GPPC - Annual Report 2019 | FinancialReports.eu

Stock Code 1312

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ANNUAL REPORT 2019

Enquiry Website: http://mops.twse.com.tw Company Website: http://www.gppc.com.tw

Published on April 14, 2020

1. Name, title, telephone and email of spokesperson, deputy spokesperson

Spokesperson:

Name: Ching Fu Chen Title: Vice President, Financial Dept. Tel: (02)8770-4567 Email: [email protected] Deputy Spokesperson: Name: Chen Ming Chou Title: Senior Vice President Tel: (02)8770-4567 Email: [email protected]

2. Address and telephone of head office, branch and factory

3. Head office and factory:

Address: No. 4, Hsing Kung Rd., Dashe District, Kaohsiung City Tel: (07)351-3911

Taipei Office: Address: 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City Tel: (02)8770-4567

4. Name, address, telephone and website of stock transfer agent

5. Name: KGI Securities Co., Ltd., Brokerage Dept.

Address: 5F, No.2, Sec.1, Chongqing S. Rd., Taipei City Tel: (02)2389-2999

Website: http://www.kgieworld.com.tw/index/

6. Name of CPA of financial statements, CPA firm, address, telephone and website in the most recent year

Name: Ying Chia Hsiao, Wu Chang Wang Name of CPA firm: Crowe Horwath International

Address: 10F, No.369, Fuxing N. Rd., Taipei City Tel: (02)8770-5181

Website: http://www.crowehorwath.net

7. Name of stock exchange place for overseas listed securities and method for enquiry of overseas securities information: N/A

8. Company website: http://www.gppc.com.tw

`－` Policy of Quality of `－` Grand Pacific

All work together to do as what we say If you are dissatisfied we would not succeed

	Table of contents	Table of contents
One	Report to Shareholders........................................................................................................ 1
Two.	Company Profiles................................................................................................................. 6
	I.	Date of incorporation ................................................................................................. 6
	II.	Evolution history of the Company: ............................................................................ 6
Three.	Report on Corporate Governance...................................................................................... 9
	I.	Organization System .................................................................................................. 9
	II.	Information on Directors, Presidents, Senior Vice Presidents, Vice Presidents and
		Managers of Each Department and Branch ............................................................. 12
	III.	Remuneration to Directors (Including Independent Directors), President and Senior
		Vice President in the Latest Year ............................................................................. 18
	IV.	Overview on Performance of corporate governance ................................................ 27
	V.	Information on Certified Public Accountant fees .................................................... 68
	VI.	Information of a change (replacement) in the Certified Public Accountants (CPAs)
		.................................................................................................................................. 69
	VII.	The Company’s Chairman, President, managers in charge of financial affairs and
		accounting who have served with the CPA firm or its affiliates over the past one
		yearl .......................................................................................................................... 69
	VIII.	The fact that in the most recent year and as of the publication date of the Annual
		Report, transfer of shares, pledge or change in equity held by the directors,
		managers and major shareholders holding over 10% of the aggregate total............ 69
	IX.	Information of top shareholders ranking among the top ten, as related parties,
		spouses, blood relatives within the second degree of kinship to each other ............ 71
	X.	The number of shares held by the Company, the Company’s directors, managers
		and the businesses under control by the Company either directly or indirectly to the
		same re-investment business and consolidated shareholding ratio are combined and
		calculated ................................................................................................................. 71
Four.	Facts	of Capital Raising.................................................................................................... 72
	I.	Capital and Shares .................................................................................................... 72
	II.	Issuance of corporate bonds ..................................................................................... 78
	III.	Issuance of preferred shares ..................................................................................... 79
	IV.	Issuance of overseas deposit receipt certificates (DRC) .......................................... 79
	V.	Issuance of employee stock option certificates ........................................................ 79
	VI.	New shares to employees with restricted rights ....................................................... 79
	VII.	Merger/acquisition (M&A) or inward transfer of other firms’ new shares .............. 79
	VIII.	Implementation of capital utilization plans .............................................................. 79
Five.	Business Performance in Brief.......................................................................................... 80
	I.	Contents of business operation ................................................................................ 80
	II.	Market and production and sales overview: ............................................................ 88
	III.	Number of employees, average number of years of service, average age and
		academic degree credential distribution ratio in the past two years and as of the
		publication date of the Annual Report ..................................................................... 99
	IV.	Information of expenditures for environmental protection ...................................... 99
	V.	Labor relations ....................................................................................................... 102

	VI.	Key agreements ...................................................................................................... 105
Six.	Financial Highlights......................................................................................................... 106
	I.	Condensed balance sheets and consolidated statements of comprehensive income
		for the last five years, with statements of the names of CPAs and audit opinions . 106
	II.	Financial Analyses for the last five years ............................................................... 109
	III.	Audit Report of the Audit Committee for the Financial Statements in the most
		recent year .............................................................................................................. 113
	IV.	The Financial Statements in the most recent year .................................................. 114
	V.	The Company's individual financial statement duly certified by certified public
		accountants in the most recent year ....................................................................... 227
	VI.	The financial problems of the Company and its affiliates found in the most recent
		year and as of the publication date of the Annual Report issuance and the impact of
		such problems upon the Company’s financial position ......................................... 311
Seven.	Review of Financial Position, Financial Performance, and Risks Related Issues...... 312
	I.	Financial Position: Major reasons that led to significant changes in assets, liabilities
		and shareholders’ equity over the past two years and the impact thereof. Elaborate
		on the countermeasures in the future in case of a significant impact..................... 312
	II.	Financial Performance: Major reasons leading to significant changes in operating
		revenues, net operating profit and net profit before tax over the past two years and
		the very grounds to forecast the sales volume and the grounds thereof, their
		potential impact upon the finance and business operation and the countermeasures
		................................................................................................................................ 314
	III.	Cash flow: Analytical descriptions of changes in cash flow, corrective action plans
		for inadequate liquidity in the most recent fiscal year and analyses into the liquidity
		in the upcoming year .............................................................................................. 316
	IV.	Impact of major capital expenditure in the most recent year on financial operation
		................................................................................................................................ 317
	V.	The outward investment policies in the most recent year, the major causes leading
		to the profit or loss and the plans for corrective action and investment plan in the
		coming fiscal year. ................................................................................................. 318
	VI.	Analytical evaluation over risk affairs: .................................................................. 318
	VII.	Other significant events ......................................................................................... 321
Eight.	Special Disclosure............................................................................................................. 322
	I.	Related information of affiliates ............................................................................ 322
	II.	Facts of securities in private placement conducted in the most recent year and as of
		the publication date of Annual Report ................................................................... 327
	III.	Facts of Company's share certificates held and disposed by the subsidiaries in the
		most recent fiscal year and as of the publication date of the Annual Report ......... 328
	IV.	As supplementation as necessary ........................................................................... 328
Nine.	In the most recent year and as of the publication date of the Annual Report, events
	with significant impact upon shareholders’ equity or stock prices............................. 328

One Report to Shareholders

I. 2019 Business Report:

(I) Implementation Results of Operating Plan

The shrinking profitability of styrene in 2019 put an end to the good run over prior years. The sentiment from the fourth quarter of 2018 continued into the first quarter of 2019, with demand weakened in the downstream due to the trade war between China and the U.S. Some inventory was adjusted to achieve the balance in production and distribution. The demand gradually picked up in the second quarter, pushing up the spread and thus the profits. At this juncture, the average selling price was at the highest point throughout the year. The typical strengthening of demand and prices in the fourth quarter in China post the holiday in the first week of October did not happen. Meanwhile, the expectation for the new capacity Zhejiang Petroleum & Chemical and Hengli Petrochemical scheduled to come online after the Chinese New Year in 2020 squeezes the spread between SM (styrene monomer) and raw materials of the fourth quarter and thus the profit margin. The softening of demand and prices eroded the profitability of styrene and even resulted in losses. This has adverse effects of the annual profit.

In terms of styrene, we conducted scheduled turnaround for our Styrene Plant II only in the first quarter, 2019. Thanks to such efforts, our overall outputs increased by around 20,000 M.T., boosting the overall output up to nearly 364,000 M.T. Our overall shipment volume including the part within the Company’s own use hit 369,000 M.T., increasing by 25,000 M.T. compared with the preceding year.

The softening of the trade war between China and the U.S. in the first half of 2019 and the China government’s subsidy to the purchase of home appliances are positives to the ABS (acrylonitrile butadiene styrene) and PS (polystyrene) markets. As a result, profitability returned. The US-China trade war heated up in the third quarter, with the U.S. proposing to increase the tariff on home appliances and automobile components from China to 25%. This had significant and adverse influence on the ABS demand. Although the rising crude oil, identification reductions/exemptions and administrative levies on manufacturers in China mitigated the downward pressure on the economy, the buyers were conservative and focusing on inventory control. The declining prices narrowed the spread and the market was gloomy in the fourth quarter. The lack of clarity in the trade negotiation between China and the U.S. promoted customers to take a wait-and-see attitude and focus on the base demand for low-priced products. This suppressed topline and profitability.

The consolidated revenues of Grand Pacific Group for the year of 2019 were NT$20,470 million, a decrease of $4,270 million from 2018; consolidated net income before tax was $2,740 million, a decrease of $1,320 million from 2018; consolidated net income after tax was $2,180 million and consolidated net income after tax attributable to owners of the Company was $2,070 million.

The entity revenue of the Company was $16,200 million, representing 79.1% of consolidated revenue. The 2019 entity operating status is summarized as follows:

Main products between two years are compared as follows: The Company’s 2019 annual production volumes of SM was 365,490 tons, an increase of 6.1% from 344,540 tons in

2018; sale volume was 322,931 tons, an increase of 7.5% from 300,435 tons in 2018; Sale amount of SM was $9,767,995 thousand, a decrease of 16.7% from $11,726,280 thousand in 2018. Annual production volume of ABS was 89,492 tons, a decrease of 1.4% from 90,718 tons in 2018; sale volume was 90,933 tons, a decrease of 0.4% from 91,254 tons in 2018; the sale amount of ABS was $4,309,782 thousand, a decrease of 19.3% from $5,337,138 thousand in 2018. Annual production volume of Nylon was 14,805 tons, a decrease of 40.1% from 24,725 tons in 2018; sale volume was 15,077 tons, a decrease of 38.9% from 24,675 tons in 2018; the sale amount of Nylon was $1,539,118 thousand, a decrease of 42.6% from $2,682,897 thousand in 2018.

In total, the Company’s net revenue for the year of 2019 was $16,229,085 thousand, a decrease of 20.1% from $20,305,094 thousand for the year of 2018; the net operating profit for the year of 2019 was $1,040,045 thousand, a decrease of 54.8% from $2,299,040 thousand of net operating profit for the year of 2018; the net gain on re-investment for the year of 2019 was $1,358,076 thousand, an increase of 9.6% from $1,239,183 thousand of net gain on investment for the year of 2018. The net income after tax for the year of 2019 was $2,070,125 thousand.

(II) R&D Status

Styrene represents the Company's core niche, with tentacles extending upward the crystal engineering plastic nylon 66, and laid downward to the optimization of ABS quality. These represent as the very orientations of our efforts in the year.

This year, the Company will continue with the following tasks:

We spared no effort to optimize agglomerated PBL large particle latex to improve ABS dyeing with wholehearted effort to develop high temperature nylon engineering plastic toward the three major targets including notably energy saving and waste reduction.
With PBL (polybutadiene latex) rubber agglomerated large particle latex, we further improved the quality of ABS products with better dyeing, electroplating grades, tube levels, flame retardant grades, high impact strength and rigidity for use in vehicle battery materials.
We tried hard to expand the market of nylon industrial yarn and develop derived high-temperature nylon, develop engineering plastics such as super tough nylon, heat-resistant super tough nylon, soft, water transparent grade and blended with PPO to create high performance, high quality, high price nylon 66 plastic products.
We are committed to the long-term diversification strategy, with investments in the fully integrated polypropylene (PP) facilities in Quanzhou, China with new capacities in propane dehydrogenation (PDH) and polypropylene (PP). The purpose is to extend our footprint from SM to propylene related products.

II. Business Plan Summary for 2019:

(I) Business Strategy
To maintain continuous existence: implement sustainable development.

To be successful: Strengthen crisis awareness and hold ground in survival niche.
To obtain stability: Implement annual maintenance and rectification projects and maintain steady sales profits.
To be pragmatic: Use our capabilities to extend and secure our existing competitive position and pursue the growth of our business.
To refine: Enhance the added value of all individuals and teams.
(II) Expected Sales Volume and Basis for Projections
Styrene Monomer(SM)

It was expected that Zhejiang Petroleum and Hengli Petrochemical-Dalian in Mainland China would complete their test runs, respectively, at the end of 2020, and officially launch after the 2020 Chinese New Year. Unfortunately, with the outbreak of COVID-19 during the Chinese New Year, compounded by the epidemic preventive measures of city lockdowns in Mainland China that affected workers and traffic, the production resumption after Chinese New year is nearly completely stopped. Due to the drastic decline of downstream demand, SM inventory in eastern China has hit record highs over and over, which is forcing Asian producers to lower their output in response. In 2020, the third Styrene plant is scheduled for annual maintenance between February and March, and the annual output is estimated to be close to 352,000 tons.

The crucial points for the overall Styrene market in 2020 are still the global economy under the impact of an epidemic and the evolution of Chinese market. In the first half of the year, the supply decreased due to year-end holidays in Northeast Asia/U.S. and Europe, but this was also the worst period of the epidemic. In the beginning of the year, the city lockdown effect, that started in China, was expanded to major markets, such as Europe and U. S., along with the spread of the epidemic. The downstream end products of styrene, especially the home appliance industry, were significantly impacted. This, in turn, affected the already fragile market psychology, which made the pricing extremely pessimistic and then oil prices dropped sharply. The degree of price collapse is comparable to that of the 2008 global financial crisis. In the second half of the year, after the post-holiday production returns to normal output, the impact of COVID-19 on China and the Global economy is the focus of our attention for the entire year.

Acrylonitrile - Butadiene-Styrene copolymer resin (ABS)

In the first half of 2020, market demand decreased due to the Lunar New Year and COVID-19 epidemic, which may affect operating performance. It is expected that the epidemic will be under control by the third quarter, and downstream customers' production resumption will increase demand, and this will also be amidst the traditional peak season for petrochemical products. The third quarter is expected to be better than the first half of the year, and profits will rebound. In addition, there is not much new production capacity expected for ABS in 2020, and as demand growth slows down, the supply and demand will show a relatively weak balance. However,

with the expected downward trend for oil prices and upstream raw materials, market prices are relatively weak. ABS is expected to usher in an industry development opportunity brought on by the abundant raw materials supply and relatively low raw materials costs, and so profits are expected to rise again. In 2020, the sales of ABS will hold and consume the full output of 93,810 tons. Although faced with the challenges of the COVID-19 epidemic on economic demands and operational variables, the Company shall rationalize inventory, optimize production and sales, and use high-value strategies to carefully and continuously implement product differentiation, expand niche markets, and create profits.

Hydrogen (H2)

In 2019, the sales volume of hydrogen was 10.66 million cubic meters, exceeding the annual target of 9.44 million cubic meters by about 1.22 million cubic meters, an annual increase of 11.27%.

Although a steady increase in use by pipeline customers is expected in 2020, the sales target is still estimated at 9.48 million cubic meters.

Steam and Electricity

In 2019, total steam production and sales were 2,075,095 metric tons and 173,627 metric tons respectively; electricity generation was 321,154,200 kWh, of which, 152,740,800 kWh were sold to Taiwan Power Company.

An annual maintenance shutdown is scheduled for March 2020. Annual planned production and sales of steam are 2,001,233 metric tons and 156,635 metric tons, respectively; electricity generation is 304,584,000 kWh, of which, 139,364,302 kWh is sold to Taipower.

5.

Nylon66 (PA66)

The shortage of nylon 66 in the fourth quarter of 2018 continued in to the first quarter of 2019, and the price remained steadily at the high-end. However, due to the excessive price increase, most customers in the second quarter assumed a wait-and-see attitude, resulting in a decline of downstream consumption volume, causing the price to drop somewhat. Due to the poor automobile market in mainland China, which affected domestic customers' demand for nylon 66, the demand in the third quarter was weak. In the fourth quarter, market demand gradually stabilized, and the sales volume increased, but the attitude remained conservative.

As for the 2020 outlook, since nylon 66 was in a low base period in 2019, the general consensus is that the demand and the price will gradually stabilize this year. In addition, downstream demand will grow steadily to help maintain the balance between supply and demand. As for the future growth direction, the Company will continue to aggressively develop new application markets and specifications, such as: industrial yarns slice, textile grade products and special grades of nylon 66 composite engineering plastics, so as to increase the diversity of products, and to increase the high added value products within the overall nylon 66 business. The Company will seek innovation with stability, thus creating greater profits.

III. Future company development strategies:

Our Company will continue to solidify and to strengthen the competitiveness of the existing core business, by focusing on our base markets: SM, ABS, Hydrogen and Nylon 66. The Company will implement cost, efficiency, and quality optimization programs, and strive to expand niche sales channels, thus creating profits based on the continuous pursuits of steady growth in both quality and quantity. In addition, the Company is preparing and constructing future business projects in the three-carbons industrial chain, including propane dehydrogenation and polypropylene production, in Quangang Chemical Industrial Park, Quanzhou City, Fujian Province. Furthermore, the Company is taking the lead by vigorously deploying research and development at the R&D center, of high-performance nylon fibers, engineering plastics and other high-value products, so as to lay the foundations for the company's newly diversified market potential.

IV. External competition environment, regulatory environment and overall business environment impact:

In preparing and responding to the severe internal and external challenges currently presented, the Company will continue to fulfill the promise of achieving every targeted benefit. Meanwhile, in order to meet the high standards requirements of industrial safety and environmental protection in the aspects of safe production, energy saving and carbon reduction, the Company has continuously compiled relevant capital expenditures in the past two decades in order to introduce advanced improvements, such as the best controllable technology available, and to establish environmentally friendly production methods as the fundamental elements of our Company's operation at all times. Thereby, the Company may actively demonstrate its sacred mission of being a good corporate citizen. Looking forward to its future, with the gradual improvement of various hardware and software construction projects and the continued hard work of the enterprise team, the Company shall meet shareholders' expectations, and continue to create higher-levels of new businesses with corporate synergy.

At last, we wish all shareholders,

good health and good luck!

Responsible person: Pin Cheng Yang Manager: Chia Hsiung Tseng Chief accountant: Ling Chu Chen

Two. Company Profiles

I. Date of incorporation: September 25, 1963

Address of Head Office: No. 4, Hsing Kung Rd., Dashe District, Kaohsiung City Tel: (07)351-3911

Address of Taipei Office: 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City Tel: (02)8770-4567

II. Evolution history of the Company:

2020 QuanZhou Grand Pacific Chemical Co., Ltd. was established mainly to produce Propylene by Propane Dehydrogenation, Polypropylene and Hydrogen in Fujian Province.
2018 ZhangZhou Chi Mei Chemical, a joint venture with Chi Mei Corp., was established mainly to produce ABS. GPPC owns a 30.4% share of the joint venture.
2016 The 2[nd] Nylon 66 production line was added to meet the demand for engineering plastics and industrial filament application.
2014 Nylon 66 Products received UL High temperature RTI certificate. 2013 Audit Committee, replacing the supervisor’s function, is set up to strengthen corporate governance.

2016 2014 2013	The 2ndNylon 66 production line was added to meet the demand for engineering plastics and industrial filament application. Nylon 66 Products received UL High temperature RTI certificate. Audit Committee, replacing the supervisor’s function, is set up to strengthen corporate governance.
2012	Nylon Division was established in January and the production started in July.
	ABS capacity expansion was completed, increasing the annual output.
	Subsidiary GPPC Chemical Corp. and BC Chemical Corp. were merged, with
	GPPC Chemical Corp. being the surviving company.
2011	Two seats of independent directors were added to strengthen corporate
	governance.
	Compensation Committee was established.
2010	A cogeneration plant was completed and started operation in May.
	Zhenjiang GPPC Chemical Co., Ltd. and Zhenjiang Chi Mei Co., were officially
	merged on July 1st.
	GPPC’s styrene monomer plant No. 3 completed the debottlenecking expansion
	construction in December, and the SM capacity was increased.
2009	Grand Pacific Chemical (Thailand) Co., Ltd. was approved by Thailand's Ministry
	of Commerce to dissolve in August.
	A successful trial run was conducted for steam production facilities in
	cogeneration plant in October.
2008	Germany SAP information system was successfully introduced.
	Subsidiary, Zhenjiang merger agreement was signed with Chi Mei company in
	April, while GPPC owned 30.4% shareholding of the surviving company.
	Specialty Chemicals Business Division was set up in August.
2007	Promoting three-in-one ISO system integration with ISO 9001: 2000 and ISO
	14001: 2004 certificates transferred to SGS Taiwan for certification.
	Zhenjiang GPPC Chemical Co., Ltd. expanded its SAN/ABS capacity.
	A cogeneration plant started construction.
2006	BC Chemical transformed the original GPS production line into SAN. GPPC

	expanded its ABS capacity. Adding new grade of ABS product to meet customer’s
	needs.
2005	GPPC was awarded ASUS "Green Environment Management System" certificate.
2004	Delta Petrochemical's styrene monomer plant No. 1, being the first in Taiwan was
	dismantled. The plant’s thirty-year service was culminated with a grand ceremony
	by GPPC acknowledging its long term contribution.
2003	GPPC was awarded SONY "Green Partner" certificate and OHSAS 18001
	registration by SGS.
2002	Zhenjiang GPPC Chemical Co., Ltd. expanded its SAN/ABS capacity.
2001	GPPC was awarded ISO 9001:2000 registration by the Bureau of Standards,
	Metrology and Inspection, Ministry of Economic Affairs, R.O.C.
2000	BC Chemical expanded its HIPS capacity.
	Zhenjiang GPPC Chemical Co., Ltd. expanded its SAN/ABS capacity.
1999	GPPC’s styrene monomer plant No. 3 was completed.
1997	GPPC was awarded both ISO 9002 and ISO 14001 certificates by the Bureau of
	Commodity Inspection and Quarantine, Ministry of Economic Affairs, R.O.C.
	GPPC pursued a diversified investment strategy.
1996	GPPC subsidiary, Zhenjiang GPPC Chemical Co., Ltd., was founded in Jiangsu
	Province, China.
	Grand Pacific Chemical (Thailand) Co., Ltd. expanded its ABS capacity.
1995	GPPC acquired Delta Gas Products, a high purity hydrogen producer.
1994	ABS/SAN capacity was expanded.
	The production process for SM plant No. 2 was streamlined.
1992	ABS/SAN capacity was expanded.
	GPPC invested in CITC Enterprise in Malaysia, a pre-colored plastic compounder.
1991	GPPC acquired BC Chemical, a high-impact and general purpose polystyrene
	producer.
	GPPC invested in Grand Pacific Chemical (Thailand) Co., Ltd. and acquired a
	Thai ABS plant.
1990	GPPC acquired GPPC Chemical, a high-impact polystyrene (HIPS) producer.
1988	GPPC was listed on the Taiwan Stock Exchange.
1987	ABS/SAN plant was expanded to increase capacity.
1984	Following a corporate reorganization, Delta Petrochemical became Grand Pacific
	Petrochemical Corp.
	The company's first ABS/SAN plant was completed. The plant marked the first
	step in Grand Pacific's product diversification and vertical integration strategy.
1981	Delta Petrochemical's styrene monomer plant No. 2 was completed.
1974	Delta Petrochemical's styrene monomer plant No. 1, being the first in Taiwan, was
	completed and started production.
1973	Grand Pacific Petrochemical Corporation (GPPC) was founded under the name of
	Delta Petrochemical Corporation.

In the most recent year and as of the publication date of the Annual Report:

(1) Fact of merger/acquisition (M&A): N/A.
(2) Reorganization in the wake of reinvestment in an affiliated enterprise: N/A.
(3) Significant shift, change of directors and supervisors or key shareholders with shareholding in excess of 10%: N/A.
(4) Change in operating right, operating manner or significant changes in contents of business operation: N/A.
(5) Other significant events likely to affect shareholders’ equity and the impact upon the Company: N/A.

Three. Report on Corporate Governance

I. Organization System

(I) Organization chart

Organization chart of Grand Pacific Petrochemical Corporation

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Shareholders’ Meeting
Board of Directors
Compensation Audit Chairman Investment Internal Audit
Committee Committee Committee
President
Special Task Forces Total Quality Management Committee
Senior Vice Senior Vice
Senior Vice
President President
President
Kaohsiung
Plant
Dept.
Polymer Plant Safety Dept. Environment & Maintenance Plant Plant Operation Utility Plant Monomer Plant Corporate R&D Purchasing Dept. Sales Dept. (SM) (Polymer) Sales Dept. Accounting Dept. Finance Dept.
----- End of picture text -----

(II) Business operations of major departments

Departments	Contents of duties
General Administration Dept.	1. Track performance evaluation on business policies and business plans 2. Map out the human resources related policies, including notably selection of talents, putting talents into optimal use, cultivation of talents and retaining talents. 3. Work out plans for utilization of human resources and implementation thereof. 4. Maintain and assure sound and harmonious ties between employees and the Company. 5. Take charge of externalpublic relations,internal communications and coordination.
Internal Audit	Take charge of audit affairs
Accounting Dept.	1. Map out, verify and compile annual budgets. 2. Take charge of calculation of the Company's production costs, accounting affairs and prepared for final account settlement. 3. Provide managerial reports and statements.
Sales Dept.(SM)	1. Contact and negotiate for procurement of bulk petrochemical materials and coals. 2. Determine and implement the Company’s marketing strategy in petrochemical products and steam and electricity. 3. Provide information linked up with petrochemical industry and help assess investmentplans.
Sales Dept.(Polymer)	1. Take charge of formulation and execution, marketing evaluation and development of domestic and foreign marketing strategies for plastic products (ABS / PS / nylon). 2. Take charge of distributors’ establishment, coordination and contact affairs. 3. Execute administrative affairs for sales of a variety of products of the Company and procurement of bulk materials. 4. Provide market updates,coordinate with research & development andproducts.
Purchasing Dept.	1. Take charge of procurement of chemicals and equipment from sources at home and abroad. 2. Take charge of execution of contracts for project outsourcing and procurement affairs. 3. Take charge of inventory control and procurement points of chemicals. 4. Mapout information system.
Finance Dept.	1. Take charge of the Company's financial planning, asset management and utilization of funds. 2. Take charge of the Company, equity affairs, general affairs as well as a variety of administrative affairs. 3. Take charge of the Company's financial risk management, financial & wealth management and investment strategies.
Corporate R&D	1. Focus on research & development of core products and technology & know-how. 2. Upgrade the quality of core products and improve the production manufacturing process. 3. Take charge of quality improvement, technical upgrade and general research programs. 4. Assure success in production of industrial silk grade nylon and development of special grade nylon; 5. Orient to energy saving & carbon reduction, high valued products and green and optimized manufacturing process. 6. Assure excluding implementation of manufacturing process improvement, effective implementation exactly in accordance with the specified procedures. 7. Carryout evaluation of a varietyof investment abroad.
General manager office	Take overall charge of all business affairs of KaohsiungPlant.
Monomer Plant	Assure successful accomplishment of high quality, low cost production in annual production target of styrene and hydrogen.
Polymer Plant	Assure successful accomplishment of high quality, low cost production in annual production target of annualproduction target ofplasticproducts.
Plant Operation Dept.	1. Take charge of storage, transportation, personnel and general affairs 2. Serve as a handy bridge to assure sound communications between Kaohsiung Plant employees and the Company. 3. Assure harmonious ties between the Companyand the Union.

Departments	Contents of duties
Maintenance Plant	1. Take charge of maintenance & repair services for equipment & facilities for entire Plant. 2. Take charge of additional construction and construction modification. 3. Take charge of power systems of Kaohsiung Plant. 4. Maintenance and on-site inspection for undergroundpipelines outside theplant
Environment & Safety Dept.	1. Oversee all units concerned in labor safety & health management to assure safety & health oriented working environments. 2. Take charge of exhaust water disposal, control and prevention of air, noise pollution to assure compliance with requirement by laws. 3. Take charge of laboratorytestingandqualitycontrol affairs.
Utility Plant.	1. Supply common fluids, including steam, water, air, nitrogen, and bottom oil for the entire Plant. 2. Operate steam power plants to generate electricity. 3. Supplyfireprevention oriented water system for the entire Plant.

II. Information on Directors, Presidents, Senior Vice Presidents, Vice Presidents and Managers of Each Department and Branch

(I) Information on Directors (1)

and Branch (I) Information on Directors (1)	and Branch (I) Information on Directors (1)	and Branch (I) Information on Directors (1)	and Branch (I) Information on Directors (1)	and Branch (I) Information on Directors (1)	and Branch (I) Information on Directors (1)
																	April 14,2020
Title	Nationality or venues of registration	Name	Sex	Date when elected or to the position	Term	Date of on Board for the First Time (yy/mm/dd)	Shareholding When on Board		Shareholding for the Time Being		Shareholding of the Spouse, Underage Children for the Time Being		Shareholding Held in the Name of a Third Party		Academic Qualifications/ Experience	Concurrent Positions in this Group and Other Companies	Other Managers, Directors or Supervisors that Have Spousal Relationship or are within the Second Degree of Kinship with the Concerned Director/Supervisor			Remark (Note 8)
							Number of Shares	Share- holding Rate	Number of Shares	Share- holding Rate	Number of Shares	Share- holding Rate	Number of Shares	Share- holding Rate			Title	Name	Relation
Chairman	Republic of China	Jing Kwan Investment Co., Ltd. Representative: Pin ChengYang	Male	June 27, 2017	June 27, 2017 ~ June 26, 2020	June 24, 2011	20,380,000 0	2.25% 0	20,280,000 0	2.24% 0	0 0	0 0	0 0	0 0	Master, Institute of Chemical Engineering, National Cheng Kung University	Note 1	Nil	Nil	Nil	Nil
Independent Director	Republic of China	Kuang Hsun Shih	Male	June 27, 2017	June 27, 2017 ~ June 26, 2020	June 15, 2012	0	0	0	0	0	0	0	0	Ph.D. in Finance, Nova Southeastern University, Florida, the U.S.	Note 2	Nil	Nil	Nil	Nil
Independent Director	Republic of China	Sung Tung Chen	Male	June 27, 2017	June 27, 2017 ~ June 26, 2020	June 15, 2012	0	0	0	0	0	0	0	0	College of Law, National Chengchi University (Legal Division)	Note 3	Nil	Nil	Nil	Nil
Independent Director	Republic of China	Wen Tzong Chen	Male	June 27, 2017	June 27, 2017 ~ June 26, 2020	June 25, 2014	0	0	0	0	0	0	0	0	MBA, Rider University, the U.S. Master, Institute of Law, Soochow University	Note 4	Nil	Nil	Nil	Nil
Director	Republic of China	Lai Fu Investment Co., Ltd. Representative: Chen ChingTing	Male	June 27, 2017	June 27, 2017 ~ June 26, 2020	June 24, 2011	100,000 0	0.01% 0	100,000 0	0.01% 0	0 0	0 0	0 0	0 0	Department of Law, Fu Jen Catholic University	Note 5	Nil	Nil	Nil	Nil
Director	Republic of China	Lai Fu Investment Co., Ltd. Representative: Chia HsiungTseng	Male	June 27, 2017	June 27, 2017 ~ June 26, 2020	June 24, 2011	100,000 0	0.01% 0	100,000 0	0.01% 0	0 0	0 0	0 0	0 0	Master, Chemical Engineering, National Taiwan University	Note 6	Nil	Nil	Nil	Nil
Director	Republic of China	Chung Kwan Investment Co., Ltd. Representative: Hsi Hui Huang	Male	June 27, 2017	June 27, 2017 ~ June 26, 2020	June 27, 2005	28,262,722 0	3.12% 0	28,262,722 0	3.12% 0	0 0	0 0	0 0	0 0	Department of Accounting, Feng Chia University	Note 7	Nil	Nil	Nil	Nil

Note 1: Chairman, GPPC Chemical Corporation; Director, Land & Sea Capital Corp.; Director, GPPC Investment Corp.; Director, Goldenpacific Equities Ltd.; Director, Videoland Inc.; Director, Zhenjiang Chimei Chemical Co., Ltd.; Director, KK Enterprise Co., Ltd.
Note 2: President of CTBC Business School; Independent director, Senao Networks, Inc.; Independent director, Samebest Co., Ltd.; Independent director, PCL Technologies, Inc.
Note 3: Attorney at Law, Cheng Tai Law Offices; Independent director, Hua Nan Financial Holdings Co., Ltd.; Compensation Committee member, Hua Nan Financial Holdings Co., Ltd; Audit Committee member, Hua Nan Financial Holdings Co., Ltd
Note 4: Director, Test Rite International Co., Ltd.; Independent director, Advancetek Enterprise Co., Ltd.; Independent director, Hiyes International Co., Ltd.
Note 6: Director, GPPC Chemical Corporation; Director, Zhangzhou Chimei Chemical Co., Ltd.
Note 7: Chairman, He Xin Venture Investment Enterprise Co., Ltd.; Chairman, GPPC Investment Corp.; Chairman, Goldenpacific Equities Ltd.; Chairman, GPPC Hospitality And Leisure Inc.; Director, Land & Sea Capital Corp.; Director, Videoland Inc.; Director, KK Enterprise Co., Ltd.; Supervisor, GPPC Chemical Corporation, Senior Vice President, Videoland Inc.
Note 8: Where the Company's Chairman and President or a ranking staff member of the equivalent level (the higher manager) were in a same person, as spouse or blood relatives within the first degree of kinship to each other, the Company should explain the reasons why, rationality, necessity and countermeasures (e.g., an increase in the seat(s) of independent director(s) while one half majority of directors do not concurrently serve as an employee or manager) and such relevant information.
Note 5: Senior Lawyer, T.Y.T. Law Offices; Practical Teacher in level equivalent to Current Assistant Professor, Department of Law, Fu Jen Catholic University; Independent director, Allied Industrial Corp., Ltd.

Major shareholders of juristic person shareholders

Major shareholders of juristic person shareholders	Major shareholders of juristic person shareholders	Major shareholders of juristic person shareholders
April 14,2020
Name of juristic person shareholder (Note 1)	Key shareholders of the juristic person shareholder(Note 2)	Shareholding ratio(%)
Lai Fu Investment Co., Ltd.	Han ChungPan	100.00
JingKwan Investment Co., Ltd.	Yu MingInvestment Co., Ltd.	96.62
	Chun Tai Wu	3.35
	Yi YingHuang	0.03
ChungKwan Investment Co., Ltd.	Kuan He Development Co., Ltd.	99.03
	Jui Hui Lin	0.25
	Wen LungYen	0.25
	Wen Tzu Yen	0.175
	Wen Hsi Yen	0.175
	MingChi Tsai	0.075
	Hsueh E Chang	0.05

Note 1: Where the directors and supervisors are representatives of juristic person shareholders, please enter the name/title of the juristic person shareholder.

Note 2: Fill up the names of key shareholders of the juristic person shareholders (among the top ten in terms of shareholding ratios) and shareholding ratio thereof. Where the key shareholder is a juristic person, please fill up Table II below.

Note 3: Where a juristic person shareholder is not in an organization as a company, the aforementioned name of shareholder and the shareholding ratio would just be the name of the investor or donor and the investment or donation ratio thereof. Nil.

Key Shareholders Where the Key Shareholders Are Juristic Persons

Key Shareholders Where the Key Shareholders Are Juristic Persons	Key Shareholders Where the Key Shareholders Are Juristic Persons	Key Shareholders Where the Key Shareholders Are Juristic Persons
April 14,2020
Names of juristic persons	Key shareholders of the juristic person shareholder	Shareholding ratio(%)
Yu MingInvestment Co., Ltd.	Wei HungInvestment Co., Ltd.	100.00
Kuan He Development Co., Ltd.	Jui Hui Lin	25.01
	Chin Li Investment Co., Ltd.	24.93
	Chuan Wei Investment Co., Ltd.	24.93
	ChungChun Investment Co., Ltd.	19.93
	ChungChengInvestment Co., Ltd.	5.00
	Wen LungYen	0.09
	Wen Hsi Yen	0.03
	Wen Tzu Yen	0.03
	MingChi Tsai	0.03
	Wen Hui Yen	0.03
	Ya Ju Wu	0.00001

Note 1: Where the key shareholder in Table I above is a juristic person, please enter the name of that juristic person. Note 2: Fill up the names of key shareholders of the juristic person shareholders (among the top ten in terms of shareholding ratios) and shareholding ratios thereof.

Information on Directors (2)

April 14, 2020

Terms Name (Note 1)	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Number of the Other Public Companies in Which the Concerned Director Acts Concurrently as an Independent Director
	An instructor in or a higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the company in a public or a private junior college, college, or university	A judge, public prosecutor, attorney, certified public accountant, or other professional or technical specialists who has passed a national examination and been awarded a certificate in a profession necessary for the business of the company	Have work experience in the area of commerce, law, finance, or accounting, or otherwise necessary for the business of the company	1	2	3	4	5	6	7	8	9	10	11	12
Chairman: Pin Cheng Yang Representative of Jing Kwan Investment Co.,Ltd.	No	No	Yes													0
Independent director: Kuang Hsun Shih	Yes	No	Yes													3
Independent director: Sung TungChen	No	Yes	Yes													1
Independent director: Wen TzongChen	Yes	Yes	Yes													2
Director: Chen Ching Ting Representative of Lai Fu Investment Co.,Ltd.	No	Yes	Yes													1
Director: Chia Hsiung Tseng Representative of Lai Fu Investment Co.,Ltd.	No	No	Yes													0
Director: Hsi Hui Huang Representative of Chung Kwan Investment Co.,Ltd.	No	No	Yes													0

Note 1: The number of boxes is subject to adjustment as the actual requirements may justify.

Note 2: Where the directors and supervisors have served in such condition meeting any event that falls within a situation among those enumerated below within two (2) years before being appointed, please mark “  ” on the codes so represented below:
(1) Not an employee of the company or any of its affiliates.
(2) Not a director or supervisor of the company or any of its affiliates. (This, nevertheless, does not apply to cases where the person is an independent director of the Company, its parent company or any subsidiary or a subsidiary with same parent company where the independent directors perform multiple duties concurrently among themselves)
(3) Not a natural person shareholder who holds shares, together with those held by the person’s spouse, minority or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding share of the company or rank as top-10 shareholders.
(4) Not a spouse, relative within the second-degree relatives, or lineal relative within the third degree by blood, of any of the managers specified under (1) or (2) (3).
(5) Not as a director, supervisor or a director of a corporate shareholder who directly holds more than 5% of the Company's total issued shares, the top five shareholders or representative designated to serve as a director, supervisor or a director or an employee of a corporate shareholder in accordance with Paragraphs 1 or 2 under Article 27 of the Company Act (This, nevertheless, does not apply to cases where the person is an independent director of the Company, its parent company or any subsidiary or a subsidiary with same parent company where the independent directors perform multiple duties concurrently among themselves in accordance with the Act or the laws and ordinances concerned prevalent in the home country).
(6) The directors and supervisors or employees of another company not under control by a same person as the Company's directors with one half majority of the shares (This, nevertheless, does not apply to cases where the person is an independent director of the Company, its parent company or any subsidiary or a subsidiary with same parent company where the independent directors perform multiple duties concurrently among themselves in accordance with the Act or the laws and ordinances concerned prevalent in the home country).
(7) Not as a director (trustee), supervisor (supervising officer) or employee of another company or institution as the same person or the spouse thereof of the Company's Chairman, President or person of equivalent position (This, nevertheless, does not apply to cases where the person is an independent director of the Company, its parent company or any subsidiary or a subsidiary with same parent company where the independent directors perform multiple duties concurrently among themselves in accordance with the Act or the laws and ordinances concerned prevalent in the home country).
(8) Not as a director (trustee), supervisor (supervising officer) , manager or a shareholder holding more than 5% of the shares of a specific company or institution in financial or business transaction with the Company (This, nevertheless, does not apply to a specific company or institution which holds more than 20%, less than 50% of the aggregate total

outstanding shares of the Company, and where the company and its parent company, subsidiary or a subsidiary with the same parent company where the independent directors perform multiple duties concurrently among themselves according to the Act or the laws prevalent locally.)

(9) Not as the enterprise proprietor, partner, director (trustee), supervisor (supervisory officer), manager and the spouse thereof of the professionals, sole proprietors, partners, companies or institutions rendering auditing, commercial, legal, financial, accounting and such relevant services to the Company or affiliated enterprises thereof with remuneration obtained over the past two years not beyond NT$500,000. This, nevertheless, does not apply to a member of the Open Acquisition Committee, Compensation Committee or Special Merger/Acquisition (M&A) Committee in accordance with Securities and Exchange Act, Business Mergers and Acquisitions Act and relevant laws.
(10) Not in a relationship as spouse or a relative within the second degree of kinship with any other directors.
(11) Not been a person or any conditions defined in Article 30 of the Company Act.
(12) Not under Article 27 of the Company Act with government, juristic person or the representative thereof successfully elected.

(II) Information on President, Senior Vice Presidents, Vice Presidents and the Mangers of Each Department and Branch

													April 14,2020	April 14,2020	April 14,2020	April 14,2020
Position Title (Note 1)	Nationality	name	Sex	Date of on Board (mm/yy/dd)	Shareholding		Shareholding of the Spouse and Underage Children		Shareholding Held in the Name of a Third Party		Main Experience/ Educational Background (Note 2)	Concurrent Positions in Other Companies at present	Other Managers that Have Spousal Relationship or are within the Second Degree of Kinship with the Concerned Person			Remark (Note 3)
					Number of Shares	Shareholding Ratio	Number of Shares	Shareholding Ratio	Number of Shares	Shareholding Ratio			Title	Name	Relation
Chairman	Republic of China	Pin Cheng Yang	M	04/15/2018	0	0	0	0	0	0	Master, Institute of Chemical Engineering, National Cheng Kung University	1. Chairman, GPPC Chemical Corporation 2. Director, Land & Sea Capital Corp. 3. Director, GPPC Investment Corp. 4. Director, Goldenpacific Equities Ltd. 5. Director, Videoland Inc. 6. Director, Zhenjiang Chimei Chemical Co., Ltd. 7. Director, KK Enterprise Co., Ltd.	Nil	Nil	Nil
President	Republic of China	Chia Hsiung Tseng	M	05/01/2019	0	0	0	0	0	0	Master, Chemical Engineering, National Taiwan University	1. Director, GPPC Chemical Corporation 2. Director, Zhangzhou Chimei Chemical Co., Ltd.	Nil	Nil	Nil
Senior Vice President	Republic of China	Hsi Hui Huang	M	04/16/2003	0	0	0	0	0	0	Department of Accounting, Feng Chia University	1. Chairman, He Xin Venture Investment Enterprise Co., Ltd. 2. Chairman, GPPC Investment Corp. 3. Chairman, Goldenpacific Equities Ltd. 4. 5. Director, Land & Sea Capital Corp. 6. Director, Videoland Inc. 7. Director, KK Enterprise Co., Ltd. 8. Supervisor, GPPC Chemical Corporation 9. Senior Vice President, Videoland Inc.	Nil	Nil	Nil
Senior Vice President	Republic of China	Chen Ming Chou	M	03/01/2011	0	0	0	0	0	0	Master, Chemical Engineering, National Taiwan University	1. Director, GPPC Investment Corp. 2. Director, Zhenjiang Chimei Chemical Co., Ltd. 3. Director, Goldenpacific Equities Ltd.	Nil	Nil	Nil
General Manager	Republic of China	Jen Chieh Liang	M	03/01/2011	0	0	0	0	0	0	Master, Department of Mechatronics Engineering, National Kaohsiung University of Science and Technology	1. Director, GPPC Chemical Corporation 2. President, GPPC Chemical Corporation	Nil	Nil	Nil
Vice President	Republic of China	Fu Hua Tsao	M	02/01/2017	0	0	0	0	0	0	Bachelor, Chemical Engineering, Tamking University	Nil	Nil	Nil	Nil
Vice President	Republic of	Wen Hui	M	02/01/2019	0	0	0	0	0	0	Master,Department of Safety,	Director,Zhangzhou Chimei Chemical	Nil	Nil	Nil

	China	Lin				Health and Environmental Engineering, National Kaohsiung University of Science and Technology	Co., Ltd.
Vice President	Republic of China	Ching Fu Chen	M	02/01/2019	0	Bachelor, Department of Accounting, Soochow University	1. Supervisor, GPPC Investment Corp. 2. Director, Videoland Inc. 3. Supervisor, GPPC Hospitality And Leisure Inc. 4. Supervisor, Zhangzhou Chimei Chemical Co., Ltd.	Nil	Nil	Nil
Director (Retired)	Republic of China	Shih Hsin Wei	M	08/01/2012~ 03/27/2019	0	Chemical Engineering, Tunghai University	Nil	Nil	Nil	Nil
Director	Republic of China	Chih Jung Wu	M	07/01/2013	0	Dept. of Commercial Documentation, Tamsui Institute of Business Administration	Nil	Nil	Nil	Nil
Director	Republic of China	Hung Min Hsueh	M	07/01/2017	0	Master, Graduate Institute of Environmental Engineering, National Cheng Kung University	Nil	Nil	Nil	Nil
Director	Republic of China	Tsung Ming Chang	M	05/11/2018	0	Master, Institute of Chemical Engineering, National Cheng Kung University	Nil	Nil	Nil	Nil
Director	Republic of China	An Teng Lee	M	03/28/2005	0	Master, Department of Logistics Management, National Kaohsiung University of Science and Technology	Nil	Nil	Nil	Nil
Director	Republic of China	Ling Chu Chen	F	01/01/2009	0	Bachelor, Accounting Section, Dept. of Commerce, Providence University	Director, GPPC Hospitality And Leisure Inc.	Nil	Nil	Nil
Director	Republic of China	Chun Yi Lin	M	02/20/2016	60,000	Bachelor, Shipbuilding & Aviation Machinery Dept., National Cheng Kung University	Nil	Nil	Nil	Nil
Director (Auditor- General)	Republic of China	Hui Ping Chen	F	07/01/2019	0	Bachelor, Dept. of Accounting, Providence University	Nil	Nil	Nil	Nil
Director	Republic of China	Mei You Shen	F	07/01/2019	0	Master of Business Administration (MBA), Goldey-Beacom College USA	Director, GPPC Hospitality And Leisure Inc.	Nil	Nil	Nil
Deputy of Director	Republic of China	Chih Ho Huang	M	05/11/2018	0	Master, Department of Materials Science and Engineering, I-SHOU University	Nil	Nil	Nil	Nil

Note 1: Should include all information of all executives as President, Senior Vice President, Vice President, managers of all departments, branches, as well as those in the position ranks equivalent to President, Senior Vice President or Vice President, which should be disclosed in full, disregarding the position titles.

Note 2: In terms of the hands-on experiences linked up with the aforementioned position titles, in case of employment in the attesting CPA Firm or affiliated enterprise thereof during the aforementioned period, should expressly remark the position titles and duties in charge

Note 3: Where the President or the equivalent position title (highest manager) is the same person as the chairman, or as the spouse to each other or blood relatives within the first degree of kinship, should disclose the reason why, rationality, necessity and countermeasures (e.g., a measure to increase the seat(s) of independent director(s), or a way with one half majority of the directors not serving concurrently as an employee) and such information.

III. Remuneration to Directors (Including Independent Directors), President and Senior Vice President in the Latest Year

(1-1) Remuneration to general directors and independent directors (with individual disclosure of the names and means for remuneration):

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	Ratio (%) of the Aggregate Amount of A, B, C and D to the Net Income After Tax (Note 10)	Ratio (%) of the Aggregate Amount of A, B, C and D to the Net Income After Tax (Note 10)	Remuneration Received by	Remuneration Received by	Remuneration Received by	Remuneration Received by	Concurrent Employees	Concurrent Employees	Concurrent Employees	Concurrent Employees	Ratio (%) of the Aggregate Amount of A, B, C, D, E, F and G to the Net Income After Tax (Note 10)	Ratio (%) of the Aggregate Amount of A, B, C, D, E, F and G to the Net Income After Tax (Note 10)	Whether Receiving Remuneration from any Investees or parent company other Than the Subsidiaries of the Company (Note 11)
		Compensation (A) (Note 2)		Pension (B)		Remuneration to Directors (C) (Note 3)		Fees for Performance of Business (D) (Note 4)				Wages, Bonus and Special Disbursement, etc. (E) (Note 5)		Pension (F)		Compensation to employee (G) (Note 6)
		This Company	All Companies Specified in the Financial Statements (Note 7)	This Company	All Companies Specified in the Financial Statements (Note 7)	This Company	All Companies Specified in the Financial Statements (Note 7)	This Company	All Companies Specified in the Financial Statements (Note 7)	This Company	All Companies Specified in the Financial Statements	This Company	All Companies Specified in the Financial Statements (Note 7)	This Company	All Companies Specified in the Financial Statements (Note 7)	This Company		All Companies Specified in the Financial Statements		This Company	All Companies Specified in the Financial Statements
																Cash Bonus	Share Bonus	Cash Bonus	Share Bonus
Chairman	Jing Kwan Investment Co., Ltd. Representative: Pin Cheng Yang	15,077,700	15,413,700	1,854,000	1,854,000	0	0	925,887	1,009,887	0.8626%	0.8829%	0	0	0	0	0	0	0	0	0.8626%	0.8829%	0
Director	Lai Fu Investment Co., Ltd. Representative: Chia Hsiung Tseng	0	0	0	0	0	0	0	0	0.0000%	0.0000%	8,114,297	8,210,297	874,000	874,000	344,704	0	344,704	0	0.4508%	0.4555%	0
Director	Chung Kwan Investment Co., Ltd.. Representative: Hsi Hui Huang	0	0	0	0	0	0	0	0	0.0000%	0.0000%	5,586,707	8,898,707	531,204	569,204	196,974	0	365,974	0	0.3050%	0.4750%	120,000
Director	Lai Fu Investment Co., Ltd. Representative: Chen Ching Ting	20,000	20,000	0	0	0	0	120,000	120,000	0.0068%	0.0068%	0	0	0	0	0	0	0	0	0.0068%	0.0068%	0
Director	Chung Kwan Investment Co., Ltd.	0	0	0	0	9,944,827	10,090,929	0	0	0.4804%	0.4875%	0	0	0	0	0	0	0	0	0.4804%	0.4875%	0

Director	Lai Fu Investment Co., Ltd.	0	0	0	0	19,889,654	19,889,654	0	0	0.9608%	0.9608%	0	0	0	0	0	0	0	0	0.9608%	0.9608%	0
Director	Jing Kwan Investment Co., Ltd.	0	0	0	0	19,889,656	19,889,656	0	0	0.9608%	0.9608%	0	0	0	0	0	0	0	0	0.9608%	0.9608%	0
1. Please elaborate on the remuneration policy, system, standards and structure for independent directors, and describe the relevance to the amount of remuneration according to the responsibilities, risks, time invested and other factors: Independent directors will be paid with remuneration according to the Company’s “standards/criteria for directors and committee members’ fees and remuneration payment” to grant a fixed amount of remuneration, not to participate in the allocation of director remuneration with the Company's profits according to Article 29 of the Articles of Incorporation so that the remuneration should be reasonable. 2. Except those facts disclosed through the aforementioned Table, the remuneration received by the Company's directors for services rendered to all companies as shown in the financial statements (e.g., where serving as a consultant, without the capacity as an employee) in the most recentyear: Nil

(1-2) Remuneration to directors (including independent directors)(Summarizing the coordination scale and the methods to disclose names):

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	Ratio (%) of the Aggregate Amount of A, B, C and D to the Net Income After Tax (Note 10)	Ratio (%) of the Aggregate Amount of A, B, C and D to the Net Income After Tax (Note 10)	Remuneration Received by	Remuneration Received by	Remuneration Received by	Remuneration Received by	Concurrent Employees	Concurrent Employees	Concurrent Employees	Concurrent Employees	Ratio (%) of the Aggregate Amount of A, B, C, D, E, F and G to the Net Income After Tax (Note 10)	Ratio (%) of the Aggregate Amount of A, B, C, D, E, F and G to the Net Income After Tax (Note 10)	Whether Receiving Remuneration from any Investees or parent company other Than the Subsidiaries of the Company (Note 11)
		Compensation (A) (Note 2)		Pension (B)		Remuneration to Directors (C) (Note 3)		Fees for Performance of Business (D) (Note 4)				Wages, Bonus and Special Disbursement, etc. (E) (Note 5)		Pension (F)		Compensation to employee (G) (Note 6)
		This Company	All Companies Specified in the Financial Statements (Note 7)	This Company	All Companies Specified in the Financial Statements (Note 7)	This Company	All Companies Specified in the Financial Statements (Note 7)	This Company	All Companies Specified in the Financial Statements (Note 7)	This Company	All Companies Specified in the Financial Statements	This Company	All Companies Specified in the Financial Statements (Note 7)	This Company	All Companies Specified in the Financial Statements (Note 7)	This Company		All Companies Specified in the Financial Statements		This Company	All Companies Specified in the Financial Statements
																Cash Bonus	Share Bonus	Cash Bonus	Share Bonus
Independent Director	Kuang Hsun Shih	4,260,000	4,260,000	0	0	0	0	630,000	630,000	0.2362%	0.2362%	0	0	0	0	0	0	0	0	0.2362%	0.2362%	0
Independent Director	Sung Tung Chen
Independent Director	Wen Tzong Chen
1. Please elaborate on the remuneration policy, system, standards and structure for independent directors, and describe the relevance to the amount of remuneration according to the responsibilities, risks, time invested and other factors: Independent directors will be paid with remuneration according to the Company’s “standards/criteria for directors and committee members’ fees and remuneration payment” to grant a fixed amount of remuneration, not to participate in the allocation of director remuneration with the Company's profits according to Article 29 of the Articles of Incorporation so that the remuneration should be reasonable. 2. Except those facts disclosed through the aforementioned Table, the remuneration received by the Company's directors for services rendered to all companies as shown in the financial statements (e.g., where serving as a consultant, without the capacity as an employee) in the most recentyear: Nil

Please remunerate the relevant information of directors (general directors other than an independent director) and independent directors, respectively.

Remuneration Scale Table

	RemunerationScale Table	RemunerationScale Table	RemunerationScale Table
Scale of the Remuneration Paid to this Company’s Directors	Name of Directors
	Aggregate Amount of A, B, C and D		Aggregate Amount of	A, B, C, D, E, F and G
	This Company (Note 8)	All Companies Specified in the Financial Statements (Note 9)H	This Company (Note 8)	Parent Company and all reinvested companies (Note 9)I
Below $1,000,000	Chia Hsiung Tseng, Hsi Hui Huang, Chen Ching Ting	Chia Hsiung Tseng, Hsi Hui Huang, Chen Ching Ting	Chen Ching Ting	Chen Ching Ting
$1,000,000 (inclusive) ~ $2,000,000 (exclusive)	Kuang Hsun Shih, Sung Tung Chen, Wen Tzong Chen	Kuang Hsun Shih, Sung Tung Chen, Wen Tzong Chen	Kuang Hsun Shih, Sung Tung Chen, Wen Tzong Chen	Kuang Hsun Shih, Sung Tung Chen, Wen Tzong Chen
$2,000,000 (inclusive)~$3,500,000 (exclusive)
$3,500,000(inclusive)~$5,000,000(exclusive)
$5,000,000 (inclusive) ~ $10,000,000 (exclusive)	Chung Kwan Investment Co., Ltd.		Chia Hsiung Tseng, Hsi Hui Huang, Chung Kwan InvestmentCo.,Ltd.	Chia Hsiung Tseng, Hsi Hui Huang
$10,000,000 (inclusive) ~ $15,000,000 (exclusive)		Chung Kwan Investment Co.,Ltd.		Chung Kwan Investment Co.,Ltd.
$15,000,000 (inclusive) ~ $30,000,000 (exclusive)	Pin Cheng Yang, Jing Kwan Investment Co., Ltd., Lai Fu Investment Co.,Ltd.	Pin Cheng Yang, Jing Kwan Investment Co., Ltd., Lai Fu Investment Co.,Ltd.	Pin Cheng Yang, Jing Kwan Investment Co., Ltd., Lai Fu Investment Co.,Ltd.	Pin Cheng Yang, Jing Kwan Investment Co., Ltd., Lai Fu Investment Co.,Ltd.
$30,000,000(inclusive)~$50,000,000(exclusive)
$50,000,000 (inclusive)~$100,000,000 (exclusive)
Above$100,000,000
Total	10	10	10	10

Note 1: The names of directors should be enumerated separately (juristic person shareholders should have the names and representatives of juristic person shareholders enumerated respectively) and the general directors and independent directors should be enumerated separately and the amount of each payment should be disclosed in a summary manner. In the event that a director concurrently serves as the President or Senior Vice President, this table and the following table (3-1), or the following tables (3-2-1) and (3-2-2) should be filled in as well. Note 2: Referring to the remuneration of directors in the most recent year (including directors' salary, post bonus, severance payment, various bonuses, incentives and the like).

Note 3: Enter the amount of directors' remuneration resolved by the board of directors in the most recent year.

Note 4: Referring to the directors’ related business execution expenses in the most recent year (including traffic allowance, special disbursement, various allowances, dormitory allowance, car allocation and the like). In case of provision of housing, cars and other transportation or exclusive personal expenses, should disclose the

nature and cost of assets so provided, actual or fair market-based rents, fuel costs and other payments. In case of a chauffeur was provided, please note that the relevant remuneration paid for the driver which, nevertheless, should not be included in the remuneration.

Note 5: Referring to all such received by the directors concurrent serving as employees (including those concurrently as President, Senior Vice President, other managers and employees), including salary, post bonus, severance payment, various bonuses, incentives, traffic allowances, special disbursement, various allowances, dormitory allowance, provision of objects in kind such as cars, and the like. When providing expenditures for houses, cars and other transportation exclusive for specific individuals, the nature and cost of the assets provided, the actual or fair market rent, fuel and other payments should be disclosed. If there is a chauffeur provided, please note that the Company pays the relevant compensation of the chauffeur which is, nevertheless, not counted into the remuneration. In addition, the salary expenses recognized according to IFRS 2 "share-based payment", including obtaining employee stock option certificates, limiting employee rights, new shares and participation in cash capital increase subscription shares, and the like, should also be included in the remuneration.
Note 6: Referring to the event where employees who have served concurrently as directors (including President, Senior Vice President, other managers and employees) in the most recent year to obtain employee remuneration (including stocks and cash) where the Company should disclose the amount of employee remuneration distributed by the board of directors in the most recent year. In the event that the amount could not be estimated, the proposed distribution amount for this year could be calculated according to the proportion of the actual distribution amount last year, and then fill up Table 1~3.
Note 7: The aggregate total of remuneration paid to the directors of the company by all companies (including the Company) in the consolidated financial statement should be disclosed in full.
Note 8: In the aggregate total of remuneration paid by the Company toward each and every director, the Company shall disclose names of directors in the attribute scale.
Note 9: In the aggregate total of remuneration paid by all companies (including the Company) toward each and every director of the Company in the merger, consolidated financial statement, the Company shall disclose names of directors in the attribute scale.
Note 10: The term “net profit after tax” as set forth herein denotes the net profit after tax in the entities or individual financial statements of the most recent year. Note 11:
a. This Box should be filled up with the amount(s) of relevant remuneration (s) received by the Company's directors from sources as an investee or parent company other than a subsidiary (Fill up “N/A” if none).
b. Where a director of the Company is paid with relevant remuneration from sources as an investee or parent company other than a subsidiary, the Company should consolidate relevant remuneration from sources as an investee or parent company other than a subsidiary into the box of remuneration scale table and change the title of that box into “parent company and all investees”.
c. The term “remuneration” as set forth herein denotes the remuneration, pay received by a director of the Company who serves as the director, supervisor or manager while serving as an investee or parent company other than a subsidiary (in such post e.g., employee, director and supervisor) and as the fee for execution of business operation.
＊ Where the contents disclosed under this Table differ from the concept of income under Income Tax Act. This Table, therefore, only functions for disclosure of information instead of taxation.
(2-1) Remuneration payable to the supervisors (Individual disclosure of names and method for remuneration): N/A.
(2-2) Remuneration payable to the supervisors (Method to disclose the summarized coordinative scale. names and method of disclosure): N/A.
(3-1) Remuneration payable to the President and Senior Vice President (Individual disclosure of names and method for remuneration): N/A.
(3-2-1) Remuneration payable to the President and Senior Vice President (Method to disclose the summarized coordinative scale. names and method of disclosure)

Position Title	Name	Wages (A) (Note 2)	Wages (A) (Note 2)	Pension (B)	Pension (B)	Bonus and Special Disbursement, etc. (C) (Note 3)	Bonus and Special Disbursement, etc. (C) (Note 3)	Compensation for Employee (D) (Note 4)	Compensation for Employee (D) (Note 4)	Compensation for Employee (D) (Note 4)	Compensation for Employee (D) (Note 4)	Ratio (%) of the Aggregate Amount of A, B, C and D to the Net Income After Tax (Note 8)	Ratio (%) of the Aggregate Amount of A, B, C and D to the Net Income After Tax (Note 8)	Whether Receiving Remuneration from any Investees or Parent Company Other Than the Subsidiaries of the Company (Note 9)
		This Company	All Companies Specified in the Financial Statements (Note 5)	This Company	All Companies Specified in the Financial Statements (Note 5)	This Company	All Companies Specified in the Financial Statements (Note 5)	This Company		All Companies Specified in the Financial Statements (Note 5)		This Company	All Companies Specified in the Financial Statements (Note 5)
								Cash Bonus	Share Bonus	Cash Bonus	Share Bonus
President	Chia Hsiung Tseng	7,011,188	9,439,188	2,102,608	2,140,608	12,766,381	13,842,381	787,895	0	956,895	0	1.0950%	1.2743%	0
Senior Vice President	Hsi Hui Huang
Senior Vice President	Chen Ming Chou

＊ Regardless of position title, all positions equivalent to President, Senior Vice President (for example: President, Chief Executive Officer, Director… etc.) which should be disclosed in full.

Remuneration Scale Table

	RemunerationScale Table	RemunerationScale Table
Scale of the Remuneration Paid to Each Respective President and Senior Vice President of this Company	Name of President and Senior Vice President
	This Company (Note 6)	Parent Company and all reinvested companies(Note 7)E
Below $1,000,000
$1,000,000(inclusive)`～`$2,000,000(exclusive)
$2,000,000(inclusive)`～`$3,500,000(exclusive)
$3,500,000(inclusive)`～`$5,000,000(exclusive)
$5,000,000 (inclusive) ~ $10,000,000 (exclusive)	Chia Hsiung Tseng, Hsi Hui Huang, Chen MingChou	Chia Hsiung Tseng, Hsi Hui Huang, Chen MingChou
$10,000,000(inclusive)~$15,000,000(exclusive)
$15,000,000(inclusive)~$30,000,000(exclusive)
$30,000,000(inclusive)~$50,000,000(exclusive)
$50,000,000(inclusive)~ $100,000,000(exclusive)
Above $100,000,000
Total	3	3

Note 1: The names of President and Senior Vice President should be enumerated separately, and the amount of each payment should be disclosed in a summary manner. If the director concurrently serves as President or Senior Vice President, please fill out this Table and the aforementioned table (1-1), or (1-2-1) and (1-2-2).
Note 2: Should be filled up with the salaries, job bonuses and severance pay for President and Senior Vice President in the most recent year.
Note 3: Should be filled up with a variety of bonuses, incentive payments, traffic allowance, special disbursement, various allowances, dormitory allowance, car allocation and other objects in kind and other remuneration amounts for President and Senior Vice President in the most recent year. In case of provisions of housing allowance, car allowance and other transportation or exclusive personal expenses, the Company should disclose the nature and cost of the assets provided, the actual or fair market rent, fuel and other payments. Where a chauffeur is provided, please note that the Company pays the relevant compensation of the chauffeur which is, nevertheless, not included the remuneration. In addition, the salary expenses recognized according to IFRS 2 "share-based payment" include employee stock option certificates obtained, limitation upon employee from equity, new shares and participating subscription in capital increase through cash injection which should also be included in the remuneration as well.
Note 4: To be filled in with the amount of employee compensation (including stocks and cash) to be allocated to such employees as the President and Senior Vice President as approved by the board of directors in the most recent year. In the event that it is impossible to estimate, the proposed distribution amount for this year shall be calculated according to the proportion of the actual distribution amount of the preceding year and should additionally fill up Table 1~3.
Note 5: The total amount of remuneration paid to the President and Senior Vice President of the Company by all companies (including the Company) in the Consolidated Financial Statement should be disclosed.
Note 6: For the aggregate total remunerations payable to each of the President and the Senior Vice President, the names of the President and Senior Vice President shall be disclosed in the attribution scales.
Note 7: For the aggregate total remunerations payable to each of the President and the Senior Vice President of all companies (including the Company) in the Consolidated

Financial Statement, the names of the President and Senior Vice President shall be disclosed in the attribution scales.

Note 8: Net profit after tax referring to net profit after tax in the most recent individual or respective financial statements of the most recent year. Note 9:
a. This Box should be fixed up with the relevant amounts received by the Company's President and Senior Vice President from the investees or parent company other than the subsidiaries (If none, please fill up “N/A”)
b. Where the Company's President and Senior Vice President received remuneration from the investees or parent company other than the subsidiaries, the remunerations received by each of the President and the Senior Vice President from the investees or parent company other than the subsidiaries, shall be consolidated into Box E of the remuneration scale table and the title of that Box should be changed into “Parent company and all investees”
c. The term “remuneration” as set forth herein denotes the remunerations, pays received by the Company's President and Senior Vice President where they serve with the investees other than subsidiaries or parent company in the capacities of directors and supervisors or managers (including remuneration payable to employees, directors and supervisors) and expenses for business execution.
＊ Where the contents disclosed under this Table differ from the concept of income under Income Tax Act. This Table, therefore, only functions for disclosure of information instead of taxation.
(I) Names of the managers allocated with bonus to employees and the facts in allocation:

						April 14,2020 Ratio of the Aggregate Amount to the Net Income After Tax (%) 0.0654%
	Position Title (Note 1)	Name (Note 1)	Share Bonus	Cash Bonus	Total	Ratio of the Aggregate Amount to the Net Income After Tax (%)
Manager	President	Chia HsiungTseng	0	1,353,823	1,353,823	0.0654%
	Senior Vice President	Hsi Hui Huang
	Senior Vice President	Chen MingChou
	General Manager	Jen Chieh Liang
	Vice President	Fu Hua Tsao
	Vice President	Wen Hui Lin
	Vice President, Finance Dept.	Ching Fu Chen
	Director, Accounting Dept.	Ling Chu Chen

Note 1: The Company should disclose individual names, position titles where, nevertheless, the allocation of profit could be disclosed by means of summarization. Note 2: Should be filled up with the amount of the remuneration to employees as resolved by the Board of Directors in the most recent year (including stock and cash). If the amount could not be estimated, fill up the amount proposed to be filled up pro rata to the amount substantially allocated in the preceding year as the amount proposed for allocation in the current year. The net profit after tax refers to the net profit after tax of the most recent year. Where the Company has adopted International Financial Reporting Standards (IFRS), the net profit after tax should refer to the net profit after tax shown through the individual financial statement or respective financial statement in the most recent year.

Note 3: The term “managers” applies to the scope as enumerated below as per Decree Tai-Tsai-Zheng-III-Zi 0920001301 dated March 27, 2003:

(1) President and staff of the equivalent level.
(2) Senior Vice President and staff of the equivalent level.
(3) Vice President and staff of the equivalent level.
(4) Head of Finance Dept.
(5) Head of Accounting Department
(6) Other staff authorized with the powers to take charge of business affairs and as authorized signatories.
Note 4: Where the Director, President and Senior Vice President receives remuneration to employees (including stocks and cash), the Company shall fill up this Table other than Table 1~2.
(II) The respective comparison and explanation for analyses of the percentages of the aggregate total compensations paid to the Company’s directors and supervisors, President and Senior Vice Presidents of this Company to the net profit after taxes over the past two years in the Company and all companies covered in the consolidated financial statements and explain the policies, criteria, portfolio of remuneration payment, procedures to fix remuneration, business performance and interrelationship to the future risks:
Analyses into the ratios in the past two years

Position Title	Percentage of the aggregate total remuneration to the net profit after tax in 2018	Percentage of the aggregate total remuneration to the net profit after tax in 2018	Percentage of the aggregate total remuneration to the net profit after tax in 2019	Percentage of the aggregate total remuneration to the net profit after tax in 2019	Descriptions
	This Company	All Companies Specified in the Consolidated Statements	This Company	All Companies Specified in the Consolidated Statements
Director	4.01%	4.12%	4.26%	4.46%	Here at the Company, the remuneration to directors and supervisors and remuneration to employees have been duly granted exactly in accordance with the Articles of Incorporation
Supervisor	N/A	N/A	N/A	N/A
President and Senior Vice President	0.90%	1.00%	1.10%	1.27%

The interrelationship among the remuneration payment policies, standards/criteria and portfolio, the procedures to fix the remunerations, business performance and future risks.
In an attempt to conserve expenses, the Company’s managers and directors do receive traffic allowances. Regarding compensation to directors, as expressly provided for in Article 27 of the Company's Articles of Incorporation, the remuneration to directors and supervisors shall be paid disregarding whether the Company operates at a profit at the amount resolved by the Compensation Committee with reference to the rates prevalent in the firms in the horizontal trade. The remuneration payable to the President and Senior Vice President are proposed by the Compensation Committee based on the personal performance and contribution to the overall business operation of the entire Company to the board of directors for final resolution. Accordingly, the remuneration to directors and supervisors do not directly

impact upon the future business risks.

IV. Overview on Performance of corporate governance:

(I) Performance of Board of Directors

(1) In the most recent year (2019), the Board of Directors of this Company convened a total of 9 (A) meetings where the directors showed attendance in the following status:

	status:
Position Title	Name	Times of Actual Attendance in Person (B)	Times of Attendance by Proxy	Actual Attendance Ratio (%) (B/A) (Note 2)	Remarks
Chairman	Pin Cheng Yang	9	0	100	Name of juristic person director, as the representative of the juristic person director: Jing Kwan Investment Co., Ltd. June 27, 2017 in the renewed appointment
Independent Director	Kuang Hsun Shih	8	1	89	June 27, 2017 in the renewed appointment
Independent Director	Sung Tung Chen	9	0	100	June 27, 2017 in the renewed appointment
Independent Director	Wen Tzong Chen	9	0	100	June 27, 2017 in the renewed appointment
Director	Chen Ching Ting	5	4	56	Name of juristic person director, as the representative of the juristic person director: Lai Fu Investment Co., Ltd. June 27, 2017 in the renewed appointment
Director	Chia Hsiung Tseng	9	0	100	Name of juristic person director, as the representative of the juristic person director: Lai Fu Investment Co., Ltd. April 15, 2018 in the new appointment
Director	Hsi Hui Huang	9	0	100	Name of juristic person director, as the representative of the juristic person director: Chung Kwan Investment Co., Ltd. June 27, 2017 in the renewed appointment
Other entries as required: I. Where the operations by the Board of Directors meet any one among those circumstances enumerated below, the date, term, contents of the agenda, opinions of all independent directors and the handling of the independent directors' opinions shall be expressly remarked: (I) Issues to be enumerated under Article 14-3 of the Securities and Exchange Act: Nil (II) Issues other than the aforementioned ones where the independent directors voice objection or reserved opinions as backed up with records or written declarations in the minutes of the Board of Directors meeting: Nil. II. Performance of withdrawal from conflict involvement (recusal) by a director in a motion involving their interests where, please state the name of director, contents of the motion, cause of avoidance from presence (recuse) and facts in participation in the voting process: (I) On 2019/03/21 amidst the 12thboard meeting of Session 12 in discussion items (11) upon the lifting of prohibition of business strife upon directors. Director Chia Hsiung Tseng who concurrently acted the position of the President duly withdrew from conflict involvement (recusal) as the motion involved his personal interests. The motion was duly resolved by all other present directors. (II) On 2019/03/21 amidst the 12thboard meeting of Session 12 in discussion items (12) upon the lifting of prohibition of business strife upon managers. Director Chia Hsiung Tseng who concurrently acted the position of the President dulywithdrew from conflict involvement(recusal)as the motion involved his

  - personal interests.  The motion was duly resolved by all other present directors.

(III) On 2019/08/08 amidst the 16[th] board meeting of Session 12 in discussion items (1) upon allocation of remuneration to directors, managers as staff of Year 2018, Chairman Pin Cheng Yang, Director Chia Hsiung Tseng concurrently serving as the President, Director Hsi Hui Huang concurrently serving as the Senior Vice President, withdrew from conflict involvement (recusal) as the motion involved their personal interests. The motion was duly resolved by all other present directors.
III. The TWSC/GTSM listed companies should disclose information on the evaluation cycle and period of the Board's self (or peers) evaluation, the scope, method and content of the evaluation, and fill out the attached Table II (2) Board Evaluation Implementation.
IV. The objectives of strengthening the functions of the Board of Directors in the current year and the most recent year (e.g., the establishment of an Audit Committee, the improvement of information transparency, and the like) and the assessment of implementation.:
Continued training and education programs for directors: On a regular basis, the Company duly arranges directors into Continued training and education programs through outsourcees.
Improvement of information transparency: The Company faithfully upholds the transparency of its operations and pays supreme attention to the rights and interests of shareholders. After each Board meeting, it immediately publishes important resolutions of the Board of Directors.
Note 1: Where the directors and supervisors are juristic persons, the Company should disclose the names of such juristic person shareholders and names of representatives thereof.
Note 2: (1) In case of directors and supervisors who had quit the posts before closure of a fiscal year, the Company should remark the date(s) of severance, the substantial participation (guest participating) rate (%), to be duly calculated based on the number of board meetings during the period and the number of time(s) of participation (guest participating).
- (2) In case of reelection of directors and supervisors before closure of a fiscal year, the Company should fill in both the new and former directors and supervisors and should expressly remark on the Box of Remarks as newly elected ones, former ones or reelected ones and the date of reelection. The actual participation (guest participation) rates (%) shall be counted based on the actual number of Board meetings and number of substantial participation (guest participation).

(2) Implementation of the Board of Directors Evaluation:

Evaluation interval (Note 1)	Period of evaluation (Note 2)	Scope of evaluation (Note 3)	Method of evaluation (Note 4)	Contents of evaluation (Note 5)
On an annual basis	Jan. 1, 2019 ~ Dec. 31, 2019	Evaluation of performance by the board of directors, individual directors and functional committee	Self-evaluation inside the board of directors and self-evaluation by directors themselves	The performance evaluation of the Board of Directors includes five aspects of the Company's participation in the Company's operations, the quality of the Board's decisions, the composition and structure of the Board, the selection of directors and continuous training and internal control. The result of the comprehensive evaluation proves excellent. The performance evaluation of individual director members includes the Company's objectives and tasks, the directors’ responsibilities, the degree of participation in the Company's operations, internal relationship management and communication, the director's professional and Continued training and education programs, and internal control. The results of the comprehensive evaluation indicate excellent in performance. The performance evaluation of the Audit Committee and Compensation Committee include five aspects of the Company's participation in the business operation, the Functional Committee's responsibilities, the quality of the Functional Committee's decision-making, the composition of the Functional Committee and the selection of members, and internal control. The result of the comprehensive evaluation indicates excellent inperformance.

Note 1: Should fill in the interval in implementation of the Board of Directors evaluation, e.g., on an annual basis.
Note 2: Should fill in the period covered within the Board of Directors evaluation, i.e., evaluation during January 1, 2019~December 31, 2019.
Note 3: The scope covered within the evaluation includes evaluation of the Board of Directors, the individual Board members and the functional committee(s).
Note 4: The methods of evaluation include internal self-evaluation of the Board of Directors, self-evaluation of directors, peer evaluation, appointment of external professional institutions, experts or other appropriate methods for performance evaluation
Note 5: Pursuant to the scope of evaluation, the contents of evaluation shall include the minimum of the following:
(1) Performance evaluation for the Board of Directors: The contents of evaluation shall include the level of participation in the Company's business operation, quality of policymaking process by the Board of Directors, composition and structure of the Board of Directors, election and continued training and education programs for directors, internal control and the like.
(2) Performance evaluation for the individual members of the Board of Directors: contents of evaluation shall include the minimum domination of the Company's targets and duties, the level of participation in the Company's business operation, management and communications in internal relationship, profession and Continued training and education programs of directors, internal control and the like.
(3) Performance evaluation for the functional committee(s): contents of evaluation shall include the minimum the level of participation in the Company's business operation, awareness of the responsibilities and powers of the functional committees, composition of the functional committees, election of the Committee members, internal control and the like.

(II) Performance of Audit Committee

In the most recent year (2019), the Audit Committee of this Company convened a total of 8 (A) meetings where the independent directors showed attendance in the following status:

Position Title	Name	Times of Actual Attendance in Person(B)	Times of Attendance by Proxy	Actual Attendance Ratio (%) (B/A) (Note)
Convener	Wen Tzong Chen	8	0	100
Independent Director	Kuang Hsun Shih	7	1	88
Independent Director	Sung Tung Chen	8	0	100
Other entries as required: I. Where the operations by the Audit Committee meet any one among those circumstances enumerated below, the date, term, contents of the agenda, result of decision resolved in Audit Committee and the handling of the Audit Committee' opinions shall be expressly remarked: (I) Matters as set forth under Article 14-5 of Securities and Exchange Act: Nil (II) Issues other than the aforementioned one, not duly passed in the Audit Committee, the key motions resolved in the Board of Directors through two-thirds majority of all directors: Nil. Audit Committee Contents of the motions and the subsequent measures Issues enumerate under Securities and Exchange Act §14-5 Not duly passed in the Audit Committee, the key motions resolved in the Board of Directors through two-thirds majority of all directors. The 10thof Session 2 01/23/2019 1. Decision duly resolved to appoint Crowe Horwath International to conduct audit & verification of the Company's Financial Statement 2019 and evaluation of independence. V Nil Result of resolution bythe Audit Committee(01/23/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. The 11thof Session 2 03/21/2019 1. Approval with a pass of the Company's individual financial statement and consolidated financial statement,2018 V Nil 2. Approval with apass of the Company's Declaration in Internal Control System 2018 V Nil 3. Approval with a pass of the Company's “Procedures for the Acquisition or Disposal of Assets” V Nil 4. Approval with a pass of the amendment to the Company's “Handling Procedures for Loaningof Funds” V Nil 5. Approval with a pass of amendment to the Company's "Procedures for Endorsements/Guarantees” V Nil 6. Approval with a pass of the Company's capital increase into “Land & Sea Capital Corp.” with further investment in Zhangzhou Chimei Chemical Co., Ltd. into the joint venture to build ABS, with part of the capital fund coming from allocation of earnings of Zhenjiang Chimei Chemical Co.,Ltd. instead. V Nil Result of resolution bythe Audit Committee(03/21/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. The 12thof Session 2 04/25/2019 1. Approval with apass of the Company's allocation of earnings 2018 V Nil 2. Approval with apass of the Company's direct investment into Mainland China. V Nil Result of resolution bythe Audit Committee(04/25/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. The 13thof Session 2 05/09/2019 1. Approval with apass of the Company's financial statement of the firstquarter,2019. V Nil Result of resolution bythe Audit Committee(05/09/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. The 14thof Session 2 08/08/2019 1. Approval with apass of the Company's financial statement of the secondquarter,2019. V Nil Result of resolution bythe Audit Committee(08/08/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. The 15thof Session 2 09/06/2019 1. Approval with a pass of the Company's investment into domestic hotels. V Nil Result of resolution bythe Audit Committee(09/06/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. The 16thof Session 2 11/07/2019 1. Approval with apass of the Company's financial statement of the thirdquarter,2019. V Nil 2. Approval with a pass of the Company's conversion of the earnings into capital increase in the Company's indirect investee of ZhenjiangChimei Chemical Co.,Ltd. V Nil 3. Approval with a pass of the Company's capital increase into “Land & Sea Capital Corp.” with further investment in Zhangzhou Chimei Chemical Co., Ltd. into the joint venture to build PC/PETG, with part of the capital fund coming from allocation of earnings of ZhenjiangChimei Chemical Co.,Ltd. instead. V Nil

Result of resolution bythe Audit Committee(11/07/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. The 17thof Session 2 12/10/2019 1. Approval with a pass of the Company's capital increase into “Zhangzhou Chimei Chemical Co.,Ltd.” via ”Land & Sea Capital Corp.” V Nil 2. Decision duly resolved to appoint Crowe Horwath International to conduct audit & verification of the Company's Financial Statement 2020 and evaluation of independence. V Nil Result of resolution bythe Audit Committee(12/10/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. II. Avoidance from presence (recuse) by independent directors from involvement in interests, with the name(s) of the independent director(s), contents of the motion(s), cause of avoidance from presence (recuse) and facts of participation voting process: Nil III. Performance by independent directors with internal audit head and Certified Public Accountant(s) (including communications with them all regarding the Company's financial conditions, business performance, the method and outcome thereof): 1. Where at the Company, the internal audit head, independent directors and Audit Committee members meet on a quarterly basis at least and would report to the Audit Committee members immediately in case of an extraordinary event. As of the publication date of the Annual Report, there had been no such special situation. The communication by and between the Audit Committee and the internal audit head have been in an excellent performance. Date Key points of communications Proposals by Independent Directors 01/23/2019 Descriptions on one fault found during the audit conducted in Q4 2018, along with the trackingreport thereof. No opinion was expressed in thepresent meeting 03/21/2019 1. Report on the self-evaluation result upon the internal control system 2018. 2. Performance evaluation on the effectiveness of internal control system 2018. In accordance with the results of self-evaluation and the internal audit, the evaluation into the overall internal control system was conducted to work out Declaration in Internal Control System and submit it into the Audit Committee. 3. Descriptions on the audit conducted and one fault found during the audit conducted in JanuaryFebruary2019. No opinion was expressed in the present meeting 04/25/2019 Descriptions on implementation of audit conducted in Q1 2019, along with the tracking report thereof. No opinion was expressed in thepresent meeting 06/28/2019 Report on audit conducted in April and May 2019 No opinion was expressed in thepresent meeting 08/08/2019 Descriptions on the audit conducted in Q2 2019, three faults found during the audit process,alongwith the trackingreport thereof. No opinion was expressed in thepresent meeting 11/07/2019 1. Descriptions on the audit conducted in Q3 2019, three faults found during the audit process, along with the tracking report thereof. 2. Report on auditplan for 2020. No opinion was expressed in the present meeting 12/10/2019 Report on audit conducted in October and November 2019 along with the tracking report of the fault found. No opinion was expressed in thepresent meeting 2. The independent directors and certified public accountants meet on an annual basis at least. As of the publication date of the Annual Report, the aforementioned matters had been virtually nonexistent. The communication by and between the Audit Committee and the certifying CPA have been in an excellent performance. Date Key points of communications Proposals by Independent Directors 03/21/2019 The CPAs rendered communications report aiming at the Company’s key issues in 2018, notably Materiality in financial statement, key audit items, summary of overall audit results, audit opinions, internal control audit results, IFRS 9 financial assets classification and measurement, impairment recognition, IFRS 15 revenue recognition of client contracts and the impact of applicability to IFRS16 lease in 2019 upon Grand Pacific and its subsidiaries toward the independent directors and Audit Committee members. No opinion was expressed in the present meeting	Result of resolution bythe Audit Committee(11/07/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. The 17thof Session 2 12/10/2019 1. Approval with a pass of the Company's capital increase into “Zhangzhou Chimei Chemical Co.,Ltd.” via ”Land & Sea Capital Corp.” V Nil 2. Decision duly resolved to appoint Crowe Horwath International to conduct audit & verification of the Company's Financial Statement 2020 and evaluation of independence. V Nil Result of resolution bythe Audit Committee(12/10/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. II. Avoidance from presence (recuse) by independent directors from involvement in interests, with the name(s) of the independent director(s), contents of the motion(s), cause of avoidance from presence (recuse) and facts of participation voting process: Nil III. Performance by independent directors with internal audit head and Certified Public Accountant(s) (including communications with them all regarding the Company's financial conditions, business performance, the method and outcome thereof): 1. Where at the Company, the internal audit head, independent directors and Audit Committee members meet on a quarterly basis at least and would report to the Audit Committee members immediately in case of an extraordinary event. As of the publication date of the Annual Report, there had been no such special situation. The communication by and between the Audit Committee and the internal audit head have been in an excellent performance. Date Key points of communications Proposals by Independent Directors 01/23/2019 Descriptions on one fault found during the audit conducted in Q4 2018, along with the trackingreport thereof. No opinion was expressed in thepresent meeting 03/21/2019 1. Report on the self-evaluation result upon the internal control system 2018. 2. Performance evaluation on the effectiveness of internal control system 2018. In accordance with the results of self-evaluation and the internal audit, the evaluation into the overall internal control system was conducted to work out Declaration in Internal Control System and submit it into the Audit Committee. 3. Descriptions on the audit conducted and one fault found during the audit conducted in JanuaryFebruary2019. No opinion was expressed in the present meeting 04/25/2019 Descriptions on implementation of audit conducted in Q1 2019, along with the tracking report thereof. No opinion was expressed in thepresent meeting 06/28/2019 Report on audit conducted in April and May 2019 No opinion was expressed in thepresent meeting 08/08/2019 Descriptions on the audit conducted in Q2 2019, three faults found during the audit process,alongwith the trackingreport thereof. No opinion was expressed in thepresent meeting 11/07/2019 1. Descriptions on the audit conducted in Q3 2019, three faults found during the audit process, along with the tracking report thereof. 2. Report on auditplan for 2020. No opinion was expressed in the present meeting 12/10/2019 Report on audit conducted in October and November 2019 along with the tracking report of the fault found. No opinion was expressed in thepresent meeting 2. The independent directors and certified public accountants meet on an annual basis at least. As of the publication date of the Annual Report, the aforementioned matters had been virtually nonexistent. The communication by and between the Audit Committee and the certifying CPA have been in an excellent performance. Date Key points of communications Proposals by Independent Directors 03/21/2019 The CPAs rendered communications report aiming at the Company’s key issues in 2018, notably Materiality in financial statement, key audit items, summary of overall audit results, audit opinions, internal control audit results, IFRS 9 financial assets classification and measurement, impairment recognition, IFRS 15 revenue recognition of client contracts and the impact of applicability to IFRS16 lease in 2019 upon Grand Pacific and its subsidiaries toward the independent directors and Audit Committee members. No opinion was expressed in the present meeting	Result of resolution bythe Audit Committee(11/07/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. The 17thof Session 2 12/10/2019 1. Approval with a pass of the Company's capital increase into “Zhangzhou Chimei Chemical Co.,Ltd.” via ”Land & Sea Capital Corp.” V Nil 2. Decision duly resolved to appoint Crowe Horwath International to conduct audit & verification of the Company's Financial Statement 2020 and evaluation of independence. V Nil Result of resolution bythe Audit Committee(12/10/2019): Unanimouslyresolved byall members of the Audit Committee Management bythe Companytoward the opinions of the Audit Committee: Unanimouslyresolved byall directors. II. Avoidance from presence (recuse) by independent directors from involvement in interests, with the name(s) of the independent director(s), contents of the motion(s), cause of avoidance from presence (recuse) and facts of participation voting process: Nil III. Performance by independent directors with internal audit head and Certified Public Accountant(s) (including communications with them all regarding the Company's financial conditions, business performance, the method and outcome thereof): 1. Where at the Company, the internal audit head, independent directors and Audit Committee members meet on a quarterly basis at least and would report to the Audit Committee members immediately in case of an extraordinary event. As of the publication date of the Annual Report, there had been no such special situation. The communication by and between the Audit Committee and the internal audit head have been in an excellent performance. Date Key points of communications Proposals by Independent Directors 01/23/2019 Descriptions on one fault found during the audit conducted in Q4 2018, along with the trackingreport thereof. No opinion was expressed in thepresent meeting 03/21/2019 1. Report on the self-evaluation result upon the internal control system 2018. 2. Performance evaluation on the effectiveness of internal control system 2018. In accordance with the results of self-evaluation and the internal audit, the evaluation into the overall internal control system was conducted to work out Declaration in Internal Control System and submit it into the Audit Committee. 3. Descriptions on the audit conducted and one fault found during the audit conducted in JanuaryFebruary2019. No opinion was expressed in the present meeting 04/25/2019 Descriptions on implementation of audit conducted in Q1 2019, along with the tracking report thereof. No opinion was expressed in thepresent meeting 06/28/2019 Report on audit conducted in April and May 2019 No opinion was expressed in thepresent meeting 08/08/2019 Descriptions on the audit conducted in Q2 2019, three faults found during the audit process,alongwith the trackingreport thereof. No opinion was expressed in thepresent meeting 11/07/2019 1. Descriptions on the audit conducted in Q3 2019, three faults found during the audit process, along with the tracking report thereof. 2. Report on auditplan for 2020. No opinion was expressed in the present meeting 12/10/2019 Report on audit conducted in October and November 2019 along with the tracking report of the fault found. No opinion was expressed in thepresent meeting 2. The independent directors and certified public accountants meet on an annual basis at least. As of the publication date of the Annual Report, the aforementioned matters had been virtually nonexistent. The communication by and between the Audit Committee and the certifying CPA have been in an excellent performance. Date Key points of communications Proposals by Independent Directors 03/21/2019 The CPAs rendered communications report aiming at the Company’s key issues in 2018, notably Materiality in financial statement, key audit items, summary of overall audit results, audit opinions, internal control audit results, IFRS 9 financial assets classification and measurement, impairment recognition, IFRS 15 revenue recognition of client contracts and the impact of applicability to IFRS16 lease in 2019 upon Grand Pacific and its subsidiaries toward the independent directors and Audit Committee members. No opinion was expressed in the present meeting
Date	Key points of communications	Proposals by Independent Directors
03/21/2019	The CPAs rendered communications report aiming at the Company’s key issues in 2018, notably Materiality in financial statement, key audit items, summary of overall audit results, audit opinions, internal control audit results, IFRS 9 financial assets classification and measurement, impairment recognition, IFRS 15 revenue recognition of client contracts and the impact of applicability to IFRS16 lease in 2019 upon Grand Pacific and its subsidiaries toward the independent directors and Audit Committee members.	No opinion was expressed in the present meeting

Notes:

＊ In case an independent director resigned before the end of the fiscal year, the resignation date should be indicated in the remarks box. The actual participation rate (%) should be calculated based on the number of Audit Committee meetings and the actual number of participants during his or her tenure.
＊ In case reelection of independent director(s) before the end of the fiscal year, both the former and newly reelected independent directors should be entered, and it is required to expressly remark on the Box of Remarks as newly elected ones, former ones or reelected ones and the date of reelection. The actual participation rate (%) should be calculated based on the number of Audit Committee meetings and the actual number of participants during his or her tenure.

Facts of Continued training and education programs by directors:

Position titles	Names	Date of program	Unit in charge	Titles of the program courses	Number of training hours	Was the Program consistent with requirements?
Chairman	Pin Cheng	12/17/2019	Taiwan Corporate	Economic Sanctions and Export Control	3	Yes

	Yang		Governance Association	Laws and China-US Trade War
Chairman	Pin Cheng Yang	8/06/2019	Taiwan Academy of Bankingand Finance	Liability risk of business operators with false financial reports	3	Yes
Director	Chen Ching Ting	11/27/2019	Taiwan Corporate Governance Association	The 15th International Forum on Corporate Governance	6	Yes
Director	Sung Tung Chen	8/02/2019	Taiwan Corporate Governance Association	Implement corporate governance up to a higher level, talk about the roles and responsibilities of corporate governance executives	3	Yes
Director	Sung Tung Chen	10/01/2019	Taiwan Academy of Banking and Finance	Information Security Strategic Thinking and Practice Layout	3	Yes
Director	Kuang Hsun Shih	11/05/2019	Securities and Futures Institute	Practice Seminar on the directors and supervisors as well as corporate governance executive	3	Yes
Director	Kuang Hsun Shih	11/01/2019	Taiwan Corporate Governance Association	Strategies for coping with high assets under worldwide tax recovery	3	Yes
Director	Wen Tzong Chen	4/16/2019	Taiwan Corporate Governance Association	Topics on anti-tax avoidance laws and the Taiwan version of the corporate social responsibility (CSR)` are coming! From the perspective of corporate governance, the impact and response of foreign companies.	3	Yes
Director	Wen Tzong Chen	8/28/2019	Taiwan Academy of Bankingand Finance	Corporate governance and business sustainability	3	Yes
Director	Hsi Hui Huang	9/20/2019	Taiwan Corporate Governance Association	A view toward the impact of economic substantive law and global anti-tax avoidance on corporate governance from theperspective of directors and supervisors	3	Yes
Director	Hsi Hui Huang	11/19/2019	Taiwan Stock Exchange	A view toward the impact of economic substantive law and global anti-tax avoidance on corporate governance from theperspective of directors and supervisors	3	Yes

Continued training and education programs by managers:

Position titles	Names	Date of program	Unit in charge	Titles of the program courses	Number of training hours
President	Chia Hsiung Tseng	9/17/2019	Taiwan Corporate Governance Association	The very countermeasures in response to the rapidly changing environment of technology amidst the directors’ lead of the Company	3
President	Chia Hsiung Tseng	10/01/2019	Taiwan Corporate Governance Association	The responsibility and risk management by the Board of Directors amidst the up-to-date corporate governance blueprints	2
President	Chia Hsiung Tseng	11/28/2019	Human Resources Section, Grand Pacific Petrochemical Corporation	Symposium on the Best-Practice Principles on Good Faith Management	2
Treasurer	Ching Fu Chen	01/11/2019	KGI Securities Co., Ltd.	Seminar on service affairs in 2019	3
Treasurer	Ching Fu Chen	01/23/2019	CTBC Bank Co., Ltd. Brokerage Dept.	Explanation session of Stock Act in 2019	3
Treasurer	Ching Fu Chen	11/28/2019	Human Resources Section, Grand Pacific Petrochemical Corporation	Symposium on the Best-Practice Principles on Good Faith Management	2
Accounting Head	Ling Chu Chen	2/13/2019	Accounting Research and Development Foundation	A view upon the Influence and correspondence of the amendment of the Company Act on Enterprise Legal Liability from theperspective of economic crime	4
Accounting Head	Ling Chu Chen	7/17/2019	Accounting Research and Development Foundation	IFRS16 "lease" effective and practical issues and analyses on the up-to-date laws	4
Accounting Head	Ling Chu Chen	11/13/2019	Accounting Research and Development Foundation	Impact of a variety of employee award systems upon corporate financial & taxation affairs and thepractical utilization thereof	4

(III) The performance of corporate governance and the status on discrepancy and reasons in relation to the Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies

The performance of corporate governance and the status on discrepancy and reasons in relation to the Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies

Evaluation Items	Facts ofperformance	Facts ofperformance	Facts ofperformance	Status on discrepancy and reasons in relation to Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies
	Yes	No	Descriptions in summary
I. Does the Company specify and disclose the corporate governance best practice principles in accordance with the “Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies”?	Ⅴ		The Company has set up the corporate governance best practice principles.	Compliant
II. Corporate Equity Structure and Shareholders’ Equity (I) Does the Company specify internal operation procedures to dispose recommendations, doubts, disputes and lawsuit matters of shareholders, and implement in accordance with such procedures? (II) Does the Company master the major shareholders in actual control of the company and the name list of the final controllers of such major shareholders? (III) Does the Company establish and execute the risk control and firewall mechanism with the affiliates?	Ⅴ Ⅴ Ⅴ		The Company has designated Spokesperson and Deputy Spokesperson. Our shareholder service unit has dedicated personnel receiving suggestions or handling disputes from shareholders. We keep track by using the list of shareholders maintained by a shareholder service agent. We adhere to relevant laws and regulations and disclose information accordingly in our dealing with affiliates. All our member companies have set up internal control systems and internal audit guidelines and follow these	Compliant Compliant Compliant

Evaluation Items	Facts ofperformance	Facts ofperformance	Facts ofperformance	Status on discrepancy and reasons in relation to Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies
	Yes	No	Descriptions in summary
(IV) Does the Company establish internal specifications to prohibit the internal parties of the company from trading securities by taking advantage of the non-opened information in market?	Ⅴ		frameworks in practice. We have also established monitoring rules on our subsidiaries and implemented these rules accordingly. The Company has set up internal control systems such as the Code of Conduct and the Preventive Measures Against Insider Trading. The purpose is to ensure our personnel not to use company assets or information or take advantage of their jobs for persona gains. If any of our directors, supervisors, managers, or employees has acquired inside and material information, they should avoid trading the Company’s shares or other marketable securities of equity nature within a certain period of time, pursuant to Article 157-1 of the Securities and Exchange Act.	Compliant
III. Organization and Functions of Board of Directors (I) Does the Board of Directors prepare diversified guidelines in response to the organization of members and actualize the execution? (II) Does the Company, besides establishing Compensation Committee and Audit Committee in accordance with laws, also voluntarily establish other committees with similar functions? (III) Does the Company establish performance rules and evaluation methods of the Board of Directors, and periodically engages in	Ⅴ Ⅴ Ⅴ		The Company’s directors come from legal and chemical backgrounds. The Company has set up Investment Review Committee. The Company has set of the Criteria Regarding Performance Assessment of Board Directors.	Compliant Compliant Compliant

Evaluation Items	Facts ofperformance	Facts ofperformance	Facts ofperformance	Status on discrepancy and reasons in relation to Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies
	Yes	No	Descriptions in summary
performance evaluation every year? Besides, does the Company submit the outcome of performance evaluation to the board of directors to be used as the handy reference in salary remuneration of respective directors and their salaries?			The Company’s Accounting Department assesses the independence of external auditors once a year.The Assessment Form for Independence of External Auditors is designed according to Article 47 of the Certified Public Accountant Act and No. 10 Gazette for Professional Ethics for Certified Public Accountant of the Republic of China.Meanwhile, Statement of Auditor Independence is obtained. All the findings were submitted to the second Audit Committee’s 17thmeeting and the 12th Board’s 19thmeeting on December 10, 2019. The Company’s Accounting Department determined that CPA Ying Chia Hsiao and CPA Wu Chang Wang of Crowe Horwath International meet the independence criteria set by the Company. Statement of Auditor Independence consists of the following elements: 1. Statement from the external auditors regarding their independence; 2. No direct or material financial interest between the external auditors and the client; 3. No improper interest between the external auditors	Compliant
(IV) Does the Company periodically evaluate the independence of the certified public accountant?	Ⅴ

Evaluation Items	Facts ofperformance	Facts ofperformance	Facts ofperformance	Status on discrepancy and reasons in relation to Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies
	Yes	No	Descriptions in summary
			and the client; 4. The audit service team practicing in an honest, fair and independent manner; 5. No reviewing or auditing of the financial statements issued by the organization the external auditor worked for within the past two years; 6. No use of the external auditor’s name by any other party; 7. No member of the accounting firm or the audit service team owning the client’s shares; 8. No borrowing/lending relationship between external auditors and the client, except normal dealings in the financial industry; 9. No common investments or gains sharing between external auditors and the client; 10. No commissioning of regular work by the client and regular compensations to external auditors; 11. No involvement of external auditors in the management function and decision-making for the client; 12. No side job taken by external auditors that may compromise their independence; 13. No spousal, direct relative by blood or by marriage, or relative by blood within four degrees of relationship between external auditors and the client; 14. No receiving of commissions by external auditors related to businesses; 15. No tenure byexternal auditors for more than seven

Evaluation Items	Facts ofperformance	Facts ofperformance	Facts ofperformance	Status on discrepancy and reasons in relation to Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies
	Yes	No	Descriptions in summary
			consecutive years (returning only possible after two years of internal rotation within the accountingfirm)
IV. Have Exchange-listed and/or OTC-listed companies been equipped with eligible and appropriate corporate governance personnel, and designated corporate governance executives responsible for corporate governance-related affairs (including but not limited to providing directors, supervisors with the information needed to perform business, assisting directors, supervisors in complying with laws to handle matters related to meetings of the board of directors and shareholders 'meetings in accordance with the law, with production of minutes of board of directors meetings and shareholders' meetings)?	Ⅴ		The Administration Section of Finance Department is responsible for the planning and logistics of board meetings and shareholder meetings. Such planning and logistics include meeting dates, discussion materials, agenda production and distribution. Other administrative issues such as company registration change are also handled by the Administration Section.	Compliant
V. Does the Company establish communication channel of the stakeholders (including but not limited, shareholders, employees, customers and suppliers, etc.), and establish an exclusive zone of the stakeholders in the company’s website, and properly respond the important issues of corporate social responsibility concerned by the stakeholders?	Ⅴ		There is an exclusive zone of the stakeholders at our official website. Dedicated personnel respond to handle questions about specific issues.	Compliant
VI. Does the Company appoint a professional stock affair handlingagencytoprocess the	Ⅴ		The Company has assigned KGI Securities to provide registrar services.	Compliant

Evaluation Items	Facts ofperformance	Facts ofperformance	Facts ofperformance	Status on discrepancy and reasons in relation to Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies
	Yes	No	Descriptions in summary
affairs ofgeneral meeting?
VII. Information Opening (I) Does the Company set up a website to disclose the financial business and the corporate governance information? (II) Does the Company adopt other information disclosure methods (such as setting up an English website, designating dedicated personnel to be in charge of the corporate information collection and disclosure, actualizing the spokesperson system, the juristic person conference process placement in the company’s website, etc.)? (III) Did the Company announce and declare its annual financial statements within two months after the end of the fiscal year, and announce and declare the financial statements of the first, second and third quarters and operating performance of each month ahead of schedule as required?	Ⅴ Ⅴ	Ⅴ	Company website athttp://www.gppc.com.tw The Company adheres to regulations governing information disclosure by providing information to shareholders via Market Observation Post System regarding financials, business, insider holdings and corporate governance. The Company’s website also discloses information collected by dedicated personnel according to nature of information. The Company has one spokesperson and one deputy spokesperson. The Company announces and declares the annual financial statements within three months after the end of the fiscal years.	Compliant Compliant N/A
VIII. Does the Company have other available important information helpful to understand the corporate governance and performance status (including but not limited to employee interests, employee concern, investor relationship, supplier relationship, rights of stakeholders, advanced study status of directors and supervisors,execution	Ⅴ		(I) Our employee benefit and care efforts are as follows: 1. We arrange annual health checks for employees in major hospitals. We also have nurses at factory sites. 2. We emphasis training and education of employees. In addition to professional training, we offer long-term English lessons to develop language capabilities of our employees.	Compliant

Evaluation Items	Facts ofperformance	Facts ofperformance	Facts ofperformance
	Yes	No	Descriptions in summary
status of risk management policy and risk measurement standard, execution status of client policy, the status of purchasing liability insurance of the company for its directors and supervisors, etc.)?			(II) The Company adopts a spokesperson system, and we also have a deputy spokesperson. Investors can fully communicate with the spokesperson or deputy spokesperson via phone or email. (III) The Company has purchased liability insurance for directors. (IV) The advanced study status of directors and supervisors, execution status of risk management policy and risk measurement standard, execution status of client policy are all disclosed in annual reports. Please refer to relevant details contained in annual reports available on our website.
IX. Please explain the performance in improvement of the Company's corporate governance in response to the evaluation results released by the Corporate Governance Center of the Taiwan Stock Exchange Co., Ltd. in the most recent year, and the proposed preferential measures of improvement for those which call for further improvement. The evaluation of the independence of external auditors is detailed in the 2018 annual report. The assessment result of corporate governance in 2019 is not yet released as of the publication date of the Annual Report. Meanwhile, the Company continues to enhance information transparency by amending the disclosure of shareholder structures and management team on our website. We are also deploying English webpages on our site toprovide information to investors.

Note: Brief explanations required whether Yes or No is ticked for the facts of performance.

(IV) Composition, responsibilities and powers of Compensation Committee and the facts of performance:
(1) Information on Compensation Committee members:

Position (Note 1)	Term Name	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Independence Information (Note 2)	Number of Other Public Companies Concurrently Serving as a Member of Compensation Committee
		An instructor in or a higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the company in a public or a private junior college, college, or university	A judge, public prosecutor, attorney, certified public accountant, or other professional or technical specialists who has passed a national examination and been awarded a certificate in a profession necessary for the business of the company	Have work experience in the area of commerce, law, finance, or accounting, or otherwise necessary for the business of the company	1	2	3	4	5	6	7	8	9	10
Independent Director	Kuang Hsun Shih	Yes	No	Yes											3
Independent Director	Wen Tzong Chen	Yes	Yes	Yes											2
Independent Director	Sung Tung Chen	No	Yes	Yes											1

Note 1: For the position, it will be filled up as director, independent director or others.

Note 2: Please tick with  mark in the boxes below where the Compensation Committee members prove to have met with the conditions enumerated below in two years before being appointed and during their tenure of office
(1) Not an employee of the company or any of its affiliated enterprises.
(2) Not a director or supervisor of the company or any of its affiliates. (This, nevertheless, does not apply to cases where the person is an independent director of the Company, its parent company or any subsidiary or a subsidiary with same parent company where the independent directors perform multiple duties concurrently among themselves)
(3) Not a natural person shareholder who holds shares, together with those held by the person’s spouse, minority or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding share of the company or rank as top-10 shareholders.
(4) Not a spouse, relative within the second-degree relatives, or lineal relative within the third degree by blood, of any of the managers specified under (1) or (2) (3).
(5) Not as a director, supervisor or a director of a corporate shareholder who directly holds more than 5% of the Company's total issued shares, the top five shareholders or representative designated to serve as a director, supervisor or a director or an employee of a corporate shareholder in accordance with Paragraphs 1 or 2 under Article 27 of the Company Act (This, nevertheless, does not apply to cases where the person is an independent director of the Company, its parent company or any subsidiary or a subsidiary with same parent company where the independent directors perform multiple duties concurrently among themselves in accordance with the Act or the laws and ordinances concerned prevalent in the home country).
(6) The directors and supervisors or employees of another company not under control by a same person as the Company's directors with one half majority of the shares (This, nevertheless, does not apply to cases where the person is an independent director of the Company, its parent company or any subsidiary or a subsidiary with same parent company where the independent directors perform multiple duties concurrently among themselves in accordance with the Act or the laws and ordinances concerned prevalent in the home country).
(7) Not as a director (trustee), supervisor (supervising officer) or employee of another company or institution as the same person or the spouse thereof of the Company's Chairman, President or person of equivalent position (This, nevertheless, does not apply to cases where the person is an independent director of the Company, its parent company or any subsidiary or a subsidiary with same parent company where the independent directors perform multiple duties concurrently among themselves in accordance with the Act or the laws and ordinances concerned prevalent in the home country).
(8) Not as a director (trustee), supervisor (supervising officer) , manager or a shareholder holding more than 5% of the shares of a specific company or institution in financial or business transaction with the Company(This, nevertheless, does not apply to a specific company or institution which holds more than 20%, less than 50% of the aggregate total outstanding shares of the Company, and where the company and its parent company, subsidiary or a subsidiary with the same parent company where the independent directors perform multiple duties concurrently among themselves according to the Act or the laws prevalent locally.)
(9) Not as the enterprise proprietor, partner, director (trustee), supervisor (supervisory officer), manager and the spouse thereof of the professionals, sole proprietors, partners, companies or institutions rendering auditing, commercial, legal, financial, accounting and such relevant services to the Company or affiliated enterprises thereof with remuneration obtained over the past two years not beyond NT$500,000. This, nevertheless, does not apply to a member of the Open Acquisition Committee, Compensation Committee or Special Merger/Acquisition (M&A) Committee in accordance with Securities and Exchange Act, Business Mergers and Acquisitions Act and relevant laws.
(10) Not been a person or any conditions defined in Article 30 of the Company Act.

(2) Responsibilities and powers of Compensation Committee:

The Committee shall exercises due diligence as a bona fide administrator to faithfully fulfill the responsibilities and powers below and submit the proposal to the Board of Directors into discussion:

Reassess the present organization and offer proposal for amendment.
2 Enact and reassess on a regular basis the performance targets by the Board of Directors and the managers, their salary remuneration system standards/criteria and structures.
Reassess on a regular basis the accomplishment of the performance targets by the Company's directors and managers and fix the contents and amounts of their individual salary remuneration.
(3) Information of the performance by the Compensation Committee:

1. The Company’s Compensation Committee has a total of 3 Committee members.

2. Tenure of office of Compensation Committee members of the current session: June 27, 2017~June 26, 2020. Within the most recent year (2019), the Compensation Committee convened 5 meetings (A). The qualifications and attendance facts of the Compensation Committee members are enumerated below:

	below:	below:
Position Title	Name		Times of Attendance in Person (B)	Times of Attendance by Proxy	Actual Attendance Ratio (%) (B/A) (Note)	Remarks
Convener	KuangHsun Shih		5	0	100%
Commission member	Wen Tzong Chen		5	0	100%
Commission member	Sung Tung Chen		5	0	100%
Other matters to be noted in the meeting minutes: I. If the Board of Directors refuses to accept of modify suggestions of the Compensation Committee, the meeting date, session, agenda content, results resolved by the Board of Directors, and the Company’s treatment of opinion of the Compensation Committee should be clearly stated (for example, if the Board of Directors approved a compensation structure that is better than that suggested by the Compensation Committee,the circumstance of discrepancyand reason should be clearlystated): Nil Compensation Committee Contents of motions and the subsequent measures The 7th of Session 3 1/23/2019 1. Approval with apass of working plans 2019 2. Approvalwith apass of allocation ofyear-end bonus to managers in 2018 3. Approval with a pass of promotions for Manager Ching Fu Chen, Manager Wen Hui Lin. Opinionsvoiced by Committee members : N/A. Acts taken bythe Companyin response to the Committee members’ opinions: N/A. Result of decision resolved: Unanimouslyresolved byall directors in full. The 8th of Session 3 3/21/2019 1. Approval with a pass of allocation of remuneration to employees and directors, 2018 2. Approval with apass of special incentive awards to managers 2018 Opinionsvoiced by Committee members: N/A. Acts taken bythe Companyin response to the Committee members’ opinions: N/A. Result of decision resolved: Unanimouslyresolved byall directors in full. The 9th of Session 3 1. Approvalwith apass ofpromotion of managers Opinions voiced byCommittee members : N/A.
Compensation Committee		Contents of motions and the subsequent measures
The 7th of Session 3 1/23/2019		1. Approval with apass of working plans 2019
		2. Approvalwith apass of allocation ofyear-end bonus to managers in 2018
		3. Approval with a pass of promotions for Manager Ching Fu Chen, Manager Wen Hui Lin.
		Opinionsvoiced by Committee members : N/A.
		Acts taken bythe Companyin response to the Committee members’ opinions: N/A.
		Result of decision resolved: Unanimouslyresolved byall directors in full.
The 8th of Session 3 3/21/2019		1. Approval with a pass of allocation of remuneration to employees and directors, 2018
		2. Approval with apass of special incentive awards to managers 2018
		Opinionsvoiced by Committee members: N/A.
		Acts taken bythe Companyin response to the Committee members’ opinions: N/A.
		Result of decision resolved: Unanimouslyresolved byall directors in full.
The 9th of Session 3		1. Approvalwith apass ofpromotion of managers
		Opinions voiced byCommittee members : N/A.

	4/25/2019	Acts taken bytheCompanyin responsetothe Committeemembers’opinions:N/A.
		Result of decision resolved: Unanimouslyresolved byall directors in full.
	The 10th of Session 3 8/8/2019	1. Approval with a pass of partial amendment to the Organizational Rules of the Compensation Committee.
		2. Approval with a pass of Regulations Governing Evaluation of Performance by Board of Directors
		3. Approval with a pass of allocation of remuneration to employees (including managers)and directors,2018.
		4. Approvalwith apass of salaryraise for theChairman 2019
		5. Approvalwith apass of salaryraise for managers 2019
		6. Approval with a pass of salary raise for subsidiary Land & Sea Capital Corp. Chairman
		Opinionsvoiced by Committee members: N/A.
		Acts taken bytheCompanyin responsetothe Committeemembers’opinions:N/A.
		Result of decision resolved: Unanimouslyresolved byall directors in full.
	The 11th of Session 3 11/7/2019	1. Approval with a pass of partial amendment to the Regulations Governing Retirement of Managers
		Opinionsvoiced by Committee members: N/A.
		Acts taken bythe Companyin response to the Committee members’ opinions: N/A.
		Result of decision resolved: Unanimouslyresolved byall directors in full.
	The 12th of Session 3 1/16/2020	1. Approval with apass of workplans 2020
		2. Approval with a pass of year-end bonus to managers 2019
		Opinionsvoiced by Committee members: N/A.
		Acts taken bythe Companyin response to the Committee members’ opinions: N/A.
		Result of decision resolved: Unanimouslyresolved byall directors in full.
	The 13th of Session 3 3/19/2020	1. Approval with a pass of allocation of remuneration to employees and directors, 2019
		Opinions voiced byCommittee members : N/A.
		Acts taken bytheCompanyin response to theCommittee members’opinions:N/A.
		Result of decision resolved: Unanimouslyresolved byall directors in full.

Remarks:

(1) In case of resignation by Compensation Committee member(s) before end of a fiscal year, the Company should remark in the Remark Box date of resignation, actual participation rate (%) and the number of time(s) of the meeting(s) convened by the Compensation Committee and attended by the quitting Committee member(s) for calculation.

(2) In case of reelection of Compensation Committee members before end of a fiscal year, the Company should enumerate names of the former Committee members and newly elected Committee members and further indicate in the in the Remark Box as former ones, newly elected ones, actual participation rate (%) and the number of time(s) of the meeting(s) convened by the Compensation Committee and attended by the quitting Committee member(s) for calculation.

(V) Fulfilment of corporate social responsibility

(V) Fulfilment of corporate social responsibility
Evaluation Items			Facts ofperformance(Note 1)	The discrepancy of such implementation from the Corporate Social Responsibility Best Practice Principles for TWSC/GTSM Listed Companies, and the reason for any such discrepancy
	Yes	No	Description in Summary (Note 2)
I. Does the Company conduct environmental, social and governance risk assessments according to the principle of materiality, and formulate relevant risk management policies or strategies accordingly?(Note3)	V		Please refer to Section 3, Chapter 1 of CSR Report regarding major issues and materiality assessments.	No discrepancy
II. Does the Company implement a full-time (part-time) sector to promote corporate social responsibility, and for the Board of Directors to authorize the senior management to take action and report the disposition status to the Board of Directors?	V		The Company has set up a corporate social responsibility department. Please refer to Page 8 of the CSR Report.	No discrepancy
III. Environmental Issues (I) Does the Company establish a proper environmental management system in response to its industry characteristics? (II) Does the Company endeavor to upgrade the utilization efficiency of various resources, and use the regenerated material with a low impact on environmental load? (III) Does the Company assess existing and potential risks and opportunities associated with climate change and adopt the corresponding responses and measures? (IV) Does the Company calculate the GHG emissions, water consumption and total wastes during the past two years, and formulate policies to achieve energy efficiency, reduction of carbon emissions, GHS emissions, water consumption or manage wastes?	V V V V		(I) The Company has obtained the ISO14001 certification in environment management systems. (II) Please refer to Section 2, Chapter 3 of CSR Report. (III) Please refer to Section 2, Chapter 3 of CSR Report. (IV) Please refer to Section 2, Chapter 3 of CSR Report.	No discrepancy No discrepancy No discrepancy No discrepancy

IV. Maintenance of Community Public Welfare (I) Does the company establish related management policies and procedures in accordance with related laws and international covenants on human right? (II) Does the Company formulates and implemented an employee welfare scheme (including wages, holidays and other benefits) and reflected appropriately the business performance onto employee remunerations? (III) Does the company provide employees with a safe and healthy working environment, and implement safety and health education to employees on a periodical basis? (IV) Does the Company establish effective career competency development and training plans for employees? (V) Does the Company observe the relevant laws, regulations and international standards regarding the health, safety, customer privacy, marketing and labeling of products/services, and has formulated relevant policies and complaint procedures to protect the right of consumers? (VI) Does the Company set up supplier management policies by requesting suppliers to adhere to relevant standards in environmental protection, occupational health & safety or labor & human rights and reporting their implementations accordingly?	V V V V V V		(I) Please refer to Section 1, Chapter 4 of CSR Report. (II) Please refer to Section 2, Chapter 4 of CSR Report. (III) Please refer to Section 2, Chapter 4 of CSR Report. (IV) Please refer to Section 2, Chapter 4 of CSR Report. (V) Please refer to Section 3, Chapter 4 of CSR Report. (V) Please refer to Section 3, Chapter 4 of CSR Report.	No discrepancy No discrepancy No discrepancy No discrepancy No discrepancy No discrepancy
V. Does the Company refer to internationally acceptable standards or guidelines for the compilation of CSR reports to disclose non-financial information? Are these reports confirmed or endorsed by third-party evaluation organizations?	V		The Company adopts the GRI (Global Reporting Initiative) standards in its compilation of CSR Reports by listing out core items and disclosing our strategy, philosophy, measures, and performance in corporate social responsibility. We aim to provide reliable and open information to the public. The report is compliant with AA1000 standard.	Not certified by a third party
		V	OurCSR report is not certified bya third-party

evaluation organization.

VI. In case a company establishes its own Corporate Social Responsibility Code in accordance with “Corporate Social Responsibility Best Practice Principles for TWSC/GTSM Listed Companies”, please describe its operation and the deviation from the established Best Practice Principles: The Company’s website contains a section decided to corporate social responsibility with information regarding our CSR initiatives (https://www.gppc.com.tw/gppc/reponsibility.asp). We released our 2018 CSR report on June 30, 2019. The Company adopts the GRI (Global Reporting Initiative) standards in its compilation of CSR Reports by listing out G4 core items. We upload our CSR report on our official website and Market Observation Post System, so that our stakeholders can browse and download.

VII. Other important information facilitating to understand the operation status of corporate social responsibility:
(I) Composition, responsibility and functioning of CSR Steering Committee The Company established CSR Steering Committee in April 2011, with responsibility and operations as follows: 1. Committee members

	CSR Steering Committee President Yang/ Senior Vice President Huang/ Senior Vice President Chou / General Manager Liang	CSR Steering Committee President Yang/ Senior Vice President Huang/ Senior Vice President Chou / General Manager Liang	CSR Steering Committee President Yang/ Senior Vice President Huang/ Senior Vice President Chou / General Manager Liang
					Executive Secretary Financial Dept. (Taipei) / Environment & Safety Dept. (Kaohsiung)


Corporate Governance Committee  Formulation and maintenance of ethical corporate management  Financial and accounting indicators  Legal affair indicators (Manager Chen, Office of the President/Internal Audit) (Manager Chen, Finance Dept.) (Director Chen, Accounting Dept.) (Manager Shen, Human Resources Dept.)	Employee Welling Committee  Employee benefit indicators  Employee training indicators  Employee care indicators (Manager Shen, Human Resources Dept.) (Director Lee, Plant Operations Dept.)	Environmental Protection & Energy Conservation Committee  Carbon/water footprint indicators  Safety & health indicators  Organization/product aspects  Environmental protection, energy efficiency and carbon reduction (Hung Min Hsueh, Industrial Safety Dept.)	External Communication Committee  Communication with clients  Communication with suppliers  Communication with institutional shareholders and media (Senior Vice President Chou, Sales Dept.(SM)) (Director Chang, Purchasing Dept.) (Manager Wu, Sales Dept.(Polymer)) (Manager Chen, Finance Dept.)	Social Care Committee  Social care (Director Lee, Plant Operations Dept.)

2. Responsibility

(1) Environmental Protection & Energy Conservation Committee (Environment & Safety Dept./Utility Plant)
‧ Advocate of Greenhouse Gas Management System
‧ Administering of drills without advanced notices

  - ‧ Management of energy efficiency and carbon reduction

(2) Social Care Committee (Plant Operation Dept.)
- ‧ Organization of charity events
- ‧ Sponsorship of environmental and social campaigns
- ‧ Assistance in employment for the mentally/physically disabled and support for the disadvantaged groups
- ‧ Promotion of barrier free facilities
(3) Employee Welling Committee
- ‧ Employee care
(4) Corporate Governance Committee
- ‧ Corporate governance
(5) External Communication Committee
- ‧ Communication with internal/external stakeholders
Operations

The first meeting in 2019

(1) Date: January 17, 2019
(2) Attending members: Chairman Pin Cheng Yang, President Chia Hsiung Tseng, Senior Vice President Chen Ming Chou, Senior Vice President Hsi Hui Huang, Jen Chieh Liang General Manager, Vice President Ching Fu Chen, Director Hung Min Hsueh, Director An Teng Lee.
(3) Reported item: report on promotion of CSR initiatives in 2019

The second meeting in 2019

(1) Date: April 18, 2019
(2) Attending members: Chairman Pin Cheng Yang, President Chia Hsiung Tseng, Senior Vice President Chen Ming Chou, Senior Vice President Hsi Hui Huang, Jen Chieh Liang General Manager, Vice President Ching Fu Chen, Director Hung Min Hsueh, Director An Teng Lee.
(3) Reported item: status of 2019 CSR report preparation

(II) Environmental protection, health, and safety

1 Environmental policy

Since inception, the Company has been sparing no efforts in the establishment of strong partnerships with suppliers and customers. We endeavor to create a good work environment for employees and play our part as a corporate in environmental protection, so that all the living creatures and our future generations can enjoy a quality environment on our green planet. The Company adheres to laws and regulations concerning energy efficiency and waste reduction and implements the ISO14001 Environmental Management System. Our commitments are as follows:

(1) Compliance with environmental protection laws/regulations; support of greenness and environmental protection
(2) Top priority on pollution preventions; reduction in processing & treatment cost
(3) Good use of limited resources; recycling of wastes
(4) Encouraging employee involvement; environmental protection in day-to-day activities

(5) Efforts in ongoing improvement; pursuit of sustainable business

We hope to grow with all our suppliers and customers and assume the responsibility in protecting our environment.

2 Safety and health policy

To protect the life, health, and safety of employees of the Company and its contractors, we strive to eliminate and prevent hazards and diseases. We continue to improve operational environments and facilities, install equipment compliant with laws and engineering standards, enhance training & education for employees, set up safety requirements and a monitoring process on contractors, establish a robust and functioning health & safety system and procedures. The purpose is to better the health and safety standards and foster a good culture for health and safety throughout the Company.

To improve the work environment and protect the safety of employees, the Company has successfully introduced the OHSAS18000 (Occupational Health and Safety Assessment Series) by continued investment in the enhancement of the work environment and fire-safety equipment and management. We provide personal protective equipment (PPE) such as goggles, ear plugs or earmuffs, safety belts and fall arrest harnesses to employees. We also host regular training and education on safety to ensure safe and smooth operations and production.

3 Membership in the following environment, safety and health organizations or associations: The Industrial Health and Safety Association of the R.O.C. (IHSA) Labor Safety & Health Promotion Association Ren Da Industrial Park Service Center Taiwan Responsible Care Association (TRCA) Taiwan Safety Council Taiwan Institute of Chemical Engineers Chinese Industrial Machinery Association

4 Guidelines in environmental, safety and health management

Good use of resources, prevention of pollutions, constant improvement

Committed to sustainability in development, Grand Pacific Petrochemical Corporation has been sparing no efforts in the improvement of processing of wastewater, waste air, noise, waste solids and tackling environmental pollutions such as underground water contamination pollution. As stated in our environmental policy (guidelines for wastewater and waste management), we strive for good use of resources, prevention of pollutions and constant improvement. In addition to ongoing deployment of environmental protection facilities, we have been promoting the verification of carbon dioxide emissions. We also endeavor to reduce industrial wastes (emissions and energy management). In addition, we have been driving the ISO-14064-1 Greenhouse Gas Validation and Verification. The steam/electricity co-generation system coming online in 2011 adopted the BACT (best available control technology) and facilities at that time, to reduce the pollutions from production and transport. Meanwhile, we continue to improve operational experience and competences to protect the environment.

Deployment of Environmental Management System and Acquisition of Certifications

In 1997, Grand Pacific Petrochemical Corporation’s Kaohsiung Plant received the ISO 14001 certification from the Bureau of Standards, Metrology, and Inspection. We continue to operate in the principle of P.D.C.A. In 2007, we integrated the three ISO systems and it is still working. In addition to ISO

14001 for Environmental Management System, Grand Pacific Petrochemical Corporation’s Kaohsiung Plant also obtained certifications such as ISO 9000, ISO 45001, SONY Green Partner and ASUS Green Environmental Management System. We continue our work in good use of resources, prevention of pollutions and constant improvement in environmental management. It is our long-term goal to work with the government’s policy by producing petrochemical products that are environmental-friendly, low in pollutions and high in value added.

Training in environmental management

Environmental protection is a complex and diversified task, and it involves interactions in many aspects. For onsite and environmental professionals, the only way to enhance work efficiency is via ongoing training, education, and knowledge acquisition. Over recent years, Grand Pacific Petrochemical Corporation has been organizing relevant training programs in environmental protection. In 2018, a total of 13 people enrolled in the on-the-job training and environmental protection education.

(III) Energy efficiency schemes and greenhouse gas management

We continue to monitor energy efficiency and efficacy via energy review procedures by targeting at the energy-intensive facilities. Based on the existing energy baselines, we set up energy efficiency goals and periodically review the effectiveness of our measures. As always, we continue to monitor issues associated with climate change and energy efficiency.

(Energy Management Guidelines)

GHG emissions from our Kaohsiung plants in 2017-2018 as follows:

GHG Emissions	GHG Emissions
Year		2017	2018
Scope 1 (Unit: ton of carbon dioxide equivalent)		637,046	625,919
Scope 2 (Unit: ton of carbon dioxide equivalent)		0	4,438
Total (Unit: ton of carbon dioxide equivalent)		637,046	630,358
GHG Emission Intensity (based on outputs)
Product	Carbon emissions (kg-CO2e/kg)
Styrene Monomer(SM)	1.494
ABSD-100	1.494

To effectively control GHG emissions, the Kaohsiung Plant has replaced of the heads of inefficient air compressors and old water coolers. Some of the light bulbs were upgraded to high performance bulbs. Circulation pumps were suspended to improve manufacturing processes. These measures were expected to reduce electricity consumption by 1,418.654 KwH. A total of 9,813.347 KwH has been saved in 2015~2018, at 1.44% annualized saving ratio.

2018 Energy Efficiency Programs	2018 Energy Efficiency Programs	2018 Energy Efficiency Programs	2018 Energy Efficiency Programs
2018	Measures put in place	Calculation period (months)	Electricity consumption reduced(KWH)
Steam/electricity co-generation system	1. Change of PC-801C air compressors from fixed frequency to variable frequency	1~5	107,859
	2. Replacement of old light bulbs with high-performance products at the northside of the coalyard	1~2	3,650
	3. Replacement of old light bulbs with high-performance products at thewestside of the coalyard	2~12	14,053
	4. Replacement of the heads of PC-801B air compressors	2~12	229,859
Polymer Plant	5.Replacement of K-802A/Gair compressors	1~6	153,752
	6. Suspension of one P-603 hot water circulation pump after the improvement of FBD manufacturing process in the ABSfacilities	1~12	214,762
	7. Replacement of the water coolers and adjustment of operational methods for K-301A/B freezers	7~12	671,130
Monomer Plant	8. Replacement of SM-3 pump motors with IE3 models for higher efficiency	1~5	11,545
	9. Modification of GA-641 blade sizes at SM-2 Plant facilities	1~4	9,306
	10. Suspension of PP-369 pumps for the integration of low-pressure system in the recycling of condensate water at SM-3 Plant	1~5	2,738
		Total	1,418,654

	G.Recycledwater from thepurewater recycle system toGT-601 at old facilities	15
	Total	4,635
(V)	Preventive of soil and groundwater pollutions
	To prevent soil and groundwater pollutions, Grand Pacific Petrochemical Corporation has completed a groundwater survey on storage tanks in different
	processing areas and deployed a monitoring well system for prewarning if necessary. We have also adopted preventive measures on underground pipelines,
	oil tanks and facilities that may become the source of pollutions to soil and groundwater. For example, we		have installed a cathode protection system,
	replaced the material of oil-water separation tanks with stainless steel, and brought the previous underground pipelines to above the ground to avoid any
	leakage of organic solutions due to equipment erosion. Meanwhile, we have segmented the responsibility areas for underground pipelines and relevant
	facilities and organized patrol shifts accordingly.
(VI) Safety and integrity management of underground pipelines
	We collaborated with the Industrial Development Bureau for joint inspections after the gas explosion on August 1, 2014 in Kaohsiung. In 2018, we initiated
	an underground pipeline maintenance & management program by putting in place the following control measures.
	Control measure Details
	Thickness measurement of exposed conduits
	Frequent monitoring of electricity potential detectors
	Short term Emergency drills for underground pipelines Establishment of a regional mutual-aid organization and	preparation
	of an emergency plan
	Creeptests on undergroundpipelines
	Pipeline replacement
	Mid term Inspection with smart augers Establishment of an engineering survey mechanism
	Regular assessment ofpipeline risks
(VII) Social services and welfare campaigns
	In 2018, to give back to the society, our colleagues voluntarily organized an outreach group. They visited charities and nursery homes over holidays and gave
	donations, food, and other items. In addition, they ordered moon cakes from charity	groups during festive seasons to support these organizations.
	As economically disadvantaged children do not have sufficient access to educational resources, Grand Pacific Petrochemical Corporation organizes
	supporting classes to sponsor children from low-income families to see international art performances. We hope these efforts boost their learning
	achievements, expand their horizons, and enhance their personality development.
	In 2018, we initiated a blood donation campaign, and all our employees were keen to sign up. The outreach group purchased gifts, out of their own pocket, to
	blood donors,to encourage donationswhen the blood bankwas runninglowon reserves.

To advocate the importance of environmental maintenance and no fly-tipping or littering, the outreach group organizes a mountain clean-up event and attracted nearly 100 employees and their family members to join. Participants picked up, sorted, and wrapped up trash onsite. This activity was educational to younger generations. It also enhanced the awareness among employees regarding environmental protection in daily life. The purpose is to give back to the society, assist government and private organizations and understand the society’s needs. For example, the participation in cultural tours and festivals for agricultural produces and the purchase of fruits in season are the support of the agriculture industry in Taiwan. Meanwhile, Grand Pacific Petrochemical Corporation sponsors the fire-safety equipment and advocacy campaigns for CPR and fire prevention for brigades of Ren Da Industrial Park, Association of Volunteer Firefighters and Family Members in Renwu Precinct, Headquarters of Volunteer Firefighters in Kaohsiung City. We hope to provide director support for firefighting organizations and ensure the safety of communities.

Grand Pacific Petrochemical Corporation also encourages visits from schools as part of science education. For example, over 60 students from Kaohsiung Municipal Chung-Cheng Industrial High School visited us in December 2018. We strive to assist in science education activities.

Being a good neighbor

Our root is in Taiwan and we strive for co-living for community residents. We assist in all community and public campaigns, to promote community developments.

Grand Pacific Petrochemical Corporation provides scholarships to local students, sponsors local folklore festivals, holiday celebrations, cultural activities in proximity of schools, community cultural events and associations, summer-holiday talent classes, hiking trips for neighbors, training camps for volunteers in environmental protection, winter-warmth giving to orphanages, donations to the disadvantaged and senior citizen groups, participation in local sports events and support to health advocacy programs organized by the government.

In 2018, Grand Pacific Petrochemical Corporation and other manufacturers in Dashe Industrial Park made donations under the supervision of Review Committee of Dashe Community Contributions, to subsidize utility bills of residents; scholarships to students; lunches for senior citizens who live alone or on low incomes; books, insurance policies, tuitions, supporting class fees in elementary and junior high schools and English-language learning programs in elementary schools.

In 2018, Grand Pacific Petrochemical Corporation via the Association of Manufacturers in Dashe Industrial Park signed a MoU with Kaohsiung Municipal Renwu Senior High School in industry-academia cooperation by establishing a preparatory program for students pursuing careers in the petrochemical industry of Kaohsiung. This scheme offers scholarships to a fixed number of new students domiciled in Renwu District, Dashe District, Dashu District, Niaosong District and Nanzi District each year. Grants will be given to those who study classes in occupational safety and business ethics related to the petrochemical industry. The graduates with good grades will enjoy priority in our recruitment program.

VIII. In case the CSR Report of this company is approved through verification standards of related certification authorizes, it is required to be described: Please refer to the CSR section of our company website at www.gppc.com.tw).

Note 1: Brief explanations required whether Yes or No is ticked for facts of performance.

Note 2: For the companies that publish CSR reports, the description in summary may be provided by referring to or indexing pages in the CSR reports. Note 3: Materiality refers to significant influence of environmental, social, and corporate governance issues on investors and other stakeholders.

(VI) Facts about the Company’s implementation in ethical corporate management and the measures so adopted:

Ethical Corporate Management

Evaluation Items	Facts ofperformance(Note 1)	Facts ofperformance(Note 1)	Facts ofperformance(Note 1)	The discrepancy of such implementation from Ethical Corporate Management Best Practice Principles for TWSC/GTSM Listed Companies, and the reason for any such discrepancy
	Yes	No	Description in Summary
I. Establishment of policy and measures of ethical management. (I) Does the Company establish business ethics code and have it approved by the Board of Directors? Does the Company specify in external documents its policy, practice of operation in good faith in its corporate statutes and bylaws and the commitment from the Board of Directors and senior management to its operation policy? (II) Has the Company put in place an assessment mechanism for the risks associated with dishonest behavior, and regularly analyzed and assessed the operating activities exposed to higher risks of dishonest behavior, and formulated preventive measures accordingly and covering at least the preventive measures specified in the paragraph 2 of Article 7, the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies?	Ⅴ Ⅴ		The introduction on our company website articulates our business philosophy: Modesty Leads to Harmony; Honesty Builds Credibility. The Board of Directors on July 4, 2012 passed the Ethical Corporate Management Best Practice Principles to establish an honest corporate culture and a trusting business model. The Ethical Corporate Management Best Practice Principles stipulate that the Company’s directors (including independent directors), managers, employees, or the parties with control may not directly or indirectly offer, commit, request or accept any improper gains in the process of conducting commercial activities. This includes (1) bribery taking or receiving; (2) illegal political donations; (3) improper charity donations or sponsorships; (4) giving or taking of unreasonable gifts, entertainment, or other improper benefits. Please refer to the Company’s Ethical Corporate Management Best Practice Principles. Same as above	Compliant Compliant Compliant
(III) Does the Company specify a scheme to prevent dishonest behaviors, and expressly describe in operation procedures, conductguidelines, punitive measures and compliant	Ⅴ

Evaluation Items	Facts ofperformance(Note 1)	Facts ofperformance(Note 1)	Facts ofperformance(Note 1)	The discrepancy of such implementation from Ethical Corporate Management Best Practice Principles for TWSC/GTSM Listed Companies, and the reason for any such discrepancy
	Yes	No	Description in Summary
channels accordingly, in order to properly implement the abovementioned scheme?
II. Thorough implementation of ethical corporate management (I) Does the company evaluate the record of ethics of the transaction parties, and expressly specify clauses dealing with behaviors of ethics in the signed contracts of the transaction parties? (II) Has the Company established a unit under the Board of Directors to promote corporate operation in good faith, and regularly report to the Board of Directors (at least once per year) its execution and oversight of the business ethics policy and prevention of dishonest behavior? (III) Does the company stipulate a policy of preventing interest conflict, provide due statement channels, and actualize the execution? (IV) Has the Company established an effective accounting system and an internal control system to implement operation in good faith, designated internal auditors or commissioned external auditors accordingly to formulate audit plans based on the assessment of risks associated with dishonest behavior as the basis for the audit of dishonest behaviors?	Ⅴ Ⅴ Ⅴ Ⅴ		The Company’s procurement procedures as part of internal control require the assessment of customers and contractors. The contracts also specify the rights and obligations of both parties. The Company’s internal auditors regularly inspect compliance status and produces audit reports for the review by the Board of Directors. The Ethical Corporate Management Best Practice Principles require directors to avoid discussions and voting on behalf of themselves or other directors for the issues reviewed by the Board if the directors or the legal entities they represent are stakeholders, and the conflict of interests may detriment the interest of the Company. They may, however, express opinions and answer questions. The Company’s accounting system and internal control system are formulated according to relevant laws and regulations stipulated by the government and based on our own practical requirements. Auditors have come up with audit plans and report to the Board of Directors regarding the audit results. The Ethical Corporate Management Best Practice	Compliant Compliant Compliant Compliant Compliant
(V) Does the companyhold internal, external educational	Ⅴ

Evaluation Items	Facts ofperformance(Note 1)	Facts ofperformance(Note 1)	Facts ofperformance(Note 1)	The discrepancy of such implementation from Ethical Corporate Management Best Practice Principles for TWSC/GTSM Listed Companies, and the reason for any such discrepancy
	Yes	No	Description in Summary
training for ethical corporate management on a periodical basis?			Principles is uploaded on the intranet for employees to access. Regular training & education sessions on business ethics are organized.
III. Operation Status of Corporate Reporting System of an Offense (I) Does the company establish substantial offense reporting and incentive systems, and establish convenient offense reporting channels, and assign proper exclusively responsible personnel to accept the reported subject of an offense? (II) Has the Company established the standard investigational procedures of receiving whistle-blowing reports, subsequent measures after investigations and the confidentiality mechanism? (III) Does the company take measures to protect an offense reporting party from suffering improper disposition due to an offense report?	Ⅴ Ⅴ Ⅴ		The procedures for whistleblowing and system for penalties and punitive measures specified in the Ethical Corporate Management Best Practice Principles are posted on the intranet. Same as above Same as above	Compliant Compliant Compliant
IV. Strengthen Information Disclosure Does the company disclose the content of Ethical Corporate Management Best Practice Principles and promotion performance in its website and Market Observation Post Site?	Ⅴ		The procedures for whistleblowing and system for penalties and punitive measures specified in the Ethical Corporate Management Best Practice Principles areposted onthe Companywebsite.	Compliant
V. If the Company has duly enacted Ethical Corporate Management Best Practice Principles in accordance with “Ethical Corporate Management Best Practice Principles for TWSC/GTSM Listed Companies”, please elaborate the discrepancy between the substantial performance and the Ethical Corporate Management Best Practice Principles: N/A
VI. Other significant information which would help better understand the performance by the Company in Ethical Corporate Management Best Practice Principles: (e.g.,the companyin reviewingand updatingthe established Ethical Corporate Management Best Practice Principles,etc.): Nil

Note 1: Brief explanations required whether Yes or No is ticked for facts of performance.

(VII) If the Company has established Ethical Corporate Management Best Practice Principles and relevant rules, please disclose the method for inquiry: The Company has enacted “Rules Governing Code of Ethical Conduct” and promulgated it into the Company website.
(VIII) Other key information likely to enhance awareness of performance in corporate governance of the Company should be disclosed as well in consolidation:

The Company discloses significant internal information through the operating procedures as enumerated below which are accessible through the Company website or Market Observation Post System (MOPS).

1. The Company's organizer, co-organizer(s) in charge of “significant information”

the Company website or Market Observation Post System (MOPS). 1. The Company's organizer,co-organizer(s)in charge of “significant information”
Contents	Unit in charge	Unit of input
The term “significant information of listed companies” as set forth herein denotes the issues as enumerated below:
1. The information where the listed company and its person in charge, the parent company or subsidiary's facts with insufficient deposit, being denied service by banks, or other events that result in the loss of creditability, parent company’s significant change in equity, or the listed company's share certificates suspended from trading, terminated from listing or restoration to the_status quo_with public announcement according to the Company's Regulations GoverningBusiness Operation.	Finance Dept.	Finance Dept.
2. The information where the listed company and its person in charge have been in significant impact upon the Company's finance or business operation due to litigious, non-litigious affairs, administrative penalty, provisional seizure (attachment), provisional injunction or compulsory enforcement, or where the Company's chairman or manager violates Securities and Exchange Act, Futures Trading Act, Company Act, Banking Act, Insurance Act, Act Governing Bills Finance Business, Financial Holding Corporation Act, Commercial Accounting Act, or has been prosecuted for having committed corruption, malfeasance, fraud, betrayal, misappropriation.	Finance Dept.	Finance Dept.
3. The information where severe production reduction or total or partial shutdown takes place, the Company's plant or main equipment is leased out, the Company's assets are mortgaged or pledged either in whole or in part with an impact upon the Company's business operation.	General Manager (Kaohsuing) Spokesperson (in assistance)	Finance Dept.
4. The information where an event among those enumerated under Paragraph 1, Article 185 of the Company Act takesplace.	Finance Dept.	Finance Dept.
5. The information where the listed company, its parent company, or its subsidiary company undergoes corporate reorganization or bankruptcy procedures, all events that occur during the proceedings, including any claims, petitions subject to any notice or ruling made by a court, or, as ruled by the court in accordance with the relevant laws and regulations to prohibit the transfer of stocks, or including preservation and punishment, or where there is a major change in the aforementioned issue.	Senior Vice President, Finance Dept.	Finance Dept.
6. The information where Chairman, President, legal person directors and supervisors and their representatives, independent directors,naturalperson(individual)directors and supervisors,members of the functional	Finance Dept.	Finance Dept.

committee established in accordance with the provisions of the Securities and Exchange Act is (are) appointed (elected) by more than one third or where the first listed company has no independent director with household registration in the Republic of China.
7. The informationwhere averifying CPA is changed not as a result of internal adjustment.	AccountingDept.	AccountingDept.
8. The information where spokesperson, acting spokesperson, important operation supervisor (such as: chief executive officer, chief operating officer, marketing chief and strategy chief, etc.), Treasurer, Accounting Head, corporate governance supervisor, R & D supervisor, internal audit supervisor and other personnel is (are)changed orwhere the first listed company's litigious,non-litigious agent is changed.	Office of the President	Finance Dept.
9. The information where the fiscal year is changed, where the boards of directors resolves a change in the accounting information subject to public announcement or declaration to the competent authorities as required under the “Regulations Governing the Preparation of Financial Reports” or where an application to the competent authorityfor an accountingchange is disapproved bythe competent authority.	Accounting Dept.	Accounting Dept.
10. The information where a significant memorandum, strategic alliance or other business cooperation plan or non-inter-competition commitment or key contract is(are) executed, terminated or rescinded, changed for the key content, successfully completed in product development into formal volume production, or where new product, new technology & know-how is developed in progress, leading to a significant effect upon the Company's finance or business operation.	President	Finance Dept.
11. The information where the board of directors resolves to reduce capital, for merger/acquisition (M&A), demerger, acquisition, share exchange, conversion or transfer, dissolution, capital increase to issue new shares, capital reduction and cash capital increase base date, issuance of corporate bonds, issuance of employee stock certificates, issuance of restricted employee rights oriented new shares, issuance of other negotiable securities, private placement of negotiable securities, changes in denominations per share, participation in the establishment or conversion of financial holding companies or investment holding companies or their subsidiaries, or major changes in aforementioned matters; or where the board of directors meeting or shareholders’ meeting oriented to participation in mergers, demerger, acquisitions or transfer of shares is not duly convened as scheduled for any reason or where either party rejects an issue of mergers, demerger, acquisitions or transfer of shares or where board of directors resolves another decision to revoke the decision for merger after havingresolved for merger.	Finance Dept.	Finance Dept.
12. The information for date, time, venue and relevant information of a juristic person explanation meeting where the Company has been invited to participate has not been input into the Market Observation Post System (MOPS)or in other means.	Finance Dept.	Finance Dept.
13. The information that the board of directors resolves to disclose financial forecast, where the financial forecast proves not applicable, or where the financial forecast has been corrected or updated: Where the integral financial forecast having been made public meets any one among those circumstances enumerated below with the change in discrepancy exceeds 20% with affected amount up to NT$30 million or 5‰ of the capital: (1) The discrepancy between the comprehensive profit and/or loss in the self-settlement in the latest promulgation&declarationwithin one month from closure of a fiscalyear and the forecast figure of	Accounting Dept.	Accounting Dept.

comprehensive profit and/or loss in the most recent announcement and declaration to public. (2) The discrepancy between the comprehensive profit and/or loss in the financial statement in the year of announcement and declaration to public and the forecast figures. (3) The discrepancy between the comprehensive profit and/or loss in the financial statement in the year of announcement and declaration to public and the comprehensive profit and/or loss in self-settlement in the announcement and declaration within one month from closure of a fiscal year. In case of a company without denominations or with denomination per share not in NT$10, the calculation of theprevious5‰of the share capital should be replaced by2.5‰of the networth instead.
14. The information where the decision resolved by the board of directors regarding distribution or no distribution of dividend, or the decision regarding distribution of dividend resolved by the board of directors has been changed as resolved by the shareholders’ meeting, or the cash dividend resolved to be distributed gets the target (base) date for distribution changed after being resolved or the date for cash dividend distribution is resolved after being promulgated or the cash dividend remains not distributed even after the scheduled target (base)date.	Finance Dept.	Finance Dept.
15. The information where the board of directors or shareholders’ meeting resolves for investment plan either directly or indirectly up to 20% of the Company's capital or exceeds NT$1 billion; or where the aforementioned issue is significantly changed. In case of a company without denominations or with denomination per share not in NT$10, the aforementioned 20% shall be counted with 10% of the net worth instead.	Finance Dept.	Finance Dept.
16. The information where a plan for capital increase through cash injection, a plan to raise corporate bonds has been declared effective, and a private placement plan has been resolved by the board of directors or the shareholders’ meeting but was later changed thereafter changed under a decision resolved in the board of directors.	Finance Dept.	Finance Dept.
17. The information where the board of directors resolves the date scheduled for an annual meeting of shareholders or a special shareholders meeting,reasons to convene the meetingand book closure day.	Finance Dept.	Finance Dept.
18. The information of major decision(s) resolved in an annual meeting of shareholders or special shareholders meeting.	Finance Dept.	Finance Dept.
19. The information of occurrence of a fraud in internal control system, extraordinary transaction, draining corporate funds or such significant event, or an event the Company is under search investigation according to law.	Finance Dept.	Finance Dept.
20. The information consistent with the requirements as enumerated below: (1) The information where a listed company or its subsidiary with stocks not issued to public domestically acquires or disposes of assets in the level subject to announcement and declaration to public as required under Articles 31 and 32 of “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” except an event among any situation among those enumerated below: 1) Where public announcement for merger, demerger, acquisition or inward transfer of shares has been satisfactorilycompleted in accordancewithSubparagraph 11 of this Paragraph.	Finance Dept.	Finance Dept.

2) Where public announcement for acquisition or disposal of private placement has been satisfactorily completed in accordance with Subparagraph 24 of this Paragraph. 3) Where the information of derivative financial instrument transaction has been declared prior to 10th day of every month. 4) The information of acquisition or disposal of open funds in a variety of public offerings or wealth management commodities issued by commercial banks due within three months. (2) Where a listed company engages in derivative financial instruments where the unrealized loss accounts for over3%of the networth,that companyshall conduct announcement and declaration.
21. The information where a decision resolved by the board of directors (or shareholders’ meeting) permits a manager (or a director) to engage in an act in competition against the Company, where the Company has been aware that a manager has engaged in business of the same category for himself or herself or for another, or that a director has engaged in an act for business within the same scope of the Company's, or the manager or director has invested or engaged in a business in Mainland China for which no permit has been obtained from the board of directors (or shareholders’ meeting) or where an aforementioned business affair has been in a significant change.	Finance Dept.	Finance Dept.
22. The information where a listed company is required under Article 25 of “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” to launch announcement and declaration for endorsement/guarantee.	Finance Dept.	Finance Dept.
23. The information where a listed company is required under Article 22 of “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” to launch announcement and declaration for fund loaned to others.	Finance Dept.	Finance Dept.
24. The information where a listed company or its subsidiary acquires or disposes of negotiable securities in privateplacement.	Finance Dept.	Finance Dept.
25. The information where a key buyer or supplier of a listed company that accounts for over 10% of the total sales amount or purchase amount as covered in the individual (respective) financial statement in the most recent fiscalyear.	Senior Vice President, Sales Dept.	Finance Dept.
26. The information of a disaster, collective protest, strike, environmental pollution or other major incident that results in one of the following (1) A significant impairment to the Company. (2) A decree issued by the competent authority for Suspension of work, suspension of business, discontinuity from business, revocation or cancellation of pollution-related permits. (3) A single case involvingaccumulatedpenaltyamountingto over NT$1 million.	General Manager (Kaohsiung)	Finance Dept.
27. The information where a listed company and its creditor bank convene a meeting where the result of negotiation is ascertained.	Finance Dept.	Finance Dept.
28. The information where a related party or key debtor of a listed company or the joint guarantor thereof is dishonored of negotiable instruments, petitioning for bankruptcy, reorganization or other significant similarity, where a keydebtor under endorsement/guarantee bythe listed companyis insolvent for due negotiable	Finance Dept.	Finance Dept.

instrument,loan or other liability.
29. The information where the contents of the Declaration of Internal Control System in the routine declaration are changed and submitted anew, or where the “Dedicated Review Report of Internal Control System” in the dedicated internal control system audit is obtained from theCPA.	Internal Audit	Internal Audit
30. The information where the Company failed to launch announcement and declaration for the financial statement within the specified time limit, or the declared financial statement is found to have been erroneous or left out something where the Company is required to prepare anew in accordance with Article 6 of Securities and Exchange Act Enforcement Rules; where for the financial statement under announcement and declaration the CPAs have issued audit report other than an audit report with unqualified (unreserved) opinion or where the CPAs have issued an Audit Report with unqualified (unreserved) opinion or other than amended audit report with unqualified (unreserved) opinion; except an event where according to law, the loss could be amortized year-by-year, or where in the interim financial statement, a non-key subsidiary or an investee in equity method counted the amount of profit and/or loss based on a financial statement not audited or viewed by a CPA for which the certifying CPA issued financial statement with qualified opinion or modified unqualified opinion. In the event that the aforementioned non-key subsidiary is a financial holding subsidiary, nevertheless, the interim financial statement shall be duly audited or reviewed by a CPA according to laws and ordinances concerned.	Accounting Dept.	Accounting Dept.
31. (This Paragraph is deleted)
32. The information where after the stocks were put under centralized depository custody, the stocks under centralized custody were retrieved under execution order by a court or other cause before expiry of the custody period,makingthe centralized custodyinadequate in ratio.	Finance Dept.	Finance Dept.
33. The information of a change in equity of the Company under Paragraphs 1 and 2 of Article 369~8 of the CompanyAct where the Companyreceived the notice.	Finance Dept.	Finance Dept.
34. The information where one of the directors and supervisors received a court ruling for provisional injunction with suspension from the powers or an emergency measure or where a director received a court ruling for provisional injunction with suspension from the powers or an emergency measure, making the board of directors unable to exercise thepower.	Finance Dept.	Finance Dept.
35. The information where the Company is required to launch announcement and declaration in accordance with the “Regulations GoverningShare Repurchase byExchange-Listed and OTC-Listed Companies”.	Finance Dept.	Finance Dept.
36. The information in case of any one among those circumstances enumerated below due to capital decrease or a change in the denomination per share: (1) Completion in registration of the capital change. (2) A pass in the anticipated conversion of shares. (3) Where the share conversion was not executed as planned later on. (4) Where upon promulgation of the financial statement, the number of common shares counted based on the promulgated financial statement differs from the number of shares outstanding because of capital decrease or change in the denominationper sharewhere theprocedures for listingof the converted new	Finance Dept.	Finance Dept.

shares has not been completed. (5) Where the listed company has to launch capital decrease and share conversion and where the transferee in the segmentation is not a TWSC/GTSM listed company, such information including the share capital, net worth and net worth per share in the financial statements under own settlement or audited by CPAs of the company being divided and the transferee company in the division on the date preceding the target (base) date for division three business days prior to restoration of transaction, and the earnings per share(EPS)in the most recent term audited bythe CPAs.
37. The information where the commitment was issued upon application for listing where the commitment could not be fulfilled, and where the supplementary process was not completed within three months from date of occurrence of the fact.	N/A
38. The information subject to announcement and declaration to public as required under the “Regulations GoverningPublic Tender Offers for Securities of Public Companies”.	Finance Dept.	Finance Dept.
39. The information where a financial holding corporation or a bank, a listed company as a securities firm, futures firm or insurance company defined under Article 2 of the Organizational Rules of Financial Supervisory Commission is revoked by competent authority from business license, or is penalized with a fine in aa single incident amounting to over NT$1 million because of being in contravention of Financial Holding Corporation Act, Banking Act, Act Governing Bills Finance Business, Insurance Act, securities & futures related law except a case where the penalty is in a category of rectification or corrective action to be completed within the specified time limitwithout impact not significant enough upon theCompany's finance or business operation.	N/A
40. The information where the transaction is suspended or restored by the Company in accordance with these Procedures through apublic announcement.	Finance Dept.	Finance Dept.
41. The information of the increase/decrease change in the number of companies held by an investment holding corporation.	N/A
42. The information where the board of directors or shareholders’ meeting resolves a decision to apply for termination from listed tradingof negotiable securities,or a significant change in the aforementioned issue.	Finance Dept.	Finance Dept.
43. The information where the Company launches donation toward a related party or a non-related party in accordance with the “Regulations Governing Procedure for Board of Directors Meetings of Public Companies”.	Finance Dept.	Finance Dept.
44. The information where the members of Audit Committee, Compensation Committee object or voice reserved opinions as backed up with records or documented declaration; where the listed company having set up Audit Committee with a decision resolved by its board of directors not passed in the Audit Committee but resolved by two-thirds majority vote in the board of directors; where the salary amount(s) passed in the board of directors is(are)superior to the rateproposed bytheCompensationCommittee.	Finance Dept.	Finance Dept.
45. The information where the number of shares in the capital increases through cash injection waived by all directors and supervisors exceeds one-second of the total subscribable shares as to be subscribed by specific people.	Finance Dept.	Finance Dept.
46. The information where the shares of a TWSC/GTSM listed subsidiaryheld bya TWSC/GTSM listed	Finance Dept.	Finance Dept.

company exceeds 70% of the aggregate total outstanding issued shares of that subsidiary, or 70% of the outstanding issued shares or total share capital of the listed company are held by another TWSC/GTSM listed company.
47. The information where a listed company issues negotiable securities beyond the Republic of China on Taiwan where the financial information declared in the overseas listing venue differs and calls for an adjustment because of the inconsistency between the accounting principles prevalent in the two venues; or where the financial statement of the first listed company was not prepared in accordance with the “generally accepted accounting principles” as termed under Article 3 of Regulations Governing the Preparation of Financial Reports by Securities Issuers where the inconsistency of the accounting principles so adopted from that adopted in Taiwan, the difference and the affected amount and the opinions expressed by the certifying CPA on the aforementioned item.	Finance Dept.	Finance Dept.
48. The information fallingunder Article 53-25 of the Company's OperatingRules.	AccountingDept.	AccountingDept.
49. The information where the Company forfeits control power over a key subsidiary or a firm under Paragraph 3, Article 7 deemed as a subsidiary, or the ratio of shareholding either directly or indirectly over the aforementioned subsidiary (or invested amount) exceeds 10% in accumulation within three years, or a situation consistent with Paragraph 2, Article 48~3 of the Company's Operating Rules; the part having been promulgated in accordancewith this Paragraph is not required to be counted inclusive.	Finance Dept.	Finance Dept.
50. The information where a key subsidiary or a firm under Paragraph 3, Article 7 deemed as a subsidiary is found under any one among those circumstances enumerated below in the listed transaction in the overseas securities markets: (1) Submittal to apply for listed transaction. (2) Beingaware of the result of the current review.	Finance Dept.	Finance Dept.
51. Other information with significant impact upon the major decisions resolved in the board of directors, or the shareholders’equity of thelisted company orprices ofsecurities.	Finance Dept.	Finance Dept.

2. The Company's handling procedures toward significant internal information:

	Taiwan Stock Exchange Corporation (TWEC)/ Securities & Futures Institute	Relevant information
Proposal	Work out news release/ Fill up significant information, Descriptions to public	 DOG06 Documentations Regulations  INC02 Regulations of Authorization on Duties
Execution
Promulgation & declaration

(IX) Implementation of internal control system
Declaration on internal control system

DECLARATION ON INTERNAL CONTROL SYSTEM OF A LISTED PUBLIC COMPANY Indicating valid in both design and implementation

(All laws and ordinances concerned adopted in the present Declaration apply to all parts in law compliance)

Grand Pacific Petrochemical Corporation Declaration of Internal Control System

Date: March 19, 2020

Over the Company’s internal control system of Year 2019, based on the results of our self-audit, we’d hereby like to declare enumerated below:

I. Here at the Company, we confirm full awareness that implementation and maintenance of the internal control system are the inherent responsibility of the Company’s Board of Directors and managers. The Company has duly set up such internal control system in an attempt to provide rational assurance of the effectiveness and efficiency of the business operation (including profitability, performance and assurance of the safety of assets), reliability, timeliness, transparency of reporting, and compliance with applicable rulings, laws and regulations to accomplishment of the compliance targets.
II. Internal control system is subject to inherent restriction, disregarding how sound it has been designed. Effective internal control system could only provide rational assurance for accomplishment of the three aforementioned targets. Besides, in line with the changes in circumstances and environments, effectiveness of internal control system might change as well. For the Company’s internal control system, nevertheless, we have set up sound self-superintendence mechanism. As soon as a defect is identified, the Company would take corrective action forthwith.
III. Exactly in accordance with the items of judgement for the effectiveness of the internal control system under “Regulations Governing Establishment of Internal Control Systems by Public Companies” (hereinafter referred to as the “Regulations”), we duly judge whether the internal control system is effective in design and implementation. The items adopted for aforementioned “Regulations” for judgement of internal control system are the process for management control. The internal control system is composed of five composition elements: 1. Circumstances of control, 2. Risk assessment, 3. Control operation, 4. Information and communication, and 5. Superintendence. Each and every composing element includes a certain items. For more details regarding the aforementioned items, please refer to contents of the “Regulations”.
IV. Here at the Company, we have adopted the aforementioned items of judgement over internal control system to verify the effectiveness of the design and implementation of the internal control system.
V. On the grounds of the results of verification in the preceding paragraph, we are confident that the Company’s internal control system in design and implementation as of December 31, 2019[Note 2] (including the superintendence and management over subsidiaries), including the understanding of the results and efficiency of business operation in accomplishment of the targets, reliability, timeliness, transparency of reporting and compliance with applicable rulings, laws and regulations are effective and would reasonably assure accomplishment of the aforementioned targets.
VI. The Declaration will function as the key element of the Company’s Annual Report and Prospectus and will be made public externally. In the event that the aforementioned made public involve misrepresentation, concealment or such unlawful practice, the Company shall get involved in the legal responsibilities under Articles 20, 32, 171 and 174 of the Securities and Exchange Act.
VII. This declaration has been approved by the Company’s Board of Directors on March 19, 2020. Seven directors were in attendance, there were no objecting opinions, and all directors in attendance hereby

state their agreement to the contents of this declaration.

Grand Pacific Petrochemical Corporation Chairman: (Signature & Seal) President: (Signature & Seal)

Note 1: In terms of design and implementation of an internal control system in a listed public company, the significant fault found within a year, if any, shall be expressly enumerated and remarked for the significant fault found in the self-evaluation with a paragraph of descriptions to be added behind Paragraph 4 of the Declaration of Internal Control System, as well as the corrective action having been conducted by the company before the balance sheet date.

Note 2: The date of Declaration is “ending day of the fiscal year”.

Where a Certified Public Accountant has been delegated to review internal control system in a special project, the Audit Report of the Certified Public Accountant shall be disclosed: Nil.
(X) In the most recent year and as of the publication date of the Annual Report, facts of penalty imposed upon the Company and its internal personnel for their violation of the regulations of the internal control system, the major defects and the corrective actions taken: Nil

(XI) In Year 2019 and as of the publication date of the Annual Report, the Key Resolutions resolved in the annual meeting of shareholders and Board of Directors meeting:
In Year 2019 and as of the publication date of the Annual Report, the Key Resolutions resolved in the Board of Directors meeting:

Date when Board meeting was convened	01/23/2019	1. Decision duly resolved to appoint Crowe Horwath International to conduct audit & verification of the Company's Financial Statement 2019 and evaluation of independence. 2. Approval with apass of the Company's budget for 2019.
Date when Board meeting was convened	03/21/2019	1. Approval with a pass of the Company's allocation of remuneration to employees and directors 2018. 2. Approval with a pass of the Company's Individual Financial Statement and Consolidated Financial Statement 2018 3. Approval with a pass of the Company's Declaration of Internal Control System 2018. 4. Decision resolved by the Company's Board of Directors on the date to convene the 2019 annual meeting of shareholders. 5. Approval with a pass of the Company's acceptance of proposals to the 2019 annual meeting of shareholders. 6. Approval with a pass of the Company's “Procedures for the Acquisition or Disposal of Assets”. 7. Approval with a pass of the amendment to the Company's “Handling Procedures for Loaning of Funds”. 8. Approval with a pass of amendment to the Company's "Procedures for Endorsements/Guarantees”. 9. Approval with a pass of the Company's capital increase into “Land & Sea Capital Corp.” with further investment in Zhangzhou Chimei Chemical Co., Ltd. into the joint venture to build ABS, with part of the capital fund coming from allocation of earnings of Zhenjiang Chimei Chemical Co., Ltd. instead. 10. Approval with a pass of lifting of prohibition of business strife from directors. 11. Approval with apass of liftingofprohibition of business strife from managers
Date when Board meeting was convened	04/25/2019	1. Approval with a pass of the Company's allocation of earnings of 2018 2. Approval with a pass of amendment to the Company's “Articles of Incorporation” 3. Approval with a pass of enactment of the Company's “Standard Operational Procedures of Handling of Requests by Directors” 4. Approval with apass of the Company's direct investment in Mainland China
Date when Board meeting was convened	05/09/2019	1. The Company's Financial Statement of the First Quarter, 2019 2. Approval with a pass of scheduling the target (base) date and payday of dividend after the dividend allocation is passed in the annual meeting of shareholders as authorized bythe Chairman.
Date when Board meeting was convened	06/28/2019	1. Approval with a pass of changes in the Company's organization chart 2. Approval with a pass of enactment of the Company's “Organizational Rules for Investment Review Committee” 3. Approval with a pass of appointment of investment Review Committee members 4. Approval with a pass of enactment of the Company's “Regulations Governing Handlingof Reported Cases of Unethical or Unfaithful Behaviors”
Date when Board meeting was convened	08/08/2019	1. Financial Statement of the Company in Second Quarter, 2019. 2. Approval with a pass of the Company's allocation of remunerations to directors, managers and employees 2018 3. Approval with a pass of amendment to the Company's “Organizational Rules of Compensation Committee” 4. Approval with a pass of enactment of the Company's “Regulations Governing Performance Evaluation of Board of Directors” 5. Approval with a pass of enactment of the Company's “Guidelines on Corporate Governance” 6. Approval with apass of the Company's “Change in Organization Chart”
Date when Board meeting was convened	09/06/2019	1. Approval with a pass of the Company's investment in domestic hotels & catering industry.
Date when Board meeting was convened	11/07/2019	1. Approval with a pass of the Company's financial statement of the third quarter, 2019. 2. Approval with apass of the Company's internal audit and annual auditplan 2020

		3. Approval with a pass of the Company's conversion of the earnings into capital increase in the Company's indirect investee of Zhenjiang Chimei Chemical Co., Ltd. 4. Approval with a pass of the Company's capital increase into “Land & Sea Capital Corp.” with further investment in Zhangzhou Chimei Chemical Co., Ltd. into the joint venture to build PC/PETG, with part of the capital fund coming from allocation of earnings of ZhenjiangChimei Chemical Co.,Ltd. instead.
Date when Board meeting was convened	12/10/2019	1. Approval with a pass of the Company's capital increase into “Zhangzhou Chimei Chemical Co., Ltd.” via ”Land & Sea Capital Corp.” 2. Decision duly resolved to appoint Crowe Horwath International to conduct audit & verification of the Company's Financial Statement 2020 and evaluation of independence. 3. Approval with a pass of the Company's budget for 2020. 4. Approval with a pass of the motion to appropriate NT$250 million out of the unappropriated retained earnings 2018 to pay off the capital expenditure for 2019 and the workingcapital for overhaulplans in 2020.
Date when Board meeting was convened	01/16/2020	1. Performance of execution on performance evaluation of Board of Directors and various functional committees in 2019.
Date when Board meeting was convened	03/19/2020	1. Approval with a pass of the Company's allocation of remunerations to employees and directors, 2019. 2. Approval with a pass of the Company's Individual Financial Statement and Consolidated Financial Statement 2019 3. Approval with a pass of the Company's Declaration of Internal Control System 2019. 4. Approval with a pass of amendment to the Company's “Articles of Incorporation” 5. Decision resolved by the Company's Board of Directors on the date to convene 2019 annual meeting of shareholders. 6. Approval with a pass of the Company's acceptance of proposals to the annual meeting of shareholders 2020 and nomination of candidates for directors (including independent directors) 7. Approval with a pass of the Company's election of directors (including independent directors) for Session 13. 8. Approval with a pass of lifting of prohibition of business strife from directors. 9. Approval with a pass of the Company's plan to capital increase into Zhangzhou Chimei Chemical Co., Ltd. via “Land & Sea Capital Corp.”. 10. Approval with a pass of the Company's conversion of the earnings into capital increase in the Company's indirect investee of Zhenjiang Chimei Chemical Co., Ltd.

Contents of major decisions resolved in the 2018 annual meeting of shareholders and the execution thereof:

	execution thereof:
Item #	Decisions resolved in the annual meetingof shareholders
1	Report on business performance 2018. Performance in execution in 2018, the Company's net operating revenues amounted to NT$20,305,094 thousand and netprofit after tax NT$2,960,106 thousand.
2	Report bythe Audit Committee on audit of final account settlement books of 2018
3	Report on allocation of remunerations to employees and directors,2018.
4	Acknowledgement of final account settlement books 2018
5	Acknowledgement of allocation of earnings 2018. Performance in execution: 1. For common shares, the cash dividend NT$0.0 and cash dividend per share NT$0.0 For preferred shares, the cash dividend NT$12,000,000 and dividend per share NT$0.6. 2. The target (base) date for ex-dividend was July 22, 2019 and the dividend was to be paid on August 15,2019.
6	Approval with a pass of amendment to the Company's “Articles of Incorporation” Performance in execution: For the present issue, the alteration was officially completed with the Ministry of Economic Affairs on June 21,2019.

(XII) In the most recent year and as of the publication date of the Annual Report, The main content of different opinions posed by the directors to the Key Resolutions in the Board of Directors meeting, as backed with written records or declaration in writing: Nil
(XIII) In the most recent year and as of the publication date of the Annual Report, the summary on resignation and discharge of people linked up with the Financial Statements (including the Chairman, President, Accounting Head and Internal Audit Head)

Summary on Resignation and Discharge of People Concerned

				April 14,2020 Causes of severance
Position Title	Name	Date to the post	Date of resignation	Causes of severance
Nil

Note: The Company's relevant personnel refer to the Chairman, President, accounting head, treasurer, internal audit head, and research and development head.

V. Information on Certified Public Accountant fees

Where payment to certified public accountants, office of the certified public accountants and non-audit fees accounts for over one-fourth, the amounts of audit fees and non-audit fees and the contents of non-audit services shall be expressly disclosed:

Scale of certified public accountant fees related information

Name of CPA Firm	Name of CPA Firm	Name of CPA	Name of CPA	Name of CPA	Duration covered in the audit	Duration covered in the audit	Duration covered in the audit
Crowe Horwath International		Ying Chia Hsiao	Wu Chang Wang		Jan. 1, 2019~Dec. 31, 2019
				Expressed in Thousands of New Taiwan Dollars
Amount scale		Contents of fees		Audit fees		Non-audit fees	Total
1	Below$2,000,000
2	$2,000,000(inclusive)`～`$4,000,000			$2,950,000		$120,000	$3,070,000
3	$4,000,000(inclusive)`～`$6,000,000
4	$6,000,000(inclusive)`～`$8,000,000
5	$8,000,000(inclusive)`～`$10,000,000
6	Above$10,000,000

Expressed in Thousands of New Taiwan Dollars

==> picture [483 x 214] intentionally omitted <==

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

Non-audit fees
Period
Name of
Name of covered
CPA Audit fees Remarks
CPA Others within CPA
Firm
(Note 2) [Subtotal ] audit
Crowe Ying Chia 2,950,000 0 0 0 120,000 120,000 Jan. 1, 2019 External investment
Horwath Hsiao, ~ Dec. 31, financial status
Internati Wu Chang 2019 statement form
onal Wang verification fee of
NT$100,000,
employee salary
information checklist
NT$20,000
registration Commercial
System design Industrial and
Human resources
----- End of picture text -----

Note 1: In the event that the Company changed the certified public accountant or CPA firm during the current year, please enumerate the audit period separately, explain the reason for the replacement in the remarks box, and disclose the audit and non-audit fees paid in sequence.

Note 2: Non-audit fee should be enumerated separately according to service items. In case of "other" non-audit fee reaches 25% of the total amount of non-audit fee, the content of the services should be enumerated in the remarks box.

Where the audit fee paid for the replacement of the CPA firm in the year of replacement is less than that paid in the preceding year, the amount and reason of the audit fee before and after the replacement shall be both disclosed: N/A.
Where the audit fee decreased by over 15% from that paid in the preceding year, the amount, ratio and reason of the decrease: N/A.

VI. Information of a change (replacement) in the Certified Public Accountants (CPAs): Nil
VII. The Company’s Chairman, President, managers in charge of financial affairs and accounting who have served with the CPA firm or its affiliates over the past one year: Nil
VIII. The fact that in the most recent year and as of the publication date of the Annual Report, transfer of shares, pledge or change in equity held by the directors, managers and major shareholders holding over 10% of the aggregate total:

(I) Changes in common share equity

Status of change in equity held by the directors, managers and major shareholders (Common shares)

Title	Name	Name	Year 2019	Year 2019	As of April 14,2020	As of April 14,2020
			Increase (decrease) in shares held	Increase (decrease) in sharespledged	Increase (decrease) in shares held	Increase (decrease) in sharespledged
Chairman	Pin Cheng Yang (Date to employment: 4/15/2018)	Representative of Jing Kwan Investment Co., Ltd.	0	0	0	0
Director	Chen Ching Ting (Date to employment: 6/25/2014)	Representative of Lai Fu Investment Co., Ltd.	0	0	0	0
Director	Chia Hsiung Tseng (Date to employment: 4/15/2018)
Director	Hsi Hui Huang (Date to employment: 6/25/2014)	Representative of Chung Kwan Investment Co.,Ltd.	0	0	0	0
Independent Director	Kuang Hsun Shih (Date to employment: 6/25/2014)		0	0	0	0
Independent Director	Sung Tung Chen (Date to employment: 6/25/2014)		0	0	0	0
Independent Director	Wen Tzong Chen (Date to employment: 6/25/2014)		0	0	0	0
President	Chia Hsiung Tseng Date to employment: 4/15/2018)		0	0	0	0
Senior Vice President	Hsi Hui Huang (Date to employment: 4/16/2003)		0	0	0	0
Senior Vice President	Chen Ming Chou (Date to employment: 3/1/2011)		0	0	0	0
Vice President	Jen Chieh Liang (Date to employment: 3/1/2011)		0	0	0	0
Vice President	Fu Hua Tsao(Date to employment: 2/1/2017)		0	0	0	0
Vice President	Wen Hui Lin(Date to employment: 2/1/2019)		0	0	0	0
Executive of Finance Dept.	Ching Fu Chen (Date to employment: 1/1/2009)		0	0	0	0
Executive of Accounting Dept.	Ling Chu Chen (Date to employment: 1/1/2009)		0	0	0	0

(II) Changes in equity of preferred shares

Status of change in equity held by the directors, managers and major shareholders (Preferred shares)

Title	Name	Name	Year 2019	Year 2019	As of April 14,2020	As of April 14,2020
			Increase (decrease) in shares held	Increase (decrease) in sharespledged	Increase (decrease) in shares held	Increase (decrease) in sharespledged
Chairman	Pin Cheng Yang (Date to employment: 4/15/2018)	Representative of Jing Kwan Investment Co., Ltd.	0	0	0	0
Director	Chen Ching Ting (Date to employment: 6/25/2014)	Representative of Lai Fu Investment Co., Ltd.	0	0	0	0
Director	Chia Hsiung Tseng (Date to employment: 4/15/2018)
Director	Hsi Hui Huang (Date to employment: 6/25/2014)	Representative of Chung Kwan Investment Co., Ltd.	0	0	0	0
Independent Director	Kuang Hsun Shih (Date to employment: 6/25/2014)		0	0	0	0
Independent Director	Sung Tung Chen (Date to employment: 6/25/2014)		0	0	0	0
Independent Director	Wen Tzong Chen (Date to employment: 6/25/2014)		0	0	0	0
President	Chia Hsiung Tseng Date to employment: 4/15/2018)		0	0	0	0
Senior Vice President	Hsi Hui Huang (Date to employment: 4/16/2003)		0	0	0	0
Senior Vice President	Chen Ming Chou (Date to employment: 3/1/2011)		0	0	0	0
Vice President	Wen Hui Lin(Date to employment: 2/1/2019)		0	0	0	0
Vice President	Jen Chieh Liang (Date to employment: 3/1/2011)		0	0	0	0
Vice President	Fu Hua Tsao(Date to employment: 2/1/2017)		0	0	0	0
Vice President	Wen Hui Lin(Date to employment: 2/1/2019)		0	0	0	0
Executive of Finance Dept.	Ching Fu Chen (Date to employment: 1/1/2009)		0	0	0	0
Executive of Accounting Dept.	Ling Chu Chen (Date to employment: 1/1/2009)		0	0	0	0

(III) The information which should be disclosed where the counterparts of share transfer or pledge in equity: Nil

IX. Information of top shareholders ranking among the top ten, as related parties, spouses, blood relatives within the second degree of kinship to each other:

each other:	each other:	each other:
Name (Note 1)			Shares held by principal			Shares held by Spouse & Minor				Total shares held by Nominee Arrangement			Names and Relations of Top 10 Major Shareholders who are Related Party or Spousal Relationship or are within the Second Degree of Kinship (Note 3)			Remarks
			Number of Shares		Shareholding ratio	Number of Shares		Shareholding ratio		Number of Shares	Shareholding ratio		Title	Relation
KGI Securities Co., Ltd. Representative: Tao Yi Hsu			86,888,690		9.38%	0		0		0	0		`－`	`－`
China Life Insurance Co., Ltd. Representative: Yu LingKuo			65,386,000		7.06%	0		0		0	0		`－`	`－`
Fubon Life Insurance Co., Ltd. Representative: MingHsingTsai			56,147,000		6.06%	0		0		0	0		`－`	`－`
Chung Kwan Investment Co., Ltd. Representative: Che ChengYeh			28,262,722		3.05%	0		0		0	0		`－`	`－`
Jing Kwan Investment Co., Ltd. Representative: ChingLungTseng			20,280,000		2.19%	0		0		0	0		`－`	`－`
Norwegian Central Bank investment account commissioned byCitibank Taiwan			18,097,000		1.95%	0		0		0	0		`－`	`－`
Fund Investment Account for Advanced Starlight Advanced Consolidated International Stock Index commissioned byChase Escrow			14,812,283		1.60%	0		0		0	0		`－`	`－`
Fund Account for Vanguard's Emerging Markets Stock Index commissioned by			11,820,394		1.28%	0		0		0	0		`－`	`－`
Evaluation Fund Special Account for Custody Dimension Emerging Markets commissioned by Citibank Taiwan			10,293,000		1.11%	0		0		0	0		`－`	`－`
Hsing Wen Investment Co., Ltd. Representative: ChingLungTseng			9,961,000 0		1.07%	0		0		0	0		`－`	`－`
	Note 1: The top ten shareholders shall be enumerated in full. In case of a juristic person shareholder, the name of the juristic person shareholder and the name of its representative should be respectively enumerated. Note 2: Calculation of the shareholding ratio refers to the shareholding ratio counted for the own name, spouse, minor children and name(s) of others. Note 3: The shareholders to be enumerated above include juristic person (s), natural persons (individuals) and should be disclosed of the relationship among them based on the Regulations Governing the Preparation of Financial Reports by Securities Issuers. X. The number of shares held by the Company, the Company’s directors, managers and the businesses under control by the Company either directly or indirectly to the same re-investment business and consolidated shareholding ratio are combined and calculated: April 14,2020/expressed in Thousand Shares;% Reinvested companies (Note) Investment by this Company Investment by directors, supervisor, manager and directly or indirectly controlled company Syndicated investment Number of Shares Shareholding ratio(%) Number of Shares Shareholding ratio(%) Number of Shares Shareholding ratio(%) GPPC Chemical Corporation 54,200 100 0 0 54,200 100 GPPC Investment Corp. 22,032 81.60 4,968 18.4 27,000 100 GPPC Hospitality And Leisure Inc. 4,000 100 0 0 4,000 100 GPPC Development Co.,Ltd. 5,000 38.46 3,000 23.08 8,000 61.54 Videoland Inc. 71,093 62.29 0 0 71,093 62.29 KK Enterprise Co.,Ltd. 9,918 15.73 21,307 33.79 31,225 49.52 Goldenpacific Equities Ltd. 75 100 0 0 75 100 Land & Sea Capital Corp. 86,319 100 0 0 86,319 100
	Reinvested companies (Note)	Investment by this Company					Investment by directors, supervisor, manager and directly or indirectly controlled company					Syndicated investment
		Number of Shares		Shareholding ratio(%)			Number of Shares		Shareholding ratio(%)			Number of Shares			Shareholding ratio(%)
	GPPC Chemical Corporation	54,200		100			0		0			54,200			100
	GPPC Investment Corp.	22,032		81.60			4,968		18.4			27,000			100
	GPPC Hospitality And Leisure Inc.	4,000		100			0		0			4,000			100
	GPPC Development Co.,Ltd.	5,000		38.46			3,000		23.08			8,000			61.54
	Videoland Inc.	71,093		62.29			0		0			71,093			62.29
	KK Enterprise Co.,Ltd.	9,918		15.73			21,307		33.79			31,225			49.52
	Goldenpacific Equities Ltd.	75		100			0		0			75			100
	Land & Sea Capital Corp.	86,319		100			0		0			86,319			100

Note: The Company’s long-term investment accounted for using equity method.

Four. Facts of Capital Raising

I. Capital and Shares

(I) Source of Share Capital

Expressed in number of shares, New Taiwan Dollars

Month/Year	Issue price	Authorized capital	Authorized capital	Paid-in capital	Paid-in capital	Remarks	Remarks	Remarks
		Number of shares (Share)	Amount (Dollar)	Number of shares (Share)	Amount (Dollar)	Source of Capital	Paid by property other than cash	Other
	(Dollar)

Sept. 1973 ∫ Aug. 1996	10 ∫ 10	18,000,000 ∫ 603,840,309	180,000,000 ∫ 6,038,403,090	4,500,000 ∫ 603,840,309	45,000,000 ∫ 6,038,403,090	Initial founding capital NT$180,000,000 Capital increase through cash injection NT$940,000,000 Capital decrease 1,007,771,220 shares Capital increase converted with earnings 5,926,174,310 shares	Nil	`－`
Sept. 1997	10	621,955,519	6,219,555,190	621,955,519	6,219,555,190	Capital increase converted with earnings 181,152,100 shares	Nil	No. (1997)-tai-tsai-cheng (I) 52377
Aug. 1998	10	634,394,629	6,343,946,290	634,394,629	6,343,946,290	Capital increase converted with earnings 124,391,100 shares	Nil	July 8, 1998 No. (1998)-tai-tsai-cheng (I)59018
Aug. 2000	10	647,082,522	6,470,825,220	647,082,522	6,470,825,220	Capital increase converted with earnings 126,878,930 shares	Nil	July 7, 2000 No. (2000)-tai-tsai-cheng (I)58945
Aug. 2001	10	659,824,173	6,598,241,730	659,824,173	6,598,241,730	Capital increase converted with earnings 127,416,510 shares	Nil	July 10, 2001 No. (2001)-tai-tsai-cheng (I)144527
Aug. 2002	10	1,000,000,000	10,000,000,000	659,824,173	6,598,241,730	`－`	Nil	Aug. 6, 2002 No. Jing-Shou-Shang-Zi 09101319150
Oct. 2007	10	1,000,000,000	10,000,000,000	660,974,964	6,609.749,640	Corporate bond conversion 1,150,791 shares	Nil	Oct. 29, 2007 No. Jing-Shou-Shang-Zi 09601265240
May 2008	10	1,000,000,000	10,000,000,000	732,689,057	7,326,890,570	Corporate bond conversion 71,714,093 shares	Nil	May 7, 2008 No. Jing-Shou-Shang-Zi 09701106620
Sept. 2008	10	1,000,000,000	10,000,000,000	733,482,707	7,334,827,070	Corporate bond conversion 793,650 shares	Nil	Sept. 17, 2008 No. Jing-Shou-Shang-Zi 09701238390
Sept. 2009	10	1,000,000,000	10,000,000,000	813,828,844	8,138,288,440	Corporate bond conversion 80,346,137 shares	Nil	Sept. 28, 2009 No. Jing-Shou-Shang-Zi 09801223320
Dec. 2009	10	1,000,000,000	10,000,000,000	880,670,078	8,806,700,780	Corporate bond conversion 66,841,234 shares	Nil	Dec. 17, 2009 No. Jing-Shou-Shang-Zi 09801287180
Jan. 2010	10	1,000,000,000	10,000,000,000	926,620,328	9,266,203,280	Corporate bond conversion 45,950,250 shares	Nil	Jan. 28, 2010 No. Jing-Shou-Shang-Zi 09901020660

	Expressed in Shares	Expressed in Shares	Expressed in Shares	Expressed in Shares	Expressed in Shares	Expressed in Shares
Kind of Share	Authorized capital					Remarks
	Outstandingshares			Unissued shares	Total
	Listed	Not listed	Total
Common shares	906,620,328		906,620,328		906,620,328	-
Preferred shares	20,000,000	`－`	20,000,000	`－`	20,000,000	-

In case of offering of negotiable securities through summarized declaration system as approved, the Company should disclose information of the approved amount, negotiable securities anticipated to be issued and actually issued: Nil.

(II) Structure of shareholders

1. Common shares

1. Common shares	1. Common shares
		April 14,2020
Structure of Shareholder Quantity	Government agencies	Financial institutions	Other juristic persons	Foreign institutions and foreigners	Individuals	Total
Number of shareholders	1	5	168	231	80,554	80,959
Shares held	20,000	130,126,573	166,876,454	228,716,323	380,880,978	906,620,328
Shareholdingratio	0.00%	14.35%	18.41%	25.23%	42.01%	100.00%

2. Preferred shares

2. Preferred shares	2. Preferred shares
		April 14,2020
Structure of Shareholder Quantity	Government agencies	Financial institutions	Other juristic persons	Individuals	Foreign institutions and foreigners	Total
Number of shareholders	0	1	12	3	1,381	1,397
Shares held	0	482,000	5,173,000	66,334	14,278,666	20,000,000
Shareholdingratio	0.00%	2.41%	25.87%	0.33%	71.39%	100.00%

(III) Facts of disperse of shareholding

Facts of disperse of shareholding

1. Common shares

1. Common shares	1. Common shares
		NT$10par value,April 14,2020
Shareholding grading	Number of shareholders	Number of shares held	Shareholding ratio %
1-999	41,958	5,474,273	0.60%
1,000-5,000	26,785	61,450,263	6.78%
5,001-10,000	5,958	48,660,852	5.37%
10,001-15,000	1,657	21,210,057	2.34%
15,001-20,000	1,425	26,927,884	2.97%
20,001-30,000	1,086	28,475,866	3.14%
30,001-40,000	523	19,161,900	2.11%
40,001-50,000	355	16,850,300	1.86%
50,001-100,000	648	48,151,592	5.31%
100,001-200,000	291	42,582,266	4.70%
200,001-400,000	124	35,576,561	3.92%
400,001-600,000	47	23,445,981	2.59%
600,001-800,000	20	14,235,000	1.57%
800,001-1,000,000	14	12,474,713	1.38%
Above 1,000,001	68	501,942,820	55.36%
Total	80,959	906,620,328	100.00%

2. Preferred shares

NT$10 par value, April 14, 2020

Shareholding grading	Number of shareholders	Number of shares held	Shareholding ratio %
1-999	11	3,750	0.02%
1,000-5,000	1,138	2,102,917	10.51%
5,001-10,000	100	803,333	4.02%
10,001-15,000	47	614,000	3.07%
15,001-20,000	18	334,000	1.67%
20,001-30,000	23	596,000	2.98%
30,001-40,000	11	378,000	1.89%
40,001-50,000	8	377,000	1.89%
50,001-100,000	19	1,458,000	7.29%
100,001-200,000	6	881,000	4.41%
200,001-400,000	4	983,000	4.92%
400,001-600,000	5	2,396,000	11.98%
600,001-800,000	2	1,320,000	6.60%
800,001-1,000,000	2	1,887,000	9.44%
Above 1,000,001	3	5,866,000	29.33%
Total	1,397	20,000,000	100.00%

(IV) Names of key shareholders: The shareholders holding over 5% in shareholding ratio and ranking among the top ten should be enumerated here.

(Common shares) April 14, 2020

No.	Name	Number of shares held	Shareholding ratio%
1	KGI Securities Co.,Ltd.	86,888,690	9.58%
2	China Life InsuranceCo.,Ltd.	65,386,000	7.21%
3	Fubon Life InsuranceCo.,Ltd.	56,147,000	6.19%
4	ChungKwan Investment Co.,Ltd.	28,262,722	3.12%
5	JingKwan InvestmentCo.,Ltd.	20,280,000	2.24%
6	Norwegian Central Bank investment account commissioned by Citibank Taiwan	18,097,000	2.00%
7	Fund Investment Account for Advanced Starlight Advanced Consolidated International Stock Index commissioned by Chase Escrow	14,812,283	1.63%
8	Fund Account for Vanguard's Emerging Markets Stock Index commissioned by	11,820,394	1.30%
9	Evaluation Fund Special Account for Custody Dimension EmergingMarkets commissioned byCitibank Taiwan	10,293,000	1.14%
10	Hsing Wen InvestmentCo.,Ltd.	9,961,000	1.10%

(Preferred shares) April 14, 2020

No.	Name	Number of shares held	Shareholding ratio %
1	Jui Hui Lin	2,505,000	12.53%
2	GPPC ChemicalCorporation	1,776,000	8.88%
3	Taishin Securities Co.,Ltd	1,585,000	7.93%
4	Chuang ChuanChiu	948,000	4.74%
5	HungkuangUniversityof Science and Technology	939,000	4.70%
6	Chih HsinChiu	670,000	3.35%
7	Ching Chuan Huang	650,000	3.25%
8	Chien Mei Hung	540,000	2.70%
9	Shan LungLin	539,000	2.70%
10	The Shanghai Commercial & Savings Bank,Ltd.	482,000	2.41%

(V) Information of market price per share, net value, earnings, and dividends

Expressed in New Taiwan Dollars/Shares

Items	Year	Year	2018	2019
Market price per share ($) (Note 1)	Highest		35.15	25.35
	Lowest		19.45	17.60
	Average		28.15	20.72
Net Value per share ($) (Note 2)	Before distribution		$24.59	$26.36
	After distribution		$24.58	*
Earnings per share	Weighted average shares (thousand shares)		905,338,000 shares	906,373,000 shares
	Earningsper share(Note 3)		$3.26	$2.27
Dividends per share	Cash dividends		0	0
	Issuance of bonus shares	0	0	0
		0	0	0
	Retained Dividends(Note 4)		0	0
Analysis of Return on Investment	PE ratio(Note 5)		8.63	9.13
	Dividend-Price ratio(Note 6)		0	0
	Cash dividendsyield(Note 7)		0	0

＊ In case of share allocation with earnings or capital reserve, the Company should disclose information of the market prices adjusted retrospectively at the time of allocation and the cash dividend.
Note 1: Should enumerate the highest and lowest market prices of common shares in respective years and should count the average market prices based on the value and volume of successful transactions of the respective years.
Note 2: Please base the number of outstanding issued shares at end of the year and enumerate based on the allocation as resolved in the shareholders’ meeting convened in the ensuing year.
Note 3: In case of issuance of bonus shares that calls for retrospective adjustment, the Company should enumerate both pre-adjustment and post-adjustment earnings per share (EPS).
Note 4: Where the equity securities issued in the current year are accrued in the conditions that the outstanding dividend may be accumulated till the year in which the Company makes a profit, the outstanding dividend accumulated till the current year should be respectively disclosed.
Note 5: P/E ratio ＝ Average closing price per share in the current year ／ earnings per share (EPS) before retrospective adjustment
Note 7: Dividend-Price (P/D) ratio ＝ Average closing price per share in the current year ／ Cash dividend per share.
Note 7: Cash dividend yield ＝ Cash dividend per share ／ Average closing price per share in the current year.

(VI) The Company’s share dividend policy and fact of implementation of such policy
Share dividend policy defined in the Company’s Articles of Incorporation:
Article 29: The Company shall set aside 1% of the profit earned by the Company in a year as remuneration to employees and a sum within 2% maximum of the profit earned by the Company in a year as remuneration to directors based on the profit status of the year. Where the Company remains in accumulated loss, nevertheless, such loss shall be made up beforehand.

The term “the profit status of the year” as set forth herein denotes the profit before tax in that year after deduction the sum for allocation of remuneration to employees and remuneration to directors.

From the earnings of the Company in a year as shown through the annual account settlement, after the sum to pay tax and make up previous loss, if any, is set aside, a sum 10% out of the balance shall be set aside as legal reserve. The balance of the Company's earnings after annual final account settlement, after payment of tax, making up loss, setting aside 10% legal reserve, setting aside or reversal of special reserve shall be allocable earnings which, along with the unappropriated retained earnings of the preceding year, shall be the accumulated unappropriated retained earnings wherewith, dividend for Year 1984 Grand Pacific Preferred Shares at 6% per annum shall be set aside. In the event that the annual dividend is not allocated in full, the shortage shall be made with the allocable earnings of the ensuing year preferentially. With the balance of the unappropriated retained earnings, the Board of Directors shall propose the percentages of allocation based on laws and ordinances concerned, dividend policies and status of working capital. Where the dividend is allocated by means of issuance of new shares, it shall call for consent from the shareholders’ meeting beforehand. When the dividend is allocated in cash, it calls for approval under a decision to be resolved in the Board of Directors.

In accordance with Paragraph 5, Article 240 of the Company Act, the Board of Directors is authorized with plenipotentiary power to resolve a decision through one half majority vote cast by participating directors who constitute two-thirds or more of the total directorship seat to allocate the dividend, bonus or part of legal reserve and capital reserve either in whole or in part under Paragraph 1, Article 241 of the Company Act in cash and to report to the shareholders’ meeting.

The Company currently lies amidst the highly changeable industrial environment is changeable. The life cycle of the Company is amidst stable growth. The Company shall firmly dominate the economic environment to assure sustainable operation. Given the Company's long-term financial planning, future capital needs with efforts to protect the interests of shareholders, the Company shall allocate annual cash dividends are not less than 10% of the total cash and stock dividends of the current year (excluding dividend of Year 1984 Grand Pacific Preferred Shares at 6% per annum).

Performance in execution:

The Company's allocation of earnings 2019 (The 2019 earnings distribution proposal is submitted for ratification) as duly resolved in the board of directors on April 28, 2020 is as enumerated below:

(1) The Company’s net income after tax for the year of 2019 was $2,070,125,401. After accounting for the accumulative investment gains of NT$45,343,950 with the disposal of equity instrument investments with fair value through other comprehensive incomes and less the remeasurement of confirmed benefit programs at NT$15,783,410, the unappropriated earnings during the year stood at NT$2,099,685,941. After the

allocation of NT$209,968,594 to the statutory surplus reserve, the distributable earnings during the year were NT$1,889,717,347. Adding this to the unappropriated retained earnings at the beginning of the term of NT$9,164,901,598 derived the distributable earnings in accumulation at NT$11,054,618,945.

  - (2) Pursuant to Article 29 of the Articles of Incorporation, after preferred dividends for the year of 2019 amounted to $12,000,000 were distributed first, the distributable earnings are $11,042,618,945; for common shares, it is proposed that no cash dividend be allocated.  After the allocation, balance of the retained earnings came to $11,042,618,945.

Anticipated significant changes in the dividend policy: Nil.
(VII) The impact of the issuance of bonus shares proposed in the current shareholders’ meeting upon the Company’s business performance and earnings per share (EPS): N/A

(VIII) Compensations to employees, remuneration to directors:

The percentage and scope of remunerations payable to employees and directors as set forth under the Articles of Incorporation: Please refer to Page ___ (VI)~1, the dividend policy set forth under the Articles of Incorporation.
In terms of the grounds to estimate the remunerations payable to employees and directors in the current term, the accounting handling manner for the discrepancy between number of shares counted for remuneration to employees through allocation of stocks and the amount of substantial allocation:
(1) The grounds to estimate the remunerations payable to employees and directors : To be estimated based on the business performance of every quarter.
(2) The grounds to estimate the remunerations payable to employees with stocks: Not applicable, as no stocks are to be allocated.
(3) The accounting handling manner for the discrepancy between number of shares counted for remuneration to employees through allocation of stocks and the amount of substantial allocation: In case of any discrepancy between the amount actually allocated as resolved in the shareholders’ meeting and the estimation, the discrepancy is deemed as a change in the accounting estimate to be recognized as profit and/or loss in the year when it is resolved by the shareholders’ meeting.
Information of bonus to employees as resolved in the board of directors:
(1) Allocation as proposed by the Company's board of directors on 3/19/2020:
- Remuneration to employees – Allocation in cash in an amount of NT$24,862,069.
- Remuneration to directors – Allocation in cash in an amount of NT$49,724,137.

In case of any discrepancy from the amount estimated in the year of recognition, the difference, cause and countermeasures should be expressly enumerated: Not applicable, as no discrepancy existent.

(2) The percentage of the stock bonus proposed to be allocated to employees to the aggregate total of the net profit after tax this term and bonus to employees: Not

applicable.

(3) Earnings per share (EPS) after consideration of remuneration to employees and directors: After such consideration, the basic earnings per share (EPS) would be NT$2.27.
The discrepancy between the actual allocation of bonus to employees and remuneration to directors and supervisors in the preceding year (including number, amount of allocation, stock price) and the recognized bonus to employees and remuneration to directors and supervisors, the causes and countermeasures:

The Company's allocation of earnings 2018 was duly resolved in the annual meeting of shareholders convened on June 14, 2019. The facts of allocation as resolved in the board of directors are as enumerated below:

(1) Allocation of remuneration to employees: NT$37,477,905.
(2) Allocation of remuneration to directors NT$74,955,811.

No discrepancy between the aforementioned proposed allocation above and the original estimate.

(IX) Facts of the Company’s stocks repurchased by the Company: Nil

II. Issuance of corporate bonds: The Company does not issue corporate bonds at the moment.

III. Issuance of preferred shares:

Expressed in New Taiwan Dollars

III. Issuance of preferred shares:	III. Issuance of preferred shares:	III. Issuance of preferred shares:	III. Issuance of preferred shares:	Expressed in New Taiwan Dollars
Date of issuance(handling) Items				August 1984
Denomination				10
Price of issue				10
Number of shares				20,000,000shares
Total amount				$200,000,000
About rights & obligations	Allocation of dividend and bonus			With earnings shown through annual final account settlement, the sum for preferred shares dividend of 6% shall be first withheld. All other terms are same as common shares.
	Allocation of residual properties			Preferential allocation of the Company's residualproperties
	Exercise ofvoting powers			Same as common shares
	Others			─
Outstanding issued preferred shares		Number retrieved or converted		─
		Balance not retrieved or converted		─
		Clauses for retrieval or conversion		─
Market price per share		2017	Highest	34.50
			Lowest	24.50
			Average	28.09
		2018	Highest	36.90
			Lowest	30.55
			Average	34.49
		2019	Highest	37.30
			Lowest	32.20
			Average	34.52
	In the year as of March 31, 2020		Highest	34.45
			Lowest	28.00
			Average	32.17
Other rights affiliated	Amount converted or subscribed as of the publication date of the Annual Report			0
	Regulations Governing Issuance, Conversion orSubscription			─
Impact of issuance conditions upon shareholders of preferred shares, potential dilution of equity and impact upon shareholders’ equity				Nil

IV. Issuance of overseas deposit receipt certificates (DRC): Nil

V. Issuance of employee stock option certificates: Nil

VI. New shares to employees with restricted rights: Nil

VII. Merger/acquisition (M&A) or inward transfer of other firms’ new shares: Nil

VIII. Implementation of capital utilization plans: Nil

Five. Business Performance in Brief

I. Contents of business operation

(I) Business Scope
Primary Business Content:
- (1) C801020 Petrochemical Manufacturing
- (2) C801100 Synthetic Resin & Plastic Manufacturing
- (3) C802990 Other Chemical Products Manufacturing
- (4) F401010 International Trade
- (5) D101050 Cogeneration
- (6) D401010 Heat Energy Supplying
- (7) G801010 Warehousing and Storage
- (8) H701020 Industrial Factory Buildings Lease Construction and Development
- (9) F501060 Restaurants
- (10) ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.
- (11) J506021 Satellite Broadcasting Television Program Supplier
- (12) J503020 Television Production
- (13) J503030 Broadcasting and Television Program Distribution
- (14) J401010 Motion Picture Production
- (15) J402010 Motion Picture Distribution
- (16) J503010 Broadcasting Production
- (17) J503040 Broadcasting and Television Commercial
- (18) J503050 Video Program Distribution
- (19) F401021 Restrained Telecom Radio Frequency Equipments and Materials Import
- (20) E701020 Channel KU and C of Satellite TV Equipments and Materials Construction
- (21) E701030 Restrained Telecom Radio Frequency Equipments and Materials Construction
- (22) F401010 International Trade
- (23) I103060 Management Consulting Services
- (24) I401010 General Advertising Services
- (25) JB01010 Exhibition Services
- (26) J602010 Agents and Managers for Performing Arts, Entertainers, and Models
- (27) J803020 Athletics Racing
Operating proportion of each product:
- (1) GPPC Group

Expressed in Thousands of New Taiwan Dollars; %


Major Product	2019 Operating Revenues	Operating Proportion
Petrochemical operating revenues (SM)	8,481,436	41.44%
Plastic operating revenues (ABS, HIPS)	6,108,604	29.85%
Advertising, video and channel	1,910,627	9.33%


operating revenue
Package materials operating revenues	1,574,696	7.69%
Nylon operating revenues	1,539,118	7.52%
Others (Note)	853,748	4.17%
Total	20,468,229	100%

Note: Others include operating revenues from steam, electricity, copyrights and broadcast; as they account for less than 5% of the business, they are presented in an aggregated number.
(2) The Company (individual financial report)

	Expressed in Thousands of New Taiwan Dollars; %	Expressed in Thousands of New Taiwan Dollars; %
Major Product	2019 Operating Revenues	Operating Proportion
SM	9,767,995	60.19%
ABS	4,309,782	26.56%
H2	146,711	0.90%
Steam and electricity	465,479	2.87%
Nylon	1,539,118	9.48%
Total	16,229,085	100%

GPPC Group's current products (services):
(1) Production and sales of styrene monomer (SM), its related derivatives and by-products (toluene, hydrogen, etc.).
(2) Production and sales of acrylonitrile-butadiene-styrene copolymer resin (abbreviated as ABS).
(3) Production and sales of hydrogen (H2).
(4) Steam and Electricity
(5) Nylon (PA).
(6)

(6)

Business Item	Business Content	Primary Sales Target	Progress
Advertising Business	Sell satellite channel advertising time operated by Videoland to advertisers or advertising agencies.	Advertising agency advertisers or advertising agents	The current revenue is among the best of all cable TV channel operators.
Copyright licensing or sublicensing	Use the film and television resources of Videoland to produce various types of	Domestic and foreign TV stations Platform channel	Ongoing licensing


	programs, such as: sports, drama and entertainment, and act as an agent or purchase copyright of other company's programs to license, or sublicense to others for broadcasting or distribution.	dealer Copyright agency Agency Home audio and video product distributor

New products (services) in plans for development
- (1) Expand market of 60P basic powder and SAN commercial-grade products. In response to the development of smart-car level battery slot, the Company is optimizing products used in current uninterruptible power systems and battery slot.
- (2) Develop large particle latex using PBL rubber agglomeration process; optimize ABS quality; develop electroplating, tube and flame resistant grade ABS; and sell these products to domestic and foreign customers.
- (3) Expand the nylon industrial yarn market and optimize the quality, develop high-temperature nylon and composite engineering plastic products: such as heat-resistant super-tough, medium-tough, high temperature, soft, biomass, and fiberglass blended composite plastic.
- (4) Aggressively integrate resources and establish a platform. Repackage each channel and open new opportunities through the concept of brand marketing.
- (5) Study the social and ecological changes associated with the development of new digital technology, so as to deepen brand characteristics and increase interaction opportunities to build audience trust.
- (6) Strengthen parallel and vertical strategic alliances and reinvestment businesses.
- (7) Continue to develop the domestic acceptance of Mainland Chinese programs, since there is close interaction between both sides of the strait, and actively develop cross-strait media cooperation.
- (8) Aggressively expand alliances and cooperate with new media sources to develop markets with cross-industry alliances.
- (9) Develop entertainment resources, and engage high-value audiences.
- (10) Accumulate mainland experience and prepare to seize opportunities for future markets.
(II) Industry Overview:
Industry Status and Development

The upstream of the petrochemical industry is crude oil, followed by natural gas and coal. Because crude oil has the attributes of energy, finance and geopolitics, its price volatility is affected by multiple factors. When the price was high in 2008, it rose to more than US$140 per barrel. Since then there were several fluctuations, and in the beginning of 2016, it fell to US$30. Although there were a few more fluctuations since 2016, the price is basically showing a gradual increase. Overall, it has returned to a certain level of fixed price by last year. With the slow recovery of the global economy, the petrochemical industry has been able to maintain certain profits in recent years. The spread of the epidemic in the beginning of the year has caused a downturn of the economy, and the

future global economic cycle is expected to enter a more difficult adjustment year.

Coal-derived petrochemical raw materials were vigorously promoted in mainland China during the period of high oil prices, but their development was constrained by factors such as oil price reversion and water resources. Natural gas is another upstream source of raw materials for petrochemical. With the rise and maturity of shale oil and gas resources in the United States, it is one of the few places, other than China, where petrochemical production capacity has increased in recent years.

The company's main products are styrene, ABS and Nylon 66 plastics. The range of their downstream applications covers major petrochemical industries, such as plastics, rubber and fibers. Their further downstream range covers an even broader scope, including electronic appliances, home appliances, automobiles, building materials, textiles and packaging and various other important industries. These all play an important role in supporting economic development.

Styrene is a bulk petrochemical raw material that is widely used. It is in liquid form at ambient temperatures and is convenient to transport. Therefore, the price difference of styrene around the world, except for the short-term factors in various regions, is mainly affected by transportation conditions and tariffs. The major raw materials of styrene are ethylene and benzene, with the proportion of benzene at about 80%. Ethylene is a gas at ambient temperatures and pressure, and the transportation cost is relatively high. Therefore, the site of styrene plant is usually very close to the supply of ethylene materials. Benzene is liquid at ambient temperatures, and its sources are more diverse. In addition to light oil cracking plants and refineries, there are products of other chemical manufacturing methods, or by-products of the steel industry, which are easier to obtain and transport.

In terms of use, the three major uses of styrene are in polystyrene (PS), expanded polystyrene (EPS), and ABS resin. In addition, there are secondary uses, such as: thermoplastic elastomer (TPE), styrene-butadiene rubber (SBR), styrene butadiene latex (SB Latex), unsaturated polyester (UPS), and others. Styrene derivatives are widely used in industries such as home appliances, electronics, construction, toys, automobiles, and such. Therefore, the rise and fall of the styrene industry is extremely sensitive to the economic cycles.

After years of development, there are currently three domestic styrene manufacturers. In the past three years, the annual production and sales volume has remained at about 2 million tons. In addition to the downstream export that is primarily for self-use, there is still import demand for about 300,000 tons every year.

ABS is a downstream product of styrene. In addition to styrene, two raw materials, acrylonitrile and butadiene, are required. The ABS industry differs from styrene in its diversified product specifications, and that its production must be adjusted according to customer needs. Generally, ABS in Asia is mainly used for home appliances and electronic products. As digital information products continue to evolve, the demand for fire resistance, heat resistance and special flow characteristics has also increased. As the economies of emerging countries grow and the national and individual income levels increase, the development of home appliances, electronics and automobiles will continue to increase the demand for ABS.

There are currently four manufacturers of ABS plastics in Taiwan. In the past three years, the annual production and sales volume has remained at about 1.3 million tons. Unlike styrene, over 80% of ABS is exported. Exporting and competing with markets in various countries around Asia has become the norm for the domestic ABS industry. Since the Mainland China's demand for ABS accounts for more than half of the global total

demand, the mainland market has become a must-have for players in the Red Ocean market, which is also a major target area for domestic ABS export. However, due to the US-China trade war, the sales market is accelerating in its migration to other regions, such as Southeast Asia.

In response to government's high-value development policy, the Company pragmatically invested in the construction of a Nylon 66 plant, which is the first and the only manufacturing plant of such products in Taiwan, and it partially eases the import pressure on domestic demands. Nylon 66 is a heat-resistant engineering plastic. In addition to the traditional textile applications, such as clothing and carpets, the demand for its application in high-end products, such as automotive components and electronic appliances, has developed rapidly in recent years, which has also become one of the largest applications of Nylon 66. With the increase in per capita income, the demand for high-end products is increasing day by day. After the Company put the plant into production, Nylon 66 still maintains an annual import volume of about 60,000 tons, which just shows its growth potential.

Due to the rapid economic development of mainland China in recent years, it has become a major market for petrochemical products. Its domestic production capacity of styrene is close to 10 million tons, and its self-sufficiency rate will be greatly increased in the future. Import demand will also be revised downward year after year from a maximum of 3.5 million tons, due to its own production capacity increasing year on year. Its ABS production capacity is close to 4 million tons, and it still requires imports of 2 million tons. In order to protect its own production market, Mainland China imposes high anti-dumping duties on Nylon 66 on major producing countries, including Taiwan, but regardless, it still requires 280,000-ton imports every year.

According to the analysis made by IHS, the demand for styrene in Northeast Asia is 172.3 million metric tons in 2020, and the nameplate capacity is 186.66 million metric tons. It is expected that the production capacity could increase by 14% this year, but the effective operating rate is estimated at only 82%. As a result, the actual supply is estimated to increase by only 5.3%, and 3.41 million metric tons will still need to be imported to cope with the 2.9% increase in demand in the region. The same analysis estimated that global ABS demand for styrene was about 5.36 million metric tons last year, and for this year, it is expected to increase by 3.6%. At the same time, the apparent demand volume for styrene in Taiwan last year (production volume + import volume-export volume) was 1.97 million metric tons, of which the demand volume for ABS was 734,000 metric tons. It was originally expected that the apparent demand volume for styrene in Taiwan this year would be 2.02 million metric tons, of which the demand volume for ABS would be 755,000 metric tons. It was originally estimated that the demand volume for this year will increase in both styrene and ABS, but because the epidemic disrupts global economic growth, this demand is bound to be revised downwards. Its final volume will depend on the extent of the impact of the epidemic.

Recently, the market for Nylon is gradually expanding. In addition to the mainland market, the economic performance of emerging markets, such as Southeast Asia, India and the Middle East, are gradually receiving more attention. Although the total volume is small, the growth rate is considerable. The company's plastic (ABS and Nylon 66) products are also steadily expanding in these emerging regions to mitigate the risks of excessive market concentration.

In February 1962, the education television experimental station began broadcasting, which started Taiwan's television industry. Previously, there were only four wireless TV stations in Taiwan for commercial television: Taiwan Television, China Television, Chinese Television System and Formosa Television (and a non-commercial television

station--Public Television, a total of five TV stations in Taiwan). However, such an oligopoly market produced undesirable conditions: A. Bad TV reception in remote areas; B. Program contents did not meet demassified audience demand; C. Contents were all composite fusion type; thus, the community common antenna and broadcasting system industry (commonly known as the fourth station) came into being. This development also contributed to the rise of program providers. All the cable TV stations were then competing to gain the audience's attention with demassified audience content.

Videoland Inc. is a member of the channel industry, and the rise of the channel (program distribution) industry is closely related to the announcement of the Cable TV Act (August 11, 1993). In the early days, the program providers delivered copied videos to transmission systems for broadcast. Thus, apart from copyright fees, there was no revenue from advertising. Later, with the sharp drop in the lease cost of satellite channels, the program providers moved to satellite transmission to ensure broadcast quality (around the time in 1995). In addition, they utilized the gap between programs to broadcast advertisements; hence, the program providers became channel providers and commercial time slot providers. Advertising became one of the main sources of revenue for channel operators, and some channel operators only used advertising revenue to sustain their programs.

The Satellite Broadcasting Act was promulgated and implemented in February 1999, which opened up the international space for Taiwan's communication industry, and promoted the sound development of satellite broadcasting.

In July 2012, the digitalization of wireless TV was fully implemented, and the analog signal of wireless TV officially became part of history. Cable TV, in turn, was also digitalized, and now produces and broadcasts high-definition digital program contents.

To cope with the trend of digitalization and internet new media, Videoland Fine channel was launched on Chunghwa Telecom's MOD platform on February 20, 2015.

The digitalization of cable TV was fully implemented in 2018, and the cable analog signal officially became part of history.

The correlation between the upstream, midstream and downstream within the industry

The raw materials for styrene are benzene and ethylene. The source of ethylene is primarily supplied by the CPC Corporation. In recent years, as the production of benzene by the CPC Corporation has decreased year by year, the proportion of benzene imported by the Company has gradually increased. The raw materials for producing ABS, apart from the self-produced styrene, such as butadiene, are also supplied by the CPC Corporation, and Acrylonitrile is supplied by China Petrochemical Development Corporation. The raw materials for Nylon 66, hexamethylenediamine and adipic acid, are not domestically produced, and must be imported from abroad.

The downstream of styrene still requires one or more manufacturing processes to make plastic pellets or rubber, so customers are larger in scale. The downstream of ABS and Nylon 66 is predominantly used in forming or blending business of the industries, hence the customer scale is more diversified.

Upstream		Midstream
Ethylene		Styrene		PS, EPS, ABS, SBR, SBL, TPE, UPR
			ABS Nylon 66

Benzene

Propylene	Acrylonitrile			3C covers, vehicles, pipe and boards, stationery and toys,blending


Butadiene

	Hexamethylenediamine			Automobile, electronic appliances, ties, industrial yarn,kitchenware,blending


	Adipic acid

Videoland Inc. is a cable TV channel operator, which also produces and distributes TV programs. Its industrial structure is as follows:

==> picture [507 x 352] intentionally omitted <==

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

Upstream Midstream Downstream
Advertiser
Videoland Sports
channel
Advertising Agency
Videoland Movies
channel
Production
Videoland Japan
Unit-outsource,
commission channel Distributing
programs Cable television
Videoland
through system operator
Comprehensive
channels
Domestic and foreign Programs channel or platform
film producers channel provider
Copyright Videoland drama
or sold by
Agent channel
the
Videoland Company
Domestic and foreign Channel
entertainment
program provider Program channel
Agent
Videoland fine
channel
Channel Program
provider
----- End of picture text -----

(III) Technology and R&D Overview:
R&D expenses invested in the most recent year, and as of the publication date of the Annual Report

Expressed in Thousands of New Taiwan Dollars; %


Year	R & D expenses	Proportion to revenue %
2019	24,357	0.15%

Technologies or products successfully developed in the most recent year, and as of the publication date of the Annual Report.

publication	date of the Annual Report.

Year	R&D performance
2019	1. Trial production of Nylon 66 industrial yarn composite and heat-resistant super-tough Nylon 66. 2. Technological development of agglomerated PBL large particle latex, completion of trial production and sampling. 3. Development of battery cell for uninterruptible power system, completion of trial production and mass production. 4. Optimization of customer samples of tube and electroplating grade ABS. 5. Development of Nylon 66 plus glass fiber composite, completion of customer trial and certification. 6. Development of, and trial production of, heat-resistant super-tough Nylon 66 composite.

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

Short-term Plan
(1) High-temperature nylon and nylon industrial yarn, nylon 66 composite and heat-resistant super-tough nylon 66 for trial sale, and subsequent equal emphasis on mass production and quality.
(2) Develop large particle latex using PBL rubber agglomeration process; improve and adjust ABS product mix and formula; develop PBL small particle size latex technology; reduce production cost.
(3) Focus on industrial safety and environmental protection, and participate in social welfare activities.
(4) Coordinate with the market positioning of each channel, expand advertising business revenue, and stabilize revenue growth.
(5) Strengthen the symbiotic relationship of system channels to ensure stable income from channel licensing.
(6) Establish the copyright business and expand the niche of program licensing.
(7) Use existing resources to promote projects, integrate marketing, and significantly increase project revenue.
Long-term Plan

(1) Demonstrate the true function and value of an R&D Center by achieving the establishment of high-value independent technology.
(2) Accumulate research and development energy, and vigorously participate in cooperation with government, industry and academia on science and technology projects.
(3) Develop a nylon engineering plastic blending plant to enhance market competitive advantage.
(4) Draw on international strategic alliances, expand overseas channels and then create cooperation opportunities for program business.
(5) Increase cross-strait media industry cooperation, increase the production of, and broadcasting of high-quality Mainland Chinese programs, and develop new markets.
(6) With the arrival of the digital age, future plan shall include entering the web TV market, applying for an IPTV channel license, and expanding brand influence and business revenues.
(7) Expand the revenue streams of new media on the web, broadcast our own programs on the web platform, and increase advertising revenue.

II. Market and production and sales overview:

(I) Market analysis:

1. Sales (provided) regions of major products (services)

1. Sales (provided) regions	of major products (services)

Major Product	Major Market	Distribution Method
Styrene Monomer`（`SM`）`	Domestic	Direct sale
Acrylonitrile - Butadiene-Styrene copolymer resin(ABS)	Domestic, Mainland China, Hong Kong, the United States, South Africa, and Southeast Asia.	Direct sale and distribution
Hydrogen (H2)	Domestic	Direct sale and distribution
Steam and Electricity	Domestic	Direct sale
Nylon 66	Domestic, Mainland China, Hong Kong, the United States, South Africa, Southeast Asia, and India.	Direct sale

Videoland Inc. is a satellite TV business program supplier approved by the competent authority, and its primary commodity revenues are satellite program video and advertising.

The sales targets of the video business are cable TV operators in Taiwan, Penghu, Kinmen and Matsu areas, and other public broadcasters.

The sales targets of the advertising business are juridical persons of all levels and individuals.

Market share, supply and demand status, and growth of future markets:

The company's production capacity of SM and ABS in FY 2020 is 370,000 metric tons and 120,000 metric tons, respectively, accounting for 19% and 6.06% of the total production capacity of Taiwanese producers. Since the upstream expansion of the domestic petrochemical industry has reached saturation under the constraints of existing industrial development policies, and expansion in the midstream and downstream is restricted, in the absence of new production capacity, this market share will only fluctuate slightly.

After decades of development in mainland China, it has become the world’s factory, with its huge workforce, and now is gradually entering the world market. Both its production capacity and market appetite have become its main driving sources. Apart from the expansion of production capacity, driven by the rise of shale gas in the United States, due to the low price of raw materials and market competitiveness, the expansion of the general petrochemical industry and market growth, since the beginning of this century, come mainly from Mainland China. Its infrastructure construction, the rapid growth of the real estate and automotive industries, and the previous policy of selling home appliances to the countryside, all triggered a wave of expansion of styrene products. Because of the significant profitability improvements of the styrene industry in recent years, a new round of production capacity increase plans have been sequentially put into production. Over the next two or three years, the self-sufficiency rate of styrene in Mainland China will gradually increase, and the import volume will shrink year after year, within a certain time frame. Unlike previous plans, many of the new rounds of investment plans incorporate upstream materials, which is helpful in increasing the average operating rate of their styrene industry. However, due to the enormous scale of these plans, the completion schedule of each plan is uncertain.

Although the increase in the supply side may squeeze on the space of existing producers to a certain extent, the continuous progress of Mainland China into the world market will help provide sufficient market appetite. The economic growth rate set by China for 2020 is 6.1%, which is bound to be revised downward under the impact of the epidemic. The increase of its per capita income will continue to stimulate the demand growth of packaging materials for home appliances, electronics, automobiles, as well as e-commerce and thermal insulation. Furthermore, its South-bound economic policy will also push the national demand to gradually move from the basic plastics, such as PE, PVC, etc. to the styrene series, such as PS, ABS, EPS, etc. The growth in demand for high-end engineering plastics, such as nylon 66, can also be expected.

Certainly, with the increase of per capita income in various markets, the requirements for increased product quality have gradually grown out of the initial stages of long-lasting and easy-to-use. Health and environmental protection have become universal requirements. In summary, high strength, low-volatility and low-residual monomer, bright coloration, fast and excellent processability are some, if not all, of the development trends of styrene and nylon 66 series products. The company's historical research and development has focused on these trends with constant upgrades and improvements.

In June 2017, the Ministry of Commerce of Mainland China announced an anti-dumping investigation on styrene sold to the mainland by Taiwan, South Korea and the United States. The final result was released in June 2018. The final adjudicated tariff for Taiwan was 3.8%-4.2%; and 6.2%-7.5% and 13.7%-55.7% for Korea and the United States, respectively. Although this measure does not affect the supply and demand at the global level, it has reshaped the direction of trade flows in various regions and the price gaps in corresponding regions.

Affected by the China-U.S. trade war since October 2018, domestic downstream customer demand for ABS/PS/EPS is weak. Customers are successively reducing inventory and then complementing requirements with some imports. This is putting styrene in a difficult market change position. The spot price of styrene is one of the first to take a hit, with a significant downward revision from its previous high.

Since March 2019, when the United States decided to suspend tariffs on China, the pessimistic atmosphere in the styrene market is gradually diminishing. Spreads are widening and profits are increasing. However, since China's annual holiday on October 1, the effect of the news, that two major production capacity facilities are nearing their completion, is brewing, causing the price of styrene to decline significantly and the price gaps of its main raw materials to reduce, which also affects profitability. Since the end of the year, COVID-19 has gradually affected the Chinese market and economy, and this effect is continuing to expand to Asian countries and the world. Both supply and demand have been severely affected. Coupled with the collapse of the OPEC+ crude oil reduction agreement in early March 2020, the price of oil and various bulk raw materials have fluctuated dramatically. We shall pay close attention to the market situation in order to maintain the balance of production and sales.

To date, the total number of satellite channels actually in service on the cable TV market is about 100. Videoland Inc. has a total of 7 self-produced channels, accounting for a market share of 7%.

Currently, the total number of fee-based satellite channels on the cable TV market is about 65. Videoland Inc. has a total of 7 self-produced channels, accounting for a market share of 10.7%.

In terms of video revenue, system operators (cable TV companies) charge video fees every month, and this income is about NT$500 to 600 per household. Providing program purchases accounts for about 40% (about NT$240) of the cost. The number of households that can sign a contract nationwide is about 2.9 million for 2019.

Channel operators' potential total video revenue is about NT$240 × 12 months × 2.9 million households = NT$8.35 billion.

Videoland Inc.'s video revenue in 2019 is approximately NT$762.7 million, accounting for approximately 9.13% of the channel operator's total video revenue.

As for the advertising business, based on Nielsen Media Research and MAA's reference on media owners ’opinions about the current state of the advertising industry, actual advertising pricing changes, and Gross Rating Point's (GRP) media purchase references, etc., the advertising volume statistics of the five major media and outdoor media in 2019 are as follows:

Ranking	Media	Effective Ad Volume (Million NT$)	Market Share
1	Cable TV	16,543	54.52%
2	Newspaper	3,065	10.10%
3	Magazine	1,681	5.54%
4	Broadcast TV	2,822	9.30%
5	Radio	1,854	6.11%
6	Outdoor	4,378	14.43%
Grand Total		30,343	100.00%

Videoland Inc.'s total annual advertising revenue in 2019 reached NT$1.269 billion, accounting for approximately 7.67% of cable TV advertising.

Competitive niche, and advantages, disadvantages of development prospects and countermeasures
(1) Competitive Niche
- A. Continuous improvement of various environmental protection schemes and energy saving is conducive to a sustainable business and the operation of the Company and its factories.
- B. Continue to pursue the improvement of production efficiency of each production plant and maintain its competitive advantage.
- C. Increase factory production of crystal plastics, and increase the proportion of the Company's high quality products.
(2) Advantages and disadvantages of development prospects and countermeasures
1. Styrene Monomer(SM)
  - A. Advantages
    - ① Global styrene demand grows steadily.
    - ② Taiwan still has import demand.
    - ③ Although China imposes SM anti-dumping duties and continues to increase production capacity, it is estimated that some of China's styrene supply will still need to be imported in 2020, to make up for the gap in demand.
  - B. Disadvantages
    - ① The United States and the Middle East use abundant and inexpensive natural gas raw materials, while the local raw material costs are relatively high.
    - ② The free trade agreement between Korea/U.S./EU and ASEAN+3 is not conducive to the export of downstream industries.
    - ③ After the closure of CPC's Fifth Naphtha Cracker, domestic supply of petrochemical raw materials decreased.
    - ④ Environmental regulations are becoming more stringent, and it is not easy to expand production capacity of bulk petrochemical products in Taiwan.
    - ⑤ The transportation capacity of petrochemical pipelines in the Kaohsiung area is obviously restricted after the recent gas explosion, which increases the scheduling difficulties for imported petrochemical raw materials.
    - ⑥ Taiwan is on the list of SM anti-dumping tariffs imposed by China, which restricts the export of Taiwan's SM to China, and also makes Taiwan a coveted export target for US and Korean manufacturers,

which in turn disrupts domestic prices.

  - ⑦ With the successive increases of new production capacity in China, starting with this year, the pressure of its significant reduction in imports can be felt. In addition, the government announced that the 13% value-added business tax can be fully refunded for exports, which may even convert China from being an importer to SM exporter.

C. Countermeasures
- ① To work in concert with the government policy of "quantity overseas, quality domestic", the Company seeks expansion opportunities overseas for the increase in available quantity, while striving to develop value-based products.
- ② Continue to pursue the enhancement and improvement of industrial safety and environmental protection, and increase the production efficiency of each production plant to enhance the overall comprehensive effect of energy saving and waste reduction.
- ③ Expand foreign suppliers, and fill the gap with imported raw materials to maintain production capacity.
- ④ Enable flexible transportation scheduling to ensure smooth operation of styrene plants.
- ⑤ Identify and strive for various expansion opportunities, and expand production scales to reduce costs.
- ⑥ Increase the downstream styrene integration to slow down the impact from anti-dumping tariffs and new production capacity of Mainland China.
Acrylonitrile - Butadiene-Styrene copolymer resin (ABS)

Global demand for ABS in recent years has been growing steadily. In particular, the increase in the demand for household appliance and automobile manufacturing in China has led to the continuous increase in global ABS consumption and considerable profit margins. This has led to new production capacity and centralized manufacturers' production and increased supply. 2020 will be a challenging year for ABS, which will be affected by many factors, such as the overall economy, output policy, supply, demand, and cost:

A. Advantages:
① It is estimated that the demand for ABS will continue to increase over the next few years, and that the new production capacity is limited, leaving a relatively weak balance.
② The supply of self-produced raw materials for SM is sufficient to reduce the risk of raw materials fluctuations.
③ The demand for ABS in the field of home appliances may still have some momentum. The Chinese home appliance market and the automotive industry will maintain a steady rhythm for development, and there is possibility of continued production growth.

  - ④ Demand for new applications is expanding steadily.

B. Disadvantages:
- ① As the COVID-19 epidemic spread to the world, global economic and trade activities slowed down, leading to a decline in demand, a downturn in the market, and a decline in prices.
- ② Trade friction rises. After the signing of the Regional Comprehensive Economic Partnership (RCEP), trade protectionism batters many industries and tariff barriers hinder market promotion.
- ③ The excessive dependence of AN and BD on the supply of raw materials has increased the impact of raw materials fluctuations on profits.
- ④ The impact of alternative products: For home appliances and toys with low quality requirements, PS, PP, PE are used instead of ABS, to save cost.
C. Countermeasures:
- ① Make efforts to reduce costs, and make full use of production capacity, hoping to reduce the pressure caused by the diluted interest rate spread.
- ② Provide customized product design, and expand product planning in response to customers' demand for high-value products.
- ③ Seek to migrate and disperse markets in Southeast Asia, thus expanding market spread.
- ④ Pay constant attention to the domestic and international environmental situation and the price trends of main raw materials, while adjusting the sales strategy accordingly.
Nylon (PA)
A. Advantages:
- ① Stable product quality, positive R&D capabilities, and timely customer services are conducive to enhancing customer confidence in the products.
- ② The applications and demands in the field of engineering plastics are increasing.
- ③ After the expansion of the nylon 66 factory, the production cost is reduced. With the continuous growth of the automotive electronics industry, the application of and demand for engineering plastics will continue to increase.
- ④ We are the only domestic manufacturer. Our delivery speed is fast, and we can promptly meet customer demands.
B. Disadvantages
- ① Prices of main raw materials fluctuate greatly, and are difficult to manage.

        - ② China's anti-dumping duties impede market expansion to Mainland China.

     - C. Countermeasures:

        - ① Make efforts to develop specifications for industrial yarn slices, textile grade products and special grade engineering plastics, to create market differentiation and to help move into the field of higher value products.

        - ② Make regular customer visits, enable fast and timely customer service capabilities, and make use of enhanced after-sales service systems to improve product added value.

        - ③ Expand market presence in India, Southeast Asia, and the Middle East to help avoid excessive market concentration.

(II) Important uses of major products and production process:
Important uses of major products
- (1) Styrene Monomer (SM)

Styrene monomer is extremely versatile. It is frequently used to manufacture various polystyrene resins (PS), acrylonitrile-butadiene-styrene resins (ABS), styrene-butadiene synthetic rubber (SBR), unsaturated polyester resins (UP), and more.

(2) Acrylonitrile - Butadiene-Styrene copolymer resin (ABS)

ABS resin is widely used and can be processed into housings for items as large as automobile and motorcycle components, refrigerator linings, TVs, cassette recorders and video recorders, computers, washing machines and others, and it can be for small items such as electric fans, toys, accessories, daily utensils and others as well.

Production process of major products
(1) Styrene manufacturing method

==> picture [395 x 172] intentionally omitted <==

(2) ABS plastic manufacturing method

==> picture [445 x 213] intentionally omitted <==

(III) Supply status of main raw materials:


Name of main raw materials	Supplier	Main Source	Supply Status
Benzene	CPC Corporation	Domestic / foreign import	The supply shortage of CPC Corporation is supplemented by imports.
Ethylene	CPC Corporation	Domestic	The shortage is supplemented by CPC Corporation
Acrylonitrile	China Petroleum & Chemical Corporation	Domestic	Stable
Butadiene	CPC Corporation/ Formosa Petrochemical Corporation	Domestic	The shortage is supplemented by CPC Corporation or foreign import.

The following five channels are the sources of the Company's programs:

Outside broadcast (OB): In conjunction with domestic or international sports competition, the Company obtains broadcasting rights from organizers, and broadcasts live programs or recorded video programs.
Self-made: The Company plans and produces its own programs.
Commission: Funded by the company, the programs, or dramas, are commissioned to be planned and produced by other communication companies within the established unit cost.
Outsource: The Company purchases TV series and films produced by domestic and foreign film, television and other communication companies.
Agent: The Company searches for domestic and foreign production of fine channels, obtains channel distribution rights and the agent rights for advertising.

(IV) The names of the suppliers who have accounted for more than 10% of the total purchase (sale) amount in the previous year, and the amount and proportion of the purchase (sale) amount, and explanation of the reasons in change of increase or decrease

Major suppliers over the past two years

 . GPPC Group:

Expressed in Thousands of New Taiwan Dollars

. GP	PC Group:	PC Group:	PC Group:	PC Group:	Expressed in Thousands of New Taiwan Dollars	Expressed in Thousands of New Taiwan Dollars	Expressed in Thousands of New Taiwan Dollars	Expressed in Thousands of New Taiwan Dollars
	2018				2019
Items	Title	Amount	Ratio to the net annual input amount`〔`%`〕`	Relationship with the issuer	Title	Amount	Ratio to the net annual input amount`〔`%`〕`	Relationship with the issuer
1	P7901	7,827,560	44.29	Nil	P7901	6,396,936	43.19	Nil
	Others	9,846,941	55.71	`－`	Others	8,415,269	56.81	`－`
	Net input amount	17,674,501	100		Net input amount	14,812,205	100

 . Individual financial statement:


. Individual financial statement: Expressed in Thousands of New Taiwan Dollars
	2018				2019
Items	Title	Amount	Ratio to the net annual input amount`〔`%`〕`	Relationship with the issuer	Title	Amount	Ratio to the net annual input amount`〔`%`〕`	Relationship with the issuer
1	P7901	7,827,560	51.82	Nil	P7901	6,396,936	52.31	Nil
	Others	7,278,684	48.18	`－`	Others	5,832,582	47.69	`－`
	Net input amount	15,106,244	100		Net input amount	12,229,518	100

Major customers for sales over the past two years

 . GPPC Group:

Major customers for sales over the past two years	Major customers for sales over the past two years	Major customers for sales over the past two years	Major customers for sales over the past two years	Major customers for sales over the past two years	Major customers for sales over the past two years	Major customers for sales over the past two years	Major customers for sales over the past two years	Major customers for sales over the past two years
. GPPC Group: Expressed in Thousands of New Taiwan Dollars
	2018				2019
Items	Title	Amount	Ratio to the net annual sales amount`〔`%`〕`	Relationship with the issuer	Title	Amount	Ratio to the net annual sales amount`〔`%`〕`	Relationship with the issuer
1	#4001	4,993,987	20.18	Nil	#4001	4,054,684	19.81	Nil
	Others	19,747,151	79.82	`－`	Others	16,413,545	80.19	`－`
	Net input amount	24,741,138	100		Net input amount	20,468,229	100

 . Individual financial statement:


. Individual financial statement: Expressed in Thousands of New Taiwan Dollars
	2018				2019
Items	Title	Amount	Ratio to the net annual sales amount`〔`%`〕`	Relationship with the issuer	Title	Amount	Ratio to the net annual sales amount`〔`%`〕`	Relationship with the issuer
1	#4001	4,993,987	24.59	Nil	#4001	4,054,684	24.98	Nil
2	GPPC Chemical Corporation	1,103,107	5.43	Subsidiary	GPPC Chemical Corporation	1,286,974	7.93	Subsidiary
	Others	14,208,000	69.98	`－`	Others	10,887,427	67.09	`－`
	Net input amount	20,305,094	100		Net input amount	16,229,085	100

Where the names of customers could not be disclosed under the contract terms or where transaction counterparts as individuals and non-related parties, provide bodes instead.

(V) The output volume and value in the past two years

 . GPPC Group:

. GPPC Group:	. GPPC Group:	. GPPC Group:	. GPPC Group:	. GPPC Group:	. GPPC Group:	. GPPC Group:
Expressed in Expressed in Thousand NT Dollars, thousand M.T.,`／`SM‧ABS, HIPS, steam Thousand NT Dollars. thousand M3`／`H2 Thousand NT Dollars, million M2`／`Packaging materials Thousand NT Dollars, million KW`／`Power
Year Output volume, value Majorproducts	2019			2018
	Productivity	Output volume	Output value	Productivity	Output volume	Output value
SM	370	365	9,683,293	370	345	11,459,746
ABS	120	77	3,891,720	120	91	4,586,022
H2	16,800	10,663	98,496	16,800	9,595	95,494
Electricity power	257	321	544,840	257	308	500,100
Steam	1,242	1,040	719,611	1,242	1,040	667,250
Nylon	30	12	1,581,640	30	25	2,189,512
HIPS	50	46	1,603,399	50	31	1,330,757
Film amortization & production costs			869,377			894,901
Commission and royalty			320,641			342,614
Satellite channel rent and others			126,115			119,190
Packagingmaterials		93	1,419,985		101	1,588,674
Total	-	-	20,859,117	-	-	23,774,260

 .Individual financial statement

Expressed in Expressed in Thousand NT Dollars, thousand M.T., ／ SM‧ABS, steam Thousand NT Dollars. thousand M[3] ／ H2 Thousand NT Dollars, million KW ／ Power

Year Output volume, value Majorproducts	2019	2019	2019	2018	2018	2018
	Productivity	Output volume	Output value	Productivity	Output volume	Output value
SM	370	365	9,683,293	370	345	11,459,746
ABS	120	77	3,891,720	120	91	4,586,022
H2	16,800	10,663	98,496	16,800	9,595	95,494
Electricity power	257	321	544,840	257	308	500,100
Steam	1,242	1,040	719,611	1,242	1,040	667,250
Nylon	30	12	1,581,640	30	25	2,189,512
Total	-	-	16,519,600	-	-	19,498,124

(VI) The sales volume and value in the past two years

 . GPPC Group:

. GPPC Group:	. GPPC Group:	. GPPC Group:	. GPPC Group:	. GPPC Group:	. GPPC Group:	. GPPC Group:	. GPPC Group:	. GPPC Group:
Expressed in: Thousand NT Dollars, thousand M.T.`／`petrochemical products‧plastic products Expressed in: Thousand NT Dollars`、`thousand M.T.`／`SM‧ABS, HIPS, Nylon, Steam Thousand NT Dollars. thousand M3`／`H2 Thousand NT Dollars, million M2`／`Packaging materials Thousand NT Dollars, million KW`／`Power
Year Sales volume /value Majorproducts	2019				2018
	Domestic sales		Export		Domestic sales		Export
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
petrochemical products(SM)	274	8,277,358	7	204,078	258	10,141,837	14	481,584
plastic products (ABS,HIPS)	24	1,138,027	114	4,970,577	24	1,356,684	99	5,444,796
Nylon	10	961,376	5	577,742	15	1,506,078	10	1,176,819
H2	10,665	146,709	0	0	9,590	131,381	0	0
Electricpower	153	297,152	0	0	145	274,651	0	0
Steam	174	168,327	0	0	164	152,745	0	0
Advertising video channel revenues		1,910,627		0		2,024,364		300
Revenues in Packagingmaterials	47	824,477	48	750,219	47	831,900	54	943,336
Others	-	206,129	-	35,431	-	250,638	-	24,025
Others	-	13,930,182	-	6,538,047	-	16,670,278	-	8,070,860

 .Individual financial statement

Expressed in Expressed in Thousand NT Dollars, thousand M.T., ／ SM‧ABS, steam Thousand NT Dollars. thousand M[3] ／ H2 Thousand NT Dollars, million KW ／ Power

					Thousand NT Dollars. thousand M3`／`H2 Thousand NT Dollars, million KW`／`Power	Thousand NT Dollars. thousand M3`／`H2 Thousand NT Dollars, million KW`／`Power	Thousand NT Dollars. thousand M3`／`H2 Thousand NT Dollars, million KW`／`Power	Thousand NT Dollars. thousand M3`／`H2 Thousand NT Dollars, million KW`／`Power
Year Sales volume /value Majorproducts	2019				2018
	Domestic sales		Export		Domestic sales		Export
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
SM	316	9,563,917	7	204,078	286	11,244,696	14	481,584
ABS	13	669,243	78	3,640,539	13	851,800	78	4,485,338
H2	10,665	146,711	0	0	9,590	131,383	0	0
Electricity power	153	297,152	0	0	145	274,651	0	0
Steam	174	168,327	0	0	164	152,745	0	0
Nylon	10	961,376	5	577,742	15	1,506,078	10	1,176,819
Total	-	11,806,726	-	4,422,359	-	14,161,353	-	6,143,741

III. Number of employees, average number of years of service, average age and academic degree credential distribution ratio in the past two years and as of the publication date of the Annual Report:

	April 4,2020	April 4,2020	April 4,2020	April 4,2020
	Year	2018	2019	The year as of April 14,2020
Number of employees	North Area	390	381	376
	Central Area	180	174	169
	South Area	384	384	379
	Overseas	196	188	188
	Total	1150	1127	1112
	Average ages	42	43	43
Average service seniority		13	14	14
Academic degree levels	Ph. D.	0.26%	0.27%	0.27%
	Master	6.78%	6.74%	6.74%
	University/college	53.30%	53.86%	53.78%
	Senior high school	33.83%	33.10%	33.18%
	Below senior high school (inclusive)	5.83%	6.03%	6.03%

IV. Information of expenditures for environmental protection

(I) In the most recent year and as of the publication date of the Annual Report, the Company's losses (including compensation) resulting from pollution to the environment, the total amount of punishment, the Company should reveal its future response measures (including improvement measures) and possible expenditures (including the estimated amount of losses, punishment and compensation that may occur if the response measures are not taken. A reasonable estimate should explain the fact if it cannot be reasonably estimated).

Contents	2019	2020 uptopresent
Conditions of pollution(categories, extent)	1. Black smoke emitted from the combustion tower 2. The number of combustion tower uses inconsistent with the written plan. 3. Leakage of equipment components 4. Waste cleanup plan inconsistent with the_statusquo_	1. SM2 heating furnace emits black smoke
Compensation target or penaltyimposer	Kaohsiung City Environmental Protection Bureau	Kaohsiung City Environmental Protection Bureau
Amount of compensation or fact of penalty	1. NT$200,000 2. NT$100,000 3. NT$200,000 4. NT$360,000	1. NT$100,000
Other losses	Nil	Nil

1. Countermeasures

(1) Corrective plans

In terms of the corporate responsibility to the society, other than investment in hardware, the Company spares no effort to improve the discharge of various pollutants and improve safety management facilities (Cf. Industrial safety environmental capital expenditures below for more details) in order to directly minimize environmental pollution and improve production safety. Besides, where a large number of equipment components in our plants are prone to leakage and emission, for our factories, we continually commission qualified inspection companies to conduct factory-wide scanning with FLIR and flame-type ion detector devices to inspect each and every equipment component one by one. Meanwhile, we commissioned SGS to scan and re-test with infrared devices. Where the management of equipment components, we cannot rely solely on outsourcees for inspection, our on-site personnel also continually carry out follow-up testing based on the assigned responsibility from the jurisdiction with the detector devices purchased by the factories. The environmental engineering department conducts random testing to ensure the integrity in the inspection. In terms of pollution reduction of combustion facilities, in our factories we have converted the entire plant steam boilers, heat medium boilers and steam heating furnaces with natural gas as the fuel, and with steams and electric boilers used for the best feasible control technology (BACT) to prevent pollution and to effectively reduce pollutant emissions. In terms of industrial safety environmental management system, in our plants we have introduced the OHSAS18000 occupational safety and health management system. In 2019, we further introduced the ISO-45001 system and the process safety management (PSM) system within a three-year period along with efforts in planning, implementation, audit, improvement and other action cycles to make the management system in full and effective play. At the same time, we promote the evaluation of industrial safety environmental protection performance indicators of various departments to improve execution efficiency. In terms of employee safety protection, in addition to efforts to provide personal protective equipment such as goggles, earplugs and ear muffs as well as vertical fall arresters for employees, we further continuously promote safety observation and encourage the reporting of a false alarm event and continuously provide employees and contractors with safety related educational & training programs. We earnestly expect that the factory process equipment will operate safely and smoothly and successfully achieve production goals.

(2) Major environmental protection capital expenditure expected in the coming years:

employees and contractors with safety related educational & training programs. We earnestly expect that the factory process equipment will operate safely and smoothly and successfully achieve production goals. (2) Major environmental protection capital expenditure expected in the coming years:	employees and contractors with safety related educational & training programs. We earnestly expect that the factory process equipment will operate safely and smoothly and successfully achieve production goals. (2) Major environmental protection capital expenditure expected in the coming years:
Expressed in Thousands of New Taiwan Dollars
2019
Proposed purchase of pollution prevention equipment or expenditure content	Amount (Thousand NT$)
Exhaustgas scrubber	400
Dry joints andpipingfor SM tank trucks	980
VOC improvementproject in storage tank andprocess area	1,950
Replacement of the wholeplant monitoringsystem into new ones	2,950
CF-009furnace bodyupdate	1,800
Infrared thermal imaging gas leak thermometer FLIR	3,850
Total	11,930

100

Expressed in Thousands of New Taiwan Dollars 2010	Expressed in Thousands of New Taiwan Dollars 2010	Expressed in Thousands of New Taiwan Dollars 2010
2010
Proposed purchase of pollution prevention equipment or expenditure content	Amount (Thousand NT$)
Pumpsingle shaft seal in storage area changed to double shaft seal	1,600
Intelligent inspection-Polymer Plant,UtilityPlant	2,361
MS-233 equipment update	820
Plant-wide industrial safety environmental information publicity system	350
Replacement / installation of resistance valves for corrosion pipelines under thermal insulation in the wholeplant	1,680
PC-101A/B uninstaller update	1,200
Total	8,011

The part without countermeasures taken: Nil

101

V. Labor relations

(1) Enumerate the Company's employee welfare measures, continuing education, training, retirement system and its implementation status, as well as the agreements between the labor and the management and the efforts to safeguard employees' interests:

1. Fringe benefits for employees

The Company has enacted an "Employee Welfare Insurance" operating procedure book. Other than labor insurance/national health insurance, the Company at the same time acquires group insurance to cover colleagues and their dependents. On an annual basis, the Company also renders annual health checks for employees, organizes year-end gratitude dinners and spring banquets and the like. The Company has set up an Employee Welfare Committee which is responsible for the promotion of annual tourism programs, education subsidies, wedding and funeral subsidies, emergency relief, community activities, food subsidies ... and other welfare benefits.

Continued training and education programs for employees

The company has enacted operating procedures, regulating internal training, external training, English proficiency/computer testing, industrial environment license and such relevant educational & training programs. In an attempt to pass on hands-on experiences, improve management and professional knowledge, the Company also encourages colleagues to study for degrees or send them abroad for special training and education programs. At present, the titles of the operation procedures related to employee training and training are as enumerated below:

(1) Regulations governing educational & training programs
(2) Educational & training program procedures for Kaohsiung Plant.

Fees and expenditures spent by the Company for educational & training programs in 2019:

(1) Educational & training programs sponsored by the Company in 2019
Educational & training programs related expenditures approximately NT$1,750,426

Educational & training programs in 232 courses in total.

Educational & training trainees: 3,493 trainees

Total educational & training programs in 9,265 hours

(2) Contents covered within the training programs:

Professional on-the-job training programs sponsored by the respective departments

Statutory license(s)/certificate(s) related training programs and professional programs.

Internal training programs with outsourced instructors

Environmental safety & health training programs rendered by outsourced instructors

ISO training programs

Technical training programs under foreign technical consultants.

(3) Encouragement upon employees into on-the-job continued training and

102

education programs for better performance evaluation and promotion

License(s)/certificate(s) acquired by financial information transparency in the Company:

Auditors: Two internal auditors

Lan Hou Hui-Ping Chen (Cheng)-Zi-9310124 (Cheng)-Zi-9420059 Financial, accounting personnel: Two financial, accounting heads Ling Chu Chen Ching Fu Chen Year 2009-Kuai-Jiao-(Accounting (Year 2010)-Zhuan-Gao-Kuai-Zi Head) Chu-Zi 3003007 000542

Employee behavior or ethical principles

Aiming at the employee behavior and ethics codes, the Company has formulated many relevant methods and regulations to allow employees of all ranks to follow the ethical concepts, rights, obligations and behaviors. The relevant methods are briefly described below:

(1) Organizational rules: The efforts to enhance work efficiency, strengthen hierarchical responsibility rule oriented management and effectively regulate the rights privileged to employees of all ranks at work.
(2) Department Handbook and Internal Customer Grievance Measures: The efforts to expressly regulate all departments concerned in their responsibilities and powers along with organizational functions to inter-supervision to assure sound functions of all departments.
(3) Regulations Governing Educational & Training Programs and Hiring of Employees: The contents and standards of the training programs should be clearly regulated according to the rank, and related to the promotion of performance appraisal. In addition, the Company assists newly hired employees to adapt themselves to the new environment and colleagues and exert their productivity as soon as possible to minimize the turnover rate of new recruits.
(4) Regulations Governing Staff Attendance: As the grounds to regulate employees in taking vacations and leave with faithful compliance with the rules to set up a complete attendance system and establish good discipline for entire staff.
(5) Regulations Governing Performance Evaluation and Promotion for Employees: As the grounds to regulate a raise, promotion and incentive awards.
(6) Employee Working Regulations and Procedures for Proposal into Advancement: As the guiding grounds to regulate employee behaviors or actions, for sound rewarding and punishment amidst the benefits or impairment toward the Company with their behaviors.

103

(7) Regulations governing the assignment to serve with affiliates, reimbursement and relocation of employees and relocation expenses and measures for business trips: As the grounds to regulate assignment amidst affiliated enterprises, rotation associations within the Company and trips on business needs.
(8) Regulations governing transfer or resignation personnel, issuance of on-off employment certificates: The grounds to regulate the transfer or resignation of employees and the issuance of various certifications to be complied with.
(9) Grievance and punishment measures for prevention and control over potential sexual harassment: The very grounds to prevent sexual harassment in the workplace, maintain equality in gender at work and human dignity, and regulate employees' speech and behavior in the workplace.
(10) Business Secrets/Personal Information Protection Act: The very grounds to protect the Company's business secrets, business interests and competitiveness, safeguard employees' personal information and avoid disclosure and the impairment incurred thereby.
Retirement system and implementation thereof:
(1) Toward employees who choose pension system under the Labor Standards Act (Old Pension Mechanism): The Company has set up the Operating Procedures of the "Organizational Regulations of the Labor Retirement Reserve Supervision Committee" to establish the Labor Retirement Reserve Supervision Committee accordingly to take charge of the relevant issues in accordance with or superior to the Labor Standards Act. The Committee holds coordinative meetings about the retirement supervisory issues for sound communications with employees, directors and supervisors of the industrial trade unions on a regular basis. On a monthly basis, the Company appropriates the pension funds according to the specified provisions into the Account Earmarked for Labor Pension Fund in the Bank of Taiwan. The Labor Retirement Reserve Supervision Committee would appropriate funds out of the account to meet the retirement needs.
(2) Toward employees who choose pension system under the Labor Pension Act (New Pension Mechanism): The Company appropriates 6% of the wage rate into the Account Earmarked for Labor Pension Fund on a monthly basis.
Key accords reached by and between employees and the management:

The Company has set up Industrial Labor Union and Labor-Management Coordination Meetings. The labor-management meetings are convened on a regular basis for sound communications and coordination with employees and directors and supervisors of the Unions.

Protective measures to safeguard working environments and safety & security for employees:

The Company faithfully adheres to the spirit of uninterrupted improvement with proactive pursuit of perfection. In addition to continuous investment in hardware to enhance various pollution prevention and fire safety equipment, the Company directly minimizes pollutant emissions and improves production safety & security. In terms of industrial safety and environmental protection management system, here at the Company, OHSAS18000 occupational safety and health management system has been successfully introduced to establish a very sound management system through planning, execution, auditing, improvement and other efforts. In

104

terms of personal protection to entire staff, goggles, earplugs and earmuffs and vertical fall arresters have been provided to entire staff who, besides, have been provided with sound educational & training programs into sophisticated uses of such safety & security devices. It is expected that in the entire Company, all factory process equipment will be operated safe and sound to successfully accompany the target in production.

(II) In the most recent year and as of the publication date of the Annual Report, the impairment having been undergone by the Company as a result of labor disputes with disclosure of the amount of impairment so far and anticipated in the future as well as the countermeasures. If such amounts could not be reasonably estimated, the fact that it cannot be reasonably estimated should be explained in full: Where the Company has constantly adhered to sound communications and harmony with employees, all potential problems, minor ones in all cases, have been successfully solved in a harmonious manner. No labor dispute has occurred in recent years. Under harmonious ambiance with sound mutual trust, no labor disputes are expected to happen in the in the days and years ahead.

VI. Key agreements

I. Key agreements
	Parties concerned	Duration of the agreements	Key contents	Restrictive terms
EB-3 Lease agreement for alkylation and transalkylation catalyst	USA, ExxonMobil	01/28/2010	Ethylbenzene manufacturing process lease agreement	─
Benzene	CPC Corporation, Taiwan	01/2020 ~ 12/2020	Agreement	Nor for resale
Ethylene	CPC Corporation, Taiwan	01/2020 ~ 12/2020	Agreement	Nor for resale
Butadiene	CPC Corporation, Taiwan	01/2020 ~ 12/2020	Agreement	Nor for resale

105

Six. Financial Highlights

I. Condensed balance sheets and consolidated statements of comprehensive income for the last five years, with statements of the names of CPAs and audit opinions
(I) Condensed Balance Sheet-International Financial Reporting Standards (IFRS)

Expressed in Thousands of New Taiwan Dollars

Year Item	Year Item		Financial information for the past five years	Financial information for the past five years	Financial information for the past five years
		2015	2016	2017	2018	2019
Current Assets		6,644,697	7,772,016	9,474,318	10,852,015	11,627,999
Property, plant and equipment		8,282,258	8,259,961	7,778,233	7,427,473	7,240,590
Intangible assets		674,287	674,070	674,070	674,070	674,070
Other assets		7,529,124	8,299,001	10,073,294	10,906,343	11,943,748
Total	assets	23,130,366	25,005,048	27,999,915	29,859,901	31,486,407
Current liabilities	Before distribution	2,474,365	2,887,286	3,131,118	2,877,053	2,519,453
	After distribution	3,227,661	3,825,906	4,069,738	2,889,053	`＊`
Non-current liabilities		1,728,330	1,270,543	1,384,733	1,361,874	1,734,877
Total liabilities	Before distribution	4,202,695	4,157,829	4,515,851	4,238,927	4,254,330
	After distribution	4,955,991	5,096,449	5,454,471	4,250,927	`＊`
The Equity contributed to the owners of Parent Company		16,614,692	18,244,524	20,718,147	22,738,990	24,368,668
Capital stock		9,266,203	9,266,203	9,266,203	9,266,203	9,266,203
Capital surplus		115,935	123,604	147,446	180,533	181,698
Retained earnings	Before distribution	6,577,702	8,192,056	10,538,796	12,608,192	14,695,878
	After distribution	5,824,406	7,253,436	9,600,176	12,596,192	`＊`
Other	equity	854,456	862,265	887,872	739,639	280,466
Treasurystock		(199,604)	(199,604)	(122,170)	(55,577)	(55,577)
Non-controlled Equity		2,312,979	2,602,695	2,765,917	2,881,984	2,863,409
Total equity	Before distribution	18,927,671	20,847,219	23,484,064	25,620,974	27,232,077
	After distribution	18,174,375	19,908,599	22,545,444	25,608,974	`＊`

To be finalized after being resolved in the shareholders’ meeting

106

(II) Condensed Statements of Comprehensive Income - International Financial Reporting Standards (IFRS)

(II) Condensed Statements of Comprehensive Income - International Financial Reporting Standards (IFRS)	(II) Condensed Statements of Comprehensive Income - International Financial Reporting Standards (IFRS)	(II) Condensed Statements of Comprehensive Income - International Financial Reporting Standards (IFRS)	(II) Condensed Statements of Comprehensive Income - International Financial Reporting Standards (IFRS)	(II) Condensed Statements of Comprehensive Income - International Financial Reporting Standards (IFRS)	(II) Condensed Statements of Comprehensive Income - International Financial Reporting Standards (IFRS)
Expressed in Thousands of New Taiwan Dollars
Year Item	Financial information for thepast fiveyears
	2015	2016	2017	2018	2019
Operatingrevenues	20,024,959	19,918,739	23,350,965	24,741,138	20,468,229
Gross operating profit	3,041,276	3,424,119	3,793,985	4,055,348	2,639,089
Operating gain/loss	1,825,518	2,167,253	2,483,817	2,738,838	1,370,211
Non-Operating revenues and expenditures	158,948	916,876	1,699,258	1,318,110	1,370,666
Netprofit before tax	1,984,466	3,084,129	4,183,075	4,056,948	2,740,877
Net profit for the year of continuing operations	1,652,077	2,578,738	3,447,650	3,150,741	2,176,211
Loss from discontinued operations	0	0	0	0	0
Netprofit(Loss)for theyear	1,652,077	2,578,738	3,447,650	3,150,741	2,176,211
Other comprehensive income for the year(net after tax)	(164,202)	176,686	84,777	(367,437)	(486,467)
Total amount of comprehensive incomes for theyear	1,487,875	2,755,424	3,532,427	2,783,304	1,689,744
Net profit contributed to the owners of Parent Company	1,472,319	2,400,690	3,288,642	2,960,106	2,070,125
Net profit contributed to the non-controlled equity	179,758	178,048	159,008	190,635	106,086
Total amount of comprehensive income contributed to the owners of Parent Company	1,324,895	2,375,459	3,310,967	2,633,570	1,640,513
Total amount of comprehensive income contributed to the non-controlled equity	162,980	379,965	221,460	149,734	49,231
Earningsper share(Note)	$1.62	$2.65	$3.64	$3.26	$2.27

Note: The earnings per share (EPS) is counted based on the weighted average number of shares outstanding

(III) Condensed Balance Sheet - Individual Financial Statement (International Financial Reporting Standards (IFRS))

(III) Condensed Balance Sheet - Individual Financial Statement (International Financial Reporting Standards (IFRS))	(III) Condensed Balance Sheet - Individual Financial Statement (International Financial Reporting Standards (IFRS))	(III) Condensed Balance Sheet - Individual Financial Statement (International Financial Reporting Standards (IFRS))	(III) Condensed Balance Sheet - Individual Financial Statement (International Financial Reporting Standards (IFRS))	(III) Condensed Balance Sheet - Individual Financial Statement (International Financial Reporting Standards (IFRS))	(III) Condensed Balance Sheet - Individual Financial Statement (International Financial Reporting Standards (IFRS))	(III) Condensed Balance Sheet - Individual Financial Statement (International Financial Reporting Standards (IFRS))
Expressed in Thousands of New Taiwan Dollars Year Item Financial information for thepast fiveyears 2015 2016 2017 2018 2019 Current Assets 2,479,712 3,508,893 5,108,128 5,227,246 6,151,330 Property, plant and equipment 7,289,584 7,317,929 6,909,116 6,600,827 6,089,278 Intangible assets 0 0 0 0 0 Other assets 9,739,485 10,435,211 12,118,859 14,070,429 14,925,722 Total assets 19,508,781 21,262,033 24,136,103 25,898,502 27,166,330 Current liabilities Before distribution 1,424,530 1,954,650 2,363,192 2,115,208 1,705,453 After distribution 2,177,826 2,893,270 3,301,812 2,127,208 `＊` Non-current liabilities 1,469,559 1,062,859 1,054,764 1,044,304 1,092,209 Total liabilities Before distribution 2,894,089 3,017,509 3,417,956 3,159,512 2,797,662 After distribution 3,647,385 3,956,129 4,356,576 3,171,512 `＊` Capital stock 9,266,203 9,266,203 9,266,203 9,266,203 9,266,203 Capital surplus 115,935 123,604 147,446 180,533 181,698 Retained earnings Before distribution 6,577,702 8,192,056 10,538,796 12,608,192 14,695,878 After distribution 5,824,406 7,253,436 9,600,176 12,596,192 `＊` Other equity 854,456 862,265 887,872 739,639 280,466 Treasurystock (199,604) (199,604) (122,170) (55,577) (55,577) Total equity Before distribution 16,614,692 18,244,524 20,718,147 22,738,990 24,368,668 After distribution 15,861,396 17,305,904 19,779,527 22,726,990 `＊`
Year Item		Financial information for thepast fiveyears
		2015	2016	2017	2018	2019
Current Assets		2,479,712	3,508,893	5,108,128	5,227,246	6,151,330
Property, plant and equipment		7,289,584	7,317,929	6,909,116	6,600,827	6,089,278
Intangible assets		0	0	0	0	0
Other assets		9,739,485	10,435,211	12,118,859	14,070,429	14,925,722
Total assets		19,508,781	21,262,033	24,136,103	25,898,502	27,166,330
Current liabilities	Before distribution	1,424,530	1,954,650	2,363,192	2,115,208	1,705,453
	After distribution	2,177,826	2,893,270	3,301,812	2,127,208	`＊`
Non-current liabilities		1,469,559	1,062,859	1,054,764	1,044,304	1,092,209
Total liabilities	Before distribution	2,894,089	3,017,509	3,417,956	3,159,512	2,797,662
	After distribution	3,647,385	3,956,129	4,356,576	3,171,512	`＊`
Capital stock		9,266,203	9,266,203	9,266,203	9,266,203	9,266,203
Capital surplus		115,935	123,604	147,446	180,533	181,698
Retained earnings	Before distribution	6,577,702	8,192,056	10,538,796	12,608,192	14,695,878
	After distribution	5,824,406	7,253,436	9,600,176	12,596,192	`＊`
Other equity		854,456	862,265	887,872	739,639	280,466
Treasurystock		(199,604)	(199,604)	(122,170)	(55,577)	(55,577)
Total equity	Before distribution	16,614,692	18,244,524	20,718,147	22,738,990	24,368,668
	After distribution	15,861,396	17,305,904	19,779,527	22,726,990	`＊`

To be finalized after being resolved in the shareholders’ meeting

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(IV) Condensed Statements of Comprehensive Income - Individual Financial Statement (International Financial Reporting Standards (IFRS))

(IV) Condensed Statements of Comprehensive Income - Individual Financial Statement (International Financial Reporting Standards (IFRS))	(IV) Condensed Statements of Comprehensive Income - Individual Financial Statement (International Financial Reporting Standards (IFRS))	(IV) Condensed Statements of Comprehensive Income - Individual Financial Statement (International Financial Reporting Standards (IFRS))	(IV) Condensed Statements of Comprehensive Income - Individual Financial Statement (International Financial Reporting Standards (IFRS))	(IV) Condensed Statements of Comprehensive Income - Individual Financial Statement (International Financial Reporting Standards (IFRS))	(IV) Condensed Statements of Comprehensive Income - Individual Financial Statement (International Financial Reporting Standards (IFRS))
Expressed in Thousands of New Taiwan Dollars
Year Item	Financial information for thepast fiveyears
	2015	2016	2017	2018	2019
Operatingrevenues	14,918,335	15,108,451	18,931,639	20,305,094	16,229,085
Gross operating profit	1,665,168	2,091,529	2,629,762	2,788,644	1,454,285
Operating gain(loss)	1,334,324	1,710,850	2,165,523	2,299,040	1,040,045
Non-Operating revenues and expenditures	354,213	1,021,202	1,607,803	1,336,317	1,371,575
Netprofit before tax	1,688,537	2,732,052	3,773,326	3,635,357	2,411,620
Net profit for the year of continuingoperations	1,472,319	2,400,690	3,288,642	2,960,106	2,070,125
Loss from discontinued operations	0	0	0	0	0
Netprofit(Loss)for theyear	1,472,319	2,400,690	3,288,642	2,960,106	2,070,125
Other comprehensive income for theyear(net after tax)	(147,424)	(25,231)	22,325	(326,536)	(429,612)
Total amount of comprehensive incomes for theyear	1,324,895	2,375,459	3,310,967	2,633,570	1,640,513
Earningsper share(Note)	$1.62	$2.65	$3.64	$3.26	$2.27

Note: The earnings per share (EPS) is counted based on the weighted average number of shares outstanding

(V) Names of CPAs and their audit opinions for the last five years

Year	Name of CPA Firm	CPA	Audit Opinions
2015	Crowe Horwath International	Mei Ling Lin, Wu ChangWang	An unqualified opinion with modified wording
2016	Crowe Horwath International	Ying Chia Hsiao, Wu ChangWang	Unqualified opinion
2017	Crowe Horwath International	Ying Chia Hsiao, Wu ChangWang	Unqualified opinion
2018	Crowe Horwath International	Ying Chia Hsiao, Wu ChangWang	Unqualified opinion
2019	Crowe Horwath International	Ying Chia Hsiao, Wu ChangWang	Unqualified opinion

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II. Financial Analyses for the last five years

(I) Financial Analyses for the last five years - adopting International Financial Reporting Standards (IFRS)

Standards (IFRS)	Standards (IFRS)
Year Analyzed Item		Financial Information for thepast fiveyears
		2015	2016	2017	2018	2019
Capital Structure (%)	Liabilities to assets ratio(%)	18.17	16.63	16.13	14.20	13.51
	Long-term funds to property, plant and equipment ratio(%)	249.40	267.77	319.72	363.28	400.06
Liquidity (%)	Current ratio(%)	268.54	269.18	302.59	377.19	461.53
	Quick Ratio(%)	199.07	210.47	236.61	306.21	393.58
	Interest coverage ratio(times)	10,068.68	66,212.09	290,995.34	221,187.08	45,857.55
Operating ability	Accounts receivable turnover rate(times)	8.68	7.68	7.39	7.87	7.52
	Average days of accounts receivable(days)	42	47	49	46	48
	Inventoryturnover rate(times)	9.72	9.98	10.65	10.33	9.76
	Accounts payable turnover rate (times)	10.29	9.70	10.28	11.84	11.15
	Average days of sales(days)	37	36	34	35	37
	Property, plant and equipment turnover rate(times)	2.36	2.41	2.91	3.25	2.79
	Total assets turnover rate (times)	0.84	0.83	0.88	0.86	0.67
Profitability	Return on assets(%)	7.02	10.73	13.01	10.90	7.11
	Return on equity (%)	8.98	12.97	15.55	12.83	8.23
	Net gains before tax to paid-in capital ratio(%)	21.42	33.28	45.14	43.78	29.58
	Netgains ratio(%)	8.25	12.95	14.76	12.73	10.63
	Earningsper share($)	1.62	2.65	3.64	3.26	2.27
Cash flow	Cash flow ratio(%)	159.21	113.35	128.09	159.06	121.33
	Cash flow adequacyratio(%)	158.13	177.09	243.69	250.25	307.98
	Cash reinvestment ratio(%)	11.55	7.46	8.39	9.27	7.28
Leverage	Operatingleverage	2.57	2.56	2.14	2.20	2.93
	Financial leverage	1.01	1.00	1.00	1.00	1.00
State the changes in financial ratios over the past two years (2019 & 2018) up to over 20% and the reasons why: 1. The change in the current ratio increased by 22% over the preceding term, due primarily to the fact that the current assets increased by 7% over the preceding term while current liabilities decreased by 12% from the preceding term. 2. The quick ratio increased by 29% over the preceding term, due primarily to the fact that the quick assets increased by 13% over the preceding term while current liabilities decreased by 12% from the preceding term. 3. Interest coverage ratio (times) changed, with a decrease by 79% from the preceding term, due primarily to the fact that in the current term, the income tax and net profit before tax decreased by 32% from the preceding term and the interest expense increased by 2.3 times over the preceding term. 4. The gross asset turnover rate decreased by 22% from the preceding term, due primarily to the fact that in the current term, the sales decreased by 17% from the preceding term and the total average assets increased by 6% over the preceding term. 5. Return on assets decreased by 35% from the preceding term, due primarily to the fact that in the current term, the profit and/or loss after tax decreased by 31% from the preceding term and the total average assets increased by 6% over the preceding term. 6. The return on equity decreased by 36% from the preceding term, due primarily to the fact that in the current term, the profit and/or loss after tax decreased by 31% from the preceding term and total average equity increased by 8% over the preceding term. 7. The ratio of net profit before tax to the paid-in capital decreased by 32% from the preceding term, due primarily to the fact that in the current term, the net profit before tax decreased by 32% from the preceding term. 8. The earnings per share (EPS) decreased by 30% from the preceding term, due primarily to the fact that in the current term, the proprietor profit and/or loss belonging to the parent company decreased by 30% from the preceding term. 9. The cash flow ratio decreased by 24% from the preceding term, due primarily to the fact that in the current term, the net cash flow in operating activities decreased by 33% from the preceding term and the current liabilities decreased by 12% from the preceding term. 10. The cash flow adequacy ratio increased by 23% over the preceding term, due primarily to the fact that in the current term, the net cash flow in operating activities over the past five years increased by 3% over the preceding term and in the current term,the aggregate total of the capital expenditure,inventoryincreased over thepast fiveyears and the total cash dividend

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decreased by 16% from the preceding term.	decreased by 16% from the preceding term.
11. In terms of change, the ratio of reinvestment in cash decreased by 22% from the preceding term, due primarily to the fact
that in the current term, the amount of the net cash flow in operating activities deducted with the cash dividend decreased
by 17% from the preceding term. Besides, in the current term, the aggregate total of real property plants, equipment in
gross	amount, long-term investment, other non-current assets and operating capital increased by 6% from the preceding
term.
12. The operating leverage changed, with an increase of 33% over the preceding term, due primarily to the fact that in the
current term, the net operating revenue deducted with the variable operating costs and expenses decreased by 33% from the
precedingterm and the netprofit this term decreased by50% from theprecedingterm.
Note 1:	All Consolidated Financial Statements of all fiscal years have been audited and certified by certified public
	accountants.
Note 2:	The calculation formulas as enumerated below should be shown at the end of this Table
	1. Capital Structure
	(1) Liabilities to assets ratio = total liabilities / total assets
	(2) Long-term funds to property, plant and equipment ratio = (total equity + non-current liabilities) / net
	property, plant and equipment
	2. Liquidity
	(1) Current ratio = current assets / current liabilities
	(2) Quick ratio = (current assets – inventory- prepaid expenses) / current liabilities
	(3) Interest coverage ratio (times) = net gains before income tax and interest / interest expenses of the
	current term
	3. Operating ability
	(1) Account receivables (including Notes receivables from operating activities and accounts receivable)
	turnover = net sales/average receivables of each term (including notes receivables from operating
	activities and accounts receivable) balance
	(2) Average days of accounts receivable = 365 / receivables turnover rate
	(3) Inventory turnover rate = COGS (cost of goods sold)/average inventory amount
	(4) Account payables (including Notes payable from operating activities and accounts payable)
	turnover= COGS (cost of goods sold)/average payables of each term (including Notes payable from
	operating activities and accounts payable) balance
	(5) Average days of sales = 365 / inventory turnover rate
	(6) Property, plant and equipment turnover rate = net sales / average net property, factory and equipment
	(7) Total assets turnover rate = net sales / average total assets
	4. Profitability
	(1) Return on assets = [gain/loss after tax + interest expense x (1-tax rate)] / average total asset
	(2) Return on equity = gain/loss after tax / average total equity
	(3) Net gains ratio = gain/loss after tax / net sales
	(4) Earnings per share = (the gain/loss contributed to the parent company – preferred stock dividend) /
	weighted average shares outstanding (Note 4)
	5. Cash flow
	(1) Cash flow ratio= net cash flow of operating activities/current liabilities
	(2) Cash flow adequacy ratio= net cash flow of operating activities in the past five years / the past five
	years sum of (capital expenditures + inventory addition +cash dividends)
	(3) Cash reinvestment ratio= (net cash flow of operating activities- cash dividends) / (Property, plant
	and equipment gross + long term investment + other non-current assets + working capital) (Note 5)
	6. Leverage
	(1) Operating leverage = (operating revenues - variable operating cost and expenses)/operating income
	(Noe 6)

(2) Financial leverage = operating profit / (operating profit - interest expense)

Note 3: In terms of the aforementioned formulas to count earnings per share (EPS), the key points for attention should be noted as below upon measurement:

To be counted at the number of common shares in weighted average instead of outstanding issued shares as of end of the year.
In case of capital increase through cash injection or transaction with treasury shares, the period of transaction should be taken into account to calculate the number of shares in weighted average.
In case of the earnings to be converted into capital increase, upon calculation of earnings per share (EPS) on an annual basis or on a semiannual basis in the past, it calls for retrospective adjustment pro rata to the ratio of capital increase without a need to take into account the period of issuance.
Where the preferred shares are non-convertible accumulated preferred shares, the dividend of that year (disregarding whether it was allocated) should be deducted from the net profit to should increase the net loss after tax. Where the preferred shares are attributed as not accumulated and where there is net profit after tax, the preferred share dividend should be deducted from the net profit after tax. It calls for no adjustment in case of a loss.

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Note 4: Key points for attention upon analysis of the cash flow:

Net cash flow in operating activities refers to the net cash inflow in the operating activities in the Table of Cash Flow.
Capital expenditure refers to cash outflow in the investment with investment every year.
Increase in inventory would be counted only when the ending balance exceeds the beginning balance and would be entered at zero in case of decrease in inventory at end of the year.
The cash dividend includes cash dividend of both common shares and preferred shares.
Gross fixed assets refer to the aggregate total of fixed assets before deducting accumulated depreciation.

Note 5: An issuer shall duly distinguish into fixed and variable ones based on attributes of the operating costs and operating expenses. In case of an involvement in estimation or subjective judgment, the issuer shall watch the rationality and assure consistency.

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(II) Financial Analyses for the last five years - Individual financial statement (International Financial Reporting Standards (IFRS))

Year Analyzed Item	Year Analyzed Item	Financial Information for thepast fiveyears	Financial Information for thepast fiveyears	Financial Information for thepast fiveyears	Financial Information for thepast fiveyears	Financial Information for thepast fiveyears
		2015	2016	2017	2018	2019
Capital Structure (%)	Liabilities to assets ratio(%)	14.83	14.19	14.16	12.20	10.30
	Long-term funds to property, plant and equipment ratio(%)	248.08	263.84	315.13	360.31	418.13
Liquidity (%)	Current ratio(%)	174.07	179.52	216.15	247.13	360.69
	Quick Ratio(%)	82.01	114.09	145.83	168.99	280.42
	Interest coverage ratio(times)	10,833.14	137,873.68	844,244.52	867,726.97	301,552.50
Operating ability	Accounts receivable turnover rate(times)	13.41	10.02	8.89	9.74	9.80
	Average days of accounts receivable(days)	27	36	41	37	37
	Inventoryturnover rate(times)	9.92	10.26	11.31	10.83	10.03
	Accounts payable turnover rate (times)	13.30	11.54	11.53	13.44	13.02
	Average days of sales(days)	36	35	32	33	36
	Property, plant and equipment turnover rate(times)	1.98	2.07	2.66	3.01	2.56
	Total assets turnover rate(times)	0.74	0.74	0.83	0.81	0.61
Profitability	Return on assets(%)	7.41	11.78	14.49	11.83	7.80
	Return on equity (%)	9.15	13.77	16.88	13.62	8.79
	Net gains before tax to paid-in capital ratio(%)	18.22	29.48	40.72	39.23	26.03
	Netgains ratio(%)	9.87	15.89	17.37	14.58	12.76
	Earningsper share($)	1.62	2.65	3.64	3.26	2.27
Cash flow	Cash flow ratio(%)	176.75	79.94	95.71	122.56	117.60
	Cash flow adequacyratio(%)	108.08	116.40	164.14	158.54	210.19
	Cash reinvestment ratio(%)	8.26	2.85	4.21	4.87	5.48
Leverage	Operatingleverage	2.37	2.22	1.62	1.91	2.68
	Financial leverage	1.01	1.00	1.00	1.00	1.00
State the changes in financial ratios over the past two years (2019 & 2018) up to over 20% and the reasons why: 1. The change in the current ratio increased by 46% over the preceding term, due primarily to the fact that the current assets increased by 18% over the preceding term while current liabilities decreased by 19% from the preceding term. 2. The quick ratio increased by 66% over the preceding term, due primarily to the fact that the quick assets increased by 34% over the preceding term while current liabilities decreased by 19% from the preceding term. 3. Interest coverage ratio (times) changed, with a decrease by 65% from the preceding term, due primarily to the fact that in the current term, the income tax and net profit before tax decreased by 34% from the preceding term and the interest expense increased by 91% over the preceding term. 4. The gross asset turnover rate decreased by 25% from the preceding term, due primarily to the fact that in the current term, the sales decreased by 20% from the preceding term and the total average assets increased by 6% over the preceding term. 5. Return on assets decreased by 34% from the preceding term, due primarily to the fact that in the current term, the profit and/or loss after tax decreased by 30% from the preceding term and the total average assets increased by 6% over the preceding term. 6. The return on equity decreased by 35% from the preceding term, due primarily to the fact that in the current term, the profit and/or loss after tax decreased by 30% from the preceding term and total average equity increased by 8% over the preceding term. 7. The ratio of net profit before tax to the paid-in capital decreased by 34% from the preceding term, due primarily to the fact that in the current term, the net profit before tax decreased by 34% from the preceding term. 8. The earnings per share (EPS) decreased by 30% from the preceding term, due primarily to the fact that in the current term, the net profit after tax decreased by 30% from the preceding term. 9. The cash flow adequacy ratio increased by 33% over the preceding term, due primarily to the fact that in the current term, the net cash flow in operating activities over the past five years increased by 9% over the preceding term and in the current term, the aggregate total of the capital expenditure, inventory increased over the past five years and the total cash dividend decreased by 18% from the preceding term. 10. The operating leverage changed, with an increase of 40% over the preceding term, due primarily to the fact that in the current term, the net operating revenue deducted with the variable operating costs and expenses decreased by 37% from theprecedingterm and the netprofit this term decreased by55% from theprecedingterm.

112

III. Audit Report of the Audit Committee for the Financial Statements in the most recent year

Grand Pacific Petrochemical Corporation Audit Committee’s Audit Report

The 2019 individual financial statement and consolidated financial statements prepared by the Board of Directors of the Company have been audited by CPAs Ying Chia Hsiao and Wu Chang Wang of Crowe Horwath International. The financial statements, business report and earnings distribution proposal have been audited by us as the audit committee of the Company. We deem these documents in comply with such relevant regulatory requirements as those of the Company Act etc. Therefore, this review report is presented in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act. Please review.

To:

The 2020 Annual Meeting of Shareholders of Grand Pacific Petrochemical Corporation

Convener of Audit Committee of Grand

Pacific Petrochemical Corporation

Wen Tzong Chen

April 28, 2020

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IV. The Financial Statements in the most recent year

Declaration on the Consolidated Financial Statement of Associated Enterprises

The entities that should be included in the compiled Consolidated Financial Statements of the Associated Enterprises of Grand Pacific Petrochemical Corporation as of and for the year ended December 31, 2019 under the “Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of the Associates” are identical to those that should be compiled in the Consolidated Financial Statements of Parent Company and Subsidiaries in accordance with International Financial Reporting Standard (IFRS) 10 endorsed and issued to take effect by Financial Supervisory Commission (FSC) and all the information that should be disclosed in the Consolidated Financial Statements of the Associated Enterprises has been disclosed in the Consolidated Financial Statement of Parent Company and Subsidiaries. Therefore, the Consolidated Financial Statement of Associated Enterprises is not prepared separately.

Please take note of the above declaration

Name of Company: Grand Pacific Petrochemical Corporation

Responsible person: Pin Cheng Yang

March 19, 2020

114

Grand Pacific Petrochemical Corporation and Its Subsidiaries

CPA Audit Report

To: the Board of Directors and Shareholders of Grand Pacific Petrochemical Corporation

Audit Opinions

We, as the CPAs, have completed the audit of the consolidated balance sheets dated December 31 of 2019 and 2018 and the consolidated comprehensive income statement, consolidated statement of changes in equity, consolidated statement of cash flows, and consolidated financial statement from January 1 to December 31 of 2019 and 2018, including summaries of major accounting policies of Grand Pacific Petrochemical Corporation and its subsidiaries.

As CPAs, according to the audit results from us and those from other CPAs (please refer to the paragraph about other matters), the above-mentioned consolidated financial statement, in all major respects, was prepared in compliance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and international financial reporting standards, international accounting standards, interpretations, and interpretation announcements approved and released to take effect by the Financial Supervisory Commission and hence are sufficient to show the consolidated financial standing of Grand Pacific Petrochemical Corporation and its subsidiaries as of December 31, 2019 and 2018 and the consolidated financial performance and consolidated cash flows between January 1 and December 31, 2019 and 2018.

Bases for the Audit Opinions

We followed the Rules Governing the Audit of Financial Statements by Certified Public Accountants and generally accepted auditing rules while performing the audit. The responsibilities of the CPAs under the said standards will be explained further in the section about responsibilities in auditing the consolidated financial statement. Independently governed staff in the accounting firm that the CPAs belong to have followed moral regulations in honor of the profession of CPA and have remained independent of the Grand Pacific Petrochemical Corporation and its subsidiaries and fulfilled other responsibilities under the said regulations. Based on the audit results from us and those from other CPAs, we believe that sufficient and adequate evidence has been obtained for the audit to serve as the basis for expressing the audit opinions.

Key Matters Being Audited

Key matters being audited refer to the most important matters based on the professional judgment of the CPAs to be included in the audit of the 2019 consolidated financial statement of Grand Pacific Petrochemical Corporation and its subsidiaries. Such matters were addressed throughout the audit of the consolidated financial statement and during the formation of audit opinions. The CPAs do not express separate opinions regarding these matters.

Key matters being audited of the 2019 consolidated financial statement of Grand Pacific Petrochemical Corporation and its subsidiaries are specified as follows:

Recognition of Income

Income is the basic operational activities for the sustainable management of an enterprise and concerns its operational performance and the management generally is faced with the pressure of fulfilling the expected financial or business performance goals. Therefore, it is pre-established that income recognition is associated with significant risk and we consider that the recognition of income from various types of transactions as one of the key matters being audited.

For the accounting policy on the recognition of income, please refer to Note 4 (33) of the consolidated financial statement. For information on accounting items for income, please refer to

115

the disclosure in Note 6 (36) of the consolidated financial statement. Major audit procedures that are already carried out by the CPAs for the above-mentioned matters are as follows:

Test the validity of income from various types of transactions and the internal control for the payment collection cycle in terms of its design and implementation and evaluate by random sampling if the recognition of income is adequate.
Understand the type of sale and items involved in the sale with Top 10 customers in respective transaction patterns and evaluate the legitimacy of the income and the number of days involved in the turnover of accounts receivable and analyze if there is any abnormal variation among the customers.
Select samples from transactions in the respective patterns that take place before and after the balance sheet date and verify them against related certificates in order to evaluate the accuracy of the timing when income is recognized.

Cash and cash equivalents

As of December 31, 2019, the book value of cash and cash equivalents and time deposits with the original expiration date more than three months away (under other financial assets - current in the statement) held by Grand Pacific Petrochemical Corporation and its subsidiaries totaled $7,072,611 thousand, accounting for around 22% of the consolidated total asset value. The value is significant for the overall consolidated financial statement. Due to the fact that congenital risk exists for cash and cash equivalents and time deposits and callable bonds with the original expiration date more than three months away, we list them as part of the key matters being audited. For the accounting policy on cash and cash equivalents, please refer to Note 4 (6) of the consolidated financial statement. For information on the accounting items for cash and cash equivalents and time deposits with the original expiration date more than three months away, please refer to the disclosure in Note 6 (1) and (8) of the consolidated financial statement. Major audit procedures that are already carried out by the CPAs for the above-mentioned matters are as follows:

Evaluate and test the validity of the internal control system for cash and cash equivalents and time deposits with the original expiration date more than three months away in terms of its design and implementation.
Randomly inspect and verify related transaction certificates for major income and payments in cash and review the adequacy of the approval power.
Obtain the statement of the balance of cash and cash equivalents and time deposits with the original expiration date more than three months away and verify against the bank reconciliation statement and related transaction certificates in order to confirm the presence. In addition, for external confirmations from current financial institutions, verify the value included in the confirmations and check if there are restrictions and they are adequately disclosed.

Impairment evaluation of real estate, plants, and equipment, right-of-use asset, investment-oriented property and intangible assets (including good will)

As of December 31, 2019, the book value of real estate, plants, and equipment, right-of-use asset, investment-oriented property and intangible assets owned by Grand Pacific Petrochemical Corporation and Its subsidiaries totaled $7,993,542 thousand, accounting for around 25% of the total consolidated asset value and the value is significant for the overall consolidated financial statement. In addition, the overall economic trends, market competition, and technical development can all affect the future operations of the company and accordingly affect the expected economic benefits and the recoverable amount that may be generated in the future by the cash generating units for the assets estimated and determined by the management in order to evaluate if impairment exists. Therefore, the evaluation of impairment of real estate, plants, and equipment, right-of-use asset, investment-oriented property and intangible assets (including goodwill) is listed by the CPAs as part of the key matters being audited.

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For the accounting policy on the impairment of real estate, plants, and equipment, right-of-use asset, investment-oriented property and intangible assets (including goodwill), refer to Notes 4 (17), (18) (20), (21), and (23). For information on accounting items for real estate, plants, and equipment, right-of-use asset, investment-oriented property and intangible assets (including goodwill), please refer to the disclosure in Note 6 (12), (13), (14) and (15) of the consolidated financial statement. Major audit procedures that are already carried out by the CPAs for the above-mentioned matters are as follows:

Obtain the asset impairment assessment form for respective cash generating units that have been evaluated spontaneously by the Company.
Evaluate the legitimacy of impairment signs identified by the management and the assumption and sensitivity adopted, including whether the differentiation of cash-generating units, forecast of cash flows, and discount rate are appropriate or not.
Ask the management and review audit evidence obtained from the subsequent audit procedure for verification of absence of any matter related to impairment testing after the reporting date.

Valuation of investment balance adopting the equity method

The investment balance of Grand Pacific Petrochemical Corporation and its subsidiaries as of December 31, 2019 adopting the equity method totaled $6,597,733 thousand, accounted for around 21% of the total consolidated asset value. The net comprehensive income recognized with the equity method came to $1,118,302 thousand, accounting for around 66% of the total consolidated income. The impacted value is significant to the overall consolidated financial statement. Therefore, the CPAs include valuation of investment balance adopting the equity method as part of the key matters being audited.

For the accounting policy on investments adopting the equity method, please refer to Note 4 (16) of the consolidated financial statement. For information on accounting items for investments adopting the equity method, please refer to the disclosure in Note 6 (11) of the consolidated financial statement. Major audit procedures that are already carried out by the CPAs for the above-mentioned matters are as follows:

Evaluate the accuracy of calculation during valuation adopting the equity method and the adopted accounting policy.
Read the financial statements of underlying entities and audit reports from other CPAs and review important findings and issues identified during audit to facilitate communication and understanding and accordingly evaluate the audit task performed by and audit results from other CPAs of underlying entities.
Evaluate the legitimacy of impairment signs of investments adopting the equity method as identified by the management and the assumption and sensitivity adopted, including whether or not the forecast of profitability of companies invested in it in the future or the discount rate is appropriate.

－ Other Matters Mentioning Audits by other CPAs

As is stated in Note 4 (3)-2 and Note 6 (11) of the consolidated financial statement, some subsidiaries in the consolidated financial statement of the Grand Pacific Petrochemical Corporation and its subsidiaries are included - K.K. Chemical Company Limited and KK Enterprise (Malaysia) － Sdn. Bhd. and investments adopting the equity method We did not audit the financial statements of the Zhenjiang Chimei Chemical Company Limited and Zhangzhou Chimei Chemical Company Limited; they were audited by other CPAs. Among the opinions we expressed on the above-mentioned consolidated financial statement, the amount listed in the above-mentioned financial statement of the Company and the above-mentioned information about the Company in Note 13 of the consolidated financial statement are completed based on audit reports from other CPAs. The total asset values of the said subsidiaries mentioned above as of December 31, 2019 and 2018, were $160,153 thousand and $153,815 thousand, accounting for 0.51% and 0.52% of the

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total consolidated asset value, respectively. The net worth of operating income from January 1 to December 31, 2019 and 2018, was $152,982 thousand and $172,584 thousand, accounting for 0.75% and 0.70% of the net worth of operating income, respectively. In addition, the related investment balance of invested companies adopting the equity method as mentioned above as of December 31, 2019 and 2018, was $6,597,733 thousand and $6,227,702 thousand, accounting for 20.95% and 20.86% of the total consolidated asset value, respectively. The net worth of comprehensive income from January 1 to December 31, 2019 and 2018, was $1,118,302 thousand and $639,422 thousand, accounting for 66.18% and 22.97% of the total consolidated comprehensive income, respectively.

Other Matters - Individual Financial Statement

Individual financial statements of 2019 and 2018 have been prepared by Grand Pacific Petrochemical Corporation and have been documented in the Audit Report without reservation in the opinions expressed issued by the CPAs; they are submitted for your reference.

Responsibilities of Management and Governance Unit for Consolidated Financial Statement

The management is responsible for preparing an adequately expressed consolidated financial statement in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and international financial reporting standards, international accounting standards, interpretations, and interpretation announcements approved and released to take effect by the Financial Supervisory Commission and maintaining necessary internal control relevant to the compilation of the consolidated financial statement in order to ensure that no significant untruthful expressions caused by frauds or errors exist in the consolidated financial statement.

While preparing the consolidated financial statement, the management is responsible for also evaluating the ability of Grand Pacific Petrochemical Corporation and its subsidiaries to continue with the operation and disclosing related matters and adopting the accounting basis for continued operation, among others. Unless the management intends to liquidate Grand Pacific Petrochemical Corporation and its subsidiaries or discontinue operation or there are no other actually feasible solutions than liquidation or discontinued operation.

The governance unit (including the Audit Committee) of Grand Pacific Petrochemical Corporation and its subsidiaries is responsible for supervising the financial reporting process.

Responsibilities of CPAs in Inspecting Consolidated Financial Statement

We audit the consolidated financial statement in order to be reasonably convinced as to whether the consolidated financial statement as a whole contains major untruthful expressions due to frauds or errors and to issue the audit report. Reasonably convinced is highly convinced. There is no guarantee, however, that the existence of significant untruthful expressions in the consolidated financial statement will be detected according to generally accepted auditing standards. Untruthful expressions might have been caused by frauds or errors. If individual values or an overview of untruthful expressions can be reasonably expected to affect economic decisions made by users of the consolidated financial statement, they are considered significant.

We apply our professional judgment and keep our professional doubts while performing the audit according to generally accepted auditing standards. The CPAs also perform the following tasks:

Identify and evaluate the risk of significant untruthful expressions in the consolidated financial statement due to frauds or errors, design and enforce appropriate responsive policies for determined risks; and collect sufficient and adequate evidence from the audit in order to render audit opinions. Due to the fact that frauds might involve collusion, forgery, intentional omission, untruthful statement, or non-compliance with internal control, the risk associated

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with undetected significant untruthful expressions caused by frauds is higher than that caused by errors.

Obtain a necessary understanding of internal control concerning the audit in order to design appropriate audit procedures reflective of then-current situation. The purpose, however, is not to effectively express opinions on the internal control of Grand Pacific Petrochemical Corporation.
Evaluate the adequacy of accounting policies adopted by the management and the legitimacy of accounting estimates and related disclosures made.
Reach a conclusion with regard to the adequacy of the accounting basis adopted to continue with operation by the management and whether significant uncertainties of events or conditions that might result in significant concerns about the ability of Grand Pacific Petrochemical Corporation and its subsidiaries to continue with operation exist or not according to the evidence obtained from the audit. In the event that it is determined that significant uncertainties exist with such events or conditions, on the other hand, the CPAs must remind users of the consolidated financial statement in their audit report that they should pay attention to related disclosures included in the statement or modify their audit opinions if such disclosures are inappropriate. Conclusions made by the CPAs are based on the evidence from the audit obtained as of the date of the audit report. Future events or conditions, however, are likely to result in Grand Pacific Petrochemical Corporation and its subsidiaries no longer capable of continuing with operation.
Evaluate the overall expression, structure, and contents of the consolidated financial statement (including related notes) and whether or not the consolidated financial statement has fairly expressed related transactions and events.
Obtain sufficient and adequate evidence from the audit regarding the financial information of entities comprising Grand Pacific Petrochemical Corporation and its subsidiaries and express opinions about the consolidated financial statement. The CPAs are responsible for providing guidance on, supervising and implementing audits and for coming up with audit opinions for the Group.

Communications made by the CPAs with governance units include the planned scope and timing of the audit and significant audit findings (including significant deficiencies found with internal control during the audit).

The CPAs have also provided the governance units with the declaration on independence that independently governed staff in the accounting firm that the CPAs belong to have followed moral regulations in honor of the profession of CPA and have communicated with the governance units all relationships and other matters considered to be likely undermining the independence of CPAs (including related safeguard measures).

The CPAs, from the matters communicated with the governance units, decided key matters to be included in the 2019 consolidated financial statement audit of Grand Pacific Petrochemical Corporation and its subsidiaries. The CPAs specify such matters in the audit report unless it is disallowed by law to disclose to the public specific matters or under rare circumstances, the CPAs decide not to communicate specific matters in the audit report as it can be reasonably expected that negative impacts from such communication would be greater than the public interest that will be enhanced.

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Crowe Horwath International CPA Ying Chia Hsiao CPA Wu Chang Wang

Approval document number: FSC Review No. 10200032833 March 19, 2020

Notice to Readers

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

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

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Grand Pacific Petrochemical Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS For the years ended December 31, 2019 and 2018

	Grand Pacific Petrochemical Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS For the years ended December 31, 2019 and 2018	Grand Pacific Petrochemical Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS For the years ended December 31, 2019 and 2018	Grand Pacific Petrochemical Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS For the years ended December 31, 2019 and 2018	Grand Pacific Petrochemical Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS For the years ended December 31, 2019 and 2018	Grand Pacific Petrochemical Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS For the years ended December 31, 2019 and 2018
Codes	Expressed in Thousands of New Taiwan Dollars December 31, 2019 December 31, 2018 Assets Amount % Amount % Current assets $11,627,999 37 $10,852,015 36 Cash & cash equivalents 3,403,383 11 2,729,454 9 Financial assets at fair value through profit or loss - current 172,216 1 39,020 - Contract assets - current 27,487 - 60,364 - Net notes receivable 361,582 1 394,217 1 Net accounts receivable 2,059,672 7 2,606,345 9 Accounts receivable - related parties 1,271 - 735 - Other receivables 63,705 - 81,641 - Current income tax assets 1,198 - 310 - Net inventories 1,673,157 5 1,980,783 7 Prepayments 73,083 - 93,541 - Other financial assets - current 3,717,691 12 2,698,945 9 Other current assets - other 73,554 - 166,660 1 Noncurrent assets 19,858,408 63 19,007,886 64 Financial assets at fair value through other comprehensive income - noncurrent 4,488,921 14 4,220,226 14 Investments accounted for using equity method 6,597,733 21 6,227,702 21 Property, plant and equipment 6,807,341 22 7,427,473 25 Right-of-use assets 433,249 1 - - Investment property, net 78,882 - 79,843 - Intangible assets 674,070 2 674,070 3 Deferred income tax assets 55,493 - 49,358 - Refundable deposits 16,444 - 16,664 - Advance payment for investment 478,169 2 - - Long-term prepaid rent - - 9,130 - Other noncurrent assets - other 228,106 1 303,420 1 Total assets $31,486,407 100 $29,859,901 100
		Amount	%	Amount	%
11xx 1100 1110 1140 1150 1170 1180 1200 1220 1310 1410 1476 1479 15xx 1517 1550 1600 1755 1760 1780 1840 1920 1960 1985 1990 1xxx	Current assets Cash & cash equivalents Financial assets at fair value through profit or loss - current Contract assets - current Net notes receivable Net accounts receivable Accounts receivable - related parties Other receivables Current income tax assets Net inventories Prepayments Other financial assets - current Other current assets - other Noncurrent assets Financial assets at fair value through other comprehensive income - noncurrent Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Intangible assets Deferred income tax assets Refundable deposits Advance payment for investment Long-term prepaid rent Other noncurrent assets - other Total assets	$11,627,999	37	$10,852,015	36
		3,403,383 172,216 27,487 361,582 2,059,672 1,271 63,705 1,198 1,673,157 73,083 3,717,691 73,554	11 1 - 1 7 - - - 5 - 12 -	2,729,454 39,020 60,364 394,217 2,606,345 735 81,641 310 1,980,783 93,541 2,698,945 166,660	9 - - 1 9 - - - 7 - 9 1
		19,858,408	63	19,007,886	64
		4,488,921 6,597,733 6,807,341 433,249 78,882 674,070 55,493 16,444 478,169 - 228,106	14 21 22 1 - 2 - - 2 - 1	4,220,226 6,227,702 7,427,473 - 79,843 674,070 49,358 16,664 - 9,130 303,420	14 21 25 - - 3 - - - - 1
		$31,486,407	100	$29,859,901	100

(Continued on the next page)

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Grand Pacific Petrochemical Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS

For the years ended December 31, 2019 and 2018

Codes	Liabilities and Equity	Expressed in Thousands of New Taiwan Dollars December 31,2019 December 31,2018 Amount % Amount % $2,519,453 8 $2,877,053 9 20,953 - 2,833 - 43,718 - 43,819 - 81,864 - 78,620 - 1,567,747 5 1,470,375 5 490,583 2 669,260 2 217,374 1 586,361 2 17,576 - 17,015 - 73,386 - - - 155 - 152 - - - 1,944 - 6,097 - 6,674 - 1,734,877 5 1,361,874 5 10,175 - 8,486 - 1,255,837 4 1,249,285 5 354,647 1 - - - - 991 - 85,035 - 74,157 - 5,643 - 4,962 - 23,540 - 23,993 - 4,254,330 13 4,238,927 14 9,266,203 30 9,266,203 31 9,066,203 29 9,066,203 30 200,000 1 200,000 1 181,698 - 180,533 1 14,695,878 47 12,608,192 42 1,790,463 6 1,494,452 5 1,640,828 5 1,640,828 5 11,264,587 36 9,472,912 32 280,466 1 739,639 2 ( 521,982) ( 2) ( 206,080) ( 1) 802,448 3 945,719 3 (55,577) - (55,577) - 24,368,668 78 22,738,990 76 2,863,409 9 2,881,984 10 27,232,077 87 25,620,974 86 $31,486,407 100 $29,859,901 100	Expressed in Thousands of New Taiwan Dollars December 31,2019 December 31,2018 Amount % Amount % $2,519,453 8 $2,877,053 9 20,953 - 2,833 - 43,718 - 43,819 - 81,864 - 78,620 - 1,567,747 5 1,470,375 5 490,583 2 669,260 2 217,374 1 586,361 2 17,576 - 17,015 - 73,386 - - - 155 - 152 - - - 1,944 - 6,097 - 6,674 - 1,734,877 5 1,361,874 5 10,175 - 8,486 - 1,255,837 4 1,249,285 5 354,647 1 - - - - 991 - 85,035 - 74,157 - 5,643 - 4,962 - 23,540 - 23,993 - 4,254,330 13 4,238,927 14 9,266,203 30 9,266,203 31 9,066,203 29 9,066,203 30 200,000 1 200,000 1 181,698 - 180,533 1 14,695,878 47 12,608,192 42 1,790,463 6 1,494,452 5 1,640,828 5 1,640,828 5 11,264,587 36 9,472,912 32 280,466 1 739,639 2 ( 521,982) ( 2) ( 206,080) ( 1) 802,448 3 945,719 3 (55,577) - (55,577) - 24,368,668 78 22,738,990 76 2,863,409 9 2,881,984 10 27,232,077 87 25,620,974 86 $31,486,407 100 $29,859,901 100	Expressed in Thousands of New Taiwan Dollars December 31,2019 December 31,2018 Amount % Amount % $2,519,453 8 $2,877,053 9 20,953 - 2,833 - 43,718 - 43,819 - 81,864 - 78,620 - 1,567,747 5 1,470,375 5 490,583 2 669,260 2 217,374 1 586,361 2 17,576 - 17,015 - 73,386 - - - 155 - 152 - - - 1,944 - 6,097 - 6,674 - 1,734,877 5 1,361,874 5 10,175 - 8,486 - 1,255,837 4 1,249,285 5 354,647 1 - - - - 991 - 85,035 - 74,157 - 5,643 - 4,962 - 23,540 - 23,993 - 4,254,330 13 4,238,927 14 9,266,203 30 9,266,203 31 9,066,203 29 9,066,203 30 200,000 1 200,000 1 181,698 - 180,533 1 14,695,878 47 12,608,192 42 1,790,463 6 1,494,452 5 1,640,828 5 1,640,828 5 11,264,587 36 9,472,912 32 280,466 1 739,639 2 ( 521,982) ( 2) ( 206,080) ( 1) 802,448 3 945,719 3 (55,577) - (55,577) - 24,368,668 78 22,738,990 76 2,863,409 9 2,881,984 10 27,232,077 87 25,620,974 86 $31,486,407 100 $29,859,901 100	Expressed in Thousands of New Taiwan Dollars December 31,2019 December 31,2018 Amount % Amount % $2,519,453 8 $2,877,053 9 20,953 - 2,833 - 43,718 - 43,819 - 81,864 - 78,620 - 1,567,747 5 1,470,375 5 490,583 2 669,260 2 217,374 1 586,361 2 17,576 - 17,015 - 73,386 - - - 155 - 152 - - - 1,944 - 6,097 - 6,674 - 1,734,877 5 1,361,874 5 10,175 - 8,486 - 1,255,837 4 1,249,285 5 354,647 1 - - - - 991 - 85,035 - 74,157 - 5,643 - 4,962 - 23,540 - 23,993 - 4,254,330 13 4,238,927 14 9,266,203 30 9,266,203 31 9,066,203 29 9,066,203 30 200,000 1 200,000 1 181,698 - 180,533 1 14,695,878 47 12,608,192 42 1,790,463 6 1,494,452 5 1,640,828 5 1,640,828 5 11,264,587 36 9,472,912 32 280,466 1 739,639 2 ( 521,982) ( 2) ( 206,080) ( 1) 802,448 3 945,719 3 (55,577) - (55,577) - 24,368,668 78 22,738,990 76 2,863,409 9 2,881,984 10 27,232,077 87 25,620,974 86 $31,486,407 100 $29,859,901 100
		Amount	%	Amount	%
21xx 2100 2130 2150 2170 2200 2230 2250 2280 2310 2355 2399 25xx 2550 2570 2580 2613 2640 2645 2670 2xxx 31xx 3100 3110 3120 3200 3300 3310 3320 3350 3400 3410 3420 3400 31xx 36xx 3xxx 3x2x	Current liabilities Short-term loans Contract liabilities- current Notes payable Accounts payable Other receivables Current income tax liabilities Provisions - current Lease liabilities - current Advances receipts Rent payable - current Other current liabilities - other Noncurrent liabilities Provisions - noncurrent Deferred income tax liabilities Lease liabilities - noncurrent Rent payable - noncurrent Net defined benefit liabilities - noncurrent Guarantee deposits received Other noncurrent liabilities - other Total liabilities Equity attributable to owners of the parent company Share capital Common shares capital Preferred shares capital Capital reserve Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Exchange differences on translating financial statements of foreign operations Unrealized gain/loss of financial assets at fair value through other comprehensive income Treasury stocks Total equity attributable to owners of the parent company Non-controlling interests Total equity Total liabilities and equity	$2,519,453	8	$2,877,053	9
		20,953 43,718 81,864 1,567,747 490,583 217,374 17,576 73,386 155 - 6,097	- - - 5 2 1 - - - - -	2,833 43,819 78,620 1,470,375 669,260 586,361 17,015 - 152 1,944 6,674	- - - 5 2 2 - - - - -
		1,734,877	5	1,361,874	5
		10,175 1,255,837 354,647 - 85,035 5,643 23,540	- 4 1 - - - -	8,486 1,249,285 - 991 74,157 4,962 23,993	- 5 - - - - -
		4,254,330	13	4,238,927	14
		9,266,203	30	9,266,203	31
		9,066,203 200,000	29 1	9,066,203 200,000	30 1
		181,698	-	180,533	1
		14,695,878	47	12,608,192	42
		1,790,463 1,640,828 11,264,587	6 5 36	1,494,452 1,640,828 9,472,912	5 5 32
		280,466	1	739,639	2
		( 521,982) 802,448	( 2) 3	( 206,080) 945,719	( 1) 3
		(55,577)	-	(55,577)	-
		24,368,668	78	22,738,990	76
		2,863,409	9	2,881,984	10
		27,232,077	87	25,620,974	86
		$31,486,407	100	$29,859,901	100

(Please refer to the Notes to consolidated financial statement)

Chairman of Board: Pin Cheng Yang Manager: Chia Hsiung Tseng

Chief Accountant: Ling Chu Chen

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Grand Pacific Petrochemical Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2019 and 2018

Codes	Items	Expressed in Thousands of New Taiwan Dollars Year Ended December 31, 2019 Year Ended December 31, 2018 Amount % Amount % $20,468,229 100 $24,741,138 100 (17,829,140) (87) (20,685,790) (84) 2,639,089 13 4,055,348 16 (1,268,878) (6) (1,316,510) (5) (304,316) (1) (302,890) (1) (933,470) (5) (979,786) (4) (32,968) - (38,935) - 1,876 - 5,101 - 1,370,211 7 2,738,838 11 196,159 1 268,869 1 (41,971) - 62,661 - (5,990) - (1,835) - 1,222,468 6 988,415 4 1,370,666 7 1,318,110 5 2,740,877 14 4,056,948 16 (564,666) (3) (906,207) (4) 2,176,211 11 3,150,741 12 (146,408) (1) (280,712) (1) (19,908) - 1,822 - 5,283 - 2,158 - (161,033) (1) (276,732) (1) (229,109) (1) 223,298 1 (104,166) (1) (348,993) (1) 7,841 - 34,990 - (325,434) (2) (90,705) - (486,467) (3) (367,437) (1) $1,689,744 8 $2,783,304 11 $2,070,125 10 $2,960,106 12 106,086 1 190,635 - $2,176,211 11 $3,150,741 12 $1,640,513 8 $2,633,570 11 49,231 - 149,734 - $1,689,744 8 $2,783,304 11 $2.27 $3.26 $2.27 $3.25	Expressed in Thousands of New Taiwan Dollars Year Ended December 31, 2019 Year Ended December 31, 2018 Amount % Amount % $20,468,229 100 $24,741,138 100 (17,829,140) (87) (20,685,790) (84) 2,639,089 13 4,055,348 16 (1,268,878) (6) (1,316,510) (5) (304,316) (1) (302,890) (1) (933,470) (5) (979,786) (4) (32,968) - (38,935) - 1,876 - 5,101 - 1,370,211 7 2,738,838 11 196,159 1 268,869 1 (41,971) - 62,661 - (5,990) - (1,835) - 1,222,468 6 988,415 4 1,370,666 7 1,318,110 5 2,740,877 14 4,056,948 16 (564,666) (3) (906,207) (4) 2,176,211 11 3,150,741 12 (146,408) (1) (280,712) (1) (19,908) - 1,822 - 5,283 - 2,158 - (161,033) (1) (276,732) (1) (229,109) (1) 223,298 1 (104,166) (1) (348,993) (1) 7,841 - 34,990 - (325,434) (2) (90,705) - (486,467) (3) (367,437) (1) $1,689,744 8 $2,783,304 11 $2,070,125 10 $2,960,106 12 106,086 1 190,635 - $2,176,211 11 $3,150,741 12 $1,640,513 8 $2,633,570 11 49,231 - 149,734 - $1,689,744 8 $2,783,304 11 $2.27 $3.26 $2.27 $3.25	Expressed in Thousands of New Taiwan Dollars Year Ended December 31, 2019 Year Ended December 31, 2018 Amount % Amount % $20,468,229 100 $24,741,138 100 (17,829,140) (87) (20,685,790) (84) 2,639,089 13 4,055,348 16 (1,268,878) (6) (1,316,510) (5) (304,316) (1) (302,890) (1) (933,470) (5) (979,786) (4) (32,968) - (38,935) - 1,876 - 5,101 - 1,370,211 7 2,738,838 11 196,159 1 268,869 1 (41,971) - 62,661 - (5,990) - (1,835) - 1,222,468 6 988,415 4 1,370,666 7 1,318,110 5 2,740,877 14 4,056,948 16 (564,666) (3) (906,207) (4) 2,176,211 11 3,150,741 12 (146,408) (1) (280,712) (1) (19,908) - 1,822 - 5,283 - 2,158 - (161,033) (1) (276,732) (1) (229,109) (1) 223,298 1 (104,166) (1) (348,993) (1) 7,841 - 34,990 - (325,434) (2) (90,705) - (486,467) (3) (367,437) (1) $1,689,744 8 $2,783,304 11 $2,070,125 10 $2,960,106 12 106,086 1 190,635 - $2,176,211 11 $3,150,741 12 $1,640,513 8 $2,633,570 11 49,231 - 149,734 - $1,689,744 8 $2,783,304 11 $2.27 $3.26 $2.27 $3.25	Expressed in Thousands of New Taiwan Dollars Year Ended December 31, 2019 Year Ended December 31, 2018 Amount % Amount % $20,468,229 100 $24,741,138 100 (17,829,140) (87) (20,685,790) (84) 2,639,089 13 4,055,348 16 (1,268,878) (6) (1,316,510) (5) (304,316) (1) (302,890) (1) (933,470) (5) (979,786) (4) (32,968) - (38,935) - 1,876 - 5,101 - 1,370,211 7 2,738,838 11 196,159 1 268,869 1 (41,971) - 62,661 - (5,990) - (1,835) - 1,222,468 6 988,415 4 1,370,666 7 1,318,110 5 2,740,877 14 4,056,948 16 (564,666) (3) (906,207) (4) 2,176,211 11 3,150,741 12 (146,408) (1) (280,712) (1) (19,908) - 1,822 - 5,283 - 2,158 - (161,033) (1) (276,732) (1) (229,109) (1) 223,298 1 (104,166) (1) (348,993) (1) 7,841 - 34,990 - (325,434) (2) (90,705) - (486,467) (3) (367,437) (1) $1,689,744 8 $2,783,304 11 $2,070,125 10 $2,960,106 12 106,086 1 190,635 - $2,176,211 11 $3,150,741 12 $1,640,513 8 $2,633,570 11 49,231 - 149,734 - $1,689,744 8 $2,783,304 11 $2.27 $3.26 $2.27 $3.25
		Amount	%	Amount	%
4000 5000 5900 6000 6100 6200 6300 6450 6900 7010 7020 7050 7060 7000 7900 7950 8200 8316 8311 8349 8310 8361 8370 8399 8360 8300 8500 8600 8610 8620 8700 8710 8720 9750 9850	Operating revenues Operating costs Gross operating profit Operating expenses Selling expenses Administrative expenses Research and development expenses Reversal gain of expected impairment in credit Net operating Income Non-operating revenues and expenses Other revenues Other gains and losses Finance costs Share of profit or loss of associates & joint ventures accounted for using equity method Total non-operating revenues and expenses Net profit before tax from continuing operations unit Income tax expenses Net profit for the year Other comprehensive income Items that will not be reclassified subsequently to profit or loss Unrealized valuation gain/loss of investment in equity instrument at fair value through other comprehensive income Remeasurements of the defined benefit plan Income tax related to items that will not be reclassified subsequently Total Items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Exchange differences on translating financial statements of foreign operations Share of other comprehensive income of associates & joint ventures accounted for using equity method - Items that may be reclassified to profit or loss Income tax related to items that may be reclassified subsequently Items that may be reclassified subsequently to profit or loss Current other comprehensive income(net after tax) Total amount of comprehensive income for the year Net income attributable to: Owners of the parent company Non-controlling interests Total amount of comprehensive income attributable to: Owners of the parent company Non-controlling interests Earnings per share in common shares: (NT$) Basic earnings per share Diluted earnings per share	$20,468,229 (17,829,140)	100 (87)	$24,741,138 (20,685,790)	100 (84)
		2,639,089	13	4,055,348	16
		(1,268,878)	(6)	(1,316,510)	(5)
		(304,316) (933,470) (32,968) 1,876	(1) (5) - -	(302,890) (979,786) (38,935) 5,101	(1) (4) - -
		1,370,211	7	2,738,838	11
		196,159 (41,971) (5,990) 1,222,468	1 - - 6	268,869 62,661 (1,835) 988,415	1 - - 4
		1,370,666	7	1,318,110	5
		2,740,877 (564,666)	14 (3)	4,056,948 (906,207)	16 (4)
		2,176,211	11	3,150,741	12
		(146,408) (19,908) 5,283	(1) - -	(280,712) 1,822 2,158	(1) - -
		(161,033)	(1)	(276,732)	(1)
		(229,109) (104,166) 7,841	(1) (1) -	223,298 (348,993) 34,990	1 (1) -
		(325,434)	(2)	(90,705)	-
		(486,467)	(3)	(367,437)	(1)
		$1,689,744	8	$2,783,304	11
		$2,070,125 106,086	10 1	$2,960,106 190,635	12 -
		$2,176,211	11	$3,150,741	12
		$1,640,513 49,231	8 -	$2,633,570 149,734	11 -
		$1,689,744	8	$2,783,304	11
		$2.27		$3.26
		$2.27		$3.25

(Please refer to the Notes to consolidated financial statement)

Chairman of Board: Pin Cheng Yang Manager: Chia Hsiung Tseng

Chief Accountant: Ling Chu Chen

123

Grand Pacific Petrochemical Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2019 and 2018

Codes	Items	Share capital	Share capital	Capital reserve	Retained earnings	Retained earnings	Retained earnings		Other equity		Expressed in Thousands of New Taiwan Dollars Treasury stocks Equity attributable to owners of the parent Non-controllin g interestsTotal equity ($122,170) $20,718,147 $2,765,917 $23,484,064 - 226,213 12,745 238,958 - - - - - - - - - (906,620) (46,416) (953,036) - (32,000) - (32,000) - 1,725 - 1,725 66,593 94,859 - 94,859 - 3,089 - 3,089 - 7 4 11 - 2,960,106 190,635 3,150,741 - (326,536) (40,901) (367,437) ($55,577) $22,738,990 $2,881,984 $25,620,974 ($55,577) $22,738,990 $2,881,984 $25,620,974 - - - - - - (53,924) (53,924)	Expressed in Thousands of New Taiwan Dollars Treasury stocks Equity attributable to owners of the parent Non-controllin g interestsTotal equity ($122,170) $20,718,147 $2,765,917 $23,484,064 - 226,213 12,745 238,958 - - - - - - - - - (906,620) (46,416) (953,036) - (32,000) - (32,000) - 1,725 - 1,725 66,593 94,859 - 94,859 - 3,089 - 3,089 - 7 4 11 - 2,960,106 190,635 3,150,741 - (326,536) (40,901) (367,437) ($55,577) $22,738,990 $2,881,984 $25,620,974 ($55,577) $22,738,990 $2,881,984 $25,620,974 - - - - - - (53,924) (53,924)	Expressed in Thousands of New Taiwan Dollars Treasury stocks Equity attributable to owners of the parent Non-controllin g interestsTotal equity ($122,170) $20,718,147 $2,765,917 $23,484,064 - 226,213 12,745 238,958 - - - - - - - - - (906,620) (46,416) (953,036) - (32,000) - (32,000) - 1,725 - 1,725 66,593 94,859 - 94,859 - 3,089 - 3,089 - 7 4 11 - 2,960,106 190,635 3,150,741 - (326,536) (40,901) (367,437) ($55,577) $22,738,990 $2,881,984 $25,620,974 ($55,577) $22,738,990 $2,881,984 $25,620,974 - - - - - - (53,924) (53,924)	Expressed in Thousands of New Taiwan Dollars Treasury stocks Equity attributable to owners of the parent Non-controllin g interestsTotal equity ($122,170) $20,718,147 $2,765,917 $23,484,064 - 226,213 12,745 238,958 - - - - - - - - - (906,620) (46,416) (953,036) - (32,000) - (32,000) - 1,725 - 1,725 66,593 94,859 - 94,859 - 3,089 - 3,089 - 7 4 11 - 2,960,106 190,635 3,150,741 - (326,536) (40,901) (367,437) ($55,577) $22,738,990 $2,881,984 $25,620,974 ($55,577) $22,738,990 $2,881,984 $25,620,974 - - - - - - (53,924) (53,924)
		Common shares capital	Preferred shares capital		Legal reserve	Special reserve	Unappropri ated earnings	Exchange differences on translating financial statements of foreign operations	Unrealized gain/loss of financial assets at fair value through other comprehensive income	Unrealized gain/loss on available-fo r-sale Financial Assets
A1 A3 B1 B17 B5 B7 C17 L7 M1 M7 D1 D3 Z1 A1 B1 B5	Balance at January 1, 2018 Effects of retrospective application and retrospective reclassification Appropriation & distribution of earnings for fiscal year 2017: Provision of legal reserve Reversal of special reserve Cash dividends to common shares Cash dividends and stock dividends to preferred shares Dividend unclaimed within the term by shareholders Parent company’s stocks disposed of by a subsidiary deemed as transaction in treasury stocks Adjustment to capital surplus for distribution of dividends to subsidiaries Changes in the share of equities of subsidiaries Net profit for the year ended December 31, 2018 Other comprehensive income after tax for the year ended December 31, 2018 Balance at December 31, 2018 Balance at January 1, 2019 Appropriation & distribution of earnings for fiscal year 2018: Provision of legal reserve Cash dividends to common	$9,066,203 - - - - - - - - - - -	$200,000 - - - - - - - - - - -	$147,446 - - - - - 1,725 28,266 3,089 7 - -	$1,165,588 - 328,864 - - - - - - - - -	$1,658,208 - - (17,380) - - - - - - - -	$7,715,000 42,398 (328,864) 17,380 (906,620) (32,000) - - - - 2,960,106 5,512	($119,538) - - - - - - - - - - (86,542)	$ - 1,191,225 - - - - - - - - - (245,506)	$1,007,410 (1,007,410) - - - - - - - - - -	($122,170) - - - - - - 66,593 - - - -	$20,718,147 226,213 - - (906,620) (32,000) 1,725 94,859 3,089 7 2,960,106 (326,536)	$2,765,917 12,745 - - (46,416) - - - - 4 190,635 (40,901)	$23,484,064 238,958 - - (953,036) (32,000) 1,725 94,859 3,089 11 3,150,741 (367,437)
		$9,066,203	$200,000	$180,533	$1,494,452	$1,640,828	$9,472,912	($206,080)	$945,719	$-	($55,577)	$22,738,990	$2,881,984	$25,620,974
		$9,066,203 - -	$200,000 - -	$180,533 - -	$1,494,452 296,011 -	$1,640,828 - -	$9,472,912 (296,011) -	($206,080) - -	$945,719 - -	$ - - -	($55,577) - -	$22,738,990 - -	$2,881,984 - (53,924)	$25,620,974 - (53,924)

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shares B7 Cash dividends and stock dividends to preferred shares M1 Adjustment to capital surplus for distribution of dividends to subsidiary M7 Change in equity to subsidiaries D1 Net profit for the year ended December 31, 2019 D3 Other comprehensive income after tax for the year ended December 31, 2019 Q1 Disposal of subsidiaries under equity instrument at fair value through other comprehensive income O1 Changes in non-controlling interests Z1 Balance at December 31, 2019	- - - - - - -	- - - - - - -	- 1,066 99 - - - -	- - - - - - -	- - - - - - -	(12,000) - - 2,070,125 (15,783) 45,344 -	- - - - (315,902) - -	- - - - (97,927) (45,344) -	- - - - - - -	- - - - - - -	(12,000) 1,066 99 2,070,125 (429,612) - -	- (12,000) - 1,066 (99) - 106,086 2,176,211 (56,855) (486,467) - - (13,783) (13,783)
	$9,066,203	$200,000	$181,698	$1,790,463	$1,640,828	$11,264,587	($521,982)	$802,448	$-	($55,577)	$24,368,668	$2,863,409 $27,232,077

(Please refer to the Notes to consolidated financial statement)

Chairman of Board: Pin Cheng Yang

Manager: Chia Hsiung Tseng

Chief Accountant: Ling Chu Chen

125

Grand Pacific Petrochemical Corporation and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2019 and 2018

Codes	Items	Items
AAAA A00010 A20000 A20010 A20100 A20200 A20400 A20900 A21200 A21300 A22300 A22500 A22600 A23100 A23700 A20010 A30000 A31115 A31125 A31130 A31150 A31160 A31180 A31200 A31230 A31240 A32125 A32130 A32150 A32180 A32200 A32210 A32230 A32240 A30000 A33000 A33100 A33200 A33300 A33500 AAAA	$2,740,877	$4,056,948
	948,344 731,652 (214) 5,990 (102,121) (62,747) (1,222,468) (429) 17,451 (1,399) 8,496	856,561 741,235 (20) 1,835 (67,249) (156,062) (988,415) 943 46,031 (94) 10,007
	322,555	444,772
	(131,583) 32,877 32,635 546,673 (536) 11,354 307,626 20,468 - (101) 3,244 97,372 (163,826) 2,250 3 (577) (9,030)	(38,906) (60,364) (1,969) 253,314 (735) (13,447) 42,383 (5,843) 66 (111) 3,759 (399,282) 36,627 1,485 28 (41,137) (11,824)
	748,849	(235,956)
	3,812,281 108,703 62,747 (5,976) (920,977)	4,265,764 52,480 964,327 (1,835) (704,381)
	3,056,778	4,576,355

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(Brought Forward)

BBBB CASH FLOWS FROM INVESTING ACTIVITIES: B00010 Acquisition of financial assets at fair value through other comprehensive income B00020 Disposal of financial assets at fair value through other comprehensive income B00030 Capital allocation of financial assets at fair value through other comprehensive income B01800 Acquisition of investment accounted for using equity method B02200 Acquisition of net cash inflow from subsidiaries B02700 Acquisition of property, plants and equipment B02800 Disposal of property, plant and equipment B03800 Decrease in refundable deposits B06500 Increase in other financial assets B07100 Increase in prepayment of equipment B06700 Increase in other noncurrent assets BBBB Net cash used in investing activities CCCC CASH FLOWS FROM FINANCING ACTIVITIES: C00200 Increase (decrease) in short-term loans C03000 Increase in guarantee deposits received C04000 Decrease in rent payable C04020 Repayment of principal of lease liabilities C04500 Payout of cash dividends C05000 Disposal of treasury stocks C09900 Return of dividend unclaimed within the term back to capital reserve C09900 Cash dividends obtained by subsidiaries from the parent company C09900 Cash dividend distributed by a subsidiary toward non-controlling interests C09900 Capital decrease sum paid by a subsidiary in cash toward non-controlling interests C09900 Subscription in non-control interests of the subsidiaries through capital increase in cash CCCC Net cash used in financing activities DDDD Effect of exchange rate changes on cash and cash equivalents EEEE Net increase in cash and cash equivalents for the year E00100 Cash and cash equivalents, beginning of year E00200 Cash and cash equivalents, end of year E00210 Cash & cash equivalents recorded in consolidated balance sheets	(621,497) 124,560 74,041 - 4,840 (294,393) 2,666 220 (1,018,746) - (568,081)	(236,237) - 9,585 (716,901) - (535,792) 241 425 (1,022,925) - (570,697)
	(2,296,390)	(3,072,301)
	18,120 681 - (72,487) (12,000) - - 1,066 (53,924) (63,656) 45,000	(34,748) 3,542 (2,776) - (938,620) 94,859 1,736 3,089 (46,416) (17,626) -
	(137,200)	(936,960)
	50,741	39,607
	673,929 2,729,454	606,701 2,122,753
	$3,403,383	$2,729,454
	$3,403,383	$2,729,454

(Please refer to the Notes to consolidated financial statement)

Chairman of Board: Pin Cheng Yang Manager: Chia Hsiung Tseng

Chief Accountant: Ling Chu Chen

127

Grand Pacific Petrochemical Corporation and Subsidiaries Notes to Consolidated Financial Statements

For the Years Ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars, unless otherwise specified)

1. Company history

Grand Pacific Petrochemical Corporation (hereinafter referred to as the Company) was officially incorporated on September 25, 1973 in accordance with the Company Act and other laws and ordinances concerned and was formerly known as Delta Petrochemical Corporation until rechristened Grand Pacific Petrochemical Corporation in 1985. The Company primarily engages in the business lines as below:

(1) Petrochemical Manufacturing
(2) Synthetic Resin & Plastic Manufacturing
(3) Other Chemical Products Manufacturing
(4) Steam and Electricity Paragenesis, Heat Energy Supplying and international trade
(5) All business items that are not prohibited or restricted by law, except those that are subject to special approval

The Company's plants are located in Da-She District, Kaohsiung City, Taiwan.

The Company's stocks were officially listed on Taiwan Stock Exchange Corporation (TWEC) starting from December 21, 1988.

The Company is free of the ultimate parent company.

The Company takes New Taiwan Dollars as its functional currency. While the Company is a public company listed in Taiwan, the consolidated financial statements are expressed in New Taiwan Dollars to bring added comparison and consistency.

Except for otherwise specified, the Company and all subsidiaries covered within these consolidated financial statements are collectively referred to as the Group hereinafter.

The date of authorization for issuance of financial statements and procedures for authorization
These financial statements were authorized for issuance by the Board of Directors on March 19, 2020.

3.

Application of New Issuance, Amendments 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 (hereinafter referred to as FSC):

As required by the Financial Supervisory Commission under Decrees Jin-Guan-Cheng-Shen-Zi 1070324857 dated July 17, 2018 and Jin-Guan-Cheng-Shen-Zi 1070324155 dated July 13, 2018, the Group should, starting from Year 2019, adopt the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations, and SIC Interpretations as endorsed by FSC under the issuance of International Accounting Standards Board (IASB) applicable from 2019 (hereinafter collectively referred to as IFRSs) and the relevant Regulations Governing the Amendment of Preparation of Financial Reports by Securities Issuers to prepare financial statements.

128

Those assembled under the Table below are the new issuance, revised and amended standards and interpretations applicable to IFRSs as endorsed by FSC in 2019:

New issuance, revised and amended standards and interpretations
IFRS 16 “Leases”

IFRI 23 “Uncertainty in income tax treatment”

Amendment to IFRS 9 “Prepayment features with negative compensation”

Amendment to IAS 28 “Long-term interests in associates and joint ventures”
Amendment to IAS 19 “Amendment, curtailment or settlement of a plan”

Annual Improvements to 2015-2017 Cycle

Effective date issued by
IASB

January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019

Except for the description below, the Group's assesses that the application of the aforementioned standards and explanations would not have a significant impact upon the consolidated financial conditions and consolidated financial performance of the Company:

IFRS 16, ‘Leases’

IFRS 16, 'Leases', replaces IAS 17, 'Leases' and IFRIC Interpretations, and SIC Interpretations. The standard requires lessees to recognize right-of-use assets and lease liabilities (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.

The Group expects to choose not to re-compile the comparison period in accordance with the transitional requirements of IFRS 16 (hereinafter referred to as "Modified Retrospective Adjustment"), and would recognize the conversion difference applicable retrospectively in retained earnings as of January 1, 2019.

Currently in accordance with IAS 17 on the grounds of agreement on operating lease treatment, on January 1, 2019, the Group would take the lease liabilities to measure the surplus lease payment, with the incremental loan interest rate discounted of the lessee on that day. The entire right-of-use assets would be taken with the amount of the lease liabilities as of that day to adjust the prepaid or payable amounts of the rents as to be recognized.

Toward the measurement of the right-of-use assets and lease liabilities as of January 1, 2019, the Group is subject to the following expedients:

1) The Group did not reassess whether the contracts were (or including) lease. Previously those contracts had been subject to IAS 17 and IFRI 4 while such contracts were identified as subject to provisions set forth under IFRS 16.
2) Those lease compositions with rational and similar characteristics, the Group would use single discount rate to measure the lease liabilities.
3) In case of lease which had been closed before December 31, 2019 during the lease, the Group adopted the method of short-term lease.
4) Except rent payment, the Group did not count the additional costs yielded from the lease so earned into the measurement of the right-of-use assets as of January 1, 2019.
5) Amidst the proceedings of the measurement for the lease liabilities, toward the decision on the lease terms (e.g., duration of the lease), the Group would

129

measure it based on the expectancy as of January 1, 2019.

Besides, the accounting handling by the Group toward the lessors would not cast a significant impact.

While the Group applied initially IFRS 16, the lease contract attribute to the lessee to recognize the lease liabilities as of January 1, 2019, the interest rate range applicable to the incremental loan was 0.63% - 4.30%.

As the Group disclosed the amount of commitment for operating lease under IAS 17, the present value of incremental loan interest rate discounted at the initial application date used by the Group and lease liabilities recognized on January 1, 2019 are adjusted as follows:

adjusted as follows:
Business leasehold commitment with disclosure under IAS 17 as of December 31, 2018 Plus: Total rent payable under finance lease recognized under IAS 17 as of December 31, 2018 Less: Short-term lease applied to exemption Plus: Rational expected evaluation toward lease option with the adjustment Total lease liabilities recognizable under IFRS 16 as of January 1, 2019 The incremental loan interest rate upon the initial application date of the Group Present value of lease liabilities recognized under IFRS 16 as of January 1, 2019	$ 206,270 2,997 ( 1,021) 294,778
	$ 503,024
	0.63% - 4.30%
	$484,675

The initial application of IFRS 16 toward the adjustment of assets, liabilities and equity items as of January 1, 2019 is follows:

Items	Amount before reclassification as of January1,2019	Adjustment with initial application	Amount after reclassification as of January1,2019
Property, plant and equipment Right-of-use assets Long-term rent paid in advance Effects of assets Lease liabilities - current Rent payable - current Lease liabilities - noncurrent Rent payable - noncurrent Effect in liabilities Effect in equity	$ 7,427,473 - 9,130	($ 2,917) 493,787 ( 9,130)	$ 7,424,556 493,787 -
	$ 7,436,603	$ 481,740	$ 7,918,343
	$ - 1,944 - 991	$ 69,917 ( 1,944) 414,758 ( 991)	69,917 - 414,758 -
	$ 2,935	$ 481,740	$ 484,675
	$ -	$ -	$ -

(2) The impact upon the International Financial Reporting Standards (IFRSs) by the new issuance, amendment without endorsed by FSC:

Under Decree Jin-Guan-Cheng-Shen-Zi 1080323028 of FSC as of July 29, 2019, the Group should adopt the IFRSs issued by International Accounting Standards Board (IASB) and the revised Regulations Governing the Preparation of Financial Reports by Securities Issuers to prepare financial statements starting from 2020..

The following Table assembles the new issuance, revised and amended standards and interpretations endorsed by FSC as applicable to IFRSs starting from 2020:

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Effective date issued New issuance, revised and amended standards and interpretations by IASB Amendment to IFRS 3 “Definition of business” January 1, 2020 Amendment to IAS 1 and IAS 8 “Definition of significance” January 1, 2020 Amendment to IFRS 9, IAS 39 and IFRS 7 “Revolution of interest rate January 1, 2020 indicators”

As of the date on which the Group’s financial statements were authorized and issued, the relevant standards adopted by the Group for evaluation, amendment to interpretations would not have a significant impact upon the consolidated financial conditions and the consolidated financial performance.

(3) The impact brought by IFRS having been issued by IASB but have not been endorsed by the FSC:

The Group has not adopted the following IFRSs which have been issued by IASB but have not been endorsed by the FSC. The actual effective date applied shall be pursuant to provision of FSC.

Effective date issued New issuance, revised and amended standards and interpretations by IASB IFRS 17 “insurance contracts” January 1, 2021 Amendment to IAS 1 “To classify liabilities into current or noncurrent ” January 1, 2022 Amendment to IFRS 10 and IAS 28 “Sales or investment of assets Pending for resolution between investors and associates or joint ventures” by the International Accounting Standards Board (IASB)

The preliminary evaluation result indicates that the aforementioned standards and interpretations would not cast a significant impact upon the Group’s consolidated financial conditions and the consolidated financial performance. The Group will continually evaluate the amounts with the relevant impact which would be disclosed in full upon completion of the evaluation process.

Summary of significant accounting policies

The principal accounting policies applied in the preparation of the consolidated financial statements are explained below. Unless otherwise specified, these policies have been consistently applied to all the periods presented.

(1) Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs endorsed, issued to take effect by FSC.

(2) Basis of preparation
1) Except for the following significant items, the consolidated financial statements have been prepared under the historical cost convention:
- 1) Financial assets and liabilities (including derivative instruments) at fair value through profit or loss measured based on the fair value.
- 2) Financial assets at fair values through other comprehensive income measured based on the fair value.
- 3) The liabilities on the shares-based payment agreement with cash settlement measured based on the fair value.
- 4) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

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2) The preparation of financial statements in compliance with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, please refer to Note 5.
3) The Group became subject to IFRS 16 for the first time on January 1, 2019 with a choice not to reclassify the financial statements and the notes with comparison period for Year 2018 and to recognize the difference in conversion into the e retained earnings as of January 1, 2019. The financial statements and notes with comparison period for Year 2018 were prepared in accordance with IAS 17 and the IFRIC Interpretations, and SIC Interpretations.
(3) Consolidated base
1) Basis for preparation of consolidated financial statements:
- A. All subsidiaries are included as the entities in the preparation of the consolidated financial statements by the Group. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries included in the consolidated financial statements begin from the date the Group obtains control of the subsidiaries and ceases consolidation starting from the date of forfeiture of control.
- B. Inter-company transactions, balances and unrealized gains or losses within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
- C. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
- D. Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
- E. When the Group loses control of a subsidiary, the Group measures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. The difference between fair value and carrying amount is recognized in current profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on other comprehensive income as previously recognized, its accounting treatment is on the same basis as would be required if the related assets or liabilities were disposed directly by the Group. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other

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comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

2) Subsidiaries included in the consolidated financial statements are as follows:

Name of investor
Grand Pacific Petrochemical
Corporation

Grand Pacific Petrochemical
Corporation

Grand Pacific Petrochemical
Corporation

Grand Pacific Petrochemical
Corporation

Grand Pacific Petrochemical
Corporation

Grand Pacific Petrochemical
Corporation

Grand Pacific Petrochemical
Corporation

GPPC Investment Corp.

Videoland Inc.

Videoland Inc.

Videoland Inc.

Videoland Inc.

KK Enterprise Co., Ltd.

KK Enterprise Co., Ltd.

KK Enterprise Co., Ltd.

KK Enterprise Co., Ltd.

KK Enterprise Co., Ltd.

Note:

Name of subsidiary
Attributes of business lines
Shares held or capital
attribution(%)
December
31,2019
December
31,2018
GPPC Chemical CorporationProduction and sale of
impact-resistant and
flame-resistant polystyrene
100.00%
100.00%
GPPC Investment Corp.
General investment business
81.60%
81.60%
GPPC Development Co.,
Ltd.
General hotel business
38.46%
-
Land & Sea Capital Corp.
Investment business
100.00%
100.00%
Goldenpacific Equities Ltd.Investment business
100.00%
100.00%
Videoland Inc.
General import and export
trade, radio and television
program production, domestic
and foreign film copying,
domestic film production,
distribution, trading and other
services
62.29%
62.29%
KK Enterprise Co., Ltd.
Engaging in manufacturing
and sales, wholesale,
packaging materials, various
stationery and paper products
15.73%
15.73%
GPPC Hospitality And
Leisure Inc.
Catering service business
100.00%
100.00%
KK Enterprise Co., Ltd.
Engaging in manufacturing
and sales, wholesale,
packaging materials, various
stationery and paper products
33.79%
33.79%
GPPC Investment Corp.
General investment business
18.40%
18.40%
GPPC Development Co.,
Ltd.
General hotel business
23.08%
-
Videoland Holding LimitedInvestment business
-
-
K.K. Chemical
Company Limited
Trademark paper, glue paper
and such business
49.90%
49.90%
KK Enterprise (Zhongshan)
Co., Ltd.
Trademark paper, glue paper
and such business
50.00%
50.00%
KK Enterprise (Kunshan)
Co., Ltd.
Trademark paper, glue paper
and such business
100.00%
100.00%
Dragon King Inc.
Outward Investment business
100.00%
100.00%
KK Enterprise (Malaysia)
Sdn. Bhd.
Trademark paper, glue paper
and such business
70.00%
70.00%
(1)
Where the Company's direct and indirect shareholdings in subsidiaries are
more than 50% or have substantial control capabilities, these companies are
included in the consolidated financial statements.

  - (2) Among the aforementioned consolidated entities, the financial statements of K.K. Chemical Company Limited and KK Enterprise (Malaysia) Sdn. Bhd. had been audited and endorsed by other certified public accountants.

3) Increase/decrease changes of the companies included in the entities within the consolidated financial statements for the current year:
A. The Group and Videoland Inc. outward-invested in GPPC Development Co., Ltd. during August to October 2019. Where the Group has been in direct and indirect holding ratios of control capabilities, starting from the

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date of acquisition of control capabilities, the Group began compiling those companies’ income and expenses into the consolidated financial statements.

B. GPPC Investment Corp. outwardly invested and incorporated a subsidiary GPPC Hospitality and Leisure Inc. in October 2018. Where the Group has been in direct and indirect holding ratios of control capabilities, starting from the date of acquisition of control capabilities, the Group began compiling those companies’ gains and expenses into the consolidated financial statements.
C. In an attempt to streamline the investment structure, Videoland Inc. revoked its investment in Videoland Holding Limited and repatriated all remaining property in August 2018. Therefore, starting from the date of forfeiture of control, the Company ceased counting that company's gains and expenses into the consolidated financial statements.
4) Subsidiaries not included in the consolidated financial statements: Nil
5) Adjustments and processing method for subsidiaries with different balance sheet date: Nil
6) Where the subsidiary's ability to transfer funds to its parent company is subject to significant restrictions, the nature and extent of the restriction:

The cash and bank deposits amounting to NT$142,103 thousand and NT$132,048 thousand for the years ended December 31, 1019 and 2018 were deposited in China and subject to local foreign exchange controls. Such foreign exchange controls restrict the remittance of funds out of China (Except normal dividends).

7) Subsidiaries with significant non-controlling interests over the Group:

The total of non-controlling interests of the Group for the years ended December 31, 2019 and 2018 amounted to NT$2,863,409 thousand and NT$2,881,984 thousand, respectively. The following information is significant non-controlling interests over the Group and subsidiaries:

A. December 31, 2019 and the year ended December 31, 2019:

Name of subsidiary Videoland Inc. KK Enterprise Co., Ltd. and subsidiaries GPPC Development Co., Ltd. Total	Non-controlling shareholding ratio 37.71% 50.48% 38.46%	Non- controlling interests $ 2,276,761 537,117 49,531 $ 2,863,409	Profit/loss distributed to non-controlling interests
			$ 80,565 25,707 ( 186)
			$ 106,086

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B. December 31, 2018 and the year ended December 31, 2018:

Name of subsidiary Videoland Inc. KK Enterprise Co., Ltd. and subsidiaries Total	Non-controlling shareholding ratio 37.71% 50.48%	Non- controlling interest $ 2,266,152 615,832 $ 2,881,984	Profit/loss distributed to non-controlling interest
			$ 151,505 39,130
			$ 190,635

C. For more details regarding the major business premises of the aforementioned subsidiaries and the countries where the subsidiaries had been registered, please refer to Note 13(1) (2)-10.
D. Summary financial information of subsidiaries:
Balance sheets

Balance sheets
Items	Videoland Inc.
	December 31,2019	December 31,2018
Current assets Noncurrent assets Current liabilities Noncurrent liabilities Equity Items	$ 2,053,068 4,754,548 ( 441,612) ( 328,451)	$ 2,105,054 4,369,200 ( 441,635) ( 23,199)
	$ 6,037,553	$ 6,009,420
	December 31,2019	December 31,2018
Current assets Noncurrent assets Current liabilities Noncurrent liabilities Equity Items	$ 878,328 541,762 ( 323,449) ( 122,690)	$ 961,061 571,528 ( 292,366) ( 114,243)
	$ 973,951	$ 1,125,980
	December 31,2019
	$ 128,580 256 ( 50) -
	$ 128,786

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Items Operating revenues Net profit for the year Other comprehensive income Total comprehensive income Total comprehensive income attributable to non-controlling interests Dividend paid to non-controlling interests Items Operating revenues Net profit for the year Other comprehensive income Total comprehensive income Total comprehensive income attributable to non-controlling interests Dividend paid to non-controlling interests	KK Enterprise Co.,Ltd. and Subsidiaries	KK Enterprise Co.,Ltd. and Subsidiaries
	Year Ended December 31,2019	Year Ended December 31,2018
	$ 1,574,696	$ 1,775,236
	42,283 ( 13,944)	66,230 ( 7,593)
	$ 28,339	$ 58,637
	$ 17,349	$ 34,531
	$ 32,405	$ 24,897
	GPPC Development Co.,Ltd.
	Year Ended December 31,2019	Year Ended December 31,2018
	$ -	$ -
	( 1,123) -	( 90) -
	($ 1,123)	($ 90)
	($ 186)	$ -
	$ -	$ -

 Statements of Cash Flows

Statements of Cash Flows
Items Net cash provided in operating activities Net cash used in investing activities Net cash used in financing activities Effect of exchange rate changes Increase (decrease) in cash & cash equivalents for the year Cash & cash equivalents , beginning of year Cash & cash equivalents, end of year	Videoland Inc.
	Year Ended December 31,2019	Year Ended December 31,2018
	$ 1,101,943 ( 1,278,958) ( 104,713) -	$ 1,297,585 ( 1,038,520) ( 57,054) -
	( 281,728) 874,449	202,011 672,438
	$ 592,721	$ 874,449

Items Net cash provided in operating activities Net cash used in investing activities Net cash used in financing activities Effect of exchange rate changes Increase (decrease) in cash & cash equivalents for the year Cash & cash equivalents , beginning of year Cash & cash equivalents, end of year	KK Enterprise Co.,Ltd. and Subsidiaries	KK Enterprise Co.,Ltd. and Subsidiaries
	Year Ended December 31,2019	Year Ended December 31,2018
	$ 155,541 ( 17,640) ( 170,045) ( 11,509)	$ 88,236 ( 23,201) ( 81,500) ( 4,115)
	( 43,653) 224,234	( 20,580) 244,814
	$ 180,581	$ 224,234

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Items Net cash used in operating activities Net cash used in investing activities Net cash provided in financing activities Effect of exchange rate changes Increase (decrease) in cash & cash equivalents for the year Cash & cash equivalents , beginning of year Cash & cash equivalents, end of year	GPPC Development Co.,Ltd.	GPPC Development Co.,Ltd.
	Year Ended December 31,2019	Year Ended December 31,2018
	($ 1,381) ( 128,000) 120,000 -	($ 116) - 10,000 -
	( 9,381) 9,884	9,884 -
	$ 503	$ 9,884

(4) Foreign currency translation
1) Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company's functional and the Group's presentation currency.
2) When preparing financial statements for each entity using currencies other than the entity's functional currency (foreign currency) converted into functional currency at the spot exchange rate on the transaction day or measurement date, and the exchange difference resulting from the translation of these transactions was recognized as current profit and loss. At the end of the financial statement period, the balance of foreign currency monetary assets and liabilities were evaluated and adjusted at the spot exchange rate on the balance sheet date, and translation differences arising from the adjustment were recognized as current profit and loss. In case of foreign currency non-monetary assets and liabilities, the balance was evaluated and adjusted at the spot exchange rate quoted on the balance sheet date as measured at fair value through profit or loss, and the exchange difference arising from the adjustment was recognized as current profit and loss as measured at fair value through comprehensive income. The resulting exchange differences resulting from the adjustment were recognized in other comprehensive income items; where they were not measured at fair value, they were measured at the historical exchange rate on the initial trading day. All gains and losses on exchange were reported according to the attribute of the transaction and other gains and losses in the comprehensive income.
3) When preparing the consolidated financial statements, assets and liabilities of the foreign operations of the companies in merger (including the subsidiaries, associates, joint ventures or branches of the Company in the countries of business operation or those using different currencies) were translated into New Taiwan Dollars at the spot exchange rate quoted on the balance sheet date. The income and expense items were translated using the exchange rates average in that period. All exchange differences arising from the translation were recognized as other comprehensive income.
4) When the foreign operations were disposed of and constituting a loss of control, joint control or significant influence on the foreign operations, all and the relevant interests of the foreign operations would be reclassified into profit or loss. In some cases where the disposal of subsidiaries in foreign operations did not constitute a loss of control of the subsidiary, the cumulative exchange difference recognized in other comprehensive income was calculated into the

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equity transaction on a pro rata basis, but it was not recognized as profit or loss. In some cases where the interests of the disposal of associates or joint venture in foreign operations did not constitute a significant impact of loss on the associates or joint venture or joint control in interests, the cumulative exchange difference recognized in other comprehensive income was reclassified into profit or loss based on the disposal ratio.

(5) Criteria of classification of current and noncurrent assets and liabilities
1) Assets that meet one of the following criteria are classified as current assets:
- A. Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
- B. Assets arising mainly from trading activities;
- C. Assets that are expected to be realized within twelve months from the balance sheet date;
- D. Cash & cash equivalents unless the asset is restricted from being used for an exchange or used to settle a liability for more than twelve months after the balance sheet date.

The Group classifies the assets that do not satisfy the above conditions as noncurrent.

2) Liabilities that meet one of the following criteria are classified as current liabilities:
A. Liabilities that are expected to be paid off within the normal operating cycle;
B. Liabilities arising mainly from trading activities;
C. Liabilities that are to be paid off within twelve months from the balance sheet date;
D. Liabilities for which the Company does not have an unconditional right to defer settlement for at least twelve (12) months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

The Group classifies the liabilities that do not satisfy the above conditions as noncurrent.

(6) Cash & cash equivalents

Cash & cash equivalents include cash on hand, bank deposits, and short-term and highly liquidity investments that could be converted into cash in fixed amounts at any time with little change in value risk. Time deposits that meet the aforementioned definitions and are held for short-term operations cash promise are classified as cash equivalent.

(7) Financial instruments

Financial assets and financial liabilities should be recognized when the Group became a party to the terms of the financial instruments contract.

When financial assets and financial liabilities were initially recognized, they were measured at the fair value. At the time of initial recognition, the transaction costs acquired or issued directly attributable to financial assets and financial liabilities (unless classified as financial assets and financial liabilities at fair value through profit or loss), shall be added or subtracted from the fair value of the financial assets

138

or financial liabilities. The transaction costs directly attributable to financial assets and financial liabilities at fair value through profit or loss should be recognized immediately as profit or loss.

(8) Financial assets at fair value through profit or loss
1) Financial assets at fair value through profit or loss include financial assets mandatorily measured at fair value through profit or loss and designation as financial assets at fair value through profit or loss. The financial assets mandatorily measured at fair value through profit or loss include investments in equity instruments that the Group does not specify at fair value through other comprehensive income, and investments in debt instruments that did not qualify as being measured at amortized cost or at fair value through other comprehensive income.
2) In a case carried at amortized costs or financial assets at fair values through other comprehensive income, when measurement or recognition inconsistency could be eliminated or significantly reduced, the Group designated the case as financial assets at fair value through profit or loss at the time of initial recognition.
3) The Group adopts transaction day accounting for financial assets at fair value through profit or loss consistent with transaction customs.
4) The Group measured at fair value at the time of initial recognition, and recognized related transaction costs in profit or loss and subsequently measured at fair value and the gains or losses were recognized in profit or loss.
5) When the right to receive dividends was ascertained and the economic benefits related to dividends were likely to flow inward while the amount of dividends could be reliably measured, the Group recognized the dividend income in profit or loss.
(9) Financial assets at fair values through other comprehensive income
1) Referring to an irrevocable option at the time of initial recognition to report changes in the fair value of investments in equity instruments that were not held for trading in other comprehensive income; or the investment in debt instrument simultaneously met the following conditions:
- A. The financial asset held under the business model of collecting cash flows under contracts and for the purposes of selling.
- B. The cash flow generated on a specific date under the contract terms for the financial assets were completely intended to pay off the principal and the interest of the outstanding principals.
2) The Group adopts transaction day accounting for financial assets at fair value through comprehensive income consistent with transaction customs.
3) The Group measured at fair value plus transaction costs at initial recognition, and subsequently at fair value:
- A. Changes in the fair value of equity instruments were recognized in other comprehensive income. When derecognized, the cumulative gains or losses previously recognized in other comprehensive income would not be reclassified to profit or loss and would be transferred to retained earnings instead. When the right to receive dividends was ascertained and the economic benefits related to dividends were likely to flow inward while the amount of dividends could be reliably measured, the Group recognized the dividend income in profit or loss.

139

  - B. Changes in the fair value of debt instruments were recognized in other comprehensive income, impairment losses before derecognition, interest income and gains and losses in foreign currency exchange were recognized in profit or loss, and at the time of derecognition, the cumulative gains or losses previously recognized in other comprehensive income were reclassified from the equity into profit or loss.

(10) Financial assets carried at amortized cost
1) Referring to the events that conform with the conditions as below simultaneously:
- A. The financial assets held under the business model for the purposes of collecting cash flows under contracts.
- B. The cash flow generated on a specific date under the contract terms for the financial assets were completely intended to pay off the principal and the interest of the outstanding principals.
2) The Group adopts transaction day accounting for financial assets carried at amortized cost consistent with transaction customs.
3) The Group measured at fair value plus transaction costs at initial recognition, and subsequently used the effective interest method to recognize interest income during the circulation period based on the amortization process, and recognized impairment losses, and when derecognized, the gains or losses were recognized in profit or loss.
4) The Group held time deposits that were not eligible for cash equivalent. As the holding period was short, the effect of discounting was insignificant, which was measured by the amount of investment.

(11) Accounts & notes receivable

Referring to the contract which had been received unconditionally for the accounts and notes for the right to consideration exchanged due to the transfer of products or labor services. As short-term accounts & notes receivable were paid without bearing interest, the impact of the discounting was insignificant, therefore, the Group measured at the initial amount.

(12) Impairment of financial assets

For investment in debt instruments at fair value through other comprehensive income, and financial assets carried at amortized cost and accounts receivable or contract assets that contain significant financial components, rent receivables, lending commitments and financial guarantee contracts, The Group, after considering all reasonable and corroborable information (including forward-looking perspectives) on each balance sheet date, measured by the amount of expected credit loss in 12 months toward an insignificant increase in credit risk since initial recognition. For the credit risk has increased significantly since the original recognition, the allowance for loss was measured by the amount of expected credit loss during the existence period. For accounts or contract assets that do not include significant financial components, the allowance for losses measured by the amount of expected credit loss during the existence period.

(13) Derecognition of financial assets

The Group will derecognize financial assets when one of the following conditions is met:

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1) When rights to contract of receiving cash flow from financial asset has expired.
2) Transfer of right to contract of receiving cash flow from financial asset, and when nearly all risk and reward associated with the said financial assets have been transferred.
3) Transfer of rights to contract of receiving cash flow from financial asset, and excluding control over the financial assets.
(14) Lease transaction of the lessor - rent receivables/operating leases
1) Pursuant to the terms and conditions under the lease agreements, when almost all the risks and rewards of lease ownership were borne by the lessee, they are classified as finance leases.
- A. As the lease started up, the net lease investment (including the original direct cost) was recognized as "rent receivables", and the difference between the total lease receivables and the present value was recognized as "unearned financing income from finance leases".
- B. Subsequent adoption of a systematic and reasonable basis to allocate financing income over the lease period to reflect a fixed rate of return on the net lease investment held by the lessor.
- C. The period related lease payments (excluding service costs) offset the total lease investment to reduce the principal and unearned financing income.
2) Lease income from operating leases, net of any incentives given to the lessee, was recognized as a current profit or loss and amortized on a straight line basis during the lease period.

(15) Inventory

Inventories were measured at the lower of cost and net realizable value, whichever is the lower under the perpetual inventory system adopted, and the cost was determined by the weighted average method. The cost of finished goods and work in progress includes raw materials, direct labor, other direct costs, and production-related manufacturing overhead (as normal capacity allocation), but excludes borrowing costs. Upon comparison of cost and the net realizable value, whichever was the lower, the itemized comparison method was adopted. The net realizable value refers to the estimated selling price in the normal course of business less the estimated cost that must be invested to completion and the balance after related changes in selling expenses.

(16) Investments accounted for using the equity method/associates
1) Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost, including the goodwill already identified upon acquisition, with any accumulated impairment loss estimated to occur subsequently deducted.
2) The share of profit or loss for the Group after acquisition of an associate is recognized as current profit and loss and the share of other comprehensive income after acquisition is recognized as other comprehensive income. When the Group's share of loss in an associate is equal to or exceeds the equity in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or

141

made payments on behalf of the associate.

3) The profits and losses generated from the fair current, countercurrent and side stream transactions between the Group and associates were recognized in the financial statements only to the extent that the Group has no interest in the associates. The accounting policies of associates have been adjusted as necessary, and the policies adopted by the Group have been consistent.
4) When changes in an associate's equity are not recognized in profit or loss and other comprehensive income of the associate and such changes do not affect the Group's shareholding ratio of the associate, the Group recognizes the Group's share of change in equity of the associate in 'capital reserves' in shareholding ratio .
5) In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group's investment percentage of the associate but maintains significant influence on the associate, then 'capital surplus' and 'investments accounted for using the equity method' shall be adjusted for the increase or decrease of its changes in net equity. If the above condition causes a decrease in the Group's ownership percentage of the associate, in addition to the above adjustment, the profit or loss previously recognized in other comprehensive income in relation to the ownership interest are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
6) Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in current profit or loss.
7) When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss or transferred directly to retained earnings, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it still retains significant influence over this associate, then the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
8) When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it still retains significant influence over this associate, then the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.
(17) Property, plant and equipment
1) Property, plant and equipment are initially recorded at cost. Loans costs incurred during the construction period are capitalized.
2) Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
3) Land is not depreciated. The subsequent measurement of other property, plant and equipment apply cost model and are depreciated using the straight-line

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method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

4) The assets' residual values, useful lives and depreciation methods are reviewed by the Group at each financial year-end. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors', from the date of the change. The estimated useful lives of p various assets are as follows:
- A. Buildings & constructions 4 - 56 years
- B. Machinery & equipment 5 - 25 years
- C. Transportation facilities 2 - 7 years
- D. Other equipment 3 - 10 years
5) The Group's depreciable assets were originally used in the rate-decreasing method at the time of tax declaration; however, the Group has switched to use the average method in Year 1998. This change was already approved by the National Taxation Bureau of the Southern Area, Ministry of Finance with Letter (1998) Nan-Qu-Guo-Shui-Shen-I-Zi 87051967.
(18) Lease agreements of the lessee - right-of-use assets/lease liabilities (Applicable to Year 2019)
1) Lease assets were recognized as right-of-use assets and lease liabilities on the date when they became available for use by the Group. When the lease agreement was a short-term lease or lease of a low-value underlying asset, the lease payment was recognized as expense by straight-line method.
2) In lease liabilities, the Group recognized the unpaid lease payments at the lease starting date at the present value of the Group’s incremental loan rate discounted. The lease payments include fixed payments, less any incentives that could be received for the lease. Subsequently the Group measure at the amortized cost method under the interest method and recorded as interest expenses during the lease period. When the non-contract modification caused a change in the lease period or lease payment, the lease liabilities would be reassessed, and the remeasurements would be adjusted to right-of-use assets.
3) The right-of-use assets were recognized at cost on the lease starting date and the cost includes the original measured amount of lease liabilities. The subsequent measurement using cost model which were earlier at the end of the useful life of the right-of-use assets or at the end of the lease period while depreciation expenses were recorded. When lease liabilities were reassessed, right-of-use assets would adjust any remeasurement of the lease liabilities.
(19) Lease assets/operating lease (Lessees)(Applicable to Year 2018)
1) Pursuant to the terms and conditions under the lease agreements, when almost all risks and rewards of lease ownership are borne by the Group, it is classified as a finance lease.
- A. Upon initiation of the lease, the assets and liabilities were recognized based on the fair value of the lease assets and the lowest present value of payment, whichever is the lower.

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B. Subsequently the minimum lease payments were allocated to finance costs and reduce outstanding liabilities. The finance costs were allocated period-by-period during the lease duration so that the period interest rate calculated based on the balance of liabilities would be fixed.
C. Property, plant and equipment obtained under finance leases were depreciated according to the useful life of the assets. If the lease period could not be reasonably determined, the Group would acquire ownership and recorded as depreciations based on the useful life of the assets and the lease period, whichever was the shorter.
2) The operating lease payment was recorded and amortized on straight-line basis during the lease period as current profit or loss, after deducting any incentive received from the lessor.

(20) Investment property

The investment property was real property held to earn either rent or capital appreciation or both, and also included real property held for which the future use has not yet been determined. The investment property was originally measured by acquisition cost, and was subsequently reduced by cost except for accumulated depreciation and accumulated impairment loss where the amount was measured. Except for land, depreciation was provided on the straight-line method according to the estimated useful life which was 40 years. While the investment property was derecognized, the difference between the net disposal price and the carrying amount of such assets was recognized in current profit or loss.

(21) Intangible assets

1) Obtained separately

The intangible assets acquired separately for a limited useful life were originally measured at cost and subsequently at the amount of the costs deducted with the accumulated amortization and accumulated impairment losses. Intangible assets were amortized on a straight-line basis over the useful life. All such facts of the estimated useful life, residual value and amortization method should be reassessed at end of every fiscal year as the minimum to postpone the impact of changes in applicable accounting estimates. When Intangible assets derecognized, the difference between the net disposal price and the carrying amount of the asset was recognized in the profit or loss of the current year.

2) Goodwill

The goodwill obtained from the business combination was based on the amount of goodwill recognized on the acquisition date as the cost, which was subsequently measured by the amount of the cost after subtracting the accumulated impairment losses. For the purpose of impairment testing, goodwill needs to be allocated to each cash-generating unit or cash-generating units that the Group expects to benefit from the merger concerted performance.

(22) Cost of program broadcasting

The cost of program broadcasting include the proceeds acquired on outsourcing film broadcasting rights outsourced investment in filming or self-made programs, and the production costs with future economic benefits which were entered into accounts at the substantial costs. The outsourcing film broadcasting rights depends on individual programs and was transferred to the amortization of the film under the current operating cost during actual playback. The sub-authorized film broadcasting right was transferred into the film sub-authorization cost under the current operating cost

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when actually delivered. The outsourced investment in filming and the self-made ribbon-type program would be converted into the production cost and filming cost under the current operating cost during the actual broadcast. The cost of the broadcast program was recorded under other noncurrent assets, and was expected to be amortized within one year as other current assets. For other current assets, if the fair value at the end of the year was estimated to be lower than the accounted unamortized cost, the impairment loss would be recognized as the loss of the current year.

(23) Impairment loss on non-financial assets

The Group estimates the recoverable amount of assets with signs of impairment on the balance sheet date. When the recoverable amount was lower than its carrying amount, the impairment loss would be recognized. The recoverable amount refers to the fair value of an asset less disposal cost or its value in use, whichever is higher. Except for goodwill, when the impairment of assets recognized in previous years did not exist or decrease, the impairment loss would be reversed, but the asset carrying amount increased by the impairment loss should not exceed the carrying amount after depreciation or amortization of the asset if no impairment loss was recognized.

(24) Loans

Loans are recognized initially at fair value, net of transaction costs incurred. Loans are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the loans using the effective interest method.

(25) Notes and accounts payable

Notes and accounts payable are obligations to pay for products or labor services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(26) Financial liabilities at fair value through profit or loss
1) Referring to the main purpose of the sale or repurchase in the latest period, and financial liabilities held for trading except for derivatives instruments that are designated as hedging instruments under hedge accounting. The financial liabilities at fair value through profit or loss were designated on the Initial recognition. When a financial liability meets one of the following conditions, the Group measured at fair value through profit loss on the initial recognition:
- A. As hybrid (combined) contracts; or
- B. Where the inconsistency in significant decrease measurement or recognition could be eliminated; or
- C. Pursuant to the documented risk management policies, the instruments with performance evaluated in fair value based management.
2) The Group measured at fair value at the time of initial recognition, and recognized the related transaction costs in profit or loss and subsequently measured at fair value and the gains or losses were recognized in profit or loss.
3) In case of a financial liability designated to be measured at fair value through profit or loss where the amount of change in fair value resulted from credit risk, except for avoiding improper accounting ratios or loan commitments and

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financial guarantee contracts, the Group recognized the same in other comprehensive income.

(27) Provisions

The Group is under current statutory or constructive obligation due to past events, very likely that economically efficient resources would need to be discharged to settle such obligation and the amount of the obligation could be reliably estimated when the provisions were recognized. The measurement of provisions is based on optimal estimated present value of the expenditure required to settle the obligation on the balance sheet date. The discount rate uses the pre-tax discount rate that reflects the current market assessment of the time value of currency and the specific risk of the liability. The amortization discounted is recognized as interest expenses. The future loss in operations should not be recognized as provisions.

(28) Employee benefits
1) Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.

2) Post-employment benefits
A. Defined contribution plans

For defined contribution plans, the contributions of pension funds are recognized as current pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

B. Defined benefit plans
- Net obligation under a defined benefit plans is defined as the present value of an amount of future benefits that employees will receive for their services with the Company in current year or prior periods, and the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The discount rate is determined by reference to the balance sheet date, the currency of defined benefit plans and the market yield of high-quality corporate bonds that were consistent during the period. The countries of such bonds without in-depth market adopt the market yield of government bonds (as of the balance sheet date).
- Remeasurement arising on defined benefit plans is recognized in other comprehensive income in the current year in which they arise, and expressed in the retained earnings.
- The expenses related to the service cost of the prior period were immediately recognized into profit or loss.
3) Termination benefits

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employment. The cost of restructuring was not recognized until the moment while the Group could no longer revoke a contract for termination benefits or the restructuring cost was recognized, whichever came the earlier. Termination benefits that were not expected to be fully settled 12 months after the balance sheet date should be discounted.

4) Compensation to employees and remuneration to directors and supervisors

Compensation to employees and remuneration to directors and supervisors are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Subsequently, any difference between actual distributed amounts as resolved and estimated mounts is accounted for as changes in estimates.

(29) Financial liabilities & equity instruments
1) Classification of financial liabilities or equity instruments

The liability and equity instruments issued by the Group were classified as financial liabilities or equity according to the substance of the contract agreement and the definition of financial liabilities & equity instruments.

2) Equity instruments

The “equity instruments” refers to any contract that recognizes the remaining equity of an enterprise after the assets are deducted from all its liabilities. The equity instruments issued by the Group are recognized at the price obtained after deducting the direct issue cost.

3) Financial liabilities

In case of financial liabilities that were not held for trading purposes and were not designated as measured at fair value through profit or loss, such financial liabilities were measured at amortized cost at the end of the subsequent accounting period.

4) Derecognition of financial liabilities

The Group did not derecognize financial liabilities until the obligations were lifted, cancelled or lapsed. When financial liabilities were derecognized, the difference between their carrying amount and total consideration paid or payable (including any transferred non-cash assets or liabilities assumed) was recognized into profit or loss.

5) Inter-offset of financial assets and liabilities

The financial assets and financial liabilities were not offset against each other and expressed in net in balance sheet until there was a legally enforceable right to offset the recognized amount of financial assets and liabilities with an intention to deliver on a net basis or achieve assets and liquidate liabilities at the same time.

(30) Share capital & treasury stocks

1) Share capital

Common shares were classified as equity. The classification of preferred shares refers to the definition of substantial contractual agreement, financial liabilities and equity instruments, and evaluates the specific rights attached to preferred shares. When the basic characteristics of financial liabilities were exhibited, they were classified as liabilities; otherwise they would be an equity. The net of

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increase in costs directly attributable to issuance of new share or share warrants after deducting income tax is recorded as the deduction of share prices.

2) Treasury stocks

The Group withdrew the issued outstanding shares and recognized them as "treasury stocks" based on the consideration paid at the time of purchase (including direct attributable costs) as a deduction of equity. Where the price of the disposal of treasury stocks is higher than the carrying amount, the difference was listed as capital surplus-treasury stocks transactions. Where the disposal price is lower than the carrying amount, the difference is offset against the asset surplus generated by the exchange of the same type of treasury stocks. In case of a shortfall, the surplus is debited in the retained earnings. The carrying amount of treasury stocks is taken weighted average and calculated separately according to the reason for recovery.

When treasury stocks are cancelled, the capital reserve is debited according to the proportion of equity - share certificates issuance premium and share capital, where the carrying amount is higher than the face value and the total value of the stock issuance premium, the difference would be offset against the capital generated by the exchange of the same type of treasury stocks. In case of a shortfall, it would be offset against the retained earnings. Where the carrying amount is lower than the face value and the total of the stock issuance premium, the capital reserve generated by the same type of treasury stocks exchanges would be credited.

Where subsidiary held the Group's stocks using the equity method to recognize the share of profit and loss and prepare financial statements, the subsidiary's stocks of the Group should be dealt with as treasury stocks.

(31) Shares-based payment
1) The shares-based payment agreement upon equity settlement was pursuant to the employee service acquired at fair value of the given equity commodities on the given day, and was recognized as compensation costs during the vesting period, and the equity was relatively adjusted. The fair value of equity commodities should be reflected with the influence of the market price vested conditions and the non-vested conditions. The recognized compensation cost was adjusted according to the expected amount of incentive rewards that meet the service condition and the non-market price vested condition until the final recognition amount was recognized in the vested amount.
2) The shares-based payment agreement settled in cash was based on the fair value of the liabilities assumed, recognized as compensation costs and liabilities within the vesting period, and was based on the fair value of the equity commodities given on each balance sheet date and settlement date to measure, any change recognized as profit or loss of the current year.
(32) Income tax
1) The income tax expenses comprise current and deferred income tax. Income tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the income tax is recognized in other comprehensive income or directly in equity, respectively.
2) The Group calculates the income tax payable for the current term exactly in accordance with the tax rates that had been enacted or substantially enacted in

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the countries for the income tax as of the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable relevant laws of income tax, and under the fact of situations, the income tax liabilities estimated shall be paid to tax collection authority. The unappropriated earnings having been consolidated were charged for the income tax. The income tax expense of unappropriated earnings was recognized based on the actual allocation of the earning as resolved in the shareholders’ meeting in the year ensuing the year in which the earnings were yielded.

3) Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the balance sheets. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted as of the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
4) Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
5) Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.
6) The Group's tax incentives oriented expenditures that comply with the statutory incentives were accounted with use of income tax deduction accounting. The unused income tax credit was transferred into the latter period of time within the scope as the credit ready for future use, duly recognized deferred income tax assets.
7) The difference between the previous year's estimated income tax of the Group and the adjustment difference approved by the tax collection authority was recognized as the adjustment items of the income tax of the current year.
(33) Recognition of revenues

After identifying the performance obligations under a customer contract, the Group allocated the transaction price to each performance obligation and recognized revenue when the performance obligations were fulfilled.

1) Sales revenues

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A. All products manufactured by the Group and sold into the market were recognized as revenue when the control over the product was transferred to the customers. To put it in more understandable terms, when the products were delivered to the customers, the customers have discretion on the channel and price of product sales, and the Group was not in any outstanding performance obligations that might affect the customers’ acceptance of the products. When the products were shipped to a designated location, the risk of obsolescence and loss has been transferred to the customers and the customers would accept the products according to the sales contract. The delivery of the products did not occur until there was objective evidence to prove all standards/criteria for acceptance have been met.
B. Where the Group provides standard warranty on the products sold and is obliged to refund for defective products, the provisions were recognized at the moment of sales.
C. Accounts receivable were recognized at the moment when the goods were delivered to the customers. At that timepoint, the Group was entitled to the unconditional rights to the contract price and the price could be received from the customers only after the time elapsed. The advance receipts before the arrival of the products was recognized as a contract liability.
D. The control of the ownership of the processed products was not transferred upon processing of the materials so that the income was not recognized when the material was forwarded.
2) Labor service revenues
A. Advertising revenues

The Group and the customers signed advertising broadcast contracts and recognized the revenues when the actual broadcast was completed based on the degree of fulfillment of the performance obligation. The degree of completion of the performance obligation was determined based on the percentage of the actual performance of the required services to the entire labor service under this Agreement.

B. Video revenues

The Group and the customers signed fundamental channel agency contracts to provide cable TV operators and other public broadcasters with self-made programs or transmission on behalf of channels through satellites for viewers through cable TV system or network platforms. Throughout the duration of the labor service contracts, the Group continually fulfilled the obligations to provide users with TV channel viewing rights and network bandwidth usage rights as well as other performance obligations. All revenues so received were recognized as income on a straight-line basis during the period of contract services.

C. Licensing revenues

The Group and the customers signed contracts to license the Group's film broadcasting rights and program copyrights to the customers. Where the licensing authorization was distinguishable, the licensing income was recognized during the licensing period according to the nature of the licensing authorization, or the timepoint of control of the right as transferred to the customers. When the Group intended to carry out events

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that would significantly affect the film broadcasting rights and program copyrights which would, in turn, directly affect the licensed customers and such events would not result in the transfer of labor services to customers, the nature of the licensing authorization was to provide access for the rights of intellectual property rights. The relevant royalties were recognized as income on a straight-line basis during the licensing period. In an event where the licensing did not meet the foregoing conditions and its nature was to provide customers with the right to use intellectual property rights, the income was recognized at the time of licensing transfer.

D. The customers fulfilled payment obligations in accordance with the payment schedule agreed in a contract. When the service provided by the Group exceeded the customers’ payment value, the payment was recognized as a contract asset. If the customer payable exceeds the labor service provided by the Group, it was recognized as a contract liability.

3) Refund liabilities

Sales and labor service revenues were recognized at the contract price net of estimated discounts and other similar discounts. The amounts recognized as revenues would be limited to the portion of the future height that was unlikely to undergo a major turnaround, and was included in each asset estimates updated on the balance sheet date. Sales and labor service estimated discounts payable to customers and other similar discounts as of the balance sheet date were recognized as refund liabilities.

4) Financing component

Under the contracts signed by and between the Group and the customers, the collection conditions of the sales and labor service transactions were consistent with the market practice. It was, therefore, judged that the contracts did not contain a significant financing component. In addition, the time interval for transferring the promised goods or labor services and receiving the consideration amidst the contracts was within one year. The significant financing component would not adjust the transaction price to reflect the time value of the currency.

5) Costs to acquire contracts from customers

Although the incremental costs incurred by the Group in obtaining a customer contract were expected to be recoverable, the relevant contract period was shorter than one year. These costs were, therefore, recognized as current operating costs or expenses at the moment of occurrence.

(34) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes expenses for the related costs for which the grants are intended to compensate. Such government grants related to property, plant and equipment were recognized as noncurrent liabilities, and were recognized as current profit or loss using the straight-line method based on the estimated useful life of the relevant assets.

Major sources leading to material accounting judgments, estimates and assumption uncertainties

The results of the Group’s consolidated financial statements would be affected by the

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adoption of accounting policies, accounting estimates and assumptions. Therefore, when the Group adopted the significant accounting policies under Note 4, the acquisition of assets from other sources would result in the carrying amount of assets and liabilities in the next information on significant adjustment risks in the consolidated financial statements that would require management to use appropriate professional judgment, estimates and assumption uncertainties. The Group’s estimates and relevant assumptions were based on the optimal estimates pursuant to the requirements of IFRS endorsed and issued to take effect by the FSC. Estimates and assumptions would be based on historical experience and other factors considered to be relevant, but actual results and estimates might differ. The Group continues to review the estimates and assumptions. Where the revision of the estimate would only affect the current year, the accounting estimate would be recognized in the current year. Where the estimation affects both the current year and the future period, then it would be recognized in the estimated and amended current year and future period.

(1) Major judgments to adopt accounting policies

In addition to an involvement in judgments related to and estimates (see (2) below), the management’s judgments in the process of adopting accounting policies that have the most significant impact on the recognized amounts of the financial statements are as follows:

1) Judgment of business model of financial asset classification

The Group evaluates the business model of financial assets based on the level of financial assets that are jointly managed to achieve a specific business purpose. This evaluation calls for consideration of all relevant evidence, including asset performance measurement methods, risks affecting performance, and the salary determination method of relevant managers, salary determination method where the judgment was required. The Group continuously assesses whether its business model judgment is appropriate, and monitors the financial assets carried at amortized cost and investment in debts instruments at fair value through other comprehensive income to look into the reasons for its disposition to assess whether the disposition would be consistent with the business model's objectives. Whenever the business model was found to have changed, the Group would postpone the adjustment of the subsequent classification of financial assets.

2) Investment property

The purpose of part of the property held by the Group was intended to earn rent or capital appreciation. It also includes property held for the purpose of which the future has not yet been determined. Other parts were used by the Group itself. When the respective parts could be solely sold, such property would not be classified under the investment property only the portion in the Group’s own use accounted for a not significant portion of the respective property.

3) Commitment to operating lease - the Group is the Lessor

The Group has signed commercial property agreements toward some property portfolios. Based on its evaluation of the agreed terms, the Group still retains significant risks and rewards of ownership of these properties and treats these leases as operating leases.

4) Leased term (Applicable to Year 2019)

In determining the lease term of the leased assets, the Group takes into account all relevant facts and circumstances that might generate economic incentives to exercise (or not to exercise) the option, including all facts and circumstances from the start of the lease to the day when the option is exercised with expected

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changes. The main factors taken into account include the contract terms and conditions during the period covered within the option, significant lease interest improvements during the contract period, and the importance of the underlying assets to the lessee's operations and the like. Significant changes in such matters or circumstances within the control of the Group when it occurred while the Group reassessed the lease term anew.

(2) Major accounting estimation & assumptions

The accounting estimates conducted by the Group were based on the reasonable expectations of future events on the grounds of the situation on a specific day, but the actual results might differ from the estimates, and the assets and liabilities of the next financial year might have significant adjustments to the risk of carrying amount and assumptions. Please note the following instructions:

1) Estimated impairment of financial assets

The impairment of accounts receivable and contract assets was estimated based on the Group's assumptions about the default rate and the expected loss rate. The Group took into account historical experience, current market conditions and forward-looking information to work out assumptions and select input values for impairment assessment. For more details regarding the important assumptions and input values please refer to Note 6(4). In the event that the actual future cash flow is below expected, it might cause significant impairment losses. The carrying amount of the Group’s receivables and contract assets was NT$2,513,717 thousand and NT$3,143,302 thousand, respectively, as of December 31, 2019 and 2018 (After deducting allowance losses at NT$10,219 thousand and NT$12,619 thousand, respectively)

2) Evaluation of inventory

Since inventory should be measured at the lower of cost or net realizable value, the Group shall use judgment and estimation to decide the net realizable value at the balance sheet date. Due to the rapid changes of the industrial environment, the Group assesses the amount of inventory on the balance sheet date that has undergone normal wear and tear, obsolescence or no market sales value, and will mark down the cost of inventories to the net realizable value. This assessment of inventories primarily uses product need within a certain period in the future as the basis of estimation, and thus material changes could occur. As of December 31, 2019 and 2018, the carrying amount of the Group's inventories was NT$1,673,157 thousand and NT$1,980,783 thousand, respectively. (After deducting loss on allowance for obsolescence and market price decline of inventories of NT$50,982 thousand and NT$59,566 thousand, respectively)

3) Fair value measurement and evaluation process

Where the assets and liabilities measured at fair value were not quoted in the active market, the Group would decide whether to outsource the valuation and determine the appropriate fair value technology according to relevant laws or judgments. Where the fair value was estimated, Level 1 input value could not be obtained for the value, the Group would refer to the analysis of the financial status and operating results of the investee, the latest transaction price, the quote of the same equity instrument in the non-active market, the quote of similar instruments in the active market, and the comparable company evaluation multiplier to determine the input value. If the actual changes in future input values and expectations would differ, fair value changes might occur. The Group regularly updated each input value according to market conditions to monitor

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whether fair value measurement was appropriate. For more details regarding the fair value evaluation techniques and input value, please refer to the descriptions of Note 12(4). As of December 31, 2019 and 2018, the Group's holdings of unlisted (OTC) company stocks and limited partnership investments showed the carrying amounts of NT$862,037 thousand and NT$726,191, thousand, respectively.

4) Evaluation on impairment of investment accounted for using the equity method

Whenever there was an indication of impairment that an investment accounted for using the equity method might have been impaired while the carrying amount could not be recovered, the Group immediately assessed the impairment of the investment. The Group assessed the impairment based on the discounted value of the expected future cash flow of the investee or cash dividends receivable to be expected and disposal of the discounted value of future cash flows from the investment to assess the recoverable amount and analyze the reasonableness of its related assumptions. As of December 31, 2019 and 2018 after the Group’s prudent assessment of the results, there showed no significant impairment loss.

5) Assessment onto the impairment of tangible assets, intangible assets (except goodwill) and other noncurrent assets

In the process of asset impairment assessment, the Group was required to rely on subjective judgment and asset usage patterns and industry characteristics to determine the independent cash flow of a particular asset group, years of useful life, the future revenue and expenses that might be cause significant impairment in the future due to economic condition changes or estimated changes caused by strategies. As of December 31, 2019 and 2018, the accumulated impairment of tangible assets, intangible assets (except goodwill) and other noncurrent assets recognized by the Group was NT$88,671 thousand and NT$85,510 thousand, respectively.

6) Evaluation on impairment in goodwill

Upon determination whether goodwill has been impaired, the use value of the cash-generating unit allocated to goodwill needs to be estimated. To calculate the use value, the management should estimate the future cash flows expected to be generated from the cash-generating unit and decide on appropriate discount rate of the use of the present value. If the actual cash flow became less than expected, significant impairment losses might occur. As of December 31, 2019 and 2018, the amount of goodwill recognized by the Group after the impairment loss were NT$674,070 thousand for both.

7) Realizability of deferred income tax assets

Deferred income tax assets were recognized when there is a possibility in the future that there would be sufficient taxable income for the purpose of deducting temporary differences. Upon assessment of the realizability of deferred income tax assets, significant accounting judgments and estimations of the management must be involved including expected future sales revenue growth and profit margins, usable income tax credits, tax planning and other assumptions. Any changes in the global economic environment, industrial environment and changes in laws and regulations might cause significant adjustment of deferred income tax assets. As of December 31, 2019 and 2018, the deferred income tax assets recognized by the Group were NT$55,493 thousand and NT$49,358 thousand respectively. The deferred income tax assets not recognized by the Group due to non-probable taxable income were to NT$ 12,014 thousand and

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NT$14,223 thousand, respectively.

8) Calculation of long-term employee benefits liabilities

Upon calculation of the present value of the benefit obligations, the Group must use judgments and estimates to determine the relevant actuarial hypotheses on the balance sheet date, including the discount rate and future salary growth rate. Any changes in actuarial assumptions should significantly affect the Group’s amount of defined benefit obligations. As of December 31, 2019 and 2018, the carrying amounts of the Group’s long-term employee benefits liabilities (including net defined benefit liabilities and provisions - noncurrent) were NT$95,210 thousand and NT$82,643 thousand, respectively.

9) Lessee's incremental loan interest rate (Applicable to Year 2019)

When determining the interest rate of the lessees' incremental loan used for discounting lease payments, the Group used the risk-free interest rate of the equivalent duration and currency as the reference interest rate, and discounted the estimated lessee's credit risk allowance and lease specific adjustments (e.g., asset characteristics and factors such as guarantees) to be taken into account.

Summary of Important Accounting Items

(1) Cash & cash equivalents

Items Cash and petty cash Checking deposits Demand deposits Time deposits with original maturity within three months Bills & bonds under Repurchase Agreements Total	December 31,2019 $ 1,905 31,885 433,139 1,271,594 1,664,860 $ 3,403,383	December 31,2018
		$ 1,580 25,637 462,637 1,308,800 930,800
		$ 2,729,454

1) The Group’s cash & cash equivalents have not been used for collateral or pledge.
2) As of December 31, 2019 and 2018, the interest rate range in the market for the Group’s time deposit with original maturity within three months was 0.60% to 2.24% and 0.60% to 0.65% per annum, respectively, either floating or on a fixed rate basis.
3) As of December 31, 2019 and 2018, the interest rate range in the market for the bills & bonds under Repurchase Agreements within three undertaken by the Group was 0.53% to 2.30% and 0.51% to 3.10%, respectively.
(2) Financial assets at fair value through profit or loss - current

Items Mandatorily measured at fair value through profit or loss Mutual fund beneficiary certificates Plus: Evaluation adjustment Total	December 31,2019 $ 171,982 234 $ 172,216	December 31,2018
		$ 39,000 20
		$ 39,020

1) For more details regarding financial assets at fair value through profit or loss - current, please see Notes 13(1) (2)-3.

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2) As of December 31, 2019 and 2018, the net gains recognized in the current profit or loss by the Company were NT$1,613 thousand and NT$114 thousand, respectively.
3) The financial assets at fair value through profit or loss - current held by the Group have not been used for collateral or pledge.

(3) Notes receivable

Items Total notes receivable Less: Allowance loss Net	December 31,2019 $ 361,582 - $ 361,582	December 31,2018
		$ 394,217 -
		$ 394,217

1) The Group's notes receivable have not been overdue and the expected credit loss rate was 0%.
2) The Group’s notes receivable have not been used for collateral or pledge.

(4) Accounts receivable (including related parties)

Items Total accounts of receivable Less: Allowance loss Subtotal Total accounts receivable - related parties Less: Allowance loss Subtotal Net	December 31,2019 $ 2,069,891 ( 10,219) 2,059,672 1,271 - 1,271 $ 2,060,943	December 31,2018
		$ 2,618,964 ( 12,619)
		2,606,345
		735 -
		735
		$ 2,607,080

1) The age analysis of accounts receivable (including related parties) and the allowance loss measured by the preparation matrix are as follows:

Account aging interval	December31,2019	December31,2019	December31,2019	December31,2018	December31,2018	December31,2018
	Total amount	Allowance loss	Net	Total amount $ 2,524,724 77,182 9,783 591 811 6,608 $2,619,699	Allowance loss	Net
Not overdue 1 - 30 days overdue 31 - 90 days overdue 91 - 180 days overdue 181 - 365 days overdue More than 365 days overdue Total	$ 2,054,465 3,964 6,822 120 91 5,700	$ - - 4,368 60 91 5,700	$ 2,054,465 3,964 2,454 60 - -		$ - - 5,001 591 419 6,608	$ 2,524,724 77,182 4,782 - 392 -
	$2,071,162	$10,219	$2,060,943		$12,619	$2,607,080

The above analysis is based on the number of days past due.

The expected credit loss rate of the Group's aforementioned account aging intervals (excluding abnormal amounts which should be recorded at 100%): Not overdue and overdue within 90 days from 0% to 50%; 91 to 365 days overdue from 30% to 100%, more than 365 days overdue 100%.

The Group's accounts receivable not overdue were expected to have a very low risk of credit loss; For other accounts receivable which had been overdue as of the balance sheet date, the Group has taken into account other credit

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enhancement protection, post-period collection, and deductions and the like. After reasonable and corroborable information, it is assessed that there was no significant change in its credit quality, and the credit risk has not increased significantly since the initial recognition. Therefore, the management of the Company expects that no credit loss of accounts receivable will be caused by default of transaction counterparties.

2) The Group adopted the simplified method of IFRS 9, and recognized the expected credit loss during the existence in the accounts receivable allowance loss. The expected credit loss during the existence was calculated using the reserve matrix, with consideration of the customers’ past default record and historical experience of collection, increase in delayed payments beyond the average credit period, and at the same time with consideration of the current financial status of customers, and observable national or regional industrial economic situation changes related to the arrears of receivables and future prospects such as outlook considerations. As the Group’s historical experience of credit losses indicates that there would be no significant differences in the loss patterns of different customer bases, the preparation matrix did not further distinguish the customer bases, only the accounts receivable days past due and actual conditions would determine the expected credit loss rate. The Group did not hold any collateral for these accounts receivable.

If there was evidence indicating that the counterparty was facing serious financial difficulties and the Group could not reasonably anticipate the recoverable amount, the Group would recognize 100% allowance loss or directly write off the related accounts receivable, but would, meanwhile, continue to recourse the activities due to the amount recovered and recognized in profit or loss.

3) Analysis of changes in allowance loss for accounts receivable (including related parties)

parties)
Items Beginning balance (IAS 39) Retrospective application of IFRS 9 adjustments Beginning balance (IFRS 9) Plus: Provision of impairment loss Less: Reversal of impairment loss Less: Actual write-off in the year has not been collected Ending balance	Year Ended December 31,2019 $ 12,619 - 12,619 - ( 1,876) ( 524) $ 10,219	Year Ended December 31,2018
		$ 17,781 -
		17,781 - ( 5,101) ( 61)
		$ 12,619

4) The Group’s accounts receivable (including related parties) have not been used for collateral, pledge.

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(5) Other receivables

(6)	Items Interest receivable Tax refund receivable Film procurement refundable Others Total Inventories Items Raw materials Supplies Work in process Partly-finished goods Finished goods By-products Raw materials in transit Subtotal Less: Allowance for loss of market diminution in value of inventories Net	December 31,2019 $ 23,657 31,109 5,227 3,712 $ 63,705 December31,2019 $ 318,497 174,594 196,180 464,949 186,986 1,688 381,245 1,724,139 ( 50,982) $ 1,673,157	December 31,2018
			$ 30,239 50,633 - 769
			$ 81,641
			December31,2018
			$ 503,927 179,646 180,486 565,418 350,778 3,475 256,619
			2,040,349 ( 59,566)
			$ 1,980,783

1) The amounts of sales costs linked up with inventory are as follows:

Items Inventory sales transferred to cost of sales Plus: Labor service costs Plus: Unamortized labor and manufacturing overhead Plus: Loss on net realizable value of inventory Plus: Loss on obsolescence of Inventories Less: Inventory adjustment credit (net) Less: Rally in net inventory realizable value Less: income of off-grades & scrap material sold Account recorded in operating costs	Year Ended December 31,2019 $ 16,455,902 1,323,989 63,523 - 90 ( 96) ( 7,962) ( 6,306) $ 17,829,140	Year Ended December 31,2018
		$ 19,217,243 1,356,840 106,878 12,875 - ( 121) - ( 7,925)
		$ 20,685,790

2) The Group’s operating costs, including the loss of net realizable value of inventories (gain on rebound) between January 1 and December 31, 2019 and 2018 were (NT$7,962) thousand and NT$12,875 thousand, respectively, due primarily to the stability of raw material prices and product quotations/due to decline.

3) The Group’s inventory has not been used for collateral or pledge.

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(7) Prepayments

Items Prepayment on sales Prepayment of short-term lease agreement fees/ rent Prepayment of insurance premium Prepayment of production fees Supplies inventory Advertising exchange commodities and giveaways Input tax Tax credit Others Total	December 31,2019 $ 10,030 932 16,317 416 2,617 2,462 33,581 707 6,021 $ 73,083	December 31,2018
		$ 28,161 1,003 18,503 132 2,519 2,014 31,268 922 9,019
		$ 93,541

(8) Other financial assets - current

Items Bank deposits with restricted use Time deposits with original maturity more than three months Bonds under Repurchase Agreements over three months Total	December 31,2019 $ 48,463 3,669,228 - $ 3,717,691	December 31,2018
		$ 11,371 2,348,514 339,060
		$ 2,698,945

1) The “bank deposits with restricted use” refers to a reserve account for liquidation with restricted use. Please see Note 8(2) for more details.
2) The time deposits with original maturity more than three months and bonds under Repurchase Agreements over three months held by the Group did not meet the definition of cash equivalents. They are, therefore, classified under other financial assets - current, as the effect of discounts during the short holding period was insignificant, which was measured by the amount of investment.
3) The interest rate range in the market for the Group’s time deposits with original maturity more than three months as of December 31, 2019 and 2018 were 0.65% - 2.89% and 0.90% - 3.32%, respectively.
4) The interest rate range in the market for the bonds under Repurchase Agreements over three months undertaken by the Group as of December 31, 2018, were 2.97% - 3.50% which the Group already committed to reverse repurchase not later than August 22, 2019.
5) The Group assessed that the expected credit risk of the above financial assets was not high, and the credit risk has not increased after the initial recognition.

(9) Other current assets - other

Items Cost of program broadcasting - current (Note)	December 31,2019 $ 73,554	December 31,2018
		$ 166,660

Note: Cost of program broadcasting - current, please see Notes 6(19)-1 for more details.

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(10) Financial assets at fair value through other comprehensive income - noncurrent

Items Listed (OTC) company stocks in Taiwan China Life Insurance Co., Ltd. China Development Financial Holding Corporation Unlisted (OTC) company stocks in Taiwan and abroad He Xin Venture Investment Enterprise Co., Ltd. TECO Nanotech Co., Ltd. Kuo Tsung Development Co., Ltd. Kuo Tsung Construction Development Co., Ltd. YODN Lighting Corp. Bridgestone Taiwan Co., Ltd. Jeoutai Technology Co., Ltd. Global Mobile Corp. Great Dream Pictures, Inc. Com2B Corp. Limited partnership interest in Taiwan and abroad CDIB Capital Asia Partners L.P. CDIB Capital Global Opportunities Fund L.P. China Development Asset Management Corporation's advantageous venture capital limited partnership Subtotal Plus: Evaluation adjustment Total	December 31, 2019 $ 1,116,736 1,123,868 18,412 219 5,000 5,000 9,754 77,104 26,604 14,400 10,000 8,961 369,754 246,937 106,602 3,139,351 1,349,570 $ 4,488,921	December 31, 2018
		$ 788,348 1,123,868 18,412 219 5,000 5,000 9,754 77,104 26,604 14,400 10,000 8,961 350,044 139,248 74,490
		2,651,452 1,568,774
		$ 4,220,226

1) The aforementioned investments held by the Group were not in a short-term profitable operating mode. The management believes that if the short-term fair value fluctuations of these investments were included in the profit or loss, and the aforementioned investment plans were inconsistent, they chose to designate these investments at fair value through other comprehensive income.
2) As of December 31, 2019, the Group newly invested in stocks of China Life Insurance Co., Ltd. in a total of 18,454 thousand shares in an amount of NT$380,153 thousand; as of December 31, 2019, the Group sold 5,000,000 shares of China Life Insurance Co., Ltd.’s stocks, in the price of NT$124,560 thousand.
3) The Group newly invested limited partnership interest of the CDIB Capital Asia Partners L.P. between January 1 and December 31, 2019 and 2018 in amounts of US$1,786 thousand (equivalent to NT$54,194 thousand) and US$738 thousand (equivalent to NT$22,499 thousand). Besides, the capital distribution of limited partnership interest between January 1 and December 31, 2019 and 2018 amounted to US$994 thousand (equivalent to NT$30,023 thousand) and US$313 thousand (equivalent to NT$9,585 thousand); as of December 31, 2019 and 2018, the Group's cumulative investment in CDIB Capital Asia Partners L.P.'s limited

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partnership interest amounted to US$12,062 thousand and US$11,270 thousand respectively, and the Group's estimated total investment amount was US$13,000 thousand.

4) The Group newly invested CDIB Capital Global Opportunities Fund L.P.’s limited partnership interest of US$5,052 thousand (equivalent to NT$151,452 thousand) and US$ 4,534 thousand (equivalent to NT$139,248 thousand) between January 1 and December 31, 2019 and 2018,; in addition, the limited partnership interest allocated capital between January 1 and December 31, 2019 and 2018 amounted to US$ 1,349 thousand (equivalent to NT$40,432 thousand) and NT$0, respectively; as of December 31, 2019 and 2018, the Group's cumulative investment in CDIB Capital Global Opportunities Fund L.P.'s limited partnership interest was US$8,237 thousand and US$4,534 thousand, respectively, and the estimated total investment amount of the Group was US$30,000 thousand.
5) The Group's newly invested in China Development Asset Management Corporation's advantageous venture capital limited partnership interest between January 1 and December 31, 2019 and 2018 in amounts of NT$35,698 thousand and NT$74,490 thousand respectively; the limited partnership equity allocated capital between January 1 and December 31, 2019 and 2018 amounted to NT$3,586 thousand and NT$0, respectively; as of December 31, 2019 and 2018, the Group's cumulative investment in China Development Asset Management Corporation's advantageous venture capital limited partnership interest were NT$106,602 thousand and NT$74,490 thousand, respectively, and the Group's estimated total investment amount was to NT$200,000 thousand.
6) The Group held investment in structured entity equity as a limited partnership interest, so there was no transaction volume and unit transaction price, and it only bore the rights and obligations within the scope of the investment contract which had no significant influence on such investment. Accordingly, the maximum exposure amount on the balance sheet date was just the carrying amount of these financial assets.
7) The Group's net losses recognized in other comprehensive income between January 1 and December 31, 2019 and 2018 due to changes in fair value were NT$146,408 thousand and NT$280,712 thousand, respectively and accumulated in other equity; in addition, the amount of accumulative gain (loss) due to disposal of investment transferred directly to the retained earnings were NT$72,795 thousand and NT$0, respectively, and the share attributable to the owners of the parent company were NT$45,344 thousand and NT$0, respectively.
8) The financial assets at fair values through other comprehensive income - noncurrent held by the Group have not been used for collateral or pledge.

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(11) Investments accounted for using the equity method

1) Investments in associates

Name of associate	December 31,2019	December 31,2019	December 31,2018	December 31,2018
	Carryingamount	Shareholding %	Carryingamount	Shareholding %
Zhenjiang Chimei Chemical Co., Ltd. Zhangzhou Chimei Chemical Co., Ltd. Total	$ 5,460,356 1,137,377	30.40% 30.40%	$ 5,509,893 717,809	30.40% 30.40%
	$ 6,597,733		$ 6,227,702

2) The shares of profits or losses and other comprehensive income of associates accounted for using the equity method between January 1 and December 31, 2019 and 2018 were recognized based on the financial statements audited by other certified public accountants of international CPA firms in the cooperation relationship with the CPA firms of the Republic of China during the same period of associates.
3) Shares of profits or losses of associates accounted for using the equity method and other comprehensive income are as follows:

Name of associate	Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2018	Year Ended December 31,2018
	Recognized in current profit/loss	Recognized in other comprehensive income	Recognized in current profit/loss	Recognized in other comprehensive income
Zhenjiang Chimei Chemical Co., Ltd. Zhangzhou Chimei Chemical Co., Ltd. Total	$ 1,237,525 ( 15,057)	($ 78,410) ( 25,756)	$ 988,415 -	($ 349,901) 908
	$ 1,222,468	($ 104,166)	$ 988,415	($ 348,993)

4 ) The Company wired out the cpital worth CNY160,512 thousand (equivalent to US$23,340 thousand /NT$716,901 thousand) in August 2018 to invest in Zhangzhou Chimei Chemical Co., Ltd.. The said investment has been submitted to and approved by the Investment Commission, Ministry of Economic Affairs with Letter Jing-Shen-II-Zi 10700087220 dated June 4, 2018.
5) The Group used the earnings allocated from Zhenjiang Chimei Chemical Co., Ltd. to launch capital increase into Zhangzhou Chimei Chemical Co., Ltd. in an amount of CNY107,008 thousand (equivalent to US$15,923 thousand/NT$477,374 thousand) in March 2019. The said investment was duly approved by the Investment Commission, Ministry of Economic Affairs with Letter Jing-Shen -II-Zi 10800084900 dated April 23, 2019.
6) The Group used the earnings allocated from Zhenjiang Chimei Chemical Co., Ltd. to launch capital increase into Zhangzhou Chimei Chemical Co., Ltd. in the total amount of CNY111,872 thousand (equivalent to US$15,950 thousand/NT$478,169 thousand) in November 2019. The said investment was duly approved by the Investment Commission, Ministry of Economic Affairs with Letter Jing-Shen-II-Zi 10800395800 dated January 7, 2020. As of December 31, 2019, nevertheless, while Zhangzhou Chimei Chemical Co., Ltd. had not yet completed the process of capital increase verification, that amount

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was recorded as investment paid in advance. Please see Note 6(17) for more details.

7) Investment accounted for using the equity method held by the Group has not been used for collateral or pledge.
8) For more details regarding the attribute in business of the aforementioned associates, their major business premises and country of incorporation registration, please see Note 13(3), information of investment in Mainland China.
9) The summarized financial information in respect of the Group's key associates are as follows: (The summarized financial information of the Group’s key associates hereunder were prepared on the grounds of IFRSs financial statements by the associates with the adjustment already reflected at the time of equity method).
A. Zhenjiang Chimei Chemical Co., Ltd.

 Balance Sheets

 Balance Sheets
Items Current assets Noncurrent assets Current liabilities Noncurrent liabilities Equity The Company’s shareholding ratio The interests bestowed to the Company Unrealized profit or loss Carrying amount of investment in associates	December 31,2019 $ 22,472,072 9,362,856 ( 9,917,702) ( 1,492,342) 20,424,884 30.40% 6,209,165 ( 748,809) $ 5,460,356	December 31,2018
		$ 27,101,894 9,028,267 ( 15,344,042) -
		20,786,119 30.40%
		6,318,980 ( 809,087)
		$ 5,509,893

 Statements of Comprehensive Income

 Statements of Comprehens	ive Income
Items Operating revenues Net profit for the year Other comprehensive income Total comprehensive income Dividend received from associates	Year Ended December 31,2019 $ 63,912,288 4,070,804 - $ 4,070,804 $ 955,543	Year Ended December 31,2018
		$ 72,921,032
		3,251,366 -
		$ 3,251,366
		$ 808,265

Note: As of December 31, 2019, the Group directly remitted the dividend received from Zhenjiang Chimei Chemical Co., Ltd. to Zhangzhou Chimei Chemical Co., Ltd. used as the capital increase in cash.

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B. Zhangzhou Chimei Chemical Co., Ltd.

 Balance Sheets

 Balance Sheets
Items Current assets Noncurrent assets Current liabilities Noncurrent liabilities Equity The Company’s shareholding ratio Interests bestowed to the Company Unrealized profit or loss Carrying amount of investment in associates	December 31,2019 $ 1,355,631 2,667,447 ( 281,707) - 3,741,371 30.40% 1,137,377 - $ 1,137,377	December 31,2018
		$ 2,279,983 84,477 ( 3,247) -
		2,361,213 30.40%
		717,809 -
		$ 717,809

 Statements of Comprehensive Income

 Statements of Comprehens	ive Income
Items Operating revenues Net profit (loss) for the year Other comprehensive income Total comprehensive income Dividend received from associates	Year Ended December 31,2019 $ - ( 49,528) - ($ 49,528) $ -	Year Ended December 31,2018
		$ -
		- -
		$ -
		$ -

Note: Zhangzhou Chimei Chemical Co., Ltd. was incorporated in August 2018 without any significant profit or loss occurring during the initial period until 2018.

(12) Property, plant and equipment

Items Land Buildings & constructions Machinery & equipment Transportation facilities Other equipment Construction in progress and Equipment to be inspected Total costs Less: Accumulated depreciation Less: Accumulated impairment Net	December 31,2019 $ 3,409,062 1,609,846 13,466,251 101,522 1,532,831 22,178 20,141,690 ( 13,278,832) ( 55,517) $ 6,807,341	December 31,2018
		$ 3,410,682 1,599,726 13,468,888 103,537 1,393,925 51,489
		20,028,247 ( 12,545,939) ( 54,835)
		$ 7,427,473

Items	Land $ 3,410,682 - 5 ( 1,625) -	Buildings & constructions	Machinery & equipment	Transportation facilities	Other equipment	Construction in progress and equipment to be inspected	Total
Cost: Balance at January 1, 2019 IFRS 16 retrospective application transfer-out Addition Disposal Reclassification (Note)		$ 1,599,726 - 10,154 ( 4,274) 6,734	$ 13,468,888 - 36,261 ( 64,164) 32,272	$ 103,537 - 3,412 (4,818) -	$ 1,393,925 ( 3,889) 155,827 ( 58,566) 46,723	$ 51,489 - 73,869 - ( 103,180)	$ 20,028,247 ( 3,889) 279,528 ( 133,447) ( 17,451)

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Items	Land	Buildings & constructions	Machinery & equipment	Transportation facilities	Other equipment	Construction in progress and equipment to be inspected	Total
Effects of exchange rate Balance at December 31, 2019 Accumulated depreciation and impairment loss: Balance at January 1, 2019 IFRS 16 retrospective application transfer-out Depreciation expenses Disposal Impairment loss Reclassification Effects of exchange rate Balance at December 31, 2019 Items	-	( 2,494)	( 7,006)	( 609)	( 1,189)	-	( 11,298)
	$ 3,409,062	$ 1,609,846	$ 13,466,251	$ 101,522	$ 1,532,831	$ 22,178	$ 20,141,690
	$ - - - - - - -	$ 931,742 - 52,881 ( 4,330) - - ( 1,673)	$ 10,752,940 - 658,332 ( 63,938) - - ( 6,207)	$ 86,597 - 5,561 ( 4,740) - - ( 440)	$ 829,495 ( 972) 154,560 ( 58,202) 3,773 - ( 1,030)	$ - - - - - - -	$ 12,600,774 ( 972) 871,334 ( 131,210) 3,773 - ( 9,350)
	$ -	$ 978,620	$ 11,341,127	$ 86,978	$ 927,624	$ -	$ 13,334,349
	Land	Buildings & constructions	Machinery & equipment	Transportation facilities	Other equipment	Construction in progress and equipment to be inspected	Total
Cost: Balance at January 1, 2018 Addition Disposal Reclassification (Note) Effects of exchange rate Balance at December 31, 2018 Accumulated depreciation and impairment loss: Balance at January 1, 2018 Depreciation expenses Disposal Impairment loss Effects of exchange rate Balance at December 31, 2018	$ 3,410,682 - - - -	$ 1,587,140 12,887 ( 3,718) 4,791 ( 1,374)	$ 13,392,891 165,108 ( 161,687) 76,043 ( 3,467)	$ 101,235 4,590 ( 3,511) 1,580 ( 357)	$ 1,277,374 313,477 ( 176,635) ( 19,747) ( 544)	$ 102,532 57,655 - ( 108,698) -	$ 19,871,854 553,717 ( 345,551) ( 46,031) ( 5,742)
	$ 3,410,682	$ 1,599,726	$ 13,468,888	$ 103,537	$ 1,393,925	$ 51,489	$ 20,028,247
	$ - - - - -	$ 890,430 46,025 ( 3,676) - ( 1,037)	$ 10,250,008 667,312 ( 162,121) - ( 2,259)	$ 82,246 7,990 ( 3,391) - ( 248)	$ 870,937 134,211 ( 175,179) - ( 474)	$ - - - - -	$ 12,093,621 855,538 ( 344,367) - ( 4,018)
	$ -	$ 931,742	$ 10,752,940	$ 86,597	$ 829,495	$ -	$ 12,600,774

Note: Net changes in the reclassification in property, plant and equipment converted into expenses in the amounts of NT$17,451 thousand and NT$46,031 thousand respectively between January 1 and December 31, 2019 and 2018.
1) Starting from January 1, 2019, the Group adopted IFRS 16. Pursuant to the transitional provisions set forth under IFRS 16, the Group chose not to reclassify the period for comparison. The Group’s effects of property, plant and equipment in the retrospective application to IFRS 16, the major effects used to adopt IAS 17 to recognize the finance leases for reclassification into right-of-use assets, please see Note 3(1) and Note 6(13).
2) The Group’s property, plant and equipment were primarily provided for own use. Part of the usable spaces of the property was leased to others as operating lease.

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3) The addition and the acquisition of the property, plant and equipment in the statements of in the current year are reconciled as follows:

Items Increase in property, plant and equipment Plus: Decrease (increase) in the payables for equipment Less: Finance lease rented Amounts paid in cash	Year Ended December 31,2019 $ 279,528 14,865 - $ 294,393	Year Ended December 31,2018
		$ 553,717 ( 14,036) ( 3,889)
		$ 535,792

4) Cost capitalized amount and interest rate range of the property, plant and equipment based loans: Nil
5) The major composition items of the Group’s property, plant and equipment were depreciated in the straight-line method based on the useful life as follows:
A. Buildings & constructions

Buildings, plants	26	- 56 years	Building affiliated	11 - 21 years
and main			equipment
constructions
Air conditioning	5 - 8 years		Fire protection	4 - 6 years
equipment			equipment
Road greening	4	- 11 years
Machinery equipment
Chemical	8	- 25 years	Steam and	16 years
equipment			electricity
			equipment
Gas supply		10 years	Broadcasting	5 - 6 years
equipment			equipment
Others		7 years
Transportation facilities
SNG Van	5 - 7 years		OB outside	6 - 7 years
			Broadcasting Van
Others	2 - 6 years
Other equipment
Furniture & office	4 - 7 years		Leasehold	10 years
equipment			improvement
Catering equipment		3 years	Others	3 - 8 years

B. Machinery equipment
C. Transportation facilities
D. Other equipment

6) As of December 31, 2019 while some equipment capacity was not fully utilized,

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the Group expected that the future cash inflow of such equipment would decrease, and, in turn, estimated that recoverable amount was NT$0 less than the carrying amount so that it would recognize the impairment loss of other equipment amounting to NT$3,773 thousand. Such impairment loss was already included in the consolidated statements of comprehensive income under other gains and losses. The Group used the value in use to determine the recoverable amount of such equipment. The discount rate adopted as of December 31, 2019 was 6.21%. The Group recognized that the accumulated impairment amounts for property, plant and equipment between January 1 and December 31, 2019 and 2018 were NT$55,517 thousand and NT$54,835 thousand, respectively.

7) For information regarding the collateral provided with property, plant and equipment, please see Note 8 for more details.
(13) Lease agreement

Year 2019

1) Right-of-use assets

Year 2019 1) Right-of-use assets
Items Land Buildings & constructions Machinery & equipment Transportation facilities Total costs Less: Accumulated depreciation Less: Accumulated impairment Net	December 31,2019 $ 8,789 449,312 35,377 16,721 510,199 ( 76,950) - $ 433,249	December 31,2018
		(Note)

Note: Starting from January 1, 2019, the Group adopted IFRS 16. Pursuant to the transitional provisions under IFRS 16, the Group chose not to reclassify the period for comparison.

Items	Land	Buildings & constructions	Machinery & equipment	Transportation facilities	Total
Cost: Balance at January 1, 2019 IFRS 16 retrospective application transfer-in Addition/Reclassification Derecognition Effects of exchange rate Balance at December 31, 2019 Items	$ - 9,130 - - ( 341)	$ - 440,099 9,552 - ( 339)	$ - 35,377 - - -	$ - 10,153 6,568 - -	$ - 494,759 16,120 - ( 680)
	$ 8,789	$ 449,312	$ 35,377	$ 16,721	$ 510,199
	Land	Buildings & constructions	Machinery & equipment	Transportation facilities	Total
Accumulated depreciation: Balance at January 1, 2019 IFRS 16 retrospective application transfer-in Depreciation expenses Derecognition Effects of exchange rate Balance at December 31, 2019	$ - - 271 - ( 5)	$ - - 60,825 - ( 66)	$ - - 8,324 - -	$ - 972 6,629 - -	$ - 972 76,049 - ( 71)
	$ 266	$ 60,759	$ 8,324	$ 7,601	$ 76,950

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2) Lease liabilities

December 31,2019	December 31,2019	December 31,2018	December 31,2018
Current	Noncurrent	Current	Noncurrent
$ - 58,645 8,990 5,751	$ - 332,361 18,869 3,417	(Note)	(Note)
$ 73,386	$ 354,647

Note: Starting from January 1, 2019, the Group adopted IFRS 16. Pursuant to the transitional provisions under IFRS 16, the Group chose not to reclassify the period for comparison.

Items	Land	Buildings & constructions	Machinery & equipment	Transportation facilities	Total
Lease liabilities: Balance at January 1, 2019 IFRS 16 retrospective application transfer-in Addition/Reclassification Derecognition Repayment of principal of lease liabilities Effects of exchange rate Balance at December 31, 2019	$ - - - - - -	$ - 440,099 9,552 - ( 58,370) ( 275)	$ - 35,377 - - ( 7,518) -	$ - 9,199 6,568 - ( 6,599) -	$ - 484,675 16,120 - ( 72,487) ( 275)
	$ -	$ 391,006	$ 27,859	$ 9,168	$ 428,033

A. The lease term of lease liabilities and the range of discount rate are as follows:

Estimated lease term

(including lease renewal

follows:	Estimated lease term (including lease renewal
Items Land Buildings & constructions Machinery & equipment Transportation facilities	rights) 50 years 2 - 13 years 4 years 2 - 3 years	December 31,2019
		- 0.63% - 4.30% 0.75% 0.90% -1.50%

B. The maturity of the Company's lease liabilities are analyzed below:

Items Below 1 year Over 1 year but below 5 years Over 5 years but below 10 years Over 10 years but below15 years Over 15 years but below 20 years Over 20 years Total undiscounted lease payments	December 31,2019
	$ 77,508 240,988 122,461 2,000 - -
	$ 442,957

3) Major lease events and clauses

A. The Group leased the land in the People’s Republic of China for use as a production plants and office spaces for land use right in 50 years. The entire rents should be paid up in a lump-sum at the time of execution of this Lease Agreement. The Group was not entitled to procure the land upon expiry of the duration of land use right. The Group was entitled to the act of disposition such as land use right, income right, transfer and

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lease within the land use limit, and the Group is responsible to pay a variety of taxes as required.

In addition, the subject assets leased by the Group include buildings & constructions, machinery equipment and transportation facilities, and the like. At the end of the lease term, the Group held no preferential acquisition rights for the leased target assets, and some leases were attached to lease term renewal right after expiration. The lease agreement was negotiated individually and contained various terms and conditions. Some lease agreements stipulate that the lease payment may be adjusted according to the consumer price index. Assets other than leases should not be used as loan collateral, and it was agreed that unless with the consent of the lessor, the Group should not sublet or transfer the Subject Premises either in whole or in part. Except these facts, the lease agreement was free of any other restrictions.

B. Option to prolong the lease

The part of the Subject Premises covered within the Group's lease agreement includes the extension option entitled to the Group. Under the general practice for the lease agreement, the Group was bestowed with the maximum possible operating flexibility and effective use of assets. While the Group resolved to enter into the lease term, the Group already took into account all the facts and circumstances that will result in the economic incentives generated from the exercise of extension option. Therefore, upon the estimation for the exercise of extension option, as of December 31, 2019, the right-of-use assets and the lease liabilities increased by NT$279,050 thousand and NT$280,427 thousand, respectively.

C. Impact of variable lease payments on lease liabilities

In the Group's lease agreement, the variable lease payment terms are subject to storage/usage link. The variable payment depends on the actual use of the underlying assets. The variable payment terms are used for many reasons, mainly for profit control and operating flexibility to minimize fixed costs. The changes in storage/usage of lease payments are recognized as expenses during the period that triggers these payment terms.

4) Sublet: The Group sub-leases the right to use part of the leased spaces (parking spaces) under a short-term operating lease.
5) Other lease information

The Group’s agreement to lease investment property by means of operating lease is detailed in Note 6(14)-6.

A. The profit or loss details related to the lease agreement are as follows:

Items Expenses attributable to short-term lease agreement Expenses attributable to low-value assets lease Expenses paid under variable lease Total Interest expense for lease liabilities	Year Ended December 31,2019
	$ 6,112 10 4,503
	$ 10,625
	$ 4,794

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Gain from sublet in right-of-use assets Profit (loss) generated from back-lease transaction after sales Profit (loss) generated from amendment to lease transaction	$ 938 $ - $ -

The Group chose to apply recognition exemptions for short-term leases and low-value asset leases, and did not recognize related right-of-use assets and lease liabilities for these leases. As of December 31, 2019 the short-term lease commitment amount with recognition exemptions was NT$1,143 thousand.

B. The total lease cash outflow of the Group during January 1 - December 31, 2019 totaled at NT$87,906 thousand.
C. The right-of-use assets prove no impairment as indicated by the result of the Group’s prudential evaluation.

Year 2018

Commitment to operating lease - The Group was as the lessee

The Group leased factory buildings, offices, dormitories, warehouses, storage tanks, and official vehicles in line with its business needs. The lease agreements signed by the Group were non-cancellable operating lease agreements. Most of the lease agreements could be renewed at the market price at the end of the lease term. Due to the non-cancellable lease agreements of the Group, the estimated total amount of minimum lease payments for each year is as follows:

Items Below 1 year Over 1 year but below 5 years Over 5 years Total	December 31,2018
	$ 71,059 116,247 18,964
	$ 206,270

(14) Investment property

Items Land Buildings & constructions Subtotal Less: Accumulated depreciation Less: Accumulated impairment Net Items Cost: Balance at January 1, 2019 $ Additions Disposal Effects of exchange rate Balance at December 31, 2019 $	Items Land Buildings & constructions Subtotal Less: Accumulated depreciation Less: Accumulated impairment Net Items Cost: Balance at January 1, 2019 $ Additions Disposal Effects of exchange rate Balance at December 31, 2019 $	December 31,2019 December 31,2018 $ 60,363 $ 60,363 71,208 71,208 131,571 131,571 ( 52,689) ( 51,728) - - $ 78,882 $ 79,843 Land Buildings & constructions Total 60,363 $ 71,208 $ 131,571 - - - - - - - - - 60,363 $ 71,208 $ 131,571
		$
		(
		$
		Land 60,363 - - - 60,363
	$
	$

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Accumulated depreciation and impairment: Balance at January 1, 2019 Depreciation expenses Disposal Effects of exchange rate Balance at December 31, 2019 Items Cost: Balance at January 1, 2018 Additions Disposal Effects of exchange rate Balance at December 31, 2018 Accumulated depreciation and impairment : Balance at January 1, 2018 Depreciation expenses Disposal Effects of exchange rate Balance at December 31, 2018	$ - - - - $ - Land $ 60,363 - - - $ 60,363 $ - - - - $ -	$ 51,728 961 - - $ 52,689 Buildings & constructions $ 71,208 - - - $ 71,208 $ 50,705 1,023 - - $ 51,728	$ 51,728 961 - -
			$ 52,689
			Total
			$ 131,571 - - -
			$ 131,571
			$ 50,705 1,023 - -
			$ 51,728

1) Cost capitalized amount of cost and interest rate range of investment property based loans: Nil

2) Rent revenues from investment property and direct operating expenses:

Items Rent revenues from investment property Direct operating expenses arising from investment property that generated rental income in current year Direct operating expenses arising from investment property that did not generate rental income in current year	Year Ended December 31,2019 $ 5,400 $ 961 $ -	Year Ended December 31,2018
		$ 5,400
		$ 1,023
		$ -

3) The Group's investment property is located in the Dali District of Taichung City. Where the land is oriented to software industry and where the comparable market transactions are infrequent and reliable alternative fair value estimates would be impractical, so the fair value cannot be determined reliably.
4) The investment property has no impairment as indicated by the result of the Group’s prudential evaluation.
5) The Group’s investment property is attributed as the Group’s own interests and has not been used for collateral or pledge.
6) Lease agreements - The Group is the Lessee.

The investment property leased outward by the Group includes land and buildings & constructions, and the like. The lease agreement period is 2 years. At the end of the lease term, the lessee is not entitled to preferential

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privilege to renew the leasehold. At the end of the duration, the most of lease agreement could be renewed according to the market price, and include terms that could adjust the rent according to the annual market environment. The Group leases outward the investment property under the operating lease. The total future lease payments are as follows:

Items The first year The second year The third year The fourth year The fifth year Over 5 years Total	December 31,2019 $ 6,000 6,000 - - - - $ 12,000	December 31,2018
		$ 5,400 - - - - -
		$ 5,400

(15) Intangible assets

Items Goodwill Less: Accumulated impairment Net	December 31,2019 $ 674,070 - $ 674,070	December 31,2018
		$ 674,070 -
		$ 674,070

1) The intangible assets have no significant impairment as indicated by the result of the Group’s prudential evaluation.
2) Goodwill has been allocated to the Group's cash-generating units identified by the operating segment:

by the operating segment:
Items Goodwill Television Media Department Other departments Total	December 31,2019 $ 658,915 15,155 $ 674,070	December 31,2018
		$ 658,915 15,155
		$ 674,070

3) Goodwill has been allocated to the cash-generating units identified by the Group. The recoverable amount was evaluated based on use value which was calculated based on the pre-tax cash flow forecast of the management’s financial budget. The Group’s recoverable amount calculated based on use value exceeded the carrying amount, so the goodwill has not suffered significant impairments and has been mainly used to consider gross profit rate, growth rate and discount rate for use value calculation. The Group’s management determined the budget gross profit rate based on the previous performance and its expectations for market development. The weighting average growth rate proved consistent with the forecast of the industry report. The discount rate used was the pre-tax rate and reflected the specific risks of the relevant operating segment.

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(16) Refundable deposits

Items Performance bond Lease security deposit - as a lessee Environmental protection guarantee bond Others Total	December 31,2019 $ 887 12,371 2,000 1,186 $ 16,444	December 31,2018
		$ 805 12,345 2,000 1,514
		$ 16,664

(17) Investment paid in advance

In November 2019, the Group used the earnings allocated from Zhenjiang Chimei Chemical Co., Ltd. to launch capital increase into Zhangzhou Chimei Chemical Co., Ltd. in a total amount of CNY111,872 thousand (equivalent to US$15,950 thousand/NT$478,169 thousand). The aforementioned investment has been approved by the Investment Commission, Ministry of Economic Affairs with Letter Jing-Sheng-II-Zi 10800395800 dated January 7, 2020. As of December 31, 2019 while Zhangzhou Chimei Chemical Co., Ltd. had not yet completed the process for capital verification, that investment in capital increase was recorded under investment paid in advance.

(18) Long-term rent paid in advance

Items Land use right	December 31,2019 (Note)	December 31,2018
		$ 9,130

1) Starting from January 1, 2019, the Group adopted IFRS 16 instead of the previous use of IAS 17 and then, as a result, reclassified the long-term rent paid in advance into right-of-use assets. Further pursuant to the transitional provision under IFRS 16, the Group chose not to reclassify the comparison period. Please see Note 3(1) and Note 6(13).
2) Land use right was acquired from the Land Administration Bureau of the People’s Republic of China and used as a production plant and office building. The right of use lasts for 50 years. The Group was entitled to the land use right within the land use duration, the right to receive, transfer and lease and such disposal powers equally. The Group was, meanwhile, obliged to pay various taxes and fees due to use of land.
3) As of December 31, 2018, the amount amortized for the land use right came to NT$279 thousand. The single-line item by functional category is under operating costs.
4) The land use right has no impairment as indicated by the result of the Group’s prudential evaluation.
5) The Group’s land use right has not been used for guarantee, pledge.

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(19) Other noncurrent assets - other

Items Cost of program broadcasting - noncurrent Long-term prepaid expenses Catering tableware Long-term receivables Total	December 31,2019 $ 221,445 5,135 1,406 120 $ 228,106	December 31,2018
		$ 298,492 4,741 - 187
		$ 303,420

1) The cost of program broadcasting included the cost of outsourcing film broadcasting rights, outsourcing filming or self-made programs and the like. The relevant details are as follows:

The relevant details are as follows:
Items Movie film library Film purchase paid in advance Film production paid in advance Subtotal Less: Accumulated impairment - cost of program broadcasting Less: Portion expected to be amortized within one year Cost of program broadcasting - noncurrent	December 31,2019 $ 234,824 71,559 21,770 328,153 ( 33,154) ( 73,554) $ 221,445	December 31,2018
		$ 285,926 174,139 35,762
		495,827 ( 30,675) ( 166,660)
		$ 298,492

The portion expected to be amortized within one year was recorded in other current assets - others. Please see Note 6(9) for more details.

2) While some of the Group’s broadcast programs were sold not well in the market at the box office or were not broadcast fat all or a long period of time between January 1 and December 31, 2019 and 2018, the Group expected that the future cash inflow of these broadcast programs would drop, resulting in the estimated recoverable amounts at NT$27,458 thousand and NT$38,252 thousand, respectively below the carrying amounts. The Group, as a result, recognized the impairment loss of these broadcasts between January 1 and December 31, 2019 and 2018 at NT$4,723 thousand and NT$10,007 thousand respectively. The Group adopted the value in use to determine the recoverable amounts of these broadcasts. The adopted discount rates were 7.62% and 9.20%, respectively. Such impairment loss has been recorded under non-operating income and expenditures - other gains and losses in the statements of comprehensive income between January 1 and December 31, 2019 and 2018. As of December 31, 2019 and 2018, the amount of accumulated impairment recognized by the Group for broadcasting programs were NT$33,154 thousand and NT$30,675 thousand, respectively.
3) The program broadcasting held by the Group has not been used for collateral or pledge.
4) The single-line items for all amortization of the cost of program broadcasting, long-term prepaid expenses and catering tableware are as follows:

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Items Operating costs Operating expenses Total	Year Ended December 31,2019 $ 729,367 2,285 $ 731,652	Year Ended December 31,2018 $ 737,594 3,362 $ 740,956

5) Catering tableware refers to cloth towels and general tableware, amortized on a straight-line basis for three years. The long-term receivables were loans granted employees without interest for vehicular purchase.

(20) Short-term loan

December 31,2019	December 31,2019	December 31,2019
Amount	Interest rate range	Amount
$ 20,000 953	1.15%`～`1.20% 2.28%	$ 2,240 593
$ 20,953		$ 2,833

The Group and the banks have signed short-term comprehensive credit extension agreements for which the Group provided a promissory notes as a commitment to repay the loan. For more details regarding pledge provided for short-term loans, please see Note 8(1) and Note 9-2.

(21) Other payables

Items Salaries and bonuses payable Compensation to employee payable Remuneration to directors and supervisors payable Interest payable Freight payable Taxes payable Insurance premium payable Utilities payable Repair & maintenance expenses payable Service charge payable Labor service cost payable Equipment payable Others Total	December 31,2019 $ 275,773 34,607 51,039 14 20,641 20,307 9,689 5,907 15,917 10,610 5,330 5,606 35,143 $ 490,583	December 31,2018
		$ 388,766 52,043 77,145 - 19,680 20,704 8,827 8,324 22,227 18,433 4,823 20,471 27,817
		$ 669,260

(22) Provisions - current

Items Employee benefits - payment on leave	December 31,2019 $ 17,576	December 31,2018
		$ 17,015

1) The provisions of employee benefits - current refer to an estimate of the employee’s vested right for service leave. In most cases, sick leave and

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maternity leave or paternity leave are contingent in attribute, depending on future events and instead of being accumulated so such costs would be recognized only when the fact of leave takes place.

2) Information of variation in the provisions of employee benefits – current is as follows:

	follows:
(23) (24) (25)	Items Beginning balance Additional amount for the year Utilized amount for the year Reversal of unutilized amount for the year Ending balance Advance receipts Items Rents collected in advance Others Total Other current liabilities - other Items All collections Others Total Provisions - noncurrent Items Other long-term employee benefits plans	Year Ended December 31,2019 $ 17,015 25,047 ( 22,492) ( 1,994) $ 17,576 December 31,2019 $ 71 84 $ 155 December 31,2019 $ 5,807 290 $ 6,097 December 31,2019 $ 10,175	Year Ended December 31,2018
			$ 17,072 24,308 ( 20,532) ( 3,833)
			$ 17,015
			December 31,2018
			$ 71 81
			$ 152
			December 31,2018
			$ 6,502 172
			$ 6,674
			December 31,2018
			$ 8,486

1) The other long-term employee benefits plans of the Group are the seniority service bonuses and consolation money for employees. The payment criteria for long-term bonuses and consolation money were calculated based on the basis of the service seniority acquired and accumulated.

2) The Group has recognized other long-term employee benefits obligations. The composition of obligatory liabilities is as follows:

Items Present value of other long-term employee benefits obligations Fair value of plan assets Other long-term employee benefits liabilities, net	December 31,2019 $ 10,175 - $ 10,175	December 31,2018
		$ 8,486 -
		$ 8,486

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3) Change in other long-term employee benefits liabilities, net is as follows:

Change in other long-term employee	benefits liabilities, net	is as follows:
Items Beginning balance Other long-term employee benefits costs: Current service cost Interest expenses Remeasurements: Actuarial losses (gains) - change in demographic assumptions Actuarial losses (gains) - change in financial assumptions Actuarial losses (gains) - experience adjustment Recognized in profit or loss Payments of benefit Ending balance	Year Ended December 31,2019 $ 8,486 1,031 82 90 187 907 2,297 ( 608) $ 10,175	Year Ended December 31,2018
		$ 6,944
		752 78 147 7 901
		1,885
		( 343)
		$ 8,486

4) The amount of the benefit costs in aforementioned other long-term employee benefits plans were recognized in profit or loss under the administrative expenses based on the single-line items by functional category.
5) Composition of the plan assets

The Group did not allocate related assets, the effected payment based on actual occurrence.

6) The present value of other long-term employee benefits obligations of the Group was actuarially counted by a qualified actuary. The main assumptions of the actuarial evaluation on the measurement date are as follows:

Items Discount rate Future salary growth rate	2019 0.625% - 0.750% 1.75% - 2.00%	2018
		0.875% - 1.125% 1.75% - 2.00%

The assumption of future mortality rate is estimated based on the fifth life experience table of life insurance industry in Taiwan.

7) Because changes in the main actuarial assumption used, the present value of other long-term employee benefits obligations is affected. The analysis was as follows:
A. Interest rate risks

The decline in the interest rate of government bonds would increase the present value of other long-term employee benefits obligations, but the returns on debt investment of the plan assets would also increase accordingly. The both two would have a partial offset effect on other long-term employee benefits liabilities.

B. Salary related risks

The calculation of the present value of other long-term employee benefits obligations refers to the future salary of the plan members. Therefore, the increase in the salary of plan members would increase the present value of other long-term employee benefits obligations.

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8) In the event that the significant actuarial assumptions were subject to a combination of possible changes, and if other assumptions remained unchanged, the amount of increase (decrease) in present value of other long-term employee benefits obligations would be as follows:

Items	Discount rate	Discount rate	Future salary growth rate	Future salary growth rate
	Increase 0.25% ($ 182) ($ 147)	Decrease 0.25%	Increase 0.25%	Decrease 0.25%
December 31, 2019: Effect on present value of other long-term employee benefits obligations December 31, 2018`：` Effect on present value of other long-term employee benefits obligations		$ 189	$ 103	($ 100)
		$ 151	$ 70	($ 69)

Practically, since actuarial assumptions might relate to each other, it would be unlikely to have a single assumption in change. The aforementioned sensitivity analysis, therefore, might not reflect the actual change in the present value of other long-term employee benefits obligations. In addition, in the aforementioned sensitivity analysis, the present value of other long-term employee benefits obligations at the end date of the reporting period would be based on the actuarial calculation of the projected unit credit method and the defined benefit liabilities included in the balance sheet would be measured on the same basis. The method assumptions used in preparing the sensitivity analysis in the current year was exactly same as that used in the prior one.

9) The Group expected to pay to other long-term employee benefit plans in Year 2020 in the amount of attribution and the amount of payment at NT$0 and NT$508 thousand, respectively.

(26) Rent payable

The Group leased transportation facilities by means of finance lease for the lease term in 3 years. At the expiration of the lease term, these lease agreements were not entitled to terms for renewal or acquisition rights and extensions. The Group took lease assets ownership as the guarantee for rent payable. The interest rate of all finance lease obligations was fixed on the lease agreement initiation date and the annual interest rate range as of December 31, 2018 was 2.616%. The Group’s total future minimum lease payments and present value as of December 31, 2018 are as follows:

follows:
Items Current Below 1 year Noncurrent Over 1 year but below 5 years Over 5 years Subtotal Total		December 31,2018
	Total finance lease liabilities	Finance charge in future $ 54 8 - 8 $ 62	Present value of finance lease liabilities
	$ 1,998		$ 1,944
	999 -		991 -
	999		991
	$ 2,997		$ 2,935

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The Group used IFRS 16 starting from January 1, 2019 and reclassified the rent payable previously recognized under finance lease pursuant to IAS 17 into lease liabilities. Further pursuant to transitional provisions under IFRS 16, the Group chose not to reclassify the comparison period, please see Note 3(1) and Note 6(13) for more details.

(27) Post-employment benefit plans

Items Defined benefit plans Defined contribution plans Total	December 31,2019 $ 80,552 4,483 $ 85,035	December 31,2018
		$ 69,702 4,455
		$ 74,157

1) Defined benefit plans
A. In accordance with the “Labor Standards Act”, the Company and the domestic subsidiaries in the Group have established retirement methods to define benefits. Under the “Labor Pension Act” applicable on July 1, 2005, the service seniority accumulated by employees prior to enforcement of the “Labor Pension Act” and subsequently accumulated by employees who chose subject to “Labor Standards Act” after enforcement of the “Labor Pension Act” as entitled to retirement would be taken to count pension which would be calculated number of years in the service seniority accumulated and the salary amounts averaged in the six (6) months prior to retirement. Each year of service seniority accumulated in full within fifteen (15) years (inclusive) would be entitled to two base units and each year the period of service seniority accumulated beyond fifteen (15) years would be entitled to one base unit. The cumulative base units shall not exceed the maximum limit of 45 base units. The Company and its domestic subsidiaries attributed retirement funds on a monthly basis to the specified ratio of total salary, and deposited the funds in the bank account designated for pension fund opened with the Bank of Taiwan under the name of the Labor Retirement Reserve Supervision Committee. Besides, in response to the retirement needs of senior managers, the Company set up the “Manager’s Retirement Fund Management Committee” in September 2004 and attributed on a monthly basis for a certain ratio (currently 30%) of the total salary of managers into the management of the Manager’s Retirement Fund Management Committee and deposited in a special account of a financial institution opened in the name of the Manager’s Retirement Reserve Fund. The Company and its domestic subsidiaries estimate the balance of the retirement fund mentioned in the preceding item before the end of each year. In the event that the balance is found not enough to pay off the pension amount calculated according to the foregoing for the employees who meet the retirement requirements in the next year, the Company would make up the difference in a lump-sum before the end of March of the following year.
B. The amounts of the defined benefit plans were recognized in the balance sheet as follows:

sheet as follows:
Items Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31,2019 $ 961,102 ( 880,550) $ 80,552	December 31,2018
		$ 924,215 ( 854,513)
		$ 69,702

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C. Change in present value of defined benefit obligations is as follows:

Items Present value of defined benefit obligation, beginning of year Service cost of the current year Interest expenses Remeasurements: Actuarial losses (gains) - change in demographic assumptions Actuarial losses (gains) - change in financial assumptions Actuarial losses (gains) - experience adjustment Payments of benefit (Note) Present value of defined benefit obligation, end of year	Year Ended December 31,2019 $ 924,215 10,805 9,226 69 22,198 27,454 ( 32,865) $ 961,102	Year Ended December 31,2018 $ 922,805 12,936 10,584 233 13,586 7,713 ( 43,642) $ 924,215

Note: As of December 31, 2018, the payments of benefit included payments of benefit for plan assets NT$42,942 thousand and payments of benefit on account NT$700 thousand.

D. Change in fair value of plan assets is as follows:

Items	Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2018	Year Ended December 31,2018
Fair value of plan assets, beginning
of year	$	854,513	$	839,476
Interest income		8,623		9,857
Remeasurements:
Return on plan assets other than
net interest		29,813		23,354
Fund attributed by employer		20,466		24,768
Payments of benefit on plan assets	(	32,865)	(	42,942)
Fair value of plan assets, end of year	$	880,550	$	854,513
E. Relevant defined benefit	plans recognized in the statement of
comprehensive income, the	amount of the defined benefit costs are as
follows:

Items Current service cost Interest expense of defined benefit obligations interest income of plan assets Recognized in profit loss Remeasurements : Actuarial losses (gains) - change in demographic assumptions Actuarial losses (gains) - change in financial assumptions Actuarial losses (gains) - experience adjustment	Year Ended December 31,2019 $ 10,805 9,226 ( 8,623) $ 11,408 $ 69 22,198 27,454	Year Ended December 31,2018 $ 12,936 10,584 ( 9,857) $ 13,663 $ 233 13,586 7,713

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Return on plan assets other than net interest Recognized in other comprehensive income	( 29,813) $ 19,908	( 23,354)
		( $1,822)

F. The aforementioned defined benefit plans recognized in the net defined benefit costs of profit or loss. The single-line items by functional category are as follows:

category are as follows:
Items Operating costs Operating expenses Selling expenses Administrative expenses Research and development expenses Subtotal Total	Year Ended December 31,2019 $ 5,586 364 5,236 222 5,822 $ 11,408	Year Ended December 31,2018
		$ 7,437
		522 5,366 338
		6,226
		$ 13,663

H. The defined benefit retirement plan assets of the Company and the domestic subsidiaries were commissioned into business management through Bank of Taiwan according to the proportion of the items of commissioned management as specified under the annual investment utilization plans of the funds and within the specified amounts within the items as per Article 6 of Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund (i.e., to be deposited into financial institutions in Taiwan and abroad, to be invested in the Exchange-listed and OTC-listed companies or private placement equity securities and to be invested into securitized commodities of real property in Taiwan and abroad). The relevant utilization was under supervision by the Labor Pension Fund Supervisory Committee. In the utilization of the Fund, the minimum gain allocated amidst final account settlement in every fiscal year should not be lower than the income calculated by the local banks’ two-year fixed term deposit interest rate. The shortfall, if any, should be supplemented by the national treasury after approval by the competent authority. Where the Company was not entitled to participate in the operation and management of the fund, the Company could not classify the plan assets at the fair value disclosed under IAS 19 Paragraph 142. For more details of the fair value of the total assets of the Fund as of December 31, 2019 and 2018, please refer to reports of the Labor Pension Fund Utilization promulgated by the government in the respective years.
I. The present value of defined benefit obligations of the Company and the domestic subsidiaries was counted actuarially by a qualified actuary. The main assumptions of the actuarial evaluation on the measurement date are listed below:

Items Discount rate Future salary growth rate Average period of existence of defined benefit obligations	2019 0.625% - 0.875% 1.50% - 2.00% 5.4 years - 13.0 years	2018 0.875% - 1.250% 1.75% - 2.00% 5.7 years - 13.1 years

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The assumption of future mortality rate is estimated based on the fifth life experience table of life insurance industry in Taiwan.

J. The Company and the domestic subsidiaries have been exposed to the following risks due to the Labor Standards Act:
Interest rate risks

The decline in the interest rate of government bonds would increase the present value of defined benefit obligations, but the returns on debt investment of the plan assets would also increase accordingly. The both two have a partial offset effect on the net defined benefit liabilities.

Salary related risks

The calculation of the present value of defined benefit obligation refers to the future salary of the plan members. Therefore, the increase in the salary of plan members would increase the present value of defined benefit obligations.

K. In the event that the significant actuarial assumptions were subject to a combination of possible changes, and if other assumptions remained unchanged, the amount of increase (decrease) in present value of the defined benefit obligations would be as follows:

Items	Discount rate	Discount rate	Future salary growth rate	Future salary growth rate
	Increase of 0.25%	Decrease of 0.25%	Increase of 0.25%	Decrease of 0.25%
December 31, 2019: Effect to present value of defined benefit obligations December 31, 2018`：` Effect to present value of defined benefit obligations	($20,907)	$21,622	$20,986	($20,400)
	($21,216)	$21,969	$21,377	($20,752)

Practically, since actuarial assumptions might relate to each other, it would be unlikely to have a single assumption in change. The aforementioned sensitivity analysis, therefore, might not reflect the actual change in the present value of defined benefit obligations. In addition, in the aforementioned sensitivity analysis, the present value of defined benefit obligations at the end date of the reporting period would be based on the actuarial calculation of the projected unit credit method and the defined benefit liabilities included in the balance sheet would be measured on the same basis. The method assumptions used in preparing the sensitivity analysis in the current year was exactly same as that used in the prior one.

L. The Company and the domestic subsidiaries expected to pay to defined benefit plans in Year 2020 in the amount of contribution and the amount of payment NT$ 19,423 thousand and NT$31,024 thousand, respectively.
2) Defined contribution plans
A. The Company and the domestic subsidiaries of the Group have established the regulations on defined contribution retirement in accordance with the "Labor Pension Act", which are applicable to employees of ROC (Taiwan) nationality. The Company withheld 6% of

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the salary as labor pension into the employees’ personal pension accounts of Bureau of Labor Insurance for the employee who chose to apply the labor pension system specified under the "Labor Pension Act" and the payment of pension was granted based on the employees’ personal pension accounts and the amount of accumulated income either on a monthly basis or in one-time pension payment. Under such plan, after the Company and the domestic subsidiary contributed a fixed amount to the Bureau of Labor Insurance, the Company and the subsidiaries would no longer be subject to statutory or presumed obligations extra.

B. The foreign subsidiaries of the Group have contributed old-age insurance fund or reserve of retirement allowance in accordance with the retirement regulations promulgated by the local governments. The pension for every employee has been managed under packaged arrangement by the local government authorities. Those companies have not been subject to further obligations except contribution of the pension on a monthly basis or on an annual basis as required by the Local Government Authorities.
C. The Group recognized the pension costs in accordance with the aforementioned defined contribution plans between January 1 and December 31, 2019 and 2018 amounted to NT$26,760 thousand and NT$26,514 thousand, respectively. The net defined benefit liabilities recognized by the Company in accordance with the aforementioned defined contribution plans between January 1 and December 31, 2019 and 2018 amounted to NT$4,483 thousand and NT$4,455 thousand, respectively.
D. The amounts of pension costs recognized in profit or loss in accordance with the aforementioned defined contribution plans are as follows based on the single-line items of functional category:

Items Operating costs Operating expenses Selling expenses Administrative expenses Research and development expenses Subtotal Total Guarantee deposits received Items Lease security deposit – lease Pickup guarantee bond Others Total	Year Ended December 31,2019 $ 10,319 1,387 14,546 508 16,441 $ 26,760 December 31,2019 $ 2,722 2,441 480 $ 5,643	Year Ended December 31,2018 $ 10,032 1,306 14,626 550 16,482 $ 26,514 December 31,2018 $ 900 3,582 480 $ 4,962

(28) Guarantee deposits received

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(29) Other noncurrent liabilities - other

Items Unrealized deferment revenues with disposal of investment	December 31,2019 $ 23,540	December 31,2018
		$ 23,993

(30) Share capital
1) Common shares and preferred shares

Items Authorized number of shares (in thousand shares) Authorized share capital Number of issued shares and received the shares payment in full (in thousand shares) `－`Common shares `－`Preferred shares Total number of issued shares (in thousand shares) Issued share capital - common shares Issued share capital issued - preferred shares Total Issued share capital	December 31,2019 1,000,000 $ 10,000,000 906,620 20,000 926,620 $ 9,066,203 200,000 $ 9,266,203	December 31,2018
		1,000,000 $ 10,000,000 906,620 20,000
		926,620
		$ 9,066,203 200,000
		$ 9,266,203

The issued common shares and preferred shares have been in a denomination NT$10 per share, and each share was entitled to one voting right and the right to receive dividends.

2) Upon capital increase in cash launched by the Company in August 1984, the Company issued 20,000 thousand preferred shares with rights & obligations as enumerated below:
A. The earnings, if any, upon annual account settlement, the dividend of 6% for preferred shares should be allocated first. The balance shall be the allocable earnings which will be allocated at the shareholding ratio for common shares and preferred shares as proposed by the board of directors and finally resolved in the shareholders’ meeting.
B. Preferential allocation of the Company's remaining properties.
C. Other entitlement would be same as the common shares.

(31) Capital reserve

Items Treasury stocks transaction premium Dividend unclaimed within the term by shareholders Recognized changes in the ownership interests of subsidiaries Total	December 31,2019 $ 178,800 2,786 112 $ 181,698	December 31,2018
		$ 177,734 2,786 13
		$ 180,533

According to the Company Act, the proceeds from the issuance of shares in excess of the par value, and the capital reserve received as gifts and income, in addition to

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being used to make up for the loss, when the Company is not in an accumulated losses, such excess may be issued to new shares in proportion to the shareholders' original shares or cash. In addition, according to the relevant provisions of the Securities and Exchange Act, when the aforementioned capital reserve is used for capital replenishment, the total amount of the capital reserve shall not exceed 10% of the paid-in capital in a year. The Company has still been insufficient to fill the capital loss from the surplus reserve. The capital reserve could not be used for supplement. In addition, regarding recognized changes in the ownership of subsidiaries and dividend unclaimed within the term by shareholders and the like, where the connotation of such capital reserve differ from the capital reserve set forth under Article 239 of the Company Act to be used to make up for the loss, it should not be used for any purpose at all.

(32) Retained earnings
1) Pursuant to the requirements set forth under the Articles of Incorporation, the earnings after settlement of annual accounts, if any, shall be pay tax, make up previous loss, if any, and amortize 10% for legal reserve and after provision or reversal of special reserve based on the reduction of shareholders’ equity incurred in the current year, the balance would be the allocable earnings for the current year. Such allocable earnings in combination with the unappropriated earnings of the preceding year would be the accumulated allocable earnings. With such accumulated unappropriated earnings, the sum to allocate preferred share dividend of the Group for 1984 at 6% should be allocated first. The shortfall, if any, should be preferentially made up with the allocable earnings of the ensuing year. The balance of the unappropriated earnings should be allocated at the ratios proposed by the board of directors according to law, dividend policy and status of working capital. Where the balance of such unappropriated earnings is used to issue new shares, approval from the shareholders’ meeting should be obtained beforehand. Where the balance of such unappropriated earnings is allocated in cash, the decision should be resolved in the board of directors beforehand.

For more details regarding allocation of compensation to employees, remuneration to directors and supervisors, grounds of estimation and actual allocation, please see Note 6(40).

2) The Company's dividend policies are as follows:

The Company has been under a highly changeable industrial environment and is within a life cycle of stable and growing period. The Company should grasp the economic environment for sustainable operation. With the Company's long-term financial planning, future capital needs, and protect the interests of shareholders taken into account, the cash dividend allocated by the Company in every year should not be less than 10% of the total cash stock dividends in the current year (excluding 6% as the dividend of preferred share of the Group in Year 1984).

3) The legal reserve should not be put into any use except a use to make good previous loss of the Company, if any, and allocation through issuance of new shares or in cash to shareholders pro rata to original shareholding ratios. The total amount used to issue new shares or to allocate in cash, nevertheless, shall not exceed the maximum limit of 25% of the paid-in capital.
4) Upon allocating earnings, the Company should amortize and reverse special

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reserve in accordance with Letter Jing-Guan-Zheng-Fa-Zi 1010012865 dated April 6, 2012 and Letter Jing-Guan-Zheng-Fa-Zi 1010047490 dated November 21, 2012 of FSC and after adoption under IFRSs in the Q&A of Provision of Special Reserve. Where the net deduction of other equity is reversed subsequently, the part so reversal could be taken to appropriate the earnings.

5) In the shareholders' regular meeting convened by the Company on June 14, 2019 and June 15, 2018 respectively, the earnings of Year 2018 and Year 2017 would be allocated in the following manners:

Items of allocation	Allocations of earnings	Allocations of earnings	Dividendper share(NT$)	Dividendper share(NT$)
	2018	2017 $ 328,864 ( 17,380) 12,000 20,000 906,620 -	2018	2017
Provision of legal reserve Provision (reversal) of special reserve Dividends on preferred shares - cash Bonuses to shareholders on preferred shares - cash Bonuses to shareholders on common shares -cash Bonuses to shareholders on common shares - stock	$ 296,011 - 12,000 - - -		- - $ 0.60 - - -	- - $ 0.60 1.00 1.00 -

For details regarding decisions resolved in the board of directors and the shareholders’ meeting on allocations of earnings, please inquire into Market Observation Post System (MOPS).

6) The allocation of the Company's earnings in Year 2019 is still pending for decisions to be proposed in the board of directors and resolved in the shareholders’ meeting. After the relevant meetings are convened, please inquire into Market Observation Post System (MOPS).

(33) Items of other equity

Items	Exchange differences on translating financial statements of foreign operations	Unrealized valuation gain/loss of financial assets at fair value through other comprehensive income	Unrealized gain/loss on available-for-sale financial assets	Total
Balance at January 1, 2019 Items directly recognized as other equity adjustment Share attributable to non-controlling interests Transferred to item of profit and loss Transferred to retained earnings Share accounted for using the equity method Income tax related to items of other equity. Balance at December 31, 2019	($ 206,080) ( 229,109) 9,532 - - ( 104,166) 7,841	$ 945,719 ( 146,408) 48,481 - ( 45,344) - -	$ - - - - - - -	$ 739,639 ( 375,517) 58,013 - ( 45,344) ( 104,166) 7,841
	($ 521,982)	$ 802,448	$ -	$ 280,466

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Items	Exchange differences on translating financial statements of foreign operations	Unrealized valuation gain/loss of financial assets at fair value through other comprehensive income	Unrealized gain/loss on available-for-sale financial assets	Total
Balance at January 1, 2018 Effects of retrospective application and retrospective reclassification Items directly recognized as other equity adjustment Share attributable to non-controlling interests Transferred to item of profit and loss Transferred to retained earnings Portions recognized in equity method Income tax related to items of other equity Balance at December 31, 2018	($ 119,538) - 223,298 4,163 - - ( 348,993) 34,990	$ - 1,191,225 ( 280,712) 35,206 - - - -	$ 1,007,410 ( 1,007,410) - - - - - -	$ 887,872 183,815 ( 57,414) 39,369 - - ( 348,993) 34,990
	($ 206,080)	$ 945,719	$ -	$ 739,639

The related exchange difference incurred by the foreign operations' net assets converted from functional currency into the Group's expressed currency (i.e., New Taiwan Dollars) was directly recognized as exchange differences on translating financial statements of foreign operations under the other comprehensive income.

(34) Treasury stocks
1) As of December 31, 2019 and 2018, the amount of treasury stocks repurchased by the Company was NT$0 for both.
2) The changes in the current year of the Company's stocks held by subsidiaries deemed as treasury stocks are as follows:

Name of subsidiary	Kind			Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2019
		Beginningbalance		Current increase		Current decrease		Endingbalance
		Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount
GPPC Chemical Corporation Total Name of subsidiary	Common Shares Preferred shares Kind	247 1,776	$ 5,719 49,858	- -	$ - -	- -	$ - -	247 1,776	$ 5,719 49,858
		2,023	$ 55,577	-	$ -	-	$ -	2,023	$ 55,577

		Beginningbalance		Current increase		Current decrease		Endingbalance
		Shares	Amount	Shares	Amount	Shares	Amount	Shares	Amount
GPPC Chemical Corporation Total	Common Shares Preferred shares	3,128 1,776	$ 72,312 49,858	- -	$ - -	2,881 -	$ 66,593 -	247 1,776	$ 5,719 49,858
		4,904	$122,170	-	$ -	2,881	$ 66,593	2,023	$ 55,577

A. The transaction amounts as the gains obtained by subsidiaries through disposal of the Company's stocks converted into capital reserve - treasury stocks as of December 31, 2019 and 2018 were NT$ 0 and NT$28,266 thousand, respectively.
B. The transaction amounts with cash dividends of the parent company received by the subsidiaries converted into capital reserve - treasury stocks between January 1 and December 31, 2019 and 2018 were NT$1,066 thousand and NT$3,089 thousand, respectively.
C. The fair values of the Company's stocks held by the subsidiaries as of December 31, 2019 and 2018 were NT$65,697 thousand and NT$66,946

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thousand, respectively.

D. The Company's stocks held by the subsidiaries were disposed as the treasury stocks. Such stocks were not entitled to participate in the Company's capital increase in cash and voting power but were entitled to the rights exactly same as shareholders’ equity.

(35) Non-controlling interests

Items Beginning balance Effects of retrospective application and retrospective reclassification Shares of comprehensive income attributable to non-controlling Interests: Net profit for the year Exchange differences on translating financial statements of foreign operations Unrealized valuation gain/loss of financial assets at fair value through other comprehensive income Remeasurement of defined benefit plans Income tax related to items of other comprehensive income Equity transactions with non-controlling interests Dividend unclaimed by subsidiaries’ shareholders within the term Cash dividend allocated by subsidiaries Capital increase in cash by subsidiaries Capital decrease by cash by subsidiaries Acquisition of non-controlling interests increased by subsidiaries Ending balance	Year Ended December 31,2019 $ 2,881,984 - 106,086 ( 9,532) ( 48,481) 861 297 ( 99) - ( 53,924) 45,000 ( 63,656) 4,873 $ 2,863,409	Year Ended December 31,2018
		$ 2,765,917 12,745 190,635 ( 4,163) ( 35,206) ( 1,837) 305 - 4 ( 46,416) - - -
		$ 2,881,984

(36) Operating revenues

Items Revenues under customer contracts Sales revenues Labor service revenues Total	Year Ended December 31,2019 $ 18,316,042 2,152,187 $ 20,468,229	Year Ended December 31,2018
		$ 22,441,811 2,299,327
		$ 24,741,138

1) Detailed classification of revenues under customer contracts

The Group's revenues were from the transfer of a certain point in time and the provision of goods and labor services gradually transferred over time. The revenues could be broken down into the following main product lines and service types:

Main product types

Year Ended

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Sales revenues Petrochemical products Plastic products Hydrogen products Steam and electricity products Nylon products Packaging material products Plastic material resale Subtotal Labor service revenues Advertising services Video services Licensing and other services Catering services Subtotal Total	December 31,2019 $ 8,481,436 6,108,591 146,709 465,479 1,539,118 1,574,696 13 18,316,042 1,204,505 706,122 238,252 3,308 2,152,187 $ 20,468,229	December 31,2018
		$ 10,623,421 6,785,217 131,381 427,396 2,682,897 1,775,236 16,263
		22,441,811
		1,318,542 706,122 274,663 -
		2,299,327
		$ 24,741,138

2) Balances of contracts

The Group recognized contract assets and contract liabilities related to revenues under customer contracts as follows:

Items Contract assets - current Advertising contracts Licensing contracts Total	December 31,2019 $ 16,876 10,611 $ 27,487	December 31,2018
		$ 25,250 35,114
		$ 60,364

In terms of the Group’s contract assets, the credit risks have not at all increased after the initial recognition. The expected credit loss rate is 0%.

Items Contract liabilities - current Advertising contracts Licensing contracts Commodity sales Total	December 31,2019 $ 4,488 24,710 14,520 $ 43,718	December 31,2018
		$ 269 22,669 20,881
		$ 43,819

A. Significant changes in contract assets and contract liabilities

As of December 31, 2019, the changes in the Group’s contract assets and contract liabilities as compared with the preceding year primarily originated in the difference between the timepoint to satisfy the contract obligations and the timepoint for customers to make payment.

B. The beginning contract liabilities recognized as revenues in the current year

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Items Beginning balance of contract liabilities recognized as revenues in the current year Advertising contracts Licensing contracts Commodity sales Total	Year Ended December 31,2019 $269 22,669 20,881 $ 43,819	Year Ended December 31,2018 $4,363 - 39,567 $ 43,930

C. The performance of contract obligations of the prior period recognized as revenues in the current year

The Group did not have any obligations for contract performance (or partial performance) in the prior period, but due to changes in transaction prices, or changes in the recognition restrictions on the price between January 1 and December 31, 2019 and 2018, the recognition income was adjusted in the current year.

D. Unfulfilled customer contracts

For customer contracts unfulfilled by the Group as of December 31, 2019 and 2018, except for the following descriptions, the remaining contracts were expected to last for less than one year, and were expected to be fulfilled and recognized as revenues within the ensuing year. The Group has not yet fully fulfilled its contract obligations with the transaction price of the obligation to be amortized and the expected timepoint to be recognized as revenues as follows:

December 31,2019	December 31,2019	December 31,2019
Video contracts	Licensing contracts	Total
$ 706,122 - - - -	$ 116,303 95,174 64,719 - -	$ 822,425 95,174 64,719 - -
$ 706,122	$ 276,196	$ 982,318
Video contracts	Licensing contracts	Total
$ 706,122 706,122 - - -	$ 131,050 123,884 102,383 69,621 -	$ 837,172 830,006 102,383 69,621 -
$ 1,412,244	$ 426,938	$ 1,839,182

3) Contract cost related assets: Nil.

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(37) Other revenues

Items Interest income Rent revenues Dividend income Subsidy revenues Scrap sales revenues Revenues of remuneration to directors and supervisors and traffic allowance Revenues as refund of overpaid air pollution fee Others Total	Year Ended December 31,2019 $ 102,121 6,409 62,747 53 1,378 19,264 - 4,187 $ 196,159	Year Ended December 31,2018
		$ 67,249 6,515 156,062 3,700 1,896 23,960 3,042 6,445
		$ 268,869

(38) Other gains and losses

Items Net gain on financial assets at fair value through profit or loss Net gain (loss) on disposal of property, plant and equipment Gain on disposal of investment Net gain (loss) on foreign currency exchange Impairment loss on non-financial assets Loss on spare part inventory and obsolescence Direct operating expenses of the investment property Loss on legal lawsuits and reconciliation Expenditures for insurance claim settlement in occupational accidents Others Total Finance costs Items Interest expense Loan interest for financial institutions Interest counted upon security deposit Lease liabilities interest Interest in investment compensation Subtotal Less: Capitalized amount consistent with prerequisite constituents Total	Year Ended December 31,2019 $ 214 429 1,399 ( 28,741) ( 8,496) - ( 961) - ( 2,000) ( 3,815) ($ 41,971) Year Ended December 31,2019 $ 1,195 1 4,794 - 5,990 - $ 5,990	Year Ended December 31,2018
		$ 20 ( 943) 94 91,458 ( 10,007) ( 757) ( 1,023) ( 15,000) - ( 1,181)
		$ 62,661
		Year Ended December 31,2018
		$ 1,161 1 53 620
		1,835 -
		$ 1,835

(39) Finance costs

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(40) Employee benefits, depreciation, depletion and amortization expenses

Attribute	Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2018	Year Ended December 31,2018	Year Ended December 31,2018
	Operating Cost	Operating Expense	Total	Operating Cost	Operating Expense	Total
Employee benefits expenses Salaries Labor and health insurance Pension Other employee benefits Depreciation expenses (Note) Amortization expenses Total	$ 470,278 41,797 15,905 15,080 785,688 729,367	$ 513,300 41,437 22,263 106,562 161,695 2,285	$ 983,578 83,234 38,168 121,642 947,383 731,652	$ 585,292 40,817 17,469 15,072 751,844 737,873	$ 555,621 41,689 22,708 147,681 103,694 3,362	$ 1,140,913 82,506 40,177 162,753 855,538 741,235
	$2,058,115	$ 847,542	$2,905,657	$2,148,367	$ 874,755	$3,023,122

Note: For the investment property between January 1 and December 31, 2019 and 2018, the depreciation expenses provided in the consolidated financial statements were NT$961 thousand and NT$1,023 thousand, respectively entered into the accounts as non-operating revenues and expenditures - other gains and losses.
1) Pursuant to the requirements set forth under the Articles of Incorporation, with the profits earned by the Company in the current year, a sum 1% shall be allocated for compensation to employees and a sum within 2% maximum as remuneration to the directors. Where the Company remains in accumulated loss, nevertheless, such loss should be made up. The term “the profits earned by the Company in the current year” denotes the profits earned in the current year before tax after deducting compensation to employees and remuneration to directors.
2) The Company's management estimated compensation to employees and remuneration to directors based on the profitability of the current year, and taking account the amounts expected for the payment and factors of the minimum and maximum limits set forth under the Articles of Incorporation to estimate the amount of net profit before tax and before deduction of the compensation to employees and remuneration to directors. The amounts estimated for compensation to employees were NT$24,862 thousand and NT$37,478 thousand, respectively and the amounts estimated for remuneration to directors were NT$49,724 thousand and NT$74,956 thousand, respectively between January 1 and December 31, 2019 and 2018. However, there is a significant change in the amount allocated by the resolution of the board of directors taking place before the date of authorization and issuance of the annual financial statements, such adjustment of change provided as annual expenses; if the amount still changes after the date of authorization and issuance of the annual financial statements, such change shall be handled as a change in accounting estimation and would be entered into account in the ensuing fiscal year.
3) As resolved by the Company's board of directors on March 19, 2020 and March 21, 2019, the compensation to employees for the years ended 2019 and 2018 amounted to NT$24,862 thousand and NT$37,478 thousand respectively, and the remuneration to directors and supervisors amounted to NT$49,724 thousand and NT$74,956 thousand, respectively. The aforementioned amounts resolved show no significant difference from the expenses entered into the

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financial statements of Year 2019 and Year 2018. The aforementioned compensation/remunerations were paid in cash.

4) For information relating to the compensation to employees and remuneration to directors and supervisors of the Company, please inquire through the “Market Observation Post System (MOPS)” of Taiwan Stock Exchange Corporation (TWSE).

(41) Business combination

1) Acquirement of subsidiaries

In August 2019, the Group purchased 50% equity of GPPC Development Co., Ltd. (formerly known as Ching Hua Development International Co., Ltd.) at a consideration of NT$4,873 thousand in cash and then obtained control over GPPC Development Co., Ltd. That company primarily engaged in general hotel business. The Group acquired GPPC Development Co., Ltd. in an effort to diversify management and development of new markets.

2) Assets acquired and obligations assumed as of the date of acquisition

Information about the consideration paid for acquisition of GPPC Development Co., Ltd. the fair value of the assets acquired and obligations assumed as of the date of acquisition and the fair value of the non-controlling interests as of the date of acquisition are as follows:

date of acquisition are as follows:
Items Consideration paid for acquisition Cash Fair value of equity previously held in GPPC Development Co., Ltd. as of the date of acquisition Fair value of non-controlling interests Subtotal Fair value of recognizable assets acquired and liabilities assumed Current assets Cash & cash equivalents Prepayments Noncurrent assets Deferred income tax assets Total net recognizable assets Goodwill	Amount
	$ 4,873 - 4,873
	9,746
	9,713 10 23
	9,746
	$ -

Amidst the business combination, the fair values of the assets and liabilities acquired by GPPC Development Co., Ltd. were close to the carrying amounts. As of the date of acquisition, there had not been any amount expected unrecoverable.

3) Cash flows acquired from subsidiaries

unrecoverable. Cash flows acquired from subsidiaries
Items Acquisition of cash & cash equivalents Less: Consideration paid in cash Acquisition of net cash provided by subsidiaries	Amount
	$ 9,713 ( 4,873)
	$ 4,840

4) Impact of business combinations upon managerial result

Since the acquisition date, the operating results from the acquired company are

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as follows: Items Operating revenues Net profit (loss) for the year	Amount
	$ -
	($ 959)

In the event that those business combinations occurred on the start date of the fiscal year to which the acquisition date belonged, the Group’s proposed operating revenue and net profit for Year 2019 were NT$20,468,229 thousand and NT$2,176,047 thousand, respectively. These amounts could not reflect that if the business combination was completed on the start date of the acquisition year. The actual revenue and operating results of the Group should not be used to predict future operating results.

(42) Equity transactions with non-controlling interests

In October 2019, the Group increased 11.54% shareholding in GPPC Development Co., Ltd., bringing its shareholding ratio from 50% to 61.54%. Because the aforementioned transaction did not change the Group’s control over that subsidiary, the Group treated it as equity transaction. That difference of equity transaction amounted to NT$99 thousand, recorded as capital reserve - recognized changes in the ownership interests of subsidiaries with the amount of non-controlling interests was transferred out by the same amount based on the correspondent equity change.

(43) Income tax
1) Composition of income tax expense (gain):
- A. Income tax recognized in profit or loss

Items Current income tax expense payable Deferred income tax expenses (gains) Origination and reversal of temporary differences Effect of change in tax rate Effect of exchange rate Net change in deferred income tax decrease (increase) Adjustment to income taxes in previous year Income tax expenses (gains) recognized in profit or loss	Year Ended December 31, 2019 $ 550,882 13,555 - 9 13,564 220 $ 564,666	Year Ended December 31, 2018
		$ 892,969
		19,240 (1,477) (6)
		17,757
		( 4,519)
		$ 906,207

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B. Recognized in income tax related to other comprehensive income

Items Year Ended December 31, 2019 Year Ended December 31, 2018 Deferred income tax Exchange difference resulting from translating the financial statements of foreign operations ($ 7,841) ($ 34,990) Remeasurements of defined benefit plan ( 5,283) 747 Effect of change in tax rate - ( 2,905) Net change in deferred income tax decrease (increase) ( 13,124) ( 37,148) Income tax expenses (gains) recognized in other comprehensive income ($ 13,124) ($ 37,148) 2) Reconciliation of income in the current fiscal year and the income tax expense recognized into profit or loss. Items Year Ended December 31, 2019 Year Ended December 31, 2018 Net profit (loss) before tax from continuing operations unit $ 2,740,877 $ 4,056,948 Income tax with profit (loss) loss before tax at statutory tax rate 548,175 811,390 Effects of income tax upon adjustments Effects not counted into the items upon determination of the taxable income 82,414 38,972 Tax to be made up under the minimum taxation system - - Income tax levied additionally on unappropriated earnings 148,538 228,641 Loss carry-forward incurred in current year 1,223 - Loss carry-forward for offset in current year ( 370) ( 1,968) Investment credit for offset in current year - - Impact subject to different tax rates among entities in combination ( 229,098) ( 184,066) Current income tax expense payable 550,882 892,969 Net change in deferred income tax decrease (increase) 13,564 17,757 Adjustment to income taxes in previous year 220 ( 4,519) Income tax expenses (gains) recognized in profit or loss $ 564,666 $ 906,207	Year Ended December 31, 2019	Year Ended December 31, 2018
	($ 7,841) ( 5,283) -	($ 34,990) 747 ( 2,905)
	( 13,124)	( 37,148)
	($ 13,124)	($ 37,148)
	$ 2,740,877	$ 4,056,948
	548,175 82,414 - 148,538 1,223 ( 370) - ( 229,098)	811,390 38,972 - 228,641 - ( 1,968) - ( 184,066)
	550,882 13,564 220	892,969 17,757 ( 4,519)
	$ 564,666	$ 906,207

The Group applied 20% statutory tax rate applied for the entities under the Income Tax Act prevalent in the Republic of China. In the wake of amendment to the Income Tax Act of the Republic of China in February 2018, the income tax rate was adjusted from 17% to 20% which was put into enforcement in 2018. In addition, for the unappropriated earnings in 2018, the applicable tax rate was cut from 10% to 5%. The tax rate applicable to subsidiaries in Mainland China was 25%. Taxes incurred in other regions would be counted based on the respective tax rates. The Group has estimated the impacts linked up with such changes in the taxation rates.

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3) Balance of the income tax assets (liabilities) in the year

3) Balance of the income tax assets (liabilities) in the year	3) Balance of the income tax assets (liabilities) in the year	3) Balance of the income tax assets (liabilities) in the year	3) Balance of the income tax assets (liabilities) in the year	3) Balance of the income tax assets (liabilities) in the year	3) Balance of the income tax assets (liabilities) in the year
Items December 31,2019 December 31,2018 Income tax assets for the year Income tax paid in advance $ 1,198 $310 Income liabilities for the year Current income tax expense payable $ 550,882 $ 892,969 Less: Credit for the income tax paid in advance in current year ( 333,508) ( 306,608) Total $ 217,374 $ 586,361 4) Balance of deferred income tax assets (liabilities) Year Ended December 31,2019 Items Beginning balance Inward transfer in the consolidation Recognized in profit or loss Recognized in other comprehensive income Endingbalance Deferred income tax assets Unrealized exchange loss $ 1,889 $ - $ 2,537 $ - $ 4,426 Losses on obsolescence and market value decline in inventories 7,542 - ( 1,112) - 6,430 Employee leave payment obligations 3,401 - 450 - 3,851 Defined employee benefits plans 19,778 - ( 589) 5,283 24,472 Loss on impairment of tangible assets 14,258 - 540 - 14,798 Unrealized gains in sales 950 - ( 885) - 65 Loss carry-forward (Note) - 23 233 - 256 Others 1,540 -( 345) - 1,195 Total $ 49,358 23 829 5,283 $ 55,493 Deferred income tax liabilities Unrealized exchange gain $97 - 335 - $432 Investment in Associates 186,536 - 14,213 ( 7,841) 192,908 Financial & taxation difference in depreciation expenses 456 - ( 155) - 301 Reserve for land value increment tax 1,062,196 - - - 1,062,196 Total $ 1,249,285 - 14,393 ( 7,841) $ 1,255,837 Changes in net increase (decrease) $ 23($ 13,564) $ 13,124
	Beginning balance	Inward transfer in the consolidation	Recognized in profit or loss	Recognized in other comprehensive income	Endingbalance
Deferred income tax assets Unrealized exchange loss Losses on obsolescence and market value decline in inventories Employee leave payment obligations Defined employee benefits plans Loss on impairment of tangible assets Unrealized gains in sales Loss carry-forward (Note) Others Total Deferred income tax liabilities Unrealized exchange gain Investment in Associates Financial & taxation difference in depreciation expenses Reserve for land value increment tax Total Changes in net increase (decrease)	$ 1,889 7,542 3,401 19,778 14,258 950 - 1,540	$ - - - - - - 23 -	$ 2,537 ( 1,112) 450 ( 589) 540 ( 885) 233 ( 345)	$ - - - 5,283 - - - -	$ 4,426 6,430 3,851 24,472 14,798 65 256 1,195
	$ 49,358	23	829	5,283	$ 55,493
	$97 186,536 456 1,062,196	- - - -	335 14,213 ( 155) -	- ( 7,841) - -	$432 192,908 301 1,062,196
	$ 1,249,285	-	14,393	( 7,841)	$ 1,255,837
		$ 23	($ 13,564)	$ 13,124

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Items		Year Ended December 31,2018	Year Ended December 31,2018
	Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Endingbalance
Deferred income tax assets Unrealized exchange loss Losses on obsolescence and market value decline in inventories Employee leave payment obligations Defined employee benefits plans Loss on impairment of tangible assets Unrealized gains in sales Loss carry-forward (Note) Others Total Deferred income tax liabilities Unrealized exchange gain Investment in Associates Financial & taxation difference in depreciation expenses Reserve for land value increment tax Total Changes in net increase (decrease)	$ 3,549 5,729 2,901 17,750 10,847 2,264 179 1,686	($ 1,660) 1,813 500 ( 130) 3,411 ( 1,314) ( 179) ( 146)	$ - - - 2,158 - - - -	$ 1,889 7,542 3,401 19,778 14,258 950 - 1,540
	$ 44,905	2,295	2,158	$ 49,358
	$ - 201,497 530 1,062,196	97 20,029 ( 74) -	- ( 34,990) - -	$ 97 186,536 456 1,062,196
	$ 1,264,223	20,052	( 34,990)	$ 1,249,285
		($ 17,757)	$ 37,148

Note: Amount of loss carry-forward recognized in profit or loss included the amounts incurred/used in the current year and adjustment for changes estimated in previous year deducted with the amounts recognized as not likely to be realized. The inward transfer in the merger referred to deferred income tax assets acquired as a result of acquisition of GPPC Development Co., Ltd.

5) The items of the deferred income tax assets not recognized by the Group because of being not very likely to be realized are as follows:

Items Deferred income tax assets Defined employee benefits plans Loss on impairment of financial assets Loss carry-forward Total	December31,2019 $ 7,144 686 4,184 $ 12,014	December31,2018
		$ 8,446 686 5,091
		$ 14,223

6) The unrecognized deferred income tax liabilities related to investment

The temporary difference related to investment in subsidiaries, while the Group could control the very timepoint of reversal of that temporary difference and was very likely not to dispose and reverse within the foreseeable future, the Group did not recognize the deferred income tax liabilities. As of December 31, 2019 and 2018, the aggregate total amounts of the temporary differences of investment in subsidiaries which had not been recognized for the deferred

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income tax liabilities amounted to NT$1,259,851 thousand and NT$1,097,761 thousand, respectively.

7) As of December 31, 2019, the Group applied the provisions of the Income Tax Act, which the aggregate total of the deferred income tax assets with income tax payable in the year after credit was summarized as follows:

Last credit-use year Year 2020 Year 2025 Year 2028 Year 2029 Total	Recognized loss carry-forward $ - - 23 233 $ 256	Unrecognized loss carry-forward $ 2,459 735 - 990 $ 4,184	Total $ 2,459 735 23 1,223 $ 4,440

8) The income tax returns through 2017 of the Company and the domestic subsidiaries within the Group has been assessed and approved by the tax authority, except for GPPC Hospitality and Leisure Inc. and GPPC Development Co., Ltd. which have their income tax returns through 2018 been assessed and approved by tax authority.
9) Where the allocation of earnings for Year 2020 to be resolved in the shareholders’ meeting remains uncertain, the unappropriated earnings added with the very outcome of the potential income tax in Year 2019 could not be determined in a reliable way.

(44) Changes in liabilities coming from financing activities

Items	Short-term loans	Lease liabilities	Guarantee deposits received
January 1, 2019 Effects of retrospective application to IFRS 16 Net change in financing cash flows Change in non-cash - lease addition/remeasurement Effects of exchange rate December 31, 2019 Items	$ 2,833 - 18,120 - -	$ - 484,675 ( 72,487) 16,120 (275)	$ 4,962 - 681 - -
	$ 20,953	$ 428,033	$ 5,643
	Short-term loans	Rent payable	Guarantee deposits received
January 1, 2018 Net change in financing cash flows Non-cash change - financial lease rented December 31, 2018	$ 37,581 ( 34,748) -	$ 1,822 ( 2,776) 3,889	$ 1,420 3,542 -
	$ 2,833	$ 2,935	$ 4,962

(45) Earnings per share (EPS)

The basic earnings per share (EPS) of the Company was calculated by dividing the current year's net profit (loss) by the weighted average number of common shares outstanding; the shares added by unappropriated earnings or capital reserve conversion to capital increase in cash, then with retroactive adjustment calculation.

If the Company was entitled to the option to distribute compensation to employee in

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stocks or cash, then upon calculating the diluted earnings per share (EPS), it was assumed that the compensation to employee would be distributed by stocks and would be included in the weighted average number of outstanding shares when the potential common stocks were entitled to dilution effect so as to calculate the diluted earnings per share (EPS). When calculating the diluted earnings per share (EPS) before the resolution of distributing compensation to employee in the following year, the Company also continues to take into account the dilution effect of these potential common shares.

common shares.
Basic earnings per share: Net profit attributable to owners of the parent Less: Dividends on preferred shares Net profit attributable to shareholders of common shares of the parent Effect of potential common shares having dilution function Compensation to employee Diluted earnings per share: Net profit attributable to shareholders of common shares of the parent Effect added to potential common shares	Year Ended December 31,2019			Year Ended December 31,2018
	Amount after tax	Weighted average number of outstanding shares (in thousand shares)	Earnings per share (EPS) (NT$)	Amount after tax	Weighted average number of outstanding shares (in thousand shares)	Earnings per share (EPS) (NT$)
	$2,070,125 (12,000)	906,373 1,674	$2.27	$2,960,106 (12,000)	905,338 2,005	$3.26
			$2.27			$3.25
	2,058,125 -			2,948,106 -
	$2,058,125	908,047		$2,948,106	907,343

7. Related party transactions

(1) Parent company and ultimate controller

The Company is the ultimate controller of the Group.

(2) Names of the related parties and relationship thereof

Name of related party Relationship with the Group Zhenjiang Chimei Chemical Co., Ltd. Associate He Xin Venture Investment Enterprise Co., Substantial related party Ltd. China Development Asset Management Substantial related party Corporation All directors, general manager and deputy Main management general managers

(3) Significant transactions with related parties

All such major transactions, account balances, income and expenses by and between the Company and the subsidiaries (as the related parties of the Company) were eliminated in full during the preparation of the consolidated financial statements, so they were not disclosed in this Note. Please see Note 13(1) (2)-11. The transactions between the Group and other related parties are as follows:

1) Sales

Kind of the related party

Year Ended Year Ended December 31, 2019 December 31, 2018

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$ 8,150

$ 3,382

Associate

There are no significant differences in the selling price and sales trading conditions for related parties and those for ordinary customers of the Group.

2) Lease agreement
A. Right-of-use assets (Applicable to Year 2019)

A.	Right-of-use assets (Applicable to Year 2019)
B. C. D. E. F.	Kind of relatedparty December 31,2019 December 31,2018 Substantial related party $ 41,313 $ - Refundable deposits Kind of relatedparty December 31,2019 December 31,2018 Substantial related party $ 1,040 $ 1,040 Lease liabilities - current (Applicable to Year 2019) Kind of relatedparty December 31,2019 December 31,2018 Substantial related party $ 5,626 $ - Lease liabilities - noncurrent (Applicable to Year 2019) Kind of relatedparty December 31,2019 December 31,2018 China Development Asset Management Corporation $ 35,877 $ - Interest expenses (Applicable to Year 2019) Kind of related party Year Ended December 31,2019 Year Ended December 31,2018 Substantial related party $ 414 $ - Lease expenses Kind of related party Year Ended December 31,2019 Year Ended December 31,2018 Substantial related party $ - $ 5,943	December 31,2018
		$ -
		December 31,2018
		$ 1,040
		December 31,2018
		$ -
		$ -
		Year Ended December 31,2018
		$ -
		Year Ended December 31,2018
		$ 5,943

G. As of December 31, 2019, the total rents paid by the Group to the substantial related parties were NT$5,981 thousand.
H. The Group already signed business lease Agreement for premises in coming years with its subsidiaries. As of December 31, 2019 and 2018, as agreed, the Group issued forward notes (not enumerated in the accounts) in advance in the worth of NT$1,048 thousand and NT$1,040 thousand, respectively, to facilitate cashing at time of actual transaction in the future.
I. Under the lease agreements, the rents were counted on the grounds of market conditions and the terms negotiated and determined by and between both parties. Accordingly, the Group issued forward notes to pay the rent on a monthly basis.

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3) Outward lease agreements

A. Rent revenues

A.	Rent revenues
B.	Kind of related party Substantial related party Rents collected in advance Kind of relatedparty Substantial related party	Year Ended December 31,2019 $ 114 December 31,2019 $ 71	Year Ended December 31,2018
			$ 119
			December 31,2018
			$ 71

C. The above-mentioned properties for rent refer to part of its own offices of the Group put up for rent. The rent is negotiated between the parties reflective of market conditions and calculated and included in the lease contract. The rent is collected on a yearly basis.

4) The creditor’s rights and debts between the Group and related parties (all without including the interest) are as follows:

Accounts receivable

ut including the interest) are unts receivable	as follows:
Kind of relatedparty Substantial related party	December 31,2019 $ 1,271	December 31,2018
		$ 735

(4) Information of compensation for main management

Items Salaries and other short-term employee benefits Termination benefits Post-employment benefits Other long-term benefits Shares-based payment Total	Year Ended December 31,2019 $ 145,701 - 4,318 - - $ 150,019	Year Ended December 31,2018
		$ 176,740 - 4,165 - -
		$ 180,905

Pledged assets

(1) Facts of pledge in property, plant and equipment

Items Land Buildings & constructions Machinery & equipment Total	Purposes of pledge (mortgage) Comprehensive facility of credit extension, security for purchase Comprehensive facility of credit extension, security for purchase Guarantee for comprehensive facility of credit extension	December 31, 2019 $ 3,209,800 378,794 885,732 $ 4,474,326	December 31, 2018
			$ 3,209,800 401,274 1,025,622
			$ 4,636,696

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(2) Facts of other assets pledged

Items Bank deposits	Purposes of pledge (mortgage) Reserve account for liquidation	December 31, 2019 $ 48,463	December 31, 2018
			$ 11,371

Significant contingent liabilities and unrecognized contract commitments
1) Endorsements/guarantees: Nil
2) Refundable deposit guarantee notes and debit notes
A. The Group issued guaranteed promissory notes with facility and debit notes lent them to financial institutions as a commitment to repay the loan. As of December 31, 2019 and 2018, the guaranteed promissory notes were US$33,000 thousand, NT$6,242,000 thousand and US$13,000 thousand, NT$5,142,000 thousand, respectively.
B. The Group issued guarantee notes to the Chinese Taipei Basketball Association for all rights including the exclusive broadcast rights of the Super Basketball League (SBL) and the exclusive right to solicit investment in the live advertisements. As of December 31, 2019 and 2018, the guarantee notes were NT$0 and NT$10,000 thousand, respectively.
3) Deposited guarantee notes and collateral

The Group collected deposited guarantee notes and collateral as its performance guarantee. As of December 31, 2019 and 2018, the deposited guarantee notes were NT$164,585 thousand, SGD208 thousand, EUR730 thousand, US$2,823 thousand, JPY1,850 thousand and NT$160,332 thousand, SGD208 thousand, EUR730 thousand, US$2,710 thousand and JPY1,850 thousand, respectively.

4) Amidst the need for material procurement and other purposes, the Group commissioned the financial institutions to provide performance bonds. As of December 31, 2019 and 2018, the performance bonds were NT$5,500 thousand and NT$6,000 thousand respectively.
5) The balance of L/C opened but not used by the Group as of December 31, 2019 and 2018 were US$12,453 thousand, NT$663,800 thousand and US$8,225 thousand, NT$670,446 thousand and EUR59 thousand, respectively.
6) The property, plant and equipment and other major capital expenditures for which the Group had executed contracts but had not paid off as of December 31, 2019 and 2018 were NT$20,409 thousand and NT$37,973 thousand, respectively.
7) As of December 31, 2019 and 2018, the Group had signed contracts for film procurement and for outsourced production of programs for which the Group had not yet paid for the contracts as the contract films had not been delivered in the amounts of NT$818,835 thousand and NT$1,183,857 thousand, respectively.
8) Under the agreement duly executed by and between the Group and CPC Corporation, Taiwan (CPC), the Group has been required to procure from CPC specified volumes of ethylene, benzene and butadiene from every year. If the annual purchase volume of the Group did not reach the minimum contract amount, CPC may reduce the supply in the following year as appropriate. In addition, the Group committed to purchase CPC’s ethylene, benzene and butadiene as raw materials for factory-made styrene and acrylonitrile-butadiene-styrene copolymer resin (ABS), unless approved by government

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authorities, or in case of the internal dispatch for petrochemical feedstock, the Group should not transfer into other uses or resell the quotas (Where required for petrochemical scheduling, and with the prior written consent of CPC, the Group was allowed to transfer the ethylene, benzene and butadiene to petrochemical users of CPC as petrochemical feedstock either in whole or in part), otherwise CPC may would stop supplying ethylene, benzene and butadiene at any time and terminate the agreement.

9) In order to manufacture ABS and other products, the Group purchased butadiene from Formosa Petrochemical Corporation as a raw material for which the Group signed a transaction agreement. Under the agreement, the Group committed itself to purchase at least 100 metric tons of butadiene from Formosa Petrochemical Corporation every month as the raw material for the production of ABS and other products.
10) In order to manufacture ABS and other products, the Group purchased acrylonitrile from China Petrochemical Development Corporation as a raw material for which the Group signed a transaction agreement. Under the agreement, the Group committed itself to purchase 3,600 metric tons to 7,200 metric tons of acrylonitrile every quarter as a raw material for the production of ABS and other products.
11) Significant business agreements
A. Revenues

In response to the substantial need in business operation, the Group had executed important long-term contracts such as basic channel exclusive agency agreements and NBA broadcast authorization contract as irrevocable major business agreements. The Group expected that the amounts of the authorization fee to be received in the respective coming years would be as follows:

Items Below 1 year Over 1 year but below 5 years Over 5 years Total	December 31,2019 $ 798,203 167,745 - $ 965,948	December 31,2018
		$ 834,393 972,319 -
		$ 1,806,712

B. Expenditures

In line with the substantial need in business operation, the Group had executed licensing contracts, music and recording works public broadcasting license agreements, baseball matches relaying licensing contracts, public broadcasting and public transmission general licensing contracts, advertising opening buyback contracts and agreements. Such important long-term contracts that have become effective are a sort of non-cancellable major business agreement. The details of the amount of authorization fund payable by the Group in the respective coming years are as follows:

years are as follows:
Items Below 1 year Over 1 year but below 5 years Over 5 years Total	December 31,2019 $ 65,095 467 - $ 65,562	December 31,2018
		$ 78,620 63,578 -
		$ 142,198

Significant Disaster Loss: Nil
Significant Events after the Balance Sheet Date: Nil
Other events

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(1) Seasonal or cyclical interpretation of interim operations

All sorts of business operations inside the Group have been free of any potential impact in reasonable or cyclical factors.

(2) Capital risk management

The Group carries out capital management to assure a sound capital base, and maximizes shareholder compensation by means of optimizing debt and equity balances. After regularly reviewing and measuring related costs, risks and returns, the Group ensures a good profitability level and financial ratio. Where necessary, the Group would balance its overall capital structure through various financing methods to live up to the needs of various capital expenditures, working capital, debt repayment, and dividend expenditures in the future period.

(3) Financial instruments

1) Kind of financial instruments

1) Kind of financial instruments
Financial assets Financial assets at fair value through profit or loss Mandatorily measured at fair value through profit or loss Investment in equity instrument of financial assets at fair value through other comprehensive income Financial assets carried at amortized cost Cash & cash equivalents Contract assets - current Notes and accounts receivable (including related parties) Other receivables Other financial assets - current Refundable deposits Financial liabilities Financial liabilities carried at amortized cost Short-term loans Notes and accounts payable Other payables Lease liabilities (Current and Noncurrent) Guarantee deposits received	December 31, 2019 $ 172,216 4,488,921 3,403,383 27,487 2,422,525 63,705 3,717,691 16,444 20,953 1,649,611 490,583 428,033 5,643	December 31, 2018
		$ 39,020 4,220,226 2,729,454 60,364 3,001,297 81,641 2,698,945 16,664 2,833 1,548,995 669,260 - 4,962

2) Financial risk management policies

In terms of routine business operation, the Group has been subject to impact from a variety of financial risks, including market risks (including exchange rate risks, interest rate risks and price risks), credit risks and liquidity risks. In an attempt to minimize relevant financial risks, the Group has put forth maximum possible efforts to identify, evaluate and evade the uncertainty in the markets to minimize the negative impact of market variation upon the Company's financial performance.

The Group has set up appropriate policies, procedures and internal controls in response to the aforementioned financial risk management in accordance with relevant regulations, and all important financial activities must be reviewed by

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the Board of Directors in accordance with relevant regulations and internal control systems. During the implementation of the financial plan, the Group must comply with the relevant financial operation procedures for overall financial risk management and division of powers and responsibilities.

3) The attribute and level of significant financial risks
A. Market risks

Here at the Group, the market risk has notably been the risk in financial instruments' fair value or cash flow fluctuations due to changes in market prices. Such market risks mainly include exchange rate risks, interest rate risks and price risks.

Exchange rate risks

The Group's business involves certain non-functional currencies (the functional currency of the Company and some subsidiaries has been the New Taiwan Dollars and the functional currencies of some subsidiaries have been U. S. Dollars, Hong Kong dollars, Malaysian Ringgit and Renminbi) so it is subject to exchange rate fluctuations impact. Information on foreign currency assets and liabilities with significant exchange rate fluctuations is as follows: (including non-functional currency-denominated monetary items that have been written off in the consolidated financial statements).

	that have been written off in	that have been written off in	that have been written off in	the consolidated financial statements).	the consolidated financial statements).	the consolidated financial statements).
Items (Foreign currencies: Functional currency)	December 31,2019			December 31,2018
	Foreign currencies	Exchange rate foreign currencies vs. functional currency	New Taiwan Dollars	Foreign currencies	Exchange rate foreign currencies vs. functional currency	New Taiwan Dollars
Financial assets Monetary items USD:NTD USD:RMB USD:MYR USD:HKD RMB:NTD RMB:USD RMB:HKD HKD:RMB SGD:MYR EUR: NTD Non-monetary items RMB:USD Financial liabilities Monetary items USD:NTD USD:RMB USD:MYR EUR: NTD	$ 67,286 202 20 82 740 - 1 - 28 8 1,716,020 20,269 212 188 87	29.98 6.9640 4.2628 7.7890 4.3050 - 1.1185 - 3.1679 33.59 0.1436 29.98 6.9640 4.2628 33.59	$ 2,017,234 6,056 600 2,458 3,186 - 4 - 624 269 7,387,466 607,665 6,356 5,636 2,922	$ 66,032 224 4 94 755 3,648 3 43 21 - 1,573,524 11,197 266 246 92	30.715 6.8683 4.3188 7.8335 4.4720 0.1456 1.1405 0.8768 3.1609 - 0.1456 30.715 6.8683 4.3188 35.20	$ 2,028,173 6,880 123 2,887 3,376 16,314 13 169 472 - 7,036,799 343,916 8,170 7,556 3,238

Note: The foreign currency related non-monetary assets measured at the historical exchange rate on the transaction date have not been disclosed because they have no significant impact on the consolidated financial statements.

Here at the Group, the sensitivity analysis on the exchange rate risks mainly focuses on the major foreign currency monetary items

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and non-monetary items at the end of the financial statement period, and the related foreign currency appreciation/depreciation impact on the Group's profit and loss as well as equity. Where the exchange rates for foreign currencies was appreciated/depreciated by 1%, the net profit after tax for the Group between January 1 and December 31, 2019 and 2018 would increase/decrease at NT$11,263 thousand and NT$13,564 thousand respectively while the equity would increase/decrease by NT$73,875 thousand and NT$70,368 thousand, respectively.

In addition, the net profit or loss with exchange in foreign currency (including realization and un realization) under the Group's monetary items between January 1 and December 31, 2019 and 2018 were (NT$28,741 thousand and NT$91,458 thousand. Due to multiple currency types of foreign currency transactions, practically, it was impossible to clearly distinguish the types of exchange gains and losses and their exposure separately according to each foreign currency, so they are expressed in a summary amount.

 Interest rate risks

The interest rate related risks refers to the risks of financial instruments' fair value or future cash flow fluctuations due to changes in market interest rates. The Group's interest rate risks mainly come from floating rate in loans where some of the risks would be held with floating rates through cash & cash equivalents offset. Where the Group regularly assesses the trend of interest rate changes and responds to it, it is not expected that there would be a significant risk of market interest rate changes. If the loans interest rate increases or decreases by 10 basis points, with all other factors remaining unchanged, the net profit after tax of the Group between January 1 and December 31, 2019 and 2018 would decrease or increase by NT$16 thousand and NT$37 thousand, respectively.

 Price risks

The investment held by the Group as shown through the balance sheet has been primarily classified as financial assets at fair value through profit and loss and financial assets at fair values through other comprehensive income. The Group has been, therefore, exposed to pricing risks of equity instruments. In an effort to manage the pricing risks of equity instruments, the Group virtually diversifies its investment portfolio in a manner that was based on the limits set by the Group. The Group has invested in financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income with the price of financial instruments such as profit or loss affected by the uncertainty of the future value of the investment target. If the price of such financial instruments rises/falls by 1% where all other factors remain unchanged, the net profit after tax between January 1 and December 31, 2019 and 2018 would increase/decrease by NT$1,722 thousand and NT$390 thousand, respectively and the equity would increase/decrease by NT$44,889 thousand and NT$42,202 thousand, respectively.

B. Credit risks

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Credit risks refer to such risks in financial losses incurred in an event where a customer of the Group or financial instrument transaction counterparty fails to perform the contract. The credit risks of the Group primarily resulted from operating activities (primarily as accounts & notes receivable) and financial activities (primarily as bank deposits and a variety of financial instruments). The credit risks related to business operation and financial credit risks have been managed respectively.

Credit risks related to business operation

The business department faithfully complies with the Group's customer credit risk policies, procedures and controls to manage customer credit risk. The credit risks assessment of all customers is a comprehensive consideration such as the financial status of the customers, the rating of the credit rating agency, past historical transaction experience, the current economic environment and the internal rating criteria of the Group. In addition, the Group also uses certain credit enhancement instruments (such as payments collected in advance, etc.) at appropriate times to minimize the credit risk of specific customers.

 Financial credit risks

Here at the Group, the Finance Department manages credit risks of bank deposits and other financial instruments in accordance with company policies. Since the Group’s transaction objects have been determined by internal control procedures as banks with good credit and an investment grade and above in the forms of institutions, company organizations. Where all such entities prove free of major performance doubts, there have been no major credit risks upon the Group.

 Information of credit-related risks in accounts receivable

The Group adopted the assumption provided under IFRS 9. As the payment was more than 30 days overdue from schedule in the provision of contracts, the financial asset was deemed to have significantly increased in credit risks from the initial recognition. In an event where a contract payment was more than 365 days overdue or where the loanee would be highly unlikely to fulfill the credit obligations to pay amount in full to the Group, the Group deemed that financial asset in default.

In an effort to minimize credit risks, the management of the Group would assign the special team to assume the responsibility to determine the facility of credit extension, approve of credit extension or other supervisory procedures with actions to be taken as appropriate to assure successful retrieval of receivables. Besides, on the balance sheet date, the Group would, on one-by-one basis, recheck the reclaimable amounts of receivables to assure that appropriate allowance would have been provided against the potential loss. For facts of changes regarding aging analysis of accounts receivables and allowance loss, please see Note 6(3) & (4).

Exposure to credit risks

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The Group has been well known for the sound quality of credit standing with financial institutions and has tried to profoundly diversify potential credit risks with multiple financial institutions. As natural result, the Group has seen very low potential default. Besides, the Group has been in transactions with only third parties of very fine credit standing and would grant credit lines toward customers exactly based on the credit facility procedures. Meanwhile, with continued efforts to look into customers’ credit standing and with evaluation of the possibility to retrieve accounts receivable on a regular basis, the Group has amortized adequate allowance against loss. The management has, therefore, firmly believed that the Group’s receivables would not have been significantly concentrated in the credit risks. As of the balance sheet date in terms of cash & cash equivalents, contract assets - current, receivables and other financial assets - current, the maximum possible exposure to credit risks would be exactly the carrying amounts of such financial assets.

Financial instruments	December 31,2019 Carrying amount Maximum credit exposure to risks $ 3,403,383 $ 3,403,383 27,487 27,487 361,582 361,582 2,060,943 2,060,943 63,705 63,705 3,717,691 3,717,691	December 31,2018	December 31,2018
	Carrying amount	Carrying amount	Maximum credit exposure to risks
Cash & cash equivalents Contract assets - current Notes receivable Accounts receivable (including related parties) Other receivables Other financial assets - current	$ 3,403,383 27,487 361,582 2,060,943 63,705 3,717,691	$ 2,729,454 60,364 394,217 2,607,080 81,641 2,698,945	$ 2,729,454 60,364 394,217 2,607,080 81,641 2,698,945

C. Liquidity risk

The liquidity risk refers to the risk that the position could not be settled as expected. The Group mainly used financial institutions to use loans, and cash & cash equivalents and other instruments to adjust funds, and achieve the goal of flexible use of funds and stable funds. The share capital and working capital of the Group were sufficient to meet all contract obligations, so there would be no liquidity risk due to the inability to raise funds to fulfill contract obligations.

The table below summarizes the Group's non-derivative financial liabilities, grouped by the relevant maturity date based on the earliest possible date of repayment and compiled with its undiscounted cash flow. The Group did not expect that the time when the cash flow of the analysis of the due date occurred would be significantly earlier or the actual amount would be significantly different. The interest cash flow paid at floating interest rates, the undiscounted interest amount derived based on the yield curve on the balance sheet date which was the amount of floating interest rate instrument of a non-derivative financial liability. The amount of the floating interest rate instrument would change according to the different interest rate and the estimated interest rate on the balance sheet date. For more details regarding the analysis of the due date of lease liabilities, please see Note 6(13)-2-(2).

December 31, 2019

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Items	Within 6 months	6-12 months	1-2 years	2-5 years	Over 5 years	Contract cash flow	Carrying amount
Non-derivative financial liabilities Short-term loans Notes payable Accounts payable Other payables Items	$ 21,017 81,864 1,567,747 487,953	$ - - - 1,315				$ 21,017 81,864 1,567,747 490,583	$ 20,953 81,864 1,567,747 490,583
	Within 6 months	6-12 months	1-2 years	2-5 years	Over 5 years	Contract cash flow	Carrying amount
Non-derivative financial liabilities Short-term loans Notes payable Accounts payable Other payables	$ 2,857 78,620 1,470,375 667,070	$ - - - 2,190	$ - - - -	$ - - - -	$ - - - -	$ 2,857 78,620 1,470,375 669,260	$ 2,833 78,620 1,470,375 669,260

(4) Information of fair value
1) Fair value hierarchy

The evaluation technique used to measure the fair value of financial and non-financial instruments divided the fair value into the first to the third level based on the observable degrees. Each fair value hierarchy was defined as follows:

Level 1: Referring to the public quotation (unadjusted) from the same asset or liability in the active market.
Level 2: In addition to the public quotation of Level 1, the fair value is derived using observable input parameters that belong to the asset or liability directly (i.e., the price) or indirectly (i.e., derived from price).
Level 3: Referring to the input parameters (non-observable parameters) of the valuation techniques for assets or liabilities that are not based on observable market data to derive fair value.
2) Financial instruments not measured at fair values

The Group's financial instruments not measured at fair values (including cash & cash equivalents, contract assets - current, notes receivable, accounts receivable (including related parties), other receivables, other financial assets - current, short-term loans, notes payable, accounts payable, other payables and the like) refer to rational approximate values in the carrying amounts at fair values. Where refundable deposits and guarantee deposits received would not be subject to significant impact in the cash flow discounting, their carrying amounts should be the very rational grounds to estimate the fair values.

3) As of December 31, 2019 and 2018 for financial and non-financial instruments at fair values were classified by the Group based on the attributes, characteristics, risks and fair value hierarchy of assets and liabilities, with the relevant information as follows:

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	December 31,2019	December 31,2019
Level 1	Level 2	Level 3	Total
$ 172,216	$ -	$ -	$ 172,216
$ 3,626,884 4,562	$ - -	$ - 857,475	$ 3,626,884 862,037
$ 3,631,446	$ -	$ 857,475	$ 4,488,921

Level 1	Level 2	Level 3	Total
$ 39,020	$ -	$ -	$ 39,020
$ 3,494,035 5,526	$ - -	$ - 720,665	$ 3,494,035 726,191
$ 3,499,561	$ -	$ 720,665	$ 4,220,226

4) Evaluation technology and assumptions adopted to measure fair values:

The fair values of the financial and non-financial instruments refer to the amounts of current transaction of the said instruments with the interested counterparties (instead of mandatory means or liquidation). Here at the Group, the methods and assumptions used for the financial and non-financial instruments to measure the fair values are as follows:

A. In case of financial instruments with standard terms and conditions and traded in the active market, the fair value was determined by referring to the market quotation. The listed stocks were counted based on the closing price as fair value, the unlisted (OTC) emerging stocks were counted based on the transaction price as the fair value. Mutual fund beneficiary certificates were counted based on net worth as fair values.
B. For financial instruments with higher complexity, the Group measured the fair value based on the evaluation model developed using evaluation method and technology which were widely used between the fellow traders. Some of the parameters used in such evaluation models were not market observable information. The Group must make appropriate estimates based on assumptions. The Company's unlisted stocks on OTC held by the Group (excluding the emerging stocks that were traded in the active market) and the limited partnership were counted based on the market approach or the asset approach to estimate the fair value. The judgment was conducted with reference to the same type company evaluation, third-party quotation, the Company's net worth and business performance. In addition, the significant non-observable input value was mainly current discount. For more details regarding the impact of non-market observable parameters on the evaluation of financial instruments please see Note 12(4)-10.

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C. The output of the evaluation model was the approximate value of the estimate and the evaluation technology might not reflect all relevant factors of the Group’s holding of financial instruments and non-financial instruments. Therefore, the estimated value of the evaluation model would be appropriately adjusted according to additional parameters, e.g., the model risk or liquidity risk. According to the Group’s fair value evaluation model management policy and related control procedures, the management believes that the fair value of financial instruments and non-financial instruments as shown in the balance sheet should be expressed in a fair way. The evaluation adjustment is appropriate and essential. The price information and parameters used in the evaluation process have been carefully evaluated and appropriately adjusted according to the current market conditions.
D. The Group took credit risks evaluation adjustment into consideration of calculation in fair value of the financial instruments and non-financial instruments to respectively reflect the credit risk of the transaction counterparties and credit quality of the Group.
5) Transfer of fair values between Level 1 and Level 2 for the years ended December 31, 2019 and 2018: Nil
6) Change in the financial instruments of Level 3 for the years ended December 31, 2019 and 2018.

31, 2019 and 2018.
Items Beginning balance IFRS 9 retrospective application transfer-in Acquisition this year Disposal this year/Capital distribution Outward transfer of level 3 Recognized in other comprehensive income Effects of exchange rate Ending balance	Non-derivative equity (OTC)	instruments`－`Unlisted Stocks
	Year Ended December 31,2019	Year Ended December 31,2018 $ - 698,227 236,237 ( 9,585) ( 10,526) ( 199,264) 5,576
	$ 720,665 - 241,344 ( 74,041) - ( 22,700) ( 7,793)
	$ 857,475	$ 720,665

7) The Group adopted IFRS 9 since January 1, 2018 whereunder the unlisted (OTC) stocks and limited partnership interest used to be carried at costs instead of the previous IAS 39 were measured at the fair value through other comprehensive income. Where the fair value lacked sufficient observable market information, such stocks were transferred into Level 3. Another reason is that the emerging stock of unlisted (OTC) stocks at the end of March 2018, were re-evaluated the trading volume to determine whether it was an active market quotation. Due to the stable trading volume in the market, there is sufficient frequency and quantity of transaction occurrences, which could provide pricing information on a continuous basis, resulting in sufficient observable market information available, the Group, therefore, transferred the fair value used from Level 3 to Level 1 at the end of the month when the event occurred.
8) The Group's evaluation process for the fair value classified in Level 3 was the independent fair value verification of financial instruments conducted by the Company's Financial Department in collaboration with an outsourced professional evaluation agency. The independent sources of data were used to

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bring the evaluation results closer to the market status as independent, reliable, and other resources consistent with and represent the executable price, and regularly update the required input values and data, and any other necessary fair value adjustments to ensure that the evaluation results would be rational.

9) The quantitative information about the significant unobservable input value of the evaluation model used in Level 3 fair value measurement items and the sensitivity analysis of the significant unobservable input value change are explained as follows:

Items	Fair value as of December 31, 2019	Evaluation technology	Significant unobservable input value	Range (Weighted average)	Relationship between input value and fair value
Non-derivative equity instruments: Unlisted (OTC) stocks and limited partnership Items	$ 857,475 Fair value as of December 31, 2018	Market approach / Asset approach Evaluation technology	Liquidity depreciation Significant unobservable input value	10.00%-24.59% Range (Weighted average)	Higher the liquidity depreciation, lower the fair value Relationship between input value and fair value
Non-derivative equity instruments: Unlisted (OTC) stocks and limited partnership	$ 720,665	Market approach / Asset approach	Liquidity depreciation	10.00%-26.25%	Higher the liquidity depreciation, lower the fair value

10) The Group selected the evaluation model and evaluation parameters used after prudential evaluation so it was reasonable to measure the fair value but the use of different evaluation models or evaluation parameters might lead to different evaluation results. For financial assets classified as Level 3 and financial liabilities, if the evaluation parameter changes by 1% basis point, the impact on the current profit/loss or other comprehensive income would be as follows:

Items	Year Ended December31,2019	Year Ended December31,2019	Year Ended December31,2019	Year Ended December31,2019
	Recognized in profit or loss		Recognized in other comprehensive income
	Favorable change	Adverse change	Favorable change	Adverse change
Non-derivative equity instruments: Unlisted (OTC) stocks and limited partnership	$ -	$ -	$ -	($ 10,107)
	$ -	$ -	$ 10,483	$ -

212

Items	Input value	Change	Year Ended December 31,2018	Year Ended December 31,2018	Year Ended December 31,2018	Year Ended December 31,2018
			Recognized in profit or loss		Recognized in other comprehensive income
			Favorable change	Adverse change	Favorable change	Adverse change
Non-derivative equity instruments: Unlisted (OTC) stocks and limited partnership	Liquidity depreciation	+1% -1%	$ -	$ -	$ -	($ 6,744)
			$ -	$ -	$ 6,868	$ -

Additional disclosure in the notes
(1) Significant transactions and (2) Information relating to investee companies
- 1) Funds loaned to others: Nil

213

2) Provision of endorsements and guarantees to others

Name of endorsers and guarantors	Subject on endorsees and Guarantees	Subject on endorsees and Guarantees	Endorsement and guarantee limit for a single entity	Highest balance of endorsement and guarantee for the year	Balance of endorsemen t /guarantee at the end of year	Actual amount drawn down	Amount endorsement and guarantee collated by property	Ratio of accumulated amount of endorsement and guarantee to net worth in the financial statements of the company in the latestyear	Maximum amount of endorsement and guarantee	Provision of endorsement and guarantee by parent company to subsidiary	Provision of endorsement and guarantee by subsidiary to parent company	Provision of endorsement and guarantee to the party in Mainland China
	Name of company	Relationship
KK Enterprise Co., Ltd.	KK Enterprise (Malaysia) Sdn. Bhd.	A subsidiary with direct shareholding in equity up to 70%	Within the maximum limit not in excess of 50% of the total endorsement/guar antee of the Company. ($220,535)	$62,875 (RM8,940)	$62,875 (RM8,940)	$41,776 (RM5,940)	`－`	7.13%	The total endorsement/guarantee of the Company shall not exceed 50% of the net worth as shown through the latest financial statements of the Company ($441,069)	Yes	No	No

3) Holding of Marketable Securities at the End of Year (Not Including Subsidiaries, Associates and Joint Ventures)

Securities held by	Kind and name of marketable securities	Kind and name of marketable securities	Relationship with the marketable securities issuer	General ledger account	At the end ofyear	At the end ofyear	At the end ofyear	At the end ofyear
					Shares in thousands or unit expressed in thousands)	Carrying amount	Shareholding ratio (5)	Fair value
Grand Pacific Petrochemical Corporation	Stock	He Xin Venture Investment Enterprise Co., Ltd. TECO Nanotech Co., Ltd. YODN Lighting Corp. Bridgestone Taiwan Co., Ltd. China Development Financial HoldingCorporation	The Company's director is that company’s representative `－` `－` `－` `－`	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	37 19 165 1,151 21,297	$1,259 - 876 85,406 207,224	2.85 0.08 0.93 1.42 0.14	$1,259 - 876 85,406 207,224
	Fund	KGI Victory Money Market Fund	`－`	Financial assets at fair value through profit or loss - current	2,000	23,247	-	23,247
GPPC Chemical Corporation	Stock	He Xin Venture Investment Enterprise Co., Ltd. YODN Lighting Corp. Kuo Tsung Development Co., Ltd.	The Company's director is that company’s representative `－` `－`	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	49 64 200	1,685 341 -	3.80 0.36 1.06	1,685 341 -

214

Securities held by	Kind and name of marketable securities	Kind and name of marketable securities	Relationship with the marketable securities issuer	General ledger account	At the end ofyear	At the end ofyear	At the end ofyear	At the end ofyear
					Shares in thousands or unit expressed in thousands)	Carrying amount	Shareholding ratio (5)	Fair value
		Kuo Tsung Construction Development Co., Ltd. Bridgestone Taiwan Co., Ltd. Com2B Corporation Grand Pacific Petrochemical Corporation - common shares Grand Pacific Petrochemical Corporation - preferred shares China Development Financial HoldingCorporation	`－` `－` `－` The Company’s parent company The Company’s parent company The Company is that company’s director	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	200 934 750 247 1,776 12,110	- 69,318 - 4,603 61,094 117,830	1.31 1.15 1.67 0.03 8.88 0.08	- 69,318 - 4,603 61,094 117,830
GPPC INVESTMENT CORP.	Stock	YODN Lighting Corp.	`－`	Financial assets at fair values through other comprehensive income - noncurrent	631	3,345	3.54	3,345
	Partnership	China Development Asset Management Corporation's advantageous venture capital limitedpartnership	`－`	Financial assets at fair values through other comprehensive income - noncurrent	-	85,723	-	85,723
	Fund	KGI Victory Money Market Fund	`－`	Financial assets at fair value through profit or loss - current	215	2,504	-	2,504
GPPC Hospitality And Leisure Inc.	Fund	KGI Victory Money Market Fund	`－`	Financial assets at fair value through profit or loss - current	1,585	18,420	-	18,420
GPPC Development Co.,Ltd.	Fund	KGI Victory Money Market Fund	`－`	Financial assets at fair value through profit or loss - current	11,016	128,045	-	128,045
Goldenpacific Equities Ltd.	Partnership	CDIB Capital Asia Partners L.P. CDIB Capital Global Opportunities Fund L.P.	`－` `－`	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	- -	163,125 237,669	- -	154,211 139,248
Videoland Inc.	Stock	China Life Insurance Co., Ltd. China Development Financial HoldingCorporation	`－` `－`	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	107,882 55,504	2,761,780 540,050	2.42 0.37	2,761,780 540,050
	Stock	Jeoutai Technology Co., Ltd. Global Mobile Corp. Great Dream Pictures, Inc.	`－` `－` `－`	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	2,007 1,440 1,000	$67,687 - 5,750	5.96 0.52 9.98	$67,687 - 5,750
	Partnership	CDIB Capital Asia Partners L.P.	`－`	Financial assets at fair values through other comprehensive income - noncurrent	-	139,853	-	139,853

215

4) Buy or sale of the same marketable security with the accumulated amount reaching NT$300 million or 20% of paid-in capital or more

Company of Buy/sale	Kind and Name of security	General ledger account	Transaction object	Relationship	At Beginningofyear	At Beginningofyear	Buy	Buy	Sale	Sale	Sale	Sale	At end ofyear	At end ofyear
					Unit expressed in thousands	Amount	Unit expressed in thousands	Amount	Unit expressed in thousands	Selling price	Carrying cost	Disposal of gain (loss)	Unit expressed in thousands	Amount
Grand Pacific Petrochemical Corporation	KGI Victory Money Market Fund	Financial assets at fair value through profit or loss - current	Open trading market	-	-	-	94,538	$1,095,000 80(Note1)	92,538	$1,073,174	$1,071,833	$1,341	2,000	$23,247
Videoland Inc.	China Life Insurance Co., Ltd.	Financial assets at fair values through other comprehensive income - noncurrent	Centralized Trading Market	-	94,428	$2,629,821	18,454	380,153	5,000	124,560	51,765 196,429(Note 1)	72,795	107,882	2,761,780
Land & Sea Capital Corp.	Zhangzhou Chimei Chemical Co., Ltd.	Investments accounted for using the equity method	Capital increase in cash	-	-	717,809	-	477,374	-	-	- 57,806(Note 2)	-	-	1,137,377

Note: (1) As the amount including investment in equity instruments evaluation profit or loss at fair value through profit loss/other comprehensive income and gain on disposal of investment directly transferred to retained earnings.
(2) Evaluation adjustments accounted for using the equity method.
5) Acquisition of property reaching NT$300 million or 20% of paid-in capital or more: Nil
6) Disposal of property reaching NT$300 million or 20% of paid-in capital or more: Nil

216

7) Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

Purchase (sale) company	Name of transaction object	Relationship		Descriptions of transaction	Descriptions of transaction		Description and reasons for difference in transaction terms compared to generaltransaction	Description and reasons for difference in transaction terms compared to generaltransaction	Notes or accounts receivable (payable)	Notes or accounts receivable (payable)
			Purchas(sales of goods	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes or accounts receivable (payable)
Grand Pacific Petrochemical Corporation	GPPC Chemical Corporation	The Company’s subsidiaries	Sales	$1,286,974	7.93%	Based on sales contracts	The purchase or selling price under the contract is based on the mean price in the three regions, that is, FOB Korea, CFR Taiwan, and CFR SE Asia, in the respective issues of Styrene intelligence reports for the month according to Platt’s Far East Petrochemical Scan.	To be settled at the end of each month and paid off 45 days following settlement, if the payment is not received as scheduled, the interest will be calculated at the one-year time deposit annual rate of the Bank of Taiwan as of January 1 of the specific year, however, is limited to 3 months at maximum.	$12,611	0.92%
GPPC Chemical Corporation	Grand Pacific Petrochemical Corporation	The Company’s parent company	Purchase	1,286,974	83.43%	Based on purchase contracts	The purchase or selling price under the contract is based on the mean price in the three regions, that is, FOB Korea, CFR Taiwan, and CFR SE Asia, in the respective issues of Styrene intelligence reports for the month according to Platt’s Far East Petrochemical Scan.	To be settled at the end of each month and paid off 45 days following settlement, if the payment is not received as scheduled, the interest will be calculated at the one-year time deposit annual rate of the Bank of Taiwan as of January 1 of the specific year, however, is limited to 3 months at maximum.	(12,611)	(57.78%)

8) Receivable from related parties reaching NT$100 million or 20% of paid-in capital or more: Nil
9) Trading in derivative instruments: Nil

217

10) Significant impact either directly or indirectly, name, location and such information of investees under control or joint ventures (excluding investment in Mainland China)

Name of investor	Name of investee	Location	Main business	Original investments	Original investments	Holdingstatus at end ofyear	Holdingstatus at end ofyear	Holdingstatus at end ofyear	Current profit/loss of the investee	Profit/loss recognized by the Company	Notes
				Ending balance of currentyear	Ending balance ofpriorperiod	Shares in thousands	Shareholding ratio(%)	Carrying amount
Grand Pacific Petrochemical Corporation	GPPC Chemical Corporation GPPC Investment Corp. GPPC Development Co., Ltd. Videoland Inc. KK Enterprise Co., Ltd. Goldenpacific Equities Ltd. Land & Sea Capital Corp.	No.66, Changxing Rd., Luzhu Dist., Kaohsiung City 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City 3F, No.480, Ruiguang Rd., Neihu Dist., Taipei City No.1, Ziqiang 3rdRd., Nangang Industrial Zone, Nantou City British Virgin Islands British Virgin Islands	Production and sale of impact-resistant and flame-resistant polystyrene Investment business General hotel business Radio and television program production, domestic and foreign film copying, domestic film production, distribution, trading and other services Manufacture, wholesale and retail of various trademark paper, glue paper and PU Resin Investment business Investment business	$462,953 170,307 50,000 1,536,404 110,190 10,510 2,817,223	$462,953 170,307 - 1,536,404 130,026 10,510 2,817,223	54,200 22,032 5,000 71,093 7,934 75 86,319	100.00 81.60 38.46 62.29 15.73 100.00 100.00	$675,530 270,250 49,531 4,419,707 138,760 665,141 8,375,683	$71,268 (10,560) (1,123) 213,644 33,473 10,687 1,139,766	$69,317 (8,618) (469) 133,080 5,264 10,687 1,124,585	The investment profit/loss recognized including deducted with cash dividend received from parent company $1,066 and deducted NT$885 as the difference in entity base or consolidated base view points. Comprehensive shareholding up to control force Comprehensive shareholding up to control force The recognized investment profit and/or loss including adjustment with difference between the entity base and combination base to reduce byNT$15,181
GPPC Investment Corp.	GPPC Hospitality And Leisure Inc.	1F, No.26, Lane 295, Sec. 1, Dunhua S. Rd., Taipei City	Catering service business	40,000	40,000	4,000	100.00	39,586	(10,648)	(10,648)
Videoland Inc.	KK Enterprise Co., Ltd. GPPC Investment Corp. GPPC Development Co., Ltd.	No.1, Ziqiang 3rdRd., Nangang Industrial Zone, Nantou City 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City	Manufacture, wholesale and retail of various trademark paper, glue paper and PU Resin Investment business General hotel business	238,248 35,372 29,873	280,862 35,372 -	17,046 4,968 3,000	33.79 18.40 23.08	$298,074 57,522 29,724	33,473 (10,560) (1,123)	11,314 (1,942) (308)	Comprehensive shareholding with significant power of influence
KK Enterprise Co., Ltd.	K.K. Chemical Company Limited Dragon King Inc. KK Enterprise (Malaysia) Sdn.Bhd. Bhd.	Hong Kong Samoa Malaysia	Trademark paper, glue paper and such business Outward investment business Trademark paper, glue paper and such business	5,255 3,258 15,995	5,255 3,258 15,995	125 100 1,680	49.90 100.00 70.00	4,262 4,763 57,180	(144) (31) 9,911	(72) (31) 6,938	With control force

218

11) Business Relation and Important Transaction Details between Parent Company and Subsidiary and between Subsidiaries

Name of counterparty	Name of transaction party	Relationship with counterparty	Transaction conditions	Transaction conditions	Transaction conditions	Transaction conditions
			Account name	Amount	Transaction terms	Ratio to consolidated total revenues or total assets
Grand Pacific Petrochemical Corporation	GPPC Chemical Corporation	Parent company vs. subsidiary	Sales revenues Accounts receivable Other revenues Technical support revenues (Entered as deduction of expense)	$1,286,974 12,611 8,400 5,292	The purchase or selling price under the contract is based on the mean price in the three regions, that is, FOB Korea, CFR Taiwan, and CFR SE Asia, in the respective issues of Styrene intelligence reports for the month according to Platt’s Far East Petrochemical Scan. The payment method is settlement at the end of each month and paid off 45 days following settlement. If the payment is not received as scheduled, the goods will be on hold the interest will be calculated at the one-year time deposit annual rate of the Bank of Taiwan as of January 1 of the specific year, however, is limited to 3 months at maximum. As per the requirements in the contract As per the requirements in the contract	6.29% 0.04% 0.04% 0.03%
	GPPC Investment Corp.	Parent company vs. subsidiary	Rent revenues	23	As per the requirements in the lease agreement	`－`
	GPPC Development Co., Ltd.	Parent company vs. subsidiary	Rent revenues	23	As per the requirements in the lease agreement	`－`
	Videoland Inc.	Parent company vs. subsidiary	Rent revenues	137	As per the requirements in the lease agreement	`－`
	KK Enterprise Co., Ltd.	Parent company vs. subsidiary	Other revenues	487	As per the requirements in the Articles of Incorporation	`－`
GPPC Chemical Corporation	Grand Pacific Petrochemical Corporation	Subsidiary vs. parent company	Sales revenues Accounts receivable Rent revenues	2,273 348 72	To be counted based on general transaction prices Within 45 days on a monthly basis Asper the requirements in the lease agreement	0.01% `－` `－`
GPPC Hospitality And Leisure Inc.	Grand Pacific Petrochemical Corporation	Subsidiary vs. parent company	Catering revenues	281	To be counted based on general transaction prices	－

219

Name of counterparty	Name of transaction party	Relationship with counterparty			Transaction conditions
			Account name	Amount	Transaction terms	Ratio to consolidated total revenues or total assets
	Videoland Inc.	Subsidiary vs. subsidiary	Catering revenues	105	To be counted based on general transaction prices	－
Videoland Inc.	Grand Pacific Petrochemical Corporation	Subsidiary vs. parent company	Right-of-use assets Lease liabilities Lease interest Refundable deposits	$193 137 2 50	As per the requirements in the lease agreement As per the requirements in the lease agreement As per the requirements in the lease agreement Asper the requirements in the lease agreement	－－－－
	KK Enterprise Co., Ltd.	Subsidiary vs. subsidiary	Other revenues	487	As per the requirements in the Articles of Incorporation	`－`
KK Enterprise Co., Ltd.	KK Enterprise( Malaysia) Sdn Bhd.	Parent company vs. subsidiary	Sales revenues Accounts receivable Endorsements/ guarantees	27,578 4,946 62,875	To be counted based on general transaction prices Within 90 days on a monthly basis As per endorsements/guarantee operating procedures	0.13% 0.02% 0.20%
	KK Enterprise (Kunshan) Co.,Ltd.	Parent company vs. subsidiary	Sales revenues Accounts receivable	13,191 3,064	To be counted based on general transaction prices Within90 days on a monthlybasis	0.06% 0.01%
	KK Enterprise (Zhongshan) Co.,Ltd.	Parent company vs. subsidiary	Sales revenues Accounts receivable	422 122	To be counted based on general transaction prices Within90 days on a monthlybasis	`－` `－`
K.K. Chemical Company Limited	KK Enterprise (Zhongshan) Co.,Ltd.	Subsidiary vs. subsidiary	Other receivables	6,307	Within 90 days on a monthly basis	0.02%
KK Enterprise (Zhongshan) Co.,Ltd.	KK Enterprise (Kunshan) Co.,Ltd.	Subsidiary vs. subsidiary	Sales revenues Accounts receivable	6,276 672	To be counted based on general transaction prices Within90 days on a monthlybasis	0.03% `－`
KK Enterprise (Kunshan) Co., Ltd.	KK Enterprise (Zhongshan) Co.,Ltd.	Subsidiary vs. subsidiary	Sales revenues	4,642	To be counted based on general transaction prices	0.02%
	KK Enterprise(Malaysia) Sdn Bhd.	Subsidiary vs. subsidiary	Sales revenues Accounts receivable	3,794 966	To be counted based on general transaction prices Within90 days on a monthlybasis	0.02% `－`
	Dragon King Inc.	Subsidiary vs. subsidiary	Sales revenues Accounts receivable	5,954 1,993	To be counted based on general transaction prices Within90 days on a monthlybasis	0.03% 0.01%
Dragon King Inc.	KK Enterprise (Zhongshan) Co.,Ltd.	Subsidiary vs. subsidiary	Other receivables	3,412	Within 90 days on a monthly basis	0.01%

220

(III) Information on investments in Mainland China

Name of investors	Name of investee in China	Main business lines	Main business lines	Paid-in capital	Method of investment	Beginning amount of accumulated investment with outward remittance from Taiwan this year		Amount of investment remitted outward or retrieved thisyear	Amount of investment remitted outward or retrieved thisyear	Ending amount of accumulated investment with outward remittance from Taiwan this year	Profit or loss of investees this year Note (5)	Profit or loss of investees this year Note (5)	The Company's shareholding ratio either directly or indirectly investment Note(4)	Investment gain /loss recognized in the year Note (5)	Carrying amount of investment at end of year Note (4)	Investment gains having been received at end of year
								Outward remittance	Retrieval
Grand Pacific Petrochemical Corporation	Zhenjiang Chimei Chemical Co., Ltd.	Production and sales of series products and their products using styrene as raw materials and various chemical raw materials and fuel oil handling, storage and transportation and operation		USD368,850	Note (2)	$1,652,206 (USD52,830)		-	-	$1,652,206 (USD52,830)	$4,070,804		30.40%	$1,237,525 (USD40,775)	$5,460,356 (USD182,133)	$473,318 (USD15,496)
	Zhangzhou Chimei Chemical Co., Ltd.	Primary form plastics and synthetic resin manufacturing		CNY880,000	Note (2)	716,901 (USD23,340)		-	-	716,901 (USD23,340)	(49,528)		30.40%	(15,057) (USD496)	1,137,377 (USD37,938)	-
KK Enterprise Co., Ltd.	KK Enterprise (Zhongshan) Co., Ltd.	Trademark paper, glue paper and such business		HKD12,300	Note (3)	21,509 (HKD6,150)		-	-	21,509 (HKD6,150)	11,819		50.00%	5,949 Note (6)	64,986	45,491
	KK Enterprise (Kunshan) Co., Ltd.	Trademark paper, glue paper and such business		USD6,100	Note (1)	206,958 (USD5,168) (Machine USD827)		-	-	206,958 (USD5,168) (Machine USD827)	(7,569)		100.00%	(7,508) Note (6)	196,457	36,061

Name of investor			Amount of accumulated investment remitted from Taiwan to the Mainland China at end of year				Amounts of investment approved by Investment Commission, Ministry of Economic Affairs					Maximum limit of investment in Mainland China as promulgated by Investment Commission, Ministry of Economic Affairs(Note 7)
Grand Pacific Petrochemical Corporation			$2,369,107(USD76,170)				$3,051,304(USD101,778) (Note 8)					$16,339,246
KK Enterprise Co., Ltd.			$228,467(USD5,168; HKD6,150 and machine USD827)				$228,467(USD5,995; HKD6,150)					$584,371

221

Note: (1)
As direct investment.
(2) Investment in the Mainland China based firm through a company incorporated in a third territory after being approved by the government.
(3) Investment in the Mainland China based firm by outsourcing a company incorporated in a third territory after being approved by the government.
(4) The shareholding ratio and carrying amount of the investment at the end of the year, which is outward investment or investment outsourcing a third territory company either directly or indirectly
(5) Based on the financial statements audited/certified by other certified public accountants of the international Certified Public Accountant Firms in cooperation relationship with the Certified Public Accountant Firms of the Republic of China and other Certified Public Accountant (practicing) of the Company's Certified Public Accountant Firms to recognize the investment gains or losses accounted for using the equity method to the shareholding ratio of investment, either directly or indirectly.
(6) The investment gains and losses recognized in this current year including the realized, unrealized net gains and losses generated by the forward, countercurrent and side stream exchanges.
(7) Under the provisions of the Investment Commission, Ministry of Economic Affairs, the maximum limit for the amounts or percentages of accumulated investment toward Mainland China shall be 60% of the Company's net worth or the consolidated net worth (whichever was the higher).
(8) As of December 31, 2019, the amount of accumulated investment by the Company toward Mainland China as approved by the Investment Commission, Ministry of Economic Affairs totaled at US$187,731 thousand. Pursuant to Article 3 of "Principles for Investment or Technical Cooperation Review in the Mainland China", the amount of capital increase with earnings into Mainland China would not be counted into the accumulated investment. Besides, where the share capital or earnings of investment in Mainland China were remitted back to Taiwan by investor, the accumulated amount of investment could be deducted accordingly. The Company's earnings used for capital increase (additional investment) in Mainland China as approved by the Investment Commission, Ministry of Economic Affairs came to US$70,457 thousand and the surplus remitted back amounted to US$15,496 thousand, which had both been deducted from the cumulative amounts of approved investment in Mainland China.
(9) The foreign currency amounts in this Table are converted to New Taiwan Dollars the exchange rate quoted on the balance sheet date, except that the amount of investment remitted outward from Taiwan which was measured at historical exchange rates.

222

2) Significant transactions occurring with Mainland China based investees via a third territory directly or indirectly:

KK Enterprise (Zhongshan) Co., Ltd. and KK Enterprise (Kunshan) Co., Ltd. as included in the preparation of the consolidated financial statements because the Group's direct and indirect investment with more than 50% of comprehensive shareholding ratio. Those by and between the Group and KK Enterprise (Zhongshan) Co., Ltd. and KK Enterprise (Kunshan) Co., Ltd. either directly or indirectly through the business in the third territory were eliminated in full upon preparation of the consolidated financial statements. For more detail regarding major transactions by and between the Group and the Mainland China based investees, please refer to Note 13(1) (2)-11.

The Group did not have significant transactions with Zhangzhou Chimei Chemical Co., Ltd. via a third territory based enterprise either directly or indirectly. In addition, the Group’s major transactions with Zhenjiang Chimei Chemical Co., Ltd. via a third territory based enterprises either directly or indirectly between January 1 and December 31, 2019 and 2018 are as follows:

A. Ending balance and percentage of payables regarding purchase amounts & percentage: Nil
B. Ending balance and percentage of receivables regarding sales amounts & percentage:
Year Ended December 31, 2019 & December 31, 2019

	 Year Ended Dece	mber 31, 2019 & Decem	mber 31, 2019 & Decem	ber 31, 2019	ber 31, 2019
Company name of sales	Name of transaction object	Sales revenues		Accounts receivable
		Amount	Percentage of net sales	Amount	Percentage of total accounts receivable
Grand Pacific Petrochemical Corporation	Zhenjiang Chimei Chemical Co., Ltd.	$ 8,150	0.04%	$ 1,271	0.06%

Year Ended December 31, 2018 & December 31, 2018

	 Year Ended Decem	ber 31, 2018 & Decembe	ber 31, 2018 & Decembe	r 31, 2018	r 31, 2018
Company name of sales	Name of transaction object	Sales revenues		Accounts receivable
		Amount	Percentage of net sales	Amount	Percentage of total accounts receivable
Grand Pacific Petrochemical Corporation		$ 3,382	0.02%	$ 735	0.04%

C. Amounts in property transaction and amount of profit or loss so incurred: Nil
D. Ending balance of the endorsements/guarantees of notes or the collateral provided: Nil

223

     - E. The highest balance of fund financing, ending balance, interest rate range and total amount of interest in the current year: Nil

     - F. Other transactions that had a significant impact on the current profit/loss or financial status: Nil

Information of the operating segments
(1) The “operating segments” as set forth herein were business composing units which would comport with the following characteristics:
- 1) The operating activities to obtain revenues and incur expenses.
- 2) Where the operating results would be regularly rechecked by the enterprise’s decision-makers to formulate decisions to allocate resources of the segments and to evaluate the performance of the segments
- 3) With individual and separable financial information.
(2) Based on the view of the operating decision-makers, the Group would recheck the link up with various managerial departments and the products and labor services. The operating units were classified into three reportable operating segments:
- 1) Petrochemistry Department: That department was responsible for the production, processing and trading of related products and their products using styrene as raw materials.
- 2) Television Media Department: That department was responsible for TV program production, import and export agency distribution of cable TV programs and various advertising agencies and the planning and production thereof.
- 3) Packaging Materials Department: That department was responsible for manufacturing, processing and trading of various packaging materials such as trademark paper and release paper.

Other operating activities not reported by the Group and related information of the operating segments are consolidated and disclosed under "Other Departments".

(3) The departments required to be reported to the Group were strategic business units to provide different products and labor services. Each strategic business unit would call for different technologies and marketing strategies, so they must be managed separately.
(4) Here in the Group, the management individually monitored the operating results of the business units to formulate resource allocation and performance evaluation decisions. The performance of the operating segment was measured based on operating profit or loss, and the amount so measured was provided to the chief operating decision maker to allocate resources to the department and evaluate its performance and, in turn, adopted the consistent method of operating profit or loss in the consolidated financial report. The operating cost of the headquarters in the consolidated financial report, income tax expense (gain) and non-recurring profit or loss (non-operating income and expenditure) were, nevertheless, based on the management of the parent company, and was not allocated to the reportable department. The reported amount and the report used by the operating decision maker proved consistent. The transfer price between the operating segments was based on the regular transactions as similar to external third parties. The operating segment’s accounting policies were roughly the same as those shown in Note 4 to Consolidated Financial Statements.

224

(5) Financial information of the operating segments

1) January 1 - December 31, 2019 & December 31, 2019

Items	Petrochemistry Dept.	TV Media Dept.	Packaging Material Dept.	Other Departments	Adjustment (reconciliation) and elimination	Total
Revenues Revenues from external customers Revenues between segments Total revenues Segment profit or loss Non-operating revenues and expenditures Net profit before tax from continuing operations unit Segment profit or loss include: Depreciation & amortization Segment assets Segment liabilities 2) Items	$ 16,741,346 1,289,247	$ 2,148,879 -	$ 1,574,696 61,857	$ 3,308 386	$ - ( 1,351,490)	$ 20,468,229 -
	$18,030,593	$ 2,148,879	$ 1,636,553	$ 3,694	($1,351,490)	$20,468,229
	$ 1,090,638	$ 248,683	$ 49,511	($ 27,790)	$ 9,169	$ 1,370,211 1,370,666
	$ 747,055	$ 856,184	$ 72,333	$ 3,599	($ 136)
						$ 2,740,877
						$ 1,679,035
	$ -	$ -	$ -	$ -	$31,486,407	$31,486,407
	$ -	$ -	$ -	$ -	$ 4,254,330	$ 4,254,330
						Total
Revenues Revenues from external customers Revenues between segments Total revenues Segment profit or loss Non-operating revenues and expenditures Net profit before tax from continuing operations unit Segment profit or loss: Depreciation & amortization Segment assets Segment liabilities	$ 20,666,575 1,105,846	$ 2,299,327 -	$ 1,775,236 72,583	$ - -	$ - ( 1,178,429)	$ 24,741,138 -
	$21,772,421	$ 2,299,327	$ 1,847,819	$ -	($1,178,429)	$24,741,138
	$ 2,303,222	$ 356,703	$ 78,235	($ 8,772)	$9,450	$ 2,738,838 1,318,110
	$ 709,661	$ 817,651	$ 69,461	$ -	$ -
						$ 4,056,948
						$ 1,596,773
	$ -	$ -	$ -	$ -	$29,859,901	$29,859,901
	$ -	$ -	$ -	$ -	$ 4,238,927	$ 4,238,927

3) Descriptions on adjustment (reconciliation) and elimination
- A. The revenues between segments were eliminated upon consolidation.
- B. The adjustment (reconciliation) and elimination of segment profit or loss were primarily subject to the elimination of profit or loss between the segments at the moment of consolidation.
- C. Where the amounts to be measured amidst assets and liabilities between segments were not the indications for measurement by decision-makers, the amount to measure assets and liabilities to be disclosed was NT$0. The amounts of unamortized assets and liabilities were recorded under items of adjustment (reconciliation).
(6) Revenues of main products and labor services

225

Please see descriptions of Note 6(36)

(7) Territories information

The Group’s revenues coming from external customers have been classified based on the locations where the sales or labor services were provided and the noncurrent assets were classified based on the locations where the assets were in, the territories information is as follows:

information	is as follows:	is as follows:
Territory	Revenues from external customers		Noncurrent assets
	Year Ended December 31,2019	Year Ended December 31,2018	December 31,2019	December 31,2018
Taiwan Mainland China Asia Americas Africa Europe Oceania Total	$ 13,930,182 5,118,126 1,196,139 70,485 126,574 24,451 2,272	$ 16,670,278 6,158,105 1,715,429 106,801 83,555 3,212 3,758	$ 8,145,004 76,935 16,153 - - - -	$ 8,413,853 87,759 8,988 - - - -
	$ 20,468,229	$ 24,741,138	$ 8,238,092	$ 8,510,600

Note: Noncurrent assets exclude noncurrent assets held for sale, financial instruments, deferred income tax assets, post-employment benefits assets as well as assets generated by insurance contracts.

(8) Information on key customers

A single customer with revenues reaching for over 10% of the net consolidated operating revenues of the Group between January 1 and December 31, 2019 and 2018, the details were as follows:

	2018, the details were as follows:	2018, the details were as follows:	2018, the details were as follows:
Customers	Year Ended December 31,2019			Customers	Year Ended December 31,2018
	Amount	% to net operating revenues	Segment to be reported		Amount	% to net operating revenues	Segment to be reported
Company A	$4,054,684	19.81%	Petrochemistry Department	Company A	$4,993,987	20.18%	Petrochemistry Department

226

V. The Company's individual financial statement duly certified by certified public accountants in the most recent year

Grand Pacific Petrochemical Corporation

CPA AUDIT REPORT

To the Board of Directors and Shareholders of Grand Pacific Petrochemical Corporation

Audit Opinions

We, as the CPAs, have completed the audit of the individual balance sheets dated December 31 of 2019 and 2018 and the individual comprehensive income statement, individual statement of changes in equity, individual statement of cash flows, and individual financial statement from January 1 to December 31 of 2019 and 2018, including summaries of major accounting policies of Grand Pacific Petrochemical Corporation.

As CPAs, according to the audit results from us and those from other CPAs (please refer to the paragraph about other matters), the above-mentioned individual financial statement, in all major respects, was prepared in compliance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and hence are sufficient to show the individual financial standing of Grand Pacific Petrochemical Corporation as of December 31, 2019 and 2018 and the individual financial performance and individual cash flows between January 1 and December 31, 2019 and 2018.

Bases for the Audit Opinions

We followed the Rules Governing the Audit of Financial Statements by Certified Public Accountants and generally accepted auditing rules while performing the audit. The responsibilities of the CPAs under the said standards will be explained further in the section about responsibilities in auditing the individual financial statement. Independently governed staff in the accounting firm that the CPAs belong to have followed moral regulations in honor of the profession of CPA and have remained independent of Grand Pacific Petrochemical Corporation and fulfilled other responsibilities under the said regulations. Based on the audit results from us and those from other CPAs, we believe that sufficient and adequate evidence has been obtained for the audit to serve as the basis for expressing the audit opinions.

Key Matters Being Audited

Key matters being audited refer to the most important matters based on the professional judgment of the CPAs to be included in the audit of the 2019 individual financial statement of Grand Pacific Petrochemical Corporation. Such matters were addressed throughout the audit of the individual financial statement and during the formation of audit opinions. The CPAs do not express separate opinions regarding these matters.

Key matters being audited of the 2019 individual financial statement of Grand Pacific Petrochemical Corporation are specified as follows:

Recognition of Income

227

of the transfer of control over sales of products and income from sales as part of the key matters being audited.

For the accounting policy on the recognition of income, please refer to Note 4 (28) of the individual financial statement. For information on accounting items for income, please refer to the disclosure in Note 6 (27) of the individual financial statement. Major audit procedures that are already carried out by the CPAs for the above-mentioned matters are as follows:

Test the validity of sales and the internal control for the payment collection cycle in terms of its design and implementation and evaluate by random sampling if the recognition of income is adequate.
Understand the type of product and the distribution specifications with Top 10 distribution customers and evaluate the legitimacy of the distribution income and the number of days involved in the turnover of accounts receivable and analyze if there is any abnormal variation among the customers.
Select samples from distribution transactions within a certain period of time before and after the shipping deadline and verify them against related certificates in order to evaluate the accuracy of transfer timing of risks and rewards of goods produced and distributed and the control right and the timing when income is recognized.

Impairment evaluation of real estate, plants and equipment

As of December 31, 2019, the book value of real estate, plants, and equipment owned by Grand Pacific Petrochemical Corporation totaled $6,046,298 thousand, accounting for around 22% of the total asset value and the value is significant for the individual financial statement. In addition, the overall economic trends, market competition, and technical development can all affect the future operations of the company and accordingly affect the expected economic benefits and the recoverable amount that may be generated in the future by the cash generating units for the assets estimated and determined by the management in order to evaluate if impairment exists. Therefore, the evaluation of impairment of real estate, plants, and equipment is listed by the CPAs as part of the key matters being audited.

For the accounting policy on the impairment of real estate, plants and equipment and non-financial assets, please refer to Note 4 (16) and (19) of the individual financial statement. For information on accounting items involving real estate, plants and equipment, please refer to the disclosure in Note 6 (11) of the individual financial statement. Major audit procedures that are already carried out by the CPAs for the above-mentioned matters are as follows:

Obtain the asset impairment assessment form for respective cash generating units that have been evaluated spontaneously by the Company.
Evaluate the legitimacy of impairment signs identified by the management and the assumption and sensitivity adopted, including whether the differentiation of cash-generating units, forecast of cash flows, and discount rate are appropriate or not.
Ask the management and review audit evidence obtained from the subsequent audit procedure for verification of absence of any matter related to impairment testing after the reporting date.

Valuation of investment balance adopting the equity method

The investment balance of Grand Pacific Petrochemical Corporation as of December 31, 2019 adopting the equity method totaled $14,594,602 thousand, accounting for around 54% of the total asset value. The net worth of comprehensive income (including the portions of profits and losses from subsidiaries, affiliates, and joint ventures recognized using the equity method and the portions of other comprehensive income from subsidiaries, affiliates, and joint ventures recognized using the equity method) totaled $913,371 thousand, accounting for around 56% of the total comprehensive income. The impacted value is significant to the individual financial statement. Therefore, the CPAs include valuation of investment balance adopting the equity method as part of the key matters being audited.

228

For the accounting policy on investments adopting the equity method, please refer to Note 4 (15) of the individual financial statement. For information on accounting items for investments adopting the equity method, please refer to the disclosure in Note 6 (10) of the individual financial statement. Major audit procedures that are already carried out by the CPAs for the above-mentioned matters are as follows:

Evaluate the accuracy of calculation during valuation adopting the equity method and the adopted accounting policy.
Check the accuracy in the calculation of unrealized profits or losses generated from transactions with companies invested in using the equity method; they have been reasonably written off and evaluate the adopted accounting policy; the adopted accounting policy has been adjusted as needed to be consistent with the policies adopted by the Company.
Evaluate the legitimacy of impairment signs of investments adopting the equity method as identified by the management and the assumption and sensitivity adopted, including whether or not the forecast of profitability of companies invested in it in the future or the discount rate is appropriate.

－ Other Matters Mentioning Audits by other CPAs

As is stated in Note 6 (10) of the individual financial statement, among the investments by Grand Pacific Petrochemical Corporation adopting the equity method, the financial statements of － the re-investment company adopting the equity method through KK Enterprise K.K. Chemical Company Limited and KK Enterprise (Malaysia) Sdn. Bhd. and the reinvestment company Zhenjiang Chimei Chemical Company Limited and Zhangzhou Chimei Chemical Company Limited adopting the equity method through British Virgin Islands Land & Sea Capital Corp. were audited by other CPAs, not us. Therefore, among the opinions expressed by us on the above-mentioned individual financial statement, the amount listed in the above-mentioned financial statement of the Company and the above-mentioned information about the Company in Note 13 of the individual financial statement are completely based on audit reports from other CPAs. The balance of the above-mentioned investments adopting the equity method in the companies by Grand Pacific Petrochemical Corporation as of December 31, 2019 and 2018, was $6,620,330 thousand and $5,530,087 thousand, accounting for 24.37% and 21.35% of the total value, respectively. The portions of profits and losses indirectly recognized adopting the equity method from January 1 to December 31, 2019 and 2018, was $1,224,993 thousand and $991,644 thousand, accounting for 74.67% and 37.65% of the total comprehensive income, respectively.

Responsibilities of Management and Governance Unit to Individual Financial Reports

The management is responsible for preparing adequately expressed individual financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and maintaining necessary internal control relevant to the compilation of the individual financial statements in order to ensure that no significant untruthful expressions caused by frauds or errors exist in the individual financial statements.

While preparing the individual financial statement, the management is responsible for also evaluating the ability of Grand Pacific Petrochemical Corporation to continue with the operation and disclosing related matters and adopting the accounting basis for continued operation, among others. Unless the management intends to liquidate Grand Pacific Petrochemical Corporation or discontinue operation or there are no other actually feasible solutions than liquidation or discontinued operation.

The governance unit (including the Audit Committee) of Grand Pacific Petrochemical Corporation is responsible for supervising the financial reporting process.

229

Responsibilities of CPAs in Inspecting Individual Financial Statement

We audit the individual financial statement in order to be reasonably convinced as to whether the individual financial statement as a whole contains major untruthful expressions due to frauds or errors and to issue the audit report. Reasonably convinced is highly convinced. There is no guarantee, however, that existence of significant untruthful expressions in the individual financial statement will be detected according to generally accepted auditing standards. Untruthful expressions might have been caused by frauds or errors. If individual values or an overview of untruthful expressions can be reasonably expected to affect economic decisions made by users of the individual financial statement, they are considered significant.

We apply our professional judgment and keep our professional doubts while performing the audit according to generally accepted auditing standards. The CPAs also perform the following tasks:

Identify and evaluate the risk of significant untruthful expressions in the individual financial statement due to frauds or errors, design and enforce appropriate responsive policies for determined risks; and collect sufficient and adequate evidence from the audit in order to render audit opinions. Due to the fact that frauds might involve collusion, forging, intentional omission, untruthful statement, or non-compliance with internal control, the risk associated with undetected significant untruthful expressions caused by frauds is higher than that caused by errors.
Obtain a necessary understanding of internal control concerning the audit in order to design appropriate audit procedures reflective of then-current situation. The purpose, however, is not to effectively express opinions on the internal control of Grand Pacific Petrochemical Corporation.
Evaluate the adequacy of accounting policies adopted by the management and the legitimacy of accounting estimates and related disclosures made.
Reach a conclusion with regard to the adequacy of the accounting basis adopted to continue with operation by the management and whether significant uncertainties of events or conditions that might result in significant concerns about the ability of Grand Pacific Petrochemical Corporation to continue with operation exist or not according to the evidence obtained from the audit. In the event that it is determined that significant uncertainties exist with such events or conditions, on the other hand, the CPAs must remind users of the individual financial statement in their audit report that they should pay attention to related disclosures included in the statement or modify their audit opinions if such disclosures are inappropriate. Conclusions made by the CPAs are based on the evidence from the audit obtained as of the date of the audit report. Future events or conditions, however, are likely to result in Grand Pacific Petrochemical Corporation no longer capable of continuing with operation.
Evaluate the overall expression, structure, and contents of the individual financial statement (including related notes) and whether or not the individual financial statement has fairly expressed related transactions and events.
Obtain sufficient and adequate evidence from the audit regarding the financial information of entities comprising Grand Pacific Petrochemical Corporation and express opinions about the individual financial statement. The CPAs are responsible for providing guidance on, supervising, and implementing audits and for coming up with audit opinions for the individual financial statement.

230

relationships and other matters considered to be likely undermining the independence of CPAs (including related safeguard measures).

The CPAs, from the matters communicated with the governance units, decided key matters to be included in the 2019 individual financial statement audit of Grand Pacific Petrochemical Corporation. The CPAs specify such matters in the audit report unless it is disallowed by law to disclose to the public specific matters or under rare circumstances, the CPAs decide not to communicate specific matters in the audit report as it can be reasonably expected that negative impacts from such communication would be greater than the public interest that will be enhanced.

Crowe Horwath International

CPA Ying Chia Hsiao CPA Wu Chang Wang

Approval document number: FSC Review No. 10200032833 March 19, 2020

Notice to Readers

231

Grand Pacific Petrochemical Corporation PARENT COMPANY ONLY BALANCE SHEETS For the years ended December 31, 2019 and 2018

Codes	Assets	Expressed in Thousands of New Taiwan Dollars December 31, 2019 December 31, 2018 Amount % Amount % $6,151,330 23 $5,227,246 20 1,623,640 6 1,567,675 6 23,247 - - - 1,201 - 14,419 - 1,362,287 5 1,918,484 8 13,882 - 735 - 24,721 - 42,181 - 1,342,132 5 1,604,466 6 60,220 - 79,286 - 1,700,000 7 - - 21,015,000 77 20,671,256 80 294,765 1 295,533 1 14,594,602 54 13,745,161 53 6,046,298 22 6,600,827 26 42,980 - - - 35,210 - 28,659 - 1,025 - 889 - 120 - 187 - $27,166,330 100 $25,898,502 100 $1,705,453 6 $2,115,208 8 11,120 - 20,881 - 1,178,229 4 1,091,667 4 348 - - - 316,872 1 482,508 2 - - 6,415 - 170,159 1 498,854 2 12,403 - 12,004 - 13,284 - - - 128 - 128 - 2,910 - 2,751 - 1,092,209 4 1,044,304 4 9,610 - 8,153 - 979,856 4 980,012 4 30,942 - - - 46,675 - 29,872 - 2,934 - 4,075 - 22,192 - 22,192 - 2,797,662 10 3,159,512 12 9,266,203 34 9,266,203 36 9,066,203 33 9,066,203 35 200,000 1 200,000 1 181,698 1 180,533 1 14,695,878 54 12,608,192 48 1,790,463 7 1,494,452 6 1,640,828 6 1,640,828 6 11,264,587 41 9,472,912 36 280,466 1 739,639 3 (521,982) (2) (206,080) (1) 802,448 3 945,719 4 (55,577) - (55,577) - 24,368,668 90 22,738,990 88 $27,166,330 100 $25,898,502 100	Expressed in Thousands of New Taiwan Dollars December 31, 2019 December 31, 2018 Amount % Amount % $6,151,330 23 $5,227,246 20 1,623,640 6 1,567,675 6 23,247 - - - 1,201 - 14,419 - 1,362,287 5 1,918,484 8 13,882 - 735 - 24,721 - 42,181 - 1,342,132 5 1,604,466 6 60,220 - 79,286 - 1,700,000 7 - - 21,015,000 77 20,671,256 80 294,765 1 295,533 1 14,594,602 54 13,745,161 53 6,046,298 22 6,600,827 26 42,980 - - - 35,210 - 28,659 - 1,025 - 889 - 120 - 187 - $27,166,330 100 $25,898,502 100 $1,705,453 6 $2,115,208 8 11,120 - 20,881 - 1,178,229 4 1,091,667 4 348 - - - 316,872 1 482,508 2 - - 6,415 - 170,159 1 498,854 2 12,403 - 12,004 - 13,284 - - - 128 - 128 - 2,910 - 2,751 - 1,092,209 4 1,044,304 4 9,610 - 8,153 - 979,856 4 980,012 4 30,942 - - - 46,675 - 29,872 - 2,934 - 4,075 - 22,192 - 22,192 - 2,797,662 10 3,159,512 12 9,266,203 34 9,266,203 36 9,066,203 33 9,066,203 35 200,000 1 200,000 1 181,698 1 180,533 1 14,695,878 54 12,608,192 48 1,790,463 7 1,494,452 6 1,640,828 6 1,640,828 6 11,264,587 41 9,472,912 36 280,466 1 739,639 3 (521,982) (2) (206,080) (1) 802,448 3 945,719 4 (55,577) - (55,577) - 24,368,668 90 22,738,990 88 $27,166,330 100 $25,898,502 100	Expressed in Thousands of New Taiwan Dollars December 31, 2019 December 31, 2018 Amount % Amount % $6,151,330 23 $5,227,246 20 1,623,640 6 1,567,675 6 23,247 - - - 1,201 - 14,419 - 1,362,287 5 1,918,484 8 13,882 - 735 - 24,721 - 42,181 - 1,342,132 5 1,604,466 6 60,220 - 79,286 - 1,700,000 7 - - 21,015,000 77 20,671,256 80 294,765 1 295,533 1 14,594,602 54 13,745,161 53 6,046,298 22 6,600,827 26 42,980 - - - 35,210 - 28,659 - 1,025 - 889 - 120 - 187 - $27,166,330 100 $25,898,502 100 $1,705,453 6 $2,115,208 8 11,120 - 20,881 - 1,178,229 4 1,091,667 4 348 - - - 316,872 1 482,508 2 - - 6,415 - 170,159 1 498,854 2 12,403 - 12,004 - 13,284 - - - 128 - 128 - 2,910 - 2,751 - 1,092,209 4 1,044,304 4 9,610 - 8,153 - 979,856 4 980,012 4 30,942 - - - 46,675 - 29,872 - 2,934 - 4,075 - 22,192 - 22,192 - 2,797,662 10 3,159,512 12 9,266,203 34 9,266,203 36 9,066,203 33 9,066,203 35 200,000 1 200,000 1 181,698 1 180,533 1 14,695,878 54 12,608,192 48 1,790,463 7 1,494,452 6 1,640,828 6 1,640,828 6 11,264,587 41 9,472,912 36 280,466 1 739,639 3 (521,982) (2) (206,080) (1) 802,448 3 945,719 4 (55,577) - (55,577) - 24,368,668 90 22,738,990 88 $27,166,330 100 $25,898,502 100	Expressed in Thousands of New Taiwan Dollars December 31, 2019 December 31, 2018 Amount % Amount % $6,151,330 23 $5,227,246 20 1,623,640 6 1,567,675 6 23,247 - - - 1,201 - 14,419 - 1,362,287 5 1,918,484 8 13,882 - 735 - 24,721 - 42,181 - 1,342,132 5 1,604,466 6 60,220 - 79,286 - 1,700,000 7 - - 21,015,000 77 20,671,256 80 294,765 1 295,533 1 14,594,602 54 13,745,161 53 6,046,298 22 6,600,827 26 42,980 - - - 35,210 - 28,659 - 1,025 - 889 - 120 - 187 - $27,166,330 100 $25,898,502 100 $1,705,453 6 $2,115,208 8 11,120 - 20,881 - 1,178,229 4 1,091,667 4 348 - - - 316,872 1 482,508 2 - - 6,415 - 170,159 1 498,854 2 12,403 - 12,004 - 13,284 - - - 128 - 128 - 2,910 - 2,751 - 1,092,209 4 1,044,304 4 9,610 - 8,153 - 979,856 4 980,012 4 30,942 - - - 46,675 - 29,872 - 2,934 - 4,075 - 22,192 - 22,192 - 2,797,662 10 3,159,512 12 9,266,203 34 9,266,203 36 9,066,203 33 9,066,203 35 200,000 1 200,000 1 181,698 1 180,533 1 14,695,878 54 12,608,192 48 1,790,463 7 1,494,452 6 1,640,828 6 1,640,828 6 11,264,587 41 9,472,912 36 280,466 1 739,639 3 (521,982) (2) (206,080) (1) 802,448 3 945,719 4 (55,577) - (55,577) - 24,368,668 90 22,738,990 88 $27,166,330 100 $25,898,502 100
		Amount	%	Amount	%
11xx 1100 1110 1150 1170 1180 1200 1310 1410 1476 15xx 1517 1550 1600 1755 1840 1920 1932 1xxx Codes	Current assets Cash & cash equivalents Financial assets at fair value through profit or loss - current Net notes receivable Net accounts receivable Accounts receivable - related parties Other receivables Net inventories Prepayments Other financial assets - current Non-current assets Financial assets at fair value through other comprehensive income - noncurrent Investments accounted for using equity method Property, plant and equipment Right-of-use assets Deferred income tax assets Refundable deposits Long-term receivables Total assets Liabilities and Equity	$6,151,330	23	$5,227,246	20
		1,623,640 23,247 1,201 1,362,287 13,882 24,721 1,342,132 60,220 1,700,000	6 - - 5 - - 5 - 7	1,567,675 - 14,419 1,918,484 735 42,181 1,604,466 79,286 -	6 - - 8 - - 6 - -
		21,015,000	77	20,671,256	80
		294,765 14,594,602 6,046,298 42,980 35,210 1,025 120	1 54 22 - - - -	295,533 13,745,161 6,600,827 - 28,659 889 187	1 53 26 - - - -
		$27,166,330	100	$25,898,502	100
		$1,705,453	6	$2,115,208	8
21xx 2130 2170 2180 2200 2220 2230 2250 2280 2310 2399 25xx 2550 2570 2580 2640 2645 2670 2xxx 31xx 3100 3110 3120 3200 3300 3310 3320 3350 3400 3410 3420 3400 3xxx 3x2x	Current liabilities Contract liabilities - current Accounts payable Accounts payables - related parties Other receivables Other receivables Current income tax liabilities Provisions - current Lease liabilities - current Advances receipts Other current liabilities - Other Noncurrent liabilities Provisions - noncurrent Deferred income tax liabilities Lease liabilities - noncurrent Net defined benefit liabilities - noncurrent Guarantee deposits received Other noncurrent liabilities - other Total liabilities Equity Share capital Common shares capital Preferred shares capital Capital reserve Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Exchange differences on translating financial statements of foreign operations Unrealized gain/loss of financial assets at fair value through other comprehensive income Treasury stocks Total equity Total liabilities and equity
		11,120 1,178,229 348 316,872 - 170,159 12,403 13,284 128 2,910	- 4 - 1 - 1 - - - -	20,881 1,091,667 - 482,508 6,415 498,854 12,004 - 128 2,751	- 4 - 2 - 2 - - - -
		1,092,209	4	1,044,304	4
		9,610 979,856 30,942 46,675 2,934 22,192	- 4 - - - -	8,153 980,012 - 29,872 4,075 22,192	- 4 - - - -
		2,797,662	10	3,159,512	12
		9,266,203	34	9,266,203	36
		9,066,203 200,000	33 1	9,066,203 200,000	35 1
		181,698	1	180,533	1
		14,695,878	54	12,608,192	48
		1,790,463 1,640,828 11,264,587	7 6 41	1,494,452 1,640,828 9,472,912	6 6 36
		280,466	1	739,639	3
		(521,982) 802,448	(2) 3	(206,080) 945,719	(1) 4
		(55,577)	-	(55,577)	-
		24,368,668	90	22,738,990	88
		$27,166,330	100	$25,898,502	100

(Please refer to the Notes to consolidated financial statement)

Chairman of Board: Pin Cheng Yang Manager: Chia Hsiung Tseng Chief Accountant: Ling Chu Chen

232

Grand Pacific Petrochemical Corporation PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended December 31, 2019 and 2018

Codes	Items	Expressed in Thousands of New Taiwan Dollars Year Ended December 31, 2019 Year Ended December 31, 2018 Amount ％ Amount ％ $16,229,085 100 $20,305,094 100 (14,779,229) (91) (17,525,024) (86) 1,449,856 9 2,780,070 14 (315) - (4,744) - 4,744 - 13,318 - 1,454,285 9 2,788,644 14 (414,240) (2) (489,604) (2) (153,504) (1) (164,972) (1) (236,379) (1) (294,335) (1) (24,357) - (30,297) - 1,040,045 7 2,299,040 12 67,306 - 62,232 - (28,777) - 63,145 - (800) - (419) - 1,333,846 8 1,211,359 6 1,371,575 8 1,336,317 6 2,411,620 15 3,635,357 18 (341,495) (2) (675,251) (3) 2,070,125 13 2,960,106 15 (768) - (72,367) - (20,263) - 7,164 - (96,732) (1) (175,549) (1) 4,053 - 758 - (113,710) (1) (239,994) (1) (323,743) (2) (121,532) (1) 7,841 - 34,990 - (315,902) (2) (86,542) (1) (429,612) (3) (326,536) (2) $1,640,513 10 $2,633,570 13 $2.27 $3.26 $2.27 $3.25	Expressed in Thousands of New Taiwan Dollars Year Ended December 31, 2019 Year Ended December 31, 2018 Amount ％ Amount ％ $16,229,085 100 $20,305,094 100 (14,779,229) (91) (17,525,024) (86) 1,449,856 9 2,780,070 14 (315) - (4,744) - 4,744 - 13,318 - 1,454,285 9 2,788,644 14 (414,240) (2) (489,604) (2) (153,504) (1) (164,972) (1) (236,379) (1) (294,335) (1) (24,357) - (30,297) - 1,040,045 7 2,299,040 12 67,306 - 62,232 - (28,777) - 63,145 - (800) - (419) - 1,333,846 8 1,211,359 6 1,371,575 8 1,336,317 6 2,411,620 15 3,635,357 18 (341,495) (2) (675,251) (3) 2,070,125 13 2,960,106 15 (768) - (72,367) - (20,263) - 7,164 - (96,732) (1) (175,549) (1) 4,053 - 758 - (113,710) (1) (239,994) (1) (323,743) (2) (121,532) (1) 7,841 - 34,990 - (315,902) (2) (86,542) (1) (429,612) (3) (326,536) (2) $1,640,513 10 $2,633,570 13 $2.27 $3.26 $2.27 $3.25	Expressed in Thousands of New Taiwan Dollars Year Ended December 31, 2019 Year Ended December 31, 2018 Amount ％ Amount ％ $16,229,085 100 $20,305,094 100 (14,779,229) (91) (17,525,024) (86) 1,449,856 9 2,780,070 14 (315) - (4,744) - 4,744 - 13,318 - 1,454,285 9 2,788,644 14 (414,240) (2) (489,604) (2) (153,504) (1) (164,972) (1) (236,379) (1) (294,335) (1) (24,357) - (30,297) - 1,040,045 7 2,299,040 12 67,306 - 62,232 - (28,777) - 63,145 - (800) - (419) - 1,333,846 8 1,211,359 6 1,371,575 8 1,336,317 6 2,411,620 15 3,635,357 18 (341,495) (2) (675,251) (3) 2,070,125 13 2,960,106 15 (768) - (72,367) - (20,263) - 7,164 - (96,732) (1) (175,549) (1) 4,053 - 758 - (113,710) (1) (239,994) (1) (323,743) (2) (121,532) (1) 7,841 - 34,990 - (315,902) (2) (86,542) (1) (429,612) (3) (326,536) (2) $1,640,513 10 $2,633,570 13 $2.27 $3.26 $2.27 $3.25	Expressed in Thousands of New Taiwan Dollars Year Ended December 31, 2019 Year Ended December 31, 2018 Amount ％ Amount ％ $16,229,085 100 $20,305,094 100 (14,779,229) (91) (17,525,024) (86) 1,449,856 9 2,780,070 14 (315) - (4,744) - 4,744 - 13,318 - 1,454,285 9 2,788,644 14 (414,240) (2) (489,604) (2) (153,504) (1) (164,972) (1) (236,379) (1) (294,335) (1) (24,357) - (30,297) - 1,040,045 7 2,299,040 12 67,306 - 62,232 - (28,777) - 63,145 - (800) - (419) - 1,333,846 8 1,211,359 6 1,371,575 8 1,336,317 6 2,411,620 15 3,635,357 18 (341,495) (2) (675,251) (3) 2,070,125 13 2,960,106 15 (768) - (72,367) - (20,263) - 7,164 - (96,732) (1) (175,549) (1) 4,053 - 758 - (113,710) (1) (239,994) (1) (323,743) (2) (121,532) (1) 7,841 - 34,990 - (315,902) (2) (86,542) (1) (429,612) (3) (326,536) (2) $1,640,513 10 $2,633,570 13 $2.27 $3.26 $2.27 $3.25
		Amount	％	Amount	％
4000 5000 5900 5910 5920 5950 6000 6100 6200 6300 6900 7010 7020 7050 7070 7000 7900 7950 8200 8316 8311 8330 8349 8310 8380 8399 8360 8300 8500 9750 9850	Operating revenues Operating costs Total amount of gross operating profit Unrealized sales gain Realized sales gain Net gross operating profit Operating expenses Selling expenses Administrative expenses Research and development expenses Net operating Income Non-operating revenues and expenses Other revenues Other gains and losses Finance costs Share of profit or loss of subsidiaries, associates & joint ventures accounted for using equity method Total non-operating revenues and expenses Net profit before tax from continuing operations unit Income tax expenses Net profit for the year Other comprehensive income Items that will not be reclassified subsequently to profit or loss Unrealized valuation gain/loss of investment in equity instrument at fair value through other comprehensive income Remeasurements of the defined benefit plan Share of other comprehensive income of subsidiaries, associates & joint ventures accounted for using equity method - items that will not be reclassified subsequently to profit or loss Income tax related to items that will not be reclassified subsequently Total Items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Share of other comprehensive income of subsidiaries, associates & joint ventures accounted for using equity method - items that may be reclassified to profit or loss Income tax related to items that may be reclassified subsequently Items that may be reclassified subsequently to profit or loss Current other comprehensive income(net after tax) Total comprehensive income for the year Earnings per share in ordinary shares: (NT$) Basic earnings per share Diluted earnings per share	$16,229,085 (14,779,229)	100 (91)	$20,305,094 (17,525,024)	100 (86)
		1,449,856 (315) 4,744	9 - -	2,780,070 (4,744) 13,318	14 - -
		1,454,285	9	2,788,644	14
		(414,240)	(2)	(489,604)	(2)
		(153,504) (236,379) (24,357)	(1) (1) -	(164,972) (294,335) (30,297)	(1) (1) -
		1,040,045	7	2,299,040	12
		67,306 (28,777) (800) 1,333,846	- - - 8	62,232 63,145 (419) 1,211,359	- - - 6
		1,371,575	8	1,336,317	6
		2,411,620 (341,495)	15 (2)	3,635,357 (675,251)	18 (3)
		2,070,125	13	2,960,106	15
		(768) (20,263) (96,732) 4,053	- - (1) -	(72,367) 7,164 (175,549) 758	- - (1) -
		(113,710)	(1)	(239,994)	(1)
		(323,743) 7,841	(2) -	(121,532) 34,990	(1) -
		(315,902)	(2)	(86,542)	(1)
		(429,612)	(3)	(326,536)	(2)
		$1,640,513	10	$2,633,570	13
		$2.27		$3.26
		$2.27		$3.25

(Please refer to the Notes to consolidated financial statement)

Chairman of Board: Pin Cheng Yang Manager: Chia Hsiung Tseng

Chief Accountant: Ling Chu Chen

233

Grand Pacific Petrochemical Corporation PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2019 and 2018

Codes	Items	Share capital	Share capital	Capital reserve	Retained earnings	Retained earnings	Retained earnings		Other equity	Expressed in Thousands of New Taiwan Dollars Unrealized gain/loss on available-for- sale Financial Assets Treasury stocks Total equity $1,007,410 ($122,170) $20,718,147 (1,007,410) - 226,213 - - - - - - - - (906,620) - - (32,000) - - 1,725 - 66,593 94,859 - - 3,089 - - 7 - - 2,960,106 - - (326,536) $- ($55,577) $22,738,990 $ - ($55,577) $22,738,990 - - - - - (12,000) - - 1,066	Expressed in Thousands of New Taiwan Dollars Unrealized gain/loss on available-for- sale Financial Assets Treasury stocks Total equity $1,007,410 ($122,170) $20,718,147 (1,007,410) - 226,213 - - - - - - - - (906,620) - - (32,000) - - 1,725 - 66,593 94,859 - - 3,089 - - 7 - - 2,960,106 - - (326,536) $- ($55,577) $22,738,990 $ - ($55,577) $22,738,990 - - - - - (12,000) - - 1,066	Expressed in Thousands of New Taiwan Dollars Unrealized gain/loss on available-for- sale Financial Assets Treasury stocks Total equity $1,007,410 ($122,170) $20,718,147 (1,007,410) - 226,213 - - - - - - - - (906,620) - - (32,000) - - 1,725 - 66,593 94,859 - - 3,089 - - 7 - - 2,960,106 - - (326,536) $- ($55,577) $22,738,990 $ - ($55,577) $22,738,990 - - - - - (12,000) - - 1,066
		Common shares capital	Preferred shares capital		Legal reserve	Special reserve	Unappropriate d earnings	Exchange differences on translating financial statements of foreign operations	Unrealized gain/loss of financial assets at fair value through other comprehensive income	Unrealized gain/loss on available-for- sale Financial Assets
A1 A3 B1 B17 B5 B7 C17 L7 M1 M7 D1 D3 Z1 A1 B1 B7 M1	Balance at January 1, 2018 Effects of retrospective application and retrospective reclassification Appropriation & distribution of earnings for fiscal year 2017: Provision of legal reserve Reversal of special reserve Cash dividends to common shares Cash dividends and stock dividends to preferred shares Dividend unclaimed within the term by shareholders Parent company’s stocks disposed of by a subsidiary deemed as transaction in treasury stocks Adjustment to capital surplus for distribution of dividends to subsidiaries Changes in the share of equities of subsidiaries Net profit for the year ended December 31, 2018 Other comprehensive income after tax for the year ended December 31, 2018 Balance at December 31, 2018 Balance at January 1, 2019 Appropriation & distribution of earnings for fiscal year 2018: Provision of legal reserve Cash dividends to special shares Adjustment to capital surplus for distribution of dividends to subsidiary	$9,066,203 - - - - - - - - - - -	$200,000 - - - - - - - - - - -	$147,446 - - - - - 1,725 28,266 3,089 7 - -	$1,165,588 - 328,864 - - - - - - - - -	$1,658,208 - - (17,380) - - - - - - - -	$7,715,000 42,398 (328,864) 17,380 (906,620) (32,000) - - - - 2,960,106 5,512	($119,538) - - - - - - - - - - (86,542)	$ - 1,191,225 - - - - - - - - - (245,506)	$1,007,410 (1,007,410) - - - - - - - - - -	($122,170) - - - - - - 66,593 - - - -	$20,718,147 226,213 - - (906,620) (32,000) 1,725 94,859 3,089 7 2,960,106 (326,536)
		$9,066,203	$200,000	$180,533	$1,494,452	$1,640,828	$9,472,912	($206,080)	$945,719	$-	($55,577)	$22,738,990
		$9,066,203 - - -	$200,000 - - -	$180,533 - - 1,066	$1,494,452 296,011 - -	$1,640,828 - - -	$9,472,912 (296,011) (12,000) -	($206,080) - - -	$945,719 - - -	$ - - - -	($55,577) - - -	$22,738,990 - (12,000) 1,066

234

Grand Pacific Petrochemical Corporation PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY For the years ended December 31, 2019 and 2018

Codes	Items	Share capital	Share capital	Capital reserve	Retained earnings	Retained earnings	Retained earnings		Other equity	Expressed in Thousands of New Taiwan Dollars Unrealized gain/loss on available-for- sale Financial Assets Treasury stocks Total equity - - 99 - - 2,070,125 - - (429,612) - - - $- ($55,577) $24,368,668	Expressed in Thousands of New Taiwan Dollars Unrealized gain/loss on available-for- sale Financial Assets Treasury stocks Total equity - - 99 - - 2,070,125 - - (429,612) - - - $- ($55,577) $24,368,668	Expressed in Thousands of New Taiwan Dollars Unrealized gain/loss on available-for- sale Financial Assets Treasury stocks Total equity - - 99 - - 2,070,125 - - (429,612) - - - $- ($55,577) $24,368,668
		Common shares capital	Preferred shares capital		Legal reserve	Special reserve	Unappropriate d earnings	Exchange differences on translating financial statements of foreign operations	Unrealized gain/loss of financial assets at fair value through other comprehensive income	Unrealized gain/loss on available-for- sale Financial Assets
M7 D1 D3 Q1 Z1	Change in equity to subsidiaries Net profit for the year ended December 31, 2019 Other comprehensive income after tax for the year ended December 31, 2019 The equity instruments at fair value through other comprehensive income as disposed of by a subsidiary Balance at December 31, 2019	- - - -	- - - -	99 - - -	- - - -	- - - -	- 2,070,125 (15,783) 45,344	- - (315,902) -	- - (97,927) (45,344)	- - - -	- - - -	99 2,070,125 (429,612) -
		$9,066,203	$200,000	$181,698	$1,790,463	$1,640,828	$11,264,587	($521,982)	$802,448	$-	($55,577)	$24,368,668

(Please refer to the Notes to consolidated financial statement)

Note: Compensation to employees and remuneration to directors and supervisors have been deducted within the parent company only statements of comprehensive income. Please refer to Note 6(31).

Chairman of Board: Pin Cheng Yang

Manager: Chia Hsiung Tseng

Chief Accountant: Ling Chu Chen

235

Grand Pacific Petrochemical Corporation PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended December 31, 2019 and 2018

	Grand Pacific Petrochemical Corporation PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended December 31, 2019 and 2018	Grand Pacific Petrochemical Corporation PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended December 31, 2019 and 2018	Grand Pacific Petrochemical Corporation PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS For the years ended December 31, 2019 and 2018
Codes	Expressed in Thousands of New Taiwan Dollars Items Year ended December 31, 2019 Year ended December 31, 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net profit before tax from continuing operations unit $2,411,620 $3,635,357 Adjustments: Gain and expense loss not result influence on cash flows: Depreciation expenses (including depreciations in provision of right-of-use assets) 739,011 701,155 Net gain on financial assets at fair value through profit or loss (80) - Interest expenses 800 419 Interest income (32,526) (16,629) Dividend revenue (24,230) (27,824) Share of gains of subsidiaries, associates & joint ventures accounted for using equity method (1,333,846) (1,211,359) Net loss (gain) on disposal and retirement of property, plant and equipment 120 180 Property, plant and equipment transferred to expenses 17,451 46,031 Gain on disposal of investment (1,341) - Impairment loss on non-financial assets 3,773 - Unrealized sales gain 315 4,744 Realized sales gain (4,744) (13,318) Total gain and expense loss not result influence on cash flows (635,297) (516,601) Changes in assets/liabilities relating to operation activities Net increase of financial assets mandatorily measured at fair value through profit or loss (21,826) - Decrease in notes receivable 13,218 894 Decrease in accounts receivable 556,197 225,675 Decrease (increase) in accounts receivable - related parties (13,147) 77,077 Decrease (increase) in other receivables 20,150 (11,143) Decrease in inventories 262,334 26,880 Decrease (increase) in prepayments 19,066 (4,554) Decrease in contract liabilities (9,761) (18,687) Increase (decrease) in notes payable 86,562 (424,009) Increase in accounts payable - related parties 348 - Increase (decrease) in other payables (163,984) 41,010 Increase (decrease) in other payables - related parties (6,415) 6,415 Increase in provisions 1,856 1,331 Increase in other current liabilities - other 159 115 Decrease in net defined benefit liabilities (3,460) (8,162) Total net changes in assets/liabilities relating to operating activities 741,297 (87,158) Cash provided generated from operations 2,517,620 3,031,598 Interest received 29,836 15,727 Dividend received 131,759 75,429 Interest paid (800) (419) Income tax paid (672,844) (529,941) Net cash provided in operating activities 2,005,571 2,592,394 (Continued on the next page)
AAAA A00010 A20000 A20010 A20100 A20400 A20900 A21200 A21300 A22400 A22500 A22600 A23100 A23700 A23900 A24000 A20010 A30000 A31115 A31130 A31150 A31160 A31180 A31200 A31230 A32125 A32150 A32160 A32180 A32190 A32200 A32230 A32240 A30000 A33000 A33100 A33200 A33300 A33500 AAAA	CASH FLOWS FROM OPERATING ACTIVITIES: Net profit before tax from continuing operations unit Adjustments: Gain and expense loss not result influence on cash flows: Depreciation expenses (including depreciations in provision of right-of-use assets) Net gain on financial assets at fair value through profit or loss Interest expenses Interest income Dividend revenue Share of gains of subsidiaries, associates & joint ventures accounted for using equity method Net loss (gain) on disposal and retirement of property, plant and equipment Property, plant and equipment transferred to expenses Gain on disposal of investment Impairment loss on non-financial assets Unrealized sales gain Realized sales gain Total gain and expense loss not result influence on cash flows Changes in assets/liabilities relating to operation activities Net increase of financial assets mandatorily measured at fair value through profit or loss Decrease in notes receivable Decrease in accounts receivable Decrease (increase) in accounts receivable - related parties Decrease (increase) in other receivables Decrease in inventories Decrease (increase) in prepayments Decrease in contract liabilities Increase (decrease) in notes payable Increase in accounts payable - related parties Increase (decrease) in other payables Increase (decrease) in other payables - related parties Increase in provisions Increase in other current liabilities - other Decrease in net defined benefit liabilities Total net changes in assets/liabilities relating to operating activities Cash provided generated from operations Interest received Dividend received Interest paid Income tax paid Net cash provided in operating activities (Continued on the next page)	$2,411,620	$3,635,357
		739,011 (80) 800 (32,526) (24,230) (1,333,846) 120 17,451 (1,341) 3,773 315 (4,744)	701,155 - 419 (16,629) (27,824) (1,211,359) 180 46,031 - - 4,744 (13,318)
		(635,297)	(516,601)
		(21,826) 13,218 556,197 (13,147) 20,150 262,334 19,066 (9,761) 86,562 348 (163,984) (6,415) 1,856 159 (3,460)	- 894 225,675 77,077 (11,143) 26,880 (4,554) (18,687) (424,009) - 41,010 6,415 1,331 115 (8,162)
		741,297	(87,158)
		2,517,620 29,836 131,759 (800) (672,844)	3,031,598 15,727 75,429 (419) (529,941)
		2,005,571	2,592,394

236

(Brought Forward) BBBB CASH FLOWS FROM INVESTING ACTIVITIES: B01800 Acquisition of investment accounted for using equity method B02400 Refund of share payment under capital decrease from the investee accounted for using equity method. B02700 Acquisition of property, plants and equipment B03700 Increase in refundable deposits B06500 Increase in other financial assets B06700 Decrease in other noncurrent assets - other BBBB Net cash used in investing activities CCCC CASH FLOWS FROM FINANCING ACTIVITIES: C03000 Increase (decrease) in guarantee deposits received C04020 Repayment of principal of lease liabilities C04500 Payout of cash dividends C09900 Return of dividend unclaimed within the term back to capital reserve CCCC Net cash used in financing activities EEEE Net increase in cash and cash equivalents for the year E00100 Cash and cash equivalents, beginning of year E00200 Cash and cash equivalents, end of year E00210 Cash & cash equivalents recorded in parent company only balance sheets	(50,000) 19,836 (193,738) (136) (1,700,000) 67	(785,515) - (440,569) (4) - 92
	(1,923,971)	(1,225,996)
	(1,141) (12,494) (12,000) -	3,542 - (938,620) 1,725
	(25,635)	(933,353)
	55,965 1,567,675	433,045 1,134,630
	$1,623,640	$1,567,675
	$1,623,640	$1,567,675

(Please refer to the Notes to consolidated financial statement)

Chairman of Board: Pin Cheng Yang Manager: Chia Hsiung Tseng Chief Accountant: Ling Chu Chen

237

Grand Pacific Petrochemical Corporation Notes to Individual Financial Statements

For the Years Ended December 31, 2019 and 2018

(Expressed in Thousands of New Taiwan Dollars, unless otherwise specified)

1. Company history

(1) Petrochemical Manufacturing
(2) Synthetic Resin & Plastic Manufacturing
(3) Other Chemical Products Manufacturing
(4) Steam and Electricity Paragenesis, Heat Energy Supplying and international trade
(5) All business items that are not prohibited or restricted by law, except those that are subject to special approval

The Company's plants are located in Da-She District, Kaohsiung City, Taiwan.

The Company's stocks were officially listed on Taiwan Stock Exchange Corporation (TWEC) starting from December 21, 1988.

The Company is free of the ultimate parent company.

The Company takes New Taiwan Dollars as its functional currency. While the Company is a public company listed in Taiwan, the individual financial statements are expressed in New Taiwan Dollars to bring added comparison and consistency.

The date of authorization for issuance of financial statements and procedures for authorization

These financial statements were authorized for issuance by the Board of Directors on March 19, 2020.

3.

Application of New Issuance, Amendments 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 (hereinafter referred to as FSC):

As required by the Financial Supervisory Commission under Decrees Jin-Guan-Cheng-Shen-Zi 1070324857 dated July 17, 2018 and Jin-Guan-Cheng-Shen-Zi 1070324155 dated July 13, 2018, the Company should, starting from Year 2019, adopt the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations, and SIC Interpretations as endorsed by FSC under the issuance of International Accounting Standards Board (IASB) applicable from 2019 (hereinafter collectively referred to as IFRSs) and the relevant Regulations Governing the Amendment of Preparation of Financial Reports by Securities Issuers to prepare financial statements.

238

Those assembled under the Table below are the new issuance, revised and amended standards and interpretations applicable to IFRSs as endorsed by FSC in 2019:

New issuance, revised and amended standards and interpretations
IFRS 16 “Leases”

IFRI 23 “Uncertainty over income tax treatment”

Amendment to IFRS 9 “Prepayment features with negative compensation”

Amendment to IAS 28 “Long-term interests in associates and joint ventures”
Amendment to IAS 19 “Amendment, curtailment or settlement of a plan”

Annual Improvements to 2015-2017 Cycle

Effective date issued by
IASB

January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019

Except for the description below, the Company's assesses that the application of the aforementioned standards and explanations would not have a significant impact upon the individual financial conditions and individual financial performance of the Company:

IFRS 16, ‘Leases’

The Company expects to choose not to re-compile the comparison period in accordance with the transitional requirements of IFRS 16 (hereinafter referred to as "Modified Retrospective Adjustment"), and would recognize the conversion difference applicable retrospectively in retained earnings as of January 1, 2019.

Currently in accordance with IAS 17 on the grounds of agreement on operating lease treatment, on January 1, 2019, the Company would take the lease liabilities to measure the surplus lease payment, with the incremental loan interest rate discounted of the lessee on that day. The entire right-of-use assets would be taken with the amount of the lease liabilities as of that day to adjust the prepaid or payable amounts of the rents as to be recognized.

Toward the measurement of the right-of-use assets and lease liabilities as of January 1, 2019, the Company is subject to the following expedients:

1) The Company did not reassess whether the contracts were (or including) lease. Previously those contracts had been subject to IAS 17 and IFRI 4 while such contracts were identified as subject to provisions set forth under IFRS 16.
2) Those lease compositions with rational and similar characteristics, the Company would use single discount rate to measure the lease liabilities.
3) In case of lease which had been closed before December 31, 2019 during the lease, the Company adopted the method of short-term lease.
4) Except rent payment, the Company did not count the additional costs yielded from the lease so earned into the measurement of the right-of-use assets as of January 1, 2019.
5) Amidst the proceedings of the measurement for the lease liabilities, toward the decision on the lease terms (e.g., duration of the lease), the Company would

239

measure it based on the expectancy as of January 1, 2019.

While the Company applied initially IFRS 16, the lease contract attribute to the lesser to increase right-of-use assets amounted NT$56,720 thousand and increase lease liabilities – current and noncurrent amounted NT$13,559 thousand and NT$43,161 thousand, respectively as of January 1, 2019, the interest rate range applicable to the incremental loan upon the lease liabilities recognized was 0.63% - 1.10%. Besides, the accounting handling by the Company toward the lessors would not cast a significant impact.

As the Company disclosed the amount of commitment for operating lease under IAS 17, the present value of incremental loan interest rate discounted at the initial application date used by the Company and lease liabilities recognized on January 1, 2019 are adjusted as follows:

Business leasehold commitment with disclosure under IAS 17 as of
December 31, 2018
Plus: Rational expected evaluation toward leaserenewal rightswith the
adjustment
Less: Short-term lease applied to exemption
Total lease liabilities recognizable under IFRS 16 as of January 1, 2019
The incremental loan interest rate upon the initial application date of the
Company
Present value of lease liabilities recognized under IFRS 16 as of January
1, 2019

$ 34,596
24,780
(
1,021)
$ 58,355

0.63% - 1.10%

$56,720

(2) The impact upon the International Financial Reporting Standards (IFRSs) by the new issuance, amendment without endorsed by FSC:

Under Decree Jin-Guan-Cheng-Shen-Zi 1080323028 of FSC as of July 29, 2019, the Company should adopt the IFRSs issued by International Accounting Standards Board (IASB) and the revised Regulations Governing the Preparation of Financial Reports by Securities Issuers to prepare financial statements starting from 2020.

The following Table assembles the new issuance, revised and amended standards and interpretations endorsed by FSC as applicable to IFRSs starting from 2020:

New issuance, revised and amended standards and interpretations Amendment to IFRS 3 “Definition of business” Amendment to IAS 1 and IAS 8 “Definition of significance” Amendment to IFRS 9, IAS 39 and IFRS 7 “Revolution of interest rate indicators”	Effective date issued byIASB
	January 1, 2020 January 1, 2020 January 1, 2020

As of the date on which the Company’s financial statements were authorized and issued, the relevant standards adopted by the Company for evaluation, amendment to interpretations would not have a significant impact upon the individual financial conditions and the individual financial performance.

(3) The impact brought by IFRS having been issued by IASB but have not been endorsed by the FSC:

The Company has not adopted the following IFRSs which have been issued by IASB but have not been endorsed by the FSC. The actual effective date applied shall be pursuant to provision of FSC.

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Effective date issued by IASB January 1, 2021 January 1, 2022 Pending for resolution by the International Accounting Standards Board (IASB)

New issuance, revised and amended standards and interpretations

IFRS 17 “insurance contracts” Amendment to IAS 1 “To classify liabilities into current or noncurrent ” Amendment to IFRS 10 and IAS 28 “Sales or investment of assets between investors and associates or joint ventures”

The preliminary evaluation result indicates that the aforementioned standards and interpretations would not cast a significant impact upon the Company’s individual financial conditions and the individual financial performance. The Company will continually evaluate the amounts with the relevant impact which would be disclosed in full upon completion of the evaluation process.

4. Summary of significant accounting policies

The principal accounting policies applied in the preparation of the individual financial statements are explained below. Unless otherwise specified, these policies have been consistently applied to all the periods presented.

(1) Statement of compliance
The individual financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
(2) Basis of preparation
1) Except for the following significant items, the individual financial statements have been prepared under the historical cost convention:
- A. Financial assets and liabilities (including derivative instruments) at fair value through profit or loss measured based on the fair value.
- B. Financial assets at fair values through other comprehensive income measured based on the fair value.
- C. The liabilities on the shares-based payment agreement with cash settlement measured based on the fair value.
- D. Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.
2) The preparation of financial statements in compliance with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the individual financial statements, please refer to Note 5.
3) The Company became subject to IFRS 16 for the first time on January 1, 2019 with a choice not to reclassify the financial statements and the notes with comparison period for Year 2018 and to recognize the difference in conversion into the retained earnings as of January 1, 2019. The financial statements and notes with comparison period for Year 2018 were prepared in accordance with IAS 17 and the IFRIC Interpretations, and SIC Interpretations.
4) When preparing individual financial statements, the Company adopts the equity method for subsidiaries, associates, or joint ventures that it has investments in. In

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order for the profits and losses, other comprehensive income, and equities of the year in this individual financial statement to be identical to those in the Company’s consolidated financial statement that attribute to the clients of the Company, on the individual and consolidated bases, for several accounting differences, the “investments accounted for using the equity method”, the “shares of profits and losses of subsidiaries, associates, and joint ventures accounted for using the equity method”, “shares of other comprehensive income of subsidiaries, associates, and joint ventures accounted for using the equity method”, and related equity items were adjusted.

(3) Foreign currency translation
1) Items included in the Company's individual financial statements are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The individual financial statements are presented in New Taiwan Dollars, which is the Company's functional and the Company's presentation currency.
2) When preparing financial statements using currencies other than the entity's functional currency (foreign currency) converted into functional currency at the spot exchange rate on the transaction day or measurement date, and the exchange difference resulting from the translation of these transactions was recognized as current profit and loss. At the end of the financial statement period, the balance of foreign currency monetary assets and liabilities were evaluated and adjusted at the spot exchange rate on the balance sheet date, and translation differences arising from the adjustment were recognized as current profit and loss. In case of foreign currency non-monetary assets and liabilities, the balance was evaluated and adjusted at the spot exchange rate quoted on the balance sheet date as measured at fair value through profit or loss, and the exchange difference arising from the adjustment was recognized as current profit and loss as measured at fair value through comprehensive income. The resulting exchange differences resulting from the adjustment were recognized in other comprehensive income items; where they were not measured at fair value, they were measured at the historical exchange rate on the initial trading day. All gains and losses on exchange were reported according to the attribute of the transaction and other gains and losses in the comprehensive income.
3) The Company’s assets and liabilities of the foreign operations (including the subsidiaries, associates, joint ventures or branches of the Company in the countries of business operation or those using different currencies) were translated into New Taiwan Dollars at the spot exchange rate quoted on the balance sheet date. The income and expense items were translated using the exchange rates average in that period. All exchange differences arising from the translation were recognized as other comprehensive income.
4) When the foreign operations were disposed of and constituting a loss of control, joint control or significant influence on the foreign operations, all and the relevant interests of the foreign operations would be reclassified into profit or loss. In some cases where the disposal of subsidiaries in foreign operations did not constitute a loss of control of the subsidiary, the cumulative exchange difference recognized in other comprehensive income was calculated into the equity transaction on a pro rata basis, but it was not recognized as profit or loss. In some cases where the interests of the disposal of associates or joint venture in foreign operations did not constitute a significant impact of loss on the

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associates or joint venture or joint control in interests, the cumulative exchange difference recognized in other comprehensive income was reclassified into profit or loss based on the disposal ratio.

(4) Criteria of classification of current and noncurrent assets and liabilities
1) Assets that meet one of the following criteria are classified as current assets:
- A. Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
- B. Assets arising mainly from trading activities;
- C. Assets that are expected to be realized within twelve (12) months from the balance sheet date;
- D. Cash & cash equivalents unless the asset is restricted from being used for an exchange or used to settle a liability for more than twelve (12) months after the balance sheet date.

The Company classifies the assets that do not satisfy the above conditions as noncurrent.

2) Liabilities that meet one of the following criteria are classified as current liabilities:
A. Liabilities that are expected to be paid off within the normal operating cycle;
B. Liabilities arising mainly from trading activities;
C. Liabilities that are to be paid off within twelve (12) months from the balance sheet date;
D. Liabilities for which the Company does not have an unconditional right to defer settlement for at least twelve (12) months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

The Company classifies the liabilities that do not satisfy the above conditions as noncurrent.

(5) Cash & cash equivalents

(6) Financial instruments

Financial assets and financial liabilities should be recognized when the Company became a party to the terms of the financial instruments contract.

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immediately as profit or loss.

(7) Financial assets at fair value through profit or loss
1) Financial assets at fair value through profit or loss include financial assets mandatorily measured at fair value through profit or loss and designation as financial assets at fair value through profit or loss. The financial assets mandatorily measured at fair value through profit or loss include investments in equity instruments that the Company does not specify at fair value through other comprehensive income, and investments in debt instruments that did not qualify as being measured at amortized cost or at fair value through other comprehensive income.
2) In a case carried at amortized costs or financial assets at fair values through other comprehensive income, when measurement or recognition inconsistency could be eliminated or significantly reduced, the Company designated the case as financial assets at fair value through profit or loss at the time of initial recognition.
3) The Company adopts transaction day accounting for financial assets at fair value through profit or loss consistent with transaction customs.
4) The Company measured at fair value at the time of initial recognition, and recognized related transaction costs in profit or loss and subsequently measured at fair value and the gains or losses were recognized in profit or loss.
5) When the right to receive dividends was ascertained and the economic benefits related to dividends were likely to flow inward while the amount of dividends could be reliably measured, the Company recognized the dividend income in profit or loss.
(8) Financial assets at fair values through other comprehensive income
1) Referring to an irrevocable option at the time of initial recognition to report changes in the fair value of investments in equity instruments that were not held for trading in other comprehensive income; or the investment in debt instrument simultaneously met the following conditions:
- A. The financial asset held under the business model of collecting cash flows under contracts and for the purposes of selling.
- B. The cash flow generated on a specific date under the contract terms for the financial assets were completely intended to pay off the principal and the interest of the outstanding principals.
2) The Company adopts transaction day accounting for financial assets at fair value through comprehensive income consistent with transaction customs.
3) The Company measured at fair value plus transaction costs at initial recognition, and subsequently at fair value:
- A. Changes in the fair value of equity instruments were recognized in other comprehensive income. When derecognized, the cumulative gains or losses previously recognized in other comprehensive income would not be reclassified to profit or loss and would be transferred to retained earnings instead. When the right to receive dividends was ascertained and the economic benefits related to dividends were likely to flow inward while the amount of dividends could be reliably measured, the Company recognized the dividend income in profit or loss.

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  - B. Changes in the fair value of debt instruments were recognized in other comprehensive income, impairment losses before derecognition, interest income and gains and losses in foreign currency exchange were recognized in profit or loss, and at the time of derecognition, the cumulative gains or losses previously recognized in other comprehensive income were reclassified from the equity into profit or loss.

(9) Financial assets carried at amortized cost
1) Referring to the events that conform with the conditions as below simultaneously:
- A. The financial assets held under the business model for the purposes of collecting cash flows under contracts.
- B. The cash flow generated on a specific date under the contract terms for the financial assets were completely intended to pay off the principal and the interest of the outstanding principals.
2) The Company adopts transaction day accounting for financial assets carried at amortized cost consistent with transaction customs.
3) The Company measured at fair value plus transaction costs at initial recognition, and subsequently used the effective interest method to recognize interest income during the circulation period based on the amortization process, and recognized impairment losses, and when derecognized, the gains or losses were recognized in profit or loss.
4) The Company held time deposits that were not eligible for cash equivalent. As the holding period was short, the effect of discounting was insignificant, which was measured by the amount of investment.
(10) Accounts & notes receivable

(11) Impairment of financial assets

For investment in debt instruments at fair value through other comprehensive income, and financial assets carried at amortized cost and accounts receivable or contract assets that contain significant financial components, rent receivables, lending commitments and financial guarantee contracts, The Company, after considering all reasonable and corroborable information (including forward-looking perspectives) on each balance sheet date, measured by the amount of expected credit loss in twelve (12) months toward an insignificant increase in credit risk since initial recognition. For the credit risk has increased significantly since the original recognition, the allowance for loss was measured by the amount of expected credit loss during the existence period. For accounts or contract assets that do not include significant financial components, the allowance for losses measured by the amount of expected credit loss during the existence period.

(12) Derecognition of financial assets

The Company will derecognize financial assets when one of the following conditions is met:

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When rights to contract of receiving cash flow from financial asset has expired.
Transfer of right to contract of receiving cash flow from financial asset, and when nearly all risk and reward associated with the said financial assets have been transferred.
Transfer of rights to contract of receiving cash flow from financial asset, and excluding control over the financial assets.
(13) Lease transaction of the lessor - rent receivables/operating leases
1) Pursuant to the terms and conditions under the lease agreements, when almost all the risks and rewards of lease ownership were borne by the lessee, they are classified as finance leases.
- A. As the lease started up, the net lease investment (including the original direct cost) was recognized as "rent receivables", and the difference between the total lease receivables and the present value was recognized as "unearned financing income from finance leases".
- B. Subsequent adoption of a systematic and reasonable basis to allocate financing income over the lease period to reflect a fixed rate of return on the net lease investment held by the lessor.
- C. The period related lease payments (excluding service costs) offset the total lease investment to reduce the principal and unearned financing income.
2) Lease income from operating leases, net of any incentives given to the lessee, was recognized as a current profit or loss and amortized on a straight line basis during the lease period.

(14) Inventory

(15) Investments accounted for using the equity method/subsidiaries
1) Subsidiaries are entities controlled by the Company (including structural entities). When the Company is exposed to the variable compensation from participation in an entity or is entitled to the said variable compensation and is capable of impacting the compensation through its power over the entity, the Company has control over the entity. The Company adopts the equity method when handling investments in subsidiaries. Upon acquisition, they are recognized by the cost, including the goodwill already identified upon acquisition, with any accumulated impairment loss estimated to occur subsequently deducted.
2) The share of profit or loss for the Company after acquisition of a subsidiary is recognized as current profit and loss and the share of other comprehensive income after acquisition is recognized as other comprehensive income. When the share of loss recognized by the Company in its subsidiaries is equal to or

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exceeds the equity held by the Company in the subsidiaries, the shareholding ratio will continue to be applied in the recognition of loss.

3) The unrealized profits or losses of fair current transactions between the Company and subsidiaries were eliminated in the individual. The profits and losses generated from the countercurrent and side stream transactions between the Company and subsidiaries were recognized in the individual financial statements only to the extent that the Company has no interest in the subsidiaries. The accounting policies of subsidiaries have been adjusted as necessary, and the policies adopted by the Company have been consistent.
4) When changes in an subsidiary's equity are not recognized in profit or loss and other comprehensive income of the subsidiary and such changes do not affect the Company's shareholding ratio of the subsidiary, the Company recognizes the Company's share of change in equity of the subsidiary in 'capital reserves' in shareholding ratio .
5) Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
6) When the Company loses control of a subsidiary, the Group measures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. The difference between fair value and carrying amount is recognized in current profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on other comprehensive income as previously recognized, its accounting treatment is on the same basis as would be required if the related assets or liabilities were disposed directly by the Company. That is, when the Company loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
7) As is required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, the current profit and loss and other comprehensive income in individual financial statements and those in the financial statements prepared on a consolidated basis that belong to the parent company's owners‘ amortizations are the same and the equities of the owners in individual financial statements and those in financial statements prepared on a consolidated basis that belong to the parent company's owners’ equity are identical.
(16) Property, plant and equipment
1) Property, plant and equipment are initially recorded at cost. Loans costs incurred during the construction period are capitalized.
2) Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss

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during the financial period in which they are incurred.

3) Land is not depreciated. The subsequent measurement of other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
4) The assets' residual values, useful lives and depreciation methods are reviewed by the Company at each financial year-end. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors', from the date of the change. The estimated useful lives of various assets are as follows:
- A. Buildings & constructions 4 - 56 years
- B. Machinery & equipment 7 - 25 years
- C. Transportation facilities 2 - 6 years
- D. Other equipment 3 - 8 years
5) The Company's depreciable assets were originally used in the rate-decreasing method at the time of tax declaration; however, the Company has switched to use the average method in Year 1998. This change was already approved by the National Taxation Bureau of the Southern Area, Ministry of Finance with Letter (1998) Nan-Qu-Guo-Shui-Shen-I-Zi 87051967.
(17) Lease agreements of the lessee - right-of-use assets/lease liabilities (Applicable to Year 2019)
1) Lease assets were recognized as right-of-use assets and lease liabilities on the date when they became available for use by the Company. When the lease agreement was a short-term lease or lease of a low-value underlying asset, the lease payment was recognized as expense by straight-line method
2) In lease liabilities, the Company recognized the unpaid lease payments at the lease starting date at the present value of the Company’s incremental loan rate discounted. The lease payments include fixed payments, less any incentives that could be received for the lease. Subsequently the Company measure at the amortized cost method under the interest method and recorded as interest expenses during the lease period. When the non-contract modification caused a change in the lease period or lease payment, the lease liabilities would be reassessed, and the remeasurements would be adjusted to right-of-use assets.
3) The right-of-use assets were recognized at cost on the lease starting date and the cost includes the original measured amount of lease liabilities. The subsequent measurement using cost model which were earlier at the end of the useful life of the right-of-use assets or at the end of the lease period while depreciation expenses were recorded. When lease liabilities were reassessed, right-of-use assets would adjust any remeasurement of the lease liabilities.
(18) Lease assets/operating lease (Lessees)(Applicable to Year 2018)
1) Pursuant to the terms and conditions under the lease agreements, when almost all risks and rewards of lease ownership are borne by the Company, it is classified as a finance lease.

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A. Upon initiation of the lease, the assets and liabilities were recognized based on the fair value of the lease assets and the lowest present value of payment, whichever is the lower.
B. Subsequently the minimum lease payments were allocated to finance costs and reduce outstanding liabilities. The finance costs were allocated period-by-period during the lease duration so that the period interest rate calculated based on the balance of liabilities would be fixed.
C. Property, plant and equipment obtained under finance leases were depreciated according to the useful life of the assets. If the lease period could not be reasonably determined, the Company would acquire ownership and recorded as depreciations based on the useful life of the assets and the lease period, whichever was the shorter.
2) The operating lease payment was recorded and amortized on straight-line basis during the lease period as current profit or loss, after deducting any incentive received from the lessor.

(19) Impairment loss on non-financial assets

The Company estimates the recoverable amount of assets with signs of impairment on the balance sheet date. When the recoverable amount was lower than its carrying amount, the impairment loss would be recognized. The recoverable amount refers to the fair value of an asset less disposal cost or its value in use, whichever is higher. Except for goodwill, when the impairment of assets recognized in previous years did not exist or decrease, the impairment loss would be reversed, but the asset carrying amount increased by the impairment loss should not exceed the carrying amount after depreciation or amortization of the asset if no impairment loss was recognized.

(20) Accounts payable

Accounts payable are obligations to pay for products or labor services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(21) Financial liabilities at fair value through profit or loss
1) Referring to the main purpose of the sale or repurchase in the latest period, and financial liabilities held for trading except for derivatives instruments that are designated as hedging instruments under hedge accounting. The financial liabilities at fair value through profit or loss were designated on the Initial recognition. When a financial liability meets one of the following conditions, the Company measured at fair value through profit loss on the initial recognition:
- A. As hybrid (combined) contracts; or
- B. Where the inconsistency in significant decrease measurement or recognition could be eliminated; or
- C. Pursuant to the documented risk management policies, the instruments with performance evaluated in fair value based management.
2) The Company measured at fair value at the time of initial recognition, and recognized the related transaction costs in profit or loss and subsequently measured at fair value and the gains or losses were recognized in profit or loss.

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3) In case of a financial liability designated to be measured at fair value through profit or loss where the amount of change in fair value resulted from credit risk, except for avoiding improper accounting ratios or loan commitments and financial guarantee contracts, the Company recognized the same in other comprehensive income.

(22) Provisions

The Company is under current statutory or constructive obligation due to past events, very likely that economically efficient resources would need to be discharged to settle such obligation and the amount of the obligation could be reliably estimated when the provisions were recognized. The measurement of provisions is based on optimal estimated present value of the expenditure required to settle the obligation on the balance sheet date. The discount rate uses the pre-tax discount rate that reflects the current market assessment of the time value of currency and the specific risk of the liability. The amortization discounted is recognized as interest expenses. The future loss in operations should not be recognized as provisions.

(23) Employee benefits
1) Short-term employee benefits

2) Post-employment benefits
A. Defined contribution plans

B. Defined benefit plans
- Net obligation under a defined benefit plans is defined as the present value of an amount of future benefits that employees will receive for their services with the Company in current year or prior periods, and the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The discount rate is determined by reference to the balance sheet date, the currency of defined benefit plans and the market yield of high-quality corporate bonds that were consistent during the period. The countries of such bonds without in-depth market adopt the market yield of government bonds (as of the balance sheet date).
- Remeasurement arising on defined benefit plans is recognized in other comprehensive income in the current year in which they arise, and expressed in the retained earnings.
- The expenses related to the service cost of the prior period were immediately recognized into profit or loss.
3) Termination benefits

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Termination benefits refers to the benefits provided by the termination of the employment before the normal retirement date or when the employee decides to accept the Company’s benefits offer in exchange for termination of the employment. The cost of restructuring was not recognized until the moment while the Company could no longer revoke a contract for termination benefits or the restructuring cost was recognized, whichever came the earlier. Termination benefits that were not expected to be fully settled twelve (12) months after the balance sheet date should be discounted.

4) Compensation to employees and remuneration to directors and supervisors

(24) Financial liabilities & equity instruments
1) Classification of financial liabilities or equity instruments

The liability and equity instruments issued by the Company were classified as financial liabilities or equity according to the substance of the contract agreement and the definition of financial liabilities & equity instruments.

2) Equity instruments

The “equity instruments” refers to any contract that recognizes the remaining equity of an enterprise after the assets are deducted from all its liabilities. The equity instruments issued by the Company are recognized at the price obtained after deducting the direct issue cost.

3) Financial liabilities

4) Derecognition of financial liabilities

The Company did not derecognize financial liabilities until the obligations were lifted, cancelled or lapsed. When financial liabilities were derecognized, the difference between their carrying amount and total consideration paid or payable (including any transferred non-cash assets or liabilities assumed) was recognized into profit or loss.

5) Inter-offset of financial assets and liabilities

(25) Share capital & treasury stocks

1) Share capital

Common shares were classified as equity. The classification of preferred shares refers to the definition of substantial contractual agreement, financial liabilities

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and equity instruments, and evaluates the specific rights attached to preferred shares. When the basic characteristics of financial liabilities were exhibited, they were classified as liabilities; otherwise they would be an equity. The net of increase in costs directly attributable to issuance of new share or share warrants after deducting income tax is recorded as the deduction of share prices.

2) Treasury stocks

The Company withdrew the issued outstanding shares and recognized them as "treasury stocks" based on the consideration paid at the time of purchase (including direct attributable costs) as a deduction of equity. Where the price of the disposal of treasury stocks is higher than the carrying amount, the difference was listed as capital surplus-treasury stocks transactions. Where the disposal price is lower than the carrying amount, the difference is offset against the asset surplus generated by the exchange of the same type of treasury stocks. In case of a shortfall, the surplus is debited in the retained earnings. The carrying amount of treasury stocks is taken weighted average and calculated separately according to the reason for recovery.

Where subsidiary held the Company's stocks using the equity method to recognize the share of profit and loss and prepare financial statements, the subsidiary's stocks of the Company should be dealt with as treasury stocks.

(26) Shares-based payment

1) The shares-based payment agreement upon equity settlement was pursuant to the employee service acquired at fair value of the given equity commodities on the given day, and was recognized as compensation costs during the vesting period, and the equity was relatively adjusted. The fair value of equity commodities should be reflected with the influence of the market price vested conditions and the non-vested conditions. The recognized compensation cost was adjusted according to the expected amount of incentive rewards that meet the service condition and the non-market price vested condition until the final recognition amount was recognized in the vested amount.
2) The shares-based payment agreement settled in cash was based on the fair value of the liabilities assumed, recognized as compensation costs and liabilities within the vesting period, and was based on the fair value of the equity commodities given on each balance sheet date and settlement date to measure, any change recognized as profit or loss of the current year.

(27) Income tax

1) The income tax expenses comprise current and deferred income tax. Income tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the income tax is recognized in other comprehensive income or

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directly in equity, respectively.

2) The Company calculates the income tax payable for the current term exactly in accordance with the tax rates that had been enacted or substantially enacted in the countries for the income tax as of the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable relevant laws of income tax, and under the fact of situations, the income tax liabilities estimated shall be paid to tax collection authority. The unappropriated earnings having been consolidated were charged for the income tax. The income tax expense of unappropriated earnings was recognized based on the actual allocation of the earning as resolved in the shareholders’ meeting in the year ensuing the year in which the earnings were yielded.
3) Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the balance sheets. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted as of the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
4) Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
5) Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.
6) The Company's tax incentives oriented expenditures that comply with the statutory incentives were accounted with use of income tax deduction accounting. The unused income tax credit was transferred into the latter period of time within the scope as the credit ready for future use, duly recognized deferred income tax assets.
7) The difference between the previous year's estimated income tax of the Company and the adjustment difference approved by the tax collection authority was recognized as the adjustment items of the income tax of the current year.
(28) Recognition of revenues

After identifying the performance obligations under a customer contract, the Company allocated the transaction price to each performance obligation and

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recognized revenue when the performance obligations were fulfilled.

1) Sales revenues
A. All products manufactured by the Company and sold into the market were recognized as revenue when the control over the product was transferred to the customers. To put it in more understandable terms, when the products were delivered to the customers, the customers have discretion on the channel and price of product sales, and the Company was not in any outstanding performance obligations that might affect the customers’ acceptance of the products. When the products were shipped to a designated location, the risk of obsolescence and loss has been transferred to the customers and the customers would accept the products according to the sales contract. The delivery of the products did not occur until there was objective evidence to prove all standards/criteria for acceptance have been met.
B. Where the Company provides standard warranty on the products sold and is obliged to refund for defective products, the provisions were recognized at the moment of sales.
C. Accounts receivable were recognized at the moment when the goods were delivered to the customers. At that timepoint, the Company was entitled to the unconditional rights to the contract price and the price could be received from the customers only after the time elapsed. The advance receipts before the arrival of the products was recognized as a contract liability.
D. The control of the ownership of the processed products was not transferred upon processing of the materials so that the income was not recognized when the material was forwarded.

2) Refund liabilities

3) Financing component

Under the contracts signed by and between the Company and the customers, the collection conditions of the sales and labor service transactions were consistent with the market practice. It was, therefore, judged that the contracts did not contain a significant financing component. In addition, the time interval for transferring the promised goods or labor services and receiving the consideration amidst the contracts was within one year. The significant financing component would not adjust the transaction price to reflect the time value of the currency.

4) Costs to acquire contracts from customers

Although the incremental costs incurred by the Company in obtaining a customer contract were expected to be recoverable, the relevant contract period was shorter than one year. These costs were, therefore, recognized as current operating costs or expenses at the moment of occurrence.

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(29) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Company will comply with any conditions attached to the grants and the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Company recognizes expenses for the related costs for which the grants are intended to compensate. Such government grants related to property, plant and equipment were recognized as noncurrent liabilities, and were recognized as current profit or loss using the straight-line method based on the estimated useful life of the relevant assets.

Major sources leading to material accounting judgments, estimates and assumption uncertainties

The results of the Company’s individual financial statements would be affected by the adoption of accounting policies, accounting estimates and assumptions. Therefore, when the Company adopted the significant accounting policies under Note 4, the acquisition of assets from other sources would result in the carrying amount of assets and liabilities in the next information on significant adjustment risks in the individual financial statements that would require management to use appropriate professional judgment, estimates and assumption uncertainties. The Company’s estimates and relevant assumptions were based on the optimal estimates pursuant to the requirements of IFRS endorsed and issued to take effect by the FSC. Estimates and assumptions would be based on historical experience and other factors considered to be relevant, but actual results and estimates might differ. The Company continues to review the estimates and assumptions. Where the revision of the estimate would only affect the current year, the accounting estimate would be recognized in the current year. Where the estimation affects both the current year and the future period, then it would be recognized in the estimated and amended current year and future period.

(1) Major judgments to adopt accounting policies

1) Judgment of business model of financial asset classification

The Company evaluates the business model of financial assets based on the level of financial assets that are jointly managed to achieve a specific business purpose. This evaluation calls for consideration of all relevant evidence, including asset performance measurement methods, risks affecting performance, and the salary determination method of relevant managers, salary determination method where the judgment was required. The Company continuously assesses whether its business model judgment is appropriate, and monitors the financial assets carried at amortized cost and investment in debts instruments at fair value through other comprehensive income to look into the reasons for its disposition to assess whether the disposition would be consistent with the business model's objectives. Whenever the business model was found to have changed, the Company would postpone the adjustment of the subsequent classification of financial assets.

2) Commitment to operating lease - the Company is the Lessor

The Company has signed commercial property agreements toward some property portfolios. Based on its evaluation of the agreed terms, the Company still retains significant risks and rewards of ownership of these properties and

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treats these leases as operating leases.

3) Leased term (Applicable to Year 2019)

In determining the lease term of the leased assets, the Company takes into account all relevant facts and circumstances that might generate economic incentives to exercise (or not to exercise) the option, including all facts and circumstances from the start of the lease to the day when the option is exercised with expected changes. The main factors taken into account include the contract terms and conditions during the period covered within the option, significant lease interest improvements during the contract period, and the importance of the underlying assets to the lessee's operations and the like. Significant changes in such matters or circumstances within the control of the Company when it occurred while the Company reassessed the lease term anew.

(2) Major accounting estimation & assumptions

The accounting estimates conducted by the Company were based on the reasonable expectations of future events on the grounds of the situation on a specific day, but the actual results might differ from the estimates, and the assets and liabilities of the next financial year might have significant adjustments to the risk of carrying amount and assumptions. Please note the following instructions:

1) Estimated impairment of financial assets

The impairment of accounts receivable and contract assets was estimated based on the Company's assumptions about the default rate and the expected loss rate. The Company took into account historical experience, current market conditions and forward-looking information to work out assumptions and select input values for impairment assessment. For more details regarding the important assumptions and input values please refer to Note 6(4). In the event that the actual future cash flow is below expected, it might cause significant impairment losses. The carrying amount of the Company’s receivables was NT$1,402,091 thousand and NT$1,975,819 thousand, respectively as of December 31, 2019 and 2018,

2) Evaluation of inventory

Since inventory should be measured at the lower of cost or net realizable value, the Company shall use judgment and estimation to decide the net realizable value at the balance sheet date. Due to the rapid changes of the industrial environment, the Company assesses the amount of inventory on the balance sheet date that has undergone normal wear and tear, obsolescence or no market sales value, and will mark down the cost of inventories to the net realizable value. This assessment of inventories primarily uses product need within a certain period in the future as the basis of estimation, and thus material changes could occur. As of December 31, 2019 and 2018, the carrying amount of the Company's inventories was NT$1,342,132 thousand and NT$1,604,466 thousand, respectively. (After deducting loss on allowance for obsolescence and market price decline of inventories of NT$11,775 thousand and NT$13,563 thousand, respectively)

3) Fair value measurement and evaluation process

Where the assets and liabilities measured at fair value were not quoted in the active market, the Company would decide whether to outsource the valuation and determine the appropriate fair value technology according to relevant laws or judgments. Where the fair value was estimated, the level 1 input value could

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not be obtained for the value, the Company would refer to the analysis of the financial status and operating results of the investee, the latest transaction price, the quote of the same equity instrument in the non-active market, the quote of similar instruments in the active market, and the comparable company evaluation multiplier to determine the input value. If the actual changes in future input values and expectations would differ, fair value changes might occur. The Company regularly updated each input value according to market conditions to monitor whether fair value measurement was appropriate. For more details regarding the fair value evaluation techniques and input value, please refer to the descriptions of Note 12(4). As of December 31, 2019 and 2018, the Company's holdings of unlisted (OTC) company stocks and limited partnership investments showed the carrying amounts of NT$87,541 thousand and NT$88,522, thousand, respectively.

4) Evaluation on impairment of investment accounted for using the equity method

Whenever there was an indication of impairment that an investment accounted for using the equity method might have been impaired while the carrying amount could not be recovered, the Company immediately assessed the impairment of the investment. The Company assessed the impairment based on the discounted value of the expected future cash flow of the investee or cash dividends receivable to be expected and disposal of the discounted value of future cash flows from the investment to assess the recoverable amount and analyze the reasonableness of its related assumptions. As of December 31, 2019 and 2018 after the Company’s prudent assessment of the results, there showed no significant impairment loss.

5) Assessment onto the impairment of tangible assets

In the process of asset impairment assessment, the Company was required to rely on subjective judgment and asset usage patterns and industry characteristics to determine the independent cash flow of a particular asset Company, years of useful life, the future revenue and expenses that might be cause significant impairment in the future due to economic condition changes or estimated changes caused by strategies. As of December 31, 2019 and 2018, the accumulated impairment of tangible assets recognized by the Company was NT$40,700 thousand and NT$36,927 thousand, respectively.

6) Realizability of deferred income tax assets

Deferred income tax assets were recognized when there is a possibility in the future that there would be sufficient taxable income for the purpose of deducting temporary differences. Upon assessment of the realizability of deferred income tax assets, significant accounting judgments and estimations of the management must be involved including expected future sales revenue growth and profit margins, usable income tax credits, tax planning and other assumptions. Any changes in the global economic environment, industrial environment and changes in laws and regulations might cause significant adjustment of deferred income tax assets. As of December 31, 2019 and 2018, the deferred income tax assets recognized by the Company were NT$35,210 thousand and NT$28,659 thousand, respectively. The deferred income tax assets not recognized by the Company due to non-probable taxable income were NT$686 thousand for both.

7) Calculation of long-term employee benefits liabilities

Upon calculation of the present value of the benefit obligations, the Company must use judgments and estimates to determine the relevant actuarial hypotheses

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on the balance sheet date, including the discount rate and future salary growth rate. Any changes in actuarial assumptions should significantly affect the Company’s amount of defined benefit obligations. As of December 31, 2019 and 2018, the carrying amounts of the Company’s long-term employee benefits liabilities (including net defined benefit liabilities and provisions - noncurrent) were NT$56,285 thousand and NT$38,025 thousand, respectively.

8) Lessee's incremental loan interest rate (Applicable to Year 2019)

When determining the interest rate of the lessees' incremental loan used for discounting lease payments, the Company used the risk-free interest rate of the equivalent duration and currency as the reference interest rate, and discounted the estimated lessee's credit risk allowance and lease specific adjustments (e.g., asset characteristics and factors such as guarantees) to be taken into account.

Summary of Important Accounting Items
(1) Cash & cash equivalents

Items Cash and petty cash Checking deposits Demand deposits Deposit in foreign currency Time deposits with original maturity within three months Bills & bonds under Repurchase Agreements Total	December 31,2019 $ 276 78 17,479 28,011 322,264 1,255,532 $ 1,623,640	December 31,2018
		$ 244 170 10,464 14,255 650,000 892,542
		$ 1,567,675

1) The Company’s cash & cash equivalents have not been used for collateral or pledge.
2) As of December 31, 2019 and 2018, the interest rate range in the market for the Company’s time deposit with original maturity within three months was 2.00% to 2.05% and 0.60% to 0.63% per annum, respectively, either floating or on a fixed rate basis.
3) As of December 31, 2019 and 2018, the interest rate range in the market for the bills & bonds under Repurchase Agreements within three undertaken by the Company was 0.53% to 2.25% and 0.51% to 3.10%, respectively.

(2) Financial assets at fair value through profit or loss - current

Items Mandatorily measured at fair value through profit or loss Mutual fund beneficiary certificates Plus: Evaluation adjustment Total	December 31,2019 $ 23,167 80 $ 23,247	December 31,2018
		$ - -
		$ -

1) For more details regarding financial assets at fair value through profit or loss - current, please see Notes 13(1) (2)-3).
2) As of December 31, 2019 and 2018, the net gains recognized in the current profit or loss by the Company were NT$1,421 thousand and NT$0, respectively.

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3) The financial assets at fair value through profit or loss - current held by the Company have not been used for collateral or pledge.

(3) Notes receivable

Items Total notes receivable Less: Allowance loss Net	December 31,2019 $ 1,201 - $ 1,201	December 31,2018
		$ 14,419 -
		$ 14,419

1) The Company's notes receivable have not been overdue and the expected credit loss rate was 0%.
2) The Company’s notes receivable have not been used for collateral or pledge.

(4) Accounts receivable (including related parties)

Items Total accounts of receivable Less: Allowance loss Subtotal Total accounts receivable - related parties Less: Allowance loss Subtotal Net	December 31,2019 $ 1,362,287 - 1,362,287 13,882 - 13,882 $ 1,376,169	December 31,2018
		$ 1,918,484 -
		1,918,484
		735 -
		735
		$ 1,919,219

1) The age analysis of accounts receivable (including related parties) and the allowance loss measured by the preparation matrix are as follows:

Account aging interval	December31,2019	December31,2019	December31,2019	December31,2018	December31,2018	December31,2018
	Total amount	Allowance loss	Net	Total amount $ 1,862,491 56,728 - - - - $1,919,219	Allowance loss	Net
Not overdue 1 - 30 days overdue 31 - 90 days overdue 91 - 180 days overdue 181 - 365 days overdue More than 365 days overdue Total	$ 1,372,432 3,731 6 - - -	$ - - - - - -	$ 1,372,432 3,731 6 - - -		$ - - - - - -	$ 1,862,491 56,728 - - - -
	$1,376,169	$ -	$1,376,169		$ -	$1,919,219

The above analysis is based on the number of days past due.

The expected credit loss rate of the Company's aforementioned account aging intervals (excluding abnormal amounts which should be recorded at 100%): Not overdue and overdue within 30 days 0%, 31 to 90 days overdue 5%, 91 to 180 days overdue 30%, 181 days to 365 days overdue 50%, more than 365 days overdue 100%.

The Company's accounts receivable not overdue were expected to have a very low risk of credit loss; For other accounts receivable which had been overdue as of the balance sheet date, the Company has taken into account other credit enhancement protection, post-period collection, and deductions and the like. After reasonable and corroborable information, it is assessed that there was no significant change in its credit quality, and the credit risk has not increased

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significantly since the initial recognition. Therefore, the management of the Company expects that no credit loss of accounts receivable will be caused by default of transaction counterparties. As the amount of impairment loss according to the expected credit loss ration is not significant, the allowance for loss is not adjusted.

2) The Company adopted the simplified method of IFRS 9, and recognized the expected credit loss during the existence in the accounts receivable allowance loss. The expected credit loss during the existence was calculated using the reserve matrix, with consideration of the customers’ past default record and historical experience of collection, increase in delayed payments beyond the average credit period, and at the same time with consideration of the current financial status of customers, and observable national or regional industrial economic situation changes related to the arrears of receivables and future prospects such as outlook considerations. As the Company’s historical experience of credit losses indicates that there would be no significant differences in the loss patterns of different customer bases, the preparation matrix did not further distinguish the customer bases, only the accounts receivable days past due and actual conditions would determine the expected credit loss rate. The Company did not hold any collateral for these accounts receivable.
If there was evidence indicating that the counterparty was facing serious financial difficulties and the Company could not reasonably anticipate the recoverable amount, the Company would recognize 100% allowance loss or directly write off the related accounts receivable, but would, meanwhile, continue to recourse the activities due to the amount recovered and recognized in profit or loss.
3) Analysis of changes in allowance loss for accounts receivable (including related parties): Nil
4) The Company’s accounts receivable (including related parties) have not been used for collateral, pledge.

(5) Other receivables

Items Interest receivable Tax refund receivable Others Total	December 31,2019 $ 3,825 20,299 597 $ 24,721	December 31,2018
		$ 1,135 40,904 142
		$ 42,181

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(6) Inventories

Items December 31,2019 Raw materials $ 175,631 Supplies 151,720 Work in process 71,339 Partly-finished goods 462,322 Finished goods 116,491 By-products 1,688 Raw materials in transit 374,716 Subtotal 1,353,907 Less: Allowance for loss of market diminution in value of inventories ( 11,775) Net $ 1,342,132 1) The amounts of sales costs linked up with inventory are Items Year Ended December 31,2019 Inventory sales transferred to cost of sales $ 14,730,971 Plus: Unamortized labor and manufacturing overhead 54,528 Plus: Loss on net realizable value of inventory - Plus: Loss on obsolescence of Inventories 90 Less: Inventory adjustment credit (net) ( 234) Less: Rally in net inventory realizable value ( 1,788) Less: income of off-grades & scrap material sold ( 4,338) Account recorded in operating costs $ 14,779,229	December 31,2018
	$ 381,674 154,865 39,739 561,865 226,716 3,475 249,695
	1,618,029 ( 13,563)
	$ 1,604,466
	as follows: Year Ended December 31,2018
	$ 17,433,362 84,772 13,563 - ( 121) - ( 6,552)
	$ 17,525,024

2) The Company’s operating costs, including the loss of net realizable value of inventories (gain on rebound) between January 1 and December 31, 2019 and 2018 were (NT$1,788) thousand and NT$13,563 thousand, respectively, due primarily to the stability of raw material prices and product quotations/due to decline.

3) The Company’s inventory has not been used for collateral or pledge.

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(7) Prepayments

Items Prepayment of short-term lease agreement fees/rent Prepayment on sales Prepayment of insurance premium Input tax Others Total Other financial assets - current Items Time deposits with original maturity more than three months	December 31,2019 $ 512 9,196 15,088 33,537 1,887 $ 60,220 December 31,2019 $ 1,700,000	December 31,2018 $ 752 26,083 17,051 31,055 4,345 $ 79,286 December 31,2018 $ -

(8) Other financial assets - current

1) The time deposits with original maturity more than three months in bank held by the Company did not meet the definition of cash equivalents. They are, therefore, classified under other financial assets - current, as the effect of discounts during the short holding period was insignificant, which was measured by the amount of investment. As of December 31, 2019 and 2018, the interest rate range in the market for the time deposits with original maturity more than three months in bank were 0.65% - 0.77% and the interest was calculated with annual rate.
2) The Company assessed that the expected credit risk of the above financial assets was not high, and the credit risk has not increased after the initial recognition.

(9) Financial assets at fair value through other comprehensive income - noncurrent

Items Listed (OTC) company stocks in Taiwan China Development Financial Holding Corporation Unlisted (OTC) company stocks in Taiwan and abroad He Xin Venture Investment Enterprise Co., Ltd. TECO Nanotech Co., Ltd. YODN Lighting Corp. Bridgestone Taiwan Co., Ltd. Subtotal Plus: Evaluation adjustment Net	December 31, 2019 $ 239,363 18,412 219 2,478 42,561 303,033 ( 8,268) $ 294,765	December 31, 2018
		$ 239,363 18,412 219 2,478 42,561
		303,033 ( 7,500)
		$ 295,533

1) The aforementioned investments held by the Company were not in a short-term profitable operating mode. The management believes that if the short-term fair value fluctuations of these investments were included in the profit or loss, and the aforementioned investment plans were inconsistent, they chose to designate these investments at fair value through other comprehensive income.
2) The Company's net losses recognized in other comprehensive income between January 1 and December 31, 2019 and 2018 due to changes in fair value were NT$768 thousand and NT$72,367 thousand, respectively and accumulated in

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other equity; in addition, the amount of accumulated gain (loss) due to disposal of investment transferred directly to the retained earnings was NT$0 for both.

3) The financial assets at fair values through other comprehensive income - noncurrent held by the Company have not been used for collateral or pledge.
(10) Investments accounted for using the equity method
1) Investments in subsidiaries

Name of subsidiary	December 31,2019	December 31,2019	December 31,2018	December 31,2018
	Carryingamount	Shareholding %	Carryingamount	Shareholding %
GPPC Chemical Corporation GPPC Investment Corp. GPPC Development Co., Ltd. Videoland Inc. KK Enterprise Co., Ltd. Goldenpacific Equities Ltd. Land & Sea Capital Corp. Total	$ 675,530 270,250 49,531 4,419,707 138,760 665,141 8,375,683	100.00% 81.60% 38.46% 62.29% 15.73% 100.00% 100.00%	$ 667,979 286,809 - 4,402,183 162,049 680,316 7,545,825	100.00% 81.60% - 62.29% 15.73% 100.00% 100.00%
	$ 14,594,602		$ 13,745,161

2) The total number of stock options in GPPC Development Co., Ltd. and KK Enterprise Co., Ltd. held by the Company and its subsidiary Videoland Inc. has reached the control level and hence valuation is done using the equity method.
3) KK Enterprise Co., Ltd. conducted capital decrease in cash on August 27, 2019 as the basis date to eliminate 12,611 thousand common shares, amounting to $126,106 thousand, with ratio of capital decrease in cash of 20%. The shares of such company held by the Company eliminated due to capital decrease was 1,984 thousand shares, and the refund of the eliminated shares was $19,836 thousand.
4) The Company increased investment in 5,000 thousand shares of GPPC Development Co., Ltd. in October, 2019. The investment cost was $50,000 thousand, with shareholding ratio of 38.46%, the valuation accounted for using the equity method.
5) The shares of profits and losses and other comprehensive income of subsidiaries accounted for using the equity method between January 1 and December 31, 2019 and 2018 were recognized based on the financial statements audited by CPAs during the same period of respective subsidiaries
6) The financial statements of the reinvestment company under the company used the equity method through KK Enterprise Co., Ltd. - K.K. Chemical Company Limited and KK Enterprise (Malaysia) Sdn. Bhd. and the reinvestment company Zhenjiang Chimei Chemical Co., Ltd. and Zhangzhou Chimei Chemical Co., Ltd. using the equity method through Land & Sea Capital Corp. were audited by other CPAs. Therefore, the amounts listed in the financial statements of and related information about the companies mentioned above as disclosed in Note 13 are completely based on audit reports from other CPAs.

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7) Shares of profits or losses of subsidiaries accounted for using the equity method and other comprehensive income are as follows:

Name of subsidiary	Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2018	Year Ended December 31,2018
	Recognized in current profit/loss	Recognized in other comprehensive income	Recognized in current profit/loss	Recognized in other comprehensive income
GPPC Chemical Corporation GPPC Investment Corp. GPPC Development Co., Ltd. Videoland Inc. KK Enterprise Co., Ltd. Goldenpacific Equities Ltd. Land & Sea Capital Corp. Total	$ 69,317 ( 8,618) ( 469) 133,080 5,264 10,687 1,124,585	($ 2,221) ( 7,941) - ( 80,109) ( 1,774) ( 25,862) ( 294,727)	$ 41,408 ( 5,488) - 250,259 8,608 10,806 905,766	($ 58,578) ( 13,086) - ( 59,964) ( 951) ( 22,508) ( 107,004)
	$ 1,333,846	($ 412,634)	$ 1,211,359	($ 262,091)

Note: Share of other comprehensive income of subsidiary accounted for the using equity method and individual statements of comprehensive income are reconciled as follows:

reconciled as follows:
Items Share of other comprehensive income of subsidiary accounted for using the equity method - Items that will not be reclassified subsequently to profit or loss - Items that may be reclassified to profit or loss - Income tax related to items that may be reclassified to profit/loss Total	Year Ended December 31,2019 ($ 96,732) ($ 323,743) 7,841 ($ 412,634)	Year Ended December 31,2018
		($ 175,549) ($ 121,532) 34,990
		($ 262,091)

8) The Company wired out the capital worth USD25,421 thousand (equivalent to NTD785,515 thousand) in August 2018 to invest in Land & Sea Capital Corp. and the capital was reinvested in Zhangzhou Chimei Chemical Co., Ltd. The said investment has been submitted to and approved by the Investment Commission of Ministry of Economic Affairs with Letter Jing-Sheng-II-Zi 10700087220 dated June 4, 2018.
9) The value of investments accounted for using the equity method was adjusted down due to unrealized sales income between January 1 and December 31, 2019 and 2018 to NT$315 thousand and NT$4,744 thousand, respectively. The value of investments accounted for using the equity method adjusted up for realized sales income, on the other hand, was NT$4,744 thousand, and NT$13,318 thousand, respectively.
10) The value of investments accounted for using the equity method adjusted down because of the receipt of cash dividends from investees by the Company accounted for using the equity method between January 1 and December 31, 2019 and 2018 was NT$107,529 thousand and NT$47,605 thousand, respectively
11) The value of investments accounted for using the equity method adjusted up

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because of the variation in ownership equities held by the Company in its subsidiaries between January 1 and December 31, 2019 and 2018 was NT$99 thousand and NT$7 thousand, respectively.

12) The value of investments using the equity method adjusted up because of the release of dividends by the Company to its subsidiaries and the disposal of parent company shares by subsidiaries that is considered a treasury stock transaction between January 1 and December 31, 2019 and 2018 was NT$1,066 thousand and NT$97,948 thousand, respectively. Please refer to Note 6 (26) for details
13) None of the Company’s Investments accounted for using the equity method is provided as collateral or pledged.
14) With regards to the information on subsidiaries of the Company, please refer to Note 4 (3) of the Company’s 2019 consolidated financial statement.
15) For the information on companies re-invested in through Land & Sea Capital Corp. and KK Enterprise Co., Ltd. in Mainland China by the Company, please refer to the Mainland China investment information disclosed in Note 13 (3).

(11) Property, plant and equipment

Items Land Buildings & constructions Machinery & equipment Transportation facilities Other equipment Construction in progress and Equipment to be inspected Total costs Less: Accumulated depreciation Less: Accumulated impairment Net	December 31,2019 $ 3,185,217 1,249,825 11,470,739 34,891 1,190,929 22,069 17,153,670 ( 11,066,672) ( 40,700) $ 6,046,298	December 31,2018
		$ 3,185,217 1,238,472 11,428,955 35,462 1,112,491 47,259
		17,047,856 ( 10,410,102) ( 36,927)
		$ 6,600,827

Items	Land	Buildings & constructions	Machinery & equipment	Transportation facilities	Other equipment	Construction in progress and equipment to be inspected	Total
Cost: Balance at January 1, 2019 Addition Disposal Reclassification (Note) Balance at December 31, 2019 Accumulated depreciation and impairment loss: Balance at January 1, 2019 Depreciation expenses Disposal Impairment loss Balance at December 31, 2019	$ 3,185,217 - - -	$ 1,238,472 7,130 - 4,223	$ 11,428,955 25,518 ( 14,404) 30,670	$ 35,462 2,541 ( 3,112) -	$ 1,112,491 137,868 ( 51,305) ( 8,125)	$ 47,259 19,029 - ( 44,219)	$ 17,047,856 192,086 ( 68,821) ( 17,451)
	$ 3,185,217	$ 1,249,825	$ 11,470,739	$ 34,891	$ 1,190,929	$ 22,069	$ 17,153,670
	$ - - - -	$ 679,997 41,974 - -	$ 9,088,450 549,183 ( 14,284) -	$ 26,685 2,120 ( 3,112) -	$ 651,897 131,994 ( 51,305) 3,773	$ - - - -	$ 10,447,029 725,271 ( 68,701) 3,773
	$ -	$ 721,971	$ 9,623,349	$ 25,693	$ 736,359	$ -	$ 11,107,372

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Items	Land	Buildings & constructions	Machinery & equipment	Transportation facilities	Other equipment	Construction in progress and equipment to be inspected	Total
Cost: Balance at January 1, 2018 Addition Disposal Reclassification (Note) Balance at December 31, 2018 Accumulated depreciation and impairment loss: Balance at January 1, 2018 Depreciation expenses Disposal Impairment loss Balance at December 31, 2018	$ 3,185,217 - - -	$ 1,226,526 10,447 - 1,499	$ 11,288,043 136,508 ( 56,973) 61,377	$ 34,431 1,309 ( 278) -	$ 1,056,317 244,070 ( 155,213) ( 32,683)	$ 76,740 46,743 - ( 76,224)	$ 16,867,274 439,077 ( 212,464) ( 46,031)
	$ 3,185,217	$ 1,238,472	$ 11,428,955	$ 35,462	$ 1,112,491	$ 47,259	$ 17,047,856
	$ - - - -	$ 645,266 34,731 - -	$ 8,599,888 545,355 ( 56,793) -	$ 24,870 2,093 ( 278) -	$ 688,134 118,976 ( 155,213) -	$ - - - -	$ 9,958,158 701,155 ( 212,284) -
	$ -	$ 679,997	$ 9,088,450	$ 26,685	$ 651,897	$ -	$ 10,447,029

Note: Net decrease in reclassification was the expenses carried from property, plant and equipment.
1) The Company’s property, plant and equipment were primarily provided for own use. Part of the usable spaces of the property was leased to others as operating lease.
2) The addition and the acquisition of the property, plant and equipment in the statements of in the current year are reconciled as follows:

Items Increase in property, plant and equipment Plus: Decrease in the payables for equipment Amounts paid in cash	Year Ended December 31,2019 $ 192,086 1,652 $ 193,738	Year Ended December 31,2018
		$ 439,077 1,492
		$ 440,569

3) Cost capitalized amount and interest rate range of the property, plant and equipment based loans: Nil
4) The major composition items of the Company’s property, plant and equipment were depreciated in the straight-line method based on the useful life as follows:
A. Buildings & constructions

Buildings, plants	26 - 56 years	Building affiliated	11 - 21 years
and main		equipment
constructions
Air conditioning	5 - 8 years	Fire protection	4 - 6 years
equipment		equipment
Road greening	4 - 11 years

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B.	Machinery equipment
	Chemical	8 - 25 years	Steam and	16 years
	equipment		electricity
			equipment
	Gas supply	10 years	Others	7 years
	equipment
C.	Transportation facilities	2-6 years
D.	Other equipment
	Furniture & office	4 - 7 years	Others	3 - 8 years
	equipment

5) From January 1 to December 31, 2019 while some equipment capacity was not fully utilized, the Company expected that the future cash inflow of such equipment would decrease, and, in turn, estimated that recoverable amount was 0 less than the carrying amount so that it would recognize the impairment loss of other equipment amounting to NT$3,773 thousand. Such impairment loss was already included in the individual statements of comprehensive income under other gains and losses. The Company used the value in use to determine the recoverable amount of such equipment. The discount rate adopted from January 1 to December 31, 2019 was 6.21%. As of December 31, 2019 and 2018, the Company recognized that the accumulated impairment amounts for property, plant and equipment were NT$40,700 thousand and NT$36,927 thousand, respectively.
6) For information regarding the collateral provided with property, plant and equipment, please see Note 8 for more details.
(12) Lease agreement

Year 2019

1) Right-of-use assets

Year 2019 1) Right-of-use assets
Items Buildings & constructions Machinery & equipment Total costs Less: Accumulated depreciation Less: Accumulated impairment Net	December 31,2019 $ 21,343 35,377 56,720 ( 13,740) - $ 42,980	December 31,2018
		(Note)

Note: Starting from January 1, 2019, the Company adopted IFRS 16 pursuant to the transitional provisions under IFRS 16, the Company chose not to reclassify the period for comparison.

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Items Buildings & constructions Machinery & equipment Total Cost: Balance at January 1, 2019 $ - $ - $ - IFRS 16 retrospective application transfer-in 21,343 35,377 56,720 Addition/Reclassification - - - Derecognition - - - Balance at December 31, 2019 $ 21,343 $ 35,377 $ 56,720 Accumulated depreciation: Balance at January 1, 2019 $ - $ - $ - Depreciation expenses 5,416 8,324 13,740 Derecognition - - - Balance at December 31, 2019 $ 5,416 $ 8,324 $ 13,740 2) Lease liabilities December 31,2019 December 31,2018 Items Current Noncurrent Current Noncurrent Buildings & constructions $ 4,294 $ 12,073 (Note) (Note) Machinery & equipment 8,990 18,869 Total $ 13,284 $ 30,942	Items Buildings & constructions Machinery & equipment Total Cost: Balance at January 1, 2019 $ - $ - $ - IFRS 16 retrospective application transfer-in 21,343 35,377 56,720 Addition/Reclassification - - - Derecognition - - - Balance at December 31, 2019 $ 21,343 $ 35,377 $ 56,720 Accumulated depreciation: Balance at January 1, 2019 $ - $ - $ - Depreciation expenses 5,416 8,324 13,740 Derecognition - - - Balance at December 31, 2019 $ 5,416 $ 8,324 $ 13,740 2) Lease liabilities December 31,2019 December 31,2018 Items Current Noncurrent Current Noncurrent Buildings & constructions $ 4,294 $ 12,073 (Note) (Note) Machinery & equipment 8,990 18,869 Total $ 13,284 $ 30,942	Items Buildings & constructions Machinery & equipment Total Cost: Balance at January 1, 2019 $ - $ - $ - IFRS 16 retrospective application transfer-in 21,343 35,377 56,720 Addition/Reclassification - - - Derecognition - - - Balance at December 31, 2019 $ 21,343 $ 35,377 $ 56,720 Accumulated depreciation: Balance at January 1, 2019 $ - $ - $ - Depreciation expenses 5,416 8,324 13,740 Derecognition - - - Balance at December 31, 2019 $ 5,416 $ 8,324 $ 13,740 2) Lease liabilities December 31,2019 December 31,2018 Items Current Noncurrent Current Noncurrent Buildings & constructions $ 4,294 $ 12,073 (Note) (Note) Machinery & equipment 8,990 18,869 Total $ 13,284 $ 30,942	Total	Total
			$ - 56,720 - -
			$ 56,720
			$ - 13,740 -
			$ 13,740
Current	Noncurrent	Current		Noncurrent
$ 4,294 8,990	$ 12,073 18,869	(Note)		(Note)
$ 13,284	$ 30,942

Note: Starting from January 1, 2019, the Company adopted IFRS 16 pursuant to the transitional provisions under IFRS 16, the Company chose not to reclassify the period for comparison.

Items Lease liabilities: Balance at January 1, 2019 IFRS 16 retrospective application transfer-in Addition/Reclassification Derecognition Repayment of principal of lease liabilities Balance at December 31, 2019	Buildings & constructions $ - 21,343 - ( 4,976) $ 16,367	Machinery & equipment $ - 35,377 - ( 7,518) $ 27,859	Total
			$ - 56,720 - ( 12,494)
			$ 44,226

A. The lease term of lease liabilities and the range of discount rate are as follows:

follows:
Items Buildings & constructions Machinery & equipment	Estimated lease term (including lease renewal rights) 2 - 13 years 4 years	December 31,2019
		0.63% - 1.10% 0.75%

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B. The maturity of the Company's lease liabilities are analyzed below:

Items Below 1 year Over 1 year but below 5 years Over 5 years but below 10 years Over 10 years but below15 years Over 15 years but below 20 years Over 20 years Total undiscounted lease payments	December 31,2019
	$ 13,605 23,835 6,000 2,000 - -
	$ 45,440

3) Major lease events and clauses
A. The subject assets leased by the Company include buildings & constructions and machinery equipment, and the like. At the end of the lease term, the Company held no preferential acquisition rights for the leased target assets, and some leases were attached to lease term renewal right after expiration. The lease agreement was negotiated individually and contained various terms and conditions. Assets other than leases should not be used as loan collateral, and it was agreed that unless with the consent of the lessor, the Company should not sublet or transfer the Subject Premises either in whole or in part. Except these facts, the lease agreement was free of any other restrictions.
B. Option to prolong the lease

The part of the Subject Premises covered within the Company's lease agreement includes the extension option entitled to the Company. Under the general practice for the lease agreement, the Company was bestowed with the maximum possible operating flexibility and effective use of assets. While the Company resolved to enter into the lease term, the Company already took into account all the facts and circumstances that will result in the economic incentives generated from the exercise of extension option. Therefore, upon the estimation for the exercise of extension option, as of December 31, 2019, the right-of-use assets and the lease liabilities increased by NT$22,181 thousand and NT$22,290 thousand, respectively.

C. Impact of variable lease payments on lease liabilities
In the Company's lease agreement, the variable lease payment terms are subject to storage/usage link. The variable payment depends on the actual use of the underlying assets. The variable payment terms are used for many reasons, mainly for profit control and operating flexibility to minimize fixed costs. The changes in storage/usage of lease payments are recognized as expenses during the period that triggers these payment terms.

4) Sublet: Nil

5) Other lease information
A. The profit or loss details related to the lease agreement are as follows:

Items Expenses attributable to short-term lease agreement Expenses attributable to low-value assets lease Expenses paid under variable lease	Year Ended December 31,2019
	$ 2,123 10 4,007

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Total Interest expense for lease liabilities Gain from sublet in right-of-use assets Profit (loss) generated from back-lease transaction after sales Profit (loss) generated from amendment to lease transaction	$ 6,140
	$ 421
	$ -
	$ -
	$ -

The Company chose to apply recognition exemptions for short-term leases and low-value asset leases, and did not recognize related right-of-use assets and lease liabilities for these leases. As of December 31, 2019, the short-term lease commitment amount with recognition exemptions was NT$661 thousand.

B. The total lease cash outflow of the Company as of December 31, 2019 totaled at NT$19,055 thousand.
C. The right-of-use assets prove no impairment as indicated by the result of the Company’s prudential evaluation.

Year 2018

Commitment to operating lease - The Company was as the lessee

The Company leased dormitories, warehouses and storage tanks in line with its business needs. The lease agreements signed by the Company were non-cancellable operating lease agreements. Most of the lease agreements could be renewed at the market price at the end of the lease term. Due to the non-cancellable lease agreements of the Company, the estimated total amount of minimum lease payments for each year is as follows:

for each year is as follows:
Items Below 1 year Over 1 year but below 5 years Over 5 years Total	December 31,2018
	$ 13,561 21,035 -
	$ 34,596

(13) Refundable deposits

Items Performance bond- bid bond Lease security deposit - as a lessee Others Total	December 31,2019 $ 360 494 171 $ 1,025	December 31,2018
		$ 360 494 35
		$ 889

(14) Other payables

Items Salaries and bonuses payable Compensation to employee payable Remuneration to directors and supervisors payable Freight payable Taxes payable	December 31,2019 $ 175,340 24,862 49,724 13,721 2,040	December 31,2018
		$ 287,459 37,478 74,956 15,425 1,779

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Insurance premium payable Utilities payable Repair & maintenance expenses payable Service charge payable Labor service cost payable Equipment payable Others Total	4,638 2,879 14,388 10,610 1,810 2,891 13,969 $ 316,872	3,529 2,940 20,744 18,433 1,810 4,543 13,412
		$ 482,508

(15) Provisions - current

Items Employee benefits - payment on leave	December 31,2019 $ 12,403	December 31,2018
		$ 12,004

1) The provisions of employee benefits - current refer to an estimate of the employee’s vested right for service leave. In most cases, sick leave and maternity leave or paternity leave are contingent in attribute, depending on future events and instead of being accumulated so such costs would be recognized only when the fact of leave takes place.
2) Information of variation in the provisions of employee benefits – current is as follows:

follows:
Items Beginning balance Additional amount for the year Utilized amount for the year Reversal of unutilized amount for the year Ending balance	Year Ended December 31,2019 $ 12,004 19,457 ( 17,863) ( 1,195) $ 12,403	Year Ended December 31,2018
		$ 12,071 18,812 ( 17,864) ( 1,015)
		$ 12,004

(16) Advance receipts

(17) (18)	Items Rents collected in advance Other current liabilities - other Items All collections Provisions - noncurrent Items Other long-term employee benefits plans	December 31,2019 $ 128 December 31,2019 $ 2,901 December 31,2019 $ 9,610	December 31,2018
			$ 128
			December 31,2018
			$ 2,751
			December 31,2018
			$ 8,153

1) The other long-term employee benefits plans of the Company are the seniority service bonuses and consolation money for employees. The payment criteria for long-term bonuses and consolation money were calculated based on the basis of the service seniority acquired and accumulated.
2) The Company has recognized other long-term employee benefits obligations.

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The composition of obligatory liabilities is as follows:

3)	Items Present value of other long-term employee benefits obligations Fair value of plan assets Other long-term employee benefits liabilities, net Change in other long-term employee Items Beginning balance Other long-term employee benefits costs: Current and past service cost Interest expenses Remeasurements: Actuarial losses (gains) - change in demographic assumptions Actuarial losses (gains) - change in financial assumptions Actuarial losses (gains) - experience adjustment Recognized in profit or loss Payments of benefit Ending balance	December 31,2019 $ 9,610 - $ 9,610 benefits liabilities, net Year Ended December 31,2019 $ 8,153 1,005 78 89 169 724 2,065 ( 608) $ 9,610	December 31,2018
			$ 8,153 -
			$ 8,153
			is as follows: Year Ended December 31,2018
			$ 6,755
			735 74 77 69 786
			1,741
			( 343)
			$ 8,153

4) The amount of the benefit costs in aforementioned other long-term employee benefits plans were recognized in profit or loss under the administrative expenses based on the single-line items by functional category.
5) Composition of the plan assets

The Company did not allocate related assets, the effected payment based on actual occurrence.

6) The present value of other long-term employee benefits obligations of the Company was actuarially counted by a qualified actuary. The main assumptions of the actuarial evaluation on the measurement date are as follows:

follows:
Items Discount rate Future salary growth rate	2019 0.625% - 0.750% 1.75% - 2.00%	2018
		0.875% - 1.000% 1.75% - 2.00%

The assumption of future mortality rate is estimated based on the fifth life experience table of life insurance industry in Taiwan.

7) Because changes in the main actuarial assumption used, the present value of other long-term employee benefits obligations is affected. The analysis was as follows:
A. Interest rate risks

The decline in the interest rate of government bonds would increase the present value of other long-term employee benefits obligations, but the

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returns on debt investment of the plan assets would also increase accordingly. The both two would have a partial offset effect on other long-term employee benefits liabilities.

B. Salary related risks

8) In the event that the significant actuarial assumptions were subject to a combination of possible changes, and if other assumptions remained unchanged, the amount of increase (decrease) in present value of other long-term employee benefits obligations would be as follows:

Items	Discount rate	Discount rate	Future salary growth rate	Future salary growth rate
	Increase 0.25%	Decrease 0.25%	Increase 0.25%	Decrease 0.25%
December 31, 2019: Effect on present value of other long-term employee benefits obligations December 31, 2018`：` Effect on present value of other long-term employee benefits obligations	($ 170)	$ 176	$ 90	($ 88)
	($ 140)	$ 143	$ 63	($ 61)

9) The Company expected to pay to other long-term employee benefit plans in Year 2020 in the amount of attribution and the amount of payment at NT$0 and NT$508 thousand, respectively.

(19) Post-employment benefit plans

Items Defined benefit plans Defined contribution plans Total	December 31,2019 $ 45,267 1,408 $ 46,675	December 31,2018
		$ 28,465 1,407
		$ 29,872

1) Defined benefit plans

A. In accordance with the “Labor Standards Act”, the Company has established retirement methods to define benefits. Under the “Labor Pension Act” applicable on July 1, 2005, the service seniority accumulated by employees prior to enforcement of the “Labor Pension Act” and subsequently accumulated by employees who chose subject to “Labor Standards Act” after enforcement of the “Labor Pension Act” as

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entitled to retirement would be taken to count pension which would be calculated number of years in the service seniority accumulated and the salary amounts averaged in the six (6) months prior to retirement. Each year of service seniority accumulated in full within fifteen (15) years (inclusive) would be entitled to two base units and each year the period of service seniority accumulated beyond fifteen years would be entitled to one base unit. The cumulative base units shall not exceed the maximum limit of 45 base units. The Company attributed retirement funds on a monthly basis to the specified ratio (currently 30%) of total salary, and deposited the funds in the bank account designated for pension fund opened with the Bank of Taiwan under the name of the Labor Retirement Reserve Supervision Committee. Besides, in response to the retirement needs of senior managers, the Company set up the “Manager’s Retirement Fund Management Committee” in September 2004 and attributed on a monthly basis for a certain ratio (currently 30%) of the total salary of managers into the management of the Manager’s Retirement Fund Management Committee and deposited in a special account of a financial institution opened in the name of the Manager’s Retirement Reserve Fund. The Company estimates the balance of the retirement fund mentioned in the preceding item before the end of each year. In the event that the balance is found not enough to pay off the pension amount calculated according to the foregoing for the employees who meet the retirement requirements in the next year, the Company would make up the difference in a lump-sum before the end of March of the following year.

B. The amounts of the defined benefit plans were recognized in the balance sheet as follows:

sheet as follows:
Items	December 31,2019		December 31,2018
Present value of defined benefit
obligations	$	682,365	$	650,725
Fair value of plan assets	(	637,098)	(	622,260)
Net defined benefit liabilities	$	45,267	$	28,465
C. Change in present value of defined		benefit obligations is		as follows:
Items	Year Ended December 31,2019		Year Ended December 31,2018
Present value of defined benefit
obligation, beginning of year	$	650,725	$	651,641
Service cost of the current year		8,339		10,277
Interest expenses		6,370		7,125
Remeasurements:
Actuarial losses (gains) - change
in demographic assumptions		-		-
Actuarial losses (gains) - change
in financial assumptions		13,758		6,666
Actuarial losses (gains) -
experience adjustment		28,034		3,484
Payments of benefit (Note)	(	24,861)	(	28,468)
Present value of defined benefit
obligation, end of year	$	682,365	$	650,725

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D. Change in fair value of plan assets is as follows:

Items Fair value of plan assets, beginning of year Interest income Remeasurements: Return on plan assets other than net interest Fund attributed by employer Payments of benefit on plan assets Fair value of plan assets, end of year	Year Ended December 31,2019 $ 622,260 6,174 21,529 11,996 ( 24,861) $ 637,098	Year Ended December 31,2018
		$ 607,786 6,823 17,314 18,805 ( 28,468)
		$ 622,260

E. Relevant defined benefit plans recognized in the statement of comprehensive income, the amount of the defined benefit costs are as follows:

follows:
Items Current service cost Interest expense of defined benefit obligations interest income of plan assets Recognized in profit loss Remeasurements : Actuarial losses (gains) - change in demographic assumptions Actuarial losses (gains) - change in financial assumptions Actuarial losses (gains) - experience adjustment Return on plan assets other than net interest Recognized in other comprehensive income	Year Ended December 31,2019 $ 8,339 6,370 ( 6,174) $ 8,535 $ - 13,758 28,034 ( 21,529) $ 20,263	Year Ended December 31,2018
		$ 10,277 7,125 ( 6,823)
		$ 10,579
		$ - 6,666 3,484 ( 17,314)
		( $7,164)

F. The aforementioned defined benefit plans recognized in the net defined benefit costs of profit or loss. The single-line items by functional category are as follows:

category are as follows:
Items Operating costs Operating expenses Selling expenses Administrative expenses Research and development expenses Subtotal Total	Year Ended December 31,2019 $ 4,467 283 3,603 182 4,068 $ 8,535	Year Ended December 31,2018
		$ 6,254
		385 3,641 299
		4,325
		$ 10,579

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G. The defined benefit retirement plan assets of the Company was commissioned into business management through Bank of Taiwan according to the proportion of the items of commissioned management as specified under the annual investment utilization plans of the funds and within the specified amounts within the items as per Article 6 of Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund (i.e., to be deposited into financial institutions in Taiwan and abroad, to be invested in the Exchange-listed and OTC-listed companies or private placement equity securities and to be invested into securitized commodities of real property in Taiwan and abroad). The relevant utilization was under supervision by the Labor Pension Fund Supervisory Committee. In the utilization of the Fund, the minimum gain allocated amidst final account settlement in every fiscal year should not be lower than the income calculated by the local banks’ two-year fixed term deposit interest rate. The shortfall, if any, should be supplemented by the national treasury after approval by the competent authority. Where the Company was not entitled to participate in the operation and management of the fund, the Company could not classify the plan assets at the fair value disclosed under IAS 19 Paragraph 142. For more details of the fair value of the total assets of the Fund as of December 31, 2019 and 2018, please refer to reports of the Labor Pension Fund Utilization promulgated by the government in the respective years.
H. The present value of defined benefit obligations of the Company was counted actuarially by a qualified actuary. The main assumptions of the actuarial evaluation on the measurement date are listed below:

Items Discount rate Future salary growth rate Average period of existence of defined benefit obligations	2019 0.625% - 0.750% 1.75% - 2.00% 5.4 years – 8.6 years	2018
		0.875% - 1.000% 1.75% - 2.00% 5.7 years – 9.1 years

The assumption of future mortality rate is estimated based on the fifth life experience table of life insurance industry in Taiwan.

I. The Company has been exposed to the following risks due to the Labor Standards Act:
Interest rate risks

Salary related risks

J. In the event that the significant actuarial assumptions were subject to a combination of possible changes, and if other assumptions remained unchanged, the amount of increase (decrease) in present value of the

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defined benefit obligations would be as follows:

Items	Discount rate	Discount rate	Future salary growth rate	Future salary growth rate
	Increase of 0.25%	Decrease of 0.25%	Increase of 0.25%	Decrease of 0.25%
December 31, 2019: Effect to present value of defined benefit obligations December 31, 2018`：` Effect to present value of defined benefit obligations	($13,758)	$14,193	$13,774	($13,422)
	($13,829)	$14,283	$13,893	($13,521)

Practically, since actuarial assumptions might relate to each other, it would be unlikely to have a single assumption in change. The aforementioned sensitivity analysis, therefore, might not reflect the actual change in the present value of defined benefit obligations. In addition, in the aforementioned sensitivity analysis, the present value of defined benefit obligations at the end date of the reporting period would be based on the actuarial calculation of the projected unit credit method and the defined benefit liabilities included in the balance sheet would be measured on the same basis. The method assumptions used in preparing the sensitivity analysis in the current year was exactly same as that used in the prior one.

K. The Company expected to pay to defined benefit plans in Year 2020 in the amount of contribution and the amount of payment NT$ 13,894 thousand and NT$29,108 thousand, respectively.
2) A. The Company has established the regulations on defined contribution retirement in accordance with the "Labor Pension Act", which are applicable to employees of ROC (Taiwan) nationality. The Company withheld 6% of the salary as labor pension into the employees’ personal pension accounts of Bureau of Labor Insurance for the employee who chose to apply the labor pension system specified under the "Labor Pension Act" and the payment of pension was granted based on the employees’ personal pension accounts and the amount of accumulated income either on a monthly basis or in one-time pension payment. Under such plan, after the Company contributed a fixed amount to the Bureau of Labor Insurance, the Company would no longer be subject to statutory or presumed obligations extra.
B. The Company recognized the pension costs in accordance with the aforementioned defined contribution plans between January 1 and December 31, 2019 and 2018 amounted to NT$8,298 thousand and NT$8,118 thousand, respectively. As of December 31, 2019 and 2018, the net defined benefit liabilities recognized by the Company in accordance with the aforementioned defined contribution plans amounted to NT$1,408 thousand and NT$1,407 thousand, respectively.
C. The amounts of pension costs recognized in profit or loss in accordance with the aforementioned defined contribution plans are as follows based on the single-line items of functional category:

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(20) (21) (22)	Items Year Ended December 31,2019 Operating costs $ 6,574 Operating expenses Selling expenses 374 Administrative expenses 1,114 Research and development expenses 236 Subtotal 1,724 Total $ 8,298 Guarantee deposits received Items December 31,2019 Lease security deposit – lease $ 50 Pickup guarantee bond 2,441 Others 443 Total $ 2,934 Other noncurrent liabilities - other Items December 31,2019 Unrealized deferment revenues with disposal of investment $ 22,192 Share capital 1) Common shares and preferred shares	Year Ended December 31,2018 $ 6,513 364 965 276 1,605 $ 8,118 December 31,2018 $ 50 3,582 443 $ 4,075 December 31,2018 $ 22,192

Items Authorized number of shares (in thousand shares) Authorized share capital Number of issued shares and received the shares payment in full (in thousand shares) `－`Common shares `－`Preferred shares Total number of issued shares (in thousand shares) Issued share capital - common shares Issued share capital issued - preferred shares Total Issued share capital	December 31,2019 1,000,000 $ 10,000,000 906,620 20,000 926,620 $ 9,066,203 200,000 $ 9,266,203	December 31,2018 1,000,000 $ 10,000,000 906,620 20,000 926,620 $ 9,066,203 200,000 $ 9,266,203

The issued common shares and preferred shares have been in a denomination NT$10 per share, and each share was entitled to one voting right and the right to receive dividends.

2) Upon capital increase in cash launched by the Company in August 1984, the Company issued 20,000 thousand preferred shares with rights & obligations as enumerated below:

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A. The earnings, if any, upon annual account settlement, the dividend of 6% for preferred shares should be allocated first. The balance shall be the allocable earnings which will be allocated at the shareholding ratio for common shares and preferred shares as proposed by the board of directors and finally resolved in the shareholders’ meeting.
B. Preferential allocation of the Company's remaining properties.
C. Other entitlement would be same as the common shares.

(23) Capital reserve

Items Treasury stocks transaction premium Dividend unclaimed within the term by shareholders Recognized changes in the ownership interests of subsidiaries Total	December 31,2019 $ 178,800 2,786 112 $ 181,698	December 31,2018
		$ 177,734 2,786 13
		$ 180,533

According to the Company Act, the proceeds from the issuance of shares in excess of the par value, and the capital reserve received as gifts and income, in addition to being used to make up for the loss, when the Company is not in an accumulated losses, such excess may be issued to new shares in proportion to the shareholders' original shares or cash. In addition, according to the relevant provisions of the Securities and Exchange Act, when the aforementioned capital reserve is used for capital replenishment, the total amount of the capital reserve shall not exceed 10% of the paid-in capital in a year. The Company has still been insufficient to fill the capital loss from the surplus reserve. The capital reserve could not be used for supplement. In addition, regarding recognized changes in the ownership of subsidiaries and dividend unclaimed within the term by shareholders and the like, where the connotation of such capital reserve differ from the capital reserve set forth under Article 239 of the Company Act to be used to make up for the loss, it should not be used for any purpose at all.

(24) Retained earnings

1) Pursuant to the requirements set forth under the Articles of Incorporation, the earnings after settlement of annual accounts, if any, shall be pay tax, make up previous loss, if any, and amortize 10% for legal reserve and after provision or reversal of special reserve based on the reduction of shareholders’ equity incurred in the current year, the balance would be the allocable earnings for the current year. Such allocable earnings in combination with the unappropriated earnings of the preceding year would be the accumulated allocable earnings. With such accumulated unappropriated earnings, the sum to allocate preferred share dividend of the Company for 1984 at 6% should be allocated first. The shortfall, if any, should be preferentially made up with the allocable earnings of the ensuing year. The balance of the unappropriated earnings should be allocated at the ratios proposed by the board of directors according to law, dividend policy and status of working capital. Where the balance of such unappropriated earnings is used to issue new shares, approval from the shareholders’ meeting should be obtained beforehand. Where the balance of such unappropriated earnings is allocated in cash, the decision should be resolved in the board of directors beforehand.

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For more details regarding allocation of compensation to employees, remuneration to directors and supervisors, grounds of estimation and actual allocation, please see Note 6(31).

2) The Company's dividend policies are as follows:

3) The legal reserve should not be put into any use except a use to make good previous loss of the Company, if any, and allocation through issuance of new shares or in cash to shareholders pro rata to original shareholding ratios. The total amount used to issue new shares or to allocate in cash, nevertheless, shall not exceed the maximum limit of 25% of the paid-in capital.
4) Upon allocating earnings, the Company should amortize and reverse special reserve in accordance with Letter Jing-Guan-Zheng-Fa-Zi 1010012865 dated April 6, 2012 and Letter Jing-Guan-Zheng-Fa-Zi 1010047490 dated November 21, 2012 of FSC and after adoption under IFRSs in the Q&A of Provision of Special Reserve. Where the net deduction of other equity is reversed subsequently, the part so reversal could be taken to appropriate the earnings.
5) In the shareholders' regular meeting convened by the Company on June 14, 2019 and June 15, 2018 respectively, the earnings of Year 2018 and Year 2017 would be allocated in the following manners:

Items of allocation	Allocations of earnings	Allocations of earnings	Dividendper share(NT$)	Dividendper share(NT$)
	2018	2017	2018	2017
Provision of legal reserve Provision (reversal) of special reserve Dividends on preferred shares - cash Bonuses to shareholders on preferred shares - cash Bonuses to shareholders on common shares -cash Bonuses to shareholders on common shares - stock	$ 296,011 - 12,000 - - -	$ 328,864 ( 17,380) 12,000 20,000 906,620 -	- - $ 0.60 - - -	- - $ 0.60 1.00 1.00 -

For details regarding decisions resolved in the board of directors and the shareholders’ meeting on allocations of earnings, please inquire into Market Observation Post System (MOPS).

6) The allocation of the Company's earnings in Year 2019 is still pending for decisions to be proposed in the board of directors and resolved in the shareholders’ meeting. After the relevant meetings are convened, please inquire into Market Observation Post System (MOPS).

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(25) Items of other equity

Items	Exchange differences on translating financial statements of foreign operations	Unrealized valuation gain/loss of financial assets at fair value through other comprehensive income	Total
Balance at January 1, 2019 Items directly recognized as other equity adjustment Transferred to item of profit and loss Transferred to retained earnings Share accounted for using the equity method Income tax related to items of other equity. Balance at December 31, 2019 Items	($ 206,080) - - - ( 323,743) 7,841	$ 945,719 ( 768) - ( 45,344) ( 97,159) -	$ 739,639 ( 768) - ( 45,344) ( 420,902) 7,841
	($ 521,982)	$ 802,448	$ 280,466
	Exchange differences on translating financial statements of foreign operations	Unrealized valuation gain/loss of financial assets at fair value through other comprehensive income	Total
Balance at January 1, 2018 Effects of retrospective application and retrospective reclassification Items directly recognized as other equity adjustment Transferred to item of profit and loss Transferred to retained earnings Portions recognized in equity method Income tax related to items of other equity Balance at December 31, 2018	($ 119,538) - - - - ( 121,532) 34,990	$ - 1,191,225 ( 72,367) - - ( 173,139) -	$ 887,872 183,815 ( 72,367) - - ( 294,671) 34,990
	($ 206,080)	$ 945,719	$ 739,639

(26) Treasury stocks
1) As of December 31, 2019 and 2018, the amount of treasury stocks repurchased by the Company were NT$0 for both.
2) The changes in the current year of the Company's stocks held by subsidiaries deemed as treasury stocks are as follows:

Name of subsidiary	Kind			Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2019
		Beginningbalance		Current Increase		Current Decrease		Endingbalance
		Shares	Amount	Shares	Amount		Amount	Shares	Amount
GPPC Chemical Corporation Total Name of subsidiary	Common Shares Preferred shares Kind	247 1,776	$ 5,719 49,858	- -	$ - -		$ - -	247 1,776	$ 5,719 49,858
		2,023	$ 55,577	-	$ -		$ -	2,023	$ 55,577

		Beginningbalance		Current Increase		Current Decrease		Endingbalance
		Shares	Amount	Shares	Amount	Shares 2,881 - 2,881	Amount	Shares	Amount
GPPC Chemical Corporation Total	Common Shares Preferred shares	3,128 1,776	$ 72,312 49,858	- -	$ - -		$ 66,593 -	247 1,776	$ 5,719 49,858
		4,904	$122,170	-	$ -		$ 66,593	2,023	$ 55,577

A. The transaction amounts as the gains obtained by subsidiaries through disposal of the Company's stocks converted into capital reserve - treasury stocks as of December 31, 2019 and 2018 were NT$ 0 and NT$28,266 thousand, respectively.

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B. The transaction amounts with cash dividends of the parent company received by the subsidiaries converted into capital reserve - treasury stocks between January 1 and December 31, 2019 and 2018 were NT$1,066 thousand and NT$3,089 thousand, respectively.
C. The fair values of the Company's stocks held by the subsidiaries as of December 31, 2019 and 2018 were NT$65,697 thousand and NT$66,946 thousand, respectively.
D. The Company's stocks held by the subsidiaries were disposed as the treasury stocks. Such stocks were not entitled to participate in the Company's capital increase in cash and voting power but were entitled to the rights exactly same as shareholders’ equity.

(27) Operating revenues

Items Revenues under customer contracts Sales revenues	Year Ended December 31,2019 $ 16,229,085	Year Ended December 31,2018
		$ 20,305,094

1) Detailed classification of revenues under customer contracts

The Company's revenues were from the goods and labor services of the transfer of a certain point in time. The revenues could be broken down into the following main product types:

following main product types:
Main product types Sales revenues Petrochemical products Plastic products Hydrogen products Steam and electricity products Nylon products Material resale Total	Year Ended December 31,2019 $ 9,767,995 4,309,646 146,711 465,479 1,539,118 136 $ 16,229,085	Year Ended December 31,2018
		$ 11,726,280 5,320,817 131,383 427,396 2,682,897 16,321
		$ 20,305,094

2) Balances of contracts

The Company recognized contract assets and contract liabilities related to revenues under customer contracts as follows:

Items December 31, 2019 December 31, 2018 Contract assets: Nil Contract liabilities – current Commodity sales $ 11,120 $ 20,881

A. Significant changes in contract assets and contract liabilities

As of December 31, 2019, the changes in the Company’s contract assets and contract liabilities as compared with the preceding year primarily originated in the difference between the timepoint to satisfy the contract obligations and the timepoint for customers to make payment.

B. The beginning contract liabilities recognized as revenues in the current

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year

Items Beginning balance of contract liabilities recognized as revenues in the current year Commodity sales	Year Ended December 31,2019 $ 20,881	Year Ended December 31,2018 $ 39,568

C. The performance of contract obligations of the prior period recognized as revenues in the current year

The Company did not have any obligations for contract performance (or partial performance) in the prior period, but due to changes in transaction prices, or changes in the recognition restrictions on the price between January 1 and December 31, 2019 and 2018, the recognition income was adjusted in the current year.

D. Unfulfilled customer contracts

For customer contracts of commodity sales unfulfilled by the Company as of December 31, 2019 and 2018, the contracts were expected to last for less than one year, were expected to be fulfilled and recognized as revenues within the ensuing year.

3) Contract cost related assets: Nil.
(28) Other revenues

Items Interest income Rent revenues Dividend income Scrap sales revenues Revenues of administrative expenses Subsidy revenues Revenues as refund of overpaid air pollution fee Revenues of remuneration to directors and supervisors Others Total	Year Ended December 31,2019 $ 32,526 302 24,230 1,098 8,400 53 - 487 210 $ 67,306	Year Ended December 31,2018
		$ 16,629 303 27,824 1,369 8,400 3,700 3,042 409 556
		$ 62,232

283

(29) Other gains and losses

Items Net gain on financial assets at fair value through profit or loss Net loss on disposal of property, plant and equipment Gain on disposal of investment Net gain (loss) on foreign currency exchange Loss on spare part inventory and obsolescence Impairment loss on non-financial assets Expenditures for insurance claim settlement in occupational accidents Others Total Finance costs Items Interest expense Loan interest for financial institutions Interest counted upon security deposit Lease liabilities interest Subtotal Less: Capitalized amount consistent with prerequisite constituents Total	Year Ended December 31,2019 $ 80 ( 120) 1,341 ( 24,262) - ( 3,773) ( 2,000) ( 43) ($ 28,777) Year Ended December 31,2019 $ 378 1 421 800 - $ 800	Year Ended December 31,2018
		$ - ( 180) - 65,052 ( 757) - - ( 970)
		$ 63,145
		Year Ended December 31,2018
		$ 418 1 -
		419 -
		$ 419

(30) Finance costs

(31) Employee benefits, depreciation, depletion and amortization expenses

Attribute	Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2019	Year Ended December 31,2018	Year Ended December 31,2018	Year Ended December 31,2018
	Operating Cost	Operating Expense	Total	Operating Cost	Operating Expense	Total
Employee benefits expenses Salaries Labor and health insurance Pension Remuneration to directors Other employee benefits Depreciation expenses Amortization expenses Total	$ 324,024 28,310 11,041 - 8,747 724,162 -	$ 113,132 8,686 5,792 70,758 26,958 14,849 -	$ 437,156 36,996 16,833 70,758 35,705 739,011 -	$ 408,102 27,652 12,767 - 8,791 687,612 -	$ 150,555 8,363 5,930 94,333 39,542 13,543 -	$ 558,657 36,015 18,697 94,333 48,333 701,155 -
	$1,096,284	$ 240,175	$1,336,459	$1,144,924	$ 312,266	$1,457,190

284

1) The average number of employees at the Company was 398 and 391, respectively between January 1 and December 31, 2019 and 2018. The average number of directors who are not also employees was 5. The calculation basis is the same as that for employee benefit and employee salary expense.
2) The average employee benefit expense was NT$1,340 thousand and NT$1,714 thousand, respectively between January 1 and December 31, 2019 and 2018; the average employee salary expense was NT$1,112 thousand and NT$1,447 thousand, respectively; and the average movement of adjustment to employee salary expense was (23.15%).
3) Pursuant to the requirements set forth under the Articles of Incorporation, with the profits earned by the Company in the current year, a sum 1% shall be allocated for compensation to employees and a sum within 2% maximum as remuneration to the directors. Where the Company remains in accumulated loss, nevertheless, such loss should be made up. The term “the profits earned by the Company in the current year” denotes the profits earned in the current year before tax after deducting compensation to employees and remuneration to directors.
4) The Company's management estimated compensation to employees and remuneration to directors based on the profitability of the current year, and taking account the amounts expected for the payment and factors of the minimum and maximum limits set forth under the Articles of Incorporation to estimate the amount of net profit before tax and before deduction of the compensation to employees and remuneration to directors. The amounts estimated for compensation to employees were NT$24,862 thousand and NT$37,478 thousand, respectively and the amounts estimated for remuneration to directors were NT$49,724 thousand and NT$74,956 thousand respectively between January 1 and December 31, 2019 and 2018. However, there is a significant change in the amount allocated by the resolution of the board of directors taking place before the date of authorization and issuance of the annual financial statements, such adjustment of change provided as annual expenses; if the amount still changes after the date of authorization and issuance of the annual financial statements, such change shall be handled as a change in accounting estimation and would be entered into account in the ensuing fiscal year.
5) As resolved by the Company's board of directors on March 19, 2020 and March 21, 2019, the compensation to employees for the years ended 2019 and 2018 amounted to NT$24,862 thousand and NT$37,478 thousand respectively, and the remuneration to directors and supervisors amounted to NT$49,724 thousand and NT$74,956 thousand, respectively. The aforementioned amounts resolved show no significant difference from the expenses entered into the financial statements of Year 2019 and Year 2018. The aforementioned compensation/remunerations were paid in cash.
6) For information relating to the compensation to employees and remuneration to directors and supervisors of the Company, please inquire through the “Market Observation Post System (MOPS)” of Taiwan Stock Exchange Corporation (TSEC).
(32) Income tax
1) Composition of income tax expense (gain):

285

A. Income tax recognized in profit or loss

		Year Ended	Year Ended		Year Ended	Year Ended
Items		December 31,			December 31,
			2019			2018
Current income tax expense payable		$	344,148		$	681,637
Deferred income tax expenses (gains)
Origination and reversal of temporary
differences		(	2,654)		(	1,373)
Effect of change in tax rate				-	(	2,048)
Net change in deferred income tax decrease
(increase)		(	2,654)		(	3,421)
Adjustment to income taxes in previous year				1	(	2,965)
Income tax expenses (gains) recognized in profit
or loss		$	341,495		$	675,251
B. Recognized in income tax related to other comprehensive					income
		Year Ended			Year Ended
Items		December 31,			December 31,
			2019			2018
Current income tax
Exchange difference resulting from
translating the financial statements of
foreign operations		($	7,841)		($	34,990)
Deferred income tax
Remeasurements of defined benefit plan		(	4,053)			1,433
Effect of change in tax rate				-	(	2,191)
Net change in deferred income tax decrease
(increase)		(	4,053)		(	758)
Income tax expenses (gains) recognized in other
comprehensive income		($	11,894)		($	35,748)
2) Reconciliation of income in the current fiscal year and the income						tax expense
recognized into profit or loss is as follows:
		Year Ended			Year Ended
Items		December 31,			December 31,
			2019			2018
Net profit (loss) before tax from continuing
operations unit		$	2,411,620		$	3,635,357
Income tax with profit (loss) loss before tax at
statutory tax rate			482,324			727,071
Effects of income tax upon adjustments
Effects not counted into the items upon
determination of the taxable income		(	269,799)		(	248,959)
Tax to be made up under the minimum
taxation system				-		-
Income tax levied additionally	on
unappropriated earnings			131,623			203,525
Loss carry-forward incurred in current year				-		-
Loss carry-forward for offset in current year				-		-
Investment credit for offset in current year				-		-
Current income tax expense payable			344,148			681,637
Net change in deferred income tax decrease
(increase)		(	2,654)		(	3,421)
Adjustment to income taxes in previous year				1	(	2,965)
Income tax expenses (gains) recognized in profit
or loss		$	341,495		$	675,251

286

The Company applied 20% statutory tax rate. In the wake of amendment to the Income Tax Act in February 2018, the income tax rate was adjusted from 17% to 20% which was put into enforcement in 2018. In addition, for the unappropriated earnings in 2018, the applicable tax rate was cut from 10% to 5%. The Company has estimated the impacts linked up with such changes in the taxation rates.

3) Balance of the income tax assets (liabilities) in the year

Items December 31,2019 Income tax assets for the year: Nil Income liabilities for the year Current income tax expense payable $ 344,148 Less: Credit for the income tax paid in advance in current year ( 173,989) Total $ 170,159 4) Balance of deferred income tax assets (liabilities)	December 31,2018 $ 681,637 ( 182,783) $ 498,854

Year Ended December 31, 2019

Items	Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Endingbalance
Deferred income tax assets Unrealized exchange loss Losses on obsolescence and market value decline in inventories Employee leave payment obligations Defined employee benefits plans Loss on impairment of tangible assets Total Deferred income tax liabilities Financial & taxation difference in depreciation expenses Reserve for land value increment tax Total Changes in net increase (decrease)	$ 1,360 2,713 2,401 14,800 7,385	$ 1,730 ( 358) 80 291 755	$ - - - 4,053 -	$ 3,090 2,355 2,481 19,144 8,140
	$ 28,659	2,498	4,053	$ 35,210
	456 979,556	( 156) -	- -	300 979,556
	$ 980,012	( 156)	-	$ 979,856
		$ 2,654	$ 4,053

287

Items		Year Ended December 31,2018	Year Ended December 31,2018
	Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Endingbalance
Deferred income tax assets Unrealized exchange loss Losses on obsolescence and market value decline in inventories Employee leave payment obligations Defined employee benefits plans Loss on impairment of tangible assets Total Deferred income tax liabilities Financial & taxation difference in depreciation expenses Reserve for land value increment tax Total Changes in net increase (decrease)	$ 2,664 - 2,052 13,561 6,277	($ 1,304) 2,713 349 481 1,108	$ - - - 758 -	$ 1,360 2,713 2,401 14,800 7,385
	$ 24,554	3,347	758	$ 28,659
	530 979,556	( 74) -	- -	456 979,556
	$ 980,086	( 74)	-	$ 980,012
		($ 3,421)	$ 758

The items of the deferred income tax assets not recognized by the Company because of being not very likely to be realized are as follows:

Items Deferred income tax assets Loss on impairment of financial assets	December 31,2019 $ 686	December 31,2018
		$ 686

6) The unrecognized deferred income tax liabilities related to investment

The temporary difference related to investment in subsidiaries, while the Company could control the very timepoint of reversal of that temporary difference and was very likely not to dispose and reverse within the foreseeable future, the Company did not recognize the deferred income tax liabilities. As of December 31, 2019 and 2018, the aggregate total amounts of the temporary differences of investment in subsidiaries which had not been recognized for the deferred income tax liabilities amounted to NT$1,242,618 thousand and NT$1,079,681 thousand, respectively.

7) The Company’s income tax returns through 2017 has been assessed and approved by the tax authority.
8) Where the allocation of earnings for Year 2020 to be resolved in the shareholders’ meeting remains uncertain, the unappropriated earnings added with the very outcome of the potential income tax in Year 2019 could not be determined in a reliable way.

288

(33) Changes in liabilities coming from financing activities

Items January 1, 2019 Effects of retrospective application to IFRS 16 Net change in financing cash flows December 31, 2019 Items January 1, 2018 Net change in financing cash flows December 31, 2018	Lease liabilities $ - 56, 720 ( 12,494) $ 44,226 Lease liabilities $ - - $ -	Guarantee deposits received
		$ 4,075 - ( 1,141)
		$ 2,934
		Guarantee deposits received
		$ 533 3,542
		$ 4,075

(34) Earnings per share (EPS)

If the Company was entitled to the option to distribute compensation to employee in stocks or cash, then upon calculating the diluted earnings per share (EPS), it was assumed that the compensation to employee would be distributed by stocks and would be included in the weighted average number of outstanding shares when the potential common stocks were entitled to dilution effect so as to calculate the diluted earnings per share (EPS). When calculating the diluted earnings per share (EPS) before the resolution of distributing compensation to employee in the following year, the Company also continues to take into account the dilution effect of these potential common shares.

common shares.
Basic earnings per share: Net profit for the year Less: Dividends on preferred shares Net profit attributable to shareholders of common shares for the year Effect of potential common shares having dilution function Compensation to employee Diluted earnings per share: Net profit attributable to shareholders of common shares for the year Effect added to potential common shares	Year Ended December 31,2019			Year Ended December 31,2018
	Amount after tax	Weighted average number of outstanding shares (in thousand shares)	Earnings per share (EPS) (NT$)	Amount after tax	Weighted average number of outstanding shares (in thousand shares)	Earnings per share (EPS) (NT$)
	$2,070,125 (12,000)	906,373 1,674	$2.27	$2,960,106 (12,000)	905,338 2,005	$3.26
			$2.27			$3.25
	2,058,125 -			2,948,106 -
	$2,058,125	908,047		$2,948,106	907,343

289

Related party transactions
(1) Parent company and ultimate controller

The Company does not have an ultimate parent company and hence the Company is the ultimate controller.

(2) Names/titles of the related parties and relationship thereof

Name of relatedparty GPPC Chemical Corporation GPPC Investment Corp. Videoland Inc. KK Enterprise Co., Ltd. GPPC Hospitality and Leisure Inc. GPPC Development Co., Ltd. Zhenjiang Chimei Chemical Co., Ltd. He Xin Venture Investment Enterprise Co., Ltd. All directors, general manager and deputy general managers	Relationshipwith the Company
	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Substantial related party Main management

(3) Significant transactions with related parties
1) Sales

Kind of the related party Subsidiary Associate Total	Year Ended December 31,2019 $ 1,286,974 8,150 $ 1,295,124	Year Ended December 31,2018 $ 1,103,107 3,382 $ 1,106,489

The Company sells SM to its subsidiaries at contract price. The purchase or selling price under the contract is based on the mean price in the three regions, that is, FOB Korea, CFR Taiwan, and CFR SE Asia, in the respective issues of Styrene intelligence reports for the month according to Platt’s Far East Petrochemical Scan. The quantity is 3,000 – 6,000 tons a month. The payment method is settlement at the end of each month and paid off 45 days following settlement. If the subsidiary fails to make payments as scheduled, the goods will be on hold and interest will be calculated at the one-year time deposit annual rate of the Bank of Taiwan as of January 1 of the specific year. Such holding period, however, is limited to 3 months at maximum.

Except for those mentioned above, there are no significant differences in the remaining selling price and sales trading conditions for related parties and those for ordinary customers of the Company.

2) Purchases

Purchases
Kind of related party Subsidiary	Year Ended December 31,2019 $ 2,273	Year Ended December 31,2018
		$ 2,739

There are no significant differences in the buying price and purchases trading conditions for related parties and those for ordinary customers of the Company.

290

3) The creditor’s rights and debts between the Company and related parties (all without including the interest) are as follows:

without including the interest) are as	follows:
A. Accounts receivable Kind of relatedparty Subsidiary Associate Total B. Accounts payable Kind of relatedparty Subsidiary C. Other payables Kind of relatedparty Subsidiary	December 31,2019 $ 12,611 1,271 $ 13,882 December31,2019 $ 348 December 31,2019 $ -	December 31,2018
		$ - 735
		$ 735
		December31,2018
		$ -
		December 31,2018
		$ 6,415

4) Property Leases

Lease agreement

Lessee – kind of relatedparty	Leased object	Year Ended December 31,	Year Ended December 31,	2019
		Rent income	Pre-collected rent	Deposit
Subsidiary Substantial related party	10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City	$ 183 114	$ 57 71	$ 50 -
		$ 297	$ 128	$50

Lessee – kind of relatedparty	Leased object	Year Ended December 31,	Year Ended December 31,	2018
		Rent income	Pre-collected rent	Deposit
Subsidiary Substantial related party	10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City	$ 183 119	$ 57 71	$ 50 -
		$ 302	$ 128	$50

Note:  The Company already signed business lease contracts for offices in coming years with its subsidiaries. As of December 31, 2019 and 2018, as agreed, the Company collected forward notes in advance in the worth of NT$144 thousand and NT$288 thousand, respectively, to facilitate cashing at time of actual transaction.

The above-mentioned properties for rent refer to part of offices of the Company put up for rent. The rent is negotiated between the parties reflective of market conditions and calculated and included in the lease contract. The rent is collected on a yearly basis or with the forward notes issued at once upon signing the contract.

291

5) Others

) Others
Items Revenue from administrative expenses (recorded as other revenues) (Note 1) Revenue from remuneration to directors/supervisors (recorded as other revenues) Expense for site usage (recorded as Manufacturing overhead) Expense for entertainment (recorded as administrative expenses) (exclusive of tax) Disbursement of technical service fee (Note 2)	Kind of related party/Name GPPC Chemical Corporation Subsidiary Subsidiary Subsidiary Subsidiary	Year Ended December 31, ,2019 $ 8,400 487 72 281 5,292	Year Ended December 31, 2018
			$ 8,400 409 72 - 3,965

Note: (1) GPPC Chemical Co., Ltd. relies on the experiences and talents of the Company and entrusts the Company in the business activities management and sales etc. The parties have reached an agreement and signed a contract.

(2) The subsidiaries entrust the Company to dispatch personnel for technical support at factory zones. Various expenses for technical support are reimbursed as actually paid. The technical service fee collected by the Company is recorded as the deduction of various reimbursement expenses.

(4) Information of compensation for main management

Items Salaries and other short-term employee benefits Termination benefits Post-employment benefits Other long-term benefits Shares-based payment Total	Year Ended December 31,2019 $ 91,289 - 3,956 - - $ 95,245	Year Ended December 31,2018
		$ 119,186 - 3,923 - -
		$ 123,109

Pledged assets

(1) Facts of pledge in property, plant and equipment

Items Land Buildings & constructions Machinery & equipment Total	Purposes of pledge (mortgage) Comprehensive facility of credit extension, security for purchase Comprehensive facility of credit extension,, security for purchase Guarantee for comprehensive facility of credit extension	December 31, 2019 $ 3,185,217 341,376 885,732 $ 4,412,325	December 31, 2018
			$ 3,185,217 361,517 1,025,622
			$ 4,572,356

292

Significant contingent liabilities and unrecognized contract commitments
1) Endorsements/guarantees: Nil
2) Refundable deposit guarantee notes and debit notes

The Company issued guaranteed promissory notes with facility and debit notes lent them to financial institutions as a commitment to repay the loan. As of December 31, 2019 and 2018, the guaranteed promissory notes were US$26,000 thousand, NT$6,150,000 thousand and US$6,000 thousand, NT$5,050,000 thousand, respectively.

3) Deposited guarantee notes and collateral

The Company collected deposited guarantee notes and collateral as its performance guarantee. As of December 31, 2019 and 2018, the deposited guarantee notes were NT$132,061 thousand, SGD208 thousand, EUR730 thousand, US$2,823 thousand, JPY1,850 thousand and NT$129,879 thousand, SGD208 thousand, EUR730 thousand, US$2,710 thousand and JPY1,850 thousand, respectively.

4) The balance of L/C opened but not used by the Company as of December 31, 2019 and 2018 was US$11,694 thousand, NT$662,800 thousand and US$7,700 thousand, NT$669,446 thousand and EUR59 thousand, respectively.
5) The property, plant and equipment and other major capital expenditures for which the Company had executed contracts but had not paid off as of December 31, 2019 and 2018 were NT$20,409 thousand and NT$26,487 thousand, respectively.
6) Under the agreement duly executed by and between the Company and CPC Corporation, Taiwan (CPC), the Company has been required to procure from CPC specified volumes of ethylene, benzene and butadiene from every year. If the annual purchase volume of the Company did not reach the minimum contract amount, CPC may reduce the supply in the following year as appropriate. In addition, the Company committed to purchase CPC’s ethylene, benzene and butadiene as raw materials for factory-made styrene and acrylonitrile-butadiene-styrene copolymer resin (ABS), unless approved by government authorities, or in case of the internal dispatch for petrochemical feedstock, the Company should not transfer into other uses or resell the quotas (Where required for petrochemical scheduling, and with the prior written consent of CPC, the Company was allowed to transfer the ethylene, benzene and butadiene to petrochemical users of CPC as petrochemical feedstock either in whole or in part), otherwise CPC may would stop supplying ethylene, benzene and butadiene at any time and terminate the agreement.
7) In order to manufacture ABS and other products, the Company purchased butadiene from Formosa Petrochemical Corporation as a raw material for which the Company signed a transaction agreement. Under the agreement, the Company committed itself to purchase at least 100 metric tons of butadiene from Formosa Petrochemical Corporation every month as the raw material for the production of ABS and other products.
8) In order to manufacture ABS and other products, the Company purchased acrylonitrile from China Petrochemical Development Corporation as a raw material for which the Company signed a transaction agreement. Under the agreement, the Company committed itself to purchase 3,600 metric tons to 7,200 metric tons of acrylonitrile every quarter as a raw material for the production of ABS and other products.
Significant Disaster Loss: Nil
Significant Events after the Balance Sheet Date: Nil
Other events

293

(1) Seasonal or cyclical interpretation of interim operations

All sorts of business operations inside the Company have been free of any potential impact in reasonable or cyclical factors.

(2) Capital risk management

The Company carries out capital management to assure a sound capital base, and maximizes shareholder compensation by means of optimizing debt and equity balances. After regularly reviewing and measuring related costs, risks and returns, the Company ensures a good profitability level and financial ratio. Where necessary, the Company would balance its overall capital structure through various financing methods to live up to the needs of various capital expenditures, working capital, debt repayment, and dividend expenditures in the future period.

(3) Financial instruments

1) Kind of financial instruments

1) Kind of financial instruments
Financial assets Financial assets at fair value through profit or loss Mandatorily measured at fair value through profit or loss Investment in equity instrument of financial assets at fair value through other comprehensive income Financial assets carried at amortized cost Cash & cash equivalents Notes and accounts receivable (including related parties) Other receivables Other financial assets - current Refundable deposits Financial liabilities Financial liabilities carried at amortized cost Accounts payable (including related parties) Other payables (including related parties) Lease liabilities (Current and Noncurrent) Guarantee deposits received	December 31, 2019 $ 23,247 294,765 1,623,640 1,377,370 24,721 1,700,000 1,025 $ 1,178,577 316,872 44,226 2,934	December 31, 2018
		$ - 295,533 1,567,675 1,933,638 42,181 - 889 $ 1,091,667 488,923 - 4,075

2) Financial risk management policies

In terms of routine business operation, the Company has been subject to impact from a variety of financial risks, including market risks (including exchange rate risks, interest rate risks and price risks), credit risks and liquidity risks. In an attempt to minimize relevant financial risks, the Company has put forth maximum possible efforts to identify, evaluate and evade the uncertainty in the markets to minimize the negative impact of market variation upon the Company's financial performance.

The Company has set up appropriate policies, procedures and internal controls in response to the aforementioned financial risk management in accordance with relevant regulations, and all important financial activities must be reviewed by the Board of Directors in accordance with relevant regulations and internal control systems. During the implementation of the financial plan, the

294

Company must comply with the relevant financial operation procedures for overall financial risk management and division of powers and responsibilities.

3) The attribute and level of significant financial risks
A. Market risks

Here at the Company, the market risk has notably been the risk in financial instruments' fair value or cash flow fluctuations due to changes in market prices. Such market risks mainly include exchange rate risks, interest rate risks and price risks.

Exchange rate risks

The Company's business involves certain non-functional currencies (the functional currency of the Company has been the New Taiwan Dollars so it is subject to exchange rate fluctuations impact. Information on foreign currency assets and liabilities with significant exchange rate fluctuations is as follows:

Items (Foreign currencies: Functional currency)	December 31,2019	December 31,2019	December 31,2019	December 31,2018	December 31,2018	December 31,2018
	Foreign currencies	Exchange rate foreign currencies vs. functional currency	New Taiwan Dollars	Foreign currencies	Exchange rate foreign currencies vs. functional currency	New Taiwan Dollars
Financial assets Monetary items USD:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD	$ 49,298 307,295 17,123	29.98 29.98 29.98	$ 1,477,954 9,212,704 513,348	$ 52,430 273,179 11,159	30,715 30,715 30.715	$ 1,610,387 8,390,693 342,749

Here at the Company, the sensitivity analysis on the exchange rate risks mainly focuses on the major foreign currency monetary items and non-monetary items at the end of the financial statement period, and the related foreign currency appreciation/depreciation impact on the Company's profit and loss as well as equity. Where the exchange rates for foreign currencies was appreciated/depreciated by 1%, the net profit after tax for the Company between January 1 and December 31, 2019 and 2018 would increase/decrease at NT$7,717 thousand and NT$10,141 thousand respectively while the equity would increase/decrease by NT$92,127 thousand and NT$83,907 thousand, respectively.

The unrealized exchange loss of monetary items in foreign currency of the Company between January 1 and December 31, 2019 and 2018 was NT$15,450 thousand and NT$6,802 thousand, respectively, as affected by the fluctuation of USD exchange rate.

 Interest rate risks

The interest rate related risks refers to the risks of financial

295

 Price risks

instruments' fair value or future cash flow fluctuations due to changes in market interest rates. The Company's interest rate risks mainly come from floating rate in loans where some of the risks would be held with floating rates through cash & cash equivalents offset. Where the Company regularly assesses the trend of interest rate changes and responds to it, it is not expected that there would be a significant risk of market interest rate changes. If the loan interest rate increases or decreases by 10 basis points, with all the other factors remaining unchanged, the after-tax net profits of the Company between January 1 and December 31, 2019 and 2018 will not be impacted significantly.

The investment held by the Company as shown through the balance sheet has been primarily classified as financial assets at fair value through profit and loss and financial assets at fair values through other comprehensive income. The Company has been, therefore, exposed to pricing risks of equity instruments. In an effort to manage the pricing risks of equity instruments, the Company virtually diversifies its investment portfolio in a manner that was based on the limits set by the Company. The Company has invested in financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income with the price of financial instruments such as profit or loss affected by the uncertainty of the future value of the investment target. If the price of such financial instruments rises/falls by 1% where all other factors remain unchanged, the net profit after tax of the Company between January 1 and December 31, 2019 and 2018 would increase/decrease by NT$232 thousand and NT$0, respectively and the equity would increase/decrease by NT$2,948 thousand and NT$2,955 thousand, respectively.

B. Credit risks

Credit risks refer to such risks in financial losses incurred in an event where a customer of the Company or financial instrument transaction counterparty fails to perform the contract. The credit risks of the Company primarily resulted from operating activities (primarily as accounts & notes receivable) and financial activities (primarily as bank deposits and a variety of financial instruments). The credit risks related to business operation and financial credit risks have been managed respectively.

Credit risks related to business operation

The business department faithfully complies with the Company's customer credit risk policies, procedures and controls to manage customer credit risk. The credit risks assessment of all customers is a comprehensive consideration such as the financial status of the customers, the rating of the credit rating agency, past historical transaction experience, the current economic environment and the internal rating criteria of the Company. In addition, the Company also uses certain credit enhancement instruments (such as payments collected in advance, etc.) at appropriate times to minimize the credit risk of specific customers.

296

 Financial credit risks

Here at the Company, the Finance Department manages credit risks of bank deposits and other financial instruments in accordance with company policies. Since the Company’s transaction objects have been determined by internal control procedures as banks with good credit and an investment grade and above in the forms of institutions, company organizations. Where all such entities prove free of major performance doubts, there have been no major credit risks upon the Company.

 Information of credit-related risks in accounts receivable

The Company adopted the assumption provided under IFRS 9. As the payment was more than 30 days overdue from schedule in the provision of contracts, the financial asset was deemed to have significantly increased in credit risks from the initial recognition. In an event where a contract payment was more than 365 days overdue or where the loanee would be highly unlikely to fulfill the credit obligations to pay amount in full to the Company, the Company deemed that financial asset in default.

In an effort to minimize credit risks, the management of the Company would assign the special team to assume the responsibility to determine the facility of credit extension, approve of credit extension or other supervisory procedures with actions to be taken as appropriate to assure successful retrieval of receivables. Besides, on the balance sheet date, the Company would, on one-by-one basis, recheck the reclaimable amounts of receivables to assure that appropriate allowance would have been provided against the potential loss. For facts of changes regarding aging analysis of accounts receivables and allowance loss, please see Note 6(3) & (4).

The credit risk of the Company focuses on the Top 10 sales customers of the Company. As of December 31, 2019 and 2018, the ratios of the above-mentioned customers in the total amount of accounts receivable (including related parties) were 47.08% and 33.97%, respectively.

 Exposure to credit risks

The Company has been well known for the sound quality of credit standing with financial institutions and has tried to profoundly diversify potential credit risks with multiple financial institutions. As natural result, the Company has seen very low potential default. Besides, the Company has been in transactions with only third parties of very fine credit standing and would grant credit lines toward customers exactly based on the credit facility procedures. Meanwhile, with continued efforts to look into customers’ credit standing and with evaluation of the possibility to retrieve accounts receivable on a regular basis, the Company has amortized adequate allowance against loss. The management has, therefore, firmly believed that the Company’s receivables would not have been significantly concentrated in the credit risks. As of the balance sheet date in terms of cash & cash equivalents, receivables and

297

other financial assets, the maximum possible exposure to credit risks would be exactly the carrying amounts of such financial assets.

	assets.
Financial instruments	December 31,2019 Carrying amount Maximum credit exposure to risks $ 1,623,640 $ 1,623,640 1,201 1,201 1,376,169 1,376,169 24,721 24,721 1,700,000 1,700,000	December 31,2018
	Carrying amount	Carrying amount	Maximum credit exposure to risks
Cash & cash equivalents Notes receivable Accounts receivable (including related parties) Other receivables Other financial assets - current	$ 1,623,640 1,201 1,376,169 24,721 1,700,000	$ 1,567,675 14,419 1,919,219 42,181 -	$ 1,567,675 14,419 1,919,219 42,181 -

C. Liquidity risk

The liquidity risk refers to the risk that the position could not be settled as expected. The Company mainly used financial institutions to use loans, and cash & cash equivalents and other instruments to adjust funds, and achieve the goal of flexible use of funds and stable funds. The share capital and working capital of the Company were sufficient to meet all contract obligations, so there would be no liquidity risk due to the inability to raise funds to fulfill contract obligations.

The table below summarizes the Company's non-derivative financial liabilities, grouped by the relevant maturity date based on the earliest possible date of repayment and compiled with its undiscounted cash flow. The Company did not expect that the time when the cash flow of the analysis of the due date occurred would be significantly earlier or the actual amount would be significantly different. The interest cash flow paid at floating interest rates, the undiscounted interest amount derived based on the yield curve on the balance sheet date which was the amount of floating interest rate instrument of a non-derivative financial liability. The amount of the floating interest rate instrument would change according to the different interest rate and the estimated interest rate on the balance sheet date. For more details regarding the analysis of the due date of lease liabilities, please see Note 6 (12)-2) to B.

Items			December 31, 2019	December 31, 2019	December 31, 2019
	Within 6 months	6-12 months	1-2 years	2-5 years	Over 5 years	Contract cash flow	Carrying amount
Non-derivative financial liabilities Accounts payable (including related parties) Other payables (including related parties)	$1,178,577 316,872	$ - -	$ - -	$ - -	$ - -	$1,178,577 316,872	$1,178,577 316,872

298

Items			December 31, 2018	December 31, 2018	December 31, 2018
	Within 6 months	6-12 months	1-2 years	2-5 years	Over 5 years	Contract cash flow	Carrying amount
Non-derivative financial liabilities Accounts payable Other payables (including related parties)	$1,091,667 488,923	$ - -	$ - -	$ - -	$ - -	$1,091,667 488,923	$1,091,667 488,923

(4) Information of fair value

1) Fair value hierarchy

The evaluation technique used to measure the fair value of financial and non-financial instruments divided the fair value into Level 1 to Level 3 based on the observable degrees. Each fair value hierarchy was defined as follows:

Level 1: Referring to the public quotation (unadjusted) from the same asset or liability in the active market.
Level 2: In addition to the public quotation of the Level 1, the fair value is derived using observable input parameters that belong to the asset or liability directly (i.e., the price) or indirectly (i.e., derived from price).
Level 3: Referring to the input parameters (non-observable parameters) of the valuation techniques for assets or liabilities that are not based on observable market data to derive fair value.
2) Financial instruments not measured at fair values

The Company's financial instruments not measured at fair values (including cash & cash equivalents, notes receivable and accounts receivable (including related parties), other receivables, other financial assets - current, accounts payable (including related parties), other payables (including related parties) and the like) refer to rational approximate values in the carrying amounts at fair values. Where refundable deposits and guarantee deposits received would not be subject to significant impact in the cash flow discounting, their carrying amounts should be the very rational grounds to estimate the fair values.

3) As of December 31, 2019 and 2018 for financial and non-financial instruments at fair values were classified by the Company based on the attributes, characteristics, risks and fair value hierarchy, with the relevant information as follows:

follows:
Financial and non-financial instruments		December 31, 2019
	Level 1	Level 2	Level 3	Total
Assets Recurring fair value Financial assets at fair value through profit or loss - noncurrent Domestic mutual fund beneficiary certificates Financial assets at fair values through other comprehensive income - noncurrent Listed stocks in Taiwan Unlisted stocks (OTC) in Taiwan Total	$ 23,247	$ -	$ -	$ 23,247
	$ 207,224 876	$ - -	$ - 86,665	$ 207,224 87,541
	$ 208,100	$ -	$ 86,665	$ 294,765

299

Financial and non-financial instruments		December 31, 2018	December 31, 2018
	Level 1	Level 2	Level 3	Total
Assets Recurring fair value Financial assets at fair values through other comprehensive income - noncurrent Listed stocks in Taiwan Unlisted stocks (OTC) in Taiwan Total	$ 207,011 1,061	$ - -	$ - 87,461	$ 207,011 88,522
	$ 208,072	$ -	$ 87,461	$ 295,533

4) Evaluation technology and assumptions adopted to measure fair values:

The fair values of the financial and non-financial instruments refer to the amounts of current transaction of the said instruments with the interested counterparties (instead of mandatory means or liquidation). Here at the Company, the methods and assumptions used for the financial and non-financial instruments to measure the fair values are as follows:

A. In case of financial instruments with standard terms and conditions and traded in the active market, the fair value was determined by referring to the market quotation. The listed stocks were counted based on the closing price as fair values, the unlisted (OTC) emerging stocks were counted based on the transaction price as the fair value. Mutual fund beneficiary certificates were counted based on net worth as fair values.
B. For financial instruments with higher complexity, the Company measured the fair value based on the evaluation model developed using evaluation method and technology which were widely used between the fellow traders. Some of the parameters used in such evaluation models were not market observable information. The Company must make appropriate estimates based on assumptions. The Company's unlisted stocks on OTC held by the Company (excluding the emerging stocks that were traded in the active market) were counted based on the market approach or the asset approach to estimate the fair value. The judgment was conducted with reference to the same type company evaluation, third-party quotation, the Company's net worth and business performance. In addition, the significant non-observable input value was mainly current discount. For more details regarding the impact of non-market observable parameters on the evaluation of financial instruments please see Note 12(4)-10).
C. The output of the evaluation model was the approximate value of the estimate and the evaluation technology might not reflect all relevant factors of the Company’s holding of financial instruments and non-financial instruments. Therefore, the estimated value of the evaluation model would be appropriately adjusted according to additional parameters, e.g., the model risk or liquidity risk. According to the Company’s fair value evaluation model management policy and related control procedures, the management believes that the fair value of financial instruments and non-financial instruments as shown in the balance sheet should be expressed in a fair way. The evaluation adjustment is appropriate and essential. The price information and parameters used in the evaluation process have been carefully evaluated and appropriately adjusted according to the current market conditions.
D. The Company took credit risks evaluation adjustment into consideration

300

of calculation in fair value of the financial instruments and non-financial instruments to respectively reflect the credit risk of the transaction counterparties and credit quality of the Company.

5) Transfer of fair values between the Level 1 and Level 2 for the years ended December 31, 2019 and 2018: Nil
6) Change in the financial instruments of Level 3 for the years ended December 31, 2019 and 2018.

31, 2019 and 2018.
Items Beginning balance IFRS 9 retrospective application transfer-in Acquisition this year Disposal this year/Capital distribution Outward transfer of Level 3 Recognized in other comprehensive income Ending balance	Non-derivative equity (OTC)	instruments`－`Unlisted Stocks
	Year Ended December 31,2019	Year Ended December 31,2018
	$ 87,461 - - - - ( 796)	$ - 151,731 - - ( 2,020) ( 62,250)
	$ 86,665	$ 87,461

7) The Company adopted IFRS 9 since January 1, 2018 whereunder the unlisted (OTC) stocks used to be carried at costs instead of the previous IAS 39 were measured at the fair value through other comprehensive income. Where the fair value lacked sufficient observable market information, such stocks were transferred into Level 3. Another reason is that the emerging stock of unlisted (OTC) stocks at the end of March 2018, were re-evaluated the trading volume to determine whether it was an active market quotation. Due to the stable trading volume in the market, there is sufficient frequency and quantity of transaction occurrences, which could provide pricing information on a continuous basis, resulting in sufficient observable market information available, the Company, therefore, transferred the fair value used from Level 3 to Level 1 at the end of the month when the event occurred.
8) The Company's evaluation process for the fair value classified in the level 3 was the independent fair value verification of financial instruments conducted by the Company's Financial Department in collaboration with an outsourced professional evaluation agency. The independent sources of data were used to bring the evaluation results closer to the market status as independent, reliable, and other resources consistent with and represent the executable price, and regularly update the required input values and data, and any other necessary fair value adjustments to ensure that the evaluation results would be rational.
9) The quantitative information about the significant unobservable input value of the evaluation model used in Level 3 fair value measurement items and the sensitivity analysis of the significant unobservable input value change are explained as follows:

301

Items Fair value as of December 31, 2019 Evaluation technology Significant unobservable input value Range (Weighted average) Relationship between input value and fair value Non-derivative equity instruments: Unlisted (OTC) stocks $ 86,665 Market approach / Asset approach Liquidity depreciation 10% Higher the liquidity depreciation, lower the fair value Items Fair value as of December 31, 2018 Evaluation technology Significant unobservable input value Range (Weighted average) Relationship between input value and fair value Non-derivative equity instruments: Unlisted (OTC) stocks $ 87,461 Market approach / Asset approach Liquidity depreciation 10% Higher the liquidity depreciation, lower the fair value 10) The Company selected the evaluation model and evaluation parameters used after prudential evaluation so it was reasonable to measure the fair value but the use of different evaluation models or evaluation parameters might lead to different evaluation results. For financial assets classified as Level 3 and financial liabilities, if the evaluation parameter changes by 1% basis point, the impact on the current profit/loss or other comprehensive income would be as follows: December31,2019 Recognized in profit or loss Recognized in other comprehensive income Items Input value Change Favorable change Adverse change Favorable change Adverse change Non-derivative equity instruments: Unlisted (OTC) stocks Liquidity depreciation +1% $ -$ -$ - ($ 877) -1% $ -$ -$ 1,050 $ - December31,2018 Recognized in profit or loss Recognized in other comprehensive income Items Input value Change Favorable change Adverse change Favorable change Adverse change Non-derivative equity instruments: Unlisted (OTC) stocks Liquidity depreciation +1% $ -$ -$ - ($ 971) -1% $ -$ -$ 972 $ -	Evaluation technology	Significant unobservable input value	Range (Weighted average)	Relationship between input value and fair value
	Market approach / Asset approach Evaluation technology	Liquidity depreciation Significant unobservable input value	10% Range (Weighted average)	Higher the liquidity depreciation, lower the fair value Relationship between input value and fair value
Non-derivative equity instruments: Unlisted (OTC) stocks Items
Non-derivative equity instruments: Unlisted (OTC) stocks

Additional disclosure in the notes
(1) Significant transactions and (2) Information relating to investee companies
1) Funds loaned to others: Nil

302

2) Provision of endorsements and guarantees to others

Name of endorsers and guarantors	Subject on endorsees and Guarantees	Subject on endorsees and Guarantees	Endorsement and guarantee limit for a single entity	Highest balance of endorsement and guarantee for the year	Balance of endorsemen t /guarantee at the end of year	Actual amount drawn down	Amount endorsement and guarantee collated by property	Ratio of accumulated amount of endorsement and guarantee to net worth in the financial statements of the company in the latestyear	Maximum amount of endorsement and guarantee	Provision of endorsement and guarantee by parent company to subsidiary	Provision of endorsement and guarantee by subsidiary to parent company	Provision of endorsement and guarantee to the party in Mainland China
	Name of company	Relationship
KK Enterprise Co., Ltd.	KK Enterprise (Malaysia) Sdn. Bhd.	A subsidiary with direct shareholding in equity up to 70%	Within the maximum limit not in excess of 50% of the total endorsement/guar antee of the Company. ($220,535)	$62,875 (RM8,940)	$62,875 (RM8,940)	$41,776 (RM5,940)	`－`	7.13%	The total endorsement/guarantee of the Company shall not exceed 50% of the net worth as shown through the latest financial statements of the Company ($441,069)	Yes	No	No

3) Holding of Marketable Securities at the End of Year (Not Including Subsidiaries, Associates and Joint Ventures)

Securities held by	Kind and name of marketable securities	Kind and name of marketable securities	Relationship with the marketable securities issuer	General ledger account	At the end ofyear	At the end ofyear	At the end ofyear	At the end ofyear
					Shares in thousands or unit expressed in thousands)	Carrying amount	Shareholding ratio (5)	Fair value
Grand Pacific Petrochemical Corporation	Stock	He Xin Venture Investment Enterprise Co., Ltd. TECO Nanotech Co., Ltd. YODN Lighting Corp. Bridgestone Taiwan Co., Ltd. China Development Financial HoldingCorporation	The Company's director is that company’s representative `－` `－` `－` `－`	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	37 19 165 1,151 21,297	$1,259 - 876 85,406 207,224	2.85 0.08 0.93 1.42 0.14	$1,259 - 876 85,406 207,224
	Fund	KGI Victory Money Market Fund	`－`	Financial assets at fair value through profit or loss - current	2,000	23,247	-	23,247
GPPC Chemical Corporation	Stock	He Xin Venture Investment Enterprise Co., Ltd. YODN Lighting Corp. Kuo Tsung Development Co., Ltd. Kuo Tsung Construction Development Co., Ltd.	The Company's director is that company’s representative `－` `－` `－`	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	49 64 200 200	1,685 341 - -	3.80 0.36 1.06 1.31	1,685 341 - -

303

Securities held by	Kind and name of marketable securities	Kind and name of marketable securities	Relationship with the marketable securities issuer	General ledger account	At the end ofyear	At the end ofyear	At the end ofyear	At the end ofyear
					Shares in thousands or unit expressed in thousands)	Carrying amount	Shareholding ratio (5)	Fair value
		Bridgestone Taiwan Co., Ltd. Com2B Corporation Grand Pacific Petrochemical Corporation - common shares Grand Pacific Petrochemical Corporation - preferred shares China Development Financial HoldingCorporation	`－` `－` The Company’s parent company The Company’s parent company The Company is that company’s director	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	934 750 247 1,776 12,110	69,318 - 4,603 61,094 117,830	1.15 1.67 0.03 8.88 0.08	69,318 - 4,603 61,094 117,830
GPPC INVESTMENT CORP.	Stock	YODN Lighting Corp.	`－`	Financial assets at fair values through other comprehensive income - noncurrent	631	3,345	3.54	3,345
	Partnership	China Development Asset Management Corporation's advantageous venture capital limitedpartnership	`－`	Financial assets at fair values through other comprehensive income - noncurrent	-	85,723	-	85,723
	Fund	KGI Victory Money Market Fund	`－`	Financial assets at fair value through profit or loss - current	215	2,504	-	2,504
GPPC Hospitality And Leisure Inc.	Fund	KGI Victory Money Market Fund	`－`	Financial assets at fair value through profit or loss - current	1,585	18,420	-	18,420
GPPC Development Co.,Ltd.	Fund	KGI Victory Money Market Fund	`－`	Financial assets at fair value through profit or loss - current	11,016	128,045	-	128,045
Goldenpacific Equities Ltd.	Partnership	CDIB Capital Asia Partners L.P. CDIB Capital Global Opportunities Fund L.P.	`－` `－`	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	- -	163,125 237,669	- -	154,211 139,248
Videoland Inc.	Stock	China Life Insurance Co., Ltd. China Development Financial HoldingCorporation	`－` `－`	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	107,882 55,504	2,761,780 540,050	2.42 0.37	2,761,780 540,050
	Stock	Jeoutai Technology Co., Ltd. Global Mobile Corp. Great Dream Pictures, Inc.	`－` `－` `－`	Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent Financial assets at fair values through other comprehensive income - noncurrent	2,007 1,440 1,000	$67,687 - 5,750	5.96 0.52 9.98	$67,687 - 5,750
	Partnership	CDIB Capital Asia Partners L.P.	`－`	Financial assets at fair values through other comprehensive income - noncurrent	-	139,853	-	139,853

304

4) Buy or sale of the same marketable security with the accumulated amount reaching NT$300 million or 20% of paid-in capital or more

		more
Company of Buy/sale	Kind and Name of security	General ledger account	Transaction object	Relationship	At Beginningofyear		Buy		Sale				At end ofyear
					Unit expressed in thousands	Amount	Unit expressed in thousands	Amount	Unit expressed in thousands	Selling price	Carrying cost	Disposal of gain (loss)	Unit expressed in thousands	Amount
Grand Pacific Petrochemical Corporation	KGI Victory Money Market Fund	Financial assets at fair value through profit or loss - current	Open trading market	-	-	-	94,538	$1,095,000 80(Note1)	92,538	$1,073,174	$1,071,833	$1,341	2,000	$23,247
Videoland Inc.	China Life Insurance Co., Ltd.	Financial assets at fair values through other comprehensive income - noncurrent	Centralized Trading Market	-	94,428	$2,629,821	18,454	380,153	5,000	124,560	51,765 196,429(Note 1)	72,795	107,882	2,761,780
Land & Sea Capital Corp.	Zhangzhou Chimei Chemical Co., Ltd.	Investments accounted for using the equity method	Capital increase in cash	-	-	717,809	-	477,374	-	-	- 57,806(Note 2)	-	-	1,137,377

Note: (1) As the amount including investment in equity instruments evaluation profit or loss at fair value through profit loss/other comprehensive income and gain on disposal of investment directly transferred to retained earnings.
(2) Evaluation adjustments accounted for using the equity method.
5) Acquisition of property reaching NT$300 million or 20% of paid-in capital or more: Nil
6) Disposal of property reaching NT$300 million or 20% of paid-in capital or more: Nil

305

7) Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

Purchase (sale) company	Name of transaction object	Relationship		Descriptions of transaction	Descriptions of transaction		Description and reasons for difference in transaction terms compared to generaltransaction	Description and reasons for difference in transaction terms compared to generaltransaction	Notes or accounts receivable (payable)	Notes or accounts receivable (payable)
			Purchas(sales of goods	Amount	Percentage of total purchases (sales)	Grand period	Unit price	Grand period	Balance	Percentage of total notes or accounts receivable (payable)
Grand Pacific Petrochemical Corporation	GPPC Chemical Corporation	The Company’s subsidiaries	Sales	$1,286,974	7.93%	Based on sales contracts	The purchase or selling price under the contract is based on the mean price in the three regions, that is, FOB Korea, CFR Taiwan, and CFR SE Asia, in the respective issues of Styrene intelligence reports for the month according to Platt’s Far East Petrochemical Scan.	To be settled at the end of each month and paid off 45 days following settlement, if the payment is not received as scheduled, the interest will be calculated at the one-year time deposit annual rate of the Bank of Taiwan as of January 1 of the specific year, however, is limited to 3 months at maximum.	$12,611	0.92%
GPPC Chemical Corporation	Grand Pacific Petrochemical Corporation	The Company’s parent company	Purchase	1,286,974	83.43%	Based on purchase contracts	The purchase or selling price under the contract is based on the mean price in the three regions, that is, FOB Korea, CFR Taiwan, and CFR SE Asia, in the respective issues of Styrene intelligence reports for the month according to Platt’s Far East Petrochemical Scan.	To be settled at the end of each month and paid off 45 days following settlement, if the payment is not received as scheduled, the interest will be calculated at the one-year time deposit annual rate of the Bank of Taiwan as of January 1 of the specific year, however, is limited to 3 months at maximum.	(12,611)	(57.78%)

8) Receivable from related parties reachingNT$100 million or 20% of paid-in capital or more: Nil
9) Trading in derivative instruments: Nil

306

10) Significant impact either directly or indirectly, name, location and such information of investees under control or joint ventures (excluding investment in Mainland China)

Name of investor	Name of investee	Location	Main business	Original investments	Original investments	Holdingstatus at end ofyear	Holdingstatus at end ofyear	Holdingstatus at end ofyear	Current profit/loss of the investee	Profit/loss recognized by the Company	Notes
				Ending balance of currentyear	Ending balance ofpriorperiod	Shares in thousands	Shareholding ratio(%)	Carrying amount
Grand Pacific Petrochemical Corporation	GPPC Chemical Corporation GPPC Investment Corp. GPPC Development Co., Ltd. Videoland Inc. KK Enterprise Co., Ltd. Goldenpacific Equities Ltd. Land & Sea Capital Corp.	No.66, Changxing Rd., Luzhu Dist., Kaohsiung City 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City 3F, No.480, Ruiguang Rd., Neihu Dist., Taipei City No.1, Ziqiang 3rdRd., Nangang Industrial Zone, Nantou City British Virgin Islands British Virgin Islands	Production and sale of impact-resistant and flame-resistant polystyrene Investment business General hotel business Radio and television program production, domestic and foreign film copying, domestic film production, distribution, trading and other services Manufacture, wholesale and retail of various trademark paper, glue paper and PU Resin Investment business Investment business	$462,953 170,307 50,000 1,536,404 110,190 10,510 2,817,223	$462,953 170,307 - 1,536,404 130,026 10,510 2,817,223	54,200 22,032 5,000 71,093 7,934 75 86,319	100.00 81.60 38.46 62.29 15.73 100.00 100.00	$675,530 270,250 49,531 4,419,707 138,760 665,141 8,375,683	$71,268 (10,560) (1,123) 213,644 33,473 10,687 1,139,766	$69,317 (8,618) (469) 133,080 5,264 10,687 1,124,585	The investment profit/loss recognized including deducted with cash dividend received from parent company $1,066 and deducted NT$885 as the difference in entity base or consolidated base view points. Comprehensive shareholding up to control force Comprehensive shareholding up to control force The recognized investment profit and/or loss including adjustment with difference between the entity base and combination base to reduce byNT$15,181
GPPC Investment Corp.	GPPC Hospitality And Leisure Inc.	1F, No.26, Lane 295, Sec. 1, Dunhua S. Rd., Taipei City	Catering service business	40,000	40,000	4,000	100.00	39,586	(10,648)	(10,648)
Videoland Inc.	KK Enterprise Co., Ltd. GPPC Investment Corp. GPPC Development Co., Ltd.	No.1, Ziqiang 3rdRd., Nangang Industrial Zone, Nantou City 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City 10F, No.1, Sec. 4, Nanjing E. Rd., Taipei City	Manufacture, wholesale and retail of various trademark paper, glue paper and PU Resin Investment business General hotel business	238,248 35,372 29,873	280,862 35,372 -	17,046 4,968 3,000	33.79 18.40 23.08	$298,074 57,522 29,724	33,473 (10,560) (1,123)	11,314 (1,942) (308)	Comprehensive shareholding with significant power of influence
KK Enterprise Co., Ltd.	K.K. Chemical Company Limited Dragon King Inc. KK Enterprise (Malaysia) Sdn.Bhd. Bhd.	Hong Kong Samoa Malaysia	Trademark paper, glue paper and such business Outward investment business Trademark paper, glue paper and such business	5,255 3,258 15,995	5,255 3,258 15,995	125 100 1,680	49.90 100.00 70.00	4,262 4,763 57,180	(144) (31) 9,911	(72) (31) 6,938	With control force

307

(3) Information on investments in Mainland China

Name of investors	Name of investee in China	Main business lines	Main business lines	Paid-in capital	Method of investment	Beginning amount of accumulated investment with outward remittance from Taiwan this year	Beginning amount of accumulated investment with outward remittance from Taiwan this year	Amount of investment remitted outward or retrieved this year	Amount of investment remitted outward or retrieved this year	Ending amount of accumulated investment with outward remittance from Taiwan thisyear	Profit or loss of investees this year Note (5)	Profit or loss of investees this year Note (5)	The Company's shareholding ratio either directly or indirectly investment Note (4)	Investment gain /loss recognized in the year Note (5)	Carrying amount of investment at end of year Note (4)	Investment gains having been received at end of year
								Outward remittance	Retrieval
Grand Pacific Petrochemical Corporation	Zhenjiang Chimei Chemical Co., Ltd.	Production and sales of series products and their products using styrene as raw materials and various chemical raw materials and fuel oil handling, storage and transportation and operation		USD368,850	Note (2)	$1,652,206 (USD52,830)		-	-	$1,652,206 (USD52,830)	$4,070,804		30.40%	$1,237,525 (USD40,775)	$5,460,356 (USD182,133)	$473,318 (USD15,496)
	Zhangzhou Chimei Chemical Co.,Ltd.	Primary form plastics and synthetic resin manufacturing		CNY880,000	Note (2)	716,901 (USD23,340)		-	-	716,901 (USD23,340)	(49,528)		30.40%	(15,057) (USD496)	1,137,377 (USD37,938)	-
KK Enterprise Co., Ltd.	KK Enterprise (Zhongshan) Co., Ltd.	Trademark paper, glue paper and such business		HKD12,300	Note (3)	21,509 (HKD6,150)		-	-	21,509 (HKD6,150)	11,819		50.00%	5,949 Note (6)	64,986	45,491
	KK Enterprise (Kunshan) Co., Ltd.	Trademark paper, glue paper and such business		USD6,100	Note (1)	206,958 (USD5,168) (Machine USD827)		-	-	206,958 (USD5,168) (Machine USD827)	(7,569)		100.00%	(7,508) Note (6)	196,457	36,061

Name of investor			Amount of accumulated investment remitted from Taiwan to the Mainland China at end of year				Amounts of investment approved by Investment Commission, Ministry of Economic Affairs					Maximum limit of investment in Mainland China as promulgated by Investment Commission, Ministry of Economic Affairs(Note 7)
Grand Pacific Petrochemical Corporation			$2,369,107(USD76,170)				$3,051,304(USD101,778) (Note 8)					$16,339,246
KK Enterprise Co., Ltd.			$228,467 (USD5,168; HKD6,150 and machine USD827)				$228,467(USD5,995; HKD6,150)					$584,371

308

Note:

(1) As direct investment.
(2) Investment in the Mainland China based firm through a company incorporated in a third territory after being approved by the government.
(3) Investment in the Mainland China based firm by outsourcing a company incorporated in a third territory after being approved by the government.
(4) The shareholding ratio and carrying amount of the investment at the end of the year, which is outward investment or investment outsourcing a third territory company either directly or indirectly
(5) Based on the financial statements audited/certified by other certified public accountants of the international Certified Public Accountant Firms in cooperation relationship with the Certified Public Accountant Firms of the Republic of China and other Certified Public Accountant (practicing) of the Company's Certified Public Accountant Firms to recognize the investment gains or losses accounted for using the equity method to the shareholding ratio of investment, either directly or indirectly.
(6) The investment gains and losses recognized in this current year including the realized, unrealized net gains and losses generated by the forward, countercurrent and side stream exchanges.
(7) Under the provisions of the Investment Commission, Ministry of Economic Affairs, the maximum limit for the amounts or percentages of accumulated investment toward Mainland China shall be 60% of the Company's net worth or the consolidated net worth (whichever was the higher).
(8) As of December 31, 2019, the amount of accumulated investment by the Company toward Mainland China as approved by the Investment Commission, Ministry of Economic Affairs totaled at US$187,731 thousand. Pursuant to Article 3 of "Principles for Investment or Technical Cooperation Review in the Mainland China", the amount of capital increase with earnings into Mainland China would not be counted into the accumulated investment. Besides, where the share capital or earnings of investment in Mainland China were remitted back to Taiwan by investor, the accumulated amount of investment could be deducted accordingly. The Company's earnings used for capital increase (additional investment) in Mainland China as approved by the Investment Commission, Ministry of Economic Affairs came to US$70,457 thousand and the surplus remitted back amounted to US$15,496 thousand, which had both been deducted from the cumulative amounts of approved investment in Mainland China.
(9) The foreign currency amounts in this Table are converted to New Taiwan Dollars the exchange rate quoted on the balance sheet date, except that the amount of investment remitted outward from Taiwan which was measured at historical exchange rates.

309

2) Significant transactions occurring with Mainland China based investees via a third territory directly or indirectly as follows:
A. Ending balance and percentage of payables regarding purchase amounts & percentage: Nil
B. Ending balance and percentage of receivables regarding sales amounts & percentage:
- Year Ended December 31, 2019 & December 31, 2019

	 Year Ended Dece	mber 31, 2019 & Decem	mber 31, 2019 & Decem	ber 31, 2019	ber 31, 2019
Company name of sales	Name of transaction object	Sales revenues		Accounts receivable
		Amount	Percentage of net sales	Amount	Percentage of total accounts receivable
Grand Pacific Petrochemical Corporation KK Enterprise Co., Ltd. KK Enterprise Co., Ltd.	Zhenjiang Chimei Chemical Co., Ltd. KK Enterprise (Zhongshan) Co., Ltd. KK Enterprise (Kunshan) Co., Ltd.	$ 8,150 422 13,192	0.05% 0.05% 1.41%	$ 1,271 122 3,064	0.09% 0.09% 2.37%

Year Ended December 31, 2018 & December 31, 2018

	Year Ended December 31,	2018 & December 31, 20	2018 & December 31, 20	18	18
Company name of sales	Name of transaction object	Sales revenues		Accounts receivable
		Amount	Percentage of net sales	Amount	Percentage of total accounts receivable
Grand Pacific Petrochemical Corporation KK Enterprise Co., Ltd. KK Enterprise Co., Ltd.	Zhenjiang Chimei Chemical Co., Ltd. KK Enterprise (Zhongshan) Co., Ltd. KK Enterprise (Kunshan) Co., Ltd.	$ 3,382 506 26,592	0.02% 0.05% 2.78%	$ 735 111 3,265	0.04% 0.09% 2.68%

  - The transactions terms and conditions had been conducted as per the specified selling prices. The payments were collected 30 days – 90 days maturity after account settlement on a monthly basis.

C. Amounts in property transaction and amount of profit or loss so incurred: Nil
D. Ending balance of the endorsements/guarantees of notes or the collateral provided: Nil
E. The highest balance of fund financing, ending balance, interest rate range and total amount of interest in the current year: Nil
F. Other transactions that had a significant impact on the current profit/loss or financial status: Nil
Information of the operating segments

The Company already disclosed related information of the operating segments in the consolidated financial statements and hence the disclosure is not required in the individual financial statement.

310

VI. The financial problems of the Company and its affiliates found in the most recent year and as of the publication date of the Annual Report issuance and the impact of such problems upon the Company’s financial position

In 2018 and as of the publication date of the Annual Report, both the Company and its affiliated enterprises had not incurred any financial difficulty at all. The key financial and performance over the past two years are as enumerated below for reference:

I. Financial target

I. Financial target
Financial structure Ratio of liabilities to assets Current ratio Quick ratio Interest coverage ratio (times) II. Performance target Profitability Return rate on assets Return rate on shareholders’ equity Net profit rate Earnings per share (EPS) after tax Average cashing days Average selling days	2019 10.30% 360.69% 280.42% 301,552.50 2019 7.80% 8.79% 12.76% 2.27 37 36	2018
		12.20% 247.13% 168.99% 867,726.97 2018
		11.83% 13.62% 14.58% 3.26 37 33

Note: In terms of financial target and performance target, the Company adopted International Financial Reporting Standards (IFRS) and individual financial statement of the parent company certified by the CPAs.

311

Seven. Review of Financial Position, Financial Performance, and Risks Related Issues

I. Financial Position: Major reasons that led to significant changes in assets, liabilities and shareholders’ equity over the past two years and the impact thereof. Elaborate on the countermeasures in the future in case of a significant impact.

(I) Consolidated Financial Statement

Expressed in Thousands of New Taiwan Dollars
2018 Discrepancy Descriptions Amount %
10,852,015 775,984 7.15%
7,427,473 (186,883) (2.52%)
674,070 0 `－`
10,906,343 1,037,405 9.51%
29,859,901 1,626,506 5.45%
2,877,053 (357,600) (12.43%)
1,361,874 373,003 27.39% Note 1
4,238,927 15,403 0.36%
9,266,203 0 `－`
180,533 1,165 0.65%
12,608,192 2,087,686 16.56%
739,639 (459,173) (62.08%) Note 2
(55,577) 0 `－`
22,738,990 1,629,678 7.17%
2,881,984 (18,575) (0.64%)
25,620,974 1,611,103 6.29%
ase up to 20% over the past two years (2019 & 2018):
abilities increased by 27% over the preceding term’s, due
t year, the Company adopted IFRS16 leasehold gazette to
rrent with an increase of NT$350 million. The liabilities
, the net operating profit decreased by 50% from the
m, net cash inflow in the operating activities decreased by
nevertheless, did not cast a significant impact upon the
decrease from the preceding term, due primarily to the fact
nce with conversion discrepancy from financial statements of
by NT$320 million and the unrealized evaluation profit
r comprehensive profit and/or loss measured at fair value
applicable.

		nt	nt	nt	nt
		Expressed in Thousands of New Taiwan Dollars
Year	21	21	Discrepancy		Descriptions
AccountingItem	09	08	Amount	%
Current Assets	11,627,999	10,852,015	775,984	7.15%
Property, plant and equipment	7,240,590	7,427,473	(186,883)	(2.52%)
Intangible assets	674,070	674,070	0	`－`
Other assets	11,943,748	10,906,343	1,037,405	9.51%
Total assets	31,486,407	29,859,901	1,626,506	5.45%
Current liabilities	2,519,453	2,877,053	(357,600)	(12.43%)
Non-current liabilities	1,734,877	1,361,874	373,003	27.39%	Note 1
Total liabilities	4,254,330	4,238,927	15,403	0.36%
Capital stock	9,266,203	9,266,203	0	`－`
Capital surplus	181,698	180,533	1,165	0.65%
Retained earnings(loss)	14,695,878	12,608,192	2,087,686	16.56%
Other equity	280,466	739,639	(459,173)	(62.08%)	Note 2
Treasurystock	(55,577)	(55,577)	0	`－`
The Equity contributed to the owners of ParentCompany	24,368,668	22,738,990	1,629,678	7.17%
Non-controlled Equity	2,863,409	2,881,984	(18,575)	(0.64%)
Total equity	27,232,077	25,620,974	1,611,103	6.29%
Reasons that led to changes with increase/decre Note 1. Changes in the item of non-current li primarily to the fact that in the curren recognize leasehold liabilities-non-cu increased because in the current term preceding term and in the current ter 33% from the preceding term which, Company's financial conditions. Note 2. In changes in other equity with 62% that in the current term, the loan bala overseas operating entities increased and/or loss of financial assets in othe decreased by NT$140 million. Countermeasures to be taken in the future: Not		ase up to 20% over the past two years (2019 & 2018): abilities increased by 27% over the preceding term’s, due t year, the Company adopted IFRS16 leasehold gazette to rrent with an increase of NT$350 million. The liabilities , the net operating profit decreased by 50% from the m, net cash inflow in the operating activities decreased by nevertheless, did not cast a significant impact upon the decrease from the preceding term, due primarily to the fact nce with conversion discrepancy from financial statements of by NT$320 million and the unrealized evaluation profit r comprehensive profit and/or loss measured at fair value applicable.

312

(II) Individual financial statement

(II) Individual financial statement	(II) Individual financial statement	(II) Individual financial statement	(II) Individual financial statement	(II) Individual financial statement	(II) Individual financial statement
Expressed in Thousands of New Taiwan Dollars Year AccountingItem 2019 2018 Discrepancy Descriptions Amount % Current Assets 6,151,330 5,227,246 924,084 17.68% Property, plant and equipment 6,089,278 6,600,827 (511,549) (7.75%) Intangible assets 0 0 0 `－` Other assets 14,925,722 14,070,429 855,293 6.08% Total assets 27,166,330 25,898,502 1,267,828 4.90% Current liabilities 1,705,453 2,115,208 (409,755) (19.37%) Non-current liabilities 1,092,209 1,044,304 47,905 4.59% Total liabilities 2,797,662 3,159,512 (361,850) (11.45%) Capital stock 9,266,203 9,266,203 0 `－` Capital surplus 181,698 180,533 1,165 0.65% Retained earnings(loss) 14,695,878 12,608,192 2,087,686 16.56% Other equity 280,466 739,639 (459,173) (62.08%) Note 1 Treasurystock (55,577) (55,577) 0 `－` Total equity 24,368,668 22,738,990 1,629,678 7.17% Reasons that led to changes with increase/decrease up to 20% over the past two years (2019 & 2018): Note 1. In changes in other equity with 62% decrease from the preceding term, due primarily to the fact that in the current term, the loan balance with conversion discrepancy from financial statements of overseas operating entities increased by NT$320 million and the unrealized evaluation profit and/or loss of financial assets in other comprehensive profit and/or loss measured at fair value decreased by NT$140 million. Countermeasures to be taken in the future: Not applicable.
Year			Discrepancy		Descriptions
AccountingItem	2019	2018	Amount	%
Current Assets	6,151,330	5,227,246	924,084	17.68%
Property, plant and equipment	6,089,278	6,600,827	(511,549)	(7.75%)
Intangible assets	0	0	0	`－`
Other assets	14,925,722	14,070,429	855,293	6.08%
Total assets	27,166,330	25,898,502	1,267,828	4.90%
Current liabilities	1,705,453	2,115,208	(409,755)	(19.37%)
Non-current liabilities	1,092,209	1,044,304	47,905	4.59%
Total liabilities	2,797,662	3,159,512	(361,850)	(11.45%)
Capital stock	9,266,203	9,266,203	0	`－`
Capital surplus	181,698	180,533	1,165	0.65%
Retained earnings(loss)	14,695,878	12,608,192	2,087,686	16.56%
Other equity	280,466	739,639	(459,173)	(62.08%)	Note 1
Treasurystock	(55,577)	(55,577)	0	`－`
Total equity	24,368,668	22,738,990	1,629,678	7.17%
Reasons that led to changes with increase/decrease up to 20% over the past two years (2019 & 2018): Note 1. In changes in other equity with 62% decrease from the preceding term, due primarily to the fact that in the current term, the loan balance with conversion discrepancy from financial statements of overseas operating entities increased by NT$320 million and the unrealized evaluation profit and/or loss of financial assets in other comprehensive profit and/or loss measured at fair value decreased by NT$140 million. Countermeasures to be taken in the future: Not applicable.

313

II. Financial Performance: Major reasons leading to significant changes in operating revenues, net operating profit and net profit before tax over the past two years and the very grounds to forecast the sales volume and the grounds thereof, their potential impact upon the finance and business operation and the countermeasures:

(I) Comparative analysis on the operating results:
Consolidated Financial Statement

Expressed in Thousands of New Taiwan Dollars

Item	2018	2019	Amount in increase (decrease)	Ratio (%) of change	Remark
Operatingrevenues	20,468,229	24,741,138	(4,272,909)	(17.27%)
Operatingcost	(17,829,140)	(20,685,790)	(2,856,650)	(13.81%)
Gross profit	2,639,089	4,055,348	(1,416,259)	(34.92%)	Note1
Operating expenses	(1,268,878)	(1,316,510)	(47,632)	(3.62%)
Net operatingincome	1,370,211	2,738,838	(1,368,627)	(49.97%)	Note1
Non-Operating revenues and expenditures	1,370,666	1,318,110	52,556	3.99%
Before tax netprofit	2,740,877	4,056,948	(1,316,071)	(32.44%)	Note 2
Income Tax Benefit (expense)	(564,666)	(906,207)	(341,541)	(37.69%)
Aftertax net profit	2,176,211	3,150,741	(974,530)	(30.93%)

Note 1: Due primarily to the facts that the comprehensive operating revenues decreased by NT$4.27 billion or by approximately 17% from last year’s, including the Petrochemical Department decreasing by approximately 19%, Television Media Department decreasing by approximately 7%; the comprehensive operating cost decreased by NT$2.86 billion or by approximately 14% from last year’s. As a result, the consolidated operating costs decreasing by NT$1.4 billion, approximately 35% and the consolidated net operating profit decreasing by 50%.
Note 2: Due primarily to the facts that the comprehensive net operating profit decreased by NT$1.37 billion from the preceding year, the comprehensive non-operating revenues and expenditures increased by NT$50 million over the preceding year. As a result, the consolidated comprehensive net profit before tax decreased by NT$1.32 billion, approximately 32% from the preceding year.
Individual financial statement

		Expressed in Thousands ofNewTaiwan Dollars	Expressed in Thousands ofNewTaiwan Dollars	Expressed in Thousands ofNewTaiwan Dollars	Expressed in Thousands ofNewTaiwan Dollars
Item	2019	2018	Amount in increase (decrease)	Ratio (%) of change	Remark
Operatingrevenues	16,229,085	20,305,094	(4,076,009)	(20.07%)	Note1
Operating cost	(14,779,229)	(17,525,024)	(2,745,795)	(15.67%)
Gross profit	1,449,856	2,780,070	(1,330,214)	(47.85%)	Note 1
Realized (Unrealized) Gross Profit	4,429	8,574	(4,145)	(48.34%)	Note 2
Gross profit- net	1,454,285	2,788,644	(1,334,359)	(47.85%)	Note1
Operatingexpenses	(414,240)	(489,604)	(75,364)	(15.39%)
Net operatingincome	1,040,045	2,299,040	(1,258,995)	(54.76%)	Note1
Non-Operating revenues and expenditures	1,371,575	1,336,317	35,258	2.64%
Before tax netprofit	2,411,620	3,635,357	(1,223,737)	(33.66%)	Note3
Income Tax Benefit (expense)	(341,495)	(675,251)	(333,756)	(49.43%)
Aftertax net profit	2,070,125	2,960,106	(889,981)	(30.07%)

Note 1: Primarily such reasons: In the current year, the selling prices of products plummeted as compared to

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the preceding year, with the average unit selling prices of SM/ABS/Nylon dropping by 23%/19%/6% respectively, with net operating revenues decreasing by NT$4.07 billion, approximately 20%; The cost of main raw materials slightly converged from the previous period, but the incoming cost of hexamethylene diamine increased by nearly 30% over last year’s. The operating cost decreased by NT$2.75 billion or approximately16% compared with the preceding year. The gross profitability was 8.9%, declining by 35% as compared with last year's 13.7%. Net gross operating profit and net operating profit decreased by 48% and 55% respectively from the preceding year’s.

Note 2: As a result that with the difference between the unit selling prices toward affiliated enterprises and the costs of the year, leading to NT$320,000 unrealized selling profit and in the preceding year, the already realized selling profits came to NT$4.75 million.
Note 3: The net profit before tax decreased by NT$1.2 billion from the preceding year’s, approximately 34%, due primarily to the fact that in the current term, the net gross profit decreased by NT$1.33 billion as compared to the preceding year; the operating expense decreased by NT$80 million from the preceding year and the non-operating revenue and expenditure slightly increased by NT$40 million as compared to the preceding year.
(II) Reasons leading to change in the contents of major business operation: Not applicable.
(III) Analyses into changes in the gross operating profits.
Consolidated Financial Statement

	Expressed in Thousands of New Taiwan Dollars 2019 2018 Amount in increase (decrease) 2,639,089 4,055,348 (1,416,259) 12.89% 16.39% (21.35%)	Expressed in Thousands of New Taiwan Dollars 2019 2018 Amount in increase (decrease) 2,639,089 4,055,348 (1,416,259) 12.89% 16.39% (21.35%)	Expressed in Thousands of New Taiwan Dollars 2019 2018 Amount in increase (decrease) 2,639,089 4,055,348 (1,416,259) 12.89% 16.39% (21.35%)
	2019	2018	Amount in increase (decrease)
Grossprofit	2,639,089	4,055,348	(1,416,259)
Grossprofit ratio	12.89%	16.39%	(21.35%)

Individual financial statement

Individual financial statement	Individual financial statement	Individual financial statement	Individual financial statement	Individual financial statement	Individual financial statement	Individual financial statement
Expressed in Thousands of New Taiwan Dollars Gross profit increase/de crease between the current and proceeding terms Causes leadingto difference Default in selling prices Difference in costs Difference in selling portfolio Difference in quantities Adjustment for unrealized sales profit and/or loss (1,334,359 ) (3,801,872 ) 2,306,360 226,456 (61,158) (4,145) Descriptions Descriptions on changes in gross profit: In the current term, the gross profit ratio decreased by 35% as compared with the previous period due primarily to the fact that the selling price of each product in 2019 dropped sharply compared with the previous period, resulting in an unfavorable price difference of about NT$3.8 billion gap in disfavor of the selling prices while the costs of main raw materials benzene, ethylene, propylene cyanide (AN), butadiene (BD) and others slightly converged compared to the previous period, and the incoming cost of hexamethylene diamine increased from the previous period, resulting in a favorable cost price difference of about NT$2.3 billion. However, due to the huge unfavorable sales price difference, the changes in the operating profit during the current period decreased byNT$1,334,359thousand.
Gross profit	increase/de crease between the current and proceeding terms	Causes leadingto difference
		Default in selling prices	Difference in costs	Difference in selling portfolio	Difference in quantities	Adjustment for unrealized sales profit and/or loss
	(1,334,359 )	(3,801,872 )	2,306,360	226,456	(61,158)	(4,145)
Descriptions	Descriptions on changes in gross profit: In the current term, the gross profit ratio decreased by 35% as compared with the previous period due primarily to the fact that the selling price of each product in 2019 dropped sharply compared with the previous period, resulting in an unfavorable price difference of about NT$3.8 billion gap in disfavor of the selling prices while the costs of main raw materials benzene, ethylene, propylene cyanide (AN), butadiene (BD) and others slightly converged compared to the previous period, and the incoming cost of hexamethylene diamine increased from the previous period, resulting in a favorable cost price difference of about NT$2.3 billion. However, due to the huge unfavorable sales price difference, the changes in the operating profit during the current period decreased byNT$1,334,359thousand.

315

III. Cash flow: Analytical descriptions of changes in cash flow, corrective action plans for inadequate liquidity in the most recent fiscal year and analyses into the liquidity in the upcoming year

(I) Analysis into changes in c ash flow in the most recent year:

1. Consolidated Financial Statement

Consolidated Financial Statement
Year Item	2019	2018	Ratio (%) of Increase(decrease)
Cash flow ratio	121.33%	159.06%	(23.72%)
Cash flow adequacyratio	307.98%	250.25%	23.07%
Ratio of reinvestment in cash	7.28%	9.27%	(21.47%)
Analytical descriptions of the increase/decrease ratio: 1. Cash flow ratio decreased by 24% from the preceding term, due primarily to the fact that in the current term, the net cash flow in operating activities decreased by 33% from the preceding term and the current liabilities decreased by 12% from the preceding term. 2. Cash flow adequacy ratio increased by 23% over the preceding term, due primarily to the fact that in the current term the 5-year net cash flow in operating activities increased by 3% over the preceding term, the total of inventory increase and cash dividend decreased by 16% from the preceding term. 3. The cash reinvestment ratio decreased by 22% from the preceding term, due primarily to the fact that in the current term, the balance of net cash flow in operating activities deducted with cash dividend decreased by 17% from the preceding term. Besides in the current term, the real property plants in gross amount, long-term investment, other non-current assets and working capitals increased by6% over theprecedingterm.

2. Individual financial statement

Individual financial statement
Year Item	2019	2018	Ratio (%) of Increase(decrease)
Cash flow ratio	117.60%	122.56%	(4.05%)
Cash flow adequacyratio	210.19%	158.54%	32.58%
Ratio of reinvestment in cash	5.48%	4.87%	12.53%
Analytical descriptions of the increase/decrease ratio: 1. Cash flow adequacy ratio increased by 33% over the preceding term, due primarily to the fact that in the current term the 5-year net cash flow in operating activities increased by 9% over the preceding term, the total of inventory increase and cash dividend decreased by 18% from the precedingterm.

(II) Analysis into cash liquidity in 2019
Consolidated Financial Statement

Expressed in Thousands of New Taiwan Dollars

Beginning cash balance	Net cash flow from operating activities in the entire year	Cash outflow of the entire year	Cash balance (shortfall)	Countermeasures against inadequate cash	Countermeasures against inadequate cash
				Investment plan	Wealth management plan
2,729,454	3,056,778	2,382,849	3,403,383	`－`	`－`
1. Analyses into changes in cash flow in the current year: (1) Operating activities: The prime cash inflow in operating activities came from the cash inflow yielded by the profits. (2) Investment activities: The net cash outflow in investment activities is primarily the procurement of fixed assets and investment in other financial assets. (3) Capital-raisingactivities: The net cash outflow in capital-raisingactivities is allocation

316

of cash dividend. 2. Remedial measures and liquidity analysis for cash shortfall: Nil 3. Liquidityanalyses on the cash flow in the upcoming year:	of cash dividend. 2. Remedial measures and liquidity analysis for cash shortfall: Nil 3. Liquidityanalyses on the cash flow in the upcoming year:	of cash dividend. 2. Remedial measures and liquidity analysis for cash shortfall: Nil 3. Liquidityanalyses on the cash flow in the upcoming year:	of cash dividend. 2. Remedial measures and liquidity analysis for cash shortfall: Nil 3. Liquidityanalyses on the cash flow in the upcoming year:
Ending balanced of cash	Net cash flow from operating activities anticipated for the entire year	Anticipated cash flow for the entire year	Anticipated balance (shortfall) in cash	Remedial measure of anticipated cash shortfall
				Investment plan	Wealth management plan
3,403,383	2,000,000	3,403,383	2,000,000	`－`	`－`

2. Individual financial statement

Expressed in Thousands of New Taiwan Dollars

Ending balanced of cash	Net cash flow from operating activities anticipated for the entire year	Anticipated cash flow for the entire year	Anticipated balance (shortfall) in cash	Remedial measure of anticipated cash shortfall	Remedial measure of anticipated cash shortfall
				Investment plan	Wealth management plan
1,567,675	2,005,571	1,949,606	1,623,640	`－`	`－`
1. Analyses into changes in cash flow in the current year: (1) Operating activities: The prime cash inflow in operating activities came from the cash inflow yielded by the profits. (2) Investment activities: The net cash outflow in investment activities is primarily the procurement of fixed assets and investment in other financial assets. (3) Capital-raising activities: The net cash outflow in capital-raising activities is allocation of cash dividend. 2. Remedial measures and liquidity analysis for cash shortfall: Nil 3. Liquidityanalyses on the cash flow in the upcoming year:
Ending balanced of cash	Net cash flow from operating activities anticipated for the entire year	Anticipated cash flow for the entire year	Anticipated balance (shortfall) in cash	Remedial measure of anticipated cash shortfall
				Investment plan	Wealth management plan
1,623,640	756,056	138,309	2,241,387	`－`	`－`

IV. Impact of major capital expenditure in the most recent year on financial operation:

No significant capital expenditure in 2019.

317

V. The outward investment policies in the most recent year, the major causes leading to the profit or loss and the plans for corrective action and investment plan in the coming fiscal year.

Contents /Descriptions	Share capital	Policies	Major reasons leading to profit/loss	Corrective action	Future investment plans
Land & Sea Capital Corp.	USD 86,318,976	Investment in China according to the operating policies of the board of directors	In 2019, the investment gain recognized came to NT$1,124,585 thousand. Through that company, investment in Zhenjiang Chi Mei Co., Ltd. to acquire 30.4% equity.	Nil	Nil
GPPC Chemical Corporation	NT$542,000,000	Manufacture, processing and sales of impact-resistant polystyrene.	In 2019, the investment gain recognized came to NT$6,317 thousand, primarily as dividend from investment in that company.	Nil	Nil
Videoland Inc.	NT$1,141,324,000	General import and export trade, production of broadcasting & television programs, production, issuance, buys, sales of domestic movie films.	In 2019, the investment gain recognized came to NT$133,080 thousand, primarily as a result of sound profitability	Nil	Nil

VI. Analytical evaluation over risk affairs:

(I) The impact of inflation and change in interest rate and exchange rate upon the Company's profit and loss and the future response measures
Changes in interest rates, exchange rates and inflation

Analytical evaluation over risk affairs: The impact of inflation and change in interest rate and exchange rate upon the Company's profit and loss and the future response measures Changes in interest rates, exchange rates and inflation	Analytical evaluation over risk affairs: The impact of inflation and change in interest rate and exchange rate upon the Company's profit and loss and the future response measures Changes in interest rates, exchange rates and inflation
Expressed in Thousands of New Taiwan Dollars Year Item 2019 (On the grounds of Consolidated Financial Statement) Operatingrevenues 20,468,229 Before tax netprofit 2,740,877 Netprofit and/or loss in foreign exchange (28,741) Ratio of net profit and/or loss in foreign exchange to net operatingrevenues (0.14%) Ratio of net profit and/or loss in foreign exchange to netprofit before tax (1.05%) Interest revenues 102,121 Ratio of interest income to netprofit before tax 0.50% Ratio of interest income to netprofit before tax 3.72% Interest expense 5,990 Ratio of interest expense to net operatingrevenues 0.03% Ratio of interest expense to netprofit before tax 0.22%
Year Item	2019 (On the grounds of Consolidated Financial Statement)
Operatingrevenues	20,468,229
Before tax netprofit	2,740,877
Netprofit and/or loss in foreign exchange	(28,741)
Ratio of net profit and/or loss in foreign exchange to net operatingrevenues	(0.14%)
Ratio of net profit and/or loss in foreign exchange to netprofit before tax	(1.05%)
Interest revenues	102,121
Ratio of interest income to netprofit before tax	0.50%
Ratio of interest income to netprofit before tax	3.72%
Interest expense	5,990
Ratio of interest expense to net operatingrevenues	0.03%
Ratio of interest expense to netprofit before tax	0.22%

(1) Changes in exchange rate

In 2019, the loss in foreign exchange by Grand Pacific and its subsidiaries accounted for

318

0.14% of the net operating revenues and 1.05% of the net profit before tax due primarily to appreciation of New Taiwan Dollars in 2019. Overall in the Group, the revenues and expenditures in foreign exchange were balanced. The Group would, nevertheless, still continually evaluate potential risks in foreign exchange and execute contracts for forward foreign exchanges as the actual requirements may justify so as to evade potential risks in foreign currencies.

(2) Changes in interest rates:

As of December 31, 2019, both Grand Pacific and its subsidiaries had not any bank loans. The Group, nevertheless, maintains very close connection ties with the bank, ready for a potential need. Besides, the Group has set up multiple channels to raise working capitals to minimize the averaged capital costs. In 2019, the total interest expense came to NT$5.99 million, accounting for merely 0.03% of the net operating revenues and 0.22% of the net profit before tax.

(3) Currency inflation:

The commodity price statistical report revealed by the Directorate General of Budget, Accounting and Statistics (DGBAS) of Executive Yuan indicates that the consumer commodity price index counted with Year 2016 as the base (100) got the average commodity price index at 102.55 in 2019 and at 101.98 in 2018, with a slight rise.

In Taiwan in 2019, the commodity prices recorded a stable state. The Company's business operation was unaffected by inflation of currency.

Countermeasures in the future
(1) Here in the Company, the Finance Dept. has maintained very sound and close ties with the foreign exchange departments in all banks and collected updates linked up with changes in foreign exchanges all the time to firmly dominate the trends and updates of foreign exchanges in domestic markets with continued efforts to evaluate foreign exchange related risks. As necessary, the Finance Dept. would execute forward foreign exchange contracts in an attempt to evade potential risks in exchange rates.
(2) Other than close ties and efforts maintained with banks to obtain most optimal possible interest rates, further through multiple channels, the Company has tried to raise working capitals to minimize average operating costs.
(3) Slow inflation is a sign of healthy economic growth. At the present time, the Company is in easy transfer for operating costs and the Company's products is relatively profitable as quite beneficial to the Company. On the other hand, nevertheless, in case of a rapid inflation, the consumers tend to be discouraged from consumption with difficulty to pass on the costs as unfavorable to the Company. At the present time, the company does not need at all to formulate measures to cope with inflation.
(II) The policies on high-risk, highly leveraged investments, fund lending with others, endorsement guarantees and derivatives trading, the main reasons for profit or loss and the future response measures
In 2019, the Company did not at all engage in derivative financial instruments and such high risk, high leverage transactions.
In 2019 in the Company, KK Enterprise Co., Ltd. rendered endorsement/guarantee toward its subsidiary KK Enterprise (Malaysia) Co., Ltd. with facts as enumerated below:

The highest balance of endorsement/guarantee	Ending endorsement/ guarantee balance	Amount of actual expenditures
MYR8,940,000	MYR8,940,000	MYR5,940,000

319

In 2019, the Company did not at all lend fund to others

(III) The R&D plans and estimated investment in R&D expenses in the future

Research & development plan in the most recent year	Current progress	R&D fee to be further invested	Time scheduled to be completed	Major factors of impact leading to future successful research & development
1. Development technology of agglomerated PBL large particle latex 2. PBL small particle latex development technology 3. Expansion-resistant battery material development 4. Development of heat-resistant tough Nylon66 5. Nylon66 plus glass fiber composite development 6. Improvement of ABS background color and dyeing quality 7. Planning Nylon66 compound material blending plant	Pilot test During development During sampling During sampling During sampling Being optimized Being planned	NT$1 million NT$1 million NT$1 million NT$2 million NT$3 million NT$1 million NT$3 million	Aug. 2020 Aug. 2020 Oct. 2020 Aug. 2020 Aug. 2020 Aug. 2020 Oct. 2020	1. Successful technology breakthrough of the bottleneck 2. Successful market development 3. Competitive in market with the volume economic scale 4. High value, unit attribute 5. Free of negative impact upon environment

(IV) The potential impact from a change in important domestic and international policies and laws upon the Company's financial business and the corresponding measures thereof:

As always, the Company is closely watchful of political & economic updates, enactment of major policies and changes in laws. As the actual requirements may justify, the Company assigns dedicated personnel to accept educational & training programs both in-house and outsourced ones. In entire 2019, there was not significant change in at home and abroad policies or legal affairs that might have a significant impact upon the Company.

(V) The impact of technological changes and industrial changes upon the Company's financial business and the corresponding measures

The Company has been closely watching the changes and updates of relevant business lines and assigned dedicated personnel into evaluation and study to look into the potential impact upon the Company's in future development, financial conditions and business operation, and the relevant countermeasures which should be taken: In most recent year, there has not been significant technical changes that might have unfavorable impact upon the Company in financial conditions and business operation.

(VI) The impact of a change in corporate image change upon the corporate crisis management and the countermeasures thereof: Nil
(VII) The benefit anticipated from merger/acquisition (M&A), the potential risks and countermeasures thereof: N/A
(VIII) The benefit anticipated from plant expansion, the potential risks and countermeasures thereof: Nil
(IX) Risks and countermeasures for the concentration of incoming goods or sales: N/A
(X) The impact, risks upon the Company and countermeasures thereof to be incurred by significant transfer or change in equity by directors and supervisors or major shareholders holding more than 10% of the shares: N/A
(XI) Impact of changes in management rights upon the Company, potential risks and countermeasures thereof: N/A
(XII) Litigious, non-litigious affairs: Should expressly enumerate the litigious, non-litigious or administrative litigation affairs whose judgment are final or making in a pending action involving the Company, its directors and supervisors, president, substantial responsible

320

persons, top ten major shareholders with shareholding ratio over 10% and the auxiliary companies in the most recent year and as of the publication date of the Annual Report, where the results might have a significant impact upon the Company's shareholders’ equity or stock prices: Nil

(XIII) Other major risks and countermeasures: N/A

VII. Other significant events: N/A

321

Eight. Special Disclosure

I. Related information of affiliates

(I) Itemized illustration of shareholding facts in long-term investment (12/31/2019)

==> picture [547 x 388] intentionally omitted <==

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Grand Pacific Petrochemical
Corporation
GPPC
Chemical
Corporation
Zhangzhou
Chimei Chemical
Co., Ltd.
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322

(II) Names of affiliated enterprises, dates of incorporations, addresses, paid-in capital and major business lines

(II) Names of affiliated enterprises, dates of incorporations, addresses, paid-in capital and major business lines	(II) Names of affiliated enterprises, dates of incorporations, addresses, paid-in capital and major business lines	(II) Names of affiliated enterprises, dates of incorporations, addresses, paid-in capital and major business lines	(II) Names of affiliated enterprises, dates of incorporations, addresses, paid-in capital and major business lines	(II) Names of affiliated enterprises, dates of incorporations, addresses, paid-in capital and major business lines
Expressed in Thousand NT Dollars and Thousand U. S. Dollars
Names of enterprises	Date of incorporation	Address	Paid-in capital	Major business or production lines
GPPC Chemical Corporation	July 20, 1987	No. 66, Changxing Rd., Luzhu Dist., Kaohsiung City	542,000	1. Manufacture of synthetic resin and plastics. 2. International trade. 3. All business items that are not prohibited or restricted by law, except those that are subject to special approval.
GPPC Investment Corp.	January 03, 1997	10F, No. 1, Sec. 4, Nanking E. Rd., Taipei City	270,000	1. Venture capital investment toward investees. 2. Planning, consultation, participation in business operation & management toward investees. 3. Business management, administration and consultation services to other venture capital investment businesses. 4. Other businesses concerned as approved bythegovernment.
GPPC Hospitality And Leisure Inc.	October 12, 2018	1F, No. 26, Lane 295, Sec. 1, Dunhua S. Rd., Taipei City	40,000	1. Beverages 2. Wines & liquors 3. Restaurants 4. All business items that are not prohibited or restricted by law, except those that are subject to special approval.
GPPC Development Co., Ltd.	August 30, 2018	10F, No. 1, Sec. 4, Nanking E. Rd., Taipei City	130,000	1. Beverages 2. Wines & liquors 3. Restaurants 4. General hotel business 5. All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Goldenpacific Equities Ltd.	May 5, 1995	Flemming House Wickham’s Cay Road Town Tortola BVI	US$75	Reinvestment toward a variety of businesses beyond Taiwan territories as instructed by the parent company based on its businesspolicies.
Land & Sea Capital Corp.	December 4, 2002	Wickham’s Cay Road Town Tortola BVI	US$86,319	Reinvestment toward a variety of businesses beyond Taiwan territories as instructed by the parent company based on its businesspolicies.
Videoland Inc.	February 02, 1982	3F, No. 480, Juiguang Rd., Neihu Dist.,Taipei City	1,141,324	Production of radio & television programs
Videoland Holding Ltd.	June 2, 2016	30 de Castro St. Wickham’s Cay1 RoadTown Tortola BVI	US$10	Reinvestment business
KK Enterprise Co., Ltd.	April 15, 1975	No.1, Ziqiang 3rd Rd., Nantou City,	630,531	Manufacture, wholesale, retail of label paper, release paper and adhesive tapes and synthetic resins.
Zhenjiang Chimei Chemical Co., Ltd.	March 12, 1996	No. 18, Han Feng Rd., Zhenjiang New Area, Zhenjiang City, Jiangsu Province	US$358,850	Manufacture, sale and processing of series products using styrene as raw materials: manufacturing and sales of ABS, AN, PS, etc., storage and transportation of raw materials and finishedproducts
Zhangzhou Chimei Chemical Co.,Ltd.	August 9, 2018	No. SY14, Area A-14-2, Coastal City, Zhangzhou, Fujian Province	CNY$880,000	Manufacture of primary plastics and synthetic resins
KK Chemical Co. Ltd.	March 5, 1991	ROOM 1608-1609 CityPlaza,1-17 Sai Lau	HKD2,500	Reinvestment business

323

		Kok Road,Tsuen Wan,N.T.,
KK Enterprise (Zhongshan) Co., Ltd.	November 2, 1991	No.81, Jucheng Avenue East, Xiaolan Town, Zhongshan City, GuangdongProvince	HKD12,300	Label paper, release paper and adhesive tape business
KK Enterprise (Kunshan) Co., Ltd.	December 3, 2001	No. 568, Gucheng Road, Bacheng Town, Kunshan City,Jiangsu Province	USD6,100	Label paper, release paper and adhesive tape business
KK Enterprise (Malaysia) Co., Ltd.	November 9, 2007	2576LRG. PERUSAHAAN 10, PRAI IND. EST., 13600, PRAI PENANG, MALAYSIA.	RM2,400	Label paper, release paper and adhesive tape business
Dragon King Inc.	February 9, 2006	PORTCULLIS TRUSTNET CHAMBERS, P.O.BOX 1225,APIA,SAMOA	USD100	Reinvestment business

(III) Presumed into control or auxiliary relationship.

The Company proves free of control or auxiliary relationship presumed under Article 369~3 of the Company Act.

(IV) Business lines covered under the overall affiliated enterprises

Affiliated enterprises	Business lines	Division of labor in business transaction
GPPC Chemical Corporation	Manufacture of synthetic resin and plastics, international trade; All business items that are not prohibited or restricted bylaw,except those that are subject to special approval.	Nil
GPPC Investment Corp.	Reinvestment toward a variety of businesses beyond Taiwan territories as instructed by the parent company based on its businesspolicies.	Nil
GPPC HospitalityAnd Leisure Inc.	Cateringbusiness	Nil
GPPC Development Co.,Ltd.	Cateringbusiness,hotel business	Nil
Goldenpacific Equities Ltd.	Reinvestment toward a variety of businesses beyond Taiwan territories as instructed by the parent company based on its businesspolicies.	Nil
Land & Sea Capital Corp.	Reinvested in ZhenjiangChimei Chemical Co.,Ltd.`。`	Nil
Videoland Inc.	Production of radio & televisionprograms	Nil
Videoland HoldingLtd.	Investment business	Nil
KK Enterprise Co., Ltd.	Manufacture, wholesale, retail of label paper, release paper and adhesive tapes and synthetic resins.	Nil
Zhenjiang Chimei Chemical Co., Ltd.	Manufacture, sale and processing of series products using styrene as raw materials: manufacturing and sales of ABS, AN, PS, etc., storage and transportation of raw materials and finishedproducts	Nil
Zhangzhou Chimei Chemical Co.,Ltd.	Manufacture ofprimary plastics and synthetic resins	Nil
KK Chemical Co. Ltd.	Investment business	Nil
KK Enterprise (Zhongshan) Co., Ltd.	Manufacture of label paper, release paper and adhesive tapes and synthetic resins.	Nil
KK Enterprise (Kunshan) Co., Ltd.	Manufacture of label paper, release paper and adhesive tapes and synthetic resins.	Nil
KK Enterprise (Malaysia) Co., Ltd.	Manufacture of label paper, release paper and adhesive tapes and synthetic resins.	Nil
Dragon KingInc.	Investment business	Nil

324

(V) Information of directors, supervisors, and President of affiliates

Expressed in Shares; %

					Expressed in Shares; %
Company Name	Title	Name or Representative	Number of shares held	Shareholding ratio	Remark
GPPC Chemical Corporation	Chairman	Pin ChengYang	54,200,000 shares	100%	Legal Representative of Grand Pacific Petrochemical Corporation
	Director	Chia Hsiung Tseng	54,200,000 shares	100%
	Director	Jen Chieh Liang	54,200,000 shares	100%
	Supervisor	Hsi Hui Huang	54,200,000 shares	100%
	President	Jen Chieh Liang	`－`	`－`	`－`
GPPC Investment Corp.	Chairman	Hsi Hui Huang	22,032,000 shares	81.6%	Legal Representative of Grand Pacific Petrochemical Corporation
	Director	Pin ChengYang	22,032,000 shares	81.6%
	Director	Chen MingChou	22,032,000 shares	81.6%
	Supervisor	ChingFu Chen	22,032,000 shares	81.6%
	President	Hsi Hui Huang	`－`	`－`	`－`
GPPC Hospitality And Leisure Inc.	Chairman	Hsi Hui Huang	4,000,000 shares	100%	Legal Representative of GPPC Investment Corp
	Director	LingChu Chen	4,000,000 shares	100%
	Director	Mei Yu Shen	4,000,000 shares	100%
	Supervisor	ChingFu Chen	4,000,000 shares	100%
GPPC Development Co., Ltd.	Chairman	Tzu Yi Cheng	3,000,000 shares		Legal Representative of Videoland Inc.
	Vice Chairman	Te Hisn Chiu	5,000,000 shares		Legal Representative of CDIB Venture Capital Corporation
	Director	Hsi Hui Huang	3,000,000 shares		Legal Representative of Videoland Inc.
	Director	Chen Hsun Lin	3,000,000 shares
	Director	Chih Chien Yen	5,000,000 shares		Legal Representative of CDIB Venture Capital Corporation
	Director	Yu Shan Lin	5,000,000 shares
	Supervisor	Hsiao Chi Tsai	-
Goldenpacific Equities Ltd.	Chairman	Hsi Hui Huang		100%	Legal Representative of Grand Pacific Petrochemical Corporation
	Director	Pin ChengYang		100%
	Director	Chen MingChou		100%
Land & Sea Capital Corp.	Director	ChungYingKu		100%	Legal Representative of Grand Pacific Petrochemical Corporation
	Director	Pin ChengYang		100%
	Director	Hsi Hui Huang		100%
Videoland Inc.	Chairman	Chun Wang	3,955,000 shares	3.47%	Legal Representative of Chen Ho Co.,Ltd.
	Director	Tzu Yi Cheng	3,955,000 shares	3.47%
	Director	Pin ChengYang	71,093,494 shares	62.29%	Legal Representative of Grand Pacific Petrochemical Corporation
	Director	Hsi Hui Huang	71,093,494 shares	62.29%
	Director	ChingFu Chen	71,093,494 shares	62.29%
	Supervisor	SungChou Wang	1,130,197 shares	0.99%	Legal Representative of HongFu Co.,Ltd.
	Supervisor	Shu Chu Chang	1,130,197 shares	0.99%
	President	Tzu Yi Cheng	`－`	`－`	`－`
Videoland Holding Ltd.	Director	Ke Chieh Wang		100%	Legal Representative of Videoland Inc.
	Director	Tzu Yi Cheng		100%
	Director	Hsi Hui Huang		100%
Zhenjiang Chimei Chemical Co., Ltd.	Chairman	LingYu Chao	US$256,720	69.6%	Legal Representative of Jentra Investment Limited Liability Company
	Executive Director	Chien Jen Chao	US$256,720
	Director & President	Liang Yi Hung	US$256,720
	Director	Yao ChungSu	US$256,720
	Director	Yao Ching Wang	US$256,720	69.6%	Legal Representative of Jentra Investment Limited LiabilityCompany
	Director	Pin ChengYang	US$112,130	30.4%	Legal Representative of Land & Sea Capital Corp.
	Director	Chen MingChou	US$112,130
	Supervisor	Pi Chi Lin	US$249,760	69.6%	Legal Representative of

325

Company Name	Title	Name or Representative	Number of shares held	Shareholding ratio	Remark
					Jentra Investment Limited LiabilityCompany
	Supervisor	Hsi Hui Huang	US$112,130	30.4%	Legal Representative of Land & Sea Capital Corp.
Zhangzhou Chimei Chemical Co., Ltd.	Chairman	Chien Jen Chao	CNY$612,480	69.6%	Jumping Holding Co. Ltd. (Samoa)
	Director	LingYu Chao	CNY$612,480
	Director & President	Yao Chung Wu	CNY$612,480
	Director	LiangYi Hung	CNY$612,480
	Director	Kuei Kuan Ma	CNY$612,480
	Director	Chia Hsiung Tseng	CNY$267,520	30.4%	Legal Representative of Land & Sea Capital Corp.
	Director	Wen Hui Lin	CNY$267,520
	Supervisor	Pi Chi Lin	CNY$612,480	69.6%	Jumping Holding Co. Ltd.(Samoa)
	Supervisor	Ching Fu Chen	CNY$267,520	30.4%	Legal Representative of Land & Sea Capital Corp.
KK Enterprise Co., Ltd.	Chairman	Po YingYen	7,934,363 shares	15.73%	Legal Representative of Grand Pacific Petrochemical Corporation
	Director	Pin Cheng Yang	7,934,363 shares	15.73%
	Director	Hsi Hui Huang	17,045,682 shares	33.79%	Legal Representative of Videoland Inc.
	Director	PengWen Chen	17,045,682 shares	33.79%
	Director	Fu Mei Lee	967,128 shares	1.92%
	Director	Chin Hua Lee Chen	2,198,913 shares	4.36%
	Director	Su Hua Chen	376,959 shares	0.75%
	Supervisor	Sung Chou Wang	27,681 shares	0.05%	Legal Representative of Chung Kwan Investment Co.,Ltd.
	Supervisor	YingHungLee	371,720 shares	0.74%
	President	PengWen Chen	`－`	`－`	`－`
KK Chemical Co. Ltd.	Chairman	Po YingYen	HK$1,247	49.9%	Legal Representative of KK Enterprise Co.,Ltd.
	Director	Jui Fa Wang	HK$1,247
KK Enterprise (Zhongshan) Co., Ltd.	Chairman	Po YingYen	HK$6,150	50%	Legal Representative of KK Enterprise Co., Ltd.
	Director	PengWen Chen	HK$6,150
	Director	YungNan Chou	HK$6,150
	Director	Jui Fa Wang	HK$6,150
	Director	TsungMin Wang	HK$6,150
	President	Jui Fa Wang	HK$6,150
KK Enterprise (Kunshan) Co., Ltd.	Chairman	Po YingYen	US$6,100	100%	Legal Representative of KK Enterprise Co., Ltd.
	Director	PengWen Chen	US$6,100
	Director	YungNan Chou	US$6,100
	Director	Jui Fa Wang	US$6,100
	Director	Wei ChungYang	US$6,100
	Supervisor	Mei LingLan	US$6,100
	President	Jui Fa Wang	US$6,100
KK Enterprise (Malaysia) Co., Ltd.	Chairman	Po YingYen	MYR$1,680	70%	Legal Representative of KK Enterprise Co., Ltd.
	Director	PengWen Chen	MYR$1,680
	Director	Mei LingLan	MYR$1,680
	Director	Chih Fan Tsai	MYR$1,680
	Director	Ping Chang Huang	MYR$720	30%	Legal Representative of Chailease Resources Technology Co., Ltd.
	Director	MingTai Lee	MYR$720
	Director	Chia ChengLiu	MYR$720
Dragon King Inc.	Chairman	Po Ying Yen	US$100	100%	Legal Representative of KK Enterprise Co.,Ltd.

326

(VI) Affiliates’ Business Operating Highlights

			Expressed in Thousands of New Taiwan Dollars	Expressed in Thousands of New Taiwan Dollars	Expressed in Thousands of New Taiwan Dollars	Expressed in Thousands of New Taiwan Dollars	Expressed in Thousands of New Taiwan Dollars	Expressed in Thousands of New Taiwan Dollars
Company name	Paid-in capital	Total assets	Total liabilities	Net worth	Operating revenues	Operating income	Current profit (loss) (After-tax)	EPS (NT$) (After-tax)
GPPC Chemical Corporation	542,000	815,668	74,189	741,479	1,801,508	50,593	71,268	1.31
GPPC Investment Corp.	270,000	312,707	90	312,617	6,423	(10,660)	(10,560)	(0.39)
Goldenpacific Equities Ltd.	2,257	666,519	1,378	665,141	11,063	10,687	10,687	-
Videoland Inc.	1,141,324	6,807,616	770,063	6,037,553	2,148,879	248,684	213,644	1.87
KK Enterprise Co.,Ltd.	504,425	1,202,370	320,232	882,138	941,003	30,628	33,473	0.57
Land & Sea Capital Corp.	2,587,843	8,549,159	1,592	8,547,567	1,171,145	1,139,766	1,139,766	-
KK Chemical Co. Ltd.	9,623	55,942	47,400	8,542	0	(150)	(144)	-
KK Enterprise (Zhongshan) Co., Ltd.	47,343	198,565	68,520	130,045	293,891	11,876	11,819	-
KK Enterprise (Kunshan) Co., Ltd.	182,878	247,298	50,766	196,532	246,381	(6,410)	(7,569)	-
KK Enterprise (Malaysia) Co., Ltd.	16,879	104,211	24,062	80,149	152,982	13,502	9,911	-
Dragon KingInc.	2,998	6,604	1,989	4,615	5,807	(34)	(31)	-
Zhenjiang Chimei Chemical Co., Ltd.	11,058,123	31,834,928	11,410,044	20,424,884	63,912,288	5,328,160	4,070,804	-
GPPC Hospitality And Leisure Inc.	40,000	33,422	4,484	28,938	3,694	(10,744)	(10648)	(2.66)
Zhangzhou Chimei Chemical Co.,Ltd.	3,788,400	4,023,078	281,707	3,741,371	0	(49,528)	(49,528)	-
GPPC Development Co., Ltd.	130,000	128,837	50	128,787	0	(1,188)	(1123)	(0.40)

Note: Where an affiliated enterprise is a foreign firm, the relevant amounts should be converted into New Taiwan Dollars at exchange rate quoted on the date of updating forms .

II. Facts of securities in private placement conducted in the most recent year and as of the publication date of Annual Report: Nil

327

III. Facts of Company's share certificates held and disposed by the subsidiaries in the most recent fiscal year and as of the publication date of the Annual Report:

			Expressed in thousand NT Dollars;thousand shares,%	Expressed in thousand NT Dollars;thousand shares,%	Expressed in thousand NT Dollars;thousand shares,%	Expressed in thousand NT Dollars;thousand shares,%	Expressed in thousand NT Dollars;thousand shares,%	Expressed in thousand NT Dollars;thousand shares,%	Expressed in thousand NT Dollars;thousand shares,%	Expressed in thousand NT Dollars;thousand shares,%	Expressed in thousand NT Dollars;thousand shares,%
Same of communications	Paid-in capital	Capital source	Shareholdin g ratio by the Company	Date of Procedures for the acquisition or disposal	Number of shares & amount acquired	Number of shares & amount disposed of`	Profit and/ or loss in investment	Shares & amount held as of April 14, 2020	Pledge	Amount of endorsement/ guarantee by the Company to subsidiary	Loan by the Company to subsidiary
GPPC Chemical Corporation	542,000	Own capital	100.00	0	0			Grand Pacific common shares 247,000 shares, NT$3,625,000 Grand Pacific preferred shares 1,776,000 shares NT$54,434,000	0	0	0

IV. As supplementation as necessary: Nil

Nine. In the most recent year and as of the publication date of the Annual Report, events with significant impact upon shareholders’ equity or stock prices: Nil

328

AI assistant

GPPC — Annual Report 2019

51770_rns_2020-06-22_54b6f7b6-92ee-4b14-9c59-8f12ff65a6fb.pdf

ANNUAL REPORT 2019

2. Address and telephone of head office, branch and factory

4. Name, address, telephone and website of stock transfer agent

－ Policy of Quality of － Grand Pacific

Table of contents

One Report to Shareholders

I. 2019 Business Report:

(II) R&D Status

II. Business Plan Summary for 2019:

Hydrogen (H2)

Steam and Electricity

5.

III. Future company development strategies:

IV. External competition environment, regulatory environment and overall business environment impact:

Two. Company Profiles

I. Date of incorporation: September 25, 1963

II. Evolution history of the Company:

Three. Report on Corporate Governance

I. Organization System

Organization chart of Grand Pacific Petrochemical Corporation

II. Information on Directors, Presidents, Senior Vice Presidents, Vice Presidents and Managers of Each Department and Branch

(I) Information on Directors (1)

Major shareholders of juristic person shareholders

Key Shareholders Where the Key Shareholders Are Juristic Persons

(II) Information on President, Senior Vice Presidents, Vice Presidents and the Mangers of Each Department and Branch

III. Remuneration to Directors (Including Independent Directors), President and Senior Vice President in the Latest Year

(1-2) Remuneration to directors (including independent directors)(Summarizing the coordination scale and the methods to disclose names):

Remuneration Scale Table

Remuneration Scale Table

IV. Overview on Performance of corporate governance:

(2) Implementation of the Board of Directors Evaluation:

(II) Performance of Audit Committee

The performance of corporate governance and the status on discrepancy and reasons in relation to the Corporate Governance Best Practice Principles for TWSE/GTSM Listed Companies

(V) Fulfilment of corporate social responsibility

evaluation organization.

2. Responsibility

(II) Environmental protection, health, and safety

Good use of resources, prevention of pollutions, constant improvement

Deployment of Environmental Management System and Acquisition of Certifications

Training in environmental management

(III) Energy efficiency schemes and greenhouse gas management

(Energy Management Guidelines)

Being a good neighbor

Note 1: Brief explanations required whether Yes or No is ticked for facts of performance.

(VI) Facts about the Company’s implementation in ethical corporate management and the measures so adopted:

Ethical Corporate Management

1. The Company's organizer, co-organizer(s) in charge of “significant information”

2. The Company's handling procedures toward significant internal information:

DECLARATION ON INTERNAL CONTROL SYSTEM OF A LISTED PUBLIC COMPANY Indicating valid in both design and implementation

Summary on Resignation and Discharge of People Concerned

V. Information on Certified Public Accountant fees

Scale of certified public accountant fees related information

(II) Changes in equity of preferred shares

IX. Information of top shareholders ranking among the top ten, as related parties, spouses, blood relatives within the second degree of kinship to each other:

Four. Facts of Capital Raising

I. Capital and Shares

(I) Source of Share Capital

(II) Structure of shareholders

1. Common shares

2. Preferred shares

(III) Facts of disperse of shareholding

Facts of disperse of shareholding

1. Common shares

2. Preferred shares

II. Issuance of corporate bonds: The Company does not issue corporate bonds at the moment.

III. Issuance of preferred shares:

IV. Issuance of overseas deposit receipt certificates (DRC): Nil

VI. New shares to employees with restricted rights: Nil

VIII. Implementation of capital utilization plans: Nil

Five. Business Performance in Brief

I. Contents of business operation

II. Market and production and sales overview:

1. Sales (provided) regions of major products (services)

Major suppliers over the past two years

 . GPPC Group:

 . Individual financial statement:

Major customers for sales over the past two years

GPPC Annual Report 2019

`－` Policy of Quality of `－` Grand Pacific