EGST — Audit Report / Information 2020

Nov 13, 2020

Evergreen Steel Corporation

Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Evergreen Steel Corporation

Opinion

We have audited the accompanying financial statements of Evergreen Steel Corporation (the “Company”), which comprise the balance sheets as of December 31, 2020 and 2019, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters identified in the Company’s financial statements for the year ended December 31, 2020 are described as follows:

Project Revenue Recognition

The Company's project revenue mainly comes from providing steel structure engineering contracting business; during the project contract period, the project revenue is recognized based on the degree of completion. Project revenue recognition from construction depends on the degree of completion of the project which involves subjective judgment which may result in profit or loss or certain risks that are not recognized in the correct period. Therefore, we identified the project revenue recognition as a key audit matter.

• 1 -

The main audit procedures that we performed for testing the project revenue recognition are as follows:

1. We obtained an understanding of the design and implementation of the Company's project revenue evaluation method and control system by performing control tests.

2. We selected samples of the project revenue of the current year that are subject to detailed tests, which included checking the price of the customer's construction contract for consistency and the adequacy of the completion ratio, and recalculated the degree of completion and verified the correctness of the project revenue.

3. We performed analytical review of project revenue, and checked for major differences between the progress of the payment and the project contract.

Refer to Note 4 to the financial statements for the accounting policy on the assessment of construction contracts. Refer to Notes 5 and 23 for critical accounting judgments and key sources of estimation uncertainty.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

• 2 -

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

• 3 -

The engagement partners on the audits resulting in this independent auditors’ report are Ching-Fu Chang and Yung-Hsiang Chao.

Deloitte & Touche Taipei, Taiwan Republic of China

March 10, 2021

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such financial statements are those generally applied in the Republic of China.

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

• 4 -

EVERGREEN STEEL CORPORATION

BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at amortized cost - current (Notes 4, 8 and 30) Contract assets - current (Notes 4, 21, 23 and 29) Notes receivable (Notes 4 and 21) Trade receivables (Notes 4, 9 and 21) Trade receivables from related parties (Notes 4, 9, 21 and 29) Other receivables (Note 29) Inventories (Notes 4, 10 and 21) Other current assets (Note 15) Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4 and 7) Investments accounted for using equity method (Notes 4 and 11) Property, plant and equipment (Notes 4, 12 and 30) Right-of-use assets (Notes 4 and 13) Investment properties (Notes 4, 14 and 30) Other intangible assets (Note 4) Deferred tax assets (Notes 4 and 25) Refundable deposits Other non-current assets (Note 15) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 16) Short-term bills payable (Note 16) Contract liabilities - current (Notes 4, 21 and 23) Notes payable, net Trade payable, net (Notes 17 and 21) Lease liabilities - current (Notes 4 and 13) Other payables (Notes 18 and 29) Current tax liabilities (Notes 4 and 25) Provisions - current (Notes 4 and 19) Current portion of long-term borrowings (Note 16) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Note 16) Deferred tax liabilities (Notes 4 and 25) Lease liabilities - non-current (Notes 4 and 13) Net defined benefit liabilities - non-current (Notes 4 and 20) Other non-current liabilities Total non-current liabilities Total liabilities EQUITY (Note 22) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translation of the financial statements of foreign operations Unrealized gain on financial assets at fair value through other comprehensive income Total other equity Treasury shares Total equity TOTAL		2020 Amount % $ 663,913 3 3,600 - 4,190,973 22 126,225 1 511,911 2 151,094 1 14,925 - 988,027 5 164,470 1 6,815,138 35 6,328,925 33 3,648,702 19 2,384,518 12 20,479 - 7,823 - 3,561 - 17,842 - 6,683 - 79,647 1 12,498,180 65 $ 19,313,318 100 $ 690,000 4 1,799,171 9 323,755 2 349,566 2 1,132,183 6 8,756 - 147,118 1 68,835 - 60,792 - 300,000 2 32,031 - 4,912,207 26 300,000 2 65,995 - 9,738 - 23,033 - 530 - 399,296 2 5,311,503 28 3,994,260 21 396,542 2 2,190,673 11 6,347,269 33 8,537,942 44 (648) - 1,166,832 6 1,166,184 6 (93,113) (1) 14,001,815 72 $ 19,313,318 100		2019
				Amount % $ 112,038 1 3,600 - 2,759,083 18 52,461 1 318,561 2 23,900 - 13,993 - 638,739 4 29,734 - 3,952,109 26 5,467,318 36 3,290,690 21 2,394,501 16 26,674 - 11,240 - 6,766 - 20,231 - 4,176 - 97,760 1 11,319,356 74 $ 15,271,465 100 $ 200,000 1 399,869 3 297,508 2 226,745 2 953,879 6 9,307 - 120,753 1 - - 63,532 - - - 33,000 - 2,304,593 15 150,000 1 65,996 1 16,075 - 43,336 - 579 - 275,986 2 2,580,579 17 3,994,260 26 356,431 3 2,095,929 14 6,192,425 40 8,288,354 54 (921) - 171,807 1 170,886 1 (119,045) (1) 12,690,886 83 $ 15,271,465 100

The accompanying notes are an integral part of the financial statements.

• 5 -

EVERGREEN STEEL CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

OPERATING REVENUE (Notes 23 and 29) OPERATING COSTS (Notes 10, 20, 24 and 29) GROSS PROFIT OPERATING EXPENSES (Notes 20, 24 and 29) Selling and marketing expenses General and administrative expenses Expected credit (loss) gain Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income Other income (Notes 24 and 29) Other gains and (losses) (Note 24) Finance costs (Note 24) Share of profit of subsidiaries Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 25) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 20) Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income of subsidiaries accounted for using the equity method Income tax relating to items that will not be reclassified subsequently to profit or loss (Note 25)		2020 Amount % $ 7,263,895 100 (6,460,683) (89) 803,212 11 (230,668) (3) (120,279) (2) (13,277) - (364,224) (5) 438,988 6 4,515 - 125,302 1 (8,029) - (19,147) - 594,715 8 697,356 9 1,136,344 15 (92,695) (1) 1,043,649 14 (1,069) - 994,491 14 399 - 214 - 994,035 14		2019
				Amount % $ 6,109,403 100 (5,510,375) (90) 599,028 10 (321,317) (5) (111,538) (2) 37,907 - (394,948) (7) 204,080 3 8,426 - 212,282 3 (23,820) - (6,402) - 590,920 10 781,406 13 985,486 16 (38,049) (1) 947,437 15 (3,311) - (8,364) - 303 - 663 - (10,709) - (Continued)

• 6 -

EVERGREEN STEEL CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Income tax relating to items that may be reclassified subsequently to profit or loss (Note 25) Other comprehensive (loss) income for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 26) Basic Diluted		2020 Amount % $ 341 - (68) - 273 - 994,308 14 $ 2,037,957 28 $ 2.65 $ 2.65		2019
				Amount % $ (1,214) - 243 - (971) - (11,680) - $ 935,757 15 $ 2.44 $ 2.44
				$

The accompanying notes are an integral part of the financial statements.

(Concluded)

• 7 -

EVERGREEN STEEL CORPORATION

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2019 Appropriation of 2018 earnings Legal reserve Cash dividends distributed by the Company Other changes in capital surplus Treasury shares transferred to employees Compensation related to treasury shares transferred to employees Cash dividends from the Company Net profit for the year ended December 31, 2019 Other comprehensive loss for the year ended December 31, 2019, net of income tax Total comprehensive income (loss) for the year ended December 31, 2019 Dividends from claims extinguished by prescription Disposal of treasury shares Retirement of treasury shares Disposal of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT DECEMBER 31, 2019 Appropriation of 2019 earnings Legal reserve Cash dividends distributed by the Company Cash dividends from the Company Changes in percentage of ownership interests in subsidiaries Net profit for the year ended December 31, 2020 Other comprehensive income (loss) for the year ended December 31, 2020, net of income tax Total comprehensive income for the year ended December 31, 2020 Disposal of treasury shares Disposal of investments in equity instruments designated as at fair value through other comprehensive income BALANCE AT DECEMBER 31, 2020	Share Capital Ordinary Shares (In Thousands) Amount Capital Surplus 405,426 $ 4,054,260 $ 286,082 - - - - - - - - 37,722 - - 5,432 - - 35,316 - - - - - - - - - - - 93 - - 35,447 (6,000 ) (60,000 ) (43,661 ) - - - 399,426 3,994,260 356,431 - - - - - - - - 4,998 - - 8,510 - - - - - - - - - - - 26,603 - - - 399,426 $ 3,994,260 $ 396,542		Retained Earnings Legal Reserve Unappropriated Earnings $ 1,997,893 $ 6,128,546 98,036 (98,036 ) - (810,852 ) - - - - - - - 947,437 - (2,345) - 945,092 - - - - - - - 27,675 2,095,929 6,192,425 94,744 (94,744 ) - (793,071 ) - - - - - 1,043,649 - (456) - 1,043,193 - - - (534) $ 2,190,673 $ 6,347,269	Other Equity Exchange Differences on Translation of the Unrealized Gain on Financial Assets at Fair Value Through Financial Statements of Foreign Operations Other Comprehensive Income Treasury Shares $ 50 $ 207,846 $ (305,074 ) - - - - - - - - 47,815 - - - - - - - - - (971) (8,364) - (971) (8,364) - - - - - - 34,553 - - 103,661 - (27,675) - (921 ) 171,807 (119,045 ) - - - - - - - - - - - - - - - 273 994,491 - 273 994,491 - - - 25,932 - 534 - $ (648) $ 1,166,832 $ (93,113)	Total Equity $ 12,369,603 - (810,852 ) 85,537 5,432 35,316 947,437 (11,680) 935,757 93 70,000 - - 12,690,886 - (793,071 ) 4,998 8,510 1,043,649 994,308 2,037,957 52,535 - $ 14,001,815
	Ordinary Shares (In Thousands) 405,426 - - - - - - - - - - (6,000 ) - 399,426 - - - - - - - - - 399,426

The accompanying notes are an integral part of the financial statements.

• 8 -

EVERGREEN STEEL CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expense (investment properties included) Amortization expense Expected credit loss recognized (reversed) on trade receivables Treasury shares transferred to employees at cost Finance costs Interest income Dividend income Share of profit of subsidiaries Gain on disposal of long-term assets Net loss on disposal of inventories Impairment loss recognized on investment properties Realized gain on the transactions with subsidiaries Gain on lease modification Changes in operating assets and liabilities Increase in contract assets (Increase) decrease in notes receivable (Increase) decrease in trade receivables (Increase) decrease in other receivables (Increase) decrease in inventories (Increase) decrease in other current assets Increase (decrease) in contract liabilities Increase (decrease) in notes payable Increase (decrease) in trade payables Increase in other payables (Decrease) increase in provisions Decrease in deferred revenue (Decrease) increase in other current liabilities Decrease in net defined benefit liabilities Cash used in operations Interest received Interest paid Income tax paid Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at amortized cost Acquisition of investments accounted for using equity the method	2020 $ 1,136,344 137,612 4,310 13,277 - 19,147 (4,515) (100,549) (594,715) (1,173) 5,622 3,417 (1,273) - (1,431,890) (73,764) (333,821) (669) (354,910) (134,736) 26,247 122,821 178,304 25,984 (2,740) (94) (969) (21,371) (1,384,104) 4,252 (18,766) (21,259) (1,419,877) (1,543) 1,646 - (101,004)	2019 $ 985,486 112,871 6,379 (37,907) 5,432 6,402 (8,426) (167,427) (590,920) (1,267) - 23,678 (1,273) (50) (377,594) 47,051 314,642 2,095 185,644 76,845 (554,378) (114,400) (55,663) 5,130 53,132 (93) 23,748 (37,986) (98,849) 8,433 (6,264) (129,546) (226,226) (399,888) 72,254 5,800 (175,400) (Continued)

• 9 -

EVERGREEN STEEL CORPORATION

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Payments for intangible assets Proceeds from disposal of investment properties Decrease in other non-current assets Other dividends received Dividends received from subsidiaries Net cash generated from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Proceeds from bills payable Proceeds from long-term borrowings Repayments of long-term borrowings Increase (decrease) in guarantee deposits Repayment of principal portion of lease liabilities Dividends paid to owners of the Company Treasury shares sold to employees Dividends from claims extinguished by prescription Net cash generated from financing activities NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2020 $ (118,771) 663 (2,507) (1,105) - 18,113 100,549 539,260 435,301 490,000 1,399,302 600,000 (150,000) 45 (9,825) (793,071) - - 1,536,451 551,875 112,038 $ 663,913	2019 $ (372,438) 419 6,851 (4,662) 8,077 20,570 167,427 684,287 13,297 200,000 399,869 150,000 - (1,623) (13,133) (810,852) 85,537 93 9,891 (203,038) 315,076 $ 112,038

The accompanying notes are an integral part of the financial statements.

(Concluded)

• 10 -

NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

EVERGREEN STEEL CORPORATION

1. GENERAL INFORMATION

Evergreen Steel Corporation (“the Company” formerly Evergreen Heavy Industrial Corporation, which was later renamed Evergreen E-Services Corporation and Evergreen Development Corporation) was incorporated in January 1973 as a company limited by shares under the Company Law of the Republic of China. The Company merged with Evergreen Superior Alloys Corporation on August 31, 1990. In 1993, the superior alloys division and related assets were transferred or sold to Gloria Material Technology Corporation (formerly Gloria Heavy Industrial Corporation). The Company merged with Ever Pioneer Steel Corporation on October 31, 1998. In 1998, management discontinued the operations of the container production division. On September 30, 2009, the Company merged with Green Steel Structure Corporation by issuing 4,993 thousand shares to acquire a minority interest holding of 5.72%. In this merger, the Company was the survivor entity.

In January 13 2020, the Company received approval from the Taipei Exchange (TPEx) for a domestic initial public offering and its ordinary shares were listed and traded on the Emerging Stock Boards.

The Company repairs containers and manufactures and sells steel structures and related components.

The financial statements are presented in the Company’s functional currency, New Taiwan dollars.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved by the Company’s board of directors on March 10, 2021.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

• a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, the initial application of the IFRSs endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies:

Amendments to IAS 1 and IAS 8 “Definition of Material”

The Company adopted the amendments starting from January 1, 2020. The threshold of materiality that could influence users has been changed to “could reasonably be expected to influence”. Accordingly, disclosures in the consolidated financial statements do not include immaterial information that may obscure material information.

• 11 -

• b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2021

New IFRSs Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9” Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform - Phase 2” Amendment to IFRS 16 “Covid-19 - Related Rent Concessions”	Effective Date Announced by IASB
	Effective immediately upon promulgation by the IASB January 1, 2021 June 1, 2020

As of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

• c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs “Annual Improvements to IFRS Standards 2018-2020” Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Policies” Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”

Effective Date Announced by IASB (Note1)

January 1, 2022 (Note 2) January 1, 2022 (Note 3) To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 (Note 6) January 1, 2023 (Note 7) January 1, 2022 (Note 4) January 1, 2022 (Note 5)

• Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 4: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

• Note 5: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

• 12 -

• Note 6: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 7: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

• 1) Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

The amendments clarify that for a liability to be classified as non-current, the Company shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Company will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, the Company must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Company’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of the Company’s own equity instruments, and if such option is recognized separately as equity in accordance with IAS 32 “Financial Instruments: Presentation”, the aforementioned terms would not affect the classification of the liability.

• 2) Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a Contract”

The amendments specify that when assessing whether a contract is onerous, the “cost of fulfilling a contract” includes both the incremental costs of fulfilling that contract (for example, direct labor and materials) and an allocation of other costs that relate directly to fulfilling contracts (for example, an allocation of depreciation for an item of property, plant and equipment used in fulfilling the contract).

The Company will recognize the cumulative effect of the initial application of the amendments in the retained earnings at the date of the initial application.

Except for the above impact, as of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of compliance

The financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

• b. Basis of preparation

The financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

• 13 -

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• 3) Level 3 inputs are unobservable inputs for an asset or liability.

When preparing the parent company only financial statements, the Company used the equity method to account for its investments in subsidiaries. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same as the amounts attributable to the owners of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries, the share of other comprehensive income of subsidiaries, as appropriate, in the parent company only financial statements.

• c. Classification of current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within 12 months after the reporting period; and

• 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• 1) Liabilities held primarily for the purpose of trading;

• 2) Liabilities due to be settled within 12 months after the reporting period; and

• 3) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

Assets and liabilities that are not classified as current are classified as non-current.

The Company engages in the construction business, which has an operating cycle of over one year, and the normal operating cycle applies when considering the classification of the Company’s construction-related assets and liabilities.

• d. Foreign currencies

In preparing the Company’s financial statements, transactions in currencies other than the Company’s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

• 14 -

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purpose of presenting the financial statements, the assets and liabilities of the Company’s foreign operations (including subsidiaries, associates and branches in other countries that use currencies which are different from the currency of the Company) are translated into New Taiwan dollars using the exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences are recognized in other comprehensive income.

e. Inventories

Inventories consist of raw materials, supplies and inventory in transit. Inventories are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost on the balance sheet date.

f. Investments in subsidiaries

The Company uses the equity method to account for its investments in subsidiaries.

A subsidiary is an entity that is controlled by the Company.

Under the equity method, investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary. The Company also recognizes the changes in the Company’s share of equity of subsidiaries attributable to the Company.

Changes in the Company’s ownership interest in a subsidiary that do not result in the Company losing control of the subsidiary are accounted for as equity transactions. The Company recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years.

Profit or loss resulting from downstream transactions is eliminated in full only in the parent company only financial statements. Profit and loss resulting from upstream transactions and transactions between subsidiaries is recognized only in the parent company only financial statements and only to the extent of interests in the subsidiaries that are not related to the Company.

• 15 -

When the Company subscribes for additional new shares of a subsidiary at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the subsidiary. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Company’s ownership interest is reduced due to its additional subscription of the new shares of the subsidiary, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that subsidiary is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

• g. Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss.

Depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

• h. Investment properties

Investment properties are properties held to earn rental and/or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

For a transfer of classification from investment properties to property, plant and equipment, the deemed cost of an item of property for subsequent accounting is its carrying amount at the end of owner-occupation.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

i. Intangible assets

• 1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

• 2) Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

• 16 -

• j. Impairment of property, plant and equipment, right-of-use and intangible assets

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right-of-use and intangible assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

• k. Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to an acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss (FVTPL)) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

• 1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

• a) Measurement category

Financial assets are classified into the following categories: Financial assets at amortized cost and investments in equity instruments at FVTOCI.

• i. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

• i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

• 17 -

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents and trade receivables at amortized cost, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

• i) Purchased or originated credit-impaired financial asset, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

• ii) Financial asset that is not credit impaired on purchase or origination but has subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

Cash equivalents include time deposits with original maturities within 12 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

• ii. Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

• b) Impairment of financial assets and contract assets

The Company recognizes a loss allowance for expected credit losses on financial assets and contract assets at amortized cost (including trade receivables).

The Company always recognizes lifetime expected credit losses (ECLs) for trade receivables and contract assets. For all other financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

• 18 -

Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amount through a loss allowance account.

• c) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Equity instruments

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

Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

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

• 3) Financial liabilities

• a) Subsequent measurement

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

• b) Derecognition of financial liabilities

The difference between the carrying amount of the financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

l. Provisions

Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

• 19 -

1) Onerous contracts

Onerous contracts are those in which the Company’s unavoidable costs of meeting the contractual obligations exceed the economic benefits expected to be received from the contract. The present obligations arising under onerous contracts are recognized and measured as provisions.

2) Warranties

The contractual obligation of the warranty expenditure is expected to occur during the warranty period after the completion of the construction contracts. The Company sets out the provisions according to the warranty expenditure expected to occur during the warranty period. If the preparation is not enough, the current year’s expenses shall be included.

m. Revenue recognition

The Company identifies contracts with the customers, allocates transaction price to the performance obligations and recognizes revenue when the performance obligations are satisfied.

1) Revenue from the sale of goods

Revenue from sale of goods comes from manufacturing and sale of steel bars. Sales of goods are recognized as revenue when the goods are shipped or delivered to customer because that is the time customer has full discretion over the manner of distribution and the price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized concurrently.

2) Revenue from the rendering of services

Revenue from the rendering of services comes from providing container repair, renovation and storage services. Such service revenue is recognized when performance obligations are satisfied.

3) Construction contracts revenue

The Company recognizes revenue over time during the construction process. Because the cost of unit of the installation completion of the construction is directly related to fulfilling performance obligation, the Company uses the cost of unit of installation as the estimated total output incurred. The cost ratio is used to measure the progress of the completion, and after the inspection of the installation of the construction, income and cost are relatively recognized. The Company gradually recognizes contract assets during the construction process and transfers the amount to accounts receivable when issuing invoices. If the payment received for the construction project exceeds the amount, the difference is recognized as contract liability. The project retention fund is withheld by the customer as stated in the contract to ensure that the Company completes all contractual obligations and is recognized as contract assets until the Company satisfies the performance obligations.

n. Leases

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease.

1) The Company as lessor

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

• 20 -

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

2) The Company as lessee

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

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

o. Employee benefits

1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit liability are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses, and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

• 21 -

Net defined benefit liability represents the actual deficit in the Company’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

• p. Share-based payment arrangements

The fair value at the grant date of the treasury shares transferred to employees is expensed on a straight-line basis over the vesting period, based on the Company’s best estimates of the number of shares that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options. It is recognized as an expense in full at the grant date if vested immediately. The grant date of treasury shares transferred to employees is the date on which the board of directors approve the transaction.

q. Taxation

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

1) Current tax

According to the Income Tax Act in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

• 2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

• 3) Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively.

• 22 -

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION

UNCERTAINTY

In the application of the Company’s accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Company considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Construction Contracts

Contract revenue and costs are recognized by reference to the stage of completion of each contract. The stage of completion of a contract is measured based on the proportion of contract costs incurred for work performed to date as the estimated total contract costs. Under the IFRS 15, incentives and penalties are considered as variables and shall be included in the contract revenue only when it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.

The estimated total contract costs and contractual items are assessed and determined by management based on the nature of the work, expected sub-contracting charges, construction periods, processes, methods, etc., for each construction contract. Changes in these estimates might affect the calculation of the percentage of completion and related profit and loss from the construction contracts. Refer to Note 23 for related information.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalent Time deposits		December 31	December 31
		2020 $ 2,815 95,098 566,000 $ 663,913	2019 $ 2,815 43,223 66,000 $ 112,038

The market rate intervals of time deposits in the bank at the end of the reporting period were as follows:

Time deposits	December 31
	2020 2019 0.82% 1.065%

• 23 -

7. FINANCIAL ASSETS AT FVTOCI

Non-current Domestic investments Listed shares and emerging market shares Unlisted shares Foreign investments Unlisted shares		December 31	December 31
		2020 $ 5,298,293 881,433 149,199 $ 6,328,925	2019 $ 4,479,292 840,467 147,559 $ 5,467,318

These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes.

The Company sold its investments to diversify risks in 2020 and 2019, and transferred a (loss) gain of $(534) thousand and $27,675 thousand, respectively, from other equity to retained earnings.

8. FINANCIAL ASSETS AT AMORTIZED COST

Current Pledge deposits		December	31
		2020 $ 3,600	2019 $ 3,600

• a. The ranges of interest rates for pledge deposits were approximately 0.815% and 1.065% per annum as of December 31, 2020 and 2019, respectively.

• b. Refer to Note 30 for information relating to investments in financial assets at amortized cost pledged as security.

9. TRADE RECEIVABLES

Trade receivables At amortized cost Gross carrying amount Less: Allowance for impairment loss		**December 31 **	**December 31 **
		2020 $ 663,182 (177) $ 663,005	2019 $ 342,461 - $ 342,461

The average credit period on sales of goods is 0 to 120 days. In determining the recoverability of a trade receivable, the Company considers the changes in the credit quality of the trade receivable since the date of credit was initially granted to the end of the reporting period. The allowance for bad debts refers to the past arrears records of the counterparty and the analysis of its current financial status to estimate the amount that cannot be recovered.

• 24 -

The Company applies the simplified approach for the allowance of expected credit loss prescribed by IFRS 9, which permits the use of a lifetime expected loss provision for all trade receivables. The expected credit losses on trade receivables are estimated using a provision matrix approach considering the past default experience of the debtor and an analysis of the debtor’s current financial positions.

The Company writes off a trade receivable when there is evidence indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery of the receivable, e.g. when the debtor has been placed under liquidation, or when the trade receivables are over 365 days past due, whichever occurs earlier. The Company directly recognizes the impairment loss of related accounts receivable.

The following table details the Group’s aging of trade receivables.

December 31, 2020

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost December 31, 2019	Amount Without Sign of Default Amount with Sign of 0 to 60 Days 61 to 90 Days 91 to 120 Days Over 120 Days Default 0.02% 0.53% 10% - - $ 657,567 $ 5,575 $ 40 $ - $ - (144) (29) (4) - - $ 657,423 $ 5,546 $ 36 $ - $ -	Total $ 663,182 (177) $ 663,005

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	Amount Without Sign of Default Amount with Sign of 0 to 60 Days 61 to 90 Days 91 to 120 Days Over 120 Days Default - - - - - $ 340,345 $ 1,922 $ - $ 194 $ - - - - - - $ 340,345 $ 1,922 $ - $ 194 $ -	Total $ 342,461 - $ 342,461

The above is an aging analysis based on the account opening date.

The above aging schedule was based on the ledger date. The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 Less: Allowance for impairment loss Balance at December 31	2020 $ - 177 $ 177	2019 $ 14,049 (14,049) $ -

10. INVENTORIES

Raw materials Supplies Inventory in transit		December 31	December 31
		2020 $ 979,728 1,096 7,203 $ 988,027	2019 $ 629,464 7,299 1,976 $ 638,739

• 25 -

The cost of inventories, excluding the cost from steel structure industry, recognized as operating cost for the years ended December 31, 2020 and 2019 was $118,210 thousand and $139,109 thousand, respectively.

The cost of goods sold which included the inventory reversals and disposals is as follow:

Inventory write-downs (reversed) Loss of inventory scrapped and physical inventories	2020 $ 2,995 2,627 $ 5,622	2019 $ (24,864) - $ (24,864)

Previous write-downs were reversed as a result of sold of inventory that had been write-downs.

11. INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

Investments in Subsidiaries

Name of Subsidiaries Hsin Yung Enterprise Corporation Super Max Engineering Enterprise Co., Ltd. Ming Yu Investment Corporation Ever Ecove Corporation Hsin Yung Enterprise Corporation Super Max Engineering Enterprise Co., Ltd. Ming Yu Investment Corporation Ever Ecove Corporation		December 31
		2020 2019 $ 1,753,091 $ 1,643,400 825,841 728,987 289,005 237,704 780,765 680,599 $ 3,648,702 $ 3,290,690 Proportion of Ownership and Voting Rights
		**December 31 **
		2020 2019 68.46% 68.46% 48.13% 48.12% 100.00% 100.00% 50.06% 70.00%

• a. Ever Ecove Corporation handled a cash capital increase at the end of November 30, 2020. The Company did not subscribe for new shares based on the shareholding ratio. After the capital increase, the shareholding ratio dropped to 50.06%.

• b. The investments in subsidiaries accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2020 and 2019 was based on the subsidiaries’ audited financial statements for the years then ended.

• 26 -

12. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2020 Additions Disposals Reclassification Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Disposals Depreciation expense Balance at December 31, 2020 Carrying amount at December 31, 2020 Cost Balance at January 1, 2019 Additions Disposals Reclassification Transfers from investment properties Balance at December 31, 2019 Accumulated depreciation and impairment Balance at January 1, 2019 Disposals Depreciation expense Transfers from investment properties Balance at December 31, 2019 Carrying amount at December 31, 2019	Freehold Land Land Improvements $ 1,375,099 $ 159,659 - - - - - (1,288) $ 1,375,099 $ 158,371 $ - $ 121,975 - - - 3,414 $ - $ 125,389 $ 1,375,099 $ 32,982 $ 1,178,429 $ 126,736 - - - - - 32,923 196,670 - $ 1,375,099 $ 159,659 $ - $ 118,942 - - - 3,033 - - $ - $ 121,975 $ 1,375,099 $ 37,684	Buildings Machinery and Equipment Transportation Equipment $ 1,417,987 $ 742,345 $ 63,786 3,519 1,010 767 (17 ) (7,655 ) (3,307 ) 80,296 32,431 - $ 1,501,785 $ 768,131 $ 61,246 $ 870,487 $ 348,044 $ 41,149 (39 ) (7,381 ) (3,307 ) 43,986 67,971 6,510 $ 914,434 $ 408,634 $ 44,352 $ 587,351 $ 359,497 $ 16,894 $ 1,137,729 $ 575,843 $ 64,053 33,740 228 7,189 (20,671 ) (10,177 ) (7,456 ) 111,436 176,451 - 155,753 - - $ 1,417,987 $ 742,345 $ 63,786 $ 772,544 $ 302,631 $ 42,084 (15,195 ) (8,462 ) (7,456 ) 30,233 53,875 6,521 82,905 - - $ 870,487 $ 348,044 $ 41,149 $ 547,500 $ 394,301 $ 22,637	Other Equipment $ 54,138 954 (3,012 ) 1,082 $ 53,162 $ 36,858 (2,990 ) 6,599 $ 40,467 $ 12,695 $ 44,385 6,575 (717 ) 3,895 - $ 54,138 $ 32,488 (717 ) 5,087 - $ 36,858 $ 17,280	Total $ 3,813,014 6,250 (13,991 ) 112,521 $ 3,917,794 $ 1,418,513 (13,717 ) 128,480 $ 1,533,276 $ 2,384,518 $ 3,127,175 47,732 (39,021 ) 324,705 352,423 $ 3,813,014 $ 1,268,689 (31,830 ) 98,749 82,905 $ 1,418,513 $ 2,394,501

The above items of property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives as follows:

Land improvements 3-10 years Buildings 2-55 years Machinery and equipment 3-10 years Transportation equipment 5 years Other equipment 3-5 years

Property, plant and equipment pledged as collateral for bank borrowings were set out in Note 30.

• 27 -

13. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amount Land Buildings Other equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Other equipment		**December **	**31 **
	2020 2019 $ 19,476 $ 24,667 - - 1,003 2,007 $ 20,479 $ 26,674 **For the Year Ended December 31 **
		2020 $ 3,617 $ 8,128 - 1,004 $ 9,132	2019 $ 17,945 $ 6,338 4,549 1,004 $ 11,891

Except for the aforementioned addition and recognized depreciation, the Company did not have significant sublease or impairment of right-of-use assets for the years ended December 31, 2020 and 2019.

b. Lease liabilities

Carrying amount (incremental borrowing rate at 1.1%) Current Non-current		December	31
		2020 $ 8,756 $ 9,738	2019 $ 9,307 $ 16,075

• c. Material lease-in activities and terms (the Company as lessee)

The Company leases land, buildings and equipment for the use of plants and manufacturing with lease term of 2 to 3 years. The Company does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease term. In addition, the Company is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

d. Other lease information

Expenses relating to short-term leases and low-value asset leases Total cash outflow for leases	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2020 $ 9,961 $ 20,011	2019 $ 6,238 $ 19,712

• 28 -

14. INVESTMENT PROPERTIES

Cost Balance at January 1, 2020 Additions Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Impairment loss Balance at December 31, 2020 Carrying amount at December 31, 2020 Cost Balance at January 1, 2019 Disposals Transfers to property, plant and equipment Balance at December 31, 2019 Accumulated depreciation and impairment Balance at January 1, 2019 Impairment losses Disposals Depreciation expense Transfers to property, plant and equipment Balance at December 31, 2019 Carrying amount at December 31, 2019

Amount $ 150,995 - $ 150,995 $ (139,755) (3,417) $ (143,172) $ 7,823 $ 514,076 (10,658) (352,423) $ 150,995 $ (206,588) (23,678) 9,837 (2,231) 82,905 $ (139,755) $ 11,240

For the years ended December 31, 2019, the investment properties are depreciated using the straight-line method over 6-50 years.

The valuation was arrived by reference to market evidence of transaction prices for similar properties, it is fair value is as followed:

Fair value		December	31
		2020 $ 15,028	2019 $ 18,580

• 29 -

15. OTHER ASSETS

Current Prepaid expense Prepayments Tax credit Non-current Prepayments for equipment		December 31	December 31
		2020 $ 19,881 96,349 48,240 $ 164,470 $ 79,647	2019 $ 11,753 6 17,975 $ 29,734 $ 97,760

16. BORROWINGS

a. Short-term borrowings

Unsecured borrowings Line of credit borrowings		December 31	December 31
		2020 $ 690,000	2019 $ 200,000

The range of effective interest rate on bank loans was 0.88%-0.90% and 0.95% per annum as of December 31, 2020 and 2019, respectively.

• b. Short-term bills payable

Commercial paper Less: Unamortized discounts on short-term bills payable		December 31	December 31
		2020 $ 1,800,000 (829) $ 1,799,171	2019 $ 400,000 (131) $ 399,869

Outstanding short-term bills payable were as follows:

December 31, 2020

Promissory Institution Commercial paper China Bills Finance Corporation Mega Bills Finance Co., Ltd. International Bills Finance Corporation	Nominal Amount $ 600,000 600,000 600,000 $ 1,800,000	Discount Amount $ (390) (189) (250) $ (829)	Carrying Amount Interest Rate $ 599,610 0.848% 599,811 0.858% 599,750 0.868% $ 1,799,171

• 30 -

December 31, 2019

c.	Promissory Institution Commercial paper China Bills Finance Corporation Mega Bills Finance Co., Ltd. long-term borrowings Secured borrowings Bank loans (Note 30) Unsecured borrowings Bank loans Less: Current portions	Nominal Amount $ 200,000 200,000 $ 400,000	Discount Amount Carrying Amount Interest Rate $ (66) $ 199,934 0.918% (65) 199,935 0.918% $ (131) $ 399,869 December 31 2020 2019 $ 580,000 $ 150,000 20,000 - 600,000 150,000 (300,000) - $ 300,000 $ 150,000	Discount Amount Carrying Amount Interest Rate $ (66) $ 199,934 0.918% (65) 199,935 0.918% $ (131) $ 399,869 December 31 2020 2019 $ 580,000 $ 150,000 20,000 - 600,000 150,000 (300,000) - $ 300,000 $ 150,000	Discount Amount Carrying Amount Interest Rate $ (66) $ 199,934 0.918% (65) 199,935 0.918% $ (131) $ 399,869 December 31 2020 2019 $ 580,000 $ 150,000 20,000 - 600,000 150,000 (300,000) - $ 300,000 $ 150,000	Carrying Amount Interest Rate $ 199,934 0.918% 199,935 0.918% $ 399,869 December 31	Carrying Amount Interest Rate $ 199,934 0.918% 199,935 0.918% $ 399,869 December 31
			$
					2020 $ 580,000 20,000 600,000 (300,000) $ 300,000		2019 $ 150,000 - 150,000 - $ 150,000

• 1) The Company borrowed $300,000 thousand and $100,000 thousand from Taiwan Business Bank which were secured by land and building mortgage guarantees. The loan maturity date is January 16, 2024. The effective interest rate was 0.893% and 1.195% per annum as of December 31, 2020 and 2019, respectively. Starting from the actual date of disbursement, the Company paid interest monthly during the first 3 years. On the fourth year, the principal with interest will be paid monthly for 2 years. The Company borrowed $100,000 thousand for 2019, which made a full repayment of the debt in advance in January 2020.

• 2) The Company borrowed $280,000 thousand from Cathay United Bank which was secured by building mortgage guarantees and unsecured borrowings of $20,000 thousand. The loan term is from February 24, 2020 to June 28, 2021. Starting from the actual date of disbursement, the Company makes monthly amortized payments on principal and interest. The Company will fully repay the debt when it is due. The effective interest rate was 0.95%-1% per annum as of December 31, 2020.

• 3) The Company borrowed $50,000 thousand from Taiwan Cooperative Bank which was secured by land and buildings mortgage guarantee. The loan term is from January 18, 2019 to January 18, 2021. Starting from the actual date of disbursement, the Company makes monthly amortized payments on principal and interest. The Company made a full repayment of the debt in advance in January 2020. The effective interest rate was 1.2% per annum as of December 31, 2019.

17. TRADE PAYABLES

The average credit period on purchases of certain goods was 30 to 90 days. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

• 31 -

Retentions payable on construction contracts which are included in trade payables and are not bearing interest and are expected to be paid at the end of retention periods, which are within the normal operating cycle of the Company, usually more than twelve months after the reporting period. Refer to Note 21 for maturity analysis of retentions payable.

18. OTHER LIABILITIES

Current Other payables Payable for transportation fees Payable for annual leave Payable for compensation of employee and remuneration of directors and supervisors Payable for insurance expenses Payable for salaries or bonus Payable for repairs and maintenance Payable for professional fees Others		**December 31 **	**December 31 **
		2020 $ 37,745 28,164 10,745 10,516 6,907 4,664 3,388 44,989 $ 147,118	2019 $ 30,496 24,533 12,407 8,380 3,123 13,051 2,919 25,844 $ 120,753

19. PROVISIONS

Current Warranties* Onerous contract - loss on construction	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 60,723 69 $ 60,792	2019 $ 56,115 7,417 $ 63,532

• The contractual obligation of the warranty expenditure is expected to occur during the warranty period after the completion of the construction contracts.

20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

• 32 -

b. Defined benefit plans

The defined benefit plan adopted by the Company in accordance with the Labor Standards Act is operated by the government of ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company contribute amounts equal to 6% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company has no right to influence the investment policy and strategy.

The amounts included in the independent balance sheets in respect of the Company’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities		December 31	December 31
		2020 $ 349,257 (326,224) $ 23,033	2019 $ 355,637 (312,301) $ 43,336

Movements in net defined benefit liabilities were as follows:

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of		Benefit
	Obligation	the Plan Assets	Liability
Balance at January 1, 2019	$ 364,248	$ (286,237)	$	78,011
Service cost
Current service cost	5,400	-		5,400
Net interest expense (income)	3,642	(3,000)		642
Recognized in profit or loss	9,042	(3,000)		6,042
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(10,291)		(10,291)
Actuarial loss - changes in demographic
assumptions	28	-		28
Actuarial loss - changes in financial
assumptions	7,921	-		7,921
Actuarial loss - experience adjustments	5,653	-		5,653
Recognized in other comprehensive income	13,602	(10,291)		3,311
Contributions from the employer	-	(27,187)		(27,187)
Benefits paid	(14,414)	14,414		-
Company paid	(16,841)	-		(16,841)
Balance at December 31, 2019	$ 355,637	$ (312,301)	$	43,336
				(Continued)

• 33 -

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of		Benefit
	Obligation	the Plan Assets	Liability
Balance at January 1, 2020	$ 355,637	$ (312,301)	$	43,336
Service cost
Current service cost	5,435	-		5,435
Net interest expense (income)	2,667	(2,445)		222
Recognized in profit or loss	8,102	(2,445)		5,657
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(9,869)		(9,869)
Actuarial loss - changes in financial
assumptions	7,478	-		7,478
Actuarial loss - experience adjustments	3,460	-		3,460
Recognized in other comprehensive income	10,938	(9,869)		1,069
Contributions from the employer	-	(27,029)		(27,029)
Benefits paid	(25,420)	25,420		-
Balance at December 31, 2020	$ 349,257	$ (326,224)	$	23,033
				(Concluded)

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

Operating cost Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,899 2,758 $ 5,657	2019 $ 2,495 3,547 $ 6,042

Through the defined benefit plans under the Labor Standards Act, the Company is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets shall not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

• 34 -

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate(s) Expected rate(s) of salary increase Turnover rate	**December 31 **
	2020 2019 0.5% 0.75% 2% 2% 3%-7.5% 3%-7.5%

If possible reasonable change in each of the significant actuarial assumptions occur and all other assumptions remain constant, the present value of the defined benefit obligation decreases (increases) as follows:

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease		**December **	**31 **
		2020 $ (7,478) $ 7,730 $ 7,483 $ (7,278)	2019 $ (7,921) $ 8,195 $ 7,954 $ (7,730)

The sensitivity analysis previously presented may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that change in assumptions will occur in isolation of one another as some of the assumptions may be correlated.

Expected contributions to the plan for the next year Average duration of the defined benefit obligation		December	31
		2020 $ 26,834 8.8 years	2019 $ 27,427 9.2 years

21. MATURITY ANALYSIS OF ASSETS AND LIABILITIES

The current/non-current classification of the Company’s assets and liabilities relating to steel structure business was based on its operating cycle. The amount expected to be recovered or settled within one year after reporting period and more than one year after reporting period for related assets and liabilities are as follows:

Within 1 Year More Than 1 Year December 31, 2020 Assets Notes receivable $ 126,203 $ - Trade receivables 635,261 - Inventory 986,652 - Contracts assets - current 3,468,046 722,927 $ 5,216,162 $ 722,927	Total $ 126,203 635,261 986,652 4,190,973 $ 5,939,089

(Continued)

• 35 -

Within 1 Year More Than 1 Year Liabilities Notes payable $ 931 $ - Trade payables 907,412 212,977 Contracts liabilities - current 298,877 24,878 $ 1,207,220 $ 237,855 December 31, 2019 Assets Notes receivable $ 52,443 $ - Trade receivables 318,631 - Inventory 635,713 - Contracts assets - current 2,192,088 566,995 $ 3,198,875 $ 566,995 Liabilities Notes payable $ 6,655 $ - Trade payables 763,468 179,249 Contracts liabilities - current 241,181 56,327 $ 1,011,304 $ 235,576

Total $ 931 1,120,389 323,755 $ 1,445,075 $ 52,443 318,631 635,713 2,759,083 $ 3,765,870 $ 6,655 942,717 297,508 $ 1,246,880 (Concluded)

22. EQUITY

• a. Share capital

Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2020 440,000 $ 4,400,000 399,426 $ 3,994,260	2019 440,000 $ 4,400,000 399,426 $ 3,994,260

On July 31, 2019, the Company’s board of directors resolved that the subsidiary Ming Yu Corporation return the 6,000 thousand shares held by the Company with a physical reduction of capital. The above mentioned proposal of the retirement of 6,000 thousand treasury shares was approved and declared effective by the MOEA on September 2, 2019.

• 36 -

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1) Treasury share transactions Consolidation excess May only be used to offset a deficit Changes in percentage of ownership interests in subsidiaries (2) Expired employee share options Unclaimed dividends		December 31	December 31
		2020 $ 333,208 51,956 8,510 2,775 93 $ 396,542	2019 $ 301,607 51,956 - 2,775 93 $ 356,431

• 1) Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and to once a year).

• 2) Such capital surplus arises from the effects of changes in ownership interests in subsidiaries resulting from equity transactions other than actual disposals or acquisitions or from changes in capital surplus of subsidiaries accounted for using the equity method.

c. Retained earnings and dividend policy

Under the dividend policy as set forth in the Articles, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution of dividends and bonus to shareholders. For the policies on distribution of compensation of employees and remuneration of directors and supervisors before and after amendment, refer to f. employee benefits expense in Note 24.

The Company’s dividend policy is designed to meet present and future development projects and takes into consideration the investment environment, funding requirements, international or domestic competitive conditions while simultaneously meeting shareholders’ interests. When there is no cumulative loss, the parent company shall distribute dividends at no less than 50% of the net profit. The way to distribute dividends could be either through cash or shares, and cash dividends shall not be less than 50% of the total dividends.

Appropriation of earnings to legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

• 37 -

The appropriations of earnings for 2019 and 2018 which were approved in the shareholders’ meetings on June 18, 2020 and May 30, 2019, respectively, were as follows:

Legal reserve Cash dividends	Appropriation of Earnings For the Year Ended December 31 2019 2018 $ 94,744 $ 98,036 793,071 810,852	Dividends Per Share (NT$)
		For the Year Ended December 31
		2019 2018 $ 2 $ 2

The appropriations of earnings for 2020, which were proposed by the Company’s board of directors on March 10, 2021, were as follows:

	Appropriation	Dividends Per
	of Earnings	Share (NT$)
Legal reserve	$ 104,266
Cash dividends	872,378	$ 2.2

The appropriation of earnings for 2020 is subject to resolution in the shareholders’ meeting to be held on June 25, 2021.

• d. Treasury shares

				Shares Held by
				Subsidiary -
		Shares		Ming Yu
	Transferred to			Investment
	Employees			Corporation		Total
	(In	Thousands		(In Thousands	(In Thousands
	of		Shares)	of Shares)	of Shares)
Number of shares at January 1, 2020			2,891	4,000		6,891
Additions			-	-		-
Less			-	(1,501)		(1,501)
Number of shares at December 31, 2020			2,891	2,499		5,390
Carrying amount at December 31, 2020	$		49,938	$ 43,175	$	93,113
Number of shares at January 1, 2019			-	17,658		17,658
Additions			5,658	-		5,658
Less			(2,767)	(13,658)		(16,425)
Number of shares at December 31, 2019			2,891	4,000		6,891
Carrying amount at December 31, 2019	$		49,938	$ 69,107	$	119,045

1) For the year ended December 31, 2020, the Company’s shares were held by its subsidiary - Ming Yu Investment Corporation. Ming Yu Investment Corporation sold 1,501 thousand shares to third parties. For the year ended December 31, 2019, the Company’s shares were held by its subsidiary - Ming Yu Investment Corporation. Ming Yu Investment Corporation reduced its capital by returning 6,000 thousand shares to the Company and selling 5,658 thousand shares and 2,000 thousand shares, respectively, to the Company and third parties. The above mentioned shares totaled 13,658 thousand.

• 38 -

• 2) For the year ended December 31, 2019, the Company repurchased 5,658 thousand shares. The purpose of the repurchase was to transfer the shares to employees from the subsidiary - Ming Yu Investment Corporation, and the employees actually executed 2,767 thousand shares. For the year ended December 31, 2019, the treasury shares transferred to employees was $5,432 thousand and the capital surplus - treasury shares was $37,722 thousand which is recognized after the implementation and deduction of related transaction costs.

Under the Securities and Exchange Act, the Company shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as the rights to dividends and to vote. The subsidiaries holding treasury shares, however, are bestowed shareholders’ rights, except the rights to participate in any share issuance for cash and to vote.

23. REVENUE

Construction contract revenue Revenue from containers repair Revenue from the sale of goods	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2020 $ 7,117,905 145,990 - $ 7,263,895	2019 $ 5,945,266 141,072 23,065 $ 6,109,403

• a. Contact balances

Contract assets Properties construction Retention receivable Less: Allowance for impairment loss Contract assets - current		December 31	December 31
		2020 $ 3,036,146 1,192,876 (38,049) $ 4,190,973	2019 $ 1,705,821 1,078,211 (24,949) $ 2,759,083

The movements of the loss allowance of retention receivables were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance (reversed) Balance at December 31 Contract liabilities Properties construction	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 24,949 13,100 $ 38,049 **December **	2019 $ 48,807 (23,858) $ 24,949 **31 **
		2020 $ 323,755	2019 $ 297,508

• 39 -

b. Partially completed contracts

The transaction prices, excluding any estimated amounts of variable consideration that are constrained, allocated to the performance obligations that are not fully satisfied and the expected timing for recognition of revenue are as follows.

Property construction contracts In 2021 In 2022 From 2023 to after years Property construction contracts In 2020 In 2021 From 2022 to after years	December 31, 2020 $ 13,959,269 1,634,948 311,433 $ 15,905,650 $ 7,592,530 4,354,436 475,851 $ 12,422,817

24. NET PROFIT (LOSS) FROM CONTINUING OPERATIONS

• a. Other income

Dividends Rental income Others (Note 29)	For the Year Ended	For the Year Ended	December 31
		2020 $ 100,549 8,452 16,301 $ 125,302	2019 $ 167,427 13,435 31,420 $ 212,282

• b. Other gains and losses

Gain on disposal of long-term assets Net foreign exchange gains Impairment loss on investment properties Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,173 (89) (3,417) (5,696) $ (8,029)	2019 $ 1,267 87 (23,678) (1,496) $ (23,820)

• 40 -

c. Finance costs

Interest on bank loans Interest of commercial paper Interest on lease liabilities d. Depreciation and amortization Property, plant and equipment Investment property Right-of-use assets Intangible assets An analysis of deprecation by function Operating costs Operating expenses An analysis of amortization by function Operating costs Operating expenses e. Employee benefits expense Post-employment benefits Defined contribution plans Defined benefit plans (Note 20) Other employee benefits Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
	2020 $ 11,742 7,180 225 $ 19,147 **For the Year Ended **		2019 $ 3,626 2,435 341 $ 6,402 **December 31 **
	2020 $ 128,480 - 9,132 4,310 $ 141,922 $ 132,138 5,474 $ 137,612 $ 1,306 3,004 $ 4,310 **For the Year Ended **		2019 $ 98,749 2,231 11,891 6,379 $ 119,250 $ 96,177 16,694 $ 112,871 $ 3,004 3,375 $ 6,379 **December 31 **
		2020 $ 13,881 5,657 537,361 $ 556,899 $ 285,751 271,148 $ 556,899	2019 $ 12,963 6,042 481,574 $ 500,579 $ 227,146 273,433 $ 500,579

• 41 -

• f. Compensation of employees and remuneration of directors and supervisors

According to the Articles of Incorporation of the Company, the Company accrued compensation of employees and remuneration of directors and supervisors at rates of no less than 0.5% and no higher than 2%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors and supervisors. The compensation of employees and the remuneration of directors and supervisors for the years ended December 31, 2020 and 2019, which were approved by the Company’s board of directors on March 10, 2021 and March 16, 2020, respectively, are as follows:

Accrual rate

Compensation of employees Remuneration of directors and supervisors Amount Compensation of employees Remuneration of directors and supervisors	**For the Year Ended December 31 **	**For the Year Ended December 31 **
	2020 2019 0.50% 0.54% 0.44% 0.68% For the Year Ended December 31
	2020 Cash $ 5,745 5,000	2019
		Cash $ 5,407 6,819

If there is a change in the amounts after the annual independent financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate in the following year.

The Company held board of directors’ meetings on March 16, 2020 and March 14, 2019, and those meetings resulted in the actual amounts of the remuneration of directors and supervisors paid for 2019 and 2018 to differ from the amounts recognized in the financial statements for the years ended December 31, 2019 and 2018, respectively. The differences were adjusted to profit and loss in the following year.

Amounts approved in the board of directors’ meeting Amounts recognized in the annual financial statements	For the Year Ended December 31	For the Year Ended December 31
	2019 Compensation of Employees Remuneration of Directors and Supervisors $ 5,407 $ 6,819 $ 5,407 $ 7,000	2018
		Compensation of Employees Remuneration of Directors and Supervisors $ 5,659 $ 7,000 $ 5,659 $ 7,000

Information on the compensation of employees and remuneration of directors and supervisors resolved by the Company’s board of directors in 2020 and 2019 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

• 42 -

25. INCOME TAXES

• a. Income tax recognized in profit or loss

Major components of tax expense recognized in profit or loss are as follows:

Current tax In respect of the current year Income tax on additional tax of unappropriated earnings Adjustments for prior years Deferred tax In respect of the current year Income tax expense recognized in profit or loss	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2020 $ 87,586 2,507 - 90,093 2,602 $ 92,695	2019 $ 41,842 - 127 41,969 (3,920) $ 38,049

A reconciliation of accounting profit and income tax expense is as follows:

Profit before tax Income tax expense calculated at the statutory rate Nondeductible expenses in determining taxable income Tax-exempt income Income tax on additional tax of unappropriated earnings Unrecognized deductible temporary differences Adjustments for prior years’ tax Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,136,344 $ 227,269 695 (139,053) 2,507 1,277 - $ 92,695	2019 $ 985,486 $ 197,097 6,220 (153,120) - (12,275) 127 $ 38,049

In July 2019, the president of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. When calculating the tax on unappropriated earnings, the Company only deducts the amount of the unappropriated earnings that has been reinvested in capital expenditure.

• 43 -

b. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2020

Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income Deferred tax assets Temporary differences Defined benefit plans $ 4,102 $ (4,275) $ 214 Payable for annual leave 4,906 726 - Unrealized exchange loss - 24 - Provision for warranties 11,223 922 - $ 20,231 $ (2,603) $ 214 Deferred tax liabilities Temporary differences Reserve for land value increment tax $ 65,995 $ - $ - Unrealized exchange gain 1 (1) - $ 65,996 $ (1) $ - For the year ended December 31, 2019 Opening Balance Recognized in Profit or Loss Recognized in Other Compre- hensive Income Deferred tax assets Temporary differences Defined benefit plans $ 11,037 $ (7,598) $ 663 Payable for annual leave 4,610 296 - Provision for warranties - 11,223 - $ 15,647 $ 3,921 $ 663 Deferred tax liabilities Temporary differences Reserve for land value increment tax $ 65,995 $ - $ - Unrealized exchange gain - 1 - $ 65,995 $ 1 $ -

Closing Balance $ 41 5,632 24 12,145 $ 17,842 $ 65,995 - $ 65,995 Closing Balance $ 4,102 4,906 11,223 $ 20,231 $ 65,995 1 $ 65,996

Deferred tax assets Temporary differences Defined benefit plans Payable for annual leave Provision for warranties Deferred tax liabilities Temporary differences Reserve for land value increment tax Unrealized exchange gain

• 44 -

• c. Deductible temporary differences for which no deferred tax assets have been recognized in the balance sheets

Deductible temporary differences Bad debts in excess of the limit Impairment loss on financial assets Loss on market price decline Unrealized gain on the transactions with subsidiaries		**December 31 **	**December 31 **
		2020 $ 491,487 145,079 20,114 1,739 $ 658,419	2019 $ 486,040 145,079 17,119 3,797 $ 652,035

• d. Income tax assessments

The income tax of the Company through 2018, except 2019, have been assessed by the tax authorities.

26. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share are as follows:

Net profit for the year

Profit for the year Shares	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,043,649	2019 $ 947,437

Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Compensation of employees Weighted average number of ordinary shares outstanding in the computation of diluted earnings per share	Unit: In Thousand Shares For the Year Ended December 31	Unit: In Thousand Shares For the Year Ended December 31	Unit: In Thousand Shares For the Year Ended December 31
		2020 394,011 159 394,170	2019 388,400 202 388,602

The Company may settle the compensation paid to employees in cash or shares; therefore, the Company assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

• 45 -

27. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Company’s overall strategy remains unchanged.

The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity attributable to owners of the Company (comprising issued capital, reserves, retained earnings and other equity).

The Company is not subject to any externally imposed capital requirements.

28. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments not measured at fair value

Management believes that the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

• b. Fair value of financial instruments measured at fair value on a recurring basis

• 1) Fair value hierarchy

Fair value hierarchy as of December 31, 2020

Level 1 Financial assets at FVTOCI Investments in equity instruments Listed shares and emerging market shares $ 5,298,293 Unlisted shares - ROC - Unlisted shares in other country - $ 5,298,293 Fair value hierarchy as of December 31, 2019 Level 1 Financial assets at FVTOCI Investments in equity instruments Listed shares and emerging market shares $ 4,479,292 Unlisted shares - ROC - Unlisted shares in other country - $ 4,479,292	Level 2 $ - - - $ - Level 2 $ - - - $ -	Level 3 $ - 881,433 149,199 $ 1,030,632 Level 3 $ - 840,467 147,559 $ 988,026	Total $ 5,298,293 881,433 149,199 $ 6,328,925 Total $ 4,479,292 840,467 147,559 $ 5,467,318
Financial assets at FVTOCI Investments in equity instruments Listed shares and emerging market shares Unlisted shares - ROC Unlisted shares in other country

There were no transfers between Levels 1 and 2 in the current and prior periods.

• 46 -

• 2) Reconciliation of Level 3 fair value measurements of financial instruments: None

• 3) Valuation techniques and inputs applied for Level 2 fair value measurement: None

• 4) Valuation techniques and inputs applied for Level 3 fair value measurement: The fair values of unlisted equity securities - ROC were determined using market approach. The market approach is used to arrive at their par values for which the recent financing activities of investees, the market transaction prices of the similar companies and market conditions are considered.

• c. Categories of financial instruments

Financial assets Financial assets at amortized cost (1) Financial assets at FVTOCI Equity instruments Financial liabilities Financial liabilities measured at amortized cost (2)	**December 31 **
	2020 2019 $ 1,475,523 $ 525,901 6,328,925 5,467,318 4,659,473 1,999,602

• 1) The balances included financial assets at amortized cost, which comprise cash and cash equivalents, notes receivable, trade and other receivables, financial assets at amortized cost and refundable deposits.

• 2) The balances included financial liabilities measured at amortized cost, which comprise notes payable and trade payables, other payables, guarantee deposits received, short-term borrowings, short-term bills payable, current portion of long-term borrowings and long-term borrowings.

• d. Financial risk management objectives and policies

The Company’s major financial instruments include equity investments, trade receivable, trade payables, borrowings and lease liabilities. The Company’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

1) Market risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

There had been no change to the Company’s exposure to market risks or the manner in which these risks were managed and measured.

• a) Foreign currency risk

The Company had foreign currency sales and purchases, which exposed the Company to foreign currency risk. The foreign currency fluctuation affects the financial instruments market value due to the Company’s policy of hedges in pre-purchase of foreign forward exchanges.

• 47 -

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities at the end of the year are set out in Note 32.

Sensitivity analysis

The Company was mainly exposed to the Currency USD and Currency RMB.

The Company analyzes its sensitivity’s increase and decrease in New Taiwan dollars (the functional currency) against the relevant foreign currencies. A sensitivity rate of 5% is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the year for a 5% change in foreign currency rates.

b) Interest rate risk

The Company was exposed to interest rate risk because entities in the Company borrowed funds at both fixed and floating interest rates.

The carrying amount of the Company’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows.

Fair value interest rate risk Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2020 2019 $ 2,789,171 $ 599,869 571,875 71,492 300,000 150,000

Sensitivity analysis

The sensitivity analyses below were determined based on the Company’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 50 basis points higher/lower and all other variables were held constant, the Company’s pre-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $1,359 thousand and $(393) thousand, respectively, which was mainly attributable to the Company’s exposure to interest rates on its variable-rate bank borrowings, time deposits and demand deposits.

c) Other price risk

The Company was exposed to equity price risk through its investments in listed equity securities. The Company’s equity price risk was mainly concentrated on equity instruments operating in Taiwan industry sector quoted in the Taiwan Stock Exchange.

• 48 -

Sensitivity analysis

The sensitivity analysis below was determined based on the exposure to equity price risks at the end of the reporting period.

If equity prices had been 15% higher/lower, pre-tax profit for years ended December 31, 2020 and 2019 would have increased/decreased by $949,339 thousand and $820,098 thousand, respectively, as a result of the changes in fair value of financial assets as FVTOCI.

The Company’s sensitivity to equity prices increased due to the impact of equity price fluctuations.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. At the end of the reporting period, the Company’s maximum exposure to credit risk which may cause a financial loss to the Company due to failure of counterparties to discharge an obligation and financial guarantees provided by the Company could arise from the carrying amount of the respective recognized financial assets as stated in the balance sheets.

In order to minimize credit risk, management of the Company is responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowances are made for irrecoverable amounts. In this regard, management believes the Company’s credit risk was significantly reduced.

The Company’s concentration of credit risk of 45% and 42% of total trade receivables as of December 31, 2020 and 2019, respectively, was related to the Company’s five largest customers. The credit concentration risk of the remaining trade receivables is relatively insignificant.

3) Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Company’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Company relies on bank borrowings as a significant source of liquidity. As of December 31, 2020 and 2019, the Company had available unutilized bank loan facilities set out in (b) below.

a) Liquidity and interest rate risk tables for non-derivative financial liabilities

The following table details the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. The tables included both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

• 49 -

To the extent that interest flows are at floating rates, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

December 31, 2020

Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities Additional information about the maturity Less than 1 Year Lease liabilities $ 8,908 December 31, 2019 Non-derivative financial liabilities Non-interest bearing Lease liabilities Variable interest rate liabilities Fixed interest rate liabilities Additional information about the maturity Less than 1 Year Lease liabilities $ 9,309	Less than 1 Year 1-5 Years $ 1,357,256 $ 212,977 8,756 9,738 301,390 - 2,489,719 308,147 $ 4,157,121 $ 530,862 analysis for lease liabilities: 1-5 Years 5+ Years $ 9,835 $ - Less than 1 Year 1-5 Years $ 1,070,461 $ 179,249 9,307 16,075 147 150,000 600,432 - $ 1,680,347 $ 345,324 analysis for lease liabilities: 1-5 Years 5+ Years $ 16,491 $ -	5+ Years $ - - - - $ - Total $ 18,743 5+ Years $ - - - - $ - Total $ 25,800
		$

• 50 -

b) Financing facilities

Unsecured bank overdraft facility Amount used Amount unused Secured bank overdraft facility Amount used Amount unused		December 31	December 31
		2020 $ 2,510,000 3,985,000 $ 6,495,000 $ 580,000 800,000 $ 1,380,000	2019 $ 600,000 5,945,000 $ 6,545,000 $ 150,000 1,230,000 $ 1,380,000

29. TRANSACTIONS WITH RELATED PARTIES

The Company’s major shareholder was Evergreen International Corporation, which held both 22.81% of ordinary shares of the Company as of December 31, 2020 and 2019.

In addition to information disclosed elsewhere in the other notes, details of transactions between the Company and other related parties are disclosed below.

• a. Related parties and their relationships

Related Party Relationship with the Company

Evergreen International Corporation Investors that have significant influence over the Company Evergreen Security Corporation Related party in substance Ever Accord Construction Corporation Related party in substance EVA Airways Corporation Related party in substance Evergreen Logistics Corporation Related party in substance Evergreen Marine Corporation Related party in substance Hsin Yung Enterprise Corporation Subsidiary Ever Ecove Corporation Subsidiary Ming Yu Investment Corporation Subsidiary Super Max Engineering Enterprise Co., Subsidiary Ltd.

• b. Sales of goods

Line Item Related Party Sales of goods Investors that have significant influence over the Company Related party in substance	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2020 $ - 507,493 $ 507,493	2019 $ 131,864 145,190 $ 277,054

• 51 -

The sales condition for related party in substance were not significantly different from those sales made to the Company’s usual list prices. There was no comparable sales price between investors that have significant influence over the Company and related party in substance for repairing containers. Payments are collected within 60 days after issuing invoices.

• c. Miscellaneous income

Related Party Subsidiaries Purchases of goods and expenses Related Party Investors that have significant influence over the Company Substances Related party in substance	For the Year Ended	For the Year Ended	December 31
	2020 $ 3,008 For the Year Ended		2019 $ 3,038 December 31
		2020 $ 9,886 15 15,832 $ 25,733	2019 $ 10,125 36 14,964 $ 25,125

• d. Purchases of goods and expenses

The purchases to related parties had no significant differences with other non-related parties.

• e. Construction receivables (contract assets)

Related Party Related party in substance		**December 31 **	**December 31 **
		2020 $ 56,697	2019 $ 53,972

For the years ended December 31, 2020 and 2019, impairment loss of $2,652 thousand and $894 thousand, respectively, was recognized for contract assets from related parties.

• f. Contract liabilities

Related Party Related party in substance		December 31	December 31
		2020 $ -	2019 $ 10,676

• g. Receivables from related parties (excluding loans to related parties and contract assets)

Trade receivables

Related Party Investors that have significant influence over the Company Related party in substance		**December 31 **	**December 31 **
		2020 $ - 151,094 $ 151,094	2019 $ 23,223 677 $ 23,900

• 52 -

Other receivables

Related Party Subsidiaries

	December 31	December 31
	2020 $ 126	2019 $ 132

The outstanding trade receivables from related parties are unsecured.

• h. Payables to related parties

Other payables

Related Party Investors that have significant influence over the Company Related party in substance Subsidiaries		**December 31 **	**December 31 **
		2020 $ 1,733 1,257 15 $ 3,005	2019 $ 1,706 1,439 3 $ 3,148

The outstanding trade payables from related parties are unsecured.

i. Lease arrangements

Line Item Related Party/Name Acquisition of right-of-use assets Investors that have significant influence over the Company - Evergreen International Corporation Lease liabilities Investors that have significant influence over the Company - Evergreen International Corporation		December 31	December 31
		2020 $ 1,004 $ 1,015	2019 $ 2,007 $ 2,018

The Company rents other equipment from Evergreen International Corporation for $85 thousand per months and the lease term is from January 2019 to December 2021.

The Company rents office spaces from Evergreen International Corporation for $386 thousand per month and the lease term is from January 2019 to December 2021. The Company terminated the agreement in advance on December 31, 2019.

• j. Disposal of financial assets

Financial assets at fair through other comprehensive income

For the year ended December 31, 2020: None.

• 53 -

For the year ended December 31, 2019:

Related Party/Name Number of Shares (In Thousand Shares) Underlying Assets Related party in substance - EVA Airways Corporation 4,650 Shareholdings of UNI Airways Corporation Related party in substance - Evergreen Logistics Corporation 200 Shareholdings of UNI Airways Corporation	Proceeds $ 67,686 2,911 $ 70,597

k. Compensation of key management personnel

Short-term employee benefits Post-employment benefits	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2020 $ 21,548 1,704 $ 23,252	2019 $ 21,958 6,526 $ 28,484

30. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings, letters of credit issuance, projects performance and performance guarantees, etc.:

Property, plant, and equipment, net Financial assets at amortized cost		**December 31 **	**December 31 **
		2020 $ 1,995,432 3,600 $ 1,999,032	2019 $ 1,960,283 3,600 $ 1,963,883

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Company as of December 31, 2020 and 2019 were as follows:

a. As of December 31, 2020 and 2019, unused letters of credit for purchasing of materials are as follows:

Currency USD NTD	December 31
	2020 2019 $ 984 $ 1,271 472,963 771,868

• 54 -

• b. As of December 31, 2020, except for the refundable deposits, the guarantee bonds for constructions secured by bank are as follows:

Currency USD NTD	December 31
	2020 2019 $ 1,191 $ - 338,599 657,786

32. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Company’ significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between the foreign currencies and the respective functional currencies were as follows:

December 31, 2020

Unit: In Thousands of Foreign Currencies/New Taiwan Dollars

	Foreign	Foreign		Carrying
	Currencies		Exchange Rate	Amount
Financial assets
Non-monetary items
Investments accounted for using the equity
method
RMB	$	2,939	4.377 (RMB:NTD)	$ 12,866
Financial liabilities
Monetary items
RMB		1,094	4.377 (RMB:NTD)	4,789
December 31, 2019
	Unit: In Thousands of Foreign Currencies/New			Taiwan Dollars
	Foreign			Carrying
	Currencies		Exchange Rate	Amount
Financial assets
Non-monetary items
Investments accounted for using the equity
method
RMB	$	3,356	4.305 (RMB:NTD)	$ 14,448
Financial liabilities
Monetary items
RMB		422	4.305 (RMB:NTD)	1,818

• 55 -

33. SEPARATELY DISCLOSED ITEMS

• a. Information on significant transactions and information on investees:

• 1) Financing provided: None.

• 2) Endorsements/guarantees provided: See Table 1 below.

• 3) Marketable securities held (excluding investment in subsidiaries, associates and jointly controlled entities): See Table 2 below.

• 4) Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: None.

• 5) Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: None.

• 6) Disposal of individual real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: None.

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: See Table 3 below.

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: See Table 4 below.

• 9) Trading in derivative instruments: None.

• 10) Information on investees: See Table 5 below.

• b. Information on investments in mainland China:

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. See Table 6 below.

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: None.

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

  • c) The amount of property transactions and the amount of the resultant gains or losses.

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purpose.

• 56 -

• e) The highest balance, the ending balance, the interest rate range, and total current period interest with respect to financing of funds.

• f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receipt of services.

• c. Information on major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder: See Table 7 attached.

34. OTHERS

Since January 2020, due to the spread of COVID-19, governments of countries have successively implemented various epidemic prevention plans. However, the domestic epidemic has slowed down and government policies have been loosened. Therefore, the Group’s assessment has little impact on the overall operations, but the international epidemic is still uncertain. The Group will continue to pay attention to the development of the epidemic and take relevant countermeasures to alleviate the impact on the Group’s operations.

• 57 -

TABLE 1

EVERGREEN STEEL CORPORATION

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. (Note 1)	Endorser/Guarantor	Endorsee/Guarantee	Endorsee/Guarantee	Limit on Endorsement/ Guaranteed Amount Provided To Each Guarantee Party	Maximum Amount Endorsed/ Guaranteed During the Period	Ending Balance	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collateral	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China	Note
		Name	Relationship
0	Evergreen Steel Corporation	Ever Ecove Corporation	Subsidiary	$ 7,000,908	$ 3,087,000	$ 3,087,000	$ 3,087,000	$ -	22.05	$ 7,000,908	Y	-	-	Note 3
1	Ming Yu Investment Corporation	Evergreen Steel Corporation	Directly and indirectly holds more than 50 percent of the voting shares	8,082,160	3,499,556	1,201,220	1,201,220	-	297.25	8,082,160	-	Y	-	Note 2

• Note 1: The Company and its subsidiaries are numbered as follows:

• a. “0” for the Company.

• b. Subsidiaries are numbered from “1”.

• Note 2: According to endorsement or guarantee provided regulation formulated by subsidiaries, the total amount of endorsement or guarantee that the Company is allowed to provide is up to 2,000% of the net worth value of the latest financial statements of the Company.

• Note 3: The limit on endorsements or guarantees provided to each guaranteed party is up to 50% of the net worth value of the latest financial statements of the Company. However, the amount of the Company’s endorsements or guarantees for subsidiaries holding more than 50% of the shares is not limited by the above ratio, but the maximum shall not exceed 50% of the net value of the most recent financial statements of the Company.

• Note 4: The limit on endorsements or guarantees provided to each guaranteed party is up to 50% of the net worth value of the latest financial statements of the Company. However, the amount of endorsements or guarantees for subsidiaries is not limited by the above ratio, but the maximum shall not exceed 200% of the net value of the most recent financial statements of the Company.

• 58 -

TABLE 2

EVERGREEN STEEL CORPORATION

MARKETABLE SECURITIES HELD DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
Evergreen Steel Corporation	Ordinary shares EVA Airways Corporation Shin Kong Financial Holding Co., Ltd. Evergreen Marine Corporation Taiwan High Speed Rail Corporation Taiwan Terminal Services Corporation. Taiwan Aerospace Corp. Pacific Resources Corporation. Taiwan Incubator SME Development Co EVERGREEN HEAVY INDUSTRIAL Dongwei Transportation Co., Ltd. Ever Accord Construction Corporation UNI Airways Corporation Evergreen Security Corp	Investee of the Company’s mainly shareholders - Investee of the Company’s mainly shareholders - Investee of the Company’s mainly shareholders - - - - - Investee of the Company’s mainly shareholders Investee of the Company’s mainly shareholders Investee of the Company’s mainly shareholders	Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current	240,604 7,934 38,262 16,000 100 5,503 2,625 7,689 6,679 660 7,500 56,475 10	$ 3,163,939 69,903 1,557,251 507,200 818 61,534 - 62,142 149,199 6,641 49,066 701,091 141	4.96 0.06 0.79 0.28 1.00 4.06 2.56 10.90 13.39 18.86 12.50 14.99 0.05	$ 3,163,939 69,903 1,557,251 507,200 818 61,534 - 62,142 149,199 6,641 49,066 701,091 141	Note

Note: The carrying amount of financial instruments were assessed for impairment.

• 59 -

TABLE 3

EVERGREEN STEEL CORPORATION

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Purchaser/Seller	Related Party	Relationship		Transaction Details	Transaction Details		Differences in Transaction Terms Compared to Third Party Transactions	Differences in Transaction Terms Compared to Third Party Transactions	Notes/Accounts (Payable) or Receivable	Notes/Accounts (Payable) or Receivable	Note
			Purchase/ Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
Evergreen Steel Corporation	Evergreen Marine Corporation Ever Accord Construction Corporation	Related party in substance Related party in substance	Sale Sale	$ 137,404 370,089	1.89 5.09	15-45 days 30-60 days	Note 1 No significant difference	15-45 days 30-60 days	$ 26,488 183,955	1.10 7.61	Note 1 Note 2

Note 1: No similar prices on revenue from containers repair to compare with related party in substance.

Note 2: The trade receivables include contract assets.

• 60 -

TABLE 4

EVERGREEN STEEL CORPORATION

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate		Overdue	Amount Received in Subsequent Period	Allowance for Impairment Loss
					Amount	Action Taken
Evergreen Steel Corporation	Ever Accord Construction Corporation	Related party in substance	$ 183,955	5.91	$ -	-	$ 124,606	$ 2,652

• 61 -

TABLE 5

EVERGREEN STEEL CORPORATION

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES ACCOUNTED FOR FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balance as of December 31, 2020	Balance as of December 31, 2020	Balance as of December 31, 2020	Net Income (Losses) of the Investee	Share of Profits/ Losses of Investee	Note
				December 31, 2020	December 31, 2019	Shares (In Thousands)	Percentage of Ownership (%)	Carrying Amount
Evergreen Steel Corporation Super Max Engineering Enterprise Co., Ltd.	Super Max Engineering Enterprise Co., Ltd. Hsin Yung Enterprise Corporation Ming Yu Investment Co., Ltd. Ever Ecove Corporation Kun Lin Engineering Co., Ltd.	Taiwan Taiwan Taiwan Taiwan Taiwan	Waste collection, treatment and disposal Waste treatment, disposal and cogeneration Investment activities Waste treatment, disposal and cogeneration Planning of wastewater, air and noise prevention; design, construction, sale, operation and maintenance of related equipment	$ 594,440 992,666 239,487 801,000 18,000	$ 594,436 992,666 239,487 700,000 18,000	16,098 99,267 10,350 80,100 5,000	48.13 68.46 100.00 50.06 50.00	$ 825,841 1,753,091 289,005 780,765 150,800	$ 289,654 677,622 5,746 (12,698) 50,198	$ 139,410 463,898 748 (9,341) N/A	Subsidiary (Note 2) Subsidiary Subsidiary Subsidiary (Note 3) Accounted for using the equity method

Note 1: Refer to Table 6 for information on investments in mainland China.

Note 2: The original investment amount was $594,436 thousand, and the Company’s reinvestment amount is $4 thousand in the current year; therefore, the original investment amount at the end of the year is $594,440 thousand.

Note 3: The original investment amount was $700,000 thousand, and the Company’s reinvestment amount is $101,000 thousand in the current year; therefore, the original investment amount at the end of the year is $801,000 thousand.

• 62 -

TABLE 6

EVERGREEN STEEL CORPORATION

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Main Businesses and Products	Total Amount of Paid-in Capital	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2020	Investment of Flows	Investment of Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2020	Net Income (Losses) of the Investee Company	Percentage of Ownership	Share of Profits (Losses)	Carrying Amount as of December 31, 2020	Accumulated Inward Remittance of Earnings as of December 31, 2020	Note
							Outflow	Inflow
Kun Shan	Design, manufacture and installation of waste water, waste gas equipment and various piping		$ 11,392 (US$ 400 )		Note 1	$ 11,392 (US$ 400 )	$ -	$ -	$ 11,392 (US$ 400 )	$ 4,007 (RMB 936 )	24.07	$ 964	$ 12,866	$ 36,483 (US$ 1,281 )	Note 4
Accumulated Investments in Mainland China as of December 31, 2020		Investment Amount Authorized by the Investment Commission, MOEA				Upper Limit on Investment
$ 11,392 (US$ 400 )		$ 11,392 (US$ 400 ) (Note 3)				$ 8,437,572 (Note 4)

Note 1: Indirect investment in mainland China through holding companies.

Note 2: The amount was recognized based on the audited financial statements.

Note 3: Investments approved by the Ministry of Economic Affairs, ROC are as follows:

Name of Investee Date Order No. Kun Shan 2007.6.15 09600201610 Kun Shan 2008.1.25 09700027430 Kun Shan 2008.7.22 09700252240	Approved Amounts US$ 200 US$ 100 US$ 100
	US$ 400

Note 4:

The company’s upper limit on investments to China (calculated based on the higher of 60% of Evergreen Steel Corporation’s net worth or net worth of $80 million, plus accumulated inward remittance of share capital or earnings from subsidiaries in mainland China: $14,001,815 (net worth) × 60% + $36,483 ＝ $8,437,572.

• 63 -

TABLE 7

EVERGREEN STEEL CORPORATION

INFORMATION ON MAJOR SHAREHOLDERS DECEMBER 31, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Evergreen International Corporation EVA Airways Corporation Continental Engineering Corp. Chang, Kuo-Hua Chang, Kuo-Ming Chang, Kuo-Cheng Chang Yung-Fa Foundation	91,101,257 38,201,625 25,645,907 25,008,820 25,008,820 25,008,820 25,008,820	22.81 9.56 6.42 6.26 6.26 6.26 6.26

• 64 -

EVERGREEN STEEL CORPORATION

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item Major Accounting Items in Assets, Liabilities and Equity Statement of cash and cash equivalents Statement of trade receivables Statement of inventories Statement of FVTOCI - non-current Statement of changes in investments accounted for using equity method Statement of changes in property, plant and equipment Statement of changes in accumulated depreciation of property, plant and equipment Statement of changes in investment properties Statement of changes in accumulated depreciation of investment properties Statement of deferred income tax assets Statement of trade payable Statement of other payable Statement of deferred income tax liabilities Major Accounting Items in Profit or Loss Statement of net revenue Statement of operating cost Statement of selling and marketing expenses Statement of general and administrative expenses Statement of labor, depreciation and amortization by function

**Statement Index **

1 2 3 4 5 Note 12 Note 12 Note 14 Note 14 Note 25 6 Note 18 Note 25 7 8 9 9 10

• 65 -

STATEMENT 1

EVERGREEN STEEL CORPORATION

STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Item Remark Cash on hand Cash in banks Checking accounts and demand deposits Note Time deposits	Amount $ 2,815 95,098 566,000 $ 663,913

Note: Includes US$7 thousand at $28.48.

• 66 -

STATEMENT 2

EVERGREEN STEEL CORPORATION

STATEMENT OF TRADE RECEIVABLE DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Client Name Client A Client B Client C Client D Client E Client F Client G Others (Note 1) Less: Allowance for doubtful accounts	Amount $ 329,103 223,346 214,817 183,955 161,068 144,498 129,567 903,992 2,290,346 (38,226) $ 2,252,120

Note 1: The amount of individual client included in others does not exceed 5% of the account balance.

Note 2: The amount including contract assets.

• 67 -

STATEMENT 3

EVERGREEN STEEL CORPORATION

STATEMENT OF INVENTORIES DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item Raw materials Supplies Inventory in transit		Amount
		Cost Net Realizable Value $ 991,880 $ 979,728 9,057 1,096 7,203 7,203 $ 1,008,140 $ 988,027

• 68 -

STATEMENT 4

EVERGREEN STEEL CORPORATION

STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Investees EVA Airways Corporation Shin Kong Financial Holding Co., Ltd. Evergreen Marine Corporation Taiwan High Speed Rail Corporation Taiwan Terminal Services Corporation. Taiwan Aerospace Corp. Pacific Resources Corporation. Taiwan Incubator SME Development Co. Evergreen Heavy Industrial Corp. Dongwei Transportation Co., Ltd. Ever Accord Construction Corporation UNI Airways Corporation Evergreen Security Corp.	Balance at January 1, 2020 Number of Shares (In Thousands) Amount 240,604 $ 3,308,302 7,937 82,145 38,262 474,445 16,000 614,400 100 793 5,503 64,669 2,625 - 7,689 61,439 6,679 147,559 660 6,558 7,500 63,077 54,830 643,787 10 144 $ 5,467,318	Additions in Investment (Note 1) Number of Shares (In Thousands) Amount - $ - 197 1,543 - 1,082,806 - - - 25 - - - - - 703 - 1,640 - 83 - - 1,645 57,304 - - $ 1,144,104	Decrease in Investment (Note 2) Number of Shares (In Thousands) Amount - $ (144,363) (200) (13,785) - - - (107,200) - - - (3,135) - - - - - - - - - (14,011) - - - (3) $ (282,497)	Balance at December 31, 2020 Number of Shares (In Thousands) Amount Collateral 240,604 $ 3,163,939 N/A 7,934 69,903 N/A 38,262 1,557,251 N/A 16,000 507,200 N/A 100 818 N/A 5,503 61,534 N/A 2,625 - N/A 7,689 62,142 N/A 6,679 149,199 N/A 660 6,641 N/A 7,500 49,066 N/A 56,475 701,091 N/A 10 141 N/A $ 6,328,925
	Number of Shares (In Thousands) 240,604 7,937 38,262 16,000 100 5,503 2,625 7,689 6,679 660 7,500 54,830 10	Number of Shares (In Thousands) - 197 - - - - - - - - - 1,645 -	Number of Shares (In Thousands) - (200) - - - - - - - - - - -	Number of Shares (In Thousands) 240,604 7,934 38,262 16,000 100 5,503 2,625 7,689 6,679 660 7,500 56,475 10

Note 1: The increase in investment based on issued share dividends was 1,645 thousand; purchase of financial assets at FVTOCI was 197 thousand shares which amounted to $1,543 thousand; and unrealized (loss) gain on financial assets at FVTOCI was $1,142,561 thousand.

Note 2: The decrease in investment from disposal of financial assets at FVTOCI was 200 thousand shares which amounted to $2,180 thousand; and unrealized (loss) gain on financial assets at FVTOCI was $280,317 thousand.

• 69 -

STATEMENT 5

EVERGREEN STEEL CORPORATION

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investees Super Max Engineering Enterprise Co., Ltd. (Note 1) Hsin Yung Enterprise Corporation (Note 2) Ming Yu Investment Co., Ltd. (Note 3) Ever Ecove Corporation (Note 4)	Balance at January 1, 2020 Shares (In Thousands) Amount 10,732 $ 728,987 99,267 1,643,400 10,350 237,704 70,000 680,599 $ 3,290,690	Additions in Investment Shares (In Thousands) Amount 5,366 $ 371 - 142,126 - 57,533 10,100 109,510 $ 309,540	Increase Decrease in Investment (Decrease) in Shares Using the (In Thousands) Amount Equity Method - $ (42,927) $ 139,410 - (496,333) 463,898 - (6,980) 748 - (3) (9,341) $ (546,243) $ 594,715	Balance at December 31, 2020 Market Value Shares or Net Assets (In Thousands) % Amount Value Collateral 16,098 48.13 $ 825,841 $ 825,841 N/A 99,267 68.46 1,753,091 2,445,707 N/A 10,350 100.00 289,005 332,180 N/A 80,100 50.06 780,765 780,765 N/A - $ 3,648,702 $ 4,384,493
	Shares (In Thousands) 10,732 99,267 10,350 70,000	Shares (In Thousands) 5,366 - - 10,100	Shares (In Thousands) - - - -	Shares (In Thousands) % 16,098 48.13 99,267 68.46 10,350 100.00 80,100 50.06 -

• Note 1: The increase in investment based on the proportion of net defined benefits was $93 thousand; the difference of effects of foreign currency exchange was $274 thousand; and investment based on shares of subsidiary capital increase was $4 thousand. The decrease in investment was based on issued cash dividends.

• Note 2: The increase in the transactions with subsidiaries that was realized was $2,058 thousand; investment based on the proportion of unrealized (losses) gains on financial assets at FVTOCI was $139,761 thousand; and investment based on the proportion of net defined benefits was $307 thousand. The decrease in investment based on issued cash dividends was $496,333 thousand.

• Note 3: The increase in invested company due to the sale of treasury shares was $52,535 thousand (reversal accounted for using equity method); and cash dividends from the parent company was $4,998 thousand. The decrease in investment was based on the proportion of unrealized (loss) gain on financial assets at FVTOCI.

• Note 4: The increase in investment based on shares of subsidiary capital increase was $101,000 thousand; and investment based on the not proportion of shares of subsidiary capital increase was $8,510 thousand. The decrease in investment based on the proportion of net defined benefit was $3 thousand.

• 70 -

STATEMENT 6

EVERGREEN STEEL CORPORATION

STATEMENT OF TRADE PAYABLES DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Client Name Client A Client B Others	Amount Note $ 221,019 60,028 851,136 Note $ 1,132,183

Note: The amount of individual client included in others does not exceed 5% of the account balance.

• 71 -

STATEMENT 7

EVERGREEN STEEL CORPORATION

STATEMENT OF NET REVENUE FOR THE YEARS ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item Tonnage Construction contract revenue 142,425 Revenue from containers repairment - Less: Sales return	Amount $ 7,117,905 149,452 (3,462) $ 7,263,895

• 72 -

STATEMENT 8

EVERGREEN STEEL CORPORATION

STATEMENT OF OPERATING COST FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item Inventory balance at the beginning of the year Add: Purchases, net Less: Inventory balance at the end of the year Others Materials consumed Direct labor Manufacturing expenses Manufacturing cost Other cost of goods sold Add: Sales of material Loss on disposal of inventories Less: Inventory reversals Sales scraps Cost of goods sold for manufacturing sector Contraction balance at the beginning of the year Add: Material consumed Others Less: Construction balance at the end of the year Others Construction loss transferred to cost of goods Other cost of goods sold Add: Sales of material Loss on disposal of inventories Less: Sales scraps Cost of goods sold for construction sector

Amount $ 6,010 13,827 (3,404) (4,816) 11,617 47,450 58,495 117,562 135 1,816 (956) (347) 118,210 3,089,251 3,544,406 3,052,289 (3,208,295) (91,683) (7,347) 535 4,762 (41,445) 6,342,473 $ 6,460,683

• 73 -

STATEMENT 9

EVERGREEN STEEL CORPORATION

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Item Selling and Marketing Expenses General and Administrative Expenses Payroll and related expenses $ 164,420 $ 65,229 Insurance expenses 22,662 4,694 Professional fees 503 8,760 Others (not exceeding 5%) 43,083 41,596 $ 230,668 $ 120,279	Total $ 229,649 27,356 9,263 84,679 $ 350,947

• 74 -

STATEMENT 10

EVERGREEN STEEL CORPORATION

STATEMENT OF LABOR, DEPRECIATION AND AMORTIZATION BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Labor cost Salary Labor and health insurance Pension Board compensation Others Depreciation Amortization	2020	Total $ 455,281 37,521 19,538 12,967 31,592 $ 556,899 $ 137,612 $ 4,310	2019
	Classified as Cost of Goods Sold Classified as Operating Expenses $ 233,599 $ 221,682 21,096 16,425 9,684 9,854 - 12,967 21,372 10,220 $ 285,751 $ 271,148 $ 132,138 $ 5,474 $ 1,306 $ 3,004		Classified as Cost of Goods Sold Classified as Operating Expenses $ 189,994 $ 223,791 16,263 17,943 8,334 10,671 - 10,673 12,555 10,355 $ 227,146 $ 273,433 $ 96,177 $ 16,694 $ 3,004 $ 3,375	Total $ 413,785 34,206 19,005 10,673 22,910 $ 500,579 $ 112,871 $ 6,379

Note:

1. As of December 31, 2020 and 2019, the Company had 570 and 532 employees, respectively. Among them 7 directors did not serve concurrently as employees for both years.

2. a. For the years ended December 31, 2020 and 2019, the average labor cost was $966 thousand and $933 thousand, respectively.

3. b. For the years ended December 31, 2020 and 2019, the average salary was $809 thousand and $788 thousand, respectively.

4. c.

5. The change in average salary was 2.7%.

6. d. The Company had set an independent director, so it did not have supervisors for the years ended December 31, 2020 and 2019.

7. e. The Company’s Articles of Incorporation stipulate that the distribution of compensation of employees and remuneration of directors and supervisors shall be at rates of no less than 0.5% and no higher than 2%, respectively, of net profit before income tax, compensation of employees and remuneration of directors and supervisors.

8. 75 -