APEX - Annual Report 2020 | FinancialReports.eu

Stock code: 3052

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APEX SCIENCE & ENGINEERING CORP.

2020 Annual Report

The Annual Report is available at: http://mops.twse.com.tw Date of publication: April 20, 2021

I. (1) Spokesperson:

Name: WU, HSIU-LIN

Title: Director of the Financial/Accounting Dept. Tel: (02) 2223-4099 Ext. 687 Email: [email protected]

(2) Deputy spokesperson: Name: HUANG, CHIEH Title: Director of the President's Office Tel: (02) 2223-4099 Ext. 655 Email: [email protected]

II. Contact information of headquarters and plants:

Address: Building 4, 112 Xinmin St., Zhonghe Dist., New Taipei City Tel: (02) 2223-4099

III. Share transfer agency:

Name: Stock Services Agency Department of Yuanta Financial Holding Co., Ltd. Address: B1, No. 210, Section 3, Chengde Road, Taipei City Tel: (02) 2586-5859

Website: http://www.yuanta.com

IV. Contact Information of the CPAs for the Latest Financial Statements

Name of CPA: LIAO,FU-MING, CHEN,CHING-CHANG, CPA Name of firm: PricewaterhouseCoopers Taiwan Address: Building 27, No. 333, Section 1, Keelung Road, Taipei City Tel: (02) 2729-6666

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

V. Overseas securities exchange where securities are listed and method of inquiry: None

VI. Website: https://www.apexgrp.com.tw

Table of Contents	Table of Contents
Chapter I. Letter to Shareholders ............................................................................................. 1
Chapter II.	Company Profile
I.	Date of incorporation ............................................................................................. 4
II.	Company history ................................................................................................... 4
Chapter III. Corporate Governance Report
I.	Corporate organization .......................................................................................... 15
II.	Information on Directors, Supervisors, General Managers, Vice General
	Managers, Assistant Vice President and the management of departments and
	branches ............................................................................................................... 16
	...................................................................................................................................
III.	Status of corporate governance ........................................................................... 29
	...................................................................................................................................
VI.	Information about CPA professional fee ............................................................. 82
	...................................................................................................................................
V.	Information on replacement of CPAs .................................................................. 83
	...................................................................................................................................
VI.	Any President, General Manager or manager in charge of finance or accounting
	matters holding a position at the CPAs' accounting firm or an affiliate of the firm
	in the most recent fiscal year ............................................................................... 84
	...................................................................................................................................
VII.	Equity transfers and/or changes in equity pledges (during the most recent fiscal
	year and up to the date of publication of the Annual Report) by any Director,
	Supervisor, Manager or shareholder with a stake of more than 10 percent ........ 84
	...................................................................................................................................
VIII.	Relationship among the Top 10 major shareholders ........................................... 85
	...................................................................................................................................
IX.	Number of shares held by the Company, Directors, Supervisors, managers and
	entities directly or indirectly controlled by the Company regarding the same re-
	invested business, and calculation of consolidated shareholding ratio of the above
	categories ............................................................................................................. 86

Chapter IV. Capital Overview: Disclosure of the Company's capital and shares, corporate bonds, preferred stocks, global depository receipts, employee stock option certificates, new restricted employee shares and any merger and acquisition activities (including mergers,

acquisitions, and demergers), and implementation of the capital utilization plan ................... 87	acquisitions, and demergers), and implementation of the capital utilization plan ................... 87
Chapter V.	Operational Highlights
I.	Business activities ............................................................................................... 95
	...................................................................................................................................
II.	Analysis of market and production and marketing situation ............................. 103
	...................................................................................................................................
III.	Employees ..........................................................................................................112
	...................................................................................................................................
IV.	Environmental protection expenditure ...............................................................113
	...................................................................................................................................
V.	Labor relations ....................................................................................................113
	...................................................................................................................................
VI.	Important contracts .............................................................................................117

Chapter VI. Financial Information

I.	Condensed Balance Sheets and Statements of Comprehensive Income for the past
	five fiscal years .................................................................................................. 120
II.	Financial analysis for the past five fiscal years ................................................. 124
III.	Audit Committee's report on the Financial Report of the most recent fiscal year
	............................................................................................................................. 130
IV.	Parent Company Only Financial Report duly audited by CPAs in the most recent
	fiscal year .......................................................................................................... 131
V.	Consolidated Financial Report duly audited by CPAs in the most recent fiscal
	year ……………………………………………………………………………..219
VI.	Financial conditions of the Company and affiliated companies ....................... 295
Chapter VII. Financial Status and Operating Results
I.	Financial position .............................................................................................. 295
II.	Financial performance ....................................................................................... 296
III.	Cash flows ......................................................................................................... 298
IV.	Effect of any major capital expenditures on financial operations during the most
	recent fiscal year ................................................................................................ 298
V.	Reinvestment policy for the most recent fiscal year, main reasons for profits/losses
	generated thereby, improvement plan and investment plan for the coming year
	............................................................................................................................. 298
VI.	Risk evaluation .................................................................................................. 299
VII.	Other important matters: ................................................................................... 300
Chapter VIII. Special Disclosure
I.	Information on affiliated companies ................................................................. 301

II.	Private placement of securities during the most recent fiscal year and up to the
	date of publication of the Annual Report .......................................................... 306
III.	Holding or disposal of shares in the Company by subsidiaries during the most
	recent fiscal year and up to the date of publication of the Annual Report ........ 306
IV.	Other necessary supplements ............................................................................ 306
V.	Events which have material impacts on shareholders' equity or securities prices
	during the most recent fiscal year and up to the date of publication of the Annual
	Report ................................................................................................................ 306

Chapter 1. Letter to Shareholders

Dear shareholders,

Thank you for attending the 2021 shareholders’ meeting of the Company. With the support of all shareholders and the efforts of Directors and all colleagues, we keep our business moving forward steadily in the defined direction. Further support and encouragement from shareholders would be highly appreciated.

Operational results of 2020 and our future plan are hereby presented as follows:

(I) Operational results of 2020
Results of Business Plan The Company recorded a consolidated net operating revenue of NT$5,217,591,000, a consolidated operating profit of NT$286,326,000, a net income of NT$322,455,000 and the earnings per share after tax of NT$1.59 in 2020.
Budget implementation:

The Company didn’t publish any financial forecast for 2020.

Analysis of financial revenue and expenditure and profitability

	Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000	Unit: NT$1,000
Analysis Item	2020(consolidated)		2019(consolidated)
Net Operating Revenue	5,217,591	100.00%	5,623,832	100.00%
OperatingCosts	4,732,188	90.70%	5,233,282	93.06%
Gross Profit	485,403	9.30%	390,550	6.94%
OperatingExpenses	199,077	3.81%	150,984	2.68%
Net Operating Profit (Loss)	286,326	5.49%	239,566	4.26%
Non-operating Income and Expenses	22,002	0.42%	4,418	0.08%
Net income (loss) before tax	308,328	5.91%	243,984	4.34%
Income tax profits (expenses)	14,127	0.27%	(66,698)	-1.19%
Net income(loss)	322,455	6.18%	177,286	3.15%

Research and development

Construction: The Company has been continuously improving R&D, with our focus maintained on the improvement and optimization of the special technologies required for new and expansion projects of high-tech plants and utilities construction projects so as to maintain our advantages and increase our interests in the industry through continuous improvement of technologies.

Architecture: We have hired well-known domestic architects and design teams for

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planning and design to facilitate project initiation and make our real estate projects regional benchmarks. In addition, we also have applied new architectural technologies and design to build higher-quality residences and increase our exposure in the architectural industry.

Optoelectronics: In order to increase the product value and reduce costs, we’ve been constantly developing and improving LCM module products and updating technologies. We’ve also paid continual attention to the development of LED component technologies and put them into use so as to develop more efficient products.

(II) Outline of 2021 Business Plan
Management principles

By adhering to the management principles of improvement, deep-rooting, profit sharing and sustainable expansion, the Company shall provide high-quality services for customers with dedication.

Architecture: We shall continue to master future trends in real estate through industry-academy cooperation and information collection. In addition to land acquisition, we will also enhance the development of joint construction and urban renewal projects to acquire land for real estate projects. In the future, we hope that real estate projects and services that satisfy the consumers’ needs in the architectural field will be produced through diversified development modes and introduction of new products.

Construction: Under the precondition that the needs of Chinese Petroleum Corporation (CPC), public utilities and private factories (new/expansion projects) shall be satisfied, we will strengthen the cooperation with domestic and foreign companies, and achieve customer satisfaction by introducing technologies and improving integration capabilities.

Optoelectronics: Based on existing products, we will actively develop more product lines, and continue to actively expand customer sources by developing partners. Internally, in order to improve our competitiveness in this field, we will strive to reduce production and procurement costs .

Expected sales volume and its basis In the field of construction, capital expenditures of private manufacturers have gradually increased, which is more optimistic than the past few years. As the government continues to expand domestic demand, public institutions will continue to initiate projects and release invitations for bids, and the total amount of potential

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business opportunities is expected to exceed NT$2 billion.

In the field of architecture, we will proceed with the sale of real estate products, and actively evaluate the investments and construction of the acquired land for construction.

In the field of optoelectronics, in addition to the sale of LED elements and LCM modules, we will continue to dig deeper in the electronic consumables market. It is expected that with the development of new products and partners, we will create more business opportunities as the economy recovers.

Key production and distribution policy (1) To provide customer-oriented services and the best consulting solutions and assistance for customers.
(2) To develop real estate projects in potential areas with unique characteristics by planning.

(3) To integrate resources and develop partners.

(III) Future development strategy and effect of external competition, laws and regulations and overall business environment

Founded in 1976, the Company now has a history of 45 years. We’ve witnessed many economic fluctuations around the world and in Taiwan, from which we’ve accumulated enough experience and developed enough strength to deal with great economic recessions. It is estimated that the global economic recovery will continue in 2021. We believe that our industrial layout and strengthened management mechanism over the past few years will lead to continuous improvements and maintain stable operations. Although new challenges are ahead of us this year, I believe that with the encouragement and support of shareholders, Directors and all colleagues, we will continue to make improvements and gain strength.

President: KUO, KUO-HUA

Manager: KUO, KUO-HUA

Accounting manager: WU, HSIU-LIN

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Chapter II. Company Profile

I. Date of incorporation:
August 9, 1976
II. Company History
On August 9, 1976: APEX SCIENCE & ENGINEERING CORP. was founded, with a registered capital of NT$5 million.
In 1978: the Company increased the capital to NT$15 million. We developed the first pulse-jet type air pollution control device in Taiwan.
In 1979: We completed the “Donggang River Pumping Station” of Taiwan Water Corporation, which was its largest pumping station back then.
In 1980: We completed the largest “Underground Storage Tank System Project” of the ROC Armed Forces, for which we were granted an award by the Combined Logistics Command Construction Section. We increased the total capital to NT$30 million.
In 1981: We undertook the largest pumping station project in East Asia, i.e., the flood control project in Taipei — “Yuanshan Pumping Station”, jointly with Voith GmbH (formerly known as J. M. Voith).
In 1983: We undertook the Hydraulic Machinery Project of Feicui Reservoir jointly with ATB Group (Italy), including penstocks and sluice gates, which was the first turnkey bid project in Taiwan.
In 1986: We undertook the first largest commercial high-rise parking tower facility in Taiwan, i.e., the “High-rise Parking Tower Facility on Guangfu North Road, Taipei City”, jointly with IHI Corporation (Japan).
In 1987: We participated in the Swordfish-class submarine program of ROC Armed Forces (the Dutch-made RSV submarine program), for which we were granted an award by the Ministry of National Defense of the Republic of China as we made a significant contribution to the military strength of the Armed Forces.
In 1988: We undertook the Discharge Tower Project for LNG of China National Petroleum Corporation (CNPC) jointly with Burgess-Manning Inc. (US), as a pioneer in the field of special noise control projects in Taiwan.
In 1989: We undertook the Ultra-low Temperature (-162℃) LNG Thermal Insulation Project jointly with Willich Branch of Voith GmbH, which was a pioneering project in the construction field in Taiwan. We increased the capital to NT$105 million.
In 1991: We undertook the “CNPC Oil Transfer Station Pipeline Project across Taichung

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Port” jointly with WesTech Engineering Inc. (US), which was the first port crossing pipeline project using the horizontal drilling method in Taiwan.

We undertook the “Fire Alarm System and Fire-fighting System Improvement Project of Talin Power Plant” of Taiwan Power Company.

We increased the total capital to NT$195 million.

In 1992: We undertook the “Installation and Construction Project of CNPC Light Oil Plant Modernization Program”, which was the first project using a computer-based real-time light oil blending and optimization system in Taiwan.

We undertook the “Flare Tower #3 and Surface Combustion Tower #2 Construction Project" of CNPC.

We undertook the Utility System Facilities Project for the Fuhsing Brewery of Taiwan Tobacco and Liquor Corporation (formerly known as Taiwan Tobacco and Wine Monopoly Bureau).

The Securities and Futures Bureau, Securities Supervisory Commission (formerly known as Securities Regulatory Commission) of the Ministry of Finance, ROC, approved our application for public issuance, and we increased the paid-in capital to NT$500 million.

In 1993: We purchased a premise on Nanjing East Road, Taipei City, and moved there in June.

We purchased a premise on Minquan 2nd Road, Kaohsiung City.

We undertook the Fermentation Plant Facilities Outsourcing Project for the Fuhsing Brewery of Taiwan Tobacco and Liquor Corporation.

We undertook the Filtration Plant Facilities Project of Taiwan Tobacco and Liquor Corporation. Upon completion, Fuhsing Brewery became the most state-of-the-art brewery in the world.

In 1994: We undertook the Telemetry and Remote SCADA Systems Project of CPC Corporation as well as the Skyscraper Automation Project of Taiwan Land Development Corporation, reaching an milestone in the field of 5A automation skyscrapers.

We undertook cleanroom instrument control projects of high-tech companies in Hsinchu Science Park, including United Microelectronics Corporation, Taiwan Semiconductor Manufacturing Company Ltd. and Hualon Microelectronics Corp.

We undertook the Computer-integrated Manufacturing System Project for the Taichung Distillery of Taiwan Tobacco and Liquor Corporation, which was the

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largest and most modern CIM project in the food industry.

In 1995: Our earnings transfer to capital was audited and approved by the Securities and Futures Bureau, thereby increasing the paid-in capital to NT$588 million.

We were approved to go public on November 25, 1995 by the Securities and Futures Bureau and Taiwan Stock Exchange Corporation.

We purchased staff dormitories at 4F, No. 32, Minshou Street, Kaohsiung City. We undertook the Pontoon #2 Submarine Pipeline Replacement Project at Sharon and the Cogeneration Facilities Turnkey Project of CPC corporation.

In 1996: Our earnings transfer to capital and cash capital increase were audited and approved by the Securities and Futures Bureau, thereby increasing the paid-in capital to NT$1,002,540,000.

We undertook the Electromechanical Equipment Project Phase I of the Second Kinmen Distillery.

We undertook electrical equipment projects for 8-inch wafer plants of United Microelectronics Corporation and other affiliated companies.

We purchased the construction vessel “APEX #1”.

In 1997: Our earnings and capital surplus transfer to capital and cash capital increase were audited and approved by the Securities and Futures Bureau, thereby increasing the paid-in capital to NT$1,642,895,600.

We invested in Hung Dian Technology Co., Ltd., engaged in development and operations management of the leisure and entertainment cities.

In 1998: Our capital surplus transfer to capital was audited and approved by the Securities and Futures Bureau, thereby increasing the paid-in capital to NT$1,807,185,160. We were certified in ISO 9001 by BVQI Taiwan Branch.

In 1999: Our capital surplus transfer to capital was audited and approved by the Securities

and Futures Bureau, thereby increasing the paid-in capital to NT$1,897,544,410.

We undertook the Incinerator #4 Construction Project for the Taiwan Taoyuan International Airport (formerly known as Chiang Kai-shek International Airport) of Civil Aeronautics Administration, Ministry of Transportation and Communications, ROC.

We undertook the Gasoline Benzene Reduction Facility Design, Equipment Supply and Installation and Construction Project for the Taoyuan Refinery of CPC Corporation.

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In 2000: Our earnings and capital surplus transfer to capital was audited and approved by

the Securities and Futures Bureau, thereby increasing the paid-in capital to NT$1,992,421,660.

We undertook the Elevated Flare Tower #4 and Surface Combustion Tower Construction Project for the Taoyuan Refinery of CPC Corporation.

We undertook the Bottle Filling Machine #1 Full Line Replacement Project for the Chunghsing Brewery of Taiwan Tobacco and Liquor Corporation.

We undertook the Cleanroom Electrical Installation Project for Plant #2 of AU Optronics Corporation.

In order to protect shareholders' rights and interests and transfer shares to employees, we bought back 18,716,000 shares of the Company.

We established the Electronics Business Department, responsible for the trading business of electronic components.

We established the Opto Electronics Department and a plant for sale of downstream packaging products of LEDs (light-emitting diodes).

In 2001: After the resolution was passed at the shareholders' meeting and approved by the Ministry of Economic Affairs, ROC, APEX ENGINEERING CORP. was renamed as APEX SCIENCE & ENGINEERING CORP.

We founded a joint venture in Shaoxing, Zhejiang, i.e., Zhejiang Guyue Longshan Electronic Technology Development Co., Ltd., engaged in marketing of relevant SMD products.

In 2002: After audited and approved by the Securities and Futures Bureau, we started to issue shares in the electronic industry since January 1, 2003.
In 2003: We founded a joint venture in Shaoxing, Zhejiang, i.e., Hangzhou Feihua Optoelectronics Co., Ltd., engaged in production and marketing of IrED and LED wafers and other relevant products.
In 2004: a capital stock reduction of NT$54 million was audited and approved by the Ministry of Economic Affairs, ROC, thereby decreasing the paid-in capital to NT$1,793,421,660.

We undertook the Line Ⅲ MEP Construction Project of Quanta Display Inc.

We undertook the Taichung Plant Electromechanical Project of AU Optronics Corp.
In 2005: The Electronic Marketing Division of the Opto Electronics Dept. was dismissed through a resolution of the Board of Directors in November, due to poor operating performance.

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In 2006: We established the Construction Dept. and launched the “Raphael-the Royal Kingdom” Pre-sale Housing Project in Neihu District. In December, the acquisition of land in Datong District was approved by the Board of Directors, and contracts were signed with land holders in January and April of the following year.

We undertook the FAB6 Fire Pipeline Laying and CO2 System Project of Chimei Optoelectronics Corporation.

The term of the President Mr. Chih Chii-Gung ended, and the term of his successor Mr. Kuo Kuo-Hua started.

The term of the General Manager Mr. Chih Chii-Gung ended, and the term of his successor Mr. Kuo Kuo-Hua started.

In 2007: We undertook the Reforming Plants #5 and #6 Debottlenecking Project for Talin Refinery of CPC Corporation.

We undertook the New Plant Fire Protection Project for Zhunan Factory of Gintech Energy Corporation.

We undertook the New Fire Protection Project of the Research & Testing Center of Powerchip Semiconductor Manufacturing Corp.

We undertook the ASAHI III Gas Plant Electromechanical Project.

We undertook the CM07/SPIL 2 Pipeline Project of San Fu Chemical Co., Ltd.

We undertook the 30L Draught Beer Keg Packaging Project of Zhunan Brewery.

In 2008: In January, we launched the “Crillon Taipei” Pre-sale Housing Project in Datong District.

In April, we acquired land plots in Neihu District, Taipei City by means of procurement with our funds and joint construction and sale in partitions.

We established the Fenghe Life House Physical Path, engaged in marketing of SPA products, building materials, sanitary ware and other relevant products.

We undertook the New Fire Protection Project of Eversol Corporation. We undertook the Plant #8 Fire Protection Equipment and Pipeline Project of Chimei Optoelectronics Corporation.

We undertook the Plant T2 Fire Protection System Project of Innolux Corporation.

We undertook the L7B and F12 Pipeline Fire Protection Project of AU Optronics Corp.

We undertook the L7B C/R Electrical Project of AU Optronics Corp.

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We undertook the Instrumentation and Electrical System Project of Dragon Steel Corporation.

We undertook the Water Supply Monitoring System Improvement Project of the Taipei Water Department.

We undertook the Tatan Ultrasonic Leak Detection System Project of CPC Corporation.

We undertook the Real-time Propylene Detection System Project for Talin Refinery of CPC Corporation.

We undertook the Phase II Recondenser Two-stage Pump and Ancillary Equipment Cold Insulation Update Project of CPC corporation.

We undertook the Apartment Buildings Electrical and Plumbing Project of Rex-stone International Co., Ltd.

We invested in APEX LIFE INC. in the United States, engaged in the business of building materials, sanitary ware and relevant photoelectric products.

We invested in Fenghua Real Estate Agency (Holding) Company, engaged in real estate brokage business.

In 2009: In May, we launched the "Best-Rich” Pre-sale Housing Project in Neihu District. We acquired land plots in Wenshan District, Taipei City, by buying with our funds.

We undertook the Sodium Hypochlorite Electrolytic Production System Design-build Project of Taiwan Fertilizer Co., Ltd.

We undertook the Electromechanical Equipment Manufacturing and Installation Project for the Nitrophosphate Plant of Taiwan Fertilizer Co., Ltd. We undertook the Storage Tank Construction and Installation Project for the Taichung Plant of Taiwan Fertilizer Co., Ltd.

We undertook the Blending Systems #3 and #4 Electrical Equipment Project for the Talin Refinery Gasoline Blending Plant of CPC Corporation.

We undertook the Third Tainan Plant New Construction Project of China Chemical & Pharmaceutical Co., Ltd. contracted by M+W Facility Engineering Gmbh.

We undertook the Houli Park Wastewater Treatment Plant Phase I Stage III Project of Central Taiwan Science Park contracted by Chang Ji Construction Co., Ltd.

We undertook the Taichung Park Wastewater Treatment Plant Phase III Project of Central Taiwan Science Park contracted by Chang Ji Construction Co., Ltd.

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In 2010: We undertook the Ammonium Sulfate Plant Design-Build Project for the Taichung Plant of Taiwan Fertilizer Co., Ltd.

We undertook the Hukou Gas Plant Special Mechanical Project of Air Products San Fu Co., Ltd.

We undertook the Combustion Tower #5 Debottlenecking Project for the Talin Refinery of CPC Corporation.

We undertook the AUO L8B Cleanroom Acid & Alkaline Exhaust and Water Drainage Project of United Microelectronics Corporation.

We undertook the Luzhou Pumping Station Reconstruction Project of the Water Resources Department, New Taipei City Government.

In August, we launched the “Riverside Scene Palace” Pre-sale Housing Project in Wenshan District.

We undertook the New Fire Protection Project Phase I for Plant B of Gintech Energy Corporation in Hsinchu Science Park.

Our earnings transfer to capital was audited and approved by the Financial Supervisory Commission, ROC of the Executive Yuan, thereby increasing the paid-in capital to NT$1,865,158,520.

In 2011: We undertook the MISC Fire Protection System Project of TSEC Corporation.

We undertook the New Electromechanical Project for the 2B Plant of Danen Technology Corporation.

We successively acquired land plots in Zhongzheng District, Taipei City, by buying with our funds.

We undertook the New Plant Fire Protection Project for the Guanyin Plant of Eversol Corporation.

Our earnings transfer to capital was audited and approved by the Financial Supervisory Commission, ROC of Executive Yuan, thereby increasing the paid-in capital to NT$1,939,764,860.

In 2012: We undertook the TSMC12 P6 Chilled Water and External Pipeline Project of M+W Facility Engineering Gmbh.

We undertook the Center for Geriatrics and Gerontology Building Project of Kaohsiung Veterans General Hospital from the Veterans Affairs Council, ROC of the Executive Yuan.

We undertook the Nitric Acid Storage Tank Construction and Installation Project of Taiwan Fertilizer Co., Ltd.

In November, we launched the “Universal Hall” Pre-sale Housing Project on

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Roosevelt Road.

In 2013: We undertook the New Construction Project of Yongkang Drainage and Pumping Station.

We undertook the Combined Project of Phase I New Construction Works of Rende Water Reclamation Plant in Tainan City and the Test Run Three Years after Completion.

We undertook the Taichung Special Depot Reconstruction Works for the Air Force Parts and Attachments General Depot of Shuinan Airport Relocation Project.

We undertook the Teaching Building Construction Project of National Taichung University of Education.

We undertook the Combined Project of Phase II Expansion and Operation and Maintenance of Futian Water Resources Recycling Center in Taichung City. We undertook the Animal Feed Factory Construction Project of the Livestock Research Institute, COA of the Executive Yuan.

We were commissioned to undertake the Development, Sale and Management Project of Chiayi County Machouhou Industrial Park Phase I.

Our earnings transfer to capital was audited and approved by the Financial Supervisory Commission, thereby increasing the paid-in capital to NT$2,036,753,100.

In 2014: We undertook the (Procurement) Project of 2 Sets of Mud Motors of CPC Corporation.

We undertook the Donggang River Raw Water Pretreatment Project of Taiwan Water Corporation.

We undertook the Instrument Control Equipment Manufacturing and Installation Project for the Superphosphate Plant at the Taichung Plant of Taiwan Fertilizer Co., Ltd.

We undertook the PSB/CUB/OB/LAB Buildings and Guard Room Electrical Works for the FAB 12AP5&P6 Plants New Construction Project of United Microelectronics Corporation.

We undertook the FAB 12A P5 STAGE 2 CUB Air Conditioning and Ventilation Project of United Microelectronics Corporation.

We undertook the FAB 12A P5 STAGE 2 Fire Protection Project of United Microelectronics Corporation.

We undertook the Blending Equipment Automation Turnkey Project in the

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Chiayi Lube Oil Plant Zone II of CPC Corporation.

Our earnings transfer to capital was audited and approved by the Financial Supervisory Commission, thereby increasing the paid-in capital to NT$2,240,428,410.

In 2015: We undertook the Offshore Oil Unloading Buoy #2 Partial Submarine Pipeline Replacement Project for the Taoyuan Refinery of CPC Corporation.

We undertook the LTPS6 Fire Protection System Project of Innolux Corporation.

We undertook the New BIO-ICT Building Turnkey Project of National Chiao Tung University Boai Campus.

We undertook the Dormitory Building #3 Construction Project of National Chiao Tung University Guangfu Campus.

Our earnings transfer to capital was audited and approved by the Financial Supervisory Commission, thereby increasing the paid-in capital to NT$2,330,045,540.

We successively acquired land slots on Jixian Road, Luzhou District, New Taipei City, by our own our funds.

We acquired 100% of the shares of Xindin Engineering Consultants Corp., and developed engineering consulting and management business to provide highquality integrated construction services.

In 2016: We undertook the Suhua Highway Nan'ao-Heping Section Electromechanical Project on Provincial Highway No. 9 for Suhua Improvement Engineering Office, Directorate General of Highways, Ministry of Transportation and Communications.

We undertook the Suhua Highway Nan'ao-Heping Section Electromechanical Project (wires and materials of cables) on Provincial Highway No. 9 for Chunghwa Telecom Co., Ltd.

Special procurement project (galvanized steel pipes, conduits and cable trays) (stainless steel pipes).

We undertook the Phase I and Phase II Pipeline Integration Project for the Taichung Plant of CPC Corporation.

We undertook the F15P6 MEP Package-1 (Loop 1) Project of M+W Facility Engineering Gmbh.

We undertook the Wugu Pumping Station Generator, Trash-cleaning Machine and LV Equipment Procurement Project (including Installation) on National

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Freeway 1 for Northern Region Branch Office, Freeway Bureau, Ministry of Transportation and Communications.

We undertook the Wugu Pumping Station Pumping Unit and Instrument Control Equipment Procurement Project (including Installation) on National Freeway 1 for Northern Region Branch Office, Freeway Bureau, Ministry of Transportation and Communications.

In 2017: We undertook the AUO L8B GED2 Extension Project of M+W Facility Engineering Gmbh.

We undertook the New Multi-purpose Building Project for National Taiwan University College of Engineering.

We launched the “MY UTOPIA” Pre-sale Housing Project in Luzhou District. In 2018: We undertook the Helicopter Hangar Construction Project for the Construction and Planning Agency, MOI and National Airborne Service Corps, MOI in Kaohsiung.

We undertook the Taliaokeng Pumping Station Unit Upgrade Project (Phase I) for the New Taipei City Government in Xinzhuang District, New Taipei City. We undertook the Huajiang Pumping Station and Jiangzicui Pumping Station Unit Upgrade Project of the New Taipei City Government in Banqiao District, New Taipei City.

We undertook the Wunchang Park Underground Parking Garage Construction Project of the Department of Transportation, Taoyuan in Taoyuan District, Taoyuan City.

We were commissioned to develop, use, make profit from, dispose and manage the later phase of Chiayi County Machouhou Industrial Park of the Chiayi County Government.

We undertook the Nitrophosphate Plant Construction and Installation Project of Peifeng Technology & Fertilizer. Co. Ltd. (a subsidiary of Taiwan Fertilizer Co., Ltd.).

We undertook the Steam Turbine Generator #4 System Turnkey Project for the Taoyuan Refinery of CPC Corporation.

In 2019: We canceled our treasury shares as audited and approved by the Financial Supervisory Commission, thereby decreasing the paid-in capital to NT$2,287,135,540.

We undertook the Taichung Plant-Tongxiao Station 36-inch Onshore Gas Pipeline Project (Section C) for the L10501 Program of CPC Corporation.

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In 2020: We completed and delivered the “MY UTOPIA” Real Estate Project in Luzhou.

We undertook the Project of a Batch of 36-inch API 5L X65 PSL1 Coated Steel Pipes and Bare Pipes of CPC Corporation.

We undertook the Guangfu Road Post Office New Construction Project in Changhua City.

In 2021: We undertook the Cigu Technology Industrial Park Development, Rent, Sale and Management Project commissioned by the Tainan City Government to public or private enterprises.

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Chapter III. Corporate Governance Report

I. Corporate organization
(I) Organization chart

==> picture [440 x 274] intentionally omitted <==

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

Shareholders’
Meeting
Board of Directors
President
Remuneration Audit Committee
Committee
President's Office Audit Office
General Manager
Construction Engineering Opto Electronics Administration Financial/
Dept. Dept. Dept. Dept. Accounting Dept.
----- End of picture text -----

(II) Department functions

Department functions
Department	Role
President's Office	Monitoring and planning of operating objectives, information management as well as planning and execution of legal affairs andgovernance affairs of the Company
Audit Office	Oversees internal audit andprocedural management
Construction Dept.	Construction planning of apartment buildings on self-owned land
Engineering Dept.	Acquisition and implementation of electromechanical, instruments and electronics and civil engineering bid projects ofpublic andprivate enterprises
Opto Electronics Dept.	LCM display manufacturing and marketing
Administration Dept.	Planning and implementation of human resources and general affairs
Financial/Accounting Dept.	Accounting and financial affairs planning and fund management

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Remark	Remark	Note 1	None	None	None	-	None
Executives, Directors or Supervisors who are spouses or within the second degree of kinship	Relatio n	Spouse	None	None	None	-	Spouse
	Name	WANG, CHAO- KUEI	None	None	None	-	KUO, KUO- HUA
	Title	Director Represe ntative	None	None	None	-	Preside nt
Other position concurrently held at the Company and other companies		President, Rex-stone International Co., Ltd. President, Kaida Development Co., Ltd. Vice President, Zhejiang Guyue Longshan Electronic Technology Development Co., Ltd. Director Representative, Reinforce Energy Corp.	President, Premier International Development Incorporation President, Cheer Elegant Corp. Taiwan Branch General Manager, 360d HR Consultancy Co., Ltd. Independent Director, PLANET Technology Corporation	CPA Partner and Principal, FORMOSA & CO., CPAS Senior consultant, Myriad Attorneys at Law. Independent Director and Member of the Remuneration Committee, Formosan Rubber Group Inc. Member of Civil Mediation Committee, Taiwan Taipei District Court	President, ABEE Independent Director, Holy Stone Enterprise Co., Ltd.	None	Director, Kaida Development Co., Ltd.
Experience (education)		Department of Business Administration of Taipei University	Department of Radio of Shih Hsin University (formerly known as World College of Journalism) Bachelor’s degree, Program for Presidents, Shanghai Jiao Tong University	Bachelor of Commerce, Department of Accounting, National Taiwan University Master of Laws, Soochow University PhD in International Economic Law, University of International Business and Economics	National Chengchi University Master of Business Administration	N/A	Hsing Wu University
Shareholding by nominees	%
	Number of shares
Spouse & minor shareholding	%
	Number of shares
Number of shares held now	%
	Number of shares
Shares held when elected number of shares held	%	7.05%	0.03%	-	-	0.02%	0.00%
	Number of shares	16,124,177	57,200	-	-	45,000	647
Date first	elected	95.06.14	104.06.11	104.06.11	104.06.11	107.06.15	107.06.15
	Term	3 years	3 years	3 years	3 years	3 years	3 years
Date elected	term (years)	107.06.15	107.06.15	107.06.15	107.06.15	107.06.15	107.06.15
Gender		Male	Female	Male	Male	-	Female
Name		KUO, KUO- HUA	CHANG, PAO-TSAI	HSIAO, SHENG- HSIEN	WU, NAI- HUA	Kaida Development Co., Ltd.	Representativ e: WANG, CHAO-KUEI
Nationality/plac e of registration		R.O.C.	R.O.C.	R.O.C.	R.O.C.	R.O.C.	R.O.C.
Title		President	Independent Director	Independent Director	Independent Director	Director

-16-


None	None	Note 1: In case that the President and the General Manager or their equivalents (top managers) are assumed concurrently by the same person, or two persons who are spouses or relatives within 1 degree of kinship, the reason, rationality, necessity and corresponding measures (such as increasing the number of Independent Directors, and more than half of the Directors not concurrently serving as employees or managers) should be described: The President of the Company also serves as the General Manager to enhance the operating efficiency and execution of decision-making. The President fully communicates with the Directors on the Company's operating status in general to implement corporate governance. The Company plans to increase the number of Independent Directors to enhance the functions of the Board of Directors and strengthen the supervision function. At present, the following specific measures are in place: 1. The Independent Directors carry out full discussion in the functional committees and puts forward suggestions for the Board of Directors' reference to enhance the functions of the Board. 2. More than half of the Board members are not serving as employees or managers of the Company concurrently. ■ Directors are major shareholders among institutional shareholders	Major shareholder	Kuo, Kuo-Hua (49.25%), Wang, Chao-Kuei (15.63%), Kitai Construction & Development, Inc. (13.25%), Kuo, Chun-Hao (9.5%), Kuo, Shih-Yu (9.5%), Kuo, Hsin-Chi (2.87%)	■ Major shareholders of the major shareholders thatare juridical persons	Major Shareholder	Hung, Ching-Sen (8.84%), Tai, Yu-Chin (8.53%), Lien, Shih-Fang (7.12%), Chang, Sheng-Chun (4.08%), Hsu, Yen-Hsi (3.66%), Shih, I-Lieh (3.20%), Hsu, Yang-Ai-Chu (2.93%), Lin, Kuei-Chen (2.88%), Lin, Pi-Yueh (2.88%), Liu, Chin-Ying (2.57%)
None	None
None	None
None	None
President, EVER-TRUST Management Consulting Co. Supervisor, Chang Ji Construction Co., Ltd.	Supervisor, Guobin Construction Co., Ltd. Director, Chang Ji Construction Co., Ltd.
Master of Business Administration, Barrington University (commonly known as University of Atlanta)	Bachelor's degree, Department of Cooperative Economics, National Chung Hsing University






0.06%	0.04%
124,924	100,000
			Name of institutional shareholder	Kaida Development Co., Ltd.		Name of Institutional Shareholder	Kitai Construction & Development, Inc.
107.06.17	107.06.17
3 years	3 years
107.06.15	107.06.15
Male	Male
CHOU, HIS- YANG	LU, FANG- YUAN
R.O.C.	R.O.C.
Director	Director

-17-


(II) Expertise and independence of Directors and Independent Directors		Number of other public companies where the individual concurrently serves as an Independent Director	-	1	1	1	-	-	-	Note: Please check “�” the corresponding boxes if the Directors, including Independent Directors, meet the following conditions during the two years prior to the nomination and during the term of office. (1) Not an employee of the Company or any of its affiliates. (2) Not a Director or Supervisor of the Company or any of its affiliates (except for Independent Directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent). (3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate
	Independence criteria	12	�	�	�	�		�	�
		11	�	�	�	�	�	�	�
		10		�	�	�		�	�
		9	�	�	�	�	�	�	�
		8	�	�	�	�	�	�	�
		7		�	�	�		�	�
		6	�	�	�	�	�	�	�
		5		�	�	�		�	�
		4		�	�	�		�	�
		3		�	�	�		�	�
		2	�	�	�	�	�
		1		�	�	�		�	�
	Meeting one of the following professional qualification requirements, together with at least five years of work experience	Having work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business	�	�	�	�	�	�	�
		A judge, public prosecutor, attorney, certified public accountant, or other professional or technical specialist who has passed a national examination and has been awarded a certificate in a profession necessary for the business			�
		An instructor or higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs in a public or private junior college, college or university
		Qualifications Name	KUO, KUO-HUA	CHANG, PAO- TSAI	HSIAO, SHENG- HSIEN	WU, NAI-HUA	Kaida Development Co., Ltd. Representative: WANG, CHAO- KUEI	CHOU, HIS-YANG	LU, FANG-YUAN

-18-

-19-


	Remark	Note 1	None	None	None	None	None	Note 1: In case that the President and the General Manager or their equivalents (top managers) are assumed concurrently by the same person, or two persons who are spouses or relatives within 1 degree of kinship, the reason, rationality, necessity and corresponding measures (such as increasing the number of Independent Directors, and more than half of the Directors not concurrently serving as employees or managers) should be disclosed: The President of the Company also serves as the General Manager to enhance the operating efficiency and execution of decision-making. The President fully communicates with the Directors on the Company's operating status in general to implement corporate governance. The Company plans to increase the number of Independent Directors to enhance the functions of the Board of Directors and strengthen the supervision function. At present, the following specific measures are in place: 1. The Independent Directors carry out full discussion in the functional committees and puts forward suggestions for the Board of Directors' reference to enhance the functions of the Board. 2. More than half of the Board members are not serving as employees or managers of the Company concurrently.
Managerial officer who are spouses or within the second degree of kinship	Relation ship	None	None	None	None	None	None
	Name	None	None	None	None	None	None
	Title	None	None	None	None	None	None
	Other position concurrently held at the Company and other companies	President, Rex-stone International Co., Ltd. President, Kaida Development Co., Ltd. Vice President, Zhejiang Guyue Longshan Electronic Technology Development Co., Ltd. Director Representative, Reinforce Energy Corp.	None	None	None	None	None
	Experience (education)	Department of Business Administration of Taipei University	Chinese Culture University	College of Engineering, Oriental Institute of Technology	National Chin-Yi University of Technology	Department of Civil Engineering, Tamkang University	Department of Chemistry, Fu Jen Catholic University
Shareholding by nominees	%	-	-	-	-	-	-
	Number of shares	-	-	-	-	-	-
Spouse & minor shareholding	Percentag e of ownershi p %	0.00%	-	-	-	-	-
	Number of shares	647	-	-	-	-	-
Shareholding	Percentage of ownership %	7.05%	-	-	0.02%	0.00%	0.02%
	Number of shares	16,124,177	-	-	36,036	1,157	46,842
	Date elected	95.6.28	103.5.1	94.12.14	108.2.25	101.1.1	106.1.1
	Gender	Male	Male	Male	Male	Male	Male
	Name	KUO, KUO- HUA	PENG, SHR BO	PENG, WU- YUAN	CHEN, TE-YUAN	HAO, YAO	CHIU, WEN- CHUAN
	National ity	R.O.C.	R.O.C.	R.O.C.	R.O.C.	R.O.C.	R.O.C.
	Title	General Manager	General Manager, Business Dept.	Vice General Manager, Business Dept.	Vice General Manager, Business Dept.	Senior Manager	Senior Manager

-20-

Remuneratio n from an invested company other than the Company’s subsidiaries or parent company (Note 11)	Remuneratio n from an invested company other than the Company’s subsidiaries or parent company (Note 11)	Remuneratio n from an invested company other than the Company’s subsidiaries or parent company (Note 11)	Remuneratio n from an invested company other than the Company’s subsidiaries or parent company (Note 11)		None			None	None	None
Sum of A, B, C, D, E, F and G in proportion to earnings after tax (Note 10)		All companies in Consolidat ed Financial Statement s			9.86%			1.04%
		APEX Science & Engineeri ng Corp.			8.99%			1.04%
Relevant remuneration received byDirectors who are also employees	Remuneration of employee (G) (Note 6)	All companies included into the financial statement (Note 7)	Stock Amount		0			0
			Cash Amount		17,642			0
		APEX Science & Engineering Corp.	Stock Amount		0			0
			Cash Amount		17,442			0
	Severance pay and pension (F)	All companies included into the financial statement	(Note 7)		68			0
		APEX Science & Engineer ing Corp.			44			0
	Salaries, bonus and special subsidies (E) (Note 5)	All companies included into the financial statement (Note 7)			8,023			0
		APEX Science & Engine ering Corp.			5,945			0
Sum of A, B, C and D in proportion to earnings after tax (Note 10)		All companies included into the financial statement (Note 7)			1.05%			1.70%
		APEX Science & Enginee ring Corp.			1.05%			1.56%
Remunerationpaid to Directors	For services (D) (Note 4)	All companies included into the financial statement (Note 7)			720			1,080
		APEX Science & Enginee ring Corp.			480			1,080
	Remuneration of Directors (C) (Note 3)	All companies included into the financial statement (Note 7)			4,661			2,226
		APEX Scienc e & Engine ering Corp.			4,451			2,226
	Severance pay and pension (B)	All companies included into the financial statement (Note 7)			0			0
		APEX Science & Enginee ring Corp.			0			0
	Remuneration (A) (Note 2)	All companies included into the financial statement (Note 7)			0			0
		APEX Scienc e & Engine ering Corp.			0			0
		Name		KUO, KUO- HUA	Representa tive of Kaida Developm ent Co., Ltd.: WANG, CHAO- KUEI	CHOU, HIS- YANG	LU, FANG- YUAN	CHANG, PAO- TSAI	WU, NAI- HUA	HSIAO, SHENG- HSIEN
		Title		President	Director	Director	Director	Independent Director	Independent Director	Independent Director

-21-

Total amount of remuneration (A+B+C+D+E+F+G)	All companies included into the financial report Note (9) I		General Directors: CHOU, HIS-YANG, LU, FANG-YUAN Independent Director: CHANG,PAO-TSAI, HSIAO,SHENG- HSIEN, WU,NAI- HUA	General Directors: Kaida Development Co., Ltd. Representative: WANG, CHAO-KUEI	-	-
	APEX Science & Engineering Corp. Note (8)	General Directors: CHOU, HIS-YANG, LU, FANG-YUAN	Independent Director: CHANG, PAO-TSAI, HSIAO,SHENG- HSIEN, WU,NAI- HUA	General Directors: Kaida Development Co., Ltd. Representative: WANG, CHAO-KUEI	-	-
Total amount of remuneration (A+B+C+D)	All companies included into the financial report Note (9) H	General Directors: Representative of Kaida Development Co., Ltd.: WANG, CHAO-KUEI	General Directors: CHOU, HIS-YANG, LU, FANG-YUAN Independent Director: CHANG, PAO-TSAI, HSIAO, SHENG- HSIEN, WU, NAI- HUA	General Directors: KUO, KUO-HUA	-	-
	APEX Science & Engineering Corp. Note (8)	General Directors: Kaida Development Co., Ltd. Representative: WANG, CHAO-KUEI CHOU, HIS-YANG, LU, FANG-YUAN	Independent Director: CHANG, PAO-TSAI, HSIAO, SHENG- HSIEN, WU, NAI- HUA	General Directors: KUO, KUO-HUA	-	-
Range of remuneration paid to Directors		Less than NT$1,000,000	NT$1,000,000 (inclusive) ~ NT$2,000,000 (exclusive)	NT$2,000,000 (inclusive) ~ NT$3,500,000 (exclusive)	NT$3,500,000 (inclusive) ~ NT$5,000,000 (exclusive)	NT$5,000,000 (inclusive) ~ NT$10,000,000 (exclusive)

-22-

NT$10,000,000 (inclusive) ~ NT$15,000,000 (exclusive) - - - - NT$15,000,000 (inclusive) ~ NT$30,000,000 (exclusive) - - General Directors: KUO, KUO-HUA General Directors: KUO, KUO-HUA NT$30,000,000 (inclusive) ~ NT$50,000,000 (exclusive) - - - - NT$50,000,000 (inclusive) ~ NT$100,000,000 (exclusive) - - - - Over NT$100,000,000 - - - - Total 7 persons 7 persons 7 persons 7 persons Note 1: Directors' names shall be identified one by one (institutional shareholders shall be identified by their names and representatives individually). General Directors and Independent Directors shall be listed separately and the amount of various payments shall be disclosed in summary. If a Director also serves as a General Manager or Vice General Manager, this form and the form (3-1) or (3-2-1) and (3-2-2) below shall be completed. Note 2: Remuneration to the Directors in the most recent fiscal year, including the Director's salary, allowances, severance pay, various bonuses, incentive payments, etc. Note 3: Remuneration to the Directors approved by the Board of Directors for allocation in the most recent fiscal year. Note 4: Professional service fees paid to the Directors in the most recent fiscal year (including traveling expense, special allowances, subsidies, provision of such tangible objects as a dormitory and car, etc.). If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Note 5: The salary, duty allowance, severance pay, bonuses, rewards, transportation allowance, special allowance, various allowances, and provision of such tangible objects as a dormitory and car received by the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) in the most recent year. If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Any salary listed under IFRS 2 “Share-based Payment”, including employee stock options, new restricted employee shares and cash capital increase by stock subscription, shall also be included in remuneration. Note 6: If the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) received remuneration as employees (including stocks and cash dividends) in the most recent year, the employee remuneration approved by the Board of Directors for allocation in the most recent year shall be disclosed. If it is impossible to estimate the same, the amount to be allocated this year shall be calculated based on what was actually allocated last year, and the form 1-3 shall be completed. Note 7: The aggregate of the remuneration paid to the Company's Directors by all companies included into the consolidated financial reports (including	NT$10,000,000 (inclusive) ~ NT$15,000,000 (exclusive) - - - - NT$15,000,000 (inclusive) ~ NT$30,000,000 (exclusive) - - General Directors: KUO, KUO-HUA General Directors: KUO, KUO-HUA NT$30,000,000 (inclusive) ~ NT$50,000,000 (exclusive) - - - - NT$50,000,000 (inclusive) ~ NT$100,000,000 (exclusive) - - - - Over NT$100,000,000 - - - - Total 7 persons 7 persons 7 persons 7 persons Note 1: Directors' names shall be identified one by one (institutional shareholders shall be identified by their names and representatives individually). General Directors and Independent Directors shall be listed separately and the amount of various payments shall be disclosed in summary. If a Director also serves as a General Manager or Vice General Manager, this form and the form (3-1) or (3-2-1) and (3-2-2) below shall be completed. Note 2: Remuneration to the Directors in the most recent fiscal year, including the Director's salary, allowances, severance pay, various bonuses, incentive payments, etc. Note 3: Remuneration to the Directors approved by the Board of Directors for allocation in the most recent fiscal year. Note 4: Professional service fees paid to the Directors in the most recent fiscal year (including traveling expense, special allowances, subsidies, provision of such tangible objects as a dormitory and car, etc.). If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Note 5: The salary, duty allowance, severance pay, bonuses, rewards, transportation allowance, special allowance, various allowances, and provision of such tangible objects as a dormitory and car received by the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) in the most recent year. If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Any salary listed under IFRS 2 “Share-based Payment”, including employee stock options, new restricted employee shares and cash capital increase by stock subscription, shall also be included in remuneration. Note 6: If the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) received remuneration as employees (including stocks and cash dividends) in the most recent year, the employee remuneration approved by the Board of Directors for allocation in the most recent year shall be disclosed. If it is impossible to estimate the same, the amount to be allocated this year shall be calculated based on what was actually allocated last year, and the form 1-3 shall be completed. Note 7: The aggregate of the remuneration paid to the Company's Directors by all companies included into the consolidated financial reports (including	NT$10,000,000 (inclusive) ~ NT$15,000,000 (exclusive) - - - - NT$15,000,000 (inclusive) ~ NT$30,000,000 (exclusive) - - General Directors: KUO, KUO-HUA General Directors: KUO, KUO-HUA NT$30,000,000 (inclusive) ~ NT$50,000,000 (exclusive) - - - - NT$50,000,000 (inclusive) ~ NT$100,000,000 (exclusive) - - - - Over NT$100,000,000 - - - - Total 7 persons 7 persons 7 persons 7 persons Note 1: Directors' names shall be identified one by one (institutional shareholders shall be identified by their names and representatives individually). General Directors and Independent Directors shall be listed separately and the amount of various payments shall be disclosed in summary. If a Director also serves as a General Manager or Vice General Manager, this form and the form (3-1) or (3-2-1) and (3-2-2) below shall be completed. Note 2: Remuneration to the Directors in the most recent fiscal year, including the Director's salary, allowances, severance pay, various bonuses, incentive payments, etc. Note 3: Remuneration to the Directors approved by the Board of Directors for allocation in the most recent fiscal year. Note 4: Professional service fees paid to the Directors in the most recent fiscal year (including traveling expense, special allowances, subsidies, provision of such tangible objects as a dormitory and car, etc.). If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Note 5: The salary, duty allowance, severance pay, bonuses, rewards, transportation allowance, special allowance, various allowances, and provision of such tangible objects as a dormitory and car received by the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) in the most recent year. If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Any salary listed under IFRS 2 “Share-based Payment”, including employee stock options, new restricted employee shares and cash capital increase by stock subscription, shall also be included in remuneration. Note 6: If the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) received remuneration as employees (including stocks and cash dividends) in the most recent year, the employee remuneration approved by the Board of Directors for allocation in the most recent year shall be disclosed. If it is impossible to estimate the same, the amount to be allocated this year shall be calculated based on what was actually allocated last year, and the form 1-3 shall be completed. Note 7: The aggregate of the remuneration paid to the Company's Directors by all companies included into the consolidated financial reports (including	NT$10,000,000 (inclusive) ~ NT$15,000,000 (exclusive) - - - - NT$15,000,000 (inclusive) ~ NT$30,000,000 (exclusive) - - General Directors: KUO, KUO-HUA General Directors: KUO, KUO-HUA NT$30,000,000 (inclusive) ~ NT$50,000,000 (exclusive) - - - - NT$50,000,000 (inclusive) ~ NT$100,000,000 (exclusive) - - - - Over NT$100,000,000 - - - - Total 7 persons 7 persons 7 persons 7 persons Note 1: Directors' names shall be identified one by one (institutional shareholders shall be identified by their names and representatives individually). General Directors and Independent Directors shall be listed separately and the amount of various payments shall be disclosed in summary. If a Director also serves as a General Manager or Vice General Manager, this form and the form (3-1) or (3-2-1) and (3-2-2) below shall be completed. Note 2: Remuneration to the Directors in the most recent fiscal year, including the Director's salary, allowances, severance pay, various bonuses, incentive payments, etc. Note 3: Remuneration to the Directors approved by the Board of Directors for allocation in the most recent fiscal year. Note 4: Professional service fees paid to the Directors in the most recent fiscal year (including traveling expense, special allowances, subsidies, provision of such tangible objects as a dormitory and car, etc.). If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Note 5: The salary, duty allowance, severance pay, bonuses, rewards, transportation allowance, special allowance, various allowances, and provision of such tangible objects as a dormitory and car received by the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) in the most recent year. If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Any salary listed under IFRS 2 “Share-based Payment”, including employee stock options, new restricted employee shares and cash capital increase by stock subscription, shall also be included in remuneration. Note 6: If the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) received remuneration as employees (including stocks and cash dividends) in the most recent year, the employee remuneration approved by the Board of Directors for allocation in the most recent year shall be disclosed. If it is impossible to estimate the same, the amount to be allocated this year shall be calculated based on what was actually allocated last year, and the form 1-3 shall be completed. Note 7: The aggregate of the remuneration paid to the Company's Directors by all companies included into the consolidated financial reports (including	NT$10,000,000 (inclusive) ~ NT$15,000,000 (exclusive) - - - - NT$15,000,000 (inclusive) ~ NT$30,000,000 (exclusive) - - General Directors: KUO, KUO-HUA General Directors: KUO, KUO-HUA NT$30,000,000 (inclusive) ~ NT$50,000,000 (exclusive) - - - - NT$50,000,000 (inclusive) ~ NT$100,000,000 (exclusive) - - - - Over NT$100,000,000 - - - - Total 7 persons 7 persons 7 persons 7 persons Note 1: Directors' names shall be identified one by one (institutional shareholders shall be identified by their names and representatives individually). General Directors and Independent Directors shall be listed separately and the amount of various payments shall be disclosed in summary. If a Director also serves as a General Manager or Vice General Manager, this form and the form (3-1) or (3-2-1) and (3-2-2) below shall be completed. Note 2: Remuneration to the Directors in the most recent fiscal year, including the Director's salary, allowances, severance pay, various bonuses, incentive payments, etc. Note 3: Remuneration to the Directors approved by the Board of Directors for allocation in the most recent fiscal year. Note 4: Professional service fees paid to the Directors in the most recent fiscal year (including traveling expense, special allowances, subsidies, provision of such tangible objects as a dormitory and car, etc.). If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Note 5: The salary, duty allowance, severance pay, bonuses, rewards, transportation allowance, special allowance, various allowances, and provision of such tangible objects as a dormitory and car received by the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) in the most recent year. If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Any salary listed under IFRS 2 “Share-based Payment”, including employee stock options, new restricted employee shares and cash capital increase by stock subscription, shall also be included in remuneration. Note 6: If the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) received remuneration as employees (including stocks and cash dividends) in the most recent year, the employee remuneration approved by the Board of Directors for allocation in the most recent year shall be disclosed. If it is impossible to estimate the same, the amount to be allocated this year shall be calculated based on what was actually allocated last year, and the form 1-3 shall be completed. Note 7: The aggregate of the remuneration paid to the Company's Directors by all companies included into the consolidated financial reports (including	NT$10,000,000 (inclusive) ~ NT$15,000,000 (exclusive) - - - - NT$15,000,000 (inclusive) ~ NT$30,000,000 (exclusive) - - General Directors: KUO, KUO-HUA General Directors: KUO, KUO-HUA NT$30,000,000 (inclusive) ~ NT$50,000,000 (exclusive) - - - - NT$50,000,000 (inclusive) ~ NT$100,000,000 (exclusive) - - - - Over NT$100,000,000 - - - - Total 7 persons 7 persons 7 persons 7 persons Note 1: Directors' names shall be identified one by one (institutional shareholders shall be identified by their names and representatives individually). General Directors and Independent Directors shall be listed separately and the amount of various payments shall be disclosed in summary. If a Director also serves as a General Manager or Vice General Manager, this form and the form (3-1) or (3-2-1) and (3-2-2) below shall be completed. Note 2: Remuneration to the Directors in the most recent fiscal year, including the Director's salary, allowances, severance pay, various bonuses, incentive payments, etc. Note 3: Remuneration to the Directors approved by the Board of Directors for allocation in the most recent fiscal year. Note 4: Professional service fees paid to the Directors in the most recent fiscal year (including traveling expense, special allowances, subsidies, provision of such tangible objects as a dormitory and car, etc.). If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Note 5: The salary, duty allowance, severance pay, bonuses, rewards, transportation allowance, special allowance, various allowances, and provision of such tangible objects as a dormitory and car received by the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) in the most recent year. If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Any salary listed under IFRS 2 “Share-based Payment”, including employee stock options, new restricted employee shares and cash capital increase by stock subscription, shall also be included in remuneration. Note 6: If the Directors who acted as employees concurrently (including the General Manager, Vice General Manager, other managers and employees) received remuneration as employees (including stocks and cash dividends) in the most recent year, the employee remuneration approved by the Board of Directors for allocation in the most recent year shall be disclosed. If it is impossible to estimate the same, the amount to be allocated this year shall be calculated based on what was actually allocated last year, and the form 1-3 shall be completed. Note 7: The aggregate of the remuneration paid to the Company's Directors by all companies included into the consolidated financial reports (including
-	General Directors: KUO, KUO-HUA	-	-	-	7 persons
-	General Directors: KUO, KUO-HUA	-	-	-	7 persons
-	-	-	-	-	7 persons
-	-	-	-	-	7 persons
NT$10,000,000 (inclusive) ~ NT$15,000,000 (exclusive)	NT$15,000,000 (inclusive) ~ NT$30,000,000 (exclusive)	NT$30,000,000 (inclusive) ~ NT$50,000,000 (exclusive)	NT$50,000,000 (inclusive) ~ NT$100,000,000 (exclusive)	Over NT$100,000,000	Total

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Compensation of Supervisors: Not applicable. The Company has established an Audit Committee on June 15, 2018.
Remuneration of the General Manager and Vice General Manager

December 31, 2020: (In thousands of New Taiwan Dollars)

Title	Name	Remuneration (A) (Note 2)	Remuneration (A) (Note 2)	Severance pay and pension (B)	Severance pay and pension (B)	Bonuses and special allowances (E) (Note 3)	Bonuses and special allowances (E) (Note 3)	Employee compensation (D) (Note 4)	Employee compensation (D) (Note 4)	Employee compensation (D) (Note 4)	Employee compensation (D) (Note 4)	Sum of A, B, C and D in proportion to earnings after tax (%) (Note 8)	Sum of A, B, C and D in proportion to earnings after tax (%) (Note 8)	Remuner ation from an invested company other than the Compan y’s subsidiar ies or parent company (Note 9)
		APEX Science & Enginee ring Corp.	All companies included into the financial statement (Note 5)	APE X Scien ce & Engin eering Corp.	All companies included into the financial statement (Note 5)	APEX Science & Engineer ing Corp.	All companies included into the financial statement (Note 5)	APEX Science & Engineering Corp.		All companies included into the financial statement (Note 5)		APEX Science & Engineeri ng Corp.	All companies in Consolidat ed Financial Statement s
								Cash	Stock	Cash	Stock
General Manager	KUO, KUO- HUA	8,852	9,867	326	326	3,526	3,826	17,751	0	17,851	0	9.65%	10.10%	�
Business Dept. General Manager	PENG, SHR BO
Business Dept. Vice General Manager	PENG, WU- YUAN
Business Dept. Vice General Manager	CHEN, TE-YUAN
Administration Dept. Vice General Manager	FAN, HSIU- WEN

Note 1: The retirement pension listed above is the employee profit sharing expense to be allocated.

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Range of remuneration

Range of remuneration paid to the General Managers and Vice General Managers	Number of General Managers and Vice General Managers	Number of General Managers and Vice General Managers
	APEX Science & Engineering Corp. (Note 6)	All companies included into the financial report (Note 7)E
Less than NT$1,000,000	-	-
NT$1,000,000 (inclusive) ~ NT$2,000,000(exclusive)	PENG, WU-YUAN CHEN,TE-YUAN	PENG, WU-YUAN CHEN,TE-YUAN
NT$2,000,000 (inclusive) ~ NT$3,500,000(exclusive)	PENG, SHR BO FAN,HSIU-WEN	PENG, SHR BO FAN,HSIU-WEN
NT$3,500,000 (inclusive) ~ NT$5,000,000(exclusive)	-	-
NT$5,000,000 (inclusive) ~ NT$10,000,000(exclusive)	-	-
NT$10,000,000 (inclusive) ~ NT$15,000,000(exclusive)	-	-
NT$15,000,000 (inclusive) ~ NT$30,000,000(exclusive)	KUO, KUO-HUA	KUO, KUO-HUA
NT$30,000,000 (inclusive) ~ NT$50,000,000(exclusive)	-	-
NT$50,000,00 (inclusive) ~ NT$100,000,000	-	-
Over NT$100,000,000	-	-
Total	5persons	5persons

Note 1: The name of General Manager or Vice General Managers shall be identified individually, and the various payments shall be disclosed aggregately. If a Director also serves as a General Manager or Vice General Manager, this form and the above form (1-1), or (1-2-1) and (1-2-2) should be completed.
Note 2: Please specify the salary, duty allowance and severance paid to the presidents and vice presidents in the most recent year.
Note 3: Please specify the bonus, reward, transportation allowance, special allowance, various allowances, and provision of such tangible objects as dormitory and car, as well as other remunerations, received by the presidents and vice presidents in the most recent year. If housing, vehicle or other means of transportation, or personal expenses are provided, the nature and cost of the asset provided, the rental calculated based on the actual cost or the fair market value, fuel, and other payments shall be disclosed. If a driver is provided, disclose compensation paid to the driver in a note; however, do not calculate such as part of executive compensation. Any salary listed under IFRS 2 “Share-based Payment”, including employee stock options, new restricted employee shares and cash capital increase by stock subscription, shall also be included in remuneration.
Note 4: Please specify the employee bonus (including stocks and cash dividends) to be allocated to the General Managers and Vice General Managers as approved by the Board of

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Directors for allocation in the most recent fiscal year. If it is impossible to estimate the same, the amount to be allocated this year shall be calculated based on that allocated physically last year, and the form 1-3 shall be completed.

Note 5: Please disclose the aggregate of the remuneration paid to the Company's General Managers and Vice General Managers by all companies included into the consolidated financial reports (including the Company).
Note 6: The aggregate of the remuneration to each General Managers or Vice General Manager by the Company shall include the General Manager's or Vice General Manager's name disclosed in the relevant space of the following table.
Note 7: The aggregate of the remuneration paid to each of the Company's General Managers and Vice General Managers by the companies included into the consolidated financial reports (including the Company) shall include the General Managers and Vice General Managers' names disclosed in the relevant space of the following table.
Note 8: The earnings after tax shall refer to the earnings after tax identified in the parent company only or individual financial statement for the most recent fiscal year.
Note 9: a. To specify whether the Company's General Managers and Vice General Managers have received remuneration from investees beyond subsidiaries (if none, please fill in "None").
- b. If the Company's General Managers and Vice General Managers have received remuneration form investees beyond subsidiaries, please include the same into Section E in the table and change the heading of the section into "Parent company and all investees".
- c. The remuneration shall refer to the remuneration, compensation, employee bonus and professional practicing fees received by the Company's General Managers and Vice General Managers who acted as the Directors, Supervisors or managers of investees other than subsidiaries.

The remuneration contents disclosed in this table are different from the concept of income specified in the Income Tax Act, thus the purpose of this table is for information disclosure only, rather than taxation purpose.

 4. Names of managers allocating employee remuneration and allocation status: The Board of Directors of the Company has decided to issue the total employee remuneration of NT$26,706,704 in cash for 2020 through resolution, and the method of allocation has not yet been resolved.

(V) Specify and compare the salaries to Directors, Supervisors, General Managers and Vice General Managers of the Company from the Company and companies included in the consolidated financial statements in proportion to the earnings after tax in the most recent two fiscal years, and specify the policies, standards, combinations, procedure of decision-making in respect of remunerations and their connection to business performance and future risks:

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(1) Ratio of total remuneration paid to earnings after tax

Title	Ratio of total remuneration paid to earnings after tax in 2019	Ratio of total remuneration paid to earnings after tax in 2019	Ratio of total remuneration paid to earnings after tax in 2020	Ratio of total remuneration paid to earnings after tax in 2020
	APEX Science & Engineering Corp.	Companies in the consolidated financial statements	APEX Science & Engineering Corp.	Companies in the consolidated financial statements
Director	3.90%	4.15%	2.61%	2.75%
Supervisor	Note 1	Note 1	Note 1	Note 1
General Manager and Vice General Manager	13.82%	14.62%	9.65%	10.10%

Note 1: The “Audit Committee” was set up to replace the Supervisors after the Directors were elected at the 2018 Regular Shareholders' Meeting.
(2) The remuneration of the Directors of the Company is clearly stipulated in Article 23 of the Articles of Incorporation. If profits have been gained in the current year, 8% shall be allocated for employees’ remuneration and no more than 2% shall be allocated for the Directors’ remuneration, subject to the review of the Remuneration Committee. The amounts shall not be paid until they have been submitted to the Board of Directors for discussion and approved by the Board, and the same shall be reported at the shareholders' meeting.
The remuneration of the General Managers and Vice General Managers is based on the "Organizational Rules of the Remuneration Committee" and "Remuneration Management Regulations" as the basis for evaluation, subject to the review of the Remuneration Committee and submission to the Board of Directors for discussion and approval.
(3) Connection to business performance and future risks: Operating performance has a direct impact on the remuneration, and the remuneration is subject to adjustment according to the operating performance and evaluation of future risks.

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III. Status of corporate governance

(I) Board of Directors

A total of 6 (A) Board meetings were held during the most recent fiscal year. The

attendance of the Directors was as follows:

Title	Name	Attendanc e in person (B)	Attend ance by proxy	Attendance rate (%) (B)/(A)
President	KUO, KUO- HUA	6		100
Director	Kaida Development Co., Ltd. Representative: WANG, CHAO-KUEI	5	1	83.33
Director	CHOU, HIS- YANG	5	1	83.33
Director	LU, FANG- YUAN	6		100
Independe nt Director	HSIAO, SHENG- HSIEN	6		100
Independe nt Director	WU, NAI- HUA	6		100
Independe nt Director	CHANG, PAO- TSAI	6		100

Other matters to be recorded:

With regard to the operation of the Board of Directors, if any of the following circumstances occurs, the dates, terms of the meetings, contents of motions, all Independent Directors’ opinions and the Company's response to such opinions shall be specified:

(1) Matters referred to in Article 14-3 of the Securities and Exchange Act:

Date	Session	Summary of motions	Independent Directors’ opinions	The Company's response
March 27, 2020	2020 2nd session	Distribution of 2019 remuneration of Directors and employees of the Company	Approved as proposed	Implemented as per the resolution
		2019 Financial Statements (including consolidated financial statements) and Business Report of the Company	Approved as proposed	Implemented as per the resolution

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		2019 Profit Distribution Plan	Approved as proposed	Implemented as per the resolution
		Review of the effectiveness of the Company's 2019 Internal Control System and provision of the Statement on Internal Control System	Approved as proposed	Implemented as per the resolution
		Propose to change CPA	Approved as proposed	Implemented as per the resolution
		Repurchase of its own shares by the Company and transfer to employees in accordance with relevant regulations	Approved as proposed	Implemented as per the resolution
May 12, 2020	2020 3rd session	Amendment to the Company’s 2020 Rules on First Repurchase of Shares and Transfer to Employees	Approved as proposed	Implemented as per the resolution
June 19, 2020	2020 4th session	Report on the implementation result of the Company’s first repurchase of shares upon expiration for 2020	Approved as proposed	Implemented as per the resolution
August 11, 2020	2020 5th session	Propose to change CPA	Approved as proposed	Implemented as per the resolution
		Addition of the Company’s Internal Control System	Approved as proposed	Implemented as per the resolution
November 12, 2020	2020 6th session	Amendment to the Company’s Internal Control System	Approved as proposed	Implemented as per the resolution
		The Company’s Independence and Competence Assessment on CPAs	Approved as proposed	Implemented as per the resolution
		Amendment to the Company’s 2020 Rules on First Repurchase of Shares and Transfer to Employees	Approved as proposed	Implemented as per the resolution
		The Company provides endorsement guarantees for subsidiaries of which more than 50% of the shares are directly or indirectly held the Company, and intends to authorize the President to make a decision within a single certain amount in accordance with the Company’s "Operating Procedures on Fund Loan and Endorsement Guarantee" and then report to the latest Audit Committee and the Board of Directors for ratification	Approved as proposed	Implemented as per the resolution
January 29, 2021	2021 1st	Amendment to the Company’s 2020 Rules on First Repurchase of Shares and Transfer to Employees	Approved as proposed	Implemented as per the resolution
March 25, 2021	2021 2nd session	Discussion on the distribution of 2020 remuneration of Directors and employees of the Company	Approved as proposed	Implemented as per the resolution
		2020 Financial Statements (including consolidated financial statements) and Business Report of the Company	Approved as proposed	Implemented as per the resolution
		2020 Profit Distribution Plan	Approved as	Implemented as

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			proposed	per the resolution
		Amendment to the Company’s Internal Control System	Approved as proposed	Implemented as per the resolution
		Review of the effectiveness of the Company's 2020 Internal Control System and provision of the Statement on Internal Control System	Approved as proposed	Implemented as per the resolution

(2) Any recorded or written Board resolutions to which Independent Directors

have objections or reservations to be noted in addition to the above: None.

Regarding recusals of Directors from voting due to existence of personal interests, the names of the Directors, contents of motions, reasons for recusal and results of voting shall be specified:
(1) 2020 1st Regular Shareholders' Meeting on January 9, 2020
- Content of motion: Distribution of 2019 year-end bonus for institutional directors and managers

Abstaining Director: KUO, KUO-HUA

Reasons for avoidance of interest conflicts and participation in voting: As Manager and President Kuo, Kuohua was related to the issue of the concerned party's year-end bonus, he did not participate in the discussion and voting to avoid conflicts of interests. Five Directors present passed the proposal without objection.

(2) 2020 5th Regular Shareholders' Meeting on August 11, 2020 Content of motion: Distribution of 2019 remuneration of managers and employees in cash

Abstaining Director: KUO, KUO-HUA, representative WANG, CHAOKUEI of Kaida Development Co., Ltd.

Reasons for avoidance of interest conflicts and participation in voting: As Manager and President Kuo Kuohua and representative Wang Chaokuei of Kaida Development Co., Ltd. were related to relevant issues of the concerned party, they did not participate in the discussion and voting to avoid conflicts of interests. Five Directors present passed the proposal without objection.

(3) 2021 1st Regular Shareholders' Meeting on January 29, 2021 Content of motion: Distribution of 2020 year-end bonus for managers Abstaining Director: KUO, KUO-HUA, representative WANG, CHAOKUEI of Kaida Development Co., Ltd.

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Reasons for avoidance of interest conflicts and participation in voting: As President Kuo Kuohua and President and representative Wang Chaokuei of Kaida Development Co., Ltd. had interests in relevant matters regarding the concerned party, they did not participate in the discussion and voting to avoid conflicts of interests. The rest Directors present passed the proposal without objection.

The cycles, periods, scope, method and contents of self and peer evaluation on the performance of the Board of Directors of the listed company shall be disclosed. The form of implementation of the Board evaluation shall be completed.

The status of implementation of the Board evaluation

Frequency	Period	Scope	Method	Content
Once a year	January 1, 2020 to December 31, 2020	1. Board of Directors 2. Directors 3. Audit Committee 4. Remuneration Committee	Self assessment	1. Assessment on operation of the Board of Directors (1) Their engagement in the Company's operations (2) Improvement in the quality of decision making by the Board (3) The composition and structure of the Board (4) The election of the Directors and their continuing professional education (5) Internal control system (6) Emphasis on compliance with various laws and codes of practice (7) Maintenance of confidentiality of relevant internal information of the Company obtained when performing duties 2. Self evaluation by Directors (1) Their grasp of the Company's goals and missions (2) Their recognition of Director's responsibilities (3) Their engagement in the Company's operations (4) Their internal relationship management and communication (5) Their professionalism and continuing professional education (6) Internal control system 3. Operation of the Audit Committee (1) Their engagement in the Company's operations (2) Their awareness of responsibilities (3) Improvement in the quality of decision makingbythe

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==> picture [159 x 332] intentionally omitted <==

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

Committee
(4) Composition and member
selection of the Committee
(5) Internal control system
(6) Emphasis on compliance with
various laws and codes of
practice
(7) Maintenance of confidentiality
of relevant internal information
of the Company obtained when
performing duties
4. Operation of the Remuneration
Committee
(1) Their engagement in the
Company's operations
(2) Their awareness of
responsibilities.
(3) Improvement in the quality of
decision making by the
Committee.
(4) Composition and member
selection of the Committee
(5) Emphasis on compliance with
various laws and codes of
practice
(6) Maintenance of confidentiality
of relevant internal information
of the Company obtained when
performing duties
----- End of picture text -----

Targets set to strengthen the functions of the Board of Directors (such as the establishment of an audit committee and improvement of information transparency, etc.) during the current year and past year and the assessment of the implementation:
The Company set up a "Remuneration Committee" in 2021. In addition, during the election of Directors and Supervisors at the 2015 Regular Shareholders' Meeting, 3 Independent Directors were elected, with all Independent Directors serving as the Remuneration Committee members. The Company established an Audit Committee to replace supervisors after Directors were elected at the 2018 Regular Shareholders' Meeting. Video and audio recording was conducted throughout all meetings of the Board, and all duties of the Board were duly performed in accordance with relevant laws and regulations.

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(II) Operation of the Audit Committee:

A total of 5 (A) meetings were held by the Committee during the most recent fiscal

year. The attendance of the Independent Directors was as follows:

Title	Name	Attendance in person (B)	Attendance rate (%) (B/A)
Independent Director	HSIAO, SHENG- HSIEN	5	100
Independent Director	WU, NAI- HUA	5	100
Independent Director	CHANG, PAO- TSAI	5	100

Other matters to be recorded:

With regard to the operation of the Audit Committee, if any of the following circumstances occurs, the dates, terms of the meetings, contents of motions, all Audit Committee resolutions, and the Company’s response to such resolutions shall be specified:
(1) Matters referred to in Article 14 5 of the Securities and Exchange Act:

Date	Session	Summary of motions	Audit Committee ’s opinions	The Company's Response
March 27, 2020	2020 2nd session	2019 Financial Statements (including consolidated financial statements) and Business Report of the Company	Approved as proposed	Implemented as per the resolution
		2019 Profit Distribution Plan	Approved as proposed	Implemented as per the resolution
		Propose to change CPA	Approved as proposed	Implemented as per the resolution
		Review of the effectiveness of the Company's 2019 Internal Control System and provision of the Statement on Internal Control System	Approved as proposed	Implemented as per the resolution
		Repurchase of its own shares by the Company and transfer to employees in accordance with relevant regulations	Approved as proposed	Implemented as per the resolution
May 12, 2020	2020 3rd session	Amendment to the Company’s 2020 Rules on First Repurchase of Shares and Transfer to Employees	Approved as proposed	Implemented as per the resolution
August 11, 2020	2020 4th session	Propose to change CPA	Approved as proposed	Implemented as per the resolution
		Addition of the Company’s Internal	Approved	Implemented as

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		Control System	as proposed	per the resolution
November 12, 2020	2020 5th session	Amendment to the Company’s Internal Control System	Approved as proposed	Implemented as per the resolution
		The Company’s Independence and Competence Assessment on CPAs	Approved as proposed	Implemented as per the resolution
		Amendment to the Company’s 2020 Rules on First Repurchase of Shares and Transfer to Employees	Approved as proposed	Implemented as per the resolution
		The Company provides endorsement guarantees for subsidiaries of which more than 50% of the shares are directly or indirectly held the Company, and intends to authorize the President to make a decision within a single certain amount in accordance with the Company’s "Operating Procedures on Fund Loan and Endorsement Guarantee" and then report to the latest Audit Committee and the Board of Directors for ratification	Approved as proposed	Implemented as per the resolution
January 29, 2021	2021 1st	Amendment to the Company’s 2020 Rules on First Repurchase of Shares and Transfer to Employees	Approved as proposed	Implemented as per the resolution
March 25, 2021	2021 2nd session	2020 Financial Statements (including consolidated financial statements) and Business Report of the Company	Approved as proposed	Implemented as per the resolution
		2020 Profit Distribution Plan	Approved as proposed	Implemented as per the resolution
		Review of the effectiveness of the Company's 2020 Internal Control System and provision of the Statement on Internal Control System	Approved as proposed	Implemented as per the resolution
		Amendment to the Company’s Internal Control System	Approved as proposed	Implemented as per the resolution

(2) Except for the aforementioned matters, other resolutions which were not approved by the Audit Committee but resolved by more than two-thirds of all the Directors: None.
Regarding recusals of Independent Directors from voting due to existence of personal interests, the names of the Independent Directors, contents of motions, reasons for recusal and results of voting shall be specified: None.
Communication between the Independent Directors, the internal Chief Audit Officer, and CPAs (including the key items, methods, and results of audit of finances and operations)
(1) Summary of communication between Independent Directors and the

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internal Chief Audit Officer:

Date	Summaryof communication
January 9, 2020	Internal Audit Report from November to December, 2019
March 27, 2020	1. Internal Audit Report from January to February, 2020 2. Review of the effectiveness of the Company's 2019 Internal Control System and provision of the Statement on Internal Control System
May12,2020	Internal Audit Report from March to April,2020
August 11, 2020	1. Internal Audit Report from May to July, 2020 2. Addition of the Company’s Internal Control System 3. Amendment to the Company’s 2020 Audit Plan
November 12, 2020	1. Internal Audit Report from August to October, 2020 2. Amendment to the Company’s Internal Control System 3. Proposal of the Company’s 2021 Audit Plan
January 29, 2021	Internal Audit Report from November to December, 2020
March 25, 2021	1. Internal Audit Report from January to February, 2021 2. Review of the effectiveness of the Company's 2020 Internal Control System and provision of the Statement on Internal Control System 3. Amendment to the Company’s Internal Control System

March 25, 2021 2. Review of the effectiveness of the Company's 2020 Internal Control System and provision of the Statement on Internal Control System 3. Amendment to the Company’s Internal Control System	March 25, 2021 2. Review of the effectiveness of the Company's 2020 Internal Control System and provision of the Statement on Internal Control System 3. Amendment to the Company’s Internal Control System
(2) Summary of communication between Independent Directors and CPAs:
Date	Summaryof communication
March 27, 2020	Communication on financial report audit by the end of 2019
August 11, 2020	Communication on financial report audit by the middle of 2020
November 12, 2020	Communication on audit of 2020 Q3 consolidated financial report
March 25, 2021	Communication on financial report audit by the end of 2020

(3) Engagement of Supervisors in operation of the Board of Directors: Not applicable. The Company established an Audit Committee on June 15, 2018.

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	No material difference	No material difference
Status (Note)	Description	The Company has established the "Rules and Procedures of the Shareholders' Meeting", "Rules and Procedures for Board of Directors Meetings", “Internal Operating Procedure on Processing Important Information”, “Internal Control System”, “Procedures for Acquisition or Disposal of Assets”, “Operating Procedures for Fund Loans” and other guidelines and regulations on corporate governance, and the implementation of such operating procedures has met the requirements of the aforesaid principles. The Company has established the "Corporate Governance Best-practice Principles" according to the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies” and disclosed the principles on the Company’s website.	(I) The Company shall convene shareholders' meetings in accordance with relevant laws and regulations, and provide comprehensive rules for such meetings. For the matters to be resolved at shareholders meetings, the Company shall faithfully implement resolutions adopted at the meetings in accordance with the rules for the meetings. In addition, the Company has
	No
	Yes	�	�
	Evaluation Item	I. Conformity to the Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies and disclosure of Corporate Governance Best- Practice Principles	II. Shareholding structure & shareholders' rights (I) Does the Company establish internal operating procedures or policies to handle shareholder suggestions, doubts disputes and lawsuits and implemented such procedures or policies?

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	No material difference No material difference
Status (Note)	Description	appointed spokespersons to address the suggestions or problems proposed by shareholders, and also disclosed the contact information in the annual report and the Company’s website for shareholders' convenience. (II) The Company stays abreast of the shareholding ratios of Directors, Supervisors, managers and major shareholders whom hold 10% (or above) of the shares, and reports changes in shareholding and enforcement and release of stock pledges on a monthly basis as specified. (III) The Company has established the “Operating Procedures for Supervising of Subsidiaries", “Operating Procedures for Fund Loans and Endorsement Guarantee", "Procedures for Acquisition or Disposal of Assets" and other relevant internal regulations as the basis for the management of business and financial operations of affiliated companies. The Company has also established the “Internal Operating Procedure on Processing Important Information" to avoid improper leakage of information and ensure the consistency and correctness of information released to the public. Relevant regulations have also been complied with to establish risk control and firewall mechanisms. (IV) The Company has prepared the “Ethical Corporate
	No
	Yes	� �
	Evaluation Item	(II) Does the Company possess a list of major shareholders and list of ultimate owners of these major shareholders? (III) Has the company established and enforced risk control and firewall systems with its affiliate companies?

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	No material difference	No material difference
Status (Note)	Description	Management Best Practice Principles", which stipulates that the Company’ employees shall not use any undisclosed information they know to conduct insider trading, nor disclose it to others so as to prevent others from using such information to engage in insider trading. The Company has also prepared the "Internal Operating Procedure on Processing Important Information", which clearly normalizes the publication of important news and handling of important internal information disclosure and specifies relevant measures, which have been simultaneously disclosed on the Company's website.	(I) The Company has specified in the “Corporate Governance Best-Practice Principles” that, the Company shall diversify the Board's composition and develop guidelines on diversity based on the operations, nature of business activities and development needs of the Company, including basic requirements and values and expertise and skills, which have been duly implemented. The current Board of Directors of the Company consists of 7 Directors (including 4 General Directors and 3 Independent Directors). There are 2 female Directors in the list of members (accounting for 29% of the
	No
	Yes	�	�
	Evaluation Item	(IV) Has the Company adopted internal rules prohibiting company insiders from trading securities using information not disclosed to the market?	III. Composition and responsibilities of the Board of Directors (I) Is the composition of the Board of Directors determined by taking appropriate policy based on diversity and ensure the actual implementation?

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	The Company has set up a Remuneration Committee and an Audit Committee as required. Other functional
Status (Note)	Description	Board). Their professional capabilities are as follows: President Kuo, Kuo-Hua and Independent Director Wu Nai-Hua are specialized in leadership, operational decision-making and crisis management with international mindedness; President Lu, Fang- Yuan is proficient in the knowledge of the industry; Independent Director Chang, Pao-Tsai and President Wang, Chao-Kuei are specialized in human resources and administrative management; Independent Director Hsiao, Sheng-Hsien is specialized in legal and accounting affairs; President Chou, His-Yang is specialized in operations management, economics and finance. The Company also emphasizes on the expertise and skills possessed by the Board members. In addition to the field of industry and operations management, the Company expects to raise the ratio of Directors specialized in finance and law to 10%. Among the Company’s current Board members, Directors specialized in finance account for 29%, and those specialized in law account for 14%. (II) Considering the Company's current operating conditions, the size of the Board of Directors and the number of Independent Directors, at this stage, the Company has set up a Remuneration Committee and an Audit Committee according to laws and
	No	�
	Yes	�
	Evaluation Item	(II) In addition to the Remuneration Committee and Audit Committee, has the Company voluntarily

-40-

Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	committees will be set up as needed for future businesses of the Company. No material difference
Status (Note)	Description	regulations, and has established internal control management mechanisms for various businesses. The system of special, operational and decision-making meetings has also been established to evaluate important issues for the Board’s reference during the implementation of their supervising duties. Other functional committees will be set up as needed for future businesses of the Company. (III) The Company’s “Board Self-evaluation or Peer Evaluation Regulations” was passed by the Board of Directors on March 27, 2019, stating that self performance evaluation by the Board, self or peer evaluation of Directors and self performance evaluation by the Audit Committee shall be implemented at the end of each year. The Company completed the 2020 performance evaluations of the Board and Directors in February 2021, and the evaluation results were reported at the Board meeting convened in March 2021. Based on the operating conditions and needs, the Company has specified the items to be measured for the performance evaluation of the Board of Directors, including the following five aspects: I. Their engagement in the Company's operations. II. Improvement in the quality of decision making by the Board.
	No
	Yes	�
	Evaluation Item	established other functional committees? (III) Has the Company established standards to measure the performance of the Board, and does the Company implement such annually? Does it report the results of the performance evaluation to the Board and use them as a reference for each Director's remuneration and nomination of term renewal?

-41-

Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
Status (Note)	Description	III. The composition and structure of the Board. IV. The election of the Directors and their continuing professional education. V. Internal control. The items to be measured for the performance assessment of Directors (self or peer assessment) include the following six aspects: I. Their grasp of the Company's goals and missions. II. Their awareness of responsibilities. III. Their engagement in the Company's operations. IV. Their internal relationship management and communication. V. Their professionalism and continuing professional education. VI. Internal control. The items to be measured for the performance assessment of functional committees include the following five aspects: I. Their engagement in the Company's operations. II. Their awareness of responsibilities. III. Improvement in the quality of decision making by the committee. IV. Composition and member selection of the committee. V. Internal control. The indexes of performance assessment of the Board
	No
	Yes
	Evaluation Item

-42-

Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	No material difference
Status (Note)	Description	shall be determined based on the operations and needs of the Company and shall be suitable and appropriate for the assessment, subject to regular reviews and constructive comments of the Remuneration Committee. Scoring criteria may be modified and adjusted based on the Company's needs. The weighted scoring method may be adopted based on the aspects of assessment. When electing or nominating members of the Board of Directors, the Company shall base its election on the assessment results of the performance of the Board and shall base its determination of an individual Director's remuneration on the assessment results of his or her performance. (IV) The Company’s "Procedures for Independence and Performance assessment of CPAs” was passed by the Board of Directors on April 16, 2018, stating that the Company shall carry out the assessments of CPAs on a regular basis (at least once a year) and, with reference to Article 47 of the Certified Public Accountant Act and the Bulletin No. 10 of Code of Professional Ethics, prepare an form for the independence and competence assessment of CPAs. After the assessment is completed by the Financial/Accounting Dept., the results shall be
	No
	Yes	�
	Evaluation Item	(IV) Does the Company regularly assess on the independence of CPAs?

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
Status (Note)	Description	submitted at the nearest Board meeting for discussion. The 2020 independence and competence assessment of CPAs was completed, reviewed and passed at the Board meeting convened in November 2020. The items of independence and competence assessment of CPAs are as follows: (1) As of the most recent assurance operation, there is no CPA that hasn’t been replaced for seven (7) years. (2) No CPA has any significant financial interest in any consignor. (3) CPAs shall avoid having any inappropriate relationship with the consignor. (4) CPAs shall ensure that their assistants are honest, fair and independent. (5) No CPA shall perform audit and assurance services on the financial statements of a company he/she has served within two (2) years before practicing. (6) No CPA shall permit others to practice under his/her name. (7) No CPA shall own any share of the Company or its affiliated companies. (8) There is no loan between any CPA and the Company or its affiliated companies.
	No
	Yes
	Evaluation Item

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
Status (Note)	Description	(9) No CPA shall have engaged in joint investments or benefit sharing with the Company or its affiliated companies. (10) No CPA concurrently serves as a regular employee of the Company or any of its affiliated companies or receive a fixed salary from them. (11) No CPA is involved in the decision-making process of the Company or its affiliated companies. (12) No CPA concurrently engages in other businesses that may lead to loss of independence. (13) No CPA is a spouse or a relative within the second degree of kinship to any management of the Company. (14) No CPA has received any commission related to his/her services. (15) As of now, No CPA has engaged in any matter that may result in disciplinary actions taken against him/her or damage to his/her independence. In addition, the following performance of CPAs has been evaluated: (1) Completion of the financial assurance of each period for the Company as scheduled. (2) Completion of the financial audit of each period for invested companies as scheduled.
	No
	Yes
	Evaluation Item

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof		No material difference
Status (Note)	Description	(3) Provision of financial and tax consulting services for the Company from time to time.	I. The Administration Dept. used to concurrently take charge of corporate governance. In order to improve the effectiveness of corporate governance, the Board of Directors passed a resolution on November 12, 2020, stating that the Director of the Legal Affairs Division of the President’s Office shall concurrently serve as the Company’s Chief Corporate Governance Officer and possess at least 3 years of experience in a supervisory position specialized in law in a listed company, which complies with relevant staffing regulations. The Chief Corporate Governance Officer is responsible for corporate governance matters, guarantee of shareholders' rights and interests and improvement of the Board’s functions, including but not limited to providing information required by Directors and Independent Directors to perform their functions, assisting Directors and Independent Directors in strict compliance with the law, handling matters related to Board meetings and shareholders' meetings according to the law, handling company registration and changes thereto, and preparing minutes of the Board meetings and shareholders’ meetings.
	No
	Yes		�
	Evaluation Item		IV. Has the company appoint adequate persons and a chief governance officer to be in charge of corporate governance matters (including but not limited to providing Directors and Supervisors required information for business execution, assisting Directors and Supervisors in following laws and regulations, handling matters in relation to the Board meetings and shareholders' meetings and keeping minutes at the Board meetings and shareholders' meetings according to law)?

-46-

Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
Status (Note)	Description	II. Performance of duties in 2020 is as follows: (I) Assisted Independent Directors and Directors in performing their duties, provided them with the necessary information, and assisted Directors in continuing education/training. (II) Assisted in agenda preparation for the meetings of the Audit Committee, Board meetings and shareholders' meetings and pass a resolution for legal compliance issues. (III) Purchase of the 2020 liability insurance for Directors. (IV) In order to implement corporate governance, performance assessments of the 2020 Board of Directors and the Directors have been carried out and reported at the Board meeting convened in March 2021. (V) An investors’ conference regarding the business performance was held in 2020; necessary information has been regularly disclosed to market investors to well protect shareholders' rights and interests. (VI) A Regular Shareholders' Meeting was held in June 2020, and the date of the meeting was registered and the notice of meeting, handbook and meeting minutes were prepared within the statutory time limit in accordance with the law.
	No
	Yes
	Evaluation Item

-47-

Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof		No material difference
Status (Note)	Description	(VII) Proposed agendas for the Board meetings and informed the Directors 7 days prior to meetings; convened the meetings and provided meeting information; sent the meeting minutes after the meetings. (VIII)Proposed agendas for the meetings of the Audit Committee and informed the members 7 days prior to meetings; convened the meetings and provided meeting information; sent the meeting minutes after the meetings.	Relevant departments and spokespersons are accessible to stakeholders (clients, employees, shareholders, suppliers, distributors and the community.. . ) as the communication channels. The Company has disclosed the contact information on the official website, where a special section for stakeholders is provided. If they have any questions, they can contact us as needed at any time by telephone, fax or e-mail, all of which are smooth communication channels. Contact channels for stakeholders: I. Regarding employee relations Contact: LIN, SU-CHEN, Special Assistant Tel: (02) 2223-4099 #622 E-mail: [email protected] II. Regarding relations with shareholders and investors Spokesperson: WU, HSIU-LIN, Director
	No
	Yes		�
	Evaluation Item		V. Does the company establish communication channels and a dedicated section on the company website for stakeholders (including but not limited to shareholders, employees, customers, and suppliers) to respond to material corporate social responsibility issues in a proper manner?

-48-

==> picture [443 x 680] intentionally omitted <==

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

thereof
Deviations from the TWSE/TPEx Listed
Corporate Governance Companies and reasons No material difference No material difference
Best-Practice Principles for
Website:
law.
the
Description with
Status (Note)
[email protected]
�
The Company has established a corporate website and disclosed the information regarding the Company's financial, business and corporate governance status in a timely manner in accordance http://www.apexgrp.com.tw.
(Financial/Accounting Dept.) Tel: (02) 2223-4099 #687 E-mail: [email protected] Deputy spokesperson: HUANG, CHIEH, Director (Legal Affairs Division) Tel: (02) 2223-4099 #655 E-mail: [email protected] Regarding relations with clients and suppliers Contact: WEN, HSIN-TA, Director (Department) Tel: (02) 2223-4099 #147 E-mail
III. The Company has commissioned a professional stock services agency, Yuanta Financial Holding Co., Ltd., to handle the affairs of the shareholders’ meetings, so that all such affairs can be carried out legally, effectively and safely. For the implementation of stock affairs, an internal control system has also been established, and the internal audit of stock affairs is conducted annually. (I)
� �
Yes No
Evaluation Item
Has the Company established a corporate website to disclose information regarding the Company's financial, business, and corporate governance status?
Does the company appoint a professional shareholder service agency to deal with shareholder affairs? (I)
VI. VII. Information disclosure
----- End of picture text -----

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	No material difference Currently, the Company has submitted relevant financial information within the specified time limits in accordance with relevant regulations.	No material difference
Status (Note)	Description	(II) The Company has designated dedicated personnel to collect the Company’s information and disclose major issues, and has implemented the spokesperson and deputy spokesperson system. The Company has also released the information on investors' conferences for the purpose of full disclosure of information. (III) The Company’s 2020 Financial Report was submitted on March 31, 2021. The Financial Reports for Q1, Q2 and Q3 of 2020 were submitted on May 15, August 14 and November 13, 2020, respectively. The operating conditions of each month were submitted before the 10th of the following month.	(I) Employees’ rights and interests: The Company communicates with employee representatives by holding regular labor- management meetings, and has set up a contact channel for employee relations to listen to
	No	�
	Yes	�	�
	Evaluation Item	(II) Has the Company established any other information disclosure channels (e.g. maintaining a website in English, designating people to handle information collection and disclosure, appointing spokespersons, webcasting investors' conference, etc.)? (III) Does the Company announce and declare the annual financial report within two months after the end of the fiscal year? Does it announce and declare the first, second and third quarter financial reports and operating conditions of each month as soon as possible before the prescribed period?	VIII. Is there any other important information to facilitate a better understanding of the Company's corporate governance practices (including but not limited to

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
Status (Note)	Description	employees' ideas, care for employees and continuously improve employee satisfaction on a reasonable, practical and legal basis so as to improve the relationships with employees and ensure harmonious labor-management relations. (II) Employee care: In addition to the provision of regular physical examinations for employees, the Company also has purchased group insurance and travel insurance for all employees, arranged a variety of leisure activities after work (fitness equipment, basketball shooting machines, etc.) and provided employees with multiple learning channels. The Company has established an Employee Benefits Committee, which regularly organizes company trips and birthday parties, provides subsidies for club activities and various subsidies such as birthday gifts, marriage subsidy and maternity subsidy, and cares for employees' physical and mental health, benefits and career development. For relevant measures, refer to "V. Labor relations" in Chapter 5 of this Annual Report. (III) Investor relations: The Company has commissioned a professional stock services agency, Yuanta Financial Holding Co., Ltd., to handle stock affairs and relevant matters
	No
	Yes
	Evaluation Item	employee rights, employee wellness, investor relations, supplier relations, stakeholder rights, Directors' and Supervisors' training records, implementation of risk management policies and risk assessment measures, implementation of customer policies, and participation in liability insurance by Directors and Supervisors)?

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
Status (Note)	Description	and also established the spokesperson system. A contact channel for communication with shareholders and corporate investors has also been provided. (IV) Supplier relations: The Company adheres to the philosophy of coexistence and co-prosperity when dealing with suppliers. The competent authority is responsible for supervising and guiding manufacturers, and recognizing excellent manufacturers by giving awards every year. The channels for communication with suppliers are also diverse and effective. In addition, suppliers are also required to obey relevant regulations on issues such as environmental protection, safety or health, and to work together to promote corporate social responsibility. (V) Stakeholders’ rights: The Company’s stakeholders include employees, clients, shareholders, investors, suppliers, etc. By adhering to the principles of maintaining good relationships with stakeholders and respecting and protecting their legitimate rights and interests, the Company provides sufficient information based on the concerns of all stakeholders to help them with their judgment and decision-making on the Company’s operating and financial status.
	No
	Yes
	Evaluation Item

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
Status (Note)	Description	The Company can properly respond to changes in environmental trends and amendments to laws and regulations by cooperating with various units. In order to meet the stakeholders’ expectations, the Company adopts various communication methods to ensure the completion of relevant tasks on the one hand, and to maintain smooth communication channels on the other hand. The business teams regularly provide relevant feedback information for future improvements or reference in planning. The Company has always been adhering to stable business strategies and financial operation to protect the stakeholders’ rights and interests. Stakeholders' concerns are addressed by relevant departments. In addition, the Company also actively promotes corporate value and reputation, and strives to become an excellent sustainable enterprise. The Company gives returns to shareholders by distributing dividends, and maintains sound capital planning and a steady financial structure. Authentic, real-time and transparent information on operating and financial conditions is provided to investors. All announcement documents publicized in accordance with the regulations of the competent authority are disclosed in the market observation post system.
	No
	Yes
	Evaluation Item

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Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
Status (Note)	Description	When maintaining normal business development and maximizing shareholders’ interests, the Company also continues to pay close attention to issues such as consumer rights, social environmental protection and public welfare, and attach importance to the Company's social responsibility. (VI) Directors' continuing education: In order to improve the Directors’ expertise and skills, maintain operational stability and maximize benefits, the Company’s Directors continue to take various courses, and the relevant details have been submitted in the market observation post system. (VII) Implementation of risk management policies and risk assessment criteria: The Board members of the Company are from diversed backgrounds and possess different professional capabilities. Kuo, Kuo-Hua and Wu, Nai-Hua are specialized in leadership, operational decision-making, operations management and crisis management with international mindedness; Lu, Fang-Yuan, Chang, Pao-Tsai and Wang, Chao-Kuei are proficient in the knowledge of the industry, human resources and administrative management; Hsiao, Sheng-Hsien and Chou, His-Yang are specialized in legal affairs, economics and finance. Therefore, the Company can immediately identify
	No
	Yes
	Evaluation Item

-54-

Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
Status (Note)	Description	various risks arising from operations and take appropriate measures. (VIII) Implementation of customer service policies In the field of engineering, the Company stays down- to-earth and dedicates our efforts to the business by adhering to the business philosophy of "being extraordinary with professionalism and integrity", to lay a broad and stable technological foundation in construction, grow steadily day by day and achieve remarkable quality. By means of proper cost planning and control and dynamic project-specific management, the Company devotes ourselves to become a construction company that provides customers with integrated services such as feasibility studies, design and planning, procurement and manufacturing, construction and test run, and after- sales service. In the field of optoelectronics, the core of the Company's mission and vision is to become a professional solution supplier, saving customers' costs and creating win-win situations in business. The Company makes every effort to continuously innovate and develop skills and satisfy customer needs by understanding their needs and actively providing energy-saving and cost-efficient solutions to adapt to trends.
	No
	Yes
	Evaluation Item

-55-

Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof
Status (Note)	Description	In the field of architecture, by adhering to the business philosophy of “people orientation and integrity make sustainability”, the Company is committed to "building humanized lifetime homes" and dedicated to designing sweet living rooms as if they were our homes, striving to meet customer needs with 100% satisfaction and zero need for after- sales service and fulfill the vision of becoming an excellent architect specialized in home design. (IX) Purchase of liability insurance for Directors: In order to create a safe working environment for the Directors of the Company so that they can devote themselves wholeheartedly to work without any worries and facilitate steady operations of the Company by maximizing shareholders’ benefits and effectively making up for losses, since 2007, the Company has purchased liability insurance for Directors and Supervisors every year. As of the date of preparation of this Annual Report, the latest insurance period is from May 29, 2000 to May 29, 2021 (insurance company: Fubon Insurance Co, Ltd., insurance coverage: NT$162.5 million), and details were submitted at the Board meeting convened on June 19, 2020.
	No
	Yes
	Evaluation Item

-56-

Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	improved. (not applicable if not included as a company to be evaluated) On November 12, 2020, the Company’s Board of Directors passed a resolution that the Director of the Legal Affairs Division of the President’s Office shall concurrently serve as the Company’s Chief Corporate Governance Officer, responsible for corporate governance issues. The scope of authority and execution of duties of the Officer have been disclosed on the Company’s website and in the Annual Report.
Status (Note)	Description
	No
	Yes
	Evaluation Item

-57-

Operation status	I. The Company’s Remuneration Committee, composed of 3 members, was established on December 16, 2011. II. The term of the members is: from June 15, 2018 to June 14, 2021. In the current year (2020), the Committee held 5 meetings. The actual attendance of Convener Chang, Pao-Tsai and Independent Directors Hsiao, Sheng-Hsien and Wu, Nai-Hua was 5 times, and the attendance rate reached 100%.
Responsibilities	I. To establish and regularly review the policies, systems, standards and structures of the performance assessment and remuneration of the Directors and managers. II. To regularly assess and determine the remuneration of the Directors and managers.
Composition	I. The Committee shall consist of at least three members (note: no less than three) appointed by the resolution of the Board of Directors. One of the members shall serve as the convener. II. The term of the members of the Committee shall be the same as that of the Board of Directors by whom they were appointed. III. In the event that the number of members is less than three persons due to the dismissal of a member for any reason, the Company shall hold a Board meeting for re-election to fill the vacant seat within 3 months from the date of occurrence. IV. When the members of the Committee are appointed or changed, the Company shall file an announcement on the information declaration website designated by the competent authority within two days from the date of the fact. V. The members include: Convener Chang, Pao-Tsai and Independent Directors Hsiao, Sheng-Hsien and Wu, Nai-Hua.

Operation status

I.
The Company’s Remuneration
Committee, composed of 3
members, was established on
December 16, 2011.
II.
The term of the members is:
from June 15, 2018 to June 14,
2021. In the current year (2020),
the Committee held 5 meetings.
The
actual
attendance
of
Convener Chang, Pao-Tsai and
Independent Directors Hsiao,
Sheng-Hsien and Wu, Nai-Hua
was 5 times, and the attendance
rate reached 100%.

Responsibilities

I.
To establish and regularly review the policies,
systems, standards and structures of the
performance assessment and remuneration of
the Directors and managers.
II.
To
regularly
assess
and
determine
the
remuneration of the Directors and managers.

Composition

I.
The Committee shall consist of at least three
members (note: no less than three)
appointed by the resolution of the Board of
Directors. One of the members shall serve
as the convener.
II.
The term of the members of the Committee
shall be the same as that of the Board of
Directors by whom they were appointed.
III.
In the event that the number of members is
less than three persons due to the dismissal
of a member for any reason, the Company
shall hold a Board meeting for re-election to
fill the vacant seat within 3 months from the
date of occurrence.
IV.
When the members of the Committee are
appointed or changed, the Company shall
file an announcement on the information
declaration website designated by the
competent authority within two days from
the date of the fact.
V.
The members include: Convener Chang,
Pao-Tsai and Independent Directors Hsiao,
Sheng-Hsien and Wu, Nai-Hua.

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I. Information of Remuneration Committee members

Title (Note 1)	Qualificat ions Name	Meeting one of the following professional qualification requirements, together with at least fiveyears of work experience	Meeting one of the following professional qualification requirements, together with at least fiveyears of work experience	Meeting one of the following professional qualification requirements, together with at least fiveyears of work experience	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Number of Other Public Compan ies in Which the Individu al is Concurr ently Serving as a Remune ration Commit tee Member	Remark (Note 3)
		An instructor or higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the Company in a public or private junior college, college or university	A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or other professionals or technical specialist who has passed a national examination and has been awarded a certificate in a profession necessary for the business	Has work experien ce in the areas of commer ce, law, finance, or accounti ng, or otherwis e necessar y for the business of the Compan y	1	2	3	4	5	6	7	8	9	10
Independe nt Director	CHANG, PAO- TSAI			�	�	�	�	�	�	�	�	�	�	�	1	Yes
Independe nt Director	HSIAO, SHENG- HSIEN		�	�	�	�	�	�	�	�	�	�	�	�	1	Yes
Independe nt Director	WU, NAI- HUA			�	�	�	�	�	�	�	�	�	�	�	1	Yes

Note 1: For the title, please fill in Director, Independent Director, or others.

Note 2: Please check “�” the corresponding boxes for each member meets the following conditions during the two years prior to the nomination and during the term of office.

(1) Not an employee of the Company or any of its affiliates.
(2) Not a Director or Supervisor of the Company's affiliates. Not applicable in cases where the person is an Independent Director of the Company's parent company or any subsidiary appointed in accordance with the Regulations Governing the Appointment of Independent Directors and Compliance Matters for Public Companies or other local laws and regulations.
(3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or is ranked in the top 10 in shareholdings.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the

-59-

third degree of kinship, of any of the officer in the preceding 1 subparagraph, or of any of the persons in the preceding three subparagraphs.

(5) Not a Director, Supervisor, or employee of an institutional shareholder that directly holds 5%or more of the total number of issued shares of the Company, or that ranks among the top 5 in shareholdings, or that designates its representative to serve as a Director or Supervisor of the Company under Paragraph 1 or 2, Article 27 of the Company Act (except for an Independent Director appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent).
(6) Not a Director, Supervisor or employee of a company controlled by the same person who has shares over half of the Company's Director seats or voting rights (except for an Independent Director appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent).
(7) Not a Director, Supervisor, or employee of another company or institution who, or whose spouse, is a President, General Manager, or person holding an equivalent position of the Company (except for an Independent Director appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, the Company and its parent or subsidiary or a subsidiary of the same parent).
(8) Not a Director, Supervisor, manager, or shareholder holding 5% or more of the shares of a specified company or institution that has a financial or business relationship with the Company (except for a specific company or institution holding more than 20% but less than 50% of the total issued shares of the Company and concurrently serving as an Independent Director, as appointed in accordance with the Act or the laws and regulations of the local country, at the Company and its parent or subsidiary or a subsidiary of the same parent).
(9) Not a professional individual, sole proprietorship, partnership, owner of a company or institution, partner, Director, Supervisor, manager or spouse thereof that provides auditing service for the Company or any of its affiliates, or provides commercial, legal, financial, or accounting service with cumulative remuneration less than NT$500,000 in the past two years. However, this does not apply in cases where members of the Remuneration Committee, the Review Committee for Public Tender Offer or the Special Committee for Mergers and Acquisitions perform their functions in accordance with the Securities and Exchange Act or the Business Mergers and Acquisitions Act.
(10) Not under any of the categories stated in Article 30 of the Company Act.
Note 3: If the member's title is a Director, please explain if Article 6, Paragraph 5 of "Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter" is complied with.
II. Operational status of the Remuneration Committee
(I) The Company’s Remuneration Committee is composed of 3 members.
(II) The term of this Committee is: from June 15, 2018 to June 18, 2021. In the most recent fiscal year, the Committee held 5 (A) meetings. The qualifications and attendance of members are as follows:

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Title	Name	Attendance in person (B)	Attendance by proxy	Attendance rate (%) (B)/(A) (Note)
Convener	WU, NAI- HUA	5	-	100
Independent Director	HSIAO, SHENG- HSIEN	5	-	100
Independent Director	CHANG, PAO-TSAI	5	-	100
Other matters to be recorded: I. If the Board of Directors refuses to adopt or amends a recommendation of the Remuneration Committee, the date of the Board meeting, session, content of the motion, resolution by the Board of Directors, and the Company’s response to the Remuneration Committee’s opinion shall be specified (e.g., if the remuneration passed by the Board of Directors exceeds that recommended by the Remuneration Committee, the difference and cause thereof shall be specified): None. II. If there are resolutions of the Remuneration Committee to which any member objects or expresses reservations, and for which there is a record or declaration in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinions shall be specified: None. III. Discussions and resolutions of the Remuneration Committee and the Company's response to the members'opinions: Date Session Summary of motions Opinions of Remuneration Committee The Company's response to the Remuneration Committee's opinions January 9, 2020 2020 1st Distribution of 2019 year-end bonus for corporate Directors and managers Approved as proposed Implemented as per the resolution March 27, 2020 2020 2nd session Allocated amount and distribution proportion of 2019 remuneration of Directors Approved as proposed Implemented as per the resolution Amendment to several articles in the Company’s "Remuneration Committee Charter” Approved as proposed Implemented as per the resolution June 19, 2020 2020 3rd session Submission of changes in job title and salary of PENG, SHR BO, Vice General Manager of the Company’s Construction Dept. Approved as proposed Implemented as per the resolution August 11, 2020 2020 4th session Amendment to the Company’s Board Self-assessment or Peer assessment Regulations and renaming to “Board Performance assessment Regulations Approved as proposed Implemented as per the resolution Amendment to several articles in the Company’s "Remuneration Committee Charter” Approved as proposed Implemented as per the resolution Distribution of 2019 remuneration of managers and employees in cash Approved as proposed Implemented as per the resolution Distribution of 2019 remuneration of Directors in cash Approved as proposed Implemented as per the resolution

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August 11, 2020	2020 5th session	Submission of the change in salary of WU, HSIU-LIN , Director of the Company’s Financial/Accounting Dept.	Approved as proposed	Implemented as per the resolution
		Submission of appointment of WU, HSIU-LIN (who is the Director of the Financial/Accounting Dept. of the Company) to concurrently serve as the spokesperson and her dutyallowance	Approved as proposed	Implemented as per the resolution
		Submission of appointment of HUANG, CHIEH (who is the Company’s Director of Legal Affairs Division of President’s Office) to concurrently serve as the Chief Corporate Governance Officer and his dutyallowance	Approved as proposed	Implemented as per the resolution
January 29, 2021	2021 1st	Submission of duty allowance of CHEN, TE-YUAN, Vice President of the Industrial Park Development Dept. of the Company	Approved as proposed	Implemented as per the resolution
		Distribution of 2020 year-end bonus for managers	Approved as proposed	Implemented as per the resolution
March 25, 2021	2021 2nd session	Allocated amount and distribution proportion of 2020 remuneration of Directors	Approved as proposed	Implemented as per the resolution

Note: (1) If a member of Remuneration Committee resigns before the end of the fiscal year,

the resignation date shall be noted in the "Remarks" column. His or her attendance rate (%) will be calculated based on the number of Remuneration Committee meetings held during his/her tenure and his/her actual attendances.
(2) Where an reelection is held for to fill vacancies of committee members before the end of the fiscal year, please list both the new and former committee members, and specify if they are former members, newly elected or reappointed, and the date of the reelection. His or her attendance rate (%) will be calculated based on the number of Remuneration Committee meetings held during his/her tenure and his/her actual attendances.

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Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof	No material difference	In the future, the Company will set up a full-time/part-time department responsible for promoting corporate social responsibility as needed.	No material difference
Status (Note 1)	Summary Description (Note 2)	On November 13, 2014, the Code of Practice on Corporate Social Responsibility of the Company was submitted for review and passed at the Board meeting. The Company has also disclosed it on bulletin boards, intranet folders and the official website.	The Company hasn’t set up any dedicated (concurrent) department to promote the implementation of corporate social responsibility, but we spare no effort to promote social responsibility activities. At present, the responsibility is concurrently fulfilled by each department, which performs social responsibility activities such as social contributions, public welfare of communities and community engagement according to their powers and responsibilities.	In order to maintain environmental management, the Company has hired cleaners for daily cleaning and removal of
	No		�
	Yes	�		�
	Evaluation Item	I. Does the company assess ESG risks associated with its operations based on the principle of materiality, and establish related risk management policies or strategies? (Note 3)	II. Does the company establish exclusively (or concurrently) dedicated first-line managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reporting to the board?	III. Environmental issues (I) Does the Company establish proper environmental management systems based on the characteristics of their industries?

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									No material difference													No material difference								In the future, the Company will	prepare relevant rules and
garbage, waste and recyclables. Regular	disinfection are carried out on an annual	basis. The Opto Electronics Dept. has been	ISO9001 certified in quality. The Company	has prepared relevant operating plans and	designated the HSE personnel and quality	control personnel for each construction	project to ensure that all operations meet	the standards.	In response to the government's resources	recycling policy, the Company actively	sorts, recycles and reuses garbage and	waste. Currently, lead-free products of the	Opto Electronics Dept. have been SGS	certified. In addition, renewable materials	with low load impacts on the environment	have been applied as far as possible to	construction projects of the construction	department and real estate projects of the	architectural department, subject to the	government’s laws and regulations and the	construction/architectural contracts.	The Company continues to pay close	attention to existing and future potential	risks and opportunities that come with	climate changes. During the	implementation of various operating	activities, the Company will always	consider the impact on the climate and	choose appropriate methods.	Although the Company hasn’t prepared	relevant written rules and regulations, we
																						�
										�													�

									(II) Does the Company endeavor to utilize all	resources more efficiently and use renewable	materials which have low impact on the	environment?										(III) Does the Company evaluate the potential risks	and opportunities in climate change with regard	to the present and future of its business, and take	appropriate action to counter climate change	issues?				(IV) Does the Company take inventory of its	greenhouse gas emissions, water consumption,

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regulations as needed.	No material difference No material difference
have actually implemented such rules, including waste sorting and resources recycling. Paper recycling areas have been set up for the utilization of recycled paper. Office light fixtures have all been replaced with energy-saving LED lamps, which also have been used during the implementation of architectural and construction projects. In the future, the Company will continue to aim at saving energy and reducing carbon and greenhouse gases.	The Company has implemented all operations in accordance with the Labor Standards Law and relevant decrees on labor, and prepared the policy on human rights, code of conduct for employees and relevant regulations on sexual harassment prevention, complaints, investigation and handling measures to protect the legitimate rights and interests of employees and workplace safety. The Company has clearly stipulated various employee benefits in the working rules and regulations on employees’ marriage, childbirth, injury, illness, funeral and major disaster subsidies, which all have been published on the intranet. We convene labor-management coordination meetings and organize benefit committee meetings to discuss and adjust employee benefits on a regular basis. 8% of the profit

	� �
and total weight of waste in the last two years, and implement policies on energy efficiency and carbon dioxide reduction, greenhouse gas reduction, water reduction, or waste management?	IV. Social issues (I) Does the Company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights? (II) Has the Company established and offered proper employee benefits (including remuneration, leave and other benefits) and reflected the business performance or results in employee remuneration appropriately?

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			No material difference																				No material difference
has been allocated as employee	remuneration in accordance with the	Articles of Incorporation.	The Company’s office premises have all	been equipped with qualified fire-fighting	and public safety facilities as per the laws	and regulations. In addition to self	inspections conducted from time to time in	which we check whether relevant	equipment is serviceable, we also accept	inspections by competent authorities on a	regular basis to ensure the workplace	safety. The Company also has prepared	appropriate safety and health management	plans for external construction sites and	designated dedicated personnel to handle	relevant operations on the sites, in	accordance with pertinent laws and	regulations, contracts with owners and the	Company’s internal regulations. The	Company also organizes safety and health	education and disaster prevention training	from time to time.	The Company has prepared regulations on	education and training management and	specified the key points for	implementation of external training. The	responsible person of each unit has	developed suitable education and training	plans based on actual needs and the	Company's future operations planning, to	provide effective career development

			�																				�
			(III) Does the Company provide a healthy and safe	working environment and organize training in	health and safety for its employees on a regular	basis?																	(IV) Does the Company provide its employees with	effective career development and training	plans?

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No material difference No material difference	In the future, the Company will prepare a corporate social responsibility report that conforms to internationally accepted standards or guidelines for preparation of reports as appropriate, and submit it to a third- party verification institution for verification.
training for employees. The Company has established customer complaint procedures for all operations, and has set up a consumer service hotline and an email box for the exclusive purpose, so that the after-sales service for all products are provided by dedicated persons. The marketing and labeling of products and services of the Company are performed in accordance with relevant laws, regulations and international norms. The Company carries out inspections for new suppliers in accordance with relevant regulations and, if necessary, visits the suppliers’ premises for field surveys or commissions an external institution to do so. When signing a contract with a supplier, the Company gives consideration to our policies on corporate social responsibility. In case of any violation that has a significant impact on the environment and society, the Company will deal with it as per the contract.	Currently, the Company discloses various operational and financial information in a timely manner in accordance with relevant laws and regulations. However, the Company doesn’t referred to internationally accepted standards or guidelines for the preparation of reports such as corporate social responsibility reports to disclose non-financial
	�
� �
(V) Do the Company's products and services conform to relevant regulations and international rules for customers' health and safety, privacy, sale and labeling, and has it set relevant polices and consumer complaint procedures to protect consumers' rights and interests? (VI) Has the Company established the supplier management policies requesting suppliers to comply with relevant laws and regulations related to environmental protection, occupational safety and health or labor rights and supervised its implementation?	V. Does the company refer to internationally-used standards or guidelines for the preparation of reports such as CSR reports to disclose non- financial information? Are the reports certified or assured by a third-party accreditation body?

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Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	No material difference No material difference
Status (Note)	Description	The Company shall clearly specify ethical corporate management best practice principles which require all the employees, including the Board of Directors and the management to actively implement ethical corporate management, and shall carry out these policies in internal management and external commercial activities. It is stipulated in the Company's Ethical Corporate Management Best Practice Principles that bribery, provision of illegal political contributions, improper charitable donations or sponsorship, provision or acceptance of unreasonable gifts, hospitality or other improper interests, infringes on business secrets, trademark rights, patent rights, copyrights and other intellectual property rights, engagement in unfair competition, and unethical acts where products and service will directly or indirectly damage the interests, health and safety of consumers or other
	No
	Yes	� �
	assessment Item	I. Establishment of ethical corporate management policies and programs (I) Has the Company established the ethical corporate management policies that are approved by the Board of Directors and clearly state the ethical corporate management policies and practices and the commitment of the Board of Directors and senior management to rigorous and thorough implementation of such policies in its rules and external documents? (II) Has the Company establish a risk assessment mechanism against unethical conduct, analyze and assess business activities within its business scope which have a higher risk of being involved in unethical conduct on a regular basis, and establish prevention programs accordingly, which shall at least include those specified in Paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies?

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Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	No material difference	No material difference
Status (Note)	Description	stakeholders during R&D, procurement, manufacturing, provision or sales, are prohibited. The Company also have taken preventive measures and conducted education and publicity to implement the ethical corporate management policy. The Ethical Corporate Management Best Practice Principles of the Company include solutions to prevent the unethical conducts and stipulate the definite procedures, conduct guidelines, punishment for violation as well as appeals system, and may be reviewed and revised at any time for the operational need of the Company. Furthermore, the Company shall also stipulate rules and regulations related to the Ethical Corporate Management Best Practice Principles for implementation on various operating activities, such as the Internal Operating Procedure on Processing Important Information, the Rules and Procedures for Board of Directors Meetings, etc.	In order to make sure ethical corporate management is well implemented, the Company will refuse to deal with business partners recorded
	No
	Yes	�	�
	assessment Item	(III) Has the Company provided any solutions to prevent the unethical conducts, stipulate the definite procedures, conduct guidelines, punishment for violation as well as appeals system and put into practice, and review and revise on a regular basis the aforesaid solutions?	II. Fulfillment of ethical corporate management (I) Does the Company evaluate business partners' ethical records and include ethics-related clauses in business contracts with them?

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Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	In the future, the Company will set up a dedicated unit responsible for promoting ethical corporate management as needed. No material difference No material difference
Status (Note)	Description	with unethical conduct, or shall strictly specify ethics-related clauses in business contracts with them. To strengthen ethical corporate management, the Company now has the President’s Office formulate its ethical corporate management policies and prevention programs and supervise their implementation procedures. According to Article 15 of the Rules and Procedures for Board of Directors Meetings, in the event that a director or the legal person he or she represents is the stakeholder of an agenda item, such director shall disclose important details about his or her interests at the current meeting and refrain from discussion or vote on that matter. He or she shall be recused during discussion or vote on the matter and shall not exercise the right to vote on behalf of any other directors of the Board. Where the spouse, a relative within the second degree of kinship of a director, or any company which has a controlling or subordinate relation with a director has interests in the matter under
	No	�
	Yes	� �
	assessment Item	(II) Has the Company set up a dedicated unit under the Board of Directors to promote ethical corporate management and regularly (at least once every year) report to the Board of Directors the implementation of the ethical corporate management policies and prevention programs against unethical conduct? (III) Has the Company established policies to prevent conflicts of interest, provide appropriate communication channels, and implement them accordingly? (IV) Has the Company established effective accounting systems and internal control systems to implement ethical corporate management and had its internal audit unit, based on the results of

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Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	No material difference	No material difference
Status (Note)	Description	discussion in the meeting of the preceding paragraph, such director shall be deemed to have a personal interest in the matter. The Company has established effective accounting systems and internal control systems in accordance with the Ethical Corporate Management Best Practice Principles, in which the Audit Office shall devise relevant audit plans, conduct necessary audits and report audit results to the Board of Directors. By disclosing the Company's policy of ethical management in internal rules, annual reports and on the Company's websites, or announcing in external activities, the Company shall make its suppliers, customers or other business-related stakeholders fully aware of its principles and rules with respect to ethical corporate management.	The Company encourages internal and external personnel to report dishonest or inappropriate behavior. A reward shall be given to the reporting
	No
	Yes	�	�
	assessment Item	assessment of the risk of involvement in unethical conduct, devise relevant audit plans and audit the compliance with the prevention programs accordingly or entrust a CPA to conduct the audit? (V) Does the Company regularly hold internal and external educational trainings on ethical corporate management?	III. Operation of the whistle-blowing system (I) Does the company establish both a whistle- blowing and reward system and a convenient channel for whistle-blowing? Can the accused be

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Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	No material difference No material difference
Status (Note)	Description	person according to the severity of the reported violations. If internal personnel falsely report violations or make malicious accusations, they shall be punished according to disciplinary regulations. In severe cases, the person can be dismissed. The Company shall establish an independent whistle-blowing mailbox or hotline on its website and intranet and announce it publicly for internal and external personnel of the Company to submit reports. In the Ethical Corporate Management Best Practice Principles, the Company has established the standard operating procedures for investigating reported misconduct, follow-up measures to be taken after the investigation, and related confidentiality mechanisms. When handling the personnel related to whistle- blowing, the Company shall keep the identity of the whistle-blower and reported matters in secret in written statement, and shall allow anonymous whistle-blowing. The Company shall also be committed to protect the whistle-blower against receiving improper treatment due to whistle- blowing.
	No
	Yes	� �
	assessment Item	reached by an appropriate person for follow-up? (II) Has the Company established the standard operating procedures for investigating reported misconduct, follow-up measures to be adopted after the investigation, and related confidentiality mechanisms? (III) Does the Company provide proper protection for the whistle-blower against improper treatment?

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Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	Deviations from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof	No material difference
Status (Note)	Description	The Company has disclosed its related governing rules and regulations on the Company’s website and designate a special person to file an announcement onto MOPS on a regular or irregular basis.
	No
	Yes	�
	assessment Item	IV. Enhanced disclosure of ethical corporate management information Does the Company disclose the ethical corporate management policies and the results of their implementation on the Company’s website and MOPS?

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(X) Implementation status of internal control system

1. Statement of internal control system

APEX SCIENCE & ENGINEERING CORP. Statement on Internal Control System

Date: 2021/3/25

The Company hereby states the results of the self-evaluation of the internal control system for 2020 as follows:

I. The Company's Board of Directors and management are responsible for establishing, implementing, and maintaining an adequate internal control system. Its purpose is to reasonably ensure that operational effectiveness and efficiency (including income, performance, and asset safety) and reporting are reliable, timely, and transparent, as well as to ensure compliance with relevant regulations and laws.
II. An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing its 3 stated objectives above. Moreover, the effectiveness of an internal control system may be subject to changes due to extenuating circumstances beyond control. Nevertheless, the internal control system contains self-monitoring mechanisms, and the Company takes immediate remedial actions in response to any identified deficiencies.
III. The Company evaluates the design and operating effectiveness of the internal control system based on the criteria provided in the “Regulations Governing the Establishment of Internal Control Systems by Public Companies" (hereinafter referred to as the “Regulations”). The criteria adopted by the Regulations for evaluating the internal control system identify five key components of managerial internal control: 1. control environment, 2. risk assessment, 3. control activities, 4. information and communication, and 5. monitoring activities. Each key component includes several items. Please refer to the Regulations for the aforementioned items.
IV. The Company has evaluated the design and operating effectiveness of the internal control system based on the criteria provided in the Regulations mentioned above.
V. Based on the results of the determination in the preceding paragraph, the Company is of the opinion that, as of December 31, 2019, the internal control system (including the supervision and management of subsidiaries), including the design and implementation of the internal control system relating to the effectiveness and efficiency of the operations, reliability, timeliness, and transparency of reporting, and compliance with applicable laws and regulations, is effective and can reasonably assure the achievement of the foregoing goals.
VI. This statement is an integral part of the Company's annual report and prospectus and will be

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made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Act.

VII. This statement was approved by the Board of Directors on March 25, 2021, and none of the seven directors in attendance objected to it and all consented to the content expressed in this statement.

APEX SCIENCE & ENGINEERING CORP.

President: KUO,KUO-HUA

General Manager: KUO,KUO-HUA (Concurrent)

If a CPA has been hired to carry out a special audit of the internal control system, the CPA audit report shall be disclosed: None.
(XI) Sanctions imposed on the Company or its personnel in accordance with the laws, or disciplinary actions taken by the Company against its personnel for any violation of internal control rules within the current fiscal year and as at the date of the Annual Report, as well as details of the sanctions, major deficiencies and subsequent improvements: None.

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(XII) Major Resolutions of Shareholders’ Meeting and Board of Directors During the Most Recent Fiscal Year Up to the Date of Publication of the Annual Report

Shareholders’ Meeting/Board of Directors	Date	Important Motions	Resolution
Shareholders' Meeting
2020 Regular Shareholders’ Meeting	109.06.19	1. 2019 Business Report and Financial Statements (including consolidated financial statements) 2. 2019 Profit Distribution Plan 3. Amendment to partial provisions in "Rules and Procedures of the Shareholders' Meeting"	Based on the voting procedure case by case, all the proposals have been passed with the number of votes in favor of proposals exceeding the statutory requirement.
Board of Directors
2020 First	109.01.09	1. Distribution of 2019 year-end bonus for corporate directors and managers 2. Application for extension of line of credit from financial institutions	Considering a related party has interests involved and shall be avoided from participating in discussion and voting, part of motions were passed upon thorough discussion among other attending directors. Other motions, as consulted by the chairperson for opinions of all the attending directors and independent directors, have been passed upon thorough discussion.
2020 Second	109.03.27	1. The Company’s plan for payment of remuneration to directors in 2019, which has been reviewed and approved by the Remuneration Committee of the Company. 2. Distribution of 2019 compensation of directors and employees of the Company. 3. The Company's 2019 Financial Statements (including consolidated financial statements) and Business Report. 4. 2019 Profit Distribution Plan. 5. Review of the effectiveness of the Company's 2019 Internal Control System and provision of the Statement on Internal Control System. 6. Amendment to partial provisions in the Company’s "Rules and Procedures of the Shareholders' Meeting".	All proposals, as consulted by the chairperson for opinions of all the attending directors and independent directors, have been passed upon thorough discussion.

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		7. Amendment to partial provisions in the Company’s "Rules and Procedures for Board of Directors Meetings", "Audit Committee Charter" and "Remuneration Committee Charter”. 8. Amendment to partial provisions in the Company’s "Code of Practice on Corporate Governance", "Code of Practice on Corporate Social Responsibility" and "Ethical Corporate Management Best Practice Principles". 9. Related matters on convening 2020 Regular Shareholders' Meeting. 10. Matters on accepting shareholders’ proposals at 2020 Regular Shareholders' Meeting. 11. Application for extension of performance guarantee from credit-granting bank consortium on “Machouhou Industrial Park Phase I Development, Renting and Selling and Management entrusted by Chiayi County Government”. 12. Application for extension of financed credit limit from financial institutions 13. Propose to change CPA 14. Repurchase of its own shares by the Company and transfer to employees in accordance with relevant regulations.
2020 Third	109.05.12	1. 2020 Q1 Financial Statement 2. Application for extension of line of credit from financial institutions 3. Amendment to the Company’s 2020 Rules on First Repurchase of Shares and Transfer to Employees.	All proposals, as consulted by the chairperson for opinions of all the attending directors and independent directors, have been passed upon thorough discussion.
2020 Fourth	109.06.19	1. Changes in Job Title and Salary of PENG, SHR BO, Vice General Manager of the Company’s Construction Dept. 2. Report on the implementation result of the Company’s first repurchase of shares upon expiration.	All proposals, as consulted by the chairperson for opinions of all the attending directors and independent directors, have been passed upon thorough discussion.
2020 Fifth	109.08.11	1. Change of CPA for certification 2. 2020 Q2 Financial Statement. 3. Setting of ex-dividend date for cash dividend distribution in 2020 and other related matters. 4. Distribution of 2019 remuneration of managers and employees in cash. 5. Distribution of 2019 remuneration of directors in cash. 6. Amendment to the Company’s "Rules and Procedures of the Shareholders' Meeting". 7. Amendment to the Company’s “Rules for Election of Directors”. 8. Addition of the Company’s Internal Control System. 9. Amendment to the Company’s 2020 Audit Plan.	Considering a related party has interests involved and shall be avoided from participating in discussion and voting, part of motions were passed upon thorough discussion among other attending directors. Other

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		10. Amendment to the Company’s "Rules and Procedures for Board of Directors Meetings” and “Codes of Ethical Conduct”. 11. Amendment to the Company’s "Audit Committee Charter". 12. Amendment to the Company’s "Remuneration Committee Charter”. 13. Amendment to the Company’s Board Self- Evaluation or Peer Evaluation Regulations, and renaming to “Board Performance Evaluation Regulations”. 14. Application for extension of line of credit from financial institutions.	motions, as consulted by the chairperson for opinions of all the attending directors and independent directors, have been passed upon thorough discussion.
2020 Sixth	109.11.12	1. 2020 Q3 Financial Statement. 2. Amendment to the Company’s Internal Control System. 3. Proposal of the Company’s 2021 Audit Plan. 4. The Company’s Independence and Competence Assessment of CPAs. 5. Amendment to the Company’s 2020 Rules on First Repurchase of Shares and Transfer to Employees. 6. Application for extension of financed credit limit from financial institutions. 7. Change in salary of WU, HSIU-LIN, Director of the Company’s Financial/Accounting Dept. and her duty allowance as the Company’s spokesperson. 8. Appointment of HUANG, CHIEH (who is the Company’s Director of Legal Affairs Division of President’s Office), Company’s Chief Corporate Governance Officer and his duty allowance. 9. The Company provides endorsement guarantees for subsidiaries that directly or indirectly hold more than 50% of the Company’s shares, and intends to authorize the President to make a decision within a single certain amount in accordance with the Company’s "Operating Procedures on Fund Loan and Endorsement Guarantee" and then report to the latest audit committee and the Board of Directors for ratification.	All proposals, as consulted by the chairperson for opinions of all the attending directors and independent directors, have been passed upon thorough discussion.
2021 First	110.01.29	1. Duty allowance of CHEN, TE-YUAN as Vice President of the Company’s Industrial Park Development Dept. 2. Distribution of 2020 year-end bonus for managers 3. Amendment to the Company’s 2020 Rules on First Repurchase of Shares and Transfer to Employees. 4. Application for extension of line of credit from financial institutions	Considering a related party has interests involved and shall be avoided from participating in discussion and voting, part of motions were passed upon thorough discussion among other attending directors. Other motions, as consulted by the chairperson for opinions of all the attending directors and independent

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			directors, have been passed upon thorough discussion.
2021 Second	110.03.25	1. The Company’s plan for payment of remuneration to directors in 2020, which has been reviewed and approved by the Remuneration Committee of the Company 2. Discussion on the distribution of 2020 compensation of directors and employees of the Company. 3. The Company's 2020 Financial Statements (including consolidated financial statements) and Business Report. 4. 2020 Profit Distribution Plan. 5. Amendment to partial provisions in the Company’s "Articles of Incorporation". 6. Re-election of all directors of the Company. 7. Related matters on the nomination of director and independent director candidates and approval of nominees by the Board of Directors of the Company. 8. Proposal for the waiver of non-competition clauses for newly elected directors and their representatives. 9. Amendment to partial provisions in the Company’s "Rules and Procedures of the Shareholders' Meeting". 10. Amendment to partial provisions in the Company’s "Rules and Procedures for Board of Directors Meetings", "Ethical Corporate Management Best Practice Principles”, “Standard Operating Procedure on Handling Directors’ Requirements” and "Audit Committee Charter". 11. Related matters on convening 2021 Regular Shareholders' Meeting. 12. Related matters on accepting shareholder proposals for Regular Shareholders' Meeting. 13. Related matters on accepting shareholders nominations in the list of candidates. 14. Amendment to the Company’s Internal Control System. 15. Review of the effectiveness of the Company's 2020 Internal Control System and provision of the Statement on Internal Control System. 16. Application for extension of financed credit limit from financial institutions. 17. Provision of Affidavit Letter from Nanmen Branch, Bank of Taiwan on the application for extension of financed credit limit.	All proposals, as consulted by the chairperson for opinions of all the attending directors and independent directors, have been passed upon thorough discussion.

(XIII)Records or written statements which specified dissent from any director or supervisor to important resolutions passed by the Board of Directors during the most recent fiscal year and up to the date of publication of the Annual Report:

No dissent from any director or independent director to important resolutions passed by the Board of Directors.

(XIV) A summary of resignations and dismissals of the Company's President, General Manager, accounting manager, financial manager, chief internal auditor, Corporate Governance Officer, and R&D manager: None.

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IV. Information about CPA professional fees

Name of CPA firm	Name of CPA	Audit Period	Remark
PricewaterhouseCoopers Taiwan	CHEN, CHING- CHANG, CHANG, SHU-CHIUNG	109.01.01-109.03.31
PricewaterhouseCoopers Taiwan	LIAO, FU-MING, CHEN, CHING- CHANG	109.04.01-109.12.31

Note: The Company has no non-audit fees in 2020.

(I) Disclosure of audit and non-audit fees as well as details of the non-audit services where the non-audit fees paid to the certified public accountants, the independent certified public accounting firm and its affiliates account for more than 25% of the audit fees: None
(II) Disclosure of the amount, percentage and reasons for the decrease in audit fees where there has been a change in CPA firm and the audit fees are lower than the previous fiscal year: None
(III) Disclosure of the amount, percentage and reasons for the decrease in audit fees where the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by more than 10%: None

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Category of fees Range	Category of fees Range	Audit fees	Total
1	Less than NT$2,000,000
2	NT$2,000,000 (inclusive) - NT$4,000,000	�	�
3	NT$4,000,000 (inclusive) - NT$6,000,000
4	NT$6,000,000 (inclusive) - NT$8,000,000
5	NT$8,000,000 (inclusive) - NT$10,000,000
6	More than NT$10,000,000 (inclusive)

V. Information about the replacement of CPA:

(I) Former CPAs:

(I) FormerCPAs:
Replacement date	As passed upon the approval of the Board of Directors on August 11,2020
Replacement reasons and explanations	Due to internal restructuring of PricewaterhouseCoopers Taiwan, the Company replaced the CPAs for financial reports from Chen, Ching-Chang and Chang, Shu-Chung to Liao, Fu-Ming and Chen, Ching-Chang starting from the second quarterof 2020.
Termination by client or CPAs or no acceptance of appointment by CPAs	Party Status			CPA	Client
	Termination byclient			N/A	N/A
	No more acceptance of (continuous) appointment byCPAs			N/A	N/A
Opinions (Other than Unmodified Opinions) in the Past 2 Years and Reasons	None
Deviation from	the issuer Yes		Accounting principles orpractices
			Disclosure of financial statements
			Audit scope or steps
			Others
	None	V
	Description
Other revealed matters (Additional disclosures under Subparagraphs 1-4 to 1-7, Paragraph 6, Article 10 of these Regulations)	None

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(II) Successive CPAs

(II) Successive CPAs
Name ofCPA firm	PricewaterhouseCoopersTaiwan
Name ofCPA	LIAO,FU-MING, CHEN, CHING-CHANG
Date of appointment	As passed upon the approval of the Board of Directors on August 11,2020
Inquiries into accounting treatments or principles for specific transactions and potential opinions be made on financial statements before appointment and the inquired results	None
Written opinions of successive CPAs on the dissenting opinion with theformerCPAs	None

(III) Former CPAs' reply to disclosures under Subparagraph 1 and Item 3, Subparagraph
- 2, Paragraph 5, Article 10 of these Regulations: None
VI. The Company's President, General Manager, or financial/accounting managers holding any positions in the Company's CPA firm or its affiliates during the recent year: None
VII. Any transfer of equity interests and pledge of or change in equity interests by a director, supervisor or manager with a stake of more than 10 percent during most recent fiscal year

and up to the date of publication of the Annual Report:

Title	Name	2020	2020	As of April 20, 2020 in currentyear	As of April 20, 2020 in currentyear
		Number of shares held Increase (+)/Decrea se (-)	Number of shares pledged Increase (+)/Decrea se(-)	Number of shares held Increase (+)/Decrea se (-)	Number of shares pledged Increase (+)/Decreas e(-)
President and General Manager	KUO, KUO-HUA	0	0	0	0
Independent Director	CHANG, PAO- TSAI	0	0	0	0
Independent Director	HSIAO, SHENG- HSIEN	0	0	0	0
Independent Director	WU, NAI-HUA	0	0	0	0
Director	LU,FANG-YUAN	0	0	0	0
Director	CHOU,HIS-YANG	0	0	0	0
Director	Kaida Development Co.,Ltd.	0	0	0	0

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	Representative: WANG, CHAO- KUEI
General Manager, Business Dept.	PENG, SHR BO	0
Vice General Manager, Business Dept.	PENG, WU-YUAN	0
Vice General Manager, Business Dept.	CHEN, TE-YUAN	0
Senior Manager	HAO,YAO	0
Senior Manager	CHIU, WEN- CHUAN	0
Financial and Accounting Manager	WU, HSIU-LIN	0
Chief Corporate Governance Officer	HUANG, CHIEH	0
Major Shareholder	Chang Ji Construction Co., Ltd. Representative: KUO,CHUN-HAO	5,500,000

VIII. Information about relationships among the Company's top ten shareholders.

Name	Current Shareholding	Current Shareholding	Spouse & minor shareholding	Spouse & minor shareholding	Shareholding by nominees	Shareholding by nominees	NAME AND RELATIONSHIP AMONG TOP TEN SHAREHOLDERS,WITH ANY ONE WHOM ARE RELATED PARTIES, SPOUSES OR, RELATIVES WITHIN THE SECOND DEGREE OF KINSHIP.(NOTE 3)	NAME AND RELATIONSHIP AMONG TOP TEN SHAREHOLDERS,WITH ANY ONE WHOM ARE RELATED PARTIES, SPOUSES OR, RELATIVES WITHIN THE SECOND DEGREE OF KINSHIP.(NOTE 3)
	Number of shares	%	Number of shares	%	Number of shares	%	Name	Relationship
Chang Ji Construction Co., Ltd. Representative: KUO, CHUN- HAO	28,124,802	12.30	-	-	-	-	-	-
KUO, KUO-HUA	16,124,177	7.05	647	-	-	-	-	-
CHIH,CHII-GUNG	15,547,189	6.80	-	-	-	-	Outline Investment Co., Ltd.	Representative
LIN, JIAN-ZHI	13,450,000	5.88	-	-	-	-	-	-
SENIOR ENGINEERING INC. Representative:HUANG, YONG- QING	7,618,268	3.33	-	-	-	-	Yingbei Investment Co., Ltd.	Same Representative
Yingbei Investment Co., Ltd. Representative: HUANG, YONG- QING	7,358,336	3.22	-	-	-	-	SENIOR ENGINEERING INC.	Same Representative
LIAO, XUE-PING	7,266,000	3.18	-	-	-	-	-	-

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HUANG, YU-XIU	4,419,536	1.93	-	-	-	-	-	-
XU, JUN-LIN	2,872,277	1.26	-	-	-	-	-	-
Outline Investment Co., Ltd. Representative:CHIH,CHII-GUNG	2,806,130	1.23	-	-	-	-	CHIH,CHII- GUNG	Company Representative

Note 1: The top ten shareholders' names shall be identified separately (in the case of institutional shareholders, the institutional shareholders' names and their representatives' names shall be identified separately).

Note 2: The ratios of shareholding are calculated in terms of own shareholdings, shareholdings of spouse & minor children or shareholdings of nominees.

Note 3: Relationships among the aforementioned shareholders (including juristic and natural persons) shall be disclosed according to the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

IX. The total number of shares held in one same invested enterprise by the Company, the Company’s directors, supervisors and managers, and any enterprises controlled either directly or indirectly by the Company, combined with total ratio of shareholding calculated

Unit: Share, %

Invested enterprise	Investment by the Company	Investment by the Company	Investment by directors, supervisors, managers, and enterprises controlled by the Company directlyor indirectly	Investment by directors, supervisors, managers, and enterprises controlled by the Company directlyor indirectly	Total investment	Total investment
	Number of shares	Percentage of ownership	Number of shares	Percentage of ownership	Number of shares	Percentage of ownership
XINDIN ENGINEERING CONSULTANTS CORP.	8,000,000	100.00%	-	-	8,000,000	100.00%
CHANG JI CONSTRUCTION CO., LTD.	54,320,000	90.53%	1,612,500	2.69%	55,932,500	93.22%
REINFORECE ENERGY CO.,LTD	2,810,000	100.00%	-	-	2,810,000	100.00%

Note: Investment using the equity method by the Company.

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Chapter IV. Capital Overview

I. Capital and shares

(I) Source of capital

Category of shares issued during most recent fiscal year and up to the date of publication of the Annual Report:

		Unit: Share,NT$1,000	Unit: Share,NT$1,000	Unit: Share,NT$1,000	Unit: Share,NT$1,000	Unit: Share,NT$1,000	Unit: Share,NT$1,000	Unit: Share,NT$1,000	Unit: Share,NT$1,000	Unit: Share,NT$1,000	Unit: Share,NT$1,000	Unit: Share,NT$1,000
Year/ Month	Issuin g Price	Authorized capital			Paid-incapital			Remark
		Number of shares		Amount	Number of shares		Amount	Source of capital		Written off with properties other than cash		Oth ers
93.2	10	250,000,0 00		2,500,000	228,713,554		2,287,135	Cancellation of 4,291,000 shares from treasury stock (Approval date: January 29, 2019, when the approval letter of change registration was received from the Ministry of Economic Affairs)		─
			April 20,2021
Category of shares			Authorized capital								Remark
			Issued shares			Unissued shares			Total
Registered common shares			228,713,554 listed shares			21,286,446 shares			250,000,000 shares		-

Note: Please specify whether the stock refers to TWSE or GTSM stock (the stock forbidden from being traded in TWSE or GTSM, if any, shall be identified).

Information about shelf registration: None

(II) Structure of shareholders April 18, 2021

Structure of shareholders Quantity	Government agencies	Financial institutions	Other legal persons	Natural persons	Foreign institutions and foreigners	Total
Number of shareholders	-	-	129	26,221	45	26,395
Number of shares held	-	-	51,299,277	169,515,404	7,898,873	228,713,554
Percentage(%)	-	-	22.43%	74.12%	3.45%	100%

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(III) List of major shareholders April 18, 2021

Serial Number	Account Numbers	Name Of Major Shareholder	Number Of Shares Held	Shareholding Ratio %
1	0018322	CHANG JI CONSTRUCTION CO., LTD.	28,124,802	12.30%
2	0026576	KUO, KUO-HUA	16,124,177	7.05%
3	0000001	CHIH,CHII-GUNG	15,547,189	6.80%
4	0074731	LIN, JIAN-ZHI	13,450,000	5.88%
5	0018321	SENIOR ENGINEERING INC.	7,618,268	3.33%
6	0030406	Yingbei Investment Co., Ltd.	7,358,336	3.22%
7	0057184	LIAO, XUE-PING	7,266,000	3.18%
8	0010477	HUANG, YU-XIU	4,419,536	1.93%
9	0043168	XU, JUN-LIN	2,872,277	1.26%
10	0018134	Outline Investment Co., Ltd.	2,806,130	1.23%

(IV) Distribution of shares

1. Common shares: April 18, 2021

Holding Grading	Number Of Shareholders	Number Of Shares Held	Shareholding Ratio %
1-999	17,282	1,059,389	0.46%
1,000-5,000	6,005	13,354,838	5.71%
5,001-10,000	1,384	11,071,630	4.84%
10,001-15,000	520	6,584,733	2.88%
15,001-20,000	333	6,249,644	2.73%
20,001-30,000	287	7,362,710	3.22%
30,001-40,000	131	4,746,351	2.08%
40,001-50,000	95	4,455,903	1.95%
50,001-100,000	196	14,262,713	6.24%
100,001-200,000	74	10,751,897	4.70%
200,001-400,000	44	11,896,334	5.20%
400,001-600,000	14	7,256,896	3.17%
600,001-800,000	8	5,436,495	2.38%
800,001-1,000,000	3	2,585,791	1.13%
1,000,001��	19	121,938,230	53.31%
Total	26,395	228,713,554	100.00%

2. Preferred shares: None

(V) Market price, net worth, earnings and dividends per share and related information

for the past two fiscal years

Item	Year	2019	2020	As of March 31, 2021 in currentyear
Market price per share	Highest marketprice	13.80	15.20	14.20
	Lowest marketprice	7.85	7.89	11.75
	Average marketprice	9.85	11.65	12.86
Net worth per share	Before distribution	14.28	15.35	15.54
	After distribution	14.28	(Note 9)	(Note 9)

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Earnings per share	Number of Weighted average shares (with treasury stock deducted)	Number of Weighted average shares (with treasury stock deducted)	200,588,752	198,925,348	198,925,348
	Earnings per share (Note 3)	Before adjustment	0.87
				1.59	0.20

		After adjustment	0.87	(Note 9)	(Note 9)
Dividends per share	Cash dividends		0.5	(Note 9)	-
	Stock dividends	Stock dividends appropriated from earnings	-	(Note 9)	-
		Stock dividends appropriated from capital surplus	-	-	-
	Accrued unpaid dividends (Note 4)		-	-	-
Return on investment analysis	Price/earnings ratio(Note 5)		11.32	7.33	-
	Price-dividend ratio(Note 6)		19.70	(Note 9)	-
	Cash dividend yield (Note 7)		0.05	(Note 9)	-

In the case of retained shares distribution or capital surplus shares distribution, please also disclose the information about the market price and cash dividend adjusted retroactively based on the quantity of shares as distributed. Note 1: Please identify the highest market prices and the lowest market prices of the common shares in various years, and calculate the average market price for each year based on the trading value and turnover for each year. Note 2: Please fill in the number of shares already issued by the end of the year and identify the status of distribution according to the resolution made by the shareholders' meeting held in the following year. Note 3: If it is necessary to make adjustment retroactively due to stock dividends, please identify the earnings per share before and after adjustment. Note 4: If the terms and conditions under which the equity securities are issued provide that the stock dividends retained in the year may be accumulated until the year in which there are allocable earnings available, please separately disclose retained stock dividends accumulated by the end of year. Note 5: Price-earnings ratio = Average closing price per share in current year/Earnings per share Note 6: Price-dividend ratio = Average closing price per share in current year/Cash dividend per share Note 7: Cash dividend yield =Cash dividend Per Share/Average closing price per share in current year Note 8: Please identify the net worth per share and the earnings per share available in the latest quarterly financial information audited (reviewed) by the CPA up to the date of publication of the Annual Report, and the information in the current year available up to the date of publication of the Annual Report in the other sections. Note 9: To be determined upon resolution by the Shareholders' Meeting.

(VI) Dividend policy and implementation status of the Company

1. Dividend policy

In case there are profits after tax in the final settlement of the current year, the Company shall first offset the accumulated loss (including adjustment on nondistributed earnings) and retain 10% as legal surplus reserve in accordance with the law; however, when the legal surplus reserve reaches the total amount of paid-in capital of the Company, it is not subject to this limitation. The Company shall also appropriate or reverse special reserves in accordance with laws or regulations stipulated by the competent authorities. With regard to the earnings and undistributed earnings of same period (including adjustment on undistributed earnings), the Board of Directors shall submit an earnings distribution proposal to distribute dividends to shareholders, subject to the approval at the shareholders' meeting.

The industrial life cycle of the company is at the growth period. In order to coordinate the Company's long-term financial planning for sustainable management

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and stable growth, the dividend policy adopts the residual dividend policy. Besides, according to the Company’s capital budget plan, stock dividends shall be first distributed to retain the required funds. If there is any surplus, then cash dividends can be distributed. If cash dividends can be distributed during the year, the cash dividends should be adjusted to no less than 5% of the total dividends.

Distribution of dividends proposed at the current shareholders' meeting: The Company’s 2020 profit distribution plan is proposed as follows:

APEX SCIENCE & ENGINEERING CORP.

Profit Distribution Table

2020

2020
	CurrencyUnit: NT$
Earnings available for distribution at beginning of year	236,303,180

Plus: Net income after tax of 2020	315,653,016
Less: Retained earnings adjusted for changes in ownershipequityof subsidiaries	(4,958,702)
Plus: Disposal of investments in equity instruments at fair value through other comprehensive profit or loss and accumulated profit or loss directlytransferred to retained earnings	1,860,206
Plus: Special reserve	2,652,056
Less: Legal reserve(10%)	(31,520,658)
Earnings available for distribution	519,989,098
Distribution items:
Cash dividends of shareholders - NT$0.8 distributed per share	180,950,843
Undistributed earnings at end ofperiod	339,038,255

(VII) Effect on the operating performance and earnings per share of distribution of stock dividends proposed or adopted in the most recent shareholders' meeting: N/A. Note: As of the date of publication of the Annual Report, the Company has not filed a financial forecast.

(VIII) Remuneration to employees and directors

If the Company makes a profit in the year, it shall set aside 8% of the balance as remuneration to the employees and no greater than 2% of the balance as remuneration to directors. However, when there are accumulated losses (including adjustment on undistributed earnings), the Company shall reserve appropriate amounts for offsetting before making the remuneration. The above remuneration to the employees may be allotted in cash or stock, and the eligible personnel shall include employees at subsidiaries that meet

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related requirements. The above remuneration to the directors shall be in cash. Clauses in preceding two paragraphs shall be determined upon the resolution by the Board of Directors and reported to the Shareholders' Meeting.

The basis of the estimate of compensation to employees and directors, the basis of calculating the number of shares where stock bonuses are paid, as well as accounting treatment in case of deviation between the amount of actual payment and the estimate:
Any deviation between the amount of actual payment and the estimate for the remuneration to employees and directors will be listed as profit or loss in 2021.
Information about distribution proposal of 2020 remuneration adopted by the Board of Directors:
(1) Distribution of remuneration to employees and directors:
a. Remuneration to employees in cash: NT$26,706,704.
b. Remuneration to employees in stock: None.
c. Remuneration to directors: NT$6,676,676.

If there is any discrepancy between that amount and the estimate for the fiscal year that these amounts are recognized, the discrepancy, its cause, and the status of treatment shall be disclosed:

The amounts proposed to be distributed as remunerations to employees and directors in 2020 were NT$26,706,704 and NT$6,676,676, respectively, which had no discrepancy from those amounts recognized in 2020.

(2) The amount of any employee compensation distributed in stock, and the percentage of that amount in the total sum of the after-tax net income stated in the parent company only financial reports or individual financial reports for the current period and total employee compensation:

There is no stock distributed to employees during this period, so that this shall not apply.

Earnings of previous year allocated as bonus to employees and as remuneration to directors and supervisors:
- The actual amounts allocated as remuneration to employees, directors and supervisors in 2019 were respectively NT$21,148,534 and NT$5,287,134, which were equal to that originally proposed for distribution by the Board of Directors.
(IX) Repurchase of the Company’s shares during the most recent fiscal year and up to the date of publication of the Annual Report:

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April 20, 2021

	April 20,2021
Number of repurchases	First time in 2020
Purpose of repurchase	Transfer of shares to employees
Categoryof repurchased shares	Common stock
Upper limit of total amount for repurchase of shares	NT$264,126,205
Preset time for repurchase	From March 30,2020 to May29,2020
Preset number of shares for repurchase	Repurchase of 6,000,000 share, accounting for 2.62% of issued shares of the Company
Price interval for repurchase	NT$7 to 12
Category and number of repurchased shares	Common stock, 2,525,000 shares
Amount of repurchased shares	NT$26,129,920
Ratio of number of repurchased shares to preset number of shares to be repurchased(%)	42.08%

II. Issuance of corporate bonds:

		Unit: NT$1,000
Category of corporate bonds (Note 2)		First offering of secured ordinary bonds in 2016(Note 5)
Issuance date		105.11.11
Par Value		1,000
Location of issuance and transaction (Note 3)		Taipei Exchange (TPEx)
Issuing price		Atpar value
Total amount		500,000
Interest rate		1.15%
Period		5years Maturitydate: November 11,2021
Guarantor		Taiwan Cooperative Bank,Ltd.
Trustee		Jih Sun International Bank,Ltd.
Underwriter		Taiwan Cooperative Securities Co. Ltd.
Legal counsel		None
CPA		None
Term of repayment		One-time repayment of capital upon maturity
Outstanding principal		500,000
Redemption or earlyrepayment clauses		None
Restrictions(Note 4)		None
Name of credit rating agency, rating date and ratingof corporate bonds		N/A
With other rights	Converted (exchanged or subscribed)	N/A

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	common stocks, overseas depository receipts or the price of other negotiable securities as of the date of the publication of the Annual Report.
	Regulations on issuance and conversion (exchange or subscription)	None
Potential dilutive effects on other shares and impact on the existing rights of shareholders due to regulations on issuance and conversion/exchange/subscription or terms of issuance		None
Name of trustee for exchange subject matter		None

Note 1: The issuance of corporate bonds includes public offering and private placement of corporate bonds that are still in the process. The public offering of corporate bonds in the process refers to those going into effect upon the approval of the Meeting; and the private placement of corporate bonds in the process refers to those passed upon the approval by the Board of Directors.
Note 2: The number of sections shall be adjusted subject to the actual number of processes completed.

Note 3: To be filled if corporate bonds are issued overseas.

Note 4: For example, restrictions on the distribution of cash dividends, foreign investments or requirement for maintaining the asset ratio at a certain level.
Note 5: The private placement, if any, shall be identified prominently.
Note 6: The information regarding corporate bond conversion, the information regarding corporate bond swap, the status of shelf registration for corporate bonds and the information regarding equity warrant bonds should be disclosed accordingly by category in the table.
III. Preferred shares: None.
IV. Issuance of overseas depository receipts: None.
V. Employee stock options and new restricted shares for employees: None.
VI. Mergers and acquisitions, or as assignee of new shares issued by another company: None.

VII. Implementation of capital utilization plan

(I) Description
Up to the quarter prior to the date of publication of the Annual Report, each public offering or private placement plan of negotiable securities that has not been completed yet, or such plans that have been completed in the most recent 3 years but have not yet yielded the planned benefits: N/A.
(II) Implementation status

Up to the quarter prior to the date of publication of the Annual Report, each public

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offering or private placement plan of negotiable securities that has not been completed yet, or such plans that have been completed in the most recent 3 years but have not yet yielded the planned benefits: N/A.

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Chapter V. Operational Highlights

I. Business activities

(I) Scope of business
Major business content:
- 1 CA02050 Manufacturing of valves
- 2 CA02060 Manufacturing of metal containers
- 3 CB01010 Manufacturing of machinery
- 4 CB01030 Manufacturing of pollution prevention equipment
- 5 CB01990 Manufacturing of other kinds of machinery
- 6 CC01010 Manufacturing of power generation, transmission, and distribution equipment
- 7 CC01030 Manufacturing of electric appliance and audio and video equipment
- 8 CC01040 Manufacturing of lighting equipment
- 9 CC01050 Manufacturing of data storage and processing equipment
- 10 CC01080 Manufacturing of electronic components
- 11 CC01101 Manufacturing of restrained telecom radio frequency equipments
- 12 CC01110 Manufacturing of computers and peripheral equipment
- 13 CC01990 Manufacturing of other electrical engineering and electronic machinery equipment
- 14 CD01020 Manufacturing of rail vehicle and parts
- 15 CE01010 Manufacturing of general instruments
- 16 CQ01010 Manufacturing of molds and dies
- 17 CZ99990 Manufacturing of other industrial products not elsewhere classified
- 18 E103101 Environmental protection construction
- 19 E501011 Tap water pipelines contractors
- 20 E502010 Fuel pipe installation
- 21 E599010 Pipe lines construction
- 22 E601010 Electric appliance construction
- 23 E601020 Electric appliance installation
- 24 E602011 Refrigeration and air conditioning engineering
- 25 E603010 Cable installation engineering
- 26 E603040 Fire fighting equipments construction
- 27 E603050 Automatic control equipment engineering
- 28 E603080 Traffic signs installation engineering
- 29 E603090 Lighting equipments construction
- 30 E603100 Electric welding engineering
- 31 E603130 Gas water heater installation
- 32 E604010 Machinery installation
- 33 E605010 Computer equipment installation

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34	E701010	Telecommunications engineering
35	E801010	Indoor decoration
36	E801020	Doors and windows construction
37	E801030	Indoor light-gauge steel frame engineering
38	E801040	Glass installation engineering
39	E801070	Kitchen and bath facilities construction
40	E901010	Painting engineering
41	E903010	Anti-corrosion and anti-rust engineering
42	EZ03010	Furnace installation
43	EZ05010	Apparatus installation construction
44	EZ15010	Heat/cold insulation construction
45	EZ99990	Other engineering
46	F105050	Wholesale of furniture, bedding, kitchen utensils and
		fixtures
47	F106010	Wholesale of hardware
48	F106030	Wholesale of molds and dies
49	F106040	Wholesale of water containers
50	F106050	Wholesale of pottery, porcelain and glassware
51	F111090	Wholesale of building materials
52	F113020	Electric appliance wholesale industry
53	F113030	Wholesale of precision instruments
54	F113070	Wholesale of telecom instruments
55	F115020	Wholesale of ores
56	F118010	Wholesale of computer software
57	F119010	Wholesale of electronic materials
58	F120010	Wholesale of refractory materials
59	F205040	Retail sale of furniture, bedding, kitchen utensils and
		fixtures
60	F206010	Retail sale of hardware
61	F206030	Retail sale of molds and dies
62	F206040	Retail sale of water containers
63	F211010	Retail sale of building materials
64	F213010	Retail sale of electric appliance
65	F213040	Retail sale of precision instruments
66	F213060	Retail sale of telecom instruments
67	F215020	Retail sale of ores
68	F218010	Retail sale of computer software
69	F219010	Retail sale of electronic materials
70	F220010	Retail sale of refractory materials
71	F399990	Retail sale of others
72	F401010	International trade

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73 F401021[Restrained telecom radio frequency equipments and ] materials import
74 H701010 Development, leasing and sales of residence and buildings
75 H701040 Specialized field construction and development
76 H701060[Construction and development of new towns and new ] communities
77 I103060 Management consulting
78 I301010 Information software services
79 I501010 Product design
80 I503010 Landscape and interior design 81 F301010 Department stores
82 F301020 Supermarkets
83 F399010 Convenience stores
84 F501050 Public houses and beer halls 85 F501060 Restaurants
86 G202010 Parking garage business
87 J701010 Electronic game arcades
88 J701020 Amusement parks
89 J801030 Athletics and recreational sports stadium
90 JA01990 Other automobile services
91 JB01010 Conference and exhibition services
92 JZ99080 Beauty and hairdressing services
93 ZZ99999 All kinds of business not prohibited or restricted by law, except for those subject to special approval.
Percentages of main products in business operation

Unit: NT$1,000

		Unit: NT$1,000
Category of product	Sales performance in 2020	Percentage in total annual sales(%)
Construction revenue	2,705,394	69.27%
Machinery, instrumentation and electronics	989,344	25.33%
Electronic related products	131,713	3.37%
Service revenue	79,256	2.03%
Total	3,905,707	100.00%

Main products: See the business items for details.
New products planned to be developed or introduced TFT A/D BOARD and capacitive touch screen
(II) Industry overview

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Current status and development
(1). Engineering: The engineering industry is one of the basic industries, which includes integrated applications . electromechanical, fire-fighting and airconditioning systems, etc. Taiwan has long been undergoing vigorous development, and the engineering industry has also been increasingly growing accordingly, where the government and public organizations establish large-scale public projects or plans for the construction of new factories and extension of existing factories every year to fulfill people's livelihood needs and improve the economy. Therefore, a large number of tenders are released every year. In addition, in order to improve the manufacturing process of high-tech factories, it is an inevitable trend to build up new factories and extend existing under the continuous innovation of technology to reduce costs. The Company actively integrates its construction strengths in electromechanical engineering and its Grade-A construction subsidiary Chang Ji to reduce interfaces, reduce costs and improve efficiency for large turnkey projects.
(2). Construction: In recent years, due to rising inflation, soaring price of raw materials, low interest rates, abundant funds in the market and high land costs, the housing price have continued to rise. The government has implemented waves of housing policies over the past few years to cool down the housing market. As the real estate industry has sustained recovery over the past year, people are now increasingly enthusiastic to see and buy houses. The Company's previous projects were mainly located in Taipei City. Considering the increasing difficulty for land acquisition, it now turns to New Taipei City, and even Taoyuan, Hsinchu County, Taichung and Kaohsiung. In order to expand land sources, private sponsored development projects are also involved besides traditional land purchase and joint construction.
(3). Optoelectronics: LCM is mainly applied in the liquid crystal display industry. By liquid crystal driving method, the liquid crystal displays can be classified into passive thin film transistor displays (such as TN-LCD and STN-LCD) and active thin film transistor displays (such as TFT-LCD). In the past, the liquid crystal display market was dominated by TN/STN LCD due to its low energy consumption and low price. However, with the continuous innovation of TFT technology, the TN/STN dominated market is now gradually replaced by TFT. LCM applications, including consumer digital electronic products,

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various industrial dashboards, mobile phones, digital cameras, solar power generation equipment, portable navigation devices, global positioning systems, car displays (car audio-visual entertainment, car dashboard, car navigation, front seat head-up display, digital TV, etc.) and medical measuring instruments, etc., are undergoing vigorous growth and driving the sales of related LCM products.

Supply chain relationships among industry upstream, midstream and downstream
(1). Engineering

Engineering services mainly refer to customer-specific integrated services through cross-field integration. For system integration companies, the upstream includes material and equipment providers (manufacturers); the downstream includes manufacturers in various exclusive fields.

==> picture [351 x 244] intentionally omitted <==

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

Upstream Midstream Downstream
Manufacturers and �
suppliers of various
materials (wires,
cables, steel, meta ls,
lighting fixtur es, e tc.)
Labor service
System integration subcontractors (pipelines,
companies ele ctri city, san itary water
su pply and dra inage, air
conditioning, etc.)
Manufacturers and
suppliers of various �
equipment and
facilities (pumps,
water pumping units,
pressure vessel
equipment, power
generator sets,
controller systems, air
conditioning systems,
fire-fighting systems,
etc.)
----- End of picture text -----

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(2). Construction

In the upstream of the real estate market, the raw materials are mainly land and building materials. The land sources not only include the private land for sale, joint construction and commissioning, but also cover those for the urban renewal and development of old buildings. The building materials include sand, steel, sanitary ware and stones and all the other materials needed for building construction or decoration. The downstream includes sales agencies and intermediaries, which undertake sales-related matters of real estate projects.

==> picture [333 x 162] intentionally omitted <==

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

Upstream Midstream Downstream
Land development
================
1.Selling of private land
2.Joint construction on Sales agencies
pri vate land Real estate developers
3 . U rban renewal of old Housing intermediaries
buildings
Building materials
================
Construction firms
1. Sand
2. Steel
3. Sanitary ware
4. Stones
----- End of picture text -----

(3). Optoelectronics

Based on the Company’s position in the optoelectronics industry, there is slight difference in the scope of business. Overall, the upstream includes glass substrates, passive components, backlight modules, polarizing films, etc.; the downstream includes electronic component agents and electronic manufacturing services (EMS), etc. Product applications include instruments, consumer products, information products, film and TV products, etc.

==> picture [353 x 187] intentionally omitted <==

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

Upstream Midstream Downstream
Materialsls Touch panel modules Applications
================ ================ ================
1. Glass substrates 1. Module manufacturers 1. Instruments
2. LCD 2. TN/STN LCD Industrial instruments
3. Color filter
3. TFT LCD Instrument for sports
4. Polarizing film 4. Integrated systems equipment, etc.s
5. ITO glass 2. Consumer products
6. Backlight modules PDA
7. Driver IC Digital photo frame, etc.
8. Passive components 3. Information products
Multi-Functional Printer,
etc.
Translation machine, etc.
4. Film and TV products
Computer
Project, etc.
----- End of picture text -----

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  3. Product development trends and competition landscape

     - (1) Engineering: The electromechanical integration service is customized and local. The Company has been operating in this field for a long time and has won a good reputation. Besides, it actively integrates its powerful expertise of electromechanical engineering and its construction strengths in electromechanical engineering and its Grade-A construction subsidiary Chang Ji to reduce interfaces, reduce costs and improve efficiency for large turnkey projects.

     - (2) Construction: House buyers are increasingly focusing on the architectural planning and the living quality. Methods to make full use of limited space to make a sales plan that meets customer needs is an important part of industrial development. Each project of the Company is launched after careful planning. The real estate industry has strong regional limitations, so that its industrial competition is mostly among individual projects in one same region, which is different from the obviously competitive general industry.

     - (3) Optoelectronics: Taiwan has established a complete industrial chain system and is quite advantageous in the field of modules. In the future, it will take an even more important position with the enhancement in R&D design and technologies.

III. Overview of technologies and R&D work
R&D expenditures in the most recent fiscal year

1. R&D expenditures in the most recent fiscal year	1. R&D expenditures in the most recent fiscal year	1. R&D expenditures in the most recent fiscal year
Unit: NT$1,000 Year 2020 (consolidated) As of March 31, 2021 in current year (consolidated) Amount 2,622 453
Year	2020 (consolidated)	As of March 31, 2021 in current year (consolidated)
Amount	2,622	453

R&D achievements and future R&D plans
Engineering: The Company has its R&D plans focusing on the improvement and optimization of the special technologies required for new and expansion projects of high-tech plants and utilities construction projects, so as to not only maintain our advantages in the industry through continuous improvement of technologies but also meet customers’ needs for plant construction by continuously introducing technologies in terms of electromechanical, fire-fighting and other engineering fields.

Construction: We have hired well-known domestic architects and design teams for planning and design to facilitate project initiation and make our real estate projects regional benchmarks. In addition, we also have applied new architectural

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technologies and design to build higher-quality residences.

Optoelectronics: We continue to develop various types of modules to provide customers with more choices, such as handheld devices, home appliances and office equipment, including: IP phones, cash registers, parking toll systems, car navigation systems (GPS), instrument display panels, solar power equipment panels, audio panels, etc. In addition, we continue to cooperate with LCD glass factories to develop a series of TFT display color modules, which ranges from 1.44 inches to

27.6 inches to meet different customer needs.
1. R&D achievements:
2. (1) Various kinds of electronic consumer products, such as panels and modules.
3. (2) Various kinds of industrial instrument panels and modules.
4. Future R&D plans:
5. (1) Enhancement of TFT backlight brightness
6. (2) TFT A/D Board
7. (3) Mono STN plus RS232 control interface modules
(IV) Long- and short-term business development plans
Engineering

Short-term: The domestic technology industry has gradually stabilized and has continued to expand in factories.. In addition, we will continue to develop in specific fields such as petrochemical industry and utilities. In these two major fields, we will further continue to accumulate rich experience for turnkey projects to obtain competitive advantages, actively cultivate talents and seek for more business opportunities.

Long-term: Take a service-oriented attitude, and continue to develop various public and private projects. In addition, we will improve the overall business landscape in electromechanical and construction fields and enhance overall planning and design capabilities to maintain good quality and effective control of costs and project completion progress.

2. Construction

Short-term: The business development focuses on investment and construction of medium- and small-sized projects in Taipei Metro Area where has a market in stable demand.

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Long-term: In order to utilize existing resources within the Company, expand business footprints and effectively control project quality and construction progress, the Company will still continue to improve plans on human resources training, cultivate professionals and attract excellent talents to join in to improve the Company’s competitiveness; further provide perfect after-sales services to customers to build up good brand image and reputation; and thus increase customers’ trust in us to improve the sales performance in the future.

3. Optoelectronics

Short-term: A. Besides maintaining the sales performance in the monochrome LCD market, we also actively develop the markets of medium- and small-sized color LCDs and backlight modules.
Long-term: A. Open up various kinds of marketing models, actively expand the business scope and establish international marketing channels; participate in renowned international exhibitions and trade shows to raise the Company’s awareness within the industry.
B. Take the advantage of existing R&D and technical talents, help customers with their professional demands in technologies, improve service quality, and create added value.

II. Market analysis and overview of production and marketing

(I) Market analysis
Engineering
(1) Main service areas

Service areas of main products: The electromechanical engineering services cover the domestic market.

(2) Future supply and demand status and growth in the market
�In order to boom the domestic economy, the government has established policies on the construction of public infrastructure and promoted private investment. We anticipate more business opportunities in the entire engineering industry.
�With the opening-up of domestic public projects and rationalization of

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contracting and procurement systems, medium-sized engineering companies with the expertise in integration will take the lead in the competition. From the view of long-term development, domestic engineering contractors have been increasingly expanding their business scope in terms of capital, engineering staff and business volume. This change will be a better opportunity for the Company to expand its business market.

(3) Advantageous and disadvantageous factors in development prospects and countermeasures
A. Advantageous factors
- 1) The Company’s capabilities to introduce applied technologies, integrate technologies and create technological innovations, through specialized project management, contribute to professional fields such as mechanical engineering, instrumentation, electronics and environmental protection engineering, which not only meet the increasingly diversified needs in the market, but also localize products and create high added value.
- 2) We specialize in machinery, instrumentation, electronics and environmental protection engineering, and have strong capabilities for project contracting. The Company has continuously introduced technologies from advanced countries for 45 years and has cooperated with manufacturers from Germany, the UK, the United States, Canada, Australia, the Netherlands, Sweden and Japan, etc. We specialize in projects of machinery, instrumentation, electronics and environmental protection engineering, and has won unanimous recognition by all walks of life.
- 3) Over the past 45 years, we have accumulated rich experience in various kinds of projects.
  - Over the past 45 years since the establishment, the Company has undertaken a number of projects and accumulated rich experience, which enables us to effectively reduce costs and create a competitive advantage.
- 4) Through efficient and active project organization and management, we obtain vertical leadership and horizontal coordination systems to demonstrate the flexibility and resilience of the Company and create high productivity.
- 5) We provide owners with turnkey capabilities to reduce their burden. The Company is a comprehensive engineering service company. Its scope of services covers the engineering consulting and general engineering business.

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Specific service items include evaluation, planning, design, procurement, construction, supervision, test run, maintenance and warranty, etc., which are provided as single window services in a turnkey package to reduce the risks of unclear responsibilities and difficulties in supervision that may arise from itemized commissioning by the owner.

6) We have established good and deep cooperative relationships with internationally renowned engineering companies and obtained strong technical support.
- Over the past 45 years since the establishment, the company has established good relationships with major foreign engineering companies in Europe, the United States, Japan and Germany, and has also jointly contracted many domestically important projects and enjoys a high reputation. Therefore, many famous foreign manufacturers are willing to cooperate with us.
7) By integrating the existing background of electromechanical expertise with the civil engineering strengths from the Grade-A construction subsidiary Chang Ji, we enable to enhance competitiveness.
B. Disadvantageous factors and countermeasures
1) Limited domestic land resources, difficulty in land acquisition and high costs low down the private investment willingness and hinder the promotion and implementation of government public projects. Given all this, the Company is committed to not only improving diversification and high-tech technology, but also combining the strengths in terms of civil engineering to expand the scope of services.
2) Large foreign manufacturers from Europe, the United States, Japan and South Korea take the optimistic view of the domestic major engineering market and are aggressively entering the domestic market with their advantages in mechanical equipment and mature construction technology, which seriously threatens domestic engineering companies. The Company will develop close technical cooperation relationships with foreign manufacturers to win business through joint contracting, so as to increase more business opportunities.
3) Downstream contractors often bid at low prices, which causes the reasonable profit of a project to be eroded, and there are risks caused by uncertain milestone schedules of government public projects. The Company controls these risks under a specialized project management system.

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2. Construction

(1) Sales areas of main products or business

Sales areas of main products: The sales of construction business were conducted entirely in the domestic market in 2020.

(2) Future supply and demand status and growth in the market Considering the increasing difficulty in land acquisition, the land development in the future can be diversified in ways different from former housing construction industry that used to buy off the land or jointly construct buildings with the landlord, such as setting of surface rights, land trust, joint development, and urban renewal, etc. Urban renewal and private sponsored development projects have the greatest room for development particularly. Although the previous Wenlin Yuan renewal project obviously hinder the development process in the short term, the urban renewal of old and dangerous buildings is still the general development trend in Taipei Metro Area. In addition, as house buyers pay more and more attention to the living quality, the location of an individual building, the leisure planning and the space utilization have become important considerations for buyers when choosing a house. The Company's land development plan focuses on finding areas with good development potential, convenient transportation, and strong value-added potential. We believe that, as long as we position our products in the market well and improve the quality of buildings, we will surely create excellent sales results.
(3) Advantageous and disadvantageous factors in development prospects and countermeasures
A. Advantageous factors
- 1) Public infrastructure projects under construction, such as High Speed Rail and MRT, cause emerging areas to be developed along the lines, and the housing price also increases accordingly.
- 2) Considering the economy is under stable recovery, coupled with gradually intensified cooperation between Taiwan and Mainland China, not only will the Taiwanese businessmen return to buy properties, but companies from the mainland will also purchase real estate for the need of investment or base establishment.
- 3) One of basic needs of the people is to buy a house.
B. Disadvantageous factors and countermeasures
- 1) As compared with the past, the increasing housing price, followed by the

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government's policies on luxury and mansion taxation to suppress housing prices and the inflation caused by increase of both oil and electricity prices, indeed causes house buyers to hesitate. The housing price has also stagnated. If the interest rates increase significantly in the future, the housing prices may continue to fall slightly.

3) We just entered the industry and are facing intense compeitions with many peers, and we have not established our brand awareness yet. The solution is to launch unique projects of high quality and cooperate with well-known companies to promote projects, thus establishing brand awareness and good reputation.
Optoelectronics
(1) Sales areas of main products or business

Sales areas of main products: Optoelectronic products are both sold in Taiwan and overseas, with a sales volume of about 50% each.

(2) Future supply and demand status and growth in the market
In the LCM industry, the market demand for small- and medium-sized panels has gradually recovered, and the demand for consumer electronic products such as mobile phones and cameras has also gradually become stable. It is expected that, as the economy is gradually recovering, the relevant demand will continue to grow.
(3) Advantageous and disadvantageous factors in development prospects and countermeasures
A. Advantageous factors
1) Various kinds of new application products are continuously launched to promote demand growth.
2) We have been working on small and medium-sized LCD modules for many years and are well known for our products.
3) We meet our customers’ demand for diversified products by making use of our advantages in product development and technical expertise.
4) With the powerful support from government policies and the gradual completion of laws and regulations, the entire industry is undergoing a rapid development process.
B. Disadvantageous factors and countermeasures: A large number of manufacturers, fierce price competition among manufacturers, and the decline in price and gross profit caused by continuous introduction of new

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products in the market. The countermeasures are as follows:

1) Create new product development projects and accelerate the progress schedule to improve sales performance.
2) Improve the integration of resources within the industry, and reinforce the technical cooperation and development with manufacturers.
3) Actively develop unexplored application markets and expand customer base levels.
4) Enhance the improvement of products in order to raise product prices and reduce costs.
5) Consider the economic prosperity cautiously, and develop customers with positive actions.

(II) Key applications and manufacturing processes of main products

Key applications of main products
(1) Engineering: Including petrochemical plant machinery, instrumentation and electronics turnkey projects, fertilizer plant systems engineering, construction of new high-tech factory buildings, extension projects, power and energy mechanical engineering, plant equipment engineering, tobacco, alcohol and food mechanical engineering, refrigeration, air conditioning and water supply and drainage projects, fire protection engineering, maritime engineering, port crossing pipeline projects, steel barrel gate engineering, long-distance pipelines (oil, gas and water supply) and vertical parking towers, computer monitoring, instrumentation, electric power, hydropower engineering, air pollution, water treatment, sewage treatment and solid waste disposal facilities and projects.

(2) Construction:

(2)Construction:
Mainproducts	Applications
Congregated residential buildings	Houses, shops, and underground parking lots
Industrial factory office buildings	Industrial and commercial factory offices

(3) Optoelectronics: Mainly including electronics, electrical appliances, electrical products, communications (mobile phones, telephones), electronic billboards, backlights, solar power generation equipment, home appliances, medical, lighting and consumer products, etc.

Manufacturing processes
(1) Engineering

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Feasibility evaluation → Cost estimation → Planning and design → Selection of equipment and materials → Detailed cost evaluation → Profit evaluation → Quotation setting → Bargaining and contract signing → Procurement and contracting → Cost control → Construction execution → Completion and inspection → Request for final payment→ Warranty implementation

(2) Construction

Land development → Planning and design → Marketing planning → Project sales → Construction execution → Completion and Delivery → Building management → After-sale services

(3) Optoelectronics

1) LED

Bracket type

Die bonding → Wire bonding → Molding → Wire cutting → Testing → Packaging

SMD type

Die bonding → Wire bonding → Stamping → Cutting → Testing → Packaging

2) LCM

Preparation of materials → Assembling → Testing → Packaging

(III) Supply situation of main raw materials
Engineering
- (1) Special equipment and materials: Imported from Europe, the U.S. and Japan.
- (2) Special machinery and equipment: Part of the special machinery is designed by ourselves, and another part of them is imported or leased from Europe and the U.S.

2. Construction

(1) Land: Newly developed areas with good development potential in well located places, or the land lots gradually acquired from old communities and necessarily obtained through joint construction, and urban renewal.
(2) Construction projects: Cooperate with construction factories in stable operation, and strictly control the construction progress and the project quality.
(3) Materials: Building materials can be purchased from domestic or overseas suppliers, and their supply is in a safe state.
Optoelectronics

Current procurement situation: Due to the general price rise in raw materials and

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considering the cost burden, not only we are actively looking for other sources of supply and alternative raw materials, but also we require cost-down from suppliers to facilitate business market development. Right now, according to our business product plan, we purchase new application products such as TFT panels, VA, OLED, E-PAPER, etc.

(III) Lists of customers who have accounted for more than 10% of the total purchases and sales in any given year within the most recent two years and their purchases and sales amounts and percentages
List of sales customers:

Unit: NT$1,000

	2020 (consolidated)	2020 (consolidated)	2020 (consolidated)	2020 (consolidated)	2019 (consolidated)	2019 (consolidated)	2019 (consolidated)	2019 (consolidated)	Up to the previous quarter in 2021 (consolidated)	Up to the previous quarter in 2021 (consolidated)	Up to the previous quarter in 2021 (consolidated)	Up to the previous quarter in 2021 (consolidated)
Item	Name	Amount	Percent age in yearly net sales (%)	Relati onshi p with the Issuer	Name	Amount	Percen tage in yearly net sales (%)	Rela tions hip with the Issue r	Name	Amount	Percentage in yearly net sales up to the previous year in current year(%)	Relation ship with the Issuer
	Others	5,217,591	100	-	Jean Pacific Development Co., Ltd.	3,706,318	66	-	Shuo Li PV Energy Co., Ltd.	191,089	23	-
					Others	1,917,514	34	-	Others	629,939	77	-
	Net sales	5,217,591	100		Net sales	5,623,832	100		Net sales	821,028	100	-

Reason for the change:

As to the Company's construction projects, the sales customers are mainly public institutions and TWSE/GTSM listed companies that undertake the construction projects; as to the construction marketing and sales, the sales customers are mainly natural persons; for the construction sales of 2020, the main reason is the high percentage of the net sales from the construction project MY UTOPIA. The main sales customer in the first quarter of 2021 was Shuo Li PV Energy Co., Ltd. and the nature has not changed significantly.

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2. List of suppliers: Unit: NT$1,000

	2020 (consolidated)	2020 (consolidated)	2020 (consolidated)	2020 (consolidated)	2019 (consolidated)	2019 (consolidated)	2019 (consolidated)	2019 (consolidated)	Up to the previous quarter in 2021 (consolidated)	Up to the previous quarter in 2021 (consolidated)	Up to the previous quarter in 2021 (consolidated)	Up to the previous quarter in 2021 (consolidated)
Item	Name	Amount	Percent age in yearly net purchas e (%)	Relatio nship with the Issuer	Name	Amount	Percent age in yearly net purchas e (%)	Relatio nship with the Issuer	Name	Amount	Percentag e in yearly net purchase up to the previous year in current year(%)	Relati onship with the Issuer
	Others	4,732,188	100	-	Others	5,233,282	100	-	INWELLCO M Technology Co., Ltd.	100,103	14	-
									Shunhe Yi Construction Co., Ltd.	100,102	13	-
									Others	538,976	73	-
	Net purchase	4,732,188	100		Net purchase	5,233,282	100		Net purchase	739,181	100

Reason for the change:

In the first quarter of 2021, INWELLCOM Technology Co., Ltd. contracted the late-stage development project of the Ma Chouhou Park and Shunhe Yi Construction Co., Ltd. contracted the supply of materials for the Yunlin Xinxing Power Plant project, so the purchase accounted for a higher proportion.

(V) Production volume and value in the most recent 2 years (operating costs)

(V) Production volume and value in the most recent 2 years (operating costs)	(V) Production volume and value in the most recent 2 years (operating costs)	(V) Production volume and value in the most recent 2 years (operating costs)	(V) Production volume and value in the most recent 2 years (operating costs)	(V) Production volume and value in the most recent 2 years (operating costs)	(V) Production volume and value in the most recent 2 years (operating costs)	(V) Production volume and value in the most recent 2 years (operating costs)
Unit: NT$1,000/KPCS
Year Production volume and value Main products	2019(consolidated)			2020(consolidated)
	Production capacity	Production volume (increase)	Production value	Production capacity	Production volume (increase)	Production value
Electromechanical, instrumentation and electronics engineering	-	-	570,848	-	-	2,333,737
Optoelectronics products	21,000	20,401	136,705	30,000	29,090	114,698
Constructionprojects	-	-	4,520,364	-	-	2,274,927
Engineeringconsultant	-	-	5,365	-	-	8,826
Commission income	-	-	-	-	-	-
Others	-	-	-	-	-	-
Total	21,000	20,401	5,233,282	30,000	29,090	4,732,188

Note 1: The production capacity refers to the production volume that can be completed with existing production equipment in normal operation after a company has measured and excluded all necessary downtime plans and holidays. Note 2: As to the products that may be substituted by other products, the production capacity shall be calculated as combined and an explanation shall be provided in the note.

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(VI) Sales volume and value in the most recent 2 years (operating revenue) Unit: NT$1,000/KPCS

Year Sales Value Main products	2019 (consolidated)	2019 (consolidated)	2019 (consolidated)	2019 (consolidated)	2020 (consolidated)	2020 (consolidated)	2020 (consolidated)	2020 (consolidated)
	Domestic sales		Foreign sales		Domestic sales		Foreign sales
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Electromechanical , instrumentation and electronics engineering	-	446,229	-	-	-	2,245,136	-	-
Optoelectronics products	5,537	58,650	14,047	112,551	8,650	43,030	17,655	88,683
Construction projects	-	4,963,122	-	-	-	2,755,094	-	-
Engineering consultant	-	18,912	-	-	-	6,392	-	-
Commission income	-	24,368	-	-	-	79,256	-	-
Other incomes	-	0	-	-	-	0	-	-
Total	5,537	5,511,281	14,047	112,551	8,650	5,511,281	17,655	88,683

III. Employees

mployees	mployees
Year		2019	2020	As ofApril 20, 2021
Number of employees	Technical staff	45	26	20
	Administrative staff	94	97	96
	Total	139	123	116
Average age		44.18	45.21	46.66
Average	service year	7.33	9.13	8.6
Academic distribution ratio (%)	Master's degree	5.8	5.69	5.17
	Bachelor's degree	78.4	81.3	82.76
	High school	14.4	10.57	12.07
	Below high school	1.4	2.43	3.44

The employee analysis mentioned above is from APEX.

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Year	Year	2019	2020	As of April 20, 2021
Number of employees	Technical staff	63	51	47
	Administrative staff	31	31	30
	Total	94	82	77
Average age		45.59	46.39	46.93
Average service year		5.17	6.13	6.43
Academic distribution ratio (%)	Master's degree	8.51	9.76	7.79
	Bachelor's degree	81.91	79.27	80.52
	High school	9.58	10.97	11.69
	Below high school	0	0	0

The employee analysis mentioned above is from Chang Ji.

IV. Environmental protection expenditure

There were no losses incurred by environmental pollution or penalties by competent authorities in the most recent fiscal year up to the date of publication of the Annual Report.

V. Labor relations

(I) Employee benefit plans, continuing education, training, and retirement systems and the status of their implementation, as well as the status of labor management agreements and measures for preserving employees' rights and interests:
All employees of the Company are paid for labor insurance and national health insurance from the date of employment; and according to different job attributes and positions, they will also be paid for employers’ accident liability insurance and group injury insurance ranging from NT$2,000,000 to NT$8,500,000; for colleges who are engaged in high-level management or financial-related work will be paid for additional liability insurance of US$5,000,000.
The Company has established the Employee Welfare Committee and allocated NT$1,950,000 as the welfare fund since its establishment, with 0.075% appropriated from the operating income every month and fully deposited in bank yields; the construction subsidiary Chang Ji has allocated NT$2,750,000 as the welfare fund since its establishment, with 0.050% appropriated from the operating income every month and fully deposited in bank yields.
The Company's employee welfare measures are as follows:

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(1) Benefits for marriage, maternity, injury, bereavement and major disasters, etc.
(2) Staff tourism.
(3) Birthday vouchers or cash gifts every year.
(4) Gifts or cash gifts for Labor Day, Women’s Day, Dragon Boat Festival and Mid-Autumn Festival, etc.
(5) A dinner party, gift vouchers or cash gifts and a party lottery event at the end of a year
(6) Provision of professional licenses and education training courses for required qualification
(7) Employee bonus (in accordance with laws and the Company’s profit regulations)
(8) Group health examination
(9) Childcare measures
(10) Welfare facilities: Nursing rooms, coffee machines, soda stream machines, massage chairs, staff dining rooms, basketball machines, fitness equipment, billiards, ice machines, etc.
Education and training:

Internal training:

(1) See through Government Procurement Contract from Court Decision - Engineering Procurement
(2) Analysis of construction industry regulations and case studies
(3) Efficient communication and coordination
(4) Problem reflection, analysis and solution

External training:

(1) Practical operation class of control and internal audit
(2) Project cost estimator (certification class)
(3) 2020 engineering drawing description on drawing identification, drawing review, measurement and pricing
(4) Special class for strategy practice learning
(5) Industrial circular economy visits
(6) Practice seminar on promotion of BIM information management and circular construction
(7) On-the-job education and training on work safety and health for occupational safety and health managers
(8) Effect analysis on TTQS training system

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(9) Training class of quality management in public projects

(10) On-the-job education and training on work safety and health for occupational safety and health managers

(11) Training planning and assessment courses
(12) Operation of on-site health service system
(13) Retraining for quality control engineers
(14) Safety training for Class A occupational safety and health business directors
(15) Handling of project progress behind schedule, project progress management and delay of contract performance
(16) Fire protection manager
(17) Course of CISSP information security system expert certification
(18) Retraining for first aid personnel
(19) Analysis on the competent authority's policy for "assisting companies in enhancing their abilities to prepare financial reports" and internal control practices
(20) Retraining for Class B occupational safety and health personnel
(21) Common deficiencies in the preparation of corporate financial reports and practices of compliance with internal audit and internal control laws and regulations
(22) Accordance with new laws and regulations on self-compilation of financial reports
(23) CYBERSEC 2020 Taiwan Information Security Conference
(24) 2020 Workplace health seminar and prevention of illegal infringement
(25) Analysis on the policy for assisting companies in enhancing their abilities to prepare financial reports and internal control practices
(26) Compensation structure and tax law practices
(27) 2020 Friendly Workplace Promotion Workshop
(28) Common deficiencies in the preparation of corporate financial reports and practices of compliance with internal audit and internal control laws and regulations
(29) Practice workshop for preparation of consolidated financial statements
(30) Education training course about deep security
(31) Safety and health education and training for organic solvent operation supervisors
(32) Advanced workshop for labor management representatives

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(33) Hacking and information security forensic seminar
(34) Corporate Governance 3.0
(35) Practice seminar on promotion of BIM information management and circular construction
Retirement system
(1) In order to take care of retired employees, the Company has established the "Labor Retirement Plan".
(2) According to the Labor Pension Act, from July 1, 2005, the Company has been appropriating an amount equivalent to 6% of monthly salary of each employee to their each special pension account designated by the Bureau of Labor Insurance each month.
(3) According to the relevant provisions of the Labor Standards Act, 5% of the total monthly salary of each employee is appropriated as the employee’s pension reserve fund and deposited into a special account in the Central Trust of China; and also the employee retirement pension is paid according to the provisions of the Labor Standards Act (which is now suspended). According to the Labor Pension Act, from July 1, 2005, the construction subsidiary Chang Ji has been appropriating an amount equivalent to 6% of monthly salary of each employee to their each special pension account designated by the Bureau of Labor Insurance each month.
Measures for preserving employees' rights and interests:
(1) As to personnel selection and employment, no one shall be discriminated against because of race, social class, nationality, religion, physical disability, gender, sexual orientation, union membership, political affiliation or age, etc.
(2) The Remuneration Committee is established to review whether the salaries and remunerations of managers and senior employees are paid in accordance with laws and regulations and has been reported to the Board of Directors in accordance with the regulations; an overall compensation policy and architecture shall be formulated in accordance with relevant labor laws and regulations, so as to attract, motivate, reward and retain outstanding talents.
(3) There shall be unobstructed communication channels for employees to provide constructive opinions to the Company at any time; in order to protect employees' rights and interests, the Occupational Safety and Health Management Office was established in 2019, which aimed at providing a

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working environment free from sexual harassment and taking appropriate prevention, correction and punishment measures.

(4) Mailbox for receiving complaints on employees’ rights protection : Contacts: LIN, SU-CHEN, Special Assistant; CHEN, YUN-JU, Commissioner Tel: (02)2223-4099 #622#613

E-mail: sj_lin @apexgrp.com.tw; [email protected] Occupational Safety and Health Management Office: CHEN, KUO-LIANG, Manager Tel: (02)2223-4099 #632

     - E-mail: [email protected]

  - (5) Working environment: The company combines factories and offices together in an entire office environment which is quiet and bright with no noise interference.

(II) Losses sustained as a result of labor disputes (including labor inspection results in violation of provisions under the Labor Standards Act, which shall be clearly listed with disposal dates, disposal document numbers, legal or regulatory provisions violated, description of legal or regulator provisions violated, and punishment statements) in the most recent fiscal year and up to the date of publication of the Annual Report, and disclosure of an estimate of losses incurred to date and that may occur in the future, as well as indication of mitigation measures being or to be taken, or any fact of failure to estimate reasonably that shall be described, if any: None.
VI. Important contracts and agreements: The parties to, main contents of, restrictions specified in, and the effectiveness and termination/cancellation dates of such supply and sales contracts, technical cooperation contracts, construction contracts, long-term loan contracts and other important contracts that affect the shareholders' equity as valid and existing as of the date of publication of the Annual Report shall be specified:

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Party	Contract duration	Contract content	Restrictions
Construction and Planning Agency, MOI and Water Resources Bureau of Taichung City Government	101.11.30-109.02.08	Combined Project of Phase II Expansion and Commissioning, Operation and Maintenance of Futian Water Resources Recycling Center in Taichung City	Overdue fine
Construction and Planning Agency, MOI and Water Resources Bureau of Tainan City Government	101.09.07-108.12.31	Combined Project of Phase I New Construction Works and 3- year Commissioning of Rende Water Reclamation Plant in Tainan City	Overdue fine
National Taichung Universityof Education	101.11.14~108.12.31	Teaching Building Construction Project	Overdue fine
Chiayi County Government	102.05.07~109.07.31	Chiayi County Machouhou Industrial Park Phase I	Overdue fine
Taiwan Water Corporation	103.06.5~108.12.31	Donggang River Raw Water Pretreatment Project	Overdue fine
CPC Corporation, Taiwan	104.05.19~108.12.31	Offshore Oil Unloading Buoy #2 Partial Submarine Pipeline Replacement Project for the Taoyuan Refinery	Overdue fine
National Chiao Tung University	104.04.16~108.12.31	New BIO-ICT Building Turnkey Project of Boai Campus	Overdue fine
National Chiao Tung University	104.01.28~108.12.31	Dormitory Building #3 Construction Project of Guangfu Campus	Overdue fine
Suhua Improvement Engineering Office, Directorate General of Highways, Ministry of Transportation and Communications	105.04.27~109.07.31	Electromechanical Project on Nanao to Heping Section of Provincial Highway No. 9 for Suhua Improvement Engineering Office, Directorate General of Highways, Ministry of Transportation and Communications	Overdue fine
National Taiwan University	107.01.12~109.11.30	New Multi-purpose Building Project of National Taiwan University College of Engineering	Overdue fine
Construction and Planning Agency, Ministry of the Interior	107.05.14~109.05.15	Helicopter Hangar Construction Project of National Airborne Service Corps, MOI in Kaohsiung	Overdue fine
Chiayi County Government	107.10.12~113.10.12	Chiayi County Machouhou Industrial Park Phase II	Overdue fine
Department of Transportation, Taoyuan	107.10.22~109.02.17	Underground Parking Garage Construction Project of Wunchang Park in Taoyuan District,Taoyuan City	Overdue fine
PeiFeng Technology & Fertilizer. Co. Ltd.	107.10.22~109.02.13	Construction and Installation Project of Nitrophosphate Workshop	Overdue fine

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CPC Corporation, Taiwan	107.12.03~109.04.24	Steam Turbine Generator #4 System Turnkey Project for the Taoyuan Refinery	Overdue fine
CPC Corporation, Taiwan	108.08.09~110.04.17	Taichung Plant-Tongxiao Station 36-inch Onshore Gas Pipeline Project for the L10501 Program	Overdue fine
CPC Corporation, Taiwan	109.09.15~110.05.13	Project of a Batch of 36-inch API 5L X65 PSL1 Coated Steel Pipes and Bare Pipes	Overdue fine
Chunghwa Post Co., Ltd.	109.12.04~112.02.21	Guangfu Road Post Office New Construction Project in Changhua City	Overdue fine
Tainan City Government	Completed on January 15, 2021 Signing Ceremony	Cigu Technology Industrial Park Development, Rental, Sales and Management Project commissioned by the Tainan City Government to public or private enterprises	Overdue fine

Long- term loan contract	Taiwan Cooperative Bank, Taiwan Business Bank, Chang Hwa Commercial Bank, Agricultural Bank of Taiwan, Hua Nan Commercial Bank, Bank Of Kaohsiung	101.07.25~109.07.31	Syndicated loan contract	With certain financial ratios sustained
Long- term loan contract	Taiwan Cooperative Bank, Taiwan Business Bank, Chang Hwa Commercial Bank, Agricultural Bank of Taiwan, Hua Nan Commercial Bank, Land Bank of Taiwan	108.10.30~115.02.12	Syndicated loan contract	With certain financial ratios sustained

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Chapter VI. Financial Information

I. Brief financial information for the past five fiscal years

(I) Condensed Balance Sheet and Statement of Comprehensive Income
Condensed Balance Sheet - IFRS - parent company only

1. Condensed Balance Sheet - IFRS - parent company only	1. Condensed Balance Sheet - IFRS - parent company only	1. Condensed Balance Sheet - IFRS - parent company only	1. Condensed Balance Sheet - IFRS - parent company only	1. Condensed Balance Sheet - IFRS - parent company only	1. Condensed Balance Sheet - IFRS - parent company only	1. Condensed Balance Sheet - IFRS - parent company only	1. Condensed Balance Sheet - IFRS - parent company only	1. Condensed Balance Sheet - IFRS - parent company only
Unit: NT$1,000
Year Item			Financial information for the past five fiscal years (Note 1)					As of March 31, 2021 in current year Financial information (Note 3)
			2020	2019	2018	2017	2016
Current assets			5,448,729	6,000,497	8,396,049	7,318,949	7,246,575
Property, plant and equipment			100,181	90,343	90,596	104,520	106,487
Intangible assets			-	-	-	-	-
Other assets			821,802	898,953	929,970	689,506	648,927
Total assets			6,370,712	6,989,793	9,416,615	8,112,975	8,001,989
Current liabilities	Before distribution		3,298,143	3,611,630	6,205,454	4,626,980	4,654,465
	After distribution		(Note 2)	3,725,987	6,205,454	4,787,079	4,723,079
Non-current liabilities			18,444	512,856	510,677	501,210	109,622
Total liabilities		Before distributi on	3,316,587	4,124,486	6,716,131	5,128,190	5,154,423
		After distributi on	(Note 2)	4,238,843	6,716,131	5,288,289	5,223,037
Equity attributable to owners of the parent company			3,054,125	2,865,307	2,700,484	2,984,785	2,847,566
Capital			2,287,135	2,287,135	2,330,045	2,330,045	2,330,045
Capital surplus			249,009	234,909	235,851	218,991	211,632
Retained earnings		Before distributi on	822,634	624,437	449,005	742,022	609,832
		After distributi on	(Note 2)	510,080	449,005	581,923	541,218
Other equity			(22,686)	(25,337)	(14,485)	(6,341)	(4,011)
Treasurystock			(281,967)	(255,837)	(299,932)	(299,932)	(299,932)
Total equity		Before distributi on	3,054,125	2,865,307	2,700,484	2,984,785	2,847,566
		After distributi on	(Note 2)	2,750,950	2,700,484	2,824,686	2,778,952

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Note 1: The financial information has all been audited by independent CPAs.

Note 2: Earnings distribution for 2020 has not been resolved at the Regular Shareholders' Meeting.

Note 3: A consolidated financial statement was presented for Q1, 2021.

Condensed Statement of Comprehensive Income - IFRS - parent company only

2. Condensed Statement of Comprehensive Income - IFRS - parent company only	2. Condensed Statement of Comprehensive Income - IFRS - parent company only	2. Condensed Statement of Comprehensive Income - IFRS - parent company only	2. Condensed Statement of Comprehensive Income - IFRS - parent company only	2. Condensed Statement of Comprehensive Income - IFRS - parent company only	2. Condensed Statement of Comprehensive Income - IFRS - parent company only	2. Condensed Statement of Comprehensive Income - IFRS - parent company only
Unit: NT$1,000, (exceptearnings (loss) pershare)
Year Item	Financial information for the past five fiscal years (Note 1)					As of March 31, 2021 in current year Financial information (Note 2)
	2020	2019	2018	2017	2016
Operatingrevenue	3,905,707	4,497,293	554,737	1,799,515	992,404
Gross Profit	425,280	338,818	(76,937)	337,827	61,928
Operating profit and loss	249,283	210,032	(187,852)	195,693	(29,496)
Non-operating Income and Expenses	51,167	27,889	(17,355)	27,592	60,364
Net income before tax	300,450	237,921	(205,207)	223,285	30,868
Net profit of continuing operations for the period	315,653	175,432	(135,918)	200,804	44,479
Loss from discontinued operations	-	-	-	-	-
Net income (loss) for theperiod	315,653	175,432	(135,918)	200,804	44,479
Other comprehensive income for the period,after tax	4,512	(10,852)	(4,729)	(2,330)	(12,802)
Total comprehensive income for the period	320,165	164,580	(140,647)	198,474	31,677
Earnings (loss) per share(NT$)	1.59	0.87	(0.68)	1.00	0.22

Note 1: The financial information has all been audited by independent CPAs.

Note 2: A consolidated financial statement was presented for Q1, 2021.

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3. Condensed Balance Sheet - IFRS - consolidated

3. Condensed Balance Sheet - IFRS - consolidated	3. Condensed Balance Sheet - IFRS - consolidated	3. Condensed Balance Sheet - IFRS - consolidated	3. Condensed Balance Sheet - IFRS - consolidated	3. Condensed Balance Sheet - IFRS - consolidated	3. Condensed Balance Sheet - IFRS - consolidated	3. Condensed Balance Sheet - IFRS - consolidated	3. Condensed Balance Sheet - IFRS - consolidated
Unit: NT$1,000
Item Year		Financial information for the recent fiveyears(Note 1)					As of March 31, 2021 in current year Financial information (Note 2)
		2020	2019	2018	2017	2016
Current assets		7,038,920	7,495,168	10,006,311	8,715,158	8,648,679	8,231,075
Property, plant, and equipment		117,701	173,797	175,062	190,027	193,629	116,866
Intangible assets		-	-	-	-	2,060	-
Other assets		399,661	475,238	508,767	249,402	260,810	397,547
Total assets		7,556,282	8,144,203	10,690,140	9,154,587	9,105,178	8,745,488
Current liabilities	Before distribution	4,368,791	4,648,435	7,348,443	5,627,314	5,627,314	5,515,984
	After distribution	Note 3	4,762,792	7,348,443	5,695,928	5,695,928	Note 3
Non-current liabilities		46,399	512,855	512,136	504,094	114,096	49,439
Total liabilities	Before distribution	4,415,190	5,161,290	7,860,579	6,039,063	6,131,456	5,565,423
	After distribution	Note 3	5,275,647	7,860,579	6,199,162	6,200,070	Note 3
Equity attributable to owners of the parent company		3,054,125	2,865,307	2,700,484	2,984,785	2,847,566	3,092,197
Capital		2,287,135	2,287,135	2,330,045	2,330,045	2,330,045
Capital surplus		249,009	234,909	235,851	218,991	211,632	2,287,135
Retained earnings	Before distribution	822,634	624,437	449,005	742,022	609,832	862,193
	After distribution	Note 3	510,080	449,005	581,923	541,218	Note 3
Other equity		(22,686)	(25,337)	(14,485)	(6,341)	(4,011)	(24,128)
Treasurystock		(281,967)	(255,837)	(299,932)	(299,932)	(299,932)	(281,967)
Non-controlling interests		86,967	117,606	129,077	130,739	126,156	87,868
Total equity	Before distribution	3,141,092	2,982,913	2,829,561	3,115,524	2,973,722	3,180,065
	After distribution	Note 3	2,868,556	2,829,561	2,955,425	2,905,108	Note 3

Note 1: The financial information has all been audited by independent CPAs.

Note 2: The consolidated financial statement for Q1, 2021 was audited by independent CPAs.

Note 3: Earnings distribution for 2020 has not been resolved at the Regular Shareholders' Meeting.

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4. Condensed Statement of Comprehensive Income - IFRS - consolidated

	Unit: NT$1,000, (exceptearnings (loss) pershare)	Unit: NT$1,000, (exceptearnings (loss) pershare)	Unit: NT$1,000, (exceptearnings (loss) pershare)	Unit: NT$1,000, (exceptearnings (loss) pershare)	Unit: NT$1,000, (exceptearnings (loss) pershare)	Unit: NT$1,000, (exceptearnings (loss) pershare)
Item Year	Financial information for the recent fiveyears(Note 1)					As of March 31, 2021 in current year Financial information (Note 2)
	2020	2019	2018	2017	2016
Operatingrevenue	5,217,591	5,623,832	1,070,737	3,901,472	2,887,603	821,028
Gross Profit	485,403	390,550	(65,425)	443,055	165,833	81,847
Operatingincome	286,326	239,566	(204,369)	268,430	44,915	48,005
Non-operating Income and Expenses	22,002	4,418	474	(35,593)	(3,628)	6,293
Net income before tax	308,328	243,984	(203,895)	232,837	41,287	54,298
Net income from Continuing operations for theperiod	322,455	177,286	(135,144)	208,562	52,800	40,465
Loss from discontinued operations	-	-	-	-	-	-
Net income (loss) for theperiod	322,455	177,286	(135,144)	208,562	52,800	40,465
Other comprehensive income for the period, after tax	4,512	(11,033)	(4,819)	(2,330)	(12,802)	(1,442)
Total comprehensive income for theperiod	326,967	166,253	(139,963)	206,232	39,998	39,023
Net income attributable to owners of theparent company	315,653	175,432	(135,918)	200,804	44,479	39,559
Net income attributable to non- controllinginterests	6,802	1,854	774	7,758	8,321	906
Comprehensive income attributable to owners of the parent company	320,165	164,580	(140,647)	198,474	31,677	38,117
Comprehensive income attributable to non-controlling interests	6,802	1,673	684	7,758	8,321	906
Earnings (loss) per share(NT$)	1.59	0.87	(0.68)	1	0.22	0.20

Note 1: The financial information has all been audited by independent CPAs.

Note 2: The consolidated financial statement for Q1, 2021 was audited by independent CPAs.

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(II) Names of CPAs for the recent five years

Year	Name of CPA	Audit opinions
105	WENG, SHIH-JUNG, WANG,HUI-HSIEN	No reservations
106	WENG, SHIH-JUNG, WANG,HUI-HSIEN	No reservations
107	WENG, SHIH-JUNG, CHANG,SHU-CHIUNG	No reservations
108	WENG, SHIH-JUNG, CHANG,SHU-CHIUNG	No reservations
109	LIAO, FU-MING, CHEN, CHING-CHANG	No reservations

II. Financial analysis for the past five fiscal years - IFRS - parent company only

Analysis item (Note 3) Year	Analysis item (Note 3) Year	Financial analysis for the past five fiscal years (Note 1)	Financial analysis for the past five fiscal years (Note 1)	Financial analysis for the past five fiscal years (Note 1)	Financial analysis for the past five fiscal years (Note 1)	Financial analysis for the past five fiscal years (Note 1)
		2020	2019	2018	2017	2016
Financial structure (%)	Debt ratio	52.06	59.01	71.30	63.21	64.41
	Ratio of long-term capital to property, plant and equipment	3067.02	3739.26	3536.92	3335.24	3143.6
Solvency (%)	Current ratio	165.21	166.14	137.76	158.18	155.69
	Quick ratio	138.00	92.44	47.63	116.33	107.17
	Interest coverage ratio	1159.07	413.2	(363.66)	633.47	154.04
Operating ability	Accounts receivable turnover rate(times)	8.59	16.41	1.72	5.19	3.85
	Average days for cash receipts	42.49	22.24	212.53	70.31	94.74
	Inventory turnover rate(times)	2.42	2.62	2.13	3	2.5
	Accounts payable turnover rate(times)	12.74	11.78	1.48	3.87	2.82
	Average days for sale ofgoods	150.83	139.48	171.19	121.56	146.28
	Property, plant and equipment turnover rate(times)	41.00	49.71	6.12	17.22	9.32
	Total assets turnover rate(times)	0.58	0.55	0.06	0.22	0.12
Profitability	Return on total assets(%)	4.92	2.37	(1.33)	2.76	0.84
	Return on equity (%)	10.66	6.30	(4.78)	6.89	1.54

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	Ratio of income before tax to paid-in capital(%)	13.14	10.40	(8.81)	9.58	1.32
	Net profit margin (%)	8.08	3.90	(24.50)	11.16	4.48
	Earnings per share (NT$)	1.59	0.87	(0.68)	1	0.22
Cash flows	Cash flow ratio(%)	28.84	65.53	(44.12)	12.34	(12.88)
	Cash flow adequacy ratio(%)	18.88	(48.45)	(108.2)	70.94	20.12
	Cash reinvestment ratio(%)	28.94	73.94	(97.63)	14.99	(22.37)
Leverages	Operatingleverage	1.71	1.61	0.41	1.73	(2.10)
	Financial leverage	1.07	1.13	0.88	1.15	0.57
Please specify reasons of changes in various financial ratios for the past two fiscal years. (Analysis is not required if the change in increase or decrease is within 20%) 1. Quick ratio: The increase from the previous period was mainly due to the increase in the account of land development receivable from the agency in the current period as compared with the previous period. 2. Interest coverage ratio: The increase from the previous period was mainly due to the increase in net income before tax and the decrease in interest expenses in the current period. 3. Accounts receivable turnover rate (times): The decrease from the previous period was mainly due to the decrease in net sales of the current period and the increase in average accounts receivable as compared with the previous period. 4. Average days for cash receipts: The increase from the previous period was mainly due to the decrease in accounts receivable turnover rate in the current period. 5. Return on assets: The increase from the previous period was mainly due to the increase in net income before tax in the current period and the decrease in average total assets as compared from the previous period. 6. Return on equity: The increase from the previous period was mainly due to the increase in net income after tax in the current period. 7. Ratio of income before tax to paid-in capital (%): The increase from the previous period was mainly due to the increase in operating income in the current period. 8. Net profit margin (%): The increase from the previous period was mainly due to the increase in net income after tax in the current period. 9. Earnings per share (NT$): The increase from the previous period was mainly due to the increase in net income after tax in the current period. 10. Cash flow ratio (%): The decrease from the previous period was mainly due to the decrease in net cash inflow from operating activities in the current period. 11. Cash flow adequacy ratio (%): The increase from the previous period was mainly due to the increase in net cash flow from operating activities for the past five fiscal years. 12. Cash reinvestment ratio (%): The decrease from the previous period was mainly due to the decrease in net cash inflow from operatingactivities in the currentperiod.

Note 1: The financial information has all been audited by independent CPAs.

Note 2: A consolidated financial statement was presented for Q1, 2021.

Note 3: At the end of this form in the Annual Report, the calculation formulas shall be listed as follows:

Financial structure
(1) Debt ratio = Total liabilities/Total assets
(2) Ratio of long-term capital to property, plant and equipment = (Total equity + Non-current liabilities)/Net value of property, plant and equipment
Solvency
(1) Current ratio = Current assets/Current liabilities
(2) Quick ratio = (Current assets - Inventories - Prepaid expenses)/Current liabilities
(3) Interest coverage ratio = Income before tax and interest expenses/Interest expenses for the period
Operating ability
(1) Accounts receivable (including accounts receivable and notes receivable generated from operations) turnover rate = Net sales/Average balance of accounts receivable (including accounts receivable and notes receivable generated from operations) for each period
(2) Average days for cash receipts = 365/Accounts receivable turnover rate

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(3) Inventory turnover rate = Sales cost/Average inventories (4) Accounts payable (including accounts payable and notes payable generated from operations) turnover rate = Sales cost/Average balance of accounts payable (including accounts payable and notes payable generated from operations) for each period
(5) Average days for sale of goods = 365/Inventory turnover rate (6) Property, plant and equipment turnover rate� Net sales/Average net value of property, plant and equipment (7) Total assets turnover rate = Net sales/Average total assets
1. Profitability (1) Return on assets = [Income after tax + Interest expenses x (1 - tax rate)]/Average total assets (2) Return on equity = Income after tax/Average total equity (3) Net profit margin = Income after tax/Net sales (4) Earnings per share = (Income attributable to owners of the parent company - preferred stock dividends)/Weighted average number of shares issued (Note 4)
1. Cash flows (1) Cash flow ratio = Net cash flows generated from operating activities/Current liabilities (2) Cash flow adequacy ratio = Net cash flows generated from operating activities for the past five years/(Capital expenditure + inventory additions + cash dividends) for the past five years
(3) Cash reinvestment ratio = (Net cash flows generated from operating activities - Cash dividends)/(Gross amount of property, plant and equipment + Long term investment + Other non-current assets + Working capital) (Note 5)
1. Leverages (1) Operating leverage = (Net operating revenue - Variable operating costs & expenses)/Operating income (Note 6) (2) Financial leverage = Operating income/(Operating income - Interest expenses)
Note 4: Special attention shall be paid to the following matters when using the calculation formula of earnings per share mentioned above: 1. Shares outstanding are based on weighted average shares, but not based on year end shares outstanding. 2. In case of any cash capital increase or treasury stock transactions, the number of weighted average shares shall calculated during the circulated period.
1. In case of any capital increase from earnings or from capital surplus, when calculating the earnings per share of previous years and half-years, retrospective adjustments should be made according to the capital increase ratio, regardless of the period of the issuance of the capital increase.
1. If preferred shares are cumulative non-convertible preferred shares, dividends of the current year (no matter whether they are distributed) shall be subtracted from the net income after tax or added into the net loss after tax. If preferred shares are noncumulative, preferred shares shall be subtracted from the net income after tax if any, but no adjustment is needed if there are losses.

Note 5: Special attention shall be paid to the following matters when measuring cash flow analysis: 1. Cash flows from operating activities refer to operating cash inflows from operating activities in the cash flow statement. 2. Capital expenditures refer to cash outflows from the capital investment every year.

Inventory increases are only included in case the period end balance is greater than the period beginning balance. If inventories decrease at the end of the year, then zero is applied.
Cash dividends includes common stock and preferred stock dividends.
The gross amount of property, plant and equipment refers to the total value of property, plant and equipment before depreciation.

Note 6: The issuer shall classify the operating costs and operating expenses as fixed or variable operating costs as per their nature. If it involves estimation or subjective judgment, they are classified based on rationality and consistency.

Note 7: Where corporate shares have no par value or where the par value per share is not NT$10, any ratios to paid-in capital for calculations mentioned above shall be replaced with the equity ratio attributable to owners of the parent company in the balance sheet.

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Financial analysis for the past five fiscal years - IFRS - Consolidated

Analysis item	Year (Note 3)	Financial analysis for the past five fiscal years (Note 1)	Financial analysis for the past five fiscal years (Note 1)	Financial analysis for the past five fiscal years (Note 1)	Financial analysis for the past five fiscal years (Note 1)	Financial analysis for the past five fiscal years (Note 1)	As of March 31, 2021 in current year (Note 2)
		2020	2019	2018	2017	2016
Financial structure (%)	Debt ratio	58.43	63.37	73.51	65.97	67.34	63.64
	Ratio of long-term capital to property, plant and equipment	2708.13	2011.41	1904.94	1904.79	1,796.15	2763.42
Solvency (%)	Current ratio	161.12	161.24	138.24	157.46	153.69	149.22
	Quick ratio	138.51	98.98	57.20	119.17	109.27	122.26
	Interest coverage ratio	903.82	380	(288)	551.55	161.44	989.40
Operating ability	Accounts receivable turnover rate(times)	11.20	19.63	3.01	10.12	10.90	6.39
	Average days for cash receipts	32.59	18.59	120.86	36.10	33.49	57.12
	Inventory turnover rate(times)	2.42	2.62	2.13	3.00	2.50	3.06
	Accounts payable turnover rate(times)	10.68	9.94	1.87	5.91	3.19	6.95
	Average days for sale ofgoods	150.83	139.31	171.36	121.66	146.00	119.28
	Property, plant and equipment turnover rate(times)	35.80	32.24	6.11	20.53	14.91	28.00
	Total assets turnover rate(times)	0.66	0.69	0.10	0.43	0.32	0.40
Profitability	Return on total assets(%)	4.37	2.17	(1.09)	2.61	0.95	0.56
	Return on equity (%)	10.53	6.10	(4.55)	6.85	1.75	1.28
	Ratio of income before tax to paid-in capital(%)	13.48	10.67	(8.75)	9.99	1.77	2.37
	Net profit margin (%)	6.18	3.15	(12.62)	5.35	1.83	4.93
	Earnings per share (NT$)	1.59	0.87	(0.68)	1.00	0.22	0.20
Cash flows	Cash flow ratio(%)	17.96	52.43	(38.16)	10.64	(8.93)	(1.38)
	Cash flow adequacy ratio(%)	16.52	(46.72)	(111.75)	31.69	(3.63)	14.02
	Cash reinvestment ratio(%)	22.52	71.24	(92.13)	14.62	(17.75)	(10.43)
Leverages	Operatingleverage	1.70	1.60	0.32	1.91	3.69	1.70
	Financial leverage	1.10	1.16	0.86	1.15	4.52	1.15

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Please specify reasons of changes in various financial ratios for the past two fiscal years. (Analysis is not required if the change in increase or decrease is within 20%)

Ratio of long-term capital to property, plant, and equipment: The increase from the previous period was mainly due to the decrease of property, plant and equipment in the current period.
Quick ratio: The increase from the previous period was mainly due to the increase in inventories and the decrease in prepayments in the current period.
Interest coverage ratio: The increase from the previous period was mainly due to the increase in net income before tax and the decrease in interest expenses in the current period.
Accounts receivable turnover rate (times): The decrease from the previous period was mainly due to the increase in average accounts receivable in the current period.
Average days for cash receipts: The increase from the previous period was mainly due to the decrease in accounts receivable turnover rate in the current period.
Return on assets: The increase from the previous period was mainly due to the increase in net income after tax in the current period and the decrease in average total assets as compared from the previous period.
Return on equity: The increase from the previous period was mainly due to the increase in net income after tax in the current period.
Ratio of income before tax to paid-in capital (%): The increase from the previous period was mainly due to the increase in net income before tax in the current period.
Net profit margin (%): The increase from the previous period was mainly due to the increase in net income after tax in the current period.
Earnings per share (NT$): The increase from the previous period was mainly due to the increase in net income after tax in the current period.
Cash flow ratio (%): The decrease from the previous period was mainly due to the decrease in net cash inflow from operating activities in the current period.
Cash flow adequacy ratio (%): The increase from the previous period was mainly due to the increase in net cash flow from operating activities for the past five fiscal years.
Cash reinvestment ratio (%): The decrease from the previous period was mainly due to the decrease in net cash inflow from operating activities in the current period.

*If the Company has prepared a parent company only financial report, it shall prepare parent company only financial analysis.

*Companies which followed IFRS to prepare the financial information for less than five years shall otherwise prepare financial information in accordance with financial accounting standards in Taiwan.

Note 1: The financial information has all been audited by independent CPAs.

Note 2: The consolidated financial statement for Q1, 2021 was audited by independent CPAs.

Note 3: At the end of this form in the Annual Report, the calculation formulas shall be listed as follows:

Financial structure
(1) Debt ratio = Total liabilities/Total assets
(2) Ratio of long-term capital to property, plant and equipment = (Total equity + Non-current liabilities)/Net value of property, plant and equipment
1. Solvency
(1) Current ratio = Current assets/Current liabilities
(2) Quick ratio = (Current assets - Inventories - Prepaid expenses)/Current liabilities
(3) Interest coverage ratio = Income before tax and interest expenses/Interest expenses for the period
Operating ability
(1) Accounts receivable (including accounts receivable and notes receivable generated from operations) turnover rate = Net sales/Average balance of accounts receivable (including accounts receivable and notes receivable generated from operations) for each period
(2) Average days for cash receipts = 365/Accounts receivable turnover rate
(3) Inventory turnover rate = Sales cost/Average inventories
(4) Accounts payable (including accounts payable and notes payable generated from operations) turnover rate = Sales cost/Average balance of accounts payable (including accounts payable and notes payable generated from operations) for each period
(5) Average days for sale of goods = 365/Inventory turnover rate
(6) Property, plant and equipment turnover rate� Net sales/Average net value of property, plant and equipment
(7) Total assets turnover rate = Net sales/Average total assets
Profitability
(1) Return on assets = [Income after tax + Interest expenses x (1 - tax rate)]/Average total assets
(2) Return on equity = Income after tax/Average total equity
(3) Net profit margin = Income after tax/Net sales
(4) Earnings per share = (Income attributable to owners of the parent company - preferred stock dividends)/Weighted average number of shares issued (Note 4)
Cash flows
(1) Cash flow ratio = Net cash flows generated from operating activities/Current liabilities

-128-

  - (2) Cash flow adequacy ratio = Net cash flows generated from operating activities for the past five years/(Capital expenditure + inventory additions + cash dividends) for the past five years

  - (3) Cash reinvestment ratio = (Net cash flows generated from operating activities - Cash dividends)/(Gross amount of property, plant and equipment + Long term investment + Other non-current assets + Working capital) (Note 5)

Leverages
- (1) Operating leverage = (Net operating revenue - Variable operating costs & expenses)/Operating income (Note 6)
- (2) Financial leverage = Operating income/(Operating income - Interest expenses)
Note 4: Special attention shall be paid to the following matters when using the calculation formula of earnings per share mentioned above:
Shares outstanding are based on weighted average shares, but not based on year end shares outstanding.
In case of any cash capital increase or treasury stock transactions, the number of weighted average shares shall calculated during the circulated period.
In case of any capital increase from earnings or from capital surplus, when calculating the earnings per share of previous years and half-years, retrospective adjustments should be made according to the capital increase ratio, regardless of the period of the issuance of the capital increase.
If preferred shares are cumulative non-convertible preferred shares, dividends of the current year (no matter whether they are distributed) shall be subtracted from the net income after tax or added into the net loss after tax. If preferred shares are non-cumulative, preferred shares shall be subtracted from the net income after tax if any, but no adjustment is needed if there are losses.
Note 5: Special attention shall be paid to the following matters when measuring cash flow analysis:
Cash flows from operating activities refer to operating cash inflows from operating activities in the cash flow statement.
Capital expenditures refer to cash outflows from the capital investment every year.
Inventory increases are only included in case the period end balance is greater than the period beginning balance. If inventories decrease at the end of the year, then zero is applied.
Cash dividends includes common stock and preferred stock dividends.
The gross amount of property, plant and equipment refers to the total value of property, plant and equipment before depreciation.
Note 6: The issuer shall classify the operating costs and operating expenses as fixed or variable operating costs as per their nature. If it involves estimation or subjective judgment, they are classified based on rationality and consistency.
Note 7: Where corporate shares have no par value or where the par value per share is not NT$10, any ratios to paid-in capital for calculations mentioned above shall be replaced with the equity ratio attributable to owners of the parent company in the balance sheet.

-129-

III. 2020 Audit Committee's audit report on statement of final accounts

APEX SCIENCE & ENGINEERING CORP. Audit Committee's Audit Report

The Board of Directors has prepared and submitted the Company's 2020 Business Report, Financial Statements (including consolidated financial statements) and the proposed Profit Distribution Table, of which the Financial Statements (including consolidated financial statements) have been audited and certified by the independent CPAs, Liao, Fu-Ming and Chen, Chin-Change, of PricewaterhouseCoopers Taiwan, and an audit report has been issued. The above statements and reports submitted by the Board of Directors have been examined and reviewed by the Audit Committee, and no irregularities were found. According related provisions in the Securities and Exchange Act and the Company Act, we hereby submit this report.

Best Regards

2021 Regular Shareholders’ Meeting of the Company

APEX SCIENCE & ENGINEERING CORP.

Convener of Audit Committee: HSIAO, SHENG-HSIEN

March 25, 2021

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IV. Parent company only financial report duly audited by CPAs in the most recent fiscal year

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholders of Apex Science & Enginerring Corp.

Opinion

We have audited the accompanying parent company only balance sheets of Apex Science & Enginerring Corp. as at December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of Apex Science & Enginerring Corp. as at December 31, 2020 and 2019, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the parent company only Financial Statements section of our report. We are independent of Apex Science & Enginerring Corp. in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

-131-

Key audit matters for Apex Science & Enginerring Corp. parent company only financial statements of the current period are stated as follows:

Recognition of construction revenue

Description

For accounting policy on revenue recognition, accounting estimates and related details of revenue, please refer to note 4(25), 5(2) and 6(20).

The Group is primarily engaged in construction-related business, and construction revenue is recognised based on the percentage of completion during the contract period. The percentage of completion will be calculated based on the actual cost in financial period-end in proportion to estimated total contract cost. The estimated total contract costs were based on owner’s plans, considering the changes in construction scaled caused by additional or less work, and the price fluctuations in the recent market to estimate the contract work, overhead and relevant costs. As the estimate of total cost affects the stage of completion and the recognition of construction revenue, the complexity of aforementioned total cost usually involves subjective judgement and contains a high degree of uncertainty, thus we consider recognition of construction revenue a key audit matter.

How our audit addressed the matter:

We performed the following audit procedures on the above key audit matter:

Obtained an understanding and assessed the reasonableness of policies and procedures which were used to recognise construction revenue.
Obtained the newly added construction contract list for current fiscal year, and check whether the total contract price is equal to construction revenue, selected samples of estimated total cost which is approved by project management department in order to check whether the calculation basis adopted in the estimated total cost is the same with the calculation of percentage of completion.
Verified the related supporting documents of current supplementary (subtractive) construction in order to check that changes in the estimated total cost were recognised appropriately.
Obtained the details of current incurred cost, selected samples on current incurred cost and tracing them to related vouchers, confirmed that current input cost have been accounted for appropriately, and examined the accuracy of percentage of completion.

-132-

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing Apex Science & Enginerring Corp. ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate Apex Science & Enginerring Corp. or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including Audit Committee, are responsible for overseeing Apex Science & Enginerring Corp. financial reporting process.

Auditor’s responsibilities for the audit of the parent company only financial statements

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

-133-

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Apex Science & Enginerring Corp. internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Apex Science & Enginerring Corp. ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Apex Science & Enginerring Corp. to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the company audit. We remain solely responsible for our audit opinion.

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

-134-

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Liao, Fu-Ming Chen, Ching Chang For and on behalf of PricewaterhouseCoopers, Taiwan March 25, 2021

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

-135-

APEX SCIENCE & ENGINERRING CORP.

PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Assets	December 31, 2020 AMOUNT % � �� � �� � �� � �� � �� � �� � �� �� �� �� �� � �� �� �� �� �� � �� � �� � �� � �� � �� � �� � �� �� � �� ��	December 31, 2019	December 31, 2019
	AMOUNT � �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� � ��	AMOUNT � �� �� �� � �� �� �� �� �� �� �� �� �� �� � �� �� �� �� � ��	%
Current assets 1100 Cash and cash equivalents 1140 Current contract assets 1150 Notes receivable, net 1160 Notes receivable - related parties 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1517 Financial asset at fair value through other comprehensive income-non- current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property - net 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			� � � � � � �� �� � ��
			��
			� � � � � � �
			��
			��

(Continued)

-136-

APEX SCIENCE & ENGINERRING CORP.

PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

					December 31, 2020				December 31, 2019
	Liabilities and equity	Notes			AMOUNT	%			AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(11)		�	��		�	�	��	�
2110	Short-term notes and bills payable	6(12)			��		�		��	��
2130	Current contract liabilities	6(20)			��		�		��	�
2150	Notes payable				��		�		��	�
2170	Accounts payable				��		�		��	�
2180	Accounts payable - related parties	7			��		�		��	�
2200	Other payables				��		�		��	�
2230	Current tax liabilities	6(27)			��		�		�	�
2280	Lease liability - current				��		�		�	�
2300	Other current liabilities	6(13)(14)(15)			��	��			��	��
21XX	Total current liabilities				��	��			��	��
	Non-current liabilities
2530	Bonds payable	6(14)			�		�		��	�
2570	Deferred tax liabilities	6(27)			��		�		��	�
2580	Lease liability - non-current				��		�		�	�
2600	Other non-current liabilities				��		�		��	�
25XX	Non-current liabilities				��		�		��	�
2XXX	Total non-current liabilities				��	��			��	��
	Equity
	Share capital	6(17)
3110	Common stock				��	��			��	��
	Capital surplus	6(18)
3200	Capital surplus				��		�		��	�
	Retained earnings	6(19)
3310	Legal reserve				��		�		��	�
3320	Special reserve				��		�		��	�
3350	Unappropriated retained earnings				��		�		��	�
	Other equity interest
3400	Other equity interest		�		��		��		��	�
3500	Treasury stocks	6(17)	�		��		��		��	��
3XXX	Total equity				��	��			��	��
	Significant Contingent Liabilities and	9
	Unrecognised Contract Commitments
	Significant Events after the Balance	11
	Sheet Date
3X2X	Total liabilities and equity			�	��	��		�	��	��

The accompanying notes are an integral part of these parent company only financial statements.

-137-

APEX SCIENCE & ENGINERRING CORP. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

Items

Year ended December 31
2020
2019
Notes
AMOUNT
%
AMOUNT
%
6(20)
�
��
��
�
��
��
6(4)(25)(26)
�
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��
��
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6(25)(26)
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��
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�
��
�
�
�
�
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6(21)
��
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�
6(22)
��
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6(23)
�
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��
��
�
6(24)
�
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��
6(8)
��
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��
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�
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6(27)
��
��
��
��
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6(7)
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6(28)
�
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��
6(28)
�
��
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4000
Operating revenue
5000
Operating costs
5900
Gross profit
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6450
Expected credit impairment losses
6000
Total operating expenses
6900
Operating profit
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7070
Share of profit of associates and
joint ventures accounted for under
equity method
7000
Total non-operating income and
expenses
7900
Profit before income tax
7950
Income tax benefit (expenses)
8200
Profit for the year
Other comprehensive income
Components of other comprehensive
income that will not be reclassified to
profit or loss
8316
Unrealised gains (losses) from
investments in equity instruments
measured at fair value through other
comprehensive income
8330
Share of other comprehensive
income of associates and joint
ventures accounted for using equity
method, components of other
comprehensive income that will not
be reclassified to profit or loss
Items may be subsequently
reclassified to profit or loss
8361
Exchange differences on translation
8300
Other comprehensive income, net
8500
Total comprehensive income for the
year
Basic earnings per share
9750
Basic earnings per share
Diluted earnings per share
9850
Diluted earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

-138-

										Total		��	��	��	��		��	��	�	��		��	��	��	��		�	�	��		��	��	��		�		��	��
												�								�		�																�
		Other equity interest	Unrealised gains	(losses) from	financial assets	Financial measured at fair	statements value through	translation other	differences of comprehensive	foreign operations income Treasury stocks		�� �� �� ��	� � �	� �� �� � �	� �� �� �		� � �	� � �	� � ��	�� �� �� ��		�� �� �� ��	� � �	�� �� �	�� �� �		� � �	� � �	� � � �		� � �	� � � �	� � � ��		� � �� �		� � �	�� �� �� ��
						Total	unappropriated	retained earnings	(accumulated	deficit)		� ��	��	�	��		�	�	�	� ��		� ��	��	�	��		� ��	� ��	� ��		�	� ��	�		��		�	� ��
		Retained Earnings								Special reserve		� ��	�	�	�		�	�	�	� ��		� ��	�	�	�		�	��	�		�	�	�		�		�	� ��
PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY	(Expressed in thousands of New Taiwan dollars)	Capital Reserves			Difference	between the price Capital Surplus,	for acquisition or changes in	disposal of ownership	subsidiaries and interests in Capital surplus,	carrying amount subsidiaries others Legal reserve		� �� � � � � � ��	� � � �	� � � �	� � � �		�� � � �	� � �� �	� � � �	� �� � � � �� � ��		� �� � � � �� � ��	� � � �	� � � �	� � � �		� � � ��	� � � �	� � � �		� � � �	� �� � �	� � � �		� � � �		�� � � �	� �� � �� � �� � ��
									Share capital - Treasury stock	common stock transactions		� �� � ��	� �	� �	� �		� �	� �	� �� ��	� �� � ��		� �� � ��	� �	� �	� �		� �	� �	� �		� ��	� �	� �		� �		� �	� �� � ��
										Notes	2019	Balance at January 1, 2019	Profit for 2019	Other comprehensive income for the year	Total comprehensive income	Difference between consideration and carrying amount of subsidiaries	acquired or disposed	Unclaimed overdue dividends transferred to capital surplus	Retirement of treasury shares 6(17)	Balance at December 31, 2019	2020	Balance at January 1, 2020	Profit for 2020	Other comprehensive income for the year	Total comprehensive income	Appropriation and distribution of 2019 retained earnings: 6(19)	Legal reserve	Special reserve	Cash dividends	The Company’s stocks held by subsidiaries deemed as treasury stocks	acquiring cash dividends	Changes in ownership interests in subsidiaries	Purchase of treasury stocks 6(17)	Disposal of investments in equity instruments designated at fair value	through other comprehensive income	Difference between consideration and carrying amount of subsidiaries	acquired	Balance at December 31, 2020

-139-

APEX SCIENCE & ENGINERRING CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation (including investment property)
Depreciation on right-of-use assets
Amortisation
Amortisation on right-of-use assets
Deferred selling expenses transferred to
commissions expense
Interest expense
Interest income
Share of profit of associates and joint ventures
accounted for using equity method
Expected credit impairment losses
Changes in operating assets and liabilities
Changes in operating assets
Contract assets
Notes receivable
Notes receivable - related parties
Accounts receivable
Accounts receivable - related parties
Other receivables
Inventories
Prepayments
Other current assets
Changes in operating liabilities
Contract liabilities
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Interest income received
Interest expenses paid
Cash dividends received
Income taxes paid
Net cash flows from operating activities

Year ended December 31
Notes
2020
2019
�
��
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6(9)(10)(25)
��
��
6(25)
��
�
6(25)
��
��
6(25)
��
�
��
�
6(24)
��
��
6(21)
�
��
��
6(8)
�
��
��
6(2)
�
��
�
��
��
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APEX SCIENCE & ENGINERRING CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of investments accounted for using
equity method
Proceeds from disposal of investments accounted
for using equity method
Acquisition of property, plant and equipment
(Increase) decrease in restricted assets
Other non-current assets
Proceeds from disposal of financial assets at fair
value through other comprehensive income
Net cash flows (used in) from investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Unclaimed overdue dividends transferred to capital
surplus
Proceeds from short-term borrowings
Repayments of short-term borrowings
Decrease in short-term notes and bills payable
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayment of principal portion of lease liabilities
Cash dividends paid
Purchase of treasury shares
Net cash flows used in financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Year ended December 31
Notes
2020
2019
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The accompanying notes are an integral part of these parent company only financial statements.

-141-

APEX SCIENCE & ENGINERRING CORP. NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY, ORGANISATION AND BUSINESS

Apex Science & Engineering Corp. (collectively referred to herein as the “the Company”) was incorporated on August 9, 1976, formerly “Apex Engineering Corp” and was renamed as “Apex Science & Engineering Corp.” in 2001. The Company engaged in mechanical engineering, instrument electric engineering, environmental engineering, manufacture and sale of electronic products and being commissioned in houses and business buildings. The Company has been a listed company since November 1995.

2. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These parent company only financial statements were authorized for issuance by the Board of Directors on March 25, 2021.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

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

New Standards,InterpretationsandAmendments	Effective date by International Accounting StandardsBoard
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

Note�Earlier application from January 1, 2020 is allowed by FSC.

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

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

the Company.

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

New Standards,InterpretationsandAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 4, ‘ Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘ Interest Rate Benchmark Reform - Phase 2’	January 1, 2021 January 1, 2021

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(2) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

New Standards,InterpretationsandAmendments

Effective date by
International Accounting
StandardsBoard

Amendments to IFRS 3, ‘Reference to the conceptual framework’
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, ‘Insurance contracts’
Amendments to IAS 1, ‘Classification of liabilities as current or non-
current’
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’
Amendments to IAS 16, ‘Property, plant and equipment: proceeds
before intended use’
Amendments to IAS 37, ‘ Onerous contracts - cost of fulfilling a
contract’
Annual improvements to IFRS Standards 2018–2020

January 1, 2022
To be determined by
International Accounting
Standards Board
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2022
January 1, 2022
January 1, 2022

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

4. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements

are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

The parent company only financial statements of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

(2) Basis of preparation
A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:
- (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
- (b) Financial assets at fair value through other comprehensive income financial assets measured at fair value.
B. The preparation of financial statements in compliance with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

(3) Currency translation

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

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair

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value are translated using the historical exchange rates at the dates of the initial transactions.

(d) All other foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.
B. Translation of foreign operations

The operating results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
(b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

(4) Classification of current and non-current items

A. The operating period of engineering project and the Company acts as agent of land development were usually longer than one year, together with assets and liabilities of the building and construction contracts and land agency business were divided into current and non-current according to operating period, other items of assets and liabilities were divided based on the standard of one year.
B. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realised within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.
C. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be settled within twelve months from the balance sheet date;

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(d) Liabilities for which the repayment date cannot be deferred unconditionally for at least twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Loans and receivables Accounts and notes receivable

A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(6) The Company acts as agent of land development

A. As agent of land development on behalf of government by agreement and responsible for some development and external sale.
B. In the period as agent, the Company paid takings compensation, construction cost, supervision, acceptance and other development expenses on behalf of others. The delegator calculated and paid interest periodically to the Company based on the costs which were paid on behalf of the delegator. The cost accounting of each agent case of land development business (development of industrial area, urban land consolidation and zone expropriation) was based on the development commission agreement and the contractors’ agreement and recognised according to actual construction progress and the cost and expenses which were calculated from the acceptance of construction completion. The Company was commissioned to develop the industrial area. The service agent revenue was recognised periodically according to the proportion of input costs and following conditions:
(a) The contract cost can be reasonably certain.
(b) Except for the expenses paid on behalf of others who will return the expenses certainly, other contract costs can be reasonably estimated.
(c) The collectability of agency fee (service revenue) can be reasonably certain.
C. The development cost was debited as “receivables from agent of land development”, and the land price from land buyer was credited as “other current liabilities-deposits which were received in advance from selling industrial area ”, which shall be wrote off with receivables from agent of land development when the owner pays.

(7) Impairment of financial assets

For debt instruments measured at fair value through other comprehensive income and financial assets at amortised cost, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all

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reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(8) Financial assets at fair value through other comprehensive income

A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:
(a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value. The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(9) Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(10) Lease receivables/ operating leases (lessor)

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(11) Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads. It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(12) Investments accounted for using equity method / associates

A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

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B. Unrealised profit (loss) that occurred from the transactions between the Company and subsidiaries have been offset. The accounting policies of the subsidiaries have been adjusted to be consistent with the Company’s accounting policies.
C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise losses proportionate to its ownership.
D. If changes in shareholdings in subsidiaries do not result in loss of control (transaction with noncontrolling interest), transactions shall be considered as equity transactions, which are transactions between owners. Difference of adjustment of non-controlling interest and fair value of consideration paid or received is recognised in equity.
E. When the Company loses control of a subsidiary, the Company remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Company loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
F. Pursuant to the “Rules Governing the Preparation of Financial Statements by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the consolidated financial statements. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the consolidated financial statements.

(13) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Property, plant and equipment are measured at cost model subsequently. Land is not depreciated.

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Other property, plant and equipment are depreciated using the straight-line method over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change.

The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures	50~55 years
Building improvements	3~10 years
Machinery and equipment	3~8 years
Transportation equipment	5 years
Office equipment	3 years

(14) Leasing arrangements (lessee)�right-of-use assets/ lease liabilities

A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the company . For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. The lease payments include fixed payments less any lease incentives receivable.
C. At the commencement date, the right-of-use asset measured at cost shall comprise the amount of the initial measurement of lease liability.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

(15) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 55 years.

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(16) Impairment of non-financial assets

A. The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.
B. The recoverable amounts of goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the following years.
C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination.

(17) Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(18) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(19) Bonds payable

Ordinary corporate bonds issued by the Company are initially recognized at fair value, net of transaction costs incurred. Ordinary corporate bonds are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is accounted for as the premium or discount on bonds payable and presented as an addition to or deduction from bonds payable, which is amortized in profit or loss as an adjustment to the ‘finance costs’ over the period of bond circulation using the effective interest method.

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(20) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(21) Employee benefits

A. Salaries and other short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service.

B. Pensions

Defined benefit plan

(a) Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Company uses interest rates of government bonds (at the balance sheet date) instead.
(b) Actuarial gain (loss) arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise.
(c) If the service cost in the prior year was vested immediately, related expenses was immediately recognised as profit or loss. Otherwise, related expenses was recognised as profit or loss with straight line method in the average vested period.

C. Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Company recognises expense as it can no longer withdraw an offer of termination benefits or it recognises relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

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D. Employees’ compensation and directors’ and supervisors’ remuneration

Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

(22) Income taxes
A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally

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enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

(23) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(24) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(25) Revenue recognition

A. Sales of goods
(a) Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.
(b) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
B. Land development and resale
(a) The Company develops and sells residential properties. Revenue is recognised when control over the property has been transferred to the customer. The properties have generally no alternative use for the Company due to contractual restrictions. However, an enforceable right to payment does not arise until legal title has passed to the customer. Therefore, revenue is recognised at a point in time when the legal title has passed to the customer.

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(b) The revenue is measured at an agreed upon amount under the contract. The consideration is due when legal title has been transferred. While deferred payment terms may be agreed in rare circumstances, the deferral never exceeds twelve months. The transaction price is therefore not adjusted because the contract does not include a significant financing component.
C. Incremental costs of obtaining a contract

The Company recognises an asset (shown as ‘other non-current assets’) the incremental costs (mainly comprised of sales commissions) of obtaining a contract with a customer if the Company expects to recover those costs. The recognised asset is amortised on a systematic basis that is consistent with the transfers to the customer of the goods or services to which the asset relates. The Company recognises an impairment loss to the extent that the carrying amount of the asset exceeds the remaining amount of consideration that the Company expects to receive less the costs that have not been recognised as expenses.

D. Construction revenue

(a) The Company provides engineer construction services. Revenue from providing services is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. This is determined based on the actual cost relative to the total cost. Some contracts’ price may change from allowances or similar items, only when the future uncertainty was eliminated, the accumulated amount which was recognised and highly will not incur significant reversal will be listed in the transaction price. The customer pays at the time specified in the payment schedule. If the services rendered exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.
(b) The Company’s estimate about revenue, costs and progress towards complete satisfaction of a performance obligation is subject to a revision whenever there is a change in circumstances. Any increase or decrease in revenue or costs due to an estimate revision is reflected in profit or loss during the period when the management become aware of the changes in circumstances.

E. Service revenue

(a) The Company provides land development agent services. Revenue from providing services is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. Because the Company developed, plan and managed industrial area on behalf of the government. Services content is determined based on the supervised actual labour hours spent relative to the total expected labour hours.

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(b) The Company provided land development agent service which was commissioned some development cases by the government and was responsible for external sales. This was identified as a default obligation which was satisfied with time. The Company recognised revenues based on the proportion of input costs relative to total cost.
(c) The Company’s estimate about revenue, costs and progress towards complete satisfaction of a performance obligation is subject to a revision whenever there is a change in circumstances. Any increase or decrease in revenue or costs due to an estimate revision is reflected in profit or loss during the period when the management become aware of the changes in circumstances.
(d) Please refer to Note 4(8) for the recognition of related revenue,

(26) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Company’s chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The related information is addressed below:

(1) Critical judgements in applying the Company’s accounting policies

None.

(2) Critical accounting estimates and assumptions

Revenue recognition

The Company considers the projects’ specifications and other objective factors in estimating the total project completion cost. The recognised revenue is calculated based on the percentage of the input cost, which the Company regularly assesses the reasonableness. Effects of changes in industry environment and construction status may also affect the total estimated project completion cost and further affect the Company’s revenue recognition.

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6. Details of Significant Accounts

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand and revolving funds Checking accounts deposits Demand deposits	December31,2020 1,555 $ 40,028 137,314 178,897 $	December31,2019
		1,517 $ 26,340 75,641
		103,498 $

A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. The Company’s restricted cash and cash equivalents has been classified to other current assets. Please refer to Note 8 for details of pledged collaterals.

(2) Notes and accounts receivable

Notes receivable Accounts receivable Less: Allowance for bad debts	December31,2020 1,578 $ 491,366 7,017) ( 485,927 $	December31,2019
		4,462 $ 340,736 4,918) (
		340,280 $

A. The Company does not hold any collateral.
B. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).
C. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:
A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:

Not past due 1~120 days past due Over 121 days past due	December31,2020 485,512 $ 1,779 5,653 492,944 $	December31,2019
		333,165 $ 6,148 5,885
		345,198 $

The above ageing analysis was based on past due date.

D. As of December 31, 2020 and 2019, accounts and notes receivable were all from contracts with customers. As of January 1, 2019, the balance of receivables from contracts with customers amounted to $160,773.

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(3) Other receivables

Land development receivables Interest receivable Other non-operating receivables, others	December31,2020 1,908,352 $ 31 1,747 1,910,130 $	December31,2019
		930,140 $ 25 12,612
		942,777 $

A. Land development agent receivable was generated from the contract “Chiayi County Machouhou Industry Park Development Project ” which was entered into by the Company with Chiayi County Government in May 2013. The Company was commissioned to develop industrial area, the development period was 4 years starting from the date entered into the contract. Additionally, in October 2018, the Company entered into a contract “Chiayi County Machouhou Industry Park 2nd Precision Development Project” with Chiayi County Government and was commissioned to develop industrial area. The development period was 6 years starting from the date entered into the contract.
(a) The details of the land development agent receivable was as follows:

Chiayi County Machouhou Industry Park Development Project Chiayi County Machouhou Industry Park 2nd Precision Development Project	December 31,2020 587,269 $ 1,321,083 1,908,352 $	December 31,2019 556,117 $ 374,023 930,140 $	December31,2020 Accumulated and recognised Servicerevenue 377,269 $ 76,766 454,035 $	Principalunit
				Chiayi County Government "

(b) For the years ended December 31, 2020 and 2019, changes in land development agent receivable were as follows:

Year ended December31,2020 Chiayi County Machouhou Industry Park Development Project Chiayi County Machouhou Industry Park 2nd Precision Development Project	Equity at beginning of period 556,117 $ 374,023 930,140 $	Addition 31,152 $ 947,060 978,212 $	Recovered - $ - - $	Outstanding balance
				587,269 $ 1,321,083
				1,908,352 $

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Year ended December31,2019 Chiayi County Machouhou Industry Park Development Project Chiayi County Machouhou Industry Park 2nd Precision Development Project	Equity at beginning of period 237,950 $ - 237,950 $	Addition 318,167 $ 374,023 692,190 $	Recovered - $ - - $	Outstanding balance
				556,117 $ 374,023
				930,140 $

B. Land development agent receivable was pledged to banks as collateral, please refer to Note 8 for details.
C. For the years ended December 31, 2020 and 2019, the Company recognised capitalisation of interest from land development agent receivable from payments on behalf of others to write off interest expenses in the amount of $6,275 and $0, respectively.

(4) Inventories

Merchandise inventory Finished goods Semi-finished goods Work in progress Raw materials Buildings and land held for sale Lands wait for building Construction in progress Prepayment for land purchases Subtotal Less: Allowance for valuation loss ( Total	December31,2020 10,546 $ 10,455 11,732 2,426 9,480 325,035 1,338 1,200 443,020 815,232 8,644) ( 806,588 $	December31,2019 14,472 $ 8,700 8,561 3,685 14,756 397,784 838 1,873,541 - 2,322,337 10,021) 2,312,316 $

A. The cost of inventories recognised as expense for the year:

Cost of goods sold Cost of building Cost of engineering sales Total	2020 2019 114,698 $ 136,705 $ 2,243,037 3,514,818 1,122,692 506,952 3,480,427 $ 4,158,475 $ YearendedDecember31
	2020 114,698 $ 2,243,037 1,122,692 3,480,427 $

B. Some inventories were pledged as collaterals for bank borrowings, please refer to Note 8 for details.

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C. For the years ended December 31, 2020 and 2019, the amounts of interest capitalisation on inventory were $4,953 and $39,496, please refer to Note 6(24) for details.
D. On August 16, 2019, the Company entered into a property trading contract with Jean Pacific Development Co., Ltd. and sold lands and structures on the lands on Xinxing Rd., Banqiao Dist., New Taipei City (shaown as inventory-lands wait for building and construction in progress in the total amount of $3,369,506) to Jean Pacific Development Co., Ltd., the total transaction amount was $3,706,318. On November 4, 2019, the transference of property has been completed. As of December 31, 2020, the aforementioned proceeds from trading contract was $3,521,003. In January 2021, the Company has received some of the final proceeds of the trading contract in the amount of $92,658.

(5) Prepayments

(5)	Prepayments
(6)	Other current assets Prepayments for construction in progress Excess business tax paid / overpaid VAT Others Guarantees for jointly building Guarantees for construction and bid bonds Restricted assets Others	December31,2020 69,121 $ - 21,630 90,751 $ December31,2020 415,000 $ 4,831 1,280,599 853 1,701,283 $	December31,2019
			268,033 $ 42,423 39,131
			349,587 $
			December31,2019
			415,000 $ 2,388 1,089,135 3,172
			1,509,695 $

A. Guarantees for jointly building
(a)In April 2015, the Company has entered into a jointly building contract with the owner of lands on Xinxing Sec., Banqiao Dist., New Taipei City. As of December 31, 2020 and 2019, the Company has paid the performance gurantees for jointly guarantee to the owner of lands both in the amounts of $400,000.

(b)Please refer to Note 7(2)H for details.

B. Among the restricted assets, as of December 31, 2020 and 2019, the amounts of $769,531 and $724,438 was for land development agent business, receiving the land bid bonds which were deposited in the trust account by the buyer and the price of land, remaining was time deposits pledged as collaterals by the Company for the banks guarantees and borrowing facilities and reserve account.

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(7) Financial assets at fair value through other comprehensive income

Items Non-current items: Equity instrument Listed stocks Unlisted stocks Revaluation – gross Total	December31,2020 - $ 14,727 14,727 8,327) ( ( 6,400 $	December31,2019 3,403 $ 14,727 18,130 8,048) 10,082 $

A. The Company has elected to classify security investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $6,400 and $10,082 as at December 31, 2020 and 2019, respectively.
B. Because of the adjustment of investment strategy, for the year ended December 31, 2020, the Company sold the security investment in the amount of $5,264, and transferred accumulated gain on disposal as retained earnings in the amount of $1,861.
C. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

. Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income Cumulative gains (losses) reclassified to retained earnings due to derecognition	YearendedDecember31
	2020 2019 1,581 $ 3,510) ($ 1,861 $ - $

D. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

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(8) Investments accounted for using equity method

A.�he details of the subsidiaries recognized by the equity method are as follows: 2020 2019 At January 1 514,547 $ 498,596 $ Addition of investments accounted for using equity method 34,260 410 Disposal of investments accounted for using equity method - 10,683) ( Earnings distribution of investments accounted for using equity method 52,286 43,808 Share of profit or loss of investments accounted for using equity method 5,202) ( 10,264) ( The Company’s stocks held by subsidiaries deemed as treasury stocks acquiring cash dividends 12,192 - Changes in capital surplus 1,908 67 Changes in retain earing 4,960) ( - Changes in other equity items (Note 6(34)) 2,931 7,387) ( At December 31 607,962 $ 514,547 $ December31,2020 December31,2019 Chang Ji Construction Co., Ltd. 413,411 $ 341,793 $ Reinforce Energy Co. Ltd. 180,265 153,192 Shin Ding Engineering Construction Co., Ltd. 14,286 19,562 607,962 $ 514,547 $	2020	2019

A.�he details of the subsidiaries recognized by the equity method are as follows:

B. Subsidiaries

(a) The basic information of the subsidiaries that are material to the Company is as follows:

Companyname Chang Ji Construction Co., Ltd. Reinforce Energy Co. Ltd.	Principal place ofbusiness Taiwan British Virgin Islands	December 31, December 31, 2020 2019 90.53% 85.59% 100% 100% Shareholdingratio	Nature of relationship Subsidiary "	Methods of measurement
		December 31, 2020 90.53% 100%
				Equity method "

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(b) The summarised financial information of the subsidiaries that are material to the Company is as follows:

Balance sheets

Chang Ji Construction Co., Ltd.

Current assets Non-current assets Current liabilities Non-current liabilities Total net assets Share in associate's net assets Carrying amount of the associate

	December	31,2020		December	31,2019
	$	1,700,337		$	1,662,428
		390,926			360,515
(		1,178,046)	(		1,206,795)
(		42,957)	(		15,000)
	$	870,260		$	801,148
	$	787,846		$	685,703
	$	413,411		$	341,793

Current assets Non-current assets Total net assets Share in associate's net assets Carrying amount of the associate		ReinforceEnergy Co.Ltd.	ReinforceEnergy Co.Ltd.	ReinforceEnergy Co.Ltd.
		December31,2020		December31,2019
		245 $ 180,020 180,265 $ 180,265 $ 360,530 $		333 $ 152,859 153,192 $ 153,192 $ 153,192 $

Statements of comprehensive income

Chang Ji Construction Co., Ltd.

Revenue Profit for the period from continuing operations Other comprehensive income, net of tax Total comprehensive income Dividends received from associates

	Yearended	December	31
	2020	2019
$	2,051,761	$	1,043,730
$	52,413	$	13,596
	-	(	1,253)
$	52,413	$	12,343
$	14,062	$	-

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Reinforce Energy Co. Ltd.

Revenue Profit for the period from continuing operations Other comprehensive income, net of tax Total comprehensive income	YearendedDecember31,2020	YearendedDecember31,2019	YearendedDecember31,2019
	- $ 24,141 $ 2,931) ( 21,210 $		- $ 21,867 $ 6,319) ( 15,548 $

C. Please refer to Note 4(3) in the consolidated financial statements as of and for the year ended December 31, 2020 for the information regarding the Company’s subsidiaries.
D. In May 2019, BRIGHT GLORY CORPORATION started the liquidation process which was completed in July 2019 and collected the proceeds of $900.
E. On August 13, 2019, LINKPLUS OPTOELECTRONICS INC. has been approved to dissolve and the dissolution was registered. The liquidation process has been completed in August 2020, and the proceeds of $9,820 has been collected.

(9) Property, plant and equipment

January 1, 2020 Cost Accumulated depreciation and impairment 2020 At January 1 Additions Reclassifications Depreciation expense At December 31 December 31, 2020 Cost Accumulated depreciation and impairment		Land		Buildings and structures		Machinery and equipment	Transportation Equipment	Transportation Equipment		Office equipment		Total
		60,004 $ - 60,004 $ 60,004 $ - 3,855 - 63,859 $ 63,859 $ - 63,859 $	( ( (	38,750 $ 11,214) 27,536 $ 27,536 $ - 7,988 863) 34,661 $ 46,738 $ 12,077) 34,661 $	( ( (	435 $ 331) 104 $ 104 $ - - 65) 39 $ 435 $ 396) 39 $	( ( (	4,184 $ 3,852) 332 $ 332 $ 91 - 303) 120 $ 4,275 $ 4,155) 120 $	( ( (	3,386 $ 1,019) 2,367 $ 2,367 $ - - 865) 1,502 $ 3,386 $ 1,884) 1,502 $	( ( (	106,759 $ 16,416) 90,343 $ 90,343 $ 91 11,843 2,096) 100,181 $ 118,693 $ 18,512) 100,181 $

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January 1, 2019 Cost Accumulated depreciation and impairment 2019 At January 1 Additions Depreciation expense At December 31 December 31, 2019 Cost Accumulated depreciation and impairment		Land		Buildings and structures		Machinery and equipment	Transportation Equipment		Office equipment		Total
		60,004 $ - 60,004 $ 60,004 $ - - 60,004 $ 60,004 $ - 60,004 $		38,995 $ 10,574) ( 28,421 $ 28,421 $ - 885) ( 27,536 $ 38,750 $ 11,214) ( 27,536 $		435 $ 266) ( 169 $ 169 $ - 65) ( 104 $ 435 $ 331) ( 104 $	4,184 $ 3,155) ( 1,029 $ 1,029 $ - 697) ( 332 $ 4,184 $ 3,852) ( 332 $	1,581 $ 608) ( 973 $ 973 $ 1,966 572) ( 2,367 $ 3,386 $ 1,019) ( 2,367 $			105,199 $ 14,603) ( 90,596 $ 90,596 $ 1,966 2,219) ( 90,343 $ 106,759 $ 16,416) ( 90,343 $

A. For the years ended December 31, 2020 and 2019, no interest expense of property, plant and equipment was capitalised.
B. For the year ended December 31, 2020, information about the transference into property, plant and equipment is provided in Note 6(10)C.
C. Refer to Note 8 for further information on property, plant and equipment pledged to others as collateral.

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(10) Investment property

2020 At January 1 Land 59,235 $ Buildings and structures 40,008 Accumulated depreciation 21,044) ( 78,199 $ At January 1 78,199 $ Reclassifications 11,843) ( Depreciation expense 686) ( ( At December 31 65,670 $ At December 31 Land 55,380 $ Buildings and structures 24,584 Accumulated depreciation 14,294) ( ( 65,670 $	2019 59,235 $ 40,008 20,358) ( 78,885 $ 78,885 $ - 686) 78,199 $ 59,235 $ 40,008 21,044) 78,199 $

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the year	YearendedDecember31	YearendedDecember31
	2020 1,511 $ 686 $	2019
		2,521 $
		686 $

B. The fair value of the investment property held by the Company as at December 31, 2020 and 2019 was $99,520 and $115,516, respectively, which was valued by independent valuers. Valuations were made using the income approach. According to the difference estimation of its reproduction cost, nature of usage, use situation now, use benefit, maintenance, depreciation and other factors.
C. For the year ended December 31, 2020, the Company transferred some investment property into property, plant and equipment which amounted to $11,843 based on nature.
D. Refer to Note 8 for further information on investment property pledged to others as collateral.

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(11) Short-term borrowings

Type of Borrowings Bank borrowings Secured borrowings Unsecured borrowings Type of Borrowings Bank borrowings Secured borrowings Unsecured borrowings	December31,2020 245,918 $ 142,854 388,772 $ December31,2019 418,223 $ 138,783 557,006 $	Interest raterange Collateral 1.41%-2% Pledged time deposits, allowance account, inventory, land, buildings and structures (shown as property, plant and equipment) and treasury shares. " None Interest raterange Collateral 0.49%-2.29% Pledged time deposits, allowance account, inventory, land, buildings and structures (shown as property, plant and equipment) and treasury shares. " None	Collateral

Details of collateral for short-term borrowings are provided in Note 8.

(12) Short-term notes and bills payable

Commercial paper payable Interest rate range	December31,2020 25,000 $ 0.42%	December31,2019
		1,306,400 $
		0.67%-1.35%

Aforementioned short-term notes and bills were issued by financial institutes, please refer to Note 8 for details of collaterals.

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(13) Other current liabilities

Deposit received in advance from disposal of industrial area Advance receipts from customers Current portion Current portion or exercise of put options Others	December31,2020 1,046,789 $ - 788,180 498,957 68,281 2,402,207 $	December31,2019
		1,046,789 $ 2,651 - - 5,430
		1,054,870 $

A. Deposit received in advance from disposal of industrial area and bid bonds from biding lands were from the Company’s land development agent business which was commissioned by Chiayi County Government, for lands bid based on “Chiayi County Machouhou Industry Park Development Project”, please refer to Note 6(3) for details of external customers’ proceeds for land purchase and bid bonds and related proceeds receivable from land development agent.
B. Please refer to Note 6(14) for details of current portion or exercise of put options.
C. Please refer to Note 6(15) for details of long-term borrowings, current portion.
(14) Bonds payable

December31,2020 Bonds payable 500,000 $ Less: Discount on bonds payable 1,043) ( ( 498,957 Less: Current portion or exercise of put options 498,957) ( - $	December31,2019
	500,000 $ 2,293
	497,707 -
	497,707 $

A. The competent authority has approved the Company’s first time raising and issuance of domestic secured corporate bonds. The bonds are with a total issuance amount of $500,000 thousand dollars and a coupon rate of 1.15%, cover a 5-year period of issuance and listed on the Taiwan Over-The-Counter Securities Exchange with a circulation period from November 11, 2016 and November 11, 2021. The common corporate bonds were repaid at once by cash at face value when matured. The pledged method was performed with guarantee of corporate bonds based commissioned guarantee contract by Taiwan Cooperative Bank.
B. Aforementioned corporate bonds payable was guaranteed and issued by financial institutes. Please refer to Note 8 for details of collateral.

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- (15) Long term borrowings

Borrowing period and Type of Borrowings repayment term Bank’s unsecured borrowings Taiwan Cooperative Bank Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Taiwan Business Bank Co., Ltd. Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Chang Hwa Commercial Bank, Ltd. Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Agricultural Bank of Taiwan Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Hua Nan Commercial Bank, Ltd. Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Land Bank of Taiwan Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Less: Current portion	Interest rate range 3.17% 3.17% 3.17% 3.17% 3.17% 3.17%	Collateral " " " " " "	December 31,2020 227,830 168,580 168,580 111,610 55,790 55,790 788,180 788,180) ( - $

In October 2019, the Company entered into a contract for a syndicated borrowing with bank group, including Taiwan Cooperative Bank, Chang Hwa Commercial Bank, Ltd., Taiwan Business Bank Co., Ltd. The borrowing was a execution fund for “Chiayi County Machouhou Industry Park 2nd Precision Development Project” which was signed in October 2018. Total syndicate facility was $6,780,000 (including guarantee amount of $780,000 and borrowing amount of $6,000,000). The credit term was 6 years starting from the date of first drawn. As of December 31, 2020, the Company has drawn performance guarantee amount of $755,800 and borrowing amount of $788,180. The Company’s chairman agreed individually to serve as joint guarantor of the credit borrowing. In the term of the credit borrowing, the Company’s primarily promised items were as follows:

A. The financial ratios in the annual consolidated financial statements shall be maintained as follows:

Tangible equity interest: shareholders’ equity net of intangible assets shall not lower than NT$ 2.5 billion.

B. The development case shall complete the first announce for selling or registration in 2 years starting from the date of first drawn.
C. In 2 years starting from the date of the first announce for selling or registration, the sales rate shall reach 25% (including).
D. In 2 years starting from the date of the first announce for selling or registration, the sales rate shall reach 35% (including).

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E. In the term of the credit borrowing, if there are shareholder’s payment on behalf of the Company, the Company shall obtain the agreement of the shareholder in document which agrees that if the credit borrowing has not been repaid, the Company can not repay shareholder’s payment on behalf of the Company. The interest rate of shareholder’s payment on behalf of the Company can not higher than the interest rate of the credit borrowing at current or after. However, if shareholder’s payment on behalf of the Company is invested in the Company, this is not restricted.

For the years ended December 31, 2020 and 2019, the Company has not violated aforementioned promised items in both years.

(16) Pensions

Defined contribution plan

A. Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
B. The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2020 and 2019 were $4,745 and $5,706, respectively.
(17) Common stock
A. As of December 31, 2020, the Company’s authorised capital was $2,500,000, and the paid-in capital was $2,287,135 with a par value of $10 (in dollars) per share, totaling 228,714 thousand shares. Information of movements in the number of the Company’s ordinary shares outstanding are as follows (thousand shares):

At January 1 Purchase of treasury shares At December 31	2020 (Note) 228,714 2,525) ( 226,189	2019 (Note)
		228,714 -
		228,714

Note: The number of the parent company’s shares outstanding, including shares held by the subsidiaries

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B. Treasury shares
(a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

Name of company holdingthe shares	December	31, 2020
	No. ofshares 2,525 thousand shares 28,125 thousand shares December	Bookvalue
The Company Subsidiaries- Chang Ji Construction Co., Ltd. Total Name of company holdingthe shares		26,130 $ 255,837
		281,967 $
		31,2019
	No. ofshares 28,125 thousand shares	Bookvalue
Subsidiaries- Chang Ji Construction Co., Ltd.		255,837 $

(b) On November 12, 2015, the Company’s Board of Directors approved to transfer shares to employees and repurchased treasury shares in the amount of 10,000 thousand. As of January 2016 (fulfill a period of execution), the treasury shares which were repurchased totaling 4,291 thousand shares with a total amount of $44,095. As of January 29, 2019, because there were treasury shares which has not been transferred when the execution period was fulfilled, 4,291 thousand treasury shares were canceled and reduced the capital. The number of outstanding shares was 228,714 thousand shares after the capital reduction.
(c) On March 27, 2020, the Company’s Board of Directors approved to repurchased 6,000 thousand treasury shares. As of May 29, 2020 (fulfill a period of execution), the Company repurchased 2,525 thousand treasury shares in total with a total amount of $26,130.
(d) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.
(e) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.
(f) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

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(g) Information about collaterals is provided in Note 8(2).

(18) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paidin capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(19) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The remainder, if any, to be retained or to be appropriated shall be resolved by the stockholders at the stockholders’ meeting.
B. The Company’s dividend policies were as follows: the Company’s industrial life cycle was in growth stage, in order to match with the Company’s long-term financial plan for sustainable operation, the Company’s dividend policies adopted residual dividend policy. According to the Company’s capital budget plan, the stock dividend shall be distributed first to retain demand capital, if any, shall be distributed as cash dividend. If cash dividend can be distributed in the current year, the cash dividend shall be adjusted to not lower than 5% of total dividend.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

D. Special reserve

(a) Special reserve (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
(b) According to Jin-Guan-Zheng-Fa-Zi No.1010047490, the accounting of public issued company invested in the subsidiary who hold the shares of parent shall follow Securities and Exchange Act paragraph 1 of Article 41. Thus, listed and emerging companies shall not distribute special reserve at the same amount which was calculated from the difference between the market price and carrying amount of shares which was parent company’s shares held by the subsidiary and the shareholding ratio. Afterward, if the market price has reversed, listed and emerging company shall reverse special reserve based on the shareholding ratio.

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E. Appropriation of earnings

The appropriations of earnings of years 2019 and 2018 as resolved by the shareholders at their meetings on June 19, 2020 and June 24, 2019 are as follows:

Year ended December 31

Legal surplus Special reserve Cash dividend Total	Dividends per Amount share (indollars) 17,544 $ 9,222 114,357 0.50 $ 141,123 $ 2019	2018	2018
	Amount 17,544 $ 9,222 114,357 141,123 $	Amount - $ - - - $	Dividends per share (indollars)
			- $

F. The appropriation of 2020 earnings was resolved by the Board of Directors on March 25, 2021. The above appropriation of earnings of year 2020 is yet to be resolved by the shareholders in 2021.

Related distribution of earnings were as follows:

			YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
					Dividends per
			Amount	share (indollars)
Legal surplus		$	31,520
Special reserve
reversed	(		2,652)
Cash dividend			180,951	$	0.80
Total		$	209,819

As of March 25, 2021, the aforementioned proposal for 2020 earnings distribution has not yet been resolved by the shareholders.

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(20) Operating revenue

A. Disaggregation of revenue from contracts with customers

The Company derives revenue from the recognition of goods and services over time and at a point in time in the following major product lines:

Year ended December 31, 2020 Timing of revenue recognition At a point in time Over time Year ended December 31, 2019 Timing of revenue recognition At a point in time Over time	Sales revenue 131,713 $ - 131,713 $ Sales revenue 171,201 $ - 171,201 $	Building revenue 2,705,394 $ - 2,705,394 $ Building revenue 3,855,495 $ - 3,855,495 $	Construction revenue - $ 989,344 989,344 $ Construction revenue - $ 446,229 446,229 $	Service revenue - $ 79,256 79,256 $ Service revenue - $ 24,368 24,368 $	Total
					2,837,107 $ 1,068,600
					3,905,707 $
					Total
					4,026,696 $ 470,597
					4,497,293 $

B. Contract assets and liabilities

(a) The Company has recognised the following revenue-related contract assets and liabilities:

Contract assets: Contract assets-proceeds from building contract Contract liabilities: Contract liabilities- proceeds from building contract Contract liabilities- proceeds from sale contract Total	December31,2020 215,441 $ December31,2020 96,123 $ 1,530 97,653 $	December31,2019 418,832 $ December31,2019 94,801 $ 318,925 413,726 $	January1,2019
			427,672 $
			January1,2019
			103,112 $ 117,249
			220,361 $

(b) Revenue recognised that was included in the contract liability balance at the beginning of the period

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Revenue recognised that was included in the contract liability balance at the beginning of the period Building pre-sale contract	YearendedDecember31	YearendedDecember31
	2020 302,756 $	2019
		- $

C. The Company contracted with CPC Corporation, Taiwan for “Subsea pipeline replacement project for the second overseas oil unloading baoy of Taoyuan Oil Retinery ”, the construction was delayed due to the climate which was not responsible by anyone, causing disputes on the construction proceeds between both parties, the Company is conciliated with CPC Corporation, Taiwan by Complaint Review Board for Government Procurement now.

(21) Interest income

Interest income
Other income Interest income from bank deposits Other interest income Rental revenue Other income, others	YearendedDecember 31
	2020 2019 865 $ 1,433 $ 10,872 1,921 11,737 $ 3,354 $ YearendedDecember 31	2019
		1,433 $ 1,921
		3,354 $
	2020 2,211 $ 3,501 5,712 $	2019
		2,521 $ 4,291
		6,812 $

(22) Other income

(23) Other gains and losses

Other gains and losses
		YearendedDecember 31
		2020	2019
Foreign exchange losses, net	($	357)	($	822)
Gains on disposals of investments	(	2,130)	(	1,404)
	($	2,487)	($	2,226)

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(24) Finance costs

Finance costs
Interest expenses: Bank borrowings Payment on interest of corporate bond Amortisation of discounts on bonds Others Less: Capitalisation of qualifying assets ( Finance costs	YearendedDecember31
	2020 20,270 $ 5,766 1,250 23 11,228) ( 16,081 $	2019
		56,354 $ 5,750 1,250 1 39,496)
		23,859 $

(25) Expenses by nature

Expenses by nature
Employee benefit expense Depreciation expenses (including investment property) Depreciation expense of right-of- use assets Amortisation charge Amortisation expense of right-of- use assets	YearendedDecember31,2020
	Classified as Operating Costs 59,315 $ - - - -	Classified as Operating Expenses 81,982 $ 2,782 487 1,373 70	Total
			141,297 $ 2,782 487 1,373 70

Employee benefit expense Depreciation expenses (including investment property) Depreciation expense of right-of- use assets Amortisation charge Amortisation expense of right-of- use assets	YearendedDecember31,2019	YearendedDecember31,2019	YearendedDecember31,2019
	Classified as Operating Costs 68,550 $ - - - -	Classified as Operating Expenses 69,686 $ 2,905 - 2,046 -	Total
			138,236 $ 2,905 - 2,046 -

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(26) Employee benefit expense

YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
Classified as Classified as Operating Operating Costs Expenses Total 50,154 $ 65,685 $ 115,839 $ 4,495 4,255 8,750 2,649 2,096 4,745 - 8,237 8,237 2,017 1,709 3,726 59,315 $ 81,982 $ 141,297 $ YearendedDecember 31,2019		Total
		115,839 $ 8,750 4,745 8,237 3,726
		141,297 $
Classified as Operating Costs 55,888 $ 6,358 3,676 - 2,628 68,550 $	Classified as Operating Expenses 55,590 $ 3,658 2,030 6,847 1,561 69,686 $	Total
		111,478 $ 10,016 5,706 6,847 4,189
		138,236 $

A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall not be 8% for employees’ compensation and not higher than 2% for directors’ remuneration.
B. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $26,707 and $21,149, respectively; while directors’ remuneration was accrued at $6,677 and $5,287, respectively. The aforementioned amounts were recognised in salary expenses.

The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 8% and 2% of distributable profit for the year ended December 31, 2020. The employees’ compensation and directors’ and supervisors’ remuneration resolved by the Board of Directors were $26,707 and $6,677, and the employees’ compensation will be distributed in the form of cash.

Employees’ compensation of $21,149 and directors’ remuneration of $5,287 in 2019 as resolved by the Board of Directors were in agreement with those amounts recognized in the 2019 financial statements.

Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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C. As of December 31, 2020 and 2019, the Company had 128 and 144 employees respectively, excluding 5 directors for the both years.
D. The company’s stock has been listed on the stock exchange for trading, so the following information will be disclosed
- (a)For the years ended December 31, 2019 and 2018, the Company’s average employee benefit expenses were $1,082 and $945
- (b)For the years ended December 31, 2019 and 2018, the Company’s average employee wages and salaries were $942 and $802
- (c)Change in average wages and salaries adjustments was 17.46%.
- (d)The Company has set up an audit committee, so there is no supervisory application, and there is no need to disclose supervisors’ remuneration information.
E. The Company's remuneration policy
- (a) The overall salary and remuneration level of employees takes external competitiveness and internal fair trading as important considerations, and can effectively attract and retain talents.
- (b) Through the performance management system, it connects employees' salary and remuneration, provides motivation for employee development, and drives the company's positive development.
- (c) Link the company's long-term and short-term goals, personal investment time, positions held and overall work performance to achieve the purpose of motivating employees.
- (d) Set up a salary and remuneration committee to effectively measure the overall salary and remuneration of the company’s directors and managers.
(27) Income taxes
A. Tax (income) expense

Components of income tax (income) expense:

Current tax: Current tax on profits for the year Tax on undistributed earnings Prior year income tax underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax (income) expenses	YearendedDecember31	YearendedDecember31
	2020 889 $ 1,715 1,679 4,283 19,486) ( 15,203) ($	2019
		1,903 $ - -
		1,903
		60,586
		62,489 $

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B. Reconciliation between income tax (income) expense and accounting profit

			YearendedDecember31	YearendedDecember31
			2020	2019
Tax calculated based on profit before tax and		$	60,090	$	47,584
statutory tax rate (note)
Expenses disallowed and tax exempt income
by tax regulation	(		115,030)	(	7,048)
Increment tax on land value			889		1,903
Temporary differences not recognised as
deferred tax assets	(		1,254)	(	1,693)
Tax losses not recognised as deferred tax
assets	(		34,895)		-
Change in assessment of realisation of
deferred tax assets			71,603		21,743
Tax on undistributed earnings			1,679		-
Prior year income tax under estimate			1,715		-
Income tax (income) expenses	($		15,203)	$	62,489

Note: The basis for computing the applicable tax rate are the rates applicable in the respective countries where the Company entities operate.

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C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

						2020	2020
								Recognised in
								other
					Recognised in		comprehensive
			AtJanuary1			profitor loss		income	At	December 31
Temporary differences:
-Deferred income tax assets:
Unrealised losses on doubtful
debts		$	677		$	-	$	-	$	677
Unrealised loss for market value
decline and obsolete and slow-
moving inventories			2,004	(		275)		-		1,729
Unrealised loss on foreign
investment			4,205	(		3,888)		-		317
Unrealised impairment loss			84			-		-		84
Deferred recognition expenses			7,400	(		7,352)		-		48
Loss carryforward			91,018			29,722		-		120,740
Subtotal			105,388			18,207		-		123,595
-Deferred tax liabilities:
Unrealised exchange gain	(		151)			151		-		-
Currency translation differences	(		3,136)			-		-	(	3,136)
Unrealised gain on foreign
investments	(		11,229)	(		552)		-	(	11,781)
Subtotal	(		14,516)	(		401)		-	(	14,917)
Total	$		90,872		$	17,806	$	-	$	108,678

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2019

2019	2019	2019	2019	2019
Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are a follows: Recognised in Recognised in other comprehensive AtJanuary1 profitor loss income At December 31 Temporary differences: -Deferred income tax assets: Unrealised losses on doubtful debts 677 $ - $ - $ 677 $ Unrealised loss for market value decline and obsolete and slow- moving inventories 2,004 - - 2,004 Unrealised loss on foreign investment 22,731 18,526) ( - 4,205 Unrealised impairment loss 84 - - 84 Deferred recognition expenses 5,364 2,036 - 7,400 Loss carryforward 134,272 43,254) ( - 91,018 Subtotal 165,132 59,744) ( - 105,388 -Deferred tax liabilities: Unrealised exchange gain 251) ( 100 - 151) ( Currency translation differences 6,568) ( 3,432 - 3,136) ( Unrealised gain on foreign investments 6,855) ( 4,374) ( - 11,229) ( Subtotal 13,674) ( 842) ( - 14,516) ( Total 151,458 $ 60,586) ($ - $ 90,872 $ December31,2020
Year incurred 2012 2013 2014 2015 2016 2018 2020	Amount filed/ assessed 47,167 $ 131,026 47,655 37,887 10,737 172,219 331,485 778,176 $	Unused amount 47,167 $ 131,026 47,655 37,887 10,737 172,219 331,485 778,176 $	Unrecognised deferred tax assets - $ - - - - - 174,476 174,476 $	Expiry year 2022 2023 2024 2025 2026 2028 2030

D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

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December 31, 2019

Year incurred 2012 2013 2014 2015 2016 2018	Amount filed/ assessed 47,167 $ 131,026 47,655 37,887 10,737 180,615 455,087 $	Unusedamount 47,167 $ 131,026 47,655 37,887 10,737 180,615 455,087 $		Unrecognised deferred tax assets - $ - - - - - - $	Expiry year
					2022 2023 2024 2025 2026 2028

E. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

Deductible temporary differences	December31,2020 6,311 $	December31,2019
		7,883 $

F. Income tax returns of the Company and subsidiaries, Shin Ding Engineering Consultants Co., Ltd. and Chang Ji Construction Co., Ltd. through 2018 have been assessed and approved by the Tax Authority.

(28) Earnings per share

Earnings per share
Basic earnings per share Profit attributable to the parent Diluted earnings per share Assumed conversion of all dilutive potential ordinary shares Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Year	endedDecember 31,2020
	Amount after tax 315,653 $ - 315,653 $	Weighted average number of ordinary shares outstanding (sharein thousands) 198,925 2,468 201,393	Earnings per share (indollars)
			1.59 $
			1.57 $

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Year	endedDecember 31,2019	endedDecember 31,2019
Amount after tax 175,432 $ - 175,432 $	Weighted average number of ordinary shares outstanding (sharein thousands) 200,589 1,748 202,337	Earnings per share (indollars)
		0.87 $
		0.87 $

(29) Changes in liabilities from financing activities

Long-term
borrowings
Short-term
Short-term
notes and bills
(Long-term
borrowings,
borrowings
payable
currentportion)
January 1, 2020
557,006
$ 1,306,400
$ -
$ Changes in cash flow from
financing activities
168,234)
(
1,281,400)
(
788,180
Changes in other non-cash
items
-
-
-
December 31, 2020
388,772
$ 25,000
$ 788,180
$ Long-term
borrowings
Short-term
Short-term
notes and bills
(Long-term
borrowings,
borrowings
payable
currentportion)
January 1, 2019
1,142,098
$ 3,203,900
$ 80,000
$ Changes in cash flow from
financing activities
585,092)
(
1,897,500)
(
80,000)
(
Changes in other non-cash
items
-
-
-
December 31, 2019
557,006
$ 1,306,400
$ -
$

Bonds payable
(Corporate
bond,
Liabilities from
financing
currentportion)
activities-gross
497,707
$ 2,361,113
$ -
661,454)
(
1,250
1,250
498,957
$ 1,700,909
$ Bonds payable
(Corporate
bond,
Liabilities from
financing
currentportion)
activities-gross
496,457
$ 4,922,455
$ -
2,562,592)
(
1,250
1,250
497,707
$ 2,361,113
$

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7. Related Party Transactions

(1) Significant related party transactions

Company name Relationship with the Company Chang Ji Construction Co., Ltd. Subsidiaries Shin Ding Engineering Construction Co., Ltd. Subsidiaries

(2) Transactions with related parties

A. Operating revenue

(a) The transaction price and payment terms of the Company's sales to related parties are not materially different from those of ordinary customers. The price of the project of the Company’s contracting parties is determined by the negotiation between the two parties; the payment conditions are handled by the monthly settlement method, and there is no major difference with ordinary customers.

(b) The project contract price and payment situation of the Company’s contracting parties are as follows

follows
Chang Ji Construction Co., Ltd.	December	Contract assets 95,787 $ 31,2020	December	31,2019
	Contract price 510,922 $		Contract price 510,922 $	Contract assets
				95,787 $

B. Purchases:

Engineering cost Chang Ji Construction Co., Ltd. Industrial area development cost Chang Ji Construction Co., Ltd. Shin Ding Engineering Construction Co., Ltd.		2020		2019
		186,988 $ 408,704 $ - 408,704 $		318,690 $ 246,243 $ 18,883 265,126 $

The transaction price and payment terms of the company's purchase of goods from related parties are not materially different from those of ordinary customers. The transaction price of the related party's contracting of the company's project is determined by double bargaining; the payment terms are handled by the monthly settlement method, and there is no major difference with ordinary customers.

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C. Receivables from related parties:

December 31, 2020 December 31, 2019

Notes receivable: Chang Ji Construction Co., Ltd. Accounts receivable: Chang Ji Construction Co., Ltd.

$	39,830	$	-
$	19,882	$	23,512

D. Payables to related parties:

Accounts payable: Chang Ji Construction Co., Ltd.

December 31, 2020 December 31, 2019 $ 30,278 $ 58,463

E. Property transactions:

Acquisition of property, plant and equipment:

Chang Ji Construction Co., Ltd.

Year ended December 31,2020	Year ended December 31,2019 - $
90 $

F. Endorsement guarantee
(a) As at December 31, 2020 and 2019,Chang Ji Construction Co., Ltd. provides endorsement guarantees$58,000 and $80,000 for the Company’s Short-term notes and bills payable.
(b) As of December 31, 2020 and 2019, because the Company entered into an outsourcing construction contract, the Company has construction payables which shall be paid in the future in the amount of $164,518 and $236,528, respectively.
G. Lease transactions lessee

The Company leases offices in Xinmin Street, Zhonghe District and Hsing Nan building in Fuxing North Road to Chang Ji Construction Co., Ltd. Rental revenue of $980 and $1,680 were recognised for years ended December 31, 2020 and 2019, respectively.

H. Other current assets

The Company and Chang Ji Construction Co., Ltd. purchased parcels of land nearby for construction project of joint construction and separate sale. As of December 31, 2020 and 2019, the performance guarantees paid to Chang Ji Construction Co., Ltd. were all $15,000, shown as other current assets.

(3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits Post-employment benefits Total	YearendedDecember 31
	2020 34,970 $ 584 35,554 $	2019
		28,224 $ 542
		28,766 $

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8. Pledged Assets

(1) The Company’s assets pledged as collateral are as follows:

Pledgedasset Inventory-buildings and land held for sale Inventory-Construction in progress Other receivables -Land development agent receivable Other current assets -Certificate of deposit -Reserve account -Trust account -Jointly building guarantee, construction guarantee and bid bonds Property, plant and equipment Investment property Other non-current assets -Guarantee deposits paid -Reserve account	December31,2020 December31,2019 286,575 $ 369,444 $ - 1,082,650 1,908,352 930,140 24,305 35,326 414,383 248,135 841,911 805,674 419,831 417,388 97,921 86,810 65,670 78,199 12,150 8,075 - 152,934 4,071,098 $ 4,214,775 $ Bookvalue	Purpose
	December31,2020 286,575 $ - 1,908,352 24,305 414,383 841,911 419,831 97,921 65,670 12,150 - 4,071,098 $
		Guarantee for financing limit and short-term notes and bills payable Guarantee for short-term notes and bills payable Construction guarantee, performance guarantee and guarantee for financing limit Performance guarantee, guarantee for financing limit and bonds payable Performance guarantee -Jointly performance and building guarantee, construction guarantee and bid bonds Guarantee for financing limit Guarantee for financing limit General deposits and for use of golf club card Bonds payable Performance guarantee and guarantee for financing limit

(2) As of December 31, 2020 and 2019, Chang Ji Construction Co., Ltd., pledged 28,125 thousand shares and 22,625 thousand shares of the Company (shown as “treasury share”) for borrowing.

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9. Significant Contingent Liabilities and Unrecognised Contract Commitments

Commitments

Except for the description in Note 6(6) and 7, the Company has significant commitments and contingencies as follows:

A. Guarantee

The Company entered into commission guarantee contract or provided time deposits as collateral for bid bonds, performance guarantee, prepaid guarantee and other construction guarantee which were related with construction contract and commissioned banks to be joint guarantor. As of December 31, 2020, the guarantee amount was $1,427,684.

B. As of December 31, 2020, the Company has unused letters of credit in the amount of $261,447 for purchasing materials and equipments.
C. As of December 31, 2020, because the Company entered into outsourcing construction contract, the Company has construction payables which shall be paid in the future in the amount of $666,173.
D. As of December 31, 2020, the Company entered into pre-sale house and land contracts which has a price of $10,330 with customer and has received $1,530 according to the contracts.
E. As of December 31, 2020, the Company entered into land purchase contracts which has not been transferred with a price of $493,426 and has paid $443,020 according to the contracts.
Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

A. On March 25, 2021, the Company’s Board of Directors resolved the appropriation of 2020 earnings and the amount of employees’ compensation and directors’ remuneration, please refer to Note 6(19)F. and Note 6(26) for details.
B. On January 15, 2021, the Company entered into a contract, “Tainan Chigu Technology Industry Park Precision Development Project”, with Tainan City Government.

12. Others

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt.

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The gearing ratios at December 31, 2020 and 2019 were as follows:

Total borrowings Less: Cash and cash equivalents ( Net debt Total equity Total capital Gearing ratio	December31,2020 1,700,909 $ 178,897) ( 1,522,012 3,054,125 4,576,137 $ 33.26%	December31,2019 2,361,113 $ 103,498) 2,257,615 2,865,307 5,122,922 $ 44.07%

(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets of investments in equity instruments designated at fair value through other comprehensive income: Financial assets at amortised cost Cash and cash equivalents Notes receivable Notes receivable-related parties Accounts receivable-related parties Accounts receivable Other receivables Guarantee deposits paid Other financial assets Financial liabilities Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Accounts payable-related parties Other accounts payable Bonds payable (including current portion) Long-term borrowings (including current portion) Guarantee deposits received	December31,2020 6,400 $ 178,897 1,578 39,830 484,349 19,882 1,910,130 12,150 1,700,430 4,353,646 $ December31,2020 388,772 $ 25,000 2,464 285,207 30,278 63,269 498,957 788,180 60,912 2,143,039 $	December31,2019
		10,082 $ 103,498 4,462 - 335,818 23,512 942,777 8,075 1,659,457
		3,087,681 $
		December31,2019
		557,006 $ 1,306,400 13,461 156,373 58,463 51,331 497,707 - 1,811
		2,642,552 $

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B. Financial risk management policies

The Company’s financial risk primarily was composed of the risk following financial instrument investment and exchange rate risk of foreign currency transaction. The Company always adopted strictest control standard on the financial risk of each financial instrument investment. Every financial investments and operations were estimated for its possible market risk, credit risk, liquidity risk and cash flow risk in all dimension, the Company must choose the minimum risk. The Company managed the exchange rate risk of foreign currency transaction was based on the strategical risk management target, searched for the optimal risk position and maintained adequate liquidity position to achieve best hedge strategy.

C. Significant financial risks and degrees of financial risks
(a) Market risk

Exchange rate risk

i. The Company’s businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

December 31, 2020

Book value Degree of Affected Affected (NTD) variation profitor loss equity 62,523 $ 1% 625 $ - $ 180,265 $ 1% - $ 1,803 $ 7,615 $ 1% 76) ($ - $ Book value Degree of Affected Affected (NTD) variation profitor loss equity 57,968 $ 1% 580 $ - $ 153,193 $ 1% - $ 1,522 $ 7,257 $ 1% 73) ($ - $ Sensitivityanalysis December 31,2019 Sensitivityanalysis	Sensitivityanalysis	Sensitivityanalysis
Book value (NTD) 57,968 $ 153,193 $ 7,257 $
	Degree of Affected variation profitor loss 1% 580 $ 1% - $ 1% 73) ($	Affected equity - $ 1,522 $ - $

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ii. Total exchange loss, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019, amounted to $357 and $822, respectively.

Price risk

The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, The Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by The Company.

Cash flow and fair value interest rate risk

The Company’s interest rate risk arises from short-term bank borrowings. Borrowings issued at variable rates expose The Company to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose The Company to fair value interest rate risk. For the years ended December 31, 20202 and 2019, the ��’s borrowing at floating rate was calculated in New Taiwan dollars, and when the market rate increased 1%, the cash outflow will increase $12,020 and $18,634, respectively.

(b) Credit risk

i. Credit risk refers to the risk of financial loss to The Company arising from default by the clients or counterparties of financial instruments on the contract obligations. According to The Company’s credit policy, each local entity in The Company is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored. Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables.
ii. For the years ended December 31, 2020 and 2019, no credit limits were exceeded during the reporting periods, and management does not expect any significant losses from nonperformance by these counterparties.
iii. The Company adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:
iv. If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

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v. The Company adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.
vi. The Company classifies customer’s accounts receivable and contract assets in accordance with customer types. The Company applies the modified approach using a provision matrix based on the loss rate methodology to estimate the expected credit loss.
vii. The Company used the forecastability of Taiwan Institute of Economic Research boom observation report to adjust historical and timely information to assess the default possibility of accounts receivable. On December 31, 2020 and 2019, the provision matrix and loss rate methodology were as follows:

December 31, 2020 Expected loss rate Total book value Loss allowance December 31, 2019 Expected loss rate Total book value Loss allowance	Notpastdue 0%-2.44% 485,512 $ 37 Notpastdue 0%-0.17% 333,165 $ 2	1 to 120 days pastdue 2.44%-80.45% 1,779 $ 1,327 1 to 120 days pastdue 0.17%-20% 6,148 $ 2	Over 121 days pastdue 80.45%-100% 5,653 $ 5,653 Over 121 days pastdue 20%-100% 5,885 $ 4,914	Total
				492,944 $ 7,017 Total
				345,198 $ 4,918

viii. Movements in relation to the Company applying the modified approach to provide loss allowance for notes receivable and accounts receivable are as follows:

January 1 Expected credit impairment losses December 31 At January 1 (the same as December 31)		2020
		Accounts receivable 4,918 $ 2,099

		7,017 $
		2019
		Accounts receivable 4,918 $

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(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities (Note 6(26)) at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements.
ii. The Company has the following undrawn borrowing facilities:

Expiring within one year Expiring beyond one year	December31,2020 1,442,313 $ 5,211,820 6,654,133 $	December31,2019
		1,203,855 $ 6,000,000
		7,203,855 $

As of December 31, 2020 and 2019, the Company’s undrawn borrowing facilities which will expire beyond one year were $5,211,820 and $6,000,000, respectively, which were the execution fund borrowing of “Chiayi County Machouhou Industry Park 2nd Precision Development Project” and described in Note 6(15).

-191-

iii. The table below analyses the Company’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:
December 31, 2020
Short-term borrowings
Short-term notes and bills payable
Notes payable
Accounts payable (including related
rarties)
Other payables
Bonds payable (including current
portion)
Long-term borrowings (including
current portion)
Guarantee deposits received
Non-derivative financial liabilities:
December 31, 2019
Short-term borrowings
Short-term notes and bills payable
Notes payable
Accounts payable(including related
rarties)
Other payables
Bonds payable
Guarantee deposits received

Within 1year
Between 1 and 5 years
391,497
$ -
$ 25,000
-
2,464
-
244,285
71,200
63,269
-
506,004
-
-
910,552
-
60,912
Within 1year
Between 1 and 5 years
559,567
$ -
$ 1,306,400
-
13,461
-
162,886
51,590
51,331
-
7,000
506,004
-
1,811

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks and beneficiary certificates is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

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Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in equity investment without active market is included in Level 3.

B. Fair value information of investment property at cost is provided in Note 6(10).
C. Financial instruments not measured at fair value

The carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable and other payables are approximate to their fair values.

D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2020 and 2019 are as follows:
(a) The related information of natures of the assets and liabilities is as follows:

December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income Equity securities December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income Equity securities	Level 1 - $ Level 1 1,926 $	Level 2 - $ Level 2 - $	Level3 6,400 $ Level3 8,156 $	Total
				6,400 $
				Total
				10,082 $

(b) The methods and assumptions the Company used to measure fair value are as follows:
i. The instruments the Company used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Listed shares Open-end fund Market quoted price Closing price Net asset value

ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including

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calculated by applying model using market information available at the consolidated balance sheet date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters).

iii. When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Company adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.
E. For the years ended December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.
F. The following chart is the movement of Level 3 for the years ended December 31, 2020 and 2019:

At January 1 Gains and losses recognised in other comprehensive income Unrealised gains on valuation through other comprehensive income ( At December 31	2020 8,156 $ 1,756) ( 6,400 $	2019 11,089 $ 2,933) 8,156 $

G. For the years ended December 31, 2020 and 2019, there was no transfer into or out from Level 3.
H. Finance segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. External appraiser was commissioned to appraise investment property.

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I. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Non-derivative equity instrument: Venture capital shares Private equity fund investment Non-derivative equity instrument: Venture capital shares Private equity fund investment	Fair value at December 31, 2020 6,400 $ Fair value at December 31, 2,019 8,156 $	Valuation technique Net asset value Valuation technique Net asset value	Significant unobservable input Not applicable Significant unobservable input Not applicable	Range (weighted average) - Range (weighted average) -	Relationship of inputs to fairvalue
					Not applicable Relationship of inputs to fairvalue
					Not applicable

13. Supplementary Disclosures

(4) Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: Please refer to table 1.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Please refer to table 4.

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(5) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China)�Please refer to table 5.

(6) Information on investments in Mainland China

A. Basic information: Please refer to table 6.
B. Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas: None.
(7) Major shareholders information

Major shareholders information: Please refer to table 7.

14. Segment Information

None.

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APEX SCIENCE & ENGINERRING CORP. STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Amount
Cash on hand and petty cash Bank deposits : Checking accounts Demand deposits �USD �NTD #NAME?	USD $ 1,629 rate 28.48		46,274 90,940 100	1,555 $ 40,028 137,314 178,897 $

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APEX SCIENCE & ENGINERRING CORP. STATEMENT OF NOTES RECEIVABLE AND ACCOUNTS RECEIVABLE

DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

ClientName	Description		Amount	Note
Client: A Company B Company C Company D Company Others Subtotal Less : Allowance for bad debts Total Related parties: Chang Ji Construction Co., Ltd.			185,033 $ 159,037 45,177 43,032 60,665 492,944 $ 7,017) ( 485,927 $ 59,712 $	Each individual customer balance did not exceed 5% of the account balance

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APEX SCIENCE & ENGINERRING CORP.

DETAILS OF CONSTRUCTION IN PROGRESS DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

ProjectNo.		Balance at January1,2020		Cost	Project (loss) gain	Completed androll-out		Balance at December 31, 2020
ACONP02 AFC25 AIW04 AIW05 ATY19 ATFC09 ATY21 ATW10 Others		302,594 $ 732,386 572,034 774,425 479,500 174,455 47,590 272,178 1,402,585 4,757,747 $		- $ 323 525 35,455 67,137 349,475 358,698 1,157 308,969 1,121,739 $ Shown as	- $ 14 1,597) ( 35,455) ( 67,137) ( 14,999) ( - 1,157) ( 13,017) ( 133,348) ($ Shown deduction item to	- $ - - - - - - 272,178) ( 595,323) ( 867,501) ($ as contract assets contract liabilities		302,594 $ 732,723 570,962 774,425 479,500 508,931 406,288 - 1,103,214 4,878,637 $ 4,016,382 $ 862,255 $

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APEX SCIENCE & ENGINERRING CORP.

DETAILS OF INVENTORIES DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Amount	Amount	Note
			Cost		Net Realizable Value
Merchandise inventory Finished goods Semi-finished goods Work in progress Raw materials Buildings and land held for sale Lands wait for building Construction in progress Prepayment for land purchases Subtotal Less: Allowance for valuation loss Total			10,546 $ 10,455 11,732 2,426 9,480 325,035 1,338 1,200 443,020 815,232 8,644) ( 806,588 $		8,583 $ 9,828 11,732 2,426 8,825 325,035 1,338 1,200 443,020 811,987 $	Note " "

NOTE:Due to the industry characteristics of the construction company, its The price is not easy to determine, so the listed market price is not lower than the cost.

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APEX SCIENCE & ENGINERRING CORP.
DETAILS OF INVESTMENTS ACCOUNTED FOR UNDER THE EQUITY METHOD
FOR THE YEAR ENDED DECEMBER 31, 2020
(Expressed in thousands of New Taiwan dollars)
Shares
Amount
Shares
Amount
Earnings distribution of
investments accounted
Capital surplus
Retain
earning
Cash
dividend
Financial
statements
translation
differences of
foreign operations
Shares
Percentage
of
Ownership
Amount
Total Amount
Methods of
measurement
Collateral
Name
Beginning Balance
Addition(Decrease)
Ending Balance
Market Value or
Net Assets Value

Shin Ding Engineering
Construction Co., Ltd.
800,000
19,562
$ -
-
$ 5,276)
($ -
$ -
$ -
$ -
$ 800,000 100.00
14,286
$ 14,286
$ Equity
method
None
Reinforce Energy Co. Ltd.
2,810,000
153,192
-
-
24,142
-
-
-
2,931
2,810,000
100.00
180,265
180,265
"
"
Chang Ji Construction Co., Ltd
51,354,000
341,793
2,966,000
46,452
33,420
1,908
4,960)
(
5,202)
(
-
54,320,000
90.53
413,411
669,148
"
"
514,547
$ 46,452
$ 52,286
$ 1,908
$ 4,960)
($ 5,202)
($ 2,931
$ 607,962
$ 863,699
$

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					Note		Please refer to Note 8 for details of	collaterals.		"		"		"
					Collateral	Pledged time deposits,inventory,	land, buildings and structures (shown as property, plant and equipment)	and treasury shares.		"		"		"		None		"		"			"
APEX SCIENCE & ENGINERRING CORP.	STATEMENT OF SHORT-TERM BORROWINGS	DECEMBER 31, 2020	(Expressed in thousands of New Taiwan dollars)	Range of	Ending Balance Contract Period Interest Rate Credit Line	115,000 $ 190,000 $	2020/08/19-	2021/05/24 1.41%-2%	52,284 2020/09/04- 100,000	2021/09/04 "	44,690 2020/05/05- 194,690	2021/05/05 "	33,944 2020/08/17- 150,000	2021/05/18 "	81,900 2020/09/22- 91,000	2021/09/22 "	40,000 2020/11/23- 100,000	2021/05/23 "	13,255 2020/09/07- 80,000	2021/05/05 "	2020/10/05-		7,699 2021/04/14 " 90,000	388,772 $ 995,690 $
					Description		Secured borrowings		Secured	borrowings	Secured	borrowings	Secured	borrowings	Unsecured	borrowings	Unsecured	borrowings	Unsecured	borrowings	Unsecured	borrowings
					Nature		Mega International Commercial Bank Co., Ltd.		Chang Hwa Commercial	Bank	The Shanghai Commercial &	Savings Bank, Ltd.	Taiwan Business Bank Co.,	Ltd.	Taiwan Cooperative Bank		Hua Nan Commercial	Bank,Ltd.	Jih Sun International	Bank,Ltd.	First Commercial Bank

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						Note
						Collateral	None
APEX SCIENCE & ENGINERRING CORP.	STATEMENT OF SHORT-TERM BILLS PAYABLE	DECEMBER 31, 2020	(Expressed in thousands of New Taiwan dollars)		Range of	Ending Balance Contract Period Interest Rate Credit Line	2020/10/08-	25,000 $ 2021/01/06 0.42% 50,000 $
				Guarantor or	Accepting	Institution	Unsecured	borrowings
						Nature	Taiwan Shin Kong Commercial	Bank Co., Ltd.

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APEX SCIENCE & ENGINERRING CORP. DETAILS OF ACCOUNTS PAYABLE

DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

ClientName	Description		Amount	Note
Supplier: A Company Others Subtotal Related parties: Chang Ji Construction Co., Ltd.			55,006 $ 230,201 285,207 $ 30,278 $	Each individual supplier balance did not exceed 5% of the account balance

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APEX SCIENCE & ENGINERRING CORP. DETAILS OF PARTIAL CONSTRUCTION BILLINGS

DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

ProjectNo.		Balance at January1,2020	Additions (Reductions)		Completed androll-out	Balance at December 31, 2020	Balance at December 31, 2020
ACONP02 AFC25 AIW04 AIW05 ATFC09 ATY19 ATY21 ATW01 ATW10 Others		265,604 $ 736,435 570,596 755,529 95,500 368,999 117,314 14,875 272,178 1,236,685 4,433,715 $	- $ - $ 2,694) ( - 366 - 11,430 - 388,514 - 98,448 - 247,898 - 86,404 - - 272,178) ( 362,739 595,323) ( 1,193,105 $ 867,501) ($ Shown as contract liabilities Shown as deduction item to contract assets				265,604 $ 733,741 570,962 766,959 484,014 467,447 365,212 101,279 - 1,004,101 4,759,319 $ 958,378 $ 3,800,941 $

-205-

APEX SCIENCE & ENGINERRING CORP. STATEMENT OF OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description	Amount	Note
Sales revenue Less:Sales return Sale discount Subtotal Building revenue Construction revenue Service revenue Total		132,602 $ 736) ( 153) ( 131,713 2,705,394 989,344 79,256 3,905,707 $

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APEX SCIENCE & ENGINERRING CORP.

STATEMENT OF OPERATING COSTS FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description	Amount
Beginning raw materials Add: Raw materials purchased Other Less:Ending raw materials Cost of raw materials sold Turnover operating expenses Consumed materials Direct labor Manufacturing expense Manufacturing cost Add:Beginning work in Progress Less:Ending work in Progress Cost of finished goods Add:Beginning finished goods Outsourcing processing fee Less:Ending finished goods Turnover operating expenses Cost of goods sold from purchase Beginning inventory Add:Net purchase for the period Other Less:Ending inventory Turnover operating expenses Total cost of goods sold Add:Cost of raw materials sold Less: Allowance for valuation loss Total cost of goods sold		23,317 $ 24,709 176 21,212) ( 5,704) ( 614) ( 20,672 9,694 1,889 32,255 3,685 2,426) ( 33,514 8,700 1,639 10,455) ( 356) ( 33,042 14,472 73,973 1,402 10,546) ( 1,972) ( 77,329 5,704 1,377) ( 114,698 $

-207-

APEX SCIENCE & ENGINERRING CORP. STATEMENT OF ENGINEERING COSTS FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount
Beginning engineering materials Add : Purchasing Less:Ending materials Cost of engineering materials Direct labor Subcontract costs Manufacturing expenses Total cost of engineering sales			- $ 346,108 - 346,108 226 681,350 95,008 1,122,692 $

-208-

APEX SCIENCE & ENGINERRING CORP. STATEMENT OF BUILDING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item	Description		Amount	Amount	Amount
			Subtotal		Total
Lands wait for building Beginning lands wait for building Add : Purchasing Less:Ending lands wait for building Construction in progress Beginning construction in progress Add : Purchasing Capitalisation of qualifying assets Less:Turnover buildings and land held for sale Ending Construction in progress Buildings and land held for sale Beginning buildings and land held for sale Add : Turnform construction in progress Less:Buildings and land held for sale Total cost of building		838 $ 500 1,338) ( 1,873,541 292,994 4,953 2,170,288) ( 1,200) ( 397,784 2,170,288 325,035) (			- $ - 2,243,037 2,243,037 $

-209-

APEX SCIENCE & ENGINERRING CORP. DETAILS OF OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2020

(Expressed in thousands of New Taiwan dollars)

Item		Sales expense		General and administrative expenses		Research and developmentexpenses		Total
Pension Commission expense Miscellaneous expenses Others		13,394 $ 45,646 4,269 12,723 76,032 $		62,624 $ - 10,213 22,407 95,244 $		- $ - 120 2,502 2,622 $		76,018 $ 45,646 14,602 37,632 173,898 $

-210-

-211-

Relationship
with the
counterparty
Limit on
endorsements/g
uarantees
provided for a
single party
Maximum
outstanding
endorsement/
guarantee
amount as of
Outstanding
endorsement/
guarantee
amount at
December 31,
Actual amount
drawn down
Ceiling on total
amount of
endorsements/g
uarantees
provided
Provision of
endorsements/
guarantees to
the party in
Mainland
(Note 1)
Endorser/guarantor
Company name
(Note 2)
(Note 3)
(Note 4)
(Note 6)
(Note 7)
endorsements/
accumulated
(Note 3)
endorsements/
endorsements/
(Note 9)
Footnote

1
Chang Ji Construction
Co., Ltd.
Apex Science &
Engineering Corp.
4
4,351,300
$ 80,000
$ 58,000
$ -
$ -
6.66
4,351,300
$ N
Y
N
Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:
(1) The company is ‘0’.
(2) The subsidiaries are numbered in order starting from ‘1’.
Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:
(4) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.
(5) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.
(6) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.
(7) The performance guarantees for the sale of pre-sales contracts under the Consumer Protection Law are jointly guaranteed.
Guarantees”, and state each individual party to which the endorsements/guarantees have been provided and the calculation for ceiling on total amount of endorsements/guarantees provided in the footnote.
�The Company�
(1) The limit on endorsements/guarantees to a single party is 50% of the Company’s net asset based on the latest financial statements audited or reviewed by independent accountants.
(2) The Company’s limit on amount of endoresements/ guarantees provided to others is 15% of net assets in latest financial statements of the Company.
�Domestic subsidiaries�
(1) The limit on amount of endoresements/ guarantees provided to single party is 15% of net assets in latest financial statements of the Company.
(2) In accordance with the Group's related regulation, ceiling on total amounts of endorsements / guarantees provided is 500% of the Company's net worth based on the latest financial statements.
Note 4: Fill in the year-to-date maximum accumulated outstanding balance of endorsements/guarantees provided as of the reporting period.
Note 5: Fill in the amount of endoresements/ guarantees increased/decreased of each subsidiary. However, the amount of endoresements/ guarantees increased/decreased of the Company do not have to fill.
Note 7: Fill in the actual amount of endorsements/guarantees used by the endorsed/guaranteed company.
Note 8: Fill in the amount of endorsements and guarantees which was guaranteed by property.
Note 9: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by the company to subsidiary and provision by subsidiary to the company, and provision to the party in Mainland China.
Note 6: Fill in the amount approved by the Board of Directors or the chariman if the chairman has been authorised by the Board of Directors based on subparagraph 8, Article 12 of the Regulations
Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies. (Fill in the amount of provision of endorsements and guarantees to others till the current month)
(1) Having business relationship.
(2) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.
(3) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.
Note 3: Fill in limit on endorsements/guarantees provided for a single party and ceiling on total amount of endorsements/guarantees provided as prescribed in the endorser/guarantor company’s “Procedures for Provision of Endorsements and

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No. of shares
Book value (Note 3)
Percentage of
Ownership
Fair value
Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)
December 31, 2020
Table 2
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)
Footnote (Note 4)
Securities held by
Marketable securities (Note 1)
Relationship with the securities issuer
(Note 2)
General ledger account
Ending Balance

Apex Science & Engineering Corp.
Han Qi Tang Investment Company
-
Financial asset measured at fair value through other
comprehensive income, non-current
2,648,106
6,400
$ 16.07
6,400
$ Chang Ji Construction Co., Ltd.
Apex Science & Engineering Corp.
The Company
"
28,124,802
369,841
12.29
369,841
Chang Ji Construction Co., Ltd.
Big Sun Energy Technology Inc.
-
"
517,789
285
0.26
285
(Note 5)
Note 5: As of December 31, 2020, in order to obtained bank financing and borrowing facility, Chang Ji Construction Co., Ltd. pledged the Company’s share as collateral in the amount of 28,125 thousand shares.
Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities.
Note 2: Leave the column blank if the issuer of marketable securities is non-related party.
Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the
marketable securities not measured at fair value.
Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

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Purchases
(sales)
Amount of
endorsements/guarantees
secured with collateral
Percentage of
total purchases
(sales)
Credit term
Unit Price
Credit term
Balance at
December 31,
2020
Percentage of total
notes/accounts
receivable (payable)
Transaction
Compared to third party transactions
(Note 1)
Notes/accounts receivable (payable)
Footnote
(Note 2)
Purchaser/seller
Counterparty
Relationship with the
counterparty

Chang Ji Construction Co., Ltd.
Apex Science & Engineering
Corp.
Parent company
Construction
revenue
186,988)
($ 9.11
35 to 65 days The same as general
transaction
-
30,278
$ 70.62
Note 1: If terms of related-party transactions are different from third-party transactions, explain the differences and reasons in the ‘Unit price’ and ‘Credit term’ columns.
Note 2: In case related-party transaction terms involve advance receipts (prepayments) transactions, explain in the footnote the reasons, contractual provisions, related amounts,
and differences in types of transactions compared to third-party transactions.
Note 3: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than
NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

-214-

General ledger account
Amount of
endorsements/guarantees
secured with collateral
Transaction terms
Percentage of consolidated total operating
revenues or total assets (Note 3)
Significant inter-company transactions during the reporting periods
January 1, 2020 to December 31, 2020
(Except as otherwise indicated)
Table 4
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)
Number
(Note 1)
Company name
Counterparty
Relationship (Note 2)
Transaction

0
Apex Science & Engineering Corp.
Chang Ji Construction
Co., Ltd.
1
Advance receipts for
construction
504,178
$ No significant difference
from general customers
6.67
1
Chang Ji Construction Co., Ltd.
Apex Science &
Engineering Corp.
2
Advance receipts for
construction
1,273,392
No significant difference
from general customers
16.85
1
Chang Ji Construction Co., Ltd.
Apex Science &
Engineering Corp.
2
Construction revenue
186,988
No significant difference
from general customers
3.58
Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:
(1) Parent company is ‘0’.
(2) The subsidiaries are numbered in order starting from ‘1’.
(1) Parent company to subsidiary.
(2) Subsidiary to parent company.
(3) Subsidiary to subsidiary.
Note 3: Ratios of asset/liability are divided by consolidated total assets, and ratios of profit/loss accounts are divided by consolidated sales revenue.
Note 4: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.
Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or
between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the
transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

-215-

Balance as at
December 31, 2020
Balance as at
December 31, 2019
No. of shares
Ownership (%)
Book value
Shares held as at December 31, 2020
Net profit (loss) of
the investee for the
year ended
December 31, 2020
(Note 2(2))
Investment income(loss)
recognised by the Company
for the year ended
December 31, 2020 (Note
2(3))
Footnote
Investor
Investee (Notes 1 and 2)
Location
Main business activities
Initial investment amount

Apex Science &
Engineering Corp.
Shin Ding Engineering
Consultants Co., Ltd.
Taiwan
Construction technical
advisor, urban renewal
and reconstruction,
management consulting
and other consulting
service
8,000
$ 8,000
$ 800,000
100.00
14,286
$ 5,276)
($ 5,276)
($ Apex Science &
Engineering Corp.
Reinforce Eenergy
CO.,LTD
British
Virgin
Islands
General investment
95,964
95,964
2,810,000
100.00
180,265
24,142
24,142
Apex Science &
Engineering Corp.
Chang Ji Construction
Co., Ltd.
Taiwan
Building and civil
engineering, hydraulic
engineering and other
construction business
496,856
462,596
54,320,000
90.53
413,411
52,413
33,420
Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:
(2) The ‘Net profit (loss) of the investee for the year ended December 31, 2020’ column should fill in amount of net profit (loss) of the investee for this period.
Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules, it can only disclose the
information of the overseas holding company about the disclosure of related overseas investee information.
(1) The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at June 30, 2020’ should fill orderly in the Company’s (public company’s) information on investees and every
directly or indirectly controlled investee’s investment information, and note the relationship between the Company (public company) and its investee each (ex. direct subsidiary or indirect subsidiary) in the ‘footnote’ column.
(3) The ‘Investment income (loss) recognised by the Company for the year ended December 31, 2020’ column should fill in the Company (public company) recognised investment income (loss) of
its direct subsidiary and recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its direct
subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

-216-

Remitted to
Mainland China
Remitted back
to Taiwan
Book value of
investments in
Mainland
China as of
December 31,
2020
Accumulated
amount of
investment
income remitted
back to Taiwan
as of December
31, 2020
Footnote
Amount remitted from Taiwan
to Mainland China/Amount
remitted back to Taiwan for the
year ended December 31, 2020
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31, 2020
Net income of
investee as of
December 31,
2020
Ownership held
by the
Company
(direct or
indirect)
Investment
income (loss)
recognised by the
Company for the
year ended
December 31,
2020 (Note 2)
Investee in Mainland
China
Main business activities
Paid-in capital
Investment
method (Note 1)
Accumulated amount
of remittance from
Taiwan to Mainland
China as of January
1, 2020

Zhejiang Guyue
Longshan Electronic
Technology
Development Co., Ltd.
Manufacture and sale of
light emitting diode
display and indicator
panels incorporating light
emitting diodes
197,100
$ 2
94,313
$ -
$ -
$ 94,313
$ 52,643
$ 46.00
24,216
180,021
$ -
$ Note
2(2)B.
Endorser/guarantor
Accumulated amount of
remittance from Taiwan
to Mainland China as of
December 31, 2020
Investment
amount
approved by the
Investment
Commission of
the Ministry of
Economic
Affairs (MOEA)
Ceiling on
investments in
Mainland China
imposed by the
Investment
Commission of
MOEA
Apex Science &
Engineering Corp.
$ 94,313 $ 94,313 $ 1,832,475
Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:
(1) Directly invest in a company in Mainland China.
(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China. (Investing through REINFORCE ENERGY CO.,LTD)
(3) Others.
Note 2: In the ‘Investment income (loss) recognised by the Company for the year ended December 31, 2020’ column:
(1) It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.
(2) Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:
A.The financial statements that are audited by international accounting firm which has cooperative relationship with accounting firm in R.O.C.
B.The financial statements that are audited by R.O.C. parent company’s CPA.
C. Non-significant subsidiaries were based on financial statements which were not audited by CPA.
Note 3: The numbers in this table are expressed in New Taiwan Dollars.

-217-

Name of major shareholders
Name of shares held (common share)
Name of shares held (preferred share)
Percentage of Ownership
Shares
December 31, 2020
Table 7

(2) For above data, if shareholders trusted shares, it will be disclosed in accordance with the segregate account of trustors of trustee’s trust account. For the declaration of internal
person who held over 10% equity interest by shareholders in accordance with Securities and Exchange Act, the shareholding including shares held on one’s own plus the trusted
shares and has determination on the trusted property. For the declaration of shareholding of internal person, please refer to Market Observation Post System.
Lin, Chien-Chih
13,090,000
-
5.72%
Note 1: (1) The major shareholders information of this table comes from the data of TDCC on the final working day of every quarter, to calculate total common shares and preference shares
which held by shareholders and completed the non-physical registration (including treasury shares) and exceeded 5%. The number of shares which recorded on the Company’s
financial report may different from the number of actually completed non-physical registration due to the difference of calculation basis.
Kuo, Kuo-Hua
16,124,177
-
7.04%
Chih, Chi-Kuang
15,547,189
-
6.79%
Chang Ji Construction Co., Ltd.
28,124,802
-
12.29%

-218-

V. Consolidated financial report duly audited by CPAs in the most recent fiscal year

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholders of Apex Science & Engineering Corp.

Opinion

We have audited the accompanying consolidated balance sheets of Apex Science & Engineering Corp. and subsidiaries (the “Group”) as at December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

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

Key audit matters

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

-219-

Key audit matters for the Group’s 2020 consolidated financial statements are stated as follows:

Recognition of construction revenue

Description

For accounting policy on revenue recognition, accounting estimates and related details of revenue, please refer to note 4(26), 5(2) and 6(21).

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Obtained an understanding and assessed the reasonableness of policies and procedures which were used to recognise construction revenue.
Obtained the newly added construction contract list for current fiscal year, and check whether the total contract price is equal to construction revenue, selected samples of estimated total cost which is approved by project management department in order to check whether the calculation basis adopted in the estimated total cost is the same with the calculation of percentage of completion.
Verified the related supporting documents of current supplementary (subtractive) construction in order to check that changes in the estimated total cost were recognised appropriately.
Obtained the details of current incurred cost, selected samples on current incurred cost and tracing them to related vouchers, confirmed that current input cost have been accounted for appropriately, and examined the accuracy of percentage of completion.

-220-

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Apex Science & Engineering Corp. as at and for the years ended December 31, 2020 and 2019.

Responsibilities of management and those charged with governance for the consolidated financial statements

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

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

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ responsibilities for the audit of the consolidated financial statements

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

-221-

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

-222-

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Liao, Fu-Ming Chen, Ching Chang

For and on behalf of PricewaterhouseCoopers, Taiwan March 25, 2021

------------------------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice.

-223-

APEX SCIENCE & ENGINEERING CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Assets	December 31, 2020 AMOUNT % � �� � �� � �� � �� � �� �� �� �� �� � �� �� �� �� �� � �� � �� � �� � �� � �� � �� � �� � � �� ��	December 31, 2019	December 31, 2019
	AMOUNT � �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� �� � ��	AMOUNT � �� �� �� �� �� �� �� �� �� �� �� �� � �� �� �� �� � ��	%
Current assets 1100 Cash and cash equivalents 1140 Current contract assets 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Total current Assets Non-current assets 1517 Financial asset at fair value through other comprehensive income-non- current 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property - net 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			� � � � �� �� � ��
			��
			� � � � � � �
			�
			��

(Continued)

-224-

APEX SCIENCE & ENGINEERING CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

					December 31, 2020				December 31, 2019
	Liabilities and Equity	Notes			AMOUNT	%			AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(11)		�	��	��		�	��	��
2110	Short-term notes and bills payable	6(12)			��		�		��	��
2130	Contract liabilities	6(21)			��		�		��	�
2150	Notes payable				��		�		��	�
2170	Accounts payable	6(13)			��		�		��	�
2200	Other payables				��		�		��	�
2230	Current tax liabilities				��		�		��	�
2280	Lease liabilities-current				��		�		�	�
2300	Other current liabilities	6(14)(15)(16)			��	��			��	��
21XX	Total current liabilities				��	��			��	��
	Non-current liabilities
2530	Bonds payable	6(15)			�		�		��	�
2540	Long-term borrowings	6(16)			��		�		�	�
2570	Deferred income tax liabilities	6(28)			��		�		��	�
2580	Lease liability - non-current				��		�		�	�
2600	Other non-current liabilities				��		�		��	�
25XX	Non-current liabilities				��		�		��	�
2XXX	Total non-current liabilities				��	��			��	��
	Equity attributable to owners of
	parent
	Share capital	6(18)
3110	Common Stock				��	��			��	��
	Capital surplus	6(19)
3200	Capital surplus				��		�		��	�
	Retained earnings	6(20)
3310	Legal reserve				��		�		��	�
3320	Special reserve				��		�		��	�
3350	Unappropriated retained earnings				��		�		��	�
	Other equity interest
3400	Other equity interest		�		��		��		��	�
3500	Treasury stocks	6(18) and 8	�		��		��		��	��
31XX	Total equity attributable to
	owners of parent				��	��			��	��
36XX	Non-controlling interest	4(3)			��		�		��	�
3XXX	Total equity				��	��			��	��
	Significant contingent liabilities and	9
	unrecognised contract commitments
	Significant events after the balance	11
	sheet date
3X2X	Total liabilities and equity			�	��	��		�	��	��

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

-225-

APEX SCIENCE & ENGINEERING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

Items

Year ended December 31
2020
2019
Notes
AMOUNT
%
AMOUNT
%
6(21) and 7
�
��
��
��
��
6(4)(26)(27)
�
��
��
��
��
��
��
��
�
6(26)(27)
�
��
��
��
��
�
��
��
��
��
�
��
��
��
�
12(2)
�
��
�
�
�
�
��
��
��
��
��
�
��
�
6(22)
��
�
��
�
6(23)
��
�
��
�
6(24)
��
��
��
�
6(25)
�
��
��
��
�
6(8)
��
�
��
�
��
�
��
�
��
�
��
�
6(28)
��
��
��
��
�
��
�
�
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�

4000
Operating revenue
5000
Operating costs
5900
Net operating margin
Operating expenses
6100
Selling expenses
6200
General and administrative
expenses
6300
Research and development
expenses
6450
Expected credit impairment
losses
6000
Total operating expenses
6900
Operating profit
Non-operating income and
expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7060
Share of profit of associates and
joint ventures accounted for
under equity method
7000
Total non-operating revenue
and expenses
7900
Profit before income tax
7950
Income tax expense (benefit)
8200
Profit for the year

(Continued)

-226-

APEX SCIENCE & ENGINEERING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amount)

Items	Year ended December 31	Year ended December 31
	2020	2019
	AMOUNT � �� �� � �� � �� � �� �� � �� � �� �� � �� �
Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8316 Unrealised gains (losses) from investments in equity instruments measured at fair value through other comprehensive income Components of other comprehensive income that will be reclassified to profit or loss 8361 Exchange differences on translation 8300 Other comprehensive income, net 8500 Total comprehensive income for the year Profit attributable to: 8610 Owners of the parent 8620 Non-controlling interest Comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interest Basic earnings per share 9750 Basic earnings per share Diluted earnings per share 9850 Diluted earnings per share
	�

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

-227-

							Total equity		��	��	��	��		��		��	�	��	��		��	��	��	��			�	�	��			��		��	��	��			�	��	��
									�		�							�	�		�								�						�	�				�	�
						Non-controlling	interest		� ��	��	� ��	��		�		�	�	� ��	� ��		� ��	��	�	��			�	�	�			�		�	�	�			�	� ��	� ��
							Total		��	��	��	��		��		��	�	�	��		��	��	��	��			�	�	��			��		��	��	��			�	�	��
									�		�								�		�								�						�	�					�
							Treasury stocks		�� ��	�	�	�		�		�	��	�	�� ��		�� ��	�	�	�			�	�	�			�		�	�	� ��			�	�	�� ��
Retained Earnings Other equity interest	Total Unrealised	gains (losses) from	financial assets	Financial statements measured at fair	translation value through other	Unappropriated differences of foreign comprehensive	Legal reserve Special reserve retained earnings operations income		� �� � �� � �� �� �� �� ��	� � �� � �	� � � � �� � ��	� � �� � �� � ��		� � � � �		� � � � �	� � � � �	� � � � �	� �� � �� � �� �� �� �� ��		� �� � �� � �� �� �� �� ��	� � �� � �	� � � �� ��	� � �� �� ��			�� � � �� � �	� �� � �� � �	� � � �� � �			� � � � �		� � � � �	� � � �� � �	� � � � �			� � �� � � ��	� � � � �	� �� � �� � �� �� �� �� ��
							Capital surplus		� ��	�	�	�		��		��	� ��	�	� ��		� ��	�	�	�			�	�	�			��		��	��	�			�	�	� ��
						Share capital -	common stock		� ��	�	�	�		�		�	� ��	�	� ��		� ��	�	�	�			�	�	�			�		�	�	�			�	�	� ��
							Notes						6(30)				6(18)	6(30)							6(20)								6(30)			6(18)	6(7)			6(30)
								2019	Balance at January 1, 2019	Profit for the year	Other comprehensive income	Total comprehensive income	Difference between consideration and carrying	amount of subsidiaries acquired or disposed	Unclaimed overdue dividends transferred to	capital surplus	Retirement of treasury share	Changes in non-controlling interests	Balance at December 31, 2019	2020	Balance at January 1, 2020	Profit for 2020	Other comprehensive income for the year	Total comprehensive income	Appropriation and distribution of 2019 retained	earnings:	Legal reserve appropriated	Special reserve appropriated	Cash dividends of ordinary share	The Company’s stocks held by subsidiaries	deemed as treasury stocks acquiring cash	dividends	Difference between consideration and carrying	amount of subsidiaries acquired or disposed	Changes in ownership and equity of subsidiaries	Purchase of treasury shares	Disposal of investments in equity instruments	designated at fair value through other	comprehensive income	Decrease in non-controlling interest	Balance at December 31, 2020

-228-

APEX SCIENCE & ENGINEERING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Income and expenses having no effect on cash
flows
Depreciation (including investment property)
Depreciation on right-of-use assets
Amortization expense
Amortisation on right-of-use assets
Interest income
Deferred selling expenses transferred to
commissions expense
Expected credit impairment loss
Interest expense
Share of profit of associates and joint ventures
accounted for using equity method
Gain on disposal of investments
Changes in assets/liabilities relating to operating
activities
Changes in operating assets
Financial assets at fair value through profit or loss
Contract assets
Note receivable
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Net changes in liabilities relating to operating
activities
Contract liabilities
Notes payable
Accounts payable
Other payables
NewItem
Other non-current liabilities
Cash inflow generated from operations
Interest income received
Interest expenses paid
Income tax paid
Net cash flows from operating activities

Year ended December 31
Notes
2020
2019
�
��
�
��
6(26)
��
��
6(26)
��
�
6(26)
��
��
6(26)
��
�
6(22)
�
��
��
��
�
12(2)
��
�
6(25)
��
��
6(8)
�
��
��
6(24)
�
��
�
�
��
��
��
��
�
��
�
��
��
�
��
��
��
��
��
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��
�
��
��
�
��
��
�
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��
��
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��
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��
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��
��
��

(Continued)

-229-

APEX SCIENCE & ENGINEERING CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment
Decrease (increase) in restricted assets
Increase in other non-current assets
Proceeds from disposal of financial assets at fair
value through other comprehensive income
Net cash flows (used in) from investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings
Repayments of short-term borrowings
Decrease in short-term notes and bills payable
Proceeds from long-term borrowings
Repayments of long-term borrowings
Repayment of principal portion of lease liabilities
Cash dividends paid
Overdue and unclaimed dividends transferred to
capital reserve
Payments to acquire treasury shares
Change in non-controlling interests
Net cash flows used in financing activities
Effect of exchange rate changes
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

Year ended December 31
Notes
2020
2019
6(9)
��
��
��
�
��
��
�
��
��
��
�
�
��
��
��
��
�
��
��
6(31)
�
��
��
��
��
�
��
��
�
��
�
�
��
�
��
��
6(18)
�
��
�
6(30)
�
��
��
�
��
��
�
��
��
��
�
��
��
��
�
��
�
��

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

-230-

APEX SCIENCE & ENGINEERING CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY, ORGANISATION AND BUSINESS

APEX Science & Engineering Corp. (collectively referred to herein as the “the Company”) was incorporated on August 9, 1976, formerly “APEX Engineering Corp” and was renamed as “APEX Science & Engineering Corp.” in 2001. The Company and subsidiaries (collectively referred to herein as the “the Group”) engaged in mechanical engineering, instrument electric engineering, environmental engineering, manufacture and sale of electronic products and being commissioned in houses and business buildings. The Company has been a listed company since November 1995.

2. The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These financial statements were authorised for issuance by the Board of Directors on March 25, 2021.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

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

New Standards,InterpretationsandAmendments	Effective date by International Accounting StandardsBoard
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

Note�Earlier application from January 1, 2020 is allowed by FSC.

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

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

-231-

New Standards,InterpretationsandAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 4, ‘ Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘ Interest Rate Benchmark Reform - Phase 2’	January 1, 2021 January 1, 2021

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

New Standards,InterpretationsandAmendments

Effective date by
International Accounting
StandardsBoard

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

4. Summary of Significant Accounting Policies

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

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(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
(a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income financial assets measured at fair value.
B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(b) Unrealised gains and losses and balances on inter-group transactions are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
(d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

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(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
B. Subsidiaries included in the consolidated financial statements:

Name of investor	Name ofsubsidiary	Main business activities		December 31, December 31, 2020 2019 90.53% 85.59% 100.00% 100.00% - - 100.00% 100.00% - - - - - - Ownership(%)	December 31, December 31, 2020 2019 90.53% 85.59% 100.00% 100.00% - - 100.00% 100.00% - - - - - - Ownership(%)	Description
				December 31, 2020
APEX Science & Engineering Corp. APEX Science & Engineering Corp. APEX Science & Engineering Corp. APEX Science & Engineering Corp. APEX Science & Engineering Corp. APEX Science & Engineering Corp., Chang Ji Construction Co., Ltd. Linkplus Optoelectronics Inc.	Chang Ji Construction Co., Ltd. Reinforce Energy Co. Ltd. Bright Glory Corp. Shin Ding Engineering Consultants Co., Ltd. APEX Life Inc. Linkplus Optoelectronics Inc. Pocono Development Corporation	Civil engineering, building, hydraulic engineering and other construction business General investment business General investment business Engineering consultant Trading of engineering equipment and high- tech electronic products Electronic component, international trading and information software service business General investment business		90.53% 100.00% - 100.00% - - -	85.59% 100.00% - 100.00% - - -	(Note 1) (Note 2) (Note 3) (Note 4) (Note 5)

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(Note 1) For the year ended December 31, 2020, the Company purchased 2,966,000 shares of Chang Ji Construction Co., Ltd. please refer to Note 6(30) for details of related transaction.
(Note 2) In May 2019, Bright Glory Corp. started the liquidation process which was completed in July 2019 and collected the proceeds of $900.
(Note 3) On December 30, 2011, APEX Life Inc. obtained the approval of dissolution from authority and was registered. As of December 31, 2020, the liquidation process has not been completed.
(Note 4) On August 13, 2019, Linkplus Optoelectronics Inc. has been approved to dissolve and was registered. The liquidation process has been completed in August 2020, and the proceeds of $16,395 has been collected.
(Note 5) Pocono Development Corporation started the liquidation in June 2019 and completed the liquidation in November 2020.
C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restriction: None.
F. Subsidiaries that have non-controlling interests that are material to the Group:

As of December 31, 2020 and 2019, the non-controlling interest amounted to $86,967 and $117,606, respectively. The information on non-controlling interest and respective subsidiary is as follows:

Ownership Ownership Amount (%) Amount (%) 86,967 $ 9.47% 117,606 $ 14.41% Non-controllinginterest December 31,2020 December 31,2019	Ownership Ownership Amount (%) Amount (%) 86,967 $ 9.47% 117,606 $ 14.41% Non-controllinginterest December 31,2020 December 31,2019	Ownership Ownership Amount (%) Amount (%) 86,967 $ 9.47% 117,606 $ 14.41% Non-controllinginterest December 31,2020 December 31,2019
Ownership Amount (%) 86,967 $ 9.47% December 31,2020
Amount 86,967 $	Amount 117,606 $
		14.41%

Balance sheets

			Chang JiConstructionCo.,Ltd.	Chang JiConstructionCo.,Ltd.	Chang JiConstructionCo.,Ltd.
		December 31,2020		December 31,2019
Current assets		$	1,700,337	$	1,662,428
Non-current assets			390,926		360,515
Current liabilities	(		1,178,046)	(	1,206,795)
Non-current liabilities	(		42,957)	(	15,000)
Total net assets		$	870,260	$	801,148

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Statements of comprehensive income

Chang Ji Construction Co., Ltd.

Revenue

(Loss) profit before income tax Income tax expenses (Loss) profit Other comprehensive income, net of tax Total comprehensive income for the period Comprehensive income attributable to non-controlling interest Dividends paid to non-controlling interest

		YearendedDecember	YearendedDecember	YearendedDecember	31
		2020		2019
	$	2,051,761		$	1,043,730
		54,252			17,031
(		1,839)	(		3,435)
		52,413			13,596
		-	(		1,253)
	$	52,413		$	12,343
	$	6,802		$	1,786
	$	798		$	1,736

Statements of cash flows

Net cash (used in) provided by operating activities Net cash provided by (used in) investing activities Net cash provided by (used in) financing activities (Decrease) increase in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period

		Chang JiConstruction	Chang JiConstruction	Co.,Ltd.
		YearendedDecember31
		2020		2019
($		210,615)	$	173,222
(		30,569)	(	89,205)
		227,898	(	67,753)
(		13,286)		16,264
		35,569		19,305
	$	22,283	$	35,569

G. Subsidiaries held securities which were issued by parent company: Please refer to Note 6(18) for details.

(4) Currency translation

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

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured.

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Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.

(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All other foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.
B. Translation of foreign operations

(a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
(b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
(c) All resulting exchange differences are recognised in other comprehensive income.

(5) Classification of current and non-current items

A. The operating period of engineering project and the Group acts as agent of land development were usually longer than one year, together with assets and liabilities of the building and construction contracts and land agency business were divided into current and non-current according to operating period, other items of assets and liabilities were divided based on the standard of one year.
B. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;

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(c) Assets that are expected to be realised within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.
C. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be settled within twelve months from the balance sheet date;
(d) Liabilities for which the repayment date cannot be deferred unconditionally for at least twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Financial assets at fair value through other comprehensive income

A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:
(a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value. The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(7) Loans and receivables Accounts and notes receivable

A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

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(8) The Group acts as agent of land development

A. As agent of land development on behalf of government by agreement and responsible for some development and external sale.
B. In the period as agent, the Company paid takings compensation, construction cost, supervision, acceptance and other development expenses on behalf of others. The delegator calculated and paid interest periodically to the Company based on the costs which were paid on behalf of the delegator. The cost accounting of each agent case of land development business (development of industrial area, urban land consolidation and zone expropriation) was based on the development commission agreement and the contractors’ agreement and recognised according to actual construction progress and the cost and expenses which were calculated from the acceptance of construction completion. The Group was commissioned to develop the industrial area. The service agent revenue was recognised periodically according to the proportion of input costs and following conditions:
(a) The contract cost can be reasonably certain.
(b) Except for the expenses paid on behalf of others who will return the expenses certainly, other contract costs can be reasonably estimated.
(c) The collectability of agency fee (service revenue) can be reasonably certain.
C. The development cost was debited as “receivables from agent of land development”, and the land price from land buyer was credited as “other current liabilities-deposits which were received in advance from selling industrial area ”, which shall be wrote off with receivables from agent of land development when the owner pays.

(9) Impairment of financial assets

For debt instruments measured at fair value through other comprehensive income and financial assets at amortised cost, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

(10) Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

(11) Lease receivables/ operating leases (lessor)

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

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(12) Inventories

(13) Investments accounted for using equity method / associates

A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.
B. The Group’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

(14) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Property, plant and equipment are measured at cost model subsequently. Land is not depreciated. Other property, plant and equipment are depreciated using the straight-line method over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change.

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The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures	50~55 years
Building improvements	3~10 years
Machinery and equipment	3~8 years
Transportation equipment	3~5 years
Office equipment	3~5 years

(15) Leasing arrangements (lessee)�right-of-use assets/ lease liabilities

A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. The lease payments include fixed payments less any lease incentives receivable.
C. At the commencement date, the right-of-use asset measured at cost shall comprise the amount of the initial measurement of lease liability.

(16) Investment property

(17) Impairment of non-financial assets

A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

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B. The recoverable amounts of goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognised in profit or loss shall not be reversed in the following years.
C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination.

(18) Borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

(19) Notes and accounts payable

(20) Bonds payable

Ordinary corporate bonds issued by the Group are initially recognized at fair value, net of transaction costs incurred. Ordinary corporate bonds are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is accounted for as the premium or discount on bonds payable and presented as an addition to or deduction from bonds payable, which is amortized in profit or loss as an adjustment to the ‘finance costs’ over the period of bond circulation using the effective interest method.

(21) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(22) Employee benefits

A. Salaries and other short-term employee benefits

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B. Pensions

Defined benefit plan

(a) Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.
(b) Actuarial gain (loss) arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise.
(c) If the service cost in the prior year was vested immediately, related expenses was immediately recognised as profit or loss. Otherwise, related expenses was recognised as profit or loss with straight line method in the average vested period.

C. Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognises expense as it can no longer withdraw an offer of termination benefits or it recognises relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

D. Employees’ compensation and directors’ and supervisors’ remuneration

Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

(23) Income taxes

A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.

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B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.
E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

(24) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

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(25) Dividends

(26) Revenue recognition

A. Sales of goods
(a) Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.
(b) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
B. Land development and resale
(a) The Company develops and sells residential properties. Revenue is recognised when control over the property has been transferred to the customer. The properties have generally no alternative use for the Company due to contractual restrictions. However, an enforceable right to payment does not arise until legal title has passed to the customer. Therefore, revenue is recognised at a point in time when the legal title has passed to the customer.
(b) The revenue is measured at an agreed upon amount under the contract. The consideration is due when legal title has been transferred. While deferred payment terms may be agreed in rare circumstances, the deferral never exceeds twelve months. The transaction price is therefore not adjusted because the contract does not include a significant financing component.
C. Incremental costs of obtaining a contract

The Company recognises an asset (shown as ‘other non-current assets’) the incremental costs (mainly comprised of sales commissions) of obtaining a contract with a customer if the Company expects to recover those costs. The recognised asset is amortised on a systematic basis that is consistent with the transfers to the customer of the goods or services to which the asset relates. The Group recognises an impairment loss to the extent that the carrying amount of the asset exceeds the remaining amount of consideration that the Group expects to receive less the costs that have not been recognised as expenses.

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D. Construction revenue

(a) The Group provides engineer construction services. Revenue from providing services is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. This is determined based on the actual cost relative to the total cost. Some contracts’ price may change from allowances or similar items, only when the future uncertainty was eliminated, the accumulated amount which was recognised and highly will not incur significant reversal will be listed in the transaction price. The customer pays at the time specified in the payment schedule. If the services rendered exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised.
(b) The Group’s estimate about revenue, costs and progress towards complete satisfaction of a performance obligation is subject to a revision whenever there is a change in circumstances. Any increase or decrease in revenue or costs due to an estimate revision is reflected in profit or loss during the period when the management become aware of the changes in circumstances.

E. Service revenue

(a) The Company provides land development agent services. Revenue from providing services is recognised in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognised based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided. Because the Company developed, plan and managed industrial area on behalf of the government. Services content is determined based on the supervised actual labour hours spent relative to the total expected labour hours.
(b) The Company provided land development agent service which was commissioned some development cases by the government and was responsible for external sales. This was identified as a default obligation which was satisfied with time. The Company recognised revenues based on the proportion of input costs relative to total cost.
(c) The Company’s estimate about revenue, costs and progress towards complete satisfaction of a performance obligation is subject to a revision whenever there is a change in circumstances. Any increase or decrease in revenue or costs due to an estimate revision is reflected in profit or loss during the period when the management become aware of the changes in circumstances.
(d) Please refer to Note 4(8) for the recognition of related revenue,

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(27) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Group’s chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The related information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

None.

(2) Critical accounting estimates and assumptions

Revenue recognition

The Group considers the projects’ specifications and other objective factors in estimating the total project completion cost. The recognised revenue is calculated based on the percentage of the input cost, which the Group regularly assesses the reasonableness. Effects of changes in industry environment and construction status may also affect the total estimated project completion cost and further affect the Group’s revenue recognition.

6. Details of Significant Accounts

(1) Cash and cash equivalents

Cash on hand and revolving funds Checking accounts deposits Demand deposits	December31,2020 3,115 $ 42,970 163,132 209,217 $	December31,2019
		3,167 $ 27,544 128,618
		159,329 $

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. The Group’s restricted cash and cash equivalents has been classified to other current assets. Please refer to Note 8 for details of pledged collaterals.

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(2) Notes and accounts receivable

Notes receivable Accounts receivable Less: Allowance for bad debts	December31,2020 1,578 $ 524,675 7,017) ( ( 519,236 $	December31,2019
		4,462 $ 412,598 4,918)
		412,142 $

A. The Group does not hold any collateral.
B. Information relating to credit risk of accounts receivable and notes receivable is provided in Note 12(2).
C. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows:

December	December	31,2019
Accounts receivable 517,243 $ 1,779 5,653 524,675 $	Accounts receivable 400,565 $ 6,148 5,885 412,598 $	Notes receivable
		4,462 $ - -
		4,462 $

The above ageing analysis was based on past due date.

D. As of December 31, 2020 and 2019, accounts and notes receivable were all from contracts with customers. As of January 1, 2019, the balance of receivables from contracts with customers amounted to $160,773.
E. As at December 31, 2020 and 2019, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes and accounts receivable was $1,578 and $4,462, $524,675 and $412,598, respectively.

(3) Other receivables

Land development receivables Interest receivable Other non-operating receivables, others	December31,2020 3,041,185 $ 31 1,747 3,042,963 $	December31,2019
		1,869,484 $ 25 25,550
		1,895,059 $

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A. Land development agent receivable was generated from the contract “Chiayi County Machouhou Industry Park Development Project ” which was entered into by the Group with Chiayi County Government in May 2013. The Group was commissioned to develop industrial area, the development period was 4 years starting from the date entered into the contract. Additionally, in October 2018, the Group entered into a contract “Chiayi County Machouhou Industry Park 2nd Precision Development Project” with Chiayi County Government and was commissioned to develop industrial area. The development period was 6 years starting from the date entered into the contract.
(a) The details of the land development agent receivable was as follows:

Chiayi County Machouhou Industry Park Development Project Chiayi County Machouhou Industry Park 2nd Precision Development Project	December31,2020 970,697 $ 2,070,488 3,041,185 $	December31,2019 952,801 $ 916,683 1,869,484 $	December31,2020 Accumulated and recognised Servicerevenue 377,269 $ 76,766 454,035 $	Principalunit
				Chiayi County Government "

(b) For the years ended December 31, 2020 and 2019, changes in land development agent receivable were as follows:

Year ended December31,2020 Chiayi County Machouhou Industry Park Development Project Chiayi County Machouhou Industry Park 2nd Precision Development Project Year ended December31,2019 Chiayi County Machouhou Industry Park Development Project Chiayi County Machouhou Industry Park 2nd Precision Development Project	Equity at beginning of period 952,801 $ 916,683 1,869,484 $ Equity at beginning of period 829,668 $ 154,469 984,137 $	Addition Recovered 31,152 $ 13,256) ($ 1,153,805 - 1,184,957 $ 13,256) ($ Addition Recovered 318,167 $ 195,034) ($ 762,214 - 1,080,381 $ 195,034) ($	Outstanding balance
			970,697 $ 2,070,488
			3,041,185 $
			Outstanding balance
			952,801 $ 916,683
			1,869,484 $

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B. Land development agent receivable was pledged to banks as collateral, please refer to Note 8 for details.
C. For the years ended December 31, 2020 and 2019, the Group recognised capitalisation of interest from land development agent receivable from payments on behalf of others to write off interest expenses in the amount of $6,275 and $0, respectively.

(4) Inventories

Merchandise inventory Finished goods Semi-finished goods Work in progress Raw materials Buildings and land held for sale Lands wait for building Construction in progress Prepayment for land purchases Subtotal Less: Allowance for valuation loss ( Total	December31,2020 10,546 $ 10,455 11,732 2,426 9,480 381,306 1,338 1,200 459,731 888,214 8,644) ( 879,570 $	December31,2019
		14,472 $ 8,700 8,561 3,685 14,756 493,456 838 1,890,276 -
		2,434,744 10,021)
		2,424,723 $

A. The cost of inventories recognised as expense for the year:

Cost of goods sold Cost of building Subtotal Add: Cost of engineering sales Other operating costs Total	YearendedDecember31	YearendedDecember31
	2020 114,698 $ 2,274,927 2,389,625 2,333,737 8,826 4,732,188 $	2019
		136,705 $ 3,546,709
		3,683,414 1,544,503 5,365
		5,233,282 $

B. Some inventories were pledged as collaterals for bank borrowings, please refer to Note 8 for details.
C. For the years ended December 31, 2020 and 2019, the amounts of interest capitalisation on inventory were $4,953 and $39,496, please refer to Note 6(25) for details.

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D. On August 16, 2019, the Group entered into a property trading contract with Jean Pacific Development Co., Ltd. and sold lands and structures on the lands on Xinxing Rd., Banqiao Dist., New Taipei City (shaown as inventory-lands wait for building and construction in progress in the total amount of $3,369,506) to Jean Pacific Development Co., Ltd., the total transaction amount was $3,706,318. On November 4, 2019, the transference of property has been completed. As of December 31, 2020, the aforementioned proceeds from trading contract was $3,521,003. In January 2021, the Group has received some of the final proceeds of the trading contract in the amount of $92,658.
E. The Group’s subsidiary, Chang Ji Construction Co., Ltd., jointly developed the lands in Fanlu Township, Chiayi County with the owner of lands and has purchased the lands on No. 193-181 and No. 193-103 in the base of Fanlu Township, Chiayi County. Because the lands were farming and grazing lands, according to the Agricultural Development Act, private legal person can not accept farming and grazing lands, thus, the lands were registered under the name of employee. However, to secure the rights of the Company, the Company has asked the registered person to promise in document that transferring the lands to the Group’s subsidiary, Chang Ji Construction Co., Ltd., after the land category was changed, as a security.

(5) Prepayments

Other current assets Prepayments for construction in progress Excess business tax paid / overpaid VAT Others Guarantees for jointly building Guarantees for construction and bid bonds Restricted assets Proceeds of land construction inputed Others	December31,2020 72,648 $ 7,797 27,567 108,012 $ December31,2020 400,000 $ 38,042 1,385,807 17,196 17,380 1,858,425 $	December31,2019
		383,058 $ 42,938 43,452
		469,448 $
		December31,2019
		400,000 $ 4,889 1,206,550 - 13,173
		1,624,612 $

(6) Other current assets

A. Guarantees for jointly building

In April 2015, the Group has entered into a jointly building contract with the owner of lands on Xinxing Sec., Banqiao Dist., New Taipei City. As of December 31, 2020 and 2019, the Group has paid the performance gurantees for jointly guarantee to the owner of lands both in the amounts of $400,000.

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B. Among the restricted assets, as of December 31, 2020 and 2019, the amounts of $769,531 and $724,438 was for land development agent business, receiving the land bid bonds which were deposited in the trust account by the buyer and the price of land, remaining was time deposits pledged as collaterals by the Group for the banks guarantees and borrowing facilities and reserve account.
C. The Group’s subsidiary, Chang Ji Construction Co., Ltd., jointly developed the lands in Fanlu Township, Chiayi County with the owner who has transferred the lands on No. 193-197 of the base in Fanlu Township, Chiayi County as a price of jointly development. However, according to the jointly development contract, Chang Ji Construction Co., Ltd. has not obtained control of the lands, thus, as of December 31, 2020, the lands has not been accounted.
D. The Group’s subsidiary, Chang Ji Construction Co., Ltd., jointly developed the lands in Fanlu Township, Chiayi County with the owner who has transferred the lands on No. 193-192, No. 193209, No. 193-182 and No. 193-183 of the base in Fanlu Township, Chiayi County as a price of jointly development. However, according to the jointly development contract, Chang Ji Construction Co., Ltd. has not obtained control of the lands. Because the lands were farming and grazing lands, according to the Agricultural Development Act, private legal person can not accept farming and grazing lands, thus, the lands were registered under the name of employee. However, to secure the rights of the Company, the Company has asked the registered person to promise in document that transferring the lands to the Group’s subsidiary, Chang Ji Construction Co., Ltd., after the land category was changed, as a security.

(7) Financial assets at fair value through other comprehensive income

Items Non-current items: Equity instrument Listed stocks Unlisted stocks Revaluation – gross Total	December31,2020 - $ 22,755 22,755 16,071) ( ( 6,684 $	December31,2019 3,403 $ 22,755 26,158 15,791) 10,367 $

A. The Group has elected to classify security investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $6,684 and $10,367 as at December 31, 2020 and 2019, respectively.
B. Because of the adjustment of investment strategy, for the year ended December 31, 2020, the Group sold the security investment in the amount of $5,264, and transferred accumulated gain on disposal as retained earnings in the amount of $1,861.

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C. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

. Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income Cumulative gains (losses) reclassified to retained earnings due to derecognition	2020 2019 1,581 $ 4,762) ($ 1,861 $ - $ YearendedDecember31

D. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

(8) Investments accounted for using equity method

Zhejiang Guyue Longshan Electronic Technology Development Co., Ltd.	December31,2020 180,021 $	December31,2019
		152,860 $

A. Associates
(a) The basic information of the associates that are material to the Group is as follows:

Companyname Zhejiang Guyue Longshan Electronic Technology Development Co., Ltd.	Principal place ofbusiness Mainland China	December 31, December 31, 2020 2019 46% 46% Shareholdingratio	Nature of Methods of relationship measurement Associates Equity method	Methods of measurement
		December 31, 2020 46%

(b) The summarised financial information of the associates that are material to the Group is as follows:

Balance sheets

Current assets Non-current assets Current liabilities Total net assets Share in associate's net assets Carrying amount of the associate	TechnologyDevelopmentCo.,Ltd. Zhejiang Guyue Longshan Electronic	TechnologyDevelopmentCo.,Ltd. Zhejiang Guyue Longshan Electronic
	December31,2020 361,112 $ 100,053 69,816) ( 391,349 $ 180,021 $ 180,021 $	December31,2019
		288,241 $ 104,312 60,250) (
		332,303 $
		152,860 $
		152,860 $

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Statements of comprehensive income

Revenue Total comprehensive income for the period Share of the comprehensive income recognised	TechnologyDevelopmentCo.,Ltd. Zhejiang Guyue Longshan Electronic	TechnologyDevelopmentCo.,Ltd. Zhejiang Guyue Longshan Electronic
	YearendedDecember 31
	2020 245,679 $ 52,643 $ 24,216 $	2019
		253,320 $
		47,673 $
		21,930 $

B. The Group has loss on investments accounted for under equity method amounted to $24,216 and $21,930 for the years ended December 31, 2020 and 2019, respectively.

(9) Property, plant and equipment

January 1, 2020 Cost Accumulated depreciation and impairment 2020 At January 1 Additions Reclassifications Depreciation expense At December 31 December 31, 2020 Cost Accumulated depreciation and impairment		Land		Buildings and structures		Machinery and equipment		Others		Total
	122,920 $ - 122,920 $ 122,920 $ - 51,526) ( - 71,394 $ 71,394 $ - 71,394 $		80,478 $ 34,929) ( 45,549 $ 45,549 $ 112 2,508) ( 1,444) ( 41,709 $ 67,286 $ 25,577) ( 41,709 $		( ( (	618 $ 514) 104 $ 104 $ - - 65) 39 $ 435 $ 396) 39 $	( ( (	24,586 $ 19,362) 5,224 $ 5,224 $ 1,514 - 2,179) 4,559 $ 24,486 $ 19,927) 4,559 $	228,602 $ 54,805) ( 173,797 $ 173,797 $ 1,626 54,034) ( 3,688) ( 117,701 $ 163,601 $ 45,900) ( 117,701 $

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January 1, 2019 Cost Accumulated depreciation and impairment 2019 At January 1 Additions Depreciation expense At December 31 December 31, 2019 Cost Accumulated depreciation and impairment		Land		Buildings and structures		Machinery and equipment		Others		Total
		122,920 $ - 122,920 $ 122,920 $ - - 122,920 $ 122,920 $ - 122,920 $	( ( (	80,724 $ 33,505) 47,219 $ 47,219 $ - 1,670) 45,549 $ 80,478 $ 34,929) 45,549 $	( ( (	618 $ 448) 170 $ 170 $ - 66) 104 $ 618 $ 514) 104 $	( ( (	21,620 $ 16,867) 4,753 $ 4,753 $ 3,360 2,889) 5,224 $ 24,586 $ 19,362) 5,224 $	( ( (	225,882 $ 50,820) 175,062 $ 175,062 $ 3,360 4,625) 173,797 $ 228,602 $ 54,805) 173,797 $

A. For the years ended December 31, 2020 and 2019, no interest expense of property, plant and equipment was capitalised.
B. For the year ended December 31, 2020, the Group transferred some property, plant and equipment into investment property in the amount of $65,877 based on nature.
C. For the year ended December 31, 2020, information about the transference into property, plant and equipment is provided in Note 6(10)D.
D. Refer to Note 8 for further information on property, plant and equipment pledged to others as collateral.

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(10) Investment property

At January 1 Land Buildings and structures Accumulated depreciation At January 1 Reclassifications Depreciation expense At December 31 At December 31 Land Buildings and structures Accumulated depreciation (	2020 3,855 $ 15,426 7,163) ( ( 12,118 $ 12,118 $ 54,034 482) ( 65,670 $ 55,381 $ 24,584 14,295) ( 65,670 $	2019 3,855 $ 110,197 101,658) 12,394 $ 12,394 $ - 276) ( 12,118 $ 3,855 $ 15,426 7,163) 12,118 $

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the year	YearendedDecember31	YearendedDecember31
	2020 1,231 $ 482 $	2019
		2,888 $
		276 $

The Group recognised rent income based on the operating lease agreement, which belongs to fixed lease payments.

B. The fair value of the investment property held by the Group as at December 31, 2020 and 2019 was $99,520 and $17,272, respectively, which was valued by independent valuers. Valuations were made using the income approach. According to the difference estimation of its reproduction cost, nature of usage, use situation now, use benefit, maintenance, depreciation and other factors.
C. Please refer to Note 6(9)B. for details of the transference into property for the year ended December 31, 2020.
D. For the year ended December 31, 2020, the Group transferred some investment property into property, plant and equipment which amounted to $11,843 based on nature.

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E. Refer to Note 8 for further information on investment property pledged to others as collateral.

(11) Short-term borrowings

Type of Borrowings Bank borrowings Secured borrowings Unsecured borrowings Type of Borrowings Bank borrowings Secured borrowings Unsecured borrowings	December31,2020 445,917 $ 595,354 1,041,271 $ December31,2019 588,223 $ 490,738 1,078,961 $	Interest raterange Collateral 1%-2.45% Pledged time deposits, allowance account, inventory, land, buildings and structures (shown as property, plant and equipment) and treasury shares. " None Interest raterange Collateral 0.49%-2.36% Pledged time deposits, allowance account, inventory, land, buildings and structures (shown as property, plant and equipment) and treasury shares. " None	Collateral

Details of collateral for short-term borrowings are provided in Note 8.

(12) Short-term notes and bills payable

Commercial paper payable Interest rate range	December31,2020 105,000 $ 0.42%-0.8%	December31,2019
		1,386,400 $
		0.67%-1.35%

Aforementioned short-term notes and bills were issued by financial institutes, please refer to Note 8 for details of collaterals.

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(13) Accounts payable

Other current liabilities Construction payable Others Deposit received in advance from disposal of industrial area Advance receipts from customers Current portion Current portion or exercise of put options Others	December31,2020 466,362 $ 29,705 496,067 $ December31,2020 1,046,789 $ - 833,547 498,957 80,712 2,460,005 $	December31,2019
		317,765 $ 46,879
		364,644 $
		December31,2019
		1,046,789 $ 2,651 82,000 - 6,600
		1,138,040 $

(14) Other current liabilities

A. Deposit received in advance from disposal of industrial area and bid bonds from biding lands were from the Company’s land development agent business which was commissioned by Chiayi County Government, for lands bid based on “Chiayi County Machouhou Industry Park Development Project”, please refer to Note 6(3) for details of external customers’ proceeds for land purchase and bid bonds and related proceeds receivable from land development agent.
B. Please refer to Note 6(15) for details of current portion or exercise of put options.
C. Please refer to Note 6(16) for details of long-term borrowings, current portion.

(15) Bonds payable

Bonds payable Less: Discount on bonds payable ( Less: Current portion or exercise of put options (	December31,2020 500,000 $ 1,043) ( 498,957 498,957) - $	December31,2019
		500,000 $ 2,293)
		497,707 -
		497,707 $

A. The competent authority has approved the Company’s first time raising and issuance of domestic secured corporate bonds. The bonds are with a total issuance amount of $500,000 thousand dollars and a coupon rate of 1.15%, cover a 5-year period of issuance and listed on the Taiwan Over-The-Counter Securities Exchange with a circulation period from November 11, 2016 and November 11, 2021. The common corporate bonds were repaid at once by cash at face value when matured. The pledged method was performed with guarantee of corporate bonds based commissioned guarantee contract by Taiwan Cooperative Bank.
B. Aforementioned corporate bonds payable was guaranteed and issued by financial institutes. Please refer to Note 8 for details of collateral.

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- (16) Long term borrowings

Borrowing period and Type of Borrowings repayment term Bank’s unsecured borrowings The Shanghai Commercial & Savings Bank Borrowing period is from June 12, 2019 to March 1, 2021, interest is payable monthly Taiwan Business Bank Co., Ltd. Borrowing period is from May 14, 2020 to May 14, 2023, interest is payable monthly Hua Nan Commercial Bank, Ltd. Borrowing period is from August 20, 2020 to August 20, 2023, interest is payable monthly Taiwan Cooperative Bank Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Taiwan Business Bank Co., Ltd. Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Chang Hwa Commercial Bank, Ltd. Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Agricultural Bank of Taiwan Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Hua Nan Commercial Bank, Ltd. Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Land Bank of Taiwan Borrowing period is from April 13, 2020 to February 12, 2026, interest is payable monthly Borrowing period and Type of Borrowings repayment term Bank’s unsecured borrowings The Shanghai Commercial & Savings Bank Borrowing period is from June 12, 2019 to March 1, 2021, interest is payable monthly Less: Current portion Less: Current portion	Interest rate range 1.75% 1.845%- 1.95% 1.95% 3.17% 3.17% 3.17% 3.17% 3.17% 3.17% Interest rate range 2.00%	Collateral None " " " " " " " " Collateral None	December 31,2020 38,700 $ 15,000 17,778 227,830 168,580 168,580 111,610 55,790 55,790 859,658 833,547) ( 26,111 $ December 31,2019 82,000 $ 82,000) ( - $

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A. The financial ratios in the annual consolidated financial statements shall be maintained as follows:

Tangible equity interest: shareholders’ equity net of intangible assets shall not lower than NT$ 2.5 billion.

B. The development case shall complete the first announce for selling or registration in 2 years starting from the date of first drawn.
C. In 2 years starting from the date of the first announce for selling or registration, the sales rate shall reach 25% (including).
D. In 2 years starting from the date of the first announce for selling or registration, the sales rate shall reach 35% (including).
E. In the term of the credit borrowing, if there are shareholder’s payment on behalf of the Company, the Company shall obtain the agreement of the shareholder in document which agrees that if the credit borrowing has not been repaid, the Company can not repay shareholder’s payment on behalf of the Company. The interest rate of shareholder’s payment on behalf of the Company can not higher than the interest rate of the credit borrowing at current or after. However, if shareholder’s payment on behalf of the Company is invested in the Company, this is not restricted.

For the years ended December 31, 2020 and 2019, the Group has not violated aforementioned promised items in both years.

(17) Pensions

Defined contribution plan

A. Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
B. The pension costs under the defined contribution pension plan of the Group for the years ended December 31, 2020 and 2019 were $8,664 and $9,605, respectively.

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(18) Common stock

A. As of December 31, 2020, the Company’s authorised capital was $2,500,000, and the paid-in capital was $2,287,135 with a par value of $10 (in dollars) per share, totaling 228,714 thousand shares. Information of movements in the number of the Company’s ordinary shares outstanding are as follows (thousand shares):

At January 1 Purchase of treasury shares At December 31	2020 (Note) 228,714 2,525) ( 226,189	2019 (Note)
		228,714 -
		228,714

Note: The number of the parent company’s shares outstanding, including shares held by the subsidiaries
B. Treasury shares
(a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

Name of company holdingthe shares	December	31,2020
	No. ofshares 2,525 thousand shares 28,125 thousand shares December	Bookvalue
The Company Subsidiaries- Chang Ji Construction Co., Ltd. Total Name of company holdingthe shares		26,130 $ 255,837
		281,967 $
		31,2019
	No. ofshares 28,125 thousand shares	Bookvalue
Subsidiaries- Chang Ji Construction Co., Ltd.		255,837 $

(b) On November 12, 2015, the Company’s Board of Directors approved to transfer shares to employees and repurchased treasury shares in the amount of 10,000 thousand. As of January 2016 (fulfill a period of execution), the treasury shares which were repurchased totaling 4,291 thousand shares with a total amount of $44,095. As of January 29, 2019, because there were treasury shares which has not been transferred when the execution period was fulfilled, 4,291 thousand treasury shares were canceled and reduced the capital. The number of outstanding shares was 228,714 thousand shares after the capital reduction.

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(c) On March 27, 2020, the Company’s Board of Directors approved to repurchased 6,000 thousand treasury shares. As of May 29, 2020 (fulfill a period of execution), the Company repurchased 2,525 thousand treasury shares in total with a total amount of $26,130.
(d) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.
(e) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.
(f) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

(g) Information about collaterals is provided in Note 8(2).

(19) Capital surplus

(20) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The remainder, if any, to be retained or to be appropriated shall be resolved by the stockholders at the stockholders’ meeting.
B. The Company’s dividend policies were as follows: the Company’s industrial life cycle was in growth stage, in order to match with the Company’s long-term financial plan for sustainable operation, the Company’s dividend policies adopted residual dividend policy. According to the Company’s capital budget plan, the stock dividend shall be distributed first to retain demand capital, if any, shall be distributed as cash dividend. If cash dividend can be distributed in the current year, the cash dividend shall be adjusted to not lower than 5% of total dividend.

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C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
D. Special reserve
(a) Special reserve (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.
(b) According to Jin-Guan-Zheng-Fa-Zi No.1010047490, the accounting of public issued company invested in the subsidiary who hold the shares of parent shall follow Securities and Exchange Act paragraph 1 of Article 41. Thus, listed and emerging companies shall not distribute special reserve at the same amount which was calculated from the difference between the market price and carrying amount of shares which was parent company’s shares held by the subsidiary and the shareholding ratio. Afterward, if the market price has reversed, listed and emerging company shall reverse special reserve based on the shareholding ratio.
E. Appropriation of earnings

The appropriations of earnings of years 2019 and 2018 as resolved by the shareholders at their meetings on June 19, 2020 and June 24, 2019 are as follows:

YearendedDecember31	YearendedDecember31	YearendedDecember31
Dividends per Amount share (indollars) 17,544 $ 9,222 114,357 0.50 $ 141,123 $ 2019	2018
Amount 17,544 $ 9,222 114,357 141,123 $	Amount - $ - - - $	Dividends per share (indollars)
		- $

F. The appropriation of 2020 earnings was resolved by the Board of Directors on March 25, 2021. The above appropriation of earnings of year 2020 is yet to be resolved by the shareholders in 2021.

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Related distribution of earnings were as follows:

			YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
					Dividends per
			Amount	share (indollars)
Legal surplus		$	31,521
Special reserve
reversed	(		2,652)
Cash dividend			180,951	$	0.80
Total		$	209,820

As of March 25, 2021, the aforementioned proposal for 2020 earnings distribution has not yet been resolved by the shareholders.

(21) Operating revenue

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the recognition of goods and services over time and at a point in time in the following major product lines:

Year ended December 31, 2020 Timing of revenue recognition At a point in time Over time Year ended December 31, 2019 Timing of revenue recognition At a point in time Over time	Sales revenue 131,713 $ - 131,713 $ Sales revenue 171,201 $ - 171,201 $	Building revenue 2,755,094 $ - 2,755,094 $ Building revenue 3,900,996 $ - 3,900,996 $	Construction revenue - $ 2,245,136 2,245,136 $ Construction revenue - $ 1,508,355 1,508,355 $	Service revenue - $ 85,648 85,648 $ Service revenue - $ 43,280 43,280 $	Total
					2,886,807 $ 2,330,784
					5,217,591 $
					Total
					4,072,197 $ 1,551,635
					5,623,832 $

B. Contract assets and liabilities

(a) The Group has recognised the following revenue-related contract assets and liabilities:

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December 31, 2020 December 31, 2019 January 1, 2019

	December31,2020	December31,2019	January1,2019
Contract assets: Contract assets-proceeds from building contract Contract liabilities: Contract liabilities- proceeds from building contract Contract liabilities- proceeds from sale contract Total	421,497 $ December31,2020 174,032 $ 1,530 175,562 $	509,855 $ December31,2019 263,719 $ 318,926 582,645 $	682,764 $
			January1,2019
			266,787 $ 117,249
			384,036 $

(b) Revenue recognised that was included in the contract liability balance at the beginning of the period

Revenue recognised that was included in the contract liability balance at the beginning of the period Building pre-sale contract	YearendedDecember31	YearendedDecember31
	2020 302,756 $	2019
		- $

C. The Company contracted with CPC Corporation, Taiwan for “Subsea pipeline replacement project for the second overseas oil unloading baoy of Taoyuan Oil Retinery ”, the construction was delayed due to the climate which was not responsible by anyone, causing disputes on the construction proceeds between both parties, the Company is conciliated with CPC Corporation, Taiwan by Complaint Review Board for Government Procurement now.

(22) Interest income

Interest income from bank deposits Other interest income	YearendedDecember 31	YearendedDecember 31
	2020 953 $ 10,888 11,841 $	2019
		1,554 $ 2,066
		3,620 $

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(23) Other income

Rental revenue Other income, others	YearendedDecember 31	YearendedDecember 31
	2020 1,501 $ 7,031 8,532 $	2019
		2,888 $ 11,423
		14,311 $

(24) Other gains and losses

			YearendedDecember31	YearendedDecember31
			2020	2019
Foreign exchange losses, net	($		357)	($	822)
Gains on disposals of investments			5,477	(	156)
Others	(		1,974)	(	1,005)
		$	3,146	($	1,983)

(25) Finance costs

			YearendedDecember31	YearendedDecember31
			2020	2019
Interest expenses:
Bank borrowings		$	29,901	$	65,927
Payment on interest of corporate bond			5,766		5,750
Amortisation of discounts on bonds			1,250		1,250
Others			44		29
Less: Capitalisation of qualifying assets	(		4,953)	(	39,496)
Payment of industrial area interest on behalf
of others	(		6,275)		-
Finance costs		$	25,733	$	33,460

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(26) Expenses by nature

YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
Classified as Classified as Operating Operating Costs Expenses Total 137,207 $ 93,426 $ 230,633 $ 383 3,787 4,170 - 950 950 9 1,704 1,713 - 70 70 Year ended December 31, 2019		Total
Classified as Operating Costs 149,613 $ 1,193 - 1 -	Classified as Operating Expenses 78,565 $ 3,708 - 2,388 -	Total
		228,178 $ 4,901 - 2,389 -

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(27) Employee benefit expense

Year ended December 31, 2020

	YearendedDecember 31,2020	YearendedDecember 31,2020	2020
Salary expenses Labour and health insurance fees Pension costs Other personnel expenses Salary expenses Labour and health insurance fees Pension costs Other personnel expenses	Classified as Classified as Operating Operating Costs Expenses Total 115,864 $ 83,433 $ 199,297 $ 10,649 5,226 15,875 6,141 2,523 8,664 4,553 2,244 6,797 137,207 $ 93,426 $ 230,633 $ YearendedDecember31,2019		Total
			199,297 $ 15,875 8,664 6,797
			230,633 $
	Classified as Operating Costs 124,464 $ 12,639 7,167 5,343 149,613 $	Classified as Operating Expenses 67,785 $ 4,615 2,438 3,727 78,565 $	Total
			192,249 $ 17,254 9,605 9,070
			228,178 $

A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall not be 8% for employees’ compensation and not higher than 2% for directors’ remuneration.
B. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $26,707 and $21,149, respectively; while directors’ remuneration was accrued at $6,677 and $5,287, respectively. The aforementioned amounts were recognised in salary expenses.

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C. As of December 31, 2020 and 2019, the Company had 224 and 247 employees respectively, excluding 5 directors for the both years.

(28) Income taxes

A. Tax (income) expense

Components of income tax (income) expense:

Current tax: Current tax on profits for the year Tax on undistributed earnings Prior year income tax (over) underestimation Total current tax Deferred tax: Origination and reversal of temporary differences Income tax (income) expenses	YearendedDecember31	YearendedDecember31
	2020 1,765 $ 2,701 1,942 6,408 20,535) ( 14,127) ($	2019
		6,987 $ 310 134
		7,431
		59,267
		66,698 $

B. Reconciliation between income tax (income) expense and accounting profit

			YearendedDecember31	YearendedDecember31
			2020	2019
Tax calculated based on profit before tax and		$	63,964	$	13,720
statutory tax rate (note)
Expenses disallowed and tax exempt income
by tax regulation	(		118,904)	(	9,543)
Increment tax on land value			1,766		2,810
Temporary differences not recognised as
deferred tax assets	(		1,254)	(	1,693)
Tax losses not recognised as deferred tax
assets	(		34,895)		-
Change in assessment of realisation of
deferred tax assets			72,032		60,960
Tax on undistributed earnings			2,701		310
Prior year income tax under (over) estimate			463		134
Income tax (income) expenses	($		14,127)	$	66,698

Note: The basis for computing the applicable tax rate are the rates applicable in the respective countries where the Group entities operate.

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C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

				2020	2020
						Recognised in
						other
			Recognised in		comprehensive
		AtJanuary1		profitor loss		income	At	December 31
Temporary differences:
-Deferred income tax assets:
Unrealised losses on doubtful
debts	$	677	$	-	$	-	$	677
Unrealised loss for market value
decline and obsolete and slow-
moving inventories		2,004	(	275)		-		1,729
Deferred capitalised interest
payments		476	(	159)		-		317
Unrealised loss on foreign
investment		4,205	(	3,888)		-		317
Unrealised impairment loss		84		-		-		84
Deferred recognition expenses		7,401	(	7,352)		-		49
Loss carryforward		92,496		29,452		-		121,948
Subtotal		107,343		17,778		-		125,121
-Deferred tax liabilities:
Unrealised exchange gain	(	151)		151		-		-
Currency translation differences	(	3,136)		-		-	(	3,136)
Unrealised gain on foreign
investments	(	11,229)	(	551)		-	(	11,780)
Subtotal	(	14,516)	(	400)		-	(	14,916)
Total	$	92,827	$	17,378	$	-	$	110,205

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2019

2019	2019	2019	2019	2019	2019
Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are a follows: Recognised in Recognised in other comprehensive AtJanuary1 profitor loss income At December 31 Temporary differences: -Deferred income tax assets: Unrealised losses on doubtful debts 677 $ - $ - $ 677 $ Unrealised loss for market value decline and obsolete and slow- moving inventories 2,004 - - 2,004 Deferred capitalised interest payments 636 160) ( - 476 Unrealised loss on foreign investment 22,731 18,526) ( - 4,205 Unrealised impairment loss 84 - - 84 Deferred recognition expenses 5,363 2,038 - 7,401 Loss carryforward 134,272 41,776) ( - 92,496 Subtotal 165,767 58,424) ( - 107,343 -Deferred tax liabilities: Unrealised exchange gain 250) ( 99 - 151) ( Currency translation differences 6,568) ( 3,432 - 3,136) ( Unrealised gain on foreign investments 6,855) ( 4,374) ( - 11,229) ( Subtotal 13,673) ( 843) ( - 14,516) ( Total 152,094 $ 59,267) ($ - $ 92,827 $ Amount filed/ Unrecognised deferred tax Year incurred assessed Unused amount assets Expiry year 2012 47,167 $ 47,167 $ - $ 2022 2013 131,026 131,026 - 2023 2014 47,655 47,655 - 2024 2015 37,887 37,887 - 2025 2016 10,737 10,737 - 2026 2018 179,615 172,219 - 2028 2020 337,524 337,524 174,476 2030 791,611 $ 784,215 $ 174,476 $ December31,2020
	Year incurred 2012 2013 2014 2015 2016 2018 2020	Amount filed/ assessed 47,167 $ 131,026 47,655 37,887 10,737 179,615 337,524 791,611 $	Unused amount 47,167 $ 131,026 47,655 37,887 10,737 172,219 337,524 784,215 $	Unrecognised deferred tax assets - $ - - - - - 174,476 174,476 $	Expiry year
					2022 2023 2024 2025 2026 2028 2030

D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

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December 31, 2019

Year incurred 2012 2013 2014 2015 2016 2018	Amount filed/ assessed 47,167 $ 131,026 47,655 37,886 10,737 188,011 462,482 $	Unused amount 47,167 $ 131,026 47,655 37,886 10,737 188,011 462,482 $		Unrecognised deferred tax assets - $ - - - - - - $	Expiry year
					2022 2023 2024 2025 2026 2028

E. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

Deductible temporary differences	December31,2020 6,311 $	December31,2019
		7,883 $

F. Income tax returns of the Company and subsidiaries, Shin Ding Engineering Consultants Co., Ltd. and Chang Ji Construction Co., Ltd. through 2018 have been assessed and approved by the Tax Authority.

(29) Earnings per share

Year	endedDecember 31,2020	endedDecember 31,2020
Amount after tax 315,653 $ - 315,653 $	Weighted average number of ordinary shares outstanding (sharein thousands) 198,925 2,468 201,393	Earnings per share (indollars)
		1.59 $
		1.57 $

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Year	endedDecember 31,2019	endedDecember 31,2019
Amount after tax 175,432 $ - 175,432 $	Weighted average number of ordinary shares outstanding (sharein thousands) 200,589 1,748 202,337	Earnings per share (indollars)
		0.87 $
		0.87 $

(30) Transactions with non-controlling interest

Acquisition of additional equity interest in a subsidiary

For the years ended December 31, 2020 and 2019, the Company purchased 2,966,000 shares and 41,000 shares which were held by the employees of Chang Ji Construction Co., Ltd. by cash of $34,260 and $410, respectively. The carrying amount of non-controlling interest in Chang Ji Construction Co., Ltd. was $36,121 and $477 at the acquisition date. This transaction resulted in a decrease in the non-controlling interest by $36,121 and $477 and a decrease in the equity attributable to owners of the parent by $1,861 and $67, respectively. The effect of changes in interests in Chang Ji Construction Co., Ltd. on the equity attributable to owners of the parent for the years ended December 31, 2020 and 2019 is shown below:

Carrying amount of non-controlling interest acquired Consideration paid to non-controlling interest Capital surplus - difference between proceeds on actual acquisition of equity interest in a subsidiary and its carrying amount	2020 2019 36,121 $ 477 $ 34,260) ( 410) ( 1,861 $ 67 $ YearendedDecember31
	2020 36,121 $ 34,260) ( 1,861 $

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(31) Changes in liabilities from financing activities

Short-term Short-term notes and bills borrowings payable January 1, 2020 1,078,961 $ 1,386,400 $ Changes in cash flow from financing activities 37,690) ( 1,281,400) ( Changes in other non-cash items - - December 31, 2020 1,041,271 $ 105,000 $ Short-term Short-term notes and bills borrowings payable January 1, 2019 1,831,805 $ 3,283,900 $ Changes in cash flow from financing activities 752,844) ( 1,897,500) ( Changes in other non-cash items - - December 31, 2019 1,078,961 $ 1,386,400 $	Long-term borrowings (Long-term borrowings, currentportion) 82,000 $ 777,658 - 859,658 $ Long-term borrowings (Long-term borrowings, currentportion) 80,000 $ 2,000 - 82,000 $	Bonds payable (Corporate bond, Liabilities from financing currentportion) activities-gross 497,707 $ 3,045,068 $ - 541,432) ( 1,250 1,250 498,957 $ 2,504,886 $ Bonds payable (Corporate bond, Liabilities from financing currentportion) activities-gross 496,457 $ 5,692,162 $ - 5,692,162) ( 1,250 1,250 497,707 $ 3,045,068 $	Liabilities from financing activities-gross
			3,045,068 $

7. Related Party Transactions

(1) Significant related party transactions

Company name Relationship with the Company Rex-Stone International Co., Ltd. Associates

(2) Transactions with related parties

A. Operating revenue

Year ended D Construction revenue 2020 Associates $ 35,552

(3) Key management compensation

Salaries and other short-term employee benefits Post-employment benefits Total	YearendedDecember 31	YearendedDecember 31
	2020 39,149 $ 584 39,733 $	2019
		31,222 $ 542
		31,764 $

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8. Pledged Assets

(1) The Group’s assets pledged as collateral are as follows:

Pledgedasset Inventory-buildings and land held for sale Inventory-Construction in progress Other receivables -Land development agent receivable Other current assets -Certificate of deposit -Reserve account -Trust account -Jointly building guarantee, construction guarantee and bid bonds Property, plant and equipment Investment property Other non-current assets -Guarantee deposits paid -Reserve account	December31,2020 December31,2019 286,575 $ 465,116 $ - 1,082,650 3,041,185 1,869,484 24,305 37,110 519,591 363,767 841,911 805,673 438,042 404,889 111,253 166,788 65,670 12,118 14,056 9,353 - 152,934 5,342,588 $ 5,369,882 $ Bookvalue	Purpose
	December31,2020 286,575 $ - 3,041,185 24,305 519,591 841,911 438,042 111,253 65,670 14,056 - 5,342,588 $
		Guarantee for financing limit and short-term notes and bills payable Guarantee for short-term notes and bills payable Construction guarantee, performance guarantee and guarantee for financing limit Performance guarantee, guarantee for financing limit and bonds payable Performance guarantee -Jointly performance and building guarantee, construction guarantee and bid bonds Guarantee for financing limit Guarantee for financing limit General deposits and for use of golf club card Bonds payable Performance guarantee and guarantee for financing limit

(2) As of December 31, 2020 and 2019, Chang Ji Construction Co., Ltd., pledged 28,125 thousand shares and 22,625 thousand shares of the Company (shown as “treasury share”) for borrowing.

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9. Significant Contingent Liabilities and Unrecognised Contract Commitments

Commitments

Except for the description in Note 6(6), the Group has significant commitments and contingencies as follows:

A. Guarantee

(a) The Group entered into commission guarantee contract or provided time deposits as collateral for bid bonds, performance guarantee, prepaid guarantee and other construction guarantee which were related with construction contract and commissioned banks to be joint guarantor. As of December 31, 2020, the guarantee amount was $1,652,493.
(b) As of December 31, because of the demand of construction owner, 2020, the Group signed a note for performance guarantee in the amount of $1,358,543.
B. As of December 31, 2020, the Group has unused letters of credit in the amount of $261,447 for purchasing materials and equipments.
C. As of December 31, 2020, because the Group entered into outsourcing construction contract, the Group has construction payables which shall be paid in the future in the amount of $1,123,999.
D. As of December 31, 2020, the Group entered into pre-sale house and land contracts which has a price of $10,330 with customer and has received $1,530 according to the contracts.
E. As of December 31, 2020, the Group entered into land purchase contracts which has not been transferred with a price of $493,426 and has paid $443,020 according to the contracts.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

A. On March 25, 2021, the Company’s Board of Directors resolved the appropriation of 2020 earnings and the amount of employees’ compensation and directors’ remuneration, please refer to Note 6(20)F. and Note 6(27) for details.
B. On January 15, 2021, the Company entered into a contract, “Tainan Chigu Technology Industry Park Precision Development Project”, with Tainan City Government.

12. Others

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings

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(including ‘current and non-current borrowings’ as shown in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as ‘equity’ as shown in the consolidated balance sheet plus net debt.

The gearing ratios at December 31, 2020 and 2019 were as follows:

Total borrowings Less: Cash and cash equivalents ( Net debt Total equity Total capital Gearing ratio	December 31, 2020 2,504,886 $ 209,217) ( 2,295,669 3,141,092 5,436,761 $ 42.22%	December31,2019 3,045,068 $ 159,329) 2,885,739 2,982,913 5,868,652 $ 49.17%

(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets of investments in equity instruments designated at fair value through other comprehensive income: Financial assets at amortised cost Cash and cash equivalents Notes receivable Accounts receivable Other receivables Guarantee deposits paid Other financial assets Financial liabilities Financial liabilities at amortised cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other accounts payable Bonds payable (including current portion) Long-term borrowings (including current portion) Guarantee deposits received	December31,2020 6,684 $ 209,217 1,578 517,658 3,042,963 14,056 1,823,849 5,616,005 $ December31,2020 1,041,271 $ 105,000 3,179 496,067 83,874 498,957 859,658 60,912 3,148,918 $	December31,2019
		10,367 $ 159,329 4,462 407,680 1,895,059 9,353 1,764,373
		4,250,623 $
		December31,2019
		1,078,961 $ 1,386,400 21,875 364,644 71,696 497,707 82,000 1,811
		3,505,094 $

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B. Financial risk management policies

The Group’s financial risk primarily was composed of the risk following financial instrument investment and exchange rate risk of foreign currency transaction. The Group always adopted strictest control standard on the financial risk of each financial instrument investment. Every financial investments and operations were estimated for its possible market risk, credit risk, liquidity risk and cash flow risk in all dimension, the Group must choose the minimum risk. The Group managed the exchange rate risk of foreign currency transaction was based on the strategical risk management target, searched for the optimal risk position and maintained adequate liquidity position to achieve best hedge strategy.

C. Significant financial risks and degrees of financial risks
(a) Market risk

Exchange rate risk

i. The Group’s businesses involve some non-functional currency operations. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

December 31, 2020

Book value Degree of Affected Affected (NTD) variation profitor loss equity 62,523 $ 1% 625 $ - $ 180,265 $ 1% - $ 1,803 $ 7,615 $ 1% 76) ($ - $ Book value Degree of Affected Affected (NTD) variation profitor loss equity 57,968 $ 1% 580 $ - $ 153,193 $ 1% - $ 1,532 $ 7,257 $ 1% 73) ($ - $ Sensitivityanalysis December 31,2019 Sensitivityanalysis	Sensitivityanalysis	Sensitivityanalysis
Book value (NTD) 57,968 $ 153,193 $ 7,257 $
	Degree of Affected variation profitor loss 1% 580 $ 1% - $ 1% 73) ($	Affected equity - $ 1,532 $ - $

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ii. Total exchange loss, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2020 and 2019, amounted to $357 and $822, respectively.

Price risk

The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

Cash flow and fair value interest rate risk

The Group’s interest rate risk arises from short-term bank borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. For the years ended December 31, 20202 and 2019, the Group’s borrowing at floating rate was calculated in New Taiwan dollars, and when the market rate increased 1%, the cash outflow will increase $20,059 and $25,474, respectively.

(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored. Credit risk arises from deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers, including outstanding receivables.
ii. For the years ended December 31, 2020 and 2019, no credit limits were exceeded during the reporting periods, and management does not expect any significant losses from nonperformance by these counterparties.
iii. The Group adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:
iv. If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

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v. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.
vi. The Group classifies customer’s accounts receivable and contract assets in accordance with customer types. The Group applies the modified approach using a provision matrix based on the loss rate methodology to estimate the expected credit loss.
vii. The Group used the forecastability of Taiwan Institute of Economic Research boom observation report to adjust historical and timely information to assess the default possibility of accounts receivable. On December 31, 2020 and 2019, the provision matrix and loss rate methodology were as follows:

December 31, 2020 Expected loss rate Total book value Loss allowance December 31, 2019 Expected loss rate Total book value Loss allowance	Notpastdue 0%-2.44% 517,243 $ 37 Notpastdue 0%-0.17% 400,565 $ 2	1 to 120 days pastdue 2.44%-80.45% 1,779 $ 1,327 1 to 120 days pastdue 0.17%-20% 6,148 $ 2	Over 121 days pastdue 80.45%-100% 5,653 $ 5,653 Over 121 days pastdue 20%-100% 5,885 $ 4,914	Total
				524,675 $ 7,017 Total
				412,598 $ 4,918

viii. Movements in relation to the Group applying the modified approach to provide loss allowance for notes receivable and accounts receivable are as follows:

2020	2020	2020
Accounts receivable Notes receivable 4,918 $ - $ 2,099 - 7,017 $ - $ 2019		Notes receivable - $ -
		- $
Accounts receivable 4,918 $	Notes receivable - $

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(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities (Note 6(26)) at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements.
ii. The Group has the following undrawn borrowing facilities:

Expiring within one year Expiring beyond one year	December31,2020 1,680,296 $ 5,211,820 6,892,116 $	December31,2019
		1,496,412 $ 6,000,000
		7,496,412 $

As of December 31, 2020 and 2019, the Group’s undrawn borrowing facilities which will expire beyond one year were $5,211,820 and $6,000,000, respectively, which were the execution fund borrowing of “Chiayi County Machouhou Industry Park 2nd Precision Development Project” and described in Note 6(16).

iii. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

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Non-derivative financial liabilities:
December 31, 2020
Short-term borrowings
Short-term notes and bills payable
Notes payable
Accounts payable
Other payables
Lease liability
Bonds payable (including current
portion)
Long-term borrowings (including
current portion)
Guarantee deposits received
Non-derivative financial liabilities:
December 31, 2019
Short-term borrowings
Short-term notes and bills payable
Notes payable
Accounts payable
Other payables
Bonds payable
Long-term borrowings (including
current portion)
Guarantee deposits received

Within 1year
Between 1 and 5 years
1,047,294
$ -
$ 105,000
-
3,179
-
281,346
214,713
83,613
-
1,578
4,477
506,004
-
45,478
938,257
-
60,912
Within 1year
Between 1 and 5 years
1,084,370
$ -
$ 1,386,400
-
21,875
-
277,919
86,725
71,696
-
7,000
506,004
-
83,914
-
1,811

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and beneficiary certificates is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.
B. Fair value information of investment property at cost is provided in Note 6(10).

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C. Financial instruments not measured at fair value

D. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2020 and 2019 are as follows:
(a) The related information of natures of the assets and liabilities is as follows:

December 31, 2020 Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income Equity securities December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income Equity securities	Level 1 - $ Level 1 1,926 $	Level 2 - $ Level 2 - $	Level3 6,684 $ Level3 8,441 $	Total
				6,684 $
				Total
				10,367 $

(b) The methods and assumptions the Group used to measure fair value are as follows:
i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Listed shares Open-end fund Market quoted price Closing price Net asset value

ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters).
iii. When assessing non-standard and low-complexity financial instruments, for example,

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debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

E. For the years ended December 31, 2020 and 2019, there was no transfer between Level 1 and Level 2.
F. The following chart is the movement of Level 3 for the years ended December 31, 2020 and 2019:

At January 1 Gains and losses recognised in other comprehensive income Unrealised gains on valuation through other comprehensive income ( At December 31	2020 8,441 $ 1,757) ( 6,684 $	2019 12,626 $ 4,185) 8,441 $

G. For the years ended December 31, 2020 and 2019, there was no transfer into or out from Level 3.
H. Finance segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. External appraiser was commissioned to appraise investment property.
I. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

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Non-derivative equity instrument: Venture capital shares Private equity fund investment Non-derivative equity instrument: Venture capital shares Private equity fund investment	Fair value at December 31, 2020 6,684 $ Fair value at December 31, 2,019 8,441 $	Valuation technique Net asset value Valuation technique Net asset value	Significant unobservable input Not applicable Significant unobservable input Not applicable	Range (weighted average) - Range (weighted average) -	Relationship of inputs to fairvalue
					Not applicable Relationship of inputs to fairvalue
					Not applicable

13. Supplementary Disclosures

(1) Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: Please refer to table 1.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 2.
D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 3.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Please refer to table 4.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China)�Please refer to table 5.

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(3) Information on investments in Mainland China

A. Basic information: Please refer to table 6.
B. Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas: None.

(4) Major shareholders information

Major shareholders information: Please refer to table 7.

14. Segment Information

(1) General information

Management has determined the reportable operating segments based on the reports that are used to make strategic decisions and wholly estimates performance and allocates resources in products type perspective. The Company currently focus on the construction business and building business, other operation result of remaining products was consolidated presented in the “other operating segments”. There is no material change in the basis for formation of entities and division of segments in the Group or in the measurement basis for segment information during this period.

(2) Reconciliation for segment income (loss)

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

							Administrative	Administrative
Year ended		Construction				Building		support	Other operating
December 31, 2020			business			business		segment		segments			Total
Total segment revenue		$	2,330,784		$	2,755,094	$	-	$	131,713		$	5,217,591
Operating profit (loss) of
segments	(		45,168)			418,596	(	76,107)	(	10,995)			286,326
Depreciation and
amortisation of segment	(		1,032)	(		1,229)	(	2,944)	(	1,697)	(		6,902)
							Administrative			Other
Year ended		Construction				Building		support		operating
December 31, 2019			business			business		segment		segments			Total
Total segment revenue		$	1,551,635		$	3,900,996	$	-	$	171,201		$	5,623,832
Operating profit (loss) of
segments	(		60,532)			363,903	(	74,932)		11,127			239,566
Depreciation and
amortisation of segment	(		1,759)	(		612)	(	2,395)	(	2,524)	(		7,290)

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(3) Reconciliation for segment income (loss)

The Company’s net operating income (loss) of reportable segment was in agreement with the net operating income which was listed in the statements of comprehensive income, thus, it was not necessarily reconciling.

(4) Information on products and services

Income from external customer mainly arose from construction and building business, please refer to Note 14(2) for details of related income balance.

(5) Geographical information

Geographical information for the years ended December 31, 2020 and 2019 is as follows:

YearendedDecember31	YearendedDecember31	YearendedDecember31
Non-current Revenue assets 5,128,908 $ 205,536 $ 16,966 - 55,185 - 16,532 - 5,217,591 $ 205,536 $ 2020	2019
Revenue 5,128,908 $ 16,966 55,185 16,532 5,217,591 $	Revenue 5,511,281 $ 21,563 69,117 21,871 5,623,832 $	Non-current assets
		378,465 $ - - -
		378,465 $

Non-current assets are property, plant, equipment, investment property and other non-current assets, but excluding financial instruments and deferred tax assets.

(6) Major customer information

Major customer information of the Group for the years ended December 31, 2020 and 2019 is as follows:

YearendedDecember31	YearendedDecember31	YearendedDecember31
Revenue Segment 662,077 $ Construction business 399,187 Construction business - Building business 2020	2019
Revenue 662,077 $ 399,187 -	Revenue 567,029 $ 48,982 3,706,317	Segment
		Construction business Construction business Building business

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No. of shares
Book value (Note 3)
Percentage of
Ownership
Fair value
Footnote (Note 4)
Securities held by
Marketable securities (Note 1)
Relationship with the securities issuer
(Note 2)
General ledger account
Ending Balance
Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)
December 31, 2020
Table 2
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

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0
Apex Science & Engineering Corp.
Chang Ji Construction Co., Ltd.
1
Advance receipts for
construction
504,178
$ No significant difference
from general customers
6.67
1
Chang Ji Construction Co., Ltd.
Apex Science & Engineering Corp.
2
Advance receipts for
construction
1,273,392
No significant difference
from general customers
16.85
1
Chang Ji Construction Co., Ltd.
Apex Science & Engineering Corp.
2
Construction revenue
186,988
No significant difference
from general customers
3.58
Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:
(1) Parent company is ‘0’.
(2) The subsidiaries are numbered in order starting from ‘1’.
(1) Parent company to subsidiary.
(2) Subsidiary to parent company.
(3) Subsidiary to subsidiary.
Note 3: Ratios of asset/liability are divided by consolidated total assets, and ratios of profit/loss accounts are divided by consolidated sales revenue.
Note 4: The Company may decide to disclose or not to disclose transaction details in this table based on the Materiality Principle.
Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between
subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for
transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

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Balance as at
December 31, 2020
Balance as at
December 31, 2019
No. of shares
Ownership (%)
Book value
Shares held as at December 31, 2020
Net profit (loss) of the
investee for the year ended
December 31, 2020 (Note
2(2))
Investment income(loss)
recognised by the Company
for the year ended
December 31, 2020 (Note
2(3))
Footnote
Investor
Investee (Notes 1 and 2)
Location
Main business activities
Initial investment amount

Apex Science &
Engineering Corp.
Shin Ding Engineering
Consultants Co., Ltd.
Taiwan
Construction technical
advisor, urban renewal
and reconstruction,
management consulting
and other consulting
service
8,000
$ 8,000
$ 800,000
100.00
14,286
$ 5,276)
($ 5,276)
($ Apex Science &
Engineering Corp.
Reinforce Eenergy
CO.,LTD
British
Virgin
Islands
General investment
95,964
95,964
2,810,000
100.00
180,265
24,142
24,142
Apex Science &
Engineering Corp.
Chang Ji Construction Co.,
Ltd.
Taiwan
Building and civil
engineering, hydraulic
engineering and other
construction business
496,856
462,596
54,320,000
90.53
413,411
52,413
33,420
Note 2: If situation does not belong to Note 1, fill in the columns according to the following regulations:
(2) The ‘Net profit (loss) of the investee for the year ended December 31, 2020’ column should fill in amount of net profit (loss) of the investee for this period.
Note 1: If a public company is equipped with an overseas holding company and takes consolidated financial report as the main financial report according to the local law rules, it can only disclose the
information of the overseas holding company about the disclosure of related overseas investee information.
(1) The columns of ‘Investee’, ‘Location’, ‘Main business activities’, Initial investment amount’ and ‘Shares held as at June 30, 2020’ should fill orderly in the Company’s (public company’s) information on investees and every directly or indirectly
controlled investee’s investment information, and note the relationship between the Company (public company) and its investee each (ex. direct subsidiary or indirect subsidiary) in the ‘footnote’ column.
(3) The ‘Investment income (loss) recognised by the Company for the year ended December 31, 2020’ column should fill in the Company (public company) recognised investment income (loss) of
its direct subsidiary and recognised investment income (loss) of its investee accounted for under the equity method for this period. When filling in recognised investment income (loss) of its direct
subsidiary, the Company (public company) should confirm that direct subsidiary’s net profit (loss) for this period has included its investment income (loss) which shall be recognised by regulations.

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Remitted to
Mainland China
Remitted back
to Taiwan
APEX Science & Engineering Corp. and subsidiaries
Information on investments in Mainland China
January 1, 2020 to December 31, 2020
Table 6
(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)
Investee in Mainland China
Main business activities
Paid-in capital
Investment
method (Note 1)
Accumulated amount of
remittance from Taiwan
to Mainland China as of
January 1, 2020
Book value of
investments in
Mainland China as
of December 31,
2020
Accumulated
amount of
investment income
remitted back to
Taiwan as of
December 31, 2020
Footnote
Amount remitted from Taiwan
to Mainland China/Amount
remitted back to Taiwan for the
year ended December 31, 2020
Accumulated
amount of
remittance from
Taiwan to
Mainland China
as of December
31, 2020
Net income of
investee as of
December 31,
2020
Ownership held
by the Company
(direct or indirect)
Investment income
(loss) recognised by
the Company for the
year ended
December 31, 2020
(Note 2)

Zhejiang Guyue Longshan
Electronic Technology
Development Co., Ltd.
Manufacture and sale of light
emitting diode display and
indicator panels
incorporating light emitting
diodes
197,100
$ 2
94,313
$ -
$ -
$ 94,313
$ 52,643
$ 46.00
24,216
180,021
$ -
$ Note
2(2)B.
Endorser/guarantor
Accumulated amount of
remittance from Taiwan to
Mainland China as of
December 31, 2020
Investment
amount approved
by the Investment
Commission of
the Ministry of
Economic Affairs
(MOEA)
Ceiling on
investments in
Mainland China
imposed by the
Investment
Commission of
MOEA
Apex Science &
Engineering Corp.
$ 94,313 $ 94,313 $ 1,832,475
Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:
(1) Directly invest in a company in Mainland China.
(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland China. (Investing through REINFORCE ENERGY CO.,LTD)
(3) Others.
Note 2: In the ‘Investment income (loss) recognised by the Company for the year ended December 31, 2020’ column:
(1) It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.
(2) Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:
A.The financial statements that are audited by international accounting firm which has cooperative relationship with accounting firm in R.O.C.
B.The financial statements that are audited by R.O.C. parent company’s CPA.
C. Non-significant subsidiaries were based on financial statements which were not audited by CPA.
Note 3: The numbers in this table are expressed in New Taiwan Dollars.

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Shares
December 31, 2020
Table 7
Name of major shareholders
Name of shares held (common share)
Name of shares held (preferred share)
Percentage of Ownership

Chang Ji Construction Co., Ltd.
28,124,802
-
12.29%
Kuo, Kuo-Hua
16,124,177
-
7.04%
Chih, Chi-Kuang
15,547,189
-
6.79%
(2) For above data, if shareholders trusted shares, it will be disclosed in accordance with the segregate account of trustors of trustee’s trust account. For the declaration of internal
person who held over 10% equity interest by shareholders in accordance with Securities and Exchange Act, the shareholding including shares held on one’s own plus the trusted
shares and has determination on the trusted property. For the declaration of shareholding of internal person, please refer to Market Observation Post System.
Lin, Chien-Chih
13,090,000
-
5.72%
Note 1: (1) The major shareholders information of this table comes from the data of TDCC on the final working day of every quarter, to calculate total common shares and preference shares
which held by shareholders and completed the non-physical registration (including treasury shares) and exceeded 5%. The number of shares which recorded on the Company’s
financial report may different from the number of actually completed non-physical registration due to the difference of calculation basis.

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VI. In the case of any insolvency of the Company and its affiliates, the resulting effects on the Company's financial status that shall be specified in the most recent year and up to the date of publication of the Annual Report: None.

Chapter VII. Financial Status and Operating Results

I. Financial status

(1) Comparative analysis table of financial status

(1) Comparative analysis table of financial status	(1) Comparative analysis table of financial status	(1) Comparative analysis table of financial status
			Unit: NT$1,000
Item Year	2020 (consolidated)	2019 (consolidated)	Difference
			Amount	%
Current assets	7,038,920	7,495,168	(456,248)	(25.10%)
Property, plant and equipment	117,701	173,797	(56,096)	(0.72%)
Other assets	399,661	475,238	(78,577)	(6.59%)
Total assets	7,556,282	8,144,203	(587,921)	(23.82%)
Current liabilities	4,368,791	4,648,435	(279,644)	(36.74%)
Non-current liabilities	46,399	512,855	(466,456)	0.14%
Total liabilities	4,415,190	5,161,290	(746,100)	(34.34%)
Capital	2,287,135	2,287,135	-	-
Capital surplus	249,009	234,909	14,100	(0.40%)
Retained earnings	822,634	624,437	198,197	39.07%
Other equity	(22,686)	(25,337)	2,651	(10.46%)
Treasurystock	(281,967)	(255,837)	(26,130)	9.27%
Non-controlling interests	86,967	117,606	(30,639)	(26.05%)
Total equity	3,141,092	2,982,913	158,179	5.30%

For the aforementioned changes more than 20% in early and later periods and the amount of

changes reaching beyond NT$10,000,000, explanations are provided as follows:

(I) Decrease in current assets from the previous period: This was mainly due to the decrease in inventories in the current year.
(II) Decrease in total assets: This was mainly due to the decrease in inventories in the current year.

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(III) Decrease in current liabilities from the previous period: This was mainly due to the decrease in short-term loans and contract liabilities.
(IV) Decrease in total liabilities from the previous period: It was mainly due to the decrease in short-term notes and bills and in contract liabilities in the current year.
(V) Increase in retained earnings from the previous period: This was mainly due to the increase in net income after tax in the current year.
(VI) Decrease in non-controlling interests: This was mainly due to the decrease in the shareholding ratio of non-controlling interests in the current year.
(2) Effects of changes in the financial status for the most recent two years: No significant effects on the financial status.
(3) Action plans to be taken as a response in the future: N/A

II. Financial performance

(1) Comparative analysis table of financial performance

(1) Comparative analysis table of financial performance	(1) Comparative analysis table of financial performance	(1) Comparative analysis table of financial performance	(1) Comparative analysis table of financial performance	(1) Comparative analysis table of financial performance
Unit: NT$1,000
Item Year	2020 (consolidated)	2019 (consolidated)	Increase (decrease) amount	Change ratio (%)
Net OperatingRevenue	5,217,591	5,623,832	(406,241)	(7.22%)
OperatingCosts	4,732,188	5,233,282	(501,094)	(9.58%)
Gross Profit	485,403	390,550	94,853	24.29%
OperatingExpenses	199,077	150,984	48,093	8.67%
Operating profit(loss)	286,326	239,566	46,760	31.85%
Non-operating Income and Expenses	22,002	4,418	3,944	89.27%
Net income (loss) before tax	308,328	243,984	17,584	7.21%
Income tax profits (expenses)	14,127	(66,698)	80,825	121.18%
Net income (loss) for the period	322,455	177,286	145,169	81.88%
Other comprehensive income(loss),after tax	4,512	(11,033)	15,545	140.90%
Total comprehensive income(loss)for theperiod	326,967	166,253	160,714	96.67%

Notes about analysis on changes in increase/decrease ratios:

(I) Operating revenue: The decrease from the previous period was mainly due to the increase in the income from the sale of Banqiao land in the early period.
(II) Operating cost: The decrease from the previous period was mainly due to the increase in the construction cost of Banqiao land sold in the early period.
(III) Gross profit: The increase from the previous period was mainly due to the higher gross profit from

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construction in the current period and the increase in the commission income from Machouhou project.

(IV) Operating expenses: The increase from the previous period was mainly due to the increase in selling expenses in the current period.
(V) Operating profit (loss): The increase from the previous period was mainly due to the higher gross profit from construction in the current period and the increase in the commission income from Machouhou project
(VI) Non-operating income and expenses: The increase from the previous period was mainly due to the increase in interest income in the current period and from the disposal of investment interests.
(VII) Net income (loss) before tax: The increase from the previous period was mainly due to the higher gross profit from construction in the current period, the increase in the commission income from Machouhou project and from the disposal of investment interests.
(VIII) Income tax profits (expenses): This was mainly due to the increase in deferred income tax assets in the current period as compared from the previous period.
(IX) Net income (loss) for the period: The increase from the previous period was mainly due to the higher gross profit from construction in the current period, the increase in the commission income from Machouhou project and from the disposal of investment interests.
(X) Other comprehensive income (loss), after tax: The decrease was mainly due to the increase in the net income of exchange differences from the conversion of financial statement of foreign operating agency and the increase in the fair value of equity instruments.
(XI) Total comprehensive income for the period: In summary, as compared from the previous period, the increase in the current period was mainly due to the increase in the net income before tax in the current period and the income tax benefits.
(2) Expected sales volume and the basis of its estimation, and the potential impact on and response plans for the Company's future financial position and operation: The expected sales volume of the Company is estimated in accordance with the industry profile and the estimated supply and demand status of the future market, and there has been no major change, which will not have a significant impact on the Company's future financial position and business operation. However, due to the increasingly fierce competition in the operating environment, the Company will set the consolidation of the existing market and the development of niche products as its development strategy goals. For relevant response plans, please refer to the long-term and short-term business development plans under the business content in this Annual Report.

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III. Cash flows

(I) Analysis on changes in cash flows for the most current year

Unit: NT$1,000

Cash balance at beginning of period (1)	Cash flows from operating activities (2)	Cash flows from investmen t activities (3)	Cash flows from financing activities (4)	Exchange influence (5)	Net increase in cash and cash equivalents (2) + (3) + (4)+(5)	Cash Balance at end of period (1)+(2)+(3) +(4)+(5)
159,329	784,573	(28,739)	(705,932)	(14)	49,888	209,217

(II) Corrective measures to be taken in response to illiquidity: N/A
(III) Cash liquidity analysis for the next year

Unit: NT$1,000

				Unit: NT$1,000	Unit: NT$1,000
Cash balance at beginning of year (1)	Expected net cash flows from operating activities for the entire year (2)	Expected cash outflows for the entire year (3)	Expected cash surplus (inadequacy) (1) + (2) - (3)	Plans for using theexpected cash surplus
				Investment plan	Financing plan
209,217	752,333	460,841	500,709	-	Debt repayment

Analysis of changes in cash flows for the next year:

Operating activities: The net cash inflows generated from operation activities will be mainly due to the expected cash collection of commissioned land development receivables from the industrial park development project in the next year.

Investment activities: It is expected that the cash outflows will be due to the demand for additional capital expenditures and the increase in restricted assets.

Financing activities: The cash outflows will be mainly due to the repayment of financing debts to banks.

IV. The impact of major capital expenditures in the most recent year on the financial position and business operation: None
V. Reinvestment policy in the most recent year, main reasons for profits/losses generated thereby, improvement plans and investment plans for the next year: The Company has no new reinvestment plans in the most recent year, and will dispose of existing reinvestment companies based on their investment evaluation status or continue to invest in them.

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VI. Risk evaluation

(I) Effects of interest and exchange rate fluctuations and changes in the inflation rate in the most recent year on the Company's profits (losses), and response measures to be taken in the future

Item	2020, consolidated (NT$1,000)	%
Finance costs	25,733	0.49
Foreign exchange losses	357	0.01

The Company’s financial costs in 2020 accounted for 0.49% of consolidated revenue, which was a decrease of 0.59% from 2019. Therefore, changes in interest rate had a certain impact on the Company’s profit and loss. However, the Company still regularly evaluated bank borrowing rates and kept close contacts with banks to obtain a more favorable borrowing rate; as for the exchange rate, a clear foreign exchange operation strategy and a strict control process were established to monitor foreign exchange changes and hence reduce the impact on profit and loss.

(II) In the most recent year, the policies of engaging in high-risk, high-leverage investments, fund loans to others, endorsements and derivative transactions, the main reasons for gaining profit or loss, and future countermeasures: In 2020, the Company did not engage in any high-risk, high-leverage investments, the periodend amounts of derivative transactions and capital loans were both 0, and the ending balance of endorsement was NT$58,000,000 as the financing endorsement by Chang Ji Construction Co., Ltd for the Company. The Company has stipulated the "Operating Procedures on Fund Loan and Endorsement", based on which risks were strictly controlled and there was no significant impact on the Company's profit or loss.
(III) Future R&D plans and expected R&D investment expenses: None
(IV) In the most recent year, the impact of changes in important policies and laws at home and abroad on the Company's financial position and business operation, and the countermeasures: The Company always paid attention to the changes in important policies and laws at home and abroad, and evaluated the impacted of these changes to itself. In the most recent year, the Company’s financial position and business operation have not been significantly adversely affected by changes in important policies and laws at home and abroad.
(V) In the most recent year, the impact of development in science and technology and

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industrial changes on the Company’s financial position and business operation, and the countermeasures: None

(VI) In the most recent year, the impact of corporate image on the corporate crisis management, and the countermeasures: None
(VII) Expected benefits and possible risks from merger and acquisition: N/A
(VIII)Expected benefits and possible risks associated with any plant expansion: N/A
(IX) Risks associated with any consolidation of sales or purchasing operations: For major purchase and sales customers, the Company took their different industrial characteristics and staged operational backgrounds into consideration, and has found no risks associated with any consolidation of sales or purchasing operations. In view of the future growth trend of the Company and the industry, the Company will further properly diversify sources of procurement and sales targets in order to maintain a balanced and stable operation result. This is the goal for the Company to continuously strive for.
(X) The impact and risks of transfer or change of a large number of shares from directors, supervisors or major shareholders who hold more than 10% shares to the Company: None
(XI) The impact and risks of change in the right of management to the Company: N/A
(XII) In case of any lawsuits or non-lawsuits, disclosure of the significant impact on the Company’s operation or shareholder equity, which may be caused by important lawsuits, non-lawsuits or administrative proceedings to the Company and its directors, supervisors, General Manager, persons in charge, shareholders who hold more than 10% shares and affiliates: None
(XIII) Other significant risks and countermeasures: None

VII. Other important matters: None

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==> picture [16 x 214] intentionally omitted <==

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

Chapter VIII. Special Disclosure
----- End of picture text -----

==> picture [189 x 472] intentionally omitted <==

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

100.00%
Consultants Corp.
Xindin Engineering
Co., Ltd. 90.53%
APEX SCIENCE & ENGINEERING CORP. Chang Ji Construction
100.00%
REINFORCE
ENERGY Co.Ltd
----- End of picture text -----

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Name of affiliated company Date of incorporati on Address Paid-in capital Major business or production projects APEX SCIENCE & ENGINEERING CORP. 65.08.09 F4, No.112, Xinmin St., Zhonghe Dist., New Taipei City 2,287,135 1. Design and installation of various types of machinery, light and heavy-duty motors, prime movers, hydraulic turbines, steam turbines, gas turbines, electric petrochemical equipment and computer monitoring, automatic control and instrumentation engineering 2. Design and installation of water and wastewater treatment facilities, garbage incinerator, waste disposal facilities, prevention and control systems against air pollution, noise and all other kinds of public hazards, fire fighting and fire alarm systems, spray sprinklers, foam extinguishers, carbon dioxide extinguishers and Sea Dragon System 3. Manufacturing of electronic components, and the wholesale of electronic materials, etc. 4. Trading of residential and commercial buildings, and commissioning of construction firms to construct these buildings, etc. Chang Ji Construction Co., Ltd. 69.11.22 F5, No.755, Zhongzheng Rd., Zhonghe Dist., New Taipei City 600,000 Construction of civil and structural works and water conservancy projects, etc. XINDIN ENGINEERING CONSULTANTS CORP. 102.12.25 2F-1, No.495, GuangFu S. Rd, Xinyi Dist., Taipei City 8,000 1. Engineering technical consulting 2. Other consulting services REINFORCE ENERGY CO. LTD. 89.10.03 P.O. Box 3152, Road Town, Tortola, British Virgin Island USD2,810 Miscellaneous investments (3) Information about same directors of treated-as controlled companies and affiliates: None (4) Scope of industries covered by the business operations of group affiliates The business operations of the Company and its affiliate companies cover following industries: engineering, investment, manufacturing, construction, engineering technical consulting, trading, and general merchandise.	Name of affiliated company Date of incorporati on Address Paid-in capital Major business or production projects APEX SCIENCE & ENGINEERING CORP. 65.08.09 F4, No.112, Xinmin St., Zhonghe Dist., New Taipei City 2,287,135 1. Design and installation of various types of machinery, light and heavy-duty motors, prime movers, hydraulic turbines, steam turbines, gas turbines, electric petrochemical equipment and computer monitoring, automatic control and instrumentation engineering 2. Design and installation of water and wastewater treatment facilities, garbage incinerator, waste disposal facilities, prevention and control systems against air pollution, noise and all other kinds of public hazards, fire fighting and fire alarm systems, spray sprinklers, foam extinguishers, carbon dioxide extinguishers and Sea Dragon System 3. Manufacturing of electronic components, and the wholesale of electronic materials, etc. 4. Trading of residential and commercial buildings, and commissioning of construction firms to construct these buildings, etc. Chang Ji Construction Co., Ltd. 69.11.22 F5, No.755, Zhongzheng Rd., Zhonghe Dist., New Taipei City 600,000 Construction of civil and structural works and water conservancy projects, etc. XINDIN ENGINEERING CONSULTANTS CORP. 102.12.25 2F-1, No.495, GuangFu S. Rd, Xinyi Dist., Taipei City 8,000 1. Engineering technical consulting 2. Other consulting services REINFORCE ENERGY CO. LTD. 89.10.03 P.O. Box 3152, Road Town, Tortola, British Virgin Island USD2,810 Miscellaneous investments (3) Information about same directors of treated-as controlled companies and affiliates: None (4) Scope of industries covered by the business operations of group affiliates The business operations of the Company and its affiliate companies cover following industries: engineering, investment, manufacturing, construction, engineering technical consulting, trading, and general merchandise.	Name of affiliated company Date of incorporati on Address Paid-in capital Major business or production projects APEX SCIENCE & ENGINEERING CORP. 65.08.09 F4, No.112, Xinmin St., Zhonghe Dist., New Taipei City 2,287,135 1. Design and installation of various types of machinery, light and heavy-duty motors, prime movers, hydraulic turbines, steam turbines, gas turbines, electric petrochemical equipment and computer monitoring, automatic control and instrumentation engineering 2. Design and installation of water and wastewater treatment facilities, garbage incinerator, waste disposal facilities, prevention and control systems against air pollution, noise and all other kinds of public hazards, fire fighting and fire alarm systems, spray sprinklers, foam extinguishers, carbon dioxide extinguishers and Sea Dragon System 3. Manufacturing of electronic components, and the wholesale of electronic materials, etc. 4. Trading of residential and commercial buildings, and commissioning of construction firms to construct these buildings, etc. Chang Ji Construction Co., Ltd. 69.11.22 F5, No.755, Zhongzheng Rd., Zhonghe Dist., New Taipei City 600,000 Construction of civil and structural works and water conservancy projects, etc. XINDIN ENGINEERING CONSULTANTS CORP. 102.12.25 2F-1, No.495, GuangFu S. Rd, Xinyi Dist., Taipei City 8,000 1. Engineering technical consulting 2. Other consulting services REINFORCE ENERGY CO. LTD. 89.10.03 P.O. Box 3152, Road Town, Tortola, British Virgin Island USD2,810 Miscellaneous investments (3) Information about same directors of treated-as controlled companies and affiliates: None (4) Scope of industries covered by the business operations of group affiliates The business operations of the Company and its affiliate companies cover following industries: engineering, investment, manufacturing, construction, engineering technical consulting, trading, and general merchandise.	Name of affiliated company Date of incorporati on Address Paid-in capital Major business or production projects APEX SCIENCE & ENGINEERING CORP. 65.08.09 F4, No.112, Xinmin St., Zhonghe Dist., New Taipei City 2,287,135 1. Design and installation of various types of machinery, light and heavy-duty motors, prime movers, hydraulic turbines, steam turbines, gas turbines, electric petrochemical equipment and computer monitoring, automatic control and instrumentation engineering 2. Design and installation of water and wastewater treatment facilities, garbage incinerator, waste disposal facilities, prevention and control systems against air pollution, noise and all other kinds of public hazards, fire fighting and fire alarm systems, spray sprinklers, foam extinguishers, carbon dioxide extinguishers and Sea Dragon System 3. Manufacturing of electronic components, and the wholesale of electronic materials, etc. 4. Trading of residential and commercial buildings, and commissioning of construction firms to construct these buildings, etc. Chang Ji Construction Co., Ltd. 69.11.22 F5, No.755, Zhongzheng Rd., Zhonghe Dist., New Taipei City 600,000 Construction of civil and structural works and water conservancy projects, etc. XINDIN ENGINEERING CONSULTANTS CORP. 102.12.25 2F-1, No.495, GuangFu S. Rd, Xinyi Dist., Taipei City 8,000 1. Engineering technical consulting 2. Other consulting services REINFORCE ENERGY CO. LTD. 89.10.03 P.O. Box 3152, Road Town, Tortola, British Virgin Island USD2,810 Miscellaneous investments (3) Information about same directors of treated-as controlled companies and affiliates: None (4) Scope of industries covered by the business operations of group affiliates The business operations of the Company and its affiliate companies cover following industries: engineering, investment, manufacturing, construction, engineering technical consulting, trading, and general merchandise.	Name of affiliated company Date of incorporati on Address Paid-in capital Major business or production projects APEX SCIENCE & ENGINEERING CORP. 65.08.09 F4, No.112, Xinmin St., Zhonghe Dist., New Taipei City 2,287,135 1. Design and installation of various types of machinery, light and heavy-duty motors, prime movers, hydraulic turbines, steam turbines, gas turbines, electric petrochemical equipment and computer monitoring, automatic control and instrumentation engineering 2. Design and installation of water and wastewater treatment facilities, garbage incinerator, waste disposal facilities, prevention and control systems against air pollution, noise and all other kinds of public hazards, fire fighting and fire alarm systems, spray sprinklers, foam extinguishers, carbon dioxide extinguishers and Sea Dragon System 3. Manufacturing of electronic components, and the wholesale of electronic materials, etc. 4. Trading of residential and commercial buildings, and commissioning of construction firms to construct these buildings, etc. Chang Ji Construction Co., Ltd. 69.11.22 F5, No.755, Zhongzheng Rd., Zhonghe Dist., New Taipei City 600,000 Construction of civil and structural works and water conservancy projects, etc. XINDIN ENGINEERING CONSULTANTS CORP. 102.12.25 2F-1, No.495, GuangFu S. Rd, Xinyi Dist., Taipei City 8,000 1. Engineering technical consulting 2. Other consulting services REINFORCE ENERGY CO. LTD. 89.10.03 P.O. Box 3152, Road Town, Tortola, British Virgin Island USD2,810 Miscellaneous investments (3) Information about same directors of treated-as controlled companies and affiliates: None (4) Scope of industries covered by the business operations of group affiliates The business operations of the Company and its affiliate companies cover following industries: engineering, investment, manufacturing, construction, engineering technical consulting, trading, and general merchandise.
Major business or production projects	1. Design and installation of various types of machinery, light and heavy-duty motors, prime movers, hydraulic turbines, steam turbines, gas turbines, electric petrochemical equipment and computer monitoring, automatic control and instrumentation engineering 2. Design and installation of water and wastewater treatment facilities, garbage incinerator, waste disposal facilities, prevention and control systems against air pollution, noise and all other kinds of public hazards, fire fighting and fire alarm systems, spray sprinklers, foam extinguishers, carbon dioxide extinguishers and Sea Dragon System 3. Manufacturing of electronic components, and the wholesale of electronic materials, etc. 4. Trading of residential and commercial buildings, and commissioning of construction firms to construct these buildings, etc.	Construction of civil and structural works and water conservancy projects, etc.	1. Engineering technical consulting 2. Other consulting services	Miscellaneous investments
Paid-in capital	2,287,135	600,000	8,000	USD2,810
Address	F4, No.112, Xinmin St., Zhonghe Dist., New Taipei City	F5, No.755, Zhongzheng Rd., Zhonghe Dist., New Taipei City	2F-1, No.495, GuangFu S. Rd, Xinyi Dist., Taipei City	P.O. Box 3152, Road Town, Tortola, British Virgin Island
Date of incorporati on	65.08.09	69.11.22	102.12.25	89.10.03
Name of affiliated company	APEX SCIENCE & ENGINEERING CORP.	Chang Ji Construction Co., Ltd.	XINDIN ENGINEERING CONSULTANTS CORP.	REINFORCE ENERGY CO. LTD.

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Percentage of ownership	7.05%	0.06%	0.02%	0.04%	0.03%	-	-	90.53%	90.53%	-	1.67%	100%	100%	100%
Number of shares	16,124,177	139,920	45,000	100,000	57,200	-	-	54,320,000	54,320,000	-	1,000,000	800,000	800,000	800,000
Name or representative	KUO, KUO-HUA	CHOU, HIS-YANG	Representative of Kaida Development Co., Ltd.: WANG, CHAO-KUEI	LU, FANG-YUAN	CHANG, PAO-TSAI	HSIAO, SHENG-HSIEN	WU, NAI-HUA	Representative of APEX SCIENCE & ENGINEERING CORP.: KUO, CHUN-HAO	Representative of APEX SCIENCE & ENGINEERING CORP.: SU, YA-SUNG	LU, FANG-YUAN	CHOU, HIS-YANG	Representative of APEX SCIENCE & ENGINEERING CORP.: HU, CHIEN-MIN	Representative of APEX SCIENCE & ENGINEERING CORP.: KUO, SHIH-YU	Representative of APEX SCIENCE & ENGINEERING CORP.: YANG, SHANG-HUNG
Title	President	Director	Director	Director	Independent Director	Independent Director	Independent Director	President	Director	Director	Supervisor	President	Director	Director
Name of affiliated company	APEX SCIENCE & ENGINEERING CORP.							Chang Ji Construction Co., Ltd.				XINDIN ENGINEERING CONSULTANTS CORP.

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Percentage of ownership	100%	100%	it: NT$1,000	Earnings per share (NT$)	(after tax)	1.59	0.38	(6.60)	-
Number of shares	800,000	2,810,000	(6) Summary of operation results of affiliated enterprises Un	Profit or loss for the period	(after tax)	315,653	22,613	(5,276)	24,141
				Operating profit		249,283	12,090	(6,047)	(75)
Name or representative	Representative of APEX SCIENCE & ENGINEERING CORP.: KUO, KUO-HUA	Representative of APEX SCIENCE & ENGINEERING CORP.: KUO, KUO-HUA
				Operating revenue		3,905,707	1,439,073	6,392	-
				Net worth		3,054,125	875,579	14,285	180,265
				Total liabilities		3,316,587	1,194,802	2,652	-
				Total assets		6,370,712	2,070,381	16,937	180,265
Title	Supervisor	Director
				Capital		2,287,135	600,000	8,000	95,964
Name of affiliated company		Reinforce Energy Co. Ltd.
				Name of affiliated company		APEX SCIENCE & ENGINEERING CORP.	Chang Ji Construction Co., Ltd.	XINDIN ENGINEERING CONSULTANTS CORP.	Reinforce Energy Co. Ltd.

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(II) Consolidated financial statement of affiliated companies

APEX SCIENCE & ENGINEERING CORP.

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2020, pursuant to “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises,” the Company that is required to be included in the consolidated financial statements of affiliates, is the same as the Company required to be included in the consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standard No. 10. And if relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declare,

APEX SCIENCE & ENGINEERING CORP.

Representative:KUO, KUO-HUA

March 25, 2021

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(III) Reports on affiliate companies: None

II. Private placement of negotiable securities: None
III. Holding or disposal of shares in the Company by subsidiaries during the most recent fiscal year and up to the date of publication of the Annual Report:

During the most recent year and up to the date of publication of the Annual Report

Holding or disposal of shares in the Company by subsidiaries

Unit: NT$1,000; shares; %

Name of subsidiar y (Note 1)	Paid-in capital	Source of capital	Shareholdi ng ratio of the Company	Date of acquisition or disposal	Amount and number of shares acquired	Amount and number of shares disposed of	Invest ment income	Amount and shares held up to the date of publication of the annual report	Creation of pledge	Making of Endorsement s/Guarantees to Subsidiary	Loaning of Funds to Subsidiary
Chang Ji Construct ion Co., Ltd.	600,000	Private capital	90.53%	As of the date of publication of the Annual Report in the current year	-	-	-	28,124,802 /255,837	Note:	0	None

Note:In order to acquire financed credit limit from banks, Chang Ji used its 28,125,000 shares held in the Company as a pledge guarantee.

IV. Other necessary supplements: None

V. As stated in Item 2, Paragraph 2, Article 36 of the Securities and Exchange Act, events which have material impacts on shareholders' equity or securities prices during the most recent fiscal year and up to the date of publication of the Annual Report: None

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AI assistant

APEX — Annual Report 2020

52284_rns_2021-07-30_f6c8740e-2b80-4701-8216-0091ab39a4dd.pdf

APEX SCIENCE & ENGINEERING CORP.

2020 Annual Report

I. (1) Spokesperson:

II. Contact information of headquarters and plants:

III. Share transfer agency:

IV. Contact Information of the CPAs for the Latest Financial Statements

V. Overseas securities exchange where securities are listed and method of inquiry: None

VI. Website: https://www.apexgrp.com.tw

Table of Contents

Chapter VI. Financial Information

Chapter 1. Letter to Shareholders

Chapter II. Company Profile

Chapter III. Corporate Governance Report

(1) Ratio of total remuneration paid to earnings after tax

III. Status of corporate governance

(I) Board of Directors

The status of implementation of the Board evaluation

(II) Operation of the Audit Committee:

year. The attendance of the Independent Directors was as follows:

internal Chief Audit Officer:

I. Information of Remuneration Committee members

(X) Implementation status of internal control system

1. Statement of internal control system

APEX SCIENCE & ENGINEERING CORP. Statement on Internal Control System

Date: 2021/3/25

APEX SCIENCE & ENGINEERING CORP.

General Manager: KUO,KUO-HUA (Concurrent)

IV. Information about CPA professional fees

V. Information about the replacement of CPA:

(I) Former CPAs:

(II) Successive CPAs

Chapter IV. Capital Overview

I. Capital and shares

(I) Source of capital

(IV) Distribution of shares

1. Common shares: April 18, 2021

2. Preferred shares: None

(V) Market price, net worth, earnings and dividends per share and related information

for the past two fiscal years

(VI) Dividend policy and implementation status of the Company

1. Dividend policy

APEX SCIENCE & ENGINEERING CORP.

Profit Distribution Table

2020

II. Issuance of corporate bonds:

VII. Implementation of capital utilization plan

Chapter V. Operational Highlights

I. Business activities

(2). Construction

(3). Optoelectronics

2. Construction

3. Optoelectronics

II. Market analysis and overview of production and marketing

2. Construction

(2) Construction

1) LED

2) LCM

2. Construction

2. List of suppliers: Unit: NT$1,000

(V) Production volume and value in the most recent 2 years (operating costs)

III. Employees

IV. Environmental protection expenditure

V. Labor relations

Chapter VI. Financial Information

I. Brief financial information for the past five fiscal years

3. Condensed Balance Sheet - IFRS - consolidated

4. Condensed Statement of Comprehensive Income - IFRS - consolidated

II. Financial analysis for the past five fiscal years - IFRS - parent company only

Financial analysis for the past five fiscal years - IFRS - Consolidated

III. 2020 Audit Committee's audit report on statement of final accounts

APEX SCIENCE & ENGINEERING CORP. Audit Committee's Audit Report

Best Regards

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for opinion

Key audit matters

Recognition of construction revenue

APEX Annual Report 2020