GRAND HALL ENTERPRISE CO., LTD.

GRAND HALL 

OTC ticker: 8941 

ENTERPRISE CO., LTD. 

Annual Report 2004 

Annual Report Website: http://www.ghecl.com.tw 

TSE Market Observation Post System website: 

http://mops.tse.com.tw 

April 30, 2005 

(Translation)

1. Spokesperson and deputy spokesperson: 

Spokesperson: Yvonne Y. Tsai Position: Internal auditor 

Deputy spokesperson: Alice Hsieh Position: Chief financial officer 

Tel: 886.2.2659.1119 

Fax: 886.2.2659.0886 

E-mail: 

Spokesperson - yvonne@grandhall.com.tw 

Deputy spokesperson - alice@grandhall.com.tw 

2. Company and factory location and contact details: 

Company address: 8th Fl-1, No. 298 Rueiguang Rd., Neihu, Taipei 

Tel: +886.2.2659.1119 

Fax: +886.2.2659.0886 

Factory address: No.1 Youliu Road, Youth Industrial Estate, Taichung County 

Tel: +886.4.2682.2226 

Fax: +886.4.2682.2221 

3. Stock title transfer: 

Name: Grand Cathay Securities Corp. (Stock transfer agency dept.) 

Address: 4 Fl, 2, Section 1, Chungching South Rd., Taipei 

Tel: +886.2.2314.8800 

Fax: +886.2.2389.6042 

Website: http://www.gcsc.com.tw 

4. Auditing CPA: 

Company name: First Elite CPA 

Auditors: Li Meng-hsiu and Hsu Jui-yu 

Address: 3 Fl, 283, Section 1, Fuhsing South Rd., Taipei 

Tel: +886.2.2578.0657 

Fax: +886.2.2578.0234 

Website: NA 

5. The market location for GDRs and contact details: NA 

6. Company website: http://www.ghecl.com.tw 

2

Contents 

Ⅰ. Letter to shareholders 5 

Ⅱ. Corporate overview 

1. Company Profile 6 

2. Organization 8 

3. Capital and Shares 23 

4. Corporate Bonds 31 

5. Preferred Stock 31 

6. Global Depositary Receipts 31 

7. Employee Stock Options 31 

8. Mergers and Acquisition 31 

Ⅲ. Operational Highlights 

1. Business Activities 32 

2. Marketing and Sales 41 

3. Employees 50 

4. Environmental Protection 50 

5. Labor-Capital Relations 51 

6. Important Contracts 53 

Ⅳ. Financing Plans and Implementation 

1. Plans 54 

2. Execution Status 54 

Ⅴ. Financial review 

1. Financial Review 55 

2. Financial Analysis 57 

3. Audit Report of Supervisors 60 

4. Independent auditors’ Report and Financial Statements 60 

5. Consolidated Financial Statements 60 

6. Impact of Financial Difficulty for Company or Related Companies 60 

3

Ⅵ. Financial Status, operating results, and risk analysis 

1. Analysis of Financial Position 61 

2. Analysis of Operating Results 62 

3. Analysis of Cash Flow 63 

4. Impact of Major Capital Expenditure on Operations 64 

5. Long-term Investments 64 

6. Risk Analysis 65 

7. Other Important Items 69 

Ⅶ. Corporate Governance 

1. Corporate Governance and Reasons (if any) for Divergence from 

Company Rules 

2. Divergence of Company’s Corporate Governance Regulations from 

Official Corporate Governance Regulations 

3. Other Important Information Beneficial to the Understanding of 

Company’s Corporate Governance Procedures 

Ⅷ. Special disclosures 

1. Affiliated Information 74 

2. Internal Control 82 

3. Major Issues by Directors or Supervisors Specifying Dissent to 

Important Resolutions Passed by Directors 

4. Issuance of Private Placement Securities 83 

5. Disposed of and Held by Subsidiaries 83 

6. Major Decisions of Shareholders’ Meeting and Board’s Meeting 84 

7. Legal Penalties 88 

8. Other Necessary Supplements 88 

9. Disclosures of Events Which May Impact Equity or Share Price 88 

4 

70 

72 

72 

83

Ⅰ. Letter to shareholders 

Dear shareholders: 

Thanks to the continued support of Grand Hall’s shareholders and hard work of 

our employees over the past year, despite growing challenges, Grand Hall has 

maintained its leading position within the industry. This fact is supported by the 

numerous awards bestowed on Grand Hall by its major customers. Moreover, 

investors have voiced consistent approval over the transparency of our 

operations and the honest nature in which we conduct business. We can attribute 

these successes to the support of each shareholder and the efforts of every 

employee. 

Given the continuous rise in raw material prices and numerous new competitors 

last year, operational results in 2004 did not quite make original forecasts. For 

the year, sales amounted to NT$6.3 billion, 4% down on the previous year. Net 

profits came in at NT$599 million, achieving 81% of our original forecast. 

In 2005, we anticipate that raw material prices will remain high, exchange rate 

fluctuations will increase from last year, new competitors will continue to enter 

the market and there will be increasing uncertainty. However, we maintain the 

utmost confidence in our ability to face this most challenging environment. 

Regarding current products, Grand Hall leverages R&D to continue to set 

industry trends. As for new products, we carry out constant testing and 

implement improvements to ensure that Grand Hall’s reputation for high quality 

and perfection is maintained. In consideration of the above-mentioned factors, 

we anticipate mild growth in shipments this year from 2004. Although growth has 

slowed a little over the last two years, we have continued to work hard to 

progress. We are therefore confident that we will reap the benefits of our labor. 

In order to maintain our leading position within the industry and expand the 

distance between ourselves and the competition, we rely heavily on the expertise 

of our R&D team, are devoted to improving production management efficiency 

and ensuring the closer integration of Grand Hall’s value chain. We have a 

growing responsibility toward our expanding rank of shareholders. It is our 

individual and group responsibility to ensure continued progress for the industry, 

and to set out feasible mid-term and long-term plans. We are looking closely at 

areas where further improvements can be made. Through joint cooperation, we 

can ensure better results and profits for all our shareholders. Finally, I would like 

to wish each one of you good health and every success in all that you do. 

5 

Chairman: William Home 

General Manager: Lin Shen-jen 

April 30, 2005

1. Company Profile: 

Ⅱ. Corporate overview 

(1) Date of establishment: March 26, 1976 

(2) Company history: 

1. M&A activities conducted by Grand Hall over the past year up to the date 

of this annual report: None. 

2. Changes in shareholding of directors, supervisors and major shareholders: 

None. 

3. Changes in operating rights, other major events influencing shareholder 

equity, and the influence on the company: None. 

4. Important dates: 

Date Event 

Mar 1976 Establishment of Grand Hall Enterprise Co., Ltd. 

May 1982 Operating items expanded to include the purchase/sale and 

import/export trade of gas BBQ grills and related accessories 

Jun 1992 Company structure reorganized 

May 1996 Grand Hall’s Globe Café products won award for quality 

Oct 1997 Addition of Wal-Mart as sales channel for BBQ products 

Feb 1999 Establishment of Grand Hall USA, Inc. to act as an after-sales 

service center for the North America region 

Jul 1999 Gained approval from the Securities and Futures Commission, MoF, 

R.O.C to become a publicly listed company 

Dec 1999 Addition of Sears as sales channel for BBQ products 

Jun 2000 Passed ISO9002 international quality standards certification 

Jan 2001 Through Global-Tech. Int’l Inc., invested in Zhuhai Grand Hall, Inc., 

principally for the production of outdoor gas BBQ equipment 

Jul 2002 Grand Hall listed on Taiwan’s emerging market exchange 

Dec 2002 In accordance with OTC regulations, 10% of Grand Hall shares 

were offered to the public 

Jan 2003 Grand Hall listed on Taiwan’s OTC market 

Jan 2004 Recognized as “Best small cap company” in Taiwan by Asia Money 

magazine 

Mar 2004 Taiwan regional R&D and production center in Taichung. 

Nov 2004 Production commences in Taichung on the D-Cleater, a patented 

American football training equipment 

6

2. Organization 

Korea division 

(1) Organization 

A. Organization structure 

Operations 

division 2 

R&D 2 

R&D 

R&D 1 

R&D 1 

Operations 

division 1 

QA 

Quality control 

Quality 

assurance 

Sales service 

Taichung 

factory 

Purchasing 

Shipping 

Supervisors 

Sales division 

Sales 1 

Sales 2 

Shareholders' 

meeting 

Board of 

directors 

President 

Vice-president 

General 

Manager 

Sales 3 

7 

Sales 4 

Sales 5 

Internal audit 

Accounting 

Finance & 

Admin. division 

Finance division 

Finance 

Stock division 

Date: April 30, 2005 

IT 

Admin. division 

HR 

General admin.

B. Operations of Major Divisions: 

Division Operations 

Internal Audit Internal audit and process compliance, and examination of 

Finance and 

Admin. 

General Admin. 

Division 

internal controls 

Overall planning of investments, financial affairs and 

administration 

Provide general administrative support to each 

department/division 

Finance Division Supervise and coordinate investment management, 

Operations 

Department 

financial affairs and accounting 

Overall planning of sales, QC and R&D 

Sales Division Supervise and coordinate sales, shipping and purchasing 

Taichung factory Manufacture of new products including water heater and 

Operations 

Division 1 

D-Cleater 

QC, sales and R&D of gas fuel barbecue grills 

QC Division Quality control and testing of products and raw materials 

After-sales Provision of component supply and after-sales service for 

company products 

R&D Division 1 Product design and R&D 

Operations 

Division 2 

Design and R&D of new products 

R&D 1 Design and R&D of indoor cooking equipment 

R&D 2 Design and R&D of new products, i.e. water heater 

South Korea 

operations 

Design and R&D of new products, i.e. water heater 

8

(2) Details regarding Grand Hall’s directors, supervisors, general manager, deputy general manager, assistant managers 

and departmental/branch supervisors: 

Title Name 

President 

William 

Home 

Director Kao Jui-hsin 

Director Tsai Kun-san 

Director 

Director 

(legal rep.) 

Chen Chiang 

Tsung-yih 

Tseng Kuocheng 

(Note 

2) 

A. Directors and supervisors: 

(A) Basic information: 

Date 

Elected 

May 25, 

1992; May 

21, 2002 

July 30, 

1998; May 

21, 2002 

July 30, 

1998; May 

21, 2002 

May 21, 

2002 

August 

23, 2002 

Term 

(yrs.) 

Shareholding When 

Elected 

Common 

Shares 

(%) 

Present Shareholding 

Common 

Shares 

Spouse and Minor 

Shareholding 

(%) Common 

Shares 

9 

Grand Hall 

shareholding by 

nominee 

arrangement 

(%) Shares (%) 

3 4,115,670 11.21 4,607,602 6.36 683,174 0.94 0 0.00 

3 518,944 1.58 724,916 1.00 73,205 0.11 0 0.00 

3 1,274,000 3.47 2,400,000 3.31 0 0.00 0 0.00 

3 240,400 0.65 294,883 0.41 15,000 0.02 0 0.00 

Note 1 11,354,640 30.92 21,454,792 29.62 0 0.00 0 0.00 

Academic 

record 

Hwa Hsia 

College 

(Agricultural 

Economics) 

N.T.U.T 

(Chemical 

engineering 

dept.) 

Ching Shuel 

High School 

Sacred Heart 

High School 

Dong Feng 

Junior College 

(Business 

Admin.) 

Also Serves Concurrently As: 

Note 2 

Note 3 

April 16, 2005 

Managers are Spouse or within 2 degree 

Relative of consanguinity to each other 

Position Name Relation 

Supervisor 

Director 

QC manager 

General manager and 

director (legal 

representative) 

President 

QC manager 

Hung 

Wen-yu 

Kao Jui- 

Hsin 

Hiseh 

Chin-Ku 

Lin Shenjen 

William 

Home 

Hiseh 

Chin-Ku 

relative 

relative 

relative 

relative 

relative 

relative 

Note 4 None None None 


Note 6 None None None

Director 

(legal rep.) 

Lin Shen-jen 

Director Lin Kui-jung 

Supervisor 

Supervisor 

Supervisor 

Shih Tahsiung 

Chang Chiafu 

Hung Wenyu 

May 6, 

2004 

May 21, 

2002 

July 30, 

1998; May 

21, 2002 

May 18, 

2001; May 

21, 2002 

May 18, 

2001; May 

21, 2002 

Note 1 11,354,640 30.92 21,454,792 29.62 0 0.00 

3 36,400 0.10 52,923 0.07 45,315 0.06 0 0.00 

3 301,840 0.82 452,902 0.63 0 0.00 0 0.00 

3 45,500 0.12 65,032 0.09 73,464 0.10 0 0.00 

3 1,778,140 4.84 1,056,061 1.46 4,495 0.01 0 0.00 

10 

0 

0 

0.00 

0.00 

National 

Chengchi 

University 

(Politics) 

Unite 

Padagodique 

College of 

Architecture 

(PhD) 

Note 7 

President 

Supervisor 

William 

Home 

Hung 

Wen-yu 

relative 

relative 


Tamkang 

College 

(Business Dept.) 

None None None None 

Hwa Hsia 

College 

(Agricultural 

Economics) 

Erhlin 

Vocational High 

School 

Note 1: Tseng Kuo-cheng and Lin Shen-jen are the juridical person representatives of Chung-Tao Investment Co., and serve for the same length of time as other directors. 


Note 10 

President 

General manager and 

director (legal rep.) 

Note 2: Grand Hall CEO; President of Chung-Tao Investment and Kuan-Chung Investment; Grand Hall juridical person representative president of Legend Lifestyle Products Corp. and Grand Gas Equipment; Grand 

Hall juridical person representative director of Cyber Vision Trading Co. Ltd., Global-Tech Int’l Ltd. and Grand Hall Holdings Ltd.; director of Focus Lifestyle Product Pty Ltd. and Pamt Pty Ltd.; juridical person 

representative director of Grand Hall HK Ltd. – Grand Hall Holding Ltd.; juridical person representative president of Zhuhai Grand Hall Inc. and Global-Tech Int’l Inc.; director and supervisor of Zhuhai Grand Hall 

Technology; Grand Hall juridical person representative supervisor of Globaltop Partner I Venture Capital Corp. 

Note 3: Director and supervisor of Zhuhai Grand Hall Technology. 

Note 4: President of Chung-Chuan Industrial, Shen-Li Heat Treatment, Gui-Yuan Industrial and Wei-Shuo Investment; director and supervisor of Zhuhai Grand Hall Technology. 

Note 5: President of G. Crown Industrial and Pravita Co. 

Note 6: Supervisor of Legend Lifestyle Products Corp.; Cybertech Ventures, Inc. juridical person representative president of Zhuhai Grand Hall Technology; Global-Tech Int’l Inc. juridical person representative 

president of Zhuhai Grand Hall Inc.; responsible person and director of Taipei branch of Cyber Vision Trading Co., Ltd.; Chiayuan Investment juridical person representative director of Grand Gas Equipment Inc. 

Note 7: Grand Hall juridical person representative of Legend Lifestyle Products Corp.; director and supervisor of Zhuhai Grand Hall Technology. 

Note 8: Responsible person of Lin International Architects. 

Note 9: President of King Chun Industrial; General manager of Zhuhai Prokan Relaxation Equipment; director of Cyber Vision Trading Co. Ltd.; director and supervisor of Zhuhai Grand Hall Technology; director of 

Grand Well International Inc.; Well Hope International Corp. juridical person representative director and supervisor of Zhuhai Grand Hall Inc. 

Note 10: Director of Kuan-Chung Investment, Chung-Tao Investment and Beilaite Co.; president of Chingta Construction and Yuyang Investment. 

William 

Home 

Lin Shenjen 

relative 

relative

(B) List of major shareholders of Grand Hall’s major institutional shareholders: 

11 

April 16, 2005 

Institutional shareholder name Major shareholders of Grand Hall’s institutional 

shareholders 

Chung-Tao Investment 

William Home 

Hung Kuo-yao 

Hung Kuo-ling 

(C) Directors’ and supervisors’ professional knowledge and independence information: 

Name 

William Home 

Kao Jui-hsin 

Tsai Kun-san 

Requirement 

Chen Chiang Tsung-yih 

Lin Shen-jen 

(Rep. of Chung-Tao Investment) 

Tseng Kuo-cheng 

(Rep. of Chung-Tao Investment) 

Lin Kui-jung 

Shih Ta-hsiung 

Chang Chia-fu 

Hung Wen-yu 

Over five years of’ 

experience in 

business, law, 

finance, or areas 

required by the 

company 

Independence status 

(Note 1) 

a b c d e f g 

Note 1: For those directors and supervisors who match the conditions below, ” ” is marked in the appropriate space: 

a. Is not an employee of the company; nor a director, supervisor or employee of its affiliated enterprises. 

b. Does not directly or indirectly own more than 1% of the company’s outstanding shares; nor is one of the top ten noninstitutional 

shareholders of the company. 

c. Is not a spouse or immediate relation (child, parent, grandparent, grandchild or sibling) to any person specified in the 

preceding two columns. 

d. Is not a director, supervisor or employee of a legal entity which directly or indirectly owns more than 5% of the 

company’s listed shares; nor a director, supervisor or employee of the top five legal entities which are owners of the 

company’s listed shares. 

e. Is not a director, supervisor or manager of a company which has a business relationship with the company; nor a 

shareholder who owns more than 5% of such a company. 

Remarks 

(Note 2)

f. Is not an owner, partner, director, supervisor, manager or spouse of any sole proprietor business, partnership, 

company or institution which has provided the company and its affiliates with financial, business consulting or legal 

services in the past year. 

g. Is not a legal entity owner or its representative pursuant to Article 27 of the ROC Company Law. 

Note 2: Explanation of instances where an independent director or supervisor of the company concurrently serves as 

an independent director or supervisor of another company. 

12

2. Details regarding management and departmental/branch supervisors: 

Title Name 

General Manager 

Operations Manager 

Division 1 

Operations Manager 

Division 2 

Chief Financial Officer 

Finance Manager 

QC Manager 

Admin. Manager 

Lin Shenjen 

Chen 

Chung-jua 

Yang Laihsiung 

Hsieh 

Hsiu Mei 

Chou Leling 

Hiseh 

Chin-ku 

Ke Yaofeng 

Date 

Elected 

June 2, 

2003 

March 7, 

2001 

October 1, 

2003 

May 2, 

2001 

November 

2, 1998 

February 

1, 2000 

February 

1, 2000 

Shareholding when 

elected 

Common 

shares 

(%) 

Spouse and minor 

shareholding 

Common 

shares 

(%) 

45,950 0.06 400,832 0.55 

153,453 0.21 154,935 0.21 

0 0 0 0 

32,150 0.04 8,000 0.01 

108,502 0.15 0 0 

89,510 0.12 28,000 0.03 

10,293 0.01 7,854 0.01 

Education and selected past 

positions 

Sears Buying Service, Inc. 

(Purchasing Manager); National 

Cheng-Chi University (Politics 

Dept.) 

13 

Shilin Electric (Engineer) 

N.T.U.T (Mechanical Engineering 

Dept.) 

Taiwan Rinnai Industrial Co. 

(Deputy Manager); Ghing Yun 

University (Mechanical 

Engineering Dept.) 

First Elite CPA 

National Cheng-Chi University 

(Accounting Dept.) 

Texma Int’l (Special Assistant) 

Soochow University (Business 

Admin. Dept.) 

Air Asia (Mechanic) 

National Tainan High School 

(Electric Machinery Dept.) 

Mao Lin Enterprise (IT Chief) 

Chinese Culture University 

(Information Technology Dept.) 

Positions currently held with 

other companies 

Grand Hall juridical person 

representative of Legend 

Lifestyle Products Corp.; 

director and supervisor of 

Zhuhai Grand Hall Technology 

April 16, 2005 

Spouse or relative holding position 

of department head, director or 

supervisor 

Position Name Relation 

President 

William 

Home 

relative 



Director of Chung-Tao 

Investment and Kuan-Chung 

Investment; Grand Hall 

juridical person representative 

director of Focus Lifestyle 

Product Pty Ltd. and Pamt Pty 

Ltd.; independent supervisor 

of Wieson Technologies 

President of Chun Ren 

Investment Ltd.; Chun Ren 

Investment Ltd. juridical 

person representative director 

of Yunsheng Electronics; 

supervisor of Seenedge 

Technology 

None None None 


None President William 

Home 

Relative 

None None None None

R&D Manager (Dept.2) 

Internal auditor 

Special project manager 

R&D Manager (Dept.1) 

Sales manager 

Factory chief 

Kim 

Hong-jip 

Tsai Yiwen 

Liu Mingcheng 

Chang 

Lin-tsang 

Lin Chialing 

Lin Weitsong 

March 7, 

2001 

October 1, 

2002 

May 1, 

2002 

October 1, 

2002 

March 1, 

2003 

June 1, 

2004 

27,427 0.03 0 0 

24,214 0.03 0 0 

5,735 0 8,808 0.01 

48,771 0.06 0 0.00 

20,810 0.02 48 0 

2,020 0 1,300 0 

14 

Hai Tai Electroncis (Chief) 

Inha University (Electrical 

Engineering Dept.) 

TIAS (Deputy Auditor) 

Soochow University (Law Dept.) 

Lecheng Engineering (Sales 

head) 

Chung Yuan Christian University 

(Biomedical Engineering) 

Grand Hall R&D Dept. (Assistant 

Manager) 

Southern Taiwan Tech. College 

(Industrial Engineering and 

Management) 

Pacific Resources Export Ltd. 

(Sales); Chihlee Institute of 

Technology (International Trade 

Dept.) 

Grand Gas Equipment Inc. (R&D 

engineer) 

Ta Hwa Institute of 

Technology (Machinery and 

materials) 




Grand Hall legal 

representative director of 

Legend Lifestyle Products 



None None None None

Title Name 

President 

Director 

Director 

Director 

Director 

Director 

Director 

3. Remuneration of directors, supervisors, general managers and deputy general 

managers: 

(1) Remuneration of directors 

William 

Home 

Kao Juihsin 

Tsai Kun- 

san 

Chen 

Chiang 

Tsung-yih 

Tseng Kuocheng 

Lin Shenjen 

Lin Kui-jung 

Transportation Compensallowance 

ation 

Cash 

Employee profit sharing 

Stock 

Shares Market 

price per 

share 

15 

Market 

value 

December 31, 2004; unit: shares; NT$ 

Total 

compensation 

Total 

compensation 

paid to 

directors 

and 

supervisors 

as percentage 

of net earnings 

(%) 

Number 

Of 

Employee 

stock 

options 

granted 

Other 

compensation 

920,000 3,745,468 0 0 - 0 4,665,468 0.78 0 0 

(2) Remuneration of supervisors 

Title Name 

Supervisor Shih Ta-hsiung 

Supervisor Chang Chia-fu 

Supervisor Hung Wen-yu 

Transportation 

allowance 

Compensation 

Total 

compensation 


Total 

Compensation 

as percentage 

of net 

earnings 

Other 

Compensation 

960,000 2,809,102 3,769,102 0.63 0

(3) Remuneration of general managers and deputy general managers 


Employee profit sharing 

Total Number 

Cash 

Stock 

compensation of 

Title Name Salary Bonus 

Shares 

Market 

price 

per 

Market 

value 

Total as 

compensation percentage 

of net 

employee 

stock 

options 

Other 

compensation 

share 

earnings granted 

CEO 

William 

Home 

Tseng 

Deputy CEO 

General 

manager 

Kuo-cheng 

(Note 1) 

6,922,400 

Kao 

Jui-hsin 

(Note 2) 

0 110,759 122,530 110.30 13,515,059 20,548,218 3.43 0 

8,829,286 

(Transportation 

allowance) 

General Lin 

manager Shen-jen 

Note 1: Discharged from position in June 2004 

Note 2: Discharged from position in May 2003 

(4) Managers included in employee profit sharing scheme 


Stock Cash 

Total 

Shares Market Market Amount 

compensation 

Title Name 

price 

per 

value 

Total as 

compensation percentage 

share 

of net 

earnings 

CEO 

William 

Home 

Tseng 

Deputy CEO 

Kuo-cheng 

(Note 1) 

General manager 

General manager 

Kao Jui-hsin 

(Note 2) 

161,331 

Lin Shen-jen 

110.30 17,794,809 145,839 17,940,648 2.99 

Operations manager 

Chen 

Chung-jua 

Operations manager 

Yang 

Lai-hsiung 

CFO 

Alice 

Hsieh 

Note 1: Discharged from position in June 2004 

Note 2: Discharged from position in May 2003 

(3) Information on net change in shareholding and net change in shares pledged by 

directors, supervisors, management and shareholders of 10% shareholdings or 

more: 

16

1. Changes in shareholding of directors, supervisors, managers and major 

shareholders: 

Position Name Holding 

increase 

(decrease) 

President and 

CEO 

Vice-President 

and Deputy 

CEO (Note 1) 

17 

Unit: Shares 

2004 Upto April 16, 2005 

Pledged 

holding 

increase 

(decrease) 

Holding 

increase 

(decrease) 

Pledged 

holding 

increase 

(decrease) 

William Home 600,991 - 0 - 

Tseng Kuo-cheng 60,863 - 9,000 - 

Director Kao Jui-hsin 121,189 - 0 - 

Director Tsai Kun-san 320,000 - 0 - 

Director 

Director and 

major 

shareholder 

(Note 2) 

Chen Chiang Tsungyih 

Chung-Tao 

Investment 

38,463 - 0 - 

2,798,451 - 0 - 

Director Lin Kui-jung 6,903 - 0 - 

Supervisor Shih Ta-hsiung 59,074 - 0 - 

Supervisor Chang Chia-fu 8,482 - 0 - 

Supervisor Hung Wen-yu (712,732) - 0 - 

Director and 

General 

Manager 

Operations 

Manager 

Operations 

Manager 

Lin Shen-jen 

45,950 - 0 - 

Chen Chung-jua (103,567) - 0 - 

Yang Lai-hsiung 

0 - 0 - 

CFO Alice Hsieh 21,950 - 0 - 

Note 1: Resigned from the post of vice-president and deputy CEO in June 2004, continuing in capacity as director. 

Note 2: Juridical person representative directors of Chung Tao Investment are Lin Shen-jen and Tseng Kuo-cheng. 

2. Transfer of shares from directors, supervisors, managers and major 

shareholders to related parties: None

3. Shares pledged with related party: None 

(4) Grand Hall Long-term Investment Ownership: 

Investees 

Grand Hall 

Investments 

18 

Date: December 31, 2004/ Unit: shares, percent 

Investments from 

company’s directors, 

supervisors and 

managers, and directly or 

indirectly controlled 

businesses 

Total investments 

shares (%) shares (%) shares (%) 

Grand Gas Equipment 4,620,000 27.43 3,965,280 23.54 8,585,280 50.97 

Legend Lifestyle 1,470,000 49.00 300,000 10.00 1,770,000 59.00 

Globaltop Partner I Venture 

Capital Corp. 

10,000,000 2.97 - - 10,000,000 2.97 

Zhuhai Cybertech Venture Inc. 1,000,000 100.00 - - 1,000,000 100.00 

Zhuhai Grand Hall Inc. 7,260,500 65.00 3,017,750 27.50 10,278,250 92.50 

Zhuhai Grand Hall Technology 920,000 100.00 - - 920,000 100.00 

Zhuhai Prokan Relaxation 

Equipment Co. 

850,000 10.00 1,133,050 13.33 1,983,050 23.33 

Grand Hall USA Inc. 1,000,000 100.00 - - 1,000,000 100.00 

Grand Well International Inc. 12,000 10.00 15,998 13.33 27,998 23.33 

Cybercycle Inc. 30,000 60.00 10,000 20.00 40,000 80.00 

Cybertech Ventures INC. 252,000 100.00 - - 252,000 100.00 

Global-Tech Int’l Inc. 7,625,000 100.00 - - 7,625,000 100.00 

Cyber Vision Trading Co., Ltd. 520,000 65.00 280,000 35.00 800,000 100.00 

Grand Hall Holding Ltd. (Note 1) 50,000 100.00 - - 50,000 100.00 

Grand Hall HK Ltd. (Note1) 10,000 100.00 - - 10,000 100.00 

Pamt Pty Ltd. 16 16.00 39 39.00 55 55.00 

Focus Lifestyle Products Pty Ltd. 16 16.00 39 39.00 55 55.00 

Focus Investment Unit Trust D 

Class Income 

Focus Investment Unit Trust A 

Capital Class 

Focus Investment Unit Trust 

Income C Class 

Focus Lifestyle Products Unit 

Trust A Class 

Note 1: In preparation stage 

16 units 16.00 39 units 39.00 55 units 55.00 

960,000 units 16.00 2,340,000 units 39.00 3,300,000units 55.00 

16 units 16.00 39 units 39.00 55 units 55.00 

16 units 16.00 39 units 39.00 55 units 55.00

3. Capital and Shares: 

(1) Source of capital: 

Date 

March 

1976 

Jan 

1978 

Sep 

1982 

Nov 

1985 

March 

1992 

Dec 

1997 

Aug 

1999 

Aug 

2000 

Aug 

2001 

July 

2002 

August 

2003 

August 

2004 

Issue 

Price 

Authorized capital Issued capital Remarks 

Share 

volume 

Total (NT$) 

19 

Share 

volume 

Total 

(NT$) 

Source of 

capital 

1,000,000 1,000,000 Founding 

2,500,000 2,500,000 Cash offering 

6,000,000 6,000,000 Cash offering 

12,000,000 12,000,000 Cash offering 

10 5,000,000 50,000,000 5,000,000 50,000,000 Cash offering 

(Note 1) 

10 14,413,000 144,130,000 14,413,000 144,130,000 Cash offering 

(Note 2) 

10 30,000,000 

Capitalization 

300,000,000 20,178,200 201,782,000 of profits 

(Note 3) 

10 30,000,000 300,000,000 26,231,660 262,316,600 

10 42,000,000 420,000,000 36,724,324 367,243,240 


of profits 

(Note 4) 


of profits 

(Note 5) 

10 64,000,000 


640,000,000 47,741,621 477,416,210 of profits 

(Note 6) 

10 100,000,000 1,000,000,000 62,450,000 624,500,000 

10 100,000,000 1,000,000,000 72,423,000 724,230,000 


of profits 

(Note 7) 


of profits (Note 

8) 

Note 1: Grand Hall became a limited company following ratification by Civil Services of Documentation of Ministry of 

Economic Affairs, document no. 111981 on June 19, 1992. 

Note 2: Grand Hall increased its capitalization by NT$94,130,000 following ratification by Civil Services of Documentation 

of Ministry of Economic Affairs, document no. 126035 on December 19, 1997. 

Note 3: Grand Hall capitalized profits of NT$57,652,000 following ratification by Civil Services of Documentation of 

Ministry of Economic Affairs, document no. 128956 on August 9, 1999.


Ministry of Economic Affairs, document no. 128795 on August 10, 2000. 




Ministry of Economic Affairs, document no. 09101289810 on July 25, 2002. 





Type of 

stock 

Common 

shares 

Listed 

shares 

(2) Status of shareholders: 

Shareholder 

structure 

Governm 

ent 

agencies 

Issued shares 

Unlisted 

shares 

Authorized capital 

20 

Total 

Un-issued 

shares 

Total 

72,423,000 - 72,423,000 27,577,000 100,000,000 

Financial 

institutions 

Other 

Juridical 

Person 

Domestic 

Natural 

Person 

Foreign 

Institutions & 

Natural 

Persons 

April 16, 2005 

Total 

Persons 0 0 11 1,953 46 2,010 

Shares 0 0 33,767,073 22,901,592 15,754,335 72,423,000 

% 0.00 0.00 46.62 31.62 21.76 100.00

(3) Distribution Profile of Shareholding Ownership: 

Class of shareholding Amount of 

shareholders 

1 ~ 999 

1,000 ~ 5,000 

5,001 ~ 10,000 

10,001 ~ 15,000 

15,001 ~ 20,000 

20,001 ~ 30,000 

30,001 ~ 50,000 

50,001 ~ 100,000 

100,001 ~ 200,000 

200,001 ~ 400,000 

400,001 ~ 600,000 

600,001 ~ 800,000 

800,001 ~ 1,000,000 

21 

April 16, 2005 

Par value of each share: NT$10 

Amount or 

shares 

Holding (%) 

667 92,514 0.13 

1,002 1,918,740 2.65 

113 829,082 1.14 

47 557,958 0.77 

28 512,345 0.71 

32 795,244 1.10 

32 1,291,775 1.78 

32 2,473,483 3.42 

18 2,785,569 3.85 

11 3,459,293 4.78 

10 4,646,229 6.42 

5 3,519,020 4.86 

1 991,708 1.37 

More than 1,000,001 12 48,550,040 

Total 2,010 72,423,000 

67.02 

100.00

(4) List of major shareholders: 

22 

April 16, 2005 

Major shareholder name Shares Percentage 

Chung-Tao Investment 

21,454,792 29.62% 

Wei-Shuo Investment 

6,000,000 8.28% 

Kuan-Chung Investment 

4,796,730 6.62% 

William Home 

4,607,602 6.36% 

Tsai Kun-san 

2,400,000 3.31% 

JP Morgan Chase Bank, Taipei Branch 

in custody for JP Morgan Global 

Emerging Market Fund 

1,715,150 2.37% 

HSBC, Taipei Branch in custody for 

HSBC Asset Management (Bermuda) 

1,680,080 2.32% 

Citibank, Taipei Branch in custody for 

Singapore GIC Citibank 

1,374,175 1.90% 

HSBC, Taipei Branch in custody for 

Mandatum Emerging Asia Fund 

1,289,150 1.78% 

Yuang Investment 

1,127,300 1.56%

(5) Net worth, earnings, dividends and market price per share: 

Item 

Market price 

per share 

(Note 1) 

Year 

23 

2003 2004 

Unit: NT$ 

2005 

Jan-Mar (note 

8) 

Highest market price 228.00 182.00 114.00 

Lowest market price 144.50 103.00 102.50 

Average market price 183.72 141.51 107.75 

Net worth per Before distribution 24.89 21.07 23.93 

share (Note 2) After distribution 15.78 17.00 - 

Earnings per 

share 

Dividend per 

share 

Return on 

Investment 

Weighted average shares 62,450,000 72,423,000 72,423,000 

Earnings per 

share (Note 3) 

Prior to 

adjustment 

After 

adjustment 

11.66 8.27 2.94 

10.06 - - 

Cash dividend 9.00 4.00 - 

Stock 

dividend 1.50 2.00 - 

dividend - - - - 

Accumulated unpaid 

dividends (Note 4) 

- - - 

Price/Earnings ratio (Note 5) 15.76 17.11 - 

Price/Dividend ratio (Note 6) 

Cash dividend yield ratio 

(Note 7) 

20.41 

35.38 

4.90% 2.83% 

Note 1: Highest and lowest market price for each year. Average market price calculated based on trading value 

and trading volume. 

Note 2: Based on year-end issued capital and shareholders’ dividend resolution of following year. 

Note 3: Calculation based on adjustments to EPS after issue of dividends etc. 

Note 4: According to securities issuance regulations, if in a certain year the company determines not to issue 

dividends, and accumulate dividends until a profitable year, the company is obliged to divulge the value of 

accumulated undistributed dividends. 

Note 5: Price/Earnings ratio = average market price/earnings per share. 

Note 6: Price/Dividends ratio = average market price/cash dividends per share. 

Note 7: Cash dividend yield rate = cash dividends per share/average market price. 

Note 8: Information included up to publication date of report. March 31, 2005 financial data used followed most 

recent audit/review by CPA. 

- 

-

(6) Dividend policy and implementation status: 

1. Dividend policy: 

In accordance with the SFC’s revisions to dividend policy regulations, this 

company in its directors’ meeting on May 27, 2004 passed a resolution to be 

implemented from 2004. Taking into consideration future capital requirements 

and cash flow requirements of shareholders, if there are any earnings for 

distribution at the end of each fiscal year, the cash dividend per share for 

distribution must not be lower than 20% of the combined total of cash dividend 

and stock dividend distributed in the previous year. 

2. Proposed distribution of dividends: 

On May 27, 2004, the shareholders’ meeting approved to distribute a cash 

dividend of NT$9 and a stock dividend of NT$1.5 for profits generated in 2003. 

On April 21, 2005, the board of directors resolved to distribute a cash dividend of 

NT$4 and a stock dividend of NT$2 for profits generated in 2004. 

24

(7) Impact of stock dividends on operation results and EPS: 

Item 

25 

Unit: EPS, NT$; Other, NT$ thousand 

Year 

2005 

(estimate) 

Paid-in capital at the beginning of the term 724,230 

Cash/stock dividend 

allocation 

Changes in business 

performance 

Presumed EPS and 

PE ratio (Note 1) 

Cash dividend per share 4.0 

Stock dividend from retained earnings 2.0 

Stock dividend from capital reserve - 

Operating profits 

Year-on-year operating profits growth 

After-tax profits 

Year-on-year after-tax profits growth 

Earnings per share 

Year-on-year earnings per share growth 

Annual average return on investment rate 

(PE ratio) (Note 2) 

If earnings 

converted into 

capital increase 

are allocated 

completely as 

stock dividend 

If capital reserves 

are not converted 

into capital 

increase 

If capital reserves 

are not converted 

into cash 

dividends 

Presumed EPS 

Presumed annual 

average rate of return 

on investment 

Presumed EPS 



on investment 

Presumed EPS 

Note 1: Company not required to disclose financial projections for 2005. 



on investment 

(Note 1)

(8) Employee bonus and directors’ and supervisors’ remuneration: 

1. The company’s Article of Incorporation about employee bonus and directors’ 

and supervisors’ remuneration (∫20): 

If there are earnings for distribution at the end of each fiscal year after the 

payment of all relevant tax expenses and the offsetting of any losses of prior 

years, 10% of the net earnings should be set aside as a legal reserve. 

Undistributed earnings must cover debts (in the form of special reserve) that 

would have a negative impact on shareholders’ interests. The balance of 

earnings should then be distributed as follows: 

(1) Employee bonuses: 1-10%. 

(2) Directors and supervisors’ remuneration: 1-3%. 

(3) Shareholder’s meeting approved dividends (of which cash dividend should 

not be lower than 20%.) 

2. Board of directors’ employee bonus and director remuneration proposal (2004): 

The April 21, 2005 board of directors meeting resolved the following with regard 

to employee bonus, and director and supervisor remuneration (2004): 

(1) Employee cash bonus, NT$3,080; Employee stock dividend, NT$7,204,000; 

Director and supervisor remuneration, NT$4,804,720. 

(2) Proposed employee share dividend is 720,400 shares, accounting for 4.97% 

of stock dividend. 

(3) In consideration of employee bonuses and remuneration to directors and 

supervisors, fully diluted EPS stands at NT$8.11. 

26

3. Details of the settlement of 2003 employee bonus and directors and 

supervisors’ remuneration are as follows: 

Shareholder meeting BODs’ meeting planned 

actual distribution distribution (04/06/2004) 

(05/27/2004) 

Employee shares 605,500 605,500 

Amount (NT$) 6,055,000 6,055,000 

% of 2003 shares outstanding 0.97% 0.97% 

Employee cash (NT$) 499,570 499,570 

Director/supervisor remuneration 6,554,570 6,554,570 

2002 

related 

info. 

Net EPS (NT$) 11.66 11.66 

Diluted net EPS (NT$) 11.45 11.45 

(9) Share buy-back history: none 

4. Corporate bonds: none 

5. Preferred stock: none 

6. Global depositary receipts: none 

7. Employee stock options: none 

8. Mergers and acquisitions: none 

27

1. Business activities: 

(1) Business scope: 

1. Major items of business: 

Ⅲ. Operations overview 

(1) Purchase, sale and manufacture of gas-fueled grill equipment (gasfueled 

equipment and heater) 

(2) Import/export trade 

(3) Manufacture of sports equipment 

(4) Wholesale of items related to culture and education, musical instruments, 

and leisure items (sports equipment) 

(5) Manufacture of furniture and ornaments 

(6) Wholesale of furniture, bedding, kitchen utensils and ornaments 

(7) Manufacture of tableware 

2. Major sales items/proportion: 

Item 

28 

2004 

Unit: NT$ thousand 

Sales % 

Outdoor gas BBQ grill 5,449,831 87.04 

Gas valve 538,015 8.59 

Outdoor heater 53,839 0.86 

Gas-fueled product accessories 215,009 3.43 

D-Cleater 4,801 0.08 

3. Current products: 

Total 6,261,495 100.00 

(1) Outdoor BBQ grill: For use in the garden or outdoor leisure locations. 

Suitable for roasting/cooking food. Extremely common in North America. 

(2) Gas valve: An essential component of gas cylinders, controlling gas 

pressure. When an empty cylinder is being filled with gas, at the time 

when the cylinder is 80% full, the gas valve will automatically shut off, 

acting as a safety feature. This product is patented. 

(3) Outdoor heater: For use in the garden. Extremely common in North 

America. Commonly used during cooler weather.

(4) Gas-fueled product accessories: Spare parts for the above-mentioned 

products in case of replacement/repair needs. 

(5) D-Cleater: Facilitates strength training for American football players, a 

sport that is extremely popular in both North America and Canada. 

4. Planned new products: 

(A) High efficiency water heater 

(B) In-door stainless steel grill range 

(2) Industry analysis: 

1. Current product development: 

(A) Outdoor gas grill 

Outdoor barbecuing has always been a top leisure activity involving food 

and drink. Especially for western countries, the preparation of food using 

the barbecue method has already become an everyday habit for many. 

A survey reveals that 75% of American households own an outdoor 

barbecue grill. This statistic supports the hypothesis that the barbecue 

grill plays an important role in American households. In Australasia, 

according to a survey conducted by Australian company BIS Shrapnel 

Pty Ltd., 73% of households own an outdoor barbecue grill. Barbecuing 

has become a common leisure activity, a channel that facilitates social 

interaction, and it is slowly becoming an increasingly common method 

with which to prepare food. 

The majority of outdoor barbecue grill suppliers are based in North 

America and Australia. Major players in North America include Char-broil 

and Weber-Stephen. In Australia, major companies are Barbeques 

Galore, Jackaroo and Rinnai. The majority of these companies operate 

standardized, automated production lines for mass production. 

Regarding sales channels, according to statistics from Casual Living 

magazine, in North America the breakdown is as follows: retail store, 

31%; household supplies store, 16%; oven/stove store, 15%; and 

swimming pool store, 10%. According to statistics from BIS, sales 

channels in Australia are as follows: oven/stove store, 37%; retail store, 

20%; and household supplies store, 15%. Due to the fact that 

consumers attach a great deal of importance to product pricing, retail 

stores have become the most common sales channel. 

As the use of outdoor barbecue grills in Taiwan is not common, the 

barbecue grill industry in this country is fairly small. There are only a few 

companies with upstream, mid-stream and downstream expertise 

capable of product R&D and the manufacture of high-quality outdoor gas 

barbecue grills. In recent years, consumers’ exacting demands regarding 

product price and features have constantly risen. It is becoming 

increasingly common for major North American and Australian brand 

29

name manufacturers to outsource production. For the few Taiwanese 

companies that possess R&D capabilities and manufacturing flexibility, 

there is an opportunity for development. 

(B) Gas valve 

The majority of Grand Hall’s gas valve output is for twenty pound 

specification cylinders. The gas valve can be viewed as a subsidiary 

outdoor barbecue grill product. The gas valve and outdoor barbecue grill 

industries are highly correlated. In North America, since April 2002, 26 

states have decreed that gas cylinders must be refitted with new gas 

valves that include OPD (Overfilling Prevention Device) to avoid 

accidents. 

(C) D-Cleater 

Grand Hall carried out R&D and commenced manufacture of American 

football training equipment for US company D-Cleater in 2004. The D- 

Cleater is available in two different specifications, i.e. 48” and 72”. The 

D-Cleater is the optimal training machine to prepare high school teams 

for competition. 

2. Relationship among upstream, mid-stream and downstream: 

A. Gas products 

Grand Hall primarily sells outdoor gas barbecue grills. Production is 

carried out by partnership factories. In the product supply chain, Grand 

Hall is responsible for R&D, order taking and marketing, and after-sales 

service. The operational structure is mapped out below: 

Upstream Mid-stream Downstream 

Raw materials Manufacturing Sales 

Aluminum Die-casting Hypermarket 

Stainless steel Stamping Lacquer/enamel 

Iron piping Stamping Retailers 

Copper Lathing Assembly 

Iron Casting Specialist stores 

30 

Testing 

Packaging 

Consumers

B. D-Cleater 

The D-Cleater is manufactured by Grand Hall in Taichung. Grand Hall’s head 

office is responsible for order-taking, marketing and after-sales service. The 

operational structure is mapped out below: 

Steel sheet Laser cutting Welding Painting 

Square tube Stamping 

Blowing agent for PU foam Foaming Assembly 

High density wooden board Cutting & drilling Testing 

Nylon "turf" "Turf" build Packaging Specialist store 

3. Product development and competition: 

(A) Development trends: 

(1) Outdoor gas barbecue grill: 

Outdoor barbecue grills use a variety of different fuels, namely 

charcoal, gas (including gas cylinders or natural gas) and electricity. 

In terms of production, the technology involved in manufacturing 

charcoal grills and electric grills is relatively low level. Heat output 

and functions are limited, and selling price and profits are low. The 

technology involved in the manufacture of gas grills is more 

advanced. Gas grills are capable of a higher level of heat output, 

have a greater number of features, tend to be larger in scale, and 

command higher selling prices and greater profitability. When 

consumers select the type of fuel for their barbecues, they generally 

consider the following factors: type of food to be cooked; barbecuing 

efficiency; convenience of use, hygiene requirements and safety. 

Their choices depend both on product functionality and personal 

preferences. 

In the North America market, according to a 2004 survey conducted 

by HPBA, gas is currently the most popular fuel with as many as 60% 

of barbecue grill purchasers opting for it. Charcoal grills command 

38% of the market. But, of that 38% portion, 59% of consumers 

indicated that the next grill they purchase will be of the gas fuel 

variety. The market share of gas cylinder barbecue grills is projected 

to continue to expand. In the Australian market, gas barbecue grills 

command 84% of the total market (among which, gas cylinder grills 

constitute 95%). Solid fuel grills command 12% of the market, and 

electric grills make up the remaining 4%. From these statistics, it is 

31

clear that gas cylinder barbecue grills have already become a 

mainstream product. 

(2) Gas valve: 

North America is the largest market for gas valves. The market is 

developing primarily with safety in mind. Concerning valve 

specifications, during cylinder filling, it is now necessary for the valve 

to automatically close when the cylinder is 80% full. At the same time, 

the valve must shut off gas supply automatically if the cylinder is 

exposed to high temperatures and/or fire. This means the gas 

cylinder must be equipped with OPD (Overfilling Prevention Device). 

The gas valve market in North America has developed into a mature 

industry with stable demand year-on-year. The current leading gas 

valve companies are WCC and Manchester. Grand Hall currently 

primarily sells gas valves to WCC (which presently holds market 

share of 60%). Grand Hall has already enjoyed a partnership 

relationship with this company for twenty years. 

B. Market competition: 

(1) Outdoor gas barbecue grill 

As the outdoor gas barbecue grill market is approaching maturity, 

most products offer similar features. Consumers attach high 

importance to pricing and exhibit low brand loyalty. Following the 

automation of mass production in North America, and subsequent 

lower unit costs, price competition has become even fiercer. It is 

necessary for manufacturers to constantly innovate product functions, 

improve exterior aesthetics and design added-value functions. At the 

same time, it is essential to constantly lower costs in order to 

maintain price competitiveness and hold onto market share. 

Regarding Australian companies, the bulk of manufacturing has 

already shifted to China. This has led to lower prices and fiercer price 

competition. 

(2) Gas valve 

Currently, all of Grand Hall’s gas valve output is sold on the North 

America market. Major manufacturers in the US include Sherwood. In 

Europe, manufacturers include Ceddeux and Omega. As the market 

is mature, price competition is fierce. However, as gas valve safety 

requirements are high, suppliers require certification and 26 states in 

North America stipulated that gas cylinders must be fitted with an 

OPD safety valve from April 2002, there has been a short-term 

upturn in demand. Despite this, market competition has in no way 

eased up. 

(3) Technology and R&D: 

1. R&D expenses over the past year 

32

Item 

Year 

33 


2004 March 31, 2005 

Research expenses 50,204 10,632 

Revenues 6,261,495 2,048,876 

% 0.80 0.52 

2. Technological breakthroughs over past year and new product launches: 

2004: 

A group customers: 

a. 16321 (LPG), 16323 (LPG), 16325 (LPG), 16327 (LPG), 17327 

(LPG), 16329 (LPG) and 17329 (LPG) outdoor barbecue grills 

b. 16682 (LPG), 17682 (NG), 16684 (LPG) and 17684 (NG) new model 

outdoor barbecue grills 

c. 16686 (LPG) and 17686 (NG) 16691 redesigned outdoor barbecue 

grills 

d. 17692 (NG) 16691 redesigned outdoor “stove” style barbecue grill 

e. 0517 (LPG) and 30537 (NG) new model outdoor barbecue grills for 

the Canadian market 

B group customers: 

a. M5205ALP and M5205ANG new model outdoor barbecue grills 

b. MSM05ALP new model outdoor smoker 

c. MCH05A new model outdoor traditional charcoal barbecue grill 

d. MISL05 stainless steel “Island” stove 

e. MEV05ALP new model commercial outdoor barbecue grill 

f. M3905ALP and M3905ANG new model outdoor barbecue grills 

g. MFA05ALP new model outdoor “stove” style barbecue grill 

C group customers: 

a. SS50072LP and SS50072NG new model outdoor barbecue grills 

b. SS62884LP and SS62884NG new model outdoor barbecue grills 

c. BM584 new model outdoor barbecue grill 

D group customers: 

K004-D5B-BLP, K004-D5B-BNG, K004-B5BLP and K004-B5BNG new 

model outdoor barbecue grills

2005: 

A group customers: 

a. 16321/16323/16325/16328/16329 Premium redesigned upright 

outdoor multifunctional barbecue grills 

b. 16682/16684 Elite redesigned multifunctional ”buffet table” barbecue 

grills 

c. GHW-2000 32L, 24L and 20L new model patented high efficiency 

water heaters 

B group customers: 

a. M52/M39 outdoor multifunctional infrared “buffet table” barbecue grill 

b. MSM redesigned outdoor multifunctional “smoker” barbecue grill 

c. MEV redesigned outdoor easy-to-dismantle commercial barbecue 

grill 

d. MCH outdoor stainless steel barbecue grill 

e. MISL redesigned outdoor stainless steel granite “stove” 

C group customers: 

a. GT 52” All Grill outdoor multi-functional ”buffet table” barbecue grill 

b. GT 38” outdoor multifunctional “buffet table” infrared barbecue grill 

c. Grand Endeavor outdoor multifunctional upright barbecue grill 

d. Endeavor outdoor multifunctional tedestal barbecue grill 

e. GT Powerful stove 

f. GT infrared stove 

g. GT outdoor multifunctional infrared smokeless barbecue grill 

D group customers: 

HHR-4800 multifunctional indoor gas stove 

E group customers: 

BM42/54/64/72 and SS50072/SS73 outdoor multifunctional upright 

barbecue grills 

(4) Long and short-term development plans: 

1. Long-term development plans: 

(1) Marketing strategy: 

a. In accordance with the requirements of major makets, i.e. North 

America, Australia and Europe, Grand Hall intends to continue 

developing international standard products, and expand marketing 

34

scope. In terms of production, design, technology and sales channels, 

Grand Hall will continue to lower costs and effectively utilize its global 

resources. 

b. Grand Hall intends to develop outdoor barbecue grills and related 

products, strengthen sales outlet network and achieve constant 

marketing breakthroughs, taking the household electronics industry as 

a model to follow. 

c. Grand Hall intends to set up strategic alliances with major customers, 

expand the production of related accessories, non-stove products and 

indoor products to become a major supplier in these fields. The 

company also aims to strengthen its grasp of first-hand market 

information and design concepts. 

(2) Product development direction: 

a. Develop gas pressure valves 

b. Develop stainless steel products 

c. Improve technology flow with customers and suppliers, grasp direction 

of product development and strengthen customer loyalty. 

2. Short-term development plans: 

(1) Marketing strategy: 

a. Emphasize market differentiation, accommodate individual customers’ 

product requirements, and strengthen customer-supplier relationships. 

b. Develop high-value stove products, adopt a flexible pricing policy to 

accommodate current customers’ channel requirements and raise 

market share; generate value through creativity and avoid price wars. 

c. Through the computerization of Grand Hall’s North American 

subsidiary’s after-sales service and customer feedback information, 

raise after-sales service quality and grasp market trends. 

d. Establish sales outlets in Europe and strengthen the development of the 

European market to diversify operations. 

(2) Product development direction: 

a. To create demand, develop high-quality stainless steel outdoor 

barbecue grills. 

b. Strengthen stove product design and raise value-added factor through 

the creative use of various surface/exterior materials. 

c. Develop indoor gas stoves and water heaters. 

d. Develop low-priced grills and increase market share in the segment. 

35

2. Marketing and sales: 

(1) Market analysis: 

A. Major products and sales regions: 

Year 


2004 2003 2002 

Sales region 

Revenues % Revenues % Revenues % 

North America 4,929,894 79 5,727,489 88 5,416,820 90 

Australia 1,238,682 20 795,336 12 503,825 8 

Europe 89,808 1 9,133 0 93,478 2 

Asia 2,284 0 1,177 0 10,302 0 

Africa 395 0 377 0 182 0 

Taiwan 432 0 1,130 0 827 0 

Total 6,261,495 100 6,534,642 100 6,025,434 100 

2. Market share, future supply/demand balance and feasibility of growth: 

(1) Outdoor gas BBQ grill 

The majority of this company’s outdoor BBQ grills are sold in North 

American and Australia. Based on statistics published by the US’ 

Barbecue Industry Association, Grand Hall’s shipments to the US of 

447,247 constituted a market share of 5.12% of total US shipments 

amounting to 8,732,200 in 2004. 

Regarding outdoor gas BBQ grills, the strongest market demand is 

generated in North America and Australia. In North America, 75% of 

households own an outdoor BBQ grill. There is a growing trend for gas 

grills to replace charcoal grills. Over the 1995-2002 period, gas grill 

shipments grew at a CAGR of 7%, while traditional charcoal grill 

shipments grew at a CAGR of just 2%. An even larger proportion of 

households in Australia own an outdoor BBQ grill. However, because of 

the relatively low population of Australia, the market is still small. The 

European market is still at the initial stage of development. 

Regarding gas BBQ grill suppliers, in North America in the past, local 

companies tended to carry out all R&D and production. However, as 

product development reached a more mature stage, price competition 

heated up. As a consequence, in recent years, major manufacturers 

have looked to Taiwan and China to purchase components/accessories 

in an effort to save costs. There is now also a growing trend to 

completely outsource the entire manufacturing process. 

(2) Gas valve 

The gas valve industry is a mature industry. Demand remains stable 

36

year-on-year. There are two major gas valve manufacturers in North 

America, namely WCC and Manchester. Grand Hall is a major supplier 

of gas valves to WCC. WCC holds a market share of 60%. Grand Hall 

has enjoyed a partnership relationship with WCC for twenty years with 

business registering stable growth. 

3. Competitive edge: 

(1) Accumulation of over twenty years’ professional knowledge and 

experience 

(2) Possess a strong R&D and design team, and engage in cooperation with 

renowned overseas design companies. 

(3) Advanced manufacturing equipment churns out high volume and high 

quality products 

(4) Maintain favorable business relationships with customers. 

(5) Have set up overseas after-sales service centers. 

(6) Zhuhai Grand Hall Inc. successfully ramped up production in 2002. 

Currently the company is concentrating on manufacturing high-end 

outdoor cooking equipment and indoor cooking equipment. 

(7) Grand Hall products’ excellent quality has been recognized by 

customers and consumers alike. The following is a list of awards 

bestowed on Grand Hall: 

A. 1996: Globe Café product won outstanding product award in Taiwan. 

B. Between 1999 and 2001, for three consecutive years, Grand Hall was 

recognized by its customer Wal-Mart and was bestowed the “Wal-Mart 

– Prel international supplier of the year award.” 

C. Between 2000 and 2001, Grand Hall for two consecutive years was 

recognized by its customer Wal-Mart (Sam’s Club brand) and was 

bestowed the ”Supplier of the year award.” 

D. In the year 2000, Grand Hall’s product, Kenmore Elite #15790, was 

recognized by Sears and was bestowed the ”Consumers Digest Best 

Buy Award.” 

E. In 2002, Grand Hall was included as part of Sears “20th Anniversary 

Partners in Progress.” 

F. In 2002, Sears bestowed upon Grand Hall the award “Category 

Innovation Vendor of the Year.” 

G. In 2003, Sears bestowed upon Grand Hall the awards “21st 

anniversary partners in progress” and “Category innovation vendor of 

the year.” 

H. In 2003, K-Mart bestowed upon Grand Hall the award “Supplier 

Partnership Recognition.” 

37

I. In 2003 and 2004, Grand Hall received the WCC Technical Achievement 

Award. 

J. In 2003, Grand Hall received the WCC Supplier of the Year award. 

4. Long-term advantages, disadvantages and solutions: 

(1) Advantages 

A. Professional management team 

Grand Hall has been in the gas BBQ grill and related products’ 

business field for many years. Hence, it possesses a wealth of 

product technology, production know-how, and knowledge 

regarding the direction of future market trends. Grand Hall has the 

ability to detect supply/demand dynamics and acts as a market 

leader in terms of product development. Grand Hall is also highly 

cost-competitive and, through the production of niche product lines, 

provides consumers with a broader range of product choices. As 

one of the market leaders in its field, Grand Hall is able to obtain 

large-volume stable orders from major international vendors. 

B. Grand Hall matches international vendors in terms of technology and 

quality 

As a member of BIPA, Grand Hall receives orders from major 

international vendors. Membership of BIPA also led to the R&D 

and sale of own brand products. In 1996, Grand Hall’s Globe Café 

product won a quality award. Membership of BIPA has been most 

useful in the expansion of Grand Hall’s market share. Products 

exported overseas must pass and adhere to the standards set by 

the CSA (Canada Standard Association) and Australia’s AGA 

(Australia Gas Association). As the products of Grand Hall adhere to 

international standards, the company is competitive both in terms of 

quality and technology. Leading major vendors in terms of product 

updates/revisions/improvements, Grand Hall is recognized as a 

market leader. 

C. Effective cost-down measures at the production level 

Thanks to Grand Hall’s outstanding R&D, it has a lead over 

international players in terms of both manufacturing and costs. In 

order to further reduce production costs and expand its competitive 

advantage, Grand Hall transferred BBQ grill production to Zhuhai 

(Guangdong) and Huiyang in 2000. Major upstream factories, i.e. 

aluminum casting, iron casting, commercial foundry operations and 

BBQ grill valve, have all purchased land in the vicinity of the grill 

production factory. When construction of the new factories is 

completed, costs will be lowered. In addition, delivery time will also 

38

e reduced. By maintaining current high standards of quality and 

also drastically increasing products’ cost-competitiveness, Grand 

Hall will be in an even more favorable position to obtain orders 

from major international vendors and increase its market share. 

D. Integration of production, sales and supply chain 

Having gained experience from operating for many years, Grand 

Hall has a solid understanding of upstream product production 

supply, downstream channel expansion, and product positioning 

and pricing. Combining production experience, overseas marketing 

prowess and after-sales service network, Grand Hall has managed 

to establish an all-encompassing production, sales and supply 

chain. Few other domestic or overseas companies can compete 

with Grand Hall in terms of integration and scale of operations. 

(2) Disadvantages 

A. Industry price war 

In North America, the BBQ grill industry is gradually becoming a mature 

industry. There are numerous suppliers of standard products. There are 

only limited functional differences from product to product. Fierce price 

competition may impact Grand Hall’s profitability. 

Solutions: 

In order to effectively avoid price competition, Grand Hall utilizes its 

advantages in terms of production costs and molding know-how. In 

addition to developing new multifunctional models with higher addedvalue 

to attract consumers, Grand Hall is also attempting to expand into 

niche areas in terms of specification and/or price that inflexible major 

companies will be unable to exploit to gain additional orders. By 

maintaining high standards in terms of product quality and, in addition, 

offering strong after-sales service, Grand Hall aims to strengthen its 

business relationships with its customers and ensure that its customers 

remain loyal to Grand Hall. 

B. Raw material prices continue to rise 

Since the beginning of 2003, steel and iron raw material prices have 

risen more than 50%. This factor has impacted the entire industry. Grand 

Hall, aside from informing its customers about the price rises of its 

products to reflect raw material price increases on a timely basis, is also 

looking into using other appropriate raw materials or porcelain steel 

manufacturing process to take the place of stainless steel. 

C. Appreciation of the New Taiwan (NT) dollar 

Since 2004, the NT dollar has appreciated by 6.3% against the US dollar. 

This factor significantly impacts the performance of export-oriented 

companies. Although the majority of Grand Hall’s business transactions 

39

are quoted in US dollars, the NT dollar appreciation will still affect the 

profitability and competitiveness of the company. In addition to continue 

to utilize foreign exchange forward contracts, Grand Hall will also 

carefully monitor US dollar exchange rate fluctuations and adjust 

quotation prices accordingly. 

(2) Major products’ uses and manufacturing processes: 

1. Major products’ uses 

(1) Outdoor gas BBQ grill 

Typically used in a family garden or by the side of a pool in a holiday 

center. Usually used in conjunction with BBQ or cocktail party activities. 

The outdoor gas BBQ grill is a leisure product. Outdoor BBQ grills are 

commonly used in North America and Australia. 

(2) Gas valve 

Grand Hall’s gas valve controls the flow of gas into and out of the 

cylinder. When filling the cylinder, the gas valve will automatically close 

when the cylinder is 80% full so as to avoid the danger of over-filling. In 

the event of a significant temperature increase or fire, the valve will 

automatically close to prevent the release of additional gas. Additionally, 

a safety release valve will automatically open so as to avoid any 

potential explosion and/or disaster. 

(3) D-Cleater 

Specifically designed for American football and related sports, the D- 

Cleater allows American football players to engage in strength training 

and raise their level of competitiveness. The D-Cleater can be utilized 

both indoors and outdoors and is also suitable for individual training. 

Training with the D-Cleater raises the likelihood of victory in competitive 

matches. 

40

2. Manufacturing process: 

(1) Gas products 

Grand Hall usually purchases outdoor grill and related products from 

affiliated factories. Grand Hall only provides a small proportion of raw 

materials. The manufacturing process is outlined below: 

(2) D-Cleater 

Receive customers' order 

Arrange production with affiliated factory 

Estimate material costs 

Purchase finished products and part of raw 

materials after receiving order 

Raw materials QC check 

41 

Raw materials dispatched to 

affiliated factory 

Monitor production 

Upon completion, store products 

in warehouse 

Product QC check 

The manufacturing process for the D-Cleater is outlined below: 

Products packaged for export

Company receives 

order 

Arrange production 

with Taichung factory 

Estimate material 

costs and wages 

Raw material 

purchase 

Raw material QC 

check 

(3) Major raw materials status: 

1. Gas products 

42 

Raw material storage 

in warehouse 

Product assembly 

After testing, return 

to warehouse 

Finished product QC 

check 

Products packaged 

for export 

Grand Hall usually directly purchases gas BBQ grills and related 

products from its affiliated factories. The major affiliated factories 

dealing in gas BBQ grills are Allegiance, Power Glory and Zhuhai 

Grand Hall. Production lines are all located in Guangdong province’s 

Zhuhai or Huiyang. To accommodate Grand Hall’s integrated 

production/sales strategy, specific customer orders are allocated to 

specific affiliated factories. As the gas valves manufactured by affiliate 

Grand Gas have obtained North America’s AGA certification, Grand 

Hall has selected Grand Gas to supply gas valves. Over the years, the 

supply of goods from affiliated factories has remained stable. The 

affiliated factories meet Grand Hall’s requirements in terms of quality, 

price and after-sales service. 

2. D-Cleater 

The D-Cleater is constructed from the following raw materials: cold 

rolled iron plate that undergoes cutting, welding and lacquering; PU 

foam; nylon material; high density wooden board; and nylon “turf.” 

Assembly is carried out in Taichung, owing to the factory’s advantages 

in terms of quality, pricing and technology know-how. The Taichung 

factory both accords with Grand Hall’s requirements and also satisfies 

customer requirements.

(4) Customers that accounted for over 10% of shipments in either of the past two 

years: 

1. Name list of customers accounting for over 10% of shipments: 

Item Customer Sales 

43 


2004 2003 

Proportion 

of total 

sales (%) 

Customer Sales 

Proportion 

of total 

sales (%) 

1 A 2,416,045 37.93% A 2,110,999 31.80% 

2 B 1,314,865 20.64% B 2,000,664 30.14% 

Total 6,368,981 100.00% Total 6,637,716 100.00% 

Reasons for sales variations are listed below: 

Orders from customer A increased owing to a promotion offered by 

Grand Hall. In the second half of the year, sales to customer B 

decreased significantly owing to slower shipments and inventory 

adjustments. 

2. Name list of suppliers accounting for over 10% of purchases: 

Item 

Supplier Purchases 

2004 2003 

Proportion 

of total 

purchases 

(%) 

Unit: 

NT$ thousand 

Supplier Purchases 

Proportion 

of total 

purchases 

(%) 

1 C 2,013,595 40.26% C 2,309,599 45.33% 

2 D 1,801,442 36.02% D 1,591,940 31.25% 

3 Cyber Vision 584,148 11.68% Cyber Vision 555,914 10.91% 

Total 5,001,886 100.00% Total 5,094,569 100.00% 

Reasons for variations in purchase amounts: 

Purchases from supplier C were lower in 2004, owing to customer B’s 

slower shipments; Purchases from supplier D increased in 2004, owing to 

increased orders from customer A.

(5) Recent two years’ production volume and value: 

Major product 

Outdoor gas 

BBQ grill 

2004 2003 

44 

Unit: unit; NT$ thousand 

Volume Value Volume Value 

663,58 4,302,247 605,005 4,370,496 

Gas valve 6,080,927 464,176 4,822,709 497,292 

Outdoor heater 11,112 38,968 1,391 4,083 

Components 929,353 142,177 1,582,145 228,680 

D-Cleater 140 5,790 0 0 

Total 7,685,117 4,953,358 7,011,250 5,100,551 

Note: As Grand Hall’s products are manufactured by affiliated companies, Grand Hall does not have its own 

production capacity; the D-Cleater is currently under trial production 

(6) Sales volume and value in the most recent two years: 

2004 2003 

Unit: unit; NT$ thousand 

Domestic sales Overseas sales Domestic sales Overseas sales 

Major products Volume Value Volume Value Volume Value Volume Value 

Outdoor gas 

BBQ grill 

29 432 663,556 5,449,399 103 1,130 604,902 5,562,504 

Gas valve 0 0 6,080,927 538,015 0 0 4,822,709 623,978 

Outdoor heater 0 0 11,112 53,839 0 0 1,391 6,819 

Components 0 0 929,353 215,009 0 0 1,582,145 340,211 

D-Cleater 0 0 140 4,801 0 0 0 0 

Total 29 432 7,685,088 6,261,063 103 1,130 7,011,147 6,533,512

3. Employees: 

Recent two years’ employee headcount, average length of service, average 

age and academic qualifications: 

Employee numbers 

45 

2003 2004 

April 30, 

2005 

Sales 16 17 17 

Administration 27 25 25 

R&D 17 22 24 

Manufacturers 0 5 5 

Total 60 69 71 

Average age (years) 37.18 38.54 38.39 

Average length of service (years) 5.52 6.06 6.11 

Academic record 

4. Environmental protection: 

(1) Legal regulations 

Masters 8% 8% 8% 

Bachelors 82% 83% 83% 

Senior high 8% 3% 3% 

Below senior high 2% 6% 6% 

1. Status of licenses for polluting equipment and pollutant emissions: 

(1) Gas products 

Grand Hall’s products are manufactured by partnership factories. All production 

processes are carried out using environmentally friendly equipment/machinery 

and so do not require licenses for polluting equipment and pollutant emissions. 

(2) Taichung factory 

Grand Hall’s Taichung factory is registered to manufacture metal furniture and 

ornaments, outdoor heaters, leisure items and sports equipment. As the 

assembly process in the factory does not cause environmental pollution, Grand 

Hall does not require environmental protection-related licenses. 

2. Status of pollution prevention expenses: None. 

3. Status of environmental protection unit: None.

(2) Investment in environmental protection equipment, and the equipment’s uses 

and benefits: None. 

(3) Measures the company has implemented to improve environmental pollution 

during 2004 and up to the date of publication of this report: Grand Hall’s business 

does not result in environmental pollution. 

(4) Total losses (including compensation) the company has suffered due to 

environmental pollution during 2004 and up to the date of publication of this 

report, and possible future expenses: None. 

(5) Influence of current pollution levels and improvements to the current levels on 

company profits, competitiveness and capital expenditure, and estimation of 

major environmental protection-related expenses over the next two years: None. 

5. Labor-capital relations: 

(1) Company employee welfare measures, retirement/pension system and 

implementation and labor agreements: 

1. Employee welfare measures 

In addition to labor insurance, health insurance and extraordinary leave of 

absence, Grand Hall also provides the following for its employees: 

(1) Employee group accident insurance 

(2) Employee overseas business travel insurance 

(3) Establishment of employee welfare association to allot funds to cover the 

following welfare measures: 

a. Employee marriage allowance 

b. Employee gift certificates – issued on Taiwan’s three major annual 

holidays (Chinese New Year’s Eve, Dragon Boat Festival and Midautumn 

Festival) and Labor Day (May 1) 

c. Employee hospitalization subsidy 

d. Employee and dependants’ funeral subsidy 

e. Monthly company-sponsored birthday party and periodic dinner parties 

f. Bi-annual education subsidy for employee’s offspring 

g. Employee educational training subsidy 

h. Employee leisure activities 

(4) Employee bonus 

2. Study 

Grand Hall employees may apply to participate in work-related training in 

order to expand their professional knowledge base. 

3. Training 

46

Grand Hall provides educational training courses to employees on a 

periodic basis. In addition, the company purchases relevant related books 

for employees to borrow. 

4. Pension/ retirement system 

Grand Hall transmits employee labor payments on a monthly basis to a 

central trust account in preparation for future pension fund requirements. In 

addition, Grand Hall has established an employee association to oversee 

the running of the trust. 

5. Labor agreements 

Grand Hall abides by Taiwan’s Labor Law. To date, the company has 

experienced no labor dispute. 

6. Employee job security 

Grand Hall is an organization always looking to expand its operations. In the 

event of departmental/organizational restructuring, the company does not 

downsize or trim workforce numbers. To date, Grand Hall has not been 

involved in a labor dispute with any employee. 

(2) Labor disputes in the last year leading to losses; estimate of the cost of 

current and future disputes, and appropriate measures to counteract such an 

occurrence: None. 

47

6. Important Contracts: 

Up to date of publication on-going contracts and recent year completed 

contracts: 

Agreement 

Commission 

contract 

Commission 

contract 

After-sales service and 

commission contract 

After-sales and 

inventory contract 

Company 

name 

Focus Lifestyle Pty 

Ltd. 

David S. Walsh & 

Association, Inc. 

Contract 

period 

48 

Major contents Limitations 

02.01.’05/01 

.01.’05/01.0 

7.’050/11.22 

.’04/10.23.’0 Based on BBQ grill sales to Australia, collect 

4/07.01.’04/ commission of 3-10% or a fixed fee to 

09.05.’04/05 provide a maintenance service for 

.20.’04/06.0 

1.’04/04.01.’ 

04/03.01.’04 

/01.01.’04 ~ 

consumers 

10.22.’04 ~ 

12.22.’04 ~ 

Grand Hall USA, Inc 01.01.’04 

Worthington Cylinder 

Corp. 

01.01.’05~ 

12.31.’05 

Based on gas valve sales to WCC, collect 

commission of 1% to provide after-sales 

service 

Based on BBQ grill sales to the US and 

Canada, collect after-sales service expenses 

of 3-5% to provide local maintenance 

service, and obtain commission for channel 

expansion 

Selling price, terms of payment and 

inventory volume regulations 

None 

None 

None 

Must maintain specified 

inventory level

1. Plans: 

Ⅳ. Financing plans and execution status 

The as yet incomplete issuance through public offering or private placement or 

issuance within the recent three years of which the result has yet to become 

apparent: None. 

2. Execution status: 

Purpose and analysis of issuance(s) up to one quarter prior to publication, and 

degree of implementation: None. 

49

Item 

Ⅴ. Financial review 

1. Most recent five-year financial review: 

(1) Condensed balance sheet and statement of income: 

A. Condensed balance sheet 

Year 

Recent five-year financial summary (Note 1) 

50 


2004 2003 2002 2001 2000 

Up to March 

31, 2005 

(Note 2) 

Current assets 721,132 1,017,965 1,602,948 729,852 821,647 1,342,611 

LT investments (Note 3) 1,103,777 962,701 508,913 290,393 212,755 1,122,219 

Fixed Assets 476,920 286,145 277,649 278,670 240,438 482,265 

Intangible assets 940 621 3,299 5,177 5,348 1,179 

Other assets 3,890 3,806 35,852 45,679 34,745 3,890 

Total assets 2,306,659 2,271,238 2,428,661 1,349,771 1,314,933 2,952,164 

Current liabilities 

Before distribution 720,398 644,664 1,055,472 513,553 716,031 1,154,704 

After distribution - 1,233,768 1,494,310 703,161 771,737 - 

LT liabilities - - 75,200 84,800 132,500 - 

Other liabilities 60,297 51,884 17,871 6,531 3,042 64,615 

Total liabilities 

Before distribution 780,695 716,548 1,148,543 604,884 851,573 1,219,319 

After distribution - 1,285,652 1,587,381 794,492 907,279 - 

Capital 724,230 624,500 477,416 367,243 262,317 724,230 

Capital reserve - - 90 90 90 - 

Retained 

earnings 

Unrealized loss on LT investments 

Before distribution 867,057 936,830 794,376 370,686 198,787 1,080,213 

After distribution - 267,996 208,544 70,905 38,155 - 

- - - - - 

Cumulative translation adjustment (65,323) (6,640) 8,236 6,868 2,166 (71,598) 

Unrecognized pension cost losses 

Total equity 

- - - - - 

Before distribution 1,525,964 1,544,690 1,280,118 744,887 463,360 1,732,845 

After distribution - 975,586 841,280 555,279 407,654 - 

Note 1: Financial information already audited by CPA. 

Note 2: Financial information already reviewed by CPA. 

Note 3: Includes pre-paid long-term investments.

B. Condensed statement of income: 

Year 


Item 2004 2003 2002 2001 2000 

51 


Up to March 

31, 2005 

(Note 2) 

Net Sales Revenue 6,261,495 6,534,642 6,025,434 3,338,675 2,543,956 2,048,876 

Gross profits 1,308,137 1,434,091 1,404,896 812,167 489,030 381,057 

Operating income 643,502 769,652 802,221 389,128 205,341 251,410 

Non-operating income 152,143 210,970 153,757 82,190 75,268 40,550 

Non-operating expenses 4,901 19,527 11,846 46,389 52,676 10,353 

Income from continuing operations 790,744 961,095 944,132 424,929 227,933 281,607 

before tax 

Income from continuing operations 599,061 728,286 723,471 332,531 179,810 213,156 

Discontinued operations - - - - - - 

Extraordinary items - - - - - - 

Cumulative effect of change in 

accounting principle 

- - - - - - 

Net income 599,061 728,286 723,471 332,531 179,810 213,156 

Earnings per share (NT$) 8.27 11.66 15.15 9.05 6.85 2.94 


Note 2: Financial information already reviewed by CPA. 

(2) Most recent five years’ auditors’ opinion: 

Year CPA name Company name Auditors’ opinion 

2000 Li Meng-hsiu, Tsai Wen-ching First Elite CPA An unqualified opinion 



2003 Tsai Wen-ching, Hsu Jui-yu First Elite CPA An unqualified opinion 

2004 Li Meng-hsiu, Hsu Jui-yu First Elite CPA An unqualified opinion

Item 

Capital structure 

analysis (%) 

Liquidity analysis 

(%) 

Operating 

performance 

analysis 

Return on 

invest. 

Analysis (%) 

Cash flow (%) 

Leverage 

2. Recent five-year financial analysis: 

Year 


2004 2003 2002 2001 2000 

52 

Up to 

March 31, 

2005 (Note 

2 ) 

Debt ratio 33.85 31.55 47.29 44.81 64.76 41.30 

LT funds to fixed assets 319.96 543.32 488.14 297.73 247.82 359.31 

Current ratio 100.10 153.15 151.87 142.12 114.75 116.27 

Quick ratio 83.62 133.62 135.70 125.99 96.85 102.05 

Times interest earned 18390.40 144625.5 70452.61 5967.56 7498.02 1530.38 

6 

Average collection turnover (times) 14.20 13.66 13.29 10.47 12.13 11.21 

Average collection days 25.70 26.72 27.46 34.86 30.09 32.56 

Average inventory turnover (times) 47.78 41.45 42.09 28.43 18.10 48.72 

Average payable turnover (times) 11.74 9.27 8.82 5.43 4.80 10.05 

Average inventory turnover days 7.64 8.81 8.67 12.84 20.17 7.49 

Fixed assets turnover (times) 13.13 22.84 21.70 11.98 10.58 16.99 

Total assets turnover (times) 2.71 2.88 2.48 2.47 1.93 2.78 

Return on total assets 26.17 31.01 38.35 25.37 18.85 32.45 

Return on equity 38.89 51.38 71.45 55.04 47.02 52.33 

Proportion 

to capital 

Operating income to 

capital 

Income before tax to 

capital 

88.85 123.24 168.03 105.96 78.28 34.71 

109.18 153.90 197.76 115.71 86.89 38.88 

Net income to sales 9.57 11.15 12.01 9.96 7.07 10.40 

Earnings per share (NT$) 8.27 11.66 15.15 9.05 4.90 2.94 

Cash flow ratio 82.96 77.93 86.74 29.57 64.78 9.37 

Cash flow adequacy ratio 135.99 172.46 218.39 187.67 178.71 127.35 

Cash flow reinvestment 

ratio 

2.04 5.13 50.51 11.24 71.15 5.51 

Operating leverage 1.07 1.05 1.04 1.06 1.08 1.05 

Financial leverage 1.00 1.00 1.00 1.02 1.02 1.00 


Note 2: Financial information already reviewed by CPA.

Financial analysis equations 

1. Capital structure analysis 

(1) Debts ratio = Total liabilities / total assets. 

(2) Long-term funds to fixed assets = (Stockholders’ equity + Long-term liabilities) / 

Net fixed assets. 

2. Liquidity analysis 

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

(2) Quick ratio = (Current assets – inventories – pre-paid expenses) / Current 

liabilities. 

(3) Times interest earned = Earnings before interest and taxes / Interest expenses. 

3. Operating performance analysis 

(1) Average collection turnover = Net sales / Average trade receivables. 

(2) Average collection days = 365 / Average collection turnover (times). 

(3) Average inventory turnover times = Cost of goods sold / Average inventory. 

(4) Average payable turnover (times) = Cost of goods sold / Average trade payables. 

(5) Average inventory turnover days = 365 / Average inventory turnover (times). 

(6) Fixed assets turnover (times) = Net sales / Average fixed assets. 

(7) Total assets turnover (times) = Net sales / Average total assets. 

4. Return on investment analysis 

(1) Return on total assets = [Net income + interest expenses x (1- tax rate)] / 

Average total assets. 

(2) Return on equity = Net income / Average stockholders’ equity. 

(3) Net income to sales = Net income / Net sales. 

(4) Earnings per share = (Net income – Preferred stock dividend) / Weighted 

average number of shares outstanding. 

5. Cash flow 

(1) Cash flow ratio = Net cash provided by operating activities / Current liabilities. 

(2) Cash flow adequacy ratio = Five-year sum of cash from operations / Five-year 

sum of capital expenditures + Inventory additions + Cash dividends. 

(3) Cash flow reinvestment ratio = (Cash provided by operating activities – Cash 

dividends) / Gross fixed assets + Long-term investments + Other assets + 

Working capital). 

6. Leverage 

(1) Operating leverage = (Net sales – Variable costs) / Income from operations. 

(2) Financial leverage = Income from operations / (Income from operations – Interest 

expenses). 

53

3. Audit report of supervisors, 2004: 

The board of directors of the company has prepared the 2004 financial report 

including balance sheet, statement of income, statements of changes in 

shareholders’ equity, and statement of cash flows, and Li Meng-hsiu and Hsu Juiyu 

of First Elite CPA have been retained by the board of directors of the company 

to issue an audit report. The undersigned directors have reviewed the aforesaid 

documents and did not find any incompliance. In accordance with article 219 of 

the Company Law, it is hereby submitted for the shareholders’ review and 

perusal. 

Grand Hall Enterprise Co., Ltd, 2005 shareholders’ meeting 

4. Independent auditors’ report: Attachment 1. 

54 

Supervisors: Shih Ta-hsiung 

Chang Chia-fu 

Hung Wen-yu 

April 7, 2004 

5. Consolidated Financial Statements and Independent Auditor’s report: 

Attachment 2. 

6. Impact of financial difficulty for company or related companies: No such 

occurrence.

Ⅵ. Financial Status, operating results, and risk management 

1. Analysis of financial position 

(Explanations for significant changes in financial position (over 20% or NT$10 

million) and details as to how the changes will affect the company, and future 

plans) 

Item 

Year 

2004 2003 

55 


Variance 

Amount % 

Current assets 721,132 1,017,965 (296,833) (29.16) 

LT investments 1,103,777 962,701 141,076 14.65% 

Fixed assets 476,920 286,145 190,775 66.67% 

Intangible assets 940 621 319 51.37% 

Other assets 3,890 3,806 84 2.21% 

Total assets 2,306,659 2,271,238 35,421 1.56% 

Current liabilities 720,398 664,664 55,734 8.39 

Other liabilities 60,297 51,884 8,413 16.22% 

Total liabilities 780,695 716,548 64,147 9.00% 

Capital stock 724,230 624,500 99,730 15.97% 

Cumulative transaction 

adjustment 

(65,323) (6,640) (58,683) (883.78%) 

Retained earnings 867,057 936,830 (69,773) (7.45%) 

Total equity 1,525,964 1,554,690 (28,726) (1.85%) 

Major reasons, affect and future plans regarding significant changes in company 

assets, liabilities and shareholders’ equity: 

1. Current assets: An increase in long-term investments and the purchase of 

fixed assets in 2004 caused the reduction in current assets. 

2. Fixed assets: Due to the purchase in 2004 of land, factory buildings and 

related equipment in Taichung. 

3. Cumulative transaction adjustment: The company, making the majority of longterm 

investments in foreign currency, was affected by exchange fluctuations at 

the end of 2004, leading to a negative increase.

2. Analysis of operating results 

(Explanations for significant changes (over 20% and of NT$10 million or above)) 

(1) Operating results analysis: 

Item 

Year 

2004 2003 

Total Total 

56 


Variance % change 

Sales 6,368,981 6,637,716 (268,735) (4.05) 

Less: Sales returns 0 958 (958) (100.00) 

Sales allowances 107,486 102,116 5,370 5.26 

Net sales 6,261,495 6,534,642 (273,147) (4.18) 

Operating costs 4,953,358 5,100,551 (147,193) (2.89) 

Gross profit 1,308,137 1,434,091 (125,954) (8.78) 

Operating expenses 664,635 664,439 196 0.03 

Operating income 643,502 769,652 126,150 16.39 

Non-operating income 152,143 210,970 58,827 (27.88) 

Non-operating expenses 4,901 19,527 (14,626) (74.90) 

Income from cont. op. pre tax 790,744 961,095 (170,351) (17.72) 

Income tax 191,683 232,809 (41,126) (17.67) 

Net income 599,061 728,286 (129,225) (17.74) 

Major reasons, affect and future plans regarding significant changes in sales, 

operating income and pre-tax income: 

1. The reduction in non-operating income in 2004 is attributed to affiliates’ higher 

costs of raw materials, leading to lower-than-anticipated income. 

2. The reduction in non-operating expenses in 2004 is attributed to lower fixed 

asset losses in the period. 

(2) Estimation of sales in 2005, influence on company’s financial performance 

and future plans: 

Company’s shipment estimates for 2005 are based on overall operating strategy, 

departmental targets and budgets. Grand Hall does not project industry

development trends to have a major disadvantageous impact on future operating 

performance. Shipment projections for 2005 are outlined below: 

Item 2005 (forecast) 

Outdoor gas barbecue grill 570,000 

Gas valve 4,900,000 

Outdoor heater 7,000 

Parts & accessories 400,000 

D-Cleater 250 

3. Analysis of cash flow 

In 2004, analysis of cash flow, remedy for cash shortfall and liquidity analysis: 

(1) Cash flow analysis in 2004: 

1. NT$597,631,000 net cash provided by operating activities, mainly from net 

income. 

57 

Unit: unit 

2. NT$414,023,000 net cash outflows from investing activities, mainly from the 

purchase of land and factory buildings in Taichung, and an increase in long-term 

investments. 

3. NT$529,104,000 net cash outflows from financing activities, mainly from cash 

dividends. 

(2) Remedy for cash shortfall and liquidity analysis: NA 

(3) Cash flow analysis in 2005 

Cash and 

cash 

equivalents 

at the 

beginning of 

the year (1) 

Projected net 

cash flows 

provided by 

operating 

activities (2) 

Projected 

cash outflows 

(3) 

Projected 

balance 

(deficiency) of 

net cash and 

equivalents 

1+2-3 


Source of funding in case of 

cash flow deficiency 

Investment 

plan 

Financing 

plan 

90,644 551,124 402,115 239,653 - -

4. Impact of major capital expenditure on operations 

(1) Execution status of major capital expenditure and source of funding: 

Plan 

Land and 

factory for 

production 

of water 

heater 

Equipment 

for 

production 

of water 

heater 

Actual/projected 

funding source 

Operating cash 

flow 

Operating cash 

flow 

Actual/projected 

completion date Capex 

58 

Actual/projected capex 

Unit: NT$ 

thousand 

2003 2004 2005 2006 2007 

Dec. 2005 129,157 - 128,151 1,006 - - 

Dec. 2005 17,196 - 1,239 15,957 - - 

(2) Expected benefit from capital expenditure: Purchase of real estate with own 

capital for R&D and production of new product projected to boost revenue growth. 

5. Long-term investments 

(1) 2004 investment policy: Company makes investment decisions according to 

its internal control system and the “Procedure for Handling Acquisition and 

disposal of Assets. 

(2) Major reasons for profits/losses from investments, and improvement plans: 

Item 

Explanation 

Global-Tech Int’ 

Inc. 

Amount 

(note) 

55,396 

Policy 

Main reason for 

profit or loss 

Reduction in 

Zhuhai Grand 

profitability due to 

Hall, Inc. 

higher raw material 

capital 

costs and customer 

increase 

price adjustments 

through Globalfor 

Zhuhai Grand 

Tech 

Hall Inc. 

Note: Investments amounted to over 5% of paid-in capital in 2004 

6. Risk analysis: 

Improvement 

plan 

NA 


Other future 

investment 

plans 

None 

(1) Impact on corporate profitability from fluctuating interest rates, exchange 

rates and inflation:

1. Interest rate fluctuations: 

Income –The majority of short-term surplus capital is used to purchase 

short-term Certificates of Deposit (CD) or bond funds. As bank deposit 

interest rates have remained low throughout the year, interest rate 

fluctuations have not had a significant impact on the company’s profits. 

Expenses – The majority of Grand Hall’s loans are short-term, for a period 

of one year. As loan amounts are small and interest rates remain low, the 

risk of interest rate fluctuations affecting company profitability is minimal. 

2. Foreign exchange fluctuation risks: 

The majority of Grand Hall’s products are exported, and the majority of 

products are priced in US dollars. As major affiliated factories/suppliers 

are based in China, the majority of purchases are also made in US 

dollars. Therefore a natural hedge exists, and the risks associated with 

foreign exchange fluctuations are to a large extent reduced. Foreign 

exchange profits (losses) did not significantly impact Grand Hall’s 

profitability in 2004. In order to lower the risk of foreign exchange 

fluctuations affecting the company, Grand Hall utilizes forward exchange 

contracts. 

3. Inflation risks: 

In 2004, Taiwan’s price index underwent little change; therefore, inflation 

has not significantly impacted Grand Hall. 

(2) Profit or loss from activities in high risk and highly leveraged investments, 

loans provided to others, endorsements and guarantees, and derivatives: 

1. Grand Hall’s high-risk, highly leveraged investment policy: The company 

does not have such an investment policy and has no intention of carrying 

out such transactions. 

2. Grand Hall’s policy on loans provided to others: The company will provide 

loans to others in accordance with set procedures which have been 

approved by the board of directors and shareholders’ meeting. Grand Hall 

has no record of providing a loan and then failing to collect repayment. 

3. Endorsement and guarantee policy: Grand Hall’s “endorsement and 

guarantee” procedures are passed by the board of directors and 

shareholders. Currently, Grand Hall is not acting as an endorser or 

guarantor. 

4. Derivatives policy: According to Grand Hall’s “derivatives” procedures, any 

such transaction must be agreed upon by the board of directors and 

shareholders. Grand Hall only utilizes forward exchange contracts in order 

to avoid currency fluctuations. Currency exchange profits/losses are offset 

by the hedging procedure. 

59

(3) Upcoming R&D plans and estimation of R&D costs: 

1. Upcoming R&D plans: In addition to continuing R&D into improving existing 

barbecue grills and producing new barbecue grills, Grand Hall is also 

engaged in R&D on indoor gas grills and water heaters. 

2. Estimation of R&D costs: R&D costs for 2005 are projected at 58,000,000. 

(4) Impact on the company’s financial operations and contingency action 

regarding recent changes in domestic and international policies and 

regulations: 

Although Grand Hall is based in Taiwan, almost 100% of its products are for 

the export market. Therefore the affect of changes to domestic policies and 

laws on the company is insignificant. As most of Grand Hall’s partner factories 

are located in China, under the premise that policies toward China will remain 

unchanged, the company does not expect its financial situation and sales to 

be affected. As a majority of Grand Hall’s products are exported to North 

America and most of the company’s products are gas-related, if the 

government of North America choosing to strengthen certification standards, 

the company’s financial situation and sales would definitely be impacted. For 

Grand Hall, apart from increasing the safety level of its products, the company 

has also taken out product liability insurance so as to strengthen customer 

protection. 

(5) Impact on the company’s financial operations and contingency action 

regarding recent changes in technology: 

1. Technology changes: Grand Hall’s products belong to a traditional industry. 

R&D into new products is carried out in coordination with customers and 

taking into consideration consumer requirements. In 2004, there was no 

major technological development that would influence Grand Hall’s financial 

performance. 

2. Industry changes: In recent years, the barbecue grill industry in North America 

has gradually developed into a mature industry. Price competition is fierce. 

Foreign channels and manufacturers are outsourcing the manufacture of 

whole barbecue grills to Mainland China in order to save money. These 

developments have impacted the profitability of Grand Hall. In counteract this, 

in addition to continuing to strengthen the supply chain, product design R&D 

and raise added value, Grand Hall is also speeding up development of new 

products and new markets in order to spread risk. 

(6) Impact on the company’s risk management and contingency action regarding 

recent changes in corporate image: 

Grand Hall actively promotes the corporate brand image of O-(ORIGINAL) I 

-(IDEA) M-(MARKETING). In contrast to ODM companies, Grand Hall 

strives to create and develop the best possible products for the market and its 

60

customers. So, corporate image has a positive bearing on the company’s 

financial situation and sales. 

(7) Potential benefits and risks associated with mergers and acquisitions: NA. 

(8) Potential benefits and risks associated with capacity expansion: 

Within the first year of the establishment of Grand Hall’s Taichung factory, the 

company completed the manufacture and sale of the D-Cleater. Grand Hall has 

also currently commenced trial production of its new water heater product. Risks 

include the degree to which consumers embrace the new products, influencing 

sales figures. In order to reduce related risks, Grand Hall is strengthening 

product marketing, installation techniques and after-sales service. 

(9) Potential risks associated with purchase or sales concentration: 

1. Purchases: 

Grand Hall makes over 70% of its purchases from two companies. Grand Hall 

has developed and maintains long-term cooperative relationships with both 

companies. In addition to grasping overseas customer channels and after-sales 

service, Grand Hall’s investment in manufacturer Zhuhai Grand Hall Inc. through 

Global-Tech Int’l Inc. in 2004 also effectively lowers purchase concentration risk. 

2. Sales: 

Grand Hall makes around 60% of its sales to two customers. Both customers are 

major retailers in North America. Grand Hall has engaged in cooperation with 

these companies for many years. Ensuring excellent product quality and aftersales 

service, Grand Hall has gained the trust and confidence of these customers. 

In addition to constantly expanding its customer list and markets, Grand Hall 

maintains excellent sales relationships with its major customers, effectively 

lowering sales concentration risk. 

(10) Potential impact and risks associated with significant transfer of 

shareholdings from Grand Hall’s directors, supervisors, general managers, 

responsible person and major shareholders who hold more than 10% of Grand 

Hall’s outstanding shares: None. 

(11) Potential impact and risks associated with change of management: NA. 

(12) Litigation and non-litigated incidents: 

Major litigation, non-litigated incidents and administrative violation cases 

involving Grand Hall’s directors, supervisors, general managers, responsible 

61

person and major shareholders of which judgment has already been passed or 

up to the date of publication of which the litigation is still under process, that may 

have a major impact on shareholder equity or share price, including details, sum 

involved, start date of litigation and names of persons involved: 

In December 2004 and January 2005, Taipei National Tax Administration issued 

demand notices of payment of tax withholding on the various kinds of income to 

the president of Grand Hall. The notices outlined that in 2001 and 2002 amount 

of NT$32,882,390 and NT$59,681,640 should have been withheld, respectively, 

on part of overseas expenses of Grand Hall. Grand Hall management is of the 

opinion that tax authority misunderstood nature of the expenses which are not 

applicable to the withholding requirement. Request for corrections were already 

made. 

(13) Other important risks: None. 

7. Other important items: None. 

62

Ⅶ. Corporate governance 

1. Status of corporate governance and reasons (if any) for divergence from listed company rules: 

Item Current status 

(1) Company shareholder structure and shareholder interests: 

A. Procedures to deal with shareholder 

suggestions/disputes 

63 

Divergence from listed 

company rules and 

reason 

Stock division deals with shareholder related matters None 

B. Name list of major de facto controlling As majority of share capital controlled by board members 

shareholders and the ultimate controllers of and company supervisors, company fully aware of identity 

major shareholders 

of major de facto controlling shareholders and the ultimate 

controllers of major shareholders 

C. Establishment of risk-control measures 

and firewalls with related parties 

(2) Board of directors’ structure and obligations: 

Management procedures already set up to deal with 

invested companies and subsidiaries 

A. Independent directors Grand Hall has two independent directors None 

B. Periodic evaluation of CPA independence CPA selection reviewed on annual basis; change of CPA 

verified by board of directors 

(3) Board of supervisors’ structure and obligations: 

A. Independent supervisors Grand Hall has one independent supervisor None 

B. Communication channels between Supervisors may consult relevant documents and/or 

supervisors and company employees and request relevant information 

shareholders 

None 

None 

None 

None

Item Current status 

(4) Establishment of communication channels 

with related parties 

(5) Public disclosures: 

Already set up relevant department and communication 

channels 

64 

Divergence from listed 

company rules and 

reason 

A. Company website to divulge financial and 

business status and corporate governance Web site already established to divulge related information None 

information 

B. Other methods of information disclosure 

(6) Establishment of audit committee and other 

functional committees 

English website established; finance division responsible 

for compiling and divulging company information; 

spokesperson and deputy spokesperson deal with 

company-related enquiries 

Not yet established 

None 

None 

Currently under 

discussion

2. Divergence of corporate governance status from company’s corporate 

governance regulations (if established) which should be based on 

official “listed company administration regulations”: 

Grand Hall has not yet established corporate governance regulations; 

establishment of such regulations is currently still under discussion 

3. Other important information beneficial to the understanding of corporate 

governance procedures (such as directors and supervisors’ educational 

programs, attendance records of directors and supervisors at board meetings, 

risk management policy and its implementation, implementation of strategies 

to protect consumers and/or customers, implementation of procedures for 

directors to avoid conflicts of interest, purchase of liability insurance to protect 

directors and supervisors, and company’s social responsibilities etc.): 

(1) Directors and supervisors have participated in educational programs in 

accordance with Securities and Futures Bureau regulations. 

(2) Aside from extraordinary circumstances, directors and supervisors attend 

all board meeting and participate in all discussions. 

(3) Directors and supervisors avoid conflicts of interest. 

(4) Company takes out annual product liability insurance. 

(5) Procedures for shareholder meetings and board of director meetings 

already established and fully implemented. 

65

1. Affiliated information: 

Ⅷ. Special Disclosures 

a. Organization chart of affiliated enterprises: December 31, 2004 

66

Grand Hall 

Enterprise Co., Ltd. 

Grand Gas Equipment, Inc. (Taiwan), 

holding: 27.43% 

Grand Hall USA, Inc. (US), holding: 100% 

Cybercycle, Inc. (US), holding: 60% 

Cyber Vision Trading Co., Ltd. (B.V.I), 

holding: 65% 

Cybertech Ventures, Inc. (US), holding: 

100% 

Global-Tech Int'l Inc. (B.V.I.), holding: 

100% 

Legend Lifestyle Products Corp. (Taiwan), 

holding: 49% 

Focus Lifestyle Products Unit Trust 

(Australia), holding: 16% 

Focus Investment Unit Trust (Australia), 

holding: 16% 

67 

Grand Hall Holding Limited (Cayman 

Islands), holding: 100% - planning stage 

Zhuhai Grand Hall Technology (China), 

holding: 100% 

Zhuhai Cybertech Venture Inc. (China), 

holding: 100% 

Zhuhai Grand Hall, Inc. (China), holding: 

65% 

Grand Hall HK Ltd., holding: 100% - 

planning stage

(2) Basic data of affiliated enterprises: 

Date: Dec 31, 2004 / Unit: NT$/US$ thousand; Australian dollar; Hong Kong dollar 

Enterprise name 

Est. 

date 

Grand Gas Equipment, Inc. July ‘80 

Grand Hall USA, Inc. Feb ‘99 

Cybercycle, Inc. Feb ‘99 

Cybertech Ventures, Inc. Feb ‘99 

Global-Tech Int’l Inc. Oct ‘00 

Zhuhai Cybertech Venture 

Inc. 

Nov ‘00 

Zhuhai Grand Hall, Inc. Feb ‘01 

Cyber Vision Trading Co., Ltd. March 

‘01 


Corp. 

Zhuhai Grand Hall 

Technology Inc. 

Grand Hall Holding Ltd. (Note 

1) 

Aug ‘02 

Jul ‘03 

Jun ‘04 

Grand Hall HK Ltd. (Note 1) Aug ‘04 


Trust (Australia) 

Focus Investment Unit Trust & 

Pamt Pty Ltd. (Australia) 

Note 1: In preparation stage 

1993 

1996 

68 

Address Paid-in capital 

28 Kungyi Rd., Taichung Youth 

Industrial District, Jihnanli, 

Tachia town, Taichung County 

3838 West Miller Rd., Garland, 

TX 75041, USA 


TX 75041, USA 


TX 75041, USA 

24 De Castro Street, Wickhams 

Cay 1, Road Town, Tortola, 

B.V.I. 

Taiwan Industrial Park, Jingding 

town, Zhuhai, Guangdong, China 



24 De Castro Street, Wickhams 

Cay 1, Road Town, Tortola, 

B.V.I. 

8th Fl, No. 298 Rueiguang Rd., 

Neihu, Taipei, Taiwan 



4F, Harbour Centre, PO Box 

613, George Town, Grand 

Cayman, British West Indies 

RM 1303, Fu Fai Comm. Centre, 

27 Hillier Street, Sheung Wan, 

Hong Kong 

25-27 De Haviland Rd., 

Braeside, Victoria 3195 

Australia 

25-27 De Haviland Rd., 

Braeside, Victoria 3195 

Australia 

NT$168,432 

US$10,000 

US$500 

Major 

operations/production 

items 

Manufacture of gas 

valves 

Sale and 

maintenance of 

outdoor gas BBQ grill 

Sale and 

maintenance of 

indoor exercise bikes 

US$2,520 Holding company 

US$7,625 

US$1,000 

Trading and holding 

company 

Electronic lighter, 

thermometer and 

magnetic switch 

US$11,170 BBQ materials and 

metal products 

US$800 Trading company 

NT$30,000 

US$920 

US$50 

HK$10,000 

AU$100 

Sale of measuring 

equipment 

Electronic lighter, 

thermometer and 

magnetic switch 

Trading and holding 

company 

Sale of BBQ grill 

equipment 

Sale of BBQ grill 

equipment 

AU$6,200 Real estate rental

(3) Data of treated-as-controlled companies and affiliates: None. 

(4) Business of Grand Hall’s affiliated enterprises: 

A. Grand Hall USA, Inc. - Principally provides Grand Hall with the following 

services: 

a. Promotion of outdoor gas BBQ grill and heater products. 

b. Expansion of North American market and establishment of sales network. 

c. Provide customer assistance and after-sales service. 

B. Cybercycle, Inc. 

a. Promotion of exercise bike products. 

b. Expansion of North American market and establishment of sales network. 

c. Provide customer assistance and after-sales service. 

C. Cybertech Ventures, Inc. 

Holding company with investment in Zhuhai Cybertech Venture Inc. 

D. Global-Tech Int’l Inc. 

a. Outsource company for Zhuhai Cybertech Venture Inc. Carries out import 

and export of components and finished products of electronic lighters and 

magnetic switch. 

b. Investment in Zhuhai Grand Hall, Inc. 

E. Zhuhai Cybertech Venture Inc. 

Manufactures electronic lighters, magnetic switch and electronic scales. 

Products sold to Grand Hall’s partnership companies via Global-Tech Int’l 

Inc. 

F. Zhuhai Grand Hall Technology Inc. 

Plan to manufacture electronic lighters and electronic scales. Products will 

be sold to Grand Hall’s partnership companies via Global-Tech Int’l Inc. 

Currently at preparatory stage of development (preparing land site for 

construction). 

G. Grand Gas Equipment, Inc. 

Responsible for the manufacture of gas valves and subsequent sale to 

Grand Hall. 

H. Cyber Vision Trading Co., Ltd. 

Order receiving company for Zhuhai Grand Hall, Inc. Carries out import and 

export of exercise equipment, BBQ equipment and enamel goods 

(components and finished products). 

69

I. Grand Hall Holding Limited 

a. Holding company with investment in Grand Hall HK Limited. 

b. Company takes orders from European customers 

J. Grand Hall HK Limited 

Company to take orders for new products. 

K. Zhuhai Grand Hall Inc. 

Manufacture of BBQ equipment and enamel products, which are then sold 

to Grand Hall via Cyber Vision Trading Co., Ltd. 

L. Legend Lifestyle Products Corp. 

Sale of electronic scales, barbecue grill components and tire air pressure 

measuring equipment. Among which, electronic scales and barbecue grill 

components are sold to Grand Hall’s partnership companies. 

M. Focus Lifestyle Products Unit Trust & Focus Lifestyle Products Pty. Ltd. 

Thru Taiwanese and Australian investors, entrusts Focus Lifestyle Products 

Pty Ltd to assemble/install, market and sell gas fuel BBQ grills. 

N. Focus Investment Unit Trust & Pamt Pty. Ltd. 

Thru Taiwanese and Australian investors, entrusts Pamt Pty Ltd. to conduct 

real estate rental. 

70

(5) Directors, supervisors and general managers of affiliated enterprises: 

71 

April 30, 2005 

Name of Corporation Title Name or representative 

Grand Gas Equipment, Inc. 

President 

Director 

Grand Hall representative: William 

Home 

Chenmao Investment Co. 

representative: Lin Chi-shan 

Shareholding 

Shares % 

4,620,000 27.43 

2,811,600 16.69 

Lin Ching-ming 462,000 2.74 

Chiu Chiang Pao-lien 561,000 3.33 

Chiang Shih-tsung 451,440 2.68 

Chiayuan Investment representative: 

Tseng Kuo-cheng 

1,452,000 8.62 

Supervisor Chang Chia-fu 675,840 4.01 

General 

Manager 

Chang Chin-Cheng 264,000 1.57 

Grand Hall USA, Inc. President Grand Hall representative: Mrs. Heather Elliott 1,000,000 100.00 

Cybercylce, Inc. President Grand Hall representative: Mrs. Heather Elliott 30,000 60.00 

Cybertech Ventures, Inc. President Grand Hall representative: Mrs. Heather Elliott 252,000 100.00 

Global-Tech Int’l Inc. Director 

Grand Hall Holding Limited Director 

Grand Hall HK Limited Director 

Zhuhai Cybertech Venture Inc. 

Zhuhai Grand Hall Technology 

Inc. 

Cyber Vision Trading Co., Ltd. 

General 

Manager 

President 

Directors and 

supervisors – 

Cybertech 

Ventures, Inc. 

representatives 

President 

Director 


Home 


Home 

Grand Hall Holding Limited 

representative: William Home 

7,625,000 100.00 

50,000 100.00 

10,000 100.00 

Cybertech Ventures, Inc. representative: General 

manager Chuang Ming-tien 1,000,000 100.00 

Cybertech Ventures, Inc. representative: 

President Tseng Kuo-cheng 

William Home 

Tsai Kun-tsan 

Lin Shen-jen 

Kao Jui-hsin 


Home 

920,000 100.00 

520,000 65.00 

Tseng Kuo Cheng 0 0.00 

Chang Chia-fu 0 0.00

Zhuhai Grand Hall, Inc. 


Corp. 


Trust and Focus Investment 

Unit Trust 

President 

Director 

Director 

Director and 

supervisor 

President 

Director 

72 

Tsai Cheng-ta 160,000 20.00 

Global-Tech Int’l Inc. representative: Tseng Kuocheng 

Global-Tech Int’l Inc. representative: William 

Home 

7,260,500 65.00 

Allegiance Enterprises Ltd. representative: Tsai 

Cheng-ta 1,954,750 17.50 

Well Hope International Corp. representative: 

Chang Chia-fu 1,117,000 10.00 


Home 

Grand Hall representative: Lin Shen-jen 

Grand Hall representative: Chang Lin-tsang 

1,470,000 49.00 

Chuang Yi-jen 300,000 10.00 

Director and general 

manager Chen Chiang-hao 630,000 21.00 

Supervisor Tseng Kuo-cheng 0 0.00 

Director 

Mark Stone 9 Units 9.00 

Grand Hall representative: Alice Hsieh 16 Units 16.00 

Alan Pritchard 9 Units 9.00 

William Home 11 Units 11.00 

Heather Elliott 6 Units 6.00 

Note: As Zhuhai Cybertech Venture Inc., Zhuhai Grand Hall Technology Inc. and Zhuhai Grand Hall, Inc. are not listed 

companies, the above figures refer to total investments.

2. Summarized financial summary of affiliated companies: 

Name of Corporation Capital 

Date: Dec. 31, 2004; Unit: apart from EPS (NT$), other figures in NT$ thousand 

Total 

assets 

Total 

liabilities 

73 

Net 

worth 

Net 

operating 

revenues 

Operating 

income 

(loss) 

Net 

income 

(loss) 

Earning 

(loss) per 

share (net) 

Grand Gas Equipment, Inc. 168,432 452,617 108,353 344,264 745,847 113,898 82,067 4.87 

Grand Hall USA, Inc. 345,171 442,105 40,232 401,873 422,077 25,755 17,274 0.54 

Cybercycle, Inc. 16,210 6,016 0 6,016 0 (167) (92) (0.06) 

Cybertech Ventures, Inc. 82,746 60,399 0 60,399 0 (175) 778 0.10 

Global-Tech Int’l Inc. 261,113 252,985 8,618 244,367 101,405 11,474 2,176 0.01 

Zhuhai Cybertech Venture Inc. 32,250 41,052 13,514 27,538 80,316 749 909 0.03 

Zhuhai Grand Hall Technology Inc. 31,373 31,373 0 31,373 0 0 0 0 

Cyber Vision Trading Co., Ltd. 27,703 422,644 207,665 214,979 606,284 (110) 13,401 0.52 

Zhuhai Grand Hall, Inc. 382,597 579,328 275,036 304,292 396,205 (9,353) (17,089) (0.05) 

Legend Lifestyle Products Corp. 30,000 16,780 3,948 12,832 17,486 (9,555) (9,023) (3.01) 

Focus Lifestyle Products Unit Trust 

& Focus Lifestyle Products Pty Ltd. 

Focus Investment Unit Trust & 

Pamt Pty Ltd. 

Notes: 

2 127,526 41,318 86,208 421,478 33,117 35,667 356,666.42 

144 157,605 138,806 18,799 20,210 6,810 6,810 1,098.42 

1. Accounts of balance sheet calculated according to currency exchange rate on December 31, 2004, i.e. one US dollar to 31.917 

NT dollars. 

2. Accounts of income statement calculated according to the average currency exchange rate in 2004, i.e. one US dollar to 33.4061 

NT dollars. 

3. The accounting year for Focus Investment Unit Trust and Focus Lifestyle Products Unit Trust ran from July 1, 2003 to June 30, 

2004; the June 30, 2004 exchange rate of the Australian dollar to the NT dollar was one Australian dollar to 23.3013 NT dollars. The 

average exchange rate of the Australian dollar between July 1, 2003 and June 30, 2004 was one Australian dollar to 24.0663 NT 

dollars. 

4. Grand Hall Holding Limited and Grand Hall HK Limited are still at the preparation stage. 

(2) Consolidated financial statements: Refer to attachment 2 

(3) Affiliation report: NA.

2. Internal control system Execution status: 

(1) Statement of Internal Control (Translation): 

Grand Hall Enterprise Co., Ltd. 

Statement of Internal Control 

74 

Date: April 21, 2005 

The self-assessment of Grand Hall’s internal control was conducted for 

the year January 1, 2004 to December 31, 20034 based on Grand Hall’s 

internal control system. The results are described as follows: 

1. Grand Hall acknowledges that the board of directors and management 

personnel are responsible for establishing, executing and maintaining a 

sufficient internal control system, which has already been set up. The 

purposes of the internal control system are to provide a reasonable 

assurance of achieving the goals of efficiency and effectiveness of the 

operations, such as profitability, performance and the safeguard of the 

assets, the reliability of the financial reports and the compliance with the 

applicable laws and regulations. 

2. The internal control system has its inherent constraints, and it can only 

provide reasonable assurance of achieving the three goals mentioned 

above, no matter how well it has been designed. The effectiveness of the 

internal control system may vary due to changes in the environment and 

circumstances. Grand Hall has established an internal control system 

with self-monitoring capabilities, which can undertake corrective actions 

whenever a shortcoming is identified. 

3. Grand Hall’s assessment of the effectiveness of the design and 

execution of the internal control system is based on the standards 

covered by the Criteria Governing the Establishment of Internal Control 

System by Public Companies (the Criteria) issued by the Securities and 

Futures Commission of the Ministry of Finance, which specify the 

judgment items for evaluating the effectiveness of internal control. 

The internal control is divided into five components, based on the 

process of management control, according to the judgment items for 

internal control employed by the standards, such as: 1) Control 

environment; 2) Risk assessments; 3) Control activities; 4) Information 

and communication; and 5) Monitoring. Each component consists of 

certain items, which can be referred to in the criteria. 

4. Grand Hall has employed the judgment items mentioned above to 

evaluate the effectiveness of the design and execution of the internal 

control system. 

5. Grand Hall believes that the effectiveness of the design and execution 

of its internal control system (including supervision of subsidiaries) during

the above mentioned period provides reasonable assurance of achieving 

the goals of the efficiency and effectiveness of operations, the reliability 

of financial reports and the compliance with applicable laws and 

regulations. 

6. The statement of internal control will be an integral part of Grand Hall’s 

annual report and prospectuses that are available to the public, and 

within which any illegal acts, such as misstatement or concealment would 

be subject to the legal liabilities of code 20, 32, 171 and 174 of the 

Securities Exchange Laws. 

7. Grand Hall’s board of directors approved the statement of internal 

control on April 21, 2005. Six directors attended and agreed with the 

contents of the statement. No persons opposed the statement. 

Grand Hall Enterprise Co., Ltd. 

75 

President: William Home 

General Manager: Lin Shen-jen 

(2) Where a company has retained a CPA to audit its internal control system, the 

auditor’s report issued by the CPA shall be disclosed: None.

3. Major Issues on Record or Written Statements made by Any Directors or 

Supervisors which Specified his/her Dissent to Important Resolutions 

Passed by Directors: None. 

4. Issuance of private placement securities: None. 

5. Disposed of and held by subsidiaries: None. 

6. Major decisions of shareholders’ meeting and board of directors’ 

meeting: 

Review of Shareholders Meetings 

GH’s 2004 Annual Shareholder Meeting was held at the Chien Tan Youth 

Activity Center on May 27, 2004. At the meeting, shareholders present in 

person on by proxy approved the following solutions: (1) Acceptance of the 

2003 business report and financial statements; (2) Distribution of 2003 

profits; (3) Capitalization of 2003 profits; (4)Revision to “ Board of director 

meeting procedures”; (5)Revision to “ Shareholder meeting procedure”. 

Review of Board meetings 

During the 2004 calendar year, and the period from January 1 2005 to April 

21,2005, the Board held ten regular meetings. Major resolutions passed at 

these meetings are summarized below:(1) The purchase of land and factory 

in Taichung; (2)Convening the 2004 Shareholder Meeting; (3)The 2003 

business report and financial statements; (4)Distribution of 2003 profits; 

(5)Revision to shareholder meeting procedure; (6)The 2003 consolidated 

business report and financial statements; (7)Capitalization of 2003 profit; (8) 

The 2004 financial projections; (9)The investment in Zhuhai Grand Hall, Inc 

through Global Tech Int’l Inc.;(10)The 2004 semi-annual financial 

statements; (11) The 2004 business report and financial statement; (12) The 

2004 consolidated business report and financial statement; (13)Distribution 

of 2004 profit; (14) Capitalization of 2004 profit. 

7. Legal Penalties: None. 

8. Other necessary supplements: None. 

9. Disclosures of events which may impact equity or share price: None. 

76

GRAND HALL ENTERPRISE CO., LTD.

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