Chateau — Audit Report / Information 2020

Nov 12, 2020

Ticker Symbol：2722

Chateau International Development Company Limited

Individual Financial Statement and Audit Report of the Accountant Year 2020 and 2019

Address: No.15, Aly. 2, Ln. 40, Shengbei Rd., Hengchun Township, Pingtung County 946004, Taiwan (R.O.C.) Tel: (08)886-2377

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§ TABLE OF CONTENT §

Item Page 1. Cover 1 2. Content 2 3. Independent Auditors’ Report 3～6 4. Individual balance sheet 7 5. Individual statement of comprehensive income 8～9 6. Individual statement of changes in equity 10 7. Individual cash flow statement 11～12 8. Notes to the Individual financial statement (1) Company history 13 (2) Approval of the date and procedure of the financial report 13 (3) Application of newly issued and revised standards and interpretations 13～15 (4) Summary Explanation of Significant Accounting Policies 15～31 (5) Major sources of uncertainty in major accounting judgments, estimates and assumptions 30～31 (6) Explanation of material accounting items 31～61 73～74 (7) Related party transaction 61～64 (8) Pledged assets 64 (9) Significant contingent liabilities and unrecognized contractual commitments 65～67 (10) Other 67 (11) Note Disclosure Matters 1. Information about major transactions 68～70 2. Relevant information about reinvestment business 68，71 3. Investment information of China 68 4. Information on major shareholders 68，72 9. List of important accounting items 75～90

financial report Note number - - - - - - - 1 2 3 4 5 6～27 28 29 30 31 32 32 32 32 -

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Independent Auditors’ Report (Parent Company Only Financial Statements)

The Board of Directors and Shareholders Chateau International Development Company Limited:

Opinion

The individual balance sheet of Chateau International Development Company Limited (Chateau Hotels & Resorts) on December 31, 2019 and 2020, individual statement of comprehensive income, statement of comprehensive income, individual Statement of changes in equity, individual Cash flow statement, and individual Financial Statements or Notes (including a summary of significant policies of accounting) on January 1 to December 31, 2019 and 2020, were audited and completed by the accountant.

According to the opinion of the accountant, individual Financial Statements, in all major aspects, was in accordance with the regulations governing the preparation of financial reports by securities issuers and approved by the Financial Supervisory Commission, and issued effective IFRS, IAS, IFRIC Interpretations, and SIC Interpretations, which were able to express the individual financial status of Chateau Hotels & Resorts on December 31, 2019 and 2020 , and individual financial performance and individual cash flow on January 1 to December 31, 2019 and 2020.

Basis of Opinion

The accountant performed the audit work in accordance with Attestation of Financial Statements by Certified Public Accountants. The accountant’s responsibilities under these standards will be further explained in the accountant’s responsibility section for review of the individual financial statements. The personnel of the accountant's subordinate affairs subject to independence regulations have maintained aloof independence from Chateau Hotels & Resorts in accordance with the accountant's professional ethics and fulfilled other responsibilities under the regulations. The accountant believes that sufficient and appropriate verification evidence has been obtained as a basis for expressing audit opinions.

Key Audit Matters

Key audit matter refers to the most important matters in the audit of Chateau Hotels & Resorts individual Financial Statements in 2020 according to the professional judgment of the accountant. These matters have been dealt with in the process of reviewing the individual financial statements as a whole and forming an audit opinion. The accountant

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does not express an independent opinion on these matters.

The key audit matter of Chateau Hotels & Resorts' individual financial statements in 2020 is stated as follows:

As stated in Note 22 of the individual financial statements, the revenue from guest rooms and catering was 511,868 and 193,666 (In Thousands of NTD) in 2020, accounting for 71% and 27% of total operating revenue respectively. They are significant to the individual financial statements. The room income and food and beverage income generated by the reservation of the travel agent usually involves a lot of manual operations due to the different transaction conditions of the travel agent. Therefore, the accountant lists the authenticity of the room income and food and beverage income generated by the travel agent as the key audit matter.

Corresponding audit procedures

The accountant has executed the corresponding procedures for the said key audit matter listed as follows:

1. To understand and test the effectiveness of the main internal control design and implementation for the authenticity of revenue.

2. Obtain details of room revenue and catering revenue generated by bookings from travel agencies, and check relevant transaction documents, including passenger registration cards, counter bills, reconciliation calculations of travel agency and contract terms, etc., to test the authenticity of the revenue.

3. Audit the subsequent records of payment received from the travel industry after the review period.

Responsibilities of management and governing body for individual financial statements

The responsibility of management was in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and approved by the Financial Supervisory Commission, and issued effective IFRS, IAS, IFRIC Interpretations, and SIC Interpretations, which were able to express the individual financial statements, and maintain the necessary internal control related to the preparation of the individual financial statements to ensure that the individual financial statements do not contain any material misrepresentation due to fraud or errors.

When preparing the individual financial statements, the responsibilities of management also include assessing Chateau Hotels & Resorts’ ability to continue operations, disclosure of related matters, and the adoption of the accounting basis for continued operations, unless the management intends to liquidate Chateau Hotels & Resorts or cease operations, or there is no practical and feasible plan other than liquidation or suspension of business.

Governing body (including supervisors) of Chateau Hotels & Resorts is responsible for supervising the financial reporting process.

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The accountant's responsibility for auditing the individual financial statements

The purpose of this accountant's audit of the individual financial statements is to obtain reasonable conviction as to whether the individual financial statements as a whole contain any material misrepresentation due to fraud or errors, and to issue an audit report. Reasonable assurance is a high degree of certainty, but the audit work performed in accordance with the generally accepted auditing standards cannot guarantee that material misrepresentation in the individual financial statements will be detected. Misrepresentation may result from fraud or errors. If the untruthful individual amounts or aggregate can be reasonably expected to affect the economic decisions made by the users of the individual financial statements, they are considered significant.

The accountant uses professional judgment and maintains professional suspicion when conducting audits in accordance with the auditing standards generally accepted in the Republic of China. The accountant also performs the following tasks:

1. Identify and evaluate the risks of material misrepresentation in the individual financial statements due to fraud or errors; design and implement appropriate countermeasures for the assessed risks; and obtain sufficient and appropriate audit evidence as the basis for audit opinion. Because fraud may involve collusion, forgery, deliberate omission, false statement or violation of internal control, the risk of not detecting material misrepresentation caused by fraud is higher than that caused by errors.

2. Obtain the necessary understanding of the internal control relevant to the audit in order to design an appropriate audit procedure under the circumstances, but its purpose is not to express an opinion on the effectiveness of the internal control of Chateau Hotels & Resorts.

3. Evaluate the appropriateness of the accounting policies adopted by the management and the reasonableness of accounting estimates and related disclosures.

4. Based on the obtained audit evidence, make a conclusion on the appropriateness of the management's use of the continuing operations of the accounting basis and whether there is significant uncertainty in the event or situation that may cause major doubts about the ability of Chateau Hotels & Resorts to continue operations. If the accountant believes that there are significant uncertainties in these events or circumstances, he must remind the users of the financial statements in the audit report to pay attention to the relevant disclosures in the individual financial statements, or amend the audit opinion when such disclosures are inappropriate. The accountant’s conclusion is based on the audit evidence obtained as of the audit report date, but future events or circumstances may cause Chateau Hotels & Resorts to no longer have the ability to continue operations.

5. Evaluate the overall expression, structure and content of the individual financial statements (including relevant notes), and whether the individual financial statements are appropriate to express relevant transactions and events.

6. Obtain sufficient and appropriate audit evidence for the financial information of the constituent entities in Chateau Hotels & Resorts to express opinions on the individual financial statement. The accountant is responsible for the guidance,

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supervision and execution of the group's audit cases, and is responsible for forming the group's audit opinion.

The matters communicated between the accountant and the governing body include the planned audit scope and time, as well as major audit findings (including significant deficiencies in internal control identified during the audit process).

The accountant also provides the governing body with a statement that the personnel of the accountant’s affairs subject to independence regulations have complied with the independence of code of professional ethics, and communicates with the governing body all relationships and other matters that may be considered to affect the independence of the accountant (including relevant protective measures).

The accountant decided to audit the key audit matter of Chateau Hotels & Resorts' 2020 financial statements from the matters communicated with the governing body. The accountant states these matters in the audit report, unless the law does not allow specific matters to be disclosed publicly, or in very rare cases, the accountant decides not to communicate specific matters in the audit report because it can be reasonably expected that the negative impact of this communication will be greater than the public interest promoted.

Deloitte & Touche

Accountant YANG, CHAO-CHIN

Accountant LEE, CHI-CHEN

No. approved by Financial Supervisory Commission

No. approved by Securities and Futures Commission

No. Financial-Supervisory-SecuritiesAuditing-No.1060023872

No. Taiwan-Financial-Securities- No.0920123784

February 26, 2021

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Chateau International Development Company Limited Individual Balance Sheet December 31, 2020 and 2019

(Unit: Thousands of New Taiwan Dollars)

Code 1100 1120 1136 1170 1200 130X 1410 1470 11XX 1535 1550 1600 1755 1760 1780 1840 1952 1990 15XX 1XXX Code 2130 2170 2200 2230 2280 2320 2399 21XX 2540 2580 2640 2645 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3XXX	Assets Current assets Cash and cash equivalents (Notes 4 and 6) Current financial assets at fair value through other comprehensive income (Notes 4 and 7) Current financial assets at amortized cost (Notes 4, 8 and 29) Accounts receivable, net (Notes 4, 9 and 28) Other receivables Current inventories (Notes 4 and 10) Prepayments Other current assets (Note 17) Total current assets Non-current assets Non-current financial assets at amortized cost (Notes 4, 8 and 30) Investments accounted for using equity method (Notes 4 and 11) Property, plant and equipment(Notes 4, 12, 28 and 29) Right-of-use assets (Notes 4 and 13) Investment property, net (Notes 4, 14 and 29) Intangible assets (Notes 4 and 15) Deferred tax assets (Notes 4 and 24) Fund for improvements and expansions (note 16) Other non-current assets (Notes 17 and 28) Total non-current assets Total assets Liabilities and equity Current liabilities Current contract liabilities (notes 4 and 22) Accounts payable (note 28) Other payables (Notes 19 and 28) Current tax liabilities (Notes 4 and 24) Current lease liabilities (notes 4 and 13) Long-term liabilities, current portion (Notes 4, 18 and 29) Other current liabilities, others (Notes190 and 28) Total current liabilities Non-current liabilities Non-current portion of non-current borrowings(Notes 4, 18 and 29) Non-current lease liabilities Net defined benefit liability, non-current (notes 4 and 13) Guarantee deposits received (Note 4 and 20) Total non-current liabilities Total liabilities Equity (Note 21) Share capital Ordinary share Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings (accumulated deficit) Total retained earnings Total other equity interest Total equity Total liabilities and equity		December 31, 2020	December 31, 2020	％ 6 8 1 1 - - - - 16 1 5 37 3 23 15 - - - 84 100 1 1 3 1 1 4 2 13 5 2 1 - 8 21 48 7 6 10 6 22 2 79 100		December 31, 2019	December 31, 2019
			Amount $ 140,252 178,724 18,522 13,209 6 10,957 6,930 127 368,727 11,000 123,485 874,545 66,603 541,153 339,391 3,749 8,002 3,921 1,971,849 $ 2,340,576 $ 28,223 25,146 75,556 26,766 14,058 93,768 55,564 319,081 122,033 51,572 9,036 100 182,741 501,822 1,115,229 170,663 148,136 236,201 127,852 512,189 40,673 1,838,754 $ 2,340,576				Amount $ 88,629 110,851 31,268 9,879 900 10,724 6,719 2,955 261,925 11,000 125,757 906,306 84,729 541,153 385,915 3,588 2 4,241 2,062,691 $ 2,324,616 $ 20,219 25,073 87,346 8,494 18,584 121,925 65,824 347,465 195,806 66,468 8,519 100 270,893 618,358 1,115,229 170,663 144,136 212,747 90,683 447,566 27,200) 1,706,258 $ 2,324,616		％
						(		( )	4 5 1 - - 1 - - 11 1 5 39 4 23 17 - - - 89 100 1 1 4 - 1 5 3 15 9 3 - - 12 27 48 7 6 9 4 19 1 73 100

The attached notes are part of this individual financial statement.

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Chateau International Development Company Limited Individual Statement Of Comprehensive Income January 1 to December 31, 2020 and 2019 (Unit: Thousands of New Taiwan Dollars) (However, the earnings per share are New Taiwan Dollars)

Code 4000 Total operating revenue (Note 4, 22 and 28) 5000 Total operating costs (Note 10, 23 and 28) 5900 Gross profit (loss) from operations Operating expenses (Notes 23 and 28) 6100 Selling expenses 6200 Administrative expenses 6000 Total Operating expenses 6510 Other income (Note 23) 6900 Net operating income (loss) Non-operating income and expenses (Note 23 and 28) 7100 Interest income 7010 Other income 7030 Other gains and losses, net 7050 Financial costs 7070 Share of profit (loss) of associates and joint ventures accounted for using equity method, net 7590 Miscellaneous disbursements 7000 Total non-operating income and expenses		Year 2020	Year 2020

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（Continued from the previous page）

Code 7900 Profit (loss) from continuing operations before tax 7950 Total tax expense (income) (Notes 4 and 24) 8200 Profit (loss) from continuing operations Other comprehensive income Items not reclassified to profit or loss: 8311 Gains (losses) on remeasurements of defined benefit plans (Note 20) 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss (Note 24) 8300 Total other comprehensive income 8500 Total comprehensive income Earnings per Share (NT$, Note 25) 9750 Basic earnings per share 9850 Diluted earnings per share		Year 2020	Year 2020	％ 15 3 12 - 10 - 10 22		Year 2019	Year 2019
								％
							6 1 5 - ( 2 ) - ( 2) 3

The attached notes are part of this individual financial statement.

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Chateau International Development Company Limited Individual Statement Of Changes In Equity January 1 to December 31, 2020 and 2019

(Unit: Thousands of New Taiwan Dollars)

Code A1 Balance as of January 1, 2019 Earnings Appropriation and Distribution in 2018 (Note 21) B1 Legal reserve appropriated B3 Special reserve appropriated B5 Cash dividends of ordinary share D1 Profit (loss) in 2019 D3 Other comprehensive income in 2019 D5 Total comprehensive income in 2019 Z1 Balance as of December 31, 2019 Earnings Appropriation and Distribution in 2019 (Note 21) B1 Legal reserve appropriated B3 Special reserve appropriated B5 Cash dividends of ordinary share D1 Profit (loss) in 2020 D3 Other comprehensive income in 2020 D5 Total comprehensive income in 2020 Z1 Balance as of December 31, 2020	Ordinary share	Ordinary share	Capital surplus	Capital surplus			**Retained earnings **	**Retained earnings **	**Retained earnings **	**Retained earnings **	Other equity interest	Other equity interest		Total equity
					Legal reserve		Special reserve		Unappropriated retained earnings (accumulated **deficit)earnings **		Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
		$ 1,115,229 - - - - - - 1,115,229 - - - - - - $ 1,115,229		$ 170,663 - - - - - - 170,663 - - - - - - $ 170,663		$ 142,023 2,113 - - - - - 144,136 4,000 - - - - - $ 148,136		$ 196,776 - 15,971 - - - - 212,747 - 23,454 - - - - $ 236,201	( ( ( ( ( ( ( (	$ 91,365 2,113 ) 15,971 ) 22,305 ) 40,001 294 ) 39,707 90,683 4,000 ) 23,454 ) 22,305 ) 87,592 664 ) 86,928 $ 127,852	( ( ( (	$ 11,746 ) - - - - 15,454) 15,454) 27,200 ) - - - - 67,873 67,873 $ 40,673		$ 1,704,310 - - ( 22,305 ) 40,001 ( 15,748 ) 24,253 1,706,258 - - ( 22,305 ) 87,592 67,209 154,801 $ 1,838,754

The attached notes are part of this individual financial statement.

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Chateau International Development Company Limited Individual Cash Flow Statement January 1 to December 31, 2020 and 2019 (Unit: Thousands of New Taiwan Dollars)

Code Cash flows from (used in) operating activities, indirect method A10000 Profit (loss) before tax A20010 Adjustments to reconcile profit (loss) A20100 Depreciation expense A20200 Amortization expense A20900 Interest expense A21200 Interest income A21300 Dividend income A22500 Loss (gain) on disposal of property, plant and equipment A22800 Loss (gain) on disposal of intangible assets A22400 Share of loss (profit) of associates and joint ventures accounted for using equity method A29900 Other adjustments to reconcile profit (loss) A30000 Changes in operating assets and liabilities A31130 Decrease (increase) in notes receivable A31150 Decrease (increase) in accounts receivable A31180 Decrease (increase) in other receivable A31200 Adjustments for decrease (increase) in inventories A31230 Decrease (increase) in prepayments A31240 Adjustments for decrease (increase) in other current assets A32125 Increase (decrease) in contract liabilities A32150 Increase (decrease) inaccountsliabilities A32180 Increase (decrease) in other payable A32230 Adjustments for increase (decrease) in other current liabilities A32240 Increase (decrease) in net defined benefit liability A33000 Cash inflow (outflow) generated from operations A33500 Income taxes paid AAAA Net cash flows from (used in) operating activities Cash flows from (used in) investing activities B00050 Proceeds from financial assets at amortized cost B00100 Acquisition of financial assets at fair value through profit or loss		Year 2020 $ 105,942 73,201 50,089 5,100 77 ) - - 67 2,272 2 ) - 3,330 ) 893 233 ) 211 ) 2,828 8,004 73 1,969 ) 10,260 ) 313) 232,074 73) 232,001 12,746 -		Year 2019
	( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( (	$ 43,948 75,887 54,573 5,791 118 ) 4,727 ) 1,611 ) 769 3,423 - 4 8,756 11,371 1,195 ) 87 1,950 ) 4,972 ) 4,953 ) 6,850 1,349 ) 1,025) 189,559 1,402) 188,157 7,327 30,000 )

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（Continued from the previous page）

Code B02700 Acquisition of property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B04500 Acquisition of intangible assets B05350 Acquisition of use-of-right assets B06700 Increase in other non-current assets B06800 Decrease in other non-current assets B07500 Interest received B07600 Dividends received B09900 Other investing activities BBBB Net cash flows from (used in) investing activities Cash flows from (used in) financing activities C00100 Increase in short-term loans C00200 Decrease in short-term loans C00500 Increase in short-term notes and bills payable C00600 Decrease in short-term notes and bills payable C01600 Proceeds from long-term debt C01700 Repayments of long-term debt C04020 Payments of lease liabilities C04400 Decrease in other non-current liabilities C04500 Cash dividends paid C05600 Interest paid CCCC Net cash flows from (used in) financing activities EEEE Net increase (decrease) in cash and cash equivalents E00100 Cash and cash equivalents at beginning of period E00200 Cash and cash equivalents at end of period		Year 2020 $ 30,992 ) - 3,632 ) 3,233 ) - 320 78 - 8,000) 32,713) 70,000 70,000 ) 110,000 110,000 ) 290,000 391,930 ) 18,216 ) - 22,305 ) 5,214) 147,665) 51,623 88,629 $ 140,252		Year 2019
	( ( ( ( ( ( ( ( ( ( ( (		( ( ( ( ( ( ( ( ( ( ( ( ( ( (	$ 36,998 ) 2,520 7,753 ) 2,693 ) 688 ) - 118 4,727 4,225) 67,665) 60,000 120,000 ) 110,000 110,000 ) 150,000 177,433 ) 15,199 ) 50 ) 22,305 ) 5,846) 130,833) 10,341 ) 98,970 $ 88,629

The attached notes are part of this individual financial statement.

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Chateau International Development Company Limited Notes to the individual Financial Statement

January 1 to December 31, 2020 and 2019

• （Unless otherwise specified, the amount is in thousands of New Taiwan Dollar）

1. Company History

Chateau International Development Company Limited （ hereinafter referred to as "the company"）was founded in September 1995, formerly known as JinHai Development Co., Ltd., and was changed to its current name in December 2006. The main business is the operation of amusement areas, hotels and restaurants.

Quintain Steel Co., Ltd. had 29.43% and 28.05% of the company's comprehensive shareholding ratio as of the end of December 2020 and 2019, respectively. Because of its substantial control over the company, it is the ultimate parent company of the company.

The company's stock has been listed and traded on the Taiwan Stock Exchange since March 2012.

This individual financial statement is expressed in New Taiwan Dollar, the company’s functional currency.

1. The Date and Procedures for Approving the Financial Statement

This individual financial report was released on February 5, 2021 after it was approved by the board of directors.

1. Application of newly issued and revised standards and interpretations

2. (1) For the first time, it is applicable to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC) and SIC Interpretations (SIC) (hereinafter referred to as "IFRSs") recognized and issued by the Financial Supervisory Commission (hereinafter referred to as the "FSC").

   • Except for the following explanations, the application of the revised

   • FSC approved and issued effective IFRSs will not cause major changes in the accounting policies of the company:

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Amendments to IAS 1 and IAS 8 "Definition of Materiality"

The amendment has been applied to the company since January 1, 2020. The threshold of materiality is changed to "can be reasonably expected to affect users", and the disclosure of the individual financial statement has been adjusted, deleting insignificant information that may obscure significant information.

• (2) IFRSs recognized by FCS applicable in 2021

New, Revised or Amended Standards and Effective date issued by Inter retations the IASB p Amendment to IFRS 4 "Extension of Effective from the Provisional Exemption Applicable to IFRS date of issuance 9" Amendments to IFRS 9, IAS 39, IFRS 7, Effective for the IFRS 4, and IFRS 16 "Changes in Interest annual reporting Rate Indicators-Phase 2" period beginning after January 1, 2021 Amendment to IFRS 16 "New Coronavirus Effective for the Pneumonia Related Rent Concessions" annual reporting period beginning on June 1, 2020

• (3) IFRSs that has been issued by IASB but has not yet been approved by the FCS and issued effective

FCS and issued effective
New, Revised or Amended Standards and Interpretations “Annual improvement in the 2018-2020 cycle” Amendment to IFRS 3 "Update the Index to Conceptual Framework" Amendments to IFRS 10 and IAS 28 "Sale or investment of assets between investors and their affiliates or joint ventures" IFRS 17 "Insurance Contract" Amendments to IFRS 17 Amendment to IAS 1 "Classification of liabilities as current or non-current" Amendment to IAS 1 "Disclosure of Accounting Policies"	Effective date issued by the IASB (Note 1)
	January 1, 2022 (Note 2) January 1, 2022 (Note 3) Undecided January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 6)

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Amendment to IAS 8 "Definition of Accounting Estimates" Amendment to IAS 16 "Real estate, plant and equipment: the price before reaching the intended state of use" Amendment to IAS 37 "Onerous contractCost of Performing Contracts"

January 1, 2023 (Note 7) January 1, 2022 (Note 4) January 1, 2022 (Note 5)

• Note 1: Unless otherwise specified, the above newly issued and revised standards and interpretations are effective for the annual reporting period beginning after each date.

• Note 2: The amendment of IFRS 9 is applicable to the exchange or clause modification of financial liabilities during the annual reporting period beginning after January 1, 2022; the amendment of IAS 41 "Agriculture" is applicable to the fair value measurement beginning after January 1, 2022 during the annual reporting period; the amendment to IFRS 1 "First Adoption of IFRSs" is retrospectively applied to the annual reporting period beginning after January 1, 2022.

• Note 3: This amendment applies to business mergers whose acquisition date starts after January 1, 2022 during the annual reporting period.

• Note 4: Plants, real estate and equipment that have reached the necessary locations and conditions for the expected operation of the management after January 1, 2021 are applicable to this amendment.

• Note 5：Contracts that have not fulfilled all obligations on January 1, 2022 apply to this amendment.

• Note 6: The postponement of the annual reporting period starting after January 1, 2023 is applicable to this amendment.

• Note 7: Changes in accounting estimates and changes in accounting policies that occur during the annual reporting period beginning after January 1, 2023 are applicable to this amendment.

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As of the date of approval of this individual financial report, the company continues to evaluate the impact of other standards and amendments to the interpretation on the financial status and financial performance, and the relevant impact will be disclosed when the evaluation is completed.

4. Summary Explanation of Significant Accounting Policies

(1) Compliance Statement

This individual financial statement is prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs approved and issued by the FCS.

(2) Preparation basis

Except for the financial instruments measured at fair value and the current value of the determined benefit obligation minus the net determined benefit liabilities recognized at the fair value of the planned assets, the individual financial statement is prepared on the historical cost basis.

The fair value measurement is divided into level 1 to level 3 according to the observability and importance of the relevant input value:

1. Level 1 input value: refers to the quotation of the same asset or liability in the active market that can be obtained on the measurement date (unadjusted).

2. Level 2 input value: refers to the observable input value of an asset or liability directly (that is, price) or indirectly (that is, derived from price) except for the quotation of the first level.

3. Level 3 input value: refers to the unobservable input value of assets or liabilities.

When the company prepares individual financial statements, it adopts the equity method for investment in subsidiaries. In order to make the current year’s profit and loss, other comprehensive profit and loss and equity of this individual financial statement the same as the current year’s profit and loss, other comprehensive profit and loss and equity

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attributable to the owners of the company in the company’s individual financial statements, certain accounting differences between the individual basis and the individual basis are adjusted. "Investment using the equity method", "Share of profits and losses of subsidiaries using the equity method", "Share of other comprehensive profits and losses of subsidiaries using the equity method" and related equity items.

• (3) Standards for distinguishing between current and non-current assets and liabilities

  • Current assets include:

• Assets that are held mainly for trading purposes;

• Assets expected to be realized within 12 months after the balance sheet date; and

• Cash (however, it does not include those restricted for the exchange or settlement of liabilities more than 12 months after the balance sheet date).

  • Current liabilities include:

• Liabilities held mainly for trading purposes;

• Liabilities that are due for settlement within 12 months after the balance sheet date; and

• Liabilities that are not possible to be unconditionally deferred at least 12 months of the settlement period after the balance sheet date.

Those that are not classified as current assets or current liabilities are

classified as non-current assets or non-current liabilities.

• (4) Foreign currency

When entities prepare financial reports, transactions in currencies other than the individual's functional currency (foreign currency) shall be converted into functional currency records at the exchange rate on the transaction date.

Monetary items in foreign currencies are translated at the closing exchange rate on each balance sheet date. The exchange difference arising from the delivery of monetary items or the conversion of

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monetary items is recognized in the profit and loss in the current period. Non-monetary items in foreign currencies measured by fair value are converted at the exchange rate on the day when the fair value is determined, and the resulting conversion difference is listed in the current profit and loss. However, if the change in fair value is recognized in other comprehensive gains and losses, the resulting conversion difference is listed in other comprehensive income.

Non-monetary items in foreign currencies measured by historical cost are converted at the exchange rate on the transaction date and will not be converted again.

(5) Inventories

Inventory includes commodities, catering materials and room spare parts, etc. Inventory is measured by the lower of cost and net realizable value. When comparing cost and net realizable value, it is based on individual items except for the same type of inventory. Net realizable value refers to the estimated selling price under normal circumstances after subtracting the estimated cost to be completed and the estimated cost required to complete the sale. The calculation of inventory cost adopts the weighted average method.

(6) Investment using the equity method

The company uses the equity method to handle investments in subsidiaries.

A subsidiary refers to an entity that the company has control over.

Under the equity method, the investment is initially recognized at cost, and the book amount obtained in the future will increase or decrease with the company’s share of subsidiary profits and losses and other comprehensive profits and losses and profit distribution. In addition, changes in the company's other rights and interests of subsidiaries are recognized based on the shareholding ratio.

When the company's changes in the ownership and equity of the subsidiary do not result in the loss of control, it is treated as an equity

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transaction. The difference between the book value of the investment and the fair value of the consideration paid or received is directly recognized as equity.

When the company’s share of losses in a subsidiary equals or exceeds its equity in the subsidiary (including the book value of the subsidiary under the equity method and other long-term equity that is essentially part of the company’s net investment in the subsidiary), then continue to recognize losses based on shareholding ratio.

When the company assesses impairment, it considers the cashgenerating unit as a whole in the financial report and compares its recoverable amount with the book value. If the recoverable amount of the asset increases in the future, the reversal of the impairment loss is recognized as an interest. However, the book value of the asset after the impairment loss has been reversed shall not exceed the book value of the asset after deducting the amortization if the impairment loss is not recognized.

The Amortization gains and losses of downstream transactions between the company and its subsidiaries are eliminated in the individual financial report. The gains and losses arising from the counter-current and side-current transactions between the company and its subsidiaries are only recognized in individual financial reports within the scope that has nothing to do with the company’s equity in the subsidiaries.

• (7) Property, Plant and Equipment

Property, plant and equipment are recognized at cost, and subsequently measured at the amount of cost minus accumulated depreciation.

Property, plant and equipment under construction are recognized at the cost minus accumulated impairment losses. Cost includes professional service fees and borrowing costs that meet the capitalization conditions. When these assets are completed and reach the expected state

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of use, they are classified into the appropriate categories of real estate, plant and equipment, and depreciation begins.

－ Property, plant and equipment business equipment is transferred to expenses when it is actually damaged and replaced. Property, plant and equipment other than business equipment are depreciated on a straight-line basis within the useful life, and each significant part is separately depreciated. The merging company shall review the estimated useful life, residual value and depreciation method at least at the end of each year, and postpone the impact of changes in applicable accounting estimates.

When Property, plant and equipment are derecognised, the difference between net disposal proceeds and the carrying amount of assets is recognized in profit and loss.

The company has changed the service life of some depreciable assets (houses and buildings, hydropower equipment and other equipment) from July 1, 2020. The service life after the change can better reflect the economic nature of the assets. The estimated service life of houses and buildings has been changed from 40 years to 48 years; the estimated service life of hydroelectric equipment has been changed from 10 years to 15 to 20 years; and the estimated service life of even equipment has been changed from 10 to 15 years to 15 to 20 years. This estimate change reduces the depreciation expense from July 1, 2020 to December 31, 2020 by 5,772(In Thousands of NTD)

(8)

Investment Property

Investment property is the land held for undecided use, so it is regarded as holding for capital appreciation.

The Investment Property held by the company is land, originally measured at cost (including transaction costs), and subsequently measured at the amount of cost minus accumulated impairment.

When the investment property is derecognized, the difference between the net disposal proceeds and the carrying amount of the asset

• 20 -

is recognized in the profit and loss.

• (9) Operating franchise (listed in intangible asset)

• The company signed a contract with the Forestry Bureau of the Council of Agriculture of the Executive Yuan to obtain the operating rights of the hotel, and the ownership of the houses and facilities invested in the construction is owned by the government (as a consideration provided in the Service Concession Arrangement). Therefore, the cost of building houses and facilities is listed as the cost of obtaining Service Concession Arrangement, and is amortized on a straight-line basis based on the actual service life of the buildings and facilities and the remaining life of the contract, whichever is lower.

• The company leases land to the Forestry Bureau of the Executive Yuan Committee of Agriculture for business use. The annual rent is a business lease and is recognized as an expense during the lease period, unless another systematic basis is more representative of the time pattern of benefit to users. Under operating leases, contingent rents are recognized as expenses in the period in which they are incurred.

The residual value of an intangible asset with a limited useful life is

estimated to be zero, and the application of the change in accounting estimate will be postponed.

When the intangible asset is derecognized, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in the profit and loss.

• (10) Real estate, plant and equipment, right-of-use asset, intangible asset and assets' impairment related to contract cost.

The company assesses whether there are any signs that the Property, plant and equipment, right-of-use asset and intangible asset may have been impaired on every balance sheet date. If there is any sign of impairment, the amount recoverable of the asset is estimated. If the amount recoverable of an individual asset cannot be estimated, the company estimates the amount recoverable of the cash-generating unit

• 21 -

to which the asset belongs.

Amount recoverable is the higher of fair value less costs to sell and value in use. If the amount recoverable of an individual asset or cashgenerating unit is lower than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its amount recoverable, and the impairment loss is recognized in profit and loss.

When the impairment loss is subsequently reversed, the carrying amount of the asset, cash-generating unit or contract cost-related asset is adjusted to the revised amount recoverable.

However, the carrying amount after the increase does not exceed the carrying amount (deducting amortization or depreciation) determined when the impairment loss is not recognized in the previous year if the asset, cash-generating unit or contract cost-related asset does not exceed the carrying amount. The reversal of the impairment loss is recognized in the profit and loss.

(11) Financial instruments

Financial asset and financial liability are recognized on the individual balance sheet when the company becomes one of the contract terms of the tool.

In the original recognition of financial asset and financial liability, if the financial asset or financial liability is not at fair value through profit or loss, it is calculated based on the fair value plus the transaction cost that can be directly attributed to the acquisition or issuance of the financial asset or financial liability. Transaction costs that can be attributed to the acquisition or issuance of the financial asset or financial liability at fair value through profit or loss are immediately recognized as profit or loss.

1. Financial asset

Regular way purchase or sale of financial asset is recognized and derecognized by trade date accounting.

• (1) Type of measurement

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The types of financial assets held by the company are financial assets measured at amortized cost and investment of equity instruments that is measured at fair value through other comprehensive income.

• A. Financial assets measured at amortized cost

If the company invests in a financial asset that meets the following two conditions, it is classified as financial assets measured at amortized cost:

• a. It is held under a certain business model, the purpose of which is to hold financial assets to receive contractual cash flows; and

• b. The terms of the contract generate cash flows on a specific date, and these cash flows are all interest on the payment of the principal and the amount of principal in circulation.

Financial assets measured at amortized cost (including cash, receivables, other receivables, financial assets measured at amortized cost, fund for improvement and expansion, and refundable deposits (other non-current assets)) are measured by the total carrying amount determined by the Effective interest method minus any impairment loss amortized cost after the original recognition, and any foreign currency exchange gains and losses are recognized in profit and loss.

Interest income is calculated by multiplying the effective interest rate by the total carrying amount of financial asset.

• B. Investment of equity instruments that is measured at fair value through other comprehensive income

At the time of initial recognition, the company can make an irrevocable choice to specify Investment of equity

• 23 -

instruments that are not held for trading and are not recognized or considered by the merger acquirer through other comprehensive income measured at fair value .

Investment of equity instruments that is measured at fair value through other comprehensive income is measured at fair value, and subsequent changes in fair value are reported in other comprehensive income and accumulated in other equity. At the time of investment disposal, the accumulated profits and losses are directly transferred to retained earnings and are not reclassified as profits and losses.

Investment of equity instruments that is measured at fair value through other comprehensive income. The dividend is recognized in the profit and loss when the company's right to receive payments is established, unless the dividend clearly represents part of the investment cost recovery.

(2) Impairment of financial asset

The company assesses financial assets measured at amortized cost (including accounts receivable) and investment of equity instruments that is measured at fair value through other comprehensive income on the basis of expected credit losses on each balance sheet date.

Accounts receivable are recognized as allowance losses based on expected credit losses during the duration. For other financial assets, first assess whether the credit risk has increased significantly since the initial recognition. If there is no significant increase, the 12-month expected credit loss is recognized as an allowance loss; if it has increased significantly, it is recognized as a loss allowance based on lifetime expected credit losses.

• 24 -

Expected credit losses are weighted average credit losses based on the risk of default. The 12-month expected credit losses represent the expected credit losses arising from possible defaults of financial instruments within 12 months after the reporting date. Lifetime expected credit losses represent the expected credit losses arising from all possible defaults during the expected life of the financial instruments.

the company is for the purpose of internal credit risk management, and without considering the collateral held, it is determined that the following circumstances represent that the financial asset has defaulted:

• A. There is internal or external information showing that it is impossible for the debtor to pay off the debt.

• B. Overdue for more than 30 days, unless there is reasonable and corroborated information that shows that the delayed default basis is more appropriate.

The impairment loss of all financial assets is reduced by the allowance account to reduce its carrying amount, but the loss allowance of debt instrument investment through other comprehensive income measured at fair value is recognized in other comprehensive income, and its carrying amount is not reduced.

• (3) Derecognition of financial asset

the company only derecognizes the financial asset when the contractual rights to cash flows from the financial asset lapse, or the financial asset has been transferred and almost all the risks and rewards of the asset's ownership have been transferred to other companies.

When financial assets measured at amortized cost are derecognized as a whole, the difference between the carrying amount and the consideration received is recognized in profit

• 25 -

and loss. When investment of equity instrument that is measured at fair value through other comprehensive income are derecognized as a whole, the accumulated profits and losses are directly transferred to retained earnings and are not reclassified as profits and losses.

2. Financial liability

• (1) Follow-up measurement

All financial liabilities are measured at amortized cost using the effective interest method.

• (2) Derecognition of financial liability

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

• (12) Income recognition

After the customer contract recognizes the performance obligations, the company allocates the transaction price to each performance obligation, and recognizes revenue when each performance obligation is met.

(13) Lease

the company assesses whether the contract belongs to (or includes) a lease on the date of contract establishment.

the company is lessee

Except for the low-value underlying asset leases and short-term leases that are subject to the applicable recognition exemption, the lease payments are recognized as expenses on a straight-line basis during the lease period, and other leases are recognized as right-of-use asset and lease liability on the lease start date.

Right-of-use asset is originally measured at cost, and subsequently measured at the amount of cost minus accumulated depreciation, and the remeasurement of lease liability is adjusted. The right-of-use asset is

• 26 -

separately expressed in the individual balance sheet.

Right-of-use asset is depreciated on a straight-line basis from the lease start date to the end of the service life or the expiration of the lease period, whichever is earlier.

Lease liability is originally measured by the present value of lease payments (including fixed payments). If the interest rate implicit in a lease is easy to determine, the lease payment is discounted using this interest rate. If the interest rate is not easy to determine, use lessee's incremental borrowing rate of interest.

(14)

Subsequently, lease liability is measured on the basis of an amortized cost using the effective interest method, and the interest expense is amortized during the lease period. If the lease period causes changes in future lease payments, the company will then measure the lease liability and adjust the right-of-use asset relatively. However, if the carrying amount of the right-of-use asset has been reduced to zero, the remaining remeasurement amount will be recognized in profit and loss. Lease liability is separately expressed in the individual balance sheet. The variable rent in the lease agreement that is not dependent on the index or rate is recognized as an expense in the period in which it occurs. Borrowing cost

The borrowing cost that can be directly attributed to the acquisition, construction, or production of a qualified asset is regarded as a part of the cost of the asset until almost all necessary activities for the asset to reach its intended use or sale status have been completed.

Specific borrowings, such as investment income earned by temporary investments before the occurrence of capital expenditures that meet the requirements, are deducted from the borrowing cost of eligible for capitalization.

Except for the above, all other borrowing costs are recognized as profit or loss in the current period.

(15) Government grants

• 27 -

Government grants will only be recognized when it is reasonably certain that the company will comply with the conditions attached to the government grants and will receive the grant.

Government grants are recognized in the profit and loss on a systematic basis during the period when the related costs that they intend to compensate are recognized as expenses by the company.

(16)

If government grants are used to compensate for expenses or losses incurred, or for the purpose of providing immediate financial support to the company without future related costs, they are recognized in profit and loss during the period when they can be collected. Employee benefits

1. Short-term employee benefits

Related liabilities of short-term employee benefits are measured by the expected non-discounted amount of cash paid in exchange for employee services.

2. Retirement benefits

Determine the retirement fund to be contributed to the retirement plan is to recognize the amount of the retirement fund that should be contributed as an expense during the employee's service period

The defined benefit cost (including service cost, net profit interest and remeasurement) of the defined benefit retirement plan is calculated using the projected unit credit method, and the service cost (including current service cost) and net interest on the net defined benefit liability are incurred , recognized as employee benefit expenses, remeasurements (including actuarial gains and losses, changes in the impact of asset ceilings and return on plan asset after deduction of interest) are recognized in other comprehensive income and included in retained earnings when they occur, and are not reclassified to profit and loss.

Net defined benefit liability refers to the shortfall in determining the benefit of the retirement plan.

• 28 -

(17) Taxation

Income tax expense is the sum of the tax currently payable and deferred tax.

1. Current tax

the company calculates the recoverable income tax according to the current income (loss) stipulated by each income tax reporting jurisdiction.

The additional income tax on undistributed earnings calculated in accordance with the provisions of my country's Income Tax Law is recognized in the annual resolution of the shareholders meeting.

Adjustments to income tax payable in previous years are included in current income tax.

1. Deferred tax

Deferred income tax is a temporary calculation based on the carrying amount of assets and liabilities in the financial statements and the tax basis for calculating taxable income.

Deferred income tax liabilities are generally recognized for all taxable temporary differences, while deferred income tax assets are recognized when it is likely that taxable income can be used to deduct income tax deductions arising from temporary differences.

Taxable temporary differences related to investment in subsidiaries, affiliates and joint agreements are recognized as deferred income tax liabilities, but if the company can control the timing of the reversal of the temporary differences, and the temporary differences are likely to be without reversal in the foreseeable future are excluded. The deductible temporary differences related to this type of investment will be recognized as deferred income tax assets only if it is likely to have sufficient taxable income to realize the temporary differences, and within the scope expected to reverse in the foreseeable future.

• 29 -

The carrying amount of deferred tax assets is reviewed on each balance sheet date, and the carrying amount is reduced for those that are no longer likely to have sufficient taxable income to recover all or part of their assets. Those who were not previously recognized as deferred tax assets are also reviewed on each balance sheet date, and are likely to generate taxable income in the future for the recovery of all or part of their assets, and increase the carrying amount.

Deferred tax assets and liabilities are measured by the current tax rate for expected liability settlement or asset realization. The tax rate is based on the tax rate and tax law that has been legislated or substantively legislated on the balance sheet date. The measurement of deferred income tax liabilities and assets reflects the tax consequences arising from the way the company expects to recover or settle the carrying amount of its assets and liabilities on the balance sheet date.

1. Current and deferred tax for the year

Current and deferred taxes are recognized in profit and loss, but the current and deferred income taxes related to items recognized in other comprehensive income or directly included in equity are respectively recognized in other comprehensive income or directly included in equity.

1. Major sources of uncertainty in material accounting judgments, estimates and assumptions

When the company adopts accounting policies, the management must make relevant judgments, estimates and assumptions based on historical experience and other relevant factors for those who cannot easily obtain relevant information from other sources. Actual results may differ from estimates.

the company takes the economic impact caused by the COVID-19 epidemic into consideration in major accounting estimates, and the management will continue to review the estimates and basic assumptions. If the revision of the

• 30 -

estimate only affects the current period, it is recognized in the current period of the revision; if the revision of the accounting estimate affects both the current period and the future period, it is recognized in the current period and the future period of the revision.

The main source of uncertainty in estimates and assumptions-the useful life of Property, plant and equipment

As mentioned in Note 4 (7), the company examines the estimated service life of real estate, plant and equipment on each balance sheet date.

6. Cash and Cash Equivalents

and Cash Equivalents
Cash on hand and working fund Bank cheques and demand deposits	December 31, 2020 $ 3,435 136,817 $ 140,252	December 31, 2019
			$ 2,544 86,085 $ 88,629

1. Current financial assets at fair value through other comprehensive income

Investment of equity instruments－ Domestic investment Listed stocks Quintain Steel Co., Ltd. Unlisted (counter) stocks Smokey Joe's Co., Ltd.	December 31, 2020 $ 145,934 32,790 $ 178,724	December 31, 2019	December 31, 2019
			$ 79,171 31,680 $ 110,851

The company invests in the above-mentioned equity in accordance with strategic purposes and expects to make a profit through the investment. The management of the company believes that if the fair value's fluctuations of these investments are included in the profit and loss, it is inconsistent with the aforementioned investment plan, so they choose to designate these investments as through other comprehensive income measured at fair value.

8. Current financial assets at amortized cost

st
December	31,	December	31,
2020		2019

• 31 -

Current Domestic investment Trust account (1) Time deposit with original expiry date more than 3 months(2) Non-current Domestic investment Pledged time deposits with the original expiry date more than 3 months(3)	$ 18,522 - $ 18,522 $ 11,000	$ 30,938 330 $ 31,268 $ 11,000

• (1) Since October 2017, the company has established the trust account of Cathay United Bank in accordance with the law. As of December 31, 2019 and 2020, the amounts that are collected in advance due to the issuance of gift certificates and should be delivered to the Cathay United Bank Trust are 11,167 (In Thousands of NTD) and 24,395 (In Thousands of NTD).

• (2) As of December 31, 2019, the time deposit with original expiry date more than 3 months has an annual interest rate of 1.025%.

• (3) As of December 31, 2019 and 2020, the annual interest rate of the pledged time deposit interest rate range for the original expiry date more than 3 months is 0.18%.

• (4) For information on pledge of financial assets measured at amortized cost, please refer to Note 29.

• Accounts receivable

Accounts receivable
Accounts receivable Measured by amortized cost Total carrying amount	December 31, 2020 $ 13,209	December 31, 2019
			$ 9,879

The average credit period of the company's accounts receivable is within 30 days. The policy adopted by the company is to only conduct transactions with individuals and corporate organizations with good credit, and the company’s

• 32 -

customer group is large and unrelated. The concentration of credit risk is not high and is mostly cash transactions, so the risk of financial loss caused by relevant defaults is limited.

the company recognizes the loss allowance of accounts receivable according to lifetime expected credit losses. The lifetime expected credit losses are calculated using a provision matrix, which takes into account the past default records of the customer and the current financial situation. According to the credit loss history experience of the company, there is no significant difference in the loss patterns of different customer groups. Therefore, the provision matrix does not further differentiate the customer groups, and only sets the rate of expected credit losses based on the accounts receivable overdue days. However, historical experience shows that the average credit period is within 30 days, so the impact of the rate of expected credit losses is limited.

the company measures the loss allowance of accounts receivable according to the provision matrix as follows:

December 31, 2020

Rate of expected credit losses Total carrying amount loss allowance （Lifetime expected credit losses） amortized cost	Not overdue 0% $ 7,261 - $ 7,261	Overdue 1～60 days 0% $ 567 - $ 567	Overdue 61～90 days 0%～0.1% $ 2,472 - $ 2,472	Overdue 91～120 days 0.1%～0.5% $ 2,804 - $ 2,804		Overdue more than 120 days 0.5%～1% $ 105 - $ 105		Total
								$ 13,209 - $ 13,209

December 31, 2019

Rate of expected credit losses Total carrying amount loss allowance （Lifetime expected credit losses） amortized cost	Not overdue 0% $ 5,633 - $ 5,633		Overdue 1～60 days 0% $ 3,962 - $ 3,962	Overdue 61～90 days 0%～0.1% $ 11 - $ 11	Overdue 91～120 days 0.1%～0.5% $ 1 - $ 1	m	Overdue ore than 120 days 0.5%～1 % $ 272 - $ 272		Total
									$ 9,879 - $ 9,879

• 33 -

10. Inventory

Inventory
Room equipment and other Ingredients and beverages Commodity	December 31, 2020 $ 6,577 4,004 376 $ 10,957	December 31, 2019
			$ 6,108 4,107 509 $ 10,724

From January 1 to December 31, 2020 and 2019, the hotel’s operating, room catering and leisure costs and other related costs are as follows:

Food and beverage costs Room cost Other costs		Year 2020 $ 206,250 161,878 28,180 $ 396,308		Year 2019
				$ 234,698 172,862 30,503 $ 438,063

11. Investments accounted for using equity method

Investment subsidiary Chateau Fulang Hotel Co., Ltd.	December 31, 2020 $ 123,485	December 31, 2019	December 31, 2019
			$ 125,757

Ownership interest and percentage of votin ri hts g g

	votingrights
Subsidiaryname Chateau Fulang Hotel Co., Ltd.	December 31, 2020 47%	December 31, 2019
		47%

The share of profits and losses and other comprehensive profits and losses of subsidiaries that adopt the equity method in 2020 and 2019 is recognized based on the financial reports of each subsidiary that have been audited by accountants during the same period.

12. Property, plant and equipment

Statement of changes in property, plant and equipment is detailed in attached table 5.

The depreciation of the property, plant and equipment of the company is calculated on a straight-line basis based on the following durability years:

• 34 -

Housing and construction
Staff dorm	32~50 years
Elevator equipment (Staff dorm)	15 years
Other	3~50 years
Transportation equipment	3~5 years
Office equipment	2~14 years
Hydropower equipment	3~20 years
Landscape gardening	2~15 years
Miscellaneous equipment	2~20 years

The business appliance of the company is recorded at the actual cost when it is acquired, and the cost is transferred when it is actually damaged.

For setting the amount of Property, plant and equipment used as loan guarantee, please refer to Note 29.

13. Rental agreement

(1) right-of-use asset

ht-of-use asset
right-of-use asset Carrying amount Land Building Transportation equipment Office equipment Added right-of-use asset Right-of-use asset’s depreciation expense Land Building Transportation equipment Office equipment	December 31, 2020 $ 3,686 54,520 8,309 88 $ 66,603 Year 2020 $ 3,944 $ 1,304 13,725 4,965 161 $ 20,155	December 31, 2019
			$ 4,991 65,011 13,456 1,271 $ 84,729 Year 2019
			$ 13,513 $ 1,304 13,177 4,389 436 $ 19,306

• 35 -

(2) lease liability

se liability
Lease liability Carrying amount Current Non-current	December 31, 2020 $ 14,058 $ 51,572	December 31, 2019
			$ 18,584 $ 66,468

The range of discount rate of lease liability is as follows:

Land Building Transportation equipment Office equipment	December 31, 2020 1.61% 1.53%～1.61% 1.53%～1.61% 1.5%	December 31, 2019
		1.61% 1.53%～1.61% 1.53%～1.61% 1.61%

(3) Important lease activities and terms

the company leases the above-mentioned transportation equipment and office equipment for 3 to 5 years and 4 years respectively.

the company also leases certain land and buildings for office and operational use. The lease period is 4-8 years and 2-20 years.

(4) Other lease information

lease information
Short-term lease expenses Low-value asset lease expenses Variable lease payments not included in the measurement of lease liability Total cash outflow from lease		Year 2020 $ 1,407 $ 1,238 $ 1,536 $ 23,563		Year 2019
				$ 2,502 $ 1,360 $ 1,526 $ 23,469

the company chooses to apply the recognition exemption to certain office equipment leases that qualify for short-term leases and leases of low-value assets, and does not recognize related right-of-use asset and lease liability for these leases.

• 36 -

14. Investment Property

nvestment Property
Balance as of December 31, 2019 and 2020		Land
		$ 541,153

The Investment Property of the company did not undergo any material additions, dispositions and impairment from January 1 to December 31, 2020 and 2019.

The fair value of the Investment Property of the company on December 31, 2018 was 971,009 (In Thousands of NTD). The fair value is measured by the independent evaluation company Evermore Valuation Firm on the Balance Sheet Date based on the level 3 input value. The evaluation is conducted with reference to market evidence of similar real estate transaction prices. On December 31, 2020, the management of the company evaluated that there was no price drop. The fair value has not been evaluated by an independent evaluator. It is only evaluated by the management of the company using the evaluation model commonly used by market participants.

The evaluation is conducted with reference to market evidence of similar real estate transaction prices.

All Investment Property of the company is its own equity. For information on Investment Property mortgage, please refer to Note 29.

15. Intangible asset

angible asset
Franchising Computer software license	December 31, 2020 $ 337,513 1,878 $ 339,391	December 31, 2019
			$ 382,976 2,939 $ 385,915

	Cost Balance as of January 1, 2019 Additions Disposal	Franchising $ 1,091,579 7,691 ( 5,961 )		Computer software license	(	Total
		(	(	$ 7,238 62 1,367 )		$ 1,098,817 7,753 7,328 )

• 37 -

Balance as of December 31, 2019 Accumulated amortization Balance as of January 1, 2019 ( Additions ( Disposal Balance as of December 31, 2019 ( Net as of December 31, 2019 Cost Balance as of January 1, 2020 Additions Disposal ( Balance as of December 31, 2020 Accumulated amortization Balance as of January 1, 2020 ( Additions ( Disposal Balance as of December 31, 2020 ( Net as of December 31,2020	$ 1,093,309 $ 662,452 ) ( 53,073 ) ( 5,192 $ 710,333) ( $ 382,976 $ 1,093,309 3,174 1,489) $ 1,094,994 $ 710,333 ) ( 48,570 ) ( 1,422 $ 757,481) ( $ 337,513	$ 5,933 $ 2,861 ) ( 1,500 ) ( 1,367 $ 2,994) ( $ 2,939 $ 5,933 458 - ( $ 6,391 $ 2,994 ) ( 1,519 ) ( - $ 4,513) ( $ 1,878	$ 1,099,242 $ 665,313 ) 54,573 ) 6,559 $ 713,327) $ 385,915 $ 1,099,242 3,632 1,489) $ 1,101,385 $ 713,327 ) 50,089 ) 1,422 $ 761,994) $ 339,391

The investment and management contract for the recreational facility area in the seaside area of the Kenting Forest Recreation Area signed by the company and the Forestry Bureau of the Executive Yuan Agriculture Committee clearly stipulates that the ownership of real estate and facilities built on the land of the Forestry Bureau of the Agriculture Committee of the Executive Yuan belongs to Forestry Bureau of the Executive Yuan Agriculture Committee, the relevant agreement is detailed in Note 30. Therefore, the company lists the cost of building real estate and facilities as the cost of obtaining franchising.

The above-mentioned intangible asset with limited useful life is calculated the amortisation expense based on the following useful life on a straight-line basis:

Franchising 2 to 30 years Computer software license 4 years

• 38 -

16. Fund for improvement and expansion

According to the articles of association of the company, the annual net profit will retain 20% of the special reserve as an expansion fund. The funds in the fund account are dedicated to special funds, and are limited to the expansion of new operating bases for building, operating equipment, operating working fund or Bank guarantees and other related operations. As of December 31, 2019 and 2020, the carrying amount of funds for improvement and expansion is 8,002(In Thousands of NTD) and 2(In Thousands of NTD) mainly invested in bank time deposits.

The changes in fund for improvement and expansion are as follows:

Initial balance Annual deposit Purchase property, plant and equipment Year-end balance		Year 2020 $ 2 8,000 - $ 8,002		Year 2019
			(	$ 2 4,225 4,225) $ 2

17. Other assets

her assets
Current Temporary payments Payment on behalf of others Non-current Refundable deposits	December 31, 2020 $ 127 - $ 127 $ 3,921	December 31, 2019
			$ 446 2,509 $ 2,955 $ 4,241

Refundable deposits are mainly vehicle deposits required for leasing operations.

18. Borrowing

• (1) Long-term debt payable

ng-term debt payable
Collateralized borrowing (Note 30) Changhua Bank and First Bank, which expire in February 2022, and the annual interest rates for 2020 and 2019 are 1.23% ～1.40% and 1.48%～1.50% respectively.	December 31, 2020 $34,135	December 31, 2019
		$86,064

• 39 -

Credit loan

Credit loan
Several companies including Taishin Bank and Yuanta Bank will expire before October 2022, with annual interest rates ranging from 1.30% to 1.46% and 1.48% to 1.59%, respectively. Minus: the part due within one year	181,666 215,801 93,768 $ 122,033	231,667
		317,731 121,925
		$ 195,806

• (2) The restrictions of financial ratio on long-term loans are as follows: Taishin bank

Debt ratio (not higher than) 100% Times interest earned (not less than) 2.5 times Net tangible (not less than) 1.5 billion NT dollars Yuanta Bank Debt ratio (not higher than) 100% Times interest earned (not less than) 5.0 times Net tangible (not less than) 1.2 billion NT dollars Shin Kong Bank Debt ratio (not higher than) 100% Times interest earned (not less than) 2.5 times Net tangible (not less than) 1.2 billion NT dollars Taipei Fubon Bank Debt ratio (not higher than) 100% Times interest earned (not less than) 5.0 times Net tangible (not less than) 1.2 billion NT dollars

the company has already complied with the above financial ratio restrictions.

19. Other payables and other current liabilities

Other payables Salaries and bonuses payable Pay in lieu of untaken annual leave Royalties payable Equipment payment payable Insurance payable	December 31,2020 $ 29,999 9,711 9,513 8,642 3,906	December 31,2019
		$ 30,218 9,422 9,822 18,349 3,782

• 40 -

Utility bills payable Employee bonus payable Other Other current liabilities Accommodation vouchers in advance Meal coupons in advance Travel voucher in advance Other	2,818 2,420 8,547 $ 75,556 $ 41,146 9,300 1,378 3,740 $ 55,564	2,644 3,109 10,000 $ 87,346 $ 49,820 10,988 1,434 3,582 $ 65,824

20. Retirement benefit plans

(1) Defined contribution plans

The pension system of the "Labor Pension Act" applicable to the company and its subsidiaries in the company is a government-managed retirement plan. According to 6% of employees' monthly salary, the pension is allocated to the individual account of the Labor Insurance Bureau.

(2) Defined benefit plans

The pension system of the company in the company in accordance with my country's "Labor Standards Law" is a government-managed defined benefit plans. The payment of employee pensions is calculated based on the length of service and the average salary of the 6 months before the approved retirement date. These companies provide retirement pensions based on 2% of the total monthly salary of their employees, which are deposited in a special account of Bank of Taiwan by the Labor Retirement Reserve Supervision Committee in the name of the committee. Before the end of the year, if the estimated balance in the special account is insufficient to pay the workers who are estimated to meet the retirement conditions in the next year, the difference will be paid once before the end of March of the next year. The special account is managed by the Labor Fund Utilization Bureau of the Ministry of

• 41 -

Labor, and the company has no right to influence the investment management strategy.

The amounts of defined benefit plans included in the individual balance sheet are listed as follows:

	December	December	December	December	31,2020 December 31,2019	31,2020 December 31,2019	31,2020 December 31,2019	31,2020 December 31,2019	31,2020 December 31,2019
Present value of defined
benefit obligation		$	13,583				$		12,653
Fair value of plan assets		(		4,547)		(			4,134)
Net defined benefit liability		$		9,036			$		8,519
The changes in net defined benefit liability are as follows:
	Present		value		Fair value of			Net defined
	of defined				plan	assets			benefit
		benefit							liability
	obligation
January 1, 2019	$	12,007			($	2,831	)	$	9,176
Service cost
Current service
cost			31			-			31
Interest expense (income)			144		(	37	)		107
Recognized in profit and loss			175		(	37	)		138
Remeasurements
Return on plan
assets (excluding
amounts included in
net interest expense)			-		(	103	)	(	103 )
Actuarial loss			471			-			471
Recognized in other
comprehensive income			471		(	103	)		368
Employer contributions			-		(	1,163	)	(	1,163)
December 31, 2019		12,653			(	4,134	)		8,519
Service cost
Current service
cost			29			-			29
Interest expense (income)			127		(	47	)		80
Recognized in profit and loss			156		(	47	)		109
Remeasurements
Return on plan
assets (excluding
amounts included in
net interest expense)			-		(	112	)	(	112 )
Actuarial loss			942			-			942
Recognized in other
comprehensive income			942		(	112	)		830
Employer contributions			-		(	422	)	(	422)
Welfare payment	(		168	)		168			-
December 31, 2020	$	13,583			($	4,547	)	$	9,036

• 42 -

The company is exposed to the following risks due to the pension system of the " the R.O.C. Labor Standards Law ":

1. Investment risk: The Labor Fund Utilization Bureau of the Ministry of Labor invests labor retirement funds in domestic (foreign) equity securities and debt securities, bank deposits, etc. through its own use and entrusted operations. However, the allocated amount of the planned assets of the company is calculated based on the interest rate not lower than the 2-year fixed deposit rate of the local bank.

2. Interest rate risk: The decline in the interest rate of government bonds/corporate bonds will increase the present value of defined benefit obligation, but the return on debt investment of planned assets will also increase. The two will partially offset the impact of net defined benefit liability .

3. Salary risk: The calculation of the present value of defined benefit obligation refers to the future salary of plan members, so the increase in salary of plan members will increase the present value of defined benefit obligation.

The present value of defined benefit obligation of the company is actuarial calculation performed by a qualified actuary. The material assumptions of the measurement date are as follows:

Discount Rate Expected salary increase rate	December 31,2020 0.75% 1.50%	December 31,2019
		1.00% 1.50%

If the significant actuarial assumptions are subject to reasonably possible changes, the amount of the present value of defined benefit obligation will increase (decrease) as follows, while all other assumptions remain unchanged:

emain unchanged:
Discount Rate Decrease 0.25% Increase 0.25%	December 31,2020 $ 408 ($ 392)	December 31,2019
	(	(	$ 414 $ 397)

• 43 -

Expected salary increase rate Decrease 1.00% ( Increase 1.00%	$ 1,485) ( $ 1,702	$ 1,501) $ 1,738

Since actuarial assumptions may be related to each other, it is unlikely that a single assumption will change, so the above sensitivity analysis may not reflect the actual changes in the present value of defined benefit obligation.

efit obligation.
Contribution amount expected within 1 year Average maturity period of defined benefit obligation	December 31,2020 $ 422 13.4 years	December 31,2019
			$ 1,163 14.1 years

21. Equity

• (1) Share capital of ordinary share

December 31, 2020 December 31, 2019

Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital	120,000 $ 1,200,000 111,523 $ 1,115,229	120,000
		$ 1,200,000
		111,523
		$ 1,115,229

Issued ordinary shares have a par value of NT$10 per share, and each share has one voting right and the right to receive dividends.

• (2) Capital surplus

Capital surplus
Can be used to make up for losses, distribute cash or allocate share capital (Note) Stock issue premium Can only be used to make up for losses Gain on disposal of asset Expiry share option	December 31,2020 $ 170,581 3 79 $ 170,663	December 31,2019
			$ 170,581 3 79 $ 170,663

• 44 -

Note: This type of additional paid-in capital can be used to make up for losses. It can also be used to distribute cash or allocate share capital when the company has no losses. However, when the share capital is allocated, it is limited to a certain percentage of the paid-in share capital each year.

• (3) Retained earnings and dividend policy

According to the surplus distribution policy of the company's articles of association, if there is a surplus in the annual final accounts, taxes shall be paid in accordance with the law, and after the accumulated losses are made up, another 10% will be set as the legal reserve, and the rest shall be listed or transferred to the Special reserve according to laws and regulations and the articles of association; If there is a balance, and with the accumulated undistributed earnings, the board of directors will draft a surplus distribution proposal and submit it to the shareholders meeting for a resolution to distribute shareholder dividends. For the remuneration distribution policy for employees and directors and supervisors as stipulated in the articles of association of the company, please refer to Note 23 (9) Employee Remuneration and Remuneration of Directors and Supervisors.

In addition, in accordance with the company’s articles of association, the net profit for the current period each year will be distributed in the following order:

1. To make up for losses

2. To contribute 10% legal reserve, and from 2011 to 2048, the company must contribute 20% special reserve as an expansion fund for the year when the company is a single operating base, and an expansion fund account shall be established for the annual contribution funds.

3. To contribute special reserve in accordance with other laws and regulations.

4. 45 -

After the balance after the distribution in the preceding paragraph is added to the undistributed earnings at the beginning of the period and the undistributed earnings adjustment for the current period, the board of directors shall draft a distribution plan in accordance with the dividend policy and submit it to the shareholders meeting for resolution.

The 20% special reserve contributed in accordance with the provisions of the second subparagraph of the first paragraph:

1. The funds in the expansion fund account are for special purposes only, and are limited to the construction of the library, operating equipment, operating working fund or bank guarantees for the expansion of new operating bases;

2. The investment target of its expanded fund account is mainly based on stable profits, and is limited to investment in fixed deposits, government bonds, bond funds, ETF funds and fund of funds. Please refer to Note 16 of the financial report for the relevant contribution.

3. The contribution can be stopped unless one of the following conditions is met:

4. (1) The total amount of investment required to obtain a new operating base must be more than 500 million NT dollars, and the new operating base has been profitable for two consecutive years.

5. (2) The special reserve has reached twice the paid-in capital.

The company is at a stage of stable growth, and will grasp the changes in internal and external environments in order to achieve sustainable business development. When the board of directors draws up a profit distribution plan, it should consider the company's future capital expenditure budget and capital needs, and measure the necessity of using surplus to support funds to determine the amount of surplus retained or distributed, the amount of dividends or bonuses distributed to shareholders in cash, the distribution of cash shall not be less than 30%,

• 46 -

and the distribution of stocks shall not exceed 70%.

Legal reserve should be contributed until its balance reaches the total amount of the company's actual share capital. Legal reserve can be used to make up for losses. When the company has no losses, the portion of the legal reserve exceeding 25% of the total paid-in share capital can be contributed as share capital and still be contributed in cash.

The company has made a recommendation based on No. FinancialSupervisory-Securities-Auditing-1010012865, No. FinancialSupervisory-Securities-Auditing-1010047490, No. FinancialSupervisory-Securities-Auditing-1030006415 and "International Financial Reporting Standards (IFRSs)". Questions and Answers on the Application of Special Reserve" and other regulations to mention and transfer the special reserve.

The company's regular shareholders' meetings in May 2019 and 2020 resolved and approved the 2019 and 2018 earnings distribution proposals as follows:

proposals as follows:
Legal reserve Special reserve Cash dividend Cash dividend per share (NT$)		Appropriation of Earnings
		Year 2019 $ 4,000 $ 23,454 $ 22,305 $ 0.2		Year 2018
				$ 2,113 $ 15,971 $ 22,305 $ 0.2

The company’s case of earnings distribution for 2020 proposed by the board of directors on February 5, 2021 is as follows:

Legal reserve Special reserve Cash dividend	Appropriation of Earnings $ 8,693 17,385 55,761	Cash dividend per share(NT$)
		$ 0.5

The case of earnings distribution for 2020 is still pending the resolution of the shareholders' meeting on May 6, 2021.

• 47 -

22. Net Revenue

t Revenue
Room income Catering income Other income		Year 2020 $ 511,868 193,666 10,517 $ 716,051		Year 2019
				$ 501,782 218,245 11,253 $ 731,280

(1) Contract balance

ontract balance
Contract liability－Current Deposit received in advance	December 31,2020 $ 28,223	December 31,2019 $ 20,219	January 1, 2019
				$ 25,191

The amount of performance obligations that have been satisfied from contract liability at the beginning of the year recognized as income in the current period is as follows:

Contract liability from the beginning of the year Deposit received in advance		Year 2020 $ 18,702		Year 2019
				$ 21,386

• (2) Contracts with customers that has not yet been completed

The amortized transaction price of performance obligations that have not yet been fully satisfied and the expected timing of recognition as revenue are as follows. These amounts do not include the estimated amount of restricted changes in consideration:

Deposit received in advance Fulfill in 2020 Fulfill in 2021		Year 2020 $ - 28,223 $ 28,223		Year 2019
				$ 20,219 - $ 20,219

23. Profit before tax

• (1) Other income and net expenses

Disposal of benefits (losses) of property, plant and equipment		Year 2020 $		Year 2019
				$ 1,611

• 48 -

(2) Interest income

(2) Interest income
Bank deposits Other (3) Other income Government grants income Rental income Dividend income Compensation income Other (4) Other benefits and losses Loss on disposal of intangible assets (5) Miscellaneous expenses Depreciation expense Investment Property related expenses Other (6) Financial costs Interest on bank loans Interest on lease liability Minus: The amount included in the cost of eligible assets (listed under Real estate, plant and equipment)		Year 2020 $ 57 20 $ 77 Year 2020 $ 17.172 920 - - 6909 $ 25001 Year 2020 $ 67 Year 2020 $ 1,762 1,058 1,101 $ 3921 Year 2020 $ 4,520 1,181 5,701 601) $ 5,100		Year 2019
				$ 102 16 $ 118 Year 2019
				$ - 944 4,727 893 8,571 $ 14,360 Year 2019
				$ 769 Year 2019
				$ 175 958 1,067 $ 2,200 Year 2019
	(		(	$ 6,048 1,437 7,485 1,694) $ 5,791

• 49 -

The relevant information of capitalization of interest is as follows:

The amount of capitalization of interest The interest rate of capitalization of interest preciation and amortization Depreciation expense summarized by function Operating cost Operating expenses Miscellaneous expenses Amortization expense summarized by function Operating cost Operating expenses		Year 2020 $ 601 1.12%～1.46% Year 2020 $ 55,912 15,527 1,762 $ 73,201 $ 48,570 1,519 $ 50,089		Year 2019
				$ 1,694 1.48～1.55% Year 2019
				$ 59,968 15,744 175 $ 75,887 $ 53,073 1,500 $ 54,573

• (7) Depreciation and amortization

(8) Employee benefits expenses

mployee benefits expenses
Short-term employee benefits Salary Labor and health insurance Directors' remuneration Other Retirement benefit plans (Note 21) Defined contribution plans Defined benefit plans Summary by function Operating cost Operating expenses		Year 2020 $ 199,322 19,800 480 10,869 230,471 8,918 109 9,027 $ 239,498 $ 163,916 75,582 $ 239,498		Year 2019
				$ 217,772 22,097 419 12,066 252,354 9,193 138 9,331 $ 261,685 $ 178,427 83,258 $ 261,685

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

In accordance with the provisions of the articles of association, the company shall contribute at least 1% and not more than 1% of the

• 50 -

employee compensation and directors and supervisors' compensation based on the current year's pre-tax benefits before deducting the distribution of employee compensation and directors and supervisors' compensation. The remuneration of employees and the remuneration of directors and supervisors for 2020 and 2019 were resolved by the board of directors on February 5, 2021 and February 24, 2020 as follows:

1. Estimated ratio

Remuneration of employee Remuneration of Directors and Supervisors	Year 2020 1% 0.0448%	Year 2019
		1% 0.1080%

1. Amount

ount
Remuneration of employee Remuneration of Directors and Supervisors	Year 2020 $ 1,071 48	Year 2019
		$ 444 48

If the amount of individual financial statements still changes after the publication date of the annual individual financial statements, they shall be treated according to the changes in accounting estimates and adjusted and recorded in the following year.

There is no difference between the actual allotment amount of remuneration of employees and remuneration of Directors and Supervisors in 2019 and 2018 and the amount recognized in the financial reports of each year.

For information on the remuneration of employees and remuneration of Directors and Supervisors resolved by the company’s board of directors, please go to the "Public Information Observatory" of the Taiwan Stock Exchange.

(1) The main components of income tax recognized in profit and loss

1. Income tax

2. 51 -

Current income tax expense Current tax expense recognized in the current year Income tax adjustments on prior years Deferred income tax Current tax expense recognized in the current year		Year 2020 $ 18,204 141 18,345 5 $ 18,350		Year 2019
			( (	$ 8,961 4,582) 4,379 432) $ 3,947

A reconciliation of income before income tax and income tax

expense recognized in profit or loss was as follows:

Profit before tax of continuing operations Income tax expense at the statutory rate Unrecognizable tax benefits Income tax adjustments on prior years		Year 2020 $ 105,942 $ 21,189 2,980 ) 141 $ 18,350		Year 2019
	(		( (	$ 43,948 $ 8,790 261 ) 4,582) $ 3,947

In July 2019, the President announced the amendment to the Industrial Innovation Regulations, which clearly stipulates that the construction or purchase of specific assets or technologies with undistributed earnings from 2018 may be included as a deduction item for calculating undistributed earnings.

• (2) Income tax expense recognized in other comprehensive income

		Year 2020	Year 2019	Year 2019
Deferred tax
Produced this year
Related to remeasurement of
defined benefit obligation	$	166	$	74
rrent income tax liabilities
	December 31,2020		December 31,2019
Current income tax liabilities
Income taxpayable	$	26,766	$	8,494

(3) Current income tax liabilities

• 52 -

(4) Deferred income tax assets

The changes in deferred income tax assets and liabilities are as follows:

Year 2020

Year 2020
Deferred income tax assets Temporary difference Pay in lieu of untaken annual leave Defined benefit retirement benefit plans		Initial balance $ 1,884 1,704 $ 3,588	Recognized in profit and loss $ 58 ( 63) ($ 5)	Recognized in other comprehens ive income $ - 166 $ 166		Year-end balance
			( (			$ 1,942 1,807 $ 3,749

Year 2019

Year 2019
Deferred tax assets Temporary difference Pay in lieu of untaken annual leave e Defined benefit retirement benefit plans		Initial balance $ 1,247 1,835 $ 3,082	Recognized in profit and loss $ 637 ( 205) $ 432	Recognized in other comprehens ive income $ - 74 $ 74		Year-end balance
			(			$ 1,884 1,704 $ 3,588

(5) Verification situation of income tax

The company's and its subsidiaries' profit-making business income tax declarations before 2018 have been approved by the Revenue Service Office.

25. Earnings per Share

It is used to calculate the earnings per share and the weighted average number of ordinary shares as follows:

Net profit for the year

et profit for the year
Profit (loss) from continuing operations		Year 2020 $ 87,592		Year 2019
				$ 40,001

• 53 -

Number of shares

Unit: Thousand shares

Used to calculate the weighted average number of ordinary shares of basic earnings per share The impact of potential ordinary share with dilution effect: Remuneration of employee Used to calculate the ordinary share weighted average number of dilutive earnings per share		Year 2020 111,523 40 111,563		Year 2019
				111,523 19 111,542

If the company of the company chooses to issue the remuneration of employees in stocks or cash, when calculating the dilutive earnings per share, it is assumed that the remuneration of employees will adopt the method of issuing shares, and it will be included in the weighted average circulation when the potential ordinary share has a dilution effect. The number of foreign shares is used to calculate dilutive earnings per share. When calculating the dilutive earnings per share before the resolution of the remuneration of employees to issue shares in the next year’s shareholders’ meeting, the dilution effect of these potential ordinary shares will continue to be considered.

26. Capital risk management

the company’s capital structure consists of the company’s net debt (i.e. borrowings minus cash) and equity (i.e. share capital, additional paid-in capital, retained earnings and other equity items). the company conducts capital management to ensure that all departments can be raised before continuing to operate, and maximize shareholder returns by optimizing the balance of debt and equity.

the company does not have to comply with other external capital regulations. 27. Financial instruments

• (1) Fair value information - Financial instruments that are not measured at fair value

the company’s non-measured at fair value financial instruments, such as cash, financial assets measured at amortized cost (including current and non-current), receivables, other receivables, fund for

• 54 -

improvement and expansion, refundable deposits (other non-current assets), short-term loan, short-term notes and bills payable, payables, other payables, long-term loans (including due within one year) and deposits received, etc. The carrying amount is a reasonable approximation of Fair value.

(2) Fair value information - financial instruments measured at fair value based on repeatability

1. Fair value level

December 31, 2020

ecember 31, 2020
Financial assets measured at fair value through Other comprehensive income Investment of equity instruments Domestic listed (counter) stocks Domestic unlisted (counter) stocks ecember 31, 2019 Financial assets measured at fair value through Other comprehensive income Investment of equity instruments Domestic listed (counter) stocks Domestic unlisted (counter) stocks		Level 1 $ 145,934 - $ 145,934 Level 1 $ 79,171 - $ 79,171		Level 2 $ - - $ - Level 2 $ - - $ -		Level 3 $ - 32,790 $ 32,790 Level 3 $ - 31,680 $ 31,680		Total
								$ 145,934 32,790 $ 178,724 Total
								$ 79,171 31,680 $ 110,851

December 31, 2019

• 55 -

From January 1 to December 31, 2020 and 2019, there will be no transfer between level 1 and level 2 fair value measurement.

1. Financial instruments are adjusted by level 3 Fair value measurement

Year 2020

Financial asset Initial balance Recognized in other comprehensive income (amortization profits and losses of valuation of financial assets measured at fair value through Other comprehensive income) Year-end balance	Financial asset measured at fair value through other comprehensive income	Financial asset measured at fair value through other comprehensive income
		Equityinstruments
		$ 31,680 1,110
		$ 32,790

Year 2019

Year 2019
Financial asset Initial balance Purchase Recognized in other comprehensive income (amortizationprofits and losses of valuation of financial assets measured at fair value through Other comprehensive income) Year-end balance	Financial asset measured at fair value through other comprehensive income
	Equityinstruments
	$ - 30,000 1,680
	$ 31,680

1. Method of measuring the fair value of financial instruments

The fair value of financial asset and financial liability is determined in the following way:

• (1) For financial asset and financial liability with standard terms and conditions and traded in an active market, the fair value of the financial asset and financial liability are determined with reference to market quotations.

• 56 -

• (2) The financial asset of the third level fair value measurement held by the company is an unlisted (counter) company stock, which is mainly based on the market method to measure the fair value. The estimates or assumptions used are based on the relevant information and estimates of comparable transactions in the market Future cash flow. The main unobservable inputs include discounts without control rights and risk discounts for lack of marketability.

(3) Types of financial instruments

Financial asset Financial assets at amortized cost（Note 1） Financial assets measured at fair value through Other comprehensive income Investment of equity instruments Financial liability Measured by amortized cost (Note 2)	December 31,2020 $ 194,912 178,724 316,603	December 31,2019
		$ 145,919 110,851 430,250

• Note 1： The balance includes cash, financial assets measured at amortized cost (including current and non-current), receipts, other receivables, fund for improvement and expansion, and refundable deposits (other non-current assets) and other financial assets measured at amortized cost.

• Note 2： The balance is the financial liability measured by amortized cost, such as payables, other payables, short-term loans, shortterm notes and bills payable, long-term loans (including due within one year) and deposits received.

• (4) Objectives and policies of financial risk management

• the company's main financial instruments include investment of

• equity instruments, receipts and payables, loans and lease liability, etc. the company's financial management department provides services for various business units, coordinates and coordinates the operation of

• 57 -

entering the domestic market, and supervises and manages the financial risks related to the company's operations by analyzing the internal risk report of the risk according to the degree and breadth of the risk. These risks include market risk (interest rate risk and other price risk), credit 。 risk and liquidity risk

The important financial activities of the company are reviewed by the board of directors in accordance with relevant regulations and internal control systems, and internal auditors continue to review compliance with policies and risk limits. the company does not trade financial instruments (including derivative financial instruments) for speculative purposes.

1. Market risk

the company's operating activities cause the company to bear the main financial risks of interest rate changes (see (1) below) and other price risks (see (2) below).

(1) Interest rate risk

Because the company borrows funds at a fixed interest rate and a floating interest rate at the same time, interest rate exposure occurs. the company manages interest rate risk by maintaining an appropriate combination of fixed and floating interest rates.

The financial asset and financial liability carrying amount of the company subject to interest rate exposure on the balance sheet date are as follows:

eet date are as follows:
With fair value interest rate risk －Financial asset －Financial liability With cash flow interest rate risk －Financial asset －Financial liability	December 31,2020	December 31,2019
	$ 11,000 65,630 155,192 215,801	$ 11,330 85,052 116,876 317,731

• 58 -

Sensitivity Analysis

The following sensitivity analysis is determined based on the interest rate exposure of non-derivative instruments on Balance Sheet Date. For floating rate liabilities, the analysis method assumes that the amount of liabilities outstanding on the Balance Sheet Date is in circulation during the reporting period. The rate of change used in the company's internal reporting of interest rates to key management is an increase or decrease of 1% in interest rates, which also represents management's assessment of the reasonably possible range of changes in interest rates.

If the interest rate increases by 1% and all other variables remain unchanged, the profit before tax of the company in 2020 and 2019 will be reduced by 606 (In Thousands of NTD) and 2,009(In Thousands of NTD), respectively, mainly because of the company’s variable interest rate risk exposure of deposits and loans.

(2) Other price risks

As the company invests in domestic listed stocks and unlisted stocks, the risk exposure of equity price is generated. Sensitivity Analysis

If the equity price increases/decreases by 1%, other comprehensive income before taxes in 2020 and 2019 will increase/decrease by 1,787 (In Thousands of NTD) and 1,109 (In Thousands of NTD) due to changes in financial assets measured at fair value through other comprehensive income fair value.

2. Credit risk

Credit risk refers to the risk of the company's financial losses caused by the counterparty's default contract obligations. As of the Balance Sheet Date, the maximum credit risk exposure of the

• 59 -

company that may cause financial losses due to the counterparty's failure to perform its obligations mainly comes from the financial asset carrying amount recognized on the balance sheet.

The counterparties of the company are individuals and corporate organizations with good credit, so no significant credit risk is expected.

3. Liquidity risk

the company supports the operation of the company by managing and maintaining sufficient cash or liquid financial products. The management of the company supervises the use of bank financing facility and ensures compliance with the terms of the loan contract.

Bank loans are an important source of liquidity for the company. For the unused financing facility of the company, please refer to the description of (2) financing facility below.

Since the equity in the capital structure of the company is far greater than the liabilities, the cash is sufficient to repay the liabilities, and there is no liquidity risk due to the inability to raise funds to fulfill the contractual obligations.

• (1) Liquidity and interest rate risk table of non-derivative financial liability

The following table summarizes the financial liability analysis of the company's agreed repayment period based on the due date and undiscounted due amount:

December 31, 2020 Floating rate instruments Liabilities without interest lease liability December 31, 2019 Floating rate instruments	Within 1year $ 95,350 100,702 14,969 $ 211,021 $ 126,033		1～5years $ 122,037 100 41,002 $ 163,139 $ 197,494		More than 5 years
					$ - - 12,685 $ 12,685 $ -

• 60 -

Liabilities without interest lease liability	112,419 19,780 $ 258,232	100 53,071 $ 250,665	- 16,430
			$ 16,430

(2) Financing facilities

Financing facilities
Credit loan facilities Used amount Unused amount Collateralized borrowing facilities Used amount Unused amount	December 31,2020 $ 210,000 275,000 $ 485,000 $ 110,000 - $ 110,000	December 31,2019
			$ 250,000 220,000 $ 470,000 $ 110,000 - $ 110,000

28. Related party transaction

Except as disclosed in other Note, the transactions between the company and other related parties are as follows:

• (1) The name of the related party and its relationship

The name of the related party and its	relationship
The name of the relatedparty Quintain Steel Co., Ltd. Guantian Investment Development Co., Ltd. Asahi Enterprises Corp. Chia Chi Sdry Enterprise Co., Ltd. Wise Co., Ltd. Polydo Investment Co., Ltd. Hsin-shih Textile Co., Ltd. Chateau Fulang Hotel Co., Ltd.	Related PartyCategories
	The ultimate parent company of the company The parent company of the company Other related parties (The company’s parent company is the company’s legal person director) Other related parties (The director of the parent company of the company is the chairman of the company) Other related parties (The director of the company is the chairman of the company) Other related parties (The chairman of the company and the chairman of the company are first relatives) Other related parties (The chairman of the company is a director of the company) Subsidiary

• 61 -

(2) Net revenue

Net revenue
Item Net revenue	Type of relatedparty The ultimate parent company of the company Other related parties Subsidiary	Year 2020 $ 1,663 101 638 $ 2,402	Year 2019
				$ 2,253 165 99 $ 2,517

The company’s sales prices to the parent company and other related parties are comparable to general customers.

(3) Purchase

Purchase
Type of relatedparties Other related parties Subsidiary		Year 2020 $ 6,573 18 $ 6,591		Year 2019
				$ 6,796 19 $ 6,815

The purchase price of the company to other related parties is equivalent to that of general manufacturers.

(4) Receivables from related parties

Item Receivables from related parties	The name of the related party	December 31, 2020 $ 135 16 85 $ 236	December 31, 2019	December 31, 2019
	The ultimate parent company of the company Other related parties Subsidiary			$ 111 20 9 $ 140

The credit period is within 30 days, and there is no major difference from general manufacturers.

Outstanding amounts receivable from related parties have not received guarantees. The amounts receivable from related parties in 2020 and 2019 is not listed in the loss allowance.

• 62 -

(5) Payables to related parties

(5) Payables to related parties
Item Type of related parties Payables to related parties Other related parties Subsidiary Other payables The ultimate parent company of the company Other related parties ubsidiary	December 31, 2020 $ 1,222 - $ 1,222 $ 297 - 18 $ 315	December 31, 2019
			$ 859 20 $ 879 $ 280 206 - $ 486

The payment period is from 30 days to 55 days, which is not significantly different from the general manufacturer (the general manufacturer’s payment period is 55 days).

The balance of the outstanding amount due to related parties is not guaranteed.

(6) Acquisition of property, plant and equipment

Type of relatedparties／Name The ultimate parent company of the company Other related parties Wise Co., Ltd.		Proceeds	Proceeds	Proceeds
		Year 2020 $ - 1,784 $ 1,784	Year 2019
				$ 150 2,668 $ 2,818

(7) Disposal of property, plant and equipment

Type of relatedparties The ultimate parent company of the company	Disposalproceeds Year 2019 $ -	Gain on disposal	Gain on disposal
			Year 2019
			$ 2,219

(8) Advance receipts (listed in other current liabilities)

Type of relatedparties The ultimate parent company of the company Other related parties Subsidiary	December 31,2020 $ 2,013 473 106 $ 2,592	December 31,2019	December 31,2019
			$ 1,405 410 20 $ 1,835

• 63 -

(9) Refundable deposits（listed in other non-current assets）

Type of relatedparties Other related parties Other transactions Type of related parties Property The ultimate parent company of the company Hotel management system maintenance The ultimate parent company of the company Lease operation premises Other related parties Lease operation premises	December $ Contract period The lease term is one year, and the contract is renewed every year The lease term is one year, and the contract is renewed every year The lease term is one year, and the contract is renewed every year	December	December	31,2020 156 Item Administrative expenses Operating cost Other income	December	December	31,2019
			$		$ Year 2020 $ 557 865 218	$	156 Year 2019
							$ 557 861 218

(10) Other transactions

(11) Compensation of key management personnel

Short-term employee benefits Post-employment benefit		Year 2020 $ 15,780 795 $ 16,575		Year 2019
				$ 16,176 844 $ 17,020

The remuneration of directors and other major management levels is determined by the remuneration committee in accordance with individual performance.

29. Pledged assets

The following assets have been provided as gift certificate performance bond, franchise agreement signing deposit, bank loan and collateral of commercial

paper

per
Financial assets measured at amortized cost（Pledged time deposit and trust account） Net investment Property Land Net building	December 31,2020 $ 29,522 30,000 13,521 33,919 $ 106,962	December 31,2019
			$ 41,938 30,000 13,521 34,843 $ 120,302

• 64 -

30. Significant contingent liabilities and unrecognized contractual commitments

Except for those already mentioned in other notes, the significant commitments and contingencies of the company on Balance Sheet Date are as follows:

Significant commitments

• (1) the company and the Forestry Bureau of the Agriculture Committee of the Executive Yuan signed a contract for the investment and operation of amusement facilities in the seaside area of the Kenting Forest Recreation Area. The original contract expires on September 30, 2016. The lease term according to the new contract is October 2015. From 1st to September 30th, 2023, the contract stipulates that each renewal period is 8 years, and the number of renewals shall not exceed 4 times (including this contract). The total operating period is from October 23, 1998 It shall not exceed 50 years from the date of calculation. A performance bond of NT$11,000 (In Thousands of NTD) shall be paid at the time of signing the contract. The agreed conditions regarding the company's rent and royalties are as follows:

• Rent

  • The land rent shall be paid for the area covered by the contract

  • (Eluanbi Section of Hengchun Township) at the annual interest rate of 5% of the announced land price in the year of contract. The other building rent shall be the buildings and equipment specified in the contract (Provence Hall, Marbella Hall and Positano Hall), pay the building equipment rental at 10% of the present tax value of the house in the year of contract.

• Royalty

  • The annual operating royalty payable is based on the estimated

  • operating income of NT$520 million per year. If the actual operating income is less than NT$520 million each year, it will be collected at NT$14,976 (In Thousands of NTD). If it exceeds NT$520 million, it will be calculated on a progressive basis, and the basic

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royalties will be paid at NT$7,488 (In Thousands of NTD) every six months, and the difference will be paid in September of the following year.

The land, construction and equipment rentals and operating royalties mentioned in the preceding paragraph shall be paid semiannually from the date of conclusion of the contract, and shall be paid before March 31 and September 30 each year.

3.

Return of assets

In accordance with the provisions of Article 5, Article 36 and Article 37 of the contract, the construction of the company's facilities on the land provided by the Forest Service Bureau of the Agriculture Committee of the Executive Yuan shall be carried out in the name of the Forest Service Bureau of the Agriculture Committee of the Executive Yuan. After the completion, the ownership will belong to the Forestry Bureau of the Agriculture Committee of the Executive Yuan free of charge. The so-called facilities include the completed real estate (Provence Hall, Marbella Hall and Positano Hall). And upon the expiration or termination of the entrusted operation period, all properties and articles owned by the Forestry Bureau of the Agriculture Committee of the Executive Yuan will be returned unconditionally.

4.

According to the letter of Pingyuzi No. 0964241208 dated November 7, 2007 from the Forest Affairs Bureau of the Agriculture Committee of the Executive Yuan, the relevant income related to the calculation of royalties is as follows:

Operating income Room dining income Boutique income SPA and other income Non-operating income Other income		Year 2020
	January 1 to September 30, 2020 $ 425,711 3,383 3,396 873 $ 433,363	October 1 to December 31, 2020 $ 127,203 844 1,206 375 $ 129,628		Total
				$ 552,914 4,227 4,602 1,248 $ 562,991

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Operating income Room dining income Boutique income SPA and other income Non-operating income Other income		Year 2019
	January 1 to September 30, 2019 $ 438,716 3,511 4,965 964 $ 448,156	October 1 to December 31, 2019 $ 112,192 866 963 284 $ 114,305		Total
				$ 550,908 4,377 5,928 1,248 $ 562,461

• (2) As of December 31, 2019 and 2020, the company has signed related contracts for the repair of franchising equipment, and the unpaid amounts are all NT$126 (In Thousands of NTD).

• (3) As of December 31, 2019 and 2020, the company has committed to purchase real estate, plant and equipment, and the unpaid amount is NT$8,504 (In Thousands of NTD) and NT$33,702 (In Thousands of NTD).

31. Other matters

The company was affected by the global pandemic of COVID-19, resulting in a 22% decrease in Operating income from January to June 2020 compared to the same period last year. In response to the impact of the epidemic, the company has applied for salary and working capital subsidies from the government. And received a subsidy of NT$17,172 (In Thousands of NTD) (Note 23). However, since June 2020, the domestic epidemic has slowed down and the government's policies have been loosened one after another, and the return of national tourism has gradually returned the source of tourists. As of the date of publication of this Individual financial statement, the company continues to evaluate the economic impact of the epidemic on the company.

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32. Note Disclosure Matters

• (1) Information about significant transactions:

• Financings provided. (Attached Table 1)

• Endorsement/guarantee provided: None.

• Marketable securities held (excluding investments in subsidiaries and associates) : (Attached Table 2)

• Cumulative purchase or sale of the same securities amounts to NT$300 million or more than 20% of the paid-in capital: None.

• The amount of real estate acquired is NT$300 million or more than 20% of the paid-in capital: None.

• Disposal of real estate with an amount of NT$300 million or more than 20% of the paid-in capital: None.

• The amount of purchase and sale of goods with related parties reaches NT$100 million or more than 20% of the paid-in capital: None.

• Receivables from related parties amounting to NT$100 million or more than 20% of paid-in capital: None.

• Information about the derivative financial instruments transaction: None.

• Other business relationships and important transactions and amounts between parent and subsidiary companies and between subsidiaries, none.

• (2) Information about reinvestment business. (Note 3)

• (3) Investment information of China: None.

• (4) Information on major shareholders: the name, amount and proportion of shareholders with a shareholding ratio of 5% or more. (Attached Table 4)

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Chateau International Development Company Limited Financings provided January 1 to December 31, 2020

Attached Table 1

Unit: Thousands of New Taiwan Dollars

No.	Financing Company	Entities to which the company may loan funds.	Account subject	Related parties or not	The highest amount in this period	Ending balance	Actual spending amount	Interest rate range （％）	The nature of the loan	Business transacti on amount	Reasons why short- term financing is necessary	The amount of allowance and doubtful debts	Collateral	Collateral	For individual objects Fund loan and limit （Note 1）	Fund loan Total limit （Note 2）
													Name	Value
0	The company	Chateau Fulang Hotel Co., Ltd.	Other receivable s－related parties	Yes	$ 150,000	$ 150,000	$ -	1.80%	Short-term financing	$ -	Operating capital	$ -	None	-	$ 367,751	$ 735,501

• Note 1：The Procedure for Lending Funds to Other Parties stipulates that the company's loan limit for a single object is 20% of the company's net value at the end of the period.

• Note 2：Procedure for Lending Funds to Other Parties stipulates that the company’s capital loan and total limit is 40% of the company’s net value at the end of the period.

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Chateau International Development Company Limited Marketable securities held December 31, 2020 Attached Table 2 Unit: Thousands of New Taiwan Dollars

Holding company	Marketable Securities Type and Name (Note)	Relationship with the securities issuer	Account		End of term	End of term		Note
				Unit／Number of shares	Carrying amount	Shareholding ratio（％）	Fair value
The company The company	Quintain Steel Co., Ltd. Smokey Joe's Co., Ltd.	Ultimate parent company None	Financial assets measured at fair value through Other comprehensive income－Current 〞	11,816,494 3,000,000	$ 145,934 32,790	3.46 17.39	$ 145,934 32,790

Note ：The securities mentioned in this table refer to the stocks, bonds, beneficiary certificates and securities derived from the above items that fall within the scope of the International Financial Reporting Standard No. 9 "Financial Instruments".

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Chateau International Development Company Limited Information of the investee company, location... etc. January 1 to December 31, 2020 Attached Table 3

Unit: Thousands of New Taiwan Dollars

The name of the investment company	The name of investee company	Area	Main business items	Original investment amount	Original investment amount	Held at the end of the period	Held at the end of the period	Held at the end of the period	Investee company Current period profit (loss)	Investment profit (loss) recognized in the current period	Note
				At the end of the period	End of last year	Number of shares	Ratio％	Carrying amount
The Company Chateau Fulang Hotel Co., Ltd.	Chateau Fulang Hotel Co., Ltd. Park Ave Shared Space Company	Taiwan Taiwan	Leisure hotel Industry Leisure service industry	$ 112,919 4,500	$ 112,919 -	9,447,188 450,000	47.00 45.00	$ 123,485 4,482	( $4,326 ) ( 39 )	( $2,272 ) -	Note 1 Note 2

Note 1：It is calculated based on the financial statements of the investee company audited by other accountants in 2020.

Note 2：It is only necessary to list the profit and loss amount of each subsidiary recognized by the company for direct reinvestment and each invested company that adopts the equity method, and the rest is exempt.

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Chateau International Development Company Limited Information on major shareholders December 31, 2020 Attached Table 4

Information on major shareholders December 31, 2020 Attached Table 4
Name of major shareholder	Shares
	Number of shares held (shares)	Shareholding ratio
Guantian Investment Development Co., Ltd. Zhongxin Development Co., Ltd. CMC Magnetics Corporation Concord International Securities Co., Ltd. Zhongjia International Investment Co., Ltd.	32,824,581 22,491,623 16,191,421 8,346,943 5,928,269	29.43% 20.16% 14.51% 7.48% 5.31%

• Note 1：The main shareholder information in this table is calculated by TDCC on the last business day of the quarter at the end of the quarter, and the shareholder holding the company’s ordinary shares that have been delivered without physical registration, totaling over 5%. The share capital recorded in the company's Individual financial statements and the actual number of shares delivered without physical registration may be different or different due to different calculation bases.

• Note 2：In the case of the above information, if the shareholder delivers the shares to the trust, it is disclosed in the individual account of the trustee who opened the trust account by the trustee. As for the shareholder’s declaration of shares held by an insider who holds more than 10% of the shares in accordance with the Securities and Exchange Act, his shareholding includes his own shareholding plus the shares delivered to the trust and the right to use the trust property, etc. Please refer to the Public Information Observatory for information on insider equity declaration.

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Chateau International Development Company Limited Statement of changes in real estate, plant and equipment January 1 to December 31, 2020 and 2019 Attached Table 5 Unit: Thousands of New Taiwan Dollars

Cost Balance as of January 1, 2019 Added Disposal Reclassification Transfer to depreciation expense （Note） Balance as of December 31, 2019 Accumulated Depreciation Balance as of January 1, 2019 Disposal Depreciation Balance as of December 31, 2019 Net as of December 31, 2019		Land	Buildings	Transportation equipment	Transportation equipment	Office equipment	Office equipment	Hydropower equipment	Hydropower equipment	Landscape gardening	Landscape gardening		Business appliance $ 27,984 3,745 - - (3,461) $ 28,268 $ - - - $ - $ 28,268	Miscellaneous equipment Unfinished projects and equipment to be inspected $ 330,212 $ 126,254 4,017 27,753 ( 842) - 60,074 ( 113,082) - - $ 393,461 $ 40,925 $ 124,776 $ - ( 802) - 25,185 - $ 149,159 $ - $ 244,302 $ 40,925	Miscellaneous equipment Unfinished projects and equipment to be inspected $ 330,212 $ 126,254 4,017 27,753 ( 842) - 60,074 ( 113,082) - - $ 393,461 $ 40,925 $ 124,776 $ - ( 802) - 25,185 - $ 149,159 $ - $ 244,302 $ 40,925
		$ 86,335 - - - - $ 86,335 $ - - - $ - $ 86,335	$ 369,837 2,087 - 19,759 - $ 391,683 $ 24,045 - 9,789 $ 33,834 $ 357,849		$ 6,369 2,282 ( 5,604) - - $ 3,047 $ 5,613 ( 4,812) 449 $ 1,250 $ 1,797		$ 22,540 637 ( 1,198) 356 - $ 22,335 $ 20,297 ( 1,137) 804 $ 19,964 $ 2,371		$ 157,143 102 - 1,539 - $ 158,784 $ 21,422 - 15,362 $ 36,784 $ 122,000		$ 52,673 600 ( 142) 17,196 - $ 70,327 $ 46,463 ( 126) 1,531 $ 47,868 $ 22,459		$ ( $		$ 330,212 4,017 ( 842) 60,074 - $ 393,461 $ 124,776 ( 802) 25,185 $ 149,159 $ 244,302
													$
													$
													$					$

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Cost Balance as of January 1, 2020 Added Disposal Reclassification Transfer to investment property Balance as of December 31, 2020 Accumulated Depreciation Balance as of January 1, 2020 Disposal Depreciation Balance as of December 31, 2020 Net as of December 31, 2020		Land	Buildings	Transportation equipment	Transportation equipment	Office equipment	Office equipment	Hydropower equipment	Hydropower equipment	Landscape gardening	Landscape gardening		Business appliance $ 28,268 2,467 - - ( 2,341) $ 28,394 $ - - - $ - $ 28,394	Miscellaneous equipment Unfinished projects and equipment to be inspected $ 393,461 $ 40,925 1,538 15,836 ( 355) - 272 ( 25,351) - - $ 394,916 $ 31,410 $ 149,159 $ - ( 355) - 24,813 - $ 173,617 $ - $ 221,299 $ 31,410		Total
		$ 86,335 - - 5,376 - $ 91,711 $ - - - $ - $ 91,711	$ 391,683 731 - 19,658 - $ 412,072 $ 33,834 - 9,348 $ 43,182 $ 368,890		$ 3,047 - - - - $ 3,047 $ 1,250 - 641 $ 1,891 $ 1,156		$ 22,335 643 ( 73) - - $ 22,905 $ 19,964 ( 73) 943 $ 20,834 $ 2,071		$ 158,784 115 - - - $ 158,899 $ 36,784 - 11,700 $ 48,484 $ 110,415		$ 70,327 - - - - $ 70,327 $ 47,868 - 3,260 $ 51,128 $ 19,199					$ 1,195,165 21,330 ( 428) ( 45) ( 2,341) $ 1,213,681 $ 288,859 ( 428) 50,705 $ 339,136 $ 874,545

Note ：The business appliance is transferred to the depreciation expense when it is actually damaged.

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§LIST OF IMPORTANT ACCOUNTING ITEMS§

Number/Index

Item List of assets, liabilities and equity items List of cash and cash equivalents List of financial assets measured at fair value through other comprehensive gains and losses-current List of financial assets measured at cost after amortization List of accounts receivable List of inventories List of prepayments List of Investment using equity method List of other current assets List of changes in property, plant and equipment List of changes in accumulated depreciation of property, plant and equipment List of changes in investment property List of changes in the right to use assets List of changes in accumulated depreciation of right-of-use assets List of changes in intangible assets List of Deferred income tax asset List of other non-current assets List of Accounts payable List of long-term debt payable List of Lease liability List of other payable List of other current liabilities List of profit and loss items List of Operating income List of Operating cost List of selling Expense List of Administrative expense List of Other income and expense net amount List of Financial cost List of Employee benefits, depreciation and amortization expense function summary table incurred in the current period	Number/Index
	Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Note 17 Attached Table 5 Attached Table 5 Note 14 Table 8 Table 9 Note 15 Note 24 Note 17 Table 10 Note 18 and Table 11 Note 13 Note 19 Note 19 Note 22 Table 12 Table 13 Table 13 Note 23 Note 23 Table 14

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Chateau International Development Company Limited List of cash and cash equivalents December 31, 2020 Table 1 Unit: Thousands of New Taiwan Dollars Item Bank savings Bank cheques and demand deposits Cash on hand and working capital		Amount
		$ 136,817 3,435 $ 140,252

Note: There are no cash on hand, demand deposits and time deposits in foreign currencies on the company's account.

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Chateau International Development Company Limited List of financial assets measured at fair value through other comprehensive gains and losses-current December 31, 2020 Table 2

Unit: Thousands of New Taiwan Dollars

Listed stocks Quintain Steel Co., Ltd. Unlisted (counter) stocks Smokey Joe's Co., Ltd.	Number of units Amount 11,816,494 $ 145,934 3,000,000 $ 32,790	marketprice Unit price (NT$) Total Amount $ 12.35 $ 145,934 $ 10.93 $ 32,790	Note
			Note 1 Note 2

Note 1：It is the closing price at the end of December 2020.

Note 2：The basis of the market price is to estimate the fair value by the evaluation method.

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Chateau International Development Company Limited List of financial assets measured at cost after amortization December 31, 2020 Table 3

Unit: Thousands of New Taiwan Dollars

Item Current Trust account deposit Non-current Time deposit	Annual interest rate(%) 0.18	Expiry period 110.9.25		Amount
				$ 18,522 $ 11,000

• Note ：Financial assets measured by amortized cost-current and non-current are to provide gift certificates as performance guarantees, franchise signing deposits and gift certificate trusts respectively.

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Chateau International Development Company Limited List of accounts receivable December 31, 2020 Table 4 Unit: Thousands of New Taiwan Dollars client's name Tourism Bureau, Ministry of Transport Credit Card Payment of Taishin International Bank Eztravel Travel Service Co., Ltd. Other（Note）		Amount
		$ 6,752 1,721 1,189 3,547 $ 13,209

Note ：The amount of each account included does not exceed 5% of the balance of accounts receivable.

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Chateau International Development Company Limited List of inventories December 31, 2020 Table 5

Unit: Thousands of New Taiwan Dollars

Item Room equipment and other Ingredients and beverages commodity		Amount	Amount	Amount
		Cost $ 6,577 4,004 376 $ 10,957	marketprice
				$ 6,577 4,004 376 $ 10,957

Note ：The market price is the net realizable value.

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Chateau International Development Company Limited List of prepayment December 31, 2020 Table 6 Unit: Thousands of New Taiwan Dollars Item Prepaid insurance expenses Prepaid expenses Prepayment for purchases Other（Note）		Amount
		$ 4,000 1,973 895 62 $ 6,930

Note ：None of the balances exceeds 5% of the prepayment balance.

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Chateau International Development Company Limited List of Investment using equity method January 1 to December 31, 2020 Table 7

Unit: Thousands of New Taiwan Dollars

Long-term investments at equity Chateau Fulang Hotel Co., Ltd.	initial balance Number of shares Amount 9,447,188 $ 125,757	initial balance Number of shares Amount 9,447,188 $ 125,757	Increase this year Number of shares Amount - $ -	Increase this year Number of shares Amount - $ -	Investment loss （Note 1） ($ 2,272)	Year-end balance	Year-end balance		Amount $ 123,485	market price/Net (Note 2) $ 99,098	Provide guarantee or pledge situation
	Number of shares 9,447,188		Number of shares -			Number of shares 9,447,188	Shareholding ratio (%) % 47
					(						None

Note 1：The long-term equity investment evaluated by the company based on the equity method is recognized based on the financial statements audited by accountants during the same period.

Note 2：The difference between the year-end balance and the net value is the difference in fair value that has not been amortized and the amortization benefits downstream.

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Chateau International Development Company Limited List of changes in the right to use assets December 31, 2020 Table 8

Unit: Thousands of New Taiwan Dollars

Item Land Building Transportation Equipment office equipment	initial balance $ 6,295 78,188 17,845 1,707 $ 104,035		Increase this year $ - 3,233 711 - $ 3,944	Decrease this year $ - - ( 1,085 ) ( 1,022) ($ 2,107)		Year-end balance
						$ 6,295 81,421 17,471 685 $ 105,872

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Chateau International Development Company Limited List of changes in accumulated depreciation of right-of-use assets December 31, 2020 Table 9

Unit: Thousands of New Taiwan Dollars

Item Land Building Transportation Equipment office equipment	initial balance $ 1,304 13,177 4,389 436 $ 19,306		Increase this year $ 1,305 13,724 4,965 161 $ 20,155	Decrease this year $ - - ( 192 ) - ($ 192)		Year-end balance
						$ 2,609 26,901 9,162 597 $ 39,269

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Chateau International Development Company Limited List of Accounts payable December 31, 2020 Table 10 Unit: Thousands of New Taiwan Dollars Trade Names

Trade Names Amount Other（Note ） $ 25,146

Note ：The amount of each included account does not exceed 5% of the balance of accounts payable.

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Chateau International Development Company Limited List of long-term loan December 31, 2020 Table 11 Unit: Thousands of New Taiwan Dollars

Name First Commercial Bank Shin Kong Commercial Bank Co., Ltd. Taishin International Bank The Shanghai Commercial & Savings Bank, Ltd. Taipei Fubon Bank Yuanta Commercial Bank Co., Ltd. Yuanta Commercial Bank Co., Ltd. Chang Hwa Commercial Bank, Ltd. Chang Hwa Commercial Bank, Ltd.	Summary Collateralized borrowing Credit loan Credit loan Credit loan Credit loan Credit loan Credit loan Collateralized borrowing Collateralized borrowing	current portion of long- term loans payable $ 12,101 - - 1,667 - 30,000 30,000 15,000 5,000 $ 93,768	long-term debt payable $ 2,033 10,000 100,000 - 10,000 - - - - $ 122,033		Total $ 14,134 10,000 100,000 1,667 10,000 30,000 30,000 15,000 5,000 $ 215,801	Contract period 108.2.23～ 111.2.23 109.8.13～ 111.10.7 109.6.29～ 111.6.30 107.2.12～ 110.2.12 109.8.21～ 111.8.20 107.7.9～ 110.7.9 107.7.24～ 110.7.9 107.6.28～ 110.6.28 107.6.25～ 110.6.25	Annual interest rate （％） 1.40 1.34 1.38 1.30 1.35 1.46 1.46 1.23 1.23	Mortgage or guarantee
								Real estate None None None None None None Real estate Real estate

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Chateau International Development Company Limited List of Operating cost Year 2020 Table 12 Unit: Thousands of New Taiwan Dollars Item Inventory at the beginning of the year Plus：Purchase this year Minus：Year-end inventory Cost of goods sold Operating-related personnel costs Operating -related depreciation, amortization, rent and supplies expenses Other cost		Amount
		$ 10,724 95,158 10,957 94,925 146,488 118,134 36,761 $ 396,308

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Chateau International Development Company Limited List of operating expense Year 2020 Table 13 Unit: Thousands of New Taiwan Dollars

Item Payroll expense Utilities expense Operating royalty Repair(s) and maintenance expense Depreciation and replacement expense Commission expense Insurance expense Cleaning supplies expense Handling expense Other（Note）		Selling expenses $ 14,457 105 - 106 954 7,769 110 33 14 6,539 $ 30,087	Administrative expenses $ 47,805 30,206 20,374 9,916 14,573 5,297 12,677 9,628 9,444 37,512 $ 197,432		Total
					$ 62,262 30,311 20,374 10,022 15,527 13,066 12,787 9,661 9,458 44,051 $ 227,519

Note ：Each amount does not exceed 5% of the amount of this subject.

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Chateau International Development Company Limited List of Employee benefits, depreciation and amortization expense function summary table Table 14

Unit: Thousands of New Taiwan Dollars

Employee benefits Salary Labor and health insurance fee Pension Directors' remuneration Other Depreciation Amortization			Year 2020	Year 2020		Total $ 199,322 19,800 9,027 480 10,869 $ 239,498 $ 73,201 50,089			Year 2019	Year 2019
	Operating cost $ 137,060 13,429 5,676 - 7,751 $ 163,916 $ 55,912 48,570		Operating expenses $ 62,262 6,371 3,351 480 3,118 $ 75,582 $ 15,527 1,519	Miscellaneous expenses $ - - - - - $ - $ 1,762 -			Operating cost $ 149,133 14,732 5,878 - 8,684 $ 178,427 $ 59,968 53,073		Operating expenses $ 68,639 7,365 3,453 419 3,382 $ 83,258 $ 15,744 1,500	Miscellaneous expenses $ - - - - - $ - $ 175 -		Total
												$ 217,772 22,097 9,331 419 12,066
												$ 261,685
												$ 75,887 54,573

Note ： 1. The number of employees for this year and the previous year were 480 and 541 respectively, of which 4 directors were not part-time employees.

1. Companies whose stocks have been listed on the stock exchange or listed on the stock counter trading center should increase the disclosure of the

following information:

• (1) The average employee welfare expense for the year is 502 (In Thousands of NTD) ("Total employee benefits for the year-Total directors' remuneration" / "Number of employees for the year-Number of directors who are not part-time employees"). The average employee welfare expense of the previous year was 487 (In Thousands of NTD) ("Total employee benefits of the previous year-Total directors' remuneration" / "Number of employees in the previous year-Number of directors who were not part-time employees").

• (2) The average employee salary cost this year is 418 (In Thousands of NTD) (the total salary and cost of the year / "the number of employees this year-the number of directors who are not part-time employees"). The average employee salary cost of the previous year is 406 (In Thousands of NTD) (the total salary cost of the previous year / "the number of employees in the previous year-the number of directors who are not part-time

• 89 -

employees").

• (3) 3% of the average employee salary cost adjustment change ("Average employee salary cost of the current year-Average employee salary cost of the previous year"/Average employee salary cost of the previous year).

• (4) The supervisor's remuneration this year was 246 (In Thousands of NTD), and the supervisor's remuneration for the previous year was 279 (In Thousands of NTD).

• (5) The remuneration of directors and managers is determined by the remuneration committee in accordance with individual performance and market trends; the remuneration of employees is determined in accordance with individual performance and market trends.

• 90 -