Stock Code: 1605
Walsin Lihwa Corporation
2021 Annual Report
Printed on March 18, 2022
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:
Director of President’s Office
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 Ker‐Chang Wu
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 and London Stock Exchange
The information is available at http://mops.twse.com.tw
7. Email Address of Investor Relations Contact: opinion@walsin.com
8. Corporate Website: http://www.walsin.com
Contents
I Letter to Shareholders ........................................................................................................... 1
II Company Profile
1. Date of establishment ..................................................................................................................... 4
2. Company History & Evolution ......................................................................................................... 4
III Corporate Governance Report
1. Organizational Chart ....................................................................................................................... 6
2. Profiles of Board Directors, President, Vice Presidents and Department Heads ........................... 8
3. Remunerations to Directors, President and Vice Presidents in the Most Recent Year ................ 24
4. Corporate Governance Status ...................................................................................................... 31
5. Information on CPAs' fees .......................................................................................................... 100
6. Information on the replacement of CPAs: .................................................................................. 101
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. ............... 101
8. Transfer and pledge of shares of the directors, managers and shareholders holding more than
10% of the company's shares ..................................................................................................... 102
9. Information on relationships amongst the top ten shareholders and their relationships with
spouses or relatives within the second degree of kinship .......................................................... 103
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
.................................................................................................................................................. 107
IV Fundraising Overview
1. The Company’s Capital and Shares ............................................................................................. 108
2. Issuance of Corporate Bonds: ..................................................................................................... 113
3. Issuance of Preferred Shares: None. .......................................................................................... 114
4. Issuance of Global Depositary Receipts (GDRs) .......................................................................... 114
5. Exercise of Employee Stock Option Plan (ESOP): None. ............................................................. 115
6. Mergers, acquisitions or issuance of new shares for acquisition of shares of other companies: ....
.................................................................................................................................................. 116
7. Implementation of capital allocation plan. ................................................................................. 118
V
Business Overview
1. Business activities ....................................................................................................................... 119
2. Market Analysis and Sales Overview .......................................................................................... 130
3. Employee Data ............................................................................................................................ 139
4. Environmental Protection Expenditure Information .................................................................. 140
Contents
5. Employees-employer relations ................................................................................................... 147
VI Financial Information
1. Brief Balance Sheets and Comprehensive Income Statements of Recent Five Years ................ 156
2. Financial Analysis of Recent Five Years ....................................................................................... 160
3. Audit Committee’s Review Report for the Recent Year ............................................................. 163
4. Financial report of the most recent year .................................................................................... 164
5. Financial report of the parent company of the most recent year audited and certified by
Supervisors .................................................................................................................................. 292
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
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 operations in 2021 have been affected by the ups and downs of the COVID-19 pandemic in the
past three years, as well as the new situation of regional economic development. In response to the risk of
climate change, with the goal having moved from carbon neutrality to net zero emissions, corporate
management is not only the pursuit of the best interests of shareholders, and ESG has become the most
important responsibility of corporate sustainable management. In the face of the current challenges, the
Company has been able to grasp the key business opportunities and move forward steadily. In 2021, net income
after tax reached NT$14.6 billion and earnings per share were NT$4.27, the best operating performance in history.
We are committed to being a better and stronger company, and in a changing environment, we are able to
enhance our competitive edge in differentiation and demonstrate our brilliant and profitable results. Looking
ahead to the year 2022, the Company is still committed to the goal of corporate sustainable development,
continuing to promote corporate process reengineering, intelligent manufacturing and automated production,
actively carrying out investments and construction in energy conservation, green energy and circular economy,
strengthening the Company's resilience and core competitiveness, and pursuing the creation of corporate value
for the benefit of stakeholders.
Accomplishments in 2021
The Company's consolidated revenue for the year 2021 was NT$156.7 billion and consolidated gross profit was
NT$19.8 billion, a year-on-year increase of 39% and 59% respectively. Total operating income reached NT$13.3
billion, a year-on-year increase of more than 80%. In addition to the doubling of the operating income of the
Wire and Cable Business Group, the growth was mainly driven by the quadrupling of the operating income of the
Stainless Steel Business Group, as well as the operating income of the Commodity Business Group, which
benefited from new investments such as the nickel iron and power plant in Indonesia, pushing the Company's
annual profit to a record high.
Wire and Cable Business:
The overall profit of the wire and cable business grew compared to the previous year, benefiting from the return
of Taiwanese businessmen and the expansion of private investment in factory construction, which led to an
increase in demand for power cables. With the increasing sales of our main products, such as power and
1
Letter to Shareholders
telecommunication cables, we continued to maintain our leadership in market share.
Stainless Steel Business:
The Stainless Steel Business's overall profit increased significantly compared to previous years. In the face of the
volatility of supply and demand in the raw material market, we were able to effectively control the procurement
of materials and fully satisfy customers' needs through timely adjustment of production capacity and accurate
delivery, thus effectively grasping market opportunities and enhancing our market competitiveness.
Commodity Business:
The nickel pig iron plant in Indonesia was not affected by the pandemic, with the construction being completed
according to the timeline. The RKEF production line was completed in mid-2021 and the power plant commenced
operation at the end of 2021. All production lines will be in full operation in 2022 to ensure high production
capacity and effectively reduce the risk of raw material price fluctuations.
Real Estate Business:
The Taipei headquarters, Xinyi Building, is generating stable rental income; Phase II of Lot AB in Nanjing, China,
including One Mall, has not been affected by the pandemic and has seen steady growth in foot traffic and sales;
the construction of the No.6 Building and the leasing of 12 floors of commercial and office space resulted in
stable rental income flow.
Summary of 2022 Business Plan
Wire and Cable Business:
We will grasp the business opportunities of plant construction and provide customers with accurate services to
maintain our market leadership position. We will also expand our deployment in the industrial cable market. In
addition to the sales of cables for harbor machinery, we are also actively engaged in green energy cables and
developing new products to capture the growing business opportunities in the green energy industry, such as
solar and wind energy.
Stainless Steel Business:
In the face of external environmental impacts such as the pandemic and carbon neutrality issues, we will continue
to reduce carbon emissions in the manufacturing process to improve overall production efficiency and pursuit
environmental conservation and energy saving, while accelerating new product development and expanding the
proportion of high-value products to strengthen our product competitiveness.
2
Commodity Business:
We will control the management of the whole production operation of nickel production plants and power plants,
integrate the procurement of raw materials and risk management of each business unit, and continue to deepen
the cooperation relationship with green energy suppliers, for the purpose of constructing a green supply chain
to meet the trend of sustainable management, as well as achieving the goal of minimizing risks and reducing
production costs.
Real Estate Business:
No. 1 Office Building, Phase II of Lot AB in Nanjing, China, is expected to be completed in mid-2022, and is actively
engaged in leasing and sales plans; the commercial department on Floors 1-4 and office space on Floors 5-12 of
the No.6 Building have been leased; and One Mall has adjusted its store mix to enhance operational performance.
Future corporate development strategy under the influence of external competition,
regulations and overall business operation
Looking ahead to 2022, the short-term operational challenges posed by inflation, abnormal volatility in the supply
of raw materials and financial trading markets, and rising geopolitical risks are testing the Company's momentum
of maintaining its stable profit growth. The Company's long-term operation strategy is based on industrial
automation and intelligence, energy saving and environmental protection, and R&D innovation, and the creation
of a customer value chain through manufacturing services, with a view to enhancing the core competitiveness
of the Company and laying the foundation for its long-term stable growth.
Chairman Yu-Lon Chiao
3
Company Profile
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
1982
Completed the Hsinchuang plant for SCR copper rod production, with annual manufacturing capacity of
50,000 tonnes of low-oxygen copper rods.
Expanded SCR production facilities to increase annual manufacturing capacity to 100,000 tonnes 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.
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.
Established the Dongguan plant for bare copper wire production.
Expansion of Yanshui specialty steel plant was carried out to include slab steelmaking facilities.
2000
2002
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.
4
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 tonnes.
Total copper production increased from 400,000 to 650,000 tonnes.
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.
2008
2009
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.
Expansion of Yantai plant for stainless steel manufacturing process; added new stainless steel billet
products.
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.
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.
Cold rolled steel coil production officially commenced at the Taichung Harbor stainless steel roll plant.
First batch of premium residential buildings in C2 land plot in Nanjing Walsin Centro delivered; phased
development of D and AB land plots planned.
The Company marked its 50th anniversary.
Taiwan and China, have recorded steady increase in overall steelmaking and annual production of
710,000 tonnes.
2012
2013
2014
2016
2017
2018
The roughing mill 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
2021
The Company established PT Walsin Nickel Industrial Indonesia to extend into the production and sale of
upstream raw materials for stainless steel.
Construction of nickel iron production line in Indonesia was completed, and nickel metal, the raw material for
stainless steel, started to be produced.
5
Corporate Governance Report
III Corporate Governance Report
1. Organizational Chart
(1) Company Organization Chart (March 18, 2022)
(2) Principal Duties of Various Departments
Department
Audit Committee
Compensation
Committee
Sustainable
Development
Committee
Nomination
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.
Assisting the Board of Directors in developing and identifying candidates for Board members and senior management
and their independence standards, establishing and periodically reviewing a continuing education and succession plan,
and ensuring that the Company operates in accordance with the Corporate Governance Best Practice Principles.
Auditing Office
Responsible for planning and auditing internal auditing systems.
Wire & Cable BG
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.
6
Shareholder's MeetingBoard of DirectorsChairmanPresidentAuditing OfficeChairman’s OfficePresident’s OfficeAudit CommitteeCompensation CommitteeSustainable DevelopmentCommitteeJoint ShareholdersService OfficeGeneral AffairsDept.Corporate Communication Dept.Accounting Div.Finance Div.Wire & Cable BGStainless Steel BGHuman Resource Div.CommodityBGCommercial & Real Estate BGIntegrated Procurement Div.Information & Technology Div.Big Data & Cyber Security Div.Cloud Services Div.Property Management Dept.Environment, Health & Safety Div.Nomination CommitteeCorporate Planning Div.Legal Div.Financial Management CenterAdministration Management CenterIT CenterStrategic Information ManagementCenter
Department
Job Duties & Functions
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.
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.
Stainless Steel BG
Commodity BG
Responsible for raw material procurement transactions, control of raw material price risk, and operation management
of Walsin Nickel Industrial Indonesia.
Business Items: Developing composite commercial properties, real estate management, etc.
Commerce & Real
Estate BG
IT Center
Financial Management
Center
Administration
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 the operation of financial accounting system and participating in the management and decision-making.
Responsible for human resources, procurement, media and general affairs, etc.
Strategic Information
Management Center
Responsible for data utilization indicator design and action plan planning, data analysis and modeling, data management
and information security, internal and external resources integration and management.
Legal Division
Responsible for legal risk management and the preparation and management of various contracts, legal disputes,
litigation or non-litigation cases.
Integrated
Procurement Div.
Corporate Planning
Div.
Environment, Health &
Safety Division
Joint Shareholders
Service Office
Responsible for procurement policy formulation and improvement of procurement system, cross-regional procurement
resource allocation and integration, joint bargaining for the best procurement cost, and establishment of strategic
partnership with important suppliers.
Responsible for investment planning and execution related to company strategy.
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.
Responsible for the planning and execution of the Company's shareholder services and the administration matters
relating thereto.
7
Corporate Governance Report
2. Profiles of Board Directors, President, Vice Presidents and Department Heads
(1)
Information on Directors
Title
Nationality
or
Registration
Country
Chairman
R.O.C.
Name
Gender
& Age
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
Yu-Lon
Chiao
Male
61-70
years
old
May 29,
2020
3 years April 10,
45,961,773
1.38% 47,161,773
1.37% 19,638,314
0.57%
1981
Vice
Chairman
R.O.C.
Patricia
Chiao
May 29,
2020
Female
61-70
years
old
3 years May 31,
91,969,006
2.77% 93,169,006
2.72% 0.00
0.00%
2005
(Note2)
Director
R.O.C.
May 29,
2020
Yu-
Cheng
Chiao
Male
61-70
years
old
3 years April 10,
39,508,661
1.19% 40,661,551
1.19% 19,032,428
0.55%
1981
Director
R.O.C.
May 29,
2020
Yu-
Heng
Chiao
Male
61-70
years
old
3 years April 18,
57,792,197
1.74% 61,072,197
1.78% 10,274,952
0.30%
1990
8
Shares Held in Name of
Others
Number of
shares
Percentage
Key Education/Work Experience Other Current Positions Within the Company
0
0.00%
Business
Department,
Washington;
former President
Chairman.
University
Administration
of
The Company's
and Vice
Chairman of Concord Venture Capital Group;
Director/ Vice President Commissioner of
Hangzhou Walsin Power Cable & Wire Co.,
Ltd., Walton Advanced Engineering, Inc., Ltd.,
and subsidiaries of Walsin Lihwa Corporation.
0
0
0.00% MBA at College of Notre Dame;
the Company’s former assistant
vice president of
Investment
Dept., assistant vice president of
Financial Dept., head of Financial
Investment Dept., assistant vice
president of Commodity Center
and
Investment
Management Center, President of
Insulated Wire & Cable BU.
University of Washington Masters
and
of
Engineer
Business Administration
The
Company's former chairman.
Electrical
Financial
0.00%
0
0.00%
Golden Gate University, Master of
The
Business Administration
Company's former vice president
and vice chairman.
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
Electronics
of Winbond
Chairman
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
Committee
the
Compensation Committee at Taiwan Cement
Corp.
Chairman of Walsin Technology Corporation,
Walton Advanced Engineering, Inc., HannStar
Board Corp., Global Brands Manufacture,
Prosperity Dielectrics Co., Ltd.,
Info-Tek
Corp., HannStar Board Corporation (Jiangyi),
Silitech Technology Corporation, and Yu Yue
Corporation; Vice Chairman of Career
Technology Mfg. Co., Ltd.; Director of Sheng
Cheng Industry, An Xin e-Commerce, Inpaq
Technology Co., Ltd., and VVG Co. Ltd.
convener
and
of
December 31, 2021
Note
(Note
1)
None
None
Other Officer, Director or Supervisor who
are Spouse or Relative within Second
Degree
Position
Name
Relationship
Vice Chairman
Director
Director
Director
Chairman
Director
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
Younger
sister
Older
brother
Younger
brother
Sister-in-law
Older
brother
Older
brother
Younger
brother
Sister-in-law
None
Chairman
Vice Chairman
Director
Director
Yu-Lon
Chiao
Patricia
Chiao
Yu-Heng
Chiao
Wei-Shin
Ma
Younger
brother
Younger
sister
Younger
brother
Sister-in-law
None
Chairman
Vice Chairman
Director
Director
Yu-Lon
Chiao
Patricia
Chiao
Yu-Cheng
Chiao
Wei-Shin
Ma
Older
brother
Older
sister
Older
brother
Sister-in-law
9
Corporate Governance Report
Title
Nationality
or
Registration
Country
Director
R.O.C.
Name
Gender
& Age
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
Andrew
Hsia
Male
71-80
years
old
May 29,
2020
3 years May 29,
0
0.00%
0
0.00%
0
0.00%
2020
Director
R.O.C.
Wei-
Shin Ma
Female
51-60
years
old
May 29,
2020
3 years June 11,
244,033
0.01%
244,033
0.01% 54,205,908
1.58%
2014
Legal
Person:
May 31,
2005
(Note3)
Represen
tative:
May 29,
2020
210,011,000
6.31%
220,011,000
6.41%
-
-
0
0.00%
0
0%
0
0.00%
3 years June 11,
0
0.00%
0
0.00%
0
0.00%
2014
-
May 29,
2020
3 years
Male
51-60
years
old
Male
61-70
years
old
May 29,
2020
Director
R.O.C.
Independe
nt Director
R.O.C.
Chin-Xin
Investm
ent Co.,
Ltd
Represe
ntative:
Pei-
Ming
Chen
Ming-
Ling
Hsueh
10
Shares Held in Name of
Others
Number of
shares
0
Percentage
0.00%
Key Education/Work Experience
Other Current Positions Within the
Company
Vice President & Spokesman of Phu
My Hung Holding Group; Chief
Representative of Central Trading &
Development Corporation.
December 31, 2021
Other Officer, Director or Supervisor who
are Spouse or Relative within Second
Degree
Position
Name
Relationship
Note
(Note
1)
None
None
None
None
the
He received his bachelor's degree in law
from Fu Jen Catholic University and his
master's degree in diplomacy from the
National Chengchi University;
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
for Senior
Business Administration
Managers, University of California
(Berkeley), Department of East Asian
Languages;
Yuanta
Chairman
Securities Investment Trust Corporation
and HannStar Display Corp.
of
0
0.00%
0
0.00% M.S. in Electrical Engineering, University
of Detroit, USA; B.S.
in Electrical
Engineering, National Cheng Kung
University;
Nuvoton
Director,
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; Adjunct Professor,
School of Management, National Taiwan
University of Science and Technology.
Association;
Chairman of HannsTouch Solution Inc.,
Golden Apple Investment Company,
and Online Banking Investment Co.,
Ltd.; Director of HannStar Color Co.,
Winbond Electronics Corporation,
United Integrated Services Co., Ltd.,
and White
Stone Management
Consultancy.
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
Holdings
Independent Director of Yuanta
Financial
Yuanta
Commercial Bank, TTY Biopharm and
Lite-On
Corporation;
Technology
Director of Tung Hua Book Co., Ltd.
&
None
None
None
None
11
Corporate Governance Report
Title
Nationality
or
Registratio
n Country
Name
Gender
& Age
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
Independe
nt Director
R.O.C.
King-
Ling Du
May 29,
2020
Male
71-80
years
old
3 years June 11,
0
0.00%
0
0.00%
1,000
0.00%
2014
Independe
nt Director
R.O.C.
Shiang-
Chung
Chen
Male
51-60
years
old
May 29,
2020
3 years June 11,
0
0.00%
0
0.00%
0
0.00%
2014
Independe
nt Director
R.O.C.
Fu-
Hsiung
Hu
Male
61-70
years
old
May 29,
2020
3 years May 29,
0
0.00%
0
0.00%
0
0.00%
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.
12
Shares Held in Name of
Others
Key Education/Work Experience
Other Current Positions Within the Company
Other Officer, Director or Supervisor who
are Spouse or Relative within Second
Degree
December 31, 2021
Note
(Note
1)
Position
Name
Relationship
None
None
None
None
Director of Sheh Fung Screws Co., Ltd and
Green River Holding【 Co., Ltd.
Number of
shares
0
Percentage
0.00% Mississippi State University, Masters in
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
and
Credit
Technology,
Information
Taiwan
Center
Cooperative Securities
Science
Joint
and
Chairman and President of Mercuries Data
Nanjing
Systems Ltd.; Chairman of
Mercuries Development of Software Co., Ltd.,
Mercuries Insurance Agent Co., Ltd. and
Hipact Tech
Inc.; Director of Mercuries
Holdings Corporation, Mercuries Data
Systems Ltd., Shang-Ling Investment Inc.,
Inc., Yangzheng
Investment
Shang-Hong
Investment Co.,
EASYCARD
and
Ltd.
Investment Holding Company; Supervisor of
Digicentre Co., Ltd.; Independent Director of
Teco Image Systems Inc.; Director of Taiwan
Masters Golf Promotion Foundation, and
Institute
for National Policy Research
Foundation;Director of the Friends of the
Police Association of the Republic of China,
Vice President of Criminal Investigation and
Prevention Association of the Republic of
China; Chairman of the Security Police Third
Corps Police Club of the Police Friendship
Association of the Republic of China; Director
of Taipei Independent Directors Association
Independent Managing Director of O-Bank
Co., Ltd.
None
None
None
None
None
None
None
None
13
Corporate Governance Report
1. Major shareholders of institutional shareholder
Name of Institutional Shareholder
Major Shareholders of Institutional Shareholders (Note)
December 31, 2021
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 the institutional shareholder. The shareholding ratios are rounded to the nearest hundredth percent.
2. Major Shareholders in Previous Table who are Institutional Investors and their Major Shareholders
Name of Institutional Shareholder
Major Shareholders of Institutional Shareholders (Note)
December 31, 2021
Shareholding
Winbond Electronics Corporation
Walsin Lihwa Corporation
Chin-Xin Investment Co., Ltd
LGT Bank (Singapore) Investment Fund under the custody of Business
Department of Standard Chartered Bank (Taiwan) Limited
Yu-Cheng Chiao
2008-1 New Labor Pension Fund Investment Account (Discretionary Mandate
with Polaris Securities)
Vanguard Emerging Markets Stock Index Fund managed by Vanguard Group
under the custody of JP Morgan Chase Bank N.A., Taipei Branch
Pai-Yung Hong
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
iShares MSCI Taiwan Index ETF Investment Fund under the custody of Business
Department of Standard Chartered Bank (Taiwan) Limited
Yu-Heng Chiao
22.21%
6.01%
1.65%
1.47%
1.28%
1.03%
0.97%
0.94%
0.83%
0.75%
Note: Top ten shareholders of the institutional shareholder. The shareholding ratios are rounded to the nearest hundredth percent.
Name of Institutional Shareholder
Major Shareholders of Institutional Shareholders (Note)
Walsin Lihwa Corporation
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.
Rong Jiang Co., Ltd.
Huali Investment Corp.
Patricia Chiao
Investment Account of Banque Pictet & CIE SA under the custody of HSBC
Yu-Heng Chiao
Norges Bank Investment Fund under the custody of Citibank, Taipei Branch
March 15, 2022
Shareholding
7.33%
6.47%
6.41%
5.98%
4.31%
2.91%
2.72%
1.81%
1.78%
1.52%
Note: Top ten shareholders of the institutional shareholder. The shareholding ratios are rounded to the nearest hundredth percent.
14
December 31, 2021
Shareholding
Name of Institutional Shareholder
Major Shareholders of Institutional Shareholders (Note)
Huali Investment Corp.
HannStar Color Co. Ltd.
Walsin Technology Corporation
HannStar Board Corporation
Prosperity Dielectrics Co., Ltd.
Walsin Lihwa Corporation
HannStar Board Corporation
Global Brands Manufacture Ltd.
Walton Advanced Engineering, Inc.
Kim Eng Securities Private Co., Ltd. investment account under the custody of
Citibank Taiwan Ltd.
Yu-Heng Chiao
Winbond Electronics Corporation
Fubon Life Insurance Co., Ltd.
Vanguard Emerging Markets Stock Index Fund managed by Vanguard Group
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
Pai-Yung Hong
Special Account of BNP Paribas, Singapore Branch under the custody of HSBC
Prosperity Dielectrics Co., Ltd.
Walsin Color Corporation
Yu Yueh Co., Ltd.
Walsin Technology Corporation
Walton Advanced Engineering, Inc.
Yu-Heng Chiao
Ta-Ho Maritime Corporation
ABC Taiwan Electronics Corp
Wen-Che Shen
Chiao-Fang Hsu
Investment Account of Mercer Investment No. 1 Fund Entrusted by Mercer QIF
Fund Company with the External Manager, Fei-Si Investment Management Co.,
Ltd., under the custody of Business Department of Standard Chartered Bank
(Taiwan) Limited
Tsung-Yuan Huang
UBS Europe SE Investment Fund under the custody of Citibank, Taipei Branch
100%
18.30%
7.55%
3.21%
2.74%
2.74%
2.65%
1.77%
1.64%
1.45%
1.37%
20.32%
12.06%
5..43%
3.54%
2.18%
1.86%
1.49%
1.07%
0.95%
0.89%
43.13%
0.75%
0.62%
0.55%
0.47%
0.44%
0.33%
0.30%
0.28%
0.25%
Note: Top ten shareholders of the institutional shareholder. The shareholding ratios are rounded to the nearest hundredth percent.
15
Corporate Governance Report
3. Disclosure of Professional Qualifications of Directors and Independence of Independent Directors
Qualification
Name
Professional Qualifications and Experience (Note 1)
Independence (Note 2)
Number of
Other Public
Companies
Where He/She
Acts as
Independent
Directors
Concurrently
Yu-Lon Chiao, Chairman, has not been
involved in any of the circumstances
described in Subparagraph 6, Paragraph
1, Article 3 of the Regulations Governing
Appointment of Independent Directors
and Compliance Matters
for Public
Companies.
of
involved
any
described
Patricia Chiao, Vice Chairman, has not
the
been
in
in
circumstances
Subparagraphs 6 and 9, Paragraph 1,
Article 3 of the Regulations Governing
Appointment of Independent Directors
and Compliance Matters
for Public
Companies.
Yu-Cheng Chiao, Director, has not been
involved in any of the circumstances
described in Subparagraphs 1 and 6,
Paragraph 1, Article 3 of the Regulations
Governing Appointment of Independent
Directors and Compliance Matters for
Public Companies.
Yu-Heng Chiao, Director, has not been
involved in any of the circumstances
described
in Subparagraph 1 and
Subparagraphs 6 to 9, Paragraph 1,
Article 3 of the Regulations Governing
Appointment of Independent Directors
and Compliance Matters
for Public
Companies.
0
0
1
0
Yu-Lon Chiao
Patricia Chiao
Yu-Cheng Chiao
Yu-Heng Chiao
experience
Mr. Yu-Lon Chiao joined Walsin Lihwa in 1983 and has
served as Vice President, President, Vice Chairman, and
CEO, and took over as Chairman in 1996. Mr. Chiao,
highly experienced in the wire and cable, stainless steel,
electronic technology, commercial and real estate
industries, has focused on the management of the
Company and led the Company's continuous growth
with good results. He has not been involved in any of the
circumstances described in the subparagraphs of Article
30 of the Company Act.
Patricia Chiao, Vice Chairman, has been with the
Company since 1981, has served as Assistant Vice
President of the Finance Department, Special Assistant
to the President, Associate Manager and Vice President
of the Commodity Center and Financial Investment
Management Center, General Manager of the Copper
Business Group, and General Manager of the Wire and
Cable Business Group, and has served as Vice Chairman
since 2016. She is familiar with the organization and
the Company and has
business operations of
and
knowledge
professional
in
management,
judgment and human
investment
resources. She has not been involved in any of the
circumstances described in the subparagraphs of Article
30 of the Company Act.
Yu-Cheng Chiao, Director, served as Chairman of the
Company from 1986 to 1994. Currently, he serves as
Chairman of Winbond Electronics Corporation,
Independent Director of Taiwan Cement Corporation,
Director of Walsin Technology Corporation. He served
as, among others, Chairman of Nuvoton Technology
Corporation and Director of Taiwan Electrical and
Electronic Manufacturers' Association, received the
ERSO Award and was elected as the eighth member of
ITRI. Therefore, he has the necessary expertise and
experience in management and business development
of the Company. In addition, he has not been involved
in the
in any of the circumstances described
subparagraphs of Article 30 of the Company Act.
Yu-Heng Chiao, Director, the Vice President and Vice
Chairman of the Company from 1990 to 1996. Currently,
he acts as Chairman of Walsin Technology Corporation,
HannStar Board Corp., Global Brands Manufacture Ltd.,
Walton Advanced Engineering,
Inc., Prosperity
Info-Tek Corp., and Silitech
Dielectrics Co., Ltd.,
Technology Corporation. Therefore, he has
the
necessary expertise and experience in management and
business development of the Company. In addition, he
has not been involved in any of the circumstances
described in the subparagraphs of Article 30 of the
Company Act.
16
Qualification
Name
Professional Qualifications and Experience (Note 1)
Independence (Note 2)
Number of
Other Public
Companies
Where He/She
Acts as
Independent
Directors
Concurrently
Andrew Hsia
Wei-Shin Ma
Chin-Xin
Investment Co.,
Ltd
Representative:
Pei-Ming Chen
Ming-Ling Hsueh
in
technology
Andrew Hsia, Director, serves as Vice President and
Spokesman of Phu My Hung International Corporation
and Chief Representative of Central Trading &
Development Corporation (Samoa). He served as,
among others, a diplomat of the Republic of China,
Chairman of the Mainland Affairs Council, Deputy
the Ministry of National Defense,
Minister of
Representative of the Ministry of Foreign Affairs in
Indonesia, and Head of Political Section, Ministry of
Foreign Affairs. He has a background of legal and
diplomatic expertise and an international perspective,
and is familiar with the economies and markets of the
Southeast Asian region. In addition, he has not been
involved in any of the circumstances described in the
subparagraphs of Article 30 of the Company Act.
Wei-Shin Ma, Director, serves as CEO and Chairman of
HannsTouch Solution Inc., Chairman of Golden Apple
Investment Company, and Chairman of Online Banking
Investment Co., Ltd., Director of White Stone
Management Consultancy and Director of United
Integrated Services Co., Ltd. She served as Chairman of
HannStar Display Corp. and Chairman of Yuanta
Securities
Investment Trust Corporation. She has
experience in business, finance and accounting, with
expertise
leadership, operational
judgment and management. In addition, she has not
been involved in any of the circumstances described in
the subparagraphs of Article 30 of the Company Act.
Pei-Ming Chen, Director, is President of Winbond
Electronics Co. Ltd. He was Chairman of Nuvoton
Technology Co. Ltd. and Vice President of DRAM
Products Business Group and Sales Center of Winbond
Electronics Co. With his primary education in electrical
engineering and his work experience focused on the
semiconductor business, he has participated in many
mergers and acquisitions and international business
integration and therefore has the necessary experience
and expertise
and
development of the Company's business. In addition, he
has not been involved in any of the circumstances
described in the subparagraphs of Article 30 of the
Company Act.
Ming-Ling Hsueh, Independent Director, used to act as
PwC Taiwan Director, and is Independent Director of
Yuanta Financial Holdings & Yuanta Commercial Bank,
Lite-On Technology Corporation, and TTY Biopharm,
and Director of Tung Hua Book Co., Ltd. He is also
Adjunct Professor, School of Science and Technology
Management, National Tsing Hua University, Adjunct
Professor, School of Management, National Taiwan
University of Science and Technology, and Executive
Director, Taiwan Corporate Governance Association.
Therefore, he has professional knowledge and
background
in finance, accounting and corporate
governance. In addition, he has not been involved in any
of the circumstances described in the subparagraphs of
Article 30 of the Company Act.
in business management
Andrew Hsia, Director, has not been
involved in any of the circumstances
described
in Subparagraph 1 and
Subparagraphs 3 to 9, Paragraph 1,
Article 3 of the Regulations Governing
Appointment of Independent Directors
for Public
and Compliance Matters
Companies.
Wei-Shin Ma, Director, has not been
involved in any of the circumstances
described
in Subparagraph 1 and
Subparagraphs 6 to 9, Paragraph 1,
Article 3 of the Regulations Governing
Appointment of Independent Directors
and Compliance Matters
for Public
Companies.
Pei-Ming Chen, Director, has not been
involved in any of the circumstances
described in Subparagraphs 1, 3, 4, 6, 7,
and 9, Paragraph 1, Article 3 of the
Regulations Governing Appointment of
Independent Directors and Compliance
Matters for Public Companies.
Ming-Ling Hsueh, Independent Director,
has not been involved in any of the
circumstances described in Paragraph 1,
Article 3 of the Regulations Governing
Appointment of Independent Directors
and Compliance Matters
for Public
Companies. Besides, neither he nor his
spouse nor any of his relatives within
second degree of kinship is a director of
the Company or its affiliates holding any
number and proportion of shares of the
Company (which are not held in the
name of others).
0
0
0
3
17
Corporate Governance Report
Qualification
Name
Professional Qualifications and Experience (Note 1)
Independence (Note 2)
King-Ling Du
Shiang-Chung
Chen
Fu-Hsiung Hu
the
circumstances described
King-Ling Du, Independent Director, was Executive Vice
President, Vice President of Business and Planning and
Engineering, and Representative in Singapore and New
York, USA, of China Steel Corporation; General
Manager, Kaohsiung Rapid Transit Corporation; and
Chairman, China Ecotek Corporation. He is currently
Director of Sheh Fung Screws Co., Ltd and Green River
Holding Co., Ltd. He has long experience in the steel
industry and is familiar with the planning and promotion
of production, plant expansion and environmental
protection projects, with expertise
in mechanical
engineering, industrial development and operation
management. In addition, he has not been involved in
any of
the
in
subparagraphs of Article 30 of the Company Act.
Shiang-Chung Chen, Independent Director, served in
the Stainless Steel Business Group of the Company from
1993 to 2004 as Head of Division. He is now Chairman
and President of Mercuries Data Systems Ltd. and
Independent Director of Hipact Tech Inc., Nanjing
Mercuries Development of Software Co., Ltd.,
Mercuries Insurance Agent Co., Ltd. and Teco Electric &
Machinery Co., Ltd. He has long experience in the
system and platform development and integration
engineering business in the information industry and is
also familiar with the production and sales management
of stainless steel business; therefore, he has the
necessary professional and work experience for the
Company's business. In addition, he has not been
involved in any of the circumstances described in the
subparagraphs of Article 30 of the Company Act.
Fu-Hsiung Hu,
Independent Director, was Vice
Chairman, Council of Agriculture, Executive Yuan;
Director of Department of Economic Energy and
Agriculture, Executive Yuan; Director of the Office of the
President of the Executive Yuan; Chairman of Joint
Credit
Information Center, Taiwan Cooperative
Securities, and National Animal Industry Foundation;
Director, Mega International Commercial Bank and
Taiwan Cooperative Bank; Managing Director, Central
Trust of China; Director, Straits Exchange Foundation.
He is currently acting as Managing Director of O-Bank,
with professional knowledge and background
in
business administration, finance and securities, and
credit information. In addition, he has not been involved
in the
in any of the circumstances described
subparagraphs of Article 30 of the Company Act.
involved
in any of
King-Ling Du, Independent Director, has
the
not been
circumstances described in Paragraph 1,
Article 3 of the Regulations Governing
Appointment of Independent Directors
and Compliance Matters
for Public
Companies. Besides, neither he nor his
spouse nor any of his relatives within
second degree of kinship is a director of
the Company or its affiliates holding any
number and proportion of shares of the
Company (which are not held in the
name of others).
described
circumstances
Independent
Chen,
Shiang-Chung
Director, has not been involved in any of
the
in
Paragraph 1, Article 3 of the Regulations
Governing Appointment of Independent
Directors and Compliance Matters for
Public Companies. Besides, neither he
nor his spouse nor any of his relatives
within second degree of kinship is a
director of the Company or its affiliates
holding any number and proportion of
shares of the Company (which are not
held in the name of others).
involved
in any of
Fu-Hsiung Hu, Independent Director, has
not been
the
circumstances described in Paragraph 1,
Article 3 of the Regulations Governing
Appointment of Independent Directors
and Compliance Matters
for Public
Companies. Besides, neither he nor his
spouse nor any of his relatives within
second degree of kinship is a director of
the Company or its affiliates holding any
number and proportion of shares of the
Company (which are not held in the
name of others).
Number of
Other Public
Companies
Where He/She
Acts as
Independent
Directors
Concurrently
0
1
1
Note 1: None of the Independent Directors of the Company are directors, supervisors or employees of companies with specific
relationships with the Company and have not received compensation for providing business, legal, financial or accounting
services to the Company or its affiliates in the last two years.
18
4. Diversity and Independence of the Board
(1) Diversity of the Board
In accordance with Article 20 of the Company's Corporate Governance Best Practice Principles and the "Principles of
Election of Board Members and Managers and Guidelines for Continuing Education and Succession Planning"
established by the Company in November 2021, the Board of Directors will implement the objectives of diversity and
independence in terms of expertise, experience and gender required for Board members, and will continue to invite
appropriate candidates to join the Board of Directors in accordance with the above objectives in order to strengthen
the balance of the Board of Directors in response to the Company's development strategies and changes in the
internal and external environment. In order to achieve the desired objectives of corporate governance, the Board of
Directors of the Company is composed of members from the management team, managers of relevant industries
and professionals with financial, business and accounting backgrounds, who effectively perform the duties of Board
members with different fields and work backgrounds. These duties include establishing and maintaining the
Company's vision and values, assisting in promoting corporate governance and strengthening management,
overseeing and evaluating the implementation of management policies and operational plans, and being responsible
for the Company's overall economic, social, and environmental operations to enhance corporate governance and
corporate value from the perspective of stakeholders.
The Company has built its strength by being focused on the wire and cable, stainless steel, commodity, and
commercial real estate fields and become a model of business excellence moving towards the manufacturing service
industry. If we look at the list of directors of the Company, Yu-Lon Chiao, Chairman, has been working in the business
field of the Company for a long time and has a good understanding of the operation and development of the industry,
with an open-minded leadership style that encourages adoption of suggestions; Director Yu-Cheng Chiao and
Director Yu-Heng Chiao have joined the management team of the Company and therefore are familiar with the
organization and business operation of the Company and are good at operation management; Andrew Hsia, Director,
comes from a diplomatic background with an international perspective and therefore has a good grasp of the
conditions of the Southeast Asian market and can fully assist the Company in making relevant investment decisions;
Director Pei-Ming Chen's work experience is focused on semiconductor business, and he has participated in many
mergers and acquisitions and international business integration and therefore has operational management
experience and expertise. As for the two female Directors, Director Patricia Chiao specializes in operational
management, investment judgment and human resourcest, while Director Wei-Shin Ma specializes in technology
leadership, operational judgment and operational management. The Company's Independent Directors have
industry knowledge and an international market perspective, with Independent Director Ming-Ling Hsueh
specializing in finance, accounting and corporate governance, Independent Director Fu-Hsiung Hu having expertise
and experience in business administration, finance and securities, and credit information, Independent Director King-
Ling Du having extensive steel expertise and being familiar with the development and management of the stainless
steel industry, and Independent Director Shiang-Chung Chen specializing in intelligent technology leadership with a
good grasp of the development of Industry 4.0.
(2) Independence of the Board:
There are 11 Directors of the Company, including 4 Independent Directors, whose terms of office do not exceed
three consecutive terms, so as not to reduce their independence due to long tenure and to enable them to exercise
their duties and responsibilities objectively, and none of them are subject to Paragraphs 3 and 4 of Article 26-3 of
the Securities and Exchange Act.
The Company should have only 3 Independent Directors in accordance with the law, but it has four Independent
Directors, one more than legally required, which exceed the statutory target and account for 36% of all Directors of
the Company, in order to improve the Company's operation and development and operation of corporate
governance practices.
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 Underage Children
Shares Held in Name of
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
(Note1)
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
0
0.00%
0
0.00%
0
0.00%
President of
Commodity BG
R.O.C.
Josh Chia Male
June 13,
2019
0
0.00%
11,559
0.00%
0
0.00%
20
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
Communication
Manager
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/
Department/Performance Management
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
December 31, 2021
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.
Chairman of Shanghai Baihe Walsin Lihwa
Specialty Steel Products Co., Ltd.; Director of
Walsin International Investment, Walsin China
Investment Co., Ltd., Walsin Info-Electric Inc. and
PT. Walsin Nickel Industrial Indonesia.
Director of Shanghai Walsin Lihwa Power Wire &
Ltd., Chung Tai Technology
Cable Co.,
Development Engineering Co., Ltd., and Taiwan
Electric Research & Testing Center
None None
None
None
None
Chairman of Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
Industrial
Chairman of PT. Walsin Nickel
Indonesia; Director
Precision
of Walsin
Technology Co., Ltd. and New Hono Investment
PTE. LTD.
None None
None
None
None
None None
None
None
None
21
Corporate Governance Report
Title
Nationality
Name
Gender
Date
appointed
Number of
shares
Percentage
Number of
shares
Percentage
Number of
shares
Percentage
Shares Held
Shares Held by Spouse
and Underage Children
Shares Held in Name of
Others
Head of Corporate
Governance
R.O.C. Hueiping Lo
Female
(Note 3)
January 22,
2021
0
0.00%
0
0.00%
0
0.00%
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: Ms. Hueiping Lo took office as Head of Corporate Governance effective from January 22, 2021.
22
Education/Work Experience
Other Current Positions at Other Companies
Manager who is Spouse or
Relative within the Second
Degree
Title Name Relationship
Shares
Acquired
by
Managers
under
Employee
Stock
Options
Note
(Note
2)
Master of Graduate Institute of Accounting, Soochow
University; former Vice President of Taiwan Cooperative
Securities, Associate Manager of KGI Commercial Bank, and
Associate Manager of China Development Financial Holding
Corporation.
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.
Director of Hannstar Display Corporation and PT.
Walsin Nickel Industrial Indonesia.
None None
None
None
None
None None
None
None
None
Director of New Hono Investment PTE. LTD.;
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.
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 1)
Pension (B)
Remuneration to Directors
(C)
(Note 2)
Business Expense (D)
(Note 3)
Company
All
Companies
In Financial
Statements
(Note 6)
Company
All
Companies
In Financial
Statements
(Note 6)
Company
All
Companies
In Financial
Statements
(Note 6)
Company
All
Companies
In Financial
Statements
(Note 6)
51,280,000
51,280,000
0
0
55,000,000
55,000,000
4,397,880
4,421,880
2,940,000
2,940,000
0
0
20,000,000
20,000,000
4,760,000
4,760,000
Title
Name
Chairman
Yu-Lon Chiao
Vice Chairman
Patricia Chiao
Director
Director
Director
Legal Person
Director and
Representative
Yu-Cheng Chiao
Yu-Heng Chiao
Wei-Shin Ma
Chin-Xin
Investment Co.,
Ltd
Representative:
Pei-Ming Chen
Director
Andrew Hsia
Independent
Director
Independent
Director
Independent
Director
Ming-Ling Hsueh
King-Ling Du
Shiang-Chung
Chen
Independent
Director
Fu-Hsiung Hu
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 services provided to all companies listed in the financial statements (such as acting as advisors of parent
companies/all companies /investees listed in the financial statements who are not an employee thereof) in the most recent year: 0
24
Ratio of total (A), (B), (C) and
(D) to after-tax loss (Note 7)
(%)
Salary, Bonus and Special
Allowance (E) (Note 4)
Remuneration Received as Employee
Pension (F)
Employee Bonus (G) (Note 5)
Total of (A), (B), (C), (D), (E),
(F) and (G) and its Ratio to
After-tax Income (Note 7)
(%)
Company
All
Companies
In Financial
Statements
Company
All
Companies
In Financial
Statements
(Note 6)
Company
All Companies
In Financial
Statements
(Note 6)
Company
Cash Bonus
Stock
Bonus
All Companies
In Financial Statements
(Note 6)
Cash Bonus Stock Bonus
Company
All
Companies
In Financial
Statements
Unit: NT$
Remuneration
from Re-
investments
other than
Subsidiaries
(Note 8)
110,677,880
110,701,880
0.7559
0.7560
0
0
0
0
0
0
0
0
110,677,880
110,701,880
243,278,328
0.7559
0.7560
27,700,000
27,700,000
0.1892
0.1892
0
0
0
0
0
0
0
0
27,700,000
27,700,000
0.1892
0.1892
832,300
25
Corporate Governance Report
Table of Remuneration Ranges
Range of Remuneration
Paid to Directors
NT$100,000,000
Total
Note 1: 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.
Yu-Lon Chiao, Patricia
Chiao
Yu-Lon Chiao, Patricia
Chiao
Yu-Lon Chiao, Patricia
Chiao, Wei-Shin Ma
Yu-Cheng Chiao
Yu-Heng Chiao
11
11
11
11
Note 2: Remunerations to Directors in 2021 approved by the Board of Directors have been listed.
Note 3: Refers to the expenses incurred by Directors in 2021 to perform relevant duties (including transportation, attendance
fees, special disbursements and various allowances).
Note 4: 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 2021. In addition, the
Company's remuneration to chauffeurs totaled NT$2,763,894/year.
Note 5: 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 2021; employee bonus for 2021 was approved by the
Board of Directors.
26
Note 6: Refers to the total pay to the Company's Directors from all companies in the consolidated statements (including the
Company).
Note 7: After-tax net income refers to the after-tax net income of the stand-alone financial statements in 2021, which
amounts to NT$14,642,629,000.
Note 8: 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 subsidiaries.
＊ 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) (Note 1)
Pension (B)
Bonus and Special Allowances (C)
(Note 2)
Title
Name
Company
All Companies
In Financial
Statements
(Note 4)
Company
All Companies
In Financial
Statements
(Note 4)
Company
All Companies
In Financial
Statements
(Note 4)
President & President of
Commerce & Real Estate BG
Fred Pan
C.C. Chen
Executive Vice President
President of Stainless Steel
BG
President of Insulated Wire
& Cable BG
President of Commodity BG Josh Chia
Kevin Niu
Jin-Renn Leu
22,357,657
22,357,657
1,285,255
1,285,255
45,371,697
45,395,697
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:
5
5
The most recent annual salary, managerial bonus, and severance pay of the presidents and vice presidents are presented above.
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 or above in 2021. In addition, the Company's remuneration to chauffeurs totaled NT$1,234,736/year.
Refers to employee bonuses (including stock and cash bonuses) approved by the Board of Directors for distribution to managers ranked vice president or above in 2021.
Discloses the total payment to manager’s ranked vice president 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 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 or above while serving as a Director, Supervisor or manager of an investee of the Company other than subsidiaries.
After-tax net income refers to the after-tax net income of the standalone financial statement in 2021, which amounts to NT$14,642,629,000.
＊
The remuneration content disclosed in this Table differs from the income concept of the Income Tax Act; therefore, this Table acts as a form of information disclosure and does
not serve for the purpose of taxation.
28
Employee Bonus (D) (Note 3)
Company
All Companies
In Financial
Statements (Note 4)
Cash Bonus
Stock
Bonus
Cash Bonus
Stock
Bonus
Total of (A), (B), (C) and (D) and Its Ratio to After-
tax Income (%) (Note 6)
Company
All Companies
In Financial Statements
(Note 4)
Unit: NT$
Remuneration from Re-investments
or Parent Company other than
Subsidiaries
(Note 5)
5,753,100
0
5,753,100
0
74,767,709
0.5106
74,791,709
0.5108
667,000
(3) Distribution of Employee Bonus to Managers
Title
Name
Stock bonus
Cash Bonus
Total
March 10, 2021
Percentage of the
Total to After-tax
Net Income (%)
President & President of
Commerce & Real Estate BG
Fred Pan
Executive Vice President &
Head of Finance Dept.
President of Stainless Steel
BG
President of Insulated Wire
& Cable BG
M
a
n
a
g
e
r
s
C.C. Chen
Kevin Niu
Jin-Renn Leu
President of Commodity BG
Josh Chia
Hueiping Lo (Note 1)
Head of Corporate
Governance
Head of Accounting Dept.
Richard Wu
0
NT$6,787,400 NT$6,787,400
0.0464
Note 1: Ms. Hueiping Lo took office as Head of Corporate Governance effective from January 22, 2021.
※ This Table lists managers in active duty as of the end of 2021 and their summarized 2021 employee bonus for managers
approved by the Board of Directors.
※ After-tax net income refers to the after-tax net income of the stand-alone financial statements in 2021.
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)
2021
2020
Company
0.95
0.51
Companies
in Consolidated
Financial Statements
0.95
0.51
Company
1.31
0.61
Companies
in Consolidated
Financial Statements
1.31
0.61
2. Description of the policy, standards and packages of remunerations, procedure for making such decision and
relation to business performance:
(1) 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 (such as serving on functional committees or
being invited to important business meetings), 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.
(2) In order to ensure that the performance of managers is closely linked to the Company's strategy and that their
overall compensation is competitive, the Company has established the Regulations for the Evaluation of
Managerial Performance and Compensation as the basis for performance evaluation and compensation of
managers. The aforementioned regulations include policies, systems, standards and structures for
performance evaluation and compensation of managers, which shall be reviewed by the Compensation
Committee and submitted to the Board of Directors for approval. Manager's remuneration includes salary
and bonus: their salary is based on the Company's business strategy and profitability by taking into account
the manager's professional ability, scope of responsibility and market competitiveness; for the bonus, the
Company will take into account the results of individual performance evaluation, the reasonableness of the
link between its operating performance and future risks. However, if there is a significant risk event that
affects the Company's reputation, internal mismanagement, personnel malpractice and other risk events
attributable to any manager, the bonus payable to him/her will be reduced or cancelled. The manager's
performance evaluation structure consists of "results evaluation" and "function evaluation". After setting
targets at the beginning of the year, the management performance review is conducted quarterly and the
performance evaluation is conducted semi-annually. Such evaluation is based on, among others, the
achievement of profit targets, the improvement of organizational decision-making and execution capabilities,
the training of key leaders, and the implementation of CSR and corporate governance. The Compensation
Committee will make a proposal for such bonus and the Board of Directors will approve the same.
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 8 meetings in 2021.
1. The attendance records for Directors are as follows:
Title
Name
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
Wei-Shin Ma
Representative of Chin-Xin
Investment Co., Ltd.: Pei-
Ming Chen
Ming-Ling Hsueh
King-Ling Du
Shiang-Chung Chen
Fu-Hsiung Hu
Attended in
Person
8
7
8
7
8
8
Attended by
Proxy
0
1
0
1
0
0
8
8
8
7
8
0
0
0
1
0
Attendance
Percentage (%)
Remarks
100%
88%
100%
88%
100%
100%
None
None
None
None
None
None
100%
None
100%
None
100%
None
88%
None
100%
None
2. The attendance records for Independent Directors are as follows:
19th Term
Ming-Ling
Hsueh
King-Ling Du
Shiang-Chung
Chen
Fu-Hsiung Hu
19th Term
Ming-Ling
Hsueh
King-Ling Du
Shiang-Chung
Chen
Fu-Hsiung Hu
5th Meeting
January 22, 2021
6th Meeting
February 26, 2021
7th Meeting
April 9, 2021
8st Meeting
May 7, 2021
: Attended in Person; ◎: Attended by Proxy
9th Meeting
June 25, 2021
10th Meeting
August 6, 2021
11th Meeting
November 5, 2021
12th Meeting
December 13, 2021
◎
31
Corporate Governance Report
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:
Resolution:
Proposal:
19th Term
5th Meeting
January 22,
2021
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Recusal:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
19th Term
6th Meeting
February 26,
2021
32
to
the Company and
Approval for the Company’s 2021
annual business plan.
Proposal passed.
Proposal for the annual remuneration
payable to the CPA firm and the
assessment of the independence and
suitability of the CPAs.
Proposal passed.
Proposal to approve the loan of funds
by Walsin International Investment Co.,
Ltd.
those
between the subsidiaries, in a total
amount of US$682 million and
RMB1,127 million respectively.
Proposal passed.
Proposal to acquire additional common
shares of TECO Electric & Machinery
Co., Ltd. for not more than NT$1.8
billion.
Proposal passed.
Proposal
review manager’s
performance as well as 2020 bonuses
and compensation.
Proposal passed.
Advice on Chairman’s and Vice
Chairman’s 2020 performance bonus.
Proposal passed.
Yu-Lon Chiao and Patricia Chiao
Advice on Company’s distributions for
2020
employee
remunerations.
Proposal passed.
Proposal to prepare the Company's
management's reports on the internal
control system for 2020.
Proposal passed.
Proposal to lift the non-competition
ban for the Company’s Directors.
director
and
to
Independent
Directors’
Opinion(s)
December 31, 2021
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
None
None
None
None
None
None
None
None
None
None
None
None
Board of
Directors
Meeting
Content of Proposal and Resolution
Independent
Directors’
Opinion(s)
December 31, 2021
Independent
Directors
with
Recorded or
Written
Opposing or
Reserved
Opinion(s)
Company’s
Handling of
Independent
Directors’
Opinion(s)
Resolution:
Recusal:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
19th Term
7th Meeting
April 9, 2021
Resolution:
Proposal:
19th Term
8th Meeting
May 7, 2021
Resolution:
Proposal:
Resolution:
for Walsin
International
lend the
Proposal passed.
Yu-Lon Chiao and Wei-Shin Ma
Proposal for Walsin Lihwa Holdings
Limited to inject its capital into Walsin
International Investment Co., Ltd. in
the amount of US$45 million.
Proposal passed.
Proposal
Investment Co., Ltd. to
Company US$45 million.
Proposal passed.
Proposal to issue domestic secured
straight corporate bonds, in order to
enhance the medium and long-term
working capital and strengthen the
financial structure of the Company.
Proposal passed.
Proposal for Walsin Lihwa Holdings
Limited to transfer its shares in Borrego
Solar Systems, Inc. to the Company and
to carry out a capital reduction in the
same amount.
Proposal passed.
Proposal for Walsin Specialty Steel Co.,
Ltd. to transfer its shares in Walsin
Precision Technology Sdn. Bhd. to the
Company and to carry out a capital
reduction in the same amount.
Proposal passed.
Proposal for Jiangying Walsin Steel
Cable Co., Ltd. to transfer its real
property to Jiangyin Walsin Specialty
Alloy Materials Co. Ltd.
Proposal passed.
Proposal to update the investment plan
for and amount of Yantai Walsin's hot
rolling production line.
Proposal passed.
Proposal for Yanshui Plant to invest in
and construct the equipment for acid
recycling and disposal.
Proposal passed.
Proposal to amend the Company's
internal control system of financing
cycle - internal control principles of
stock services.
Proposal passed.
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
Independent
Directors’
Opinion(s)
December 31, 2021
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
None
None
None
None
None
None
Corporate Governance Report
Board of
Directors
Meeting
Content of Proposal and Resolution
Proposal to postpone the Company's
2021 annual general meeting.
Proposal passed.
Proposal for Changshu Walsin Specialty
Steel Co., Ltd. to invest in and expand
the acid-washing production line and
equipment.
Proposal passed.
Proposal to acquire 100% shares in
New Hono Investment Pte. Ltd. , in
order to acquire 42% shares in PT
Walsin Nickel Industrial Indonesia, a
subsidiary of the Company.
Proposal passed.
Proposal to issue domestic unsecured
straight corporate bonds to repay
borrowings.
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 PT Walsin Nickel
Industrial Indonesia in the form of a
US$250 million non-revolving facility
and a US$70 million revolving facility.
Proposal passed.
Proposal to establish a Nomination
Committee under
the Board of
Directors, to establish the Nomination
Committee Charter, and to appoint the
Nomination
members
Committee
in
term
accordance with Article 4 of such
Charter.
Proposal passed.
of
for the
first
the
Proposal:
Resolution:
Proposal:
19th Term
9thMeeting
June 25,
2021
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
19th Term
10th
Meeting
August 6,
2021
Resolution:
Proposal:
Resolution:
Proposal:
34
Walsin Lihwa Holdings Limited, a
subsidiary of the Company, intends to
discontinue the transfer of its equity
interest in Borrego Solar Systems, Inc.
to the Company as previously approved
the Board of Directors and to carry out
the same amount of capital reduction.
None
None
None
Board of
Directors
Meeting
Content of Proposal and Resolution
Resolution: Proposal passed by all of the directors
Independent
Directors’
Opinion(s)
December 31, 2021
Independent
Directors
with
Recorded or
Written
Opposing or
Reserved
Opinion(s)
Company’s
Handling of
Independent
Directors’
Opinion(s)
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
19th Term
11th
Meeting
November
5, 2021
19th Term
12th
Meeting
December
13, 2021
a
line
and
present.
Proposal to formulate the Company's
2022 Audit Plan.
Proposal passed.
Proposal to amend the Company's
internal control system.
Proposal passed.
Proposal to update the Company's
investment plan and
investment
amount for the establishment of a low-
voltage construction wire and cable
production
three-
dimensional automatic warehouse at
the Yangmei Plant.
Proposal passed.
Proposal to update the investment plan
and
investment amount of Yantai
Walsin's cold-refined bar plant.
Proposal passed.
Proposal to apply for opening an
escrow account and appoint OCBC
Bank as the escrow agent.
Proposal passed.
Proposal to approve 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.
Proposal to conduct a cash capital
increase by issuing new shares.
Proposal passed.
Proposal to approve the loan of funds
from Walsin International Investment
Co., Ltd. to PT Walsin Nickel Industrial
Indonesia in the form of a US$250
million non-revolving facility.
Proposal passed.
Proposal to provide endorsement and
guarantee
for PT Walsin Nickel
Industrial Indonesia.
Proposal passed.
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
(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
35
Corporate Governance Report
2. Director recusals due to conflicts of interests totaled 2 times.
No.
1
2
Term/Meeting
Date
19th Term
5th Meeting
January 22, 2021
19th Term
6th Meeting
February 26, 2021
Name(s) of
Directors
Yu-Lon Chiao,
Patricia Chiao
Yu-Lon Chiao,
Wei-Shin Ma
Proposal
Advice on Chairman’s and Vice
Chairman’s 2020 performance
bonus
lift
Proposal
competition
ban
Company’s Directors
non-
the
the
for
to
Reason for
Recusal
Personally
interested
Personally
interested
December 31, 2021
Participated in Vote
or Not
Recused as
provided by law
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
2021/01/01
Once every year
~
2021/12/31
Board
Directors
of
Internal self-
evaluation
of the Board
of Directors
2021/01/01
Once every year
~
2021/12/31
Functional
Committees
(including
Compensatio
n Committee,
Audit
Committee,
Sustainable
Development
Committee,
and
Nomination
Committee)
Internal self-
evaluation
of
functional
committees
the
1.
2.
Involvement in the operation of the
Company.
Improve
decisions.
the quality of Board
3. Composition and structure of the
board of directors.
4.
Selection and Continuing Education
of Directors.
5.
Internal control.
1.
Involvement in the operation of the
Company.
2. Awareness of responsibilities of the
functional committees.
3.
Improve the quality of decision
making in the functional committees.
4. Composition
selection
functional committee members.
and
of
5.
Internal control.
2021/01/01
Once every year
~
Each director
2021/12/31
1. Understanding of the company's
objectives and tasks.
2. Awareness
of
directors'
Self or peer
performanc
e evaluation
of
board
members
3.
4.
responsibilities.
Involvement in the operation of the
Company.
Internal relationship management
and communication.
5. Professional
and
continuing
education of directors.
6.
Internal control.
every
3
Once
years
2020/10/01
~
2021/09/30
Board
of
Directors and
each
functional
committee
Evaluation
by
external
organization
an
Eight aspect of evaluation of the Board of
guidance,
composition,
Directors:
authorization,
supervision,
communication, self-regulation, internal
control, and risk management.
36
4. Evaluation of achievement of enhancing the Board’s performance (e.g. establishing an Audit Committee and
increasing information transparency):
(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 Managerial Officers", "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", and "Practical Guidelines for
Corporate Social Responsibility" 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 2021.
(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 January 11, 2022. 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:
A. Regarding external evaluation:
In 2018, the Company appointed Taiwan Corporate Governance Association ("TCGA"), an independent
third party with which the Company has no business dealings, to evaluate the effectiveness of its Board
of Directors. The evaluation was conducted by means of questionnaires and on-site interviews on eight
major aspects of the board of directors, including composition, guidance, authorization, supervision,
communication and self-regulation, as well as internal control and risk management. In 2021, the
Company again appointed TCGA to conduct an evaluation of the effectiveness of the Board of Directors
for the period from October 1, 2020 to September 30, 2020. Through the review of the professional
organization and the guidance of and communication with the evaluation members, the Company
obtained professional and objective evaluation results and recommendations. The results of the
evaluation were reported to the Board of Directors on January 11, 2022 and later disclosed on the
Company's official website.
The measures in response to the recommendations of the external evaluation institution in 2021 are as
follows:
Recommendations of External Evaluation Institution
Measures
Strengthen
the
whistleblower mechanism
Set up a reporting channel that
Independent Directors can receive
the complaints simultaneously, or
The
Independent Directors will
simultaneously receive complaints
from the complaint mailbox set up
37
Corporate Governance Report
Recommendations of External Evaluation Institution
Measures
engage an external agency to serve
acceptance
as
window.
complaint
a
by the audit unit to facilitate direct
reporting by complainants or
whistle blowers.
Continue to improve the
internal control system
A comprehensive review of the
Company's overall internal control
mechanism shall be conducted
every five years.
in
of
The Company's Internal Control
System has specified that the
design and implementation of the
internal control system will be
adjusted in a timely manner in
response
the
to changes
environment, and that the system
will be adopted annually. For the
purpose
continuous
improvement, it should be added
in the Directors' self-assessment
questionnaire that the Company
will
the
effectiveness of the design and
internal
implementation of the
control
issue a
system and
statement on the internal control
system after the approval of the
Board of Directors.
annually
review
Improve the quality of
financial reporting audits
The Company should obtain AQI
from the certified
information
public accountants
in advance
when selecting them for evaluation
purposes, so as to evaluate their
commitment
ability
objectively to enhance the quality
of the audit.
and
The Company evaluates
the
independence and suitability of the
certified public accountants on an
annual basis. Starting from 2022,
the Company will further refer to
the AQI disclosure
framework
released by the FSC on August 19,
2021 as a reference
for the
evaluation.
B. Annual internal evaluation for 2021:
The 2021 Board of Directors' performance self-evaluation results go as follows:
(a) Board of Directors' overall average score 4.85 points (full score: 5 points)
(b) Board members' overall average score 4.94 points (full score: 5 points).
In December 2021, 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 2021. 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 2021, both of which were consolidated and reported to the Compensation Committee on
January 7, 2022 and the Board of Directors' meeting on January 11, 2022, the details of which were disclosed
on the Company's website.
(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
38
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.
(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 (as of the date of publication hereof, the results of the 2021 Annual Corporate
Governance Review have not yet been published). The Company also received the Top 50 Sustainable
Business Award for the fourth consecutive year and the Platinum Corporate Sustainability Report Award for
the second time. 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.
The Company is committed to enhancing the transparency of information. In addition to announcing
financial information in accordance with laws and regulations, the Company also holds regular investor
conferences four times a year. Taking the initiative to solicit a credit rating in 2021, on August 6, 2021, the
Company was granted a long-term credit rating of 'twA-' and a short-term credit rating of 'twA-2' with a
'stable' outlook by Taiwan Ratings for the first time. The Company's financial structure was certified by an
external organization, and the disclosure of information to stakeholders was also enhanced through the
external release of credit ratings.
(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. The first Nomination Committee was formally
established on August 6, 2021, with the Chairman and all Independent Directors acting as its members. These
four 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.
39
Corporate Governance Report
(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 second term started on May 29, 2020 and ended on May 28, 2023. The meetings
were held 9 times in 2021, and the attendance of the independent directors in 2021 is as follows:
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
9
9
8
9
0
0
1
0
100%
100%
89%
100%
40
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:
December 31, 2021
Audit
Committee
Meeting
Number and
Date
Board of
Directors
Meeting
Number and
Date
Proposals and Resolutions
Proposal:
Approval for the Company’s 2021
annual business plan.
Resolution: Proposal passed.
Independent
Directors'
Dissenting
Opinions,
Reservations or
Significant
Recommendations
None
2nd Term
6th Meeting
January 13,
2021
19th Term
5th Meeting
January 22,
2021
2nd Term
7th Meeting
February 19,
2021
19th Term
6th Meeting
February 26,
2021
None
None
None
None
None
for
the
Proposal:
Proposal
annual
remuneration payable to the CPA
firm and the assessment of the
independence and suitability of the
CPAs.
Resolution: Proposal passed.
Proposal:
Proposal to approve the loan of
International
funds by Walsin
Investment Co., Ltd. to the Company
and those between the subsidiaries,
in a total amount of US$682 million
and RMB1,127 million respectively.
Proposal passed.
Proposal
to acquire additional
common shares of TECO Electric &
Machinery Co., Ltd. for not more
than NT$1.8 billion.
Proposal passed.
Resolution:
Proposal:
Resolution:
Proposal: Approval for the Company’s 2020
financial
report
and
business
statements.
Resolution: Proposal passed.
Proposal:
Approval for the affiliates’ 2020
consolidated business report and
financial statements.
Resolution: Proposal passed.
Proposal:
Approval for the Company’s 2020
profit distribution plan.
None
Resolution: Proposal passed.
Proposal:
Approval for the Company’s 2020
statement on
control
system.
internal
None
Resolution: Proposal passed.
Proposal:
Proposal to lift the non-competition
ban for the Company’s Directors
under Article 209 of the Company
Act.
Proposal passed.
None
Proposal for Walsin Lihwa Holdings
Limited to inject
its capital into
Walsin International Investment Co.,
Ltd. in the amount of US$45 million.
Proposal passed.
Proposal for Walsin International
Investment Co., Ltd. to lend the
Company US$45 million.
Proposal passed.
None
None
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Company’s
Handling of Audit
Committee
Member’s
Opinion
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
proposal
the
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
proposal
the
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
proposal
the
unanimously.
All of the Directors
present approved
proposal
the
unanimously.
41
Corporate Governance Report
Audit
Committee
Meeting
Number and
Date
Board of
Directors
Meeting
Number and
Date
Proposals and Resolutions
Proposal to issue domestic secured
straight corporate bonds, in order to
augment the Company's mid- to
capital and
long-term working
strengthen its financial structure.
Proposal passed.
Proposal for Walsin Lihwa Holdings
Limited to transfer all of its shares in
Borrego Solar System, Inc. to the
Company at a fair price and to carry
out a capital reduction in the same
amount.
Proposal passed.
Proposal for Walsin Specialty Steel
Co., Ltd. to transfer all of its shares in
Walsin Precision Technology Sdn.
Bhd. to the Company at a fair price
and to carry out a capital reduction
in the same amount.
Proposal passed.
Proposal for Jiangying Walsin Steel
Cable Co., Ltd., one of the Company's
subsidiaries, to sell all of its real
property to Jiangyin Walsin Specialty
Alloy Materials Co. Ltd., one of the
Company's
a
transaction price of RMB62.57
million.
Proposal passed.
Proposal to update the investment
plan for and amount of the hot
rolling production
line of Yantai
Walsin Stainless Steel Co., Ltd.
Proposal passed.
subsidiaries,
at
should
include
Auditor
the
implementation of this investment
project in the annual audit plan.
Proposal for Yanshui Plant to invest
in and construct the equipment for
acid recycling and disposal.
Proposal passed.
Proposal to amend the Company's
internal control system of financing
cycle - internal control principles of
stock services.
Proposal passed.
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Ancillary
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
2nd Term
7th Meeting
February 19,
2021
19th Term
6th Meeting
February 26,
2021
2nd Term
8th Meeting
April 7, 2021
19th Term
7th Meeting
April 9, 2021
2nd Term
9th Meeting
April 26, 2021
19th Term
8th Meeting
May 7, 2021
42
Independent
Directors'
Dissenting
Opinions,
Reservations or
Significant
Recommendations
None
Company’s
Handling of Audit
Committee
Member’s
Opinion
All of the Directors
present approved
proposal
the
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
None
None
None
None
None
None
Independent
Directors'
Dissenting
Opinions,
Reservations or
Significant
Recommendations
None
Company’s
Handling of Audit
Committee
Member’s
Opinion
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
proposal
the
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
Audit
Committee
Meeting
Number and
Date
Board of
Directors
Meeting
Number and
Date
Proposal:
2nd Term
10th Meeting
June 25, 2021
19th Term
9th Meeting
June 25,
2021
Resolution:
Proposal:
2nd Term
11th Meeting
July 28, 2021
19th Term
10th Meeting
August 6,
2021
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposals and Resolutions
to
to
issue
expand
acquire
New
100%
Proposal
shareholding
Hono
in
Investment Pte. Ltd. in order to
in PT
acquire 42% shareholding
Walsin Nickel Industrial Indonesia,
one of the Company's subsidiaries.
Proposal passed.
for Changshu Walsin
Proposal
Specialty Steel Co., Ltd. to invest in
and
acid-washing
the
production line and equipment.
Proposal passed.
Proposal
domestic
unsecured straight corporate bonds
to repay borrowings.
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 PT
Walsin Nickel Industrial Indonesia in
the form of a US$250 million non-
revolving facility and a US$70 million
revolving facility.
Proposal passed.
Proposal
formulate
to
Company's 2022 Audit Plan.
Proposal passed.
the
Proposal:
Resolution:
Proposal to amend the Company's
internal control system.
Proposal passed.
None
2nd Term
13th Meeting
October 25,
2021
19th Term
11th Meeting
November 5,
2021
Proposal:
Resolution:
Proposal:
Resolution:
Proposal to update the Company's
investment plan and
investment
amount for the establishment of a
low-voltage construction wire and
cable production line and a three-
dimensional automatic warehouse
at the Yangmei Plant.
Proposal passed with amendments
to certain wording.
Proposal to update the investment
plan and
investment amount of
Yantai Walsin's cold-refined bar
plant.
Proposal passed with amendments
to certain wording.
None
None
None
None
None
None
None
All of the Directors
present approved
the
proposal
unanimously.
43
Corporate Governance Report
Audit
Committee
Meeting
Number and
Date
Board of
Directors
Meeting
Number and
Date
2nd Term
13th Meeting
October
2021
25,
19th Term
11th Meeting
November 5,
2021
2nd Term
14th Meeting
December 13,
2021
19th Term
12th Meeting
December
13, 2021
Proposals and Resolutions
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal:
Resolution:
Proposal to approve the new loan of
funds from Walsin Info-Electric Inc.
to the Company in the form of a
non-revolving
NT$130 million
facility.
Proposal passed.
Proposal to conduct a cash capital
increase by issuing new shares.
Proposal passed.
from Walsin
Proposal to approve the loan of
funds
International
Investment Co., Ltd. to PT Walsin
Nickel Industrial Indonesia in the
form of a US$250 million non-
revolving facility.
Proposal passed.
Proposal to provide endorsement
and guarantee for PT Walsin Nickel
Industrial Indonesia
Proposal passed.
Independent
Directors'
Dissenting
Opinions,
Reservations or
Significant
Recommendations
None
None
None
None
Company’s
Handling of Audit
Committee
Member’s
Opinion
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
proposal
the
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
All of the Directors
present approved
the
proposal
unanimously.
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: None.
(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.
B. Summary of communications between independent directors and CPAs for 2021:
Independent directors have good communication with CPAs individually.
Directors’
Recommendation
None.
Date
Communication Highlights
2021/02/19
Audit
Committee
Meeting
The CPAs have provided a
description of the key audits of
the stand-alone and
consolidated financial
statements for the year 2020
and the results of the audit.
Execution Result
The stand-alone and consolidated
financial statements for the year
2020 were approved by the Audit
Committee and submitted for
discussion at the 6th meeting of
the Board of Directors of 19th
term on February 26, 2021.
44
Directors’
Recommendation
None.
Date
Communication Highlights
2021/07/28
Audit
Committee
Meeting
The CPAs provide an
explanation of the audit results
of the consolidated financial
statements for the second
quarter of 2021.
2021/12/13
Individual
Communication
Meeting
The CPAs explained the scope,
method and discovery of the
annual audit for 2021 and
discussed with the Audit
Committee members on the
key audit matters.
We asked our CPAs to
pay particular
attention to the
valuation of assets,
significant investment
transactions, and
internal control and
compliance with laws
and regulations of our
offshore subsidiaries.
Execution Result
The consolidated financial
statements for the second
quarter of 2021 were approved by
the Audit Committee and
reported to the 10th meeting of
the Board of Directors of 19th
term on August 6, 2021.
1. Key audit matters for the 2021
financial statements were
confirmed.
2. The engagement and
assessment of the CPAs was
submitted to the 15th meeting
of the Audit Committee of
second term on January 7,
2022 for discussion.
C. Summary of communications between independent directors and the chief internal auditor for 2021:
Date
Key Points of
Independent Directors’
Follow-Ups and Results
Communications
Report on audit
implementation in the 4th
quarter of 2020.
2021/02/19
Audit
Committee
Meeting
Update on the investment
project for and investment
amount of Yantai Plant.
2021/07/28
Audit
Committee
Meeting
Report on audit
implementation in the 1st
quarter of 2021.
2021/04/26
Audit
Committee
Meeting
The chief audit executive
forwarded the improvement
suggestions given by the
Independent Directors to
President of the Stainless Steel
Business Group for reference
for the purpose of
improvement.
The implementation of Yantai
plant investment project has
been included in the 2021
audit plan.
President has discussed with
the supervisors of the
production and environmental
safety units in the plants to
review the causes of
occupational accidents over
the years and to summarize
the improvement measures.
Advice
Most of the environmental
safety issues which the
Company was punished for
or instructed to improve by
the competent authorities
were mostly attributable to
the Stainless Steel Business
Group; therefore, we asked
President of the business
group to pay attention to
the improvement on these
issues.
The Auditing Office was
requested to include the
implementation of Yantai
Plant investment project in
its annual audit plan.
1. External industrial
safety experts
reminded that
industrial safety
needs to be
strengthened in
Yanshui and Taichung
Plants; therefore, the
responsible
supervisors should
pay attention to it.
2. Please make sure the
employees
implement SOPs and
the outsourcing units
45
Corporate Governance Report
Date
Key Points of
Independent Directors’
Follow-Ups and Results
Communications
Advice
should monitor the
construction of
contractors.
Report on audit
implementation in the 2nd
quarter of 2021.
Nil.
2021/07/28
Audit
Committee
Meeting
1. Report on audit
1. Nil.
implementation in the
3rd quarter of 2021.
The report on audit
implementation for the
second quarter of 2021 has
been passed by the Audit
Committee and reported to
the Board of Directors.
1. Report on audit
implementation in the
3rd quarter of 2021 has
been passed by the Audit
Committee and reported
to the Board of
Directors.
2. Please include the
2. 2022 annual audit plan
2. Discussion of 2022
annual audit plan.
2021/10/25
Audit
Committee
Meeting
meeting operation of
the Nominating
Committee in the
audit plan.
has included the meeting
operation of the
Nominating Committee
and been passed by the
Audit Committee and
submitted to the Board
of Directors for
discussion.
3. The Procedures for
Communications
between Independent
Directors and the Chief
Audit Executive have
been passed by the Audit
Committee and
submitted to the Board
of Directors for
discussion.
1. Nil.
2. Nil.
3. A compliant mailbox has
been set up so that the
Independent Directors
may receive complaints
instantaneously.
3. Nil.
3. Formulation of the
Procedures for
Communications
between Independent
Directors and the Chief
Audit Executive.
2021/12/13
Individual
Communication
Meeting
1. Major work results in
1. Nil.
2021.
2. Work objectives and key
2. Nil.
points for 2022.
3. The recommendation
3. Please set up a
made by the Taiwan
Corporate Governance
Association in its report
on the evaluation of the
performance of the
Board of Directors of the
Company on November
30, 2021.
compliant mailbox so
that the Independent
Directors may receive
complaints
instantaneously.
46
(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?
(2) Has the company had a
Yes
list of major
shareholders who
actually control the
company or a list of
ultimate controller of
such shareholders?
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 2021 and were disclosed on the
Company's website.
https://www.walsin.com/wp-
content/uploads/2021/08/rule13TC_20210416.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) The Company periodically discloses the list of ultimate
controllers of its principal shareholders pursuant to the
laws and regulations.
(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?
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) Has the company set
Yes
(4)
internal regulations that
prohibit the company's
personnel from taking
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
47
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)
advantage of
information that has not
been disclosed to the
public to purchase or sell
securities?
accuracy of 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 2021, 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 and included an enhanced education
regarding the period of prohibited trading by directors
prior to the publication of financial statements on
December 21, 2021 pursuant to a letter from the TPEx;
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
Directors devised a
policy and concrete
management objectives
Yes
(1)
In accordance with Article 20 of the Company's
Corporate Governance Best Practice Principles and the
"Principles of Election of Board Members and
Managers and Guidelines for Continuing Education and
In line with the
Corporate
Governance Best-
Practice Principles
for TWSE- and
48
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
for a more diverse
composition of the
Board? If so, has the plan
been implemented?
Succession Planning" established by the Company in
November 2021, the Board of Directors will implement
the objectives of diversity and independence in terms
of expertise, experience and gender required for Board
members, and will continue to invite appropriate
candidates to join the Board of Directors in accordance
with the above objectives in order to strengthen the
balance of the Board of Directors in response to the
Company's development strategies and changes in the
internal and external environment. In order to achieve
the desired objectives of corporate governance, the
Board of Directors of the Company is composed of
members from the management team, managers of
relevant industries and professionals with financial,
business and accounting backgrounds, who effectively
perform the duties of Board members with different
fields and work backgrounds. These duties include
establishing and maintaining the Company's vision and
values, assisting in promoting corporate governance
and strengthening management, overseeing and
evaluating the implementation of management policies
and operational plans, and being responsible for the
Company's overall economic, social, and environmental
operations to enhance corporate governance and
corporate value from the perspective of stakeholders.
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, 5 are aged 65 years and older, 5 are aged 55
to 64, and 1 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%).
The Company has built its strength by being focused
on the wire and cable, stainless steel, commodity, and
commercial real estate fields and become a model of
business excellence moving towards the
manufacturing service industry. If we look at the list of
directors of the Company, Yu-Lon Chiao, Chairman, has
been working in the business field of the Company for
Deviations from
Corporate
Governance Best-
Practice Principles
for TWSE-/ TPEx-
listed Companies
and Reason(s)
TPEx-listed
Companies.
49
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)
a long time and has a good understanding of the
operation and development of the industry, with an
open-minded leadership style that encourages
adoption of suggestions; Director Yu-Cheng Chiao and
Director Yu-Heng Chiao have joined the management
team of the Company and therefore are familiar with
the organization and business operation of the
Company and are good at operation management;
Andrew Hsia, Director, comes from a diplomatic
background with an international perspective and
therefore has a good grasp of the conditions of the
Southeast Asian market and can fully assist the
Company in making relevant investment decisions;
Director Pei-Ming Chen's work experience is focused
on semiconductor business, and he has participated in
many mergers and acquisitions and international
business integration and therefore has operational
management experience and expertise. As for the two
female Directors, Director Patricia Chiao specializes in
operational management, investment judgment and
human resources, while Director Ma Wei-Shin
specializes in technology leadership, operational
judgment and operational management. The
Company's Independent Directors have industry
knowledge and an international market perspective,
with Independent Director Ming-Ling Hsueh
specializing in finance, accounting and corporate
governance, Independent Director Fu-Hsiung Hu
having expertise and experience in business
administration, finance and securities, and credit
information, Independent Director King-Ling Du having
extensive steel expertise and being familiar with the
development and management of the stainless steel
industry, and Independent Director Shiang-Chung Chen
specializing in intelligent technology leadership with a
good grasp of the development of Industry 4.0.
The Company attaches importance to the diversity of
the composition of the Board of Directors. The target
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
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)
Yes
(2)
(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?
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.
Diversification of the Board of Directors' members has
been implemented as shown in Note 2.
In addition to the committee established according to
the laws, the Company further set up the Sustainable
Development Committee and the Nomination
Committee.
1. 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 acts as the convener, and
Vice-Chairman and all Independent Directors act as
the members, and under which ethical management,
environmental safety and health management,
green operations, customer service and suppliers
management and promotion and employee relations
and social care promotion centers were established.
The Sustainable Development Committee reviews
the annual plans of each promotion center, monitors
and tracks the implementation results of each
promotion center, and revises its charter.
2. The Nomination Committee was established by the
resolution of the 10th Board of Directors Meeting of
the 19th Term on August 6, 2021, with Independent
Director Fu-Hsiung Hu as the convener and the
Chairman and the remaining three independent
directors as members. The duties of the Nomination
Committee include setting standards for the
diversity of expertise, experience, gender and
independence required of Board members, and
identifying, reviewing and nominating candidates for
election as directors.
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)
(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?
(3) In order to improve our corporate governance, the
Company's Regulations for the Board of Directors'
Performance Appraisal stipulates that the Board of
Directors of the Company shall conduct a performance
evaluation at least once a year using questionnaires
for self-evaluation, that the performance evaluation of
the Board of Directors shall be conducted at least once
every three years by an external professional and
independent organization or a team of external
experts and scholars, and that the performance
evaluation of the current year shall be conducted at
the end of the year, so as to measure the directors'
strategic direction in leading the Company and to
oversee the operation of the Company's management
in order to provide board performance and increase
long-term shareholder value.
The Company engaged the Taiwan Corporate
Governance Association in September 2021 for the
second time 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 11, 2022, and used as a
reference in the compensation of individual directors
and nominations for reappointment.
The Company conducted its own internal evaluation
for 2021 in December 2021 and reported to the Board
of Directors on January 11, 2022. The result has been
published on the Company's website, and the results
of these evaluations will be used as a reference in
individual directors' compensation and nominations
for reappointment, for the purpose of continuous
refinement and optimization of the functions of the
Board of Directors.(Note 3)
(4) Has the company
Yes
(4) Before we appoint a new CPA annually, its
periodically evaluated
the level of
independence of the
CPA?
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
52
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- and
TPEx-listed
Companies.
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
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.
4. Has the TWSE- or TPEx-listed
Yes
1. The Company appointed a Head of Corporate
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.)?
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.
2. Vice President of the Company, Hueiping Lo, is currently
the Head of Corporate Governance. She 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.
3. On June 12, 2019, the Company's Board of Directors also
resolved to approve the "Standard Operating Procedures
for Handling Directors' Requests" (which was lastly
updated on April 9, 2021) pursuant to the rules, through
the establishment of which the Directors have
appropriate operating procedures for handling
information necessary for the performance of their
business.
4. The business execution for the year 2021 are explained
as follows:
i.
ii.
To manage the meetings of the Board of Directors
and related committees, and to strengthen the
procedures of meetings and recusal of interests.
To provide the directors with the information
necessary for the execution of their business within
the statutory period, to remind the directors of the
relevant laws and regulations that they should
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)
comply with in the execution of their business or
after the resolution of the board of directors, and to
follow up on the situation and progress of the
recommendations or opinions of the directors after
the meeting.
To revise and amend the important regulations of
the Company by adapting to the latest laws and
regulations related to the Company's business field
and corporate governance, including amendments to
the Company's Articles of Incorporation, Board of
Directors Meeting Regulations, Corporate
Governance Best Practice Principles, Standard
Operating Procedures for Processing Requests Made
by the Directors of the Board, Regulations Governing
Board Performance Evaluation, Procedures for
Ethical Management and Guidelines for Conduct,
etc. and formulation of the Nomination Committee
Charter.
Based on the characteristics of the industry where
the Company is operating, to handle matters related
to directors' further education and regularly forward
information on relevant external further education
programs to assist directors in implementing the
diversified education mechanism. (Note 5)
To provide directors with the necessary corporate
information, maintain smooth communication
between directors and business executives, and
assist in arranging communication meetings
between independent directors and the chief audit
executive and accountants to facilitate the execution
of business by independent directors.
To conduct performance evaluations of the Board of
Directors and functional committees.
To conduct the 2021 external performance
evaluation of the Board of Directors.
iii.
iv.
v.
vi.
vii.
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
Yes
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
In line with the
Corporate
Governance Best-
Practice Principles
for TWSE- and
TPEx-listed
Companies.
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)
as appropriately responded
to important CSR issues that
interested parties are
concerned about?
6. Has the company appointed
a professional shareholders
service agency to handle
affairs related to the
Shareholders Meeting?
concerned about, so that appropriate responses can be
made.
2. The Company has amended in 2020 the "Procedures for
Interested Parties to Submit Complaints and
Recommendations", through which interested parties
can communicate with the Company’s supervisory unit
directly, propose constructive advice and file complaints.
3. 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.
4. 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
2021 have been reported to the Board of Directors at the
board meeting on November 5, 2021 Details of both
communications were disclosed on the Company's website:
https://www.walsin.com/wp-
content/uploads/2021/12/110Stakeholder-
Engagement_2021.pdf.pdf
No The Company has handled such affairs by itself since March
1993.
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.
55
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- and
TPEx-listed
Companies.
Corporate Governance Report
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
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,
webcasting investor’s
conferences, etc.)?
(1) Please visit Walsin Lihwa Corporation's Chinese/English
Yes
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. 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 immediately be made public.
The Company's website regularly discloses major
announcements, transactions with key stakeholders
and investors conferences at:
https://www.walsin.com/investors/shareholder/#pills-
important-announcement
(3) Does the Company
(3) 1.
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?
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.
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.
56
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- and
TPEx-listed
Companies.
Actual Governance (Note 1)
Appraisal Items
Yes No
Summary Description
8. Has the company had other
Yes
1. Refer to "III. Corporate Governance Report, 4. Corporate
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)?
Governance Operations, (6) Promotion and
Implementation of Sustainable Development and
differences from the Sustainable Development Best
Practice Principles for TWSE/TPEx Listed Companies and
the reasons therefor" and "(7) Performance of ethical
operations and differences from the Sustainable
Development Best Practice Principles for TWSE/TPEx
Listed Companies and the reasons therefor" of this year's
Annual Report for information concerning employee
rights and interests, employee care, investor relations,
supplier relations, rights of interested parties, and the
implementation of the customer policies.
2. Please refer to "III. Corporate Governance Report, 4.
Corporate Governance Operations, (9) Other important
information helpful for improving understanding of the
governance of the company" and "VII. Review and
Analysis of Financial Position and Financial Performance
and Risk Issues, 6. Risk Analysis and Assessment for the
Latest Year and up to the Date of Printing of the Annual
Report" for the information regarding the
implementation of directors' continuing education, risk
management policies and risk measurement standards.
3. The Company's purchase of liability insurance for
directors has been disclosed to the Market Observation
Post System.
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. Improvement Priorities and Measures: The Company established a Nomination Committee in 2021 and established the
"Guidelines for the Election of Members of the Board of Directors and Managerial Officers and for Further Training and
Succession Planning", which specifies the diversity policy and independence standards for directors, and the Company
will explore possible candidates for directors based on the criteria of these guidelines and review them before the next
election of directors.
Note 1: The Company shall provide explanations in the summary description box, regardless of whether actual governance is
ticked "Yes" or "No."
Note 2: Diversification of the Board of Directors' members has been implemented as follows.
57
Corporate Governance Report
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
Diversification items
m
a
n
a
g
e
m
e
n
t
i
A
d
m
n
i
s
t
r
a
t
i
v
e
M
a
k
i
n
g
i
L
e
a
d
e
r
s
h
p
a
n
d
D
e
c
i
s
i
o
n
-
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
I
n
d
u
s
t
r
y
k
n
o
w
e
d
g
e
l
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
✓
l
a
w
F
i
n
a
n
c
e
/
a
c
c
o
u
n
t
i
n
g
a
n
d
✓
✓
✓
✓
✓
✓
✓
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
✓
✓
✓
✓
✓
✓
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
✓
✓
✓
P
r
o
c
u
r
e
m
e
n
t
✓
✓
✓
C
o
m
m
e
r
c
e
a
n
d
T
r
a
d
e
I
n
t
e
r
n
a
t
i
o
n
a
l
✓
✓
✓
✓
✓
I
n
f
o
r
m
a
t
i
o
n
t
e
c
h
n
o
o
g
y
l
✓
✓
✓
✓
✓
✓
✓
Note 3: 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 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 commercial relations with the
Company, its directors and managers, which affects the CPA's independence.
3. 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.
4. At the time of the audit, no family member of the CPA held any position as a director or manager
of the Company or that which had any direct and material influence on the audit.
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. 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.
7. The CPA's audit
regarding
independence/conflicts of interests without any violation of the independence or any unsettled
the necessary procedures
implemented
team has
Results
Compliant with
Independence?
True
True
True
True
True
True
True
Yes
Yes
Yes
Yes
Yes
Yes
Yes
58
Appraisal Items
Results
Compliant with
Independence?
conflict of interests.
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: The further education received by Independent Directors and other Directors is disclosed in " III. Corporate
Governance Report, 4. Corporate Governance Operations, (IX) Other important information helpful for improving
understanding of the governance of the company" in this annual report.
(4) Composition, duties and operation of the Compensation Committee:
On September 27, 2011, the Company established the Compensation Committee and drew up the "Regulations
Governing the Organization of the Compensation Committee". 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
Title
Name
Criteria
Independent
Director
(Convener)
Independent
Director
King-Ling Du
Ming-Ling Hsueh
Independent
Director
Shiang-Chung
Chen
Independent
Director
Fu-Hsiung Hu
Qualifications and Experience
Independence
Number of Other Public Companies in
which the Member also Serves as an on
the Compensation Committee
Please refer to the "Disclosure of Professional Qualifications of
Directors and Independence of Independent Directors" form on
pages 16 to 18
0
4
1
1
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.
(1) There are 4 members of the Compensation Committee of the fourth term in the Company.
(2) Term of office of the members: It started on August 4, 2020 and will end on May 28, 2023. The Compensation
Committee met fourth times in 2021 . 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
Member
Member
Ming-Ling Hsueh
Shiang-Chung Chen
Fu-Hsiung Hu
4
4
4
4
0
0
0
0
100%
100%
100%
100%
59
Corporate Governance Report
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
4th Term
2nd Meeting
January 13, 2021
19th Term
5th Meeting
January 22, 2021
4th Term
3rd Meeting
February 19,
2021
4th Term
4th Meeting
April 26, 2021
4th Term
5th Meeting
July 28, 2021
19th Term
6th Meeting
February 26, 2021
19th Term
8th Meeting
May 7, 2021
19th Term
10th Meeting
August 6, 2021
Proposals and Resolutions
Proposal for 2020's managerial performance
evaluation and bonus compensation
Proposal for performance bonuses for the
Chairman and Vice Chairman of the Company
for 2020
Setting of
objectives for 2021
Proposal for distribution of the Company's
directors' and managers' remuneration for
2020
the Company's managers'
Company’s Handling
of Compensation
Committee Member’s
Opinion
Compensation
Committee:
The relevant
proposals were
passed with the
consent of all
members present and
submitted to the
Board of Directors for
resolution.
Proposal for distribution of special bonus
for managers of the Company
Amendments to the Regulations Governing
the Evaluation of Managerial Performance
and Remuneration of the Company
Board of Directors:
All of the Directors
present approved the
proposals
unanimously.
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.
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.
60
(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.
(5) Composition, duties and operations of the Nomination Committee.
1. The Committee shall be composed of at least three directors elected by the Board of Directors, in which a majority of
the independent directors shall participate.
The Committee, under the authority of the Board of Directors, shall faithfully perform the following duties and
responsibilities with the due care as a good administrator and shall submit its recommendations to the Board of
Directors for discussion:
(1)
(2)
(3)
(4)
To establish the criteria of diversity and independence in terms of professional knowledge, technology,
experience and gender required for board members and managers, and to identify, review and nominate
candidates for directors and managers accordingly.
To establish the organizational structure of each functional committee and to review the establishment and
amendment of the organizational rules and regulations of each functional committee.
To establish and regularly review the directors' continuing education program and succession plans for
directors and managers.
To review the establishment and amendment of the Company's corporate governance and board of directors'
operating rules and regulations.
(5) Other matters to be dealt with by the Committee as resolved by the Board of Directors.
2. Professional qualifications and experience of the members of the Nomination Committee and its operations:
(1)
There are 5 members in the Nomination Committee of the Company of this term.
61
Corporate Governance Report
(3)
The term of office of the current members: August 6, 2021 to May 28, 2023. The Nomination Committee met
twice in 2021, and the professional qualifications and experience of the members, their attendance and
matters discussed are as follows:
Title
Name
Convener
Member
Member
Member
Member
Fu-Hsiung Hu
Yu-Lon Chiao
Ming-Ling Hsueh
King-Ling Du
Shiang-Chung Chen
Professional
Qualification and
Experience
Please refer to the
"Disclosure of
Professional
Qualifications of
Directors and
Independence of
Independent
Directors" form on
pages 16 to 18.
Personally
Attended
Attended
by Proxy
Attendanc
e rate (%)
Remarks
2
2
2
2
1
0
0
0
0
1
100%
100%
100%
100%
50%
Other matters that should be specified:
The results of the discussions and resolutions of the Nominating Committee and the Company's handling of the
opinions of the members:
Nomination
Committee Meeting
Number and Date
Board of Directors
Meeting Number and
Date
Proposals and Resolutions
Proposal:
1st Term
1st Meeting
August 6, 2021
19th Term
10th Meeting
August 6, 2021
Resolution:
1st Term
2nd Meeting
November 5, 2021
19th Term
11th Meeting
November 5, 2021
Proposal:
Resolution:
Election of the Convener and the
chairman of the meeting of the
Nomination Committee of the first
term.
Fu-Hsiung Hu, Independent Director,
was elected Convener and the
chairman of the meeting of the
Nomination Committee of the first
term.
Proposal to establish the "Principles
of Election of Board Members and
Managers and Guidelines for
Continuing Education and Succession
Planning."
Proposal passed and sent to the
Board of Directors for approval.
Company’s
Handling of
Compensation
Committee
Member’s Opinion
All of the Directors
present approved
the proposal
unanimously.
All of the Directors
present approved
the proposal
unanimously.
62
(6)
Our fulfillment of sustainable development and differences between the same and the Sustainable
Development Best Practice Principles for TWSE/TPEx Listed Companies and reason(s) therefor:
The Company has established the Sustainable Development Committee under the Board of Directors, which is in
charge of the following matters and structured 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
Employees Relations and
Social Care 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,
implementing related plans, overseeing and reporting on the implementation 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 departmental cadres,
integration and
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 carries out the
interdepartmental
63
Corporate Governance Report
Department
Secretary Office
Corporate Social Responsibility
Report Preparation Team
Responsibility and function
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
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons therefor
In line with the
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies.
Actual Implementation
Promotion items
Yes No
Summary description
I.
Yes
structure
Has the Company established a
governance
to
promote
sustainable
development and set up a
dedicated (or part-time) unit to
sustainable
promote
development, which unit
is
senior
by
handled
management as authorized by
the Board of Directors? And
how does
the board of
directors supervise the same?
"Corporate
1. The Company's 7th meeting of the Board of
Directors of the 17th term approved the
establishment of
Social
the
Responsibility Committee" in April 29, 2015, and
the 17th meeting of the Board of Directors of the
18th term in November 1, 2019 approved the
establishment and organizational charter of the
"Sustainable Development Committee" by
Social
existing
merging
the
Responsibility
"Ethical
Committee"
Management Committee". The establishment
and the appointment of its members have been
approved by the Board of Directors, and the
is
Sustainable
responsible
corporate
sustainability strategies and visions to promote
CSR-related work and management.
Development
for
"Corporate
and
Committee
developing
2. 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
the Green Operation
Promotion Center,
Promotion Center, the Customer Service and
Supplier Management Promotion Center, and the
Employee Relations and Social Care Promotion
Center.
3. The Board of Directors receives regular reports on
operations,
finance, corporate governance,
sustainability issues, etc. Through the diverse
experience of its members, the Board offers
broad and professional opinions to assist the
Company in making appropriate decisions and
in a clear strategic
guiding the Company
direction.
64
Actual Implementation
Promotion items
Yes No
Summary description
II.
and
Does the Company conduct risk
assessments of environmental,
social
corporate
governance issues related to
the Company's operations and
risk
formulate
management
or
strategies in accordance with
the principle of materiality?
(Note 1)
relevant
policies
Yes
1. In order to ensure the sound operation and
sustainable development of the Company, the
"Rules
for Risk Management Policies and
Procedures" were approved by the 19th meeting
Board of Directors of the 18th term in February 27,
2020 to establish an overall risk management
system. The Board of Directors, the Audit
Committee, the Auditing Office, the President
and the President's Office, each risk management
unit, and each unit and subsidiary of the
Company are collectively involved in promoting
the implementation of relevant risk management
measures.
Deviation from
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons therefor
In line with the
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies.
2. For the purpose of reducing the impact and
influence of internal and external risks, the
Company's governance units and other risk
management units have identified risks related to
environmental, social and corporate governance
issues and planned relevant management and
control measures
the
the business and
principle of materiality,
operational characteristics of the Company. The
results
(including
management policies, strategies or mechanisms
for each risk category) are summarized in Note 3.
in accordance with
assessments
risk
of
3. In 2020, in the course of evaluating the risks, 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 environmental protection, and procurement.
Relatively high-risk scenarios were identified and
prioritized for management. The results of this
assessment and the related handling mechanism
were reported to the Board of Directors on
November 20, 2020 (for the report, please refer
to
https://www.walsin.com/wp-
content/uploads/2021/03/RiskManagementRep
ort2020.pdf). The various risks were revisited in
2021 and there was no increase or decrease in
the Company's risk categories; however, each risk
management unit has further updated its risk
management measures and strategies and
reported the same to the Board of Directors in
November 5, 2021. (For the report, please refer
https://www.walsin.com/wp-
to
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Summary description
Deviation from
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Development Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons therefor
content/uploads/2022/01/110RiskManagement
Report2021.pdf)
Environmental Issues
III.
(1) Has the Company established a
environmental
proper
management system based on
the
its
characteristics of
industry?
In line with the
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies.
Yes
(1) 1. 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. Please refer to
Chapter 5 (Energy Saving and Carbon
Reduction and Resource Cycle) of the 2021
Annual Sustainability Report or the "Energy
Saving and Carbon Reduction and Resource
Cycle" page of the Corporate Sustainability
Section on the Company's website
(https://esg.walsin.com/zh_TW/focus/saving)
for related specific results.
2. 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 Plant, Taichung
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Summary description
Deviation from
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons therefor
(2) Has the company made efforts
to improve the efficiency of
resources utilization and use
recycled materials which have
a
the
impact
environment?
low
on
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.
Please refer to the Company's website -
Document Center - Environmental Safety and
Health Policy and Related Certificates
(https://www.walsin.com/about-
us/newsroom/#pills-reports-document) for
relevant verification standards.
Yes
(2) 1. Walsin strives to be an environmentally
sustainable enterprise, and increases its
investment in energy saving, carbon reduction,
and resource recycling software and hardware
year by year, such as "control of reasonable
energy consumption per unit of the product",
"equipment energy efficiency management
and improvement", "reduction of smelting
process energy consumption and carbon
emission", waste heat recovery and process
technology improvement (such as pure oxygen
combustion technology and yield
improvement), and green power installation
(such as solar energy).
2. The Company mainly produces wire and
cable and stainless steel. After these two types
of 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 continuously raising the rate of using
recycled stainless steel and carbon steel as raw
materials, Walsin also considerably uses
recycled pallets, iron frames, iron (wood)
shafts, wooden plates, and iron plates as
packaging materials for copper wire and cable.
In 2021, approximately 95% of the products
produced by Cable & Wire Business Group
used recycled raw materials and approximately
57% of those products used recycled packaging
materials; approximately 41.48% of the
products produced by Stainless Steel Business
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TWSE/TPEx Listed
Companies and
reasons therefor
Yes
(3)
(3) Has the company assessed the
current and future potential
risks and opportunities of
climate change for the business
and taken measures to address
climate related issues?
Group used recycled raw materials for scrap
steel and approximately 58.52% of those
products used recycled raw materials. For
specific results, please refer to Section 3.2
"Green Operations" of the 2021 Annual
Sustainability Report or the "Energy and
Carbon Reduction and Resource Cycle" page in
the Corporate Sustainability section of the
Company's website
(https://esg.walsin.com/zh_TW/focus/saving).
In 2020, the Company 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 set up climate change
scenarios to identify changes to the Company's
operations based on the scenario and the risks
and opportunities caused by climate change.
And in 2021, it further developed strategies in
response based on the significant risks and
opportunities by describing risk management
practices and opportunity practice planning, so
as to establish a governance framework for
climate change according to such strategies.
Please refer to Chapter 5 (Energy Saving and
Carbon Reduction and Resource Cycle) of the
2021 Annual Sustainability Report or the
"Energy Saving and Carbon Reduction and
Resource Cycle" page of the Corporate
Sustainability Section on the Company's
website
(https://esg.walsin.com/zh_TW/focus/saving)
for related specific results.
Yes
(4) Has the Company compiled
statistics on greenhouse gas
(GHG)
water
emissions,
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?
(4) 1. The Company's energy-saving and carbon-
reduction strategy is to "implement lean
production management", "control reasonable
energy consumption per unit of the product",
"manage and improve equipment energy
efficiency", and "reduce energy consumption
and carbon emissions in the smelting process".
In addition, the Company will increase the
investment in software and hardware for
energy saving, carbon reduction and resource
recycling year by year, such as green raw
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TWSE/TPEx Listed
Companies and
reasons therefor
materials, waste recycling/regeneration (such
as recycling waste metals to replace natural
mineral mining, waste plastic recycling plastic
pellets, and waste acid regeneration), water
resources recycling (such as process cooling
water recycling and reuse of reclaimed water),
energy recycling (such as waste heat recovery)
and process technology improvement (such as
pure oxygen combustion technology and yield
improvement), end-of-line reuse and disposal
(such as furnace slag), and investment in green
power constructions (such as solar energy).
etc.
2. Our annual statistics on greenhouse gas
emissions, water consumption and total waste
volume indicate total greenhouse gas
emissions of 616,066 tonnes of CO2e, total
water consumption of 16,409 million liters and
total waste of 193,431 tonnes in 2021, an
increase by 3.95% and 0.72% and a drop by
11.11%, respectively, compared to 2020.
(1). Greenhouse gas emissions for the last 2
years (by all plants and subsidiaries of the
Company)
Year
2020
2021
Scope 1
Scope 1
Unit: co2e(tonnes)/product(tonnes)
Emissions per
Product
0.49
0.46
402,295
414,804
(2). Water consumption for the last 2 years (by
all plants and subsidiaries of the Company)
190,381
201,262
Unit: Million liters / product (tonnes)
Year
2020
2021
Total Water
Consumption
16,292
16,409
Water Consumption
per Product
13.53
12.19
(3). Waste output for the last 2 years (by all
plants and subsidiaries of the Company)
Year Hazardous
2020
2021
Wastes
46,734
71,696
Unit: tonnes/product (tonnes)
Non-Hazardous
Wastes
176,832
127,038
Output per
Product
0.19
0.15
3. Our Taiwan plants have obtained ISO14064-
1:2018, ISO50001 certification, and our
overseas plants have obtained ISO50001
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certification (Yantai and Shanghai
Plants).Please refer to the Company's website -
Document Center - Environmental Safety and
Health Policy and related certificates
(https://www.walsin.com/about-
us/newsroom/#pills-reports-document) for
relevant verification standards.
Yes
IV. Social Issues
(1) Has the Company established
its management policies and
procedures in accordance with
relevant laws, regulations, as
international
well
conventions regarding human
rights?
as
(1) 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
Deviation from
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons therefor
In line with the
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies.
the
rights
spirit,
to ensure
concrete
2.
In order
the above-mentioned
implementation of
human
the Company has
established a series of implementation policies,
including education, training and publicity on
illegal
the prevention of harassment or
workplace
of
violations,
employee complaint mechanisms and channels,
respect for freedom of association such as trade
unions, regular health checks, actively organize
health seminars, and regularly review and
adjust management measures for issues related
to human rights policies to improve human
rights protection.
establishment
Yes
(2) Has the company established
and implemented reasonable
employee benefit measures
(including
compensation,
vacation and other benefits)
and
reflected
operating performance or
employee
in
results
compensation?
properly
(2) 1. 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
subsidies
Act,
Standards
group
transportation/communication/meal,
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Summary description
Deviation from
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons therefor
and
(3) Has the company provided a
safe
healthy work
for employees
environment
and provided education on
safety
for
employees on a regular basis?
health
and
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,
for
wedding, funeral, celebrations, childbirth, travel
and club activities, three festival bonus/Labor's
Day bonus, birthday money gift, children's
scholarships,
and
interest-free
hospitalization grants.
subsidies
including
loans,
2. 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
and
its
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) 1. 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
education and health examinations. In addition,
workshops are held periodically to share safety
knowledge with employees.
of
workplace
2. The Environmental, Safety and Health
Management Committee regularly reviews 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. For more
information, please refer
to Section 4.3
Workplace Health and Safety of the 2021
Annual Sustainability Report or the "Employee
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Deviation from
Sustainable
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TWSE/TPEx Listed
Companies and
reasons therefor
Relations and Workplace Safety" page of the
Corporate Sustainability section of our website.
3. In 2021, the number of employee accidents
was 35 (35 persons in total) and the ratio of
recordable occupational injuries was 0.62 (the
ratio of cases per 200,000 man-hours). In 2022,
we plan
the awareness of
hazards/standard operating procedures (SJP)
and machinery and equipment (TPM) to reduce
the occurrence of occupational injuries.
improve
to
4. Our Taiwan and China plants have obtained
ISO45001 certification. Please refer to the
Company's website - Document Center -
Environmental Safety and Health Policy and
certificates
related
(https://www.walsin.com/about-
us/newsroom/#pills-reports-document)
related
standards/scope
validity period.
verification
for
and
Yes
(4) Has the company established
an
career
effective
development and capability
its
program
training
employees?
for
72
in
to
the
can
support
(4) The Company has developed a training system
according to each profession and level, and
promoted three types of training methods: On-
Job Training (OJT), Off-Job Training (OJT), and
Self Development
the
(SD)
development of the Company's talent, so that
employees
capacity
follow
enhancement and cross-discipline learning, in
order to maintain the competitiveness of the
market. We develop knowledge/skill areas and
learning blueprints each year according to the
needs of our employees at each stage of their
work and career development, and provide
diversified training resources such as new
recruit education and training, basic/advanced
internal knowledge sharing, application of
image
scientific
(data
recognition, etc.), work skills,
leadership
training, and industry trends. According to the
application level of knowledge and skills, we
have planned online knowledge courses, offline
learning
and mixed-level
classroom courses/workshops. In 2021, there
were 40,558 training participants trained for
122,026 hours. At the same time, in the first and
the
second half of each year, during
communities,
analysis,
tools
Actual Implementation
Promotion items
Yes No
Summary description
Deviation from
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons therefor
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
safety,
privacy,
customer
marketing and labeling of its
products and services, and has
it formulated relevant policies
and complaint procedures to
protect consumer rights?
(5) 1. Our products and services are marketed and
clearly labeled in accordance with local and
international regulations and standards or
pursuant to the requirements of our customers.
In order to protect business information and
customer privacy, the Company establishes a
code of ethical conduct for employees and
information security policies and relevant
regulations
any
unauthorized access to, alteration to, or
improper disclosure of any information that
may infringe on customer privacy and rights.
to prevent
(Note 3)
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 any information from
an interested party, the Company will transfer
the case to a dedicated person for him/her to
confirm or handle, in order to reply to the
stakeholders within the time limit.
2. We have not violated any product- or service-
related laws or regulations regarding customer
health and safety, customer privacy, marketing
and labeling of our products and services in
2021.
the
latest
information, product
3. For
information, contact phone numbers and
emails, please refer to the Company's website.
https://www.walsin.com/our-business/
https://www.walsin.com/about-us/contact-us/
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Summary description
Deviation from
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons therefor
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?
the
through
(6) 1. In order to strengthen and implement the
sustainable management of its suppliers, the
Company has established a supply chain
sustainability policy and the rules for evaluating
the suppliers' performance of corporate social
responsibility, and requires suppliers to comply
with environmental protection, occupational
safety and health or
labor human rights
regulations in purchase orders and contracts.
Key suppliers and new suppliers, in addition to
signing
Management
"Supplier
Commitment Letter", also need to conduct self-
Supplier
assessments
Sustainability Assessment Questionnaire, with
(i.e.,
evaluation
sustainability
supplier
management, and trade secret protection),
social (i.e., human rights, health, and safety),
and environmental (i.e., management system,
greenhouse gas, air pollution, and waste
management) aspects for the purpose of
identifying the degree of sustainability risk of
each key supplier, 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.
including economic
management,
the Key
items
2. In 2021, there were 134 key suppliers in the
Wire and Cable, Stainless Steel and Commercial
and Real Estate Business Groups, among which
20 were high-risk suppliers, 51 were medium-
risk suppliers and 63 were low-risk suppliers.
Since 2021, we have been promoting on-site
audits, interviews and guidance with regard to
high-risk key suppliers to prevent and reduce
the occurrence of risks, and will continue to
conduct on-site audits and guidance with regard
to high-risk key suppliers.
Yes
1. Since 2014, we have been compiling sustainability
reports (Note 4) by 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
In line with the
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies.
V. Did the Company make reference
international standards or
to
guidelines for the preparation of
reports
its
sustainability reports and other
reports
that disclose non-
financial information about the
Company? Did the Company
preparing
in
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Deviation from
Sustainable
Development Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons therefor
obtain a third-party certification
or
agency's
confirmation
assurance opinion on
said
reports?
Disclosures (TCFD) framework to provide
stakeholders with more complete and
transparent ESG information.
2. 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 every year 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 Sustainability
Reports by Public Companies." As of the date of
publication, the 2021 Annual Sustainability
Report is being under assurance checks by
Deloitte Taiwan, which is expected to issue a
statement of assurance in May 2022.
VI.
If your company has established sustainable development principles based on "Sustainable Development Best Practice
Principles for TWSE/TPEx Listed Companies", please describe differences between the principles and their
implementation:
In December 2014, the Company has established, based on "Sustainable Development Best Practice Principles for
TWSE/TPEx Listed Companies" (Note 4), its Corporate Governance Best Practice Principles, which has also been
approved by the Board of Directors. In line with the amendments to Sustainable Development Best Practice Principles
for TWSE/TPEx Listed Companies, the Board of Directors amended the Corporate Governance Best Practice Principles
in January 2018, April 2020 and January 2022. The Corporate Governance Best Practice Principles serve as the
guidelines for the Company 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 promotion and execution of sustainable development:
(1) With regard to developing a sustainable environment, please refer to " V. Operating Status, IV. 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. It is a continuous
in four directions: "Minority Support", "Environment Conservation", "Community
implementation focused
Development", and "Corporate Citizen". The results in 2021 may be summarized as below:
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TWSE/TPEx Listed
Companies and
reasons therefor
1."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. The second phase of the five-year plan will be launched in 2022 in
cooperation with five existing schools to continue to deepen the various incubation programs.
2.Long-Term Care for Children's Education:
The Company and its employees regularly sponsor 12 child welfare organizations, including World Vision Taiwan,
Taiwan Funds for Children and Families, Child Welfare League Foundation, the Lotus Heart Garden Nursery School in
Houbi District, and Chinese Childrenhome & Shelter Association, in a total of NT$1.6 million in 2021.
3."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 2021, we
implemented the related planning and technical training.
4.Support Local Agriculture
(1) Organic Kiwifruit Contract Farming:
In order to support environmental ecological conservation and the development of organic agriculture, for the first
time in 2021, we cooperated with "Jianghao Farm Young Farmers", contracted 800 square meters of farmland,
organically planted Taiwanese native kiwi fruit that is conducive to soil and water conservation, and took practical
actions to support local small farmers who cultivated in a friendly environment. .
(2) Support Mango Small Farmers:
The COVID-19 pandemic in 2021 has had a considerable impact on fruit farmers in southern Taiwan. In order to
support Taiwan's local agriculture and help small farmers overcome the pandemic, the Company and labor union
worked together to order 3,000 boxes of 18,000 kilograms of Aiwen mangoes from small farmers in Nanxi, Nanhua
and Baolai areas of Tainan and distributed the same to colleagues in Taiwan, in an effort to take care of local fruit
farmers in Tainan affected by the pandemic, and to express gratitude to our colleagues for their daily hard work.
(3) Order Taiwan Organic Mushrooms:
In order to support the local small farmers in Taiwan, the Employee Welfare Committee ordered organic mushrooms
from the farmers in Guanziling, Tainan before the Dragon Boat Festival in 2021, so that the local good taste might
be shared with colleagues, hoping to support the small farmers who produce environmentally friendly production
with actual purchase actions and to cheer for Taiwan agriculture!
5."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 2021, we sponsored 77 classes in 17 schools in New Taipei City, Taoyuan City,
Taichung City, Tainan City and Kaohsiung City, benefiting 1,197 students. Since 2019, Walsin, together with the Walsin
Technology Foundation and Mandarin Daily News, has launched a bilingual reading education program. In 2021, we
promoted this program in 822 classes in a total of 34 junior high schools in Taoyuan City and Kaohsiung City,
benefiting a total of 21,124 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 Wen-Chang Elementary School, Yanshui District, Tainan City to organize newspaper reading games
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Development Best
Practice Principles for
TWSE/TPEx Listed
Companies and
reasons therefor
and activities, where 12 colleagues volunteered to interact with 56 schoolchildren from grade 1 to grade 6 of the
whole school and make them understand various useful knowledge in their daily life through the game, with the
view to inspiring children's interest in learning through educational entertainment and visualization of knowledge.
6.Community Development and Promotion by Plants:
Each plant continues to support local cultural and activities, cares for the disadvantaged in the community, and
effectively uses plant resources to promote neighborhood development. In 2021, we continued to sponsor six
elementary schools in the Yanshui area of Tainan in the academic mentoring program and participated in 79 local civil
defense, cultural, folklore, respect for the elderly, care for women and children, and environmental cleanup activities,
as well as long-term adoption of nine roads and parks surrounding the plants for cleaning and making them greener.
7.Sponsor Lo-Sheng Sanatorium, MOHW to fight against the pandemic:
In the middle of 2021, the COVID-19 pandemic has deteriorated dramatically. In view of the shortage of supplies for
pandemic prevention in medical institutions and the increasing demand for healthcare capacity, Walsin sponsored
NT$1.2 million to Lo-Sheng Sanatorium, MOHW to provide funds for the purchase of supplies and equipment, in the
hope of supporting front-line healthcare workers in their fight against the pandemic with practical actions.
8.Sponsor Electric Wire Materials in National Skills Competition held by the Workforce Development Agency
The Ministry of Labor organizes the National Skills Competition every year, provides a professional stage for the best
craftsmen in various occupations to compete on the same stage, and selects young craftsmen with excellent skills
from the competition to represent Taiwan in international skills competitions. The Hsinchuang Plant of Wire and
Cable Business Group sponsored the 51st National Skills Competition in the Industrial Control (Industrial Wiring)
category in September 2021, in a view to supporting the development of vocational training and technical vocational
education.
(4) In 2021, 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 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 in 2021.
(5) For details on the Company's execution of sustainable development, please go to the Walsin Lihwa website Corporate
Sustainability section (https://esg.walsin.com/zh_TW) and read our 2021 Sustainability Report.
Note 1: "Principle of Materiality" refers to environmental, social and corporate governance issues that have a mateiral impact
on the Company's investors and other stakeholders.
Note 2: Management Policies, Strategies or Mechanisms of Risk
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
through education, internal audit, internal control and other
management measures.
• Capital Expenditure
• Major capital expenditures shall be reported to the Audit
• Information
• The Company continuously introduces advanced information
Committee and the Board of Directors for review and approval.
77
Corporate Governance Report
Issues
Risk Category
Management Policies, Strategies or Mechanisms
Security
• Changes in Interest
Rates
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
• Occupational
Safety Risks
78
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
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
Issues
Risk Category
Management Policies, Strategies or Mechanisms
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.
Note 3: 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, information security incident
management, business continuity management, and compliance management.
Note 4: The title of the Corporal Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies was amended
to the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies" on December 7, 2021;
the title of the Corporate Social Responsibility Report was amended to the "Sustainability Report".
(7) 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)
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
the Board of
approved by
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
The Company has always insisted on honest
business practices. We abide by the laws set forth
by the government, implement our corporate
governance principles and make our utmost effort
to fulfill our 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.
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.
of
Ethical Management
The directors and senior executives signed a
to
Statement
demonstrate their determination to operate with
integrity. At the same time, information related to
ethical management was published on the
corporate website and internal website for the
directors' reference to convey the importance of
to actively
operating with
integrity and
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
of
business,
(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
to
analysis
prevent unethical conduct, which
the
should
preventive measures
under
Paragraph 2, Article 7 of the
Ethical Corporate Management
Best Practice Principles
for
TWSE/TPEx Listed Companies?
evaluation
cover at
least
and
Yes
implement and monitor the implementation of
the ethical management policy.
(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
relevant
strengthened
Company has
preventive measures through the establishment
of internal rules and regulations and practices,
education and
training, daily promotion,
contractual agreements and inclusion in the
employee performance evaluation.
the
2. The Company established a risk assessment
mechanism for dishonest acts and used the seven
major types of dishonest acts listed in Paragraph
the Ethical Corporate
2 of Article 7 of
Management Best Practice Principles
for
TWSE/TPEx Listed Companies as the scope of
assessment to promote the assessment of
dishonest acts.
for
assisting
integrating
In order to
3.
implement the concept of
sustainable management and promote corporate
governance, we have established the Sustainable
the
Development Committee, under which
is
"Ethical Management Promotion Center"
the
the management of
responsible
Company's ethical management and
the
implementation of corporate social responsibility,
in
while
integrity
the Company's business
management
strategy,
to
ensure ethical management in accordance with
laws
the
implementation of ethical management, and
its effectiveness. The Sustainable
evaluating
Development Committee held two meetings in
2021
the annual plan and
implementation results of the Promotion Centers
the
and
the
implementation
the effectiveness of
report
and
formulating relevant measures
to monitor
regulations,
supervising
thereof
review
into
and
to
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
implement result in 2021 to the board of directors
meeting on January 11, 2022.
4. 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.
responsibility
management
cover
and
countermeasures,
5. In respect of the Company's risk management,
each risk management unit and audit unit will
carry out the Company's risk environment
and
management
the
President will organize and oversee
implementation and
risk
coordination of
management. The risk control measures and risk
management operations will be reported to the
Board of Directors in case of material risk events.
The risk management operations for 2021 were
reported to the Board of Directors on November
5, 2021
Yes
(III) 1. In 2021, the Company reviewed and updated
its ethical management policy and revised the
Procedures
for Ethical Management and
Guidelines for Conduct. In accordance with the
Company's Ethical Corporate Management
Best Practice Principles and Procedures for
Ethical Management and Guidelines
for
Conduct, it has established punishment policies
and a complaint filing system for employees
who violate relevant regulations, which is
integrated with the employee performance
evaluation.
2. In accordance with the Director Code of Ethical
Conduct, Employee Code of Ethical Conduct
and Regulations Governing the Handling of
Business by Employees, we cause our staff to
81
the
(III) Has the Company defined and
operating
implemented
procedures, conduct guidelines,
disciplinary
complaint
and
systems for non-compliance in its
unethical conduct prevention
program, and regularly reviewed
and
foregoing
program?
revised
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.
Corporate Governance Report
Implementation status
Assessment items
Yes No
Summary
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
regulations have been
of
implemented
employees' daily
the
operations.
the above
in
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
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
integrity
plants
advocate
the
for
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
management of suppliers. In 2021, a total of
111 companies attended the meetings held by
Wire and Cable Business Group (Shanghai,
Dongguan and Hsinchuang/Yangmei Plants)
and Stainless Steel Business Group (Yanshui
Plant).
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?
"Corporate
is responsible
"Corporate
and
(II) The Company's 7th meeting of the Board of
Directors of the 17th term approved the
establishment of
Social
the
Responsibility Committee" in April 29, 2015, and
the 17th meeting of the Board of Directors of the
18th term in November 1, 2019 approved the
establishment and organizational charter of the
"Sustainable Development Committee" by
merging
Social
the
existing
"Ethical
Committee"
Responsibility
Management Committee". The Sustainable
Development Committee
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. They reported to the Board of Directors
on January 22, 2021 on the performance of 2020
and 2021 implementation plan, and on January
11, 2022 on the performance of 2021 and 2022
implementation plan.
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
integrate honesty and ethical
values into the Company's operating strategies,
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
2. Formulating programs
as well as formulating related measures against
corruption to ensure honest business practices.
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
ensuring
while
implementation.
6. Assisting the Board of Directors and the
management to examine and evaluate whether
or not preventive measures to ensure 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
Center members are introduced as follows (with
different functions):
1. Corporate Governance Unit: Responsible for
the operation of the Ethical Management
Promotion Center, 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
its
84
Implementation status
Assessment items
Yes No
Summary
Deviation from
Ethical Corporate
Management Best
Practice Principles
for TWSE/TPEx
Listed Companies
and reasons for
deviation
compliance assessment of related business
procedures.
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.
(2) Making plans for a complaint filing system.
(Division
Units
5. Execution
Heads/Controllers/Function Heads):
(1) Cooperating with
the execution and
implementation of the operation of, and
matters
Ethical
to,
Management Committee.
relating
the
Yes
(III) Has the company established
policies to prevent conflicts of
such
interest,
policies and provided adequate
channels of communication?
implemented
(2) Regularly being supervised and audited.
(3) Formulating relevant operating rules for
specific preventive measures.
In 2021, the Ethical Management Promotion
Center held a total of four meetings and carried
out relevant promotions and educational training,
the implementation of which is disclosed in this
annual report (V) Explanations for Educational
Training on Ethical Management.
(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 set up a complaint
mailbox on its website that provides a means for
filing complaints about violations of honest
business practice and sexual harassments, which
the Independent Director may receive in real
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
Yes
Yes
time. A corporate mailbox also exists on the
employee portal site, thus providing internal and
external personnel with a means to make
suggestions and complaints 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
relevant compliance statuses according
to
accounting policies, internal control policies, as
well as other relevant regulations. The Auditing
Office will periodically report its auditing results
during Board meetings.
and
(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
order to prevent unethical business practices.
1. The Company
regularly conducts annual
training on ethical management (including anti-
corruption) and legal compliance, which is
disclosed in the annual CSR report and annual
report.
2. Through public commitment,
information
dissemination and education, the Company
deepens
its management philosophy of
integrity and creates a corporate culture of
integrity from top to bottom. In 2021, 9
directors (accounting for 82% of all directors)
ethical
received
management, and through the implementation
of ethical management
(including anti-
corruption) and legal compliance training, we
have established a good ethical management
courses
related
to
of
(IV) Has the Company established an
effective accounting system and
internal control system for the
implementation
ethical
management, and has its internal
audit unit drawn up an audit plan
based on the results of the
assessment of
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?
the
(V) Does
the Company
regularly
conduct
internal and external
educational training on ethical
management?
86
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.
Implementation status
Assessment items
Yes No
Summary
3.
Status
of
reporting mechanism
the
Company's
(I) Has the Company established
concrete reporting and rewards
set up convenient
systems,
reporting
and
appointed
appropriate,
any
dedicated staffer to deal with the
person who has been reported?
channels
Yes
(I)
culture and strengthened our commitment to
ethical practices.
3. In 2021, we conducted internal and external
training courses on topics such as ethical
management, patent education and the TIPS
system, with 2,156 attendees. For external
promotion, we invited 111 major suppliers and
the attendance rate was 100%.
The Company's website provides a "Reporting
Violations of Ethical Management Practices and
Sexual Harassment" area, which allows people to
file complaints about violations against ethical
management practices, which the Independent
Director may receive in real time. There is also a
"company mailbox" on the employee portal
website, providing
and external
personnel with a means to file complaints. The
Auditing Office is responsible for handling related
recommendations and violations. If the violations
are verified, disciplinary action shall be taken in
accordance with the Company's regulations.
internal
Yes
(II) Has the Company established
standard operating procedures
for investigation of and related
information
confidentiality
mechanisms for complaints?
(III) Has the company adopted any
measure to protect the informers
inappropriately
lest
treated?
they be
Yes
(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.
87
Corporate Governance Report
Implementation status
Assessment items
Yes No
Summary
Yes
4. Improved Information Disclosure
Has the Company disclosed the
content of its Ethical Corporate
Practice
Management
Principles as well as related
implementation results on
its
website and the MOPS?
Best
also
discloses
information;
The Company has established a Corporate Governance
page on its website to disclose its ethical management-
related
the
it
implementation status and execution results of its
ethical management practice in the annual CSR report
and
Ethical Corporate
Management Best Practice Principles, Procedures for
Ethical Management and Guidelines for Conduct, and
Ethical Conduct Guidelines for Directors of the Board
and Managerial Officers on the MOPS.
the Company's
also
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.
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
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, after introducing the TIPS intellectual property
management system at the headquarters and Yanshui Plant in 2020, the Company continued to promote the TIPS
revalidation operation in2021 and added the Hsinchuang Plant as a newly introduced plant. In accordance with TIPS
Section 5.2 (Intellectual Property Management Policy) and Section 5.3 (Objective Planning), the current year's
intellectual property management policy and its objectives were established, and the implementation status and
annual plan were reported to the Board of Directors on November 5, 2021 (Note 1).
Note 1: The operation of the Company's intellectual property rights management:
https://www.walsin.com/investors/corporate-governance/#pills-information-security
If the company has formulated corporate governance principles as well as other related regulations, it
should disclose how they can be looked up: For the Company's corporate governance principles as well
as
website:
Company
https://www.walsin.com/investors/corporate-governance/#pills-major-internal-policies.
regulations,
relative
please
visit
our
on
(8)
88
(9) 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:
Date
Title
Name
Start Date
End Date
Organizer
Course Name
As of December 31, 2021
Training Hours
On this
date
Year
Total
Chairman
Yu-Lon Chiao
Vice Chairman Patricia Chiao
2021/04/09
2021/04/09
2021/08/06
2021/08/06
2021/04/09
2021/04/09
2021/08/06
2021/08/06
2021/04/09
2021/04/09
2021/04/15
2021/04/15
2021/04/15
2021/04/15
Director
Yu-Cheng
Chiao
2021/08/06
2021/08/06
2021/09/30
2021/09/30
2021/10/28
2021/10/28
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Computer Audit
Association
Taiwan Corporate
Governance
Association
2021/10/28
2021/10/28
2021/04/09
2021/04/09
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
2021 Global Macro Economic Outlook
Study on Important Economic and Trade Issues and
Case Study on Ethical Management
2021 Global Macro Economic Outlook
Study on Important Economic and Trade Issues and
Case Study on Ethical Management
2021 Global Macro Economic Outlook
Domestic and International Economic Outlook and
the Impact of Major Events on the Industry and Its
Response; Pricing Strategy & Value Selling
Machine Learning - Hardware Design;
Biden's Policy and the Impact of Soaring U.S. Bond
Rates
Study on Important Economic and Trade Issues and
Case Study on Ethical Management
Information Security-Related Risk Trends and
Business Continuity Issues
Semiconductor Innovation: Innovation History,
Future Trends, Challenges, Opportunities, and
Strategies; Impact of the US-China Trade War and the
Pandemic on Cross-Strait Trade and Taiwan's
Economy
New Generation Communication, Communicating
with New Generation; Seeing Taiwan's Opportunity
from International Trends;
AI+5G+AIOT+Chromebook's Competitiveness
2021 Global Macro Economic Outlook
Director
Yu-Heng
Chiao
Director
Andrew Hsia
2021/10/06
2021/10/06
Securities and Futures
Institute
From Insider Trading to Corporate Social
Responsibility
2021/10/06
2021/10/06
2021/04/09
2021/04/09
Securities and Futures
Institute
Taiwan Corporate
Governance
Association
ESG in the Corporate Environment and the Impact of
Climate Change on Businesses
2021 Global Macro Economic Outlook
2021/08/06
2021/08/06
2021/04/15
2021/04/15
Director
Wei-Shin Ma
2021/04/15
2021/04/15
2021/08/06
2021/08/06
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Study on Important Economic and Trade Issues and
Case Study on Ethical Management
Domestic and International Economic Outlook and
the Impact of Major Events on the Industry and Its
Response; Pricing Strategy & Value Selling
Machine Learning - Hardware Design;
Biden's Policy and the Impact of Soaring U.S. Bond
Rates
Study on Important Economic and Trade Issues and
Case Study on Ethical Management
6
6
21
9
6
9
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
3
89
Corporate Governance Report
Title
Name
Start Date
End Date
Organizer
Course Name
Date
Training Hours
On this
date
Year
Total
Representative
of Corporate
Director
Pei-Ming
Chen
2021/04/09
2021/04/09
2021/04/15
2021/04/15
2021/04/15
2021/04/15
2021/08/06
2021/08/06
2021/10/28
2021/10/28
2021/10/28
2021/10/28
2021/02/25
2021/02/25
2021/04/09
2021/04/09
2021/04/29
2021/04/29
2021/05/04
2021/05/04
Independent
Director
Ming-Ling
Hsueh
2021/08/03
2021/08/03
2021/08/06
2021/08/06
2021/09/07
2021/09/07
2021/10/05
2021/10/05
2021/10/28
2021/10/28
2021/12/22
2021/12/22
2021/02/25
2021/02/25
Independent
Director
King-Ling Du
2021/04/09
2021/04/09
2021/08/06
2021/08/06
Independent
Director
Shiang-Chung
Chen
2021/04/09
2021/04/09
2021/11/05
2021/11/05
90
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Securities
Association
Taiwan Securities
Association
Taiwan Corporate
Governance
Association
Taiwan Securities
Association
Taiwan Securities
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Securities and Futures
Institute
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Taiwan Investor
Relations Institute
2021 Global Macro Economic Outlook
Domestic and International Economic Outlook and
the Impact of Major Events on the Industry and Its
Response; Pricing Strategy & Value Selling
Machine Learning - Hardware Design;
Biden's Policy and the Impact of Soaring U.S. Bond
Rates
Study on Important Economic and Trade Issues and
Case Study on Ethical Management
Semiconductor Innovation: Innovation History,
Future Trends, Challenges, Opportunities, and
Strategies; Impact of the US-China Trade War and the
Pandemic on Cross-Strait Trade and Taiwan's
Economy
New Generation Communication, Communicating
with New Generation; Seeing Taiwan's Opportunity
from International Trends;
AI+5G+AIOT+Chromebook's Competitiveness
Turning Point
Centennial Companies; Learn
Companies about Sustainability
in the Strategy of
International
from Centennial
2021 Global Macro Economic Outlook
Corporate Governance Blueprint 3.0 and Director
Responsibility
Anti-Money Laundering and Counter Terrorism
Financing Practice and Case Study (including Insider
Trading Practice)
Information
Countermeasures
Security
Challenges
and
Study on Important Economic and Trade Issues and
Case Study on Ethical Management
Sustainable Financial Innovation and Management
Introduction and Response of Financial Consumer
Protection Act
Practical Operation of Employee Motivation Tools for
Listed Companies
Corporate Governance Summit - Implementing ESG
for Governance and Sustainable Development
Legal Risk and Response for Directors and Supervisors
from Major Corporate Malpractice Cases
2021 Global Macro Economic Outlook
Study on Important Economic and Trade Issues and
Case Study on Ethical Management
2021 Global Macro Economic Outlook
Analysis of Information Security and Risk Trends
3
3
3
3
3
3
1
3
3
3
3
3
3
3
3
6
3
3
3
3
3
18
31
9
6
Title
Name
Start Date
End Date
Organizer
Course Name
Date
Training Hours
On this
date
Year
Total
Independent
Director
Fu-Hsiung Hu
2021/02/23
2021/02/23
Securities and Futures
Institute
2021/03/22
2021/03/22
2021/04/09
2021/04/09
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Advanced Seminar on Director and Supervisor
Practices - Corporate Mergers and Acquisitions -
Focusing on Hostile Mergers and Acquisitions
Integrity and Fair Treatment of Customers
2021 Global Macro Economic Outlook
2021/04/20
2021/04/20
Taiwan Academy of
Banking and Finance
Corporate Governance Lecture
- Green Energy
Innovative Business Model for Corporate Governance
2021/05/05
2021/05/05
2021/08/06
2021/08/06
2021/10/22
2021/10/22
2021/10/28
2021/10/28
Taiwan Corporate
Governance
Association
Taiwan Corporate
Governance
Association
Securities and Futures
Institute
Taiwan Institute of
Sustainable Energy
Case Study on Anti-Money Laundering in Banking
Industry
Study on Important Economic and Trade Issues and
Case Study on Ethical Management
2021 Annual Legal Compliance Seminar on Insider
Stock Transactions
26th CEO Lecture and Keynote Speech
3
2
3
3
1
3
3
2
20
2. For the attendance of Board meetings by Directors, please refer to " III. 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 2021:
Title
Name
Start Date
End Date
Organizer
Course Name
Date
As of December 31, 2021
Training Hours
Year total
On this
date
3
2021/04/09 2021/04/09
2021/04/15 2021/04/15
Taiwan
Corporate
Governance Association
Taiwan
Corporate
Governance Association
2021/04/15 2021/04/15
Taiwan
Corporate
Governance Association
2021 Global Macro Economic Outlook
Domestic and International Economic Outlook and
the Impact of Major Events on the Industry and Its
3
Response; Pricing Strategy & Value Selling
Machine Learning - Hardware Design;
Biden's Policy and the Impact of Soaring U.S. Bond
3
Rates
2021/08/06 2021/08/06
2021/10/28 2021/10/28
2021/04/09 2021/04/09
Taiwan
Corporate
Study on Important Economic and Trade Issues and
Governance Association
Case Study on Ethical Management
Taiwan
Institute
of
Sustainable Energy
Taiwan
Corporate
Governance Association
26th CEO Lecture and Keynote Speech
2021 Global Macro Economic Outlook
2021/08/06 2021/08/06
Taiwan
Corporate
Study on Important Economic and Trade Issues and
Governance Association
Case Study on Ethical Management
Jin-Renn
Leu
2021/08/06 2021/08/06
Taiwan
Corporate
Study on Important Economic and Trade Issues and
Governance Association
Case Study on Ethical Management
Stainless Steel
Kevin Niu 2021/04/09 2021/04/09
Taiwan
Corporate
Governance Association
2021 Global Macro Economic Outlook
2021/04/09 2021/04/09
Taiwan
Corporate
Governance Association
2021 Global Macro Economic Outlook
2021/08/06 2021/08/06 Taiwan
Corporate Study on Important Economic and Trade Issues and
President &
President of
Commercial
Fred Pan
and Real
Estate BG
Executive Vice
President &
Head of
C.C. Chen
Finance
Department
President of
Wire & Cable
BG
President of
BG
President of
Commodity BG
Josh Chia
3
2
3
3
3
3
3
3
14
6
3
3
6
91
Corporate Governance Report
Title
Name
Start Date
End Date
Organizer
Course Name
Date
Training Hours
On this
date
Year total
Head of
Corporate
Governance
Hueiping
Lo
Governance Association
Case Study on Ethical Management
2021/04/09 2021/04/09
2021/07/29 2021/07/29
Taiwan
Corporate
Governance Association
Taiwan
Institute
of
Sustainable Energy
2021 Global Macro Economic Outlook
25th CEO Lecture and Keynote Speech
2021/08/06 2021/08/06
Taiwan
Corporate
Study on Important Economic and Trade Issues and
Governance Association
Case Study on Ethical Management
2021/08/19 2021/08/19
Taiwan
Corporate
Corporate Governance and Information Disclosure
Governance Association
System - On the Important Responsibility of Insiders
2021/09/01 2021/09/01
2021/10/22 2021/10/22
2021/10/28 2021/10/28
2021/12/17 2021/12/17
Financial
Supervisory
The 13th Taipei Corporate Governance Forum
Commission
Securities
and
Futures
2021 Annual Legal Compliance Presentation on
Institute
Insider Stock Transactions
Taiwan
Institute
of
26th CEO Lecture and Keynote Speech
Sustainable Energy
Taiwan
Stock
Exchange
2021 Cathay Sustainable Finance and Climate Change
Corporation
Summit
2021/04/09 2021/04/09
Taiwan
Corporate
Governance Association
2021 Global Macro Economic Outlook
Richard
2021/08/06 2021/08/06
Wu
Taiwan
Corporate
Study on Important Economic and Trade Issues and
Governance Association
Case Study on Ethical Management
2021/10/21 2021/10/22
Accounting Research and
Development Foundation
Continuing Education Course
for Accounting
Supervisors of Issuers, Securities Firms and Stock
12
Exchanges
3
2
3
3
3
3
2
6
3
3
25
18
Head of
Accounting
Department
92
(10) Implementation Status of Internal Control System
1. Statement on Internal Control
Walsin Lihwa Corporation
Statement on Internal Control System
Date: February 22, 2022
In 2021, 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, 2021, 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 22, 2022 by the Board, with none of the 11 Directors present
opposing it.
Walsin Lihwa Corporation
Chairman: Yu-Lon Chiao
President: Fred Pan
2. If CPAs are engaged to review the internal control system, their report shall be disclosed: None.
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Corporate Governance Report
(11) 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.
(12) 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 2021 AGM on July 15, 2021 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 2020 Business Report and financial statements.
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 2020 Profit Distribution Table.
Resolution:
According to the voting result, the number of affirmative votes exceeded the legal threshold,
so the proposal was passed.
Implementation
August 8, 2021 was the ex-dividend record date and the dividends were paid out on August 25,
Status:
2021. (Cash dividend of NT$0.9 was paid per share.)
Proposal No. 3
Description:
Amendments to the Company's Articles of Incorporation.
Resolution:
According to the voting result, the number of affirmative votes exceeded the legal threshold,
so the proposal was passed.
Implementation
Changes to the corporate registration were handled in accordance with the law and have been
Status:
approved by the Ministry of the Economic Affairs on August 12, 2021 via a letter (Ref. No.: Jin-
So-Shang-Zi-11001136610), and the revised articles were disclosed on our official website.
Proposal No. 4
Description:
Amendments to the Company's Rules and Procedures of Shareholders' Meetings.
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 revised
Status:
articles were disclosed on our official website.
Proposal No. 5
Description:
Proposal to lift 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.
94
Implementation
This was announced as a piece of material information on the day of the Shareholders' Meeting.
Status:
Important resolutions adopted by 2021 Board meetings as of the day of this annual report
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 Walsin International Investment Co., Ltd. to the Company and
Resolution:
its other subsidiaries in a 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. ("TECO")
Resolution:
for not 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 the
Resolution:
Company Act.
Result:
Recusal:
Important
Resolution:
Proposal passed.
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 Walsin
Resolution:
International Investment Co., Ltd.
95
Corporate Governance Report
Result:
Important
Resolution:
Proposal passed.
Proposal to approve the loan of funds by Walsin 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., a subsidiary of the Company, at a
transaction price of RMB62.57 million.
Result:
Proposal passed.
2021/04/09 (7th Meeting of the 19th Term)
Important
Amendments to the Company’s Articles of Incorporation.
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
The language of Article 14-3 and Article 22 was revised, and the rest was adopted as proposed.
Amendments to certain provisions of Company’s Board of Directors Meeting Regulations.
Proposal passed.
Amendments to certain provisions of the Company's Corporate Governance Best Practice Principles.
Proposal passed.
Amendments to certain provisions of the Company’s Procedures for Ethical Management and
Resolution:
Guidelines for Conduct.
Result:
Article 10 that provides that donations of NT$10 million to non-related parties should be submitted
Important
Resolution:
to the Board of Directors for resolution was amended, and the rest was adopted as proposed.
Amendments to certain provisions of the Company’s Standard Operating Procedures for Processing
Requests Made by the Directors of the Board.
Result:
Proposal passed.
Important
Proposal to update the investment plan for and amount of the hot rolling production line of Yantai
Resolution:
Walsin Stainless Steel Co., Ltd.
Result:
Proposal passed.
Important
Resolution:
Proposal for Yanshui Plant to invest in and construct the equipment for acid recycling and disposal.
Result:
Proposal passed.
2021/05/07 (8th Meeting of the 19th Term)
Important
Resolution:
Proposal to amend the Company's internal control system of financing cycle - internal control
principles of stock services.
96
Result:
Proposal passed.
2021/06/25 (9th Meeting of the 19th Term)
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Proposal to postpone the 2021 Annual General Meeting of the Company.
Proposal passed.
Proposal for Changshu Walsin Specialty Steel Co., Ltd. to invest in and expand the acid-washing
production line and equipment.
Proposal passed.
Proposal to acquire 100% shareholding in New Hono Investment Pte. Ltd. in order to acquire 42%
shareholding in PT Walsin Nickel Industrial Indonesia, one of the Company's subsidiaries.
Result:
Proposal passed.
2021/08/06 (10th Meeting of the 19th Term)
Important
Proposal to issue domestic unsecured straight corporate bonds to repay borrowings.
Resolution:
Result:
Proposal passed.
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Proposal to obtain medium- and long-term loans from various banks in order to enhance the
Company's' medium- and long-term working capital and strengthen its financial structure.
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 PT Walsin Nickel Industrial Indonesia in
the form of a US$250 million non-revolving facility and a US$70 million revolving facility.
Result:
Proposal passed.
Important
Resolution:
Proposal to lift the non-competition ban on the Company's managerial officers.
Result:
Proposal passed.
Important
Amendment to the Company's Rules for Managerial Officers' Performance Evaluation and
Resolution:
Compensation Management.
Result:
Proposal passed.
Important
Resolution:
Proposal to establish a Nomination Committee under the Board of Directors, to establish the
Nomination Committee Charter, and to appoint the members of the Nomination Committee for the
first term in accordance with Article 4 of such Charter.
Result:
Proposal passed.
2021/11/05 (11th Meeting of the 19th Term)
Important
Formulation of the Procedures for Communications between Independent Directors and the Chief
Resolution:
Audit Executive.
Result:
Important
Resolution:
Result:
Important
Resolution:
Proposal passed.
Amendment to the Company's Audit Committee Proposal Rules.
Proposal passed.
Proposal to amend the Company's internal control system.
Result:
Proposal passed.
97
Corporate Governance Report
Important
Resolution:
Result:
Important
Resolution:
Proposal to update the Company's investment plan and investment amount for the establishment
of a low-voltage construction wire and cable production line and a three-dimensional automatic
warehouse at the Yangmei Plant.
Proposal passed.
Proposal to update the investment plan and investment amount of Yantai Walsin's cold-refined bar
plant.
Result:
Proposal passed.
Important
Proposal to apply for opening an escrow account and appoint Oversea-Chinese Banking Corporation
Resolution:
Limited as the escrow agent.
Result:
Proposal passed.
Important
Proposal to extend the Company's bank borrowing of US$550 million or its equivalent in New Taiwan
Resolution:
Dollars to five years.
Result:
Important
Resolution:
Result:
Important
Resolution:
Proposal passed.
Proposal to approve 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.
Proposal to establish the Principles of Election of Board Members and Managers and Guidelines for
Continuing Education and Succession Planning.
Result:
Proposal passed.
2021/12/13 (12th Meeting of the 19th Term)
Important
Resolution:
Result:
Important
Resolution:
Proposal to conduct a cash capital increase by issuing new shares.
Proposal passed.
Proposal to approve the loan of funds from Walsin International Investment Co., Ltd. to PT Walsin
Nickel Industrial Indonesia in the form of a US$250 million non-revolving facility.
Result:
Proposal passed.
Important
Resolution:
Proposal to provide endorsement and guarantee for PT Walsin Nickel Industrial Indonesia.
Result:
Proposal passed.
2022/01/11 (13th Meeting of the 19th Term)
Important
Resolution:
Change of CPA in response to the internal rotation mechanism of the CPA firm, Deloitte & Touche,
and evaluation of the annual compensation of the CPA firm and the independence and suitability of
the CPA.
Result:
Important
Resolution:
Result:
Proposal passed.
Proposal to approve the loan of funds by Walsin International Investment Co., Ltd. to the Company
and those between the subsidiaries, in a total amount of US$650 million and RMB1.5 billion
respectively.
The explanatory text was amended as suggested in the summary of the speech by changing the
period from February 1, 2022 to January 31, 2023, and the rest was adopted as proposed.
Amendment to certain provisions of the Company's Regulations Governing Board Performance
Evaluation and relevant schedules thereto.
Proposal passed.
Amendment to the Company's Sustainable Development Practice Principles.
Important
Resolution:
Result:
Important
Resolution:
98
Result:
As suggested in the summary of the speech, the subject was change from "Corporate Social
Responsibility Practice Principles" to "Sustainable Development Practice Principles", and the rest
was adopted as proposed.
Proposal for the distribution of the performance bonus for Chairman and Vice Chairman for 2021.
Proposal passed.
Yu-Lon Chiao and Patricia Chiao
Proposal to review managers' performance evaluation as well as bonuses and compensation for
Important
Resolution:
Result:
Recusal:
Important
Resolution:
2021.
Result:
Proposal passed.
Important
Resolution:
Proposal to lift the non-competition ban on the Company's managerial officers.
Result:
Proposal passed.
2022/02/22 (14th Meeting of the 19th Term)
Important
Distribution of remuneration to directors and employees (including managerial officers) for 2021.
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Result:
Important
Resolution:
Proposal passed.
Proposal of the 2021 Profit Distribution Table.
Proposal passed.
Proposal of the 2021 Internal Control System Statement.
Proposal passed.
Amendment to the Company's Procedures for the Acquisition and Disposal of Assets.
Proposal passed.
Amendments to certain provisions of the Company’s Articles of Incorporation.
Proposal passed.
Approval for holding the 2022 AGM regularly.
Result:
Proposal passed.
Important
Proposal to lift the non-competition ban for the Company’s Directors according to Article 209 of the
Resolution:
Company Act.
Result:
Recusal:
Proposal passed.
Yu-Heng Chiao, Wei-Shin Ma, and Shiang-Chung Chen
(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.
99
Corporate Governance Report
(14)
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 18, 2022
Reason for resignation
or dismissal
Head of Corporate
Governance
Sherry Ho
2019/06/12
2021/01/22
Position Adjustment
5.
Information on CPAs' fees
CPA Firm
CPA
Audit Period Audit Fee
Non-Audit
Fee
Total
Remarks
Deloitte
Taiwan
Wen-Yea
Shyu and
Kuan-Chung
Lai
Wen-Yea
Shyu and
Ker-Chang
Wu
2021/01/01~
2021/09/30
2021/10/01~
2021/12/31
NT$14,410 NT$19,910 NT$34,320
1. Change of CPAs due to internal rotation and
adjustment of the CPA firm.
2. The non-audit fees were mainly for tax audit,
system design, CSR consultation and assurance,
cash capital increase, and review opinion of the CPA
for the issuance of corporate bonds.
(I) 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.
(II) Audit fees paid in the current year are at least 10% less than those paid in the previous year: Not
applicable.
100
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 11, 2022
Internal position rotations and changes of Deloitte Taiwan
Contracting parties
Accountants
Appointer
Not applicable.
Situation
Voluntarily terminates
appointment
Refuses to accept (continued)
appointment
In 2021 and 2020 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 Taiwan
Wen-Yea Shyu and Ker-Chang Wu
January 11, 2022
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.
101
Corporate Governance Report
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
No. of shares
held
Increase
(decrease)
Shares pledged
Increase (decrease)
2021
0
20,000,000
0
0
0
0
Current fiscal year up
to March 15, 2022
Shares
No. of
pledged
shares held
Increase
Increase
(decrease)
(decrease)
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
-
1,200,000
1,200,000
1,152,890
870,000
0
0
0
0
0
0
0
0
0
0
0
(20,000)
0
0
0
-
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
Fred Pan
Chairman
Vice Chairman
Director
Director
Director
Director
Director
Independent Director
Independent Director
Independent Director
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
Richard Wu
Head of Accounting Dept.
Shareholders holding over 10%
of outstanding shares
Kevin Niu
Josh Chia
C.C. Chen
None
Jin-Renn Leu
(2) Information on change in the number of shares retained: None.
(3) Information on Share Pledges: None.
102
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 15, 2022
Name and relationships of
related parties to top ten
shareholders (spouse and
relatives within the second
degree) (Note 1)
Name
Relationship
Rem
arks
251,504,000
7.33%
-
-
-
- -
-
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
-
-
-
-
-
-
-
-
103
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 15, 2022
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
-
-
-
-
-
-
-
-
104
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 15, 2022
Name and relationships of
related parties to top ten
shareholders (spouse and
relatives within the second
degree) (Note 1)
Name
Relationship
Rem
arks
Name
TECO Electric and
Machinery Co.,
Ltd.
Rong Jiang Co.,
Ltd.
205,332,690
5.98%
148,040,000
4.31%
-
-
-
-
-
-
- None
None
- None
None
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
Patricia Chiao
93,169,006
2.72%
-
-
-
Yu-Heng
Chiao
-
Winbond
Electronics
Corporatio
n
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
Its chairman is a
second-degree
relative of said
shareholder
-
-
-
-
-
-
-
-
-
-
-
105
Corporate Governance Report
As of March 15, 2022
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
Name and relationships of
related parties to top ten
shareholders (spouse and
relatives within the second
degree) (Note 1)
Name
Relationship
Chin-Xin
Investment
Co., Ltd
Huali
Investment
Co., Ltd.
Yu-Heng
Chiao
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
62,001,000
1.81%
-
-
-
- -
-
Rem
arks
-
-
-
Note
2
Yu-Heng Chiao
61,072,197
1.78%
10,274,952 0.30%
-
-
Winbond
Electronics
Corporatio
n
Chin-Xin
Investment
Co., Ltd
Huali
Investment
Co., Ltd.
Patricia
Chiao
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
-
-
-
-
Norges Bank
Investment Fund
under the
custody of
Citibank, Taipei
Branch
52,313,360
1.52%
-
-
-
- -
-
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
Note 3: The shareholding ratios are rounded to the nearest hundredth percent.
requested: None.
106
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, 2021; Units: Shares; %
Investment by the
Company
Number of
shares
473,730,393
317,505,180
44,739,988
Percentag
e
100.00
100.00
100.00
29,995,859
100.00
1,000,000
100.00
32,178,385
100.00
42,000,000
577,583,403
29,854,246
100.00
99.22
99.51
Investment of directors,
managers or enterprises
under their direct or
indirect control.
Number of
shares
Percentage
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Combined Investment
Number of
shares
473,730,393
317,505,180
44,739,988
Percentage
100.00
100.00
100.00
29,995,859
100.00
1,000,000
100.00
32,178,385
100.00
42,000,000
577,583,403
29,854,246
100.00
99.22
99.51
500,000
50.00
420,000
42.00
920,000
92.00
10,500
1,050,000
36,058,184
179,468,270
49,831,505
26,670,699
883,848,423
-
70.00
70.00
-
49.05 37,461,816
37.00 49,327,824
33.97 12,070,677
26.67
1,934,486
22.21 374,044,285
10,500
-
1,050,000
-
73,520,000
59.05
228,796,094
10.16
61,902,182
8.23
1.94
28,605,185
9.40 1,257,892,708
70.00
70.00
100.00
47.16
42.20
28.61
31.61
109,628,376
21.01 13,298,805
2.55
122,927,181
23.56
88,902,325
18.30 16,719,526
3.44
105,621,851
21.74
318,522,792
22.46 15,880,540
1.12
334,403,332
23.58
Re-Investment Companies
(Note)
Walsin Lihwa Holdings Limited
Walsin Specialty Steel Corp.
Ace Result Global Limited
Min Maw Precision Industry
Corp.
Hua Tuo Green Resources Co.,
Ltd.
Walsin Precision Technology Sdn.
Bhd.
New Hono Investment Pte. Ltd.
Chin-Cherng Construction Co.
Walsin Info-Electric Corp.
PT. Walsin Nickel Industrial
Indonesia
PT. Walsin Lippo Industries
PT. Walsin Lippo Kabel
Joint Success Enterprises Limited
Chin-Xin Investment Co., Ltd
Walsin Color Corporation
Han-You Venture Capital Co., Ltd.
Winbond Electronics Corporation
Walton Advanced Engineering,
Inc.
Walsin Technology Corporation
Powertec Electronic Chemical
Material Corp.
Note: Equity method used.
107
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 by 304,618,660
shares
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
108
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
2021.05.05
Note 21: Letter Jin-Guan-Zheng (Jiao) No. 1090359858, dated
2021.09.29
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 15, 2022
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
Number
No. of Shares
Held
Government
Financial
Other Legal
Institutions
Institutions
Persons
As of March 15, 2022
Foreign
Individuals
Institutions and
Total
Individuals
4
42
385
172,964
344
173,739
18,131,054
50,651,739 1,181,313,985
1,375,806,877
805,429,293 3,431,332,948
Shareholding
0.53%
1.48%
34.43%
40.09%
23.47%
100%
Note 1: Ratio of shares held by investors in China: 0%.
109
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 40,000
40,001 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
64,475
80,589
14,650
4,539
2,877
2,383
1,115
725
1,262
566
248
83
37
30
160
173,739
Shares Held (Note)
14,130,185
170,404,107
114,352,826
57,207,868
53,119,205
60,536,469
39,758,697
33,728,005
91,654,314
80,094,514
69,031,837
40,408,324
25,289,903
26,643,473
2,554,973,221
3,431,332,948
As of March 15, 2022
Shareholding
0.41%
4.97%
3.33%
1.67%
1.55%
1.76%
1.16%
0.98%
2.67%
2.33%
2.01%
1.18%
0.74%
0.78%
74.46%
100%
2. Distribution of Preferred Shares: None.
(4) List of Major Shareholders
Major Shareholders
As of March 15, 2022
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.
Rong Jiang Co., Ltd.
Huali Investment Corp.
Patricia Chiao
Investment Account of Banque Pictet & CIE SA under the custody of HSBC
Yu-Heng Chiao
Norges Bank Investment Fund under the custody of Citibank, Taipei Branch
251,504,000
222,000,000
220,011,000
205,332,690
148,040,000
100,000,000
93,169,006
62,001,000
61,072,197
52,313,360
7.33%
6.47%
6.41%
5.98%
4.31%
2.91%
2.72%
1.81%
1.78%
1.52%
Note: The shareholding ratios are rounded to the nearest hundredth percent.
110
(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
2020
22.60
10.45
16.18
26.18
25.23
2021
32.35
16.30
26.12
30.86
29.26
Weighted average shares
3,276,127,526
3,428,520,171
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)
2.04
0.90
-
-
-
7.50
16.99
0.06
4.27
1.60
-
-
-
5.68
15.15
0.07
Current Year up to
March 18, 2022
31.90
25.10
28.46
-
-
-
-
-
-
-
-
-
-
-
* 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 share dividend policy of the Company should be stable for the purpose of its 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.
111
Fundraising Overview
2. Dividends Distribution to be proposed to the Shareholders’ Meeting
According to the decision of the Company's 14th board meeting of the 19th term, cash dividends issued to
shareholders in 2021 shall be NT5,490,132,717, averaging NT$1.6 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 2022 Annual General Meeting, which authorized the chairman of the
board to determine the ex-dividend date and other details. In the future, if the Company issues or repurchases
shares, thereby influencing the amount of outstanding shares and changing the distributable cash dividend per
share, it is 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 financial structure and the principle of dividend equity, the Company's
2022 Annual General Meeting intends to amend Articles 28 and 28-1 of the Company's Articles of Incorporation,
so that the Board of Directors will be authorized to pay cash dividends by a special resolution, and that the
Company's dividend payout amount shall be calculated by excluding the share of the income generated by the
Company's affiliates but adding the cash dividends they distribute to the Company. Those articles are amended
as follows:
Article 28 of the Company's Articles of Incorporation:
After the Company has offset its accumulated losses from previous years and paid all tax due, the Company
shall set aside 10% of its net profits as legal reserve, except when the legal reserve equals to the total authorized
capital of the Company. From the remainder calculated above plus the surplus retained earnings of previous
year, the Company shall set aside or reverse the special reserve as stipulated by the law or the competent
authority. Then the Board of Directors shall draft an earning distribution proposal submitted to the
Shareholders' meeting for resolution to distribute shareholder's dividends. If the aforementioned distribution
of earnings is made in cash, the Board of Directors shall be authorized to distribute the earnings with the
presence of at least two-thirds of the Directors and the resolution of a majority of the Directors present, and to
report the distribution to the shareholders' meeting.
The setting aside of the legal reserve set forth in Paragraph 1 of this Article should be based on the "the total
amount of after-tax net income for the period and other profit items adjusted to the current year's undistributed
earnings other than after-tax net income for the period."
Article 28-1 of the Company's Articles of Incorporation:
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, as well as deducting the share of the affiliates' interests recognized by
equity method and adding the cash dividends paid out by the affiliates to the Company recognized by equity
method. 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, 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.
(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
112
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 25
NET PROFIT (LOSS) FROM CONTINUING OPERATIONS” of this annual report for further explanation.
3. Information regarding board of directors' approval of employee compensation
(1) Amount to be paid in the form of cash and stocks to employees and directors: The board has approved
NT$187,000,000 to be paid in cash to employees and NT$75,000,000 to directors for 2021.
(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 2020, the Company
issued NT$68,500,000 to employees and NT$34,050,000 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 “VI. Financial Overview: 4. Financial report of the most recent
year 25 Profits from Continuing Operating Units” of this annual report for further explanation.
(9) Share Repurchases:
1. Those having been executed: None.
2. Those being executed: None.
2. Issuance of Corporate Bonds:
Type of Corporate Bonds
Issuance (Processing) Date
Denomination
Issue Price
Lump Sum
Interest Rate
2021 1st Unsecured Straight Corporate Bonds
Octorber 8, 2021.
NT$10,000,000
Issued at denomiatnion
NT$7,500,000,000
A fixed rate of 0.70% per annum
113
Fundraising Overview
Term
Guarantor
Trustee
Underwriter
Certifying Attorney
Certifying CPA
Repayment Method
Outstanding Principal
Terms of Redemption or Prepayment
Restrictive Clauses
Credit Rating Agency Name, Rating Date,
Rating of Corporate Bonds
Additional
Rights
Amt. of Converted Common
Shares, Global Depositary
Receipts or other Securities
Rules for Issuance and
Conversion
Possible Dilution of Shareholding due to,
and Effect on the Current Shareholders'
Rights and Interests of, Issuance and
Conversion, Rules for Share Swap or
Subscription, or the Issuance Terms
Name of the Custodian Engaged by the
Counterparty of Share Swap
5 years; Expiration date: 2026/10/8
None
Hua Nan Commercial Bank Co., Ltd.
KGI Securities was appointed as lead underwriter
Yicheng United Law Firm
Deloitte Taiwan
Principal shall be repaid upon due in one installment
NT$7,500,000,000
None
None
Rating agency: Taiwan Ratings Corporation
Rated Entity: Walsin Lihwa Corporation
Rating: TwA-
Rating Date:2021/08/06
Not applicable
None
None
None
3. Issuance of Preferred Shares: None.
4. Issuance of Global Depositary Receipts (GDRs)
Item
Date of Issuance
October 3, 1995
November 9, 2010
Issued globally and traded on the Luxembourg Stock Exchange and London
Place of issue and trading
Total amount
Stock Exchange
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
2,224 units of global depositary receipts and 22,248 shares of securities
represented.
114
Distribution of fees incurred
from issuance and the
outstanding period of the GDRs
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 Custodial
Omitted
Agreement
2021
Current year as of
March 18, 2022
(
U
n
i
t
:
U
S
$
)
M
a
r
k
e
t
p
r
i
c
e
p
e
r
u
n
i
t
High
Low
Average
High
Low
Average
11.40
5.87
8.61
10.81
9.11
9.71
5. Exercise of Employee Stock Option Plan (ESOP): None.
115
Fundraising Overview
6. Mergers, acquisitions or issuance of new shares for acquisition of shares of other companies:
(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. Dividend income for 2021 was
approximately NT$260 million (including dividend income from the assumption of new shares issued and the acquisition of shares
in the centralized stock exchange).
116
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 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, 2021. On the record date for the share swap, January 6, 2022, 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$2,053,326,900 in exchange for 171,103,730 shares of common stock newly issued by TECO. The share swap ratio
of 1 share of the Company's common stock for 0.8333 share of TECO's common stock was calculated by reference to the due
diligence report, the evaluation of the share swap ratio and the reasonable opinion of the CPAs provided by the professional
advisors of both parties, and based on the financial information such as market prices, net worth and profitability of both
companies.
117
Fundraising Overview
2. Basic Information of Company Whose Shares Have Been Assumed
Company Name
Company Address
Responsible Person
Paid-In Capital
TECO Electric and Machinery Co., Ltd.
5F., No. 19-9, Sanchong Rd., Nangang Dist., Taipei City
Unit: NT$
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.
136,612,450
40,950,519
95,661,931
52,557,027
12,745,579
5,069,358
5,502,191
2.38
118
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
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.
Revenue Ratio
The Company and its
merged subsidiaries
Amount
(NT$ million)
%
64,423
41.1
Stainless
steel
Forging, processing and
selling of stainless steel
and nickel pipe.
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
65,297
41.7
Nickel pig iron, billets, slabs, and HR
coils
8,572
5.5
steel
Production and sales of
stainless steel upstream
raw material, nickel pig
iron, agency sales of
semi-
stainless
products,
finished
procurement
and
hedging of other metal
raw materials required
by
for
the Company
production
Real estate
Solar power engineering etc.
Commodity
Commercial
real
estate
business
Others
Parking space sales, commercial leasing,
residential housing and office buildings
sales
1,882
1.2
16,491
10.5
2. New products under development
Business unit
Wire and cables
Stainless steel
New products under development
(1) Composite cable for large machinery
(2) Cables for offshore wind turbines
(3) Wire harnesses for new energy vehicles and power supplement systems
(4) Energy storage application cables
(1) Expand the development of high-strength stainless steel supply types, sizes,
conditions and product types:
Precipitation hardening type, martensite iron series, duplex type
(2) High-performance stainless steel for automotive components with high heat
resistance, high intensity, free-machining and soft magnetic properties
119
Business Overview
Business unit
New products under development
(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
(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 increased by 2.5% year-on-year from January to November 2021 and is forecast to reach 21.34
million tonnes for the year 2021, mainly due to an 8.5% year-on-year increase in Peru, the second largest
copper producer, and a 50% increase in Indonesia, driven by newly commissioned capacity, and 11%, 66%
and 9% increases in the Congo, Panama and Mainland China respectively. Refined copper production
increased by 1.3% year-on-year from January to November 2021 and is forecast to reach 24.83 million
tonnes for the year 2021, while refined copper consumption increased by 0.6% year-on-year from January
to November 2021 and is forecast to reach 25.15 million tonnes for the year 2021, leaving a supply/demand
gap of 320,000 tonnes. As global demand for copper continues to increase, with particular focus on future
copper demand in the renewable energy sector, Chinese copper smelters continue to expand their
production capacity. China's refined copper production has exceeded 10 million tonnes for 2 consecutive
years, reaching an annual record high of 10.49 million tonnes in 2021, according to the data published by
the National Bureau of Statistics of China.
Mainland China is the world's largest copper consumer, and its annual sales of copper rods are increasing
year by year. According to the statistical analysis report released by the International Wrought Copper
Council (IWCC), the sales volume of copper rods in China reached 8.97 million tonnes in 2021, an annual
increase of 4.2%. The annual sales volume of copper rods in Taiwan has increased significantly in the past
two years. In 2020, the annual sales volume of copper rods was about 360,000 tonnes, an annual increase
of 8.5%, and in 2021, the sales volume of copper rods from January to June increased by 8.3% year-on-year,
with the estimated annual sales volume for 2021 about 390,000 tonnes. The largest demand in China's
power cable industry came from purchases from The State Grid Corporation of China (State Grid). According
to the market information memorandum provided by IWCC, it is likely that the impact of the pandemic has
delayed many projects to 2021, and the total amount of purchases by State Grid as of the end of the third
quarter of 2021 was close to the total amount of purchases in 2020. State Grid will still place large orders in
the fourth quarter 2021. It is estimated that the procurement volume in 2021 will break away from the
decline in 2020 and rebound from the trough to the level of 2019.
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 2021 is estimated as 240,000 tonnes, an increase of 4.6% over the previous year, of which
production for domestic sales was approximately 220,000 tonnes, an increase of 3.7% over the previous
year. Taiwan market benefits from the regional supply chain integration, part of the industry supply chains
back to Taiwan to invest in plant construction, and the government's three major programs for investments
in Taiwan; therefore, a total of 1,176 businesses has passed the review process, in the total investment
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amount of about NT$1.65 trillion, with the increasingly popular plant construction projects that have
increased the demand for power cables. The Taiwanese government continues to actively promote green
energy policies, attracting a large number of solar power and offshore wind power related construction.
During the pandemic, countries worldwide provided relaxed fiscal policies to drive consumer demand,
resulting in an increase in the number of residential, commercial office and public works cases, and thus the
overall market demand rebounded.
(2) Stainless Steel Business
According to International Stainless Steel Forum (ISSF), global stainless crude steel production is estimated
at 57 million tonnes in 2011. Countries around the world are gradually relaxing their epidemic control
policies, driving economic recovery and growth in steel supply and demand. The largest steel production
region was Mainland China, which produced 31.8 million tonnes of crude stainless steel, up by 5% from
2020, while Asia (excluding Mainland China and Korea) produced 7.7 million tonnes, Europe 7.2 million
tonnes and the Americas 2.4 million tonnes, up by 20%, 14% and 14% respectively from 2020.
In terms of the structure of stain less steel products, the output of plate products in 2021 was 43 million
tonnes (consisting of HR coil of 8 million tonnes (19%) and CR coil of 3.5 million tonnes (81%)), accounting
for 84% of the total output, and the output of long steel products was 8.2 million tonnes, accounting for
16% of the total output. Among the long steel products, the output of HR bars, wire rods and small steel
embryos were 3.5, 2.7, and 2 million tonnes respectively, accounting for 43%, 33%, and 24% of the output
of the long products respectively.
About 50% of the end-use applications of long steel products are used for industrial production (such as
machined parts), 21% for industrial production (e.g. machined parts), 16% for consumer durable goods and
10% for transportation. The top five long-strip stainless steel companies around the world by output are
Tsingshan, Jiangsu Delong, Walsin Lihwa, Viraj and Swiss Steel. (The above output figures are based on the
data from the research report for 2021 published by SMR, a marketing agency, and the estimates provided
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
tonnes. In addition, Jiangsu Delong is also expanding its production capacity, and with successive mergers
and alliances among Baosteel, Wuhan Iron and Steel, Taiyuan Iron and Steel, Shagang (which will cooperate
with Beihai Chengde), more 10 million tonnes steel maker groups will emerge in the future.
Benefiting from its cost advantage thanks to RKEF integration, Tsingshan and Jiangsu Delong’s low-cost
products marched into the market; Baowu Steel Group entered the Indonesian nickel iron market; Beihai
Chengde takes the advantage of its own nickel iron production capacity and cooperates with the Philippine
nickel miners; therefore, steel groups in the northern and southern parts of China are working together to
compete those in the middle part of China.
(4) Commodity Business
Global nickel pig iron production capacity is mainly concentrated in Mainland China and Indonesia. In 2020,
due to Indonesia's ban on ore exports, the movement of the nickel pig iron industry chains from Mainland
China to Indonesia accelerated, and Indonesia has become the world's largest nickel pig iron producer. In
2021, global nickel pig iron production capacity reached 1.98 million tonnes of nickel and the production
reached 1.32 million tonnes of nickel, with the production capacity up by 16.2% compared with 2020 and
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Business Overview
the production up by 18.9% compared with 2020. Among them, total nickel pig iron production in Mainland
China was 435,000 tonnes of nickel, down by 16% from 2020, mainly due to the impact of raw material
supply restrictions and the dual control of energy consumption; total nickel pig iron production in Indonesia
was 885,000 tonnes of nickel, up by 48.7% from 2020.
In 2022, China's nickel pig iron production will continue to be limited by the decline in imported nickel ore
grade and the uneconomic production caused by the dual control of energy consumption. In Indonesia, new
capacity is expected to be added at a faster pace as the disruptions from the epidemic are expected to fade
and local infrastructure such as power supply is expected to become complete. Global nickel pig iron
production capacity is expected to increase to 2.74 million tonnes of nickel this year, with production
increasing to 1.56 million tonnes of nickel.
(5) Commercial Real Estate Business
In 2021, the total commercial residential sales area in Nanjing exceeded 12.34 million square meters, setting
a new 5-year high, up by over 20% from 2020. The average transaction price exceeded RMB 28,400 per
square meter, a significant increase of over 10% compared to 2020. The renovation package (not included
in price statistics) policy that has been implemented since 2020 became the norm for transactions in the
first three quarters of 2021, effectively raising the actual transaction prices of popular properties in the core
area and increasing the profits of developers. In the fourth quarter of 2021, the growth momentum and
activity of real estate transactions were significantly dampened due to a series of debt defaults by private
real estate developers such as Evergrande. This also brings new development opportunities for strong, cash-
flow-rich enterprises.
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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 trend: In response to international net-zero emissions and the current energy policy of the
Taiwan government, the pragmatic path for Taiwan's transition to net-zero 2050 is to increase natural gas,
reduce coal combustion, and develop renewable energy to meet the increasing demand for green power
from domestic industries, while maintaining a stable power supply and taking into account the country's
competitiveness, which is so called "low carbon first, and then zero carbon". According to the information
provided by the Bureau of Energy, Ministry of Economic Affairs, the installed capacity of renewable energy
reached 10.7GW in September 2021, an increase of 128% compared to 2016, among which solar energy has
grown significantly, with a 450% increase in power generation in 2021 compared to 2016. In addition,
countries around the world, driven by the net zero transformation trend, are committed to the
development of new energy vehicles, among which the largest producing and selling and fastest growing
regions are Europe and China. Europe is the region with the highest adoption rate of new energy vehicles.
According to the report released by Canalys, in 2021, new energy vehicles accounted for 19% of the total
vehicle sales, and Europe's cumulative sales of 2.3 million vehicles were the second largest in the world,
with an annual growth rate of 61%. According to the latest data from the China Association of Automobile
Manufacturers, China sold 3.52 million vehicles in 2021, accounting for about half of the world's sales, with
an annual growth rate of 168%. According to the information from the Motor Vehicles Office, the new
energy vehicle market in Taiwan has also grown, with the total sales volume of new energy vehicles
increasing by 42% in 2021. In addition, countries worldwide also continue to optimize the supporting
environment for the development of new energy vehicle industry and accelerate the construction of
charging stations, charging piles, power exchange stations, power battery recovery service network and
other infrastructure. In this context, the demand for cables is increasing, and the cable industry is following
this wave to develop cables, related products and services for the green energy industry.
Competition: From the historical output of Taiwan's power cable market, there is an oversupply of capacity
in the overall cable market and competition is relatively fierce. However, benefited from the regional supply
chain integration of Taiwan businessmen back to Taiwan to drive the demand for plant expansion, and a
large number of residential, commercial office and public works projects, coupled with the government's
active promotion of green energy policy, market demand continues to grow.
(2) Stainless Steel Business
Development trend: After more than 100 years of development, the nature of the stainless steel industry is
not easy to make breakthrough changes. In recent years, we have seen many cases of upstream deployment
and process adjustment to reduce costs, such as the Indonesian industry connecting the RKEF production
line to the AOD to achieve the lowest cost benefit by hot iron water delivery. In terms of product
development, apart from actively developing nickel-free steel grades, major stainless steel makers are also
developing the most suitable materials for specific applications. For example, in response to the demand
for automation, the demand for wear-resistant, high-precision and zero-defect materials has increased. In
the past, key technologies were held in Japan, Europe and other countries, but Asian steel makers have also
continued to invest in research and development in recent years, and to refine their own technological
capabilities. At the same time, with the rising awareness of environmental protection, stainless steel is more
widely used in various fields, and there are many cases of replacing carbon steel with stainless steel in the
construction, transportation and other industries. In the renewable energy industry, stainless steel
components can also be found in wind turbines and renewable energy vehicles.
Competition: Global stainless steel demand will return to normal growth after a sharp rebound in 2021.
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Indonesian steel mills will dominate the Asian market with the advantage of low-cost raw materials; with
the promotion of carbon emission control policy in Mainland China, the steel mills have shifted from
incremental to value-added and started to consolidate with the strategy of eliminating the weak and leaving
the strong; the rest of the steel makers will focus on niche industrial applications with high certification
thresholds to add value to their products through end-use differentiation.
(3) Commodity Business
Development trend: Stainless steel plants in Mainland China and Indonesia are expanding their
production capacity, and the demand for nickel pig iron and scrap steel will continue to rise, while
nickel pig iron in Indonesia has a cost advantage and is economical for downstream steel plants. In the
following years, there will still be new manufacturers entering Indonesia to invest in RKEF production
line.
Competition: Indonesia's RKEF production lines have grown significantly since 2021 and will continue
to open up significant capacity. In addition to continuing to provide additional stainless steel
production capacity in Indonesia, the production lines will also make up for the possible decline in
nickel pig iron supply in China. In addition, in response to the continuous growth of the new energy
industry chain, some of the RKEF production lines have started to change their processes to make their
output more flexible, so that they can flexibly switch between iron pig nickel and ice-nickel and that
the market supply and demand can be in dynamic balance.
(4) Commercial Real Estate Business
Development Trends: Nanjing's real estate industry has shown a trend of comprehensive development in
the past five years, with large-scale development around the city and the expansion of the city to the
suburbs and suburban counties, bringing a continuous increase in the city's population, industrial
development, infrastructure investment and overall economic capacity. The focus of development in the
city center area is still on high quality and large volume complexes, the integration of commercial, office
and residential multi-styles, and on experiential and interactive products. Children's playground, catering,
leisure, entertainment and other experiential consumption become the focus of business revenue. In terms
of residential property, high-end and even top-tier blocks continue to be the main development trend,
driving the continuous upgrading of urban living quality, while in terms of office property, landmark
international Grade A offices lead the development of high-end business areas.
Competition: The central part of the city is the focus of the real estate market, where land supply has always
been rare and projects have been launched relatively rarely. After a major reshuffle in the real estate
industry in the second half of 2021, a number of enterprises with high gearing and insufficient cash flow will
be eliminated, and the industry pattern will further develop in the direction of "stronger is stronger". Stable
and strong companies with low gearing and strong cash flow will have more advantages and opportunities
in acquiring new development projects.
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Business Overview
(3) Overview of Technology and R&D
1. R&D Expenses and Results
R&D Expenses
From Jan. 1, 2021 to March 18, 2022, the R&D expenses were around NT$ 240
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.
Wire and cables
(3) Continue to create core technologies in flexible cable and rubber, move
toward light weighting, and co-develop related products and global markets
with our international strategic partners.
(4) Co-develop advanced material technologies and harness units of ultra-high
power electric energy supplement system.
(5) Develop waste cross-linked PE recycling technology.
R&D Profile
(1) Expand the development of high-strength stainless steel materials, size,
condition and product type:
-
improvement of product sizes and specifications, high-intensity
martensite iron series
- precipitation hardening type; duplex type
(2) Accelerate the development of high performance stainless steel for
automotive parts and components.
Stainless steel
(3) Actively invest in the development of high-strength and wear-resistant
stainless steel for machinery and equipment
(4) Continue to develop high-performance stainless steel for computer,
communications, and consumer electronics products
(5) Combine the middle and downstream industrial chains to enhance industrial
value and provide service programs:
- Development of stainless steel with high heat resistance for high
temperature transmission network cables
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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
Mass
production
completion
time
Main reasons that future
development
will succeed
We plan to invest NT$50,000,000 for R&D, including:
Wire Harness for Renewable
Energy Vehicle and Power
Replenishment System
(1) Cable development
and design
(2) Material
development and
certification
2022
Wire and
cables
Energy Storage Application
Cables
Certified development of
materials
2023
Development of waste
cross-linked PE recycling
technology
Development of cross-
linked material
extraction method
development
We plan to invest NT$94,000,000 in R&D, including:
High strength and wear
resistant stainless steel
High strength and high
corrosion resistant stainless
steel
Highly weldable stainless
steel
Stainless
steel
Mass production
improvement stage
Mass production
improvement stage
Development stage
2022
2023
2022
2022
High strength and high heat
resistant stainless steel
Trial production stage
2022
Highly machinable soft
magnetic stainless steel
Development stage
2022
(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) Having the ability of
independent development
and verification of
materials.
(1) Having the ability to
analyze and detect
materials
(2) Conduct research with
academia and research
units
Hot rolling process
parameter setting, heat
treatment parameter
setting
Component design, hot
rolling process parameter
setting
Component design, hot
rolling process parameter
setting, heat treatment
parameter setting
Component design, hot
rolling process parameter
setting, heat treatment
parameter setting
Component design, hot
rolling process parameter
setting, heat treatment
parameter setting
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 leader 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 response to 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. For cold finished bars, we
will focus on the development of direct customer channels and the expansion of available specifications in order
to expand our market share; for plate products, we will use digital analysis to assist in material preparation and
production scheduling, so that the delivery time can be close to customer expectations.
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 grasp upstream raw materials 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 cold finished
bars, 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 key
development industries, in cooperation with the national policy and industry development potential; we will
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also deepen the technical service capacity and market management, hoping to enhance the added value of our
products and brands.
3. Commodity Business
Short-term: The Company's RKEF production line was completed after mid-2021 and the power plant was
started up at the end of 2021, and all production lines have been in full production in 2022. We will continue to
ensure stable activation and full production operation, strengthen the stability of upstream raw materials for
stainless steel, and enhance our competitiveness. Regarding our agency services, considering the impact of the
epidemic and the uncertainty of the supply chain, we actively negotiate with Indonesian suppliers through our
agency platform in order to reduce the cost of raw materials and improve the accuracy of delivery to meet the
needs of our customers, and to strengthen the cooperative relationship between the Taiwanese industry and
upstream suppliers, in order to enhance the international competitiveness of Taiwan stainless steel products
and further increase the volume of orders received by our agency services.
Long-term: In response to the trend of climate change and sustainable development, we will continue to pay
attention to the development of environmental protection policies and the trend of the industry, and study the
most suitable green energy and carbon reduction projects to create a win-win situation for both the economy
and the environment. Our agency service will continue to take advantage of the agency advantage to stabilize
the market supply and demand, provide a stable source of materials with competitive costs, avoid the risk of
price fluctuations and reduce the pressure on inventory capital (i.e., value-added services) to promote the
overall effectiveness of the value chain of the stainless steel industry in Taiwan, and strive to achieve the long-
term goal of simultaneous growth in the volume of orders received by the agency and the price of the stainless
steel industry in Taiwan.
4. Commercial Real Estate Business
Short-Term: The second phase of the Company's real estate business, Phase II Lot AB, Building No. 6, was
officially completed. The leasing of office space on the 5th-12th floors has been completed, and the leasing and
opening of high-end restaurants on the 1st-4th floors has been completed, generating stable rental income.
No.1 Office Tower, Phase II of Lot AB will soon begin to open for official visits and tours from customers, and
will then be combined with the completion and delivery schedule to expand its customer base. At the same
time, the design and development of the third phase of Lot AB will be steadily advanced in line with international
Grade A office standards and the most advanced green building standards, in order to further enhance the
added value of the product.
Long-term: Walsin Centro
integrates various residential, commercial and office properties with a
complementary relationships and we will increase overall brand value and create economies of scale through
integrated marketing. High-end residential will bring brand reputation and market influence to the commercial,
while high-quality commercial will bring support and services to the office. The landmark Grade A office will
further enhance the brand status of the commercial and residential sectors, bringing abundant traffic and
consumption to the commercial sector and better services to the residential customers. The maturation of each
new industry is consolidating the competitive advantage of the existing industry and enhancing the value of the
existing industry. After more than ten years of continuous development, Walsin Centro has become a new urban
landmark in Nanjing and the Walsin Centro project has become a successful model for commercial development
in Nanjing, with its market influence and brand reputation continuing to expand and its commercial and
business value continuing to rise. For long-term business development, we will continue to strengthen the
operational capacity and management efficiency of large urban complexes, creating brand value with efficient,
quality and reliable management and services. We will also make full use of our existing brand influence and
leverage our years of accumulated development experience and industry product advantages to actively seek
new development projects with low risk and high profitability.
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Business Overview
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 2021 sales of the Company's power
cable products was approximately NT$18.4 billion, and that of bare copper wise was about NT$44.5 billion.
According to the Department of Statistics of the Ministry of Economic Affairs, the domestic sales of power
cable products in Taiwan in 2021 was estimated to reach NT$53.8 billion. Therefore, the Company
consistently maintains a market share of 20% or more and of 30% or more in Taiwan's power cable and
copper bar markets, respectively.
(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, cold finished 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 cold finished bars occupy a
significant position on the global market and we offer customers optimal lead times and services with sales
offices distributed across the Taiwan Strait, a vertically integrated supply chain and a standardized
production process.
Sales of stainless steel products made by the Company in Taiwan amounted to 643,000 tonnes in 2021. The
Company's domestic market shares reach 70% (wire rods), 30% (hot-rolled steel coils), 35% (cold-rolled steel
coils) and 30% (cold finished bars); the Company’s global market shares are 9% (wire rods), 8% (hot-rolled
steel coils) and 3% (cold finished bars).
Note: The foreign market shares are estimated only in respect of the territories to which we sell products
and the available specifications.
(3) Commodity Business
Our RKEF production lines will be completed and started in 2021. We produce nickel pig iron, the upstream
raw material for stainless steel manufacturing, which is mainly supplied to local steel mills in Indonesia for
smelting stainless steel. Sales of nickel pig iron in 2021 were 114,000 tonnes, with full production and sales.
According to SMM's research report, the Company's 2021 nickel pig iron production accounted for
approximately 1.6% of Indonesia's total production.
In terms of agency service, the Company has been acting as an agent for the sales of Indonesia Tsingshan
since May 2020, and the products we sell as an agent are mainly stainless steel products such as stainless
steel billets, slabs and hot rolled steel coils. The main sales targets are Taiwan and Taiwan-invested overseas
enterprises, with the aim of maintaining the international competitiveness of Taiwan's stainless steel plate
products and promoting the overall efficiency of the value chain of the stainless steel industry. The Company
received about 680,000 tonnes of orders in 2020 and about 980,000 tonnes in 2021, mainly because the
recent geopolitical and supply chain instability have caused the switching effect, forcing Taiwan
manufacturers' sales to further increase the demand for raw materials.
(4) Real Estate Business
In 2021, the area of business land transactions in Nanjing was 8.226 million square meters, down by 21.6%
year-on-year. However, the total transaction amount of RMB207.4 billion was a record high, up by 2% over
2020. The development scale of Walsin Centro in Nanjing Hexi is 1 million square meters, and the finished
130
residential units have been sold out. The commercial shopping center has been successfully opened and
operated. Currently, the main products are the opening and operation of Office Building No. 1 and the
design and planning of Office Building No. 2.
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 3.9% in 2022. In terms of refined copper production, ICSG expects refined
copper production to grow by 3.9% in 2022. In terms of the refined copper sales, the expected continued
recovery of the world economy will benefit the copper end-use sector and help sustain growth in copper
demand, with refined copper consumption forecast to grow by 2.4% in 2022.
With The strong demand for infrastructure in China after the pandemic of COVID 19, total power cable
purchases from the national grid are recovering, and demand for copper and cable construction in the green
energy, electrical appliance, and electronic semiconductor industries remains strong, which supports
copper prices at a high level, meaning demand for cable-related products is expected to be strong. In Taiwan,
in view of the global supply chain shift and changes in the international situation, the government considers
that there is still a demand for Taiwanese businesses to return to Taiwan for investment, and in order to
maintain the strength of private investment and encourage manufacturers to upgrade and transform
intelligently, and in line with the government's goal of net zero carbon emissions by 2050, the Executive
Yuan has approved to extend the period of acceptance of the Action Plan for Welcoming Taiwan Businesses
to Invest in Taiwan to 2024 for those businesses that are gradually implementing carbon emission reduction.
The government is actively promoting green energy policies such as offshore wind power and solar
photovoltaic, and Taipower is scheduled to issue corporate bonds of over NT$100 billion in 2022 for the
construction of offshore wind power and green power facilities. The overall bond issuance amount will be
a record high compared to the actual issuance of NT$62.1 billion in 2021. Taipower will start four major
projects in 2022, including the first phase of transmission and substation project in the Southern District,
the renovation of the Dahlin Power Plant, the first phase of Green Energy (160MW of renewable energy will
be added by 2025), and the new construction of the Baoshan ultra-high voltage substation, as well as the
current plan to add many new units, which will boost the demand for cable and lead to good visibility of
future orders.
(2) Stainless Steel Business
It is estimated that the global stainless steel production will reach 57 million tons in 2021, an increase of
12% compared to 2020. The low base period led to a relatively high increase due to the decline in steel
production in the early stage affected by the epidemic control measures. However, with the epidemic
slowing down and the market demand growth returning to normal, it is estimated that the global stainless
steel production will grow by about 3% to 4% in 2022.
In addition, Mainland China is still the world's largest supplier, producing over 31.78 million tons in 2021,
accounting for 56% of global production. However, production growth is expected to slow down in the
future due to the impact of the carbon emission control policy in Mainland China. The main growth will be
found in Indonesia, which will grow from the current 5 million tons to 10 million tons.
(3) Commodity Business
According to SMM's research report, Indonesia's nickel pig iron production will increase by 280,000 tons of
nickel in 2022, which will compensate for the reduction of nickel pig iron production in Mainland China due
to the dual control of energy consumption. Local stainless steel production in Indonesia continues to expand,
with an estimated 2 million tons of new production, which will also consume new nickel pig iron output.
The proportion of stainless steel production using nickel pig iron is expected to continue to rise despite the
continued opening of nickel production lines in Indonesia. In addition, the demand for nickel for batteries
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Business Overview
continues to rise, and the production process of nickel pig iron to high ice nickel may shift part of the nickel
pig iron production capacity to high ice nickel, and the supply and demand of nickel pig iron is expected to
be in the process of dynamic balance. In terms of agency services, it is estimated that the supply chain
anomalies will ease in 2022, and the volume of stainless steel imports from Taiwan is expected to decrease
by 10% and return to normal. The cost advantage of Indonesia, the cancellation of export tax rebates and
tax increases in Mainland China, and other uncertain factors are expected to lead to a high dependence on
Indonesian stainless steel imports in the future.
(4) Real Estate Business
Nanjing Jiangyou District is building a Yuantong shopping district centered on the Yuantong subway station
to create a "demonstration area of international consumer center city". With the completion of nine super-
high-rise buildings around the central park of Hexi, Yuantong is becoming the business office center with
the highest standard of construction and the largest number of new projects in Nanjing, and the position of
the Jiangyou District and the business center of Hexi in the urban structure of Nanjing has become more
solid. After becoming a financial center, the core area of Yuantong will also become the center of business
offices and commercial consumption in Nanjing.
Looking ahead to the development of Walsin Centro, the opening of No. One Office Building will bring new
opportunities for Walsin Centro projects and establish Walsin's position as the first tier and leading brand
in Nanjing's quality business office industry. The arrival of many headquarters-type office enterprises in the
future will provide stable rental income and bring sufficient customer flow and stable consumption to the
shopping center of One Mall, thus promoting the steady development of the real estate sector.
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) he 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.
(2) The private sector faces oversupply and price competition.
(1) Through Industry 4.0 and production and sales intelligence to improve efficiency and service
Response
Measures
capacity.
(2) We will actively respond to the government's energy policy and grasp and deepen the
infrastructure business opportunities such as renewable energy, power plant and grid
renewal and expansion.
Competitive
Niche
(1) The long strips are produced and sold by a single plant, with resource integration, economies
of scale and rapid and stable delivery in cooperation with rolling schedules.
(2) Plate materials have the advantage of short delivery period.
Stainess Steel Business
132
Stainess Steel Business
(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.
(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.
(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
Response
Measures
suitable markets for export
(4) Solving capacity bottlenecks
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.
through capital expenditures,
improving
Competitive
Niche
Favorable
Factors
Unfavorable
Factors
Response
Measures
Competitive
Niche
Commodity Business
(1) RKEF production line is located in Indonesia, which is a major producer of nickel ore in the
world and has advantages in raw material prices and production costs.
(2) The RKEF production line is equipped with its own power plant, which can supply electricity
for full production without any issue.
(1) With Mainland China's dual control of energy consumption, Indonesia nickel pig iron is
expected to make up for the possible production reduction gap in Mainland China.
(2) The Indonesian government continues to ban the export of nickel ore, and the local raw
material has a cost advantage.
(1) As environmental awareness is increasing, carbon reduction has become a common issue
worldwide, and governments around the world continue to strengthen environmental
controls. Future related fees or taxes will be unavoidable.
(1) We will continue to research on and promote the development of the most suitable green
energy and carbon reduction projects.
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
133
Business Overview
Real Estate Business
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.
(5) Corporate advantages: As a diversified corporate group with large asset size, abundant cash
flow and good brand reputation, the Company has more opportunities and competitiveness
in acquiring new development projects.
(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.
Favorable
Factors
Unfavorable
Factors
(2) 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.
(3) 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.
(1) Optimizing the development process and improving the accuracy of drawings, outsourcing
and procurement through the improvement of internal processes to save the development
cost of the project.
(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.
Response
Measures
(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.
(5) Taking advantage of the real estate industry adjustment to actively seek new development
projects with low cost and high profit expectations.
(2) Key applications and production processes of main products
1. Key Applications of Main Products
134
Main Products
Key Applications
Copper material
Wire and cable conductor, home appliances, electrical and electronic devices,
transformers, etc.
Power cables
Primarily used for power plants, power transmission and distribution, plant facilities,
transportation construction, construction of power transmission lines, etc.
Steel billets
Hot-rolled wire rods, hot-rolled straight rods, flanges, seamless steel pipes, etc.
Flat billet
Wire rods
Hot-rolled coil (flat
panel category)
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
Cold rolled coil (flat
panel category)
Building decoration, kitchen utensils, appliances, medical equipment, electronic
communications, chemical tanks and steel tubes
Peeled straight rods
Forging materials, turning parts, electric machine accessories, etc.
Cold finish straight
rods
Shafts, medical equipment, furniture decoration items, turning parts, electric
machine accessories, etc.
Stainless steel
seamless pipe
Petrochemical heat exchanger; fluid pipe and instrument pipe boiler station pipe;
nuclear power station pipe; shipboard fluid pipe and instrument pipe; turning pipe.
Nickle pig iron
Our products are mainly supplied to and used by steel mills to smelt stainless steel,
and processed into semi-finished stainless steel products such as billets, slabs, HR
coils and HR straight bars.
Real estate
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
135
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
Billet
Reheating
Furnace
HRM 200
RB 200
Intermediate 3-
Roll Block
Pre-Finishing 3-
Roll Block
Finishing Block
Raw Material
EAF
VOD
Billet/ Slab
CC
Cold/Hot-Rolled Coil
MRP
Hot-Rolled-Black Coil
Hot-Rolled Coil
Hot Rolling Mill
Reheating
Furnace
Outsourced
Slab
Wire rod
HR Wire Rod
Dual-Module
Block
Bar in coil
Pickling Line
Annealing
Furnace
HR Bar in Coil
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) Commodity Business
Wet laterite ore
Shatter and
filter gravel
Electrode
paste
Electrode
cover
Drying
Drying kiln
Dusting
Furnace gas
Electric
furnace
Dust
collector
Drying
Smoke
Anthracite
Limestone
Pulverized coal
Bituminous coal
Pulverized coal
Preparation
system
Batching
station
Dust
collector
Drying
Rotary kiln
Slag
Nickel-iron
alloy
Dust
collector
Drying
Calcined ore
136
Billet
(3) Supply Status of Main Raw Materials
Business Unit
Main Raw Materials
Description of Supply Status
Copper plates
Wire and
cables
Polyethylene
Other chemical materials
Pure nickel, high carbon nickel
iron, high carbon ferrochrome,
stainless steel scraps, grade 1
steel scraps, molybdenum iron,
etc.
Stainless
Steel
Commodity
Laterite nickel ore
Land
Construction Projects and
Materials
Commercial
Real Estate
Retailers
Primarily based on
long-term annual contracts and
supplemented by spot purchases. Procurement must be
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.
further
Laterite nickel ore used for nickel pig iron is sourced from local
suppliers in Indonesia, and the supply is stable.
Implement land reserves pursuant to the Company’s real
estate development strategy and participate in government
land auction tenders.
reduces costs and enhances
The Company
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
2020
Item
Name
Amount
Percentage of
Total
Purchases (%)
-
Other
(Note)
Net
Purchases
-
-
96,999,993
100.0
96,999,993
100.0
Unit: NT$ thousands
Relationsh
ip with
Issuer
-
-
-
Name
Amount
2021
Percentage of
Total
Purchases (%)
Supplier A
Other
(Note)
Net
Purchases
21,718,879
110,511,261
16.4
83.6
132,230,140
100.0
Relations
hip with
Issuer
-
-
-
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
2020
2021
Item Name
Amount
Percentage of
Net Sales (%)
Name
Amount
Net Sales
156,664,766
Note: There is no customer accounting for more than 10% of the total sales amount.
112,546,603
Net Sales
100.0
Relations
hip with
Issuer
-
Percentage of
Net Sales (%)
100.0
Relations
hip with
Issuer
-
137
Business Overview
(5) Output volume and value for the last two years
Currency Unit: NT$1,000
Volume Unit: Tonne
Year
Production
value/main product
Bare copper wire
Wire and cables
Steel strands
Stainless steel strips
and bars
Stainless steel coils
Seamless steel pipes
Nickle pig iron
Total
Production
capacity
252,000
49,414
110,000
2020
Production
volume
179,540
Value
Production
capacity
26,181,718
252,000
2021
Production
volume
201,646
37,176
73,254
8,373,610
1,727,335
52,920
140,000
48,143
75,911
Value
44,078,147
14,445,559
2,094,465
555,720
465,909
25,822,376
562,200
454,596
33,907,526
336,000
14,400
293,378
13,869
-
-
17,120,951
2,365,798
-
81,591,788
311,000
27,308
355,397
16,229
24,810,636
2,403,736
36,000
14,258
4,397,473
126,137,542
Note: Product capacity means the quantity that can be produced under normal operation with the existing
production equipment while taking into account factors such as work stoppage and holidays.
(6) Sales volume and value for the last two years
2020
Currency Unit: NT$ 1,000
Volume Unit: Tonne
2021
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
Nickel pig
iron
Others
(Note)
Total
107,301
14,032,750
76,782 14,355,105 124,428
24,434,199
73,114 19,390,778
38,126
9,993,726
1,309
338,225
46,484
15,739,654
2,942
781,564
77,094
1,817,662
1,922
41,465
74,081
2,038,377
2,984
80,171
324,350
19,148,761 106,619
7,517,159 316,417
23,423,375 122,845 11,195,453
247,348
13,858,213
53,539
3,057,936 279,445
21,658,072
73,332
5,802,001
6,496
1,036,023
7,067
1,313,758
7,567
1,247,585
8,429
1,294,987
-
-
-
25,528,265
-
-
-
14,258
7,201,148
507,555
-
21,828,321
-
-
-
549,081
85,415,400
27,131,203
117,570,731
39,094,035
Note: “Others" include sales of non-core business products as well as real estate business, rental and product
income revenues.
138
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
2020
4,931
38.9
9.5
0.5
9.7
43.0
28.3
18.5
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
2020
2,676
39.2
10.0
0.9
16.3
43.3
27.1
12.4
As of March 18, 2022
Current Year as of
March 18, 2022
7,070
36.6
6.0
0.4
7.8
39.3
38.1
14.4
As of March 18, 2022
Current Year as of
March 18, 2022
2,838
39.1
9.9
1.0
18.4
42.5
25.4
12.7
2021
6,995
36.5
6.0
0.4
7.7
39.2
38.3
14.4
2021
2,805
39.0
9.9
0.9
18.2
43.0
25.5
12.4
139
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.
Offshore Plants: Changshu Plant
Punishment Date
Punishment Letter
No.
July 13, 2021
Su-Huan-Sing-Fa-Zi-(2021)-81-No. 56
Hai-Zong-Fa-Huan-Zi-(2021)-No. 6
Hai-Zong-Fa-Huan-Zi-(2021)-No. 8
Punishing Unit
Reason
Punishment
for
Changshu Ecological Environment Bureau, Suzhou City
Improper disposal of hazardous waste and three cleaning line equipment without EIA
permit application
Countermeasures
Basis
Legal
Punishment
for
Violations
We immediately appointed a qualified third party to conduct the EIA supplemental
procedures for the cleaning line and appointed an environmental custodian to visit the
factory to
immediate
investigate environmental non-conformities and make
improvements.
Paragraph 2 of Article 81 of the Law of the People's Republic of China on the Prevention
and Control of Environmental Pollution by Solid Waste
Article 79 of the Law of the People's Republic of China on the Prevention and Control
of Environmental Pollution by Solid Waste
Article 15 of the Regulations on the Administration of Construction Project
Environmental Protection
Paragraph 2 of Article 81 of the Law of the People's Republic of China on the Prevention
and Control of Environmental Pollution by Solid Wastes: "Hazardous wastes shall be
stored with protective measures that comply with national environmental protection
standards. It is prohibited to mix hazardous wastes with non-hazardous wastes for
storage.
Article 79 of the Law of the People's Republic of China on the Prevention and Control
of Environmental Pollution by Solid Wastes: "Entities that generate hazardous wastes
shall store, utilize and dispose of hazardous wastes in accordance with relevant state
regulations and environmental protection standards, and shall not dump or pile them
up without authorization.
Article 15 of the Regulations on the Administration of Construction Project
Environmental Protection stipulates that the environmental protection facilities that
need to be built for construction projects must be designed, constructed and put into
operation at the same time as the main project. In addition, the provisions of paragraph
1 of Article 19 states that: A construction project for which an environmental impact
report and an environmental impact report form are prepared can only be put into
production or use if the supporting environmental protection facilities have passed the
acceptance inspection; otherwise, it shall not be put into production or use.
Amount of Penalty
RMB 793,000
Offshore Plants: Jiangying Walsin Steel Cable
Punishment Date
August 13, 2021
Punishment Letter
No.
Xi-Cheng-Huan-Fa-Gao-Zi-No. 2021-No. 07048
140
Punishing Unit
Wuxi Ecological Environment Bureau
Reason
Punishment
for
Countermeasures
for
Basis
Legal
Punishment
Violations
Amount of Penalty
1. The spray pump of the acid mist tower of the pickling tank of the Company was out
of service. The spray liquid was tested by pH test paper to be neutral.
2.1# galvanizing line dust removal facility pipeline is disconnected, and the dust
removal equipment did not operate normally.
1. The lower limit of the pH value of the spray liquid for automatic alkaline addition has
been set.
2. Strengthen the preventive maintenance of equipment, and replace the spray liquid
every two weeks.
3. Establish a maintenance management account for the acid mist tower equipment,
and make emergency inventory for the commonly used spare parts of the equipment
for timely maintenance.
4. Increase the sound and light alarm device for overload stoppage, strengthen the
daily inspection of equipment operation on duty and keep records, and make a good
management of equipment failure by "machine prevention + human prevention".
Article 20 of the Law of the People's Republic of China on the Prevention and Control
of Atmospheric Pollution
Enterprises, institutions and other producers and operators that discharge pollutants
into the atmosphere shall set up air pollutant discharge outlets in accordance with laws
and regulations and the provisions of the State Council's competent department of
ecology and environment. It is forbidden to discharge air pollutants by evading
supervision by means of stealing, tampering with or falsifying monitoring data,
temporarily suspending production for the purpose of evading on-site inspection,
opening emergency discharge channels in non-emergency situations, and abnormally
operating air pollution prevention and control facilities.
RMB 200,000
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 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
141
Business Overview
protection efforts and vocational safety & health condition. We will strive to enhance environmental
performance, reduce environmental
international
competitiveness. Walsin has completed the integration and version conversion of its management system at all
of its factories at home and abroad in 2018, with the certificates being valid for three years. The relevant
certificate documents are placed in the document management section of Walsin Lihwua website
image and boost our
improve corporate
loss,
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. In 2015, 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. Hsinchuang, Yangmei, Taichung, and Yanshui Plants have also obtained 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
Product volume
產品量（公噸）
(metric tons)
Emission (CO2e in metric
排放量（公噸CO2e）
tons)
Intensity (CO2e in metric tons
強度
/Product volume in metric tons)
（公噸CO2e／公噸產品量）
1,045,778
1,021,880
866,022
904,500
888,209
0.54
0.58
948,618
0.55
0.40
0.39
0.41
0.40
0.40
0.45
811,425
0.42
413,876
422,140
334,703
353,325
364,590
421,178
366,881
396,225
391,899
397,647
227,751
225,795
219,841
臺灣
Taiwan
Overseas
海外
臺灣
Taiwan
海外
Overseas
臺灣
Taiwan
海外
Overseas
臺灣
Taiwan
海外
Overseas
臺灣
Taiwan
海外
Overseas
2017
2018
2019
2020
2021
y
t
i
s
n
強
e
t
度
n
I
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
1200000
1000000
800000
600000
400000
200000
0
排
E
m
放
量
i
s
s
i
o
n
142
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 2021 met the effluent criteria.
The recycling ratio of Taiwan plants reached as high as 94%.
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. The overall waste recycling
rate of Walsin copper wire, wire and cable and stainless steel reached 96.84%, of which the non-hazardous
waste recycling rate was 98.10% to 99.03%; hazardous waste was 77.77% to 99.48%. Except for some of the
waste produced by self-recycling and reuse, the rest are entrusted to qualified manufacturers for removal,
treatment or reuse. In 2021, the output of waste in Taiwan and overseas factories decreased by 19% compared
with 2020; in 2021, for the Taiwan plants, the waste recycling rate of harmful waste increased by 0.1% compared
with 2020, mainly because all the waste acid from Yanshui Plant was transported to the Taichung Plant for waste
acid treatment and reuse and process improvement and adjustment, thereby reducing the output of dust
collection ash and sludge, and the landfill rate in Taiwan and overseas regions is maintained at <1% target. 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 tonnes of oxide ballast and
nearly 60,000 tonnes 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 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 plants in 2021 (Unit: Tonne):
Plant
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
92,408.71
64,024.41
156,433.12
33,086.98
5,706.02
38,793.00
745.58
60.49
-
327.36
745.58
387.85
183.55
407.75
3.50
-
187.05
407.75
95.45
7.28
102.73
49.50
1,627.30
1,676.80
93,310.23
64,359.05
157,669.28
33,727.78
7,336.82
41,064.59
99.03%
0.80%
99.48%
0.00%
99.22%
0.47%
98.10%
0.54%
77.77%
0.05%
0.07%
Burial rate
Other treatment
(e.g., physical
treatment)
Note: Except for the hazardous waste from dust collection by Yanshui Plant and Yantai Plant, which are
22.18%
0.06%
0.25%
0.01%
1.21%
0.15%
0.51%
0.10%
0.00%
94.47%
0.46%
0.99%
4.08%
recycled in the plant, and the waste acid from Taichung Plant, which is disposed of and recycled in the
143
Business Overview
plant (27,067.75 tonnes 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:
Energy saving and carbon reduction has become the most concerned issue in the international community. To
reduce energy consumption and greenhouse gas emissions and to improve production efficiency and
competitiveness have been the objectives that the Company are striving for. Since 2015, Walsin Lihwa has set
up an energy saving and carbon reduction management organization in each plant, set annual targets and
various energy saving and carbon reduction measures, and held regular meetings to review and set up an energy
management E-system for real-time management. There are four plants in Taiwan that are required to file
annual energy returns, and all of them have met the 1% requirement of the competent authorities, with an
average electricity saving rate of 2.71%, higher than the 1% target value set by the Energy Bureau. In 2021, the
total energy saving rate of Taiwan and China plants reached 1.76%, and a total of 82 carbon reduction plans
were proposed, with a total carbon reduction of 8,086.13 metric tons of CO2e/year. Taiwan plant saved
approximately NT$33,785,571 and the overseas plants saved approximately RMB547,777 and MYR44,097
In addition, in order to effectively manage the efficiency of energy use, the Environmental Safety and Health
Management Committee has developed a five-year energy management plan, the goal of continuous annual
energy savings and carbon reduction of 1% since 2020, and is expected to effectively reduce environmental
pollution and reduce greenhouse gas emissions, so that energy can be used reasonably and most efficiently to
meet the challenges of climate change.
Energy Management
System Counseling
Invited an energy consultancy
company to give counseling to
Taiwan plants on ISO50001:2011
Introduction of Energy
Management System ISO50001
Maintained Energy
Management System /
Transition to New Energy
Taiwan plants and overseas plants
Management System
implemented energy management
under the provisions of the ISO
Management System
Passed New Green House
Gases Certification (Scope
3 added)
⚫ All of Taiwan plants passed new
ISO14064-1:2018 certification
⚫ Overseas plants installed the
energy management platform
ISO50001
Certification of New ISO14064-1:2018
Certification of Energy
Management System ISO50001
Passed Energy Management
System Certification
⚫ Taiwan plants obtained
ISO50001:2011 certification
⚫ Overseas plants (Shanghai and
Yantai Plants) obtained
SO50001:2011 certification
Introduction of New ISO14064-1:2018
Passed New Energy Management
System Certification
⚫ Taiwan plants obtained
ISO50001:2018 certification
⚫ Overseas plants (Shanghai and
Yantai Plants) obtained
SO50001:2018 certification
⚫ All of Taiwan plants obtained new
ISO14064-1:2018 certification
⚫ Overseas plants installed the
energy management system
ISO50001
⚫ Suppliers-Green Supply Chains
⚫ Carbon Footprint of each plant
Net Zero Emissions
Renewable Energy
Installation- Wind and Solar
Power Generation
144
2021 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
reduction
(t)
Amounts saved
for carbon
reduction
Taiwan
Plant
Manufacturi
ng process /
Offices
Overseas
Manufacturi
ng process
Electricity (1000
kWh)
Natural gas
(1000 m3)
Total
Electricity (1000
kWh)
Natural gas
(1000 m3)
56
4
60
19
3
11,879.23 102,921.68 6,438.54
349.83 13,178.22
725.82
NTD 33,785,571
- 116,099.90 7,164.36
1,205.80 10,447.08
29.27
1,102.42
873.00
48.82
RMB
MYR
547,77716,
44,097
Total
22
11,549.50
921.82
Approx.
NTD 36,456,102
8. 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 2021, our plants' investment in environmental protection equipment totaled NT$90,884,000:
2021 Environmental protection
accounting expenses
Taiwan plants (NT$1,000)
Mainland China plants
(RMB1,000)
Malaysian plant
(MYR1,000)
Environment protection
cost item
Expenses
Capital
expenditures
Expenses
Capital
expenditures
Expenses
Capital
expenditures
Environment
protection
cost
Category
Environment
Equipment
cost
Environment
protection
related
management
fee
Other
environment
protection
related fees
E01-01
prevention expenses
Pollution
0
87,566
0
3,317
Resource
344,403
E02-01
circulation fee
E02-02
resources fee
E02-03
procurement
Natural
Green
E02-04
training fee
Educational
E02-05 Test-derived fee
E02-06 Monitoring fee
E02-07 R&D cost
E02-08 Social activities
cost
E02-09
compensation cost
Damage
E02-10 Fees charged by
governments
0
17
33
677
869
2,081
0
0
12,705
0
0
0
0
0
0
0
0
0
0
9,363
25
0
2
114
665
18
35
993
99
0
0
0
0
0
0
0
0
0
0
0
20
0
0
0
0
35
0
0
0
5
60
0
0
0
0
0
0
0
0
0
0
0
0
60
Sum
Subtotal
360,785
87,566
11,314
Total
448,351
3,317
14,631
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 2021, for sake of the process improvements, all of its plants invested in pollution prevention for a
total of capital expenditure of NT$686,856,000 (Taiwanese plants) and RMB 148,843,000 (overseas plants). They
include the pollution prevention equipment valued at NT$100,000/RMB20,000 and above and are listed as
follows:
145
Business Overview
(1) Taiwanese plants
Plant area
Equipment name
Quantity
Yanshui
Yanshui
Fixed radiation pollution detector
Upgrade of Continuous Opacity
Monitoring System
Yanshui
Mixed acid recycling equipment
Yanshui
Change of water measures and
addition of flowmeter for industrial
water consumption control
Yanshui
Domestic sewage improvement
Yanshui
Yanshui
Construction of solar power generation
system in Stainless Steel Business
Group
Improvement of LHF dust collection
and addition of air blowing dust
collection on the roof of electric
furnace trolley
Yanshui
Added a payloader
Taichung
Added molybdenum removal system
1
1
1
1
1
1
1
1
1
Investment
cost
(Currency:
NT$1,000)
Anticipated benefits
2,500 Prevention of the failure of radiation detection
of materials entering the factory
1,550 Compliance with the regulations on continuous
monitoring of stationary pollution sources
500,000 Recycling
Compliance with regulatory requirements
4,535
46,338 Compliance with regulatory requirements
Compliance with renewable energy laws and
regulations
110,233
Reduction of dust escape
15,000
1,800 Prevention of dust from escaping
4,900
The concentration of molybdenum in the
discharged water will be less than 0.6ppm
(2) Plants in Mainland China
Plant area
Equipment name
Quantity
Investment cost
(Currency: RMB 1,000)
Anticipated benefits
Jiangying
Walsin
Domestic sewage diversion project
Jiangying
Walsin
Oil tray in storage area of alloy scrap
shavings
Changshu
Walsin
Changshu
Walsin
Changshu
Walsin
Changshu
Walsin
Reconstruction of steam pipes in the
production area
Improvement of power supply
system in the factory working area
Quartz sand automatic sandblasting
machine
Pickling production line equipment
1
1
1
1
1
1
In order to solve the problem of
domestic sewage discharge in the
Company's factory and avoid the
sewage discharge exceeding the
standards.
Alloy waste shavings have residual
cutting fluid, and the original storage
area with epoxy flooring cannot
meet the environmental safety
system standard of leak-proof area.
Now, we use steel plate full welding
to make oil tray to prevent leakage,
and groove the floor to make oil
collection pit for cutting fluid
collection to ensure that the
environmental safety system is
qualified.
New steam piping is used to ensure
legal compliance
Improve the power supply system in
the plant
Improve production efficiency
350
278
1,100
2,000
500
143,000
Improve the working environment of
the pickling working area and
increase production efficiency
146
Plant area
Equipment name
Quantity
Investment cost
(Currency: RMB 1,000)
Anticipated benefits
Yantai
Walsin
Repair works across the north side of
the plant
Yantai
Walsin
9 cubic meters water sprinkler
Yantai
Walsin
Tunnel cleaning truck
Yantai
Walsin
Phase II of ground hardening on the
east side of the open-air area
Yantai
Walsin
Ground hardening in the waste
carbon steel storage area of the
scrap steel plant
Yantai
Walsin
Repair of storage and transportation
finished product storage area
1
1
1
1
1
1
1. Hardened area of approximately
2378 m', costing approximately RMB
250,000.
2. No additional maintenance cost
and manpower.
3. Environmental protection
requirements for hardening,
resulting in less dust.
1. Annual depreciation =
195,000RMB*0. 95/5 years = 37,050
( RMB/year)
2. Necessity of investment: To meet
the requirements of environmental
protection ultra-low energy
emission.
1. It is an environmental protection
type of expenditure, with no obvious
benefit.
2. It can relieve the pressure of
environmental protection of the
Company.
3. No maintenance cost in the future,
4. For the purchase of a cleaning
truck, its unit price was RMB
120,000, with a duration of 5 years;
annual depreciation of 12,000 * 95%
/ 5 = RMB 22,800
1. Annual depreciation =
450,000RMB*0. 95/7 years = 61,071
(RMB/year)
2. Necessity of investment: In order
to protect the social environment,
establish a good image of the
Company, cooperate with
government entities, and ensure the
Company's smooth production
operations, we plan to harden the
ground in the open-air cross-storage
area to meet the environmental
protection requirements of the
Environmental Protection Bureau.
The ground is hardened to prevent
and control dust pollution, which
meets the requirements of the
"Regulations on the Prevention and
Control of Air Pollution in Shandong
Province"
Prevention and control of dust
pollution, in line with the
requirements of the "Regulations on
the Prevention and Control of Air
Pollution in Shandong Province"
250
195
120
450
300
300
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
147
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
• 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
life,
lectures on quality of
give
mindfulness, financial management,
and travel to colleagues
• Discount for employees by signing
contracts with vendors
• Gold medal for senior staff
• Corner of Massage by the Visually
Impaired
148
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 2021, the Company spent a total of NT$10,622,000 on employee education and training. Details are as follows:
Total training participation
Total training hours
40,558
122,026
Average training hours per
employee
24.99
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:
(1) Obligation to the Company: All Company employees must be dedicated, studious, conform to all rules of the
Company and ensure confidentiality.
149
Business Overview
(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".
The health and safety system and administrative measures are as follows:
1. We comprehensively implemented ISO45001 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). Each plant makes good
use of the PDCA method and continues to carry out internal auditing drills to plan and implement according to
the current year's occupational safety and health performance indicators and in compliance with the law. 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). 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.
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 include certain labor
representatives to participate in and discuss matters relating to occupational safety and health. The number of
labor representatives in the safety and health committees set up in Taiwan factories in accordance with the law
are in line with the regulatory requirements. These committees hold meetings every quarter. 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.
150
Plants
General Members
Labor Representatives
Meetings Times
Plants in Taiwan
Plants in China
Plants in Malaysia
57
95
13
36
13
10
28
22
4
3. Optimization and upgrade of Safe Job Procedure (SJP) and Risk Assessment Database Management System
In 2021, in line with the Group's policy and organizational changes, the risk assessment system was revised for
high-risk plants ("SJP Project"), and a total of 890 Safety Job Procedures ("SJPs") were reviewed for plants with
higher risks and similar operating nature (5 plants in total: Yanshui, Yantai, Jiangying Alloy, Jiangying Walsin,
and Hsinchuang Plant), and the total SJP operation reduction ratio (retention ratio) was 69.33%. For the original
lengthy operations, we focus on high-risk operations review, and for the original disaster-frequent operations,
we definite unclear operations, so as to give a clear definition (or increase the steps and cases), so that each
participant in the formulation of SJPs such as low-level supervisors and local safety managers may participate
together, analyze the risks, and further achieve the objective of work safety.
In addition, in 2021, there were 80 incidents (including minor injuries; Note 1) and 236 near miss incidents (the
near miss frequency rate was 415.93%; Note 2), all of which were included in the start-up risk assessment, and
safety operation standards were revised to prevent disasters from happening again.
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 in 2021, we implemented 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 2022 and, in addition to the review of the workflow risk of the original workers, we will add a
special item for "machinery/equipment" risk assessment, so that each plant can use it boldly to facilitate
verification.
Note 1: Minor injury: refers to the non-temporarily incapacitated state: unable to work on the day of injury, but
can resume normal operation the next day.
Note 2: Work-related near miss frequency rate (NMFR) = number of near miss events * 200,000/total hours
experienced.
4. Training on occupational safety and health for workers
In order to protect the health and safety of employees, Walsin Lihwa Group has identified four important
training needs in each business division according to important indicators such as process type and operating
environment: "New Recruits", "In-Service Personnel (including re-training with licenses)", "Project Type", and
"Pre-site Training for Outsourcing Contractors". Training is arranged based on the degree of impact on the
company's operation and the serious rate and proportion of disasters. In 2021, 19,256 attendees took part in
physical occupational safety and health courses for employees, and a total of 2,951 attendees from our
contractors participated in the training.
Occupational Safety
and Health
Educational Training
New Recruit
Training
In-Service Personnel
Training (including re-
training for licenses)
Project Type (including
Pre-Site Training for
emergency response)
Contractors
Plants
Plants in Taiwan
Plants in China
Plants in Malaysia
Number of
Number of
Number of
Number of
Number of
Number of
Number of
Persons
Times
Persons
Times
Persons
Times
Persons
408
408
12
1,316
197
18
2,961
9,861
166
39
62
4
2,965
2,427
48
193
170
-
1,850
1,101
-
5. Emergency response: Integrated escape and fire drills implemented by the head office
In addition to annual escape drills, we encourage all employees to go through fire-fighting operations and
strengthen fire-fighting drills at the beginning of a building fire. In 2021, a total of 167 personnel at the
151
Business Overview
headquarters took escape drills, accounting for 74% of the employee who were at work on that day, and each
department escaped to the safety assembly point within the average time of escape drills of about 8.5 minutes,
and it is expected that in 2021, the first aid energy at the headquarters will be strengthened to reduce the
severity of injuries.
6. Optimization of Contractor Management Information System
In 2021, the Company has completed a number of constructions of contractor management systems in various
factories in Mainland China. At the same time, it has also upgraded the "Standardization of Contractor
Management Regulations", "Contractor
(including
Transportation) Hazard Notifications" to strengthen and implement procedures, key steps and guidelines and
incorporate contractor management into all factories through contractor project planning, including resident
manufacturers and engineering contractors, so that Walsin Lihwa's corporate culture and ethical principles and
all workers are correct in terms of occupational safety may be spread through actions, resulting in a safer and
healthier fitness environment for all employees and workers; besides, collective priority safety rules must be
strictly followed.
Insurance Specifications" and "Non-Engineering
7. Safe Job Procedure (SJP) and Risk Assessment
In 2021, the risk assessment system was revised for high-risk plants, and a total of 890 Safety Job Procedures
("SJPs") were reviewed for plants with higher risks and similar operating nature (5 plants in total: Yanshui, Yantai,
Jiangying Alloy, Jiangying Walsin, and Hsinchuang Plant), and the total SJP operation reduction ratio (retention
ratio) was 69.33%. For the original lengthy operations, we focus on high-risk operations review, and for the
original disaster-frequent operations, we definite unclear operations, so as to give a clear definition or increase
the steps and cases, so that each participant in the formulation of SJPs such as low-level supervisors and local
safety managers may participate together, analyze the risks, and further achieve the objective of work safety.
8. Continue to strengthen safety and health control intensity
We will review each accident and penalty event, as well as high-risk hazardous operations, high-frequency near
miss events by focusing on hidden dangers based on project types, and we will, through information
systematization methods, gradually improve personnel safety awareness, real-time control of machinery and
equipment, (raw) materials and chemical control, construction of a regulatory cloud information system, and
continuous improvement of the overall operating environment. In 2021, the Company did not have any
chemical leakage.
9. Establish friendly, safe and healthy workplace through health promotion
(1) Strengthen epidemic prevention rules, weave a health care protection network, and promote both
epidemic prevention and operation
In 2021, Walsin Lihwa has cooperated with the government to prevent the spread of the COVID-19
pandemic. While taking into account the goals of epidemic prevention and operation, Walsin Lihwa actively
cooperated with the government's epidemic prevention regulations, strengthened various epidemic
prevention measures, and always prepared sufficient epidemic prevention materials (such as medical
masks, medicinal alcohol, disinfectant, and forehead thermometers), formulated work guidelines and plans
related to epidemic prevention, such as guidelines for staggering employee shifts, regulations on epidemic
prevention management for migrant workers, key points of notification and emergency response
management, epidemic prevention regulations for business trips or returning to the station, entry
quarantine measures, etc. At the same time, the Company regularly strengthened environmental
disinfection, mandatory wearing of masks, and control of people entering and leaving the factory and office
premises. All employees should take their body temperature before going to work every day, and the
Company collected information and educated employees about the development of the epidemic every
day, and tracked the health of employees every day, and work from home drills. We will continue to
encourage and increase the COVID-19 vaccination rate of employees to 93% and implement epidemic
prevention upgrades. As a corporate social citizen, Walsin Lihwa has a duty to make arrangements ahead
of time, put all our efforts into the epidemic prevention, and work with our partners to get through the
152
pandemic period together.
Employees are the most precious assets of an enterprise, and Walsin Lihwa upholds the concept of mutual
benefit and care. Through the health management system, employees can use the platform to inquire
about historical health examination trends, click on relevant health or health education information, make
appointments for health promotion activities/seminars, and consult with physicians; thus, the Company
may enhance employees' autonomy in health promotion and provide them with the care and resources
they need. As a result of its commitment to employee health care and health promotion, Walsin Lihwa has
been actively promoting and guiding employees to change their health behaviors and habits, increase their
knowledge of proper hygiene, the concept of self-efficacy and health belief patterns. A total of 57 health-
related seminars were held, with a total of 2,069 attendees.
(2) Results of Health Promotion Activities
Health Promotion
Number of Times
Number of Attendees
Health Promotion - Dynamic Activities
Health Issues - Static Lectures
Safety First Aid Education and Training
Blood donation for charity
32
57
24
5
924
2,069
1,121
379 (658 bags of blood)
(3) 2021 Promotion of Healthy Workplaces
Hsinchuang Plant won 2021 CHR Healthy Corporate Citizenship Bronze Award
Taichung Plant won 2021 National Excellent Healthy Workplace-Health Model Award
Yanshui Plant won 2021 Tainan City Five Hearts Workplace Certification and Healthy Workplace
Certification-Health Promotion Badge (3) As of December 31, 2021 and the date of publication of this
Annual Report, the Company has not suffered any significant losses due to labor-management disputes.
6. Information Security Management
(1) Describe the risk management framework for information and communications security, information
and communications security policies, specific management plans, and resources devoted to
information and communications security management.
1. Risk management framework for information and communications security
The Company has established the IT Steering Committee, which is the information security management and
decision-making body for the head office and business units, and is responsible for reviewing and deciding on
matters related to information security management. In addition, we have established a special information
security organization under the Information Center: Big Data and Information Security Division, which is
responsible for formulating information security policies, planning, coordinating and implementing information
security measures, and promoting information security management and solutions year by year in accordance
with the information security plan.
2. Information Security Policy
The "Information Security Management Charter" is established to govern all employees, internal and external
information service users and third-party outsourced service providers to work together to achieve the
following objectives:
(1) To protect the Company's confidential information in accordance with domestic and foreign laws and
regulations, to handle and protect personal information and intellectual property rights carefully, and to ensure
the confidentiality of information assets.
(2) To establish a complete business continuity plan and information security incident management procedures,
enhance information security incident response capabilities, and conduct regular drills to strengthen the
continuous operation of information services to ensure the availability of information assets.
153
Business Overview
(3) To establish information security requirements for system development and maintenance, implement
information security testing and monitoring, and avoid unauthorized access, unauthorized modification, and
destruction to ensure the integrity of information assets.
3. Information security specific management plan
The proposed information security plan is to promote information security policy year by year, to introduce
information security system and process specification, and to continuously establish complete information
security technical protection measures.
The specific management plan is based on five objectives: "Internal and External Segregation", "Physical Fitness",
"Insight", "Smart Security", and "Behavior Analysis", and four components: "IT Governance", "Data and Device
Protection", "Network and System Control", and "Boundary Defense", to achieve them step by step.
The specific management plan includes
(1) Implement appropriate access authorization and protection according to the confidentiality level of
information assets.
(2) Regularly organize educational training to promote new information security knowledge and conduct
employee social engineering drills to raise employees' awareness of information security.
(3) Regularly conduct disaster preparedness drills for important systems so that in the event of a disaster,
operations can be quickly resumed to ensure the company's operational sustainability.
(4) Establish an information security operations center (SOC) to detect and prevent malicious attacks at an early
stage through big data analysis, and build the ability to respond quickly to information security incidents.
(5) Continuously introduce advanced information security solutions to effectively manage and protect
application systems, hosts, network security, and high-authority personnel.
(6) Future information security efforts will focus on protecting intellectual property, production line equipment
and remote offices from hacker attacks.
(2) Any losses, possible impacts and responses to major information security incidents suffered in the most recent
year and up to the date of printing of the annual report: None.
7. Material Contracts
(1) Walsin Lihwa Corporation
Nature of
Contract
Contracting
Parties
Loan
Agreement
DBS Bank
Construction
Agreement
Share
Purchase
Agreement
Chung-Lu
Construction
Co., Ltd.
Perlux Limited,
Ever Rising
Limited and
Plenty
Limited
Contract
Term Dates
The
agreement
was signed
on March 23,
2020, with
the maturity
of the loan
falling on
April 15,
2023
2021/07/05-
2023/05/15
2021/07/30
154
Main Content
Restrictive Clauses
The loan is a three-year in
the total amount of USD 300
million.
indebtedness/Tangible
1. Current ratio >=100%
2. Debt ratio<=120%
(Net
Net Worth)
3.
Interest
>=150%
4. Net tangible assets >= NT$55
billion
coverage
ratio
3,249,750,000
None
Acquired 42,000,000 shares
of New Hono Investment
Pte. Ltd. for US$178,500,000.
None
(2) Walsin (Nanjing) Development Co., LTD.
Nature of
Contract
Construction
Agreement
Contract
Term Dates
2020/07/21 -
2026/09/30
Contracting
Parties
45 companies
including
Shanghai
Construction
No.1 (Group)
Co., Ltd.
(3) Yantai Walsin Stainless Steel Co., Ltd.
Main Content
Restrictive Clauses
Walsin Centro AB area phase
two design, consultancy,
construction, power
distribution, etc.,in a total of
RMB191,545,000.
None
Nature of
Contract
Construction
Agreement
Contracting
Parties
5 companies,
including
China
Construction
Eighth
Engineering
Division. Corp.
LTD
Contract
Term Dates
Main Content
Restrictive Clauses
2020/12/28 -
2022/09/30
Civil construction for Yantai
Plant, in a total of
RMB262,895,000.
None
(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
2020/04/22 -
2022/01/31
2020/04/ -
present
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
155
Financial Information
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
2017
Financial Summary for the Last Five Years
2019
2020
2018
2021
Items
Current Assets
Property,Plant and
Equipment
Intangible Assets
Other Assets
Total Assets
Current
Liabilities
Before
Distibution
After
Distibution
63,652,434
58,726,913
60,789,794
56,176,808
69,320,640
20,984,890
25,083,436
27,845,109
34,294,221
41,474,488
169,726
164,451
168,134
175,000
173,430
45,443,695
48,679,310
49,263,365
60,917,977
72,066,340
130,250,745
132,654,110
138,066,402
151,564,006
183,034,898
34,618,169
32,146,970
40,743,553
31,458,157
38,852,513
37,944,169
36,138,170
42,406,553
34,546,357
44,342,646
Non-current Liabilities
23,352,320
21,242,797
18,756,735
32,825,019
36,236,117
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
57,970,489
53,389,767
59,500,288
64,283,176
75,088,630
61,296,489
57,380,967
61,163,288
67,371,376
80,578,763
70,523,463
77,328,012
77,384,341
84,468,235
105,883,524
33,660,002
33,260,002
33,260,002
32,260,002
34,313,329
15,854,392
15,966,420
16,055,238
15,690,406
18,440,875
19,234,380
32,144,727
31,179,511
36,330,187
47,787,207
15,908,380
28,153,527
29,516,511
33,241,987
42,297,074
2,090,607
(4,043,137)
(3,110,410)
187,640
5,342,113
(315,918)
0
0
0
0
Non-controlling Interests
1,756,793
1,936,331
1,181,773
2,812,595
2,062,744
Total Equity
Before
Distibution
After
Distibution
72,280,256
79,264,343
78,566,114
87,280,830
107,946,268
68,954,256
75,273,143
76,903,114
84,192,630
102,456,135
156
(2) Condensed Balance Sheet - Unconsolidated (Based on IFRSs)
Unit：NT $Thousands
Year
2017
Financial Summary for the Last Five Years
2019
2020
2018
2021
Items
Current Assets
Property,Plant and
Equipment
Intangible Assets
Other Assets
Total Assets
Current
Liabilities
Before
Distibution
After
Distibution
15,188,603
16,809,906
16,615,466
18,421,337
28,943,268
14,356,176
16,432,206
17,621,858
17,493,296
17,411,273
-
-
-
-
-
76,090,868
86,063,522
86,140,209
104,556,223
118,325,438
105,635,647
119,305,634
120,377,533
140,470,856
164,679,979
12,497,690
21,561,638
25,700,349
24,192,375
23,762,737
15,823,690
25,552,838
27,363,349
27,280,575
29,252,870
Non-current Liabilities
22,614,494
20,415,984
17,292,843
31,810,246
35,033,718
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
35,112,184
41,977,622
42,993,192
56,002,621
58,796,455
38,438,184
45,968,822
44,656,192
59,090,821
64,286,588
33,660,002
33,260,002
33,260,002
32,260,002
34,313,329
15,854,392
15,966,420
16,055,238
15,690,406
18,440,875
19,234,380
32,144,727
31,179,511
36,330,187
47,787,207
15,908,380
28,153,527
29,516,511
33,241,987
42,297,074
2,090,607
(4,043,137)
(3,110,410)
187,640
5,342,113
(315,918)
0
0
0
0
70,523,463
77,328,012
77,384,341
84,468,235
105,883,524
67,197,463
73,336,812
75,721,341
81,380,035
100,393,391
157
Financial Information
(3) Condensed Statements of Comprehensive Income - Consolidated (Based on IFRSs)
Unit：NT $Thousands (Excpet EPS:NT$)
Year
2017
Financial Summary for the Last Five Years
2019
2018
2020
2021
167,792,585
190,915,137
134,804,405
112,546,603
156,664,766
12,004,831
15,935,365
9,390,566
12,468,338
19,809,465
7,895,645
11,026,209
4,059,474
7,385,062
13,345,552
1,498,803
5,644,765
680,793
1,865,603
5,776,946
9,394,448
16,670,974
4,740,267
9,250,665
19,122,498
6,694,013
11,959,287
3,783,324
7,005,801
15,257,314
-
-
-
-
-
6,694,013
11,959,287
3,783,324
7,005,801
15,257,314
2,786,719
(3,142,772)
915,620
3,338,209
5,113,693
9,480,732
8,816,515
4,698,944
10,344,010
20,371,007
6,559,984
11,756,781
3,149,679
6,691,149
14,642,629
134,029
202,506
633,645
314,652
614,685
9,362,394
8,612,785
4,082,661
10,114,207
19,791,160
118,338
203,730
616,283
229,803
579,847
1.97
3.53
0.95
2.04
4.27
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
158
(4) Condensed Statements of Comprehensive Income - Unconsolidated (Based on IFRSs)
Unit：NT $Thousands (Excpet EPS:NT$)
Year
2017
Financial Summary for the Last Five Years
2019
2018
2020
2021
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
76,123,074
85,099,970
71,596,648
64,097,690
97,789,648
5,318,064
3,840,250
4,155,851
4,457,566
12,894,560
3,836,535
2,122,510
2,445,178
2,681,141
10,197,929
3,290,917
10,123,522
644,517
3,982,969
8,195,530
7,127,452
12,246,032
3,089,695
6,664,110
18,393,459
6,559,984
11,756,781
3,149,679
6,691,149
14,642,629
-
-
-
-
-
6,559,984
11,756,781
3,149,679
6,691,149
14,642,629
2,802,410
(3,143,996)
932,982
3,423,058
5,148,531
9,362,394
8,612,785
4,082,661
10,114,207
19,791,160
1.97
3.53
0.95
2.04
4.27
(5) Auditors’ Opinion from 2016 to 2020
Year
2017
2018
2019
2020
2021
CPA
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
Deloitte & Touche
Wen-Yea, Shyu, Ker-Chang Wu
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
159
Financial Information
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
2017
2018
2019
2020
2021
Debt Ratio
44.50
40.24
43.09
42.41
41.02
Ratio of long-term Capital to Property,
Plant and Equipment
Current Ratio
Quick Ratio
455.72
400.69
349.51
350.22
347.64
183.87
182.68
149.20
178.57
178.41
80.75
94.86
89.96
93.02
81.32
Interest Coverage Ratio (times)
1,931.29 2,536.69
947.08 1,813.14 4,675.29
Accounts Receivable Turnover (Times)
Average Collection Period
Inventory Turnover (Times)
Operating
Accounts Payable Turnover (times)
Performance
Average Days in Sales
Property, plant and equipment Turnover
(Times)
Total Assets Turnover (Times)
Return on Total Assets (%)
Profitability
Return on Stockholders’ equity (%)
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
11.75
31.06
5.24
17.39
69.65
8.09
1.37
5.77
9.73
27.90
3.98
1.97
22.23
83.19
5.32
1.49
1.06
12.56
29.06
5.99
18.67
60.93
8.28
1.45
9.47
15.78
50.12
6.26
3.53
9.39
62.30
0.00
1.48
1.06
10.06
36.28
5.21
15.32
70.05
10.35
35.26
4.64
13.30
78.66
12.95
28.18
5.18
16.51
70.46
5.09
3.62
4.13
0.99
3.12
4.79
0.77
5.12
8.44
14.25
28.67
2.80
6.22
0.93
9.31
15.63
55.72
9.73
0.95
2.04
4.27
21.17
72.07
4.51
2.93
1.15
22.72
68.03
4.58
2.06
1.07
3.38
45.36
0.00
1.72
1.03
Analysis of financial ratio difference for the last two years (Not required if the difference does not exceed 20%)
A. Compared to 2020 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 2021 show an increase. It’s because that profit before tax
and profit for the year ended December 31, 2021 increased.
B. Compared to 2020, accounts receivable turnover and total assets turnover in 2021 show an increase; average
collection period in 2021 shows a decrease. It’s because that operating revenue for the year ended December 31,
2021 increased.
C. Compared to 2020, accounts payable turnover in 2019 shows an increase. It’s because that sales volume and
operating costs for the year ended December 31, 2021 increased.
D. Compared to 2020, cash flow ratio, cash flow adequacy ratio and cash reinvestment ratio in 2021 show a
decrease. It’s because that decreased in cashflows from operation activities due to increase in inventories and
the aquirement of property, plant and equipment increased.
Note : Financial analysis formulas show as the following：
1.Financial Structure：
(1)Debt Ratio＝Total liabilities／Total assets
160
(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
(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)
161
Financial Information
(2) Financial Analysis –Unconsolidated (Based on IFRSs)
Analysis Items
Debt Ratio
Year
Financial Analysis for the Last Five Years
2017
2018
2019
2020
2021
33.23
35.18
35.71
39.86
35.70
Capital
structure (％)
Liquidity
analysis (%)
Ratio of Long-term Capital to Property,
plant and equipment
Current Ratio
Quick Ratio
648.76
594.83
537.27
664.70
809.34
121.53
44.92
77.96
22.20
64.65
26.77
76.14
30.89
121.80
47.65
Interest Coverage Ratio (times)
1,741.08
2,652.81
676.50
1,571.22
4,424.13
Accounts Receivable Turnover (Times)
Average Collection Period
Inventory Turnover (Times)
Operating
Accounts Payable turnover (times)
Performance
Average Days in Sales
Property, plant and equipment Turnover
(Times)
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
33.13
11.01
8.20
19.34
44.51
5.39
0.76
6.96
9.79
21.17
8.61
31.71
11.51
7.94
20.33
45.96
5.52
0.75
10.86
15.90
36.81
13.81
1.97
3.53
29.65
47.63
1.44
2.03
1.12
9.03
34.25
0.00
2.55
1.29
32.56
11.21
6.53
21.25
55.89
4.20
0.59
3.08
4.07
9.28
4.39
0.95
18.90
46.95
0.89
2.63
1.28
32.75
11.14
6.67
23.75
54.72
3.65
0.49
5.47
8.26
20.65
10.43
28.78
12.68
7.05
30.51
51.77
5.60
0.64
9.81
15.38
53.60
14.97
2.04
4.27
16.21
45.79
2.10
2.52
1.20
14.69
36.49
0.29
1.48
1.04
Analysis of financial ratio difference for the last two years (Not required if the difference does not exceed 20%)
A. Compared to 2020, 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 2021 show an increase. It’s because that profit before tax
and profit for the year ended December 31, 2021 increased.
B. Compared to 2020, the ratio of long-term funds to property, plant and equipment in 2021 shows an increase. It’s
because that total equity increased.
C. Compared to 2020, current ratio and quick ratio in 2021 show an increase. It’s because that accounts receivable
increased.
D. Compared to 2020, accounts payable turnover in 2021 shows an increase. It’s because that sales volume and
operating costs for the year ended December 31, 2021 increased.
E. Compared to 2020, property, plant and equipment turnover and total assets turnover in 2021 show an increase.
It’s because that operating revenue for the year ended December 31, 2021 increased.
F. Compared to 2020, cash flow adequacy ratio and cash reinvestment ratio in 2021 show a decrease. It’s because
that the aquirement of property, plant and equipment and investments accounted for using equity method
increased.
G. Compared to 2020, operating leverage in 2021 shows a decrease. It’s because that net operating profit for the
year ended December 31, 2021 increased.
Note 1: Financial analysis formulas see Table (1).
162
3. Audit Committee’s Review Report for the Recent Year
Audit Committee’s Review Report
The Board of Directors has prepared the Company’s 2021 Business Report, Financial
Statements, and proposal for allocation of earnings. The Financial Statements had been
audited by Deloitte & Touche Accountants, Wen-Yea, Shyu and Ker-Chang Wu 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 22, 2022
163
Financial Information
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,
2021 and 2020, 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, 2021 and 2020,
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 audits in accordance with the Regulations Governing Auditing and Attestation of
Financial Statements by Certified Public Accountants and auditing standards generally accepted in the
Republic of China. Our responsibilities under those standards are further described in the Auditors’
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of
the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of
the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. Based on our audits and the reports of other auditors, 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, 2021.
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, 2021:
Sales Revenue Recognition
In 2021, 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.
164
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 24 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, 2021 and 2020 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$10,292,042 thousand and NT$10,148,841 thousand, which
constituted 5.62% and 6.70% of the Group’s consolidated total assets, as of December 31, 2021 and
2020, respectively, and the total net operating revenue of such subsidiaries amounted to
NT$17,799,306 thousand and NT$18,427,711 thousand, which constituted 11.36% and 16.37% of the
Group’s consolidated total net operating revenue, for the years ended December 31, 2021 and 2020,
respectively.
We did not audit the financial statements of some associates accounted for using the equity method
included in the consolidated financial statements of the Group, but such statements were audited by
other auditors. As of December 31, 2021, the total asset of these associates was NT$1,053,790
thousand, representing 0.58% of the consolidated total assets; the share of losses of these associates
was NT$5,936 thousand, representing (0.03%) of the consolidated income before income tax.
We have also audited the parent company only financial statements of Walsin Lihwa Corporation as of
and for the years ended December 31, 2021 and 2020 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
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.
165
Financial Information
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.
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
166
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, 2021 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 Ker-Chang Wu.
Deloitte & Touche
Taipei, Taiwan
Republic of China
February 22, 2022
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.
167
Financial Information
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2021 AND 2020
(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 (Notes 4, 11 and 31)
Trade receivables (Notes 4, 11 and 31)
Finance lease receivables (Notes 4 and 12)
Other receivables (Note 31)
Inventories (Notes 4 and 13)
Other financial assets - current (Notes 6 and 32)
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 (Notes 4 and 26)
Refundable deposits (Note 6)
Long-term finance lease receivables - non-current (Notes 4 and 12)
Other non-current assets (Notes 6 and 32)
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)
Contract liabilities - current
Notes payable
Trade payables
Current tax liabilities (Notes 4 and 26)
Other payables
Lease liabilities - current (Notes 4 and 18)
Current portion of long-term borrowings (Note 20)
Other current liabilities (Note 30)
Total current liabilities
NON-CURRENT LIABILITIES
Bonds payable (Note 21)
Long-term borrowings (Note 20)
Deferred tax liabilities (Notes 4 and 26)
Lease liabilities - non-current (Notes 4 and 18)
Net defined benefit liabilities - non-current (Notes 4 and 22)
Other non-current liabilities (Note 28)
Total non-current liabilities
Total liabilities
EQUITY ATTRIBUTABLE TO OWNERS OF WLC (Note 23)
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
Other equity-other
Total other equity
2021
2020
Amount
%
Amount
%
$ 10,387,581
16,147
-
89,232
5,750,344
2,627,411
11,045,689
58,042
1,620,595
31,659,723
530,650
5,535,226
6
-
-
-
3
2
6
-
1
17
-
3
$ 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
8
-
1
-
3
2
5
-
1
14
-
3
69,320,640
38
56,176,808
37
-
16,290,587
39,451,117
41,474,488
1,803,510
10,431,063
173,430
2,818,549
207,622
662,543
401,349
-
9
22
23
1
6
-
1
-
-
-
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
4
5
22
23
1
6
-
2
-
-
-
113,714,258
62
95,387,198
63
$ 183,034,898
100
$ 151,564,006
100
$
7,108,766
37,439
3,426
346,947
8,493,921
6,082,152
4,861,341
71,470
10,719,081
1,127,970
4
-
-
-
5
3
3
-
6
-
$
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
4
-
-
-
5
3
4
-
4
1
38,852,513
21
31,458,157
21
7,500,000
24,785,952
2,214,650
243,676
560,362
931,477
4
14
1
-
-
1
-
31,406,829
214,457
274,442
384,299
544,992
-
21
-
-
-
-
36,236,117
20
32,825,019
21
75,088,630
41
64,283,176
42
34,313,329
18,440,875
19
10
32,260,002
15,690,406
21
11
6,109,568
2,712,250
38,965,389
47,787,207
3
2
21
26
5,428,200
3,110,410
27,791,577
36,330,187
4
2
18
24
(6,100,687)
11,534,267
(91,467)
5,342,113
(3)
6
-
3
(5,905,135)
6,092,775
-
187,640
(4)
4
-
-
Total equity attributable to owners of WLC
105,883,524
58
84,468,235
56
NON-CONTROLLING INTERESTS
2,062,744
1
2,812,595
2
Total equity
TOTAL
107,946,268
59
87,280,830
58
$ 183,034,898
100
$ 151,564,006
100
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
168
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2021 AND 2020
(In Thousands of U.S. 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 (Notes 4, 11 and 31)
Trade receivables (Notes 4, 11 and 31)
Finance lease receivables (Notes 4 and 12)
Other receivables (Note 31)
Inventories (Notes 4 and 13)
Other financial assets - current (Notes 6 and 32)
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 (Notes 4 and 26)
Refundable deposits (Note 6)
Long-term finance lease receivables - non-current (Notes 4 and 12)
Other non-current assets (Notes 6 and 32)
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)
Contract liabilities - current
Notes payable
Trade payables
Current tax liabilities (Notes 4 and 26)
Other payables
Lease liabilities - current (Notes 4 and 18)
Current portion of long-term borrowings (Note 20)
Other current liabilities (Note 30)
Total current liabilities
NON-CURRENT LIABILITIES
Bonds payable (Note 21)
Long-term borrowings (Note 20)
Deferred tax liabilities (Notes 4 and 26)
Lease liabilities - non-current (Notes 4 and 18)
Net defined benefit liabilities - non-current (Notes 4 and 22)
Other non-current liabilities (Note 28)
Total non-current liabilities
Total liabilities
EQUITY ATTRIBUTABLE TO OWNERS OF WLC (Note 23)
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
Other equity-other
Total other equity
2021
2020
Amount
%
Amount
%
$
375,274
583
-
3,224
207,744
94,921
399,049
2,097
58,548
1,143,776
19,171
199,971
6
-
-
-
3
2
6
-
1
17
-
3
$
431,518
2,649
47,542
299
161,163
107,447
272,512
2,028
32,048
761,580
25,480
185,243
8
-
1
-
3
2
5
-
1
14
-
3
2,504,358
38
2,029,509
37
-
588,533
1,425,257
1,498,356
65,156
376,845
6,266
101,826
7,501
23,936
14,498
-
9
22
23
1
6
-
1
-
-
-
205,342
249,662
1,183,782
1,238,953
60,130
356,753
6,322
87,736
7,995
26,033
23,361
4
5
22
23
1
6
-
2
-
-
-
4,108,174
62
3,446,069
63
$ 6,612,532
100
$ 5,475,578
100
$
256,820
1,353
124
12,534
306,861
219,731
175,626
2,582
387,250
40,750
4
-
-
-
5
3
3
-
6
-
$
238,115
303
54
8,499
270,754
164,659
185,835
2,719
222,630
42,926
4
-
-
-
5
3
4
-
4
1
1,403,631
21
1,136,494
21
270,954
895,446
80,009
8,803
20,244
33,652
4
14
1
-
-
1
-
1,134,640
7,748
9,915
13,884
19,689
-
21
-
-
-
-
1,309,108
20
1,185,876
21
2,712,739
41
2,322,370
42
1,239,643
666,217
19
10
1,165,463
566,850
21
11
220,721
97,986
1,407,709
1,726,416
3
2
21
26
196,105
112,370
1,004,031
1,312,506
4
2
18
24
(220,400)
416,700
(3,304)
192,996
(3)
6
-
3
(213,337)
220,115
-
6,778
(4)
4
-
-
Total equity attributable to owners of WLC
3,825,272
58
3,051,597
56
NON-CONTROLLING INTERESTS
Total equity
TOTAL
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
74,521
1
101,611
2
3,899,793
59
3,153,208
58
$ 6,612,532
100
$ 5,475,578
100
169
Financial Information
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2021
2020
Amount
%
Amount
%
OPERATING REVENUE (Notes 4 and 24)
$ 156,664,766
100
$ 112,546,603
100
OPERATING COSTS (Notes 4 and 13)
(136,855,301) (88)
(100,078,265) (89)
GROSS PROFIT
19,809,465
12
12,468,338
11
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
Gain (loss) on disposal of property, plant and
equipment
Gain on valuation of financial assets and
2,487,342
3,784,683
191,888
6,463,913
13,345,552
91,952
561,499
549,102
20,468
liabilities at fair value through profit or loss
647,228
Recognition (reversal) of impairment loss
(Note 25)
Other expenses
Foreign exchange loss, net
Interest expense
Gain (loss) on disposal of investments (Note
25)
Share of profit of associates accounted for
using the equity method
(693,892)
(231,656)
(237,222)
(417,951)
679,207
4,808,211
Total non-operating income and expenses
5,776,946
2
2
-
4
8
-
-
-
-
-
-
-
-
-
1
3
4
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
1,865,603
PROFIT BEFORE INCOME TAX FROM
CONTINUING OPERATIONS
19,122,498
12
9,250,665
2
3
-
5
6
-
-
-
-
1
-
-
-
-
-
1
2
8
INCOME TAX EXPENSE (Notes 4 and 26)
(3,865,184)
(2)
(2,244,864)
(2)
NET PROFIT FOR THE YEAR
15,257,314
10
7,005,801
6
OTHER COMPREHENSIVE INCOME (LOSS)
(Continued)
170
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
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 may be reclassified subsequently to
profit or loss:
Exchange differences on translation of the
2021
2020
Amount
%
Amount
%
(153,272)
-
36,292
2,594,208
2,906,573
5,347,509
1
2
3
1,077,834
2,664,780
3,778,906
-
1
2
3
financial statements of foreign operations
(105,982)
-
(358,081)
-
Share of the other comprehensive loss of
associates accounted for using the equity
method
(127,834)
(233,816)
Other comprehensive income for the year
5,113,693
-
-
3
(82,616)
(440,697)
3,338,209
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR
$
20,371,007
13
$
10,344,010
NET INCOME ATTRIBUTABLE TO:
Owners of WLC
Non-controlling interests
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Owners of WLC
Non-controlling interests
$
14,642,629
614,685
$
9
1
6,691,149
314,652
$
15,257,314
10
$
7,005,801
$
19,791,160
579,847
13
-
$
10,114,207
229,803
$
20,371,007
13
$
10,344,010
EARNINGS PER SHARE (Note 27)
Basic
Diluted
$
$
4.27
4.26
$
$
2.04
2.04
-
-
3
9
6
-
6
9
-
9
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
(Concluded)
171
Financial Information
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of U.S. Dollars, Except Earnings Per Share)
2021
2020
Amount
%
Amount
%
OPERATING REVENUE (Notes 4 and 24)
$ 5,659,854
100
$ 4,065,990
100
OPERATING COSTS (Notes 4 and 13)
(4,944,194)
(88)
(3,615,544)
(89)
GROSS PROFIT
715,660
12
450,446
11
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
Gain (loss) on disposal of property, plant and
equipment
Gain on valuation of financial assets and
89,861
136,730
6,932
233,523
482,137
3,322
20,285
19,838
739
liabilities at fair value through profit or loss
23,383
Recognition (reversal) of impairment loss
(Note 25)
Other expenses
Foreign exchange loss, net
Interest expense
Gain (loss) on disposal of investments (Note
25)
Share of profit of associates accounted for
using the equity method
(25,068)
(8,369)
(8,570)
(15,099)
24,538
173,707
Total non-operating income and expenses
208,706
2
2
-
4
8
-
-
-
-
-
-
-
-
-
1
3
4
67,491
111,684
4,469
183,644
266,802
9,448
4,010
4,917
(288)
26,449
24
(13,782)
(2,411)
(19,508)
(2,743)
61,283
67,399
PROFIT BEFORE INCOME TAX FROM
CONTINUING OPERATIONS
690,843
12
334,201
INCOME TAX EXPENSE (Notes 4 and 26)
(139,639)
(2)
(81,101)
NET PROFIT FOR THE YEAR
551,204
10
253,100
2
3
-
5
6
-
-
-
-
1
-
-
-
-
-
1
2
8
(2)
6
OTHER COMPREHENSIVE INCOME (LOSS)
(Continued)
172
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of U.S. Dollars, Except Earnings Per Share)
2021
2020
Amount
%
Amount
%
Items that may not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit plans
Unrealized gain on financial assets at fair
(5,537)
value through other comprehensive income
93,721
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
Share of the other comprehensive loss of
associates accounted for using the equity
method
105,006
193,190
(3,829)
(4,618)
(8,447)
Other comprehensive income for the year
184,743
-
1
2
3
-
-
-
3
1,311
38,939
96,271
136,521
(12,936)
(2,985)
(15,921)
120,600
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR
$
735,947
13
$
373,700
NET INCOME ATTRIBUTABLE TO:
Owners of WLC
Non-controlling interests
TOTAL COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
Owners of WLC
Non-controlling interests
$
528,997
22,207
$
9
1
241,732
11,367
$
551,204
10
$
253,099
$
714,999
20,948
13
-
$
365,398
8,302
$
735,947
13
$
373,700
EARNINGS PER SHARE (Note 27)
Basic
Diluted
$
$
0.15
0.15
$
$
0.07
0.07
-
1
2
3
-
-
-
3
9
6
-
6
9
-
9
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
(Concluded)
173
1
7
4
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars)
Share Capital
Capital
Surplus
Legal Reserve Special Reserve
Unappropriated
Earnings
Retained Earnings
Exchange
Differences on
Translation the
Financial Statement
of Foreign
Operations
Other Equity
Unrealized
Valuation Gain
(Loss) on Financial
Assets at Fair Value
through Other
Comprehensive
Income
Equity Attributable to Owners of WLC
i
F
n
a
n
c
a
i
Other
Treasury
Shares
Total
Non-controlling
Interests
Total Equity
o
n
l
I
f
n
o
r
m
a
t
i
BALANCE AT JANUARY 1, 2020
$ 33,260,002
$ 16,055,238
$ 5,113,232
$ 4,043,138
$ 22,023,141
$
(5,546,359 )
$
2,435,949
$
-
$
-
$ 77,384,341
$ 1,181,773
$ 78,566,114
Appropriation of 2019 earnings (Note 23)
Legal reserve
Special reserve
Cash dividends distributed by WLC
Excess of the carrying amount over the consideration received
of the subsidiaries' net assets during disposal
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 )
-
Appropriation of 2020 earnings (Note 23)
Legal reserve
Special reserve
Cash dividends distributed by WLC
Excess of the carrying amount over the consideration received
of the subsidiaries' net assets during disposal
Change in capital surplus and retained earnings from
investments in associates under the equity method
-
-
-
-
-
-
-
-
3,124
(26,782 )
Issuance of new shares in exchange for the shares of another
company
2,053,327
2,771,798
Net profit for the year ended December 31, 2021
Other comprehensive income (loss) for the year ended
December 31, 2021, net of income tax
Total comprehensive income (loss) for the year ended
December 31, 2021
Others
Changes in non-controlling interests
-
-
-
-
-
-
-
-
2,329
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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
-
-
-
-
-
-
-
-
-
-
-
-
681,368
-
-
-
(398,160 )
-
(681,368 )
398,160
(3,088,200 )
-
-
-
-
-
-
-
-
-
-
-
-
-
(77,160 )
(91,467 )
-
77,160
-
14,642,629
(174,569 )
(195,552 )
5,518,652
14,468,060
(195,552 )
5,518,652
-
-
-
-
-
-
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
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(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 )
1,500,108
-
(28 )
-
-
-
(1,500,108 )
-
(28 )
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,401,019
1,401,019
84,468,235
2,812,595
87,280,830
-
-
(3,088,200 )
3,124
(118,249 )
4,825,125
-
-
-
-
-
-
-
-
(3,088,200 )
3,124
(118,249 )
4,825,125
14,642,629
614,685
15,257,314
5,148,531
(34,838 )
5,113,693
19,791,160
579,847
20,371,007
2,329
-
2,329
-
(1,329,698 )
(1,329,698 )
$ 105,883,524
$ 2,062,744
$ 107,946,268
BALANCE, DECEMBER 31, 2021
$ 34,313,329
$ 18,440,875
$ 6,109,568
$ 2,712,250
$ 38,965,389
$
(6,100,687 )
$
11,534,267
$ (91,467 ) $
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
(US)CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of U.S. Dollars)
Share Capital
Capital Surplus
Retained Earnings
Legal
Reserve
Special Reserve
Unappropriated
Earnings
Exchange
Differences on
Translation the
Financial
Statement of
Foreign
Operations
Other Equity
Unrealized
Valuation Gain
(Loss) on Financial
Assets at Fair Value
through Other
Comprehensive
Income
Equity Attributable to Owners of WLC
Other
Treasury
Shares
Total
Non-controlling
Interests
Total Equity
BALANCE AT JANUARY 1, 2020
$ 1,201,590
$
580,030
$ 184,727
$
146,067
$
795,634
$
(200,374 )
$
88,004
$
Appropriation of 2019 earnings (Note 23)
Legal reserve
Special reserve
Cash dividends distributed by WLC
Excess of the carrying amount over the consideration received
of the subsidiaries' net assets during disposal
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
-
-
-
-
-
-
-
-
-
-
-
-
-
4,888
-
-
-
-
(36,127 )
(18,067 )
-
-
(1 )
-
11,378
-
-
-
-
-
-
-
-
-
-
-
-
(33,697 )
-
-
-
-
-
-
-
-
-
-
(11,378 )
33,697
(60,081 )
(91 )
3,511
241,732
-
-
-
-
-
-
-
-
-
-
(3,511 )
-
1,007
(12,963 )
135,622
242,739
(12,963 )
135,622
-
-
-
-
-
-
-
-
-
-
-
-
BALANCE, DECEMBER 31, 2020
1,165,463
566,850
196,105
112,370
1,004,031
(213,337 )
220,115
Appropriation of 2020 earnings (Note 23)
Legal reserve
Special reserve
Cash dividends distributed by WLC
Excess of the carrying amount over the consideration received
of the subsidiaries' net assets during disposal
Change in capital surplus and retained earnings from
investments in associates under the equity method
-
-
-
-
-
-
-
-
113
(968 )
Issuance of new shares in exchange for the shares of another
company
74,180
100,138
Net profit for the year ended December 31, 2021
Other comprehensive income (loss) for the year ended
December 31, 2021, net of income tax
Total comprehensive income (loss) for the year ended
December 31, 2021
Others
Changes in non-controlling interests
-
-
-
-
-
-
-
-
84
-
24,616
-
-
-
-
-
-
-
-
-
-
-
(14,384 )
-
-
-
-
-
-
-
-
-
(24,616 )
14,384
(11,567 )
-
2,788
-
528,997
-
-
-
-
-
-
-
-
-
-
-
-
-
(6,308 )
(7,063 )
199,373
522,689
(7,063 )
199,373
-
-
-
-
-
-
(2,788 )
(3,304 )
365,398
8,302
(54,194 )
(54,194 )
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
54,194
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$ 2,795,678
$
42,694
$ 2,838,372
-
-
(60,081 )
(91 )
4,888
241,732
-
-
-
-
-
11,367
-
-
(60,081 )
(91 )
4,888
253,099
123,666
(3,065 )
120,601
-
(1 )
-
3,051,597
-
-
(11,567 )
113
(4,272 )
174,318
528,997
-
-
-
50,615
101,611
-
-
-
-
-
-
22,207
373,700
(54,194 )
-
(1 )
50,615
3,153,208
-
-
(11,567 )
113
(4,272 )
174,318
551,204
186,002
(1,259 )
184,743
714,999
20,948
735,947
84
-
-
84
(48,038 )
(48,038 )
$ 3,925,272
$
74,521
$ 3,999,793
BALANCE, DECEMBER 31, 2021
$ 1,239,643
$
666,217
$ 220,721
$
97,986
$ 1,507,709
$
(220,400 )
$
416,700
$
(3,304 )
$
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
1
7
5
Financial Information
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments for:
Depreciation expense
Amortization expense
Expected credit (reversed) loss recognized on trade receivables
Net gain on fair value change of financial assets and liabilities 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
(Gain) loss on disposal of property, plant and equipment
(Gain) loss on disposal of investments
Impairment loss (reversed) recognized on non-financial assets
Unrealized loss on foreign currency exchange
Gain on lease modification
Changes in operating assets and liabilities
Increase in contract assets
Decrease in notes receivable
(Increase) decrease in trade receivables
(Increase) decrease in other receivables
(Increase) decrease in inventories
Increase in other current assets
Decrease (increase) in other financial assets
Increase in other operating assets
Increase in financial liabilities held for trading
Increase in contract liabilities
Increase (decrease) in notes payable
Increase in trade payables
Increase in other payables
(Decrease) increase in other current liabilities
Increase (decrease) in net defined benefit liabilities
Increase (decrease) in other operating liabilities
Cash generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
2021
2020
$ 19,122,498
$
9,250,665
2,799,315
31,498
(7,901)
2,405,513
35,485
12,209
(647,228)
417,951
(91,952)
(561,499)
11,490
(4,808,211)
(20,468)
(679,207)
693,892
89,472
-
(1,289,352)
346,721
(3,494,657)
(775,485)
(11,987,254)
(45,654)
174,627
(626,734)
513,105
1,927
111,689
999,450
674,668
(60,224)
176,063
565,146
1,633,686
69,679
1,359,121
(491,575)
(1,254,756)
(732,121)
539,982
(261,523)
(110,990)
8,804
(1,696,319)
7,979
75,927
(674)
962
(38)
(446,320)
602,201
311,810
467,742
938,706
(2,794,980)
(387,544)
(366,618)
75,283
981
(107,151)
526,654
152,124
532,710
(152,315)
(133,769)
8,755,375
294,277
789,298
(534,655)
(2,156,365)
Net cash generated from operating activities
1,316,155
7,147,930
(Continued)
176
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through other
comprehensive income
Capital reduction and refund from financial assets at fair value
through other comprehensive income
Disposal of financial assets at amortized cost
Purchase of financial assets at fair value through profit or loss
Disposal of financial assets at fair value through profit or loss
Acquisition of investments 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
Decrease (increase) in refundable deposits
Payments for intangible assets
Payments for right-of-use assets
Payments for investment properties
Other investing activities
2021
2020
(1,985,957)
(507,274)
3,615
1,325,403
-
4,948,895
(3,227)
-
(6,415,398)
50,410
13,208
(6,248)
(222,330)
(2,362)
1,308,017
-
252,140
(5,353,790)
-
-
2,025,974
(8,816,415)
21,684
(36,228)
(9,327)
(18,989)
(546)
132,890
Net cash used in investing activities
(985,974)
(12,309,881)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings
Proceeds from bonds payable
Proceeds from long-term borrowings
Repayment of long-term borrowings
Repayment of the principal portion of lease liabilities
Cash dividends paid
Payments for buy-back of ordinary shares
Acquisition of subsidiaries
Changes in non-controlling interests
Other financing activities
485,651
7,500,000
4,000,000
(6,064,196)
(89,794)
(3,088,030)
-
(5,003,810)
(21,666)
2,329
(5,804,988)
-
20,640,014
(6,564,196)
(83,862)
(1,662,891)
(1,500,108)
-
586,927
(28)
Net cash (used in) generated from financing activities
(2,279,516)
5,610,868
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE
OF CASH HELD IN FOREIGN CURRENCIES
392,508
(257,515)
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
(1,556,827)
191,402
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR
11,944,408
11,753,006
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
$ 10,387,581
$
11,944,408
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
(Concluded)
177
Financial Information
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of U.S. Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments for:
Depreciation expense
Amortization expense
Expected credit (reversed) loss recognized on trade receivables
Net gain on fair value change of financial assets and liabilities 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
(Gain) loss on disposal of property, plant and equipment
(Gain) loss on disposal of investments
Impairment loss (reversed) recognized on non-financial assets
Unrealized loss on foreign currency exchange
Gain on lease modification
Changes in operating assets and liabilities
Increase in contract assets
Decrease in notes receivable
(Increase) decrease in trade receivables
(Increase) decrease in other receivables
(Increase) decrease in inventories
Increase in other current assets
Decrease (increase) in other financial assets
Increase in other operating assets
Increase in financial liabilities held for trading
Increase in contract liabilities
Increase (decrease) in notes payable
Increase in trade payables
Increase in other payables
(Decrease) increase in other current liabilities
Increase (decrease) in net defined benefit liabilities
Increase (decrease) in other operating liabilities
Cash generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
2021
2020
$ 690,843
$ 334,200
101,131
1,138
(285)
(23,383)
15,099
(3,322)
(20,285)
415
(173,707)
(739)
(24,538)
25,068
3,232
-
(46,581)
12,526
(126,252)
(28,016)
(433,066)
(1,649)
6,309
(22,642)
18,537
70
4,035
36,107
24,374
(2,176)
6,361
20,417
59,021
2,517
49,101
(17,759)
(45,331)
86,904
1,282
441
(26,449)
19,508
(9,448)
(4,010)
318
(61,283)
288
2,743
(24)
35
(1)
(16,124)
21,756
11,265
16,898
33,913
(100,975)
(14,001)
(13,245)
2,720
35
(3,871)
19,027
5,496
19,245
(5,503)
(4,833)
316,307
10,631
28,515
(19,316)
(77,903)
Net cash generated from operating activities
47,549
258,234
(Continued)
178
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of U.S. Dollars)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through other
comprehensive income
Capital reduction and refund from financial assets at fair value
through other comprehensive income
Disposal of financial assets at amortized cost
Purchase of financial assets at fair value through profit or loss
Disposal of financial assets at fair value through profit or loss
Acquisition of investments 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
Decrease (increase) in refundable deposits
Payments for intangible assets
Payments for right-of-use assets
Payments for investment properties
Other investing activities
2021
2020
(71,747)
(18,326)
131
47,883
-
178,790
(117)
-
(231,770)
1,821
477
(226)
(8,032)
(85)
47,255
-
9,109
(193,417)
-
-
73,193
(318,512)
783
(1,309)
(337)
(686)
(20)
4,801
Net cash used in investing activities
(35,620)
(444,721)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings
Proceeds from bonds payable
Proceeds from long-term borrowings
Repayment of long-term borrowings
Repayment of the principal portion of lease liabilities
Payments for buy-back of ordinary shares
Acquisition of subsidiaries
Cash dividends paid
Changes in non-controlling interests
Other financing activities
17,545
270,954
144,509
(219,082)
(3,244)
-
(180,773)
(111,562)
(783)
84
(209,718)
-
745,665
(237,146)
(3,030)
(54,195)
-
(60,076)
21,204
(1)
Net cash (used in) generated from financing activities
(82,352)
202,703
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE
OF CASH HELD IN FOREIGN CURRENCIES
14,179
(9,301)
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS
(56,244)
6,915
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR
431,518
424,603
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
$ 375,274
$ 431,518
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
(Concluded)
179
Financial Information
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(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 22, 2022.
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)
The initial application of the IFRSs endorsed and issued into effect by the FSC did not have a
material impact on the Group’s accounting policies.
b. The IFRSs endorsed by the FSC for application starting from 2022
New IFRSs
Effective Date
Announced by the IASB
“Annual Improvements to IFRS Standards 2018-2020”
Amendments to IFRS 3 “Reference to the Conceptual
January 1, 2022 (Note 1)
January 1, 2022 (Note 2)
Framework”
Amendments to IAS 16 “Property, Plant and Equipment -
January 1, 2022 (Note 3)
Proceeds before Intended Use”
Amendments to IAS 37 “Onerous Contracts - Cost of
January 1, 2022 (Note 4)
Fulfilling a Contract”
180
Note 1: 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
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 2: 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 3: 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 4: The amendments are applicable to contracts for which the entity has not yet fulfilled
all its obligations on January 1, 2022.
1) 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.
2) 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.
3) 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.
4) 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).
181
Financial Information
Except for the above impact, as of the date the consolidated financial statements were
authorized for issue, the Group has assessed that the application of other standards and
interpretations will not have a material impact on the Group’s financial position and financial
performance.
c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC
New IFRSs
Amendments to IFRS 10 and IAS 28 “Sale or Contribution
of Assets between An Investor and Its Associate or Joint
Venture”
Effective Date
Announced by IASB (Note 1)
To be determined by IASB
IFRS 17 “Insurance Contracts”
Amendments to IFRS 17
Amendments to IFRS 17 “Initial Application of IFRS 9 and
January 1, 2023
January 1, 2023
January 1, 2023
IFRS 17 - Comparative Information”
Amendments to IAS 1 “Classification of Liabilities as
January 1, 2023
Current or Non-current”
Amendments to IAS 1 “Disclosure of Accounting Policies”
January 1, 2023 (Note 2)
Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2023 (Note 3)
January 1, 2023 (Note 4)
Amendments to IAS 12 “Deferred Tax related to Assets and
Liabilities arising from a Single Transaction”
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 will be applied prospectively for annual reporting periods
beginning on or after January 1, 2023.
Note 3: 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.
Note 4: Except that deferred taxes will be recognized on January 1, 2022 for temporary
differences associated with
the
amendments will be applied prospectively to transactions that occur on or after
January 1, 2022.
leases and decommissioning obligations,
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
182
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.
that, for
the purpose of
the
The amendments stipulate
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
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.
liability classification,
3) 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
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;
183
Financial Information
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.
4) 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.
5) Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a
Single Transaction”
The amendments clarify that the initial recognition exemption under IAS 12 does not
apply to transactions in which equal taxable and deductible temporary differences arise on
initial recognition. The Group will recognize a deferred tax asset (to the extent that it is
probable that taxable profit will be available against which the deductible temporary
difference can be utilized) and a deferred tax liability for all deductible and taxable
temporary differences associated with leases and decommissioning obligations on January
1, 2022, and recognize the cumulative effect of initial application in retained earnings at
that date. The Group will apply the amendments prospectively to transactions other than
leases and decommissioning obligations that occur on or after January 1, 2022.
Except for the above impact, as of the date the 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.
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.
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
184
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.
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.
185
Financial Information
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
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
186
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
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.
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Financial Information
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.
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.
188
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, investment properties,
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.
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.
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Financial Information
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.
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, 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.
190
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.
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
191
Financial Information
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.
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
192
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
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
193
Financial Information
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
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
194
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 others
a) 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.
b) 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.
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
195
Financial Information
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.
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.
196
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.
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.
t. Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
1) Current tax
Income tax payable (recoverable) is based on taxable profit (loss) for the year determined
according to the applicable tax laws of each tax jurisdiction.
197
Financial Information
According to the Income Tax Act 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 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
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 Group’s accounting policies, management is required to make judgments,
estimates and assumptions on 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.
198
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
2021
2020
$
2,926
8,473,267
$
3,216
9,723,431
1,801,526
109,862
2,108,064
109,697
$ 10,387,581
$ 11,944,408
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
2021
2020
0.001%-2.75% 0.001%-3.90%
0.16%
0.18%
As of December 31, 2021 and 2020, certain time deposits were classified and pledged as follows:
Purpose
December 31
2021
2020
Other financial assets - current
Restricted time deposits
Negotiable certificate of deposits (not
$
-
$
2,300
expired)
Restricted deposits
To meet contract requirements for completing
18,139
14,516
construction
To secure short-term borrowings and letters
370,054
523,952
of credit
Repatriation of offshore funds and project
80,493
85,160
grants
Refundable deposits
Other - pledged time deposits
To meet contract requirements for completing
51,667
51,528
468,686
625,928
Other non-current assets - other To secure long-term borrowings
construction
To meet required security deposit
867
-
52,534
878
8,730
61,136
$ 521,220
$ 687,064
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Financial Information
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
Options
Hybrid financial assets
Corporate bonds
December 31
2021
2020
$
$
1,940
14,207
-
73,329
-
-
-
5,683,859
Financial assets at FVTPL
$
16,147
$ 5,757,188
Current
Non-current
Financial liabilities held for trading
$
16,147
-
$
73,329
5,683,859
$
16,147
$ 5,757,188
Derivative financial liabilities (not under hedge accounting)
Foreign exchange forward contracts
Exchange rate swap contracts
$
-
37,439
$
8,374
-
Financial liabilities at FVTPL
$
37,439
$
8,374
Current
Non-current
$
37,439
-
$
8,374
-
$
37,439
$
8,374
a. As of December 31, 2021 and 2020, 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, 2021
Commodity futures
contracts
Copper
Copper
Nickel
Copper
Zinc
200
Buy
Sell
Sell
Buy
Buy
9,925
3,050
2,238
1,770
275
2021.09.01-
2021.12.31
2021.12.10-
2021.12.31
2021.11.04-
2021.12.31
2021.09.07-
2021.12.31
2021.10.14-
2021.12.10
2022.01.19-
2022.04.20
2022.01.19-
2022.03.31
2022.02.04-
2022.03.31
2022.01.31-
2022.06.30
2022.03.31
US$ 94,424
US$ 96,834
US$
2,410
US$ 29,229
US$ 29,846
US$
(617 )
US$ 44,698
US$ 46,459
US$
(1,761 )
RMB 124,483
RMB 124,618
RMB
135
RMB 6,520
RMB 6,630
RMB
110
(Continued)
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
Buy
10,250
Sell
Buy
Buy
Buy
882
1,125
155
3,000
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 )
(Concluded)
b. At the end of the year, outstanding foreign exchange forward contracts not under hedge
accounting were as follows:
Currency
Maturity Date
Notional Amount
(In Thousands)
December 31, 2021
Sell
Buy
EUR to USD
USD to NTD
USD to RMB
EUR to MYR
USD to NTD
USD to JPY
EUR to USD
USD to SGD
USD to RMB
2022.01.08-2022.02.17 EUR18,000/USD20,326
2022.01.07-2022.02.10 USD100,000/NTD2,776,800
2022.01.13-2022.07.20 USD83,643/RMB536,528
2022.01.14-2022.03.02 EUR1,160/MYR5,590
2022.01.06-2022.02.21 USD129,363/NTD3,579,887
2022.01.12-2022.01.24 USD9,430/JPY1,077,970
EUR25,405/USD28,694
USD20,207/SGD27,651
USD10,000/RMB63,611
2022.01.10
2022.01.12
2022.01.13
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
c. As of December 31, 2021, outstanding exchange rate swap contracts not under hedge
accounting were as follows:
Currency
Maturity Date
Notional Amount
(In Thousands)
December 31, 2021 USD to NTD
USD to NTD
USD to NTD
2022.01.12
2022.01.12
2022.01.14
USD75,000/NTD2,097,188
USD70,000/NTD1,957,375
USD40,000/NTD1,109,600
201
Financial Information
d. For the years ended December 31, 2021 and 2020, 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. Due to the
cash flow demand, the Group communicated with Golden Harbour International Pte. Ltd. on
August 27, 2021 to exercise the early redemption to pay back the bonds. Refer to Note 15.
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
2021
2020
Financial assets - current
Fair value hedges - exchange rate swap contracts
$ 89,232
$ 8,282
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, 2021
Exchange rate swap contracts
December 31, 2020
Exchange rate swap contracts
USD to RMB
USD to RMB
USD to RMB
USD to RMB
2022.01.14
2022.01.14
2022.06.08
2022.06.08
USD75,000/RMB488,325
USD70,000/RMB455,700
USD20,000/RMB129,220
USD15,000/RMB96,921
USD to NTD
USD to NTD
USD to NTD
USD to NTD
USD to NTD
2021.01.13
2021.01.13
2021.01.13
2021.01.13
2021.01.13
USD21,000/NTD607,457
USD21,000/NTD607,467
USD30,000/NTD867,795
USD30,000/NTD867,810
USD30,000/NTD867,810
(Continued)
202
Currency
Maturity Date
Notional Amount
(In Thousands)
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
2021.01.15
2021.01.15
2021.01.15
2021.01.15
2021.01.15
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
(Concluded)
Gain on the hedging instruments
Loss on the hedged items
9. FINANCIAL ASSETS AT AMORTIZED COST
For the Year Ended December 31
2021
2020
$ 89,232
$ 52,963
$ 8,282
$ 42,075
December 31
2021
2020
Current
Foreign investments
Interest rate-linked structured investment deposits
$
-
$ 1,315,970
The interest rates for interest rate-linked structured investment deposits was 3.2% as of December
31, 2020.
10. CONTRACT ASSETS
As of December 31, 2021 and 2020, contract balances were as follows:
Contract assets
Cable installation
Solar power systems installation
Less: Allowance for impairment loss
December 31
2021
2020
$
840,341
4,910,003
-
$
781,196
3,679,796
-
Contract assets - current
$ 5,750,344
$ 4,460,992
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.
203
Financial Information
11. NOTES RECEIVABLE AND TRADE RECEIVABLES
Notes receivable
Notes receivable
Trade receivables
December 31
2021
2020
$ 2,627,411 $ 2,974,132
Trade receivables
Less: Allowance for impairment loss
$ 11,138,592 $ 7,637,153
(94,022)
(92,903)
$ 11,045,689 $ 7,543,131
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.
204
December 31, 2021
Not Past Due
Less than 90
Days
91 to 180
Days
181 to 365
Days
More than 365
Days
Total
Expected credit loss rate
0%
0%-2%
0%-50%
0%-100%
50%-100%
Gross carrying amount
Loss allowance (lifetime
ECLs)
$ 9,374,469
$ 1,373,270
$
224,201
$
74,105
$
92,547
$ 11,138,592
-
(2,081)
(12,786)
(10,688)
(67,348)
(92,903)
Amortized cost
$ 9,374,469
$ 1,371,189
$
211,415
$
63,417
$
25,199
$ 11,045,689
December 31, 2020
Not Past Due
Less than 90
Days
91 to 180
Days
181 to 365
Days
More than 365
Days
Total
Expected credit loss rate
0%
0%-2%
0%-50%
0%-100%
50%-100%
Gross carrying amount
Loss allowance (lifetime
ECLs)
$ 4,721,878
$ 2,367,951
$ 276,842
$ 153,113
$ 117,369
$ 7,637,153
-
(1,937 )
(8,503 )
(13,451 )
(70,131 )
(94,022 )
Amortized cost
$ 4,721,878 $ 2,366,014
$ 268,339
$ 139,662
$
47,238
$ 7,543,131
The movements of the loss allowance of trade receivables were as follows:
Balance at January 1
Add: Amount recovered
(Less) add: Net remeasurement of loss allowance
Less: Amounts written off
Foreign exchange gains and losses
For the Year Ended December 31
2021
2020
$ 94,022
8,764
(7,900)
(508)
(1,475)
$ 68,967
26,688
12,209
(13,135)
(707)
Balance at December 31
$ 92,903
$ 94,022
12. FINANCE LEASE RECEIVABLES
Undiscounted lease payments
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6 onwards
Less: Unearned finance income
For the Year Ended December 31
2021
2020
$ 81,359
81,359
81,359
81,359
81,359
450,376
857,171
(136,586)
$ 81,359
81,359
81,359
81,359
81,359
531,735
938,530
(161,817)
(Continued)
205
Financial Information
Net investment in leases presented as finance lease
receivables
Current
Non-current
December 31
2021
2020
$ 720,585
$ 776,713
$ 58,042
662,543
$ 56,128
720,585
$ 720,585
$ 776,713
(Concluded)
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,
2021 and 2020.
The finance lease receivables as of December 31, 2021 and 2020 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
2021
2020
$ 6,753,215 $ 3,804,593
1,426,333
1,420,645
2,495,808
5,493,205
317,612
24,534,707 14,958,196
2,609,416
1,780,788
3,726,215
9,435,648
229,425
3,434
211,858
6,909,724
7,125,016
3,434
218,402
5,900,503
6,122,339
$ 31,659,723 $ 21,080,535
a. The cost of inventories recognized as cost of goods sold for the years ended December 31,
2021 and 2020 was NT$135,868,487 thousand and NT$99,095,630 thousand, respectively.
206
b. The cost of goods sold for the years ended December 31, 2021 and 2020 included reversals of
inventory write-downs of NT$38,114 thousand and NT$323,333 thousand, respectively. The
reversals of previous write-downs for the years ended December 31, 2021 and 2020 resulted
from the inventory closeout.
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, 2021 and 2020; the selling prices for the related
residential buildings and office buildings were RMB2,400 thousand and RMB1,346,175
thousand, respectively. The sales of the real estate in the amounts of NT$9,918 thousand and
NT$5,495,319 thousand were recorded as operating revenue for the years ended December
31, 2021 and 2020, respectively.
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.
Global PMX Co., Ltd.
Domestic unlisted ordinary shares
Foreign unlisted ordinary shares
Current
Non-current
December 31
2021
2020
$ 5,423,342 $ 3,685,476
2,763,734
26,378
-
339,955
95,101
2,894,429
7,293,386
15,928
560,757
102,745
$ 16,290,587 $ 6,910,644
- $
$
16,290,587
-
6,910,644
$ 16,290,587 $ 6,910,644
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. In the December 31, 2021 and 2020, the unrealized valuation gains
resulting from these investments in equity instruments were NT$2,594,208 thousand and
NT$1,077,834 thousand, respectively, recognized in other comprehensive income (loss).
On January 6, 2021, the Group issued 205,333 thousand shares in exchange for 171,104 thousand
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 Group also acquired the shares of
TECO Electric & Machinery Co., Ltd. from the open market. As of December 31, 2021 and
December 31, 2020, the Group held a total of 230,439 thousand and 954 thousand shares,
respectively, of TECO Electric & Machinery Co., Ltd.
207
Financial Information
15. SUBSIDIARIES
a. Subsidiaries included in consolidated financial statements
The consolidated entities as of December 31, 2021 and 2020 were as follows:
Investor
Investee
Main Business
% of Ownership
December 31
2021
2020
Walsin Lihwa
Walsin Lihwa Holdings Limited
Investment holding
100.00
100.00
Corporation
(WLHL)
Concord Industries Limited (CIL) Investment holding
Investment holding
Ace Result Global Limited
Investment holding
Energy Pilot Limited (Energy
Pilot)
Market Pilot Limited (Market
Investment holding
Pilot)
Min Maw Precision Industry
Solar power systems management,
Corp. (Min Maw)
Walsin Info-Electric Corp.
(Walsin Info-Electric)
Jin-Cherng Construction Co.
(Jin-Cherng)
design, and installation
Mechanical and electrical,
communications, and power
systems
Investment in the construction of
residential and commercial
buildings sold, rented design and
interior decoration business
contractors
Joint Success Enterprises Limited Investments
P.T. Walsin Lippo Industries (P.T.
Manufacture and sale of cables and
Walsin)
wires
PT. Walsin Lippo Kabel
Waltuo Green Resources Corp.
Cables and wires
Waste disposal, resource recovery and
cement products
PT. Walsin Nickel Industrial
Manufacture and sale of nickel pig
Indonesia
iron
Walsin Precision Technology
Manufacture and sale of stainless steel
Sdn. Bhd.
New Hono Investment Pte. Ltd.
Investment holding
New Hono
PT. Walsin Nickel Industrial
Manufacture and sale of nickel pig
Indonesia
iron
Investment Pte.
Ltd.
WLHL
100.00
100.00
-
(Note 2)
-
(Note 5)
100.00
100.00
100.00
-
(Note 2)
-
(Note 5)
100.00
99.51
99.51
99.22
99.22
49.05
70.00
70.00
100.00
50.00
(Note 1)
100.00
(Note 8)
100.00
(Note 1)
42.00
(Note 1)
49.05
70.00
70.00
100.00
50.00
(Note 1)
-
-
-
(Note 1)
Walsin (China) Investment Co.,
Investment holding
100.00
100.00
Ltd.
Jiangyin Walsin Steel Cable Co.,
Manufacture and sale of steel cables
100.00
100.00
Ltd. (JHS)
and wires
Shanghai Walsin Lihwa Power
Wire & Cable Co., Ltd.
Dongguan Walsin Wire & Cable
Manufacture and sale of cables and
95.71
95.71
wires
Manufacture and sale of bare copper
100.00
100.00
Co., Ltd.
cables and wires
Renowned International Limited
Investments
Walsin International Investments
Investments
Limited
Borrego Solar System, Inc.
Nanjing Taiwan Trade Mart
Management Co., Ltd.
Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
Solar power system
Business and assets management,
consulting and advertising services
Manufacture and sale of cold-rolled
stainless steel and flat-rolled
products
-
(Note 3)
100.00
73.49
100.00
-
(Note 3)
100.00
73.66
100.00
18.37
18.37
CIL
Walsin Specialty Steel Corp.
Sale of specialty steel products and
100.00
100.00
Changshu Walsin Specialty Steel
Co., Ltd.
Shanghai Baihe Walsin Lihwa
Specialty Steel Co., Ltd.
investment
Manufacture and sale of specialized
steel tubes, rods and wires
100.00
100.00
Manufacture and sale of stainless steel
100.00
100.00
(Continued)
208
Investor
Investee
Main Business
% of Ownership
December 31
2021
2020
Yantai Walsin Stainless Steel Co.,
Production and sale of new-type alloy
100.00
100.00
Ltd.
materials
Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
Manufacture and sale of cold-rolled
stainless steel and flat-rolled
products
Walsin Precision Technology
Manufacture and sale of stainless steel
Sdn. Bhd.
XiAn Walsin Metal Product Co.,
Ltd.
Walsin Lihwa (Changzhou)
Investment Co., Ltd.
Production and sale of medium and
heavy specialty steel plates
Commerce and investments
Jin-Cherng
Joint Success Enterprises Limited Investments
Walsin (Nanjing) Construction
Construction, rental and sale of
81.63
81.63
-
(Note 8)
100.00
-
(Note 6)
50.95
100.00
100.00
100.00
-
(Note 6)
50.95
100.00
Limited
Nanjing Walsin Property
Management Co., Ltd.
buildings and industrial factories
Property management, business
100.00
100.00
management and housing leasing
Walsin Nanjing Culture and Arts
Organize culture and arts
Co., Ltd.
Walsin Nanjing Commercial
Management Co., Ltd.
communication activity, cultural
performance, culture and arts
forwarding agency
Business management, food
marketing, catering services and
sale of groceries
Market Pilot
Limited
XiAn Walsin United Technology
Electronic devices and module
Co., Ltd.
-
(Note 9)
-
(Note 4)
-
(Note 7)
100.00
-
(Note 4)
-
(Note 7)
(Concluded)
Note 1: 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 the Group and NHI in
January 2020, the Group had the right to purchase 100% of NHI’s shares on the
terms agreed by all parties to acquire 42% equity of WNII indirectly. On June 25,
2021, the board of directors of the Company resolved to acquire 100% of NHI’s
shares and the Group acquired 100% of NHI’s shares at a price US$178,500
thousand on July 30, 2021. After the transaction, the Group directly and indirectly
acquired 92% of WNII’s shares. The Investment Commission of the Ministry of
Economic Affairs has approved the investment to pay by the Group’s own foreign
exchange. Therefore, the Group communicated with Golden Harbour International
Pte. Ltd. to exercise the early redemption and to pay back the US-currency bonds.
The Group will pay the purchase of NHI’s shares by the redemption of the bonds.
As of December 31, 2021, US$178,500 thousand has been paid.
Note 2: The liquidation of Energy Pilot Limited was completed on September 3, 2020.
Note 3: The liquidation of Renowned International Limited was completed on August 24,
2020.
Note 4: The liquidation of Walsin Nanjing Commercial Management Co., Ltd. was
completed on December 7, 2020.
Note 5: The liquidation of Market Pilot Limited was completed on December 9, 2020.
Note 6: The liquidation of Walsin Lihwa (Changzhou) Investment Co., Ltd. was completed
on October 19, 2020.
209
Financial Information
Note 7: The liquidation of XiAn Walsin United Technology Co., Ltd. was completed on
December 7, 2020.
Note 8: In order to adjust the investment structure of the Group, it was transferred from CIL
to WLC.
Note 9: The liquidation of Walsin Nanjing Culture and Arts Co., Ltd. was completed on
December 22, 2021.
b. The following entities were excluded from consolidation as of December 31, 2021 and 2020:
% of Ownership
December 31
Investor
Investee
Main Business
2021
2020
Note
WLHL
Walcom Chemical Industrial Limited
Commerce
65.00
65.00
Note
Note: The investee has a capital of HK$500 thousand and total assets of HK$1 thousand. As
of December 31, 2021 and 2020, 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 subsidiaries included in the consolidated financial
statements, namely P.T. Walsin Lippo Industries (P.T. Walsin), Borrego Solar System, Inc.
and Walsin Precision Technology Sdn, Bhd. were not audited by the auditor of WLC but by
other auditors. As of December 31, 2021 and 2020, the combined total assets of those
subsidiaries were NT$10,292,042 thousand and NT$10,148,841 thousand, respectively; for
the years ended December 31, 2021 and 2020, the combined net operating revenues of these
subsidiaries were NT$17,799,306 thousand and NT$18,427,711 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
2021
2020
Material associates
Winbond Electronics Corp.
Walton Advanced Engineering, Inc.
Walsin Technology Corp.
$ 18,357,864 22.21
2,322,664 21.01
8,166,415 18.30
$ 14,595,661
2,601,028
7,068,731
22.21
21.65
18.30
Associates that are not individually
material
Others
10,604,174
8,501,671
$ 39,451,117
$ 32,767,091
210
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
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.
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
2021
2020
$ 30,050,846 $ 25,675,797
$ 2,066,495 $ 1,512,872
$ 14,846,688 $ 20,491,986
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, 2021 and 2020 were based on the associates’ financial statements audited by
independent auditors for the same period.
a. Material associates
December 31, 2021
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
Non-controlling interests
Winbond
Electronics
Corp.
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
$ 72,506,733
80,233,551
(28,644,931)
(34,061,841)
90,033,512
$ 8,361,878
13,155,507
$ 41,187,886
52,910,618
(5,019,961) (21,557,433)
(5,259,172) (19,062,857)
53,478,214
(9,089,372)
(297,416)
11,238,252
(7,589,399)
$ 82,444,113
$ 10,940,836
$ 44,388,842
Proportion of the Group’s ownership
22.21%
21.01%
18.30%
Equity attributable to the Group
Other adjustments
$ 18,310,837
47,027
$ 2,298,670
23,994
$ 8,123,158
43,257
(Continued)
211
Financial Information
Winbond
Electronics
Corp.
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
Carrying amount
Operating revenue
$ 18,357,864
$ 99,569,924
$ 2,322,664
$ 8,118,256
$ 8,166,415
$ 42,108,708
Net profit for the year
Other comprehensive income (loss)
$ 15,000,122
4,186,931
$
118,732
(892,554)
$ 8,961,076
1,157,156
Total comprehensive income for the
year
$ 19,187,053
$
(773,822)
$ 10,118,232
(Concluded)
December 31, 2020
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
Non-controlling interests
Winbond
Electronics
Corp.
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
$ 47,530,801 $ 6,497,236 $ 39,636,422
78,512,439 11,013,279 42,416,526
(25,475,006)
(3,189,422) (19,714,368)
(2,436,908) (16,684,386)
(29,975,547)
70,592,687 11,884,185 45,654,194
(7,033,732)
(5,143,568)
-
Proportion of the Group’s ownership
22.21%
21.65%
18.30%
$ 65,449,119 $ 11,884,185 $ 38,620,462
Equity attributable to the Group
Other adjustments
$ 14,536,249 $ 2,572,926 $ 7,067,545
1,186
28,102
59,412
Carrying amount
$ 14,595,661 $ 2,601,028 $ 7,068,731
Operating revenue
$ 60,683,171 $ 5,399,201 $ 35,599,197
Net profit for the year
Other comprehensive income (loss)
$ 1,519,043 $
3,291,251
254,887 $ 7,217,645
657,013
(49,194)
Total comprehensive income for the
year
$ 4,810,294 $
205,693 $ 7,874,658
212
b. Associates that are not individually material
For the Year Ended December 31
2021
2020
The Group’s share of:
Gain (loss) from continuing operations
Other comprehensive income
327,147
$
1,839,778
119,854
$
1,809,645
Total comprehensive income for the year
$ 2,166,925
$ 1,929,499
The Group’s share of profit and other comprehensive income of the associates for the year
ended December 31, 2021 and 2020 was based on the associates’ financial statements audited
by independent auditors for the same period. For the year ended December 31, 2021, Walsin
Color Co., Ltd. was not audited by the auditor of WLC but by other auditors. As of December
31, 2021, the carrying amount of investments accounted for using the equity method was
NT$1,053,790 thousand; for the year ended December 31, 2021, the amounts of the share of
loss were NT$5,936 thousand, respectively.
17. PROPERTY, PLANT AND EQUIPMENT
Assets used by the Group
$ 41,474,488 $ 34,294,221
Land
Buildings and
Improvements
Machinery and
Equipment
Other
Equipment
Construction in
Progress
Total
December 31
2021
2020
Cost
Balance at January 1, 2021
Additions
Disposals
Reclassified
Reclassified as inventories
Effect of foreign currency
exchange differences
Balance at December 31,
$ 3,483,995 $ 16,545,654
90,205
(41,482 )
78,421
(1,164 )
49,773
-
1,463,134
682,342
$ 25,806,284
1,600,733
(323,350 )
8,021,006
-
$ 7,133,130
648,730
(178,162 )
209,169
-
$ 8,576,988
7,592,258
(60 )
(9,743,082 )
$ 61,546,051
10,010,347
(544,218 )
-
682,342
-
-
(68,579 )
(135,618 )
(29,229 )
(120,729 )
(354,155 )
2021
$ 3,611,025 $ 18,671,274
$ 34,969,055
$ 7,783,638
$ 6,305,375
$ 71,340,367
Accumulated depreciation
and impairment
Balance at January 1, 2021
Disposals
Impairment losses
recognized (reversed)
Depreciation expenses
Reclassified
Effect of foreign currency
exchange differences
Balance at December 31,
$
8,067 $ 6,265,972
$ 15,948,131
-
(37,511 )
(305,754 )
$ 5,029,660
$
(171,011 )
-
-
-
71,468
760,482
55,108
630,232
1,288,451
4,583
(7,898 )
450,632
(59,691 )
-
(12,753 )
(37,899 )
(14,390 )
-
-
-
-
-
-
$ 27,251,830
(514,276 )
693,802
2,499,565
-
(65,042 )
2021
$
8,067 $ 7,102,766
$ 17,527,744
$ 5,227,302
$
-
$ 29,865,879
(Continued)
213
Financial Information
Carrying amount at
December 31, 2021
Cost
Balance at January 1, 2020
Additions
Disposals
Reclassified
Reclassified as inventories
Effect of foreign currency
exchange differences
Balance at December 31,
Land
Buildings and
Improvements
Machinery and
Equipment
Other
Equipment
Construction in
Progress
Total
$ 3,602,958 $ 11,568,508
$ 17,441,311
$ 2,556,336
$ 6,305,375
$ 41,474,488
$ 3,453,378 $ 16,144,426
71,752
(6,290 )
$ 25,268,998
250,651
(252,518 )
501,545
-
$ 6,375,790
554,663
(132,739 )
292,364
206,871
(20,674 )
30,617
-
-
-
$ 2,001,693
7,840,247
(15,476 )
(1,000,780 )
$ 53,244,285
8,747,930
(407,023 )
-
(23,456 )
(2,782 )
-
-
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
Impairment losses
recognized (reversed)
Depreciation expenses
Reclassified
Reclassified as inventories
Effect of foreign currency
exchange differences
Balance at December 31,
$
8,067 $ 5,531,108
$ 15,120,400
-
(5,723 )
(243,278 )
$ 4,739,601
$
(128,359 )
-
-
-
-
-
696,929
-
-
-
1,021,262
(976 )
-
(691 )
385,930
976
(2,086 )
-
43,658
50,723
34,289
-
-
-
-
-
-
-
$ 25,399,176
(377,360 )
(691 )
2,104,121
-
(2,086 )
128,670
2020
$
8,067 $ 6,265,972
$ 15,948,131
$ 5,029,660
$
-
$ 27,251,830
Carrying amount at
December 31, 2020
$ 3,475,928 $ 10,279,682
$ 9,858,153
$ 2,103,470
$ 8,576,988
$ 34,294,221
The property, plant, and machinery equipment of PT. Walsin Nickel Industrial Indonesia which is
the subsidiary of the Group is depreciated on an accelerated basis over their estimated useful lives
for 16 years.
Apart from stated above, 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 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.
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, 2021 and 2020, the recorded total carrying amount of such parcels of land amounted to
NT$491,917 thousand.
After appropriate evaluation, the Group recognized an impairment loss on property, plant and
equipment of NT$693,801 thousand for the year ended December 31, 2021.
214
18. LEASE ARRANGEMENTS
a. Right-of-use assets
Carrying amount
Land
Buildings
Transportation equipment
Additions to right-of-use assets
Disposal
Depreciation charge for right-of-use assets
Land
Buildings
Transportation equipment
b. Lease liabilities
Carrying amount
Current
Non-current
December 31
2021
2020
$ 1,643,343
124,948
35,219
$ 1,480,251
156,056
28,099
$ 1,803,510
$ 1,664,406
For the Year Ended December 31
2021
2020
$ 291,861
(7,762)
$
$ 424,199
(1,245)
$
$ 57,774
57,569
16,964
$ 53,383
62,564
15,469
$ 132,307
$ 131,416
December 31
2021
2020
$ 71,470
$ 243,676
$ 75,261
$ 274,442
Range of discount rates for lease liabilities was as follows:
Land
Buildings
Transportation equipment
December 31
2021
2020
0.83%-6.123% 0.83%-6.123%
1.409%-8%
1.409%-8%
3.038%-5.75% 3.038%-5.75%
215
Financial Information
c. Other lease information
For the Year Ended December 31
2021
2020
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
$ 45,453
722
$
$ 77,768
663
$
$
8,688
$ (144,657)
$
8,683
$ (170,946)
19. INVESTMENT PROPERTIES
Completed investment properties
$ 10,431,063 $ 9,874,926
December 31
2021
2020
Cost
Balance at January 1, 2021
Additions
Reclassified from inventories
Effects of foreign currency exchange differences
Balance at December 31, 2021
Balance at January 1, 2020
Additions
Transferred to inventories
Effects of foreign currency exchange differences
Balance at December 31, 2020
Accumulated depreciation and impairment
Balance at January 1, 2021
Depreciation expense
Effect of foreign currency exchange differences
Balance at December 31, 2021
Balance at January 1, 2020
Depreciation expense
Effect of foreign currency exchange differences
Balance at December 31, 2020
216
Completed
Investment
Properties
$ 12,271,365
2,362
725,571
(7,944)
$ 12,991,354
$ 12,248,696
547
(2,188)
24,310
$ 12,271,365
$ 2,396,439
167,443
(3,591)
$ 2,560,291
$ 2,215,707
169,976
10,756
$ 2,396,439
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, 2021 and
2020, the fair values of completed investment properties’ were NT$35,173,881 thousand and
NT$33,971,481 thousand, respectively.
20. BORROWINGS
December 31
2021
2020
Short-term borrowings
Current portion of long-term borrowings
Long-term borrowings
$ 7,108,766 $ 6,591,019
$ 10,719,081 $ 6,162,400
$ 24,785,952 $ 31,406,829
a. Short-term borrowings as of December 31, 2021 and 2020 were as follows:
December 31
2021
2020
Interest Rate
%
Amount
Interest Rate
%
Amount
Procurement loans
Bank’s lines of credit
0.64-0.70
0.69-3.50
$ 2,111,447
4,997,319
0.70-0.90
0.65
$ 5,091,019
1,500,000
$ 7,108,766
$ 6,591,019
Refer to Notes 6 and 32 for collateral pledged for short-term borrowings as of December 31,
2021 and 2021.
b. Long-term borrowings as of December 31, 2021 and 2020 were as follows:
December 31
2021
Significant Covenant
Amount
2020
Amount
First Commercial Bank
Hua Nan Commercial Bank
Hua Nan Commercial Bank
Chinatrust Commercial Bank
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
Mid-term credit loan; principal repayment at maturity,
from March 5, 2018 to March 5, 2021
$
- $ 1,000,000
-
1,500,000
-
1,500,000
-
1,000,000
Mega International Commercial
Long-term credit loan; principal repayment at maturity,
-
1,000,000
Bank Co., Ltd.
Bank of Taiwan
from March 5, 2018 to March 5, 2021
Long-term credit loan; principal repayment at maturity,
3,000,000
3,000,000
from March 4, 2019 to March 4, 2022
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
(Continued)
217
Financial Information
December 31
2021
Significant Covenant
Amount
2020
Amount
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 Bank Long-term credit loan; principal repayment at maturity,
1,000,000
1,000,000
Chang Hwa Commercial Bank
Long-term credit loan; principal repayment at maturity,
1,000,000
1,000,000
from June 3, 2019 to June 3, 2022
from June 3, 2019 to June 3, 2022
KGI Bank
Long-term credit loan; principal repayment at maturity,
1,500,000
1,500,000
Chinatrust Commercial Bank
Standard Chartered Bank
DBS Bank
DBS Bank
DBS Bank
from June 3, 2019 to June 3, 2022
Long-term credit loan; principal repayment at maturity,
from September 3, 2019 to September 3, 2022
Long-term credit loan; principal repayment at maturity,
from January 14, 2020 to December 31, 2023
Long-term credit loan; principal repayment at maturity,
from March 30, 2020 to March 30, 2023
1,500,000
1,500,000
5,352,144
5,352,144
3,028,500
3,028,500
Long-term credit loan; principal repayment at maturity,
3,018,600
3,018,600
from March 31, 2020 to March 31, 2023
Long-term credit loan; principal repayment at maturity,
3,010,000
3,010,000
Standard Chartered Bank
from April 15, 2020 to April 15, 2023
Long-term credit loan; principal repayment at maturity,
from September 27, 2020 to December 31, 2023
2,093,000
2,093,000
Bank of Taiwan
Long-term credit loan; principal repayments at
3,000,000
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 December 4, 2020 to
1,137,770
1,137,770
Republic of China
December 4, 2027; 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
Hua Nan Commercial Bank
Long-term credit loan; Principal repayments at
2,000,000
maturity, form March 29, 2021 to March 29, 2026;
principal to be repaid in two phases: From the 5th
year, repayments are due once every six months
Taiwan Cooperative Bank
Long-term credit loan; Principal repayments at
2,000,000
-
-
maturity, form June 28, 2021 to June 28, 2026;
principal to be repaid in two phases: 1st repayment
due 48 months after the drawdown date, 2nd
repayment due maturity date.
Long-term secured loan; from December 15, 2011 to
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
Cathay United Bank
Taipei Fubon Bank
Taipei Fubon Bank
Taipei Fubon Bank
Less: Current portion of
long-term borrowings
98,203
117,844
104,669
122,844
84,805
101,218
$
27,500 $
31,167
24,267
27,467
25,575
28,675
35,505,033 37,569,229
(6,162,400 )
(10,719,081 )
$ 24,785,952 $ 31,406,829
(Concluded)
218
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.
2) As of December 31, 2021 and 2020, the effective interest rate range of the credit
borrowings was 0.85%-1.20% and 0.10%-1.50% per annum, respectively. As of
December 31, 2021 and 2020, the effective interest rate range of the secured borrowings
was 1.66%-2.07% per annum.
3) As of December 31, 2021 and 2020, the Group’s current portion of long-term borrowings
were NT$10,719,081 thousand and NT$6,162,400 thousand, respectively, under the loan
agreements. The Group’s consolidated financial statements for the years ended December
31, 2021 and 2020 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, 2021 and
2020.
21. BONDS PAYABLE
December 31
2021
2020
The 1st unsecured bonds in 2021
$ 7,500,000
$
-
On October 8, 2021, the Company issued the first unsecured bonds for NT$7.5 billion, each with
a face value of NT$10 million. The issuance period is 5 years, and the maturity date is on October
8, 2026. The annual interest rate is 0.7%. From the issuance date, the interest will be paid once a
year, and the principal will be repaid once due.
22. 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.
219
Financial Information
The total expense recognized in profit or loss for the years ended December 31, 2021 and
2020 was NT$95,977 thousand and NT$89,868 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
2021
2020
Present value of defined benefit obligation
Fair value of plan assets
$ 1,487,554
(1,037,916)
$ 1,371,774
(1,083,800)
Net defined benefit liabilities
$
449,638
$
287,974
Balance at January 1, 2020
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
Present Value of
the Defined
Benefit
Obligation
Fair Value of
the Plan Assets
Net Defined
Benefit
Liability (Asset)
$ 1,462,115
$ (1,003,099)
$
459,016
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)
-
-
-
3,949
$
30,358
(45,036)
(Continued)
220
Recognized in other comprehensive
loss
Contributions from the employer
Benefits paid
Account paid
Balance at December 31, 2020
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 gain - changes in
financial assumptions
Actuarial loss - experience
adjustments
Recognized in other comprehensive
loss
Contributions from the employer
Benefits paid
Present Value of
the Defined
Benefit
Obligation
Fair Value of
the Plan Assets
Net Defined
Benefit
Liability (Asset)
(10,729)
-
(88,652)
(14,620)
1,371,774
(32,941)
(128,929)
88,652
-
(1,083,800)
10,917
6,801
17,718
-
(5,366)
(5,366)
(43,670)
(128,929)
-
(14,620)
287,974
10,917
1,435
12,352
-
(13,584)
(13,584)
38,641
(15,729)
151,322
174,234
-
(76,172)
-
-
-
(13,584)
(11,338)
76,172
38,641
(15,729)
151,322
160,650
(11,338)
-
449,638
(Concluded)
Balance at December 31, 2021
$ 1,487,554
$ (1,037,916)
$
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
2021
2020
$ 6,240
945
4,918
249
$ 9,465
1,286
4,947
479
$ 12,352
$ 16,177
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
221
Financial Information
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
2021
0.625%
2.25%
2020
0.50%
2.25%
If possible reasonable change in each of the significant actuarial assumptions occur and all
other assumptions 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
2021
2020
$ (61,945)
$ 66,092
$ 63,726
$ (60,375)
$ (59,752)
$ 63,935
$ 61,541
$ (58,145)
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.
23. EQUITY
Share capital
Ordinary shares
Capital surplus
Retained earnings
Others
Non-controlling interests
222
December 31
2021
2020
$ 34,313,329 $ 32,260,002
15,690,406
36,330,187
187,640
2,812,595
18,440,875
47,787,207
5,342,113
2,062,744
$ 107,946,268 $ 87,280,830
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
2021
2020
6,500,000
6,500,000
$ 65,000,000 $ 65,000,000
3,226,000
$ 34,313,329 $ 32,260,002
3,431,333
As of January 1, 2020, the amount of WLC’s issued shares was all NT$33,260,002 thousand,
which consisted of 3,326,000 thousand shares at par value of NT$10.
In August 2020 and November 2020, WLC reduced capital and cancelled 40,000 thousand
and 60,000 thousand treasury shares, respectively. In January 2021, the Group issued 205,333
thousand shares of TECO Electric & Machinery Co., Ltd. Hence, as of December 31, 2021,
the paid-in capital was NT$34,313,329 thousand, divided into 3,431,333 thousand ordinary
shares at par value of NT$10.
As of December 31, 2021, 2 thousand GDRs of WLC were traded on the Luxemburg Stock
Exchange. The number of common shares represented by the GDRs was 22 thousand shares
(one GDR represents 10 common shares).
b. Capital surplus
Issuance of ordinary shares
The difference between the consideration received or
paid and the carrying amount of the subsidiaries’ net
assets during actual disposal or acquisition
Share of changes in capital surplus of associates
Treasury share transactions
Gain on disposal of property, plant and equipment
Others
December 31
2021
2020
$ 12,639,452
$ 9,867,654
3,124
440,288
2,254,074
2,074,231
1,029,706
-
467,070
2,254,074
2,074,231
1,027,377
$ 18,440,875
$ 15,690,406
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.
223
Financial Information
c. Retained earnings and dividend policy
The shareholders of WLC held their regular meeting on July 15, 2021, and in that meeting,
resolved the amendments to WLC’s Articles of Incorporation (the “Articles”). Under the
dividends policy as set forth in the amended Articles, where WLC made a profit in a fiscal
year, the profit shall be first utilized for paying taxes, offsetting losses of previous years,
setting aside as legal reserve 10% of the remaining profit this requirement is not applicable
when the legal reserve has reached the total capital, and then any remaining profit together
with prior unappropriated earnings shall be appropriated for special reserve or appropriate
reversal of special reserve in accordance with the laws and regulations, and then the balance
shall be used by WLC’s board of directors as the basis for proposing a distribution plan,
which should be resolved in the shareholders’ meeting for the distribution of dividends to
shareholders. Other than the aforementioned regulations, WLC shall reserve no lesser than
40% of the balance amount as shareholders’ profit after offsetting its loss and tax payments in
the previous year, capital reserve, and special reserve adjusted by the accumulated net
deduction of other equity. The profits shall be distributed in cash or in form of shares; cash
dividends shall not be lesser than 70% of the total dividends.
Before the amendments, where WLC made a profit in a fiscal year, the profit shall be first
utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10%
of the remaining profit this requirement is not applicable when the legal reserve has reached
the total capital, and then any remaining profit together with prior unappropriated earnings
shall be appropriated for setting aside or reversing a special reserve in accordance with the
laws and regulations, and then shall be used by WLC’s board of directors as the basis for
proposing a distribution plan, which should be resolved in the shareholders’ meeting for the
distribution of dividends to shareholders. WLC shall reserve no lesser than 40% of the balance
amount as shareholders’ 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.
Appropriation of earnings to the 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.
Refer to Note 25 for the policies on the distribution of employees’ compensation and
remuneration of directors and supervisors.
The appropriation of earnings for 2020 and 2019, which were approved in the shareholders’
meeting on July 15, 2021 and May 29, 2020, respectively, were as follows:
224
Appropriation of Earnings
Dividends Per Share (NT$)
2020
2019
2020
2019
Legal reserve
Special reserve
Cash dividends
$
681,368 $
(398,160)
314,968
(932,728)
3,088,200 1,663,000
$
-
-
0.9
$
-
-
0.5
$ 3,371,408 $ 1,045,240
The appropriation of earnings for 2021, which were proposed by WLC’s board of directors on
February 22, 2022, were as follows:
Legal reserve
Cash dividends
Appropriation
of Earnings
Dividends Per
Share (NT$)
$ 1,454,522
5,490,133
$
-
1.6
$ 6,944,655
The appropriations of earnings for 2021 are subject to the resolution of the shareholders in
their meeting to be held on May 13, 2022.
d. Special reserve
Special reserve
$ 2,712,250
$ 3,110,410
Information regarding any changes to the above special reserve was as follows:
December 31
2021
2020
Balance at January 1
Appropriations
For the Year Ended December 31
2021
2020
$ 3,110,410
(398,160)
$ 4,043,138
(932,728)
Balance at December 31
$ 2,712,250
$ 3,110,410
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 using the equity method
For the Year Ended December 31
2021
2020
$ (5,905,135)
$ (5,546,359)
(195,552)
(358,776)
Balance at December 31
$ (6,100,687)
$ (5,905,135)
225
Financial Information
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.
2) Unrealized valuation gain (loss) on financial assets at FVOCI
Balance at January 1
Unrealized gain - equity instruments
Share from associates accounted for using the
equity method
For the Year Ended December 31
2021
2020
$ 6,092,775
2,594,208
$ 2,435,949
1,258,198
2,847,284
2,398,628
Balance at December 31
$ 11,534,267 $ 6,092,775
3) Cash flow hedges
For the Year Ended December 31
2021
2020
Balance at January 1
Other equity from associates accounted for using
the equity
$
-
$
(91,467)
Balance at December 31
$ (91,467)
$
-
-
-
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.
226
24. OPERATING REVENUE
Sales revenue
Sales of real estate
Other revenue
For the Year Ended December 31
2021
2020
$ 152,001,410 $ 105,217,487
5,495,319
1,833,797
9,918
4,653,438
$ 156,664,766 $ 112,546,603
25. NET PROFIT (LOSS) FROM CONTINUING OPERATIONS
Non-operating Income and Expense - Gain (Loss) on Disposal of Investment
For the Year Ended December 31
2021
2020
Gain (loss) on disposal of investments - commodity futures
Gain on disposal of investments - foreign exchange
$ 513,703
$ (217,842)
forward contracts
167,227
142,504
Gain on disposal of investments - exchange rate swap
contracts
Loss on disposal of investments - commodity options
14,301
(16,024)
2,349
(2,938)
$ 679,207
$ (75,927)
Non-operating Income and Expense - Impairment Loss (Recognized) Reversed
Impairment loss (recognized) reversed on property, plant
and equipment
Others
For the Year Ended December 31
2021
2020
$ (693,801)
(91)
$
691
(17)
$ (693,892)
$
674
Employee Benefits Expense, Depreciation and Amortization
For the Year Ended December 31, 2021
Operating
Costs
Operating
Expenses
Non-operating
Expenses and
Losses
Total
Short-term employment
benefits
Post-employment benefits $
$
Other employee benefits
$ 3,540,027
190,141
439,493
$ 2,529,250
115,367
$
301,869
$
$
$
$
-
-
-
$ 6,069,277
305,508
$
741,362
$
(Continued)
227
Financial Information
For the Year Ended December 31, 2021
Operating
Costs
Operating
Expenses
Non-operating
Expenses and
Losses
Total
Depreciation
Property, plant and
equipment
Right-of-use assets
Investment properties
$ 1,918,969
32,101
165,918
$
577,770
100,206
1,525
$
2,826
-
-
$ 2,499,565
132,307
167,443
$ 2,116,988
$
679,501
$
2,826
$ 2,799,315
Amortization
$
4,225
$
27,273
$
-
$
31,498
(Concluded)
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 $ 2,254,057 $
75,465 $
232,115 $
103,937 $
410,065 $
- $ 5,386,771
179,402
- $
642,180
- $
Depreciation
Property, plant and
equipment
$ 1,839,259 $
Right-of-use assets
Investment properties
31,990
164,050
261,784 $
99,426
5,926
3,078 $ 2,104,121
131,416
169,976
-
-
$ 2,035,299 $
367,136 $
3,078 $ 2,405,513
Amortization
$
5,664 $
29,821 $
- $
35,485
According to the Company’s Articles, the Company accrues employees’ compensation and
remuneration of directors at rates of no less than 1% and no higher than 1%, respectively, of net
profit before income tax, employees’ compensation, and remuneration of directors. For the years
ended December 31, 2021 and 2020, the compensation of employees amounted to NT$187,000
thousand and NT$68,500 thousand, respectively, and the remuneration of directors and
supervisors amounted to NT$75,000 thousand and NT$34,050 thousand, respectively. The
compensation of employees and the remuneration of directors and supervisors for the years ended
December 31, 2021 and 2020 were approved by the Group’s board of directors on February 22,
2022 and February 26, 2021, respectively.
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.
228
There was no difference between the employees’ compensation and the remuneration of directors
and supervisors for the years ended December 31, 2020 and 2019 resolved by WLC’s board of
directors on February 26, 2021 and February 27, 2020, 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 2022 and 2021 is available at the Market Observation
Post System website of the Taiwan Stock Exchange.
26. INCOME TAXES RELATING TO CONTINUING OPERATIONS
a. Income tax recognized in profit or loss
Income tax expense are 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 to deferred tax attributable to changes
in tax rates and laws
For the Year Ended December 31
2021
2020
$ 2,173,361
83,446
(7,968)
6,156
-
2,254,995
$ 1,155,082
48,843
(5,279)
1,375,227
16,218
2,590,090
1,615,411
(280,516)
(5,222)
1,610,189
(64,710)
(345,226)
Income tax expense recognized in profit or loss
$ 3,865,184
$ 2,244,864
A reconciliation of accounting profit and income tax expense is as follows:
For the Year Ended December 31
2021
2020
Profit before tax from continuing operations
$ 19,122,498
$ 9,250,665
Income tax expense calculated at the statutory rate
Equity in investees’ net gain
Tax-exempt dividend income
Loss on disposal of equity investments
Loss on investments
Tax-exempt subsidize revenue
Others
Unrecognized loss carryforwards/deductible temporary
$ 3,931,277
481,251
(111,889)
-
(384,000)
-
(23,339)
$ 2,961,094
(1,008,704)
(21,701)
(560,411)
(495,100)
(111,889)
(3,880)
150,520
(111,889)
differences
(104,528)
(131,035)
(Continued)
229
Financial Information
Adjustments for prior years’ tax
Income tax on unappropriated earnings
Land value increment tax
For the Year Ended December 31
2021
2020
(13,190)
83,446
6,156
(69,989)
48,843
1,375,227
Income tax expense recognized in profit or loss
$ 3,865,184
$ 2,244,864
(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.
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
December 31
2021
2020
$
28,619
$
47,864
$ 6,082,152
$ 4,557,761
December 31
2021
2020
$
119,774
32,000
$
300,951
32,000
Provision for impairment loss on idle assets
Unrealized gross profit from intercompany transactions
Provision for devaluation loss on long-term
investments
Difference between financial and tax accounting of the
depreciation of property, plant and equipment
Prepaid expense
Loss of liquidation of investments
Others
42,307
10,000
2,000
34,564
17,000
6,489
547,000
547,000
21,583
899,015
384,000
760,870
400
1,173,984
-
316,157
$ 2,818,549
$ 2,428,545
(Continued)
230
Deferred tax liabilities
Difference between financial and tax accounting of the
depreciation of property, plant and equipment
Reserve for land value increment tax
Unrealized gain on investments
Others
December 31
2021
2020
$
$
(67,388)
(153,214)
(2,020,432)
26,384
(60,930)
(173,329)
-
19,802
$ (2,214,650)
$
(214,457)
(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 2021
Expiry in 2022
Expiry in 2023
Expiry in 2024
Expiry in 2025
Expiry in 2026
December 31
2021
2020
$
-
44,883
75,676
85,267
82,435
2,186
$ 643,157
77,524
109,241
90,064
3,937
-
$ 290,447
$ 923,923
e. The Group’s tax loss carryforwards as of December 31, 2021 were as follows:
Expiry Year
2022
2023
2024
2025
2026
2031
Tax Loss
Carryforwards
$ 44,883
152,856
87,057
95,532
16,392
13,501
$ 410,221
f. WLC’s income tax returns through 2018 had been assessed by the tax authorities.
231
Financial Information
27. EARNINGS PER SHARE
For the Year Ended December 31
2021
2020
Amounts
(Numerator)
After Income
Tax
(Attributable
to Parent’s
Shareholders)
Shares
(Denominator)
(In Thousands)
Earnings Per
Share (In
Dollars)
After Income
Tax
(Attributable
to Parent’s
Shareholders)
Amounts
(Numerator)
After Income
Tax
(Attributable
to Parent’s
Shareholders)
Earnings Per
Share (In
Dollars)
After Income
Tax
(Attributable
to Parent’s
Shareholders)
Shares
(Denominator)
(In Thousands)
Basic earnings per share
Net income
$ 14,642,629
3,428,520
$ 4.27
$ 6,691,149
3,276,128
$ 2.04
Effect of potentially
dilutive ordinary
shares
Diluted earnings per
share
-
7,632
-
4,100
Employee bonus
$ 14,642,629
3,436,152
$ 4.26
$ 6,691,149
3,280,228
$ 2.04
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, 2021 and 2020, deposits received under operating leases amounted to
NT$329,321 thousand and NT$303,187 thousand, respectively (recorded under other non-current
liabilities).
As of December 31, 2021, the Group’s future minimum lease receivables on non-cancelable
operating lease commitments are as follows:
2022
2023-2027
After 2027
$ 1,237,025
2,028,375
232,010
$ 3,497,410
29. CAPITAL MANAGEMENT
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).
232
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 financial statements approximate the fair values.
December 31, 2021
Financial liabilities
Financial liabilities at amortized cost
Carrying
Amount
Level 1
Level 2
Level 3
Total
Fair Value
Bonds payable
$ 7,500,000
$
-
$ 7,500,000
$
-
$ 7,500,000
The fair values of the financial assets and financial liabilities included in the Level 2
categories above have been determined in accordance with the income approach based on a
discounted cash flow analysis. The observable inputs including bond duration, bond interest
rates and credit rating.
b. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy
December 31, 2021
Financial assets at FVTPL
Derivatives not designated as
Level 1
Level 2
Level 3
Total
hedging instruments
$
1,940 $
14,207 $
- $
16,147
Derivatives financial assets for
hedging
-
89,232
-
89,232
$
1,940 $
103,439 $
- $
105,379
Financial assets at fair value
FVTOCI
Investments in equity
instruments
Listed securities in the ROC $ 15,627,085 $
Unlisted securities
-
- $
-
- $ 15,627,085
663,502
663,502
233
Financial Information
Level 1
Level 2
Level 3
Total
$ 15,627,085 $
- $
663,502 $ 16,290,587
Level 1
Level 2
Level 3
Total
(Continued)
Financial liabilities at FVTPL
Derivatives not designated as
hedging instruments
$
- $
37,439 $
- $
37,439
(Concluded)
December 31, 2020
Financial assets at FVTPL
Level 1
Level 2
Level 3
Total
Derivatives not designated as
hedging instruments
$
73,329 $
Corporate bonds
Derivatives financial assets for
hedging
-
-
- $
-
- $
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
FVTOCI
Investments in equity
instruments
Listed securities in the ROC $ 6,475,588 $
Unlisted securities
-
- $
-
- $ 6,475,588
435,056
435,056
$ 6,475,588 $
- $
435,056 $ 6,910,644
Financial liabilities at FVTPL
Derivatives not designated as
hedging instruments
$
- $
8,374 $
- $
8,374
2) There were no transfers between Levels 1, 2 and 3 for the years ended December 31, 2021
and 2020.
3) Reconciliation of Level 3 fair value measurements of financial instruments.
For the year ended December 31, 2021
Financial Assets
234
Financial Assets
at FVTOCI
Equity
Instruments
Balance at January 1, 2021
Additions
Capital reduction and refund
Financial Assets
Recognized in other comprehensive income
Effects of exchange rate changes
Balance at December 31, 2021
For the year ended December 31, 2020
Financial Assets
Balance at January 1, 2020
Additions
Recognized in other comprehensive income
Effects of exchange rate changes
Balance at December 31, 2020
$ 435,056
177,887
(3,615)
(Continued)
Financial Assets
at FVTOCI
Equity
Instruments
$ 54,678
(504)
$ 663,502
(Concluded)
Financial Assets
at FVTOCI
Equity
Instruments
$ 593,981
58,950
(222,166)
4,291
$ 435,056
4) 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.
5) Valuation techniques and inputs applied for Level 3 fair value measurement
Financial Instruments
Valuation Techniques and Inputs
235
Financial Information
Unlisted equity securities
Market approach. Fair values are determined based on
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.
(Continued)
236
Financial Instruments
Valuation Techniques and Inputs
Net asset method. Fair values are determined based on the
book value of companies.
Discounted cash flow. Present values are determined based
on future cash flows discounted at market yield.
Derivatives - options
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.
c. Categories of financial instruments
Financial assets
(Concluded)
December 31
2021
2020
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 (current and
non-current)
Financial assets at FVTPL (current and non-current)
Financial assets at FVTOCI (current and non-current)
$ 10,387,581
5,750,344
$ 11,944,408
4,460,992
13,673,100
720,585
1,620,595
530,650
207,622
-
10,517,263
776,713
887,091
705,277
221,314
1,315,970
89,232
16,147
16,290,587
8,282
5,757,188
6,910,644
Financial liabilities
Financial liabilities at FVTPL (current and
non-current)
Financial liabilities at amortized cost
37,439
8,374
Short-term borrowings
Contract liabilities
Notes payable and trade payables
Other payables
Bonds payable
Long-term borrowings (including current portion)
Deposits received (accounted for as other current
and non-current liabilities)
7,108,766
3,426
8,840,868
4,861,341
7,500,000
35,505,033
6,591,019
1,499
7,729,729
5,143,921
-
37,569,229
920,410
532,530
237
Financial Information
d. Financial risk management objectives and policies
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.
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
238
December 31
2021
2020
$ 22,471,643
122,926
953,435
67,335
15,903
$ 7,361,149
27,663
487,961
-
8,771
(Continued)
Australian dollar
Malaysian ringgit
Indonesian rupiah
Liabilities
U.S. dollar
Japanese yen
Euro
Malaysian ringgit
Renminbi
Swiss franc
Indonesian rupiah
December 31
2021
2020
31,714
-
3,267,147
12,493
713,350
111,268
6,392,384
-
830
-
743
513
103,634
14,723,112
1,108
159
48,113
795,234
549
-
(Concluded)
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
2021
2020
$ 9,660,314
795,675
$ 8,661,457
-
10,204,046
600,096
8,951,264
317,514
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.
U.S. Dollar Impact
For the Year Ended December 31
2021
2020
Profit or loss
$ 155,355
$ (95,784)
239
Financial Information
b) Interest rate risk
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:
Fair value interest rate risk
Financial liabilities
Cash flow interest rate risk
Financial assets
Financial liabilities
Sensitivity analysis
December 31
2021
2020
$ 7,500,000
$
-
$
-
42,613,799
$ 1,315,970
44,160,248
The sensitivity analysis below shows the possible effect on profit and loss assuming a
change in was determined based on the Group’s exposure to interest rates for financial
instruments at the end of the reporting period. For floating liabilities, the analysis was
prepared assuming the amount of each liability outstanding at the end of the reporting
period was outstanding for the whole year.
If interest rates had been 1% basis points higher and all other variables were held
constant, the Group’s pre-tax, net profit for the years ended December 31, 2021 and
2020 would have decreased by NT$426,138 thousand and NT$428,443 thousand,
respectively.
Hedge accounting
For the year ended December 31, 2021
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 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
Maturity
Forward Price
Line Item in
Balance Sheet
Carrying Amount
Asset
Liability
Change in Value
Used for
Calculating Hedge
Effectiveness
Fair value hedges
Exchange rate swap
USD to RMB
USD75,000/
2022.1.14
RMB
498,529
Financial assets
RMB 10,204
$
contracts
RMB488,325
for hedging
Exchange rate swap
USD to RMB
USD70,000/
2022.1.14
RMB
465,153
Financial assets
RMB
9,453
contracts
RMB455,700
for hedging
Exchange rate swap
USD to RMB
USD20,000/
2022.6.08
RMB
129,728
Financial assets
RMB
508
contracts
RMB129,220
for hedging
Exchange rate swap
USD to RMB
USD15,000/
2022.6.08
RMB
97,308
Financial assets
RMB
387
contracts
RMB96,921
for hedging
$
-
-
-
-
-
-
-
-
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
240
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
Maturity
Forward Price
Line Item in
Balance Sheet
Carrying Amount
Asset
Liability
Change in Value
Used for
Calculating Hedge
Effectiveness
Fair value hedges
Exchange rate swap
USD to NTD
USD21,000/
2021.1.13
$
590,059
contracts
NTD607,457
Exchange rate swap
USD to NTD
USD30,000/
2021.1.13
842,940
contracts
NTD867,795
Exchange rate swap
USD to NTD
USD30,000/
2021.1.13
842,940
contracts
NTD867,810
Exchange rate swap
USD to NTD
USD21,000/
2021.1.13
590,058
contracts
NTD607,467
Exchange rate swap
USD to NTD
USD30,000/
2021.1.13
842,940
contracts
NTD867,810
Exchange rate swap
USD to NTD
USD27,000/
2021.1.13
758,646
contracts
NTD781,029
Exchange rate swap
USD to NTD
USD30,000/
2021.1.13
842,940
contracts
NTD867,810
Exchange rate swap
USD to NTD
USD11,000/
2021.1.13
309,078
contracts
NTD318,197
Exchange rate swap
USD to RMB USD21,000/
2021.1.15
RMB
145,695
contracts
RMB141,259
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
Financial liabilities
for hedging
Financial assets for
hedging
$
-
-
-
-
-
-
-
-
RMB 4,436
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.
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.
241
Financial Information
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, 2021
Non-derivative
financial liabilities
Variable interest rate
liabilities
Lease liabilities
Fixed interest rate
liabilities
Non-interest bearing
December 31, 2020
Non-derivative
financial liabilities
1 Year
1-2 Years
2-5 Years
5+ Years
Total
$ 17,827,847
83,709
$ 16,648,182
68,394
$ 7,000,000
100,609
$ 1,137,770
141,279
$ 42,613,799
393,991
-
14,491,770
-
29,024
7,500,000
101,825
-
-
7,500,000
14,622,619
$ 32,403,326
$ 16,745,600
$ 14,702,434
$ 1,279,049
$ 65,130,409
1 Year
1-2 Years
2-5 Years
5+ Years
Total
Variable interest rate liabilities
Lease liabilities
Non-interest bearing
$ 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
b) The Group’s derivative financial instruments with agreed upon settlement dates were
as follows:
December 31, 2021
On Demand
or Less Than
1 Month
1-3 Months
3 Months to
1 Year
1-5 Years
Total
Net settled
Commodity futures
contracts
Foreign exchange forward
contracts
Exchange rate swap
contracts
242
$ 16,434
$ (19,571)
$
5,077
$
13,115
47,904
146
-
946
3,889
$ 77,453
$ (19,425)
$
9,912
$
-
-
-
-
$
1,940
14,207
51,793
$ 67,940
December 31, 2020
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
$
(617)
$ 62,663
$ 11,283
$
(8,020)
8,282
(44)
-
(310)
-
$
(355)
$ 62,619
$ 10,973
$
-
-
-
-
$ 73,329
(8,374)
8,282
$ 73,237
e. Transfers of financial assets
Factored trade receivables that are not overdue at the end of the year were as follows:
Receivables
Factoring
Proceeds
Amount
Reclassified
to Other
Receivables
Advances
Received -
Unused
Advances
Received -
Used
Annual
Interest
Rates on
Advances
Received
(Used) (%)
Counterparty
December 31, 2021
CTBC bank
$ 150,495 $
5,786 US$ 2,700 $
December 31, 2020
CTBC bank
$ 137,121 $ 21,266 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
Winbond Electronics Corp.
Walsin Technology Corp.
Walton Advanced Engineering, Inc.
Chin-Xin Investment Co., Ltd.
Changzhou China Steel Precision Materials Co., Ltd.
Associate
Associate
Associate
Associate
Associate
(Continued)
243
Financial Information
Related Party Name
Related Party Category
Hangzhou Walsin Power Cable & Wire Co., Ltd.
Walsin Color Co., Ltd.
Nuvoton Technology Corporation
Prosperity Dielectrics Co., Ltd.
HannStar Display Corp.
Kuong Tai Metal Industrial Co., Ltd.
HannStar Board Tech. (Jiangyin) Corp
HannStar Board Corp.
Global Brands Manufacture Ltd.
Info-Tek Corp.
Associate
Associate
Associate
Associate
Substantive related party
Substantive related party
Substantive related party
Substantive related party
Substantive related party
Substantive related party
(Concluded)
For the Year Ended December 31
2021
2020
$
6,458
1,751,701
$
8,782
903,376
$ 1,758,159
$
912,158
For the Year Ended December 31
2021
2020
$ 46,197
1,029
$ 44,514
993
$ 47,226
$ 45,507
For the Year Ended December 31
2021
2020
$ 33,027
4,961
$ 30,100
3,891
$ 37,988
$ 33,991
b. Sales
Associates
Other related parties
c. Rental income
Associates
Other related parties
d. Purchases of goods
Associates
Other related parties
244
e. Administrative expenses
Associates
Other related parties
For the Year Ended December 31
2021
2020
$ 14,889
13,558
$ 12,955
10,725
$ 28,447
$ 23,680
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
h. Trade receivables
For the Year Ended December 31
2021
2020
$ 149,816
140,259
7,705
-
$
106,722
2,890
$ 297,780
$ 109,612
December 31
2021
2020
$
2,186
$
6,312
December 31
2021
2020
Other related parties
$ 17,229
$ 39,054
i. Notes payable
Associates
j. Trade payables
December 31
2021
2020
$ 10,257
$ 16,857
December 31
2021
2020
Other related parties
$
601
$
684
245
Financial Information
k. Other receivables (excluding financing provided)
Associates
Other related parties
l. Financing provided
December 31
2021
2020
$ 19,279
2,648
$
9,945
2,598
$ 21,927
$ 12,543
Financing provided for years ended December 31, 2021 and 2020 are as follows:
December 31, 2021
Highest
Balance for
the Period
Ending
Balance
Interest
Income
Interest
Rate
Related Parties
Hangzhou Walsin Power
Cable & Wire Co., Ltd.
$ 350,991
$ 347,329
$ 15,310
4.35%
December 31, 2020
Highest
Balance for
the Period
Ending
Balance
Interest
Income
Interest Rate
Related Parties
Hangzhou Walsin Power
Cable & Wire Co., Ltd.
$ 350,663
$ 349,187
$ 16,159 4.35%-4.79%
m. Guarantee deposits
Associates
Other related parties
December 31
2021
2020
$
7,453
282
$
7,225
282
$
7,735
$
7,507
n. Disposal of property, plant and equipment (included investment properties)
For the Year Ended December 31
2021
2020
Price
Gain on
Disposals
Price
Gain on
Disposals
Prosperity Dielectrics
Co., Ltd.
$
-
$
-
$
295
$
295
246
o. Compensation of key management personnel
The remuneration of directors and key executives was as follows:
Short-term benefits
Post-employment benefits
December 31
2021
2020
$ 217,518
1,392
$ 127,218
1,414
$ 218,910
$ 128,632
The remuneration of directors and key executives, as determined by the remuneration
committee, was based on the performance of individuals and market trends.
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:
December 31
2021
2020
Refundable deposits (recorded under other financial assets -
current)
$
61,964
$
79,977
Restricted deposits (recorded under other financial assets -
current)
388,193
538,468
Pledged time 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
8,683
-
58,042
662,543
52,534
-
8,730
56,128
720,585
52,406
$ 1,231,959
$ 1,456,294
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, 2021 and 2020 were as follows:
a. Outstanding letters of credit not reflected in the accompanying consolidated financial
statements as of December 31, 2021 and 2020 were as follows (in thousands):
247
Financial Information
U.S. dollar
Japanese Yen
Euro
Renminbi
New Taiwan dollar
December 31
2021
2020
US$ 9,572
JPY 160,710
EUR 26,852
RMB 13,134
NT$ 47,575
US$ 17,455
JPY 108,812
EUR 4,770
RMB 13,134
NT$ 82,347
b. Outstanding standby letters of credit not reflected in the consolidated financial statements as
follows (in thousands):
New Taiwan dollar
U.S. dollar
Renminbi
December 31
2021
2020
NT$ 665,286
US$
30
RMB 111,504
NT$ 392,784
US$
30
RMB 41,533
c. Based on the tariff and relevant regulations, the Group shall issue a letters of credit to import
goods and to meet the needs of post-release duty payment. The guaranteed amount was as
follows:
December 31
2021
2020
New Taiwan dollar
NT$ 462,000
NT$ 434,000
d. Non-cancelable raw material procurement contracts were as follows:
U.S. dollar
Renminbi
December 31
2021
2020
US$
42,595
RMB 259,005
US$
RMB
22,681
-
e. The Group entered into a contract for the construction of new plants on the Group’s own land.
The amount of the unrecognized commitments were as follow:
New Taiwan dollar
U.S. dollar
Renminbi
December 31
2021
2020
NT$ 2,702,350
4,362
US$
RMB 395,368
NT$
-
US$ 115,670
-
RMB
248
34. 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, 2021
Financial assets
Monetary items
U.S. dollar
Japanese yen
Euro
Hong Kong dollar
Australian dollar
Singapore dollars
Indonesian rupiah
Non-monetary items
U.S. dollar
Financial liabilities
Monetary items
U.S. dollar
Euro
Renminbi
Swiss franc
Indonesian rupiah
Non-monetary items
U.S. dollar
December 31, 2020
Financial assets
Monetary items
U.S. dollar
Japanese yen
Euro
Hong Kong dollar
Australian dollar
Malaysian ringgit
Foreign
Currency
Exchange Rate
Carrying
Amount
$
811,837
511,128
30,442
4,481
1,579
3,291
1,650,074,291
$
27.6800
0.2405
31.3200
3.5490
20.0800
20.4600
0.00198
22,471,643
122,926
953,435
15,903
31,714
67,335
3,267,147
320
27.6800
8,864
230,939
27
171
17
52,340,604
27.68
31.3200
4.3416
31.1750
0.00198
6,392,384
830
743
513
103,634
1,353
27.68
37,439
Foreign
Currency
Exchange Rate
Carrying
Amount
$
258,467
100,120
13,934
2,388
596
105,067
$
28.4800
0.2763
35.0200
3.6730
21.9500
6.7895
7,361,149
27,663
487,961
8,771
12,493
713,350
(Continued)
249
Financial Information
Indonesian rupiah
Non-monetary items
U.S. dollar
Renminbi
Financial liabilities
Monetary items
U.S. dollar
Japanese yen
Euro
Malaysian ringgit
Renminbi
Swiss franc
Non-monetary items
U.S. dollar
Foreign
Currency
Exchange Rate
Carrying
Amount
$
54,811,630
0.0020
$
111,268
201,893
43,268
28.4800
4.3648
5,749,918
188,857
516,963
4,011
5
7,086
182,191
17
28.4800
0.2763
35.0200
6.7895
4.3648
32.3050
6,377
28.4800
14,723,112
1,108
159
48,113
795,234
549
181,613
(Concluded)
For the years ended December 31, 2021 and 2020, realized and unrealized net foreign exchange
losses were NT$237,222 thousand and NT$66,726 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.
35. 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)
250
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 10):
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;
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)
36. 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.
251
Financial Information
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
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.
252
b. Financial information
1) Segment revenue and results:
For the year ended
December 31, 2021
External net sales and operating
revenues
Operating profit
Net non-operating income (expenses)
Net interest income (expenses)
Share of profit of associates
accounted for using the equity
method
Dividend income
Gain on disposal of property, plant
and equipment
Gain on disposal of investments
Foreign exchange gain, net
Gain on financial assets and
liabilities at fair value through
profit or loss
Impairment loss
Net other income
Wires and
Cables
Stainless Steel
Resource
Real Estate
Administration
and Investing
Total
(NT$ in Thousand)
$ 64,422,883
2,239,742
$ 65,297,118
5,904,114
$ 8,571,368
4,009,584
$ 1,882,235
214,240
$ 16,491,162
977,872
$ 156,664,766
13,345,552
(325,999 )
4,808,211
561,499
20,468
679,207
(237,222 )
647,228
(693,892 )
317,446
Consolidated income before income tax
$ 19,122,498
For the year ended
December 31, 2020
External net sales and operating
revenues
Operating profit
Net non-operating income (expenses)
Net interest income (expenses)
Share of profit of associates
accounted for using the equity
method
Dividend income
Gain on disposal of property, plant
and equipment
Loss on disposal of investments
Foreign exchange loss, net
Gain on financial assets and
liabilities at fair value through
profit or loss
Impairment loss
Net other expenses
41,378,992
1,242,325
46,030,715
1,196,472
-
(53,818 )
7,099,820
3,583,825
18,037,076
29,133,271
1,252,635
878,845
$ 112,546,603
7,221,439
(278,459 )
1,696,319
110,990
(7,979 )
87,696
(66,726 )
732,121
674
(245,410 )
Consolidated income before income tax
$ 9,250,665
2) Segment assets and liabilities
Wires and Cables
Stainless Steel
Resource
Real Estate
Administration
and Investing
Total
Segment assets
December 31, 2021
December 31, 2020
$ 15,420,471
11,208,815
$ 38,002,224
30,235,244
$ 17,042,352
15,047,662
$ 28,324,476
27,684,853
$ 84,245,375
67,387,432
$ 183,034,898
$ 151,564,006
Segment liabilities
December 31, 2021
December 31, 2020
11,025,954
3,902,905
16,632,104
14,463,048
7,578,444
11,710,614
12,893,795
12,371,783
26,958,333
21,834,826
$ 75,088,630
$ 64,283,176
253
Financial Information
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
2021
2020
Non-current Assets
December 31
2021
2020
Asia
United States
$ 134,031,146
$ 90,763,089
$ 54,005,146
$ 46,169,318
of America
Europe
Others
17,315,503
3,662,416
1,655,701
17,896,829
2,048,572
1,838,113
225,071
-
-
156,460
-
-
$ 156,664,766
$ 112,546,603
$ 54,230,217
$ 46,325,778
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 2021 and
2020.
254
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2021
(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
Transactio
n 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)
0 Walsin Lihwa
Corporation
PT. Walsin Nickel
Other receivables
Yes
Industrial
Indonesia
$
(US$
17,824,000
640,000)
$
(US$
8,857,600
320,000)
$
(US$
-
- )
3.50 Operating capital $
-
Operating capital
and equipment
purchase
$
-
-
$
-
$
42,353,410
(US$ 1,530,109)
$
42,353,410
(US$ 1,530,109)
Notes:
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 = $105,883,524× 40% ＝ $42,353,410 (US$1,530,109)
b. The limit on the amount of financing provided was as follows:
The limit on the amount of financing provided = $105,883,524× 40% ＝ $42,353,410 (US$1,530,109)
2. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars.
3. The currency exchange rate as of December 31, 2021 was as follows: US$ to NT$ = 1:27.68.
2
5
5
2
5
6
WALSIN LIHWA HOLDINGS LIMITED AND SUBSIDIARIES
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2021
(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
1 Walsin (China)
Hangzhou Walsin
Other receivables
Yes
350,991
347,329
347,329
4.35
Operating capital
Investment Co.,
Ltd.
Power Cable & Wire
Co., Ltd.
(RMB 80,000 )
(RMB 80,000 )
(RMB 80,000 )
Walsin (Nanjing)
Other receivables
Yes
4,387,390
4,341,610
3,023,515
4.05
Operating capital
Construction Limited
Yantai Walsin Stainless
Steel Co., Ltd.
Other receivables
Yes
6,612,155
6,501,785
3,239,085
1.15-3.00 Operating capital
(RMB1,000,000)
(RMB1,000,000)
(RMB 696,404 )
(US$ 100,000 )
(RMB 860,000 )
(US$ 100,000 )
(RMB 860,000 )
(US$
60,115 )
(RMB 362,792 )
Jiangyin Walsin
Other receivables
Yes
1,805,170
1,766,593
1,234,307
1.15-1.65 Operating capital
Specialty Alloy
Materials Co., Ltd.
(US$
45,000 )
(RMB 120,000 )
(US$
45,000 )
(RMB 120,000 )
(US$
(RMB
44,592 )
- )
Changshu Walsin
Other receivables
Yes
2,393,248
2,343,514
Specialty Steel Co.,
Ltd.
Dongguan Walsin Wire
& Cable Co., Ltd.
Jiangyin Walsin Steel
Cable Co., Ltd.
Shanghai Walsin Lihwa
Power Wire & Cable
Co., Ltd.
58,000 )
(US$
(RMB 170,000 )
58,000 )
(US$
(RMB 170,000 )
Other receivables
Yes
2,282,800
2,214,400
Other receivables
Yes
2,038,856
2,013,444
(US$
80,000 )
(US$
80,000 )
10,000 )
(US$
(RMB 400,000 )
10,000 )
(US$
(RMB 400,000 )
Other receivables
Yes
256,815
249,120
(US$
9,000 )
(US$
9,000 )
(US$
(US$
(RMB
1,543,714
55,770 )
- )
1,895,443
68,477 )
1,168,579
8,708 )
(US$
(RMB 213,640 )
247,653
8,947 )
(US$
1.15-1.65 Operating capital
1.15-1.65 Operating capital
1.15-3.00 Operating capital
1.15-1.65 Operating capital
2 Dongguan Walsin
Walsin (China)
Other receivables
Yes
Wire & Cable Co.,
Ltd.
Investment Co., Ltd.
2,851,804
(RMB 650,000 )
2,822,047
(RMB 650,000 )
2,396,200
(RMB 551,915 )
2.70
Operating capital
3 Walsin International
Investments
Limited
Walsin (China)
Other receivables
Yes
15,794,322
15,466,754
Investment Co., Ltd.
Walsin Lihwa
Corporation
PT. Walsin Nickel
Industrial Indonesia
(US$ 382,000 )
(RMB1,127,000)
(US$ 382,000 )
(RMB1,127,000)
Other receivables
Yes
9,844,575
9,549,600
Other receivables
Yes
6,920,000
6,920,000
(US$ 345,000 )
(US$ 345,000 )
(US$ 250,000 )
(US$ 250,000 )
11,040,170
(US$ 242,000 )
(RMB1,000,000)
-
- )
6,920,000
(US$ 250,000 )
(US$
0.98-2.60 Operating capital
0.12-0.23 Operating capital
3.50
Operating capital
TABLE 1-1
2
5
6
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
o
n
Aggregate
Financing
Limit
(Note 1)
1,780,563
(US$ 64,325)
Business
Transaction
Amount
Reasons for
Short-term
Financing
Allowance
for
Impairment
Loss
Collateral
Item Value
Financing
Limit for Each
Borrower
(Note 1)
1,780,563
(US$ 64,325)
-
- Operating
capital
- Operating
capital
- Operating
capital
- Operating
capital
- Operating
capital
- Operating
capital
- Operating
capital
- Operating
capital
- Operating
capital
- Operating
capital
- Operating
capital
- Operating
capital
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 42,353,410
(US$1,530,109)
- 42,353,410
(US$1,530,109)
42,353,410
(US$1,530,109)
42,353,410
(US$1,530,109)
- 42,353,410
(US$1,530,109)
42,353,410
(US$1,530,109)
- 42,353,410
(US$1,530,109)
42,353,410
(US$1,530,109)
- 42,353,410
(US$1,530,109)
- 42,353,410
(US$1,530,109)
42,353,410
(US$1,530,109)
42,353,410
(US$1,530,109)
-
445,141
(US$ 16,081)
1,780,563
(US$ 64,325)
- 42,353,410
(US$1,530,109)
42,353,410
(US$1,530,109)
- 42,353,410
(US$1,530,109)
42,353,410
(US$1,530,109)
- 42,353,410
(US$1,530,109)
7,322,605
(US$ 264,537)
-
42,353,410
(US$1,530,109)
7,322,605
(US$ 264,537)
(Continued)
Notes:
1. According to the financing regulations provided by Walsin (China) Investment Co., Ltd., Dongguan Walsin Wire & Cable Co., Ltd. and Walsin International Investments Ltd., 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. = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
Shanghai Walsin Lihwa Power Wire & Cable Co., Ltd. = US$160,812×10%＝US$16,081 (445,141)
Walsin (China) Investment Co., Ltd. = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
Walsin Lihwa Corporation = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
Walsin (Nanjing) Construction Limited = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
Yantai Walsin Stainless Steel Co., Ltd. = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
Jiangyin Walsin Specialty Alloy Materials Co., Ltd. = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
Changshu Walsin Specialty Steel Co., Ltd. = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
Dongguan Walsin Wire & Cable Co., Ltd. = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
Walsin Lihwa Holdings Limited = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
Hangzhou Walsin Power Cable & Wire Co., Ltd. = US$160,812 × 40%＝US$64,325 (1,780,563)
PT. Walsin Nickel Industrial Indonesia= US$661,343 × 40%＝US$264,537 (7,322,605)
b. The limit on the amount of financing provided was as follows:
Walsin Lihwa Corporation = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
Walsin (China) Investment Co., Ltd. = US$160,812 × 40%＝US$64,325 ($1,780,563)
2. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars and Renminbi.
3. The currency exchange rates as of December 31, 2021 were as follows: US$ to NT$ = 1:27.68; RMB to NT$ = 1:4.34161; US$ to RMB = 1:6.3757.
(Concluded)
2
5
7
2
5
8
CONCORD INDUSTRIES LIMITED AND SUBSIDIARIES
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)
TABLE 1-2
2
5
8
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
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)
o
n
Other receivables
Yes
$
4,387,390
(RMB 1,000,000)
$
(RMB
-
-)
$
(RMB
-
-)
-
Operating capital
$
- Operating capital
$
-
-
$
-
Other receivables
Yes
(RMB
307,117
70,000)
303,913
(RMB 70,000)
164,469
(RMB 37,882)
2.70 Operating capital
- Operating capital
-
-
Other receivables
Yes
877,478
(RMB 200,000)
868,322
(RMB 200,000)
430,887
(RMB 99,246)
2.70 Operating capital
- Operating capital
-
-
-
-
$
42,353,410
(US$ 1,530,109)
$
42,353,410
(US$ 1,530,109)
42,353,410
(US$ 1,530,109)
42,353,410
(US$ 1,530,109)
42,353,410
(US$ 1,530,109)
42,353,410
(US$ 1,530,109)
4 Concord Industries
Limited
Walsin (China)
Investment
Co., Ltd.
5 Changshu Walsin
Specialty Steel
Co., Ltd.
Walsin (China)
Investment
Co., Ltd.
6 Jiangyin Walsin
Specialty Alloy
Materials Co.,
Ltd.
Walsin (China)
Investment
Co., Ltd.
Notes:
1. According to the financing regulations of 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. = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
b. The limit on the amount of financing provided was as follows:
The limit on the amount of financing provided = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
2. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars.
3. The currency exchange rates as of December 31, 2021 were as follows: US$ to NT$ = 1:27.68; RMB to NT$ = 1:4.34161; US$ to RMB = 1:6.3757.
TABLE 1-3
JIN-CHERNG CONSTRUCTION CO. AND SUBSIDIARIES
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2021
(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)
7 Joint Success
Enterprises
Limited
Walsin (Nanjing)
Construction
Co., Ltd.
8 Walsin (Nanjing)
Construction
Limited
Walsin (China)
Investment
Co., Ltd.
Notes:
Other receivables
Yes
$
(US$
755,607
26,480)
$
(US$
732,966
26,480)
$
(US$
732,966
26,480)
2.48
Operating capital
$
- Operating capital
$
Other receivables
Yes
2,193,695
(RMB 500,000)
(RMB
-
-)
RMB
-
-
-
Operating capital
- Operating capital
-
-
-
$
-
$
42,353,410
(US$ 1,530,109)
$
42,353,410
(US$ 1,530,109)
-
-
42,353,410
(US$ 1,530,109)
42,353,410
(US$ 1,530,109)
1. According to the financing regulation provided by Joint Success Enterprises Limited and Walsin (Nanjing) Development Co., Ltd., 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. = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
Walsin (China) Investment Co., Ltd. = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
b. The limit on the amount of financing provided was as follows:
The limit on the amount of financing provided = $105,883,524 × 40% ＝ $42,353,410 (US$1,530,109)
2. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars and Renminbi.
3. The currency exchange rates as of December 31, 2021 were as follows: US$ to NT$ = 1:27.68; RMB to NT$ = 1:4.34161; US$ to RMB = 1:6.3757.
2
5
9
2
6
0
WALSIN INFO-ELECTRIC CORP. AND SUBSIDIARIES
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars)
TABLE 1-4
2
6
0
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
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)
o
n
9 Walsin Info-Electric
Walsin Lihwa
Other receivables
Yes
$ 130,000
$ 130,000
$ 130,000
0.70
Operating capital
$
- Operating capital
$
-
-
$
-
$
134,809
$
134,809
Corp.
Corporation
Notes:
1. According to the financing regulation provided by Walsin Info-electric Corp. Corporation, 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 = $337,022 × 40% ＝ $134,809
b. The limit on the amount of financing provided was as follows:
The limit on the amount of financing provided = $337,022 × 40% ＝ $134,809
TABLE 2
WALSIN LIHWA HOLDINGS LIMITED AND SUBSIDIARIES
ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars and U.S. Dollars)
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
0 Walsin Lihwa
Corporation
PT. Walsin Nickel
b
Industrial
Indonesia
$
(US$
12,196,998
440,643)
$
(US$
2,491,200
90,000)
$
(US$
2,491,200
90,000)
$ 1,107,200
(US$ 40,000 )
$
-
-
$ 105,883,524
Yes
No
No
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 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$105,883,524 × 100% ＝ $105,883,524
b. The limit on the amount of endorsements/guarantees provided to a single entity was as follows:
PT. Walsin Nickel Industrial Indonesia.: US$191,584 × 250% × 92% ＝ US$440,643
4. The currency exchange rates as of December 31, 2021 were as follows: US$ to NT$ = 1:27.68.
2
6
1
2
6
2
WALSIN LIHWA HOLDINGS LIMITED AND SUBSIDIARIES
ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)
TABLE 2-1
2
6
2
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
Endorsee/Guarantee
No.
(Note 1)
Endorser/Guaranto
r
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
Walsin (China)
c
Wire & Cable Co.,
Ltd.
Investment Co.,
Ltd.
$
(US$
11,128,190
402,030)
$
1,362,361
(RMB 310,579)
$
(RMB
-
-)
$
US$
-
-
$
-
-
$ 105,883,524
No
No
Yes
o
n
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 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$105,883,524 × 100% ＝ $105,883,524
b. The limit on the amount of endorsements/guarantees provided to a single entity was as follows:
Walsin (China) Investment Co., Ltd.: US$160,812 × 250% × 100% ＝ US$402,030
4. The currency exchange rates as of December 31, 2021 were as follows: US$ to NT$ = 1:27.68; RMB to NT$ = 1:4.34161.
TABLE 2-2
CONCORD INDUSTRIES LIMITED AND SUBSIDIARIES
ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2021
(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
2
Jiangyin Walsin
Specialty Alloy
Materials Co., Ltd.
Walsin (China)
Investment
Co., Ltd.
d
$
(US$
11,128,190
402,030)
$
1,362,631
(RMB 310,579)
$
(RMB
-
-)
$
US$
-
-
$
-
-
$ 105,883,524
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$105,883,524 × 100% ＝ NT$105,883,524
b. The limit on the amount of endorsements/guarantees provided to a single entity was as follows:
Walsin (China) Investment Co., Ltd.: US$160,812 × 250% × 100% ＝ US$402,030
4. The currency exchange rates as of December 31, 2021 were as follows: US$ to NT$ = 1:27.68; RMB to NT$ = 1:4.34161.
2
6
3
2
6
4
WALSIN LIHWA CORPORATION
MARKETABLE SECURITIES HELD
DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars)
TABLE 3
2
6
4
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, 2021
Walsin Lihwa
Corporation
Share
HannStar Display Corp.
HannStar Board Corp.
TECO Electric & Machinery Co., Ltd.
The holding company is a director of the
issuer company
The chairman of the holding company
and the chairman of the company are
second-class relatives
-
Kuong Tai Metal Industrial Co., Ltd.
The holding company is a director of the
Taiwan Submarine Cable Co., Ltd.
(formerly known as One-Seven
Trading Co., Ltd.)
Global Investment Holdings
WK Technology Fund
Universal Venture Capital Investment
issuer company
The holding company is a director of the
issuer company
The holding company is a director of the
issuer company
-
-
Hwa Bao Botanic Conservation Corp. The holding company is a supervisor of
Tung Mung Development Co., Ltd.
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
Financial assets at fair value through other
comprehensive income - non-current
299,632,180
$ 5,423,342
9.90
$ 5,423,342
63,753,952
2,894,429
12.06
2,894,429
230,438,730
7,293,386
10.77
7,293,386
9,631,802
276,509
30,000
149
5,221,228
60,283
19,024
187
1,400,000
12,650
9.39
6.67
2.97
1.91
1.16
3,000,000
28,596
15.00
276,509
149
60,283
187
12,650
28,596
14,285,000
149,993
4.01
149,993
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
o
n
TABLE 3-1
CONCORD INDUSTRIES CONSTRUCTION CO. AND SUBSIDIARIES
MARKETABLE SECURITIES HELD
DECEMBER 31, 2021
(In Thousands of Renminbi)
Holding Company Name
Type and Name of Issuer of
Marketable Securities
Relationship with the
Holding Company
Financial Statement Account
December 31, 2021
Number of
Shares/Units
Carrying
Amount
Percentage of
Ownership (%)
Fair Value
Note
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
N/A
$
-
19.00
$
-
through other comprehensive
income - non-current
Financial assets at fair value
N/A
17,240
6.02
17,240
through other comprehensive
income - non-current
2
6
5
2
6
6
JIN-CHERNG CONSTRUCTION CO. AND SUBSIDIARIES
MARKETABLE SECURITIES HELD
DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars)
TABLE 3-2
2
6
6
Holding Company Name
Type and Name of Issuer of
Marketable Securities
Relationship with the
Holding Company
Financial Statement Account
December 31, 2021
Number of
Shares/Units
Carrying
Amount
Percentage of
Ownership (%)
Fair Value
Note
Jin-Cherng Construction Co. Share
Gsharp Corporation
-
Financial assets at fair value through other
comprehensive income - non-current
270,000
$
-
2.73
$
-
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
o
n
TABLE 3-3
WALSIN INFO-ELECTRIC CORP. AND SUBSIDIARIES
MARKETABLE SECURITIES HELD
DECEMBER 31, 2021
(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, 2021
Walsin Info-Electric Corp. Share
W T International Inc.
Ufi Space Co., Ltd.
Global PMX Co., Ltd.
Landing AI
-
-
-
-
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
228,000
$ 2,568
297,069
29,822
88,000
15,928
265,583
27,894
5.43
1.07
0.08
0.54
$ 2,568
29,822
15,928
27,894
2
6
7
2
6
8
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, 2021
(In Thousands of New Taiwan Dollars)
TABLE 4
2
6
8
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
Company
Name
Type and Name of
Marketable
Securities
Financial Statement
Account
Purpose of
Transaction
Beginning Balance
Acquisition
Disposal
Ending Balance
Relationship
Number of
Shares
Amount
Number of
Shares
Amount
Number of
Shares
Amount
Carrying
Amount
Gain (Loss) on
Disposal
Number of
Shares
Amount
o
n
Walsin Lihwa Share
Corporation Concord Industries
Limited
Investments accounted for
using the equity method
Walsin Precision
Technology Corp.
New Hono Investment
Pte. Ltd
Investments accounted for
using the equity method
Investments accounted for
using the equity method
Capital
Subsidiaries
investment/capital
reduction
Concord Industries
Subsidiaries
Limited
Capital investment
Subsidiaries
285,903,187 $ 4,631,181 47,000,000 $ 1,156,955
(Note 1)
15,398,007 $ 434,994
$434,994
$
-
-
- 32,178,385
- 42,000,000
447,963
(Note 2)
5,828,396
(Note 2)
7,267,008
(Note 3)
-
-
-
-
-
-
-
-
-
-
-
-
-
317,505,180 $ 5,353,142
32,178,385
447,963
42,000,000
5,828,396
230,438,730
7,293,386
TECO Electric &
Financial assets at fair
Capital investment
-
954,000
26,378 229,484,730
Machinery Corp.
value through profit or
loss
Note 1: The amount included subscription for shares, investment income or loss and changes in other equity.
Note 2: The amount included the purchase amount, investment income or loss and changes in other equity.
Note 3: The amount included issuance of new shares in exchange for the shares of another company and adjustments through fair value.
TABLE 4-1
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, 2021
(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
Holdings Limited Walsin International
Share
Investments Limited
Investments
Capital
Subsidiary
4,303,960,202 $
3,874,450
349,411,500 $
accounted for
using the equity
method
investment
342,076
(Note)
-
$
- $
-
$
- 4,653,371,702
$ 4,216,526
Walsin (China)
Investment Co.,
Ltd.
Certificate of capital
verification
Fubon Bank (China) RMB
structured deposits
Financial assets at
amortized cost
Fubon Bank
-
N/A
300,000
N/A
1,500,000
N/A
1,805,457 1,800,000
5,457
N/A
-
Note: The amount included subscription for shares and investment income or loss.
2
6
9
2
7
0
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, 2021
(In Thousands of Renminbi)
TABLE 4-2
2
7
0
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
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
Concord Industries Share
Limited
Walsin Precision
Technology Corp.
Investments accounted for
using the equity method
Walsin Lihwa
Corporation
Subsidiaries
32,178,385
$
168,042
-
$
-
32,178,385
$
99,848
$
123,750
(Note 1)
$
(23,902)
(Note 2)
-
$
-
o
n
Note 1: The amount included investment income or loss, distribution of dividends from the capital surplus and cumulative translation adjustments.
Note 2: Loss on disposal is unrealized in the consolidated report.
WALSIN LIHWA CORPORATION
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, 2021
(In Thousands of New Taiwan Dollars)
Company Name
Types of
Property
Transaction Date
Transaction
Amount (Foreign
Currencies in
Thousands)
Payment Term
Counterparty
Nature of
Relationships
Owner
Relationships
Transfer Date Amount
Price Reference
Purpose of
Acquisition
Other
Terms
Prior Transaction of Related Counterparty
Walsin Lihwa Corporation Plant
2021/08/19-
2021/12/23
$
521,333 Based on the terms
Chung-Lu Construction
-
N/A
N/A
N/A
N/A
Based on the
Manufacturing and
-
in the contract
Co., Ltd.
marketability
operating
purpose
TABLE 5
2
7
1
2
7
2
CONCORD INDUSTRIES LIMITED AND SUBSIDIARIES
ACQUISITION OF INDIVIDUAL REAL ESTATE AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2021
(In Thousands of Renminbi)
TABLE 5-1
2
7
2
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
Company Name
Types of
Property
Transaction Date
Transaction
Amount (Foreign
Currencies in
Thousands)
Payment Term
Counterparty
Nature of
Relationships
Owner
Relationships
Transfer Date
Amount
Price Reference
Purpose of
Acquisition
Other
Terms
Prior Transaction of Related Counterparty
Yantai Walsin Stainless
Plant
Steel Co., Ltd.
2021/07/12-
2021/09/14
$
89,064 Based on the terms
in the contract
China Construction Eighth
Engineering Division.
Co., Ltd.
-
N/A
N/A
N/A
N/A
Based on the
Manufacturing and
-
marketability
operating
purpose
o
n
TABLE 6
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, 2021
(In Thousands of New Taiwan Dollars)
Company
Name
Walsin Lihwa
Corporation
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
100% indirectly owned
Sales
$ (2,273,189)
(2) The payment terms are set by
Normal
Normal
$
81,510
2
Co., Ltd.
subsidiary
Jiangyin Walsin Specialty Alloy
100% indirectly owned
Sales
(668,583)
Materials Co., Ltd.
subsidiary
Koung Tai Metal Industrial Co.,
Director of the related
Sales
(1,743,620)
Ltd.
party
Changshu Walsin Specialty Steel
100% indirectly owned
Sales
(595,996)
Co., Ltd.
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.
(2) 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.
Normal
Normal
245,996
5
Normal
Normal
17,229
-
Similar
Similar
281,518
5
2
7
3
2
7
4
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, 2021
(In Thousands of New Taiwan Dollars and Renminbi)
TABLE 6-1
2
7
4
Company Name
Related Party
Nature of Relationship
Transaction Details
Abnormal Transaction
Notes/Accounts Payable
or Receivable
Purchase/
Sale
Amount
% of
Total
Payment
Terms
Unit Price
Payment
Terms
Ending
Balance
% of
Total
Note
Dongguan Walsin Wire
& Cable Co., Ltd.
Shanghai Walsin Lihwa
Power Wire & Cable
Co., Ltd.
Walsin Lihwa Corporation
Parent company
Purchases $ 2,273,189
12
Normal
Normal
Normal
$
(81,510)
(27)
Shanghai Walsin Lihwa Power
Wire & Cable Co., Ltd.
Both subsidiaries of Walsin
Sales
RMB (49,712)
(1)
Normal
Normal
Normal
RMB 14,014
10
Lihwa Corporation
Dongguan Walsin Wire & Cable
Both subsidiaries of Walsin
Purchases
RMB 49,712
6
Normal
Normal
Normal
RMB (14,014)
(7)
Co., Ltd.
Lihwa Corporation
i
F
n
a
n
c
a
i
l
I
f
n
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, 2021
(In Thousands of New Taiwan Dollars and Renminbi)
Company Name
Related Party
Nature of Relationship
Transaction Details
Abnormal Transaction
Notes/Accounts Payable
or Receivable
Purchase/
Sale
Amount
% of
Total
Payment Terms
Unit Price
Payment Terms Ending Balance
% of
Total
Note
Yantai Walsin
Changshu Walsin
Both subsidiaries of
Sales
RMB (242,772)
Stainless Steel Co.,
Ltd.
Specialty Steel Co.,
Ltd.
Concord Industries
Limited
Jiangyin Walsin Specialty
Alloy Materials Co.,
Ltd.
Both subsidiaries of
Sales
RMB (233,251)
Concord Industries
Limited
(11) The payment terms are set by quotations
on the local market, and the
transaction terms are similar to those
of general customers.
(11) The payment terms are set by quotations
on the local market, and the
transaction terms are similar to those
of general customers.
Normal
Normal
RMB
27,331
6
Normal
Normal
RMB
6,386
1
Changshu Walsin
Both subsidiaries of
Purchases
RMB
32,926
2
The payment terms are set by quotations
Normal
Normal
RMB
(5,739)
(2)
Specialty Steel Co.,
Ltd.
Concord Industries
Limited
on the local market, and the
transaction terms are similar to those
of general customers.
Both subsidiaries of
Purchases
RMB
40,500
2
The payment terms are set by quotations
Normal
Normal
RMB
(1,213)
-
Jiangyin Walsin Specialty
Alloy Materials Co.,
Ltd.
Concord Industries
Limited
on the local market, and the
transaction terms are similar to those
of general customers.
(10) The payment terms are set by quotations
on the local market, and the
transaction terms are similar to those
of general customers.
Normal
Normal
RMB
1,213
1
Jiangyin Walsin
Yantai Walsin Stainless
Both subsidiaries of
Sales
RMB
(40,500)
Specialty Alloy
Materials Co., Ltd.
Steel Co., Ltd.
Concord Industries
Limited
Walsin Lihwa Corporation Parent company
Purchases
668,583
37
The payment terms are set by quotations
Normal
Normal
(245,996)
(76)
on the local market, and the
transaction terms are similar to those
of general customers.
Yantai Walsin Stainless
Both subsidiaries of
Purchases
RMB 233,251
57
The payment terms are set by quotations
Normal
Normal
RMB
(6,386)
(9)
Steel Co., Ltd.
Concord Industries
Limited
Changshu Walsin
Yantai Walsin Stainless
Both subsidiaries of
Sales
RMB
(32,926)
Specialty Steel Co.,
Ltd.
Steel Co., Ltd.
Concord Industries
Limited
on the local market, and the
transaction terms are similar to those
of general customers.
(5) The payment terms are set by quotations
on the local market, and the
transaction terms are similar to those
of general customers.
Normal
Normal
RMB
5,739
4
Walsin Lihwa Corporation Parent company
Purchases
595,996
25
The payment terms are set by quotations
Normal
Normal
(281,518)
(32)
Yantai Walsin Stainless
Both subsidiaries of
Purchases
RMB 242,772
44
The payment terms are set by quotations
Normal
Normal
RMB
(27,331)
(14)
Steel Co., Ltd.
Concord Industries
Limited
on the local market, and the
transaction terms are similar to those
of general customers.
on the local market, and the
transaction terms are similar to those
of general customers.
2
7
5
2
7
6
WALSIN LIHWA CORPORATION
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars)
TABLE 7
2
7
6
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
Jiangyin Walsin Specialty Alloy
100% indirectly owned subsidiary Trade receivables
$ 245,996
3.87
$
Materials Co., Ltd.
Changshu Walsin Specialty Steel Co.,
100% indirectly owned subsidiary Trade receivables
281,518
Ltd.
4.12
-
-
-
-
$
99,789
$
194,308
-
-
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
o
n
WALSIN LIHWA HOLDINGS LIMITED AND SUBSIDIARIES
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
DECEMBER 31, 2021
(In Thousands of Renminbi and U.S. Dollars)
Company Name
Related Party
Nature of Relationship
Financial Statement Account and
Ending Balance
Turnover
Rate
Overdue
Amount
Action
Taken
Amounts
Received in
Subsequent
Period
Allowance
for
Bad Debts
TABLE 7-1
Walsin Lihwa Holdings Limited
Walsin (China) Investment Co., Ltd.
100% owned subsidiary
Other receivables RMB 261,794
Walsin (China) Investment Co., Ltd. Walsin Lihwa Holdings Limited
Yantai Walsin Stainless Steel Co., Ltd.
Parent company
Both subsidiaries of Walsin
Lihwa Corporation
Changshu Walsin Specialty Steel Co., Ltd.
Both subsidiaries of Walsin
Lihwa Corporation
Other receivables US$
Other receivables US$
Other receivables US$
4,900
60,175
RMB 363,643
55,825
Jiangyin Walsin Specialty Alloy Materials
18.37% owned subsidiary Other receivables US$
44,636
Co., Ltd.
Jiangyin Walsin Steel Cable Co., Ltd.
100% owned subsidiary
Shanghai Walsin Lihwa Power Wire & Cable
95.71% directly owned
Co., Ltd.
subsidiary
Other receivables US$
Other receivables US$
8,717
RMB 214,155
8,955
Walsin (Nanjing) Development Co., Ltd.
Both subsidiaries of Walsin
Other receivables RMB 698,586
Hangzhou Walsin Power Cable & Wire Co.,
Associate
Other receivables RMB
81,228
Lihwa Corporation
Ltd.
XiAn Walsin Metal Product Co., Ltd.
Both subsidiaries of Walsin
Other receivables RMB 176,213
Lihwa Corporation
Nanjing Taiwan Trade Mart Management Co.,
Both subsidiaries of Walsin
Other receivables RMB
37,250
Ltd.
Dongguan Walsin Wire & Cable Co., Ltd.
Lihwa Corporation
100% owned subsidiary
Other receivables US$
68,544
Walsin International Investments
PT. Walsin Nickel Industrial Indonesia
Both subsidiaries of Walsin
Other receivables RMB 1,596,871
Limited
Lihwa Corporation
Walsin (China) Investment Co., Ltd.
Both subsidiaries of Walsin
Other receivables RMB 2,558,656
Lihwa Corporation
Dongguan Walsin Wire & Cable Co.,
Walsin (China) Investment Co., Ltd.
Parent company
Other receivables RMB 553,394
Ltd.
Shanghai Walsin Lihwa Power Wire
Walsin (China) Investment Co., Ltd.
Parent company
Other receivables RMB
83,540
& Cable Co., Ltd.
Note: Amounts are stated in thousands of Renminbi, except those stated in thousands of U.S. dollars.
2
7
7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2
7
8
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, 2021
(In Thousands of Renminbi)
TABLE 7-2
2
7
8
Company Name
Related Party
Nature of Relationship
Financial Statement Account and
Ending Balance
Turnover
Rate
Amount
Action Taken
Overdue
Amounts
Received in
Subsequent
Period
Allowance for
Bad Debts
Yantai Walsin Stainless
Changshu Walsin Specialty Steel
Both are subsidiaries of Concord
Trade receivables
$
27,331
8.07
$
Steel Co., Ltd.
Co., Ltd.
Industries Limited
Changshu Walsin
Walsin (China) Investment Co.,
Both are subsidiaries of Walsin
Other receivables
37,911
Specialty Steel Co.,
Ltd.
Ltd.
Lihwa Corporation
Jiangyin Walsin
Walsin (China) Investment Co.,
Both are subsidiaries of Walsin
Other receivables
99,473
Specialty Alloy
Materials Co., Ltd.
Ltd.
Lihwa Corporation
-
-
-
-
-
-
-
-
$
-
$
-
-
-
-
-
i
F
n
a
n
c
a
i
l
I
f
n
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, 2021
(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
Subsidiary
Other receivables
$ 177,412
-
$
-
-
$
-
$
-
Limited
Co., Ltd.
TABLE 7-3
2
7
9
2
8
0
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, 2021
TABLE 8
2
8
0
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
1.
Information of investees that Walsin Lihwa Corporation has controlling power or significant influence over was as follows (in thousands of New Taiwan dollars):
o
n
Investor
Company
Walsin Lihwa
Corporation
Investee Company
Location
Main Businesses and
Products
Original Investment Amount
December 31,
2021
December 31,
2020
Balance as of December 31, 2021
Percentage
of
Ownership
(%)
Carrying
Amount
Number of
Shares
Net Income
(Loss) of the
Investee
Investment
Gain (Loss)
Note
Walsin Lihwa Holdings
Vistra Corporate Services Centre Wickhams Cay II,
Investments
$ 14,495,777 $ 14,760,298
473,730,393
100.00
$ 26,803,960
$ 1,081,312
$ 1,081,391
Limited
Road Town, Tortola, VG1110 British Virgin Islands
Concord Industries Limited Vistra Corporate Services Centre Wickhams Cay II,
Investments
13,611,135 12,724,589
317,505,180
100.00
5,353,142
(162,677)
(58,882)
Road Town, Tortola, VG1110 British Virgin Islands
Ace Result Global Limited
Vistra Corporate Services Centre Wickhams Cay II,
Investments
1,587,416
1,587,416
44,739,988
100.00
383,632
46,062
46,062
Min Maw Precision Industry
25F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Solar power systems
180,368
180,368
29,995,859
100.00
365,703
31,059
31,059
Road Town, Tortola, VG1110 British Virgin Islands
Corp.
Taiwan, R.O.C.
Waltuo Green Resources
No. 47, Bade Rd., Yanshui District, Tainan City
Corporation
73743, Taiwan, R.O.C.
Walsin Precision Technology
2115-1,Kawasan Perindustrian air Keroh, Fasa IV, Air
Corp.
Keroh, 75450 Melaka, Malaysia
management, design, and
installation
Waste disposal, resource
recovery and cement
products
Production and sale of
stainless steel plates
New Hono Investment Pte.
2 Battery Road, #27-01, Maybank Tower, Singapore
Investments
Ltd
049907
10,000
10,000
1,000,000
100.00
19,203
10,366
10,366
434,994
5,003,810
-
-
32,178,385
100.00
447,963
47,066
30,256 (Note 1)
42,000,000
100.00
5,828,396
953,732
849,748
Jin-Cherng Construction Co. 5th Floor, 192 Jingye 1st Road, Jhongshan District,
Construction
611,688
611,688
577,583,403
99.22
6,348,728
(108,838)
(108,129)
Taipei 104, Taiwan, R.O.C.
Walsin Info-Electric Corp.
25F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Mechanical and electrical,
270,034
270,034
29,854,246
99.51
335,371
(4,767)
(4,744)
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,
communications, and power
systems
Steel wires
481,663
481,663
10,500
70.00
818,205
90,143
63,100
Production and sale of cables
11,656
11,656
1,050,000
70.00
12,690
5,705
3,994
Cikarang Selatan, Bekasi, Jawa Barat
and wires
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
Production and sale of nickel
1,509,171
1,509,171
500,000
50.00
2,381,125
2,598,802
1,128,008
pig iron
Joint Success Enterprises
Vistra Corporate Services Centre Wickhams Cay II,
Investments
1,164,273
1,164,273
36,058,184
49.05
5,175,692
(237,201)
(115,394)
Limited
Road Town, Tortola, VG1110 British Virgin Islands
Chin-Xin Investment Co., Ltd. 26F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Taiwan, R.O.C.
Investments
2,237,969
2,237,969
179,468,270
37.00
8,011,194
528,594
195,580
Walsin Color Co., Ltd.
24F., No. 1, Songzhi Rd., Xinyi Dist., Taipei City,
Management of investments
457,610
457,610
49,831,505
33.97
1,053,790
(17,475)
(5,936)
Taiwan, R.O.C.
and conglomerates
Concord II Venture Capital
4F., No. 76, Sec. 2, Dunhua S. Rd., Da’an Dist.,
Venture capital and consulting
257,860
257,860
26,670,699
26.67
174,332
(16,822)
(4,486)
Co., Ltd.
Taipei City 106,, R.O.C.
Winbond Electronics Corp. 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
18,357,864 13,594,643
2,984,304
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
21.01
2,322,664
219,897
46,403
semiconductors
(Continued)
Investor
Company
Investee Company
Location
Main Businesses and
Products
December 31, 2021 December 31, 2020
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, 2021
Walsin Technology Corp.
24F., No. 1, Songzhi Rd., Xinyi Dist., Taipei
Powertec Electrochemical
13 F, No. 337, Fuxing N. Rd., Songshan
Corp.’s
Dist., Taipei City 105, Taiwan, R.O.C.
City, 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
$
8,166,415
$
7,931,941
$
1,450,358
2,945,925
2,945,925
318,522,792
22.46
-
-
-
Walsin Lihwa
Holding
Limited
Walsin International
Investments Limited
Unit 9-15, 22/F, Millennium City, 378 Kwun
Tong Road, Kwun Tong, Kowloon, Hong
Kong
Investments
HK$ 4,653,372
HK$ 4,303,960
4,653,371,702
100.00
18,306,511
222,439
222,439
Walcom Chemicals Industrial
Unit 714,7/F, Miramat Tower, 1-23
Commerce
US$
0.030
US$
0.030
325,000
65.00
0.829
-
-
Limited
Kimberley Road, Tsimshatsui, Kowloon,
Hong Kong
Borrego Solar Systems, Inc.
6210 Lake Shore Drive, San Diego,
CA92119, USA
Grid-connected solar
electric systems
US$
15,000
US$
15,000
1,460,458
73.49
3,420,689
875,401
639,533
Concord
Industries
Limited
Walsin Specialty Steel Corp. Vistra Corporate Services Centre Wickhams
Cay II, Road Town, Tortola, VG1110, BVI
Commerce and
investments
US$
101,400
(Note 2)
US$
101,400
(Note 2)
101,400,000
100.00
1,016,241
51,770
51,770
Walsin Precision Technology
2115-1, Kawasan Perindustrian air Keroh,
Sdn. Bhd.
Fasaiv, Air Keroh, 75450 Melaka,
Malaysia
Production and sale of
stainless steel plates
US$
-
US$
8,470
-
-
-
47,066
16,810
(Note
3)
Jin-Cherng
Joint Success Enterprises
Construction
Co.
Limited
Vistra Corporate Services Centre Wickhams
Cay II, Road Town, Tortola, VG1110, BVI
Investments
Dinghsin Development Co.,
Ltd.
5th Floor, 192 Jingye 1st Road, Jhongshan
District, Taipei 104, Taiwan, R.O.C.
Investment of real
estate and related
business
1,202,993
1,202,993
37,461,816
50.95
5,273,922
(237,201)
(120,854)
8,540
8,540
2,119,200
35.32
39,427
5,282
1,866
Concord II Venture Capital
Co., Ltd.
4F., No. 76, Sec. 2, Dunhua S. Rd., Da’an
Dist., Taipei City 106, Taiwan (R.O.C.)
Venture capital and
consulting affairs
Chin-Xin Investment Co., Ltd. 26F., No. 1, Songzhi Rd., Xinyi Dist., Taipei
Investments
1,603
54,154
1,603
172,342
0.17
1,127
(16,822)
54,154
3,264,092
0.67
146,794
528,594
(72)
3,546
City, Taiwan, R.O.C.
New Hono
PT. Walsin Nickel Industrial
Investment Pte.
Ltd.
Indonesia
Gedung Wisma Mulia LT. 41 JL Jend Gatot
Subroto NO. 42 Kuningan Barat Mmpang
Prapatan Kota ADM. Jakarta Selatan Dki
Jakarta
Production and sale of
US$
42,000
US$
-
42,000
42.00
2,227,285
2,598,802
953,791
nickel pig iron
Note 1: Due to adjustments in the investment structure of the Group, it was transferred from Concord Industries Limited to Walsin Lihwa Corporation.
Note 2: The amount included capitalization of retained earnings of US$4,500 thousand.
Note 3: Due to adjustments in the investment structure of the Group, it was transferred from Concord Industries Limited to Walsin Lihwa Corporation.
Note 4: Amounts are stated in thousands of Renminbi, except those stated in thousands of U.S. dollars and Hong Kong dollars.
(Continued)
2
8
1
2
8
2
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
INFORMATION ON INVESTMENTS IN MAINLAND CHINA
FOR THE YEAR ENDED DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)
A. Walsin Lihwa Corporation
TABLE 9
2
8
2
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:
i
F
n
a
n
c
a
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l
I
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n
o
r
m
a
t
i
o
n
Investee Company
Main Businesses and
Products
Total Amount of
Paid-in Capital
Jiangyin Walsin Steel
Cable Co., Ltd.
Manufacture and sale of steel
cables and wires
$
(US$
553,600
20,000)
Shanghai Walsin Lihwa
Power Wire & Cable
Co., Ltd.
Manufacture and sale of cables
and wires
(US$
432,555
15,627)
Hangzhou Walsin Power
Cable & Wire Co., Ltd.
Manufacture and sale of cables
and wires
(US$
4,929,254
178,080)
Walsin (China)
Investments
Investment Co., Ltd.
(US$
2,175,648
78,600)
Changshu Walsin
Specialty Steel Co.,
Ltd.
Shanghai Baihe Walsin
Lihwa Specialty Steel
Co., Ltd.
Manufacture and sale of
specialized steel tubes
(US$
2,684,960
97,000)
Manufacture and sale of
stainless steel
(US$
Dongguan Walsin Wire &
Cable Co., Ltd.
Manufacture and sale of bare
copper cables and wires
(US$
470,560
17,000)
(Note 7)
719,680
26,000)
Jiangyin Walsin Specialty
Alloy Materials Co.,
Ltd.
Manufacture and sale of
cold-rolled stainless steel and
flat rolled products
(US$
1,356,320
49,000)
XiAn Walsin Metal
Product Co., Ltd. (Note
13)
Manufacture and sale of
specialized stainless steel
plates
(US$
1,532,088
55,350)
Yantai Walsin Stainless
Production and sale of
Steel Co., Ltd.
electronic components and
new alloy materials
(US$
9,274,599
335,065)
(Note 11)
Investment
Type
(Note 1)
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2021
Investment Flows
Outflow
Inflow
Accumulated
Outflow of
Investment from
Taiwan as of
December 31, 2021
Net Income
(Loss) of the
Investee
Percentage
of
Ownership
in
Investment
(%)
Investment Gain
(Loss)
(Note 16)
Carrying Amount
as of
December 31, 2021
Accumulated
Inward Remittance
of Earnings as of
December 31, 2021
b
b
b
b
b
b
b
b
b
b
$
$
(US$
(US$
(US$
(US$
(US$
(US$
(US$
(US$
720,815
26,041)
(Note 2)
413,982
14,956)
(Note 3)
2,335,638
84,380)
(Note 4)
2,175,648
78,600)
(Note 5)
2,684,960
97,000)
(Note 6)
1,079,520
39,000)
(Note 8)
719,680
26,000)
(Note 9)
1,356,320
49,000)
(Note 10)
(US$
834,552
30,150)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(US$
3,679,419
132,927)
2,214,400
(US$ 80,000)
$
-
-
$
(US$
720,815
26,041)
(Note 2)
413,982
14,956)
(Note 3)
2,335,638
84,380)
(Note 4)
2,175,648
78,600)
(Note 5)
2,684,960
97,000)
(Note 6)
1,079,520
39,000)
(Note 8)
719,680
26,000)
(Note 9)
1,356,320
49,000)
(Note 10)
(US$
(US$
(US$
(US$
(US$
(US$
(US$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(US$
834,552
30,150)
(US$
5,893,819
212,927)
$ 84,065 100.00
$
84,065
$
871,873
$
124,098
95.71
118,774
1,153,271
188,273
40.00
73,296
622,240
217,722 100.00
217,722
4,451,409
39,607 100.00
39,607
700,497
13,217 100.00
13,217
233,101
7,337 100.00
7,337
1,651,531
(1,462 ) 100.00
(1,462)
1,981,997
(14,119 ) 100.00
(14,119)
(766,837)
(260,618 ) 100.00
(260,618)
4,705,064
-
-
-
-
-
-
-
-
-
-
(Continued)
Investee Company
Main Businesses and
Products
Total Amount of
Paid-in Capital
Changzhou China Steel
Melting and forging of
Precision Materials Co.,
Ltd.
nonferrous metallic materials
and composites as well as
new types of alloys
$
(US$
1,206,848
43,600)
Nanjing Taiwan Trade Mart
Management Co., Ltd.
Business and asset
management, consulting and
advertising services
(US$
27,680
1,000)
Shaanxi Tianhong Silicon
Industrial Corporation
Polysilicon production
5,209,932
(RMB 1,200,000)
Jiangsu Taiwan Trade Mart
Development Co., Ltd.
Development and management
of Nanjing Taiwan Trade
Mart Management Co., Ltd.
(RMB
43,416
10,000)
Shaanxi Electronic Group
Optoelectronics
Technology Co., Ltd.
(Note 14)
Communications equipment
and electronic components
675,541
(RMB 155,597)
Walsin (Nanjing)
Construction, rental and sale of
Development Co., Ltd.
buildings and industrial
factories
(US$
1,384,000
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
4,342
1,000)
6,512
1,500)
2. The upper limit on investment of WLC in mainland China was as follows:
Investment
Type
(Note 1)
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2021
Investment Flows
Outflow
Inflow
Accumulated
Outflow of
Investment from
Taiwan as of
December 31, 2021
Net Income
(Loss) of the
Investee
Percentage
of
Ownership
in
Investment
(%)
Investment
Gain (Loss)
(Note 16)
Carrying
Amount
as of
December 31,
2021
Accumulated
Inward
Remittance of
Earnings as of
December 31, 2021
b
b
b
b
b
b
b
b
$
(US$
362,054
13,080)
$
(US$
27,680
1,000)
(US$
(US$
(RMB
-
-)
8,415
304)
-
-)
(US$
1,378,464
49,800)
(Note 15)
(RMB
(RMB
-
-)
-
-)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
-
-
$
(US$
362,054
13,080)
$ 210,875
30.00
$
63,264 $
441,125
$
844,794
(US$ 30,520 )
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(US$
27,680
1,000)
(US$
(US$
(RMB
-
-)
8,415
304)
-
-)
(US$
1,378,464
49,800)
(Note 15)
(RMB
(RMB
-
-)
-
-)
15,963
100.00
15,963
(414,815 )
(1,132,244 )
19.00
-
-
(Note 12)
456
20.00
91
9,326
11,768
6.02
-
74,849
(234,792 )
99.60
(233,859 ) 9,607,206
(6,073 )
99.60
(6,049)
(5,206)
8,676
99.60
8,643
-
-
-
-
-
-
-
-
Accumulated Outward Remittance for
Investment in Mainland China as of
December 31, 2021
(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$
17,817,284
643,688)
$
(US$
17,646,969
637,535)
N/A (Note 19)
(Continued)
2
8
3
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4
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$15,000 thousand investment through Walsin (China) Investment Co., Ltd.
3. Including US$14,950 thousand investment through Walsin (China) Investment Co., Ltd.
2
8
4
4. Including US$13,300 thousand investment through Walsin (China) Investment Co., Ltd., US$53,000 thousand investment through Ace Result Global 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$20,000 thousand 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 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$32,927 thousand investment through Yantai Huanghai Iron and Steel Co., Ltd. and Yantai Dazhong Recycling Resource Co., Ltd. which were merged.
12. The amount was adjusted by the capital of XiAn Lv Jing Technology Co., Ltd. of RMB228,000 thousand and by the fair value.
13. XiAn Walsin Metal Product Co., Ltd. merged XiAn Lv Jing Technology Co., Ltd. and XiAn Walsin Opto-electronic Limited.
14. Shaanxi Electronic Group Optoelectronics Technology Co., Ltd. was formerly known as Shaanxi Optoelectronics Technology Co., Ltd.
15. The amount included investment through Joint Success Enterprise Limited approved in the previous years.
16. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars and Renminbi.
17. The currency exchange rates as of December 31, 2021 were as follows: US$ to NT$ = 1:27.68, RMB to NT$ = 1:4.34161. The average exchange rates of December 31, 2021 were as follows: US$ to NT$ = 1:27.976, RMB to NT$ = 1:4.33908.
18. Amount was recognized based on audited financial statements.
19. 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
Total Amount of
Paid-in Capital
Investment
Type
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2021
Investment Flows
Outflow
Inflow
Accumulated
Outflow of
Investment from
Taiwan as of
December 31, 2021
Net Income (Loss)
of the Investee
Percentage
of
Ownership
in
Investment
(%)
Investment Gain
(Loss)
(Note 2)
Carrying Amount
as of
December 31,
2021
Accumulated
Inward Remittance
of Earnings as of
December 31, 2021
US$ 50,000
Note 1
US$ 25,475
$
-
$
-
US$ 25,475
$
(54,111)
50.95
$
(27,570)
$ 1,131,931
$
1,000
Note 1
-
-
-
-
-
-
-
-
(1,400)
50.95
(713)
(613)
1,999
50.95
1,019
-
Walsin (Nanjing)
Development Co.,
Ltd.
Construction, rental and sale
of buildings and industrial
factories
Nanjing Walsin
Property
Management Co.,
Ltd.
Property management,
business management and
housing leasing
Walsin Nanjing
Organize culture and arts
1,500
Note 1
Culture and Arts
Co., Ltd.
communication activity,
cultural performance,
culture and arts forwarding
agency
2. The upper limit on investment in mainland China
Accumulated Outward Remittance for
Mainland China as of December 31, 2021
(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$3,839,173 (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 audited financial statements.
Note 3: The upper limit on investment in mainland China was as follows:
NT$6,398,621 thousand × 60% = NT$3,839,173 thousand.
Note 4: Amounts are stated in thousands of Renminbi, except those stated in thousands of U.S. dollars.
2
8
5
-
-
-
(Concluded)
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6
WALSIN LIHWA CORPORATION AND INVESTEES
INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars, US Dollars and Renminbi)
TABLE 10
2
8
6
No.
Investee Company
Counterparty
Relationship
Financial
Statement
Accounts
Transaction Details
Amount
Payment Terms
% of Total
Sales or
Assets
2021
0 Walsin Lihwa Corporation Dongguan Walsin Wire & Cable Co., Ltd.
Changshu Walsin Specialty Steel Co., Ltd.
Jianyin Walsin Specialty Alloy Materials
Co., Ltd.
Shanghai Walsin Lihwa Power Wire & Cable
Co., Ltd.
Dongguan Walsin Wire & Cable Co., Ltd.
Changshu Walsin Specialty Steel Co., Ltd.
Jianyin Walsin Specialty Alloy Materials
Co., Ltd.
Shanghai Walsin Lihwa Power Wire & Cable
Co., Ltd.
Yantai Walsin Specialty Steel Co., Ltd.
Dongguan Walsin Wire & Cable Co., Ltd.
Jianyin Walsin Specialty Alloy Materials
Co., Ltd.
1 Walsin Lihwa Holdings
Walsin (China) Investment Co., Ltd.
Limited
Walsin Lihwa Corporation
2
Joint Success Enterprise
Walsin (Nanjing) Development Co., Ltd.
Limited
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
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
Trade receivables
$
81,510 The terms are set by quotations on the local market
Trade receivables
281,518 The terms are set by quotations on the local market
and are similar to those of general customers
and are similar to those of general customers
Trade receivables
245,996 The terms are set by quotations on the local market
and are similar to those of general customers
Trade receivables
4,515 The terms are set by quotations on the local market
Sales
Sales
Sales
Sales
Sales
and are similar to those of general customers
2,773,189 The terms are set by quotations on the local market
and are similar to those of general customers
595,996 The terms are set by quotations on the local market
and are similar to those of general customers
668,583 The terms are set by quotations on the local market
and are similar to those of general customers
18,689 The terms are set by quotations on the local market
and are similar to those of general customers
7,723 The terms are set by quotations on the local market
and are similar to those of general customers
Other receivables
32,849 The terms are set by quotations on the local market
Other receivables
37,008 The terms are set by quotations on the local market
and are similar to those of general customers
and are similar to those of general customers
Other receivables
RMB 261,794 Based on capital demand
Trade receivables
RMB
10,259 The terms are set by quotations on the local market
and are similar to those of general customers
Other receivables
RMB 177,412 Based on capital demand
-
-
-
-
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
Transactions between subsidiaries
Other receivables
US$
4,900 Based on capital demand
Investment Co., Ltd.
and parent company
Yantai Walsin Specialty Steel Co., Ltd.
Transactions between subsidiaries Other receivables
Jiangyin Walsin Specialty Alloy Materials Co.,
Transactions between subsidiaries Other receivables
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
Other receivables
Based on capital demand
US$
60,175
RMB 363,643
US$
US$
8,717
RMB 214,155
US$
44,636 Based on capital demand
Based on capital demand
8,955 Based on capital demand
Changshu Walsin Specialty Steel Co., Ltd.
Walsin (Nanjing) Development Co., Ltd.
XiAn Walsin Metal Product Co., Ltd.
Nanjing Taiwan Trade Mart Management Co.,
Transactions between subsidiaries Other receivables
Transactions between subsidiaries Other receivables
Transactions between subsidiaries Other receivables
Transactions between subsidiaries Other receivables
US$
55,825 Based on capital demand
RMB 698,586 Based on capital demand
RMB 176,213 Based on capital demand
37,250 Based on capital demand
RMB
Ltd.
Dongguan Walsin Wire & Cable Co., Ltd.
Transactions between parent
company and subsidiaries
Other receivables
US$
68,544 Based on capital demand
4 Walsin International
PT. Walsin Nickel Industrial Indonesia
Transactions between subsidiaries Other receivables
RMB 1,596,871 Based on capital demand
Investments Limited
5 Yantai Walsin Stainless
Steel Co., Ltd.
Walsin (China) Investment Co., Ltd.
Transactions between subsidiaries Other receivables
RMB 2,558,656 Based on capital demand
Changshu Walsin Specialty Steel Co., Ltd.
Transactions between subsidiaries Trade receivables
RMB
27,311 The terms are set by quotations on the local market
Jiangyin Walsin Specialty Alloy Materials Co.,
Transactions between subsidiaries Trade receivables
RMB
6,386 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 242,772 The terms are set by quotations on the local market
and are similar to those of general customers
and are similar to those of general customers
Jiangyin Walsin Specialty Alloy Materials Co.,
Transactions between subsidiaries Sales
RMB 233,251 The terms are set by quotations on the local market
Ltd.
and are similar to those of general customers
6 Jiangyin Walsin
Yantai Walsin Specialty Steel Co., Ltd.
Transactions between subsidiaries Other receivables
RMB
10,581 Based on capital demand
Specialty Alloy
Materials Co., Ltd. Yantai Walsin Specialty Steel Co., Ltd.
Transactions between subsidiaries Trade receivables
RMB
1,213 The terms are set by quotations on the local market
Yantai Walsin Specialty Steel Co., Ltd.
Transactions between subsidiaries Sales
RMB
40,500 The terms are set by quotations on the local market
and are similar to those of general customers
Walsin (China) Investment Co., Ltd.
Transactions between subsidiaries Other receivables
RMB
99,473 Based on capital demand
and are similar to those of general customers
7 Walsin Specialty Steel
Changshu Walsin Specialty Steel Co., Ltd.
Corp.
Transactions between parent
company and subsidiaries
Other receivables
RMB
8,453 Based on capital demand
2
8
7
-
2
1
1
-
1
2
-
-
1
4
6
-
-
1
1
-
-
-
-
-
(Continued)
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8
No.
Investee Company
Counterparty
Relationship
Financial
Statement
Accounts
Transaction Details
Amount
Payment Terms
% of Total
Sales or
Assets
8 Changshu Walsin Specialty
Jiangyin Walsin Specialty Alloy Materials Co.,
Transactions between
Trade receivables RMB 1,130 The terms are set by quotations on the local market
Steel Co., Ltd.
Ltd.
Yantai Walsin Specialty Steel Co., Ltd.
Jiangyin Walsin Specialty Alloy Materials Co.,
Ltd.
Yantai Walsin Specialty Steel Co., Ltd.
Walsin (China) Investment Co., Ltd.
subsidiaries
Transactions between
subsidiaries
Transactions between
subsidiaries
Transactions between
subsidiaries
Transactions between
subsidiaries
Trade receivables RMB 5,739 The terms are set by quotations on the local market
and are similar to those of general customers
Sales
Sales
RMB
and are similar to those of general customers
817 The terms are set by quotations on the local market
and are similar to those of general customers
RMB 32,926 The terms are set by quotations on the local market
Other receivables RMB 37,911 Based on capital demand
and are similar to those of general customers
9 Shanghai Walsin Lihwa Power
Wire & Cable Co., Ltd.
10 Dongguan Walsin Wire &
Cable Co., Ltd.
12 Jiangyin Walsin Steel Cable
Co., Ltd.
13 Nanjing Walsin Property
Management Co., Ltd.
2020
Jiangyin Walsin Specialty Alloy Materials Co.,
Transactions between
Sales
RMB
Ltd.
Walsin (China) Investment Co., Ltd.
Walsin (China) Investment Co., Ltd.
Shanghai Walsin Lihwa Power Wire & Cable
Co., Ltd.
Shanghai Walsin Lihwa Power Wire & Cable
Co., Ltd.
Yantai Walsin Specialty Steel Co., Ltd.
subsidiaries
Transactions between
subsidiaries
Transactions between parent
company and subsidiaries
Transactions between
subsidiaries
Transactions between
subsidiaries
6 The terms are set by quotations on the local market
and are similar to those of general customers
Other receivables RMB 83,540 Based on capital demand
Other receivables RMB 553,394 Based on capital demand
Sales
RMB 49,712 The terms are set by quotations on the local market
and are similar to those of general customers
Trade receivables RMB 14,014 The terms are set by quotations on the local market
and are similar to those of general customers
Transactions between
subsidiaries
Sales
RMB
581 The terms are set by quotations on the local market
and are similar to those of general customers
Walsin (China) Investment Co., Ltd.
Transactions between
Other receivables RMB 5,420 Based on capital demand
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
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
Trade receivables
and are similar to those of general customers
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
Long-term
receivables
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
5,349,885 Based on capital demand
-
-
-
-
-
-
-
1
-
-
-
-
-
-
-
2
-
-
-
-
4
(Continued)
No.
Investee Company
Counterparty
Relationship
Financial
Statement
Accounts
Transaction Details
Amount
Payment Terms
% of Total
Sales or
Assets
1 Walsin Lihwa Holdings
Walsin (China) Investment Co., Ltd.
Limited
Walsin Lihwa Corporation
2 Joint Success
Walsin (Nanjing) Construction Co., Ltd.
Enterprise Limited
3 Walsin (China)
Investment Co., Ltd.
Walsin Lihwa Holdings Limited
Yantai Walsin Specialty Steel Co., Ltd.
Jiangyin Walsin Specialty Alloy Materials Co.,
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
Transactions between parent
company and subsidiaries
Transactions between parent
company and subsidiaries
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
Other receivables RMB 177,219 Based on capital demand
Other receivables US$
4,900 Based on capital demand
Transactions between subsidiaries Other receivables US$
Based on capital demand
72,407
RMB 435,970
Transactions between subsidiaries Other receivables US$
44,564 Based on capital demand
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
Jiangyin Walsin Specialty Alloy Materials Co.,
Ltd.
Transactions between subsidiaries Trade receivables RMB
and are similar to those of general customers
26,445 The terms are set by quotations on the local market
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
Ltd.
RMB 172,669 The terms are set by quotations on the local market
and are similar to those of general customers
and are similar to those of general customers
6 Jiangyin Walsin
Specialty Alloy
Materials Co., Ltd.
Yantai Walsin Stainless Steel Co., Ltd.
Yantai Walsin Stainless Steel Co., Ltd.
Transaction between subsidiaries Other receivables RMB
Transaction between subsidiaries Trade receivables RMB
6,228 Based on capital demand
2,066 The terms are set by quotations on the local market
Yantai Walsin Stainless Steel Co., Ltd.
Transaction between subsidiaries Sales
RMB
and are similar to those of general customers
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
2
8
9
1
-
1
-
3
1
1
-
1
1
-
1
-
1
4
7
-
-
1
1
-
-
-
1
(Continued)
2
9
0
No.
Investee Company
Counterparty
Relationship
Financial
Statement
Accounts
Transaction Details
Amount
Payment Terms
% of Total
Sales or
Assets
2
9
0
7 Walsin Specialty Steel
Changshu Walsin Specialty Steel Co.,
Corp.
Ltd.
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
8 Changshu Walsin Specialty
Jiangyin Walsin Specialty Alloy
Transaction between subsidiaries Trade receivables
RMB
71 The terms are set by quotations on the local market
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
7,122 The terms are set by quotations on the local market
Walsin Lihwa Corporation
Transactions between subsidiaries
Sales
RMB
50 The terms are set by quotations on the local market
and parent company
and are similar to those of general customers
Jiangyin Walsin Specialty Alloy
Transaction between subsidiaries Sales
RMB
871 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
6,677 The terms are set by quotations on the local market
Walsin (China) Investment Co., Ltd.
Changzhou China Steel Precision
Transactions between subsidiaries Other receivables
Transactions between subsidiaries Trade receivables
RMB
RMB
49,075 Based on capital demand
1,220 The terms are set by quotations on the local market
Materials Co., Ltd.
and are similar to those of general customers
Changzhou China Steel Precision
Transactions between subsidiaries Sales
RMB
1,945 The terms are set by quotations on the local market
Materials Co., Ltd.
and are similar to those of general customers
and are similar to those of general customers
and are similar to those of general customers
-
-
-
-
-
-
-
-
-
-
(Concluded)
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
o
n
TABLE 11
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
INFORMATION OF MAJOR SHAREHOLDERS
DECEMBER 31, 2021
Name of Major Shareholder
Shares
Number of
Shares
Percentage of
Ownership
(%)
LGT Bank (Singapore) Investment Fund under the custody of
251,504,000
7.32
Standard Chartered
Winbond Electronics Corp.
Chin-Xin Investment Co., Ltd.
TECO Electric & Machinery Co., Ltd.
222,000,000
220,011,000
205,332,690
6.46
6.41
5.98
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 Company 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.
291
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, 2021 and 2020, 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, 2021 and 2020, 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 in accordance with the Regulations Governing Auditing and Attestation of
Financial Statements by Certified Public Accountants and auditing standards generally accepted in the
Republic of China. Our responsibilities under those standards are further described in the Auditors’
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of
the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of
the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these
requirements. Based on our audits and the reports of other auditors, 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, 2021. 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, 2021:
Sales Revenue Recognition
In 2021, 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
292
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
21 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, 2021 and 2020 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$5,587,877 thousand and NT$4,238,472 thousand,
which constituted 3.39% and 3.02% of the total assets as of December 31, 2021 and 2020, respectively;
and the investment gains amounted to NT$743,761 thousand and NT$995,518 thousand for the years
ended December 31, 2021 and 2020, 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.
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
293
Financial Information
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.
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,
2021 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
294
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 Ker-Chang Wu.
Deloitte & Touche
Taipei, Taiwan
Republic of China
February 22, 2022
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.
295
Financial Information
WALSIN LIHWA CORPORATION
BALANCE SHEETS
DECEMBER 31, 2021 AND 2020
(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 28)
Trade receivables from unrelated parties (Notes 4 and 9)
Trade receivables from related parties (Notes 4, 9 and 28)
Other receivables (Note 28)
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 23)
Refundable deposits
Long-term receivables from related parties (Note 28)
Other non-current assets
Total non-current assets
TOTAL
LIABILITIES AND EQUITY
CURRENT LIABILITIES
2021
2020
Amount
%
Amount
%
$
5,023,659
8,864
151,065
36,993
4,488,125
630,518
985,084
15,567,272
2,051,688
3
-
-
-
3
-
1
10
1
$
4,511,090
66,059
12,937
27,277
2,243,175
342,552
271,722
8,502,797
2,443,728
3
-
-
-
2
-
-
6
2
28,943,268
18
18,421,337
13
-
16,139,524
92,360,069
17,411,273
81,050
8,243,668
1,291,573
27,548
-
182,006
-
10
56
10
-
5
1
-
-
-
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
4
5
55
12
-
6
1
-
4
-
135,736,711
82
122,049,519
87
$ 164,679,979
100
$ 140,470,856
100
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 18)
Trade payables to unrelated parties
Current tax liabilities (Notes 4 and 23)
Other payables to unrelated parties
Other payables to related parties (Note 28)
Lease liabilities - current (Notes 4 and 14)
Current portion of long-term borrowings (Note 16)
Other current liabilities (Note 27)
$
5,074,632
37,439
-
3,040,224
2,040,190
2,498,452
178,362
20,564
10,500,000
372,874
3
-
-
2
1
2
-
-
7
-
$
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
5
-
-
2
-
2
4
-
4
-
Total current liabilities
23,762,737
15
24,192,375
17
NON-CURRENT LIABILITIES
Bonds Payable (Note 17)
Long-term borrowings (Note 16)
Deferred tax liabilities - non-current (Notes 4 and 23)
Lease liabilities - non-current (Notes 4 and 14)
Net defined benefit liabilities (Notes 4 and 19)
Other non-current liabilities (Note 25)
Total non-current liabilities
Total liabilities
EQUITY (Note 20)
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
Other equity-others
Total other equity
Total equity
TOTAL
The accompanying notes are an integral part of the financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
7,500,000
24,640,014
2,151,564
64,580
451,697
225,863
5
15
1
-
-
-
-
31,140,014
131,132
61,202
290,237
187,661
-
22
-
-
1
-
35,033,718
21
31,810,246
23
58,796,455
36
56,002,621
40
34,313,329
18,440,875
21
11
32,260,002
15,690,406
23
11
6,109,568
2,712,250
38,965,389
47,787,207
4
1
24
29
5,428,200
3,110,410
27,791,577
36,330,187
4
2
20
26
(6,100,687)
11,534,267
(91,467)
5,342,113
(4)
7
-
3
(5,905,135)
6,092,775
-
187,640
(4)
4
-
-
105,883,524
64
84,468,235
60
$ 164,679,979
100
$ 140,470,856
100
296
WALSIN LIHWA CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2021
2020
Amount
%
Amount
%
OPERATING REVENUE (Notes 4 and 21)
$ 97,789,648
100
$ 64,097,690
100
OPERATING COSTS (Note 10)
(84,881,753) (87)
(59,641,481) (93)
(UNREALIZED) REALIZED GAIN ON THE
TRANSACTIONS WITH SUBSIDIARIES
AND ASSOCIATES
(13,335)
-
1,357
GROSS PROFIT
12,894,560
13
4,457,566
OPERATING EXPENSES
Selling and marketing expenses
General and administrative expenses
Research and development expenses
Total operating expenses
1,258,609
1,257,078
180,944
2,696,631
1
1
-
2
745,090
915,989
115,346
1,776,425
PROFIT FROM OPERATIONS
10,197,929
11
2,681,141
NON-OPERATING INCOME AND EXPENSES
Interest income
Dividend income
Other income
Gain (loss) on disposal of property, plant and
equipment
Foreign exchange (losses) gains , net
Gain on valuation of financial assets and
liabilities at fair value through profit or loss
Impairment loss (Note 22)
Other expenses
Gain (loss) on disposal of investments (Note
22)
Interest expense
Share of profit of subsidiaries and associates
under the equity method
225,171
560,552
447,284
683
(311,352)
-
1
-
-
-
654,576
(557,721)
(78,196)
1
(1)
-
461,026
(425,367)
7,218,874
-
-
7
8
151,325
110,905
70,318
(5,483)
73,937
728,770
-
(264,156)
(365,451)
(452,964)
3,935,768
3,982,969
Total non-operating income and expenses
8,195,530
PROFIT BEFORE INCOME TAX FROM
CONTINUING OPERATIONS
INCOME TAX (EXPENSE) BENEFIT (Notes 4
18,393,459
19
6,664,110
11
and 23)
(3,750,830)
(4)
27,039
-
NET PROFIT FOR THE YEAR
14,642,629
15
6,691,149
11
(Continued)
297
-
7
1
2
-
3
4
-
-
-
-
-
1
-
-
-
-
6
7
Financial Information
WALSIN LIHWA CORPORATION
STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
2021
2020
Amount
%
Amount
%
(160,650)
-
43,670
2,611,742
2,892,990
5,344,082
2
3
5
1,258,198
2,479,966
3,781,834
-
2
4
6
OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit plans
(Notes 4 and 19)
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
(67,717)
-
(276,160)
(1)
Share of other comprehensive loss of
associates accounted for using the equity
method
(127,834)
(195,551)
Other comprehensive income for the year,
net of income tax
5,148,531
-
-
5
(82,616)
(358,776)
-
(1)
3,423,058
5
TOTAL COMPREHENSIVE INCOME FOR THE
YEAR
$ 19,791,160
20
$
10,114,207
16
EARNINGS PER SHARE (Note 24)
Basic
Diluted
$
$
4.27
4.26
$
$
2.04
2.04
The accompanying notes are an integral part of the financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
(Concluded)
298
WALSIN LIHWA CORPORATION
STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars)
Share Capital
Capital Surplus Legal Reserve
Special Reserve
Unappropriated
Earnings
Retained 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
Other
Treasury Shares
Total Equity
BALANCE AT JANUARY 1, 2020
$ 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 20)
Legal reserve
Special reserve
Cash dividends distributed by WLC
Excess of the consideration received over the carrying amount of the
subsidiaries' net assets during disposal
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
Cancelation of treasury shares
Others
-
-
-
-
-
-
314,968
-
-
-
(932,728 )
-
-
-
-
135,304
-
-
-
-
-
-
-
-
(1,000,000 )
(500,108)
-
(28)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(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
Appropriation of 2020 earnings (Note 20)
Legal reserve
Special reserve
Cash dividends distributed by WLC
-
-
-
-
-
-
681,368
-
-
-
(398,160 )
-
(681,368 )
398,160
(3,088,200 )
Excess of the consideration received over the carrying amount of the
subsidiaries' net assets during disposal
Change in capital surplus from investments in associates accounted for
using the equity method
-
3,124
-
(26,782)
Issuance of new shares in exchange for the shares of another company
2,053,327
2,771,798
Net profit for the year ended December 31, 2021
-
-
Other comprehensive income (loss) for the year ended December 31,
2021, net of income tax
Total comprehensive income (loss) for the year ended December 31, 2021
Others
-
-
-
-
-
2,329
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
77,160
-
14,642,629
(174,569 )
(195,552 )
5,518,652
14,468,060
(195,552 )
5,518,652
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(77,160 )
(91,467 )
BALANCE AT DECEMBER 31, 2021
$ 34,313,329 $ 18,440,875 $ 6,109,568
$
2,712,250
$ 38,965,389
$
(6,100,687 )
$ 11,534,267
$ (91,467 ) $
The accompanying notes are an integral part of the financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
2
9
9
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$ 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
-
-
(3,088,200 )
3,124
(118,249 )
4,825,125
14,642,629
5,148,531
19,791,160
2,329
$ 105,883,524
Financial Information
WALSIN LIHWA CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax
Adjustments for:
Depreciation expense
Amortization expense
Net gain 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
(Gain) loss on disposal of property, plant and equipment
(Gain) loss on disposal of investments
Impairment loss recognized on non-financial assets
Unrealized (realized) gain on the transaction with associates
Gain on lease modifications
Net loss on foreign currency exchange
Changes in operating assets and liabilities
Decrease (increase) in financial assets mandatorily classified
as at fair value through profit or loss
(Increase) decrease in contract assets
(Increase) decrease in notes receivable
(Increase) decrease in trade receivables
(Increase) decrease in other receivables
(Increase) decrease in inventories
Decrease (increase) in other current assets
Increase in other financial assets
Increase in other operating assets
Increase in trade payables
Increase in other payables
Increase (decrease) in net defined benefit liabilities
(Decrease) increase in other current liabilities
Increase in other operating liabilities
Cash generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
2021
2020
$ 18,393,459
$
6,664,110
1,343,326
445
(654,576)
425,367
(225,171)
(560,552)
(7,218,874)
(683)
(461,026)
557,721
13,335
-
1,784
297,214
(138,128)
(9,716)
(2,532,916)
(640,575)
(7,064,475)
406,860
(14,820)
(64,888)
517,896
525,554
810
(399,500)
38,202
2,536,073
235,112
1,358,109
(498,619)
(138,061)
1,279,845
222
(728,770)
452,964
(151,325)
(110,905)
(3,935,768)
5,483
365,451
-
(1,357)
(38)
130,929
(214,241)
318,258
25,476
19,466
20,229
857,092
(1,982,992)
(86,833)
(85,778)
22,352
7,471
(128,289)
628,583
13,412
3,385,047
151,360
1,023,577
(373,617)
(264,356)
Net cash generated from operating activities
3,492,614
3,922,011
CASH FLOWS FROM INVESTING ACTIVITIES
(Continued)
300
WALSIN LIHWA CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(In Thousands of New Taiwan Dollars)
Purchase of financial assets at fair value through other
comprehensive income
Capital reduction and refund from financial assets at fair value
through other comprehensive income
Purchase of financial assets at fair value through profit or loss
Proceeds from sale of financial assets at fair value through profit or
loss
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
(Increase) decrease in refundable deposits
Decrease (increase) in other receivables
Payments for investment properties
Other investing activities
2021
2020
(1,944,281)
(477,574)
3,615
-
-
(5,353,790)
4,948,895
(6,760,343)
-
(7,181,164)
699,515
(1,729,419)
2,204
(635)
7,016,224
(2,362)
(404,184)
10,044,855
(1,025,204)
1,465
32,866
(5,573,463)
-
(370,896)
Net cash generated from (used in) investing activities
1,829,229
(9,902,905)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term borrowings
Proceeds from bonds payable
Proceeds from long-term borrowings
Repayment of long-term borrowings
(Decrease) 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
(1,559,788)
7,500,000
4,000,000
(6,000,000)
(5,640,652)
(23,133)
(3,088,030)
-
2,329
(2,708,228)
-
20,640,014
(6,500,000)
962,923
(24,052)
(1,662,891)
(1,500,108)
(28)
Net cash (used in) generated from financing activities
(4,809,274)
9,207,630
NET INCREASE IN CASH AND CASH EQUIVALENTS
512,569
3,226,736
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR
4,511,090
1,284,354
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
$
5,023,659
$
4,511,090
The accompanying notes are an integral part of the financial statements.
(With Deloitte & Touche auditors’ report dated February 22, 2022)
(Concluded)
301
Financial Information
WALSIN LIHWA CORPORATION
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020
(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 22,
2022.
3. APPLICATION OF NEW AND REVISED STANDARDS, AMENDED 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)
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.
b. The IFRSs endorsed by the FSC for application starting from 2022
New IFRSs
Effective Date
Announced by the IASB
“Annual Improvements to IFRS Standards 2018-2020”
Amendments to IFRS 3 “Reference to the Conceptual
January 1, 2022 (Note 1)
January 1, 2022 (Note 2)
Framework”
Amendments to IAS 16 “Property, Plant and Equipment -
January 1, 2022 (Note 3)
Proceeds before Intended Use”
Amendments to IAS 37 “Onerous Contracts - Cost of
January 1, 2022 (Note 4)
Fulfilling a Contract”
302
Note 1: 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
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 2: 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 3: 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 4: The amendments are applicable to contracts for which the entity has not yet fulfilled
all its obligations on January 1, 2022.
1) 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.
2) 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.
3) 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.
4) 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).
303
Financial Information
Except for the above impact, as of the date the financial statements were authorized for issue,
the Company has assessed that the application of other standards and interpretations will not
have a material impact on the Company’s financial position and financial performance.
c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC
New IFRSs
Amendments to IFRS 10 and IAS 28 “Sale or Contribution
of Assets between An Investor and Its Associate or Joint
Venture”
Effective Date
Announced by IASB (Note 1)
To be determined by IASB
IFRS 17 “Insurance Contracts”
Amendments to IFRS 17
Amendments to IFRS 17 “Initial Application of IFRS 9 and
January 1, 2023
January 1, 2023
January 1, 2023
IFRS 17 - Comparative Information”
Amendments to IAS 1 “Classification of Liabilities as
January 1, 2023
Current or Non-current”
Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting
January 1, 2023 (Note 2)
January 1, 2023 (Note 3)
Estimates”
Amendments to IAS 12 “Deferred Tax related to Assets and
January 1, 2023 (Note 4)
Liabilities arising from a Single Transaction”
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 will be applied prospectively for annual reporting periods
beginning on or after January 1, 2023.
Note 3: 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.
Note 4: Except for deferred taxes that will be recognized on January 1, 2022 for temporary
differences associated with
the
amendments will be applied prospectively to transactions that occur on or after
January 1, 2022.
leases and decommissioning obligations,
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, 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, 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, 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, i.e., the
Company’s share of the gain or loss is eliminated. Also, when the Group loses control of a
304
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 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.
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) 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;
305
Financial Information
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.
4) 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.
5) Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a
Single Transaction”
The amendments clarify that the initial recognition exemption under IAS 12 does not
apply to transactions in which equal taxable and deductible temporary differences arise on
initial recognition. The Company will recognize a deferred tax asset (to the extent that it is
probable that taxable profit will be available against which the deductible temporary
difference can be utilized) and a deferred tax liability for all deductible and taxable
temporary differences associated with leases and decommissioning obligations on January
1, 2022, and recognize the cumulative effect of initial application in retained earnings at
that date. The Company will apply the amendments prospectively to transactions other
than leases and decommissioning obligations that occur on or after January 1, 2022.
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.
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.
306
The fair value measurements, which are Companyed 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
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.
307
Financial Information
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 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 Company 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.
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
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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
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.
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Financial Information
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.
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
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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 with finite useful lives that are acquired separately are initially measured at
cost and subsequently measured at cost less accumulated amortization and accumulated
impairment loss. Amortization is recognized on a straight-line basis within useful lives. 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 are reported at cost less accumulated
impairment loss.
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, investment properties,
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.
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.
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Financial Information
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.
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 27.
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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; 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.
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
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Financial Information
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.
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
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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 27.
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.
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
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Financial Information
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.
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.
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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 others
a) Revenue from the reading 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.
b) 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 Company recognizes a contract liability for the
difference. Certain payments retained by the customer as specified in the contract are
intended to ensure that the Company adequately completes all of its contractual
obligations. Such retention receivables are recognized as contract assets until the
Company satisfies its performance obligation.
When it is not able to reasonably measure the Company progress toward satisfaction of
the performance obligation but expects to recover costs, the Company recognizes revenue
only to the extent of costs incurred.
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Financial Information
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.
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
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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, 2022, 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.
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Financial Information
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.
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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 development of the country and the economic implications of the
COVID-19 when making its critical accounting estimates such as estimation of cash flow, growth
rate, discount rate and profitability. 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
2021
2020
$
1,050
5,022,609
$
1,050
4,510,040
$ 5,023,659
$ 4,511,090
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%-0.11%
0.001%-0.30%
December 31
2021
2020
321
Financial Information
As of December 31, 2021 and 2020, certain time deposits were classified and pledged as follows:
Purpose
December 31
2021
2020
Other current assets - other
Refundable deposits
Negotiable certificate of
deposits (not expired)
Repatriation of offshore fund
and projects grants
$
-
$ 2,300
80,493
85,160
80,493
87,460
Non-current assets
Other - pledged time
To meet required security
600
600
deposits
deposits
$ 81,093
$ 88,060
7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
December 31
2021
2020
Financial assets mandatorily classified as at FVTPL
Derivative financial assets (not under hedge accounting)
Commodity futures contracts
Foreign exchange forward contracts
Hybrid financial assets
Corporate bonds
$
$
873
7,991
66,059
-
-
5,683,859
Financial assets at FVTPL
$
8,864
$ 5,749,918
Current
Non-current
Financial liabilities held for trading
$
8,864
-
$
66,059
5,683,859
$
8,864
$ 5,749,918
Derivative financial liabilities (not under hedge accounting)
Foreign exchange forward contracts
Exchange rate swap contracts
$
-
37,439
$
15,839
-
Financial liabilities at FVTPL
$
37,439
$
15,839
Current
Non-current
$
37,439
-
$
15,839
-
$
37,439
$
15,839
322
As of December 31, 2021 and 2020, 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, 2021
Commodity futures
Copper
Copper
Nickel
December 31, 2020
Commodity futures
Copper
Nickel
Buy
Sell
Sell
Buy
Sell
9,925
2021.09.01-
2022.01.19-
US$ 94,424
US$ 96,834
US$
2,410
2021.12.31
2022.04.20
3,050
2021.12.10-
2022.01.19-
US$ 29,229
US$ 29,846
US$
(617 )
2021.12.31
2022.03.31
2,238
2021.11.04-
2022.02.04-
US$ 44,698
US$ 46,459
US$
(1,761 )
2021.12.31
2022.03.31
10,250
2020.04.30-
2021.01.20-
US$ 76,919
US$ 79,276
US$
2,357
2020.12.31
2021.10.20
882
2020.10.15-
2021.01.15-
US$ 14,560
US$ 14,597
US$
(37 )
2020.12.17
2021.03.17
As of December 31, 2021 and 2020, outstanding foreign exchange forward contracts not under
hedge accounting were as follows:
Currency
Maturity Date
Notional Amount
(In Thousands)
December 31, 2021
Sell
Buy
December 31, 2020
Sell
Buy
EUR to USD
USD to NTD
EUR to USD
USD to NTD
USD to JPY
2022.01.08-2022.02.17 EUR18,000/USD20,326
2022.01.07-2022.02.10 USD100,000/NTD2,776,800
2022.01.10
EUR25,405/USD28,694
2022.01.06-2022.02.21 USD129,363/NTD3,579,887
2022.01.12-2022.01.18 USD4,784/JPY547,970
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
As of the December 31, 2021, outstanding exchange rate swap contracts not under hedge
accounting were as follows:
Currency
Maturity Date
Notional Amount
(In Thousands)
December 31, 2021
USD to NTD
USD to NTD
USD to NTD
2022.01.12
2022.01.12
2022.01.14
USD75,000/NTD2,097,188
USD70,000/NTD1,957,375
USD40,000/NTD1,109,600
For the years ended December 31, 2021 and 2020, the Company’s strategy for commodity futures
contracts, forward exchange contracts and exchange rate swap contracts was to hedge exposures
323
Financial Information
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. Due to the cash flow
demand, the Company communicated with Golden Harbour International Pte. Ltd. on August 27,
2021 to exercise the early redemption to pay back the bonds. Refer to Note 12.
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
2021
2020
$ 151,065
-
$ 12,937
-
Contract assets - current
$ 151,065
$ 12,937
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
Notes receivable - non-operating
December 31
2021
2020
$
36,024
$
26,292
Notes receivable from related parties
969
985
$
36,993
$
27,277
(Continued)
324
Trade receivables
Trade receivables
Less: Allowance for impairment loss
Trade receivables from related parties
December 31
2021
2020
$ 4,488,125
-
4,488,125
630,518
$ 2,243,175
-
2,243,175
342,552
$ 5,118,643
$ 2,585,727
(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.
325
Financial Information
December 31, 2021
Not Past Due Up to 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
$ 4,940,106 $
178,537 $
-
$
-
$
-
$ 5,118,643
Loss allowance
(lifetime
ECLs)
-
-
-
-
-
-
Amortized cost
$ 4,940,106 $
178,537 $
-
$
-
$
-
$ 5,118,643
December 31, 2020
Not Past Due Up to 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
$ 2,576,308 $
9,419
$
-
$
-
$
-
$ 2,585,727
Loss allowance
(lifetime
ECLs)
-
-
-
-
-
-
Amortized cost
$ 2,576,308 $
9,419 $
-
$
-
$
-
$ 2,585,727
10. INVENTORIES
Raw materials
Raw materials in transit
Supplies
Work-in-process
Finished goods and merchandise
Construction in progress
December 31
2021
2020
$ 2,852,040
2,446,150
1,161,688
1,732,064
7,145,905
229,425
$ 1,808,818
1,392,585
1,082,773
1,038,714
2,862,295
317,612
$ 15,567,272
$ 8,502,797
The cost of inventories recognized as cost of goods sold for the years ended December 31, 2021
and 2020 was NT$84,624,278 thousand and NT$59,353,177 thousand, respectively.
The cost of goods sold for the years ended December 31, 2021 and 2020 included reversals of
inventory write-downs of NT$15,985 thousand and NT$299,477 thousand, respectively. The
reversals of previous write-downs for the years ended December 31, 2021 and 2020 resulted from
the inventory closeout.
326
11. FINANCIAL ASSETS MEASURED AT FAIR VALUE THROUGH OTHER
COMPREHENSIVE INCOME
Domestic listed ordinary shares
HannStar Display Corp.
HannStar Board Corp.
Teco Electric & Machinery Co., Ltd.
Domestic unlisted ordinary shares
Current
Non-current
December 31
2021
2020
$ 5,423,342 $ 3,685,476
2,763,734
26,378
307,641
2,894,429
7,293,386
528,367
$ 16,139,524
$ 6,783,229
-
$
16,139,524
$
-
6,783,229
$ 16,139,524
$ 6,783,229
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.
On December 31, 2021 and 2020, the unrealized valuation gains resulting from these investments
in equity instruments were gains of NT$2,611,742 thousand and NT$1,258,198 thousand,
respectively, recognized in other comprehensive income (loss).
On January 6, 2021, the Company issued 205,333 thousand shares in exchange for 171,104
thousand 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 Company also acquired the shares of
TECO Electric & Machinery Co., Ltd. from the open market. As of December 31, 2021 and
December 31, 2020, the Company held a total of 230,439 thousand and 954 thousand shares,
respectively, of TECO Electric & Machinery Co., Ltd.
12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Investments in subsidiaries
Investments in associates
December 31
2021
2020
$ 54,273,810
38,086,259
$ 45,661,308
31,586,157
$ 92,360,069
$ 77,247,465
327
Financial Information
a. Investments in subsidiaries
Name of Subsidiary
Carrying Value
Ownership
Percentage Carrying Value
Ownership
Percentage
December 31
2021
2020
Unlisted companies:
Walsin Lihwa Holdings
$ 26,803,960
100.00
$ 26,135,792
100.00
Ltd.
Concord Industries Ltd.
Walsin Precision
Technology Sdn. Bhd.
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
New Hono Investment
Pte. Ltd.
Others
5,353,142
447,963
365,703
100.00
100.00
(Note1)
100.00
4,631,181
-
100.00
-
334,644
100.00
383,632
335,371
6,348,728
100.00
99.51
99.22
339,349
340,934
6,452,096
100.00
99.51
99.22
818,205
70.00
783,754
70.00
5,175,692
49.05
5,319,464
49.05
2,381,125
5,828,396
31,893
50.00
(Note 2)
100.00
(Note 2)
50.00
(Note 2)
-
1,306,341
-
17,753
$ 54,273,810
$ 45,661,308
Note 1: In order to adjust the investment structure of the Company, it was transferred from
Concord Industries Ltd to Walsin Lihwa Co., Ltd.
Note 2: 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.
On June 25, 2021, the board of directors of the Company resolved to acquire 100%
of NHI’s shares and the Company acquired 100% of NHI’s shares at a price
US$178,500 thousand on July 30, 2021. After the transaction, the Company directly
and indirectly acquired 92% of WNII’s shares. The Investment Commisson of the
Ministry of Economic Affairs has approved the investment to pay by the Company's
own foreign exchange. Therefore, the Company communicated with Golden
Harbour International Pte. Ltd. to exercise the early redemption and to pay back the
US-currency bonds. The Company will pay the purchase of NHI's shares by the
redemption of the bonds. As of December 31, 2021, US$178,500 thousand has been
paid.
328
b. Investments in associates
Name of Associate
Carrying Value
Ownership
Percentage Carrying Value
Ownership
Percentage
December 31
2021
2020
Material associates
Winbond Electronics Corp. $ 18,357,864
Walton Advanced
22.21
$ 14,595,661
22.21
Engineering, Inc.
Walsin Technology Corp.
2,322,664
8,166,415
21.01
18.30
2,601,028
7,068,731
21.65
18.30
Associates that are not
Individually material
Others
9,239,316
7,320,737
$ 38,086,259
$ 31,586,157
Refer to Table 8 “Information on Investees” and Table 9 “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.
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
2021
2020
$ 30,050,846
$ 2,066,495
$ 14,846,688
$ 25,675,797
$ 1,512,872
$ 20,491,986
All the associates were accounted for using the equity method.
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.
329
Financial Information
1) Material associates
December 31, 2021
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
Winbond
Electronics
Corp.
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
$ 72,506,733 $ 8,361,878 $ 41,187,886
80,233,551 13,155,507 52,910,618
(5,019,961) (21,557,433)
(28,644,931)
(34,061,841)
(5,259,172) (19,062,857)
90,033,512 11,238,252 53,478,214
(9,089,372)
(7,589,399)
(297,416)
$ 82,444,113 $ 10,940,836 $ 44,388,842
22.21%
21.01%
18.30%
$ 18,310,837
$ 2,298,670
47,027
23,994
$ 8,123,158
43,257
Carrying amount
$ 18,357,864 $ 2,322,664
$ 8,166,415
Operating revenue
$ 99,569,924 $ 8,118,256 $ 42,108,708
Net profit for the year
Other comprehensive income
(loss)
Total comprehensive income
$ 15,000,122 $
118,732 $ 8,961,076
4,186,931
(892,554)
1,157,156
for the year
$ 19,187,053
$
(773,822)
$ 10,118,232
December 31, 2020
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Equity
Non-controlling interests
Winbond
Electronics
Corp.
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
$ 47,530,801 $ 6,497,236 $ 39,636,422
78,512,439 11,013,279 42,416,526
(3,189,422) (19,714,368)
(25,475,006)
(29,975,547)
(2,436,908) (16,684,386)
70,592,687 11,884,185 45,654,194
(7,033,732)
(5,143,568)
-
$ 65,449,119 $ 11,884,185 $ 38,620,462
(Continued)
330
Winbond
Electronics
Corp.
Walton
Advanced
Engineering,
Inc.
Walsin
Technology
Corp.
22.21%
21.65%
18.30%
$ 14,536,249 $ 2,572,926 $ 7,067,545
1,186
59,412
28,102
Proportion of the Company’s
ownership
Equity attributable to the
Company
Other adjustments
Carrying amount
$ 14,595,661 $ 2,601,028 $ 7,068,731
Operating revenue
$ 60,683,171 $ 5,399,201 $ 35,599,197
Net profit for the year
Other comprehensive income
(loss)
$ 1,519,043 $
254,887 $ 7,217,645
3,291,251
(49,194)
657,013
Total comprehensive income for
the year
$ 4,810,294 $
205,693 $ 7,874,658
(Concluded)
2) Associates that are not individually material
For the Year Ended December 31
2021
2020
The Company’s share of:
Profit from continuing operations
Other comprehensive income
$
185,157
1,794,745
$
70,065
1,779,371
Total comprehensive income for the year
$ 1,979,902
$ 1,849,436
The Company’s share of profit and other comprehensive income of associates for the
years ended December 31, 2021 and 2020 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$5,587,877 thousand and NT$4,238,472
thousand as of December 31, 2021 and 2020, respectively; investment gain amounted to
NT$743,761 thousand and NT$995,518 thousand for the years ended December 31, 2021
and 2020, respectively.
331
Financial Information
13. PROPERTY, PLANT AND EQUIPMENT
Land
Buildings and
Improvements
Machinery and
Equipment
Other
Equipment
Construction in
Progress
Total
Cost
Balance at January 1, 2021
Additions
Disposals
Reclassified
Balance at December 31,
$ 3,483,995 $ 6,898,636 $ 20,102,064
163,434
(90,497 )
263,379
54,540
(25,232 )
291,068
78,421
(1,164 )
49,773
$ 4,018,641
290,573
(62,645 )
36,374
$ 1,283,927
1,136,216
$ 35,787,263
1,723,184
(179,598 )
-
(60 )
(640,594 )
2021
$ 3,611,025 $ 7,219,012 $ 20,438,380
$ 4,282,943
$ 1,779,489
$ 37,330,849
$
Accumulated depreciation
and impairment
Balance at January 1, 2021
Disposals
Impairment losses
recognized (reversed)
Depreciation expense
Reclassified
Balance at December 31,
8,067 $ 4,146,696 $ 11,464,404 $ 2,674,800 $
(62,549 )
(25,232 )
(90,296 )
-
-
-
-
24,962
164,134
55,108
553,609
815,930
8,231
(20,850 )
265,901
(63,339 )
- $ 18,293,967
(178,077 )
-
-
-
-
557,721
1,245,965
-
2021
$
8,067 $ 4,365,668 $ 12,751,878 $ 2,793,963 $
- $ 19,919,576
Carrying amount at
December 31, 2021
$ 3,602,958 $ 2,853,344 $ 7,686,502 $ 1,488,980 $ 1,779,489 $ 17,411,273
Cost
Balance at January 1, 2020
Additions
Disposals
Reclassified
Balance at December 31,
$ 3,453,378 $ 6,656,121 $ 19,710,620 $ 3,788,415 $ 1,467,291 $ 35,075,825
1,032,318
(320,880 )
-
229,209
(231,033 )
393,268
47,012
(1,265 )
196,768
150,553
(88,582 )
168,255
30,617
-
-
574,927
-
(758,291 )
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
$
Balance at December 31,
8,067 $ 3,996,520 $ 10,918,051 $ 2,531,329 $
(88,485 )
230,980
976
(224,182 )
771,511
(976 )
(1,265 )
151,441
-
-
-
-
- $ 17,453,967
(313,932 )
-
1,153,932
-
-
-
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
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.
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
332
Company keeps in its possession the land titles with the annotation of being pledged to the
Company. As of December 31, 2021 and 2020, the recorded total carrying value of such parcels
of land amounted NT$491,917 thousand.
After appropriate evaluation, the Company recognized an impairment loss on property, plant and
equipment of NT$557,721 thousand for the year ended December 31, 2021
14. LEASE ARRANGEMENTS
a. Right-of-use assets
Carrying amount
Land
Buildings
Transportation equipment
December 31
2021
2020
$ 49,464
472
31,114
$ 56,108
5,710
18,811
$ 81,050
$ 80,629
For the Year Ended December 31
2021
2020
Additions to right-of-use assets
$ 24,290
$ 60,951
Disposal
$
-
$ (1,052)
Depreciation charge for right-of-use assets
Land
Buildings
Transportation equipment
b. Lease liabilities
Carrying amount
Current
Non-current
$ 6,644
5,238
11,987
$ 7,916
5,228
10,212
$ 23,869
$ 23,356
December 31
2021
2020
$ 20,564
$ 64,580
$ 20,500
$ 61,202
333
Financial Information
Range of discount rates for lease liabilities was as follows:
Land
Buildings
Transportation equipment
c. Other lease information
December 31
2021
2020
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
2021
2020
Expenses relating to short-term leases
Expenses relating to low-value asset leases
Total cash outflow for leases
$ 16,203
201
$
$ (39,537)
$ 11,370
109
$
$ (35,531)
15. INVESTMENT PROPERTIES
Completed investment properties
$ 8,243,668
$ 8,314,798
December 31
2021
2020
Cost
Balance at January 1, 2021
Additions
Balance at December 31, 2021
Balance at January 1, 2020
Additions
Balance at December 31, 2020
Accumulated depreciation and impairment
Balance at January 1, 2021
Depreciation expense
Balance at December 31, 2021
Balance at January 1, 2020
Depreciation expense
Balance at December 31, 2020
334
Completed
Investment
Properties
$ 9,975,140
2,362
$ 9,977,502
$ 9,975,140
-
$ 9,975,140
$ 1,660,342
73,492
$ 1,733,834
$ 1,557,785
102,557
$ 1,660,342
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, 2021 and 2020, the fair values of
completed
thousand,
investment properties were NT$29,482,520 and NT$29,252,925
respectively.
16. BORROWINGS
December 31
2021
2020
Short-term borrowings
Current portion of long-term borrowings
Long-term borrowings
$ 5,074,632
$ 10,500,000
$ 24,640,014
$ 6,591,019
$ 6,000,000
$ 31,140,014
a. Short-term borrowings as of December 31, 2021 and 2020 were as follows:
December 31
2021
2020
Interest Rate
%
Amount
Interest Rate
%
Amount
Materials procurement
0.64-0.70
$ 2,111,447
0.70-0.90
$ 5,091,019
loans
Bank line of credit
0.69-0.91
2,963,185
0.65
1,500,000
$ 5,074,632
$ 6,591,019
b. Long-term borrowings as of December 31, 2021 and 2020 were as follows:
December 31
2021
Significant Covenant
Amount
2020
Amount
First Commercial Bank
Long-term credit loan; principal repayments at
$
-
$ 1,000,000
maturity, from December 28, 2018 to December
28, 2021
Hua Nan Commercial Bank
Long-term credit loan; principal repayments at
Hua Nan Commercial Bank
Long-term credit loan; principal repayments at
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, from March 5, 2018 to March 5, 2021
Mega International Commercial
Long-term credit loan; principal repayments at
-
-
-
-
1,500,000
1,500,000
1,000,000
1,000,000
Bank Co., Ltd.
Bank of Taiwan
maturity, from March 5, 2018 to March 5, 2021
Long-term credit loan; principal repayments at
3,000,000
3,000,000
maturity, from March 4, 2019 to March 4, 2022
Cathay United Bank
Long-term credit loan; principal repayments at
1,500,000
1,500,000
maturity, from March 4, 2019 to March 4, 2022
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
(Continued)
335
Financial Information
December 31
2021
Significant Covenant
Amount
2020
Amount
Taipei Fubon Commercial Bank
Chang Hwa Commercial Bank
KGI Bank
Chinatrust 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
maturity, from June 3, 2019 to June 3, 2022
Long-term credit loan; principal repayments at
$ 1,000,000
$ 1,000,000
1,000,000
1,000,000
1,500,000
1,500,000
1,500,000
1,500,000
maturity, from September 3, 2019 to September 3,
2022
Standard Chartered Bank
Long-term credit loan; principal repayments at
5,352,144
5,352,144
DBS Bank
DBS Bank
DBS Bank
maturity, from January 14, 2020 to December 31,
2023
Long-term credit loan; principal repayments at
3,028,500
3,028,500
maturity, from March 30, 2020 to March 30, 2023
Long-term credit loan; principal repayments at
3,018,600
3,018,600
maturity, from March 31, 2020 to March 31, 2023
Long-term credit loan; principal repayments at
3,010,000
3,010,000
maturity, from April 15, 2020 to April 15, 2023
Standard Chartered Bank
Long-term credit loan; principal repayments at
2,093,000
2,093,000
maturity, from September 27, 2020 to December
31, 2023.
Bank of Taiwan
Long-term credit loan; principal repayments at
3,000,000
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 December 04, 2020 to
1,137,770
1,137,770
Republic of China
December 04, 2027; 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.
Hua Nan Commercial Bank
Long-term credit loan; principal repayment at
2,000,000
maturity, from March 29, 2021 to March 29,
2026; principal to be repaid in two phases: From
the 5th year, repayments are due once every six
months.
Taiwan Cooperative Bank
Long-term credit loan; principal repayment at
2,000,000
-
-
maturity, from June 28, 2021 to June 28, 2026;
principal to be repaid in two phases: 1st
repayment due 48 months after the drawdown
date, 2nd repayment due maturity date.
Less current portion of long-term
borrowings
35,140,014
(10,500,000 )
37,140,014
(6,000,000 )
$ 24,640,014
$ 31,140,014
(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
336
d) Tangible net worth (net worth less intangible assets) not less than NT$55,000,000
thousand.
2) The range of weighted average effective interest rates of the credit borrowings was
0.85%-1.20% and 0.10%-1.50% per annum as of December 31, 2021 and 2020,
respectively.
3) As of December 31, 2021 and 2020, the Company’s current portion of long-term
borrowings was NT$10,500,000 thousand and NT$6,000,000 thousand, respectively,
under the loan agreement. The Company’s financial statements for the years ended
December 31, 2021 and 2020 showed that the Company was in compliance with these
ratio requirements.
17. BONDS PAYABLE
December 31
2021
2020
The 1st unsecured bonds in 2021
$ 7,500,000
$
-
On October 8, 2021, the Company issued the first unsecured bonds for NT$7.5 billion, each with
a face value of NT$10 million. The issuance period is 5 years, and the maturity date is on October
8, 2026. The annual interest rate is 0.7%. From the issuance date, the interest will be paid once a
year, and the principal will be repaid once due.
18. FINANCIAL INSTRUMENTS FOR HEDGING
December 31
2021
2020
Financial liabilities for hedging - current
Fair value hedges - exchange rate swap contracts
$
-
$ 165,774
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
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
2022.01.13
2022.01.13
2022.01.13
2022.01.13
2022.01.13
USD21,000/NTD607,457
USD21,000/NTD607,467
USD30,000/NTD867,795
USD30,000/NTD867,810
USD30,000/NTD867,810
(Continued)
337
Financial Information
Currencies
USD to NTD
USD to NTD
USD to NTD
Contract
Expiration Date
Contract Amount
(In Thousands)
2022.01.13
2022.01.13
2022.01.13
USD30,000/NTD867,810
USD11,000/NTD318,197
USD27,000/NTD781,029
(Concluded)
For the Year Ended December 31
2021
2020
$
$
-
-
$ (165,774)
$ (90,000)
Losses on the hedging instruments
Gains on the hedged items
19. 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, 2021 and
2020 was NT$95,977 thousand and NT$89,868 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
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
2021
2020
Present value of defined benefit obligation
Fair value of plan assets
$ 1,482,158
(1,028,335)
$ 1,366,378
(1,074,219)
Net defined benefit liabilities
$
453,823
$
292,159
338
As of December 31, 2021 and 2020, net defined benefit liabilities of NT$2,126 thousand and
NT$1,922 thousand, respectively, were recorded as “other payables - accrued expense.”
Present Value of
the Defined
Benefit
Obligation
Fair Value of
the Plan Assets
Net Defined
Benefit
Liabilities
(Assets)
$ 1,456,719
$
(993,518)
$
463,201
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)
1,366,378
(32,941)
(128,929)
88,652
-
(1,074,219)
10,917
6,801
17,718
-
(5,366)
(5,366)
3,949
30,358
(45,036)
(43,670)
(128,929)
-
(14,620)
292,159
10,917
1,435
12,352
-
(13,584)
(13,584)
38,641
(15,729)
151,322
174,234
-
(76,172)
-
-
-
(13,584)
(11,138)
76,172
38,641
(15,729)
151,322
160,650
(11,138)
-
Balance at January 1, 2020
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 (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, 2020
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 (gain) loss
Changes in demographic
assumptions
Changes in financial
assumptions
Experience adjustments
Recognized in other comprehensive
income
Contributions from the employer
Benefits paid
Balance at December 31, 2021
$ 1,482,158
$ (1,028,335)
$
453,823
339
Financial Information
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
2021
2020
$ 6,240
945
4,918
249
$ 9,465
1,286
4,947
479
$ 12,352
$ 16,177
Through the defined benefit plans under the Labor Standards Act, 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.
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
2021
0.625%
2.25%
2020
0.50%
2.25%
If possible reasonable change in each of the significant actuarial assumptions occur and all
other assumptions 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
340
December 31
2021
2020
$ (61,945)
$ 66,092
$ 63,726
$ (60,375)
$ (59,752)
$ 63,935
$ 61,541
$ (58,145)
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.
20. EQUITY
Share capital
Ordinary shares
Capital surplus
Retained earnings
Others
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
2021
2020
$ 34,313,329
18,440,875
47,787,207
5,342,113
$ 32,260,002
15,690,406
36,330,187
187,640
$ 105,883,524
$ 84,468,235
December 31
2021
2020
6,500,000
6,500,000
$ 65,000,000 $ 65,000,000
3,226,000
$ 34,313,329 $ 32,260,002
3,431,333
As of January 1, 2020, 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.
In August 2020 and November 2020, the Company reduced capital and cancelled 40,000
thousand and 60,000 thousand treasury shares, respectively. In January 2021, the Company
issued 205,333 thousand shares of TECO Electric & Machinery Co., Ltd. Hence, as of
December 31, 2021, the paid-in capital was NT$34,313,329 thousand, divided into 3,431,333
thousand ordinary shares at par value of NT$10.
As of December 31, 2021, 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).
341
Financial Information
b. Capital surplus
Issuance of ordinary shares
The difference between the consideration received or
paid and the carrying amount of the subsidiaries’ net
assets during actual disposal or acquisition
Share of changes in capital surplus of associates
Treasury share transactions
Gain on disposal of property, plant and equipment
Others
December 31
2021
2020
$ 12,639,452
$ 9,867,654
3,124
440,288
2,254,074
2,074,231
1,029,706
-
467,070
2,254,074
2,074,231
1,027,377
$ 18,440,875
$ 15,690,406
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
The shareholders of the Company held their regular meeting on July 15, 2021, and in that
meeting, resolved the amendments to the Company’s Articles of Incorporation (the “Articles”).
Under the dividends policy as set forth in the amended Articles, where the Company made a
profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of
previous years, setting aside as legal reserve 10% of the remaining profit this requirement is
not applicable when the legal reserve has reached the total capital, and then any remaining
profit together with prior unappropriated earnings shall be appropriated for special reserve or
appropriate reversal of special reserve in accordance with the laws and regulations, and then
the balance shall be used by the Company’s board of directors as the basis for proposing a
distribution plan, which should be resolved in the shareholders’ meeting for the distribution of
dividends to shareholders. Other than the aforementioned regulations, the Company shall
reserve no lesser than 40% of the balance amount as shareholders’ profit after offsetting its
loss and tax payments in the previous year, capital reserve, and special reserve adjusted by the
accumulated net deduction of other equity. The profits shall be distributed in cash or in form
of shares; cash dividends shall not be lesser than 70% of the total dividends.
Before the amendments, where the Company made a profit in a fiscal year, the profit shall be
first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve
10% of the remaining profit this requirement is not applicable when the legal reserve has
reached the total capital, and then any remaining profit together with prior unappropriated
earnings shall be appropriated for setting aside or reversing a special reserve in accordance
with the laws and regulations, and then shall be used by the Company’s board of directors as
the basis for proposing a distribution plan, which should be resolved in the shareholders’
meeting for the distribution of dividends to shareholders. the Company shall reserve no lesser
than 40% of the balance amount as shareholders’ profit after offsetting its loss and tax
payments in the previous year, capital reserve and special reserve. The profits shall be
342
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 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 22 for the policies on the distribution of employees’ compensation and
remuneration of directors and supervisors.
The appropriation of earnings for 2020 and 2019 was approved in the shareholders’ meeting
on July 15, 2021 and May 29, 2020, respectively. The appropriation and dividends per share
were as follows:
Appropriation of Earnings
Dividends Per Share (NT$)
2020
2019
2020
2019
Legal reserve
Special reserve
Cash dividends
$
681,368
(398,160)
3,088,200
$
314,968
(932,728)
1,663,000
$
-
-
0.90
$
-
-
0.50
$ 3,371,408
$ 1,045,240
The appropriations of earnings for 2021 had been proposed by the Company’s board of
director on February 22, 2022 were as follows:
Legal reserve
Cash dividends
Appropriation
of Earnings
Dividends Per
Share (NT$)
$ 1,454,522
5,490,133
$
-
1.6
$ 6,944,655
The appropriation of earnings for 2021 is subject to the resolution of the shareholders in their
meeting to be held on May 13, 2022.
d. Special reserve
Special reserve
$ 2,712,250
$ 3,110,410
December 31
2021
2020
343
Financial Information
Information regarding any changes to the above special reserve was as follows:
Balance at January 1
Appropriations
For the Year Ended December 31
2021
2020
$ 3,110,410
(398,160)
$ 4,043,138
(932,728)
Balance at December 31
$ 2,712,250
$ 3,110,410
e. Other equity items
1) Exchange differences on translation of the financial statements of foreign operations
Balance at January 1
Recognized for the year
2021
2020
$ (5,905,135)
$ (5,546,359)
Share from subsidiaries and associates accounted
for using the equity method
(195,552)
(358,776)
Balance at December 31
$ (6,100,687)
$ (5,905,135)
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
Unrealized gain - equity instruments
Share from associates accounted for using the
equity method
For the Year Ended December 31
2021
2020
$ 6,092,775
2,611,742
$ 2,435,949
1,258,198
2,829,750
2,398,628
Balance at December 31
$ 11,534,267
$ 6,092,775
3) Other equity - others
2021
2020
Balance at January 1
Other equity from associates accounted for using
$
-
$
the equity method
(91,467)
Balance at December 31
$ (91,467)
$
-
-
-
344
f. Treasury shares
Treasury shares transactions for the year ended December 31, 2020 were summarized as
follows:
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
Purpose of Buy-back
To restore credibility
and preserve
shareholders’ rights
-
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.
21. REVENUE
Sales revenue
Other revenue
For the Year Ended December 31
2021
2020
$ 94,405,651
3,383,997
$ 63,215,460
882,230
$ 97,789,648
$ 64,097,690
22. NET PROFIT (LOSS) FROM CONTINUING OPERATIONS
Non-operating Income and Expenses - Gain (Loss) on Disposal of Investments
For the Year Ended December 31
2021
2020
Gain (loss) on disposal of investments - commodity futures
Gain (loss) on disposal of investments - forward exchange
$ 431,529
$ (240,856)
contracts
Gain on disposal of investments - exchange rate swap
contracts
Loss on disposal of investments - options
16,695
(124,006)
14,301
(1,499)
2,349
(2,938)
$ 461,026
$ (365,451)
345
Financial Information
Non-operating Income and Expenses - Impairment Loss
Property, plant and equipment
$ (557,721)
$
-
Employee Benefits Expense, Depreciation and Amortization
For the Year Ended December 31
2021
2020
For the Year Ended December 31, 2021
Operating
Costs
Operating
Expenses
Non-operating
Expenses and
Losses
Total
Short-term
benefits
employment
Post-employment benefits $
$
Other employee benefits
$ 1,684,098 $ 1,214,050 $
45,057 $
79,641 $
63,271 $
150,075 $
- $ 2,898,148
108,328
- $
229,716
- $
Depreciation
Property, plant and
equipment
Right-of-use assets
Investment properties
$ 1,105,101 $
4,124
71,966
140,864 $
19,745
1,526
-
-
-
$ 1,245,965
23,869
73,492
$ 1,181,191 $
162,135 $
-
$ 1,343,326
Amortization
$
- $
445 $
- $
445
For the Year Ended December 31, 2020
Operating
Costs
Operating
Expenses
Non-operating
Expenses and
Losses
Total
Short-term
benefits
employment
Post-employment benefits $
$
Other employee benefits
$ 1,396,553
65,415
133,860
$
$
$
999,715
40,630
60,013
$
$
$
-
-
-
$ 2,396,268
106,045
$
193,873
$
Depreciation
Property, plant and
equipment
Right-of-use assets
Investment properties
$ 1,038,978
3,218
96,632
$
114,954
20,138
5,925
$
-
-
-
$ 1,153,932
23,356
102,557
$ 1,138,828
$
141,017
$
-
$ 1,279,845
Amortization
$
-
$
222
$
-
$
222
According to the Company’s Articles, the Company accrues employees’ compensation and
remuneration of directors at rates of no less than 1% and no higher than 1%, respectively, of net
346
profit before income tax, employees’ compensation, and remuneration of directors. For the years
ended December 31, 2021 and 2020, the compensation of employees amounted to NT$187,000
thousand and NT$68,500 thousand, respectively, and the remuneration of directors and
supervisors amounted to NT$75,000 thousand and NT$34,050 thousand, respectively. The
compensation of employees and the remuneration of directors and supervisors for the years ended
December 31, 2021 and 2020 were approved by the Group’s board of directors on February 22,
2022 and February 26, 2021, respectively.
Material differences between such estimated amounts and the amounts proposed by the board of
directors on or before the date the annual 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 financial statements are authorized for issue, the differences
are recorded as a change in the accounting estimate.
There was no difference between the compensation of employees and the remuneration of
directors and supervisors for 2020 and 2019 that were respectively resolved by the Company’s
board of directors on February 26, 2021 and February 27, 2020 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 2022 and 2021 is available at the Market
Observation Post System website of the Taiwan Stock Exchange.
23. INCOME TAXES RELATING TO CONTINUING OPERATIONS
a. Income tax recognized in profit or loss
Income tax expense (benefit) are as following:
Current tax
In respect of the current year
Income tax on unappropriated earnings
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
2021
2020
$
$ 1,958,584
83,446
(1,632)
-
2,040,398
28,523
48,843
-
16,217
93,583
1,715,707
(94,000)
(5,275)
1,710,432
(26,622)
(120,622)
Income tax benefit recognized in profit or loss
$ 3,750,830
$
(27,039)
A reconciliation of accounting profit and income tax expense (benefit) is as follows:
Profit before tax from continuing operations
$ 18,393,459 $ 6,664,110
For the Year Ended December 31
2021
2020
347
Financial Information
Income tax expense calculated at the statutory rate
Equity in investees’ net gain
$ 3,678,692 $ 1,332,822
(861,000)
(Continued)
For the Year Ended December 31
495,820
2021
2020
Tax-exempt dividend income
Loss on investments
Tax-exempt subsidize revenue
Others
Income tax on unappropriated earnings
Adjustments for prior years’ tax
(112,110)
(384,000)
-
(4,111)
83,446
(6,907)
Income tax benefit recognized in profit or loss
$ 3,750,830 $
(22,000)
(495,100)
(3,880)
(102)
48,843
(26,622)
(27,039)
(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 Company only deducts the amount of the
unappropriated earnings that has been reinvested in capital expenditure.
b. Current tax assets and liabilities
Current tax assets
Tax refund receivable
Current tax liabilities
Income tax payable
c. Deferred tax assets and liabilities
December 31
2021
2020
$
32,006
$
2,317
$ 2,040,190
$
108,164
December 31
2021
2020
Deferred tax assets
Pension expense not currently deductible
Provision for permanent devaluation loss on long-term
$
32,000
$
32,000
investments
Provision for devaluation loss on obsolete and
slow-moving inventories
Provision for impairment loss on idle assets
Loss on liquidation of investments
Loss deduction
Others
547,000
547,000
25,000
10,000
384,000
-
293,573
28,000
17,000
-
254,000
103,573
$ 1,291,573
$
981,573
348
(Continued)
December 31
2021
2020
Deferred tax liabilities
Reserve for land value increment tax
Unrealized gain of investments
$
(131,132)
(2,020,432)
$
(131,132)
-
$ (2,151,564)
$
(131,132)
(Concluded)
d. The Company’s income tax returns through 2018 had been assessed by tax authorities.
24. EARNINGS PER SHARE
For the Year Ended December 31
2021
2020
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)
$ 14,642,629
3,428,520
$ 4.27
$ 6,691,149
3,276,128
$ 2.04
-
7,632
-
4,100
$ 14,642,629
3,436,152
$ 4.26
$ 6,691,149
3,280,228
$ 2.04
Basic earnings per share
Net income
Effect of dilutive
potential ordinary
shares
Diluted earnings per
share
Net income plus
dilutive effect
25. 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, 2021 and 2020, deposits received under operating leases amounted to
NT$167,217 thousand and NT$170,228 thousand, respectively (recorded under other liabilities -
non-current).
As of December 31, 2021, the Company’s future minimum lease receivables on non-cancelable
operating lease commitments are as follows:
Years of 2022
$
645,634
349
Financial Information
2023-2027
26. CAPITAL MANAGEMENT
1,049,526
$ 1,695,160
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).
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.
27. 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.
December 31, 2021
Financial liabilities
Financial liabilities at amortized cost
Carrying
Amount
Level 1
Level 2
Level 3
Total
Fair Value
Bonds payable
$ 7,500,000
$
-
$ 7,500,000
$
-
$ 7,500,000
The fair values of the financial assets and financial liabilities included in the Level 2
categories above have been determined in accordance with the income approach based on a
discounted cash flow analysis. The observable inputs included bond duration, bond interest
rates and credit rating.
b. Fair value of financial instruments that are measured at fair value on a recurring basis
1) Fair value hierarchy
December 31, 2021
Financial assets at FVTPL
350
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Derivatives not designated as
hedging instruments
$
873 $
7,991 $
- $
8,864
Level 1
Level 2
Level 3
Total
(Continued)
Financial assets at FVTOCI
Investments in equity
instruments
Securities listed in ROC
Unlisted securities
Financial liabilities at FVTPL
Derivatives not designated as
$ 15,611,157 $
-
- $
-
- $ 15,611,157
528,367
528,367
$ 15,611,157 $
- $
528,367 $ 16,139,524
hedging instruments
$
- $
37,439 $
- $
37,439
(Concluded)
December 31, 2020
Financial assets at FVTPL
Derivatives not designated as
Level 1
Level 2
Level 3
Total
hedging instruments
$
66,059 $
Corporate bonds
-
- $
-
- $
5,683,859
66,059
5,683,859
$
66,059 $
- $ 5,683,859 $ 5,749,918
Financial assets at FVTOCI
Investments in equity
instruments
Securities listed in ROC
Unlisted securities
Financial liabilities at FVTPL
Derivatives not designated as
$ 6,475,588 $
-
- $
-
- $ 6,475,588
307,641
307,641
$ 6,475,588 $
- $
307,641 $ 6,783,229
hedging instruments
$
- $
15,839 $
- $
15,839
Derivative financial liabilities
for hedging
-
165,774
-
165,774
$
- $
181,613 $
- $
181,613
351
Financial Information
2) There were no transfers between Levels 1 and 2 in 2021 and 2020.
352
3) Reconciliation of Level 3 fair value measurements of financial instruments
For the year ended December 31, 2021
Financial Assets
Balance at January 1, 2021
Additions
Capital reduction and refund
Recognized in other comprehensive income
Balance at December 31, 2021
For the year ended December 31, 2020
Financial Assets
Balance at January 1, 2020
Additions
Recognized in other comprehensive income
Balance at December 31, 2020
Financial Assets
at FVTOCI
Equity
Instruments
$ 307,641
149,993
(3,615)
74,348
$ 528,367
Financial Assets
at FVTOCI
Equity
Instruments
$ 318,073
29,250
(39,682)
$ 307,641
4) Valuation techniques and inputs applied for Level 2 fair value measurement
Financial Instruments
Valuation Techniques and Inputs
Derivatives - foreign exchange
Discounted cash flow. Future cash flows are
forward contracts
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 swap
Discounted cash flow. Future cash flows are
contracts
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.
353
Financial Information
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
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.
Net asset method. Fair values are determined based on
the book value of companies.
Discounted cash flow. Present values are determined
based on future cash flows discounted at market yield.
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
December 31
2021
2020
Financial assets
Financial assets at amortized cost
Cash and cash equivalents
Contract assets - current
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 (current and non-current)
$ 5,023,659
151,065
$ 4,511,090
12,937
5,155,636
985,084
-
27,548
8,864
16,139,524
2,613,004
271,722
5,349,885
26,913
5,749,918
6,783,229
Financial liabilities
Financial liabilities at FVTPL (current and non-current)
Derivative financial liabilities for hedging (current and
non-current)
Financial liabilities at amortized cost
37,439
15,839
-
165,774
Short-term borrowings
Trade payables
Other payables
Bonds Payable
Long-term borrowings (including current portion)
Deposits received (accounted for as other non-current
5,074,632
3,040,224
2,676,814
7,500,000
35,140,014
6,591,019
2,522,328
8,009,712
-
37,140,014
liabilities)
225,863
186,325
354
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
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
December 31
2021
2020
$ 6,038,747
122,926
926,756
1,559
11,515
31,714
$ 2,098,969
27,663
428,652
-
7,365
12,493
(Continued)
355
Financial Information
Renminbi
Liabilities
U.S. dollar
Euro
Swiss Franc
Japanese yen
December 31
2021
2020
-
5
2,567,987
830
513
-
11,564,577
159
549
1,108
(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
Euro
Liabilities
U.S. dollar
Euro
December 31
2021
2020
$ 3,713,197
795,675
$ 7,556,970
-
7,888,800
563,760
284,800
232,966
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.
U.S. Dollar Impact
For the Year Ended December 31
2021
2020
$ 7,048
$ (24,264)
$ (24,264)
Profit or loss
b) Interest rate risk
The Company is exposed to interest rate risk because it borrows funds at both fixed
and floating interest rates.
356
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:
Fair value interest rate risk
Financial liabilities
Cash flow interest rate risk
Financial liabilities
Sensitivity analysis
December 31
2021
2020
$ 7,500,000
$
-
$ 40,214,646
$ 43,731,033
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, 2021 and
2020 would decrease by NT$402,146
thousand,
respectively.
thousand and NT$437,310
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
Exchange rate swap
USD to NTD
USD21,000/
2021.1.13
$
590,058
Financial
$
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
Carrying Amount
Change in
Value Used for
Calculating
Hedge
Asset
Liability
Effectiveness
-
-
-
-
-
-
-
-
$
(17,398 )
$
(17,409 )
(24,855 )
(24,870 )
(24,870 )
(24,870 )
(9,119 )
(22,383 )
-
-
-
-
-
-
-
-
357
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, 2021
Non-derivative
financial liabilities
Variable interest rate
liabilities
Lease liabilities
Non-interest bearing
Fixed interest rate
liabilities
358
1 Year
1-2 Years
2-5 Years
5+ Years
Total
$ 15,574,632
18,501
5,812,052
$ 16,502,244
15,124
29,024
$ 7,000,000
29,550
101,825
$ 1,137,770
20,125
-
$ 40,214,646
83,300
5,942,901
-
-
7,500,000
-
7,500,000
$ 24,405,185
$ 16,546,392
$ 14,631,375
$ 1,157,895
$ 53,740,847
December 31, 2020
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
$ 12,591,019
21,319
4,084,602
$ 17,945,144
12,556
28,216
$ 12,057,100
22,822
115,184
$ 1,137,770
26,308
-
$ 43,731,033
83,005
4,228,002
5,768,000
-
-
-
5,768,000
$ 22,464,940
$ 17,985,916
$ 12,195,106
$ 1,164,078
$ 53,810,040
b) The Company’s derivative financial instruments with agreed settlement date were as
follows:
December 31, 2021
Net settled
Commodity futures
contracts
Foreign exchange
forward contracts
Exchange rate swap
contracts
December 31, 2020
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
$ 14,706
$ (25,016)
$ 11,183
$
7,814
(37,439)
177
-
-
-
$ (14,919)
$ (28,575)
$ (24,839)
$ 11,183
$ (28,575)
$
-
-
-
-
$
873
7,991
(37,439)
$ (28,575)
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)
359
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
2021
CTBC bank
$ 150,495
$
5,786
US$ 2,700
$
2020
CTBC bank
$ 137,121
$ 21,266
US$ 2,700
$
-
-
-
-
28. 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.,
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Ltd.
Walsin Specialty Steel Corp.
Changshu Walsin Specialty Steel Co., Ltd.
Yantai Walsin Stainless Steel Co., Ltd.
PT. Walsin Nickel Industrial Indonesia
Walsin Internation Investments Limited
Walsin Technology Corp.
Walton Advanced Engineering, Inc.
Chin-Xin Investment Co., Ltd.
Walsin Color Co., Ltd.
Winbond Electronics Corp.
Prosperity Dielectrics Co., Ltd.
HannStar Display Corp.
Kuong Tai Metal Industrial Co., Ltd.
HannStar Board Corp.
Global Brands Manufacture Ltd.
Info-Tek Corp.
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Subsidiary
Associate
Associate
Associate
Associate
Associate
Associate
Substantive related party
Substantive related party
Substantive related party
Substantive related party
Substantive related party
360
b. Sales
Subsidiaries
Other related parties
c. Rental income
Subsidiaries
Associates
Other related parties
d. Purchases of goods
Subsidiaries
Other related parties
e. Administrative expenses
Subsidiaries
Associates
Other related parties
For the Year Ended December 31
2021
2020
$ 3,564,180
1,743,620
$ 2,750,804
903,376
$ 5,307,800
$ 3,654,180
For the Year Ended December 31
2021
2020
$
$
2,840
34,798
1,029
240
33,658
993
$
38,667
$
34,891
For the Year Ended December 31
2021
2020
$
$
5,478
4,961
8,938
3,891
$
10,439
$
12,829
For the Year Ended December 31
2021
2020
$
$
390
14,889
13,558
390
12,955
10,725
$
28,837
$
24,070
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.
361
Financial Information
f. Dividend income
Other related parties
HannStar Display Corp.
HannStar Board Corp.
Others
g. Notes receivable
Associates
Prosperity Dielectrics Co., Ltd.
Walsin Technology Corp.
h. Trade receivables
For the Year Ended December 31
2021
2020
$
$
149,816
140,259
7,705
-
106,722
2,890
$
297,780
$
109,612
December 31
2021
2020
$
$
129
841
$
970
$
129
856
985
December 31
2021
2020
Subsidiaries
Dongguan Walsin Wire & Cable Co., Ltd.
Changshu Walsin Specialty Steel Co., Ltd.
Jiangyin Walsin Specialty Alloy Materials Co., Ltd.
Others
$
Other related parties
$
81,510
281,519
245,996
4,264
17,229
207,701
-
-
95,797
39,054
i. Trade payables
$
630,518
$
342,552
December 31
2021
2020
Subsidiaries
Yantai Walsin Stainless Steel Co., Ltd.
$
Other related parties
$
5,153
601
$
5,754
$
-
684
684
362
j. Other receivables (excluding financing provided)
Subsidiaries
Associates
Other related parties
December 31
2021
2020
$
$
70,541
19,279
2,648
-
9,945
2,598
$
92,468
$
12,543
k. Other payables (included loans from related parties)
Related Party Category/Name
December 31
2021
2020
Walsin Lihwa Holdings Ltd.
Walsin Lihwa International Investments Ltd.
Walsin Info-Electric Inc.
Subsidiaries
$
44,538
-
130,062
1,406
$
-
5,698,656
72,058
1,594
Related Party Category/Name
2021
2020
$
176,006
$ 5,772,308
For the Year Ended December 31
Interest expense
Subsidiaries
$
11,910
$
22,415
The Company obtained loans from related parties at rates comparable to market interest rates.
l. Disposals of property, plant and equipment (included investment properties)
Related Party
Category/Name
Walsin Info-Electric Inc.
Prosperity Dielectrics Co.,
Ltd.
Shanghai Walsin Lihwa
Power Wine & Cable Co.,
Ltd.
Proceeds
For the Year Ended
December 31
Gain on Disposal
For the Year Ended
December 31
2021
2020
2021
2020
$
-
$
17
$
-
$
-
-
-
295
-
295
91
-
91
$
-
$
403
$
-
$
386
363
Financial Information
m. Lease arrangements - Company is lessee
Line Item
Related Party Category/Name
2021
2020
December 31
Lease liabilities
Subsidiaries
$
416
$ 5,361
Related Party Category/Name
2021
2020
For the Year Ended December 31
Interest expense
Subsidiaries
Lease expense
Subsidiaries
n. Guarantee deposits
Related Party Category/Name
Associates
Other related parties
o. Loan to related parties
$
59
$
152
$
450
$
-
December 31
2021
2020
$
$
7,453
282
7,225
282
$
7,735
$
7,507
Related Party Category/Name
December 31
2021
2020
PT. Walsin Nickel Industrial Indonesia
$
-
$ 5,349,885
Interest revenue
Subsidiaries
For the Year Ended December 31
2021
2020
$
222,172
$
127,413
The interest rate of the Company’s loan to the above-mentioned related parties is equivalent to
the market interest rate.
p. Compensation of key management personnel
The remuneration of directors and key executives in 2021 and 2020 was as follows:
364
Short-term benefits
Post-employment benefits
For the Year Ended December 31
2021
2020
$
217,470
1,392
$
126,999
1,414
$
218,862
$
128,413
The remuneration of directors and key executives, as determined by the remuneration
committee, was based on the performance of individuals and market trends.
29. 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
2021
2020
Refundable deposits (recorded under non-current assets)
$
600
$
600
30. 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, 2021 and 2020 were as follows:
a. Outstanding letters of credit not reflected in the accompanying financial statements as of
December 31, 2021 and 2020 were as follows (in thousands):
New Taiwan dollar
U.S. dollar
Renminbi
Japanese yen
Euro
December 31
2021
2020
NT$ 47,575
9,572
US$
RMB 13,134
JPY 160,710
EUR 13,946
NT$ 82,347
US$ 17,455
RMB 13,134
JPY 108,812
4,770
EUR
b. Outstanding standby letters of credit not reflected in the accompanying financial statements
were as follows (in thousands):
New Taiwan dollar
U.S. dollar
December 31
2021
2020
NT$ 665,286
30
US$
NT$ 392,784
30
US$
365
Financial Information
c. Based on the tariff and relevant regulations, the Company shall issue a letter of credit to
import goods and to meet the needs of post-release duty payment. The guaranteed amount was
as follows:
December 31
2021
2020
New Taiwan dollar
NT$ 462,000
NT$ 434,000
d. Non-cancelable raw material procurement contracts were as follows:
December 31
2021
2020
U.S. dollar
US$ 42,595
US$ 22,681
e. The Company entered into a contract for the construction of new plants on the Company’s
own land. The amount of the unrecognized commitments was as follows:
December 31
2021
2020
New Taiwan dollar
NT$2,702,350 NT$
-
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, 2021
Financial assets
Monetary items
U.S. dollar
Japanese yen
Euro
Singapore dollars
Hong Kong dollar
Australian dollar
Unit: Foreign Currency/In Thousands of Taiwan Dollars
Foreign
Currency
Exchange Rate
Carrying
Amount
$
218,163
511,128
29,590
76
3,245
1,579
27.6800
0.2405
31.3200
20.4600
3.5490
20.0800
$ 6,038,747
122,926
926,756
1,559
11,515
31,714
(Continued)
366
Investments accounted for using the
equity method
U.S. dollar
Renminbi
Indonesia rupiah
Malaysian ringgt
Financial liabilities
Monetary items
U.S. dollar
Euro
Swiss franc
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
Foreign
Currency
Exchange Rate
Carrying
Amount
$
326,162
8,674,482
6,409,142
70,490
27.6800
4.3416
0.00198
6.3550
$ 9,028,163
37,661,217
12,690
447,963
92,774
26
17
27.6800
31.3200
30.1750
2,567,987
830
513
(Concluded)
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
For the years ended December 31, 2021 and 2020, realized and unrealized net foreign exchange
loss were NT$311,352 thousand and gain NT$73,937 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.
367
Financial Information
32. SEPARATELY DISCLOSED ITEMS
a. Information about significant transactions and investees:
1) Financing provided to others (Table 1)
2) Endorsements/guarantees provided (Table 2)
3) Marketable securities held (Table 3)
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 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 instruments (Notes 7 and 18)
10) Information on investees (Table 8)
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 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 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
368
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 10).
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.
369
3
7
0
WALSIN LIHWA CORPORATION
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2021
(In thousands of New Taiwan Dollars and U.S. Dollars)
TABLE 1
3
7
0
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a
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c
a
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I
f
n
o
r
m
a
t
i
No.
Lender
Borrower
Financial
Statement
Account
Related
Party
Highest Balance
for the Period
Ending Balance
Actual
Amount
Borrowed
Interest
Rate
(%)
Nature of
Financing
Business
Transactio
n Amount
Reasons for
Short-term
Financing
Allowance for
Impairment Loss
Item
Value
Collateral
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$
17,824,000
640,000)
$
(US$
8,857,600
320,000)
$
US$
-
-
3.50 Operating capital $
-
Operating capital
and purchase
equipment
$
-
-
$
-
$
42,353,410
(US$ 1,530,109)
$
42,353,410
(US$ 1,530,109)
o
n
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
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 = $105,883,524× 40% ＝ $42,353,410 (US$1,530,109)
b. The limit on the amount of financing provided was as follows:
The limit on the amount of financing provided = $105,883,524× 40% ＝ $42,353,410 (US$1,530,109)
2. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars.
3. The amounts were translated using the exchange rate as of December 31, 2021: US$ to NT$ = 1:27.68.
TABLE 2
WALSIN LIHWA CORPORATION
ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars and U.S. Dollars)
No.
(Note 1)
Endorsement/
Guarantee
Provider
Guaranteed Party
Name
Nature of
Relationship
(Note 2)
Limits on Each
Guaranteed Party’s
Endorsement/
Guarantee
Amounts
(Note 3)
Highest
Balance for the
Period
Ending Balance
(Note 4)
Actual Borrowing
Amount
Amount of
Endorsement/
Guarantee
Collateralized
by Properties
Ratio of
Accumulated
Endorsement/
Guarantee to Net
Equity Per Latest
Financial
Statement (%)
Maximum
Collateral/
Guarantee
Amounts Allowable
(Note 3)
Guaranteed
Provided by
Parent Company
Guarantee
Provided by A
Subsidiary
Guarantee
Provided to
Subsidiaries in
Mainland China
0 Walsin Lihwa
Corporation
PT. Walsin Nickel
Industrial Indonesia
c
$
12,196,998
(US$ 440,643)
$
(US$
2,491,200
90,000)
$ 2,491,200
(US$ 90,000 )
$ 1,107,200
(US$ 40,000 )
$
-
-
$ 105,883,524
Yes
No
No
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 at 1.
2. The relationship between Walsin Lihwa Corporation and the endorsed/guaranteed entities can be classified into seven 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 financial statement
(including the consolidated financial statement). 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 to an
invested company 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$105,883,524 × 100% ＝ NT$105,883,524.
b. The limit on the amount of endorsements/guarantees provided to a single entity was as follows:
PT. Walsin Nickel Industrial Indonesia: US$191,584 × 250% × 92% ＝ US$440,643.
4. The currency exchange rate as of December 31, 2021 was as follows: US$ to NT$ = 1:27.68.
3
7
1
i
F
n
a
n
c
a
i
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I
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n
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r
m
a
t
i
o
n
3
7
2
WALSIN LIHWA CORPORATION
MARKETABLE SECURITIES HELD
DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars)
TABLE 3
3
7
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, 2021
Carrying
Amount
Percentage of
Ownership (%)
Fair Value
Note
Walsin Lihwa
Corporation
Share
HannStar Display Corp.
The holding company is a director
HannStar Board Corp.
of the issuing company
The chairman of the holding
company and the chairman of
the company are second-class
relatives
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
$ 5,423,342
9.90
$ 5,423,342
63,753,952
2,894,429
12.06
2,894,429
Teco Electric & Machinery Co.,
-
Ltd.
Kuang Tai Metal Industrial Co.,
The holding company is a director
Ltd.
of the issuing company
Taiwan Submarine Cable Corp.
The holding company is a director
(One-Seven Trading Co., Ltd.)
of 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
Corp.
-
-
The holding company is a
supervisor of the issuing
company
Tung Mung Development Co.,
-
Ltd.
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
230,438,730
7,293,386
10.77
7,293,386
9,631,802
276,509
30,000
149
5,221,228
60,283
19,024
187
1,400,000
12,650
9.39
6.67
2.97
1.91
1.16
3,000,000
28,596
15.00
276,509
149
60,283
187
12,650
28,596
14,285,000
149,993
4.01
149,993
TABLE 4
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, 2021
(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 Concord
Industries
Limited
Walsin Precision
Technology
Corp.
New Hono
Investment Pte.
Ltd
Investments
accounted for
using the equity
method
Investments
accounted for
using the equity
method
Investments
accounted for
using the equity
method
Capital
Subsidiaries
285,903,187 $ 4,631,181
investment/capital
reduction
47,000,000 $ 1,156,955
(Note 1)
Concord Industries
Subsidiaries
-
-
32,178,385
Limited
447,963
(Note 2)
Capital investment
Subsidiaries
-
-
42,000,000 5,828,396
(Note 2)
Teco Electric &
Financial assets at
Capital investment
-
954,000
Machinery Co.,
Ltd.
fair value through
profit or loss
26,378 229,484,730 7,267,008
(Note 3)
Note 1: The amount included subscription for shares, investment income or loss and changes in other equity.
Note 2: The amount included the purchase amount, investment income or loss and changes in other equity.
Note 3: The amount included the purchase amount, issuance of new shares in exchange for the shares of another company and adjustments through fair value.
15,398,007 $
434,994
$
434,994
-
317,505,180 $ 5,353,142
-
-
-
-
-
-
-
-
-
-
32,178,385
447,963
42,000,000 5,828,396
-
-
230,438,730 7,293,386
3
7
3
3
7
4
WALSIN LIHWA CORPORATION
ACQUISITION OF INDIVIDUAL REAL ESTATE PROPERTIES AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars)
TABLE 5
3
7
4
Company Name
Types of
Property
Transaction Date
Transaction
Amount (Foreign
Currencies in
Thousands)
Payment Term
Counterparty
Nature of
Relationships
Owner
Relationships
Transfer Date
Amount
Price Reference
Purpose of
Acquisition
Other Terms
Prior Transaction of Related Counterparty
Walsin Lihwa
Corporation
Plant
2021/08/19-
2021/12/23
$521,333
Based on the terms
in the contract
Chung-Lu
Construction Co.,
Ltd.
-
N/A
N/A
N/A
N/A
Based on the
marketability
Manufacturing and
operating purpose
-
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I
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m
a
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i
o
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TABLE 6
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
DECEMBER 31, 2021
(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
% of
Total
Payment Terms
Unit Price
Payment
Terms
Ending
Balance
% of
Total
Note
Walsin Lihwa
Corporation
Dongguan Walsin Wire & Cable
100% indirectly
Sales
$ (2,273,189)
(2) The payment terms are set by
Similar
Similar
$
81,510
2
Co., Ltd.
owned
subsidiary
Jiangyin Walsin Specialty Alloy
100% indirectly
Sales
(668,583)
Materials Co., Ltd.
Koung Tai Metal Industrial Co.,
Ltd.
owned
subsidiary
Director of the
related party
Sales
(1,743,620)
Changshu Walsin Specialty Steel
100% indirectly
Sales
(595,996)
Co., Ltd.
owned
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.
(2) 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.
Similar
Similar
245,996
5
Similar
Similar
17,229
-
Similar
Similar
281,518
5
3
7
5
3
7
6
WALSIN LIHWA CORPORATION
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars)
TABLE 7
3
7
6
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
Company Name
Related Party
Nature of Relationship
Financial Statement Account and
Ending Balance
Turnover
Rate
Amount
Overdue
Action
Taken
Amounts
Received in
Subsequent
Period
Allowance for
Bad Debts
o
n
Walsin Lihwa
Corporation
Jiangyin Walsin Specialty Alloy Materials
100% indirectly owned subsidiary Trade receivables
$ 245,996
3.87
$
Co., Ltd.
Changshu Walsin Specialty Steel Co., Ltd.
100% indirectly owned subsidiary Trade receivables
281,518
4.12
-
-
-
-
$
99,789
$
194,308
-
-
WALSIN LIHWA CORPORATION
NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE GROUP EXERCISES SIGNIFICANT INFLUENCE
FOR THE YEAR ENDED DECEMBER 31, 2021
Information of investees that Walsin Lihwa Corporation has controlling power or significant influence was as follows (in thousands of New Taiwan dollars):
Investor
Company
Investee Company
Location
Main Businesses and Products
Original Investment Amount
December 31,
2021
December 31,
2020
Balance as of December 31, 2021
Percentage of
Ownership
(%)
Number of
Shares
Carrying
Amount
TABLE 8
Net Income
(Loss) of the
Investee
Investment
Gain (Loss)
Note
Walsin Lihwa
Corporation
Walsin Lihwa Holdings
Vistra Corporate Services Centre Wickhams Cay II,
Investments
Limited
Road Town, Tortola, VG1110 British Virgin Islands
Concord Industries Limited Vistra Corporate Services Centre Wickhams Cay II,
Investments
Road Town, Tortola, VG1110 British Virgin Islands
$ 14,495,777 $ 14,760,298
473,730,393
100.00
$ 26,803,960 $ 1,081,312
$ 1,081,391
13,611,135
12,724,589
317,505,180
100.00
5,353,142
(162,677 )
(58,882 )
Ace Result Global Limited
Vistra Corporate Services Centre Wickhams Cay II,
Investments
1,587,416
1,587,416
44,739,988
100.00
383,632
46,062
46,062
Road Town, Tortola, VG1110 British Virgin Islands
Min Maw Precision Industry
25F., No. 1, Songzhi Rd., Xinyi District, Taipei City,
Solar power systems management,
180,368
180,368
29,995,859
100.00
365,703
31,059
31,059
Corp.
Taiwan, R.O.C.
design, and installation
Waltuo Green Resources
No. 47, Bade Rd., Yanshui District, Tainan City 73743,
Waste disposal, resource recovery and
10,000
10,000
1,000,000
100.00
19,203
10,366
10,366
Corporation
Taiwan, R.O.C.
cement products
Walsin Precision Technology
2115-1,Kawasan Perindustrian air Keroh, Fasa IV, Air
Production and sale of stainless steel
434,994
Corp.
Keroh, 75450 Melaka, Malaysia
New Hono Investment Pte.
5001 Beach Road #07-37 Golden Mile Complex
plates
Investments
Ltd
Singapore (199588)
5,003,810
-
-
32,178,385
100.00
447,963
47,066
30,256 (Note)
42,000,000
100.00
5,828,396
953,732
849,748
Jin-Cherng Construction Co. 5th Floor, 192 Jingye 1st Road, Jhongshan District,
Construction
611,688
611,688
577,583,403
99.22
6,348,728
(108,838 )
(108,129 )
Taipei 104, Taiwan, R.O.C.
Walsin Info-Electric Corp.
25F., No. 1, Songzhi Rd., Xinyi District, Taipei City,
Mechanical and electrical,
270,034
270,034
29,854,246
99.51
335,371
(4,767 )
(4,744 )
PT. Walsin Lippo Industries
PT. Walsin Lippo Kabel
PT. Walsin Nickel Industrial
Indonesia
Taiwan, R.O.C.
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
Gedung Wisma Mulia LT. 41 JL Jend Gatot Subroto
NO. 42 Kuningan Barat Mmpang Prapatan Kota
ADM. Jakarta Selatan Dki Jakarta
communications, and power systems
Steel wires
481,663
481,663
10,500
70.00
818,205
90,143
63,100
Production and sale of cables and wires
11,656
11,656
1,050,000
70.00
12,690
5,705
3,994
Production and sale of nickel pig iron
1,509,171
1,509,171
500,000
50.00
2,381,125 2,598,802 1,128,008
Joint Success Enterprises
Vistra Corporate Services Centre Wickhams Cay II,
Investments
Limited
Road Town, Tortola, VG1110 British Virgin Islands
Chin-Xin Investment Co., Ltd. 26F., No. 1, Songzhi Rd., Xinyi District, Taipei City,
Taiwan, R.O.C.
Investments
1,164,273
1,164,273
36,058,184
49.05
5,175,692
(237,201 )
(115,394 )
2,237,969
2,237,969
179,468,270
37.00
8,011,194
528,594
195,580
Walsin Color Co., Ltd.
1F., No. 5, Ln. 199, Liaoning St. Zhongshan District,
Management of investments and
457,610
457,610
49,831,505
33.97
1,053,790
(17,475 )
(5,936 )
Taipei City 104105, Taiwan, R.O.C.
conglomerates
Concord II Venture Capital
4F., No. 76, Sec. 2, Dunhua S. Rd., Da’an District,
Venture capital and consulting affairs
257,860
257,860
26,670,699
26.67
174,332
(16,822 )
(4,486 )
Co., Ltd.
Taipei City 106,, R.O.C.
Winbond Electronics Corp. No. 8, Keya 1st Rd., Daya Township, Taichung County
428, Taiwan, R.O.C.
Research, development, production and
sale of semiconductors and related
components
7,429,920
7,429,920
883,848,423
22.21
18,357,864 13,594,643 2,984,304
Walton Advanced
Engineering, Inc.
No. 18, Yugang N. 1st Rd., Qianzhen District,
Production, sale, and testing of
1,185,854
1,185,854
109,628,376
21.01
2,322,664
219,897
46,403
Kaohsiung City 806, Taiwan, R.O.C.
semiconductors
Walsin Technology Corp.
24F., No. 1, Songzhi Rd., Xinyi District, Taipei City,
Production and sale of ceramic
1,649,039
1,649,039
88,902,325
18.30
8,166,415 7,931,941 1,450,358
Taiwan, R.O.C.
capacitors
Powertec Electrochemical
13 F, No. 337, Fuxing N. Rd., Songshan District, Taipei
Basic industrial chemical manufacturing
2,945,925
2,945,925
318,522,792
22.46
-
-
-
Corp.’s
City 105, Taiwan, R.O.C.
and energy technical services
Note: Due to adjustments in the investment structure of the Group, it was transferred from Concord Industries Limited to Walsin Lihwa Corporation.
3
7
7
3
7
8
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
INFORMATION ON INVESTMENTS IN MAINLAND CHINA
FOR THE YEAR ENDED DECEMBER 31, 2021
(In Thousands of New Taiwan Dollars, U.S. Dollars and Renminbi)
Walsin Lihwa Corporation
TABLE 9
3
7
8
A. 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:
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
o
n
Investee Company
Main Businesses and
Products
Total Amount of
Paid-in Capital
Jiangyin Walsin Steel
Cable Co., Ltd.
Manufacture and sale of
steel cables and wires
$
(US$
553,600
20,000)
Shanghai Walsin
Manufacture and sale of
cables and wires
(US$
432,555
15,627)
Manufacture and sale of
cables and wires
(US$
4,929,254
178,080)
Walsin (China)
Investments
(US$
2,175,648
78,600)
Manufacture and sale of
specialized steel tubes
(US$
2,684,960
97,000)
Manufacture and sale of
stainless steel
(US$
470,560
17,000)
(Note 7)
Lihwa Power Wire
& Cable Co., Ltd.
Hangzhou Walsin
Power Cable &
Wire Co., Ltd.
Investment Co.,
Ltd.
Changshu Walsin
Specialty Steel
Co., Ltd.
Shanghai Baihe
Walsin Lihwa
Specialty Steel
Co., Ltd.
Dongguan Walsin
Wire & Cable Co.,
Ltd.
Manufacture and sale of bare
copper cables and wires
(US$
719,680
26,000)
Jiangyin Walsin
Manufacture and sale of
Specialty Alloy
Materials Co., Ltd.
cold-rolled stainless steel
and flat rolled products
(US$
1,356,320
49,000)
XiAn Walsin Metal
Product Co., Ltd.
(Note 13)
Manufacture and sale of
specialized stainless steel
plates
(US$
1,532,088
55,350)
Yantai Walsin
Production and sale of
Stainless Steel Co.,
Ltd.
electronic components and
new alloy materials
(US$
9,274,599
335,065)
(Note 11)
Investment
Type
(Note 1)
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2021
Investment Flows
Outflow
Inflow
Accumulated
Outflow of
Investment from
Taiwan as of
December 31, 2021
Net Income
(Loss) of the
Investee
Percentage
of
Ownership
in
Investment
(%)
Investment Gain
(Loss)
(Note 16)
Carrying Amount
as of
December 31, 2021
Accumulated
Inward Remittance
of Earnings as of
December 31, 2021
b
b
b
b
b
b
b
b
b
b
$
$
(US$
(US$
(US$
(US$
(US$
(US$
(US$
(US$
720,815
26,041)
(Note 2)
413,982
14,956)
(Note 3)
2,335,638
84,380)
(Note 4)
2,175,648
78,600)
(Note 5)
2,684,960
97,000)
(Note 6)
1,079,520
39,000)
(Note 8)
719,680
26,000)
(Note 9)
1,356,320
49,000)
(Note 10)
(US$
834,552
30,150)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(US$
3,679,419
132,927)
(US$
2,214,400
80,000)
$
-
-
$
(US$
$
84,065
100.00
$
84,065
$
871,873
$
124,098
95.71
118,774
1,153,271
188,273
40.00
73,296
622,240
217,722
100.00
217,722
4,451,409
39,607
100.00
39,607
700,497
13,217
100.00
13,217
233,101
7,337
100.00
7,337
1,651,531
(1,462)
100.00
(1,462)
1,981,997
720,815
26,041)
(Note 2)
413,982
14,956)
(Note 3)
2,335,638
84,380)
(Note 4)
2,175,648
78,600)
(Note 5)
2,684,960
97,000)
(Note 6)
1,079,520
39,000)
(Note 8)
719,680
26,000)
(Note 9)
1,356,320
49,000)
(Note 10)
(US$
(US$
(US$
(US$
(US$
(US$
(US$
(US$
834,552
30,150)
(US$
5,893,819
212,927)
(14,119)
100.00
(14,119)
(766,837)
(260,618)
100.00
(260,618)
4,705,064
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(Continued)
Investee Company
Main Businesses and
Products
Total Amount of
Paid-in Capital
Changzhou China
Steel Precision
Materials Co., Ltd.
Melting and forging of
nonferrous metallic materials
and composites as well as
new types of alloys
$
(US$
1,206,848
43,600)
Nanjing Taiwan
Trade Mart
Management Co.,
Ltd.
Business and asset
management, consulting and
advertising services
(US$
27,680
1,000)
Shaanxi Tianhong
Polysilicon production
Silicon Industrial
Corporation
5,209,932
(RMB 1,200,000)
Jiangsu Taiwan Trade
Mart Development
Co., Ltd.
Development and management
of Nanjing Taiwan Trade
Mart Management Co., Ltd.
(RMB
43,416
10,000)
Communications equipment
and electronic components
675,541
(RMB 155,597)
Shaanxi Electronic
Group
Optoelectronics
Technology Co.,
Ltd. (Note 14)
Walsin (Nanjing)
Construction, rental and sale of
Development Co.,
Ltd.
buildings and industrial
factories
(US$
1,384,000
50,000)
Nanjing Walsin
Property
Management Co.,
Ltd.
Property management, business
management and housing
leasing
(RMB
4,342
1,000)
Walsin Nanjing
Organize culture and arts
Culture and Arts
Co., Ltd.
communication activity,
cultural performance, culture
and arts forwarding agency
(RMB
6,512
1,500)
b
b
b
b
b
b
b
b
Investment
Type
(Note 1)
Accumulated
Outflow of
Investment from
Taiwan as of
January 1, 2021
Investment Flows
Outflow
Inflow
Accumulated
Outflow of
Investment from
Taiwan as of
December 31, 2021
Net Income (Loss)
of the Investee
Percentage
of
Ownership
in
Investment
(%)
Investment Gain
(Loss)
(Note 16)
Carrying Amount
as of
December 31, 2021
Accumulated
Inward Remittance
of Earnings as of
December 31, 2021
$
(US$
362,054
13,080)
$
$
-
-
-
-
$
(US$
362,054
13,080)
$
210,875
30.00
$
63,264
$
441,125
$
(US$
844,794
30,520)
(US$
27,680
1,000)
(US$
-
-)
(US$
8,415
304)
RMB
-
-
(US$
1,378,464
49,800)
(Note 15)
RMB
RMB
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(US$
27,680
1,000)
(US$
-
-)
(US$
8,415
304)
RMB
-
-
(US$
1,378,464
49,800)
(Note 15)
RMB
RMB
-
-
-
-
15,963
100.00
15,963
(414,815)
(1,132,244)
19.00
-
-
(Note 12)
456
20.00
91
9,326
11,768
6.02
-
74,849
(234,792)
99.60
(233,859)
9,607,206
(6,073)
99.60
(6,049)
(5,206)
8,676
99.60
8,643
-
-
-
-
-
-
-
-
(Continued)
B. The upper limit on investment of WLC in mainland China was as follows:
Accumulated Investment in Mainland China as of
December 31, 2021
(NT$ and US$ in Thousands)
Investment Amounts Authorized by the
Investment Commission, MOEA
(NT$ and US$ in Thousands)
$
(US$
17,817,284
643,688)
$
(US$
17,646,969
637,535)
Upper Limit on Investment
(NT$ in Thousands)
N/A (Note 19)
3
7
9
i
F
n
a
n
c
a
i
l
I
f
n
o
r
m
a
t
i
o
n
3
8
0
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$15,000 thousand investment through Walsin (China) Investment Co., Ltd.
3. Including US$14,950 thousand investment through Walsin (China) Investment Co., Ltd.
3
8
0
4. Including US$13,300 thousand investment through Walsin (China) Investment Co., Ltd., US$53,000 thousand investment through Ace Result Global 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$20,000 thousand 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 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$32,927 thousand investment through Yantai Huanghai Iron and Steel Co., Ltd. and Yantai Dazhong Recycling Resource Co., Ltd. which were merged.
12. The amount was adjusted by the capital of XiAn Lv Jing Technology Co., Ltd. of RMB228,000 thousand and by the fair value.
13. XiAn Walsin Metal Product Co., Ltd. merged XiAn Lv Jing Technology Co., Ltd. and XiAn Walsin Opto-electronic Limited.
14. Shaanxi Electronic Group Optoelectronics Technology Co., Ltd. was formerly known as Shaanxi Optoelectronics Technology Co., Ltd.
15 The amount included investment through Joint Success Enterprise Limited approved in the previous years.
16. Amounts are stated in thousands of New Taiwan dollars, except those stated in thousands of U.S. dollars and renminbi.
17. The currency exchange rates as of December 31, 2021 were as follows: US$ to NT$ = 1:27.68, RMB to NT$ = 1:4.34161. The average exchange rates of December 31, 2021 were as follows: US$ to NT$ = 1:27.976, RMB to NT$ = 1:4.33908.
18. Amount was recognized based on audited financial statements.
19. Upper limit on investment:
WLC was approved as the operation headquarters 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)
C. Significant direct or indirect transactions between the Company and investees in mainland China
(In Thousands of New Taiwan Dollars)
Related Party
Nature of
Relationship
Transaction
Type
Amount
% to Total
Dongguan Walsin Wire &
100% indirectly owned
Sales
$ (2,773,189)
(2)
Cable Co., Ltd.
subsidiary
Jiangyin Walsin Specialty
100% indirectly owned
Sales
(668,583)
(1)
Alloy Materials Co., Ltd.
subsidiary
Changshu Walsin Specialty
100% indirectly owned
Sales
(595,996)
(1)
Steel Co., Ltd.
subsidiary
Shanghai Walsin Lihwa
100% indirectly owned
Sales
(18,689)
Power Wire & Cable Co.,
Ltd.
subsidiary
Yantai Walsin Stainless
100% indirectly owned
Sales
(7,723)
Steel Co., Ltd.
subsidiary
-
-
Transaction terms
Unit Price
Payment Terms
Notes/Accounts Payable or
Receivable
Ending Balance
% to Total
Compare to
General
Transactions
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
$
81,510
Similar
245,996
Similar
281,518
Similar
4,515
Similar
-
2
5
5
-
-
Unrealized Loss
$
-
(4,734)
(11,732)
-
-
(Concluded)
3
8
1
Financial Information
TABLE 10
WALSIN LIHWA CORPORATION AND SUBSIDIARIES
INFORMATION OF MAJOR SHAREHOLDERS
DECEMBER 31, 2021
Name of Major Shareholder
Shares
Number of
Shares
Percentage of
Ownership (%)
LGT Bank (Singapore) Investment Fund under the custody of
251,504,000
Standard Chartered
Winbond Electronics Corp.
Chin-Xin Investment Co., Ltd.
Teco Electric & Machinery Co., Ltd.
222,000,000
220,011,000
205,332,690
7.32
6.46
6.41
5.98
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
2020
2021
Unit: NT$ Thousands
Difference
Amount
％
56,176,808
69,320,640
13,143,832
23.40
34,294,221
41,474,488
7,180,267
175,000
173,430
(1,570)
60,917,977
72,066,340
11,148,363
151,564,006
183,034,898
31,470,892
31,458,157
32,825,019
64,283,176
32,260,002
15,690,406
36,330,187
38,852,513
36,236,117
75,088,630
34,313,329
18,440,875
47,787,207
7,394,356
3,411,098
10,805,454
2,053,327
2,750,469
11,457,020
20.94
(0.90)
18.30
20.76
23.51
10.39
16.81
6.36
17.53
31.54
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
Note: The reasons, effects and future plans about that changes in assets, liabilities and equity which over 20% or NT$10
million in last two years:
1. Reasons:
A. Compared to 2020, current assets show an increase in 2021 due to the increase of accounts receivable and
inventories in 2021.
B. Compared to 2020, property, plant ,and equipment show an increase in 2021 because WLC built new
factories and purchased machine equipment in 2021.
C. Compared to 2020, other assets show an increase in 2021 due to the acquierments of corporate bonds,
shares of Teco Electric & Machinery Co., Ltd. and the increase of the recognition amounts of investments
accounted for using the equity method in 2021.
D. Compared to 2020, current liabilities show an increase in 2021 due to the increase of the long-term
borrowings due within one year in 2020.
E. Compared to 2020, retained earnings show an increase in 2021 due to the increase of the net profit for the
year ended December 31, 2021.
2. Effects: None.
3. Future plans: Keep working on managing working capital and asset and liability structure.
383
Review of Financial Conditions, Financial Performance, and Risk Management
2.
Financial Performance - Consolidated (Based on IFRSs)
Items
Year
2020
2021
Operating Revenue
112,546,603
156,664,766
Unit: NT$ Thousands
Difference
Amount
％
Operating Costs
Gross Profit
Operating Expense
Profit from Operations
Non-operating Revenue
and Expense
Profit before Taxes
Tax Expense
Net Income
100,078,265
136,855,301
12,468,338
19,809,465
5,083,276
7,385,062
6,463,913
13,345,552
44,118,163
36,777,036
7,341,127
1,380,637
5,960,490
1,865,603
5,776,946
3,911,343
9,250,665
2,244,864
7,005,801
19,122,498
3,865,184
15,257,314
9,871,833
1,620,320
8,251,513
39.20
36.75
58.88
27.16
80.71
209.66
106.71
72.18
117.78
I.
The variance analysis in last two years:(Variable proportion over 20%)
1. In 2021, operating costs increased by 441 billion. Although the stainless steel and wire and cable business was
faced with sharp fluctuations in the supply and demand of raw materials in the market, the sales figures of
each business unit increased due to the effective controll of the procurement of material sources, timely
adjustment of production capacity and accurate delivery in response to customers’ needs. In 2021, the nickel
ferrous factory and power plant also achieved full production and full sales, resulting in a substantial increase
in the company's operating income by 39% over the previous year.
2. In 2021, gross profit increased by 73 billion. In response to the increase in sales volume, the stainless steel and
wire and cable business units effectively improved the capacity utilization rate and controlled the cost. Gross
profit was better than the previous year.
3. In 2021, operating expenses increased. In addition to the corresponding increase in operating income, also
includes the substantial increase in transportation costs due to the epidemic.
4. In 2021, the increase in non-operating income and expense was mainly due to the increase in equity method
income.
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
Nickel Pig Iron
236,015
52,453
85,072
483,996
350,000
18,000
40,000
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
11,944,408
1,316,155
(985,974)
(2,279,516)
392,508
10,387,581
Analysis of change in cash flow in the current year:
1.The inflows of net cash generated by operating activities were due to the profit of the year.
2.The outflows of net cash used in investing activities were due to the purchase of property, plant, and
equipment.
3.The outflows of net cash generated by financing activities were due to the acquisition of equity in subsidiaries.
4.The outflows of net cash in the year was NT$ 1,556,827 thousand and the ending balance of cash was NT$
10,387,581 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
10,387,581
17,844,066
(15,156,809)
(4,985,059)
0
8,089,778
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 cost of No. 1 Building of Lot AB and Phase III under Nanjing
Construction Co., Ltd.
3.The outflows of net cash used in financing activities due to repayment of borrowings and payment of
dividends.
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:
Unit: NT$ Million
Actual or
Estimated
Completion
Date
Investment
Actual or Expected Status of Spending
2018
2019
2021
2022
2022
October 2023
8,288
53
594
1,525
4,476
1,640
December 2023
3,156
-
-
83
2,792
281
December 2021
9,667
-
6,851
2,576
240
-
August 2023
5,407
-
27
484
2,638
2,258
Project
Source of
Funds
HR Coil Project of Yantai
Plant
Working
Capital
Cold Finished Bar Project
of Yantai Plant
Working
Capital
The establishment of
nickel pig iron plant
Working
Capital
The establishment of
high-efficiency factories
Working
Capital
(2) Estimated Benefits:
1. The establishment of steel rolling and cold finished factories of Yantai Plant will help expand
economies of scale and improve product quality to meet the needs 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 2021, the gains for affiliated enterprises recognized by equity method
was NT$4.808 billion, as a result of the overall booming market conditions in the semiconductor
industry and the improvement in the profitability of affiliated enterprises recognized under the
equity method compared to 2020.
(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 2021 was approximately
NT$326 million, accounting for merely 0.21%
of the Company's net operating revenues;
therefore, the change in interest rates does
not yet have a significant impact on the
profit or loss of the Company and its
subsidiaries.
Foreign exchange loss for 2021 were
approximately NT$46 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.
The Company will plan and execute plans for
funding sources and costs based on business
development and needs.
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”.
387
Review of Financial Conditions, Financial Performance, and Risk Management
(4) Major Changes in Domestic and Foreign Government Policies and Laws and Impact on the Company’s
Finances and Business: None
(5)
Impact of Recent Technological and Market Changes on the Company's Finances and Business, and
Countermeasures:
To achieve the goal of Smart Manufacturing, 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.
Global pandemic prevention has made remote work the "new normal", thus providing a new channel
for hacker attacks. In order to prevent theft and destruction of sensitive data of the Company, which
may affect its industrial productivity and damage corporate image, Walsin has strengthened its
identity authentication mechanism for remote work and enhanced the protection of external services
in response to this new type of risk.
(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
2021
2020
Current ratio Current assets / Current liabilities
>=100%
178.42%
178.57%
Debt ratio
Net liabilities (Total liabilities - Cash
and cash equivalents) / Tangible assets
<=120%
60.03%
60.09%
Interest
coverage ratio
Tangible net
value
(Net income before income tax,
depreciation, amortization and interest
>=150%
5,352.60%
2,265.19%
expense / Current interest expense
Shareholders' equity - Intangible assets >=NT$55 billion
NT$107.8
billion
NT$87.1 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/loss before tax
＋depreciation +
amortization + interest
expenses
2021
15.63%
2020
8.44%
NT$22,371
million
NT$12,232
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 2021/12/31)
Walsin Lihwa Corporation
Walsin Lihwa Holdings Limited
(Please refer to the below chart for its re-invested companies)
Concord Industries Limited
(Please refer to the below chart for its re-invested companies)
Chin-Cherng Construction Co.
Walsin Info-Electric Corp.
Min Maw Precision Industry Corp.
Waltuo Green Resouces Corp.
P.T. Walsin Lippo Industries
Walsin Precision Technology Sdn. Bhd.
Walsin (Nanjing)
Development Limited
Nanjing Walsin Property
Management Co., Ltd
2. Affiliated Organization Chart of Walsin Lihwa Holdings Limited and Concord Industries Limited (as of
2021/12/31)
Walsin Lihwa Corporation
Walsin Lihwa Holdings Limited
Walsin (China) Investment Co., Ltd.
Dongguan Walsin Wire & Cable Co., Ltd.
Jiangyin Walsin Steel Cable Co., Ltd.
Shanghai Walsin Lihwa Power
Wire & Cable Co., Ltd.
Walsin International
Investment Limited
Nanjing Taiwan Trade Mart
Management Co., Ltd.
(Such company is not incorporated in the consolidated financial statements
of the Company's affiliates because it does not have any substantive control
over it)
Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
Concord Industries Limited
Yantai Walsin Stainless Steel Co., Ltd.
Walsin Specialty Steel Corp.
Shanghai Baihe Walsin Lihwa Specialty Steel
Co., Ltd.
Changshu Walsin Specialty Steel Co., Ltd.
XiAn Walsin Metal Product Co., Ltd.
390
100%18.37%100%81.63%73.49%65%(因本公司對該公司無實質控制力，故不列入關係企業合併財務報表中)100%34.71%100%100%100%華新麗華股份有限公司華新麗華控股有限公司(Walsin Lihwa Holdings Limited)95.71%上海華新麗華電力電纜有限公司100%華新(中國)投資有限公司100%東莞華新電線電纜有限公司100%江陰華新鋼纜有限公司江陰華新特殊合金材料有限公司華新國際投資有限公司(Walsin International Investments Limited)Borrego Solar Systems, Inc.100%常熟華新特殊鋼有限公司Walcom Chemicals Industrial Limited南京台灣名品城管理有限公司華新特殊鋼控股有限公司(Concord Industries Ltd.)65.29%煙台華新不銹鋼有限公司100%西安華新金屬製品有限公司華新特殊鋼有限公司上海白鶴華新麗華特殊鋼製品有限公司100%100%100%99.22%50.95%100%100%49.05%99.51%100%100%70%70%100%42%50%100%華新麗華股份有限公司華新麗華控股有限公司 (旗下轉投資公司見下圖)華新特殊鋼控股有限公司 (旗下轉投資公司見下圖)Ace Result Global Limited金澄建設股份有限公司Joint Success Enterprises Limited華新(南京)置業開發有限公司PT Walsin Nickel Industrial Indonesia南京華新物業管理有限公司華新電通股份有限公司銘懋工業股份有限公司華新精密科技有限公司華拓綠資源股份有限公司華新力寶工業公司 P.T. Walsin Lippo KabelNew Hono Investment Pte. Ltd.
(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: 1,000 NTD/USD/RMB/HKD
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
473,730
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
Borrego Solar Systems,
Inc.
Walcom Chemicals
Industrial Limited
1993/12/02
2002/03/01
1988/12/29
No. 680, Meijing West Road, Dalang Town,
Dongguan, Guangdong
No. 679 Binjiang Road (West), Binjiang
Economic & Technology Development
Zone, Jiangyin, Jiangsu
Room 1102, Level 11, Lee Garden One, 33
Hysan Avenue, Causeway Bay, 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 4,653,371 Investments.
USD
16,651
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
317,505 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
335,065
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
in the import and export of steel
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
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.
USD
55,350
Production and sale of medium
and heavy specialized stainless
steel plates; sale of its own
products.
USD
44, 739
Investment holding.
NTD 5, 820,994
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 Info-Electric Corp.
1995/6/21
25F., No. 1, Songzhi Rd., Xinyi Dist., Taipei
City, Taiwan
NTD
96,000
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
Solar engineering, mechanical
and electrical engineering, and
power engineering.
Min Maw Precision
Industry Corp.
1980/10/17
25F., No. 1, Songzhi Rd., Xinyi Dist., Taipei
City, Taiwan
NTD
299,958 Solar power.
Waltuo Green Resources
Corporation
2018/06/06
No. 47, Bade Rd., Yanshui Dist., Tainan
City 737, Taiwan
NTD
10,000
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
New Hono Investment Pte.
Ltd.
2019/12/03
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 IMIP, Jalan Batu Mulia 8, RT. 007
RW. 007, Meruya Utara Kembangan, Kota
Adm. Jakarta Barat DKI Jakarta 11620,
Indonesia
5001 Beach Road #07-37 Golden Mile
Complex Singapore (199588)
USD
15,000 Steel wires.
USD
1,500 Power cables.
USD
100,000
Non-ferrous base metal (nickel
pig iron) manufacturing and
power plant.
USD
42,000 Investment holding.
(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 2021.12.31)
No. of Share: Share/1000 USD/ 1000RMB
Shareholding(contribution)
Entity
Title
Name of the Representation
Walsin Lihwa Holdings
Limited
Director
Representative of Walsin Lihwa Corporation: Yu-Lon Chiao,
Patricia Chiao, Sophi Pan
Walsin (China)
Investment Co., Ltd.
Chairman
Jian-Hua Cao
General manager Fred Pan
Shanghai Walsin Lihwa
Power Wire & Cable
Co., Ltd.
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
Vice Chairman
Cheng Hang
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
& Cable Co., Ltd.
Chairman
Witty Liao
General manager Chang-Ming Wu
Jiangyin Walsin Steel
Cable Co., Limited
(JHS)
Walsin International
Investments Limited
Borrego Solar Systems,
Inc.
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
Chairman
Witty Liao
Vice Chairman
Lu Lu
Director
Supervisor
Director
President
Director
Director
Director
CEO
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
Representative of Walsin Lihwa Holdings Limited: Yu-Lon
Chiao, Justin Wong, Sophi Pan
Aaron Stephen Hall
Michael Adam Hall
Michael Adam Hall
Shares
Holding
473,730,393
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%
4,653,371,702
100.00%
0
0.00%
1,460,458
73.49%
154,774
92,587
92,587
7.79%
4.66%
4.66%
393
Special Disclosures
Entity
Title
Name of the Representation
Walcom Chemicals
Industrial Limited
Nanjing Taiwan Trade
Mart Management
Co., Ltd.
Director
Director
Director
Chairman
Hao Chi
Qi-Ying Liang
Yong-Taig Chen
Tzu-Yi Chiao
General manager Min Zhou
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
Shareholding(contribution)
Shares
Holding
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
317,505,180
100.00%
100.00%
101,400,000
100.00%
Shanghai Baihe Walsin
Lihwa Specialty Steel
Co., Ltd.
Changshu Walsin
Specialty Steel Co.,
Ltd.
Yantai Walsin Stainless
Steel Co., Ltd.
Chairman
C.C. Chen
General manager Horng-Sheng Sheu
Director
Supervisor
Representative of Walsin Specialty Steel Corp.: C.C. Chen,
Tain-Rong Chen, Allen Yang
Representative of Walsin Specialty Steel Corp: Nora Lin
Chairman
General manager Pei-Yuan Sun
Witty Liao
Director
Supervisor
Chairman
Representative of Walsin Specialty Steel Corp: Witty Liao, Pei-
Yuan Sun, Sherry Ho
Representative of Walsin Specialty Steel Corp: Richard Wu
Witty Liao
General manager Nora Lin
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%
34.71%
65.29%
34.71%
Director
Director
Supervisor
Representative of Jiangyin Walsin Specialty Alloy Materials
Co., Ltd.: Witty Liao, Nora Lin
USD
116,313
Representative of Concord Industries Limited: Allen Yang
USD
218,752
Representative of Jiangyin Walsin Specialty Alloy Materials
Co., Ltd.: Richard Wu
USD
116,313
Jiangyin Walsin
Specialty Alloy
Materials Co., Ltd.
Chairman
Kevin Niu
General manager Chao-Yang Cheng
Director
Supervisor
Representatives of Concord Industries Limited/ Walsin (China)
Investment Co., Ltd.: Kevin Niu, Allen Yang, Nora Lin
Representative of Concord Industries Limited/ Walsin (China)
Investment Co., Ltd.: Richard Wu
Walsin Precision
Technology Sdn. Bhd
Chairman
Juei-Lung Chen
General manager Pang Boon Wah
Director
Representatives of Walsin Lihwa Corporation: Juei-Lung Chen,
Pang Boon Wah, Josh Chia, Goh Lay Hong
XiAn Walsin Metal
Product Co., Ltd.
Nora Lin
General manager Nora Lin
Chairman
Director
Representative of Concord Industries Limited: Nora Lin, Lei
Chen, Allen Yang
Supervisor
Representative of Concord Industries Limited: Sophi Pan
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
Ace Result Global
Limited
Chin-Cherng
Construction Co.
Joint Success
Enterprises Limited
394
USD
USD
USD
0
0
0.00%
0.00%
49,000 100.00%
USD
49,000 100.00%
0
0
0.00%
0.00%
32,178,385
100.00%
USD
USD
USD
USD
0
0
0.00%
0.00%
55,350
100.00%
55,350
100.00%
44,739,988 100.00%
439,894
0
577,583,403
0.08%
0.00%
99.22%
0
0.00%
37,461,816
50.95%
Entity
Title
Name of the Representation
Walsin (Nanjing)
Construction Limited
Chairman
Jian-Hua Cao
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 Info-Electric
Corp.
Chairman
David Wen
General manager Yu-Min Lin
Min Maw Precision
Industry Corp.
Walton Advanced
Engineering, Inc.
P.T. Walsin Lippo
Industries
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
General manager Kuo-Hui Chen
Representative of Walsin Lihwa Corporation: David Wen, Kuo-
Hui Chen, Allen Yang
Representative of Walsin Lihwa Corporation: Sophi Pan
Representative of P.T. Multi Prima Sejahtera, Tbk,: Rudy
Nanggulangi
Director
Supervisor
President
Commissioner
Vice President
Commissioner
Shareholding(contribution)
Shares
Holding
USD
USD
USD
USD
0
0
0
0.00%
0.00%
0.00%
50,000
100.00%
USD
50,000
100.00%
RMB
RMB
RMB
0
0
0.00%
0.00%
1,000
100.00%
RMB
1,000
100.00%
0
0
0.00%
0.00%
9,491,461
98.87%
0
0
0.00%
0.00%
0
0.00%
29,995,859 100.00%
29,995,859 100.00%
0.00%
0
0
0.00%
1,000,000 100.00%
1,000,000 100.00%
4,500
30.00%
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
Kabel
President
Commissioner
Representative of P.T. Multi Prima Sejahtera, Tbk,: Rudy
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
Director
Representative of P.T. Multi Prima Sejahtera, Tbk,: Hery
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%
New Hono Investment
Pte. Ltd.
Representatives of Walsin Lihwa Corporation: Josh Chia,
Richard Wu, Oh Wei Kiat
42,000,000
100.00%
Director
PT Walsin Nickel
Industrial Indonesia
President
Commissioner
Representative of Walsin Lihwa Corporation: Sherry Ho
500,000
50.00%
395
Special Disclosures
Entity
Title
Name of the Representation
Commissioner
Representative of Perlux Investment Pte. Ltd.: Hsiung-Feng
Mei
President Director Representative of Walsin Lihwa Corporation: Josh Chia
Director
Director
Director
Representative of Perlux Investment Pte. Ltd.: Chi-Chun Lin
Representative of New Hono Investment Pte. Ltd.: Hueiping
Lo
Representative of Walsin Lihwa Corporation: C.C. Chen,
Ardinand Roynald P.
(6) Operating Condition of the Affiliated Companies
Entity
Capital
Stock
Total
Assets
Total
Liabilities
Net Worth
Sales
Shareholding(contribution)
Shares
Holding
80,000
8.00%
500,000
50.00%
80,000
8.00%
420,000
42.00%
500,000
50.00%
Operating
Income
(loss)
Unit: NT$ thousands
Earnings
(Loss)
Per
Share
(NT$)
Net
Income
(loss)
Walsin Lihwa Corporation
34,313,329 164,679,979 58,796,455 105,883,524 97,789,648 10,197,929
14,642,62
9
Walsin Lihwa Holdings Limited (Note 1)
The
Subsidiaries of
Walsin Lihwa
Holdings
Limited
819,700
432,555 2,024,662
13,112,846 35,179,575 7,145,587
Walsin (China) Investment Co., Ltd. 2,175,648 20,115,791 15,664,381
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
460,900 8,293,882 3,847,131
719,680 4,718,913 3,067,382
553,600 2,610,749 1,738,876
16,514,817 18,322,449
479,982
27,680
68,701
15,934
65,163
1,775
1
28,033,988 41,140,523 1,173,695 1,081,312
4,451,410
33,762
(51,028)
217,722
1,204,962 4,044,166
148,774 124,098
1,651,531 18,631,372
(78,550)
7,337
N/A
871,873 2,118,547
39,134
84,065
N/A
18,306,515
0
(21,296)
222,439
N/A
4,446,751 16,291,761 1,140,978 875,401
440.50
(414,819)
248,391
(4,257)
15,963
N/A
(68,700)
0
(24)
(24)
Concord Industries Limited (Note 2)
8,788,538 15,447,136 9,729,583
5,717,553 11,723,148
(86,478) (162,677)
The
Subsidiaries
of Concord
Industries
Limited
Jiangyin Walsin Specialty Alloy
Materials Co., Ltd.
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.
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.
Walsin Info-Electric Corp.
Min Maw Precision Industry Corp.
Waltuo Green Resources Corp.
P.T. Walsin Lippo Industries
Walsin Precision Technology Sdn. Bhd.
Ace Result Global Limited
P.T. Walsin Lippo Kabel
New Hono Investment Pte. Ltd.
1,356,320 3,666,507 1,684,510
1,981,997 1,764,899
11,568
(1,462)
2,806,752 1,016,827
586
1,016,241
0
(52)
51,770
2,684,960 3,389,899 2,689,397
700,502 2,602,281
12,505
39,607
470,560
236,705
3,604
233,101
191
1,510
13,217
9,274,599 9,454,273 4,749,209
4,705,064 9,456,352
(175,820) (260,618)
767,006
1,532,088
5,820,994 19,348,311 7,872,440
169
(766,837)
11,475,871
0
988,639
(3,632)
(14,119)
(293,470) (108,838)
N/A
(0.19)
2,035,034 10,454,015
102,840
10,351,175
0
(1,241) (237,201)
1,384,000 18,243,306 8,597,768
9,645,538
870,450
(287,451) (234,792)
4,342
37,763
42,991
(5,228)
95,061
(11,698)
(6,073)
N/A
N/A
N/A
0
0
0
0
325
(1,245)
8,676
N/A
300,000
299,959
339,437
823,004
22,238
10,000
415,200 1,388,560
234,450
1,238,403
609,841
383,633
41,520
18,156
1,162,560 2,227,440
2,414
457,301
3,034
219,697
161,878
0
337,023
365,703
19,204
1,168,863
447,963
383,633
0
65,380
19,401
837,933
674,098
0
(8,207)
40,335
(4,767)
31,059
(0.16)
1.04
12,714
114,419
10.37
10,366
90,143 6,009.53
50,424
(52)
47,066
46,062
N/A
N/A
27
(277)
18,129
2,227,717
0
0
(1,013)
(57)
5,705
953,732
3.80
22.71
4.27
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
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 assets, liabilities and net income of Chin-Cherng Construction Co. include the subsidiaries’.
Note 4: Earnings (loss) per share is calculated by dividing the net income attributable to the parent company by the weighted-average number of shares
2,768,000 14,285,952 8,982,907
5,303,045 7,251,575 2,655,930 2,598,802 2,598.80
outstanding for the year.
Note 5: The currency exchange rate was as follows:
2021/12/31 US$/NT$=1: 27.680 （exchange rate for profit/loss entries: US$/NT$ =1: 27.976）
2021/12/31 RMB/NT$=1: 4.34161（exchange rate for profit/loss entries: RMB/NT$=1: 4.33908）
396
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
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