EVEREST TEXTILE CO., LTD
2020 Annual General Shareholders’ Meeting Date:Monday, 15 June 2020
Time:9:00 a.m. Taipei time
Place:No. 261 Nanmen Road, Tainan City(The Conference Hall on 1F of the Labor Recreational Center)
Meeting Agenda
Call the meeting to order
Chairperson takes chair
Chairperson remarks
Reporting Items
1、2019 Business Report
2、2019 Financial Statements
3、The Audit Committee’s review report on 2019 Business Report and
Financial Statements
4、To report amendments on the “Best Practice Principles of Ethical Corporate
Management” for Everest Textile CO.,LTD
Approval Items
1、To accept 2019 business report and financial statements
2、To approve the proposal for distribution of 2019 profits
Discussion Items
1、To amend the Articles of Incorporation of Everest Textile CO.,LTD
2、To amend the company bylaw of “Meeting Rules of Stockholders” of
Everest Textile CO., LTD
Extemporary Motions
Meeting adjourned
Contents
Reporting Items
1. 2019 Business Report .............................................................................................. 1
2. 2019 Financial Statements ....................................................................................... 6
3. The Audit Committee’s review report on 2019 Business Report and
Financial Statements .............................................................................................. 31
4. To report amendments on the “Best Practice Principles of Ethical
Corporate Management” for Everest Textile CO., LTD ....................................... 32
Approval Items
1. To accept 2019 business report and financial statements ...................................... 36
2. To approve the proposal for distribution of 2019 profits ...................................... 37
Discussion Items
1. To amend the Articles of Incorporation of Everest Textile CO., LTD .................. 38
2. To amend the company bylaw of “Meeting Rules of Stockholders” of
Everest Textile CO., LTD ...................................................................................... 40
Extemporary Motions
Rules and Bylaws
Articles of Incorporation of Everest Textile CO., LTD ................................................. 43
Meeting Rules of Stockholders for Everest Textile CO., LTD ..................................... 49
Appendix
Current Shareholding of Directors................................................................................. 53
Impact of the Stock Dividend Distribution on Operating Results, EPS and
Shareholders’ Return on Investment ............................................................................. 53
Reporting items
1. 2019 Business Report
A、Foreword
Global economic growth in 2019 stayed in a low situation, mainly due to the slowdown in
economic growth in the United States and China, weak economic performance in emerging
markets, the continued continuation of the US-China trade war; But the Fed in response to the
global economic slowdown, not only to stop the original start of the interest rate hike cycle, in
early March 2020 in response to the global spread of the new coronavirus pneumonia
epidemic(COVID-19), the financial markets of various countries experienced intense shocks,
prompting the Federal Reserve on March 16 to cut interest rates by another 4 yards to 0% to
0.25%, the market forecast of zero interest rates in the United States, which is showing the
Fed's economic prospects deepening doubts. In the domestic boom part, although benefiting
from the US-China trade turnover effect, Taiwan has so far been barred from entering two
neighboring regional trade agreements: CPTPP and RCEP. Taiwan enterprises are highly
dependent on the U.S. and European markets, will be highly challenged by china, Japan and
South Korea and other rivals.
Everest Textile looks into the future, will strengthen vertical integration of upstream and
downstream supply chain. In the face of the COVID-19 outbreak, it has a major impact on the
world's major industrial supply chains. It affects February start rate of Everest Textile
Shanghai plant due to work start date deferred and personnel self-isolation and other policies.
Since the whole plant appropriate plan on resuming work, in March Shanghai plant was back
in fully normalized production. However, due to the rapid spread of COVID-19 from China to
Italy, Iran, and even Europe, Americas etc, the main brand customer markets have been
affected, resulting in the stagnation of the consumer market, the global economy has a huge
impact. Everest Textile in Asia, the Americas, Africa, respectively set up fabric factory and
garment factory, has been through the brand customer inspection plant, with a large number of
orders. Ethiopia and Haiti have zero tariff advantages, can quickly elastic in response to the
scheduling of production areas and production capacity supply, short-chain decentralized
production, will be the best partner of global brand customers. In response to major changes in
the global economy, Everest Textile will invest prudently and conservatively, expand refined
production and increase productivity to reduce operating costs and focus on cash flow in
response to the challenges of global deflation;
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B、Operating Results
Everest Textile consolidated revenue in 2019 was TWD 8.86 billion, down 5.76% from 2018.
Net loss was TWD272 million, and EPS was -0.56, mainly from profit to loss Department in
the face of low-cost competition in Southeast Asia, the decline in revenue led to a decrease in
gross margin, operating expenses rate also due to support the expansion of overseas three
factories increased operations, and overseas three new plants in the initial stage of operation,
the marketing system is still weak, orders are insufficient, capacity efficiency has yet to be
improved, so the overall operating performance did not meet the target. However, with the
overseas new three factories have entered the production operation stage, the company to
develop a human development strategy, the use of multi-leap ingress, expand sales and
research and development related personnel, actively develop and receive orders, expand new
market development, and establish a new operating model of e-commerce platform, in
response to this wave of global economic crisis.
C、2019 Goals and Future Prospects
Looking ahead to 2020, the increasing conflict of US-China trade war, oil war caused by
Saudi Arabia and Russia, as well as the spread of the COVID-19 around the world, will affect
the uncertainty and direction of the global economic. Countries of the world locked economy,
has caused the decline of GDP and consumer market stagnation, governments reducing
interest rates, tax cuts and subsidies. How quickly the outbreak of COVID-19 can be
controlled, there is still a great deal of uncertainty. Global economic growth is expected to
remain weak in 2020. Everest Textile is in the face of this wave of outbreaks caused by highly
uncertain market and competition. Only in the spirit of focus on the innovative energy of
research and development, strengthen the production of the industry, reduce the strength of the
operating costs, and maintain the strength and cash. We need to be very cautious in the face of
this severe global financial crisis. By the U.S.-China trade war and COVID-19 transfer effect,
government industrial transformation policy, smart and efficient computing and other
emerging technology continued to spread, Everest Textile uphold the spirit of "Smart Everest
and Sustainable Innovation", with "Humanities x Science" research and development strategy,
combined with trends and cooperation with brand customers, with the global layout of
one-stop full-value innovation services, and constantly provide multi-functional, sustainable
environmental protection fabrics and related garment innovative products and integration
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services. Make good use of existing core technology alliances with different industries,
transition to industrial textiles, choose to match different materials and Everest Textile long
fiber, short fiber, knitting elasticity and special finishing fit technology, and increase the use
of cross-industry market fabrics. In 2020, we will expand its production, combining with the
Global Apparel Research Center to provide ODM creative design services from fabric to
garment, and inject new growth momentum into the six factories around the world.
Growth Momentum One: From Athleisure (Sports Leisure) Products To Lifestyle
Products
Based on market trends as the main axis, Everest Textile extends from functional fabrics to
life-oriented product design, understanding the needs of consumers "clothing", and then
develop more about work, leisure, yoga, jogging ... such as multi-functional products. Its
product plan is as follows:
1. Ever Dura-Fila:
Emphasize the same level of wear-resistant features as Cordura products, and with elastic
functions, not only wear comfortable and environmentally friendly non-fluorine water-dial
function, but also be suitable for all-weather wear, protecting human safety and protecting the
earth's sustainability.
2. Ever E-2000 (Eco-made):
With environmentally friendly materials for the idea, coupled with the macro-far false
technology, emphasizing the T-400 mechanical bullet has excellent elastic response rate, and
has a soft imitation cotton feel of the touch, and also be suitable for the four seasons to wear.
Its imitation fur special feel, suitable for the upper body and lower body fabric, which is
Everest’s popular commodity.
3. Eever woven fleece-long pile :
The use of Everest Textile yarn dyeing technology, redefine soft shell products, with a
fashionable and popular appearance, plus four-sided elastic design and the back of the tissue
plush warm. It is suitable for autumn and winter season, different from the existing fit cloth
species. It attracts the eyes of consumers, which is the main innovation products of Everest
Textile.
Growth Momentum II: Transforming to Industrials Textiles
In 2016-2020, the consumption of fiber for industrial textiles (including vehicles, marine,
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construction, medical and health and sports) will exceed the consumption of clothing textiles.
Industrial textiles have become high-tech and many intellectual property rights as the main
competitive industry. Everest Textile uses technology platforms to import smart and flame
retardant materials, integrating existing fabric design and post-processing core technologies,
jumping into new areas of knowledge to enter the market, and develop products such as Ever
FR Work, MedWear, Ever Film and more items. The plan will be based on expanding
partnerships with ecosystems, jointly developing new product services and new business
models, and actively participating in the promotion.
Growth Momentum III: Garment production in Ethiopian Plant and Haiti Plant is
gradually in mass production orders
In the face of the US-China trade war and the outbreak of COVID-19, resulting in the
reconstruction of global supply chain. The regional economy will temporarily replace the
global mechanism of the situation. Everest Textile & Apparel integration of the global six
factories geographical and its regional economic advantages can work together with third
parties, to localize the regional supply chain to break the impact of COVID-19; Everest
Textile with high-functional series of environmental protection products, integrated global
layout advantages, can provide global customers to respond quickly to market demand, turn
the crisis into a turning point, and create irreplaceable value:
1、Increase capacity efficiency and expand cost advantages: Create smart garment factories, by
using automated production lines, de-skills to multiply efficiency, expand the production
capacity of the cable plant and the Haitian plant to reduce production costs, and provide
customer advantage costs and services.
2、Combined with the expansion of fabric business to garment services and orders, the period
to make self-use cloth to more than 50%, the integration of the main sub-material
development and design of the printing team, the development of a series of sample clothing
and masks, protective clothing, to provide customers with higher value, increase the profits of
garments.
3、Making good use of zero-tariff advantages, expanding the European, American Japanese,
and Thailand market: In the post-globalization time, we have layout of the world close to the
market. By using of North Carolina and three Asian fabric factories, with Haiti and Ethiopia
garment factories to Europe, USA and Japan zero tariff advantage, expanding the fabric and
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garment market.
D、In conclusion
In 2019, after a turbulent global political and economic situation, the operating performance
failed to meet the targets, coupled with the high investment and operating costs of the new
three plants: US dyeing plant, Ethiopian garment factory, and Haitian garment factory. In the
beginning of 2020 we are facing the situation of COVID-19 spreading around the world, oil
war between Saudi Arabia and Russia, causing the 2020 global economic and financial
prospects are unclear. The global climate is not optimistic. Everest Textile in line with its
consistent mission and values, careful assessment, positive to face the challenges of this
global change. The six global factories develop various contingency strategies, in addition to
the past few years completed the “Moon Shooting 5+5 Global Layout Plan”, the construction
of industrial 4.0 smart factory, AI to improve the efficiency and quality of the process, and
began to implement the global talent leap strategy, emphasizing the talent cultivation and
expansion of sales and research and development team, the future of the foundation of
competitive revenue. In addition to continuing to enhance self-competitiveness with four
forces, such as "innovation, wisdom, sustainability, and fine strength", we also actively
communicate with professionals in the same industry, actively recruit talents, and build the
foundation of Everest Group's sustainable growth with high-quality talent.
In 2020 based on the forward-looking global layout and continuous self-breakthrough of the
leaping thinking, in addition to reducing operational risks and more implementation of
sustainable management, Everest global six plants will strengthen the joint during the time in
the US-China trade war and COVID-19 caused by the international large plant transfer effect.
Global customers will be more understanding of Everest global layout of the integration
advantages. The use of the Group's high-quality human and global resources, continue to
refine product research and development and customer service, so that the Group leaps and
bounds, sustainable operation and growth, and always with "2020 Everest to win the year" as
the idea, Everest not only becomes a customer priority for long-term partners but also a
shareholders, the national community appreciate the benchmark enterprise.
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2. 2019 Financial Statements
The 2019 independent auditors’ reports and financial statements by Deloitte & Touche are
attached as follows. (The 2019 financial report can be downloaded at
http://mops.twse.com.tw )
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INDEPENDENT AUDITORS’ REPORT
The Board of Directors and Stockholders
Everest Textile CO., LTD
Opinion
We have audited the accompanying consolidated financial statements of Oriental Union
Chemical Corporation and its subsidiaries (the “Group”), which comprise the consolidated
balance sheets as of December 31, 2019 and 2018, 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 (collectively referred to as the “consolidated financial statements”).
In our opinion, based on the results of this auditors’ report and other independent auditors’
report (see the section of other matter), the accompanying consolidated financial statements
present fairly, in all material respects, the consolidated financial position of the Group as of
December 31, 2019 and 2018, 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 (“FSC”) of the Republic of China (“ROC”).
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 ROC. Our responsibilities under those standards are further
described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial
Statements section of our report. We are independent of the Group in accordance with The
Norm of Professional Ethics for Certified Public Accountant of the ROC, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
Key audit matters refer to the most important matters for the exami nation of
the 2019-year consolidated financial reports of the Company and its subsidiary
in accordance with the professional judgment of the accountant. Such matters
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have been addressed in the process of examining the consolidated financial
reports as a whole and in the formation of the review opinion, and we do not
express opinion on such matters separately.
The key audit matters of the 2019-year consolidated financial report of the
Company and its subsidiary are as follows:
As stated in the inventory of the consolidated financial report note 4(6), the impairment of the
inventory of the note 5(2) and the inventory of the note 9, the amount of inventory of the
company and its subsidiaries as at 31 December 2019, was NT$4,747,726, accounting for
35% of the total consolidated assets. The inventory is measured by low cost and net realized
value, when the net realized value of inventory is lower than the cost, it is necessary to
mention the inventory price decline and sluggish loss, its assessment involves the
management of significant judgment, and the inventory book amount is significant for the
overall consolidated financial report, because the inventory net realizable value assessment is
considered as a key audit matter.
The inspection procedures for the reasonableness of the net realizable value of inventory are
as follows:
1、 Understand and evaluate the design and implementation of the inventory internal control
system, including the correctness of inventory age.
2、 Assess the year-end inventory age status, and test the accuracy of the inventory age area.
3、 Verify the reasonableness of calculating the net realizable value.
Other Matter
Included in the subsidiaries of the consolidated financial reporting, 2019 the financial
statements of Everest Textile (Thailand) Co. LTD, Everest Apparel (Ethiopia) S.C., Everest
Apparel (Haiti) S.A., Everest America (Holding) Inc., Everest Development USA LLC, and
Everest Textile USA LLC., and 2018 Everest (Thailand) Co., Ltd. and Everest Textile USA
LLC are audited by other certificated public accountants. The total assets of the subsidiary of
December 31, 2019 and 2018 were $3,984,859,000 and $2,944,592, respectively, accounting
for 29% and 24% of the total combined assets, the net consolidated operating income for the
period from January first to 31th December, 2019 and 2018 were $1,187,582,000 and
$1,202,571, respectively, representing 13% of the net consolidated operating income.
We have also audited the parent company only financial statements of Everest Textile CO.,
LTD as of and for the years ended December 31, 2019 and 2018 on which we have issued an
unmodified report.
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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 IFRS, IAS, IFRIC, and SIC endorsed and issued
into effect by the FSC of the ROC, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless management either
intends to liquidate the Group or to cease operations, or has no realistic alternative but to do
so.
Those charged with governance, including the audit committee, are responsible for overseeing
the Group’s financial reporting process.
Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with the auditing
standards generally accepted in the ROC 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 ROC,
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.
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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 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
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the year ended December 31, 2019 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 Jiz-hen
Li and Li-yuan Guo.
Deloitte & Touche
Tainan, Taiwan
Republic of China
March 19, 2020
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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 ROC and not those of any other
jurisdictions. The standards, procedures and practices to audit such consolidated financial
statements are those generally applied in the ROC.
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 ROC. 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.
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Everest Text i le Co . , Ltd . and subsid iar ies
Consol idated balance sheet
December 31 , 2019 and 2018
( In Thousands of New Taiwan Dol lars)
December 31, 2019 December 31, 2018
Code Assets Amount % Amount %
CURRENT ASSETS
1100 Cash and cash equivalents $ 185,145 2 $ 132,349 1
1120 Financial assets at fair value through profit or loss 86,548 1 70,555 1
1150 Notes receivable 9,330 - 31,298 -
1170 Trade receivable 1,122,197 8 1,155,638 9
1200 Other receivables 46,275 - 39,120 1
1220 Current income tax assets 5,755 - 2,760 -
130X Inventories 4,747,726 35 4,504,495 36
1470 Other current assets 163,508 1 139,448 1
11XX Total current assets 6,366,484 47 6,075,663 49
NON-CURRENT ASSETS
1517 Financial assets at fair value through other comprehensive income 6,960 - 6,960 -
1600 Property, plant and equipment 6,302,525 47 6,132,633 49
1755 Right-of-use assets 657,623 5 - -
1840 Deferred tax assets 126,508 1 123,706 1
1990 Other non-current assets 55,842 - 149,410 1
15XX Total non-current assets 7,149,458 53 6,412,709 51
1XXX TOTAL $ 13,515,942 100 $ 12,488,372 100
Code LIABILITIES AND EQUITY
CURRENT LIABILITIES
2100 Short-term borrowings $ 2,711,074 20 $ 2,000,982 16
2110 Short-term bills payable 799,378 6 1,279,107 10
2130 Current contract liabilities 18,551 - 14,863 -
2150 Notes payable 52,073 1 84,128 1
2160 Notes payable to related parties 6,516 - 30,144 -
2170 Trade payable 569,138 4 657,415 5
2180 Trade payable to related parties 49,040 - 73,777 1
2219 Other payables 410,956 3 533,068 4
2220 Other payables to related parties 56,064 1 45,475 1
2230 Current tax liabilities 43,848 - 46,545 1
2280 Lease liabilities 94,044 1 - -
2322 Current portion of long-term borrowings 726,667 5 1,411,667 11
2399 Other current liabilities 29,921 - 24,636 -
21XX Total current liabilities 5,567,270 41 6,201,807 50
NON-CURRENT LIABILITIES
2540 Long-term borrowings 2,265,833 17 896,667 7
2570 Deferred tax liabilities 169,777 1 171,428 1
2580 Lease liabilities 609,650 5 - -
2640 Net defined benefit liabilities 60,048 - 59,822 1
2645 Guarantee deposits 825 - 700 -
2670 Other non-current liabilities 2,406 - - -
25XX Total non-current liabilities 3,108,539 23 1,128,617 9
2XXX Total liabilities 8,675,809 64 7,330,424 59
EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION
3110 Common stock 5,098,341 38 4,998,374 40
3200 Capital surplus 99,644 1 99,644 1
Retained earnings
3310 Legal reserve 174,022 1 158,285 1
3320 Special reserve 83,073 1 80,182 1
3350 Unappropriated earnings ( 215,234 ) ( 2 ) 200,977 1
3300 Total retained earnings 41,861 - 439,444 3
3400 Other equity ( 66,888 ) ( 1 ) ( 46,686 ) -
3500 Treasury stock ( 332,836 ) ( 2 ) ( 332,836 ) ( 3 )
31XX Total owners of the corporation interests 4,840,122 36 5,157,940 41
36XX NON-CONTROLLING INTERESTS 11 - 8 -
3XXX Total equity 4,840,133 36 5,157,948 41
TOTAL $ 13,515,942 100 $ 12,488,372 100
The accompanying no tes are an in tegral par t o f the conso l idated f inancial s ta tements .
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Everest Texti le Co. , Ltd. and subsidiar ies
Consol idated statements of comprehensive income
For the years ended December 31 , 2019 and 2018
( In Thousands of New Taiwan Dollars , Except Earnings Per Share)
2019 2018 code Amount % Amount %
4000 Operating revenue $ 8,863,627 100 $ 9,405,379 100
5000 Cost of goods sold 7,477,722 85 7,715,556 82
5900 Gross (loss) profit 1,385,905 15 1,689,823 18
Operating expenses 6100 S. and M. expenses 646,788 7 707,089 7 6200 G. and A. expenses 512,126 6 472,193 5 6300 R. and D. expenses 263,083 3 267,616 3 6450 Expected credit loss
reversed 5,434 - 5,913 - 6000 Total operating
expenses 1,427,431 16 1,452,811 15
6500 Other gains and losses, net ( 114 ) - 565 -
6900 (Loss) profit from operations ( 41,640 ) ( 1 ) 237,577 3
Non-operating income and expenses
7010 Other income 59,188 1 50,253 - 7020 Other expenses ( 52,658 ) ( 1 ) 74,161 1 7510 Interest expense ( 116,693 ) ( 1 ) ( 85,552 ) ( 1 ) 7000 Total non-operating income
and expenses ( 110,163 ) ( 1 ) 38,862 -
7900 (Loss) profit before income tax ( 151,803 ) ( 2 ) 276,439 3
7950 Income tax (benefit) expense 120,153 1 119,082 1
8200 Net (loss) profit for the year ( 271,956 ) ( 3 ) 157,357 2
(Continued)
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2019 2018 code Amount % Amount %
Other comprehensive income (loss) 8310 Items that will not be reclassified
subsequently to profit or loss: 8311 Premeasurement of defined benefit
plans ( $ 32,071 ) - ( $ 33,517 ) - 8316 Unrealized gain on investments in
equity instruments designated as at fair value through other comprehensive income 15,993 - 4,792 -
8349 Income tax relating to items that will not be reclassified subsequently to profit or loss 6,414 - 15,992 -
( 9,664 ) - ( 12,733 ) - 8360 Items that may be reclassified
subsequently to profit or loss: 8361 Exchange differences on translating
the financial statement of foreign operations ( 36,195 ) ( 1 ) 26,322 -
8300 Other comprehensive (loss) income for the year, net of income tax ( 45,859 ) ( 1 ) 13,589 -
8500 Total comprehensive (loss) profit for the year ( $ 317,815 ) ( 4 ) $ 170,946 2
8600 Net (loss) profit attributed to: 8610 Owners of the Corporation ( $ 271,959 ) ( 3 ) $ 157,365 2 8620 Non-controlling interests 3 - ( 8 ) -
( $ 271,956 ) ( 3 ) $ 157,357 2
8700 Total comprehensive (loss) income 8710 Owners of the Corporation ( $ 317,818 ) ( 4 ) $ 170,954 2 8720 Non-controlling interests 3 - ( 8 ) -
( $ 317,815 ) ( 4 ) $ 170,946 2
EARNINGS PER SHARE 9710 Basic ( $ 0.56 ) $ 0.33 9810 Diluted ( 0.56 ) 0.33
The accompanying notes are an integral part of the consol idated f inancia l s tatements .
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Res
erve
Unap
pro
pri
ated
Ear
nin
gs
Exch
ange
Dif
fere
nce
s
on T
ransl
atin
g
Fore
ign O
per
atio
ns
Unre
aliz
ed G
ain
(Loss
) on F
inan
cial
Ass
ets
at F
air
Val
ue
Thro
ugh O
ther
Com
pre
hen
sive
Inco
me
Tre
asu
ry
Sto
ck
to
tal
Non-c
ontr
oll
ing
Inte
rest
s T
ota
l E
qu
ity
BA
LA
NC
E A
T J
AN
UA
RY
1,
2018
$ 4
,90
0,3
67
$
10
2,4
87
$
13
9,0
37
$
66
,09
3
$ 1
92
,48
1
( $
75
,31
3)
( $
2,4
87
) (
$4
65
,67
9)
$ 4
,85
6,9
86
$
16
$
4,8
57
,00
2
Su
rplu
s d
istr
ibu
tion
Leg
al R
eser
ve
- -
19
,24
8
-(
19
,24
8)
- -
- -
- -
Sp
ecia
l R
eser
ve
- -
- 1
4,0
89
(
14
,08
9)
- -
- -
- -
Sto
ck d
ivid
end
9
8,0
07
-
- -
( 9
8,0
07
)-
- -
- -
-
Net
pro
fit
for
the
yea
r en
ded
Dec
ember
31,
2018
- -
- -
15
7,3
65
-
- -
15
7,3
65
(
8)
15
7,3
57
Oth
er c
om
pre
hen
sive
inco
me
(loss
) fo
r th
e
yea
r en
ded
Dec
ember
31,
2018
- -
- -
( 1
7,5
25
) 2
6,3
22
4
,79
2
-1
3,5
89
-1
3,5
89
Tota
l co
mpre
hen
sive
inco
me
(loss
) fo
r th
e
yea
r en
ded
Dec
ember
31,
2018
- -
- -
13
9,8
40
2
6,3
22
4
,79
2
-1
70
,95
4(
8)
17
0,9
46
Tre
asury
Shar
e T
ransa
ctio
ns
of
Gro
up
-(
2,8
43
)-
- -
- -
13
2,8
43
13
0,0
00
-1
30
,00
0
BA
LA
NC
E A
T D
EC
EM
BE
R 3
1,
2018
4,9
98
,37
4
99
,64
41
58
,28
5
80
,18
2
20
0,9
77
(
48
,99
1)
2,3
05
(3
32
,83
6)
5,1
57
,94
0
8
5,1
57
,94
8
Su
rplu
s d
istr
ibu
tio
n
Leg
al R
eser
ve
- -
15
,73
7
-(
15
,73
7)
- -
- -
- -
Sp
ecia
l R
eser
ve
- -
- 2
,89
1
( 2
,89
1)
- -
- -
- -
Sto
ck d
ivid
end
9
9,9
67
-
- -
( 9
9,9
67
)-
- -
- -
-
Net
pro
fit
(loss
) fo
r th
e yea
r en
ded
Dec
ember
31,
2019
- -
- -
( 2
71
,95
9)
- -
- (
27
1,9
59
) 3
(
27
1,9
56
)
Oth
er c
om
pre
hen
sive
inco
me
(loss
) fo
r
the
yea
r en
ded
Dec
emb
er 3
1,
20
19
- -
- -
( 2
5,6
57
) (
36
,19
5)
15
,99
3
-(
45
,85
9)
-(
45
,85
9)
Tota
l co
mp
reh
ensi
ve
inco
me
(loss
) fo
r
the
yea
r en
ded
Dec
emb
er 3
1,
20
19
- -
- -
( 2
97
,61
6)
( 3
6,1
95
) 1
5,9
93
-
( 3
17
,81
8)
3
( 3
17
,81
5)
BA
LA
NC
E A
T D
EC
EM
BE
R 3
1,
2019
$ 5
,09
8,3
41
$
99
,64
4
$ 1
74
,02
2
$ 8
3,0
73
(
$2
15
,23
4)
( $
85
,18
6)
$ 1
8,2
98
(
$3
32
,83
6)
$ 4
,84
0,1
22
$ 1
1
$ 4
,84
0,1
33
Th
e a
cc
om
pa
ny
ing
no
tes
are
an
in
teg
ral
pa
rt o
f th
e c
on
so
lid
ate
d f
ina
nc
ial
sta
tem
en
ts.
- 16 -
Everest Textile Co., Ltd. and subsidiaries
Consolidated statements of cash flows
For the years ended December 31, 2019and 2018
(In Thousands of New Taiwan Dollars)
2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) profit before income tax ( $ 151,803 ) $ 276,439
Adjustments
Depreciation expenses 757,365 574,543
Expected credit loss reversed 5,434 5,913
Interest expense 116,693 85,552
Interest income ( 822 ) ( 813 )
Dividend income ( 4,054 ) ( 4,772 )
Loss (gain) on disposal of property, plant
and equipment 114 ( 565 )
write-downs of inventories 22,518 7,972
Unrealized gain (loss) on foreign currency
exchange 29,072 ( 23,048 )
Changes in operating assets and liabilities
Notes receivable 21,968 14,085
Trade receivable 23,158 173,390
Other receivable ( 7,064 ) 7,401
Inventories ( 254,823 ) ( 440,901 )
Other current assets ( 23,678 ) 7,236
contract liability 3,688 3,199
Notes payable ( 32,055 ) ( 37,711 )
Notes payable to related party ( 23,628 ) ( 16,054 )
Trade payable ( 83,723 ) ( 1,772 )
Trade payable to related party ( 24,737 ) 6,604
Other payable ( 89,568 ) ( 38,768 )
Other payable to related party 10,589 ( 48,299 )
Other current liabilities 2,173 ( 9,573 )
Net defined benefit liabilities ( 31,845 ) ( 62,109 )
Other non-current liabilities 2,406 -
Cash (used in) generated from operations 267,378 477,949
Interest received 809 706
Interest paid ( 111,034 ) ( 83,679 )
Income tax paid ( 125,577 ) ( 65,842 )
Net cash generated from operating
activities 31,576 329,134
(Continued)
- 17 -
2019 2018
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment ( $ 829,818 ) ( $1,042,800 )
Proceeds from disposal of property, plant and
equipment 5,000 2,570
Increase in other assets ( 2,346 ) ( 8,537 )
Decrease in other assets 1,537 11,831
Other dividend received 4,054 4,772
Net cash used in investing activities ( 821,573 ) ( 1,032,164 )
CASH FLOWS FROM FINANCING ACTIVITIES
Increase from short-term borrowings 4,767,349 8,759,935
Decrease from short-term borrowings ( 4,032,244 ) ( 8,899,255 )
Increase from short-term bills payable 6,323,250 6,691,097
Decrease from short-term bills payable ( 6,802,979 ) ( 6,991,382 )
Proceeds from long-term borrowings 2,375,000 1,685,000
Repayments of long-term borrowings ( 1,690,834 ) ( 926,666 )
Increase in guarantee deposits 10,397 2,946
Decrease in guarantee deposits ( 7,049 ) ( 1,700 )
Disposal treasury stock - 130,000
Repayment of the principal portion of lease
liabilities ( 96,983 ) -
Net cash generated from financing
activities 845,907 449,975
EFFECTS OF EXCHANGE RATE CHANGES ON THE
BALANCE OF CASH HELD IN FOREIGN CURRENCIES ( 3,114 ) ( 115 )
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS 52,796 ( 253,170 )
CASH AND CASH EQUIVALENTS AT THE BEGINNING
OF THE YEAR 132,349 385,519
CASH AND CASH EQUIVALENTS AT THE END OF THE
YEAR $ 185,145 $ 132,349
The accompanying notes are an integral par t of the consolidate d financial statements.
- 18 -
INDEPENDENT AUDITORS’ REPORT
The Board of Directors and Stockholders
Everest Textile CO., LTD
Opinion
We have audited the accompanying financial statements of Everest Textile CO., LTD (the
“Corporation”), which comprise the balance sheets as of December 31, 2019 and 2018, 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 (collectively referred to as the “financial statements”).
In our opinion, based on the results of this auditors’ report and other independent auditors’
report (see the section of other matter), the accompanying financial statements present fairly,
in all material respects, the financial position of the Corporation as of December 31, 2019 and
2018, 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 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 (“ROC”). 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 Corporation in accordance with
The Norm of Professional Ethics for Certified Public Accountant of the ROC, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements for the year ended December 31, 2019.
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
- 19 -
matters.
The descriptions of the key audit matters of the financial statements for the year ended
December 31, 2019 are as follow:
As stated in the inventory of the note 4 (5) of the individual financial report, the impairment
of the inventory of the note 5 (2) and the inventory of the note 9, the amount of the company
inventory, as of December 31, 2019, is NT$2,976,054, accounting for 28% of the total assets
of the individual. The inventory is measured by low cost and net realizable value, when the
net realizable value of inventory is lower than the cost, it is necessary to mention the inventory
price decline and sluggish loss. Its assessment involves the management of significant
judgment, and the inventory book amount is significant for the overall individual financial
report, because the inventory net realizable value assessment is considered as key audit matter.
The inspection procedures for the reasonableness of the net realisable value of inventory are
as follows:
1、Understand and evaluate the design and implementation of the inventory internal control
system, including the correctness of inventory age.
2、 Assess the year-end inventory age status, and test the accuracy of the inventory age area.
3、Verify the reasonableness of calculating the net realizable value.
Other Matter
The investment subsidiary of the Company's 2019th Annual Individual Financial Report
adopting the Equity Law is audited by other certified public accountants, so the opinions
expressed on the individual financial report, the investment amount and its profit and loss of
the above-mentioned equity method are recognized in the audit report of other certified public
accountants. The amount of investment in the above-mentioned equity method as at 31
December 2019 was NTD 2,018,415 thousands, accounting for 19% of the total assets, and
the comprehensive profit and loss share recognized by the Republic of China as of 1 January
to 31 December 2019 was a loss of NTD 393,363 thousands, accounting for 124% of the total
comprehensive profit and loss.
Responsibilities of Management and Those Charged with Governance for the
Consolidated Financial Statement
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
- 20 -
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
Corporation’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 Corporation 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 Corporation’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 ROC will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
As part of an audit in accordance with the auditing standards generally accepted in the ROC,
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
- 21 -
an opinion on the effectiveness of the Corporation’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 Corporation’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 Corporation 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 Corporation to express an opinion on the financial
statements. We are responsible for the direction, supervision, and performance of the
Corporation 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
- 22 -
ended December 31, 2019 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 Ms.
Jiz-hen Li and Ms. Li-yuan Guo.
Deloitte & Touche
Tainan, Taiwan
Republic of China
March 19, 2020
- 23 -
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 ROC and not those of any other jurisdictions. The standards,
procedures and practices to audit such financial statements are those generally applied in the
ROC.
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 ROC. 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.
- 24 -
Everes t Text i le Co. , LTD
Balance sheets
December 31 , 2019 and 2018
(In Thousands of New Taiwan Dollars)
December 31, 2019 December 31, 2018
Code ASSETS Amount % Amount %
CURRENT ASSETS
1100 Cash and cash equivalents $ 51,817 - $ 27,175 -
1120 Financial assets at fair value through profit or loss 86,548 1 70,555 1
1150 Notes receivable 5,547 - 19,506 -
1170 Trade receivable 402,707 4 457,358 5
1180 Trade receivable from related parties 268,551 3 294,471 3
1200 Other receivable 42,375 - 36,955 -
1210 Other receivable from related parties 797,574 8 965,620 10
1220 Current income tax assets 1,248 - 2 -
130X Inventories 2,976,054 28 2,783,781 27
1470 Other current assets 21,097 - 27,362 -
11XX Total current assets 4,653,518 44 4,682,785 46
NON-CURRENT ASSETS
1517 Financial assets at fair value through other comprehensive income 6,960 - 6,960 -
1550 Investments accounted for using the equity method 2,952,184 28 2,585,708 25
1600 Property, plant and equipment 2,706,961 26 2,851,269 28
1755 Right-of-use assets 85,376 1 - -
1840 Deferred tax assets 86,319 1 84,521 1
1990 Other non-current assets 66,866 - 62,761 -
15XX Total non-current assets 5,904,666 56 5,591,219 54
1XXX TOTAL $ 10,558,184 100 $ 10,274,004 100
Code LIABILITIES AND EQUITY
CURRENT LIABILITIES
2100 Short-term borrowings $ 1,247,748 12 $ 640,000 6
2110 Short-term bills payable 799,378 7 1,279,107 12
2150 Notes payable 27,611 - 60,003 1
2160 Notes payable to related parties 6,516 - 30,144 -
2170 Trade payable 283,343 3 415,491 4
2180 Trade payable to related parties 157,806 1 58,411 1
2219 Other payable 296,933 3 391,491 4
2220 Other payable to related parties 60,927 1 165,984 2
2230 Current tax liabilities - - 4,993 -
2280 Lease liabilities 35,503 - - -
2322 Current portion of long-term borrowings 606,667 6 1,411,667 14
2399 Other current liabilities 9,115 - 10,156 -
21XX Total current liabilities 3,531,547 33 4,467,447 44
NON-CURRENT LIABILITIES
2540 Long-term borrowings 1,905,833 18 416,667 4
2570 Deferred tax liabilities 169,777 2 171,428 2
2580 Lease liabilities 50,032 - - -
2640 Net defined benefit liabilities 60,048 1 59,822 -
2645 Guarantee deposits 825 - 700 -
25XX Total non-current liabilities 2,186,515 21 648,617 6
2XXX Total liabilities 5,718,062 54 5,116,064 50
EQUITY
Capital
3110 Common stock 5,098,341 48 4,998,374 49
3200 Capital surplus 99,644 1 99,644 1
Retained earnings
3310 Legal reserve 174,022 2 158,285 1
3320 Special reserve 83,073 1 80,182 1
3350 Unappropriated earnings ( 215,234 ) ( 2 ) 200,977 2
3300 Total retained earnings 41,861 1 439,444 4
3400 Other equity ( 66,888 ) ( 1 ) ( 46,686 ) ( 1 )
3500 Treasury stock ( 332,836 ) ( 3 ) ( 332,836 ) ( 3 )
31XX Total equity 4,840,122 46 5,157,940 50
TOTAL $ 10,558,184 100 $ 10,274,004 100
The accompanying notes are an integral part of the financial statements.
- 25 -
Everes t Text i le Co. , LTD
Statements of comprehensive income
For the years ended December 31 , 2019 and 2018
(In Thousands of New Taiwan Dollars , Except Earnings Per Share )
2019 2018
Amount % Amount %
OPERATING REVENUE $ 5,993,003 100 $ 6,610,889 100
OPERATING COSTS 5,164,420 86 5,589,873 84
GROSS PROFIT 828,583 14 1,021,016 16
Unrealized Profits and Losses on
Transactions with Associates ( 3,984 ) - ( 1,067 ) -
Realized Profits and Losses on
Transactions with Associates 1,067 - 1,090 -
Realized Gross Profit 825,666 14 1,021,039 16
OPERATING EXPENSES
Selling and marketing expenses 450,112 8 521,050 8
General and administrative expenses 231,603 4 221,873 4
Research and development expenses 208,319 3 221,505 3
Total operating expenses 890,034 15 964,428 15
Other gains and losses, net 2,873 - - -
(Loss) profit from operations ( 61,495 ) ( 1 ) 56,611 1
NON-OPERATING INCOME AND
EXPENSES
Other income 59,773 1 44,777 1
Other Gain (Loss) ( 649 ) - 68,009 1
Interest expense ( 47,942 ) ( 1 ) ( 42,700 ) ( 1 ) Share of (loss) profit of subsidiaries
accounted for using equity method ( 213,195 ) ( 3 ) 60,361 1
Total non-operating income
and expenses ( 202,013 ) ( 3 ) 130,447 2
(Continued)
- 26 -
2019 2018
Amount % Amount %
PROFIT BEFORE INCOME TAX ( $ 263,508 ) ( 4 ) $ 187,058 3
INCOME TAX (BENEFIT) EXPENSE 8,451 - 29,693 -
NET PROFIT FOR THE YEAR ( 271,959 ) ( 4 ) 157,365 3
OTHER COMPREHENSIVE INCOME
(LOSS) Items that will not be reclassified
subsequently to profit or loss:
Premeasurement of defined
benefit plans ( 32,071 ) - ( 33,517 ) - Unrealized gain on
investments in equity
instruments designated as
at fair value through other
comprehensive income 15,993 - 4,792 - Income tax relating to items
that will not be
reclassified subsequently
to profit or loss 6,414 - 15,992 -
( 9,664 ) - ( 12,733 ) -
Items that may be
reclassified subsequently
to profit or loss:
Exchange differences
on translating the
financial statement
of foreign
operations ( 36,195 ) ( 1 ) 26,322 -
Other comprehensive
income for the year,
net of income tax ( 45,859 ) ( 1 ) 13,589 -
TOTAL COMPREHENSIVE
PROFIT FOR THE YEAR ( $ 317,818 ) ( 5 ) $ 170,954 3
EARNINGS PER SHARE
Basic ( $ 0.56 ) $ 0.33
Diluted ( 0.56 ) 0.33
The accompanying notes are an integral part of the financial statements.
- 27 -
Ev
ere
st
Te
xti
le C
o.,
LT
D
Sta
tem
en
ts o
f C
ha
ng
es i
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qu
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31
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9 a
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f N
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arn
ings
Oth
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Eq
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on
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in E
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ss o
f
Par
Val
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al R
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Sp
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l
Res
erve
Un
app
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riat
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Ear
nin
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Exch
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Dif
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on
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Sto
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To
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Eq
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y
BA
LA
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E A
T J
AN
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1,
20
18
$
4,9
00
,36
7
$ 1
02
,48
7
$ 1
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7
$ 6
6,0
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$
19
2,4
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(
$ 7
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) (
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( $
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) $
4,8
56
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6
Su
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s d
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Leg
al R
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- -
19
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-(
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- -
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ve
- -
- 1
4,0
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(
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)-
- -
-
Sto
ck d
ivid
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s 9
8,0
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-
- -
(
98
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- -
- -
Net
pro
fit
for
the
yea
r en
ded
Dec
emb
er 3
1,
20
18
-
- -
- 1
57
,36
5
- -
- 1
57
,36
5
Oth
er c
om
pre
hen
sive
inco
me
(lo
ss)
for
the
yea
r
end
ed
Dec
emb
er 3
1,
20
18
-
- -
- (
1
7,5
25
) 2
6,3
22
4
,79
2
-1
3,5
89
To
tal
com
pre
hen
sive
inco
me
(lo
ss)
for
the
yea
r
end
ed
Dec
emb
er 3
1,
20
18
-
- -
- 1
39
,84
0
26
,32
2
4,7
92
-
17
0,9
54
Tre
asu
ry S
har
e T
ran
sact
ion
s o
f G
rou
p
-(
2
,84
3)
- -
- -
-1
32
,84
31
30
,00
0
BA
LA
NC
E A
T D
EC
EM
BE
R 3
1,
20
18
4
,99
8,3
74
9
9,6
44
15
8,2
85
8
0,1
82
2
00
,97
7
(
48
,99
1)
2,3
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(
33
2,8
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)5
,15
7,9
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rplu
s d
istr
ibu
tio
n
Leg
al R
eser
ve
- -
15
,73
7
-(
1
5,7
37
)-
- -
-
Sp
ecia
l R
eser
ve
- -
- 2
,89
1
(
2,8
91
)-
- -
-
Sto
ck d
ivid
end
s 9
9,9
67
-
- -
(
99
,96
7)
- -
- -
Net
pro
fit
for
the
yea
r en
ded
Dec
emb
er 3
1,
20
19
-
- -
- (
2
71
,95
9)
- -
- (
27
1,9
59
)
Oth
er c
om
pre
hen
sive
inco
me
(lo
ss)
for
the
yea
r
end
ed D
ecem
ber
31
, 2
01
9
- -
- -
(
25
,65
7)
(
36
,19
5)
15
,99
3
-(
45
,85
9)
To
tal
com
pre
hen
sive
inco
me
(lo
ss)
for
the
yea
r
end
ed
Dec
emb
er 3
1,
20
19
-
- -
- (
2
97
,61
6)
(
36
,19
5)
15
,99
3
-(
31
7,8
18
)
BA
LA
NC
E A
T D
EC
EM
BE
R 3
1,
20
19
$
5,0
98
,34
1
$ 9
9,6
44
$
17
4,0
22
$
83
,07
3
( $
21
5,2
34
) (
$ 8
5,1
86
) $
18
,29
8
( $
33
2,8
36
) $
4,8
40
,12
2
Th
e a
cc
om
pa
ny
ing
no
tes a
re a
n i
nte
gra
l p
art
of
the
fin
an
cia
l sta
tem
en
ts.
- 28 -
Everest Textile Co., LTD
Statements of Cash Flows
For the years ended December 31, 2019 and 2018
(In Thousands of New Taiwan Dollars)
2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Profit (Loss) before income tax ( $ 263,508 ) $ 187,058
Adjustments:
Depreciation expenses 323,743 300,072
Interest expense 47,942 42,700
Interest income ( 2,798 ) ( 1,619 )
Dividend income ( 4,054 ) ( 4,772 )
Share of loss (profit) of subsidiaries and accounted
for using equity method 213,195 ( 60,361 )
Write-downs of inventories 10,000 5,000
Unrealized gain on group trade 3,984 1,067
Realized gain on group trade ( 3,940 ) ( 1,090 )
Changes in operating assets and liabilities
Notes receivable 13,959 5,507
Trade receivable 54,651 256,616
Trade receivable to related parties 25,920 ( 2,778 )
Other receivable ( 5,420 ) 3,818
Other receivable to related parties ( 100,142 ) 25,391
Inventories ( 202,273 ) ( 140,326 )
Other current assets 6,265 31,145
Contract liabilities ( 1,737 ) 1,700
Notes payable ( 32,392 ) ( 51,125 )
Notes payable to related parties ( 23,628 ) ( 16,054 )
Trade payable ( 132,148 ) 58,305
Trade payable to related parties 99,395 28,371
Other payable ( 50,308 ) ( 5,706 )
Other payable to related parties 3,075 ( 5,022 )
Other current liabilities 696 ( 3,648 )
Net defined benefit liabilities ( 31,845 ) ( 62,109 )
Cash (used in) generated from operations ( 51,368 ) 592,140
Interest received 2,798 1,621
Interest paid ( 47,443 ) ( 42,507 )
Income tax paid ( 11,725 ) 14,075
Net cash (used in) generated from operating
activities ( 107,738 ) 565,329
(Continued)
- 29 -
2019 2018
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment ( $ 179,402 ) ( $ 163,656 )
Proceeds from disposal of property, plant and
equipment 840 2,202
Increase in other assets ( 1,175 ) ( 795 )
Decrease in other assets 1,531 9,941
Increase other receivable to related parties ( 339,828 ) ( 189,379 )
Decrease other receivable to related parties 608,016 72,200
Dividends received 4,054 4,772
Net cash (used in) generated investing activities 94,036 ( 264,715 )
CASH FLOWS FROM FINANCING ACTIVITIES
Increase of short-term borrowings 3,397,748 6,734,138
Repayments of short-term borrowings ( 2,790,000 ) ( 7,084,138 )
Increase from short-term bills payable 6,323,249 6,691,097
Decrease from short-term bills payable ( 6,802,978 ) ( 6,991,382 )
Proceeds from long-term borrowings 2,375,000 1,205,000
Repayments of long-term borrowings ( 1,690,834 ) ( 926,666 )
Repayment of the principal portion of lease liabilities ( 35,966 ) -
Increase in guarantee deposits 325 1,770
Decrease in guarantee deposits ( 200 ) ( 1,700 )
Decrease other payable to related parties ( 108,000 ) ( 5,000 )
Acquired share of subsidiary ( 630,000 ) -
Net cash generated from (used in) financing
activities 38,344 ( 376,881 )
NET INCREASE IN CASH AND CASH EQUIVALENTS 24,642 ( 76,267 )
CASH AND CASH EQUIVALENTS AT THE BEGINNING
OF THE YEAR 27,175 103,442
CASH AND CASH EQUIVALENTS AT THE END OF THE
YEAR $ 51,817 $ 27,175
The accompanying notes are an integral part of the financial statements.
- 30 -
3. Audit Committee’s review report on the 2019 Business Reportand Financial Statements
To the 2020 General Shareholders’ Meeting of Everest Textile Co., LTD,
In accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the
Company Act, we have examined the Business Report, Financial Statements, and the
Resolution for Allocation of Dividend submitted by Board of Directors for the year ending
2019, which have been audited by independent auditors, Ms. Jiz-hen Li and Ms. Li-yuan Guo
of Deloitte & Touche, and found them in order.
The Convener of the Audit Committee: Zhuang Ying-Zhi
Date: 19 March 2020
- 31 -
4. To report the amendments to the “Best Practice Principles ofEthical Corporate Management” for Everest Textile Co., LTD.
(1) In accordance with the promulgation of Taiwan Stock Exchange Corporation
under Tai-Cheng-Chi-Li-Tze No. 1080008378 dated 23 May 2019, the
company has amended the “Best Practice Principles of Ethical Corporate
Management” in view of the implementation of corporate governance and
enhancement of best practice management mechanism. Please refer to the
following comparison table for details.
- 32 -
“Best Practice Principles of Ethical Corporate Management”
Section Proposed Changes Current Articles
Article 6 (Prevention procedures and rules)
In accordance with the Principles as well
as reference of the international norm or
guideline, the Company shall establish
procedures and rules, which of latter
includes conduct guideline and education
training and the like, to prevent Company
Professionals from conducting business
without prudence and integrity;
meanwhile, specifically identify what
Company Professionals must pay attention
to while conducting business.
(Prevention procedures and rules)
In accordance with the Principles, the
Company shall establish procedures and
rules to prevent Company Professionals
from conducting business without
prudence and integrity; meanwhile,
specifically identify what Company
Professionals must pay attention to while
conducting business.
Article 7 (Commitment and execution)
The Board of Directors and top
management of the Company are
requested to submit a compliance
statement of the Best Practice Principles,
whereas the Best Practice Policy is
enlisted as recruit restrictions for
employee to conform.
The policy of ethical corporate
management with sincerity and integrity
shall be disclosed explicitly in the website
and annual reports of the Company. Board
of Directors and the high-leveled
management shall have strong and
rigorous commitment to the execution of
such policy, and enforce the policy to the
internal management and external
commercial activities.
The information in regard to
aforementioned best practice policy,
statement, commitment and execution is
documented and well preserved.
(Commitment and execution)
The policy of ethical corporate
management with sincerity and integrity
shall be disclosed explicitly in the website
and annual reports of the Company. Board
of Directors and the management shall
have strong and rigorous commitment to
the execution of such policy, and enforce
the policy to the internal management and
external commercial activities.
Article 9 (Ethical commercial activities and
prohibited conduct in unfair competition)
The Company shall act with integrity and
fairness when engaging in a commercial
activity with counterparty in accordance
with applicable competition laws and
regulations, and may not fix prices, make
rigged bids, establish output restrictions or
quotas, or share or divide markets by
(Ethical commercial activities)
The Company shall act with integrity and
fairness when engaging in a commercial
activity with counterparty in accordance
with applicable competition laws and
regulations, and may not fix prices, make
rigged bids, establish output restrictions or
quotas, or share or divide markets by
allocating customers, suppliers, territories,
- 33 -
Section Proposed Changes Current Articles
allocating customers, suppliers, territories,
or lines of commerce.
Prior to engaging in a commercial
transaction, the Company shall take into
consideration the legitimacy and legality
of the counterparty such as agents,
vendors, customers, and other entities, and
their Misconduct record, if any. The
Company shall avoid engaging in business
with counterparty with any record of
Misconducts.
When entering into material contracts with
counterparties, the Company shall include
provisions in such contracts demanding
the compliance of ethical corporate
management policy. And such contracts
shall also include clauses to terminate or
cancel the contracts at any time by the
Company, if Misconducts are performed,
or suspected of being performed, by the
counterparties.
or lines of commerce.
Prior to engaging in a commercial
transaction, the Company shall take into
consideration the legitimacy and legality
of the counterparty such as agents,
vendors, customers, and other entities, and
their Misconduct record, if any. The
Company shall avoid engaging in business
with counterparty with any record of
Misconducts.
When entering into material contracts with
counterparties, the Company shall include
provisions in such contracts demanding
the compliance of ethical corporate
management policy. And such contracts
shall also include clauses to terminate or
cancel the contracts at any time by the
Company, if Misconducts are performed,
or suspected of being performed, by the
counterparties.
Article 15 (Organization and responsibility)
The Company Professionals shall exercise
the due care of good administrators to urge
the Company to prevent Misconducts,
review the results of the preventive
procedures at any time, and continually
make adjustments so as to ensure thorough
implementation of the ethical corporate
management policies.
To fulfill the best practices of the ethical
corporate management, Human Resources
Department of the Company is dedicated
to be in charge of establishing and
enforcing the ethical corporate
management policies and prevention
procedures, and shall report regularly,
once a year at least, to the Board of
Directors.
(Organization and responsibility)
The Company Professionals shall exercise
the due care of good administrators to urge
the Company to prevent Misconducts,
review the results of the preventive
procedures at any time, and continually
make adjustments so as to ensure thorough
implementation of the ethical corporate
management policies.
To fulfill the best practices of the ethical
corporate management, Human Resources
Department of the Company is dedicated
to be in charge of establishing and
enforcing the ethical corporate
management policies and prevention
procedures, and shall report to the Board
of Directors if there is material
misconduct.
Article 20 (Blow-the-whistle, discipline and appeal
system)
For any violation of the Principles being
found, Company Professionals shall
proactively report to the Audit Committee,
Department Heads, Head of Internal
Audit, Human Resources Department, and
other appropriate authorized managers.
(Blow-the-whistle and discipline)
For any violation of the Principles being
found, Company Professionals shall
proactively report to the Audit Committee,
the Management, Head of Internal Audit,
Human Resources Department, and other
appropriate authorized managers. The
Company shall strictly preserve the
- 34 -
Section Proposed Changes Current Articles
The Company shall strictly preserve the
identity of the whistle-blower and the
content of the report.
The Company tolerates no violation. Any
of the Company Professionals obtains, or
intends to obtain, improper Benefits for
oneself or others at the cost of the
Company by using one’s position and
authority shall be dismissed, and
unconditionally indemnify the Company
for all losses, if occurred.
Any of the Company Professionals found
to be in violation of the Principles shall be
disciplined in accordance with the reward
and disciplinary rules of the Company.
Those who as a result of violation are
dismissed by the Company will no longer
be employed again by the Company or its
affiliates, and be reported to the competent
authority or transferred to the juridical
authority for investigation if necessary.
The Company’s “procedure for the best
practice principle of ethical corporate
management and guideline” is established
for the staff of Company to adopt when
conducting business.
identity of the whistle-blower and the
content of the report.
The Company tolerates no violation. Any
of the Company Professionals obtains, or
intends to obtain, improper Benefits for
oneself or others at the cost of the
Company by using one’s position and
authority shall be dismissed, and
unconditionally indemnify the Company
for all losses, if occurred.
Any of the Company Professionals found
to be in violation of the Principles shall be
disciplined in accordance with the reward
and disciplinary rules of the Company.
Those who as a result of violation are
dismissed by the Company will no longer
be employed again by the Company or its
affiliates.
The “procedure for reporting and
discipline the violation of codes of ethics
and the best practice principle” is
established in the Company. Any of
Company Professionals being accused of
violating the Principles may appeal for
remedy via the system.
(2) Please accept the aforesaid report.
- 35 -
Approval items
1. To accept 2019 Business Report and Financial Statements
The Board of Directors proposes and recommends that each shareholder vote FOR the
acceptance of 2019 Business Report and Financial Statements.
Explanatory notes:
(1) Everest Textile Co., LTD’s 2019 Business Report and Financial Statements (including
consolidated balance sheets, consolidated statements of comprehensive income, consolidated
statements of changes in equity, consolidated statements of cash flows, and balance sheets,
statements of comprehensive income, statements of changes in equity, statements of cash
flows, please refer to p7– p30) have been audited by independent auditors, Ms. Jiz-hen Li and
Ms. Li-yuan Guo of Deloitte & Touche, and have been examined and determined to be correct
and accurate by Audit Committee of Everest Textile Co., LTD. We thereby submit this report.
(2) Please accept the aforesaid Business Report and Financial Statements.
- 36 -
2. To approve the proposal for the distribution of 2019 profits
The Board of Directors proposes and recommends that each shareholder vote FOR the
distribution of 2019 profits.
Explanatory notes:
(1) The company's after-tax losses in 2019 are intended to be supplemented by surpluses
from previous years. The allocation is as follows
1. 2019 Net loss after income tax (271,959,817)
2.
Minus: Confirmed reevaluated amount of welfare
plan for retained earnings (25,656,401)
3. 2019 total net loss (297,616,218)
4. Beginning of unappropriated earnings 82,381,813
5. Accumulated losses of current year. (215,234,405)
6. Accumulated losses at the end of year. (215,234,405)
(2) Net loss after-tax of NTD 271,959,817 is planned balance by earnings from previous
years.
(3) In accordance with the Article 27 of Articles of Incorporation the company will not
distribute surplus in 2019 year.
(4) The accumulated losses at the end of the period are NTD 215,234,405.
(5) Please accept the aforesaid proposal.
- 37 -
Discussion Items
1. To amend the Articles of Incorporation of Everest Textile Co., LTD
The Board of Directors proposes and recommends that each shareholder vote FOR the
amendments of the Articles of ncorporation.
Explanatory notes:
(1) Pursuant to the stipulated foundation of legal reserve and the letter issued by the Ministry
of Economic Affairs (Letter Ching-San-Tze No. 10802432410 on 9 January 2020), the
revisions to the company’s Articles of Incorporation is as follows:
Section Proposed Changes Current Articles
Article 27 Apart from paying all its income taxes in
the case where there are profits at the end
of the year, the Company shall make up
for accumulated losses in past years.
Where there is still balance, 10% of the
unappropriated earnings from the yearly
net income coupled with other items
thereof shall be set aside by the Company
as legal reserve. Subject to certain
business conditions under which the
Company may retain a portion, and
distribute to the shareholders the
remainder after deducting special reserve
as required by law together with
undistributed profits from previous years
in proportion to the number of the shares
held by each shareholders as shareholders’
dividend. When there is a share capital
increase, the allocated bonuses of the year
for the new shares shall be dealt with
according to the resolution of the General
Shareholders’ Meeting.
The allocation of dividends shall take into
consideration the changes in the outlook
for the Company's businesses, the lifespan
of the various products or services that
have an impact on future capital needs and
taxation. Dividends shall be distributed at
the ratio as set forth in these Articles of
Incorporation aimed at maintaining the
stability of dividend distributions,
improving the financial structure,
reinvestments, production expansion or
Apart from paying all its income taxes in
the case where there are profits at the end
of the year, the Company shall make up
for accumulated losses in past years.
Where there is still balance, 10% of which
shall be set aside by the Company as legal
reserve. Subject to certain business
conditions under which the Company may
retain a portion, and distribute to the
shareholders the remainder after deducting
special reserve as required by law together
with undistributed profits from previous
years in proportion to the number of the
shares held by each shareholders as
shareholders’ dividend. When there is a
share capital increase, the allocated
bonuses of the year for the new shares
shall be dealt with according to the
resolution of the General Shareholders’
Meeting.
The allocation of dividends shall take into
consideration the changes in the outlook
for the Company's businesses, the lifespan
of the various products or services that
have an impact on future capital needs and
taxation. Dividends shall be distributed at
the ratio as set forth in these Articles of
Incorporation aimed at maintaining the
stability of dividend distributions,
improving the financial structure,
reinvestments, production expansion or
- 38 -
Section Proposed Changes Current Articles
other capital expenditures in which capital
is required. The dividends distributed shall
be no less than 50% of the balance of net
profit after tax and deduction of deficits
offset, legal reserve and special reserve,
and the cash dividends shall be not less
than 10% of the aggregate sum of
dividends and bonus distributed in the
same year.
other capital expenditures in which capital
is required. The dividends distributed shall
be no less than 50% of the balance of net
profit after tax and deduction of deficits
offset, legal reserve and special reserve,
and the cash dividends shall be not less
than 10% of the aggregate sum of
dividends and bonus distributed in the
same year.
Article 29 These Articles of Incorporation came into
effect on January 27, 1988, following the
approval of the General Shareholders’
Meeting and the competent authorities.
Amendments shall also follow suit.
(Omitted)
Twenty-second amendment on June 15,
2020.
These Articles of Incorporation came into
effect on January 7, 1988, following the
approval of the General Shareholders’
Meeting and the competent authorities.
Amendments shall also follow suit.
(Omitted)
Twenty-first amendment on June 14, 2019
(2) Please approve the proposal for the amendment of Everest Textile Co., LTD’s Articles of
Incorporation.
- 39 -
2. To amend the company bylaw of “Meeting Rules of
Stockholders” of Everest Textile Co., LTD
The Board of Directors proposes and recommends that each shareholder vote FOR the
amendments of the Meeting Rules of Stockholders.
Explanatory notes:
(1) Pursuant to the practice implementation and the reference of “Meeting Rules of
Stockholders by Public Companies” of Taiwan Stock Exchange Corporation, the
revisions to the company bylaw of “Meeting Rules of Stockholders of Everest Textile Co.,
LTD” is as follows:
Section Proposed Changes Current Articles
Article 10 For proposal in which discussion has been
concluded or closed, the Chairperson shall
submit it for voting.
No discussion or voting shall proceed for
matters unrelated to the proposal.
The personnel responsible for overseeing
and counting of the votes for resolutions
shall be appointed by the Chairperson. The
person responsible for vote overseeing
shall be of the stockholder status.
For proposal in which discussion has been
concluded or closed, the Chairperson shall
submit it for voting.
No discussion or voting shall proceed for
matters unrelated to the proposal.
The personnel responsible for overseeing
and counting of the votes for resolutions
shall be appointed by the Chairperson with
the consent of the stockholders (or
proxies) attending the meeting. The person
responsible for vote overseeing shall be of
the stockholder status.
Article 11 In regards to the resolution of proposals,
unless otherwise provided for in the
relevant law and regulation or Company’s
Articles of Incorporation, resolution shall
be passed by a majority of the voting
rights represented by the stockholders (or
proxies) attending the meeting.
In regards to the resolution of proposals,
unless otherwise provided for in the
relevant law and regulation or Company’s
Articles of Incorporation, resolution shall
be passed by a majority of the voting
rights represented by the stockholders (or
proxies) attending the meeting.
The proposal for a resolution shall be
deemed approved if no objection raised by
stockholders via electronic vote casting,
and the Chairperson inquires and receives
no objection from stockholders in
attendance. The validity of such approval
has the same effect as if the resolution has
been put to vote.
- 40 -
Section Proposed Changes Current Articles
Proposal shall be put to vote. All
proposals may be put to vote one after the
other by its sequence, or may be put to
vote together and numbers of votes for
each proposal are counted separately.
Whichever way of the voting procedures
shall be decided by the Chairperson
If there are amendments or substitute
proposals for the same proposal, the
sequence of which to be put to vote shall
be decided by the Chairperson. If one of
the two proposals has been approved, the
other shall be deemed rejected and need no
further vote.
The results of voting and election shall be
announced after the vote calculation on the
spot and kept for records.
Should objection of a proposal be raised,
such proposal shall be put to vote. All
proposals may be put to vote one after the
other by its sequence, or may be put to
vote together and numbers of votes for
each proposal are counted separately.
Whichever way of the voting procedures
shall be decided by the Chairperson
If there are amendments or substitute
proposals for the same proposal, the
sequence of which to be put to vote shall
be decided by the Chairperson. If one of
the two proposals has been approved, the
other shall be deemed rejected and need
no further vote.
The results of voting and election shall be
announced after the vote calculation on the
spot and kept for records.
Article 13 Should the force majeure is encountered
during the meeting, the meeting shall be
adjourned under ruling of the Chairman,
who will also announce according to the
circumstances when the meeting shall
resume.
The meeting shall be adjourned if
encountering an air-raid alarm during the
meeting. The meeting shall resume one
hour after the alarm is lifted.
(2) Please approve the proposal for the amendment on the company bylaw of “Meeting Rules
of Stockholders of Everest Textile Co., LTD”.
- 41 -
Extemporary Motions
- 42 -
General Information
Articles of Incorporation of Everest Textile Co., LTD.
Last updated at June 14, 2019
Chapter 1 General Provisions
Article 1 The Company is duly incorporated under the provisions of the Company Act of
the Republic of China, and shall be called: Everest Textile Co., LTD.
Article 2 The Company’s businesses are as follows:
1.C301010 Yarn Spinning Mills
2.C302010 Knit Fabric Mills
3.C305010 Printing, Dyeing, and Finishing Mills
4.F104110 Wholesale of Cloths, Clothes, Shoes, Hat, Umbrella and Apparel,
Clothing Accessories and Other Textile Products
5.F204110 Retail sale of Cloths, Clothes, Shoes, Hat, Umbrella and Apparel,
Clothing Accessories and Other Textile Products
6.F401010 International Trade
7.C306010 Outerwear Knitting Mills
8.F107020 Wholesale of Dyeing Mills and Dyestuff
9.F107170 Wholesale of Industrial Catalyst
10.F107200 Wholesale of Chemistry Raw Material
11.F207020 Retail Sale of Dyeing Mills and Dyestuff
12.F207170 Retail Sale of Industrial Catalyst
13.F207200 Retail sale of Chemistry Raw Material
14.E604010 Machinery Installation Construction
15.F113100 Wholesale of Pollution Controlling Equipment
16.F213100 Retail Sale of Pollution Controlling Equipment
17.C801120 Manmade Fiber Manufacturing
18.H701010 Residence and Buildings Lease Construction and Development
19.H701020 Industrial Factory Buildings Lease Construction and Development
20.H701040 Specialized Field Construction and Development
21.G801010 Warehousing and Storage
22.C805010 Plastic Sheets, Pipes and Tubes Manufacturing
23.C805020 Plastic Sheets & Bags Manufacturing
24.C805060 Plastic Leathers Manufacturing
25.C805070 Strengthened Plastic Products Manufacturing
26.C399990 Other Textile Products Manufacturing
27.EZ05010 Apparatus Installation Construction
- 43 -
28.F107990 Wholesale of Other Chemical Products
29.F113010 Wholesale of Machinery
30.F113030 Wholesale of Precision Instruments
31.F207990 Retail Sale of Other Chemical Products
32.F213040 Retail Sale of Precision Instruments
33.F213080 Retail Sale of Machinery and Equipment
34.H701060 New County and Community Construction and Investment
35.I103060 Management Consulting Services
36.IZ06010 Cargoes Packaging
37.CF01011 Medical Materials and Equipment Manufacturing
38.F108031 Wholesale of Drugs, Medical Goods
39.F401021 Restrained Telecom Radio Frequency Equipment and Materials
Import
40.ZZ99999 All business items that are not prohibited or restricted by law,
except those that are subject to special approval
Article 3 The Company may provide guarantees for third parties in accordance with the
Company bylaw of “Procedures for Endorsements and Guarantees”.
Article 4 Where the Company invests in other companies and becomes a shareholder
with limited liability; its total investment may exceed 40% of its paid-up capital
regardless of the stipulated Article 13 of the Company Act, only subject to
approval of the Board of Directors.
Article 5 The Company is incorporated in Tainan, the Republic of China; the Board of
Directors may by resolution approve the establishment of domestic and
international branches where it deems necessary.
Chapter 2 Share Capital
Article 6 The Company’s total capital shall be NT$5,600,000,000 divided into
560,000,000 shares of NT$10 each. The Board of Directors is authorized to
issue separately the un-issued shares.
Out of the above total capital amount,
Article 7 Shares issued by the Company are not required to be evidenced by share
certificates, provided that they shall be recorded at the Securities Central
Depository Enterprises.
The Company can issue special stock.
In the event of the Company merging with another company, matters relating to
the merger need not be approved by way of a resolution of the special
shareholders meeting.
Article 8 Matters relating to the Company’s shares shall be dealt with according to the
provisions of “Regulations Governing Handling of Stock Affairs by Public
Companies” and the relevant laws and regulations.
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Article 9 Registration of share transfer shall be closed within 60 days prior to General
Shareholders' Meeting, or within 30 days prior to Extraordinary Shareholders'
Meeting or within 5 days prior to the record date on which Company distributes
the dividends or bonuses.
Chapter 3 Shareholders’ Meeting
Article 10 The Shareholders' Meetings shall be General or Extraordinary Shareholders'
Meetings:
1. General Shareholders' Meeting shall be held once a year within 6 months of
the end of the Company's fiscal year.
2. Extraordinary Shareholders' Meeting shall be convened pursuant to the
relevant laws or regulations.
Article 11 Notices of General Shareholders' Meeting shall be in writing and delivered to
the shareholders along with a public notice 30 days before the General
Shareholders' Meeting and 15 days before the Extraordinary Shareholders'
Meeting. The said notices shall specify the date, place and reasons for calling
the shareholders' meeting.
Article 12 Unless otherwise stipulated by the Company Act, a quorum shall be present at
the shareholders' meeting with shareholders representing more than half of the
shares issued by the Company and resolutions at the said assembly shall be
passed if approved by more than half of the shareholders in attendance.
Article 13 Shareholders may by way of power of attorney appoint proxies to attend the
said shareholders' meeting. Except for trust enterprises or share registration
agencies approved by the securities management authorities, when one
shareholder is entrusted by two or more shareholders, the voting right
represented by the said shareholder shall not exceed 3% of the voting rights of
total shares issued. Where it has so exceeded, the voting right in excess shall
not be included.
Unless otherwise stipulated by the Company Act, attendance of shareholder's
proxies shall be in accordance with the provisions of "Regulation Governing
the Use of Proxies For Attendance of Shareholders' Meeting of Public
Companies".
Article 14 Unless otherwise stipulated by the Company Act and the Articles of
Incorporation, shareholders' meeting shall be conducted in accordance with the
Company's regulations for shareholders' meeting.
Article 15 Minutes and resolutions of shareholders' meeting shall be recorded and signed
by or affixed with the seal of the chairman of the meeting. The said minutes
and resolutions shall be kept, together with the register of shareholders'
attendance and the proxies' powers of attorney, in compliance with the law.
Chapter 4 Directors
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Article 16 There shall be 9 to 15 Directors of the Company, who are elected and
appointed from the persons with legal capacity at the shareholders' meeting.
The total shares number of the registered shares of the Company held by all of
the Directors shall be determined according to the provisions of "Rules and
Review Procedures for Director and Supervisor Ownership Ratios at Public
Companies".
3 Independent Directors shall be elected from the list of persons with legal
capacity.
Directors shall be elected by adopting candidate nomination system in
accordance with the Article 192-1 of Company Act. A shareholder shall elect
from the nominees listed in the roster of candidates. The election of
Independent, Non-Independent Directors should be held together, yet with the
elected calculated separately.
Article 16-1 The Audit Committee, which is composed of all the Independent Directors, is
installed in accordance with the Article 14-4 of Securities and Exchange Act, in
charge of the execution of Company Act, Securities and Exchange Act, and
other stipulated functions of Supervisors.
The members of Audit Committee, its functions and other mandates shall
follow the relevant laws and regulations or corporate rules. The organization
regulations will be enacted by Board of Directors.
Article 17 Each term of the Directors’ appointments are for a period of 3 years. Same
Directors may be reappointed following the re-election.
Article 18 The directors organize the board of directors to exercise the powers of the
directors. The directors choose one person as the chairman to represent the
company and one person as the vice chairman. When the chairman of the board
asks for leave or cannot exercise his powers for some reason, the vice chairman
of the board shall act on his behalf.
When the vice chairman also asks for leave or cannot exercise his powers for
some reason, the director appointed by the chairman shall act as his agent.
If not specified, the directors will push each other to represent.
Article 19 The board of directors shall be convened by the chairman of the board of
directors and convened once a quarter. Unless otherwise stipulated by the
company law, more than half of the directors shall attend the meeting. The
resolution shall be agreed by the majority of the directors present. The Minister
may convene an ad hoc meeting at any time.
When directors cannot attend the board of directors in person, they may entrust
other directors to act in accordance with the law. The notice of the convening
of the board of directors may be in writing, email or fax.
Article 20 Deleted
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Article 21 Deleted
Article 22 The company has several general managers, deputy general managers and other
managers, and one audit supervisor. The board of directors shall be attended by
more than half of the directors, and the majority of the directors present shall
agree to appoint or remove them.
Article 23 Chairman shall designate the candidate of an additional post which he deems
necessary and assign his/her tasks.
Article 23-1 The Company shall purchase the liability insurance for Directors and important
staff according to respective business scopes and liabilities pursuant to laws.
Chapter 5 Financial Statements
Article 24 The Company's fiscal year shall commence on the First of January of each year,
and ends on the Thirty-first of December of the same year. The financial
documents and statements shall be inspected.
Article 25 The Board of Directors shall in accordance with law furnish various documents
and statements and submit to the General Shareholders' Meeting for approval.
Article 26 Should the Company have profit for the current year, the proportioned
2%-3.5% of the profit shall be allocated as employees’ bonuses, and less than
2.5% as Directors’ remuneration. However, if the Company has accumulated
losses, the profit shall be prioritized for deficit offset. Employees’ bonuses
could be in form of cash or stocks. The actual ratio, amount, form and number
of stock are to be proposed to the Board of Directors, with over two thirds of
the Directors in attendance, and passed and approved by the majority of
Directors in attendance, prior to reporting to the General Shareholders’ Meeting.
Same shall be applied to the Directors’ remuneration, the ratio and amount will
be approved by the Board prior to the General Shareholders’ Meeting.
Article 27 Apart from paying all its income taxes in the case where there are profits at the
end of the year, the Company shall make up for accumulated losses in past
years. Where there is still balance, 10% of which shall be set aside by the
Company as legal reserve. In respect to certain business conditions, the
Company may retain a portion of the special reserve as required by law
together with undistributed profits from previous years, and distribute evenly
the remainder to the shareholders. When there is a share capital increase, the
allocated bonuses of the year for the new shares shall be dealt with according to
the resolution of the General Shareholders’ Meeting.
The allocation of dividends shall take into consideration the changes in the
outlook for the Company's businesses, the lifespan of the various products or
services that have an impact on future capital needs and taxation. Dividends
shall be distributed at the ratio as set forth in these Articles of Incorporation
aimed at maintaining the stability of dividend distributions, improving the
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financial structure, reinvestments, production expansion or other capital
expenditures in which capital is required. The dividends distributed shall be no
less than 50% of the balance of net profit after tax and deduction of deficits
offset, legal reserve and special reserve, and the cash dividends shall be not less
than 10% of the aggregate sum of dividends and bonus distributed in the same
year.
Article 28 All matters not covered herein shall be undertaken in accordance with the
Company Act of the Republic of China and the other relevant law and
regulations.
Article 29 These Articles of Incorporation came into effect on January 27, 1988,
following the approval of the General Shareholders’ Meeting and the
competent authorities. Amendments shall also follow suit.
The twenty-first amendment was made on June 14, 2019..
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Meeting Rules of Stockholders for Oriental Union Chemical Corporation
Last updated by June 12, 2018
Article 1 The stockholders’ meeting of the Company shall be held according to the rules
herein.
Article 2 The location for stockholders’ meeting shall be the Company’s place of business
or a place convenient for attendance by stockholders (or by proxies) that is
suitable for holding such meeting. The meeting shall be held between 9:00AM and
3:00PM.
The stockholders’ meeting notice shall state the registration time, location and
other important information. The aforesaid registration time shall start at least
thirty minutes before the beginning of the meeting. The registration desk shall be
featured with clear instructions and competent staffs.
When convening stockholders’ meeting, the Company shall incorporate electronic
vote casting as one of the alternative ways to cast the vote, and the procedure of
electronic casting shall be stated in the meeting notice. The stockholders who vote
via electronic casting is deemed as presented in person. With respect to
extemporary motions, amendments of the original proposals, and substitute
proposals raised in the stockholders’ meeting, those who vote via electronic
casting shall be considered as abstain.
The stockholders (or by proxies) attending the Meeting shall have attendance card,
sign-in card or other certificate of attendance issued by the Company. The proxy
solicitor shall provide ID document for verification purpose. The stockholders (or
by proxies) attending the meeting shall hand in signed attendance form.
Number of stockholders in attendance shall be calculated based on the number of
attending shares, which equals to the sum of shares shown on the signed attended
forms and the number of voting shares via electronic casting.
The Company may appoint lawyers, accountants or related personnel to attend the
stockholders’ meeting.
The personnel in charge of handling the affaires of the meeting shall wear
identification badge or armband.
For a stockholders’ meeting convened by the Board of Directors, the Chairman of
the Board shall preside at the meeting. If Chairman of the Board is on leave or
unable to exert the rights, the Vice-Chairman of the Board shall preside at the
meeting instead. Should the Vice-Chairman position be vacant, or the
Vice-Chairman is on leave or unable to exert the rights, the Chairman of the Board
shall designate a Director to preside. If no Director is so designated, the Chairman
of the meeting shall be elected by the Board of Directors from among themselves.
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If a Director presides at the meeting including the representative of an institutional
Director, shall be appointed at least 6 months and familiar with the financial
performance and operations of the Company. For a stockholders’ meeting
convened by any other person having the convening right, he/she shall act as the
Chairperson of that meeting; if there are two or more persons having the
convening right, the Chairperson of the meeting shall be elected from among
themselves.
The complete processes of the meeting shall be recorded by voice and video
recorders and all the records shall be kept by the Company for a minimum period
of at least one year. If a shareholder files a lawsuit pursuant to Article 189 of the
Company Act, the video and audio records shall be retained until the conclusion
of the litigation.
Article 3 The Chairperson shall announce the starting of the meeting when the attending
stockholders (or proxies) represent more than half of the total shares issued in
public. If the legal quorum is not present after the designated meeting time, the
Chairperson may announce postponement of the meeting. Such postponement is
limited to two times and the aggregated postponed time shall not exceed one hour.
If quorum is still not present after two postponements but the attending
stockholders (or proxies) represent more than one third of the total shares issued
in public, tentative resolution/s may be passed with respect to ordinary
resolution/s by a majority of those present.
After proceeding with the aforesaid tentative resolutions, the Chairperson may put
the tentative resolutions for re-voting over the meeting if and when the shares
represented by the attending stockholders (or proxies) reached the legal quorum.
Article 4 If the stockholders’ meeting is convened by the Board of Directors, the agenda
shall be designated by the Board. The meeting shall proceed in accordance with
the designated agenda and shall not be amended without resolutions.
If the meeting is convened by person, other than the Board of Directors, having
the convening right, the provision set out in the preceding paragraph shall apply
mutatis mutandis.
Except with stockholders’ resolution, the Chairperson shall not declare
adjournment of the meeting before the first two matters set out in the agendas
(including extemporary motions) are concluded. During the meeting, if the
Chairperson declares adjournment of the meeting in violation of the preceding
rule, a new Chairperson may be elected by a resolution passed by majority of the
attending stockholders to continue the meeting.
When the meeting is adjourned by resolution, the stockholders shall not elect
another Chairperson to continue the meeting at the same location or another
venue.
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Article 5 The stockholders (or proxies) shall complete statement slip setting out the number
of his/her attendance card, name and statement brief before speaking, and the
Chairperson will designate the order in which each person is to speak during the
session.
No statement will be considered to have been made if the stockholder (or proxies)
merely completes the statement slip without speaking at the meeting. If there are
any discrepancies between the content of the statement slip and the speech made,
the statement to be adopted shall be the statement confirmed.
Article 6 Any proposal for the agendas shall be submitted in written form. Except for the
proposals set out in the agenda, any proposal by the stockholders (or proxies) to
amend, substitute or to initiate extemporary motions with respect to the original
proposal shall be seconded by other stockholders (or proxies). The same rule shall
apply to any proposal to amend the agenda and motion to adjourn the meeting.
The shares represented by the proponents and the seconders shall reach 100,000.
Article 7 The explanation of proposal shall be limited to 5 minutes. The statement of
inquiry and reply shall be limited to 3 minutes per person. The time may be
extended for 3 minutes with the Chairperson’s permission.
The Chairperson may restrain stockholders (or proxies) from speaking if the
stockholders (or proxies) speak overtime, speak beyond the allowed frequency or
content of the speech is beyond the scope of the proposal.
When a stockholder (or proxy) is speaking, other stockholder (or proxy) shall not
interrupt without consent of the Chairperson and the speaking stockholder (or
proxy). Any disobedient of the preceding rule shall be prohibited by the
Chairperson. Article 15 of this meeting rule shall apply if the disobedient do not
follow the Chairperson’s instructions.
Article 8 For the same proposal, each person shall not speak more than 2 times.
When a juridical person is commissioned to attend the meeting, only one
representative shall be appointed.
When an institutional stockholder appoints more than two representatives to
attend the meeting, only one representative is allowed to speak.
Article 9 After the attending stockholder (or proxy) voices his opinion, the Chairperson may
reply in person or assign relevant officer to reply.
Over the proposal discussion, the chairperson may conclude the discussion in a
timely manner and where necessary announce discussion is closed.
Article 10 For proposal in which discussion has been concluded or closed, the Chairperson
shall submit it for voting. No discussion or voting shall proceed for matters
unrelated to the proposal.
The personnel responsible for overseeing and counting of the votes for resolutions
shall be appointed by the Chairperson with the consent of the stockholders (or
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proxies).
The person responsible for vote overseeing shall be of the stockholder status.
Article 11 In regards to the resolution of proposals, unless otherwise provided for in the
relevant law and regulation or Company’s Articles of Incorporation, resolution
shall be passed by a majority of the voting rights represented by the stockholders
(or proxies) attending the meeting.
The proposal for a resolution shall be deemed approved if no objection raised by
stockholders via electronic vote casting, and the Chairperson inquires and receives
no objection from stockholders in attendance. The validity of such approval has
the same effect as if the resolution has been put to vote.
Should objection of a proposal be raised, such proposal shall be put to vote. All
proposals may be put to vote one after the other by its sequence, or may be put to
vote together and numbers of votes for each proposal are counted separately.
Whichever way of the voting procedures shall be decided by the Chairperson
If there are amendments or substitute proposals for the same proposal, the
sequence of which to be put to vote shall be decided by the Chairperson. If one of
the two proposals has been approved, the other shall be deemed rejected and need
no further vote.
The results of voting and election shall be announced after the vote calculation on
the spot and kept for records.
Article 12 During the meeting, the Chairperson may at his/her discretion declare time for
break.
Article 13 The meeting shall be adjourned if encountering an air-raid alarm during the
meeting. The meeting shall resume one hour after the alarm is lifted.
Article 14 The Chairperson may maintain the meeting order by instructing the security
guards. The security guards shall wear the armband for identification when
helping maintaining the venue order.
Article 15 The stockholders (or proxies) shall obey the instructions of the Chairperson and
security guards in terms of maintaining the order. The Chairperson or security
guards may exclude the persons disturbing the stockholders’ meeting from the
meeting.
Article 16 For matters not governed by the rules specified herein, shall be governed
according to Company Act, Stock Exchange Law and the other related laws and
regulations.
Article 17 The rules herein take effect after approval at the stockholders’ meeting, the same
apply for any amendments.
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Appendix
1. Current Shareholding of Directors
The list of the 11th term of Board of Directors of Everest Textile Co., LTD
Book closure date: 20 April 2020
Title Name of persons or
companies Representative Shareholdings
Ratio of
shareholding
Representative
Shareholdings Note
Chairman Weiyu Innovation
Investment Co., Ltd. Johnny Hih 222,226 0.04% 1,156,470
Directors
Yuan Ding Investment
Corporation
Donglas Tong
Hsu
128,618,422 25.23%
0
Wu Kao Shan 195,174
Eric Hu 0
YUE DING INDUSTRY
CO., Ltd. Ching-Lai yeh 1,082,744 0.21% 1,652,779
Shuo Quan Co., Ltd. Yeh
Shou-Chun 113,806 0.02% 2,755,093
Yu Yuan Investment Co.,
Ltd.
Lin Haw
Sheng 13,147,509 2.58%
2,883,324
Wang Charles 0
Independent
Directors
Chuang Yin Chi 1,041,106 0.20%
Chen Shiou Chung 0 0 0
Chen Jen Fa 1,041,358 0.20%
The combined
shareholding of all
Directors on the book
closure date
145,267,171 28.49%
The minimum required
combined shareholding of
all Directors by law
16,314,693 3.20%
2. Impact of the Stock Dividend Distribution on Operating Results, EPS
and Shareholders’ Return on Investment
Not applicable.
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