Chateau - Interim / Quarterly Report 2021

Ticker Symbol：2722

Chateau International Development Company Limited and subsidiaries

Consolidated Financial Statements for the Nine Months Ended September 30, 2021 and 2020 and Independent Auditors’ Review Report

Address: No.15, Ln. 218, Huancheng North Rd., Hengchun Township, Pingtung County 946004, Taiwan (R.O.C.) Tel: (08)886-2377

Independent Auditors’ Report

The Board of Directors and Shareholders Chateau International Development Company Limited

Introduction

We have reviewed the accompanying consolidated balance sheets of Chateau International Development Company Limited and its subsidiaries (Château Hotels & Resorts) as of September 30, 2021 and 2020, the related consolidated statements of comprehensive income for the three months ended September 30, 2021 and 2020 and for the nine months ended September 30, 2021 and 2020, of changes in equity, and of cash flows for the nine months then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the "consolidated financial statements"). Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 "Interim Financial Reporting" ' endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with Statement of Auditing Standards No. 65 "Review of Financial Information Performed by the Independent Auditor of the Entity". A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects the consolidated financial position of the Company as of September 30, 2021 and 2020, its consolidated financial performance for the three months ended September 30, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the nine months then ended September 30, 2021 and 2020 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Deloitte & Touche

Accountant LEE, CHI-CHEN

Accountant YANG, CHAO-CHIN

No. approved by Securities and Futures Commission No. Taiwan-Financial-Securities- No.0920123784

No. approved by Financial Supervisory Commission

No. Financial-Supervisory-Securities-AuditingNo.1060023872

November 5, 2021

Chateau International Development Company Limited and Subsidiaries

Consolidated Balance Sheet

(In 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 2100 2110 2130 2150 2170 2219 2230 2280 2320 2399 21XX 2540 2570 2580 2640 2645 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 31XX 36XX 3XXX	Assets Current assets Cash and cash equivalents (Note 6) Current financial assets at fair value through other comprehensive income (Note 7) Current financial assets at amortized cost (Notes 8 and 29) Accounts receivable, net (Notes 9 and 28) Other receivables Current inventories Prepayments (Note 10) Other current assets (Note 18) Total current assets Current assets Non-current assets Non-current financial assets at amortized cost (Notes 8 and 29) Investments accounted for using equity method (Note 13) Property, plant and equipment (Notes 13, 28 and 29) Right-of-use assets (Note 14) Investment property (Notes 15 and 29) Intangible assets (Note 16) Deferred tax assets (Note 4) Fund for improvements and expansions (Note 17) Other non-current assets (Notes 18 and 28) Total non-current assets Total assets Liabilities and equity Current liabilities Short-term loans (Notes 19 and 29) Short-term notes and bills payable (Notes 19 and 29) Current contract liabilities (Note 23) Notes payable Accounts payable (note 28) Other payables (Notes 20 and 28) Dividend payable Current tax liabilities Current lease liabilities (Note 4) Long-term liabilities, current portion (Notes 19 and 29) Other current liabilities, others (Notes 20 and 28) Non-current liabilities Non-current portion of non-current borrowings (Notes 19 and 30) Deferred tax liabilities (Note 4) Non-current lease liabilities (note 14) Net defined benefit liability, non-current (Note 4) Guarantee deposits received Total non-current liabilities Total liabilities Equity attributable to the owners of the parent (Note 22) 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 attributable to owners of parent Non-controlling interests Total equity Total liabilities and equity		September 30, 2021 (Reviewed) Amount `％` $ 98,966 4 350,569 13 23,737 1 7,162 - 702 - 10,774 - 14,596 1 130 - 506,636 19 11,000 1 3,799 - 1,179,791 44 59,917 2 576,066 22 304,862 11 2,897 - 25,388 1 5,828 - 2,169,548 81 $ 2,676,184 100 $ 30,000 1 73,312 3 21,284 1 - - 20,118 1 80,541 3 18,203 - 22,028 1 75,075 3 60,111 2 400,672 15 210,000 8 1,118 - 34,755 1 8,526 - 421 - 254,820 9 655,492 24 1,115,229 42 170,663 6 156,829 6 226,387 9 58,921 2 442,137 17 163,112 6 1,891,141 71 129,551 5 2,020,692 76 $ 2,676,184 100		December 31, 2020 (Audited) Amount `％` $ 161,178 6 178,724 7 18,522 1 13,935 1 6 - 11,092 - 12,916 - 127 - 396,500 15 11,000 1 4,482 - 1,179,382 46 72,631 3 548,143 22 339,391 13 3,749 - 8,002 - 7,520 - 2,174,300 85 $ 2,570,800 100 $ 30,000 1 60,774 2 28,223 1 - - 26,017 1 78,553 3 26,766 1 14,058 1 93,768 4 55,637 2 413,796 16 122,033 5 1,118 - 51,572 2 9,036 - 421 - 184,180 7 597,976 23 1,115,229 43 170,663 7 148,136 6 236,201 9 127,852 5 512,189 20 40,673 2 1,838,754 72 134,070 5 1,972,824 77 $ 2,570,800 100		September 30, 2020 (Reviewed)	September 30, 2020 (Reviewed)
			Amount $ 98,966 350,569 23,737 7,162 702 10,774 14,596 130 506,636 11,000 3,799 1,179,791 59,917 576,066 304,862 2,897 25,388 5,828 2,169,548 $ 2,676,184 $ 30,000 73,312 21,284 - 20,118 80,541 18,203 22,028 75,075 60,111 400,672 210,000 1,118 34,755 8,526 421 254,820 655,492 1,115,229 170,663 156,829 226,387 58,921 442,137 163,112 1,891,141 129,551 2,020,692 $ 2,676,184		Amount $ 161,178 178,724 18,522 13,935 6 11,092 12,916 127 396,500 11,000 4,482 1,179,382 72,631 548,143 339,391 3,749 8,002 7,520 2,174,300 $ 2,570,800 $ 30,000 60,774 28,223 - 26,017 78,553 26,766 14,058 93,768 55,637 413,796 122,033 1,118 51,572 9,036 421 184,180 597,976 1,115,229 170,663 148,136 236,201 127,852 512,189 40,673 1,838,754 134,070 1,972,824 $ 2,570,800		Amount $ 165,797 130,230 22,418 21,630 56 11,795 15,157 188 367,271 11,000 4,500 1,179,917 77,683 548,169 351,218 3,257 8,002 5,156 2,188,902 $ 2,556,173 $ 30,000 71,841 27,392 393 30,671 83,979 22,173 17,585 106,226 52,411 442,671 145,075 1,118 49,913 8,284 421 204,811 647,482 1,115,229 170,663 148,136 236,201 111,843 496,180 7,821) 1,774,251 134,440 1,908,691 $ 2,556,173	`％`
						(		6 5 1 1 - - 1 - 14 1 - 46 3 22 14 - - - 86 100 1 3 1 - 1 3 1 1 4 2 17 6 - 2 - - 8 25 44 7 6 9 4 19 - 70 5 75 100

The attached notes are part of this conso lidated financial statement

Chateau International Development Company Limited and subsidiaries

Consolidated Statement of Comprehensive Income

(In Thousands of New Taiwan Dollars, Except Earnings ( Loss) Per Share) (Reviewed, Not Audited)

			Three Months Ended September 30	Three Months Ended September 30	Three Months Ended September 30	Three Months Ended September 30	Three Months Ended September 30			Nine Months Ended September 30	Nine Months Ended September 30	Nine Months Ended September 30	Nine Months Ended September 30	Nine Months Ended September 30
			2021			2020				2021			2020
Code			Amount	`％`		Amount	`％`			Amount	`％`		Amount	`％`
4000	Total operating revenue
	(Note 23 and 28)		$ 116,182	100		$ 278,131	100			$ 389,339	100		$ 558,005	100
5000	Total operating costs
	(Note 10, 24 and 28)		80,735	69		111,963	40			267,057	69		310,180	56
5900	Gross profit (loss) from
	operations		35,447	31		166,168	60			122,282	31		247,825	44
	Operating expenses
	(Notes 24 and 28)
6100	Selling expenses		6,330	6		9,152	3			20,957	5		23,460		4
6200	Administrative
	expenses		45,435	39		60,374	22			140,546	36		157,765	28
6000	Total operating
	expenses		51,765	45		69,526	25			161,503	41		181,225	32
6510	Other income (Note 24)	(	11)	-		-		-		4	-		-		-
6900	Net operating income
	(loss)	(	16,329)	(14)		96,642	35		(	39,217)	(10)		66,600	12
	Non-operating income
	and expenses (Note 12,
	24 and 28)
7100	Interest income		7	-		9		-		38	-		58		-
7010	Other income		21,301	18		2,103	1			28,642	7		23,403		4
7030	Other gains and
	losses		-	-		-		-	(	46 )	-		-		-
7050	Financial costs	(	1,517 )	( 1 )	(	1,524 )	( 1 )		(	3,977 )	( 1 )	(	4,745 ) (		1 )
7070	Share of profit (loss)
	of associates and
	joint ventures
	accounted for
	using equity
	method, net	(	179 )	-		-		-	(	683 )	-		-		-
7590	Miscellaneous
	disbursements	(	803)	(1)	(	721)		-	(	2,699)	(1)	(	2,579)		-
7000	Total
	non-operatin
	g income
	and
	expenses		18,809	16	(	133)		-		21,275	5		16,137		3

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`（` Continued from the previous page `）`

			Three Months Ended	Three Months Ended	Three Months Ended	Three Months Ended	September	30		Nine Months Ended	Nine Months Ended	Nine Months Ended	Nine Months Ended	September	30
			2021				2020			2021				2020
Code		Amount		`％`		Amount		`％`	Amount		`％`		Amount		`％`
7900	Profit (loss) from
	continuing operations
	before tax	$	2,480		2	$	96,509	35	( $	17,942 )	(	5 )	$	82,737	15
7950	Total tax expense
	(income) (Notes 4 and
	25)	(	96)		-		13,499	5		867		-		14,010		3
8200	Profit (loss) from
	continuing operations		2,576		2		83,010	30	(	18,809)	(	5)		68,727	12
	Other comprehensive
	income
8310	Items not
	reclassified to
	profit or loss:
8316	Unrealized
	gains
	(losses)
	from
	investments
	in equity
	instruments
	measured at
	fair value
	through
	other
	comprehensi
	ve income	(	124,767)	(107)			2,718	1		122,439		32		19,379		4
8500	Total comprehensive
	income	($	122,191)	(105)		$	85,728	31	$	103,630		27	$	88,106	16
	Profit (loss), attributed to`：`
8610	Shareholders of the
	parent	$	4,619		4	$	83,034	30	( $	14,290 )	(	4 )	$	70,919	13
8620	Non-controlling
	interests	(	2,043)	(	2)	(	24)	-	(	4,519)	(	1)	(	2,192)	(	1)
8600		$	2,576		2	$	83,010	30	($	18,809)	(	5)	$	68,727	12
	Comprehensive income
	attributable to`：`
8710	Shareholders of the
	parent	( $	120,148 )	( 103 )		$	85,752	31	$	108,149		28	$	90,298	16
8720	Non-controlling
	interests	(	2,043)	(	2)	(	24)	-	(	4,519)	(	1)	(	2,192)		-
8700		($	122,191)	(105)		$	85,728	31	$	103,630		27	$	88,106	16
	Net profit per Share NT$,
	Note 26)
9750	Basic net profit per
	share	$	0.04			$	0.74		( $	0.13 )			$	0.64
9850	Diluted net profit per
	share		0.04				0.74		(	0.13 )				0.64

The attached notes are part of this consolidated financial statement.

Chateau International Development Company Limited and subsidiaries

Consolidated Statement of Changes In Equity

(In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

Equity attributable to Shareholders of parent	Equity attributable to Shareholders of parent	Equity attributable to Shareholders of parent		Total equity attributable to owners of parent $ 1,838,754 - - ( 55,762 ) ( 14,290 ) 122,439 108,149 $ 1,891,141 $ 1,706,258 - - ( 22,305 ) 70,919 19,379 90,298 $ 1,774,251	Non-controlling interests $ 134,070 - - - ( 4,519 ) - ( 4,519) $ 129,551 $ 136,632 - - - ( 2,192 ) - ( 2,192) $ 134,440	Total Equity	Total Equity
Retained earnings Special reserve Legal reserve Special reserve Unappropriated retained earnings (accumulated deficit) $ 148,136 $ 236,201 $ 127,852 8,693 - ( 8,693 ) - ( 9,814 ) 9,814 - - ( 55,762 ) - - ( 14,290 ) - - - - - ( 14,290) $ 156,829 $ 226,387 $ 58,921 $ 144,136 $ 212,747 $ 90,683 4,000 - ( 4,000 ) - 23,454 ( 23,454 ) - - ( 22,305 ) - - 70,919 - - - - - 70,919 $ 148,136 $ 236,201 $ 111,843			Other equity Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income $ 40,673 - - - - 122,439 122,439 $ 163,112 ( $ 27,200 ) - - - - 19,379 19,379 ($ 7,821)
Legal reserve $ 148,136 8,693 - - - - - $ 156,829 $ 144,136 4,000 - - - - - $ 148,136	Special reserve $ 236,201 - ( 9,814 ) - - - - $ 226,387 $ 212,747 - 23,454 - - - - $ 236,201
	(	( ( ( ( ( ( (	( (	( ( (	( ( ( (	( ( (	$ 1,972,824 - - 55,762 ) 18,809 ) 122,439 103,630 $ 2,020,692 $ 1,842,890 - - 22,305 ) 68,727 19,379 88,106 $ 1,908,691

Chateau International Development Company Limited and subsidiaries

Consolidated Cash Flow Statement

(In Thousands of New Taiwan Dollars) (Reviewed, Not Audited)

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 A22300 Share of loss (profit) of associates and joint ventures accounted for using equity method A22500 Loss (gain) on disposal of property, plan and equipment A22800 Loss (gain) on disposal of intangible assets A29900 Loss (gain) on disposal of Right-of-use assets A30000 Changes in operating assets and liabilities 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 A32130 Increase (decrease) in notes payable A32150 Increase (decrease) in accounts liabilities 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 tax paid AAAA Net cash flows from (used in) operating activities Cash flows from (used in) investing activities B00040 Acquisition of financial assets at amortized cost B00050 disposal of financial assets at amortized cost `（`Next page`）`	Nine Months Ended September 30	Nine Months Ended September 30
	2021 ( $ 17,942 ) 53,662 36,356 3,977 ( 38 ) ( 4,136 ) 683 ( 4 ) 46 - 6,773 ( 696 ) 318 ( 1,680 ) ( 3 ) ( 6,939 ) - ( 5,899 ) 3,800 4,474 ( 510) 72,242 ( 8,578) 63,664 ( 5,215 ) -	2020
		$ 82,737 61,001 37,654 4,745 ( 58 ) - - - - ( 2 ) ( 11,258 ) 888 ( 996 ) ( 1,605 ) 2,744 7,173 369 3,257 2,604 ( 13,706 ) ( 235) 175,312 - 175,312 - 8,850

`（` Continued from the previous page `）`

Code B00100 Acquisition of financial assets at fair value through profit or loss B01800 Acquisition of investments accounted for using equity method B02700 Acquisition of property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B05400 Acquisition of Investment property B04500 Acquisition of intangible assets B05350 Acquisition of use-of-right assets B06700 Decrease in other non-current assets B07100 Decrease in prepayments for business facilities B07500 Interest received B07600 Dividends received B09900 Increase in Fund for improvements and expansions 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 C04300 Increase 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	Nine Months Ended September 30	Nine Months Ended September 30
	2021 ( 49,406 ) - ( 41,864 ) $ 76 ( 27,000 ) ( 1,873 ) - 216 1,476 38 4,136 ( 17,386) ( 136,802) - - 202,500 ( 190,000 ) 150,000 ( 80,726 ) ( 11,166 ) - ( 55,762 ) ( 3,920) 10,926 ( 62,212 ) 161,178 $ 98,966	2020
		- ( 4,500 ) ( 27,029 ) $ 110 - ( 2,957 ) ( 3,233 ) ( 87 ) ( 755 ) 58 - ( 8,000) ( 37,543) 70,000 ( 70,000 ) 199,000 ( 156,000 ) 270,000 ( 336,430 ) ( 16,347 ) 121 ( 22,305 ) ( 4,969) ( 66,930) 70,839 94,958 $ 165,797

The attached notes are part of this consolidated financial statement.

Chateau International Development Company Limited and subsidiaries

Notes to the Consolidated Financial Statement For The Nine Months Ended September 30, 2021 And 2020 (Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise) (Reviewed, Not Audited)

1. General

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%, 29.43% and 30.77% of the company's comprehensive shareholding ratio as of September 30, 2021, December 31,2020 and September 30, 2020, 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 consolidated financial statement is expressed in New Taiwan Dollar, the company’s functional currency.

2. The Authorization Of Financial

The accompanying consolidated financial statements were reported to the Board of Directors and issued on November 5, 2021.

3. Application Of New And Revised International Financial Reporting Standards

(1) For the first time, it is applicable to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations and SIC Interpretations (hereinafter referred to as "IFRSs") recognized and issued by the Financial Supervisory Commission (hereinafter referred to as the "FSC").
(2) The IFRSs issued by International Accounting Standards Board (IASB) and endorsed by FSC with effective date starting 2022

Effective Date Issued New, Revised or Amended Standards and Interpretations by IASB Annual Improvements to IFRS Standards 2018 - 2020 Cycle January 1, 2022 (Note 1) Amendments to IFRS 3 “Reference to the Conceptual Framework January 1, 2022 (Note 2) Amendments to IAS 16 “Property, Plant and Equipment - January 1, 2022 (Note 3) Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts–Cost of Fulfilling January 1, 2022 (Note 4) a Contract”

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Note 1: 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 2: This amendment applies to business mergers whose acquisition date starts after January 1, 2022 during the annual reporting period.
Note3: 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 4: Contracts that have not fulfilled all obligations on January 1, 2022 apply to this amendment.

As of the date of approval of this consolidated financial report, the consolidated 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.

(3) The IFRSs issued by IASB, but not yet endorsed and issued into effect by the FSC Effective Date Issued by New, Revised or Amended Standards and Interpretations IASB (Note 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of To be determined by IASB Assets between an Investor and its Associate or Joint Venture IFRS 17 "Insurance Contract" January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IAS 1 “Classification of Liabilities as Current January 1, 2023 or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” January 1, 2022 (Note 2) Amendments to IAS 8 “Definition of Accounting Estimates” January 1, 2022 (Note 3) Amendments to IAS 12 “Deferred Tax related to Assets and January 1, 2022 (Note 4) Liabilities arising from a Single Transaction”

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 postponement of the annual reporting period starting after January 1, 2023 is applicable to this amendment.
Note 3: 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.
Note 4: Except for the recognition of deferred income tax on temporary differences between lease and decommissioning obligations on January 1, 2022, the amendment is applicable to transactions that occur after January 1, 2022.

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4. Summary Of Significant Accounting Policies

(1) Statement of Compliance

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34, “Interim Financial Reporting,” endorsed and issued into effect by the FSC. The consolidated financial statements do not present all the disclosures required for a complete set of annual consolidated financial statements prepared under the IFRSs endorsed and issued into effect by the FSC (collectively, “Taiwan-IFRSs”).

(2) Basis of Preparation

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 consolidated 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:

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

(3) Basis of Consolidation

This consolidated financial statement includes the financial reports of the company and the entities (subsidiaries) controlled by the company. The financial reports of the subsidiaries have been adjusted to make their accounting policies consistent with the accounting policies of the consolidated company. When preparing the consolidated financial statement, all transactions, account balances, income and expenses between each entity have been eliminated. The total consolidated profit and loss of the subsidiary is attributable to the owners and non-controlling interests of the company, e

For details of subsidiaries, shareholding ratios and business items, please refer to Note 11 and Attached Table 3.

(4) Other Significant Accounting Policies

Except for the following explanations, Please refer to the summary of significant accounting policies in the 2020 consolidated financial report.

1. Retirement Benefits

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year. Adjust the major market fluctuations and major plan amendments, settlements or other major one-off events during the current period.

2. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax. The interim period income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings; that is, the estimated average annual effective income tax rate applied to the pre-tax income of the interim period.

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

When the combined 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 combined 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 estimate only affects the current period, it is recognized in the current period of the revision; if the revision of the account ing estimate affects both the current period and the future period, it is recognized in the current period and the future period of the revision.

Please refer to the explanation of major sources of uncertainties in major accounting judgments, estimates and assumptions in the 2020 consolidated financial report.

6. Cash and cash equivalents

Cash on hand and working fund Bank cheques and demand deposits	September 30, 2021 $ 1,915 97,051 $ 98,966	December 31, 2020 $ 3,559 157,619 $ 161,178	September 30, 2020	September 30, 2020
				$ 3,906 161,891 $ 165,797

7. 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.	September 30, 2021 $ 317,779 32,790 $ 350,569	December 31, 2020 $ 145,934 32,790 $ 178,724	September 30, 2020	September 30, 2020
				$ 98,550 31,680 $ 130,230

The combined 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 combined 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.

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8. Current financial assets at amortized cost

Current Domestic investment Trust account (1) Non-current Domestic investment Pledged time deposits with the original expiry date more than 3 months (2)	September 30, 2021 $ 23,737 $ 11,000	December 31, 2020 $ 18,522 $ 11,000	September 30, 2020	September 30, 2020
				$ 22,418 $ 11,000

(1) Since October 2017, the combined company has established the trust account of Cathay United Bank in accordance with the law. As of September 30, 2021, December 31, 2019 and September 30, 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 are15,762 (In Thousands of NTD), 11,167(In Thousands of NTD), and 10,313 (In Thousands of NTD).
(2) As of September 30, 2021, December 31, 2019 and September 30, 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%.
(3) For information on pledge of financial assets measured at amortized cost, please refer to Note 29.

9. Current financial assets at amortized cost

Accounts receivable Measured by amortized cost Total carrying amount	September 30, 2021 $ 7,162	December 31, 2020 $ 13,935	September 30, 2020	September 30, 2020
				$ 21,630

The average credit period of the combined company's accounts receivable is within 30 days. The policy adopted by the combined company is to only conduct transactions with individuals and corporate organizations with good credit, and the combined company’s customer group is large and unrelated. The concentration of credit risk is not h igh and is mostly cash transactions, so the risk of financial loss caused by relevant defaults is limited.

The combined 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 combined 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

13 -

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

September 30, 2021

Rate of expected credit losses Total carrying amount loss allowance （ Lifetime expected credit losses） amortized cost	Not overdue 0% $ 6,056 - $ 6,056	Overdue 1～60 days	Overdue 1～60 days	Overdue 61～90 days 0%`～`0.1% $ 12 - $ 12	Overdue 91～120 days 0.1%`～`0.5% $ - - $ -	Overdue more than 120 days 0.5%`～`1% $ - - $ -		Total
			0% $ 1,094 - $ 1,094					$ 7,162 - $ 7,162

December 31, 2020

Rate of expected credit losses Total carrying amount loss allowance （Lifetime expected credit losses） amortized cost	Not overdue 0% $ 7,987 - $ 7,987	Overdue 1～60 days	Overdue 1～60 days	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
			0% $ 567 - $ 567					$ 13,935 - $ 13,935

September 30, 2020

Rate of expected credit losses Total carrying amount loss allowance （Lifetime expected credit losses） amortized cost	Not overdue 0% $ 12,556 - $ 12,556	Overdue 1～60 days	Overdue 1～60 days	Overdue 61～90 days 0%`～`0.1% $ 3,120 - $ 3,120	Overdue 91～120 days 0.1%`～`0.5% $ 1,785 - $ 1,785	Overdue more than 120 days 0.5%`～`1% $ 82 - $ 82		Total
			0% $ 4,087 - $ 4,087					$ 21,630 - $ 21,630

10.Inventory

Room equipment and other Ingredients and beverages Commodity	September 30, 2021 $ 6,496 3,937 341 $ 10,774	December 31, 2020 $ 6,674 4,042 376 $ 11,092	September 30, 2020	September 30, 2020
				$ 6,862 4,493 440 $ 11,795

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July 1 to September 30, 2021 and 2020 and January 1 to September 30, 2021 and 2020, the hotel’s operating, room catering and leisure costs and other related costs are as follows:

are as follows:
Food and beverage costs Room cost Other costs	Three Months Ended September 30 2021 2020 $ 39,700 $ 60,732 35,553 44,118 5,482 7,113 $ 80,735 $ 111,963		Six Months Ended September 30
		2021 $ 39,700 35,553 5,482 $ 80,735		2021 $ 132,763 115,531 18,763 $ 267,057	2020
					$ 157,063 131,480 21,637 $ 310,180

11.Subsidiary

(1) Subsidiaries included in consolidated financial statements

The compilation of this consolidated financial statement is as follows:

The name of the investment company The company	Name of subsidiary Chateau Fulang Hotel Co., Ltd.	Business nature Engaged in the operation of hotels and restaurants	Percentage	of equityheld`（％）` December 31, 2020 September 30, 2020 47 47	Explanation
			September 30, 2021 47	December 31, 2020 47
					-

(2) Information on subsidiaries with significant non-controlling interests

Name of subsidiary Chateau Fulang Hotel Co., Ltd.	The proportion of equity held and voting rights of non-controllinginterests	The proportion of equity held and voting rights of non-controllinginterests	The proportion of equity held and voting rights of non-controllinginterests
	September 30, 2021 53%	December 31, 2020 53%	September 30, 2020
			53%

Please refer to Attached Table 3 for the main business place and country information of company registration.

Name of subsidiary Chateau Fulang Hotel Co., Ltd. Name of subsidiary		Profit and loss allocated to non-controlling interests	Profit and loss allocated to non-controlling interests	Profit and loss allocated to non-controlling interests	Profit and loss allocated to non-controlling interests	Profit and loss allocated to non-controlling interests	Profit and loss allocated to non-controlling interests	Profit and loss allocated to non-controlling interests	Profit and loss allocated to non-controlling interests	Profit and loss allocated to non-controlling interests
		Three Months Ended September 30					Six Months Ended September 30
		2021 2020 2021 2020 $ 2,043) ($ 24) ($ 4,519) ($ 2,192) Non-controlling interests September 30, 2021 December 31, 2020 September 30, 2020 $ 129,551 $ 134,070 $ 134,440			2020 2021 $ 24) ($ 4,519) ( Non-controlling interests		2021			2020
	(	$		(						$ 2,192)

			September 30, 2021 $ 129,551			December 31, 2020 $ 134,070		September 30, 2020
Chateau Fulang Hotel Co., Ltd.									$ 134,440

The summary financial information of the following subsidiaries is compiled based on the amount before the elimination of inter-company transactions:

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Chateau Fulang Hotel Co., Ltd.

		September 30, 2021 December 31, 2020 September 30, 2020 $ 8,902 $ 27,968 $ 10,971 348,897 325,744 323,828 ( 107,525 ) ( 94,911 ) ( 75,300 ) ( 1,439) ( 1,439) ( 1,439) $ 248,835 $ 257,362 $ 258,060 $ 119,284 $ 123,292 $ 123,620 129,551 134,070 134,440 $ 248,835 $ 257,362 $ 258,060 Three Months Ended September 30 Six Months Ended September 30 2021 2020 2021 2020 3,463 $ 6,796 $ 15,175 $ 14,787 3,854) ($ 45) ($ 8,526) ($ 4,136) 1,811 ) ( $ 21 ) ( $ 4,007 ) ( $ 1,944 ) 2,043) ( 24) ( 4,519) ( 2,192) 3,854) ($ 45) ($ 8,526) ($ 4,136) Six Months Ended September 30	September 30, 2021 December 31, 2020 September 30, 2020 $ 8,902 $ 27,968 $ 10,971 348,897 325,744 323,828 ( 107,525 ) ( 94,911 ) ( 75,300 ) ( 1,439) ( 1,439) ( 1,439) $ 248,835 $ 257,362 $ 258,060 $ 119,284 $ 123,292 $ 123,620 129,551 134,070 134,440 $ 248,835 $ 257,362 $ 258,060 Three Months Ended September 30 Six Months Ended September 30 2021 2020 2021 2020 3,463 $ 6,796 $ 15,175 $ 14,787 3,854) ($ 45) ($ 8,526) ($ 4,136) 1,811 ) ( $ 21 ) ( $ 4,007 ) ( $ 1,944 ) 2,043) ( 24) ( 4,519) ( 2,192) 3,854) ($ 45) ($ 8,526) ($ 4,136) Six Months Ended September 30	September 30, 2021 December 31, 2020 September 30, 2020 $ 8,902 $ 27,968 $ 10,971 348,897 325,744 323,828 ( 107,525 ) ( 94,911 ) ( 75,300 ) ( 1,439) ( 1,439) ( 1,439) $ 248,835 $ 257,362 $ 258,060 $ 119,284 $ 123,292 $ 123,620 129,551 134,070 134,440 $ 248,835 $ 257,362 $ 258,060 Three Months Ended September 30 Six Months Ended September 30 2021 2020 2021 2020 3,463 $ 6,796 $ 15,175 $ 14,787 3,854) ($ 45) ($ 8,526) ($ 4,136) 1,811 ) ( $ 21 ) ( $ 4,007 ) ( $ 1,944 ) 2,043) ( 24) ( 4,519) ( 2,192) 3,854) ($ 45) ($ 8,526) ($ 4,136) Six Months Ended September 30	September 30, 2021 December 31, 2020 September 30, 2020 $ 8,902 $ 27,968 $ 10,971 348,897 325,744 323,828 ( 107,525 ) ( 94,911 ) ( 75,300 ) ( 1,439) ( 1,439) ( 1,439) $ 248,835 $ 257,362 $ 258,060 $ 119,284 $ 123,292 $ 123,620 129,551 134,070 134,440 $ 248,835 $ 257,362 $ 258,060 Three Months Ended September 30 Six Months Ended September 30 2021 2020 2021 2020 3,463 $ 6,796 $ 15,175 $ 14,787 3,854) ($ 45) ($ 8,526) ($ 4,136) 1,811 ) ( $ 21 ) ( $ 4,007 ) ( $ 1,944 ) 2,043) ( 24) ( 4,519) ( 2,192) 3,854) ($ 45) ($ 8,526) ($ 4,136) Six Months Ended September 30

( ( ( (	$
	$
	$
	$

			2021 $ 1,791 ) 29,003 ) 12,500 $ 18,294)		2020
		( ( (		( ( (	$ 2,239 ) 13,386 ) 13,000 $ 2,625)

12.Investments accounted for using equity method

Investments in Associates Individually insignificant associate	September 30, 2021 $ 3,799	December 31, 2020 $ 4,482	September 30, 2020	September 30, 2020
				$ 4,500

The summary information of Individually insignificant associate is as follows:

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Three Months Ended September 30 Six Months Ended September 30 2021 2020 2021 2020 The combined company's share Net loss this year and total comprehensive profit and loss ( $ 179 ) $ - ( $ 683 ) $ -

The combined company obtained an Individually insignificant associate in 2020, and its use of Equity method of associate's profit and loss and other comprehensive income share are recognized based on associate's financial statements that have not been audited by an accountant during the same period. However, the management of the combined company believes that the above-mentioned financial statements of the investee company have not been checked by accountants and have not yet had a significant impact.

13.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 combined company is calculated on a straight-line basis based on the following durability years:

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	2~20 years
Hydropower equipment	3~20 years
Landscape gardening	2~15 years
Miscellaneous equipment	2~20 years

The business appliance of the combined 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 real estate, plant and equipment used as loan guarantee, please refer to Note 29.

14.Rental agreement

(1) right-of-use asset

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right-of-use asset Carrying amount Land Building Transportation equipment Office equipment	September 30, 2021 $ 2,708 50,152 7,049 8 $ 59,917	December 31, 2020 $ 3,686 60,548 8,309 88 $ 72,631	September 30, 2020	September 30, 2020
				$ 4,012 64,015 9,541 115 $ 77,683

Added right-of-use asset depreciation expense of right-of-use asset Land Building Transportation equipment Office equipment		Three Months Ended September 30 2021 2020 $ 326 $ 326 3,467 3,528 1,116 1,232 27 25 $ 4,936 $ 5,111	Three Months Ended September 30 2021 2020 $ 326 $ 326 3,467 3,528 1,116 1,232 27 25 $ 4,936 $ 5,111		Six Months Ended September 30	Six Months Ended September 30	Six Months Ended September 30
		2021 $ 326 3,467 1,116 27 $ 4,936			2021 $ 2,313 $ 978 10,402 3,573 80 $ 15,033		2020
							$ 3,944 $ 978 10,591 3,733 134 $ 15,436

In addition to the above-mentioned additional and recognized depreciation expenses, the consolidated company’s right-of-use assets did not undergo major sublease and depreciation from January 1 to September 30, 2021 and 2020.

(2) lease liability

liability
lease liability Carrying amount Current Non-current	September 30, 2021 $ 22,028 $ 34,755	December 31, 2020 $ 14,058 $ 51,572	September 30, 2020
				$ 17,585 $ 49,913

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

Land Building Transportation equipment Office equipment	September 30, 2021 1.61% 1.53%`～`1.61% 1.53%`～`1.61% 1.50%	December 31, 2020 1.61% 1.53%`～`1.61% 1.53%`～`1.61% 1.50%	September 30, 2020
			1.61% 1.53%`～`1.61% 1.53%`～`1.61% 1.50%

(3) Important lease activities and terms

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

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

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(4) Other lease information

Six Months Ended September 30	Six Months Ended September 30	Six Months Ended September 30
		2020
	$ 543,729 4,440 $ 548,169 Total
( ( ( ( ( (	$ 541,153 7,811 $ 548,964 $ - 718 ) 77) $ 795) $ 548,169 $ 548,964 28,000 $ 576,964 $ 821 ) 77) $ 898) $ 548,143 $ 576,066

15.Rental agreement

The Investment Property of the combined company did not undergo any material additions, dispositions and impairment from January 1 to September 30, 2021 and 2020. The fair value of the Investment Property of the combined company on December 31, 2018 was 971,009 (In Thousands of NTD). The fair value is measured by the

19 -

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 September 30, 2021, December 31, 2020, and September 30, 2020, the management of the combined 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 combined 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.

The subsidiary of the combined company leases out the Investment Property owned by it in 2020, and the lease period is 5-10 years. The rent is calculated with reference to the rent of the neighboring shopping mall and adjusted according to the agreement of the lease contract, and the rent is collected on a monthly basis. The lessee does not have the right of bargain purchase of Investment Property at the end of the lease term. The fair value of the Investment Property was approximately 13,937 and 15,975 (In Thousands of NTD) as of September 30, 2021 and 2020. The combined company’s management has assessed that there is no price drop. The fair value has not been evaluated by an independent evaluator and is only evaluated by the combined company’s management, considering the transaction situation of real estate.

The combined company leases out Investment Property under operating lease and will receive the following total lease payments in the future:

Year 1 Year 2 Year 3 Year 4 Year 5 More than 5 years	September 30,2021	September 30,2021
		$ 1,870 1,769 670 670 670 2,231 $ 7,880

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

16.Intangible asset

Franchising Computer software license	September 30, 2021 $ 304,037 825 $ 304,862	December 31, 2020 $ 337,513 1,878 $ 339,391	September 30, 2020	September 30, 2020
				$ 349,153 2,065 $ 351,218

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Cost Balance as of January 1, 2020 Additions Disposal Balance as of September 30, 2020 Accumulated amortization Balance as of January 1, 2020 Amortization expense Disposal Balance as of September 30, 2020 Net as of September 30, 2020 Cost Balance as of January 1, 2021 Additions Disposal Balance as of September 30, 2021 Accumulated amortization Balance as of January 1, 2021 Amortization expense Disposal Balance as of September 30, 2021 Net as of December 31, 2020 and January 1, 2021 Net as of September 30, 2021		Franchising $ 1,093,309 2,705 815) $ 1,095,199 $ 710,333 ) 36,528 ) 815 $ 746,046) $ 349,153 $ 1,094,994 1,836 304) $ 1,096,526 $ 757,481 ) 35,266 ) 258 $ 792,489) $ 337,513 $ 304,037	Computer software license $ 5,933 252 - $ 6,185 ( $ 2,994 ) ( 1,126 ) - ($ 4,120) $ 2,065 $ 6,391 37 - $ 6,428 ( $ 4,513 ) ( 1,090 ) - ($ 5,603) $ 1,878 $ 825		Other $ 124 - - $ 124 $ 124 ) - - $ 124) $ - $ 124 - - $ 124 $ 124 ) - - $ 124) $ - $ -		Total
	( ( ( ( ( ( ( (		( ( ( ( ( (	( ( ( (		( ( ( ( ( ( ( (	$ 1,099,366 2,957 815) $ 1,101,508 $ 713,451 ) 37,654 ) 815 $ 750,290) $ 351,218 $ 1,101,509 1,873 304) $ 1,103,078 $ 762,118 ) 36,356 ) 258 $ 798,216) $ 339,391 $ 304,862

The investment and management contract for the recreational facility area in the seaside area of the Kenting Forest Recreation Area signed by the combined 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 combined 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 amortization expense based on the following useful life on a straight-line basis:

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Franchising 2 to 30 years Computer software license 4 years Other intangible asset 5 years

17.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 September 30, 2021, December 31, 2020, and September 30, 2020, the carrying amount of funds for improvement and expansion is 25,388 (In Thousands of NTD), 8,002 (In Thousands of NTD) and 8,002 (In Thousands of NTD) mainly invested in bank time deposits.

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

Initial balance Purchase property, plant and equipment Provision		Nine Months Ended September 30	Nine Months Ended September 30
		2021 $ 8,002 17,386 $ 25,388	2020 $ 2 8,000 $ 8,002

18.Other assets

Current Temporary payments Non-current Prepayments for equipment Refundable deposits	September 30, 2021 $ 130 $ 2,045 3,783 $ 5,828	December 31, 2020 $ 127 $ 3,521 3,999 $ 7,520	September 30, 2020	September 30, 2020
				$ 188 $ 755 4,401 $ 5,156

Refundable deposits are mainly vehicle deposits required for leasing operations.

19.Borrowing

(1) short-term debt

erm debt
Collateralized borrowing (Note 29) Annual interest rate	September 30, 2021 $ 30,000 1.23%	December 31, 2020 $ 30,000 1.50%	September 30, 2020
				$ 30,000 1.50%

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(2) short-term notes and bills payable （ Note 29 ）

September 30, 2021

Guarantee/ Acceptance Agency Par value Commercial paper payable IBFC $ 73,500 December 31, 2020 Guarantee/ Acceptance Agency Par value Commercial paper payable IBFC $ 61,000 September 30, 2020 Guarantee/ Acceptance Agency Par value Commercial paper payable O-Bank`／`CBF $ 30,000 IBFC 42,000 $ 72,000	Guarantee/ Acceptance Agency Par value Commercial paper payable IBFC $ 73,500 December 31, 2020 Guarantee/ Acceptance Agency Par value Commercial paper payable IBFC $ 61,000 September 30, 2020 Guarantee/ Acceptance Agency Par value Commercial paper payable O-Bank`／`CBF $ 30,000 IBFC 42,000 $ 72,000		Discount amount $ 188 Discount amount $ 226 Discount amount $ 63 96 $ 159		Carrying amount $ 73,312 Carrying amount $ 60,774 Carrying amount $ 29,937 41,904 $ 71,841	Interest rate range 0.862% Interest rate range 0.862% Interest rate range 0.35% 0.862%	Name of collateral
							Property Name of collateral
							Property Name of collateral
Guarantee/ Acceptance Agency Commercial paper payable O-Bank`／`CBF IBFC
							`－` Property

(3) Long-term debt payable

-term debt payable
Collateralized borrowing (Note 1) Credit loan (Note 2) Minus: the part due within one year	September 30, 2021 $ 5,075 280,000 285,075 75,075 $ 210,000	December 31, 2020 $ 34,135 181,666 215,801 93,768 $ 122,033	September 30, 2020
				$ 47,134 204,167 251,301 106,226 $ 145,075

Note 1 ： Changhua Bank and First Bank guarantee loans are guaranteed by the combined company’s own land and buildings (note 29), which expire in February 2022, and as of September 30, 2021, December 31, 2020, and September 30, 2020, the annual interest rates for 2020 and 2019 are 1.40%, 1.23%~ 1.40% and 1.23%~ 1.40% respectively.
Note 2 ： Several companies including Taishin Bank and Yuanta Bank will expire before October 2022, as of September 30, 2021, December 31, 2020, and September 30, 2020, with annual interest rates ranging from 1.35%~ 1.46%, 1.30%~ 1.46% and 1.30%~ 1.50%, respectively.
23 -

(4) 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)	2.5times
Net tangible (not less than)	1.5 billion NT dollars

The above financial ratios and restrictions are based on the annual consolidated financial statements reviewed by accountants. The consolidated company has complied with the above financial ratio restrictions in 2020.

Yuanta Bank Debt ratio (not higher than) 100% Times interest earned (not less than) 5.0times 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)	5.0times
Net tangible (not less than)	1.2 billion NT dollars

The above financial ratios and restrictions are based on the annual consolidated financial statements reviewed by accountants and the second quarter consolidated financial statements reviewed. The consolidated company has complied with the above financial ratio restrictions.

Shin Kong Bank

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

The above financial ratios and restrictions are based on the annual individual financial statements reviewed by accountants. The consolidated company has complied with the above financial ratio restrictions in 2020.

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

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20.Other payables and other current liabilities

Other payables Salaries and bonuses payable Royalties payable Pay in lieu of untaken annual leave Equipment payment payable Insurance payable Utility bills payable Employee bonus payable Other Other current liabilities Accommodation vouchers in advance Meal coupons in advance Travel voucher in advance Other	September 30, 2021 $ 27,845 15,182 5,959 5,811 3,679 3,295 1,804 16,966 $ 80,541 $ 46,752 8,293 1,526 3,540 $ 60,111	December 31, 2020 $ 31,128 9,513 9,711 8,642 4,076 2,971 2,420 10,092 $ 78,553 $ 41,125 9,300 1,382 3,830 $ 55,637	September 30, 2020	September 30, 2020
				$ 28,491 12,339 9,824 7,999 3,672 3,481 2,980 15,193 $ 83,979 $ 38,528 9,013 1,382 3,488 $ 52,411

21.Retirement benefit plans

Relevant pension expenses for definite benefit plans recognized from July 1 to September 30, 2021 and 2020 and January 1 to September 30, 2021 and 2020 are calculated based on the pension cost rate determined by actuarial calculations on December 31, 2020 and 2019, and the amounts are 26 (In Thousands of NTD), (8) (In Thousands of NTD), 78(In Thousands of NTD), and 82 (In Thousands of NTD).

22.Equity

(1) Share capital of ordinary share

apital of ordinary share
Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital	September 30, 2021 120,000 $ 1,200,000 111,523 $ 1,115,229	December 31, 2020 120,000 $ 1,200,000 111,523 $ 1,115,229	September 30, 2020
				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.

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(2) Capital surplus

l 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	September 30, 2021 $ 170,581 3 79 $ 170,663	December 31, 2020 $ 170,581 3 79 $ 170,663	September 30, 2020
				$ 170,581 3 79 $ 170,663

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 24 (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:

To make up for losses.
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.
To contribute special reserve in accordance with other laws and regulations.
26 -

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:

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;
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 17 of the financial report for the relevant contribution.
The contribution can be stopped unless one of the following conditions is met:
(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.
(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%, 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's regular shareholders' meetings in May 6, 2021 and May 12 2020 resolved and approved the 2020 and 2019 earnings distribution proposals as follows:

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Legal reserve Self-provision of special surplus reserve Revert the special surplus reserve according to law Cash dividend Cash dividend per share (NT$)		Earnings distribution proposal	Earnings distribution proposal	Earnings distribution proposal
		2020 $ 8,693 $ 17,386 $ 27,200) $ 55,762 $ 0.5		2019
	(			$ 4,000 $ 23,454 $ - $ 22,305 $ 0.2

(4) Non-controlling interests

olling interests
Opening Balance Net loss for the period Ending balance		Nine Months Ended September 30
		2021 $ 134,070 4,519) $ 129,551		2020
	(		(	$ 136,632 2,192) $ 134,440

23.Net Revenue

Room income Catering income Other income		Three Months Ended September30 2021 2020 $ 90,115 $ 208,749 24,820 65,560 1,247 3,822 $ 116,182 $ 278,131	Three Months Ended September30 2021 2020 $ 90,115 $ 208,749 24,820 65,560 1,247 3,822 $ 116,182 $ 278,131		Nine Months Ended September30	Nine Months Ended September30	Nine Months Ended September30
		2021			2021 $ 283,962 100,663 4,714 $ 389,339		2020
		$ 90,115 24,820 1,247 $ 116,182					$ 405,487 144,546 7,972 $ 558,005

Contract balance

Contract balance
Contract liability－Current Deposit received in advance	September30, 2021		December 31, 2020 $ 28,223	September30, 2020 $ 27,392		January 1, 2020
		$ 21,284				$ 20,219

24.Profit before tax

(1) Other income and net expenses

ncome and net expenses
Disposal of benefits (losses) of property, plant and equipment		Three Months Ended September30 2021 2020 $ 11) $ -	Nine Months Ended September30
		2021 $ 11)	2021 $ 4	2020
	(			$ -

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(2) Interest income

t income
Bank deposits Other	Three Months Ended September30 2021 2020 $ 4 $ 5 3 4 $ 7 $ 9	Nine Months Ended September30
	2021 $ 4 3 $ 7	2021 $ 25 13 $ 38	2020
			$ 41 17 $ 58

(3) Other income

Three Months Ended September30 2021 2020 $ 613 $ 814 4,136 - 14,600 - 1,952 1,289 $ 21,301 $ 2,103 Three Months Ended September30 2021 2020 $ - $ -	Nine Months Ended September30	Nine Months Ended September30
	2021 2020 $ 2,071 $ 2,171 4,136 - 19,040 18,208 3,395 3,024 $ 28,642 $ 23,403 Nine Months Ended September30	2020

2021 $ -	2021 $ 46	2020
		$ -

(4) Other benefits and losses

(5) Miscellaneous expenses

aneous expenses
depreciation expense Investment Property related expenses Other	Three Months Ended September30 2021 2020 $ 426 $ 438 16 19 361 264 $ 803 $ 721	Nine Months Ended September30
	2021 $ 426 16 361 $ 803	2021 $ 1,284 57 1,358 $ 2,699	2020
			$ 1,332 60 1,187 $ 2,579

(6) Financial costs

Interest on lease liability Minus: The amount included in the cost of eligible assets (listed under Real estate, plant and equipment)		Three Months Ended September30 2021 2020 $ 1,398 $ 1,389 232 293 1,630 1,682 113) ( 158) $ 1,517 $ 1,524	Three Months Ended September30 2021 2020 $ 1,398 $ 1,389 232 293 1,630 1,682 113) ( 158) $ 1,517 $ 1,524		Nine Months Ended September30	Nine Months Ended September30	Nine Months Ended September30
		2021 $ 1,398 232 1,630 113) $ 1,517			2021 $ 3,582 728 4,310 333) $ 3,977		2020
	(		(	(		(	$ 4,266 914 5,180 435) $ 4,745

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The relevant information of capitalization of interest is as follows:

The amount of capitalization of interest The interest rate of capitalization of interest	Three Months Ended September30 2021 2020 $ 113 $ 158 1.35%`～`1.46% 1.23%`～`1.46%	Nine Months Ended September30	Nine Months Ended September30
	2021 $ 113 1.35%`～`1.46%	2021 $ 333 1.23%`～`1.46%	2020
			$ 435 1.23%`～`1.46%

(7) Depreciation and amortization

iation and amortization
Investment property Property, plant and equipment Intangible assets Right-of-use assets Depreciation expense summarized by function Operating cost Operating expenses Miscellaneous expenses Amortization expense summarized by function Operating cost Operating expenses	Three Months Ended September30 2021 2020 $ 26 $ 25 12,806 13,292 11,979 12,255 4,936 5,111 $ 29,747 $ 30,683 $ 13,415 $ 13,578 3,927 4,412 426 438 $ 17,768 $ 18,428 $ 11,678 $ 11,892 301 363 $ 11,979 $ 12,255	Nine Months Ended September30
	2021 $ 26 12,806 11,979 4,936 $ 29,747 $ 13,415 3,927 426 $ 17,768 $ 11,678 301 $ 11,979	2021 $ 77 38,552 36,356 15,033 $ 90,018 $ 40,347 12,031 1,284 $ 53,662 $ 35,266 1,090 $ 36,356	2020
			$ 77 45,488 37,654 15,436 $ 98,655 $ 46,888 12,781 1,332 $ 61,001 $ 36,528 1,126 $ 37,654

(8) Employee benefits expenses

ee benefits expenses
Short-term employee benefits Salary Labor and health insurance Directors' remuneration Other Retirement benefit plans Defined contribution plans Defined benefit plans(Note 21)	Three Months Ended September30 2021 2020 $ 46,778 $ 55,826 5,225 5,392 120 120 2,789 2,847 54,912 64,185 2,278 2,323 26 ( 8) 2,304 2,315 $ 57,216 $ 66,500		Nine Months Ended September30
	2021 $ 46,778 5,225 120 2,789 54,912 2,278 26 2,304 $ 57,216		2021 $ 147,642 16,681 369 7,932 172,624 7,135 78 7,213 $ 179,837	2020
		(		$ 156,340 16,070 360 8,204 180,974 6,968 82 7,050 $ 188,024

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Summary by function Operating cost Operating expenses		Three Months Ended September30 2021 2020 $ 37,082 $ 45,341 20,134 21,159 $ 57,216 $ 66,500	Three Months Ended September30 2021 2020 $ 37,082 $ 45,341 20,134 21,159 $ 57,216 $ 66,500		Nine Months Ended September30	Nine Months Ended September30	Nine Months Ended September30
		2021 $ 37,082 20,134 $ 57,216			2021 $ 122,638 57,199 $ 179,837		2020
							$ 128,930 59,094 $ 188,024

(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 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 pre-tax net loss from January 1 to September 30, 2021, is not assessed for employee compensation.

The estimated employee compensation for the period from January 1 to September 30, 2021 is as follows:

Estimated ratio

Estimated ratio
Remuneration of employee Amount Remuneration of employee	July 1 toSeptember 30, 2020 $ 858	January 1 to September30,2020
		1% January 1 to September30,2020

			$ 858

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

The remuneration of employees and the remuneration of directors and supervisors for 2020 and 2019 were paid in cash by the resolutions of the board of directors on February 5, 2021 and February 24, 2020 as follows:

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Amount

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

There is no difference between the actual allotment amount of remuneration of employees and remuneration of Directors and Supervisors in 2020 and 2019 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.

25.Income tax

(1) Income tax recognized in profit and loss

The main components of income tax recognized in profit and loss was as follows:

Current tax expense recognized in the current year Income tax adjustments on prior years Income tax adjustments on prior years Deferred tax Current tax expense recognized in the current year Income tax recognized in profit and loss		Three Months Ended September30 2021 2020 $ - $ 13,609 - - - 13,609 96) ( 110) $ 96) $ 13,499		Nine Months Ended September30	Nine Months Ended September30
	( (	2021 $ - - - 96) ( $ 96)		2021 $ - 15 15 852 $ 867	2020 $ 13,610 69 13,679 331 $ 14,010

(2) Verification situation of income tax

The company's and its subsidiaries' profit-making business income tax declarations before 2019 has been approved by the Revenue Service Office.

26.Net earning(loss) per share

It is used to calculate the net earning (loss) per share and the weighted average number of ordinary shares as follows:

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Net profit (loss) for the period

Three Months Ended September30 2021 2020 $ 4,619 $ 83,034 Three Months Ended September30 2021 2020 111,523 111,523 - 31 111,523 111,554		Nine Months Ended September30 2021 2020 $ 14,290) $ 70,919 Unit: Thousand shares Nine Months Ended September30 2021 2020 111,523 111,523 - 34 111,523 111,557

	(
2021 111,523 - 111,523		2021 111,523 - 111,523

If the company of the combined company chooses to issue the remuneration of employees in stocks or cash, when calculating the dilutive earnings(loss) 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(loss) per share. When calculating the dilutive earnings(loss) 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.

From January 1 to September 30, 2021 and 2020, the consolidated company was settled as a net loss. The effect of the anti -dilution effect of employee compensation on potential ordinary shares was not included in the calculation of diluted net loss per share.

27.Financial instruments

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

The combined 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 improvement and expansion, refundable deposits (other non-current assets), short-term loan, short-term notes and bills payable, payables, dividend payable long-term loans (including due within one year) and deposits received,

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etc. The carrying amount is a reasonable approximation of Fair value.

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

repeatability

Fair value level

September 30, 2021

Financial assets measured at fair value through Other comprehensive income Investment of equity instruments Domestic listed (counter) stocks Domestic unlisted (counter) stocks December 31, 2020 Financial assets measured at fair value through Other comprehensive income Investment of equity instruments Domestic listed (counter) stocks Domestic unlisted (counter) stocks September 30, 2020		Level 1 $ 317,779 - $ 317,779 Level 1 $ 145,934 - $ 145,934 Level 1 $ 98,550 - $ 98,550		Level 2 $ - - $ - Level 2 $ - - $ - Level 2 $ - - $ -		Level 3 $ - 32,790 $ 32,790 Level 3 $ - 32,790 $ 32,790 Level 3 $ - 31,680 $ 31,680	Total
							$ 317,779 32,790 $ 350,569 Total
							$ 145,934 32,790 $ 178,724 Total
Financial assets measured at fair value through Other comprehensive income Investment of equity instruments Domestic listed (counter) stocks Domestic unlisted (counter) stocks
							$ 98,550 31,680 $ 130,230

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From January 1 to September 30, 2021 and 2020, there will be no transfer between level 1 and level 2 fair value measurement.

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.
(2) The financial asset of the third level fair value measurement held by the combined 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 measured 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)	September30, 2021 $ 170,738 350,569 489,467	December 31, 2020 $ 216,642 178,724 411,566	September30, 2020
			$ 233,304 130,230 468,606

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, short-term notes and bills payable, long-term loans (including due within one year) and deposits received.

(4) Objectives and policies of financial risk management

The combined company's main financial instruments include investment of equity instruments, receipts and payables, loans and lease liability, etc. The combined company's financial management department provides services for various business units, coordinates and coordinates the operation of entering the domestic market, and supervises and manages the financial risks related to the combined company's operations by analyzing the internal risk report of the

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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 combined 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 combined company does not trade financial instruments (including derivative financial instruments) for speculative purposes.

1. Market risk

The combined company's operating activities cause the combined 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 combined company borrows funds at a fixed interest rate and a floating interest rate at the same time, interest rate exposure occurs. The combined 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 combined company subject to interest rate exposure on the balance sheet date are as follows:

With fair value interest rate risk －Financial asset －Financial liability With cash flow interest rate risk －Financial asset －Financial liability	September30, 2021 $ 11,000 130,095 120,640 315,075	December 31, 2020 $ 11,000 126,404 175,994 245,801	September30, 2020
			$ 11,000 139,339 184,162 281,301

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 combined company from January 1 to September 30, 2021 and 2020 will be increased by 1,458 (In Thousands of NTD) and reduced by 729 (In Thousands of NTD), respectively, mainly because of the combined company’s variable interest rate risk exposure of deposits and loans.

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(2) Other price risks

As the combined 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 from January 1 to September 30, 2021 and 2020 will increase/decrease by 3,506 (In Thousands of NTD) and 1,302 (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 combined 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 combined 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 combined company are individuals and corporate organizations with good credit, so no significant credit risk is expected.

3. Liquidity risk

The combined company supports the operation of the company by managing and maintaining sufficient cash or liquid financial products. The management of the combined 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 combined company. For the unused financing facility of the combined company, please refer to the description of (2) financing facility below.

Since the equity in the capital structure of the combined 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 combined company's agreed repayment period based on the due date and undiscounted due amount:

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(2)	September 30, 2021 Instruments of fixed interest rate Instruments of floating interest rate Liabilities without interest lease liability December 31, 2020 Instruments of fixed interest rate Instruments of floating interest rate Liabilities without interest lease liability September 30, 2020 Instruments of fixed interest rate Instruments of floating interest rate Liabilities without interest lease liability Loan Commitments Credit loan facilities Used amount Unused amount Collateralized borrowing facilities Used amount Unused amount	Within 1 year $ 73,500 108,738 100,659 23,177 $ 306,074 $ 61,000 125,350 104,570 14,969 $ 305,889 $ 72,000 138,838 115,043 19,114 $ 344,995 September30, 2021 $ 280,000 130,000 $ 410,000 $ 133,500 176,500 $ 310,000

28.Related party transaction

The transactions, account balances, income and expenses between the company and its subsidiaries (which are related parties of the company) are all eliminated at the time of the merger, so they are not disclosed in this Note. Except as disclosed in other Note, the transactions between the combined company and other related parties are as follows:

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

The name of the related party
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.

Related Party Categories

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)

(2) Net revenue

Item Net revenue	Type of related party The ultimate parent company of the company Other related parties		Three Months Ended September30 2021 2020 $ 391 $ 353 25 25 $ 416 $ 378	Three Months Ended September30 2021 2020 $ 391 $ 353 25 25 $ 416 $ 378		Nine Months Ended September30	Nine Months Ended September30	Nine Months Ended September30
			2021 $ 391 25 $ 416			2021 $ 1,134 99 $ 1,233		2020
								$ 1,225 77 $ 1,302

The combined 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	Three Months Ended September30 2021 2020 $ 485 $ 2,177	Nine Months Ended September30
	2021 $ 485	2021 $ 2,601	2020
			$ 5,278

The purchase price of the combined 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 The ultimate parent company of the company Other related parties	September 30, 2021 $ 176 16 $ 192		December 31,2020 $ 135 16 $ 151	September 30, 2020	September 30, 2020
						$ 176 16 $ 192

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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 from January 1 to September 30, 2021 and 2020 is not listed in the loss allowance.

(5) Payables to related parties

Item Payables to related parties Other payables	Type of related parties Other related parties The ultimate parent company of the company	September 30, 2021 $ 1,032 $ 297		December 31,2020 $ 1,222 $ 297	September 30, 2020	September 30, 2020
						$ 1,567 $ 280

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 Other related parties		Proceeds	Proceeds	Proceeds
		Nine Months EndedSeptember30
		2021 $ 603		2020
				$ 1,510

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

Type of related parties	September30, 2021 $ 1,956 452 $ 2,408	December 31, 2020 $ 2,013 473 $ 2,486	September30, 2020	September30, 2020
The ultimate parent company of the company Other related parties				$ 2,032 494 $ 2,526

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

Type of related parties	September30, 2021 $ 156	December 31, 2020 $ 156	September30, 2020	September30, 2020
Other related parties				$ 156

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(9) Other transactions

Type of related parties The ultimate parent company of the company The ultimate parent company of the company The ultimate parent company of the company Other related parties	Property Hotel management system maintenance Lease operation premises Lease office Lease operation premises	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 The lease term is one year, and the contract is renewed every year	Item Administrative expenses Operating cost Administrative expenses Other income	Three Months Ended September30 Nine Months Ended September30	Three Months Ended September30 Nine Months Ended September30
				2021 $ 140 217 48 54	2020 2021 2020
					$ 140 $ 418 $ 418 217 649 649 - 144 - 54 163 163

(10) Compensation of key management personnel

Short-term employee benefits Post-employment benefit		Three Months Ended September30	Three Months Ended September30	Three Months Ended September30		Nine Months Ended September30	Nine Months Ended September30	Nine Months Ended September30
		2021 $ 3,348 179 $ 3,527		2020		2021 $ 10,677 559 $ 11,236		2020
				$ 4,163 193 $ 4,356				$ 12,387 602 $ 12,989

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 Long-term financing, gift certificate performance bond, franchise agreement signing deposit, bank loan and collateral of commercial paper:

Financial assets measured at amortized cost （Pledged time deposit and trust account） Net investment Property Land Net building	September30, 2021 $ 34,737 36,913 88,214 182,602 $ 342,466	December 31, 2020 $ 29,522 36,990 88,214 165,089 $ 319,815	September30, 2020	September30, 2020
				$ 33,418 37,016 88,214 166,420 $ 325,068

30.Significant contingent liabilities and unrecognized contractual commitments

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

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Significant commitments

(1) The combined 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 11,000 (In Thousands of NTD) shall be paid at the time of signing the contract. The agreed conditions regarding the combined 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 NTD$520 million yuan each year, it will be collected at 14,976 (In Thousands of NTD). If it exceeds NT$520 million, it will be calculated on a progressive basis, and the basic royalties will be paid at 7,488 (In Thousands of NTD) yuan 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.

Affected by the novel coronavirus pneumonia pandemic, the Forestry Bureau of the Agriculture Committee of the Executive Yuan agreed to postpone the payment of royalties in March and September 2021 to December 2021.

Return of assets

In accordance with the provisions of Article 5, Article 36 and Article 37 of the contract, the construction of the combined 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.

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(2) As of September 30, 2021, December 31, 2019 and September 30, 2020, the combined company has signed related contracts for the repair of franchising equipment, and the unpaid amounts are all 126 (In Thousands of NTD).
(3) As of September 30, 2021, December 31, 2019 and September 30, 2020, the combined company has committed to purchase real estate, plant and equipment, and the unpaid amount is 8,542 (In Thousands of NTD), 8,504 (In Thousands of NTD) and 19,328 (In Thousands of NTD).

31.Other matters

The combined company was affected by the global and Taiwan pandemic of COVID-19, the company was banned from dining in restaurants, and domestic anti-epidemic policies affected travelers' willingness to book rooms. As a result, operating income from July to September 2021 and January to September 2021 decreased by 58% and 30% respectively from the same period last year. In response to the impact of the epidemic, the combined company has applied for salary and working capital subsidies from the government in 2021 and 2020. And received a subsidy of 19,040 (In Thousands of NTD) and 18,556 (In Thousands of NTD) (Note 24). As of the date of publication of this consolidated financial statement, the combined company continues to evaluate the economic impact of the epidemic on the combined company.

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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33.Department Information

The information provided to chief operating decision makers for allocating resources and evaluating departmental performance, focusing on the operating entity of each product or service delivered or provided. The combined company should report the following departments:

Departmental revenue and operating results

The income and operating results of the continuing operations of the combined company are analyzed by the reporting department as follows:

January 1 to September 30, 2021 Revenue from external customers Departmental benefits (losses) Interest income Other income Other benefits and losses Financial costs Miscellaneous expenses Share of loss of associates and joint ventures accounted for using equity method Profit (loss )before tax	Chateau International Development Company Limited $ 374,728 ($ 30,741)	Chateau Fulang Hotel Co., Ltd. $ 15,175 ($ 8,098)	Adjustment and write-off ($ 564) ($ 378)		Total
	(	(	( (	( ( ( ( ( (	$ 389,339 $ 39,217 ) 38 28,642 46 ) 3,977 ) 2,699 ) 683 ) $ 17,942)

January 1 to September 30, 2020 Revenue from external customers Departmental benefits (losses) Interest income Other income Other benefits and losses Financial costs Profit (loss )before tax	Chateau International Development Company Limited $ 543,613 $ 72,920	Chateau Fulang Hotel Co., Ltd. $ 14,787 ($ 5,938)	Adjustment and write-off ($ 395) ($ 382)		Total
		(	( (	( (	$ 558,005 $ 66,600 58 23,403 4,745 ) 2,579) $ 82,737

Departmental profit and loss refers to the profit earned by each department, excluding non-operating income and expenses and income tax expense. This measurement amount is provided to the chief operating decision maker to allocate resources to the department and measure its performance.

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Chateau International Development Company Limited and subsidiaries Financings provided January 1 to September 30, 2021 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 transaction 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 receivables－ related parties	Yes	$ 150,000	$ 150,000	$ -	1.80%	Short-term financing	$ -	Operating capital	$ -	N/A	-	$ 378,228	$ 756,456

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 and subsidiaries Marketable securities held January 1 to September 30, 2021 Attached Table 2 Unit: Thousands of New Taiwan Dollars

Holding company	Marketable Securities Type and Name	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 `〞`	13,786,494 3,000,000	$ 317,779 32,790	4.03 17.39	$ 317,779 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 and subsidiaries Information of the investee company, location... etc. January 1 to September 30, 2021 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 4,500	9,447,188 450,000	47 45	$ 120,217 3,799	( $ 8,145 ) ( 1,518 )	( $ 3,828 )	Note 1 Note 2

Note 1 ： It is calculated based on the financial statements of the investee company reviewed by an accountant on June 30, 2021.. 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 September 30, 2021 Attached Table 4

Name of major shareholder	Shares	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 8,699,943 5,928,269	29.43% 20.16% 14.51% 7.80% 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 consolidated 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 and subsidiaries Statement of changes in real estate, plant and equipment January 1 to September 30, 2021 and 2020 Attached Table 5 Unit: Thousands of New Taiwan Dollars

Cost Balance as of January 1, 2020 Added Disposal Reclassification Transfer to investment real estate Transfer to depreciation expense `（`Note`）` Balance as ofSeptember 30, 2020 Accumulated Depreciation Balance as of January 1, 2020 Disposal Depreciation Transfer to investment real estate Balance as ofSeptember 30, 2020 Net as ofSeptember 30, 2020 Cost Balance as of January 1, 2021 Added Disposal Reclassification Transfer to depreciation expense （Note） Balance as ofSeptember 30, 2021 Accumulated Depreciation Balance as of January 1, 2021 Disposal Depreciation Reclassification Balance as ofSeptember 30, 2021 Net as of December 31, 2020 and January 1, 2021 Net as ofSeptember 30, 2021	Land $ 201,588 - - - ( 2,576 ) - $ 199,012 $ - - - - $ - $ 199,012 $ 204,388 - - - - $ 204,388 $ - - - - $ - $ 204,388 $ 204,388	Buildings $ 548,506 695 - - ( 5,235 ) - $ 543,966 $ 41,531 - 10,899 ( 718) $ 51,712 $ 492,254 $ 563,789 7,937 - 14,354 - $ 586,080 $ 55,122 - 10,693 - $ 65,815 $ 508,667 $ 520,265		Transportation equipment $ 3,247 - - - - - $ 3,247 $ 1,262 - 510 - $ 1,772 $ 1,475 $ 3,247 198 - - - $ 3,445 $ 1,941 - 364 - $ 2,305 $ 1,306 $ 1,140	Office equipment $ 27,497 1,134 ( 70 ) 2,669 - - $ 31,230 $ 22,657 ( 70 ) 1,066 - $ 23,653 $ 7,577 $ 30,386 2,694 - ( 14,379 ) - $ 18,701 $ 23,032 - 850 ( 9,497) $ 14,385 $ 7,354 $ 4,316		Hydropower equipment $ 158,784 115 - - - - $ 158,899 $ 36,784 - 9,720 - $ 46,504 $ 112,395 $ 158,899 - - - - $ 158,899 $ 48,484 - 5,882 - $ 54,366 $ 110,415 $ 104,533	Landscape gardening $ 70,327 - - - - - $ 70,327 $ 47,868 - 2,448 - $ 50,316 $ 20,011 $ 70,327 1,067 ( 29 ) - - $ 71,365 $ 51,128 ( 29 ) 2,503 - $ 53,602 $ 19,199 $ 17,763	Business appliance $ 28,268 2,426 - - - ( 1,760) $ 28,934 $ - - - - $ - $ 28,934 $ 28,926 1,325 - - ( 1,160) $ 29,091 $ - - - - $ - $ 28,926 $ 29,091	Miscellaneous equipment $ 393,650 1,132 ( 271 ) 68 - - $ 394,579 $ 149,182 ( 271 ) 19,085 - $ 167,996 $ 226,583 $ 395,105 2,819 ( 1,599 ) 22,889 - $ 419,214 $ 173,668 ( 1,527 ) 17,100 9,497 $ 198,738 $ 221,437 $ 220,476	Unfinished projects and equipment to be inspected $ 81,521 13,047 ( 110 ) ( 2,782 ) - - $ 91,676 $ - - - - $ - $ 91,676 $ 77,690 22,993 - ( 22,864 ) - $ 77,819 $ - - - - $ - $ 77,690 $ 77,819	Total
									( (			$ 1,513,388 18,549 ( 451 ) ( 45 ) ( 7,811 ) ( 1,760) $ 1,521,870 $ 299,284 ( 341 ) 43,728 ( 718) $ 341,953 $ 1,179,917 $ 1,532,757 39,033 ( 1,628 ) - ( 1,160) $ 1,569,002 $ 353,375 ( 1,556 ) 37,392 - $ 389,211 $ 1,179,382 $ 1,179,791

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

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AI assistant

Chateau — Interim / Quarterly Report 2021

52188_rns_2021-11-19_7252e6de-8dcf-4416-94f9-2da3a9c87162.pdf

Chateau International Development Company Limited and subsidiaries

Independent Auditors’ Report

Introduction

Scope of Review

Conclusion

Deloitte & Touche

Accountant LEE, CHI-CHEN

Accountant YANG, CHAO-CHIN

Chateau International Development Company Limited and Subsidiaries

Consolidated Balance Sheet

Chateau International Development Company Limited and subsidiaries

Consolidated Statement of Comprehensive Income

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Chateau International Development Company Limited and subsidiaries

Consolidated Statement of Changes In Equity

Chateau International Development Company Limited and subsidiaries

Consolidated Cash Flow Statement

（ Continued from the previous page ）

Chateau International Development Company Limited and subsidiaries

1. General

2. The Authorization Of Financial

3. Application Of New And Revised International Financial Reporting Standards

4. Summary Of Significant Accounting Policies

(1) Statement of Compliance

(2) Basis of Preparation

(3) Basis of Consolidation

(4) Other Significant Accounting Policies

1. Retirement Benefits

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

6. Cash and cash equivalents

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

8. Current financial assets at amortized cost

9. Current financial assets at amortized cost

September 30, 2021

December 31, 2020

September 30, 2020

10.Inventory

11.Subsidiary

(1) Subsidiaries included in consolidated financial statements

(2) Information on subsidiaries with significant non-controlling interests

12.Investments accounted for using equity method

13.Property, plant and equipment

14.Rental agreement

(1) right-of-use asset

(2) lease liability

(3) Important lease activities and terms

(4) Other lease information

15.Rental agreement

16.Intangible asset

17.Fund for improvement and expansion

18.Other assets

19.Borrowing

(1) short-term debt

(2) short-term notes and bills payable （ Note 29 ）

September 30, 2021

(3) Long-term debt payable

(4) The restrictions of financial ratio on long-term loans are as follows:

Shin Kong Bank

20.Other payables and other current liabilities

21.Retirement benefit plans

22.Equity

(1) Share capital of ordinary share

(2) Capital surplus

(3) Retained earnings and dividend policy

(4) Non-controlling interests

23.Net Revenue

Contract balance

24.Profit before tax

(1) Other income and net expenses

(2) Interest income

(3) Other income

(4) Other benefits and losses

(5) Miscellaneous expenses

(6) Financial costs

(7) Depreciation and amortization

(8) Employee benefits expenses

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

Chateau Interim / Quarterly Report 2021

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