Asia Plastic — Annual Report 2020

Aug 19, 2021

Stock symbol: 1337

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Asia Plastic Recycling Holding Limited

Annual Repot of Year 2020

Annual report website: MOPS website: mops.twse.com.tw Website of Asia Plastic Recycling Holding Limited: asia-recycle.com

Date of printing: May 28, 2021

I. Company spokesperson

Spokesperson’s name: Xue Youwei, Name of proxy spokesperson: Ding Huaxiong, Executive Assistant to Chairman Deputy General Manager Tel.: (07) 521-5560 Tel.: (86) 0595-8201-0739 Email: markuhsueh@gmail.com Email: huaxiong @sansd.cn

II. Location of the headquarter, subsidiaries and plants

(I) The Company

Name: Asia Plastic Recycling Address: 4[th] Floor, Willow House, Cricket Square, P. O. Holding Limited Box 2804, Grand Cayman KY1-1112, Cayman Islands Tel.: (86) 0595-8201-0739 (II) Operation headquarter Name: Sansda (Fujian) Plastic Address: No. 163 South Qianjin Road, Fangjiao Village, Co., Ltd. Chendai Township, Jinjiang City, Fujian Province, China Tel.: (86) 0595-8519-9888 (III) Subsidiaries Name: Sansda Holding Limited Address: P.O. Box 957, Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands. Tel.: (86) 0595-8201-0739 Name: Sansda Hong Kong Address: 5/F, Jardine House 1 Connaught Place Central HK Tel.: (86) 0595-8201-0739 Name: Sansda (Fujian) Plastic Address: No. 163 South Qianjin Road, Fangjiao Village, Co., Ltd. Chendai Township, Jinjiang City, Fujian Province, China Tel.: (86) 0595-8201-0739 Name: Sansda (Jiangsu) Address: Industrial Park of Jurong Economic Development Environmental Protection Zone (Huayang West Road), Jiangsu Province, Technology Co., Ltd China Tel.: (86) 0595-8201-0739 Name: Sansda Hong Kong Trading Address: Golden Sun Ctr 59-67 Bonham Strand Wwst HK Co., Ltd. Tel.: (86) 0595-8201-0739 Name: Gaoxiong Office Address: Building 8, No. 111 Wufusi Road, Yancheng District, Gaoxiong City Tel.: (07) 521-5560

III. Name, title, telephone and email of litigious and non-litigious agents within China Name: Xue Youwei Title: Executive Assistant to Chairman

Tel.: (07) 521-5560 Email: markuhsueh@gmail.com

IV. List of directors

tofdirectors
Title	Name	Nationality	Main experience
Chairman	Ding Jinzao	Philippines	Asia Plastic Recycling Holding Ltd. Chairman
Director	Ding Holding Limited	British Virgin Islands	None
Director	Zhang Huiqun	Republic of China	Changtai County Ruyi Xiangzhuang Co., Ltd. Chairman Changtai County Ruyi Entertainment Co., Ltd. Chairman
Director	Zhang Duozhong	Republic of China	Changtai County Ruyi Xiangzhuang Co., Ltd. General Manager Changtai County Ruyi Entertainment Co., Ltd. General Manager
Independent director	Li Junde	Republic of China	Wayi International Digital Entertainment Co., Ltd. Chief Financial Officer
Independent director	Li Fan	Republic of China	Binchuan Enterprise Co., Ltd. Vice President of Finance
Independent director	Liao Zhengpin	The Chinese Mainland	Honorary President of China Plastics Processing Industry Association

V. Stock transfer agency

Name of securities dealer: Stock-Affairs Agency Department of Yuanta Securities Co., Ltd. Chengde Road, Taipei City Tel.: (886) 2-2586-5859 Website: http://www.yuanta.com

Address: Basement 1, No. 210, Section 3, Chengde Road, Taipei City

VI. Certified public accountants for financial statements in recent years

Name of certified public accountants: Name of firm: Wu Qiuyan, Jiang Jialing Deloitte & Touche Address: Building 3, No. 88 Chenggong 2[nd] Road, Tel.: (886) 7-530-1888 Gaoxiong City

Website: http：//www.deloitte.com.tw

VII. Trading revenue for listing of foreign marketable securities None

VIII. Company website: asia-recycle.com

Table of Contents

I. Report to the shareholders	I. Report to the shareholders	1
I.	Operating results of Year 2020	1
II.	Overview of operating plan in Year 2021 and future development strategy	2
II. Company	profile	4
III. Corporate governance report		7
I.	Organization system	7
II.	Directors, supervisors, general manager, deputy general manager, assistant	9
	managers, and managers in charge of various departments and branch offices
III.	Implementation of corporate governance	21
IV.	Information about accountants’ fees	54
V.	Information about replacement of accountants	56
VI.	Any of the Company’s Chairman, General Manager, or Managers in charge of	57
	finance or accounting held a position in the CPA’s firm or its affiliates in the
	most recent year
VII.	Changes in shareholding and shares pledged by directors, supervisors, managers	57
	and shareholders with 10% shareholding or more in the most recent year and as
	of the date of printing of the annual report
VIII.	Information about relationship between the top 10 shareholders (related party as	58
	defined in the Statement of Financial Accounting Standards No. 6, or spouse or
	relative with the second degree of kinship)
IX.	Number of shares held by the Company, the Company’s directors, supervisors,	59
	managers and directly or indirectly controlled entities on the same investee, and
	comprehensive shareholding percentage calculated in a consolidated manner
IV. Capital overview		60
I.	Capital and shares	60
II.	Corporate bonds	66
III.	Preferred stock	66
IV.	Global depository receipt	66
V.	Employee stock options and new restricted employee stocks	67
VI.	Status of new shares issuance in connection with mergers and acquisitions	69
VII.	Financing plans and implementation	69
V. Operation	overview	70
I.	Business activities	70
II.	Market and sales overview	83
III.	Information on employees in the recent two years and as of the date of printing	97
	of the annual report
IV.	Environmental protection expenditure	97
V.	Labor relations	98
VI.	Material contracts	101

VI. Financial overview	VI. Financial overview	VI. Financial overview	102
	I.	Summarized balance sheet and statement of comprehensive income in the past	102
		five years
	II.	Financial analysis in the past five years	104
	III.	Audit committee’s report – financial statements for the fiscal year	107
	IV.	Financial statements for the most recent year	108
	V.	Independent financial statements audited by CPA in the most recent year	108
	VI.	Difficulties in fund flow of the Company and its affiliates in recent years and as	108
		of the date of the annual report, and their impact on the Company’s financial
		position
VII	Review and analysis on financial conditions & performance, and risk issues		109
	I.	Financial status	109
	II.	Financial performance	110
	III.	Cash flow	111
	IV.	Influence of major capital expenditure items on financial business in the most	111
		recent year
	V.	Re-investment analysis in the most recent year	112
	VI.	Risk issues	113
	VII.	Other important events	119
VIII.	Special disclosure		120
	I.	Information of affiliates	120
	II.	Handling of private marketable securities in the most recent year and as of the	122
		date of printing of the annual report
	III.	Holding or disposal of the Company’s shares by its subsidiaries in the most	122
		recent year and as of the date of printing of the annual report
	IV.	Other necessary supplements	122
	V.	Events that have a significant impact on shareholders’ equity or securities price	122
		as stipulated in Section 36.3(2) of the Securities Exchange Act in the most recent
		year and as of the date of the annual report
	VI.	Significant deviations from the provisions on the protection of shareholders’	122
		rights in China

I. Report to the shareholders

I. Operating results of Year 2020

• (I) Implementing results of operating plan:

Asia Plastic Recycling Holding Limited (hereinafter referred to as “the Company”) had the consolidated operating income of 1,008,157,000 in 2020, decreased by 205,243,000 and 19.89% when compared with the income of 1,258,400,000 in 2019; and the consolidated net loss after tax of 1,312,802,000 in 2020, decreased by 670,776,000 and 104.48% when compared with the loss of 642,026,000 in 2019; the EPS was -4.88 throughout the year.

• (II) Financial revenue & expenditure and profitability analysis

• At the end of 2020, the cash balance was 1,297,562,000, decreased by 32,261,000 than the balance at the beginning of the year, including the net cash outflow of 215,473,000 from operating activities, the net cash outflow of 17,980,000 from investing activities, and the net cash outflow of 181,516,000 from financing activities. The net cash outflow from operating activities was mainly caused by net loss before tax in the current year; the net cash outflow from investing activities was mainly arising from acquisition of property, plant and equipment; and, the net cash outflow from financing activities was mainly due to increase in other borrowings – related parties. Due to the combined influence, debt ratio of the Company was increased from 7.78% in 2019 to 11.29% in 2020, while current ratio was decreased from 607.08% in 2019 to 472.73%.

(III) Research development conditions:

1. As a result of its consistent efforts, the R&D team has developed a new flame-retardant foaming material (PSD) and a purely bio-based and completely degradable forming material. A patent has been granted by China National Intellectual Property Administration on the new flame-retardant forming material (PSD). Following that, an additional patent is also expected to be granted on the purely bio-based and completely degradable foaming material. Furthermore, Sansda Jiangsu has successively developed, applied for and obtained patents on inventive production, processing and application of tens of products, including plasticizer, high resilient rubber, biodegradable plastic for use in production of foam pads for children, highly wearable rubber composition, SEBS thermoplastic elastomer jigsaw pads for children, maleic anhydride grafted LDPE, non-benzene butanone EVA forming material, antimonous oxide compound and its application in highly flame-retardant EVA forming material. In response to the development needs of the industry and the Group, Sansda Jiangsu has obtained certification of a provincial level enterprise technical center and qualification of a hi-tech enterprise in Jiangsu Province, following the certification of Sansda Fujian as a provincial level enterprise technical center and municipal R & D center in Fujian Province. Both companies have sustained advancement of their national industrial laboratories. Sansda Fujian and Sansda Jiangsu are making continuous efforts in promoting industry-university-research cooperation, facilitating establishment of strategic partnership with the Polymer Research Center of Fuzhou University Jinjiang Research Institute and Jiangsu Changzhou University, and boosting research and development of diversified products, process improvement and innovation.

2. 1 -

Besides, the Group has also applied for patent on additional inventions and utility models. It is anticipated to obtain over 150 patents for protection.

1. Equipment employed by the Group in production of EVA material can be engineered and reconstructed according to product structures, characteristics and quality requirements, and may also be improved based on R&D to better the technological process of production lines and conformity rate. To effectively improve the production efficiency, reduce waste during the process, cut labor and material costs, the Group uses consistent production process from front-end waste plastic recycling, EVA granulation, EVA foam material formulation design and EVA foaming to rear-end formed material rolling and cutting, which helps form a low-cost advantage and provide customers with services of high quality, high efficiency and high economic benefits. While constantly improving the process efficiency, the Group is also active in automating the production process. Both Sansda Fujian and Sansda Jiangsu have worked closely with Harbin Institute of Technology, a well-reputed automation development institute in China, and jointly developed an automated recycling, foaming and deep processing process. It is expected that the process may effectively improve the product matching accuracy and production efficiency. It is also listed as a major science and technology project and a benchmarking project of Jinjiang City. Besides, to meet the increasingly tough environmental protection and supervision requirements, Sansda Fujian and Sansda Jiangsu have set up respective special environment improvement technology and equipment teams to assist environmental protection regulatory authorities and attend to technological improvement of environmental protection equipment, energy saving, emission reduction, clean production and others, so as to constantly improve the environmental conditions of production.

2. II. Overview of operating plan in Year 2021 and future development strategy

Since the Chinese government banned the import of plastics waste since 2018 (the implementation plan for prohibiting the entry of foreign garbage and advancing the reform of the solid waste import administration system), the Company is now actively making plans for plastics recycling sources in China and seeking for overseas strategic partners, and assessing the plan for plant establishment in Eastern Europe, Central Asia as well as Southeast Asia on an ongoing basis, so as to stabilize the supply of recycled plastics in the future.

III. Influence of external competition environment, regulatory environment and overall operating environment

Under the effects of international economic situations, geopolitical risk increase, COVID-19 epidemic as well as the worldwide influence of trade dispute between U.S. and China, the overall operating environment is not good.

Looking forward, geopolitical risk will not be decreased even though the trade dispute between U.S. and China shows a sign of moderating, together with the major impact of COVID-19 epidemic on a majority of global economies, all research organizations expect that global economic downturn will appear in 2021 and this will bring potential risks for future growth.

To sum up, the Company will continuously pay close attention to various pull and push factors and our management team will devote every effort and bring the Company to conquer the increasingly severe challenges and to meet achievements again.

• 2 -

Best regards

to all shareholders

Chairman: Ding Jinzao General Manager: Ding Zhimeng Accounting officer: Wang Weiming

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II. Company profile

I. Date of establishment and group overview

The Group was originated from Sansda (Fujian) Shoes Co., Ltd and established in August 1994. Its production base was located in Jinjiang City Fujian Province – also known as China’s “Shoe Capital”. The Group dedicates itself to the recycling of waste plastic bags, scraps and such rubber plastic wastes. By virtue of research on recycling as well as design and manufacturing of improved equipment, the Group mainly engages in the research, development, manufacturing and selling of EVA foam materials and its products are widely used as shoe soles, linings for bags and suitcases (luggage cases), sporting goods, children’s toys, building composites and puzzle mats etc. On Jan. 08, 2010, Asia Plastic Recycling Holding Limited was established in the Cayman Islands, as the holding parent company of the Group and the first applicant for listing in Taiwan. Various subsidiaries re-invested by the Company include Sansda Holding Limited, Sansda (Hong Kong) Co., Ltd, Sansda (Fujian) Plastic Co., Ltd, Sansda (Jiangsu) Environmental Protection Technology Co., Ltd, and Sansda (Hong Kong) Trading Co., Ltd.

II. Group structure

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Asia Plastic Recycling Holding Limited (Cayman)
100%
Sansda Holding Limited (BVI)
100%
Sansda (Hong Kong) Co., Ltd.
100% 100% 100%
Sansda (Jiangsu)
Sansda (Fujian) Sansda Hong
Environmental
Plastic Co., Ltd. Kong Trading Co.,
Protection Technology
Co., Ltd Ltd.
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III. Company history

Year	Important events
1994	Hongkong Senlaveer (Pacific) Co., Ltd established Sansda (Fujian) Shoes Co., Ltd by sole proprietorship.
1999	Hongkong Senlaveer (Pacific) Co., Ltd transferred the stock rights of Sansda (Fujian) Shoes Co., Ltd to Mr. Ding Jinzao in Philippines.
2000	Research and development of plastic wastes achieved significant breakthroughs, to decrease production cost efficiently and six production lines for recycling of plastic wastes were established.
2003	Rated as level-AAA credit enterprise by Agricultural Bank of China
2004	Rated as Class-A taxpayer by the State Taxation Bureau of Quanzhou City
2005	Rated as Class-A taxpayer by the State Taxation Bureau of Quanzhou City
2006	Rated as Class-A taxpayer by the State Taxation Bureau of Quanzhou City Chosen as the first batch of science & technology project undertakers in Jinjiang City in 2006 Sansda (Fujian) new Jiangtou factory was among the key construction projects in Fujian Province
2007	Passed ISO14001 (environmental management system) and ISO9001 (quality management system) certification Jiangtou Factory put into production, and production equipment was increased to 18 groups Rated as level-AAA credit enterprise by Agricultural Bank of China
2008	Rated as level-AAA credit enterprise by Agricultural Bank of China After putting Jiangtou Factory into production, capacity and performance were substantially increased.
2009	Renamed to Sansda (Fujian) Plastic Co., Ltd Won the title of China industrial research and development base for EVA recycling granted by China Plastics Processing Industry Association Rated as level-AAA credit enterprise by Agricultural Bank of China Chosen as the first batch of provincial-level circular economy projects in 2009 and granted with fund subsidy Chosen as “Quanzhou Municipal 6.18 Success Fund Subsidy Project in 2009” by Economic and Trade Commission of Quanzhou City Obtained the patent of sterilization & deodorization nutrition adhesive for shoe use Established the subsidiary – Sansda Holding Limited Established the expert committee
2010	Established the Company, as the holding parent company of the Group and the first applicant for listing in Taiwan. Established the subsidiary –Sansda (Hong Kong)Co., Ltd Completed the stock exchange between the Company and Ding Holding Limited Obtained the patent of host screw for EVA scrap plasticizing and granulating device and new foaming materials Granted Sansda Fujian with level-AAA credit in plastics industry by the Credit Office of the Ministry of Commerce P.R. of China together with China Plastics Processing Industry Association, with the validity from Feb. 01, 2010 to Jan. 31, 2013. “Best Product Innovation Award” of the third China (Shenzhen) International Industry Fair Elected three independent directors

• 5 -

Year	Important events
2011	Entered Emerging Stock Market for transaction Issued new shares in an amount of TWD 144,800 thousands by cash capital increase; after increase, paid-in capital was TWD 1,380,800 thousands. Stock was listed in Taiwan Stock Exchange. Established the subsidiary – Sansda (Jiangsu) Environmental Protection Technology Co., Ltd Obtained 7 patents for new EVA application plates “Best Energy Saving & Environmental Protection Award” of “Selection of Haixi TOP TEN Innovative Shoe Material Enterprises” initiated by Jinjiang Municipal Government together with Strait News
2012	Capital increase converted from earnings in an amount of TWD 207,120 thousands; after capital increase, paid-in capital was TWD 1,587,920 thousands. Established the subsidiary –Sansda (Hong Kong) Trading Co., Ltd. Issued the unsecured convertible corporate bond of 600,000 thousand for the first time Issued new shares in an amount of TWD 165,000,000 by cash capital increase; after increase, paid-in capital was TWD 1,752,920,000. Obtained 5 patents for new technology improvement application and 4 patents for slipper production and appearanceprotection
2013	The subsidiary – Sansda (Fujian) Plastic Co., Ltd was rated as hi-tech enterprise in Fujian Province Capital increase converted from earnings in an amount of TWD 245,409,000; after capital increase, paid-in capital was TWD 1,998,329,000. Obtained 16patents forproduction and appearanceprotection of slippers and floor mats etc.
2014	Capital increase converted from earnings and issuance of new shares for employee bonus in a total amount of TWD 503,422 thousands; after capital increase, paid-in capital was TWD 2,498,291 thousands (after deducing the treasury stock cancelled 3,460 thousands). Obtained thepatent for new EVA flame-retardant foamingmaterials
2015	Capital increase converted from earnings and issuance of new shares for employee bonus in a total amount of TWD 97,593 thousands; after capital increase, paid-in capital was TWD 2,595,884 thousands. Obtained 10 patents for new EVA application plates Obtained the patent for new EVA foaming materials Obtained 60 patents for production and appearance production of floor mats etc.
2016	Capital increase converted from earnings and issuance of new shares for employee bonus in a total amount of TWD 57,797 thousands; after capital increase, paid-in capital was TWD 2,653,681 thousands. Obtained the patent for new EVA foaming materials Obtained 13patents forproduction and appearanceproduction of floor mats etc.
2017	Capital increase converted from earnings and issuance of new shares for employee bonus in a total amount of TWD 24,080,000; after capital increase, paid-in capital was TWD 2,677,761,000.
2018	Capital increase converted from earnings and issuance of new shares for employee bonus in a total amount of TWD 11,786,000; after capital increase, paid-in capital was TWD 2,689,547,000.

IV. Risk issues

Please refer to VII. Review and analysis on financial conditions & performance, and risk issues

• 6 -

III. Corporate governance report

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I. Organization system
1. Organization structure
Board of
Remuneration Shareholders
Committee
Board of Auditing
Directors office
Audit Chairman
Committee
General
Manager
Integrated Procurement Sales Production Financial
Management Department Department headquarter Department
Asset R&D Production Quality Warehouse
Management Department Department Control Department
Department Department
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2. Functions of main departments

Main departments	Main functions
Auditing office	Assess the integrity, reasonableness and effectiveness of the internal control system and various management systems; perform the internal audit tasks, and track the improvement results and implementation of self-assessment work.
Audit Committee	Supervise the business and financial conditions of the Company, the fair presentation of financial statements, and the effective implementation of internal control.
Remuneration Committee	Assist the Board of Directors in performing and assessing the overall remuneration and benefit policy of the Company as well as the remuneration to directors and managers.
Integrated Management Department	Planning and implementation of logistics management of the Company, including human resources planning, payroll, recruitment and training, information management, health safety and general affairs maintenance & planning
Procurement Department	Supplier management, planning and implementation for acquisition of raw materials and fixed assets
Sales Department	Planning and implementation of operating sale, order & market development, market information collection and customer management
Asset Management Department	Management and maintenance of fixed assets, management of workshop & housing construction
R&D Department	Collection of information about new industrial technology and new market products, analysis on new product development, planning for process technology improvement, as well as proofing, testing and analysis for product performance
Production Department	Production scheduling & planning, production & manufacturing, production progress and technology management
Quality Control Department	Planning of quality policy, quality inspection and management for raw materials and products
Warehouse Department	Warehousing and receiving planning & management for raw materials, warehouse-in & warehouse-out management and storage planning & management etc. for finished and semi-finished products etc.
Financial Department	Overall financial planning of the Company, capital utilization & movement and risk management, planning of the Company’s financial system and operating procedures, accounting, tax & stock management, decision support analysis and report

• 8 -

II. Directors, supervisors, general manager, deputy general manager, assistant managers, and managers in charge of various departments and branch offices

(I) Directors & supervisors

(The Company has no supervisor.)

Information about directors & supervisors (I)

April 18, 2021; Unit: shares

Title	Nationality or place of registration	Name	Gender	Date elected	Term	Date first elected	Shareholding when elected	Shareholding when elected	Number of shares held at present	Number of shares held at present	Number of shares held by it spouse and minor child at present	Number of shares held by it spouse and minor child at present	Shareholding by nominee arrangement	Shareholding by nominee arrangement	Main experience (education)	Position concurrently held in the Company and other companies at present	Other executives, directors or supervisors who are spouses or relatives within two degrees of kinship	Other executives, directors or supervisors who are spouses or relatives within two degrees of kinship	Other executives, directors or supervisors who are spouses or relatives within two degrees of kinship	Remarks
							Number of shares (share)	Shareho lding ratio	Number of shares (share)	Shareho lding ratio	Number of shares (share)	Shareho lding ratio	Number of shares (share)	Shareho lding ratio			Title	Name	Relationship
Chairman	Philippines	Ding Jinzao	Male	2019.06	3 years	2010.01	15,540,096	5.99%	15,993,089	5.95%	－	－	－	－	Department of Geological Prospecting, Fujian Longyan Engineering College General manager of Sansda (Fujian) Plastic Co., Ltd	Chief executive officer of the Company Director of Ding Holding Limited Director of Sansda Holding Limited Director ofSansda (Hong Kong)Co., Ltd Chairman of Sansda (Fujian) Plastic Co., Ltd	Deputy General Manager	Ding Huaxiong	Father and son	－
Director	British Virgin Islands	Ding Holding Limited (represent ative: Ding Zhimeng)	Male	2019.06	3 years	2013.06	59,894,651	23.07%	38,888,293	14.46%	－	－	－	－			－	－	－	－
Director	Republic of China	Zhang Huiqun	Male	2019.06	3 years	2016.06	－	－	－	－	－	－	－	－	Business Management Department of a private international business college Chairman of WINCO Enterprises Limited Vice chairman of Zhangzhou Taiwan Investment Association	Chairman of Changtai County Ruyi Xiangzhuang Co., Ltd Chairman of Changtai County Ruyi Entertainment Co., Ltd	Director Deputy General Manager	Zhang Duozhong Ding Huaxiong	Father and son Father in law	－
Director	Republic of China	Zhang Duozhong	Male	2019.06	3 years	2010.05	－	－	－	－	－	－	－	－	Finance Department, Quanzhou Huaqiao University General manager of WINCO Enterprises Limited	General manager of Changtai County Ruyi Xiangzhuang Co., Ltd General manager of Changtai County Ruyi Entertainment Co., Ltd	Director Deputy General Manager	Zhang Huiqun Ding Huaxiong	Father and son Brother in law	－

• 9 -

Title	Nationality or place of registration	Name	Gender	Date elected	Term	Date first elected	Shareholding when elected	Shareholding when elected	Number of shares held at present	Number of shares held at present	Number of shares held by it spouse and minor child at present	Number of shares held by it spouse and minor child at present	Shareholding by nominee arrangement	Shareholding by nominee arrangement	Main experience (education)	Position concurrently held in the Company and other companies at present	Other executives, directors or supervisors who are spouses or relatives within two degrees of kinship	Other executives, directors or supervisors who are spouses or relatives within two degrees of kinship	Other executives, directors or supervisors who are spouses or relatives within two degrees of kinship	Remarks
							Number of shares (share)	Shareho lding ratio	Number of shares (share)	Shareho lding ratio	Number of shares (share)	Shareho lding ratio	Number of shares (share)	Shareho lding ratio			Title	Name	Relationship
Independe nt director	Republic of China	Li Junde	Male	2019.06	3 years	2016.06	－	－	－	－	－	－	－	－	Bachelor of Business Administration, Soochow University Master of Business Administration, National Chengchi University Doctor of Economics, Fujian Normal University Director of Integrated Planning Department, Financial Supervisory Commission Counselor of Financial Supervisory Commission Deputy general manager of Motor Vehicle Accident Compensation Fund – juridical person	Chief financial officer of Wayi International Digital Entertainment Co., Ltd Independent director of Ching Feng Home Fashions Co., Ltd	－	－	－	－
Independe nt director	Republic of China	Li Fan	Male	2019.06	3 years	2016.06	－	－	－	－	－	－	－	－	Department of Accounting, Tunghai University Leading group of Deloitte & Touche Deputy manager of Underwriting Department, Fubon Comprehensive Securities Co., Ltd	Vice president – finance of Binchuan Enterprise Co., Ltd	－	－	－	－
Independe nt director	The Chinese Mainland	Liao Zhengpin	Male	2019.06	3 years	2010.03	－	－	－	－	－	－	－	－	Department of Physics, Chengdu University Deputy director of Plastics Office, China National Light Industry Council Vice chairman and secretary general China Plastics Processing Industry Association President of China Plastics Processing Industry Association Jury of National Office of Science and Technology Awards		－	－	－	－

• 10 -

April 18, 2021

Table I: Major shareholders of the institutional shareholders

		April 18,2021
Name of institutional shareholder	Major shareholders of the institutional shareholders	Shareholding ratio
Ding Holding Limited	DingJinshan	32.5%
	DingJinzao	25.0%
	DingJindi	13.5%
	DingJinkuang	13.0%

Information about directors and supervisors (II)

April 18, 2021

Condition Name (Note 1)	Meet one of the following professional qualification requirements, together with at least five years’ work experience	Meet one of the following professional qualification requirements, together with at least five years’ work experience	Meet one of the following professional qualification requirements, together with at least five years’ work experience	Independence criteria (note 1)	Independence criteria (note 1)	Independence criteria (note 1)	Independence criteria (note 1)	Independence criteria (note 1)	Independence criteria (note 1)	Independence criteria (note 1)	Independence criteria (note 1)	Independence criteria (note 1)	Independence criteria (note 1)	Independence criteria (note 1)	Independence criteria (note 1)	Number of other public companies in which the individual is concurrently serving as an independent director
	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 professional or technical specialist who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Company	Have work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company	1	2	3	4	5	6	7	8	9	10	11	12
DingJinzao																0
Ding Zhimeng (note 2)																0
Zhang Huiqun																0
Zhang Duozhong																0
Li Junde																1
Li Fan																0
Liao Zhengpin																0

Note 1: please “tick” the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term or office.

• (1) Not any employee of the Company or any of its affiliates.

• (2) Not a director or supervisor of the Company or any of its affiliates (not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public 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 other’s name, in an aggregate of one percent or more of the total number of issued shares of the Company or ranking in the top 10 in holdings.

• (4) Not a spouse, relative within the second degree of kinship, or linear relative within the third degree of kinship, of a managerial office under subparagraph (1) or any of the persons in subparagraphs (2) and (3) preceding.

• (5) Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the Company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the Company under Article 27, paragraph 1 or

• 11 -

2 of the Company Act. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.

• (6) If a majority of the Company’s director seats or voting shares and those of any other company are controlled by the same person: not a director, supervisor, or employee of that company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.

• (7) If the chairman, general manager or person holding an equivalent position of the Company and a person in any of those positions at another company or institution are the same person or are spouses: not a director, supervisor, or employee of that other company or institution. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.

• (8) Not a director, supervisor, manager, or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the Company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, at concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent, if the specified company or institution holds 20 percent or more and no more than 50 percent of the total number of issued shares of the public company.

• (9) Not a professional individual who, or an owner, partner, director, supervisor, or manager of a sole proprietorship, partnership, company, or institution that, provides auditing services to the Company or any affiliate of the Company, or that provides commercial, legal, financial, accounting or related services to the Company or any affiliate of the Company for which the provider in the past 2 years has received cumulative compensation exceeding TWD 500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/ consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.

• (10) Not having a spousal relationship, or a relative within the second degree of kinship to any other director of the Company.

• (11) Not been a person of any condition defined in Article 30 of the Company Act.

• (12) Not a governmental, juridical person or its representative as defined in Article 27 of the Company Act.

• Note 2: a representative of the corporate director – Ding Holding Limited.

• 12 -

(II) General manager, deputy general manager, assistant managers, and managers in charge of various departments and branch offices

Information about general manager, deputy general manager, assistant managers, and managers in charge of various departments and branch offices

												April 18, 2021; Unit: shares	April 18, 2021; Unit: shares	April 18, 2021; Unit: shares	April 18, 2021; Unit: shares	April 18, 2021; Unit: shares
Title	Name	Gender	Nationality or place of registration	Date assuming the post			Shares held by spouse or minor children		Shareholding by nominee arrangement		Main experience (education)	Position concurrently served at other company	Managers who having a spousal relationship or a relative within the second degree of kinship			Remarks
					Number of shares	Shareho lding ratio	Number of shares	Shareho lding ratio	Number of shares	Shareho lding ratio			Title	Name	Relationship
Chief executive officer	Ding Jinzao	Male	Philippines	2010.04	15,993,089	5.95%	－	－	－	－	Department of Geological Prospecting, Fujian Longyan Engineering College General manager of Sansda (Fujian) Plastic Co., Ltd	Director of Ding Holding Limited Director of Sansda Holding Limited Director ofSansda (Hong Kong)Co., Ltd Chairman of Sansda (Fujian) Plastic Co., Ltd	Vice president of sales	Ding Huaxiong	Father and son	－
Deputy chief executive officer	Zhang Huiqun	Male	Republic of China	2016.06	－	－	－	－	－	－	Business Management Department of a private international business college Chairman of WINCO Enterprises Limited Vice chairman of Zhangzhou Taiwan Investment Association	Chairman of Changtai County Ruyi Xiangzhuang Co., Ltd Chairman of Changtai County Ruyi Entertainment Co., Ltd	Director Vice president of sales	Zhang Duozhong Ding Huaxiong	Father and son Father in law	－
General Manager	Ding Zhimeng	Male	Philippines	2014.10	－	－	－	－	－	－	Graduated from China University of Political Science and Law, majored in Business Administration Learning business operations at EMBA president course, Tsinghua University Executive assistant to chairman of Jinfada (Fujian) Shoes & Plastics Co., Ltd and general manager of the Brand Operation Center	General manager of Sansda (Fujian) Plastic Co., Ltd	－	－	－	－
Deputy general manager of sales, Sansda (Fujian)	Ding Huaxiong	Male	Philippines	2006.01	－	－	－	－	－	－	Department of Marketing, Quanzhou Huaqiao University	Executive director and general manager of Sansda (Jiangsu) Environmental Protection Technology Co., Ltd	Chief executive officer	Ding Jinzao	Father and son	－
Deputy general manager of procurement, Sansda (Fujian)	Ding Zhiwei	Male	Philippines	2008.07	－	－	－	－	－	－	Department of Business Administration, Fuzhou University Sansda (Fujian) Plastic Co., Ltd. Manager of procurement department	－	－	－	－	－

• 13 -

Title	Name	Gender	Nationality or place of registration	Date assuming the post			Shares held by spouse or minor children	Shares held by spouse or minor children	Shareholding by nominee arrangement	Shareholding by nominee arrangement	Main experience (education)	Position concurrently served at other company	Managers who having a spousal relationship or a relative within the second degree of kinship	Managers who having a spousal relationship or a relative within the second degree of kinship	Managers who having a spousal relationship or a relative within the second degree of kinship	Remarks
					Number of shares	Shareho lding ratio	Number of shares	Shareho lding ratio	Number of shares	Shareho lding ratio			Title	Name	Relationship
Deputy general manager of Sansda (Jiangsu)	Shi Yuanliang	Male	Republic of China	2017.01	－	－	－	－	－	－	Ching Cheng High School Manager of Xiechengfa Shoes Material Manufacturing Factory Manager of Yuefa Shoes Material Factory Chief operating officer of Sansda (Jiangsu) Environmental Protection Technology Co., Ltd	－	－	－	－	－
Executive Assistant to Chairman	Xue Youwei	Male	Republic of China	2009.11	761	－	－	－	－	－	Accounting Institute, Tamkang University Manager of Deloitte & Touche Chief financial officer of Sansda (Fujian) Plastic Co., Ltd	－	－	－	－	－
Assistant manager of accounting	Wang Weiming	Male	Republic of China	2013.09	6	－	－	－	－	－	Department of accounting, Chung Yuan University Deputy manager of Deloitte & Touche Financial manager of Yang’s Aquatic Products in Shunde District Foshan City Audit manager of Asia Plastic Recycling Holding Limited	－	－	－	－	－
Assistant manager of audit	Liang Wenjie	Male	Republic of China	2015.05	－	－	－	－	－	－	Department of Law, Commerce and Accounting, Chung Hsing University Accounting Department manager of Dongtaiyi Technology Co., Ltd Accounting Department manager of Jiekou Optoelectronics Co., Ltd	－	－	－	－	－

• 14 -

(III) Remuneration paid to directors, supervisors, general manager and deputy general manager in the most recent year

(1) Remuneration of directors (including independent directors)

Unit: TWD thousand, Dec. 31, 2020

Title	Name	Directors’ remuneration	Directors’ remuneration	Directors’ remuneration	Directors’ remuneration	Directors’ remuneration	Directors’ remuneration	Directors’ remuneration	Directors’ remuneration	Percentage of total remuneration (A+B+C+D) in net income after tax	Percentage of total remuneration (A+B+C+D) in net income after tax	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Relevant remuneration received by directors who are also employees	Percentage of total remuneration (A+B+C+D+E+F +G) in net income after tax	Percentage of total remuneration (A+B+C+D+E+F +G) in net income after tax	Compensation paid to directors from an invested company other than the Company’s subsidiary or parent company
		Compensation (A)		Severance pay (B)		Directors compensation (C)		Business execution expenditure (D)				Salary, bonus and extraordinary charges etc. (E)		Severance pay (F)		Employee compensation (G)				Number of shares subscribed by employee as per stock options(H)		Number of restricted stock awards obtained (I)
		The Company	All companies within the financial statements	The Company	All companies within the financial statements	The Company	All companies within the financial statements	The Company	All companies within the financial statements	The Company	All companies within the financial statements	The Company	All companies within the financial statements	The Company	All companies within the financial statements	The Company		All companies within the financial statements		The Company	All companies within the financial statements	The Company	All companies within the financial statements	The Company	All companies within the financial statements
																Amount of cash dividends	Amount of stock dividends	Amount of cash dividends	Amount of stock dividends
Chairman	Ding Jinzao	－	－	－	－	－	－	－	－	－	－	3,160	3,160	－	－	－	－	－	－	－	－	－	－	-0.24%	-0.24%	None
Director	Ding Holding Limited (Representative Ding Zhimeng)	－	－	－	－	－	－	－	－	－	－	2,423	2,423	－	－	－	－	－	－	－	－	－	－	-0.18%	-0.18%	None
Director	Zhang Huiqun	－	－	－	－	－	－	103	103	-0.01%	-0.01%	－	－	－	－	－	－	－	－	－	－	－	－	-0.01%	-0.01%	None
Director	Zhang Duozhong	－	－	－	－	－	－	103	103	-0.01%	-0.01%	－	－	－	－	－	－	－	－	－	－	－	－	-0.01%	-0.01%	None
Independent director	Li Junde	－	－	－	－	－	－	120	120	-0.01%	-0.01%	－	－	－	－	－	－	－	－	－	－	－	－	-0.01%	-0.01%	None
Independent director	Li Fan	－	－	－	－	－	－	120	120	-0.01%	-0.01%	－	－	－	－	－	－	－	－	－	－	－	－	-0.01%	-0.01%	None
Independent director	Liao Zhengpin	－	－	－	－	－	－	11	11	－	－	－	－	－	－	－	－	－	－	－	－	－	－	－	－	None
Other than those items disclosed in the table above, directors remunerations earned by providing services (i.e. providing consulting services as a non-employee) to all companies within the financial statements in the most recent year: None Policy, system, standard and structure of remuneration to independent directors, and the correlation between duties, risk and time input with the amount of remuneration: Directors only receive the travel expenses, having no relation with business performance and future risks; in addition, the Company has net loss after tax and thus no director remuneration will be granted in accordance with the Articles of Association.

Note: On June 15, 2016, the fourth board of directors was elected and audit committee was established, to act instead of the supervisors.

• 15 -

Range of directors’ remuneration

	Range of directors’ remuneration	Range of directors’ remuneration	Range of directors’ remuneration	Range of directors’ remuneration
Range of remuneration paid to each director of the Company	Name of directors
	Total of (A+B+C+D)		Total of (A+B+C+D+E+F+G)
	The Company	All companies within the financial statements	The Company	All companies within the financial statements
Less than 2,000,000 Yuan	Ding Jinzao, Ding Holding Limited, Zhang Huiqun, Zhang Duozhong, Li Junde, Li Fan, Liao Zhengpin	Ding Jinzao, Ding Holding Limited, Zhang Huiqun, Zhang Duozhong, Li Junde, Li Fan, Liao Zhengpin	Zhang Huiqun, Zhang Duozhong, Li Junde, Li Fan, Liao Zhengpin	Zhang Huiqun, Zhang Duozhong, Li Junde, Li Fan, Liao Zhengpin
2,000,000 (included) ~ 5,000,000 Yuan	－	－	Ding Jinzao, Ding Holding Limited	Ding Jinzao, Ding Holding Limited
5,000,000 (included) ~ 10,000,000 Yuan	－	－	－	－
10,000,000 (included) ~ 15,000,000 Yuan	－	－	－	－
15,000,000 (included) ~ 30,000,000 Yuan	－	－	－	－
30,000,000 (included) ~ 50,000,000 Yuan	－	－	－	－
50,000,000 (included) ~ 100,000,000 Yuan	－	－	－	－
Over 100,000,000 Yuan	－	－	－	－
Total	7 persons	7 persons	7 persons	7 persons

(2) Remuneration paid to supervisors in the most recent year: The Company elected the fourth board of directors and established the audit committee to act instead of the supervisor, on June 15, 2016 and thus it is inapplicable.

• 16 -

(3) Remuneration paid to the general manager and deputy general manager in the most recent year

Unit: TWD thousand, Dec. 31, 2020

Title	Name	Salary (A)	Salary (A)	Severance pay (B)	Severance pay (B)	Bonus and extraordinary charges etc. (C)	Bonus and extraordinary charges etc. (C)	Employee compensation (D)	Employee compensation (D)	Employee compensation (D)	Employee compensation (D)	Percentage of total remuneration (A+B+C+D) in net income after tax(%)	Percentage of total remuneration (A+B+C+D) in net income after tax(%)	Amount of employee stock options obtained	Amount of employee stock options obtained	Number of restricted stock awards obtained	Number of restricted stock awards obtained	Compensation paid to directors from an invested company other than the Company’s subsidiary or parent company
		The Company	All companies within the financial statements	The Company	All companies within the financial statements	The Company	All companies within the financial statements	The Company		All companies within the financial statements		The Company	All within the financial statements Company	The Company	All within the financial statements Company	The Company	All within the financial statements Company
								Amount of cash dividends	Amount of stock dividends	Amount of cash dividends	Amount of stock dividends
Chief executive officer	Ding Jinzao	3,160	3,160	－	－	－	－	－	－	－	－	-0.24%	-0.24%	－	－	－	－	None
General Manager	Ding Zhimeng	2,423	2,423	－	－	－	－	－	－	－	－	-0.18%	-0.18%	－	－	－	－	None
Deputy General Manager	Ding Huaxiong	1,284	1,284	－	－	599	599	－	－	－	－	-0.14%	-0.14%	－	－	－	－	None
Deputy General Manager	Ding Zhiwei	1,498	1,498	－	－	128	128	－	－	－	－	-0.12%	-0.12%	－	－	－	－	None
Deputy General Manager	Shi Yuanliang	1,498	1,498	－	－	－	－	－	－	－	－	-0.11%	-0.11%	－	－	－	－	None
Executive Assistant to Chairman	Xue Youwei	2,765	2,765	－	－	172	172	－	－	－	－	-0.22%	-0.22%	－	－	－	－	None
Assistant manager of accounting	Wang Weiming

• 17 -

Range of remuneration paid to the general manager and the deputy general manager

Range of remuneration paid to each general manager and deputy general manager of the Company	Name of general manager and deputy general manager	Name of general manager and deputy general manager
	The Company	All companies within the financial statements
Less than 2,000,000 Yuan	Ding Zhiwei, Shi Yuanliang, Xue Youwei, Ding Huaxiong, Wang Weimin	Ding Zhiwei, Shi Yuanliang, Xue Youwei, Ding Huaxiong, WangWeimin
2,000,000 (included) ~ 5,000,000 Yuan	Ding Jinzao, Ding Zhimeng	Ding Jinzao, Ding Zhimeng
5,000,000 (included) ~ 10,000,000 Yuan	－	－
10,000,000 (included) ~ 15,000,000 Yuan	－	－
15,000,000 (included) ~ 30,000,000 Yuan	－	－
30,000,000 (included) ~ 50,000,000 Yuan	－	－
50,000,000 (included) ~ 100,000,000 Yuan	－	－
Over 100,000,000 Yuan	－	－
Total	7 persons	7 persons

(4) Name of managers to whom employee compensation is pad in the most recent year and distribution of such compensation:

Unit: *10[3] in New Taiwan Currency

	Title	Name	Amount of stock compensation	Amount of cash compensation	Total	Percentage of total sum in net income after tax (%)
Manager	Chief executive officer	DingJinzao	－	－	－	－
	General Manager	DingZhimeng
	Deputy general manager of sales, Sansda (Fujian)	Ding Huaxiong
	Deputy general manager of procurement, Sansda(Fujian)	Ding Zhiwei
	Deputy general manager of Sansda (Jiangsu)	Shi Yuanliang
	Executive Assistant to Chairman	Xue Youwei
	Assistant manager of accounting	WangWeiming

Note: It was loss in year 109; and no employee compensation was allocated in accordance with the Articles of Association.

• 18 -

(5) Compensation paid to managers receiving the top five highest remuneration in listed (OTC) companies:

Unit: TWD thousand, Dec. 31, 2020

Title	Name	Salary (A)	Salary (A)	Severance pay (B)	Severance pay (B)	Bonus and extraordinary charges etc. (C)	Bonus and extraordinary charges etc. (C)	Employee compensation (D)	Employee compensation (D)	Employee compensation (D)	Employee compensation (D)	Percentage of total remuneration (A+B+C+D) in net income after tax (%)	Percentage of total remuneration (A+B+C+D) in net income after tax (%)	Compensation paid to directors from an invested company other than the Company’s subsidiary or parent company
		The Company	All companies within the financial statements	The Company	All companies within the financial statements	The Company	All companies within the financial statements	The Company		All companies within the financial statements		The Company	All companies within the financial statements
								Amount of cash dividends	Amount of stock dividends	Amount of cash dividends	Amount of stock dividends
Chief executive officer	Ding Jinzao	3,160	3,160	－	－	－	－	－	－	－	－	-0.24%	-0.24%	None
General Manager	Ding Zhimeng	2,423	2,423	－	－	－	－	－	－	－	－	-0.18%	-0.18%	None
Deputy General Manager	Ding Huaxiong	1,284	1,284	－	－	599	599	－	－	－	－	-0.14%	-0.14%	None
Deputy General Manager	Ding Zhiwei	1,498	1,498	－	－	128	128	－	－	－	－	-0.12%	-0.12%	None
Deputy General Manager	Shi Yuanliang	1,498	1,498	－	－	－	－	－	－	－	－	-0.11%	-0.11%	None

• 19 -

(IV) Compare and describe the analysis on percentage of total remuneration paid to directors, supervisors, general manager and deputy general manager of the Company in the net income after tax as mentioned in individual or separate financial statements in the most recent two years of the Company and all companies within the consolidated financial statements, and describe the remuneration policy, standard and combination, procedure for remuneration decision, relationship with business performance and future risks:

1. Analysis on percentage of total remuneration paid to directors, supervisors, general manager and deputy general manager of the Company in the net income after tax as mentioned in individual or separate financial statements in the most recent two years of the Company and all companies within the consolidated financial statements:

Unit: *10[3] in New Taiwan Currency

					Unit: *103in New Taiwan Currency	Unit: *103in New Taiwan Currency	Unit: *103in New Taiwan Currency	Unit: *103in New Taiwan Currency
Item	2019				2020
	Individual remuneration (note)		Consolidated remuneration		Individual remuneration (note)		Consolidated remuneration
	Amount	%	Amount	%	Amount	%	Amount	%
Director	-	-	6,292	-0.98	-	-	6,040	-0.46
Supervisor	-	-	-	-	-	-	-	-
General manager and uty general manager	-	-	12,963	-2.02	-	-	13,527	-1.01

Note: The Company only issues the consolidated financial statements of parent company and subsidiaries, and thus it is inapplicable.

1. Remuneration policy, standard and combination, procedure for remuneration decision, relationship with business performance and future risks

According to Article 105 of the Articles of Association, if there is any profit in the current year, no less than 2% of the same shall be allocated as employee compensation and no more than 1% shall be allocated as director compensation. Remuneration paid to directors (including independent directors) and managers of the Company shall be determined in accordance with their participation in the Company’s operation and performance, by giving consideration to the following three major aspects: practice for core value and operation management capacity, accounting for 40% (including ethical practice, fulfillment of company’s operation principles, corporate culture, leadership and management capacity), financial & business operation performance index, accounting for 40% (including profitability, growth rate, market leadership and product quality), and other special contribution or major negative events, accounting for 20% (other special contributions including national certification or awards obtained by the Company; major negative events including major negative news and improper internal management etc.), all those shall be included in the performance review and remuneration payment.

• 20 -

III. Implementation of corporate governance

(I) Information about the operation of the Board of Directors

A total of 6 (A) meetings of the board of directors were held in 2020. Director attendance was as follows:

	Title	Title	Name	Name	Actual attendance (B)	Actual attendance (B)	Times of attendance by authorization	Times of attendance by authorization	Actual attendance rate (%) [B/A]	Remarks
	Chairman		DingJinzao		6				100.00
	Director		Ding Holding Ltd (Representative Ding Zhimeng)		6				100.00
	Director		ZhangHuiqun		6				100.00
	Director		ZhangDuozhong		6				100.00
	Independent director		Li Junde		6				100.00
	Independent director		Li Fan		6				100.00
	Independent director		Liao Zhengpin		4				66.66
	Other events to be recorded: I. If any of the following circumstances occur, date of meeting, session, content of proposal, all independent directors’ opinions and the Company’s response should be specified: The Company has set up the audit committee and thus, Article 14 paragraph 3 of the Securities and Exchange Act is inapplicable and no independent director raises an objection or reservation with respect to the resolution by the Board of Directors. (I) Matters listed in Article 14 paragraph 3 of the Securities and Exchange Act. (II) Other matters involving objections or expressed reservations by independent directors that were recorded or states in writing that requires a resolution by the Board of Director. II. If there is directors’ avoidance of motions in conflict with interest, the director’s name, content of proposal, causes for avoidance and voting should be specified: None. III. The listed (OTC) company shall disclose the information about evaluation cycle, period, method and content etc. for self- (or peer-) evaluation of the Board of Directors: Evaluation cycle Evaluation period Scope of evaluation Evaluation method Content of evaluation Once a year Jan. 01, 2020 ~ Dec. 31, 2020 Including performance evaluation of the Board of Directors, board members, audit committee and remuneration committee. Including self-evaluation by the Board of Directors and self-assessment of board members (I) Five major aspects for performance evaluation of the Board of Directors 1. Participation in the operation of the Company 2. Improvement of the quality of the Board of Directors’ decision making 3. Composition and structure of the Board of Directors 4. Election and continuing education of the directors 5. Internal control (II) Six major aspects for performance evaluation of board members: 1. Grasp of the Company’s goals and missions 2. Recognition of directors’ duties 3. Participation in the operation of the Company
	Evaluation cycle	Evaluation period		Scope of evaluation		Evaluation method		Content of evaluation
	Once a year	Jan. 01, 2020 ~ Dec. 31, 2020		Including performance evaluation of the Board of Directors, board members, audit committee and remuneration committee.		Including self-evaluation by the Board of Directors and self-assessment of board members		(I) Five major aspects for performance evaluation of the Board of Directors 1. Participation in the operation of the Company 2. Improvement of the quality of the Board of Directors’ decision making 3. Composition and structure of the Board of Directors 4. Election and continuing education of the directors 5. Internal control (II) Six major aspects for performance evaluation of board members: 1. Grasp of the Company’s goals and missions 2. Recognition of directors’ duties 3. Participation in the operation of the Company

• 21 -

4.	Management of internal relationship and
	communication
5.	Professionalism and continuing professional
	education
6.	Internal control
(III)	Five major aspects for performance
evaluation of audit committee
1.	Participation in the operation of the
	Company
2.	Recognition of audit committee’s duties
3.	Improvement of the quality of the audit
	committee’s decision making
4.	Composition of audit committee and
	election of its members
5.	Internal control
(IV)	Four major aspects for performance
evaluation of remuneration committee
1.	Participation in the operation of the
	Company
2.	Recognition of remuneration committee’s
	duties
3.	Improvement of the quality of the
	remuneration committee’s decision making
4.	Composition of remuneration committee
	and election of its members

• IV. Objectives for strengthening the functionality of the Board in the current and most recent year (i.e. establishment of audit committee, improvement of information transparency etc.) and evaluation on their fulfillment:

• (I) The Company’s audit committee was established in 2016. For details about the implementation status, refer to the operation of the audit committee.

• (II) According to the evaluation results of the 7[th] corporate governance, the Company has 51%~65% range before listed company. In future, the Company will disclose related information on the Company website and the website designated by the competent authority, to improve the information transparency.

Training courses have been arranged for directors and supervisors; and directors, supervisors and managers are encouraged to participate in the corporate governance:

Continuing education of directors of the Company in 2020 was as follows:

Title	Name	Date	Host	Course Name	Duration
Chairman	Ding Jinzao	2020/12/22	Taiwan Corporate Governance Association	Regulatory compliance and supervision obligations of the directors	3
				Major information disclosure and supervision obligations of the directors	3
Director	Ding Holding Ltd	2020/12/22	Taiwan Corporate Governance Association	Regulatory compliance and supervision obligations of the directors	3
				Major information disclosure and supervision obligations of the directors	3

• 22 -

Director	Zhang Huiqun	2020/12/22	Taiwan Corporate Governance Association	Regulatory compliance and supervision obligations of the directors	3
				Major information disclosure and supervision obligations of the directors	3
Director	Zhang Duozhong	2020/12/22	Taiwan Corporate Governance Association	Regulatory compliance and supervision obligations of the directors	3
				Major information disclosure and supervision obligations of the directors	3
Independent director	Li Junde	2020/12/22	Taiwan Corporate Governance Association	Regulatory compliance and supervision obligations of the directors	3
				Major information disclosure and supervision obligations of the directors	3
Independent director	Li Fan	2020/12/22	Taiwan Corporate Governance Association	Regulatory compliance and supervision obligations of the directors	3
				Major information disclosure and supervision obligations of the directors	3
Independent director	Liao Zhengpin	2020/12/22	Taiwan Corporate Governance Association	Regulatory compliance and supervision obligations of the directors	3
				Major information disclosure and supervision obligations of the directors	3

(II) Operation status of audit committee or participation of supervisors in the Board of Directors

Participations of the audit committee in the Board of Directors in 2020 were described as below: A total of 5 (A) meetings of the audit committee were held in 2020. Independent director attendance was as follows:

follows:
Title	Name	Actual attendance (B)	Actual attendance rate (%) [B/A]	Remarks
Independent director	Li Junde	5	100.00
Independent director	Li Fan	5	100.00
Independent director	Liao Zhengpin	4	80.00
The audit committee of the Company is comprised of three independent directors, and assists the Board in fulfilling its supervision over the quality and integrity degree of accounting, auditing, financial reporting process and financial control fulfilled by the Company. The audit committee held a total of 5 meetings in 2020 and key points were summarized as below: ●Main items reviewed 1. Financial statements audit and accounting policy & procedure. 2. Internal control system and related policy & procedure

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• Major assets or derivative transaction

• Major capital loans and endorsement or guarantee

• Raising or issuing marketable securities

• Financial derivatives and cash investment

• Regulatory compliance

• Existence of related parties transaction between manager and directors and possible interest conflict

• Information safety

• Risk management of the Company

• Qualifications, independency and performance evaluation of certified public accountants

• Appointment or remuneration of certified public accountants

• Performance of duties of the audit committee

● Review of financial statements

The Board of Directors issued the business report of Year 2020, consolidated financial statements and of loss make-up proposal of the Company, among which the financial statements were audited by Deloitte & Touche under entrustment and audit report was issued therefrom. The foregoing business report, consolidated financial statements and loss make-up proposal were audited by the audit committee as completely compliant.

●Evaluation on effectiveness of internal control system

The audit committee assessed the effectiveness of policies and procedures (including finance, operation, risk management, information safety, outsourcing, regulatory compliance and such control measures) for internal control system of the Company, and reviewed the periodic reports from auditing department, certified public accountants and management of the Company, including risk management and regulatory compliance. In the light of the internal control: integrated framework – the internal control system published by COSO in 2013, the audit committee believed that risk management and internal control system of the Company were effective, and the Company had adopted necessary control mechanism to supervise and correct those violations.

●Appointment of CPA

The Audit Committee is given the responsibility of supervising the independence of the certified public accountant firm to ensure the fairness of the financial statements. In general, the certified accounting firm is not allowed to provide other services to the Company except for tax-related services or specially approved items. All services provided by the certified public accountant firm must be approved by the Audit Committee.

In order to ensure the independence of the certified public accountant firm, the Audit Committee has formulated an independence evaluation form based on Article 47 of the Accountant Law and No. 10 [Integrity, Fairness, Objectivity, and Independence] of The Norm of Professional Ethics for Certified Public Accountant, to assess the independence, expertise and competence of accountants, and assess whether it is a related party of the Company, or it has businesses or financial interests with the Company, etc. The 9th Meeting of 2nd Audit Committee on March 23, 2021 and the 11th Meeting of 5th Board of Directors on March 23, 2021 reviewed and approved the appointment of Lin Zhaomin and Chen Wenbin from Candor Taiwan CPAs as certified public accountants from 2021. The assessment determined that both of them meet the independence assessment standards, and are sufficient to serve as the Company’s financial certified public accountants.

Other events to be recorded:

• I. If the operation of the Audit Committee has one of the following circumstances, the date, the period, the content of the proposal of the meeting of the Board of Directors, the opinions of all independent directors and the Company’s handling of the opinions of independent directors should be stated:

• (I) Matters listed in Article 14 (5) of Securities Exchanges Act.

• (II) Except for the previous issues, other resolutions that have not been approved by the Audit Committee but approved by more than two-thirds of all directors.

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Board of Directors	Content and follow-up handling of proposal	Matters listed in Article 14 (5) of Securities Exchanges Act.	Resolutions that have not been approved by the Audit Committee but approved by more than two-thirds of all directors.
5th Meeting of 5th Session 2020.03.13	1. Approved 2019 business report and consolidated financial report of the Company	V
	2. Approved the assessment of the independence of the Company’s certified accountants	V
	3. Approved the assessment of the effectiveness of the internal control system of the Company and its subsidiaries Sansda (Fujian) Plastic Co., Ltd., Sansda (Jiangsu) Environmental Technology Co., Ltd., and Sansda (Hong Kong) Trading Co., Ltd. and issued a statement on internal control system.	V
	4. Approved the revision of the Operating Procedures of Financial Statement Preparation Process of the Company	V
	5. Approved the revision of the Rules of Procedures for Shareholders’ Meetings of the Company	V
	6. Approved the revision of the Code of Practice on Corporate Governance, Code of Practice on Corporate Social Responsibility and Code of Integrity Management	V
	7. Approved the revision of the Organizational Rules for the Audit Committee and Organizational Rules for the Remuneration Committee of the Company	V
	8. Approved the revision of the Rules of Procedures for Board of Directors of the Company	V
	9 Approved the revision of the Election Measures of Directors and Supervisors of the Company	V
	Resolution results of the Audit Committee (March 13, 2020): All members of the Audit Committee agreed the approval.
	The Company’s handling of the opinions of the Audit Committee: All the directors present agreed the approval.
6th Meeting of 5th Session 2020.05.04	1. Approved the 2019 profit and loss appropriation proposal of the Company	V
	2. Approved the draft revision of the Articles of Association of the Company	V
	Resolution results of the Audit Committee (May 4, 2020): All members of the Audit Committee agreed the approval.
	The Company’s handling of the opinions of the Audit Committee: All the directors present agreed the approval.
8th Meeting of 5th Session 2020.08.07	1. Approved the consolidated financial report for the first half of 2020. (Only reported to the Board of DirectorsaccordingtoArticle 36 of the Securities	V

• 25 -

		Exchanges Act)
		Resolution results of the Audit Committee (August 7, 2020): All members of the Audit Committee agreed the approval.
		The Company’s handling of the opinions of the Audit Committee: All the directors present agreed the approval.
	9th Meeting of 5th Session 2020.11.10	1. Approved the proposal of fund loan of the subsidiary Sansda(Fujian)Plastic Co.,Ltd.		V
		2. Approved the revision of the Rules of Procedures for Shareholders’ Meetingof the Company		V
		3. Approved the revision of the Election Measures of Directors and Supervisors of the Company		V
		4. Approved the revision of the Rules for the Independent Directors’ Scope of Responsibilities of the Company		V
		5. Approved the revision of the Organizational Rules of the Audit Committee of the Company		V
		6. Approved the revision of the Rules of Procedures for Board of Directors of the Company		V
		7. Approved the revision of the Organizational Rules of the Remuneration Committee of the Company		V
		8. Approved the revision of the Measures for Self-evaluation or Peer Evaluation of the Board of Directors of the Company		V
		Resolution results of the Audit Committee (November 10, 2020): All members of the Audit Committee agreed the approval.
		The Company’s handling of the opinions of the Audit Committee: All the directors present agreed the approval.
	10th Meeting of 5th Session 2020.12.22	1. Approved the proposed 2021 audit plan of the Company, its subsidiaries Sansda (Fujian) Company, Sansda (Jiangsu) and Sansda (Hong Kong) Trading Co., Ltd.		V
		2. Approved the offsetting of the interests receivable and payable between the Sansda (Hong Kong) Trading Co., Ltd. and Sansda (Jiangsu) Environmental Technology Co.,Ltd.,and adjustment of the borrowinginterest rate		V
		Resolution results of the Audit Committee (December 22, 2020): All members of the Audit Committee agreed the approval.
		The Company’s handling of the opinions of the Audit Committee: All the directors present agreed the approval.

• 26 -

overseas subsidiaries, the overall operation, and the internal control audit, and should fully communicate on whether there are major adjustment entries or legal amendments that affect the accounting. In case of major abnormal events, a meeting should be convened at any time.

(2) The Audit Committee appoints professional accountants to review the Company’s financial statements, and issues an audit opinion to report to the Audit Committee for consideration.

(3) The head of internal audit and the Audit Committee should at least conduct a regular meeting per quarter to report on the Company’s internal audit performance and internal control operations. In case of major abnormal events, a meeting should be convened at any time.

1. Summary of all previous communications between the Audit Committee and accountants:

3.	Date	Communication focus	Opinions of the Audit Committee and follow-up implementation
	2020/03/13	1. The accountants reported and explained to the Audit Committee on the key audit matters and report content of the 2019 consolidated financial report, and responded to questions raised by the committee members. 2. The accountants reported on the internal control audit in 2019.	None.
	2020/11/10	The accountants planned the 2020 annual audit planning report for the Group	None.
	2021/03/22	1. The accountants reported and explained to the Audit Committee on the key audit matters and report content of the 2020 consolidated financial report, and responded to questions raised by the committee members. 2. The accountants reported on the internal control audit in 2020.	None.
	Summaryof allprevious communications between the Audit Committee and the head of internal audit:
	Date	Communication focus
	2020/03/13	1. Reported on the implementation of the audit plan of the parent and subsidiary companies. 2. Reported on the internal control audit of accountants in 2019. 3. Reported on the assessment of the effectiveness of the internal control system of the Company and its subsidiaries Sansda (Fujian) Plastic Co., Ltd., Sansda (Jiangsu) Environmental Technology Co., Ltd., and Sansda (Hong Kong) Trading Co., Ltd. in 2019 and issued a statement on internal control system.
	2020/05/04	Reported on the implementation of the auditplan of theparent and subsidiarycompanies.
	2020/08/07	Reported on the implementation of the auditplan of theparent and subsidiarycompanies.
	2020/11/10	Reported on the implementation of the auditplan of theparent and subsidiarycompanies.
	2020/12/22	Reported on the 2021 audit plan of the Company, its subsidiaries Sansda (Fujian) Company,Sansda(Jiangsu)and Sansda(HongKong)TradingCo.,Ltd.
	2021/03/22	1. Reported on the implementation of the audit plan of the parent and subsidiary companies. 2. Reported on the internal control audit of accountants in 2020 3. Reported on the assessment of the effectiveness of the internal control system of the Company and its subsidiaries Sansda (Fujian) Plastic Co., Ltd., Sansda (Jiangsu) Environmental Technology Co., Ltd., and Sansda (Hong Kong) Trading Co., Ltd. in 2020 and issued a statement on internal control system.
	2021/05/12	Reported on the implementation of the auditplan of theparent and subsidiarycompanies.

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(III) The situation of corporate governance operation and its differences from the Code of Practice on Corporate Governance of Listed/OTC Companies and the

reasons

	reasons	reasons	reasons
Evaluation items	Operation			Differences from the Code of Practice on Corporate Governance of Listed/OTC Companies and the reasons
	Yes	No	Summary
I. Does the Company formulate and disclose the code of practice on corporate governance in accordance with the Code of Practice on Corporate Governance of Listed/OTC Companies and the reasons?	V		The Company has formulated the code of practice on corporate governance and disclosed it on the public information observatory and company website.	No significant difference yet
II. Equity structure of the Company and shareholder equity
(I) Does the Company establish internal operating procedures to handle the suggestions, doubts, disputes and litigations of shareholders, and implement them in accordance with the procedures?		V	The Company has not specified operating procedures, and litigations are handled by the spokesperson or acting spokesperson at present. The Taiwan office is responsible for communication on equity issues and reflecting shareholders’ opinionstothe senior management at anytime.	No significant difference yet
(II) Does the Company have a list of major shareholders who actually control the Company and the final controllers of major shareholders?	V		At present, the Company has arranged a specially-assigned person to manage relevant information, so as to keep abreast of the list of major shareholders who actually control the Companyand the final controllers of major shareholders.	No significant difference yet
(III) Does the Company establish and implement the risk control and firewall mechanisms between affiliated companies?	V		The Company has established the Transaction Procedures for Group Companies, Specific Companies, and Stakeholders, has clear regulations on operations, business and financial transactions with affiliated companies, and has established risk control mechanisms.	No significant difference yet
(IV) Does the Company establish internal regulations to prohibit the Company’s insiders from using undisclosed information on the market to buy and sell securities?	V		1. The Company has formulated the Code of Integrity Management and Management Procedures for Preventing Insider Transactions to regulate the matters that should be followed by insiders should. 2. The Company conducts guidance and advocacy of the Management Procedures for Preventing Insider Trading, Operation Procedures for Internal Important Information Processing and relevant laws and regulations at least once a year for current directors, managers and employees. New directors and managers will beprovided with	No significant difference yet

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Evaluation items			Operation	Differences from the Code of Practice on Corporate Governance of Listed/OTC Companies and the reasons
	Yes	No	Summary
			guidance and advocacy within 3 months of taking office, and new employees will receive guidance and advocacy by HR during pre-employment training. 3. In 2020, the Company has conducted 3-hour guidance and advocacy for 326 incumbent directors, managers and employees from December 23 to December 25. The content of the course consisted of important information and confidential operations, the reasons for the occurrence of insider transactions and the identification process as well as examples, the scope of internal important information, confidential operations, public operations and violation handling, and placed the briefing and audiovisual files on the Company’s internal website for all employees to refer to.
III. The composition and responsibilities of the Board of Directors
(I) Does the Board of Directors formulate and implement a diversified policy on the composition of members?	V		1. The Company has approved the revision of the Code of Practice on Corporate Governance at the 5th meeting of the 5th Board of Directors on March 13, 2020, and formulated a diversified policy in Chapter III Enhancing the Functions of the Board of Directors. The nomination and selection of members of the Company’s Board of Directors are in line with the Articles of Association of the Company. The selection of any director shall adopt the system for nominating candidates. In addition to evaluating the academic qualifications of each candidate, the opinions of stakeholders should be consulted, the Election Measures of Directors and Supervisors and the Code of Practice on Corporate Governance should be abided by to ensure the diversity and independence of directors. 2. The current Board of Directors of the Companyconsists of	No significant difference yet

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Evaluation items		Operation	Operation	Differences from the Code of Practice on Corporate Governance of Listed/OTC Companies and the reasons
	Yes	No	Summary
			7 directors (including 3 independent directors). The members have rich experience and expertise in the fields of accounting, law, management and plastics. Please refer to Note 1 for the relevant implementation. 3. The diversity policy prepared by the Board of Directors on composition of members is disclosed on the Company’s website andpublic information observatory.
(II) In addition to the Remuneration Committee and the Audit Committee established by the Company in accordance with the law, does the Company voluntarily set up various other functional committees?		V	In addition to the Remuneration Committee and the Audit Committee established by the Company in accordance with the law, other functional committees are separately should be set up upon the authorization by the Board of Directors as required.	No significant difference yet
(III) Does the Company establish performance evaluation measures for the Board and the evaluation methods to conduct annual and regular performance evaluations, and report the performance evaluation results to the Board of Directors, as well as using the results as a reference for remuneration and nomination for renewal of individual directors?	V		The Company has caused the Board of Directors on August 13, 2016 to approve to formulate the Measures for Self-evaluation or Peer Evaluation of the Board of Directors, and the Board of directors approved the revision on November 10, 2020, stipulating that the Board of Directors should implement the internal performance evaluation for the Board of directors at least once a year, an external performance evaluation for the Board of Directors at least every three years. The internal evaluation period of the Board of Directors shall fall in the end of each year, with the scope, methods and procedures of the evaluation being implemented in accordance with the Measures. The Company completed the performance evaluation of the overall Board of Directors, individual directors and various functional committees in January 2021, and the meeting of the Board of Directors convened on March 22, 2021 reported the evaluation results and the direction of continuous enhancement in 2021. The overall assessment of the Board of Directors of the Companyincludes the degree ofparticipation in the	No significant difference yet

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Evaluation items		Operation	Operation	Differences from the Code of Practice on Corporate Governance of Listed/OTC Companies and the reasons
	Yes	No	Summary
			Company’s operations, the improvement of decision-making quality of the Board of Directors, the composition and structure of the Board of Directors, the selection and continuing education of directors, and internal control. The performance evaluation of individual directors includes the mastery of the goals and tasks of the Company, the awareness of responsibilities of directors, the degree of participation in the Company’s operations, internal relationship management and communication, the expertise and continuing education of directors, and internal control. The performance evaluation of the Audit Committee includes the degree of participation in the Company’s operations, the awareness of responsibilities of the Audit Committee, the improvement of decision-making quality of the Audit Committee, the composition of the Audit Committee and the selection of members, and internal control. The performance evaluation of the Remuneration Committee includes the degree of participation in the Company’s operations, the awareness of responsibilities of the Remuneration Committee, the improvement of decision-making quality of the Remuneration Committee, the composition of the Remuneration Committee and the selection of members. The results of this evaluation ranged from 94 to 97.5 points. According to the results of the performance evaluation in 2020, the overall Board of Directors, individual directors, the Audit Committee, and the Remuneration Committee of the Company are still well-operated.

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Evaluation items			Operation	Differences from the Code of Practice on Corporate Governance of Listed/OTC Companies and the reasons
	Yes	No	Summary
(IV) Does the Company regularly assess the independence of certified public accountants?	V		The Finance Department of the Company assesses the independence of certified public accountants once a year and submitted the results to the 9th Meeting of 2nd Audit Committee on March 23, 2021, and the 11th Meeting of 5th Board of Directors on March 23, 2021 reviewed and approved the appointment of Lin Zhaomin and Chen Wenbin from Candor Taiwan CPAs as certified public accountants from 2021. The Finance Department of the Company assessed that both Lin Zhaomin and Chen Wenbin from Candor Taiwan CPAs meet the independence assessment standards (Note 2), and are sufficient to serve as the Company’s financial certified public accountants. The accounting firm also issued an independence declaration. The certified public accountants appointed by the Company are not directors, managers, employees, or shareholders of the Company or affiliated companies, and it is confirmed that they are not stakeholders, which is in compliance with the independence judgment requirements of the competent authority.	No significant difference yet
IV. Does the listed/OTC companies arrange suitable and appropriate number of corporate governance personnel, and designate a corporate governance director to be responsible for matters related to corporate governance (including but not limited to providing directors and supervisors with data required for business execution, assisting directors and supervisors in complying with laws and regulations, handling matters related to meetings of the Board of Directors and shareholders meeting in accordance with the law, preparing minutes of meetings of the Board of Directors and shareholders meeting, etc.)?		V	Approved by the resolution of the 12th meeting of the 5th Board of Directors on May 12, 2021, the Company appointed the Assistant Manager Wang Weimin, also the Accounting Manager, to concurrently hold the post of the first Director of Corporate Governance of the Company to protect shareholders’ rights and strengthen the functions of the Board of Directors. The Assistant Manager Wang Weimin has more than three years of experience as a financial supervisor in public offering companies. The main responsibilities of the Director of Corporate Governance include handling matters related to meetings of the Board of Directors and shareholders meeting in accordance with the law, preparing minutes of meetings of the Board of Directors and shareholders meeting, assisting the directors in their appointment and continuing education, providingthe directors with the data requiredforbusiness	No significant difference yet

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Evaluation items			Operation	Differences from the Code of Practice on Corporate Governance of Listed/OTC Companies and the reasons
	Yes	No	Summary
			execution, and assisting the directors in complying with laws and regulations. Because the Assistant Manager Wang Weimin has just concurrently served as the Director of Corporate Governance, the initial trainingfor theyear has not beenyet completed.
V. Does the Company establish communication channels with stakeholders (including but not limited to shareholders, employees, customers and suppliers, etc.), and set up a special area for stakeholders on the Company’s website, and appropriately respond to important CSR topics that stakeholders care about?	V		The Company has set up a special area for stakeholders on the Company’s website, and provided dedicated personnel and e-mail to deal with matters related to the external relations and stakeholders of the Company.	No significant difference yet
VI. Does the Company entrust a professional equity agency to handle the affairs of the shareholders meeting?	V		The Company has entrusted Yuanta Securities Co., Ltd. to handle the affairs of the shareholders meeting and equity matters on its behalf.	No significant difference yet
VII. Information disclosure
(I) Does the Company build a website to disclose financial business and corporate governance information?	V		The company has built a website for the investors to inquire about financial business and corporate governance information.	No significant difference yet
(II) Does the Company implement other information disclosure methods (such as building an English website, designating a special person to be responsible for collecting and disclosing company information, implementing the spokesperson system, putting the process of legal person briefings on companywebsite,etc.)?	V		The Company has established a spokesperson system, and has designated a person to be responsible for disclosing material company information, and uploading information on the public information observatory and website on time. Besides, the Company holds Road Shows from time to time, and announces the content of Road Shows to the public information observatoryin accordance with regulations.	No significant difference yet
(III) Does the Company announce and file its annual financial report within two months after the end of fiscal year, and announce and file the financial reports for the first, second, and third quarters and the operatingconditions of each month	V		The Company has not announced and filed in advance, but the deadlines stipulated by laws and regulations will be met.	No significant difference yet

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Evaluation items	Operation	Operation	Operation	Differences from the Code of Practice on Corporate Governance of Listed/OTC Companies and the reasons
	Yes	No	Summary
before the prescribed deadlines?
VIII. Does the Company have other important information that helps to understand the Company’s governance operations (including but not limited to rights and interests of employees, employee care, investor relations, supplier relations, rights of stakeholders, in-service training courses of directors and supervisors, the implementation of risk management policies and risk measurement standards, the implementation of customer policies, the purchase of liability insurance for directors and supervisors by the Company, etc.)?	V		1. The Company has always attached importance to the rights and interests of employees, and the harmony of employee-employer relation. In addition, the Company has established internal control systems and various management measures, clearly specifying the rights, obligations and welfares of employees, and regularly reviews the content of welfares to protect the rights and interests of employees. 2. The company has arranged in-service training courses for directors and independent directors. 3. Except for special circumstances, both directors and independent directors should attend the meetings, and if the directors have an interest in the proposals listed by the Board of Directors, such directors are not allowed to vote. 4. The Board of Directors of the Company currently has no proposals in which the directors have an interest. 5. The Company has dedicated personnel and E-mail to serve stakeholders and handle shareholders’ suggestions. 6. The Company has established various internal regulations and conducted various risk management and assessments. 7. The Company has purchased liability insurance for the directors. 8. The customers of the Company are all industrial customers, and all dealings with customers comply with contract obligations. 9 The Company understands that the development of the industry requires the joint cooperation and efforts of all suppliers. Therefore, based on the principle of mutual prosperity and mutual benefit, it aims to promote industrial development and enhance self-competitiveness,thereby	No significant difference yet

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Evaluation items	Evaluation items	Evaluation items	Evaluation items	Operation	Operation	Operation	Differences from the Code of Practice on Corporate Governance of Listed/OTC Companies and the reasons
				Yes	No	Summary
						seeking the greatest rights and interests for shareholders.
IX. Please explain the corporate governance evaluation results released by the Corporate Governance Center of Taiwan Stock Exchange Corporation in the most recent year to make improvements, and propose matters and measures that are given priority for items which have not yet improved: 1. According to the results of the 6th Corporate Governance Evaluation in 2020, the Company scored 58.54, and its previous score was 68.38. There are a total of 905 listed companies subject to evaluation this time, and the evaluation results are divided into 7 intervals. The score of the Company falls in the fifth interval (51%~65%), ranking among the medium level. 2. The indicators that were not scored in the 7th evaluation and are expected to be improved in the 8th session are as follows. Due to factors such as the revision of the Articles of Association and regulations, the structure of public information in the English version, and the cost of improvement implementation, other indicators that cannot be improved in scores remain to be enhanced by the Company by planning as appropriate. Serial number of the 8th session Serial number of the 7th sessionIndex 1.10 1.10 Does the Company upload the English version of agenda and supplementary materials for the meeting 30 days before the general meeting of shareholders? 1.11 1.11 Does the Company upload the English version of annual report 7 days before the general meeting of shareholders? 1.15 1.15 Does the Company formulate internal rules that prohibit directors or employees and other insiders from using information that is not available in the market for profit and disclose them and the implementation on the Company’s website? 2.21 2.21 Does the Company have a corporate governance director to be responsible for matters related to corporate governance, and to explain the scope of authority and training on the website and annual report of the Company? 3.5 3.5 Does the Company upload the English disclosure of financial report 7 days before the general meeting of shareholders? 4.15 4.15 Does the website or annual report of the Company disclose the Board of Directors clearly stipulates specific practices and plans for preventing dishonest behaviors based on integrity management policy, and explain the implementation?
	Serial number of the 8th session	Serial number of the 7th session	Index
	1.10	1.10	Does the Company upload the English version of agenda and supplementary materials for the meeting 30 days before the general meeting of shareholders?
	1.11 1.15 2.21	1.11 1.15 2.21	Does the Company upload the English version of annual report 7 days before the general meeting of shareholders? Does the Company formulate internal rules that prohibit directors or employees and other insiders from using information that is not available in the market for profit and disclose them and the implementation on the Company’s website? Does the Company have a corporate governance director to be responsible for matters related to corporate governance, and to explain the scope of authority and training on the website and annual report of the Company?
	3.5	3.5	Does the Company upload the English disclosure of financial report 7 days before the general meeting of shareholders?
	4.15	4.15	Does the website or annual report of the Company disclose the Board of Directors clearly stipulates specific practices and plans for preventing dishonest behaviors based on integrity management policy, and explain the implementation?

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Note 1: Implementation of achieving diversity of Board members

Core items of
diversity			Basic composition								Industrial experience					Professional background/ability
										Securities	Insurance	Marketing	Operating Management	Plastic recycling and production	Accounting	Governing law	Financial	Risk management	Plastic processing
									Tenure of
						Age			independent
									director
			Concurrently
	Ntilit	Gd	serving as an
	aonay	ener	employee of
			the Company
				35 - 40	51 - 55	61 - 65	71 - 75	76 - 80	3-9 years
Name of
directors
Ding Jinzao	Philippines	Male	V			V						V	V	V					V
Ding Holding
Limited
	Philippines	Male	V	V								V	V					V
(Representative
Ding Zhimeng)
Zhang Huiqun	Republic of China	Male	V				V					V	V					V
Zhang Duozhong	Republic of China	Male		V									V				V
Li Junde	Republic of China	Male				V			V		V				V	V
Li Fan	Republic of China	Male			V				V	V					V	V
Liao Zhengpin	China	Male						V	V					V					V

●The proportion of directors with employee status in the Company is 43%. At present, 7 directors are all male, with 2 directors between 35 and 40 years old, 1 between 51 and 55 years old, 2 between 61 and 65 years old, 1 between 71 and 75 years old, 1 between 76 and 80 years old. The proportion of independent directors is 43%, and the three independent directors have served for 3 to 9 years. The Company attaches importance to the professional background and ability of board members in plastic processing. Currently, only 2 directors are qualified, and it is expected to increase to at least 3 directors before the seventh session to assist in the industry promotion of the Company.

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Note2: Evaluation criteria for the independence of accountant

Evaluation items	Whether the evaluation results	meet the requirements of independence
1. Whether an independence statement is issued by the accountant.	Yes	Yes
2. Whether the accountant has a direct or significant indirect financial relationship with the Company.	No	Yes
3. Whether the accountant has any financing or guarantee with the Company or the directors of the Company.	No	Yes
4. Whether the accountant has a close business relationship and potential employment relationship with the Company.	No	Yes
5. Whether accountant and his/her audit team members currently serve as or in the past two years have served as directors, managers or positions that have a significant impact on the audit work in the Company.	No	Yes
6. Whether the accountant provides the Company with non-audit service items that may directly affect the audit work.	No	Yes
7. Whether the accountant has provided intermediary services for the stocks or other securities issued by the Company.	No	Yes
8. Whether the accountant has acted as the defender of the Company or coordinated conflicts with other third parties on behalf of the Company.	No	Yes
9. Whether the accountant has family relation with the Company’s directors, managers, or persons in positions that have a significant influence on the audit case.	No	Yes

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(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions:

1. Information on the members of the Remuneration Committee

(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee	(IV) If the Company has a remuneration committee, it shall disclose the composition, responsibilities and operation conditions: 1. Information on the members of the Remuneration Committee
April 18,2021
Identity category (Note 1)	Condition Name	Meet one of the following professional qualification requirements, together with at least five years’ work experience			Independence criteria (note 2)										Number of members concurrently serving as members of the remuneration committees of other public offering companies	Remarks
		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 professional or technical specialist who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Company	Having work experience necessary for commerce, legal affairs, finance, accounting or corporate business	1	2	3	4	5	6	7	8	9	10
Independent director	Li Junde														1
Independent director	Li Fan														0
Independent director	Liao Zhengpin														0

Note 1: Please fill in director, independent director or others in the identity category.

Note 2: If any member meets the following conditions two years before the election and during the tenure, please type “” in the space below each condition code.

• (1) Not an employee of the Company or its affiliates.

• (2) Not a director or supervisor of the Company or its affiliates (but if the Company and its parent company, subsidiaries, or subsidiaries of the same parent company have independent directors serving concurrently in accordance with this law or local laws and regulations, they can be excluded).

• (3) Not directly or indirectly holding 1% or more of the total issued shares of the Company in the name of oneself, one’s spouse or minor children, or the natural person shareholders at the Top 10 shareholders of the Company;

• (4) Not the spouse, relative within the second degree of kinship or the lineal relative by blood within the third degree of kinship of the manager listed in (1) or the personnel listed in (2) and (3).

• (5) Not a director, supervisor or employee who directly holds more than 5% of the total issued shares of the Company, at the Top 5 shareholders, or is the designated representative to serve as the Company’s director or supervisor in accordance with Article 27 (1) or (2) of the Company Law, (but if the Company and its parent company, subsidiaries, or subsidiaries of the same parent company have independent directors serving concurrently in accordance with this law or local laws and regulations, they can be excluded).

• (6) Not a director, supervisor or employee of other companies whose over 50% of director positions or voting shares are controlled by the same person (but if the Company or its parent company, subsidiaries, or subsidiaries of the same parent company have independent directors serving concurrently in accordance with this law or local laws and regulations, they can be excluded).

• (7) Not a director, supervisor or employee of other companies or institutions whose positions of Chairman, General Manager or the equivalents are held by the same person or his/her spouse (but if the Company or its parent company, subsidiaries, or subsidiaries of the same parent company have independent directors serving concurrently in accordance with this law or local laws and regulations, they can be excluded).

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• (8) Not a director, supervisor, manager shareholders with over 5% of shares of specific companies or institutions that have financial or business dealings with the Company (but if any specific companies or institutions hold a total of more than 20% but less than 50% of the issued shares of the Company, and the Company or its parent company, subsidiaries, or subsidiaries of the same parent company have independent directors serving concurrently in accordance with this law or local laws and regulations, they can be excluded).

• (9) Not a professional or the owner, partner, director, supervisor, manager and his/her spouse of sole proprietorship, partnership, company or institution that provides audits for the Company or affiliated companies, or that has obtained an aggregate amount less than NT$500,000 as the remuneration in the past two years for business, legal, financial, accounting services and other related services. However, the above does not apply to members of the Remuneration Committee, Public Acquisition Review Committee, or Special M&A Committee who perform their duties in accordance with the Securities Exchanges Act or the relevant laws and regulations of the Mergers and Acquisitions Act.

• (10) There is no one of the matters specified in Article 30 of the Company Law.

• Information on the operation of the Remuneration Committee

The Remuneration Committee of the Company has 3 members in total.

The term of office of the current members: From June 15, 2019 to June 14, 2022, the Remuneration Committee has held two meetings in the most recent year (A). The qualifications and attendance of the members are as follows:

Title	Name	Name	Actual times of attendance (B)	Times of attendance by authorization	Times of attendance by authorization	Actual rate of attendance rate (B/A)	Actual rate of attendance rate (B/A)	Remarks
Convener	Li Junde		2				100.00
Members	Li Fan		2				100.00
Members	Liao Zhengpin		2				100.00
The meeting date, session, proposal content, resolution of the handling of the opinions of the Remuneration Committee:					Remuneration Committee		in 2020, and the Company’s
Meeting date and session		Proposal content and follow-up handling			Resolution		The Company’s handling of the opinions of the Remuneration Committee
3rd time of 4th session 2020.11.10		Deliberated on the remuneration structure and rewards in force of the Company and its subsidiaries in 2020.			Approved by all present members of the Committee		Submitted to report to the Board of Directors
2nd time of the 4th session 2020.12.22		Deliberated on the proposal of the Company and its subsidiaries to issue 2020 year-end bonus before the Chinese New Year in 2021.			Approved by all present members of the Committee		Submitted to and approved by all present directors of the Board of Directors
Other events to be recorded: I. If the Board of Directors does not adopt or amend the recommendations of the Remuneration Committee, the meeting date, session, proposal content, resolution of the Board of Directors, and the Company’s handling of the opinions of the Remuneration Committee should be stated (if the remuneration approved by the Board of Directors is better than the Remuneration Committee, the differences and reasons should be stated): None. II. Regarding the resolutions of the Remuneration Committee, if any members have objections or reservations which have records or written statements, the meeting date, session, proposal content of the Remuneration Committee, all members’ opinions and the handling of their opinions should be stated: None.

The meeting date, session, proposal content, resolution of the Remuneration Committee in 2020, and the Company’s handling of the opinions of the Remuneration Committee:

I. If the Board of Directors does not adopt or amend the recommendations of the Remuneration Committee, the meeting date, session, proposal content, resolution of the Board of Directors, and the Company’s handling of the opinions of the Remuneration Committee should be stated (if the remuneration approved by the Board of Directors is better than the Remuneration Committee, the differences and reasons should be stated): None.

II. Regarding the resolutions of the Remuneration Committee, if any members have objections or reservations which have records or written statements, the meeting date, session, proposal content of the Remuneration Committee, all members’ opinions and the handling of their opinions should be stated: None.

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(V) The performance of social responsibility, and the differences from the Code of Practice on Corporate Social Responsibility for Listed/OTC Companies and their

reasons

			reasons	reasons	reasons
Evaluation items			Operation			The differences from the Code of Practice on Corporate Social Responsibility for Listed/OTC Companies and their reasons
	Yes	No	Summary
I. Does the Company conduct risk assessments on environmental, social and corporate governance issues related to the operation of the Company in accordance with the materiality principle, and formulate relevant risk management policies or strategies?	V		The Company has conducted risk assessments on major issues in accordance with the materiality principle, and formulated relevant risk management policies or strategies as below: Major issues Risk assessment items Risk management policies or strategies Environment Environmental Protection The Company obtained the ISO14001 Environmental Management System certification in 2020. It is committed to environmental protection and acts up to green and clean production. In terms of production process, coal-fired boilers have been modified to natural gas boilers and dust collectors have been added to effectively reduce pollution emissions and impact on the environment, so as to reduce carbon dioxide emissions and perform the social responsibility of environmental protection. Plans for environmental protection projects are formulated every year, and regular tracking and review of various goals are conducted to ensure that the goals will be achieved. Society Occupational safety The Company obtained the ISO45001 Occupational Health and Safety Management System certification in 2020. For the protection measures of the working environment and personal safety of employees, please refer to the labor-management relations description in Chapter V. Operation Overview of this annual report.			No significant difference yet
			Major issues	Risk assessment items	Risk management policies or strategies
			Environment	Environmental Protection	The Company obtained the ISO14001 Environmental Management System certification in 2020. It is committed to environmental protection and acts up to green and clean production. In terms of production process, coal-fired boilers have been modified to natural gas boilers and dust collectors have been added to effectively reduce pollution emissions and impact on the environment, so as to reduce carbon dioxide emissions and perform the social responsibility of environmental protection. Plans for environmental protection projects are formulated every year, and regular tracking and review of various goals are conducted to ensure that the goals will be achieved.
			Society	Occupational safety	The Company obtained the ISO45001 Occupational Health and Safety Management System certification in 2020. For the protection measures of the working environment and personal safety of employees, please refer to the labor-management relations description in Chapter V. Operation Overview of this annual report.

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Evaluationitems				Operation	Operation	Operation	The differences from the Code of Practice on Corporate Social Responsibility for Listed/OTC Companies and their reasons
	Yes	No			Summary
				Product safety	The Company obtained the ISO9001 Quality Management System certification in 2020. All products comply with the various product and service laws and regulations of the government. It provides customers with stable product quality and improves customer satisfaction by strict quality system management. Customer satisfaction surveys are conducted on a regular basis every year to strengthen the cooperative relationship with customers.
			Corporate Governance	Socio-economic and legal compliance	By establishing a governance organization and implementing the internal control mechanism, the Company ensures that all personnel and operations of the Company actually comply with relevant laws and regulations.
II. Does the Company set up a full-time (part-time) unit to promote corporate social responsibility, with the Board of Directors authorizing the senior management to handle and report to the Board of Directors?	V		1. The Company has set up the General Manager’s Office as a full-time unit to promote corporate social responsibility since August 2016. The General Manager serves as the convener and has established a CSR Promotion Team jointly with the Sales Department, Comprehensive Management Department, and Finance Department to be responsible for CSR policies, systems, or related management policies and proposal and implementation of specific promotion plans. The meetings will be held at least once a quarter. 2. CSR Promotion Team works in accordance with the concept of plan-do-check action cycle (PDCA). At the end of the year, opinions from stakeholders will be collected to evaluate and review countermeasures, and project goals will be set together. The promotion will be carried out upon the convener in the first meeting of the following year. 3. The General Manager reports to the Board of Directors on a regular basis every year to review the effectiveness of operations and the issues of concern to stakeholders, and organizes written documents and submits them to the Board of Directors after a completeyear.				No significant difference yet

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Evaluation items		Operation	Operation	The differences from the Code of Practice on Corporate Social Responsibility for Listed/OTC Companies and their reasons
	Yes	No	Summary
III. Environmental issues
(I) Does the Company establish an appropriate environmental management system based on its industrial characteristics?	V		The Company always lays emphasis on environmental protection and energy conservation. In order to fulfill the environmental protection responsibility of the Company, it has installed pollution prevention equipment in accordance with the law, and passed the ISO14001 certification. It carries out environmental protection measures specifically for environmental management plans, pollution prevention, and waste reduction,lookingforward to make contributions toglobal environmentalprotection.	No significant difference yet
(II) Is the Company committed to improving the utilization efficiency of various resources and using recycled materials with low impact on the environment?	V		The Company mainly uses EVA foam materials regenerated and produced from EVA raw materials and recycled plastics. As the recycled plastics must be cleaned during the manufacturing process, the water of the cleaning system is recycled without discharging sewage. For the gas generated during the manufacturing process, the Company uses gas collecting equipment to centrally process the waste gas before discharging. The Company has obtained the pollution emission permit from the place of operation, and itsgas emissions are still in compliance with the regulations.	No significant difference yet
(III) Does the Company assess the potential risks and opportunities brought about by climate change on the Company now and in the future, and take measures to respond to climate-related issues?	V		Although the Company has not formulated the energy conservation & carbon reduction and greenhouse gas reduction strategies, its unique reproduction process of recycled plastic not only reduces the company’s material purchase cost, alleviates the shortage of plastic raw materials, but also reduces the pollution of waste plastics to the environment, so as to fulfill the responsibility of environmental protection.	No significant difference yet
(IV) Does the Company calculate the greenhouse gas emissions, water consumption, and total waste weight in the past two years, and formulate policies on energy conservation and carbon reduction, greenhouse gas reduction, water saving, or other waste management?		V	Although the Company has not formulated the energy conservation & carbon reduction and greenhouse gas reduction strategies, its unique reproduction process of recycled plastic not only reduces the company’s material purchase cost, but also alleviates the shortage of plastic raw materials. As the recycled plastics must be cleaned during the manufacturing process, the water of the cleaning system is recycled without discharging sewage. Besides, the coal-fired boilers of the Company have been modified to natural gas boilers. For the gas generated during the manufacturing process, the Company uses gas collecting equipment to centrally process the waste gas before discharging. The Company has obtained the pollution emission permit from the place of operation, and its gas emissions are still in compliance with the regulations. It also reduces the pollution of wasteplastic materials to the environment, in order to fulfill the	No significant difference yet

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Evaluation items			Operation	The differences from the Code of Practice on Corporate Social Responsibility for Listed/OTC Companies and their reasons
	Yes	No	Summary
			responsibility of environmental protection.
IV. Social issues
(I) Does the Company establish relevant management policies and procedures in accordance with relevant laws and international covenants on human rights?	V		The Company complies with relevant laws and regulations to ensure the principle of labor rights and protect the legitimate rights and interests of employees.	No significant difference yet
(II) Does the Company formulate and implement reasonable measures for employee welfare (including salary, vacation and other benefits), and appropriately reflect operating performance or results in employee’s salary?	V		The Company has formulated and implemented reasonable measures for employee welfare, and appropriately reflected operating performance or results in employee’s salary. Please refer to the labor-management relations description in Chapter V. Operation Overview and dividend policy in Chapter IV. Fundraising and their implementation in this annual report.	No significant difference yet
(III) Does the Company provide employees with a safe and healthy working environment, and carry out regular safety and health training for employees?	V		Please refer to the labor-management relations description in Chapter V. Operation Overview of this annual report.	No significant difference yet
(IV) Does the Company establish an effective training plan of career ability development for employees?	V		The Company provides relevant internal and external education and training courses for employees to choose, so as to enrich their career skills.	No significant difference yet
(V) With regard to customer’s health and safety, customer privacy, marketing and signs related to products and services, does the Company comply with relevant laws and regulations and international standards, and formulate relevantpolicies on consumer rights	V		The Company has passed ISO14001, ISO9001 and China Compulsory Certification, and also pays attention to the marketing signs of products and services. The Company has set up a customer service hotline, and arranged relevant personnel responsible for handling customer issues, in order to protect the rights and interests of customers.	No significant difference yet

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Evaluation items	Operation	Operation	Operation	The differences from the Code of Practice on Corporate Social Responsibility for Listed/OTC Companies and their reasons
	Yes	No	Summary
protection and appeal procedures?
(VI) Does the Company establish supplier management policies that require suppliers to comply with relevant regulations on issues such as environmental protection, occupational safety and health, or labor human rights, and if so, how are the policies implemented?		V	Although the Company has not established supplier management policies that clearly require suppliers to comply with relevant regulations such as environmental protection, occupational safety and health, or labor human rights, at present, it assesses suppliers regularly every year. In the future, it will assess and inspect whether the suppliers have records of environmental and social impacts, and sign with the major suppliers the clauses that include the termination or cancellation of the contract at any time if the violations of their corporate social responsibility policies are involved and there is a significant impact on the environment and society (as the case maybe).	No significant difference yet
V. Does the Company prepare corporate social responsibility reports and other reports that expose the non-financial information of the Company with reference to internationally accepted reporting standards or guidelines? Have the confirming or assuring opinions of a third-party verification institute been obtained for the previously disclosed reports?		V	The Company has not yet prepared a corporate social responsibility report, but it has fulfilled its corporate social responsibility through relevant management policies and methods in the aspects of environmental protection, society and corporate governance. In addition, the Company has passed ISO14001 (Environmental Management System Certification, registration number: 20E1845R1M-ZJ/008, issued on 2020/3/10, valid until 2023/1/8), ISO9001 (Quality Management System Certification, registration number: 07620Q3710R1M-ZJ/008, issued on 2020/3/10, valid until 2023/1/8), ISO45001 (Occupational Health and Safety Management System Certification, registration number: 20S1588R1M-ZJ/008, issued on 2020/3/10, valid until 2023/8/15) and its EVA plastic toy floor mats have passed China Compulsory Certification (3C Certification)and other certifications.	No significant difference yet
VI. If the Company has formulated its own corporate social responsibility code based on the Code of Practice on Corporate Social Responsibility for Listed/OTC Companies, the differences between its operation and the established code should be stated: No significant differenceyet.
VII. Other important information that helps to understand the operation of corporate social responsibility: The Company and its subsidiaries are enthusiastic about participating in community activities, as well as communicating to and encouraging employees to participate in order to enhance the harmonious relationship between communities. In addition,in the event of social emergencies,the Companydonatesgenerouslyand encourages employees to takepart in the donation in order togive back to society.

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(VI) The performance of integrity management, and the differences from the Code of Integrity Management for Listed/OTC Companies and their reasons

Evaluation items	Operation	Operation	Operation	The differences from the Code of Integrity Management for Listed/OTC Companies and their reasons
	Yes	No	Summary
I. Formulate integrity management policies and plans
(I) Does the Company formulate integrity management policies approved by the Board of Directors, and clearly explain the integrity management policies and practices in regulations and external documents, as well as the commitment of the Board of Directors and senior management to actively implement such policies?	V		The Company has formulated the Code of Integrity Management which was revised on March 13, 2020 at the 5th meeting of the 5th Board of Directors, and submitted it to the 2020 Shareholders Meeting. The code has also been uploaded to the public information observatory and the company website, making clear the integrity management policies and practices, and the commitment of the Board of Directors and senior management to actively implement such policies.	No significant difference yet.
(II) Does the Company establish a risk assessment mechanism for dishonest conducts, regularly analyze and evaluate business activities with a higher risk of dishonest conducts within the business scope, and formulate plans to prevent dishonest conducts based on the analysis and evaluation, which at least cover the precautionary measures for each of the actions in Article 7.2 of the Code of Integrity Management for Listed/OTC Companies?	V		The Company has considered evaluating the risk of dishonest conducts, and clearly prepared the plans to prevent dishonest conducts and its scope based on Article 7 of the Code of Integrity Management.	No significant difference yet.
(III) Does the Company clearly define operating procedures, behavior guidelines, punishment of violation and appeal system in the plan to prevent dishonest conducts, and implement them, and regularly review and revise the plans previously disclosed?	V		The Company has clearly stipulated the preventions plan and the handling procedures Prohibition of Dishonest Conducts and the Targets, Prohibition of Accepting Bribery in All Forms, Prohibition of Bribery in Disguised Form and Prohibition of Providing or Accepting Unreasonable Gifts, Entertainment or Other Improper Interests in the Code of Integrity Management, and formulated the Handling Methods for Reporting Cases of Illegal, Unethical or Dishonest Conducts of the Company as a behavior guideline, punishment of violation and complaint system. The Company has implemented them, and regularly reviewed and revised the plans previously disclosed. In order to create a solid integrity management concept, the Company has incorporated the integrity management policies into the Performance Evaluation Management Measures to combine it with employee performance appraisal for establishing a clear and effective reward and punishment	No significant difference yet.

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Evaluation items	Operation	Operation	Operation	The differences from the Code of Integrity Management for Listed/OTC Companies and their reasons
	Yes	No	Summary
			system.
II. Implement the integrity management
(I) Does the Company assess the integrity records of its counterparties and specify the integrity behavior provisions in the contracts signed with its counterparties?	V		In view of the Company’s plans to prevent dishonest conducts and its scope, the commercial relations with suppliers, customers and business counterparties involved dishonest conducts shall be terminated. It has incorporated integrity management into contract terms or specified the provisions on integrity.	No significant difference yet.
(II) Does the Company set up a dedicated unit under the Board of Directors to promote corporate integrity management, and regularly (at least once a year) report to the Board of Directors of its integrity management policies, plans for preventing dishonest conducts, and supervision and implementation?	V		1. The Company has set up the General Manager’s as a full-time unit to promote integrity management since August 2016. The General Manager serves as the convener and established an Integrity Management Promotion Group jointly with the Sales Department, Comprehensive Management Department, Finance Department, and Purchase Department to assist the Board of Directors and management in formulating and supervising the implementation of integrity management policies and prevention plans according to the responsibilities and scope of each department, so as to ensure the implementation of the Code of Integrity Management. The General Manager is responsible for reporting the implementation to the Board of Directors at least once a year. 2. In order to prevent conflicts of interest policies and provide appropriate channels for statement, the Company revised the Code of Integrity Management in 2020. 3. The Company implements the integrity management policies as appropriate, and the specific implementation in 2020 is as follows: A. Education and training In order to implement the regulations of integrity management, the Company invited teachers from the juridical association	No significant difference yet.

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Evaluation items	Operation	Operation	Operation	The differences from the Code of Integrity Management for Listed/OTC Companies and their reasons
	Yes	No	Summary
			Taiwan Corporate Governance Association for directors to hold director training courses named Law Compliance and Supervision Obligations of Directors of the Company and Significant Information Disclosure and Responsibilities of Directors and Supervisors of the Company in 2020, with the number of participants as 7 and the training hours as 42 hours. B. Publicity of law compliance The Integrity Management Promotion Group promotes advocacy and education. In 2020, with the theme of Implementing Integrity Management, it publicized the matters that should be paid attention to during the business process through videos. The number of participants was 362, with a total of 724 man-hours. C. Whistleblowing mechanism and whistleblower protection 4. The Company has prepared the Handling Methods for Reporting Cases of Illegal, Unethical or Dishonest Conducts of the Company and established a whistleblower protection mechanism in which the identity and content of the whistleblower are truly confidential. Internal and external whistleblowing channels and handling systems of the Company have been established and announced on the company website. In 2020, no internal or external whistleblowing was received.
(III) Does the Company formulate policies to prevent conflicts of interest, provide appropriate channels for presentation, and implement them?	V		The Company’s Code of Integrity Management and Rules of Procedures for Board of Directors of the Company clearly require that if any interested persons or their representative may be harmful to the interests of the Company, they may state their opinions and answer inquiries, but are not allowed to participate in discussions and voting. They should be absent during discussion and voting, and may not act for other directors to exercise their voting rights.	No significant difference yet.
(IV) Does the Company establish an effective accounting system and internal control system for the implementation of integrity management, and does the internal audit unit draw up relevant audit plans based on the assessment	V		The Company’s accounting system refers to the Securities Exchanges Act, Company Law, Commercial Accounting Law, international financial reporting standards approved by the Financial Regulatory Commission, International Accounting Standards, Interpretations,	No significant difference yet.

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Evaluation items	Operation	Operation	Operation	The differences from the Code of Integrity Management for Listed/OTC Companies and their reasons
	Yes	No	Summary
results of dishonest conduct risks, and verify the compliance of the plan for preventing dishonest conducts based on the assessment, or entrust an accountant to perform the verification?			Notices on Interpretations and other relevant laws and regulations, and the internal control system refers to the Processing Guidelines for Establishing the Internal Control System of Public Offering Companies, which are all implemented. The Company’s Code of Integrity Management clearly prohibits external accounts or secret accounts, etc.; in addition to regular review of the compliance of the systems mentioned above and preparation and submission of audit reports by internal auditors to the Board of Directors, the quarterly financial statements are also entrusted to an accountant for verification (or review) before presentation.
(V) Does the Company regularly organize internal and external education and training on integrity management?	V		In addition to formulating the Code of Integrity Management, the company also regularly organizes internal trainings on integrity management every year, and advocates it at various meetings from time to time, so that employees can clearly understand the integrity management philosophy and norms of the Company.	No significant difference yet.
III. Operation of whistleblowing system of the Company
(I) Does the Company establish a specific whistleblowing and reward system, set up convenient reporting channels, and assign appropriate personnel for acceptance according to the reported objects?	V		The Company has prepared the Handling Methods for Reporting Cases of Illegal, Unethical or Dishonest Conducts of the Company, and internal and external whistleblowing channels and handling systems of the Company have been established and announced on the company website.	No significant difference yet.
(II) Does the Company establish standard operating procedures for the investigation of the reported matters, follow-up measures to be taken after the investigation is completed, and related confidentiality mechanisms?	V		The Company has prepared the Handling Methods for Reporting Cases of Illegal, Unethical or Dishonest Conducts of the Company, and internal and external whistleblowing channels and handling systems of the Company have been established and announced on the company website.	No significant difference yet.
(III) Does the company take measures to protect the whistleblower from being improperly treated due to the whistleblowing?	V		The Company has specified the Handling Methods for Reporting Cases of Illegal, Unethical or Dishonest Conducts of the Company to assume the responsibility of confidentiality to the whistleblower, and protect the whistleblower from being improperly treated due to the	No significant difference yet.

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Evaluation items	Operation	Operation	Operation	The differences from the Code of Integrity Management for Listed/OTC Companies and their reasons
	Yes	No	Summary
			whistleblowing.
IV. Strengthen information disclosure Does the Company disclose the content and promotion effects of its Code of Integrity Management on its website and public information observatory?	V		The Company has disclosed the contents of the Code of Integrity Management on the company website and has set up an external mailbox, so the information disclosure and reporting channels are smooth.	No significant difference yet.
V. If the Company has formulated its own code of integrity management based on the Code of Integrity Management for Listed/OTC Companies, the differences between its operation and the established code should be stated: There are no major differences between the situation of the Company and the Code of Integrity Management for Listed/OTC Companies. Please refer to the above columns for details.
VI. Other important information that helps to understand the operation of integrity management: (For example, the situation where the Company reviewed and revised its code of integrity management, etc.) The Company always pays attention to the development of relevant standards for integrity management at home and abroad, and encourages directors, managers and employees to make suggestions for reviewing and improving the code of integrity management formulated by the Company, so as to enhance the effectiveness of the Company’s integrity management. The Company also requires all colleagues of the Company to implement integrity management in accordance with local laws and regulations when performing business. In accordance with the working rules, labor agreements, labor contracts or relevant internal regulations between the Company and employees, the Company requires all colleagues to respect the business secrets of customers and others, and be obliged to protect the Company’s property from loss, damage, improper use and reading, and theft, and abide by all regulations and systems related to the management and use of company property. Besides, since the Company’s preparations for listing, the Board of Directors and management have carried out education courses related to above laws and regulations for listed companies and corporate governance, so that the Board of Directors and management can deepen the understanding of securities transaction-related laws and regulations and effectively comply with the laws and regulations. So far, it is well-implemented.

• (VII) If the Company has formulated the corporate governance code and related regulations, and the inquiry methods: The Company has formulated corporate governance code and related regulations. The inquiry methods are as follows:

Please refer to the Company’s website: http://www.asia-recycle.com/governance/rules/ (corporate governance/important company regulations)

or refer to the public information observatory: mops.twse.com.tw (corporate governance)

(VIII) Other important information that is sufficient to enhance the understanding of corporate governance and operation conditions can be disclosed together:

Please refer to the Company’s website: http://www.asia-recycle.com/governance/organized/index.html (corporate governance)

or refer to the public information observatory: mops.twse.com.tw (corporate governance)

• 49 -

• (IX) The implementation of the internal control system

• Statement of internal control system

Asia Plastic Recycling Holding Ltd. Statement of Internal Control System

Date: March 22, 2021

Based on the results of self-assessment, the statement of the Company’s internal control system for 2020 is as follows:

I. The Company confirms that the establishment, implementation and maintenance of the internal control system is the responsibility of the Board of Directors and managers of the Company, and the Company has established this system. It aims to achieve the objectives of operation effectiveness and efficiency (including profitability, performance and asset security, etc.), reporting reliability, timeliness, transparency, and conformance to relevant standards and compliance with relevant laws and regulations, and provide a reasonable guarantee.

II. There are inherent limitations in the internal control system. No matter how perfect the design is, an effective internal control system can only provide a reasonable guarantee for achieving the above three objectives; moreover, due to changes in the environment and circumstances, the effectiveness of the internal control system may change accordingly. However, the internal control system of the Company has set up a self-monitoring mechanism. Once the defect is identified, the Company will take corrective actions.

III. The Company judges whether the design and implementation of the internal control system are effective in accordance with the judgment items for the effectiveness of the internal control system stipulated in the Processing Guidelines for Establishing the Internal Control System of Public Offering Companies (hereinafter referred to as the “Processing Guidelines”). The judgment items of the internal control system adopted in the “Processing Guidelines” are based on the process of management control, which divides the internal control system into five components: 1. Control environment, 2. risk assessment, 3. control operations, 4. information and communication, and 5. supervision operations. Each component consists of several items. Please refer to the “Processing Guidelines” for the detailed items mentioned above.

IV. The Company has adopted the above judgment items of internal control system to evaluate the effectiveness of the design and implementation of the internal control system.

V. Based on the evaluation results mentioned in the preceding paragraph, the Company believes that the internal control system of the Company as of December 31, 2020 (including the supervision and management of subsidiaries), including that the effectiveness of operations and the extent to which the efficiency objectives are achieved have been understood, and the reporting is reliable, the design and implementation of the internal control system related to timeliness, transparency, and conformance to relevant standards and compliance with relevant laws and regulations are effective, which can reasonably ensure the achievement of the above objectives

VI. This statement will be the main content of the annual report and prospectus of the Company, and will be made public. If there are false or concealed contents in the above disclosure, legal liabilities under Article 20, Article 32, Article 171, and Article 174 of the Securities Exchanges Act will be involved.

VII. This statement was approved by the Board of Directors of the Company on March 22, 2021. Among the 7 directors present, none of them had objections, and all agreed to the content of this statement and made this statement.

• 50 -

==> picture [82 x 80] intentionally omitted <==

Asia Plastic Recycling Holding Ltd.

==> picture [45 x 49] intentionally omitted <==

Chairman: Ding Jinzao General Manager: Ding Zhimeng

Signature and seal Signature and seal

• 51 -

• If an accountant is entrusted to review the internal control system, the review report of the accountant: None.

  • (X) In the most recent year and as of the printing date of the annual report, the punishments on the Company and its internal personnel in accordance with the law, the penalties of the Company for the violation of the internal control system regulations by the internal personnel, main deficiencies and improvements: None.

  • (XI) Important resolutions of the shareholders meeting and the Board of Directors in the most recent year and as of the printing date of the annual report

• The content and implementation of important resolutions of the shareholders meeting

Date

Important resolutions

2020.6.15

1. Recognized 2019 annual business report and consolidated financial statements of the Company 2. Recognized the 2019 profit and loss appropriation proposal of the Company 3. Approved the revision of the Articles of Association of the Company Implementation: It has been announced in the important company regulations for corporate governance on the company website. 4. Approved the revision of Rules of Procedures for Shareholders’ Meetings of the Company Implementation: It has been announced in the important company regulations for corporate governance on the company website and the revised rules are carried out. 5. Approved the revision of the Election Measures of Directors and Supervisors of the Company. Implementation: It has been announced in the important company regulations for corporate governance on the company website and the revised rules are carried out.

1. Important resolutions of the Board of Directors

Date

Important resolutions

2020.03.13

1. Approved 2019 business report and consolidated financial report of the Company 2. Approved the assessment of the independence of the certified public accountants of the Company 3. Approved the assessment of the effectiveness of the internal control system of the Company and its subsidiaries Sansda (Fujian) Plastic Co., Ltd., Sansda (Jiangsu) Environmental Technology Co., Ltd., and Sansda (Hong Kong) Trading Co., Ltd. and issued a statement on internal control system. 4. Approved the revision of the Operating Procedures of Financial Statement Preparation Process of the Company 5. Approved the revision of the Rules of Procedures for Shareholders’ Meeting of the Company 6. Approved the revision of the Code of Practice on Corporate Governance, Code of Practice on Corporate Social Responsibility and Code of Integrity Management of the Company 7. Approved the revision of the Organizational Rules for the Audit Committee and Organizational Rules of the Remuneration Committee of the Company 8. Approved the revision of the Rules of Procedures for Board of Directors of the Company 9. Approved the revision of the Election Measures of Directors and Supervisors of the

• 52 -

Date	Important resolutions
	Company 10. Approved the proposal to convene the 2020 shareholders meeting of the Company
2020.05.04	1. Approved the 2019 profit and loss appropriation proposal of the Company 2. Approved the draft revision of the Articles of Association of the Company
2020.07.01	1. Approved the director re-election proposal of the subsidiary Sansda (Fujian) Plastic Co., Ltd. 2. Approved the removal of the Board of Directors and re-election of supervisors of the subsidiary Sansda (Jiangsu) Environmental Protection Technology Co., Ltd 3. Approved the establishment of the Board of Directors and addition of directors of the subsidiary Sansda Hong Kong
2020.08.07	No proposal
2020.11.10	1. Approved the remuneration structure and rewards in force of the Company and its subsidiaries in 2019 2. Approved the proposal of the Company and its subsidiaries to issue 2019 year-end bonus before the Chinese New Year in 2020 3. Approved the remuneration structure and rewards in force of the Company and its subsidiaries in 2020 4. Approved the proposal of fund loan of the subsidiary Sansda (Fujian) Plastic Co., Ltd. 5. Approved the revision of the Rules of Procedures for Shareholders’ Meeting of the Company 6. Approved the revision of the Election Measures of Directors and Supervisors of the Company 7. Approved the revision of the Rules for the Independent Directors’ Scope of Responsibilities of the Company 8. Approved the revision of the Organizational Rules of the Audit Committee of the Company 9. Approved the revision of the Rules of Procedures for Board of Directors of the Company 10. Approved the revision of the Organizational Rules of the Remuneration Committee of the Company 11. Approved the revision of the Measures for Self-evaluation or Peer Evaluation of the Board of Directors of the Company
2020.12.22	1. Approved the proposed 2021 audit plan of the Company, its subsidiaries Sansda (Fujian) Company, Sansda (Jiangsu) and Sansda (Hong Kong) Trading Co., Ltd. 2. Approved the 2021 budget plan of the Company 3. Approved the proposal of the Company and its subsidiaries to issue 2020 year-end bonus before the Chinese New Year in 2021 4. Approved the offsetting of the interests receivable and payable between the Sansda (Hong Kong) Trading Co., Ltd.) and Sansda (Jiangsu) Environmental Technology Co., Ltd., and adjustment of the borrowing interest rate
2021.03.22	1. Approved the 2020 asset impairment proposals of the subsidiary Sansda (Fujian) Plastic Co., Ltd., and the subsidiary Sansda (Jiangsu) Environmental Technology Co., Ltd.

• 53 -

Date	Important resolutions
	2. Approved 2020 business report and consolidated financial report of the Company 3. Approved 2020 annual loss recovery statement of the Company 4. Approved the Company’s plans to replace the certified accounting firm and certified public accountants from the first quarter of 2021 5. Approved the assessment of the effectiveness of the internal control system of the Company and its subsidiaries Sansda (Fujian) Plastic Co., Ltd., Sansda (Jiangsu) Environmental Technology Co., Ltd., and Sansda (Hong Kong) Trading Co., Ltd. and issued a statement on internal control system. 6. Approved the revision of the Rules of Procedures for Shareholders’ Meeting of the Company 7. Approved the proposal to convene the 2021 shareholders meeting of the Company
2021.05.12	1. Approved the proposal of setting a corporate governance head

• (XII) In the most recent year and as of the printing date of the annual report, if the directors or supervisors have different opinions on important resolutions approved by the Board of Directors and there are records or written statements, the main contents: None.

• (XIII) In the most recent year and as of the printing date of the annual report, summary of the resignation and dismissal of persons related to the financial report: None.

IV. Information about accountants’ fees

Accountant’s Fee Information Interval Table

A	ccountant’s Fee Information Interv	ccountant’s Fee Information Interv	al Table
Name of the Accounting Firm	Name of Certified Public Accountant		Audit Period	Remarks
Deloitte & Touche	Wu Qiuyan	Jiang Jialing	From January 1, 2020 to December 31,2020

Unit: *10[3] in New Taiwan Currency

			Unit: *103in	New Taiwan Currency
Fee Item Amount Interval		Audit Fee	Non-audit Fee	Total
1	Below NT$ 2,000,000		
2	NT$2,000,000(included)~ NT$4,000,000			
3	NT$ 4,000,000(included)~ NT$ 6,000,000
4	NT$6,000,000(included)~ NT$8,000,000
5	NT$ 8,000,000(included)~ NT$ 10,000,000
6	Over NT$10,000,000(included)

• 54 -

Unit: *10[3] in New Taiwan Currency

Name of the Accounting Firm	Name of Certified Public Accountant	Audit Fee	Non-audit Fee	Non-audit Fee	Non-audit Fee	Non-audit Fee		Audit Period of Accountant	Remarks
			System design	Industrial and commercial registration	Human Resource	Other [note]	Subtotal
Deloitte & Touche	Wu Qiuyan	3,190				60	60	2020.01.01~ 2020.12.31	Others include declaration checklists and annual reports for reviewing quarterly financial reports and announcements.
	Jiang Jialing

(II) The audit fee paid for the change of the accounting firm and the year of the change is less than the audit fees of the previous year, and the amount, proportion and reasons for the reduction of the audit fee: None.

(III) The audit fee which has been reduced by more than 10% compared with the previous year: None.

• 55 -

• V. Information about replacement of accountants:

• (I) About the former accountants

Date of change	Q1 in 2021	Q1 in 2021	Q1 in 2021	Q1 in 2021	Q1 in 2021
Reason for change and explanation	In response to the needs of the internal management and related business of the Company, after evaluating the cost-effectiveness, it was resolved that the Company’s certified public accountants were changed from Accountant Wu Qiuyan and Accountant Jiang Jialing of Deloitte & Touche to Accountant Lin Zhaomin and Accountant Chen Wenbin of Candor Taiwan CPAs.
It is explained that the person appointed or certified public accountant terminated or did not accept the appointment	Interested parties Condition			Certified Public Accountant	Person appointed
	Voluntarily terminated the appointment				Asia Plastic Recycling Holding Ltd.
	No longer accepted (continued) the appointment
Opinions and reasons for the inspection report other than unqualified opinions issued within the latest two years		None
Whether there is any disagreement with the issuer	Yes		Accounting principles or practices
			Financial report disclosure
			Inspection scope or procedure
			Others
	None	
	Description: N/A
Other disclosures (Those should be disclosed based on Item 1 (4) to Item 1 (7) of Article 10.6)	None

• 56 -

(II) About the successor accountants

(II) About the successor accountants
Name of firm	Candor Taiwan CPAs
Name of Certified Public Accountant	Accountant Lin Zhaomin and Accountant Chen Wenbin
Date of appointment	March 25, 2021
Consultation matters and results of the accounting treatment methods or accounting principles of specific transactions and the possibly issued opinions of financial reports before appointment	None
Written opinions of the successor accountants on the matters with different opinions of the former accountants	None

(III) The reply of former accountants to Item 1 and Item 2.3 of Article 10.6 in this Standard: None.

• VI. Any of the Company’s Chairman, General Manager, or Managers in charge of finance or accounting held a position in the CPA’s firm or its affiliates in the most recent year: None.

• VII. Changes in shareholding and shares pledged by directors, supervisors, managers and shareholders with 10% shareholding or more in the most recent year and as of the date of printing of the annual report

• (1) Equity changes of directors, supervisors, managers and major shareholders

Unit: shares

Title	Name	2020	2020	As	of April 18, 2021
		Increase (decrease) in the number of shares held	Increase (decrease) in the number of sharespledged	Increase (decrease) in the number of shares held	Increase (decrease) in the number of sharespledged
Chairman	Ding Jinzao	－	－	－	－
Director Shareholders with over 10% of shares	Ding Holding Limited (Representative: DingZhimeng)	－	－	－	－
Director	Zhang Huiqun	－	－	－	－
Director	Zhang Duozhong	－	－	－	－
Independent director	Li Junde	－	－	－	－
Independent director	Li Fan	－	－	－	－
Independent director	Liao Zhengpin	－	－	－	－
Deputy General Manager	Ding Huaxiong	－	－	－	－
Deputy General Manager	Ding Zhiwei	－	－	－	－

• (2) Equity transfer information: None.

• (3) Equity pledge information: None.

• 57 -

VIII. Information about relationship between the top 10 shareholders (related party as defined in the Statement of Financial Accounting Standards No. 6, or spouse or relative with the second degree of kinship)

April 18, 2021; Unit: shares

Name	Shares held by the shareholder	Shares held by the shareholder	Shares held by its spouse and minor child	Shares held by its spouse and minor child	Total shares held in the names of others	Total shares held in the names of others	Names and relations of shareholders’ related parties or spouses and the second-degree relatives according to the No.6 of Statements of Financial AccountingStandards	Names and relations of shareholders’ related parties or spouses and the second-degree relatives according to the No.6 of Statements of Financial AccountingStandards	Remarks
	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Name	Relationship
Ding Holding Limited	38,888,293	14.46%	－	－	－	－	Ding Jinzao	Note	－
Ding Jinzao	15,993,089	5.95%	－	－	－	－	Ding Holding Limited	Note	－
Xu Hangjian	2,283,930	0.85%	－	－	－	－	－	－	－
Guo Tingqun	1,929,982	0.72%	－	－	－	－	－	－	－
Total fund investment account under the custody of Business Department of Standard Chartered Taiwan by entrustment	1,688,364	0.63%	－	－	－	－	－	－	－
Lin Gaomu	1,500,000	0.56%	－	－	－	－	－	－	－
Xu Shijie	1,480,000	0.55%	－	－	－	－	－	－	－
Zeng Mingxiu	1,446,520	0.54%	－	－	－	－	－	－	－
Huang Chunmei	1,380,002	0.51%	－	－	－	－	－	－	－
Hong Ruixia	1,377,242	0.51%	－	－	－	－	－	－	－
Total	67,967,422	25.28%	－	－	－	－	－	－	－

Note: Ding Jinzao is a shareholder of Ding Holding Limited.

• 58 -

IX. Number of shares held by the Company, the Company’s directors, supervisors, managers and directly or indirectly controlled entities on the same investee, and comprehensive shareholding percentage calculated in a consolidated manner:

Re-investment enterprise	Investment of the Company	Investment of the Company	The investment of directors, supervisors, managers, and businesses directly or indirectly controlled by the Company	The investment of directors, supervisors, managers, and businesses directly or indirectly controlled by the Company	Comprehensive investment	Comprehensive investment
	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio
Sansda Holding Limited	1	100%	-	-	1	100%
Sansda Hong Kong	1	100%	-	-	1	100%
Sansda (Fujian) Plastic Co., Ltd.	Note	100%	-	-	Note	100%
Sansda (Jiangsu) Environmental Protection Technology Co., Ltd	Note	100%	-	-	Note	100%
Sansda Hong Kong Trading Co., Ltd.	1	100%	-	-	1	100%

Note: The subsidiaries in China’s Mainland are limited companies and have no shares.

• 59 -

IV. Capital overview

I. Capital and shares

(I) Source of share capital

1. The formation of share capital

April 18, 2021

						April 18,2021	April 18,2021	April 18,2021
Date	Issue price	Approved share capital		Paid-in share capital		Remarks
		Number of shares (1,000 shares)	Amount (NT$ 1,000)	Number of shares (1,000 shares)	Amount (NT$ 1,000)	Source of share capital	Properties other than cash are used to offset the shareprice	Others
January2010	US$1	50	US$50	－	－	－	－	－
March 2010	US$1	50	US$50	－	－	－	－	－
March 2010	NTD$10	360,000	NTD$3,600,000	120,000	NTD$1,200,000	Note	Note	－
October 2010	NTD $78	360,000	NTD$3,600,000	120,840	NTD$1,208,400	Cash capital increase	－	－
April 2011	NTD $84	360,000	NTD$3,600,000	123,600	NTD$1,236,000	Cash capital increase	－	－
August 2011	NTD $95	360,000	NTD$3,600,000	138,080	NTD$1,380,800	Cash capital increase	－	－
July 2012	NTD $10	360,000	NTD$3,600,000	158,792	NTD$1,587,920	Surplus to increase capital	－	－
October 2012	NTD $83	360,000	NTD$3,600,000	175,292	NTD$1,752,920	Cash capital increase	－	－
July 2013	NTD $10	360,000	NTD$3,600,000	199,833	NTD$1,998,329	Surplus to increase capital	－	－
July 2014	NTD $10	360,000	NTD$3,600,000	250,175	NTD$2,501,751	Surplus to increase capital	－	－
August 2014	NTD $10	360,000	NTD$3,600,000	249,829	NTD$2,498,291	Cancellation of treasurystock	－	－
August 2015	NTD $10	360,000	NTD$3,600,000	259,588	NTD$2,595,884	Surplus to increase capital	－	－
November 2016	NTD $10	360,000	NTD$3,600,000	265,368	NTD$2,653,681	Surplus to increase capital	－	－
September, 2017	NTD $10	360,000	NTD$3,600,000	267,776	NTD$2,677,761	Surplus to increase capital	－	－
September 2018	NTD $10	360,000	NTD$3,600,000	268,955	NTD$2,689,547	Surplus to increase capital	－	－

Note: In order to apply for the first listing in Taiwan, the Company agreed to exchange equity with the

holding company which wholly owns Sansda (Fujian) Plastics Co., Ltd., and indirectly obtained 100% ownership of Sansda (Fujian) Plastics Co., Ltd. (equivalent to using 1 common shares of the company to exchange for HKD 0.675 of the capital of Sansda (Fujian) Plastics Co., Ltd.).

2. Types of issued shares

	April 18,2021;Unit: shares	April 18,2021;Unit: shares	April 18,2021;Unit: shares	April 18,2021;Unit: shares
Class of shares	Approved share capital			Remarks
	Outstandingshares	Non-issued shares	Total
Registered common shares	268,954,729	91,045,271	360,000,000	Shares of listed companies

1. Summary of information related to the declaration system: Inapplicable.

2. 60 -

(II) Shareholder structure

I) Shareholder	structure
					April 18,2021;Unit: shares
Shareholder structure	Government agencies	Financial institutions	Other legal entities	Individual	Foreign institutions and legal entities	Total
Number of people	－	1	129	35,113	36	35,279
Number of shares held	－	352,000	2,782,691	203,270,436	62,549,602	268,954,729
Shareholding ratio	－	0.13%	1.03%	75.59%	23.25%	100.00%

Note: The holding ratio of China’s Mainland capital is 0%.

(III) The situation of equity dispersion

	The denominationper share is NT$10;Apr	The denominationper share is NT$10;Apr	il 18,2021;Unit: shares
Classification of shareholding	Number of shareholders	Number of shares held	Shareholding ratio (%)
1 to 999	18,018	1,356,388	0.50
1,000 to 5,000	10,853	23,892,865	8.88
5,001 to 10,000	2,777	20,296,153	7.55
10,001 to 15,000	1,113	13,470,189	5.01
15,001 to 20,000	644	11,555,192	4.30
20,001 to 30,000	665	16,281,613	6.05
30,001 to 40,000	309	10,728,016	3.99
40,001 to 50,000	206	9,382,675	3.49
50,001 to 100,000	396	28,022,023	10.42
100,001 to 200,000	188	25,322,363	9.42
200,001 to 400,000	69	18,755,209	6.97
400,001 to 600,000	15	7,510,288	2.79
600,001 to 800,000	7	4,807,234	1.79
800,001 to 1,000,000	3	2,640,404	0.98
Above 1,000,001	16	74,934,117	27.86
Total	35,279	268,954,729	100.00

• 61 -

• (IV) List of major shareholders: List the name, number of shares held and shareholding ratio of the shareholders with the ratio over 5% or the top ten shareholders

	April	18,2021;Unit: shares
Share Name of major shareholders	Number of shares held	Shareholding ratio
Ding Holding Limited	38,888,293	14.46%
Ding Jinzao	15,993,089	5.95%
Xu Hangjian	2,283,930	0.85%
Guo Tingqun	1,929,982	0.72%
Total fund investment account under the custody of Business Department of Standard Chartered Taiwan by entrustment	1,688,364	0.63%
Lin Gaomu	1,500,000	0.56%
Xu Shijie	1,480,000	0.55%
Zeng Mingxiu	1,446,520	0.54%
Huang Chunmei	1,380,002	0.51%
Hong Ruixia	1,377,242	0.51%

• 62 -

(V) Information on market price, net worth, earnings and dividends of each share

Unit: *10[3] in New Taiwan Currency; 10[3 ] shares

Year Item	Year Item	Year Item	Year Item	2019	2020	March 31, 2021 (Note 4)
Market price per share	The highest			8.50	11.75	9.48
	The lowest			5.50	3.29	8.62
	Average			6.45	6.00	8.70
Net worth per share	Before distribution			26.01	21.55	20.97
	After distribution			26.01	21.55	20.97
Earnings per share	Weighted average number of shares		Before adjustment	268,861	268,861	268,861
			After adjustment	268,861	268,861	268,861
	Earnings per share		Before adjustment	(2.39)	(4.88)	(0.39)
			After adjustment	(2.39)	(4.88)	(0.39)
Dividends per share	Cash dividends			-	-	-
	Stock grant	Stock dividend from retained earnings		-	-	-
		Allotment by capital reserves		-	-	-
	Accumulated unpaid dividends			-	-	-
Return on investment analysis	Price-to-earnings ratio（Note 1）			(2.70)	(1.23)	(11.50)
	Price-to-dividend yield (Note 2)			-	-	-
	Cash dividend yield (Note 3)			-	-	-

Note 1: Price-to-earnings ratio = average closing price per share for the year/earnings per share.

Note 2: P-to-dividend ratio = average closing price per share for the year/cash dividend per share. Note 3: Cash dividend yield = cash dividend per share/average closing price per share for the year. Note 4: Financial statements for the first quarter of 2021 reviewed by accountants.

• 63 -

(VI) Dividend policy and implementation

1. Dividend policy defined by the Articles of Association:

2. (1) In accordance with Cayman decree, listing (OTC) rules and these Articles, the Company shall not distribute dividends if there are no earnings. But if the statutory surplus reserves have exceeded 50% of the paid-in capital of the Company, the exceeded amount shall be distributed in full or in part, as the dividends according to the ordinary resolution of the shareholders meeting. During the listing period of the Company, dividends shall be distributed in Taiwan Dollar.

3. (2) A. Unless otherwise specified in Cayman decree, listing (OTC) rules or these Articles, if the Company has made profits in the current year during the listing period, at least two percentages (2%) shall be withdrawn as the employee remuneration (unless otherwise specified in Cayman decree or listing (OTC) rules, qualification of those employees shall be determined by the Board of Directors), which shall be distributed to the employees of the Company and (or) subsidiaries by issuing new shares and/ or cash, and no higher than one percentage (1%) shall be withdrawn as the director remuneration and shall be distributed to various directors, provided that at least 2/3 directors of the Board present and more than 1/2 directors have adopted the resolution. 數 But if

the Company has some accumulated losses, the amount for making up such losses shall be reserved firstly, and employee & director remuneration shall be withdrawn from the remaining amount as per the foregoing percentages. Distribution plan for employee and director remuneration shall be submitted to the Board of Shareholders. Unless otherwise specified in listing (OTC) rules, director remuneration shall not be distributed by issuing new shares.

B. Except as otherwise provided in the Cayman acts, listing (OTC) regulations or the Articles of Association, if the Company has a surplus at the end of a fiscal year, it shall pay all relevant taxes, make up for the loss (including the loss of the previous year). After allocating the statutory surplus reserve in accordance with the listing (OTC) regulations (but not applicable if the total statutory surplus reserve has reached the total issued capital of the Company) and the special surplus reserve (if any), the ordinary resolution of the shareholders meeting shall be passed to pay dividends or bonuses to shareholders at 10% of the remaining surplus of the current year based on each shareholder’s shareholding ratio, and the amount of cash dividends shall not be less than 10% of the total dividends and bonuses paid.

C. The Company shall also distribute the dividends by making use of the unappropriated earnings from the previous years, in accordance with the ordinary resolution of the regular shareholders meeting.

D. The Board of Directors shall deduct any amount (if any) that is due and should be paid by the shareholder to the Company, from any dividend or other account payable related to the shares.

E. Unless otherwise specified in Cayman decree and listing (OTC) rules, any special reserves shall be carried over into the unappropriated earnings of the Company.

1. The proposed dividend distribution for this year:

Due to the after-tax loss in 2020, the Company does not plan to distribute dividends.

• 64 -

• (VII) The impact of the stock grant proposed by the shareholders meeting on the Company’s operating performance and earnings per share:

The Company made no stock grant in 2020, so it is not applicable.

• (VIII) Remuneration of employees and remuneration of directors and supervisors

• The number or scope of the remuneration of employees and the remuneration of directors and supervisors stated in the Articles of Association

If the Company has made profits in the current year during the listing period, at least two percentages (2%) shall be withdrawn as the employee remuneration (unless otherwise specified in Cayman decree or listing (OTC) rules, qualification of those employees shall be determined by the Board of Directors), which shall be distributed to the employees of the Company and (or) subsidiaries by issuing new shares and/or cash, and no higher than one percentage (1%) shall be withdrawn as the director remuneration and shall be distributed to various directors, provided that at least 2/3 directors of the Board present and more than 1/2 directors have adopted the resolution. But if the Company has some accumulated losses, the amount for making up such losses shall be reserved firstly, and employee & director remuneration shall be withdrawn from the remaining amount as per the foregoing percentages. Distribution plan for employee and director remuneration shall be submitted to the Board of Shareholders. Unless otherwise specified in listing (OTC) rules, director remuneration shall not be distributed by issuing new shares.

1. The Company’s estimation basis of estimated amounts of employees’ remuneration and directors’ and supervisors’ remuneration, the basis for calculating the number of shares of employee remuneration distributed by stocks, and the accounting treatment in the event that the actual allotment amount differs from the estimated amount in the current period:

2. (1) The estimation basis of current estimated amounts of employees’ remuneration and directors and supervisors’ remuneration Please refer to the description of dividend policy in (VI) 1 above.

3. (2) The basis for calculating the number of shares of remuneration distributed by stocks in the current period: The number of issued shares is calculated based on the closing price of the Board of Directors on the previous day and by considering the effects of ex-rights and ex-dividends. The remuneration of employees calculated as less than one share is paid in cash.

4. (3) The accounting treatment in the event that the actual allotment amount differs from the estimated amount in the current period. When there is a major change in the issuing amount of the Board of Directors’ resolution, the change will adjust the original annual expenses. If the amount still changes at the date of the shareholders meeting, it will be treated as the changes in accounting estimates and recorded in the statement in the year of the resolution of shareholders meeting.

5. Remuneration distribution approved by the Board of Directors

6. (1) The amount of employees’ remuneration and directors’ and supervisors’ remuneration distributed in cash or stocks. If there is a difference between the annual estimated amounts of recognized expenses, the difference, the reason and the treatment should be disclosed. Due to the after-tax loss in 2020, the Company does not plan to distribute the remuneration of employees and remuneration of directors and supervisors.

7. (2) The amount of employees’ remuneration distributed by stocks and its proportion to the total amount of after-tax net profit and total employee remuneration for the current period: Due to the after-tax loss in 2020, the Company does not distribute stock dividends to employees, so it is not applicable.

8. 65 -

9. The actual distribution of the remuneration of employees, directors and supervisors in the previous year (including the number of allotted shares, amount and stock price), and if there is any difference between it and the recognized remuneration, and the number of difference, reason and treatment should be stated: Due to the after-tax loss in 2019, the Company does not distribute the remuneration of employees, directors and supervisors, so it is not applicable.

10. (IX) Repurchase shares of the Company by the Company

11. No application for repurchase of shares of the Company has been made in the most recent year and as of the printing date of the annual report

12. II. Corporate bond: None

13. III. Preferred stock: None

14. IV. Global depositary receipt: None

15. 66 -

16. V. Employee stock options and new restricted employee stocks:

(I) The Company has not reached the performance period for handling employee stock warrants and restrictions on new shares of employees:

	May28,2021	May28,2021	May28,2021
Type	First time of employee stock option certificates in 2017
Date of approval by the competent authority	2018/04/13
Issuing (handling) date	2018/04/30
Number of issuance	20,000,000 shares
Ratio of issued shares subscribed to total issued shares	7.44%
Duration of stock option	10 years
Performance method	Stock issue
Restricted stock option period and ratio (%)	Upon two years after the expiration of the stock option certificate granted to employees by the Company, the stock option holders can exercise the stock option rights according to the following schedule Schedule Year Exercisable stock option ratio (cumulative) At the expiration of two years (from the third year) At the expiration of four years 30% At the expiration of 6 years 60% At the expiration of 8 years 100%
			30% 60% 100%
Number of executed acquired shares	0
Amount of executed subscription for shares	0
Number of unexecuted subscription for shares	20,000,000 shares
Subscription price per share for unexecuted subscriptions	NT$11.2/share
Ratio of number of unexecuted subscription for shares to total issued shares(%)	7.44%
Influence on shareholders’ equity	No significant influence

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(II) The name, acquisition and subscription status of managers who have obtained the employee stock option certificates and the top ten employees who have obtained the number of subscription for shares of stock option certificates

											May28,2021
Title	Name	Number of acquired subscription for shares	Ratio of number of acquired subscription for shares to total issued shares (%)		Executed				Unexecuted
				Number of shares subscribed	Subscription price	Amount of shares subscribed	Ratio of number of shares subscribed to total issued shares (%)	Number of shares subscribed	Subscription price	Amount of shares subscribed	Ratio of number of shares subscribed to total issued shares (%)
Chief executive officer	Ding Jinzao	13,000,000	4.83%	-	-	-	-	13,000,000	11.2	145,600,000	4.83%
General Manager	Ding Zhimeng
Deputy General Manager	Ding Huaxiong
Deputy General Manager	Ding Zhiwei
Executive Assistant to Chairman	Xue Youwei
Associate Finance Officer	Wang Weiming
Assistant manager of audit	Liang Wenjie	5,000,000	1.86%	-	-	-	-	5,000,000	11.2	56,000,000	1.86%
Chairman’s Secretary	Huang Qiubo
Financial Manager	Huang Siguan
Marketing manager	Ding Jinhua
R&D Manager	Ding Jinfu
QC Manager	Wei Changzhong
Financial Manager	Chen Yuhua
Deputy Director of Management Department	Wang Rongge
Marketing manager	Wang Chaoyang
Marketing manager	Li Xiang

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VI. Status of new shares issuance in connection with mergers and acquisitions:

The Company was established and registered in the Cayman Islands in 2010 in order to comply with the requirements of applying for listing in Taiwan. In March 2010, it issued 120,000,000 new shares (common shares) with a denomination of NT$10 per share. It carried out equity exchange with Ding Holding Limited and completed the reorganization of the equity structure of the Group. After the reorganization, the Company directly or indirectly holds 100% equity of Sansda Holding Limited, Sansda (Hong Kong) Co., Ltd. and Sansda (Fujian) Plastics Co., Ltd. There is no other transaction for M&A.

VII. Financing plans and implementation:

(I) Contents of plans

1. As of the quarter before the printing date of the annual report, the plans which have not been completed in the previous issuance or private securities: None.

2. The plans which have been completed within the past three years and the plans which have not yielded significant benefits: None.

(II) Implementation

Regarding the purpose of each plan mentioned in the preceding paragraph, analyze item by item the implementation and the comparison with the original expected benefits as of the quarter before the printing date of the annual report: None.

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V. Operation overview

I. Business activities:

(I) Business scope

• (1) The main content of the business

The Company currently arranges Sansda (Fujian) Plastics Co., Ltd. as the main operating entity, mainly engaging in the research and development, manufacturing and sales of Ethylene-Vinyl Acetate copolymer; EVA) foam material, and recycle of waste plastics and scraps. With the characteristics of good plasticity, good elasticity, shock resistance, chemical resistance and low temperature resistance, EVA blended foam products can be widely applied. At present, the foam products manufactured by the Company are mainly divided into five types of foam products:

• A. Sole sheets

• B. Bag sheets

• C. Common sheets

• D. Rubber foam

• E. Floor mats

• F. Other special sheets

• (2) Proportions of main business items in 2019 and 2020

	Unit: 103in New Taiwan Currency;%	Unit: 103in New Taiwan Currency;%	Unit: 103in New Taiwan Currency;%	Unit: 103in New Taiwan Currency;%
Product	2019		2020
	Turnover	Operating proportion (%)	Turnover	Operating proportion (%)
Common sheets	326,446	25.94	193,644	19.21
Bag sheets	211,872	16.84	188,392	18.69
Special sheets	318,295	25.29	261,685	25.96
Sole sheets	6,959	0.55	10,111	1.00
Floor mats	43,044	3.42	78,273	7.76
High elasticity formed material	37,620	2.99	23,882	2.37
Other (note)	314,164	24.97	252,170	25.01
Total	1,258,400	100.00	1,008,157	100.00

Note: Others include the incomes from rubber foam, anti-static foam, flame-retardant foam, slippers, finished shoes, primary granulated resin, raw material trading and rental incomes, etc.; and the rental incomes in 2019 and 2020 are NT$17,807,000 and NT$18,967,000 respectively

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• (3) Items and purposes of main products

EVA foaming technology uses physical foaming or chemical cross-linking foaming to foam plastic materials (open or closed type) to achieve lightweight, buffering, sound absorption, shock absorption, heat preservation, filtration, packaging and other functions. The products not only have the special functions mentioned above, but also can reduce the cost by reducing the specific gravity through foaming. Therefore, foamed products are not only widely used in consumer goods (such as shoe materials, water sports equipment, cushions, etc.), but also demanded for building materials (air-conditioning insulation pipes, floors, skirting boards, etc.) and industrial uses (such as packaging, insulation, shockproof, filtration, etc.). The description of items and uses of the Company’s products is as follows:

as follows:
Item	Purpose
A. Sole sheets	EVA blended foaming products have the properties of softness, good elasticity, chemical resistance, etc., so they are widely used in the soles and interior materials of middle and high-end sneakers, hiking shoes, slippers, and sandals. There are many varieties of EVA sole materials, mainly concentrated in outsole, midsole and insole, as well as foam materials, footwear inserts, linings, etc.
B. Bag sheets	High-quality linings for products such as trolley cases, suitcases, and computer bags. The material must be soft, highly elastic, shaped and fit with leather fabrics, so it is gradually replacing traditional foam materials including NBR, SBR and CR foam rubber and PVC foam plastic to become the preferred material for luggage lining.
C. Common sheets	The basic EVA sheet has the characteristics of sound insulation, heat insulation, and light specific gravity. It is widely used in craft gifts, toys, industrial product packaging, surface lining, sports and leisure and other fields. The main applications in sports and leisure products include: Exercise mats, floating plate and floating beds, life jackets, shoulder pads, knee pads, water supplies, yoga mats and rhythmic balance mats, etc.
D. High elasticity foamed products	Featured light weight, high elasticity, non-absorbency, heat preservation, heat insulation, shock resistance, etc., they are widely used in sports equipment, protective gear and construction materials.
E. Highly processed products	Mainly used for children’s toy mats. Foam materials made of EVA/PE foam are widely used in children’s play areas in homes, kindergartens, shopping malls, etc. They are soft and comfortable, elastic, easy to clean and shockproof.
F. Other sheets	1. Special sheets: They are more flexible than common sheets and have better surface density. They are applied in printable slippers, toys, handicrafts, etc. 2. Rubber foam: With a closed bubble structure, low water absorption, low thermal conductivity, good thermal insulation effect, strong flexibility, and with properties such as shock absorption and sound absorption, cold resistance, heat resistance and anti-dry performance, it is widely used in industrial products and sports equipment. 3. Anti-static formed material: With a volume resistance up to 10Ω/cm, the product has excellent antistatic and electromagnetic shielding properties, shock resistance, sound insulation, heat insulation, moisture resistance, corrosion resistance, etc., and is mainly used in electronic packaging materials. 4. Flame-retardant formed material: Featuring heat insulation, flame retardant, cold insulation, shock resistance, insulation and heat preservation, etc., the product is widely used in civil engineering for doors and windows, waterproof and leakproof projects, and insulation for wall pits and pipelines in water and electricity projects, and insulation for electrical sockets.

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Item	Purpose
	5. Shock-absorbing formed material: Featuring high shock absorption and impact resistance, heat insulation and moisture resistance, strong chemical stability, and outstanding property of shape memory, the product is better than ordinary EVA and PE foam, and is widely applied in sports equipment, fitness equipment, harnesses, and electronic packaging materials, etc.

(4) New products planned to be developed

The special foams of environmental protection, flame retardant, shock absorption, sound absorption, antibacterial property, antistatic property and other properties developed and produced by the Company have been widely used in many fields such as electronics, automobiles, ships and architectural decoration. EVA foam materials will also develop towards ultra-light new materials. With the wider application scope of EVA materials, the development of new flame retardants and synergistic flame retardants, reduction of the amount of main flame retardants, increase in the dispersibility and interface compatibility will become the direction of EVA flame retardant research. The new products that the Company plans to develop include:

A. Anti-static and electromagnetic shielding EVA material

• B. High-pressure-resistant and lightweight silt drainage pipe material for river channels

• C. EVA solar back sheet

(II) Industry overview

(1) Present industry situation and development

The Company applied for registration in the British Cayman Islands in 2010. With its wholly-owned subsidiary Sansda (Fujian) Plastics Co., Ltd. (hereinafter referred to as Sansda (Fujian)) as the main operating entity, it mainly engages in the production of blended foam products made from ethylene-vinyl acetate copolymer (EVA) and recycling of waste plastics and scraps.

Foamed plastics are resin-based plastic products with numerous microporous gases inside. It is a foaming material made by molded foaming with EVA as raw material and LDPE or other additives added. Its raw materials include primary EVA, LDPE plastics, and recycled materials made from waste plastics, which are then recycled into EVA blended foamed products.

==> picture [375 x 124] intentionally omitted <==

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

Polymerized ethylene
and processing PE and its Recycling
Recycled LDPE
products
Polymerized ethylene In substitution of
primary LDPE
Ethylene Primary LDPE Blended Foaming Processing
Polymerized ethylene and formula materials EVA foaming EVA foam materials EVA foam products
vinyl acetate Primary
EVA In substitution for Recycling
primary EVA
Vinyl acetate Foaming formula materials Recycled EVA
Foam materials
----- End of picture text -----

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The foaming principle of plastics is to dissolve gases in a liquid polymer to form a saturated solution, and then produce foam through nucleus interaction; the foaming agent can be dissolved in the liquid polymer in advance, and will release gases when the temperature rises and the pressure drops to form bubbles. The existence of bubbles endows the EVA foam material with many advantages such as water resistance, corrosion resistance, ease of processing, heat preservation, sound insulation, and high elasticity. Water resistance brings moisture-proof function, which is not easy to absorb water; corrosion resistance can play its role in seawater, grease and acid-base environments, which is antibacterial and pollution-free; the characteristics of ease of processing makes hot pressing, cutting, laminating and other processes available to produce various types of molded products; heat preservation and sound insulation are beneficial to improve the performance of household products; and high elasticity provides the softness characteristic required by the contact surface of sports products. Based on the above properties, EVA foam materials can be processed into various products, and are widely used in footwear, luggage, sports and leisure, construction materials, electronic packaging materials and other fields.

A. Industrial development under macroeconomic environment

The Company is mainly engaged in the R&D, manufacturing and sales of EVA foam materials, being a part of the plastics industry. Since the plastics industry is an important pillar of the basic livelihood industry, its application can be seen in every corner of the economy, and it is also closely related to the national consumption capacity. China is the main sales market of the Company. The stage of China’s economic development and the people’s living standards affect the development of the overall plastics industry, and also guide the development of EVA industry.

The development of China’s economy is also inseparable from the global environment. According to recent observation of the international economic situation, the global economy has been severely affected by the impact of the COVID-19 in 2020. Looking forward to 2021, with the smooth development of vaccine research and the control of the epidemic situations in various countries, major international forecasters believe that the global economic and trade growth in 2021 will be significantly better than that in 2020.

From the perspective of the composition of GDP of China’s Mainland and the contribution rate of economic growth, the final consumption expenditure accounted for the highest proportion of GDP of China’s Mainland between 2015 and 2019, about 57.5% to 69.0%. In 2020, the rate of disposable income from savings of households of China’s Mainland is higher than that in previous years. As the impact of the epidemic gradually fades, the consumer confidence will be enhanced and part of excess savings will be turned into real consumption. Besides, the consumption upgrade mentioned in the “14th Five-Year Plan”, people’s livelihood construction, smart cities, tax reform, household registration reform, and regional development will be promoted to guide consumption upgrades, and improve overall consumption levels and people’s disposable income. Therefore, private consumption will replace exports and infrastructure investment in 2021 and become the main catalyst for the economic growth of China’s Mainland. In 2021, the effect of consumption-driven economic growth will be greatly improved. China’s economy is shifting from rapid growth to high-quality development, and the innovation investment continues to be intensified. Such shift will have a profound impact on many areas including consumption, production, investment, trade, and research and development in China. In addition, green development is the direction of future development.

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On one hand, green development strengthens environmental governance to increase the cost of polluting industries, which will increase efforts to eliminate backwardness and overcapacity in combination with supply-side structural reforms. On the other hand, green development also provides huge new demands in environmental governance and other fields, bringing new opportunities for the environmental protection industry and low-energy enterprises.

B. Plastic consumption trends in China’s urbanization stage

Demanded by China’s economic development, urbanization remains a long-term trend in China. The deepening of urbanization will further promote economic development and expand the consumption of urban residents. The process of urbanization has a profound impact on the purchasing behavior, purchasing decision, purchasing intention, and purchasing ability of consumers. Therefore, urbanization is also one of the important driving forces to the improvement of China’s demand structure. China is a populous country, so a higher urbanization rate will bring more urban population and consumption. Various industries closely related to people’s livelihood will also benefit from this. While the shoe industry, luggage industry, toy industry, sporting goods industry, construction materials industry, etc. directly influences the quality of life of people, and they are expected to be positively affected by the deepening of urbanization. More other industries, such as the electronics industry and the automobile industry, will also be stimulated by the increase in demand resulted from the increase in urbanization.

==> picture [318 x 180] intentionally omitted <==

Source: National Bureau of Statistics

According to data released by the National Bureau of Statistics, China’s GDP reached RMB 101.6 trillion in 2020 due to the economic plan implemented by the Chinese government and the gradual recovery of the global economy.

Affected by the continuous increase in wages in recent years, the per capita disposable income of residents has grown rapidly. The per capita disposable income of Chinese residents reached RMB 32,189 in 2020. Compound average growth rate reached 2.1%. The increase in disposable income will help release more consumption potential.

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Considering the expectation of a further slowdown in China’s nominal GDP and per capita GDP growth rate, the personal per capita disposable income will also be affected to some extent. However, in view of the Chinese government’s economic stimulus policies, the adjustment of the personal income tax threshold, the further increase in the urbanization rate and the expected global economic recovery, it is estimated that the per capita disposable income of urban residents will reach RMB 51,300 in 2022.

==> picture [302 x 209] intentionally omitted <==

Source: National Bureau of Statistics

Benefiting from the increased China’s GDP, raised employment rate and the development of the urbanization process, the income level of urban households has increased sharply. Considering the expectations of China’s continued economic growth and improvement of urbanization, the increase in disposable income of urban households is expected to bring more consumption power and benefit the people’s livelihood oriented industries closely related to urban family life.

==> picture [337 x 192] intentionally omitted <==

Source: National Bureau of Statistics

The plastic manufacturing industry is also a major part of the people’s livelihood oriented industries. After a long period of development, the plastics industry in China has gradually expanded its application fields. In recent years, the growth rate of plastic consumption of China has remained

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above 10%. As the growth of plastic consumption is inseparable from GDP growth, many countries also take per capita plastic consumption as a quantitative indicator to measure and reflect the economic strength of a country. Therefore, the continuous growth of China’s national economy actually provides an important niche for the development of the plastic industry.

According to statistics from Xinhua Net and Data Research Department of DRCNET, China’s plastic products industry has grown rapidly each year at a rate higher than GDP in the past ten years. In recent years, the production and economic operations of China’s plastic products have been performing well, and the output of various products has continued to sustain a good development trend, which outperforms the early stage. According to data from China Plastics and Rubber Web, the total output of plastic products in China in 2020 was 76.032 million tons. In addition, the plastic products industry consists of plastic film, plastic sheet, foamed plastic (expanded plastic), plastic artificial leather, plastic packaging and containers, etc. As the plastic foaming industry is an important item in the plastics manufacturing industry and has a wide variety of products, it is widely applied in industry, agriculture, construction, and daily life. Nowadays, the demand for foamed materials in the Chinese plastics market is also increasing. On the basis of guidelines in the Outline of the National Medium and Long Term Science and Technology Development Program (2006-2020) , National Innovation Driven Development Strategy Program , 13th Five-Year Plan on Scientific and Technological Innovation , A Guideline on Emerging Sectors of Strategic Importance during the 13th Five-Year Plan , 13th Five-Year Plan National New Material Planning , and centering on the two major plans of the Guidance Opinions on Plastics Processing Industry during the “13th Five-Year” Development and Guidance Opinions on the Technological Progress of Plastics Processing Industry during the “13th Five-Year” Development, the innovation-oriented development strategies should be upheld, and upstream and downstream industries should be united to highlight the direction of “being functionalized, lightweight, eco-friendly, micro-molding”, promote technological innovation and technological progress in the industry, boost high-quality development of the industry, and advance the plastics processing industry from a large production towards a strong one.

According to analysis of China Insights Consultancy, the consumption of China’s EVA market in 2010~2020 (expected figures for 2015~2020) is as follows:

==> picture [300 x 125] intentionally omitted <==

Source: China Insights Consultancy

EVA resin features good flexibility, impact strength, low temperature resistance and environmental stress cracking resistance, as well as good optical performance, chemical stability, aging resistance and ozone resistance, and is non-toxic and harmless, so it is widely used in the areas such as foaming materials, films, injection molding products, blow molding products, wires and cables, hot melt

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adhesives, and solar energy. In addition, EVA resin can also be used as a raw material of modification for other resins, showing a broad prospect for development and utilization.

• C. Current status of the plastic recycling industry under the trend of environmental protection

Environment-friendly recycling of waste plastics for reproduction in China is an extension of the plastic industry. Since fossil energy resources are diminishing, waste plastics can be recycled and reused through technology, making them an inexhaustible “second kind of oil field”. Therefore, due to its environmental concerns, plastic recycling has gradually become an emerging industry that has attracted much attention.

From the perspective of plastics industry development, the recycling of waste plastics is an important way to turn waste into wealth and solve ecosystem pollution. As a measure to save energy and protect the environment, the recycling of waste plastics is taken seriously by countries all over the world. China is deficient in plastic raw materials, so the import volume is large; at the same time, the recycling rate of waste plastics is very low. The development of waste plastic recycling industry is an effective way to solve the shortage of plastic raw materials. The available data suggest that the recycling rate of waste plastics is less than 10%, while China’s plastic products industry has developed rapidly in recent years, ranking second among the world’s plastic product output. With the soaring international oil prices, the overall plastics industry has been gaining little profit. Experts believe that the structural adjustment of the plastic products industry needs to be accelerated. As one of the directions of structural adjustment, the recycling of waste plastics not only has become the key to the entire recycling industry chain, but is also a link with higher technology and higher profits in the current industry. At the present stage, China’s recycling rate of waste plastic and packaging is less than 10%, while Japan has reached 26%. Since the development and research work on the recycling of waste plastics started early in some developed countries, and many technologies are advancing day by day, which has produced great benefits. The waste plastic recycling industry in China is a promising environmental protection industry with great development potential. From the perspective of economic benefits, the advantage of the waste plastic recycling industry lies in its low cost. According to calculations, compared with the current price of plastic raw materials, the cost of products made from reprocessing of waste plastics is only about 50% of that of the products made from quality raw materials.

In the early days, the waste plastic industry in China mainly relied on traditional material recycling systems. In recent years, the waste landfills in various regions have changed from manual collection, sorting, and processing of waste plastics to industrialized and automatic operation. However, only a few large-scale enterprises attach importance to long-term growth and sustainable management, and such enterprises are concentrated on the coastal area. In waste plastic industry, large enterprises have more advanced plastic classification technology and equipment production lines, lower purchase costs, higher production efficiency, and better environmental protection facilities than smaller enterprises, and their wastewater discharge can meet the standards, avoiding secondary pollution. With the rapid development of China’s national economy, the shortage of resources and environmental pollution have become increasingly prominent, and the recycling of waste plastics is in grave difficulties. In order to protect the environment and realize the sustainable development of the national economy, the Chinese government has formulated the Outline of the National Medium

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and Long Term Science and Technology Development Program , in which the strategic goals of the waste plastic planning in the field of renewable resources are: the recycling rate of waste plastics will reach 50% by 2020. Therefore, it can be expected that: the processing and comprehensive utilization of waste plastics will become an emerging industry with huge business opportunities and market prospects. It is expected that the industry will advance China’s plastics and waste plastic recycling industry to a more scaled and efficient state with the help of government policy support, continuous technological upgrades and increase in the investment of environmental protection facilities in the future.

(2) The relevance of the upper, middle and lower reaches of industry

EVA foam material market: Upstream and downstream industrial chains of EVA foam material industry

==> picture [331 x 183] intentionally omitted <==

The Company mainly purchases EVA, LDPE raw materials and plastic granulation materials for waste plastic recycling from upstream raw material suppliers, so as to produce EVA foamed products by blending different proportions of foaming formula materials. Since EVA raw materials are derived from ethylene-vinyl acetate copolymers, the operating rate of global petrochemical industry will significantly affect the supply of plasticized raw materials derived from ethylene. But EVA and LDPE can achieve interconversion in the manufacturing process. With years of R&D experience, the Company can recycle waste plastics produced by the consumption of people’s livelihood and scraps from EVA production process through professional technologies, and recycle and remake them into EVA foaming formula materials according to different recycling ratios. Therefore, the Company can respond to the supply change risk of midstream and upstream industrial chains by using proprietary process technologies and combination of different raw materials. In the downstream market of EVA foam materials, the footwear industry and luggage industry account for about 70%; the toy industry, sporting goods industry, and construction materials industry account for about 25%; and the emerging fields such as automotive interiors and electronic components account for about 5% of the Chinese market. Besides, China’s domestic downstream companies will gradually embark on the road of producing mid-to-high-end products. At present, the application potential of EVA foam materials has not been fully tapped. In China, injection molding and foaming products are the largest areas of EVA resin consumption, accounting for about 65% of the total consumption. It is expected that more emerging areas will be expanded in the future, such as: electronic engineering, heat preservation and air-conditioning, car decoration and

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shipbuilding industry and other emerging fields. As the Company uses part of recycled waste plastics as raw materials, which has complementary characteristics with downstream industries, so the future industry development of the Company is indeed promising.

• (3) Development trends and competitive situations of products

• A. Development trends of products

  • (A) Continuously expand application areas through product innovation

The EVA foaming technology has higher requirements especially on the key technologies such as product formulation, physical reaction and control procedures. After the evolution of industrial environment, the technology and mechanical equipment of EVA industry have become more mature and stable, so its market is widening and the scope of application is also expanding. In addition to many products such as sports goods, packaging materials, and construction materials, other industries such as materials for aquaculture are also involved. The breadth and depth of application continue to expand, and EVA foam products keep making improvements, and new products are introduced. New products continue to emerge through R&D, especially the thermoplastics with recyclable characteristics and great substitutability, which will replace most other foam materials. It is expected that the EVA industry will remain vigorous development. In the future, EVA foam manufacturers can increase their degree of customization, and adjust various parameters that affect EVA foam in response to customer needs to further expand its application fields, so that the supply of EVA foam materials tends to be more diversified and specialized.

(B) Recycling to conform to the trend of environmental protection

The negative impact of economic activities on the global natural environment is becoming more and more serious, and the deteriorating natural environment also has an increasing impact on the industrial activities of various countries. How to design an analysis framework that studies the relationship between economic activities and the changes in the natural environment has become a natural development trend, and the green economy stands out under such situation.

At the climate change summit held by the UN, China promised to reduce carbon intensity per unit GDP by 2020 by 40%-45% compared to 2005. As one of the world’s greenhouse gas emitters, China is trying to adjust its industrial structure to transform its economic development mode and fulfill its commitment to reducing emissions, while meeting its needs of sustainable industrial development. The recycling of plastics can effectively reduce energy consumption and environmental pollution, and achieve sustainable use of resources.

In terms of recycling of EVA foam materials, waste plastics produced by the consumption of people’s livelihood and scraps from EVA production process can be recycled through professional technologies, and be recycled and remade into EVA foaming formula materials according to different recycling ratios. In addition to improving the utilization of resources and materials and reducing industrial production costs, recycling can also create substantial benefits for environmental protection, which conforms to the trend of green economy.

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(C) The industry is moving towards the competitive convergence to select the superior and eliminate the inferior

The consumption of EVA foam materials in China has developed rapidly, which has attracted many manufacturers to enter the industry over the years. According to statistics, most of the EVA foam material manufacturers in the Chinese market are small and medium-sized enterprises with annual sales of less than RMB 30 million; a small number of manufacturers are large and medium-sized enterprises with annual sales of RMB 30 million to RMB 100 million. The quantity of large-scale manufacturers with annual sales of more than or close to RMB 100 million is the smallest. The data also show that all the top ten companies of the sales of EVA foam materials in 2014 were companies with sales of more than RMB 100 million, accounting for about 13.7% of the market share. It reflects that although there are many manufacturers in the market, the large-scale manufacturers occupy a dominant position in the market.

Since the scattered manufacturers in China’s EVA foam material industry are small in scale and has a low level of production integration, the capital and manpower invested in the business are limited compared with other large companies, which makes their market competition position more unfavorable. In such environment, there will be the trend that the strong ones will remain strong and the trend of selecting the superior and eliminating the inferior in the industry. The companies that outcompete will continue to grow in scale, and their management systems, production capacity of equipment, R&D technologies, and scale of operations will become important indicators and investment thresholds for the future development of the industry.

(D) The Chinese government intends to establish standards and specifications for plastic products

It is expected that China’s economy will continue to grow steadily in the next few years. With the accelerated development of industrialization and urbanization, and in the face of increasing concerns about resources and the environment, the Chinese government hopes to minimize the economic and social activities’ demand for natural resources and impact on the ecological environment, so it takes initiative to establish standards and specifications for plastic products. China National Standardization Technical Committee has proposed a standard system framework for related fields, including comprehensive and general standards, test method standards and product standards. Among them, the implementation of the development plan for the resource conservation and comprehensive utilization of plastic products, the basic reuse and recycling standards of plastic waste and related test methods for rigid foamed plastics for building energy conservation are listed as key projects. Although China has not yet established specific product standards and specifications for the EVA foam material industry, it is indirectly regulated by product standards and specifications in the downstream market since EVA foam materials can be used in many downstream industries. The Chinese government is attaching greater importance to the standards of plastic products, especially for plastic products in the export market. This action also raises the requirements on the products of EVA foam material manufacturers, and also contributes to healthy competition in the EVA foam material industry. Manufacturers with unqualified products will be eliminated, which provides substantial benefits for the long-term development of the industry.

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B. Competition

After more than ten years of product R&D and market expansion since its establishment, the Company has mastered the production technologies of various EVA foam compositions, EVA blended foams and special EVA blended foams, and established a complete system of foam products.

As there are only small less-integrated manufacturers which mostly enter the market later than the Company in China’s EVA foam industry, the Company has great competitive advantages in management system, equipment capacity, waste recycling technology and scale of operation, especially the scrap recycling technology which can achieve the purpose of both environmental protection and cost control. This technology entails a long time of knowledge enhancement and experience accumulation. It has formed an important technical barrier for newcomers of the foam market, thus being a key advantage of the Company. In the future, the EVA foam manufacturers with this key technology will be quite likely to seek for patent production, and other enterprises will certainly look for a new path to cope with this key niche.

According to the statistics, there are more than 3,000 enterprises with EVA foam production capacity in the Chinese market. Most of them are small enterprises with annual sales less than RMB 30 million, and a small number of them are medium-sized enterprises with annual sales of RMB 30 million to RMB 100 million. Large foam manufacturers are rare. Beside the Company, large foam enterprises mainly include Jinjiang Chengzhang Shoes Material Co., Ltd., Fujian Quanzhou Sansheng Rubber Plastic Foamed Shoes Material Co., Ltd., Shantou Special Economic Zone Jianxin Plastic Co., Ltd., etc. For these enterprises, export sales account for a large proportion, which is greatly affected by the international financial turmoil and anti-dumping. The demand of EVA foams in the Chinese market has been increasing year by year. In this context, the Company has opened good sales channels in China, and mastered a nearly mature recycling technology to reduce costs. Thus, the Company has formed its own advantages without vicious price competition.

The Company was named as a project undertaker of the Science and Technology Program in 2006, was listed as a key project of Fujian Technical Transformation Program in 2007, was designated as the vice president company of China Plastic Processing Industry Association, awarded as “China EVA Recycling Industrial Research Base” and rated as a Grade AAA Company of China’s Plastic Industry in 2009, and become a drafter of the National Standard of Floor Mats in 2015. Meanwhile, the Company has passed the certification of ISO 9001 quality system. It is shown that the Company has focused on not only increasing the revenue, but also stabilizing the internal system to achieve sustainable operation.

(III) Overview of Technology and R&D

(1) Technical level and R&D of business

The ethyl vinyl acetate (EVA) products produced by the Company are a kind of widely used plastic foam material. Because of wide application and diversified specifications, they differ greatly in product features. So far, the Company’s R&D team has developed excellent formula and special foaming techniques by virtue of more than ten years of experience and technology accumulation, full cooperation with customers in new formula development and increasing application of new materials.

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EVA materials can import VA monomer into the molecular chain of resin to improve the branching degree and lower the crystallinity of polymers, and produce soft, highly elastic, shock-absorbent, insulated and non-corrosive materials. Meanwhile, they can be made in different shapes and utilized. At present, the Company has not only mastered the output features of products which are closely related to the empirical value of VA content, but also made a breakthrough in the blended foaming technology which combines recycled plastic scraps and virgin resins. The products produced by the Company can meet the market application standards in terms of physical characteristics and quality. As a result, plastic recycling has become a concrete and practical mode of operation and an important development indicator of EVA industry, and can greatly reduce the damage caused by plastic materials to the environment. In addition, the Company has begun to develop EVA structure with different chemical formulas and produce high-value special sheets with different materials, including: high-foaming EVA sheet, antistatic EVA sheet, NBR foaming sheet, coarse-pore foaming sheet, flame-retardant sheet, shock-absorbent foaming sheet, TPE foaming sheet, etc.

The Company has made abundant R&D achievements, accumulated rich technical experience, tapped a wide range of industries, such as shoes, luggage, sports equipment, toys, packaging materials and building materials, and gone ahead of Chinese competitors in technology. In addition, the Company has also made great investment in R&D of flame-retardant, sound-proof and heat-barrier materials used in building and decoration materials, and mildew-proof and anti-bacterial materials used in home supplies, and explored various application fields according to the future market development trends, with a view to giving full play to the unlimited potential of EVA materials.

• (2) R&D personnel and their educational background

Unit: Person

			Unit: Person
Year Educational background	2019	2020	March 31,2021 Number of people 94 89 183
	Number of people	Number of people
University/college	91	90
Senior high school/secondary vocational school	83	87
Total	174	177

Note: The Company’s R&D Department consists of the process improvement section, formula development section, and product application and promotion section. Some of the posts can be concurrently held by the employees of other departments.

• (3) Annual R&D expenses as of the date of the Report

				Unit: *103in New Taiwan Currency	Unit: *103in New Taiwan Currency	Unit: *103in New Taiwan Currency
Year Item	2016	2017	2018	2019	2020	2021 Q1
R&D expense	75,737	57,652	39,477	52,425	39,245	8,769
Net revenue	5,779,198	4,588,271	1,464,797	1,258,400	1,008,157	264,943
Proportion in the revenue	1.31%	1.26%	2.70%	4.17%	3.89%	3.31%

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• (4) Developed technologies/products

The Company always attaches great importance to R&D, and since its establishment, has carried out continuous studies on new product development, production technology improvement, process improvement, energy saving and industrial safety and health to guarantee work safety, effectively save energy and improve production efficiency. In recent years, the Company has achieved great success in improving productivity and added value, and successfully developed a wide variety of products and technologies which are widely applied, including: environmentally-friendly flame-retardant foams, anti-bacterial, sound-absorbent and flame-retardant foams, heat-resistant and low-shrinkage foams, highly elastic foams used in building materials, antistatic electronic packaging materials and shock-absorbent foams widely used in sports and fitness equipment.

• (IV) Long-term and short-term business development plans

• (1) Short-term plan

  • A. Introduce new mechanical equipment, expand the production line, and replace some labors with automatic machines to raise productivity.

  • B. Test and improve the production line and enhance the management to shorten the foaming duration, improve the production efficiency and maintain the quality, yield and unique properties of products.

  • C. Increase the sales in key areas in a planned way, continue to consolidate the market share of shoe products, and further expand the sales channels of other foam products by virtue of the business opportunities brought by China’s plans for domestic demand expansion and the update of Chinese laws and policies.

  • D. Provide good after-sales services for existing customers to raise customer loyalty, and actively develop customized services to meet the diversified needs of customers.

(2) Long-term plan

     - A. Gradually promote e-commerce development, expand the scale of operation, actively tap the export market and expand the business layout after carefully evaluating the future development trends of each region.

     - B. Pay attention to the dynamics and trends of domestic and foreign EVA markets, continue to develop new flame-retardant, heat-insulated, uvioresistant or antistatic foam products, and cooperate with the academic community to raise product value.

     - C. Develop and improve the waste recycling line, keep ahead in EVA recycling, and continuously enhance our core competitiveness.

     - D. Improve the financial structure and group structure, raise the Group’s competitiveness and make full use of working capital.

• II. Market and sales overview

• (I) Market analysis:

  • (1) Main sales regions:

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The Company is one of the important EVA foam manufacturers in China. At present, our products are mainly sold in Chinese Mainland, especially the coastal provinces in East China and South China. Despite no direct export, our products can enter foreign markets through downstream traders. With the consummation of the local industrial chain, this region has been gradually treated as an important source of procurement by foreign manufacturers, which is helpful for our products to enter the international market.

(2) Market share

EVA foams have many excellent features, such as stable chemical properties, ease to be colored and processed and strong corrosion resistance. They can be produced into various products and foam materials, and are widely applied in shoes, luggage, toys, sporting goods, building materials, etc. With its continuous technical innovation, quality improvement and market expansion, the Company has occupied 5% of the domestic EVA foam market in China, ranking first.

• (3) Future supply-demand state and growth of the market

A. Future supply and demand

In 2019, the global EVA consumption was about 5 million tons, while the consumption and output of EVA in the Chinese market were 1.77 million tons and 972,000 tons respectively, showing a self-sufficiency rate of 50%. It follows that China has become one of the major consumers of EVA in the world. EVA supply in China mainly relies on imports, accounting for 60% of the total market supply. Even with the domestic supply, China’s EVA market still remains in short supply. Due to the wide gap between the plastic consumption and domestic plastic output in China, and the continuous increase of people’s livelihood consumption and new product development, it is expected that China’s demand for EVA will grow steadily in the future to meet the strong market demand.

Application Chart of EVA Foam Industry

==> picture [190 x 158] intentionally omitted <==

Source: China Insights Consultancy

At present, EVA foam products account for more than 60% in China’s EVA consumption. In spite of late start in China, EVA foams have grown rapidly in recent years due to their excellent process ability and wide application. The growth momentum of consumption has also accelerated the development of EVA foam technology in China, and expanded the application of EVA foam materials from such traditional

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fields as shoes and luggage to more necessities for people’s livelihood (e.g., toys and sporting goods) and even building materials. With continuous innovation, it is expected that more new application fields of EVA will be developed in the future.

==> picture [286 x 189] intentionally omitted <==

Source: China Insights Consultancy

In terms of EVA foam supply, many manufacturers have been attracted to the foam industry in recent years, due to the rapid growth of EVA foam consumption in China. According to the investigation and forecast of Frost & Sullivan, the size of China’s EVA foam market has grown from RMB 17.1 billion in 2010 to RMB 21.4 billion in 2015, thus driving the stable growth of downstream market demand in the context of global economic recovery.

B. Future growth

Statistics show that in the downstream markets of China’s EVA foam industry in 2014, shoes and luggage accounted for about 70%; toys, sporting goods and building materials accounted for about 25%; emerging fields, such as automobile interiors and electronic accessories, accounted for only 5%. Their future growth is analyzed as follows:

• (A) Shoes industry: On one hand, China, with a huge population, has a strong demand for shoes. On the other hand, China is also one of the largest exporters of shoes in the world, and Chinese shoes are mainly exported to the United States, Europe, Japan and Hong Kong, China. From 2010 to 2014, the output value of the shoes industry showed an average annual compound growth of 13.3%, rising to RMB 477.31 billion in 2014. It is expected that under the industrial upgrading, the output value of the industry will have an average annual compound growth of 7.1% from 2014 to 2020.

• (B) Luggage industry: On one hand, the demand of Chinese consumers for luggage keeps rising with the development of economy and the improvement of living standards. On the other hand, China is also one of the major exporters of luggage in the world, and Chinese luggage products are mainly exported to European and American countries. From 2010 to 2014, the output value of the luggage industry showed an average annual compound growth of 12.8%, rising to RMB 137.83 billion in 2014. It is expected that the luggage industry will continue the strategy of brand innovation, and its sales will

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gradually shift from foreign markets to the domestic market. It is further expected that the output value of the industry will have an average annual compound growth of 8.4% from 2014 to 2020.

• (C) Toy industry: With the increase of China’s newly-born population, the expenditures on toys of Chinese people will continue to rise. Apart from the consumption in the domestic market, Chinese toy products are mainly exported to foreign markets, especially Europe, the United States and Japan. From 2010 to 2014, the output value of the luggage industry showed an average annual compound growth of 14.9%, rising to RMB 198.41 billion in 2014. It is expected that with the development of the domestic market and the expansion of emerging overseas markets, the output value of the industry will have an average annual compound growth of 11.0% from 2014 to 2020.

• (D) Sporting goods industry: With the rapid development of China’s sporting goods industry and the continuous increase of fitness consciousness among Chinese people, the sporting goods market is growing increasingly. At present, Chinese sporting goods are mostly sold in the domestic market, while a few are exported to the United States, Hong Kong (China), Japan and Europe. From 2010 to 2014, the output value of the luggage industry showed an average annual compound growth of 20.3%, rising to RMB 185.27 billion in 2014. It is expected that with the establishment of independent brands of Chinese sporting goods enterprises and the growth of domestic demand, the output value of the industry will have an average annual compound growth of 14.9% from 2014 to 2020.

• (E) Building materials industry: The large-scale urbanization in China has greatly promoted the development of China’s building materials market. At present, the building materials made in China are mostly sold in the domestic market, while a few are exported to other Asian-Pacific countries and regions. From 2010 to 2014, the output value of the building materials industry showed an average annual compound growth of 11.7%, rising to RMB 1,699.08 billion in 2014. It is expected that with the continuation of urbanization, the output value of the industry will have an average annual compound growth of 6.8% from 2014 to 2020.

• (F) Other emerging fields: The great potential of EVA foam materials has not yet been fully exploited. More downstream markets, such as automobile and electronic accessories, are expected to be developed in the future. These emerging fields will bring new opportunities for the development of EVA foam materials.

(4) Competitive niches

• A. Unique recycling technology of waste plastics with great advantages

The Company has developed a unique recycling process of waste plastics ahead of its peers. In the recycling process, EVA scraps from different sources and waste EVA plastic products are first classified by property and processed through sorting, soil removal, washing, drying, etc., and then crushed into pieces and sheets, which are later sent to a plastic granulator for thermoplastic recycling, thus producing recycled EVA plastic particles. The EVA foam materials produced by extracting organics from waste plastics, and modifying chemical properties and setting physical properties by machinery are filled with active blended composite particles, which not only increases the toughness, but also improves the mechanical properties of recycled products, and effectively raises the recycling efficiency

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of EVA. The huge achievements in this recycling technology have made the Company greatly surpass its peers. In addition, the recycling technology not only lowers the production costs and reduces the impact of rising oil prices on costs, but also helps the Company expand the market and improve its operation efficiency and market competitiveness.

B. Ability to independently develop machinery and equipment

The Company has the ability to independently design, develop and improve the machinery and equipment used for the production of EVA foam materials. In addition to developing and designing machinery and equipment according to the product structure, properties and quality requirements, we also improve the technology and yield of the production line through continuous research, development and improvement. Especially, we have achieved great success in EVA recycling granulator. The granulator can increase the output of recycled EVA plastic particles, effectively alleviate the carbonization in the process of high-temperature hot melting recycling, improve the quality of recycled materials, and make a great breakthrough in the utilization efficiency of recycled foam materials, thus laying an important technical foundation for us. Relying on the competitive advantage brought by the ability to independently develop machinery and equipment, we can greatly shorten the process of production line, effectively promote mass production, and in combination with product R&D capabilities, accelerate the release of new products. Hence, this is an important competitive advantage making us leading the industry.

C. Consistent operation

The Company maintains a consistent production process in all links such as plastic recycling, EVA granulation, blending and stirring of EVA foam materials and EVA foaming at the front end and rolling and cutting of foam materials at the back end, and carries out automatic production in stages with a large production capacity. In this way, all links are connected. Hence, our production line is the most integrated one in the industry. The main stages of the production process include:

• (A) Collection of recycled EVA particles: located at the back end of EVA recycling and granulation process. Install an induced draft fan behind each granulator to transport recycled materials to the raw material tank through special pipelines for uniform collection and packaging.

• (B) Electronic towing trough: located at the front end of EVA foam production line. Design and plan the traffic flow of the plant in advance according to the characteristics of the production line, and install an electronic towing trough in the loading and transporting section of the internal mixer, of which the single loading capacity is nearly 5 times higher than that of manual operation.

• (C) Automation of EVA sheet production line: design tight traffic flow for the front-end sheet drying, trimming and transportation to reduce manpower communication, and adjust the sheet passing angle and position at the electrofusion joint to improve the adhesion and smoothness and stabilize the shining process at the back end.

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With the tight process arrangement and automatic design, the Company can effectively improve the production efficiency, reduce wastes in the process, and lower labor and material costs, thereby creating cost advantages and providing customers with high-quality, high-efficiency and high-benefit services. Most of the existing EVA plastic recycling devices in China are technologically backward, outdated and simple, with unstable quality and low recycling rate. By contrast, our EVA recycling line integrates a complete set of consistent production operations, and has set up a threshold for competition in the context of numerous small factories. It will not be overtaken by competitors in a short term.

D. Image of high-quality products built over the years

With many years of manufacturing experience, the Company have maintained stable product quality, won the trust of customers and built a good image by continuously improving the benefits of production technology. The key reason lies in the product content and design, and the quality standards which can meet consumer demands. The Company has a well-developed system for the management of suppliers and control of raw materials, and has passed the certification of ISO9001 and ISO14001 quality systems. The products sold to some export-oriented traders have all passed the strict inspection of the European Union. With this competitive advantage, the Company will continuously improve quality management so as to build a management mechanism for long-term operation and achieve the goal of sustainable operation.

E. Great emphasis on R&D and constant product innovation

The Company has been engaged in the production and sales of EVA foam materials since 1990s. Meanwhile, it has accumulated more than ten years of experience in product design and process technology development, and through continuous R&D innovation, fully understood the characteristics of EVA foam materials. With the increasing application of EVA foam materials in recent years, the products accumulated by the Company through long-term R&D have been brought into full play, e.g., EVA materials with antistatic and electromagnetic shielding properties and sound-absorbent and fireproof foam materials for interior decoration, all of which are new products. In the future, the Company will continue to develop diversified products following the trend of EVA foam materials.

(5) Advantages and disadvantages to future development and their countermeasures

A. Advantages

(A) The rapid development of economic activities drives the growth of demand

The income of urban residents in China has gradually increased since 1995, and the average annual disposable income of urban residents has increased from RMB 15,781 in the early period to RMB 28,228 in 2018. The rapid improvement in living standards and the increase in purchasing power in China have driven the continuous growth in domestic demand. In this context, the demand for necessities of life in the Chinese market will continue to rise, and the wide application of EVA foam materials in various fields concerning people’s livelihood will provide new momentum for EVA foam market.

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• (B) The industry development conforms to the trend of environmental protection and the development of industrial policies

With the rising of environmental awareness and energy prices, energy conservation and carbon reduction have become an important issue of environmental protection in most countries. To improve the utilization rate of resources and protect and improve the environment, the Chinese government has promulgated several laws, such as the Circular Economy Promotion Law . With the rapid development of economy, the demand for plastic products have increased dramatically, which results in a sharp increase in waste plastics. As plastics cannot be degraded in nature, the conflict between environmental pollution and economic development has been increasingly severe. The Company’s unique recycling process of waste plastics can produce EVA foam materials by extracting organics from waste plastics, which can not only cut the cost of raw materials and reduce the pressure of environmental protection, but also contribute to image enhancement and sustainable operation.

• (C) Geographical advantages promote industrial clustering

China’s EVA foam materials are mostly produced in southeast coastal provinces such as Fujian and Guangdong, and the distribution of their downstream industries is relatively concentrated. For example, shoes manufacturers are concentrated in Jinjiang of Fujian and Guangdong and luggage manufacturers are concentrated in Huadu, Guangdong and Quanzhou, Fujian. Industrial clustering will help to develop new customers and reduce logistics costs. The Company’s production base is located in Jinjiang, Fujian, which is the main shoemaking city in China known as China’s shoe capital. By taking advantage of the geographical location, the Company can supply goods to downstream customers in time.

• (D) The performance advantages of EVA foam materials contribute to the development of more new fields

As EVA foam materials have outstanding versatility and can replace other foam materials, new fields of EVA foam materials can be developed through technical innovation. The exhibits on international plastics exhibitions over the years reflect the future industrial and consumer applications of plastic products, including the design of future automobile or kitchen & home supplies, latest commercial breakthroughs in medical equipment, electronic packaging materials with electromagnetic shielding properties, building insulation materials and rubber substitutes, etc. Therefore, there is a great potential for the development of new fields of EVA foam materials.

• (E) The trader system covers the whole of China, thus accelerating market development and reducing costs

In the face of increasingly fierce price competition in the Chinese market, many manufacturers cut prices to acquire orders. How to maintain gross profits in response to this trend is essential for the Company’s profitability. In addition, the vast territory of China also brings a great challenge to the construction of general marketing channels, and the different customs in different provinces of China make it difficult to establish a unified marketing model and control marketing costs. In this

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context, enterprises which sell goods as traders emerge. As intermediaries, traders generally have a better understanding of customer demand than manufactures, and know manufacturers’ conditions and coordination better than customers. Relying on the role of traders in exploring the demand for commodities all over China, manufacturers engaged in the production of raw materials can save the cost and manpower for channel construction and quickly respond to market opportunities. After years of product R&D and market expansion since its establishment, the Group has developed a complete series of foam products. In addition, the Group has been engaged in the sales of EVA foam materials for more than 10 years. Hence, it can have a good understanding of market changes and product demands. Through the cooperation with traders all over China, the Group has established a mutually supportive and prosperous relationship.

B. Disadvantages and countermeasures

(A) China’s policy of prohibiting the import of waste plastics

Since 2018, the Chinese government has carried out an Implementation Plan for Prohibiting the Entry of Foreign Garbage and Advancing the Reform of the Solid Waste Import Administration System . As the Company’s EVA waste plastics are mainly purchased from large foreign manufacturers through traders, the raw materials are now in short supply due to the influence of the waste plastics import policy.

Countermeasure:

Actively seek for domestic sources of waste plastics, develop overseas strategic partners, and continuously evaluate the plans for setting up factories in foreign countries such as the United States, Japan and Australia, to secure stable supply of recycled plastics in the future.

(B) Rising labor costs

At present, some processing stages of EVA foam industry are still reliant on manual operation. China’s “13[th] Five-Year” Plan which continues the spirit of “12[th] Five-Year” Plan aims at improving income distribution and increasing the income of urban and rural residents (especially low- and middle-income earners). Meanwhile, the wage adjustment plans and income distribution reforms of various provinces (cities) in Chinese Mainland also put forward the normal growth mechanism, payment protection mechanism, collective wage negotiation system and minimum wage growth mechanism. According to the information published by the Ministry of Human Resources and Social Security of China, the average annual salary of employees in the urban private sector was RMB 53,604 in 2019, an increase of RMB 4,069 or 8.21% compared with RMB 49,535 in 2018. As the labor costs in China rise year by year, the production costs of EVA foam industry in China will not decline significantly.

Countermeasure:

Continuously improve the manufacturing procedure and production process and move towards automatic production so as to improve the production efficiency and reduce the dependence on labor; raise the utilization efficiency of human resources through improvement of R&D and design ability, production process design and employee education and training, so as to reduce the demand for manpower in the process of production.

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• (II) Main uses and production process of products

• (1) Important uses of main products:

• A. Sole sheets: widely applied for soles, insoles and linings functional shoes.

• B. Luggage sheets: high-quality linings for such products as draw-bar boxes, suitcases and laptop bags.

• C. Ordinary sheets: used in the fields of handicrafts, toys, industrial product packaging, sports and leisure.

• D. Rubber foams; applied in industrial products and sports equipment.

• E. Highly processed products: downstream terminal products (mainly puzzle mats).

• F. Other special sheets: the scope of application is not limited to special industries, e.g., building materials and electronic packaging materials.

• (2) Production process of EVA foam materials

After being screened, crushed, granulated and dried, raw materials are proportionally added with special components and then foamed upon polymerization at high temperature and high pressure. The flow chart of the Company’s production process is as follows:

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==> picture [767 x 236] intentionally omitted <==

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

Raw
Recycled waste materials
films
Recycled Connecting
materials
Secondary
foaming Inspection Delivery
Recycled waste Recycled Slice and into
foams scraps packaging warehous
Primary
foaming
Additives
Filler
Cleaning Broken
Semi-finished sheets
Extruding and granulating
Dosing Sheeting
Open mixing
Internal mixing
Deep processing
----- End of picture text -----

92

(III) Supply of main raw materials

(1) Supply situation

The Company’s major products are EVA foam materials which are made of such main raw materials as EVA, recycled scraps, recycled LDPE, LDPE and waste PE. In order to maintain good quality, high yield and stable supply and to control costs, the Company has established and maintained long-term good relationship with suppliers. Up to now, there has been no production suspension due to insufficient supply of raw materials.

(2) Main raw material suppliers

Main raw materials	Main suppliers	Supply
EVA	Lianbao Trading Co., Ltd., Aperfect Cloud Data Innovative Information Technology Co., Ltd.	Stable
EVA scraps	Quanzhou Fulv Shoes Co., Ltd.	Stable
Recycled LDPE	Qingyouqing Import & Export Trading Co., Ltd.	Stable
LDPE	Jinhui Technology Materials Co., Ltd.	Stable

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• (IV) List of customers accounting for more than 10% of the gross purchases (sales) in the past two years

• Information of main customers in the past two years

Unit: *10[3] in New Taiwan Currency

	2019	2019	2019	2019	2020	2020	2020	2020	Q1 of 2021	Q1 of 2021	Q1 of 2021	Q1 of 2021
Item	Name	Amount	Proportion in net sales of the whole year (%)	Relationship with the issuer	Name	Amount	Proportion in net sales of the whole year (%)	Relationship with the issuer	Name	Amount	Proportion in net sales of Q1 (%)	Relationship with the issuer
1	Shengyu	67,801	5.39	－	Shengyu	64,316	6.38	－	Shengyu	20,205	7.63	－
2	Jiguang	55,879	4.44	－	Jiguang	49,668	4.93	－	Herui	10,233	3.86	－
3	Datong	36,268	2.88	－	Zhenhua	44,869	4.45	－	Kangding	6,862	2.59	－
4	Herui	32,136	2.55	－	Herui	26,196	2.60	－	Shunchang	6,801	2.57	－
5	Nantong	30,910	2.46	－	Kangding	25,225	2.50	－	Huisheng	6,530	2.46	－
6	Kangding	25,171	2.00	－	Duopu	19,393	1.92	－	Zhenhua	6,012	2.27	－
7	Ruili	22,434	1.78	－	Changzhou Huahang	16,154	1.60	－	Hongyi	4,796	1.81	－
8	Duopu	21,115	1.68	－	Nantong	13,846	1.37	－	Hueida	4,203	1.59	－
9	Yanshun	17,495	1.39	－	Jinyu	13,559	1.34	－	Senmei	4,103	1.55	－
10	Tingfeng	16,171	1.29	－	Yiweiai	12,201	1.21	－	Zhuoxin	4,091	1.54	－
	Others	933,020	74.14	－	Others	722,730	71.70	－	Others	191,107	72.13	－
	Net sales	1,258,400	100.00		Net sales	1,008,157	100.00		Net sales	264,943	100.00

All changes are made by the Company based on the market trend, product demand, industry prospect, R&D technology, sales profit and customer contract. In the past two years, there was no customer accounting for more than 10% of the total sales.

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2. Information of main suppliers in the past two years

Unit: NT$1,000

			2019				2020			Q1 of 2021	Q1 of 2021
Item	Name	Amount	Proportion in net purchases of the wholeyear(%)	Relationship with the issuer	Name	Amount	Proportion in net purchases of the wholeyear(%)	Relationship with the issuer	Name	Amount	Proportion in net purchases ofQ1(%)	Relationship with the issuer
1	Qingyouqing	173,837	13.88	－	Lianbao	141,082	14.26	－	DRY-Port	43,339	21.01	－
2	Lianbao	156,977	12.53	－	Aperfect Cloud Data	49,357	4.99	－	Lianbao	26,641	12.92	－
3	Baimu	56,976	4.55	－	Qingyouqing	44,729	4.52	－	Aperfect Cloud Data	13,747	6.67	－
4	Jinhui	55,021	4.39	－	Risheng Hi-tech	38,539	3.90	－	Risheng Hi-tech	9,925	4.81	－
5	SINOPEC Shanghai	34,909	2.79	－	Jinhui	32,492	3.28	－	Qingyouqing	9,214	4.47	－
6	Jinshunyuan	34,021	2.72	－	Juncheng	30,671	3.10	－	Kaichenghong	8,233	3.99	－
7	Jindexin	29,439	2.35	－	Xuda	30,190	3.05	－	SINOPEC Shanghai	6,130	2.97	－
8	Risheng Hi-tech	29,110	2.32	－	Fengbang	23,170	2.35	－	Jinhui	6,025	2.92	－
9	Ailunsi	20,432	1.63	－	DRY-Port	15,449	1.56	－	Yixin Manufacturing	4,895	2.37	－
10	Gewang	17,664	1.41	－	SINOPEC Shanghai	14,351	1.45	－	Xuda	4,402	2.13	－
	Others	644,447	51.43	－	Others	569,221	57.54	－	Others	73,702	35.74	－
	Netpurchases	1,252,833	100.00		Netpurchases	989,251	100.00		Netpurchases	206,253	100.00

All changes are made by the Company based on the market trend, product demand, industry prospect, R&D technology, sales profit and customer contract.

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(V) Output and output value in the past two years:

Unit: M[3] , *10[3] in New Taiwan Currency

Annual output/output value Major products		2019			2020
	Production capacity	Output	Output value	Production capacity	Output	Output value
Sole sheets	7,000	792	11,264	7,000	429	10,347
Bagsheets	133,000	45,888	398,051	133,000	34,897	192,794
Special sheets	100,500	68,898	307,459	85,000	59,343	267,799
Common sheets	244,600	77,138	367,489	244,600	40,900	198,169
High elasticityformed material	28,000	8,362	30,840	28,000	6,063	24,440
Floor mats	70,900	14,129	81,819	87,000	30,949	147,497
Other(note)	49,600	26,902	137,987	49,000	23,033	95,708
Total	633,600	242,109	1,334,909	633,600	195,614	936,754

Note: Others include rubber foams, antistatic foams, flame-retardant foams, slippers and finished shoes. Among them, slippers are not calculated in cubic meters, and the production capacity, output and output value of finished shoes are not listed because finished shoes are outsourced.

Change analysis: The Company’s total production capacity in the past two years is calculated based on 48 foaming units, and the differences among the total production capacity, total output and total output value depend on the adjustment of the overall product mixes.

(VI) Sales volumes and amounts in the past two years:

Unit: M[3] , *10[3] in New Taiwan Currency

Annual sales volume/value Major products	2019	2019	2019		2020	2020	2020
	Domestic sales		Export	sales	Domestic sales		Export	sales
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Bag sheets	45,067	211,872	－	－	26,395	192,794	－	－
Common sheets	78,907	326,446	－	－	41,833	198,169	－	－
Special sheets	68,933	318,295	－	－	54,846	267,799	－	－
Sole sheets	685	6,959	－	－	865	10,347	－	－
Highly foamed material	26,124	82,296	－	－	22,869	74,877	－	－
High elasticity formed material	8,436	37,620	－	－	5,595	24,440	－	－
Floor mats	15,351	91,466	－	－	29,190	147,497	－	－
Other (note)	1,351	183,446	－	－	284	92,234	－	－
Total	244,854	1,258,400	－	－	181,877	1,008,157	－	－

Note: Others include the income from plastic foams, antistatic foams, flame-retardant foams, shippers, finished shoes, raw granulated materials and raw materials and the rental income. Specifically, the rental income was RMB 17,807,000 in 2019 and RMB 18,967,000 in 2020.

Change analysis: The total sales value in 2020 was about 19.89% lower than that in 2019. It is mainly because that under the outbreak of COVID-19 and the economic downturn in China, the downstream markets of plasticizer industry suffered from sluggish domestic demand and declining export orders, and the EVA foam market in the downstream of plasticizer industry was also affected.

• 96 -

III. Information on employees in the recent two years and as of the date of printing of the annual report

Year		2019	2020	2021Q1
Number of employees	Directly	468	421	460
	Indirectly	321	358	356
	Total	789	779	816
Average age		41.56	43.87	43.28
Average length of service(years)		7.65	6.70	5.69
Educational background (%)	Master	0.19	0.20	0.19
	Junior college	23.37	25.84	24.49
	High school	49.24	45.76	46.20
	Below high school graduate	27.20	28.20	29.12

IV. Environmental protection expenditure

1. Application for pollution facility permit or pollutant emission permit, payment of pollution prevention and control expenses and establishment of dedicated units for environmental protection according to law:

The Company mainly uses EVA foam materials regenerated and produced from EVA raw materials and recycled plastics. As the recycled plastics must be cleaned during the manufacturing process, the water of the cleaning system is recycled without discharging sewage. For the gas generated during the manufacturing process, the Company uses gas collecting equipment to centrally process the waste gas before discharging. The Company has obtained the pollution emission permit from the place of operation, and its gas emissions are still in compliance with the regulations. In response to the government’s call for use of clean energy, the Company replaced the coal-fired boiler with natural gas boiler in 2019, effectively reducing the emission of SO2.

1. The Company’s investment in major facilities for environmental pollution prevention and control, and their uses and possible benefits:

and possible benefits:
	Details of Pollution Prevention and Control Facilities Unit: Unit:NT$1,000;March31,2021
Equipment name		Quantity	Date of acquisition:	Investment cost	Undepreciated balance	Uses and expected benefits
Boiler dust remover		3	2006/09/18	385	36	Effectively reduce the suspended particles in smoke and dust
Boiler flue gas desulfurizer		1	2010/06/01	515	246	Remove SO2 in boiler exhaust, thus effectively reducingthe emission of SO2
Waste gas treatment engineering (1)		1	2013/08/12	2,622	320	Purify the waste gas from workshops
Wastewater treatment pond		1	2014/05/23	3,049	1,818	Recycle cleaning wastewater and cooling wastewater to meet the emission standard
Waste gas treatment engineering (2)		1	2014/11/06	7,862	1,178	Purify the waste gas from workshops

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Equipment name	Quantity	Date of acquisition:	Investment cost	Undepreciated balance	Uses and expected benefits
Wastewater treatment engineering	1	2015/07/29	80,990	51,752	Recycle cleaning wastewater and cooling wastewater to meet the emission standard
Natural gas boiler	2	2019/07/22	4,996	4,406	Provide steam and heat in lieu of the original goal-fired boiler,and eliminate SO2.

1. The Company’s pollution dispute in the process of environmental pollution prevention and control in the past two years and up to the date of the Report (if any, the settlement process should be explained): None.

2. The Company’s losses (including compensations) and penalties arising from environmental pollution in the past two years and up to the date of the Report, as well as the future countermeasures (including improvement measures) and possible expenses (including the estimated losses, penalties and compensations that may arise if no countermeasure is taken. The reason should be explained if the estimates cannot be provided): None.

3. The Company’s current pollution, the impact of pollution improvement on the Company’s earnings, competitive position and capital expenditure, as well as the Company’s expected major capital expenditure on environmental protection in the next two years: None.

V. Labor relations

1. The Company’s employee benefit plans, further education system, training system and retirement system and their implementation, as well as labor agreements and measures for safeguarding employees’ interests:

2. (1) Employee benefit plans and their implementation

The Company provides statutory benefits according to local laws and regulations, and has a special department responsible for planning and promoting employee benefits, which advances the benign development of human resources: The Company’s existing benefits:

• A. Insurance benefits: medical insurance, basic endowment insurance, unemployment insurance, work-related injury insurance, maternity insurance and housing provident fund.

B. Other benefits:

• a. Provide complete living and entertainment facilities such as staff dormitory, sports ground and cultural activity center in the plant area, to create a comfortable and pleasant working and living environment for employees.

• b. Set up a kindergarten in the plant area and provide school bus service for employees’ children attending primary schools, to solve employees’ worries about children’s education.

• c. Hold variety shows and ball games to unite employees and enrich their leisure activities.

C. Trade union: The Company’s employees have set up a trade union according to local laws and regulations. The Company pays labor union expenditure in time to organize union activities and provide other benefits.

• (2) Further education and training of employees

The Company’s measures for employee education and training mainly include:

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A. Pre-job training:

B. On-the-job training: internal training and external training. Internal training includes application and training of office software, promotion and improvement of lean production, optimization of corporate structure and occupational health and safety training; external training includes arranging for middle and senior managers to participate in professional skill training sponsored by local governments and study management, finance and automation in colleges and universities, and organizing visits to outstanding enterprises all over China.

(3) Retirement system and its implementation

Sansda (Fujian) Plastics Co., Ltd. and Sansda (Jiangsu) Environmental Technology Co., Ltd., which are the operating entities of the Company, pay 16% and 8% of pensions respectively to the special account of the local financial department every month, in accordance with the Regulations on Basic Endowment Insurance for Employees of Enterprises published by the local government. According to the local social insurance policy, endowment insurance is included in the social insurances (including medical insurance, maternity insurance, endowment insurance, work-related injury insurance and unemployment insurance). Therefore, once the formalities for social insurances of employees are completed, the Company will be deemed to have begun to fulfill its obligation of endowment insurances.

An employee who reaches the statutory age for retirement should be entitled to the basic endowment insurance benefits, provided that he has contributed premiums for a cumulative period of 15 years or more. The pension of an employee who has joined in work since January 1, 1993 consists of two parts: pension= basic pension + pension in individual account. Specifically, the pension in individual account = deposit amount in individual account ÷ months of pension; basic pension= average monthly salary of on-the-job workers in the whole province in the previous year (1+ own average payment index)÷2× years of payment ×1%.

The Company holds a farewell party for retirees in batches, and makes annual condolence plans. Retired middle and senior managers may be appointed as special consultants to provide necessary services for the operation and development of the Company.

(4) Labor relation coordination

The Company has always attached great importance to employees’ interests and harmonious labor relations. Besides, the Company places a high value on employees’ opinions and suggestions. Employees are allowed to communicate directly with the human resource department or appropriate senior managers to maintain good relations. As a result, no major labor disputes have occurred so far.

(5) Protective measures for working environment and personal safety

The Company has passed the certification of ISO45001: 2018 occupational health and safety management system, and its work flow has passed the certification of “Work Safety Standardization” organized by the local government, striving to maintain a healthy working environment for employees and safeguard work safety of employees.

The Company pays much attention to safety and health management, as follows:

• A. Provide employees with specialized labor protection appliances such as safety helmets, masks, special uniforms and rain boots, to safeguard the health and safety of employees.

• B. Regularly revise the safety and health rules, and formulate the standard operating procedures of all

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machinery and equipment to ensure standard operation by employees.

• C. Carry out a spot check for machinery and equipment according to rules, and apply to the authority in charge of dangerous machinery and equipment for regular inspection every year to ensure the safe operation of machinery and equipment.

• D. Perform 5S management to improve the working environment and efficiency.

• E. Provide necessary education and training for new employees, equipment operators and special operation personnel according to law, and urge them to obtain relevant certificates and permits.

• F. Irregularly arrange for employees to receive medical examinations and make health files for employees to serve all employees.

• G. Set up a perfect fire control system, and regularly inspect and report the system according to fire laws and regulations.

• (6) Measures for safeguarding employees’ interests

The Company has various internal controls and management measures, which expressly specify the rights, obligations and benefits of employees, and regularly reviews the benefit items to safeguard employees’ interests.

1. The Company’s losses arising from labor disputes in the past two years and up to the date of the Report, as well as the estimates of current and future possible losses and relevant countermeasures (the reasons should be explained if the estimates cannot be provided):

The Company attaches great importance to harmonious labor relations. As a result, there has been no loss caused by labor disputes in the past two years and up to the date of the Report.

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VI. Material contracts

Nature of contract	Interested parties	Start and end time	Main contents	Limitations
Loan contract	Sansda (Jiangsu) Environmental Technology Co., Ltd. Jurong Sub-branch of the Industrial and Commercial Bank of China	2020.06.01~2021.06.01	Increase working capital and purchase funds	None
Loan contract	Sansda (Jiangsu) Environmental Technology Co., Ltd. Jurong Sub-branch of the Industrial and Commercial Bank of China	2020.07.06~2021.07.05	Increase working capital and purchase funds	None
Loan contract	Sansda (Jiangsu) Environmental Technology Co., Ltd. Jurong Sub-branch of the Industrial and Commercial Bank of China	2020.08.10~2021.08.10	Increase working capital and purchase funds	None
Loan contract	Sansda (Jiangsu) Environmental Technology Co., Ltd. Jurong Sub-branch of the Industrial and Commercial Bank of China	2020.11.24~2021.11.19	Increase working capital and purchase funds	None
Loan contract	Sansda (Jiangsu) Environmental Technology Co., Ltd. Jurong Sub-branch of the Industrial and Commercial Bank of China	2021.01.29~2022.01.28	Increase working capital and purchase funds	None
Loan contract	Sansda (Jiangsu) Environmental Technology Co., Ltd. Xinshiji Sub-branch of Jiangsu Jurong Rural Commercial Bank	2021.03.31~2024.03.24	Increase working capital and purchase funds	None
Transfer of land use right	Sansda (Fujian) Plastics Co., Ltd. Jinjiang Bureau of Land and Resources	2006.12.30~2056.12.30	Land use right of the industrial land located in Fangjiao Village, Chendai Town, Jinjiang City	None
Transfer of land use right	Sansda (Fujian) Plastics Co., Ltd. Jinjiang Bureau of Land and Resources	2009.07.03~2059.07.03	Land use right of the industrial land located in Fangjiao Village, Chendai Town, Jinjiang City	None
Transfer of land use right	Sansda (Fujian) Plastics Co., Ltd. Villagers’ Committee of Jiangtou Hui Nationality Village, Chendai Town, Jinjiang City	2011.09.16~2061.09.16	Land use right of the industrial land located in Jiangtou Village, Chendai Town, Jinjiang City	None
Transfer of land use right	Sansda (Jiangsu) Environmental Technology Co., Ltd. Jiangsu Jurong Municipal Bureau of Land and Resources	2012.09.18~2062.06.06	Land use right of the industrial land located in Zhaili Community, Jurong Development Zone	None
Transfer of land use right	Sansda (Jiangsu) Environmental Technology Co., Ltd. Jiangsu Jurong Municipal Bureau of Land and Resources	2013.09.09~2063.07.10	Land use right of the industrial land located in Zhaili Community, Jurong Development Zone	None
Transfer of land use right	Sansda (Jiangsu) Environmental Technology Co., Ltd. Jiangsu Jurong Municipal Bureau of Land and Resources	2013.09.24~2063.08.09	Land use right of the industrial land located in Zhaili Community, Jurong Development Zone	None
Transfer of land use right	Sansda (Jiangsu) Environmental Technology Co., Ltd. Jiangsu Jurong Municipal Bureau of Land and Resources	2014.01.13~2063.11.20	Land use right of the industrial land located in Zhaili Community, Jurong Development Zone	None
Transfer of land use right	Sansda (Jiangsu) Environmental Technology Co., Ltd. Jiangsu Jurong Municipal Bureau of Land and Resources	2015.08.25~2065.08.25	Land use right of the industrial land located in Zhaili Community, Jurong Development Zone	None

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VI. Financial overview

I. Summarized balance sheet and statement of comprehensive income in the past five years

• (I) Condensed Balance Sheet—International Financial Reporting Standards

(I) Condensed Balance Sheet—Internat	(I) Condensed Balance Sheet—Internat	ional Financial Reporting Standards	ional Financial Reporting Standards	ional Financial Reporting Standards	ional Financial Reporting Standards	ional Financial Reporting Standards	ional Financial Reporting Standards
		Unit: *103in New Taiwan Currency
Year Item		Financial information in the past fiveyears					2021 Q1 (Note 1)
		2016 (Note 1)	2017 (Note 1)	2018 (Note 1)	2019 (Note 1)	2020 (Note 1)
Current assets		4,297,561	4,357,056	3,629,074	3,212,035	3,193,602	3,171,614
Property, plant and equipment		5,497,490	5,253,895	3,668,175	3,310,861	2,415,261	2,369,690
Intangible assets		823	438	61	－	－	－
Other assets		1,294,299	1,211,954	1,138,161	1,063,772	924,003	903,260
Total assets		11,090,173	10,823,343	8,435,471	7,586,668	6,532,866	6,444,564
Current liabilities	Before distribution	1,178,858	823,770	508,791	529,092	675,559	626,599
	After distribution	1,180,731	824,544	508,791	529,092	675,559	626,599
Non-current liabilities		65,732	65,020	63,598	61,321	62,317	178,928
Total liabilities	Before distribution	1,244,590	888,790	572,389	590,413	737,876	805,527
	After distribution	1,246,463	889,564	572,389	590,413	737,876	805,527
Equity attributable to owners of the parent		9,845,583	9,934,553	7,863,082	6,996,255	5,794,990	5,639,037
Share capital		2,653,681	2,677,761	2,689,547	2,689,547	2,689,547	2,689,547
Stock capital received	in advance	－	－	－	－	－	－
Capital reserves		2,955,669	2,960,471	2,982,534	3,014,618	3,028,767	3,030,063
Retained surplus	Before distribution	4,383,645	4,547,267	2,651,101	2,009,075	696,273	590,592
	After distribution	4,364,914	4,539,527	2,651,101	2,009,075	696,273	590,592
Other interests		－	－	－	－	－	－
Treasury stock		－	－	－	－	－	－
Non-controlling interests		－	－	－	－	－	－
Cumulative translation adjustment		(147,412)	(250,946)	(460,100)	(716,985)	(619,597)	(671,565)
Total equity	Before distribution	9,845,583	9,934,553	7,863,082	6,996,255	5,794,990	5,639,037
	After distribution	9,843,710	9,933,779	7,863,082	6,996,255	5,794,990	5,639,037

Note 1: the consolidated financial information from 2016 to 2020 has been audited and certified by accountants, while the consolidated financial information of 2021Q1 has only been reviewed by accountants.

• 102 -

(II) Condensed Consolidated Income Statement—International Financial Reporting Standards Unit: *10[3] in New Taiwan Currency

Year Item	Financial information in the past five years					2021 Q1 (Note)
	2016 (Note)	2017 (Note)	2018 (Note)	2019 (Note)	2020 (Note)
Operating income	5,779,198	4,588,271	1,464,797	1,258,400	1,008,157	264,943
Gross operating profit (loss)	1,228,371	691,365	(776,288)	(268,622)	(478,162)	(30,097)
Net operating profit (loss)	703,034	214,961	(1,820,362)	(662,961)	(1,349,250)	(111,359)
Non-operating income and expenditure	(86,859)	46,945	(58,491)	20,935	36,448	6,078
Net profit (loss) before tax	616,175	261,906	(1,878,853)	(642,026)	(1,312,802)	(105,281)
Net profit (loss) from continuing operations in the current period	406,407	182,353	(1,888,426)	(642,026)	(1,312,802)	(105,281)
Loss from discontinued operations	－	－	－	－	－	－
Net profit (loss) of the current period	406,407	182,353	(1,888,426)	(642,026)	(1,312,802)	(105,281)
Other comprehensive income (loss) of the current period (net amount after tax)	(800,801)	(103,534)	(209,154)	(256,885)	97,388	(51,968)
Total comprehensive income (loss) of the current period	(394,394)	78,819	(2,097,580)	(898,911)	(1,215,414)	(157,249)
Net profit (loss) attributable to owners of the parent	406,407	182,353	(1,888,426)	(642,026)	(1,312,802)	(105,281)
Net profit attributable to non-controlling interests	－	－	－	－	－	－
Total comprehensive income (loss) attributable to owners of the parent	(394,394)	78,819	(2,097,580)	(898,911)	(1,215,414)	(157,249)
Total comprehensive income (loss) attributable to non-controlling interests	－	－	－	－	－	－
Earnings (losses) per share	1.53	0.68	(7.02)	(2.39)	(4.88)	(0.39)

Note: The consolidated financial information from 2016 to 2020 has been audited and certified by accountants, while the consolidated financial information of 2021 Q1 has only been reviewed by accountants.

(III) Names and audit opinions of certified accountants in the past five years

Year	Name of Certified Public Accountant	Opinion
2016	Xu Ruixuan and Jiang Jialing	Unqualified
2017	Xu Ruixuan and Jiang Jialing	Unqualified
2018	Wu Qiuyan, Jiang Jialing	Unqualified opinion
2019	Wu Qiuyan, Jiang Jialing	Unqualified opinion
2020	Wu Qiuyan, Jiang Jialing	Unqualified opinion

• 103 -

II. Financial analysis in the past five years—international financial reporting standards

II. Financial analysis in the past five years—	II. Financial analysis in the past five years—	international financial reporting standards	international financial reporting standards	international financial reporting standards	international financial reporting standards	international financial reporting standards
Year Analyzed items		Financial analysis in the past five years					Current year ended March 31, 2021
		2016	2017	2018	2019	2020
Financial structure (%)	Debt-to-asset ratio	11.22	8.21	6.79	7.78	11.29	12.50
	Ratio of long-term funds to property, plant and equipment	180.29	190.33	216.09	213.16	242.51	245.52
Solvency (%)	Liquidityratio	364.55	528.92	713.27	607.08	472.73	506.16
	Quick ratio	332.13	480.88	657.44	552.35	430.02	451.07
	Times interest earned	93.97	29.38	(200.83)	(69.42)	(106.77)	(47.41)
Operation capacity	Receivables turnover(times)	3.49	3.60	2.29	4.56	3.46	4.20
	Days sales outstanding	104	101	159	80	105	87
	Turnover rate of inventory (time)	14.73	12.75	8.20	6.26	5.56	4.06
	Payables turnover(times)	7.29	6.49	5.95	6.05	5.86	5.94
	Days sales in inventory	24	28	44	58	66	90
	Turnover of property, plant and equipment(times)	1.00	0.85	0.33	0.36	0.35	0.44
	Turnover rate of total assets (time)	0.52	0.42	0.15	0.16	0.14	0.16
Profitability	Rate of return on assets(%)	3.67	1.73	(19.54)	(7.67)	(18.25)	(6.39)
	Return on equity (%)	4.03	1.84	(21.22)	(7.58)	(19.22)	(7.37)
	Ratio of net profit (loss) before tax topaid-in capital(%)	23.22	9.78	(69.86)	(23.87)	(48.81)	(3.91)
	Netprofit(loss)ratio(%)	7.03	3.97	(128.92)	(51.02)	(130.22)	(39.74)
	Earnings (losses) per share (NT$)	1.53	0.68	(7.02)	(2.39)	(4.88)	(0.39)
Cash flow	Cash flow ratio(%)	101.85	88.62	66.06	(64.40)	(31.90)	(37.18)
	Cash flow adequacyratio(%)	83.73	113.10	147.12	149.37	234.57	74.64
	Cash reinvestment ratio(%)	10.05	6.31	3.07	(3.35)	(2.16)	(2.33)
Leverage	Operatingleverage	1.95	2.83	0.80	0.55	0.78	0.59
	Financial leverage	1.01	1.04	0.99	0.99	0.99	0.98
Analysis on the reasons for the changes in financial ratios exceeding 20% in the past two years: 1. Debt-to-asset ratio, liquidity ratio and quick ratio: mainly due to the increased current liabilities caused by the increase of other short-term loans in 2020. 2. Interest coverage ratio: mainly due to the increase of operating loss in 2020 compared with that in 2019 3. Receivables turnover and days sales outstanding: mainly due to the decrease of average receivables in 2020. 4. Return on assets, return on equity, ratio of net profit (loss) before tax to paid-in capital, net profit (loss) ratio and earnings (losses) per share: mainly due to the increase of operating loss in 2020 compared with that in 2019 5. Cash flow ratio, cash flow adequacy ratio and cash reinvestment ratio: mainly due to operating losses in 2020, which reduced cash inflows from operating activities in the past five years. 6. Operating leverage: mainly due to the increase in operating costs and expenses in 2020.

1. Debt-to-asset ratio, liquidity ratio and quick ratio: mainly due to the increased current liabilities caused by the increase of other short-term loans in 2020.

2. Return on assets, return on equity, ratio of net profit (loss) before tax to paid-in capital, net profit (loss) ratio and earnings (losses) per share: mainly due to the increase of operating loss in 2020 compared with that in 2019

3. Cash flow ratio, cash flow adequacy ratio and cash reinvestment ratio: mainly due to operating losses in 2020, which reduced cash inflows from operating activities in the past five years.

Note: The calculation formula of each financial ratio is as follows:

1. Financial structure:

2. 104 -

(1) Debt-to-asset ratio = total liabilities/total assets

(2) Ratio of long-term funds to property, plant and equipment = (total shareholders’ equity + non-current liabilities)/net property, plant and equipment

1. Solvency:

(1) Liquidity ratio= current assets/current liabilities

(2) Quick ratio= (current assets− inventory−prepaid expenses)/current liabilities

(3) Interest coverage ratio= net profit before income tax and interest expense / current interest expense

3. Operation capacity:

(1) Receivables (including accounts receivable and notes receivable arising from operating activities) turnover = net sales/average receivables (including accounts receivable and notes receivable arising from operating activities) balance in each period

(2) Days sales outstanding= 365/receivables turnover

(3) Inventory turnover= cost of goods sold/average inventory

(4) Payables (including accounts payable and notes payable arising from operating activities) turnover = cost of goods sold/average payables (including accounts payable and notes payable arising from operating activities) balance in each period

(5) Days sales in inventory = 365/ inventory turnover

(6) Turnover of property, plant and equipment= net sales /average net property, plant and equipment

(7) Total assets turnover= net sales/average total assets

4. Profitability:

(1) Return on assets= (after-tax profit and loss + interest expense × (1- tax rate))/average total assets

(2) Return on stockholders’ equity= after-tax profit and loss/average net stockholders’ equity

(3) Ratio of net profit (loss) before tax to paid-in capital (%)= pre-tax profit and loss/paid-in capital

(4) Net profit (loss) ratio= after-tax profit and loss/ net sales

(5) Earnings (losses) per share = (profit and loss attributable to owners of the parent− preferred stock dividend)/weighted average number of stocks issued

5. Cash flow:

(1) Cash flow ratio= net cash flow from operating activities/ current liabilities

(2) Cash flow adequacy ratio =

Net cash flow from operating activities in the past five years/ (capital expenditure + increase in inventory + cash dividend) in the past five years

(3) Cash reinvestment ratio =

(Net cash flow from operating activities− cash dividend)/ (gross property, plant and equipment + long-term investment + other non-current assets + working capital)

6. Leverage:

• 105 -

• (1) Operating leverage= (net operating income – variable operating cost and expense)/ operating profit

• (2) Financial leverage = operating profit/ (operating income – interest expense)

Note 4: In use of the calculation formula for earnings per share mentioned above, the following matters shall be considered:

1. Calculation should be made on the basis of the weighted average number of common stocks, rather than the number of stocks issued by the end of the year.

2. If there is a cash capital increase or treasury stock trading, the circulation period should be considered in calculating the weighted average number of stocks.

3. If there is a conversion of surplus into capital or of capital reserve into capital, the earnings per share of previous years and semi-years should be adjusted retroactively in proportion to the capital increase, regardless of the issuance period of the capital increase.

4. If preferred stocks are non-convertible cumulative preferred stocks, the dividends of such stocks in the current year (whether distributed or not) should be deducted from the net profit after tax, or added to the net loss after tax. If preferred stocks are non-cumulative, the dividends of such stocks should be deducted from the net profit after tax (if any). In case of loss, no adjustment is required.

Note 5: In cash flow analysis, the following matters should be considered:

1. Net cash flow from operating activities refers to the net cash inflow from operating activities shown in the cash flow statement.

2. Capital expenditure refers to the annual cash outflow for capital investment.

3. Increase in inventory should be counted only when the ending balance is greater than the opening balance. If the inventory decreases at the end of the year, the increase in inventory should be zero.

4. Cash dividend should include the cash dividend of ordinary stocks and preferred stocks.

5. Gross property, plant and equipment refers to the total amount of property, plant and equipment before accumulated depreciation.

Note 6: The issuer should identify each operating cost and operating expense as fixed or variable by nature. In case of estimation or subjective judgment, it is necessary to maintain the rationality and consistency.

Note 7: If the Company’s stocks have no par value, or the par value per share is not NT$ 10, the above calculations involving the ratio of paid-in capital should be based on the ratio of equity attributable to owners of the parent shown in the balance sheet.

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III. Audit committee’s report – financial statements for the fiscal year

Asia Plastic Recycling Holding Ltd.

Auditor’s report from the board of auditors

The Board of Directors prepared the Group’s business report, consolidated financial statements and loss-to-be-made-up statement for the year of 2020. The consolidated financial statements have been audited by auditors Wu Qiuyan and Jiang Jialing from Deloitte & Touche, with an auditor’s report issued. According to audit of the abovementioned business report, consolidated financial statements and loss-to-be-made-up statement by the board of auditors, no nonconformity has been identified. Hence this report is issued in accordance with the Item 5 of Article 14 of the Securities Exchange Act and Article 219 of the Company Law for your reference.

Yours sincerely

2021 Annual Shareholders’ Meeting of Asia Plastic Recycling Holding Ltd.

Asia Plastic Recycling Holding Limited Convener of the board of auditors: Li Junde

==> picture [123 x 59] intentionally omitted <==

March 22, 2021

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• IV. Financial statements for the most recent year: Please refer to Appendix I.

• V. Independent financial statements audited by CPA in the most recent year: The Company only issues the consolidated financial statements of parent company and subsidiaries, and thus it is inapplicable.

• VI. Difficulties in fund flow of the Company and its affiliates in recent years and as of the date of the annual report, and their impact on the Company’s financial position: None.

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VII. Review and analysis on financial conditions & performance, and risk issues

I. Financial status:

Financial status:	Financial status:	Financial status:
			Unit: *103in New Taiwan Currency
Year Item	End of 2019	End of 2020	Difference
			Amount	％
Current assets	3,212,035	3,193,602	(18,433)	(0.57)
Property, plant and equipment	3,455,834	2,415,261	(1,040,573)	(30.11)
Other assets (including intangible assets)	918,799	924,003	5,204	0.57
Total assets	7,586,668	6,532,866	(1,053,802)	(13.89)
Current liabilities	529,092	675,559	146,467	27.68
Long-term liabilities	61,321	62,317	996	1.62
Total liabilities	590,413	737,876	147,463	24.98
Share capital	2,688,547	2,688,547	─	─
Capital reserves	3,014,618	3,028,767	14,149	0.47
Retained surplus	2,009,075	696,273	(1,312,802)	(65.34)
Cumulative translation adjustment	(716,985)	(619,597)	97,388	(13.58)
Total stockholders’ equity	6,996,255	5,794,990	(1,201,265)	(17.17)
Analysis of the reasons for the changes in the two periods which exceed 20% and involve more than NT$ 10 million: 1. Property, plant and equipment: mainly due to the provision for impairment of assets in 2020. 2. Current liabilities and total liabilities: mainly due to the increase of short-term loans in 2020. 3. Retained earnings: mainly due to the operating loss in 2020.

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II. Financial performance:

1. Comparative analysis of financial performance

Unit: *10[3] in New Taiwan Currency

		Unit: *	103in New Taiwan Currency	103in New Taiwan Currency
Year Item	2019	2020	Difference
			Amount	%
Total operation revenues	1,258,400	1,008,157	(250,243)	(19.89)
Net Sales	1,258,400	1,008,157	(250,243)	(19.89)
Operating cost	1,527,022	1,486,319	(40,703)	(2.67)
Gross operating profit (loss)	(268,622)	(478,162)	(209,540)	78.01
Operating expense	394,339	871,088	476,749	120.90
Operating loss	(662,961)	(1,349,250)	(686,289)	103.52
Non-operating income and expenditure	20,935	36,448	15,513	74.10
Net pre-tax loss	(642,026)	(1,312,802)	(670,776)	104.48
Income taxes	─	─	─	─
Net loss of the current year	(642,026)	(1,312,802)	(670,776)	104.48
Analysis of the reasons for the changes in the two years which exceed 20% and involve more than NT$ 10 million: 1. Gross operating profit, operating expense and operating loss: mainly due to the decrease in gross operating profit and increase in operating expense arising from the provision for impairment of assets and the recognition of operating cost and operating expense in 2020, which was not the case in 2019. 2. Non-operating income and expenditure: mainly due to the construction investment subsidies obtained from the government in 2020, which was not the case in 2019. 3. Pre-tax net loss and net loss of the current year: mainly due to the increase of operating loss in the current year.

1. Expected sales volume and its basis, possible impact on the future financial affairs and response plan

The Company’s expected sales volume is an estimate of the market demand based on the sales performance in the previous years, and the annual delivery target is set on the basis of comprehensive consideration of the status of main raw materials, suppliers’ condition and delivery period.

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III. Cash flow:

1. Analysis of changes in cash flow:

Year Item	End of 2019	End of 2020	Ratio of increase (decrease) (%)
Cash flow ratio (%)	(64.40)	(31.90)	50.47
Cash flow adequacy ratio (%)	149.37	234.57	57.04
Cash reinvestment ratio (%)	(3.35)	(2.16)	35.52
Analysis of changes in increase/decrease rate: (1) Cash flow ratio: mainly due to the decrease of net cash inflow from operating activities arising from the decrease of operating income in the current year. (2) Cash reinvestment ratio: refer to item (1).

2. Analysis of cash liquidity in the coming year and plan for improvement of liquidity shortage: None.

IV. Influence of major capital expenditure items on financial business in the most recent year

The Company spent NT$ 18,094,000 on the purchase of property, plant and equipment in 2020, which are for the routine maintenance and replacement of the equipment of Fujian and Jiangsu subsidiaries as per the business requirements. According to the comparison between the turnover of property, plant and equipment and the total assets turnover during 2018-2020, the Company’s new property, plant and equipment can generate revenue, and there is no adverse impact on the Company due to the increase of capital expenditure.

Rate of turnover	2018	2019	2020
Turnover of property, plant and equipment (times)	0.33	0.36	0.35
Turnover rate of total assets (time)	0.15	0.16	0.14

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V. Re-investment analysis in the most recent year

1. Reinvestment policy

The Company is now a professional investment holding company. Its reinvestment policy mainly focuses on business investment, rather than investment in other industries. The reinvestment policy is generally implemented by the department in charge according to the internal control system of “investment cycle” and “procedures for acquisition or disposal of assets”. These measures and procedures should be discussed and approved by the Board of Directors.

2. Main reasons for profit or loss of reinvestment in recent years

Unit: *10[3] in New Taiwan Currency

		Unit: *103in New Taiwan Currency
Re-investment enterprise	Investment loss of 2020	Description
Sansda (BVI)	(1,289,454)	Recognized reinvestment loss of Sansda (HK) in the current year
Sansda (HK)	(1,289,454)	Recognized reinvestment loss of Sansda (Fujian), Sansda (Jiangsu) and Sansda (HK) Trading in the current year
Sansda (Fujian)	(1,054,561)	Mainly operating loss
Sansda (Jiangsu)	(185,050)	Mainly operating loss
Sansda (HK) Trading	(5,114)	Mainly operating loss

3. Investment plan for the coming year

The Company and its subsidiaries currently have no clear capital increase plan, and will, depending on the operating needs, make a capital increase plan in the future, which should be put into force after investment evaluation and relevant approval procedures of the Company.

4. Investment loss improvement plan

The Company’s original profit model is that a large number of recycled plastics are imported and processed into recycled LDPE particles, and the price difference between recycled materials and purchased materials is the Company’s advantage over its peers. However, since China banned the import of waste plastics in 2018, the shortage of recycled materials has caused a huge impact on the plastic recycling industry.

At present, the Company is facing the challenge of industrial policy change. In this context, the Company’s response policy is to continuously expand the sources of recycled waste plastics in China. In 2021, large petrochemical factories lowered new material prices under the pressure of destocking, and the market price of recycled materials also fell. Despite the relatively stable material prices, it is still difficult to acquire recycled LDPE materials of stable quality suitable for foaming. Hence, the Company still focuses on seeking long-term and stable material sources at home and abroad at the present stage to improve the gross profit structure.

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VI. Risk issues

(I) Impact of changes in interest rate and exchange rate and inflation on the Company’s profit and loss, and its countermeasures:

(1) Changes in interest rate

The Company’s interest expense in 2020 was NT$ 8,115,000, accounting for 0.62% of the current pre-tax loss. Hence, the changes in interest rate have little impact on the Company. If the interest rate is expected to fluctuate sharply in the future, and the Company needs to borrow money due to the increasing demand for funds, the Company will not only use the financing instruments in capital markets, but also keep an eye on the interest rate trend and borrow money at fixed or floating interest rates to avoid the risk of interest rate fluctuation.

(2) Exchange rate variation

The operating entities of the Company are Sansda (Fujian) and Sansda (Jiangsu) located in Chinese Mainland. As the target customers are manufacturers and traders in China, the Company’s products are all priced in RMB. In addition, EVA materials, a key raw material of the Company, are imported through traders, and paid in RMB. As a result, the receipts and payments in daily operation of Sansda (Fujian) and Sansda (Jiangsu) are almost in RMB. In addition, the applicant Asia Plastic adopts RMB as its bookkeeping base currency, thus a translation adjustment will be generated in the preparation of consolidated financial statements, which is not caused by the exchange gains and losses arising from transaction. Therefore, the changes in exchange rate have not yet had a significant impact on the Company’s income and profit.

At present, there is no significant risk of exchange rate fluctuation for the operating entities of the Company. However, Asia Plastic, which applies for listing in Taiwan, is very likely to face the risk of exchange rate (RMB to NT$) in the future, due to its distribution of dividends in New Taiwan dollars to domestic investors or conversion of raised funds in New Taiwan dollars into Renminbi. In the face of the risk, the Company’s Finance Department may take the following countermeasures:

Countermeasures:

• A. Maintain appropriate foreign exchange positions at appropriate time according to the exchange rate trend to meet the operating needs of the Company and its subsidiaries, and reduce the impact of exchange rate fluctuation on the Company’s profitability.

• B. Keep in close contact with major cooperative banks, and monitor the changes in foreign exchange market at any time, so that relevant personnel can have a full understanding of the trend of exchange rate changes, and make timely adjustments in response to unexpected change in payment currency.

(3) Inflation

The Company’s business is closely related to people’s livelihood consumption, and its principal market is in China. However, the Chinese economy is subject to the impact of global economy, especially in export-oriented people’s livelihood products. After the financial turmoil, the global economy has been in recovery, and governments around the world have created loose monetary conditions to activate the market, thus advancing the economic recovery. However, some countries have huge debts, which cannot be reduced and solved in the short term, and have to rely on international rescue. In this context, other countries tend to raise the interest rate to prevent the pressure of inflation caused by surplus idle funds, which holds back the economic recovery. Due to the continuous speculation in the real estate market and the pressure of inflation, the Chinese government has also begun to reduce money supply. This may

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affect the future economic growth and also people’s livelihood consumption, thus cramping the Company’s performance growth and profit margin. At present, the Company is constantly developing new products, and plans to actively explore new products to cope with the risks brought by future economic changes.

(II) Policies for high-risk and high-leverage investment, loan to others, endorsement and derivative trading, main reasons for profit or loss, and future countermeasures:

Upholding the philosophy of prudent and pragmatic operation, the Company has not made high-risk or high-leverage investment, nor has it lent money to others or provided guarantee for others. The Company has formulated the “Procedures for Lending Money to Others” and “Procedures for Endorsement and Guarantee”. In addition, the Company has formulated the “Procedures for Acquisition and Disposal of Assets” as the basis for risk control in forward exchange transactions that may be conducted in the future to avoid exchange rate risks. The procedure clearly specifies the procedures for trading of financial derivatives.

(III) Future R&D plan and expected R&D expense:

The Company has invested in the field of EVA plastic foam for a long time, and has made considerable achievements in improvement of production technology, output increase, quality optimization and diversification of products. So far, EVA plastic foam has been widely used in many fields, e.g., shoes, luggage, sports equipment, automobile interiors, toys, home supplies and even building materials. Undoubtedly, it is a kind of indispensable base material. However, this material has a variety of properties, and different products may have different requirements for its properties such as softness, plasticity, weight, density and wear resistance. Therefore, the manufacturing of EVA plastic foam requires a long time of experience accumulation and formula development to meet different requirements in different markets. Relying on the long-term technical progress and good cooperation with academic units, the Company has successively developed many products with special functions in recent years, such as antistatic sheet, high-foam sheet, fireproof sheet, heat-insulated sheet, sound-proof sheet and many other high-performance sheets, thus expanding the application of its products to various industries of livelihood products. In the future, the Company will, based on the production technology of special materials, further develop products which can be used as building materials for indoor partition and feature high hardness, light weight and good heat and fire insulation, so as to bring new possibilities into the construction market. Besides, the Company has also invested in the R&D of packaging materials for high-tech products, and applied special antistatic, fireproof and moisture-proof materials as packaging materials for the electronic technology industry to improve the safety in handling and storage. Meanwhile, the Company plans to develop the materials for industrial pipelines such as sand pumping and desilting pipelines. It is expected that the Company will invest more in R&D in the future to develop products with future potential.

New products planned to be developed:

(1) Anti-static and electromagnetic shielding EVA material

It is suitable for special working environment such as electronic, medical and testing rooms, and able to reduce the interference of radio electromagnetic waves and create a sound working environment.

(2) High-pressure-resistant and lightweight silt drainage pipe material for river channels

It is suitable for mobile operations in large rivers and for complex water flow conditions, and features high strength, tolerance and elasticity, different from traditional PVC pipelines.

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• (3) High-elastic and lightweight EVA material

It is mainly composed of harmless main raw materials and additives, and is suitable for such industries as special packaging, medical equipment and building materials due to good resilience, light weight and high tear strength.

• (4) Composite EVA material with high density and light weight

It is suitable for high-strength functional shoes, e.g., insoles and soles for professional athletes and combat boots.

• (5) HIT Automation Process Improvement Project

This project includes replacement of manual operation by 4 workers with three-dimensional pneumatic manipulator, as well as AGV automatic discharging system and automatic blending system for foaming industry, which continuously promotes the automation of the Company’s production line.

• (6) TPE yoga mat

It is mainly made of environmentally friendly raw materials such as EVA, POE and TPE elastomers, and additives through molding and foaming, and features good comfort, strong skid resistance, high resilience and uneasy deformation. Hence, it is a good protective cushion for yoga.

• (7) High-performance graphene-EVA composite foam material

It is made of EVA which is the main raw material, and additives such as foaming agent, cross-linking agent, thermoplastic resin, graphene-based antistatic agent (independently developed), graphene-based wearproof agent, graphene-based antibacterial agent and compatilizer. Besides, it is integrated by such technologies as in-situ polymerization, grafting, antistatic and antibacterial treatment, strengthening and toughening, and developed by such technologies as additive synthesis, internal mixing, open mixing, mold curing and foaming. This project addresses the key common technical problems such as binding force of interface between EVA resin and inorganic substances and dispersion of additives in foam materials, and overcomes the technical bottleneck in designing products that have not only excellent wearproof, antibacterial, antistatic and dustproof properties, but also high elasticity.

• (8) Functional thermoplastic foam material which is wearproof, antiskid and antistatic

According to the R&D plan above, it is expected that the Company will invest more than RMB 12 million in R&D in 2021, accounting for about 3%-3.5% of the revenue. However, the investment in R&D will be planned and adjusted according to the Company’s operating conditions.

• (IV) Impact of changes in important policies and laws at home and abroad on the Company’s financial business and its countermeasures:

The Company is registered in Cayman Island where financial services are the main economic activity, and mainly operates in Chinese Mainland, one of the major economies in the world. Due to the policy of prohibiting the import of waste plastics ( Implementation Plan for Prohibiting the Entry of Foreign Garbage and Advancing the Reform of the Solid Waste Import Administration System ) published by the Chinese government in 2018, the Company is now actively seeking for domestic sources of waste plastics, developing overseas strategic partners, and continuously evaluating the plans for setting up factories in Eastern Europe, Central Asia, Southeast Asia and even Taiwan, to secure stable supply of recycled plastics in the future.

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(V) Impact of technical changes and industrial changes on the Company’s financial business and its countermeasures:

The Company mainly produces EVA blended foam sheets which have a wide range of applications and are irreplaceable at present. EVA products have diversified properties due to the mixing of different materials, and use of different chemical additives and even different foaming technologies. Therefore, the technical innovation and change in the future will not reduce the use of EVA. Instead, the introduction of more new materials may help to develop new application fields. In the existing application market, products with new properties or functions may always storm the market and result in the elimination of old products, due to a large number of competitors. Therefore, the Company has never stopped its efforts in R&D and is committed to leading the market trends. Meanwhile, R&D personnel are required to pay close attention to the market trends, develop potential markets, and seek for new application needs, which will make great contributions to the Company’s business.

(VI) Impact of corporate image change on corporate crisis management and its countermeasures:

The Company is a professional EVA sheet manufacturer. Since its establishment, the Company has been focusing on its main business, and has been well-known in the market for its diversified high-quality products. It is now under stable operation and has a good reputation. Besides, the Company has attracted a large number of customers from the coastal areas from North China to South China with a sound product image and good reputation. Hence, there is no problem or crisis of corporate image change.

(VII) Expected returns and possible risks of M&A and their countermeasures:

The Company had no plans for M&A in recent years and up to the date of the Report. If there is a plan for M&A in the future, the Company will prudently evaluate whether the M&A can bring benefits to the Company, so as to safeguard the rights and interests of original shareholders.

(VIII) Expected returns and possible risks of plant expansion and their countermeasures:

The Company had no plans to expand its plant in recent years and up to the date of the Report. If there is such a plan in the future, the Company will prudently evaluate whether it can bring benefits to the Company, so as to safeguard the rights and interests of original shareholders.

(IX) Risks of and countermeasures for purchases or sales concentration:

(1) Risk of purchases:

The Company’s main products are foam materials made of EVA, as well as LDPE and other additives by molding and foaming. The raw materials used include EVA raw materials, LDPE raw materials and recycled waste plastics, which can be recycled into EVA blended foam products. The waste plastics should be classified and screened, before they are added into the product process according to the content of different substances. Due to the policy of prohibiting the import of waste plastics ( Implementation Plan for Prohibiting the Entry of Foreign Garbage and Advancing the Reform of the Solid Waste Import Administration System ) published by the Chinese government in 2018, the Company is now actively seeking for domestic sources of waste plastics, developing overseas strategic partners, and continuously evaluating the plans for setting up factories in Eastern Europe, Central Asia, Southeast Asia and even Taiwan, to secure stable supply of recycled plastics in the future.

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(2) Risk of sales:

The Company is a manufacturer of EVA foam materials. Its products are widely applied in many fields, e.g., shoes, luggage, sporting goods, packaging materials for high-tech electronic products, furniture, automobiles and building materials, and have become necessities of life. The current application of Company’s EVA products mainly lies in shoes and luggage, and is extending to other special materials. Due to a long term of engagement in this industry, the Company has developed products diversified in style and specification, thus attracting diversified customers. The Company is also committed to integrating the industry chain, and extending to the downstream in a planned way with the existing advantages of material cost control and the support of upstream and downstream traders. Meanwhile, the Company’s highly processed products continue to grow and win stable orders from well-known supermarkets such as B.TOYS, Wal-Mart, RT-Mart and New Huadu.

(X) Impact, risks and countermeasures of substantial share transfer or exchange by directors, supervisors or majority shareholders (holding more than 10% of the shares):

The Company (Asia Plastic Recycling Holding Limited) was registered and incorporated in Cayman Island in January 2010, planning to apply for listing on Taiwan Stock Exchange as a holding company. In March 2010, the Company issued new shares to exchange for the shares of Sansda Holding Limited held by Ding Holding Limited. After this share exchange, the Company directly held 100% of the shares of Sansda Holding Limited and indirectly held 100% of the shares of SANSD (HK) and Sansda (Fujian), marking the consummation of restructuring. After the restructuring, Ding Holding Limited became the Company’s sole shareholder (the sole shareholder of Ding Holding Limited is Mr. Ding Jinzao, who is also the Chairman of the Company). In order to conform to the relevant regulations on ownership dispersion, promote capital popularization and improve the Company’s shareholder structure, Ding Holding Limited transferred a portion of its shares in the Company as necessary. Despite the restructuring and ownership dispersion, there has been no significant change in the Company’s major business decisions and business management mechanism as of the date of the Report. In addition, the Company has elected three independent directors to strengthen the function of the Board of Directors in executing major decisions and perform effective corporate governance. On the whole, there has been no operational risk caused by substantial share transfer or exchange.

(XI) Impact, risks and countermeasures of changes in management right:

In recent years and up to the date of the Report, there has been no change in the management right of the Company. In addition, the Company has improved corporate governance measures and elected independent directors to enhance the protection for shareholders’ rights and interests. It plans to apply for listing on Taiwan Stock Exchange. After the application is approved by the competent authority, directors, supervisors and majority shareholders will carry out restricted transactions of collective share custody. Therefore, the Company will have no risk of changes in management right in the short term. After listing, the Company will advance capital popularization, share its operating results and profits with shareholders, and receive the sustainable support of shareholders. Therefore, the changes in the management right in the future will not have a significant negative impact on the Company’s management and operating advantages, thereby causing adverse impact and risk on the Company.

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(VII) Litigations or non-litigation cases:

Litigants	Date	Value of subject matter	Case description	As of the date of the Report
Plaintiff: The Company The Defendant: Glaucus’s Founder Matthew Wiechert, Chief Research Officer Soren Aandahl and other related persons providing assistance in China	2014.4.28	－	Suspected of manipulating stock prices in violation of Paragraph 6, Clause 1, Section 155.1(6) of the_Securities_ Exchange Act	The case is still under investigation by Taipei District Prosecutors Office, and Taipei District Prosecutors Office has issued an arrest warrant for Matthew David Wiechert and Soren Wallace Aandahl. Facts: Knowing that it is not forbidden to affect the trading price of securities in the centralized trading market, the two defendants spread rumors or false information with an aim to lowering the trading price of the securities of Asia Plastic Recycling Holding Limited, and successively published research reports containing false bad news on the website of Glaucus Research and entrusted public relations companies to spread them via electronic media, thus affecting the stock price of Asia Plastic Recycling Holding Limited. After being summoned by the US on the basis of mutual legal assistance, the two defendants failed to appear, and both of them are abroad. Given that, it is believed that the defendants have escaped. Accordingly, an arrest warrant was issued.

(XIII) Other important risks and countermeasures: information security risk

Status of information security management, information security policies, information security risks and countermeasures:

(1) Status of information security management:

The Company set up an “Information Security Group” in 2019, in which the General Manager acts as the organizer and under which there are the Information Office, Finance Department, General Management Department and Audit Office. Meanwhile, the Company has formulated an Information Security Policy to control and manage information security, and included information security in the annual audit so that information security matters are regularly reported to the Board Directors every year.

(2) Information security policies

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In order to protect the confidentiality, integrity, availability and compliance of information assets (hardware, software, information, document and personnel related to information processing) and prevent internal and external intentional or accidental threats to information security, the Company has formulated the following information security policies after reviewing its business needs:

A. Information security governance: continuously improve the management system, control risks, and strengthen risk prevention, including enhancing education and training and designing information security infrastructure.

B. Compliance with laws: review and revise the internal operation standards regularly to meet the information security standards and local laws and regulations.

(3) Information security risks:

The Company has taken out electronic equipment insurance for its operating assets such as network equipment. As information security insurance is a new kind of insurance, the Company decides not to take out such insurance currently after evaluation and full consideration of the insurance coverage, claim settlement, claim authentication and authentication institution qualification However, the Company has set up an Information Security Group to deal with the matters related to information system security and crisis management, establish an available information backup mechanism for the information system architecture according to the risk level, evaluate the operational risks and impacts on finance, legal affairs and customers every year, plan, design, and upgrade software and hardware equipment in time, and improve the work flow and other countermeasures, thereby greatly reducing the impact of information security risks. According to the evaluation of the Information Security Group, the Company has no major operational risk in information security.

(4) Countermeasures:

A. Use anti-spam software and firewall, and detect and isolate each email with its attachments and each link in the email, to effectively prevent employees from opening malicious email by mistake.

B. Improve employees’ awareness of information security and division of responsibilities, and carry out continuous information security operations and information security drills.

C. In case of major hazard or damage, start the remote backup mechanism so that the sever can launch and operate services quickly to reduce the impact.

(5) Implementation in 2020:

A. In 2020, the Company held two information security management meetings to review the implementation of information security policies by each unit, and found no risk of information security.

B. In 2020, the Company carried out a remote backup drill to strengthen employees’ response and alertness to information security risks.

VII. Other important events: None.

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VIII. Special disclosure

• I. Information of affiliates

• (I) Profile of affiliates

• Organizational structure of affiliates: Please refer to “II. Company Profile”

2. Basic information of affiliates

2. Basic information of affiliates
Enterprise name	Date of establishment	Address	Paid-in capital	Main business
Sansda Holding Limited	2009.12	British Virgin Islands	USD 1	International investment
Sansda Hong Kong	2010.01	Hong Kong	HKD 1	International investment
Sansda (Fujian) Plastic Co., Ltd.	1994.08	Jinjiang City, Fujian Province, China	HKD 200,000,000	Manufacturing and sale of EVA foam related products
Sansda (Jiangsu) Environmental Protection Technology Co., Ltd	2011.02	Jurong City, Jiangsu Province, China	USD 50,000,000	Manufacturing and sale of EVA foam related products
Sansda Hong Kong Trading Co., Ltd.	2012.07	Hong Kong	RMB 29,300,000	Trade of bulk chemical raw materials

1. Shareholder information of affiliates presumed to have control and affiliation relationship: None.

2. Information of the directors, supervisors and general managers of affiliates

Enterprise name	Title	Name or representative	Number of shares held (note)	Shareholding ratio (note)
Sansda Holding Limited	Director	Ding Jinzao	USD1	100.00%
Sansda Hong Kong	Director	Ding Jinzao	HKD1	100.00%
Sansda (Fujian) Plastic Co., Ltd.	Chairman	Ding Jinzao	HKD 200,000,000	100.00%
	General Manager	Ding Zhimeng	－	－
Sansda (Jiangsu) Environmental Protection TechnologyCo.,Ltd	Director/general manager	Ding Huaxiong	－	－
Sansda Hong Kong Trading Co., Ltd.	Director	Ding Zhiwei	－	－

Note: It is not a company limited by shares, so there is no share. Only the amount and ratio of capital contribution are listed.

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5. Overview of the operation of each affiliate

Unit: *10[3] in New Taiwan Currency

Enterprise name	Capital	Total assets	Total liabilities	Net value	Operating income	Operating profit	Current profit and loss(after-tax)	Earnings per share after tax (Yuan)
Sansda Holding Limited	0.028	6,730,957	203	6,730,754	-	-	(1,289,454)	(Note 1)
Sansda Hong Kong	0.004	7,549,438	818,481	6,730,957	-	(15)	(1,289,454)	(Note 1)
Sansda (Fujian) Plastic Co., Ltd.	734,000	6,369,774	778,030	5,591,744	621,821	(1,087,313)	(1,054,561)	(Note 1)
Sansda (Jiangsu) Environmental Protection Technology Co., Ltd	1,424,000	1,086,436	730,763	355,673	386,336	(233,491)	(185,050)	(Note 1)
Sansda Hong Kong Trading Co., Ltd.	128,334	75,203	58,413	16,790	-	-	(5,114)	(Note 1)

Note 1: It is not a company limited by shares, so there are no earnings per share.

Note 2: The above amounts are converted at the exchange rate at the end of 2020.

1. Industries covered by the business of all affiliates: Refer to Item 2. Note

2. Division of responsibilities among affiliates when their businesses are related to each other: On Jan. 08, 2010, Asia Plastic Recycling Holding Limited was established in the Cayman Islands, as the holding parent company of the Group and the first applicant for listing in Taiwan. For the organizational structure of reinvestment, please refer to “II. Company Profile-Structure Chart”. The Company also holds 100% of the shares of Sansda (Fujian) Plastics Co., Ltd., Sansda (Jiangsu) Environmental Technology Co., Ltd., andSansda (Hong Kong)Trading Co., Ltd. throughSansda (Hong Kong)Co., Ltd., one of its subsidiaries.

3. (II) Consolidated financial statements of affiliates: Please refer to Appendix I.

4. (III) Relationship report: None.

5. 121 -

II. Handling of private marketable securities in the most recent year and as of the date of printing of the annual report: None.

• III. Holding or disposal of the Company’s shares by its subsidiaries in the most recent year and as of the date of printing of the annual report: None.

• IV. Other necessary supplements: None.

• V. Events that have a significant impact on shareholders’ equity or securities price as stipulated in Section 36.3(2) of the Securities Exchange Act in the most recent year and as of the date of the annual report: None.

• VI. Significant deviations from the provisions on the protection of shareholders’ rights in China: Please refer to Appendix II.

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Appendix Ⅰ

Audit report

For Asia Plastic Recycling Holding Ltd.:

Opinion

We audited the consolidated balance sheets as at December 31, 2019 and 2020, consolidated statement of changes in equity, consolidated statements of cash flows and notes to the consolidated financial statements (including a summary of major accounting policies) for the period from January 1 to December 31, 2019 and 2020 of Asia Plastic Recycling Holding Ltd. (Asia Plastic Recycle) and its subsidiaries.

In our opinion, the consolidated financial statements above are, in all material aspects, sufficiently prepared as per the Rules of Taiwan for Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards accepted by the Financial Supervisory Commission, the International Accounting Standards, their interpretation and interpretation announcements to fairly reflect the consolidated financial conditions as at December 31, 2019 and 2020 and the consolidated financial performance and consolidated cash flows in the period from January 1 to December 31, 2019 and 2020 of Asia Plastic Recycling Holding Ltd. and its subsidiaries.

Basis of the opinion

We conducted our audit in accordance with the rules of Taiwan on audit of financial statements by auditors and generally accepted auditing standards. Our responsibilities under these rules and standards are further described in “Our responsibilities for the audit of the consolidated financial statements” section of our report. All employees of our employer subject to independence regulation are independent of Asia Plastic Recycle and its subsidiaries in accordance with the Code of Ethics for Professional Accountants. Furthermore, we have complied with the Code with respect to other responsibilities. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our pinion.

Key items of audit

Key items of audit refer to those most important items in the consolidated financial statements 2020 of Asia Plastic Recycle and its subsidiaries to be audited according to our professional judgment. Since such items were considered during audit of the consolidated financial statements and formation of the audit opinion, no separate opinion is given separately on these items.

Key items audited in the consolidated financial statement 2020 of Asia Plastic Recycle and its subsidiaries are hereby described as follows:

Truthfulness of recognized and presented income from sale of special products

According to Note 19 to the consolidated financial statements, Asia Plastic Recycle and its subsidiaries derived primary income from sale of PE-EVA mixed foam products, and suffered a

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great decline in business income and significant operating loss due to decrease in sources of raw material and orders for the products, while a sharp rise occurred to the gross profit from sale of special products and unit selling prices of the products. Considering the foregoing and according to provisions of the Statements on Auditing on considering income as a significant risk, the truthfulness of recognized and presented income from sale of special products was included as a key item of audit.

We have implemented due audit procedures regarding the abovementioned key items of audit to a specific extent, including:

• I. Gaining an understanding of and testing the internal control relating to truthfulness of recognized and presented income, such as effectiveness of internal control relating to order handling and shipment, based on which business income was recognized and presented.

• II. Verifying sampled particulars of business income, outbound orders and invoices for consistency in terms of target customers and amounts; visually checking countersignature of outbound orders by customers and other evidence of delivery.

• III. Verifying sampled records on collection of accounts receivable in the particulars of business income, payees and target customers for consistency.

Net value loss assessment of real property, factory buildings and equipment and impairment assessment of their use right

As at December 31, 2020, real property, factory buildings and equipment and their use right owned by Asia Plastic Recycle and its subsidiaries amounted to NTD (unless otherwise indicated) 3,218,378,000 in terms of book value, accounting for 49% in the total assets, and thus were considered as major assets. In light of the continuing operating loss suffered by Asia Plastic Recycle and its subsidiaries, the foregoing assets were assessed and showed a sign of impairment; according to the asset valuation report issued by an external independent expert, the Group and its subsidiaries determined the recoverable amount, with recognized and presented impairment loss of NTD 826,938,000 as at December 31, 2020. Considering material accounting estimates involved in impairment loss assessment and assumptions made by the management, impairment assessment of such assets was included as a key item of audit.

For accounting policies applicable to the foregoing asset impairment assessment and relevant matters disclosed, refer to Notes 4, 5, 11, 12 and 20 to the consolidated financial report.

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We have implemented the following audit procedures:

• I. Evaluating the professional experience, competence and independence of independent assessment experts appointed by the management, discussing with the management about their work scope, and reviewing their appointment conditions, so as to ensure nothing present to affect their objectivity or constituting any restriction on their work scope.

• II. Evaluating the reasonableness of methods and major assumptions adopted by the independent experts engaged by the management in preparing the asset assessment report.

• III. Verifying the integrity of data and correctness of impairment loss recognition and presentation assessed by the independent experts engaged by the management.

Responsibilities of the management and those charged with governance for the consolidated financial statements

The management has the responsibility to prepare and fairly present the consolidated financial statements according to the Rules of Taiwan for Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards accepted by the Financial Supervisory Commission, the International Accounting Standards, their interpretation and interpretation announcements, and maintain necessary internal control relating to the consolidated financial statements, so as to ensure the consolidated financial statements are free from material misstatements, whether due to fraud or errors.

As at preparation of the consolidated financial statements, the management also has the responsibility to assess the ability of Asia Plastic Recycle and its subsidiaries to continue as going concerns, disclosure of related matters and the going concern basis of accounting, unless it either intends to liquidate Asia Plastic Recycle and its subsidiaries or cease operations, or has no realistic alternative but to do so.

Those charged with governance of Asia Plastic Recycle and its subsidiaries (including board of auditors) have the responsibility to oversee the financial reporting process.

Our responsibilities for the audit of the consolidated financial statements

Our objective in auditing the consolidated financial statements is to obtain reasonable assurance regarding whether the consolidated financial statements are free from any material misstatement, whether due to fraud or errors, and to issue an auditor’s report. Reasonable assurance is a high, but not absolute, level of assurance, which means we may not have detected all material misstatements in the consolidated statement during our audit conducted according to the generally accepted audit standards. Misstatements can arise from fraud or errors, and are considered material if, individually or in the aggregate, they could reasonably be expected to influence economic decisions of users taken on the basis of the consolidated financial statements.

We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with the generally accepted auditing standards. We performed the following work:

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• I. Identifying and assessing the risks of material misstatement of the consolidated financial statements due to fraud or errors; designing and performing audit procedures responsive to those risks; obtaining 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 one resulting from errors, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or override of internal control.

• II. Obtaining an understanding of internal control relevant to 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 internal control of Asia Plastic Recycle and its subsidiaries.

• III. Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

• IV. Concluding 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 ability of Asia Plastic Recycle and its subsidiaries to continue as going concerns. If we conclude that a material uncertainty exists, we are required to draw attention to our auditor’s report to 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 auditor’s report. However, future events or conditions may cause Asia Plastic Recycle and its subsidiaries ceasing to continue as going concerns.

• V. Evaluating the overall presentation, structure and content of the consolidated financial statements (including notes thereto), and whether the consolidated financial statements represents the underlying transactions and events in a manner that achieves fair presentation.

• VI. Obtaining audit evidence, with respect to financial information of individuals comprising the Group, which is sufficient and appropriate to provide a basis for our opinion on the consolidated financial statements. We are also responsible for directing, supervising and performing the group audit, and give our opinion on the group audit.

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 findings in internal control that we identify during our audit.

We also provide those charged with governance an independence statement indicating our compliance with the independence requirement of the Code of Ethics for Professional Accountants, and communicate with them about relationships and other matters (including related protective measures) that may be considered to have an impact on our independence.

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We determine, among communications with those charged with governance, key items of audit in the consolidated financial statements 2020 of Asia Plastic Recycle and its subsidiaries. We clearly described such items in the auditor’s report, unless disclosure of certain items was prohibited by law, or in rare cases, we decide not to communicate about any special item since according to reasonable anticipation such communication would produce more negative impact than public interest.

Deloitte Touche Tohmatsu Limited Accountant, Wu Qiuyan Accountant, Jiang Jialing

Approval number from Securities Approval number from Securities and Futures Commission and Futures Commission TCZLZ No. 0920123784 TCZLZ No. 0920123784

Date: March 22, 2021

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

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Asia Plastic Recycling Holding Ltd. and Its Subsidiaries

Consolidated Balance Sheet

December 31, 2019 and 2020

Unit: *10[3] in New Taiwan Currency

Code 1100 1136 1150 1170 1200 1310 1419 11XX 1600 1755 1760 1920 1990 15XX 1XXX Code 2102 2108 2170 2219 2399 21XX 2570 2XXX 3100 3110 3200 3310 3320 3350 3300 3400 3410 3XXX	Asset Current assets Cash (Notes 4 and 6) Financial assets measured based on amortized cost (Note 7) Notes receivable (Notes 8, 19 and 27) Net accounts receivable (Notes 4, 8 and 19) Other receivables Inventory (Notes 4 and 9) Prepayments Total current assets Non-current assets Real property, factory buildings and equipment (Notes 4, 5, 11, 26, 27 and 28) Right-of-use assets (Notes 4, 5, 12 and 27) Investment real property (Notes 4, 13 and 26) Refundable deposits Other non-current assets Total non-current assets Total assets Liabilities and equity Current liabilities Short-term borrowings (Notes 14 and 27) Other short-term borrowings – stakeholders (Note 26) Accounts payable (Note 15) Other payables (Notes 12 and 16) Other current liabilities Total current liabilities Non-current liabilities Deferred tax liabilities (Notes 4, 5 and 21) Total liabilities Interests attributable to owners of the Group (Notes 4 and 18) Share capital Ordinary share capital Capital reserves Retained surplus Legal surplus reserves Special surplus reserve Undistributed profit (loss to be made up) Total retained profit Other interests Exchange differences of the translation of the financial statements in foreign operations Total equity Total liabilities and equities		December 31,2020 Amount % $ 1,297,562 20 1,314,000 20 75,601 1 214,020 3 3,847 - 269,982 4 18,590 1 3,193,602 49 2,415,261 37 803,117 12 118,871 2 2,015 - - - 3,339,264 51 $ 6,532,866 100 $ 188,340 3 159,616 2 232,502 4 80,479 1 14,622 - 675,559 10 62,317 1 737,876 11 2,689,547 41 3,028,767 46 708,876 11 716,985 11 729,588) (11) 696,273 11 619,597) ( 9) 5,794,990 89 $ 6,532,866 100	December 31,2020 Amount % $ 1,297,562 20 1,314,000 20 75,601 1 214,020 3 3,847 - 269,982 4 18,590 1 3,193,602 49 2,415,261 37 803,117 12 118,871 2 2,015 - - - 3,339,264 51 $ 6,532,866 100 $ 188,340 3 159,616 2 232,502 4 80,479 1 14,622 - 675,559 10 62,317 1 737,876 11 2,689,547 41 3,028,767 46 708,876 11 716,985 11 729,588) (11) 696,273 11 619,597) ( 9) 5,794,990 89 $ 6,532,866 100		December 31,2019	December 31,2019	December 31,2019
			Amount $ 1,297,562 1,314,000 75,601 214,020 3,847 269,982 18,590 3,193,602 2,415,261 803,117 118,871 2,015 - 3,339,264 $ 6,532,866 $ 188,340 159,616 232,502 80,479 14,622 675,559 62,317 737,876 2,689,547 3,028,767 708,876 716,985 729,588) 696,273 619,597) 5,794,990 $ 6,532,866			Amount $ 1,329,823 1,293,000 86,256 206,623 6,731 264,440 25,162 3,212,035 3,310,861 914,173 144,973 1,940 2,686 4,374,633 $ 7,586,668 $ 163,780 - 274,373 88,200 2,739 529,092 61,321 590,413 2,689,547 3,014,618 708,876 460,100 840,099 2,009,075 716,985) 6,996,255 $ 7,586,668		%
		( (		( (	(		(	18 17 1 3 - 3 - 42 44 12 2 - - 58 100 2 - 4 1 - 7 1 8 35 40 9 6 11 26 9) 92 100

Notes hereto constitute a part of the consolidated financial statements.

Chairman: Ding Jinzao Manager: Ding Zhimeng

Accounting officer: Wang Weiming

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Consolidated Income Statement

January 1 – December 31, 2019 and 2020

				Unit: *103in New Taiwan Currency, if	Unit: *103in New Taiwan Currency, if	Unit: *103in New Taiwan Currency, if	Unit: *103in New Taiwan Currency, if	Unit: *103in New Taiwan Currency, if	Unit: *103in New Taiwan Currency, if
					Per-share		loss amounting	to	NTD
			2020				2019
Code			Amount		%		Amount		%
	Business income (Notes 4, 19
	and 26)
4100	Sales revenue		$ 989,190		98	$ 1,240,593			99
4300	Lease income		18,967		2		17,807		1
4000	Total operating
	income		1,008,157		100		1,258,400		100
5000	Operating costs (Notes 9, 11,
	12, 20 and 26)		1,486,319		148		1,527,022		122
5900	Gross operating loss	(	478,162)	(	48)	(	268,622)	(	22)
	Operating expenses (Notes 11,
	12 and 20)
6100	Marketing expense		50,111		5		56,352		5
6200	Administrative expense		771,922		76		280,102		22
6300	R&D expenses		39,245		4		52,425		4
6450	Expected credit
	impairment loss		9,810		1		5,460		-
6000	Total operating
	expenses		871,088		86		394,339		31
6900	Net operating loss	(	1,349,250)	(	134)	(	662,961)	(	53)
	Non-business income and
	non-operating expenditure
	(Note 20)
7100	Interest income		32,619		3		34,598		3
7190	Other incomes		14,274		2		1,092		-
7020	Other profits and losses	(	2,330 )		-	(	5,638 )		-
7050	Financial cost	(	8,115)	(	1)	(	9,117)	(	1)
7000	Total non-business
	income and
	non-operating
	expenditure		36,448		4		20,935		2
7900	Net pre-tax loss	(	1,312,802 )	(	130 )	(	642,026 )	(	51 )

(To be continued)

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(Continued)

Code 7950 Income tax (Notes 4, 5 and 21) 8200 Net loss of the current year 8300 Other consolidated profits and losses 8310 Items not reclassified into profits or losses 8341 Currency translation difference (Note 18) 8500 Total consolidated profits and losses of the year 8600 Net loss attributable to: 8610 Owner of the company 8700 Total consolidated profits and losses attributable to: 8710 Owner of the company Per-share loss (Note 22) 9750 General 9850 Dilution		2020

Notes hereto constitute a part of the consolidated financial statements.

Chairman: Ding Jinzao Manager: Ding Zhimeng Accounting officer: Wang Weiming

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Consolidated statement of changes in equity

January 1 – December 31, 2019 and 2020

Unit: *10[3] in New Taiwan Currency

Code A1 Balance on January 1, 2019 Profit distribution in 2018 (Note 18) B3 Special surplus reserve D1 Net loss in 2019 D3 Other after-tax consolidated profits and losses in 2019 D5 Total consolidated profits and losses in 2019 N1 Employee stock option cost (Note 23) Z1 Balance on December 31, 2019 Profit distribution in 2019 (Note 18) B3 Special surplus reserve D1 Net loss in 2020 D3 Other after-tax consolidated profits and losses in 2020 D5 Total consolidated profits and losses in 2020 N1 Employee stock option cost (Note 23) Z1 Balance on December 31, 2020 Chairman: Ding Jinzao	Ordinary share capital		Capital reserves		Retained surplus		Shareholders' equity Others	Shareholders' equity Others	Total equity	Total equity
							Foreign operating agency Conversion of financial statements Exchange difference
				Legal surplus reserves	Special surplus reserve	Undistributed surplus (Losses to be made up)
								$ 460,100) - - 256,885) 256,885) - 716,985) - - 97,388 97,388 - $ 619,597)	( ( ( ( (	$ 7,863,082 - 642,026 ) 256,885) 898,911) 32,084 6,996,255 - 1,312,802 ) 97,388 1,215,414) 14,149 $ 5,794,990

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Consolidated Cash Flow Statement

January 1 – December 31, 2019 and 2020

Unit: *10[3] in New Taiwan Currency

Code Cash flow from operating activities A10000 Pre-tax net loss of the current year A20010 Earnings, expenses and losses A20100 Depreciation costs A20200 Amortization expense A20300 Expected credit impairment loss A20900 Financial cost A21200 Interest income A21900 Employee stock option compensation cost A22500 Loss from disposal of real property, factory buildings and equipment (benefit) A23700 Retention (reverse) of allowance for loss from inventory depreciation A23700 Non-financial asset impairment loss A29900 Others Net change of business assets and liabilities A31130 Notes receivable A31150 Accounts receivable A31180 Other receivables A31200 Inventories A31230 Prepayments A32150 Accounts payable A32180 Other payables A32230 Other current liabilities A33000 Cash outflow from operations A33100 Collected interest A33300 Paid interest AAAA Net cash outflow from operations Cash flow from investment activities B00040 Acquisition of financial assets measured by post-amortization cost B00060 Principal repayment of financial assets measured by post-amortization cost B02700 Purchase of real property, factory buildings and equipment B03700 Increase in deposits paid	2020 ( $ 1,312,802 ) 282,716 - 9,810 8,115 ( 32,619 ) 14,149 ( 4 ) 19,626 826,938 2,655 12,054 ( 13,797 ) 2,825 ( 23,570 ) 6,982 ( 46,327 ) ( 8,747 ) 11,857 ( 240,139 ) 32,781 ( 8,115) ( 215,473) ( 1,314,000 ) 1,314,000 ( 18,094 ) ( 44 )	2019
		( $ 642,026 ) 299,558 63 5,460 9,117 ( 34,598 ) 32,084 5,334 ( 2,063 ) - 4,519 ( 73,299 ) 22,126 ( 2,490 ) ( 48,451 ) 11,255 54,002 ( 6,861 ) ( 210) ( 366,480 ) 34,880 ( 9,117) ( 340,717) ( 1,341,000 ) 1,341,000 ( 25,639 ) -

(To be continued)

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(Continued)

Code B02800 Payments received for disposal of real property, factory buildings and equipment BBBB Net cash outflow from investment activities Cash flow of financing activities C00100 Increase in short-term borrowings C00200 Decrease in short-term borrowings C01800 Other borrowings – increase in stakeholders CCCC Net cash inflow of financing activities DDDD Impact of fluctuations in exchange rate on cash EEEE Net reduction of cash E00100 Cash balance at beginning of the year E00200 Year-end cash balance

Notes hereto constitute a part of the consolidated financial statements.

Chairman: Ding Jinzao

Manager: Ding Zhimeng

Accounting officer: Wang Weiming

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Notes to consolidated financial statements

January 1 – December 31, 2019 and 2020

(Unless otherwise specified, the amount shall be in 1,000 TWD)

I. Company history

Asia Plastic Recycling Holding Limited (hereinafter referred to as the “Company”) was founded in the British Cayman Islands on Jan. 08, 2010. It mainly applied for organizational restructuring with respect to the purchase and sale of stocks listed in Taiwan Stock Exchange (TWSE). After restructuring, the Company became a holding company of SANSD (Fujian) Plastic Co., Ltd. (hereinafter referred to as “SANSD Fujian”).

The Company stocks were listed on TWSE for transaction as from August 17, 2011, with the stock symbol of 1337.

The Company and all its subsidiaries have the functional currency in CNY. Since the Company is a listed company in Taiwan, amounts are converted from CNY to TWD in these Consolidated Financial Statements, to improve its comparability and consistency.

II. Date and procedures of financial statements

These Consolidated Financial Statements was released by the Board of Directors on March 22, 2021.

III. Application of new and revised standards and interpretations

• (I) International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations and SIC Interpretation Notice (hereinafter referred to as “IFRSs”) recognized and released by the Financial Supervisory Commission (hereinafter referred to as “FSC”) are applied for the first time.

• Except as stated below, application of the amended IFRSs recognized and released by FSC shall not lead to material change in accounting policies of the Company and members under its control (hereinafter referred to as the “Consolidated Company”):

“Definition of materiality” in the amendments to IAS 1 and IAS 8

As from Jan. 01, 2020, the Consolidated Company shall apply the amendments, in which the definition of materiality was amended to “may be reasonably expected to affect the user” and in addition, disclosures of the Consolidated Financial Statements were adjusted and non-material information that might possibly fuzz up any material information were deleted.

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IAS 1 and IAS 8 are applied for the first time, with no influence on assets, liabilities and equities of the Consolidated Company on Jan. 01, 2020.

• (II) IFRSs recognized by FSC and applied in 2021

Effective date of International New/ amended/ revised standards and Accounting Standards Board interpretations (IASB) publication Amendment to IFRS 4 [applicable to Become effective from the date expansion of temporary exemption of of publication. IFRS 9] Amendments to IFRS 9, IAS 39, IFRS 7, Become effective within the IFRS 4 and IFRS 16 [interest rate annual reporting period benchmark reform – phase 2] commenced after Jan. 01, 2021. Amendment to IFRS 16 [COVID-19 Become effective within the related] annual reporting period commenced after June 01, 2020.

As of the date issuing these Consolidated Financial Statements, the Consolidated Company has continued to assess the influence of those amendments to other standards & interpretations on its financial conditions and performance; and related effects shall be disclosed upon completion of assessment.

• (III) IFRSs released by IASB but has not been recognized and released by FSC

New/ amended/ revised standards and interpretations [Annual improvement during 2018~2020] Amendment to IFRS 3 [update] Amendments to IFRS 10 and IAS 28 [sale] IFRS 17 [insurance] Amendment to IFRS 17 Amendment to IAS 1 [classification] Amendment to IAS 1 [disclosure] Amendment to IAS 8 [definition] Amendment to IAS 16 [property, plant and equipment: proceeds before intended use] Amendment to IAS 37 [onerous contract – contract performance cost]

Effective date of IASB publication(note 1)

January 1, 2022 (Note 2) January 1, 2022 (Note 3) TBD January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 6) January 1, 2023 (Note 7) January 1, 2022 (Note 4) January 1, 2022 (Note 5)

• Note 1: Unless otherwise expressly indicated, the foregoing new/ amended/ revised standards and interpretations shall become effective during the annual reporting period after the respective date.

• Note 2: Amendment to IFRS 9 shall be applicable to the exchange of financial liabilities or clause revision during the annual reporting period as from Jan. 01, 2022.

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• Note 3: This amendment is applicable to the business combination with the acquisition date is within the annual reporting period as from Jan. 01, 2022.

• Note 4: This amendment is applicable to the property, plant and equipment reaching the necessary place and status as expected by the management as from Jan. 01, 2021.

• Note 5: This amendment is applicable to the contract under which all obligations have not been performed on Jan. 01, 2022.

• Note 6: This amendment is applicable to the extension of the annual reporting period as from Jan. 01, 2023.

• Note 7: This amendment is applicable to the change in accounting estimates and policies happened during the annual reporting period as from Jan. 01, 2023.

Besides the foresaid effects, as of the date issuing these Consolidated Financial Statements, the Consolidated Company has continued to assess the influence of those amendments to other standards & interpretations on its financial conditions and performance; and related effects shall be disclosed upon completion of assessment.

IV. Summary of significant accounting policies

• (I) Compliance statement

These Consolidated Financial Statements are prepared in accordance with the guidelines for preparation of financial statements for securities issuer of the Republic of China as well as IFRSs recognized and released by FSC.

• (II) Basis of preparation

Except the financial instruments measured at fair value, these Consolidated Financial Statements are prepared on the basis of historic cost.

Fair value measurement can be divided into Classes 1~3 as per the observability and significance of related input values:

1. Class 1 input value: means the quotation (unadjusted) of same assets or liabilities that can be obtained on the measurement date on an active market.

2. Class 2 input value: means the direct (i.e. price) or indirect (i.e. derived from price) observable input value of assets or liabilities, other than the quotation in Class 1.

3. Class 3 input value: means the non-observable input value of assets or liabilities.

4. 136 -

5. (III) Standards for classification of assets and liabilities as current and non-current

Current assets include:

1. Assets mainly held for transaction purpose;

2. Assets expected to be realized within 12 months after the date of balance sheet; and

3. Cash (but excluding cash restricted for exchange or discharging liabilities later than 12 months after the date of balance sheet).

Current liabilities include:

1. Liabilities mainly held for transaction purpose;

2. Liabilities to be discharged within 12 months after the date of balance sheet (even though the long-term refinancing or rescheduling payment agreement that has been completed from the date of balance sheet to the date of financial report is also current liabilities), and

3. Liabilities of which discharge period cannot be unconditionally extended to the period at least within 12 months after the date of balance sheet. Only when the liabilities may possibly be discharged by issuing equity instrument at the choice of the transaction parties, the classification will not be affected.

Those assets or liabilities other than the foregoing shall be classified as non-current assets or liabilities.

• (IV) Basis of consolidation

These Consolidated Financial Statements include the financial statements of the Company as well as members (subsidiaries) under its control. Financial statements of the subsidiaries have been properly adjusted, to make their accounting policies consistent with those adopted by the Consolidated Company. When the Consolidated Financial Statements are prepared, transaction between various members, account balance, revenues and expenses have been written off, in full amount.

For detailed information of subsidiaries, shareholding ratio and business items, refer to Note 10 as well as Schedule 4 & 5.

• (V) Foreign currency

When financial statements of various members of the Consolidated Company are prepared, as to the transaction conducted in any currency (foreign) other than the functional currency, the foreign currency shall be converted into the functional currency with the exchange rate prevailing on the transaction date, for record.

All items in foreign currency shall be converted with the closing rate on the date of balance sheet. Exchange difference from closing or conversion of monetary items shall be recognized in current profit or loss.

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Non-monetary items in foreign currency measured at fair value shall be converted with the exchange rate prevailing on the date determining the fair value; and the exchange difference therefrom shall be listed in the current profits and losses. If the change in fair value is listed in other comprehensive profits and losses, the exchange difference therefrom shall be listed in other comprehensive profits and losses.

When the Consolidated Financial Statements are prepared, assets and liabilities of the foreign operating agency of the Consolidated Company shall be converted in TWD with the exchange rate prevailing on the date of balance sheet. Revenues and expenses shall be converted with the average current rate and the exchange difference therefrom shall be listed in other comprehensive profits and losses.

• (VI) Inventories

Inventory shall include raw materials, work-in-process and finished goods. Inventory shall be measured as per the lower value between cost and net realizable value. Except for the inventory of same category, cost and net realizable value shall be compared on the basis of individual items. Net realizable value is the estimated selling price under normal circumstances, less the estimated cost to be invested until completion and the estimated cost associated with the eventual sale. Inventory cost shall be calculated by weighted average method.

• (VII) Property, plant and equipment

Property, plant and equipment shall be listed by cost and subsequently, measured by cost minus accumulated depreciation and accumulated impairment loss.

Property, plant and equipment under construction shall be listed by cost minus accumulated impairment loss. Cost includes the professional fees and the amount from capitalization of borrowing cost conforming to capitalization conditions as well as amortization of land use right during the plant construction (assets listed in the right of use). Those assets that have been completed and reached the expected service state shall be included in the appropriate classification of property, plant and equipment, and started to be listed for depreciation.

Property, plant and equipment shall be listed for depreciation by straight-line method, and every major portion shall be separately listed for depreciation. The Consolidated Company shall inspect the estimated service life, residual value and depreciation method prior to the closing date of every year. Influence from change in accounting estimates shall be handled in a deferred manner.

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When the property, plant and equipment are derecognized, balance between the net disposal proceeds and the carrying amount of assets shall be recognized in profit or loss.

(VIII) Investment property

Investment property means the property held for earning rent or for capital appreciation, or for both (including properties under construction for that purpose).

Self-owned investment property shall be initially measured by cost (including transaction cost) and subsequently, measured by cost minus accumulated depreciation and accumulated impairment loss. The Consolidated Company shall use the straight-line depreciation method.

Investment property under construction shall be recognized by cost minus accumulated impairment loss. Cost includes the professional fees and the amount from capitalization of borrowing cost conforming to capitalization conditions as well as amortization of land use right during the plant construction (assets listed in the right of use). Such assets shall be started to be listed for depreciation when they reach the expected service state.

When the investment property is derecognized, balance between the net disposal proceeds and the carrying amount of assets shall be recognized in profit or loss.

• (IX) Impairment of property, plant and equipment, right-of-use assets and investment property

On the date of balance sheet, the Consolidated Company shall assess whether there is any indication that property, plant, equipment, right-of-use assets or investment property has been possibly impaired. If there is any indication of impairment, recoverable amount of such assets shall be estimated. Provided that recoverable amount of any individual asset cannot be estimated, the Consolidated Company shall estimate the recoverable amount of the cash generating unit to which such assets belong. Shared-use assets shall be the min cash generating unit apportioned on a reasonable and consensus basis.

Recoverable amount is the fair value minus selling cost or use value (the higher prevails). Provided that recoverable amount of any individual asset or cash generating unit is lower than its carrying amount, decrease the carrying amount of such asset or cash generating unit to the recoverable amount, and impairment loss shall be recognized in profit or loss.

Where the impairment loss will be reversed subsequently, carrying amount of such asset or cash generating unit shall be increased to the recoverable amount after revision, but the amount after increase shall not exceed the carrying amount (less depreciation) of such asset or cash generating unit determined

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when impairment loss was not recognized in previous year. Reversal of the impairment loss shall be recognized in profit or loss.

• (X) Financial instruments

Financial assets and liabilities shall be recognized in the consolidated balance sheet when the Consolidated Company becomes a party to the contractual provisions of the instruments.

Provided that the financial assets or liabilities are not measured at fair value through profit or loss when they are recognized initially, such assets or liabilities shall be measured by fair value plus transaction cost directly attributable to acquisition or issue of financial assets or liabilities. Transaction cost directly attributable to acquisition or issue of financial assets or liabilities measured at fair value through profit or loss shall be immediately recognized in profit or loss.

1. Financial assets

Regular transaction of financial assets shall be recognized and derecognized on the date of transaction.

• (1) Category of measurement

Financial assets held by the Consolidated Company shall be the financial assets measured at amortized cost.

Subsequent to initial recognition, financial assets at amortized cost (including cash, as well as financial assets, notes & accounts receivable, other receivables and refundable deposits measured at amortized cost) shall be measured at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss. Any exchange gain or loss of foreign currency shall be recognized in profit or loss.

Interest revenue is calculated by the effective interest rate to the gross carrying amount of the financial assets, except for:

• A. Purchased or originated credit-impaired financial asset, for which interest revenue is calculated by multiplying the effective interest rate after credit adjustment by the amortized cost of the financial asset; and

• B. Financial asset that is other than purchased or originated credit-impaired category but has subsequently become credit-impaired, for which interest revenue is calculated by multiplying the effective interest rate in the next reporting period upon credit impairment to the amortized cost of the financial asset.

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Credit-impaired financial asset means that the issuer or the debtor has encountered significant financial difficulty, or violated the contract; the debtor will probably enter bankruptcy or undergo other financial reorganization; or the active market may disappear due to financial difficulty.

• (2) Impairment of financial assets

On the date of balance sheet, the Consolidated Company shall recognize the impairment loss of the financial assets (including accounts receivable) measured at amortized cost, as the expected credit losses.

Loss allowance for accounts receivable shall be recognized as per the lifetime expected credit lost. For all other financial assets, firstly assess whether there is a significant increase in credit risk since initial recognition. If there is no significant increase, loss allowance shall be recognized as per 12-month expected credit loss; but in case of significant increase, loss allowance shall be recognized as per the lifetime expected credit loss.

Expected credit loss reflects the weighted average of credit loss with the risk of a default occurring as the weights. 12-month expected credit loss means such loss arising from possible default events that occur within 12 months after the reporting date of the financial instrument; while lifetime expected credit loss means such loss caused by all possible default events over the expected life of the financial instrument.

For internal credit risk management purposes, the Consolidated Company determines that the following situations indicate that a financial asset is in default (without taking into account any collateral held):

• A. Internal or external information show that the debtor is unlikely to discharge the liabilities.

• B. When a financial asset is overdue for at least 90 days unless there is reasonable and corroborative information to support a more lagged default criterion.

For impairment loss of all financial assets, the carrying amount shall be adjusted through a loss allowance account.

(3) Derecognition of financial assets

The Consolidated Company shall derecognize the financial asset only when the contractual rights to the cash flows from the

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financial asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

When the financial asset at amortized cost is derecognized in its entirety, difference between its carrying amount and the sum of consideration received shall be recognized in profit or loss.

1. Equity instrument

Debt and equity instruments issued by the Consolidated Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of financial liability and equity instrument.

Equity instrument issued by the Consolidated Company shall be recognized at the proceeds received, net of direct issue costs.

Repurchase of the Company’s own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in profit or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

1. Financial liabilities

2. (1) Subsequent measurement

Financial liabilities held by the Consolidated Company shall be measured at amortized cost using the effective interest method.

• (2) Derecognition of financial liabilities

When the financial liability is derecognized, difference between its carrying amount and the consideration paid (including any non-cash assets transferred or liabilities assumed) shall be recognized in profit or loss.

• (XI) Revenue recognition

The Consolidated Company shall recognize the revenue when the performance obligations are identified by the customer, the transaction price is allocated to various performance obligations and all performance obligations are satisfied.

Revenue from sale of goods is EVA blended foam. In accordance with the contract, the customer shall assume the responsibility for resale and bear the risk for commodity obsolescence with respect to the determined price and use right when EVA blended foam etc. are delivered to the customer, and the Consolidated Company shall recognize the revenue and accounts receivable thereupon.

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(XII) Leasing

On the date of contract establishment, the Consolidated Company shall assess whether the contract is a lease.

1. The Consolidated Company as lessor

2. Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Payments for operating leases shall be recognized as revenue on a straight-line basis over the term of the relevant leases.

1. The Consolidated Company as lessee

2. Except for low-value asset leases and short-term leases accounted for applying a recognition exemption where payments are recognized as expenses on a straight-line basis over the lease term, all other leases are recognized as right-of-use assets and lease liabilities at the commencement date of lease.

Right-of-use assets are land use rights held by the subsidiaries in the Chinese mainland, and are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are presented separately in the consolidated balance sheet.

  - Right-of-use assets are depreciated using the straight-line method during the lease term.

• (XIII) Retirement benefits

• Subsidiaries – SANSD (Fujian) Plastic Co., Ltd. and SANSD (Jiangsu) Environmental Protection Technology Co., Ltd. have participated in the pension plans decided by the local governments in the light of the local laws and regulations, and allocated and deposited the pension in the local governments in definite proportions of the employees’ salary at regular intervals. It belongs to the defined contribution pension plan. During the period when the employees render service, the pension amount allocated shall be recognized in current expenses.

• (XIV) Employee stock option

• Employee stock option means that the optimal estimates equivalent to the sum of fair value of the equity instrument on the grant date and the expected vesting shall be recognized in expenses on a straight-line basis within the vesting period, and meanwhile, capital reserves – employee stock option shall be adjusted. If it is vested immediately on the grant date, all amounts shall be recognized in expenses on the grant date.

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On the date of balance sheet, the Consolidated Company shall correct the estimates of the employee stock options for the expected vesting. Provided that the initial estimates are corrected, the amount affected shall be recognized in profit or loss, to make the accumulated cost reflect the estimates corrected and relatively adjust the capital reserves – employee stock option.

(XV) Income tax

Income tax expense represents the sum of current income tax and deferred tax.

1. Current income tax

The Consolidated Company shall decide the current income (loss) in compliance with the local regulations with jurisdiction over corresponding income tax and calculate the income tax payable (recoverable) hereby.

Adjustments of income tax payable in previous years shall be listed in the current income tax.

1. Deferred income tax

Deferred income tax shall be calculated as per the temporary differences between the carrying amount of assets and liabilities stated in the Consolidated Financial Statements and the corresponding tax bases used in the calculation of taxable profits. Deferred income tax liabilities are generally recognized for all taxable temporary differences; while deferred income tax assets are probably recognized for all deductible temporary differences and unused loss carry-forwards to the extent that it is probable that taxable profits will be available against which these deductible temporary differences can be used. If the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit, the resulting deferred income tax asset or liability shall not be recognized.

The carrying amount of deferred income tax assets shall be reviewed at the date of balance sheet and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred income tax asset shall also be reviewed at the date of balance sheet and increased to the extent that it is probable that future taxable profits will allow all or part of the asset to be recovered.

Deferred income tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the assets are realized or the liabilities are settled, based on tax rates and tax laws that have been enacted or substantively enacted no later than the date of balance sheet.

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The measurement of deferred income tax liabilities and assets reflects the tax consequences based on the manner in which the Consolidated Company expects, at the date of balance sheet, to recover or settle the carrying amount of its assets and liabilities.

• V. Main sources of significant accounting judgments, estimates and hypothetical uncertainty

When the Consolidated Company applies the accounting policies, its management must make judgments, estimates and assumptions with respect to related information that is not readily apparent from other sources, on the basis of historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Consolidated Company has considered the economic implications of COVID-19 on critical accounting estimates and the management will review the estimates and underlying assumptions on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years.

Impairment of property, plant and equipment, and right-of-use assets

It shall be assessed as per the recoverable amount of property, plant and equipment as well as right-of-use assets (i.e. fair value of such assets minus selling cost). Recoverable amount of such assets will be affected by change in market conditions and in such a case, the Consolidated Company may be required to recognize the impairment loss additionally or reverse the impairment loss recognized.

VI. Cash

VI.	Cash
VII. VIII.	Cash Demand deposits in bank Financial assets at amortized cost Fixed deposit with the original maturity over 3 months Annual interest rate (%) Net notes and accounts receivable Notes receivable Created through operation	December 31,2020 $ 1,236 1,296,326 $ 1,297,562 December 31,2020 $ 1,314,000 2.25 December 31,2020 $ 75,601	December 31,2019
			$ 336 1,329,487 $ 1,329,823 December 31,2019
			$ 1,293,000 2.25 December 31,2019
				$ 86,256

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Accounts receivable Created through operation – measured at amortized cost Gross carrying amount Less: Loss allowance	$ 238,147 24,127 $ 214,020	$ 220,766 14,143 $ 206,623

(I) Notes receivable

At the date of balance sheet, the Consolidated Company has no any note receivable that has been overdue but allowance for doubtful accounts has not been recognized.

Aging analysis of notes receivable is as below:

Within 90 days 91-180 days More than 180 days	December 31,2020 $ 45,825 29,689 87 $ 75,601	December 31,2019	December 31,2019
			$ 48,530 37,726 - $ 86,256

It is aging analysis based on the date of account opening above.

The Consolidated Company has transferred a part of notes receivable of banker’s acceptance by endorsement to the supplier for payment. Please refer to Notes 25 and 27.

(II) Accounts receivable

The Consolidated Company offers an average credit period of 30~150 days for commodity sales. To mitigate the credit risk, the Consolidated Company has designated the specialist personnel to decide the credit line and take charge of credit approval and other monitoring procedures, so as to assure that appropriate actions have been taken to recover the overdue receivables. In addition, the Consolidated Company shall review the recoverable amount of all receivables at the date of balance sheet, to assure that appropriate impairment loss has been recognized for the unrecoverable receivables. Therefore, the Consolidated Company management believes that the credit risk has been decreased significantly.

The Consolidated Company shall recognize the loss allowance for receivables as per the lifetime expected credit loss. Lifetime expected credit loss shall give consideration to the past default record and current financial conditions of various customers and further classify the customer groups as per the credit loss of the Consolidated Company. In addition, expected credit loss rate shall be determined according to the aging of receivables.

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If it is evidenced that the counterparty is suffering severe financial difficulty and the Consolidated Company cannot reasonably expect the recoverable amount, i.e. the counterparty is winding up, the Consolidated Company shall directly write off related receivables, but recourse will continue and the amount recovered from resource shall be recognized in profit or loss.

Loss allowance for accounts receivable measured by the Consolidated Company is as follows:

1. December 31, 2020

Customer group 1

Expected credit loss rate (%) Gross carrying amount Loss allowance (lifetime expected credit loss) Amortized cost Customer group 2 Expected credit loss rate (%) Gross carrying amount Loss allowance (lifetime expected credit loss) Amortized cost	1-90 days	91-120 days	121-150 days		151-180 days	151-180 days	180-365 days More than 365 days	Total
	0.5～1.5 $ 189,342 (1,412) $ 187,930	3 5 $ 14,195 $ 3,710 ( 426) ( 185) $ 13,769 $ 3,525 91-120 days 121-150 days		10 20 100 $ 4,530 $ 5,899 $ 2,740 ( 453) (1,180) (2,740) $ 4,077 $ 4,719 $ - 151-180 days 180-365 days More than 365 days				$ 220,416 (6,396) $ 214,020 Total
	1-90 days - $ - - $-
		- - $ - $ - - - $- $-		- $ - - $-		100 100 $ 3,200 $ 14,531 (3,200) (14,531) $- $-		$ 17,731 (17,731) $-

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2. December 31, 2019

Customer group 1

Expected credit loss rate (%) Gross carrying amount Loss allowance (lifetime expected credit loss) Amortized cost	1-90 days 91-120 days	121-150 days	151-180 days	180-365 days More than 365 days	Total
	0.6～0.11 3 $ 180,060 $ 12,533 (1,636) (376 ) ( $ 178,424 $ 12,157	5 $ 9,687 484 ) ( $ 9,203	10 $ 4,878 488 ) ( $ 4,390	20 100 $ 2,967 $ 2,107 593 ) (2,107) $ 2,374 $-	$ 212,232 (5,684) $ 206,548

Customer group 2

Expected credit loss rate (%) Gross carrying amount Loss allowance (lifetime expected credit loss) Amortized cost	1-90 days 91-120 days 121-150 days 151-180 days 180-365 days More than 365 days Total
	- - - - 100 100 $ - $ - $ - $ - $ 2,726 $ 5,808 $ 8,534 - - - - (2,726) (5,733) (8,459) $- $- $- $- $- $ 75 $ 75

Change in loss allowance for accounts receivable is as below:

Balance at the beginning of the year Allowance in current year Write-off in current year Net exchange difference Year-end balance		2020 $ 14,143 9,810 - 174 $ 24,127		2019
			( (	$ 9,587 5,460 412 ) 492) $ 14,143

IX. Inventories

Raw materials Work in process Finished products	December 31, 2020 $ 155,152 32,364 82,466 $ 269,982	December 31, 2019	December 31, 2019
			$ 161,204 37,023 66,213 $ 264,440

Composition of operating costs is as follows:

Inventory-related selling cost Impairment loss of property, plant and equipment as well as right-of-use assets	2020 $ 1,035,758 287,253	2019
		$ 1,392,047 -

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Depreciation of leased assets and related taxes Allowance (reversal) for inventory falling price loss Idle capacity loss (note)	36,509 19,626 ( 107,173 $ 1,486,319	36,227 2,063 ) 100,811 $ 1,527,022

Note: Including related cost during the downtime arising from the influence of COVID-19

• X. Subsidiary

Subsidiaries incorporated in the Consolidated Financial Statements

Various entities preparing these Consolidated Financial Statements are as follows:

Investor name The Company BVI SANSD SANSD (Hong Kong) Co., Ltd.	Name of subsidiary BVI SANSD SANSD (Hong Kong) Co., Ltd. SANSD (Fujian) Plastic Co., Ltd. SANSD (Jiangsu) Environmental Protection Technology Co., Ltd. SANSD (Hong Kong) Trade Co., Ltd.	Shareholding ratio December 31, 2020 December 31, 2019 100 100 100 100 100 100 100 100 100 100	Description
			(I) (II) (III) (IV) (V)

• (I) SANSD (BVI) Holding Co., Ltd (hereinafter referred to as “BVI SANSD) was founded in British Virgin Islands in December 2009 and mainly engages in investment business.

• (II) SANSD (Hong Kong) Co., Ltd. (hereinafter referred to as “SANSD Hong Kong”) was founded in Hong Kong in January 2010 and mainly engages in investment business.

• (III) SANSD (Fujian) Plastic Co., Ltd. (hereinafter referred to as “SANSD Fujian”) was founded in Jinjiang City, Fujian Province, P.R. of China in August 1994, and mainly engages in the manufacturing and sale of EVA blended foam (including sole sheets, bag sheets, special & ordinary sheets, rubber foam, high elastic foam, anti-static and flame-retardant foam) by recycling of waste plastics.

• (IV) SANSD (Jiangsu) Environmental Protection Technology Co., Ltd. (hereinafter referred to as “SANSD Jiangsu”) was founded in Jurong City, Jiangsu Province, P.R. of China in January 2011, and mainly engages in the manufacturing and sale of EVA blended foam by recycling of waste plastics. SANSD Jiangsu commenced production and operating activities since May 2014.

• (V) SANSD (Hong Kong) Trading Co., Ltd. (hereinafter referred to as “SANSD Hong Kong Trading”) was founded in Hong Kong in July 2012 and mainly engages in trade of bulk chemical raw materials.

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XI. Property, plant and equipment

2020

Cost Balance on January 1, 2020 Addition Disposal Net exchange difference Balance on December 31, 2020 Accumulated depreciation Balance on January 1, 2020 Depreciation costs Disposal Net exchange difference Balance on December 31, 2020 Accumulated impairment Balance on January 1, 2020 Impairment loss Net exchange difference Balance on December 31, 2020 Net amount at Dec. 31, 2020	Houses and buildings $ 5,368,495 30,708 - 87,474 $ 5,486,677 $ 1,299,388 172,092 - 25,022 $ 1,496,502 $ 1,170,682 623,434 23,314 $ 1,817,430 $ 2,172,745	Mechanical equipment	Mechanical equipment	Transportation equipment $ 71,213 293 ( 1,519 ) 1,099 $ 71,086 $ 63,335 369 ( 1,367 ) 982 $ 63,319 $ - 905 6 $ 911 $ 6,856	Office equipment $ 109,250 132 ( 17 ) 1,777 $ 111,142 $ 76,744 3,613 ( 15 ) 1,345 $ 81,687 $ 24,739 1,554 413 $ 26,706 $ 2,749	Office equipment $ 109,250 132 ( 17 ) 1,777 $ 111,142 $ 76,744 3,613 ( 15 ) 1,345 $ 81,687 $ 24,739 1,554 413 $ 26,706 $ 2,749	Unfinished project and equipment to be inspected $ 107,369 ( 35,267 ) - 1,599 $ 73,701 $ - - - - $- $ 7,068 8,543 174 $ 15,785 $ 57,916		Total
			$ 754,587 22,050 - 12,434 $ 789,071	( (	( (			( (	$ 6,410,914 17,916 1,536 ) 104,383 $ 6,531,677
			$ 458,097 55,995 - 8,714 $ 522,806						$ 1,897,564 232,069 1,382 ) 36,063 $ 2,164,314
			$ - 90,645 625 $ 91,270 $ 174,995						$ 1,202,489 725,081 24,532 $ 1,952,102
									$ 2,415,261

2019

2019
Cost		Houses and buildings $ 5,567,337 452 - - 199,294) $ 5,368,495 $ 1,167,787 179,947 -	Mechanical equipment	(	Transportation equipment $ 73,857 - - - 2,644) $ 71,213 $ 65,112 575 -	Office equipment $ 113,144 195 ( 36 ) - ( 4,053) $ 109,250 $ 73,423 6,213 ( 32 )		Unfinished project and equipment to be inspected $ 104,646 2,294 - 4,665 4,236) $ 107,369 $ - - -	Total
			$ 792,808 16,537 ( 18,333 ) ( 7,728 ) ( 28,697) $ 754,587 $ 430,164 59,928 ( 12,225 )				(		$ 6,651,792 19,478 ( 18,369 ) ( 3,063 ) ( 238,924) $ 6,410,914 $ 1,736,486 246,663 ( 12,257 )
Balance on January 1, 2019 Addition Disposal Re-classification Net exchange difference Balance on December 31, 2019 Accumulated depreciation	(
Balance on January 1, 2019 Depreciation costs Disposal

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Re-classification Net exchange difference ( Balance on December 31, 2019 Accumulated impairment	- ( 2,322 ) 48,346) ( 17,448) ( $ 1,299,388 $ 458,097 $ 1,214,142 $ - 43,460) - $ 1,170,682 $ - $ 2,898,425 $ 296,490	- 2,352) ( $ 63,335 $ - - ( $ - $ 7,878	- 2,860) $ 76,744 $ 25,658 919) ( $ 24,739 $ 7,767	- ( 2,322 ) - ( 71,006) $ - $ 1,897,564 $ 7,331 $ 1,247,131 263) ( 44,642) $ 7,068 $ 1,202,489 $ 100,301 $ 3,310,861
Balance on January 1, 2019 Net exchange difference ( Balance on December 31, 2019 Net amount at Dec. 31, 2019

Due to significant operating losses, there is an indication that the evaluated asset value of the Consolidated Company has been impaired. The Consolidated Company decides the recoverable amount based on the asset valuation report issued by independent experts, and a part of property, plant and equipment have their recoverable amounts lower than the carrying amount. Therefore, subsidiaries – SANSD Fujian and SANSD Jiangsu recognized the impairment loss totally 725,081 thousands at the end of 2020 and listed such amount in the operating costs and expenses in the consolidated statement of comprehensive income. Asset valuation report issued by the independent experts uses the cost method for valuation and it belongs to Class 3 measurement at fair value.

Depreciation for property, plant and equipment of the Consolidated Company is calculated by using the straight-line method as per the following service life:

Houses and buildings
Main plant buildings	20 years
Plant foundation reinforcement	5 years
Mechanical equipment	5~10 years
Transportation equipment	5 years
Office equipment	5 years

The Consolidated Company commenced the following major activities that affect cash and non-cash items in 2020 and 2019 – information about cash outflow from acquisition of property, plant and equipment is as below:

Addition of property, plant and equipment Decrease in prepaid equipment payment Decrease in equipment payables Cash payment		2020 $ 17,916 - 178 $ 18,094	2019
			$ 19,478 ( 1,341 ) 7,502 $ 25,639

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The Consolidated Company set mortgage for property, plant and equipment amount as the loan guarantee. Please refer to note 27.

XII. Right-of-use asset

Carrying amount of right-of-use assets Land Depreciation expense of right-of-use assets Land	December 31, 2020 $ 803,117 2020 $ 22,825	December 31, 2019	December 31, 2019
			$ 914,173 2019
			$ 23,837

Right-of-use assets refer to the land use rights of various subsidiaries in Chinese mainland.

Land for the original site of the subsidiary – SANSD Fujian was acquired by CNY 81,446 thousands in the previous years. For the purpose of plant expansion, use rights for the land adjacent to the original site was acquired from the Villagers Committee of Jiangtou Village Chendai Township Jinjiang City at the amount of CNY 126,040,000 in September 2011, and construction of new plant and production lines were conducted. With respect to the foresaid land use rights, state-owned land use rights certificates of P.R. of China have been obtained. The economic life is 50 years. Those use rights will be terminated upon the period from December 2056 to June 2064 in succession.

The subsidiary – SANSD Jiangsu acquired the land around 150 mu (among which, 145mu land has obtained the state-owned land use rights certificate) for plant construction from Jurong Economic Development Zone Jiangsu Province, at the amount of CNY 58,609,000 in 2010; and the outstanding payment is CNY 830,000 approximately and listed in other payables. Moreover, SANSD Jiangsu acquired the land about 2 mu for plant construction from Jurong Municipal Bureau of Land and Resources Jiangsu Province, at the amount of CNY 391,000 (including land deed tax) in 2015 and the land use rights certificate has been obtained. The foresaid land use rights have the economic life of 50 years and will be terminated upon the period from June 2062 to August 2065 in succession.

Due to significant operating losses, there is an indication that the evaluated asset value of the Consolidated Company has been impaired. The Consolidated Company decides the recoverable amount based on the asset valuation report issued by independent experts, and a part of land use rights have their recoverable amounts lower than the carrying amount. Therefore, subsidiaries – SANSD Fujian and SANSD Jiangsu recognized the impairment loss totally 101,857,000 at the end of 2020 and listed such

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amount in the operating costs and expenses in the consolidated statement of comprehensive income. Asset valuation report issued by the independent experts uses the comparison method by referring to similar properties for valuation and it belongs to Class 3 measurement at fair value.

The Consolidated Company set mortgage for land use rights as the loan guarantee. Please refer to note 27.

XIII. Investment property

2020 Cost Balance on January 1, 2020 Net exchange difference Balance on December 31, 2020 Accumulated depreciation Balance on January 1, 2020 Depreciation costs Net exchange difference Balance on December 31, 2020 Net amount at Dec. 31, 2020 2019 Cost Balance on January 1, 2019 Net exchange difference Balance on December 31, 2019 Accumulated depreciation Balance on January 1, 2019 Depreciation costs Net exchange difference Balance on December 31, 2019 Net amount at Dec. 31, 2019	Houses and buildings	Houses and buildings
	( (	$ 502,328 8,158 $ 510,486 $ 357,355 27,822 6,438 $ 391,615 $ 118,871 $ 520,976 18,648) $ 502,328 $ 341,580 29,058 13,283) $ 357,355 $ 144,973

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The foresaid investment properties are plants and offices leased to the related parties. For details about the lease, refer to note 26.

Depreciation for investment properties of the Consolidated Company shall be calculated on a straight-line basis as per 20-year service life.

Fair value of investment properties of the Consolidated Company was CNY 170 million and 250 million on Dec. 31, 2020 and Dec. 31, 2019 respectively.

Fair value at Dec. 31, 2020 was appraised by using the asset valuation report issued by independent experts for reference.

Fair value at Dec. 31, 2019 was estimated by using the appraisal of the independent experts involved on Dec. 31, 2018 for reference.

XIV. Short-term loans

XV. XVI.	Guaranteed loan Bank loan (note 27) Range of annual interest rate (%) Accounts payable Accounts payable Created through operation Other payables Wages and bonuses payable Payables on equipment Expenses for land use right payable (note 12) Others	December 31, 2020 $ 188,340 4.35 December 31, 2020 $ 232,502 December 31, 2020 $ 34,006 13,820 3,636 29,017 $ 80,479	December 31, 2019	December 31, 2019
			$ 163,780 5.003～5.16 December 31, 2019
			$ 274,373 December 31, 2019
				$ 34,697 13,998 3,578 35,927 $ 88,200

XVII. Post-employment benefit plan

In accordance with the local government regulations of subsidiaries – SANSD Fujian and SANSD Jiangsu, the endowment insurance amounting to 26% of the local standard

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wage and salary shall be paid to the competent government departments, among which 18% shall be contributed by the company and 8% shall be contributed by the employees. For details about endowment insurance borne by the Company in each period, please refer to note 20.

XVIII. Equity

• (I) Share capital Ordinary Shares

Ordinary Shares
Authorized shares Authorized capital stock Issued and fully paid-up shares Issued Share Capital	Unit: 1,000 shares/ thousand TWD December 31, 2020 December 31, 2019 360,000 360,000 $ 3,600,000 $ 3,600,000 268,955 268,955 $ 2,689,547 $ 2,689,547
			360,000 $ 3,600,000 268,955 $ 2,689,547

Issued ordinary shares have the face value of 10 Yuan per share and each share has one right to vote and receive dividends.

• (II) Capital reserves

Change in various capital reserves is as follows:

Premium of share issuance

Used for covering deficit, issuing cash or capitalization Share capital (Note 1) Balance on January 1, 2020 $ 2,959,612 Employee stock option cost (Note 23) - Balance on December 31, 2020 $ 2,959,612 Balance on January 1, 2019 $ 2,959,612 Employee stock option cost (Note 23) - Balance on December 31, 2019 $ 2,959,612	Used for covering deficit, issuing cash or capitalization Share capital (Note 1)	Used for covering deficit, issuing cash or capitalization Share capital (Note 1)	Only used for Reparable loss (Remark 2)		Employee stock option Not for any purpose (Note 3)	Total
		$ 2,959,612 - $ 2,959,612 $ 2,959,612 - $ 2,959,612	$ 1,534 -		$ 53,472 14,149 $ 67,621 $ 21,388 32,084 $ 53,472	$ 3,014,618 14,149 $ 3,028,767 $ 2,982,534 32,084 $ 3,014,618
			$ 1,534
			$ 1,534 -
			$ 1,534

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• Note 1: This type of capital reserves shall be used for covering deficit and also for issuing cash or capitalization if there is no deficit; but capitalization shall be restricted to a certain percent of the paid-in capital stock every year. When organizational structure of the Company is included, it is generated from the difference between equity amount of SANSD Fujian and capital stock issued for the base date of restructuring at the establishment date of the Company, the portion of new shares issued for cash increment over the face value, as well as employee stock compensation granted.

• Note 2: This type of capital reserves is a compensatory stock option for employees where a part of issued shares shall be reserved in accordance with Taiwan Company Act in case of cash increment.

• Note 3: Capital reserves – employee stock option cannot be used for any purpose

• (III) Retained earnings and dividend policy

In accordance with the distribution policy of earnings as defined in the Articles of Association of the Company, if there are earnings in the annual settlement, the Company shall firstly withdraw & pay all related taxes, cover accumulated losses and set aside the legal capital reserves (unless the total legal capital reserves equal to the total amount of issued capital of the Company) and special capital reserves in accordance with the listing (OTC) rules; and then, according to the resolution of the regular shareholders meeting, distribute the dividends at 10% of the distributable remaining earnings of the current year to the shareholders as per the shareholding ratio, among which cash dividends shall account for 10% of the total dividends distributed at the least. The Company shall also allocate the dividends by using the undistributed earnings in previous years according to the resolution of the regular shareholders meeting.

In accordance with these Articles of Association of the Company, legal surplus reserves shall be used to cover deficit and if there is no deficit, the portion of legal surplus reserves in excess of 25% of the total paid-in capital stock shall be distributed in cash, besides capitalization.

In accordance with JGZF Zi No. 1010012865 Letter and Rules Related to Setting Aside Special Surplus Reserves after Following IFRSs etc., the Company shall list and reverse the special surplus reserves.

The Company passed the loss make-up proposals for year 2019 and 2018 through the resolution of regular shareholders meeting held on June 15, 2020 and June 14, 2019 respectively, and the listed special surplus reserves were 256,885,000 and 209,152,000 respectively.

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The Company passed the loss make-up proposal for year 2020 presented by the Board of Directors on March 22, 2021 and the reversed special surplus reserves were 97,388,000 (resolution of the regular shareholders meeting held in June 2021 is required).

• (IV) Exchange differences of the translation of the financial statements in foreign operations

Balance at the beginning of the year Exchange differences of the translation of the financial statements in foreign operations Year-end balance	2020 ( $ 716,985 ) 97,388 ($ 619,597)	2019
		( $ 460,100 ) (256,885) ($ 716,985)

Due to the change in exchange rate between CNY – the functional currency and TWD – the reporting currency of the financial statements in 2020 and 2019, from 4.31 and 4.47 at the beginning of the year to 4.38 and 4.31 at the end of the year, shareholders’ equity recognized directly were increased by 97,388,000 and decreased by 256,885,000 respectively.

XIX. Income

(I) Contract balance

Net notes and accounts receivable	December 31, 2020 $ 289,621	December 31, 2019 $ 292,879		January 1, 2019
				$ 258,469

• (II) Breakdown of customer contract revenue

• 2020

Income type Income from commodity sales Lease income		Reporting department	Reporting department	Reporting department	Reporting department	Reporting department		Total
		SANSD Fujian $ 602,854 18,967 $ 621,821		SANSD Jiangsu $ 386,336 - $ 386,336		Others
						$ - - $ -		$ 989,190 18,967 $ 1,008,157

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2019

Income type Income from commodity sales Lease income	Reporting department SANSD Fujian SANSD Jiangsu Others $ 809,902 $ 430,312 $ 379 17,807 - - $ 827,709 $ 430,312 $ 379	Reporting department SANSD Fujian SANSD Jiangsu Others $ 809,902 $ 430,312 $ 379 17,807 - - $ 827,709 $ 430,312 $ 379	Total
	SANSD Fujian $ 809,902 17,807 $ 827,709	SANSD Jiangsu $ 430,312 - $ 430,312
			$ 1,240,593 17,807 $ 1,258,400

XX. Net pre-tax loss

Net pre-tax loss includes the following items:

(I) Interest income

Interest income
Bank deposit Financial assets at amortized cost Other incomes Subsidy income Others		2020 $ 3,712 28,907 $ 32,619 2020 $ 13,782 492 $ 14,274		2019
				$ 4,409 30,189 $ 34,598 2019
				$ - 1,092 $ 1,092

• (II) Other incomes

Subsidy income is the reward and subsidy granted by Jiangsu Jurong Economic Development Zone Development & Construction Co., Ltd to the subsidiary –SANSD Jiangsu for its contributions to local economic development.

(III) Other profits and losses

Net profits (losses) on foreign currency exchange Profits (losses) from disposal of property, plant and equipment Others	2020 ( $ 20 ) 4 (2,314) ($ 2,330)	2019
		$ 3 ( 5,334 ) ( 307) ($ 5,638)

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(IV) Financial cost Interest on bank loan (V) Non-financial asset impairment loss Property, plant and equipment Right-of-use asset Summarized as per functional category Operating cost Operating expense (VI) Depreciation and amortization expenses Property, plant and equipment Right-of-use asset Investment property Other intangible assets Depreciation expenses summarized as per functional category Operating cost Operating expense Amortization of other intangible assets summarized as per functional category Operating expense

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(VII) Employee benefit

Short-term benefits Retirement benefits (note 17) Defined distribution plan Share-based payment (note 23) Summarized as per functional category Operating cost Operating expense		2020 $ 218,494 1,216 219,710 14,149 $ 233,859 $ 119,250 114,609 $ 233,859		2019
				$ 235,599 12,192 247,791 32,084 $ 279,875 $ 160,557 119,318 $ 279,875

As of Dec. 31, 2020 and Dec. 31, 2019, the Consolidated Company had 819 employees and 777 employees respectively.

The Company allocated the employee & director remunerations by deducting the pre-tax earnings before distribution of employee and director remunerations in the current year, at the ratio no less than 2% and no higher than 1%. The Company had net pre-tax loss in 2020 and 2019 and thus, employee & director remunerations were not estimated and listed.

Information about employee & director remunerations decided by the Company’s Board of Directors can be obtained via the market observation post system of TWEX.

(VIII) Profits (losses) on foreign currency exchange

Total profits on foreign currency exchange Total losses on foreign currency exchange Net profits (losses) on exchange		2020 $ 6,411 6,431) $ 20)		2019
	( (		(	$ 6,939 6,936) $ 3

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21. Income tax

• (I) Income tax recognized in profit or loss

Accounting income and income tax are adjusted as follows:

			2020		2019
Net loss from continuing operations
before tax	($		1,312,802)	($	642,026)
Income tax revenue calculated as
per statutory rate, for net pre-tax
loss	( $		309,903 )	( $	149,823 )
Non-deductible loss when taxable
income is decided			10,723		17,917
Loss carry-forwards unrecognized			118,334		153,223
Temporary difference unrecognized			180,846	(	21,317)
		$	-	$	-

The Company as well as its subsidiaries – BVI SANSD and SANSD Hong Kong are free from business income tax in accordance with the local laws. In addition, the subsidiary – SANSD Hong Kong is expected to obtain the dividend revenue from the earnings of subsidiaries in Chinese mainland, at 10% tax rate as defined in related provisions of the P.R. of China, and related deferred income tax liabilities are recognized.

Since the subsidiary – SANSD Hong Kong Trading has no operating activities in Hong Kong, no tax payable shall be paid in accordance with Hong Kong laws.

The subsidiaries – SANSD Fujian and SANSD Jiangsu adopt the statutory tax rate of 25% in accordance with the Enterprise Income Tax Law of the People’s Republic of China.

• (II) Deferred income tax liabilities

Change in deferred income tax liabilities is as follows:

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2020

2020
Deferred income tax liabilities Temporary difference 10% dividend tax from earnings in Chinese mainland 2019 Deferred income tax liabilities Temporary difference 10% dividend tax from earnings in Chinese mainland		Balance at the beginning of theyear Recognized in profit or loss		Net exchange difference	Year-end balance
		$ 61,321 $ - Balance at the beginning of theyear Recognized in profit or loss		$ 996 Net exchange difference	$ 62,317 Year-end balance
		$ 63,598	$ - (	$ 2,277)	$ 61,321

• (III) Unused loss carry-forwards and deductible temporary difference of deferred income tax assets unrecognized in the consolidated balance sheet

Loss carry-forwards Due in 2020 Due in 2021 Due in 2022 Due in 2023 Due in 2024 Due in 2025 Deductible temporary difference		2020 $ - 76,128 79,786 514,900 595,618 473,344 $ 1,739,776 $ 1,910,571		2019
				$ 56,183 74,911 78,510 506,671 590,950 - $ 1,307,225 $ 1,079,816

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(IV) Related information about unused loss carry-forwards

As of Dec. 31, 2020, related information about loss carry-forwards is as below:

Balance not deducted $ 76,128 79,786 514,900 595,618 473,344 $ 1,739,776	Final deduction year
	2021 2022 2023 2024 2025

22. Loss per share

Net loss and weighted average number of ordinary shares used by the Company for calculation of loss per share are as follows:

Net loss of the current year Number of shares Weighted average number of ordinary shares		2020 $ 1,312,802) 2020 268,955				2019
	(			(	$	642,026) 2019
						268,955

Since there were net losses in 2020 and 2019, potential ordinary shares with dilution effect will not be listed.

Provided that the Consolidated Company chooses to give the employee remuneration by stock or in cash, it shall assume that employee remuneration will be given by stock when diluted earnings per share are calculated, and weighted average number of outstanding shares shall be counted when the potential ordinary stock has dilution effects, so as to calculate the diluted earnings per share. When diluted earnings per share are calculated before issuing the shares for employee remuneration as per the resolution for the next year, dilution effect of the potential ordinary shares shall also be taken into consideration.

23. Shared-based payment agreement

The Company granted 20,000 units of employee stock option in April 2018, and each unit allowed the acquisition of 1,000 ordinary shares. They were granted to the employees satisfying the specified conditions of the Company and its subsidiaries. All stock options have the duration of 10 years, and the holders can exercise the stock

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option at the granted ratio as from 2 years upon issuance. Exercise price of the stock options is the closing price of ordinary shares of the Company at the date of issue, i.e. 11.2 Yuan. Provided that there is any change in ordinary shares of the Company after issuing the stock option, exercise price of the stock options shall be adjusted as per the prescribed formula.

Related information about employee stock option is as below:

Employee stock option Granted in current year Outstanding at the end of period Exercisable at the end of period Weighted average fair value of stock option granted in the current year (Yuan)	Year 2020 and 2019	Year 2020 and 2019
	Unit (thousand) 20,000 20,000 - $ 3.65	Weighted average exercise price (Yuan)
		$ 11.2 11.2

Remuneration costs recognized in 2020 and 2019 were 14,149,000 and 32,084,000 respectively.

24. Capital risk management

The Consolidated Company performs the capital management to maximize the shareholders remuneration by optimizing the balance of debts and equity, on the premise that keeping all group members continuing their operations.

Capital structure of the Consolidated Company is comprised of net debt (i.e. loan minus cash) of the Consolidated Company and equities attributable to the Company owners (i.e. capital, capital reserves, retained earnings and other equities).

The Consolidated Company does not have to abide by other provisions for external capital.

25. Financial instruments

• (I) Fair value information – financial instruments that are not measured at fair value

• Management of the Consolidated Company believes that the carrying amount of financial assets & liabilities that are measured at fair value is close to their fair value.

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(II) Category of financial instruments

December 31, 2020 December 31, 2019

Financial assets Measured at amortized cost (note 1) $ 2,907,045 $ 2,924,373

Financial liabilities Measured at amortized cost (note 2) 660,937 526,353

• Note 1: Balance includes cash, financial assets measured at amortized cost, and notes & accounts receivable, other receivables, refundable deposits, and such financial assets measured at amortized cost.

• Note 2: Balance includes short-term loan, other short-term loan – related parties, accounts payable, other payables and such financial liabilities measured at amortized cost.

• (III) Objectives and policy of financial risk management

Main financial instruments of the Consolidated Company include cash, notes & accounts receivable, accounts payable, other payables and loans. Financial departments of the Consolidated Company shall render services to various business units, and by means of the internal risk reports in accordance with risk analysis as per the risk degree and extent, supervise and control the financial risks related to operation of the Consolidated Company. Those include market risks (including exchange rate and interest rate risks), credit risks and liquidity risks.

The financial departments shall present reports to the management of the Consolidated Company on a regular basis.

1. Market risk

Operating activities of the Consolidated Company will lead to main financial risks such as change in foreign currency exchange rate (see (1) below) and change in interest rate (see (2) below) that should be borne by the Consolidated Company.

• (1) Foreign exchange risk

For carrying amount of the monetary assets and liabilities of the Consolidated Company valued in non-functional currency at the date of balance sheet (including monetary items valued in

• 165 -

non-functional currency that have been written off in the Consolidated Financial Statements), refer to note 30.

Sensitivity analysis

The Consolidated Company is mainly affected by fluctuation of USD exchange rate.

Sensitivity analysis is conducted for the Consolidated Company when CNY (functional currency) exchange rate to USD is increased and decreased by 1%. Sensitivity analysis only includes the outstanding monetary items in foreign currency and conversion at the end of the period shall be adjusted as per 1% exchange rate change. The scope of sensitivity analysis shall be bank loans.

When CNY exchange rate to USD is increased by 1%, net pre-tax loss of the Consolidated Company was increased by 2,000 and 4,000 Yuan in 2020 and 2019 respectively.

(2) Interest rate risk

Carrying amount of the financial assets and liabilities exposed to interest rate risk at the date of balance sheet is as below:

Cash flow interest rate risk Financial assets Financial liabilities	December 31, 2020 $ 1,296,326 188,340	December 31, 2019
		$ 1,329,487 163,780

Sensitivity analysis

The following sensitivity analysis is decided by the interest rate risk of non-derivative instruments at the date of balance sheet. The floating-rate assets and liabilities shall be analyzed by assuming that those outstanding assets and liabilities at the date of balance sheet are still outstanding during the reporting period.

In case that the annual interest rate is increased by 1% and all other variables are changeless, net pre-tax loss of the Consolidated Company shall be decreased by 11,080,000 and 11,657,000 in 2020 and 2019 respectively, mainly for the reason that the Consolidated Company is exposed to the risk of interest rate change for bank deposits and loans.

2. Credit risk

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial losses to the group. As of

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the date of balance sheet, the max credit risk exposed by the Consolidated Company to financial losses arising from possible default of the counterparty is the carrying amount of financial assets recognized in the consolidated balance sheet.

Policies performed by the Consolidated Company are to trade with the counterparty with high reputation and under necessary circumstances, acquire the sufficient guarantee to mitigate the risks of financial losses arising from default. The Consolidated Company shall determine the rating of major customers as per other publicly available financial information and historical records of businesses, distribute the total transaction amount to qualified customers at different credit rating, and review & approve the credit line of the counterparties at fixed intervals, to control the exposure of credit risk.

Accounts receivable are from a variety of customer groups and thus, credit risk has low concentration. The Consolidated Company shall assess the financial conditions of the customers with accounts receivable on an ongoing basis.

3. Liquidity risk

The Consolidated Company supports, by means of management and maintaining sufficient cash, the group operation and mitigates the influence of cash flow fluctuation. Management of the Consolidated Company shall supervise the use of bank facilities and assure the compliance with provisions of the loan contract.

Bank loan is an important source of liquidity for the Consolidated Company. As to the unused bank facilities of the Consolidated Company, refer to the content about financing amount as mentioned in (2) below.

• (1) Liquidity of non-derivative financial liabilities and interest rate risk

• Contractual maturity analysis on the non-derivative financial liabilities shall be prepared in accordance with the earliest date when the Consolidated Company is possibly required to refund as well as the undiscounted cash flow of the financial liabilities (including principal and estimated interest).

Maturity analysis on the non-derivative financial liabilities of the Consolidated Company shall be prepared in the light of the agreed due date.

Cash flow with interest paid as per floating rate shall have the undiscounted interest estimated at the interest rate at the date of balance sheet.

• 167 -

December 31,2020 Non-derivative financial liabilities Non-interest-bearing liabilities Floating-rate instruments December 31,2019 Non-derivative financial liabilities Non-interest-bearing liabilities Floating-rate instruments	1~3 months $ 259,441 1,805 $ 261,246 $ 291,976 58,099 $ 350,075	3 months - 1year	3 months - 1year
			$ 213,156 190,311 $ 403,467 $ 70,597 111,366 $ 181,963

Amount of floating-rate instruments for the foresaid non-derivative financial liabilities will vary with the difference between the floating interest rate and the estimated rate at the date of balance sheet.

• (2) Financing amount

Secured bank loan limit Used amount Unused amount	Unit: RMB 1,000 December 31, 2020 December 31, 2019 $ 43,000 $ 38,000 57,381 62,381 $ 100,381 $ 100,381	Unit: RMB 1,000 December 31, 2020 December 31, 2019 $ 43,000 $ 38,000 57,381 62,381 $ 100,381 $ 100,381	Unit: RMB 1,000 December 31, 2020 December 31, 2019 $ 43,000 $ 38,000 57,381 62,381 $ 100,381 $ 100,381
			$ 38,000 62,381 $ 100,381

• (IV) Information about transfer financial assets

• Transferred notes receivable unrecognized

The Consolidated Company has transferred a part of receivable commercial acceptance bill in Chinese mainland by endorsement to the supplier for payment. If the receivable commercial acceptance bill cannot be recovered upon maturity, the transferee is entitled to ask the Consolidated Company to pay the outstanding balance. Therefore, the Consolidated Company does not transfer the major risk and remuneration with respect to the receivable commercial acceptance bill and recognizes all receivable commercial acceptance bills on an ongoing basis.

• 168 -

As of Dec. 31, 2020 and Dec. 31, 2019, carrying amount of the receivable commercial acceptance bill that had been transferred but not recognized was 66,097,000 and 76,270,000 respectively.

1. Transferred notes receivable derecognized

The Consolidated Company has transferred a part of the banker’s acceptance bill receivable in Chinese mainland by endorsement to the supplier for payment. Since substantially all the risks and remunerations related to the bill have been transferred, the Consolidated Company derecognizes the receivable banker’s acceptance bill transferred and the corresponding accounts payables. But if the banker’s acceptance bill unrecognized is not cashed upon maturity, the Supplier is still entitled to ask the Consolidated Company to discharge and thus, the Consolidated Company shall participate in those bills on an ongoing basis.

The max loss from risk exposure suffered by the Consolidated Company for ongoing participating in the banker’s acceptance bills unrecognized is the book value of the banker’s acceptance bill that has been transferred but not due yet. As of Dec. 31, 2020 and Dec. 31, 2019, the max loss was 13,399,000 and 19,851,000 respectively and those bills would expire within 6 months after the date of balance sheet. Giving consideration the credit risk related to the banker’s acceptance bills derecognized, the Consolidated Company deems that the fair value from its ongoing participation is not high.

In 2020 and 2019, the Consolidated Company did not recognize any profit or loss when the receivable banker’s acceptance bill was transferred; amount in current year and accumulated amount from ongoing participating in those bills were not recognized in any profit or loss.

26. Related party transaction

At the time of consolidation, transaction between the consolidated companies, account balance, revenues and expenses have been written-off in full and thus not disclosed in the Notes. Transactions with related parties are as follows:

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• (I) Name of related party and relationship

Name of related party Relationship with the Consolidated Company Jinfada (Fujian) Shoes Other related parties (responsible person has a and Plastic Co., Ltd relationship within the second degree of kinship with the Board Chairman of the Company) Fujian Wankai Shoes Other related parties (the Board Chairman of the Co., Ltd. Company acts as the supervisor of the subsidiary – SANSD Fujian) Ding Jinzao Board Chairman of the Company Ding Zhimeng General Manager of the Company Ding Zhiwei Director of the subsidiary – SANSD Fujian Ding Jindi Supervisor of the subsidiary – SANSD Fujian

• (II)

• Operating lease

• The subsidiary – SANSD Fujian entered the contract of plant & office lease as well as the contract of land & plant lease with Jinfada (Fujian) Shoes and Plastic Co., Ltd, with the lease term expired at the end of December 2021, at the rent calculated based on leased area in accordance with the contract. In 2020 and 2019, rental income was 15,832,000 and 16,534,000 respectively and listed in the rental income item. In 2020 and 2019, the rental expense was 15,832,000 and 16,534,000 respectively and listed in the operating cost item.

• The subsidiary – SANSD Fujian entered the contract of plant lease with Fujian Wankai Shoes Co., Ltd, with the lease term expired at the end of August 2022, at the rent calculated based on leased area in accordance with the contract. In 2020 and 2019, rental income was 610,000 and 167,000 and listed in the rental income item.

• (III) Others

• The subsidiary – SANSD Fujian offered the residences (listed in property, plant and equipment) to the directors and supervisors for use. As of Dec. 31, 2020 and Dec. 31, 2019, the book value was 2,897,000 and 3,317,000 respectively.

• The subsidiary – SANSD Fujian entered the commission contract with Fujian Wankai Shoes Co., Ltd. In 2019, the processing cost was 649,000 and listed in the operating cost item. Since it is not entrusted to a related party, the transaction price cannot be compared and the payment shall be made monthly (30 days).

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• (IV) Borrowing from related parties

December 31, 2020 Other short-term loans – related parties Ding Jinzao $ 159,616

The subsidiary – SANSD Jiangsu borrowed from Ding Jinzao successively as from March 2020 and the agreed borrowing period was expired on March 15, 2021, free from interest and collaterals.

• (V) Rewards given to main management

Total remunerations given to the directors and other main management in 2020 and 2019 are as below:

Short-term benefits Share-based payment	2020 $ 13,984 11,886 $ 25,870	2019	2019
			$ 13,351 26,951 $ 40,302

1. Pledged Assets

The Consolidated Company shall provide the following assets as the collaterals for financing and payment of supplier’s receivables:

Notes receivable Property, plant and equipment – buildings and structures Right-of-use assets – land use right	December 31, 2020 $ 66,097 291,527 169,643 $ 527,267	December 31, 2019	December 31, 2019
			$ 76,270 340,513 222,285 $ 639,068

28. Significant unrecognized commitments

Unrecognized commitments of the Consolidated Company are as below:

Purchase of real property, factory buildings and equipment	December 31, 2020 $ 1,014	December 31, 2019	December 31, 2019
			$ 13,282

29. Miscellaneous

Under the effect of COVID-19 pandemic, the subsidiaries – SANSD Fujian and SANSD Jiangsu delayed its resumption of operation and order receiving was affected, thus the consolidated operating revenue was significantly decreased in 2020. With the mitigation of the pandemic, operation of the Consolidated Company has gradually returned to normal.

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According to the available information as of the date of balance sheet, the Consolidated Company has considered the economic implications of COVID-19 on critical accounting estimates. For details, refer to note 5 and note 9.

30. Information about foreign-currency financial assets and liabilities with significant influence

The following information was summarized according to the foreign currencies other than the functional currency of various members of the Consolidated Company. The exchange rates disclosed were used to convert the foreign currencies into the functional currency. The significant financial assets and liabilities denominated in foreign currencies were as follows:

Unit: USD thousand/ TWD

		Unit: USD thousand/ TWD
December31,2020 Financial assets under monetary items USD December 31,2019 Financial assets under monetary items USD	Foreign currency $ 8 12	Thousand yuan/ exchange rate Exchange rate Carrying amount 6.52 (USD: RMB) $ 239 6.98 (USD: RMB) 371
		6.52 (USD: RMB) 6.98 (USD: RMB)

The Consolidated Company mainly bore the risk of foreign currency exchange rate in USD. Profits and losses on foreign currency exchange (including those realized and unrealized) in 2020 and 2019 are less.

1. Note disclosures

2. (I) Major transaction matters and (II) information related to re-investment enterprise

   • Financing provided: Schedule I.

   • Endorsement/ guarantee provided: None.

   • Marketable securities held at the end of period (excluding investment in subsidiaries): None.

   • Marketable securities acquired or disposed of at costs or prices of at least TWD 300 million or 20% of the paid-in capital: None.

3. 172 -

4. Acquisition of individual real estate at costs of at least TWD 300 million or 20% of the paid-in capital: None.

5. Disposal of individual real estate at costs of at least TWD 300 million or 20% of the paid-in capital: None.

6. Amount of purchase and sale with the related parties amounting to at least TWD 100 million or 20% of the paid-in capital: None.

7. Receivables from related parties amounting to at least TWD 100 million or 20% of the paid-in capital: Schedule II.

8. Derivative transactions: None.

9. Others: Circumstances and amount of business relation and major transactions between parent company and subsidiaries, and between various subsidiaries: Schedule III.

10. 11 Information about invested companies: Schedule IV.

11. (II) Information related to investment in P.R. China

12. Name of invested companies in Chinese mainland, main business items, paid-in capital, investment method, capital inflow and outflow, shareholding ratio, profit & loss in current year, investment profits and losses recognized, book value of investment at the end of period, investment profit & loss repatriated, and investment norm in Chinese mainland: Schedule V.

13. Major transaction conducted with the invested companies in Chinese mainland directly or indirectly via the third party, and price, payment terms and unrealized profits or losses:

    • (1) Purchase amount and percentages, ending balance and percentage of corresponding payables: None.

    • (2) Sale amount and percentages, ending balance and percentage of corresponding receivables: None.

    • (3) Amount of property transaction and amount of profits and losses from the transaction: None.

    • (4) Ending balance of bill endorsement or collaterals and purpose: None.

    • (5) Max balance, ending balance, range of interest rate and total current interest of financing: Schedule I.

    • (6) Other transaction matters that may substantially affect the current profit or loss or financial conditions: None.

14. 173 -

15. (III) Information about main shareholders

Name, number of shares held and shareholding ratio of the shareholders with the ratio over 5%: Schedule 6

32. Information about departments

It means the information provided to the main operating decision-makers to allocate resources and assess the department performance, laying emphasis on the category of every product or service delivered or rendered. Reporting departments of the Consolidated Company are as below:

• ․ SANSD Fujian – mainly engages in the manufacturing and sale of EVA blended foam by recycling of waste plastics.

• ․ SANSD Jiangsu – mainly engages in the manufacturing and sale of EVA blended foam by recycling of waste plastics.

• ․ Other departments: Asia Plastic Recycling Holding Limited, BVI SANSD, SANSD Hong Kong and SANSD Hong Kong Trading: For the business scope, see note 10.

• (I) Revenue and operating results of the Consolidated Company are analyzed as per the reporting departments as below:

2020 Revenue from customers other than parent company and consolidated subsidiaries Revenue from parent company and consolidated subsidiaries Total income Department loss Interest income Other incomes Other profits and losses Financial cost Net pre-tax loss	SANSD Fujian $ 621,821 747 $ 622,568 ($ 1,087,313)		SANSD Jiangsu		Others $ - - $ - $ 28,446	Adjustment and write-off $ - ( 747) ($ 747) $ -		Consolidated
		(	$ 386,336 - $ 386,336 $ 233,491)	(		( (	$ 1,008,157 - $ 1,008,157 ( $ 1,349,250 ) 32,619 14,274 ( 2,330 ) ( 8,115) ( 1,312,802 )

(To be continued)

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(Continued)

Income tax Net after-tax loss Total assets Total liabilities 2019 Revenue from customers other than parent company and consolidated subsidiaries Revenue from parent company and consolidated subsidiaries Total income Department loss Interest income Other incomes Other profits and losses Financial cost Net pre-tax loss Income tax Net after-tax loss Total assets Total liabilities	SANSD Fujian $ 6,369,774 $ 778,030 $ 827,709 143,141 $ 970,850 ($ 502,773) $ 7,352,603 $ 799,888		SANSD Jiangsu $ 1,086,436 $ 730,763 $ 430,312 18,014 $ 448,326 ($ 110,163) $ 1,257,133 $ 722,188		Others $ 809,391 $ 961,818 $ 379 - $ 379 ($ 50,025 $ 856,636 $ 948,041		Adjustment and write-off ($ 1,732,735) ($ 1,732,735) $ - ( 161,155) ($ 161,155) $ - ($ 1,879,704 ) ($ 1,879,704)		Consolidated
								$ - ($ 1,312,802) $ 6,532,866 $ 737,876 $ 1,258,400 - $ 1,258,400 ( $ 662,961 ) 34,598 1,092 ( 5,638 ) ( 9,117) ( 642,026 ) - ($ 642,026) $ 7,586,668 $ 590,413

Department loss refers to the loss suffered by various departments, exclusive of interest income, financial cost, profit or loss on foreign currency exchange and income tax expenses. This measurement amount is provided to the main operating decision-maker, to allocate resources to various departments and assess their performance.

• (II) Other department information – depreciation and amortization

SANSD Fujian SANSD Jiangsu		2020 $ 228,550 54,166 $ 282,716		2019
				$ 240,538 59,083 $ 299,621

(III) Major product incomes

Main product revenues from continuing operations of the Company and its subsidiaries are analyzed as follows:

Ordinary sheets	2020 $ 193,644	2019
		$ 326,446

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Bag sheets Special sheets Floor mats High elastic foam Sole sheets Others	188,392 261,685 78,273 23,882 10,111 252,170 $ 1,008,157	211,872 318,295 43,044 37,620 6,959 314,164 $ 1,258,400

• (IV) Information about region category

Revenues of continuing operations from external customers of the Company and its subsidiaries are classified as per the operation regions and the non-current assets are all within China.

• (V) Information of major clients

In 2020 and 2019, there is no any revenue from a single customer exceeding 10% of the total revenue of the Consolidated Company.

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Financing provided

Jan. 01, 2020 ~ Dec. 31, 2020

Schedule I

Unit: *10[3] in New Taiwan Currency

(Unless otherwise indicated)

No.	Financing company	Counterparty	Financial statement account	Related party	Max balance for the current year	Ending balance	Amount actually drawn (note 3)	Interest rate interval (%)	Nature of financing	Transaction amount	Reason required for short-term financing	Allowance for bad debt	Collateral	Collateral	Financing limits for each borrowing company (note 1)	Max limit of financing (note 2)	Remarks
													Name	Value
1 2 3 4 5	SANSD Hong Kong SANSD Hong Kong SANSD (Fujian) Plastic Co., Ltd. SANSD (Fujian) Plastic Co., Ltd. SANSD (Fujian) Plastic Co., Ltd.	SANSD (Jiangsu) Environmental Protection Technology Co., Ltd. The Company SANSD Hong Kong SANSD Hong Kong The Company	Other receivables – related parties Other receivables – related parties Other receivables – related parties Other receivables – related parties Other receivables – related parties	Yes Yes Yes Yes Yes	$ 657,000 1,314,000 1,314,000 109,500 219,000	$ 657,00 1,314,00 1,314,00 109,50 219,00	$ 196,531 756,445 744,046 - -	3.5 - - - -	Short-term financing required Short-term financing required Short-term financing required Short-term financing required Short-term financing required	$ - - - - -	Operating capital and equipment acquisition Operating capital Operating capital Operating capital Operating capital	$ - - - - -	None None None None None	$	$ 2,692,383 2,692,383 2,236,698 2,236,698 2,236,698	$ 2,692,383 2,692,383 2,236,698 2,236,698 2,236,698

Note 1: The amount available for lending to each borrowing company shall not exceed 40% of the net worth of the financing company.

• Note 2: The max limit of financing is 40% of the net worth of the financing company.

• Note 3: It has been written off when the Consolidated Financial Statements are prepared.

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Accounts receivable from the related parties at least TWD 100 million or 20% of the paid-in capital

December 31, 2020

Schedule II							Unit: *103in New Taiwan Currency (Unless otherwise indicated)	Unit: *103in New Taiwan Currency (Unless otherwise indicated)
Company name	Name of counterparty	Relationship	Balance of accounts receivable from the related parties (note 4)	Rate of turnover	Overdue accounts receivable from the relatedparties		Amount recovered after due date of accounts receivable from the related parties	Allowance for bad debt
					Amount	Mode of disposal
SANSD Hong Kong SANSD (Fujian) Plastic Co., Ltd.	The Company SANSD (Fujian) Plastic Co., Ltd. SANSD (Jiangsu) Environmental Protection Technology Co., Ltd. SANSD Hong Kong	Subsidiary VS parent company Subsidiary VS subsidiary Subsidiary VS subsidiary Subsidiary VS subsidiary	$ 765,025 (Note 1) 623,171 (Note 2) 196,531 (Note 3) 744,046 (Note 1)	- - - -	$ - - - -	- - - -	$ - - - -	$ - - - -

Note 1: Capital loan and advance

Note 2: Dividends receivable

Note 3: Capital loan

Note 4: It has been written off when the Consolidated Financial Statements are prepared.

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Business relation and major transactions between parent company and subsidiaries

Jan. 01, 2020 ~ Dec. 31, 2020

Schedule III

Unit: *10[3] in New Taiwan Currency (Unless otherwise indicated)

No.	Name of trader	Counterparty	Relationship with the trader		Transaction details	Transaction details
				Item	Amount	Transaction conditions	% to total consolidated operating revenue(asset)
1 1 1 1 2 2 2 2 2 3 4	SANSD Hong Kong SANSD Hong Kong SANSD Hong Kong SANSD Hong Kong SANSD (Fujian) Plastic Co., Ltd. SANSD (Fujian) Plastic Co., Ltd. SANSD (Fujian) Plastic Co., Ltd. SANSD (Fujian) Plastic Co., Ltd. SANSD (Fujian) Plastic Co., Ltd. SANSD (Jiangsu) Environmental Protection Technology Co., Ltd. SANSD Hong Kong Trading Co., Ltd.	The Company SANSD (Fujian) Plastic Co., Ltd. SANSD (Jiangsu) Environmental Protection Technology Co., Ltd SANSD (Jiangsu) Environmental Protection Technology Co., Ltd The Company SANSD Hong Kong SANSD Hong Kong Trading Co., Ltd. SANSD (Jiangsu) Environmental Protection Technology Co., Ltd. SANSD (Jiangsu) Environmental Protection Technology Co., Ltd. SANSD (Fujian) Plastic Co., Ltd. The Company	Subsidiary VS parent company Subsidiary VS subsidiary Subsidiary VS subsidiary Subsidiary VS subsidiary Subsidiary VS parent company Subsidiary VS subsidiary Subsidiary VS subsidiary Subsidiary VS subsidiary Subsidiary VS subsidiary Subsidiary VS subsidiary Subsidiary VS parent company	Other receivables Other receivables Other receivables Interest income Other receivables Other receivables Other receivables Sales revenue Accounts receivable Accounts receivable Other receivables	$ 765,025 623,171 196,531 6,226 95,395 744,046 58,463 747 12,624 2,505 74,925	Capital loan and advance, as agreed by the parties Dividends receivable Capital loan, as agreed by the parties Capital loan and interest income Advance, as agreed by the parties Capital loan, as agreed by the parties Advance, as agreed by the parties No same category of asset transaction with those other than the related parties No same category of asset transaction with those other than the related parties No same category of asset transaction with those other than the related parties Advance, as agreed by the parties	12.00 10.00 3.00 1.00 1.00 12.00 1.00 - - - 1.00

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Related information of invested companies

Jan. 01, 2020 ~ Dec. 31, 2020

Schedule IV

Unit: *10[3] in New Taiwan Currency (Unless otherwise indicated)

Investor name	Name of invested company	Area	Main business items	Initial investment amount (note 1)	Initial investment amount (note 1)	Held at the end of year	Held at the end of year	Held at the end of year	Loss of the invested company in current year	Investment loss recognized in current year	Remarks
				End of the year	Beginning of the year	No. of shares	Ratio (%)	Carrying amount
The Company SANSD Holing Co., Ltd SANSD Hong Kong	SANSD Holing Co., Ltd SANSD Hong Kong SANSD Hong Kong Trading Co., Ltd.	B.V.I Hong Kong Hong Kong	International investment International investment Trade of bulk chemical raw materials	$ - - 128,334	$ - - 126,283	1 1 1	100.00 100.00 100.00	$ 6,730,754 6,730,957 16,790	( $ 1,289,454 ) ( 1,289,454 ) ( 5,114 )	( $ 1,289,454 ) ( 1,289,454 ) ( 5,114 )	Notes 2 & 6 Notes 3 & 6 Notes 4 & 6

• Note 1: The Company issued 120,000,000 shares (at the face value of TWD 10 per share), acquired 100% stock rights of SANSD Fujian at the price of HKD 0.675 per share, and applied for organizational restructuring with respect to the purchase and sale of stocks listed in TWSE. After restructuring, the Company indirectly held 100% stock rights of SANSD Fujian via SANSD Holding Co., Ltd and SANSD Hong Kong.

• Note 2: The initial investment amount was USD 1 at beginning and end of the current year.

• Note 3: The initial investment amount was HKD 1 at beginning and end of the current year.

• Note 4: The initial investment amount was RMB 29,300,000 at beginning and end of the current year.

• Note 5: For detailed information about the invested companies in Chinese mainland, refer to Schedule 5.

• Note 6: It has been written off when the Consolidated Financial Statements are prepared.

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Information related to investment in P.R. China

Jan. 01, 2020 ~ Dec. 31, 2020

Schedule V

Unit: *10[3] in New Taiwan Currency (Unless otherwise indicated)

Name of invested companies in Chinese mainland	Main business items	Main business items	Paid-in capital	Way of contribution	Way of contribution	Cumulative investment amount from Taiwan at the beginning of the current year	Investment amount paid or recovered in the currentyear	Investment amount paid or recovered in the currentyear	Investment amount paid or recovered in the currentyear	Cumulative investment amount from Taiwan at the end of the current year	Loss of invested company in current year	Shareholdin g ratio % from direct or indirect investment of the Company	Investment loss recognized in current year	Book value of investment at end of the year	Investment income returned as of end of the currentyear	Remarks
							Outward remittance	Recovery
SANSD (Fujian) Plastic Co., Ltd. SANSD (Jiangsu) Environmental Protection Technology Co., Ltd.	Manufacturing and sale of EVA foam related products Manufacturing and sale of EVA foam related products		$ 734,000 1,424,000	Re-invest companies in Chinese mainland by investing and setting companies in a third region; Re-invest companies in Chinese mainland by investing and setting companies in a third region;		$ - -	$ - -	$ - -		$ - -	( $ 1,054,561 ) ( 185,050 )	100.00 100.00	( $ 1,054,561 ) ( 185,050 )	$ 5,591,744 355,673	$ - -	Note 1 Note 2
Investor name		Cumulative investment amount paid from Taiwan to Chinese mainland at the end of the current year			Investment amount approved by the Investment Commission of the Ministry of Economic Affairs				Investment norm for the Company in Chinese mainland
-		$ -			$ -				$ -

Note 1: The paid-in capital is HKD 200,000,000.

Note 2: The paid-in capital is USD 50,000,000.

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Asia Plastic Recycling Holding Ltd. And its subsidiaries

Information about main shareholders

December 31, 2020

Schedule 6

Name of major shareholders	Share	Share
	Number of shares held	Shareholding ratio(%)
Investment account of Dinshi Holding Group under the custody of Yuanta Bank by entrustment Investment account of Ding Jinzao under the custody of Mega International Commercial Bank by entrustment	38,888,293 15,993,089	14.45 5.94

• Note 1: Information on major shareholders in this table includes all shareholders holding 5% or more of common or preferred stocks (including treasury stocks) of which non-physical entry and delivery have been completed as of the last business day of the current quarter, as calculated by Taiwan Depository & Clearing Corporation. There may be some difference between the capital stock recorded in these Consolidated Financial Statements and the number of shares for which non-physical entry and delivery have been completed actually, possibly arising from different bases of preparation and calculation.

• Note 2: Provided that any shareholder delivers its shares for trust, the foresaid information shall be disclosed by individual accounts of the settlor opening the trust account in the name of the trustee. With regard to the insider’s declaration for stock rights over 10% in accordance with the securities law (shares held shall include those held by the shareholders themselves, plus shares that have been delivered for trust where the shareholders possess the right of decision over the trust property), refer to the market observation post system.

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Appendix II.

The Illustrations of Matters Distinct from the Shareholders Rights Protection in Taiwan

Discrepancy Matters	Cayman Islands Laws and Regulations	Relevant Articles from M&A
A special resolution shall mean the resolution approved by a majority of the voting rights exercised by the members present at a general meeting attended by two-thirds or more of the shareholders. If the total number of shares represented by shareholders attending a shareholders' meeting is not sufficient to meet the criteria as specified in the abovementioned, the said resolution may be adopted by a larger majority representing two thirds of the votes at a shareholders' meeting attended by shareholders representing a majority of the total number of issued shares.	The special resolution provided for in Article 60 of Cayman Islands Companies Law shall mean a resolution that has been passed by a majority of at least two-thirds of such members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting.	For the purpose of complying with the requirement under the laws and regulations applicable to the public companies and in regard to the presence and voting rights of the shareholders meetings, we, Asia Plastic Recycling Holding Limited (hereinafter referred to the “Company”) take into account the gist of Tai-Zheng-Shang No. 0991701319 written explanations issued by the Taiwan Stock Exchange on April 13, 2010 and stipulate in Article 31 and Paragraph (1) of Article 2 that the special resolution shall be passed by a majority of at least two-thirds of votes cast by such members as, being entitled to do so, present at a general meeting of the Company.

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A company choosing to issue no par value shares shall not convert its shares into par value shares.	Pursuant to the last part of subsection (1) of section 8 of Cayman Islands Companies Law, no exempted company shall divide its capital into both shares of a fixed amount and shares without nominal or par value. Accordingly, based on the opinion of Cayman lawyer, Ogier (hereinafter referred to “Ogier”), in accordance with the aforesaid rule and practical process of issuance of shares, an exempt company cannot convert its shares from par value shares to no par value shares, or vice versa.	Because all shares issued by the Company have been par value shares, the Company cannot issue no par value shares or convert its shares to no par value shares. The matter as set forth in the leftmost column does not apply to the Company. For avoidance of doubt, the Company, after evaluating the matter as set forth in the leftmost column and its current status, amended Paragraph (5) of Article 7 of current Eleventh Amended and Restated Memorandum and Articles of Association (hereinafter referred to “Articles of Association”), which provides that “The Company shall neither issue Shares without par value nor convert its Shares from Shares with par value to Shares without par value.”
In the event that the general meetings are held outside the Republic of China (“R.O.C.”), the application of approval shall be filed to the Taiwan Stock Exchange	There are no relevant laws and regulations applicable to the matter as set forth in the left column in the Cayman Islands.	Article 25 of Articles of Association provides that “During the Relevant Period, all general meetings shall be held in the R.O.C.” There is no exception to this,so there

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within two (2) days after obtaining the approval from the board of directors or the permit to the member to convene the general meeting.		is no need to stipulate that the approval from the competent authority or the relevant application is required to convene the general meetings outside the R.O.C.
Any or a plural number of shareholder(s) of a company who has (have) continuously held three percent (3%) or more of the total number of outstanding shares for a period of one year or a longer time may, by filing a written proposal setting forth therein the subjects for discussion and the reasons, request the board of directors to call a special meeting of shareholders. If the board of directors fails to give a notice for convening a special meeting of shareholders within fifteen (15) days after the filing of the request, the proposing shareholder(s) may, after obtaining an approval from the competent authority, convene a special meeting of shareholders on his/their own.	There are no relevant laws and regulations applicable to the matter as set forth in the left column in the Cayman Islands.	There is no competent authority responsible for approving shareholders to convene a special meeting of shareholders on his/their own in the Cayman Islands; hence Article 26 of Articles of Association provides that “Any one or more Member(s) holding at least three percent (3%) of the total issued Shares of the Company for a period of one (1) year or a longer time may, by depositing the requisition notice specifying the proposals to be resolved and the reasons, request the Board to convene an extraordinary general meeting. If the Board does not give notice to Members to convene such meeting within fifteen (15) days after the date of the requisition notice, the proposing Member(s) may convene a general meeting.”

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		without obtaining the approval from the competent authority first.
The company shall adopt the written ballot and electronic transmission as the methods for exercising the voting power of a Member in a general meeting.	There are no relevant laws and regulations applicable to the matter as set forth in the left column in the Cayman Islands.	A proposed amendment to Articles of Association incorporating the matter set forth in the leftmost column is to be approved in the most recent general meeting held after the general meeting held for year 2021.
1. A company shall not cancel its shares, unless a resolution on capital reduction has been adopted by its shareholders' meeting; and capital reduction shall be effected based on the percentage of shareholding of the shareholders pro rata. 2. A company reducing its capital may return share prices (or the capital stock) to shareholders by properties other than cash; the returned property and the amount of such substitutive capital contribution shall require a prior approval of the	Articles 14 and 18 of Cayman Islands Companies Law adopt strict regulations for reduction of share capital both in procedure and in substance, and the relevant regulations are mandatory requirements; therefore, when implementing reduction of share capital, a company shall do so in compliance with such mandatory regulations, whose application may not be excluded by any provision in the Articles of Association.	Based on Ogier’s opinion, the Company applies the approach of purchase and cancellation of its shares held by the shareholders in order to comply with the requirement set forth in the leftmost column. Paragraph (1) of Article 18-1 of Articles of Association provides that “Subject to the Law and the Applicable Listing Rules, the Company may carry out a compulsorily purchase and cancellation of its Shares on a pro rata basis (rounded up or down to the nearest whole number) among the Shareholders in proportion to the number of Shares held by each such Shareholder subject

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shareholders’ meeting and obtain consents from the shareholders who receive such property. 3. The board of directors shall first have the value of such property and the amount of such substitutive capital contribution set forth in the preceding paragraph audited and certified by a certified public accountant before the shareholders’ meeting.		to approval by a Special Resolution. The purchase price payable to the Shareholders in connection with a purchase of Shares described in the preceding sentence may be paid in cash or in kind. Any purchase price to be paid in kind shall be subject to approval by a Special Resolution and shall be subject to individual consent by the Shareholder(s) receiving such payment in kind. Prior to convening the general meeting for approving such purchase of Shares, the Board shall determine the monetary equivalent value of any purchase price to be paid in kind and have such value audited and certified by a certified public accountant in the R.O.C.”
1. A company may explicitly provide for in its Articles of Incorporation that the surplus earning distribution or loss off-setting proposal may be proposed at the close of each	There are no relevant laws and regulations applicable to the matter as set forth in the left column in the Cayman Islands.	According to Paragraph (2) of Article 105 of Articles of Association, the dividend frequency of the Company is yearly and the matter as set forth in the leftmost column does not apply to the Company.

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	quarter or each half
	fiscal year.
2.	The proposal of
	surplus earning
	distribution or loss
	off-setting for the
	first three quarters or
	half fiscal year,
	together with the
	business report and
	financial statements,
	shall be forwarded to
	supervisors for their
	auditing, and
	afterwards be
	submitted to the
	board of directors for
	approval.
3.	A company
	distributing surplus
	earning in accordance
	with the provision of
	the preceding
	paragraph shall
	estimate and reserve
	the taxes and dues to
	be paid, the losses to
	be covered and the
	legal reserve to be set
	aside. Where such
	legal reserve amounts
	to the total paid-in
	capital, this provision
	shall not apply.
4.	A company
	distributing surplus
	earningin the form of

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new shares to be
issued by the
company in
accordance with the
provision of the
second paragraph
shall be approved by
a resolution adopted
by a majority of the
shareholders present
who represent
two-thirds or more of
the total number of its
outstanding shares of
the company. If the
total number of
shares represented by
the shareholders
present at a meeting
of shareholders is less
than the threshold
specified in the
preceding paragraph,
the resolution may be
adopted by a large
majority (2/3 or
more) vote of the
shareholders present
at that meeting of
shareholders attended
by the shareholders
representing a
majority of the total
number of the
outstanding shares of
the company. If
such surplus earning
is distributed in the

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form of cash, it shall be approved by a meeting of the board of directors. 5. Surplus earning distribution or loss off-setting proposal by a company in accordance with the provisions of the preceding four paragraphs shall be made based on the financial statements audited or reviewed by a certified public accountant.
Authorities and Responsibilities of Supervisors	There are no relevant laws and regulations applicable to the matter as set forth in the left column in the Cayman Islands.	Because the Company adopts audit committee in lieu of the supervisor system, the matter as set forth in the leftmost column does not apply to the Company.
1. Shareholder(s) who has/have been continuously holding 1% or more of the total number of the outstanding shares of the company over six months may request in writing the supervisors of the company to institute, for the company, an action against a	There are no relevant laws and regulations applicable to the matter as set forth in the left column in the Cayman Islands.	The Company adopts audit committee in lieu of the supervisor system. Taking into account relevant provisions in the Company Act, Article 75 of Articles of Association provides that One or more Members holding one percent (1%) or more of the total number of the total issued Shares continuouslyfor aperiod

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director of the company, and Taiwan Taipei District Court may be the court of jurisdiction for the first instance. 2. In case the supervisors fail to institute an action within 30 days after having received the request made by shareholder(s), then the shareholder(s) filing such request may institute the action for the company, and Taiwan Taipei District Court may be the court of jurisdiction for the first instance. 3. In addition to the circumstance where the board of directors should have convened a general meeting but does not or is unable to convene a general meeting, a supervisor may also, for the benefit of the company, call a general meeting when it is deemed necessary.		of six (6) months or a longer time may request in writing any Supervisor or any Independent Director of the audit committee of the Company to file, on behalf of the Company, an action against a Director with a court having proper jurisdiction, including the ROC Taipei District Court. In case such Supervisor or Independent Director fails to file such action within thirty (30) days after receipt of the request aforesaid, the Members making such request may file the action for the Company. Pursuant to the Tai-Zheng-Shang-Er-Zi No. 1101701488 (臺證上 二字第1101701488 號) written announcement issued by the Taiwan Stock Exchange on May 14, 2021, a proposed deletion of provision in relation to an independent director’s power to call a general meeting when it is deemed necessary is to be approved in the most

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recent general meeting held after the general meeting held for year 2021.

• 192 -