FRG — Annual Report 2020

Aug 11, 2021

Stock Code: 2107

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Formosan Rubber Group Inc. 2020 Annual Report

The information declaration website designated by the FSC: MOPShttp://mops.twse.com.tw/ Website of the company’s annual report: http://www.frg.com.tw/

Printed on May 20, 2021

This English version is only a translation of the Chinese version. If there is any inconsistency or discrepancy between the Chinese and English versions, the Chinese version shall prevail for intents and purposes.

I. Spokesperson or deputy spokesperson information:

Spokesperson

Name: Lin Shi-Zhe

Title: Manager, Management Department; Chief financial officer Telephone: (02)2370-0988

Email: jameslim@frgco.com.tw Deputy spokesperson Name:Zheng Sheng-Yuan Title: Manager, Construction Department Telephone: (02)2370-0988 Email: shengyuan126@gmail.com

II. Addresses and Telephones of the Head office, Branches and Plants:

Head Office Address: 8F., No. 82, Sec. 1, Hankou St., Taipei City Telephone: (02)23700988 FAX: (02)23123313 Taoyuan Plant Address: No.1, Chaofeng Road, SanheVil, Longtan District, Taoyuan Telephone: (03)4893456

FAX: (03)4893476

Nankan International Logistics Center:

Address: 2F, No.53, Hou-sheng Rd, Lu-chu Dist., Taoyuan City Telephone: (03)3216533

FAX: (03)3216433

III. Share administration agency:

Taishin International Bank

Address: B1, No. 96, Sec. 1, Jianguo N. Rd., Taipei City

Website: www.tsc.com.tw

Telephone: (02)25048125 Query code: (02)25169990, Company Code: 061

IV. CPAs for the most recent Independent External Auditor's Report:

Name of the CPAs: Zhou Yin-Lai, Wu Xin-Liang Name of the Accounting Firm: Baker Tilly Clock & Co Clock & Co. Email: clockcpa@ms35.hinet.net

Address: (Top floor) 14F., No. 111, Sec. 2, Nanjing E. Rd., Taipei City Telephone: (02)25165255

V. Name of any exchanges where the Company’s securities are traded offshore, and the method by which to access information on said offshore securities: None

• VI. Company’s website: http://www.frg.com.tw/

Table of Contents

I. Letter to Shareholders ................................................................................................................................................................................ 1 II. Company Profile ...................................................................................................................................................................................... 11 I. Company Profile .............................................................................................................................................................................. 12 III. CORPORATE GOVERNANCE REPORT ......................................................................................................................................... 15 I. Organizational System ..................................................................................................................................................................... 16 II. Background information of directors, president, Vice Presidents, assistant managerial officers, and the chief of various departments and branches ........................................................................................................................................................... 18 III. Remuneration of Directors (Including Independent Directors), Supervisors, Presidents and Vice Presidents ............................... 23 IV. Implementation of Corporate Governance .................................................................................................................................... 28 (I) Functionality of the Board of Directors .............................................................................................................................. 28 (II) Evaluation of the Board of Directors ................................................................................................................................. 30 (III) Operation and key tasks of the Audit Committee ............................................................................................................. 31 (IV) Corporate governance execution status and deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies" ............................................................................................................................... 33 (V) Independence evaluation of CPAs .................................................................................................................................... 38 (VI) The Composition, Duties and Operation of the Remuneration Committee ...................................................................... 38 (VII) The state of the company's performance of social responsibilities, any deviation and causes of deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEX Listed Companies: ..................................... 43 (VIII) The state of the company's performance in the area of ethical corporate management, any variance from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such variance: ...................................................................................................................................................... 47 (IX) If the Company established the corporate governance guidelines and related articles, please disclose the inquiry method ........................................................................................................................................................................ 51 (X) Other important information that is sufficient to enhance the understanding of the operation of corporate governance ...................................................................................................................................................................... 51 (XI) Items shall be disclosed in the implementation status of the internal control system ....................................................... 56 (XII) List of discipline, significant deficit and improvement status of violation of internal control system in most recent year and as of the publication date of the annual report ........................................................................................ 57 (XIII) Major resolutions at shareholders meetings and Board of Directors meetings in most recent year and as of the publication date of the annual report ....................................................................................................................................... 57 (XIV) Any other documented objections or qualified opinions raised by directors against board resolutions in relation to matters, and their content in most recent year and as of the publication date of the annual report .............. 61 (XV) Resignation or discharge of chairperson, president and managerial staff of accounting, finance, internal audit, chief corporate governance officer and research and development in most recent year and as of the printed date of the annual report .............................................................................................................................................. 62 (XVI) Risk Management Policy and Organizational Structure of Formosan Rubber Group Inc. ............................................ 62 V. Information Regarding the Company’s Audit Fees ........................................................................................................................ 63 VI. Change of CPA ............................................................................................................................................................................. 63

VII. Any of the Company’s chairperson, president, or managerial officer in charge of finance or accounting held a position in

the CPA’s firm or its affiliates in the most recent year ............................................................................................................... 64 VIII. Changes in shareholding and shares pledged by directors, managerial officers and shareholders with 10% shareholdings or more in most recent year and as of the publication date of the annual report .......................................................................... 65 IX. Top 10 shareholders who are related parties, spouses, or within second-degree of kinship to each other ..................................... 66 X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee ................................................................................. 67 IV. Funding Status ....................................................................................................................................................................................... 69 I. Capital and Shares: .......................................................................................................................................................................... 70 II. Corporate Bonds ............................................................................................................................................................................. 77 III. Preferred Stocks: ........................................................................................................................................................................... 77 IV. Global Depository Receipts .......................................................................................................................................................... 77 V. Employee Stock Options ................................................................................................................................................................ 77 VI. New Restricted Employee Shares ................................................................................................................................................. 77 VII. New Shares Issued for Merger or Acquisition (including mergers, acquisitions, and demergers) ............................................... 77 VIII. Progress on Planned Use of Capital ............................................................................................................................................ 77 V. Operational Highlights ............................................................................................................................................................................ 78 I. Business Activities........................................................................................................................................................................... 79 (I) Scope of Business ............................................................................................................................................................... 79 (II) Industry Overview ............................................................................................................................................................. 80 (III) Technology and R&D Status and the Progress of Future Plans and Estimated Investment Expenses ............................... 83 (IV) Long-Term and Short-Term Business Development Plans ............................................................................................... 84 II. Market and Production and Sales Overview ................................................................................................................................... 85 (I) Market Analysis .................................................................................................................................................................. 85 (II) Important Uses and Production Process of Major Products................................................................................................ 91 (III) Supply Situation for Major Raw Materials ....................................................................................................................... 92 (IV) The Major Customers that Accounted for more than 10% of the Total Procurement (sales) of Goods in any of the Past Two Years and the Amount and Proportion of the Goods Sold ........................................................................................ 93 (V) Production Volume and Value in the Last 2 Years ............................................................................................................ 94 (VI) Sales Volume in the Last Two Years ................................................................................................................................ 94 III. The Number of Employees Employed for the 2 Most Recent Years, and during the Current Year as of the Date of Publication of the Annual Report ................................................................................................................................................ 94 IV. Expenditure for Environmental Protection .................................................................................................................................... 95 V. Labor Relations and Employee Rights ........................................................................................................................................... 95 (I) Various aspects of employee welfare measures, continuing education, job training, retirement system and its implementation......................................................................................................................................................................... 95 (II) Labor Disputes ................................................................................................................................................................... 96 (III) Education and Training System for Employees and its Implementation ........................................................................... 97 (IV) Code of Conduct or Ethics for Employees ...................................................................................................................... 100 (V) Workplace and employees’ safety protection measures: .................................................................................................. 100 VI. Important Contracts .................................................................................................................................................................... 102 VI. An Overview of the Company's Financial Status ............................................................................................................................... 103 I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years ........................................................ 104

II. Finance analysis for the past 5 fiscal years ................................................................................................................................... 108 III. Audit committee review report of the most recent annual financial report .................................................................................. 111 IV. Financial report for the most recent fiscal year, .......................................................................................................................... 112 V. A parent company only financial statement for the most recent fiscal year, certified by a CPA ................................................... 195 VI. If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation .................................................................................................................................... 294 VII. A Review and Analysis of the Company's Financial Status and Financial Performance, and a Listing of Risks ........................ 295 I. Financial Status .............................................................................................................................................................................. 296 II. Financial Performance .................................................................................................................................................................. 297 III. Cash Flow ................................................................................................................................................................................... 297 IV. Financial Impact of Major Capital Expenditures During the Most Recent Fiscal Year ............................................................... 298 V. Investment policy for the most recent fiscal year, the main reasons for the profits or losses, improvement plans, and investment plans for the coming year ....................................................................................................................................... 298 VI. Risk Analysis .............................................................................................................................................................................. 299 VII. Other Important Matters ............................................................................................................................................................ 302 VIII. Special Disclosures ............................................................................................................................................................................ 303 I. Information relating to the Company's affiliates ............................................................................................................................ 304 II. Transaction about the company’s private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of the publication of the annual report ............................................................................................... 305 III. Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ........................................................................ 305 IV. If any of the situations listed in Article 36, paragraph 3 subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ............................................................ 305 V. Other matters that require additional explanation ......................................................................................................................... 305

I. Letter to Shareholders

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Letter to Shareholders

Dear Shareholders,

In 2020, the COVID-19 pandemic spread across the world. Countries around the world have adopted lockdowns or border controls, which not only crushed the economic growth each country, but also impacted global trade. The world is still in the worst economic recession. However, upon the completion, the “La Bella Vita” project in Taichung has been delivered and the incomes have been accounted; and other projects, including “55times” have been selling continuously. Therefore the operating revenue, operating margin, and profit or loss before of 2020 are able to outperformed for our shareholders.

Looking forward to 2021, the significant process of the COVID-19 vaccines have fuel the expectation of the global economic recovery. As the Company continuously sells the construction projects, we take cautiously steady view to the business outlook for 2021.

Meanwhile, the Company will continue to enforce expanding business scopes as follows: 1. Rubber manufacturing: through the investment and upgrade of equipment to improve the functions of products, while continuously developing new products and innovating the new market applications; 2. Warehousing: proactively developing the policy of “business expansion and professional services” by constantly seeking new customers in order to bring different types of businesses into the Park, increasing operating performance; 3. Construction and development: flexibly operating various strategies to sell the completed construction project steadily, and suitable individual projects and land with potential profits will be sought out for development actively.

The Company's operating income, gross profit and income before tax in 2020 have all grown by a large margin compared to the previous year mainly due to the completion of La Bella Vita. We would like to present to shareholders the consolidated operating results and a summary of the operation plans of Formosan Rubber Group Inc. for 2020 as follows:

One. 2020 Consolidated Business Results

I. Performance of business plan implementation

(I) Consolidated operating income, gross profit and pre-tax income:

			Unit: thousand	Unit: thousand
Item	2020	2019	Increase and decrease amount	Increase and decrease %
Operatingincome	3,282,255	2,701,777	580,478	21.49%
Operatingmargin	1,062,287	661,688	400,599	60.54%
Pre-Tax Income	930,134	552,687	377,447	68.29%

• (II) The sales of the reserved apartments for “World Garden - Bridge Upto Zenith”, and “Modesty Home”

There were only a few residential apartments remaining at “World Garden - Bridge Upto Zenith” and “Modesty Home”. By judging the real estate market, we entrusted the sales of the residential apartments and took steps gradually, allowing steady sales, and we have now sold out all the residential apartments.

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(III) Xindian “Legend River”

With the opening of the MRT Circular Line soon and the development of the Yangbei Replanning Area, the market has gradually recovered and the selling rate has stabilized.

• (IV) The land development of “55Timeless” in Xinyi Planning District

With the building of high specifications and the public facilities of an art gallery, it has become one of the international-grade landmarks for luxury residential apartments. Its exceptional construction quality has been widely favored and designated by our high-end customers. Under the impact of the US-China trade war, we have seen a situation where funds have gradually returned to Taiwan. The sales for high price with large space residential apartments have increased compared to the previous year. With the Company’s flexible use of strategies, the apartments continued selling.

• (V) The land development of “La Bella Vita” for the replanning area in Taichung Phase 7.

  • The use permit was obtained upon completion in January 2020. The handover to the customers bought in the pre-sale stage has been completed. The real estate market of the 7th Phase, Taichung City is very active, and thus the selling prices are stablized. The major selling point of “La Bella Vita” is planned to be the real model house designed for “La Bella Vita” specifically by the architecture Antonio Citterio and renowned cabinet brand, to increase the sales synergy with cross-industry alliance.

• (VI) FRG Bridge Upto Zenith Business Plaza

  • FRG Qiao Feng Business Plaza is located on the first and second floors of No. 168-180, Section 1, Zhongshan Road, Banqiao, covering an area of 1,882 pings (6221 square meters). The first floor of the business plaza has been leased to E.SUN Commercial Bank; the second floor has been leased to Nan Shan Life Insurance Co., Ltd. and SinoPac Securities Corporation; the second floor of the business plaza at building B has been leased to the infant care center, Bell’s Home. The occupancy rate is 100%. FRG Qiao Feng Business Plaza has become an exquisite business center of Banqiao.

• (VII) San Francisco and Hotel Development Project

  • Our subsidiary (FRG US Corp.) established in the US in 2017 participates in the construction investments; The subsidiary’s investment in the project is approximately 11.23% The entire plan for the project consists of 242 luxury residential apartments, 10 retail stores, and a trendy hotel with 236 rooms. The completion is expected in Q3, 2021.

• II. Budget Execution: Based on the norms stipulated in the “Regulations Governing the Publication of

Financial Forecasts of Public Companies”, the Company does not need to prepare financial forecast for 2020.

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III. Analysis of Consolidated financial Income and Expenditure, and Profitability

Consolidated financial income and expenditure

Unit: NT$ thousand

		Unit: NT$thousand
Year Item	2020	2019
Net cash inflow (outflow) from operating activities	2,073,605	1,783,085
Net cash inflow(outflow)from investments	(345,338)	132,000
Net cash inflow (outflow) from financing activities	(1,313,393)	(1,764,554)

Analysis Table of Consolidated Profitability

Year Item		2019
	2020
Return on Asset(%)	7.20	4.09
Return on Equity (%)	8.20	5.09
Pre-Tax Income to Paid-In Capital(%)	27.17	15.79
Profit Margin(%)	27.47	19.95
EPS after tax	NT$2.62	NT$1.54

IV. Research & Development (R&D)

1. Based on the Company’s business philosophy “research makes the difference” at its establishment in 1980, we have continued to strive for search and innovation. The R&D results of 2020 are as follows:

2. (1) In 2020, we have successfully acquired 2 patents:

[1] ROC Patent for Flame Retardant Fabric and its Manufacturing Method [2] ROC Patent for Rubber Tarpaulin and their Preparing Method

• (2) There are another 12 patent applications pending.

• For the Nankan Leasing and Logistics Center, as the COVID-19 pandemic has caused the shutdown or lockdown in many countries or cities, and thus the operation of international logistics supply chains has been impacted severely, as the response, FRG International Logistics continues to implement safety control in the park, and provides customers with continuous service without interruption. The corresponding solution this year: as the longer the impact of the pandemic is, the bigger the impact on the industrial supply chain. This wave will push the electronic semiconductors to a positive direction. It seeks to adjust the types of industry in the park, expand new logistics customers, and focus on recruiting the electronic semiconductor industry. We also plan to cultivate elites, hoping to set an example for integration of providing services including professional rental and leasing, and logistics.

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II. 2021 Business Plan Overview

I. 2021 Management Policy

1. The 3 management policies for manufacturing industry are: “Innovation”, “international” and “service”.

2. "Innovation": Applying the advantages of equipment and manufacturing process, leveraging the characteristics of raw materials, improving product specifications and physical properties, to lead the market and create a win-win situation.

3. "International": The distributors have been established widely, strengthening cooperation and development with brand customers in Europe, Americas, and Japan, while expanding the business scale in the Greater China and Southeast Asian markets.

4. “Service”: Through technical services of professional teams, and quickly responding to fulfill customers’ needs, we hope to be the most profitable company to our customers.

5. The leasing business will adjust the types of industries in the park, and actively introduce electronic semiconductor related industrial chains to enter the park this year, and developing new customers. In the future, the leasing business will be integrated with logistics services, providing customers with a one-stop service model, and improving the operation mode through logistics system upgrades and the addition of automated equipment, so that customers feel the increase in efficiency. Upgrade personnel from repetitive tasks to managing customers and problem-solving talents, to secure the future talents. Meanwhile, the experience is extended to Longtan, and the creation of Nankan Logistics Park and Longtan Intelligent Park will become the best representative for the professional leasing and logistics integration service .

6. Real estate development and individual projects:

7. (1) The account for “Modesty Home” has been included when the project completed in 2014; we have an ‘elite’ apartment for sale.

8. (2) The reserved apartments of “Bridge Upto Zenith A[+” ] are entrusted to gradually sell according to the market reaction in order to stabilize the selling rate with reasonal price.

9. (3) The development of Xindian “Legend River” is located near the MRT Circular Line and the Yangbei Replanning Area have made the market together, and with the market gradually recovered, the sales have been stable.

10. (4) The “55Timeless” in Xinyi Planning District, Taipei City continued to be featured with the outstanding construction quality and technologies in the advertisement campaign, and the international grade interior designer is retained to customize the real model appartment for this project, to providing a reference to the high-asset customers for buying properties. Seeking target customers with flexible operation of sales strategies.

11. (5) The development of Taichung “La Bella Vita” was completed on January 7, 2020. A series of matters in relation to handing over the apartment to customers who have purchased the apartment in the pre-sale have been completed, followed by the sales of the completed apartment. The feature of the marketing campaign this year, is the real model apartment designed by Antonio Citterio and a renowned cabinet brank.

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• (6) The development of the San Francisco residential apartments and hotel have begun its construction in 2018 which is estimated to complete in 2021 Q3. Residential products are already on sale in Taiwan, while in San Francisco, due to the local pandemic and real estate market conditions, the residential sales and hotel openings are planned to be commenced at the appropriate timing.

II. Expected Sales and Their Basis

1. According to the long-term statistics of Germany, the total market of the global rubber and plastic demands will maintain its slow growth each year. Of which, the life-saving industry, medical industry, and environmental protection will outperform, and the first two are precisely within the Company’s technical strengths. Affected by the COVID-19 pandemic in 2020, the mobility of people in various countries was restricted, resulting in a severe shutdown of economic activities. However, as the rollout of vaccines mitigates the pandemic, and relief policies have worked, all economies are showing signs of recovery. However, in order to revitalize the economy, countries all over the world are expanding fiscal expenditures, causing the fiscal deficit to rise sharply. In the next few years, the deleverage task faced by governments will be more challenging than ever. In case a sovereign debt crisis breaks out, it may quickly spread to other economies, and plunges the global economy into another larger debt crisis. In addition, the Sino-US trade dispute has not yet ended. The International Monetary Fund (IMF) believes that the Sino-US trade dispute will bring significant uncertainty to the global economy and hinder investment, severely hurt the trend of business and financial markets, and disrupt the global supply chain. Combining the above unfavorable elements, in 2021, we will do our utmost to surpass the Company's total target sales of rubber and plastic synthetic leather of 10,089 thousand yards which was reached in 2020.

2. Nankan warehousing, logistics and property management: FRG International Logistics has been established for more than 20 years. It has built a logistics park of more than 40,000 pings in Nankan. The park consists of six buildings. The business model is mainly logistics center and warehouse leasing business. The tenants of the park mainly are electronic distributors, publishing industry, boutique industry, apparel industry and e-commerce operators. In the park, warehousing leasing, packaging and tally, customs declaration and transportation, and bonded warehouse operations are provided. Up to now the occupancy of the park has been more than 90%, and most of the tenants are internationally well-known customers. FRG International Logistics has maintained good interaction with customers, and more than 70% of them have been our partners for more than five years. In the future, the leasing business and logistics services will be integrated, to provide customers with a one-stop service model, while actively upgrading logistics to innovative logistics. This year, through the upgrade of logistics systems and the addition of automated equipment, we will upgrade personnel from repetitive tasks to managing customers and problem-solving talents, to secure the future talents. And by improving the operation mode through system integration and investment in automation equipment, customers will feel that the efficiency is improved. In the future, we will continue to refine strategies such as customized

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services and expansion of the business types, hoping to make it a benchmark for the logistics leasing industry.The income generated from the warehouse rent and logistics in 2020 is estimated to increase slightly compared to 2019 by 1% to 2%.

1. The sales of the remaining reserved apartments: - The available completed apartments of “55Timeless and “La Bella Vita” are gradually being sold. Reserved units in “Bridge Upto Zenith,” “Modesty Home,” and “Legend River” are continuously sold.

2. Banqiao Qian-Feng Business Plaza: The first and second floors consist of 1,882 pings (6221 square meters). The occupancy rate of 2020 was to 100%. In the future we will continue to enforce customer services and plaza management, creating a new image of exquisite business center in Banqiao District.

III. Important Production and Sales Policy

1. The 3 management policies for manufacturing industry are: “Innovation”, “international” and “service”.

2. "Innovation": Applying the advantages of equipment and manufacturing process, leveraging the characteristics of raw materials, improving product specifications and physical properties, to lead the market and create a win-win situation.

3. "International": The distributors have been established widely, strengthening cooperation and development with brand customers in Europe, Americas, and Japan, while expanding the business scale in the Greater China and Southeast Asian markets.

4. “Service”: Through technical services of professional teams, and quickly responding to fulfill customers’ needs, we hope to be the most profitable company to our customers.

5. In response to the plant expansion of semiconductor manufacturers in Taiwan, both upstream and downstream companies will increase their volumes and capacities. The demand for warehouses has grown in response to the growth of electronic semiconductors. To cope with this trend, firstly the . First, the space released from the termination of publishing company’s lease, will be applied for the expansion of the logistic space to 2,000 pints to actively introduce players in the electronic semiconductor-related industry chain; on the other hand, the business formats will be diversified, and the number of customers will be increased, making Nankan Logistics the first choice for the electronics-related industries. Taoyuan Longtan Park is the positioning focus of the next stage. The logistics plants will be customized, to continuously upgrade the one-stop service for early deployment. As it meets the expectations of customers, the cooperation relationship will be gradually deepened, and we will become a high-quality vendor in the eyes of customers, as well as the excellent representative of smart park.

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1. We acquired the prime land of the Xinyi Planning District in 2012, and in 2016, we cooperated with the mainland China construction company and introduced the projects of “55Timeless”; in the end of 2012, we cooperated with KINGLAND Property Corporation Ltd. and introduced the projects of “Legend River”, and in 2015, we acquired the land in Taichung for the projects of “La Bella Vita” which began its sales in 2016. We have truly excelled in our our expectations, allowing significant improvement in both profit or brand image.

III. The Company’s Future Development Strategy

I. Secondary Processing Industries:

• A. By signing annual sales contracts with major customers - ensuring stable performance of 60% or more.

• B. By improving quality - continue to establish OEM/ODM partnership with international major manufactures to ensure turnover.

• C. By making good use of equipment - develop multi-colored and multi-specification productions, ensuring customers’ brand loyalty.

• D. By the continual technical partnership with European, American and Japanese plants - create new products and introduce them to new markets applications

• E. By developing compound products and adding new production lines, with one stop shop service, fulfilling customers’ needs.

• F. By investing with precision - principles of full production, order delivery and gradually adjust the inventory.

II. Nankan Warehouse Logistics and Rental and Leasing Business:

New customers have been developed continuously for the Nankan leasing service business. The customer service demands have developed from the leasing relationship to acquisition of the partnership by winning customers’ trust via assistance to customers of analysis and advices. To continue and extend the partnership with customers, in the future, the leasing business and logistics services will be integrated, to provide customers with a one-stop service model, while actively upgrading logistics to innovative logistics. This year, through the upgrade of logistics systems and the addition of automated equipment, we will upgrade personnel from repetitive tasks to managing customers and problem-solving talents, to secure the future talents. And by innovation, the operation mode of system integration and investment in automation equipment is improved, and customers will feel that the efficiency is improved. Taoyuan Longtan Park is the positioning focus of the next stage. The logistics plants will be customized. In this year, the strength of the service will be enhanced, to provide the customers with excellent service items, to make FRG as the best representative of professional leasing and logistic services.

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III. Real Estate Development

In a bid to continue the real estate development experience and creating the long-term stable profit for the Company, not only do we have our own real estate assets, we also focus on other suitable land or individual projects. In addition to resident buildings, development of commercial spaces of considerable size are also planned. Not only can commercial real estate developments acquire longterm stable rent income, they also covers fields of business plaza operation, real estate management and property management. With the Company's accumulated strength and brand value increasing day by day with construction development business, and based on the needs of long-term development, aside the current development projects, we have also been diligently seeking individual projects that meet the Company’s circumstances.

IV. Effects by External Competitive, Regulatory and Overall Operating Environments

I. Secondary Processing Industries:

2020, the COVID-19 pandemic spread rapidly around the world, the momentum of global trade and investment fell sharply, and the global economy was severely shocked. However, with the development and production of the COVID-19 vaccine and large-scale vaccination, the global economy is expected to gradually improve and back to the track However, the Sino-US trade dispute has not stopped, and the United States will cooperate with allies to contain China. Other the factor of the COVID-19 pandemic, Japan's economic activities have been affected by the Sino-US trade war and the Japan-South Korea trade dispute successively. Europe has implemented strict lockdown measures to control the pandemic. The emerging ASEAN economies have continued to suffer severe pandemics due to their weaker medical infrastructure. As a result, strict lockdown and quarantine measures have been expanded, and economic activities have suffered a severe impact. The path to global trade recovery is full of uncertainties, and it is expected that the economic prosperity will on be returned to the pre-pandemic level in 2022. Therefore, by continuously developing new products, improving quality and strictly controlling costs based on the market orientation, the sustainable development of the Company may be ensured

II. Nankan Warehouse Logistics and Rental and Leasing Business:

The COVID-19 has caused manufacturing capacity to move from China to Southeast Asia and Taiwan to set up plants. This has caused the regional stocks raised in upstream and downstream manufacturers out of China. Relatively, the sea and air freight costs continue to rise. This year, sea and air traffic congestion has also delayed the schedule of global supply. These factors have affected the entire supply chain positioning, and resulted in a reshuffle. To increase the willingness of customers to set up transshipment hub in Taiwan, Taiwanese logistics industry must find a better taxation plan, and the players must also invest in automation equipment and logistics systems, in order to move the warehouse of these internationally renowned brands to Taiwan, and keep on

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creating value for customers.

III. Land Developments

The Company's construction products are all located in good locations, and the sales targets are mostly loyal customers who hold real estate for a long time. There are not many remaining reserved units, so the sales conditions and prices are very stable.

The domestic real estate market has been consolidating for many years, with the continued low interest rate environment, foreign assets return to Taiwan or high-asset customers increasingly invest in Taiwan. Therefore, land prices have increased significantly. However, the national policy seems to be adjusting the real estate market through the reform of the real estate tax system, which has made land development more uncertain and difficult. The Company will continue to insist the strategy of finding land with high potential of value raising and reasonable profits in high-quality urban areas, and make investment cautiously to ensure the Company's profits. Today, I am honored to present to all shareholders our 2020 business overview and 2021 business outlook. On behalf of all my colleagues, I thank each and every shareholder’s support and loyalty. In the future, we will strive toward excellence and hope to share with our shareholders yet another outstanding year.

I wish you well and stay healthy

Chairperson: Hsu Zhen-Tsai

President: Hsu Zhen-Ji

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II. Company Profile

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II. Company Profile

I. Company Profile:

• (I) Date of establishment: January 22, 1963 (the predecessor of the Company was established in the 1952)

• (II) Addresses and Telephones of the Head office, Branches and Plants:

Company address: 8th Floor, No. 82, Section 1, Hankou Street, Taipei

Telephone: (02)23700988

Taoyuan plant: No. 1, Chaofeng Road, Sanhe Vil, Longtan District, Taoyuan Telephone: (03)4893456

Nankan International Logistics Center: 2F, No.53, Housheng Road, Luzhu District, Taoyuan Telephone: (03)3216533

• (III) Company History

1952	Established the Company,producingrecycled rubber.
1963	Technical cooperation with Radium Rubber of West Germany.
1976	Established theplasticplant from the technical cooperation with Maruyama Industrial.
1980	Production of plastic foam latex leather from the technical cooperation with Nankai Plastic. Technical cooperation with GOODYEAR.
1981	Awarded with the “Gan Cheng Medal” for successfully developing military equipment including floating bridges, water cabinets, scout boats, attack boats, life raft, lifejackets,gasproof clothingand aircraft fuel tanks.
1992	Officiallylisted on March 3.
1995	Established the PU Division for R&D and promotion of PU products. Established investment committee to conduct diversified investments.
1996	Combined the plant and office to enhance customer services. Established the Construction Department to effectivelydevelopthe land use values of Formosan.
1997	Launched the R&D building; established the precision lab to enhance the analysis of product research and development.
1998	Established the CPU Division toproduce clear wet look PUproducts and PP syntheticpaper.
1999	Invested in Wanexe Securities which later merged with SinoPac Securities then Huaxin Bank which has become the Sinopac Financial Holdings CompanyEstablished the Fenghe E-Library.
2000	Established the IP project to proactively conduct the development of various patents, forming a knowledge economy.
2001	Established the Siliconeproject to research and develophigh-tech rubberproducts for the new century.
2002	Became the biggest manufacturer for Taiwan TPU and laminating products.
2003	Obtained the ISO9001 quality assurance; FRG International Logistics acquired the license of the International Logistics Center. Established a 100% holding subsidiary for the land development of the Banqiao Special Project Six: Ban Chien Development Co., Ltd.
2004	2. The installation of the 4-meter ultra-wide laminating machine and electronic-grade plastic additive synthesizing machine was completed; entered the automotive interior and electronics market; received the thirdplace in the

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	92nd "Excellent Trading Businesses". In December, it issued the first unsecured convertible corporate bonds of NT$2.2 billion and began trading over- the-counter.
2005	Acquired ISO-14000 certification for environmental quality. The project of the land development in Banqiao of 2005 was sent to the Urban Planning Committee for review and began the development cooperation with China construction company.
2006	Signed the contract for the construction of land development project of Banqiao with the China construction company. Established the logistics center in Longtan for chemical products. The installation of the new steel belt drum vulcanization equipment and 2.4m ultra-wide dust-free precision coating machine are completed. In order to meet the capital needs to for the development of the Banqiao Special Project Six, a syndicated loan was signed with the bank with a limit line of NT$3.1 billion.
2007	The first unsecured convertible corporate bonds of NT$2.2 billion has been fully converted, and it was delisted on April 13. The pre-sale began in the end of January for the land development project of “World Garden - Bridge Upto Zenith” in Banqiao;the construction officiallystarted on March19. Launched the brand new Central Lab.
2008	Launched the brand new steel belt and tank rubber vulcanization plant that were the largest in Asia. Signed a joint contract for the construction of the land development of Banqiao “Special Project One” which was sent to the Urban Planning pendingreview.
2009	The Company has passed the international quality certification of life rafts, biocompatibility, and life jackets. The Company cooperated with Qia-Chu Construction Company to develop the land at Zhuangjing Section, Xindian City, Taipei Countyand ajoint construction contract was signed.
2010	The Company's new 10,Banbury mixer and plant were officially launched on June 17. Ranked the second for the growth rate of Korea’s key export market in 2009. The user’s license was acquired in December for the land development project of “World Garden - Bridge Upto Zenith” in Banqiao. The land development project of “Modesty Home” in Banqiao was approved by the urban update planning of the New Taipei Government and the construction license was issued.
2011	The new TPU polishing machine was put into production. Fenghe Employee Sports & Health Center was completed. 60th Anniversary of Formosan Rubber Group Inc. The apartments for the land development project of “World Garden - Bridge Upto Zenith” in Banqiao were handed over to customers; helped the residents to set up the Community Management Committee in September. The pre-sale for the land development project of “Modesty Home” in Banqiao completed in February with a 100% sales rate; the construction started in March.
2012	The Company cooperated with the “Mainland Construction Company”, “Heng Bang Construction Company and “Heng Ju Construction Company” for the development of third Subsection of Xinyi Section, Xinyi District, Taipei; ajoint construction contract was signed.
2013	The second set of energy-saving and high-efficiency steam and heat medium boilers in Taoyuan Plant was put into operation. The power-saving and energy-saving conversion of the heavy-duty mixer in Taoyuan Plant was completed. The user’s license was acquired in December for the “ModestyHome”project in Banqiao.

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2014	A construction license was acquired for the “development of third Subsection of Xinyi Section, Xinyi District, Taipei (55Timeless)” and construction license was acquired in June 2014; the groundbreaking ceremony was held in September in the sameyear(2014).
2015	The installation of the new steel belt drum vulcanization equipment was put into use in the Taoyuan plant. A construction license was acquired for the “development of Huiguo Section of Taichung (La Bella Vita)” and a construction license was acquired in November 6, 2015; the groundbreaking ceremony was held on March 4, 2016.
2016	A regenerative thermal oxidizer(RTO)was added in December 2016, and testingwas completed in April 2017.
2017	In October 2017, the subsidiary “FRG US CORP.” in the US was registered; the businesses are real estate investments, developments, and house and land leases/sales in the US. An upright oven and sulfuration tank equipment were added in the Taoyuanplant.
2018	A regenerative thermal oxidizer (RTO) was added in 2018. A xenon arc lamp weathering tester and an ozone resistance tester were added in the Taoyuan lab. To correspond to the government’s “National Vehicles Manufactured in Taiwan” policy, the rubber floor mat of the Taoyuan Plant vigorous researched and developed and the test was passed; orders of automobile floor mats were acquired by the “New Taipei City MRT Ankeng Light Rail Transportation System”. The user’s license was acquired for the 55Timeless project in December 2018; the transfer of property rights and house deliverywere carried out in January2019.
2019	In 2019, two sets of gas heat medium boilers that met the requirements of the environmental regulations were added in the Taoyuan plant. A spectrophotometric testingmachine for color matchingwas added in the lab in the Taoyuan lab.
2020	The M07 coal-carbon steam boilers were altered to use biomass fuels, to complete the 2020 industrial low-carbon technology application subsidy program of the Industrial Development Bureau, Ministry of Economic Affairs. “La Bella Vita” was completed in January, 2020.A series of matters in relation to handing over the apartment to customers who have purchased the apartment in the pre-sale have been completed, followed bythe sales of the completed apartment.

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III. CORPORATE GOVERNANCE REPORT

• I. Organizational System

• II. Information on Directors, Presidents, Vice Presidents, Assistant Managers, and the chief of various departments and branches

• III. Remuneration of Directors (Including Independent Directors), Supervisors, Presidents and Vice Presidents

• IV. Implementation of Corporate Governance

• V. Information Regarding the Company’s Audit Fees

• VI. Change of CPA

• VII. Any of the Company’s chairperson, president, or managerial officer in charge of finance or accounting held a position in the CPA’s firm or its affiliates in the most recent year

• VIII. Changes in shareholding and shares pledged by directors, managerial officers and shareholders with 10% shareholdings or more in most recent year and as of the publication date of the annual report

• IX. Top 10 shareholders who are related parties, spouses, or within second-degree of kinship to each other

• X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee

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III. CORPORATE GOVERNANCE REPORT

I. Organizational System Chart

1. Organizational Structure

==> picture [476 x 380] intentionally omitted <==

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

Shareholders
Audit Committee
Board of Directors
Remuneration
Committee
Chairperson
Audit Office
President International Logistics
Center
Construction
Consultant Vice President
Department
Legal Affairs Office
Production Department
Management Development
(Taoyuan Plant)
Finance Accounting General Economic Marketing Technical Production
Affairs Information Division Division Division
----- End of picture text -----

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2. Operation of Main Departments/Divisions:

Department/Division	Operation
Audit Office	Comprehensive management of drafting and implementing annual audit plans Inspection and reviews of the internal control system Inspection of the implementation of Board of Directors’ meeting agendas Promotion of cooperate governance Other inspection and reviews designated bythe competent authority
Legal Affairs Office	Comprehensive management of contract reviews Handling of litigation cases Planningof legal support
Construction Department	Comprehensive management of the development and constructions of real estates Matters in relation to commission of construction,leases and sales
International Logistics Center	Management of logistics and warehouses
Marketing Division	Comprehensive management of sales services Collection of market information Development of domestic and overseas market Customer service and execution of salesplans
Production Division	Comprehensive management of matters in relation to production, qualitycontrol,etc.
Technology Division	Comprehensive management of matters in relation to R&D, design, etc.
Management Department	Comprehensive management of matters in relation to company financial scheduling, capital management, investment management, stock affairs, HR, accounting, costs, general affairs, information, Board of Directors,etc.

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II. Background information of directors, president, Vice Presidents, assistant managerial officers, and the chief of various departments and branches:

(I) Information on Directors: book closure: April 13, 2021

Title(Note 1)	Nationality or Place of Registration	Name	Gender	Date Elected	Term of office	Date First Elected (Note 2)	Shareholding When Elected	Shareholding When Elected	Current Shareholding	Current Shareholding	Shares Currently Being Held by Spouse and Underage Children	Shares Currently Being Held by Spouse and Underage Children	Shares Held by Proxy	Shares Held by Proxy	Main Career (Academic) Achievements (Note 3)	Current Concurrent Positions in the Company and Other Companies	Other Managers, Directors or Supervisors Who are Spouses or within Second-Degree of Kinship to Each Other	Other Managers, Directors or Supervisors Who are Spouses or within Second-Degree of Kinship to Each Other	Other Managers, Directors or Supervisors Who are Spouses or within Second-Degree of Kinship to Each Other	Remarks (Note 4)
							Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage			Title	Name	Relation
Chairperson	Republic of China	Hsu Zhen-Tsai	Male	June 5, 2019	3 years	November 5, 1981	3,389,588	0.97%	3,389,588	0.97%	1,005,200	0.29%	0	0%	Dropped out of Universi of San Francisco	Chairperson of Banji Development Co., L Ho and Hohe Construction C Ltd. Chairperson of Shanghai Ruifu Property Developme Co.,Ltd.	t Director and President Representative of juristic- person director	Hsu Zhen- Ji Hsu Zhen- Xin	Brother Brother	None
Director and President	Republic of China	Hsu Zhen-Ji	Male	June 5, 2019	3 years	June 12, 1989	1,947,781	0.56%	1,947,781	0.57%	0	0%	0	0%	Tamkang University MBA, University of Tennessee EMBA, International Business, National Taiwan University	Chairperson of Ruifu Development Co., Ltd.	Chairperson Representative of juristic- person director	Hsu Zhen- Tsai Hsu Zhen- Xin	Brother Brother	None
Director	Republic of China	Hallmark Int'l Co.,Ltd.	Not applicable	June 5, 2019	3 years	June 15, 2007	2,161,988	0.62%	2,161,988	0.63%	0	0%	0	0%	None	None	None	None	None	None
Juristic- person representative of director	Republic of China	Representative of Hallmark Int'l Co., Ltd.: Hsu Zhen-Xin	Male	June 5, 2019	3 years	June 12, 1989	0	0.00%	2,754,912	0.80%	0	0%	0	0%	Fu Jen Catholic University	Chairperson of Ruifu Investment Co., Ltd., Hallmark Int'l Co., Ltd., Quanxinfeng Co., Ltd.	Chairperson Director and President	Hsu Zhen- Tsai Hsu Zhen- Ji	Brother Brother	None
Director	Republic of China	Ruifu Construction Co.,Ltd.	Not applicable	June 5, 2019	3 years	June 7, 2016	33,362,754	9.53%	34,070,754	9.95%	0	0%	0	0%	None	None	None	None	None	None
Juristic- person representative of director	Republic of China	Representative of Ruifu Construction Co., Ltd.: Hsu Wei-Zhi	Male	June 5, 2019	3 years	June 15, 2007	0	0.00%	4,597	0.00%	64,800	0.02%	0	0%	Master, Architecture in Urban Design, Harvard University, USA Master, Architecture, University of California, Berkeley Adjunct Lecturer, Department of Architecture Institute, TamkangUniversity	Architect, Hsu Wei-Zhi Law Firm Adjunct Lecturer, Department of Architecture Institute, Tamkang University	None	None	None	None
Director	Republic of China	Hohe Construction Co.,Ltd.	Not applicable	June 5, 2019	3 years	June 7, 2016	11,871,726	3.39%	13,586,726	3.97%	0	0%	0	0%	None	None	None	None	None	None
Juristic- person representative of director	Republic of China	Representative of Hohe Construction Co., Ltd.: Lin Kun-Rong	Male	June 5, 2019	3 years	June 15, 2007	0	0.00%	24,300	0.01%	0	0%	0	0%	MBA, Department of Business Administration, Taipei University Chairperson of Yingcheng Construction Co.,Ltd.	Chairperson of Yingcheng Construction Co., Ltd.	None	None	None	None

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Title(Note 1)	Nationality or Place of Registration	Name	Gender	Date Elected	Term of office	Date First Elected (Note 2)	Shareholding When Elected	Shareholding When Elected	Current Shareholding	Current Shareholding	Shares Currently Being Held by Spouse and Underage Children	Shares Currently Being Held by Spouse and Underage Children	Shares Held by Proxy	Shares Held by Proxy	Main Career (Academic) Achievements (Note 3)	Current Concurrent Positions in the Company and Other Companies	Other Managers, Directors or Supervisors Who are Spouses or within Second-Degree of Kinship to Each Other	Other Managers, Directors or Supervisors Who are Spouses or within Second-Degree of Kinship to Each Other	Other Managers, Directors or Supervisors Who are Spouses or within Second-Degree of Kinship to Each Other	Remarks (Note 4)
							Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage			Title	Name	Relation
																			None	None
Independent director	Republic of China	Xiao Sheng- Xian	Male	June 5, 2019	3 years	June 7, 2016	0	0.00%	0	0.00%	0	0%	0	0%	Doctor, Laws, University of International Business and Economics Master, Laws, Soochow University Bachelor, Commerce, National Taiwan University	Director, Jianhe Accounting Firm Senior Advisor, Myriad Attorney at Law Member of Mediation Committee, Civil Division, Taipei District Court Independent director, APEX Science & EngineeringCorp.	None	None	None	None
Independent director	Republic of China	Chen Zhu-Sheng	Male	June 5, 2019	3 years	June 7, 2016	0	0.00%	0	0.00%	0	0%	0	0%	Master, Labor Research Institute, Chinese Culture University	Vice chairperson, Taipei Employment Service Institute Association President, Fullens Co., Ltd. Secretary General, Chung Hua Nursing and FamilyServices	None	None	None	None
Independent director	Republic of China	Wu Chun- Lai	Male	June 5, 2019	3 years	June 5, 2019	0	0.00%	0	0.00%	0	0%	0	0%	Doctor, Management, Shanghai Jiao Tong University Master, Department of Public Administration, National Chengchi University	General Consultant, Jet- Go Consulting Group Deputy Chief Executive Officer, Taiwan Active Aging Association	None	None	None	None

Note 1: If a juristic-person shareholder, please list its name and the representative's name (if the representative of a juristic-person shareholder, please indicate the name of the juristic-person shareholder) and fill in Table 1 below. Note 2: Please fill in the time of assuming the Company’s director or supervisor position for the first time. If there is any interruption, please indicate.

Note 3: Experience related to the current position. If the person has worked for the Company's CPA firm or affiliates in the aforementioned period, please describe the titles and responsibilities.

Note 4: Where the chairperson of the Board of Directors and the president or person of an equivalent post (the highest level managerial officer) of a company are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto (for example: method of increase the number of independent directors with a majority of the directors not serving as an employee or managerial officer): None.

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Table 1: Major shareholders of juristic-person shareholders:

Table 1: Major shareholders of	juristic-person shareholders:
	Book closure: April 13,2021
Name of juristic-person shareholder (Note 1)	Major shareholders of the juristic-person shareholder (Note 2)
Ruifu Construction Co., Ltd.	Hsu Zhen-Tsai (81.99%) Ascend Gear International Inc. (18%)
Hohe Construction Co., Ltd.	Formosan Rubber Group Inc.(26.2%) Hsu Zhen-Tsai (21.25%) Ruifu Construction Co., Ltd. (18.99%) Ascend Gear International Inc. (10.15%) Kuancheng International Inc. (3.67%) Chengxi Investment Co., Ltd. (3.51%) Hsu Mei-Ling (2.68%) Hsu Zhen-Ji (2.53%) Hsu Mei-Zhi (2.43%) Hsu Guo-Yue-Gui (2.32%)
Hallmark Int'l Co., Ltd.	Hsu, Zhen-Xin(84.1%); Li, Yue-Ling (12.5%); Hsu, Chi-Wen (1.7%); Hsu, Hsiu Ming (1.7%)

Note 1:If the Director is the representative of a juristic-person shareholder, please fill in the name of the juristic-person shareholder. Note 2:Please fill in the name of the major shareholder of the juristic-person shareholder (top 10 in shareholding) and the shareholding ratio. If the major shareholder is a juristic-person shareholder, please also fill in Table 2.

Table 2: Major shareholders of the major shareholders in Table 1 who are juristic-person shareholders

Name of the juristic-person (Note 1)	Major shareholders of the juristic-person shareholder(Note 2)
Formosan Rubber Group Inc.	Ruifu Construction Co., Ltd. (9.95%) Chengxi Investment Co., Ltd. (5.11%); Ascend Gear International Inc. (4.99%); Hohe Construction Co., Ltd. (3.97%); Hsu Mei-Lun (2.80%); Quanxinfeng Co., Ltd. (2.61%); Citi (Taiwan) Commercial Bank is entrusted with the custody of the Norges Bank Investment (1.43%); Ren-Yu Investment Limted (1.26%); JPMorgan Chase Bank Taipei Branch is entrusted with the custody of Vanguard Group CompanyManager's Vanguard Global Market Stock Index Fund(1.19%);He,Ming-Chuan(0.99%)
Ruifu Construction Co., Ltd.	Hsu Zhen-Tsai (81.99%) Ascend Gear International Inc. (18%)
Chengxi Investment Co., Ltd.	Hsu Zhen-Ji (99.5%); Yang Xun-Wen (0.2%); Hsu, Ru-Yi (0.15%); Hsu Zhen-Tsai (0.15%)
Kuancheng International Inc.	Hsu, Cheng-Tai (88.26%); Hsu-Lin Chin-Rong (11.73%); Lin, Chin-Hua (0.007%); Lin-Tsai Su-Ai (0.007%)
Ascend Gear International Inc.	Hsu Zhen-Tsai (64%) Chen Hui-Jin (36%)

Note 1: If the major shareholder in Table 1 is a juristic-person shareholder, please fill in their name.

Note 2: Please fill in the name of the juristic-person shareholder’s major shareholder (top 10 in shareholding) and the shareholding ratio.

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Information of Directors (II)

April 13, 2021

Conditions Name (Note 1)	Meet the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent Director
	Lecturer or above in commerce, law, finance, accounting or subjects required by the business of the Company in public or private colleges or universities	Judge, public prosecutor, attorney-at-law, certified public accountant, or other professional or technical specialist who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Company.	Required working experience in commerce, law, finance, accounting or other fields required by the business of the Company	1	2	3	4	5	6	7	8	9	10	11	12
Hsu Zhen-Tsai	None	None	V	V				V	V	V	V	V		V	V	0
Hsu Zhen-Ji	None	None	V			V		V	V	V	V	V		V	V	0
Hsu Zhen-Xin (Representative of Hallmark Int'l Co., Ltd.)	None	None	V			V				V	V	V		V		0
Hsu Wei-Zhi (Representative of Ruifu Construction Co., Ltd.)	Yes	Yes	V	V		V	V		V	V	V		V	V		0
Lin Kun-Rong (Representative of Hohe Construction Co., Ltd.)	None	None	V	V		V	V		V	V	V	V	V	V		0
He Min-Chuan	None	None	V	V		V	V	V	V	V	V	V	V	V	V	0
Xiao Sheng-Xian	None	Yes	V	V	V	V	V	V	V	V	V	V	V	V	V	1
Chen Zhu-Sheng	None	None	V	V	V	V	V	V	V	V	V	V	V	V	V	0
Wu Chun-Lai	None	None	V	V	V	V	V	V	V	V	V	V	V	V	V	0

Note 1: Adjust the number of columns as needed.

Note 2: A “V” is placed in the box if the director or supervisor met the following conditions at any time during active duty and two years prior to the date elected.

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

• (2) Not a director or supervisor of an affiliate of the Company. (However, this restriction does not apply in cases where the person is an independent director of the Company, its parent or subsidiary or a subsidiary of the same parent established in pursuant to this law or local laws).

• (3) Not a natural-person shareholder or holder of shares, together with those held by a spouse, minor children, or held by the person under other names, in an aggregate amount of 1% or more of the total number of issued shares of the company or ranking within the top 10 in holdings.

• (4) Not a managerial officer listed in criteria (1) or a spouse, relative of second degree, or direct kin of third degree or closer to persons not qualified for criteria (2) and (3).

• (5) Not a director, supervisor, or employee of a juristic-person shareholder that directly holds 5% or more of the total number of issued shares of the company or of a juristic-person shareholder that ranks among the top five in shareholdings according to Paragraph 1 or Paragraph 2 Article 27 of the Company Act (the same does not apply, however, in cases where the person is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary).

• (6) Not a director, supervisor, or employee, holding a majority of the company's director seats or voting shares and those of any other company are controlled by the same person (the same does not apply, however, in cases where the person is an independent director of the company or its parent company, any subsidiary, as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary).

• (7) Not the same person with the company’s director, general manager, or person of an equivalent post or of a specified company or institution’s director, supervisor, or officer (the same does not apply, however, in cases where the person is an independent director of the company or its parent company, any subsidiary, as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary).

• (8) Not a director, supervisor, managerial officer, or shareholder holding more than 5% of a specified company or institution that has a financial or business relationships with the company (the same does not apply, to certain companies or institutions holding more than 20% of the total issued shares of the Company, but no more than 50% and to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at the Company and its parent or subsidiary or a subsidiary of the same parent).

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

• (10) Not a spouse or relative of second degree or closer to any other directors.

• (11) Not under any circumstances as stipulated in Article 30 of Company Law.

• (12) Not elected as a government or corporate representative according to Article 27 of The Company Act.

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(II) Information on Presidents, Vice Presidents, Assistant Managers, and the chief of various departments and branches:

Book closure: April 13, 2021

Title (Note 1)	Nationality	Name	Gender	Date Elected	Shareholding	Shareholding	Shares Held by Spouse and Underage Children	Shares Held by Spouse and Underage Children	Shares Held by Proxy	Shares Held by Proxy	Main Career (Academic) Achievements (Note 2)	Current Concurrent Positions in Other Companies	Managerial Officers Who are Spouses or Within Second-Degree of Kinship to Each Other	Managerial Officers Who are Spouses or Within Second-Degree of Kinship to Each Other	Managerial Officers Who are Spouses or Within Second-Degree of Kinship to Each Other	Remarks (Note 3)
					Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage			Title	Name	Relation
President	Republic of China	Hsu Zhen- Ji	Male	June 5, 2019	1,947,781	0.57%	0	0%	0	0%	Tamkang University MBA, University of Tennessee EMBA, International Business, National Taiwan University President of Formosan Rubber Group Inc.	Chairperson of Ruifu Development Co., Ltd.	Director and Special Assistant	Hsu Zhen- Xin	Brother	None
Director and Special Assistant	Republic of China	Hsu Zhen- Xin	Male	July 4, 2014	2,754,912	0.80%	0	0%	0	0%	Fu Jen Catholic University Chairperson of Hallmark Int'l Co., Ltd. Chairperson of Quanxinfeng Co., Ltd.	Chairperson of Ruifu Investment Co., Ltd., Hallmark Int'l Co., Ltd., Quanxinfeng Co., Ltd.	President	Hsu Zhen- Ji	Brother	None
Vice President	Republic of China	Jiang Rui- Tang (Note 4)	Male	81.02.01	129,357	0.04%	0	0%	0	0%	National Taiwan University Vice president of Formosan Rubber GroupInc.	Director of Ruifu Development Co., Ltd.	None	None	None	None
Chief financial officer	Republic of China	Lin Shi- Zhe	Male	July 1, 2007	35,640	0.01%	0	0%	0	0%	Master, National Taiwan University President of East Asia Trusted Co., Ltd. Manager of the Management Department of Formosan Rubber GroupInc.	None	None	None	None	None
Managerial Officer	Republic of China	Hsiao Zheng- Zhong	Male	January 1, 1998	10,418	0.00%	0	0%	0	0%	Lunghwa University of Science and Technology Manager of Production Development of Formosan Rubber GroupInc.	Supervisor of Banjian Development Co., Ltd.	None	None	None	None
Managerial Officer	Republic of China	Huang Hui Xian	Female	March 1, 2010	1,620	0.00%	0	0%	0	0%	Vanung University EMBA National Tsing Hua University Manager of the Warehouse Department Formosan Rubber Group Inc.	None	None	None	None	None
Internal Audit Officer	Republic of China	Ou, Chia- Bao	Male	January 1, 2021	71,923	0.02%	0	0	0	0%	Aletheia University Deputy Manager, Taipei Branch, Citibank	Ban Chien Development Co., Ltd. Internal Audit Officer	None	None	None	None
Chief accounting officer	Republic of China	Shi Ming- De	Male	February 1, 2010	0	0.00%	0	0%	0	0%	National Taipei University Chief of KPMG Taiwan	None	None	None	None	None

Note 1: It shall include information on president, Vice Presidents, assistant vice president, all departments and branch regardless of the title, and any position equivalent to general manager, vice general manager or associate manager Note 2: Experience related to the current position. If the person has worked for the Company's CPA firm or affiliates in the aforementioned period, please describe the titles and responsibilities. Note 3: Where the president or person of an equivalent post (the highest level managerial officer) and the chairperson of the Board of Directors and the of a company are the same person, spouses, or relatives within the first degree of kinship, the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto (for example: method of increase the number of independent directors with a majority of the directors not serving as an employee or managerial officer) shall be disclosed: None.

Note 4: Mr. Jiang Rui-Tang retired on March 1, 2021.

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III. Remuneration of Directors (Including Independent Directors), Presidents and Vice Presidents

(1-1) Remuneration to Directors (including Independent Directors) (Individual disclosure of names and remuneration) Unit: NT$

Title	Name	Remuneration to Directors	Remuneration to Directors	Remuneration to Directors	Remuneration to Directors	Remuneration to Directors	Remuneration to Directors	Remuneration to Directors	Remuneration to Directors	The sum of A, B, C and D as a percentage of net income (Note 10)	The sum of A, B, C and D as a percentage of net income (Note 10)	Remuneration as Companyemployee	Remuneration as Companyemployee	Remuneration as Companyemployee	Remuneration as Companyemployee	Remuneration as Companyemployee	Remuneration as Companyemployee	Remuneration as Companyemployee	Remuneration as Companyemployee	The sum of A, B, C, D, E, F, and G as a percentage of net income (Note 10)	The sum of A, B, C, D, E, F, and G as a percentage of net income (Note 10)	Remuneration from investees other than subsidiaries (Note 11)
		Remuneration (A) (Note 2)		Pension (B)		Directors’ remuneration (C) (Note 3)		Fees for services rendered (D) (Note 4)				Salaries, bonuses, special allowances, etc. (E) (Note 5)		Pension (F)		Employee remuneration (G) (Note 6)
		The Company	All companies included in the financial reports (Note 7)	The Company	All companies included in the financial reports (Note 7)	The Company	All companies included in the financial reports (Note 7)	The Company	All companies included in the financial reports (Note 7)	The Company	All companies included in the financial reports (Note 7)	The Company	All companies included in the financial reports (Note 7)	The Company	All companies included in the financial reports (Note 7)	The Company		All companies included in the financial reports (Note 7)		The Company	All companies included in the financial reports (Note 7)
																Cash amount	Stock amount	Cash amount	Stock amount
Chairperson	Hsu Zhen-Tsai	11,631,900	11,631,900	0	0	2,372,750	2,372,750	108,000	108,000	1.57%	1.57%	0	0	0	0	0	0	0	0	1.57%	1.57%	0
Director and President	Hsu Zhen-Ji	675,000	675,000	0	0	1,423,650	1,423,650	108,000	108,000	0.24%	0.24%	6,670,400	6,670,400	0	0	520,500	0	520,500	0	1.04%	1.04%	0
Director and Special Assistant	Hallmark Int'l Co.,Ltd.	0	0	0	0	1,423,650	1,423,650	0	0	0.16%	0.16%	0	0	0	0	0	0	0	0	0.16%	0.16%	0
	Juristic-person representative: Hsu Zhen-Xin	675,000	675,000	0	0	0	0	108,000	108,000	0.09%	0.09%	6,511,531	6,511,531	0	0	520,500	0	520,500	0	0.87%	0.87%	0
Director	Ruifu Construction Co.,Ltd.	0	0	0	0	949,100	949,100	0	0	0.11%	0.11%	0	0	0	0	0	0	0	0	0.11%	0.11%	0
	Juristic-person representative: Hsu Wei-Zhi	675,000	675,000	0	0	0	0	108,000	108,000	0.09%	0.09%	0	0	0	0	0	0	0	0	0.09%	0.09%	0
Director	Hohe Construction Co.,Ltd.	0	0	0	0	949,100	949,100	0	0	0.11%	0.11%	0	0	0	0	0	0	0	0	0.11%	0.11%	0
	Juristic-person representative: Lin Kun-Rong	675,000	675,000	0	0	0	0	108,000	108,000	0.09%	0.09%	0	0	0	0	0	0	0	0	0.09%	0.09%	0
Director	He Min-Chuan	675,000	1,227,000	0	0	949,100	949,100	108,000	108,000	0.19%	0.25%	0	0	0	0	0	0	0	0	0.19%	0.25%	0
Independent director	Xiao Sheng- Xian	675,000	675,000	0	0	474,550	474,550	108,000	108,000	0.14%	0.14%	0	0	0	0	0	0	0	0	0.14%	0.14%	0
Independent director	Chen Zhu- Sheng	675,000	675,000	0	0	474,550	474,550	108,000	108,000	0.14%	0.14%	0	0	0	0	0	0	0	0	0.14%	0.14%	0
Independent director	Wu Chun-Lai	675,000	675,000	0	0	474,550	474,550	108,000	108,000	0.14%	0.14%	0	0	0	0	0	0	0	0	0.14%	0.14%	0
1. Please describe the independent directors’ remuneration policy, system, standards, and structure, and explain the factors including the independent directors’ duties, risks, and invested time connecting to the remunerat the participating degree and contribution the directors and independent directors have on the Company’s operation as well as taking reference from Taiwan and overseas remuneration standards. 2. Remuneration received bydirectors forprovidingservice to anycompanyincluded in the financial statements(e.g. consultancyservice without the title of an employee)in the lastyear,except those disclosed in the ab																ion amount: The remuneration of the directors and independent directors is based on ove table: None.

Note: (1)The salary of the chairperson’s driver totaled NT$870,721; the salary of the chairperson’s bodyguard totaled NT$30,400 (2) The salary of the president’s driver totaled NT$727,619.

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Remuneration bracket table

	Remuneration bracket table	Remuneration bracket table
Remunerations to individual directors in respective brackets along the remuneration scale	Name of		director
	Total remuneration(A+B+C+D)		Total remuneration(A+B+C+D+E+F+G)
	The Company (Note 8)	All companies included in the financial reports (Note 9)H	The Company (Note 8)	All companies included in the financial reports (Note 9)I
Below NT$1,000,000	3 Hsu Zhen-Xin, Hsu Wei-Zhi, Lin Kun-Rong	3 Hsu Zhen-Xin, Hsu Wei-Zhi, Lin Kun-Rong	2 Hsu Wei-Zhi, Lin Kun-Rong	2 Hsu Wei-Zhi, Lin Kun-Rong
NT$1,000,000 (inclusive) - NT$2,000,000 (exclusive)	4 He Min-Chuan, Xiao Sheng-Xian, Chen Zhu-Sheng, Wu Chun- Lai	3 Xiao Sheng-Xian, Chen Zhu-Sheng, Wu Chun-Lai	4 He Min-Chuan, Xiao Sheng-Xian, Chen Zhu-Sheng, Wu Chun-Lai	3 Xiao Sheng-Xian, Chen Zhu-Sheng, Wu Chun-Lai
NT$2,000,000 (inclusive) - NT$3,500,000 (exclusive)	1 Hsu Zhen-Ji	2 Hsu Zhen-Ji,He Min-Chuan		1 He Min-Chuan
NT$3,500,000(inclusive)- NT$5,000,000(exclusive)
NT$5,000,000 (inclusive) - NT$10,000,000 (exclusive)			2 Hsu Zhen-Ji,Hsu Zhen-Xin	2 Hsu Zhen-Ji,Hsu Zhen-Xin
NT$10,000,000 (inclusive) - NT$15,000,000 (exclusive)	1 Hsu Zhen-Tsai	1 Hsu Zhen-Tsai	1 Hsu Zhen-Tsai	1 Hsu Zhen-Tsai
NT$15,000,000(inclusive)- NT$30,000,000(exclusive)
NT$30,000,000(inclusive)- NT$50,000,000(exclusive)
NT$50,000,000(inclusive)- NT$100,000,000(exclusive)
Above NT$100,000,000
Total	9	9	9	9

• Note 1: Directors' names are presented separately (for juristic-person shareholders, the name of the juristic-person shareholder and its representatives are stated separately), whereas the amount of benefits and allowances are presented in aggregate sums. Any

• directors who co-headed the President or Vice President positions are disclosed in this table and in Table (3-1) or (3-2) below.

• Note 2: Refers to director's remuneration in the last year (including salaries, allowances, severance pay, various bonuses and incentives, etc.)

Note 3: Represents the amount of directors’ remuneration that the Board has proposed as part of the latest earnings appropriation.

• Note 4: Refers to remuneration to directors for services rendered (including travel, special allowances, various subsidies, accommodation, corporate vehicle and other in-kind benefits). Where housing, cars, vehicles, or personal allowances were granted, the nature and

• cost of assets, the rental rates (calculated based on actual or fair value), cost of petrol and other subsidies are also disclosed. Where personal drivers were allocated, please make a footnote disclosure explaining the amount of salaries made to drivers, but do not count them as part of the remuneration paid to the above benefits.

• Note 5: Refers to any salaries, allowances, severance pay, bonuses, incentives, travel allowances, special allowances, subsidies, accommodation, vehicles and in-kind benefits that the director received in the last year for assuming the role of a company employee (such as President, Vice President, managerial officer or other employee). Where housing, cars, vehicles, or personal allowances were granted, the nature and cost of assets, the rental rates (calculated based on actual or fair value), cost of petrol and other subsidies are also disclosed. Where personal drivers were allocated, please make a footnote disclosure explaining the amount of salaries made to drivers, but do not count them as part of the remuneration paid to the above benefits. Part of the salary expense was recognized according to IFRS2 - "Share-based Payment." Amounts including employee stock options, restricted employee shares and subscription to cash issues are treated as remuneration.

• Note 6: Refers to any remuneration that the director has received (in cash or in shares) in the last year for assuming the role of an employee (such as President, Vice President, managerial officer or other employees). The amount of employee remuneration proposed by the Board of Directors in the last year has been disclosed (where the amount could not be estimated, the actual amount paid in the last year was presented instead). Table 1-3 has also been completed for reference.

• Note 7: The disclosure includes all companies covered by the consolidated financial statements (including the Company), and represents total amount of remuneration paid by all companies above to the Company's directors.

Note 8: The amount of remuneration paid by the Company to each director has been disclosed in ranges.

• Note 9: The details represent the range of remuneration paid by the consolidated entity (including the Company) to each director.

• Note 10: Net income refers to the amount of profit shown in the latest financial reports of the consolidated/standalone entity; If International Financial Reporting Standards (“IFRS”) has been adopted, Net Income is the after-tax profit in the consolidated financial

• statement in the most recent years.

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Note 11: a. This field represents all forms of remuneration that directors received from the Company's invested businesses other than subsidiaries.

• b. For directors who received remuneration from invested businesses other than subsidiaries, amounts received from these invested businesses have been added to column I of the remuneration brackets table. In which case, column I will be renamed "All investees".

c. Remuneration refers to any returns, remuneration (including remuneration received as an employee, director and supervisor) and professional service fees which the director received for serving as directors, supervisors or managerial officers in invested businesses other than subsidiaries.

• The basis of remuneration disclosed above is different according to the basis of the Income Tax Act; hence the above table has been prepared solely for information disclosure, and not for tax purpose.

(2-1)Supervisors’ remuneration: The Company has adopted the Audit Committee, so this is not applicable.

(3-1) Remuneration to Presidents and Vice Presidents (individual disclosure by name and amount) Unit: NT$

	Name	Remuneration	(A) (Note 2)	Pensi	on (B)	Bonuses, special allowances, etc. (C) (Note 3)	Bonuses, special allowances, etc. (C) (Note 3)	Employee remune	Employee remune	ration (D) (Note 4)	ration (D) (Note 4)	The sum of A, B, C and D as a percentage of net income (%) (Note 8)	The sum of A, B, C and D as a percentage of net income (%) (Note 8)	Remuneration from the investees other than subsidiaries or parent company (Note 9)
		The Company	All companies included in the financial reports (Note 5)	The Company	All companies included in the financial reports (Note 5)	The Company	All companies included in the financial reports (Note 5)	The Company		All companies included in the financial reports(Note 5)		The Company	All companies included in the financial reports (Note 5)
								Cash amount	Stock amount	Cash amount	Stock amount
President	Hsu Zhen-Ji	3,132,500	3,132,500	0	0	3,537,900	3,537,900	520,500	0	520,500	0	0.80%	0.80%	0
Director and Special Assistant	Hsu Zhen-Xin	3,007,200	3,007,200	0	0	3,504,331	3,504,331	520,500	0	520,500	0	0.78%	0.78%	0
Vice President	Jiang Rui-Tang (Note 10)	2,263,520	2,263,520	108,000	108,000	3,489,557	3,489,557	520,500	0	520,500	0	0.71%	0.71%	0

Note 10: Mr. Jiang Rui-Tang retired on March 1, 2021.

Remuneration bracket table

Range of remunerations to the President and Vice Presidents	Name o	f President and Vice Presidents
	The Company (Note 6)	All companies included in the financial reports(Note 7)E
Below NT$1,000,000
NT$1,000,000 (inclusive) - NT$2,000,000 (exclusive)
NT$2,000,000 (inclusive) - NT$3,500,000 (exclusive)
NT$3,500,000 (inclusive) - NT$5,000,000 (exclusive)
NT$5,000,000 (inclusive) - NT$10,000,000 (exclusive)	3 Hsu Zhen-Ji,Hsu Zhen-Xin,JiangRui-Tang	3 Hsu Zhen-Ji,Hsu Zhen-Xin,JiangRui-Tang
NT$10,000,000 (inclusive) - NT$15,000,000 (exclusive)
NT$15,000,000 (inclusive) - NT$30,000,000 (exclusive)
NT$30,000,000 (inclusive) - NT$50,000,000 (exclusive)
NT$50,000,000 (inclusive) - NT$100,000,000 (exclusive)
Above NT$100,000,000
Total	3	3

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Note 1: The names of President and Vice Presidents are required to be presented separately; the amount of payments made can be presented in aggregate sums. Any directors who co-headed the President or Vice President positions are disclosed in this table and in Table (1-1) or (1-2) below. Note 2: Refers to salaries, allowances, and severance pay made to the President and Vice Presidents in the last year.

• Note 3: Refers to other compensations such as bonuses, incentives, travel allowances, special allowances, subsidies, accommodation, corporate vehicle or other in-kind benefits made to the President and Vice Presidents. Where housing, cars, vehicles, or personal allowances were granted, the nature and cost of assets, the rental rates (calculated based on actual or fair value), cost of petrol and other subsidies are also disclosed. Where personal drivers were allocated, please make a footnote disclosure explaining the amount of salaries made to drivers, but do not count them as part of the remuneration paid to the above benefits. Part of the salary expense was recognized according to IFRS2 - "Share-based Payment." Amounts including employee stock options, restricted employee shares and subscription to cash issues are treated as remuneration.

• Note 4: Represents the amount of employee remuneration provided for the President and Vice Presidents (in cash or in shares), which the Board of Directors has proposed as part of the most recent earnings appropriation (where the amount could not be estimated, a calculation was made based on last year's payout ratio). Table 1-3 has been prepared in addition to the above details. Net income refers to the amount of profit shown in the latest financial reports of the consolidated/standalone entity. If International Financial Reporting Standards (“IFRS”) has been adopted, Net Income is the after-tax profit in the consolidated financial statement in the most recent years.

Note 5: The disclosure includes all companies covered by the consolidated financial statements (including the Company), and represents total amount of remuneration paid by all companies above to the Company's President and Vice Presidents. Note 6: The amount of remuneration made by the Company to its President and Vice Presidents has been disclosed separately in ranges.

Note 7: The disclosure includes the sum of amounts paid by the consolidated entity (including the Company) to the Company's President and Vice Presidents; the names of President and Vice Presidents have been disclosed separately in ranges.

Note 8: Net income refers to the amount of profit shown in the latest financial reports of the consolidated/standalone entity. If International Financial Reporting Standards (“IFRS”) has been adopted, Net Income is the after-tax profit in the consolidated financial statement in the most recent years. Note 9: a. This field represents all forms of remuneration that the President and Vice Presidents received from the Company's invested businesses other than subsidiaries.

• b. For President and Vice Presidents who receive remuneration from invested businesses other than subsidiaries, the amount of remuneration from these invested businesses have been added to column E of the remuneration brackets table. In which case, Column E will be renamed "All investees".

• c. Remuneration refers to any returns, remuneration (including remunerations received as an employee, director and supervisor) and professional service fees which the Company's President and Vice Presidents received for serving as directors, supervisors, or managerial officers in invested businesses other than subsidiaries.

• The basis of remuneration disclosed above is different according to the basis of the Income Tax Act; hence the above table has been prepared solely for information disclosure, and not for tax purpose.

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• (4-1) Top 5 managers with the highest remuneration: Not applicable.

• (I) Names of managerial officers who received employee remuneration

			December 31,2020	December 31,2020
	Title (Note 1)	Name (Note 1)	Stock amount	Cash amount	Total	As a percentage of net income (%)
Managerial Officer	President	Hsu Zhen-Ji	0	NT$3,795,700	NT$3,795,700	0.42％
	Director and Special Assistant	Hsu Zhen-Xin
	Vice President	JiangRui-Tang
	Managerial Officer	Hsiao Zheng- Zhong
	Chief financial officer	Lin Shi-Zhe
	Managerial Officer	Huang Hui Xian
	Chief accounting officer	Shi Ming-De

Note 1: Names and titles have been disclosed separately, whereas the amount of remuneration has been disclosed in aggregate.

Note 2: Represents the amount of employee remuneration provided for the managerial officers (in cash or in shares), which the Board of Directors has proposed as part of the most recent earnings appropriation (where the amount could not be estimated, a calculation was made based on last year's payout ratio). Net income refers to the amount of profit shown in the latest financial reports of the consolidated/standalone entity. If International Financial Reporting Standards (“IFRS”) has been adopted, Net Income is the after-tax profit in the consolidated financial statement in the most recent years.

• Note 3: Pursuant to FSC Letter No. Tai-Tsai-Cheng-3-0920001301 dated March 27, 2003; the role of managerial officer covers the following positions: (1) President or other equivalent position.

• (2) Vice President or other equivalent position.

• (3) Assistant Vice President or other equivalent position.

• (4) Chief of Finance Department

• (5) Chief of Accounting Department

• (6) Others with the right to manage affairs and sign for the Company

Note 4: Directors, President and Vice Presidents who receive employee remuneration (in cash or in shares) shall have details disclosed in this table in addition to Table 1-2.

• (II) Analysis of remuneration paid to Directors, Supervisors, Presidents and Vice Presidents by the Company and all consolidated entities in the recent 2 years as a percentage of net income in the parent company only or individual financial statements and explanation on remuneration policy, standards and composition, procedures and the correlation with operation performance and future risks.

Name	Ratio of 2020 total remuneration to net income	Ratio of 2020 total remuneration to net income	Ratio of 2019 total remuneration to net income	Ratio of 2019 total remuneration to net income
	The Company	Al companies in consolidated reports	The Company	Al companies in consolidated reports
Director	4.65%	4.71%	6.87%	6.91%
Supervisor (On June 5, 2019, the Audit Committee was established to replace supervisors)	0%	0%	0.19%	0.25%
President and Vice Presidents	2.29%	2.29%	3.79%	3.79%

• (1) The fixed remuneration of the directors and supervisors is authorized to the Board of Directors to determine based on the degree of involvement and value of contribution in the Company's operations. The Company also takes references from peers.

• (2) The salary structures of Presidents and Vice Presidents are basic salary, job allowance, food allowance and bonuses are distributed based on the annual operating performance.

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IV. Implementation of Corporate Governance:

(I) Functionality of the Board of Directors

A total of 11 meetings (A) were held in the previous year (January 1, 2020 to March 19, 2021); below are the attendance records:

Title	Name (Note 1)	Actual Attendance B	Proxy Attendance	Percentage of actual (proxy) attendance (%) [B/A] (Note 1)	Remarks
Chairperson	Hsu Zhen-Tsai	11	0	100%
Director	Hsu Zhen-Ji	11	0	100%
Director	Hallmark Int'l Co., Ltd. Representative: Hsu Zhen-Xin	11	0	100%
Director	Ruifu Construction Co., Ltd. Representative: Hsu Zhen-Ji	11	0	100%
Director	Hohe Construction Co., Ltd. Representative: Lin Kun-Rong	11	0	100%
Director	He Min-Chuan	11	0	100%
Independent director	Xiao Sheng-Xian	11	0	100%
Independent director	Chen Zhu-Sheng	11	0	100%
Independent director	Wu Chun-Lai	11	0	100%
Other information required: I. For Board of Directors meetings that meet any of the following descriptions, state the date, session, the discussed agenda, independent directors' opinions and how the company has responded to such opinions: (I) Matters listed in Article 14-3 of the Securities and Exchange Act: 1. Motion of fees for appointed CPAs proposed on the 8th meeting of the 20th board on March 20, 2020. Content: The Company’s current appointed CPAs are Zhou Yin-Lai and Wu Xin-Liang of Baker Tilly Clock & Co. It was proposed to sign the appointment contract with Baker Tilly Clock & Co. The motion was approved by the Audit Committee through a discussion on March 20. The motion was passed without objections after the chair consulted with all attending directors and the independent directors expressed no other opinions. 2. Motion where the Company sold units in “La Bella Vita” project in Taichung to related parties discussed in the 11th meeting of the 20th board on July 17, 2020. Content: Ms. Hsu Mei-Chi intended to purchase the unit and the parking space No. 64 at No. 100, Huizhong Road, Section 1, Taichung City (the company holds 27.25%). Ms. Hsu is a relative within the 2nd degree kinship of the chairman and thus it is a transaction with related party. The case has been discussed and approved by the Audit Committee on July 17. The chair recused himself as he is a related party; Independent Director, Xiao Sheng-Xian, was appointed as the deputy chair. Three directors, Hsu Zhen-Ji, Hsu Zhen-Xin and Hsu Zhen-Tsai, recused themselves from discussion and voting due to conflict of interest, as required by laws. The remaining six directors unanimously approved. 3. Motion of hiring audit officers and consultant proposed on the 15th meeting of the 20th board on December 25, 2020. Contents: (1) The Company intends to appoint Mr. Ou Jia-bao as the new audit officer. He has served as the Company’s financial officer and advisor to the Board of Directors. He has sufficient academic and industrial experience and complies with the qualifications issued by the FSC; the former audit officer, Liu Wen-zheng, retired on December 31, 2020, and it was proposed to appoint him as a consultant. (2) It is proposed to re-appoint attorney Tsai Zhengting, Esq. from Chen, Tsai & Partners as legal counsel. The motion was approved by the Audit and Remuneration Committees on December 25. The motion was passed without objections after the chair consulted with all attending directors and the independent directors expressed no other opinions. 4. Motion of assigning a director to the subsidiary ( Ban Chien) proposed on the 16th meeting of the 20th board on January 29, 2021. Content: Due to the retirement of Vice President, Jiang Rui-Tang, it is intended to assign him as the director to the subsidiary (Ban Chien), as well as arrange him to be the Vice Chairperson of the subsidiary (Ban Chien) (Elected by the board of the subsidiary (Ban Chien)) The motion title was revised to “Motion of assigning a director to the subsidiary (Ban Chien) and his remuneration.” The motion was passed without objections after the chair consulted with all attending directors and the independent directors expressed no other opinions. 5. Motion of assigning the spokesperson and deputy spokesperson proposed on the 16th meeting of the 20th board on January 29, 2021. Content: Due to the retirement of Vice President, Jiang Rui-Tang, it is intended to assign Lin Shi-Zhe to replace him as the spokesperson, and Cheng Sheng-Yuan as the deputy spokesperson. The motion was passed without objections after the chair consulted with all attending directors and the independent directors expressed no other opinions. 6. Motion of fees for appointed CPAs proposed on the 17th meeting of the 20th board on March 19, 2021. Content: The Company’s current appointed CPAs of Baker TillyClock & Co. It wasproposed to sign the appointment contract with Baker TillyClock & Co. The

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motion was approved by the Audit Committee through a discussion on March 19. The motion was passed without objections after the chair consulted with all attending directors and the independent directors expressed no other opinions. 7. Motion of intended CPAs adjustment by Baker Tilly Clock & Co. proposed on the 17th meeting of the 20th board on March 19, 2021. Content: The Company’s current financial statement audit is commissioned to the CPAs, Zhou Yin-Lai and Wu Xin-Liang of Baker Tilly Clock & Co. Baker Tilly Clock & Co. informed in writing that due to the internal organizational changes and job deployment, it was intended to have Zhou Yin-Lai and Lai Yung-Ji to handle the certification of 2021 Q1 financial statements. The motion was approved by the Audit Committee through a discussion on March 19. The motion was passed without objections after the chair consulted with all attending directors and the independent directors expressed no other opinions. 8. Motion of amending part of the Company’s “Operational Procedures for Acquisition or Disposal of Assets” purposed on the 17th meeting of the 20th board on March 19, 2021. Content: To enhance the future operations, Article 5 and 7 of the “Operational Procedures for Acquisition or Disposal of Assets” seemed not sufficient, and thus the discussion was requested. The motion was passed without objections after the chair consulted with all attending directors and the independent directors expressed no other opinions. (II) Any other documented objections or qualified opinions raised by independent directors against board resolutions in relation to matters other than those described above: None II. For the implementation and state of directors' recusal for conflicts of interests, the directors' name, topic discussed, reasons for the required recusal, and participation in the voting process: 1. Motion that the Company sold units in ““La Bella Vita” project in Taichung to related parties was discussed in the 11th meeting of the 20th board on July 17, 2020. Ms. Hsu Mei-Chi intended to purchase the unit and the parking space No. 64 at No. 100, Huizhong Road, Section 1, Taichung City (the company holds 27.25%). Ms. Hsu is a relative within the 2nd degree kinship of the chairman and thus it is a transaction with related party. The case has been discussed and approved by the Audit Committee on July 17. The chair recused himself as he is a related party; Independent Director, Xiao Sheng-Xian, was appointed as the deputy chair. Three directors, Hsu Zhen-Ji, Hsu Zhen-Xin and Hsu Zhen-Tsai, recused themselves from discussion and voting due to conflict of interest, as required by laws. The remaining six directors unanimously approved. 2. Motion of donation to Formosan Rubber Charity Foundation was discussed in the 14th meeting of the 20th board on November 10, 2020. Content: The "Formosan Rubber Charity Foundation" established with the donation from the Company supports underprivileged students who insist studying every year. The Company has made excellent profits this year, and planned to donate NT$ 10 million to the "Formosan Rubber Charity Foundation". Four directors, Hsu Zhen-Ji, Hsu Zhen-Xin, Hsu Zhen-Tsai, and He Min-Chuan recused themselves from discussion and voting due to conflict of interest; other remaining directors unanimously have approved the motion without any dissenting opinions. III. For the disclosures of the cycles and periods, scopes, methods, and descriptions of the appraisal of the Board of Directors, please refer to (II) Evaluation of the Board of Directors IV. Measures the objectives to strengthen the functionality of the Board (e.g. establish an Audit Committee, enhance information transparency) and execution status in the current year and the recent years: The Company’s Board of Directors had 11 board meetings in the year. Important agendas are announced on the MOPS, making information public. Note 1: If a director is a juristic person, please disclose the name of the juristic person shareholder and their representative. Note 2: (1) If a director resigns before the end of the year, the resignation date shall be indicated in the Remarks field. The actual attendance rate (%) was calculated on the basis of the number of board meetings held during each director’s term and the number of meetings actually attended by that director. (2) If there is a re-election of a director before the end of the year, the new and old independent directors must be stated, and indicate if such independent director is old, new, or re-elected, as well as the re-election date. The percentage of actual (proxy) attendance (%) will be calculated based on the number of Board of Directors’ meetings held during active duty and the number of actual (proxy) attendance.

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(II) Evaluation of the Board of Directors

Evaluation cycles	Evaluation periods	Evaluation scope	Evaluation method		Evaluation content	Evaluation content
Once a year	January 1, 2020 to December 31, 2020	Including the performance appraisals of all the board of directors and individual board member.	1. Including the self-assessment of the operation of the Board and self-assessment of board members. Each assessment item (indicator) may be ranked as “Excellent (5), Good (4), Fair (3), Poor (2), and Very Poor (1).” 2. The Management Department distributed the “Questionnaire for the Board of Directors’ Performance Self- Assessment” and “Questionnaire for the Board Member’s Performance Self- Assessment” to each director; afterwards, the Management Department collect the questionnaires for statistics.		Evaluation is described as the following: 1. Board of Directors’ Performance Self-Assessment:
					Self-Assessment 5 Major Aspect	Questions	Score
					A. Participation in the operation of the company;	12 questions	26.5
					B. Improvement of the quality of the board of directors' decision making;	12 questions	26.5
					C. Composition and structure of the board of directors;	7 questions	14.7
					D. Election and continuing education of the directors;and	7 questions	14.4
					E. Internal control.	7questions	14.2
					Total	45questions	96.3
					The performance appraisals of t 45 indicators. The score was 96 well, to meet the requirements 2. Board Member’s Performance	he Board of Directors includ .3, demonstrating that the B of corporate governance. Self-Assessment:
					Six Major Aspect	Questions	Score
					A. Alignment of the goals and mission of the company;	3 questions	12.8
					B. Awareness of the duties of a director;	3 questions	12.8
					C. Participation in the operation of the company;	8 questions	33.7
					D. Management of internal relationship and communication;	3 questions	13.0
					E. The director's professionalism and continuing education	3 questions	13.0
					F. Internal control.	3questions	12.1
					Total	23questions	97.4

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• (III) Operation and key tasks of the Audit Committee Deliberation of the Audit Committee mainly include:

• 1.Fair presentation of the financial statements.

• Assessment of the effectiveness of the internal control system.

• 3.Transactions involving material asset or derivatives trading.

• 4.Material monetary loans, endorsements, or provision of guarantees.

• 5.The offering, issuance, or private placement of any equity-type securities.

• 6.Compliance with the related laws and regulations.

• 7.Matters bearing on the personal interest of a director or supervisor.

• 8.Control of the existing or potential risks.

• 9.Appointment (dismissal) of CPAs and their independence and performance.

10.The hiring, dismissal or remuneration of an attesting certified public accountant. 11.The appointment or dismissal of a financial, accounting, or internal auditing officer. Reviewing financial report.

The Company’s 2020 business report, financial statements and the motion for earnings distribution; among these, the financial statements have been audited by CPAs of Baker Tilly, and the audit report has been submitted. The aforesaid business report, financial statements and the motion for earnings distribution have been reviewed by the Audit Committee and deemed no inconsistency.

A total of 7 Audit Committee meetings (A) were held in the most recent year (January 1, 2020 to March 19, 2021); independent directors' attendance records are summarized below:

	Title		Name	Actual attendance (B)	Proxy Attendance	Actual attendance (%) (B/A) (Note)	Actual attendance (%) (B/A) (Note)	Actual attendance (%) (B/A) (Note)	Remarks
	Independent direct	or a	Xiao Sheng-Xian	7	0	100%
	Independent direct	or b	Chen Zhu-Sheng	7	0	100%
	Independent direct	or c	Wu Chun-Lai	7	0	100%
	Other information I.Operation of the
							The matters	Resolution(s) not passed by
	Audit Committee						referred to in	the Audit Committee but
		Motion content and follow-up					Article 14-5 of	receiving the consent of two
							the Securities	thirds of the Board of
							and Exchange	Directors
							Act
	1st Term 5th Meeting March 20,2020	1. Motion of planning to enforce the 24th repurchase of the Company’s outstanding shares					v
		2. Motion of the Company’s 2019 business report and financial report.					v
		3.Motionof the Company’s2019 earnings distribution.					v
		4. Motion of appointed CPAs’ fees.					v
		5.Motion of 2019internal control system statement.					v
		Resolutions of the Audit Committee(March 20,2020): approved byall members of the Audit Committee.
		The Company’streatment totheAuditCommittee's opinions:approved byall attending directors.
	1st Term 6th Meeting May 13,2020	1. Motion of the 2020 firstquarter of the Company’s consolidated financial report.					v
		2.Motionof amendingthe“ManagerialOperational Procedures of FinancialStatementsPreparation Process”
		Resolutions of the AuditCommittee(May13,2020):approved byall members of the AuditCommittee.
		The Company’s treatment to the Audit Committee's opinions: approved byall attendingdirectors.
	1st Term 7th Meeting July 17, 2020	1. The Companydisposed 23F-7,No. 100,HueizhongRd.,Sec. 1,TaichungCityandparkinglot No. 64 to a relatedparty.					v
		2. Established the “Operational Procedures for BuyingBack the Company’s Shares”
		Resolutions of the Audit Committee(July17,2020): approved byall members of the Audit Committee.
		The Company’streatment totheAuditCommittee's opinions:approved byall attending directors.
							The matters	Resolution(s) not passed by
	Audit Committee						referred to in	the Audit Committee but
		Motion content and follow-up					Article 14-5 of	receiving the consent of two
							the Securities	thirds of the Board of
							and Exchange	Directors
							Act
	1st Term 8th Meeting August 12, 2020	1. Motion of the 2020Q2 consolidated financial report.					v
		Resolutions of the Audit Committee(August 11,2020): approved byall members of the Audit Committee.
		The Company’s treatment to the Audit Committee's opinions: approved byall attendingdirectors.
	1st Term 9th Meeting November 10, 2020	1.Motion of the 2020 Q3 consolidated financial report.					v	v
		2.Motion of donation to Formosan Rubber CharityFoundation					v
		Resolutions of the Audit Committee(November 10,2020): approved byall members of the Audit Committee.
		The Company’streatment tothe AuditCommittee's opinions:approved byall attendingdirectors.
	1st Term 10th Meeting December 25, ~~2~~020	1.Motion of hiringthe audit officer					v
		2. Motion of 2021 internal control system and auditplans(subsidiaries included)					v
		Resolutions of the AuditCommittee(December 25,2020):approved byall members of the AuditCommittee.
		The Company’s treatment to the Audit Committee's opinions: approved by all attending directors.
	1st Term 11th Meeting March 19, 2021	1. Motion of the Company’s 2020 business report and financial report.					v
		2.Motionof the Company’s2020 earnings distribution.					v
		3. Motion of appointed CPAs’ fees.					v
		4. Motion of that Baker TillyClock & Co intended to adjust the CPAs.					v
		5.Motion of 2020internal control system statement.					v
		Resolutions of the Audit Committee(March 19,2021): approved byall members of the Audit Committee.
		The Company’streatment totheAuditCommittee's opinions:approved byall attending directors.

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	and results): (1) Policy report of the communication between independent directors and internal auditing offi	and results): (1) Policy report of the communication between independent directors and internal auditing offi	and results): (1) Policy report of the communication between independent directors and internal auditing offi	and results): (1) Policy report of the communication between independent directors and internal auditing offi	cers Communication result e Audit Office has revised the audit execution according to the commendations of independent directors. e Audit Office will gradually complete the recommendations of independent rectors, to revise the audit execution. e Audit Office will gradually complete the recommendations of independent rectors, to revise the audit execution. e Audit Office has revised the audit execution according to the commendations of independent directors. e Audit Office has revised the audit execution according to the commendations of independent directors. Communication result 1. The 2019 financial statements were approved by the Audit Committee and submitted to the Board of Directors for approval, and announced and reported to the competent authority as scheduled. 2. Noted, and no other comments. 1. Noted, and no other comments. 2. Discussion in the Board meeting is required. 3. Be concise and present the key points.
	Date	Communicated matter			Communication result
	May 13, 2020	Report of the execution of audit operation during March to April, 2020 Recommendations of independent directors as below: Concisely and clearly present the execution audit item, random inspection (e.g. referringto the workingdraft),for simplifythe review.		Th re	e Audit Office has revised the audit execution according to the commendations of independent directors.
	July 17, 2020	Report of the execution of audit operation during May to June, 2020 Recommendations of independent directors as below: (1)Understand the true status based on the actual inventories, and formulate or amend the Company's internal audit rules pursuant the new regulations, for strengthening of audit purposes. (2) The relevant details of the audit execution results are presented in a concise and bulletin format for more efficient review. (3) The Audit Office may add recommendations or improvements to the audit results in the report. (4) If any error is audited, it may be listed as a future tracking improvement item. (5) It is recommended to make good use of e-mail in the future to deliver the relevant audit execution result documents. (6) It is recommended to add one more auditor to strengthen the staffing of the Audit Office.		Th di	e Audit Office will gradually complete the recommendations of independent rectors, to revise the audit execution.
	August 11, 2020	Report of the execution of audit operation during July-August, 2020 Recommendations of independent directors as below: (1) Inquired whether to start the plan for adding an auditor and the progress. (2) It is recommended to update the Company's internal audit rules (to cope with the update of laws and regulations, and the issues that need to be improved in the actual audit) to facilitate the implementation of the audit. (3) Added random inspection details to the audit execution report. (4) The audit execution report shall replace "Supervisor" with "Audit Committee" and shall be consistent with the version submitted to the Board of Directors.		Th di	e Audit Office will gradually complete the recommendations of independent rectors, to revise the audit execution.
	November 10, 2020	Report of the execution of audit operation during September to October, 2020 Recommendations of independent directors as below: The audit results listed in the ninth column of the second table of the Audit Office’s report must list all the random inspection items.		Th re	e Audit Office has revised the audit execution according to the commendations of independent directors.
	December 25,2020	I. II.	Report of the execution of audit operation during November to December, 2020 Recommendations of independent directors: none Motion of 2021 internal audit plans (subsidiaries included) Recommendations of independent directors as below: (1) It is recommended that the headline of the motion and the description should be revised and improved. (2) It is recommended to update the format of the annual internal audit plan to the latest version of the FSC.	Th re	e Audit Office has revised the audit execution according to the commendations of independent directors.
	(2) Policy rep	ort of	the communication between independent directors and CPAs
	Date		Communicated matter		Communication result
	March 20, 2020		1. Explanation of the 2019 parent company-only and consolidated financial statements. 2. Report of CPAs’ independence.		1. The 2019 financial statements were approved by the Audit Committee and submitted to the Board of Directors for approval, and announced and reported to the competent authority as scheduled. 2. Noted, and no other comments.
	June 23, 2020		1. Reminders of key points of the recent law updates. 2. Discussion of the proposal for the internal control system and operational procedure update. 3. Discuss the presentation and writing approach of the internal audit report.		1. Noted, and no other comments. 2. Discussion in the Board meeting is required. 3. Be concise and present the key points.

Note:

• ＊ If an independent director resigns before the end of the year, the resignation date shall be indicated in the Remarks field. The actual attendance rate (%) was calculated on the basis of the number of board meetings held during the term of the Audit Committee and the number of meetings actually attended during active duty.

• ＊ If there is a re-election of an independent director before the end of the year, the new and old independent directors must be stated, and indicate if such independent director is old, new, or re-elected, as well as the re-election date. The percentage of actual (proxy) attendance (%) will be calculated based on the number of Audit Committee meetings held during active duty and the number of actual (proxy) attendance.

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(IV) Corporate governance execution status and deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies"

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies" and Reasons
	Yes	No	Summary
I. Whether The Company establishes and discloses its rules of corporate governance in accordance with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies?			The Company has passed the “Rules of Corporate Governance” on the 8th session of the 20th Board held on March 20, 2020 and it has been disclosed on the Company’s website.	There are no deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies".
II. Equity structure and shareholders’ equity (I) Will the Company have the internal procedures regulated to handle shareholders’ proposals, doubts, disputes, and litigation matters; also, have the procedures implemented accordingly? (II) Will the Company possess the list of the Company’s major shareholders and the list of the ultimate controllers of the major shareholders? (III) Will the Company establish and implement the risk control and firewall mechanisms with the related parties? (IV) Will the Company set up internal norms to prohibit insiders from utilizing the undisclosed information to trade securities?	   		(I) The Company has established stock personnel and legal affairs personnel to handle shareholders’ proposals, disputes, and litigation matters, and these matters are enforced according to procedures. (II) The Company has established stock affairs unit and stock affairs agency that can get hold of the list of the ultimate controllers of the major shareholders. (III) The Company has established internal rules and internal control system of relevant legal mechanism in compliance with the laws and regulations and has enforced the rules accordingly. Aside from supervising important subsidiaries to establish internal control system as required by Article 3 of the "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies", the Company also reviews its and the important subsidiaries’ internal and external changes to thoroughly enforce risk control and firewall mechanism. (IV) In compliance with the Company’s “Procedures for Handling Material Inside Information” to regulate material inside information and disclosure mechanism to avoid improper disclosure and ensure that the information disclosed by the Company is consistent and positive. Prevention of insider trading will also be strengthened.	(I) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (II) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (III) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (IV) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies".
III. The Composition of the Board of Directors and Their Duties (I) Has the Board devised and implemented policies to ensure the diversity of its members?			(I) The Company’s Board of Directors currently has 9 directors and has adopted the nomination system. As the Board of Directors nominates candidates, aside from basic legal qualifications, they are also required to have knowledge and professional experience in terms of relevant business,law and industryin order to reach	(I) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies".

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies" and Reasons
	Yes	No	Summary
(II) Apart from the Remuneration Committee and Audit Committee, has the company assembled other functional committees at its own discretion? (III) As the company established the Regulations Governing the Board Performance Evaluation and its evaluation methods, and does the company perform a regular performance evaluation each year and submit the results of performance evaluations to the Board of Directors and use them as reference in determining compensation for individual directors, their nomination, and additional office terms? (IV) Is an external auditor's independence assessed on a regular basis?	  		the goal of the implementation of diversified board members. (II) The Company has established a Remuneration Committee, Audit Committee, and Employee Welfare Committee . Other functional committees will be established as required by the Company’s regulations or actual needs. (III) The company established the Regulations Governing the Board Performance Evaluation and its evaluation methods in the 8th meeting of Board of directors, 20th Term on March 20, 2020. The external board performance evaluation shall be executed by an external professional independent institution or an external team of scholars and experts once every three years. The outcomes of the performance evaluation is submitted to the meeting of Board of directors in the first quarter of the next year. In addition, it periodically review the performance review and remuneration policy, system, standards, and structure for directors, supervisors and executive officers, and the recommendations are submitted to the meeting of Board of directors for discussion. (IV) The Company’s management department performs a self- evaluation on the independence of CPAs once a year. The result has been reported to the Audit Committee on November 10, 2020, and was reviewed and passed by the Board of Directors on November 10, 2020. According to the evaluation performed by the Company's management department, CPAs Zhou Yin-Lai and Wu Xin-Liang of Baker Tilly Clock & Co. both met the Company's independence evaluation standards and are qualified to serve as the Company’s CPAs. For evaluation details, please refer to the annual report to shareholders at p.38 (V) - CPAs’ Independence Evaluation.	(II) There are no deviations from "Corporate Governance Best- PracticePrinciples for TWSE/TPEx Listed Companies". (III) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (IV) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies".
IV. Is the company a TWSE/TPEX listed company, and has the company designated an appropriate number of personnel that specialize (or are involved) in corporate governance affairs (including but not limited to providing directors/supervisors with the information needed and assist directors and			The Company has not appointed a corporate governance manager, but there is dedicated personnel who is in charge of matters in relation to the Company’s corporate governance, which include: (I) Matters with regards to providing information needed by directors and independent directors,convention of board meetings and	There are no deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies".

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies" and Reasons
	Yes	No	Summary
supervisors in complying with the laws and regulations to perform their duties, convention of board meetings and shareholders meetings, preparation of board meeting and shareholders meeting minutes, etc)?			shareholders meetings, corporate registration and changes, preparation of board meeting and shareholders meeting minutes. (II) Making proposals for company system and organizational structure to improve the independence of the Board as well as the enforcement of the transparency of the Company, law compliance and internal audit and internal control.
V. Does the Company establish mechanisms for communicating with stakeholders (including but not limited to stockholders, employees, customers and suppliers), and a stakeholder site on the company website to appropriately respond to material CSR topics theyconcern about?			Aside from appointing dedicated personnel to handle stakeholder channels, the Company has also set pup a stakeholder section on its website and responses accordingly to issues concerning stakeholders in terms of corporate social responsibility.	There are no deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies".
VI. Has the company appointed a professional shareholders service agent to process the affairs related to shareholders’ meetings?			The Company has appointed Stock Agency Department of Taishin International Bank as stock agency to handle stock related affairs.	There are no deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies".
VII. Information disclosure (I) Does the Company have a website setup and the financial business and corporate governance information disclosed? (II) Has the Company adopted other information disclosure methods (such as, establishing an English website, designating a responsible person for collecting and disclosing information of the Company, substantiating the spokesman system, placing the juristic person seminar program on the Company’s website, etc.)? (III) Has the company published and reported its annual financial report within two months after the end of a fiscal year, and published and reported its financial reports for the first, second, and third quarters, as well as its operating status for each month before the specified deadline.	 		(I) The Company has set up a website to disclose information in relation to the Company’s financial matters and businesses and is updated on a regular basis. The Company’s website is www.frg.com.tw. (II) The Company has a spokesperson and an acting spokesperson and has established a website in both traditional Chinese and English. A dedicated personnel has been assigned to collect company information and information disclosure. There is related company introduction, production introduction and its latest news on the Company's website (III) The Company has published and reported financial reports and operating status for each month based on the regulations specified in the “List of Matters Required to Be Handled by Issuers of Listed Securities”; however, the Company has not been publicly announced and reported the financial report within two months after the end of the fiscalyear.	(I) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (II) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (III) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies".
VIII. Are there any other important information (including but not limited to the interests of employees, employee care, investor relations,supplier relations,the rights of stakeholders,the			(I) Employees’ rights and benefits: The Company has reasonable salary system in accordance with the Labor Standards Act to protect the legal rights of employees.	(I) There are no deviations from "Corporate Governance Best- Practice Principles for

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies" and Reasons
	Yes	No	Summary
advanced study of directors and supervisors, the implementation of risk management policies and risk measurement standards, the execution of customer policy, the purchase of liability insurance for the Company’s directors and supervisors) that are helpful in understanding the corporate governance operation of the Company?			(II) Employees’ care: The Company’s various management rules are formulated based on the on the interests of employees and also purchases various types of insurance for employees such as health, nursing, employment, work injury and public welfare. The Company organizes annual health check-ups to protect employees. (III) Investor relations: The Company has a spokesperson and an acting spokesperson who are responsible for the Company’s external communication; dedicated personnel has also been set up to disclose the Company's information on MOPs as required by the law. (IV) Supplier relations: The Company has exceptional supply relations with suppliers, reaching overall production cost optimization. (V) Rights of stakeholders: The Company maintains positive communication channels with stakeholders and respects and protects their legal rights. The Company also has a spokesperson and acting spokesperson system to handle issues and suggestions with regards to shareholders. (VI) Further training for directors: The Company’s directors have participated in further training courses as required by the law. In the future, the Company will arrange suitable further training courses for directors in the future on an unscheduled basis. (VII)Implementation of risk management policy and risk assessment standards: Various internal rules internal control system have been formulated as required by the law, and the Company conducts various risk management and evaluation. The internal audit unit carries out inspection of the implementation of the internal control system on a regular basis or on an unscheduled basis. (VIII)Implementation of customer service policy: The Company has exceptional relations with customers and provides customer service based on various internal control measures. The "customer satisfaction" is treated as an important part of the quality policy. (IX) The Company purchases liability insurance for directors.	TWSE/TPEx Listed Companies". (II) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (III) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (IV) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (V) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (VI) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (VII)There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies". (VIII)There are no deviations from "Corporate Governance Best-

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies" and Reasons
	Yes	No	Summary
				Practice Principles for TWSE/TPEx Listed Companies". (IX) There are no deviations from "Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies".
IX. Please explain the improvements made, based on the latest Corporate Governance Evaluation results published by TWSE Corporate Governance Center, and propose enhancement measures for any issues that are yet to be rectified: Based on 2020 Corporate governance evaluation results: 1. Has the Company established the diversification policy for the Board member, and disclosed the specific management objective and implementation of the diversification policy on the website and MOPS? The Company is expected to establish the diversification policy for the Board member, and discloses the specific management objective and implementation of the diversification policy on the website and MOPS from 2021. 2. Has the Company appointed the corporate governance officer to take charge of of corporate governance affairs, and describe his/her function scope and continuing education on the website and MOPS from 2021? The Company is expected to appoint the corporate governance officer to take charge of of corporate governance affairs, and describe his/her function scope and continuingeducation on the website and MOPS from 2021.

• IX. Please explain the improvements made, based on the latest Corporate Governance Evaluation results published by TWSE Corporate Governance Center, and propose enhancement measures for any issues that are yet to be rectified: Based on 2020 Corporate governance evaluation results:

• Has the Company established the diversification policy for the Board member, and disclosed the specific management objective and implementation of the diversification policy on the website and MOPS? The Company is expected to establish the diversification policy for the Board member, and discloses the specific management objective and implementation of the diversification policy on the website and MOPS from 2021.

• Has the Company appointed the corporate governance officer to take charge of of corporate governance affairs, and describe his/her function scope and continuing education on the website and MOPS from 2021? The Company is expected to appoint the corporate governance officer to take charge of of corporate governance affairs, and describe his/her function scope and continuing education on the website and MOPS from 2021.

Note: Regardless of clicking “yes” or “no”, it should be explained in the summary field.

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(V) Independence evaluation of CPAs

(V)Independence evaluation of CPAs
Evaluation Item	Evaluation result	Whether or not they meet the independence criteria
1. Whether the CPAs have directly or indirectly significant financial interest related to the Company.	No	Yes
2. Whether the CPAs are involved in any financing or guarantee arrangement with the Company or its directors	No	Yes
3. Whether the accountant has a close business relationship and potential employment relationship with the company	No	Yes
4. Whether the CPAs and audit team members currently or previously assumed a role as the Company's director, managerial officer, or any position that may significantly affect the audit in the last twoyears	No	Yes
5. Does the CPAs provide the Company with non-audit service items that may directly affect the audit tasks?	No	Yes
6. Does the accountant intermediary the stocks or other securities issued by the Company?	No	Yes
7. Does the CPAs act as the defender of the Company or coordinate conflicts with other third parties on behalf of the Company?	No	Yes
8. Whether the CPAs are related to the Company's directors, managerial officer, or any person whose position is significant to the audit task	No	Yes
9. Have the CPAs provide audit services for more than seven consecutive years	No	Yes

• Note 1:When the result of the above evaluation is “yes”, an explanation must be given as consideration for the impact of their independence and if it is necessary to replace the CPAs.

• Note 2: (1)As reference to the Sarbanes–Oxley Act, and in order to enforce corporate governance mechanism, the Company may not hire audit CPAs for non-audit services at the same time (such as bookkeeping services, evaluation services or financing services).

• (2) In order to prevent long-term relationship with the CPAs for providing services to the Company, and the CPAs have become overfamiliar with the Company's management and further lose their independence, the TWSE has clearly stipulated that CPAs must be replaced on a fixed period (7 years). Before 7 years of providing service to the same client is due, the CPAs must be changed from time to time.

• Note 3. After evaluation, it is deemed that the non-audit services Baker Tilly Clock & Co. provided, do not affect the independence of the CPAs in terms of nature and amount. The related non-audit services are as follows:

Non-audit services 1. Review of the annual shareholders’ meeting handbook and shareholders’ annual report 2. The English version of the consolidated financial report ofyear 2019	Amount
	NT$30,000
	NT$160,000

• (VI) The Composition, Duties and Operation of the Remuneration Committee

• The Company has established the Remuneration Committee after passing the formulation of the “Remuneration Committee Charter” by the Board of Directors. The main duties of the Remuneration Committee are as follows and should submit suggestions to the Board of Directors for discussion.

  • (1) Establish and regularly review policies, system, standards and structures for performance evaluation and remuneration for directors and managerial officers.

  • (2) Regularly assess and set up the salary remuneration for directors and managerial officers.

• The Company's has appointed Xiao Sheng-Xian, Chen Zhu-Sheng and Wu Chun-Lai as members of the Company’s 4th Remuneration Committee on the first meeting of the 20th Board of Directors’ meeting (June 14, 2019). It was proposed that the term of appointment should be June 14, 2019 to June 4, 2022, same as this board.

• A total of six meetings (A) were held in the Company’s 4th Remuneration Committee during March 20, 2020 and March 19, 2021. It has helped the Board of Directors to enforce and evaluate the Company's overall remuneration policies and has made suggestions to the Board of Directors.

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Information on Remuneration Committee members

Title (Note 1)	Conditions Name	Meet the Following Professional Qualification Requirements, together with at Least Five Years Work Experience	Meet the Following Professional Qualification Requirements, together with at Least Five Years Work Experience					Independence Crite	Independence Crite	ria (Note	2)				Number of Other Public Companies in Which the Individual is Concurrently Serving as a Member of the Remuneration Committee	Remarks
		Lecturer or above in commerce, law, finance, accounting or subjects required by the business of the Company in public or private colleges or universities	Judge, public prosecutor, attorney-at-law, certified public accountant, or other professional or technical specialist who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Company.	Required working experience in commerce, law, finance, accounting or other fields required by the business of the Company	1	2	3	4	5	6	7	8	9	10
Convener	Chen Zhu- Sheng														0	None
Member	Xiao Sheng- Xian														1	None
Member	Wu Chun-Lai														0	None

Note 1: Please fill in director, independent director or other in the “title”.

Note 2: A “  ” is placed in the box if the member met the following conditions at any time during active duty and two years prior to the date elected.

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

• (2) Not a director or supervisor of its affiliates of the Company. (However, this restriction does not apply in cases where the person is an independent director of the Company, its parent or subsidiary or a subsidiary of the same parent established in pursuant to this law or local laws).

• (3) Not a natural-person shareholder or holder of shares, together with those held by a spouse, minor children, or held by the person under other names, in an aggregate amount of one percent or more of the total number of issued shares of the company or ranking within the top 10 in holdings.

• (4) Not a managerial officer listed in criteria (1) or a spouse, relative of second degree, or direct kin of third degree or closer to persons not qualified for criteria (2) and (3).

• (5) Not a director, supervisor, or employee of a juristic-person shareholder that directly holds five percent or more of the total number of issued shares of the company or of a juristic-person shareholder that ranks among the top five in shareholdings according to Paragraph 1 or Paragraph 2 Article 27 of the Company Act (the same does not apply, however, in cases where the person is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary).

• (6) Not a director, supervisor, or employee, holding a majority of the company's director seats or voting shares and those of any other company are controlled by the same person (the same does not apply, however, in cases where the person is an independent director of the company or its parent company, any subsidiary, as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary).

• (7) Not the same person with the company’s director, general manager, or person of an equivalent post or of a specified company or institution’s director, supervisor, or officer (the same does not apply, however, in cases where the person is an independent director of the company or its parent company, any subsidiary, as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary).

• (8) Not a director, supervisor, manager, or shareholder holding more than 5% of a specified company or institution that has a financial or business relationships with the company (the same does not apply, to certain companies or institutions holding more than 20% of the total issued shares of the Company, but no more than 50% and to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at the Company and its parent or subsidiary or a subsidiary of the same parent).

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

• (10) Not under any circumstances as stipulated in Article 30 of Company Law.

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Information on the Operation of the Remuneration Committee

I. The Company's Remuneration Committee is comprised of 3 members.

II. The term of the members: June 14, 2019 to June 4, 2022. From March 20, 2020 to March 19, 2021, a total of six (A) meetings were held by the remuneration committed. The qualification of members and their attendance are as follows:

Title	Name	Actual attendance (B)	Proxy Attendance	Actual attendance (%) (B/A) (Note)	Remarks
Convener	Chen Zhu-Sheng	6	0	100%	None
Member	Xiao Sheng-Xian	6	0	100%	None
Member	Wu Chun-Lai	6	0	100%	None
Other information required: I. If the Board of Directors declines to adopt or modify a recommendation of the Remuneration Committee, the date, session, topic discussed and the resolution of the Board meeting and handling of the resolution of the Remuneration Committee shall be specified (if the compensation package approved by the Board is better than the recommendation made by the committee, please specify the discrepancy and its reason): None. II. As to the resolution of the Remuneration Committee, if a member expresses any objection or reservation, either by recorded statement or in writing, the date, session and topic discussed of the committee meeting, all members' opinions and handling of members' opinions shall be specified: None.

Note: (1) If a member of the Remuneration Committee resigns before the end of the year, the resignation date shall be indicated in the Remarks field. The actual attendance rate

• (%) was calculated on the basis of the number of board meetings held during the term of the Remuneration Committee and the number of meetings actually attended during active duty.

• (2) If there is a re-election of the Remuneration Committee before the end of the year, the new and old members of the Remuneration Committee must be stated, and indicate if such member is old, new, or re-elected, as well as the re-election date. The percentage of actual (proxy) attendance (%) will be calculated based on the number of Remuneration Committee meetings held during active duty and the number of actual (proxy) attendance.

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III. Other information required:

1. Motion contents and resolution results of the Remuneration Committee

Meeting date of the Remuneration Committee	Motion content	Resolution result	The Company’s handling of the Remuneration Committee’s opinions
The 3rd meeting of the 4th Remuneration Committee (March 20, 2020)	1. Motion of 2019 remuneration to the Company’s employees, directors and supervisors.	1. The motion has been approved by all attending members without any dissenting opinion.	It was submitted to the Board of Directors’ meeting for approval.
The 4th meeting of the 4th Remuneration Committee (May 13, 2020)	1. Motion of the 2020 Dragon Boat Festival bonus for the Company and the subsidiary Ban Chien Development. 2. Motion of the distribution of 2019 remuneration to directors and supervisors. 3. Motion of the distribution of 2019 remuneration to employees.	1. The motion has been approved by all attending members without any dissenting opinion. 2. The motion has been approved by all attending members without any dissenting opinion. 3. The motion has been approved by all attending members without any dissenting opinion.	It was submitted to the Board of Directors’ meeting for approval.
The 5th meeting of the 4th Remuneration Committee (July17, 2020)	1. Motion of semi-annual performance settlement and rewards and punishments for the Production Department turning deficit into profit.	1. After the discussion of all attending members, the proposal 2 was intended, and submitted to the Board of directors for resolution	It was submitted to the Board of Directors’ meeting, and the proposal 1 was approved.
The 6th meeting of the 4th Remuneration Committee (December 22, 2020)	1. Motion of the Company's 2020 year-end bonus. 2. Motion of 2020 year-end bonus for the Company's subsidiary Ban Chien Development Co., Ltd. . 3. Motion of remuneration for the Company’s managerial officers for 2021 4. Motion of hiring and remuneration for the audit officer and consultant for 2021.	1. The motion has been approved by all attending directors without any dissenting opinion. 2. The motion has been approved by all attending directors without any dissenting opinion. 3. The motion has been approved by all attending directors without any dissenting opinion. 4. The motion has been approved by all attending directors without anydissentingopinion.	It was submitted to the Board of Directors’ meeting for approval.
The 7th meeting of the 4th Remuneration Committee (January 29, 2021)	1. Motion of assigning a director to the subsidiary (Ban Chien) and his remuneration. 2. Motion of promoting the Section head of Construction Department, Cheng Sheng-Yuan to associate vice president. 3. Motion of annual performance settlement and rewards and punishments for the Production Department 4. The performance bonus for the financial asset investment project of Ban Chien.	1. The motion has been approved by all attending directors without any dissenting opinion. 2. The motion has been approved by all attending directors without any dissenting opinion. 3. The motion has been approved by all attending directors without any dissenting opinion. 4. The motion has been approved by all attending directors without anydissentingopinion.	It was submitted to the Board of Directors’ meeting for approval.
The 8th meeting of the 4th Remuneration Committee (March 19, 2021)	1. Motion of distributing remunerations to directors and employees for 2020 2. Motion of the 2021 Dragon Boat Festival bonus for the Companyand the	1. The motion has been approved by all attending directors without any dissenting opinion. 2. The motion has been approved byall attending	It was submitted to the Board of Directors’ meeting for approval.

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Meeting date of the Remuneration Committee	Motion content	Resolution result	The Company’s handling of the Remuneration Committee’s opinions
	subsidiary (Banjian Development). 3. Motion of amendments to part of the provisions of the Company's Remuneration Committee Charter”. 4. Motion of performance, reward and punishment for each department and project for 2021.	directors without any dissenting opinion. 3. The motion has been approved by all attending directors without any dissenting opinion. 4. The motion has been approved by all attending directors without anydissentingopinion.

1. If the Board of Directors declines to adopt or modify a recommendation of the Remuneration Committee, the date, session, topic discussed and the resolution of the Board meeting and handling of the resolution of the Remuneration Committee shall be specified (if the compensation package approved by the Board is better than the recommendation made by the committee, please specify the discrepancy and its reason): None.

2. As to the resolution of the Remuneration Committee, if a member expresses any objection or reservation, either by recorded statement or in writing, the date, session and topic discussed of the committee meeting, all members' opinions and handling of members' opinions shall be specified: None.

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(VII) The state of the company's performance of social responsibilities, any deviation and causes of deviation from Corporate Social Responsibility Best Practice Principles for TWSE/TPEX Listed Companies:

for TWSE/TPEX Listed Companies:
Evaluation Item	Implementation Status (Note 1)			Differences from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies and the reasons
	Yes	No	Summary (Note 2)
I. Has the company performed risk assessments on environmental, social, and corporate issues in relation to the Company’s operations according to material principles, and formulated relevant risk management policies or strategies? (Note 3)			Although the Company has not performed risk assessments on environmental, social, and corporate issues in relation to the Company’s operations according to material principles, and formulated relevant risk management policies or strategies, the Company is doing its utmost for environmental protection responsibility, community improvement, creating social befits, protecting consumers’ rights, promoting the harmonious relationship between labor and management as well as supervising the operation of subsidiaries.	Formulation of applicable policies or strategies will be discussed.
II. Does the company have a specific (or part-time) unit set up to promote corporate social responsibility, have the management been authorized by the Board of Directors to handle matters and report the processing results to the Board of Directors?			The Company has yet to set a dedicated unit, it is mainly handled by the management department.	Establishment of specific (or part-time) unit to promote corporate social responsibility will be discussed.
III. Environmental Issues (I) Does the company have an appropriate environmental management system established in accordance with its industrial character? (II) Is the company committed to enhance the utilization efficiency of resources and use renewable materials that are with low impact on the environmental? (III) Has the company assessed the potential risks and opportunities for business operations now and the future regarding climate change and will it adopt response measures relating to climate issues?	  	(	I) In order to reduce the impact to the environment, the Company tries its best to use non-toxic raw materials and is dedicated to the R&D of eco-friendly products. (II) The internal of the Company is dedicated to waste classification, and has set goals for reducing waste as well as recovering resources that can be reused, making a contribution to environmental protection and energy saving and carbon reduction. (III) The global climate has changed dramatically due to the greenhouse effect and its impact scope poses potential risk for a corporate sustainable	It has met the regulations stipulated in the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies

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Evaluation Item	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Differences from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies and the reasons
	Yes	No	Summary (Note 2)
(IV) Has the company calculated the greenhouse gas emissions, water consumption, and total weight of waste in the past 2 years, and formulated policies on energy conservation and carbon reduction, greenhouse gas reduction, water consumption, or other waste management?			operation. The Company has established emergency response measures as to minimize the impact when disaster strikes. (IV) The Company did not calculate its greenhouse emissions, water consumption and total weight of waste for the past 2 years but it has been proactively promoting energy saving and carbon reduction, and reducing the use of energy and paper. Office temperature control and the use of energy-saving bulbs have been enforced in order to reach the goal of reducing carbon.
IV. Social Issues (I) Does the company have the relevant management policies and procedures stipulated in accordance with the relevant laws and regulations and international conventions on human rights? (II) Has the company established and implemented reasonable measures for employee benefits (including: remuneration, holidays and other benefits), and appropriately reflect the business performance or achievements in the employee remuneration? (III) Does the company provide employees with a safe and healthy work environment, and provide safety and health education to employees regularly? (IV) Does the company establish effective training programs for employee's	  		(I) The Company complies with applicable labor laws and regulations. Employees’ appointment and remuneration are handled according to the Company's measures of appointment of employees to protect the basic employees’ basic rights. (II) The Company has various clear employee welfare measures and they can be found on the Company’s website. According to the Company’s Articles of Incorporation, the Company distributes no less than 1% of profit before tax as remuneration to employees. (III) The Company arranges regular employee health check-ups and disaster drills, ensuring a safe and healthy workplace for employees. (IV) The Company asks employees to take part in training courses on an unscheduled basis to improve their career capability.	(I) It has met the regulations stipulated in the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx- Listed Companies (II) It has met the regulations stipulated in the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies (III) It has met the regulations stipulated in the Corporate Social Responsibility Best

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Evaluation Item	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Differences from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies and the reasons
	Yes	No	Summary (Note 2)
career development? (V) Has the company complied with laws and international standards with respect to customers' health, safety and privacy, marketing and labeling in all products and services offered, and implemented consumer protection policies and complaint procedures? (VI) Has the company established supplier management policies demanding compliance with relevant regulations and their execution status regarding issues such as environmental, occupational safety, and health or labor rights?	 		(V) The Company has set up a section for stakeholders on the website and dedicated personnel has been assigned to handle questions in relation to customers as a means to protection the rights of consumers. The Company continues to update and comply with relevant laws and regulations, and internal standards. (VI) The Company has not established relevant policies,however, domestic and overseas suppliers have mostly had a long-term business relationship with the Company, and all products comply with laws and regulations.	Practice Principles for TWSE/TPEx-Listed Companies (IV) It has met the regulations stipulated in the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies (V) It has met the regulations stipulated in the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies (VI) Formulation of applicable policies will be discussed.
V. Has the company taken reference from the internationally accepted reporting standards or guidance when compiling CSR reports to disclose non-financial information? Have the reports mentioned previously obtained the assurance of third party verification?			Although the Company has not compiled CSR reports, other financial information of the Company has been publicly announced on the section of “Shareholders’ Services” on its website where important business information is also regularly disclosed.	Compiling of CSR reports will be discussed.
VI. For companies who have established corporate responsibility code of conducts in accordance with the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies”, please describe the

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Evaluation Item	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Differences from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies and the reasons
	Yes	No	Summary (Note 2)
current practice and any deviations from the code of conduct: The Company is still in the process of formulating Corporate Social Responsibility Best Practice Principles and relevant rules.
VII. Any other essential information that may help us to understand the performance of corporate social responsibility better: Any donation to community participation, social contribution, social service or social welfare that reached NT$600,000 or more in 2020is as follows: 1. Donation to Formosan Rubber Charity Foundation NT$10,000,000 2. Donation made to the academic research funding of molecular cardiology and cell medicine at Taipei Medical University Hospital NT$960,000 3. Donation to the Scholar Grant Fund of New Taipei City NT$600,000 4. Donation to Fu Jen Catholic University Hospital for the construction of compounded operation rooms NT$600,000
VIII. A clear statement shall be made below if the corporate social responsibility reports were verified by external certification institutions: ISO14001 Quality Assurance and ISO9001 International Quality Management System Certification

Note 1: Regardless of clicking “yes” or “no”, it should be explained in the summary field. Note 2: If the company has prepared a CSR report, the summary description may be completed by providing page references to the CSR report instead. Note 3: Material principles refer to a significant impact on the Company’s investors and other stakeholders on environmental, social, and corporate governance issues.

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(VIII) The state of the company's performance in the area of ethical corporate management, any variance from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and the reason for any such variance:

Evaluation Item	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Nonconformity to the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and reasons thereof
	Yes	No	Summary
I. Ethical Management Policies and Action Plans (I) Has the company established an ethical management policy that has been passed by its Board of Directors, and clearly specified in its rules and external documents the ethical corporate management policies and the commitment by the Board of Directors and senior management on rigorous and thorough implementation of such policies and methods? (II) Has the company established a risk assessment mechanism against unethical behavior, analyzed and assessed business activities within their business scope on a regular basis which are at a higher risk of being involved in unethical behavior, and established prevention programs at least covering the preventive measures specified in Paragraph 2, Article 7 “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies”? (III) Has the company specified operational procedures, behavioral guidelines, disciplines of violations, as well as an appeal system in the program against unethical behavior, and implemented such programs, and reviewed and revised the previous program on a regular basis?		  	(I) The Company has not formulated ethical management policy, however the Company has strict rules upon internal managers (management level) in terms of ethics and self-disciplined. The Company uploads its policy of looking after employees trying its utmost to comprehend their feelings. In terms of the relationship between external manufacturers and customers, the Company adheres to its policy of transparency, fairness and being ethical, and subsidiaries are urged to do so. (II) The Company is in the process of formulating applicable ethical management policies or system. However, the Company has established effective accounting system and internal control system, and there shall not be any external account or reserved secret account. The systems should be reviewed at any time to ensure its design and effectiveness upon execution. (III) The Company is in the process of formulating applicable ethical management policies or system.	Formulation of applicable ethical management policies or system will be discussed.

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Evaluation Item	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Nonconformity to the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and reasons thereof
	Yes	No	Summary
II. Implementation of Ethical Management (I) Does the company evaluate the integrity of all counterparties it has business relationships with? Are there any integrity clauses in the agreements it signs with business partners? (II) Has the company set up a dedicated responsible unit to promote corporate ethical management under the Board of Directors, and has such unit reported its execution in terms of ethical management policy and preventive programs against unethical behaviors and the supervision status to the Board of Directors on a regular basis (at least once a year)? (III) Does the company have any policy that prevents conflict of interest, and channels that facilitate the reporting of conflicting interests?	 		(I) Prior to having a business relationship with a counterparty, the Company shall take into consideration of their legality and goodwill, and the contract is advised to include ethical terms and conditions. (II) The Company has yet to set a dedicated unit, it is mainly handled by the management department and audit office. (III) As a means to prevent conflict of interest, when a proposal at a given Board of Directors meeting concerns the personal interest of, or the interest of the juristic person represented by any of the directors, managerial officers, and other stakeholders attending or present at board meetings of the Company, the concerned person shall state the important aspects of the relationship of interest at the given board meeting. If his or her participation is likely to prejudice the interest of the company, the concerned person may not participate in discussion of or voting on the proposal and shall recuse himself or herself from the discussion or the voting, and may not exercise voting rights as a proxy for another director.	(I) It has met the requirements stipulated in the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies. (II) Establishment of a dedicate unit for corporate ethical management will be discussed. (III) It has met the requirements stipulated in the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies.

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Evaluation Item	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Nonconformity to the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and reasons thereof
	Yes	No	Summary
(IV) Has the company established an effective accounting system and internal control system in order to implement ethical management, and propose relevant audit plans according to the assessment results of the risks of unethical behaviors, and review the compliance status of the prevention of unethical behaviors, or entrust an account to carry out the review? (V) Does the company organize internal or external training on a regular basis to maintain business integrity?	 		The directors shall practice self-discipline and must not support one another in improper dealings. (IV) All units shall comply with the Company Act, Securities and Exchange Act, Business Entity Accounting Act and other relevant laws and regulations, and audit and internal rules which specify the compliance of employees. Internal auditors shall inspect the implementation status of ethical management on an unscheduled basis in the form of of a project. (V) Regular promotion is carried out, so that employees understand the Company’s policy and consequences to a violation.	(IV) It has met the requirements stipulated in the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies. (V) It has met the requirements stipulated in the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies.
III. Whistleblowing system (I) Does the company have a specific whistleblowing and reward system stipulated, a convenient report channel established and a responsible staff designated to handle the individual being reported? (II) Has the company implemented any standard procedures and/or subsequent			(I) The Company has not formulated any concrete whisteblowing and reward system. However, employees of the Company can make a report to the management or HR unit through communication channels such as the Company’s internal website and the complain mailbox of the HR unit.	(I) Formulation of concrete whistleblowing and reward system will be discussed.

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Evaluation Item	Implementation Status (Note 1)	Implementation Status (Note 1)	Implementation Status (Note 1)	Nonconformity to the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and reasons thereof
	Yes	No	Summary
measures after carrying out an investigation or confidentiality measures for handling reported misconduct? (III) Has the company taken appropriate measures to protect the whistle-blower from suffering any consequences of reporting an incident?			(II) Although the Company has not formulated relevant operational procedures and confidentiality mechanism, the Company handles reports with confidentiality. (III) The Company protects the identity of the whistleblower.	(II) Formulation of relevant operational procedures and confidentiality mechanism will be discussed. (III) It has met the requirements stipulated in the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies.
IV. Strengthening of Information Disclosure Does the company have the contents of ethical corporate management and its implementation disclosed on the website and MOPS?			The Company shall disclose its implementation status in the annual report as required by the Regulations Governing Information to be Published in Annual Reports of Public Companies, and disclose the annual report on the Company’s website: www.frg.com.tw.	It has met the requirements stipulated in the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies.
V. For companies who have established Ethical Corporate Management Best Practice Principles in accordance with the “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”, please describe the current practice and any deviations from the code of conduct: The Company is still in the process of formulating Ethical Corporate Management Best Practice Principles and relevant rules.
VI. Other material information that helps to understand the practice of ethical management of the company: (e.g., the review and revision of the best-practice principles of the Company in ethical management) The Company adheres to its philosophy of the 7 highest principles including ‘making a contribution to the society’, “being loyal and honest”, “being modest”, “being responsible”, “refinement”, “striving for success” and “being grateful”. The Company requires all employees to abide by the spirit of these 7 principles and all laws and regulations as well as measures. Various employee rules have been formulated to ensure the implementation of ethical management and law compliance.

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Note 1: Regardless of clicking “yes” or “no”, it should be explained in the summary field.

• (IX) If the Company established the corporate governance guidelines and related articles, please disclose the inquiry method: None.

• (X) Other important information that is sufficient to enhance the understanding of the operation of corporate governance shall be disclosed all together:

• As described in Chapter 3 (16) of this Article “Risk Management Policy and Organizational Structure of Formosan Rubber Group Inc.”

• Further education of corporate governance for managerial officers and chief internal auditor:

Title	Name	Date of Appointment	Date of the Continuing Education	Date of the Continuing Education	Organizer	Course Name	Hours of Course	Whether the Continuing Education Meets the Requirements (Note 1)
			From	To
President	Hsu Zhen- Ji	2019/06/05	2020/07/22	2020/07/22	Taiwan Academyof Bankingand Finance	Class of corporategovernance and enterprise sustainable operation	6	Yes
			2020/11/24	2020/11/24	Taiwan Corporate Governance Association	Corporategovernance 3.0- sustainable development blueprint
General Auditor (Discharged: December 31, 2020)	Liu Wen- Zheng	2010/03/01	2020/09/18	2020/10/28	Securities and Futures Institute	Internal Audit Course	12	Yes
Chief accounting officer	Shi Ming- De	2010/02/01	2020/06/18	2020/06/19	Accounting Research and Development Foundation	2020 Continuous Further Education of the Accounting Manager Course	12	Yes

(Note 1) Whether continuing education hours, scope of continuing education, continuing education system, arrangement of continuing education and disclosure of information are in compliance as required in the “Regulations Governing Establishment of Internal

Control Systems by Public Companies”.

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1. Continuing Education for Directors:

Title	Name	Date of Appointment	Date of the Continuing Education	Date of the Continuing Education	Organizer	Course Name	Hours of Course	Whether the Continuing Education Meets the Requirements (Note 1)
			From	To
Chairperson	Hsu Zhen- Tsai	2019/06/05	2020/08/25	2020/08/25	Taiwan Corporate Governance Association	Directors and supervisors’ responsibilityfor false financial statements	6	Yes
			2020/09/04	2020/09/04	Securities and Futures Institute	Discussion of employees and directors’ remuneration: starting from the amendments to Article 14,Securities and Exchange Act.
Director and President	Hsu Zhen-Ji	2019/06/05	2020/07/22	2020/07/22	Taiwan Academyof Bankingand Finance	Class of corporategovernance and enterprise sustainable operation	6	Yes
			2020/11/24	2020/11/24	Taiwan Corporate Governance Association	Corporategovernance 3.0- sustainable development blueprint
Representative of juristic- person director	Hsu Zhen- Xin	2019/06/05	2020/07/14	2020/07/14	Securities and Futures Institute	How to innovate KPI and performance management in the digital economy era	14	Yes
			2020/07/16	2020/07/16		Analysis of Corporate Financial Information and Decision-Making
			2020/07/22	2020/07/22		Analysis and responding practice to the international taxation trend under the new version of corporategovernance blueprint.
			2020/10/21	2020/10/21	Taiwan Institute of Directors	Corporategovernance and familylegacychallenges faced byfamilybusiness
			2020/12/15	2020/12/15	Association of TWSE/TPEx Listed Companies	Focusingon the more investment to Taiwan bythe emergingindustries
Representative of juristic- person director	Hsu Wei-Zhi	2019/06/05	2020/08/27	2020/08/27	Securities and Futures Institute	Keytechnologies and application opportunities of 5G	6	Yes
			2020/09/24	2020/09/24		From the operation right battle, discuss how companies to plan stakes, and the battlingstrategies in the meetings of Board of directors and shareholders
Representative of juristic- person director	Lin Kun- Rong	2019/06/05	2020/08/05	2020/08/05	Securities and Futures Institute	Discussion of intellectualpropertyrights: from trade secrets	6	Yes
			2020/09/24	2020/09/24		From the operation right battle, discuss how companies to plan stakes, and the battlingstrategies in the meetings of Board of directors and shareholders
Director	He Min- Chuan	2019/06/05	2020/12/17	2020/12/17	Taiwan Corporate Governance Association	Corporategovernance and compliance	6	Yes
			2020/12/24	2020/12/24		Prevention of insider trading
Independent director	Xiao Sheng- Xian	2019/06/05	2020/07/14	2020/07/14	Securities and Futures Institute	Legal Risks and Responses to Major Corporate Malfeasance	6	Yes
			2020/07/22	2020/07/22	Taiwan Academy of Banking and Finance	Class of corporate governance and enterprise sustainable operation
Independent director	Wu Chun-Lai	2019/06/05	2020/07/14	2020/07/14	Securities and Futures Institute	Legal Risks and Responses to Major Corporate Malfeasance	6	Yes
			2020/10/27	2020/10/27	Taiwan Corporate Governance Association	ESG development trend and Social Responsible Investment (SRI)
Independent director	Chen Zhu- Sheng	2019/06/05	2020/07/07	2020/07/07	Securities and Futures Institute	How do enterprises respond to the newly amended Labor Incident Act- practical drills	18	Yes
			2020/07/09	2020/07/09		Case studyof fraud enterprise’s financial statements
			2020/07/14	2020/07/14		How to innovate KPI and performance management in the digital economy era
			2020/07/15	2020/07/15		Regulations and operationalpractice of audit committees
			2020/07/16	2020/07/16		Analysis of Corporate Financial Information and Decision-Making
			2020/08/05	2020/08/05		Discussion of intellectualpropertyrights: from trade secrets

• (Note 1): Whether continuing education hours, scope of continuing education, continuing education system, arrangement of continuing education and disclosure of information are in compliance as required in the “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE/TPEx Listed Companies.”

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4. Procedures for Handling Material Inside Information:

Procedures for Handling Material Inside Information Formosan Rubber Group Inc.

Established on the 11th meeting of the 17 Board

Article 1 (Purpose of these Procedures)

These Procedures are specially adopted to establish sound mechanisms for the handling and disclosure of material inside information by the Company, in order to prevent improper information disclosures and to ensure the consistency and accuracy of information released by the Company to the public.

Article 2 (Material inside information shall be handled in accordance with applicable laws and regulations and these Procedures)

The Company shall implement its handling and disclosure of material inside information in accordance with applicable laws and regulations, the rules and regulations of the Taiwan Stock Exchange Corporation (TWSE) or the Taipei Exchange (TPEx), and these Procedures.

Article 3 (Scope of application)

These Procedures shall apply to all directors, supervisors, managerial officers, and employees of this Corporation.

This Corporation shall ensure that any other person who acquires knowledge of this Corporation's material inside information due to their position, profession, or relationship of control shall comply with the applicable provisions of these Procedures.

Article 4 (Scope of material inside information)

For the purposes of these Procedures, the term "material inside information" refers to information that, with reference to the Securities and Exchange Act, other applicable laws and regulations, and the applicable rules and regulations of the TWSE or the TPEx, is defined as material inside information by the responsible unit in charge of handling of such information and is further approved by a resolution of the Board of Directors.

Article 5 (Responsible unit in charge of the handling of material inside information)

The Company has assigned the management division as the responsible unit with handling material inside information. The unit shall have the following functions and authorities:

• I. Responsibility for formulating the drafts of these Procedures and any amendments to them.

• II. Responsibility for receiving inquiries in connection with the methods of handling material inside information, and for consultation, review, and recommendations relating to these Procedures.

• III Responsibility for receiving reports on unauthorized disclosures of material inside information and formulation of corresponding measures.

• IV. Responsibility for designing a system for preserving all documents, files, electronic records, and other materials related to these Procedures.

• V. Other activities related to these Procedures.

Article 6 (Confidentiality firewall operations - Personnel)

The Company's directors, supervisors, managerial officers, and employees shall exercise the due care and fiduciary duty of a good administrator and act in good faith when performing their duties, and shall sign confidentiality agreements.

No director, supervisor, managerial officer, or employee with knowledge of material inside information of this Corporation may divulge the information to others.

No director, supervisor, managerial officer, or employee of this Corporation may inquire about or collect any non-public material inside information of this Corporation not related to their individual duties from a person with knowledge of such information, nor may they disclose to others any non-public material inside information of this Corporation of which they become aware for reasons other than the performance of their duties.

Article 7 (Confidentiality firewall operations - Documents and information)

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Proper protection of confidentiality shall be given to files and documents containing the Company's material inside information when transmitted in written form. When transmitted by e-mail or other electronic means, such files and documents must be processed with appropriate security technology such as encryption or electronic signatures.

Files and documents containing the Company's material inside information shall be backed up and stored in a secure location.

Article 8 (Operation of confidentiality firewalls)

The Company shall ensure that the firewalls specified in the preceding two articles are established, and take the following additional steps:

• I. Adopt adequate control measures for the firewalls and perform periodic testing.

• II. Enhance measures for custody and maintaining the secrecy of files and documents containing non-public material inside information of this Corporation.

Article 9 (Confidentiality obligations of outside organizations and persons)

Any organization or person outside of this Corporation that is involved in any corporate action of this Corporation relating to a merger or acquisition, major memorandum of understanding, strategic alliance, other business partnership plans, or the signing of a major contract shall be required to sign a confidentiality agreement, and may not disclose to another party any material inside information of this Corporation's thus acquired.

Article 10 (Principles of disclosure of material inside information)

The Company shall comply with the following principles when making external disclosures of material inside information:

• I. The information disclosed shall be accurate, complete, and timely.

• II. There shall be a well-founded basis for the information disclosure.

• III The information shall be disclosed fairly.

Article 11 (Implementation of the spokesperson system)

Any disclosure of the Company's material inside information, except as otherwise provided by law or regulation, shall be made by this Corporation's spokesperson, or by a deputy spokesperson acting in such capacity in a confirmed sequential order. When necessary, the disclosure may be made directly by a responsible person of this Corporation.

The Company's spokesperson or deputy spokesperson shall communicate to outside parties only

information within the scope authorized by the Company, and no personnel of the Company's other than those serving as the Company's responsible person, spokesperson, or deputy spokesperson may disclose any material inside information of the Company's to outside parties without authorization.

Article 12 (Record of disclosure of material inside information)

The Company shall keep records of the following in respect of any disclosure of information to outside parties:

• I. The person who discloses the information, the date, and the time.

• II. How the information is disclosed.

III What information is disclosed.

• IV. What written material is delivered.

• V. Any other relevant details.

Application form for public announcements: please see Table 1 and Table 2

Article 13 (Response to false media coverage)

If a media agency releases information that is in any respect inconsistent with material information disclosed by this Corporation, the Company shall promptly issue a clarification on the Market Observation Post System (MOPS) and request the media agency to correct the information.

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Article 14 (Reporting of unusual events)

Any director, supervisor, managerial officer, or employee of the Company that becomes aware of any unauthorized disclosure of the Company's material inside information shall report to the responsible unit and the internal audit department of the Company as soon as practicable.

Upon receipt of a report made pursuant to the preceding paragraph, the responsible unit shall formulate corresponding measures. When necessary, it may invite members from the internal audit and other departments to meet for discussion of the measures, and shall keep a record of the results of the measures for future reference. The internal auditors shall also perform such audits as their duties may require.

Article 15 (Disciplinary measures)

The Company shall take measures to discover those responsible and take appropriate legal action against any personnel under either of the following circumstances:

• I. Personnel of the Company disclose material inside information without authorization to any outside party, or otherwise violate these Procedures or any other applicable law or regulation.

• II. A spokesperson or deputy spokesperson of this Corporation communicates to any outside party any information beyond the scope authorized by the Company, or otherwise violates these Procedures or any other applicable law or regulation.

If any person outside the Company divulges any material inside information of the Company, thereby

causing damage to any property or interest of the Company, the Company shall pursue appropriate measures to hold the person divulging the information legally liable.

Article 16 (Internal controls)

These Procedures shall be incorporated into the Company's internal control system. The internal auditors shall keep themselves regularly informed of the status of compliance with these Procedures and shall prepare related audit reports, so as to ensure full implementation of the procedures for handling material inside information.

Article 17 (Awareness campaigns)

At least once per year, the Company shall conduct educational campaigns to promote awareness among all directors, supervisors, managerial officers, and employees with respect to these Procedures and related laws and regulations.

The Company shall also provide educational campaigns to new directors, supervisors, managerial officers, and employees in a timely manner.

Article 18

These Procedures, and any amendments to them, shall be implemented upon approval by the Board of Directors.

Article 19

These Operational Procedures were formulated on June 9, 2011

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• (XI) The following shall also be disclosed in the implementation status of the internal control system: 1. Internal Control Statement.:

Formosan Rubber Group Inc. Internal Control Statement

Date: March 19, 2021

The following declaration was made based on the 2020 self-assessment of the Company’s internal control policies:

• I. The Company is aware that the establishment, execution, and maintenance its internal control policies are the responsibilities the Company’s board of directors and managers; such policies were implemented throughout the Company. The purpose of the system is to reasonably ensure that the effectiveness and efficiency of operations (including profits, performance, and protecting the security of assets), reliability, timeliness, transparency, and regulatory compliance of reporting, as well as the compliance with applicable laws, regulations, and bylaws are achieved.

• II. The internal control system is designed with inherent limitations. No matter how perfect the internal control system is, it can only provide a reasonable assurance to the fulfillment of the three objectives referred to above. Moreover, the effectiveness of the internal control system could be affected by the changes of environment and circumstances. However, a self-monitor mechanism is installed in the internal control system of the Company. The Company will make corrections once the deficiencies are identified.

• III. The Company evaluates the design and execution of its internal control system based on the criteria specified in the "Regulations Governing Establishment of Internal Control Systems by Public Companies" (hereinafter referred to as the "Regulations") to determine whether the existing system continues to be effective. The criteria defined in “the Regulations” include five elements depending on the management control process: 1. environment control; 2. risk assessment; 3. control process; 4. information and communication; and 5. supervision. Each element further encompasses several subelements. Please refer to “the Regulations” for details.

• IV. The Company has adopted the said criteria to validate the effectiveness of its internal control system design and execution.

• V. Basing on the aforementioned audit findings, the company holds that has reasonably preserved the achievement of the aforementioned goals within the aforementioned period ended on 2020.12.31 of internal control (including the monitoring over the subsidiaries), including the effectiveness and efficiency in operation, reliability in financial reporting and compliance with relevant legal rules, and that the design and enforcement of internal control are effective.

• VI. The Statement of Declaration will be the major contents of the annual report and prospectus of the Company and to be publicly disclosed. Any illegalities such as misrepresentations or concealments in said published contents will be considered a breach of Articles 20, 32, 171, and 174 of the Securities and Exchange Act and incur legal responsibilities.

• VII. This declaration was passed unanimously without objection by all 9 Directors present at the board meeting dated March 19, 2021.

Formosan Rubber Group Inc. Chairperson: Hsu Zhen-Tsai President: Hsu Zhen-Ji

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1. If an accountant is entrusted to perform a special audit on the internal control system, the audit report shall be disclosed: None.

2. (XII) List of discipline, significant deficit and improvement status of violation of internal control system in most recent year and as of the publication date of the annual report

3. (XIII) Major resolutions at shareholders meetings and Board of Directors meetings in most recent year and as of the publication date of the annual report: None.

4. Review of the execution of the resolutions of the shareholders meeting:

The matters resolved by the previous shareholders meeting on June 12, 2020 have all been enforced according to the resolution; the review of the execution is as follows:

• Importantresolutions Execution review

• 1. Recognition of the motion of the Company’s 2019 business report and 1. The motion has been passed by all attending directors. financial report. 2. The motion was passed without objections after the chair 2. Recognition of the motion of the Company’s 2019 earnings consulted with all attending directors. distribution. July 11, 2020 was set as the ex-dividend date, and cash dividends were distributed on July 30, 2010 with a par value of NT$0.80 per share. The cash dividends have been distributed as scheduled.
• 1. The change has been registered at the Ministry of Economic
• 1. Motion of amendments to part of the provisions of the Company’s Affairs on July 1, 2020. “Article of Incorporation” has been approved. 4. The motion has been passed by all attending directors.
• 1. Motion of amendments to part of the provisions of the Company’s “Rules of Procedure for Shareholders Meetings” has been approved.

2. Important resolutions of the Board of Directors’ meeting:

Date of important resolutions	Important discussions	Resolution
7th meeting of the 20th board (February25, 2020)	No discussion items.	None.
8th meeting of the 20th board (March 20, 2020)	1. Motion of planning to enforce the 24th repurchase of the Company’s outstanding shares. 2. Motion of 2019 remuneration to the Company’s employees, directors and supervisors. 3. Motion of the Company’s 2019 business report and financial report. 4. Motion of the Company’s 2019 earnings distribution. 5. Motion of amendments to part of the provisions of the Company’s “Article of Incorporation”. 6. Amendments to part of the provisions of the Company’s “Rules of Procedure for Shareholders Meetings”	1. The motion has been approved by all attending directors without any dissenting opinion. 2. The motion has been approved by all attending directors without any dissenting opinion. 3. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissenting opinion, and was submitted for recognition at the shareholders meeting. 4. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissenting opinion, and was submitted for recognition at the shareholders meeting. 5. The motion has been approved by all attending directors without any dissenting opinion. 6. The motion has been approved by all attending directors without any dissenting opinion. 7. The motion has been approved by all attendingdirectors without anydissenting

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Date of important resolutions	Important discussions	Resolution
	7. Motion of amendments to part of the provisions of the Company’s “Rules of Procedure for Board of Directors’ Meetings” has been approved. 8. Motion of amendments to part of the provisions of the Company's Audit Committee Charter”. 9. Motion of formulation of the Company's “Regulations Governing the Board Performance Evaluation”. 10. Motion of formulation of the Company's Rules of Corporate Governance”. 11. Relevant matters in connection with the Company’s convening of 2020’s General Meeting of Shareholders. 12. Motion of appointed CPAs’ fees. 13. Motion of authorization for opening accounts at SinoPac Securities and Masterlink Securities. 14. Motion of discussion of the Company’s investment preferred stocks and best value offshore financial products. 15. Motion of 2019 internal control system statement. 16. Motion of increasing the investment limit to NT$1 billion for domestic TWSE/TPEx stocks.	opinion. 8. The motion has been approved by all attending directors without any dissenting opinion. 9. After amendments have been made, all attending directors approved. 10. After amendments have been made, all attending directors approved. 11. The motion has been approved by all attending directors without any dissenting opinion. 12. The motion has been approved by all attending directors without any dissenting opinion. 13. The motion has been approved by all attending directors without any dissenting opinion. 14. The motion has been approved by all attending directors without any dissenting opinion. 15. The motion has been approved by all attending directors without any dissenting opinion. 16. The motion has been approved by all attending directors without any dissenting opinion.
9th meeting of the 20th board (May 13, 2020)	1. Motion of the consolidated financial report for the first quarter of 2020. 2. Motion of amending the “Managerial Operational Procedures of Financial Statements Preparation Process”3. Motion of credit limit with corresponding banks. 4. Motion of the 2019 Dragon Boat Festival bonus for the Company and the subsidiary Ban Chien Development.5. Motion of the distribution of the Company’s 2019 remuneration to directors, supervisors, and employees.6. Motion of discussion of the Company’s investment in best value offshore financial products.	1. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissenting opinion. 2. The motion has been approved by all attending directors without any dissenting opinion. 3. The motion has been approved by all attending directors without any dissenting opinion. 4. The motion has been approved by all attending directors without any dissenting opinion. 5. The motion has been approved by all attending directors without any dissenting opinion. 6. The motion has been approved by all attendingdirectors without anydissenting

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Date of important resolutions	Important discussions	Resolution
		opinion.
10th meeting of the 20th board (June 12, 2020)	1. Motion to determine the base date of capital decrease for cancelling the 24th treasury shares. 2. Motion of discussion of the Company’s investment in best value offshore financial products. Motion to authorize the account-openingin E. Sun Bank	1. The motion has been approved by all attending directors without any dissenting opinion, and submitted for report to the shareholders meeting. 2. The motion has been approved by all attending directors without any dissenting opinion. 3. The motion has been approved by all attending directors without any dissenting opinion.
11th meeting of the 20th board (July 17, 2020)	1. 1. The Company disposed No. 100, Hueizhong Rd., Sec. 1, Taichung City and parking lot No. 64 to a related party. 2. Motion of dissolution and liquidation of the subsidiary, Da-Guan Recreation Company 3. Established the “Operational Procedures for Buying Back the Company’s Shares” 4. Motion of semi-annual performance settlement and rewards and punishments for the Production Department turning deficit into profit. 5. Motion to subscribe Allianz Global Investors Preferred Securities and Income Fund	1. The chair recused himself as he is a related party; Independent Director, Xiao Sheng-Xian, was appointed as the deputy chair. Three directors, Hsu Zhen-Ji, Hsu Zhen-Xin and Hsu Zhen-Tsai, recused themselves from discussion and voting due to conflict of interest, as required by laws. The remaining six directors unanimously approved. 2. The motion has been approved by all attending directors without any dissenting opinion. 3. The motion has been approved by all attending directors without any dissenting opinion. 4. The motion has been approved by all attending directors without any dissenting opinion. 5. The motion has been approved by all attending directors without any dissenting opinion.
12th meeting of the 20th board (August 12, 2020)	1. Motion of the 2020 second quarter of the Company’s consolidated financial report.	1. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissentingopinion.
13th meeting of the 20th board (September 25, 2020)	1. Motion to purchase the land at Qiaoshui Section in Logntan, Taoyuan. 2. Motion of authorizing acquisition or disposal of financial asset negotiable securities (Ban Chienproject included).	1. The motion has been approved by all attending directors without any dissenting opinion. 2. The motion has been approved by all attending directors without any dissenting opinion.
14th meeting of the 20th board (November 10, 2020)	1. Motion of the consolidated financial report for the third quarter of 2020. 2. Motion to authorize the account-opening in Cathay United Bank and E. Sun Bank (Singapore Branch) 3. Motion of donation to Formosan Rubber Charity Foundation	1. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissenting opinion. 2. The motion has been approved by all attending directors without any dissenting opinion. 3. Four directors, Hsu Zhen-Ji, Hsu Zhen-Xin, Hsu Zhen-Tsai, and He Min-Chuan recused

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Date of important resolutions	Important discussions	Resolution
	4. New recommendation of underlying overseas financial asset investments	themselves from discussion and voting as they are related parties; other remaining directors unanimously have approved the motion without any dissenting opinions. 4. The motion has been approved by all attending directors without anydissentingopinion.
15th meeting of the 20th board (December 25, 2020)	1. Motion of the 2020 year-end bonus for the Company and the subsidiary Ban Chien Development. 2. Motion of 2021 remunerations for president, deputy president and managerial officers. 3. Motion of 2021 internal control system and audit plans. 4. Motion of 2021 business plan (submitted and reported by each department’s budget) 5. Motion of hiring the audit officer and consultant.	1. The motion has been approved by all attending directors without any dissenting opinion. 2. The motion has been approved by all attending directors without any dissenting opinion. 3. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissenting opinion. 4. The motion has been approved by all attending directors without any dissenting opinion. 5. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissentingopinion.
16th meeting of the 20th board (November 29, 2021)	1. Motion of retirement of the vice president 2. Motion of assigning a director to the subsidiary (Ban Chien) and his remuneration. 3. Motion to appoint the spokesperson and deputy spokesperson 4. Motion to promote a manager in the Construction Department and his remuneration 5. Motion of credit limit with corresponding banks. 6. Discussion of the disbursement of the performance bonus to the Production Department 7. 2020 Motion of discussing the performance bonus for the financial asset investmentproject of Ban Chien.	1. The motion has been approved by all attending directors without any dissenting opinion. 2. The motion has been approved by all attending directors without any dissenting opinion. 3. The motion has been approved by all attending directors without any dissenting opinion. 4. The motion has been approved by all attending directors without any dissenting opinion. 5. The motion has been approved by all attending directors without any dissenting opinion. 6. The motion has been approved by all attending directors without any dissenting opinion. 7. The motion has been approved by all attending directors without anydissentingopinion.
17th meeting of the 20th board (March 19, 2021)	1. Motion of the Company’s 2020 business report and financial report. 2. Motion of distributing remunerations to directors and employees for 2020 3. Motion of Dragon Boat Festival bonus 4. Motion of the Company’s 2020 earnings distribution.	1. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissenting opinion, and was submitted for recognition at the shareholders meeting. 2. The motion has been approved by all attending directors without any dissenting opinion. 3. The motion has been approved by all attending directors without any dissenting opinion. 4. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissenting opinion, and was submitted for recognition at the shareholders meeting.

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Date of important resolutions	Important discussions	Resolution
	5. Relevant matters in connection with the Company’s convening of 2021’s General Meeting of Shareholders. 6. Motion of appointed CPAs’ fees. 7. Motion of that Baker Tilly Clock & Co intended to adjust the CPAs. 8. Motion of adjustment of underlying overseas financial asset investments 9. Motion of performance, reward and punishment for each department and project. 10. Motion of 2020 internal control system statement. 11. Motion of amendments to part of the provisions of the Company’s “Regulations of Electing Directors”. 12. Motion of amendments to part of the provisions of the Company’s “Rules of Procedure for Shareholders Meetings”. 13. Motion of amendments to part of the provisions of the Company’s “Rules of Procedure for Board of Directors’ Meetings”. 14. Motion of amendments to part of the provisions of the Company's Audit Committee Organizational Rules”. 15. Motion of amendments to part of the provisions of the Company’s “Regulations Governing the Board Performance Evaluation”. 16. Motion of amendments to part of the provisions of the Company's Remuneration Committee Organizational Rules”. 17. Motion of amendments of part of the Company’s “Operational Procedures for “Acquisition or Disposal of Assets” has been approved.	5. The motion has been approved by all attending directors without any dissenting opinion. 6. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissenting opinion. 7. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissenting opinion. 8. The motion has been approved by all attending directors without any dissenting opinion. 9. The motion has been approved by all attending directors without any dissenting opinion. 10. After the motion has been delivered to the Audit Committee for review, it was approved by all attending directors without any dissenting opinion. 11. The motion has been approved by all attending directors without any dissenting opinion, and submitted for discussion in the shareholders meeting. 12. The motion has been approved by all attending directors without any dissenting opinion, and submitted for discussion in the shareholders meeting. 13. The motion has been approved by all attending directors without any dissenting opinion. 14. The motion has been approved by all attending directors without any dissenting opinion. 15. The motion has been approved by all attending directors without any dissenting opinion. 16. The motion has been approved by all attending directors without any dissenting opinion. 17. The motion has been approved by all attending directors without any dissenting opinion, and submitted for discussion in the shareholders meeting.

• (XIV) Any other documented objections or qualified opinions raised by directors or supervisors against board resolutions in relation to matters, and their content in most recent year and as of the publication date of the annual report: None.

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(XV) Resignation or discharge of chairperson, president and managerial staff of accounting, finance, internal audit, chief corporate governance officer and research and development in most recent year and as of the printed date of the annual report

Title	Name	Date of Inauguration	Date of Discharged	Reason of Resignation or Discharge
Internal Audit Officer	Liu Wen-Zheng	2010/03/01	2020/12/31	Reappointment to otherposition

(XVI) Risk Management Policy and Organizational Structure of Formosan Rubber Group Inc. (1) Description of the Company's risk management policy

1	The risk management policy has been enacted for the Company to strengthen internal control and and improve corporate risk management,includingrisk detection,assessment,reportingand how to handle risks.,
2	The Company has set up a 3-level risk management organization. Specific operating method has been formulated from responsibilities of main departments→audit office→Board of Directors with a set goal of achieving risk control for all employees from all aspects.
3	The Company has set up a 3-level risk management organization (main departments→audit office→Board of Directors) and specific operatingmethod has been formulated with agoal of achievingrisk control for all employees from all aspects.
4	As a means to improve the transparency of information disclosure for “risk control”, the Company discloses information in terms of its organization and operation of risk management policy, important risk assessments and risk management on the website and in the annual report as required bythe competent authority.

(2) Important risk assessments for risk	(2) Important risk assessments for risk	management	management
0	Designated items for information disclosure	0-1	External factors such as exchange rate, interest rate, inflation, law and politics, causing the risk of segment loss.
1	Risk of business or service	1-1	Poor quality of business or service. Compensation risk of delivery disputes (such as incompliance of specifications)or violation of the law(such aspoison or infringement)
		1-2	Compensation risk of business or service production process (such as environmental pollution or accidents)
		1-3	Risks directly or indirectly causes business or service loss due to misplacement of business or service personnel’s duties/concurrentjob/ salary/ assessment
2	Risk of finance	2-1	Accounts receivable with insufficientguarantee or collection andpayment
		2-2	Accumulated loss unrecognized thisyear
		2-3	Engaging in risk operation specified by the Securities and Exchange Bureau (such as lending funds to others, providing endorsement for others, financial operation of derivatives and related party transactions).
3	Risk of assets	3-1	Risks of disasters (such as fires or explosion) or natural disasters (such as floods, windstorms and earthquakes.
		3-2	Risks of vandalism or theft

(3) Organizational Operation of Risk Management

Organizational Risk Management	Level 1	Level 2	Level 3
Responsible department	Main departments	Audit Office	Board of Directors
Operation method	When carrying out daily control activities or self- assessments on annual important risk assessment items, departmental management risks, if occurrence estimates of management risks is moderate - high, such important risk assessment item and its measures to reduce operating risks shall be reported to the Organizational Risk Management at Level 2 and Level 3. It shall be included in the next year’s internal control system amendment.	When carrying out a risk self-assessment on the departmental operations or performing an annual audit plans, if the operating risk estimate occurrence is moderate - high of the level 1 of Organizational Risk Management, such important risk assessment item and its measures to reduce operating risks shall be included in the next year’s internal control system amendment and audit plan adjustment. It shall also be reported to the Organizational Risk Management at Level 3.	In terms of Organizational Risk Management at Level 1 and Level 2, it is submitted to the next year’s internal control system amendment and audit plan adjustment according to the risk management items listed and shall be implemented upon approval.

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V. Information Regarding the Company’s Audit Fees:

(I) Information of Audit Fee

Name of the Accounting Firm	Name of the CPAs	Name of the CPAs	Audit Period	Remarks
Baker Tilly Clock & Co Clock & Co.	Zhou Yin-Lai	Wu Xin- Liang	2020.01.01~2020.12.31

Note: If the Company has changed the CPAs or the accounting firm this year, please indicate the audit period separately, and explain the reason for the replacement in the Remarks field.

Breakdown of CPA Professional Fees

Unit: NT$ thousand

Fee Item Price Range	Fee Item Price Range	Fee Item Price Range	Fee Item Price Range	Fee Item Price Range	Fee Item Price Range	Fee Item Price Range	Fee Item Price Range	Audit Fee	Audit Fee	Audit Fee	Non-Audit Fee	Non-Audit Fee	Non-Audit Fee	Total	Total
1	Below NT$2,000							V			V
2	NT$2,000 thousand (inclusive) - 4,000 thousand													V
3	NT$4,000 thousand (inclusive) - NT$6,000 thousand
4	NT$6,000 thousand (inclusive) - NT$8,000 thousand
5	NT$8,000 thousand (inclusive) - NT$10,000 thousand
6	NT$10,000,000 (inclusive) and above
				Information Regarding the Company’s Audit Fees
Baker Tilly		Zhou Yin-Lai											January 1, 2020～		Review the annual report for AGM, English translation of 2020 consolidated financial statements, and English translation of 2020 parent-only financial statements
Clock & Co Clock & Co.		Wu Xin-Liang	1,980	0	0	0	190		190	V			December 31, 2020

Note 1: If the Company has changed the CPAs or the accounting firm this year, please indicate the audit period separately, and explain the reason for the replacement in the Remarks field and disclose the audit and non-audit profession fees and other information.

• Note 2: Please list the service items for non-audit fees. If “other” reaches 25% or more of the total amount of non-audit fees, its content of service shall be disclosed in the Remarks field.

• (II) Audit fee for the change of accounting firms paid in the year is less than the previous year, the decreased amount, percentage and reason of the audit fee shall be disclosed: None.

• (III) Over 10% decrease in audit fee on a year-to-year basis, the decreased amount, percentage and reason of the audit fee shall be disclosed: None.

VI. Replacement of CPA:

• (I) Regarding the former CPAs

Approved by the Board of Directors on March 19, 2021	Approved by the Board of Directors on March 19, 2021	Approved by the Board of Directors on March 19, 2021
Due to the internal organization adjustment and needs of work deployment of the accounting firm, the original CPAs certified the Company’s financial statements, Zhou Yin-Lai and Wu Xin-Liang, were replace by Zhou Yin-Lai and Lai, Yung-Chi fromQ1,2021.
Party Situation	CPA	The Company
Voluntarily ended the engagement	Not applicable

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further engagement, or the company that terminated or discontinued the engagement.	Declined (discontinue) further engagement	Declined (discontinue) further engagement
Any audit report expressing other than an unqualified opinion during the 2 most recent years, furnish the opinion and reason		Not applicable
Disagreement with the issuer	Yes			Accounting principles or practices
				Financial report disclosure
				Auditingscope orprocedure
				Others
	None	ˇ
	Description	Not applicable
Additional Disclosures (Circumstances to be disclosed as specified in Subparagraph 1-4 to 1-7, Paragraph 6, Article 10 of the Regulations)		None

(II) Regarding the successor CPAs

Name of the AccountingFirm	Baker TillyClock & Co Clock & Co.
Name of the CPAs	Zhou Yin-Lai and Lai,Yung-Chi
Date of Appointment	Approved bythe Board of Directors on March 19,2021
Prior to the formal engagement, any consultancy regarding the accounting treatment of or application of accounting principles to a specified transaction, or the type of audit opinion that might be rendered on the financial report	Not applicable
The written comment regarding the disagreement of the successor CPAs to the former CPAs	Not applicable

(III) The reply of the former CPAs regarding the Subparagraph 1 and 2-3, Paragraph 6, Article 10 of the Regulations: not applicable.

VII. Any of the Company’s chairperson, president, or managerial officer in charge of finance or accounting held a position in the CPA’s firm or its affiliates in the most recent year: None.

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VIII. Changes in shareholding and shares pledged by directors, managerial officers and shareholders with 10% shareholdings or more in most recent year and as of the publication date of the annual report

(I) Changes in shareholding by directors and managers and major Shareholders

Title	Name	2020	2020	Year-to-date as at April 13,2021	Year-to-date as at April 13,2021
		Net Change in Shareholding	Net Change in Shares Pledged	Net Change in Shareholding	Net Change in Shares Pledged
Chairperson	Hsu Zhen-Tsai	0	0	0	0
Director	Hsu Zhen-Ji	0	0	0	0
Director	Hallmark Int'l Co.,Ltd.	0	0	0	0
Director	Ruifu Construction Co.,Ltd.	0	0	0	0
Director	Hohe Construction Co.,Ltd.	1,163,000	(569,434)	246,000	0
Director	He Min-Chuan	(1,000)	0	0	0
Independent director	Xiao Sheng-Xian	0	0	0	0
Independent director	Chen Zhu-Sheng	0	0	0	0
Independent director	Wu Chun-Lai	0	0	0	0
President	Hsu Zhen-Ji	0	0	0	0
Vice President	JiangRui-Tang (retired on March 1,2021)	0	0	0	0
Managerial Officer	Hsiao Zheng-Zhong	0	0	0	0
Managerial Officer	HuangHui Xian	0	0	0	0
General Auditor	Liu Wen-Zheng (discharged on December 31,2020)	0	0	0	0
Chief financial officer	Lin Shi-Zhe	0	0	0	0
Chief accountingofficer	Shi Ming-De	0	0	0	0

(II) Information on transfer of equity where the counterparts are related parties: No transfers or equity; therefore, not applicable.

(II) Information on pledge of equity where the counterparts are related parties: not applicable.

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IX. Top 10 shareholders who are related parties, spouses, or within second-degree of kinship to each other: Relationships among top-10 shareholders

Serial number	Name (Note 1)	Shares Held I	n Own Name	Shares Held by Spouse and Underage Children	Shares Held by Spouse and Underage Children	Number Under A	of Shares Held nother Person's Name	Names and Relationship of Top 10 Shareholders who are Related Parties, Spouses or Within Second-Degree of Kinship to Each Other (Note 3)	Names and Relationship of Top 10 Shareholders who are Related Parties, Spouses or Within Second-Degree of Kinship to Each Other (Note 3)	Remarks
		Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Number of Shares	Shareholding Percentage	Title (or Name)	Relation
1	Ruifu Construction Co.,Ltd.	34,070,754	9.95%	0	0%	0	0%	None	Not applicable	None
	Representative: Hsu Zhen-Ji	4,597	0.00%	64,800	0.02%	0	0%
2	Chengxi Investment Co.,Ltd.	17,491,989	5.11%	0	0%	0	0%	Quanxinfeng Co., Ltd./Ascend Gear International Inc. Hsu Mei-Lun	Representatives of institutional shareholders are relatives within second- degree of kinship Relatives bymarriage	None
	Representative: Yang Xun-Wen	0	0%	1,947,781	0.57%	0	0%
3	Ascend Gear International Inc.	17,079,047	4.99%	0	0%	0	0%	Quanxinfeng Co., Ltd./Chengxi Hsu Mei-Lun	Representatives of institutional shareholders are relatives within second- degree of kinship Relatives bymarriage	None
	Representative: Chen Hui-Jin	327,300	0.10%	4,067,488	1.19%	0	0%
4	Hohe Construction Co.,Ltd.	13,586,726	3.97%	0	0%	0	0%	None	Not applicable	None
	Representative: Lin Kun-Rong	24,300	0.01%	0	0%	0	0%
5	Hsu Mei-Lun	9,596,720	2.80%	0	0%	0	0%	Chengxi/Quanxinfeng Co., Ltd./Ascend Gear International Inc.	Director and representative of institutional shareholders are relatives within second- degree of kinship	None
6	QuanxinfengCo.,Ltd.	8,942,410	2.61%	0	0%	0	0%	Chengxi/Ascend Gear International Inc. Hsu Mei-Lun	Representatives of institutional shareholders are relatives within second- degree of kinship Relatives bymarriage	None
	Representative: Hsu Zhen-Xin	2,754,912	0.80%	0	0%	0	0%
7	Citi (Taiwan) Commercial Bank is entrusted with the custody of the Norges Bank Investment account	4,905,980	1.43%	0	0%	0	0%	None	Not applicable	None
8	Ren-Yu Investment Limited	4,323,000	1.26%	0	0%	0	0%	None	Not applicable	None
9	JPMorgan Chase Bank Taipei Branch is entrusted with the custody of Vanguard Group Company Manager's Vanguard Global Market Stock Index Fund Special Account	4,084,135	1.19%	0	0%	0	0%	None	Not applicable	None
10	He Min-Chuan	3,405,274	0.99%	260	0.00%	0	0.00%	None	Not applicable	None
Note 1: List the top 10 shareholders. List both the titles of the shareholders and the names of the representatives for institutional shareholders. Note 2: The calculation of proportion of shareholding shall be the holding by the person, spouse, and dependents or in the name of a third party separately. Note 3: The aforementioned shareholders for disclosure shall include institutional shareholders and natural persons, with the relations between the shareholders as required by the Criteria for the Compilation of Financial Statements by Securities Issuers.

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X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee:

X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee:	X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee:	X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee:	X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee:	X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee:	X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee:	X. Number of shares held and shareholding percentage of the Company, the Company's directors, supervisors, managerial officers and directly or indirectly controlled entities on the same investee:
Unit: Share; %; December 31, 2020
Invested Business (Note 1)	The Company’s investment		Investments by the Directors, supervisors, managerial officers, and companies directly or indirectly controlled bythe Company		Combined investment
	Shares/units	Shareholding Percentage (%)	Shares/units	Shareholding Percentage (%)	Shares/units	Shareholding Percentage (%)
Banjian Development Co., Ltd. Ruifu Development Co., Ltd. Fenghe Development Co., Ltd. Hohe Construction Co., Ltd. FRG US CORP. TRIMOSA HOLDINGS LLC (Note 2) KINGSHALE INDUSTRIAL LIMITED Formosan Chemical Ind. Corp. Formosan Glass & Chemical Industrial Co. Ningbo Formosan Rubber Group Inc. (Note 2) Brightek Optoelectrnic Co., Ltd. Huaku Development Co., Ltd. Sinopac Financial Holdings Company Limited. Formosa Chemicals & Fibre Corporation Taiyang Co., Ltd. ShineMore Technology Materials Co., Ltd. Formosa Plastics Corp. Nan Ya Plastics Corporation Grand Fortune Securities Co., Ltd. Yuji Venture Capital Co., Ltd. The Eslite Corporation Far EasTone Telecommunications Co., Ltd.	56,000,000 48,260 3,990,000 7,597,927 7,526,000 14,964,052 (USD) 9,999 22,516 9,795 71,927(NTD thousand) 267,241 1,325,000 35,969,700 4,599,170 111,395 1,158,250 583,000 3,847,900 690,000 2,250,000 1,604,379 2,210,000	100.00 48.26 39.90 26.20 100.00 14.67 99.99 2.25 5.02 12.86 0.44 0.48 0.32 0.08 1.24 3.05 0.01 0.05 0.28 10.00 1.65 0.07	0 42,160 328,333 13,248,101 0 7,482,025 (USD) 0 0 0 0 0 0 42,062,322 0 0 118,250 0 0 0 0 0 0	0.00 42.16 3.28 45.68 0 7.34 0 0 0 0 0 0 0.37 0 0 0.16 0 0 0 0 0 0	56,000,000 90,420 4,318,333 20,846,028 7,526,000 22,446,077 (USD) 9,999 22,516 9,795 71,927(NTD thousand) 267,241 1,325,000 78,032,022 4,599,170 111,395 1,276,500 583,000 3,847,900 690,000 2,250,000 1,604,379 2,210,000	100.00 90.42 43.18 71.88 100.00 22.01 99.99 2.25 5.02 12.86 0.44 0.48 0.69 0.08 1.24 1.68 0.01 0.05 0.28 10.00 1.65 0.07
Far Eastern Department Stores Ltd. Far Eastern New Century Tashee Recreation Co., Ltd. - Preferred stock ASUSTeK Computer Inc. WPG Holding Co Ltd. Farglory Construction Co., Ltd. Class B preference share, Shin Kong Financial Holding Co., Ltd Bank of America Corporation (BAC) Citigroup Inc. Continental Holdings Ltd. Formosa Petrochemical Corp. Pegatron Corporation Chong Hong Construction Co., Ltd.	5,266,447 4,101,761 1 200,000 283,600 1,254,000 666,000 14,000 4,000 2,205,000 1,678,000 1,577,000 842,000	0.37 0.08 － 0.03 0.02 0.16 0.01 0.00 0.00 0.27 0.02 0.06 0.29	0 0 0 0 0 380,000 0 0 0 0 0 0 904,000	0 0 0 0 0 0.05 0 0 0 0 0 0 0.31	5,266,447 4,101,761 1 200,000 283,600 1,634,000 666,000 14,000 4,000 2,205,000 1,678,000 1,577,000 1,746,000	0.37 0.08 － 0.03 0.02 0.21 0.01 0.00 0.00 0.27 0.02 0.06 0.60

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Invested Business (Note 1)	The Company’s investment	The Company’s investment	Investments by the Directors, supervisors, managerial officers, and companies directly or indirectly controlled bythe Company	Investments by the Directors, supervisors, managerial officers, and companies directly or indirectly controlled bythe Company	Combined	investment
	Shares/units	Shareholding Percentage (%)	Shares/units	Shareholding Percentage (%)	Shares/units	Shareholding Percentage (%)
E.SUN Financial Holding Co., Ltd. Allianz Global Investors Preferred Securities and Income Fund Allianz Global Investors Income and Growth Fund NN(L) US Credit X Cap USD AB International Technology Portfolio AB American Growth Portfolio AT&T Inc. Corporate Bond II AT&T Inc. Corporate Bond VI Ford Motor Company Delta Air Lines Inc. Taiwan Cement Corp. MiTAC International Corporation Yuanta Financial HoldingCo.,Ltd.	1,630,419 997,009 91,159 202 10,490 21,346 680.000 630,000 500,000 250,000 0 0 0	0.01 － － － － － － － － － 0 0 0	0 0 0 0 0 0 0 0 0 0 420,006 224,000 208,000	0 0 0 0 0 0 0 0 0 0 0.01 0.02 0.00	1,630,419 997,009 91,159 202 10,490 21,346 680.000 630,000 500,000 250,000 420,006 224,000 208,000	0.01 － － － － － － － － － 0.01 0.02 0.00

Note 1: Refers to the Company's long-term or short-term investment. Note 2: The number for unissued shares is listed as their original investment amount.

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IV. Funding Status

I. Capital and Shares:

II. Corporate Bonds

III. Preferred Stocks:

• IV. Global Depository Receipts

• V. Employee Stock Options

VI. New Restricted Employee Shares

VII. New Shares Issued for Merger or Acquisition (including mergers, acquisitions, and demergers)

VIII. Progress on Planned Use of Capital:

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I. Capital and Shares:

(I) Source of Capital

Formation of Capital

Unit: NTD/Share

						Unit: NTD/Share	Unit: NTD/Share	Unit: NTD/Share
Year/Month	Issue Price	Authorized capital		Paid-upcapital		Remarks
		Number of Shares	Amount	Number of Shares	Amount	Source of Capital	Paid in Properties Other Than Cash	Others
January 1963	10	240,000	2,400,000	240,000	2,400,000	Partnership was registered in 1952 when founded; it became a companyin 1963	None
August 1964	10	500,000	5,000,000	500,000	5,000,000	Cash Capital Increase - NT$2,600,000	None
August 1966	10	1,200,000	12,000,000	1,200,000	12,000,000	Cash Capital Increase - NT$7,000,000	None
June 1970	10	1,800,000	18,000,000	1,800,000	18,000,000	Cash Capital Increase - NT$6,000,000	None
August 1971	10	3,000,000	30,000,000	3,000,000	30,000,000	Cash Capital Increase - NT$12,000,000	None
October 1972	10	6,000,000	60,000,000	6,000,000	60,000,000	Cash Capital Increase - NT$30,000,000	None
September 1973	10	8,000,000	80,000,000	8,000,000	80,000,000	Cash Capital Increase - NT$20,000,000	None
January 1974	10	10,000,000	100,000,000	10,000,000	100,000,000	Cash Capital Increase - NT$20,000,000	None
December 1974	10	11,500,000	115,000,000	11,500,000	115,000,000	Capital Reserve to Increase Capitalization - NT$15,000,000	None
December 1975	10	14,500,000	145,000,000	14,500,000	145,000,000	Cash Capital Increase - NT$10,000,000, Capital Reserve to Increase Capitalization - NT$20,000,000	None
September 1978	10	16,000,000	160,000,000	16,000,000	160,000,000	Capitalization of Retained Earnings - NT$15,000,000	None
October 1979	10	19,000,000	190,000,000	19,000,000	190,000,000	Capitalization of Retained Earnings - NT$30,000,000	None
September 1980	10	22,500,000	225,000,000	22,500,000	225,000,000	Cash Capital Increase - NT$15,000,000, Capitalization of Retained Earnings - NT$20,000,000	None
December 1983	10	36,000,000	360,000,000	36,000,000	360,000,000	Cash Capital Increase - NT$135,000,000	None	Approved under Taiwan-Finance-Securities-(1) 2777 dated December 17,1983(1983)
October 1985	10	42,353,000	423,530,000	42,353,000	423,530,000	Cash Capital Increase - NT$63,530,000	None	Approved under Taiwan-Finance-Securities-(1) 304 dated October 29,1985
November 1986	10	66,000,000	660,000,000	60,003,000	600,030,000	Cash Capital Increase - NT$136,500,000, Capital Reserve to Increase Capitalization - NT$40,000,000	None	Approved under Taiwan-Finance-Securities-(1) 13053 dated September 23,1986(1986)
September 1987	10	66,000,000	660,000,000	66,000,000	660,000,000	Cash Capital Increase - NT$59,970,000	None	Approved under Taiwan-Finance-Securities-(1) 3440 dated August 7,1987
November 1988	10	76,000,000	760,000,000	76,000,000	760,000,000	Cash Capital Increase - NT$100,000,000	None	Approved under Taiwan-Finance-Securities-(1) 08958 dated August 26,1988(1988)
December 1989	10	130,000,000	1,300,000,000	130,000,000	1,300,000,000	Cash Capital Increase - NT$375,000,000, Capitalization of Retained Earnings - NT$145,200,000, Capital Reserve to Increase Capitalization - NT$19,800,000	None	Approved under Taiwan-Finance-Securities-(1) 02539 dated December 19, 1989 (1989)
October 1991	10	180,000,000	1,800,000,000	156,000,000	1,560,000,000	Capitalization of Retained Earnings - NT$130,000,000, Capital Reserve to Increase Capitalization - NT$130,000,000	None	Approved under Taiwan-Finance-Securities-(1) 02944 dated October 11,1991(1991)
July 1993	10	180,000,000	1,800,000,000	180,000,000	1,800,000,000	Capital Reserve to Increase Capitalization - NT$240,000,000	None	Approved under Taiwan-Finance-Securities-(1) 30829 dated July31,1993(1993)
September 1994	10	234,000,000	2,340,000,000	207,000,000	2,070,000,000	Capital Reserve to Increase Capitalization - NT$270,000,000	None	Approved under Taiwan-Finance-Securities-(1) 32558 dated September 7,1994(1994)

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Year/Month	Issue Price	Authorized capital	Authorized capital	Paid-upcapital	Paid-upcapital	Remarks	Remarks	Remarks
		Number of Shares	Amount	Number of Shares	Amount	Source of Capital	Paid in Properties Other Than Cash	Others
March 1995	10	234,000,000	2,340,000,000	234,000,000	2,340,000,000	Cash Capital Increase - NT$270,000,000	None	Approved under Taiwan-Finance-Securities-(1) 55170 dated March 16,1995(1995)
June 1995	10	269,100,000	2,691,000,000	269,100,000	2,691,000,000	Capitalization of Retained Earnings - NT$135,720,000, Capital Reserve to Increase Capitalization - NT$215,280,000	None	Approved under Taiwan-Finance-Securities-(1) 37123 dated June 23,1995(1995)
July 1996	10	285.246,000	2,852,460,000	285.246,000	2,852,460,000	Capital Reserve to Increase Capitalization - NT$161,460,000	None	Approved under Taiwan-Finance-Securities-(1) 41715 dated July10,1996(1996)
June 1997	10	373,770,600	3,737,706,000	313,770,600	3,137,706,000	Capital Reserve to Increase Capitalization - NT$285,246,000	None	Approved under Taiwan-Finance-Securities-(1) 51629 dated June 27,1997(1997)
June 1998.	10	411,423,072	4,114,230,720	351,423,072	3,514,230,720	Capital Reserve to Increase Capitalization - NT$376,524,720	None	Approved under Taiwan-Finance-Securities-(1) 54404 dated June 22,1998(1998)
June 1999	10	435,319,840	4,353,198,400	375,319,840	3,753,198,400	Capital Reserve to Increase Capitalization - NT$238,967,680	None	Approved under Taiwan-Finance-Securities-(1) 54833 dated June 11,1999(1999)
June 2000	10	457,088,390	4,570,883,900	397,088,390	3,970,883,900	Capital Reserve to Increase Capitalization - NT$217,685,500	None	Approved under Taiwan-Finance-Securities-(1) 50705 dated June 13,2000(2000)
July 2003	10	457,088,390	4,570,883,900	389,869,390	3,898,693,900	Cancellation of Treasury Shares NT$72,190,000	None	Approved under Taiwan-Finance-Securities-(3) 0920134406 dated July25,2003
July 2004	10	680,000,000	6,800,000,000	385,264,400	3,852,643,900	Cancellation of Treasury Shares NT$46,050,000	None	Approved under Letter No. Jing-Shou-Shang-09301112810 dated July9,2004
April 2005	10	680,000,000	6,800,000,000	461,767,899	4,617,678,990	Conversion of Corporate Bonds to Common Shares - NT$765,035,090	None	Approved under Taiwan-Finance-Securities-(3) 09401061520 dated April 15,2005
July 2005	10	680,000,000	6,800,000,000	469,023,521	4,690,235,210	Conversion of Corporate Bonds to Common Shares - NT$72,556,220	None	Approved under Taiwan-Finance-Securities-(3) 09401130940 dated July15,2005
October 2005	10	680,000,000	6,800,000,000	475,812,986	4,758,129,860	Conversion of Corporate Bonds to Common Shares - NT$67,894,650	None	Approved under Taiwan-Finance-Securities-(3) 09401210150 dated October 20,2005
December 2005	10	680,000,000	6,800,000,000	455,812,986	4,558,129,860	Cancellation of treasury shares NT$200,000,000	None	Approved under Taiwan-Finance-Securities-(3) 09401260020 dated December 16,2005
January 2006	10	680,000,000	6,800,000,000	455,828,023	4,558,280,230	Conversion of Corporate Bonds to Common Shares - NT$150,370	None	Approved under Taiwan-Finance-Securities-(3) 09501016010 dated January26,2006
March 2006	10	680,000,000	6,800,000,000	452,980,023	4,529,800,230	Cancellation of Treasury Shares NT$28,480,000	None	Approved under Taiwan-Finance-Securities-(3) 09501036310 dated March 6,2006
April 2006	10	680,000,000	6,800,000,000	467,303,329	4,673,033,290	Conversion of Corporate Bonds to Common Shares - NT$143,233,060	None	Approved under Taiwan-Finance-Securities-(3) 09501064670 dated April 12,2006
July 2006	10	680,000,000	6,800,000,000	474,310,828	4,743,108,280	Conversion of Corporate Bonds to Common Shares - NT$70,074,990	None	Approved under Taiwan-Finance-Securities-(3) 09501141160 dated July10,2006
October 2006	10	680,000,000	6,800,000,000	481,431,107	4,814,311,070	Conversion of Corporate Bonds to Common Shares - NT$71,202,790	None	Approved under Taiwan-Finance-Securities-(3) 09501228400 dated October 12,2006
November 2006	10	680,000,000	6,800,000,000	477,684,107	4,776,841,070	Cancellation of Treasury Shares NT$37,470,000	None	Approved under Taiwan-Finance-Securities-(3) 09501262890 dated November 21,2006
January 2007	10	680,000,000	6,800,000,000	512,526,074	5,125,260,740	Conversion of Corporate Bonds to Common Shares - NT$348,419,670	None	Approved under Taiwan-Finance-Securities-(3) 09601003550 dated January9,2007
April 2007	10	680,000,000	6,800,000,000	523,962,133	5,239,621,330	Conversion of Corporate Bonds to Common Shares - NT$114,360,590	None	Approved under Taiwan-Finance-Securities-(3) 09601077550dated April 14,2007
April 2007	10	680,000,000	6,800,000,000	524,082,432	5,240,824,320	Conversion of Corporate Bonds to Common Shares - NT$1,202,990	None	Approved under Taiwan-Finance-Securities-(3) 09601091420 dated April 30,2007
March 2008	10	680,000,000	6,800,000,000	523,296,432	5,232,964,320	Cancellation of Treasury Shares NT$7,860,000	None	Approved under Taiwan-Finance-Securities-(3) 09701071000 dated March 27,2008
December 2008	10	680,000,000	6,800,000,000	503,652,432	5,036,524,320	Cancellation of Treasury Shares NT$196,440,000	None	Approved under Taiwan-Finance-Securities-(3) 09701317960 dated December 18,2008
December 2011	10	680,000,000	6,800,000,000	501,980,432	5,019,804,320	Cancellation of Treasury Shares NT$16,720,000	None	Approved under Taiwan-Finance-Securities-(3) 10001273350 dated December 1,2011

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Year/Month	Issue Price	Authorized capital	Authorized capital	Paid-upcapital	Paid-upcapital	Remarks	Remarks	Remarks
		Number of Shares	Amount	Number of Shares	Amount	Source of Capital	Paid in Properties Other Than Cash	Others
March 2012	10	680,000,000	6,800,000,000	497,689,432	4,976,894,320	Cancellation of Treasury Shares NT$42,910,000	None	Approved under Taiwan-Finance-Securities-(3) 10101035730 dated March 2,2012
August 2012	10	680,000,000	6,800,000,000	497,189,432	4,971,894,320	Cancellation of Treasury Shares NT$5,000,000	None	Approved under Taiwan-Finance-Securities-(3) 10101166240 dated August 13,2012
December 2015	10	680,000,000	6,800,000,000	490,468,432	4,904,684,320	Cancellation of Treasury Shares NT$67,210,000	None	Approved under Taiwan-Finance-Securities-(3) 10401267800 dated December 18,2015
May 2016	10	680,000,000	6,800,000,000	481,777,432	4,817,774,320	Cancellation of Treasury Shares NT$86,910,000	None	Approved under Taiwan-Finance-Securities-(3) 10501087510 dated May5,2016
August 2016	10	680,000,000	6,800,000,000	433,600,000	4,336,000,000	Capital Reduction - NT$481,774,320	None	Approved under Taiwan-Finance-Securities-(3) 10501192820dated August 15,2016
February 2017	10	680,000,000	6,800,000,000	425,000,000	4,250,000,000	Cancellation of Treasury Shares NT$86,000,000	None	Approved under Taiwan-Finance-Securities-(3) 10601017260 dated February13,2017
May 2017	10	680,000,000	6,800,000,000	422,222,000	4,222,220,000	Cancellation of Treasury Shares NT$27,780,000	None	Approved under Taiwan-Finance-Securities-(3) 10601055000 dated May1,2017
August 2017	10	680,000,000	6,800,000,000	380,000,000	3,800,000,000	Capital Reduction - NT$422,220,000	None	Approved under Taiwan-Finance-Securities-(3) 10601111970 dated August 3,2017
March 2018	10	680,000,000	6,800,000,000	370,000,000	3,700,000,000	Cancellation of Treasury Shares NT$100,000,000	None	Approved under Taiwan-Finance-Securities-(3) 10701029640 dated March 20,2018
February 2019	10	680,000,000	6,800,000,000	350,000,000	3,500,000,000	Cancellation of treasury shares NT$200,000,000	None	Approved under Taiwan-Finance-Securities-(3) 10801013940 dated February15,2019
June 2020	10	680,000,000	6,800,000,000	342,326,000	3,423,260,000	Cancellation of Treasury Shares NT$76,740,000	None	Approved under Taiwan-Finance-Securities-(3) 10901105320 dated June 22,2020

Note 1: Shall be filled with the data of the current year as of the publication date of the annual report.

Note 2: Effective (approval) date and letter number shall be filled in for increase of capital.

Note 3: Shares issued lower than their par value shall be marked in a clear manner.

Note 4: Offsetting shares using currency claims, technology or goodwill shall be indicated with information on type and amount of offset. Note 5: Private placements shall be marked in a clear manner.

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Stock Class	Authorized capital	Authorized capital	Authorized capital	Remarks
	OutstandingShares	Unissued Shares	Total
Registered Stocks	342,326,000	337,674,000	680,000,000	None

Note 1: The Company’s capital is amounted to NT$6.8 billion which is divided into 680 million shares with a par value of NT$10 per share.

Note 2: They are shares of a public company.

General Information About the Reporting System: None.

(II) Shareholder Structure:

(II) Shareholder Structure:	(II) Shareholder Structure:	(II) Shareholder Structure:	(II) Shareholder Structure:	(II) Shareholder Structure:	(II) Shareholder Structure:	(II) Shareholder Structure:
April 13,2021
Shareholder Structure Count	Government Agencies	Financial Institutions	Other Corporations	Individuals	Foreign Institutions and Foreigners	Total
Number of Persons	0	10	158	48,064	113	48,345
Shares Held	0	2,938,595	103,624,200	196,945,937	38,817,268	342,326,000
Proportion of Shareholding (%)	0.00%	0.86%	30.27%	57.53%	11.34%	100.00%

Note: All companies listing for the first time on TWSE/TPEx are required to disclose Chinese investors' holding interests. A Chinese investor refers to an individual, corporation, organization, or institution of Mainland origin, or any company owned by the above party in a foreign location, as defined in Article 3 of the "Regulation Governing Mainland Residents' Investment in Taiwan"

(III) Diversity of Ownership:

Par value of NT$10 per share Unit: Share; April 13

Range of Shares	Number of Shareholders	Shares Held	Shareholding Percentage (%)
1 to 999	27,134	5,309,713	1.55%
1,000 to 5,000	15,419	34,249,269	10.00%
5,001 to10,000	3,026	23,476,189	6.87%
10,001 to 15,000	784	9,768,486	2.85%
15,001 to 20,000	660	11,664,674	3.41%
20,001 to 30,000	476	11,895,409	3.47%
30,001 to 40,000	197	6,950,976	2.03%
40,001 to 50,000	192	8,709,365	2.54%
50,001 to 100,000	242	17,578,068	5.13%
100,001 to 200,000	99	13,967,334	4.08%
200,001 to 400,000	51	15,482,370	4.52%
400,001 to 600,000	20	10,011,378	2.92%
600,001 to 800,000	6	4,197,230	1.23%
800,001 to 1,000,000	3	2,573,089	0.75%
1,000,001以上	36	166,492,450	48.65%
Total	48,345	342,326,000	100.00%

Preferred Stock: None.

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(IV) Major Shareholders:

Shareholders holding 5% or more of the shares or names, numbers of shareholding and ratio of the top 10 shareholders:

Unit: Share; April 13, 2021

Names of Major Shareholders/Shares	Shares Held	Shareholding Percentage
Ruifu Construction Co.,Ltd.	34,070,754	9.95%
Chengxi Investment Co.,Ltd.	17,491,989	5.11%
Ascend Gear International Inc.	17,079,047	4.99%
Hohe Construction Co.,Ltd.	13,586,726	3.97%
Hsu Mei-Lun	9,596,720	2.80%
QuanxinfengCo.,Ltd.	8,942,410	2.61%
Citi (Taiwan) Commercial Bank is entrusted with the custody of the Norges Bank Investment	4,905,980	1.43%
Ren-Yu Investment Limited	4,323,000	1.26%
JPMorgan Chase Bank Taipei Branch is entrusted with the custody of Vanguard Group Company Manager's Vanguard Global Market Stock Index Fund Special Account	4,084,135	1.19%
He Min-Chuan	3,405,274	0.99%

(V) Market Price, Net Worth, Earnings, Dividends per Share and Other Relevant Information for the Most Recent 2 Years:

Item	Year	Year	2019	2020	Year-to-date as of March 31, 2021 (Note 8)
Market Price per Share (Note 1)	Highest		20.45	26.00	25.80
	Lowest		15.10	13.25	21.95
	Average		17.96	19.26	24.38
Net Worth per Share (Note 2)	Before Distribution		30.87	32.67	33.98
	After Distribution		30.07	(Note 9)	(Note 9)
Earnings Per Share	Weighted average shares		350,000,000	344,377,336	342,326,000
	Earningsper Share(Note 3)		1.54	2.62	0.63
Dividends per Share	Cash Dividends		0.8	1.5 (Note 9)	-
	Bonus shares	Retained Shares Distribution	0	0	-
		Stock Dividends from Capital Surplus	0	0	-
	Cumulative Undistributed Dividends(Note 4)		0	0	-
Return on Investment Analysis	P/E ratio (Note 5)		11.66	7.35	-
	Price / Dividend Ratio(Note 6)		22.45	12.84	-
	Cash Dividend Yield(Note 7)		4.45%	7.79%	-

*If there is a surplus or capital reserve to increase capitalization for distributing shares, the market price and cash dividend information adjusted retrospectively based on the number of shares to be issued shall be disclosed.

Note 1: Source: website of TWSE.

Note 2: Please fill in the number of shares issued at the end of the year and the distribution according to the resolution of the general meeting of shareholders of next year.

Note 3: If there is a retroactive adjustment from distribution of bonus shares, the pre-adjustment and adjusted surplus per share shall be listed.

Note 4: Dividends that have not been issued in the current year are accrued to the issuer of the annual surplus; the accumulated undistributed dividends of the current year should be disclosed separately.

Note 5: Price/Earnings Ratio = Average Closing Price for the Year / Earnings per Share

Note 6: Price/Dividend Ratio = Average Closing Price for the Year / Cash Dividends per Share

Note 7: Cash Dividend Yield = Cash Dividends per Share / Average Closing Price for the Year

Note 8: The data of net worth per share and earnings per share shall be based on the most recent quarter numbers audited by CPAs as of the printed date of the annual report; the remaining columns shall fill in the current year's data as of the publication date of the annual report.

Note 9: Earnings distribution of 2020 is still pending a resolution on the 2021 general meeting of shareholders.

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• (VI) The Company’s Dividend Policy and Implementation Status:

• Dividend Policy:

If there is a profit within the Company in the year, no less than 1% of the profit shall be set aside for employees’ remuneration and no less than 2% of the profit shall be set as remuneration for directors and supervisors. Where there is an accumulated loss, the profit shall be reserved to make up for the loss.

The employee remuneration may be determined by shares or cash and its receiving parties must include its serving employees in accordance with the requirements established by the Board of Directors. The remuneration of directors and supervisors of the preceding paragraph is determined by cash.

• The preceding 2 paragraphs are enforced after the Board of Directors’ resolution, and the shareholders must be reported to.

From the profit earned by the Company as shown through the final account, if any, the sum should first be used to pay taxes and make up for previous loss, the remaining should be distributed as follows:

• (I) 10% should be set aside as legal reserve, except for when the legal reserve has reached the total capital;

• (II) If necessary, it can be set aside according to the laws and regulations or for reversal of special reserve.

• (III) The remaining earnings as well as the accumulated undistributed earnings from the previous year, when the Board of Directors proposes the motion of earnings distribution, the appropriation of shareholder dividends shall not be less than 5% of the accumulated distributable earnings, and motion shall be submitted to the shareholder meeting for a resolution.

The life cycle of the Company is currently classified as the “mature period”. The Company strives to the pursuit of cooperate sustainable operation and corresponds with the future market needs. We take into consideration of the Company’s future capital expenditure budget and the need to maintain dividend distribution, among which, cash dividends may not be less than 10% of the aggregate amount of shareholders’ dividends. Whereas there are capital demands including significant investment, significant operation change, capacity expansion during the year, and other significant capital expenditures, the Board of Directors must propose a motion to change its cash dividends to all shares. The motion may be proceeded after an approval is gained by the shareholders meeting.

1. Dividend Distribution Proposed for the this Shareholders Meeting:

Formosan Rubber Group Inc. Earnings Distribution Table 2020

Formosan Rubber Group Inc. Earnings Distribution Table 2020	Formosan Rubber Group Inc. Earnings Distribution Table 2020
Unit: NTD＄
Item	Amount
Undistributed earnings at the beginning of the period	4,498,124,363
Add: Current net income	901,716,046
Add: Reversal of IFRS accounts and special reserve of related unrealized revaluation increments	9,255,604
Less: Treasurystock write-off due to capital reduction	(42,755,681)
Disposal of equity instruments investment measured at fair value through other comprehensive income	(5,785,374)
Less: Other comprehensive income (actuarial gains and losses of defined benefitplans)	(704,377)
The net profit after tax of the period, plus items other than The net profit after tax of the period, accounted into the undistributed earnings of the year	861,726,218
Undistributed earnings after adjustment	5,359,850,581
Less: 10%provision for legal reserve	(86,172,622)
Subtotal	(86,172,622)
Distributable net profit	5,273,677,959
1. Shareholder Dividends (342,326,000 shares x cash dividend NT$1.5)	(513,489,000)
Subtotal	(513,489,000)
Accumulated undistributed earnings at the end of the period	4,760,188,959

Note 1: The amount of earnings are distributed with priority of 2020 net.

Chairperson: Hsu Zhen-Tsai Managerial Officer: Hsu Zhen-Ji Chief Accounting Officer: Shi Ming-De

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(VII) The effects of stock grants drafted by this shareholders’ meeting on The Company’s operating performance and earnings per share: There was no non-distributable shares, it is therefore not applicable.

• (VIII) Employees’ compensation and remuneration of directors and supervisors

• Information Relating to Remuneration of Employees and Directors in the Company's Articles of Incorporation: Please refer to Chapter (VI) of this Article - “Dividend Policy”.

• The accounting of the difference between the estimates of remuneration to employees and directors, the basis for the calculation of outstanding shares for dividend payment and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated figure:

  • According to the charter, the Company’s remuneration to employees is recognized as expenses and not distribution of earnings. It is recognized during the accounting period when employees provide labor services according to the charter. If the estimated amount differs from the actual distribution amount passed by the shareholders meeting, it is treated according to the changes in accounting estimates which is adjusted into account on the shareholders meeting the following year.

• Information on the proposed remuneration to employees passed by the Board of Directors: Passed on the Company’s board meeting on March 19, 2021

  • (1) The amount of proposed distribution to employees in cash and remuneration to director: Cash remuneration of NT$9,491,000 to employees and NT$9,491,000 to directors.

  • (2)i. Proposed remuneration to employees in shares: NT$0.

    • ii. Amount of stock distributed as employee remuneration and as a percentage to net income of parent company only or individual financial statements and aggregate remuneration to employees: None.

  • (3) After remuneration to employees and directors, the proposed EPS is NT$2.62

  • (4) The amount of estimated distribution of remuneration to employees and directors approved by

the Board of Directors is consistent with the amount in the 2020 financial statements.

1. Actual remuneration distributed to employees, directors and supervisors (including distribution number of shares, amount, and share price) in the previous year, any difference with its recognized remuneration distributed to employees , directors and supervisors, its reason and in which they were handled:

Passed on the Company’s board meeting on March 20, 2020 and the actual distribution

• (1) Actual remuneration distributed to employees: NT$5,613,000, and NT$5,613,000 to directorsand supervisors..

(2)i. Proposed remuneration to employees in shares: NT$0.

• ii. Amount of stock distributed as employee remuneration and as a percentage to net income of parent company only or individual financial statements and aggregate remuneration to employees: None.

• (3) Actual remuneration to employees and directorsand supervisors, the proposed EPS is NT$1.54.

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• (4) There is no difference between the proposed distribution of 2019 to employees in cash and remuneration to directorsand supervisors and the amount recognized as a provision.

(IX) Repurchase of Shares:

IX) Repurchase of Shares:
	(June 22,2020)
Repurchase period	24th time (period)
Repurchase purpose	To maintain the Company’s credit and the right and interest of our shareholders
Buyback period:	2020/03/24 ~ 2020/05/22
Repurchase range price	NT$13 - NT$18
Class and number of shares already repurchased	Common shares 7,674,000 shares
Amount of repurchased shares	129,617,839
The number of repurchased shares to estimated repurchase number(%)	0.3837%
Number of shares cancelled or transferred	7,674,000 shares
Accumulated number of shares held by the Company	0
Ratio of the accumulated number of shares held by the Company to the total number of issued shares(%)	0
Date of the cancellation completion and document number	June 22, 2020 Taiwan-Finance-Securities-10901105320

Note 1: Adjust the number of columns according to the numbers of issuance.

II. The Company's Handling of Corporate Bonds: None.

• III. The Company's Preferred Stocks: None.

• IV. Global Depository Receipts: None.

• V. Employee Stock Options: None.

• VI. New Restricted Employee Shares: None.

• VII. New Shares Issued for Merger or Acquisition: None.

• VIII. Progress on Planned Use of Capital: None.

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V. Operational Highlights

I. Business Activities

• (I) Scope of Business

• (II) Industry Overview

• (III) Technology and R&D Status and the Progress of Future Plans and Estimated Investment Expenses

• (IV) Long-Term and Short-Term Business Development Plans

• II. Market and Production and Sales Overview

• (I) Market Analysis

• (II) Important Uses and Production Process of Major Products

• (III) Supply Situation for Major Raw Materials

• (IV) The Major Customers that Accounted for more than 10% of the Total Procurement (sales) of Goods in any of the Past Two Years and the Amount and Proportion of the Goods Sold

• (V) Production Volume and Value in the Last 2 Years

• (VI) Sales Volume in the Last Two Years

• III. The Number of Employees Employed for the 2 Most Recent Years, and during the Current Year as of the Date of Publication of the Annual Report

• IV. Expenditure for Environmental Protection

• V. Labor Relations and Employee Rights

• VI. Important Contracts

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V. Operational Highlights

I. Business Activities

• (I) Scope of Business:

• The main business contents:

  • (1) Manufacturing and selling products including: plastic raincoat material, plastic clip fabric, polyvinyl chloride rubber, plastic air bed, automotive parts, rubber boat material, rubber tape, rubber foam bag fabric, rubber air bed, rubber space bag , Polyurethane inflatable bed, and polyurethane inflatable boat fabric.

  • (2) In terms of diversified operation, the Company has added the following to its business items:

    1. Manufacturing and selling products including: plastic space bags, plastic oil canvas, polyurethane high-performance fabrics, polyurethane high-inflatable fabrics, and rubber foam women's bags

    2. Purchasing and selling of related machinery and equipment for the production, trading and raw materials of the preceding paragraph.

    3. Operation of general import and export trade and agency services (except licensing business).

    4. Management of cinemas, department stores and supermarkets

    5. Manufacturing and trading of environmental protection equipment.

    6. Manufacturing and sales of rubber and plastic products for aircraft fuel tanks and inflatable rescue ladders.

    7. Manufacturing and trading of IC products.

    8. Operation of leisure and sports facilities (bowling, tennis, table tennis, badminton, billiards and swimming pool).

    9. Commission construction companies to build public housing, commercial buildings and general industrial plant, and warehouse rental and sales.

    10. Lease and sale of the remaining plant buildings and office buildings.

    11. Manufacturing and selling of silicone rubber, silicone resin, silicone oil, silicone sealant, resin materials for electronics, protective film for electronic wafers, and printed circuit boards.

    12. Manufacturing and selling of various industrial synthetic resins, resin pellets, and adhesives.

    13. Manufacturing and selling of color inkjet photo paper and polyolefin films.

    14. D101050 Steam and Electricity Paragenesis

    15. G801010 Warehousing and Storage

    16. All business items that are not prohibited or restricted by law, except those that are subject to licensing business.

• Business ratios:

  • (1) Business ratios for various products

subject to licensing business. ess ratios: usiness ratios for various products
		Unit: thousand
Item	2020	%
Construction	2,206,748	67.23%
Rubber Sheet	449,941	13.71%
Plastic	171,835	5.24%
Eco-FriendlySynthetic Leather	185,610	5.65%
Warehouse	230,671	7.03%
Others	37,450	1.14%
Total	3,282,255	100%

(2) Business ratios for various regions:

Unit: thousand

thousand
Region\year		2020	%
Domestic sales		292,027	35%
Overseas sales	Asia	326,893	39%
	Europe	136,752	16%
	North America	87,534	10%

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	Other regions	1,630	0% 65% 100%
	Total of overseas sales	552,809
Total		844,836

Note: Construction and warehouse revenue are not included in domestic sales.

1. Statistics on Key Performance Indicator (KPI) of Formosan Rubber Group Inc. Explanation: The KPI of Formosan Rubber Group Inc. is the product recovery rate = Grade A ÷ input

Rubber Sheet	90.0%	Input	1,021,500	1,043,015	2,064,515
		Grade A	939,372	980,358	1,919,730
		Recovery Rate	92.0%	94.0%	93.0%
Synthetic Leather	99.0%	Input	2,079,222	1,671,456	3,750,678
		Grade A	2,045,432	1,650,899	3,696,331
		Recovery Rate	98.4%	98.8%	98.6%
Eco-Friendly Synthetic Leather	94.0%	Input	1,930,772	1,154,324	3,085,096
		Grade A	1,854,247	1,116,876	2,971,123
		Recovery Rate	96.0%	96.8%	96.3%

• (II) Industry Overview:

• Secondary Processing Industries:

According to the long-term statistics of Germany, the total market of global rubber and plastic demands will maintain its slow growth each year. Of which, the transportation industry, medical industry, and environmental protection will outperform, and the first two are precisely within the Company’s technical strengths. Affected by the COVID-19 pandemic in 2020, the mobility of people in various countries was restricted, resulting in a severe shutdown of economic activities. However, as the rollout of vaccines mitigates the pandemic, and relief policies have worked, all economies are showing signs of recovery. However, in order to revitalize the economy, countries all over the world are expanding fiscal expenditures, causing the fiscal deficit to rise sharply. In the next few years, the deleverage task faced by governments will be more challenging than ever. In case a sovereign debt crisis breaks out, it may quickly spread to other economies, and plunges the global economy into another larger debt crisis. In addition, the Sino-US trade dispute has not yet ended. The International Monetary Fund (IMF) believes that the Sino-US trade disputewill bring significant uncertainty to the global economy and hinder investment, severely hurt the trend of business and financial markets, and disrupt the global supply chain. Combining the above unfavorable elements, in 2021, we will do our utmost to surpass the Company's total target sales of rubber and plastic synthetic leather of 10,089 thousand yards which was reached in 2020.

1. Nankan Warehouse and Logistics Industry:

2. (1) The Company had started to plan for the investment development of Nankan Logistics Park ever since 1996. As the means for the Park to be unique, each building was designed to have a slewing lane, ensuring direct uploading and unloading of shipment for trucks on each floor and that the second floor could be used as the first floor. Our warehouse has met the international logistic and warehouse standards and has attracted large European, American and Japanese companies to enter. Since 1996, we have completed the construction of 6

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buildings on its 12,000 pings (39,670 square meters) of land with a total of 38,220 pings (126,248 square meters) of space, among these, 10,500 pings (34,711 square meters) were for sale and 27,720 pings (91,637 square meters) were for lease. We provided higher warehouse building standards than the industry in order to attract well-known customers to enter the Park, allowing Formosan Rubber Group Inc. to be the most fitted model in the logistics rental and leasing business and services for Formosan. It is estimated that the revenue for warehouse leases and logistics in 2021 will be more than NT$200,000,000

• (2) In 2003, our logistics center acquired the Logistics License approved by the Customs Administration, Ministry of Finance Taipei Customs, and has been recognized 3 times by receiving the Award for Excellent Trading Businesses presented by the Ministry of Economic Affairs. We provide our customers a logistics environment that is safer as well as diversified service models. We also introduce customers of different industries, allowing Formosan Rubber Group Inc. to be the most fitted model in the logistics services.

• Land Development Status of the Company:

• (1) The sales of the reserved apartments for “World Garden - Bridge Upto Zenith”, and “Modesty Home”

There were only a few residential apartments remaining at “World Garden - Bridge Upto Zenith” and “Modesty Home”. By judging the real estate market, we entrusted the sales of the residential apartments and took steps gradually, allowing steady sales, and we have now sold out all the residential apartments.

• (2) Xindian “Legend River”

With the opening of the MRT Circular Line soon and the development of the Yangbei Replanning Area, the market has gradually recovered and the selling rate has stabilized.

• (3) The land development of “55Timeless” in Xinyi Planning District

With the building of high specifications and the public facilities of an art gallery, it has become one of the international-grade landmarks for luxury residential apartments. Its exceptional construction quality has been widely favored and designated by our high-end customers. Under the impact of the US-China trade war, we have seen a situation where funds have gradually returned to Taiwan. The sales for high price with large space residential apartments have increased compared to the previous year. With the Company’s flexible use of strategies, the apartments continued selling.

• (4) The land development of “La Bella Vita” for the replanning area in Taichung Phase 7. The use permit was obtained upon completion in January 2020. The handover to the customers bought in the pre-sale stage has been completed. The real estate market of the 7th Phase, Taichung City is very active, and thus the selling prices are stablized. The major selling point of “La Bella Vita” is planned to be the real model house designed for “La Bella Vita” specifically by the architecture Antonio Citterio and renowned cabinet brand, to increase the sales synergy with cross-industry alliance.

• (5) FRG Bridge Upto Zenith Business Plaza

FRG Qiao Feng Business Plaza is located on the first and second floors of No. 168-180, Section 1, Zhongshan Road, Banqiao, covering an area of 1,882 pings (6221 square meters). The first floor of the business plaza has been leased to E.SUN Commercial Bank;

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the second floor has been leased to Nan Shan Life Insurance Co., Ltd. and SinoPac Securities Corporation; the second floor of the business plaza at building B has been leased to the infant care center, Bell’s Home. The occupancy rate is 100%. FRG Qiao Feng Business Plaza has become an exquisite business center of Banqiao.

• (6) San Francisco and Hotel Development Project

Our subsidiary (FRG US Corp.) established in the US in 2017 participates in the construction investments; The subsidiary’s investment in the project is approximately 11.23% The entire plan for the project consists of 242 luxury residential apartments, 10 retail stores, and a trendy hotel with 236 rooms. The completion is expected in Q3, 2021.

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• (III) Technology and R&D Status and the Progress of Future Plans and Estimated Investment Expenses:

• (1) The technical level and research development of the business:

  • As a means to lead the transformation of the technology industry, the Company established the R&D center in the early 1990s and recruited researches with a master’s degree. The Company worked vigorously to research and develop products for new uses, new materials and new process and has become a successful example in the transformation of traditional industries by establishing advanced technology research and develop capabilities. We are the only company in Taiwan to have won the National Quality Award for 5 consecutive years (1991-1995) presented by the Industrial Development Bureau. Aside maintaining the same production quality for the current products, we constant work on the further development on aspects including defense, medical, industrial, safety maintenance, special environmental airtightness, green energy environmental protection, electrical protection, and nuclear protection.

• (2) R&D Personnel and Their Education and Experiences:

The Company has a total of 12 R&D personnel, among these 7 people hold a master degree, 4

people hold a bachelor degree and 1 person is an undergraduate.

• (3) R&D expenses for the most recent 5 years (2016-2020):

				Unit: thousand
2016	2017	2018	2019	2020
14,383	14,047	13,056	13,097	9,917

• (4) Material Results:

In 2020, we have successfully acquired 2 patents:

[1]	ROC Patent for Flame Retardant Fabric and its Manufacturing Method
[2]	ROC Patent for Rubber Tarpaulin and their Preparing Method

There are another 12 patent applications pending.

(5) The process of the future R&D plans and estimated R&D investment expenses for Formosan

Rubber Group Inc.

Recent annual plans	Current process	R&D expenses that should be further invested	Time to complete mass production	Major factors for the future R&D to succeed
Product development of rubber soundproofing pad products	1. The sample of rubber soundproofing pad has been sent to the national lab for testing. 2. The investment in production equipment suitable for the production of rubber soundproofing pad products.	USD $ 100,000	December 2021	1. Established the related regulations with a market and customers. 2. To overcome the stability of the vulcanization products, which has affected the product yield at the beginning of the period.
PCB & CCL mold- pressed laminated buffer	1. Samples have been finished, and tests have been completed. 2. Evaluation of the existing product equipment to conform to the product manufacturing process.	USD $ 100,000	December 2021	1. First the existing production equipment in the plant is applied to accommodate the development. 2. Decided the order of product development by integrating the demands of users.
Life raft cold-resistant formula (-70 C) project	1. Samples have been furnished to the clients for outdoor physical testing. 2. Competitors have already had corresponding products to the customer whichpose aprice	USD $ 5,000	December 2021	1. Large goods of the cold resistance must be confirmed to meet customer requirements. 2. The time for the customer to make confirmation has effected the number of the

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Recent annual plans	Current process	R&D expenses that should be further invested	Time to complete mass production	Major factors for the future R&D to succeed
	advantage.			current orders.
Development of arc proof protective garment	1. The materials of Neoprene Arc arc proof protective garment have been delivered to clients. 2. Holistic promotion of arc proof protective garment products and keeping on following-up	USD $ 5,000	December 2021	1. Neoprene Arc arc proof protective garment is the product with high unit price and high specifications; the quality must be assured before shipment. 2. Stablizing production and enhancing yield.
National-level - national vehicles manufactured in Taiwan plan	1. Flexible rubber duct. 2. The high-wear-resistant and low-smoke carriage floor materials for trains meeting EN standards, have been delivered to the be used in the Loop Line, and we continue to follow up.	USD $ 5,000	December 2021	1. Replacement of special rubber floor materials for high-speed rail, MRT and railway carriages. 2. Close partnership with customers to increase the technology level to increase orders for rubber floor used in carriages.
To develop high-wear- resistant and low- smoke joint seam materials used in carriages in compliance with EN & BS standards	1. The high-wear-resistant and low-smoke joint seam carriage materials for trains have been delivered to the customer and we continue to follow up. 2. Competitors in Europe and the US already have joint seam materials used in carriages that comply with EN & BS standards.	USD $ 5,000	December 2021	1. The high-wear-resistant and low-smoke joint seam carriage materials for trains is a market trend; therefore the quality must be fully confirmed. 2. Close partnership with customers to increase the technology level to increase orders for joint seam materials used in carriages.
Development project for diversified products such as joint seam materials used in carriages.	1. Stable orders have been received by customers, and keeping on following up. 2. The molding machine area has been established, pending operator training to familiarize with the machine in order to improve theyield.	USD $ 5,000	December 2021	1. Customers use joint materials with corners, and extended the development on the existing core expertise. 2. The corner forming and vulcanization accommodate each other.
TPU slippery product development project	1. A small quantity of slippery TPU has been delivered to the customer - pending confirmation regarding the durability. 2. Film temperature machine equipment has been added.	USD $ 5,000	December 2021	1. To control the surface temperature of the TPU film effectively during the production process. 2. To ensure the quality of the customer’s demand.
Product development project for rubber and TPU drop-stitch inflatable air cushion	1. Various drop-Stitch rubber and TPU inflatable air cushions have been completed and delivered for trial use by thousands of aircrafts. 2. Drop-Stitch is imported fabrics, information on market price and quantity should be searched and plan inventory quantities.	USD $ 10,000	December 2021	1. The production procedures for Drop-Stitch products are complex and difficult, and there are still wrinkles in the packing which should be fixed. 2. Technology is continuously being developed and new equipment added; the Company is trying to simplify the production process and improveyield.

(IV) Long-Term and Short-Term Business Development Plans:

The business developments of the Company are divided into 3 sections:

I. Secondary Processing Industries:

• (1) Short-term development plans:

• A. By signing annual sales contracts with major customers - ensuring stable performance of 60% or more.

• B. By improving quality - continue to establish OEM/ODM partnership with international major manufactures to ensure turnover.

• C. By making good use of equipment - develop multi-colored and specification productions, ensuring customers’ brand loyalty.

• D. By the continual technical partnership with European, American and Japanese plants - create new products and introduce them to new markets.

• E. By additional new production lines - develop related products and one stop shop service, fulfilling customers’ needs.

• F. By investing with precision - principles of full production, order delivery and gradually adjust the inventory.

• (2) Long-term development plans:

• A. By developing new products - set the goal of new product performance accounting for 30% of the overall manufacturing performance, hoping for steady growth in annual turnover.

• B. By adding energy-related industries - rubber products needed for process supply chain, constantly creating products that meet the needs of green energy.

• C. By continuing to optimize environmentally friendly products - to obtain long-term orders from advanced European and American customers who attach great importance to the environment.

• D. By promoting Formosan Dragon (Formosan popular products) - expand the products of Formosan Dragon and enhance promotion by providing customers the certification

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report to accelerate the recognition of Formosan products.

  - E. By providing customers the opportunity for “one stop shopping” - including rubber, plastics, green plastics, PU coating, PU lamination, silicone), providing most customers multiple product choices that allows horizontal integration and development between departments.

  - F. By offering a wide range of product applications - mainly applied on medical, clothing, industrial safety, nautical, inflatable, shoe materials, boxes and bags, electronic consumables fields; each manufacturing department is able to share the result of R&D as well as develop unique products horizontally so that new products and popular products complement each other.

• II. Nankan Warehouse Logistics and Rental and Leasing Business:

• (1) Short-term business development plans:

Logistics rental and leasing services proactively continue to invest in the operation of integrated property management service center to meet different needs of customers. In the short term, Formosan Longtan R&D building and land will be integrated for effective uses, providing customers a choice for new bases, hoping to build new plants to expand the service performance of the Company.

• (2) Long-term business development plans:

  • Logistics rental and leasing services and experiences in logistics will be integrated into a one-stop service which will provide customized services according to the needs of customers, allowing to fulfill customer needs while expanding their plant area to prevent the loss of customers. A plant will also be built in Longtan, increasing the Company’s diversified management direction.

• III. Real Estate Development

• (1) Short-term development plans:

In a bid to continue the real estate development experience and creating the long-term stable profit for the Company, not only do we have our own real estate assets, we also focus on other suitable land or individual projects. In addition to resident buildings, development of commercial spaces of considerable size are also planned. Not only can commercial real estate developments acquire long-term stable rent income, they also covers fields of business plaza operation, real estate management and property management.

• (2) Long-term development plans:

With the Company's accumulated strength and brand value increasing day by day with construction development business, and based on the needs of long-term development, aside the current development projects, we have also been diligently seeking individual projects that meet the Company’s circumstances.

II. Market and Production and Sales Overview:

• (I) Market Analysis:

• Market supply and demand status and growth:

  • (1) Main product sales areas:

		Unit: thousand	Unit: thousand	Unit: thousand	Unit: thousand
Region\year		2019	%	2020	%
Domestic	sales	277,604	28.89%	292,027	34.57%
Overseas sales	Asia	407,605	42.42%	326,893	38.69%
	Europe	196,929	20.50%	136,752	16.19%
	North America	78,433	8.16%	87,534	10.36%
	Other regions	327	0.03%	1,630	0.19%
	Subtotal	683,294	71.11%	552,809	65.43%
Total		960,898	100.00%	844,836	100.00%

Note: Construction and warehouse revenue are not included in domestic sales.

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(2) Market share:

==> picture [422 x 231] intentionally omitted <==

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

The global market share of Global Market Share of Rubber Sheet in 2020: Global Market Share of Synthetic Leather in 2020:
rubber leather in 2020:
About 0.50%
Global market share of The Company The Company
plastic leather in 2020: 0.50% 0.03%
About 0.03%
Global market share of green
plastic leather in 2020:
About 0.18%
Manufacturing industry's Others Others
global market share in 2020:
99.50% 99.97%
About 0.24%
Global Market Share of Eco-Friendly Synthetic Leather in Global Market Share of Manufacturing Industry in 2020:
2020:
The Company The Company
0.18% 0.24%
Others Others
99.82% 99.76%
----- End of picture text -----

• (3) Market Supply and Demand Status and Growth in the Future:

2020, the COVID-19 pandemic spread rapidly around the world, the momentum of global trade and investment fell sharply, and the global economy was severely shocked. However, with the development and production of the COVID-19 vaccine and large-scale vaccination, the global economy is expected to gradually improve and back to the track However, the Sino-US trade dispute has not stopped, and the United States will cooperate with allies to contain China. Other the factor of the COVID-19 pandemic, Japan's economic activities have been affected by the Sino-US trade war and the Japan-South Korea trade dispute successively. Europe has implemented strict lockdown measures to control the pandemic. The emerging ASEAN economies have continued to suffer severe pandemics due to their weaker medical infrastructure. As a result, strict lockdown and quarantine measures have been expanded, and economic activities have suffered a severe impact. The path to global trade recovery is full of uncertainties, and it is expected that the economic prosperity will on be returned to the pre-pandemic level in 2022. Therefore, by continuously developing new products, improving quality and strictly controlling costs based on the market orientation, the sustainable development of the Company may be ensured.

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(4) Competitive Niche:

Due to high barriers to entry in terms of production scales, technology patents, and quality assurance, currently there are only European, American and Japanese advanced manufacturers (such as the Company) who are able to produce the 3 big growing fields mentioned above,; there are very limited competitors. We have advantages such as a capital scales of more than USD 10 million, 69 technologies and various of patents, ISO-14001 and 5 National Quality awards; therefore we have devoted ourselves to invest in the 3 big growing markets mentioned above. We differ ourselves to our competitors in order to staying in the leader position of one-stop purchase for rubber, plastics, and eco-Friendly synthetic leathers in Taiwan.

(5) Favorable Factors for the Development Vision:

Product Lines	Market Type	Staple Merchandise Market	Electronic Materials Market	Medical Materials Market	Automotive Materials Market	Environmental Materials Market
Rubber Sheet	Future Favorable Factors	Rubber sheet used in the staple merchandise market - the Company is the only manufacturer in Taiwan with such technology	Rubber sheet used in the electronic materials market - the Company has the largest manufacturing scales among Taiwanese manufacturers	Rubber sheet used in the medical materials market - the Company has the largest manufacturing scales among Taiwanese manufacturers	Rubber sheet used in the automotive materials market - the Company has the largest manufacturing scales among Taiwanese manufacturers	Rubber sheet used in the environmental materials market - the Company is the only manufacturer in Taiwan with such technology
Synthetic Leather	Future Favorable Factors	Synthetic leather used in the staple merchandise market - the Company has the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the electronic materials market - the Company has the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the medical materials market - the Company has the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the automotive materials market - the Company has the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the environmental materials market - the Company has the largest manufacturing scales among Taiwanese manufacturers
Eco-Friendly Synthetic Leather	Future Favorable Factors	Eco-friendly synthetic leather used in the staple merchandise market - the Company has the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leather used in the electronic materials market - the Company has the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leather used in the medical materials market - the Company has the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leather used in the automotive materials market - the Company has the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leather used in the environmental materials market - the Company has the largest manufacturing scales among Taiwanese manufacturers

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(6) Unfavorable factors for the development vision:

Product Lines	Market Type	Staple Merchandise Market	Electronic Materials Market	Medical Materials Market	Automotive Materials Market	Environmental Materials Market
Rubber Sheet	Future Unfavorable Factors	Due to the conservative market, needs for rubber sheet used in the staple merchandise market slow down	Due to the conservative market, it is not easy to expand business for rubber sheet used in the electronic materials market	Due to the conservative market, it is not easy to expand business for rubber sheet used in the medical materials market	Due to the conservative market, it is not easy to expand business for rubber sheet used in the automotive materials market	Due to the conservative market, it is not easy to expand business for rubber sheet used in the environmental materials market
Synthetic Leather	Future Unfavorable Factors	Due to the conservative market, the competitiveness decreases in synthetic leather used in the staple merchandise market	Due to the conservative market, it is not easy to expand business for synthetic leather used in the electronic materials market	Due to the conservative market, it is not easy to expand business for synthetic leather used in the medical materials market	Due to the conservative market, it is not easy to expand business for synthetic leather used in the automotive materials market	Due to the conservative market, it is not easy to expand business for synthetic leather used in the environmental materials market
Green plastics	Future Unfavorable Factors	Due to the conservative market, the competitiveness decreases in eco-friendly synthetic leather used in the staple merchandise market	Due to the conservative market, it is not easy to expand business for eco-friendly synthetic leather used in the electronic materials market	Due to the conservative market, it is not easy to expand business for eco-friendly synthetic leather used in the medical materials market	Due to the conservative market, it is not easy to expand business for eco-friendly synthetic leather used in the automotive materials market	Due to the conservative market, it is not easy to expand business for eco-friendly synthetic leather used in the environmental materials market

(7) Countermeasures for the development vision:

Product Lines	Market Type	Staple Merchandise Market	Electronic Materials Market	Medical Materials Market	Automotive Materials Market	Environmental Materials Market
Rubber Sheet	Future countermeasures	All innovative products will gain patents and be produced exclusively, to create high profits and high barriers to entry.	All innovative products will gain patents and be produced exclusively, to create high profits and high barriers to entry.	All innovative products will gain patents and be produced exclusively, to create high profits and high barriers to entry.	All innovative products will gain patents and be produced exclusively, to create high profits and high barriers to entry.	All innovative products will gain patents and be produced exclusively, to create high profits and high barriers to entry.
Synthetic Leather	Future countermeasures	Sign annual supply contract with long-term quality customers, ensuring monthly basic shipments.	Sign annual supply contract with long-term quality customers, ensuring monthly basic shipments.	Sign annual supply contract with long-term quality customers, ensuring monthly basic shipments.	Sign annual supply contract with long-term quality customers, ensuring monthly basic shipments.	Sign annual supply contract with long-term quality customers, ensuring monthly basic shipments.
Green plastics	Future countermeasures	Establish international business line in Europe, America, Japan and Greater China, increasing the proportion of overseas sales.	Establish international business line in Europe, America, Japan and Greater China, increasing the proportion of overseas sales.	Establish international business line in Europe, America, Japan and Greater China, increasing the proportion of overseas sales.	Establish international business line in Europe, America, Japan and Greater China, increasing the proportion of overseas sales.	Establish international business line in Europe, America, Japan and Greater China, increasing the proportion of overseas sales.

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1. Analysis of the Overall Economic Environment of the Formosan and the Trends of its Industry (1) Current Status and Development of the Industry

Industry Trends	Product Lines	Item	Staple Merchandise Market	Electronic Materials Market	Medical Materials Market	Transportation Materials Market	Environmental Materials Market
(1) Current Status and Development of the Industry	Rubber Sheet	Current Status of the Industry	Rubber sheet used in the staple merchandise market - the Company is currently the only manufacturer in Taiwan with such technology	Rubber sheet used in the electronic materials market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Rubber sheet used in the medical materials market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Rubber sheet used in the transportation materials market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Rubber sheet used in the environmental materials market - the Company currently is the only manufacturer in Taiwan with such technology
		Development of the Industry	Current annual growth rate is approximately 2%	Current annual growth rate is approximately 2%	Current annual growth rate is approximately 4%	Current annual growth rate is approximately 4%	Current annual growth rate is approximately 3%
	Synthetic Leather	Current Status of the Industry	Synthetic leather used in the staple merchandise market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the electronic materials market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the medical materials market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the transportation materials market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the environmental materials market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers
		Development of the Industry	Current annual growth rate is approximately1%	Current annual growth rate is approximately2%	Current annual growth rate is approximately4%	Current annual growth rate is approximately3%	Current annual growth rate is approximately3%
	Green plastics	Current Status of the Industry	Eco-friendly synthetic leatherused in the staple merchandise market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leatherused in the electronic materials market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leatherused in the medical materials market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leather used in the transportation materials market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leather used in the environmental materials market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers
		Development of the Industry	Current annual growth rate is approximately1%	Current annual growth rate is approximately2%	Current annual growth rate is approximately4%	Current annual growth rate is approximately2%	Current annual growth rate is approximately3%

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(2) Industry relevance of upstream, midstream and downstream companies

Industry Trends	Product Lines	Item	Staple Merchandise Market	Electronic Materials Market	Medical Materials Market	Transportation Materials Market	Environmental Materials Market
(2) Industry relevance of upstream, midstream and downstream companies.	Rubber Sheet	Upstream Companies	Manufacturer for rubber raw materials (example: Denka)	Manufacturer for rubber raw materials (example: Denka)	Manufacturer for rubber raw materials (example: Denka)	Manufacturer for rubber raw materials (example: Denka)	Manufacturer for rubber raw materials (example: Denka)
		Midstream Companies	Manufacturer for synthetic rubber (example: the Company)	Manufacturer for synthetic rubber (example: the Company)	Manufacturer for synthetic rubber (example: the Company)	Manufacturer for synthetic rubber (example: the Company)	Manufacturer for synthetic rubber (example: the Company)
		Downstream Companies	Process plant of rubber staple merchandise	Process plant of rubber electronic materials	Process plant of rubber medical materials	Process plant of rubber transportation materials	Process plant of rubber environmental materials
	Synthetic Leather	Upstream Companies	Manufacturer for plastic raw materials (example: Formosa Plastics Group)	Manufacturer for plastic raw materials (example: Formosa Plastics Group)	Manufacturer for plastic raw materials (example: Formosa Plastics Group)	Manufacturer for plastic raw materials (example: Formosa Plastics Group)	Manufacturer for plastic raw materials (example: Formosa Plastics Group)
		Midstream Companies	Manufacturer for PU synthetic leather (example: the Company)	Manufacturer for PU synthetic leather (example: the Company)	Manufacturer for PU synthetic leather (example: the Company)	Manufacturer for PU synthetic leather (example: the Company)	Manufacturer for PU synthetic leather (example: the Company)
		Downstream Companies	Process plant of plastic staple merchandise	Process plant of plastic electronic materials	Process plant of plastic medical materials	Process plant of plastic transportation materials	Process plant of plastic environmental materials
	Green plastics	Upstream Companies	Manufacturer for eco- friendly synthetic leather raw materials (example: Merquins)	Manufacturer for eco- friendly synthetic leather raw materials (example: Merquins)	Manufacturer for eco- friendly synthetic leather raw materials (example: Merquins)	Manufacturer for eco- friendly synthetic leather raw materials (example: Merquins)	Manufacturer for eco- friendly synthetic leather raw materials (example: Merquins)
		Midstream Companies	Manufacturer for eco- friendly synthetic leather (example: the Company)	Manufacturer for eco- friendly synthetic leather (example: the Company)	Manufacturer for eco- friendly synthetic leather (example: the Company)	Manufacturer for eco- friendly synthetic leather (example: the Company)	Manufacturer for eco- friendly synthetic leather (example: the Company)
		Downstream Companies	Process plant of eco- friendly synthetic leatherstaple merchandise	Process plant of eco- friendly synthetic leatherelectronic materials	Process plant of eco- friendly synthetic leathermedical materials	Process plant of eco- friendly synthetic leathertransportation materials	Process plant of eco- friendly synthetic leatherenvironmental materials

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(3) Various Product Development Trends and Competitiveness Status

Industry Trends	Product Lines	Item	Staple Merchandise Market	Electronic Materials Market	Medical Materials Market	Transportation Materials Market	Environmental Materials Market
(3) Various Product Development Trends and Competitiveness Status	Rubber Sheet	Future Favorable Factors and Development Trends	Rubber sheet used in the staple merchandise market - the Company will be the only manufacturer in Taiwan with such technology	Rubber sheet used in the electronic materials market - the Company will have the largest manufacturing scales among Taiwanese manufacturers	Rubber sheet used in the medical materials market - the Company will have the largest manufacturing scales among Taiwanese manufacturers	Rubber sheet used in the transportation materials market - the Company will have the largest manufacturing scales among Taiwanese manufacturers	Rubber sheet used in the environmental materials market - the Company will be the only manufacturer in Taiwan with such technology
		Future Unfavorable Factors and Competitiveness Status	Due to the conservative market, needs for rubber sheet used in the staple merchandise market decreases. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the conservative market, it is not easy to expand business for rubber sheet used in the electronic materials market. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the conservative market, it is not easy to expand business for rubber sheet used in the medical materials market. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the conservative market, it is not easy to expand business for rubber sheet used in the transportation materials market. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the environmental new materials, it is not easy to expand business for rubber sheet used in the environmental materials market Also, the capital expenditure of this product is large, making it more difficult for newcomers.
		Future countermeasures	All innovative products will gain patents and be produced exclusively, to create high profits and high barriers to entry.
	Synthetic Leather	Future Favorable Factors and Development Trends	Synthetic leather used in the staple merchandise market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the electronic materials market - the Company will have the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the medical materials market - the Company will have the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the transportation materials market - the Company will have the largest manufacturing scales among Taiwanese manufacturers	Synthetic leather used in the environmental materials market - the Company will have the largest manufacturing scales among Taiwanese manufacturers
		Future Unfavorable Factors and Competitiveness Status	Due to the conservative market, the competitiveness decreases in synthetic leather used in the staple merchandise market. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the conservative market, it is not easy to expand business for synthetic leather used in the electronic materials market. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the conservative market, it is not easy to expand business for synthetic leather used in the medical materials market. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the conservative market, it is not easy to expand business for synthetic leather used in the transportation materials market. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the environmental new materials, it is not easy for the Company to expand business for synthetic leather used in the environmental materials market Also, the capital expenditure of this product is large, making it more difficult for newcomers.
		Future countermeasures	Sign annual supply contract with long-term quality customers, ensuring monthly basic shipments.
	Green plastics	Future Favorable Factors and Development Trends	Eco-friendly synthetic leather used in the staple merchandise market - the Company currently has the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leatherused in the electronic materials market - the Company will have the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leatherused in the medical materials market - the Company will have the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leatherused in the transportation materials market - the Company will have the largest manufacturing scales among Taiwanese manufacturers	Eco-friendly synthetic leatherused in the environmental materials market - the Company will have the largest manufacturing scales among Taiwanese manufacturers
		Future Unfavorable Factors and Competitiveness Status	Due to the conservative market, the competitiveness decreases in eco-friendly synthetic leather used in the staple merchandise market. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the conservative market, it is not easy to expand business for eco- friendly synthetic leather used in the electronic materials market. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the conservative market, it is not easy to expand business for eco-friendly synthetic leather used in the medical materials market. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the conservative market, it is not easy to expand business for eco- friendly synthetic leather used in the transportation materials market. Also, the capital expenditure of this product is large, making it more difficult for newcomers.	Due to the environmental new materials, it is not easy for the Company to expand business for eco-friendly synthetic leatherused in the environmental materials market Also, the capital expenditure of this product is large, making it more difficult for newcomers.
		Future countermeasures	Establish international business line in Europe, America, Japan and Greater China, increasing the proportion of overseas sales.

• (II) Important Uses and Production Process of Major Products:

• Important Uses:

• (1) Uses for Plastics and Latex:

These can be made into raincoats, windbreakers, leather bags, suitcases, furniture, wallpapers, tents, air beds, sofas, car seat cushions, canvas, ready-to-wear, life jackets, school bags, safety seats, medical materials, automotive materials, etc.

• (2) Uses for Rubber Sheet:

It can be made into raincoats, windbreakers, snow coats, footwear, waterproof engineering, air beds, boats, pontoons, aircraft tanks, water tanks, conveyor belts, ready-to-wear, life jackets, medical materials, automotive materials, dry diving suits, etc.

• (3) Uses for Eco-Friendly Synthetic Leather:

These can be made into high-end ready-to-wear, raincoat, windbreaker, ski wear, medical materials, automotive materials, etc.

2. Manufacturing Process:

(1) Synthetic Leather:

==> picture [301 x 65] intentionally omitted <==

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

Basic Checking Pasting Laminating
sheet
Cooling Rolling Checking Finished
product
----- End of picture text -----

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• (2) Rubber Sheet:

==> picture [303 x 64] intentionally omitted <==

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

Basic Checking Pasting Laminating
sheet
Dusting Vulcanizing Checking Finished
product
----- End of picture text -----

• (3) Eco-Friendly Synthetic Leather:

==> picture [290 x 65] intentionally omitted <==

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

Basic Checking Pasting Coating
sheet
Cooling Rolling Checking Finished
product
----- End of picture text -----

• (III) Supply Situation for Major Raw Materials:

• Main raw materials:

• A. Rubber raw materials: synthetic rubber, natural rubber, nylon.

• B. Plastic raw materials: PVC dust, DPHP, nylon.

• C. Eco-friendly synthetic leatherraw materials: PU paste, nylon.

• Main source of supply:

• A. Synthetic rubber: Domestic: USI Corp and NANTEX.

• Overseas: Japan and the US.

• B. Natural rubber: Southeast Asia.

• C.DPHP: Domestic: UPC Group and Chung Yong.

• Overseas: Germany, Italy and Korea.

• D.PVC dust: Domestic: Formosa Plastics Group, Ocean Plastics Overseas: the US and Japan.

• E. PU paste: Overseas: the UK and Japan.

• F. Nylon: FORMOSA TAFFETA and Far Eastern New Century.

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• (IV) The Names and Purchases (Sales) and Proportion of the Customers that Accounted for more than 10% of the Total Procurement (sales) of Goods in any of the Past Two Years and the Amount and Proportion of the Goods Sold:

• The Names of Manufacturers that Accounted for more than 10% of the Total Procurement of Goods in any of the Past Two Years and the Amount and Proportion of the Goods Sold: Unit: thousand

	Sold: Unit: thousand	Sold: Unit: thousand	Sold: Unit: thousand	Sold: Unit: thousand
	2019				2020				2021 ended the previous quarter (Note 2)
Item	Name	Amount	Ratio to net annual purchase (%)	Relation to the issuer	Name	Amount	Ratio to net annual purchase (%)	Relation to the issuer	Name	Amount	Ratio to net purchase in current year to the end of the previous quarter (%)	Relation to the issuer
1	Supplier A	69,234	13.55	None	Supplier A	63,037	13.95	None	Supplier A	15,445	11.62	None
2	Supplier B	13,174	2.58	None	Supplier B	50,737	11.22	None	Supplier B	15,236	11.46	None
	Others	428,507	83.87		Others	338,208	74.83		Others	102,281	76.92
	Net purchase	510,915	100		Net purchase	451,982	100		Net purchase	132,962	100

Note 1: A list of any suppliers and clients accounting for 10 percent or more of the company's total procurement amount in either of the 2 most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement accounted for by each, or where a trading counterpart is an individual person who is not a related party, it may use a code in place of the actual name Note 2: The financial information of the first quarter of 2021 has been reviewed by the CPA prior to the publication of the annual report.

Reason of change: due to the changes of procurement strategies in 2020, Supplier B became a supplier offering 10% or more of the total purchase amount.

thousand

	thousand	thousand	thousand	thousand
	2019				2020				2021 ended the previous quarter (Note 2)
Item	Name	Amount	Ratio to net annual sales (%)	Relation to the issuer	Name	Amount	Ratio to net annual sales (%)	Relation to the issuer	Name	Amount	Ratio to net sales in current year to the end of the previous quarter (%)	Relation to the issuer
1	Customer A	75,443	7.85	None	Customer A	100,868	11.94	None	Customer A	28,533	13.78	None
2	Customer B	112,937	11.75	None	Customer B	91,442	10.82	None	Customer B	18,401	8.88	None
	Others	772,518	80.40		Others	652,526	77.24		Others	160,195	77.34
	Net sales	960,898	100		Net sales	844,836	100		Net sales	207,129	100

Note 1: A list of any suppliers and clients accounting for 10 percent or more of the company's total procurement amount in either of the 2 most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement accounted for by each, or where a trading counterpart is an individual person who is not a related party, it may use a code in place of the actual name Note 2: The financial information of the first quarter of 2021 has been reviewed by the CPA prior to the publication of the annual report. Reason of change: the customers have been affected by the regional economy and thus the overall sales amount of product.

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(V) Table of Production Volume and Value in the Last 2 Years:

Unit: thousand yards; amount: thousand

		2019			2020
Synthetic Leather	9,240	3,579	142,291	9,240	3,710	141,237
Rubber Sheet	4,488	2,435	427,843	4,488	2,130	347,678
Greenplastics	15,998	3,147	147,378	15,998	3,167	135,128
Others	－	268	36,324	－	287	34,578
Total	29,726	9,429	753,836	29,726	9,294	658,621

Note 1: Product capacity refers to the capacity that the Company produces under normal operation using existing production equipment after considering the factors for suspension of work or holidays.

Note 2: For any production equipment that has a replacement, the calculation for the capacity may be combined with an explanation provided.

(VI) Table of Sales Volume in the Last Two Years

Unit: thousand yards; amount: thousand

Year Sales Volume/Value Major Products (or bySegment)		20	19			2	020
	Dom	estic	Overs	eas Sales	Dom	estic	Overs	eas Sales
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Synthetic Leather	2,621	107,462	1,141	54,620	2,764	113,913	1,222	57,922
Rubber Sheet	624	63,211	2,212	492,975	624	71,123	1,766	378,818
Greenplastics	2,086	93,639	1,395	109,964	2,360	92,767	1,059	92,843
Sales of raw materials	3	455	5	220	10	663	－	－
Others	109	12,837	162	25,515	126	13,561	165	23,226
Total	5,443	277,604	4,915	683,294	5,884	292,027	4,212	552,809

Note 1: The amounts above have been expressed by net revenue.

Note 2: Construction and warehouse revenue are not included in domestic sales.

III. Employees:

mployees:
Yea	r	2019	2020	Year-to-date as og March 31, 2021
Number of employees	Staff	97	98	100
	Operator	105	98	98
	Total	202	196	198
Average age		49.01	50.09	49.88
Average years	of service	8.66	9.46	9.37
Education level distribution ratio (%)	Doctor	0.00%	0.00%	0.00%
	Master	5.61%	5.79%	5.64%
	College	23.98%	25.26%	28.21%
	Senior high school	51.02%	49.47%	47.18%
	Below senior high school	19.39%	19.48%	18.97%

Note: The Company has adopted the retirement plan in the end of 2007; re-hired employees are entitled to adopt the new system.

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IV. Information on environmental protection expenditure:

As of the end of the publication of the annual report, the losses and the total amount compensation paid due to a violation that resulted in a penalty, and future countermeasures and possible expenditure:

• (I) Environmental Protection:

• Total fine for the violation of the law and regulations: None.

• Countermeasures:In order to meet the stricter requirements of the new boiler emission standards, the boiler may be modified to use biomass fuel.

• Possible expenditure in the future: NT$1 million

• (II) Fire Prevention:

• Total fine for the violation of the law and regulations: None.

• Countermeasures: added auto smoke detector and alarm in the unprotected areas in R plantand K plant

• Possible expenditure in the future: within NT$1 million

• (III) Work Safety

• Total fine for the violation of the law and regulations: NT$50,000 Violation of Article 32, paragraph 2 of the Labor Standards Act, and thus the punishment was undertaken pursuant to Article 79, paragraph 1, Item 1 and Article 80-1, paragraph 1 of the same act.

• Countermeasures:Managing the working hours of workers to meet the requirements of the Labor Standards Act.

• Possible expenditure in the future:within NT$500,000.

V. Labor Relations and Employee Rights:

• (I) Various aspects of employee welfare measures, continuing education, job training, retirement system and its implementation, as well as labor agreements, labor rights and employment protection measures:

• Employee welfare measures:

  • (1) The Company has established the employee welfare committee to implement benefit measures. The charter is as follows:

  • Article 1: The Charter has been established as required in the provisions stipulated in the Organization Regulations on Employee Welfare Committee.

  • Article 2: The Company is called Employee Welfare Committee of Formosan Rubber Group Inc. (the Committee).

  • Article 3: The Committee is located in the Formosan Rubber Group Inc. (8th Floor, No. 82, Section 1, Hankou Street, Taipei).

  • Article 4: There are 15 members in the Committee and is composed of union representatives and company representatives. Among these, there are 10 union representatives and 5 company representatives. However, members selected by the union members may not be less than two-thirds of the total number of members (the number of alternatives may not exceed one-third of the number of members). An reelection may be held before the end of the term.

  • Article 5: The Committee has one chairperson who is selected by the members. Committee members serve a term of 3 years and is unpaid. Reelected members shall be no more than two-thirds of the total number of members, however, and the term of executive member is not limited. The Committed shall be notified of any resignation of the chairperson or members. Those who fail to attend the Committee meeting for three consecutive times without reason are deemed to have resigned. Members of the Committee shall not be recalled if their term of office is less than one year.

  • Article 6: The Committee shall have one director-general, one cashier general manager, and one accounting officer. The chairperson shall nominate among the employees of the Company shall be appointed after an approval of the majority of the Committee (dismissal of chiefs shall be approved by half of the Committee).

  • Article 7: The Committee has research teams including business and general affairs which conduct researches and improvements. The business team of the Committee submits proposals to the chairperson or members for discussion. The business team has been divided into 2 sections: business and recreation; general affairs team: education and finance; there are 7 members in these research teams, respectively.

  • Article 8: The employee welfare committee shall hold a meeting every three months, and an ad hoc meeting shall be called when necessary. The committee meetings are called by the chairperson. When the chairperson cannot perform his or her duties for specific

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reason(s), a personal shall be selected among the director-general or members. The resolutions of the Committee shall be attended by the majority of the members, and approved by the majority of the attendance. However, the resolution of the following shall be approved upon by more than the majority of the attendance.

1. The formulation and amendments of the Charter.

2. The disposal of the employee welfare fund.

3. Other material matters in relation to member rights and obligations.

4. Article 9:Tasks of an employee welfare committee are as follow: Reviewing, promoting and supervising employee welfare business. Planning, custody and utilizing employee welfare fund.

5. Allocating, auditing and reporting revenues and expenses of employee welfare usiness expenditures.

Other matters related to employee welfare.

• Article 10: Employee welfare fund is allocated according to the left:

• At the time of establishment, 1 5% of the paid-in capital was allocated.

• 0.11% of the total monthly operating revenue is allocated.

• 0.5% of the monthly wages of employees is deducted. 20% of the reject product is allocated.

• Article 11: Employee welfare fund is allocated as required by the law shall be deposited in the bank by the Committee and shall be not used unless approved by the Committee.

• Article 12: After the dissolution of the Committee, the remaining property of the employee benefits shall be handled in accordance with the following:

  1. In case of dissolution and the business has been eliminated, both the employer and employees shall appoint representatives and propose measures with the employee welfare committee for the remaining property of the welfare fund and shall be distributed to their original employees. A report shall be compiled and submitted to the competent authority for reference.

  2. If the employee benefit committee is registered as a nonprofit corporation, in case of dissolution, the remaining property of the profit deposit shall be handled in accordance with Article 44 of Civil Code.

• Article 13: The Committee shall set up a plan and budget for the following year within one month before the end of a year and submit it to the competent authority for record and review after they are approved by the committee meeting. Within three months following the end of each year, the Committee shall submit a report on the execution of the plan and budget as well as the financial statement to the competent authority for record and review, and also send a copy to the business entity.

• Article 14: The meeting rules and enforcement rues are separately stipulated.

Article 15: Matters not covered in the Committee’s charter shall be approved by the Committee before making amendments.

• Article 16: The Charter has been enforced after the review of the competent authority.

(2) Education scholarships for the children of employees and incentive for the further education of employees.

1. Retirement System:

   • (1) To accommodate the new allocation system for labor’s retirement funds, the employees who choose to apply for the pension as stipulated in the Labor Standards Act (old system), the Company has established a Labor Pension Fund Supervisory Committee and 2% of the monthly wages will allocated as the retirement fund. The pension funds, which are administered by the Labor Pension Fund Supervisory Committee and deposited in the Committee’s name in the Bank of Taiwan. The Company will make up for the insufficient amount. Employee retirement conditions shall be handled in accordance with the Labor Standards Act.

   • (2) To accommodate the new allocation system of labor retirement fund, for those who choose the carrying account (new system), 6% of the monthly wages will be allocated to their personal account opened by the Bureau of Labor Insurance, Ministry of Labor.

2. Agreement and various employee rights protection measures between laborers and the management:

   • As required by the Labor Unit Act, the Company’s Taoyuan plant has established the Professional Union and a regular communication is engaged with the Company (employee) in the written or verbal form.

3. (II) List any loss sustained as a result of labor disputes in the most recent fiscal year, and during the current

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fiscal year up to the date of publication of the annual report, disclose an estimate of losses incurred to date or likely to be incurred in the future, and indicate mitigation measures being or to be taken:

In the most recent fiscal year, and during the current fiscal year up to the date of publication of the annual report, there was no labor disputes. The Company will continue to enhance the

communication between the laborers and management as to reach the goal of prospect together.

• (III) Education and Training System for Employees and its Implementation

  • (1) Operational Procedures for Education and Training System for Employees of Formosan Rubber Group Inc.:

• Purpose:

These Operational Procedures are promulgated as a means to effectively improve the quality of personnel, implement correct quality concepts and professional skills, and carry out suitable training on employees who may produce significant impact to the environment so that they are relatively aware in order to achieve the effectiveness of the management and the goal of productive business management, ensuring that the quality management system and environmental management system are being enforced and promoted adequately.

1. Application Scope:

These Procedures are applicable for the courses, seminars, talks, practical training, visits and inspections, and planning and implementation of competence held by relevant institutions internally or externally for all of the Company’s employees.

1. Reference: None.

2. Definition:

3. 4.1 Internal training:

Training courses organized by the Company internally.

• 4.2 External training:

Training outside of the Company; refers to outside training, observation or overseas training assigned by the Company.

1. Operational procedures:

2. 5.1 Application for training requirements

   • 5.1.1 Internal training:

Training plans should be proposed by the unit requesting (organizing) with contents including course items, course hours, participants, lecturers, and other matters that should be included, and submit such proposal to the president for approval.

• 5.1.2 External training:

Any employee participating in external training should complete the “External Training Application (Tracking) Form” with an introduction of the course and relevant information included and have it submitted to the manager then approved by the president.

• 5.2 Training implementation:

• 5.2.1 Internal training:

  • (1) A notification should be sent out to the personnel participating 3 days prior to the course date by the handling personnel.

  • (2) The handling personnel should be responsible of all things regarding training, such as venue arrangement, teaching material distribution and coordination of lecturers.

  • (3) The lecturer should send the original handouts and teaching materials to the handling personnel for printing one week prior to the course date if any and they shall be given to the participants before lesson.

  • (4) When the internal training ends, a test should be carried out according to needs and the handling personnel or lecturer should monitor the test. Tests should be sent to the handling unit prior to the class by the lecturer.

  • (5) The handling personnel should compile roster when various trainings carry out and each participant should sign the “Education and Training Sign-in Form for Employees’ ” as a certificate for the class.

  • (6) During the training period, if failing to attend the class for a cause, a prior, procedures for taking a leave must be handled prior to the class. If absent for no reason, it is deemed as absenteeism.

  • (7) The consequence and seriousness caused by violating the Operational Procedures when carrying out employee training.

• 5.2.2 External training:

  • (1) Temporary loan for the expenses needed for the course must be applied from the accountant after the “External Training Application (Tracking) Form” has been approved by the manager of the employees who participate in external training and the

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registration procedures for the course may begin.

  - (2) After the personnel participating in the external training completes the registration procedures, a form for taking a leave must be filled out, along with the course notification and the “External Training Application (Tracking) Form”; they should be submitted to the HR for subsequent tracking purpose.

  - (3) Suppliers that have a significant impact on the company must request relevant training or be assisted by the Company.

• 5.3 Report of training reports:

• 5.3.1 Internal training:

  • (1) The training results are archived by the HR and is treated as important reference basis for promotion or appointment.

  • (2) Those who are absent, late, or leave early for no cause must be noted down in the column of the sign-in form.

• 5.3.2 External training:

  • (1) Those who participate in an external seminar or should write a training report whereas needed for the manager to review then it shall be sent to the HR to archive.

  • (2) Employees receiving external training should hand in a copy of their course completion certificate or relevant certificate to the HR to archive.

  • (3) The HR may ask the personnel who participate in external training to compile a report of what they have learned if needed which can be passed down as teaching materials for relevant personnel.

• 5.3.3 A record of the training procedures may be kept in forms of photographs or videos if needed. Whereas there is a fire drill, a photograph record should be kept.

• 5.3.4 The personnel participating in the external training should provide the finance department a payment document to write off expenses within one week after the training ends.

• 5.3.5. The HR archives and safeguards training applications and relevant information.

• 5.4 Training assessment:

• 5.4.1 The HR should summarize the training results every 6 months and fill in the “Education and Training Analysis Form” for the president to check the effectiveness of the outcome. The form will also be provided to each departmental manager as a reference basis for promotion.

• 5.5. Requirements for environmental management education and training

• 5.5.1 The representative for environmental management should identify suitable training on employees of the plant who may produce significant impact to the environment so that they have necessary skills and sufficient environmental awareness.

• 5.5.2 According to the outcome of the identification of environmental training requirements, the environmental management representative should make plans to promote environmental policies and procedures in relation to the environment as well as an explanation of various requirements, contents of training and drills in terms of emergency response plans, and training of the outcome after handling an emergency.

• 5.5.3 The environmental management representative should be responsible for or appoint the arrangement and enforcement of the training course on the approved objects for the training plan. An on-site enforcement should be performed by the internal manager acting as the training lecturer or an external professional should be hired to do so. Personnel may be appointed to receive professional training courses in relation to environmental issues when necessary outside of the Company.

• 5.5.4 Whereas there is a request regarding improvement technique of possible environmental impact arising from the material environmental considerations, the “External Training Application (Tracking) Form” should be submitted to the president. An external training may be assigned after an approval.

• 5.5.5. Requirements for the competence of environmental management personnel:

  • (1) Relevant personnel of fire response organization:

    • The personnel in the fire emergency response plan should be equipped with various skills. Suitable training should be provided, and the environmental promotion chairperson should especially appoint at least one member from the plant to take part in the fire fighting training organized by the fire fighting unit and a qualified certification shall be held.

  • (2) Environmental audit personnel:

    • It should be appointed to personnel who is qualified from receiving the internal audit training of the Company’s environmental management system and who has also received training courses of environmental procedures and explanation of material

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requirements.

(3) Material environmental impact personnel:

It should be appointed to personnel who have a degree of above junior high school and have work experience in related filed for more than a year, and should have received the Company’s training courses of relevant procedures of material environmental impact and explanation of material requirements.

6. Relevant forms:

6.1 External Training Application (Tracking) Form.

6.2 Education and Training Sign-in Form for Employees.

6.3. Education and Training Analysis Form.

(2) 2020 Personnel Education and Training Record Form of Formosan Rubber Group Inc.

1	Accounting Section	Shi Ming-De	2020 Continuous Further Education of the AccountingManager Course	■ Yes □ No	12 hours, June 18 to June 19, 2020	8,000
2	Audit Office	Liu Wen- Zheng	Internal Audit Course	■ Yes □ No	12 hours, September 18 to October 28,2020	6,600
3	Audit Office	Wen Shu-Lan	Internal Audit Course	■ Yes □ No	12 hours, August 17 to August 24,2020	6,600
4	Audit Office	Peng Fang-Qin	Internal Audit Course	■ Yes □ No	2020/08/17-08/24 12 hours	6,600
5	Legal Affairs Office	Tang Guan- Han	Class of first aiders	■ Yes □ No	2020/01/13-01/15 18 hours	4,500
6	Site of logistics	Tsai Li-Jen	Course of Bonded Warehouse Management for Dedicated Personnel	■ Yes □ No	2020/04/11-04/25 24 hours	4,500
7	Site of logistics	Chuang Jin- Hou	Course of Bonded Warehouse Management for Dedicated Personnel	■ Yes □ No	2020/04/11-04/25 24 hours	4,500
8	Site of logistics	Li Chi-Jun	Course of Bonded Warehouse Management for Dedicated Personnel	■ Yes □ No	2020/04/11-04/25 24 hours	4,500
9	Site of logistics	Lin Chien-Chi	Re-training class of fork-lift truck operator	■ Yes □ No	3 hours, December 10, 2020	600
10	Nankang Lease	Yang Jun- Sheng	Re-training class of fork-lift truck operator	■ Yes □ No	3 hours, December 10, 2020	600
11	Site of logistics	Wu Ju-Fang	Course of Bonded Warehouse Management for Dedicated Personnel	■ Yes □ No	2020/11/21-12/20 24 hours	4,500
12	Site of logistics	Wu, Jing- Hsuan	Course of Bonded Warehouse Management for Dedicated Personnel	■ Yes □ No	2020/11/21-12/20 24 hours	4,500
13	Production Section	Chiu Chian- Min	Re-training class of safety and health supervisors	■ Yes □ No	6 hours, October 30, 2020	1,200
14	Production line R	Huang Chung- Hung	Re-training class of organic solvent supervisors	■ Yes □ No	6 hours, December 18, 2020	850
15	Production line U	Hsu Dong-Chu	Re-training class of organic solvent supervisors	■ Yes □ No	6 hours, December 18, 2020	850

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(IV) Code of Conduct or Ethics for Employees

Code of Conduct for Employees of Formosan Rubber Group Inc.

  - Established in August 2008

• I. I abide by the three precepts of Formosan Rubber Group Inc.: no corruption, no gambling, and filial piety.

• II. I respect personal sacred privacy and I do not discuss issues including politics, regions and races in the work place; unless approved by the manager, I do not discuss issues in relation to salary.

• III. I abide by the employees’ industrial safety rules of Formosan Rubber Group Inc.:

• Operators working on site must wear safety shoes and work clothes.

• Work clothes must be tugged into the trousers to prevent them from being caught in the machine.

• Prior to operating the machine and equipment, the emergency braking device must be checked whether it is operating normally.

• A qualified certificate must be provided to operate on the stationary crane; prior to use, the rope must be checked whether it is complete and when the crane is in use, people walking underneath the load is strictly prohibited.

• A qualified certificate must be provided to drive a forklift, and be aware of personnel’s safety when driving.

• Fire extinguishers in the work place should be checked whether they have expired and or if the pressure is enough.

• Dust masks must be worn when working in dusty places.

• Activated carbon masks must be worn when working in organic solvent places, and air circulation must be maintained.

• Heat-resistant gloves and arm bands must be worn in high-temperature places to prevent buns.

• 10.Protective covers must be installed for transmission belts and chains of machinery and equipment.

• 11.When using electrical equipment, plugs, socket must be carefully checked whether they are fixed, and whether the wire is broken to prevent leakage, short circuit, and electric shock.

• 12.Protective gloves and goggles must be worn when using electric welding machines.

• 13.Goggles must be worn when using grinders.

• 14.When using a mobile ladder, it must be fixed to prevent falling

• 15.Follow the smoking rules (smoking at the required time and location)

• 16.Compliance of other safety rules later formulated by all managers

(V) Workplace and employees’ safety protection measures:

1. Workplace and safety and health enforcement status of Formosan Rubber Group Inc.

2. (1) As required by the Ministry of Labor, an industrial safety and labor safety and health management committee has been set up. Chairperson: the director of the plant Hsiao Zheng-Zhong and all units have a responsible member.

3. (2) A safety and health month events are organized each year in March and September. Various workplace, safety and heath checks and education and training will be implemented strictly and participation is compulsory for all members.

4. (3) Audit units of ISO-9001 and ISO-14001 come to the Company to check various workplace, safety and health operations and the enforcement of education and training.

5. (4) Employees are insured with occupational accidents and group insurances; if an accident of safety and health occurs, he/she is entitled the insurance protection.

6. Safety and Health Work Rues of Formosan Rubber Group Inc.

7. (1) 10 Industrial Safety and Health Rules of Formosan Rubber Group Inc.

   1. Safety first, health first.

   2. Follow laws and regulations in terms of safety and health.

   3. Enhance safety and health equipment.

   4. Improve safety and health organizations.

   5. Strengthen safety and health education.

   6. Have safety and health habits.

   7. Build safety honor concepts.

   8. Increase the awareness for prevention of disasters.

   9. Implement industrial automatic checks.

   10. Work together to ensure safety.

8. (2)Responsibilities of Managers

    1. Managers (including commanding several workers, such as shift leader, team leader, and section chief) should e responsible for preventing accidents.
   
    - 2.Be an example in following safety and health rules.
   
    - 3.Guide and supervise the department to follow safety and health rules.
   

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1. Maintain the sound environment and equipment of the management area; if poor safety and health situation is discovered, it must be corrected at any time.

2. 5.Managers should remain in contact and cooperation with the safety and health management personnel to prevent accidents together.

3. When an accident occurs, the safety and health management department and the safety and health committee must be contacted immediately to seek a solution for improvement

4. All managers must be aware of the safe working methods of the work they are supervising, and supervise their subordinates to follow, and they should be an example to their subordinates.

5. All managers must be familiar with the safety fence deices and protection equipment of human safety of the work they are in charge of and the application of maintenance.

6. Assignment of work should be appropriate. If there are no more than 2 foremen being in charge, one of them should be appointed as the person in charge for commanding.

10.The purpose of plant management is to maintain a working environment that is neat, clean and comfortable.

• (3) Personal conduct

• Follow the rules in terms of safety and health.

• Work must be conducted according to the standard working method or manager instructions; they may not be changed without consent.

• Machines may not be operated on without authorization by other personnel aside from the responsible personnel (unless authorized by the manager).

• Lingering or wandering in the work area of others for no reason at any time is prohibited.

• Ensure that materials being used at work that are placed on the scaffold, tower or other high places do not trip others or hurt others from falling.

• If objects must be thrown from the high place, the ground should be fenced up and warning should be displayed to prohibit others from entering.

• When moving equipment or scaffold, unfixed objects placed on top should be removed.

• Do not run, shout, play, pull pranks or other behaviors that obstruct order in the plant.

• Do not use compressed air to blow dust off a body and use the compressed tube to point at others.

10.Do not take shortcuts and enter production operation area when walking.

• 11.It is prohibited to sit on the conveyor belt or walk on the frame.

• 12.It is strictly prohibited for people to walk on the roof of asbestos tiles.

• 13.Do not walk underneath an overhead crane or hanging heavy objects during work.

• If an area with oil leakage, air leakage, broken and damaged ladder, platform, railing or other unsafe places are discovered, please report to the manager or safety and health management personnel at any time.

• Do not use tools with poor performance or malfunctioning machinery.

• It is prohibited to place sharp knives into the pocket and throw objects in the workshop.

• It is prohibited to smoke inside the workplace or when walking; cleanness must be maintained and fruit skin and garbage must not be discarded inside the plant.

• Do not push the door too hard when entering and exiting to prevent hitting people at the other side.

• Take extra care when walking up and down stairs or anywhere that is slippery.

• Injuries occur when moving objects, please take extra care.

• Remember all entries and exits and emergency exit of the workplace by heart. Orders must be complied with and guidance must be followed when there is an emergency.

• Each employee should be responsible for preventing accidents and encourage one another regarding following the safety rules.

• If any unsafe situation is discovered, the manager or safety and health management committee must be reported to immediately to seek a solution for improvement.

(All enforcement rules are published in the chapters in the “Safety and Health Work Rues of Formosan Rubber Group Inc.”)

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VI. Important Contracts:

Type of contract	Party	Contract Duration	Contract content	Restrictive terms
Long-term loans	Hua Nan Bank	February 10, 2015 - February 10, 2020	Financing line of NT$802 million for the land development of Huiguo Section of Taichung (※The case was closed on January 16, 2020 and the registration has been written off.)	None
Sales contract	Japan Ajinomoto	January 26, 2005	Co-produced additives for electronic chemistry	None
Real Estate Development Contract	Continental Development Corp. Heng Bang Construction Co., Ltd. Heng Ju Construction Co., Ltd.	May 16, 2012	The B7 land development in Xinyi Section	None
	Da Lu Construction Co., Ltd.	October 17, 2014	The land development in Huiguo Section of Taichung	None

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VI. An Overview of the Company's Financial Status

• I. Condensed balance sheets and statements of comprehensive income for the past 5 fiscal years

• II. Finance analysis for the past 5 fiscal years

• III Audit committee review report of the most recent annual financial report

• IV. Financial report for the most recent fiscal year,

• V. A parent company only financial statement for the most recent fiscal year, certified by a CPA

• VI. If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation

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VI. An Overview of the Company's Financial Status

I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years: (I) The International Financial Reporting Standards have been adopted

1. Consolidated Condensed Balance Sheet

I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years: (I) The International Financial Reporting Standards have been adopted 1. Consolidated Condensed Balance Sheet	I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years: (I) The International Financial Reporting Standards have been adopted 1. Consolidated Condensed Balance Sheet	I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years: (I) The International Financial Reporting Standards have been adopted 1. Consolidated Condensed Balance Sheet	I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years: (I) The International Financial Reporting Standards have been adopted 1. Consolidated Condensed Balance Sheet	I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years: (I) The International Financial Reporting Standards have been adopted 1. Consolidated Condensed Balance Sheet	I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years: (I) The International Financial Reporting Standards have been adopted 1. Consolidated Condensed Balance Sheet	I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years: (I) The International Financial Reporting Standards have been adopted 1. Consolidated Condensed Balance Sheet	I. Condensed balance sheets and comprehensive income statements for the past 5 fiscal years: (I) The International Financial Reporting Standards have been adopted 1. Consolidated Condensed Balance Sheet
Unit: NT$thousand
Year Item		Financial information for the past 5 years (Note 1)					Financial Information of Year-to-date as at March 31, 2021 (Note 1)
		2016	2017	2018	2019	2020
Current Assets		10,097,817	10,616,690	9,877,351	8,575,654	7,948,387	8,268,307
Property,Plant and Equipment		869,608	890,506	942,204	891,585	848,439	837,084
Intangible Assets		0	0	0	0	0	0
Other Assets		3,424,663	3,365,337	3,304,535	3,512,195	3,460,289	3,485,672
Total Assets		14,392,088	14,872,533	14,124,090	12,979,434	12,257,115	12,591,063
Current Liabilities	Before Distribution	2,976,101	3,818,373	3,544,274	1,919,580	818,341	691,994
	After Distribution	3,209,851	4,058,873	3,782,274	2,199,580	(Note 2)	(Note 2)
None Current Liabilities		233,854	217,322	220,894	254,232	256,515	266,817
Total Liabilities	Before Distribution	3,209,955	4,035,695	3,765,168	2,173,812	1,074,856	958,811
	After Distribution	3,443,705	4,276,195	4,003,168	2,453,812	(Note 2)	(Note 2)
Equity Attributable to Parent CompanyShareholders		11,183,129	10,837,841	10,359,932	10,806,639	11,182,259	11,632,252
Shares		4,336,000	3,800,000	3,700,000	3,500,000	3,423,260	3,423,260
Capital reserve		519,530	506,026	492,836	466,463	456,341	456,341
Retained Earnings	Before Distribution	6,611,617	6,512,624	6,473,080	6,672,834	7,245,305	7,464,326
	After Distribution	6,377,867	6,272,124	6,235,080	6,392,834	(Note 2)	(Note 2)
Other Equity		(179,047)	20,523	(44,611)	167,342	57,353	288,325
TreasuryStock		(104,971)	(1,332)	(261,373)	0	0	0
Non-ControllingInterest		(996)	(1,003)	(1,010)	(1,017)	0	0
Total Equity	Before Distribution	11,182,133	10,836,838	10,358,922	10,805,622	11,182,259	11,632,252
	After Distribution	10,948,383	10,596,338	10,120,922	10,525,622	(Note 2)	(Note 2)

Note 1: The annual financial information has been audited by the CPA, and the financial information of first quarter of 2021 has been reviewed by the CPA prior to the publication of the annual report.

Note 2: Earnings distribution of 2020 is not yet resolved on the 2021 general meeting of shareholders.

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2. A Parent Company Only Condensed Balance Sheet

Unit: NT$ thousand

					Unit: NT$ thousand	Unit: NT$ thousand
Year Item			Financial information for the past 5		years (Note 1)
		2016	2017	2018	2019	2020
Current Assets		9,687,038	10,148,794	9,366,898	7,927,109	7,325,060
Property,Plant and Equipment		869,608	890,506	942,204	891,585	848,439
Intangible Assets		0	0	0	0	0
Other Assets		3,833,287	3,830,926	3,812,727	4,158,796	4,083,175
Total Assets		14,389,933	14,870,226	14,121,829	12,977,490	12,256,674
Current Liabilities	Before Distribution	2,968,963	3,811,048	3,536,961	1,912,550	817,900
	After Distribution	3,202,713	4,051,548	3,774,961	2,192,550	(Note 2)
None Current Liabilities		237,841	221,337	224,936	258,301	256,515
Total Liabilities	Before Distribution	3,206,804	4,032,385	3,761,897	2,170,851	1,074,415
	After Distribution	3,440,554	4,272,885	3,999,897	2,450,851	(Note 2)
Equity Attributable to Parent CompanyShareholders		11,183,129	10,837,841	10,359,932	10,806,639	11,182,259
Shares		4,336,000	3,800,000	3,700,000	3,500,000	3,423,260
Capital reserve		519,530	506,026	492,836	466,463	456,341
Retained Earnings	Before Distribution	6,611,617	6,512,624	6,473,080	6,672,834	7,245,305
	After Distribution	6,377,867	6,272,124	6,235,080	6,392,834	(Note 2)
Other Equity		(179,047)	20,523	(44,611)	167,342	57,353
TreasuryStock		(104,971)	(1,332)	(261,373)	0	0
Non-ControllingInterest		0	0	0	0	0
Total Equity	Before Distribution	11,183,129	10,837,841	10,359,932	10,806,639	11,182,259
	After Distribution	10,949,379	10,597,341	10,121,932	10,526,639	(Note 2)

Note 1: The annual financial information above has been audited by the CPA

Note 2: Earnings distribution of 2020 is not yet resolved on the 2021 general meeting of shareholders.

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3. Comprehensive Income Statements

Unit: NT$ thousand

Earnings / (Loss) per share unit: NT$

Year Item	Financial information for the past 5 years (Note 1)	Financial information for the past 5 years (Note 1)	Financial information for the past 5 years (Note 1)	Financial information for the past 5 years (Note 1)	Financial information for the past 5 years (Note 1)	Current year up to March 31, 2021 Financial information (Note 1)
	2016	2017	2018	2019	2020
Operatingincome	1,708,188	1,726,834	1,373,818	2,701,777	3,282,255	934,413
Operatingmargin	526,703	538,798	330,480	661,688	1,062,287	310,089
Net OperatingIncome	286,529	304,471	101,195	423,813	810,562	242,004
Non-Operating Income and Expenses	128,053	(106,183)	159,232	128,874	119,572	727
Pre-Tax Income	414,582	198,288	260,427	552,687	930,134	242,731
Net Income for ContinuingOperation	327,101	189,233	215,795	538,950	901,716	215,570
Loss of Discontinued Operation	0	0	0	0	0	0
Net Income(Loss)	327,101	189,233	215,795	538,950	901,716	215,570
Other comprehensive income recognized for the period (Net amount after tax)	25,512	199,685	(33,634)	184,067	(116,478)	234,423
Total Comprehensive Income	352,613	388,918	182,161	723,017	785,238	449,993
Profit Attributable to the Equity Holders of the Parent Company	327,110	189,240	215,802	538,957	901,716	215,570
Net Profit Attributable to Non Controlling Interests	(9)	(7)	(7)	(7)	0	0
Comprehensive Income Attributable to the Equity Holders of the Parent Company	352,622	388,925	182,168	723,024	785,238	449,993
Comprehensive Income Attributable to Non ControllingInterests	(9)	(7)	(7)	(7)	0	0
Earnings Per Share	0.71	0.47	0.59	1.54	2.62	0.63

Note 1: The annual financial information has been audited by the CPA, and the financial information of first quarter of 2021 has been reviewed by the CPA prior to the publication of the annual report.

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4. A Parent Company Only Comprehensive Income Statements

Unit: NT$ thousand

Earnings / (Loss) per share unit: NT$

		Unit: NT$ thousand Earnings /(Loss) per share unit: NT$	Unit: NT$ thousand Earnings /(Loss) per share unit: NT$	Unit: NT$ thousand Earnings /(Loss) per share unit: NT$	Unit: NT$ thousand Earnings /(Loss) per share unit: NT$
Year Item		Financial information for the past 5 years (Note 1)
	2016	2017	2018	2019	2020
Operatingincome	1,708,248	1,726,894	1,373,878	2,701,837	3,282,315
Operatingmargin	526,763	538,858	330,540	661,748	1,062,347
Net OperatingIncome	291,957	309,180	103,821	426,917	812,584
Non-Operating Income and Expenses	122,605	(110,911)	156,948	123,093	117,501
Pre-Tax Income	414,562	198,269	260,769	550,010	930,085
Net Income for Continuing Operation	327,110	189,240	215,802	538,957	901,716
Loss of Discontinued Operation	0	0	0	0	0
Net Income(Loss)	327,110	189,240	215,802	538,957	901,716
Other comprehensive income recognized for the period (Net amount after tax)	25,512	199,685	(33,634)	184,067	(116,478)
Total Comprehensive Income	352,622	388,925	182,168	723,024	785,238
Profit Attributable to the Equity Holders of the Parent Company	327,110	189,240	215,802	538,957	901,716
Net Profit Attributable to Non ControllingInterests	0	0	0	0	0
Comprehensive Income Attributable to the Equity Holders of the Parent Company	352,622	388,925	182,168	723,024	785,238
Comprehensive Income Attributable to Non Controlling Interests	0	0	0	0	0
Earnings Per Share	0.71	0.47	0.59	1.54	2.62

Note 1: The annual financial information above has been audited by the CPA

(II) The names of appointed certified accountants and their audit opinions in the last 5 years

Year	Name of CPA	Audit Opinions
2016	Zhou Yin-Lai,Wu Hsin-Liang	An Unqualified Opinion
2017	Zhou Yin-Lai,Wu Hsin-Liang	An Unqualified Opinion
2018	Zhou Yin-Lai,Wu Hsin-Liang	An Unqualified Opinion
2019	Zhou Yin-Lai,Wu Hsin-Liang	An Unqualified Opinion
2020	Zhou Yin-Lai,Wu Hsin-Liang	An Unqualified Opinion

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II. Finance analysis for the past 5 fiscal years

(I) The International Financial Reporting Standards have been adopted

1. Consolidated Financial Analysis

Year Analysis	Year Analysis	Financial Analysis for thePast5Years(Note 1)	Financial Analysis for thePast5Years(Note 1)	Financial Analysis for thePast5Years(Note 1)	Financial Analysis for thePast5Years(Note 1)	Financial Analysis for thePast5Years(Note 1)	Year-to-date as of March 31, 2021 (Note 1)
		2016	2017	2018	2019	2020
Financial Structure(%)	Debt to Assets Ratio	22.30	27.14	26.66	16.75	8.77	7.62
	Long Term Funds to Property, Plant and Equipment Ratio	1,312.77	1,241.33	1,122.88	1,240.47	1,348.21	1,421.49
Liquidity %	Current Ratio	339.30	278.04	278.68	446.75	971.28	1,194.85
	Quick Ratio	149.57	131.42	114.73	207.18	578.74	790.75
	Times Interest Earned	32.75	12.26	12.91	29.16	114.06	290.66
Operating Performance	Average Collection Turnover(times)	7.46	7.82	7.05	17.43	17.87	17.25
	Average Number of Days	48.92	46.67	51.77	20.94	20.42	21.15
	InventoryTurnover(times)	0.21	0.22	0.19	0.40	0.58	0.85
	Average Payment Turnover(times)	5.97	6.66	6.14	14.75	22.21	22.82
	Average Sales Days	1,738.09	1,659.09	1,921.05	912.50	629.31	429.41
	Property, Plant and Equipment Turnover (times)	1.97	1.96	1.50	2.95	3.77	4.44
	Total Assets Turnover(times)	0.12	0.12	0.09	0.20	0.26	0.30
Profitability	Return on Total Assets(%)	2.29	1.39	1.61	4.09	7.20	6.96
	Return on Equity (%)	2.83	1.72	2.04	5.09	8.20	7.56
	Pre-Tax to Ratio of the Paid-In Capital (%)	9.56	5.22	7.04	15.79	27.17	28.36
	Net Margin(%)	19.15	10.96	15.71	19.95	27.47	23.07
	Earnings Per Share(NT$)	0.71	0.47	0.59	1.54	2.62	0.63
Cash Flow	Cash Flow Ratio(%)	8.31	11.65	11.98	92.89	253.39	98.05
	Cash Flow AdequacyRatio(%)	96.37	133.54	87.83	63.93	296.82	-
	Cash Flow Reinvestment Ratio(%)	(1.31)	1.69	1.53	12.38	14.32	-
Leverage	OperatingLeverage	1.69	1.63	2.82	1.86	1.43	1.370
	Financial Leverage	1.05	1.06	1.28	1.05	1.01	1.00
Please explain the reason for ratio changes for financial information in the past 2 years. (Analysis may be exempted if the increase or decrease change does not reach 20%) 1. Debt to assets ratio: Current Liabilities: Mainly due to the continuous sales of construction projects of “Bridge Upto Zenith,” “Legend River,” and “55Timeless” and the completion and handover of “La Bella Vita”, resulting in a decrease in short-term loan and short-term notes payable. 2. Current ratio, quick ratio and times interest earned: The decrease of current liabilities is mainly due to the continuous sales of construction projects of “Bridge Upto Zenith,” “Legend River,” and “55Timeless”, and the completion and handover of “La Bella Vita” resulting in a decrease in short-term loan and short-term notes payable compared to the previous period; the increase of current earnings before interest and taxes is mainly due to the continuous sales of construction projects of “Bridge Upto Zenith,” “Legend River,” and “55Timeless”, and the completion and handover of “La Bella Vita”, resulting in an increase of net income compared to the previous period. 3. Average collection turnover, average number of days, inventory turnover, average payment turnover, average sales days, property, plant and equipment turnover Ratio and total assets turnover: Mainly due to the continuous sales of construction projects of “Bridge Upto Zenith,” “Legend River,” and “55Timeless” and the completion and handover of “La Bella Vita”, resulting in an increase in operating income and related operating costs. 4. Return on assets, return on equity, pre-tax to ratio of the paid-in capital, profit margin and earnings per share: Mainly due to the continuous sales of construction projects of “Bridge Upto Zenith,” “Legend River,” and “55Timeless”, and the completion and handover of “La Bella Vita”, resulting in an increase of pre-tax income and net income compared to the previous period. 5. Cash flow ratio, cash flow adequacy ratio and cash reinvestment ratio: Mainly due to the continuous sales of construction projects of “Bridge Upto Zenith,” “Legend River,” and “55Timeless”, and the completion and handover of “La Bella Vita” resulting in an increase of net cash flows in current operating activities by a large margin. 6. Operating leverage: Mainly due to the continuous sales of construction projects of “Bridge Upto Zenith,” “Legend River,” and “55Timeless”, and the completion and handover of “La Bella Vita”,resultingin an increase of operating profit compared to thepreviousperiod.

• Note 1:The annual financial information has been audited by the CPA, and the financial information of first quarter of 2021 has been reviewed by the CPA prior to the publication of the annual report.

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2. Parent Company Only Financial Analysis

Year Analysis	Year Analysis	Financial Analysis for thePast5Years (Note 1)	Financial Analysis for thePast5Years (Note 1)	Financial Analysis for thePast5Years (Note 1)	Financial Analysis for thePast5Years (Note 1)
		2016	2017	2018	2019	2020
Financial Structure(%)	Debt to Assets Ratio	22.29	27.12	26.64	16.73	8.77
	Long Term Funds to Property, Plant and Equipment Ratio	1,313.35	1,241.90	1,123.42	1,241.04	1,348.21
Liquidity %	Current Ratio	326.28	266.30	264.83	414.48	895.59
	Quick Ratio	136.09	119.39	100.54	174.03	502.85
	Times Interest Earned	32.75	12.26	12.92	28.35	114.05
Operating Performance	Average Collection Turnover (times)	7.46	7.82	7.05	17.43	17.87
	Average Number of Days	48.92	46.67	51.77	20.94	20.42
	InventoryTurnover(times)	0.21	0.22	0.19	0.40	0.58
	Average Payment Turnover (times)	5.97	6.66	6.14	14.75	22.21
	Average Sales Days	1,738.09	1,659.09	1,921.05	912.50	629.31
	Property, Plant and Equipment Turnover Ratio(times)	1.97	1.96	1.50	2.95	3.77
	Total Assets Turnover(times)	0.12	0.12	0.09	0.20	0.26
Profitability	Return on Total Assets(%)	2.29	1.39	1.61	4.09	7.20
	Return on Equity (%)	2.83	1.72	2.04	5.09	8.20
	Pre-Tax to Ratio of the Paid-In Capital (%)	9.56	5.22	7.05	15.71	27.17
	Net Margin(%)	19.15	10.96	15.71	19.95	27.47
	Earnings Per Share(NT$)	0.71	0.47	0.59	1.54	2.62
Cash Flow	Cash Flow Ratio (%)	7.95	11.43	11.50	91.79	249.14
	Cash Flow Adequacy Ratio (%)	95.69	132.38	86.09	61.05	290.71
	Cash Flow Reinvestment Ratio (%)	(1.40)	1.62	1.38	12.11	13.98
Leverage	Operating Leverage	1.66	1.60	2.75	1.85	1.43
	Financial Leverage	1.05	1.06	1.27	1.05	1.01
Please explain the reason for ratio changes for financial information in the past 2 years. (Analysis may be exempted if the increase or decrease change does not reach 20%) 1. Debt to assets ratio: Current Liabilities: Mainly due to the continuous sales of construction projects of“Bridge Upto Zenith,”“Legend River,”and “55Timeless”and the completion and handover of“La Bella Vita”, resulting in a decrease in short-term loan and short-term notes payable. 2. Current ratio, quick ratio and times interest earned: The decrease of current liabilities is mainly due to the continuous sales of construction projects of “Bridge Upto Zenith,”“Legend River,”and“55Timeless”, and the completion and handover of“La Bella Vita”resulting in a decrease in short-term loan and short-term notes payable compared to the previous period; the increase of current earnings before interest and taxes is mainly due to the continuous sales of construction projects of“Bridge Upto Zenith,”“Legend River,”and“55Timeless”, and the completion and handover of“La Bella Vita”, resulting in an increase of net income compared to the previous period. 3. Average collection turnover, average number of days, inventory turnover, average payment turnover, average sales days, property, plant and equipment turnover Ratio and total assets turnover: Mainly due to the continuous sales of construction projects of“Bridge Upto Zenith,”“Legend River,”and “55Timeless”and the completion and handover of“La Bella Vita”, resulting in an increase in operating income and related operating costs. 4. Return on assets, return on equity, pre-tax to ratio of the paid-in capital, profit margin and earnings per share: Mainly due to the continuous sales of construction projects of“Bridge Upto Zenith,”“Legend River,”and“55Timeless”, and the completion and handover of“La Bella Vita”, resulting in an increase of pre-tax income and net income compared to the previous period. 5. Cash flow ratio, cash flow adequacy ratio and cash reinvestment ratio: Mainly due to the continuous sales of construction projects of“Bridge Upto Zenith,”“Legend River,”and“55Timeless”, and the completion and handover of“La Bella Vita”resulting in an increase of net cash flows in current operating activities by a large margin. 6. Operating leverage: Mainly due to the continuous sales of construction projects of“Bridge Upto Zenith,”“Legend River,”and“55Timeless”, and the completion and handover of“La Bella Vita”, resultingin an increase of operating profit compared to thepreviousperiod.

Note 1: The annual financial information above has been audited by the CPA

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Note 2: The calculation method for the financial analysis is as follows:

1. Capital Structure Analysis

   • (1) Debt to Assets Ratio = Total Liabilities / Total Assets.

2. (2) Long-term Fund to Fixed Assets Ratio = (Shareholders’ Equity + Long-term Liabilities) / Net Fixed Assets.

3. 1. Liquidity Analysis

   2. (1) Current Ratio = Current Assets / Current Liabilities. (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities.

   3. (3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses.

4. Operating Performance Analysis

   • (1) Average Collection Turnover (including accounts receivable and notes receivable resulted from business operation) = Net Sales / Average Trade Receivables (including accounts receivable and notes receivable resulted from business operation).

   • (2) Days Sales Outstanding = 365 / Average Collection Turnover.

   • (3) Average Inventory Turnover = Cost of Sales / Average Inventory.

   • (4) Average Payment Turnover (including accounts payables and notes payables resulted from business operation) = Cost of Sales / Average Trade Payables (including accounts payables and notes payables resulted from business operation).

   • (5) Average Sales Days = 365 / Average Inventory Turnover.

   • (6) Property, Plant and Equipment Turnover = Net Sales / Average Net Property, Plant and Equipment. (7) Total Assets Turnover = Net Sales / Average Total Assets.

5. Profitability Analysis

   • (1) Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate)) / Average Total Assets. (2) Return on Equity = Net Income / Average Total Equity.

   • (3) Net Margin = Net Income / Net Sales.

6. (4) Earnings Per Share = (Net Income - Preferred Stock Dividend) / Weighted Average Number of Shares Outstanding. (Note 4)

7. 1. Cash Flow

   2. (1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities.

8. (2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend.

9. (3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends) / (Property, Plant and Equipment + Long-term Investments + Other Assets + Working Capital). (Note 5)

10. 1. Leverage:

    2. (1) Operating Leverage = (Net Sales - Variable Cost) / Income from Operations (Note 6) (2) Financial Leverage = Operating Profit / (Operating Profit - Interest Expenses)

11. Note 3: The calculation of the earnings per share of the preceding paragraph shall pay special attention to the following: 1. Based on the weighted average number of ordinary shares, rather than the number of shares issued at the end of the year. 2. Where there is a cash replenishment or treasury stock trading, the weighted average number of shares shall be calculated during the peri od of circulation.

12. 1. Where there is a surplus to capital increase or capital surplus to capital increase, the calculation of the earnings per share for the previous year and half year should be adjusted by the proportion of capital increase, rather than the period the capital increase is issued.
13. 1. If the preferred shares are non convertible accumulative shares, its annual dividend (whether or not it is issued) shall be deductible from the net income or increased to net loss after tax. If the preferred shares are non cumulative, then in the case of having a net profit after tax, the preferred dividend should be deducted from the net profit after tax; in the case of net loss after tax, no adjustments are required.

14. Note 4: The following should be taken more consideration into when analyzing cash flows: 1. Net cash flow from operating activities refers to the net cash inflow from operating activities in the cash flow statement. 2. Capital expenditure refers to the annual cash outflow of capital flows. 3. The increase in inventories shall only be credited when the balance at the end of the period is greater than them balance at the beginning of the period. If the inventory is reduced at the end of the year, then the inventory amount should be accounted at zero.

15. 1. Cash dividends include cash dividends for common stock and special shares.

16. Fixed assets means the total amount of Property , plant and equipment before deducting accumulated depreciation.

Note 5: The issuer shall distinguish between the operating costs and operating expenses being fixed or variables. When involved in the estimation or subjective judgments, one should pay attention to its rationality and consistency.

Note 6: If the Company's shares are no par or not in the denomination of NT$10, the calculation of the ratio of the paid in capital shall be calculated based on the equity ratio of the balance sheet attributable to the owners of the parent company.

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III. Audit Committee’s Review Report

The Company’s 2020 business report, financial statements (including consolidated and standalone financial statements) and the motion for earnings distribution; among these, the financial statements have been audited by CPAs Zhou Yin-Lai and Wu Xin-Liang of Baker Tilly, and the audit report has been submitted.

The business report, financial statements and the motion for earnings distribution stated above have been reviewed by the Audit Committee and no discrepancy has been found. We have presented you the reports based on the provisions stipulated in Article 14-4 in Securities and Exchange Act and Article 219 in the Company Act.

Please review

Regards,

2021 Shareholders Regular Meeting of Formosan Rubber Group Inc.

Formosan Rubber Group Inc.

Convener of Audit Committee: Xiao Sheng-Xian

March 19, 2021

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IV. Financial report for the most recent fiscal year

(English Translation of Consolidated Financial Statements

and Report Originally Issued in Chinese)

Formosan Rubber Group Inc. and Subsidiaries

Consolidated Financial Statements and Independent Auditors’ Report 2020 and 2019

Address: 8F, No. 82, Sec. 1, Hankou St., Zhongzheng District, Taipei City Tel No.: (02) 2370-0988

The auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and consolidated financial statements, the Chinese version shall prevail.

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REPRESENTATION LETTER

The Companies required to be included in the consolidated financial statements of Formosan Rubber Group Inc. as of and for the year ended December 31, 2020, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standards No. 10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the consolidated financial statements is included in the consolidated financial statements. Consequently, Formosan Rubber Group Inc. and Subsidiaries do not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

Formosan Rubber Group Inc.

By

HSU, ZHEN-TSAI

Chairperson

March 19 , 2021

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INDEPENDENT AUDITORS’REPORT

NO.00111090ECA

To: Formosan Rubber Group Inc.

Opinions

We have audited the consolidated balance sheet of Formosan Rubber Group Inc. and its subsidiaries as of December 31, 2020 and 2019 and consolidated comprehensiveincome statement, consolidated statement of changes in equity, consolidated statement of cash flows and notes to consolidated financial statements (including summary of material accounting policies) for the January 1 to December 31, 2020 and 2019.

According to the opinion of this CPA, based on our CPA’s audited result, the major aspects of the consolidated financial statements as stated in the above are prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, interpretations as well as interpretation announcements recognized and announced effective by the Financial Supervisory Commission, sufficiently expressing the financial status of Formosan Rubber Group Inc. and its subsidiaries as of December 31, 2020 and December 31, 2019, and the consolidated financial performance and consolidated cash flow of from January 1 to December 31, 2020 and 2019.

Basis of opinion

We have conducted the audit in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the generally accepted auditing standards. With our responsibility under such regulations and standards, we will further explain the responsibility of our audit of the financial statements. The personnel ruled with independence in the accounting office of the certified public accountant (CPA) have followed the Norm of Professional Ethics for Certified Public Accountants to stay impartial and independent from Formosan Rubber Group Inc. and its subsidiaries, and carry out other responsibilities required by the Rules. We believe that we have obtained sufficient and pertinent audit evidence, which provides the basis of our audit opinions.

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Key audit matters

The key audit item refers to the most crucial element of our professional judgment about the audit conducted for the 2020 consolidated financial statements of Formosan Rubber Group Inc. and its subsidiaries. The item has been reflected in our overall audit of the consolidated financial statements and in the process to form our audit opinions, in which we do not individually express our opinion on the item.

Below is the list of key audit issues on the 2020 consolidated financial statements of Formosan Rubber Group Inc. and its subsidiaries:

Valuation of Net Realizable Value of Real Estate For Sale

Summary of key issues for auditing

As of December 31, 2020, the value of real estate for sale on the consolidated balance sheet was NT$ 2,931,616 thousand primarily reflective of the cost with completed properties and land held for sale. These items accounted for approximately 24% of the consolidated total assets. Please refer to Notes 4, 5 and 11 of the consolidated financial statements for detailed information. Formosan Rubber Group Inc. uses the lower of the cost or net realizable value for the valuation of real estate for sale. As the valuation of real estate for sale is subject to the effects of the cycle in the real estate market and the changes of the government policy and the determination of net realizable values for real estate for sale requires major judgment and estimates, it was listed as one of the audit priorities this year.

Audit procedures

The audit procedures were carried out by CPAs as follows:

1. Acquisition of the data concerning the company’s assessment of lower of the costs and net realizable value;

2. Random inspection of the ownership documents for the properties held for sale, in order to validate the integrity of the assessment;

3. Random inspection of the data concerning the estimated selling price and the sale records of the most recent period, so as to determine the basis and reasonability of the management’s estimate of net realizable value.

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Impairment of Property Investments Summary of key issues for auditing

As of December 31, 2020, the value of property investments on the consolidated balance sheet was NT$ 2,713,577thousand accounting for approximately 22% of the consolidated total assets. Please refer to Notes 4, 5 and 16 of the consolidated financial statements for detailed information. Management complies with IAS 36 “Impairment of Assets” by evaluating whether there are any signs indicating the investment properties may be impaired on each balance sheet date. Given the numerous assumptions involved, and the high uncertainty of accounting estimates, it was listed as one of the audit priorities this year.

Audit procedures

The audit procedures were carried out by CPAs as follows:

1. Acquisition of the data concerning the company’s assessment of asset impairments according to cash generating units;

2. Assessment of the reasonability of the management’s identification of impairment signs, assumptions and estimates used, such as the division of cash generating units, forecasting of cash flows, the appropriateness of the discount rate.

Miscellaneous

Formosan Rubber Group Inc. has prepared its individual financial statements for 2020 and 2019, and the auditors have issued an unqualified opinion. Both the statements and the Auditors’ Report are provided for reference. Responsibility of the management and governance unit for the consolidatedfinancial statements

The responsibility of the management is to prepare the adequately expressed financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), interpretations as well as interpretation announcements recognized and announced effective by the Financial Supervisory Commission, and maintain the internal control required by the preparation of the consolidated financial statements, so as to ensure that the consolidated financial statements do not have any material misstatement resulting from corruption or errors.

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Unless that the management plan to liquidate Formosan Rubber Group Inc. and its subsidiaries or stop the business or there are no other practical and feasible measures except liquidation or business closure, the responsibility of the management for preparing the financial statements includes assessment of Formosan Rubber Group Inc. and its subsidiaries’ competence in continuing business operation, disclosure of relevant items and adoption of the business continuation accounting basis.

The governance unit (including the supervisors) of Formosan Rubber Group Inc. and its subsidiaries is liable to supervise the financial reporting process.

Auditor’s responsibilities for the audit of consolidated financial statements

The purpose of our audit of the consolidated financial statements is to obtain reasonable assurance about whether any material misstatement resulting from corruption or errors is existent in the overall consolidated financial statements, and issue the audit report. The reasonable assurance referred to here is a high degree of assurance. Nevertheless, the audit executed in accordance with the generally accepted auditing standards cannot guarantee that the material misstatement existing in the consolidated financial statements can be detected. A misstatement may result from errors or corruption. If the individual amount or compiled amount of a misstatement can be reasonably expected to impact the economic policy made by the user of the consolidated financial statements, it shall be regarded as a material factor.

When conducting the audit according to the generally accepted auditing standards, we used our professional judgment and kept professionally doubtful about dubious things. We also executed the following tasks:

1. Recognize and assess the risk of the material misstatement resulting from corruption or errors; design and take the appropriate coping strategy for the assessed risk; obtain sufficient and pertinent audit evidence as the basis of the audit opinions. Given that corruption may involve conspiracy, falsification, deliberate omission, misstatement or transgression of the internal control, the risk in the failure in detecting the material misstatement resulting from corruption is higher than that resulting from errors.

2. Understand the necessity for obtaining the internal control associated with the audit, so as to design the audit procedure appropriate under the condition at the time. However, the purpose of it is not to express the opinion on the efficacy of Formosan Rubber Group Inc. and its subsidiaries’ internal control.

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1. Assess the propriety of the accounting policy adopted by the management and the rationality of the accounting estimation and relevant disclosures.

2. Conclude if the business continuation accounting basis adopted by the management is proper, and whether the material doubtful event or circumstance likely incurred from the competence of Formosan Rubber Group Inc. and its subsidiaries’ continuing business operation has any material uncertainty according to the acquired audit evidence. If we consider material uncertainty existent in such event or circumstance, we shall remind the user of the consolidated financial statements to pay attention to the relevant disclosures of the consolidated financial statements through our audit report, or modify the audit opinion when such disclosures are not applicable. Our conclusion is made according to the audit evidence acquired until the audit report day. However, the development of future events or circumstances is also likely to bring about Formosan Rubber Group Inc. and its subsidiaries’ incompetence to continue its business operation.

3. Assess the overall representation, structure and content of the consolidated financial statements (including the relevant notes) and check if the related transactions and events are adequately represented in the consolidated financial statements.

4. Acquire sufficient and pertinent audit evidence from the financial information of individual entities composed in the Formosan Rubber Group Inc. and its subsidiaries, so as to express opinions on the consolidated financial statements. We are responsible for the guidance, supervision and execution of the Group’s audit cases, and form the Formosan Rubber Group Inc. and its subsidiaries audit opinions. The items communicated between us and the governance unit cover the planned

audit scope and time and material audit findings (including the significant defects of internal control recognized in the audit process).

We also provide the governance unit with the fact that the personnel of our office who have been required for audit independence have complied with the independent statement stipulated in the Rules of Professional Ethics for Certified Public Accountants of the Republic of China, and communicated with the governance unit for any relations which are likely considered to impact CPA’s independence and other items (including relevant protection measures).

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According to the items communicated with the governance unit, we have determined the key item of our audit of Formosan Rubber Group Inc. and its subsidiaries’ 2020 consolidated financial statements, in which we have described the item in our audit report. Except for the specific items which are not allowed to be publicly disclosed as prescribed by laws and regulations or under a rare situation, we have decided not to communicate specific matters in our audit report because we have reason to believe that the negative influence of the communication is greater than the positive influence on the public interest.

BAKER TILLY CLOCK & CO.

March 19 , 2021

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and its cash flows in accordance with the 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 (or review) such consolidated financial statements are those generally accepted and applied in the Republic of China.

The auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and consolidated financial statements, the Chinese version shall prevail.

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Formosan Rubber Group Inc. and Its Subsidiaries

Consolidated Balance Sheet

Dec. 31, 2020 and 2019

Unit: In Thousands of NTD

Assets	Note	Dec. 31, 2020	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2019
Accounting item		Amount	％	Amount	％
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss-current Financial assets at fair value through other comprehensive income - current Notes receivable, net Accounts receivable, net Other receivables Current tax assets Inventories Real estate for sale and real estate under construction Prepayments Other financial assets-current Other current assets-other Non-current assets Financial assets at fair value through other comprehensive income - non-current Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Deferred tax assets Prepayments for equipment Refundable deposits Other financial assets - non-current Other non-current assets, others	6 7 8 9 9 10 11 12 8 13 14 15 16 27 12	$ 7,948,387	65	$ 8,575,654	66
		1,371,090 72,280 2,919,805 40,765 198,669 6,849 9,783 219,446 2,931,616 61,233 115,653 1,198	11 1 24 － 2 － － 2 24 － 1 －	956,286 － 2,715,634 35,082 92,861 1,044 9,807 257,247 4,305,695 35,682 165,214 1,102	8 － 21 － 1 － － 2 33 － 1 －
		4,308,728	35	4,403,780	34
		522,770 101,966 848,439 41,242 2,713,577 56,375 170 2,291 20,000 1,898	4 1 7 － 22 1 － － － －	557,828 77,564 891,585 46,717 2,764,532 34,090 822 8,322 20,000 2,320	4 1 8 － 21 － － － － －
Total assets		$ 12,257,115	100	$ 12,979,434	100

(The attached notes constitute a part of the consolidated financial statements.)

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Formosan Rubber Group Inc. and Its Subsidiaries

Consolidated Balance Sheet (Continued)

Dec. 31, 2020 and 2019

		Unit: In Thousands of NTD	Unit: In Thousands of NTD	Unit: In Thousands of NTD	Unit: In Thousands of NTD
Liabilities & equity	Note	Dec. 31, 2020		Dec. 31, 2019
Accountingitem		Amount	％	Amount	％
Current liabilities Short-term borrowings Short-term notes and bills payable Contract liabilities Notes payable Accounts payable Other payables Current tax liabilities Lease liabilities-current Other current liabilities Non-current liabilities Deferred tax liabilities Non-current lease liabilities Net defined benefit liability Guarantee deposits received Total liabilities Equity attributable to owners of parent Share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Other equity interest Exchange differences on translation of foreign financial statements Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income Treasury stocks Non-controlling interests Total equity	17 18 11、21 15 27 15 19 20 20	$ 818,341	7	$ 1,919,580	15
		350,000 9,992 197,159 57,581 34,372 136,633 10,488 5,014 17,102	3 － 2 1 － 1 － － －	860,000 399,548 395,698 87,820 20,144 133,717 － 5,281 17,372	7 3 3 1 － 1 － － －
		256,515	2	254,232	2
		173,308 36,674 3,070 43,463	2 － － －	166,455 41,688 3,688 42,401	2 － － －
		1,074,856	9	2,173,812	17
		11,182,259	91	10,806,639	83
		3,423,260	28	3,500,000	27
		456,341	4	466,463	4
		7,245,305	59	6,672,834	51
		1,580,683 304,771 5,359,851	13 2 44	1,526,788 358,637 4,787,409	12 2 37
		57,353	－	167,342	1
		(26,658) 84,011	－ －	(7,448) 174,790	－ 1
		－	－	－	－
		－	－	(1,017)	－
		11,182,259	91	10,805,622	83
Total liabilities & equity		$ 12,257,115	100	$ 12,979,434	100

(The attached notes constitute a part of the consolidated financial statements.)

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Formosan Rubber Group Inc. and Its Subsidiaries

Consolidated Comprehensive Income Statement

From Jan. 1 to Dec. 31, 2020 and 2019

			Unit: In Thousands of NTD	Unit: In Thousands of NTD	Unit: In Thousands of NTD
Accounting item	Note	2020		2019
		Amount	％	Amount	％
Operating revenue Operating costs Gross profit Operating expenses Selling expenses General and administrative expenses Research and development expenses Operating profit Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Expected credit impairment (loss) gain Shares of (loss) profit of associate Income before income tax Income tax (expense) profit Net income Other comprehensive income Items that will not be reclassified subsequently to profit or loss Remeasurements of defined benefit plans Unrealized gains (losses) on valuation of investments in equity instruments measured at fair value through other comprehensive income Shares of other comprehensive (loss) income of associates Income tax benefit related to items that will not be reclassified subsequently Items that may be reclassified subsequently to profit or loss Exchange differences arising on translation of foreign operations Unrealized loss on valuation of investments in debt instruments measured at fair value through other comprehensive income Shares of other comprehensive (loss) income of associates Income tax related to items that may be reclassified subsequently Total comprehensive income for the year Net income attributable to: Shareholders of the parent Non-controlling interests Total comprehensive income attributable to: Shareholders of the parent Non-controlling interests Earnings per share (NT dollars) Basic earnings per share Diluted earnings per share	21 22 23 24 25 27 19 27 27 28	$ 3,282,255 (2,219,968)	100 68	$ 2,701,777 (2,040,089)	100 (76)
		1,062,287 (251,725)	32 (8)	661,688 (237,875)	24 (8)
		(96,091) (145,717) (9,917)	(3) (5) －	(92,754) (132,024) (13,097)	(3) (5) －
		810,562	24	423,813	16
		119,572	4	128,874	5
		10,822 158,663 (44,236) (8,227) (532) 3,082	－ 5 (1) － － －	20,904 154,614 (34,290) (19,630) － 7,276	1 6 (1) (1) － －
		930,134 (28,418)	28 (1)	552,687 (13,737)	21 (1)
		901,716	27	538,950	20
		(116,478)	(3)	184,067	6
		(97,049)	(3)	177,251	6
		468 (116,994) 21,320 (1,843)	－ (4) 1 －	2,542 165,092 10,074 (457)	－ 6 － －
		(19,429)	－	6,816	－
		(24,013) (419) － 5,003	－ － － －	(11,050) 19,570 － (1,704)	－ － － －
		$ 785,238	24	$ 723,017	26
		$ 901,716 －	27 －	$ 538,957 (7)	20 －
		$ 785,238 －	24 －	$ 723,024 (7)	26 －
		$ 2.62 $ 2.61		$ 1.54 $ 1.54

(The attached notes constitute a part of the consolidated financial statements.)

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Formosan Rubber Group Inc. and Its Subsidiaries Consolidated Statement of Changes in Equity

From Jan. 1 to Dec. 31, 2020 and 2019

Unit: In Thousands of NTD

Item				Equity attributable to	Equity attributable to	owners ofthe parent	owners ofthe parent			Non- controlling interests	Total equity
	Capital	Capital surplus		Retained earnings		Otherequityinterest		Treasury stocks	Subtotal
			Legal reserve	Special reserve	Undistributed earnings	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
Balance ofJan.1,2019	$ 3,700,000	$ 492,836	$ 1,505,207	$ 319,584	$ 4,648,289	$ 1,392	$ (46,003)	$ (261,373)	$10,359,932	$ (1,010)	$10,358,922
Legal reserve appropriated Cash dividend Special reserve appropriated Reversal of special reserve Net income in 2019 Other comprehensive income for 2019, net of income tax Total comprehensive income (loss) in 2019 Purchase of treasury share Retirement of treasury share Disposal of financial assets at fair value through other comprehensive income - equity instruments	－ － － －	－ － － －	21,581 － － －	－ － 44,610 (5,557)	(21,581) (238,000) (44,610) 5,557	－ － － －	174,790－ － － －	－ － － －	－ (238,000) － －	－ － － －	－ (238,000) － －
	－ －	－ －	－ －	－ －	538,957 2,034	－ (8,840)	－ 190,873	－ －	538,957 184,067	(7) －	538,950 184,067
	－	－	－	－	540,991	(8,840)	190,873	－	723,024	(7)	723,017
	－ (200,000) －	－ (26,373) －	－ － －	－ － －	－ (73,317) (29,920)	－ － －	－ － 29,920	(38,317) 299,690 －	(38,317) － －	－ － －	(38,317) － －
Balance of Dec. 31,2019	3,500,000	466,463	1,526,788	358,637	4,787,409	(7,448)	174,790	－	10,806,639	(1,017)	10,805,622
Legal reserve appropriated Cash dividend Reversal of special reserve Net income in 2020 Other comprehensive income for 2020, net of income tax Total comprehensive income (loss) in 2020 Purchase of treasury share Retirement of treasury share Disposal of financial assets at fair value through other comprehensive income - equity instruments Increase (decrease) in non- controllinginterests	－ － －	－ － －	53,895 － －	－ － (53,866)	(53,895) (280,000) 53,866	－ － －	－ － －	－ － －	－ (280,000) －	－ － －	－ (280,000) －
	－ －	－ －	－ －	－ －	901,716 (704)	－ (19,210)	－ (96,564)	－ －	901,716 (116,478)	－	901,716 (116,478)
	－	－	－	－	901,012	(19,210)	(96,564)	－	785,238	－	785,238
	－ (76,740) － －	－ (10,122) － －	－ － － －	－ － － －	－ (42,756) (5,785) －	－ － － －	－ － 5,785 －	(129,618) 129,618 － －	(129,618) － － －	－ － － 1,017	(129,618) － － 1,017
Balance of Dec. 31,2020	$ 3,423,260	$ 456,341	$ 1,580,683	$ 304,771	$ 5,359,851	$ (26,658)	$ 84,011	$ －	$11,182,259	$ －	$11,182,259

(The attached notes constitute a part of the consolidated financial statements.)

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Formosan Rubber Group Inc. and Its Subsidiaries

Consolidated Statement of Cash Flows

From Jan. 1 to Dec. 31, 2020 and 2019

Unit: In Thousands of NTD

	Unit:	In Thousands of NTD
Item	From Jan. 1 to Dec. 31, 2020	From Jan. 1 to Dec. 31, 2019
	Amount	Amount
Cash flows from operating activities: Income before income tax Adjustments for: Depreciation expense Expected credit impairment loss (gain) Net loss (gain) on financial assets and (liabilities) at fair value through loss (profit) Interest expense Interest income Dividend income Share of loss (profit) of associates Loss (gain) on disposal of property, plant and equipment Loss (gain) on disposal of investment properties Loss (gain) on disposal of investments Impairment loss on non-financial assets Unrealized foreign exchange loss (gain) Changes in operating assets and liabilities Notes receivable Accounts receivable Other receivables Inventories Real estate for sale and real estate under construction Prepayments Other current assets Notes payable Accounts payable Other payables Contract liabilities Receipts in advance Other current liabilities Net defined benefit liability Cash generated from operations	$ 930,134 111,880 817 (1,870) 8,227 (10,822) (149,075) (3,082) － 1,589 (4,069) 3,477 1,907 (5,606) (106,170) (4,897) 37,801 1,374,079 (25,551) (96) (30,239) 14,228 9,234 (198,539) 292 (562) (149)	$ 552,687 123,648 (1,556) (1,240) 19,630 (20,904) (146,399) (7,276) (388) (696) 29,998 1,494 － (4,329) 60,025 9,474 182,075 1,001,097 29,152 96 (35,790) (24,982) (19,539) (61,257) (464) (19) (498)
	1,952,938	1,684,039

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Formosan Rubber Group Inc. and Its Subsidiaries

Consolidated Statement of Cash Flows (Continued)

From Jan. 1 to Dec. 31, 2020 and 2019

	Unit: In Thousands of NTD From Jan. 1 to Dec. 31,2020 From Jan. 1 to Dec. 31,2019 Amount Amount 9,997 19,910 149,075 146,399 (8,227) (20,090) (30,178) (47,173) 2,073,605 1,783,085 (414,910) (390,424) 97,418 34,518 4,500 8,000 (70,410) － － 17,281 (8,118) (11,753) － 687 6,031 3,062 (10,484) － － 1,008 － 828 49,561 469,145 422 422 652 (774) (345,338) 132,000 (510,000) (1,160,000) (389,556) (320,095) 1,062 (1,960) (5,281) (6,182) (280,000) (238,000) (129,618) (38,317) (1,313,393) (1,764,554) (70) (6,419) 414,804 144,112 956,286 812,174 $ 1,371,090 $ 956,286	Unit: In Thousands of NTD From Jan. 1 to Dec. 31,2020 From Jan. 1 to Dec. 31,2019 Amount Amount 9,997 19,910 149,075 146,399 (8,227) (20,090) (30,178) (47,173) 2,073,605 1,783,085 (414,910) (390,424) 97,418 34,518 4,500 8,000 (70,410) － － 17,281 (8,118) (11,753) － 687 6,031 3,062 (10,484) － － 1,008 － 828 49,561 469,145 422 422 652 (774) (345,338) 132,000 (510,000) (1,160,000) (389,556) (320,095) 1,062 (1,960) (5,281) (6,182) (280,000) (238,000) (129,618) (38,317) (1,313,393) (1,764,554) (70) (6,419) 414,804 144,112 956,286 812,174 $ 1,371,090 $ 956,286
Item	From Jan. 1 to Dec. 31,2020	From Jan. 1 to Dec. 31,2019
	Amount	Amount
Interest received Dividends received Interest paid Income tax paid Net cash generated by operating activities Cash flows from investing activities: Cash paid for acquisition of financial assets at fair value through other comprehensive income Proceeds from financial assets at fair value through other comprehensive income Return of capital from financial assets at fair value through other comprehensive income Cash paid for financial assets at fair value through profit or loss Proceeds from financial assets at fair value through profit or loss Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) refundable deposits Acquisition of investment properties Proceeds from disposal of investment properties Decrease in notes and accounts receivable Decrease in other financial assets Decrease in other non-current assets (Increase) decrease in prepayments for equipment Net cash (used in) generated by investing activities Cash flows from financing activities: (Decrease) in short-term borrowings (Decrease) in short-term notes and bills payable Increase (decrease) in guarantee deposits received Payments of lease liabilities Cash dividends paid Payments to acquire treasury shares Net cash (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net Increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end ofyear	9,997 149,075 (8,227) (30,178)	19,910 146,399 (20,090) (47,173)
	2,073,605	1,783,085
	(414,910) 97,418 4,500 (70,410) － (8,118) － 6,031 (10,484) － － 49,561 422 652	(390,424) 34,518 8,000 － 17,281 (11,753) 687 3,062 － 1,008 828 469,145 422 (774)
	(345,338)	132,000
	(510,000) (389,556) 1,062 (5,281) (280,000) (129,618)	(1,160,000) (320,095) (1,960) (6,182) (238,000) (38,317)
	(1,313,393)	(1,764,554)
	(70)	(6,419)
	414,804 956,286	144,112 812,174
	$ 1,371,090	$ 956,286

(The attached notes constitute a part of the consolidated financial statements.)

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Formosan Rubber Group Inc. and Its Subsidiaries

Notes to Consolidated Financial Statements

From Jan. 1 to Dec. 31, 2020 and 2019

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

1. Company profile

Formosan Rubber Group Inc. (hereafter referred to as the “FRG”) was founded in 1963 under the Company Act of the Republic of China. The company produces and markets rubber sheets, plastic sheets, plastic foam sheets and PVC resin sheets, as well as the relevant materials. In order to diversity its operations, FRG started in September 1995 the property development business and the leasing, sale and management operations for its own properties and land. FRG became a listed company on the Taiwan Stock Exchange in March 1992.

The consolidated financial statements consist of FRG and its subsidiaries (collectively the“Company”).

2. Date and procedure approving financial statements

The consolidated financial statements were approved and published by the board of directors on March 19, 2021.

3. Applicability of newly published and amended standards and interpretations

• (1) Effect of the adoption of new issuances of or amendments to International

Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

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

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

Except for the following,the Company believes that the initial adoption of the abovementioned standards or interpretations would not have a material impact on its accounting policies.

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• (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but

not yet adopted by the Company

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

from 2021 are as follows:
New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform – Phase 2’	January 1, 2021 January 1, 2021

The Company believes that the initial adoption of abovementioned standards or interpretations would not have a material impact on its accounting policies.

• (3) The IFRSs issued by IASB but not yet endorsed by FSC

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

New Standards, Interpretations and Amendments

Effective Date Issued by IASB

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, 'Insurance contracts' Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 1, ‘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’

January 1, 2022 January 1, 2022 To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 January 1, 2022

The Company believes that the initial adoption of abovementioned standards or interpretations would not have a material impact on its accounting policies.

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4. Summary of significant accounting policies

(1)Compliance statement

This is the Company’s first set of consolidated financial statements prepared according to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS) and IFRIC as well as interpretation announcements approved by the FSC.

(2) Preparation bases

Other than the financial assets measured at the fair value and the pension liability recognized with the net value (assets less the present value of the liabilities due to defined benefits), the consolidated financial statements are based on historical costs, usually the fair value paid for the acquisition of assets.

(3)Consolidated bases

The consolidated financial statements include the financials of FRG and the entities (subsidies) it controls.

The consolidated comprehensiveincome statement has incorporated the operating incomes or losses of the acquired or disposed subsidiaries as of the dates of acquisition or disposal. Other comprehensive incomes of the subsidiaries are contributions to the FRG’s owner’s equity and non-controlling interests. In other words, the non-controlling interests are the loss balance.

The financial reporting of subsidiaries has been appropriately adjusted so that their accounting policies are consistent with the Company.

All the major transactions, balances, gains and losses between the Company and consolidated entities have been completely eliminated upon consolidation. In case of any change in the ownership’ equity of subsidies without causing the Company to use the control over the subsidies, such changes are treated as equity transactions. In order to reflect the corresponding change to the Company’s shareholders’ equity and non-controlling interests, the book values shall be adjusted. The delta between the adjustment in non-controlling interests and the fair value paid or received shall be recognized as part of the Company’s owners’ equity.

Upon the loss of the control over a subsidiary, the gain or loss from the disposal

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is the delta between the following: (1) the sum of the fair values charged for the assets and the fair value for the residual investment into the former subsidiary as of the date of control loss; (2) the sum of the book values for the assets (including goodwill), liabilities and non-controlling interests of the former subsidiary as of the date of control loss. All the values recognized for the subsidiary concerned in other comprehensive incomes and the accounting treatment for the disposal of the relevant assets or liabilities must comply with the same basis.

The residual investment in the former subsidiary is based on the fair value on the date of control loss.

• A. The detailed information of subsidiaries included in the consolidated financial statements, as follows:

Investing company	Subsidiary	Percentage of shares held by this Company	Percentage of shares held by this Company
		Dec. 31, 2020	Dec. 31, 2019
FRG FRG FRG	Da-Guan Recreation Company (Taiwan) Ban Chien Development Co., Ltd. (Taiwan) FRG US Corp. (San Francisco)	－ 100％ 100％	80％ 100％ 100％

• a. Da-Guan Recreation Company has passed the dissolution and liquidation at the temporary shareholders meeting on October 22, 2020, and FRG lost control of Da-Guan Recreation Company.

• b. Ban Chien Development Co., Ltd. is engaged in the development of residential and commercial buildings for renting and selling. The construction of such buildings is outsourced.

• c. In order to jointly invest in the development project of 950 Market Street in San Francisco, USA with Continental Construction Group, the establishment of FRG US Corp. was approved by the board of directors in 2017, with an investment limit of USD 20,000 thousand. Its main businesses are real estate investment, development and rental and sales of premises.

  • As of December 31, 2020 and 2019, FRG has remitted Investment fund of NT$461,349 thousand (USD15,052 thousand) and NT$460,142 thousand (USD15,012 thousand) respectively.

• d. The financial statements of the consolidated subsidiaries are based on their audited financial statements during the same period.

• B. Subsidiaries not included in the consolidated financial statements:

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The major business site of the Company’s subsidiary Kingshale Industrial Limited is in Hong Kong and the Company has held 99.99% of the subsidiary’s voting shares and ownership. The subsidiary is an intermediary company entrusted by the Company to transfer its investment in mainland China. For the current period, Kingshale Industrial Limited did not have any material transactions with the Company, and it did not have any material assets and liabilities left at the end of the period either. Hence, it was not included in the consolidated financial statement as an entity.

C. Subsidiaries that have non-controlling interests that are material to the Company: none

(4) Foreign Currency

The individual financial statements for the consolidated entities are prepared and presented in the functional currency for these entities (i.e. the currency used in the economy they operate in). The functional currency and the presentation currency of FRG’s consolidated financial statements is NT Dollars. All the financial performances and statuses are converted into the NT dollars for the preparation of the consolidated statements.

Any transactions not in the functional currency shall be converted and recognized according to the exchange rate on the transaction dates in the preparation of the individual financial statements for the consolidated entities. The monetary items in foreign currencies shall be recalculated according to the spot exchange rate on the end-of-the-period date. Any difference resultant from exchange rates shall be recognized as profits or losses during the period. The non-monetary items in foreign currencies measured with the fair value shall be recalculated according to the exchange rate on the date of fair value determination. Any different resultant from exchange rates shall be recognized as profits or losses during the period. However, any difference as a result of changes in the fair value shall be recognized as other comprehensive incomes or losses. The non-monetary items in foreign currencies measured by historical costs shall not be recalculated.

For the purpose of presenting consolidated financial statements, the functional

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currencies of the group entities are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

On the disposal of a foreign operation, all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Corporation are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Corporation losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to non-controlling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

(5) Standards to classify current and non-current assets and liabilities

The basis for current and non-current assets and liabilities for the real estate development business is based on the operating cycle. All the other items following the principles below:

Current assets are the assets held for trading purposes or expected to be realized or exhausted within one year. Any assets not classified as current are noncurrent assets. Current liabilities are the liabilities held for trading purposes or expected to be repaid within one year. Any liabilities not classified as current are non-current liabilities.

(6) Cash equivalents

Cash equivalents can be converted into a fixed amount of cash at any time. They are short-term, highly liquid investments with minimum changes in value. Bank overdrafts, a credit facility that can be immediately repaid, are part of the Company’s cash management. They are reported under cash and cash equivalents in the statement of cash flows, and as an item in short term loans in current liabilities on the balance sheet.

(7) Inventory and real estate for sale and real estate under construction

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Inventories include raw materials, supplies, finished goods and work-in-process. Inventories are measured at the lower of cost or net realizable value. Comparisons between cost and net realizable value are made on an item-byitem basis, except for inventories of the same type. Net realizable value is the estimated selling price under normal circumstances, less estimated costs to complete and estimated costs to sell. The cost of inventories is calculated using the weighted-average method.

If a house is exchanged for land under a subdivision contract and is classified as land for sale, no gain or loss is recognized on the exchange and revenue is not recognized until the land is sold to the buyer.

(8) Investments accounted for under equity method

Investments in associates are reported according to the equity method.

Associates are the companies over which FRG has significant influence. Associates are not entitles of subsidiaries.

The investment in associates shall be recognized as costs under the equity method. After the asset acquisition, the book value shall change in line with the Company’s share of profits and losses, other comprehensive income and profit distributions. Meanwhile, the recognized equity value of the associates also changes in line with any increase or decrease in the Company’s shares.

If the Company does not subscribe to the new shares of associates on a pro-rata basis according to existing holdings, and any increase or decrease is incurred to the percentage of the Company’s holdings and hence net equity value of the investment, the adjustment shall be reflected with the change in capital surplus and according to the equity method. If the Company has not subscribed or acquired to new shares on a pro-rata basis and seen a reduction in its stake in the associates, the amounts recognized in other comprehensive income and the reclassification as a result of the values for the associates concerned should have the same basis for accounting treatment as if the assets or the liabilities of the associates were directly disposed. Any debit should be made from the capital surplus. However, if the capital surplus is insufficient for debits incurred by investments under the equity method, the debit may be drawn from retained earnings.

The residual investment of the previous associates should be measured with the

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fair value on the date of loss of significant influence. The delta between the sum of the fair value of the residual investment and the disposal amounts and the book value of the investment on the date of loss of significant control shall be recognized in the income statement during the period. Meanwhile, the values recognized in relation to the associates concerned in other comprehensive income shall have the same accounting basis as if the assets or the liabilities of the associates were directly disposed.

Only the profits and losses resultant from upstream, downstream and lateral transactions with associates not relevant to the Company’s stake in the associates can be recognized in the consolidated financial statements.

(9) Property, plant and equipment

The property, plant and equipment are listed in accordance with cost less depreciation and accumulated impairment. Cost shall include the incremental cost able to be directly attributed to acquisition or asset implementation.

Straight-line method is applied to depreciation, by indicating the amount of an asset within the durable service life offset its cost and less its residual value. All the major components of the non-current assets shall be depreciated on a standalone basis. Depreciation is accrued in accordance with the following durable service years: building, 3-55 years; machinery equipment, 3-26 years; transportation and other equipments, 3-24 years.

Estimated durable service life, residual value and depreciation method shall be reviewed at the end of the reporting period; prospective application shall be made for any impact on estimation change.

The profit or loss incurred during disposition or obsolescence of property, plant and equipment shall be recognized in the income statement with the differential amount between the disposition price and asset book account.

(10) Investment property

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Only if investment properties is attempted for earning rental or capital appreciation or both may it be classified as the investment properties. The investment properties shall be measured according to its original cost, including related transaction cost, and related interest capitalization shall be made during the construction period. Cost model shall be applied to follow-up measurement, to be measured by cost less the amounts of accumulated depreciation and accumulated impairment.

In case straight-line method is applied to depreciation and building depreciation accrued by 23-50 years.

Estimated durable service life, residual value and depreciation method shall be reviewed at the end of the reporting period; prospective application shall be made for any impact on estimation change.

The profit or loss incurred during disposition or obsolescence of property, plant and equipment shall be recognized in the income statement with the differential amount between the disposition price and asset book account.

(11) Lease

A. 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.

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.

When a lease includes both land and building elements, the Company

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assesses the classification of each element separately as a finance or an operating lease based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the Company. The lease payments are allocated between the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of a contract. If the allocation of the lease payments can be made reliably, each element is accounted for separately in accordance with its lease classification. When the lease payments cannot be allocated reliably between the land and building elements, the entire lease is generally classified as a finance lease unless it is clear that both elements are operating leases; in which case, the entire lease is classified as an operating lease.

B. 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 lowvalue 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. 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 consolidated 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 rightof-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease

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payments, which comprise fixed payments and variable lease payments which depend on an index or a rate. 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 future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the rightof-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 consolidated balance sheets.

(12) Impairment of non-financial assets

The Company shall review the book amounts of tangible assets and intangible financial assets at the end of the reporting period to decide whether there is any impairment with such assets. In case it shows any impairment situation, the estimated recoverable amount of assets shall decide the recognized loss amount. In case there is no way of estimating the recoverable amount of an individual asset, the Company shall estimate the recoverable amount of the cashgenerating unit of the said asset. In case it can be amortized according to a reasonable and conforming basis, shared assets shall also be amortized to an individual cash product sector. Otherwise it shall be amortized to the minimal cash-generating unit group according to a reasonable and conforming basis.

The recoverable amount shall be fair value less sales cost and its use value whichever is higher.

In case the recoverable amount of an asset or cash-generating unit is anticipated

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to be lower than the book amount, the book amount of the said asset or cashgenerating unit shall be adjusted and decreased to its recoverable amount; any impairment loss shall be immediately recognized to the current profit and loss. When any impairment loss reverses in a subsequent period, the book amount of asset or cash-generating unit shall be adjusted and increased to the estimated recoverable amount after revision, provided the book amount after increase shall be limited to the reasonable book amount under the situation when the said asset or cash-generating unit did not recognize an impairment loss in the past years (except for goodwill). The reversed impairment loss shall be immediately recognized to the current profit and loss.

(13) Employee benefits cost

The short-term employee benefits obligation is measured with the basis without discount, and shall be recognized as expenses when providing the related service. Concerning the anticipated payable amount concerning short-term cash bonus or a bonus sharing plan, if it is a current legal or prescribed obligation to be borne by a company due to the past service provided by employees, and the said obligation can be estimated in a reliable manner, such amount shall be listed as liability.

When an expense belongs to defined contribution plans, during the service period provided by employees, it is required to recognize the pension amount contributable as the current expense.

The cost of defined benefits (including service costs, net interests and remeasurements) shall be calculated according to the projected unit credit method. Service costs and net interests of the defined benefits liabilities shall be recognized as employee benefits expenses when incurred, or when the defined benefit plans is modified, shortened or repaid. The re-measurement shall be recognized as other comprehensive income and the retained earnings. There is not reclassification into profits and losses during subsequent periods.

Net defined benefit liabilities refer to the shortfall appropriation of the defined benefit retirement plan, whereas net defined benefit assets shall not exceed the plan’s refunded amount or may reduce the present value of the future appropriation amount.

(14) Financial Instrument

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Financial assets and financial liabilities shall be recognized when the Company becomes a party of the said financial instrument clause.

Upon the original recognition of financial assets and financial liabilities, they shall be measured according to fair values. Upon the original recognition, concerning the acquired or distributed transaction cost directly attributable to financial assets and financial liabilities (except for the financial assets and financial liabilities classified as measurement according to fair value of profit and loss), it shall be increased or decreased from the fair values of the said financial assets or financial liabilities. The transaction costs of financial assets and financial liabilities directly attributable to the ones measured according to fair values through profit and loss shall be immediately recognized as profit and loss.

A. Financial assets

The convention trading of financial assets is recognized and removed by trading day accounting.

• a. Type of measurement

Financial assets are classified into the following categories: financial assets at FVTPL, financial assets at amortized cost, investment in debt instruments measured at FVTOCI, and investments in equity instruments at FVTOCI.

• A) Financial asset at FVTPL

Financial assets measured at fair value through profit or loss are financial assets mandatorily measured at fair value through profit or loss and financial assets at fair value through profit or loss, designated as upon initial recognition. Financial assets mandatorily measured at fair value through profit or loss include investments in equity instruments that are not designated by the Company to be measured at fair value through other comprehensive income and investments in debt instruments that fail to meet the criteria as to be measured at amortized cost or at fair value through other comprehensive income.

Financial assets measured at fair value through profit or loss are

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measured at fair value. The dividends and interests generated are recognized in other income and interest income, respectively, and any gain or loss arising from remeasurement is recognized in other gains and losses.

B) Measured at amortized cost

When a company after merger simultaneously meets the following two conditions in its investment in financial assets, the financial assets are classified as the ones carried at cost after amortization:

• a) The financial assets are held under a specific operation mode, in which the purpose of the mode is to hold the financial assets in order to collect contract cash flows.

• b) The cash flow generated on a specific date due to contract clauses is completely for the payment of the principal and the interest accrued from the outstanding principal amount.

Subsequent to initial recognition, financial assets measured at amortized cost are measured at amortized cost, which equals to carrying amount determined by the effective interest method less any impairment loss. Foreign exchange gains and losses are recognized in profit or loss.

Except for the two conditions below, the interest income is calculated by multiplying the effective interest rate by the total book value of the financial assets:

• a) The interest income of the purchased or originated credit-impaired financial assets is calculated by multiplying the credit-adjusted effective interest rate by the cost of amortized financial assets.

• b) The interest income of the financial assets which are not purchased or originated credit-impairment but subsequently become creditimpaired financial assets is calculated by multiplying the effective interest rate by the cost of amortized financial assets.

• C) Investment in debt instruments measured at FVTOCI

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Debt instruments that meet the following two conditions are classified as financial assets at fair value through other comprehensive income:

• a) The debt instruments are held within a business model whose objective is to collect the contractual cash flows and to sell the financial assets; and

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

Investments in debt instruments at fair value through other comprehensive income are measured at fair value. Changes in the carrying amount of investments in debt instruments at fair value through other comprehensive income, such as interest revenue calculated using the effective interest method, gain (loss) on foreign exchange and impairment loss or gain on reversal, are recognized in profit or loss. Other changes in the carrying amount of such instruments are recognized in other comprehensive income and will be reclassified to profit or loss when such instruments are disposed of.

• D) 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 at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent considerati on 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, they will be transferred to retained earnings.

Dividends on these investments in equity instruments at FVTOCI are

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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

At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable) investments in debt instruments at fair value through other comprehensive income, lease payments receivable due, and contract assets based on their expected credit losses on each balance sheet date.

The loss allowance for accounts receivable and lease payments receivable due is measured at an amount equal to lifetime expected credit losses. For financial assets at amortized cost, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from possible default events of a financial instrument within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from all possible default events over the expected life of a financial instrument.

The expected credit loss is calculated according to the average weighted credit loss in which the risk rated ratio of default occurrence is used in calculation. The 12-month expected credit loss represents the credit loss expected to occur to the financial instruments within 12 months after their reporting day due to possible default. The expected credit loss in the duration period refers to the credit loss expected to occur to the financial instruments in the expected duration period due to possible default.

The Company recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at fair value through other comprehensive income, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial assets.

(15) Income recognition

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After identifying the performance obligations of contracts with the customers, the Company allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are met.

(16) Borrowing costs

The cost of borrowing for the funds directly used to acquire, construct or produce the assets (which will reach the status ready for use or available for sale after a long period of time) can be treated as part of the asset costs, until the completion of almost all the necessary activities to get the assets ready for use or available for sale.

Other than the above, all the borrowing costs shall be recognized in the income statement during the current period.

(17) Income tax

Income tax expenses include income taxes during the period and deferred income taxes, and should be recognized as income taxes in the profit and loss income, except for the income taxes during the period and deferred income taxes recognized as other comprehensive incomes or directly as an equity item. A. Current tax

The current income tax is based on the taxed income of the said year. Since partial income and expense is taxable item or deductible of other years, or not attributing to taxable or deductible item in accordance with related tax laws, it causes the taxable income to differ from the reported net profit in the consolidated income statement. The related liabilities of the current income tax are calculated by the legislated or substantially legislated tax rate at the end of the reporting period. It is estimated by the income tax of the previous year, serving as the adjustment of the current income tax.

According to the provisions of Income Tax Law, The unallocated earnings of the Company adding 10% profit-seeking enterprise income tax shall be recognized as the current expense in the allocated earning year resolved in the shareholders’ meeting

B. Deferred tax

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Deferred income tax is recognized by the temporary differential calculation generated from the taxation basis of book amounts of the recorded assets and liabilities and income through taxation calculation. Deferred income tax liabilities in general are recognized by the temporary differences of all future taxes payable. Deferred income tax assets are recognized by all likely future taxes less the deductible temporary difference in use.

Deferred income tax assets and deferred income tax liabilities may only be mutually offset when concurrently conforming to the following conditions: (1) a company has legal execution right to mutually offset the current income tax assets and income tax liabilities; and (2) deferred income tax assets and deferred income tax liabilities are levied by the same taxation authority towards the same tax payment major entity, or levied towards different tax payment corporate entities, yet each major entity attempts to, at each future period of the deferred income tax liabilities or assets pay-off or recovery of the major amount, pay off the current income tax liabilities and assets on net-amount basis, or concurrently realize assets and pay off liabilities.

The temporary differences in tax payables related to invested subsidiary company and associates are all recognized as deferred income tax liabilities, provided if the Company can control the time point of temporary difference reverse, and the said temporary differences may very likely not be reversed in the foreseeable future are excluded. The deferred income tax assets generated from the related deductible temporary differences to this kind of investment and equity can only be recognized in the gains very likely with sufficient taxable income used to realize the temporary differences, and be within the scope of reverse within the anticipated future.

The book amounts of deferred income tax assets shall be reviewed at the end

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of the reporting period, and adjust and decrease the book amounts for all or partial assets without sufficiently taxable income to serve it to recover. Concerning the ones originally not recognized deferred income tax assets, they shall also be reviewed at the end of the reporting period, and adjust and increase the book amounts for all or partial assets very likely to generate taxable income to serve it to recover.

The deferred income tax assets and liabilities are measured by expected liabilities pay-off or assets in realizing the current tax rate, while the said tax rate shall be based on the legislated or already substantially legislated tax rate at the end of the reporting period. The measurement of deferred income tax liabilities and assets shall reflect the tax consequences of a company generated in expected recovery or pay-off of the book amounts of its assets and liabilities at the end of the reporting period.

(18) Treasury stocks

The recovered issued stock shall be recognized as treasury stocks I accordance with the paid cost upon buy-back. In case the disposition price in disposing treasury stocks is higher than the book value, its difference shall be listed as capital surplus – treasury stocks trade; in case the disposition price in disposing treasury stocks is lower than the book value, its difference shall be offset the capital surplus generated from the trade of the treasury stocks of the same category of treasury stocks; in case of any deficit, it shall be debited to keep the surplus. Weighted average shall be applied to the book value of treasury stocks and be separately calculated in accordance with the recovery reasons.

Upon cancellation of treasury stocks, it shall be debited to keep the capital surplus – stock issue premium and share capital; in case its book value is higher than the total sum of par value and stock issue premium, its difference shall offset the capital surplus generated from the trade of the treasury stocks of the same category of treasury stocks; in case of any deficit, it shall be debited to offset retained earnings; in case the book value of treasury stocks is lower than the total amount of par value and stock issue premium, it shall be credited as the capital surplus generated from the trade of the treasury stocks of the same category of treasury stocks.

5. Citical Accounting Judgements, And Key Sources Of Estimation And

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Uncertainty

The Company upon applying the accounting policy stated in Note 4 provides related judgments, estimations and assumptions for the information acquired from other resources which are based on historical experience and other factors deemed crucial. The actual result may differ from what is estimated.

The Company shall be continuously reviewing estimations and basic assumptions. In case the revision of estimations would influence the current period, then the current recognition shall be revised in accounting estimations. In case the revision of accounting estimations would concurrently influence the current period and future period, then the estimations revision shall be recognized in both the current period and future period.

The following shows the information related to major assumptions made in the future, and other major sources of uncertainty at the end of the financial reporting period; the said assumptions and estimations have risks of causing book amounts of assets and liabilities to incur major adjustments in the following fiscal year. (1) Evaluation of inventory and real estate for sale

Since inventory and real estate for sale shall be priced by cost and net cash realizable value whichever is lower, therefore the Company shall use judgments and estimations to determine the net cash realizable value at the end of the financial reporting period.

Since industry rapidly changes, the inventory and real estate for sale of the Company at the end of the financial reporting period due to the amounts of normal wear and tear, obsolescence, or without market selling price, offsets its cost to decrease to its net cash realizable value. The evaluation of this inventory and real estate for sale mainly based on the product demand in the future specific period as estimation basis; therefore, it may generate major changes.

• (2) Impairment evaluation of tangible assets and intangible assets (except for

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goodwill)

During the asset impairment evaluation process, the Company shall rely on subjective judgments and, with basis on asset use mode and rubber, real estate industry characteristics, determine independent cash flow asset durable years and future likely generated revenues and expenses of specific asset groups; any change in estimations from changes in economic status or corporate policies may likely cause major impairment in the future.

6. Cash and cash equivalents

Cash and cash equivalents	Cash and cash equivalents
Dec. 31,2020 Dec. 31,2019 Cash and petty cash $ 516 $ 579 Cash in bank 770,249 376,407 Cash equivalent Commercial paper 600,325 279,000 Time deposits with maturity — 300,300 Total $ 1,371,090 $ 956,286 inancial assets at fair value through profit or loss-current Dec. 31, 2020 Current financial assets at fair value through profit or loss, designated as upon initial recognition Fund $ 72,280 inancial assets at fair value through other comprehensive income Dec. 31,2020 Dec. 31,2019 Equity instruments Stock of domestic listed (OTC) companies $ 2,702,578 $ 2,475,515 Stock of foreign listed (OTC) companies 15,395 － Stock of emerging companies 7,860 7,860 Stock not classified to listed (OTC) and emerging companies 171,453 174,107 Stock of foreign companies 425,428 449,370 Debt instruments Financial bond 65,412 － Plus (Less): adjustment of financial assets for transaction 54,449 166,610 Total $ 3,442,575 $ 3,273,462 Current $ 2,919,805 $ 2,715,634 Non-current $ 522,770 $ 557,828		Dec. 31,2019
		$ 579 376,407 279,000 300,300
		$ 956,286
Equity instruments Stock of domestic listed (OTC) companies Stock of foreign listed (OTC) companies Stock of emerging companies Stock not classified to listed (OTC) and emerging companies Stock of foreign companies Debt instruments Financial bond Plus (Less): adjustment of financial assets for transaction Total Current Non-current	Dec. 31,2020 $ 2,702,578 15,395 7,860 171,453 425,428 65,412 54,449 $ 3,442,575 $ 2,919,805 $ 522,770
		$ 2,475,515 － 7,860 174,107 449,370 － 166,610
		$ 3,273,462
		$ 2,715,634
		$ 557,828

7.Financial assets at fair value through profit or loss-current

8.Financial assets at fair value through other comprehensive income

(1) The Company has signed a loan business trust contract with Chinatrust

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Commercial Bank, Co., Ltd. on July 1, 2010, by delivering the trust of partial listed (OTC) companies stocks to Chinatrust Commercial Bank, Co., Ltd. for management, use, while the beneficiary of the trust revenue was the Company, with the contract period ending on July 13, 2019.

• (2) The Company signed a loan business trust contract with MasterLink Securities Corporation on June 5, 2015, delivering the trust of partial listed (OTC) companies stocks to MasterLink Securities Corporation for management, use, while the beneficiary of the trust revenue was the Company, with the contract period ending till an initiative termination of the trustor. Up to December 31, 2020, the book amount of stock delivered for trust is NT$436,880thousand.

• (3)The Company signed a securities lending agreement with SinoPac Securities Corporation on April 10, 2020. Dividends and bonuses, being generated during the loan period should be repaid to the company. According to the agreement, when there is no loan transaction for more than three consecutive years, the agreement would be terminated. Up to December 31, 2020, the book amount of lending stock is NT$578,949 thousand.

• (4) Credit risk management for investments in debt instruments

Investments in debt instruments were classified as at FVTOCI ：

Gross carrying amount Less: Allowance for impairment loss Amortized cost Adjustment to fair value Total	Dec. 31,2020
	$ 65,412 (532)
	64,880 (951)
	$ 63,929

The company only invests in debt instruments that have low credit risk for the purpose of impairmentassessment.The Company continuously tracks information to monitor changes in the credit risk of the debt instruments that it invests in, and also reviews other information such as material information about the debtor to assess whether there is a significant increase in credit risk since the investment was recognized.

The Company considers the historical default rates of each credit rating

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supplied by external rating agencies to estimate 12-month or lifetime expected credit losses.

The book amounts of investments in each credit level debt instrument and the applicable expected credit loss rates are as follows:

Dec. 31, 2020

	Dec. 31, 2020
Credit Rating Performing	Expected credit loss rate 0.12～4.8％	Through other comprehensive income measured at fair value of book amount
		$ 65,412

The allowance for impairment loss of investments in debt instruments at FVTOCI is as follows:

FVTOCI is as follows:
Balance, beginning of year New purchase in this period Balance, end of year Notes and accounts receivable ,net Notes receivable Allowance for doubtful accounts Net amount Accounts receivable Allowance for doubtful accounts Net amount	For the Year Ended December 31, 2020 $ － 532 $ 532 Dec. 31, 2020 Dec. 31, 2019 $ 41,043 $ 35,437 (278) (355) $ 40,765 $ 35,082 Dec. 31, 2020 Dec. 31, 2019 $ 201,203 $ 97,429 (2,534) (4,568) $ 198,669 $ 92,861
		$ 35,437 (355)
		$ 35,082
		Dec. 31, 2019
		$ 97,429 (4,568)
		$ 92,861

9. Notes and accounts receivable ,net

(1) The crediting period of the Company to a customer in principle shall be 30 days after the invoice date, while partial customers are credit time 30 days to 90 days. In addition to the actual credit impairment of individual customers, the Company makes reference to historical experience, considers the financial situation of individual customers and the industry, competitive advantage and prospects, and differentiates customers into different risk groups and incorporates forward-looking information. The expected loss rate of the Company recognizes the allowance loss.

(2)Aging analysis of accounts receivable of the Company is stated as follows:

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Non past due Past due less than 90 days Past due 91-180 days Past due 181-365 days More than 366 days past due Non past due Past due less than 90 days Past due 91-180 days Past due 181-365 days More than 366 days past due		Dec. 31, 2020
	Carrying amount of accounts receivable	Expected credit loss rate	Loss allowance for lifetime expected credit losses
	$ 222,822 16,642 2,295 195 292	1～2％ 2～5％ 10～20％ 50％ 100％ Dec. 31, 2019	$ 1,875 389 158 98 292
	$ 242,246		$ 2,812
	Carrying amount of accounts receivable	Expected credit loss rate	Loss allowance for lifetime expected credit losses
	$ 120,905 9,040 83 283 2,555	1～2％ 2～5％ 10～20％ 50％ 100％	$ 2,006 204 16 142 2,555
	$ 132,866		$ 4,923

(3) Movements of the loss allowance of notes and accounts receivable were as

follow:

follow:
Balance, beginning of year Expected credit impairment loss (gain) Amount written off Balance, end of year 10.Inventories Raw materials Work-in-process Finished goods Total	2020 $ 4,923 285 (2,396) $ 2,812 Dec. 31, 2020 $ 90,340 19,727 109,379 $ 219,446	2019
		$ 6,479 (1,556) －
		$ 4,923
		Dec. 31, 2019
		$ 114,085 21,345 121,817
		$ 257,247

Thecost of sales related to inventory is as follows:

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Cost of inventories sold Unamortized fixed manufacturing costs Provision for (Reversal of) loss on inventories Total	2020 $ 684,142 10,756 (2,268) $ 692,630	2019
		$ 871,139 10,617 40,270
		$ 922,026

Rreversal of loss on inventories is due to the removal part of the inventory that has been listed for decline in price.

11. Real estate for sale and real estate under construction/Contract liabilities

11. Real estate for sa	le and real estate under c	le and real estate under c	onstruction/Contract liabilities	onstruction/Contract liabilities	onstruction/Contract liabilities
Bridge Upto Zenith Project at Banqiao－Real estate for sale Modesty HomeProject at Banqiao－Real estate for sale Legend River Project at Xindian－Real estate for sale Treasure Garden Project inTaichung City－Real estate for sale 55 TIMELESS Project in Taipei City－Real estate for sale La Bella Vita Project in Taichung City－Real estate for sale La Bella Vita Project in Taichung City－Real estate under construction	Real estate for sale and real estate under construction		Contract liabilities
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Jan. 1, 2019
	$ 124,802 14,923 169,027 241,545 1,218,354 1,162,965 －	$ 225,599 14,923 227,243 241,545 1,635,694 － 1,960,691	$ － － － － 162,233 34,926 －	$ 47,251 － － － 123,136 － 225,311	$ － － － － 296,810 － 160,145
	$ 2,931,616	$ 4,305,695	$ 197,159	$ 395,698	$ 456,955

(1) The situation of already providing to serve as loan guarantees from financial

industries in detail is shown in Note 33.

(2) The detail of Information on interest capitalization refers to Note 25.

1. Other financial assets

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Pledged time deposits Pre-sale housing project trust funds Time deposits with maturity over three months Total Current Non-current Interest rate range %	Dec. 31, 2020 $ 20,000 － 115,653 $ 135,653 $ 115,653 $ 20,000 0.2～2.5	Dec. 31, 2019
		$ 20,000 165,214 －
		$ 185,214
		$ 165,214
		$ 20,000
		0.25～1.12

The pledged time deposit serves as guaranty for logistics business and it is shown in Note 33.

13. Investments accounted for using equity method

The investment of associates is listed as follows:

Name of Investee	Book	value	The percentage of ownership interest and voting right directly held by the Company	The percentage of ownership interest and voting right directly held by the Company
	Dec. 31, 2020	Dec. 31, 2019 $ 38,843 32,009 6,712 $ 77,564	Dec. 31, 2020	Dec. 31, 2019
Unlisted (OTC) companies Formosan Construction Corp. (Taiwan) Fenghe Development Co., Ltd. (Taiwan) Rueifu Development Co., Ltd. (Taiwan) Total	$ 62,048 31,655 8,263		26.20 39.90 48.26	26.20 39.90 48.26
	$ 101,966

Information about associates that are not individually material was as follows

The Company’s share of: Net profit (loss) from continuing operations for the year Other comprehensive income Total comprehensive profit (loss)	2020 $ 3,082 21,320 $ 24,402	2019
		$ 7,276 10,074
		$ 17,350

The investment gains and losses and other comprehensive income for the associates under the equity method have been recognized according to their audited financials.

1. Property, plant and equipment

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Item		For the Year Ended December 31,2020	For the Year Ended December 31,2020	For the Year Ended December 31,2020
	Balance, Beginning of Year	Additions	Disposals	Reclassificatio n	Balance, End of Year
	$ 444,026 696,889 966,896 19,220 232,306	$ － － 3,684 100 4,334	$ － (120,524) (180,207) (5,461) (83,754)	$ － 2,853 － － －	$ 444,026 579,218 790,373 13,859 152,886
	2,359,337	8,118	(389,946)	2,853	1,980,362
		14,092 20,419 214 16,539	(120,524) (180,207) (5,461) (83,754)	2,853 － － －	359,975 658,828 13,352 99,768
Building Machinery equipment Transportation equipment Other equipment Total Net Item
	1,467,752	$ 51,264	$ (389,946)	$ 2,853	1,131,923
	$ 891,585				$ 848,439
	Balance, Beginning of Year	Additions	Disposals	Reclassificatio n	Balance, End of Year
	$ 444,026 696,889 1,045,781 22,317 226,097	$ － － 3,001 － 8,752	$ － － (81,886) (3,097) (2,543)	$ － － － － －	$ 444,026 696,889 966,896 19,220 232,306
	2,435,110	11,753	(87,526)	－	2,359,337
		16,827 24,662 549 20,035	－ (81,730) (2,954) (2,543)	－ － － －	463,554 818,616 18,599 166,983
Building Machinery equipment Transportation equipment Other equipment Total Net
	1,492,906	$ 62,073	$ (87,227)	$ －	1,467,752
	$ 942,204				$ 891,585

(1) The book values of land are adjusted with basis on the government published

land value of 1975, 1979, 1980 and 1981 as well as current governmentdeclared land value of 1992 and 2000; plant buildings and various equipments are re-evaluated in accordance with the commodity price indices in 1973 and 1980. Besides, the original revaluation increments are adjusted in relation to the tax rates of land value increment in compliance with land tax laws in January 2005.

(2) The situation of pledge & guarantee in detail is shown in Note 33.

1. Lease

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(1) Right-of-use assets

ight-of-use assets
Cost Building Transportation equipment Total Accumulated depreciation & impairment Building Transportation equipment Total Net Cost Building Transportation equipment Total Accumulated depreciation & impairment Building Transportation equipment Total Net		For the Year Ended	December 31, 2020
	Balance, Beginning of Year	Additions	Disposals	Balance, End of Year
	$ 51,552 1,599	$ － －	$ － (1,599)	$ 51,552 －
	53,151	－	(1,599)	51,552
	5,155 1,279	5,155 320	－ (1,599)	10,310 －
	$ 6,434	$ 5,475	$ (1,599)	$ 10,310
	$ 46,717	For the Year Ended	December 31, 2019	$ 41,242
	Balance, Beginning of Year	Additions	Disposals	Balance, End of Year
	$ 51,552 1,599	$ － －	$ － －	$ 51,552 1,599
	53,151	－	－	53,151
	－ －	5,155 1,279	－ －	5,155 1,279
	$ －	$ 6,434	$ －	$ 6,434
	$ 53,151			$ 46,717

(2) Lease liabilities

For the Year Ended December 31, 2020

Less 1 year Over 1 years Total	Future minimum lease payments	Interest	Present value of minimum lease payments
	$ 5,440 38,077	$ 426 1,403	$ 5,014 36,674
	$ 43,517	$ 1,829	$ 41,688

Range of discount rate for lease liabilities were as 1.09 ％ .

For the Year Ended December 31, 2019

Future minimum Interest Present value of

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Less 1 year Over 1 years Total	lease payments	$ 481 1,829 $ 2,310	minimum lease payments
	$ 5,762 43,517		$ 5,281 41,688
	$ 49,279		$ 46,969

Range of discount rate for lease liabilities were as 1.09 ％ .

(3) Other lease information

Other lease information
Expenses relating to short-term leases Total cash (outflow) for all lease agreements	2020 $ 136 $ (5,417)	2019
		$ 156
		$ (6,338)

(4)Please see note 32 for the status of transactions with related parties.

16. Investment property, net

Item		For	the Year Ended	December 31,2020	December 31,2020
	Balance, Beginning of Year	Additions	Disposals	Impairment	Reclassificati on	Balance, End of Year
	$ 1,091,843 2,654,296	$ 8,608 1,876	$ (1,589) －	$ － －	$ － (2,853)	$ 1,098,862 2,653,319
	3,746,139	10,484	(1,589)	－	(2,853)	3,752,181
Land Building Total Net Fair value	224,160 758,679		－ －	3,477 －	－ (2,853)	227,637 810,967
	982,839	$ 55,141	$ －	$ 3,477	$ (2,853)	1,038,604
	$ 2,763,300					$ 2,713,577
	$ 4,292,326					$ 4,133,740

Item		For the Year Ended December 31,2019	For the Year Ended December 31,2019	For the Year Ended December 31,2019
	Balance, Beginning of Year	Additions	Disposals	Impairment	Balance, End of Year
	$ 1,156,155 2,654,296	$ － －	$ (312) －	$ － －	$ 1,155,843 2,654,296
	3,810,451	－	(312)	－	3,810,139
		－ 55,141	－ －	1,494 －	286,928 758,679
Land Building Total Net Fair value	285,434 703,538
	988,972	$ 55,141	$ －	$ 1,494	1,045,607
	$ 2,821,479				$ 2,764,532
	$ 4,131,617				$ 4,293,558

(1) Details of land:

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Dec. 31, 2020 Dec. 31, 2019

Oiashui Section, Longtan Dahu Section, Miaoli Nankan Section, Taoyuan Xinban Section, Banqiao Puli Section, Nantou Zhuangjing Section, Xindian Total	Ping	Cost	Ping	Cost
	14,447 230,253 14,696 140 － 53	$ 42,643 473,971 265,779 311,775 － 4,694	14,381 230,253 15,395 140 4,108 53	$ 34,036 473,971 267,367 311,775 64,000 4,694
		$ 1,098,862		$ 1,155,843

• (2) The Company leases the real estate held for investment, with the lease period as January 1, 2008 to December 31, 2028. Provisions for the lessee to adjust the rent based on market rents when exercising the renewal rights. The lessee does not have a preferential purchase right for the real property at the end of the lease term.

The maturity analysis of lease payments receivable under operating leases of investment properties as of was as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Over 5 years Total	Dec. 31, 2020 $ 175,060 85,008 65,813 40,864 22,531 24,027 $ 413,303	Dec. 31, 2019
		$ 163,557 102,450 53,952 46,563 23,074 37,037
		$ 426,633

(3) As of December 31, 2020 and December 31, 2019, the book value of the

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investment properties let out stood at NT$2,409,818 thousand and NT$2,463,083 thousand , respectively. The rent incomes during 2020 and 2019 totaled NT$189,786 thousand and NT$183,400 thousand, respectively.

• (4) The fair value of investment properties is based on the transaction prices of adjacent assets, the economic environment and changes in the current land values published by the Taiwanese government. The assessment is based on market comparators and discounted cash flows. It is Level 3 fair value according to IFRS.

• (5) As of December 31, 2020 and 2019, the land at Dahu Section of Miaoli and Puli Section of Nantou accumulated losses of reduction were NT$227,637 thousand and NT$286,928 thousand respectively.

• (6) Details of the farm land lots registered in others’ names due to legal

• restrictions:

restrictions:
Oiashui Section, Longtan Dahu Section, Miaoli Nankan Section, Taoyuan Total	Dec. 31, 2020 $ 35,100 94,241 17,631 $ 146,972	Dec. 31, 2019
		$ 26,493 94,241 19,219
		$ 139,953

For the security measures of the aforementioned pieces of farm land, the Company has already periodically checked relevant land transcripts and dispatched its personnel to conduct investigation at any time in order to keep abreast of the use of the land. Part of the land has been pledged to the Company. Please see note 32 (2) D for the status of transactions with related parties.

• (7) The situation of already providing to serve as loan guarantees from financial industries in detail is shown in Note 33.

• Short-term borrowings

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Bank unsecured borrowings Bank secured borrowings - Hua Nan Bank Total Interest rate range %	Dec. 31, 2020 $ 350,000 － $ 350,000 0.72～1.00	Dec. 31, 2019
		$ 860,000 －
		$ 860,000
		0.91～1.15

(1) Concerning the residential building at Xitun District, Taichung City constructed jointly by the Company and Continental Engineering Corporation, a credit contract was signed with Huanan Commercial Bank on December 9, 2014, by providing the land of Huiguo Section, Taichung City to serve as guarantee, with total credit amount as NT$950,000thousand and the borrowing has been totally cleared in advance in November, 2019.

• (2) The situation of pledge & guarantee in detail is shown in Note 33.

18. Short-term notes and bills payable

Short-term notes and bills payable
Commercial paper payable Less: Unamortized discount Net amount Interest rate range%	Dec. 31, 2020 $ 10,000 (8) $ 9,992 0.36	Dec. 31, 2019
		$ 400,000 (452)
		$ 399,548
		0.63～0.94

The situation of pledge & guarantee in detail is shown in Note 33.

19. Employee pensions

(1) Defined contribution plans

The employee retirement plan established by the Company in accordance with “Labor Pension Act” belongs to a defined contribution plans. Concerning the above, the Company would contribute 6% of the monthly salaries of employees to the exclusive individual accounts of Labor Insurance Bureau. In accordance with the above related regulations, the pension costs recognized as expenses in the consolidated comprehensive income statement in 2020 and January 1 to December 31, 2019 are respectively NT$6,188 thousand and NT$6,399 thousand.

(2) Defined benefit plans

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• A. The employee retirement plan established by the Company in accordance with “Labor Standard Act” is a defined benefit plans. In accordance with the regulations of the said plan, the employee pensions are calculated by service years and the average wage of six months prior to retirement. For the above, the Company would contribute 2% of the total employee salaries as employee pension fund, to the Supervisory Committee of Workers’ Pension Preparation Fund to be deposited into an exclusive account of Bank of Taiwan. Before the end of year, if it is estimated the balance in the exclusive account is insufficient to pay the estimated labors conforming to retirement conditions in the following year, the Company would contribute the differential amount at once before the end of March in the following year.

The retired pension cost amount in consolidated comprehensive income statement listed to expense related to defined benefit plan is as follows:

Service cost Net interest cost (income) List to (profit) loss Re-measurements Plan assets returns (excl. amount that covered in net interest income) Actuarial profit (loss)-Change of the demographic assumption Actuarial profit (loss)-Change of the financial assumption Actuarial profit (loss)- Adjustment with experience Listed to other comprehensive income	2020 $ － 27 $ 27 81 1 (268) 654 $ 468	2019
		$ 64 66
		$ 130
		156 2 (192) 2,576
		$ 2,542

The details of the various costs and expenses recognized in profit or loss are

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as follows:

as follows:
Operating costs Operating expenses Total	2020 $ 27 －	2019
		$ 130 －
	$ 27	$ 130

The amount listed in the consolidated balance sheet for the obligation occurring from the defined benefit plan is as follows

Defined benefit obligation present value Plan asset fair value Net defined benefit liability (assets)	Dec. 31, 2020 $ 5,866 (2,796) $ 3,070	Dec. 31, 2019
		$ 6,206 (2,518)
		$ 3,688

The changed of defined benefit obligation present value of this Company is as follows:

as follows:
2020 Beginning defined benefit obligation $ 6,206 Service cost current period － Interest expense 47 Benefits paid from plan assets － Re-measurements Actuarial (profit) loss- Change of the demographic assumption (1) Actuarial (profit) loss- Change of the financial assumption 268 Actuarial (profit) loss- Adjustment with experience (654) Ending defined benefit obligation $ 5,866	2019
	$ 10,248 64 102 (1,822) (2) 192 (2,576)
	$ 6,206

The changed of plan asset fair value of this Company is as follows:

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Beginning plan asset fair value Interest income Re-measurements Plan assets returns (excl. amount that covered in net interest income) Contribution by employer Redemption or curtailments payment Ending plan asset fair value	2020 $ 2,518 20 81 177 － $ 2,796	2019
		$ 3,520 36 156 628 (1,822)
		$ 2,518

The assets of defined benefits held by our company are deposited in financial institutions and invested in equity securities in Taiwan and overseas within the percentages and absolute amounts stipulated by the Bank of Taiwan for the discretionary investment of the funds for specific years. The operation of the funds is under the oversight by the Labor Pension fund Supervisory Committee. The minimum yields on the funds p.a. shall not fall below the two-year time deposit rates offered by local banks. Any insufficiency shall be made up by the national treasury following the approval from competent authorities.

Classification of Fair Values for Planned Assets

		2020	2019
Cash and cash equivalents	$	2,796	$ 2,518
The main assumptions of the	Company’s actuarial valuation are as follows:
		Dec. 31, 2020	Dec. 31, 2019
Discount rate		0.35％	0.75％
Expected increase in future salaries		2.00％	2.00％

B. The main assumptions of the Company’s actuarial valuation are as follows:

The Company is exposed to the following risks due to the pension system

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stipulated by the Labor Standards Act:

• a. The impact of the book value of the retirement pensions is as follows for any delta of each 0.25 basis points between the discount rate (or the expected increase in future salaries) and management estimates in 2020

and 2019.

Effect on present value of defined benefit obligation

Dec. 31, 2020 Discount rate Expected increase in future salaries	Actuarial assumption increased 0.25％ $ (170) $ 173	Actuarial assumption decreased 0.25％
		$ 177
		$ (168)

Dec. 31, 2019 Discount rate Expected increase in future salaries	Effect on present value of defined benefit obligation	Effect on present value of defined benefit obligation
	Actuarial assumption increased 0.25％ $ (192) $ 197	Actuarial assumption decreased 0.25％
		$ 200
		$ (190)

Since actuarial assumptions may be mutually related, the possibility of change in an only one assumption is not high. Therefore, the above sensitivity analysis may be unable to reflect the actual change situation of the current value of defined benefits. Besides, in the above sensitivity analysis, the actuary of current value of defined benefits obligations at the end of the reporting period applies projected unit credit method, measured by the same basis of defined benefits liabilities listed in the consolidated balance sheet.

b. The Company expects to contribute the amount of NT$146 thousand to the defined benefit plans within one year after December 31, 2020; the weighted average duration of defined benefits obligations is 11 years.

1. Equity

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(1) Share capital - common stock

Share capital - common stock
Authorized capital Issued capital	Dec. 31, 2020 $ 6,800,000 $ 3,423,260	Dec. 31, 2019
		$ 6,800,000
		$ 3,500,000

The face value of the issued ordinary shares is NT$10 per share. Each share has one vote and the right to dividends.

Treasury stocks of NT$76,740 thousand and NT$200,000 thousand were cancelled from January 1 to December 31, 2020 and 2019, respectively.

(2) Capital surplus

Capital surplus
Premium on capital Conversion premium of corporate bonds Gains of disposal of assets Equity net value change of associates by equity method Total	Dec. 31, 2020 $ 727 450,718 1,238 3,658 $ 456,341	Dec. 31, 2019
		$ 743 460,824 1,238 3,658
		$ 466,463

In accordance with regulations in laws, the capital surplus shall not be used except for covering company losses, but concerning the overage obtained from issued stock over par value (including issuance of common stock above par value, the premium on capital stock of stock issued for merge, corporate bond conversion premium and treasury stocks transaction, etc.) and capital surplus generated from income of receiving gifts. In the absence of accumulated losses, the Company may issue cash dividends or bonus shares to existing shareholders on a pro rata basis. Per the requirements of the Securities and Exchange Act, the appropriation of capital surplus to share capital is limited to 10% of the paid-in capital.

(3) Retained earnings

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• A.In accordance with the Company’s Articles of Incorporation,any earnings during the year should be used to pay all the due taxes and make up the prior losses before distributions as follows:

• a. Provide 10% legal reserve, but it is not applicable to the case where the legal reserve already attains the total capital amount.

• b. If necessary, in accordance with regulations of laws, allowance or reversal of special reserve shall be provided.

• c. The earnings during the year available for distributions, along with the undistributed earnings from previous years, shall be distributed according to the proposal from the board. The distribution to shareholders shall be no less than 5% of the distributable accumulated earnings and shall be approved by the shareholders’ meetings.

The enterprise life cycle of FRG belongs to “maturity period”. However, in order to pursue business sustainable development, respond to the future market demands and consider the future capital expenditure budget of the Company as well as maintenance stable dividend allocation, in which cash dividend shall be no lower than 10% of the total amount of shareholders’ dividend. But in case of fund requirements concerning any major investment plan, major operation change matters and productivity expansion or other major capital expenditures, etc., the board may propose it to be changed to distribution in stock dividend form in whole, and actions may be taken after a report to and consent from the shareholders’ meeting

• B. Legal reserve

Per the regulations set forth by the Company Act, the Company shall appropriate 10% of after-tax earnings as the legal reserve, until the amount of legal reserve is equivalent to that of paid-in capital, or use the earnings to reverse prior losses. In the absence of losses, the portion of reserves exceeding 25% of the paid-in capital can be used to issue cash dividends or bonus shares.

C. Special reserve

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The number of appropriation arising from the first adoption of IFRSs Decrease in other equity items Total	Dec. 31, 2020 $ 304,771 － $ 304,771	Dec. 31, 2019
		$ 314,027 44,610
		$ 358,637

Official Letter “Securities Issue” No. 1010012865 and No. 1010047490 released by the Financial Supervisory Commission and the IFRS standards provide answers to the questions regarding the appropriation, utilization and reversal of special reserve. If there is any reversal of the reduction of shareholders’ equity, the reserved portion may be used for earnings distributions.

• D. FRG’s earnings distributions for 2019 and 2018 were approved by the annual general meetings on June 12, 2020 and June 5, 2019, respectively, as proposed by the board. However, the payout ratio has changed due to the cancelation of 7,674 thousand and 20,000 thousand treasury stocks, respectively. The cash dividend per share for 2019 and 2018 was NT$0.8 and NT$0.68, respectively.

Legal reserve Cash dividend Total	2019	2019	2018	2018
	Amount	Dividend per share (TWD) $ 0.8	Amount	Dividend per share (TWD)
	$ 53,895 280,000		$ 21,581 238,000	$ 0.68
	$ 333,895		$ 259,581

• E. The status for the board of the Company proposed to approve the 2020 earnings allocation proposal on March 19, 2021 is as follows:

2019

		Amount	Dividend per share (TWD)	Dividend per share (TWD)
Legal reserve	$	86,173
Cash dividend		513,489	$	1.5
Total	$	599,662

The Company’s earnings distribution for 2020 is still pending for the approval from the annual general meeting in 2021.

• (4) Other equity interest-

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Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance on Jan. 1, 2020 $ (7,448) $ 174,790 Exchange differences on translation of foreign financial statements (19,210) － Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income － (117,884) Share of loss (profit) of associates accounted for using equity method － 21,320 Disposal of financial assets at fair value through other comprehensive income - equity instrument － 5,785 Balance on Dec. 31, 2020 $ (26,658) $ 84,011 Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance on Jan. 1, 2019 $ 1,392 $ (46,003) Exchange differences on translation of foreign financial statements (8,840) － Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income － 180,799 Share of loss (profit) of associates accounted for using equity method － 10,074 Disposal of financial assets at fair value through other comprehensive income - equity instrument － 29,920 Balance on Dec. 31, 2019 $ (7,448) $ 174,790 (5) Treasury stocks Number of shares (thousand shares) Balance on Jan. 1, 2019 17,548 $ Acquired in this period 2,452 Cancellation in this period (20,000) Balance of Dec. 31, 2019 － Acquired in this period 7,674 Cancellation in this period (7,674) Balance of Dec. 31, 2020 － $	Exchange differences on translation of foreign financial statements	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total
	$ (7,448) (19,210) － － －		$ 174,790 － (117,884) 21,320 5,785		$ 167,342 (19,210) (117,884) 21,320 5,785
	$ (26,658)		$ 84,011		$ 57,353
	Exchange differences on translation of foreign financial statements		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income		Total
	$ 1,392 (8,840) － － －		$ (46,003) － 180,799 10,074 29,920		$ (44,611) (8,840) 180,799 10,074 29,920
	$ (7,448)		$ 174,790		$ 167,342
		Number of shares (thousand shares) 17,548 2,452 (20,000) － 7,674 (7,674) －			Amount
				$	261,373 38,317 (299,690)
					－
					129,618 (129,618)
				$	－

A. FRG in accordance with the regulations of Article 28-2 of Securities

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Exchange Act, in order to maintain company credit and shareholders’ equity, purchased back treasury stocks through resolutions of the board.

• B. The quantity percentage of a company in purchase back outstanding shares in accordance with the regulations of Securities Exchange Act shall not exceed 10% of the total number of shares issued by a company, and the total amount of purchase shares shall not exceed the retained earnings adding the premium of issued shares and the amount of realized capital surplus.

• C. The treasury stocks held by FRG in accordance with the regulations of Securities Exchange Act shall not be pledged, nor shall it enjoy such rights as dividend allocation and voting right, etc.

(6)Non-controlling interests

	(6)Non-controlling interests
21.	Balance, beginning of year Net income Increase (decrease) in this period Balance of Dec. 31 Operating revenue Net sales revenue Construction revenue Rental and logistics revenue Total	2020 $ (1,017) － 1,017 $ － 2020 $ 844,836 2,206,748 230,671 $ 3,282,255	2019
			$ (1,010) (7) －
			$ (1,017)
			2019
			$ 960,898 1,518,732 222,147
			$ 2,701,777

The amount of revenue recognized at the beginning from the contractual liabilities

for the period from January 1 to December 31, 2020 and 2019 arerespectively NT$384,715 thousand and NT$296,810 thousand.

22. Operating costs

Operating costs
Cost of sales Cost of construction sales Cost of rental and logistics Total	2020 $ 692,630 1,430,062 97,276 $ 2,219,968	2019
		$ 922,026 1,026,264 91,799
		$ 2,040,089

23. Other income

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24. 25.	Dividend income Gain on disposal of investments Other Total Other gains and losses Loss (gain) on disposal of property, plant and equipment Loss (gain) on disposal of investment properties Loss (gain) on disposal of investments Foreign currency exchange gain (loss) Net (gain) loss on financial assets and liabilities at fair value through profit or loss Miscellaneous expense Impairment loss Total Finance costs Interest of bank loan Interest of lease liabilities Less: capitalized interest Total Interest rate (%) of capitalized interest	2020	2019
		$ 149,075 4,069 5,519	$ 146,399 － 8,215
		$ 158,663	$ 154,614
		2020	2019
		$ － (1,589) － (40,142) 1,870 (898) (3,477)	$ 388 696 (29,998) (2,641) 1,240 (2,481) (1,494)
		$ (44,236)	$ (34,290)
		2020	2019
		$ 7,746 481 －	$ 23,026 544 (3,940)
		$ 8,227	$ 19,630
		－	2.07

26. Extra information on the items with the expense characteristics

The employee benefits, depreciation, depletion and amortization expenses incurred

in this period are summarized below:

Salary expense Labor and health insurance expenses Pension expense Other Personnel expense Personnel expense Depreciation expense		2020			2019
	Operating costs	Operating expense	Total	Operating costs $ 92,622 7,048 4,440 2,649 $ 106,759 $ 102,837	Operating expense	Total
	$ 90,220 6,568 4,155 3,006	$ 77,820 4,234 2,060 1,560	$ 168,040 10,802 6,215 4,566		$ 70,273 4,234 2,089 1,329	$ 162,895 11,282 6,529 3,978
	$ 103,949	$ 85,674	$ 189,623		$ 77,925	$ 184,684
	$ 94,302	$ 17,578	$ 111,880		$ 20,811	$ 123,648

The compensations to employees and the remunerations to directors and

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supervisors determined by the board on March 19, 2021 for the year 2020 and on March 20, 2020 for the year 2019 are as follows:

Compensations to employees Remunerations to directors and supervisors	2020	2020	2019	2019
	Amount	Estimated proportion	Amount	Estimated proportion
	$ 9,491 9,491	1％ 1％	$ 5,613 5,613	1％ 1％

FRG shall allocate from annual profits no less than 1% for compensations to employees and no more than 2% for remunerations to directors and supervisors. However, annual profits should be prioritized for the reversal of cumulated losses if any.

The abovementioned compensations to employees may be paid with cash or shares. The employees include the employees of subsidiaries which meet the criteria set by the board. However, the remunerations to directors and supervisors shall be paid in cash only.

Any changes to the published consolidated financial statements shall be treated as changes to accounting estimates and adjusted during the following year. There was no difference between the distributed amount of compensations to employees and remunerations to directors and supervisors for 2019 and the recognized amount on the consolidated financial statements for 2019.

The annual general meeting of FRG on May 10, 2019 approved the distributions of bonuses to employees at NT$2,661 thousand and the remunerations to directors and supervisors at NT$2,661 thousand for 2018. There was no difference between the distributed amount and the recognized amount on the consolidated financial statements for 2018.

Please refer to the details published on TSE Market Observation Post System for the information regarding the decisions by the board and annual general meetings on compensations to employees and remunerations to directors and supervisors.

1. Income tax

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(1) Income tax recognized in profit & loss

The income tax expense listed as profit & loss is composed of as follows:

Income tax current period: Occurred in current year Additionally imposed undistributed earnings Paid for land value increment tax Deferred income tax: Occurred in current year Income tax expense listed as profit & loss The accounting benefit and income as follows: Income tax calculated according to the regulated tax rate of before- tax net income The effect of tax in reconciliation items of income tax: When determining taxable income, adjustments should be made to increase (decrease) Exemption of domestic securities transaction income Tax-exempt income Previous years adjustments Income tax expense (gain) current period	2020 2019 $ (49) $ 1,240 (11,367) － (29,274) (31,289) (40,690) (30,049) 12,272 16,312 $ (28,418) $ (13,737) tax expense of current period are adjusted 2020 2019 $ 193,367 $ 115,753 (11,896) (10,736) 798 303 (182,220) (105,294) － (1,266) $ 49 $ (1,240)	2019
		$ 1,240 － (31,289)
		(30,049) 16,312
		$ (13,737)
		$ 115,753 (10,736) 303 (105,294) (1,266)
		$ (1,240)

The accounting benefit and income tax expense of current period are adjusted as follows:

(2) Income tax expense recognized in other comprehensive income

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Remeasurement of defined benefit plans Unrealized loss on valuation of investments in equity instruments measured at fair value through other comprehensive income Exchange differences on translation of foreign financial statements Unrealized loss on valuation of investments in debt instruments measured at fair value through other comprehensive income Income tax related to other comprehensive income	2020 $ (1,172) (671) 4,803 200 $ 3,160	2019
		$ (508) 51 2,210 (3,914)
		$ (2,161)

(3) Deferred tax assets and liabilities

The analysis on deferred income tax assets and liabilities in balance sheet is as follows:

follows:
Net defined benefit liability Unrealized loss on valuation of investments in equity instruments measured at fair value through other comprehensive income Exchange differences on translation of foreign financial statements Unrealized loss on valuation of investments in debt instruments measured at fair value through other comprehensive income Unrealized exchange loss Other Tax loss carry forwards Investment credits Deferred income tax assets Net defined benefit liability Unrealized loss on valuation of investments in equity instruments measured at fair value through profit or loss Other Land value increment tax Deferred income tax (liabilities)		2020
	Balance, beginning of year	Recognized in profit (loss)	Recognized in other comprehensive income	Balance, end of year
	$ 3,145 267 1,862 － 4,002 12,699 12,115 －	$ － － － － (2,181) 16,057 3,851 994	$ (1,172) (267) 4,803 200 － － － －	$ 1,973 － 6,665 200 1,821 28,756 15,966 994
	$ 34,090	$ 18,721	$ 3,564	$ 56,375
	(98) － － (166,357)	(1,261) － (5,188) －	－ (404) － －	(1,359) (404) (5,188) (166,357)
	$(166,455)	$ (6,449)	$ (404)	$(173,308)

2019

Balance, Recognized in Recognized in Balance,

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Net defined benefit liability Unrealized loss on valuation of investments in equity instruments measured at fair value through other comprehensive income Exchange differences on translation of foreign financial statements Unrealized loss on valuation of investments in debt instruments measured at fair value through other comprehensive income Unrealized exchange loss Other Tax loss carry forwards Deferred income tax assets Net defined benefit liability Unrealized loss on valuation of investments in equity instruments measured at fair value through profit or loss Exchange differences on translation of foreign financial statements Land value increment tax Deferred income tax (liabilities)	beginning of year	profit (loss)	other comprehensive income	end of year
	$ 3,653 216 － 3,914 8,008 4,839 2,659	$ － － － － (4,006) 7,860 9,456	$ (508) 51 1,862 (3,914) － － －	$ 3,145 267 1,862 － 4,002 12,699 12,115
	$ 23,289	$ 13,310	$ (2,509)	$ 34,090
	(3,045) (55) (348) (166,357)	2,947 55 － －	－ － 348 －	(98) － － (166,357)
	$(169,805)	$ 3,002	$ 348	$(166,455)

(4)Information on Unused Loss Carryforwards

Loss carryforwards as at December 31, 2020 are as follows:

Loss carryforwards	Balance of unused loss carryforwards $ 15,966	Final deductible year 2029

• (5) The year of the company’sincome tax settlement application cases approved by

thecompetent authority are as follows:

Except for 2017, FRG has been approved to 2018.

Ban Chien company has been approved to 2018.

28. EPS

(1) Basic earnings per share

Basic earnings per share
Net income for the period attributable to owners of the Corporation Weighted average number of ordinary shares (in thousand shares) Basic EPS (NT dollars)	2020 $ 901,716 344,377 $ 2.62	2019
		$ 538,957
		350,000
		$ 1.54

(2) Diluted earnings per share

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Net income for the period attributable to owners of the Corporation Weighted average number of ordinary shares (in thousand shares) Potentially ordinary stock- Employee bonus (in thousand shares) Number of shares of diluted EPS (in thousand shares) Diluted EPS (NT dollars)	2020 $ 901,716 344,377 488 344,865 $ 2.61	2019
		$ 538,957
		350,000 336
		350,336
		$ 1.54

If the Company can choose to distribute stocks or cash as the bonus for the employees, when calculating the earnings per share, the distribution of shares to the employees should be taken into consideration. In addition, the potential common shares which will dilute the earnings should be added into the weighted average number to calculate the diluted earnings per share. The distributed number of shares is estimated by the closing price of the common shares at the end of the reporting period (the effect of exclude right and exclude dividends is considered). The dilutive effect of the potential shares distributed to the employees will be taken into consideration when calculating the diluted EPS before the resolution concerning the number of shares to be delivered as bonus for employees is made in the shareholder meeting the following year.

29.Disposal of Subsidiary

Da-Guan Recreation Company passed the dissolution and liquidation at the temporary shareholders meeting on October 22, 2020, and FRG lost control of DaGuan Recreation Company.

(1)Analysis of assets and liabilities for loss of control

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Non-current assets Investment property Current liabilities Other payables Net assets disposed of Gain on disposal of subsidiary Fair value of remaining investments at the date of loss of control Net assets disposed of Non-controlling interests at the date of loss of control Gain on disposal	Oct. 22,2020
	$ 1,232 (6,318)
	$ (5,086)
	2020
	$ － 5,086 (1,017)
	$ 4,069

(2) Gain on disposal of subsidiary

30. Capital Management

The enterprise life cycle of the Company belongs to “maturity period”. However, in order to pursue business sustainable development, respond to the future market demands and consider the future capital expenditure budget of the Company as well as maintenance stable dividend allocation, on the whole, the Company applies a prudent risk management policy.

31. Financial instruments

(1) The types of financial instruments

The types of financial instruments
Financial assets Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Amortized cost Cash and cash equivalents Trade receivables Other financial assets Refundable deposits Total Financial liabilities Amortized cost Short-term loans Short-term bills payable Trade payables Guarantee deposits received Total	Dec. 31,2020 $ 72,280 3,442,575 1,371,090 246,283 135,653 2,291 $ 5,270,172 $ 350,000 9,992 228,586 43,463 $ 631,041	Dec. 31,2019
		$ － 3,273,462 956,286 128,987 185,214 8,322
		$ 4,552,271
		$ 860,000 399,548 241,681 42,401
		$ 1,543,630

(2) Fair values of financial instruments

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• A. Financial instruments not measured with the fair value

• The financial assets and financial liabilities not measured by fair values of this company include cash and equivalent cash, accounts receivable, other financial assets, short-term loan, short-term bonds payable and accounts payable. The maturity dates of this kind of financial products are rather short that their book values should belong to a reasonable foundation of estimating fair values. The above financial products shall not include refundable deposits and deposit received either, because their repayment dates are uncertain; therefore, their fair values are evaluated by the book values in balance sheets.

• B. Fair value measurement of recognitions in balance sheet

The following table provides related analysis of financial instruments measured by fair values after original recognition, and the observable levels of fair values are divided into the first to the third level.

• a. The first-level fair value measurement refers to an open offer of the same asset or liability from an active market (without being adjusted).

• b. The second-level fair value measurement refers to a derived fair value of an observable input value belong to the said asset or liability either directly (i.e., price) or indirectly (i.e., to be derived from price) in addition to a first-level open offer.

• c. The third-level fair value measurement refers to a derived fair value of an input value of asset or liability not based on observable market data (nonobservable input value) as the evaluation technique.

• C.Concerning the financial instruments measured by fair values, the basic classification analysis of the Company in accordance with the nature, characteristics and risk as well as fair value level of asset and liability shall be as follows:

• a. The financial asset and liability measured by fair value on repeatable

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foundation:

oundation:
Financial assets at fair value through profit or loss Fund Financial assets at fair value through other comprehensive income Stock of Listed (OTC) companies Stock of emerging companies Stock not classified to listed (OTC) and emerging companies Financial bond Stock of foreign companies Total Financial assets at fair value through other comprehensive income Stock of Listed (OTC) companies Stock of emerging companies Stock not classified to listed (OTC) and emerging companies Stock of foreign companies Total		Dec. 31,2020
	Level 1	Level 2	Level 3	Total
	$72,280	$ －	$ －	$72,280
	$ 2,855,344 － － 64,461 －	$ － 6,887 － － －	$ － － 92,112 － 423,771	$ 2,855,344 6,887 92,112 64,461 423,771
	$ 2,919,805	$ 6,887	$ 515,883	$ 3,442,575
	Level 1	Level 2	Level 3	Total
	$ 2,715,634 － － －	$ － 3,736 － －	$ － － 106,055 448,037	$ 2,715,634 3,736 106,055 448,037
	$ 2,715,634	$ 3,736	$ 554,092	$ 3,273,462

b. The financial asset and liability measured by fair value on non-repeatable

foundation: none

• D. The first-level fair value measurement item applies a market offer as the fair

value input value, with breakdown as follows:

Item Stock of Listed (OTC) companies Fund and Financial bond	Market quoted
	Close price The net assets

E. The second-level fair value measurement item applies the observable input

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values of recent transaction price and offer data of GreTai Securities Market, to serve as the foundation of evaluating fair values.

• F. There was no change between Level 1 and Level 2 fair value measurements in 2020 and 2019.

• G. Adjustment of financial assets with the third-level fair value measurement:

Beginning balance Purchases Capital return due to disinvestment Listed to other comprehensive income of this year Ending balance	2020 $ 554,092 1,846 (4,500) (35,555) $ 515,883	2019
		$ 361,924 227,052 (8,000) (26,884)
		$ 554,092

H. Level 3 fair value measurement is based on net asset values. The Company takes great caution in the selection of valuation models and valuation parameters for the key, non-observable values. Therefore, the measurement of fair values should be reasonable. The use of different valuation models or valuation parameters may result in different numbers. For example, If the evaluation parameter's share price net multiplier increases, the market liquidity discount decreases, and the weighted average capital cost discount rate decreases, the fair value of the investment will be increased.

(3) Objective of financial risk management

The financial risk management of the Company is to manage currency exchange rate risk, interest rate risk, credit risk and liquidity risk related to operation activities. In order to reduce related financial risks, the Company has devoted to identification, evaluation and avoiding uncertainty of market, to reduce any potential unfavorable impact of market changes on the corporate financial performance.

The important financial activities of the Company are specified by the board

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and in accordance with related specifications and double checked through an internal control system. During the execution period of financial planning, the Company shall scrupulously observe the related financial operation procedures concerning comprehensive financial risk management and division of authority and responsibility.

(4) Market risk

The Company mainly exposes to such market risks as changes in foreign currency exchange rate and changes in interest rate, etc.

A. Foreign currency exchange rate risk

The foreign currency exchange rate risk of the Company mainly comes from Cash and cash equivalents, accounts receivable, other payables priced by foreign currency exchange, Financial assets at fair value through profit or loss as fund, Financial assets at fair value through other comprehensive income as overseas company stock and financial bond, and foreign currency time deposit with maturity period above three months.

The information concerning foreign currency financial assets and liabilities under material impacts of foreign currency exchange rate fluctuation shall be as follows:

Financial assets Monetary items USD HKD JPY RMB Non-monetary items USD Financial liabilities Monetary items USD HKD JPY RMB		Dec. 31, 2020			Dec. 31, 2019
	foreign currency	Exchange rate	Amount	foreign currency	Exchange rate	Amount
	25,672 8,352 210,548 35,553 1,276 113 4 10 315	28.43 3.595 0.2746 4.355 28.43 28.53 3.655 0.2787 4.405	729,846 30,025 57,817 154,834 36,280 3,221 13 3 1,389	18,822 9,647 89,832 31,007 653 296 14 － 207	30.03 3.836 0.2751 4.296 30.03 30.13 3.896 － 4.346	565,217 37,007 24,713 133,204 19,600 8,908 56 － 901

The sensitivity analysis concerning foreign currency exchange rate risk is

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calculated mainly for the monetary items of foreign currency at the end of the financial reporting period. When the appreciation/ depreciation of NT Dollar vs. foreign currency reaches 1%, the pre-tax profit and loss of the Company from January 1 to December 31, 2020 and 2019 would separately increase/decrease by NT$9,679 thousand and NT$7,503thousand, respectively.

Due to a large variety and volumes of foreign currency transactions, the Company discloses the exchange gains/losses for the summary of monetary items. The recognized foreign currency gain/loss (realized and unrealized) was NT$40,142 thousand for 2020 and NT$2,641thousand for 2019.

B. Interest rate risk

The interest rate risk refers to the risk in fair values of non-derivative financial instruments cause by changes of market interest rate. The interest rate risk of the Company mainly comes from short-term loans and shortterm bonds payable.

Concerning the sensitivity analysis of interest rate risk, it is calculated on basis of the fixed interest rate loan at the end of the financial reporting period, and it is assumed to be held for one year. In case the interest rate rises/drops 1%, the pre-tax profit and loss of the Company from January 1 to December 31, 2020 and 2019 would separately increase/ decrease by NT$3,600 thousand and NT$12,595thousand, respectively.

C. Other price risks

The price risk of equity instruments of the Company mainly comes from the investment classified as Financial assets at fair value through other comprehensive income; and all major equity instrument investments may only be conducted after the approval of the board of the Company. Concerning the sensitivity analysis of equity instrument price risks, it is

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calculated on basis of the changes in fair values at the end of the financial reporting period. In case the price equity instruments rises/drops 1%, the profit and loss of the Company from January 1 to December 31, 2020 and 2019 would separately increase/decrease by NT$33,781 thousand and NT$32,735thousand, respectively.

• (5) Credit risk management

The credit risk management refers to the opposing party of trade violates contract obligations and causes risks of financial loss to the Company. The credit risk of the Company comes mainly from the accounts receivable generated from operation activities, and bank deposits generated from investment activities and other financial instruments. Operation related credit risks and financial credit risks are under separate management.

• A. Operation related credit risks

In order to maintain the quality of accounts receivable, the Company already establishes the procedures of operation related credit risks. The risk evaluation of an individual customer considers such numerous factors with potential impacts on customer payment abilities as the financial status of the said customer, internal credit ratings of the Company, historical trade record and current economic status, etc. The Company would also in due time uses certain credit enhancement tools, such as sales revenue received in advance and credit insurance, etc., to reduce credit risks of specific customers.

Up to December 31, 2020 and December 31, 2019, the accounts receivable balances of the top 10 major customers account for the accounts receivable balances of the Company respectively as 56% and 72%; the risk concentration risks of the rest accounts receivable are relatively not major.

• B. Financial credit risk

The credit risks of bank deposit and other financial instruments are measured and supervised by the Finance Department of the Company. Since the trade parties of the Company are all domestic banks with commendable credit, there is no suspicion of major contract performance; therefore, there is no major credit risk.

(6) Liquidity risk management

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The object of liquidity risk management of the Company is to maintain cash and equivalent cash required for operation, securities with high liquidity, and sufficient bank financing quota, etc., to ensure the Company to possess sufficient financial flexibility, operation fund sufficient to cope up with the financial liabilities with agreed repayment periods.

A. The liquidity of non-derivative financial assets and liabilities

Less than 1 year Non-derivative financial liabilities Short-term borrowing $ 350,000 Short-term notes and bills payable 9,992 Trade payables 228,586 Lease liabilities 5,440 Guarantee deposits received 26,274 Total $ 620,292 Less than 1 year Non-derivative financial liabilities Short-term borrowing $ 860,000 Short-term notes and bills payable 399,548 Trade payables 241,681 Lease liabilities 5,762 Guarantee deposits received 15,488 Total $ 1,522,479			Dec. 31, 2020
	Less than 1 year	2～3 years	4～5 years	Over 5 years	Total
	$ 350,000 9,992 228,586 5,440 26,274	$ － － － 10,879 9,005	$ － － － 10,879 6,230	$ － － － 16,319 1,954	$ 350,000 9,992 228,586 43,517 43,463
	$ 620,292	$ 19,884	$ 17,109	$ 18,273	$ 675,558
			Dec. 31, 2019
	Less than 1 year	2～3 years	4～5 years	Over 5 years	Total
		$ － － － 10,879 17,525	$ － － － 10,879 4,661	$ － － － 21,759 4,727	$ 860,000 399,548 241,681 49,279 42,401
	$ 1,522,479	$ 28,404	$ 15,540	$ 26,486	$ 1,592,909

B. Loan commitments

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Dec. 31, 2020

Dec. 31, 2019

Unsecured bank overdraft limit

Unsecured bank overdraft limit
-Amount used -Amount unused Unsecured bank loan limit -Amount used -Amount unused Secured bank loan limit -Amount used -Amount unused	$ － 90,000 $ 90,000	$ － 90,000
		$ 90,000
	Dec. 31, 2020 $ 360,000 2,580,000 $ 2,940,000 $ － 170,000 $ 170,000	Dec. 31, 2019
		$ 1,090,000 1,850,000
		$ 2,940,000
		$ 170,000 －
		$ 170,000

32. Related party transaction

(1)Name and relation ship with related parties

Name of related parties Relationship with the Company

Formosan Construction Corp. (Taiwan) Eurogear Corporation

Investee company accounted for using the equity method

The Company’s institutional director

Chen Hsi Investment CO, LTD

The president is the spouse of the general manager of the Company

Hung He Development CO, LTD

The president is the spouse (1st degree of kinship) of the Company’s president

FRG Charity Foundation HSU, ZHEN-TSAI HSU, ZHEN-JI Hsu Mei-Zhi

Its president is the same as president of the Company

President of the Company

The general manager of the Company

2nd degree of kinship of the Company’s president

• (2) Major transaction with related parties

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A. Operating revenue -Rental

Operating revenue-Rental
Other Guarantee deposits received	2020 $ 1,126 Dec. 31, 2020 $ 274	2019
		$ 1,126
		Dec. 31, 2019
		$ 274

The related enterprise leases the office to the Company, and the lease content is determined by the agreement between the two parties, and the rent is collected monthly.

B.Lease agreement

Lease agreement signed by the Company with Formosan Construction Corp. (Taiwan),Eurogear Corporation, Chen Hsi Investment CO, LTD., Ltd. and Hung He Development CO, LTD in December 2018., with the lease period as of January 1, 2018 to December 31, 2028. The lease agreement is based on the Consumer Price Index (CPI) in thesixth, and it adjusts the rent according to the accumulated average CPI increase in the previous year. The Company does not have a preferential purchase right for the real property at the end of the lease term. The rent is the monthly payment.

Formosan Construction Corp. (Taiwan) Eurogear Corporation Chen Hsi Investment CO, LTD Hung He Development CO, LTD Total Formosan Construction Corp. (Taiwan) Eurogear Corporation Chen Hsi Investment CO, LTD Hung He Development CO, LTD Total	Dec. 31, 2020	Dec. 31, 2020
	Right-of-use assets lease liabilities $ 8,189 $ 8,277 7,852 7,937 16,672 16,853 8,529 8,621 $ 41,242 $ 41,688 Dec. 31, 2019	lease liabilities
		$ 8,277 7,937 16,853 8,621
		$ 41,688
	Right-of-use assets $ 9,212 8,834 18,756 9,595 $ 46,397 Dec. 31, 2020	lease liabilities
		$ 9,262 8,881 18,857 9,647
		$ 46,647
		Dec. 31, 2019

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C.	Refundable deposits Interest expense Depreciation expense Other payables Other	$ 1,167 2020 $ 480 $ 5,155 Dec. 31, 2020 $ －	$ 1,167
			2019
			$ 534
			$ 5,155
			Dec. 31, 2019
			$ 6,288

• D. As of December 31, 2020 and 2019, the farmland of investment property held in the name of the major management of FRG amount to NT$109,204 thousand and NT$94,241 thousand, respectively. Its ownership certificate is under custody of FRG, and its pledge is set to FRG for security purpose.

E.Sale of real estate

In 2020, the Company sales the real estate and parking space of the La Bella Vita Project in Taichung City to Hsu Mei-Zhi, which is jointly developed and constructed with Continental Development Corporation. The total contract price (including tax) is NT$37,200 thousand. Base on the capital contribution ratio, the transaction price of the Company is NT$10,137 thousand and the disposition benefit is NT$3,529 thousand.

F. Donation expense

Donation expense
FRG Charity Foundation	2020
	$ 10,000

(3) Reward to major management

The remuneration information to board directors and other major management members shall be as follows:

members shall be as follows:
Short-term benefits Retirement benefit Total	2020 $ 57,459 613 $ 58,072	2019
		$ 50,961 610
		$ 51,571

33. Pledged assets

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The following assets are already provided to serve for guarantee of financial industry loans, material purchase and international logistics business, with the book amounts as follows:

book amounts as follows:
Construction project ─Real estate under construction Other financial assets Property, plant and equipment Investment property - house and land Total	Dec. 31, 2020 $ － 20,000 287,640 190,148 $ 497,788	Dec. 31, 2019
		$ 1,960,691 20,000 287,640 192,872
		$ 2,461,203

1. Material contingent liabilities and unrecognized contract promise: None

2. Important disaster loss: None

3. Important subsequent events: None

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37. Additional disclosed items

• (1) Information regarding the material transaction items

A. The status of lending capital to others: None

B. The status of endorsement and guarantee for others:

No. (note 1)	Company name of the endorsement / guarantee provider	Recipient of the endorsement/ guarantee	Recipient of the endorsement/ guarantee	Endorsement / guarantee quota for a individualent erprise (note 3)	Max. balance of the endorsement/ guarantee this period	Ending balance of the endorsement/ guarantee	Actual drawing amount	The endorsement / guarantee amount guaranteed by properties	Percentage of accumulated endorsement / guarantee amount in net value of the latest financial statements	Max. limit of the endorsement / guarantee (note 3)	Endorsement / guarantee from parent company to subsidiary	Endorsement / guarantee from subsidiary to parent company	Endorsement / guarantee to Mainland China
		Company name	Relation
0	FRG	950 Property LLC	Note 2	$1,677,339	$ 790,727 (USD26,054)	$ 743,309 (USD26,054)	$ 341,440 (USD11,968)	－	6.65％	$ 3,354,678	－	－	－

Note 1: The explanation for the number column is as follows:

• (1) Put “0” for the company.

• (2) Put the serial No. starting from 1 for the investees by company category.

• Note 2: The relationships between endorsement/ guarantee provider and recipient:A company that is endorsed by each of the contributing shareholders in accordance with their shareholding ratio because of the joint investment relationship.

• Note 3: Accoridng to the Operating procedures of endorsement and guarantee for others, the Company’s endorsement/ guarantee total amount should be no more than 30% of this company’s net value, and its endorsement/ guarantee amount to an individual enterprise should be no more than 15% of the Company’s net value.

Note 4 ： US$1 ＝ NT$28.53

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C. Thestatus of securities held at the end of the period

Name of this Company	Type and name of securities	Relation with securities issuer	Item listed on book		The end of the	period		Remarks
				Share / unit numbers	Book value	Ratio of share holding%	Fair value
FRG	Fund Allianz Global Investors Preferred Securities and Income Fund Allianz Global Investors Income and Growth Fund NN(L) US Credit X Cap USD AB International Technology Portfolio AB American Growth Portfolio Stock SinoPac Financial Holdings Company Limited Nan Ya Plastics Corporation Formosa Chemicals & Fibre Corporation Far Eastern New Century Corporation Far Eastern Group Far Eas Tone Telecommunications Co., Ltd. Formosa Plastics Corporation Huaku Development Co., Ltd. E. SUN Financial Holding Co., Ltd. ASUSTeK Computer Inc. WPG Holdings Formosa Petrochemical Corp. Shine More Technology Materials Corporation., Ltd. Fubon Securities Co., Ltd. Continental Holdings Corp. (CHC) Pegatron Corporation ChongHongConstruction Co.,Ltd.		Financial assets at fair value through profit or loss - current 〃 〃 〃 〃 Financial assets at fair value through other comprehensive income - current 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃	997,009 91,159 202 10,490 21,346 35,969,700 3,847,900 4,599,170 4,101,761 5,266,447 2,210,000 583,000 1,325,000 1,630,419 200,000 283,600 1,678,000 1,158,250 690,000 2,205,000 1,577,000 842,000	$ 10,289 29,001 9,432 8,836 14,722 411,853 276,664 389,550 118,746 126,395 135,252 56,201 116,335 41,657 50,100 12,166 167,464 4,517 7,073 45,644 106,132 67,360	－ － － － － 0.32 0.05 0.08 0.08 0.37 0.07 0.01 0.48 0.01 0.03 0.02 0.02 3.05 0.28 0.27 0.06 0.29	$ 10,289 29,001 9,432 8,836 14,722 411,853 276,664 389,550 118,746 126,395 135,252 56,201 116,335 41,657 50,100 12,166 167,464 4,517 7,073 45,644 106,132 67,360	Note Note Note Note Note Note Note Note Note Note Note

Note: The situation of being provided to financial loan business trust in detail is shown as in Note 8.

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Name of this Company	Type and name of securities	Relation with securities issuer	Item listed on book		The end of the	period		Remarks
				Share / unit numbers	Book value	Ratio of share holding %	Fair value
FRG	Farglory Land Development Co., Ltd. Shin Kong Financial Holding Co., Ltd. -Preferred Shares B Bank of Amer Citigroup Inc. Brightek Optoelectronic Co., Ltd. Eslite Corporation Yu Chi Venture Investment Co., Ltd. Formosan Chemical Industrial Co. Formosan Glass & Chemical Industrial Co. Tai Yang Co., Ltd. Formosan Rubber Group Inc. (Ningpo) Tashee Golf & Country Club - preferred stock Corporate Bond AT&T Inc. debt II AT&T Inc. debt VI Ford Motor Company Delta Air Lines Inc.	Chairman of Formosan Rubber Group Inc. (Ningpo) is the brother to Chairman of Formosan Rubber Group Inc.	Financial assets at fair value through other comprehensive income - current 〃 〃 〃 Financial assets at fair value through other comprehensive income – non-current 〃 〃 〃 〃 〃 〃 〃 Financial assets at fair value through other comprehensive income - current 〃 〃 〃	1,254,000 666,000 14,000 4,000 267,241 1,604,379 2,250,000 22,516 9,795 111,395 － 1 680,000 630,000 500,000 250,000	$ 70,600 28,205 12,064 7,012 6,887 10,415 25,898 14,281 2,563 7,351 17,204 14,400 22,087 18,441 15,884 8,049	0.16 0.01 0.00 0.00 0.44 1.65 10.00 2.25 5.02 1.24 12.86 － － － － －	$ 70,600 28,205 12,064 7,012 6,887 10,415 25,898 14,281 2,563 7,351 17,204 14,400 22,087 18,441 15,884 8,049	Note

Note: The situation of being provided to financial loan business trust in detail is shown as in Note 8.

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Name of this Company	Type and name of securities	Relation with securities issuer	Item listed on book		The end of the	period		Remarks
				Share / unit numbers	Book value	Ratio of share holding %	Fair value
Ban Chien Development Co., Ltd.	Stock SinoPac Financial Holdings Company Limited Chong Hong Construction Co., Ltd. Taiwan Cement Corporation MiTAC Holdings Corporation Farglory Land Development Co., Ltd. Yuanta Financial Holding Co., Ltd.		Financial assets at fair value through other comprehensive income - current 〃 〃 〃 〃 〃	42,062,322 904,000 420,006 224,000 380,000 208,000	$ 481,614 72,320 18,144 6,608 21,394 4,274	0.37 0.31 0.01 0.02 0.05 0.00	$ 481,614 72,320 18,144 6,608 21,394 4,274
FRG US Corp.	Stock TRIMOSA HOLDINGS LLC		Financial assets at fair value through other comprehensive income - non-current	－	423,771	14.67	423,771

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D. The same securities in which the accumulated amount of buying or selling reached NT$300 million or was more than 20% of the paid-

up capital: None

• E. The amount acquiring real estate which reached NT$300 million or was over 20% of the paid-up capital: None

• F. The amount disposing property which reached NT$300 million or was over 20% of the paid-up capital:

Name	Property	Transection date	Acquisition date	Carrying value	Transection amount	Receipt status	Gain (loss) on disposal	Counterparty	Nature of relationship	Purpose of disposal	Price reference	Other terms
FRG	55 TIMELESS Project－Real estate for sale	109.03.02	N/A	Inventory held for sale therefore not applicable	$ 341,212	$ 341,212	Inventory held for sale therefore not applicable	Customer A	Non-relative	Get benefit	The appraisal amount of $330,800 as reported by REPro Knight Frank	None

• G. The amount of purchases or sales from or to related parties which reached NT$100 million or was over 20% of the paid-up capital:

None

• H. The amount of related party receivables which reached NT$100 million or was more than 20% of the paid-up capital: None

I. Information regarding transactions of derivative financial products: None

J. Business relations, important transaction current conditions between the parent company and its subsidiaries: None

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(2) Related information to re-investment businesses

Investing company	Investee	Area	Business items	Original investment amount	Original investment amount	Holdingat the end of theperiod	Holdingat the end of theperiod	Holdingat the end of theperiod	Investee’s profit (loss) of current period	Investment profit (loss) recognized current period	Remarks
				End of period for current period	End for last year	Share	Ratio (%)	Book value
FRG	Ban Chien Development Co., Ltd. Da-Guan Recreation Company KINGSHALE INDUSTRIAL LIMITED FRG US Corp. Formosan Construction Corp. (Taiwan) Fenghe Development Co., Ltd. Rueifu Development Co., Ltd.	Taiwan Taiwan Hong Kong U.S.A. Taiwan Taiwan Taiwan	Consign a contractor to build residential and commercial building for lease and sale Trading on golf driving range, playground, sports equipment Investment Real estate investment, development and rental and sales of premises. Consign a contractor to build commercial building and public housing for lease and sale Consign a contractor to build residential and commercial building for lease and sale International trade, investment consultancy, office building for lease and building/land brokerage.	$ 560,000 － 34 461,349 75,979 59,850 483	$ 560,000 63,007 34 460,142 75,979 59,850 483	56,000,000 － 9,999 7,526,000 7,597,927 3,990,000 48,260	100.00 － 99.99 100.00 26.20 39.90 48.26	$ 622,046 － － 424,611 62,048 31,655 8,263	$ 36,607 － － (455) 6,491 (886) 3,183	$ 36,607 － － (455) 1,899 (353) 1,536	Subsidiary Note Subsidiary Subsidiary

Note: Da-Guan Recreation Company has passed the dissolution and liquidation at the temporary shareholders meeting on October 22, 2020. (3) Information of the investment in China: None

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(4) Information on major shareholders

Shareholding Name of major shareholder	Number of shares	Percentage of ownership
Ruifu Construction Co., Ltd.	34,070,754	9.95％
Chen Hsi Investment CO, LTD	17,626,989	5.14％

• Note: A. The major shareholders information was calculated by Taiwan Depository & Clearing Corporation in accordance with the common shares (including treasury shares) and preferred shares in dematerialised form which were registered and held by the shareholders above 5 ％ on the last operating date of each quarter. The share capital which was recorded on the financial statements might be different from the number of shares held in dematerialised form because of the different calculation basis.

• B. As per information above, if the shareholder delivers the shares to the trust, shares will be disclosed based on the trustee’s account. Additionally, according to the Securities and Exchange Act, internal stakeholder whom holds more than 10% of the Company’s share, which includes shares held by the stakeholder and parts delivered to the trust that have decision making rights, should be declared. For information regarding internal stakeholder declaration, please refer to the Market Observation Post System website of the Taiwan Stock Exchange Corporation.

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38. Department information

• (1) Operating department

• A. The operation departments required to be reported include Rubber, Construction and Warehousing Departments; Rubber Department engages in manufacture & sale of such products as rubber sheets, plastic sheets, plastic foam sheets and PVC resin sheets, etc.; Construction Department engages in constructing residential & commercial buildings for lease & sale; Warehousing Department engages in management of logistics storage.

• B. The department profit and loss refer to the profit earned by each department, excluding director/supervisor remuneration and investment profit & loss recognized by equity method. These measurement amounts shall be provided to the major operation decision makers, to be sued to distribute resources to departments and evaluate their performance. Besides, there is no major discrepancy between the accounting policies used by Operation Department and the summary description of important accounting policies described in Note 4.

• (2) Departments income and operating result

2020

Revenue from external customers Revenue from inter- departments Profit (loss) of departments Unclassified profit (loss) Non-operating income and expenses Profit before income tax Income tax (expense)profit	Rubber	Construction	Warehousing	Other	Adjustment and write-off	Total
	$ 846,049	$ 2,206,748	$ 215,968	$ 13,490	$ －	$ 3,282,255
	$ －	$ －	$ 60	$ －	$ (60)	$ －
	$ 76,857	$ 776,686	$ 91,969	$ 10,767	$ －	$ 956,279
						(145,717) 119,572
						$ 930,134
						$ (28,418)

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2019

Rubber Construction Warehousing Other Adjustment and write-off Total Revenue from external customers $ 962,331 $ 1,518,732 $ 207,068 $ 13,646 $ － $ 2,701,777 Revenue from inter- departments $ － $ － $ 60 $ － $ (60) $ － Profit (loss) of departments $ (73,388) $ 492,468 $ 92,058 $ 41,655 $ － $ 552,793 Unclassified profit (loss) (128,980) Non-operating income and expenses 128,874 Profit before income tax $ 552,687 Income tax (expense)profit $ (13,737) (3) Regional information: Revenue from external customers Non-current assets Region 2020 2019 2020 2019 Asia $ 3,056,339 $ 2,426,088 $ 3,707,292 $ 3,783,540 Europe 136,752 196,929 － － United States- Canada 87,534 78,433 － － Other region 1,630 327 － － Total $ 3,282,255 $ 2,701,777 $ 3,707,292 $ 3,783,540	Rubber Construction Warehousing Other Adjustment and write-off Total Revenue from external customers $ 962,331 $ 1,518,732 $ 207,068 $ 13,646 $ － $ 2,701,777 Revenue from inter- departments $ － $ － $ 60 $ － $ (60) $ － Profit (loss) of departments $ (73,388) $ 492,468 $ 92,058 $ 41,655 $ － $ 552,793 Unclassified profit (loss) (128,980) Non-operating income and expenses 128,874 Profit before income tax $ 552,687 Income tax (expense)profit $ (13,737) (3) Regional information: Revenue from external customers Non-current assets Region 2020 2019 2020 2019 Asia $ 3,056,339 $ 2,426,088 $ 3,707,292 $ 3,783,540 Europe 136,752 196,929 － － United States- Canada 87,534 78,433 － － Other region 1,630 327 － － Total $ 3,282,255 $ 2,701,777 $ 3,707,292 $ 3,783,540	Rubber	Rubber	Construction	Construction	Warehousing	Warehousing	Other	Adjustment and write-off	Total
		$ 962,331		$ 1,518,732		$ 207,068		$ 13,646	$ －	$ 2,701,777
		$ －		$ －		$ 60		$ －	$ (60)	$ －
		$ (73,388)		$ 492,468		$ 92,058		$ 41,655	$ －	$ 552,793
										(128,980) 128,874
										$ 552,687
										$ (13,737)
			2020		2019			2020
	Asia Europe United States- Canada Other region Total		$ 3,056,339 136,752 87,534 1,630		$ 2,426,088 196,929 78,433 327		$ 3,707,292 － － －
			$ 3,282,255		$ 2,701,777		$ 3,707,292

The above non-current assets shall not include financial products and deferred income

tax assets

(4) Products information

Products information
Products Rubber Real property Other Total	2020 $ 844,836 2,206,748 230,671 $ 3,282,255	2019
		$ 960,898 1,518,732 222,147
		$ 2,701,777

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• (5) Important customer information: The customers whose net incomes accounting for

• more than 10% of the income in the Rubber Department of 2020 and 2019 are as

follows:

s:	s:	s:	s:	s:	s:
		Rubber Enterprise Dept.
	2020			2019
Customer	Amount	Proportion to operating income	Customer	Amount	Proportion to operating income
Customer A	$ 100,868	12％	Customer C	$ 83,289	9％
Customer B	91,442	11％	Customer B	112,937	12％

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V. A parent company only financial statement for the most recent fiscal year, certified by a CPA

(English Translation of Parent Company Only Financial Statements

and Report Originally Issued in Chinese)

Formosan Rubber Group Inc.

Parent Company Only Financial Statements

and Independent Auditors’ Report

2020 and 2019

Address: 8F, No. 82, Sec. 1, Hankou St., Zhongzheng District, Taipei City

Tel No.: (02) 2370-0988

The auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and parent company only financial statements, the Chinese version shall prevail.

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INDEPENDENT AUDITORS’ REPORT

NO.00111090EA

To: Formosan Rubber Group Inc.

Opinions

We have audited the accompanying parent company only balance sheet of Formosan Rubber Group Inc. as of December 31, 2020 and 2019 and the parent company only comprehensiveincome statement, statement of changes in equity, statement of cash flows and notes to the parent company only financial statements (including summary of material accounting policies) for the January 1 to December 31, 2020 and 2019.

According to the opinion of this CPA, based on our CPA’s audited result, the major aspects of the accompanying parent company only financial statements as stated in the above are prepared in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, interpretations as well as interpretation announcements recognized and announced effective by the Financial Supervisory Commission, sufficiently expressing the financial status of Formosan Rubber Group Inc. as of December 31, 2020 and December 31, 2019, and it’s parent company only financial performance and it’s parent company only cash flow of from January 1 to December 31, 2020 and 2019.

Basis of opinion

We have conducted the audit in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the generally accepted auditing standards. With our responsibility under such regulations and standards, we will further explain the responsibility of our audit of the financial statements. The personnel ruled with independence in the accounting office of the certified public accountant (CPA) have followed the Norm of Professional Ethics for Certified Public Accountants to stay impartial and independent from Formosan Rubber Group Inc., and carry out other responsibilities required by the Rules. We believe that we have obtained sufficient and pertinent audit evidence, which provides the basis of our audit opinions.

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Key audit matters

The key audit item refers to the most crucial element of our professional judgment about the audit conducted for the 2020 the parent company only financial statements of Formosan Rubber Group Inc. The item has been reflected in our overall audit of the parent company only financial statements and in the process to form our audit opinions, in which we do not individually express our opinion on the item.

Below is the list of key audit issues on the 2020the parent company only financial statements of Formosan Rubber Group Inc.:

Valuation of Net Realizable Value of Real Estate For Sale

Summary of key issues for auditing

As of December 31, 2020, the value of real estate for sale on the parent company only balance sheet was NT$ 2,931,616 thousand primarily reflective of the completed properties and land held for sale. These items accounted for approximately 24% of the parent company only total assets. Please refer to Notes 4, 5 and 11 of the parent company only financial statements for detailed information. Formosan Rubber Group Inc. uses the lower of the cost or net realizable value for the valuation of real estate for sale. As the valuation of real estate for sale is subject to the effects of the cycle in the real estate market and the changes of the government policy and the determination of net realizable values for real estate for sale requires major judgment and estimates, it was listed as one of the audit priorities this year. Audit procedures

The audit procedures were carried out by CPAs as follows:

1. Acquisition of the data concerning the company’s assessment of lower of the costs and net realizable value;

2. Random inspection of the ownership documents for the properties held for sale, in order to validate the integrity of the assessment;

3. Random inspection of the data concerning the estimated selling price and the sale records of the most recent period, so as to determine the basis and reasonability of the management’s estimate of net realizable value.

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Impairment of Property Investments Summary of key issues for auditing

As of December 31, 2020, the value of property investments on the parent company only balance sheet was NT$2,713,577thousand accounting for approximately 22% of the parent company only total assets. Please refer to Notes 4, 5 and 16 of the parent company only financial statements for detailed information. Management complies with IAS 36 “Impairment of Assets” by evaluating whether there are any signs indicating the investment properties may be impaired on each balance sheet date. Given the numerous assumptions involved, and the high uncertainty of accounting estimates, it was listed as one of the audit priorities this year. Audit procedures

The audit procedures were carried out by CPAs as follows:

1. Acquisition of the data concerning the company’s assessment of asset impairments according to cash generating units;

2. Assessment of the reasonability of the management’s identification of impairment signs, assumptions and estimates used, such as the division of cash generating units, forecasting of cash flows, the appropriateness of the discount rate.

Responsibility of the management and governance unit for the parent company only financial statements

The responsibility of the management is to prepare the adequately expressed financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), interpretations as well as interpretation announcements recognized and announced effective by the Financial Supervisory Commission, and maintain the internal control required by the preparation of the parent company only financial statements, so as to ensure that the parent company only financial statements do not have any material misstatement resulting from corruption or errors.

Unless that the management plan to liquidate Formosan Rubber Group Inc. or

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stop the business or there are no other practical and feasible measures except liquidation or business closure, the responsibility of the management for preparing the financial statements includes assessment of Formosan Rubber Group Inc.’ competence in continuing business operation, disclosure of relevant items and adoption of the business continuation accounting basis.

The governance unit (including the supervisors) of Formosan Rubber Group Inc. is liable to supervise the financial reporting process.

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

The purpose of our audit ofthe parent company only financial statements is to obtain reasonable assurance about whether any material misstatement resulting from corruption or errors is existent in the overall the parent company only financial statements, and issue the audit report. The reasonable assurance referred to here is a high degree of assurance. Nevertheless, the audit executed in accordance with the generally accepted auditing standards cannot guarantee that the material misstatement existing in theparent company only financial statements can be detected. A misstatement may result from errors or corruption. If the individual amount or compiled amount of a misstatement can be reasonably expected to impact the economic policy made by the user ofthe parent company only financial statements, it shall be regarded as a material factor.

When conducting the audit according to the generally accepted auditing standards, we used our professional judgment and kept professionally doubtful about dubious things. We also executed the following tasks:

1. Recognize and assess the risk of the material misstatement resulting from corruption or errors; design and take the appropriate coping strategy for the assessed risk; obtain sufficient and pertinent audit evidence as the basis of the audit opinions. Given that corruption may involve conspiracy, falsification, deliberate omission, misstatement or transgression of the internal control, the risk in the failure in detecting the material misstatement resulting from corruption is higher than that resulting from errors.

2. Understand the necessity for obtaining the internal control associated with the audit, so as to design the audit procedure appropriate under the condition at the time. However, the purpose of it is not to express the opinion on the efficacy of Formosan Rubber Group Inc.’ internal control.

3. Assess the propriety of the accounting policy adopted by the management and the

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rationality of the accounting estimation and relevant disclosures.

1. Conclude if the business continuation accounting basis adopted by the management is proper, and whether the material doubtful event or circumstance likely incurred from the competence of Formosan Rubber Group Inc.’ continuing business operation has any material uncertainty according to the acquired audit evidence. If we consider material uncertainty existent in such event or circumstance, we shall remind the user of the parent company only financial statements to pay attention to the relevant disclosures of the parent company only financial statements through our audit report, or modify the audit opinion when such disclosures are not applicable. Our conclusion is made according to the audit evidence acquired until the audit report day. However, the development of future events or circumstances is also likely to bring about Formosan Rubber Group Inc.’ incompetence to continue its business operation.

2. Assess the overall representation, structure and content of the parent company only financial statements (including the relevant notes) and check if the related transactions and events are adequately represented in the parent company only financial statements.

3. Acquire sufficient and pertinent audit evidence from the financial information of individual entities composed in the Formosan Rubber Group Inc., so as to express opinions onthe parent company only financial statements. We are responsible for the guidance, supervision and execution of the Group’s audit cases, and form the Formosan Rubber Group Inc. audit opinions.

The items communicated between us and the governance unit cover the planned audit scope and time and material audit findings (including the significant defects of internal control recognized in the audit process).

We also provide the governance unit with the fact that the personnel of our office who have been required for audit independence have complied with the parent company only statement stipulated in the Rules of Professional Ethics for Certified Public Accountants of the Republic of China, and communicated with the governance unit for any relations which are likely considered to impact CPA’s independence and other items (including relevant protection measures).

According to the items communicated with the governance unit, we have

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determined the key item of our audit of Formosan Rubber Group Inc.’ 2020 the parent company only financial statements, in which we have described the item in our audit report. Except for the specific items which are not allowed to be publicly disclosed as prescribed by laws and regulations or under a rare situation, we have decided not to communicate specific matters in our audit report because we have reason to believe that the negative influence of the communication is greater than the positive influence on the public interest.

BAKER TILLY CLOCK & CO.

March 19 , 2021

Notes to Readers

The accompanying parent company only financial statements are intended only to present the parent company only financial position, financial performance and its cash flows in accordance with the 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 (or review) such parent company only financial statements are those generally accepted and applied in the Republic of China.

The auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language auditors’ report and parent company only financial statements, the Chinese version shall prevail.

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Formosan Rubber Group Inc.

Parent Company Only Balance Sheet

Dec. 31, 2020 and 2019

		Unit: In Thousands of NTD	Unit: In Thousands of NTD	Unit: In Thousands of NTD	Unit: In Thousands of NTD
Assets	Note	Dec. 31, 2020		Dec. 31, 2019
Accounting item		Amount	％	Amount	％
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss-current Financial assets at fair value through other comprehensive income - current Notes receivable, net Accounts receivable, net Other receivables Current tax assets Inventories Real estate for sale and real estate under construction Prepayments Other financial assets-current Other current assets-other Non-current assets Financial assets at fair value through other comprehensive income - non-current Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Deferred tax assets Prepayments for equipment Refundable deposits Other financial assets - non-current Other non-current assets, others	6 7 8 9 9 10 11 12 8 13 14 15 16 27 12	$ 7,325,060	60	$ 7,927,109	61
		1,352,167 72,280 2,315,451 40,765 198,669 6,849 9,751 219,446 2,931,616 61,215 115,653 1,198	11 1 19 － 2 － － 2 24 － 1 －	900,150 － 2,123,296 35,082 92,861 1,044 9,751 257,247 4,305,695 35,667 165,214 1,102	7 － 17 － 1 － － 2 33 － 1 －
		4,931,614	40	5,050,381	39
		98,999 1,148,623 848,439 41,242 2,713,577 56,375 170 2,291 20,000 1,898	1 10 7 － 22 － － － － －	109,791 1,173,434 891,585 46,717 2,763,300 34,090 822 8,322 20,000 2,320	1 9 7 1 21 － － － － －
Total assets		$ 12,256,674	100	$ 12,977,490	100

(The attached notes constitute a part of the parent company only financial statements.)

202

Formosan Rubber Group Inc.

Parent Company Only Balance Sheet (Continued)

Dec. 31, 2020 and 2019

		Unit: In Thousands of NTD	Unit: In Thousands of NTD	Unit: In Thousands of NTD	Unit: In Thousands of NTD
Liabilities & equity	Note	Dec. 31, 2020		Dec. 31, 2019
Accounting item		Amount	％	Amount	％
Current liabilities Short-term borrowings Short-term notes and bills payable Contract liabilities Notes payable Accounts payable Other payables Current tax liabilities Lease liabilities-current Other current liabilities Non-current liabilities Deferred tax liabilities Non-current lease liabilities Net defined benefit liability Guarantee deposits received Credit balance of investments accounted for using equity method Total liabilities Share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated retained earnings Other equity interest Exchange differences on translation of foreign financial statements Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income Treasury stocks Total equity	17 18 11、21 15 27 15 19 13 20 20 20 20 20	$ 817,900	7	$ 1,912,550	15
		350,000 9,992 197,159 57,581 34,372 136,242 10,472 5,014 17,068	3 － 2 1 － 1 － － －	860,000 399,548 395,698 87,820 20,144 126,725 － 5,281 17,334	7 3 3 1 － 1 － － －
		256,515	2	258,301	2
		173,308 36,674 3,070 43,463 －	1 － － 1 －	166,455 41,688 3,688 42,401 4,069	1 － － 1 －
		1,074,415	9	2,170,851	17
		3,423,260	28	3,500,000	27
		456,341	4	466,463	4
		7,245,305	59	6,672,834	51
		1,580,683 304,771 5,359,851	13 2 44	1,526,788 358,637 4,787,409	12 2 37
		57,353	－	167,342	1
		(26,658) 84,011	－ －	(7,448) 174,790	－ 1
		－	－	－	－
		11,182,259	91	10,806,639	83
Total liabilities & equity		$ 12,256,674	100	$ 12,977,490	100

(The attached notes constitute a part of the parent company only financial statements.)

203

Formosan Rubber Group Inc.

Parent Company Only Comprehensive Income Statement

From Jan. 1 to Dec. 31, 2020 and 2019

Unit: In Thousands of NTD

Accounting item	Note	2020		2019
		Amount	％	Amount	％
Operating revenue Operating costs Gross profit Operating expenses Selling expenses General and administrative expenses Research and development expenses Operating profit Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Expected credit impairment (loss) gain Shares of profit (loss) of subsidiaries and associates Income before income tax Income tax (expense) profit Net income Other comprehensive income Items that will not be reclassified subsequently to profit or loss Remeasurements of defined benefit plans Unrealized gains (losses) on valuation of investments in equity instruments measured at fair value through other comprehensive income Shares of other comprehensive (loss) income of subsidiaries and associates Income tax benefit related to items that will not be reclassified subsequently Items that may be reclassified subsequently to profit or loss Exchange differences arising on translation of foreign operations Unrealized loss on valuation of investments in debt instruments measured at fair value through other comprehensive income Income tax related to items that may be reclassified subsequently Total comprehensive income for the year Earnings per share (NT dollars) Basic earnings per share Diluted earningsper share	21 22 23 24 25 27 19 27 27 28	$ 3,282,315 (2,219,968)	100 (68)	$ 2,701,837 (2,040,089)	100 (76)
		1,062,347 (249,763)	32 (8)	661,748 (234,831)	24 (8)
		(96,091) (143,755) (9,917)	(3) (5) －	(92,754) (128,980) (13,097)	(3) (5) －
		812,584	24	426,917	16
		117,501	4	123,093	4
		10,728 120,534 (44,236) (8,227) (532) 39,234	－ 4 (1) － － 1	20,596 123,904 (34,290) (19,630) － 32,513	－ 5 (1) (1) － 1
		930,085 (28,369)	28 (1)	550,010 (11,053)	20 －
		901,716	27	538,957	20
		(116,478)	(3)	184,067	7
		(97,049)	(3)	177,251	7
		468 (54,434) (41,240) (1,843)	－ (2) (1) －	2,542 55,676 119,490 (457)	－ 2 5 －
		(19,429)	－	6,816	－
		(24,013) (419) 5,003	－ － －	(11,050) 19,570 (1,704)	－ － －
		$ 785,238	24	$ 723,024	27
		$ 2.62 $ 2.61		$ 1.54 $ 1.54

(The attached notes constitute a part of the parent company only financial statements.)

204

Formosan Rubber Group Inc.

Parent Company Only Statement of Changes in Equity

From Jan. 1 to Dec. 31, 2020 and 2019

Unit: In Thousands of NTD

Item	Capital	Capital surplus		Retained earnings		Other equityinterest	Other equityinterest	Treasury stocks	Total equity
			Legal reserve	Special reserve	Undistributed earnings	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income
Balance of Jan. 1,2019	$ 3,700,000	$ 492,836	$ 1,505,207	$ 319,584	$ 4,648,289	$ 1,392	$ (46,003)	$ (261,373)	$ 10,359,932
Legal reserve appropriated Cash dividend Special reserve appropriated Reversal of special reserve Net income in 2019 Other comprehensive income for 2019, net of income tax Total comprehensive income (loss) in 2019 Purchase of treasury share Retirement of treasury share Disposal of financial assets at fair value through other comprehensive income - equity instruments	－ － － －	－ － － －	21,581 － － －	－ － 44,610 (5,557)	(21,581) (238,000) (44,610) 5,557	－ － － －	－ － － －	－ － － －	－ (238,000) － －
	－ －	－ －	－ －	－ －	538,957 2,034	－ (8,840)	－ 190,873	－ －	538,957 184,067
	－	－	－	－	540,991	(8,840)	190,873	－	723,024
	－ (200,000) －	－ (26,373) －	－ － －	－ － －	－ (73,317) (29,920)	－ － －	－ － 29,920	(38,317) 299,690 －	(38,317) － －
Balance of Dec. 31,2019	3,500,000	466,463	1,526,788	358,637	4,787,409	(7,448)	174,790	－	10,806,639
Legal reserve appropriated Cash dividend Reversal of special reserve Net income in 2020 Other comprehensive income for 2020, net of income tax Total comprehensive income (loss) in 2020 Purchase of treasury share Retirement of treasury share Disposal of financial assets at fair value through other comprehensive income - equity instruments	－ － －	－ － －	53,895 － －	－ － (53,866)	(53,895) (280,000) 53,866	－ － －	－ － －	－ － －	－ (280,000) －
	－ －	－ －	－ －	－ －	901,716 (704)	－ (19,210)	－ (96,564)	－ －	901,716 (116,478)
	－	－	－	－	901,012	(19,210)	(96,564)	－	785,238
	－ (76,740) －	－ (10,122) －	－ － －	－ － －	－ (42,756) (5,785)	－ － －	－ － 5,785	(129,618) 129,618 －	(129,618) － －
Balance of Dec. 31,2020	$ 3,423,260	$ 456,341	$ 1,580,683	$ 304,771	$ 5,359,851	$ (26,658)	$ 84,011	$ －	$ 11,182,259

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(The attached notes constitute a part of the parent company only financial statements.)

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Formosan Rubber Group Inc.

Parent Company Only Statement of Cash Flows

From Jan. 1 to Dec. 31, 2020 and 2019

Unit: In Thousands of NTD

	Unit:	In Thousands of NTD
Item	From Jan. 1 to Dec. 31, 2020	From Jan. 1 to Dec. 31, 2019
	Amount	Amount
Cash flows from operating activities: Income before income tax Adjustments for: Depreciation expense Expected credit impairment loss (gain) Net loss (gain) on financial assets and (liabilities) at fair value through loss (profit) Interest expense Interest income Dividend income Share of loss (profit) of subsidiaries and associates Loss (gain) on disposal of property, plant and equipment Loss (gain) on disposal of investment properties Loss (gain) on disposal of investments Impairment loss on non-financial assets Unrealized foreign exchange loss (gain) Changes in operating assets and liabilities Notes receivable Accounts receivable Other receivables Inventories Real estate for sale and real estate under construction Prepayments Other current assets Contract liabilities Notes payable Accounts payable Other payables Receipts in advance Other current liabilities Net defined benefit liability Cash generated from operations	$ 930,085 111,880 817 (1,870) 8,227 (10,728) (110,983) (39,234) － 1,589 (4,069) 3,477 1,907 (5,606) (106,170) (4,897) 37,801 1,374,079 (25,548) (96) (198,539) (30,239) 14,228 9,517 292 (558) (149)	$ 550,010 123,648 (1,556) (1,240) 19,630 (20,596) (115,727) (32,513) (388) (696) 29,998 1,494 － (4,329) 60,025 9,474 182,075 1,001,097 29,154 96 (61,257) (35,790) (24,982) (19,279) (464) (8) (498)
	1,955,213	1,687,378

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Formosan Rubber Group Inc.

Parent Company Only Statement of Cash Flows (Continued)

From Jan. 1 to Dec. 31, 2020 and 2019

	Unit: In Thousands of NTD From Jan. 1 to Dec. 31,2020 From Jan. 1 to Dec. 31,2019 Amount Amount 9,903 19,590 110,983 115,727 (8,227) (20,090) (30,170) (47,133) 2,037,702 1,755,472 (340,657) (109,305) 97,418 34,518 4,500 8,000 (70,410) － － 17,281 (1,207) (238,918) (8,118) (11,753) － 687 6,031 3,062 (10,484) － － 1,008 － 828 49,561 469,145 422 422 652 (774) (272,292) 174,201 (510,000) (1,160,000) (389,556) (320,095) 1,062 (1,960) (5,281) (6,182) (280,000) (238,000) (129,618) (38,317) (1,313,393) (1,764,554) 452,017 165,119 900,150 735,031 $ 1,352,167 $ 900,150	Unit: In Thousands of NTD From Jan. 1 to Dec. 31,2020 From Jan. 1 to Dec. 31,2019 Amount Amount 9,903 19,590 110,983 115,727 (8,227) (20,090) (30,170) (47,133) 2,037,702 1,755,472 (340,657) (109,305) 97,418 34,518 4,500 8,000 (70,410) － － 17,281 (1,207) (238,918) (8,118) (11,753) － 687 6,031 3,062 (10,484) － － 1,008 － 828 49,561 469,145 422 422 652 (774) (272,292) 174,201 (510,000) (1,160,000) (389,556) (320,095) 1,062 (1,960) (5,281) (6,182) (280,000) (238,000) (129,618) (38,317) (1,313,393) (1,764,554) 452,017 165,119 900,150 735,031 $ 1,352,167 $ 900,150
Item	From Jan. 1 to Dec. 31,2020	From Jan. 1 to Dec. 31,2019
	Amount	Amount
Interest received Dividends received Interest paid Income tax paid Net cash generated by operating activities Cash flows from investing activities: Cash paid for acquisition of financial assets at fair value through other comprehensive income Proceeds from financial assets at fair value through other comprehensive income Return of capital from financial assets at fair value through other comprehensive income Cash paid for financial assets at fair value through profit or loss Proceeds from financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment (Increase) refundable deposits Acquisition of investment properties Proceeds from disposal of investment properties Decrease in notes and accounts receivable Decrease in other financial assets Decrease in other non-current assets (Increase) decrease in prepayments for equipment Net cash (used in) generated by investing activities Cash flows from financing activities: (Decrease) in short-term borrowings (Decrease) in short-term notes and bills payable Increase (decrease) in guarantee deposits received Payments of lease liabilities Cash dividends paid Payments to acquire treasury shares Net cash (used in) financing activities Net Increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end ofyear	9,903 110,983 (8,227) (30,170)	19,590 115,727 (20,090) (47,133)
	2,037,702	1,755,472
	(340,657) 97,418 4,500 (70,410) － (1,207) (8,118) － 6,031 (10,484) － － 49,561 422 652	(109,305) 34,518 8,000 － 17,281 (238,918) (11,753) 687 3,062 － 1,008 828 469,145 422 (774)
	(272,292)	174,201
	(510,000) (389,556) 1,062 (5,281) (280,000) (129,618)	(1,160,000) (320,095) (1,960) (6,182) (238,000) (38,317)
	(1,313,393)	(1,764,554)
	452,017 900,150	165,119 735,031
	$ 1,352,167	$ 900,150

(The attached notes constitute a part of the parent company only financial statements.)

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Formosan Rubber Group Inc.

Notes to Parent Company Only Financial Statements

From Jan. 1 to Dec. 31, 2020 and 2019

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

1. Company profile

Formosan Rubber Group Inc. (hereafter referred to as the “Company”) was founded in 1963 under the Company Act of the Republic of China. The company produces and markets rubber sheets, plastic sheets, plastic foam sheets and PVC resin sheets, as well as the relevant materials. In order to diversity its operations, the Company started in September 1995 the property development business and the leasing, sale and management operations for its own properties and land. the Company became a listed company on the Taiwan Stock Exchange in March 1992. The parent company only financial statements has the New Taiwan dollars as the Company’s functional currency.

2. Date and procedure approving financial statements

The parent company only financial statements were approved and published by the board of directors on March 19 , 2021.

3. Applicability of newly published and amended standards and interpretations

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

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

from 2020 are as follows:
New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 3, ‘Definition of a business’ Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020

Except for the following,the Company believes that the initial adoption of the abovementioned standards or interpretations would not have a material impact on its accounting policies.

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• (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but

not yet adopted by the Company

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

from 2021 are as follows:
New Standards, Interpretations and Amendments	Effective date by International Accounting Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’ Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform – Phase 2’	January 1, 2021 January 1, 2021

The Company believes that the initial adoption of abovementioned standards or interpretations would not have a material impact on its accounting policies.

• (3) The IFRSs issued by IASB but not yet endorsed by FSC

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

New Standards, Interpretations and Amendments

Effective Date Issued by IASB

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, 'Insurance contracts' Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 1, ‘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’

January 1, 2022 January 1, 2022 To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2022 January 1, 2022

The Company believes that the initial adoption of abovementioned standards or interpretations would not have a material impact on its accounting policies.

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4. Summary of significant accounting policies

(1)Compliance statement

This is the Company’s first set of parent company only financial statements prepared according to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS) and IFRIC as well as interpretation announcements approved by the FSC.

(2) Preparation bases

Other than the financial assets measured at the fair value and the pension liability recognized with the net value (assets less the present value of the liabilities due to defined benefits), the parent company only financial statements are based on historical costs, usually the fair value paid for the acquisition of assets.

The subsidiaries, associates are incorporated in the parent company only financial statements under the equity method. To make net profit for the year, other comprehensive income and equity in the parent company only financial statements equal to those attributed to owners of the Company on parent company only financial statements, the effect of the differences between basis of parent company only and basis of consolidation are adjusted in the investments accounted for using equity method, the related share of the profit or loss, the related share of other comprehensive income of subsidiaries and associates and related equity.

(3) Foreign Currency

The individual financial statements for the parent company only entities are prepared and presented in the functional currency for these entities (i.e. the currency used in the economy they operate in). The functional currency and the presentation currency of the Company’s Parent company only financial statements is NT Dollars. All the financial performances and statuses are converted into the NT dollars for the preparation of the parent company only financial statements.

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Any transactions not in the functional currency shall be converted and recognized according to the exchange rate on the transaction dates in the preparation of the individual financial statements for the parent company only entities. The monetary items in foreign currencies shall be recalculated according to the spot exchange rate on the end-of-the-period date. Any difference resultant from exchange rates shall be recognized as profits or losses during the period. The non-monetary items in foreign currencies measured with the fair value shall be recalculated according to the exchange rate on the date of fair value determination. Any different resultant from exchange rates shall be recognized as profits or losses during the period. However, any difference as a result of changes in the fair value shall be recognized as other comprehensive incomes or losses. The non-monetary items in foreign currencies measured by historical costs shall not be recalculated.

For the purpose of presenting parent company only financial statements, the functional currencies of the group entities are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

On the disposal of a foreign operation, all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Corporation are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Corporation losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to non-controlling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

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(4) Standards to classify current and non-current assets and liabilities

The basis for current and non-current assets and liabilities for the real estate development business is based on the operating cycle. All the other items following the principles below:

Current assets are the assets held for trading purposes or expected to be realized or exhausted within one year. Any assets not classified as current are noncurrent assets. Current liabilities are the liabilities held for trading purposes or expected to be repaid within one year. Any liabilities not classified as current are non-current liabilities.

(5) Cash equivalents

Cash equivalents can be converted into a fixed amount of cash at any time. They are short-term, highly liquid investments with minimum changes in value. Bank overdrafts, a credit facility that can be immediately repaid, are part of the Company’s cash management. They are reported under cash and cash equivalents in the statement of cash flows, and as an item in short term loans in current liabilities on the balance sheet.

(6) Inventory and real estate for sale and real estate under construction

Inventories include raw materials, supplies, finished goods and work-in-process. Inventories are measured at the lower of cost or net realizable value. Comparisons between cost and net realizable value are made on an item-byitem basis, except for inventories of the same type. Net realizable value is the estimated selling price under normal circumstances, less estimated costs to complete and estimated costs to sell. The cost of inventories is calculated using the weighted-average method.

If a house is exchanged for land under a subdivision contract and is classified as land for sale, no gain or loss is recognized on the exchange and revenue is not recognized until the land is sold to the buyer.

(7) Investments accounted for under equity method

Investments accounted for using the equity method is investments in subsidiaries and associates.

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A. A subsidiary is an entity that is controlled by the Company. Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognized its share in the changes in the equity of subsidiaries.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of the subsidiary and the fair value of the consideration paid or received is recognized directly in equity.

The acquisition cost exceeding the amount of the share of the fair value of the subsidiary’s recognizable assets and liabilities received by the Company on its acquisition day is listed as goodwill. Such goodwill includes the investment’s book value which cannot be amortized. The amount exceeding the share of the fair value of the subsidiary’s recognizable assets and liabilities received by the Company on its acquisition day is listed as the current income.

When losing the control of its subsidiary, the Company measures its residual investment in the aforesaid subsidiary according to the fair value at the day that the Company loses its control of the subsidiary. The difference between the residual investment’s fair value as well as any disposal amount and the investment book value at the day that the Company loses its control is listed as the current profit or loss. In addition, the accounting treatment of all the amounts related to the subsidiary in question and recognized in the comprehensive income is same as the basis required to be complied with in the Company’s direct handling of related assets or liabilities.

When the Company transacts with its subsidiaries, profits and losses resulting from the transactions with the subsidiaries are recognized in the Company’s parent company only financial statements only to the extent of interests in the subsidiaries that are not owned by the Company.

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B. Investments in associates are reported.

Associates are the companies over which the Company has significant influence. Associates are not entitles of subsidiaries.

The investment in associates shall be recognized as costs under the equity method. After the asset acquisition, the book value shall change in line with the Company’s share of profits and losses, other comprehensive income and profit distributions. Meanwhile, the recognized equity value of the associates also changes in line with any increase or decrease in the Company’s shares.

If the Company does not subscribe to the new shares of associates on a prorata basis according to existing holdings, and any increase or decrease is incurred to the percentage of the Company’s holdings and hence net equity value of the investment, the adjustment shall be reflected with the change in capital surplus and according to the equity method. If the Company has not subscribed or acquired to new shares on a pro-rata basis and seen a reduction in its stake in the associates, the amounts recognized in other comprehensive income and the reclassification as a result of the values for the associates concerned should have the same basis for accounting treatment as if the assets or the liabilities of the associates were directly disposed. Any debit should be made from the capital surplus. However, if the capital surplus is insufficient for debits incurred by investments under the equity method, the debit may be drawn from retained earnings.

The residual investment of the previous associates should be measured with the fair value on the date of loss of significant influence. The delta between the sum of the fair value of the residual investment and the disposal amounts and the book value of the investment on the date of loss of significant control shall be recognized in the income statement during the period. Meanwhile, the values recognized in relation to the associates concerned in other comprehensive income shall have the same accounting basis as if the assets or the liabilities of the associates were directly disposed.

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Only the profits and losses resultant from upstream, downstream and lateral transactions with associates not relevant to the Company’s stake in the associates can be recognized in the parent company only financial statements.

(8) Property, plant and equipment

The property, plant and equipment are listed in accordance with cost less depreciation and accumulated impairment. Cost shall include the incremental cost able to be directly attributed to acquisition or asset implementation.

Straight-line method is applied to depreciation, by indicating the amount of an asset within the durable service life offset its cost and less its residual value. All the major components of the non-current assets shall be depreciated on a standalone basis. Depreciation is accrued in accordance with the following durable service years: building, 3-55 years; machinery equipment, 3-26 years; transportation and other equipments, 3-24 years.

Estimated durable service life, residual value and depreciation method shall be reviewed at the end of the reporting period; prospective application shall be made for any impact on estimation change.

The profit or loss incurred during disposition or obsolescence of property, plant and equipment shall be recognized in the income statement with the differential amount between the disposition price and asset book account.

(9) Investment property

Only if investment properties is attempted for earning rental or capital appreciation or both may it be classified as the investment properties. The investment properties shall be measured according to its original cost, including related transaction cost, and related interest capitalization shall be made during the construction period. Cost model shall be applied to follow-up measurement, to be measured by cost less the amounts of accumulated depreciation and accumulated impairment.

In case straight-line method is applied to depreciation and building depreciation

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accrued by 23-50 years.

Estimated durable service life, residual value and depreciation method shall be reviewed at the end of the reporting period; prospective application shall be made for any impact on estimation change.

The profit or loss incurred during disposition or obsolescence of property, plant and equipment shall be recognized in the income statement with the differential amount between the disposition price and asset book account.

(10) Lease

A. 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.

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.

When a lease includes both land and building elements, the Company assesses the classification of each element separately as a finance or an operating lease based on the assessment as to whether substantially all the risks and rewards incidental to ownership of each element have been transferred to the Company. The lease payments are allocated between the land and the building elements in proportion to the relative fair values of the leasehold interests in the land element and building element of the lease at the inception of a contract. If the allocation of the lease payments can be made reliably, each element is accounted for separately in accordance with its lease classification. When the lease payments cannot be allocated reliably between the land and building elements, the entire lease is generally classified as a finance lease unless it is clear that both elements are operating leases; in which case, the entire lease is classified as an operating lease.

B. The Company as lessee

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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 lowvalue 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. 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 parent company only 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 rightof-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments and variable lease payments which depend on an index or a rate. 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 future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the rightof-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 parent company only balance sheets.

(11) Impairment of non-financial assets

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The Company shall review the book amounts of tangible assets and intangible financial assets at the end of the reporting period to decide whether there is any impairment with such assets. In case it shows any impairment situation, the estimated recoverable amount of assets shall decide the recognized loss amount. In case there is no way of estimating the recoverable amount of an individual asset, the Company shall estimate the recoverable amount of the cashgenerating unit of the said asset. In case it can be amortized according to a reasonable and conforming basis, shared assets shall also be amortized to an individual cash product sector. Otherwise it shall be amortized to the minimal cash-generating unit group according to a reasonable and conforming basis. The recoverable amount shall be fair value less sales cost and its use value whichever is higher.

In case the recoverable amount of an asset or cash-generating unit is anticipated to be lower than the book amount, the book amount of the said asset or cashgenerating unit shall be adjusted and decreased to its recoverable amount; any impairment loss shall be immediately recognized to the current profit and loss. When any impairment loss reverses in a subsequent period, the book amount of asset or cash-generating unit shall be adjusted and increased to the estimated recoverable amount after revision, provided the book amount after increase shall be limited to the reasonable book amount under the situation when the said asset or cash-generating unit did not recognize an impairment loss in the past years (except for goodwill). The reversed impairment loss shall be immediately recognized to the current profit and loss.

(12) Employee benefits cost

The short-term employee benefits obligation is measured with the basis without discount, and shall be recognized as expenses when providing the related service. Concerning the anticipated payable amount concerning short-term cash bonus or a bonus sharing plan, if it is a current legal or prescribed obligation to be borne by a company due to the past service provided by employees, and the said obligation can be estimated in a reliable manner, such amount shall be listed as liability.

When an expense belongs to defined contribution plans, during the service period provided by employees, it is required to recognize the pension amount

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contributable as the current expense.

The cost of defined benefits (including service costs, net interests and remeasurements) shall be calculated according to the projected unit credit method. Service costs and net interests of the defined benefits liabilities shall be recognized as employee benefits expenses when incurred, or when the defined benefit plans is modified, shortened or repaid. The re-measurement shall be recognized as other comprehensive income and the retained earnings. There is not reclassification into profits and losses during subsequent periods.

Net defined benefit liabilities refer to the shortfall appropriation of the defined benefit retirement plan, whereas net defined benefit assets shall not exceed the plan’s refunded amount or may reduce the present value of the future appropriation amount.

(13) Financial Instrument

Financial assets and financial liabilities shall be recognized when the Company becomes a party of the said financial instrument clause.

Upon the original recognition of financial assets and financial liabilities, they shall be measured according to fair values. Upon the original recognition, concerning the acquired or distributed transaction cost directly attributable to financial assets and financial liabilities (except for the financial assets and financial liabilities classified as measurement according to fair value of profit and loss), it shall be increased or decreased from the fair values of the said financial assets or financial liabilities. The transaction costs of financial assets and financial liabilities directly attributable to the ones measured according to fair values through profit and loss shall be immediately recognized as profit and loss.

A. Financial assets

The convention trading of financial assets is recognized and removed by trading day accounting.

a. Type of measurement

Financial assets are classified into the following categories: financial

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assets at FVTPL, financial assets at amortized cost, investment in debt instruments measured at FVTOCI, and investments in equity instruments at FVTOCI.

• B) Financial asset at FVTPL

Financial assets measured at fair value through profit or loss are financial assets mandatorily measured at fair value through profit or loss and financial assets at fair value through profit or loss, designated as upon initial recognition. Financial assets mandatorily measured at fair value through profit or loss include investments in equity instruments that are not designated by the Company to be measured at fair value through other comprehensive income and investments in debt instruments that fail to meet the criteria as to be measured at amortized cost or at fair value through other comprehensive income.

Financial assets measured at fair value through profit or loss are measured at fair value. The dividends and interests generated are recognized in other income and interest income, respectively, and any gain or loss arising from remeasurement is recognized in other gains and losses.

• B) Measured at amortized cost

When a company after merger simultaneously meets the following two conditions in its investment in financial assets, the financial assets are classified as the ones carried at cost after amortization:

• a) The financial assets are held under a specific operation mode, in which the purpose of the mode is to hold the financial assets in order to collect contract cash flows.

• b) The cash flow generated on a specific date due to contract clauses is completely for the payment of the principal and the interest accrued from the outstanding principal amount.

Subsequent to initial recognition, financial assets measured at amortized cost are measured at amortized cost, which equals to

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carrying amount determined by the effective interest method less any impairment loss. Foreign exchange gains and losses are recognized in profit or loss.

Except for the two conditions below, the interest income is calculated by multiplying the effective interest rate by the total book value of the financial assets:

• a) The interest income of the purchased or originated credit-impaired financial assets is calculated by multiplying the credit-adjusted effective interest rate by the cost of amortized financial assets.

• b) The interest income of the financial assets which are not purchased or originated credit-impairment but subsequently become creditimpaired financial assets is calculated by multiplying the effective interest rate by the cost of amortized financial assets.

• C) Investment in debt instruments measured at FVTOCI

Debt instruments that meet the following two conditions are classified as financial assets at fair value through other comprehensive income:

• a) The debt instruments are held within a business model whose objective is to collect the contractual cash flows and to sell the financial assets; and

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

Investments in debt instruments at fair value through other comprehensive income are measured at fair value. Changes in the carrying amount of investments in debt instruments at fair value through other comprehensive income, such as interest revenue calculated using the effective interest method, gain (loss) on foreign exchange and impairment loss or gain on reversal, are recognized in profit or loss. Other changes in the carrying amount of such instruments are recognized in other comprehensive income and will be reclassified to profit or loss when such instruments are disposed of.

D) Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable

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election to

designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent considerati on 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, they will be transferred to retained earnings.

Dividends on these investments in equity instruments at FVTOCI 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

At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable) investments in debt instruments at fair value through other

comprehensive income, lease payments receivable due, and contract assets based on their expected credit losses on each balance sheet date.

The loss allowance for accounts receivable and lease payments receivable due is measured at an amount equal to lifetime expected credit losses. For financial assets at amortized cost, when the credit risk on the financial instrument has not increased significantly since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from possible default events of a financial instrument within 12 months after the reporting date. If, on the other hand, there has been a significant increase in credit risk since initial recognition, a loss allowance is recognized at an amount equal to expected credit loss resulting from all possible default events over the expected life of a financial instrument.

The expected credit loss is calculated according to the average weighted credit loss in which the risk rated ratio of default occurrence is used in

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calculation. The 12-month expected credit loss represents the credit loss expected to occur to the financial instruments within 12 months after their reporting day due to possible default. The expected credit loss in the duration period refers to the credit loss expected to occur to the financial instruments in the expected duration period due to possible default.

The Company recognizes an impairment loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at fair value through other comprehensive income, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial assets.

(14) Income recognition

After identifying the performance obligations of contracts with the customers, the Company allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are met.

(15) Borrowing costs

The cost of borrowing for the funds directly used to acquire, construct or produce the assets (which will reach the status ready for use or available for sale after a long period of time) can be treated as part of the asset costs, until the completion of almost all the necessary activities to get the assets ready for use or available for sale.

Other than the above, all the borrowing costs shall be recognized in the income statement during the current period.

(16) Income tax

Income tax expenses include income taxes during the period and deferred income taxes, and should be recognized as income taxes in the profit and loss income, except for the income taxes during the period and deferred income taxes recognized as other comprehensive incomes or directly as an equity item. A. Current tax

The current income tax is based on the taxed income of the said year.

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Since partial income and expense is taxable item or deductible of other years, or not attributing to taxable or deductible item in accordance with related tax laws, it causes the taxable income to differ from the reported net profit in the parent company only income statement. The related liabilities of the current income tax are calculated by the legislated or substantially legislated tax rate at the end of the reporting period. It is estimated by the income tax of the previous year, serving as the adjustment of the current income tax.

According to the provisions of Income Tax Law, The unallocated earnings of the Company adding 10% profit-seeking enterprise income tax shall be recognized as the current expense in the allocated earning year resolved in the shareholders’ meeting

B. Deferred tax

Deferred income tax is recognized by the temporary differential calculation generated from the taxation basis of book amounts of the recorded assets and liabilities and income through taxation calculation. Deferred income tax liabilities in general are recognized by the temporary differences of all future taxes payable. Deferred income tax assets are recognized by all likely future taxes less the deductible temporary difference in use.

Deferred income tax assets and deferred income tax liabilities may only be mutually offset when concurrently conforming to the following conditions: (1) a company has legal execution right to mutually offset the current income tax assets and income tax liabilities; and (2) deferred income tax assets and deferred income tax liabilities are levied by the same taxation authority towards the same tax payment major entity, or levied towards different tax payment corporate entities, yet each major entity attempts to, at each future period of the deferred income tax liabilities or assets pay-off or recovery of the major amount, pay off the current income tax liabilities and assets on net-amount basis, or concurrently realize assets and pay off liabilities.

The temporary differences in tax payables related to invested subsidiary company and associates are all recognized as deferred income tax liabilities,

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provided if the Company can control the time point of temporary difference reverse, and the said temporary differences may very likely not be reversed in the foreseeable future are excluded. The deferred income tax assets generated from the related deductible temporary differences to this kind of investment and equity can only be recognized in the gains very likely with sufficient taxable income used to realize the temporary differences, and be within the scope of reverse within the anticipated future.

The book amounts of deferred income tax assets shall be reviewed at the end of the reporting period, and adjust and decrease the book amounts for all or partial assets without sufficiently taxable income to serve it to recover. Concerning the ones originally not recognized deferred income tax assets, they shall also be reviewed at the end of the reporting period, and adjust and increase the book amounts for all or partial assets very likely to generate taxable income to serve it to recover.

The deferred income tax assets and liabilities are measured by expected liabilities pay-off or assets in realizing the current tax rate, while the said tax rate shall be based on the legislated or already substantially legislated tax rate at the end of the reporting period. The measurement of deferred income tax liabilities and assets shall reflect the tax consequences of a company generated in expected recovery or pay-off of the book amounts of its assets and liabilities at the end of the reporting period.

(17) Treasury stocks

The recovered issued stock shall be recognized as treasury stocks I accordance with the paid cost upon buy-back. In case the disposition price in disposing treasury stocks is higher than the book value, its difference shall be listed as capital surplus – treasury stocks trade; in case the disposition price in disposing treasury stocks is lower than the book value, its difference shall be offset the capital surplus generated from the trade of the treasury stocks of the same category of treasury stocks; in case of any deficit, it shall be debited to keep the surplus. Weighted average shall be applied to the book value of treasury stocks and be separately calculated in accordance with the recovery reasons.

Upon cancellation of treasury stocks, it shall be debited to keep the capital surplus – stock issue premium and share capital; in case its book value is higher

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than the total sum of par value and stock issue premium, its difference shall offset the capital surplus generated from the trade of the treasury stocks of the same category of treasury stocks; in case of any deficit, it shall be debited to offset retained earnings; in case the book value of treasury stocks is lower than the total amount of par value and stock issue premium, it shall be credited as the capital surplus generated from the trade of the treasury stocks of the same category of treasury stocks.

5. Citical Accounting Judgements, And Key Sources Of Estimation And Uncertainty

The Company upon applying the accounting policy stated in Note 4 provides related judgments, estimations and assumptions for the information acquired from other resources which are based on historical experience and other factors deemed crucial. The actual result may differ from what is estimated.

The Company shall be continuously reviewing estimations and basic assumptions. In case the revision of estimations would influence the current period, then the current recognition shall be revised in accounting estimations. In case the revision of accounting estimations would concurrently influence the current period and future period, then the estimations revision shall be recognized in both the current period and future period.

The following shows the information related to major assumptions made in the future, and other major sources of uncertainty at the end of the financial reporting period; the said assumptions and estimations have risks of causing book amounts of assets and liabilities to incur major adjustments in the following fiscal year.

(1) Evaluation of inventory and real estate for sale

Since inventory and real estate for sale shall be priced by cost and net cash realizable value whichever is lower, therefore the Company shall use judgments and estimations to determine the net cash realizable value at the end of the financial reporting period.

Since industry rapidly changes, the inventory and real estate for sale of the Company at the end of the financial reporting period due to the amounts of

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normal wear and tear, obsolescence, or without market selling price, offsets its cost to decrease to its net cash realizable value. The evaluation of this inventory and real estate for sale mainly based on the product demand in the future specific period as estimation basis; therefore, it may generate major changes.

• (2) Impairment evaluation of tangible assets and intangible assets (except for goodwill)

During the asset impairment evaluation process, the Company shall rely on subjective judgments and, with basis on asset use mode and rubber, real estate industry characteristics, determine parent company only cash flow asset durable years and future likely generated revenues and expenses of specific asset groups; any change in estimations from changes in economic status or corporate policies may likely cause major impairment in the future.

6. Cash and cash equivalents

Cash and cash equivalents
Cash and petty cash Cash in bank Cash equivalent Time deposits with maturity Commercial paper Total	Dec. 31, 2020 $ 516 751,326 － 600,325 $ 1,352,167	Dec. 31, 2019
		$ 579 375,265 300,300 224,006
		$ 900,150

7.Financial assets at fair value through profit or loss-current

Dec. 31, 2020 Current financial assets at fair value through profit or loss, designated as upon initial recognition Fund $ 72,280 Financial assets at fair value through other comprehensive income Dec. 31, 2020 Dec. 31, 2019 Equity instruments

8.Financial assets at fair value through other comprehensive income

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Stock of domestic listed (OTC) companies Stock of foreign listed (OTC) companies Stock of emerging companies Stock not classified to listed (OTC) and emerging companies Debt instruments Financial bond Plus (Less): adjustment of financial assets for transaction Total Current Non-current	$ 2,156,841 15,395 7,860 171,453 65,412 (2,511) $ 2,414,450 $ 2,315,451 $ 98,999	$ 2,004,030 － 7,860 174,107 － 47,090
		$ 2,233,087
		$ 2,123,296
		$ 109,791

• (1) The Company has signed a loan business trust contract with Chinatrust Commercial Bank, Co., Ltd. on July 1, 2010, by delivering the trust of partial listed (OTC) companies stocks to Chinatrust Commercial Bank, Co., Ltd. for management, use, while the beneficiary of the trust revenue was the Company, with the contract period ending on July 13, 2019.

• (2) The Company signed a loan business trust contract with MasterLink Securities Corporation on June 5, 2015, delivering the trust of partial listed (OTC) companies stocks to MasterLink Securities Corporation for management, use, while the beneficiary of the trust revenue was the Company, with the contract period ending till an initiative termination of the trustor. Up to December 31, 2020, the book amount of stock delivered for trust is NT$436,880thousand.

• (3) The Company signed a securities lending agreement with SinoPac Securities Corporation on April 10, 2020. Dividends and bonuses, being generated during the loan period should be repaid to the company. According to the agreement, when there is no loan transaction for more than three consecutive years, the agreement would be terminated. Up to December 31, 2020, the book amount of lending stock is NT$578,949 thousand.

• (4) Credit risk management for investments in debt instruments

Investments in debt instruments were classified as at FVTOCI ：

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Gross carrying amount Less: Allowance for impairment loss Amortized cost Adjustment to fair value Total	Dec. 31, 2020
	$ 65,412 (532)
	64,880 (951)
	$ 63,929

The company only invests in debt instruments that have low credit risk for the purpose of impairment assessment.The Company continuously tracks information to monitor changes in the credit risk of the debt instruments that it invests in, and also reviews other information such as material information about the debtor to assess whether there is a significant increase in credit risk since the investment was recognized.

The Company considers the historical default rates of each credit rating supplied by external rating agencies to estimate 12-month or lifetime expected credit losses.

The book amounts of investments in each credit level debt instrument and the applicable expected credit loss rates are as follows:

Dec. 31, 2020

	Dec. 31, 2020
Credit Rating Performing	Expected credit loss rate 0.12～4.8％	Through other comprehensive income measured at fair value of book amount
		$ 65,412

The allowance for impairment loss of investments in debt instruments at FVTOCI is as follows:

FVTOCI is as follows:
Balance, beginning of year New purchase in this period Balance, end of year Notes and accounts receivable ,net Notes receivable	For the Year Ended December 31, 2020 $ － 532 $ 532 Dec. 31, 2020 Dec. 31, 2019 $ 41,043 $ 35,437
		$ 35,437

9. Notes and accounts receivable ,net

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Allowance for doubtful accounts Net amount Accounts receivable Allowance for doubtful accounts Net amount	(278) $ 40,765 Dec. 31, 2020 $ 201,203 (2,534) $ 198,669	(355)
		$ 35,082
		Dec. 31, 2019
		$ 97,429 (4,568)
		$ 92,861

(1) The crediting period of the Company to a customer in principle shall be 30 days after the invoice date, while partial customers are credit time 30 days to 90 days. In addition to the actual credit impairment of individual customers, the Company makes reference to historical experience, considers the financial situation of individual customers and the industry, competitive advantage and prospects, and differentiates customers into different risk groups and incorporates forward-looking information. The expected loss rate of the Company recognizes the allowance loss.

(2)Aging analysis of accounts receivable of the Company is stated as follows:

Dec. 31, 2020

		Dec. 31, 2020
Non past due Past due less than 90 days Past due 91-180 days Past due 181-365 days More than 366 days past due Non past due Past due less than 90 days Past due 91-180 days Past due 181-365 days More than 366 days past due	Carrying amount of accounts receivable	Expected credit loss rate	Loss allowance for lifetime expected credit losses
	$ 222,822 16,642 2,295 195 292	1～2％ 2～5％ 10～20％ 50％ 100％ Dec. 31, 2019	$ 1,875 389 158 98 292
	$ 242,246		$ 2,812
	Carrying amount of accounts receivable	Expected credit loss rate	Loss allowance for lifetime expected credit losses
	$ 120,905 9,040 83 283 2,555	1～2％ 2～5％ 10～20％ 50％ 100％	$ 2,006 204 16 142 2,555
	$ 132,866		$ 4,923

(3) Movements of the loss allowance of notes and accounts receivable were as

follow:

2020

2019

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Balance, beginning of year $ 4,923 Expected credit impairment loss (gain) 285 Amount written off (2,396) Balance, end of year $ 2,812 10.Inventories Dec. 31, 2020 Raw materials $ 90,340 Work-in-process 19,727 Finished goods 109,379 Total $ 219,446 Thecost of sales related to inventory is as follows: 2020 Cost of inventories sold $ 684,142 Unamortized fixed manufacturing costs 10,756 Provision for (Reversal of) loss on inventories (2,268) Total $ 692,630	$ 6,479 (1,556) －
	$ 4,923
	Dec. 31, 2019
	$ 114,085 21,345 121,817
	$ 257,247
	2019
	$ 871,139 10,617 40,270
	$ 922,026

Rreversal of loss on inventories is due to the removal part of the inventory that has been listed for decline in price.

11. Real estate for sale and real estate under construction/Contract liabilities

11. Real estate for sa	le and real estate under c	le and real estate under c	onstruction/Contract liabilities	onstruction/Contract liabilities	onstruction/Contract liabilities
Bridge Upto Zenith Project at Banqiao－Real estate for sale Modesty HomeProject at Banqiao－Real estate for sale Legend River Project at Xindian－Real estate for sale Treasure Garden Project inTaichung City－Real estate for sale 55 TIMELESS Project in Taipei City－Real estate for sale La Bella Vita Project in Taichung City－Real estate for sale La Bella Vita Project in Taichung City－Real estate under construction	Real estate for sale and real estate under construction		Contract liabilities
	Dec. 31,2020	Dec. 31,2019	Dec. 31,2020	Dec. 31,2019	Jan. 1,2019
	$ 124,802 14,923 169,027 241,545 1,218,354 1,162,965 －	$ 225,599 14,923 227,243 241,545 1,635,694 － 1,960,691	$ － － － － 162,233 34,926 －	$ 47,251 － － － 123,136 － 225,311	$ － － － － 296,810 － 160,145
	$ 2,931,616	$ 4,305,695	$ 197,159	$ 395,698	$ 456,955

(1) The situation of already providing to serve as loan guarantees from financial

industries in detail is shown in Note 33.

(2) The detail of Information on interest capitalization refers to Note 25.

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12. Other financial assets

Other financial assets
Pledged time deposits Pre-sale housing project trust funds Time deposits with maturity over three months Total Current Non-current Interest rate range %	Dec. 31, 2020 $ 20,000 － 115,653 $ 135,653 $ 115,653 $ 20,000 0.2～2.5	Dec. 31, 2019
		$ 20,000 165,214 －
		$ 185,214
		$ 165,214
		$ 20,000
		0.25～1.12

The pledged time deposit serves as guaranty for logistics business and it is shown in Note 33.

13. Investments accounted for using equity method

Investments in subsidiaries Investments in associates Total	Dec. 31, 2020 $ 1,046,657 101,966 $ 1,148,623	Dec. 31, 2019
		$ 1,095,870 77,564
		$ 1,173,434

(1) The investment of subsidiaries is listed as follows:

Name of Investee	Book	value	The percentage of ownership interest and voting right directly held bythe Company	The percentage of ownership interest and voting right directly held bythe Company
	Dec. 31, 2020	Dec. 31, 2019 $ 647,674 (4,069) 448,196 － 1,091,801 4,069 $ 1,095,870	Dec. 31, 2020	Dec. 31, 2019
Unlisted (OTC) companies Ban Chien Development Co., Ltd. (Taiwan) Da-Guan Recreation Company (Taiwan) FRG US Corp. (San Francisco) KINGSHALE INDUSTRIAL LIMITED (Hong Kong) Subtotal Add :Credit balance of investments accounted for using equity method transfer to other liabilities Total	$ 622,046 － 424,611 －		100.00 － 100.00 99.99	100.00 80.00 100.00 99.99
	1,046,657 －
	$ 1,046,657

A. The Company invests in the development project of 950 Market Street in

San Francisco, USA with Continental Construction Group, the

establishment of FRG US Corp. was approved by the board of directors in

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2017, with an investment limit of USD 20,000 thousand. Its main

businesses are real estate investment, development and rental and sales of premises.

As of December 31, 2020 and 2019, FRG has remitted Investment fund of NT$461,349 thousand (USD15,052 thousand) and NT$460,142 thousand (USD15,012 thousand) respectively.

B. Da-Guan Recreation Company has passed the dissolution and liquidation at the temporary shareholders meeting on October 22, 2020.

(2) The investment of associates is listed as follows:

Name of Investee	Book	value	The percentage of ownership interest and voting right directly held by the Company	The percentage of ownership interest and voting right directly held by the Company
	Dec. 31, 2020	Dec. 31, 2019 $ 38,843 32,009 6,712 $ 77,564	Dec. 31, 2020	Dec. 31, 2019
Unlisted (OTC) companies Formosan Construction Corp. (Taiwan) Fenghe Development Co., Ltd. (Taiwan) Rueifu Development Co., Ltd. (Taiwan) Total	$ 62,048 31,655 8,263		26.20 39.90 48.26	26.20 39.90 48.26
	$ 101,966

(3) Information about associates that are not individually material was as follows

The Company’s share of: Net profit (loss) from continuing operations for the year Other comprehensive income Total comprehensive profit (loss)	2020 $ 3,082 21,320 $ 24,402	2019
		$ 7,276 10,074
		$ 17,350

(4) The investment gains and losses and other comprehensive income for the subsidiaries and associates under the equity method have been recognized according to their audited financials.

1. Property, plant and equipment

Item	For the Year Ended December 31,2020
	Balance, Beginning of Year Additions Disposals Reclassificatio n Balance, End of Year

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Cost Land $ 444,026 Building 696,889 Machinery equipment 966,896 Transportation equipment 19,220 Other equipment 232,306 Total 2,359,337 Accumulated depreciation & impairment Building 463,554 Machinery equipment 818,616 Transportation equipment 18,599 Other equipment 166,983 Total 1,467,752 Net $ 891,585 Item Balance, Beginning of Year Cost Land $ 444,026 Building 696,889 Machinery equipment 1,045,781 Transportation equipment 22,317 Other equipment 226,097 Total 2,435,110 Accumulated depreciation & impairment Building 446,727 Machinery equipment 875,684 Transportation equipment 21,004 Other equipment 149,491 Total 1,492,906 Net $ 942,204	$ 444,026 696,889 966,896 19,220 232,306	$ － － 3,684 100 4,334	$ － (120,524) (180,207) (5,461) (83,754)	$ － 2,853 － － －	$ 444,026 579,218 790,373 13,859 152,886
	2,359,337	8,118	(389,946)	2,853	1,980,362
		14,092 20,419 214 16,539	(120,524) (180,207) (5,461) (83,754)	2,853 － － －	359,975 658,828 13,352 99,768
Building Machinery equipment Transportation equipment Other equipment Total Net Item
	1,467,752	$ 51,264	$ (389,946)	$ 2,853	1,131,923
	$ 891,585				$ 848,439
	Balance, Beginning of Year	Additions	Disposals	Reclassificatio n	Balance, End of Year
	$ 444,026 696,889 1,045,781 22,317 226,097	$ － － 3,001 － 8,752	$ － － (81,886) (3,097) (2,543)	$ － － － － －	$ 444,026 696,889 966,896 19,220 232,306
	2,435,110	11,753	(87,526)	－	2,359,337
		16,827 24,662 549 20,035	－ (81,730) (2,954) (2,543)	－ － － －	463,554 818,616 18,599 166,983
Building Machinery equipment Transportation equipment Other equipment Total Net
	1,492,906	$ 62,073	$ (87,227)	$ －	1,467,752
	$ 942,204				$ 891,585

(1) The book values of land are adjusted with basis on the government published

land value of 1975, 1979, 1980 and 1981 as well as current governmentdeclared land value of 1992 and 2000; plant buildings and various equipments are re-evaluated in accordance with the commodity price indices in 1973 and 1980. Besides, the original revaluation increments are adjusted in relation to the tax rates of land value increment in compliance with land tax laws in January 2005.

(2) The situation of pledge & guarantee in detail is shown in Note 33.

15. Lease

(1) Right-of-use assets

For the Year Ended December 31, 2020 Balance, Balance, Additions Disposals Beginning End of Year

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Cost Building Transportation equipment Total Accumulated depreciation & impairment Building Transportation equipment Total Net Cost Building Transportation equipment Total Accumulated depreciation & impairment Building Transportation equipment Total Net	of Year
	$ 51,552 1,599	$ － －	$ － (1,599)	$ 51,552 －
	53,151	－	(1,599)	51,552
	5,155 1,279	5,155 320	－ (1,599)	10,310 －
	$ 6,434	$ 5,475	$ (1,599)	$ 10,310
	$ 46,717	For the Year Ended	December 31,2019	$ 41,242
	Balance, Beginning of Year	Additions	Disposals	Balance, End of Year
	$ 51,552 1,599	$ － －	$ － －	$ 51,552 1,599
	53,151	－	－	53,151
	－ －	5,155 1,279	－ －	5,155 1,279
	$ －	$ 6,434	$ －	$ 6,434
	$ 53,151			$ 46,717

(2) Lease liabilities

For the Year Ended December 31, 2020

Less 1 year Over 1 years Total	Future minimum lease payments	Interest	Present value of minimum lease payments
	$ 5,440 38,077	$ 426 1,403	$ 5,014 36,674
	$ 43,517	$ 1,829	$ 41,688

Range of discount rate for lease liabilities were as 1.09 ％ .

For the Year Ended December 31, 2019

Less 1 year	Future minimum lease payments	Interest	Present value of minimum lease payments
	$ 5,762	$ 481	$ 5,281

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Over 1 years Total	43,517	1,829 $ 2,310	41,688
	$ 49,279		$ 46,969

Range of discount rate for lease liabilities were as 1.09 ％ .

(3) Other lease information

Other lease information
Expenses relating to short-term leases Total cash (outflow) for all lease agreements	2020 $ 136 $ (5,417)	2019
		$ 156
		$ (6,338)

(4)Please see note 32 for the status of transactions with related parties.

16. Investment property, net

Item		For	the Year Ended	December 31,2020	December 31,2020
	Balance, Beginning of Year	Additions	Disposals	Impairment	Reclassificati on	Balance, End of Year
	$ 1,091,843 2,654,296	$ 8,608 1,876	$ (1,589) －	$ － －	$ － (2,853)	$ 1,098,862 2,653,319
	3,746,139	10,484	(1,589)	－	(2,853)	3,752,181
Land Building Total Net Fair value	224,160 758,679		－ －	3,477 －	－ (2,853)	227,637 810,967
	982,839	$ 55,141	$ －	$ 3,477	$ (2,853)	1,038,604
	$ 2,763,300					$ 2,713,577
	$ 4,292,326					$ 4,133,740

Item		For the Year Ended December 31,2019	For the Year Ended December 31,2019	For the Year Ended December 31,2019
	Balance, Beginning of Year	Additions	Disposals	Impairment	Balance, End of Year
	$ 1,092,155 2,654,296	$ － －	$ (312) －	$ － －	$ 1,091,843 2,654,296
	3,746,451	－	(312)	－	3,746,139
		－ 55,141	－ －	1,494 －	224,160 758,679
Land Building Total Net Fair value	222,666 703,538
	926,204	$ 55,141	$ －	$ 1,494	982,839
	$ 2,820,247				$ 2,763,300
	$ 4,130,385				$ 4,292,326

(1) Details of land:

Details of land:
Oiashui Section, Longtan Dahu Section, Miaoli Nankan Section, Taoyuan	Dec. 31, 2020		Dec. 31, 2019
	Ping	Cost	Ping	Cost
	14,447 230,253 14,696	$ 42,643 473,971 265,779	14,381 230,253 15,395	$ 34,036 473,971 267,367

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Xinban Section, Banqiao 140 Zhuangjing Section, Xindian 53 Total	311,775 140 4,694 53 $ 1,098,862	311,775 4,694
		$ 1,091,843

• (2) The Company leases the real estate held for investment, with the lease period as January 1, 2008 to December 31, 2028. Provisions for the lessee to adjust the rent based on market rents when exercising the renewal rights. The lessee does not have a preferential purchase right for the real property at the end of the lease term.

The maturity analysis of lease payments receivable under operating leases of investment properties as of was as follows:

leases of investment properties as	of was as follows:
Year 1 Year 2 Year 3 Year 4 Year 5 Over 5 years Total	Dec. 31, 2020 $ 175,120 85,068 65,873 40,924 22,591 24,207 $ 413,783	Dec. 31, 2019
		$ 163,617 102,510 54,012 46,623 23,134 37,277
		$ 427,173

• (3) As of December 31, 2020 and December 31, 2019, the book value of the investment properties let out stood at NT$2,409,818 thousand and NT$2,463,083 thousand , respectively. The rent incomes during 2020 and 2019 totaled NT$189,786 thousand and NT$183,400 thousand, respectively.

• (4) The fair value of investment properties is based on the transaction prices of adjacent assets, the economic environment and changes in the current land values published by the Taiwanese government. The assessment is based on market comparators and discounted cash flows. It is Level 3 fair value according to IFRS.

• (5) As of December 31, 2020 and 2019, the land at Dahu Section of Miaoli accumulated losses of reduction were NT$227,637 thousand and NT$224,160 thousand respectively.

• (6) Details of the farm land lots registered in others’ names due to legal

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restrictions:

restrictions:
Oiashui Section, Longtan Dahu Section, Miaoli Nankan Section, Taoyuan Total	Dec. 31, 2020 $ 35,100 94,241 17,631 $ 146,972	Dec. 31, 2019
		$ 26,493 94,241 19,219
		$ 139,953

For the security measures of the aforementioned pieces of farm land, the Company has already periodically checked relevant land transcripts and dispatched its personnel to conduct investigation at any time in order to keep abreast of the use of the land. Part of the land has been pledged to the Company. Please see note 32 (2) C for the status of transactions with related parties.

• (7) The situation of already providing to serve as loan guarantees from financial industries in detail is shown in Note 33.

17. Short-term borrowings

Short-term borrowings
Bank unsecured borrowings Bank secured borrowings - Hua Nan Bank Total Interest rate range %	Dec. 31, 2020 $ 350,000 － $ 350,000 0.72～1.00	Dec. 31, 2019
		$ 860,000 －
		$ 860,000
		0.91～1.15

(1) Concerning the residential building at Xitun District, Taichung City constructed jointly by the Company and Continental Engineering Corporation, a credit contract was signed with Huanan Commercial Bank on December 9, 2014, by providing the land of Huiguo Section, Taichung City to serve as guarantee, with total credit amount as NT$950,000 thousand and the borrowing has been totally cleared in advance in November, 2019.

• (2) The situation of pledge & guarantee in detail is shown in Note 33.

18. Short-term notes and bills payable

Short-term notes and bills payable
Commercial paper payable Less: Unamortized discount	Dec. 31, 2020 $ 10,000 (8)	Dec. 31, 2019
		$ 400,000 (452)

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Net amount Interest rate range%	$ 9,992 $ 399,548 0.36 0.63～0.94

The situation of pledge & guarantee in detail is shown in Note 33.

19. Employee pensions

(1) Defined contribution plans

The employee retirement plan established by the Company in accordance with “Labor Pension Act” belongs to a defined contribution plans. Concerning the above, the Company would contribute 6% of the monthly salaries of employees to the exclusive individual accounts of Labor Insurance Bureau. In accordance with the above related regulations, the pension costs recognized as expenses in the parent company only comprehensive income statement in 2020 and January 1 to December 31, 2019 are respectively NT$6,176 thousand and NT$6,364 thousand.

(2) Defined benefit plans

A. The employee retirement plan established by the Company in accordance with “Labor Standard Act” is a defined benefit plans. In accordance with the regulations of the said plan, the employee pensions are calculated by service years and the average wage of six months prior to retirement. For the above, the Company would contribute 2% of the total employee salaries as employee pension fund, to the Supervisory Committee of Workers’ Pension Preparation Fund to be deposited into an exclusive account of Bank of Taiwan. Before the end of year, if it is estimated the balance in the exclusive account is insufficient to pay the estimated labors conforming to retirement conditions in the following year, the Company would contribute the differential amount at once before the end of March in the following year. The retired pension cost amount in parent company only comprehensive income statement listed to expense related to defined benefit plan is as follows:

2020 2019

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Service cost Net interest cost (income) List to (profit) loss Re-measurements Plan assets returns (excl. amount that covered in net interest income) Actuarial profit (loss)-Change of the demographic assumption Actuarial profit (loss)-Change of the financial assumption Actuarial profit (loss)- Adjustment with experience Listed to other comprehensive income	$ － 27 $ 27 81 1 (268) 654 $ 468	$ 64 66
		$ 130
		156 2 (192) 2,576
		$ 2,542

The details of the various costs and expenses recognized in profit or loss are

as follows:

as follows:
Operating costs Operating expenses Total	2020 $ 27 －	2019
		$ 130 －
	$ 27	$ 130

The amount listed in the parent company only balance sheet for the

obligation occurring from the defined benefit plan is as follows

Defined benefit obligation present value Plan asset fair value Net defined benefit liability (assets)	Dec. 31, 2020 $ 5,866 (2,796) $ 3,070	Dec. 31, 2019
		$ 6,206 (2,518)
		$ 3,688

The changed of defined benefit obligation present value of this Company is as follows:

as follows:
Beginning defined benefit obligation Service cost current period Interest expense	2020 $ 6,206 － 47	2019
		$ 10,248 64 102

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Benefits paid from plan assets － Re-measurements Actuarial (profit) loss- Change of the demographic assumption (1) Actuarial (profit) loss- Change of the financial assumption 268 Actuarial (profit) loss- Adjustment with experience (654) Ending defined benefit obligation $ 5,866	(1,822) (2) 192 (2,576)
	$ 6,206

The changed of plan asset fair value of this Company is as follows:

Beginning plan asset fair value Interest income Re-measurements Plan assets returns (excl. amount that covered in net interest income) Contribution by employer Redemption or curtailments payment Ending plan asset fair value	2020 $ 2,518 20 81 177 － $ 2,796	2019
		$ 3,520 36 156 628 (1,822)
		$ 2,518

The assets of defined benefits held by our company are deposited in financial institutions and invested in equity securities in Taiwan and overseas within the percentages and absolute amounts stipulated by the Bank of Taiwan for the discretionary investment of the funds for specific years. The operation of the funds is under the oversight by the Labor Pension fund Supervisory Committee. The minimum yields on the funds p.a. shall not fall below the two-year time deposit rates offered by local banks. Any insufficiency shall be made up by the national treasury following the approval from competent authorities.

Classification of Fair Values for Planned Assets

		2020		2019
Cash and cash equivalents	$	2,796	$	2,518
The main assumptions of the	Company’s actuarial valuation are as follows:
		Dec. 31, 2020		Dec. 31, 2019
Discount rate		0.35％		0.75％

B. The main assumptions of the Company’s actuarial valuation are as follows:

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Expected increase in future salaries

2.00 ％

==> picture [34 x 11] intentionally omitted <==

The Company is exposed to the following risks due to the pension system stipulated by the Labor Standards Act:

• a. The impact of the book value of the retirement pensions is as follows for any delta of each 0.25 basis points between the discount rate (or the expected increase in future salaries) and management estimates in 2020 and 2019.

Effect on present value of defined benefit obligation

and 2019.	Effect on present value of defined benefit obligation	sent value of fit obligation
Dec. 31, 2020 Discount rate Expected increase in future salaries Dec. 31, 2019 Discount rate Expected increase in future salaries	Actuarial assumption increased 0.25％ Actuarial assumption decreased 0.25％ $ (170) $ 177 $ 173 $ (168) Effect on present value of defined benefit obligation	Actuarial assumption decreased 0.25％
		$ 177
		$ (168)
	Actuarial assumption increased 0.25％ $ (192) $ 197	Actuarial assumption decreased 0.25％
		$ 200
		$ (190)

Since actuarial assumptions may be mutually related, the possibility of change in an only one assumption is not high. Therefore, the above sensitivity analysis may be unable to reflect the actual change situation of the current value of defined benefits. Besides, in the above sensitivity analysis, the actuary of current value of defined benefits obligations at the end of the reporting period applies projected unit credit method, measured by the same basis of defined benefits liabilities listed in the parent company only balance sheet.

b. The Company expects to contribute the amount of NT$146 thousand to the defined benefit plans within one year after December 31, 2020; the

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weighted average duration of defined benefits obligations is 11 years.

20. Equity

• (1) Share capital - common stock

Share capital - common stock
Authorized capital Issued capital	Dec. 31, 2020 $ 6,800,000 $ 3,423,260	Dec. 31, 2019
		$ 6,800,000
		$ 3,500,000

The face value of the issued ordinary shares is NT$10 per share. Each share has one vote and the right to dividends.

Treasury stocks of NT$76,740 thousand and NT$200,000 thousand were cancelled from January 1 to December 31, 2020 and 2019, respectively.

(2) Capital surplus

Capital surplus
Premium on capital Conversion premium of corporate bonds Gains of disposal of assets Equity net value change of associates by equity method Total	Dec. 31, 2020 $ 727 450,718 1,238 3,658 $ 456,341	Dec. 31, 2019
		$ 743 460,824 1,238 3,658
		$ 466,463

In accordance with regulations in laws, the capital surplus shall not be used except for covering company losses, but concerning the overage obtained from issued stock over par value (including issuance of common stock above par value, the premium on capital stock of stock issued for merge, corporate bond conversion premium and treasury stocks transaction, etc.) and capital surplus generated from income of receiving gifts. In the absence of accumulated losses, the Company may issue cash dividends or bonus shares to existing shareholders on a pro rata basis. Per the requirements of the Securities and Exchange Act, the appropriation of capital surplus to share capital is limited to 10% of the paid-in capital.

(3) Retained earnings

A.In accordance with the Company’s Articles of Incorporation,any earnings

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during the year should be used to pay all the due taxes and make up the prior losses before distributions as follows:

• a. Provide 10% legal reserve, but it is not applicable to the case where the legal reserve already attains the total capital amount.

• b. If necessary, in accordance with regulations of laws, allowance or reversal of special reserve shall be provided.

• c. The earnings during the year available for distributions, along with the undistributed earnings from previous years, shall be distributed according to the proposal from the board. The distribution to shareholders shall be no less than 5% of the distributable accumulated earnings and shall be approved by the shareholders’ meetings.

The enterprise life cycle of the Company belongs to “maturity period”. However, in order to pursue business sustainable development, respond to the future market demands and consider the future capital expenditure budget of the Company as well as maintenance stable dividend allocation, in which cash dividend shall be no lower than 10% of the total amount of shareholders’ dividend. But in case of fund requirements concerning any major investment plan, major operation change matters and productivity expansion or other major capital expenditures, etc., the board may propose it to be changed to distribution in stock dividend form in whole, and actions may be taken after a report to and consent from the shareholders’ meeting

B. Legal reserve

Per the regulations set forth by the Company Act, the Company shall appropriate 10% of after-tax earnings as the legal reserve, until the amount of legal reserve is equivalent to that of paid-in capital, or use the earnings to reverse prior losses. In the absence of losses, the portion of reserves exceeding 25% of the paid-in capital can be used to issue cash dividends or bonus shares.

C. Special reserve

Dec. 31, 2020 Dec. 31, 2019

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The number of appropriation arising from the first adoption of IFRSs Decrease in other equity items Total	$ 304,771 － $ 304,771	$ 314,027 44,610 $ 358,637

Official Letter “Securities Issue” No. 1010012865 and No. 1010047490 released by the Financial Supervisory Commission and the IFRS standards provide answers to the questions regarding the appropriation, utilization and reversal of special reserve. If there is any reversal of the reduction of shareholders’ equity, the reserved portion may be used for earnings distributions.

• D. The Company’s earnings distributions for 2019 and 2018 were approved by

the annual general meetings on June 12, 2020 and June 5, 2019, respectively, as proposed by the board. However, the payout ratio has changed due to the cancelation of 7,674 thousand and 20,000 thousand treasury stocks, respectively. The cash dividend per share for 2019 and 2018 was NT$0.8 and NT$0.68 , respectively.

Legal reserve Cash dividend Total	2019	2019	2018	2018
	Amount	Dividend per share (TWD)	Amount	Dividend per share (TWD)
	$ 53,895 280,000	$ 0.8	$ 21,581 238,000	$ 0.68
	$ 333,895		$ 259,581

• E. The status for the board of the Company proposed to approve the 2020

earnings allocation proposal on March 19, 2021 is as follows:

2020

Legal reserve Cash dividend Total	Amount $ 86,173 513,489 $ 599,622	Dividend per share (TWD)
		$ 1.5

The Company’s earnings distribution for 2020 is still pending for the approval from the annual general meeting in 2021.

• (4) Other equity interest-

Exchange Unrealized gains Total differences on (losses) from

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translation of foreign financial statements financial assets measured at fair value through other comprehensive income Balance on Jan. 1, 2020 $ (7,448) $ 174,790 Exchange differences on translation of foreign financial statements (19,210) － Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income － (55,324) Share of loss (profit) of associates accounted for using equity method － (41,240) Disposal of financial assets at fair value through other comprehensive income - equity instrument － 5,785 Balance on Dec. 31, 2020 $ (26,658) $ 84,011 Exchange differences on translation of foreign financial statements Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance on Jan. 1, 2019 $ 1,392 $ (46,003) Exchange differences on translation of foreign financial statements (8,840) － Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income － 71,383 Share of loss (profit) of associates accounted for using equity method － 119,490 Disposal of financial assets at fair value through other comprehensive income - equity instrument － 29,920 Balance on Dec. 31, 2019 $ (7,448) $ 174,790 (5) Treasury stocks Number of shares (thousand shares) Balance on Jan. 1, 2019 17,548 $ Acquired in this period 2,452 Cancellation in this period (20,000) Balance of Dec. 31, 2019 － Acquired in this period 7,674 Cancellation in this period (7,674) Balance of Dec. 31, 2020 － $	translation of foreign financial statements	translation of foreign financial statements	financial assets measured at fair value through other comprehensive income	financial assets measured at fair value through other comprehensive income
	$ (7,448) (19,210) － － －		$ 174,790 － (55,324) (41,240) 5,785		$ 167,342 (19,210) (55,324) (41,240) 5,785
	$ (26,658)		$ 84,011		$ 57,353
	Exchange differences on translation of foreign financial statements		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income		Total
	$ 1,392 (8,840) － － －		$ (46,003) － 71,383 119,490 29,920		$ (44,611) (8,840) 71,383 119,490 29,920
	$ (7,448)		$ 174,790		$ 167,342
		Number of shares (thousand shares) 17,548 2,452 (20,000) － 7,674 (7,674) －			Amount
				$	261,373 38,317 (299,690)
					－
					129,618 (129,618)
				$	－

A. The Company in accordance with the regulations of Article 28-2 of Securities Exchange Act, in order to maintain company credit and

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shareholders’ equity, purchased back treasury stocks through resolutions of the board.

• B. The quantity percentage of a company in purchase back outstanding shares in accordance with the regulations of Securities Exchange Act shall not exceed 10% of the total number of shares issued by a company, and the total amount of purchase shares shall not exceed the retained earnings adding the premium of issued shares and the amount of realized capital surplus.

• C. The treasury stocks held by The Company in accordance with the regulations of Securities Exchange Act shall not be pledged, nor shall it enjoy such rights as dividend allocation and voting right, etc.

21. Operating revenue

Operating revenue
Net sales revenue Construction revenue Rental and logistics revenue Total	2020 $ 844,836 2,206,748 230,731 $ 3,282,315	2019
		$ 960,898 1,518,732 222,207
		$ 2,701,837

The amount of revenue recognized at the beginning from the contractual liabilities for the period from January 1 to December 31, 2020 and 2019 are respectively NT$384,715 thousand and NT$296,810 thousand.

22. Operating costs

Operating costs
Cost of sales Cost of construction sales Cost of rental and logistics Total Other income	2020 $ 692,630 1,430,062 97,276 $ 2,219,968 2020	2019
		$ 922,026 1,026,264 91,799
		$ 2,040,089
		2019

23. Other income

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24. 25.	Dividend income Gain on disposal of investments Other Total Other gains and losses Loss (gain) on disposal of property, plant and equipment Loss (gain) on disposal of investment properties Loss (gain) on disposal of investments Foreign currency exchange gain (loss) Net (gain) loss on financial assets and liabilities at fair value through profit or loss Miscellaneous expense Impairment loss Total Finance costs Interest of bank loan Interest of lease liabilities Less: capitalized interest Total Interest rate (%) of capitalized interest	$ 110,983 4,069 5,482 $ 120,534 2020 $ － (1,589) － (40,142) 1,870 (898) (3,477) $ (44,236) 2020 $ 7,746 481 － $ 8,227 －	$ 115,727 － 8,177
			$ 123,904
			2019
			$ 388 696 (29,998) (2,641) 1,240 (2,481) (1,494)
			$ (34,290)
			2019
			$ 23,026 544 (3,940)
			$ 19,630
			2.07

26. Extra information on the items with the expense characteristics

The employee benefits, depreciation, depletion and amortization expenses incurred in this period are summarized below:

summarized below:
2020	2019
Operating costs Operating expense Total	Operating costs Operating expense Total

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Salary expense Labor and health insurance expenses Pension expense Board compensation Other Personnel expense Personnel expense Depreciation expense	$ 90,220 6,568 4,155 － 3,006	$ 49,354 4,197 2,048 27,495 1,549	$ 139,574 10,765 6,203 27,495 4,555	$ 92,622 7,048 4,440 － 2,649	$ 46,080 4,179 2,054 22,610 1,255	$ 138,702 11,227 6,494 22,610 3,904
	$ 103,949	$ 84,643	$ 188,592	$ 106,759	$ 76,178	$ 182,937
	$ 94,302	$ 17,578	$ 111,880	$ 102,837	$ 20,811	$ 123,648

As of December 31, 2020 and 2019, the Company had 196 and 202 employees, respectively. There were 7 non-employee directors and 7 non-employee directors, respectively.

The Company’s average employee benefit expense and the Company’s average salary expense for the year ended December 31, 2020 and 2019 were NT$852 thousand, NT$738 thousand, NT$822 thousand, NT$711 thousand, respectively. The Company’s average salary expense adjustment for the year ended December 31, 2019 increased by 4%.

The Company's salary compensation policy is as follows:

• (1) Employee Salary: Employee salary mainly includes basic salary (including basic salary and meal allowance), performance bonus, annual salary adjustment for individual performance and year-end bonus. The salary is approved with reference to the market rate of the industry, job category, academic experience, professional knowledge and skills, and professional years of experience, and is better than the average market rate of the industry.

• (2)The compensation policy of the manager is based on the usual industry standard, and takes into account the reasonableness of the relationship with personal performance, the company's operating performance and future risks.The proposal made by the Salary and Compensation Committee will be implemented after the board of directors has approved it.

• (3) Personal performance bonus: The bonus is paid according to the company's operational performance and employees' personal performance.

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• (4)Annual salary adjustment: The Company conducts annual salary adjustment with reference to the overall economic environment, operating profit, employee performance assessment results, and long-term development of the employees, taking into account the salary level of the industry and the overall salary adjustment status of the industry.

Correlation between operating performance and employee compensation:

The Company shall set aside no less than 1% of the Company's annual profit as employee compensation, which shall be distributed in shares or cash as determined by the Board of Directors, and shall be paid to employees of subordinate companies under the conditions set by the Board of Directors; the Company shall set aside no more than 2% of the Company's annual profit as director compensation as determined by the Board of Directors. The remuneration to employees and remuneration to directors shall be reported to the shareholders' meeting. If the Company has an accumulated deficit, the Company shall reserve the amount to cover the deficit in advance, and then allocate the remuneration to employees and directors in accordance with the aforementioned ratio.

The remuneration of directors and other key management personnel is determined by reference to the industry standard, taking into account the reasonableness of the relationship with individual performance, the Company's operating performance and future risks. The proposal made by the Salary and Compensation Committee will be implemented after the board of directors has approved it.

The compensations to employees and the remunerations to directors and supervisors determined by the board on March 19, 2021 for the year 2020 and on March 20, 2020 for the year 2019 are as follows:

Compensations to employees Remunerations to directors and supervisors	2020	2020	2019	2019
	Amount	Estimated proportion	Amount	Estimated proportion
	$ 9,491 9,491	1％ 1％	$ 5,613 5,613	1％ 1％

The Company shall allocate from annual profits no less than 1% for compensations to employees and no more than 2% for remunerations to directors

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and supervisors. However, annual profits should be prioritized for the reversal of cumulated losses if any.

The abovementioned compensations to employees may be paid with cash or shares. The employees include the employees of subsidiaries which meet the criteria set by the board. However, the remunerations to directors and supervisors shall be paid in cash only.

Any changes to the published parent company only financial statements shall be treated as changes to accounting estimates and adjusted during the following year. There was no difference between the distributed amount of compensations to employees and remunerations to directors and supervisors for 2019 and the recognized amount on the parent company only financial statements for 2019.

The annual general meeting of the Company on May 10, 2019 approved the distributions of bonuses to employees at NT$2,661 thousand and the remunerations to directors and supervisors at NT$2,661 thousand for 2018. There was no difference between the distributed amount and the recognized amount on the parent company only financial statements for 2018.

Please refer to the details published on TSE Market Observation Post System for the information regarding the decisions by the board and annual general meetings on compensations to employees and remunerations to directors and supervisors.

27. Income tax

• (1) Income tax recognized in profit & loss

The income tax expense listed as profit & loss is composed of as follows:

Income tax current period: Occurred in current year Additionally imposed undistributed earnings Paid for land value increment tax Deferred income tax: Occurred in current year Income tax expense listed as profit & loss	2020 $ － (11,367) (29,274) (40,641) 12,272 $ (28,369)	2019
		$ 1,265 － (31,289)
		(30,024) 18,971
		$ (11,053)

The accounting benefit and income tax expense of current period are adjusted

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as follows:
		2020		2019
Income tax calculated according to
the regulated tax rate of before-	$	186,017	$	110,002
tax net income
The effect of tax in reconciliation
items of income tax:
When determining taxable income,
adjustments should be made to		(11,896)		(10,679)
increase (decrease)
Exemption of domestic securities transaction income		798		303
Tax-exempt income		(174,919)		(99,625)
Previous years adjustments		－		(1,266)
Income tax expense (gain) current period	$	－	$	(1,265)
(2) Income tax expense recognized in other		comprehensive	income
		2020		2019
Remeasurement of defined benefit plans	$	(1,172)	$	(508)
Unrealized loss on valuation of
investments in equity instruments measured at fair value through		(671)		51
other comprehensive income
Exchange differences on translation of foreign financial statements		4,803		2,210
Unrealized loss on valuation of
investments in debt instruments measured at fair value through		200		(3,914)
other comprehensive income
Income tax related to other comprehensive income	$	3,160	$	(2,161)

(3) Deferred tax assets and liabilities

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The analysis on deferred income tax assets and liabilities in balance sheet is as

follows:

follows:
Net defined benefit liability Unrealized loss on valuation of investments in equity instruments measured at fair value through other comprehensive income Exchange differences on translation of foreign financial statements Unrealized loss on valuation of investments in debt instruments measured at fair value through other comprehensive income Unrealized exchange loss Other Tax loss carry forwards Investment credits Deferred income tax assets Net defined benefit liability Unrealized loss on valuation of investments in equity instruments measured at fair value through profit or loss Other Land value increment tax Deferred income tax (liabilities) Net defined benefit liability Unrealized loss on valuation of investments in equity instruments measured at fair value through other comprehensive income Exchange differences on translation of foreign financial statements Unrealized loss on valuation of investments in debt instruments measured at fair value through other comprehensive income Unrealized exchange loss Other Tax loss carry forwards Deferred income tax assets Net defined benefit liability Unrealized loss on valuation of investments in equity instruments measured at fair value through profit or loss Exchange differences on translation of foreign financial statements Land value increment tax Deferred income tax (liabilities)		2020
	Balance, beginning of year	Recognized in profit (loss)	Recognized in other comprehensive income	Balance, end of year
	$ 3,145 267 1,862 － 4,002 12,699 12,115 －	$ － － － － (2,181) 16,057 3,851 994	$ (1,172) (267) 4,803 200 － － － －	$ 1,973 － 6,665 200 1,821 28,756 15,966 994
	$ 34,090	$ 18,721	$ 3,564	$ 56,375
	(98) － － (166,357)	(1,261) － (5,188) －	－ (404) － －	(1,359) (404) (5,188) (166,357)
	$(166,455)	$ (6,449)	$ (404)	$(173,308)
	Balance, beginning of year	Recognized in profit (loss)	Recognized in other comprehensive income	Balance, end of year
	$ 3,653 216 － 3,914 8,008 4,839 －	$ － － － － (4,006) 7,860 12,115	$ (508) 51 1,862 (3,914) － － －	$ 3,145 267 1,862 － 4,002 12,699 12,115
	$ 20,630	$ 15,969	$ (2,509)	$ 34,090
	(3,045) (55) (348) (166,357)	2,947 55 － －	－ － 348 －	(98) － － (166,357)
	$(169,805)	$ 3,002	$ 348	$(166,455)

(4)Information on Unused Loss Carryforwards

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Loss carryforwards as at December 31, 2020 are as follows:

Loss carryforwards	Balance of unused loss carryforwards $ 15,966	Final deductible year 2029

• (5) Except for 2017, the Company’s income tax settlement application case approved by the competent authority is approved to 2018.

28. EPS

(1) Basic earnings per share

(1) Basic earnings per share
Net income for the period attributable to owners of the Corporation Weighted average number of ordinary shares (in thousand shares) Basic EPS (NT dollars) (2) Diluted earnings per share Net income for the period attributable to owners of the Corporation Weighted average number of ordinary shares (in thousand shares) Potentially ordinary stock- Employee bonus (in thousand shares) Number of shares of diluted EPS (in thousand shares) Diluted EPS (NT dollars)	2020 $ 901,716 344,377 $ 2.62 2020 $ 901,716 344,377 488 344,865 $ 2.61	2019
		$ 538,957
		350,000
		$ 1.54
		2019
		$ 538,957
		350,000 336
		350,336
		$ 1.54

If the Company can choose to distribute stocks or cash as the bonus for the

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employees, when calculating the earnings per share, the distribution of shares to the employees should be taken into consideration. In addition, the potential common shares which will dilute the earnings should be added into the weighted average number to calculate the diluted earnings per share. The distributed number of shares is estimated by the closing price of the common shares at the end of the reporting period (the effect of exclude right and exclude dividends is considered). The dilutive effect of the potential shares distributed to the employees will be taken into consideration when calculating the diluted EPS before the resolution concerning the number of shares to be delivered as bonus for employees is made in the shareholder meeting the following year.

29.Disposal of Subsidiary

Da-Guan Recreation Company passed the dissolution and liquidation at the temporary shareholders meeting on October 22, 2020, and the Company lost control of Da-Guan Recreation Company.

(1) Analysis of assets and liabilities for loss of control

Analysis of assets and liabilities for loss of control
Non-current assets Investment property Current liabilities Other payables Net assets disposed of Gain on disposal of subsidiary Fair value of remaining investments at the date of loss of control Net assets disposed of Non-controlling interests at the date of loss of control Gain on disposal	Oct. 22, 2020
	$ 1,232 (6,318)
	$ (5,086)
	2020
	$ － 5,086 (1,017)
	$ 4,069

(2) Gain on disposal of subsidiary

30. Capital Management

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The enterprise life cycle of the Company belongs to “maturity period”. However, in order to pursue business sustainable development, respond to the future market demands and consider the future capital expenditure budget of the Company as well as maintenance stable dividend allocation, on the whole, the Company applies a prudent risk management policy.

31. Financial instruments

(1) The types of financial instruments

The types of financial instruments
Financial assets Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Amortized cost Cash and cash equivalents Trade receivables Other financial assets Refundable deposits Total Financial liabilities Amortized cost Short-term loans Short-term bills payable Trade payables Guarantee deposits received Total	Dec. 31, 2020 $ 72,280 2,414,450 1,352,167 246,283 135,653 2,291 $ 4,223,124 $ 350,000 9,992 228,195 43,463 $ 631,650	Dec. 31, 2019
		$ － 2,233,087 900,150 128,987 185,214 8,322
		$ 3,455,760
		$ 860,000 399,548 234,689 42,401
		$ 1,536,638

(2) Fair values of financial instruments

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• A. Financial instruments not measured with the fair value

• The financial assets and financial liabilities not measured by fair values of this company include cash and equivalent cash, accounts receivable, other financial assets, short-term loan, short-term bonds payable and accounts payable. The maturity dates of this kind of financial products are rather short that their book values should belong to a reasonable foundation of estimating fair values. The above financial products shall not include refundable deposits and deposit received either, because their repayment dates are uncertain; therefore, their fair values are evaluated by the book values in balance sheets.

• B. Fair value measurement of recognitions in balance sheet

The following table provides related analysis of financial instruments measured by fair values after original recognition, and the observable levels of fair values are divided into the first to the third level.

• a. The first-level fair value measurement refers to an open offer of the same asset or liability from an active market (without being adjusted).

• b. The second-level fair value measurement refers to a derived fair value of an observable input value belong to the said asset or liability either directly (i.e., price) or indirectly (i.e., to be derived from price) in addition to a first-level open offer.

• c. The third-level fair value measurement refers to a derived fair value of an input value of asset or liability not based on observable market data (nonobservable input value) as the evaluation technique.

• C.Concerning the financial instruments measured by fair values, the basic classification analysis of the Company in accordance with the nature, characteristics and risk as well as fair value level of asset and liability shall be as follows:

• a. The financial asset and liability measured by fair value on repeatable

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foundation:

foundation:
Financial assets at fair value through profit or loss Fund Financial assets at fair value through other comprehensive income Stock of Listed (OTC) companies Stock of emerging companies Stock not classified to listed (OTC) and emerging companies Financial bond Total Financial assets at fair value through other comprehensive income Stock of Listed (OTC) companies Stock of emerging companies Stock not classified to listed (OTC) and emerging companies Total		Dec. 31, 2020
	Level 1	Level 2	Level 3	Total
	$ 72,280	$ －	$ －	$ 72,280
	$ 2,250,990 － － 64,461	$ － 6,887 － －	$ － 92,112 －	$ 2,250,990 6,887 92,112 64,461
	$ 2,315,451	$ 6,887	$ 92,112	$ 2,414,450
	Level 1	Level 2	Level 3	Total
	$ 2,123,296 － －	$ － 3,736 －	$ － － 106,055	$ 2,123,296 3,736 106,055
	$ 2,123,296	$ 3,736	$ 106,055	$ 2,233,087

b. The financial asset and liability measured by fair value on non-repeatable

foundation: none

D. The first-level fair value measurement item applies a market offer as the fair

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value input value, with breakdown as follows:

Item Stock of Listed (OTC) companies Fund and Financial bond	Market quoted
	Close price The net assets

E. The second-level fair value measurement item applies the observable input values of recent transaction price and offer data of GreTai Securities Market, to serve as the foundation of evaluating fair values.

• F. There was no change between Level 1 and Level 2 fair value measurements in 2020 and 2019.

• G. Adjustment of financial assets with the third-level fair value measurement:

Beginning balance Purchases Capital return due to disinvestment Listed to other comprehensive income of this year Ending balance	2020 $ 106,055 1,846 (4,500) (11,289) $ 92,112	2019
		$ 140,685 － (8,000) (26,630)
		$ 106,055

• H. Level 3 fair value measurement is based on net asset values. The Company

takes great caution in the selection of valuation models and valuation parameters for the key, non-observable values. Therefore, the measurement of fair values should be reasonable. The use of different valuation models or valuation parameters may result in different numbers. For example, If the evaluation parameter's share price net multiplier increases, the market liquidity discount decreases, and the weighted average capital cost discount rate decreases, the fair value of the investment will be increased.

(3) Objective of financial risk management

The financial risk management of the Company is to manage currency exchange rate risk, interest rate risk, credit risk and liquidity risk related to operation activities. In order to reduce related financial risks, the Company has devoted to identification, evaluation and avoiding uncertainty of market, to reduce any potential unfavorable impact of market changes on the corporate financial performance.

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The important financial activities of the Company are specified by the board and in accordance with related specifications and double checked through an internal control system. During the execution period of financial planning, the Company shall scrupulously observe the related financial operation procedures concerning comprehensive financial risk management and division of authority and responsibility.

(4) Market risk

The Company mainly exposes to such market risks as changes in foreign currency exchange rate and changes in interest rate, etc.

A. Foreign currency exchange rate risk

The foreign currency exchange rate risk of the Company mainly comes from Cash and cash equivalents, accounts receivable, other payables priced by foreign currency exchange, Financial assets at fair value through profit or loss as fund, Financial assets at fair value through other comprehensive income as overseas company stock and financial bond, and foreign currency time deposit with maturity period above three months.

The information concerning foreign currency financial assets and liabilities under material impacts of foreign currency exchange rate fluctuation shall be as follows:

Financial assets Monetary items USD HKD JPY RMB Non-monetary items USD Financial liabilities Monetary items USD HKD JPY RMB		Dec. 31,2020			Dec. 31,2019
	foreign currency	Exchange rate	Amount	foreign currency	Exchange rate	Amount
	25,672 8,352 210,548 35,553 1,276 113 4 10 315	28.43 3.595 0.2746 4.355 28.43 28.53 3.655 0.2787 4.405	729,846 30,025 57,817 154,834 36,280 3,221 13 3 1,389	18,822 9,647 89,832 31,007 653 296 14 － 207	30.03 3.836 0.2751 4.296 30.03 30.13 3.896 － 4.346	565,217 37,007 24,713 133,204 19,600 8,908 56 － 901

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The sensitivity analysis concerning foreign currency exchange rate risk is calculated mainly for the monetary items of foreign currency at the end of the financial reporting period. When the appreciation/ depreciation of NT Dollar vs. foreign currency reaches 1%, the pre-tax profit and loss of the Company from January 1 to December 31, 2020 and 2019 would separately increase/decrease by NT$9,679 thousand and NT$7,503thousand, respectively.

Due to a large variety and volumes of foreign currency transactions, the Company discloses the exchange gains/losses for the summary of monetary items. The recognized foreign currency gain/loss (realized and unrealized) was NT$40,142thousand for 2020 and NT$2,641thousand for 2019.

B. Interest rate risk

The interest rate risk refers to the risk in fair values of non-derivative financial instruments cause by changes of market interest rate. The interest rate risk of the Company mainly comes from short-term loans and shortterm bonds payable.

Concerning the sensitivity analysis of interest rate risk, it is calculated on basis of the fixed interest rate loan at the end of the financial reporting period, and it is assumed to be held for one year. In case the interest rate rises/drops 1%, the pre-tax profit and loss of the Company from January 1 to December 31, 2020 and 2019 would separately increase/ decrease by NT$3,600 thousand and NT$12,595thousand, respectively.

C. Other price risks

The price risk of equity instruments of the Company mainly comes from the investment classified as Financial assets at fair value through other comprehensive income; and all major equity instrument investments may only be conducted after the approval of the board of the Company.

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Concerning the sensitivity analysis of equity instrument price risks, it is calculated on basis of the changes in fair values at the end of the financial reporting period. In case the price equity instruments rises/drops 1%, the profit and loss of the Company from January 1 to December 31, 2020 and 2019 would separately increase/decrease by NT$23,500 thousand and NT$22,331thousand, respectively.

(5) Credit risk management

The credit risk management refers to the opposing party of trade violates contract obligations and causes risks of financial loss to the Company. The credit risk of the Company comes mainly from the accounts receivable generated from operation activities, and bank deposits generated from investment activities and other financial instruments. Operation related credit risks and financial credit risks are under separate management.

A. Operation related credit risks

In order to maintain the quality of accounts receivable, the Company already establishes the procedures of operation related credit risks. The risk evaluation of an individual customer considers such numerous factors with potential impacts on customer payment abilities as the financial status of the said customer, internal credit ratings of the Company, historical trade record and current economic status, etc. The Company would also in due time uses certain credit enhancement tools, such as sales revenue received in advance and credit insurance, etc., to reduce credit risks of specific customers.

Up to December 31, 2020 and December 31, 2019, the accounts receivable balances of the top 10 major customers account for the accounts receivable balances of the Company respectively as 56% and 72%; the risk concentration risks of the rest accounts receivable are relatively not major. B. Financial credit risk

The credit risks of bank deposit and other financial instruments are measured and supervised by the Finance Department of the Company. Since the trade parties of the Company are all domestic banks with commendable credit, there is no suspicion of major contract performance; therefore, there is no major credit risk.

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(6) Liquidity risk management

The object of liquidity risk management of the Company is to maintain cash and equivalent cash required for operation, securities with high liquidity, and sufficient bank financing quota, etc., to ensure the Company to possess sufficient financial flexibility, operation fund sufficient to cope up with the financial liabilities with agreed repayment periods.

A. The liquidity of non-derivative financial assets and liabilities

Non-derivative financial liabilities Short-term borrowing Short-term notesand bills payable Trade payables Lease liabilities Guarantee deposits received Total Non-derivative financial liabilities Short-term borrowing Short-term notesand bills payable Trade payables Lease liabilities Guarantee deposits received Total			Dec. 31, 2020
	Less than 1 year	2～3 years	4～5 years	Over 5 years	Total
	$ 350,000 9,992 228,195 5,440 26,274	$ － － － 10,879 9,005	$ － － － 10,879 6,230	$ － － － 16,319 1,954	$ 350,000 9,992 228,195 43,517 43,463
	$ 619,901	$ 19,884	$ 17,109	$ 18,273	$ 675,167
			Dec. 31, 2019
	Less than 1 year	2～3 years	4～5 years	Over 5 years	Total
	$ 860,000 399,548 234,689 5,762 15,488	$ － － － 10,879 17,525	$ － － － 10,879 4,661	$ － － － 21,759 4,727	$ 860,000 399,548 234,689 49,279 42,401
	$ 1,515,487	$ 28,404	$ 15,540	$ 26,486	$ 1,585,917

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B. Loan commitments

Loan commitments
Unsecured bank overdraft limit -Amount used -Amount unused Unsecured bank loan limit -Amount used -Amount unused Secured bank loan limit -Amount used -Amount unused	Dec. 31, 2020 $ － 90,000 $ 90,000	Dec. 31, 2019
		$ － 90,000
		$ 90,000
	Dec. 31, 2020 $ 360,000 2,580,000 $ 2,940,000 $ － 170,000 $ 170,000	Dec. 31, 2019
		$ 1,090,000 1,850,000
		$ 2,940,000
		$ 170,000 －
		$ 170,000

32. Related party transaction

(1)Name and relation ship with related parties

Name of related parties

Relationship with the Company

Ban Chien Development Co., Ltd. The Company’s subsidiaries Formosan Construction Corp. (Taiwan) the equity method Eurogear Corporation Chen Hsi Investment CO, LTD[[The president is the spouse of the ]]

[Investee company accounted for using ] the equity method

The Company’s institutional director

[[The president is the spouse of the ]] general manager of the Company

• The president is the spouse (1st degree of kinship) of the Company’s president

Hung He Development CO, LTD

[Its president is the same as president of ] the Company

FRG Charity Foundation HSU, ZHEN-TSAI Hsu Mei-Zhi

President of the Company

[2nd degree of kinship of the Company’s ] president

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(2) Major transaction with related parties

A. Operating revenue -Rental

Operating revenue-Rental
Other Guarantee deposits received	2020 $ 1,186 Dec. 31, 2020 $ 274	2019
		$ 1,186
		Dec. 31, 2019
		$ 274

The subsidiaries and related enterprise lease the office to the Company, and the lease content is determined by the agreement between the two parties, and the rent is collected monthly.

B.Lease agreement

Lease agreement signed by the Company with Formosan Construction Corp. (Taiwan), Eurogear Corporation, Chen Hsi Investment CO, LTD., Ltd. and Hung He Development CO, LTD in December 2018., with the lease period as of January 1, 2018 to December 31, 2028. The lease agreement is based on the Consumer Price Index (CPI) in thesixth, and it adjusts the rent according to the accumulated average CPI increase in the previous year. The Company does not have a preferential purchase right for the real property at the end of the lease term. The rent is the monthly payment.

Formosan Construction Corp. (Taiwan) Eurogear Corporation Chen Hsi Investment CO, LTD Hung He Development CO, LTD Total Formosan Construction Corp. (Taiwan) Eurogear Corporation Chen Hsi Investment CO, LTD Hung He Development CO, LTD Total	Dec. 31,2020	Dec. 31,2020
	Right-of-use assets lease liabilities $ 8,189 $ 8,277 7,852 7,937 16,672 16,853 8,529 8,621 $ 41,242 $ 41,688 Dec. 31, 2019	lease liabilities
		$ 8,277 7,937 16,853 8,621
		$ 41,688
	Right-of-use assets $ 9,212 8,834 18,756 9,595 $ 46,397	lease liabilities
		$ 9,262 8,881 18,857 9,647
		$ 46,647

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Refundable deposits Interest expense Depreciation expense	Dec. 31, 2020 $ 1,167 2020	Dec. 31, 2019
		$ 1,167
		2019 $ 534 $ 5,155
	$ 480
	$ 5,155

C. As of December 31, 2020 and 2019, the farmland of investment property held in the name of the major management of FRG amount to NT$109,204 thousand and NT$94,241 thousand, respectively. Its ownership certificate is under custody of the Company, and its pledge is set to the Company for security purpose.

D. Sale of real estate

In 2020, the Company sales the real estate and parking space of the La Bella Vita Project in Taichung City to Hsu Mei-Zhi, which is jointly developed and constructed with Continental Development Corporation. The total contract price (including tax) is NT$37,200 thousand. Base on the capital contribution ratio, the transaction price of the Company is NT$10,137 thousand and the disposition benefit is NT$3,529 thousand.

E. Donation expense

Donation expense
FRG Charity Foundation	2020
	$ 10,000

(3) Reward to major management

The remuneration information to board directors and other major management members shall be as follows:

members shall be as follows:
Short-term benefits Retirement benefit Total	2020 $ 57,001 613 $ 57,614	2019
		$ 50,479 610
		$ 51,089

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33. Pledged assets

The following assets are already provided to serve for guarantee of financial

industry loans, material purchase and international logistics business, with the book amounts as follows:

book amounts as follows:
Construction project ─Real estate under construction Other financial assets Property, plant and equipment Investment property - house and land Total	Dec. 31, 2020 $ － 20,000 287,640 190,148 $ 497,788	Dec. 31, 2019
		$ 1,960,691 20,000 287,640 192,872
		$ 2,461,203

1. Material contingent liabilities and unrecognized contract promise: None

35. Important disaster loss: None

36. Important subsequent events: None

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37. Additional disclosed items

• (1) Information regarding the material transaction items

• A. The status of lending capital to others: None

B. The status of endorsement and guarantee for others:

No. (note 1)	Company name of the endorsement / guarantee provider	Recipient of the endorsement/ guarantee	Recipient of the endorsement/ guarantee	Endorsement / guarantee quota for a individualent erprise (note 3)	Max. balance of the endorsement/ guarantee this period	Ending balance of the endorsement/ guarantee	Actual drawing amount	The endorsement / guarantee amount guaranteed by properties	Percentage of accumulated endorsement / guarantee amount in net value of the latest financial statements	Max. limit of the endorsement / guarantee (note 3)	Endorsement / guarantee from parent company to subsidiary	Endorsement / guarantee from subsidiary to parent company	Endorsement / guarantee to Mainland China
		Company name	Relation
0	The Company	950 Property LLC	Note 2	$ 1,677,339	$ 790,727 (USD26,054)	$ 743,309 (USD26,054)	$ 341,440 (USD11,968)	－	6.65％	$ 3,354,678	－	－	－

Note 1: The explanation for the number column is as follows:

• (1) Put “0” for the company.

• (2) Put the serial No. starting from 1 for the investees by company category.

• Note 2: The relationships between endorsement/ guarantee provider and recipient:A company that is endorsed by each of the contributing shareholders in accordance with their shareholding ratio because of the joint investment relationship.

• Note 3: Accoridng to the Operating procedures of endorsement and guarantee for others, the Company’s endorsement/ guarantee total amount should be no more than 30% of this company’s net value, and its endorsement/ guarantee amount to an individual enterprise should be no more than 15% of the Company’s net value.

Note 4 ： US$1 ＝ NT$28.53

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C. Thestatus of securities held at the end of the period

Name of this Company	Type and name of securities	Relation with securities issuer	Item listed on book		The end of the	period		Remarks
				Share / unit numbers	Book value	Ratio of share holding%	Fair value
FRG	Fund Allianz Global Investors Preferred Securities and Income Fund Allianz Global Investors Income and Growth Fund NN(L) US Credit X Cap USD AB International Technology Portfolio AB American Growth Portfolio Stock SinoPac Financial Holdings Company Limited Nan Ya Plastics Corporation Formosa Chemicals & Fibre Corporation Far Eastern New Century Corporation Far Eastern Group Far Eas Tone Telecommunications Co., Ltd. Formosa Plastics Corporation Huaku Development Co., Ltd. E. SUN Financial Holding Co., Ltd. ASUSTeK Computer Inc. WPG Holdings Formosa Petrochemical Corp. Shine More Technology Materials Corporation., Ltd. Fubon Securities Co., Ltd. Continental Holdings Corp. (CHC) Pegatron Corporation ChongHongConstruction Co.,Ltd.		Financial assets at fair value through profit or loss - current 〃 〃 〃 〃 Financial assets at fair value through other comprehensive income - current 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃 〃	997,009 91,159 202 10,490 21,346 35,969,700 3,847,900 4,599,170 4,101,761 5,266,447 2,210,000 583,000 1,325,000 1,630,419 200,000 283,600 1,678,000 1,158,250 690,000 2,205,000 1,577,000 842,000	$ 10,289 29,001 9,432 8,836 14,722 411,853 276,664 389,550 118,746 126,395 135,252 56,201 116,335 41,657 50,100 12,166 167,464 4,517 7,073 45,644 106,132 67,360	－ － － － － 0.32 0.05 0.08 0.08 0.37 0.07 0.01 0.48 0.01 0.03 0.02 0.02 3.05 0.28 0.27 0.06 0.29	$ 10,289 29,001 9,432 8,836 14,722 411,853 276,664 389,550 118,746 126,395 135,252 56,201 116,335 41,657 50,100 12,166 167,464 4,517 7,073 45,644 106,132 67,360	Note Note Note Note Note Note Note Note Note Note Note

Note: The situation of being provided to financial loan business trust in detail is shown as in Note 8.

270

Name of this Company	Type and name of securities	Relation with securities issuer	Item listed on book		The end of the	period		Remarks
				Share / unit numbers	Book value	Ratio of share holding %	Fair value
FRG	Farglory Land Development Co., Ltd. Shin Kong Financial Holding Co., Ltd. -Preferred Shares B Bank of Amer Citigroup Inc. Brightek Optoelectronic Co., Ltd. Eslite Corporation Yu Chi Venture Investment Co., Ltd. Formosan Chemical Industrial Co. Formosan Glass & Chemical Industrial Co. Tai Yang Co., Ltd. Formosan Rubber Group Inc. (Ningpo) Tashee Golf & Country Club - preferred stock Corporate Bond AT&T Inc. debt II AT&T Inc. debt VI Ford Motor Company Delta Air Lines Inc.	Chairman of Formosan Rubber Group Inc. (Ningpo) is the brother to Chairman of Formosan Rubber Group Inc.	Financial assets at fair value through other comprehensive income - current 〃 〃 〃 Financial assets at fair value through other comprehensive income – non-current 〃 〃 〃 〃 〃 〃 〃 Financial assets at fair value through other comprehensive income - current 〃 〃 〃	1,254,000 666,000 14,000 4,000 267,241 1,604,379 2,250,000 22,516 9,795 111,395 － 1 680,000 630,000 500,000 250,000	$ 70,600 28,205 12,064 7,012 6,887 10,415 25,898 14,281 2,563 7,351 17,204 14,400 22,087 18,441 15,884 8,049	0.16 0.01 0.00 0.00 0.44 1.65 10.00 2.25 5.02 1.24 12.86 － － － － －	$ 70,600 28,205 12,064 7,012 6,887 10,415 25,898 14,281 2,563 7,351 17,204 14,400 22,087 18,441 15,884 8,049	Note

Note: The situation of being provided to financial loan business trust in detail is shown as in Note 8.

271

Name of this Company	Type and name of securities	Relation with securities issuer	Item listed on book		The end of the	period		Remarks
				Share / unit numbers	Book value	Ratio of share holding %	Fair value
Ban Chien Development Co., Ltd.	Stock SinoPac Financial Holdings Company Limited Chong Hong Construction Co., Ltd. Taiwan Cement Corporation MiTAC Holdings Corporation Farglory Land Development Co., Ltd. Yuanta Financial Holding Co., Ltd.		Financial assets at fair value through other comprehensive income - current 〃 〃 〃 〃 〃	42,062,322 904,000 420,006 224,000 380,000 208,000	$ 481,614 72,320 18,144 6,608 21,394 4,274	0.37 0.31 0.01 0.02 0.05 0.00	$ 481,614 72,320 18,144 6,608 21,394 4,274
FRG US Corp.	Stock TRIMOSA HOLDINGS LLC		Financial assets at fair value through other comprehensive income - non-current	－	423,771	14.67	423,771

272

• D. The same securities in which the accumulated amount of buying or selling reached NT$300 million or was more than 20% of the paidup capital: None

• E. The amount acquiring real estate which reached NT$300 million or was over 20% of the paid-up capital: None

F. The amount disposing property which reached NT$300 million or was over 20% of the paid-up capital:

Name	Property	Transection date	Acquisition date	Carrying value	Transection amount	Receipt status	Gain (loss) on disposal	Counterparty	Nature of relationshi p	Purpose of disposal	Price reference	Other terms
The Company	55 TIMELESS Project－Real estate for sale	109.03.02	N/A	Inventory held for sale therefore not applicable	$ 341,212	$ 341,212	Inventory held for sale therefore not applicable	A Customer	Non- relative	Get benefit	The appraisal amount of $330,800 as reported by REPro Knight Frank	None

• G. The amount of purchases or sales from or to related parties which reached NT$100 million or was over 20% of the paid-up capital:

None

• H. The amount of related party receivables which reached NT$100 million or was more than 20% of the paid-up capital: None

• I. Information regarding transactions of derivative financial products: None

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(2) Related information to re-investment businesses

Investing company	Investee	Area	Business items	Original investment amount	Original investment amount	Holdingat the end of theperiod	Holdingat the end of theperiod	Holdingat the end of theperiod	Investee’s profit (loss) of current period	Investment profit (loss) recognized current period	Remarks
				End of period for current period	End for last year	Share	Ratio (%)	Book value
The Company	Ban Chien Development Co., Ltd. Da-Guan Recreation Company KINGSHALE INDUSTRIAL LIMITED FRG US Corp. Formosan Construction Corp. (Taiwan) Fenghe Development Co., Ltd. Rueifu Development Co., Ltd.	Taiwan Taiwan Hong Kong U.S.A. Taiwan Taiwan Taiwan	Consign a contractor to build residential and commercial building for lease and sale Trading on golf driving range, playground, sports equipment Investment Real estate investment, development and rental and sales of premises. Consign a contractor to build commercial building and public housing for lease and sale Consign a contractor to build residential and commercial building for lease and sale International trade, investment consultancy, office building for lease and building/land brokerage.	$ 560,000 － 34 461,349 75,979 59,850 483	$ 560,000 63,007 34 460,142 75,979 59,850 483	56,000,000 － 9,999 7,526,000 7,597,927 3,990,000 48,260	100.00 － 99.99 100.00 26.20 39.90 48.26	$ 622,046 － － 424,611 62,048 31,655 8,263	$ 36,607 － － (455) 6,491 (886) 3,183	$ 36,607 － － (455) 1899 (353) 1,536	Subsidiary 註 Subsidiary Subsidiary

Note: Da-Guan Recreation Company has passed the dissolution and liquidation at the temporary shareholders meeting on October 22, 2020.

(3) Information of the investment in China: None

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(4) Information on major shareholders

Shareholding Name of major shareholder	Number of shares	Percentage of ownership
Ruifu Construction Co., Ltd.	34,070,754	9.95％
Chen Hsi Investment CO, LTD	17,626,989	5.14％

• Note: A. The major shareholders information was calculated by Taiwan Depository & Clearing Corporation in accordance with the common shares (including treasury shares) and preferred shares in dematerialised form which were registered and held by the shareholders above 5 ％ on the last operating date of each quarter. The share capital which was recorded on the financial statements might be different from the number of shares held in dematerialised form because of the different calculation basis.

• B. As per information above, if the shareholder delivers the shares to the trust, shares will be disclosed based on the trustee’s account. Additionally, according to the Securities and Exchange Act, internal stakeholder whom holds more than 10% of the Company’s share, which includes shares held by the stakeholder and parts delivered to the trust that have decision making rights, should be declared. For information regarding internal stakeholder declaration, please refer to the Market Observation Post System website of the Taiwan Stock Exchange Corporation.

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38. Department information

The Company has provided the operating segments disclosure in the consolidated

financial statements.

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STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2020

	STATEMENT 1	STATEMENT 1
Item	Description	Amount
Cash on hand Petty cash Checking accounts Savings accounts Cash equivalent Commercial paper	Including RMB 20 thousand, exchange rate of $4.355 Including USD 4.480 thousand, exchange rate of $28.430 RMB 18,917 thousand, exchange rate of $4.355 HKD 8,276 thousand, exchange rate of $3.595 JPY 198,112 thousand, exchange rate of $0.2746 EUR 8 thousand, exchange rate of $34.860 GPB 1 thousand, exchange rate of $38.730 Expiration date 2021/01/06～2021/02/22 Interest rates at 0.23％～0.53％	$ 261 255 147,847 603,479 600,325
Total		$ 1,352,167

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STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - CURRENT

DECEMBER 31, 2020

STATEMENT 2

Name of Securitie	Description	Units	Par value	Total price	Rates	Acquisition	Accumulated impairment	Fair value	Fair value	Remarks
								Unit price	Total price
Fund Allianz Global Investors Preferred Securities and Income Fund Allianz Global Investors Income and Growth Fund NN(L) US Credit X Cap USD AB International Technology Portfolio AB American Growth Portfolio	USD USD USD USD	997,009.000 91,159.000 202.447 10,489.510 21,345.662	－ － －	$－ － － － －	－ － －	$ 10,000 28,350 9,400 8,466 14,194	$－ － － － －	10.32 318.13 46,589.38 842.38 689.71	$ 10,289 29,001 9,432 8,836 14,722
Total				$－		$ 70,410	$－		$ 72,280

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STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - CURRENT

DECEMBER 31, 2020

STATEMENT 3

Name of Securitie	Description	Share / unit numbers	Par value	Total price	Rates	Acquisition	Accumulated impairment	Fair value	Fair value	Remarks
								Unit price	Total price
Stock SinoPac Financial Holdings Company Limited Nan Ya Plastics Corporation Formosa Chemicals & Fibre Corporation Far Eastern New Century Corporation Far Eastern Group Far Eas Tone Telecommunications Co., Ltd. Formosa Plastics Corporation Huaku Development Co., Ltd. E. SUN Financial Holding Co., Ltd. ASUSTeK Computer Inc. WPG Holdings Formosa Petrochemical Corp. Shine More Technology Materials Corporation., Ltd. Fubon Securities Co., Ltd. Continental Holdings Corp. (CHC) Pegatron Corporation Chong Hong Construction Co., Ltd. Farglory Land Development Co., Ltd. Shin Kong Financial Holding Co., Ltd. -Preferred Shares B Bank of Amer Citigroup Inc. Corporate Bond AT&T Inc. Debt II AT&T Inc. Debt VI Ford Motor Company Delta Air Lines Inc.	Expires before 2042 Expires before 2051 Expires before 2023 Expires before 2026	35,969,700 3,847,900 4,599,170 4,101,761 5,266,447 2,210,000 583,000 1,325,000 1,630,419 200,000 283,600 1,678,000 1,158,250 690,000 2,205,000 1,577,000 842,000 1,254,000 666,000 14,000 4,000 680,000 630,000 500,000 250,000	10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10 10	$ 359,697 38,479 45,992 41,018 52,664 22,100 5,830 13,250 16,304 2,000 2,836 16,780 11,583 6,900 22,050 15,770 8,420 12,540 6,660	－ － － － － － － － － － － － － － － － －	$ 287,351 283,471 455,604 135,008 148,502 144,792 45,532 85,430 20,084 57,428 10,879 174,619 9,795 9,979 34,419 94,176 72,128 57,673 29,970 10,009 5,386 22,452 19,270 15,610 8,080	$ － － － － － － － － － － － － － － － － － － － － － 27 22 96 387	11.45 71.90 84.70 28.95 24.00 61.20 96.40 87.80 25.55 250.50 42.90 99.80 3.90 10.25 20.70 67.30 80.00 56.30 42.35 861.71 1,725.99 32.48 29.27 31.77 32.19	$ 411,853 276,664 389,550 118,746 126,395 135,252 56,201 116,335 41,657 50,100 12,166 167,464 4,517 7,073 45,644 106,132 67,360 70,600 28,205 12,064 7,012 22,087 18,441 15,884 8,049	Note Note Note Note
Total				$		$ 2,237,647	$ 532		$ 2,315,451

Note: The situation of being provided to financial loan business trust in detail is shown as in Note 8.

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STATEMENT OF NOTES RECEIVABLE, NET

DECEMBER 31, 2020

				STATEMENT 4
Client Name	Description	Amount		Remarks
		Subtotal	Total
Non related parties： Client A Client B Client C Others Payment for real property Total Less: Loss allowance	Payment for goods 〃 〃 〃 Payment for real property	$ 18,361 1,466 1,591 6,325	$ 27,743 13,300	The amount of individual client included in others does not exceed 5% of the account balance.
			41,043 (278)
Net			$ 40,765

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STATEMENT OF ACCOUNTS RECEIVABLE, NET

DECEMBER 31, 2020

STATEMENT 5

				STATEMENT 5
Client Name	Description	Amount		Remarks
		Subtotal	Total
Non related parties： Client A Client B Others Less: Loss allowance	Payment for goods 〃 Payment for goods and real property	$ 13,165 12,561 175,477	$ 201,203 (2,534)	CNY 3,023 thousand USD 442 thousand The amount of individual client included in others does not exceed 5% of the account balance.
Net			$ 198,669

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STATEMENT OF INVENTORIES

DECEMBER 31, 2020

		STATEMENT 6	STATEMENT 6	STATEMENT 6
Item	Description	Amount		Remarks
		Cost	Net Realizable Value
Raw materials Work-in-process Finished goods Subtotal Less: allowance for loss	Chemical raw materials and Original cloth, etc. Rubber Sheet, Eco- Friendly Synthetic Leather, Synthetic Leather, Rubberized fabric machining, and Rubber raw materials and Plastic raw materials, etc. Rubber Sheet, Eco- Friendly Synthetic Leather, and Synthetic Leather, etc.	$ 146,362 19,727 133,714	$ 90,340 19,727 109,379	Net realizable value is the estimatedexcept thatraw materials are based on replacement cost, the selling price of inventories less all estimated costs of completion and costs necessary to make the sale.
		299,803 (80,357)	$ 219,446
Net		$ 219,446

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STATEMENT OF OTHER FINANCIAL ASSETS-CURRENT

DECEMBER 31, 2020

STATEMENT 7

			STATEMENT 7
Item	Description	Amount	Remarks
Pledged time deposits Time deposits with maturity over three months Less: maturity over year transfer to noncurrent	Cooperative bank-Bansin (Interest rates at 0.2％～0.825％) (Period 2020.11.02～2023.11.02) Chang Hwa bank-Taipei (Interest rates at 2.0％) (Period 2020.07.06～2021.01.06) Chang Hwa bank-Taipei (Interest rates at 2.5％) (Period 2020.01.06～2021.01.06) Cooperative bank-Banqiao (Interest rates at 2.4％) (Period 2020.01.06～2021.01.06) Cooperative bank-Banqiao (Interest rates at 2.05％) (Period 2020.01.06～2021.01.06) Bank SinoPac -Chengchung (Interest rates at 2.25％) (Period 2020.01.02～2021.01.04) Subtotal	$ 20,000 21,775 21,775 15,243 28,430 28,430	Guarantee of logistics business RMB5,000 thousand RMB5,000 thousand USD3,500 thousand USD1,000 thousand USD1,000 thousand
		135,653 (20,000)
Total		$ 115,653

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STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

FOR THE YEAR ENDED DECEMBER 31, 2020

STATEMENT 8

Name of Securities	As of January 1, 2020	As of January 1, 2020	Additions	Additions	Decrease	Decrease	As of December 31, 2020	As of December 31, 2020	Accumulated impairment	Collateral	Remarks
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	Fair value
Stock Brightek Optoelectronic Co., Ltd. Formosan Chemical Industrial Co. Formosan Glass & Chemical Industrial Co. Tai Yang Co., Ltd. Formosan Rubber Group Inc. (Ningpo) Eslite Corporation Yu Chi Venture Investment Co., Ltd. Tashee Golf & Country Club	267,241 22,516 10,000 111,395 － 1,604,379 2,700,000 1	$ 3,736 14,030 4,712 7,415 19,600 16,792 29,106 14,400	－ － 1,846 (Note1) － － － － －	$ 3,151 250 1,846 － － － － －	－ － 2,051 (Note2) － － － 450,000 (Note3) －	$ － 3,995 63 2,396 6,377 3,208 －	267,241 22,516 9,795 111,395 － 1,604,379 2,250,000 1	$ 6,887 14,281 2,563 7,351 17,204 10,415 25,898 14,400	N/A N/A N/A N/A N/A N/A N/A N/A
Total		$ 109,791		$ 5,247		$ 16,039		$ 98,999

Note 1: Cash capital increase

Note 2: Capital reduction to cover losses

Note 3: Capital return due to disinvestment

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STATEMENT OF INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2020

STATEMENT 9

Name	As of January1,2020	As of January1,2020	Additions	Additions	Decrease	Decrease	As of	December 31,2020	December 31,2020	Fair value / Net assets value	Fair value / Net assets value	Collateral	Remarks
	Shares	Amount	Shares	Amount	Shares	Amount	Shares	%	Amount	Unit Price (NT$)	Total Amount
Ban Chien Development Co., Ltd. Da-Guan Recreation Company KINGSHALE INDUSTRIAL LIMITED FRG US Corp. Formosan Construction Corp. (Taiwan) Fenghe Development Co., Ltd. Rueifu Development Co., Ltd. Add：Credit balance of investments accounted for using equity method transfer to other liabilities	56,000,000 4,800,000 9,999 7,506,000 7,597,927 3,990,000 48,260 －	$ 647,674 (4,069) － 448,196 38,843 32,009 6,712 4,069	－ － － 20,000 － － － －	$－ － － － 23,205 － 1,551 －	－ 4,800,000 (Note 2) － － － － － －	$ 25,628 (4,069) (Note 2) － 23,585 － 354 － 4,069 (Note 2)	56,000,000 － 9,999 7,526,000 7,597,927 3,990,000 48,260 －	100.00 － 99.99 100.00 26.20 39.90 48.26 －	$ 622,046 － － 424,611 62,048 31,655 8,263 －	$ 11.11 － － 56.42 8.17 7.93 171.22 －	$ 622,046 － － 424,611 62,048 31,655 8,263 －	None － None None None None None
Total		$1,173,434		$ 24,756		$ 49,567			1,148,623		1,148,623

Note1 ： Increase(Decrease)for the period including shares of profit (loss) of subsidiaries and associates, shares of other comprehensive (loss) income of subsidiaries and associates.

Note2 ： Da-Guan Recreation Company has passed the dissolution and liquidation at the temporary shareholders meeting on October 22, 2020.

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STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2020

STATEMENT 10

Type	Explanation	Balance, End of Year	Contract Period	Range of Interest Rates (%)	Loan Commitments	Collateral	Remarks
Unsecured borrowings	Cooperative bank First Commercial Bank Hua Nan Bank CTBC Bank Land Bank of Taiwan The Export-Import Bank of the Republic of China Bank SinoPac Bank of Kaohsiung Mega International Commercial-Bank Mega International Commercial-Bank E.SUN Bank	$ 20,000 10,000 20,000 30,000 30,000 100,000 20,000 20,000 40,000 30,000 30,000	2020.11.03～2021.03.03 2020.11.18～2021.01.18 2020.12.16～2021.01.15 2020.11.13～2021.02.05 2020.11.13～2021.02.05 2020.10.28～2021.10.28 2020.12.30～2021.01.29 2020.11.27～2021.01.27 2020.08.27～2021.01.22 2020.07.28～2021.01.22 2020.10.28～2021.01.28	0.90 0.99 0.95 0.97 0.90 0.72 1.00 0.90 0.84 0.84 0.88	$ 200,000 100,000 300,000 300,000 150,000 100,000 180,000 180,000 120,000 200,000
Total		$ 350,000

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STATEMENT OF SHORT-TERM NOTES AND BILLS PAYABLE

DECEMBER 31, 2020

STATEMENT 11

							STATEMENT 11
Item	Guarantee/Acc epting Institution	Contract Period	Range of Interest Rates (%)		Amount		Remarks
				Issue Amount	Discount Amount	Carrying Amount
Commercial paper	China Bills	2020/12/18～2021/01/29	0.36％	$ 10,000	$ 8	$ 9,992
Total				$ 10,000	$ 8	$ 9,992

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STATEMENT OF NOTES PAYABLE

DECEMBER 31, 2020

STATEMENT 12

			STATEMENT
Vendor Name	Description	Amount	Remarks
Vendor A Vendor B Vendor C Vendor D Others	Payment for the purchase 〃 〃 〃 Payment for the purchase, expenses, etc.	$ 4,803 8,025 4,482 2,933 37,338	The amount of individual client included in others does not exceed 5% of the account balance.
Total		$ 57,581

STATEMENT OF ACCOUNTS PAYABLE

DECEMBER 31, 2020

STATEMENT 13

			STATEMENT
Vendor Name	Description	Amount	Remarks
Vendor A Vendor B Vendor C Others	Payment for the purchase 〃 〃 Payment for the purchase, processing charges, etc.	$ 6,771 3,570 2,796 21,235	The amount of individual client included in others does not exceed 5% of the account balance.
Total		$ 34,372

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STATEMENT OF LEASE LIABILITIES

FOR THE YEAR ENDED DECEMBER 31, 2020

STATEMENT 14

Item	Description	Lease Term	Discount Rate	Balance End of Year	Remarks
Buildings	Offices	2018.12～2028.12	1.09％	$ 41,688 (5,014)
Less: Current portion
				$ 36,674

STATEMENT OF OPERATING REVENUE

FOR THE YEAR ENDED DECEMBER 31, 2020

STATEMENT 15

			STATEMENT
Item	Shipments	Amount	Remarks
Sales revenue: Synthetic Leather Rubber Sheet Eco-Friendly Synthetic Leather Others Less: Sales returns Sales discounts Subtotal Construction revenue Rental and logistics revenue	3,985 thousand yards 2,393 thousand yards 3,419 thousand yards 302 metric tons	$ 172,982 452,065 185,857 37,449 (2,075) (1,442)	The amount does not exceed 10% of the total revenue.
		844,836 2,206,748 230,731
Total		$ 3,282,315

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STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2020

STATEMENT 16

			STATEMENT
Item		Amount	Remarks
	Subtotal	Total
Direct material Raw material, beginning of year Add: raw material purchased Less: raw material, end of year Sale of raw materials Transferred to expenses Indirect material (Supplies) Supplies, beginning of year Add: supplies purchased Less: transferred to manufacturing expenses Direct labor Manufacturing expenses Manufacturing cost Work in process, beginning of year Add: transferred from finished goods Less: work in process, end of year Cost of finished goods Finished goods, beginning of year Add: finished goods purchased Cost of outsourcing Less: finished goods, end of year Finished goods transferred to costs Finished goods Transferred to expenses Productcost of sales Raw materials and supplies transferred to sales Provision for loss on inventories Unamortized fixed manufacturing costs Total cost of sales Cost of construction Cost of rental and logistics	$ 173,340 442,502 (146,362) (589) (1,426)	$ 467,465 61,835 127,541
	2,255 (2,255)
	21,548 3,471 (19,727)
		656,841
	144,983 7,225 8,587 (133,714) (4,475) (1,186)	662,133
		683,553 589 (2,268) 10,756
		692,630 1,430,062 97,276
Total operatingcosts		$ 2,219,968

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STATEMENT OF SELLING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2020

			STATEMENT 17 Remarks The amount of each item in others does not exceed 5% of the account balance.
Item	Description	Amount	Remarks
Wages and salaries Freight Selling expenses of construction Other expenses		$ 13,751 9,163 60,628 12,549	The amount of each item in others does not exceed 5% of the account balance.
Total		$ 96,091

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STATEMENT OF GENERAL AND ADMINISTRATIVE EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2020

			STATEMENT 18 Remarks The amount of each item in others does not exceed 5% of the account balance.
Item	Description	Amount	Remarks
Wages and salaries		$ 59,938
Donation Taxes Depreciations Other expenses		12,760 14,860 16,263 39,934	The amount of each item in others does not exceed 5% of the account balance.
Total		$ 143,755

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STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2020

			STATEMENT 19 Remarks The amount of each item in others does not exceed 5% of the account balance.
Item	Description	Amount	Remarks
Wages and salaries Depreciations Contracted research expense Other expenses		$ 6,039 880 1,893 1,105	The amount of each item in others does not exceed 5% of the account balance.
Total		$ 9,917

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• VI. If the company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, the annual report shall explain how said difficulties will affect the company's financial situation: None.

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VII. A Review and Analysis of the Company's Financial Status and Financial Performance, and a Listing of Risks

• I. Financial Status

• II. Financial Performance

• III. Cash Flow

• IV. Financial Impact of Major Capital Expenditures During the Most Recent Fiscal Year

• V. Investment policy for the most recent fiscal year, the main reasons for the profits or losses, improvement plans, and investment plans for the coming year

• VI. Risk Analysis

• VII. Other Important Matters

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VII. A Review and Analysis of the Company's Financial Status and Financial Performance, and a Listing of Risks

I. Financial Status Analysis:

Unit: NT$ thousand

Year Item	2019	2020	Difference	Difference
			Amount	%
Current Assets	8,575,654	7,948,387	(627,267)	-7.31%
Property,Plant and Equipment	891,585	848,439	(43,146)	-4.84%
Other Assets	3,512,195	3,460,289	(51,906)	-1.48%
Total Assets	12,979,434	12,257,115	(722,319)	-5.57%
Current Liabilities	1,919,580	818,341	(1,101,239)	-57.37%
None Current Liabilities	254,232	256,515	2,283	0.90%
Total Liabilities	2,173,812	1,074,856	(1,098,956)	-50.55%
Shares	3,500,000	3,423,260	(76,740)	-2.19%
Capital reserve	466,463	456,341	(10,122)	-2.17%
Retained Earnings	6,672,834	7,245,305	572,471	8.58%
Other Equity	167,342	57,353	(109,989)	-65.73%
Treasury Stock	0	0	0	0.00%
Non-Controlling Interest	(1,017)	0	1,017	-100.00%
Total Equity	10,805,622	11,182,259	376,637	3.49%
(I) Analysis of Changes: 1. Current Liabilities: Mainly due to the continuous sales of construction project of “Bridge Upto Zenith”“55Timeless”, and the completion and handover of “La Bella Vita” resulting in a decrease in short-term loan by NT$510,000 thousand and short-term notes payable by NT$389,556 thousand. 2. Other equity: Mainly due to the unrealized losses on financial assets, other equity at FVTOCI of the period. 3. Non-controlling interests: mainly because thatthe 80% owned subsidiary, Da-Guan Recreation Company, was approved by the extraordinary shareholders’ meeting on October 22, 2020 to be dissovled and liquidated. (II) Future response plans: The changes in total liability in the past 2 years are mainly due to the continuous sales of construction project of “Bridge Upto Zenith” and “Legend River,” and the completion and handover of “55Timeless” resulting in a decrease in short-term loan and short-term notes payable. The completed units in each construction project continuously provides cash inflow. The funds generated from the construction projects will be used and invested effectively and the bank loans and liabilities will be paid off to strengthen the financial structure in order toprotect the rights and interests of shareholders.

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II. Financial statements:

(I) Comparison Analysis of Operation Results:

			Unit: NT$thousand	Unit: NT$thousand
Year Item	2019	2020	Increase (decrease) Amount	Change %
Operatingincome	2,701,777	3,282,255	580,478	21.49%
Operation Cost	2,040,089	2,219,968	179,879	8.82%
Operatingmargin	661,688	1,062,287	400,599	60.54%
OperatingExpenses	237,875	251,725	13,850	5.82%
OperatingProfit	423,813	810,562	386,749	91.25%
Non-OperatingIncome and Expenses	128,874	119,572	(9,302)	-7.22%
Pre-Tax Income	552,687	930,134	377,447	68.29%
Income Tax Expense	13,737	28,418	14,681	106.87%
Net Income for ContinuingOperation	538,950	901,716	362,766	67.31%

Analysis of Increase and Decrease Changes:

1. The increase in operating income, operating margin, operating profit, and net profit before tax is mainly due to continuous handover of the apartments of the “World Garden - Bridge Upto Zenith” and “Legend River,” and the completion and handover of the “55Timeless” recognized as income.

2. The increase in income tax expense is mainly due to the payment of tax for 2018 undistributed earnings during the period.

3. (II) The possible impact and response plans regarding the expected sales volume and their basis:

The Company focuses on the adjustment of production structure and manufacturing process, allowing the Company’s existing production system meet the needs of the market; the Company is also dedicated to the control of the production quality while improving the efficiency of operation and decreasing production impairment, so that the efficiency of reducing production cost can be achieved and the impact of the price rise of global raw materials can be eliminated. We also constantly invest in developments of new products and technologies, expand international marketing channel bases and diversify the market and products to increase the added value of the products. With the diversified management of construction business and warehouse business, we hope that the operation of the Company will continue to grow.

III. Cash Flow:

• (I) Analysis of cash liquidity in recent years:

					Unit: NT$ thousand
Opening cash balance○1	Net cash flow from operating activities for the entireyear○2	Net cash flow for the entireyear○3	Cash remaining○1＋○2＋○3	Remedies for ca	sh deficits
				Investmentplans	Financialplans
956,286	2,073,605	(1,658,801)	1,371,090	-	-

1. Analysis of changes in cash flows this year:

2. (2) Operating activities: Mainly due to the continuous sales of construction project of “Bridge Upto Zenith,”“Legend River,” and “55Timeless”, and the completion and handover of “La Bella Vita”, resulting in net cash flows from operating activities.

3. (3) Investment activities: Mainly due to the acquisition of financial assets at FVTOCI.

4. (4) Financing activities: Mainly due to the continuous sales of construction project of “Bridge Upto Zenith,”“Legend River,” and “55Timeless”, and the completion and handover of “La Bella Vita” and the repayment of short-term loans, short-term notes payable and distribution of cash dividends.

5. Expected remedies for cash deficits and liquidity analysis: Not applicable.

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• (II) Analysis of liquidity for the past 2 years:

Year Item	December 31, 2019	December 31, 2020	Increase (decrease) Ratio
Cash Flow Ratio	92.89	253.39	172.79%
Cash Flow AdequacyRatio	63.93	296.82	364.29%
Cash Flow Reinvestment Ratio	12.38	14.32	15.67%
Analysis of Increase and Decrease Changes: 5. Cash flow ratio, cash flow adequacy ratio and cash reinvestment ratio: Mainly due to the continuous sales of construction projects of “Bridge Upto Zenith,” “Legend River,” and “55Timeless”, and the completion and handover of “La Bella Vita” resulting in an increase of net cash flows in current operating activities by a large margin.

(III) Cash liquidity analysis for the coming year

				Unit: NT$thousand	Unit: NT$thousand
Opening cash balance○ 1	Expected net cash flow fromoperating activities for the entireyear○ 2	Expected net cash flow for the entireyear○ 3	Expected cash balance ○ 1＋○ 2＋○ 3	Expected remedies for cash deficits
				Investmentplans	Financialplans
1,371,090	1,940,600	(1,403,085)	1,908,605	-	-

1. Analysis of changes in cash flows in 2021:

2. (1) Operating activities: expected sales and construction of the house and land account and dividend income.

3. (2) Investment and financing activities: mainly due to purchase of financial assets and distribution of 2020

4. cash dividends to shareholders.

5. Expected remedies for cash deficits and liquidity analysis: Not applicable.

IV. Financial Impact of Major Capital Expenditures During the Most Recent Fiscal Year: None.

V. Investment policy for the most recent fiscal year, the main reasons for the profits or losses, improvement plans, and investment plans for the coming year:

Description Item	Amount	Policy	Main reason for profit or loss	Improvement plan	Other future investment plans
FRG US CORP.	Investment cost of NT$461,349 thousand	Real estate investment, development and rental	Loss of NT$455 thousand this period	None	None

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VI. Risk Analysis

• (I) The impact of interest rate, exchange rate changes, and inflation on the Company's profit and loss and future corresponding measures:

• Interest rate

  • (a) The life cycle of the Company is currently classified as the “mature period”. With the fierce competition in the industry and land developments, we aim to reach the goal of staying stable, sustainable management and continuing to maintain a low debt ratio. In 2020, the financial expenses totaled approximately NT$8,227 thousand, a decrease compared to 2019.

  • (b) In the future, we will continue to upload the aim of business management of staying stable and sustainable management as well as maintaining a low debt ratio. However, in terms of interest trends, we will constantly keep a close eye and collect market information for reference.

• Exchange rate:

  • (a) The Company’s export ratio for 2020 accounted for approximately 65% of its sales income and the income was mainly based on USD/CNY; the Company’s raw material imports were also paid in USD.

  • (b) The Company’s gain or loss in exchange rates in the past 2 years: In 2019, the exchange rate loss totaled NT$2,641 thousand; in 2020, the exchange rate loss totaled NT$40,142 thousand

  • (c) In the future, we will continue to observe closely on the trends of exchange rates and collect domestic and overseas market information. Use timely foreign exchange and other hedging tools to focus on exchange rate in order to reduce the impact of exchange rate changes on the Company.

• Inflation

The unstable situation of the financial market, and the continuous decline in the USD exchange rate against major currencies are crucial matters for the price fluctuations of raw materials in the world. The Company’s main raw materials for rubber and plastic manufacturing (including PVC, DOP, natural rubber, raw fabrics, etc.) have also been affected by the price fluctuation and exchange rate. As a means to handle the manufacturing costs considering the market competitiveness, the selling price of the Company’s products will be adjusted accordingly in order to ease the impact of cost fluctuation for raw materials. In the future, we will persist on observing the price changes of raw materials and make adjustments to operation strategy any time in a bid to cope with the pressure of rising costs, ensuring a reasonable profit.

(II) Main reasons and future corresponding measures of policies for engaging in highly risky and highly leveraged investments, lending funds to others, endorsements and guarantees and derivatives transactions:

• (1) Engagement in highly risky and highly leveraged investments

The Company focuses on relevant investments on rubber and plastic manufacturing, construction and warehouses; therefore, is not involved in highly risky and highly leveraged investments.

• (2) “Lending funds to others”, “endorsements/guarantees” and “derivatives transaction”:

• (a) As required by relevant measures, the Company has established the “Operational Procedures for Lending Funds to Others” and “Handling Procedures of

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Enforcements/Guarantees” and a dedicated unit is in charge of the risk and control assessment. At the same time, the Company’s audit office conducts an assessment on a monthly basis and compiles a report in accordance with the “Regulations Governing Establishment of Internal Control Systems by Public Companies” issued by the Securities and Future Bureau.

• (b) Procedures regarding derivatives transaction have been stipulated in the Company’s

“Regulations Governing the Acquisition and Disposal of Assets”, and the Company’s audit office conducts an assessment on a monthly basis and compiles a report.

• (c) The Company’s “lending funds to others” in 2020 totaled NT$0; there were no derivatives

transactions; the balance of “endorsements and guarantees” totaled NT$743,309 thousand.

• (III) The future R&D plans and estimated R&D investment expenses:

Please refer to Chapter 5, Section 1 (3) “The process of the future R&D plans and estimated R&D investment expenses for Formosan Rubber Group Inc.”.

• (IV) Impact on the Company's financial operations of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response: None.

• (V) Impact on the company's financial operations of developments in science and technology as well as industrial change, and measures to be taken in response: None.

• (VI) Impact on the company's crisis management of changes in the company's corporate image, and corresponding measures to be taken in response: None.

• (VII) Expected benefits and possible risks associated with any merger and acquisitions, and corresponding measures being or to be taken: None.

• (VIII) Expected benefits and possible risks associated with any plant expansion, and corresponding measures being or to be taken: None.

• (IX) Risks associated with any consolidation of sales or purchasing operations, and corresponding measures being or to be taken: None.

• (X) Impact upon and risk to the company in the event a major quantity of shares belonging to a director, supervisor, or shareholder holding greater than a 10 percent stake in the company has been

transferred or has otherwise changed hands, and corresponding measures being or to be taken: None.

• (XI) Impact upon and risk to company associated with any change in governance personnel or top management, and corresponding measures being or to be taken: None.

• (XII) Litigious and non litigious matters; the directors, supervisors, general managers and substantial principals of the Company, the majority shareholders and affiliated companies with a shareholding ratio of more than 10% have been determined or are included in the lawsuit; non litigation or administrative litigation results may have a significant effect on the Company's shareholders' equity or securities price as of the publication of the annual report: None

• I. The case of Zhuang Feng-Long and Zhuang Guo-Tang's house demolition:

  • After several mediations with the counterparts, the both parties have settled in the court on October 13, 2020; currently both parties have performed the settlement agreement and the litigation has confirmed the conclusion.

• II. Case of returning lands registered under others’ names in Nankang and Longtan, Taoyuan.

  1. It was learnt during the previous inventory for the lands registered under others’ names in Nankang and Longtan, Taoyuan, that some lands had be expropriated by the Taoyuan City Government, and such lands are now registered under the name of Taoyuan City Government. However, the who lent his name did not inform the Company the expropriation but received the compensations.

  2. To claim back the expropriation compensations, the Company have applied for the execution of the provisional injunction for these lands registered under the party’s name. The

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Company now has retained lawyers to file the civil and criminal lawsuits to the New Taipei City District Court, to claim that party to return the name of land registration and expropriation compensations, and file the criminal complaints of breach of trust and encroachment on business for his violation of the name-lending agreement and infringement to the Company’s property rights.

(XIII) Other important risks and corresponding measures:

Information security and risk control:

The Company has always been dedicated to enforcing information security and personal information protection control, and has established clear and strict internal control system to ensure that the information assets which belong to the Company are not illegally accessed or exposed, the information is not inappropriately altered or destroyed at any stage and that the user who is legally authorized can access the required information in a timely manner. In order to strengthen information security management, aside from the strict information security requirements of network structure, the Company carries out continuous improvement or increase corresponding preventive measures on the constant changing internal or external potential and possible threats as corresponding measures. The Company has a comprehensive backup mechanism for operation system and files and carries out regular necessary data, software backup and backup operations, to ensure that even if when an accident in relation to any information security occurs, normal operation can resume quickly to maintain the availability and completion of information and the system. Through annual review and assessment its network safety regulations and procedures, the applicability and effectiveness can be ensured. Though the Company cannot guarantee that it will be spared by new risks and attacks in the constant changing network security threats. In 2019 and as of the end of the publication date of the annual report, the Company has not had any cyber attacks or incidents that posed significant adverse impact on the Company's business and operations.

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VII. Other Important Matters:

The evaluation basis and basis of the presentation method of assets and liabilities evaluation items:

1. Allowance for bad debts:

The main reason for the Company's allowance for bad debts is the evaluation on the possibility of the return of accounts receivable and overdue receivables. Based on the factors of the aging analysis and credit rating and economic condition in terms of customers’ accounts receivable and overdue receivables, the Company regularly evaluates the possibility of the return of collectables and overdue receivables. The Company’s basis for accounts receivable aging ratio is as following:

Amount of overdue Range of days	Accounts receivable ratio	Accounts receivable ratio
	Domestic sales	Overseas sales
0 days	2%	2%
1-90 days	5%	2%
91-180 days	20%	10%
181-365 days	50%	50%
Above 365 days	100%	100%
	Notes receivable ratio
0-365 days	1%

2. Allowance to reduce inventory to market

Inventories include raw materials, finished products and work-in-progress. These are evaluated based on the lower of cost and market price (net realizable value); excess materials are provided for offsetting price loss. When the comparative cost is lower than the market price (net realizable value), it is based on individual items except for inventories of the same category. The cost of inventory is calculated using the monthly weighted average method.

Market price basis: raw materials refer to replacement costs, and finished products and work-inprogress are net realizable values.

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VIII. Special Disclosures

• I. Information relating to the Company's affiliates

• II. Transaction about the company’s private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of the publication of the annual report

• III. Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

• IV. If any of the situations listed in Article 36, paragraph 3 subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report

• V. Other matters that require additional explanation

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VIII. Special Disclosures

I. Information relating to the Company's affiliates:

• (I) Consolidated Business Reports of Affiliated Enterprises:

• Organizational table of affiliates:

==> picture [464 x 165] intentionally omitted <==

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

Formosan Rubber Group
Inc.
Ban Chien Development FRG US CORP. KINGSHALE
Co., Ltd. INDUSTRIAL
LIMITED
100% 100% 99.99%
----- End of picture text -----

2. Basic information of affiliates:

Unit: NT$ thousand

				Unit: NT$thousand
Company Name	Date of Establishment	Address	Paid-In Capital	Main business or Production
Ban Chien Development Co., Ltd.	November 7, 2003	7th Floor, No. 82, Section 1, Hankou Street, Taipei	560,000	1. Department stores, retails, wholesales, warehouses 2. Development of leases and sales of residential or business buildings 3. Building management consultant 4. Residential and cleaning management services 5. Agency Services
FRG US CORP.	October 20, 2017	10750 Johnson Ave, Cupertino, California 95014	461,349	Real estate investment, development and rental
KINGSHALE INDUSTRIAL LIMITED	February 14, 1989	14/F.,Kam Fung Commercial Building, Nos.2-4 Tin Lok Lane, Wanchai,Hong Kong	34	General investment

1. Shareholders presumed to have control and subordinate relationship with the same information: None

2. The overall relationship between business enterprises covered by the industry:

The businesses of the Company and its affiliates include: manufacturing and sales of rubber and synthetic leather, edge synthetic leather, special chemical products, warehouse and logistics, and construction.

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5. Information on directors, supervisors and presidents of affiliates:

			Unit: NT$thousand;share;%	Unit: NT$thousand;share;%
Company Name	Title	Name of Representative	Shares Owned
			Shares	Shareholding Ratio
Ban Chien Development Co., Ltd.	Chairperson/President Director Supervisor	Formosan Rubber Group Inc. Representative: Hsu Zhen-Tsai Formosan Rubber Group Inc. Representative: Jiang Rui-Tang, Hsu Zhen-Qun Hsu Mei-Lun, Tang Kun-Cheng Formosan Rubber Group Inc. Representative: Hsiao Zheng-Zhong	56,000,000 56,000,000 56,000,000	100% 100% 100%
FRG US CORP.	Director Director	Formosan Rubber Group Inc. Representative: Hsu Zhen-Ji Formosan Rubber Group Inc. Representative: Hsu Zhen-Xin	7,526,000 7,526,000	100% 100%
KINGSHALE INDUSTRIAL LIMITED	Director	Formosan Rubber Group Inc. Representative: Hsu Zhen-Tsai, Hsu Zhen-Ji, Hsu Zhen-Xin	9,999	99.99%

6. Operational overview of affiliates:

						Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Company Name	Capital	Total Assets	Total Liabilities	Net income	Operating income	Operating Profit (loss)	Current Profit and Loss (after tax)	EPS (NT$) (after tax)
Ban Chien Development Co.,Ltd.	560,000	622,485	438	622,047	0	(1,590)	36,609	0.65
FRG US CORP.	461,349	424,613	2	424,611	0	(433)	(456)	(0.06)
KINGSHALE INDUSTRIAL LIMITED	34	0	0	0	0	0	0	0.00

• (II) Consolidated Financial Statements of Affiliated Enterprises: Please refer to Consolidated Financial Statements of the Parent and Subsidiaries for the most Recent Year Audited by the CPA” in the “V. An Overview of the Company’s Financial Status”.

(III) Consolidated Business Reports of Affiliated Enterprises: None.

• II. Transaction about the company’s private placement of securities during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

• III. Holding or disposal of shares in the company by the company's subsidiaries during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: none.

• IV. If any of the situations listed in Article 36, paragraph 3 subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report: None.

• V. Other matters that require additional explanation: None.

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Formosan Rubber Group Inc.

Chairperson: Hsu Zhen-Tsai