RMB
Transaction between subsidiaries Other receivables RMB
Co., Ltd.
XiAn Walsin Metal Product Co., Ltd.
Nanjing Taiwan Trade Mart Management Co.,
Transaction between subsidiaries Other receivables RMB 171,568 Based on capital demand
67,453 Based on capital demand
Transaction between subsidiaries Other receivables RMB
Ltd.
Dongguan Walsin Wire & Cable Co., Ltd
Transactions between subsidiaries
Other receivables US$
24,111 Based on capital demand
and parent company
6 Yantai Walsin Stainless
Steel Co., Ltd.
Changshu Walsin Specialty Steel Co., Ltd.
Transactions between subsidiaries Trade receivables RMB
28,874 The terms are set by quotations on the local market
and are similar to those of general customers
Jiangyin Walsin Specialty Alloy Materials Co.,
Transactions between subsidiaries Trade receivables RMB
21,846 The terms are set by quotations on the local market
Ltd.
and are similar to those of general customers
Changshu Walsin Specialty Steel Co., Ltd.
Transactions between subsidiaries Sales
RMB
237,676 The terms are set by quotations on the local market
and are similar to those of general customers
Jiangyin Walsin Specialty Alloy Materials Co.,
Transactions between subsidiaries Sales
RMB
120,835 The terms are set by quotations on the local market
Ltd.
and are similar to those of general customers
7 Jiangyin Walsin
Yantai Walsin Stainless Steel Co., Ltd.
Transaction between subsidiaries Trade receivables RMB
2,161 The terms are set by quotations on the local market
Specialty Alloy
Materials Co., Ltd.
and are similar to those of general customers
Yantai Walsin Stainless Steel Co., Ltd.
Transaction between subsidiaries Sales
RMB
12,568 The terms are set by quotations on the local market
and are similar to those of general customers
8 Walsin Specialty Steel
Changshu Walsin Specialty Steel Co., Ltd.
Transactions between subsidiaries
Other receivables RMB
8,453 Based on capital demand
Corp.
and parent company
Shanghai Baihe Walsin Lihwa Specialty Steel
Transactions between subsidiaries
Other receivables RMB
553 Based on capital demand
Co., Ltd.
and parent company
2
9
1
291
1
-
1
1
1
-
1
3
-
-
1
-
1
-
-
1
-
-
-
-
-
(Continued)
2
9
2
No.
Investee Company
Counterparty
Relationship
Financial Statement
Accounts
Amount
Payment Terms
Transaction Details
% of Total
Sales or
Assets
i
F
n
a
n
c
a
i
l
9 Changshu Walsin
Jiangyin Walsin Specialty Alloy
Transaction between subsidiaries Trade receivables
RMB
79 The terms are set by quotations on the local market
Specialty Steel Co.,
Ltd.
Materials Co., Ltd.
and are similar to those of general customers
Yantai Walsin Stainless Steel Co., Ltd. Transaction between subsidiaries Trade receivables
RMB
3,450 The terms are set by quotations on the local market
Walsin Lihwa Corporation
Transactions between
Sales
RMB
78 The terms are set by quotations on the local market
and are similar to those of general customers
subsidiaries and parent
company
and are similar to those of general customers
Jiangyin Walsin Specialty Alloy
Transaction between subsidiaries Sales
RMB
1,324 The terms are set by quotations on the local market
Materials Co., Ltd.
and are similar to those of general customers
Yantai Walsin Stainless Steel Co., Ltd. Transaction between subsidiaries Sales
RMB
5,993 The terms are set by quotations on the local market
and are similar to those of general customers
I
n
f
o
r
m
a
t
i
o
n
-
-
-
-
-
(Concluded)
TABLE 11
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
INFORMATION OF MAJOR SHAREHOLDERS
DECEMBER 31, 2020
Name of Major Shareholder
Shares
Number of
Shares
Percentage of
Ownership
(%)
LGT Bank (Singapore) Investment Fund under the custody of
247,025,000
7.65
Standard Chartered
Winbond Electronics Corp.
Chin-Xin Investment Co., Ltd.
222,000,000
210,011,000
6.88
6.81
Note 1: The information of major shareholders presented in this table is provided by the Taiwan
Depository & Clearing Corporation 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 WLC as of the last business day for the
current quarter. The share capital in the consolidated financial statements may differ from
the actual number of shares that have been issued without physical registration because of
different preparation basis.
Note 2: If a shareholder delivers their shareholdings to the trust, the above information will be
disclosed by the individual trustee who opened the trust account. For shareholders who
declare insider shareholdings with ownership greater than 10% in accordance with Security
and Exchange Act, the shareholdings include shares held by shareholders and those delivered
to the trust over which shareholders have rights to determine the use of trust property. For
information relating to insider shareholding declaration, please refer to Market Observation
Post System.
293
Financial Information
5. Financial report of the parent company of the most recent year audited and certified
by Supervisors
INDEPENDENT AUDITORS’ REPORT
The Board of Directors and Shareholders
Walsin Lihwa Corporation
Opinion
We have audited the accompanying financial statements of Walsin Lihwa Corporation (the
“Company”), which comprise the balance sheets as of December 31, 2020 and 2019, and the
statements of comprehensive income, changes in equity and cash flows for the years then ended, and
the notes to the financial statements, including a summary of significant accounting policies.
In our opinion, based on our audits and the reports of other auditors (as set out in the Other Matter
section of our report), the accompanying financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2020 and 2019, and its financial
performance and its cash flows for the years then ended in accordance with the Regulations Governing
the Preparation of Financial Reports by Securities Issuers.
Basis for Opinion
We conducted our audit of the financial statements for the year ended December 31, 2020 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. We
conducted our audit of the financial statements for the year ended December 31, 2019 in accordance
with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public
Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission of the Republic
of China on February 25, 2020 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 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.
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 financial statements as of and for the year ended December 31, 2020. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
The following are key audit matter of the Company’s financial statements as of and for the year ended
December 31, 2020:
294
Sales Revenue Recognition
In 2020, the main products of the Company's wires and cables business unit include bare copper wires,
wires and cables. The fluctuation in prices of bare copper wires is often subject to the movement in
prices of raw materials, and thus some of the sales prices are set according to the market prices agreed
under the contracts at the time of shipments. The Company prepares reports on point of sale
transactions by referring to the actual shipments and market price adjustments as the basis for revenue
recognition. Due to the large number of transactions and different market prices that have been agreed
upon by customers, the processing, recording and maintenance of such reports are performed manually
in which their amounts are significant to the financial statements. Therefore, the accuracy of revenue
recognized from sales of bare copper wires was considered as a key audit matter. Refer to Notes 4 and
20 to the financial statements for related accounting policies and disclosure of information relating to
revenue recognition.
Our audit procedures performed in respect of the above key audit matter were as follows:
1. We obtained an understanding and tested the reasonableness of revenue recognition policy and
internal control procedures over the sales of bare copper wires, and evaluated the effectiveness of
relevant internal controls.
2. We performed sampling and reconciliation of sales prices and quantities with their respective
amounts in the contracts and verified the accuracy of market price adjustments.
3. We verified the accuracy of monthly reports by recalculating the sales revenue and confirmed that
the recognized amounts were consistent with those recorded in the general ledger.
Other Matter
The financial statements of certain equity-method investees included in the financial statements as of
and for the years ended December 31, 2020 and 2019 were audited by other auditors. Our opinion,
insofar as it relates to such investments, is based solely on the reports of other auditors. The
investments in such investees amounted to NT$4,238,472 thousand and NT$3,574,547 thousand,
which constituted 3.02% and 2.97% of the total assets as of December 31, 2020 and 2019, respectively;
and the investment gains amounted to NT$995,518 thousand and NT$56,873 thousand for the years
ended December 31, 2020 and 2019, respectively.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers,
and for such internal control as management determines is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless management either intends to liquidate the Company or
to cease operations, or has no realistic alternative but to do so.
Those charged with governance (including audit committee) are responsible for overseeing the
Company’s financial reporting process.
295
Financial Information
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an 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 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 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 Company’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 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 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.
5. Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or
business activities within the Company to express an opinion on the financial statements. We are
responsible for the direction, supervision, and performance of the audit. We remain solely
responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
296
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements 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.
The engagement partners on the audit resulting in this independent auditors’ report are Wen-Yea Shyu
and Kwan-Chung Lai.
Deloitte & Touche
Taipei, Taiwan
Republic of China
February 26, 2021
Notice to Readers
The accompanying 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 applied in the Republic of China.
For the convenience of readers, the independent auditors’ report and the accompanying 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 financial statements shall prevail.
297
Financial Information
WALSIN LIHWA CORPORATION
BALANCE SHEETS
DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)
ASSETS
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)
Financial assets at fair value through profit or loss - current (Notes 4 and 7)
Contract assets - current (Notes 4 and 8)
Notes receivable from unrelated parties (Notes 4, 9 and 27)
Trade receivables from unrelated parties (Notes 4 and 9)
Trade receivables from related parties (Notes 4, 9 and 27)
Other receivables (Note 27)
Inventories (Notes 4 and 10)
Other current assets (Note 6)
Total current assets
NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 4 and 7)
Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 11)
Investments accounted for using equity method (Notes 4 and 12)
Property, plant and equipment (Notes 4 and 13)
Right-of-use assets (Notes 4 and 14)
Investment properties (Notes 4 and 15)
Deferred tax assets - non-current (Notes 4 and 22)
Refundable deposits
Long-term receivables (Note 27)
Other non-current assets
Total non-current assets
TOTAL
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 16)
Financial liabilities at fair value through profit or loss - current (Notes 4 and 7)
Derivative financial liabilities hedging - current (Notes 4 and 17)
Trade payables to unrelated parties
Current tax liabilities (Notes 4 and 22)
Other payables to unrelated parties
Other payables to related parties (Note 27)
Lease liabilities - current (Notes 4 and 14)
Current portion of long-term borrowings (Note 16)
Other current liabilities
Total current liabilities
NON-CURRENT LIABILITIES
Long-term borrowings (Note 16)
Deferred tax liabilities - non-current (Notes 4 and 22)
Lease liabilities - non-current (Notes 4 and 14)
Net defined benefit liabilities (Notes 4 and 18)
Other non-current liabilities (Note 24)
Total non-current liabilities
Total liabilities
EQUITY (Note 19)
Share capital
Capital surplus
Retained earnings
Legal reserve
Special reserve
Unappropriated earnings
Total retained earnings
Other equity
Exchange differences on translation of the financial statements of foreign operations
Unrealized gain (loss) on financial assets at fair value through other comprehensive income
Total other equity
Total equity
TOTAL
The accompanying notes are an integral part of the financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
298
2020
2019
Amount
%
Amount
%
$
4,511,090
66,059
12,937
27,277
2,243,175
342,552
271,722
8,502,797
2,443,728
18,421,337
5,683,859
6,783,229
77,247,465
17,493,296
80,629
8,314,798
981,573
26,913
5,349,885
87,872
122,049,519
3
-
-
-
2
-
-
6
2
13
4
5
55
12
-
6
1
-
4
-
87
$
1,284,354
52,589
331,195
52,753
1,590,771
1,014,422
2,555,588
9,359,888
373,906
16,615,466
-
5,047,457
71,708,531
17,621,858
44,086
8,417,355
863,000
59,779
-
1
103,762,067
1
-
-
-
2
1
2
8
-
14
-
4
59
15
-
7
1
-
-
-
86
$ 140,470,856
100
$ 120,377,533
100
$
6,591,019
15,839
165,774
2,522,328
108,164
2,237,404
5,772,308
20,500
6,000,000
759,039
24,192,375
31,140,014
131,132
61,202
290,237
187,661
31,810,246
56,002,621
32,260,002
15,690,406
5,428,200
3,110,410
27,791,577
36,330,187
(5,905,135)
6,092,775
187,640
84,468,235
$ 140,470,856
5
-
-
2
-
2
4
-
4
-
17
22
-
-
1
-
23
40
23
11
4
2
20
26
(4)
4
-
60
100
$
9,350,000
-
55,402
2,499,976
278,669
2,056,203
4,809,068
19,218
6,500,000
131,813
25,700,349
16,500,000
131,132
25,265
462,196
174,250
17,292,843
42,993,192
33,260,002
16,055,238
5,113,232
4,043,138
22,023,141
31,179,511
(5,546,359)
2,435,949
(3,110,410)
77,384,341
$ 120,377,533
8
-
-
2
-
2
4
-
5
-
21
14
-
-
1
-
15
36
28
13
4
4
18
26
(5)
2
(3)
64
100
WALSIN LIHWA CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2020
2019
Amount
%
Amount
%
OPERATING REVENUE (Notes 4 and 20)
$
64,097,690
100
$
71,596,648
100
OPERATING COSTS (Note 10)
(59,641,481)
(93)
(67,448,244)
(94)
REALIZED GAIN ON THE TRANSACTIONS
WITH SUBSIDIARIES AND ASSOCIATES
GROSS PROFIT
OPERATING EXPENSES
Selling and marketing expenses
General and administrative expenses
Research and development expenses
Total operating expenses
PROFIT FROM OPERATIONS
NON-OPERATING INCOME AND EXPENSES
Interest income
Dividend income
Other income
Loss (gain) on disposal of property, plant and
equipment
Gain on disposal of investment properties
(Note 27)
Foreign exchange gain, net
Gain (loss) on valuation of financial assets and
liabilities at fair value through profit or loss
Impairment loss (Note 21)
Other expenses
Loss on disposal of investments (Note 21)
Interest expense
Share of profit of subsidiaries and associates
under the equity method
1,357
4,457,566
745,090
915,989
115,346
1,776,425
2,681,141
151,325
110,905
70,318
(5,483)
-
73,937
728,770
-
(264,156)
(365,451)
(452,964)
3,935,768
Total non-operating income and expenses
3,982,969
-
7
1
2
-
3
4
-
-
-
-
-
-
1
-
-
-
-
6
7
PROFIT BEFORE INCOME TAX FROM
CONTINUING OPERATIONS
INCOME TAX BENEFIT (Notes 4 and 22)
NET PROFIT FOR THE YEAR
6,664,110
27,039
6,691,149
11
-
11
7,447
4,155,851
764,642
804,823
141,208
1,710,673
2,445,178
14,756
136,125
42,830
902
246,877
61,396
(85,444)
(1,678,822)
(60,700)
(1,289,999)
(535,938)
3,792,534
644,517
3,089,695
59,984
3,149,679
-
6
1
1
-
2
4
-
-
-
-
1
-
-
(2)
-
(2)
(1)
5
1
5
-
5
(Continued)
299
Financial Information
WALSIN LIHWA CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2020
2019
Amount
%
Amount
%
OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit plans
(Notes 4 and 18)
$
43,670
Unrealized gain on investments in equity
instruments at fair value through other
comprehensive income
Share of the other comprehensive income of
associates accounted for using the equity
method
Items that may be reclassified subsequently to
profit or loss:
Exchange differences on translation of the
financial statements of foreign operations
Gain on cash flow hedges
Share of other comprehensive loss of
associates accounted for using the equity
method
1,258,198
2,479,966
3,781,834
(276,160)
-
(82,616)
(358,776)
Other comprehensive income for the year,
net of income tax
3,423,058
-
2
4
6
(1)
-
-
(1)
5
$
(22,786)
1,572,352
1,361,083
2,910,649
(1,748,719)
1,151
(230,099)
(1,977,667)
932,982
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
$
10,114,207
16
$
4,082,661
EARNINGS PER SHARE (Note 23)
Basic
Diluted
$
$
2.04
2.04
$
$
0.95
0.95
-
2
2
4
(3)
-
-
(3)
1
6
The accompanying notes are an integral part of the financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
(Concluded)
300
WALSIN LIHWA CORPORATION
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)
Share Capital
Capital Surplus
Legal Reserve
Special Reserve
Retained Earnings
Unappropriated
Earnings
Exchange Differences
on Translating the
Financial Statements
of Foreign Operations
Other Equity
Unrealized Valuation
Gain (Loss) on
Financial Assets at
Fair Value through
Other Comprehensive
Income
Cash Flow Hedges Treasury Shares
Total Equity
BALANCE AT JANUARY 1, 2019
$ 33,260,002
$ 15,966,420
$ 3,937,554
$
2,712,250
$ 25,494,923
$ (3,567,540)
$
(474,446)
$
(1,151 )
$
Appropriation of 2018 earnings (Note 19)
Legal reserve
Special reserve
Cash dividends
Excess of the consideration received over the carrying
amount of the subsidiaries' disposed net assets
Change in capital surplus and retained earnings from
investments in accounted for using the equity method
Net profit for the year ended December 31, 2019
Other comprehensive income (loss) for the year ended
December 31, 2019, net of income tax
Total comprehensive income (loss) for the year ended
December 31, 2019
Others
-
-
-
-
-
-
-
-
-
-
-
-
1,175,678
-
-
-
1,330,888
-
(615 )
89,443
-
-
-
(10 )
-
-
-
-
-
-
-
-
-
-
-
-
(1,175,678)
(1,330,888)
(3,991,200)
(123,950)
55,134
3,149,679
-
-
-
-
-
-
-
-
-
-
(55,134)
-
(54,879)
(1,978,819)
2,965,529
3,094,800
(1,978,819)
2,965,529
-
-
-
BALANCE AT DECEMBER 31, 2019
33,260,002
16,055,238
5,113,232
4,043,138
22,023,141
(5,546,359)
2,435,949
Appropriation of 2019 earnings (Note 19)
Legal reserve
Special reserve
Cash dividends
Excess of the consideration received over the carrying
amount of the subsidiaries' disposed net assets
Change in capital surplus from investments in associates
accounted for using the equity method
Net profit for the year ended December 31, 2020
Other comprehensive income (loss) for the year ended
December 31, 2020, net of income tax
Total comprehensive income (loss) for the year ended
December 31, 2020
Buy-back of ordinary shares
-
-
-
-
-
-
-
-
-
-
-
-
-
135,304
-
-
-
-
Cancelation of treasury shares
(1,000,000)
(500,108 )
Others
-
(28 )
314,968
-
-
-
(932,728)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(314,968)
932,728
(1,663,000)
(2,481)
97,145
6,691,149
-
-
-
-
-
-
-
-
-
-
(97,145)
-
27,863
(358,776)
3,753,971
6,719,012
(358,776)
3,753,971
-
-
-
-
-
-
-
-
-
BALANCE AT DECEMBER 31, 2020
$ 32,260,002
$ 15,690,406
$ 5,428,200
$
3,110,410
$ 27,791,577
$ (5,905,135)
$
6,092,775
$
-
-
-
-
-
-
1,151
1,151
-
-
-
-
-
-
-
-
-
-
-
-
-
-
The accompanying notes are an integral part of the financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
3
0
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$ 77,328,012
-
-
(3,991,200)
(124,565)
89,443
3,149,679
932,982
4,082,661
(10)
77,384,341
-
-
(1,663,000)
(2,481)
135,304
6,691,149
3,423,058
10,114,207
(1,500,108 )
(1,500,108)
1,500,108
-
-
$
-
(28)
$ 84,468,235
Financial Information
WALSIN LIHWA CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments for:
Depreciation expense
Amortization expense
Expected credit loss reversed on trade receivables
Net (gain) loss on fair value change of financial assets and
liabilities designated as at fair value through profit or loss
Interest expense
Interest income
Dividend income
Share of profit of subsidiaries and associates under the equity
method
Loss (gain) on disposal of property, plant and equipment
Gain on disposal of investment properties
Loss on disposal of investments
Impairment loss recognized on non-financial assets
Realized gain on the transaction with associates
Gain on lease modifications
Net loss on foreign currency exchange
Changes in operating assets and liabilities
Increase in financial assets mandatorily classified as at fair
value through profit or loss
Decrease (increase) in contract assets
Decrease in notes receivable
Decrease in trade receivables
Decrease (increase) in other receivables
Decrease in inventories
(Increase) decrease in other current assets
Increase in other financial assets
Increase in other operating assets
Increase (decrease) in trade payables
Increase (decrease) in other payables
Decrease in net defined benefit liabilities
Increase (decrease) in other current liabilities
Increase (decrease) in other operating liabilities
Cash generated from operations
Interest paid
Interest received
Dividends received
Income tax paid
Net cash generated from operating activities
302
2020
2019
$ 6,664,110
$ 3,089,695
1,279,845
222
-
1,205,774
-
(900 )
(728,770 )
452,964
(151,325 )
(110,905 )
85,444
535,938
(14,756 )
(136,125 )
(3,935,768 ) (3,792,534 )
(902 )
(246,877 )
1,289,999
1,678,822
(7,447 )
-
52,238
5,483
-
365,451
-
(1,357 )
(38 )
130,929
(214,241 ) (1,077,055 )
(286,857 )
318,258
31,695
25,476
453,555
19,466
(20,589 )
20,229
1,925,349
857,092
361,958
-
-
(1,345,812 )
(287,145 )
(144,668 )
(28,502 )
(26,524 )
3,293,774
(542,489 )
14,799
2,701,498
(608,646 )
(1,982,992 )
(86,833 )
(85,778 )
22,352
7,471
(128,289 )
628,583
13,412
3,385,047
(373,617 )
151,360
1,023,577
(264,356 )
3,922,011
4,858,936
(Continued)
WALSIN LIHWA CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through other
comprehensive income
Purchase of financial assets at fair value through profit or loss
Proceeds from sale of derivative financial assets for hedging
Acquisition of associates accounted for using the equity method
Repatriation through the liquidation and capital reduction of
investee companies accounted for using the equity method
Payments for property, plant and equipment
Proceeds from disposal of property, plant and equipment
Decrease (increase) in refundable deposits
Increase in other receivables
Payments for investment properties
Proceeds from the disposal of investment properties
Other investing activities
2020
2019
$ (477,574 ) $
(5,353,790 )
-
(7,181,164 )
(169,868 )
-
1,151
(835,688 )
1,465
32,866
(5,573,463 )
10,044,855
-
(1,025,204 ) (2,397,498 )
1,588
(1,487 )
-
(1,211 )
250,420
(424,258 )
(370,896 )
-
-
Net cash used in investing activities
(9,902,905 ) (3,576,851 )
CASH FLOWS FROM FINANCING ACTIVITIES
(Repayments of) proceeds from short-term borrowings
Proceeds from long-term borrowings
Decrease in long-term borrowings
Increase in other payables to related parties
Repayment of the principal portion of lease
Cash dividends paid
Payments for buy-back of ordinary shares
Other financing activities
(2,708,228 ) 1,254,304
20,640,014
10,500,000
(6,500,000 ) (11,500,000 )
2,807,134
(18,097 )
(1,662,891 ) (3,991,018 )
-
(1,500,108 )
(28 )
(10 )
962,923
(24,052 )
Net cash generated from (used in) financing activities
9,207,630
(947,687 )
NET INCREASE IN CASH AND CASH EQUIVALENTS
3,226,736
334,398
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF
THE YEAR
1,284,354
949,956
CASH AND CASH EQUIVALENTS AT THE END OF THE
YEAR
$ 4,511,090
$ 1,284,354
The accompanying notes are an integral part of the financial statements.
(With Deloitte & Touche auditors’ report dated February 26, 2021)
(Concluded)
303
Financial Information
WALSIN LIHWA CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019
(In Thousands of New Taiwan Dollars)
1. GENERAL INFORMATION
Walsin Lihwa Corporation (the “Company”) was incorporated in December 1966 and commenced
business in December 1966. The Company made various investments in construction, electronics,
material science, real estate, etc., to diversify its operations. The Company’s main products are
wires, cables and stainless steel.
The Company’s shares have been listed on the Taiwan Stock Exchange (TWSE) since November
1972. In October 1995 and November 2010, the Company increased its share capital and issued
global depositary shares (GDR), which are listed on the Luxembourg Stock Exchange under stock
number 168527.
The financial statements are presented in the Company’s functional currency, the New Taiwan
dollar.
2. APPROVAL OF FINANCIAL STATEMENTS
The financial statements were approved by the Company’s board of directors on February 26,
2021.
3. APPLICATION OF NEW AND REVISED STANDARDS, AMENDMENTS AND
INTERPRETATIONS
a. Initial application of the amendments to the International Financial Reporting Standards
(IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC
Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the
Financial Supervisory Commission (FSC)
Except for the following, the initial application of the IFRSs endorsed and issued into effect
by the FSC did not have a material impact on the Company’s accounting policies:
1) Amendments to IFRS 3 “Definition of a Business”
The Company applies the amendments to IFRS 3 to transactions that occur on or after
January 1, 2020. The amendments require that to be considered a business, an acquired set
of activities and assets must include, at a minimum, an input and a substantive process that
together significantly contribute to the ability to create outputs. To judge whether the
acquired process is substantive, there will be different judgement requirements depending
on whether there is output on the acquisition date. In addition, the amendments introduce
an optional concentration test that permits a simplified assessment of whether or not an
acquired set of activities and assets is a business.
304
2) Amendments to IFRS 9, IAS 39 and IFRS 7 “Interest Rate Benchmark Reform”
Upon retrospective application of the amendments, the Company complied with the hedge
accounting requirements under the assumption that the interest rate benchmark (such as
the London Interbank Offered Rate or LIBOR) on which the hedged cash flows and cash
flows from the hedging instrument are based will not be altered as a result of interest rate
benchmark reform.
3) Amendments to IAS 1 and IAS 8 “Definition of Material”
The Company adopted the amendments starting from January 1, 2020. The threshold for
materiality influencing users has been changed to “could reasonably be expected to
influence” and, therefore, the disclosures in the financial report have been adjusted and
immaterial information that may obscure material information has been deleted.
4) Amendment to IFRS 16 “Covid-19-Related Rent Concessions”
The Company elected to apply the practical expedient provided in the amendment to IFRS
16 with respect to rent concessions negotiated with the lessor as a direct consequence of
the COVID-19. Related accounting policies are stated in Note 4. Before the application of
the amendment, the Company was required to determine whether the abovementioned rent
concessions are lease modifications and thus have to be accounted for as lease
modifications.
The Company applied the amendment from January 1, 2020. Retrospective application of
the amendment has no impact on retained earnings as of January 1, 2020.
b. The IFRSs endorsed by the FSC for application starting from 2021
New IFRSs
Effective Date
Announced by IASB
Amendments to IFRS 4 “Extension of the Temporary
Exemption from Applying IFRS 9”
Effective immediately upon
promulgation by the IASB
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS
January 1, 2021
16 “Interest Rate Benchmark Reform - Phase 2”
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark
Reform - Phase 2”
“Interest Rate Benchmark Reform - Phase 2” primarily amends IFRS 9, IFRS 7 and IFRS
16 to provide practical relief from the impact of the interest rate benchmark reform.
Changes in the basis for determining contractual cash flows as a result of
interest rate benchmark reform
The changes in the basis for determining contractual cash flows of financial assets,
financial liabilities or lease liabilities are accounted for by updating the effective interest
rate at the time the basis is changed, provided the changes are necessary as a direct
consequence of the reform and the new basis is economically equivalent to the previous
basis.
305
Financial Information
Hedge accounting
The amendments provide the following temporary exceptions to hedging relationships that
are subject to the reform:
1) The changes to the hedging relationship that are needed to reflect changes required by
the reform are treated as a continuation of the existing hedging relationship, and do
not result in the discontinuation of hedge accounting or the designation of a new
hedging relationship.
2) If an entity reasonably expects that an alternative benchmark rate will be separately
identifiable within a period of 24 months, it is not prohibited from designating the rate
as a non-contractually specified risk component if it is not separately identifiable at
the designation date.
3) After a cash flow hedging relationship is amended, the amount accumulated in the
gain/(loss) on hedging instruments of cash flow hedge is deemed to be based on the
alternative benchmark rate on which the hedged future cash flows are determined.
4) An entity should allocate the hedged items of a group hedge that is subject to the
reform to subgroups based on whether the hedged items have been changed to
reference an alternative benchmark rate, and should designate the hedged benchmark
rate separately.
c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC
New IFRSs
Effective Date
Announced by IASB (Note 1)
“Annual Improvements to IFRS Standards 2018-2020”
Amendments to IFRS 3 “Reference to the Conceptual
January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
Framework”
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”
To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting
January 1, 2023 (Note 6)
January 1, 2023 (Note 7)
Estimates”
Amendments to IAS 16 “Property, Plant and Equipment -
January 1, 2022 (Note 4)
Proceeds before Intended Use”
Amendments to IAS 37 “Onerous Contracts - Cost of
January 1, 2022 (Note 5)
Fulfilling a Contract”
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: The amendments to IFRS 9 will be applied prospectively to modifications and
exchanges of financial liabilities that occur on or after the annual reporting periods
beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture”
306
will be applied prospectively to the fair value measurements on or after the annual
reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1
“First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting
periods beginning on or after January 1, 2022.
Note 3: The amendments are applicable to business combinations for which the acquisition
date is on or after the beginning of the annual reporting period beginning on or after
January 1, 2022.
Note 4: 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 5: The amendments are applicable to contracts for which the entity has not yet fulfilled
all its obligations on January 1, 2022.
Note 6: The amendments will be applied prospectively for annual reporting periods
beginning on or after January 1, 2023.
Note 7: The amendments are applicable to changes in accounting estimates and changes in
accounting policies that occur on or after the beginning of the annual reporting
period beginning on or after January 1, 2023.
1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture”
The amendments stipulate that, when the Company sells or contributes assets that
constitute a business (as defined in IFRS 3) to an associate or joint venture, the gain or
loss resulting from the transaction is recognized in full. Also, when the Company loses
control of a subsidiary that contains a business but retains significant influence or joint
control, the gain or loss resulting from the transaction is recognized in full.
Conversely, when the Company sells or contributes assets that do not constitute a business
to an associate or joint venture, the gain or loss resulting from the transaction is
recognized only to the extent of the Company’s interest as an unrelated investor in the
associate or joint venture, i.e., the Company’s share of the gain or loss is eliminated. Also,
when the Company loses control of a subsidiary that does not contain a business but
retains significant influence or joint control over an associate or a joint venture, the gain or
loss resulting from the transaction is recognized only to the extent of the Company’s
interest as an unrelated investor in the associate or joint venture, i.e., the Company’s share
of the gain or loss is eliminated.
2) Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
The amendments clarify that for a liability to be classified as non-current, the Company
shall assess whether it has the right at the end of the reporting period to defer settlement of
the liability for at least twelve months after the reporting period. If such rights are in
existence at the end of the reporting period, the liability is classified as non-current
regardless of whether the Company will exercise that right. The amendments also clarify
that, if the right to defer settlement is subject to compliance with specified conditions, the
Company must comply with those conditions at the end of the reporting period even if the
lender does not test compliance until a later date.
307
Financial Information
that, for
the purpose of
The amendments stipulate
the
aforementioned settlement refers to a transfer of cash, other economic resources or the
Company’s own equity instruments to the counterparty that results in the extinguishment
of the liability. However, if the terms of a liability that could, at the option of the
counterparty, result in its settlement by a transfer of the Company’s own equity
instruments, and if such option is recognized separately as equity in accordance with IAS
32 “Financial Instruments: Presentation”, the aforementioned terms would not affect the
classification of the liability.
liability classification,
3) Annual Improvements to IFRS Standards 2018-2020
Several standards, including IFRS 9 “Financial Instruments”, were amended in the annual
improvements. IFRS 9 requires the comparison of the discounted present value of the cash
flows under the new terms, including any fees paid net of any fees received, with that of
the cash flows under the original financial liability when there is an exchange or
modification of debt instruments. The new terms and the original terms are substantially
different if the difference between those discounted present values is at least 10%. The
amendments to IFRS 9 clarify that the only fees that should be included in the above
assessment are those fees paid or received between the borrower and the lender.
4) Amendments to IFRS 3 “‘Reference to the Conceptual Framework”
The amendments replace the references to the Conceptual Framework of IFRS 3 and
specify that the acquirer shall apply IFRIC 21 “Levies” to determine whether the event
that gives rise to a liability for a levy has occurred at the acquisition date.
5) Amendments to IAS 16 “Property, Plant and Equipment: Proceeds before Intended Use”
The amendments prohibit an entity from deducting from the cost of an item of property,
plant and equipment any proceeds from selling items produced while bringing that asset to
the location and condition necessary for it to be capable of operating in the manner
intended by management. The cost of those items is measured in accordance with IAS 2
“Inventories”. Any proceeds from selling those items and the cost of those items are
recognized in profit or loss in accordance with applicable standards.
The amendments are applicable only to items of 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. The Company will restate
its comparative information when it initially applies the aforementioned amendments.
6) Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”
The amendments specify that when assessing whether a contract is onerous, the “cost of
fulfilling a contract” includes both the incremental costs of fulfilling that contract (for
example, direct labor and materials) and an allocation of other costs that relate directly to
fulfilling contracts (for example, an allocation of depreciation for an item of property,
plant and equipment used in fulfilling the contract).
The Company will recognize the cumulative effect of the initial application of the
amendments in the retained earnings at the date of the initial application.
308
7) Amendments to IAS 1 “Disclosure of Accounting Policies”
The amendments specify that the Company should refer to the definition of material to
determine its material accounting policy information to be disclosed. Accounting policy
information is material if it can reasonably be expected to influence decisions that the
primary users of general purpose financial statements make on the basis of those financial
statements. The amendments also clarify that:
Accounting policy information that relates to immaterial transactions, other events or
conditions is immaterial and need not be disclosed;
The Company may consider the accounting policy information as material because of
the nature of the related transactions, other events or conditions, even if the amounts
are immaterial; and
Not all accounting policy information relating to material transactions, other events or
conditions is itself material.
The amendments also illustrate that accounting policy information is likely to be
considered as material to the financial statements if that information relates to material
transactions, other events or conditions and:
a) The Company changed its accounting policy during the reporting period and this
change resulted in a material change to the information in the financial statements;
b) The Company chose the accounting policy from options permitted by the standards;
c) The accounting policy was developed in accordance with IAS 8 “Accounting Policies,
Changes in Accounting Estimates and Errors” in the absence of an IFRS that
specifically applies;
d) The accounting policy relates to an area for which the Company is required to make
significant judgements or assumptions in applying an accounting policy, and the
Company discloses those judgements or assumptions; or
e) The accounting is complex and users of the financial statements would otherwise not
understand those material transactions, other events or conditions.
8) Amendments to IAS 8 “Definition of Accounting Estimates”
The amendments define that accounting estimates are monetary amounts in financial
statements that are subject to measurement uncertainty. In applying accounting policies,
the Company may be required to measure items at monetary amounts that cannot be
observed directly and must instead be estimated. In such a case, the Company uses
measurement techniques and inputs to develop accounting estimates to achieve the
objective. The effects on an accounting estimate of a change in a measurement technique
or a change in an input are changes in accounting estimates unless they result from the
correction of prior period errors.
Except for the above impact, as of the date the financial statements were authorized for issue,
the Company is continuously assessing the possible impact that the application of other
standards and interpretations will have on the Company’s financial position and financial
performance and will disclose the relevant impact when the assessment is completed.
309
Financial Information
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Statement of compliance
The financial statements have been prepared in accordance with the Regulations Governing
the Preparation of Financial Reports by Securities Issuers.
b. Basis of preparation
The financial statements have been prepared on the historical cost basis except for financial
instruments and net defined benefit liabilities which are measured at the present value of the
defined benefit obligation less the fair value of plan assets. Historical cost is generally based
on the fair value of the consideration given in exchange for assets.
The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to
which the fair value measurement inputs are observable and based on the significance of the
inputs to the fair value measurement in its entirety, are described as follows:
1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are
observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived
from prices); and
3) Level 3 inputs are unobservable inputs for an asset or liability.
When preparing these financial statements, the Company used the equity method to account
for its investments in subsidiaries and associates. In order for the amounts of the net profit for
the year, other comprehensive income for the year and total equity in the financial statements
to be the same with the amounts attributable to the owners of the Company in its consolidated
financial statements, adjustments arising from the differences in accounting treatments
between the parent company only basis and the consolidated basis were made to investments
accounted for using the equity method, the share of profit or loss of subsidiaries and associates,
the share of other comprehensive income of subsidiaries and associates and the related equity
items, as appropriate, in these financial statements.
c. Classification of current and non-current assets and liabilities
Current assets include:
Assets held primarily for the purpose of trading;
Assets expected to be realized within 12 months after the reporting period; and
Cash and cash equivalents unless the asset is restricted from being exchanged or used to
settle a liability for at least 12 months after the reporting period.
Current liabilities include:
Liabilities held primarily for the purpose of trading;
Liabilities due to be settled within 12 months after the reporting period and
310
Liabilities for which the Company does not have an unconditional right to defer settlement
for at least 12 months after the reporting period. Terms of a liability that could, at the
option of the counterparty, result in its settlement by the issue of equity instruments do not
affect its classification.
Assets and liabilities that are not classified as current are classified as non-current.
d. Foreign currencies
In preparing the Company’s financial statements, transactions in currencies other than the
Company’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. Exchange differences on monetary items
arising from settlement or translation are recognized in profit or loss in the period in which
they arise except for exchange differences on transactions entered into in order to hedge
certain foreign currency risks.
Non-monetary items measured at fair value that are denominated in foreign currencies are
retranslated at the rates prevailing at the date when fair value was determined. Exchange
differences arising from the retranslation of non-monetary items are included in profit or loss
for the period except for exchange differences arising from the retranslation of non-monetary
items in respect of which gains and losses are recognized directly in other comprehensive
income; in which cases, the exchange differences are also recognized directly in other
comprehensive income.
Non-monetary items that are measured at historical cost in a foreign currency are translated
using the exchange rate at the date of the transaction (i.e., not retranslated).
e. Inventories
Inventories consist of raw materials, supplies, finished goods and work-in-process and are
stated at the lower of cost or net realizable value. Inventory write-downs are made by item,
except where it may be appropriate to group similar or related items. Net realizable value is
the estimated selling price of inventories less all estimated costs of completion and costs
necessary to make the sale. Inventories are recorded at the weighted-average cost on the
balance sheet date.
f.
Investments accounted for using the equity method
The Company uses the equity method to account for its investments in subsidiaries and
associates.
1) Investment in subsidiaries
Under the equity method, an investment in a subsidiary is initially recognized at cost and
adjusted thereafter to recognize the Company’s share of the profit or loss and other
comprehensive income of the subsidiary. The Company also recognizes the changes in the
Company’s share of equity of subsidiaries.
311
Financial Information
Changes in the Company’s ownership interest in a subsidiary that do not result in the
Company losing control of the subsidiary are accounted for as equity transactions. The
Company recognizes directly in equity any difference between the carrying amount of the
investment and the fair value of the consideration paid or received.
When the Company’s share of loss of a subsidiary exceeds its interest in that subsidiary
(which includes any carrying amount of the investment accounted for using the equity
method and long-term interests that, in substance, form part of the Company’s net
investment in the subsidiary), the Company continues recognizing its share of further loss,
if any.
Any excess of the cost of acquisition over the Company’s share of the net fair value of the
identifiable assets and liabilities of a subsidiary at the date of acquisition is recognized as
goodwill, which is included within the carrying amount of the investment and is not
amortized. Any excess of the Company’s share of the net fair value of the identifiable
assets and liabilities over the cost of acquisition is recognized immediately in profit or
loss.
The Company assesses its investment for any impairment by comparing the carrying
amount with the estimated recoverable amount as assessed based on the investee’s
financial statements as a whole. Impairment loss is recognized when the carrying amount
exceeds the recoverable amount. If the recoverable amount of the investment subsequently
increases, the Company recognizes a reversal of the impairment loss; the adjusted
post-reversal carrying amount should not exceed the carrying amount that would have
been recognized (net of amortization or depreciation) had no impairment loss been
recognized in prior years. An impairment loss recognized on goodwill cannot be reversed
in a subsequent period.
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 this, 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 had the Company directly disposed of the related assets
or liabilities.
Profit or loss resulting from downstream transactions is eliminated in full only in the
financial statements. Profit and loss resulting from upstream transactions and transactions
between subsidiaries is recognized only in the financial statements and only to the extent
of interests in the subsidiaries that are not related to the Company.
2) Investment in associates
An associate is an entity over which the Company has significant influence and which is
neither a subsidiary nor an interest in a joint venture. The Company uses the equity
method to account for its investments in associates.
The results and assets and liabilities of associates are incorporated in these financial
statements using the equity method of accounting. Under the equity method, an
investment in an associate is initially recognized at cost and adjusted thereafter to
recognize the Company’s share of the profit or loss and other comprehensive income of
the associate. The Company also recognizes the changes in the Company’s share of equity
312
of associates.
Under the equity method, investments in an associate are initially recognized at cost and
adjusted thereafter to recognize the Company’s share of the profit or loss and other
comprehensive income of the associate. The Company also recognizes the changes in the
Company’s share of the equity of associates.
Any excess of the cost of acquisition over the Company’s share of the net fair value of the
identifiable assets and liabilities of an associate at the date of acquisition is recognized as
goodwill, which is included within the carrying amount of the investment and is not
amortized. Any excess of the Company’s share of the net fair value of the identifiable
assets and liabilities over the cost of acquisition, after reassessment, is recognized
immediately in profit or loss.
When the Company subscribes for additional new shares of an associate at a percentage
different from its existing ownership percentage, the resulting carrying amount of the
investment differs from the amount of the Company’s proportionate interest in the
associate. The Company records such a difference as an adjustment to investments with
the corresponding amount charged or credited to capital surplus - changes in capital
surplus from investments in associates accounted for using the equity method. If the
Company’s ownership interest is reduced due to its additional subscription of the new
shares of the associate, the proportionate amount of the gains or losses previously
recognized in other comprehensive income in relation to that associate is reclassified to
profit or loss on the same basis as would be required had the investee directly disposed of
the related assets or liabilities. When the adjustment should be debited to capital surplus,
but the capital surplus recognized from investments accounted for using the equity method
is insufficient, the shortage is debited to retained earnings.
When the Company’s share of losses of an associate equals or exceeds its interest in that
associate, the Company discontinues recognizing its share of further losses. Additional
losses and liabilities are recognized only to the extent that the Company has incurred legal
obligations, or constructive obligations, or made payments on behalf of that associate.
The entire carrying amount of the investment (including goodwill) is tested for
impairment as a single asset by comparing its recoverable amount with its carrying
amount. Any impairment loss recognized is deducted from investments and the carrying
amount of investment is net of impairment loss. Any reversal of that impairment loss is
recognized to the extent that the recoverable amount of the investment subsequently
increases.
The Company discontinues the use of the equity method from the date on which it ceases
to have significant influence over the associate. Any retained investment is measured at
fair value on that date and the fair value is regarded as its fair value on initial recognition
as a financial asset. The difference between the previous carrying amount of the associate
attributable to the retained interest and its fair value is included in the determination of the
gain or loss on disposal of the associate. The Company accounts for all amounts
previously recognized in other comprehensive income in relation to that associate on the
same basis as would be required if that associate had directly disposed of the related assets
or liabilities.
When the Company transacts with its associate, profits and losses resulting from the
transactions with the associate are recognized in the Company’s financial statements only
to the extent of interests in the associate that are not related to the Company.
313
Financial Information
g. Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at
cost less accumulated depreciation and accumulated impairment loss.
Property, plant and equipment in the course of construction are measured at cost less any
recognized impairment loss. Cost includes professional fees and borrowing costs eligible for
capitalization. Such assets are depreciated and classified to the appropriate categories of
property, plant and equipment when completed and ready for their intended use.
The depreciation of property, plant and equipment is recognized using the straight-line
method. Each significant part is depreciated separately. The estimated useful lives, residual
values and depreciation methods are reviewed at the end of each reporting period, with the
effects of any changes in the estimates accounted for on a prospective basis.
On derecognition of an item of property, plant and equipment, the difference between the
sales proceeds and the carrying amount of the asset is recognized in profit or loss.
h. Investment properties
Investment properties are properties held to earn rentals and/or for capital appreciation
(including property under construction for such purposes). Investment properties also include
land held for a currently undetermined future use.
Investment properties are initially measured at cost. Subsequent to initial recognition,
investment properties are measured at cost less accumulated depreciation and accumulated
impairment loss. Depreciation is recognized using the straight-line method.
On derecognition of an investment property, the difference between the net disposal proceeds
and the carrying amount of the asset and is included in profit or loss.
i.
Intangible assets
Intangible assets are measured initially at cost and subsequently measured at cost less
accumulated amortization and accumulated impairment loss. Amortization is recognized on a
straight-line basis. The estimated useful life, residual value, and amortization method are
reviewed at the end of each reporting period, with the effect of any changes in estimate
accounted for on a prospective basis.
On derecognition of an intangible asset, the differences between the net disposal proceeds and
the carrying amount of the asset is recognized in profit or loss.
j.
Impairment of property, plant and equipment, right-of-use asset, intangible assets other than
goodwill and assets related to contract costs
At the end of each reporting period, the Company reviews the carrying amounts of its property,
plant and equipment, right-of-use asset and intangible assets, excluding goodwill, to determine
whether there is any indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss. When it is not possible to estimate the recoverable amount of an
individual asset, the Company estimates the recoverable amount of the cash-generating unit to
which the asset belongs. Corporate assets are allocated to the individual cash-generating units
on a reasonable and consistent basis of allocation.
314
Intangible assets with indefinite useful lives and intangible assets not yet available for use are
tested for impairment at least annually and whenever there is an indication that the assets may
be impaired.
The recoverable amount is the higher of fair value less costs to sell and value in use. If the
recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying
amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable
amount, with the resulting impairment loss recognized in profit or loss.
Before the Company recognizes an impairment loss from assets related to contract costs, any
impairment loss on inventories, property, plant and equipment and intangible assets related to
the contract applicable under IFRS 15 shall be recognized in accordance with applicable
standards. Then, impairment loss from the assets related to the contract costs is recognized to
the extent that the carrying amount of the assets exceeds the remaining amount of
consideration that the Company expects to receive in exchange for related goods or services
less the costs which relate directly to providing those goods or services and which have not
been recognized as expenses. The assets related to the contract costs are then included in the
carrying amount of the cash-generating unit to which they belong for the purpose of
evaluating impairment of that cash-generating unit.
When an impairment loss is subsequently reversed, the carrying amount of the corresponding
asset, cash-generating unit or assets related to contract costs is increased to the revised
estimate of its recoverable amount, but only to the extent of the carrying amount that would
have been determined had no impairment loss been recognized on the asset, cash-generating
unit or assets related to contract costs in prior years. A reversal of an impairment loss is
recognized in profit or loss.
k. Financial instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to
the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs
that are directly attributable to the acquisition or issuance of financial assets and financial
liabilities (other than financial assets and financial liabilities at FVTPL) are added to or
deducted from the fair value of the financial assets or financial liabilities, as appropriate, on
initial recognition. Transaction costs directly attributable to the acquisition of financial assets
or financial liabilities at FVTPL are recognized immediately in profit or loss.
Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a
trade date basis.
1) Measurement category
Financial assets are classified into the following categories: Financial assets at FVTPL,
financial assets at amortized cost and investments in equity instruments at FVTOCI.
315
Financial Information
a) Financial assets at FVTPL
Financial assets are classified as at FVTPL when such a financial asset is mandatorily
classified or 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, and any
remeasurement gains or losses on such financial assets are recognized in other gains or
losses. Fair value is determined in the manner described in Note 26.
b) Financial assets at amortized cost
Financial assets that meet the following conditions are subsequently measured at
amortized cost:
i. The financial asset is held within a business model whose objective is to hold
financial assets in order to collect contractual cash flows; and
ii. The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding.
Subsequent to initial recognition, financial assets at amortized cost, including cash and
cash equivalents and trade receivables at amortized cost are measured at amortized
cost, which equals the gross carrying amount determined using the effective interest
method less any impairment loss. Exchange differences are recognized in profit or
loss.
Interest income is calculated by applying the effective interest rate to the gross
carrying amount of such a financial asset, except for:
i. Purchased or originated credit-impaired financial assets, for which interest income
is calculated by applying the credit-adjusted effective interest rate to the amortized
cost of such financial assets; and
ii. Financial assets that are not credit-impaired on purchase or origination but have
subsequently become credit-impaired, for which interest income is calculated by
applying the effective interest rate to the amortized cost of such financial assets in
subsequent reporting periods.
Cash equivalents include time deposits with original maturities within 3 months from
the date of acquisition or time deposits with original maturities within 3-12 months
from the date of acquisition and the interest paid to deposits which are terminated
before maturity are higher than demand deposits, which are highly liquid, readily
convertible to a known amount of cash and are subject to an insignificant risk of
changes in value. These cash equivalents are held for the purpose of meeting
short-term cash commitments.
316
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 as 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,
it will be transferred to retained earnings.
Dividends on these investments in equity instruments are recognized in profit or loss
when the Company’s right to receive the dividends is established, unless the dividends
clearly represent a recovery of part of the cost of the investment.
2) Impairment of financial assets
The Company recognizes a loss allowance for expected credit losses on financial assets at
amortized cost (including trade receivables), investments in debt instruments that are
measured at FVTOCI, operating lease receivables, as well as contract assets.
The Company always recognizes lifetime expected credit losses (ECLs) for trade
receivables, operating lease receivables and contract assets. For all other financial
instruments, the Company recognizes lifetime ECLs when there has been a significant
increase in credit risk since initial recognition. If, on the other hand, the credit risk on a
financial instrument has not increased significantly since initial recognition, the Company
measures the loss allowance for that financial instrument at an amount equal to 12-month
ECLs.
Expected credit losses reflect the weighted average of credit losses with the respective
risks of default occurring as the weights. Lifetime ECLs represent the expected credit
losses that will result from all possible default events over the expected life of a financial
instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is
expected to result from default events on a financial instrument that are possible within 12
months after the reporting date.
For internal credit risk management purposes, the Company determines that the following
situations indicate that a financial asset is in default (without taking into account any
collateral held by the Company):
a) Internal or external information show that the debtor is unlikely to pay its creditors.
b) When a financial asset is more than 90 days past due unless the Company has
reasonable and corroborative information to support a more lagged default criterion.
The impairment loss of all financial assets is recognized in profit or loss by a reduction in
their carrying amounts through a loss allowance account, except for investments in debt
instruments that are measured at FVTOCI, for which the loss allowance is recognized in
other comprehensive income and the carrying amounts of such financial assets are not
reduced.
317
Financial Information
3) Derecognition of financial assets
The Company derecognizes a financial asset only when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and substantially all the
risks and rewards of ownership of the asset to another party.
On derecognition of a financial asset at amortized cost in its entirety, the difference
between the asset’s carrying amount and the sum of the consideration received and
receivable is recognized in profit or loss. On derecognition of an investment in a debt
instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of
the consideration received and receivable and the cumulative gain or loss which had been
recognized in other comprehensive income is recognized in profit or loss. However, on
derecognition of an investment in an equity instrument at FVTOCI, the difference
between the asset’s carrying amount and the sum of the consideration received and
receivable is recognized in profit or loss, and the cumulative gain or loss which had been
recognized in other comprehensive income is transferred directly to retained earnings,
without recycling through profit or loss.
Equity instruments
Equity instruments issued by the Company entity are recognized at the proceeds received, net
of direct issue costs.
The repurchase of the Company’s own equity instruments is recognized in and deducted
directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale,
issuance or cancellation of the Company’s own equity instruments.
Financial liabilities
1) Subsequent measurement
Except the following situation, all the financial liabilities are measured at amortized cost
using the effective interest method:
a) Financial liabilities at FVTPL
Financial liabilities are classified as at FVTPL when the financial liabilities are held
for trading. Financial liabilities held for trading are stated at fair value, and any gains
or losses on such financial liabilities are recognized in other gains or losses. Fair value
is determined in the manner described in Note 26.
b) Financial guarantee contracts
Financial guarantee contracts issued by the Company, if not designated as at FVTPL,
are subsequently measured at the higher of:
i. The amount of the loss allowance reflecting expected credit losses; and
ii. The amount initially recognized less, where appropriate, the cumulative amount of
income recognized in accordance with the revenue recognition policies.
318
2) Derecognition of financial liabilities
The difference between the carrying amount of the financial liability derecognized and the
consideration paid, including any non-cash assets transferred or liabilities assumed, is
recognized in profit or loss.
Derivative financial instruments
The Company enters into a variety of derivative financial instruments to manage its exposure
to interest rate and foreign exchange rate risks, including foreign exchange forward contracts
and interest rate swaps.
Derivatives are initially recognized at fair value at the date on which the derivative contracts
are entered into and are subsequently remeasured to their fair value at the end of each
reporting period. The resulting gain or loss is recognized in profit or loss immediately unless
the derivative is designated and effective as a hedging instrument; in which event, the timing
of the recognition in profit or loss depends on the nature of the hedging relationship. When the
fair value of a derivative financial instrument is positive, the derivative is recognized as a
financial asset; when the fair value of a derivative financial instrument is negative, the
derivative is recognized as a financial liability.
Derivatives embedded in hybrid contracts that contain financial asset hosts that is within the
scope of IFRS 9 are not separated; instead, the classification is determined in accordance with
the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not
financial assets that is within the scope of IFRS 9 (e.g. financial liabilities) are treated as
separate derivatives when they meet the definition of a derivative; their risks and
characteristics are not closely related to those of the host contracts; and the host contracts are
not measured at FVTPL.
l. Hedge accounting
The Company designates certain hedging instruments, which include derivatives, embedded
derivatives and non-derivatives in respect of foreign currency risk, as either fair value hedges
or cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for
as cash flow hedges.
1) Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value
hedges are recognized in profit or loss immediately, together with any changes in the fair
value of the hedged asset or liability that are attributable to the hedged risk. The change in
the fair value of the hedging instrument and the change in the hedged item attributable to
the hedged risk are recognized in profit or loss in the line item relating to the hedged item.
The Company discontinues hedge accounting only when the hedging relationship ceases
to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold,
terminated or exercised.
2) Cash flow hedges
The effective portion of gains or losses on derivatives that are designated and qualify as
cash flow hedges is recognized in other comprehensive income. The gains or losses
relating to the ineffective portion are recognized immediately in profit or loss.
319
Financial Information
The associated gains or losses that were recognized in other comprehensive income are
reclassified from equity to profit or loss as reclassification adjustments in the line items
relating to the hedged item in the same period in which the hedged item affects profit or
loss. If a hedge of a forecasted transaction subsequently results in the recognition of a
non-financial asset or a non-financial liability, the associated gains and losses that were
recognized in other comprehensive income are removed from equity and included in the
initial cost of the non-financial asset or non-financial liability.
The Company discontinues hedge accounting only when the hedging relationship ceases
to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold,
terminated or exercised. The cumulative gain or loss on the hedging instrument that was
previously recognized in other comprehensive income (from the period in which the hedge
was effective) remains separately in equity until the forecasted transaction occurs. When a
forecasted transaction is no longer expected to occur, the gains or losses accumulated in
equity are recognized immediately in profit or loss.
m. Levies
Levies imposed by a government are accrued as other liabilities when the transactions or
activities that trigger the payment of such levies occur. If the obligating event occurs over a
period of time, the liability is recognized progressively. If an obligation to pay a levy is
triggered upon reaching a minimum threshold, the liability is recognized when that minimum
threshold is reached.
n. Provisions
Provisions are recognized when the Company has a present obligation (legal or constructive)
as a result of a past event, it is probable that the Company will be required to settle the
obligation, and a reliable estimate can be made of the amount of the obligation.
o. Revenue recognition
The Company identifies contracts with the customers, allocates the transaction price to the
performance obligations and recognizes revenue when performance obligations are satisfied.
1) Revenue from the sale of goods
Revenue from the sale of goods comes from sales of wires, cables and stainless steel.
Sales of wires, cables and stainless steel are recognized as revenue when the customer has
full discretion over the manner of distribution and the price to sell the goods, has the
primary responsibility for sales to future customers and bears the risks of obsolescence.
The Company does not recognize revenue on materials delivered to subcontractors
because this delivery does not involve a transfer of control.
2) Revenue from the rendering of services
Service income is recognized when services are rendered. Revenue should be recognized
over time by measuring the progress toward complete satisfaction of the performance
obligation.
320
p. Leases
At the inception of a contract, the Company assesses whether the contract is, or contains, a
lease.
1) The Company as lessor
Leases are classified as finance leases whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee. All other leases are
classified as operating leases.
Under finance leases, the lease payments comprise fixed payments and variable lease
payments which depend on an index or a rate. The net investment in a lease is measured at
(a) the present value of the sum of the lease payments receivable by a lessor and any
unguaranteed residual value accrued to the lessor plus (b) initial direct costs and is
presented as a finance lease receivable. Finance lease income is allocated to the relevant
accounting periods so as to reflect a constant, periodic rate of return on the Company’s net
investment outstanding in respect of 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.
2) The Company as lessee
The Company recognizes right-of-use assets and lease liabilities for all leases at the
commencement date of a lease, except for short-term leases and low-value asset leases
accounted for applying a recognition exemption where lease payments are recognized as
expenses on a straight-line basis over the lease terms.
Right-of-use assets are initially measured at cost, which comprises the initial measurement
of lease liabilities adjusted for lease payments made at or before the commencement date,
plus any initial direct costs incurred and an estimate of costs needed to restore the
underlying assets, and less any lease incentives received. Right-of-use assets are
subsequently measured at cost less accumulated depreciation and impairment losses and
adjusted for any remeasurement of the lease liabilities.
Right-of-use assets are depreciated using
the
commencement dates to the earlier of the end of the useful lives of the right-of-use assets
or the end of the lease terms.
the straight-line method
from
Lease liabilities are initially measured at the present value of the lease payments, which
comprise fixed payments, in-substance fixed payments, variable lease payments which
depend on an index or a rate, residual value guarantees, the exercise price of a purchase
option if the Company is reasonably certain to exercise that option, and payments of
penalties for terminating a lease if the lease term reflects such termination, less any lease
incentives receivable. The lease payments are discounted using the interest rate implicit in
a lease, if that rate can be readily determined. If that rate cannot be readily determined, the
Company uses the lessee’s incremental borrowing rate.
321
Financial Information
Subsequently, lease liabilities are measured at amortized cost using the effective interest
method, with interest expense recognized over the lease terms. When there is a change in
a lease term, a change in the amounts expected to be payable under a residual value
guarantee, a change in the assessment of an option to purchase an underlying asset, or a
change in future lease payments resulting from a change in an index or a rate used to
determine those payments, the Company remeasures the lease liabilities with a
corresponding adjustment to the right-of-use-assets. However, if the carrying amount of
the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is
recognized in profit or loss. Lease liabilities are presented on a separate line in the balance
sheets.
The Company negotiates with the lessor for rent concessions as a direct consequence of
the Covid-19 to change the lease payments originally due by June 30, 2021, that results in
the revised consideration for the lease less than, the consideration for the lease
immediately preceding the change. There is no substantive change to other terms and
conditions. The Company elects to apply the practical expedient to all of these rent
concessions and, therefore, does not assess whether the rent concessions are lease
modifications. Instead, the Company recognizes the reduction in lease payment in profit or
loss as, in the period in which the events or conditions that trigger the concession occur,
and makes a corresponding adjustment to the lease liability.
Variable lease payments that do not depend on an index or a rate are recognized as
expenses in the periods in which they are incurred.
q. Government grants
Government grants are not recognized until there is reasonable assurance that the Company
will comply with the conditions attached to them and that the grants will be received.
Government grants are recognized profit and loss on a systematic basis over the periods in
which the Company recognizes as expenses the related costs that the grants intend to
compensate.
Government grants that are receivable as compensation for expenses or losses already
incurred or for the purpose of giving immediate financial support to the Company with no
future related costs are recognized in profit or loss in the period in which they are received.
The benefit of a government loan received at a below-market rate of interest is treated as a
government grant measured as the difference between the proceeds received and the fair value
of the loan based on prevailing market interest rates.
r. Employee benefits
1) Short-term employee benefits
Liabilities recognized in respect of short-term employee benefits are measured at the
undiscounted amount of the benefits expected to be paid in exchange for the related
service.
2) Retirement benefits
Payments to defined contribution retirement benefit plans are recognized as an expense
when employees have rendered service entitling them to the contributions.
322
Defined benefit costs (including service cost, net interest and remeasurement) under the
defined benefit retirement benefit plans are determined using the projected unit credit
method. Service cost (including current service cost) and net interest on the net defined
benefit liability (asset) are recognized as employee benefits expense in the period they
occur. Remeasurement, comprising actuarial gains and losses and return on plan assets
(excluding interest), are recognized in other comprehensive income in the period in which
they occur. Remeasurement recognized in other comprehensive income is reflected
immediately in retained earnings and will not be reclassified to profit or loss.
Net defined benefit liability (asset) represents the actual deficit (surplus) in the Company’s
defined benefit plan. Any surplus resulting from this calculation is limited to the present
value of any refunds from the plans or reductions in future contributions to the plans.
s. Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
1) Current tax
According to the Income Tax Law in ROC, an additional tax on unappropriated earnings
is provided for as income tax in the year the shareholders approve to retain earnings.
Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s
tax provision.
2) Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in the
computation of taxable profit. Deferred tax liabilities are generally recognized for all
taxable temporary differences. Deferred tax assets are generally recognized for all
(deductible temporary differences and unused loss carry forward) to the extent that it is
probable that taxable profits will be available against which those deductible temporary
differences can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries and associates, except where the Company is able to control
the reversal of the temporary difference and it is probable that the temporary difference
will not reverse in the foreseeable future. Deferred tax assets arising from deductible
temporary differences associated with such investments and interests are only recognized
to the extent that it is probable that there will be sufficient taxable profits against which to
utilize the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period
and reduced to the extent that it is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered. A previously unrecognized
deferred tax asset is also reviewed at the end of each reporting period and recognized to
the to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered.
323
Financial Information
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply
in the period in which the liability is settled or the asset realized, based on tax rates (and
tax laws) that have been enacted or substantively enacted by the end of the reporting
period. The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Company expects, at the
end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities.
5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
In the application of the Company’s accounting policies, management is required to make
judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are
not readily apparent from other sources. The accounts include allowance for doubtful trade
receivable accounts, inventory valuation losses, depreciation, impairment, pension, deferred tax
assets, etc. The estimates and associated assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results may differ from these estimates.
The Company considers the economic implications of the COVID-19 when making its critical
accounting estimates. The estimates and underlying assumptions are audited on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the estimate is revised if
the revision affects only that period or in the period of the revision and future periods if the
revision affects both current and future periods.
6. CASH AND CASH EQUIVALENTS
Cash on hand
Checking accounts and cash in bank
December 31
2020
2019
$
1,050
4,510,040
$
1,230
1,283,124
$ 4,511,090
$ 1,284,354
The market rate intervals of cash in the bank at the end of the year were as follows (except for
checking accounts’ interest rate of 0.00%):
Bank balance
0.001%-0.30%
0.01%-0.66%
December 31
2020
2019
324
As of December 31, 2020 and 2019, certain time deposits were classified and pledged as follows:
Purpose
December 31
2020
2019
Other current assets
Refundable deposits
Negotiable certificate of
deposits (not expired)
Repatriation of offshore fund
Projects grants
Non-current assets
Refundable deposits
To meet required security
deposits
To meet contract requirements
for completing constructions
$ 2,300
$
65,760
19,400
87,460
600
-
-
-
-
600
-
34,062
600
34,662
$ 88,060
$ 34,662
7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
Financial assets mandatorily classified as at FVTPL
Derivative financial assets (not under hedge accounting)
Commodity futures contracts
Foreign exchange forward contracts
Exchange rate swap contracts
Options
Hybrid financial assets
Corporate bonds
December 31
2020
2019
$
66,059 $
-
-
-
39,088
13,216
285
-
5,683,859
-
Financial assets at FVTPL
$ 5,749,918 $
52,589
Current
Non-current
Financial liabilities held for trading
Derivative financial liabilities (not under hedge accounting)
Foreign exchange forward contracts
Financial liabilities at FVTPL
$
66,059 $
5,683,859
52,589
-
$ 5,749,918 $
52,589
$
$
15,839 $
15,839 $
-
-
(Continued)
325
Financial Information
Current
Non-current
December 31
2020
2019
$
$
15,839 $
-
15,839 $
-
-
-
(Concluded)
As of December 31, 2020 and 2019, outstanding commodity futures not under hedge accounting
were as follows:
Type of
Transaction
Quantity
(Tons)
Trade Date
Expiration
Date
Exercise Price
(In Thousands)
Market Price
(In Thousands)
Valuation
(Loss) Gain
(In Thousands)
December 31,
2020
Commodity
futures
Copper
Nickel
December 31,
2019
Commodity
futures
Copper
Copper
Nickel
Nickel
Buy
Sell
Buy
Sell
Buy
Sell
10,250
882
2020.04.30-
2020.12.31
2020.10.15-
2020.12.17
2021.01.20-
2021.10.20
2021.01.15-
2021.03.17
US$ 76,919
US$ 79,276 US$
2,357
US$ 14,560
US$ 14,597 US$
(37 )
9,625
8,875
1,020
2,634
2019.08.12-
2019.12.31
2019.12.11-
2019.12.30
2019.12.27-
2019.12.31
2019.10.17-
2019.12.23
2020.02.19-
2020.05.20
2020.01.15
2019.03.27-
2020.03.31
2019.01.17-
2019.03.23
US$ 58,603
US$ 59,235 US$
632
US$ 54,386
US$ 54,657 US$
(271 )
US$ 14,511
US$ 14,333 US$
(178 )
US$ 38,116
US$ 36,944 US$
1,122
As of December 31, 2020 and 2019, outstanding foreign exchange forward contracts not under
hedge accounting were as follows:
Currency
Maturity Date
Notional Amount
(In Thousands)
December 31, 2020
Sell
Sell
Buy
Buy
EUR to USD
USD to NTD
USD to NTD
USD to JPY
2021.04.08
2021.04.08
2021.01.05
2021.01.28
EUR8,180/USD10,065
USD10,000/NTD280,870
USD60,000/NTD1,699,190
USD5,343/JPY553,220
December 31, 2019
Sell
Buy
USD to NTD
USD to JPY
2020.01.03-2020.01.08 USD50,000/NTD1,505,900
2020.01.08
USD7,537/JPY800,000
326
As of the December 31, 2019, outstanding exchange rate swap contracts not under hedge
accounting were as follows:
Currency
Maturity Date
Notional Amount
(In Thousands)
December 31, 2019
USD to JPY
2020.01.08
USD3,985/JPY434,000
For the years ended December 31, 2020 and 2019, the Company’s strategy for commodity futures
contracts, forward exchange contracts and exchange rate swap contracts was to hedge exposures
to fluctuations of essential materials’ prices and foreign exchange rates. However, those
derivative financial instruments did not meet the criteria of hedge effectiveness; therefore, they
were not accounted for by hedge accounting.
In January 2020, the Company bought 2-year corporate bonds of Golden Harbour International
Pte. Ltd. in the amount of US$178,500 thousand. The bonds are embedded derivative instruments
that pay a fixed interest rate of 5% plus a floating spread per annum.
In January 2020, the Company bought an option contract for US$50 thousand. Under the contract,
the issuer of the option will make an unconditional payment to the Company for the principal and
interest of the abovementioned bonds if Golden Harbour International Pte. Ltd fails to redeem the
bonds at maturity.
8. CONTRACT ASSETS
At the end of the year, contract balances were as follows:
Contract assets
Cable installation
Less: Allowance for impairment loss
December 31
2020
2019
$
12,937
-
$ 331,195
-
Contract assets - current
$
12,937
$ 331,195
The changes in the balance of contract assets and contract liabilities primarily result from the
timing difference between the Company’s performance and the respective customer’s payment.
9. NOTES RECEIVABLE AND TRADE RECEIVABLES
Notes receivable
Notes receivable
December 31
2020
2019
$
26,292
$
23,354
(Continued)
327
Financial Information
Notes receivable - non-operating
Notes receivable from related parties
985
29,399
December 31
2020
2019
Trade receivables
Trade receivables
Less: Allowance for impairment loss
Trade receivables from related parties
$
27,277
$
52,753
$ 2,243,175
-
2,243,175
342,552
$ 1,590,771
-
1,590,771
1,014,422
$ 2,585,727
$ 2,605,193
(Concluded)
The average credit period on the sales of goods was 60 days. In determining the collectability of a
trade receivable, the Company considered any change in the credit quality of the trade receivable
since the date credit was initially granted to the end of the reporting period. When the Company
dealt with new entities, the Company reviewed the credit ratings of the entities and obtained
sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from
defaults. The Company uses other publicly available financial information or its own trading
records to rate its major customers. The Company’s exposure and the credit ratings of its
counterparties are continuously monitored, and the aggregate value of transactions concluded is
spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that
are reviewed and approved by the risk management committee annually. In this regard, the
management believes the Company’s credit risk is significantly reduced.
The Company applies the simplified approach to allowances for expected credit losses prescribed
by IFRS 9, which permits the use of a lifetime expected credit loss allowance for all trade
receivables. The expected credit losses on trade receivables are estimated using a provision matrix
by reference to past default experience with the respective debtors and an analysis of the debtors’
current financial positions. As the Company’s historical credit loss experience does not show
significantly different loss patterns for different customer segments, the loss allowance based on
the past due status of receivables is not further distinguished according to different segments of
the Company’s customer base.
The Company writes off a trade receivable when there is information indicating that the debtor is
experiencing 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, they are recognized in profit or loss.
The following table details the loss allowance of trade receivables based on the Company’s
provision matrix.
328
December 31, 2020
Not Past Due Up to 90 Days
91 to 180
Days
181 to 365
Days
More than
365 Days
Total
Expected credit loss
rate
0%
0%
7.5%
10%
100%
Gross carrying amount $ 2,576,308 $
Loss allowance
9,419
(lifetime ECLs)
-
-
Amortized cost
$ 2,576,308 $
9,419
$
$
December 31, 2019
Not Past Due Up to 90 Days
91 to 180
Days
Expected credit loss
rate
0%
0%
7.5%
Gross carrying amount $ 2,521,459
Loss allowance
$
83,734
(lifetime ECLs)
-
-
Amortized cost
$ 2,521,459
$
83,734
$
$
-
-
-
-
-
-
$
$
-
-
-
$
$
-
$ 2,585,727
-
-
-
$ 2,585,727
181 to 365
Days
More than
365 Days
Total
10%
100%
$
$
-
-
-
$
$
-
$ 2,605,193
-
-
-
$ 2,605,193
The movements of the loss allowance of trade receivables were as follows:
Balance at January 1
Add: Net remeasurement of loss allowance
Less: Amounts written off
Balance at December 31
10. INVENTORIES
Raw materials
Raw materials in transit
Supplies
Work-in-process
Finished goods and merchandise
Construction in progress
For the Year Ended December 31
2020
2019
$
$
-
-
-
-
$ 1,332
(900)
(432)
$
-
December 31
2020
2019
$ 1,808,818
1,392,585
1,082,773
1,038,714
2,862,295
317,612
$ 2,052,950
1,858,130
1,291,432
1,194,073
2,963,303
-
$ 8,502,797
$ 9,359,888
329
Financial Information
The cost of inventories recognized as cost of goods sold for the years ended December 31, 2020
and 2019 was NT$59,353,177 thousand and NT$67,161,816 thousand, respectively.
The cost of goods sold for the years ended December 31, 2020 and 2019 included reversals of
inventory write-downs of NT$299,477 thousand and NT$115,791 thousand, respectively. The
reversals of previous write-downs for the years ended December 31, 2020 and 2019 resulted from
the inventory closeout.
11. FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER
COMPREHENSIVE INCOME
Domestic listed ordinary shares
HannStar Display Corp.
HannStar Board Corp.
TECO ELECTRIC AND MACHINERY CO., LTD.
Domestic unlisted ordinary shares
Current
Non-current
December 31
2020
2019
$ 3,685,476
2,763,734
26,378
307,641
$ 2,089,584
2,639,800
-
318,073
$ 6,783,229
$ 5,047,457
$
-
6,783,229
$
-
5,047,457
$ 6,783,229
$ 5,047,457
These investments in equity instruments are not held for trading. Instead, they are held for
medium- to long-term strategic purposes. Accordingly, the management elected to designate these
investments in equity instruments as at FVTOCI as they believe that recognizing short-term
fluctuations in these investments’ fair values in profit or loss would not be consistent with the
Company’s strategy of holding these investments for long-term purposes.
12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investments in subsidiaries
Investments in associates
December 31
2020
2019
$ 45,661,308
31,586,157
$ 43,784,763
27,923,768
$ 77,247,465
$ 71,708,531
330
a. Investments in subsidiaries
Name of Subsidiary
Carrying Value
Ownership
Percentage Carrying Value
Ownership
Percentage
December 31
2020
2019
Unlisted companies:
Walsin Lihwa Holdings
$ 26,135,792
100.00
$ 20,054,589 100.00
Ltd.
Concord Industries Ltd.
Energy Pilot Ltd.
Min Maw Precision
Industry Corp.
Ace Result Limited
Walsin Info-Electric
Inc.
Chin-Cherng
Construction Co.,
Ltd.
P.T Walsin Lippo
Industries
Joint Success
Enterprises Ltd.
PT. Walsin Nickel
Industrial Indonesia
Others
4,631,181
-
334,644
100.00
-
100.00
11,007,234 100.00
812,145 100.00
325,608 100.00
339,349
340,934
100.00
99.51
304,640 100.00
139,550 98.87
6,452,096
99.22
5,622,577 99.22
783,754
70.00
819,232 70.00
5,319,464
49.05
4,587,752 49.05
1,306,341
17,753
50.00
(Note)
-
-
111,436
$ 45,661,308
$ 43,784,763
The liquidation of Energy Pilot Limited and Market Pilot Limited was completed on
September 3, 2020 and December 9, 2020, respectively.
Note:
In January 2020, the Company invested capital to establish PT. Walsin Nickel
Industrial Indonesia (“WNII”). New Hono Investment Pte. Ltd (“NHI”) held 42%
equity of WNII. According to the joint venture agreement signed by the Company
and NHI in January 2020, the Company had the right to purchase 100% of NHI’s
shares on the terms agreed by all parties to acquire 42% equity of WNII indirectly.
b. Investments in associates
Name of Associate
Carrying Value
Ownership
Percentage Carrying Value
Ownership
Percentage
December 31
2020
2019
Material associates
Winbond Electronics Corp. $ 14,595,661
Walton Advanced
22.21
$ 13,599,856
22.21
Engineering, Inc.
Walsin Technology Corp.
2,601,028
7,068,731
21.65
18.30
2,549,401 21.65
6,188,821 18.30
(Continued)
331
Financial Information
Name of Associate
Carrying Value
Ownership
Percentage Carrying Value
Ownership
Percentage
December 31
2020
2019
Associates that are not
individually
material
Others
7,320,737
5,585,690
$ 31,586,157
$ 27,923,768
(Concluded)
Refer to Table 6 “Information on Investees” and Table 7 “Information on Investments in
Mainland China” for the nature of activities, principal places of business and countries of
incorporation of the associates.
The Company is the single largest shareholder of the above-mentioned material associates in
which the Company has an ownership percentage of less than 50%. Considering the relative
size and wide dispersion of the voting rights owned by other shareholders, the Company has
no ability to direct the relevant activities of the associates and therefore has no control over
these associates.
On December 30, 2019, the Company subscribed for 47,861 thousand shares of Powertec
Electrochemical Corp. through a private placement for a cash consideration of NT$239,303
thousand. The transfer of the ordinary shares within 3 years from the acquisition date is
prohibited by regulations.
On February 26, 2020, Powertec Electrochemical Corp. filed for bankruptcy with resolution
of the board of directors in accordance with Company Act, No. 211 and relevant regulations.
Management of the Company carried out an impairment review by comparing their respective
recoverable amount with the carrying amount. Based on the assessment, the Company’s
interest in Powertec Electrochemical Corp. of NT$1,678,639 thousand is not recoverable. The
whole amount was recognized as impairment loss under non-operating income and expenses
in 2019.
Fair values (Level 1) of investments in associates with available published price quotations
are summarized as follows:
Name of Associate
Winbond Electronics Corp.
Walton Advanced Engineering, Inc.
Walsin Technology Corp.
December 31
2020
2019
$ 25,675,797
1,512,872
$
$ 20,491,986
$ 17,279,237
$ 1,277,171
$ 21,247,656
All the associates were accounted for using the equity method.
332
The summarized financial information below represents amounts shown in the associates’
financial statements prepared in accordance with IFRSs adjusted by the Company for equity
accounting purposes.
1) Material associates
December 31, 2020
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
Non-controlling interests
Proportion of the Company’s
ownership
Equity attributable to the
Company
Other adjustments
Carrying amount
Winbond
Electronics
Corp.
$ 47,530,801
78,512,439
(25,475,006)
(29,975,547)
70,592,687
(5,143,568)
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
$
6,497,236 $ 39,636,422
11,013,279 42,416,526
(3,189,422) (19,714,368)
(2,436,908) (16,684,386)
11,884,185 45,654,194
(7,033,732)
-
$ 65,449,119
$ 11,884,185 $ 38,620,462
22.21%
21.65%
18.30%
$ 14,536,249
59,412
$ 14,595,661
$
1,519,043
$
$
$
$
2,572,926 $ 7,067,545
1,186
28,102
2,601,028 $ 7,068,731
5,399,201 $ 35,599,197
254,887 $ 7,217,645
3,291,251
(49,194)
657,013
Operating revenue
$ 60,683,171
Net profit for the year
Other comprehensive income
(loss)
Total comprehensive income for
the year
$
4,810,294
$
205,693 $ 7,874,658
December 31, 2019
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Winbond
Electronics
Corp.
$ 37,557,286
67,247,614
(17,515,468)
(23,432,245)
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
$
$ 29,074,560
3,836,916
13,271,223
31,069,984
(2,219,782) (16,312,658)
(7,294,140)
(3,196,283)
(Continued)
333
Financial Information
Winbond
Electronics
Corp.
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
Equity
Non-controlling interests
63,857,187
(2,836,565)
11,692,074
-
36,537,746
(2,716,095)
Proportion of the Company’s
ownership
Equity attributable to the
Company
Other adjustments
Carrying amount
Net profit for the year
Other comprehensive income
(loss)
Total comprehensive income for
$ 61,020,622
$ 11,692,074
$ 33,821,651
22.21%
21.65%
18.30%
$ 13,552,680
47,176
$ 13,599,856
$
1,447,287
$
$
$
$
2,531,334
18,067
$ 6,189,362
(541)
2,549,401
$ 6,188,821
6,158,099
$ 30,140,875
165,048
$ 6,648,906
1,294,756
1,120,375
(9,168)
Operating revenue
$ 48,771,434
the year
$
2,772,043
$
1,285,423
$ 6,639,738
(Concluded)
2) Associates that are not individually material
For the Year Ended December 31
2020
2019
The Company’s share of:
Profit (loss) from continuing operations
Other comprehensive income
$
70,065
1,779,371
$
(625,051)
989,446
Total comprehensive income for the year
$ 1,849,436
$
364,395
The Company’s share of profit and other comprehensive income of associates for the years
ended December 31, 2020 and 2019 was based on the associates’ financial statements audited
by independent auditors for the same period. The financial statements of certain
equity-method investees included in the financial statements were not audited by the auditors
of the Company, but were audited by other independent auditors. The investment in such
investee amounted to NT$4,238,472 thousand and NT$3,574,547 thousand as of December 31,
2020 and 2019, respectively; investment gain amounted to NT$995,518 thousand and
NT$56,873 thousand for the years ended December 31, 2020 and 2019, respectively.
334
13. PROPERTY, PLANT AND EQUIPMENT
Land
Buildings and
Improvements
Machinery and
Equipment
Other
Equipment
Construction in
Progress
Total
Cost
Balance at January 1, 2020 $
Additions
Disposals
Reclassified
3,453,378 $ 6,656,121
47,012
(1,265)
196,768
30,617
-
-
$ 19,710,620
229,209
(231,033)
393,268
$
3,788,415
150,553
(88,582)
168,255
$ 1,467,291 $ 35,075,825
1,032,318
(320,880)
-
574,927
-
(758,291 )
Balance at December 31,
2020
$
3,483,995 $ 6,898,636
$ 20,102,064
$
4,018,641
$ 1,283,927
$ 35,787,263
Accumulated depreciation
and impairment
Balance at January 1, 2020 $
Disposals
Depreciation expense
Reclassified
8,067 $ 3,996,520
(1,265)
151,441
-
-
-
-
$ 10,918,051
(224,182)
771,511
(976)
$
2,531,329
(88,485)
230,980
976
$
- $ 17,453,967
(313,932)
-
1,153,932
-
-
-
Balance at December 31,
2020
$
8,067 $ 4,146,696
$ 11,464,404
$
2,674,800
$
- $ 18,293,967
Carrying amount at
December 31, 2020
$
3,475,928 $ 2,751,940
$
8,637,660
$
1,343,841
$ 1,283,927 $ 17,493,296
Cost
Balance at January 1, 2019 $
Additions
Disposals
Reclassified
Balance at December 31,
2,383,150
1,057,564
$ 6,466,083
45,833
-
144,205
(66 )
12,730
$ 19,158,538
190,080
(87,333)
449,335
$
3,531,582
182,712
(33,876)
107,997
$ 1,391,488
795,060
-
$ 32,930,841
2,271,249
(121,275)
(4,990)
(719,257 )
2019
$
3,453,378
$ 6,656,121
$ 19,710,620
$
3,788,415
$ 1,467,291
$ 35,075,825
Accumulated depreciation
and impairment
Balance at January 1, 2019 $
Disposals
Depreciation expense
Impairment losses
recognized in profit or
loss
Reclassified
Balance at December 31,
8,067
-
-
$ 3,859,059
-
137,900
$ 10,269,995
(87,333)
735,206
$
2,361,514
(32,927)
202,742
$
-
-
-
(439)
183
-
-
-
-
-
-
-
-
$ 16,498,635
(120,260)
1,075,848
183
(439)
2019
$
8,067
$ 3,996,520
$ 10,918,051
$
2,531,329
$
-
$ 17,453,967
Carrying amount at
December 31, 2019
$
3,445,311
$ 2,659,601
$
8,792,569
$
1,257,086
$ 1,467,291
$ 17,621,858
The above items of property, plant and equipment are depreciated on a straight-line basis over
their estimated useful lives as follows:
Buildings and improvements
Machinery and equipment
Other equipment
3-50 years
3-20 years
3-15 years
The Company’s main building and electrical and mechanical power equipment are depreciated
over their estimated useful lives of 50 years and 20 years, respectively.
335
Financial Information
The Company owns parcels of land which were registered in the name of certain individuals
because of certain regulatory restrictions. To secure its ownership of such parcels of land, the
Company keeps in its possession the land titles with the annotation of being pledged to the
Company. As of December 31, 2020 and 2019, the recorded total carrying value of such parcels
of land amounted to NT$491,917 thousand and NT$491,917 thousand, respectively.
After appropriate evaluation, the Company recognized an impairment loss on property, plant and
equipment of NT$183 thousand for the year ended December 31, 2019.
14. LEASE ARRANGEMENTS
a. Right-of-use assets
Carrying amount
Land
Buildings
Transportation equipment
December 31
2020
2019
$ 56,108
5,710
18,811
$ 18,092
10,073
15,921
$ 80,629
$ 44,086
For the Year Ended December 31
2020
2019
Additions to right-of-use assets
$ 60,951
$ 9,013
Disposal
$ (1,052)
$
(193)
Depreciation charge for right-of-use assets
Land
Buildings
Transportation equipment
b. Lease liabilities
Carrying amount
Current
Non-current
336
$
7,916
5,228
10,212
$ 7,853
5,177
7,730
$ 23,356
$ 20,760
December 31
2020
2019
$ 20,500
$ 61,202
$ 19,218
$ 25,265
Range of discount rate for lease liabilities was as follows:
Land
Buildings
Transportation equipment
c. Other lease information
December 31
2020
2019
1.75%-3.759% 1.75%-3.759%
1.409%-1.9%
1.409%-1.9%
3.038%
3.038%
For the Year Ended December 31
2020
2019
Expenses relating to short-term leases
Expenses relating to low-value asset leases
Total cash outflow for leases
$ 11,370
$
109
$ (35,531)
$ 10,219
$
225
$ (29,739)
15. INVESTMENT PROPERTIES
Completed investment properties
$ 8,314,798
$ 8,417,355
December 31
2020
2019
Cost
Balance at January 1, 2020
Additions
Balance at December 31, 2020
Balance at January 1, 2019
Additions
Transfers from property, plant and equipment
Disposals
Balance at December 31, 2019
Accumulated depreciation and impairment
Balance at January 1, 2020
Depreciation expense
Balance at December 31, 2020
Completed
Investment
Properties
$ 9,975,140
-
$ 9,975,140
$ 10,075,153
1,211
4,990
(106,214)
$ 9,975,140
$ 1,557,785
102,557
$ 1,660,342
(Continued)
337
Financial Information
Balance at January 1, 2019
Depreciation expense
Transfers from property, plant and equipment
Disposals
Balance at December 31, 2019
Completed
Investment
Properties
$ 1,523,357
109,166
439
(75,177)
$ 1,557,785
(Concluded)
The completed investment properties are depreciated using the straight-line method over their
estimated useful lives of 20 to 50 years.
The main investment properties of the Company are the Walsin Xin Yi Building and other
completed investment properties. The building valuation was commissioned by independent
appraisal agencies (third parties). As of December 31, 2020 and 2019, the fair values of
completed investment properties were NT$29,252,925 thousand and NT$29,098,613 thousand,
respectively.
16. BORROWINGS
Short-term borrowings
Current portion of long-term borrowings
Long-term borrowings
December 31
2020
2019
6,591,019 $ 9,350,000
$
$
6,000,000 $ 6,500,000
$ 31,140,014 $ 16,500,000
a. Short-term borrowings as of December 31, 2020 and 2019 were as follows:
December 31
2020
2019
Interest Rate
%
Amount
Interest Rate
%
Amount
Materials procurement
0.70%-0.90% $ 5,091,019
-
$
-
loans
Bank line of credit
0.65%
1,500,000
0.8-1.2097%
9,350,000
$ 6,591,019
$ 9,350,000
338
b. Long-term borrowings as of December 31, 2020 and 2019 were as follows:
December 31
2020
Significant Covenant
Amount
2019
Amount
Bank of Taiwan
Long-term credit loan, principal repayments at
$
-
$ 1,000,000
Taishin International Bank
Long-term credit loan; principal repayments at
maturity, from August 7, 2017 to May 9, 2020
maturity, from September 22, 2017 to September 22,
2020
Taipei Fubon Commercial
Long-term credit loan; principal repayments at
Bank
maturity, from September 22, 2017 to September 22,
2020
Chang Hwa Commercial Bank Long-term credit loan; principal repayments at
maturity, from September 22, 2017 to September 22,
2020
First Commercial Bank
Long-term credit loan; principal repayments at
maturity, from September 22, 2017 to September 22,
2020
-
-
-
-
2,000,000
1,000,000
1,500,000
1,000,000
First Commercial Bank
Long-term credit loan; principal repayments at
1,000,000
1,000,000
maturity, from December 28, 2018 to December 28,
2021
Hua Nan Commercial Bank
Long-term credit loan; principal repayments at
1,500,000
1,500,000
Hua Nan Commercial Bank
Long-term credit loan; principal repayments at
1,500,000
1,500,000
maturity, from March 5, 2018 to March 5, 2021
maturity, from December 28, 2018 to December 28,
2021
Chinatrust Commercial Bank
Mid-term credit loan; principal repayments at maturity,
1,000,000
1,000,000
Mega International
from March 5, 2018 to March 5, 2021
Long-term credit loan; principal repayments at
Commercial Bank Co., Ltd.
maturity, from March 5, 2018 to March 5, 2021
Bank of Taiwan
Long-term credit loan; principal repayments at
maturity, from March 4, 2019 to March 4, 2022
1,000,000
1,000,000
3,000,000
3,000,000
Cathay United Bank
Long-term credit loan; principal repayments at
1,500,000
1,500,000
Taiwan Cooperative Bank
Long-term credit loan; principal repayments at
1,000,000
1,000,000
maturity, from March 4, 2019 to March 4, 2022
maturity, from March 4, 2019 to March 4, 2022
Bank
Taipei Fubon Commercial
Long-term credit loan; principal repayments at
maturity, from June 3, 2019 to June 3, 2022
Chang Hwa Commercial Bank Long-term credit loan; principal repayments at
maturity, from June 3, 2019 to June 3, 2022
Long-term credit loan; principal repayments at
maturity, from June 3, 2019 to June 3, 2022
Long-term credit loan; principal repayments at
Chinatrust Commercial Bank
KGI Bank
1,000,000
1,000,000
1,000,000
1,000,000
1,500,000
1,500,000
1,500,000
1,500,000
Standard Chartered Bank
maturity, from September 3, 2019 to September 3,
2022
Long-term credit loan; applied for the extension of the
final maturity date to December 31, 2022 on
December 18, 2020; principal repayments at maturity,
from January 14, 2020 to December 31, 2022
5,352,144
DBS Bank
Long-term credit loan; extended the drawdown term to
3,028,500
3 years on September 30, 2020; principal
repayments at maturity, from March 30, 2020 to
March 30, 2023
DBS Bank
Long-term credit loan; extended the drawdown term to
3,018,600
DBS Bank
Standard Chartered Bank
3 years on September 30, 2020; principal
repayments at maturity, from March 30, 2020 to
March 30, 2023
Long-term credit loan; extended the drawdown term to
3 years on October 15, 2020; principal repayments at
maturity, from April 15, 2020 to April 15, 2023
Long-term credit loan; applied for the extension of the
final maturity date to December 31, 2022 on
December 18, 2020; principal repayments at maturity,
from December 3, 2020 to December 31, 2022
3,010,000
2,093,000
-
-
-
-
-
(Continued)
339
Financial Information
December 31
2020
Significant Covenant
Amount
2019
Amount
Bank of Taiwan
Long-term credit loan; principal repayments at
$ 3,000,000
$
maturity, from September 22, 2020 to September 22,
2025; principal to be repaid in two phases: From the
5th year, repayments are due once every six months;
at rates of 20% and 80%, respectively.
The Export-Import Bank of the
Long-term credit loan from September 22, 2020 to
1,137,770
-
-
Republic of China
Less current portion of
long-term borrowings
September 22, 2025; principal to be repaid evenly in
seven phases; 1st repayment due 48 months after the
drawdown date, after which repayments are due
once every six months
37,140,014
(6,000,000 )
23,000,000
(6,500,000 )
$ 31,140,014
$ 16,500,000
(Concluded)
1) Under the loan agreements with DBS Bank, the Company should maintain certain
financial ratios during the loan term, which are based on the annual and semi-annual
consolidated financial statements audited by the independent auditors. The financial ratios
are as follows:
a) Ratio of current assets to current liabilities not less than 100%;
b) Ratio of total liabilities less cash and cash equivalents to tangible net worth not more
than 120%;
c) Ratio of net income before interest expenses, taxation, depreciation and amortization
to interest expenses not less than 150%; and
d) Tangible net worth (net worth less intangible assets) not less than NT$55,000,000
thousand.
The range of weighted average effective interest rates of the credit borrowings was
0.10%-1.50% and 1.25%-1.40% per annum as of December 31, 2020 and 2019, respectively.
As of December 31, 2020 and 2019, the Company’s current portion of long-term borrowings
was NT$6,000,000 thousand and NT$6,500,000 thousand, respectively, under the loan
agreement. The Company’s financial statements for the years ended December 31, 2020 and
2019 showed that the Company was in compliance with these ratio requirements.
17. DERIVATIVE FINANCIAL INSTRUMENTS FOR HEDGING
December 31
2020
2019
Derivative financial liabilities for hedging - current
Fair value hedges - exchange rate swap contracts
$ 165,774
$ 55,402
The Company used exchange rate swap contracts to minimize its exposure to changes in the
exchange rate of its foreign-currency trade receivable and trade payable. The exchange rate swaps
340
and the corresponding financial assets have the same terms, and management believes that the
exchange rate swaps are highly effective hedging instruments. The outstanding exchange rate
swap contracts of the Company at the end of the reporting period were as follows:
Currencies
Contract
Expiration Date
Contract Amount
(In Thousands)
December 31, 2020
Exchange rate swap contracts USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to NTD
2022.01.13
2022.01.13
2022.01.13
2022.01.13
2022.01.13
2022.01.13
2022.01.13
2022.01.13
USD21,000/NTD607,457
USD21,000/NTD607,457
USD30,000/NTD867,795
USD30,000/NTD867,810
USD30,000/NTD867,810
USD30,000/NTD867,810
USD11,000/NTD318,197
USD27,000/NTD781,029
December 31, 2019
Exchange rate swap contracts USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to NTD
2020.01.14
2020.02.05
2020.02.05
2020.02.05
2020.02.05
2020.02.05
USD41,000/NTD1,252,837
USD20,000/NTD607,060
USD35,000/NTD1,063,895
USD10,000/NTD303,980
USD17,000/NTD517,455
USD17,000/NTD517,455
For the Year Ended December 31
2020
2019
$ (165,774)
$ (90,000)
$ (55,402)
$ (81,075)
Losses on the hedging instruments
Gains on the hedged items
18. RETIREMENT BENEFIT PLANS
a. Defined contribution plan
The Company adopted a pension plan under the Labor Pension Act (LPA), which is a
state-managed defined contribution plan. Under the LPA, the Company makes monthly
contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.
The total expense recognized in profit or loss for the years ended December 31, 2020 and
2019 was NT$89,868 thousand and NT$89,411 thousand, respectively, which represents
contributions payable to these plans by the Company at rates specified in the rules of the plan.
b. Defined benefit plans
The defined benefit plans adopted by the Company in accordance with the Labor Standards
Law are operated by the government of the ROC. Pension benefits are calculated on the basis
of the length of service and average monthly salaries of the 6 months before retirement. The
Company contributes amounts equal to 2% of total monthly salaries and wages to a pension
fund administered by the pension fund monitoring committee. Pension contributions are
341
Financial Information
deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the
Company assesses the balance in the pension fund. If the amount of the balance in the pension
fund is inadequate to pay retirement benefits for employees who conform to retirement
requirements in the next year, the Company is required to fund the difference in one
appropriation that should be made before the end of March of the next year. The pension fund
is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company
has no right to influence the investment policy and strategy.
The amounts included in the balance sheets in respect of the Company’s defined benefit plans
are as follows:
December 31
2020
2019
Present value of defined benefit obligation
Fair value of plan assets
$ 1,366,378
(1,074,219)
$ 1,456,719
(993,518)
Net defined benefit liabilities
$
292,159
$
463,201
As of December 31, 2020 and 2019, net defined benefit liabilities of NT$1,922 thousand and
NT$1,005 thousand, respectively, were recorded as “other payables - accrued expense.”
Balance at January 1, 2019
Service cost
Current service cost
Past service cost
Net interest expense (income)
Recognized in profit or loss
Remeasurement
Return on plan assets (excluding
amounts included in net
interest)
Actuarial (gain) loss
Changes in demographic
assumptions
Changes in financial
assumptions
Experience adjustments
Recognized in other comprehensive
income
Contributions from the employer
Benefits paid
Account paid
Balance at December 31, 2019
Present Value
of the Defined
Benefit
Obligation
Fair Value of
the Plan Assets
Net Defined
Benefit
Liabilities
(Assets)
$ 1,457,483
$
(872,070)
$
585,413
14,653
1,941
14,575
31,169
-
-
(8,778)
(8,778)
14,653
1,941
5,797
22,391
-
(30,782)
(30,782)
3,142
32,948
17,478
53,568
-
(69,456)
(16,045)
1,456,719
-
-
-
(30,782)
(151,344)
69,456
-
(993,518)
3,142
32,948
17,478
22,786
(151,344)
-
(16,045)
463,201
(Continued)
342
Service cost
Current service cost
Past service cost
Net interest expense (income)
Recognized in profit or loss
Remeasurement
Return on plan assets (excluding
amounts included in net
interest)
Actuarial (gain) loss
Changes in demographic
assumptions
Changes in financial
assumptions
Experience adjustments
Recognized in other comprehensive
income
Contributions from the employer
Benefits paid
Account paid
Present Value
of the Defined
Benefit
Obligation
Fair Value of
the Plan Assets
Net Defined
Benefit
Liabilities
(Assets)
12,743
-
10,917
23,660
-
-
(7,483)
(7,483)
12,743
-
3,434
16,177
-
(32,941)
(32,941)
3,949
30,358
(45,036)
(10,729)
-
(88,652)
(14,620)
-
-
-
(32,941)
(128,929)
88,652
-
3,949
30,358
(45,036)
(43,670)
(128,929)
-
(14,620)
292,159
(Concluded)
Balance at December 31, 2020
$ 1,366,378
$ (1,074,219)
$
An analysis by function of the amounts recognized in profit or loss in respect of the defined
benefit plans is as follows:
Operating costs
Selling and marketing expenses
General and administrative expenses
Research and development expenses
For the Year Ended December 31
2020
2019
$
9,465
1,286
4,947
479
$ 12,015
1,630
8,512
234
$ 16,177
$ 22,391
Through the defined benefit plans under the Labor Standards Law, the Company is exposed to
the following risks:
1) Investment risk: The plan assets are invested in domestic and foreign equity and debt
securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau
or under the mandated management. However, in accordance with relevant regulations,
the return generated by plan assets should not be below the interest rate for a 2-year time
deposit with local banks.
343
Financial Information
2) Interest risk: A decrease in the government bond interest rate will increase the present
value of the defined benefit obligation; however, this will be partially offset by an increase
in the return on the plan’s debt investments.
3) Salary risk: The present value of the defined benefit obligation is calculated using the
future salaries of plan participants. As such, an increase in the salaries of the plan
participants will increase the present value of the defined benefit obligation.
The actuarial valuations of the present value of the defined benefit obligation were carried out
by qualified actuaries. The significant assumptions used for the purposes of the actuarial
valuations are as follows:
Discount rate(s)
Expected rate(s) of salary increase
December 31
2020
0.50%
2.25%
2019
0.75%
2.25%
If possible reasonable change in each of the significant actuarial assumptions will occur and
all other assumptions will remain constant, the present value of the defined benefit obligation
will increase (decrease) as follows:
Discount rate(s)
0.5% increase
0.5% decrease
Expected rate(s) of salary increase
0.5% increase
0.5% decrease
December 31
2020
2019
$ (59,752)
$ 63,935
$ 61,541
$ (58,145)
$ (64,814)
$ 69,431
$ 66,962
$ (63,183)
The sensitivity analysis presented may not be representative of the actual changes in the
present value of the defined benefit obligation as it is unlikely that the changes in assumptions
will occur in isolation of one another as some of the assumptions may be correlated.
19. EQUITY
Share capital
Ordinary shares
Capital surplus
Retained earnings
Others
344
December 31
2020
2019
$ 32,260,002
15,690,406
36,330,187
187,640
$ 33,260,002
16,055,238
31,179,511
(3,110,410)
$ 84,468,235
$ 77,384,341
a. Share capital
Ordinary shares
Number of authorized shares (in thousands)
Amount of authorized shares, par value $10
Number of issued and fully paid shares (in thousands)
Amount of issued and fully paid shares
December 31
2020
2019
6,500,000
6,500,000
$ 65,000,000 $ 65,000,000
3,326,000
$ 32,260,002 $ 33,260,002
3,226,000
As of December 31, 2019, the amount of the Company’s paid-in capital was NT$33,260,002
thousand, consisted of 3,326,000 thousand shares at par value of NT$10.
The Company cancelled 100,000 thousand treasury shares in August and November 2020. As
of December 31, 2020, the amount of the Company’s paid-in capital was NT$32,260,002
thousand, consisted of 3,226,000 thousand shares at par value of NT$10.
As of December 31, 2020, two thousand GDRs of the Company were traded on the
Luxembourg Stock Exchange. The total number of ordinary shares represented by the GDRs
was 22 thousand shares (one GDR represents 10 ordinary shares).
b. Capital surplus
December 31
2020
2019
Issuance of ordinary shares
Share of changes in capital surplus of associates
Treasury share transactions
Gain on disposal of property, plant and equipment
Others
$
9,867,654
467,070
$ 10,173,533
331,766
2,448,303
2,074,231
1,027,405
2,254,074
2,074,231
1,027,377
$ 15,690,406
$ 16,055,238
The premium from shares issued in excess of par (share premium from issuance of ordinary
shares, conversion of bonds and treasury share transactions) and donations may be used to
offset a deficit; in addition, when the Company has no deficit, such capital surplus may be
distributed as cash dividends or transferred to share capital (limited to a certain percentage of
the Company’s capital surplus and to once a year).
The capital surplus arises from changes in capital surplus of associates accounted for using the
equity method, employee share options and share warrants may not be used for any purpose.
c. Retained earnings and dividend policy
Based on Company’s Articles of Incorporation, where the Company made a profit in a fiscal
year, the profit shall be first utilized for paying taxes and offsetting losses of previous years,
and 10% of the remaining profit should be set aside as legal reserve. Any remaining profit
together with any undistributed retained earnings should then be set aside as a special reserve
in accordance with the applicable laws and regulations, and the remainder shall be used by the
Company’s board of directors as the basis for proposing a distribution plan, which should be
345
Financial Information
resolved in the shareholders’ meeting for the distribution of dividends and bonuses to
shareholders. The Company shall reserve no lesser than 40% of the remaining profit as
shareholders’ bonuses, which can be distributed in the form of cash or shares. However, the
cash dividends distributed shall not be lesser than 70% of the total dividends distributed.
An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the
Company’s paid-in capital. The legal reserve may be used to offset any deficits. If the
Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in
capital, the excess may be transferred to capital or distributed in cash.
Items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No.
1030006415 issued by the FSC and in the directive titled “Questions and Answers for Special
Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed
from a special reserve by the Company.
Refer to Note 21 for the policies on the distribution of employees’ compensation and
remuneration of directors and supervisors.
The appropriation of earnings for 2019 and 2018 was approved in the shareholders’ meeting
on May 29, 2020 and May 24, 2019, respectively. The appropriation and dividends per share
were as follows:
Appropriation of Earnings
Dividends Per Share (NT$)
2019
2018
Legal reserve
Special reserve
Cash dividends
$
314,968
(932,728)
1,663,000
$ 1,175,678
1,330,888
3,991,200
$ 1,045,240
$ 6,497,766
2019
$
-
-
0.50
2018
$
-
-
1.20
The appropriations of earnings for 2020 had been proposed by the Company’s board of
director on February 26, 2021 were as follows:
Legal reserve
Special reserve
Cash dividends
Appropriation
of Earnings
Dividends Per
Share (NT$)
$
681,368
(398,160)
3,088,200
$ 3,371,408
$
-
-
0.9
The appropriation of earnings for 2020 is subject to the resolution of the shareholders in their
meeting to be held on May 28, 2021.
d. Special reserve
Special reserve
$ 3,110,410
$ 4,043,138
December 31
2020
2019
346
Information regarding any changes to the above special reserve was as follows:
Balance at January 1
Appropriations
For the Year Ended December 31
2020
2019
$ 4,043,138
(932,728)
$ 2,712,250
1,330,888
Balance at December 31
$ 3,110,410
$ 4,043,138
e. Other equity items
1) Exchange differences on translation of the financial statements of foreign operations
Balance at January 1
Recognized for the year
2020
2019
$ (5,546,359)
$ (3,567,540)
Share from subsidiaries and associates accounted
for using the equity method
(358,776)
(1,978,819)
Balance at December 31
$ (5,905,135)
$ (5,546,359)
Exchange differences relating to the translation of the results and net assets of the
Company’s foreign operations from their functional currencies to the Company’s
presentation currency (the New Taiwan dollar) were recognized directly in other
comprehensive income and accumulated in the foreign currency translation reserve.
Exchange differences previously accumulated in the foreign currency translation reserve
were reclassified to profit or loss on the disposal of the foreign operation.
2) Unrealized valuation gain (loss) on financial assets at FVTOCI
Balance at January 1
Recognized for the year
For the Year Ended December 31
2020
2019
$ 2,435,949
$
(474,446)
Unrealized gain - equity instruments
Share from associates accounted for using the
equity method
1,258,198
1,572,352
2,398,628
1,338,043
Balance at December 31
$ 6,092,775
$ 2,435,949
3) Cash flow hedges
Balance at January 1
Transferred to initial carrying amount of hedged
items
Balance at December 31
2020
2019
$
$
-
-
-
$ (1,151)
1,151
$
-
347
Financial Information
The cash flow hedging reserve represents the cumulative effective portion of gains or
losses arising from changes in fair value of hedging instruments entered into for cash flow
hedges. The cumulative gain or loss arising from changes in fair value of the hedging
instruments that was recognized and accumulated under the heading of cash flow hedging
reserve will be reclassified to profit or loss only when the hedged transaction affects the
profit or loss, or included as a basis adjustment to the non-financial hedged item.
f. Treasury shares
Treasury shares transactions for the year ended December 31, 2020 were summarized as
follows:
Purpose for
Reacquisition of
Ordinary Shares
Ordinary shares held
by the Company as
reserve for
protecting company
credit and equity
Number of
Treasury
Shares at
January 1,
2020
Treasury
Shares
Increase
During the
Year
Treasury
Shares
Decrease
During the
Year
Number of
Treasury
Shares as of
December 31,
2020
-
100,000,000
100,000,000
-
Article 28.2 of the Securities and Exchange Law stipulates that the number of treasury shares
held by the Company should not exceed 10% of the number of shares issued and that the cost
of acquisition of treasury shares should not exceed the total of retained earnings,
additional-paid-in capital and other realized capital surplus. In addition, the Company shall
neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as rights
to dividends and to vote, or exercise other shareholder’s rights on the treasury shares.
20. REVENUE
Sales revenue
Revenue from the rendering of services
Construction contract revenue
Rental income
Other revenue
For the Year Ended December 31
2020
2019
$ 63,215,460
103,917
43,350
684,318
50,645
$ 70,227,489
105,152
485,431
702,730
75,846
$ 64,097,690
$ 71,596,648
348
21. NET PROFIT FROM CONTINUING OPERATIONS
Non-operating Income and Expenses - Gain (Loss) on Disposal of Investments
Loss on disposal of investments - commodity futures
Loss on disposal of investments - forward exchange
contracts
Gain on disposal of investments - exchange rate swap
contracts
Loss on disposal of investments - options
Non-operating Income and Expenses - Impairment Loss
Property, plant and equipment
Investments accounted for using the equity method
For the Year Ended December 31
2020
2019
$
(240,856)
$ (1,254,949)
(124,006)
(35,050)
2,349
(2,938)
-
-
$
(365,451)
$ (1,289,999)
For the Year Ended December 31
2020
2019
$
$
-
-
-
$
183
1,678,639
$ 1,678,822
Employee Benefits Expense, Depreciation and Amortization
For the Year Ended December 31, 2020
Operating
Costs
Operating
Expenses
Non-operating
Expenses and
Losses
Total
Short-term benefits
Post-employment benefits $
$
Other employee benefits
$ 1,396,553
65,415
133,860
Depreciation
Property, plant and
equipment
Right-of-use assets
Investment property
$ 1,038,978
3,218
96,632
$ 1,138,828
Amortization
$
-
$
$
$
$
$
$
999,715
40,630
60,013
114,954
20,138
5,925
141,017
222
$
$
$
$
$
$
-
-
-
$ 2,396,268
106,045
$
193,873
$
-
-
-
$ 1,153,932
23,356
102,557
-
$ 1,279,845
-
$
222
349
Financial Information
For the Year Ended December 31, 2019
Operating
Costs
Operating
Expenses
Non-operating
Expenses and
Losses
Short-term benefits
Post-employment benefits $
$
Other employee benefits
$ 1,413,796
69,075
140,705
Depreciation
Property, plant and
equipment
Right-of-use assets
Investment property
$
991,914
1,745
101,339
$
$
$
$
948,375
42,726
61,055
83,934
19,015
7,827
$ 1,094,998
$
110,776
$
$
$
$
$
Total
$ 2,362,171
111,801
$
201,760
$
$ 1,075,848
20,760
109,166
-
-
-
-
-
-
-
$ 1,205,774
In compliance with the Company’s Articles; the amendments stipulated the distribution of
compensation of employees and remuneration of directors and supervisors at rates of no less than
1% and no higher than 1%, respectively, of net profit before income tax, compensation of
employees, and remuneration to directors and supervisors. For the years ended December 31,
2020 and 2019, the compensation of employees amounted to NT$68,500 thousand and
NT$48,500 thousand, respectively, and the remuneration to directors and supervisors amounted to
NT$34,050 thousand and NT$21,000 thousand, respectively. The compensation of employees and
remuneration of directors and supervisors in cash for the years ended December 31, 2020 and
2019 were approved by the Company’s board of directors on February 26, 2021, and February 27,
2020, respectively.
If there is a change in the proposed amounts after the annual financial statements are authorized
for issue, the differences will be recorded as a change in accounting estimate.
There was no compensation of employees and the remuneration of directors and supervisors for
2019 and 2018 that were respectively resolved by the Company’s board of directors on February
27, 2020 and February 22, 2019 and the respective amounts were recognized in the financial
statements.
Information on the employees’ compensation and remuneration of directors and supervisors
resolved by the Company’s board of directors in 2021 and 2020 is available at the Market
Observation Post System website of the Taiwan Stock Exchange.
22. INCOME TAXES RELATING TO CONTINUING OPERATIONS
a. The major components of tax (benefit) expense were as follows:
Current tax
In respect of the current year
Income tax on unappropriated earnings
350
For the Year Ended December 31
2020
2019
$
28,523
48,843
$ 17,000
418,342
(Continued)
Land value increment tax
Adjustments for prior year
Others
Deferred tax
In respect of the current year
Adjustments to deferred tax attributable to changes
in tax rates and laws
For the Year Ended December 31
2020
2019
-
-
16,217
93,583
12,660
(38,986)
-
409,016
(94,000)
(469,000)
(26,622)
(120,622)
-
(469,000)
Income tax benefit recognized in profit or loss
$ (27,039)
$ (59,984)
(Concluded)
A reconciliation of accounting profit and income tax benefit is as follows:
For the Year Ended December 31
2020
2019
Profit before tax from continuing operations
$ 6,664,110
$ 3,089,695
Income tax expense calculated at the statutory rate
Land value increment tax
Tax-exempt gain on disposal of land
Equity in investees’ net gain
Tax-exempt dividend income
Loss on investments
Tax-exempt subsidize revenue
Others
Income tax on unappropriated earnings
Adjustments for prior years’ tax
$
$ 1,332,822
-
-
(861,000)
(22,000)
(495,100)
(3,880)
(102)
48,843
(26,622)
618,000
12,660
(43,000)
(843,000)
(26,000)
(164,000)
-
6,000
418,342
(38,986)
Income tax benefit recognized in profit or loss
$
(27,039)
$
(59,984)
In July 2019, the president of the ROC announced the amendments to the Statute for Industrial
Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter
that are reinvested in the construction or purchase of certain assets or technologies are allowed
as deduction when computing the income tax on unappropriated earnings. When calculating
the tax on unappropriated earnings, the Company only deducts the amount of the
unappropriated earnings that has been reinvested in capital expenditure.
In addition, in accordance with Rule No. 10904558730 issued by the MOF, the Company has
deducted the amount of dividends distributed in 2020 attributable to the increase in the
beginning retained earnings for 2018 as a result of initial adoption of IFRS 9 and IFRS 15
when calculating the tax on unappropriated earnings for 2018.
351
Financial Information
b. Current tax assets and liabilities
Current tax assets
Current tax liabilities
Income tax payable
c. Deferred tax assets and liabilities
Deferred tax assets
Pension expense not currently deductible
Provision for permanent devaluation loss on
long-term investments
Provision for devaluation loss on obsolete and
slow-moving inventories
Provision for impairment loss on idle assets
Loss deduction
Others
Deferred tax liabilities
December 31
2020
2019
$
-
$
-
$ 108,164
$ 278,669
December 31
2020
2019
$
32,000
$ 58,000
547,000
552,000
28,000
17,000
254,000
103,573
88,000
18,000
-
147,000
Reserve for land value increment tax
(131,132)
(131,132)
Deferred tax assets - non-current
Deferred tax liabilities - non-current
$ 850,441
$ 731,868
$ 981,573
(131,132)
$ 863,000
(131,132)
$ 850,441
$ 731,868
d. The Company deducted the following amount of tax for the loss of subsequent loss as of
December 31, 2020.
Deduction loss
Expired at 2030
December 31,
2020
$ 254,000
e. The Company’s income tax returns through 2017 had been assessed by tax authorities.
352
23. EARNINGS PER SHARE
For the Year Ended December 31
2020
2019
Amounts
(Numerator)
After Income
Tax
(Attributable
to Owners of
the Company)
Shares
(Denominator)
(In Thousands)
Earnings Per
Share (In
Dollars)
After Income
Tax
(Attributable
to Owners of
the Company)
Amounts
(Numerator)
After Income
Tax
(Attributable
to Owners of
the Company)
Earnings Per
Share (In
Dollars)
After Income
Tax
(Attributable
to Owners of
the Company)
Shares
(Denominator)
(In Thousands)
$ 6,691,149
3,276,128
$ 2.04
$
3,149,679
3,326,000
$ 0.95
-
4,100
-
4,136
$ 6,691,149
3,280,228
$ 2.04
$
3,149,679
3,330,136
$ 0.95
Basic earnings per
share
Net income
Effect of dilutive
potential ordinary
shares
Diluted earnings per
share
Net income plus
dilutive effect
24. OPERATING LEASE ARRANGEMENTS
Operating leases are related to the investment property owned by the Company with lease terms
between 5 and 10 years, with an option to extend for additional 10 years. All operating lease
contracts contain market review clauses in the event that the lessee exercises its option to renew.
The lessee does not have a bargain purchase option to acquire the property at the expiry of the
lease period.
As of December 31, 2020 and 2019, deposits received under operating leases amounted to
NT$170,228 thousand and NT$170,550 thousand, respectively (recorded under other liabilities -
non-current).
As of December 31, 2020, the Company’s future minimum lease receivables on non-cancelable
operating lease commitments are as follows:
Years of 2021
2022-2026
25. CAPITAL MANAGEMENT
$
697,193
1,331,348
$ 2,028,541
The Company’s capital management objective is to ensure that it has the necessary financial
resources and operational plan so that it can cope with the next 12 months working capital
requirements, capital expenditures, debt repayments and dividends spending.
The capital structure of the Company consists of net debt (borrowings offset by cash and cash
equivalents) and equity attributable to owners of the Company (comprising issued capital,
reserves, retained earnings and other equity).
353
Financial Information
Key management personnel of the Company review the capital structure on a quarterly basis. As
part of this review, the key management personnel consider the cost of capital and the risks
associated with each class of capital. Based on recommendations of the key management
personnel, in order to balance the overall capital structure, the Company may adjust the amount of
dividends paid to shareholders, the number of new shares issued or repurchased, and/or the
amount of new debt issued or existing debt redeemed.
26. FINANCIAL INSTRUMENTS
a. Fair value of financial instruments that are not measured at fair value
The management considers the carrying amounts of financial assets and financial liabilities
recognized in the financial statements approximate the fair values.
b. Fair value of financial instruments that are measured at fair value on a recurring basis
● Fair value hierarchy
December 31, 2020
Financial assets at
FVTPL
Level 1
Level 2
Level 3
Total
Derivatives not
designated as
hedging instruments $
Corporate bonds
66,059
-
$
66,059
Financial assets at
FVTOCI
Investments in equity
instruments
Securities listed in
ROC
Unlisted securities
$ 6,475,588
-
$ 6,475,588
$
$
$
$
-
-
-
-
-
-
$
-
5,683,859
66,059
$
5,683,859
$ 5,683,859
$ 5,749,918
$
$
-
307,641
$ 6,475,588
307,641
307,641
$ 6,783,229
Financial liabilities at
FVTPL
Derivatives not
designated as
hedging instruments $
Derivative financial
liabilities for
hedging
$
354
-
-
-
$
15,839
$
-
$
15,839
165,774
-
165,774
$
181,613
$
-
$
181,613
Level 1
Level 2
Level 3
Total
$
39,088
$
13,501
$
-
$
52,589
December 31, 2019
Financial assets at
FVTPL
Derivatives not
designated as
hedging
instruments
Financial assets at
FVTOCI
Investments in equity
securities
Securities listed in
ROC
Unlisted securities
$ 4,729,384
-
$ 4,729,384
$
$
-
-
-
$
$
-
318,073
$ 4,729,384
318,073
318,073
$ 5,047,457
Financial liabilities at
FVTPL
Derivative financial
liabilities for
hedging
$
-
$
55,402
$
-
$
55,402
a) There were no transfers between Levels 1 and 2 in the nine months ended September
30, 2020 and 2019.
b) Financial assets that belong to Level 3 of the fair value hierarchy were recognized in
other comprehensive income - changes in fair value, and there were no other
adjustments.
c) Valuation techniques and inputs applied for Level 2 fair value measurement
Financial Instruments
Valuation Techniques and Inputs
Derivatives - foreign
exchange forward
contracts
Discounted cash flow. Future cash flows are estimated
based on observable forward exchange rates at the end
of the reporting period and contract forward rates,
discounted at a rate that reflects the credit risk of
various counterparties.
Derivatives - exchange rate
Discounted cash flow. Future cash flows are estimated
swap contracts
based on observable forward exchange rates at the end
of the reporting period and contract forward rates,
discounted at a rate that reflects the credit risk of
various counterparties.
355
Financial Information
d) Valuation techniques and inputs applied for Level 3 fair value measurement
Financial Instruments
Valuation Techniques and Inputs
Unlisted equity securities Market approach. Fair values are determined based on
the observable share prices of comparable companies
at the end of the reporting period, adjusted by the
price earnings ratio and price-to-book ratio of the
investees.
Derivatives - options
Option pricing models. Fair values are determined using
option pricing models where the significant
unobservable input is historical volatility.
Hybrid instruments -
corporate bonds
Discounted cash flow. Future cash flows are estimated
based on contract rates and discounted at a rate that
reflects the credit risk of various counterparties.
c. Categories of financial instruments
Financial assets
Financial assets at amortized cost
Cash and cash equivalents
Contract assets
Notes receivable and trade receivables (including
related parties)
Other receivables
Long-term receivables (including related parties)
Refundable deposits
Financial assets at FVTPL (current and non-current)
Financial assets at FVTOCI
Financial liabilities
December 31
2020
2019
$
4,511,090
12,937
$ 1,284,354
331,195
2,613,004
271,722
5,349,885
26,913
5,749,918
6,783,229
2,657,946
2,555,588
-
59,779
52,589
5,047,457
Financial liabilities at FVTPL (current and non-current)
Derivative financial liabilities for hedging (current and
non-current)
Financial liabilities at amortized cost
Short-term borrowings
Trade payables
Other payables
Long-term borrowings (including current portion)
Deposits received (accounted for as other
non-current liabilities)
15,839
-
165,774
55,402
6,591,019
2,522,328
8,009,712
37,140,014
9,350,000
2,499,976
6,865,271
23,000,000
186,325
172,913
d. Financial risk management objectives and policies
The Company’s major financial instruments include equity investments, borrowings, trade
receivables and trade payables. The Company’s corporate treasury function provides services
356
to the business, coordinates access to domestic and international financial markets, and
monitors and manages the financial risks relating to the operations of the Company through
internal risk reports that analyze exposures by degree and magnitude of risks. These risks
include market risk, credit risk and liquidity risk.
The Company seeks to minimize the effects of these risks by using derivative financial
instruments to hedge risk exposures. The use of financial derivatives is governed by the
Company’s policies approved by the board of directors, which provides written principles on
foreign exchange risk, interest rate risk and credit risk, the use of financial derivatives and
non-derivative financial instruments, and the investment of excess liquidity. Compliance with
policies and exposure limits is reviewed by the internal auditors on a continuous basis. The
Company did not enter into or trade financial instruments for speculative purposes.
1) Market risk
The Company’s activities exposed it primarily to the financial risks of changes in foreign
currency exchange rates and interest rates. The Company entered into foreign exchange
forward contracts and interest rate swaps contracts to hedge foreign currency risk and
interest rate risk.
There has been no change to the Company’s exposure to market risks or the manner in
which these risks are managed and measured.
a) Foreign currency risk
The Company had foreign currency sales and purchases, which exposed the Company
to foreign currency risk. Exchange rate exposures were managed within approved
policy parameters utilizing forward foreign exchange contracts.
It is the Company’s policy to negotiate the terms of the hedge derivatives to match the
terms of the hedged item to maximize hedge effectiveness.
The carrying amounts of the Company’s foreign currency denominated monetary
assets and monetary liabilities (including those eliminated on consolidation) at the end
of the reporting period were as follows:
Assets
U.S. dollar
Japanese yen
Euro
Singapore dollar
Hong Kong dollar
Australian dollar
Renminbi
December 31
2020
2019
$
2,098,969
27,663
428,652
-
7,365
12,493
5
$ 1,190,790
30,990
315,247
2,066
9,290
1,946
5,232
(Continued)
357
Financial Information
Liabilities
U.S. dollar
Euro
Swiss Franc
Japanese yen
December 31
2020
2019
11,564,577
159
549
1,108
5,594,702
-
526
-
(Concluded)
The carrying amounts of the Company’s derivatives exposed to foreign currency risk
at the end of the reporting period were as follows:
Assets
U.S. dollar
Liabilities
U.S. dollar
Euro
December 31
2020
2019
$
7,556,970
$ 4,542,621
284,800
232,966
1,499,000
-
Sensitivity analysis
The Company is mainly exposed to the U.S. dollar.
The following table details the Company’s sensitivity to a 1% increase and decrease in
the New Taiwan dollar (functional currency) against the relevant foreign currencies.
The sensitivity analysis included only outstanding foreign currency denominated
monetary items, and adjusts their translation at the end of the year for a 1% change in
foreign currency rates.
Profit or loss
b) Interest rate risk
U.S. Dollar Impact
For the Year Ended December 31
2020
2019
$ (24,264)
$ (13,603)
The Company is exposed to interest rate risk because it borrows funds at both fixed
and floating interest rates.
358
The carrying amount of the Company’s financial assets and financial liabilities with
exposure to interest rates at the end of the year were as follows:
Cash flow interest rate risk
Financial liabilities
Sensitivity analysis
December 31
2020
2019
$ 43,731,033
$ 32,350,000
The sensitivity analysis below was determined based on the Company’s exposure to
interest rates for financial instruments at the end of the year. For floating rate
liabilities, the analysis was prepared assuming the amount of each liability outstanding
at the end of the year was outstanding for the whole year.
If interest rates had been 1% basis points higher and all other variables were held
constant, the Company’s pre-tax profit for the years ended December 31, 2020 and
thousand,
2019 would decrease by NT$437,310
respectively.
thousand and NT$323,500
Hedge accounting
For the year ended December 31, 2020
The Company’s hedging strategy is to enter into foreign exchange forward contracts to
avoid exchange rate exposure on 100% of the fair value of its foreign currency
denominated receipts and payments and to manage exchange rate exposure. Those
transactions are designated as fair value hedges. Adjustments are recognized directly
in profit or loss and are presented as hedged items on the statements of comprehensive
income.
Hedging
Instrument
Currency
Notional
Amount
Maturity
Forward Price
Line Item in
Balance Sheet
Carrying Amount
Change in
Value Used for
Calculating
Hedge
Asset
Liability
Effectiveness
Exchange rate
USD to NTD
USD21,000/
2021.1.13
$
590,058
Financial
$
-
$ (17,398 )
$
swap
contracts
NTD607,457
USD to NTD
USD21,000/
2021.1.13
590,058
NTD607,467
USD to NTD
USD30,000/
2021.1.13
842,940
NTD867,795
USD to NTD
USD30,000/
2021.1.13
842,940
NTD867,810
USD to NTD
USD30,000/
2021.1.13
842,940
NTD867,810
USD to NTD
USD30,000/
2021.1.13
842,940
NTD867,810
USD to NTD
USD11,000/
2021.1.13
309,078
NTD318,197
USD to NTD
USD27,000/
2021.1.13
758,646
NTD781,029
liabilities for
hedging
Financial
liabilities for
hedging
Financial
liabilities for
hedging
Financial
liabilities for
hedging
Financial
liabilities for
hedging
Financial
liabilities for
hedging
Financial
liabilities for
hedging
Financial
liabilities for
hedging
-
-
-
-
-
(17,409 )
(24,855 )
(24,870 )
(24,870 )
(24,870 )
-
(9,119 )
-
(22,383 )
-
-
-
-
-
-
-
-
359
Financial Information
2) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations
resulting in a financial loss to the Company. At the end of the year, the Company’s
maximum exposure to credit risk, which would cause a financial loss to the Company due
to the failure of the counterparty to discharge its obligation and due to the financial
guarantees provided by the Company, could be equal to the total of the following:
a) The carrying amount of the respective recognized financial assets as stated in the
balance sheet; and
b) The maximum amount the entity would have to pay if the financial guarantee is called
upon, irrespective of the likelihood of the guarantee being exercised.
The Company adopted a policy of only dealing with creditworthy counterparties and
obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of
financial loss from defaults. The Company’s exposure and the credit ratings of its
counterparties are continuously monitored and the aggregate value of transactions
concluded is spread amongst the approved counterparties. Credit exposure is controlled by
setting credit limits that are reviewed and approved by the risk management committee
annually.
In order to minimize credit risk, the management of the Company has delegated a team
responsible for determination of credit limits, credit approvals and other monitoring
procedures to ensure that follow-up action is taken to recover overdue receivables. In
addition, the Company reviews the recoverable amount of each individual trade
receivables at the end of the year to ensure that adequate impairment losses are made for
irrecoverable amounts. In this regard, the directors of the Company consider that the
Company’s credit risk was significantly reduced.
3) Liquidity risk
The Company manages liquidity risk by monitoring and maintaining a level of cash and
cash equivalents deemed adequate to finance the Company’s operations and mitigate the
effects of fluctuations in cash flows. In addition, management monitors the utilization of
bank borrowings and ensures compliance with loan covenants.
a) The following table details the Company’s remaining contractual maturities for its
non-derivative financial liabilities with agreed upon repayment periods.
December 31, 2020
Non-derivative
financial liabilities
Variable interest rate
liabilities
Lease liabilities
Non-interest bearing
Fixed interest rate liabilities
360
1 Year
1-2 Years
2-5 Years
5+ Years
Total
$ 12,591,019
21,319
4,084,602
5,768,000
$ 17,945,144
12,556
28,216
-
$ 12,057,100
22,822
115,184
-
$ 1,137,770
26,308
-
-
$ 43,731,033
83,005
4,948,002
5,768,000
$ 23,184,940
$ 17,985,916
$ 12,195,106
$ 1,164,078
$ 54,530,040
December 31, 2019
Non-derivative
financial liabilities
Variable interest rate
liabilities
Lease liabilities
Non-interest bearing
Fixed interest rate liabilities
1 Year
1-2 Years
2-5 Years
5+ Years
Total
$ 15,850,000
20,340
4,581,474
4,796,800
$ 7,000,000
12,699
26,850
-
$ 9,500,000
8,881
119,567
-
$
-
4,640
13,469
-
$ 32,350,000
46,560
4,741,360
4,796,800
$ 25,248,614
$ 7,039,549
$ 9,628,448
$
18,109
$ 41,934,720
b) The Company’s derivative financial instruments with agreed settlement date were as
follows:
December 31, 2020
Net settled
Commodity futures
contracts
Foreign exchange forward
contracts
Exchange rate swap
contracts
December 31, 2019
Net settled
Commodity futures
contracts
Foreign exchange
forward contracts
Exchange rate swap
contracts
On Demand
or Less Than
1 Month
1-3 Months
3 Months to
1 Year
1-5 Years
Total
$
(5,736)
$
58,469
$
13,326
$
(15,524)
(165,774)
-
-
(315)
-
$ (187,034)
$
58,469
$
13,011
$
-
-
-
-
$ 66,059
(15,839)
(165,774)
$ (115,554)
On Demand
or Less Than
1 Month
1-3 Months
3 Months to
1 Year
1-5 Years
Total
$ 37,695
$
6,092
$
(4,699)
$
13,216
-
(18,887)
(36,230)
-
-
$ 32,024
$ (30,138)
$
(4,699)
$
-
-
-
-
$ 39,088
13,216
(55,117)
$
(2,813)
361
Financial Information
e. Transfers of financial assets
Factored trade receivables that are not overdue at the end of the year were as follows:
Proceeds
from
Receivables
Factoring
Amount
Reclassified
to Other
Receivables
Advances
Received -
Unused
Advances
Received -
Used
Annual
Interest
Rates on
Advances
Received
(Used) (%)
Counterparty
2020
CTBC bank
$ 137,121
$
21,266
US$ 2,700
$
2019
CTBC bank
$ 162,569
$
13,636
US$ 2,700
$
-
-
-
-
27. TRANSACTIONS WITH RELATED PARTIES
Details of transactions between the Company and other related parties are disclosed as follows:
a. Related party name and category
Related Party Name
Related Party Category
Walsin Lihwa Holdings Ltd.
Walsin Info-Electric Corp.
Chin-Cherng Construction Co.
Min Maw Precision Industry Corp.
Dongguan Walsin Wire & Cable Co., Ltd.
Jiangyin Walsin Specialty Alloy Materials Co., Ltd.
Walsin Specialty Steel Corp.
Changshu Walsin Specialty Steel Co., Ltd.
Borrego Solar Systems, Inc.
Shanghai Walsin Power Cable & Wine Co., Ltd.
Yantai Walsin Stainless Steel Co., Ltd.
PT. Walsin Nickel Industrial Indonesia
Walsin Technology Corp.
Walton Advanced Engineering, Inc.
Chin-Xin Investment Co., Ltd.
Changzhou China Steel Precision Materials Co., Ltd.
Hangzhou Walsin Power Cable & Wire Co., Ltd.
Walsin Color Co., Ltd.
Winbond Electronics Corp.
Prosperity Dielectrics Co., Ltd.
Nuvoton Technology Corporation
HannStar Display Corp.
Kuong Tai Metal Industrial Co., Ltd.
HannStar Board Corp.
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Associate
Substantive related party
Substantive related party
Substantive related party
(Continued)
362
Related Party Name
Related Party Category
Global Brands Manufacture Ltd.
Info-Tek Corp.
VVG Inc.
b. Sales
Subsidiaries
Other related parties
c. Rental income
Subsidiaries
Associates
Other related parties
d. Purchases of goods
Subsidiaries
Other related parties
e. Construction contract
Substantive related party
Substantive related party
Substantive related party
(Concluded)
For the Year Ended December 31
2020
2019
$ 2,750,804
903,376
$ 4,257,414
958,958
$ 3,654,180
$ 5,216,372
For the Year Ended December 31
2020
2019
$
$
$
240
33,658
993
240
41,765
1,499
34,891
$
43,504
For the Year Ended December 31
2020
2019
$
$
$
8,938
3,891
361
2,676
12,829
$
3,037
For the Year Ended December 31
2020
2019
Subsidiaries
$
-
$
3,165
363
Financial Information
f. Administrative expenses
Subsidiaries
Associates
Other related parties
For the Year Ended December 31
2020
2019
$
$
$
390
12,955
10,725
392
11,232
12,311
24,070
$
23,935
The stock registration matters of the Company and related parties were handled together. The
related fees allocated to the related parties were charged against general and administrative
expenses.
g. Dividend income
Other related parties
HannStar Display Corp.
HannStar Board Corp.
Others
h. Notes receivable
Associates
Prosperity Dielectrics Co., Ltd.
Others
i. Trade receivables
Subsidiaries
Dongguan Walsin Wire & Cable Co., Ltd.
Others
Other related parties
For the Year Ended December 31
2020
2019
$
$
-
106,722
2,890
71,188
58,825
4,816
$
109,612
$
134,829
December 31
2020
2019
$
129
856
28,248
1,151
985
$
29,399
December 31
2020
2019
$
207,701
95,797
39,054
955,288
32,741
26,393
$
$
$
$
342,552
$ 1,014,422
364
j. Trade payables
Other related parties
$
684
$
116
December 31
2020
2019
k. Other receivables
Subsidiaries
Walsin Lihwa Holdings Ltd.
Associates
Other related parties
l. Other payables (included loans from related parties)
Related Party Category/Name
Walsin Lihwa Holdings Ltd.
Walsin Lihwa International Investments Ltd.
Walsin Info-Electric Inc.
Subsidiaries
Related Party Category/Name
Interest expense
Subsidiaries
$
$
$
December 31
2020
2019
-
9,945
2,598
$ 2,126,105
8,784
2,549
12,543
$ 2,137,438
December 31
2020
2019
-
5,698,656
72,058
1,594
$ 4,807,792
-
-
1,276
$ 5,772,308
$ 4,809,068
For the Year Ended December 31
2020
2019
$
22,415
$
87,776
The Company obtained loans from related parties at rates comparable to market interest rates.
m. Disposals of property, plant and equipment (included investment properties)
Related Party Category/Name
Proceeds
For the Year Ended
December 31
2020
2019
Gain on Disposal
For the Year Ended
December 31
2020
2019
Walsin Info-Electric Inc.
Prosperity Dielectrics Co., Ltd.
Shanghai Walsin Lihwa Power
Wine & Cable Co., Ltd.
$
$
17
295
91
-
295
91
$
-
- $
278,246 246,877
-
-
$
403
$
386
$ 278,246 $ 246,877
365
Financial Information
In 2019, the Company disposed of investment property to Prosperity Dielectrics Co., Ltd. The
valuation was arrived at by reference to market evidence of transaction prices for similar
properties and appraisal report.
n. Lease arrangements - Company is lessee
Line Item
Related Party Category/Name
2020
2019
December 31
Lease liabilities
Subsidiaries
$
5,361 $
10,200
Related Party Category/Name
For the Year Ended December 31
2020
2019
Interest expense
Subsidiaries
o. Guarantee deposits
Related Party Category/Name
Associates
Other related parties
p. Loan to related parties
$
152
$
241
December 31
2020
2019
$
$
$
7,225
282
8,916
417
7,507
$
9,333
Related Party Category/Name
December 31
2020
2019
PT. Walsin Nickel Industrial Indonesia
$ 5,349,885
$
-
Interest revenue
Subsidiaries
For the Year Ended December 31
2020
2019
$
127,413
$
-
q. Compensation of key management personnel
The remuneration of directors and key executives in 2020 and 2019 was as follows:
Short-term benefits
Post-employment benefits
366
For the Year Ended December 31
2020
2019
$
$
126,999
1,414
$
116,079
17,594
128,413
$
133,673
The remuneration of directors and key executives, as determined by the remuneration
committee, was based on the performance of individuals and market trends.
28. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY
The following assets were provided as collaterals for construction contract and tariff guarantee for
imported raw material:
December 31
2020
2019
Refundable deposits (recorded under non-current assets)
$
600
$ 34,662
29. SIGNIFICANT CONTINGENCIES LIABILITIES AND UNRECOGNIZED
COMMITMENTS
In addition to those disclosed in other notes, significant contingencies and unrecognized
commitments of the Company at December 31, 2020 and 2019 were as follows:
a. Outstanding letters of credit not reflected in the accompanying financial statements as of
December 31, 2020 and 2019 were as follows (in thousands):
U.S. dollar
Japanese yen
Euro
Renminbi
New Taiwan dollar
December 31
2020
2019
US$
17,455
JPY 108,812
EUR
4,770
RMB 13,134
82,347
NT$
US$ 20,182
94,529
JPY
EUR
5,277
RMB 13,134
NT$ 30,799
b. As of December 31, 2020, the outstanding standby letters of credit not reflected in the
accompanying financial statements amounted to approximately NT$392,784 thousand and
US$30 thousand. As of December 31, 2019, the outstanding standby letters of credit not
reflected in the accompanying financial statements amounted to approximately NT$336,075
thousand and US$10 thousand. Tariff letters of credit amounted to approximately
NT$434,000 thousand and NT$524,000 thousand as of December 31, 2020 and 2019,
respectively.
c. Non-cancelable copper and nickel procurement contracts with total contract value of
US$22,681 thousand US$23,404 thousand were in effect as of December 31, 2020 and 2019.
30. SIGNIFICANT EVENT AFTER THE REPORTING PERIOD
On January 6, 2011, the Company issued 205,332,690 shares in exchange for 171,103,730 shares
of TECO Electric & Machinery Co., Ltd. The Company and TECO agreed to build a strategic
alliance to enhance competitiveness and cooperation in next generation smart grid, smart
manufacturing, and green energy industry.
367
Financial Information
In addition, the acquisition of shares of TECO Electric & Machinery Co., Ltd. for a total price of
no more than NT$1.8 billion was approved by the Company’s board of directors on January 22,
2011.
31. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN
CURRENCIES
The Company’s significant financial assets and liabilities denominated in foreign currencies
aggregated by the foreign currencies other than functional currencies of the Company and the
related exchange rates between foreign currencies and respective functional currencies were as
follows:
December 31, 2020
Financial assets
Monetary items
U.S. dollar
Japanese yen
Euro
Hong Kong dollar
Australian dollar
Renminbi
Investments accounted for using the
equity method
U.S. dollar
Renminbi
Indonesia rupiah
Financial liabilities
Monetary items
U.S. dollar
Japanese yen
Euro
Swiss franc
Unit: Foreign Currency/In Thousands of Taiwan Dollars
Foreign
Currency
Exchange Rate
Carrying
Amount
$
73,700
100,120
12,240
2,005
569
1
28.4800
0.2763
35.0200
3.6730
21.9500
4.3648
$ 2,098,969
27,663
428,652
7,365
12,493
5
28,042
8,344,139
4,184,015
28.4800
4.3648
0.0020
798,648
36,420,832
8,494
406,060
4,011
5
17
28.4800
0.2763
35.0200
32.3050
11,564,577
1,108
159
549
368
December 31, 2019
Financial assets
Monetary items
U.S. dollar
Japanese yen
Euro
Singapore dollar
Hong Kong dollar
Australian dollar
Renminbi
Investments accounted for using the
equity method
U.S. dollar
Renminbi
Indonesia rupiah
Financial liabilities
Monetary items
U.S. dollar
Swiss franc
Foreign
Currency
Exchange Rate
Carrying
Amount
$
39,719
112,281
9,385
93
2,414
93
1,218
29.9800
0.2760
33.5900
22.2800
3.8490
21.0050
4.2973
$ 1,190,790
30,990
315,247
2,066
9,290
1,946
5,232
54,416
8,385,241
83,955
29.9800
4.2973
0.0022
1,631,377
36,034,149
183
186,614
17
29.9800
30.9250
5,594,702
526
For the years ended December 31, 2020 and 2019, realized and unrealized net foreign exchange
gains were NT$73,937 thousand and NT$61,393 thousand, respectively. It is impractical to
disclose net foreign exchange gains (losses) by each significant foreign currency due to the
variety of the foreign currency transactions and functional currencies of the Company entities.
32. SEPARATELY DISCLOSED ITEMS
a. Information about significant transactions and investees:
1) Financing provided to others (Table 1)
2) Endorsements/guarantees provided (None)
3) Marketable securities held (Table 2)
4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million
or 20% of the paid-in capital (Table 3)
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the
paid-in capital (None)
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the
paid-in capital (None)
369
Financial Information
7) Total purchases from or sales to related parties amounting to at least NT$100 million or
20% of the paid-in capital (Table 4)
8) Receivables from related parties amounting to at least NT$100 million or 20% of the
paid-in capital (Table 5)
9) Trading in derivative instruments (Notes 7 and 16)
10) Information on investees (Table 6)
b. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal
business activities, paid-in capital, method of investment, inward and outward remittance
of funds, ownership percentage, net income of investees, investment income or loss,
carrying amount of the investment at the end of the year, repatriations of investment
income, and limit on the amount of investment in the mainland China area (Table 7)
2) Any of the following significant transactions with investee companies in mainland China,
either directly or indirectly through a third party, and their prices, payment terms, and
unrealized gains or losses (Table 7):
a) The amount and percentage of purchases and the balance and percentage of the related
payables at the end of the year
b) The amount and percentage of sales and the balance and percentage of the related
receivables at the end of the year
c) The amount of property transactions and the amount of the resultant gains or losses
d) The balance of negotiable instrument endorsements or guarantees or pledges of
collateral at the end of the year and the purposes
e) The highest balance, the ending balance, the interest rate range, and total current
period interest with respect to the financing of funds
f) Other transactions that have a material effect on the profit or loss for the year or on the
financial position, such as the rendering or receipt of services
c. Information of shareholders: List all shareholders with ownership of 5% or quarter showing
the name of the shareholder, the number of shares owned, and percentage of ownership of
each shareholder (Table 8).
33. SEGMENT INFORMATION
The Company has provided the financial information of the operating segments in the
consolidated financial statements. These parent company only financial statements do not provide
such information.
370
WALSIN LIHWA CORPORATION
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2020
(In thousands of New Taiwan Dollars and U.S. Dollars)
No.
Lender
Borrower
Financial
Statement
Account
Related
Party
Highest Balance
for the Period
Ending Balance
Actual Amount
Borrowed
Interest
Rate (%)
Nature of
Financing
Business
Transaction
Amount
Reasons for
Short-term
Financing
Allowance
for
Impairment
Loss
Collateral
Item
Value
Financing Limit
for Each
Borrower
(Note 1)
Aggregate
Financing Limit
(Note 1)
0 Walsin Lihwa
Corporation
PT. Walsin Nickel
Other receivables
Yes
Industrial
Indonesia
$
(US$
16,809,300
570,000)
$
(US$
16,233,600
570,000)
$
(US$
5,340,000
187,500)
3.50
Operating capital
$
- Operating capital
$
-
-
$
and purchase
equipment
-
$
33,787,294
(US$ 1,186,352)
$
33,787,294
(US$ 1,186,352)
Notes:
1. The limit on the amount of financing provided to a single enterprise that holds less than 100% of a subsidiary whose equity is less than 100% owned, directly or indirectly by its parent company cannot exceed 40% of the parent company’s equity as presented in
TABLE 1
the financial statements of a subsidiary.
a. The limit on the amount of financing provided to a single enterprise was as follows:
PT. Walsin Nickel Industrial Indonesia = $84,468,235× 40% ＝ $33,987,294 (US$1186,352)
b. The limit on the amount of financing provided was as follows:
The limit on the amount of financing provided = $84,468,235× 40% ＝ $33,987,294 (US$1186,352)
2. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars.
3. The amounts were translated using the exchange rate as of December 31, 2020: US$ to NT$ = 1:28.48.
3
7
1
3
7
2
WALSIN LIHWA CORPORATION
MARKETABLE SECURITIES HELD
DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars)
TABLE 2
Holding Company
Name
Marketable Securities Type and
Name of Issuer
Relationship of Issuer to the
Holding Company
Financial Statement Account
Shares/Units
December 31, 2020
Carrying
Amount
Percentage of
Ownership (%)
Fair Value
Note
Walsin Lihwa
Corporation
Share
HannStar Display Corp.
The holding company is a director of
the issuing company
HannStar Board Corp.
Teco Electric And Machinery Co.,
Ltd.
-
-
Kuang Tai Metal Industrial Co.,
The holding company is a director of
Ltd.
the issuing company
Taiwan Submarine Cable Corp.
The holding company is a director of
(One-Seven Trading Co., Ltd.)
the issuing company
Global Investment Holdings
The holding company is a director of
the issuing company
WK Technology Fund
Universal Venture Capital
Investment
-
-
Hwa Bao Botanic Conservation
The holding company is a supervisor
Corp.
of the issuing company
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
Financial assets at fair value through other
comprehensive income - non-current
299,632,180
$ 3,685,476
9.90
$ 3,685,476
63,753,952
2,763,734
12.06
2,763,734
954,000
26,378
9,631,802
210,382
30,000
184
5,221,228
50,078
380,477
5,949
1,400,000
11,128
0.05
9.39
6.67
2.97
1.91
1.16
3,000,000
29,920
15.00
26,378
210,382
184
50,078
5,949
11,128
29,920
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
TABLE 3
WALSIN LIHWA CORPORATION
MARKETABLE SECURITIES ACQUIRED OR 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
(In Thousands of New Taiwan Dollars)
Company
Name
Type and Name of
Marketable
Securities
Financial
Statement Account
Purpose of
Transaction
Nature of
Relationship
Beginning Balance
Acquisition
Disposal
Ending Balance
Number of
Shares/Units
Amount
Number of
Shares/Units
Amount
Number of
Shares/Units
Amount
Carrying
Amount
Gain
(Loss) on
Disposal
Number of
Shares/Units
Amount
Walsin Lihwa Share
Corporation Holdings Industries
Limited
PT. Walsin Nickel
Industrial
Indonesia
Concord Industries
Limited
Corporate bonds
Golden Harbour
Investments
Capital investment
Subsidiary
320,230,393 $ 20,054,589
163,000,000
accounted for
using the equity
method
Investments
accounted for
using the equity
method
Investments
accounted for
using the equity
method
Capital investment
Subsidiary
-
-
500,000
Capital
Subsidiary
505,903,187 11,007,234
20,000,000
investment/capital
reduction
Financial assets at
Golden Harbour
-
N/A
-
N/A
International Pte.
Ltd.
fair value through
profit or loss
International Pte.
Ltd.
$ 6,081,203
(Note 1)
-
$
-
$
-
$
- 483,230,393 $ 26,135,792
1,306,341
(Note 1)
-
569,400
(Note 1)
240,000,000
5,683,859
(Note 1)
-
-
-
-
-
-
500,000
1,306,341
6,945,453
(Note 1)
- 285,903,187
4,631,181
-
-
N/A
5,683,859
Note 1: The amount included subscription for shares, capital reduction and investment income or loss and the share of the change in capital surplus from investments in associates accounted for using the equity method.
Note 2: The amount included evaluation of income or loss.
3
7
3
3
7
4
WALSIN LIHWA CORPORATION
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
(In Thousands of New Taiwan Dollars)
Company Name
Related Party
Nature of Relationship
Transaction Details
Abnormal Transaction
Notes/Accounts Payable
or Receivable
Purchase/
Sale
Amount
% to
Total
Payment Terms
Unit Price
Payment
Terms
Ending
Balance
% to
Total
Note
TABLE 4
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
Dongguan Walsin Wire &
100% indirectly owned
Sales
$ (2,482,034)
(4) The payment terms are set by
Similar
Similar
$
207,701
8
Walsin Lihwa
Corporation
Cable Co., Ltd.
subsidiary
Koung Tai Metal Industrial
Director of the related
Sales
(903,376)
Co., Ltd.
party
Jianyin Walsin Specialty
Alloy Materials Co.,
Ltd.
100% indirectly owned
Sales
(200,926)
-
subsidiary
quotations on the local market, and
the transaction terms are similar to
those of general customers.
(1) The payment terms are set by
quotations on the local market, and
the transaction terms are similar to
those of general customers.
The payment terms are set by
quotations on the local market, and
the transaction terms are similar to
those of general customers.
Similar
Similar
39,054
1
Similar
Similar
99,820
4
WALSIN LIHWA CORPORATION
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars)
Company Name
Related Party
Nature of Relationship
Financial Statement Account
and Ending Balance
Turnover
Rate
Amount
Walsin Lihwa Corporation Dongguan Walsin Wire & Cable Co.,
Ltd.
100% indirectly owned subsidiary Trade receivables $
207,701
4.27
$
PT. Walsin Nickel Industrial Indonesia
50% directly owned subsidiary
Other receivables
5,349,885
-
Action
Taken
-
-
-
-
Overdue
TABLE 5
Amounts
Received in
Subsequent
Period
Allowance for
Bad Debts
$ 174,724
$
-
-
-
3
7
5
3
7
6
WALSIN LIHWA CORPORATION
NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE
FOR THE YEAR ENDED DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars)
1.
Information of investees that Walsin Lihwa Corporation has controlling power or significant influence was as follows (in thousands of New Taiwan dollars):
TABLE 6
Investor
Company
Walsin Lihwa
Corporation
Investee Company
Location
Original Investment Amount
Balance as of December 31, 2020
Main Businesses and
Products
December 31,
2020
December 31,
2019
Number of
Shares
Percentage of
Ownership
(%)
Carrying Amount
Net Income
(Loss) of the
Investee
Investment
Gain (Loss)
Note
Walsin Lihwa Holdings
Vistra Corporate Services Centre Wickhams Cay II,
Investments
$ 14,760,298
$ 9,861,333
483,230,393
100.00
$
26,135,792
$ 958,095 $ 963,213
Limited
Road Town, Tortola, VG1110 British Virgin Islands
Concord Industries
Vistra Corporate Services Centre Wickhams Cay II,
Investments
12,724,589
19,281,719
285,903,187
100.00
4,631,181
365,570
365,570
Limited
Touch Micro-System
Technology Corp.
Road Town, Tortola, VG1110 British Virgin Islands
566 Gaoshin Road, Yangmei Township, Taoyuan 326
Taiwan, R.O.C.
Ace Result Global Limited Vistra Corporate Services Centre Wickhams Cay II,
Road Town, Tortola, VG1110 British Virgin Islands
OEM on MEMS foundry
-
750,000
-
-
-
(50 )
(50 ) (Note 1)
services
Investments
1,587,416
1,587,416
44,739,988
100.00
339,349
29,383
29,383
Energy Pilot Limited
Vistra Corporate Services Centre Wickhams Cay II,
Investments
Market Pilot Limited
Vistra Corporate Services Centre Wickhams Cay II,
Investments
Road Town, Tortola, VG1110 British Virgin Islands
Road Town, Tortola, VG1110 British Virgin Islands
-
-
562,829
3,799,884
-
-
-
-
-
-
9,331
9,331
(Note 2)
(1,004 )
(1,004 ) (Note 3)
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
25F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Solar power systems
180,368
180,368
26,565,000
100.00
334,644
38,121
38,121
Min Maw Precision
Industry Corp.
Taiwan, R.O.C.
Waltuo Green Resources
No. 47, Bade Rd., Yanshui District, Tainan City
Corporation
73743, Taiwan, R.O.C.
Jin-Cherng Construction
5th Floor, 192 Jingye 1st Road, Jhongshan District,
Co.
Taipei 104, Taiwan, R.O.C.
Walsin Info-Electric Corp. 25F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Taiwan, R.O.C.
PT. Walsin Lippo
Industries
PT. Walsin Lippo Kabel
JI. MH. Thamrin Block A1-1, Delta Silicon Industrial
Park, Lippo Cikarang, Bekasi 17550, Indonesia
JI. Jati 3 Blok J7/5, Newton Techno Park, Serang,
Cikarang Selatan, Bekasi, Jawa Barat
Joint Success Enterprises
Vistra Corporate Services Centre Wickhams Cay II,
Limited
Road Town, Tortola, VG1110 British Virgin Islands
management, design, and
installation
Waste disposal, resource
recovery and cement
products
Construction
Mechanical and electrical,
communications, and power
systems
Steel wires
10,000
10,000
1,000,000
100.00
8,837
(732 )
(732 )
611,688
611,688
515,699,455
99.22
6,452,096
720,099
714,449
270,034
66,406
29,854,246
99.51
340,934
3,385
3,373
481,663
481,663
10,500
70.00
783,754
23,311
16,317
Production and sale of cables
11,656
11,656
1,050,000
70.00
8,916
12,617
8,832
and wires
Investments
1,164,273
1,164,273
36,058,184
49.05
5,319,464
1,398,647
647,736
Chin-Xin Investment Co.,
26F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Investments
2,237,969
2,237,969
179,468,270
37.00
6,002,698
196,303
62,125
Ltd.
Taiwan, R.O.C.
Walsin Color Co., Ltd.
1F., No.5, Ln.199, Liaoning St., Zhong Shan Dist.,
Management of investments
457,610
457,610
49,831,505
33.97
1,132,611
54,447
18,496
Concord II Venture
Capital Co., Ltd.
Winbond Electronics
Corp.
Taipei City, Taiwan, R.O.C.
and conglomerates
4F., No. 76, Sec. 2, Dunhua S. Rd., Da’an Dist.,
Venture capital and consulting
257,860
257,860
26,670,699
26.67
185,428
(39,579 )
(10,556 )
Taipei City 106, Taiwan (R.O.C.)
No. 8, Keya 1st Rd., Daya Township, Taichung
County 428, Taiwan, R.O.C.
affairs
Research, development,
production and sale of
semiconductors and related
components
7,429,920
7,429,920
883,848,423
22.21
14,595,661
1,359,787
302,009
Walton Advanced
Engineering, Inc.
No. 18, Yugang N. 1st Rd., Qianzhen Dist.,
Kaohsiung City 806, Taiwan, R.O.C.
Production, sale, and testing of
1,185,854
1,185,854
109,628,376
21.65
2,601,028
254,887
57,735
semiconductors
(Continued)
Investor
Company
Investee Company
Location
Main Businesses and
Products
December 31,
2020
December 31,
2019
Number of
Shares
Percentage
of
Ownership
(%)
Carrying Amount
Net Income
(Loss) of the
Investee
Investment
Gain (Loss)
Note
Original Investment Amount
Balance as of December 31, 2020
Walsin Technology Corp. 24F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Taiwan, R.O.C.
Production and sale of
ceramic capacitors
$ 1,649,039
$ 1,649,039
88,902,325
18.30
$
7,068,731
$ 6,638,742 $ 1,216,721
Powertec Electrochemical
13 F, No. 337, Fuxing N. Rd., Songshan Dist.,
Basic industrial chemical
2,945,925
2,945,925
318,522,792
22.46
-
-
-
Corp.’s
Taipei City 105, Taiwan, R.O.C.
PT. Walsin Nickel
Industrial Indonesia
Gedung Wisma Mulia LT. 41 JL Jend Gatot Subroto
No. 42 Kuningan Barat Mmpang Prapatan Kota
ADM. Jakarta Selatan Dki Jakarta
manufacturing and energy
technical services
Manufacture and sale of
nickel pig iron
Note 1: The liquidation of Touch Micro-system Technology Corp. was completed on June 5, 2020.
Note 2: The liquidation of Energy Pilot Limited. was completed on September 3, 2020.
Note 3: The liquidation of Market Pilot Limited was completed on December 9, 2020.
1,509,171
-
500,000
50.00
1,306,341
(38,694 )
(134,405 )
(Concluded)
3
7
7
3
7
8
WALSIN LIHWA CORPORATION
INFORMATION ON INVESTMENTS IN MAINLAND CHINA
FOR THE YEAR ENDED DECEMBER 31, 2020
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)
Walsin Lihwa Corporation
TABLE 7
A. The names of investee companies in mainland China and their main businesses and products, total amount of paid-in capital, investment type, investment flows, percentage of ownership in investments, investment gain or loss, carrying amount, accumulated
inward remittance of earnings and upper limit on investments in mainland China are as follows:
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
Investee Company
Main Businesses and Products
Total Amount of
Paid-in Capital
Investment
Type
(Note 1)
Jiangyin Walsin Steel Cable
Manufacture and sale of steel
Co., Ltd.
cables and wires
$
(US$
599,600
20,000 )
Shanghai Walsin Lihwa
Manufacture and sale of cables
Power Wire & Cable Co.,
Ltd.
and wires
(US$
445,057
15,627 )
Hangzhou Walsin Power
Cable & Wire Co., Ltd.
Manufacture and sale of cables
and wires
4,616,038
(US$ 162,080 )
Walsin (China) Investment
Investments
Co., Ltd.
2,238,528
78,600 )
(US$
Changshu Walsin Specialty
Steel Co., Ltd.
Manufacture and sale of
specialized steel tubes
2,762,560
97,000 )
(US$
Shanghai Baihe Walsin
Lihwa Specialty Steel
Co., Ltd.
Manufacture and sale of stainless
steel
(US$
484,160
17,000 )
(Note 7)
Dongguan Walsin Wire &
Cable Co., Ltd.
Manufacture and sale of bare
copper cables and wires
(US$
740,480
26,000 )
Jiangyin Walsin Specialty
Manufacture and sale of
Alloy Materials Co., Ltd.
cold-rolled stainless steel and
flat-rolled products
1,395,520
49,000 )
(US$
XiAn Walsin Metal Product
Manufacture and sale of
Co., Ltd. (Note 13)
specialized stainless steel
plates
1,576,368
55,350 )
(US$
Yantai Walsin Stainless
Steel Co., Ltd.
Production and sale of electronic
components and new alloy
materials
7,833,851
(US$ 275,065 )
(Note 11)
b
b
b
b
b
b
b
b
b
b
$
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2020
$
(US$
(US$
(US$
(US$
(US$
(US$
(US$
(US$
780,709
26,041)
(Note 2)
425,947
14,956)
(Note 3)
2,592,591
91,032)
(Note 4)
2,238,528
78,600)
(Note 5)
2,762,560
97,000)
(Note 6)
1,110,720
39,000)
(Note 8)
740,480
26,000)
(Note 9)
1,395,520
49,000)
(Note 10)
(US$
289,072
10,150)
569,600
(US$ 20,000 )
(US$
3,785,761
132,927)
-
-
Investment Flows
Outflow
Inflow
Accumulated
Outflow of
Investment from
Taiwan as of
December 31, 2020
Net Income
(Loss) of the
Investee
Percentage of
Ownership in
Investment
(%)
Investment
Gain (Loss)
(Note 20)
Carrying
Amount
as of
December 31,
2020
Accumulated
Inward Remittance
of Earnings as of
December 31, 2020
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
(US$
(US$
(US$
US$
(US$
(US$
(US$
(US$
741,648
26,041)
(Note 2)
425,947
14,956)
(Note 3)
2,592,591
91,032)
(Note 4)
2,238,528
78,600
(Note 5)
2,762,560
97,000)
(Note 6)
1,110,720
39,000)
(Note 8)
740,480
26,000)
(Note 9)
1,395,520
49,000)
(Note 10)
(US$
858,672
30,150)
(US$
3,785,761
132,927)
$
78,641
100.00
$ 78,641 $ 791,974 $
81,268
95.71
77,779 1,039,962
120,666
38.93
46,975
535,121
295,662
100.00
295,662 4,184,463
202,980
100.00
202,980
664,403
(7,998 )
100.00
(7,998 )
221,053
88,040
100.00
88,040 1,652,987
124,794
100.00
124,794 1,676,841
(10,711 )
100.00
(10,711 )
(756,737 )
23,076
100.00
23,076 3,305,803
-
-
-
-
-
-
-
-
-
-
(Continued)
Investee Company
Main Businesses and Products
Total Amount of
Paid-in Capital
Investment
Type
(Note 1)
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2020
Investment Flows
Outflow
Inflow
Accumulated
Outflow of
Investment from
Taiwan as of
December 31, 2020
Net Income
(Loss) of the
Investee
Percentage of
Ownership in
Investment
(%)
Investment
Gain (Loss)
(Note 20)
Carrying
Amount
as of
December 31,
2020
Accumulated
Inward
Remittance of
Earnings as of
December 31,
2020
Walsin Lihwa (Changzhou)
Investment Co., Ltd.
(Note 16)
Commerce and investments
$
(US$
-
-)
Changzhou China Steel
Melting and forging of nonferrous
Precision Materials Co.,
Ltd.
metallic materials and composites
as well as new types of alloys
$
(US$
1,241,728
43,600)
XiAn Walsin United
Electronic devices and modules
Technology Co., Ltd.
(Note 17)
(US$
-
-)
Nanjing Taiwan Trade Mart
Management Co., Ltd.
Business and asset management,
consulting and advertising services
(US$
28,480
1,000)
XiAn Lvjing Technology
Solar module assembly
Co., Ltd.
Shaanxi Tianhong Silicon
Industrial Corporation
Polysilicon production
Jiangsu Taiwan Trade Mart
Development Co., Ltd.
Development and management of
Nanjing Taiwan Trade Mart
Management Co., Ltd.
(US$
-
-)
5,237,808
(RMB1,200,000)
43,648
(RMB 10,000)
Shaanxi Electronic Group
Communications equipment and
Optoelectronics Technology
Co., Ltd. (Note 14)
electronic components
679,156
(RMB 155,597)
Walsin (Nanjing) Construction
Construction, rental and sale of
Co., Ltd.
buildings and industrial factories
1,424,000
50,000)
(US$
Nanjing Walsin Property
Management Co., Ltd.
Property management, business
management and leasing of houses
(RMB
Walsin Nanjing Culture and
Organize culture and arts
Arts Co., Ltd.
communication activity, cultural
performance, culture and arts
forwarding agency
(RMB
4,365
1,000)
6,547
1,500)
Walsin Nanjing Commercial
Management Co., Ltd.
(Note 18)
Business management, food
marketing, catering services and
sale of groceries
(RMB
-
-)
b
b
b
b
c
b
b
b
b
b
b
b
$
(US$
1,395,520
49,000)
$
(US$
372,518
13,080)
(US$
2,846,804
99,958)
(US$
(US$
(US$
(US$
28,480
1,000)
569,600
20,000)
-
-)
8,658
304)
(RMB
-
-)
(US$
1,418,304
49,800)
(Note 15)
(RMB
(RMB
(RMB
-
-)
-
-)
-
-)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$ 1,395,520
(US$ 49,000 )
$
(US$
-
-)
$ 16,373
-
$
16,373 $
-
$
-
-
-
(US$
372,518
13,080)
1,522
30.00
459
379,846
869,210
(US$ 30,520 )
2,846,804
(US$ 99,958 )
(US$
-
-)
(681 )
-
(681 )
-
-
-
569,600
(US$ 20,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(US$
(US$
(US$
28,480
1,000)
-
-)
-
-)
(US$
8,658
304)
(RMB
-
-)
(US$
1,418,304
49,800)
(Note 15)
(RMB
(RMB
(RMB
-
-)
-
-)
-
-)
(52,663 )
100.00
(52,663 )
(433,097)
-
-
-
-
(2,768,581 )
19.00
-
-
(Note 12)
257
20.00
124
9,280
19,455
6.02
-
95,101
1,398,820
99.60
1,393,263 9,893,857
(1,400 )
99.60
(1,393 )
851
(4,685 )
99.60
(4,668 )
(8,673)
(5,298 )
99.60
(5,276 )
-
-
-
-
-
-
-
-
-
-
-
B. The upper limit on investments of the Company in mainland China is as follows:
Accumulated Investment in Mainland China as of
December 31, 2020
(In Thousands)
Investment Amounts Authorized by the
Investment Commission, MOEA
(In Thousands)
NT$16,241,859
(US$ 570,290)
NT$18,412,647
646,511)
(US$
Upper Limit on Investment
(In Thousands)
N/A (Note 22)
3
7
9
(Continued)
i
F
n
a
n
c
a
i
l
I
n
f
o
r
m
a
t
i
o
n
3
8
0
Notes
1. Investments can be classified into three categories as follows:
a. Direct investments in mainland China.
b. Reinvestments in mainland China through companies located in a third country.
c. Others.
2. Inclusive of US$7,563 thousand in investments made through Walsin (China) Investment Co., Ltd.
3. Inclusive of US$7,929 thousand in investments made through Walsin (China) Investment Co., Ltd.
4. Inclusive of US$2,800 thousand in investments made through Walsin (China) Investment Co., Ltd., and US$22,730 thousand in dividends appropriated from Dongguan Walsin Wire & Cable Co., Ltd., Jiangying Walsin Steel Cable Co., Ltd., Shanghai
Walsin Lihwa Power Wire & Cable Co., Ltd. and Hangzhou Walsin Power Cable & Wire Co., Ltd.
5. Inclusive of the capital investment of US$28,600 thousand which was contributed from the accounts payable of Walsin (China) Investment Co., Ltd. to Walsin Lihwa Holdings Limited.
6. Inclusive of US$8,000 thousand in investments made through Walsin Specialty Steel Corp. and US$42,000 thousand worth of dividends appropriated from Changshu Walsin Specialty Steel Co., Ltd. and Shanghai Baihe Walsin Lihwa Specialty Steel Co.,
Ltd.
7. Inclusive of capital reduction for cover accumulated deficits US$22,000.
8. Inclusive of US$4,800 thousand in investments made through Walsin (China) Investment Co., Ltd.
9. Investment made through Walsin (China) Investment Co., Ltd.
10. Inclusive of investments made through Walsin (China) Investment Co., Ltd. of US$4,500 thousand and private capital investment in the amount of US$4,500 thousand of Walsin (China) Investment Co., Ltd.
11. Inclusive of private capital investments of RMB578,796 thousand from Shanghai Baihe Walsin Lihwa Specialty Steel Co., Ltd., Changzhou Wujin NSL Co., Ltd. and Changshu Walsin Specialty Steel Co., Ltd., and RMB3,750 thousand in investments made
through Changzhou Wujin NSL Co., Ltd. Also inclusive of US$32,927 thousand in investments from the merger of Yantai Huanghai Iron and Steel Co., Ltd. and Yantai Dazhong Recycling Resource Co., Ltd.
12. The private capital amount of RMB228,000 thousand of XiAn Lv Jing Technology Co., Ltd., adjusted by its fair value.
13. XiAn Walsin Metal Product Co., Ltd. merged XiAn LV Jing Technology Co., Ltd. and XiAn Walsin Opto-electronic Limited.
14. Shaanxi Electronic Group Optoelectronics Technology Co., Ltd. was formerly known as Shaanxi Optoelectronics Technology Co., Ltd.
15. The amount includes investments through subsidiary Joint Success Enterprises Limited which were approved in the previous years.
16. The liquidation of Walsin Lihwa (Changzhou) Investment Co., Ltd. were completed on October 19, 2020.
17. The liquidation of Xian walsin United technology Co., Ltd. were completed on December 7, 2020.
18. The liquidation of Walsin Nanjing Commercial Management Co., Ltd. were completed on December 7, 2020.
19. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of Renminbi or U.S. dollars.
20. The currency exchange rates as of December 31, 2020 are as follows: US$ to NT$ = 1:28.48, RMB to NT$ = 1:4.36484. The average exchange rates as of December 31, 2020 are as follows: US$ to NT$ = 1:29.549, RMB to NT$ = 1:4.28608.
21. Amount was recognized based on the reviewed financial statements.
22. Upper limit on investments:
The Company was approved as the operational headquarter by the Industrial Development Bureau, Ministry of Economic Affairs and is thus exempted from the related regulations of the “Regulations Governing the Approval of Investment or Technical
Cooperation in Mainland China”.
(Continued)
C. Significant direct or indirect transactions between the Company and investees in mainland China
Related Party
Nature of Relationship
Transaction
Type
Amount
% to Total
Unit Price
Payment Terms
Compare to
General
Transactions
Ending Balance
% to Total
Unrealized Loss
Transaction terms
Notes/Accounts Payable or Receivable
(In Thousands of New Taiwan Dollars)
Dongguan Walsin Wire
& Cable Co., Ltd.
100% indirectly owned
Sales
$ (2,482,034)
(4)
subsidiary
Jiangyin Walsin
100% indirectly owned
Sales
(200,926)
Specialty Alloy
Materials Co., Ltd.
subsidiary
Changshu Walsin
100% indirectly owned
Sales
(47,457)
Specialty Steel Co.,
Ltd.
subsidiary
Shanghai Walsin Lihwa
Power Wire & Cable
Co., Ltd.
100% indirectly owned
Sales
(1,733)
subsidiary
Yantai Walsin Stainless
100% indirectly owned
Sales
(18,654)
Steel Co., Ltd.
subsidiary
-
-
-
-
The price and payment terms are
set by quotations on the local
market, and the transaction
terms are similar to those of
general customers.
The price and payment terms are
set by quotations on the local
market, and the transaction
terms are similar to those of
general customers.
The price and payment terms are
set by quotations on the local
market, and the transaction
terms are similar to those of
general customers.
The price and payment terms are
set by quotations on the local
market, and the transaction
terms are similar to those of
general customers.
The price and payment terms are
set by quotations on the local
market, and the transaction
terms are similar to those of
general customers.
The price and payment terms are
set by quotations on the local
market, and the transaction
terms are similar to those of
general customers.
The price and payment terms are
set by quotations on the local
market, and the transaction
terms are similar to those of
general customers.
The price and payment terms are
set by quotations on the local
market, and the transaction
terms are similar to those of
general customers.
The price and payment terms are
set by quotations on the local
market, and the transaction
terms are similar to those of
general customers.
The price and payment terms are
set by quotations on the local
market, and the transaction
terms are similar to those of
general customers.
Similar
$
207,701
Similar
99,820
Similar
7,732
Similar
Similar
-
-
8
4
-
-
-
$
-
(1,800)
(1,331)
-
-
(Concluded)
3
8
1
Financial Information
TABLE 8
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
INFORMATION OF MAJOR SHAREHOLDERS
DECEMBER 31, 2020
Name of Major Shareholder
Shares
Number of
Shares
Percentage of
Ownership (%)
LGT Bank (Singapore) Investment Fund under the custody of
247,025,000
Standard Chartered
Winbond Electronics Corp.
Chin-Xin Investment Co., Ltd.
222,000,000
220,011,000
7.65
6.88
6.81
Note 1: The information of major shareholders presented in this table is provided by the Taiwan
Depository & Clearing Corporation 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 the last business day
for the current quarter. The share capital in the financial statements may differ from the
actual number of shares that have been issued without physical registration because of
different preparation basis.
Note 2: If a shareholder delivers their shareholdings to the trust, the above information will be
disclosed by the individual trustee who opened the trust account. For shareholders who
declare insider shareholdings with ownership greater than 10% in accordance with Security
and Exchange Act, the shareholdings include shares held by shareholders and those delivered
to the trust over which shareholders have rights to determine the use of trust property. For
information relating to insider shareholding declaration, please refer to Market Observation
Post System.
6. Any financial crunch confronted by the Company or its subsidiaries and related
impacts in the most recent year and up to the date of annual report publication:
None.
382
VII Review of Financial Conditions, Financial Performance,
and Risk Management
1.
Financial Status - Consolidated (Based on IFRSs)
Year
Items
Current Assets
Property, Plant and
Equipment
Intangible Assets
Other Assets
Total Assets
Current Liabilities
Non-current Liabilities
Total Liabilities
Capital Stock
Capital Surplus
Retained Earnings
2019
2020
Unit: NT$ Thousands
Difference
Amount
％
60,789,794
56,176,808
(4,612,986)
27,845,109
34,294,221
6,449,112
168,134
175,000
6,866
49,263,365
60,917,997
11,654,612
138,066,402
151,564,006
13,497,604
(7.59)
23.16
4.08
23.66
9.78
40,743,553
18,756,735
59,500,288
33,260,002
16,055,238
31,179,511
31,458,157
32,825,019
64,283,176
33,260,002
15,690,406
36,330,187
(9,285,396)
(22.79)
14,068,284
4,782,888
(1,000,000)
(364,832)
5,150,676
75.00
8.04
(3.01)
(2.27)
16.52
Note: The reasons, effects and future plans about that changes in assets, liabilities and equity which over 20% or
NT$10 million in last two years:
1. Reasons:
A.The increase of property, plant and equipment in 2020 compared to 2019 was due to WLC built new
factories and purchased machine equipment in 2020.
B. The increase of other assets in 2020 compared to 2019 was due to WLC purchased corporate bonds in
2020.
C. The decrease of current liabilities and the increase of non-current liabilities in 2020 compared to 2019 was
due to short-term borrowings decreasing and long-term borrowings increasing in 2020.
2. Effects: None.
3. Future plans: Keep working on managing working capital and asset and liability structure.
383
Review of Financial Conditions, Financial
Performance, and Risk Management
2.
Financial Performance - Consolidated (Based on IFRSs)
Items
Year
2019
2020
Unit: NT$ Thousands
Difference
Amount
％
Operating Revenue
134,804,405
112,546,603
(22,257,802)
Operating Costs
Gross Profit
Operating Expense
Profit from Operations
Non-operating Revenue
and Expense
Profit before Taxes
Tax Expense
Net Income
125,413,839
100,078,265
(25,335,574)
9,390,566
5,331,092
4,059,474
680,793
4,740,267
956,943
3,783,324
12,468,338
3,077,772
5,083,276
7,385,062
1,865,603
9,250,665
2,244,864
7,005,801
(247,816)
3,325,588
1,184,810
4,510,398
1,287,921
3,222,477
(16.51)
(20.20)
32.78
(4.65)
81.92
174.03
95.15
134.59
85.18
I.
The variance analysis in last two years:(Variable proportion over 20%)
1. In 2020, operating cost decreased due to the disposal of the equity interest of Nanjing Walsin Metal Co., Ltd.,
and the COVID-19 in the manufacturing department decreased by NT$26.4 billion; however, the costs on
phase III of Walsin Centro was recognized in the real estate department which increased by NT$1.5 billion.
2. Gross profit increased in 2020 compared to 2019 was due to the revenue on phase III of Walsin Centro was
recognized in the real estate department in 2020. However, gross profit was maintained constant in the
manufacturing department in 2019 and 2020.
3. In 2020, non-operating revenue and expenses increased compared to 2019 due to the increase of investment
income recognized under the equity method.
4. Tax expense increased in 2020 compared to 2019 due to the revenue on phase III of Walsin Centro was
recognized in the real estate department in 2020.
II.
III.
The reason for the changes in business content changes: None.
The expected sales volume in the next year and its main reason:
1. Expected sales volume in the next year:
2021(Unit：ton)
Bare copper wire
Power line
Strand
Stainless steel
Hot rods
Seamless steel pipe
210,730
44,882
101,329
500,688
300,000
15,000
2. The basis of the expected sales volume and Possible future impact on the Company's financial operations
and response plans: see the contents (5)-Business Overview
384
3. Cash Flow - Consolidated (Based on IFRSs)
(1) Cash flow analysis for the current year:
Cash and Cash
Equivalents at
the beginning
of the year
Net Cash flow
from Operating
Activities
Net Cash flow from
Net Cash flow from
Investing Activities
Financing Activities
Unit: NT$ Thousands
Effects of
Exchange Rate
Changes
Cash and Cash
Equivalents at
the ending of
the year
Note
11,753,006
7,147,930
(12,665,921)
5,610,868
98,525 11,944,408
Analysis of change in cash flow in the current year:
1.The inflows of net cash generated by operating activities were NT$ 7,147,930 thousand due to the profit
before taxes.
2.The outflows of net cash used in investing activities were NT$12,665,921 thousand due to the purchase of
corporate bonds and property, plant, and equipment.
3.The inflows of net cash generated by financing activities were NT$5,610,868 thousand due to the increase of
borrowings.
4.The intflows of net cash in the year was NT$ 191,402 thousand and the ending balance of cash was NT$
11,944,408 thousand.
(2) Remedy for cash Deficit and Liquidity Analysis: Not applicable.
(3) Cash flow Analysis for the coming year:
Cash and Cash
Equivalents at
the beginning of
the year
Net Cash flow
from Operating
Activities
Net Cash flow from
Net Cash flow from
Investing Activities
Financing Activities
Unit: NT$ Thousands
Effects of
Exchange Rate
Changes
Cash and Cash
Equivalents at
the ending of
the year
Note
11,944,408
8,437,310
(19,469,948)
4,993,654
0
5,905,424
Analysis of change in cash flow for the coming year:
1.The inflows of net cash generated by operating activities due to the increase of profit before taxes.
2.The outflows of net cash used in investing activities due to the strategic project investment, the
increase of capital expenditures, renewal of equipment, and the building cost of phases A and B
under Nanjing Construction Co., Ltd.
3.The intflows of net cash used in financing activities due to new borrowings.
385
Review of Financial Conditions, Financial
Performance, and Risk Management
4.
Effect of Major Capital Expenditure on Financial Business Operations:
(1) Utilization of Major Capital Expenditures and Sources of Funds:
Source
of
Funds
Actual or
Estimated
Completion
Date
Working
December
Capital
2021
Actual or Expected Status of Spending
Unit: NT$ Million
Investment
2018
2019
2020
2021
2022
7,995
53
594
4,147
3,041
160
Working
December
Capital
2021
10,380
Working
August
Capital
2021
4,260
-
-
6,851
2,481
1,048
-
27
1,991
1,922
320
Project
The
establishment of
Yantai Plant
The
establishment of
nickel pig iron
plant
The
establishment of
high-efficiency
factories
(2) Estimated Benefits:
1. The establishment of Yantai Plant will help expand economies of scale and improve product quality
to meet the quality requirements of the customers.
2. Invest in the construction of a nickel pig iron plant and supporting power plants in Indonesia, with
a planned monthly output of 3,000 tons of nickel metal, which will enable the company to securely
control the supply of upstream raw materials and make profits for the company.
3. Build high-efficiency factories, deepen the integration of manufacturing service value and integrate
manufacturing systems through smart manufacturing, advanced warehousing and logistics, and
create competitiveness that is difficult to imitate.
5.
Investment Policy of the Past Year, Profit/Loss Analysis, Improvement Plan and
Investment Plan for the Coming Year:
(1) Investment Policy and Profit/Loss in the Past Year:
1. On a consolidated basis, the Company’s current key reinvestment areas are DRAM, TFT LCD and
passive components.
2. On a consolidated basis, in 2020, the gains for affiliated enterprises recognized by equity method
was NT$1.696 billion, as a result of the overall recovering market conditions in the industry and the
improvement in the profitability of affiliated enterprises recognized under the equity method
compared to 2019.
(2) Main Reasons for Profit:
Recognition of the gains from Winbond Electronics Corporation and Walsin Technology Corporation.
(3) Investment Plan for the Coming Year:
To continue to focus on upstream and downstream consolidation of core businesses and carefully
assess investment plans.
386
6. Risk Management and Assessment of the Following Items for the Past Year and the
Year to Date:
(1) Impact of Interest Rate and Exchange Rate Changes and Inflation on the Company’s Profit and
Countermeasures.
Affected
item
Interest Rate
Change
Exchange
Rate Change
Inflation
Impact
Response measures:
Net interest expense (interest expense less
interest income) in 2020 was approximately
NT$278 million.
Foreign exchange gain for 2020 were
approximately NT$75 million (including
profit/loss from trading foreign exchange
derivative products).
The Company's principal products are not for
general public consumption therefore
inflation has no direct impact on the
Company.
Based on the planning for annual budgeted funding
requirement, we will allocate funding sources and
costs when appropriate.
Based on foreign currency positions, the Company
will utilize market instruments (e.g. forward foreign
exchange contracts) for hedging purposes.
None.
(2) Policies of Engaging in High-risk, High-leverage Investments, Lending to Others, Providing
Endorsements and Guarantees and Derivatives Transactions, Profit/loss Analysis and Future
Countermeasures.
Major causes of profit
or loss
None
Future response
measures
None
None
None
None
None
None
None
Item
Policy
High-risk, High-
Leverage Investments
Lending to Others
Endorsements/
Guarantees
Derivative Instrument
Transactions
The Company does not engage in any high-
risk, high-leverage investment activities.
Conducted in accordance with the provisions
of the Company's "Management Guidelines
on Lending Company Funds to Others"
Conducted in accordance with the provisions
of the Company's "Management Guidelines
on Endorsement/Guarantee"
With respect to derivative instruments, the
Company has mainly engaged in hedging
transactions related to business operations
and investment activities (foreign exchange
and non-ferrous metals). For non-ferrous
metals, the Company may carry out non-
hedging transactions based on authorized
positions and under risk management
control for the purpose of curbing price
volatilities in raw materials. The
authorization is conducted in accordance
with the Company's "Procedure for
Derivatives Products Trades."
(3) Future R&D Plans and Projected R&D Investments: The research and development plans of each
business group have been included in the business activities section of the Business Overview, and
these plans have relatively low risks. Please refer to “V. Business Overview—A. Business
Activities— (3) Overview of Technology and R&D”.
(4) Major Changes in Domestic and Foreign Government Policies and Laws and Impact on the
Company’s Finances and Business: None
387
Review of Financial Conditions, Financial
Performance, and Risk Management
(5)
Impact of Recent Technological and Market Changes on the Company's Finances and Business, and
Countermeasures:
To achieve the ultimate goal of Smart Manufacturing (Industry 4.0), Walsin has started to promote
the new MES (Manufacturing Execution System) and ERP (Enterprise Resource Planning) and move
towards CPS (Cyber-Physical System). Through cloud-based, component-based, and parametric
design to retain the flexibility and speed, we will ensure the ability to integrate with the supply
chains in the future.
Risks in global information security are increasing. The World Economic Forum has listed "data scams or
thefts", "cyberattacks" and "damage to information infrastructure" among the major risks around
the world for many consecutive years. In recent years, domestic industries have also experienced a
number of major information security events. In addition to causing financial and capacity losses,
such events have also impacted corporate reputation.
In response to the information security risks faced by Walsin's promotion of Industry 4.0, the
Company has established a dedicated organization - "Big Data and Information Security Division"
under the Information Center, which is responsible for planning, coordinating and implementing
information security measures, and regularly reports to the IT Steering Committee on information
security management-related matters. Over the past three years, we have continued to improve
our information security management mechanism, revised our information security policies and
standardized our communication and access practices, strengthened our endpoint, server,
application and network protection capabilities, and introduced external expertise (such as the
Industrial Development Bureau of the Ministry of Economic Affairs and the Information Security
Inspection Service provided by the Institute for Information Industry), with the goal of maintaining
the confidentiality, integrity and availability of our business information and other sensitive data.
Our future work will focus on protecting intellectual property rights and advanced production line
systems, as well as building a rapid response capability to information security incidents.
(6)
Impact of Change in Corporate Image on Risk Management and Countermeasures: None
(7) Expected Benefits and Potential Risks of Merger and Acquisition: None
(8) Expected Benefits and Potential Risks of Capacity Expansion: All capacity expansion for plants
under Walsin and its group members has to undergo careful assessments. All major capital
expenditure has to be submitted to the Board of Directors for review. Hence, investment benefits
and potential risks will have been taken into account.
(9) Risks Associated with Over-concentration in Purchases or Sales and Countermeasures: None
(10) Impact of Mass Transfer(s) of Equity by or Change of Directors or Shareholders Holding 10% or
more Interest on the Company, the Associated Risks and Countermeasures: None
(11) Impact of Change of Control on the Company, Associated risks and Countermeasures: None
(12) Final and Non-appealable and Pending Material Litigious, Non-litigious or Administrative Legal
Proceedings involving the Company, the Directors and the President during the Most Recent Year
and up to the Annual Report Publication Date: None
388
(13) Other significant risks and response measures:
1. The Company's KPIs:
(1) Financial indicators: Optimizing financial structure and control of bank financing agreements
Ratio
Formula
Target KPI
2020
2019
Current ratio Current assets / Current liabilities
>=100%
178.57%
149.20%
Debt ratio
Net liabilities (Total liabilities - Cash
and cash equivalents) / Tangible assets
<=120%
60.09%
60.90%
Interest
coverage ratio
Tangible net
value
(Net income before income tax,
depreciation, amortization and interest
>=150%
2,265.19%
1,335.70%
expense / Current interest expense
Shareholders' equity - Intangible assets >=NT$55 billion NT$87.1 billion NT$78.4 billion
(2) Performance indicators: Return on shareholder's equity and income before accrued interest, tax,
depreciation and amortization
Ratio
Formula
Return on Shareholder's
Equity
Earnings Before Interest,
Taxes, Depreciation and
Amortization
Net Income after tax /
Average of total
shareholders' equity
Income before interest
and tax＋depreciation
and amortization
2020
8.44%
2019
4.79%
NT$12,232
million
NT$7,475
million
7. Other Major Issues: None
389
Special Disclosures
VIII . Special Disclosures
1. Summary of Affiliates Companies
(1) Affiliates
1. Affiliated Organization Chart of Walsin Lihwa Corporation (as of 2020/12/31)
Walsin Lihwa Corporation
華新麗華股份有限公司
華新麗華控股有限公司
Walsin Lihwa Holdings Limited
(Please refer to the below chart for its re-invested companies)
(旗下轉投資公司見下圖)
華新特殊鋼控股有限公司
Concord Industries Limited
(Please refer to the below chart for its re-invested companies)
(旗下轉投資公司見下圖)
Ace Result Global Limited
Chin-Cherng Construction Co.
金澄建設股份有限公司
華新電通股份有限公司
Walsin Info-Electric Corp.
Min Maw Precision Industry Corp.
銘懋工業股份有限公司
Waltuo Green Resouces Corp.
華拓綠資源股份有限公司
P.T. Walsin Lippo Industries
華新力寶工業公司
P.T. Walsin Lippo Kabel
PT Walsin Nickel Industrial Indonesia
100%
100%
100%
99.22%
99.51%
100%
100%
70%
70%
50%
50.95%
49.05%
Joint Success Enterprises Limited
100%
Walsin (Nanjing)
華新(南京)置業開發有限公司
Development Limited
100%
Nanjing Walsin Preperty
南京華新物業管理有限公司
Management Co., Ltd
Walsin Nanjing Culture and Arts
好樣華采南京文化藝術有限公司
Co., Ltd.
100%
2. Affiliated Organization Chart of Walsin Lihwa Holdings Limited and Concord Industries Limited (as of
2020/12/31)
華新麗華股份有限公司
Walsin Lihwa Corporation
100%
華新麗華控股有限公司
Walsin Lihwa Holdings Limited
(Walsin Lihwa Holdings Limited)
100%
100%
73.66%
65%
100%
華新(中國)投資有限公司
Walsin (China) Investment Co., Ltd.
華新國際投資有限公司
Walsin International
Investment Limited
(Walsin International Investment Limited)
Borrego Solar Systems, Inc.
Walcom Chemicals Industrial Limited
Nanjing Taiwan Trade Mart
南京台灣名品城管理有限公司
Management Co., Ltd.
95.71%
100%
100%
Shanghai Walsin Lihwa Power
上海華新麗華電力電纜有限公司
Wire & Cable Co., Ltd.
東莞華新電線電纜有限公司
Dongguan Walsin Wire & Cable Co., Ltd.
江陰華新鋼纜有限公司
Jiangyin Walsin Steel Cable Co., Ltd.
18.37%
81.63%
Jiangyin Walsin Speciality Alloy
江陰華新特殊合金材料有限公司
Materials Co., Ltd.
(Such company is not incorporated in the consolidated financial statements
(因該公司總資產不及合併總資產之1%且無營業收入，
of the Company's affiliates because it has total assets of less than 1% of the
故不列入關係企業合併財務報表中)
total consolidated assets and does not generate any operating income)
100%
華新特殊鋼控股有限公司
Concord Industries Limited
(Concord Industries Limited)
42.29%
45.60%
57.71%
54.40%
煙台華新不銹鋼有限公司
Yantai Walsin Stainless Steel Co., Ltd.
100%
華新特殊鋼有限公司(WSS)
Walsin Speciality Steel Corp.
100%
Shanghai Baihe Walsin Lihwa Specialty Steel
上海白鶴華新麗華特殊鋼製品有限公司
Co., Ltd.
100%
常熟華新特殊鋼有限公司
Changshu Walsin Speciality Steel Co., Ltd.
100%
100%
華新精密科技股份有限公司(WPT)
Walsin Precision Technology Sdn. Bhd. (WPT).
⻄安華新金屬製品有限公司
XiAn Walsin Metal Product Co., Ltd.
390
(2) Background Information of the Affiliated Companies
Entity
Walsin Lihwa Holdings
Limited
Date of
Incorporation
1992/07/15
Walsin (China) Investment
Co., Ltd.
1995/11/02
Address
Capital
Main Operation or Business Items
Unit: NT$ thousands/Foreign Currency thousands
Services
Corporate
Vistra
Centre
Wickhams Cay II, Road Town, Tortola,
VG1110 British Virgin Islands
Rm. 2804, 28th Floor, Shanghai Mart
Tower, No. 2299, Yanan Road (West),
Shanghai, China
USD
483,230
Investment holding
USD
78,600
Investment holding
1995/03/21
No. 1128 Liuxiang Road, Nanxiang Town,
Jiading, Shanghai
USD
15,627 Cables and wires
Shanghai Walsin Lihwa
Power Wire & Cable Co.,
Ltd.
Dongguan Walsin Wire &
Cable Co., Ltd.
2000/01/26
Jiangyin Walsin Steel Cable
Co., Ltd.
1992/12/16
Walsin International
Investments Limited
1993/12/02
Borrego Solar Systems,
Inc.
2002/03/01
Walcom Chemicals
Industrial Limited
1988/12/29
No. 680, Meijing West Road, Dalang Town,
Dongguan, Guangdong
No. 679 Binjiang Road (West), Binjiang
Economic & Technology Development
Zone, Jiangyin, Jiangsu
Unit 714, 7/F, Miramar Tower, 1-23
Kimberley Road, Tsimshatsui, Kowloon,
Hong Kong
6210 Lake Shore Drive San Diego, CA
92119, USA
Unit 714, 7/F, Miramar Tower, 1-23
Kimberley Road, Tsimshatsui, Kowloon,
Hong Kong
USD
26,000 Bare copper cables and wires
USD
20,000
Steel stranded wire, steel wire,
and galvanized steel wire
HKD 4,303,960
Investments
USD
16,407
Solar panel power system
assembly
HKD
500 Commerce
Nanjing Taiwan Trade
Mart Management Co.,
Ltd.
2010/04/14 No. 230 Hexi street, Nanjing
USD
1,000
Enterprise management, property
management, marketing
planning, consultation on various
types of advertising information;
leasing of market facilities and
management of market
operations; import and export of
electronics, machinery,
agricultural and by-products,
textiles and handicrafts;
commission agency (except
auction)
Concord Industries Limited 1992/08/25
Walsin Specialty Steel
Corp.
1997/08/07
Shanghai Baihe Walsin
Lihwa Specialty Steel Co.,
Ltd.
1997/08/08
Vistra Corporate Services Centre
Wickhams Cay II, Road Town, Tortola,
VG1110 British Virgin Islands
Vistra Corporate Services Centre
Wickhams Cay II, Road Town, Tortola,
VG1110 British Virgin Islands
No. 2402, Waiqingsong Road, Baihe Town,
Qing Pu Zone, Shanghai
USD
17,000
USD
285,903
Investment holding
USD
101,400 Commerce and Investments
Changshu Walsin Specialty
Steel Co., Ltd.
1997/12/24
Haiyu Town, Changshu City, Jiangsu
Province
(Mailing address：No. 2,Hai Yang
Road ,Haiyu Town, Changshu City, Jiangsu
Province)
USD
97,000
Yantai Huanghai Iron and
Steel Co., Ltd.
2007/03/19
No. 2 Wuzhishan Road. ETDZ Yantai City,
Shantung Province,
USD
275,065
Manufacture of stainless steel
flanges and fittings, elbows, tees
and all kinds of joints, valve
fittings, fixed-edge bars, precision
straight bars, wire and tube
products
Manufacture and sale of special
steel pipes, rods, wires, stainless
steel pipes, building and
household hardware and heating
equipment
It develops and produces new
alloy materials, carbon steels,
alloy steels, stainless steels, steel
billets, various types of steel and
iron and steel products and sells
its own products; engages in the
wholesale business of new alloy
materials, carbon steels, alloy
steels, stainless steels, steel
billets, various types of steel and
iron and steel products; engages
391
Special Disclosures
Entity
Date of
Incorporation
Address
Capital
Main Operation or Business Items
Jiangyin Walsin Specialty
Alloy Materials Co., Ltd.
2005/03/10
Walsin Precision
Technology Sdn. Bhd.
2000/03/15
XiAn Walsin Metal Product
Co., Ltd.
2008/06/20
Ace Result Global Limited 2014/10/08
Chin-Cherng Construction
Co.
1973/06/28
Joint Success Enterprises
Limited
2004/01/08
No. 677, Binjiang West Road, Jiangyin City,
Jiangsu
2115-1,Kawasan Perindustrian air Keroh,
Fasa IV, Air Keroh, 75450 Melaka,
Malaysia
Room 105, 1 floor, block A, long Qi
science and Technology Park, No. 29 Jinye
Road, Xi'an new and high tech Zone,
Shaanxi
Vistra Corporate Services Centre
Wickhams Cay II, Road Town, Tortola,
VG1110 British Virgin Islands
5th Floor, 192 Jingye 1st Road, Jhongshan
District, Taipei 104, Taiwan, R.O.C.
Vistra Corporate Services Centre
Wickhams Cay II, Road Town, Tortola,
VG1110 British Virgin Islands
No. 236 Jiangdong Road,Jianye District,
Nanjing, Jiangsu Province
in the import and export of steel
and iron products and related
technologies.It also engages in
recycling and wholesale of used
and waste materials.
Cold-rolled stainless steel and flat-
rolled products
USD
49,000
USD
8,470
stainless steel plates
USD
55,350
Production and sale of medium
and heavy specialized stainless
steel plates; sale of its own
products.
USD
44,740
Investment holding
NTD 5,197,316
Investment in and construction of
national housing, sale of
commercial buildings, rental
design and interior renovation.
USD
73,520
Investments
Walsin (Nanjing)
Construction Limited
2005/08/09
USD
50,000
No. 230, Hexi Avenue, Jianye Zone,
Nanjing, Jiangsu
Nanjing Walsin Property
Management Co., Ltd.
2013/01/30
RMB
1,000
Walsin Nanjing Culture
and Arts CO., LTD.
2018/07/13
Room 3, 1st basement, No. 236,
Jiangdong Middle Road, Jianye District,
Nanjing City, Jiangsu.
RMB
1,500
Walsin Info-Electric Corp.
1995/6/21
25F., No. 1, Songzhi Rd., Xinyi Dist., Taipei
City, Taiwan
NTD
96,000
Min Maw Precision
Industry Corp.
1970/10/17
25F., No. 1, Songzhi Rd., Xinyi Dist., Taipei
City, Taiwan
NTD
265,650
Waltuo Green Resources
Corporation
2018/06/06
No. 47, Bade Rd., Yanshui Dist., Tainan
City 737, Taiwan
NTD
10,000
Real estate development, sales,
leasing, after-sales service, and
property management; hotel and
serviced apartments management
and consulting, and retail sales
and food service management
consulting
Property management, car park
management services, corporate
marketing planning, management
consulting, self-owned house
rental, building installation,
decoration projects, landscaping
design, construction, etc
Organization of cultural and
artistic exchanges, brokerage,
performance and performance
agent and other related
businesses
Solar engineering,mechanical and
electrical engineering, and power
engineering
Solar panel power system
assembly
Waste removal, resource
recycling and cement, soil
blending and related businesses
P.T Walsin Lippo Industries 1991/04/29
P.T. Walsin Lippo Kabel
1997/12/29
PT Walsin Nickel Industrial
Indonesia
2019/12/19
JI. MH. Thamrin Blok A1-1, Delta Silicon
Industrial Park, Lippo Cikarang, Bekasi
17550, Indonesia
Jl. Jati 3 Blok J7/5, Newton Techno Park,
Serang, Cikarang Selatan, Bekasi, Jawa
Barat 17550
Gedung Wisma Mulia Lt. 41 Jl Jend Gatot
Subroto No.42 Kuningan Barat Mampang
Prapatan Kota
USD
15,000 Steel wires
USD
1,500 N/A
USD
100,000
Non-ferrous base metal (nickel
pig iron) manufacturing and
power plant
(3) Presumed to have control and affiliation Common Shareholders Information: Not applicable
392
(4)The main Industries of affiliated companies:
1. Wire and cable industry
2. Stainless steel industry
3. Business real estate
4. General investment industry
Above table include the main operation or business items of each affiliated company.
The division of work of affiliated companies:
Each line of business affiliates operate independently, partially some affiliates have the purchases, sales,
engineering contracting trading and marketing agency services and other projects with each other.
(5)Directors, Supervisors, and Presidents of the Affiliated Companies (as of 2020.12.31)
Share: USD thousands or RMB thousands; shares; %
Entity
Title
Name of the Representation
Walsin Lihwa Holdings
Limited
Director
Representative of Walsin Lihwa Corporation: Yu-Lon Chiao,
Patricia Chiao, David Wen
Walsin (China)
Chairman
Jian-Hua Cao
Investment Co., Ltd.
General manager Fred Pan
Director
Supervisor
Chairman
Representative of Walsin Lihwa Holdings Limited: Jian-Hua
Cao, C.C. Chen, Fred Pan
Representative of Walsin Lihwa Holdings Limited: Richard Wu
Witty Liao
Shanghai Walsin Lihwa
Power Wire & Cable
Vice Chairman
Cheng Hang
Co., Ltd.
General manager
Director
Director
Supervisor
Jen-Chan Huang
Representative of Shanghai Nanxiang Development Zone
Industrial Co. Ltd. : Hang Cheng, Chi-Ming Chou
Representative of Walsin (China) Investment Co., Ltd.:Witty
Liao, Jin-Renn Leu, Wei-Chih Hu, Allen Yang, Jen-Chan Huang
Representative of Walsin (China) Investment Co., Ltd.: Richard
Wu
Dongguan Walsin Wire
Chairman
Witty Liao
& Cable Co., Ltd.
General manager Chang-Ming Wu
Director
Supervisor
Representative of Walsin (China) Investment Co., Ltd.: Witty
Liao, Chang-Ming Wu, Kiwi Lan
Representative of Walsin (China) Investment Co., Ltd.: Richard
Wu
Jiangyin Walsin Steel
Chairman
Witty Liao
Cable Co., Limited
Vice Chairman
Lu Lu
(JHS)
Walsin International
Investments Limited
Director
Supervisor
Director
President
Representative of Walsin (China) Investment Co., Ltd.: Witty
Liao, Jen-Chan Huang, Sherry Ho
Representative of Walsin (China) Investment Co., Ltd.: Richard
Wu
Representative of Walsin Lihwa Holdings Limited: C.C. Chen,
Fred Pan
Tzu-Yi Chiao
Borrego Solar Systems,
Chairman
Stan Chang
Inc.
Director
Director
Director
Representative of Walsin Lihwa Holdings Limited: Stan Chang,
Justin Wong, Sophi Pan
Aaron Stephen Hall
Michael Adam Hall
Shareholding(contribution)
Shares
Holding
483,230,393
100.00%
USD
USD
USD
USD
USD
USD
USD
USD
0
0
0.00%
0.00%
78,600
100.00%
78,600
100.00%
0
0
0
0.00%
0.00%
0.00%
671
4.29%
USD
14,956
95.71%
USD
USD
USD
USD
USD
USD
USD
USD
14,956
95.71%
0
0
0.00%
0.00%
26,000
100.00%
26,000
100.00%
0
0
0.00%
0.00%
20,000
100.00%
USD
20,000
100.00%
4,303,960,202
100.00%
0
0
0.00%
0.00%
1,460,458
76.36%
160,774
90,587
8.41%
4.74%
393
Special Disclosures
Entity
Title
Name of the Representation
Walcom Chemicals
Industrial Limited
Nanjing Taiwan Trade
CEO
Director
Director
Director
Chairman
Michael Adam Hall
Hao Chi
Qi-Ying Liang
Yong-Taig Chen
Tzu-Yi Chiao
Mart Management
General manager Min Zhou
Co., Ltd.
Director
Supervisor
Industries
Concord
Limited
Walsin Specialty Steel
Corp.
Director
Director
Representative of Walsin Lihwa Holdings Limited: Tzu-Yi
Chiao, Xue-Wu Wu, Min Zhou
Representative of Walsin Lihwa Holdings Limited: Richard Wu
Representative of Walsin Lihwa Corporation: Yu-Lon Chiao,
Patricia Chiao, Sophie Pan
Representative of Walsin Lihwa Corporation: Yu-Lon Chiao,
Patricia Chiao, David Wen
Shanghai Baihe Walsin
Lihwa Specialty Steel
Co., Ltd.
Chairman
C.C. Chen
General manager Horng-Sheng Sheu
Director
Representative of Walsin Specialty Steel Corp.: C.C. Chen,
Tain-Rong Chen, Allen Yang
Supervisor
Representative of Walsin Specialty Steel Corp: Nora Lin
Changshu Walsin
Specialty Steel Co.,
Chairman
General manager Pei-Yuan Sun
Ping Juan
Ltd.
Director
Representative of Walsin Specialty Steel Corp: Ping Juan, Ting-
Yeh Chien, Sherry Ho
Supervisor
Representative of Walsin Specialty Steel Corp: Richard Wu
Yantai Walsin Stainless
Steel Co., Ltd.
Chairman
Kevin Niu
General manager Nora Lin
Shareholding(contribution)
Shares
Holding
90,587
4.74%
174,999
35.00%
1
0
0
0
0.00%
0.00%
0.00%
0.00%
1,000
100.00%
USD
USD
USD
USD
1,000
285,903,187
100.00%
100.00%
101,400,000
100.00%
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
0
0
0.00%
0.00%
17,000
100.00%
17,000
100.00%
0
0
0.00%
0.00%
97,000
100.00%
97,000
100.00%
0
0
0.00%
0.00%
Director
Director
Supervisor
Representative of Jiangyin Walsin Specialty Alloy Materials
Co., Ltd.: Kevin Niu, Nora Lin
USD
116,313
45.60%
Representative of Concord Industries Limited: Allen Yang
USD
138,753
54.40%
Representative of Jiangyin Walsin Specialty Alloy Materials
Co., Ltd.: Richard Wu
USD
116,313
45.60%
Jiangyin Walsin
Specialty Alloy
Materials Co., Ltd.
Chairman
Kevin Niu
General manager Nora Lin
Director
Representative of director: Kevin Niu, Allen Yang, Nora Lin
Supervisor
Representative of supervisor: Richard Wu
Walsin Precision
Technology Sdn. Bhd
Chairman
Juei-Lung Chen
General manager Pang Boon Wah
Director
Representative of Concord Industries Limited: Juei-Lung Chen,
Pang Boon Wah, Josh Chia, Goh Lay Hong
XiAn Walsin Metal
Product Co., Ltd.
Chairman
Nora Lin
General manager Nora Lin
Director
Representative of Concord Industries Limited: Nora Lin, Lei
Chen, Allen Yang
USD
USD
USD
USD
0
0
0.00%
0.00%
49,000
100.00%
49,000
100.00%
0
0
0.00%
0.00%
32,178,385
100.00%
USD
USD
USD
0
0
0.00%
0.00%
55,350
100.00%
Ace Result Global
Limited
Chin-Cherng
Construction Co.
Joint Success
Enterprises Limited
Walsin (Nanjing)
Supervisor
Representative of Concord Industries Limited: Sophi Pan
USD
55,350
100.00%
Director
Representative of Walsin Lihwa Corporation: David Wen,
Sophi Pan
Chairman
Wu-Shung Hong
General manager Fred Pan
Director
Supervisor
Director
Representative of Walsin Lihwa Corporation: Yu-Cheng Chiao,
Yu-Lon Chiao, Fred Pan, David Wen
Richard Wu
Representative of Chin-Cherng Construction Co.: Fred Pan,
Sophi Pan, Patricia Chiao
44,739,988
100.00%
392,763
0
515,699,455
0.08%
0.00%
99.22%
0
0.00%
37,461,816
50.95%
Chairman
Jian-Hua Cao
USD
0
0.00%
394
Entity
Title
Name of the Representation
Construction Limited Vice Chairman
Fred Pan
President
Wei-Hsiung Wang
Nanjing Walsin
Property Management
Co., Ltd.
Director
Supervisor
Nanjing Walsin
Property
Management Co.,
Ltd.
General manager
Director
Supervisor
Representative of Joint Success Enterprises Limited: Jian-Hua
Cao , Yu-Lon Chiao, Fred Pan
Representative of Joint Success Enterprises Limited: Richard
Wu
Tzu-Yi Chiao
Lin Chen
Representative of Walsin (Nanjing) Construction Limited: Tzu-
Yi Chiao, Fred Pan, Kiwi Lan
Representative of Walsin (Nanjing) Construction Limited:
Richard Wu
Walsin Nanjing Culture
Chairman
Wei-Hsiung Wang
and Arts CO., LTD.
General manager Chin-Hui Wang
Director
Supervisor
Representative of Walsin (Nanjing) Construction Limited:
Wei-Hsiung Wang, Chin-Hui Wang, Kiwi Lan
Representative of Walsin (Nanjing) Construction Limited:
Sophi Pan
Walsin Info-Electric
Corp.
Chairman
David Wen
General manager Yu-Min Lin
Director
Supervisor
Chairman
Representative of Walsin Lihwa Corporation: David Wen, C.C.
Chen, Sherry Ho
Richard Wu
David Wen
General manager David Wen
Director
Supervisor
Chairman
Representative of Walsin Lihwa Corporation: David Wen,
Sophi Pan, Allen Yang
Representative of Walsin Lihwa Corporation: Richard Wu
David Wen
Min Maw Precision
Industry Corp.
Walton Advanced
Engineering, Inc.
General manager Kuo-Hui Chen
Director
Supervisor
Representative of Walsin Lihwa Corporation: David Wen, Kuo-
Hui Chen, Allen Yang
Representative of Walsin Lihwa Corporation: Sophi Pan
P.T. Walsin Lippo
President
Representative of P.T. Multi Prima Sejahtera, Tbk,: Rudy
Industries
Commissioner
Nanggulangi
Shareholding(contribution)
Shares
Holding
USD
USD
0
0
0.00%
0.00%
USD
50,000
100.00%
USD
50,000
100.00%
RMB
RMB
RMB
RMB
RMB
RMB
RMB
0
0
0.00%
0.00%
1,000
100.00%
1,000
100.00%
0
0
0.00%
0.00%
1,500
100.00%
RMB
1,500
100.00%
0
0
0.00%
0.00%
9,491,461
98.87%
0
0
0
26,565,000
26,565,000
0
0
0.00%
0.00%
0.00%
100.00%
100.00%
0.00%
0.00%
1,000,000
100.00%
1,000,000
100.00%
4,500
30.00%
Vice President
Commissioner
Representative of Walsin Lihwa Corporation: Yu-Lon Chiao
10,500
70.00%
President Director Representative of Walsin Lihwa Corporation: Kai-Dai Ou Yang
10,500
70.00%
Vice President
Director
Director
Representative of P.T. Multi Prima Sejahtera, Tbk,: Hery
Soegiarto
Representative of Walsin Lihwa Corporation: Sophi Pan, David
Karman, Ardinand Roynald P, Andre Kelsen, Foe
P.T. Walsin Lippo
President
Representative of P.T. Multi Prima Sejahtera, Tbk,: Rudy
Kabel
Commissioner
Nanggulangi
4,500
30.00%
10,500
70.00%
450,000
30.00%
Vice President
Commissioner
Representative of Walsin Lihwa Corporation: Yu-Lon Chiao
1,050,000
70.00%
President Director Representative of Walsin Lihwa Corporation: Kai-Dai Ou Yang
1,050,000
70.00%
Vice President
Representative of P.T. Multi Prima Sejahtera, Tbk,: Hery
Director
Soegiarto
Director
Representative of Walsin Lihwa Corporation: Sophi Pan, David
Karman, Ardinand Roynald P, Andre Kelsen, Foe
450,000
30.00%
1,050,000
70.00%
395
Special Disclosures
Entity
Title
Name of the Representation
Shareholding(contribution)
Shares
Holding
PT Walsin Nickel
Industrial Indonesia
President
Commissioner
Commissioner
President
Director
Director
Director
Director
Representative of Walsin Lihwa Corporation: Sherry Ho
500,000
50.00%
Representative of Perlux Investment Pte. Ltd.: Hsiung-Feng
Mei
Representative of Walsin Lihwa Corporation: C.C. Chen
Representative of Perlux Investment Pte. Ltd.: Chi-Chun Lin
Representative of New Hono Investment Pte. Ltd.: Fan Chang
Representative of Walsin Lihwa Corporation: Josh Chia,
Ardinand Roynald P.
80,000
8.00%
500,000
50.00%
80,000
420,000
8.00%
42.00%
500,000
50.00%
(6)Operating Condition of the Affiliated Companies
Entity
Capital
Stock
Total
Assets
Total
Liabilities
Net Worth
Sales
Unit: NT$ thousands
Operating
Income
(loss)
Net
Income
(loss)
Earnings
(Loss)
Per
Share
(NT$)
Concord Industries Limited (Note 2)
8,142,523 14,678,978
9,744,263
4,934,715 11,354,500
249,309
365,570
Walsin Lihwa Corporation
Walsin Lihwa Holdings Limited (Note 1)
The
Subsidiaries of
Walsin Lihwa
Holdings
Limited
Walsin (China) Investment Co., Ltd.
Shanghai Walsin Lihwa Power Wire
& Cable Co., Ltd.
Dongguan Walsin Wire & Cable Co.,
Ltd.
Jiangyin Walsin Steel Cable Co.,
Limited
Walsin International Investments
Limited
Borrego Solar Systems, Inc.
Nanjing Taiwan Trade Mart
Management Co., Ltd.
Walcom Chemicals Industrial
Limited
The
Subsidiaries of
Concord
Industries
Limited
Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
Walsin Precision Technology Sdn.
Bhd.
Walsin Specialty Steel Corp
Changshu Walsin Specialty Steel Co.,
Ltd.
Shanghai Baihe Walsin Lihwa
Specialty Steel Co., Ltd.
Yantai Walsin Stainless Steel Co.,
Ltd.
XiAn Walsin Metal Product Co., Ltd.
Ace Result Global Limited
P.T. Walsin Lippo Kabel
Walsin Info-Electric Corp.
P.T. Walsin Lippo Industries
Chin-Cherng Construction Co. (Note 3)
The
Subsidiaries of
Chin-Cherng
Construction
Co.
Joint Success Enterprises Limited
Walsin (Nanjing) Development
Limited
Nanjing Walsin Property
Management Co., Ltd.
Walsin Nanjing Culture and Arts Co.,
Ltd.
Min Maw Precision Industry Corp.
32,260,002 140,470,856 56,002,621
7,078,773
13,762,402 34,233,842
2,238,528 20,562,779 16,378,316
84,468,235 64,097,690
27,155,069 32,832,813
35,577
4,184,463
2,681,141 6,691,149
958,095
1,698,600
295,662
(45,080)
445,057
1,735,552
648,974
1,086,578
1,998,888
76,654
81,268
740,480
4,314,372
2,661,385
1,652,987 11,769,105
(27,837)
88,040
569,600
2,614,642
1,822,667
791,975
1,790,466
91,363
78,641
15,808,446 17,004,488
93,133
16,911,355
0
(20,039)
(49,650)
2.04
N/A
N/A
N/A
N/A
N/A
N/A
467,280
8,006,015
4,311,690
3,694,325 17,082,387
1,699,177 1,245,256
628.10
28,480
89,546
522,642
(433,096)
164,409
(72,045)
(52,663)
1,925
-
-
-
-
-
-
1,395,520
3,334,800
1,657,958
1,676,842
1,166,359
(26,938)
124,794
241,226
829,227
95,750
733,477
622,946
57,348
53,760
2,887,872
970,208
604
969,604
0
(45)
194,832
2,762,560
2,747,740
2,083,335
664,405
2,386,051
161,951
202,980
484,160
229,651
8,598
221,053
0
(5,210)
(7,998)
7,833,851
8,780,423
5,474,619
3,305,804
9,005,917
34,107
23,076
1,576,368
1,274,195
42,720
300,000
427,200
2,316
339,349
20,714
344,091
1,313,639
5,197,316 18,450,399
2,093,850 10,746,293
759,053
0
7,976
1,477
193,990
6,726,353
101,128
(756,737)
339,349
12,738
342,614
1,119,649
11,724,046
10,645,165
0
0
0
0
722,183
6,262,992
0
(534)
(50)
289
(3,052)
82,605
3,204,448
N/A
(10,711)
N/A
29,383
8.41
12,617
3,385
0.11
23,311 1,554.07
1.39
N/A
720,099
(1,239) 1,398,647
1,424,000 17,368,547
7,435,215
9,933,332
6,143,433
3,211,151 1,398,820
4,365
54,560
53,706
854
110,940
(6,471)
(1,400)
6,547
2,523
11,231
(8,708)
2,179
(6,400)
(4,685)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Waltuo Green Resources Corp.
PT Walsin Nickel Industrial Indonesia
Note 1: The assets, liabilities and net income of Walsin Lihwa Holdings Limited include the subsidiaries’.
Note 2: The assets, liabilities and net income of Concord Industries Limited include the subsidiaries’.
Note 3: The net income of Chin-Cherng Construction Co. include the subsidiaries’.
Note 4: The currency exchange rate was as follows:
265,650
10,000
2,848,000
882,116
8,838
8,181,424
547,472
2
5,370,718
334,644
8,836
2,810,706
79,600
0
0
56,216
(817)
(20,739)
38,121
(732)
(38,694)
1.44
(0.73)
(38.69)
396
2020/12/31 US$/NT$=1: 28.48 （exchange rate for profit/loss entries: US$/NT$ =1: 29.549）
2020/12/31 RMB/NT$=1: 4. 36484（ exchange rate for profit/loss entries: RMB/NT$=1: 4.28608）
2.
3.
Progress of private placement of securities during the latest year and up to the date of annual report
publication: None
The subsidiaries’ shareholding or disposal of the company’s shares during the latest year and up to the
date of annual report publication: None
4. Other supplemental information: None
5.
Corporate events with material impact on shareholders' equity or stock prices set forth in Subparagraph
2, Paragraph 2, Article 36 of the Securities and Exchange Act during the most recent year and up to the
annual report publication date: None.
397
Walsin Lihwa Corporation
Yu-Lon Chiao