LONG BON — Annual Report 2020

Sep 8, 2021

Code ： 2514

LONG BON Corporation

2020 Annual Report

Notice to readers

This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.

Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw LONG BON Annual Report is available at: http://www.longbon.com.tw Printed on May 20, 2021

I. Letter to Shareholders 1. Result of Operation for 2020......................................................................1 2. Annual Operation Plan for 2021....................................................................1 3. Future Development Strategy.................................................................................................. 4 4. Related Response to the Impact from the Overall Economy, Policies and Regulations, and Market Supply and Demand ................................................................................................... 4 II. Company Profile 1. Date of Incorporation........................................................................................... 7 2. Company History ………................................................................................... 7 III. Corporate Governance Report 1. Organization…….................................................................................................................... 9 2. Directors, Supervisors, General Manager, Deputy General Manager, Associates, Departments and Branches Officer Information……………………………….…………...11 3. Remuneration to Directors, Supervisors, Presidents and Vice Presidents in Recent Annual Years...................................................................................................................................... 16 4. Corporate Governance Status………………………………………................. 21 5. Information regarding Independent Audit Fee……………….…………..……..52 6. Information on Alteration of the Company’s Independent Auditor..................…52 7. The employment of the Company’s Chairman, General Manager, Financial or Accounting Manager with the Firm of the Auditing CPA or Its Affiliated Businesses in the Past Year…………………………………………………............................................................52 8. Changes in Shareholding and Equity Pledge of Directors, Supervisors, Managers and Shareholders Holding More Than 10% of the Company’s Shares in the Past Year and as of the Date of Publication of the Annual Report……………………………..………………..53 9. Information on the top Ten Shareholders and their related Parties, Spouse, First and Second-degree Relatives………………………………………………………………………...…..53 10. The Total Number of Shares and Total Equity Stake Held in Any Single Enterprise by the Company, Its Directors and Supervisors, Managers, and Any Companies Controlled Either Directly or indirectly By the Company……………………………………………………..55 IV. Capital Overview 1. Capital and Shares………………………………………………………..…….………...…56 2. Corporate Bonds…………………………………………………………………….………67 3. Preferred Shares ….………………………………..…………………….…………………68 4. Global Depository Receipts……………………………………………...………………....68 5. Employee Stock Options Plan…………………………………………..……………..........68 6. Issuance of Restricted Stock for Employees………………………....………...…………...68 7. Issuance of New Shares for Merger, Acquisition or Exchange of Other Companies’ Shares.……...………………………………………..……………………………….……..68 8. Financing Plans and Implementation……......................................................……………...68 V. Operational Highlights 1. Business Activities………………………………………………….………………………69 2. Market and Sales Overview………………………………….……..…….……..………….75 3. Employee Information…..……………………………………….………………………....80 4. Environmental Protection Expenditure……….…………………….……….……………...80 5. Labor Relations………………………………………..………………...……..………...…85 6. Important Contracts……………………………………..……………………………..……88 VI. Financial Information 1. Five-Year Financial Summary………………………………………..……….…………….90 2. Five-Year Financial Analysis………………………………………..………….…………..94 3. Supervisors’ or Audit Committee’s Report in the Most Recent Year….……………………99 4. Latest Consolidated Financial Statements, and Independent Auditors’ Report…………...100 5. Latest Individual Financial Statements and Independent Auditors’ Report……………….100 6. The Impact on the Company's Financial Status as the result of the Company and Its

Affiliates’ encounter of Financial Difficulties in the Past Year and as of the Date of Publication of the Annual Report………………………………..........................……….100

VII. Review of Financial Conditions, Operating Results, and Risk Management 1. Financial Status…………………………………………………………..………………..101 2. Financial Performance…………………………………………………….……….………102 3. Analysis of Cash Flow……………………………………..…………….………………..103 4. Impact of Major Capital Expenditure in the Past Year on the Financial Status…………...104 5. Re-investment Policy in the Past Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year…………...………………………...104 6. Analysis and Assessment of Risk Management…………………………………..………104 7. Other Important Matters…………………………………………….……………...……..106 VIII. Special Disclosure 1. Summary of Affiliated Companies…………………………………………….….……….107 2. Private Placement Securities in the Past Years and as of the Publication Date of the Annual Report…………………………………………………..………………….………………112 3. The Company’s Shares Held or Disposed of by Affiliates in the Past Year and as of the Date of Publication of the Annual Report ………………………………….…………………..112 4. Other Necessary Disclosures…………………………………………….………………...112 IX. Events with a material impact on shareholders' rights and interests or securities prices as specified in Article 36, Item 3, paragraph 2 of the Securities Exchange Act, in the past year and as of the date of the publication of the annual report …………….…….112

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I. Letter to Shareholders

1. 2020 Business Results

(1) Results of Operating Implementations

Albeit under the impact of COVID-19 in 2020, the Taiwanese housing market showed its strength in combatting the influences by such pandemic under the sufficient funds and lower interest rates. The Company sustains its great spirit of perseverance and continues in enhancing operating profits as well as taking the lead in stabilizing its foundation in the real estate investments, gradually acquiring lands for urban unsafe and old buildings in Wanhua and Xinyi Districts and contributing funds for integration of the updated urban pattern; meanwhile, with full effort in maximizing profits for the shareholders, we have made the urban renewal project on Xiyuan Rd. reaching an integration rate near 96%, while the building permit for Neihu land project has been acquired and is under intense planning on construction commencement matters, and the Huanhe S. Rd. project has obtained approval for reconstructions of unsafe and old buildings, thrusted filing for application of building permit by the end of the year; in addition, the Company has in recent years gradually expanded its reach in different business scopes via re-investments from the current construction business to core businesses engaging fields of construction, funeral service and professional investments, making a diversified development by gradually transforming into an industrial holding company at a stable pace. With the greatest endeavor of all colleagues, we cohere with the original intentions, continuously moving toward the management goal with firm growth in both revenue source and profitability. (2) 2020 Financial Income and Profitability Analysis

In 2020, the Company has attained a consolidated operating income at NTD 10,776,324 thousand, up approx. 15.93% compared to that of 2019 at NTD 9,295,613 thousand; in terms of profitability, the profit attributable to the parent company is NTD 1,100,637 thousand, along with EPS after tax at NTD 3.05 and RoE at 28.59%.

2. Overview for 2021 Business Plans

Prospecting the year 2021, although the COVID-19 pandemic is under control in Taiwan, owing to continued outbreak of pandemic overseas without an ease combined with chaos in circumstances after US Presidential elections as well as escalated Sino-US Trade War, along with circumstances containing sustained low rate in short-term financing and easing of capital, real estate remains one of the main investment methods adopted by corporate capitals for hedging; however, in consideration of the ongoing rise of pandemic, tardy pace for opening of global economy and concerns of housing market by competent authorities, the housing market in 2021 remains in high degree of uncertainty and shall have prudence over all engagements.

The domestic office buildings market is expected to gain a ongoing and gentle growth, and, in terms of industrial plants, the product in greatest shortage on the market in recent years is the plants, especially the plants or industrial lands at a fair price, which may be utilized as a thrust for the Company in promoting the plant office in Neihu, as a majority of construction companies have gradually taken their comeback in the plant office market. The Company will, in combination with government policies, make investments and assessments over urban renewal and reconstruction of unsafe and old building projects with premium locations, adjacency to MRT stations or major constructions and high level of integration which are situated in north to Taichung, with development categories mainly in residences, plant offices and office buildings, while incorporating the business opportunities

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in senior citizen demographics and extending the reach of management sectors to the concept of diversified management including construction, funeral services, Yin Zhai (residences with occurrence of non-natural deaths) development, senior citizen residences and recreation industry, etc., and integrate group resources for creation of a multi-win situation, furthermore going toward the management goal of stable growth in revenue and profits.

• (1) 2021 Management Guidelines

The Company’s 2021 operation plans concerning business sectors including real estate rental and sales development and management and investment in real estate development the asset office, stock exchange market investment and re-investment management by finance office, Reiju Construction, Lobo Enterprise Life Services, Baohui Development (Donghua Golf Course), Longhui Development (Beihai Golf Course and funeral and interment lands), etc., are described as follows:

1. Business of Asset Office

2. (1) Property Sale Plans

It is expected that the Company will draft plans to rejuvenate the Company’s existing realties, with continued sale of remnant houses and parking spaces situated in Taichung and newly completed project of Changan Juan situated in Taipei, generating an expected annual revenue through sales at NTD 192,573 Thousand.

• (2) Rental Plans

In 2021, rent revenue is expected to be heightened by the addition of rentals of office on Minquan E. Rd., façade advertisements at Huanhe S. Rd. project, Donghua Golf Course, etc. With other properties in full occupancy into consideration, the annual rent revenue is expected at NTD 80,275 Thousand, with forecasts of rent revenue distribution as shown in the following table:

Table for 2021 Rent Revenue Forecasts by Properties

Unit: NTD Thousands

Asset Details	Annual Total
TWTC International Trade Building	5,995
Dengfeng21	6,337
Project at Ruihu St., Neihu	1,514
Daya ParkingSpaces	3,075
Minquan E. Rd. Project	5,210
Xiyuan Rd. Project	840
Donghua Golf Course	57,154
Others (Park Lane, Advertisement of Huanhe S. Rd., etc.)	150
Total	80,275

• (3) Domestic Real Estate Investment Plans

• a. In response to needs orientations by the future real estate markets, it is expected that the Company will acquire land and realty in redevelopment areas, with adjacency to material transportation and construction projects or in areas with complete livelihood mechanisms within Taiwanese urban regions through investment, purchase or tender for development and construction of houses for sales.

• b. In addition to purchase of lands for project constructions corresponding to

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self-construction purposes, concerning the cases in essential regions north to Central Taiwan including Taipei City, New Taipei City and Taichung City, the Company may make case-by-case investments or engage in expediting reconstruction of unsafe and old houses through investment or joint construction to obtain investment efficacy.

  - c. In response to diversified management in the future, the Company combines group resources and has planned to engage in recreation industry circle golf course operation, and intends to engage in _Ying Zhai_ real estate investment or development market by seeking _Ying Zhai_ areas or targets around the nation as well as conducting planning, development or integration.

• (4) Investment Plans for Existing Real Estate

  • a. Urban Renewal of Xiyuan Rd., Wanhua Dist. Taipei City: The estimated total development schedule for this project is approx. 6.5 years, which involves operation matters for urban renewal business and contingency plans, as well as integrated execution matters on owners of properties within urban renewal scope.

  • b. Taichung Dakeng Project: In addition to effective control over the current condition of properties, the Company also cooperates with public sector in conducting the overall review and revision procedure for Specific District of Taiching Dakeng Scenic Area, while actively participating in communications upon amendments to relevant laws and regulations as well as review meetings, along with concurrent conduct of predecessor activities prior to obtaining of development permit and planning toward short-term activation strategies.

  • c. Urban Renewal Project in Chengde Rd., Datong Dist., Taipei City: the urban renewal plans for this project has been approved, and the Company will continue in conducting applications for subsequent demolition license and building permit following signings of joint-construction contracts, and will consider the pre-sale case by case in cooperation with the implementer when appropriate.

  • d. Taipei Neihu Land Project: the building permit has been acquired for this Project, and the Company will conduct relevant declarations on construction start procedures within the validity of building permit, and concurrently contact plant offices for potential investors.

  • e. Project of Reconstruction of Unsafe and Old Buildings at Huanhe S. Rd., Wanhua Dist., Taipei City: the letter of approval for the plan of reconstruction of unsafe and old buildings has been obtained, and the Company will subsequently apply for building permits within statutory period and declare the commencement of construction.

  • f. Pre-Sale of Taipei Changan Juan Project: The Company makes regular tracking over construction progress and review reports of building management companies, furthermore conducting sales after project completion.

• (2) Sales Forecast and Basis

With reference to growth of various businesses and expansion of market scale, the revenue forecasts for various businesses in 2021 are as follows:

1. Rental, sales and development of Asser Office: it is estimated that the total sales revenue from real estate will be NTD 192,573 thousand; the estimated total rent revenue from rental of real estate is NTD 80,275 thousand. The aggregate of the forecasted annual revenue from the preceding two projects is totaled at NTD 272,848 thousand.

2. (3) Important Production and Promotion Policies

3. Business of Asset Office

4. (1) Real Estate Rent and Sale Business

   • a. Make posts of properties intended for rental or sales utilizing the specialized websites

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for real estate rental and sales e.g. ―591‖ rental website or bulletin boards at communities, with timely update and managements to increase exposure for inquiries and opportunities in rental or sales.

• b. Facilitating deals of realties through referral by floor management personnel of projects and local realty agencies, or raising commission percentage of rentals.

• (2) Domestic Real Estate Investments

• a. The Company will obtain land projects or buildings for development or operation through proactive development, purchase by referencing information by realtors and landlords, or joint or case investments, as well as public tenders by governmental organs or other institutions.

• b. Utilizing the niche as a public company, the Company obtains opportunities for land purchase, cooperation and joint construction through information or targets proactively provided by landlords, seeking real estate investments and profiting.

• c. Combining the Group’s professional integration and management capabilities, the Company will make dual progression in Yang Zhai and Ying Zhai real estate markets, exerting the synergy of development or integration.

3. Future Company Development Strategies

The Company will center at businesses of real estate development and rental and sales managements for relevant properties, and engages in investment and finance, construction, Ying Zhai real estate businesses and operation of golf courses through re-investments; in the future, the Company will, through the development of aforesaid businesses, enable the future operation of the Company to attain the sustainable management goal with growth, stability and profiting; the development plans for related businesses are itemized as follows:

(1) Development of Real Estate Business

1. Conducting integration and coordination of lands within the scope of peripheral statutory scale and scope, attaining the efficacy of developing urban renewal land units or scope of unsafe and old buildings.

2. Investing in purchase or tendering of land and realty in redevelopment areas or in area with complete livelihood mechanism situated in Urban regions in Taiwan for use of developing and building houses for sale is expected.

3. Feasibility in promotion of investing in joint construction of projects in Greater Taipei.

4. Investing in urban renewal and reconstruction of unsafe and old buildings in focal and essential areas in Taipei City along with the obtaining of complete investment blocks integrated through the exerting of professional consultants to exert a high productivity and profits for urban renewal.

5. In response to diversified management in the future, the Company combines group resources and has planned to engage in recreation industry and golf course operation, and intends to engage in Ying Zhai real estate investment or development market by seeking Ying Zhai areas or targets around the nation as well as conducting planning, development or integration.

6. Assessing feasibilities of tender cases by public sectors and tendering to make successful obtaining of real estate for project promotion, generating operating revenue for the Group.

4. Impacts and Countermeasures under Macroeconomy, Policies and Regulations, and Market Supply and Demand Circumstances

(1) Macroeconomy

Although Taiwan's overall economy was ravaged by COVID-19 in 2020, under effects of abundant funds and policy imposing low interest rates, the country demonstrated strong

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capabilities against the pandemic, netting an economic growth rate at 1.56% and CPI rate at -0.19%. Taiwan’s housing market is relatively stable internationally, with decent performance in terms of prices and capacity. As economies around the globe continue to lower their economic indicators and their unemployment rates continue to grow, it is evident that the global economy and prosperity will take longer to recover; on the contrary, owing to the booming demand of the technology manufacturing industry in response as the world enters into the 5G era, Taiwan’s ginormous semiconductor industry is inevitably benefitted directly, hence, numerous professional research institutions have made unanimous predictions that Taiwan’s economic growth rate in 2021 is expected to surpass 3%.

(2)

In addition, as the US-Sino Trade conflict escalates, causing the profound influences to global economic industry chain, many Taiwanese business owners have gradually returned to Taiwan, furthermore resulting in a significant increase in the volume of industrial land and commercial real estate transactions, becoming the main driving force in the housing market in H2 2020, and real estate prices have begun to rebound slowly. Policies and Regulations

In recent years, the government has endeavored to promote a sound housing market policy, including the formulation and amendment to policies on the reconstruction of the unsafe and old buildings and related laws and regulations. Through separate acts for expediting the renewal of old and unsafe buildings and the urban renewal process, establishment of a dedicated agency " National Housing and Urban Regeneration Center (HURC)" and the inauguration of the Financial Union Urban Renewal Service Center officially, the country has officially initiated the Urban Renewal 2.0 for facilitation of policy execution efficacies. The projects of reconstruction of unsafe and old houses and urban renewal have doubled year by year at an average of 40 projects per year, and reached a staggering number at 956 projects between January and August in 2020. The Company has proposed the three principles of "Easy Integration, Clear Rewards, and Accelerated Review" to attain a triple-win for the civilians, practitioners and the industry.

(3)

In addition, according to statistics from the Directorate General of Budget, Accounting and Statistics of the Executive Yuan, Taiwan has officially become an aging age society in 2019 and is expected to become a hyper-aging society in 2026. As a result, to solve the potential social issues derived from aging population, the government has launched Long-Term Care 2.0 in 2018 with extended service items, fees subsidized and eligible groups as a countermeasure, while providing project financing to encourage the industry to invest in long-term care funds. In 2019 years, the government took advanced measures to lower the threshold of return on real estate investment in the life insurance industry to 1.095%, allowing the insurance industry to contribute to senior citizen residences and daycare of aged population beyond the scope of Institutional Long-Term Care Juridical Entities Act. Supply and Demand of Real Estate Market

Albeit the global economy has been hit by the COVID-19 pandemic, due to relatively successful pandemic prevention, and favorable factors of low-profit circumstances, domestic banks muscling for mortgage business opportunities as well as continued transfer of funds to the housing market, Taiwanese housing market, except for the sluggish transactions from January to July in 2020 due to the horrors over pandemic and the customs refraining from walk-through of houses in the Ghost Month, recorded an ongoing growth compared to 2019 in total sales and ownership transfers of houses in the Six Municipalities of Taiwan, and the total house ownership transfers of the entire year is expected to surpass the 300,000 houses recorded in the previous year, heading for the record-high transaction volume in the recent six years.

In terms of industrial land, plant offices, and commercial real estate markets, due to the intensification of the Sino-US Trade War and the return of Taiwanese business owners, construction companies or enterprises contribute to the significant growth in transaction volumes for their ongoing purchases of lands, plant offices and commercial real estate. In Q3 2020, a majority of the land transactions made are in Taichung and New Taipei City,

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with a total transaction value of US$31.4 billion, while a record-breaking US$68.4 billion in transaction volume has been achieved in commercial real estate dealings. The current price for office realties in Taipei is marked at an average of NTD 852 thousand per Ping, with a rent capitalization rate at 2.54%. Construction and life insurance companies remain the contending for lands with raised stakes, and numerous developers also involved in the craze for office building and plant office houses, which nearly 20 office buildings are expected to be completed in construction within the next seven years. The average price for Neihu Technology Park market falls at NTD 527 thousand per Ping, yielding a rent capitalization rate at 2.71%. Faced with scarce supply in office buildings and sustained backflow of production forces of advanced technology companies, as well as severe shortage in high-end office buildings at downtown, Neihu Technology Park and Nankang will become the popular destinations for relocating enterprises. (4) Conclusion and Countermeasures

Even if the COVID-19 is under effective control in Taiwan, due to the ongoing outbreak of pandemic in other countries with no signs of mitigation accompanied by chaos in circumstances after US Presidential elections as well as escalated Sino-US Trade War, along with circumstances containing sustained low rate in short-term financing and easing of capital, real estate remains one of the main investment methods adopted by corporate capitals for hedging; however, in consideration of the ongoing rise of pandemic, tardy pace for opening of global economy and concerns of housing market by competent authorities, the housing market in 2021 remains in high degree of uncertainty and shall have prudence over all engagements.

Under a comprehensive consideration, the Company will, in combination with government policies, make investments and assessments over urban renewal and reconstruction of unsafe and old building projects with premium locations, adjacency to MRT stations or major constructions and high level of integration which are situated in north to Taichung, with development categories mainly in residences, plant offices and office buildings, while incorporating the business opportunities in senior citizen demographics and extending the reach of management sectors to the concept of diversified management including recreation industry and professional operations of golf courses, Yin Zhai development and senior citizen residences, etc., creating a multi-win situation for the Group.

Chairman: Liu, Wei-Long[Managerial ] Wei-Long

Officer: Liu, Accounting Manager: Li, Shu-Hui

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II. Company Profile

1. Date of Incorporation: January 22,1988

2. Company History

Year	Item
1988	․ The Company was founded by Mr. Zhu Bingyu, and co-established by the well-to-do people Luo, Jie; Zeng, Dinghuang; Chen, Mucun; Liu, Wenbing; Zhan, Yisheng; Chen, Muchang and others with the capital amounted to NTD 60 million in the beginning. The main business involved the construction of commercial buildings,residential buildings,and houses.
1992	․ The Company was listed on the stock market on September 26, making it the first listed company in the construction industry in the central region.
1995	․ Took the first step for becoming a national construction company and started Longzhibang construction project in Banqiao City, Taipei County, the first project out of the central region. ․ Obtained ISO-9002qualitycertification.
1997	․ Changed the Company’s name to "Long Bon Development Co., Ltd.".
2000	․ Taking part in the operation of Taiwan Life Insurance Co., Ltd. and officially branch out into the financial and insurance industry.
2005	․ In order to increase the return rate on shareholders’ equity, a cash reduction of NT$0.5 billion was processed. After the capital reduction, the paid-in capital amounted to NT$5,026,856,800.
2006	․To facilitate the benefits of vertical integration, the Company made a share swap arrangement in between the subsidiary company "A Johnson Composites Inc.." and a listed glass cloth manufacturer "Glotech Industrial Corp." (5475). After the share swap, DA Johnson Composites Inc. became a subsidiary of Glotech Industrial Corp., of which the Company held 13.97% of the shares. ․ Signed the "Contract for Private Operation of Overseas Chinese Guest House" with the Overseas Community Affairs Council and started planning for the operation.
2007	․ The Overseas Chinese Guest House was renamed "Long Bon Overseas Chinese Guest House" and officially under operation.
2008	․ Transfer capital reserve into a capital increase. After the capital increase, the paid-in capital will be NT$5,277,539,640.
2009	․ Changed the Company’s name to "Long Bon International Industrial Co., Ltd.".
2010	․ Disposal of share of Top Taiwan Venture Capital Co., Ltd. and all shares of Glotech Industrial Corp. held. ․ Established Taipei Branch for the operation of online shopping business and conducted the internal trial operation. ․The subsidiary, Longsheng Investment, merged with Everwin Investment Co., Ltd and is operated under the latter's name.

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Year	Item
2011	․ Established "Xiamen International Trade Financial Center Development Co., Ltd." in October 2011 and expand the company’s business to mainland real estate.
2012	․ The third domestic bond conversion became effective in March as approved by FSC.
2013	․ Established a wholly own subsidiary, ―Longde Health Holdings Hong Kong Co., Ltd.‖ with 100% shareholding in July.
2014	․ Established a wholly own sub-subsidiary, ―Xiamen Xinlongde Real Estate Co., Ltd.‖ with 100% shareholding in September to pre-deploy for obstetrics and gynecologymedical care market.
2015	․ Taichung Headquarter moved to Taipei in July. ․ Established a wholly own subsidiary, ―Longbao Enterprise Co., Ltd.‖ with 100% shareholding in March. ․ Established a wholly own subsidiary, ―Xiamen Xinlongde Real Estate Co., Ltd.‖ with 100% shareholding in October. ․ Established a wholly own subsidiary, ―Yuyuan Construction Co., Ltd.‖ with 100% shareholdingin December.
2016	․ In March, Longbao Enterprise Co., Ltd. obtained ownership of the Nantou Paradise Land Park, officially entered the cemetery real estate industry and started the funeral service operation for the first time. ․ In November, Xiamen International Financial Center Development Co., Ltd. and China Life Insurance Co., Ltd. Xiamen Branch signed a purchase and sale contract for the "North Office Tower of the International Financial Center". ․ Startedpromotingcorporate social responsibilityin November.
2019	․ Gained control by obtaining more than 50% of Reiju Construction's consolidated shareholding, as shown in the consolidated financial report. ․ In October, execute an increase in the return rate on shareholders’ equity, and the paid-in capital after the cash reduction was NTD 4,047,292,780. ․ Established a wholly owned subsidiary ―Longfu Real Estate Co. Ltd.‖ with 100% shareholdingin December.
2020	․ Obtained the share of Sanzhi Tzu-An-Yuan Co., Ltd. and entered the funeral service business in northern Taiwan. ․Started operating recreational business and established Longhui Development Co., Ltd. and Baohui Development Co., Ltd. to invest in the business of North Bay Golf Court & Country Club and Dong Hwa Golf Court & Country Club, respectively. ․.Established a wholly owned subsidiary ―Long De International Development Co.,Ltd‖ with 100%shareholdingin September.

For the current year up to the date of publication of the annual report, there are activities and information in regards to the following: merger and acquisition activities; strategic investments in affiliated enterprises; corporate reorganization; instances in which a major quantity of shares belonging to directors, supervisors, or shareholders holding greater than a 10 per cent stake in the Company is transferred or otherwise changes hands; any change in managerial control; any material change in operating methods or type of business; and any other matters of material significance that could affect shareholders' equity: None

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1. Organization

III. Corporate Governance Report

(1) Organization Structure

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Shareholders
Audit
Meeting
Committee
Board of Remuneration
Corporate Governance Directors Committee
Division
Corporate Social
Audit Responsibility Committee
Chairman
Department
Chairman
Office
Vice
Chairman
General General Manager
Manager Office
Construction Finance Management Property & Asset
Department Department Department Department
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(2) Responsibilities of Major Department

Department	Responsibilities
Audit Department	Assess the performance of internal controls and other important policies, special audit projects assigned by chairperson or processed by opinions provided by various departments, and produce regularly term reports to the Financial Supervisory Commission
Corporate Governance Division	Responsible for board-related matters, providing information required by directors to perform their duties, collecting the latest regulations related to the operation of the Company to ensure directors in compliance with laws and regulations, assisting directors in their inauguration and continuing education.
Property & Asset Department	Real estate development and assets lease and sale management
Construction Department	The Group's related construction operation
Finance Department	1. Accounting Division: In charge of accounting processing, financial management information, stock affairs and related matters 2. Finance Division: Financial planning and capital management 3. Investment Division: Investment appraisal and management
Management Department	Management Division: 1. Administration: Responsible for asset management and the Company's general affairs. 2. Information: Coordinating and maintaining the Company's information systems, assisting in establishing enquiry supporting system, decision supporting system and related matters. 3. Human Resource: Personnel management, education and training, and other related businesses. Legal Division: In charge of legal matters such as reviewing all contracts, litigation procedure, external correspondence on behalf of the Company, and providing professional legal advice.

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2. Directors, Supervisors, General Manager, Deputy General Manager, Associates, Departments and Branches Officer Information

(1) Directors and Supervisors

i. Directors and Supervisors Information

May 2,2021

																				May2,2021
Title	Nationality	Name	Gender	Date Elected	Term	Date First Elected	Shareholdings When elected		Current Shareholdings		Spouse’s & Minor Children’s Current Shareholdings		Shareholdings in the Name of Others		Experience (Education)	Other Current Position	Executives, Di S	rectors or Sup econd-degree	ervisors with Spouses or of Kinship	Remarks
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation
Chairman	ROC	Fortune Base Development Corp. LTD		June 27, 2019	3 years	June 27, 2019	50,580,675	10.00%	51,666,340	13.09%	0	0	0	0	–	–	–	–	–
		Representative: Liu, Wei-Long	M	February 1, 2021		February 1, 2021	0	0	0	0	0	0	0	0	Chairman of Lung Yen Group / Bachelor	General Manager & Chairman of Everwin Investment Co., LTD (Note 1)	–	–	–	The role of the position is to improve the company's operational efficiency and implement the board of directors' resolutions. It may be maintained or changed in the future depending on the Company's operating conditions and the laws and regulations.
Director	ROC	Global Funeral Service Co. LTD	–	June 27, 2019	3 years	June 27, 2019	50,495,100	9.98%	44,072,080	11.17%	0	0	0	0	–	–	–	–	–
		Representative: Liu, Huang-Ji	M	June 27, 2019		May 13, 2016	0	0	0	0	0	0	0	0	Attorney-in-Charge of Zuocheng Law Firm / Master	Note 3	–	–	–
Director	ROC	Fortune Base Development Corp. LTD	–	June 27, 2019	3 years	June 27, 2019	50,580,675	10.00%	51,666,340	13.09%	0	0	0	0	–	–	–	–	–
		Representative: Chang, Cheng-Chong	M	November 19, 2020		November 19, 2020	0	0	228	0%	0	0	0	0	Chairman of Reiju Construction/ Master	Note 4	–	–	–
Director	ROC	Global Funeral Service Co. LTD	–	June 27, 2019	3 years	June 27, 2019	50,495,100	9.98%	44,072,080	11.17%	0	0	0	0	–	–	–	–	–

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Title	Nationality	Name	Gender	Date Elected	Term	Date First Elected	Shareholdings When elected	Shareholdings When elected	Current Shareholdings	Current Shareholdings	Spouse’s & Minor Children’s Current Shareholdings	Spouse’s & Minor Children’s Current Shareholdings	Shareholdings in the Name of Others	Shareholdings in the Name of Others	Experience (Education)	Other Current Position	Executives, Di S	rectors or Sup econd-degree	ervisors with Spouses or of Kinship	Remarks
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relation
		Representative: Shao, Ming-Bin	M	June 27, 2019		June 27, 2019	0	0	95,000	0.02%		0	0	0	Chief Operating Officer of Global Funeral Service Co. LTD/ College	Note 2	–	–	–
Independent Director	ROC	Young, Gui-Hsiung	M	May 13, 2016	3 years	May 13, 2016	0	0	0	0	0	0	0	0	Court Judge of Taiwan High Court/ Bachelor	Independent Director of Sung Gang Corp. Limited	–	–
Independent Director	ROC	Ning, Guo-Hui	M	December 1, 2016	3 years	December 1, 2016	0	0	0	0	0	0	0	0	Spokesman of CJW International Co. LTD/ Master	Note 5	–	–
Independent Director	ROC	Chang, Cheng-Chong	M	June 27, 2019	3 years	May 7, 2013	0	0	0	0	0	0	0	0	Attorney of Lee, Tsai & Partners/ Master	Note 6	–	–

• Note 1: Mr. Lin, Shang-Liang resigned on February 1, 2021; Mr. Liu, Wei-Long took office on February 1, 2021 and concurrently served as the Chairman of Everwin Investment Co., Ltd.

• Note 2: Chairman of Fortune Base Development Co. Ltd., Yifeng Investment Co., Ltd., Youlong Construction Development Co., Ltd., Longfu Real Estate Co., LTD., North Bay Recreation Co., Ltd., and Dong Hwa International Golf Recreation Co. Ltd.

• Note 3: Supervisor of Suneast Engineering and Development Co., Independent Director of Mayer Steel Pipe Corporation, Director of Eastern Home Shopping & Leisure Co., Ltd., Director of Eastern E-Commerce Co., Ltd., Director of Dongsen New Media Holdings Co., Ltd., and Director of Sheng Cheng Co., LTD.

• Note 4: Mr. Lin Guo-Xing resigned on November 19, 2020; Mr. Chang Cheng-Yueh took office on November 19, 2020, concurrently serving as Chairman of Reiju Construction Co., Ltd., Chairman of Ryan Development Co., Ltd., director of RAiO Technology INC., Director of Shengji Interior Design Co., Ltd., Director of Xiamen Reiju Architectural Engineering Co., Ltd.

• Note 5: Spokesman of CJW International Co., Ltd., and Independent Director of Songgang Asset Management Co., Ltd.

• Note 6: Chairman of Formosa Basketball Development Corp., and Director of Apollo Ipl Inc.

• Note 7: Directors who have worked in CPA firms or their affiliated companies: None.

- 12 -

ii. Major Shareholders that are Institutional Shareholders:

Name of Institutional Shareholder (Note 1)	Top 10 Shareholders (Note 2)
Fortune Base Development Co. LTD	Jihe Real Estate Management Co., Ltd. (28.38%), Bluestar Development Co., Ltd. (28.80%), Eastmond Development Co., Ltd. (11.44%), Hengfu Development Co., Ltd. (8.73%), Hanyu Investment Co., Ltd. (7.38%), Xinyi Investment Co. Ltd. (5.97%), Dream Water Cube Co. Ltd. (2.24%), Ontario Investment Co. Ltd. (2.12%), Mingzhu Investment Co.,Ltd.(1.80%),Xingfa Investment Co.,Ltd.(1.16%)
Global Funeral Service Co. LTD	Fortune Base Development Co. LTD (73.31%), Hengfu Development Co., Ltd. (15.73%), Liansheng Co. Ltd. (1.58%), Young, Ya-Chuan (1.55%), Bluestar Development Co., Ltd. (0.63%), Shiao,Yu-Xi(0.53%),Wu,Kuan-Ju(0.46%),Shiao,Lu(0.43%),Liu,Rui-Teng (0.42%),Wang,Su-Yun(0.36%)

Note 1: If the director or supervisor is a representative of an institutional shareholder, please fill in the name of the institutional shareholder. Note 2: Please fill in the name of the major shareholders of the institutional shareholder (top 10 in shareholding) and the shareholding ratio.

iii. Major Institutional Shareholder's Major Shareholders

Name of Institutional Shareholder	Institutional Shareholder's Major Shareholders
Eastmond Development Co., Ltd.	Fortune Base Development Co. LTD. (100%)
Hengfu Development Co., Ltd.	Fortune Base Development Co. LTD. (100%)
Jihe Real Estate Management Co., Ltd	Feng, Tian-You (50%), Chang, Jian-Hua (48%), Liang, Yue-Hui (1%), Bai, Shao-Hui (1%)
Hanyu Investment Co., Ltd.	Liu, Ching-Chu (99.995%), Chu, Wen-Yan (0.005%)
Bluestar Development Co., Ltd.	Liu, Ching-Chu (88.89%), Chu, Wen-Yan (11.11%)
Dream Water Cube Co. Ltd.	Xiwang Investment Co., Ltd. (60%), Li, Jing-Jie (30%), Peng, Mei-Gui (10%)

- 13 -

iv. Professional Qualifications and Independence Analysis of Directors and Supervisors

							May12,2021	May12,2021	May12,2021	May12,2021	May12,2021	May12,2021	May12,2021	May12,2021	May12,2021	May12,2021
Criteria Name	Professional Qualification Requirements, Together with at Least Five Years Work Experience						Independence Criteria (Note)									Number of other Company in Which the Individual Concurrently Serving as an independent Director
	Professional Qualification of a Lecturer or Above in a Department of Business, Legal Affairs, Finance, Accounting or other Academic Department in Relevant to the Business of the Company at Public and Private Colleges and Universities	Judge, Public Prosecutor, Attorney, Certified Public Accountant, or other National Certified Professionals with Experience Related to the Business of the Company	With 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
Fortune Base Development Co. LTD Representative: Liu. Wei-Long																0
Global Funeral Service Co. LTD Representative: Liu, Huang-Ji																1
Fortune Base Development Co. LTD Representative: Chang, Cheng-Yueh																0
Global Funeral Service Co. LTD Representative: Shao, Ming-Bin																0
Young, Gui-xiong																1
Ning, Guo-Hui																1
Chang, Cheng-Chong																0

Note: Directors and supervisor during the two years before being elected and during the term of office, meet any of the following situations, please tick the appropriate corresponding boxes:

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

• (2) Not a director or supervisor of the Company or its affiliates (However, this does not apply to cases wherein the person is an independent Director of the Company or its parent company, subsidiary or subsidiary under the same company set up according to this Act of local ordinances).

• (3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of issued shares of the Company or ranks as one of its top 10 shareholders;

• (4) Not a spouse, relative within the second-degree kinship, or lineal relative within the third-degree kinship, of any of the above person in the preceding three subparagraphs.

• (5) Not a director, supervisor, or employee of an institutional shareholder that directly holds 5% or more of the total number of outstanding shares of the Company of holds shares ranked among the top 5 holdings, or assigns representative4 as the director or supervisor to Article 27-1 or 27-2 of the Company Act (However, this does not apply to cases wherein the person in is an Independent Director of the Company or its parent company, subsidiary or subsidiary under the same company set up according to this Act or local ordinance).

• (6) Not a director, supervisor, or employee of another company controlled by the same person of the Company with a director seat or more than half of the voting share of the Company (However, this does not apply to cases wherein the person in is an Independent Director of the Company or its parent company, subsidiary or subsidiary under the same company set up according to this Act or local ordinance).

• (7) Not a director, supervisor, or employee of another company or institution whose chairman, general manager or its equivalent is the same person or spouse holding such position in the Company (However, this does not apply to cases wherein the person is an Independent Director of the Company or its parent company, subsidiary company set up according to this Act or local ordinances).

• (8) Not a director, supervisor, manager or shareholder holding 5% or more shares of a company or institution that has a business or financial relationship with the Company (However, this does not apply to case wherein the Company or institution holds more than 20% but less than 50% of the total number of outstanding shares of the Company, and the person is an Independent Director of the Company or its parent company, subsidiary or subsidiary under the same company set up according to this Act or local ordinances).

• (9) Not a professional individual, or an owner, partner, director, supervisor, officer, or spouse of a sole proprietorship, partnership, company, or institution, thereof, who conducts audits of the Company or any affiliate of the Company, or receives remuneration less than NTD 500,000 in the last two years while providing commercial, legal, financial, accounting services or consultation services, so long as this restriction does not apply to any member of the compensation committee, board or the M&A special committee that exercises powers pursuant to the Securities Exchange Law or the Corporate M&A Law.

• (10) Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company

• (11) Not been a person of any conditions defined in Article 30 of the Company Act.

• (12) Not a governmental, juridical person or its representative as defined in Article 27 of the Company Act.

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(2) Management Team Information

																May12,2021
Title	Nationality	Name	Gender	Date Effective	Shareholdings		Spouse’s & Minor Children’s Current Shareholdings		Shareholdings by Nominee Arrangement		Experience (Education) (Note 1)	Other Current Position	Managers who are Spouses or Within Two Degrees of Kinship			Remarks
					Share	%	Share	%	Share	%			Title	Name	Relation
General Manager	ROC	Liu, Wei-Long	Male	February 1, 2020			0	0	0	0	Chairman of Lung Yen Group / Bachelor	Chairman of the Company (Note 2)	Nil	Nil	Nil	The role of the position is to improve the company's operational efficiency and implement the board of directors' resolutions. It may be maintained or changed in the future depending on the Company's operating conditions and the laws and regulations.
					0	0
Deputy GM, Real Estate Department	ROC	Lin, Shang-Liang	Male	May 3, 2016	0	0	0	0	0	0	Deputy GM of Taiwan Bank-Taiyi Real Estate Management Co., Ltd./ Master	(Note 3)	Nil	Nil	Nil
Deputy GM, Construction Department	ROC	Liu, Yu-Ming	Male	May 12, 2021	0	0	0	0	0	0	Deputy GM of Lung Yen Group / Master	(Note 4)	Nil	Nil	Nil
Deputy GM, Finance Department	ROC	Li, Shu-Hui	Female	May 12, 2021	0	0	0	0	0	0	Associate GM of Lung Yen Group / Bachelor	(Note 4)	Nil	Nil	Nil
Chief Audit Executive	ROC	Wang, Xiu-Gui	Female	March 22, 2017	0	0	0	0	0	0	Chief Audit Executive of Hedonist Biochemical Technologies Co., Ltd./ Master	Nil	Nil	Nil	Nil
Chief Accounting Officer	ROC	Li, Shu-Hui	Female	May 12, 2021	0	0	0	0	0	0	Associate GM of Lung Yen Group / Bachelor	(Note 4)	Nil	Nil	Nil
Chief Financial Officer	ROC	Dong, Yi-Ching	Male	November 10, 2020	0	0	0	0	0	0	VTeam Financial Service Group/ Bachelor	(Note 4)	Nil	Nil	Nil

Note 1: Major executive officers who have worked in CPA firms or their affiliated company: none.

- 15 -

Note 2: Chairman of Everwin Investment Co., Ltd

Note 3: Concurrent positions in other companies are detailed on page 109 of this annual report. Note 4: The representative of Reiju Construction Co., Ltd. 3. Remuneration to Directors, Supervisors, Presidents and Vice Presidents in Recent Annual Years

(1) Remuneration Paid to Directors and Independent Directors	(1) Remuneration Paid to Directors and Independent Directors	(1) Remuneration Paid to Directors and Independent Directors	(1) Remuneration Paid to Directors and Independent Directors	(1) Remuneration Paid to Directors and Independent Directors	(1) Remuneration Paid to Directors and Independent Directors	(1) Remuneration Paid to Directors and Independent Directors	(1) Remuneration Paid to Directors and Independent Directors	(1) Remuneration Paid to Directors and Independent Directors									December 31,2020 / Unit: NTD Thousands	December 31,2020 / Unit: NTD Thousands	December 31,2020 / Unit: NTD Thousands	December 31,2020 / Unit: NTD Thousands	December 31,2020 / Unit: NTD Thousands
Title	Name				Directo	rs’ Remuneration				Ratio of Remune (A+B+C+ Incom	Total ration D) to Net e (%)			Compen	sation to a	director Who i	s an Employee			Total Com (A+B+C+D+E+ Net In	pensation F+G) as a % of come	Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary
		Remun (N	eration (A) ote 6)	Retirement (B)	Pension	Compensation (No	to Directors (C) te 7)	Allowan (Note	ce (D) 8)			Base Com Bonuses, an (E	pensation, d Allowance )	Retirement (F)	Pension		Employees’ Profi	t-Sharing Bonu	s (G)
		The Company	All Consolidated Entities	The Company	All Consolidated Entities	The Company	All Consolidated Entities	The Company	All Consolidated Entities	The Company	All Consolidated Entities	The Company	All Consolidated Entities	The Company	All Consolidated Entities	The C	ompany	All Conso	lidated Entities	The Company	All Consolidated Entities
																Cash Stock Fair Market Value	Stock dividend amount	Cash Stock Fair Market Value	Stock dividend amount
Director	Fortune Base Development Co. LTD (Note 1)	0	0	0	0	20,535	21,944	0	0	1.87	1.99	0	0	0	0	0	0	0	0	1.87	1.99
	Representative: Shao, Ming-Bin (Note 1)	0	0	0	0	0	0	45	75	0.00	0.01	2,720	2,720	0	0	0	0	0	0	0.25	0.25
	Representative: Lin, Guo-Xing (Note 2)	0	865	0	0	0	0	705	705	0.06	0.14	0	0	0	0	0	0	0	0	0.06	0.14
	Representat9nive: Change, Cheng-Yueh (Note 3)	0	3,460	0	0	0	0	0	0	0.00	0.31	0	0	0	0	0	0	0	0	0.00	0.31
Director	Global Funeral Service Co. LTD (Note1)	0	0	0	0	20,502	21,911	0	0	1.86	1.99	0	0	0	0	0	0	0	0	1.86	1.99
	Representative: Liu, Huang-Ji (Note 4)	0	0	0	0	0	0	45	45	0.00	0.00	1,575	1,575	0	0	0	0	0	0	14.7	14.7
	Representative: Lin, Gui-Xin (Note 5)	0	0	0	0	0	0	20	20	0.00	0.00	0	0	0	0	0	0	0	0	0.00	0.00
	Representative: Lin, Shang-Liang (Note 5)	0	0	0	0	0	0	25	25	0.00	0.00	3,662	3,662	0	0	0	0	0	0	0.33	0.33
Independent Director	Young, Gui-Hsiung	1,08 3	1,083	0	0	0	0	45	45	0.10	0.10	0	0	0	0	0	0	0	0	0.10	0.10
Independent Director	Ning, Guo-Hui	1,08 3	1,083	0	0	0	0	45	45	0.10	0.10	0	0	0	0	0	0	0	0	0.10	0.10
Independent Director	Chang, Cheng-Chung	1,08 3	1,083	0	0	0	0	45	45	0.10	0.10	0	0	0	0	0	0	0	0	0.10	0.10

Note 1: Elected on June 27, 2019.

Note 2: Elected on June 27, 2019, and resigned on November 19, 2020.

Note 3: Took office on November 19, 2020

Note 4: Re-appointed on June 27, 2019.

Note 5: Ms. Lin Gui-Xin resigned on May 6, 2020 and Mr. Lin Shang-Liang took office on May 6, 2020.

Note 6: The remuneration paid to directors in 2020.

Note 7: Referring to the amount of directors' compensation distributed for the year 2020 by the board of directors in 2021 Note 8: Director’s related allowance for the year 2020.

Note 9: Statement for the policy, system, standard and structure regarding independent directors' remuneration, by the responsibilities, risks, time spent, and other factors in relation to the amount paid: The remuneration to the

- 16 -

directors and independent directors of the Company complies with the payment standard of governmental agencies and the market trend. In consideration of the board of directors' performance and the Company’s financial status, the remuneration committee will review the content and amount of individual remuneration and submit it to the board for resolution. Independent directors do not take part in the distribution of compensation.

- 17 -

(2) Remuneration to General Manger and Deputy General Manager

Title	Name	Base Remuneration (A) (Note 1)	Base Remuneration (A) (Note 1)	Retirement Pension (B)	Retirement Pension (B)	Bonuses, and Allowances (C) (Note 2)	Bonuses, and Allowances (C) (Note 2)	Employees’ Profit-Sharing Bonus (D) (Note 3)	Employees’ Profit-Sharing Bonus (D) (Note 3)	Employees’ Profit-Sharing Bonus (D) (Note 3)	Employees’ Profit-Sharing Bonus (D) (Note 3)	Ratio of Total Remuneration (A+B+C+D) as a % of Net Income	Ratio of Total Remuneration (A+B+C+D) as a % of Net Income	The Amount of Employee Stock Options Obtained	The Amount of Employee Stock Options Obtained	Number of New Employee Restricted Stocks Obtained	Number of New Employee Restricted Stocks Obtained	Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary
		The Company	All Consolidated Entities	The Company	All Consolidated Entities	The Company	All Consolidated Entities	The Company		All Consolid	ated Entities	The Company	All Consolidated Entities	The Company	All Consolidated Entities	The Company	All Consolidated Entities
								Cash Stock Fair Market Value	Stock dividend amount	Cash Stock Fair Market Value	Stock dividend amount
General Manager	Shao, Ming-Bin	3,823	3,823	0	0	1,612	1,612	0	0	0	0	0.49	0.49	0	0	0	0	0
Deputy General Manager	Shang-Lian g

Note 1: It is the remuneration information for the former general manager and deputy general manager in 2020, including duty allowance, retirement pension, and severance pay. Note 2: Refers to the amount of money received by the general manager and deputy general managers in 2020, including various bonuses, incentives, transportation fees, special disbursement, various allowances, and fees for other physical matters such as dormitory and car allocation. Note 3: The proposed amount distributed for 2021 is calculated based on the proportion of the actual amount distributed in 2020.

Range of Remuneration

	Range of Remuneration	Range of Remuneration
Range of Remuneration Paid to Each General Manager and Deputy General Manager of the Company	Name of General Manager and DeputyGeneral Manager
	The Company	All Consolidated Entities
Less than NTD 1,000,000	None	None
NTD 1,000,000（inclusive）～NTD 2,000,000（exclusive）	None	None
NTD 2,000,000（inclusive）～NTD 3,500,000（exclusive）	Shao, Ming-Bin & Lin, Shang-Liang	Shao, Ming-Bin & Lin, Shang-Liang
NTD 3,500,000（inclusive）～NTD 5,000,000（exclusive）	None	None
NTD 5,000,000（inclusive）～NTD 10,000,000（exclusive）	None	None
NTD 10,000,000（inclusive）～NTD 15,000,00（exclusive）	None	None
NTD 15,000,000（inclusive）～NTD 30,000,00（exclusive）	None	None
NTD 30,000,000（inclusive）～NTD 50,000,00（exclusive）	None	None
NTD 50,000,000（inclusive）～NTD 100,000,0（exclusive）	None	None
NTD 100,000,000 or more	None	None
Total	2 people	2 people

- 18 -

(3) Executive Officers with Employee’ Profit Sharing Distributed

				December	31, 2020 / Unit: NTD Thousands	31, 2020 / Unit: NTD Thousands
	Title	Name	Stock	Cash	Total	Ratio of Total Amount to Net Income (%)
Executive Officers	Chairman / General Manager	Shao, Ming-Bin	0	1,300	1,300	14.65
	Deputy General Manager	Lin, Shang-Liang
	Manager (Chief Financial Officer)	Dong, Yi-Ching
	Manager (Chief Accounting Officer)	You, Wan-How

• Note 1: Individual names and titles should be listed separately, and the profit distribution may be integrated for disclosure

• Note 2: This is the amount of employee’s profit sharing distributed to the executive officer for the most recent year (including stocks and cash) approved by the Board of Directors. If the amount cannot be estimated, the proposed distribution amount for this year will be calculated based on the actual distribution amount last year. Net profit after tax refers to the net after-tax profit of the individual financial statement for the most recent year under the standard of IFRS.

• Note 3: The definition of manager, as governed by the letter of the SFC on March 27, 2003 with a reference no. of Tai-Tsai-Cheng III 0920001301, is as follows:

• (1) General manager and equivalent

• (2) Deputy general manager and equivalent

• (3) Associate and equivalent

• (4) Head of financial department

• (5) Head of the accounting department

• (6) Other persons with authority to manage affairs and sign for the Company

- 19 -

• (4) Comparison of Remuneration for Directors, Supervisors, President and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, President and Vice Presidents:

• i. The ratio of total remuneration paid by the Company and by all companies inclusive in the consolidated financial statements for the two most recent fiscal years to directors, supervisors, president and vice presidents of the Company, to the net income:

Year	The Company	The Company	All Consolidated Entities	All Consolidated Entities
	2019	2020	2019	2020
Directors	5.31%	4.11%	5.40%	4.77%
Supervisors	0.37%	0.00%	0.47%	0.00%
General Manager & Deputy General Manager	0.92%	0.64%	0.92%	0.64%

• ii. The policies, standards, and portfolios for the payment of remuneration

• (i) The directors' remuneration includes surplus distribution of compensations to director and supervisors, and transportation fees made to the general standards of the industry.

• (ii) The directors' compensation is the surplus distribution of remuneration to the directors and supervisors, which is submitted to the Board of Directors for resolution and approved before being sent to the shareholders’ meeting. It is handled under the provision of the company's articles of association.

• iii. The procedures for determining remuneration, and the correlation with business performance and future risk

• The Company distributes remuneration and employee’s profit share to the director and executive officers in accordance with the market trend. The amount is determined based on the time spend, the responsibilities, and work performance of each individual and general stipend standard for the position or equivalents. Based on the achievement of the Company’s short-term and long-term business goals, and financial status, etc. and each individual person’s performance and the correlation with the Company’s operation and future risk, the Remuneration Committee will review the amount and content of the individual stipend and compensation before sending to the Board of Director for resolution.

- 20 -

4. Corporate Governance Status

(1) Board of Director

• i. A total of 9 (A) meetings of the Board of Directors were held in 2020. The attendance of director and supervisor were as follows:

Title	Name	Attendance in Person【B】	By Proxy	Attendance Rate (%) 【B/A】	Remarks
Chairman	Fortune Base Development Co. Ltd. Representative: Shao,Ming-Bin	9	0	100.00	Took office on June 27, 2019
Director	Global Funeral Service Co. Ltd. Representative: Liu,Huang-Ji	9	0	100.00	Took office on June 27, 2019
Director	Fortune Base Development Co. LTD Representative: Lin,Guo-Xing	9	0	100.00	Took office on June 27, 2019
Director	Global Funeral Service Co. Ltd. Representative: Lin,Gui-Xing	4	0	44.00	Took office on June 27, 2019 Resigned on May 6, 2020
Director	Global Funeral Service Co. Ltd. Representative: Lin,Shang-Liang	5	0	56.00	Took office on May 6, 2020
Independent Director	Young, Gui-Hsiung	9	0	100.00	Took office on June 27, 2019
Independent Director	Ning, Guo-Hui	9	0	100.00	Took office on June 27, 2019
Independent Director	Chang, Cheng-Chung	9	0	100.00	Took office on June 27, 2019

Other mentionable items:

1. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the company’s response should be specified

2. (1) Matters referred to in Article 14-3 of the Securities and Exchange Act ： There is a total of 9 Board Meetings held in 2020. Resolution items and contents are as described from page 48 to page 51 of the annual report. All independent director approved the content for Stock Exchange Act, Article 14-3 without any objection.

3. (2) Other matters involving objections or expressed reservations by independent directors that were recorded or stated in writing that require a resolution by the board of directors: None

4. If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified:

- 21 -

Name of Directors	Resolution Content	Reason for the avoidance of interests	Voting Results
Chairman Liu, Wei-Long	Item regarding the Chairman concurrently serving as the general manager. Agenda and resolutions for the 5thmeeting of the 4th Renumeration Committee.	Relation with Chairman's personal interest Relation with Chairman's personal interest	Vote withdrawal Vote withdrawal
Deputy Chairman Liu, Huang-Ji	Proposal of the executive personnel's year-end bonus for 2019. Agenda and resolutions for the 4thmeeting of the 4th Renumeration Committee. Agenda and resolutions for the 5thmeeting of the 4th Renumeration Committee.	Relation with the director’s personal interest Relation with the director’s personal interest	Vote withdrawal Vote withdrawal
Director Shao, Ming-Bin	Proposal of the executive personnel's year-end bonus for 2019. Agenda and resolutions for the 4thmeeting of the 4th Renumeration Committee. Agenda and resolutions for the 5thmeeting of the 4th Renumeration Committee.	Relation with Chairman's personal interest Relation with Chairman's personal interest Relation with Chairman's personal interest	Vote withdrawal Vote withdrawal Vote withdrawal
Director Chang, Cheng-Yueh	Agenda and resolutions for the 5thmeeting of the 4th Renumeration Committee	Relation with Chairman's personal interest	Vote withdrawal
Director Lin, Guo-Xing	Agenda and resolutions for the 4thmeeting of the 4th Renumeration Committee	Relation with the director’s personal interest	Vote withdrawal
Director Lin, Shang-Liang	Agenda and resolutions for the 4thmeeting of the 4th Renumeration Committee	Relation with the director’s personal interest	Vote withdrawal

1. Information on the cycle and period, scope, method and content of the Board of Directors’ self-evaluation

(1) Directors’ self-evaluation

Cycle	Period	Scope	Method	Content
Annually	Jan.1, 2020~ Dec.31, 2020	Board of Directors Members of the Board	Board’s self-evaluation Directors’ self-evaluation	The Board of Directors’ overall annual operating performance

Note 1: Evaluation results: The overall board performance is still effective.

1. Information on the cycle and period, scope, method and content of the Board of Directors’ self-evaluation for the current year (For more details about the Remuneration Committee’s self-evaluation, please refer to the Remuneration Committee Operating Status’ in this annual report):

2. (1) To strengthen the Board of Directors' governance system, the Company’ has established a set

- 22 -

of rules governing the procedure of Board Meeting per the public regulations. To enhance the information transparency of the Board’s operation, important resolutions of the Board are disclosed in the annual report and the Company website. Since 2017, the Company has been purchasing "Directors and Important Staff Liability Insurance" for directors and essential employees as required by the law to protect them from any compensation liability caused by the performance of their duties during their employment terms.

• (2) On November 9, 2017, the 21st meeting of the Company’s12th Board of Directors approved the establishment of a "Corporate Social Responsibility Committee," which will hold monthly operation and management meeting to discuss the implementation and promotion of related affairs and will report to the Board of Director in regards to their work status every six months.

• (3) The Company established an audit committee at the beginning of the term of the 13th Board of Directors.

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(2) Audit Committee or Attendance of Supervisors at Board Meetings

• i. A total of 9 (A) Audit Committee meetings were held in 2020. The attendance of the independent directors was as follows:

Title	Name	Attendance in Person (B)	Attendance Rate (%) (B/A)	Remarks
Audit Committee	Young, Gui-Hsiung	9	100.00	Took office on June 27, 2019
Audit Committee	Ning, Guo-Hui	9	100.00	Took office on June 27, 2019
Audit Committee	Chang, Cheng-Chung	9	100.00	Took office on June 27, 2019

• A. If any of the following circumstances occur, the dates of meetings, sessions, contents of motion, resolutions of the Audit Committee and the Company’s response to the Audit Committee’s opinion should be specified:

• a. Matters referred to in Article 14-5 of the Securities and Exchange Act: A total of 9 board meetings were held in 2020. The content of the resolutions is shown from page 48 to page 51 of the annual report. All independent directors approved without objection to the matters listed in Article 14-3 of the Securities and Exchange Law.

• b. Other matters which were not approved by the Audit Committee but were approved by two-thirds or more of all directors: None.

• B. If there are independent directors’ avoidance of motions in conflict of interest, the directors’

names, contents of motion, causes for avoidance and voting should be specified:

Name of Independent Directors	Resolution Content	Reason for the avoidance of interests	Voting Results
Young, Gui-Hsiung	None
Ning, Guo-Hui	None
Chang, Cheng-Chung	None

• C. The communication between independent directors and internal audit supervisors and accountants (including significant matters, methods and results of communication on the Company's financial and business conditions, etc.).

• a. Prepare a copy of the audit report every month and submit it to every independent director for review.

• b. Each audit report must follow up on the internal control deficiencies and the improvement of abnormal matters. In addition, a quarterly tracking report must be prepared and submitted to the board of directors.

• c. The company's CPA reports matter regarding relevant laws and regulations at the end of each year to the Board of Directors. The communication between the Company's independent directors and CPA is good.

• d. Independent directors can grasp the Company’s operating status (including financial and operation situation) and audit conditions through the corporate governance meetings of the Board of Directors and the audit reports regularly provided by the

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auditing unit, in addition to other various reports and channels (such as telephone, fax, e-mail) Etc.) to communicate with accountants.

e. For the year 2020, as of the publication date of the annual report, the summary of communications is as follows:

	Members in Attendance	Communication Key Point
Date
	Independent Director Chief of Audit Officer Accountant	1.Reviewer's responsibility to inspect the financial reports 2. Review findings in the first three quarters of the year 2019 3. 2019 annual audit plan (key audit items) 4. Independence 5. Updates to important accounting standards or interpretation letters, securities control laws and tax laws Independent Director's suggestions: No comments
1/16/2020
	Independent Director Chief of Audit Officer Accountant	1. Independence 2. Reviewer's responsibility to inspect the interim financial reports 3. Review scope 4. Review findings 5.Others 6.Updates to important accounting standards or interpretation letters, securities control laws and tax laws Independent Director's suggestions: No comments
5/14/2020
	Independent Director Chief of Audit Officer Accountant	1.Independence 2.Reviewer's responsibility to inspect the interim financial reports 3.Review scope 4.Review findings 5.Updates to important accounting standards or interpretation letters, securities control laws and tax laws Independent Director's Suggestions: No comments
08/12/2020
	Independent Director Chief of Audit Officer Accountant	1.Independence 2.Reviewer's responsibility to inspect the interim financial reports 3.Review scope 4.Review findings 5.Competent authority’s concerns 6.Annual audit plan 7. Updates to important accounting standards or interpretation letters, securities control laws and tax laws Independent Director's Suggestions: No comments
11/10/2020

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(3) Corporate Governance Status, Differences with Corporate Governance Best Practice Principles for Listed Companies and the Reasons

, Reasons
Assessment Items	Implementation Status			Difference from the Corporate Governance Best-Practice Principles for listed Companies and the Reasons
	Y	N	Explanation
1. Does Company follow ―Taiwan Corporate Governance Implementation‖ to establish and disclose its corporate governance practices?	✓		The company establishes relevant operation practice by the regulations and discloses related information on the official website	In compliance with the provisions of the Code of Practice for Corporate Governance of Listed Companies.
2. Shareholding Structure & Shareholders’ Rights (1) Does the company establish internal operating procedures to handle shareholder proposals, doubts, disputes and litigation matters and implement these procedures accordingly? (2) Does Company possess a list of major shareholders and beneficial owners of these major shareholders? (3) Has the Company built and executed a risk management system and ―firewall‖ between the Company and its affiliates?	✓ ✓ ✓		(1) The company has designated a person in the Finance Department responsible for handling various stock affairs. There are a spokesperson and an acting spokesperson to take care of related matters full-time. A mailbox is also set up on the official website to establish communication channels, and the legal office is in charge of handling shareholder-related disputes and litigation matters. (2) The Company possess a list of major shareholders and beneficial owners of these major shareholders based on the information provided by the shareholder services agent and report regularly the change in insiders' equity. (3) The transaction management, endorsement and guarantee, lending and loaning, etc. between the related parties of the Company and its affiliates are regulated by related policy and procedure and the ―Supervision and Management of Subsidiaries"of the"Regulations Governing	In compliance with the provisions of the Code of Practice for Corporate Governance of Listed Companies.

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Assessment Items	Implementation Status	Implementation Status	Implementation Status	Difference from the Corporate Governance Best-Practice Principles for listed Companies and the Reasons
	Y	N	Explanation
(4) Has the Company established internal rules prohibiting insider trading on undisclosed information?	✓		Establishment of Internal Control Systems by Public Companies" set forth by FSC to execute risk control for the subsidiaries. (4) The Company has established its " Integrity Management Operating Procedure and Behavior Guidelines" and the ―Internal Major Information Processing and Insider Trading Prevention policy‖ that strictly prohibit insider engaging in any insider trading. Related information is disclosed regularly on the Company's website.
3. Composition and Responsibilities of the Board of Directors (1) Has the Company established a diversification policy for the composition of its Board of Directors and has it been implemented accordingly? (2) Other than the Compensation Committee and the Audit Committee which are required by law, does the Company plan to set up other Board committees?	✓ ✓		(1) All members of the Company's Board of Directors have different professional backgrounds such as accounting, operation management, land development, real estate sales, financial planning, etc., and can make suggestions to enhance the Company's operation management based on their expertise (Note). The company’s employee directors accounted for 14% and independent directors accounted for 43%; independent directors have an average term of 3 years; 2 of the directors are 60-69 years old, 4 are 50-59 years old, and 1 is 40~49 years old. (2) The company has established a corporate social responsibility committee in accordance with the Corporate Governance Best Practice Principals for TWSE/TPEx Listed Companies. In the	In compliance with the provisions of the Code of Practice for Corporate Governance of Listed Companies.

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Assessment Items	Implementation Status	Implementation Status	Implementation Status	Difference from the Corporate Governance Best-Practice Principles for listed Companies and the Reasons
	Y	N	Explanation
(3) Has the Company established a methodology for evaluating its board of directors' performance on an annual basis and reporting the performance assessment results to the board of directors while using the assessment results as references for individual directors’ remuneration and nomination or re-appointment?	✓		future, other functional committees will be set up according to actual need (3) The company conducts an assessment on the final board meeting each year and reports the results to the board of directors in the following year, and disclose the results on the official website. The assessment will include overall operation of the Board of Director and performance of individual directors. The measurement items for the performance of the Company's Board include five aspects: 1. The degree of participation in the company's operations. 2. Improve the quality of board decisions. 3. The composition and structure of the board of directors and functional committees. 4. The election for directors and their continuing education 5. Internal control. The measurement items for the board members' self-performance include six aspects: 1. Master the company's goals and tasks. 2. Awareness of directors' responsibilities. 3. The degree of participation in the company's operations. 4. Internal relationship management and communication. 5. Directors'expertise and continuous

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Assessment Items	Implementation Status	Implementation Status	Implementation Status	Difference from the Corporate Governance Best-Practice Principles for listed Companies and the Reasons
	Y	N	Explanation
(4) Does the Company regularly evaluate its external auditors’ independence?	✓		education 6. Internal control Self-evaluation of the overall performance of the internal board of directors in 2019 The results are all good. Suggestions and improvement actions: None. (4) The Company requires the certified public accountants to issue a declaration of independence each year, and also establishes the "Certified Public Accountant Selection and Review Guidelines" to assess its independence and competence at the end of each year and reports the assessment results to the Board of Directors on the final board meeting each year.
4. Does the listed company established an appropriate number of personnel and appoints chief executives to be in charge of corporate governance affairs (including but not limited to furnish information required for business execution by directors and supervisors, handle matters relating to board meetings and shareholders’ meetings according to laws, handle corporate registration and amendment registration, produce minutes of board meetings and shareholders’ meetings, etc.?	✓		(1) The Company has regulated the "Regulations and Procedures for the Corporate Social Responsibility Committee" based on which a corporate governance and integrity management team is set up to promote corporate governance-related affairs and standardizing related work and duties. (2) The company has established competent and an appropriate number of personnel to be responsible for corporate governance-related affairs. (3) The company has appointed the head of corporate governance team on May 12, 2011.	In compliance with the provisions of the Code of Practice for Corporate Governance of Listed Companies.
5. Does the Company establish a means of communicating with its shareholders or	✓		A shareholder's exclusive platform is set up on the Company's website. Communication with	In compliance with the provisions of the Code of

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Assessment Items	Implementation Status	Implementation Status	Implementation Status	Difference from the Corporate Governance Best-Practice Principles for listed Companies and the Reasons
	Y	N	Explanation
create a Shareholders Section on its Company website and respond to shareholders’ questions on corporate responsibilities?			shareholders can also be established through the Company's Email address, telephone, etc.	Practice for Corporate Governance of Listed Companies.
6. Has the Company appointed a professional registrar for its Shareholders’ Meetings?	✓		The Company entrusts the "Yuanta Securities Co., Ltd.-Registrar & Transfer Agency Department " to handle related matters.	In compliance with the provisions of the Code of Practice for Corporate Governance of Listed Companies.
7. Information Disclosure (1) Has the Company established a corporate website to disclose information regarding its financials, business and corporate governance status? (2) Does the Company use other information disclosure channels (e.g., maintaining an English-language website, designating staff to handle information collection and disclosure, appointing spokespersons, webcasting investors conference etc.)? (3) Does the Company announce and declare the annual financial statements within two months after the end of the fiscal year, and announce and declare the financial statements for the first, second and third	✓ ✓		(1) The Company has established a corporate website and disclose related information. (2) In accordance with the job description, the Company has designated appropriate personnel to handle collecting and disclosing information and established a spokesperson system with a spokesperson and an acting spokesperson. There will be an institutional shareholders' briefing at least once a year. Briefing information will be disclosed on the Company's website. (3) All Company's financial statements are announced or declared before the deadlines stipulated by laws and regulations.	In compliance with the provisions of the Code of Practice for Corporate Governance of Listed Companies.

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Assessment Items	Implementation Status	Implementation Status	Implementation Status	Difference from the Corporate Governance Best-Practice Principles for listed Companies and the Reasons
	Y	N	Explanation
quarters, and each month's operating conditions before the stipulated deadline?
8. Does the Company disclose other information to facilitate a better understanding of its corporate governance practices (e.g., including but not limited to employee rights, employee welfare, supplier relations, rights of shareholders, executives’ training records, risk management, policies and risk evaluation measures, the implementation of customer relations policies, and purchasing liability insurance for directors and supervisors)?	✓		(1) The Company has set up a dedicated webpage on its official website to reveal information regarding the Company's business operation, financial status, and other important disclosure, all of which are also regularly updated on MOPS. (2) The company's official website includes a corporate social responsibility webpage that regularly discloses information on employee rights, employee care, investor relations, and supplier relations. A corporate social responsibility report prepared by the Company can also be found for viewing. (3) Please refer to Table 1 for the actual status of the continuous education and training of the company's directors and supervisors. (4) The implementation of risk management policies and risk measurement standards is disclosed in the annual report "Financial Status and Performance Review and Analysis and Risk Matters" (5) The Company has established an exclusive platform for customer service with designated personnel to handle customer complaints. (6) The Company purchases liability insurance for directors and supervisors in the first quarter of each year, of which information will be	In compliance with the provisions of the Code of Practice for Corporate Governance of Listed Companies.

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Item.	Indicator	Explanation
1.1	Does the Company's Articles of Association stipulate that all directors/supervisors are elected through a candidate nomination system, and the nomination review standards and operating procedures shall be disclosed in MOPS when there is an election of directors and supervisors?	Has submitted the amendment to the Board Meeting for resolution
1.6	Does the Company hold a regular shareholders meeting before the end of May?	Maintain current status
1.9	Does the Company simultaneously upload the English version of the meeting notice 30 days before the regular shareholders meeting?	To be evaluated
1.10	Does the company upload the English version of the meeting handbook and supplementary materials 21 days before the regular shareholdersmeeting?	To be evaluated
1.11	Does the company upload the English version of the annual report 7 days before the shareholders meeting?	To be evaluated
1.15	Has the Company established regulations disclosed on the Company's website to prohibit insiders such as Company's directors or employees from using information that is not available in the market for profit?	Yes
1.16	Did the average equity pledge ratio of directors, supervisors and major shareholders in the evaluation year not exceed 50%?	To be evaluated
2.2	Has the company established a board diversity policy and disclosed the implementation of such policy on the Company's website and annual report?	Will try to cooperate
2.3	Does the Company appoint the same person or his/her spouse as the Company's Chairman and GM (CEO)?	Maintain current status

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Item.	Indicator	Explanation
2.7	Does the Company voluntarily set up more independent directors than required by the law?【If the number of independent directors exceeds 1/2 of the number of directors, an additional point will be added to the total score.】	To be evaluated
2.9	公Does the Company disclose the opinions of independent directors on major proposals of the board of directors in the annual report and the Company'sresponse to the opinions of independent directors?	Will try to cooperate
2.11	Does the company disclose the reasons for discussion and resolution of the Remuneration Committee in the annual report and the Company'sresponse to themembers’opinions?	o be evaluated
2.14	Does the Company establish a non-statutory committee with no less than three people, and more than half of the members are independent directors, whose composition,responsibilities and operating achievement are disclosed accordingly?	To be evaluated
2.20	Are there at least two independent directors attending each Board Meeting of the Company in person?	Yes
2.21	Does the company appoint full-time corporate governance personnel responsible for the related matters and disclose the operation and implementationofthe unitinthe annual report and the Company's website?	Yes
2.23	Has the Company's Board of Directors approved of guidelines and procedure for the Self-evaluation of the Board of Directors which should clearly stipulate that external evaluation should be conducted at least every three years, completed accordingly within the required deadline, and disclose the implementation and assessment result on the Company's website or the annual report?	To be evaluated
2.30	Does at least one of the company's internal auditors have a certificate such as an international internal auditor, international computer auditororaccountant examinationand qualifying certificate?	Maintain current status
3.1	Has the Company followed Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material Information of Companies with Listed Securities without being penalized for any violation?	Will try to cooperate
3.2	Does the Company simultaneously declare major information in English?	Maintain current status
3.4	Does the Company publish its annual financial statements within two months after the end of the fiscal year?	Maintain current status
3.5	Does the Company disclose the English version of the annual financial report (including financial statements and notes) on the Company's website or MOPS?	To be evaluated
3.6	Does the Company disclose the English version of the interim financial report (including financial statements and notes) on the Company's website or MOPS?	To be evaluated
3.8	Does the Company voluntarily publish the quarterly financial forecast reports without being corrected by the competent authority and penalized for any fault by the Stock Exchange or Taipei Exchange?	Maintain current status
3.12	Does the Company's annual report disclose specific and clear dividend policies?	Will try to cooperate

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Item.	Indicator	Explanation
3.13	Does the Company's annual report voluntarily disclose the individual remuneration of each director and supervisor?	Maintain current status
3.17	Does the Company's website disclose financial, business and corporate governance and related information?	Will try to cooperate
3.18	Does the Company establish an official website in English containing information about finance, business and corporate governance?	To be evaluated
3.20	Does the Company (on its own) hold at least two institutional investors conference, one at the beginning of the year and the other at the end of the year with an interval of more than three months? [If a corporate briefing is held at least once a quarter or every quarter, an additionalpoint willbe added to the totalscore]	To be evaluated
3.21	Does the company's annual report disclose the individual remuneration of the general manager and deputy general managers?	No such plan for now
4.3	Does the Company regularly disclose the specific promotion plan and implementation results of corporate social responsibility in the annual report and the Company's website?	Will try to cooperate
4.5	Has the Company's non-financial information disclosed in the Company's corporate social responsibility report and other reports been certified by the third party?	No such plan for now
4.6	Does the company refer to the International Bill of Human Rights in establishing policies and specific management plans to protect human rights disclosed onthe Company's website orannual report?	No such plan for now
4.7	Does the Company sign a collective agreement with the trade union per the Collective Agreement Act?	目Maintain current status
4.11	Has the Company disclosed the annual emissions of carbon dioxide or other greenhouse gases in the past two years?【If an external verification is obtained, anadditionalpoint willbe added to the totalscore. 】	Will try to cooperate
4.12	Does the Company establish energy saving and carbon reduction, greenhouse gas reduction, water reduction or other waste management policies?	Will try to cooperate
4.13	Has the Company obtained ISO 14001, ISO50001 or similar environmental or energy management system certification?	No such plan for now
4.15	Does the Company's website or annual report disclose the established integrity management policies, stipulating specific practices and planto prevent dishonest behavior?	Will try to cooperate
4.17	Does the company establish a supplier management policy requiring cooperation with suppliers to follow relevant regulations on issues such as environmental protection, safety or hygiene, working together to improve implementation of corporate social responsibility, and disclose related information on the Company's website or corporate social responsibility report?	Will try to cooperate

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Table 1: Continuing Education/Training of Directors

Title	Name	Date	HostingOrganization	Couse Name	Number of Hours
Chairman	Shao, Ming-Bin	08/20/2020	Securities & Futures Institute	Case Analysis on Criminal Conviction Related to Breach of Trust and Special Breach of Trust byDirectors and Supervisors	3
		09/01/2020	Taiwan Corporate Governance Association	Discussion on Legal Liability and Cases of Insider Trading	3
Director	Liu, Huang-Ji	02/18/2020	Taiwan Corporate Governance Association	Do Well by Doing Good	1
		08/21/2020	Taiwan Corporate Governance Association	How does a company establish a whistleblowing mechanism to strengthen corporategovernance in detectingandpreventingfraud	3
		08/25/2020	Taiwan Corporate Governance Association	Discussion on the Collapse of Corporate Governance and Its Influence Based on the Proceedingfrom the DatongCase	1
		10/29/2020	Taiwan Corporate Governance Association	Competition for the Operating Right of Companies: What Does the Supreme Court Say?	1
Independent Director	Ning, Guo-Hui	08/19/2020	Securities & Futures Institute	Seminar on Understanding the Risk-averse Trading of Futures Derivative Commodities and the Sustainable Operation of Enterprises	3
		08/27/2020	Securities & Futures Institute	Essential 5G technologies and application opportunities	3
Independent Director	Young, Gui-Hsiung	10/14/2020	Securities & Futures Institute	2020 Annual Prevention of Insider Trading and Insider Equity Trading Seminar	3
		10/16/2020	TWSE	2020 Corporate Governance and Corporate Integrity Promotion Conference for Directors and Supervisors	3
Independent Director	Chang, Cheng-Chung	12/18/2020	Securities & Futures Institute	Directors and Supervisors (including Independent) and Corporate Governance Executives Advanced Seminar-Early Warning and Analysis of Corporate Financial Crisis	3
Director	Lin, Guo-Xing	06/09/2020	Taiwan Corporate Governance Association	The Legal Risks of the Directors and Supervisors of Enterprises and the Countermeasures: From the Perspective of Enterprise Fraud and Money LaunderingPrevention	3
		109/09/01	Taiwan Corporate Governance Association	Discussion on Legal Liability and Cases of Insider Trading	3
Director	Lin, Shang-Liang	08/19/2020	Securities & Futures Institute	Discussion on Human Resources and M&A Integration Issues in the M&A Processes of Enterprise	3
		12/23/2020	Securities & Futures Institute	Discussion on how the company plans equity and the offensive and defensive strategies of the board of directors and shareholders meetings based on recent cases of competition for management rights	3

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Note: The overall strengths of the Company’s 13th Board of Directors

Position	Criteria Name	Gender	1	2	3	4	5	6	7
			Business Leadership	Operation Management	Emergency Handling	Industry knowledge	Global Market Vision	Financial and accounting analysis	Law
Chairman	Liu, Wei-Long (Note 1)	Male	✓	✓	✓	✓	✓	✓	✓
Director	Liu,Huang-Ji	Male	✓	✓	✓	✓	✓		✓
Director	Shao,Ming-Bin	Male	✓	✓	✓	✓	✓
Director	Chang, Cheng-Yueh (Note2)	Male	✓	✓	✓	✓	✓	✓
Director	Lin, Guo-Xing (Note 3)	Male	✓	✓	✓	✓	✓	✓
Director	Lin, Shang-Liang (Note 4)	Male	✓	✓	✓	✓
Independent Director	Young, Gui-Hsiung	Male	✓		✓	✓			✓
Independent Director	Ning, Guo-Hui	Male	✓	✓	✓	✓	✓	✓
Independent Director	Chang, Cheng-Chong	Male	✓	✓	✓	✓			✓

Note 1: Took office on February 1, 2021 Note 2: Took office on November 19, 2020 Note 3: Resign o November 19, 2020 Note 4: Resign on February 1, 2021

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• (4) The organization, responsibilities and operation of the Remuneration Committee: i. Members of the Remuneration Committee

Identity (Note 1)	Criteria Name	Professional Qualification Requirements, together with at Least Five Years Work Experience	Professional Qualification Requirements, together with at Least Five Years Work Experience	Professional Qualification Requirements, together with at Least Five Years Work Experience	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Number of other Company in Which the Individual Currently Serving as an independent Director	Remarks
		Professional Qualification of a Lecturer or Above in a Department of Business, Legal Affairs, Finance, Accounting or other Academic Department in Relevant to the Business of the Company at Public and Private Colleges and Universities	Judge, Public Prosecutor, Attorney, Certified Public Accountant, or other National Certified Professionals with Experience Related to the Business of the Company	With 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	Young, Gui-Hsiung		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	1	The 4th Committee
Independent Director	Ning, Guo-Hui			✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	2	The 4th Committee
Independent Director	Chang, Cheng-Chong		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	2	The 4th Committee

• Note 1: Please fill in director, independent director or others as the identity

• Note 2: If the member meets any of the following conditions during the two years before taking the position and during the term of office, please tick in the spaces below the conditions

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

• (2) Not a director or Supervisor of the Company or its affiliates (However, this does not apply to cases wherein the person is an independent Director of the Company or its parent company, subsidiary or subsidiary under the same company set up according to this Act of local ordinances).

• (3) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of issued shares of the Company or ranks as one of its top 10 shareholders;

• (4) Not a spouse, relative within the second-degree kinship, or lineal relative within the third-degree kinship, of any of the above person in the preceding three subparagraphs.

• (5) Not a director, supervisor, or employee of an institutional shareholder that directly holds 5% or more of the total number of outstanding shares of the Company of holds shares ranked among the top 5 holdings, or assigns representative4 as the director or supervisor to Article 27-1 or 27-2 of the Company Act (However, this does not apply to cases wherein the person in is an Independent Director of the Company or its parent company, subsidiary or subsidiary under the same company set up according to this Act or local ordinance).

• (6) Not a director, supervisor, or employee of another company controlled by the same person of the Company with a director seat or more than half of the voting share of the Company (However, this does not apply to cases wherein the person in is an Independent Director of the Company or its parent company, subsidiary or subsidiary under the same company set up according to this Act or local ordinance).

• (7) Not a director, supervisor, or employee of another company or institution whose chairman, general manager or its equivalent is the same person or spouse holding such position in the Company (However, this does not apply to cases wherein the person is an Independent Director of the Company or its parent company, subsidiary company set up according to this Act or local ordinances).

• (8) Not a director, supervisor, manager or shareholder holding 5% or more shares of a company or institution that has a business or financial relationship with the Company (However, this does not apply to case wherein the Company or institution holds more than 20% but less than 50% of the total number of outstanding shares of the Company, and the person is an Independent Director of the Company or its parent company, subsidiary or subsidiary under the same company set up according to this Act or local ordinances).

• (9) Not a professional individual, or an owner, partner, director, supervisor, officer, or spouse of a sole proprietorship, partnership, company, or institution, thereof, who conducts audits of the Company or any affiliate of the Company, or receives remuneration less than NTD 500,000 in the last two years while providing commercial, legal, financial, accounting services or consultation services, so long as this restriction does not apply to any member of the compensation committee, board or the M&A special committee that exercises powers pursuant to the Securities Exchange Law or the Corporate M&A Law.

• (11) Not been a person of any conditions defined in Article 30 of the Company Act.

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ii. Remuneration Committee Operation Status

• (i) The Company's Remuneration Committee comprises three members who shall exercise the due care of a good administrator and faithfully perform the following functions and powers and submit proposals to the Board of Directors for resolution.

• A. Regularly review the Remuneration Committee Charter and propose amendments

• B. Establish and regularly review the Company’s directors and executive personnel’s performance assessment standard, annual and long-term performance goals, remuneration policies, systems, standards and structures, and disclose the content of the performance assessment standards in the annual report.

• C. Regularly evaluate the achievement of the Company' s directors' and executive personnel's operating performance and determine the content and amount of their remuneration based on the results from the performance assessment standards.

• (ii) The tenure of the members of the 4th Remuneration Committee: From July 9, 2019, to June 26, 2022, the Remuneration Committee held 3 meetings in the latest year (A). The qualifications and attendance of the members are as follows:

Title	Name	Actual no. of meetings attended (B)	No. of meetings with entrusted attendance	Actual attendance rate (%) (B/A) (Note)	Remarks
Convener	Young, Gui-Hsiung	3	0	100%
Member	Nin, Guo-Hui	3	0	100%
Member	Chang, Cheng-Chung	3	0	100%
Other matters to be recorded 1. There is no such circumstance in which the Company's Board of Directors does not adopt or amend the Remuneration Committee's proposals. 2. Other resolution of the Remuneration Committee involving objections or expressed reservations by members that were recorded or stated in writing that require a resolution by the board of directors: None

(iii) Matters for Discussion and Resolution of Remuneration Committee, and Company's handling of members’ opinion

Date	Session	Matter for Discussion	Resolution	Handling of the Members’ Opinions
Jan. 16, 2020	2nd Meeting of 4th Committee	The appointment and proposed compensation of the Company's chief accounting officer	Approved	No other opinions
Jan. 16, 2020	2nd Meeting of 4th Committee	Discussion on the 2019 year-end bonus proposal for the Company’s executive personnel	Approved	No other opinions
Mar. 25, 200	3rd Meeting of 4th Committee	Proposal for the remuneration distribution to directors and supervisors in 2019。	Approved	No other opinions

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Nov. 10, 2020	4th Meeting of 4th Committee	Discuss the 2019 directors and supervisor's remuneration proposal for those executive officers of the Company acting as the legal representatives of the reinvested "Reiju Construction Co., Ltd."	Approved	No other opinions
Nov. 10, 2020	4th Meeting of 4th Committee	Discuss the 2019 directors and supervisor's remuneration proposal for those executive officers of the Company acting as the legal representatives of the reinvested " M Radio Broadcasting Co., Ltd.‖	Approved	No other opinions
Nov. 10, 2020	4th Meeting of 4th Committee	Discuss the Company's 2019 surplus distribution to executive personnel as their remunerations	Approved	No other opinions
Nov. 10, 2020	4th Meeting of 4th Committee	Discuss the proposal of 2019 year-end bonus distribution to the Company's executive personnel	Approved	No other opinions

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• (5) Corporate Social Responsibility (CSR) Status, Difference with Corporate Social Responsibility Best Practice Principals for TWSE/GTSM Listed Companies

Listed Companies
Evaluation Item	Implementation Status			Difference with Corporate Social Responsibility Best Practice Principles for Listed Companies and the reasons
	Y	N	Abstract Illustration
1. Has the Company conduct risk evaluation for the environmental, social and corporate governance issues related to the Company's operation based on the materiality principle and formulated related risk management policies or strategies?	✓		Adopting the best international risk management system, the Three Lines of Defense model ensures that all risks are being carefully monitored and implementing risk management advocacy in various management meetings or courses for all staff, including first-line managers.	Compliant with the "Corporate Social Responsibility Best Practice Principals for TWSE/GTSM Listed Companies".
2. Does the company establish exclusively (or concurrently) dedicated first-line managers authorized by the board to propose the corporate social responsibility policies and reporting to the board of directors?	✓		The company has established a Corporate Social Responsibility Committee. The Board of Directors authorizes the senior management staffs to handle the monthly supervision and report the implementation status to the board of directors every six months	Compliant with the "Corporate Social Responsibility Best Practice Principals for TWSE/GTSM Listed Companies".
3. Environmental issues (1) Does the company establish proper environmental management systems based on the characteristics of its industry? (2) Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment?	✓ ✓		(1) The company formulates related regulations for environmental management, and the dedicated unit is the administrative office of the management department, which is responsible for the supervision of the office environment and equipment management and regularly carries out maintenance to ensure normal operation of the equipment and to keep tidy and neat the Company's working environment (2) The Company actively promotes electronic office documents and is committed to the efficient application of various resources, advocacy in recycling, resource recovery, and reducing the impact of environmental pollution.	The Company is not a polluting industry in Taiwan and produce no harmful environmental factors such as air pollution, contaminated water, waste, poison, and noise that affect the environment. Nevertheless, we continue to reduce the environmental impact caused by life and work. Therefore, there is no much difference with the "Corporate Social Responsibility Best Practice Principals for TWSE/GTSM Listed Companies‖.

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Difference with Corporate Social Responsibility Best Practice Principles for Listed Companies and the reasons
	Y	N	Abstract Illustration
(3) Is the Company aware of the impact of climate change in its operations, and has it implemented greenhouse gas checking and developed a strategy for reducing energy consumption, carbon emission and greenhouse gas? (4) Does the company make statistics on greenhouse gas emissions, water consumption, and total waste in the past two years and formulate energy conservation and carbon reduction policies, greenhouse gas reduction, water reduction, or other waste management?	✓		(3) The Company strives to save energy and reduce carbon emission by adopting the method of turning off unnecessary light power to reduce energy use and subsequently the generation of greenhouse gases to make less of the impact of climate change (4) The company makes statistics on the amount of water, electricity and carbon emissions used in 2017 and 2018 and formulates specific measures to effectively reduce the use of water and electricity, and the generation of waste.
4. Social issues (1) Does the company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights?	✓		(1) The Company complies with relevant labor laws and regulations and has no labor disputes or lawsuits due to violation of the Labor Standard Act. The Company also formulates human rights policies by the spirit of the International Bill of Human Rights. In addition, the appointment, dismissal and remuneration of employees are handled by the company’s management provisions, and employees are insured by labor insurance and national health insurance in compliance with laws and regulations; additional group insurance and health checkup are parts of employee benefit; the employee's retirement measures of the Company is based on relevant provisions of the Labor Pension Regulations; establishment of an	No significant difference

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Difference with Corporate Social Responsibility Best Practice Principles for Listed Companies and the reasons
	Y	N	Abstract Illustration
(2) Does the company stipulate and implement reasonable employee welfare policies (including remuneration, vacation and other benefits, etc.) and properly reflect operating performance or achievement in employee remuneration? (3) Does the company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis? (4) Does the company provide its employees with effective career development and training plan? (5) Does the company follow relevant laws and international standards regarding customer health and safety, customer privacy, marketing and labelling of products and services, and formulate applicable consumer protection policies and appeal procedures? (6) Does the company establish supplier management	✓ ✓ ✓ ✓ ✓		Employee Welfare Committee to handle various welfare activities to protect the rights and interests of employees. (2) The Company has set up the Remuneration Committee to regularly review and formulate the Company's salary and welfare policies, and distribute the profit to employees every year based on the proportion set in the Company Articles of Association. (3) The Company provides employees with physical health check every year and holds health seminars from time to time to ensure employees' health. In addition, as for the safety of the working environment, the Company will arrange professional education and training for relevant personnel to acquire professional licenses. (4) The Company regularly provides employee education and training and assists employees to apply for external education and training subsidies. (5) The Company's webpage provides consumer channels for feedback to ensure the rights and interests of consumers, and relevant personal data protection rules have been established to protect customers' privacy; all contracts used in the operation of the real estate rental and sales business are formalized as required by the government to protect consumers’ rights and interests.

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Difference with Corporate Social Responsibility Best Practice Principles for Listed Companies and the reasons
	Y	N	Abstract Illustration
policies and require suppliers to comply with relevant regulations in environmental protection, occupational safety and health, or labor rights, and report the implementation status?			(6) The Company has established supplier corporate social responsibility measures, requiring suppliers to comply with relevant regulations regarding labor rights, labor health and safety, environmental protection, and integrity management. When choosing suppliers for cooperation, legitimacy and quality are the Company's first concern, while suppliers' records will be carefully reviewed as a reference indicator for collaboration. In addition, the Company will continue to requires cooperative suppliers to comply with applicable regulations and strengthen related contract terms to fulfil the social responsibilities.
5. Does the Company follow internationally recognized guidelines in preparing and publishing corporate social responsibility report to disclose non-financial information about the Company? Didi the Company hire a third party to verify and provide assurance for such a report?	✓		The company has prepared a corporate social responsibility report per the relevant guidelines of the Global Reporting Initiative (GRI) and has not yet obtained verification or assurance from the third party.	No significant difference
6. If the Company has established the corporate social responsibility principles based on ―the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies‖, please describe any discrepancy between the principles and their implementation: No significant discrepancy
7. Other important information that helps in understanding the operation of corporate social responsibility: (1) Environmental protection: The Company is not a high contaminating industry and has no related environmental issue. (2) Community participation, social contribution, social service, social welfare, human rights, safety and health, and other soci al responsibility activities: The company actively participates in social welfare activities and cares for disadvantaged groups through various activities of the Wenxiang Education Foundation. Related subsidiaries donate wall niches in the columbaria as contributions to public welfare activities. (3) Consumer rights: The company provides customers with a dedicated hotline for complaints free of charge to protect the rights and interests of consumers

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Implementation of Ethical Corporate Management Status, Difference with Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Company

TWSE/GTSM Listed Company
Evaluation Item	Implementation Status			Differences with Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
	Y	N	Abstract Illustration
1. Establishment of ethical corporate management policies and programs (1) Does the Company develop business integrity policies approved by the Board and declare its ethical corporate management policies and procedures in its guidelines and external documents, as well as the commitment from its board to implement the policies? (2) Has the Company establish a risk assessment mechanism against unethical conduct, analyze and assess regularly business activities within their business scope with a higher risk of being involved in unethical conduct, and develop prevention programs accordingly. Precautionary measures in respect of business activities with a high risk of dishonesty and at least in clue preventive measure in Article Principles for TWSE/TPEx Listed Company? (3) Does the Company establish policies to prevent unethical conduct with clear statements regarding relevant procedures, guidelines of conduct, punishment for violation, rules of appeal, and the commitment to implement the policies?	✓ ✓ ✓		(1) The company has formulated the "Code of Integrity Management". It has proposed to the board members and executive personnel of the Company to exercise the due care of a good administrator and perform their powers with a high degree of prudence. (2) The company has regulated relevant precautions in response to paragraph 2 of Article 7 of the "Ethical Corporate Management Status, Best Practice Principles for TWSE/GTSM Listed Company" issued by the Stock Exchange or other business activities within the company's business scope that has a higher risk of dishonest behavior, and require relevant units to implement them; at the same time, the corporate governance and integrity management promotion team will supervise the implementation and continue to follow up and strive on the improvement of implementation. (3) The company has established the "Code of Ethical Conduct" and "ethical Corporate Management Operating Procedures and Behavior Guidelines", which clearly define the prevention of dishonest behavior plans, operating procedures, behavior guidelines, and punishment and appeal systems for violations.	No significant difference
2. Implementation of Ethical Corporate Management (1) Does the Company evaluate business partners’ethical	✓		(1) The company conducts external commercial	No significant difference

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Differences with Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
	Y	N	Abstract Illustration
records and include ethics-related clauses in the business contracts? (2) Does the Company establish a dedicated unit under the Board of Directors to promote corporate integrity management, and regularly (at least once a year) report to the Board of Directors about its integrity management policies, plans for preventing unethical behaviors, and monitoring implementation status?? (3) Does the Company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it?	✓ ✓		activities while the Finance Department will review the contract with the legal office to specify the integrity behavior clause in the agreement signed by both parties to avoid transactions with people with a record of dishonest behavior。 (2) The company has set up a corporate governance and integrity management promotion team to monitor any unethical behavior within the company and regularly submit reports on ―implementation, measures, and promotional effectiveness‖ to the Board of Directors every six months. (3) To effectively prevent possible conflicts of interest and take necessary measures immediately as needed, employees are obligated to report their private business activities to the Human Resources Department to avoid potential conflicts of interest. It will be forwarded to the department head for approval and then hand over to the related unit for record-keeping. Executive personnel should directly report to the Board of Director for approval before taking up a part-time position. The Company will carefully evaluate the employee's part-time work status to ensure no conflict of interest. The Company will formulate policy to prevent conflict of interest and provide appropriate communication channel based on the "Code of ethical corporate management"and"Integrity Management

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Differences with Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
	Y	N	Abstract Illustration
(4) Has the Company established effective systems for both accounting and internal control to facilitate ethical corporate management, which is audited by either internal auditors or CPAs to conduct the risk evaluation for unethical conduct to make up a related audit plan based on the result to prevent such behavior and monitor the implementation status? (5) Does the company regularly hold internal and external educational trainings on operational integrity？	✓ ✓		Operating Procedures and Behavior Guidelines." (4) to ensure the implementation of integrity management, the company has established an effective accounting system and internal control system. The internal auditors regularly conduct compliance check. In addition, the Company also complies with relevant law and regulations such as the "Company Act" and "Securities and Exchange Act" and assign accountants to verify and certify related accounting report and data. (5) The Company's executive personnel regularly participate in relevant external education and training courses, and internal auditors regularly perform compliance check to ensure the implementation of ethical corporate management.
3. Operation of the integrity channel (1) Does the company establish both a reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for a follow-up? (2) Does the company establish standard operating procedures for confidential reporting on investigating accusation cases? (3) Does the Company take measures to protect the reporter from improper treatment?	✓ ✓ ✓		The Company’s regulations on Ethical Corporate Management have clearly defined a whistleblower system, which includes: (1)A specific reporting and reward system with a convenient reporting channel managed by dedicated personnel. (2)Standard operating and investigation procedures for confidential reporting. (3)Protection for the reporter from improper treatment by the related rules and procedure stipulated by the Company. The Corporate Governance and Integrity	No significant difference

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Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Differences with Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies and Reasons
	Y	N	Abstract Illustration
			Management Team is the unit responsible for related affairs, and there is no reporting of unethical conduct in 2020.
4. Strengthening of information disclosure (1) Does the company disclose its ethical corporate management policies and the results of its implementation on the company’s website and MOPS?	✓		(1) The Company has disclosed the code and the content of ethical corporate management policy and is implementation effectiveness on the Company’s website. (2) The Company has disclosed related information through MOPS in a thorough, appropriate, timely and precise manner to the competent authority and the public.	No significant difference
5. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation: The "Ethical Corporate Management" stipulated by the Company is based on the provisions of the "Guidelines for the Adoption of Codes of Ethical Conduct for TWSE/GTSM Listed Companies" issued by the Stock Exchange. It requires relevant units of the Company to implement the policies and regulations, which should be internalized into daily operation management, so there is no difference between actual operation and the guidelines set by the Stock Exchange.
6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies): Revised the Ethical Corporation Management System on May 14, 2008.

• (6) If a company has formulated a corporate governance code and related regulations, it should disclose its inquiry method: For the company’s "Code of Practice on Corporate Governance" and "Code of Corporate Social Responsibility", please visit the company's official website for inquiries. (http://www.longbon.com.tw/)

• (7) Other important information that is sufficient to enhance the understanding of corporate governance and operation conditions must be disclosed together:

• The company’s official website has a "Corporate Social Responsibility" link and has produced and updated corporate social responsibility annual reports to disclose ethical corporate management effectiveness.

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(8) Implementation of the internal control system

i. Internal Control Statement

Long Bon International Co., Ltd. Statement of Integral Control System

Date: March 23, 2021 The Company’s internal control system during the year 2020, according to the result of self-assessment, is thus stated as follows:

1. The Company acknowledges that its Board of Directors and management are responsible for establishing, implementing, and maintaining an adequate internal control system. The Company has established such a system. The internal capital system is aimed to provide reasonable assurance over the effectiveness and the efficiency of operations (including profitability, performance and protection of assets), reliability, timeliness, transparency of our reporting, and compliance with applicable rulings, laws and regulations.

2. The internal control system has its inherent limitation. An effective internal control system can only provide reasonable assurance to achieve three stated objects no matter how perfect the system's design is; moreover, the effectiveness of an internal control system may be subject to changes in environment and circumstances. Nevertheless, the internal control system contains self-monitoring mechanisms, and the Company will take immediate remedial actions in response to any identified deficiencies.

3. The Company evaluates the design and operating effectiveness of its internal control system based on the criteria for the internal control system specified in the "Regulations Governing the Establishment of Internal Control Systems by Public Companies" (hereinafter referred to as "the Regulations‖). The criteria adopted by "the Regulations" identify five key components of internal managerial control: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring activities. Each component also includes various items. For the preceding items, please see " the Regulation".

4. The Company has adopted the aforesaid Regulation for internal control to evaluate the effectiveness of design and execution of internal control system.

5. Based on the above-mentioned result of evaluation, the Company suggests that the internal control system, including the design and execution of internal control relating to the effectiveness and efficiency of operation, the reliability of financial reporting the compliance of applicable law and regulations has been effective and they can reasonably assure the aforesaid goals have been achieved.

6. This statement will be the main content for annual report and prospectus and will be disclosed publicly. Any falsehood, concealment, or other illegality in the content made public will entail legal liability as mentioned in Article20, 32, 171 and 174 of Securities and Exchange Law.

7. This statement has been approved by the Board of Directors in the meeting on March 23, 2021, and all of the 7 directors in presence express no dissenting opinions and agree to the contents of this statement.

Long Bon International Co., Ltd.

Chairman (General Manager)

• ii. If commission an accountant to audit the internal control system, please disclose the accountant's audit report: None.

• (9) Please disclose content, significant defaults and the improvement made in the most recent year as of the publication date of the annual report regarding the punishment to the Company and its employees by the law, or the Company’s penalty to its employees for violation of its internal control system, which might cause significant impacts on the shareholders’ right and benefit or the stock price: None.

• (10) Important resolutions of the shareholders’ meeting and the board meetings in the latest year as of the date of publication of the annual report:

• i. Important resolutions of the 2020 General Shareholders’ Meeting: In 2020, as of the publication date of the annual report, the Company held one general shareholders' meeting, which was held on June 18, 2020. The summary of the items resolved

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and passed during the meeting is as follows:

• (i) The Company’s 2019 business report and financial statements, etc.

• (ii) The Company’s distributable surplus for the year 2019 is NT$4,327,830,399. However, in response to the high uncertainty of the overall economic situation and to retain the company’s operating funds, no dividends are distributed.

• (iii) The amendment to the ―Company’s Article of Incorporation‖

• (iv) The amendment to the Company’s ―Procedures for Election of Directors and Supervisors‖

• ii. Implementation status of the important resolution of the 2020 General Shareholder’s Meeting (i) Approved the 2020 business report and financial statements: Related information has submitted by relevant law and regulations to the competent authority for declaration and publication.

• (ii) Approved the 2019 surplus distribution: No dividends are distributed as resolved in the shareholders’ meeting

• (iii) Approved the amendment to the ―Company’s Article of Incorporation‖: Effective after the resolution of the shareholders’ meeting

• (iv) Approved the amendment to the ―Procedures for Election of Directors and Supervisors‖: Effective after the resolution of the shareholders’ meeting

• iii. Important resolutions of the Board of Director in 2020, as of the publication date of the annual report:

In 2020, as of the publication date of the annual report, the Company held 9 Board Meetings. The summary of the important resolutions is as follows:

The 12th meeting of the 13th Board of Director: (January 16, 2020)

1. Discuss the appointment and remuneration of the company's Chief Accounting Officer

2. The proposal of the 2019 year-end bonus for the Company's executive officers.

The 13th meeting of the 13th Board of Director: (March 6, 2020)

1. Planning to obtain the land property with Land No. 63 on 4th Subsection, Juguang Section, Wanhua District, Taipei City from the related party Xiwang Investment Co., Ltd.

2. Planning to obtain 30 parking spaces on the basement floor of Asia Plaza Building at No. 50, Section 1, Zhongxiao West Road, Zhongzheng District, Taipei City from the related party, Fortune Base Development Co. LTD.

The 14th meeting of the 13th Board of Director: (March 16, 2020)

1. Planning to execute the thirteenth treasury stock mechanism to protect the Company’s credit and shareholders’ rights.

The 15th meeting of the 13th Board of Director: (March 25, 2020)

1. 2019 annual business report and financial statements

2. 2019 surplus distribution

3. 2019 employment compensation distribution

4. The amendment to ―Company’s Article of Incorporation‖

5. The amendment to the Company’s ―Procedures for Election of Directors and Supervisors‖

6. The amendment to ―Remuneration Committee Charter ―

7. The amendment to ―Audit Committee Charter ―

8. The "2019 Internal Control System Self-Assessment Results"

9. Planning for the 2020 General Shareholders’ Meeting

10. 10.Increase in investment in the subsidiary, ―Longfu Real Estate Co. Ltd.‖

11. 11.Increase in the purchase of shares of Taishan Enterprise Co., Ltd.

12. 12.Proposal made in the 3rd meeting of the 4th Remuneration Committee

The 16th meeting of the 13th Board of Director: (May 14, 2020)

1. Planning to acquire all shares of Reiju Construction Co., Ltd. held by Everwin

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Investment Co., Ltd

1. Proposed short-term financing with Dazhi Branch, Changhua Commercial Bank to increase operating capital.

2. Proposed short-term financing with Minquan Branch, Commonwealth Commercial Bank to increase operating capital

3. Planning to purchase from the Company’s related party the property on 8th Floor, No. 4, Section 3, Minquan East Road, Zhongshan District, Taipei City and 2 parking space located at the 3rd underground floor and the corresponding land ownership portions.

4. Proposal for change in official seal custodian and custodian agent

The 17th meeting of the 13th Board of Director: (June 19, 2020)

1. Proposed disposition of shares of J & V Energy Technology Co., Lt

2. Proposed short-term financing with Wanhua Branch of Taiwan Business Bank to increase operating capital.

3. Proposed short-term financing with Chongxin Branch of Bank SinoPac to increase operating capital.

4. Proposed medium-term financing with Tianmu Branch of Yuanta Commercial Bank to increase operating capital.

5. Discussion on the record date for capital reduction due to share repurchase and the cancellation procedure of shares

The 18th meeting of the 13th Board of Director: (August 12, 2020)

1. 2020 2nd quarter consolidate financial statements

2. lanning to sell the property on the 6th floor of Taichung Long Bon World Trade Building with a parking space on the 5th underground floor to Reiju Construction Co., Ltd.

3. Proposed medium-term financing with Tianmu Branch of Yuanta Commercial Bank to increase operating capital.

4. Proposed short-term financing with Chongxin Branch of Bank SinoPac to increase operating capital

The 19th Meeting of the 13th Board of Directors (September 21, 2020)

1. Proposed increase in funding for Longfu Real Estate Co. Ltd. to integrate the development of funeral service

2. In response to the business development, planning to establish Longde International Development Co., Ltd.

The 20th Meeting of the 13th Board of Directors (November 10, 2020)

1. Operation plan for 2021

2. Internal audit plan for 2021

3. Planning to cancel endorsement guarantee for subsidiaries resoluted on 26[th] meeting of

4. 12[th] Board of Directors

5. Planning to provide endorsement guarantee for new subsidiary, Everwin Investment Co., Ltd

6. Proposed medium-term financing with Xinan Branch of Bank of Taiwan

7. The Company’s loan to Sin Wei Jie Construction Limited Liability Company

8. Appointment of CPA and related compensation

9. Appointment of the Company’s Chief Financial Officer

10. The 4[th] resolution of the 4[th] Remuneration Committee

The 21st meeting of the 13th Board of Director: (January 26, 2021)

1. Planning to increase capital as loan to the subsidiary, Reiju Construction Co., Ltd.

2. Planning to establish a new subsidiary to develop new domestic operation in real estate

3. Planning to establish a new subsidiary to develop new domestic operation in funeral service

4. Amendment to the ―Regulations Governing Procedure for Board of Directors Meetings‖

5. Amendment to the ―Rules Governing the Scope of Power of Independent Director‖

6. Amendment to the ―Audit Committee Charter‖

7. Amendment to the ―Guidelines for the Adoption of Codes of Ethical Conduct‖

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1. Amendment to the ―Remuneration Committee Charter‖

2. Organization adjustment proposal

The 22nd meeting (extraordinary) of the 13th Board of Director: (February 1, 2021)

1. The Company’s Chairman concurrently serving as GM

The 23rd meeting (extraordinary) of the 13th Board of Director: (March 23, 2021)

1. 2020 business report and financial statements

2. Surplus distribution for 2020

3. 2020 remuneration distribution to directors and employees

4. Result of 2020 self-evaluation of internal control system

5. Proposed short-term financing form First Commercial Bank Business Division

6. Proposed request for extension of corporate credit facility from Far Eastern International Bank

7. Amendment on Article 5 and 7 of the ―Procedures for Loaning Funds to Others‖

8. Planning for the 110the General Shareholders Meeting

9. Resolution of the Company's 4th and 5th Remuneration Committee

The 24th meeting of the 13th Board of Director: (May 12, 2021)

1. Purchase plan for the property, 6th Fl of Asia Plaza Building (6th Fl & 6th Fl-1) at No. 50, Section 1, Zhongxiao West Road, Zhongzheng District, Taipei City from the related party, Global Funeral Service Co. Ltd.

2. Proposed leasing of the office from the related party on the 9th floor of No. 50, Section 1, Zhongxiao West Road, Zhongzheng District, Taipei City

3. Proposed request for renewal of the issue of commercial promissory notes from the Minquan Branch of the Union Bank of Taiwan

4. Proposed stock pledge loan from Wenshan Branch of Shanghai Commercial Savings Bank

5. Proposed medium-term guaranteed loan from the Wenshan Branch of Shanghai Commercial Savings Bank.

6. Adjustment in the Company’s structure

7. Appointment of the Company’s Deputy General Manager

8. Appointment and Dismissal of the Company’s Chief Accounting Officer

9. Appointment and Dismissal of the Company’s Chief Corporate Governance Officer

10. The 6th Resolution of the Company’s 4th Remuneration Committee

11. (12) Records and written statements from the directors or supervisors who have different opinions about important resolutions adopted by the board in the latest year, as of the publication date of the annual report, and the main content: None

12. (13) Summary of the resignation and dismissal of personnel in the latest year, as of the publication date of the annual report including the chairman, general manager, chief accounting officer, chief financial officer, head of the management team and internal audit manager, R&D director, etc.

Summery Table for Termination of Employment Relationship

Title	Name	Employment start date	Termination Date	Reason for Termination
Chief of Financial Officer	Hsu, Jin-Yi	111.09. 2018	02.29. 2020	Personal career planning
Chief of Accounting Officer	You, Wan-How	12.04. 2019	05.12. 2021	Transfer of employment

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5. Information regarding Independent Audit Fee

(1) Audit fee and range of fees

(1) Audit fee and range of fees	(1) Audit fee and range of fees
Accounting Firm		CPA Name		Audit Period		Remarks
KPMG International		Chang, Shu-Ying	Wu, Mei-Ping	2020
Range		Fee Item	Audit Fee		Non-audit Fee
1	Under NTD 2,000 thousand				
2	NTD 2,000 thousand (inclusive)～ NTD 4,000 thousand
3	NTD 4,000 thousand (inclusive)～ NTD 6,000 thousand
4	NTD 6,000 thousand (inclusive)～ NTD 8,000 thousand		
5	NTD 8,000 thousand (inclusive)～ NTD 10,000 thousand
6	NTD 10,000 thousand (inclusive)

(2) If the non-audit fees paid to the certifying CPA, the CPA’s firm and the firm’s affiliated businesses are more than 25% of the audit fees, please disclose the audit and non-audit fees and the non-audit services.

								Unit: NTD thousand	Unit: NTD thousand
Accouting Firm	CPA Name	Audit Fee		Non-audit Fee				Audit Period	Remarks
			System Design	Registrati on	HR	Others	Sub-total
KPMG Internation al	Chang, Shu-Ying	7,880	0	43	0	550	593	109年2020
	Wu, Mei-Ping

(3) If there is a change of the accounting firm, and the audit fee in the year of change is lower than that in the previous year, please disclose the audit fees before and after the change and the reasons: None

(4) If the audit fee is reduced by more than 10% over that in the previous year, please disclose the amount of audit fee reduced, the proportion and reason for the reduction: None

6. Information on Alteration of the Company’s Independent Auditor: None

7. The employment of the Company’s Chairman, General Manager, Financial or Accounting Manager with the Firm of the Auditing CPA or Its Affiliated Businesses in the Past Year: None

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8. Changes in Shareholding and Equity Pledge of Directors, Supervisors, Managers and Shareholders Holding More Than 10% of the Company’s Shares in the Past Year and as of the Date of Publication of the Annual Report

(1) Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

Title	Name	2020		2021, as of May2
		Shareholding Increase/(Decrease)	Pledge Share Increase/(Decrease)	Shareholding Increase/(Decrease)	Pledge Share Increase/(Decrease)
Chairman	Fortune Base Development Co. LTD	404,665	7,594,800	1,085,665	(7,350,200)
	Representative: Liu, Wei-Long	0	0	0	0
Director	Global Funeral Service Co. LTD	(10,099,020)	(7,686,480)	(6,423,020)	(2,966,480)
	Representative: Liu-Huang-Ji	0	0	0	0
Director	Fortune Base Development Co. LTD	404,665	7,594,800	1,085,665	(7,350,200)
	Representative: Chang, Cheng-Yueh	0	0	0	0
Director	Global Funeral Service Co. LTD	(10,099,020)	(7,686,480)	(6,423,020)	(2,966,480)
	Representative: Shao-Ming-Bin	0	0	0	0
Independent Director	Young, Gui-Hsiung	0	0	0	0
Independent Director	Ning, Guo-Hui	0	0	0	0
Independent Director	Chang, Cheng-Chong	0	0	0	0
General Manager	Liu, Wei-Long	0	0	0	0
DeputyGM	Lin,Shang,Liang	0	0	0	0
Deputy GM (Chief of AccountingOfficer)	Li, Shu-Hui	0	0	0	0

(2) Information that the equity transfer counterparty is a related party: None

(3) Information that the equity pledge counterparty is a related party: None

9. Information on the top Ten Shareholders and their related Parties, Spouse, First and Second-degree Relatives

Name (Note 1)	Own Shareholding	Own Shareholding	Shareholdings of the Spouse and Minor Children	Shareholdings of the Spouse and Minor Children	Shareholding in other people’s names	Shareholding in other people’s names	Name and relationship of top 10 shareholder who has the interested-party relationship per the Financial AccountingStandards(Note 3)	Name and relationship of top 10 shareholder who has the interested-party relationship per the Financial AccountingStandards(Note 3)
	Share	(%)	Share	(%)	Share	(%)	Name	Relation
Fortune Base Development Co. LTD	51,666,340	13.0 9	0	0.00	0	0.00	None	None

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Representative: Shao, Ming-Bin	0	0	0	0.00	0	0.00	Yifeng Investment Co., LTD	Chairman of Yifeng Investment Co., LTD
							Youlong Construction Development Co., Ltd.	Chairman ofYoulong Construction Development Co., Ltd.
Global Funeral Service Co. LTD	44,072,080	11.1 7	0	0.00	0	0.00	None	None
Representative: Tang, Shun-Zhen	0	0.00	0	0.00	0	0.00	Youlong Construction Development Co., Ltd.	Chairman ofYoulong Construction Development Co., Ltd.
Ontario Investment Co., Ltd.	37,933,600	9.61	0	0.00	0	0.00	None	None
Representative: Li, Jin-Jie	9,020,000	2.29	0	0.00	0	0.00	Yifeng Investment Co., LTD	Director of Yifeng Investment Co., LTD
Reiju Construction Co., Ltd.	36,608,592	9.27	0	0.00	0	0.00	None	None
Representative: Chang, Cheng-Yueh	285	0.00	0	0.00	0	0.00	None	None
Yifeng Investment Co., LTD	34,542,100	8.75	0	0.00	0	0.00	None	None
Representative: Shao, Ming-Bin	0	0	0	0.00	0	0.00	Fortune Base Development Co. LTD	Chairman of Fortune Base Development Co. LTD
							Youlong Construction Development Co. Ltd.	Chairman ofYoulong Construction Development Co. Ltd.
Circle Square Creation Co., Ltd.	17,178,680	4.35	0	0.00	0	0.00	None	None
Representative: Hsu Li-Fong	0	0	0	0.00	0	0.00	None	None
Youlong Construction Development Co. Ltd.	14,962,840	3.79	0	0.00	0	0.00	one	None
Representative: Shao, Ming-Bin	0	0	0	0.00	0	0.00	Fortune Base Development Co. LTD	Chairman of Fortune Base Development Co. LTD
							Yifeng Investment Co., LTD	Chairman of Yifeng Investment Co., LTD
Tsai, Kun-Hong	11,053,600	2.80	0	0.00	0	0.00	None	None
Luo,Jie	10,914,021	2.76	0	0.00	0	0.00	None	None
Li, Jing-Jie	9,020,000	2.29	0	0.00	0	0.00	Yifeng Investment Co., LTD	Director of Yifeng Investment Co., LTD

Note1 ： All the top ten shareholders should be listed. If they are Institutional shareholders, the names of the juridical persons and the names of the representatives should be listed separately.

Note 2 ： The calculation of the shareholding ratio refers to the calculation based on the shareholding in their

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own name and the name of their spouse, minor children, or others.

Note 3 ： The shareholders listed in the previous disclosure, including juridical persons and natural persons, shall disclose their relationship under the issuer's financial report preparation standards.

10. The Total Number of Shares and Total Equity Stake Held in Any Single Enterprise by the Company, Its Directors and Supervisors, Managers, and Any Companies Controlled Either Directly or indirectly By the Company

Consolidated Shareholding Ratio

			May2. 2021 / Unit: Thousand Share;%	May2. 2021 / Unit: Thousand Share;%	May2. 2021 / Unit: Thousand Share;%	May2. 2021 / Unit: Thousand Share;%
Reinvestment Business (Note)	Company’s Investment		Business investment directly or indirectly controlled by directors, supervisors, and executive personnel		Consolidated Investment
	Shares	%	Shares	%	Shares	%
Everwin Investment Co., Ltd	244,025	100.00%	0	0.00%	244,025	100.00%
Longbao Enterprise Co., Ltd.	60,000	100.00%	0	0.00%	60,000	100.00%
Longji Holdings (S) Pte Ltd	17,979	96.89%	0	0.00%	17,979	96.89%
Reiju Construction Co., Ltd.	73,928	90.10%	0	0.00%	73,928	90.11%
Longfu Real Estate Co. Ltd.	80,000	100.00%	0	0.00%	80,000	100.00%
Long De International Development Co., Ltd.	100	100.00%	0	0.00%	100	100.00%
Longhui Development Co., Ltd.	0	0.00%	56,000	100.00%	56,000	100.00%
Dong Hwa International Golf Recreation Co. LTD	0	0.00%	3,000	100.00%	3,000	100.00%
Sanzhi Tzu-An-Yuan Co., Ltd.	0	0.00%	0	100.00%	0	100.00%
North Bay Recreation Co., Ltd.	0	0.00%	7,391	82.13%	7,391	82.13%
Ruicheng Construction Co., Ltd.	0	0.00%	5,950	100.00%	5,950	100.00%
RAiO Technology INC.	0	0.00%	7,000	100.00%	7,000	100.00%
Ryan Development Co., LTD.	0	0.00%	25,000	100.00%	25,000	100.00%
Rui Zhao Engineering Co., Ltd.	0	0.00%	99	19.80%	99	19.80%
Xiamen Reiju Architectural EngineeringCo.,Ltd.	0	0.00%	0	89.23%	0	89.23%
Ruiying Construction Co., Ltd.	0	0.00%	390	39.00%	390	39.00%
Shengji Interior Design Co., Ltd.	0	0.00%	2,000	100.00%	2,000	100.00%
Ruipo Green Innovation Co., Ltd.	0	0.00%	200	100.00%	200	100.00%

Note: Investment made by the Company using the equity method

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1. Capital and Shares

IV. Capital Overview

(1) Source of Capital

(1) Source of Capital	(1) Source of Capital	(1) Source of Capital	(1) Source of Capital	(1) Source of Capital	(1) Source of Capital	(1) Source of Capital	(1) Source of Capital	(1) Source of Capital
i. Changes in equity in the most recent year and up to the publication date of the annual report									May2,2021
Month/ Year	Issue Price	Authorized Share Capital		Paid-in Capital		Remarks
		Share	Amount	Share	Amount	Source of Capital		Capital Increase by Assets Other than Cash	Others
01/1988	10	6,000,000	60,000,000	6,000,000	60,000,000	Venture capital		None	Ministry of Economic Affairs Jan. 22, 1988, Document No.(77)2143
09/1988	10	19,980,000	199,800,000	19,980,000	199,800,000	Cash capital increase	139,800,000	None	Ministry of Economic Affairs Sept 9, 1988, Document No.(77)27405
05/1990	10	46,000,000	460,000,000	46,000,000	460,000,000	Cash capital increase	260,200,000	None	Securities & Futures Institute March 27, 1990 Document No.(79)572
08/1990	10	48,997,000	489,970,000	48,997,000	489,970,000	Earnings transferred to common stock	29,970,000	None	Securities & Futures Institute Aug. 1, 1990 Document No.(79)1824
07/1991	10	53,896,700	538,967,000	53,896,700	538,967,000	Earnings transferred to common stock	48,997,000	None	Securities & Futures Institute July 10, 1991 Document No.(80)1483
08/1992	10 10	70,290,000	702,900,000	70,290,000	702,900,000	Earnings transferred to common stock Employee bonuses transferred to common stock	161,690,100 2,242,900	None	Securities & Futures Institute June 26, 1992 Document No. (81)1401
08/1993	35 10 10	180,000,000	1,800,000,000	122,212,500	1,222,125,000	Earnings transferred to common stock Employee bonuses transferred to common stock	200,000,000 316,305,000 2,920,000	None	Securities & Futures Institute June 7, 1993 Document No. (82)1349
08/1994	10	180,000,000	1,800,000,000	146,800,000	1,468,000,000	Earnings transferred	244,425,000	None	Securities & Futures Institute

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Month/ Year	Issue Price	Authorized Share Capital	Authorized Share Capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks	Remarks
		Share	Amount	Share	Amount	Source of Capital		Capital Increase by Assets Other than Cash	Others
	10					to common stock Employee bonuses transferred to common stock	1,450,000		May 31, 1994 Document No. (83) 25726
08/1995	10 10	195,200,000	1,952,000,000	183,800,000	1,838,000,000	Earnings transferred to common stock Employee bonuses transferred to common stock	367,000,000 3,000,000	None	Securities & Futures Institute June 17, 1995 Document No. (84) 35592
08/1996	10	302,360,000	3,023,600,000	202,180,000	2,021,800,000	Capital surplus transferred to common stock	183,800,000	None	Securities & Futures Institute July 2, 1996 Document No.(85)40898
08/1997	10 10 10	450,000,000	4,500,000,000	242,776,000	2,427,760,000	Capital surplus transferred to common stock Earnings transferred to common stock	202,180,000 202,180,000 1,600,000	None	Securities & Futures Institute July 16, 1997 Document No. (86)153109
09/1997	30	450,000,000	4,500,000,000	272,776,000	2,727,760,000	Cash capital increase	300,000,000	None
05/1998	10	450,000,000	4,500,000,000	299,779,166	2,997,791,660	Convertible bonds, securities transferred to commonstock	270,031,660	None	Securities & Futures Institute Oct. 24, 1997 Document No. (86) 75108
08/1998	10 10 10 33	520,000,000	5,200,000,000	425,950,766	4,259,507,660	Capital surplus transferred to common stock Cash capital increase	681,940,000 7,000,000 272,776,000 300,000,000	None	Securities & Futures Institute May 6, 1998 Document No. (87) 36468

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Month/ Year	Issue Price	Authorized Share Capital	Authorized Share Capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks	Remarks
		Share	Amount	Share	Amount	Source of Capital		Capital Increase by Assets Other than Cash	Others
01/1999	10	520,000,000	5,200,000,000	437,264,477	4,372,644,770	Convertible bonds transferred to common stock	113,137,110	None	Securities & Futures Institute Oct. 24, 1997 Document No. (86) 75108
07/1999	10 10 10	720,000,000	7,200,000,000	525,717,372	5,257,173,720	Capital surplus transferred to common stock Earnings transferred to common stock Employee bonus transferred to common stock	437,264,477 437,264,473 10,000,000	None	Securities & Futures Institute May. 21, 1999 Document No. (88) 47372
10/1999	10	720,000,000	7,200,000,000	527,925,164	5,279,251,640	Convertible bonds transferred to common stock	22,077,920	None	Securities & Futures Institute Oct. 30, 1998 Document No.(87)85909
08/2000	10	720,000,000	7,200,000,000	580,717,680	5,807,176,800	Capital surplus transferred to common stock	527,925,160	None	Securities & Futures Institute July 5, 2000 Document No.(89)58124
12/2003	10	720,000,000	7,200,000,000	552,685,680	5,526,856,800	Decrease in treasury stock	(280,320,000)	None	Taiwan Stock Exchange Jan. 6, 2004 Document No. 0930000233
08/2005	-	720,000,000	7,200,000,000	502,685,680	5,026,856,800	Cash capital decrease	(500,000,000)	None	FSC, Aug. 24, 2005 Document No. 0940127867
10/2008	10	720,000,000	7,200,000,000	527,753,964	5,277,539,640	Capital surplus transferred to common stock	250,682,840	None	FSC, July 22, 2008 Document No. 0970036893
03/2011	10	720,000,000	7,200,000,000	526,433,964	5,264,339,640		(13,200,000)	None	Ministry of Economic Affairs April 13, 2011 Document No. 10001071990
						Decrease in
						treasury stock

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Month/ Year	Issue Price	Authorized Share Capital	Authorized Share Capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks	Remarks
		Share	Amount	Share	Amount	Source of Capital		Capital Increase by Assets Other than Cash	Others
09/2011	10	720,000,000	7,200,000,000	514,433,964	5,144,339,640	Decrease in treasury stock	(120,000,000)	None	Ministry of Economic Affairs Sept. 22, 2011 Document No. 10001219490
01/2013	10	720,000,000	7,200,000,000	563,214,290	5,632,142,900	Convertible bonds transferred to common stock	487,803,260	None	FSC, March 15, 2012 Document No. 1010009989
05/2016	10	720,000,000	7,200,000,000	556,923,290	5,569,232,900	Decrease in treasury stock	(62,910,000)	None	Ministry of Economic Affairs June 15, 2016 Document No. 10501126300
10/2016	10	720,000,000	7,200,000,000	548,123,290	5,481,232,900		(88,000,000)	None	Ministry of Economic Affairs Oct. 25, 2016 Document No.10501252850
						Decrease in
						treasury stock
11/2016	10	720,000,000	7,200,000,000	536,613,290	5,366,132,900		(11,510,000)	None	Ministry of Economic Affairs Dec. 22, 2016 Document No. 10501291940
						Decrease in
						treasury stock
12/2016	10	720,000,000	7,200,000,000	506,613,290	5,066,132,900		(30,000,000)	None	Ministry of Economic Affairs Jan. 10, 2017 Document No. 10601003670
						Decrease in
						treasury stock
.03/2017	10	720,000,000	7,200,000,000	499,053,290	4,990,532,900		(75,600,000)	None	Ministry of Economic Affairs March 27, 2017 Document No. 10601039100
						Decrease in
						treasury stock
07/2017	10	720,000,000	7,200,000,000	493,572,290	4,935,722,900		(54,810,000)	None	Ministry of Economic Affairs July 28, 2017 Document No. 10601101200
						Decrease in
						treasury stock
08/2018	10	720,000,000	7,200,000,000	505,911,597	5,059,115,970	Earnings transferred to common stock	123,393,070	None	Approved by FSC on August 1, 2018
10/2019	10	720,000,000	7,200,000,000	404,729,278	4,047,292,780	Decrease in Cash capital	(1,011,823,190)	None	FSC, Oct. 9, 2019 Document No. 1080332235
07/2020	10	720,000,000	7,200,000,000	394,729,278	3,947,292,780	Decrease in treasury stock	(100,000,000)	None	Ministry of Economic Affairs July 20, 2020 Document No. 10901122340

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Note 1: Information for the current year as of the date of the publication of the annual report should be filled in.

Note 2: The effective (approved) date and document number should be noted to the capital increase.

Note 3: Those who issue shares below the par value should be marked in a prominent way.

Note 4: If currency claims and technical achievement are used to offset shares, it should be stated, and the type and amount of offset shall be included Note 5: Those belonging to private placements should be marked in a prominent way.

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ii. Type of Stocks

ii. Type of S	tocks			May2,2021
Share Type		Authorized Share Capital		Remarks
	Issued Shares (Listed CompanyStocks)	Un-issued Shares	total Shares
Common Stocks	394,729,277	325,270,723	720,000,000

(2) Composition of Shareholders	(2) Composition of Shareholders	(2) Composition of Shareholders		May2,2021	May2,2021	May2,2021
Status Amount	Government Agency	Financial Institutions	Other Juridical Persons	Domestic Natural Persons	Foreign Institution or Nature Persons	Total
Number of Shareholders	0	0	134	15727	50	15,911
Shareholding	0	0	254,888,042	131,798,724	8,042,512	394,729,278
%	0.00%	0.00%	64.58%	33.38%	2.04%	100.00%

(3) Shareholding Distribution of Common Stocks

(3) Shareholding Distribution	of Common Stocks May2,2021
Class of Shareholding	Number of Shareholders	Shareholding	%
1 ~ 999	11,731	2,052,684	0.52%
1,000 ~ 5,000	2,983	6,334,599	1.60%
5,001 ~ 10,000	548	4,081,107	1.03%
10,001 ~ 15,000	133	1,635,365	0.41%
15,001 ~ 20,000	127	2,254,160	0.57%
20,001 ~ 30,000	105	2,628,192	0.67%
30,001 ~ 40,000	59	2,118,097	0.54%
40,001 ~ 50,000	46	2,101,764	0.53%
50,001 ~ 100,000	73	5,280,703	1.34%
100,001 ~ 200,000	36	4,820,315	1.22%
200,001 ~ 400,000	24	6,545,723	1.66%
400,001 ~ 600,000	9	4,727,779	1.20%
600,001 ~ 800,000	3	2,209,413	0.56%
800,001 ~ 1,000,000	6	4,935,653	1.25%
More than 1,000,001	28	343,003,723	86.90%
Total	15,911	394,729,278	100.00%

(4) List of Major Shareholder

May 2, 2021

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Shares MajorShareholders	Shareholding	%
Fortune Base Development Co. LTD	51,666,340	13.09%
Global Funeral Service Co. LTD	44,072,080	11.17%
Ontario Investment Co., Ltd.	37,933,600	9.61%
Reiju Construction Co., Ltd.	36,608,592	9.27%
Yifeng Investment Co., LTD	34,542,100	8.75%
Circle Square Creation Co., Ltd.	17,178,680	4.35%
Youlong Construction Development Co., Ltd.	14,962,840	3.79%
Tsai, Kun-Hong	11,053,600	2.80%
Luo,Jie	10,914,021	2.76%
Li, Jing-Jie	9,020,000	2.29%

(5) Market Price, Net Worth, Earnings, and Dividends Per	(5) Market Price, Net Worth, Earnings, and Dividends Per	(5) Market Price, Net Worth, Earnings, and Dividends Per	Common Share for the Recent 2 years	Common Share for the Recent 2 years
Item	Year	2019	2020	Current year as of March 31, 2021
Market Price Per Share (Note 1)	Highest	18.45	16.80	15.60
	Lowest	14.65	11.60	13.80
	Average	16.15	14.06	14.47
Net Worth Per Share (Note 2)	Before Distribution	17.91	23.81	27.61
	After Distribution	17.91	Note 8	-
Earnings Per Share (Note 2)	Weighted Average Shares (thousand shares)	463,942	360,415	358,120
	Earnings Per Share	1.87	3.05	1.09
Dividends Per Share	Cash Dividends	0.00	Note 8	-

- 62 -

	Issuance of	Stock Dividend from Retained Earnings	-	-	-
	bonus shares
		Dividends from Capital reserve	-	-	-
	Accumulated Undistributed Dividend(Note 4)		-	-	-
Return on Investment	Price/Earnings Ratio (Note 5)		8.64	4.63	13.29
	Price/Dividend Ratio (Note 6)		N/A	Note 8	-
	Cash Dividend Yield (Note 7)		0.00	Note 8	-

• Note 1: The highest and lowest market prices of common stocks each year; the average annual market price is calculated based on the annual trading volume and transaction value.

• Note 2: Based on the number of shares issued as of the end of the year, and by the resolution of the annual shareholders' meeting on earnings distribution.

• Note 3: If retrospective adjustment is required due to circumstances such as the issuance of bonus shares, the earnings per share before and after adjustment shall be disclosed.

• Note 4: Suppose the conditions for issuance of equity securities stipulate those undistributed dividends in the current year can be accumulated to the year when there is a surplus. In that case, the undistributed dividends should be disclosed separately as the accumulated dividends as of the current year.

• Note 5: Price / Earnings ratio = average closing price per share for the year/earnings per share

• Note 6: Price / Dividend ratio = average closing price per share for the year / cash dividend per share Note 7: Cash dividend yield rate = cash dividend per share / average closing price per share for the year. Note 8: The surplus for 2020 yet to be determined by the Shareholders Meeting

• Note 9: The net value per share and the earnings per share should be filled in with the information verified (reviewed) by an CPA as of the publication date of the annual report in the latest quarter; the remaining fields should be filled in with the data of the current year as of the publication date of the annual report.

.

- 63 -

• (6) Dividend Policy and Implementation Status

• i. Dividend Policy

• Suppose the company makes a profit during the year. In that case, no less than 1% shall be distributed for the remuneration of employees and no more than 3.5% for the remuneration of directors and supervisors. However, if the company still has accumulated losses, it shall reserve the undistributed compensation in advance. If the Company has a surplus at the end of the fiscal year, it should first pay taxes, make up for previous losses, and allocate 10% of the surplus as the legal surplus reserve. However, when the legal surplus reserve has reached the amount of the Company's paid-in capital, it does not apply; In addition, according to the Company's operating needs and the Company’s Article of Association, the Company may set aside another sum as the special surplus reserve. If there is still a surplus and the surplus is not distributed at the beginning of the same period, the Board of Directors will draft a surplus distribution plan and submit it to the shareholders meeting for resolution. The Company’s dividend policy must consider the Company’s financial needs for the mid-to-long-term operational growth and its financial structure as well as shareholders’ equity. Basically, dividends are issued in both stocks and cash. The ratio of cash dividends should not be less than 10%. If the dividend per share is less than NTD 0.5, it may be distributed in stock dividends.

• ii. Implementation Status

• In regards to the Company's 2020 surplus distribution, it was proposed by the Board of Directors on March 23, 2021, to retain the Company’s operating capital and not distribute dividends, and it will be determined after the resolution of the shareholders’ meeting.

• iii. Is there any significant change to be made to the dividend policy: None.

• (7) Impact of the Proposed Bonus Shares on the Company's Operating Performance and Earnings per Share:

• The 2020 annual profit distribution proposal was forwarded for resolution and approved by the Company's Board of Directors on March 23, 2021 (not yet approved by the shareholders meeting). No stock dividends will be distributed, so this item does not apply.

• (8) Compensation to Employees, Directors and Supervisors:

• i. The Percentage or Scope of the Bonuses Distributed to Employees, Directors and Supervisors stipulated in the Articles of Incorporation

• If the Company makes a profit during the year, no less than 1% shall be allocated as the employees' remuneration; and no more than 3.5% shall be distributed as the directors' and supervisors' remuneration. However, when the Company still has accumulated losses, it shall reserve the amount of undistributed retained earnings in advance.

• The employee compensation in the preceding paragraph may include the employees of the subsidiary company who meet certain conditions, and the conditions and methods shall be specially decided by the Board of Directors and submitted to the shareholders meeting for resolution.

• ii. The calculation basis for the estimated amount of employee dividends and directors and supervisors' remuneration in the current period, the calculation basis for the number of shares allocated for stock dividends, and the accounting treatment shall there be a difference between the actual distribution and the estimated amount:

• The company estimates the remuneration of employees and directors by a certain percentage based on the current year’s profit (that is, the pre-tax benefits minus the benefits before the distribution of employees and directors’ remuneration) less the accumulated losses, which is recognized as operating costs or operating expenses. In the case when the amount of the annual financial report still changes after the publication date, it will be treated as the change in accounting estimates, and the impact of the change will be recognized as the profit and loss of the following year.

- 64 -

• iii. Distribution of Compensation of Employees, Directors and Supervisors for 2020 Approved in the Board of Director Meeting:

• (1) Distribution of Employ Compensation and Directors’ Compensation: (A) Employee Compensation--NTD 11,563,231

  • (B) Directors’ Compensation--NTD 40,471,309

• (2) The amount of employee compensation distributed in stocks and the size of that amount as a percentage of the profit transferred to common stocks.

• iv. If there is a difference between the actual distribution of compensation of employees, directors and supervisors (including the number of shares, the amount and the share price) in the previous year and the provision for the bonus, please describe the difference, the reason, and the accounting treatment:

• (i) Actual Distribution of Compensation of Employees, Directors, and Supervisors (A) Employee compensation distributed in cash—NTD 3,385,900

  • (B) Directors’ compensation—NTD 38,351,762

• (ii) The cash compensation for employees and directors’ compensation distributed under the Board of Directors' resolution was estimated to be NTD 1,096,455 and NTD 3,837,593, respectively, underestimating NTD 38,151 and NTD 133,530, respectively, in comparison to the 2018 annual financial statements. The difference is treated according to changes in accounting estimates and is recognized as the 2019 profit and loss.

- 65 -

(9) Buyback of Treasury Stock

(9) Buyback of Treasury Stock	(9) Buyback of Treasury Stock	(9) Buyback of Treasury Stock	(9) Buyback of Treasury Stock
**Buyback of Treasury Stock **
Batch Order	11thBatch	12thBatch	13thBatch
Date of Resolution by the Board Meeting	December 22, 2016	March 8, 2017	March 16, 2020
Purpose of buy-back	Maintain the Company’s credit and shareholders’ rights	Maintain the Company’s credit and shareholders’ rights	Maintain the Company’s credit and shareholders’ rights
Timeframe of buy-back	December 26, 2016 to February20,2017	March 10, 2017 to May3,2017	March 17, 2020 to May16,2020
Price range (Share /NTD)	NTD 12 ~ NTD 15	NTD 11 ~ NTD 24	NTD 10 ~ NTD 16
Class, quantity of shares bought back (Shares)	Common stock 7,560,000 shares	Common stock 5,481,000 shares	Common stock 10,000,000 shares
Value of shares bought-back (in NT$ thousands)	NTD 122,149,562	NTD 89,411,751	NTD 129,789,065
Percentage of total company shares held (%)	37.80%	54.81%	50.00%
Shares sold/transferred (Shares)	7,560,000 shares	5,481,000 shares	0 share
Accumulated number of company shares held(Shares)	0 share	0 share	10,000,000 shares
Percentage of total company shares held (%)	0％	0%	2.47%

- 66 -

2. Corporate Bonds

(1) Corporate Bonds

(1) Corporate Bonds	(1) Corporate Bonds
Type of Corporate Bonds		2017 Secured Corporate Bonds, Phase I
Issuing Date		September 12, 2017
Denomination		NTD 1,000,000
Issuing and Trading Place (Note)		Not Applicable
Issuing Price		Issue by denomination
Total Amount		Total Amount of NTD 2,5 Billion
Interest Rate		Interest Rate: Fixed Annual Rate 1.02%
Tenure and Maturity Date		5 years, Maturity Date: September 12, 2022
Guarantor		Taiwan Cooperative Bank Co., Ltd.
Trustee		JihSun Bank Co., Ltd
Underwriter		Taiwan Cooperative Securities Investment Trust Co., Ltd.
Legal Counsel		Chiu, Ya-Wen
Auditor		Chang, Shu-Ying, Wu, Mei-Ping
Repayment		Repayment will be made in one lump sum five years from the date of issuance upon maturity
Outstanding		NTD 2,500,000,000
Terms for Redemption or Early Repayment		None
Limitation Clause		None
Credit Rating		Not Applicable
Other Rights	Amount of Converted or Exchanged Common Shares, ADRs or Other Securities as of the Publication Date of the Annual Report	None
	Issuance and Conversion (Exchange or Subscription) Method	None
Dilution Effect and Other Adverse Effects on Existing Shareholders		None
Transfer Agent		Not Applicable

Note: Please fill in for those belonging to foreign corporate bonds.

- 67 -

• (2) Convertible Bond: None

• (3) Exchangeable Bond: None

• (4) Self-Registration: None

• (5) Bond with Warrants: None

3. Preferred Shares: None

4. Global Depository Receipts: None

5. Employee Stock Options Plan: None

6. Issuance of Restricted Stock for Employees: None

7. Issuance of New Shares for Merger, Acquisition or Exchange of Other Companies’ Shares: None

8. Financing Plans and Implementation:

9. The Company has completed the previous issuance plan for securities and no significant benefit and effect during the recent three years.

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V. Operational Highlights

1. Business Activities

• (1) Business scope

• i. Main Business

• (i) J901020 Regular Hotel

• (ii) E801010 Indoor Decoration

• (iii) F111090 Wholesale of Building Materials

• (iv) F113010 Wholesale of Machinery

• (v) F211010 Retail Sale of Building Materials

• (vi) F213080 Retail Sale of Machinery and Tools

• (vii) H701040 Specific Area Development

• (viii) H701060 New Towns, New Community Development

• (ix) I102010 Investment Consulting (x) I103060 Management Consulting

• (xi) I503010 Landscape and Interior Designing

• (xii) JD01010 Industrial and Commercial Credit Checking Service

• (xiii) JE01010 Rental and Leasing

• (xiv) H701010 Housing and Building Development and Rental

• (xv) H701020 Industrial Factory Development and Rental

• (xvi) H703090 Real Estate Business

• (xvii) H703100 Real Estate Leasing

• (xviii) F301010 Department Stores

• (xix) F401010 International Trade (xx) ZZ99999 All business items that are not prohibited or restricted by law, except those data are subject to special approval.

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ii. Business weight

Unit: NTD Thousand

ii. Business weight	ii. Business weight					Unit: NTD Thousand	Unit: NTD Thousand	Unit: NTD Thousand	Unit: NTD Thousand
Main Product		2020				2019
		Domestic sales		Export		Domestic sales		Export
Product Name	Unit	Volume	Amount	Volume	Amount	Volume	Amount	Volume	Amount
Construction Service			10,776,324				9,295,613
Total			10,776,324				9,295,613

• iii. The Company's current products:

Real estate construction and development: construction, leasing/sale of real estate and parking spaces, development of residence and cemeteries, leisure golf court operation and management, etc.

• iv. Expected development of new products (services):

• (i) Domestic real estate development plan for residential houses.

• (ii) Domestic real estate development plan for cemetery.

• (iii) Leisure golf court operation and management.

• (2) Industry overview

• i. Industry status and development

• (i) Demographic changes

The population has experienced negative growth for the first time: The total population in 2020 was 41,885 fewer than in 2019. In 2020, The number of deaths outnumbered the number of births, with an annual decrease of 0.18% as the " golden cross" occurred on the statistics; the number of marriages in 2020 also hit a 10-year low. As the number of households increased and the number of household members decreased, the performance of the pre-sale market for small homes with low down payment homes was fairly good, while the larger home products were facing a sales setback.

The problem of declining birthrate and ageing is becoming more and more serious. According to estimates, the total population will drop from 23,561,200 in 2020 to 17,353,000 in 2065, a drastic decrease of 6,208,200; 0-14 years old from 20,963,400 in 2020 dropped to 1,588,000 in 2065, a decrease of 1,375,400; 15-64 years of age dropped from 16,810,500 in 12020 to 8,618,000 in 2065, a decrease of 8,192,500; and over 65 years of age, in the contrary, increases from 3,787,300 in 2020 to 7,147,000 in 2065, a substantial increase of 3,359,700. The demand for real estate and social problems arising from the above three statistics in population growth and decline will inescapably become more and more severe.

• (ii) Brand value is gradually being noticed: Since 2015, as the housing market finally turning the corner, most of the builders with high housing prices and high sales rates have relied on their accumulated brand recognition, credibility and loyalty over the years. Besides better location, construction quality, structural safety, building materials and equipment, punctual delivery, and after-sales service can all contribute to the reinforcement for the brand recognition by consumers. In the future, the brand effect will be further extended to related fields such as urban renewal, reconstruction of urban unsafe and old housing, long-term care, and pension.

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• (iii) The builders and life insurance industry actively seizing land properties: In the first three quarters of 2020, the accumulated land transaction value of listed builders in six major cities in Taiwan is NTD 83.5 billion and is estimated to exceed NTD 100 billion for the whole year, of which Taichung City has the highest transaction amount of NTD 28.7 billion. More than NTD 22.8 billion in Taipei City. In addition, New Taipei City and Tainan City have also seen large amounts of land purchase and reserve by builders. It is not difficult to understand why land transactions in Taiwan have been so active in the past two or three years.

• (iv) The number of property ownership transfer increased slightly: According to the information released by the Statistics Department of the Ministry of the Interior, in 2019, the statistics for transfer of property ownership was 300,300, and the estimation for 2020 is looking at around 315,000-320,000, with a slight increase.

• (v) The sales for small and new existing homes remains high: pre-sale houses with small indoor space and low down-payment are once again in the limelight. Suppose the market share for small indoor space of pre-sale houses fails to decrease. In that case, the overall market share for pre-sale houses will inevitably not rise, especially with the increasing number of concurrent residential projects. The total inventory of new existing homes will subsequently increase in the future. The overall market will face another wave of intense competition for the remaining housing.

• (vi) The return of Taiwanese businessmen and the smooth sales of factories and commercial offices: The vacancy rate of Grade A office buildings in Taipei in the fourth quarter of 2020 was 4.5%, with a slight decrease of 0.1% comparing the previous quarter. The total rental area for the year was only 6,200 pings. It was the first time since 2009, the total rental area did not reach 10,000 pings, hinting at the problem of the insufficient supply of office space and the rising rental price. In 2020, the market shares for self-us and investment purchase for factory and business space were 53.7% and 46.3%. Self-use properties were mostly factory buildings and factories in the technology manufacturing industry, and investment properties were mostly in the profession of financial and life insurance.

• (vii) The life insurance industry actively purchases real estate: In addition to the large purchases of land by builders in recent years, another significant transaction volume in 2020 was active purchase by the life insurance industry for varieties of profitable target properties, aiming for future increase in asset value and effective enhancement for the efficient capital utilization.

• (viii) Urban renewal and reconstruction of urban unsafe and old houses: boosted by the policy of reconstruction of urban unsafe and old houses, the total number of applications for the reconstruction of urban unsafe and old houses was 1,646 and the total number of approved applications was 1,236 by the end of 2020, of which the number of the applications (580) and the approved applications (404) in Taipei is the highest, and the number of applications (335) and the number of approvals (261) in New Taipei City are 。

• the second highest

• (ix) The real estate market is still dominated by self-use first-time buyers. However, as Taiwan is about to enter a super-aged society, many builders and life insurance companies have pre-deployed and started developing the senior market and launched product plans for the rent and sale of elderly residential houses.

• (x) Although the COVID-19 epidemic continues to interfere with economic development, construction works continue anyhow even after the Spring Festival especial those of infrastructure investment which is relatively stable. Nevertheless, most construction companies expect slow or no growth for the next six months.

• ii. Relationship among the industry’s up, mid and down streams

Many industries are related to the real estate market development, such as construction, building materials, plumbing and electrical service, advertising, finance, administration agent

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consultation, interior design, and building management and maintenance.

The upstream supply for the real estate industry is mainly land, building materials and financial institutes. The sources of land supply include private land sales, joint construction release, state-owned land auction and urban renewal land development, and the building materials primarily consist of sand, stones, metal rebars, tiles and other materials involving various manufacturing industries. The mid-stream refers to the construction companies and other sales-related professions, including selling agency, construction and management, or realtors. The downstream of the industry includes, by the large, the general buyers and enterprises. In recent years, the intermediary industry has the advantage of multiple distribution channels, which has led to more diversified real estate sales business options. The chain supply management of the upstream, midstream and downstream industries for real estate business operation is more significant than other industries. They are often regarded as leading industries in addition to the leading indicator for the overall economic performance. Therefore, the prosperity of the construction investment industry will directly or indirectly affect the economic status of the year.

The supply chain in the construction industry refers to the upstream and downstream related industries involving in the design, construction of residential buildings, commercial offices, factories, or public construction projects. The upstream are suppliers of building materials and workforce; the midstream includes electricity companies, financial institutions, insurance companies, security companies and architects; and the downstream are supervision units and owners. The primary raw materials for construction comprise rebars, steels, cement, ready-mix concrete, sand, rocks, tiles, glass, etc. The owners refer to investors and landlord of the public and private institutes and constructions.

• iii. Product development trends

• (i) Simple luxury home near MRT with small to medium indoor space: Simple luxury home near MRT with small to moderate indoor space: There is a severe imbalance between the supply and demand of land in the urban metropolitan area, and there is almost no large area of land being released. Furthermore, the residential structure in Taiwan is affected by declining birth rates and population ageing, resulting in hard sales for large houses with indoor space of 100 pings and more. As a result, large luxury homes are no longer popular item in the market, nor do they meet future demand. As the total market price continues to increase, the housing space must be controlled within 50-60 pings. Couple with good locations, product strength, and construction projects by well-known branding companies with high-level design specifications, it is still hopeful of creating good sales.

• (ii) Commercial office and factory office: The Sino-US trade war has led to the return of capital from Taiwanese businessmen. Many first-line commercial real estate developers have aggressively increased their deployment of commercial real estate. Life Insurance Financial Holding Group and traditional Industry have made more significant moves to purchase target properties. However, commercial real estate still falls short of the demand for the year 2021.

• (iii) All-age homes and elderly residences: The population structure has changed due to declining birth rates and the population ageing phenomenon, leading developers to rethink product positioning. As a result, many developers have begun to plan "all-age homes" and "elderly residences" as products outlook will continue to adjust with housing market trends and demand changes.

• (iv) Moving home due to urban renewal and the unsafe and old houses: With the promotion of the government's policy on the reconstruction of unsafe and old houses, there will be an increase in the property ownership transfer rate. Since the number of houses over 30 years of history in metropolitan areas remains high, it is expected that there will be a trend and demand for moving home from old properties to newer ones.

• (v) The government proposes 5+2 industrial innovation plans including ―smart machinery‖,

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―Asia. Silicon Valley‖, ―green energy technology‖, ―biomedical industry‖, ―defense industry‖, ―new agriculture‖ and ―circular economy‖ as the core industry for future Taiwan’s generations, which is expected to inject new momentum into economic growth. iv. Competition

Because the real estate development market is large in scale and vast in market distribution, and products vary by locations and districts, the type of market competition is different from other industries. There is less competition between companies, especially within the same geographic area, instead of competition within various construction projects.

In recent years, the Company mainly purchases land property in the Greater Taipei area and has expanded to other metropolitan areas such as Taichung City. The Company’s advantages and competitiveness lie in having a solid management team, coupled with the Class A affiliated companies, together created a brand image established upon a group of reliable construction professionals, which; With the increase in national average annual income, home buyers become more demanding for exterior design, internal layout, building materials and equipment, and public facilities planning. The construction product planning and the spatial design have become critical factors for homebuyers when choosing a house, as well as the construction quality, which is essential to the brand image. How to reinforce the functions for health preservation, technology, environmental protection, leisure, safety and comfort in hardware and software facilities will be the key to future competition.

I In addition, due to the rapidly and dramatically increasing competition in the real estate industry, customer satisfaction has also become an essential factor of the company’s competitiveness. For the industry, it is necessary to be attentive to consumer needs and market changes at all times to take proper and effective actions and sales strategies

Continuing to cooperate with the government's policies, Reiju Construction aims to work toward the goal of 20% renewable power generation by 2025 set by the Energy Transition Promotion Scheme and recruit domestic and overseas developers and investors to establish partnerships for related construction projects.

• (3) Technology and R&D Overview

• i. Domestic Real Estate Investment Plan

In response to the real estate’s market trend, the Company expects to invest in urban land properties in important redevelopment zone or convenient residential area through purchasing or bidding to develop and construct real estate for sale.

The Company's future investment in the real estate market will be operated through active development, appointing intermediaries, enquiry for landowners to provide information regarding purchase or cooperation, individual investment, etc. Emphasis will be on urban renewal or reconstruction of urban unsafe and old buildings, in addition to public bidding of government or other agencies, to acquire land objects or buildings for development or project operation. The Company expects to invest in urban land properties in redevelopment zone or convenient residential area through purchasing or bidding to develop and construct real estate for sale. Furthermore, in response to the future goal of diversified operations, the Group's resources will be utilized in investment in the leisure industry and the cemetery real estate market. Besides the existing operation of the sports field business, the Company will seek across the country for target properties suitable for developing the recreational cemetery green park. The Company's ultimate goal is to strive at the same time in the residential, cemetery and recreation, three areas of real estate development, and give fall play to the effective integration of the Groups resource and development.

• ii. The making of construction products is a customized process of design based on the architect's conceptual vision and the demand of the users. The role of a builder is to convert

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the conceptual design into physical structures. Therefore, each construction is unique and different due to its construction environment and materials used. During the process of product development, there are various challenges and difficulties. The average time for each construction project lasts for at least one year going through continuous inspection and experiment to ensure the quality. All the tedious steps and discussion start from as early as the beginning of the design, which constant development of construction method and techniques are based upon, to perfect each architectural product. As of the end of 2020, the Company has obtained 16 new self-development patents, 3 invention patents, and four new applications patents in the Company's long history.

• (4) Long- and short-term business development

• i. Short term business development

• (i) Accelerate the development of existing land assets recognized in inventory investment

• (ii) Properly activate idle land to increase income during the holding period.

• (iii) Obtain high-quality land resources in the urban area

• (iv) Acquired highly integrated projects of urban renewal and reconstruction of urban unsafe and old buildings in convenient locations.

• (v) Actively participate in bidding for real estate with high potential.

• (vi) Submit cemetery development plan to the relevant competent authority for review.

• (vii) Effectively grasp market trend and define product based on regional characteristics to achieve "differentiation."

• (viii)Establish a sufficient system for the Implementation of good customer service in an aim to enhance customer satisfaction to 90%.

• (ix) Report maintenance cases to the Quality Center, Engineering Department, and Electrical and Mechanical Services Department, reduce the number of repairs and build a diversified customer communication mechanism.

• ii. Long term business development

• (i) Establish the company's brand value, reinforce the Company's core competency and continue to be proactive to achieve the concept of sustainable operation.

• (ii) Carry out customer-oriented and market-oriented product planning to enhance the added value of the Company's business service.

• (iii) Enter into the development of high-quality land in essential areas of New Taipei, Taipei City and Taichung City and actively expand the acquisition and rezoning of land reserves for areas or sections with development potential around the urban area.

• (iv) Establish a thorough customer information management system, conduct analysis on customers' feedback, and integrate group resources to fortify the function of customer 。

• service and strengthen competitiveness

• (v) The Company's development strategy is based on the four main scopes of real estate business, professional investment, funeral services, and leisure sports field industry. In addition to increasing the return in existing target reinvestment, the Company also actively seeks out industries with investment potential to ensure the source of stable income Profit and the pursuit of sustainable operation to create a long-term company value.

• (vi) Maintain a high renewal rate for projects within the Company's business scope

• (vii) Good public relation enhances the Company's market competitiveness to reinforce profitable operation and steady growth for the Company.

• (viii)Establish a diversified customer communication mechanism

• (ix) Actively develop new business opportunities in the market.

• (x) Provide business owners with diversified service channels.

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2. Market and Sales Overview

• (1) Market analysis

• i. Market share and future supply, demand and growth in the market

• (i) Market share

• The company's operating revenue mainly comes from lease and sale of real estate investment, wall niche sale, and funeral service. As for the business operation of real estate investment projects, it will heavily depend on the government's relevant policy and the development of major construction or transportation system in each metropolitan area. Therefore, the above all will be taken into consideration in the Company's self-developed real estate project planning. Nevertheless, with the operation of other investment properties, the Company is expected to make a stable profit every year from the real estate market.

Revenue from construction mainly comes from building construction. The overall development of the market and the industry has a close relationship with the annual government budget for public projects and the economic environment in the private sector. At the end of each year, Reiju Construct will make timely adjustments based on the overall social environment and international trends, and set the total business contract target for the following year. Thus, it is expected to maintain stable revenue growth every year.

• (ii) Future supply, demand and growth in the market

• Supply

According to statistics from the Ministry of the Interior, there were more than 118,600 units in the housing market for the third quarter of 2020, an increase of 11.66% compared with the first three quarters of 2019; the number of building usage licenses in the nation’s residential housing category for the third quarter of 2020 was about 69,100, an increase of 0.5% compared with the first three quarters of 2019. Due to the companion effect caused by the increased number of construction licenses and building usage licenses, the number of under-construction residential units rise nationwide, with the number of units in the first three quarters of 2020 reaching 96,300, an increase of 15.19% compared with the first three quarters of 2019. In addition, the hot spots for housing development have been moving southward since 2019. As a result, Taichung City surpassed New Taipei City and became the region with the largest number of under-construction residential units in Taiwan in 2019 and 2020.

The number of construction licenses and the number of under-construction residential units are the primary indicators for the rapid recovery of the housing market. Taichung City is the most active market for real estate development. The number of under-construction residential units has reached 22,300 in the third quarter of 2020. The developers in Taichung City have noticed the booming and stable sales of the housing market in the region and continue to pursue active land purchases and project proposals. As a result, Taichung City surpassed New Taipei City and became the hottest housing market for the second year.

In the first three quarters of 2020, the number of under-construction residential units in the six Metropolitan Cites are nearly 7,900 units in Taipei City, almost 16,600 units of New Taipei City, over 13,100 units in Taoyuan City, about 22,300 units in Taichung City, 89,900 units in Tainan City, and close to 13,000 units in Kaohsiung City. The total number of units in the six Metropolitan Cites is nearly 81,800, accounting for approximately 84.34% of the country's total. The number of under-construction residential units in Taipei City has set a new high in the past 10 years, increasing about 15.91% compared to the year 2019. Although Taipei City does not have an ample supply of rezoned land like other areas, the government is actively engaged in introducing urban redevelopment policies and the reconstruction of urban estate’s unsafe and old buildings; the efforts seem to pay off gradually. Compared to the year of 2019, Tainan City’s housing market growth rate was 52.58%, the highest among the other five metropolitan cities, followed by Taichung, Taoyuan, and New Taipei City with the growth rates ranging from 16.5% to 19%, and Kaohsiung City's growth rates for under-construction residential units about 4.35%.

The increase in constructions commenced represents the confidence and optimism of the developers, which also contributes to the significant rise in the housing project proposals

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and the supply for the housing market. For consumers, it means that there are more new houses to compare and choose from. Nevertheless, In the short term, the housing market is confronting with the impact of the COVOD-19 pandemic, and there is still a lot of uncertainty regarding the development of the disease and the subsequent recovery of buying power in the market. Furthermore, the resource and quality of the workforce need to be improved to meet the needs of contracted cases, and the number of projects supplied by the developers must continue to increase to meet the market demand.

• Demand

In 2020, there were quite a few policies and regulations that are closely related to the housing market, including a reduction in mortgage rate released by the five major banks to 1.615%, the lowest in history; the actual transaction price registration 2.0, passed in the third reading and returning the obligation to the buyers and sellers for declaration of the transaction information; and the extension, the expansion of the reward period and scale, and other supportive measures for the reconstruction of urban unsafe and unsafe and old buildings; as well as the relief plan for various industries under the recent impact of the COVID-19 pandemic. Under such changes, real estate is one of the most affected industries. From the perspective of the overall confidence indicators for the commercial real estate investment, the leading confidence indicator is "land development", followed by "office", "economic environment", and "commercial store."

Due to the impact of the COVID-19 epidemic global wise, the demand for commercial real estate and the overall economy has also been affected, of which the value of the Macroeconomic has fallen the most, from the original optimistic (118.62) to the conservative (81.25), also showing the severity of the impact of the epidemic. On the other hand, although the indicators of "land development" and "office" have declined, both remain optimistic, demonstrating that under the US-China trade war and before the end of the epidemic, the market demand for Taiwan’s industrial land and offices, with support of domestic capital and international funds returned to Taiwan, will still remain strong. Because the original rent comparing with the raised price after the quantitative easing (QE) policy to the yield rate is relatively low, and the pandemic has resulted in the reduction in people’s outings or shopping activities, the confidence indicator of the "commercial store" has dropped to the lowest in the past two and a half years. The "hotel" investment confidence indicator is also at a relatively low point due to the impact of multi-country lockdowns, city lockdowns and shipping restrictions under the epidemic. In this epidemic referred to as the world-class black swan, the key to alleviating the commercial real estate investment and the General Economic confidence indicator is still the effective drugs and vaccines for the COID-19. Once the antidote is developed, various indicators will be " rejuvenated " while the investors survive this wave of epidemics.

Facing the dual pressures of "pandemic losses in operating revenue" and "overflow of low-profit funds from banks", the housing market will show a "Matthew effect" in which the rich get richer, and the poor get poorer. Life insurance and listed builders with sufficient funds and bank loan credit continue to purchase lands at high prices without hesitation. Retail investors and companies with insufficient funds and credit defects have severe crisis or asset auction risks. Predictably, the housing market will encounter a reshuffle shortly this year; land, industrial real estate, and office properties will be the hot target dealt in 2020.

In terms of housing demand, statistics from the Ministry of the Interior show a decrease of 8.23% from the previous year (2019) in the first three quarters of 2020, in the registration of first-time ownership of residential units nationwide about 80000 units. The statistic indicates that the number of new units completed in 2020 decreased compared with last year; In the first three quarters of 2020, the country’s residential ownership transfer registrations amounted to approximately 230,000, an increase of 6.04% over the previous year (2019). In the first three quarters of 2020, the number of residential land tax increases nationwide reached approximately 980,000, an increase of 10.98% over the previous year (2019), which shows that although the epidemic has severely raged the global economic environment, the return of overseas Taiwanese capital, the low-profit environment and other favorable factors have kept the demand for real estate products with the most value-preserving function continuing to grow.

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Judging from the features of the proposed real-estate products, in 2020, the self-use estates or factories should still be in the lead for the demand. Because it is generally not easy for homebuyers to prepare their down payment, the products of low total price estate with a low down payment will continue to be the mainstream. In addition, the increased number of public constructions, followed by the policies for boosting urban redevelopment and the rising demand for reconstruction of urban low-down unsafe and old buildings, will encourage the overseas industries to return to Taiwan, leading to the increase in the number of factories.

• ii. Competition

  • As the first listed construction company in central Taiwan, domestic real estate has been suppressed by the government housing policy in recent years. Coupled with the overall economic downturn, purchase intention is very gloomy. As the countermeasure of the current housing market, construction companies must transfer into diversified operation, gathering existing group resources, and expand the business into the property investment market simultaneously.

• (i) Excellent brand image and mastery of the market

• (ii) Sufficient operating capital and stable financial status

• (iii) Good grip on the market demand and professional research and development planning

• (iv) Ensure construction quality and permanent after-sales service

• (v) New business cases rely on innovation, and old cases rely on service and quality

• (vi) Establish differentiation from the similar products in the market

• (vii) The advantages of the group and the promotion of the renewal of old resources.

• (viii)Participate in associations to expand connections

• (ix) Fortify the integration of technology, research and development (promotion of green energy, group resource integration system, prevention and management, and gaining of patents for innovative skills and alternative construction methods).

• iii. Favorable and Unfavorable Factors in the Long Term and the countermeasures

• (i) Favorable Factors

  • a. Interest rates are still low: due to the drastic decline in international oil prices and the impact of the epidemic on market demand, there are still many uncertainties in the global economic overview, and the domestic economy has not yet recovered. As the impact of the COVID-19 pandemic on the global economy far exceeds expectations, the central bank's rediscount rate remains low at 1.125% 。

  • b. The government actively promotes various major public constructions to boost industrial development. Coupled with the continuous record highs of land transaction prices, the real estate industry's housing prices and market support are expected to remain prominent. Affected by the COVID-19 epidemic, the global economy has been hit hard. However, Taiwan’s epidemic prevention has been relatively successful. Banks have actively seized the mortgage business opportunities and continued to transfer funds to the housing market. The government has also launched several reliefs plans in due course, which is expected to reduce the epidemic's impact and economic downturn in Taiwan.

  • c. The Company is a large-scale construction enterprise with an excellent branding image and reputation in the industry with abundant project renewal resources, especially those initiative bidding invitations from associated project owners. Thus, the Company has more option as to the selection of projects. Consequently, workers are more willing to continue the cooperation with the Company for its large contracted amount and sufficient resources of job opportunities.

• (ii) Unfavorable Factors

  • a. Investors withdraw from the market, and potential buyers still waiting for the appropriate opportunity for purchase.

  • b. The essential land property in the Greater Taipei metropolitan area is becoming scarce, and the cost of acquiring land for builders is relatively high.

  • c. There are still many external variables, including the global epidemic development, the degree of economic recovery at home and abroad, the status of the Sino-US trade war, the trend of the New Taiwan dollar exchange rate, etc., which will continue to

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     - affect the monetary policy and directly affect consumer confidence in buying homes.

  - d. The lack of workers and supervisors is the most significant disadvantage encountered by the construction industry, with labor cost increases by more than 20%. In addition, the shortage of bulk materials such as concrete and sand has caused an increased construction cost by about 30%. As a result, the industry can only rely on imported materials, causing increased construction cost and a decrease in profit. The workforce shortage also makes it very difficult to grasp the progress of the project.

• (iii) Countermeasures

  • a. The real estate investment is still targeting residential housing projects such as the essential area in the Greater Taipei, with convenient transportation and commercial facilities nearby; other suburban areas showing good development potential will also be included in the consideration for future planning through careful evaluation.

  • b. Adapt diversified development method in business operation, including prudential acquisition through price negotiation, joint construction, urban renewal, reconstruction of urban unsafe and old buildings, individual case investment, and leisure sports field development and operation.

  • c. Effectively integrate the Company's group resources in pre-deploy work for investment in real estate investment, factory and offices, tourism and leisure industries, and market development for recreational cemetery parks to create gains in the company's overall operating profit.

  • d. Seek assistance from the competent authority for the import of foreign workers to 。

  • alleviate the problem of lack of workforce

  • e. Remove the restriction for river dredging to solve the shortage of construction materials.

  • f. Continue training for successors and PM talents internally 。

  • g. Seeking high-quality structural workers to form a professional construction team for the work of main formwork and steel reinforcement.

• (2) Production Procedures of Main Products

• i. Main Products and Their Major Usages

• (i) Store: Commercial business premises

• (ii) Factory Office and Office Building: Office space or headquarters for companies or enterprises.

• (iii) Residential housing: Including residential buildings and Toutian residences.

• ii. Production Process Real estate development business: Stores, commercial buildings, factory offices and office buildings, residential buildings, and Toutian residences

Construction Land development→ →Planning & design→Handover of the property→after-sales service Sale

• (3) Supply of major raw materials

• i. In terms of land: In addition to developing toward an investment holding company, the company also carries out development and investment business in the real estate industry. Currently, the land promotion projects are in Taipei City, New Taipei City and Taichung. Future purchase of land will still be included in the Company's operation.

• ii. In terms of construction projects: The Company has reinvested in Grade A construction companies and can accurately grasp the market and supply conditions of building materials and contracting.

• iii. In terms of leasing: The primary raw material for the Company's existing real estate leasing business is the condition of the real estate, and the supply is in good condition.

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• (4) Names of customers who accounted for more than 10% of the total amount of goods purchased/sold in the last two years, the amounts and percentages of the goods purchased/sold.

• i. Name of the major suppliers who accounted for more than 10% of the total goods purchased in the last two years: The Company did not have any supplier who accounted for more than 10% of the total goods purchased from 2019 to the first quarter of 2021.

• ii. Major customers in the last two years

										Unit: NTD Thousand	Unit: NTD Thousand	Unit: NTD Thousand
		2019				2020				2021, as of the 1stQuarter
Item	Name	Amount	Percentage of total annual net sales〔%〕	Relationship	Name	Amount	Percentage of total annual net sales〔%〕	Relationship	Name	Amount	Percentage of total annual net sales up to 1stquarter 〔%〕	Relationship
1	Client A	1,295,890	13.94	NA	Client A	1,293,763	12.01	NA	Client D	253,918	10.79	NA
2	Client B	989,913	10.65	NA	Client B	1,098,139	10.19	NA	Others	2,099,245	89.21
	Others	7,009,810	75.41		Others	8,384,422	77.80
	Total	9,295,613			Total	10,776,324			Total	2,353,163

• (5) Production in the last two years: None

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3. Employee Information

				May 12, 2021
Year		As of May 12,2021	2020	2019
Number of Employees (Person)	Sales	4	4	4
	Administration Staff	22	20	22
	Total	26	24	26
Average Age (Years)
Average Length of Service (Years)		3	3	2.54
Education	PhD	0	0	0
	Master	7	7	9
	Bachelor	18	17	27
	High School	1	0	0
	Below High School	0	0	0

4. Environmental Protection Expenditure

• (1) According to laws and regulations, for those who are required to have a stationary pollution source installation permit or a pollution discharge permit or are obligated to make payment for pollution prevention and control or to set up an environmental protection unit and dedicated personnel, the related matters are described below:

• i. To effectively manage the Company's risks of environmental protection laws and regulations, the Company has set up an occupational safety center to supervise the implementation of relevant laws and regulations in the construction sites, such as the Waste Disposal Act, Water Pollution Control Act, Air pollution Control Act, Soil and Groundwater Pollution Remediation Act, and other relevant provisions.

• ii. The Company appoints environmental protection personnel in each construction site under the laws and regulations to be responsible for the related matters. The personnel shall either be the instructor for environmental protection training or is required to attend in such courses organized by the environmental protection agency of the local government under the jurisdiction of the construction project.

• iii. The air pollution prevention and control fees that should be paid are borne by the project owner or the Company under the terms of the contract.

• iv. During the construction period, the construction billboard set up by the law should include the collection control number of the air pollution prevention and control payment, the name and telephone number of the person in charge of the construction site, and the phone number of the local environmental protection agency for hazard reporting

• (2) The Company's investment in major equipment for the prevention and control of environmental pollution and its use and possible benefits ：

• The company introduced the ISO 14001 environmental management system in 2019 and passed the verification by SGS Taiwan Limited (SGS) in November 2019. It implements environmental considerations, reduces environmental impact, and all employees are committed to the Company's environmental policies. The main focus of pollution prevention and control is as follows:

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• i. Handle related affairs in accordance with the regulations of the central and local construction management and environmental protection agencies or units.

• ii. Starting from the planning stage, the Company has chosen to apply low-pollution construction methods and low-noise machineries for constructing.

• iii. Pollution prevention and control facilities are configured during construction.

In order to meet the environmental management requirements, the Company conducts a comprehensive review on the possible environmental impact attributable by the Company and the construction site before formulating or implementing an environmental management system. Review and evaluation are conducted for the environmental management performance of which the result will be the base for the planning and establishment of the future environmental management system and related policy in aims to enhance the management efficiency and comply to the environmental management standard. It is the Company's goal to strive for continuous improvement. The related strategy and prevention measures are as follows:

• A. Air pollution and control

• a. To prevent fugitive dust on the bare soil surface of the construction site.

• b. Vehicles transporting construction soil shall be covered with canvas and the speed of the vehicles shall be controlled.

• c. Thoroughly wash and clean the tires and the entrance to the construction site before vehicle leaving the premises.

• d. Regularly clean the neighboring street inside and outside of the construction site to prevent contamination of the surrounding environment and roads.

• e. dust

• f. The perimeter of the construction site shall be set up with a full barrier fence fixed to 。

• the ground

• g. Proper handling of waste disposal and recycling in the construction site and no incineration is allowed by the cooperated third-party.

• B. Noise control measures

• The noise and vibration control during the construction period often have different effects due to the differences in construction scale and the choice of equipment. The Company's control measures include the following:

• a. Using low-noise equipment for construction such as machinery with built in soundproof function and replacing old-style diesel engines with electric or hydraulic motors, etc.

• b. Regularly repair and maintain the surface of transportation roads in the work area, especially the potholes which need to be filled to avoid noise caused by bad vibrations.

• c. The construction time should be restricted to the period that has the least impact on the surrounding environment, and the construction should not be conducted in sensitive periods such as early morning, late night or lunch break. For unavoidable high noise or vibration application equipment, operation should be limited to daytime.

• d. With construction must be carried out during a restricted period, prior announcement and application for approval to the competent authority are required.

• e. The construction of the project may be based on actual needs. The construction content, operation time, progress, and pollution prevention and control measures shall be elaborated in advance to residents and police units. Close contact shall be established to enhance local understanding and cooperation.

• f. Construction vehicles shall be equipped with noise reduction function per regulations, and low-noise transportation vehicles shall be used whenever possible.

• g. Noise, vibration and safety measures must be considered at the site of each construction operation, and sound insulation and anti-vibration measures must be installed as necessary.

• C. Waste reduction, pollution treatment and soil disposal

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Based on the nature of the wastes, the wastes are classified as flammable, non-combustible, and recyclable. After proper packaging, the classified wastes are placed in different waste bins, which are configured per the number of the staffs. The Company will reinforce staff training and advocate the environmental concept in waste reduction, recycling and proper packaging. As for the construction wastes, the Company will entrust a legal and qualified waste management company for handling and treatment as required by the law.

Countermeasures and treatment:

  - a. Sewage or sludge should be treated properly before it can be transported away from the construction site. Un-attendance and arbitrary discharge of waste fluid is strictly forbidden. The Company is dedicated to Minimize and regenerate the waste soil.

  - b. Waste materials should be stacked separately from waste soil so as to increase the reuse value of waste soil.

  - c. The storage locations, containers and facilities of waste materials and domestic waste shall be marked and labelled in noticeable places.

  - d. Domestic waste cleaning and prevention: set up covered trash bins, and implement waste recycling by setting up recycling bins at designated locations to promote recycling and garbage reduction.

  - e. Garbage storage places should post signs for warning of mosquito hazards cause by spoil and smelly substances. All domestic waste is clear-out on regular working days following the related regulations.

• D. Infectious disease prevention and water pollution control measures

  • a. Regular inspections in and around the construction area, removal of mosquito breeding sources for vector control and reduction of containers.

  • b. Before construction, the announcement should be made regarding the plan to reduce pollutants from runoff wastewater, which should be submitted to the competent authority for approval and executed accordingly.

• E. Create an environmentally friendly office and ecologically friendly construction site

  • a. In the Taichung and Taipei offices, a digital air quality display panel is set up to monitor PM2.5, carbon dioxide, temperature, and humidity at all time, and the carbon dioxide concentration is regularly measured every six months, following related regulations for monitoring the labor working environment, so as the indoor illuminance testing. The test results meet the standards of labor workplaces.

  • b. Install a vegetable chamber in the office to create a refreshing and comfortable working atmosphere which is an easy automatic countermeasure for maintenance of the employee’s health; coupled with a carbon dioxide monitor to increase indoor oxygen level effectively; in addition to a smart ventilation system to enhance air circulation and AC efficiency to achieve energy conservation.

  • c. Drinking water in offices and construction sites that uses tap water as a source of water should be sampled every three months at a ratio of one-eighth to detect the E. coli and the total viable count. The test results confirm that the water quality is compliant with the standard.

  • d. For the indoor interior decoration works, materials with green building materials labels and healthy recyclable materials with low pollution and low emission are used whenever possible.

  • e. Apply the 6S Method (sort, set in order, shine, standardize, and safety) in strengthening the tidiness and maintenance of the construction site, and set up annual goals, in addition to rewards and penalty guidelines for on-site occupational safety and health to elect 6S excellent construction site for each month in aim to encourage implementation of environment maintenance in the construction sites.

• (3) In the last two years, as of the publication date of the annual report, during the company's process of improving environmental pollution, shall there be a pollution dispute should also

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explain its handling process: The company has no pollution disputes.

• (4) In the last two years and as of the publication date of the annual report, the total amount of the Company's losses (including compensation) due to environmental pollution: The company’s environmental fines for the last three years are summarized in the following table. The Company holds continuous and irregular reviews, set up annual goals, in addition to rewards and penalty guidelines for on-site occupational safety and health, and announce the assessment result by relevant supervisors to motivate all employees on the construction site to achieve Self-discipline and self-management.

			(Unit: NTD Thousands)
Year	2019	2018	The year 2021, as of March 31
Contamination Status	Violation of the Waste Disposal Law and Air Pollution Control Act	Violation of the Waste Disposal Law and Air Pollution Control Act	Violation of the Waste Disposal Law and Air Pollution Control Act
Penalty	362	175	0

• (5) Explain the impact of the current pollution situation and its improvement on the Company's earnings, competitiveness and capital expenditures, and the expected major environmental protection capital expenditures in the next two years:

• i. Future responding measures Because of the development of the construction industry, the issue of environmental pollution has become more and more severe. Improving compliance with environmental laws and regulations and reducing environmental penalties are relatively important to achieve zero environmental pollution. It can also reduce the company’s cost risk and establish a corporate image that is environmentally friendly and professional to accomplish sustainable operation and management. In order to ensure the environmental quality of the project and maintain public health, in addition to the pollution prevention equipment, the following specific measures have been implemented:

• A. Company management:

• a. For construction sites that have been fined over NTD 60,000 (inclusive)and by the environmental protection agency with a violation record, an environmental review meeting shall be held within 3 days.

• b. Penalty for violation is processed under the "Measures for Rewards and Punishments for Implementing Worksite Occupational Safety and Health"

• c. Additional inspection will be carried out at least once a week for construction sites with a fine over NTD 60,000 and violation record.

• d. For serious and repetitive violations, review meetings and education and training are required with follow-up for successive improvement.

• e. Promotion for implementing first-level automatic inspections

• f. Announce weekly 6S excellent construction sites and provide additional monthly performance bonus rewards

• g. In order to strengthen the tidiness and maintenance of the worksite environment, the Company sets up annual goals as well as rewards and punishments guidelines and procedure, based on which 6S excellent construction sites are selected every month for their superb work in the implementation of related environmental policies. Bonus with an increase of 4% will be awarded accordingly.

• h. Continue to promote the implementation of ISO 14001 on the construction sites. The executive personnel should organize meetings and discuss innovation and improvement issue about occupational safety and health on the construction site. Members attending the meetings are required to participate actively in the

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discussion and communication of the agendas and show the determination to protect the worksite environment while reducing environmental cost and establishing a company image that is both professional and environmentally friendly to accomplish the sustainable operation.

  - B. Environmental facilities in the work area and corresponding measures:

  - a. Set up construction billboard and road adoption notice board at the entrance of the construction site.

  - b. Install appropriate safety fences and overflow prevention measures in the work area before carrying out the construction, and regularly inspect the base of overflow prevention equipment to avoid polluting the environment outside the fence

  - c. Making concrete pavement on the road in the work area to prevent fugitive dust and for easy transportation of sludge from the construction site.

  - d. Making concrete pavement on the vehicle path to prevent fugitive dust.

  - e. Install dust-proof nets around the scaffolds surrounding the construction site

  - f. Cover the exposed part of the ground with canvas or dust-proof black net

  - g. Car washing equipment is installed at the entrance and exit gate of the work area. Vehicles entering and exiting with contamination must be cleaned up before entering (leaving) the premises.

  - h. Set out water sprinkler device along the vehicle routes to prevent fugitive dust. i. Arrange an area for domestic waste storage and recycling

  - j. Install restroom and shower room in the construction site

  - k. The rest area is equipped with a waste sorting area, green roof and water misting cooling system

  - l. Display promotional poster in the entrance and exit gate of the construction site

  - m. Install air pollution detector by the environmental protection agency's proposed policies.

  - n. Install instant image equipment by the environmental protection agency’s proposed policies.

  - o. Arrange regular cleaning for roads and streets surrounding the construction site

  - p. Use water trucks to spray water outside the work area at any time to keep the road clean

  - q. Arrange cleaning for the large driveway and spray water to prevent fugitive dust at all time.

  - r. The low-lying area on the roads outside the work area should be dredged to avoid contamination of the streets.

  - s. Dredging of water ditches outside the construction area

  - t. Use qualified oil for construction machinery `。`

• ii. Possible future expenditures:

• During the construction of each project, the Company abide by the environmental protection laws and regulations and strictly requests contractors to do environmental protection work in order to reduce pollution penalties. Currently, environmental protection work on existing construction sites has been implemented.

• iii. The impact of the current pollution situation and its improvement on the Company's earnings, competitiveness and capital expenditures, and the expected major environmental protection capital expenditures in the next two years: None

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5. Labor Relations

• (1) The Company's various employee welfare measures, further education, training, and retirement systems and their implementation status, as well as the agreements between labor and management and various protection measures for employee rights:

• i. Employee welfare

• (i) The Company's Employee Welfare Committee was established in 1990. Employee welfare includes the following:

  • a. Voucher and gift for Chinese New Year and birthday

  • b. Emergency relief funds

  • c. Subsidies for wedding, childbirth, and funeral

  • d. Travel subsidies and activity organization

• (ii) Dividend distribution to employees

• (iii) Group insurance

• (iv) Education and training by the positions and capabilities of the employees

• ii. Retirement system and its implementation:

• The company has followed the implementation of the Labor Pension Act (hereinafter referred to as the "New Act") since July 1, 2005. Employees eligible for the original retirement plan may choose to apply the service years by the New Act. For those employed after the New Act, the service years will be based on the definite contribution plan. The Company will deposit monthly the pension payment at a rate of no less than 6% of the employees' monthly salary to each employee's individual labor pension account. The amount withdrawal for the labor pension is recognized as the current expense.

• iii. Staff advanced study, training and the implementation status

• The company provides pre-employment education and training for new employees and on-the-job training for existing employees. All education and training will be arranged according to the employees' positions and capabilities to enhance the professional quality of employees and the company's competitiveness. Accordingly, the company’s executive personnel, accountants, and internal audit supervisors participated in the following relevant training courses:

Title	Name	Date(2020)	HostingOrganization	Course Name	Hours
Coordinator	Huang, ○ Zhen	July 15, 2020	China Industrial Commercial Research Institute	Seminar on declaration of salary withholding, retirement pension and health insurance premium deduction	6
Coordinator	Huang, ○ Zhen	Nov. 13, 2020	Institute of Internal Auditors	Labor law knowledge required of auditors-from recruitment to resignation	6
Coordinator	Huang, ○ Zhen	Dec. 10, 2020	Institute of Internal Auditors	Labor incident law practice exercise	6
Coordinator	Chiu, ○ Feng	Sept. 4, 2020	Securities & Futures Institute	Corporate Governance Evaluation Practice Seminar	3
Coordinator	Chiu, ○ Feng	Sept. 16, 2020	Securities & Futures Institute	Analysis of the practical operation and the latest interpretation letter after the implementation of the CompanyAct	3
Coordinator	Chiu, ○ Feng	Sept. 24, 2020	Securities & Futures Institute	Seminar on regulations regarding public Offering of companystocks	6
Coordinator	Chiu, ○ Feng	Sept. 25, 2020	Securities & Futures Institute	Seminar on the administration and service of public Offeringof companystocks	7
Assistant Manager	Wang, ○ Gui	Sept. 26, 2020	Institute of Internal Auditors	Business knowledge for internal auditing	6
Assistant Manager	Wang, ○ Gui	Sept. 28, 2020	Institute of Internal Auditors	Policy analysis for enterprises to upgrade their ability in the preparation of financial reports and key discussion on internal audit and internal controlpractices	6
Assistant Manager	Wang, ○ Gui	Dec. 5, 2020	Meiching International Industrial Co.,Ltd.	Human Resource Training Course-from recruitment to dismissal	6
Assistant Manager	Wang,○ Gui	Dec. 15, 2020	China Industrial Commercial Research	Payroll Cycle-Performance Bonus Planning Practice Seminar	7

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			Institute
Assistant Manager	Wang, ○ Gui	Dec.29, 2020 ~ Dec. 30,2020	Securities & Futures Institute	Corporate Governance and Practice Seminar	12
Coordinator	Kao, ○ Yi	Nov. 5, 2020	Accounting Research and Development Foundation	The latest international development of IFRS and the direction of IFRS adoption/discussion on current affairs issues	3
Coordinator	Liu,○ Yu	Mar. 15, 2020 ~ Aug. 23,2020	Golden Certificates	CSIA Course	90
Manger	You, ○ Hao	May 18, 2020 ~ May19,2020	Accounting Research and Development Foundation	Continuing Training Course for Accounting Supervisors of the Issuer's Securities and Stock Exchanges Firm	12
Manager	You, ○ Hao	Nov. 19, 2020	PricewaterhouseCoopers Taiwan	Analysis of Key Financial Accounting Practical Issues in Corporate M&A	7
Coordinator	Young, ○ You	July 10, 2020	Softnext Technologies Corp	MSAE Basic Product Operation (MSAE-00A1)	3
Coordinator	Young, ○ You	Aug. 10, 2020	IP-guard	IP-guard V4 Information Endpoint Security Management and Control System	8
Coordinator	Young, ○ You	Aug. 21, 2020	Softnext Technologies Corp.	SPAM SQR Basic Product Operation and Practice	8
Coordinator	Li, ○ Zhen	Dec. 16, 2020	China Industrial Commercial Research Institute	Strategic Planning and Writing of Contemporary Contract Clauses	7
Coordinator	Liao, ○ Zhen	Feb. 10, 2020	104 Job Bank	Corporate Measures in Response to the Labor Incident Act	3

v. Other important agreements The Company applies to the Labor Standards Act, upon which all operations of the Company are based. As The Company always assert great importance to employee benefits and two-way communication with employees, the labor-management relationship is very harmonious. The company will continue to strengthen the communication and coordination between labor and management and do its best to implement welfare measures to promote a more concordant labor-management relationship so as to eliminate and avoid labor disputes.

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vi. Working environment and employee personal safety protection measures:

No.	Goals	Proposed Measures	Current Status	Implementation Status
1	Implementation of employee health management	Strict implementation of employee health check-up.	Entrusted medical institutes or health clinics to carry our annual employee health checkups	The Company has organized an employee health checkup activity in 2020.
2	Provide a comfortable and safe working environment	Fully carry out the Company's office and workplace management policy, and set up rules to prevent employees from smoking in the office	1 1.Regularly announce the implementation of office carpet cleaning, office disinfection, toilet cleaning and other operations. 2. Regularly carry out fire safety inspections to ensure a safe office environment. 3. Under the "Tobacco Hazards Prevention Act ", smoking is strictly forbidden in indoor office premises with three or more people in aim to achieve a smoke-free working environment.	In 2020, all cleanings were handled per the annual plan, with additional cleaning and repair services provided as needed at any time. The company has put out no-smoking signs and posters on the prevention of tobacco damage. The related staffs also help to discourage such violations at all time.
3	Establish a harmonious work environment for both genders	The Company has established " Prevention, Complaint and Punishment Measures of Sexual Harassment" per "Regulations for Establishing Measures of Prevention, Correction, Complaint and Punishment of Sexual Harassment at Workplace."	The " Prevention, Complaint and Punishment Measures of Sexual Harassment " declares to provide employees with a working environment free from sexual harassment so that they are free from unconsented and unacceptable physical or verbal sexual assaults or behaviors	Provide various methods and channels for complaints such as a dedicated hotline, fax and e-mail.
4	Provide life insurance to reduce related concerns	Provide free regular group insurance for employees.	Provide public-funded group insurance for employees and their dependents for enhanced protection.	If employees or their family members suffer from illness or accidents, they can receive appropriate reimbursement to upgrade medical care.

(2) Any loss due to labor disputes in the last year, as of the publication date of the annual report (including labor inspection results that violate the Labor Standards Act, in which case, the date of punishment, the penalty notice number, the violated clauses of related laws and regulations, the content of violations, and disciplinary content). Please disclose the estimated amount and countermeasures that may occur at present and in the future:

• (i) Losses of the Company due to labor disputes in the last two years, up to the publication date of the annual report: None.

• (ii) Estimated amount of losses and countermeasures for possible labor disputes in the future:

The company's labor-management relationship is harmonious, and employees are regarded as the company's most precious asset. All efforts are asserted in establishing a concordant labor-management relationship, and the possibility for future losses due to labor disputes is extremely low.

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6.Important Contracts

				May 2, 2021
Agreement	Counterparty	Period	Major Contents	Restriction Clauses
Construction contract	Star Energy	Expected year of completion: 2021	2 areas including Land No.10-27~10-33 (CHW01), Land No. 10-21~10-26 (CHW02) on Lunhai Section,etc.	Construction contract
Construction contract	WELE Mechatronic Co., Ltd.	Expected year of completion: 2021	5 lots including Land No. 725, etc., on Xiahankeng Section, Xinpu Town,Hsinchu County	Construction contract
Construction contract	PMI Group	Expected year of completion: 2021	Land No. 102-1, 103, 103-2, on Shanglin Section, Lugang Town, Changhua County	Construction contract
Construction contract	Shangzhi Asset Development Co., Ltd.	Expected year of completion: 2023	Land No. 123-10, on Yuanhe Section, Tucheng District, New Taipei City	Construction contract
Construction contract	Kaohsiung Medical University	Expected year of completion: 2022	26 lots including Land No. 10, etc. on Jingxin Section, Zhonghe District,New Taipei City	Construction contract
Construction contract	Chengshi Construction Co., Ltd.	Expected year of completion: 2022	Including Land No. 41, etc. on Xinxing Section, Taiping District, TaichungCity	Construction contract
Construction contract	Hwaguo Electrical Machinery Co., Ltd.	Expected year of completion: 2022	The Taichung City Precision Machinery Innovation Technology Park (1 lot including Land No. 89-23, etc. on Baowen Section, Nantun District,TaichungCity)	Construction contract
Construction contract	Taiwan Water Corporation	Expected year of completion: 2023	Xiwei Village, Wuri District, Taichung City	Construction contract
Construction contract	Copenhagen Infrastructure Partners (CIP)	Expected year of completion: 2021	Land No. 31-9, Luhai Section, Lugang Township, Changhua County (Changhua Coastal Industrial Park)	Construction contract
Construction contract	Construction and Planning Agency Ministry of the Interior,ROC	Expected year of completion: 2024	6 lots including Land No. 10, etc. on Jingxin Section, Zhonghe District, New Taipei City	Construction contract
Construction contract	Taichung City Government Housing Development Department	Expected year of completion: 2024	2 lots including Land No. 45, 56-12, etc., on Dongshizi Section, East District, Taichung City,	Construction contract
Construction contract	Taichung City Government Housing Development Department	Expected year of completion: 2023	Land No. 585-1, on Guoan Section, Xitun District, Taichung City	Construction contract
Construction contract	HDPE Star Enterprise Co., Ltd.	Expected year of completion: 2022	Land No. 233, 234, 244, on Yuan North Section, Yuanli Township, Miaoli County	Construction contract
	RichPak Enterprise
	Co.,Ltd,
Construction contract	San Zhong Gang Outlet Co.,Ltd.	Expected year of completion: 2021	No. 9, Section 1, Zhonger Road, Wuqi District,TaichungCity	Construction contract

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Agreement	Counterparty	Period	Major Contents	Restriction Clauses
Construction contract	San Zhong Gang Outlet Co., Ltd.	Expected year of completion: 2021	11 lots including Land No. 329-2, etc. on Gangkou Section, Wuqi District,TaichungCity	Construction contract
Construction contract	Wiltrom CO., Ltd. Wolf Dataware CO., Ltd. Point Robotics Medtech Inc.	Expected year of completion: 2022	1 lot including Land No. 1-26, etc. on Shixing Section, Zhubei City, Hsinchu County	Construction contract
Construction contract	Construction Office, Central District, Power Transmission and Transformation Engineering Department, Taipower Company	Expected year of completion: 2026	5 lots including Land No. 135-1, 135-301, 135-140, 154-142, 154-143, etc. on Nanguo subsection, Nanguo Section, Changhua City	Construction contract
Construction contract	Yaoda Construction Co., Ltd.	Expected year of completion: 2023	1 lot including Land No. 711, etc. on 3rd subsection, Tammei Section, Neihu District,Taipei City	Construction contract
Construction contract	Style Building Co., Ltd	Expected year of completion: 2023	2 lots including Land No. 984, etc. on Sankuai Section, Nantun District,TaichungCity	Construction contract
Construction contract	Taipei Hospital, Ministry of Health and Welfare	Expected year of completion: 2025	No. 127, Siyuan Road, Xinzhuang District, New Taipei City	Construction contract
Construction contract	Lizhu Development Co., Ltd	Expected year of completion: 2024	4 lots including Land No. 0102-0000, etc. on 1st Subsection, Lihe Section, Xinyi District, Taipei City	Construction contract
Construction contract	Datong Real Estate Co., Ltd.	Expected year of completion: 2024	16 lots including Land No. 98-29, etc. on Houlongzi Section, West District,TaichungCity	Construction contract

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VI. Financial Information

1. Five-Year Financial Summary

• (1) Concise Consolidated Balance Sheet and Comprehensive Income Statement – Based on IFRS

Concise Consolidated Balance Sheet

Unit: NTD Thousands

Year Item	Year Item		Financial Summary for	Financial Summary for	The Last Five Years (Note 1)	The Last Five Years (Note 1)
		2016	2017	2018	2019	2020	As of March 31, 2021
Current Assets		11,321,458	10,177,195	6,920,772	16,500,514	16,049,523	16,548,318
Real Estates, Factories and Facilities		42,782	38,973	28,976	204,849	5,466,743	5,457,596
Intangible Assets		3,074	6,195	3,948	83,133	86,289	85,440
Other Assets		2,289,853	3,304,126	5,669,620	1,924,009	2,627,865	2,449,334
Total Assets		13,657,167	13,526,489	12,623,316	18,712,505	24,230,420	24,540,688
Current Labilities	Before Distributio n	3,053,860	1,318,227	743,875	7,307,894	9,298,705	9,223,763
	After Distribution	3,228,528	1,441,620	870,353	7,307,894	Note 2	Note 2
Non-current Liabilities		2,048,573	2,550,081	2,605,617	2,826,058	5,397,745	5,430,083
Total Liabilities	Before Distributio n	5,102,433	3,868,308	3,349,492	10,133,952	14,696,450	14,653,846
	After Distribution	5,277,101	3,991,701	3,475,970	10,133,952	Note 2	Note 2
Interests attributable to owners of parent company		8,554,392	9,657,847	9,273,540	8,310,586	9,261,490	9,607,251
Capital Stock		5,066,133	4,935,723	5,059,116	4,047,293	3,947,293	3,947,293
Capital Surplus		282,060	204,798	204,798	130,417	146,633	146,633
Retained Earnings	Before Distributio n	2,790,259	3,819,077	3,919,699	4,885,506	5,875,475	6,264,396
	After Distribution	2,690,449	3,572,291	3,793,221	4,885,506	Note 2	Note 2
Other Equity		420,063	698,249	89,927	(70,795)	(26,076)	(69,236)
Treasury stock		(4,123)	-	-	(681,835)	(681,835)	(681,835)
Non-controlling interests		342	334	284	267,967	272,480	279,591
Total Equity	Before Distributio n	8,554,734	9,658,181	9,273,824	8,578,553	9,533,970	9,886,842
	After Distribution	8,380,066	9,534,788	9,147,346	8,578,553	Note 2	Note 2

Note 1: The above financial statements have been reviewed and audited by a certified accountant. Note 2: Profit for the year 2020 is yet to be sent to the shareholders' meeting for resolution.

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Concise (Consolidated) Comprehensive Income Statement

Unit: NTD Thousands

		Unit:	Unit:	Unit:	Unit:	NTD Thousands
Year Item		Financial Summary for The Last Five Years (Note 1)
	2016	2017	2018 (Note 2)	2019 (Note 4)	2020	As of March 31, 2021
Operating revenue	742,271	1,693,204	111,994	9,295,613	10,776,324	2,353,163
Gross profit	666,769	1,673,188	47,439	464,172	779,673	215,858
Operating income	467,998	1,431,189	(101,614)	106,951	337,179	87,381
Non-operating income and expenses	(65,381)	(75,842)	216,759	1,004,800	894,341	326,576
Income before Tax	402,617	1,355,347	115,145	1,111,751	1,231,520	413,957
Net income of continuing business units	392,234	1,209,691	25,097	887,193	1,128,337	395,797
Loss of suspended business units	-	-	-	-	-	-
Net income	392,234	1,209,691	25,097	887,193	1,128,337	395,797
Other Comprehensive income(net of tax)	1,066,080	275,862	(79,632)	49,332	30,681	(42,925)
Total comprehensive income	1,458,314	1,485,553	(54,535)	936,525	1,159,018	352,872
Net income attributable to stockholders of the parent company	392,609	1,209,728	25,102	865,253	1,100,637	388,921
Net income attributable to non-controllinginterests	(375)	(37)	(5)	21,940	27,700	6,876
Total comprehensive income attributable to stockholders of theparent	1,458,452	1,485,561	(54,485)	920,375	1,130,315	345,761
Total comprehensive income attributable to non-controllinginterests	(138)	(8)	(50)	16,150	28,703	7,111
Earnings per share (NTD) (Note 31)	0.72	2.38	0.05	1.87	3.05	1.09

Note 1: The information above was certified by the CPAs.

Note 2: Starting from January 1, 2018, the Company has no longer included gain and loss from disposal of financial assets, dividend income, and gains and losses from investment accounted for using equity method under operating revenue but under non-operating income/expenses instead.

Note 3: It is calculated based on the weighted average number of shares after retrospective adjustment for the ratio of surplus transferred to the capital increase.

Note 4: The Company has obtained control of Reiju Construction Co., Ltd. since March 4, 2019, so Reiju Construction Co., Ltd. has been included in the consolidated financial report from the first quarter of 2019.

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(2) Concise Individual Balance Sheet - Adopting International Financial Reporting Standards

Concise (Individual) Balance Sheet

Unit: NTD Thousands

			Unit: NTD Thousands	Unit: NTD Thousands	Unit: NTD Thousands	Unit: NTD Thousands
Year Item			Financial Summary for The Last Five Years (Note 1)
		2016	2017	2018	2019	2020
Current assets		6,791,073	7,699,470	4,418,663	6,677,691	6,814,993
Property, plant and equipment		27,172	25,717	23,755	21,572	18,828
Intangible assets		3,033	4,444	2,801	1,096	135
Other	assets	5,220,923	5,757,595	7,781,577	5,087,098	6,594,927
Total	assets	12,042,201	13,487,226	12,226,796	11,787,457	13,428,883
Current liabilities	Before distribution	1,439,236	1,279,291	415,736	1,004,757	1,692,198
	After distribution	1,613,904	1,402,684	542,214	1,004,757	Note 2
Non-current liabilities		2,562,815	2,048,573	2,550,088	2,472,114	2,475,195
Total liabilities	Before distribution	3,487,809	3,829,379	2,953,256	3,476,871	4,167,393
	After distribution	3,662,477	3,952,772	3,079,734	3,476,871	Note 2
Interests attributable to owners of parent company		8,554,392	9,657,847	9,273,540	8,310,586	9,261,490
Capital stock		5,066,133	4,935,723	5,059,116	4,047,293	3,947,293
Capital	reserve	282,060	204,798	204,798	130,417	146,633
Retained earnings	Before distribution	2,790,259	3,819,077	3,919,699	4,885,506	5,875,475
	After distribution	2,690,449	3,572,291	3,793,221	4,885,506	Note 2
Other interest		420,063	698,249	89,927	(70,795)	(26,076)
Treasury stock		(4,123)	-	-	(681,835)	(681,835)
Non-controlling interests		-	-	-	-	-
Total equity	Before distribution	8,554,392	9,657,847	9,273,540	8,310,586	9,261,490
	After distribution	8,379,724	9,534,454	9,147,062	8,310,586	9,261,490

Note 1: The information above was certified by the CPAs.

Note 2: Profit for the year 2020 is yet to be sent to the shareholders' meeting for resolution.

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Concise (Individual) Comprehensive Income Statement

Unit: NTD Thousands

		Unit: NTD Thousands	Unit: NTD Thousands	Unit: NTD Thousands	Unit: NTD Thousands
Year Item		Financial Summary for The Last Five Years (Note 1)
	2016	2017	2018 (Note 2)	2019	2020
Operating revenue	671,259	1,577,072	25,868	17,813	20,513
Gross profit	598,092	1,564,698	10,358	6,792	9,385
Operating income (loss)	448,032	1,397,940	(87,714)	(128,532)	(110,260)
Non-operating income	(45,310)	(57,289)	196,241	1,175,160	1,230,692
Profit before tax	402,992	1,340,651	108,527	1,046,628	1,120,432
Net income of continuing business units	392,609	1,209,728	25,102	865,253	1,100,637
Loss of suspended business units	-	-	-	-	-
Net income (loss)	392,609	1,209,728	25,102	865,253	1,100,637
Other comprehensive income (after-tax net)	1,065,843	275,833	(79,587)	55,122	29,678
Total comprehensive income	1,458,452	1,485,561	(54,485)	920,375	1,130,315
Net income attributable to stockholders of theparent company	392,609	1,209,728	25,102	865,253	1,100,637
Net income attributable non-controlling interests	-	-	-	-	-
Total comprehensive income attributable to stockholders of theparent company	1,458,452	1,485,561	(54,485)	920,375	1,100,637
Total comprehensive income attributable to non-controllinginterests	-	-	-	-	-
Earnings per share (Note 3)	0.72	2.38	0.05	1.87	3.05

Note 1: The information above was certified by the CPAs.

Note 2: Starting from January 1, 2018, the Company has no longer included gain and loss from disposal of financial assets, dividend income, and gains and losses from investment accounted for using equity method under operating revenue but under non-operating income/expenses instead.

Note 3: It is calculated based on the weighted average number of shares after retrospective adjustment for the ratio of surplus transferred to the capital increase.

(3) Auditing CPAs and audit opinions in the past five years

Year	Accounting Firm	CPA Name	Audit Opinion
2016	KPMG International	Chang, Shu-Ying & Wu,Mei Ping	Standard unqualified audit report
2017	KPMG International	Chang, Shu-Ying & Wu,Mei Ping	Standard unqualified audit report
2018	KPMG International	Chang, Shu-Ying & Wu, Mei Ping	Unqualified audit report with explanatory paragraph or modified wording
2019	KPMG International	Chang, Shu-Ying & Wu,Mei Ping	standard unqualified audit report
2020	KPMG International	Chang, Shu-Ying & Wu,Mei Ping	standard unqualified audit report

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2. Five-Year Financial Analysis

• (1) Consolidated Financial Analysis Adopting International Financial Reporting Standards

Item	Year	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)
		2016	2017	2018 (Note 3)	2019	2020	As of March 31, 2021
Financial structure	Ratio of liabilities to assets %	37.36	28.59	26.53	54.15	60.65	59.71
	Ratio of long-term capital to property, plant and equipment %	24,783.71	31,324.06	40,996.53	5,732.34	268.15	280.65
Solvency	Current ratio %	370.73	772.03	930.36	246.20	172.59	179.41
	Quick ratio %	345.85	672.06	617.45	199.84	130.69	136.81
	Interest coverage folds(times)	5.53	22.15	2.62	11.37	11.96	12.24
Operating capacity	Accounts receivable turnover rate(times)	21.37	29.75	449.77	14.92	10.86	2.38
	Average days for cash receipts	17.08	12.26	0.81	24.46	33.59	153.57
	Inventory’s turnover rate (times)	0.17	0.02	0.03	3.24	2.85	0.56
	Accounts payable turnover rate(times)	5.70	0.99	6.51	4.05	2.52	0.7
	Average days for sale of goods	2,198.06	18,250.00	12,166.66	112.65	128.07	650.84
	Turnover rate for property, plant and equipment(times)	9.94	41.42	3.29	79.50	3.80	0.83
	Total assets’ turnover rate (times)	0.06	0.12	0.00	0.59	0.50	0.11
Profitability	Assets return ratio (%)	3.48	9.29	0.62	6.20	5.67	2.00
	Equity return ratio (%)	4.70	13.28	0.26	10.09	12.84	4.34
	Pre-tax net profit to paid-in capital ratio(%)	7.95	27.46	2.27	27.46	31.19	10.49
	Net profit rate (%)	52.84	71.44	22.40	9.54	10.47	16.82
	Earnings per share (NTD)	0.72	2.38	0.05	1.87	3.05	1.09
Cash flow	Cash flow ratio (%)	(10.80)	(33.57)	(136.18)	(23.76)	(16.24)	(0.03)
	Cash flow sufficiency ratio (%)	2,619.81	2,229.80	1,459.26	544.11	(88.67)	(1.21)
	Cash reinvestment ratio (%)	(4.29)	(5.24)	(9.93)	(15.23)	(9.62)	(0.00)
Lever age	Operational leverage	1.23	1.02	0.69	1.61	1.19	2.47
	Financial leverage	1.23	1.05	0.58	(614.66)	1.50	1.73

Note 1: The information above was certified by the CPAs. Note 2: The Company has obtained control of Reiju Construction Co., Ltd. since March 4, 2019, so Reiju Construction Co., Ltd. has been included in the consolidated financial report from the first quarter of 2019.

Note 3: Starting from January 1, 2018, the Company has no longer included gain and loss from disposal of financial assets, dividend income, and gains and losses from investment accounted for using equity method under operating income but under non-operating income/expenses instead.

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Reasons for changes financial ratios over the last two years (the analysis is exempted for changes of less than 20%): A. Financial structure 1. Long-term funds accounted for the decrease in the ratio of real estate, plant and equipment: Mainly due to the merger of subsidiaries and the increase in real estate, plant and equipment in the year 2020 B. Solvency 1. Decline in current ratio: Mainly due to the increase in short-term borrowings in 2020. 2. Decline in quick ratio: Mainly due to the increase in short-term borrowings in 2020. C. Operating capacity 1. Decline in accounts receivable turnover rate (times): Due to the merger of Reiju Construction, the 。 average accounts receivable increased owing to the nature of the industry 2. Rise in the average days for cash receipts: Due to the merger with Reiju Construction, the average days for cash receipts should increase owing to the nature of the industry 3. Decline in accounts payable turnover rate (times): Mainly due to increase in average accounts payable 4. Decline in turnover rate for property, plant and equipment: Mainly due to merger of subsidiaries and increase in property, plant and equipment D. Profitability 1. Rise in return on equity‖ Mainly due to increase in net profit after tax 2. Rise in earnings per share: Mainly due to increase in net profit after tax E. Cash flow 1. Rise in cash flow ratio: Mainly due to increase in 2020 current liabilities 2. Decline in cash flow sufficiency ratio: Mainly due to decrease in net cash flow from operating activities 3. Rise in cash reinvestment ratio: Mainly due to merger of subsidiaries and increase in real estate, plant, and equipment. F. Leverage 1. Decline in operating leverage: Mainly due to the nature of the construction industry and is included in the data of the whole annual year of 2020 2. Rise in financial leverage: Mainly due to increase in 2020 operating profit

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(2) Individual Financial Analysis-Adopting International Financial Standard

Item	Year	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)
		2016	2017	2018(Note2)	2019	2020
Function structure	Ratio of liabilities to assets %	28.96	28.39	24.15	29.49	31.03
	Ratio of long-term capital to property, plant and equipment %	39,021.66	47,470.29	49,720.31	49,984.70	62,336.33
Solvency	Current ratio %	471.85	601.85	1,062.85	664.61	402.73
	Quick ratio %	452.44	539.65	652.00	489.34	293.10
	Interest coverage folds(times)	7.66	24.57	2.59	14.52	14.92
Operating capacity	Accounts receivable turnover	19.33	49.32	110.54	91.34	339.06
	rate(times)
	Average days for cash receipts	18.88	7.40	3.30	4.00	1.08
	Inventory’s turnover rate (times)	3.05	0.02	0.01	0.01	0.01
	Accounts payable turnover rate(times)	22.47	1.22	1.56	7.87	14.50
	Average days for sale of goods	119.82	18,250.00	36,500.00	36,500.00	36,500.00
	Turnover rate for property, plant and equipment(times)	12.88	59.63	1.04	0.78	1.02
	Total assets’ turnover rate (times)	0.06	0.12	0.00	0.00	0.00
Profitability	Assets return ratio (%)	3.70	9.84	0.61	7.72	9.24
	Equity return ratio (%)	4.70	13.28	0.26	9.84	12.53
	Pre-tax net profit to paid-in capital ratio(%)	7.95	27.16	2.14	25.85	28.38
	Net profit ratio (%)	58.49	76.71	97.03	4,857.42	5,365.56
	Earnings per share (NTD)	0.72	2.38	0.05	1.87	3.05
Cash flow	Cash flow ratio (%)	(31.40)	(11.15)	(9.93)	(143.54)	(45.54)
	Cash flow sufficiency ratio (%)	(107.17)	(43.93)	(25.79)	(71.45)	(118.69)
	Cash reinvestment ratio (%)	(5.49)	(2.70)	(1.44)	(14.31)	(12.99)
Leverage	Operational leverage	1.19	1.00	(0.12)	(0.05)	(0.09)
	Financial leverage	1.16	1.04	0.56	0.62	0.58

Note 1: The information above was certified by the CPAs ~~.~~

Note 2: Starting from January 1, 2018, the Company has no longer included gain and loss from disposal of financial assets, dividend income, and gains and losses from investment accounted for using equity method under operating income but under non-operating income/expenses instead.

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Reasons for changes financial ratios over the last two years (the analysis is exempted for changes of less than 20%): A. Financial structure Long-term funds accounted for the rise in the ratio of real estate, plant and equipment: Mainly due to increase in 2020 profit B. Solvency 1. Decline in current ratio and quick ratio: Mainly due to increase in 2020 short term borrowing C. Operating capacity 1. Rise in accounts receivable turnover rate (times): Mainly due to decrease in notes receivable 2. Decline in average days for cash receipts: Mainly due to rise in accounts receivable turnover rate (times) 3. Rise in accounts payable turnover rate (times): Mainly due to decrease in 2020 accounts payable 4. Rise in turnover rate for property, plant and equipment (times): Mainly due to increase in 2020 operating revenue D. Profitability 1. Rise in assets return ratio and return rate on shareholders’ equity: Mainly due to increase in 2020 net profit after tax 2. Rise in pre-tax net profit to paid-in capital ratio: Mainly due to increase in 2020 net profit before tax 3. Rise in net profit rate: Mainly due to increase in 2020 net profit after tax 4. Rise in earnings per share: Mainly due to increase in 2020 net profit after tax. E. Cash flow 1. Rise in cash flow ratio: Mainly due to decrease in 2020 net cash flow from operating activities 2. Decline in cash flow sufficiency ratio: Mainly due to no distribution of cash dividends in 2020 F. Leverage 1. Decline in operating leverage: Mainly due to increase in 2020 gross profit

i. Financial structure

• (i) Ratio of liabilities to assets = total liabilities / total assets

• (ii) Long term capital to property, plant and equipment ratio = (total equity + non-current liabilities) / net property, plant and equipment

• ii. Solvency

• (i) Current ratio = current assets / current liabilities

• (ii) Quick ratio = (current assets - inventory - prepaid expenses) / current liabilities

• (iii) interest coverage folds = net profit before income tax and interest expense / interest expense in the current period.

iii. Operating capacity

• (i) Accounts receivable (including accounts receivable and notes receivable due to business) turnover rate = net sales / average receivables for each period (including accounts receivable and notes receivable due to business)

• (ii) Average days for cash receipts = 365 / account receivable turnover rate

• (iii) Inventory turnover rate = sales cost / average inventory

• (iv) Payable (including accounts payable and notes payable due to business) turnover rate = cost of sales / average balance payable on each period (including accounts payable and notes payable due to business)

• (v) Average days for sale of goods = 365 / inventory turnover rate

• (vi) Turnover rate for property, plant and equipment = net sales / net average property, plant and equipment value

• (vii) Total assets’ turnover rate = net sales / average total assets

• iv. Profitability

• (i) Return on assets = [after tax profit and loss + interest expense × (1 - tax rate)] / average

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total assets 。

• (ii) Return on equity = after tax profit and loss / average equity

• 。

• (iii) Net profit ratio = after tax profit and loss / net sales

• (iv) Earnings per share = (profit or loss attributable to parent company owner - special 。

• dividend) / weighted average number of issued shares

• v. Cash flow

• (i) Cash flow ratio = net cash flow from operating activities / current liabilities

• (ii) Cash flow sufficiency ratio = net cash flow from operating activities in the last five years / (capital expenditure + inventory increase + cash dividend) in the last five years

• (iii) Cash reinvestment ratio = (net cash flow from operating activities - cash dividends) / (gross property, plant and equipment + long term investment + other non-current assets + working capital)

• vi. Leverage

• (i) Operating leverage = (net operating income - changing operating costs and expenses) / operating profit

• (ii) Financial leverage = operating profit / (operating profit - interest expense)

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3. Supervisors’ or Audit Committee’s Report in the Most Recent Year

The Board of Directors has prepared the Company’s 2020 business report, financial statements (including consolidated and individual financial reports) and a profit distribution proposal. The financial statements have been certified by CPA Chang, Shu-Ying and CPA Wu, Mei-Ping of KPMG International and issued a standard unqualified audit report. The documents mentioned above have been reviewed by the Audit Committee and found no discrepancy. Therefore, the report is as above under Article 219 of the Company Law. Please kindly verify.

Herby forward to

The Company’s 2020 General Shareholders Meeting

Long Bon International Co., Ltd. Convener of Audit Committee

March 23, 2021

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4. Latest Consolidated Financial Statements, and Independent Auditors’ Report: Please refer to Page 114

5. Latest Individual Financial Statements and Independent Auditors’ Report: Please refer to Page 114

6. The Impact on the Company's Financial Status as the result of the Company and Its Affiliates’ encounter of Financial Difficulties in the Past Year and as of the Date of Publication of the Annual Report: None

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VII. Review of Financial Conditions, Operating Results, and Risk Management 1. Financial Status (consolidated report)

Unit: NTD Thousands

			Unit: NTD Thousands	Unit: NTD Thousands
Year Item	2020	2019	Difference
			Amount	%
Current Assets	16,049,523	16,500,514	(450,991)	(2.7)
Investment	564,147	448,681	115,466	25.73
Other Assets	7,616,750	1,763,310	5,853,440	331.96
Total Assets	24,230,420	18,712,505	5,517,915	29.49
Current Liabilities	9,298,705	7,307,894	1,990,811	27.24
Non-current Liabilities	5,397,745	2,826,058	2,571,687	91.00
Total Liabilities	14,696,450	10,133,952	4,562,498	45.02
Common Stocks	3,947,293	4,047,293	(100,000)	(2.47)
Additional Paid-in Capital	146,633	130,417	16,216	12.43
Retained Earnings	5,875,475	4,885,506	989,969	20.26
Other Equities	(26,076)	(70,795)	44,719	63.17
Treasury Stocks	(681,835)	(681,835)	(681,835)	N/A
Total Owner's Equity Attributable to the Parent Company	9,261,490	8,310,586	950,904	11.44
Non-controlling Interests	272,480	267,967	4,513	1.68
Total Equity	9,533,970	8,578,553	955,417	11.14

• (1) The main reasons for major changes in assets, liabilities and shareholders' equity in the last two years (changes of over 20%)

i. Increase in other assets, total assets, current liabilities, non-current liabilities, total liabilities, and other equity: The main subsidiary, Everwin Investment acquired Dong Hua and North Bay Golf Court in 2020. The increase was included in the consolidated financial report.

ii. Increase in investment: Mainly due to the increase in investment using the equity method in 2020

iii. Increase in other equity: Mainly due to the increase in the profit of investment disposal of equity instruments measured at fair value through other comprehensive gains and losses in 2020

• (2) Impact of changes in financial status in the last two years: no significant impact

• (3) Future response plan: Not applicable.

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2. Financial Performance (consolidated report)

Unit: NTD Thousands

Year Item	2020	2019	Amount Increased ~~D~~	Change Ratio %
Net OperatingRevenue	10,776,324	9,295,613	~~(ecrease)~~ 1,488,711	15.93
OperatingCosts	9,996,651	8,831,441	1,165,210	13.19
Operating Gross Profit (Loss)	779,673	464,172	315,501	67.97
OperatingExpenses	442,494	357,221	85,273	23.87
Net OperatingProfit	337,179	106,951	230,228	215.26
Non-operating Income (Expense)	894,341	1,004,800	(110,459)	(10.99)
Profit before Tax	1,231,520	1,111,751	119,769	10.77
Tax Expenses (Income)	103,183	224,558	(121,375)	(54.05)
Profit of Current Period	1,128,337	887,193	241,144	27.18
Other Comprehensive Income (After Tax)	30,681	49,332	(18,651)	(37.81)
Current Total Comprehensive Income	1,159,018	936,525	222,493	23.76
Profit Attributable to
Owners of Parent Company	1,100,637	865,253	235,384	27.20
Non-controllingInterests	27,700	21,940	5,760	26.25
Total Comprehensive Income Attributable to
Owners of Parent Company Parent Company	1,130,315	920,375	209,940	22.81
Non-controllingInterests	28,703	16,150	12,553	77.73

• (1) The main reasons for the major changes in operating income, operating net profit and net profit before tax in the last two years (changes of over 20%):

• i. Increase in operating gross profit and operating net profit: Mainly due to the increase in operating income in 2020.

ii. Increase in operating expenses: Mainly due to business expansion in 2020

• iii. Decrease in income tax expenses: Mainly due to the decrease in the disposal of investment benefit in 2020 compared with that in 2019.

• iv. Increase in net profit for the current period: Mainly due to the increase in operating income in 2020.

• v. Decrease in other comprehensive income: Mainly due to the decrease in investment of equity instruments measured at fair value through other comprehensive income

• vi. The increase in total comprehensive income for the current period: mainly due to the increase in net profit for the current period

(2) Impact of changes in financial status in the last two years: No significant impact

• (3) Future response plan: Not applicable

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3. Analysis of Cash Flow

(1) Analysis of changes in cash flow

Beginning balance of cash and cash equivalent (1)	Net cash flow from operating activities throughout the year (2)	Annual cash outflow (3)	Cash surplus (Deficit) (1)+(2)-(3)	Leverage of cash deficit Investment plan Financial plan	Leverage of cash deficit Investment plan Financial plan
					Financial plan
973,550	(1,592,631)	4,193,729	3,574,648	None	None

• i. NTD 1,592,631,000 of Cash outflow from operating activities: mainly due to the increase in financial assets and contract assets measured at fair value through profit and loss.

• ii. NTD 5,353,374 of cash outflow from investment activities: Mainly due to disposal of financial assets.

• iii. NTD 1,159,080 thousand of cash outflow from financing activities: mainly due to repayment of cash dividends and cash capital reduction.

• (2) Remedy for a lack of liquidity: No cash shortage this year

• (3) Analysis of cash flow in the coming year (2020)

				Unit: NTD Thousands	Unit: NTD Thousands
Beginning balance of cash and cash equivalent (1)	Net cash flow from operating activities throughout the year (2)	Annual cash outflow (3)	Cash surplus (Deficit) (1)+(2)-(3)	Leverage of cash deficit
				Investment plan	Investment plan
3,574,648	(202,364)	603,784	1,374,786	None	None

• i. Analysis of cash flow

The company has cash dividends from financial assets and reinvestment in 2021, and it is expected that there will be no cash shortage in the coming year.

• ii. Remedial measures and liquidity analysis for expected cash shortage: None

4. Impact of Major Capital Expenditure in the Past Year on the Financial Status

• (1) Significant capital expenditures in 2020: The company did not have significant capital expenditures in 2020

• (2) Impact on financial operation: None.

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5. Re-investment Policy in the Past Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year

• (1) Re-investment policy

As for the reinvestment business, the Company continued to adjust the allocation of financial investment in 2020, gradually increasing the proportion of long-term investment holdings. As a result, the total cash dividends received from investing in Taishan, Reiju Construction, Dacheng Steel, etc., is NTD304,195 thousand, which will be injected into the cash flow of Long Bon Group to revitalize the source of the Group and produce more abundant and stable profits. The company's future business development strategy will focus on real estate development and related property management as its primary business scope and invest in finance, construction, cemetery real estate, golf and recreation through reinvestment. We have accumulated rich experience in financial and real estate operations and have shown excellent business performance. In the future, we will continue to increase the proportion of long-term investment through reinvestment so that the company's future operations can achieve sustainable operation goal in term of growth, stability and profitability.

• (2) Re-investment profit analysis

The Company’s net investment benefits from reinvestment recognized for the year 2020 is NTD 766,574 thousand, mainly because it was recognized as the profit from financial assets investment.

• (3) Re-investment improvement plan and investment plan for the next year.

• Actively supervise and assist the reinvestment business to improve its operating performance. The future development strategy will focus on real estate business, funeral service business, recreation and leisure entertainment business and financial investment business as the three main scopes.

6. Analysis and Assessment of Risk Management

• (1) The impact of interest rate, exchange rate changes, and inflation on the Company's profit and loss and future countermeasures:

• i. Interest rate changes

  • The Company's risk in the increased interest rate and expense is mainly from the bank loan. Although the interest rate increased slightly in 2020, there is no significant impact on the Company's interest expense. The company will continue to review its liability status and related financial policy to effectively reduces such risks.

If the interest rate increases or decreases by 0.5%, and all other variables remain unchanged, the company’s net profit after tax for the year 2020 and 2019 will decrease or increase by NTD 9,275,000 and increase or decrease by NTD 6,195,000, mainly because of the Company’s variable rate loans and bank deposits

• ii. Exchange rate changes

  • The company has no significant risk due to changes in the foreign currency exchange rate.

• iii. Inflation:

  • Changes in inflation have no significant impact on the company's profit and loss. However, the Company will continue to review the impact of inflation and appropriately control costs and expenses accordingly.

• (2) The primary reason for profit or loss and future countermeasures because of the policy for engagement in high risk and high leverage investment, loans to others, endorsement, and guarantees and derivative trading:

• i. The Company has established internal control procedures such as "Procedures for Funds Loaned to Others ", "Endorsement and Guarantees Procedures", and "Procedures for Acquiring or Disposing of Assets" for the funds loaned to others, endorsement and guarantees, and derivative commodity transactions.

• ii. Based on the principle for prudent and conservative operation, the Company has not engaged in high-risk, high-leverage investments in the year 2020, as of the publication date of the annual report.

• iii. The Company and the individual juridical persons in the consolidated financial statements provide endorsement guarantees for others. Such endorsements are handled under the "Endorsement and Guarantee Procedures" of each relevant company. In addition, the Company and individual juridical persons in the consolidated financial

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  - statement provide endorsement and guarantee to well-operated subsidiaries to reduce risks.

• iv. The Company and the individual juridical persons in the consolidated financial statements provide loans to others. Such loans are handled under each relevant company's "Procedure for Funds Loaned to Others". The Company and the individual juridical person in the consolidated financial statements provide loans to others who have a short-term financing need.

• v. The Company’s derivative commodity transactions at the end of 2020, as of the publication date of the annual report, were prudently implemented under the chapter ―Engaging in Derivative Financial Product Transactions‖ in the company’s ―Procedures for Acquiring or Disposing of Assets‖. The company will closely observe various risk of derivative commodity transactions to protect the Company's greatest rights and interests.

• (3) Future R&D projects and estimated R&D expenses: The Company had no product research and development plans for the year 2020, as of the publication date of the annual report, nor did it expect to invest in research and development expenses

• (4) The impact and countermeasure regarding important domestic and overseas policy and regulation changes on the Company's financial status:

• The Company pays close attention to domestic and foreign political and economic situations and legal changes and proposes corresponding countermeasures accordingly. However, important domestic and foreign policies and legal changes in the fiscal year 2020 as of the publication date of the annual report have no significant impact on the company's financial business.

• (5) The impact and countermeasures regarding changes in technology and industry on the Company's financial status.

• The Company continues to prosper in the real estate, hotel management, and investment sectors to maximize the synergy of the group and show better performance for the future.

• (6) The impact and countermeasures regarding the change in the corporate image on crisis management

• The Company's corporate image has always been good, and it has also been actively taking part in charitable activities. Therefore, there has been no significant corporate image change that caused a corporate crisis.

• (7) Expected benefits, possible risks and countermeasures of mergers and acquisitions: The Company has no plan for mergers and acquisitions in the current year as of the publication date of the annual report.

• (8) Expected benefits and possible risks of plant expansion The Company has no plan for plant expansion in the current year as of the publication date of the annual report.

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• (9) The impact of purchase and sale concentration risks and countermeasures: No such risk as there is no concern over purchase and sale concentration

• (10) The impact, risks and countermeasures of the company's massive transfer or exchange of shares by Directors, supervisors, or major shareholders holding over 10% of the shares on the Company: None.

• (11) The impact, risks and countermeasures of the change in management rights on the Company: None

• (12) Litigation or non-litigation events:

• i. The Company's major litigation, non-litigation or administrative disputes in the most recent year as of the publication date of the annual report: None

• ii. The significant litigation, non-litigation or administrative litigation with its judgment already made or pending, in the current year as of the publication date of the annual report, which is related to the Company's Directors, Supervisors, General Manager, the actual person in charge, and shareholders holding over 10% of the Company's or its affiliates' shares: None

• (13) Other significant risks and countermeasures Information security risks and countermeasures

The company has established an information software operating system and information security disaster recovery specifications, which are for the control of information assets such as computer hosts, database systems, application software systems and personal computers, operating information, personal privacy information, etc. of the company’s information service system in compliance to the principles of the Information Security Management System (ISMS) to ensure that the three goals of confidentiality, integrity and availability of information are achieved. The Company also aim to promote the strengthening of information security management, to establish a safe and reliable electronic information operating environment, and to secure the company's information when systems and operating data encounter information security incidents as the system can promptly report and adopt relevant emergency response mechanisms to resume normal operations in the shortest time to fulfil the sustainable operation of the company’s business.

The company regularly educates employees to understand the concept of information security through the "advocacy platform" and using an "email verification mechanism" to reduce the risk of phishing emails.

7. Other Important Matters: None

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VIII.

1. Summary of Affiliated Companies

Special Disclosure

• (1) Organization chart

==> picture [506 x 329] intentionally omitted <==

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

December 31, 2010
Longhui North Bay
Development Recreation
Everwin
Investment Baohui
Development
Longji Holding
(Singapore)
Longfu Sanzhi
Real Estate Tzu-An-Yuan
Ruipo Green
Long Bon Longbao RAiO Innovation
International Enterprise Technology
Shengji Interior
Design
Longde International Ruicheng
Investment Construction
Ryan
Reiju Construction
Development
Xiamen Reiju
Architecture
Engineering
----- End of picture text -----

(2) Basic data of affiliates		December 31, 2010	December 31, 2010	December 31, 2010
Company Name	Date of Establishme nt	Address	Paid -in Capital (NTD Thousands)	Major Business or Products
Everwin Investment Co., Ltd	05.28.1998	9th Floor, No. 50, Section 1, Zhongxiao West Road, Zhongzheng District, Taipei City	2,440,249	Investment in various production industries
Baohui Development Co., Ltd.	07.17.2020	9th Floor, No. 50, Section 1, Zhongxiao West Road, ZhongzhengDistrict,Taipei City	30,000	Golf court business
Longhui Development Co., Ltd.	06.01.2020	9th Floor, No. 50, Section 1, Zhongxiao West Road, Zhongzheng District, Taipei City	560,000	Investment in various production industries
North Bay Recreation Co., Ltd.	04.06.1988	9th Floor, No. 50, Section 1, Zhongxiao West Road, ZhongzhengDistrict,Taipei City	90,000	Golf court business
Longji Holdings (S) Pte Ltd	12.13.1995	336 Smith Street #06-308 New Bridge Center Singapore50336	SGD 5,567 thousand	Investment in foreign real estate and foreign trade

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Company Name	Date of Establishme nt	Address	Paid -in Capital (NTD Thousands)	Major Business or Products
Longfu Real Estate Co. LTD.	12.19.2019	9th Floor, No. 50, Section 1, Zhongxiao West Road, ZhongzhengDistrict,Taipei City	800,000	Funeral service
Sanzhi Tzu-An-Yuan Co., Ltd.	04.02.1998	1st Floor, No. 164, Section 2, Minquan East Road, Zhongshan District,Taipei City	3,000	Funeral service
Longbao Enterprise Co., Ltd.	09.14.2015	9th Floor, No. 50, Section 1, Zhongxiao West Road, ZhongzhengDistrict,Taipei City	600,000	Funeral service
Long De International Development Co., Ltd.	09.29.2020	9th Floor, No. 50, Section 1, Zhongxiao West Road, Zhongzheng District, Taipei City	1,000	Investment in various production businesses
Reiju Construction Co., Ltd.	02.04.1983	11th Floor-3, No. 50, Section 1, Zhongxiao West Road, ZhongzhengDistrict,Taipei City	820,485	Construction
Ruicheng Construction Co., Ltd.	10.23.1984	29th Floor, No. 220, Section 2, Taiwan Blvd., West District, TaichungCity	59,500	Construction
Ryan Development Co., LTD.	05.30.2018	55th Floor-1, No. 220, Section 2, Taiwan Blvd., Minlongli, West District,TaichungCity	250,000	Real estate investment and development
RAiO Technology INC.	06.09.1995	29th Floor, No. 220, Section 2, Taiwan Blvd., West District, TaichungCity	70,000	Civil engineering and architectural construction
Shengji Interior Design Co., Ltd.	04.06.2017	11th Floor-3, No. 50, Section 1, Zhongxiao West Road, ZhongzhengDistrict,Taipei City	20,000	Interio renovation
Ruipo Green Innovation Co., Ltd.	06.07.2018	5th Floor-1, No. 220, Section 2, Taiwan Blvd., Minlongli, West District,TaichungCity	2,000	Environmental protection related construction
Xiamen Reiju Architectural Engineering Co., Ltd.	01.08.2014	Room 628, Jianbang Building, Jiangtou Taiwan Street, Huli District,Xiamen	USD 1,300仟元	Architectural construction consultant

(3) Information about common shareholders of entities presumed to have a controlling and subordinate relationship: None

(4) The industries covered overall by the business of the affiliates:

The business operated by the Company and its affiliates includes real estate development and related property management, reinvestment in finance, construction, mainland real estate development, and other related businesses

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(5) Information about the directors, supervisors and general managers of the affiliates

			December 31, 2020	December 31, 2020
Company Name	Institutional Director (D) & Supervisor(S)	Name or Representative	Shareholding
			Share	%
Everwin Investment Co., Ltd	(D) Long Bon International Co., Ltd.	Shao, Ming-Bin	244,024,850	100.00%
Baohui Development Co.,Ltd.	(D)Everwin Investment Co.,Ltd	Shao,Ming-Bin	3,000,000	100.00%
Longhui Development Co.,Ltd.	(D)Everwin Investment Co.,Ltd	Shao,Ming-Bin	56,000,000	100.00
North Bay Recreation Co., LTD.	(D) Longhui Development Co., Ltd. (D) Longhui Development Co., Ltd. (D) Longhui Development Co., Ltd. (D) Longhui Development Co., Ltd. (D) Longhui Development Co., Ltd. Supervisor	Shao, Ming-Bin Tang, Shun-Zhen Lin, Shang-Liang Li, Zheng-Gang Chiang, Tsai-Yu Zhan,Chi-Hong	7,391,257 7,391,257 7,391,257 7,391,257 7,391,257 0	82.13% 82.13% 82.13% 82.13% 82.13% 0.00%
Longbao Enterprise Co., Ltd.	(D) Long Bon International Co., Ltd. (D) Long Bon International Co., Ltd. (D) Long Bon International Co., Ltd. (D)LongBon International Co.,Ltd.	Chen, Ji-Yi Shao, Ming-Bin Lin, Shang-Liang Tang,Shun-Zhen	60,000,000 60,000,000 60,000,000 60,000,000	100.00% 100.00% 100.00% 100.00%
Longji Holdings (S) Pte Ltd	(D) Long Bon International Co., Ltd. (D) Long Bon International Co., Ltd. Director	Lin, Guo-Xing Lin, Shang-Liang Goh Soo Chao	SGD 5,393,616 SGD 5,393,616 0	96.89% 96.89% 0.00%
Longfu Real Estate Co. Ltd.	(D)LongBon International Co.,Ltd.	Shao,Ming-Bin	80,000,000	100.00%
Sanzhi Tzu-An-Yuan Co.,Ltd.	(D)Longfu Real Estate Co. Ltd.	Shao,Ming-Bin	-	100.00%
Long De International Development Co.,Ltd.	(D) Long Bon International Co., Ltd.	Shao, Ming-Bin	100,000	100.00%
Reiju Construction Co., Ltd.	(D) Long Bon International Co., Ltd. (D) Long Bon International Co., Ltd. (D) Hengchuang Industrial co., ltd. (D) Hengchuang Industrial co., ltd. (D) Songgang Digital Cultural & Creative (D) Songgang Digital Cultural & Creative (D) Fortune Base Development Co. LTD (S)Global Funeral Service Co. LTD	Chang, Cheng-Yueh Lin, Guo-Xing Lin, Shang-Liang Cheng Ming-Xuan Shao, Ming-Bin Sao, Lai-Chun Tang, Shun-Zhen Lin,Yu-Zhi	73,927,537 73,927,537 499 499 500 500 500 600	90.10% 90.10% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Ruicheng Construction Co., Ltd.	(D) Reiju Construction	Chou, Kun-Ping	5,950,000	100.00%
RAiO Technology INC.	(D) Reiju Construction (D) Reiju Construction (D) Reiju Construction (S)Reiju Construction	Lin Chan-Yong Wang, Chao-Mei Chang, Cheng-Yueh Chen,Ching-Fong	7,000,000 7,000,000 7,000,000 7,000,000	100.00% 100.00% 100.00% 100.00%
Ryan Development Co., LTD.	Reiju Construction	Chang, Cheng-Yueh	25,000,000	100.00%
Shengji Interior Design Co., Ltd.	(D) RAiO Technology INC. (D) RAiO Technology INC. (D) RAiO Technology INC. (S)RAiO TechnologyINC.	Liu Zhi-Peng Chang, Cheng-Yueh Chang, Hao-Shun Chen,Ching-Fong	2,000,000 2,000,000 2,000,000 2,000,000	100.00% 100.00% 100.00% 100.00%
Ruipo Green Innovation Co.,Ltd.	(D)Reiju Construction	Chang,Shi-Ming	6,000,000	100.00%
Xiamen Reiju Architectural Engineering Co., Ltd.	(D) Reiju Construction (D) Reiju Construction (D) Reiju Construction (D) Reiju Construction (S)Reiju Construction	Chiang Shen-Chian Chang, Cheng-Yueh Wang, Zi-Long Tao, Bo-Wie Lin Chan-Yong	60,000,000 60,000,000 60,000,000 60,000,000 60,000,000	100.00% 100.00% 100.00% 100.00% 100.00%

-109-

(6) Operation Overview of the Affiliates

(6) Operation Overview of the Affiliates	(6) Operation Overview of the Affiliates	(6) Operation Overview of the Affiliates	(6) Operation Overview of the Affiliates	(6) Operation Overview of the Affiliates	(6) Operation Overview of the Affiliates	(6) Operation Overview of the Affiliates	(6) Operation Overview of the Affiliates	(6) Operation Overview of the Affiliates
December 31, 2020 Unit: NTD Thousands
Company Name	Capital	Assets	Liabilities	Net Worth	Operating Income	Profit and Lose	Net	Basic Earnings per Share
Everwin Investment Co., Ltd	2,440,249	4,053,468	1,254,779	2,798,689	196,234	187,749	178,204	0.73
Baohui Development Co., Ltd.	30,000	44,951	13,657	31,294	42,474	(3,851)	1,294	0.43
Longhui Development Co., Ltd.	560,000	575,832	202	575,630	0	(1,327)	(1,327)	(0.02)
North Bay Recreation Co., LTD.	90,000	3,288,830	2,731,424	557,406	78,265	(16,107)	(28,879)	(3.21)
Longbao Enterprise Co., Ltd.	600,000	669,383	53,479	615,904	142,575	18,762	14,548	0.24
Long De International Development Co., Ltd.	1,000	975	0	975	0	(25)	(25)	(0.25)
Longji Holdings (S) Pte Ltd	SGD 5,567	SGD 554	SGD 72	SGD 482	SGD 0	SGD 0	SGD 0	SGD 0
Longfu Real Estate Co. Ltd.	700,000	815,346	120,511	694,835	987	(5,056)	(4,983)	(0.07)
Sanzhi Tzu-An-Yuan Co., Ltd.	3,000	8,628	8,670	(42)	6,471	899	901	3.00
Reiju Construction Co., Ltd.	820,485	6,446,201	5,506,239	939,962	10,188,753	372,388	310,430	3.78
Ruicheng Construction Co., Ltd.	59,500	141,473	74,731	66,742	290,882	17,173	14,112	2.37
RAiO Technology INC.	70,000	104,657	24,156	80,501	34,851	11,274	8,281	1.18
Ryan Development Co., LTD.	250,000	910,156	697,294	212,862	0	(16,231)	(13,667)	(0.55)
Shengji Interior Design Co., Ltd.	20,000	40,653	15,060	25,593	64,807	293	127	0.06
Ruipo Green Innovation Co., Ltd.	2,000	335	80	255	0	(907)	(539)	(2.69)

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Xiamen Reiju Architectural Engineering Co., Ltd.	CNY 8,565	CNY Thousands 2,214	CNY Thousands 928	CNY Thousands 1,286	CNY Thousands 2,160	CNY Thousands -1,714	CNY Thousands -1,656	NA

• (7) Declaration for consolidated financial statements and relation with the affiliates:

Long Bon International Co., Ltd. Letter of Declaration

The entities that are required to be included in the consolidated financial statements of the Company as of and for the year ended December 31, 2020, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, ―Consolidated Financial Statements.‖ In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, the Company and Subsidiaries do not prepare a separate set of combined financial statements.

Hereby declare

Company Name: Long Bon International Co., Ltd.

Chairman: Liu, Wei-Long

March 23, 2021

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1. Private Placement Securities in the Past Years and as of the Publication Date of the Annual Report: None

2. The Company’s Shares Held or Disposed of by Affiliates in the Past Year and as of the Publication Date of the Annual Report: None

3. Other Necessary Disclosures: None

IX. Events with a material impact on shareholders' rights and interests or securities prices as specified in Article 36, Item 3, paragraph 2 of the Securities Exchange Act, in the past year and as of the date of the publication of the annual report: None

-112-

Stock Code:2514

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Consolidated Financial Statements

with Independent Auditors ’ Report

For the Years Ended December 31, 2020 and 2019

Address : 9F., No. 50, Sec. 1, Zhongxiao W. Rd., Zhongzheng Dist., Taipei City Telephone : (02)2375-6595

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

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Representation Letter

The entities that are required to be included in the combined financial statements of Long Bon International Co., Ltd. as of and for the year ended December 31, 2020 under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory Commission, "Consolidated Financial Statements". In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Long Bon International Co., Ltd. and Subsidiaries do not prepare a separate set of combined financial statements.

Company name : Long Bon International Co., Ltd. Chairman : Liu, Wei-Lung Date : March 23, 2021

114

Independent Auditors ’ Report

To the Board of Directors of Long Bon International Co., Ltd.:

Opinion

We have audited the consolidated financial statements of Long Bon International Co., Ltd. and its subsidiaries (‚the Group‛), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (‚IFRSs‛), International Accounting Standards (‚IASs‛), Interpretations developed by the International Financial Reporting Interpretations Committee ( ‚ IFRIC ‛ ) or the former Standing Interpretations Committee (‚SIC‛) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (‚the Code‛), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

1. Acquisition, disposal and evaluation of financial assets

Refer to Note 4(g) ‚Financial instruments‛, 6(b) and (c) ‚ Financial Assets‛ to the consolidated financial statements for the accounting policy and the details of the information.

115

Description of the key audit matter

The carrying amounts of "financial assets at fair value through profit or loss" and "financial assets at fair value through other comprehensive income" constitute 23% of total assets of the Group, which is significant for the financial statements as a whole. In addition, the Group’s recognized financial assets were evaluated at fair value. As for equity investment in unlisted companies, the fair value was obtained based on valuation technique or the quotation of the counterparty, and was recognized as "financial assets at fair value through other comprehensive income". Since the valuation result of financial assets involves the financial restriction clause of financial institutions loan agreement for financing, it further impacts working capital management. Therefore, the acquisition, disposal of financial assets and the testing of end-of-period valuation were determined to be a critical matter in our audit of Group’s consolidated financial reports.

How the matter was addressed in our audit

Our main audit procedures for the above key audit matter include testing of the relevant control of acquisition, disposal, valuation, and accounting in the investment cycle; sampling the acquisition and disposal of financial assets, and checking relevant documents; reviewing as well as adjusting the PSI table and general ledger entries; obtaining financial institution confirmation and looking into the TDCC passbook provided by our client; checking the closing market prices of each financial asset on the balance sheet date on the TWSE website, with a view to assess the appropriateness of the amounts recognized at the end of the year. We checked passbooks and bank statements in order to assess the reasonableness of the cash flow from the transaction of financial assets. In addition, for the assessment of financial assets at fair value through other comprehensive income, we obtained from management the appraisal reports about the fair values of the underlying financial assets which were appraised by external experts. Moreover, for the valuation of financial assets at fair value through other comprehensive income in unlisted companies, we conducted a stock share count at the end of the year and obtained bank confirmations, in order to ascertain their existence.

1. The fair values of net assets of subsidiaries acquired

Please refer to note 4(t), ‚Business combination‛ for the accounting policies for the fair value of net assets of subsidiaries acquired, note 5 ‚Significant accounting assumptions and judgments, and major sources of estimation uncertainty‛ for estimation and assumption uncertainty, and note 6(f) ‚Business combination‛ for related disclosure.

Description of the key audit matter

In 2020, the Group acquired 82.13% equity interest in North Bay Recreation Co., Ltd. (‚North Bay‛). With more than 50 percent equity interest held, the Group gained control over North Bay and made it a subsidiary. Under the IFRSs No. 3 "Business Combinations ‚, the Group is required to determine the fair value of the identifiable assets acquired and liabilities assumed of North Bay at the date of acquisition. As the amount of such acquisition transaction is significant and the fair value of its net assets at the date of acquisition involves accounting estimates, failure to present the amount appropriately would result in misrepresentation of the financial statements. Therefore, this account was determined to have material impact on the financial statements.

How the matter was addressed in our audit

For the purchase price allocation report issued by the independent expert appointed by the Group, the audit procedures performed among others include: Evaluating related experience, competence, and reputation of the independent professional appraiser appointed by management with the appraiser’s objectivity taken into consideration; interviewing the appraiser to ascertain the scope and approaches adopted were in conformity with evaluation standards and industry specifications. Our internal specialist probed into the document related to the purchase price allocation report, and the reasonableness of the evaluation methodology adopted, with a

116

view to ascertaining whether the fair value of the identifiable net assets of the acquired company was appropriate.

117

1. Revenue Recognition of Construction Contract

Refer to note 4(q) ‚Revenue from contracts with customers‛ for the accounting policies for revenue recognition, note 5 ‚Significant accounting assumptions and judgments, and major sources of estimation uncertainty‛, and 6(q) ‚Revenue from contracts with customers‛ for the detail of revenue recognition during the year.

Description of the key audit matter

The major business activities of the Group include construction contracts entered into with clients, contributing a significant proportion to operating revenue. Since the revenue from construction contracts is recognized by the percentage of completion method during the contract period, and the revenue recognition involves significant accounting estimates such as estimated total cost of work, completion level, and variable consideration.

When determining transaction price, consideration, which may change due to discounts, rebates, penalties, or other similar items, shall be taken into account. Besides, the extent of completion is calculated based on the percentage of the cost arising from each contract of the estimated total cost of that construction contract as of the reporting date. Moreover, both the aforesaid changes in consideration and the estimated total cost involving accounting estimate give rise to uncertainty and impact the recognition of revenue from construction contracts. Accordingly, the recognition of the profit or loss on construction contracts was identified as a matter of importance in our audit of the Group’s consolidated financial statements.

How the matter was addressed in our audit

Our audit procedures in this area included, among others: Testing the internal control of the timing and accuracy of the recognition of revenue and costs to ascertain its effectiveness; sampling significant contracts and interviewing management so as to understand the specific terms and risks of each construction contract; testing the evaluation document and procedure taken by management to evaluate total estimated costs, completion of construction, profitability of contracts, and variable consideration; checking the procedure of construction estimation, as well as juxtaposing and reconciling the estimates with the general ledger, and assessing whether the recognition of revenue and cost of construction contracts was consistent with pertinent accounting standards.

Other Matter

Long Bon International Co., Ltd. has additionally prepared its parent-company-only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unmodified opinion.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRSs, IASs, IFRC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

118

’ Those charged with governance (including the Audit Committee) are responsible for overseeing the Group s financial reporting process.

119

Auditors ’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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

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

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

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

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

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Shu-Ying Chang and Mei-Pin Wu.

KPMG

Taipei, Taiwan (Republic of China) March 23, 2021

Notes to Readers

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

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

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(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2020 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 1,911,545 8 1110 Current financial assets at fair value through profit or loss (Note 6(b) and 8) 5,195,794 21 1140 Current contract assets (Note 6(q) and 9) 2,835,103 12 1150 Notes receivable, net (Note 6(d) and (q)) 313,159 1 1170 Accounts receivable, net (Note 6(d), (q), 7 and 9) 425,050 2 1200 Other receivables, net (Note 6(t) and 9) 55,513 - 1260 Current tax assets 341 - 1320 Inventories (for construction business), net (Note 6(e), 7, 8 and 9) 3,896,762 16 1476 Other current financial assets (Note 6(s), 8 and 9) 1,156,308 5 1479 Other current assets (Note 7) 227,286 2 1480 Current assets recognised as incremental costs to obtain contract with customers 32,662 - 16,049,523 67 Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Note 6(c)) 479,694 2 1535 Non-current financial assets at amortized cost, net (Note 13) 80,624 - 1550 Investments accounted for using equity method, net 3,829 - 1600 Property, plant and equipment (Note 6(e), (g) and 8) 5,466,743 23 1760 Investment property, net (Note 6(h), 7 and 8) 1,049,766 4 1780 Intangible assets (Note 6(f)) 86,289 - 1840 Deferred tax assets (Note 6(n)) 107,011 - 1755 Right-of-use assets 13,588 - 1975 Net defined benefit asset, non-current 10,863 - 1980 Other non-current financial assets (Note 7 and 8) 579,974 3 1990 Other non-current assets (Note 7 abd 9) 302,516 1 8,180,897 33 Total assets $ 24,230,420 100	December 31, 2020 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 1,911,545 8 1110 Current financial assets at fair value through profit or loss (Note 6(b) and 8) 5,195,794 21 1140 Current contract assets (Note 6(q) and 9) 2,835,103 12 1150 Notes receivable, net (Note 6(d) and (q)) 313,159 1 1170 Accounts receivable, net (Note 6(d), (q), 7 and 9) 425,050 2 1200 Other receivables, net (Note 6(t) and 9) 55,513 - 1260 Current tax assets 341 - 1320 Inventories (for construction business), net (Note 6(e), 7, 8 and 9) 3,896,762 16 1476 Other current financial assets (Note 6(s), 8 and 9) 1,156,308 5 1479 Other current assets (Note 7) 227,286 2 1480 Current assets recognised as incremental costs to obtain contract with customers 32,662 - 16,049,523 67 Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Note 6(c)) 479,694 2 1535 Non-current financial assets at amortized cost, net (Note 13) 80,624 - 1550 Investments accounted for using equity method, net 3,829 - 1600 Property, plant and equipment (Note 6(e), (g) and 8) 5,466,743 23 1760 Investment property, net (Note 6(h), 7 and 8) 1,049,766 4 1780 Intangible assets (Note 6(f)) 86,289 - 1840 Deferred tax assets (Note 6(n)) 107,011 - 1755 Right-of-use assets 13,588 - 1975 Net defined benefit asset, non-current 10,863 - 1980 Other non-current financial assets (Note 7 and 8) 579,974 3 1990 Other non-current assets (Note 7 abd 9) 302,516 1 8,180,897 33 Total assets $ 24,230,420 100	December 31, 2019 Amount % 3,574,648 19 3,762,442 20 2,969,218 16 343,556 2 901,485 5 313,557 2 483 - 3,107,365 17 1,327,738 7 173,777 1 26,245 -
	16,049,523 67	16,500,514 89
	479,694 2 80,624 - 3,829 - 5,466,743 23 1,049,766 4 86,289 - 107,011 - 13,588 - 10,863 - 579,974 3 302,516 1	445,558 2 - - 3,123 - 204,849 1 718,664 4 83,133 - 103,142 1 41,875 - 10,440 - 576,607 3 24,600 -
	8,180,897 33	2,211,991 11
	$ 24,230,420 100	18,712,505 100

See accompanying notes to consolidated financial statements.

122

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets (CONT ’ D)

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Liabilities and Equity Current liabilities: 2100 Short-term borrowings (Note 6(i)) 2110 Short-term notes and bills payable (Note 6(j)) 2130 Current contract liabilities (Note 6(q) and 7) 2151 Notes payable (Note 7) 2171 Accounts payable (Note 7) 2200 Other payables (Note 6(b), (r) and 7) 2230 Current tax liabilities 2250 Current provisions (Note 6(e) and 9) 2280 Current lease liabilities (Note 7) 2300 Other current liabilities 2322 Long-term borrowings, current portion (Note 6(k)) Non-Current liabilities: 2527 Non-current contract liabilities (Note 6(q)) 2530 Bonds payable (Note 6(l)) 2540 Long-term borrowings (Note 6(k)) 2550 Non-current provisions (Note 6(e)) 2570 Deferred tax liabilities (Note 6(n)) 2580 Non-current lease liabilities (Note 7) 2645 Guarantee deposits received (Note 6(f)) Total liabilities Equity attributable to owners of parent (Note 6(c), (f) and (o)) 3100 Capital stock 3200 Capital surplus 3300 Retained earnings 3400 Other equity interest 3500 Treasury shares Total equity attributable to owners of parent: 36XX Non-controlling interests Total equity Total liabilities and equity	December 31, 2020	December 31, 2020	December 31, 2020
	Amount	%	Amount
	9,298,705 40 7,307,894 39
	32,101 - 18,539 - 2,469,730 10 2,466,135 13 281,310 1 325,740 2 118,554 - - - 496,955 2 216 - 5,014 - 10,766 - 1,994,081 8 4,662 -
	5,397,745 21 2,826,058 15
	14,696,450 61 10,133,952 54
	3,947,293 16 4,047,293 22 146,633 1 130,417 1 5,875,475 24 4,885,506 26 (26,076) - (70,795) - (681,835) (3) (681,835) (4)
	9,261,490 38 8,310,586 45
	272,480 1 267,967 1
	9,533,970 39 8,578,553 46
	$ 24,230,420 100 18,712,505 100

See accompanying notes to consolidated financial statements.

123

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Share)

4000 Operating revenues (Note 6(m), (q), 7 and 9) 5000 Operating costs (Note 6(m) and 7) Gross profit from operations Operating expenses (Note 6(r) and 7): 6100 Selling expenses 6200 Administrative expenses 6450 Impairment gain and reversal of impairment loss determined in accordance with IFRS 9, net (Note 6(d)) Net operating income Non-operating income and expenses (Note 6(s)): 7100 Interest income 7010 Other income 7020 Other gains and losses, net (Note 6(f)) 7050 Finance costs, net (Note 7) 7060 Share of profit (loss) of associates and joint ventures accounted for using equity method, net 7055 Impairment gain and reversal of impairment loss determined in accordance with IFRS 9, net (Note 6(t)) 7900 Profit from continuing operations before tax 7950 Less: Income tax expenses (Note 6(n)) Profit 8300 Other comprehensive income (loss) (Note 6(o)): 8310 Items that will not be reclassified subsequently to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Items that will not be reclassified subsequently to profit or loss 8360 Items that will not be reclassified subsequently to profit or loss 8361 Exchange differences on translation of foreign financial statements 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss (Note 6(n)) Items that will be reclassified subsequently to profit or loss 8300 Other comprehensive income Total comprehensive income Profit attributable to: Owners of parent Non-controlling interests Comprehensive income attributable to: Owners of parent Non-controlling interests Earnings per share (Note 6(p)) Basic earnings per share Diluted earnings per share	2020	2020	% 100 93	2019	% 100 95
	Amount $ 10,776,324 9,996,651			Amount 9,295,613 8,831,441
	779,673		7	464,172	5
	56,356 386,138 -		1 4 -	58,751 309,988 (11,518)	1 3 -
	442,494		5	357,221	4
	337,179		2	106,951	1
	28,447 216,523 746,724 (112,282) (1,221) 16,150		- 2 7 (1) - -	41,247 184,109 874,367 (107,125) (2,798) 15,000	1 2 9 (1) - -
	894,341		8	1,004,800	11
	1,231,520 103,183		10 1	1,111,751 224,558	12 2
	1,128,337		9	887,193	10
	(46) 30,949 - -		- - - -	(1,228) 37,542 (12,528) -	- - - -
	30,903		-	23,786	-
	(195) - (27)		- - -	1,316 29,990 (5,760)	- - -
	(222)		-	25,546	-
	30,681		-	49,332	-
	$ 1,159,018		9	936,525	10
	$ 1,100,637 27,700		10 -	865,253 21,940	9 -
	$ 1,128,337		10	887,193	9
	$ 1,130,315 28,703		9 -	920,375 16,150	10 -
	$ 1,159,018		9	936,525	10
	$		3.05		1.87
	$		3.05		1.86

See accompanying notes to consolidated financial statements.

124

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Balance on January 1, 2019 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve appropriated Cash dividends of ordinary share Proceeds from disposal of investments accounted for using equity method Adjustments of capital surplus for company's cash dividends received by subsidiaries Capital reduction Difference between consideration and carrying amount of subsidiaries acquired or disposed of Changes in ownership interests in subsidiaries Due to business combination Changes in non-controlling interests Disposal of investments in equity instruments at fair value through other comprehensive income Balance on December 31, 2019 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve appropriated Cash dividends of ordinary share Due to business combination Purchase of treasury share Retirement of treasury share Difference between consideration and carrying amount of subsidiaries acquired or disposed of Changes in non-controlling interests Disposal of subsidiaries Disposal of investments in equity instruments at fair value through other comprehensive income Balance on December 31, 2020		Equity attributable to owners of parent	Equity attributable to owners of parent	Non-controll ing interests
	Capital stock Common stock Capital surplus	Retained earnings	Other equity interest Unrealized Exchange differences on translation of foreign financial statements gains (losses) on financial assets measured at fair value through other comprehensive income Total other equity interest Treasury shares Total equity attributable to owners of parent
		Legal reserve Unappropriated retained earnings Total retained earnings
	- - - 865,253 865,253 - - - - 865,253 21,940 887,193 - - - (1,107) (1,107) 25,638 30,591 56,229 - 55,122 (5,790) 49,332
	- - - 864,146 864,146 25,638 30,591 56,229 - 920,375 16,150 936,525
	- - 2,510 (2,510) - - - - - - - - - - - (126,478) (126,478) - - - - (126,478) - (126,478) - - - (13,649) (13,649) 11,748 13,649 25,397 - 11,748 - 11,748 - 11,440 - - - - - - - 11,440 - 11,440 (1,011,823) - - - - - - - 91,522 (920,301) - (920,301) - (85,675) - - - - - - - (85,675) (295,073) (380,748) - (146) - (510) (510) - - - - (656) 656 - - - - (50) (50) - - - (773,357) (773,407) 551,777 (221,630) - - - - - - - - - - (5,827) (5,827) - - - 242,348 242,348 - (242,348) (242,348) - - - -
	4,047,293 130,417 471,151 4,414,355 4,885,506 14,712 (85,507) (70,795) (681,835) 8,310,586 267,967 8,578,553 - - - 1,100,637 1,100,637 - - - - 1,100,637 27,700 1,128,337 - - - (41) (41) (239) 29,958 29,719 - 29,678 1,003 30,681
	- - - 1,100,596 1,100,596 (239) 29,958 29,719 - 1,130,315 28,703 1,159,018
	- - 86,525 (86,525) - - - - - - - - - - - - - - - - - - (12,182) (12,182) - - - - - - - - - - 153,305 153,305 - - - - - - - - (129,788) (129,788) - (129,788) (100,000) (398) - (29,390) (29,390) - - - 129,788 - - - - 16,614 - (66,237) (66,237) - - - - (49,623) (181,291) (230,914) - - - - - - - - - - 17,588 17,588 - - - - - - - - - - (1,610) (1,610) - - - (15,000) (15,000) - 15,000 15,000 - - - -
	$ 3,947,293 146,633 557,676 5,317,799 5,875,475 14,473 (40,549) (26,076) (681,835) 9,261,490 272,480 9,533,970

See accompanying notes to consolidated financial statements.

125

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Impairment gain and reversal of impairment loss determined in accordance with IFRS 9 Net (gain) loss on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss of associates and joint ventures accounted for using equity method Gain on disposal of property, plan and equipment Loss on disposal of investment properties Loss (gain) on disposal of investments Profit from lease modification Impairment loss Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Financial assets at fair value through profit or loss Contract assets Notes receivable Accounts receivable Other receivables Inventories Net defined benefit assets Other current financial assets Other current assets Current assets recognized as incremental costs to obtain contract with customers Other non-current financial assets Contract liabilities Notes payable Accounts payable Other payable Provisions Other current liabilities Total adjustments Cash outflow generated from operations Interest received Dividends received Interest paid Income taxes paid Net cash outflows from operating activities	2020 $ 1,231,520 54,750 8,215 (16,150) (767,795) 112,282 (28,447) (193,788) 1,221 (461) 9,360 1,496 (3) 7,312	2019 1,111,751 51,449 6,591 (26,518) 127,334 107,125 (41,247) (161,749) 2,798 (12) - (1,101,425) - -
	(812,008)	(1,035,654)
	(675,096) 134,130 30,397 477,920 (1,863) (667,579) (469) (256,999) (58,445) (6,417) - (81,033) (388,012) (399,450) 96,906 (1,045) (5,201)	(1,313,341) (1,045,531) (102,850) (218,632) (34,266) (250,743) (661) (132,091) 15,529 (26,245) (5,146) (452,188) 699,403 1,230,217 129,300 29,614 (47,775)
	(2,614,264)	(2,561,060)
	(1,382,744) 28,724 193,788 (112,550) (237,348)	(1,449,309) 37,106 161,749 (100,612) (241,565)
	(1,510,130)	(1,592,631)

See accompanying notes to consolidated financial statements.

126

(English Translation of Consolidated Financial Statements and Report Originally Issued in Chinese) LONG BON INTERNATIONAL CO., LTD. AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows(CONT ’ D)

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortized cost Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Prepayments for land and buildings Acquisition of subsidiaries (net of cash received) Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of investment properties Other receivables Acquisition of intangible assets Proceeds from disposal of investment properties Other current financial assets Other non-current financial assets Other non-current assets Net cash (outflows) inflows from investing activities Cash flows from financing activities: Increase in short-term loans Increase (decrease) in short-term notes and bills payable Proceeds from long-term debt Repayments of long-term debt Increase in guarantee deposits received Payment of lease liabilities Cash dividends paid Capital reduction Repurchase of treasury shares Cash dividends paid by subsidiaries Acquisition of ownership interests in subsidiaries Change in non-controlling interests Net cash inflows (outflows) from financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period	2020 (88,187) 112,052 (79,980) (3,900) 4,235 (230,280) (303,916) (1,683,117) 2,883 (296,067) 248,733 (6,563) 93,402 87,372 (756) (8,324)	2019 (3,298) 1,718,472 - - 2,617,316 - 600,091 (18,979) 12 (48,420) (185,000) (2,465) - (29,867) 704,582 930
	(2,152,413)	5,353,374
	2,277,772 168,317 202,520 (264,524) 1,345 (30,720) - - (129,788) (12,182) (230,914) 17,588	900,450 (469,911) - (120,300) 497 (27,827) (115,038) (920,301) - - (380,748) (25,902)
	1,999,414	(1,159,080)
	26 (1,663,103) 3,574,648	(565) 2,601,098 973,550
	$ 1,911,545	3,574,648

See accompanying notes to consolidated financial statements.

127

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

Long Bon International Co., Ltd. (the ‚Company‛) was established in January 22, 1988 in accordance with the Company Act of the Republic of China. The Company’s registered office address is located at 9F., No. 50, Sec. 1, Zhongxiao W. Rd., Zhongzheng Dist., Taipei City 100, Taiwan (R.O.C.). Originally known as Long Bon Construction Co., Ltd. with its common stock listed on the Taiwan Stock Exchange (TWSE) in September 1992, the Company was renamed Long Bon Development Co., Ltd. in 1997, and renamed Long Bon International Co., Ltd. anew in 2009. The major business activities of the Company and its subsidiaries (the‛ Group‛) are the commercial building rental service and sale, property investment and development, and architecture and civil engineering. Please refer to note 4(c) for further information.

(2) Approval date and procedures of the consolidated financial statements

The accompanying consolidated financial statements were authorized for issue by the Board of Directors on March 23, 2021.

(3) New standards, amendments and interpretations adopted

• (a) Impact of adopting new, revised, or amended standards and interpretations endorsed by the Financial Supervisory Commission, R.O.C. (‚FSC‛).

The Group has initially adopted the following amendments to IFRS, from January 1, 2020, which did not have any material impact on its consolidated financial statements.

• Amendments to IFRS 3 ‚Definition of a Business‛

• Amendments to IFRS 9, IAS 39 and IFRS 7 ‚Interest Rate Benchmark Reform‛

• Amendments to IAS 1 and IAS 8 ‚Definition of Material‛

• Amendments to IFRS 16 ‚ Leases Regarding COVID-19-Related Rent Concessions‛

• (b) The impact of IFRS endorsed by the FSC but not yet effective

The Group assesses that the adoption of the amendments to IFRS effective from January 1, 2021 would not have any material impact on its consolidated financial statements.

• Amendments to IFRS 4 ‚Extension of the Temporary Exemption from Applying IFRS 9‛

• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 ‚Interest Rate Benchmark － ‛

• Reform Phase 2

(Continued)

128

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

New or Amended		Effective date per
Standards	Content of amendment	IASB
Amendments to IAS 1	The amendments aim to promote consistency	January 1, 2023
‚Classification of Liabilities as	in applying the requirements by helping
Current or Non-current‛	companies determine whether, in the
	statement of balance sheet, debt and other
	liabilities with an uncertain settlement date
	should be classified as current (due or
	potentially due to be settled within one year)
	or non-current.
	The amendments include clarifying the
	classification requirements for debt a
	company might settle by converting it into
	equity.
Amendments to IAS 37	The amendments clarify that the‘costs of	January 1, 2022
‚Onerous Contracts－Cost	fulfilling a contract’comprises both:
of Fulfilling a Contract‛	●the incremental costs – e.g. direct labor
	and materials; and
	●an allocation of other direct costs – e.g. an
	allocation of the depreciation charge for an
	item of property, plant and equipment used
	in fulfilling the contract.

The Group is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its consolidated financial position and consolidated financial performance. The results thereof will be disclosed when the Group completes its evaluation.

The Group expects no material impact of new and amended standards not yet endorsed by the FSC on the consolidated financial statements.

(4) Summary of significant accounting policies

The significant accounting policies applied in the preparation of these consolidated financial statements are set out as below. Except for changes in accounting policies indicated in note 3, the following accounting policies were adopted consistently throughout the presented periods in the consolidated financial statements.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as ‚the Regulations‛) and the IFRSs, IASs, IFRIC Interpretations, and the SIC Interpretations endorsed and issued into effect by the FSC.

(Continued)

129

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(b) Basis of preparation

• (i) Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position:

• 1) Financial instruments measured at fair value through profit or loss are measured at fair value;

• 2) Financial assets at fair value through other comprehensive income are measured at fair value;

• 3) The defined benefit assets are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in note 4(r).

• (ii) Functional and presentation currency

The functional currency of each individual consolidated entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollar (NTD), the Company’s functional currency. All financial information presented in NTD has been rounded to the nearest thousand.

• (c) Basis of consolidation

• (i) Principle for the preparation of the consolidated financial statements

The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its control over the entity.

The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions are eliminated in preparing the consolidated financial statements. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Subsidiaries’ financial statements are adjusted to align the accounting policies with those of the Group.

Changes in the Group’s ownership interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The difference between the adjustment of the non-controlling interests and the fair value of the consideration paid or received is recognized directly in equity and attributed to the shareholders of the Company.

(Continued)

130

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

When the Group loses control of its subsidiaries, the assets (including goodwill) and liabilities and any non-controlling interests of the former subsidiary at their carrying amounts at the date when control is lost will be derecognized and any investment retained in the former subsidiary at its fair value at the date when control is lost will be remeasured in the consolidated financial statement. The Group recognizes as gain or loss in profit or loss the difference between (i) the fair value of the consideration received as well as any investment retained in the former subsidiary at its fair value at the date when control is lost; and (ii) the assets (including any goodwill), liabilities of the subsidiary as well as any related non-controlling interests at their carrying amounts at the date when control is lost, as gain or loss in profit or loss. When the Group loses control of its subsidiary, it accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if it had directly disposed of the related assets or liabilities.

(ii) List of subsidiaries in the consolidated financial statements

The subsidiaries included in the consolidated financial statements were as follows:

Name of investor Name of subsidiary Principal activity	Shareholding December 31, 2020 December 31, 2019 Note	Shareholding December 31, 2020 December 31, 2019 Note
	December 31, 2020
The Company Everwin Investment Co., Ltd. Investments 〃 Long Bao Co., Ltd. Funeral Service 〃 Long Jee Holding(s) Pte Ltd. Property investment and development 〃 Rei Ju Construction Co., Ltd. Architecture and civil engineering 〃 Long Fu Real Estate Development Co., Ltd. Funeral Service 〃 Long De International Development Co., Ltd. Investments Everwin Investment Co, Ltd. Rei Ju Construction Co., Ltd. Architecture and civil engineering 〃 Long Hui Development Co., Ltd. Investments 〃 Bao Hui Development Co., Ltd. Exercise facility and amenity Long Fu Real Estate Development Co., Ltd. San Jhih Cih An Yuan Ltd. Funeral Service Long Hui Development Co., Ltd. North Bay Recreation Co., Ltd. Exercise facility and amenity Rei Ju Construction Co., Ltd. Rei Cheng Construction Co., Ltd. Architecture and civil engineering 〃 Xiamen Rei Ju Construction Engineer Co. Construction management consulting services 〃 ReiYu Green Energy Technology Co., Ltd. Architecture and civil engineering 〃 Ryan Development Corp. Property investment and development	100.00% 100.00% 96.89% 90.10% 100.00% 100.00% - % 100.00% 100.00% 100.00% 82.13% 100.00% 89.23% 100.00% 100.00%	100.00% 100.00% 96.89% 75.09% Note 1 and Note 6(f) 100.00% - % 15.01% Note 1 and Note 6(f) - % - % Note 2 - % - % Note 6(f) 100.00% 89.23% 100.00% 52.88%

(Continued)

131

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Name of investor Name of subsidiary Principal activity	Shareholding December 31, 2020 December 31, 2019 Note	Shareholding December 31, 2020 December 31, 2019 Note
	December 31, 2020
ReiYu Green Energy Technology Co., Ltd. Sheng Ji Interior Decoration Co., Ltd. Interior Decoration 〃 ReBio Green Innovation Co., Ltd. Environmental Engineering	100.00% 100.00%	100.00% 100.00%

Note 1: This transaction was a restructuring of the Group. Note 2: It was renamed Dong Hua International of Golf Recreation Co., Ltd. on February 25, 2021.

(iii) Subsidiaries excluded in the consolidated financial statements: None.

• (d) Foreign currency transactions and operations

• (i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of the Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Nonmonetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for the following, which are recognized in other comprehensive income:

• ‧ an investment in equity securities designated as at fair value through other comprehensive income.

• (ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the Group’s functional currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated to theGroup’s functional currency at the average exchange rate. Foreign currency differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, joint control, or significant influence is lost, the accumulated exchange differences related to that foreign operation is reclassified to profit or loss on disposal. When the Company disposes of any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

• (e) Classification of current and non-current assets and liabilities

The Group’s primary business activities are construction projects and the leasing of real estate, and the operating cycles are normally more than one year. Assets and liabilities associated with construction projects were classified as either current or non-current according to operating cycle spanning between three to five years, and the other assets and liabilities were classified as either current or non-current. Assets that met one of the following conditions were recognized as current assets while all other assets that were not current were recognized as non-current assets:

• (i) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is expected to be realized within twelve months after the reporting date; or

• (iv) The asset is cash and cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

• (i) It is expected to be settled in its normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is due to be settled within twelve months after the reporting date; or

• (iv) The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in it is settlement by the issue of equity instruments do not affect its classification.

• (f) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents comprise short-term highly liquid investments that are readily convertible into known amount of cash and are subject to an insignificant risk of changes in their fair value. Time deposits which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(g) Financial instruments

Accounts receivable and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is an accounts receivable without a significant financing component) or financial liability is initially measured at fair value, plus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue. An account receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at: amortized cost, fair value through other comprehensive income (FVOCI) – equity investment, or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

• 1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as measured at fair value through profit or loss:

• ‧ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset measured at amortized cost is initially recognized at amortized cost, plus/minus the cumulative amortization using the effective interest method, and the measurement of the amortized cost of any loss allowance is adjusted. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment losses are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Financial assets at fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• ‧ it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(Continued)

134

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

On initial recognition, the Group is able to make an irrevocable election to present subsequent changes in the fair value of investments in equity instruments that is not held for trading in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment loss are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income derived from equity investments is recognized on the date that the Group’s right to receive the dividends is established (usually the ex-dividend date).

• 3) Financial assets at fair value through profit or loss (‚FVTPL‛)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. These assets are subsequently measured at fair value.

These assets are subsequently measured at fair value. Net gains and losses, including any dividend and interest income, are recognized in profit or loss.

• 4) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivables, guarantee deposit paid and other financial assets), and contract assets.

The Group measures loss allowances at an amount equal to lifetime expected credit loss (‚ECL‛), except for the following which are measured as 12-month ECL:

• ‧ debt securities that are determined to have low credit risk at the reporting date; and

• ‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for accounts receivable and contract assets are always measured at an amount equal to lifetime ECL.

(Continued)

135

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’ s historical experience and informed credit assessment as well as forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Group considers a financial asset to be in default when the financial asset is more than 90 days past due or the debtor is unlikely to pay its credit obligations to the Group in full.

The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘ investment grade which is ’ ’ considered to be BBB- or higher per Standard & Poor s, Baa3 or higher per Moody s ’ or twA or higher per Taiwan Ratings .

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses over the expected life of financial assets. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost is credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

• ‧ significant financial difficulty of the borrower or issuer;

• ‧ a breach of contract such as a default or being more than 90 days past due;

• ‧ the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• ‧it is becoming probable that the borrower will enter bankruptcy or other financial

(Continued)

136

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

reorganization; or

(Continued)

137

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• ‧ the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

5)

Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expired, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

• (ii) Financial liabilities and equity instruments

• 1) Classification of debt or equity

Debt or equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual agreement.

2) Equity instrument

An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities. Equity instruments are recognized at the amount of consideration received less the direct issuing cost.

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• 4) Financial liabilities

Financial liabilities are classified as measured at amortized cost. Subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

• 5) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligation has been discharged, cancelled or expired. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

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

• 6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(h) Inventories

The original costs of inventories shall comprise all necessary expenditure incurred in bringing the inventories to their present condition and location and for sale or construction. Besides, the cost of real estate development includes construction cost, land cost, borrowing cost, and project expense. Upon completion, the construction in progress was transferred to buildings and land held for sale, and the operating costs were recognized according to the ratio of sales to construction and development cost. Columbarium under construction, including the cost of land and construction, was reclassified as operating costs for the current period upon completion in accordance with the dimensions of the columbarium niches of which the permanent right of use have been transferred to customers; the remaining columbarium niches were reclassified as columbarium niches for sale. Net realizable value is the balance that estimates the selling price, less, estimated costs of completion and the estimated costs of selling. The methods of determining the net realizable value are as follows:

• (i) Land held for development: the net realizable value is the replacement cost or estimated price (based on the market condition), less, the estimated selling expenses at the end of the period.

• (ii) Building construction and columbarium in progress: the net realizable value is the estimated price (based on the market condition), less, the estimated costs of completion and selling expenses at the end of the period.

• (iii) Real estate and columbarium held for sale: the net realizable value is the estimated price (based on the market condition), less, the estimated selling expenses at the end of the period.

(Continued)

139

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Investment in associates

Associates are those entities in which the Group has significant influence, but not control or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition, less, any accumulated impairment losses.

The consolidated financial reports include the Group’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Group from the date on which significant influence commences until the date on which significant influence ceases. When an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes of the Group’s shareholding percentage in the associate, the Group recognizes equity changes attributable to the Group by its shareholding percentage as capital surplus.

Gains and losses resulting from the transactions between the Group and an associate are recognized only to the extent of unrelated Group’s interests in the associate. When the Group’s share of losses of an associate equals or exceeds its interest in an associates, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group shall discontinue the use of the equity method from the date when its investment ceases to be an associate. The Group shall measure the retained interest at fair value. The difference between the fair value of retained interest and proceeds from disposal, and the carrying amount of the investment at the date the equity method was discontinued, is recognized in profit or loss. The Group accounts for all the amounts previously recognized in other comprehensive income in relation to that investment on the same basis as would have been required if the associates had directly disposed of the related assets or liabilities. If a gain or loss previously recognized in other comprehensive income would be reclassified to profit or loss (or retained earnings) on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification ’ adjustment) (or retained earnings) when the equity method is discontinued. If the Group s ownership interest in an associate is reduced while it continues to apply the equity method, the Group reclassifies the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest to profit or loss.

When the Group subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the net assets of the associate. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. Moreover, a difference shall be debited to retained earnings when the balance of capital surplus resulting from investments accounted for using equity method is not sufficient to be written off. If the Group’s ownership interest is reduced due to the additional subscription to the shares of the associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate will be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

(Continued)

140

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(j) Joint arrangements

Joint arrangement is the agreement of two or multiple parties with joint controls over a delegated entity. Joint arrangement includes joint operations and joint venture. Its traits are as follows: (a) All parties are bound by the arrangement; (b) Joint arrangement would suggest that at least two parties possess joint control over the arrangements. IFRS 11 ‚Joint Arrangements‛ defines joint control as the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities (i.e. activities that significantly affect the returns of the arrangement) require the unanimous consent of the parties sharing control.

A joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement. The Group accounts for the assets, liabilities, revenues and expenses in relation to its interest in a joint operation in accordance with the IFRSs applicable to the particular assets, liabilities, revenues and expenses. When assessing whether a joint arrangement is a joint operation or a joint venture, the Group considers the structure and legal form of the arrangement, the terms agreed by the parties in the contractual arrangement and, when relevant, other facts and circumstances.

(k) Investment property

Investment property is the property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business use in the production or supply of goods or services or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful lives, and residual value which are the same as those adopted for property, plant, and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

• (l) Property, plant and equipment

• (i) Recognition and measurement

Items of property, plant, and equipment are measured at cost, which includes capitalized borrowing cost, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent cost

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iii) Depreciation

Depreciation is calculated on the cost of assets less their residual values and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant, and equipment.

Land is not depreciated.

The estimated useful lives for the current and comparative years of significant items of property, plant, and equipment are as follows:

1)	Buildings	3～55 years
2)	Transportation equipment	5 years
3)	Office equipment	3 years
4)	Other equipment	1～8 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (m) Leases

• (i) Identifying a lease

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

• －

• 1) the contract involves the use of an identified asset this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and

• 2) the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

• 3) the customer has the right to direct the use of the asset throughout the period of use if either:

• the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or

• the relevant decisions about how and for what purpose the asset is used are predetermined and:

  • － the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or

  • － the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) As a leasee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• － fixed payments, including in-substance fixed payments;

• － variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• －

• amounts expected to be payable under a residual value guarantee; and

• － payments or penalties for purchase or termination options that are reasonably certain to be exercised.

The lease liability is subsequently measured at amortized cost using the effective interest method. It is remeasured when:

• －

• there is a change in future lease payments arising from the change in an index or rate; or

• － ’ there is a change in the Company s estimate of the amount expected to be payable under a residual value guarantee; or

• －

• there is a change in the assessment of whether it will have the option to exercise a purchase; or

• － there is a change in its assessment of whether it will exercise an extension or termination option; or

• －

• there is any lease modification in lease subject, scope of the lease, or other terms.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize the difference in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group placed right-of-use assets and lease liabilities under the line item in the balance sheet.

If an arrangement contains lease and non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of their relative standalone prices. However, for the leases of land and buildings in which it is a lessee, the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Group has elected not to recognize right-of-use assets and lease liabilities for leases that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

• (iii) As a leasor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

For operating lease, the Group recognizes rental income on a straight-line basis over the lease term.

(n) Intangible assets

• (i) Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses.

Other intangible assets, including computer software purchased by the Group, are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure was capitalized only when it would increase the future economic benefits embodied in the specific asset to which it related. All other expenditures, including expenditure on internally generated goodwill and brands, was recognized in profit or loss as incurred.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Amortization

Amortization was calculated over the cost of the asset, less its residual value, and was recognized in profit or loss on a straight line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they were available for use.

The estimated useful lives for the current and comparative years of significant items of intangible assets are as follows:

1) Computer software 1~5 years

Amortization methods, useful lives, and residual values are reviewed at each annual reporting date and adjusted if needed.

(o) Impairment of nonfinancial assets

At each reporting date, the Consolidated Company reviews the carrying amounts of its nonfinancial assets (other than inventories, contract assets, deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash generating units (‚CGUs‛). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an individual asset or a CGU is the higher of its value in use and its fair value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other nonfinancial assets, an impairment loss is reversed only to the extent that the asset’s carrying amount that would have been determined (net of depreciation or amortization), had no impairment loss been recognized for the assets in prior years.

(p) Provisions

A provision is recognized if, as a result of a past event, the Group has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as interest expense.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(i) Warranties

A provision for warranties is recognized when the underlying products or services are sold. The provision is weighting factors based on historical experience of warranty claims rate and other possible outcomes against their associated probabilities.

(ii) Onerous contracts

A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognizes any impairment loss on the assets associated with that contract.

(q) Revenue recognition

(i) Revenue from contracts with customers

Revenue is measured based on the consideration that the Company expects to be entitled in the transfer of goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The following is a description of the Group’s major revenues:

1) Construction contracts

The Group enters into contracts to build residential properties, commercial buildings and public constructions. Because its customer controls the asset as it is constructed, the Group recognizes revenue over time on the basis of the construction costs incurred to date as a proportion of the total estimated costs of the contract. The consideration promised in the contract includes fixed and variable amounts. The customer pays the fixed amount based on a payment schedule. For some variable considerations (for e.g. a penalty payment calculated based on delay days and price adjustment subsidy) are estimated using the expected value method with reference to historical experience. Other variable considerations are estimated using the most likely amount. The Group recognizes revenue only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. If the Group has recognized revenue, but not issued a bill, then the entitlement to consideration is recognized as a contract asset. The contract asset is transferred to receivables when the entitlement to payment becomes unconditional public constructions.

If the Group cannot reasonably measure its progress towards complete satisfaction of the performance obligation of a construction contract, the Group shall recognize revenue only to the extent of the costs expected to be recovered.

A provision for onerous contracts is recognized when the Group expects the unavoidable costs of performing the obligations under a construction contract exceed the economic benefits expected to be received under the contract.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management.

2) Land development and sale of real estate

The Group develops and sells residential properties and usually sales properties in advance during construction or before construction begins. Revenue is recognized when control over the properties has been transferred to the customer. The properties have generally no alternative use for the Group due to contractual restrictions. However, an enforceable right to payment does not arise until legal title of a property has passed to the customer. Therefore, revenue is recognized at a point in time when the legal title has passed to the customer.

The revenue is measured at the transaction price agreed under the contract. For sale of readily available house, in most cases, the consideration is due when legal title of a property has been transferred. While deferred payment terms may be agreed in rare circumstances, the deferral never exceeds twelve months. The transaction price is therefore not adjusted for the effects of a significant financing component. For pre-selling properties, the consideration is usually received by installment during the period from contract inception until the transfer of properties to the customer. If the contract includes a significant financing component, the transaction price will be adjusted for the effects of the time value of money during the period, using the specific borrowing rate of the construction project. Receipt of a prepayment from a customer is recognized as contract liability. Interest expense and contract liability are recognized when adjusting the effects of the time value of money. Accumulated amount of contract liability is recognized as revenue when control over the property has been transferred to the customer.

Certain contracts include multiple deliverables, such as sale of residential properties and a decoration service. The Group accounts for the decoration service as a single performance obligation, and the transaction price is allocated to the decoration service on a relative standalone selling price basis. If a standalone selling price is not directly observable, it is estimated based on expected cost plus margin. Decoration services revenue are recognized upon the completion of service.

3)

Construction and sale of columbarium niches and tablets

The Group invests in the construction and sale of columbarium niches and memorial tablets. The Group recognizes revenues when control of the product is transferred. Owing to contractual restriction, normally the products have no alternative use for the Group. Therefore, subsequent to the completion of the project, the Group would recognize revenue upon the transfer of the permanent use right to the customer.

In respect of performance obligations for columbarium niche management, management revenue is classified as consideration of the maintenance of the columbarium niche specified in the contract, which conforms to contract specification to satisfy performance obligation over time. Therefore, the Group recognizes revenue when the performance obligations are gradually fulfilled over time.

(Continued)

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Notes to the Consolidated Financial Statements

• 4) Funeral services

Funeral services revenues are recognized upon the completion of services.

• 5) Recreation services

The Group provides sports facilities, catering services, and other related management services. Revenue from sports facility services was recognized upon the completion of services enterprise; catering service revenue was recognized when the merchandise was delivered to the customer.

• －

• 6) Financing components advance real estate receipts

The revenue is measured at the transaction price agreed under the contract. For sale of readily available house, in most cases, the consideration is due when legal title of a property has been transferred. While deferred payment terms may be agreed in rare circumstances, the deferral never exceeds twelve months. For pre-selling properties, the consideration is usually received by installment during the period from contract inception until the transfer of properties to the client; the Group assesses, on a separate contract basis, as to whether the consideration in the contract differs from the current selling price and whether the aforementioned consideration received in advance involves financing factors. The Group requires advance receipt of consideration mainly as a protective measure to mitigate losses on re-sale price and the coverage therefor resulted from the default of clients. Therefore, consideration of this sort is not classified as a significant financing component of material financing from clients. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

(ii) Contract costs

• 1) Incremental costs of obtaining a contract

The Group recognizes as an asset the incremental costs of obtaining a contract with a customer if the Group expects to recover those costs. The incremental costs of obtaining a contract are those costs that the Group incurs to obtain a contract with a customer that it would not have incurred if the contract had not been obtained. Costs to obtain a contract that would have been incurred regardless of whether the contract was obtained shall be recognized as an expense when incurred, unless those costs are explicitly chargeable to the customer regardless of whether the contract is obtained.

The Group recognizes the expected recoverable incremental costs incurred in the sales of customer contracts as assets, and amortizes them on a systematic basis consistent with the transfer of presale houses to customers.

• (r) Employee benefits

• (i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(s) Income taxes

Income taxes include both current taxes and deferred taxes. Except for expenses related to business combinations, or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are measured using tax rates enacted or substantively enacted at the reporting date.

Deferred income taxes are recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred taxes are not recognized for the following exceptions:

• (i) Assets and liabilities that are initially recognized but are not related to the business

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

combination and have no effect on net income or taxable gains (losses) during the transaction.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• (iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted on the reporting date.

Deferred tax assets and liabilities may be offset against each other if the following criteria are met:

• (i) the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and

• (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

• 2) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for unused tax losses, tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

• (t)

Business combination

The Group accounts for business combinations using the acquisition method. The goodwill arising from an acquisition is measured as the excess of (i) the consideration transferred (which is generally measured at fair value) and (ii) the amount of non-controlling interest in the acquiree, both over the identifiable net assets acquired at the acquisition date. If the amount calculated above is a deficit balance, the Group recognized that amount as a gain on a bargain purchase in profit or loss immediately after reassessing whether it has correctly identified all of the assets acquired and all of the liabilities assumed.

All transaction costs relating to a business combination are recognized immediately as expenses when incurred, except for the issuance of debt or equity instruments.

The Group shall measure any non-controlling interests in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets, if the non-controlling interests are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation. Other non-controlling interests are evaluated by their fair value or by another basis permitted by the IFRSs endorsed by the FSC.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, provisional amounts for the items for which the accounting is incomplete are reported in the Group’s financial statements. During the measurement period, the provisional amounts recognized are retrospectively adjusted at the acquisition date, or additional assets or liabilities are recognized to reflect new information obtained about facts and circumstances that existed as of the acquisition date. The measurement period shall not exceed one year from the acquisition date.

(u) Earnings per share

The Group discloses the Group’s basic and diluted earnings per share attributable to ordinary equity holders. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholder of the Company divided by weighted average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of the Company divided by weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares. The Group’s dilutive potential ordinary shares comprise employee stock options.

(v) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). The operating results of all operating segments are regularly reviewed by The Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. Each operating segment has its financial information.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Management continues to monitor the accounting estimates and assumptions. Any changes in accounting estimates are recognized during the period and the impact of those changes in accounting estimates are recognized in the following period.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

• (a) Judgment of whether the Group has substantive control over its investees

As the single largest shareholder of Taisun Enterprise Co., LTD. (hereinafter referred to as ‚Taisun‛), the Group held 30.9% of its outstanding voting shares, but the Group did not obtain more than half of the voting rights. Although the remaining 69.1% shares of Taisun Company were ’ not concentrated within certain shareholders, yet the Group needed to obtain a seat in Taisun s Board of Directors in the next re-election. Therefore, it was determined that the Group had no significant impact on Taisun and the investment in it was recognized as financial assets at fair value through profit or loss.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows. Those assumptions and estimation have been updated to reflect the impact of COVID-19 pandemic:

(a) The loss allowance of account receivables and contract assets

The Group has estimated the loss allowance of account receivables and contract assets that is based on the risk of a default occurring and the rate of expected credit loss. The Group has considered historical experience, expert opinion and forward-looking information at the reporting date to determine the assumptions to be used in calculating the impairments and the selected inputs. The relevant assumptions and input values, please refer to note 6(d) and (t).

(b) Recognition of profit or loss on project contracts

The major business activities involve construction contracts entered into with clients to provide design as well as technique, and additional works intertwined or interdependent regarding functions or ultimate purposes. When determining the transaction price, the amount of consideration, which may change due to discounts, rebates, penalties, or other similar items. Construction contracts are based on the degree of completion of the contract to recognize contract revenue over time, and the degree of completion is measured by the ratio of the contract cost incurred so far to the estimated total contract cost. The Group considers the nature of each project, estimated construction period, project, construction process, construction method, and estimated contract amount to estimate the change consideration and total contract cost. Changes in these estimates might affect the calculation of the percentage of completion and related profits from construction contracts.

• (c) Fair value of net assets of subsidiaries acquired

The fair value of intangible assets (including goodwill) acquired by the Group upon the acquisition of a subsidiary is measured based on the purchase price allocation report provided by the independent valuation expert appointed by the Group. In the course of measurement, primary parameters for evaluating the fair value of intangible assets, including discount rate, weighted-average capital cost, and internal rate of return, are susceptible to uncertain factors such as horizontal competition and economic environment. Note 6(f) details the risk that the value of intangible assets may be overestimated.

Valuation process

The accounting policy and disclosure of the Group include that measuring the financial and nonfinancial assets and financial liabilities at fair value. The Group establishes the relevant internal control system for the fair value measure. Including the establishment of an evaluation team to be responsible for reviewing all significant fair value measurements (including the third level of fair value) and reporting directly to the Chief Financial Officer. The valuation team periodically reviews significant unobservable inputs and adjustments. If the input value used to measure the fair value is used from external third party information (such as broker or pricing service), the evaluation team will evaluate the evidence provided by the third party to support the input value to determine the rating and its fair value class is in compliance with the International Financial Reporting Standards. The evaluation team also reports on major issues to the audit committee of the Group. The investment property is appraised regularly either by the Group’s property development segment according to the valuation method and the parametric assumptions announced by FSC or by an external appraiser.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group strives to use market observable inputs when measuring assets and liabilities. Fair values are based on the degree to which the fair value can be observed and are grouped into Level 1 to Level 3 as follows:

Level 1: Public offer (unadjusted) of the same asset or liability in the active market.

• Level 2: In addition to the public quotation at the first level, the input parameters of the asset or liability are observed directly (i.e., price) or indirectly (i.e. derived from the price).

• Level 3: Input parameters for assets or liabilities are not based on observable market data (non-observable parameters).

For assumptions used in measuring fair value

For any transfer within the fair value hierarchy, the impact of the transfer is recognized on the reporting date.

Further information on the assumptions used in measuring the fair value

Further information about the assumptions made in measuring fair values is included in the following notes:

(a) Note 6(t) Financial instrument

(6) Explanation of significant accounts

• (a) Cash and cash equivalents

Cash Checking account deposits Demand deposits Time deposits Cash and cash equivalents in the consolidated statement of cash flows	December 31, 2020 $ 7,910 812 1,890,733 12,090	December 31, 2019 5,521 115 3,539,022 29,990
	$ 1,911,545	3,574,648

Please refer Note 6(t) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Group.

• (b) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss: Non-derivative financial assets Domestic listed stocks Beneficiary certificate Corporate bonds Total	December 31, 2020 $ 5,182,150 11,725 1,919	December 31, 2019 3,737,094 9,540 15,808
	$ 5,195,794	3,762,442

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (i) As of December 31, 2020 and 2019, the securities prices payable by the Group due to the purchase of equity securities amounted to zero and $9,539 thousand, respectively.

• (ii) As of December 31, 2020 and 2019, the financial assets at fair value through profit and loss of the Group pledged as collateral, please refer to Note 8.

• (c) Financial assets at fair value through other comprehensive income

Non-current equity investments at fair value through other comprehensive income Domestic listed stocks －Taiwan Semiconductor Manufacturing Co., Ltd. Domestic listed stocks in emerging market －Grand Green Energy Co., Ltd. Domestic unlisted stocks －The Reputation International Construction Co., Ltd. －M Radio Broadcasting Co., Ltd. －Widedoctor (International) Enterprise Co., Ltd. －Chia Ya Investment Co., Ltd. －New Image Medical Co., Ltd. －Chang Hong Energy Technology Co., Ltd. －J&V Energy Technology Co., Ltd. －J-Metrics Technology Co., Ltd. －Linkou Recreation Co., Ltd. －Horseshoe International Enterprise Co., Ltd. Total	December 31, 2020 $ 22,790 17,850 181,689 4,191 4,255 87,596 24,704 26,556 - 20,170 14,425 75,468	December 31, 2019 3,310 28,800 150,463 7,302 5,127 72,990 21,809 36,930 63,122 40,084 15,621 -
	$ 479,694	445,558

• (i) The Group holds these equity instruments as long term strategic instrument instead of trading purpose, and are accounted for under fair value through other comprehensive income.

• (ii) During the years ended December 31, 2020 and 2019, the dividends related to equity investments at fair value through other comprehensive income held on the years then ended, were recognized, please refer to Note 6(s).

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (iii) Due to operational considerations, the Group sold the equity instrument investments listed above that were designated as fair value through other comprehensive gains and losses during 2020 and 2019. The sales situation is as follows:

Stock name	Date of sale	Fair value	Cumulative disposal gains and losses (15,000)
For the Years Ended December 31,2020 J&V ENERGY TECHNOLOGY CO., LTD. For the Years Ended December 31,2019 CTBC Financial Holding Co., Ltd. COTA Commercial Bank, Ltd.	June 30, 2020 January 2,~January 30, 2019 July 19, 2019 and October 8, 2019	$ 85,000 $ 1,453,148 79,306 $ 1,532,454
			233,662 8,686
			242,348

The Group has transferred cumulative disposal gains from other equity interest to retained earnings.

(iv) Please refer to Note 6(t) for credit risk and market risk.

(d) Notes and accounts receivable

Note receivables from operating activities Accounts receivables－measured as amortized cost Receivables due from related parties Less: Loss allowance Total	December 31, 2020 $ 313,159 425,076 - (26)	December 31, 2019 343,556 898,586 2,925 (26)
	$ 738,209	1,245,041

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information.

The Group’s notes and accounts receivable arose from mediation and litigation the construction segment entered into are detailed as follows:

The amount of mediation or litigation Less: Expected loss (Note) Total	December 31, 2020 $ 73,434 (28,054)	December 31, 2019 157,163 (43,654)
	$ 45,380	113,509

Note: Losses that may occur were assessed based on mediation or litigation in each case, deemed as changes in the estimated contract price, and recognized as a deduction from operating revenue. Please refer to Note 9 for details.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The loss allowance provisions of other receivables were determined as follows:

Current Less than 60 days past due 60 to 180 days past due 180 to 360 days past due Over 360 days past due Current Less than 60 days past due 60 to 180 days past due 180 to 360 days past due Over 360 days past due	December 31, 2020	December 31, 2020	December 31, 2020	Loss allowance Provision - - 3 23 -
	Carrying amount of notes and accounts receivable 676,657 15,563 91 544 -	Weighted-aver age loss rate
	$ 692,855			26
				Loss allowance Provision - 1 - 25 -
	Carrying amount of notes and accounts receivable 1,131,230 11 - 317 -	Weighted-aver age loss rate
		0% 4% 6% 8% 100%
	$ 1,131,558			26

The movements in the allowance for notes and account receivables for 2020 and 2019 were as follows:

Beginning balance Effect of consolidation Reversal of impairment loss Ending balance	For the Years Ended December 31 2020 2019 $ 26 - - 11,544 - (11,518)
	$ 26 26

As of December 31, 2020 and 2019, the Group didn’t provide any receivables as collateral for its borrowings.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(e) Inventories

Land held for construction site Building and columbarium construction in progress Buildings and land held for sale Cemetery plots and columbarium niches for sale Prepayment for land and buildings Less: Allowance for obsolete inventory	December 31, 2020 $ 1,470,011 1,476,307 15,727 694,620 244,248 (4,151) $ 3,896,762	December 31, 2019 1,726,070 1,009,132 15,727 138,682 221,905 (4,151) 3,107,365

• (i) The movement in the allowance for inventory for 2020 and 2019 were as follows:

Balance on December 31 (Equivalent to balance on January 1)	2020 $ 4,151	2019 4,151

• (ii) In April and July 2020, the Group acquired shares of San Jhih Tzu An Yuan Ltd., as well as 103 pieces of burial land located at Xinzhuangzi and Guizishan, Sanzhi Dist., New Taipei City and 2 buildings thereon, with an additional clause to agreement that the Group shall fulfill its obligation to manage the 91 pieces of burial land without superficies. The contract consideration amounted to $525,771 thousand (including directly attributable costs), and the acquisition price of aforementioned assets and liabilities were determined as follows:

Long-term equity investment Cemetery plots and columbarium niches held for sale Property, plant and equipment —land Property, plant and equipment —building Provisions (incloud current and non-current portion)	$ 19 443,643 198,888 5,039 (121,818)
	$ 525,771

(iii) The subsidiary possessed the land located at Xinweiling, Nantou city, in its individual name, and the land has been mortgaged to the subsidiary.

(iv) Details on inventory the Group had been pledged as collateral as of December 31, 2020 and 2019, please refer to Note 8.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (f) Business combination

• (i) Acquisition of subsidiary - Rei Ju Construction Co., Ltd.

On March 4, 2019, the Group obtained control over Rei Ju Construction Co., Ltd. through acquiring 11.43% of its shares, increasing the equity interest in it from 48.81% to 60.24%. Rei Ju Construction Co., Ltd. is a grade-A construction company specialized in architecture and civil engineering.

• 1) The following table summarizes the recognized amounts of assets acquired, liabilities assumed, and goodwill recognized on the acquisition date:

Cash $ 141,841

• 2) Identifiable assets acquired and liabilities assumed

The following table summarized the carrying value of identifiable assets acquired and liabilities assumed recognized on the acquisition date:

liabilities assumed recognized on the acquisition date:
Cash and cash equivalents	$	741,932
Current financial assets at fair value through profit or loss		4,474
Notes receivable		240,444
Accounts receivable		671,374
Contract assets		1,926,139
Inventories		528,950
Other receivables		47,807
Current tax assets		1,477
Other current assets		171,223
Other current financial assets		604,734
Non-current financial assets at FVOCI		805,973
Investments accounted for using equity method		2,925
Property, plan and equipment		174,817
Investment property		225,170
Right-of-use assets		20,390
Intangible assets		20,264
Deferred tax assets		91,550
Net defined benefit assets－non-current		11,007
Other non-current financial assets		2,646
Short-term borrowings		(699,960)
Short-term notes and bills payable		(50,000)
Notes payable		(876,890)
Accounts payable		(1,539,887)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Contract liabilities Other payables Current tax liabilities Lease liabilities Other current liabilities Long-term borrowings Guarantee deposits received Non-controlling interests Fair value of net identifiable assets and liabilities	(1,185,896) (133,553) (5,406) (20,416) (72,802) (450,070) (190) (122,360)
	$ 1,135,866

3) Goodwill

Goodwill arising from the acquisition has been recognized as follows:

Consideration transferred Add:Fair value of the equity interest held prior to the acquisition Less:Fair value of identifiable net assets (measured at percentage of ownership) Goodwill	$ 141,841 605,452 684,266 $ 63,027

The Group already held 48.81% of shares of Rei Ju Construction Co., Ltd. before the acquisition date, and $63,506 thousand was recognized as the gain on the equity interest at fair value. (The debit balance of equity relating to the investment under the line item of shareholder’s equity, amounting to $1,019 thousand, has been deducted. The benefit was recognized as ‚gain on disposal of investments" in the consolidated statement of comprehensive income statement; other comprehensive income of $4,473 thousand relating to Rei Ju Construction Co., Ltd. recognized before the disposal was reclassified to retained earnings.)

Goodwill arises mainly from the profitability and the value of workforce of Rei Ju Construction Co., Ltd., and the combination is expected to result in synergies through vertical integration between it and the Group.

• (ii) Acquisition of subsidiary - North Bay Recreation Co., Ltd.

On July 22, 2020, the Group obtained control over the company after acquiring 67% of the shareholdings in North Bay Recreation Co., Ltd., a company that provides sports facility.

From the acquisition date to December 31, 2020, North Bay Recreation Co., Ltd. contributed revenue of $39,394 thousand and profit after tax of $(14,934) thousand to the Group. If the ’ acquisition had occurred on January 1, 2020, management estimated that the Group s revenue would have reached $10,816,032 thousand and consolidated profit after income tax would have reached $1,113,376 thousand. In determining these amounts, management has assumed that the fair value adjustments that arose on the date of acquisition would have been the same if the acquisition had occurred on January 1, 2020.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The major categories of considerations transferred, assets acquired, and liabilities assumed on the acquisition date were as follows:

• 1) The following table summarizes the acquisition date fair value of major class of consideration transferred:

Cash $ 315,206

• 2) Identifiable assets acquired and liabilities assumed

The following table summarizes the carrying amount of identifiable assets acquired and liabilities assumed recognized on the acquisition date:

Cash and cash equivalents Accounts receivable Other current assets Non-current financial assets at amortized cost Property, plan and equipment Investment property Deferred tax assets Other non-current financial assets Other non-current assets Short-term notes and bills payable Contract liabilities Notes payable Accounts payable Other payables Other current liabilities Long-term borrowings Deferred tax liabilities Guarantee deposits received Fair value of net identifiable assets and liabilities Goodwill Goodwill arising from the acquisition has been recognized as follows: Consideration transferred Less: Fair value of identifiable assets (measured at percentage of ownership) Goodwill	$ 11,290 1,425 953 484 3,245,320 176,624 1,301 2,611 27,533 (409,800) (7,024) (3,300) (231) (6,641) (25,123) (3,653) (559,137) (1,988,074)
	$ 464,558
	$ 315,206 311,253 $ 3,953

• 3) Goodwill

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

On August 24 and November 30, 2020, the Group acquired 2,158 thousand shares to non-related parties for capital increase by cash of $55,392 thousand, and 7,392 thousand shares for capital increase by cash of $73,913 thousand, increasing the cumulative shareholdings of the Group to 82.13%. As a result of changes in percentage of ownership, the capital surplus balance of $16,957 thousand was recognized.

The purchase price allocation report on the subsidiary acquired was based on the valuation by an independent evaluator who has certified professional qualification and related valuation experience in the subject being evaluated.

(g) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group for 2020 and 2019, were as follows:

Cost or deemed cost: Balance on January 1, 2020 Additions Acquisition through business combination Transfer from prepayment Transfer from investment property Disposal Impairment Effect of movements in exchange rates Balance on December 31, 2020 Balance on January 1, 2019 Acquisition through business combination Additions Disposal Effect of movements in exchange rates Balance on December 31, 2019 Depreciation and impairments loss: Balance on January 1, 2020 Depreciation for the year Acquisition through business combination Transfer from investment property Disposal Effect of movements in exchange rates	Land	**Buildings **	Transportatio n equipment 3,123 - 900 - - (135) - -	Office equipment 24,265 1,432 14,612 - - (262) - 58	Golf course and equipment - 550 49,339 - - (8,589) - -	Other equipment 51,029 5,852 - - - (1,819) - -	Construction inprogress Total - 279,195 - 1,683,117 7,312 4,004,695 - 328,479 - 42,025 - (11,978) (7,312) (7,312) - 58
	$ 119,959 80,819 1,624,026 51,257 3,198,039 734,493 328,479 - 18,879 23,146 (545) (628) - - - -
	$ 5,288,837 889,087		3,888	40,105	41,300	55,062	- 6,318,279
	$ 10,892 15,983 109,067 55,114 - 9,722 - - - -		- 3,150 473 (500) -	- 22,683 1,800 - (218)	- - - - -	18,589 25,456 6,984 - -	- 45,464 - 215,470 - 18,979 - (500) - (218)
	$ 119,959 80,819		3,123	24,265	-	51,029	- 279,195
	$ - 17,935 - 8,563 - 705,881 - 12,110 - (264) - -		2,385 277 566 - (113) -	18,395 1,820 11,836 - (218) 51	- 869 41,092 - (7,142) -	35,631 3,681 - - (1,819) -	- 74,346 - 15,210 - 759,375 - 12,110 - (9,556) - 51

(Continued)

162

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Balance on December 31, 2020

$ - 744,225 3,115 31,884 34,819 37,493 -

851,536

(Continued)

163

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Balance on January 1, 2019 Acquisition through business combination Depreciation for the year Disposal Effect of movements in exchange rates Balance on December 31, 2019 Book value: Balance on December 31, 2020 Balance on January 1, 2019 Balance on December 31, 2019	Land	**Buildings **	Transportatio n equipment - 2,609 276 (500) -	Office equipment - 16,291 2,285 - (181)	Golf course and equipment - - - - -	Other equipment 9,250 15,044 11,337 - -	Construction inprogress Total - 16,488 - 40,653 - 17,886 - (500) - (181)
	$ - - - - -	7,238 6,709 3,988 - -
	$ -	17,935	2,385	18,395	-	35,631	- 74,346
	$ 5,288,837 144,862		773	8,221	6,481	17,569	- 5,466,743
	$ 10,892 8,745		-	-	-	9,339	- 28,976
	$ 119,959 62,884		738	5,870	-	15,398	- 204,849

• (i) The subsidiary possesses in its individual name the land located at Xiajiao, Shihmen District, New Taipei City, for which asset preservation measures have been taken.

• (ii) For details on property, plant and equipment, the Group have pledged as collateral as of December 31, 2020 and 2019, please refer to Note 8.

(h) Investment Property

Investment property comprises proprietary assets of the Group. The original non-cancellable periods of the leased investment property ranges from one to three years, and some leases include an option to renew the lease for an additional period of the same duration at the end of the contract term.

The rental income of all leased investment properties is in fixed amounts.

The movements in investment property of the Group for 2020 and 2019 were as follows:

Cost or deem cost: Balance on January 1, 2020 Additions Acquisition through business combination Disposal Transferred to property, plant and equipment Balance on December 31, 2020 Balance on January 1, 2019 Acquisition through business combination Additions Balance on December 31, 2019	Land and improvements $ 548,002 247,485 176,624 (71,313) (18,879)	Buildings 445,933 48,582 - (32,936) (23,146)	Total 993,935 296,067 176,624 (104,249) (42,025) 1,320,352 719,582 225,933 48,420 993,935
	$ 881,919	438,433
	$ 348,399 161,681 37,922	371,183 64,252 10,498
	$ 548,002	445,933

(Continued)

164

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Depreciation and impairment losses: Balance on January 1, 2020 Depreciation for the year Disposals Transferred to property, plant and equipment Balance on December 31, 2020 Balance on January 1, 2019 Depreciation for the year Acquisition through business combination Balance on December 31, 2019 Book value: Balance on December 31, 2020 Balance on December 31, 2019 Balance on January 1, 2019 Fair value: Balance on December 31, 2020 Balance on December 31, 2019	Land and improvements $ 85,491 - - -	Buildings 189,780 8,912 (1,487) (12,110)	Buildings 189,780 8,912 (1,487) (12,110)	Total 275,271 8,912 (1,487) (12,110)
	$ 85,491	185,095		270,586
	$ 85,491 - -	183,513 5,504 763		269,004 5,504 763
	$ 85,491	189,780		275,271
	$ 796,428	253,338		1,049,766
	$ 462,511	256,153		718,664
	$ 262,908	187,670		450,578
			$ 1,315,575 $ 1,037,353

• (i) Investment property comprises a number of commercial properties that are leased to third parties. Each of the leases contains an initial non-cancellable period that runs from 1 to 5 years. Subsequent renewals are negotiated with the lessee and no contingent rents are charged.

• (ii) Fair value of investment properties was determined based on the market price of a similar item in the vicinity as well as the valuation of an independent appraiser (who had a recognized and relevant professional qualification, and recent experience in valuating similar items to the investment property being valued in location and type). The inputs used in the fair value valuation technique were market values classified as Level 3.

• (iii) As of December 31, 2020 and 2019, a portion of the Group’s investment property was pledged as collateral for bank loans; please refer to Note 8.

• (i) Short-term borrowings

The details of short-term borrowings were as follows:

Unsecured bank loans Secured bank loans Total Unused credit lines Range of interest rates	December 31, 2020 $ 431,501 3,446,681	December 31, 2020 $ 431,501 3,446,681	December 31, 2019 181,410 1,419,000
	$ 3,878,182		1,600,410
	$ 2,185,825		1,674,865
		1.31%~2.5%	1.56%~2.19%

For the collateral for bank loans, please refer to Note 8.

(Continued)

165

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(j) Short-term notes and bills payable

The details of the Group’s short-term notes and bills payable were as follows:

December 31, 2020 Guarantee or acceptance institution Range of interest rates Commercial paper payable Union Bank of Taiwan 0.71%~1.32% Mega bills 1.2% Less: Discount on short-term notes and bills payable Total	December 31, 2020	Amount $ 200,000 382,000
	Guarantee or acceptance institution Range of interest rates
		582,000 (1,026)
		$ 580,974

The Group has pledged its assets as collateral for short-term notes and bills payable, please refer to Note 8 for details.

(k) Long-term borrowings

The Group’s long-term borrowings details, conditions, and provisions were as follows:

December 31, 2020 Currency Range of interest rates Maturity date Secured loans TWD 1.91%~2.75% From August 2022 to November 2024 Less: Issuance cost on syndicated loan Less: current portion Total Unused credit lines December 31, 2019 Currency Range of interest rates Maturity date Secured loans TWD 2.18%~2.28% July 2023 Less: Issuance cost on syndicated loan Less: current portion Total Unused credit lines	December 31, 2020	Amount $ 337,719 (6,300) (50,109) $ 281,310 $ 735,000 Amount $ 398,590 (8,820) (64,030) $ 325,740 $ 719,930
	Currency Range of interest rates Maturity date

(i) Collateral for bank Loans

For the collateral for long-term borrowings, please refer to Note 8.

(Continued)

166

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (ii) On June 27, 2018, the subsidiary entered into a syndicated loan agreement amounting to $2,100,000 thousand with Yuanta Bank and six other banks, and the term of loan was five years. Land and buildings of the subsidiary were as collateral for the aforementioned joint loan. Pursuant to the covenant of the loan agreement, on May 18, 2020, the subsidiary transferred 24,000 thousand ordinary shares of Long Bon International Co., Ltd. into its securities depository account as well as signed and submitted to the financial institution the application form for book-entry securities’, a pledge, and document pertaining to the exercise of pledge. Besides, a deposit of $60,000 thousand, which could not be counted in the minimum balance, was required for the reserve account specified in the loan agreement. The agreed financial ratios of subsidiaries set out in the syndicated loan agreement were as follows:

  • 1) Current ratio (Current assets/Current liabilities): Not less than 100%.

  • 2) Debt ratio of financial institution (total borrowings of financial institution/tangible net worth): Shall not exceed 150%.

  • 3) Interest coverage ratio【(Profit before tax + interest expenses + amortization and depreciation)/ interest expenses】: Not lower than four times.

  • －

  • 4) Tangible net assets value (shareholders' equity intangible assets): shall not be less than NT$800 million.

• (l) Bonds payable

• (i) The details of secured bonds issued by the Group were as follows:

Secured corporate bonds Unamortized discounted corporate bonds payable Corporate bonds issued balance at year end	December 31, 2020 $ 2,500,000 (30,270)	December 31, 2019 2,500,000 (33,865)
	$ 2,469,730	2,466,135

• (ii) As of December 31, 2020, the key terms and conditions of the outstanding bonds issued by the Group were as follows:

Item Total Amount Issue date Coupon rate Duration LC Bank Entrusted Bank Redemption at Maturity	1st secured bonds issued in 2017 $2,500,000 thousand September 12, 2017 1.02% September 12, 2017 ~ September 12, 2022 Taiwan Cooperative Bank, Ltd. Jih Sun International Bank, Ltd. The Company can repay the principal once the Company’s bonds expire five years from the issuance date.

• (iii) For the collateral for bonds payable, please refer to Note 8.

(Continued)

167

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Operating lease

The Group leases out its investment property. The Group has classified these leases as operating leases, because it does not transfer substantially all of the risks and rewards incidental to the ownership of the underlying assets. Please refer to note 6(h) ‚Investment property‛ for details.

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date was as follows:

Less than one year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over five years	December 31, 2020 $ 16,310 13,146 11,237 9,915 7,176 10,547	December 31, 2019 10,215 7,821 4,902 3,840 3,840 10,240 40,858
	$ 68,331

The rental income and related operating costs arised from investment property in 2020 and 2019 were as follows:

Rental income Related operating costs	For the Years Ended December 31 2020 2019 $ 22,808 16,324 $ 20,300 18,494
	2020 $ 22,808
	$ 20,300

(n) Income tax

• (i) Income tax expense

The amounts of income tax expense for 2020 and 2019 were as follows:

Current income tax expense Land value increment tax Undistributed earnings additional tax Adjustment for prior years Deferred tax expense Origination and reversal of temporary differences Income tax expense	For the Years Ended December 31 2020 2019 $ 142,549 300,964 606 - 50,948 11,767 (25,927) (8,184) 168,176 304,547 (64,993) (79,989) $ 103,183 224,558	For the Years Ended December 31 2020 2019 $ 142,549 300,964 606 - 50,948 11,767 (25,927) (8,184) 168,176 304,547 (64,993) (79,989) $ 103,183 224,558
		304,547
		(79,989)
		224,558

(Continued)

168

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The amounts of income tax gains (expense) recognized in other comprehensive income for 2020 and 2019 were as follows:

2020 and 2019 were as follows:
		**For the Years Ended December 31 **
		2020	2019
Items that may be reclassified subsequently to profit or	loss:
Exchange differences on translation of foreign financial		$ (27)	(5,760)
statements
Reconciliation of income tax and profit before tax for 2020 and 2019 were as follows:
	**For the Years Ended December 31 **
		2020	2019
Profit before income tax	$	1,231,520	1,111,751
Income tax using the Company’s domestic tax rate	$	336,421	255,810
Effect of investment gain recognized using equity		(94,140)	(30,299)
method
Valuation loss on financial assets		(26,555)	-
Suspended levy of securities transaction income tax		(122,515)	29,163
Non-deductible expenses		6,672	1,877
Non-taxable income from land transactions		(1,569)	-
Dividend income		(26,694)	(34,216)
Land value increment tax		606	-
Undistributed earnings additional tax		50,948	11,767
Taxable income from disposal of overseas securities		-	10,695
Basic income tax		-	1,013
Changes in unrecognized temporary differences		(917)	(3,307)
Movements in tax losses on unrecognized deferred tax		8,810	(1,805)
assets
Adjustment for prior years		(25,927)	(8,184)
Recognize unrecognized tax losses in the previous		-	(5,556)
period
Others		(1,957)	(2,400)
Income tax expense	$	103,183	224,558

(Continued)

169

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (ii) Deferred tax assets and liabilities

• 1) Unrecognized deferred tax liabilities

The Group’s unrecognized deferred tax liabilities are detailed as follows:

Unrecognizeddeferred tax liabilities —book-tax difference of management fee income	December 31, 2020		December 31, 2019
	$ 737		782

• 2) Unrecognized deferred tax assets

The Group’s unrecognized deferred income tax assets were composed of the following items:

Deductible temporary difference Unrealized project expenses The carryforward of unused tax losses	December 31, 2020 $ 61,953 1,202 42,399	December 31, 2019 63,606 885 36,940 101,431
	$ 105,554

The R.O.C. Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years for local tax reporting purposes. The temporary difference associated with the net losses was not recognized as deferred tax assets as the Group is not expected to have sufficient taxable income to offset against temporary difference in the foreseeable future.

As of December 31, 2020 the net losses that have not been recognized as deferred tax assets and the expiration years were as follows:

Year of loss 2010 2011 2012 2018 2019 2020	Unused tax loss $ 12,450 7,917 150,912 633 3,644 36,441 $ 211,997	**Expiry year **
		2020 2021 2022 2028 2029 2030

(Continued)

170

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• 3) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2020 and 2019 were as follows:

Deferred tax liabilities: Balance on January 1, 2020 Effect of acquisition through business combination Debit (credit) on income statement Balance on December 31, 2020 Balance on January 1, 2019 Debit (credit) on income statement Balance on December 31, 2019	Share of profit accounted for using equity method $ - - - $ - $ 70,000 (70,000) $ -	Capitalized interest 216 - 154	Land value increment tax - 559,137 (62,552)	Others - - -	Total 216 559,137 (62,398)
		370	496,585	-	496,955
		- 216	- -	937 (937)	70,937 (70,721)
		216	-	-	216

Deferred tax assets: Balance on January 1, 2020 Effect of acquisition through combination (Debit) Credit on income statement (Debit) Credit on other comprehensive income Balance on December 31, 2020 Balance on January 1, 2019 Effect of acquisition through combination (Debit) Credit on income statement (Debit) Credit on other comprehensive income Balance on December 31, 2019	Unrealized project expenses and losses Effect of investments accounted for using equity method Book-tax difference at taxation time Loss deduction Others	Total 103,142 1,301 2,595 (27)
	$ 58,689 3,557 18,581 2,417 19,898 - - 1,247 - 54 (848) 1,283 (6,070) 4,197 4,033 - - - - (27)
	$ 57,841 4,840 13,758 6,614 23,958	107,011
	$ - - - - 8,084 53,533 2,826 30,222 - 4,969 5,156 731 (11,641) 2,417 12,605 - - - - (5,760)	8,084 91,550 9,268 (5,760)
	$ 58,689 3,557 18,581 2,417 19,898	103,142

(iii) Assessment by tax authorities

1) The Company’s income tax return for the year 2018 have been approved by the R.O.C. tax authorities.

(Continued)

171

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• 2) The Company’s other R.O.C. subsidiaries’ income tax return for the following years have been approved by the tax authorities:

Year of approval 2018 2018 2018 2018 2018 2018 2018 2018 2017 2019	Company name
	Everwin Investment Co, Ltd. Long Bao Co., Ltd. Rei Ju Construction Co., Ltd. ReiYu Green Energy Technology Co., Ltd. Rei Cheng Construction Co., Ltd. Sheng Ji Interior Decoration Co., Ltd. ReBio Green Innovation Co., Ltd. Ryan Development Corp. San Jhih Cih An Yuan Ltd. North Bay Recreation Co., Ltd.

• (o) Capital and other equity

As of both December 31, 2020 and 2019, the Company’s authorized share capital amounted to $7,200,000 thousand, divided into 720,000 thousand shares, with a par value of $10 per share. The paid-in capital was $3,947,293 thousand and $4,047,293 thousand, respectively. All issued shares were paid up upon issuance.

Reconciliation of shares outstanding for the years ended December 31, 2020 and 2019 were as follows:

(Expressed in thousands of shares)

		(Expressed in thousands of shares)
Balance on January 1 Return of capital on capital reduction Retirement of treasury share Balance on December 31		Ordinary shares 2020 2019 404,729 505,911 - (101,182) (10,000) - 394,729 404,729
		2020 404,729 - (10,000)
		394,729

• (i) Ordinary shares

In order to increase the return on shareholders’ equity and maintain a stable earnings per share, the Company, pursuant to the resolution passed in a regular shareholders’ meeting held on June 27, 2019, approved capital reduction amounting to $1,011,823 thousand, representing a cancellation of 101,182 thousand shares and a capital reduction ratio of 20%; the capital reduction dated December 13, 2019 was approved in accordance with Order No. 1080332235 issued by the FSC on October 9, 2019, and the payment for the shares was refunded on December 16, 2019.

(Continued)

172

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Capital surplus

The components of capital surplus were as follows:

The components of capital surplus were as follows:
Premium on convertible bond Treasury share transactions Generated by long-term equity investment	December 31, 2020 $ 15,731 11,440 119,462	December 31, 2019 16,129 11,440 102,848
	$ 146,633	130,417

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. Capital surplus included the income was derived from the issuance of new shares at a premium and income from the endowments received by the Company. In accordance with the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the amount of capital reserves to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount.

(iii) Retained earnings

The Company’s article of incorporation stipulates that Company’s net earnings should first be used to offset the prior years’ deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

The Company’s dividend policy was stipulated by the Board of Directors based on its operating and investment plans, capital budget, and changes in internal and external environment. As the Company is currently in its growing phase, retained earnings must be used to finance its operating growth and investment needs, it has adopted a residual dividend policy with the balance of dividends taken into consideration, wherein the cash dividends shall be no less than 10 percent of the total dividends.

1) Legal reserve

If the Company has no deficit and the legal reserve has exceeded 25% of the Company’ s paid-in capital, the excess may, pursuant to a resolution reached at a shareholders’ meeting, be transferred to capital or distributed in cash.

2) Special reserve

In accordance with Permit No. 1010012865 as issued by the Financial Supervisory Commission on 6 April 2012, a special reserve equal to the contra account of other shareholders’ equity is appropriated from current and prior period earnings. When the debit balance of any of the contra accounts in the shareholders’ equity is reversed, the related special reserve can be reversed. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distribution.

(Continued)

173

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

In accordance with Permit No. 1010047490 issued by the FSC on November 21, 2012, a special reserve shall be retained at an amount equal to the proportionate share of the carrying value of the treasury stock held by subsidiaries in excess of the market value at the reporting date. The special reserve may be reversed when the market value recovers in subsequent periods.

3) Earnings distribution

The Company, pursuant to the resolution reached in shareholder’ meeting held on June 18, 2020, did not appropriate the earnings for 2019. The dividends, appropriated pursuant to the resolution reached in shareholder’ meeting held on June 27, 2019, were as follows:

Dividends distributed to ordinary shareholders: Cash	For the Year Ended December 31, 2018 Amount per share amount $ 0.25 126,478
	Amount per share $ 0.25

• (iv) Treasury stock

• 1) The Company’s treasury shares, held by Rei Ju Construction Co., Ltd., a subsidiary as of December 31, 2020 and 2019, were as followed:

Shares held by subsidiaries (thousand) Acquisition cost Stock market price Amount of treasury shares	December 31, 2020 36,609	December 31, 2019 36,609 689,461 563,772 681,835
	$ 689,461
	$ 525,333
	$ 681,835

2) Pursuant to the requirements under section 28(2) of the Securities and Exchange Act, the Company repurchased 10,000 thousand treasury shares at the cost of $129,788 thousand, in order to protect its credit and shareholders' equity. Pursuant to Order No. 1090344919 issued by the FSC on May 25, 2020, the Company reported a repurchase of its own shares. Subsequent to that, the Company, according to a resolution made in a meeting of Board of Directors, retired 10,000 thousand treasury shares on June 19, 2020, which was recorded as the date of retirement. Consequently, the Company recognized a decrease of $100,000 thousand in ordinary shares, $398 thousand in capital surplus, and $29,390 thousand in undistributed earnings.

(Continued)

174

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(v) Other equity

Balance on January 1, 2020 Exchange differences on translation of net assets of foreign operations Disposal of investments in equity instruments at fair value through other comprehensive income Loss of control—subsidiary Unrealized gain (loss) on financial assets measured at fair value through other comprehensive income Difference between consideration and carrying amount of the equity interests in subsidiaries acquired Profit attributable to non-controlling interests Cash dividends paid to NCIs by the subsidiary Acquisition through business combination Changes in ownership interests in a subsidiary Gains (losses) on remeasurements of defined benefit plans Increase in non-controlling interests Balance on December 31, 2020 Balance on January 1, 2020 Exchange differences on translation of net assets of foreign operations Associates accounted for using equity method–share of translation differences of net assets of foreign operations Liquidation of foreign operations–translation differences of net assets of foreign operations reclassified to profit or loss Disposal of equity accounted associates－translation differences of net assets of foreign operations reclassified to profit or loss Unrealized gain (loss) on financial assets measured at fair value through other comprehensive income Unrealized gain (loss) on financial assets at FVOCI on associates accounted for using equity Disposal of investments in equity instruments at fair value through other comprehensive income Disposal of unrealized gains (losses) on financial assets at FVOCI of equity-accounted associates Difference between consideration and carrying amount of equity interest in subsidiaries acquired Acquisition through business combination Profit attributable to non-controlling interests Changes in ownership interests in subsidiaries Gains (losses) on remeasurements of defined benefit plans Increase in non-controlling interests Cash dividends paid to NCIs by subsidiaries Balance on December 31, 2019	Exchange differences on translation of foreign financial statements $ 14,712 (239) - - - - - - - - - -	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (85,507) - 15,000 - 29,958 - - - - - - -	Non-control ling interests 267,967 17 - (1,610) 991 (164,334) 27,700 (12,182) 153,305 (16,957) (5) 17,588	Total 197,172 (222) 15,000 (1,610) 30,949 (164,334) 27,700 (12,182) 153,305 (16,957) (5) 17,588
	$ 14,473	(40,549)	272,480	246,404
	$ (22,674) 1,509 24,129 (3,608) 15,356 - - - - - - - - - - -	112,601 - - - - 43,119 (12,528) (242,348) 13,649 - - - - - - -	284 (92) - - - (5,577) - - - (295,073) 551,777 21,940 656 (121) 26,158 (31,985)	90,211 1,417 24,129 (3,608) 15,356 37,542 (12,528) (242,348) 13,649 (295,073) 551,777 21,940 656 (121) 26,158 (31,985)
	$ 14,712	(85,507)	267,967	197,172

(Continued)

175

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (p) Earnings per share

• (i) Basic earnings per share

The following table sets out the Group’s basic earnings per share calculated based on the profit attributable to the Company’s ordinary equity holders and the weighted-average number of ordinary shares outstanding:

• 1) Profit attributable to ordinary shareholders of the Company

Profit attributable to the Company

	**For **	**the Years Ended **	**December 31 **
		2020	2019
	$	1,100,637	865,253

• 2) Weighted average number of ordinary shares outstanding

Weighted-average number of ordinary shares outstanding Effect of capital reduction Effect of treasury shares Weighted-average number of ordinary shares outstanding Earnings per share	For the Years Ended December 31 2020 2019 404,729 505,911 - (4,216) (44,314) (37,753)	For the Years Ended December 31 2020 2019 404,729 505,911 - (4,216) (44,314) (37,753)
	360,415	463,942
	$ 3.05	1.87

• (ii) Diluted earnings per share

The calculation of the Group’s diluted earnings per share based on the profit attributable to the Company’s ordinary equity holders and the weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares is as follows:

• 1) Profit attributable to ordinary shareholders of the Company (diluted)

Profit attributable to ordinary shareholders of the Company (diluted)	For the Years Ended December 31 2020 2019 $ 1,100,637 865,253
	2020 $ 1,100,637

(Continued)

176

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• 2) Weighted-average number of ordinary shares outstanding (diluted)

Weighted-average number of ordinary shares outstanding (basic) Employee share bonus Weighted-average number of ordinary shares outstanding (diluted) on December 31 Diluted earnings per share	For the Years Ended December 31 2020 2019 360,415 463,942 991 726 361,406 464,668 $ 3.05 1.86
	361,406
	$ 3.05

• (q) Revenue from contracts with customers

• (i) Disaggregation of revenue

Primary geographical markets: Taiwan Mainland China Major products: Rental revenue (Note) Revenue from sale of burial ground and columbarium niches Funeral service revenue Construction revenue Recreation revenue Primary geographical markets: Taiwan Mainland China Major products: Rent revenue (Note) Revenue from sale of columbarium niches Funeral service revenue Construction revenue	For the Years Ended December 31, 2020	For the Years Ended December 31, 2020	For the Years Ended December 31, 2020	For the Years Ended December 31, 2020	For the Years Ended December 31, 2020	For the Years Ended December 31, 2020	For the Years Ended December 31, 2020	Total 10,766,949 9,375 10,776,324 22,808 119,598 27,559 10,524,742 81,617
	Property development $ 18,837 -	Funeral services 148,038 -		Construction engineering 10,516,686 9,375		Recreation 83,388 -
	$ 18,837	148,038		10,526,061		83,388
	$ 18,837 - - - -	- 2,200 119,598 - 27,559 - 881 10,523,861 - -				1,771 - - - 81,617
	$ 18,837	148,038 10,526,061				83,388		10,776,324
		**For the Years Ended **			December 31, 2019			Total 9,285,304 10,309
	Property development $ 16,324 - $ 16,324 $ 16,324 - - - $ 16,324		Funeral services 108,739 -		Construction engineering 9,160,241 10,309
			108,739		9,170,550			9,295,613
			- 77,506 31,233 -		- - - 9,170,550			16,324 77,506 31,233 9,170,550
			108,739		9,170,550			9,295,613

Note: The Group recognized rental revenue from investment property for 2020 and 2019 according to IFRS 16.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Contract balances

Notes and accounts receivable Less: loss allowance Total Contract assets-project investment not up to the right to receive payment Contract assets-retention in construction Total Current contract liabilities－advance revenue from management fee Current contract liabilities－the excess of payment received over construction revenue Current contract liabilities－advance sales receipts Non-current contract liabilities－advance revenue from management fee Non-current contract liabilities－advance sales receipts Total	December 31, 2020 $ 738,235 (26)	December 31, 2019 1,245,067 (26)	January 1, 2019 344 - 344 - - - 167 - 727 8,075 - 8,969
	$ 738,209	1,245,041
	$ 1,963,885 871,218	2,146,929 822,289
	$ 2,835,103	2,969,218
	$ 2,950 623,903 6,691 27,111 4,990	2,742 718,348 580 18,539 -
	$ 665,645	740,209

For details on notes and accounts receivable, contract assets, and allowance for impairment, please refer to Note 6(d), (t) and 9.

The major changes in contract assets and contract liabilities mainly stemmed from the difference between the respective timings of obligation performance, including transferring of merchandise or rendering of service, and the payment. The following table sets out the changes in transaction price estimates resulted from the contract assets of the construction segment that entered into mediation or litigation:

The amount of mediation or litigation Less: Expected loss (Note) Total	December 31, 2020 $ 245,380 (42,746)	December 31, 2019 392,434 (24,446)
	$ 202,634	367,988

Note: Losses that may occur were assessed based on mediation or litigation in each case, deemed as changes in the estimated contract price, and were recognized as a deduction from operating revenue. Please refer to Note 9 for details.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Remuneration to employees and directors

The Company’s Articles of Incorporation stipulate that if the Company nets a profit for the year, then a minimum of 1% shall be allocated as employee compensation and a maximum of 3.5% shall be allocated as directors’ remuneration. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The recipients of shares and cash may include the employees of the Company’s affiliated companies who meet certain conditions.

The Company estimated its remuneration to employees at $11,563 thousand and $10,919 thousand for 2020 and 2019, respectively; the Company also estimated its remuneration to directors at $40,471 thousand and $38,216 thousand for 2020 and 2019, respectively. The estimated amounts mentioned above were based on the profit before tax of each respective ending period, multiplied by the percentage of the remuneration to employees and directors, as specified in the Company’s article. The estimations were recognized as operating expenses. If the actual amounts differ from the estimated amounts, the differences shall be accounted as changes in accounting estimates and recognized as profit or loss in the following year. If the Board resolves to distribute stocks as employee compensation, the number of shares distributed as compensation is calculated based on the closing price of the common stock on the day before the Board’s resolution.

The Company estimated its remuneration to employees at $10,919 thousand and $1,096 thousand for 2019 and 2018, and remuneration to directors at $38,216 thousand and $3,838 thousand for 2019 and 2018, respectively. The actual amount of remuneration distributed to employees for 2019 and 2018 were $10,958 thousand and $1,135 thousand, reflecting an underestimation of $39 thousand for both years. The actual amount of remuneration distributed to directors for 2019 and 2018 were $38,352 thousand and $3,971 thousand, reflecting an underestimation of $136 thousand and $133 thousand for the respective years. The differences between the estimated amounts in the financial statements and the actual amounts distributed were accounted for as changes in accounting estimates, and were recognized as profit or loss for 2020 and 2019. Related information is available on the website of the Market Observation Post System.

(s) Non-operating income and expenses

(i) Interest income

The details of the Group’s interest income for 2020 and 2019 were as follows:

Interest income from bank deposits Interest income from loans to other parties Other interest income Total interest income	For the Years Ended December 31 2020 2019 $ 4,061 32,004 19,791 2,529 4,595 6,714 $ 28,447 41,247
	2020 $ 4,061 19,791 4,595
	$ 28,447

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other income

The details of the Group’s other income for 2020 and 2019 were as follows:

Dividend income Remuneration to directors and supervisors Income from fines and penalties (Note) Other income Total Other income	For the Years Ended December 31 2020 2019 $ 193,788 161,749 544 35 12,645 13,080 9,546 9,245 $ 216,523 184,109
	2020 $ 193,788 544 12,645 9,546
	$ 216,523

Note: The Group entered into a joint land development project with non-related parties. Since it was expected that the land transfer could not be completed by the agreed date specified in contract, both parties agreed to terminate the contract with compensation.

(iii) Other gains and losses

The details of the Group’s other gains and losses for 2020 and 2019 were as follows:

Gains on disposal of property, plant, and equipment Losses on disposals of investment property Gains on disposals of investments Foreign exchange losses Net gain (loss) on financial assets at fair value through profit or loss Impairment loss Others Other gains and losses, net	For the Years Ended December 31 2020 2019 $ 461 12 (9,360) - (1,496) 1,101,425 (2,214) (91,630) 767,795 (127,334) (7,312) - (1,150) (8,106) $ 746,724 874,367	For the Years Ended December 31 2020 2019 $ 461 12 (9,360) - (1,496) 1,101,425 (2,214) (91,630) 767,795 (127,334) (7,312) - (1,150) (8,106) $ 746,724 874,367
		874,367

Note: Approved by the Board of Directors, on April 2, 2019, the Group sold Xiamen International Trade Financial Center Development Co., Ltd. to non-related parties for CNY501,000 thousand. After the completion of tax payment and transfer of ownership on May 16, 2019, $1,022,257 thousand of gain on disposals of investments was recognized, and the disposal price of $2,265,716 thousand (deducting relevant taxes and fees of $2,311 thousand) has been fully received. On December 31, 2019, the Group deposited the entire disposal price received in its CNY time deposit account (classified as other current financial assets).

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (iv) Finance costs

The finance costs of the Group for 2020 and 2019 were detailed as follows:

Interest expense Interest expense on lease liabilities Finance-related fee expense Finance costs, net	For the Years Ended December 31 2020 2019 $ 76,892 64,292 381 611 35,009 42,222	For the Years Ended December 31 2020 2019 $ 76,892 64,292 381 611 35,009 42,222
	2020 $ 76,892 381 35,009
	$ 112,282	107,125

• (t) Financial instruments

• (i) Credit risk

  • 1) Maximum amount of credit risk exposure

The carrying amounts of financial assets and contract assets represented the maximum credit risk exposure of the Group.

2) Concentration of credit risk

The customers of the construction engineering department of the Group are concentrated in the construction company and government agencies. In order to reduce credit risk, the Group continuously evaluates the financial status of the customers and requires the other party to provide guarantees or guarantees when necessary. It also regularly evaluates the possibility of the recovery of accounts receivable and makes appropriate allowances for bad debts. The related bad debt losses are still within the expectations of the Administration.

In respect of investment business, the Group conducts financial instrument transactions banks with good credit standing and financial institutions which are graded above investment level, so there shall be no material credit risks.

As the funeral segment of the Group have a large customer base, and most of the transactions are conducted in cash, the credit risk of accounts receivable are not significantly concentrated. To reduce credit risk, the Group continuously assesses the financial condition of its customers, normally without a request for collateral.

As the recreation segment of the Group have a large customer base, and most of the transactions are conducted in cash, the credit risk of accounts receivable are not significantly concentrated. To reduce credit risk, the Group continuously assesses the financial condition of its customers, normally without a request for collateral.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Receivables

For credit risk exposure of notes and accounts receivable, please refer to Note 6(d).

Other financial assets at amortized cost includes other receivables and investments in domestic preferred shares. Except for fund loans and payments provided with requested guarantees according to individual credit risk assessment, the rest were financial assets with low credit risk. Therefore, the 12-month expected credit loss amount was used to measure the loss allowance during the period (please refer to Note 4(g) for the explanation on how the Group determines that the credit risk to be low).

The loss allowance provision for 2020 and 2019 were determined as follows:

Balance on January 1, 2020 Impairment losses recognized Reversal of impairment loss Balance on December 31, 2020 Balance on January 1, 2019 Reversal of impairment loss Balance on December 31, 2019	Other receivable $ 16,534 384 (16,534) $ 384 $ 31,534 (15,000) $ 16,534

4) Credit risk of contract assets

The clients of the Group are mainly concentrated within public tender projects and private projects. As of December 31, 2020 and 2019, in respect of credit risk concentration, government construction contracts accounted for 27% and 50% of the total contract assets, respectively. However, since the counterparty was mainly a government agency, there was no significant credit risk. In order to reduce credit risk, the Group continues to evaluate the financial position of its clients and, if necessary, require the counterparty to provide collateral or guarantees. The Group still regularly evaluates the recoverability of contract assets and makes loss allowances for bad debts, and the related bad debt losses are still within the expectations of management.

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

December 31, 2020 Non-derivative financial liabilities Floating rate instruments Fixed-rate instruments Lease liabilities Non-interest-bearing liabilities	Carrying amount	Contractual cash flows	Within **1year **	1-2 years	2-5 years	Over 5years - - - 1,998,558
	$ 4,209,601 3,050,704 13,751 5,953,101	4,276,683 3,134,422 14,055 5,953,101	3,218,429 608,922 8,914 2,565,374	470,448 2,525,500 4,037 284,080	587,806 - 1,104 1,105,089
	$ 13,227,157	13,378,261	6,401,639	3,284,065	1,693,999	1,998,558

(Continued)

182

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2019 Non-derivative financial liabilities Floating rate instruments Fixed-rate instruments Lease liabilities Non-interest-bearing liabilities	Carrying amount	Contractual cash flows	Within **1year **	1-2 years	2-5 years	Over 5years - - - 4,834
	$ 1,990,180 2,466,135 42,133 4,660,346	2,065,026 2,568,779 42,587 4,660,346	654,675 25,500 31,709 3,622,378	502,137 25,500 7,750 387,286	908,214 2,517,779 3,128 645,848
	$ 9,158,794	9,336,738	4,334,262	922,673	4,074,969	4,834

The Group is not expecting the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

• (iii) Currency risk: The Group has no significant exposure to currency risk.

(iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Group's financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.5% when reporting to management internally, which also represents the Group management’s assessment of the reasonably possible interest rate change.

If the interest rate increased (decreased) by 0.5%, with all other variable factors remained constant the Group’s profit after tax would have decreased (increased) by $9,275 thousand and increased (decreased) by $6,195 thousand for the 2020 and 2019, respectively. This is mainly due to the Group’s borrowing and deposits at floating rates.

(v) Other price risk

The sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the other comprehensive income as illustrated below:

Securities price at the reporting date 0.5% increase 0.5% decrease	For the Years Ended December 31 2020 2019 Other comprehensive income, net of tax Post-tax profit or loss Other comprehensive income, net of tax Post-tax profit or loss $ 2,398 25,979 2,228 18,812 $ (2,398) (25,979) (2,228) (18,812)	For the Years Ended December 31 2020 2019 Other comprehensive income, net of tax Post-tax profit or loss Other comprehensive income, net of tax Post-tax profit or loss $ 2,398 25,979 2,228 18,812 $ (2,398) (25,979) (2,228) (18,812)	For the Years Ended December 31 2020 2019 Other comprehensive income, net of tax Post-tax profit or loss Other comprehensive income, net of tax Post-tax profit or loss $ 2,398 25,979 2,228 18,812 $ (2,398) (25,979) (2,228) (18,812)	For the Years Ended December 31 2020 2019 Other comprehensive income, net of tax Post-tax profit or loss Other comprehensive income, net of tax Post-tax profit or loss $ 2,398 25,979 2,228 18,812 $ (2,398) (25,979) (2,228) (18,812)
	2020
	Other comprehensive income, net of tax $ 2,398	Post-tax profit or loss		Other comprehensive income, net of tax 2,228
		25,979
	$ (2,398)	(25,979)		(2,228)

(Continued)

183

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (vi) Fair value of financial instruments

• 1) Categories of financial instruments and fair value hierarchy

The fair value of financial assets at fair value through profit or loss, and financial assets at fair value through other comprehensive income is measured on a recurring basis. The following table sets out the carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy but excluding the optional information on financial instruments not measured at fair value with carrying amount reasonably close to their fair and lease liabilities.

Financial assets at fair value through profit or loss Non-derivative financial assets at fair value through profit or loss, mandatorily measured at fair value Financial assets at fair value through other comprehensive income Domestic listed stocks Unquoted equity instruments at fair value through other comprehensive income Subtotal Financial assets at fair value through profit or loss Non-derivative financial assets at fair value through profit or loss, mandatorily measured at fair value Financial assets at fair value through other comprehensive income Domestic listed stocks Unquoted equity instruments at fair value through other comprehensive income Subtotal		December 31, 2020	December 31, 2020	December 31, 2020	Total 5,195,794
	Book Value $ 5,195,794		FairValue
		Level 1 5,195,794	Level 2 -	Level 3 -
	$ 22,790 456,904	22,790 -	- 17,850	- 439,054	22,790 456,904
	479,694	22,790	17,850	439,054	479,694
		December 31, 2019			Total 3,762,442
	Book Value $ 3,762,442		FairValue
		Level 1 3,762,442	Level 2 -	Level 3 -
	$ 3,310 442,248	3,310 -	- 28,800	- 413,448	3,310 442,248
	445,558	3,310	28,800	413,448	445,558

(Continued)

184

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• 2) Fair value valuation technique of financial instruments not measured at fair value

The assumptions and methods used in valuing financial instruments that are not measured at fair value are as follows:

• a) Financial assets and financial liabilities measured at amortized cost

If recent transaction prices or market maker quotes are available, the fair value is based on such information. If there is no quoted market price available, the fair value is determined by using valuation techniques and calculated as the present value of the estimated cash flows.

• 3) Fair value valuation technique of financial instruments measured at fair value

• a) Non-derivative financial instruments

Fair value measurement of financial instruments was based on quoted market prices if these prices were available in an active market. The quoted price of a financial instrument obtained from main exchanges and on-the-run bonds from Taipei Exchange can be used as a base to determine the fair value of the listed companies’ equity instrument and debt instrument of the quoted price in an active market.

A financial instrument is regarded as the quoted price in an active market if the quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency; and if those prices represent the actual and regularly occurring market transactions on an arm’s length basis. Otherwise, the market is deemed to be inactive. In general, market with low trading volume or high bid-ask spreads is an indication of a non-active market.

The categories and nature of the fair value for the Group’s financial instruments which have active market are as below:

● Publicly traded stock, bank draft and bond with standard terms, conditions and traded in active market. The fair value is based on quoted market prices.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor. Fair value, measured by using valuation technique that can be extrapolated from either similar financial instruments or discounted cash flow method or other valuation techniques, including models, is calculated based on available market data at the reporting date. (For example, over the counter yield curve and Reuters Primary CP Rate average prices.)

The categories and nature of the fair value for the Group’s financial instruments which without an active market are as below:

● The main assumption behind this is that the estimated pre tax, pre depreciation, and pre amortization earnings of the investee company is added to the earnings multiplier derived from the comparable quoted price of the listed company. The estimate of the fair value of equity instruments has been adjusted

(Continued)

185

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

due to the effect of the discount arising from the lack of market liquidity of the equity security.

(Continued)

186

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• 4) Transfers between Level 1 and Level 2: None.

• 5) Reconciliation of Level 3 fair values

January 1, 2020 Total gains and losses Recognized in other comprehensive income Purchase Disposal December 31, 2020 January 1, 2019 Acquisition through business combination Total gains and losses Recognized in other comprehensive income Disposal December 31, 2019	Fair value through other comprehensive income Unquoted equity instruments $ 413,448 35,388 75,218 (85,000)
	$ 439,054
	$ 416,385 28,041 48,328 (79,306)
	$ 413,448

The aforementioned total gains or losses were classified as ‚unrealized gains or losses from financial assets at fair value through other comprehensive income‛. The gains or losses attributable to the assets held as of December 31, 2020 and 2019 were as follows:

Total gains and losses Recognized in other comprehensive income (classified as‚unrealized gains or losses from financial assets at fair value through other comprehensive income‛)	2020 $ 13,510	2019 31,197

• 6) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Consolidated Company’s financial instruments that use Level 3 inputs to measure fair value include fair value through other comprehensive income—equity investments.

Most of the Group’s financial instruments that use Level 3 inputs have only one significant unobservable input. Only equity investment with no-active markets have multiple significant unobservable inputs. The significant unobservable inputs of the equity investments without an active market are independent, therefore, there is no correlation between them.

(Continued)

187

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Quantified information on significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income – equity investments without an active market Financial assets at fair value through other comprehensive income – equity investments without an active market	Valuation technique Comparable listed companies approach Asset Method	Significant unobservable input Inter-relationship between significant unobservable inputs and fair value measurement ‧Value multiple (0.4~8.4 and 0.74~15.41 as of December 31, 2020 and 2019 ) ‧Market liquidity discount rate (31.05%~32.28% and 32.06%~32.28% as of December 31, 2020 and 2019) ‧The higher the multiple, the higher the fair value. ‧The higher the market liquidity discount rate, the lower the fair value. ‧Market liquidity discount rate (32.28% as of both December 31, 2020 and 2019) ‧Control discount (6.45%~22.24% and 13.64%~16.67% as of December 31, 2020 and 2019) ‧The higher the market liquidity discount rate, the lower the fair value. ‧The higher the control discount, the lower the fair value.	Inter-relationship between significant unobservable inputs and fair value measurement

• 7) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The Group’s measurement on the fair value of financial instruments is deemed reasonable despite different valuation models or parameters may lead to different results. For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects on profit or loss and other comprehensive income:

December 31, 2020 Financial assets fair value through other comprehensive income Equity investments without an active market Equity investments without an active market December 31, 2019 Financial assets fair value through other comprehensive income Equity investments without an active market Equity investments without an active market	Input	Upward or downward	Other comprehensive income Favorable effect Unfavorable effect 857 (846) 2,461 (2,417) 1,362 (4,102) 1,729 (1,700)
			Favorable effect
	Market liquidity discount Control discount Market liquidity discount Control discount	1% 1% 1% 1%	857 2,461 1,362 1,729

(Continued)

188

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

• (u) Financial risk management

• (i) Overview

The Group is exposed to the following risks arising from financial instruments:

• 1) Credit risk

• 2) Liquidity risk

• 3) Market risk

This note expressed the information on risk exposure and objectives, policies and process of risk measurement and management of the Group. For more disclosures about the quantitative effects of these risk exposures, please refer to respective notes in the report.

• (ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The financial management department, which reports regularly to the Board of Directors on its activities to develop and monitor the Group’s risk management policies.

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group ’ s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group Audit Committee oversees how management monitors compliance with the Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group Audit Committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(iii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial ’ instrument fails to meet its contractual obligations, and arises principally from the Group s receivables from customers, contract assets, and financial assets.

(Continued)

189

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• 1) Accounts receivable and other receivables

The Group’s policy requires client evaluation and credit verification prior to conducting transactions. The clients of Group are mainly concentrated in construction companies and government agencies. Since the transaction counterparty is a government agency, there is no risk of credit risk. For the remaining trading partners, in order to reduce credit risk, the Group continuously evaluates the financial status of customers. When necessary, the counterparty will be required to provide guarantees or guarantees, and the possibility of recovering the accounts receivable is regularly evaluated and an allowance for losses is appropriately set. The relevant losses are still within the expectations of the management.

• 2) Contract assets

The Group ’ s policy requires client evaluation procedures prior to conducting transactions. The projects undertaken by the Group are mainly concentrated within public tender projects and private projects. The Group continuously assesses the financial position of its customers and the recovery of contract assets and sets aside appropriate loss allowance for the loss, which is expected by the management.

• 3) Investment and securities payments receivable

The exposure to credit risk for the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Group’s finance department. The Group only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Group does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

• 4) Guarantees

The Group’s policy is to provide financial guarantees only for subsidiaries with over 50% of their voting shares held by the Group. As of December 31, 2020 and 2019, the Group has not provided any endorsement or guarantee for any external party. For the endorsements and guarantees provided by the Group, please refer to Note 13 for details.

(iv) Liquidity risk

The Group manages and maintains sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Group’s management supervises the banking facilities and ensures in compliance with the terms of the loan agreements.

The loan was an important source of liquidity for the Group. As of December 31, 2020 and 2019, the Group had unused short-term bank facilities of $2,185,825 thousand and $1,674,865 thousand, respectively.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable range, while optimizing the return.

• 1) Currency risk: None.

• 2) Interest rate risk

The policy of the Group is to adopt the best interest rate portfolio for financial liabilities to be reviewed and controlled by the management to control risk exposure to interest rate fluctuations.

(v) Capital management

The Group sets its objectives for managing capital to sustain the future development of the business, to continue to provide returns to its shareholders and other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the dividend payment and reduce the capital for redistribution to its shareholders. The Group also issues new shares or sell assets to settle any liabilities.

The Group uses the debt-to-equity ratio to manage capital. This ratio is calculated by dividing the net liabilities by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, other equity and other equity interest plus net debt.

Debt-to-equity ratios at December 31, 2020 and 2019 were as follows:

Total liabilities Less: Cash and cash equivalents Net debt Total equity Adjusted capital Debt-to-equity ratio	December 31, 2020 $ 14,696,450 (1,911,545)	December 31, 2020 $ 14,696,450 (1,911,545)	December 31, 2019 10,133,952 (3,574,648)
	12,784,905 9,533,970		6,559,304 8,578,553
	$ 22,318,875		15,137,857
		57.28%	43.33%

As of December 31, 2020, the debt-to-equity ratio of the Group increased, mainly due to the merger and acquisition of North Bay Recreation Co., Ltd. There were no changes in the Group’s approach to capital management during the year.

(Continued)

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LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (w) Investing and financing activities not affecting current cash flow

The non-cash transactions for investing and financing activities of the Group for 2020 and 2019 were as follows:

• (i) For right-of-use assets under leases.

• (ii) Reconciliation of liabilities arising from financing activities was as follows:

Short-term borrowings Short-term notes and bills payable Long-term borrowings Guarantee deposits received Bonds payable Lease liabilities Total amount of liabilities arising from financing	January 1, 2020 Cash flows $ 1,600,410 2,277,772 - 168,317 389,770 (62,004) 4,662 1,345 2,466,135 - 42,133 (30,720) $ 4,503,110 2,354,710	Non-cash changes Acquisition through business combination Others December 31, 2020 - - 3,878,182 409,800 (Note1) 2,857 580,974 3,653 - 331,419 1,988,074 - 1,994,081 - (Note2) 3,595 2,469,730 - (Note3) 2,338 13,751 2,401,527 8,790 9,268,137	Non-cash changes Acquisition through business combination Others December 31, 2020 - - 3,878,182 409,800 (Note1) 2,857 580,974 3,653 - 331,419 1,988,074 - 1,994,081 - (Note2) 3,595 2,469,730 - (Note3) 2,338 13,751 2,401,527 8,790 9,268,137

Short-term borrowings Short-term notes and bills payable Long-term borrowings Guarantee deposits received Bonds payable Lease liabilities Total amount of liabilities arising from financing	January 1, 2019 Cash flows $ - 900,450 419,911 (469,911) 60,000 (120,300) 3,975 497 2,462,630 - 34,259 (27,827)	Non-cash changes Acquisition through business combination Others December 31, 2019 699,960 - 1,600,410 50,000 - - 450,070 - 389,770 190 - 4,662 - (Note2) 3,505 2,466,135 20,416 (Note4) 15,285 42,133 1,220,636 18,790 4,503,110	Non-cash changes Acquisition through business combination Others December 31, 2019 699,960 - 1,600,410 50,000 - - 450,070 - 389,770 190 - 4,662 - (Note2) 3,505 2,466,135 20,416 (Note4) 15,285 42,133 1,220,636 18,790 4,503,110	Non-cash changes Acquisition through business combination Others December 31, 2019 699,960 - 1,600,410 50,000 - - 450,070 - 389,770 190 - 4,662 - (Note2) 3,505 2,466,135 20,416 (Note4) 15,285 42,133 1,220,636 18,790 4,503,110
	$ 2,980,775 282,909			15,285 18,790 4,503,110

Note 1: It is the discount and amortization of short-term notes and bills payable.

Note 2: Discount amortization of corporate bonds.

Note 3: This is an increase of $3,401 thousand in the current period and a decrease in rent changes of $1,063 thousand.

(Continued)

192

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• Note 4: This is an increase of $14,460 thousand in the current period, and an increase in rent of $825 thousand.

(Continued)

193

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(7) Related-party transactions

(a) Related-party name and relationship

The followings are related parties that have had transactions with the Group during the periods covered in the consolidated financial statements:

Name of related party Relations with the Company Rei Ju Construction Co., Ltd. (Rei Ju Construction) Associate of the Group (Note 1) ReiYu Green Energy Technology Co., Ltd. (ReiYu Green Energy) Associate of the Group (Note 1) Ryan Development Corp. (Ryan Development) Associate of the Group (Note 1) Rei Cheng Construction Co., Ltd. (Rei Cheng Construction) Associate of the Group (Note 1) Xiamen Rei Ju Construction Engineer Co. (Xiamen Rei Ju) Associate of the Group (Note 1) ReBio Green Innovation Co., Ltd. (ReBio) Associate of the Group (Note 1) Sheng Ji Interior Decoration Co., Ltd. (Sheng Ji) Associate of the Group (Note 1) Rei Ying Construction Co, Ltd. (Rei Ying Construction) Associate of the Group Rei Jhao Engineer Ltd. (Rei Jhao Engineer) Associate of the Group Fortune Base Development Co., Ltd. (Fortune Base Development) Legal person of ultimate parent (Note 2) Global Funeral Services Co., Ltd. (Global Funeral Services) Legal person of ultimate parent (Note 2) Heng Fu Development Co., Ltd. ( Heng Fu Development) Substantive related party Heng Chuang Industrial Co., Ltd. ( Heng Chuang Industrial) Substantive related party Han Yu Investment Co, Ltd. ( Han Yu Investment) Substantive related party You Long Construction Development Co., Ltd. Substantive related party (You Long Construction) Ming Jhu Investment Ltd. (Ming Jhu Investment) Substantive related party Sung Gang Co., Ltd (Sung Gang) Substantive related party Si Wang Investment Co., Ltd. (Si Wang Investment) Substantive related party Ontario Investment Co., Ltd. (Ontario Investment) Substantive related party North Bay Golf Sports Development Foundation (North Bay Its Chairman is the Chairman of the Foundation) Company

Note 1: It has been a consolidated subsidiary since March 4, 2019. Note 2: It has been the legal person of the ultimate parent since June 27, 2019.

(Continued)

194

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Significant related-party transactions

(i) Sales

The amounts of the Group’s significant sales to related parties were as follows:

Construction projects	Contract amount	Contract amount	Current price For the Years Ended December 31 2020 2019 32,376 57,052
	December 31, 2020	December 31, 2019
			2020
	$ 122,762	122,762	32,376

As a construction contractor, the Group complied with related parties’ operation rules and requested additional management fees and payment based on the project budget and profit, and the prices were submitted to supervisors for approval after the price comparison and negotiation process. As of December 31, 2020 and 2019, the contract liabilities arising from the construction contracts were zero and $4,836 thousand, respectively.

(ii) Purchases

The amounts of significant purchases by the Group from related parties were as follows:

Associates	Contract amount	Contract amount	Current price For the Years Ended December 31 2020 2019 9,719 -
	December 31, 2020	December 31, 2019
			2020
	$ 30,637	-	9,719

• (iii) Receivables from related parties

The receivables due from related parties were as follows:

Account title Category of related party	December 31, 2020 December 31, 2019 $ - 2,925
Accounts receivable Other related parties

• (iv) Payables to related parties

The payables to related parties were as follows:

Account title Category of related party	December 31, 2020 December 31, 2019 $ 1,577 1,577 145 - 723 - 100 -
Notes payable Other related parties－Heng Fu Development Notes payable Other related parties－North Bay Foundation Accounts payable Other related parties－Rei Jhao Engineer Other payables Other related parties
	$ 2,545 1,577

(Continued)

195

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (v) Leases

• 1) The Group leases offices to related parties, and the rent collection are detailed as follows:

	**For the Years **	**Ended December **	**31 **
	2020	2019
Associates	$	11	276

• 2) On March 2016 and August 2020, the Group entered into lease contracts that ran for a period between four to five years with other related parties, Heng Fu Development Co., Ltd. and Sung Gang Co., Ltd. respectively. The contract value, with reference to the office rental prices in the vicinity, totaled $73,227 thousand. The recognized interest expense for 2020 and 2019 amounted to $215 thousand and $348 thousand, respectively. As of December 31, 2020 and 2019, the balance of lease liabilities amounted to $5,621 thousand and $17,812 thousand, respectively.

• (vi) The guarantees provided by other related parties-Fortune Base Development for subsidiaries pursuant to the provisions of construction contracts have amounted to $2,857,086 thousand as of December 31, 2020 and 2019.

• (vii) Property transactions

• 1) Property, plant and equipment acquired

Category of relatedparty Transaction item

Date of transaction Transaction amount Date of the last transfer Basis of pricing Account title

For the Year Ended December 31, 2020 Other related parties－ Si Wang Investment Land at Jyuguang, Wanhua District, Taipei City Other related parties－ Fortune Base Development Land and buildings at Gongyuan, Jhongjheng Dist., Taipei City Other related parties－ Ontario Investment Land and buildings at Rongxing, Jhongshan Dist., Taipei City Other related parties－ Global Funeral Services Land and buildings in the park section of Taipei's Central Mountain District For the Year Ended December 31, 2019 Other related parties－ Fortune Base Development Land at Zhixing, Wanhua District, Taipei City

March 6, 2020 $ 32,000 May 9, 2018 Fairness opinion by accountant Inventories March 6, 2020 $ 86,275 September 8, 2011 Appraisal Report Investment property May 14, 2020 $ 208,366 July 27, 1995 Appraisal Report Investment property December 14, 2020 $ 921,121 (Note) April 28, 2011 Appraisal Report Investment property November 12, 2019 $ 104,815 (Note) November 08, 2013 Appraisal Report Inventories

Note: As of December 31, 2020 and 2019, the prepayments for the aforementioned transactions amounted to $230,280 thousand and $52,407 thousand (recognized as other non-current assets and inventories), respectively.

(Continued)

196

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Financial assets acquired

The Group’s acquisition of ownership interests in subsidiaries were as follows:

Category of relatedparty	For the Year Ended December 31, 2019 Shares Transaction item Acquisition price	For the Year Ended December 31, 2019 Shares Transaction item Acquisition price
Other related parties－Fortune Base Development Other related parties－Heng Chuang Industrial Other related parties－Global Funeral Services Other related parties－Han Yu Investment Other related parties－Ming Jhu Investment Other related parties－Sung Gang	269,500 Rei Ju Construction Co., Ltd. 502,000 Rei Ju Construction Co., Ltd. 694,000 Rei Ju Construction Co., Ltd. 339,040 Rei Ju Construction Co., Ltd. 11,735,854 Rei Ju Construction Co., Ltd. 5,197,000 Rei Ju Construction Co., Ltd. 18,737,394	$ 5,390 10,040 13,880 6,781 234,717 103,940
		$ 374,748

The price of equity interests acquired by the Group from the related parties was determined based on the appraisal report and the bilateral negotiations.

(viii) Others

The transactions between the Group and other related parties are set out as follows:

Account title	Category of related party	December 31, 2020 $ 501 2,544	December 31, 2019 471 2,447
Other current assets Other non-current financial assets	Other related parties Other related parties

• (c) Key management personnel compensation

Compensation to key management personnel comprised:

Short-term employee benefits Post-employment benefits	For the Years Ended December 31 2020 2019 $ 16,123 12,231 269 259 $ 16,392 12,490
	2020
	$ 16,123 269
	$ 16,392

(Continued)

197

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(8) Pledged assets

The book value of the Consolidated Company’s pledged assets is as follows:

Assets name	Object of pledge	December 31, 2020 $ 4,465,970 1,642,321 606,736 134,853 86,507 571,001 400,934 4,748,451	December 31, 2019 3,058,799 1,505,792 735,153 69,816 49,621 571,431 41,834 132,512 6,164,958
Financial assets at fair value through profit or loss Inventories Other current financial assets Other current financial assets Other current financial assets Other non-current financial assets Investment property Property, plant, and equipment	Bank borrowings, commercial papers and ordinary corporate bonds issued Bank borrowings Performance bonds and warranty bonds Bank borrowings Trust account Reserve account for ordinary corporate bonds, time deposits, performance bond for Nantou funeral parlor Bank borrowings Bank borrowings and commercial papers
		$ 12,656,773

(9) Commitments and contingencies

• (a) Significant unrecognized commitments

• (i) The Group’s unrecognized contractual commitments were as follows:

Sale of perpetual use rights of columbarium niches Columbarium improvement contracts Columbarium construction contracts Acquisition of land and properties Sales of land and properties Construction project contracts	December 31, 2020 $ 268,876 23,677 12,445 67,160 1,233,187 28,405,982	December 31, 2019 183,065 23,382 - 124,771 1,066,535 24,324,551

As of December 31, 2020 and 2019, the refundable promissory notes for the aforementioned project contracts amounted to $4,370,140 thousand and $4,266,542 thousand, respectively.

(Continued)

198

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (ii) As of December 31, 2020, details on the co-development contracts entered into with landowners were as follows:

Forms of co-development Name of construction project

Co-developments with landowners Chengde Road Project and Xiyuan Road Project

(iii) As of December 31, 2020, details on the significant operating agreement are as follows:

Owner Item Agreement price Terms of the agreement Nantou Operation entrusted by Royalties totaling $32,680 January 2018 to December County Nantou funeral parlor thousand in three-year 2020 Government installment

• (iv) As of December 31, 2020 and 2019, the guarantee provided by companies in the same industry for the Group’s construction contracts amounted to $4,253,923 thousand and $4,572,627 thousand, respectively.

• (v) As of December 31, 2020 and 2019, the Group’s bank guarantee in construction amounted to $3,359,371 thousand and $3,415,016 thousand.

• (vi) A board resolution was passed by the Group on November 27, 2019 approving that the company submits a bid to purchase 113 parcels of land with no. 1324 etc. located in Xiafu Section, South Section of Xiaowan, Linkou District, New Taipei City and buildings thereon auctioned by Taiwan Financial Asset Services Co., Ltd. On November 27, 2019, the Group deposited a guarantee bond of $341,057 thousand and won the bid on the same day with the tender price of $1,856,470 thousand, which was reduced by the amount of the aforementioned guarantee bond after the New Taipei District Court commenced the follow-up procedures. As of December 31, 2020, some parcels, amounting to $62,891, were subject to long-term occupation with right of first refusal owned by the occupants prior to transfer of ownership; except for that, the ownership of the rest parcels have been transferred. Besides, the deposit on the unconfirmed right of first refusal, amounting to $12,578 thousand, was recognized as other non-current assets.

(b) Joint operation

A joint agreement was entered into between the subsidiary and RexCapital Development Ltd. on August 18, 2020, in order to jointly develop the land located at Xinxing Rd., Banqiao Dist., New Taipei City. In a joint agreement, both parties are jointly bound to share and recognize 50 percent of the assets, liabilities, and profit (loss) relating to the agreement when the obligations therein were performed by both parties.

(Continued)

199

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(c) Contingent liability:

(i) Major disputes over contract performance as of December 31, 2020 are detailed as follows:

Project name Bid for the Construction of the Main Parts of the National Yang-Ming University Hospital Yong Yu Tian Xin	Accounts receivable $ - 24,454	Other receivables - 6,793	Contracts assets	Disputes over contractperformance 1.The subsidiary was a contractor for‚the construction of the main parts of National Yang-Ming University Hospital‛. For reasons not imputable to the subsidiary, the time limit for contract performance was in dispute. On October 16, 2014, Yang-Ming University issued a letter indicating that it would resort to an administrative sanction. The aforementioned dispute has been settled on October 13, 2020, after which the lawsuit was withdrawn by the client. 2.Due to the aforementioned dispute over the completion period, on September 20, 2016, a lawsuit was filed by the subsidiary with the Ilan District Court to claim a project payment of $126,163 thousand from the owner. The extended completion period was at last resolved to be 195 days, representing an 82.5-day delay. On October 13, 2020, both parties agreed to mediation in which the owner agreed to pay $73,834 thousand for the project, plus the interest on overdue payment of $5,000 thousand, and the civil case was finally withdrawn by the subsidiary. 1.The subsidiary requested the owner to pay the balance of contract price of $24,454 thousand, $4,689 thousand for the additional works, and the promissory note for performance guarantee of $6,793 thousand executed by the owner without authorization. 2.This matter is currently pending before the Taiwan Taipei District Court. The authentication report, conducted by the expert appointed by the court, pointed to an unfavorable conclusion for the subsidiary; however, regarding Rei Ju Company’s claim for the contract price, the aforementioned report failed to present the fair value of the respective construction items. The court has requested an additional authentication for the omitted items. 3.The owner claimed $34,600 thousand as delay penalty (delay for 173 days) and $3,864 thousand for repair expense on construction defects, both of which added up to $38,464 thousand, and requested to offset the total claim against the balance of construction price. 4.The attorney in charge of this case considers the above alleged delay of 29 days (equivalent to penalties of $5,800 thousand) to be comparatively less justifiable under the laws; however, the final result is still subject to the judgment of the court.	Expected loss (Note) 32,000
			- 10,986

(Continued)

200

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Project name Xiang Yu, Twin Towers	Accounts receivable -	Other receivables 11,219	Contracts assets	Disputes over contractperformance 1.The subsidiary undertook a new construction project of Xiang Yu, Twin Towers, and provided performance warranty of $7,479 thousand and bank guarantee of $11,219 thousand. 2.The warranty for this project has expired, yet on November 6, 2017, the owner sent a letter of attestation, alleging that the subsidiary failed to fulfill its warranty against damage for which the owner paid $1,118 thousand on behalf of the subsidiary. However, the owner claimed in the first defense that the expense for the repairs and maintenance expense amounted to $14,287 thousand without providing corroborating information of the alleged expense. The owner claimed that the actual amount spent might be larger. In the absence of any authenticated evidence and authorization, the owner performed the promissory note issued for this project. 3.The subsidiary filed a lawsuit in January 2020 to claim against the owner for return of the warranty bond and the promissory note that has been executed, and the case is currently pending before the Taiwan Taipei District Court. With respect to the claim on repairs and maintenance expense for defects covered by warranty, the counsel pro hac vice advised that the amount shall be subject to the subsequent assessment by the appointed expert. 4.The Based on past court rulings and interpretations, the counsel pro hac vice further deemed that the time limit for the claim for warranty bond shall start to run upon completion of the repair of defects covered by warranty. Accordingly, the attorney in charge of this case considered the claim of $14,958 thousand to be within the time limit. However, the final result is still subject to court ruling.	Expected loss (Note) 2,000
			7,123

(Continued)

201

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Project name Construction Project of Congregate Housing, Fu Cheng Productivity	Accounts receivable -	Other receivables 31,000	Contracts assets	Disputes over contractperformance 1.The owner executed a promissory note issued by the subsidiary as the performance bond without authorization, owing to which the subsidiary claimed against owner for the return of $31,000 thousand, the amount of the promissory note. The subsidiary also requested the balance of the contract price amounting to $29,868 thousand. 2.It has been decided by the Chinese Arbitration Association that the owner shall pay $60,868 thousand and an annual interest at a rate of 5% staring from July 21, 2018. The Subsidiary has, based on the arbitration award, filed a petition for compulsory enforcement with the Taiwan Taichung District Court. 3.The owner filed a petition with the Taiwan Taipei District Court to stay the foregoing compulsory enforcement and was granted by the court per a ruling. On April 6, the subsidiary then filed an interlocutory appeal against said ruling and the appeal, which was dismissed by the Supreme Court. 4.Meanwhile, the owner filed an application to set aside the aforementioned arbitration award in the Taiwan Taipei District Court ruled that the owner shall pay $52,332 thousand. With regard to the reduced amount of $8,535 thousand, the Taiwan High Court abrogated the ruling of the District Court, which was in favor of the subsidiary. However, the owner, in seek of the $9,834 thousand it ruled to pay in the second instance, the owner appealed to the Supreme Court before which the case is still pending. 5.On the other hand, the owner claimed $72,654 thousand against the subsidiary for damage incurred by termination of contract. This case is currently pending before the Taiwan Taichung District Court and the court has entrusted the Tainan City Architects Association with the assessment of the disputed items. 6.With regard to the abovementioned claims, the counsel pro hac vice advised that the owner’s claim was groundless because both parties had mutually agreed to terminate the agreement before completion of the construction project. Nonetheless, the final result is still subject to the court ruling.	Expected loss (Note)
			28,445		- -

(Continued)

202

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Project name The Public Housing Construction Project on An Kang Market Premises East Asia Water	Accounts receivable - -	Other receivables - -	Contracts assets	Disputes over contractperformance 1.The subsidiary requested the owner to agree on an additional performance period of 319.5 days for extension of completion date due to causes not attributable to the subsidiary. 2.Subsequent to mediation, the performance period was recalculated to be 149 days. In July 2019, the special committee advised that the performance period shall be 135 days, which was agreed upon by the Company and the owner, making the balance of the delay 14 days. Subsequently, the Department of Urban Development, with causes not attributable to the subsidiary taken into consideration, approved days uncounted of 175 days and the extended performance period of 222 days, and the two-day delay will be handled pursuant to clause 18(1) of the project contract. 3.In January, the subsidiary applied to the Taipei City Government Procurement Complaints Committee for mediation, requesting the owner to return the $113,448 thousand deducted for the disputed construction delay from the contract sum. 4.The owner alleged that the number of days delayed shall be 109 days, and the delay penalty of $113,448 thousand calculated pursuant to the contract shall be adjusted against the contract sum. 5.In August 2020, both sides agreed to the advice of the Mediation Committee that the contract sum shall be paid after deducting the penalty of $26,748 thousand incurred by the 28-day delay. As of December 31, 2020, the contract price has been fully collected. 1.On August 28th, the subsidiary filed a civil lawsuit with the Taipei District Court, requesting the owner to pay the balance of construction price of $120,520 thousand and to return the certificate of deposit of $49,000 thousand provided as performance bond. 2.On the other hand, on December 28, 2020, the owner filed a civil lawsuit with the Taipei District Court seeking a delay penalty of $196,000 thousand. The owner also alleged that the subsidiary shall pay $41,968 thousand after deducting the balance of the contract sum and the amount of the aforementioned certificate of deposit. The case has been awaiting a court session.	Expected loss (Note) - 20,500
			- 88,743

(Continued)

203

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Project name Bao Hong Jing Mei Building Construction Project、Bao Hong Da Bai Congregate Housing Construction Construction Project of Jing Qin Building, National Taipei University of Technology Shalun Smart Green Energy Science City-Zone C Total	Accounts receivable 7,034 - 41,946 $ 73,434	Other receivables - - - 49,012	Contracts assets	Contracts assets	Disputes over contractperformance	Expected loss (Note) 3,600 12,700 49,829 70,800
	$			29,169 39,523 41,391

Note: For the construction agreements entered into by and between the subsidiary and the owner(s), the owner’s committed consideration might vary due to the above-mentioned disputes over contract performance. The subsidiary has estimated the variations of the amount of consideration and has adjusted said amount in the income statement during the period that the consideration is varied.

(Continued)

204

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

• (ii) As of December 31, 2020, the cases wherein the subsidiary requested the owner to increase the number of projects or additional works are as follows:

Project name	Request for additional items
Bid for Construction of the Main Parts of National Yang-Ming University Hospital	1.Requested additional project contracts and disputed balance of contract price amounted to $69,760 thousand. 2.This case had been tried by Taiwan Yilan District and was subsequently withdrawn by the subsidiary.
New project of Yong Yu Tian Xin	1.The subsidiary requested $4,688 thousand for payment of additional items and other payment in dispute. 2.The case is currently pending before the Taiwan Taipei District Court; the court has entrusted the Taiwan Structural Engineers Association to conduct a supplementary assessment. Since the reasonable value of some disputed items were not indicated in the assessment, the court has requested the expert to provide supplemental explanation and has been awaiting the expert’s reply. 3.On December 22, 2020, both sides agreed to suspend the proceedings of this case until the ruling of another case in session has been handed down.
Basketball Gymnasium, Taipei Municipal He Ping Elementary School New Construction Project	1.The subsidiary requested $64,865 thousand for payment of additional items and other payment in dispute. 2.The case is currently pending before the Taiwan Taipei District Court. The court has entrusted the Taiwan Professional Civil Engineers Association to conduct expert assessment, and the result thereof is pending.
Phase I Construction Project of Renovation of the National Sports Training Center	1.The subsidiary requested $68,821 thousand for payment of additional items and other payment in dispute. 2.On February 2, 2021, the subsidiary has settled with the owner, wherein the owner agreed to pay the contract price of $35,232 thousand, plus the interest of $5,768 thousand.
The Public Housing Construction Project on An Kang Market Premises	1.The subsidiary requested $47,653 thousand for the expenses arising from the extension of the performance period. 2.The subsidiary has applied for mediation with the Complaints Review Committee for Taipei City Government Procurement and the case is currently in the process of mediation.
New Taipei City Sanying Civil Sports Center and New Taipei City Municipal Linkou Junior High School Badminton Hall	1.The subsidiary requested $58,012 thousand for payment of additional items and other payment in dispute. 2.The subsidiary has applied for mediation with the Complaints Review Committee for New Taipei City Government Procurement and the case is currently in the process of mediation.
Office Building Construction of Taiwan Power Company, Taipei North Branch	1.The subsidiary requested $6,739 thousand for the project items and expenses arising from the items under acceptance. 2.The subsidiary has applied for mediation with the Complaints Review Committee for Public Construction Commission, Executive Yuan and the case is currently in the process of mediation.

(Continued)

205

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

As of December 31, 2020, in the payment dispute between the subsidiary and the contractors, the total amount of lawsuits filed by the subsidiary against the contractors was $50,603 thousand, and the total amount of lawsuits filed by the contractors against the subsidiary was $166,009 thousand. The aforementioned cases are now pending before the courts. According to the evaluation of the counsel pro hac vice, the results are unpredictable since the cases involve numerous projects and the claims are miscellaneous and complicated.

(10) Losses due to major disasters: None.

(11) Significant subsequent events:

The subsidiary, pursuant to resolution of the Board of Directors reached on March 22, 2021, will rescind the contract previously entered into with the Global Funeral Services Co., Ltd. for the sale and purchase of real estate located at the Zhongshan District, Taipei City.

(12) Other:

The summary of employee benefits, depreciation, and amortization, by function, was as follows:

By function By item	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31	For the Years Ended December 31
	2020			2019
	Operating cost	Operating Expense	Total	Operating cost	Operating Expense	Total
Employee benefits
Salary	538,485	191,652	730,137	377,811	182,266	560,077
Labor and health insurance	36,988	13,168	50,156	22,426	9,372	31,798
Pension expense	22,303	6,235	28,538	14,972	4,036	19,008
Others employee benefits expense	20,703	22,313	43,016	11,833	15,203	27,036
Depreciation	38,793	15,957	54,750	33,001	18,448	51,449
Amortization expense	5,672	2,543	8,215	3,721	2,870	6,591

(Continued)

206

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(13) Other disclosures

• (a) Information on significant transactions

The following is the information on significant transactions required by the ‚Regulations Governing the Preparation of Financial Reports by Securities Issuers‛ for the Group for the as of December 31, 2020:

• (i) Loans to other parties:

(In Thousands of New Taiwan Dollars)

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral	Collateral	Individual funding loan limits	Maximum limit of fund financing
													Item	Value
0	The Company	Sin Wei Jie Construction Co.,Ltd.	Other Payables- Other	Yes	300,000	-	(Note 1)	10%	2 (Note 5)	-	Operating capital	-	None	-	926,149 (Note 3)	3,704,596 (Note 3)
0	The Company	Everwin Investment Co,Ltd.	Other Payables- Other	Yes	880,000	-	(Note 2)	1.5%	2 (Note 5)	-	Significant investment projects	-	None	-	926,149 (Note 3)	3,704,596 (Note 3)
1	Rei Ju Construction Co., Ltd.	Sheng Ji Interior Decoration Co.,Ltd.	-	Yes	30,000	30,000	-	2.50%	2 (Note 5)	-	Operating capital	-	None	-	144,907 (Note 4)	579,628 (Note 4)
1	Rei Ju Construction Co.,Ltd.	Rei Cheng Construction Co.,Ltd.	-	Yes	30,000	30,000	-	2.50%	2 (Note 5)	-	Operating capital	-	None	-	144,907 (Note 4)	579,628 (Note 4)
1	Rei Ju Construction Co.,Ltd.	ReBio Green Innovation Co.,Ltd.	-	Yes	30,000	30,000	-	2.50%	2 (Note 5)	-	Operating capital	-	None	-	144,907 (Note 4)	579,628 (Note 4)
1	Rei Ju Construction Co., Ltd.	ReiYu Green Energy Technology Co.,Ltd.	-	Yes	30,000	30,000	-	2.25%	2 (Note 5)	-	Operating capital	-	None	-	144,907 (Note 4)	579,628 (Note 4)
1	Rei Ju Construction Co.,Ltd.	Ryan Developmen t Corp.	Other Payables- Other	Yes	136,000	136,000	60,000	2.25%	2 (Note 5)	-	Operating capital	-	None	-	144,907 (Note 4)	579,628 (Note 4)
2	Long Hui Development Co.,Ltd.	North Bay Recreation Co.,Ltd.	-	Yes	45,000	45,000	-	2%	2 (Note 5)	-	Short-term financing	-	None	-	57,563 (Note 4)	230,252 (Note 4)

• Note 1: The Company has recovered the principal amount of $200,000 thousand and the interest of $19,791 thousand on December 31, 2020.

• Note 2: The Company has recovered the principal amount of $880,000 thousand on November 26, 2020 and the interest of $9,782 thousand.

• Note 3: The total amount of loans provided by the Company to other parties and to a single party shall not exceed 40% and 10% of the Company’s net worth recognized in its latest financial statements, respectively.

• Note 4: The total amount of loans provided by this company to other parties and to a single party shall not exceed 40% and 10% of this company’s net worth recognized in its latest financial statements, respectively.

• Note 5: Financing purposes:

• 1.Trading counterparty

• 2.Entities with short-term financing needs

• Note 6: The aforementioned transactions have been eliminated when compiling the consolidated financial statements.

(Continued)

207

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during theperiod	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationshi p with the Company
0	The Company	Long Bao Co.,Ltd.	2 (Note 6)	5,556,894 (Note 1)	100,000	-	-	-	- %	11,113,788 (Note 1)	Y	N	N
0	The Company	Everwin Investment Co,Ltd.	2 (Note 6)	5,556,894 (Note 1)	1,100,000	1,100,000	818,000	-	11.88%	11,113,788 (Note 1)	Y	N	N
1	Everwin Investment Co,Ltd.	The Company	3 (Note 6)	5,534,473 (Note 2)	2,600,000	2,600,000	-	-	93.96%	5,534,473 (Note 2)	N	Y	N
2	Rei Ju Construction Co.,Ltd.	Rei Cheng Construction Co.,Ltd.	2 (Note 6)	6,153,638 (Note 3)	692,800	464,630	-	-	32.06%	12,307,276 (Note 3)	Y	N	N
2	Rei Ju Construction Co., Ltd.	ReiYu Green Energy Technology Co.,Ltd.	2 (Note 6)	6,153,638 (Note 3)	1,948	1,948	-	-	0.13%	12,307,276 (Note 3)	Y	N	N
2	Rei Ju Construction Co.,Ltd.	Ryan Development Corp.	2 (Note 6)	4,347,207 (Note 3)	725,000	725,000	497,701	-	50.03%	7,245,345 (Note 3)	Y	N	N
3	ReiYu Green Energy Technology Co.,Ltd.	Rei Ju Construction Co., Ltd	3 (Note 6)	7,000,000 (Note 4)	1,346,622	24,557	-	-	30.51%	10,500,000 (Note 4)	N	Y	N
4	Rei Cheng Construction Co.,Ltd.	Rei Ju Construction Co.,Ltd.	3 (Note 6)	5,950,000 (Note 5)	3,955,050	3,955,050	-	-	7,032.25%	8,925,000 (Note 5)	N	Y	N

• Note 1: The total amount of guarantees and endorsements provided by the Company for external parties shall not exceed 120% of its net worth for the current period , and the guarantees and endorsements for a single entity shall not exceed 60% of its net worth for the period.

• Note 2: Limit on guarantees and endorsements provided by Everwin Investment Co, Ltd.: The total amount provided for a single subsidiary, whose ordinary shares of more than 90% are directly or indirectly held by the Company, shall not exceed 40% of the Company’s current net value. As for other entities, the total amount provided for any single one of them shall not exceed 25% of the Company’s current net value. For entity holding 100% ordinary share of Everwin Investment Co, Ltd. or companies of which Everwin Investment Co, Ltd. holds 100% ordinary shares, the limit on guarantees and endorsements provided for any single one of them shall not exceed 200% of the current net value of the Company.

• Note 3: The limit on guarantees and endorsements of Rei Ju Construction Co., Ltd.: The total amount provided for external construction projects and a single construction project shall not exceed 15 times and 7.5 times of the total value of the Company’s paid-in capital, respectively. The total amount of guarantees and endorsements shall not exceed 5 times of the net value of the Company, and the guarantees and endorsements for a single entity shall not exceed 3 times of the current net value of the Company.

• Note 4: The limit on guarantees and endorsements provided by ReiYu Green Energy Technology Co., Ltd.: The total amount guarantees for external construction projects and for the construction projects of a single entity shall not exceed 150 times and 100 times of the total value of the paid-in capital, respectively.

• Note 5: The limit on guarantees and endorsements provided by Rei Cheng Construction Co., Ltd.: The total amount guarantees for external construction projects and for the construction projects of a single entity shall not exceed 150 times and 100 times of the total value of the paid-in capital, respectively.

• Note 6: Seven categories of relationship with the endorser/guarantor:

• Trading counterparty

• The Company directly or indirectly holds more than 50% voting right.

• Other companies directly or indirectly hold more than 50% voting right of the Company.

• The Company directly or indirectly holds more than 90% voting right.

• A company that is mutually protected under contractual requirements based on the needs of the contractor.

• A company that is endorsed by all the contributing shareholders in accordance with their shareholding ratio due to joint investment relationship.

• Under the Consumer Protection Act, performance guarantees for presale contracts for companies in the same industry.

• Note 7: The aforementioned transactions have been eliminated when compiling the consolidated financial statements.

(Continued)

208

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of Shares and New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Endingbalance	Endingbalance	Endingbalance		Highest Percentage of ownership (%)	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Stock:
〃	Ta Chen Stainless Pipe Co., Ltd.	－	Current financial assets at fair value through profit or loss	15,722	492,113	0.95%	492,113	1.01%	Partial pledge
〃	Taisun Enterprise Co.,Ltd.	－	〃	123,030	3,395,628	24.61%	3,395,628	24.61%	Partial pledge
〃	TatungCo.	-	〃	1,500	39,675	0.06%	39,675	0.06%
〃	Right Way Industrial Co., Ltd.	－	〃	4,813	51,977	2.95%	51,977	3.91%
〃	Fund:
〃	Emerging Market Bond Fund at maturity	－	〃	200	2,247	- %	2,247	- %
Everwin Investment Co, Ltd.	Stock:
〃	Ta Chen Stainless Pipe Co.,Ltd.	－	〃	9,541	298,621	0.58%	298,621	0.58%	Partial pledge
〃	Right Way Industrial Co., Ltd.	－	〃	3,385	36,558	2.07%	36,558	2.07%
〃	Taisun Enterprise Co.,Ltd.	－	〃	31,434	867,578	6.29%	867,578	6.29%	Partial pledge
	Corporate Bond:
〃	PKFOUN bond (US Dollar)	－	〃	-	1,919	- %	1,919	- %
Rei Ju Construction Co., Ltd.	Fund:
〃	Yuanta Asia Pacific (ex-Japan) Investment Grade Government Bond Index Fund	－	〃	500	4,822	- %	4,822	- %	Pledged as colletral
〃	Invesco Quality Fixed Maturity Emerging Market Bonds 2023	－	〃	16	4,656	- %	4,656	- %
The Company	Stock:
〃	The Reputation International Construction Co., Ltd.	－	Non-current financial assets at FVOCI	9,057	181,689	9.06%	181,689	9.06%	Note 1
〃	M Radio Broadcasting CO.,Ltd.	－	〃	1,009	4,191	12.32%	4,191	12.32%	〃
〃	Widedoctor (International) Enterprise Co., Ltd.	－	〃	538	4,255	19.92%	4,255	19.92%	〃
〃	J-Metrics Technology Co., Ltd.	－	〃	600	10,085	2.22%	10,085	2.22%	〃
〃	Chia Ya Investment Co., Ltd.	－	〃	1,200	70,077	8.00%	70,077	8.00%	〃
〃	New Image Medical Co.,Ltd.	－	〃	1,283	19,761	4.75%	19,761	4.75%	〃
〃	Chang Hong Energy Technology Co., Ltd.	－	〃	3,982	26,556	3.24%	26,556	3.24%	〃
〃	You Long Construction Development Co.,Ltd.	Substanti related party	v 〃	2,400	75,468	9.23%	75,468	9.23%	〃
〃	Grand Green EnergyCo.,Ltd.	－	〃	560	6,664	1.35%	6,664	1.35%	Note 3

(Continued)

209

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title		Endingbalance	Endingbalance		Highest Percentage of ownership (%)	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
Everwin Investment Co, Ltd.	Stock:
〃	J-Metrics Technology Co., Ltd	－	Non-current financial assets at FVOCI	600	10,085	2.22%	10,085	2.22%	Note 1
〃	Linkou Recreation Co., Ltd.	—	〃	-	14,425	- %	14,425	- %	〃
〃	Grand Green EnergyCo.,Ltd.	－	〃	940	11,186	2.27%	11,186	2.27%	Note 3
Rei Ju Construction Co., Ltd.	Stock:
〃	Long Bon International Co., Ltd.	Ultimate parent	〃	36,609	525,333	9.27%	525,333	9.27%	Note 2
〃	Chia Ya Investment Co., Ltd.	－	〃	300	17,519	2.00%	17,519	2.00%	Note 1
〃	New Image Medical Co.,Ltd.	－	〃	321	4,943	1.19%	4,943	1.19%	〃
〃	Taiwan Semiconductor Manufacturing Co.,Ltd.	－	〃	43	22,790	- %	22,790	- %
〃	Preferrec share of Tan Shi Construction Co., Ltd.	－	Non-current financial assets at amortized cost	3,000	79,980	100.00%	79,980	100.00%
North Bay Recreation Co., Ltd.	Preferred Share of Tashee Recreation Co., Ltd.	－	〃	-	20	- %	20	- %
〃	Preferred Share of Horseshoe International Enterprise Co., Ltd.	－	〃	42	624	0.01%	624	0.01%

Note 1: The stock is not publicly traded and quoted and was therefore presented according to the appraisal report as a reference.

Note 2: Pursuant to the clauses of the loan agreement, document related to the exercise of pledge of 35,680 thousand shares have been signed to the financial institution.

Note 3: The emerging market stock is presented in its market value on December 31, 2020.

• (iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:

the capital stock:	the capital stock:	the capital stock:	the capital stock:	the capital stock:
					(In Thousands of Shares and New Taiwan Dollars)
Name of company	Category and name of security	Account name	Name of counter-part y	Relationship with the company	BeginningBalance		Purchases		Sales				EndingBalance
					Shares	Amount	Shares	Amount	Shares	Price	Cost	Gain (loss) on disposal	Shares	Amount
The Company	Taisun Enterprise Co., Ltd.	Current financial assets at fair value through profit or loss	Non-related party	-	90,909	2,009,089	32,121	749,454 (Note 2)	-	-	-	-	123,030	3,395,628
The Company	Long Fu Real Estate Development Co.,Ltd.	Investments accounted for using equity method	-	Subsidiary	100	818	69,900	694,017 (Note 1)	-	-	-	-	70,000	694,835
Everwin Investment Co, Ltd.	Long Hui Development Co., Ltd.	Investments accounted for using equity method	-	Subsidiary	-	-	56,000	575,630 (Note 1)	-	-	-	-	56,000	575,630
Long Hui Developmen t Co., Ltd.	North Bay Recreation Co., Ltd.	Investments accounted for using equity method	Non-related party	Subsidiary	-	-	7,391	461,748 (Note 1)	-	-	-	-	7,391	461,748

Note 1: Including recognized profit or loss of equity-accounted investment, increase or decrease in capital, and adjustments to capital surplus.

Note 2: The purchase amounts for this period includes the valuation adjustments relating to financial assets recognized at fair value.

(Continued)

210

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter-part y	Relationship with the Company	If the counter-party is a related party, disclose theprevious transfer information	If the counter-party is a related party, disclose theprevious transfer information	If the counter-party is a related party, disclose theprevious transfer information	If the counter-party is a related party, disclose theprevious transfer information	References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationship with the Company	Date of transfer	Amount
Everwin Investment Co., Ltd.	Land and building	November 27, 2019	1,856,470	1,806,157	Dong Hua Recreation Co., Ltd.and 9persons	Non-related party	-	-	-	-	Court auction price	For future Operating needs	-
Long Fu Real Estate Development Co.,Ltd.	Land	March 25, 2020	475,482	475,482	5 persons	Non-related party	-	-	-	-	Appraisal report	For future Operating needs	-
Re Ju Construction Co., Ltd.	Land and building	December 21, 2020	921,121	230,280 (Note)	Globa Funera Services Co. Ltd.	l l , Relatedparty	Sin Cai International Development Co.,Ltd.	Non-related party	April 28, 2011	-	Appraisal report	For future Operating needs	-

Note: On March 22, 2021, the subsidiary rescinded a sale and purchase contract previously entered into with the Global Funeral Services Co., Ltd. due to capital adjustment.

• (vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None

• (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None

• (viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None

• (ix) Trading in derivative instruments: None

• (x) Business relationships and significant intercompany transactions:

(In Thousands of New Taiwan Dollars)

				(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
No.	Name of company	Name of counter-party	Nature of relationship	Intercompanytransactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
1	Rei Ju Construction Co., Ltd.	Ryan Development Corp.	1	Other receivables	60,522	-	0.25%
2	Sheng Ji Interior Decoration Co.,Ltd.	Rei Ju Construction Co., Ltd.	2	Construction revenue	64,807	Monthly billing claim	0.60%
3	Everwin Investment Co., Ltd.	Bao Hui Development Co.,Ltd.	1	Rental revenue	23,815	Monthly billing claim	0.22%

Note 1: Numbers are filled in as follows:

1. ‚0‛ represents the parent company.

2. Subsidiaries are numbered from ‚1‛.

Note 2: Categories of relationship with counterparty are as below:

1. Parent to subsidiary

2. Subsidiary to parent

Note 3: The aforementioned transactions have been eliminated in the consolidated financial statements.

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2020 (excluding information on investees in Mainland China):

(In Thousands of Shares and New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original inves	tment amount	Balance a	s of December 31	,2020	Highest Percentage of wnership	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31,2020	December 31,2019	Shares (thousands)	Percentage of wnership	Carrying value
Long Bon International Co., Ltd.	Everwin Investment Co., Ltd.	Taiwan	Investment	1	1	, 244,025	100.00%	2,798,689	100.00%	178,204	178,204	Note
〃	LongBao Co., Ltd.	Taiwan	Funeral Service			60,000	100.00%	615,904	100.00%	14,548	14,548	〃
〃	Long Jee Holding(s) Pte Ltd	Singapore	Property investment and development			17,979	96.89%	10,075	96.89%	-	-	〃
〃	Rei Ju Construction Co.,Ltd.	Taiwan	Architecture andcivil engineering	1		73,928	90.10%	796,504	90.10%	310,430	276,309	〃
〃	Long Fu Real Estate Development Co., Ltd.	Taiwan	Funeral Service			70,000	100.00%	694,835	100.00%	(4,983)	(4,983)	〃

(Continued)

211

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Name of investor	Name of investee	Location	Main businesses and products	Original inve	stment amount	Balance a	s of December 31	,2020	Highest Percentage of wnership	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31,2020	December 31,2019	Shares (thousands)	Percentage of wnership	Carrying value
Long Bon International Co., Ltd.	Long De International Development Co., Ltd.	Taiwan	Investments		-	100	100.00%	975	100.00%	(25)	(25)	Note
Everwin Investment Co, Ltd.	Rei Ju Construction Co., Ltd.	Taiwan	Architecture andcivil engineering	-		-	- %	-	15.02%	310,430	Exempt from disclosure	〃
〃	Long Hui Development Co., Ltd.	Taiwan	Investments		-	56,000	100.00%	575,630	100.00%	(1,327)	〃	〃
〃	Bao Hui Development Co., Ltd.	Taiwan	Exercise facility and amenity		-	3,000	100.00%	31,294	100.00%	1,294	〃	〃
Long Fu Real Estate Development Co., Ltd.	San Jhih Cih An Yuan Ltd.	Taiwan	Funeral Service		-	-	100.00%	(42)	100.00%	(61)	〃	〃
Long Hui Development Co., Ltd.	North Bay Recreation Co., Ltd.	Taiwan	Exercise facility and amenity		-	7,391	82.13%	461,748	82.13%	(28,879)	〃	〃
Rei Ju Construction Co., Ltd.	Rei Cheng Construction Co., Ltd.	Taiwan	Architecture andcivil engineering			5,950	100.00%	66,742	100.00%	14,112	〃	〃
〃	ReiYu Green Energy TechnologyCo.,Ltd.	Taiwan	Architecture andcivil engineering			7,000	100.00%	80,501	100.00%	8,281	〃	〃
〃	Ryan Development Corp.	Taiwan	Property investment and development			25,000	100.00%	212,862	100.00%	(13,667)	〃	〃
〃	Rei Jhao Engineer Ltd.	Taiwan	Architecture andcivil engineering		-	99	19.80%	1,064	70.00%	373	〃	Associate
〃	Uhome Marketing Co.,Ltd.	Taiwan	Integrated internet marketin	-		-	- %	-	23.08%	(693)	〃	〃
〃	Rei Ying Construction Co., Ltd.	Taiwan	Property investment and development		-	390	39.00%	2,765	39.00%	(2,910)	〃	〃
ReiYu Green Energy Technology Co., Ltd.	Sheng Ji Interior Decoration Co., Ltd.	Taiwan	Interior Decoration			2,000	100.00%	25,593	100.00%	127	〃	Note
〃	ReBio Green Innovation Co.,Ltd.	Taiwan	Environmental Engineering			200	100.00%	255	100.00%	(539)	〃	〃

Note: The aforementioned transactions have been eliminated when compiling the consolidated financial statements.

• (c) Information on investment in Mainland China:

• (i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars and U.S. Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January1,2019	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31,2020	Net income (losses) of the investee	Percentage of ownership	Highest percentage of ownership	Investment income (losses)	Book value	Accumu-lated remittance of earnings in currentperiod
					Outflow	Inflow
Xiamen Rei Ju Construction Engineer Co.	Construction management consulting services	37,024 USD1,300	(Note 1)	33,037 USD1,160	-	-	33,037 USD1,160	(7,189)	89.23%	89.23%	(6,415) (Note 2)	5,021	-

Note 1: Direct investment in Mainland China.

Note 2: The recognition of investment gains and losses was based on the financial statements audited by the parent’s certified public accountants.

Note 3: The aforementioned transactions have been eliminated when compiling the consolidated financial statements.

(ii) Limitation on investment in Mainland China:

Company Name	Accumulated Investment in Mainland China as of December31,2020	Investment Amounts Authorized by Investment Commission,MOEA	Upper Limit on Investment
Rei Ju Construction Co., Ltd.	33,037 (USD 1,160 )	33,037 (USD 1,160 )	869,441 (Note 1)

Note 1: The limit is calculated as follows: net asset value of subsidiary×60%=NTD1,449,069 thousand×60%=NTD869,441 thousand.

• (iii) Significant transactions: None.

(Continued)

212

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

• (d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Fortune Base Development Co., Ltd.	50,940,340	12.90%
Global Funeral Services Co., Ltd.	40,396,080	10.23%
Ontario Investment Co., Ltd.	37,933,600	9.61%
Re Ju Construction Co., Ltd.	36,608,592	9.27%
Yi Fong Investment Co., Ltd.	34,542,100	8.75%

(14) Segment information

• (a) General information

There are four reportable segments: construction, investment, funeral, and recreation. The construction segment engages in construction projects; the investment segment engages in investment in financial instruments; the funeral department engages in funeral services and others; recreation segment provides sports facilities.

The Group’s reported segments consist of strategic business units which provide different products and services. Since each strategic business unit requires different technology and marketing strategies, it must be administered separately. Most of the business units were acquired, and the original management teams are still operating.

• (b) Reportable segment profit or loss, segment assets, segment liabilities, and their measurement and reconciliations

The Group uses the internal management report that the chief operating decision maker reviews as the basis to determine resource allocation and make a performance evaluation. The internal management report includes profit before taxation, but not including any extraordinary activity and foreign exchange gain or losses because taxation, extraordinary activity, and foreign exchange gain or losses are managed on a group basis, and hence they are not able to be allocated to each reportable segment. In addition, not all reportable segments include depreciation and amortization of significant non-cash items. The reportable amount is similar to that of the report used by the chief operating decision maker.

(Continued)

213

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group’s segment financial information is as follows:

Revenue: Revenue from external customers Intersegment revenue Total revenues Interest income Finance costs Depreciation and amortization Share of profit (loss) of associates and joint ventures accounted for using equity method Profit or loss of reportable segment	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020	For the Year Ended December 31, 2020
	Construction business Construction segment Property development segment $ 10,526,061 18,837 75,592 25,490		Investment segment - -	Funeral services segment 148,038 -	Recreation segment
	Construction segment $ 10,526,061 75,592
	$ 10,601,653	44,327	-	148,038
	5,176 22,477 33,033 - $ 380,361	32,411 80,507 8,342 - (10,696)	473 14,792 - 456,891 1,309,738	151 - 15,197 - 15,935

Revenue: Revenue from external customers Intersegment revenue Total revenues Interest income Finance costs Depreciation and amortization Share of profit (loss) of associates and joint ventures accounted for using equity method Profit or loss of reportable segment	For the Year Ended December 31, 2019 Construction business Construction segment Property development segment Investment segment Funeral services segment Reconciliation and elimination Total $ 9,170,550 16,324 - 108,739 - 9,295,613 496 1,489 - - (1,985) -	For the Year Ended December 31, 2019 Construction business Construction segment Property development segment Investment segment Funeral services segment Reconciliation and elimination Total $ 9,170,550 16,324 - 108,739 - 9,295,613 496 1,489 - - (1,985) -	For the Year Ended December 31, 2019 Construction business Construction segment Property development segment Investment segment Funeral services segment Reconciliation and elimination Total $ 9,170,550 16,324 - 108,739 - 9,295,613 496 1,489 - - (1,985) -	For the Year Ended December 31, 2019 Construction business Construction segment Property development segment Investment segment Funeral services segment Reconciliation and elimination Total $ 9,170,550 16,324 - 108,739 - 9,295,613 496 1,489 - - (1,985) -
	Construction business Construction segment Property development segment $ 9,170,550 16,324 496 1,489		Investment segment - -	Funeral services segment
	Construction segment $ 9,170,550 496
	$ 9,171,046	17,813	-	108,739 (1,985) 9,295,613
	2,213 24,014 27,188 - $ 209,024	37,543 77,402 16,877 - (18,017)	2,634 6,596 - 136,628 1,055,608	87 (1,230) 41,247 343 (1,230) 107,125 13,975 - 58,040 - (139,426) (2,798) 14,610 (149,474) 1,111,751

Note: Reconciliation and elimination are mainly adjustments to relevant consolidated write-offs in the preparation of the consolidated financial statements.

(Continued)

214

LONG BON INTERNATIONAL CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Geographic information

In presenting information on the basis of geography, segment revenue is based on the geographical location of customers and segment assets are based on the geographical location of the assets.

Geographical information Revenue from external customers: Taiwan China Total Non-current assets: Taiwan China Total	For the Years Ended December 31 2020 2019 $ 10,766,949 9,285,304 9,375 10,309	For the Years Ended December 31 2020 2019 $ 10,766,949 9,285,304 9,375 10,309
	2020 $ 10,766,949 9,375
	$ 10,776,324	9,295,613
	December 31, 2020 $ 7,502,533 1,020	December 31, 2019 1,651,516 1,335
	$ 7,503,553	1,652,851

Non-current assets include investments accounted for using equity method, property, plant and equipment, right-of-use assets, investment property, intangible assets, and other assets, not including financial instruments, deferred tax assets, pension fund assets, and rights arising from an insurance contract (non-current).

(d) Major customers:

Client A of construction segment Client B of construction segment Client C of construction segment	For the Years Ended December 31 2020 2019 $ 1,266,771 1,304,412 457,002 989,903 1,098,139 611,719	For the Years Ended December 31 2020 2019 $ 1,266,771 1,304,412 457,002 989,903 1,098,139 611,719
	2020 $ 1,266,771 457,002 1,098,139
	$ 2,821,912	2,906,034

215

Stock Code:2514

LONG BON INTERNATIONAL CO., LTD.

Parent Company Only Financial Statements

With Independent Auditors ’ Report For the Years Ended December 31, 2020 and 2019

Address :9F., No. 50, Sec. 1, Zhongxiao W. Rd., Zhongzheng Dist., Taipei City Telephone :(02)2375-6595

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

216

Independent Auditors ’ Report

To the Board of Directors of Long Bon International Co., Ltd.:

Opinion

We have audited the financial statements of Long Bon International Co., Ltd.(‚the Company‛), which comprise the balance sheets as of December 31, 2020 and 2019, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

1. Acquisition, disposal and evaluation of financial assets

Refer to Note 4(f) ‚Financial instruments‛, 6(b) and (c) ‚ Financial Assets‛ to the parent company only financial statements for the accounting policy and the details of the information.

217

Description of the key audit matter

The carrying amounts of ‛financial assets at fair value through profit or loss‛and ‛financial assets at fair value through other comprehensive income‛ constitute 33% of total assets of the Company, which is significant for the financial statements as a whole. In addition, the Company’s recognized financial assets were evaluated at fair value. As for equity investment in unlisted companies, the fair value was obtained based on valuation technique or the quotation of the counterparty, and was recognized as "financial assets at fair value through other comprehensive income". Since the valuation result of financial assets involves the financial restriction clause of financial institutions loan agreement for financing, it further impacts working capital management. Therefore, the acquisition, disposal of financial assets and the testing of end of period valuation were determined to be a critical matter in our audit ofCompany’ss consolidated financial reports.

How the matter was addressed in our audit

Our main audit procedures for the above key audit matter include testing of the relevant control of acquisition, disposal, valuation, and accounting in the investment cycle; sampling the acquisition and disposal of financial assets, and checking relevant documents; reviewing as well as adjusting the PSI table and general ledger entries; obtaining financial institution confirmation and looking into the TDCC passbook provided by our client; checking the closing market prices of each financial asset on the balance sheet date on the TWSE website, with a view to assess the appropriateness of the amounts recognized at the end of the year. We checked passbooks and bank statements in order to assess the reasonableness of the cash flow from the transaction of financial assets. In addition, for the assessment of financial assets at fair value through other comprehensive income, we obtained from management the appraisal reports about the fair values of the underlying financial assets which were appraised by external experts. Moreover, for the valuation of financial assets at fair value through other comprehensive income in unlisted companies, we conducted a stock share count at the end of the year and obtained bank confirmations, in order to ascertain their existence.

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

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

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Company’ s financial reporting process.

218

Auditors ’ Responsibilities for the Audit of the Parent Company Only Financial Statements

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

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

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

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

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

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

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

6. Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

219

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

The engagement partners on the audit resulting in this independent auditors’ report are Shu-Ying Chang and Mei-Pin Wu.

KPMG

Taipei, Taiwan (Republic of China) March 23, 2021

Notes to Readers

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

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

220

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) LONG BON INTERNATIONAL CO., LTD.

Balance Sheets

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2020 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 976,771 7 1110 Current financial assets at fair value through profit or loss (Note 6(b) and 8) 3,981,640 30 1150 Notes receivable, net (Note 6(n) and 7) 45 - 1170 Accounts receivable, net (Note 6(n) and 7) - - 1200 Other receivables, net (Note 6(c), (q), 7 and 13) - - 1320 Inventories (for construction business), net (Note 6(d), 7 and 8) 1,851,108 14 1476 Other current financial assets (Note 8) - - 1479 Other current assets (Note 7) 5,429 - 6,814,993 51 Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Note 6(c) and 8) 398,746 3 1550 Investments accounted for using equity method, net (Note 6(e), (f) and 7) 4,916,982 37 1600 Property, plant and equipment 18,828 - 1760 Investment property, net (Note 6(g), 7 and 8) 702,581 5 1780 Intangible assets 135 - 1755 Right-of-use assets (Note 7) 1,322 - 1840 Deferred tax assets (Note 6(k)) 6,490 - 1980 Other non-current financial assets (Note 8) 567,733 4 1990 Other non-current assets, others (Note 7) 1,073 - 6,613,890 49 Total assets $ 13,428,883 100	December 31, 2020 Assets Amount % Current assets: 1100 Cash and cash equivalents (Note 6(a)) $ 976,771 7 1110 Current financial assets at fair value through profit or loss (Note 6(b) and 8) 3,981,640 30 1150 Notes receivable, net (Note 6(n) and 7) 45 - 1170 Accounts receivable, net (Note 6(n) and 7) - - 1200 Other receivables, net (Note 6(c), (q), 7 and 13) - - 1320 Inventories (for construction business), net (Note 6(d), 7 and 8) 1,851,108 14 1476 Other current financial assets (Note 8) - - 1479 Other current assets (Note 7) 5,429 - 6,814,993 51 Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (Note 6(c) and 8) 398,746 3 1550 Investments accounted for using equity method, net (Note 6(e), (f) and 7) 4,916,982 37 1600 Property, plant and equipment 18,828 - 1760 Investment property, net (Note 6(g), 7 and 8) 702,581 5 1780 Intangible assets 135 - 1755 Right-of-use assets (Note 7) 1,322 - 1840 Deferred tax assets (Note 6(k)) 6,490 - 1980 Other non-current financial assets (Note 8) 567,733 4 1990 Other non-current assets, others (Note 7) 1,073 - 6,613,890 49 Total assets $ 13,428,883 100	December 31, 2019 Amount % 1,188,749 10 2,584,632 22 73 - 3 - 1,140,811 10 1,760,501 15 190 - 2,732 -
	6,814,993 51	6,677,691 57
	398,746 3 4,916,982 37 18,828 - 702,581 5 135 - 1,322 - 6,490 - 567,733 4 1,073 -	338,014 3 3,727,030 32 21,572 - 443,753 4 1,096 - 7,054 - 2,155 - 568,163 4 929 -
	6,613,890 49	5,109,766 43
	$ 13,428,883 100	11,787,457 100

See accompanying notes to parent company only financial statements.

221

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese) LONG BON INTERNATIONAL CO., LTD.

Balance Sheets (CONT ’ D)

December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Liabilities and Equity Current liabilities: 2100 Short-term borrowings (Note 6(h)) 2110 Short-term notes and bills payable 2280 Current lease liabilities (Note 7) 2200 Other payables (Note 6(b) and (o)) 2230 Current tax liabilities (Note 6(k)) 2300 Other current liabilities (Note 6(h) and 7) Non-Current liabilities: 2530 Bonds payable (Note 6(i)) 2580 Non-current lease liabilities (Note ) 2645 Guarantee deposits received (Note 7) Total liabilities Equity attributable to owners of parent (Note 6(e), (f) and (l)) 3100 Capital stock 3200 Capital surplus 3300 Retained earnings 3400 Other equity interest 3500 Treasury shares Total equity Total liabilities and equity	December 31, 2020	December 31, 2020	December 31, 2020
	Amount	%	Amount
	1,692,198 13 1,004,757 9
	2,469,730 18 2,466,135 22 - - 1,343 - 5,465 - 4,636 -
	2,475,195 18 2,472,114 22
	4,167,393 31 3,476,871 31
	3,947,293 29 4,047,293 34 146,633 1 130,417 1 5,875,475 44 4,885,506 41 (26,076) - (70,795) (1) (681,835) (5) (681,835) (6)
	9,261,490 69 8,310,586 69
	$ 13,428,883 100 11,787,457 100

See accompanying notes to parent company only financial statements.

222

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) LONG BON INTERNATIONAL CO., LTD.

Statements of Comprehensive Income

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars , Except for Earnings Per Common Share)

4000 Operating revenue (Note 6(j), (n), and 7) 5000 Operating costs (Note 6(j)) Gross profit (loss) from operations Operating expenses (Note 6(j), (o) and 7): 6100 Selling expenses 6200 Administrative expenses Net operating income (loss) Non-operating income and expenses (Note 6(p)): 7100 Interest income (Note 7) 7010 Other income (Note 7) 7020 Other gains and losses, net (Note 6(g) and 7) 7050 Finance costs, net (Note 7) 7070 Share of profit (loss) of associates and joint ventures accounted for using equity method, net (Note 13) 7380 Impairment gain and reversal of impairment loss determined in accordance with IFRS 9, net (Note 6(q)) Profit (loss) from continuing operations before tax 7950 Less: Income tax expenses (Note 6(k)) Profit (loss) 8300 Other comprehensive income (loss): 8310 Items that will not be reclassified subsequently to profit or loss 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Items that will not be reclassified subsequently to profit or loss 8360 Items that will not be reclassified subsequently to profit or loss 8380 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss (Note 6(k)) Items that will be reclassified subsequently to profit or loss 8300 Other comprehensive income Total comprehensive income Earnings per share (Note 6(m)) Basic earnings per share Diluted earnings per share	2020	% 100 54	2019 Amount % 17,813 100 11,021 62	2019 Amount % 17,813 100 11,021 62
	Amount $ 20,513 11,128		Amount 17,813 11,021
	9,385	46	6,792	38
	17,495 102,150	85 498	21,651 113,673	122 638
	119,645	583	135,324	760
	(110,260)	(537)	(128,532)	(722)
	32,411 175,784 640,462 (80,507) 454,275 8,267	158 857 3,122 (392) 2,215 40	37,543 118,271 993,622 (77,402) 95,626 7,500	211 664 5,578 (435) 537 42
	1,230,692	6,000	1,175,160	6,597
	1,120,432 19,795	5,463 96	1,046,628 181,375	5,875 1,018
	1,100,637	5,367	865,253	4,857
	28,014 1,903 -	137 9 -	35,091 (5,607) -	197 (31) -
	29,917	146	29,484	166
	(215) (24)	(1) -	31,408 (5,770)	176 (32)
	(239)	(1)	25,638	144
	29,678	145	55,122	310
	$ 1,130,315	5,512	920,375	5,167
	$	3.05		1.87
	$	3.05		1.86

See accompanying notes to parent company only financial statements.

223

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

LONG BON INTERNATIONAL CO., LTD.

Statements of Changes in Equity

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Balance on January 1, 2019 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve appropriated Cash dividends of ordinary share Capital reduction Adjustments of capital surplus for company's cash dividends received by subsidiaries Proceeds from disposal of subsidiaries or investments accounted for using equity method Difference between consideration and carrying amount of subsidiaries acquired or disposed of Due to business combination Changes in ownership interests in subsidiaries Disposal of investments in equity instruments at fair value through other comprehensive income Balance on December 31, 2019 Profit Other comprehensive income Total comprehensive income Appropriation and distribution of retained earnings: Legal reserve appropriated Cash dividends of ordinary share Purchase of treasury share Retirement of treasury share Difference between consideration and carrying amount of subsidiaries acquired or disposed of Disposal of investments in equity instruments at fair value through other comprehensive income Balance on December 31, 2020	Share capital Common stock Capital surplus	Retained earnings
		Legal reserve Unappropriate d retained earnings Total retained earnings
	- - - 865,253 865,253 - - - - 865,253 - - - (1,107) (1,107) 25,638 30,591 56,229 - 55,122
	- - - 864,146 864,146 25,638 30,591 56,229 - 920,375
	- - 2,510 (2,510) - - - - - - - - - (126,478) (126,478) - - - - (126,478) (1,011,823) - - - - - - - 91,522 (920,301) - 11,440 - - - - - - - 11,440 - - - (13,649) (13,649) 11,748 13,649 25,397 - 11,748 - (85,675) - - - - - - - (85,675) - - - (50) (50) - - - (773,357) (773,407) - (146) - (510) (510) - - - - (656) - - - 242,348 242,348 - (242,348) (242,348) - -
	4,047,293 130,417 471,151 4,414,355 4,885,506 14,712 (85,507) (70,795) (681,835) 8,310,586 - - - 1,100,637 1,100,637 - - - - 1,100,637 - - - (41) (41) (239) 29,958 29,719 - 29,678
	- - - 1,100,596 1,100,596 (239) 29,958 29,719 - 1,130,315
	- - 86,525 (86,525) - - - - - - - - - - - - - - - - - - - - - - - - (129,788) (129,788) (100,000) (398) - (29,390) (29,390) - - - 129,788 - - 16,614 - (66,237) (66,237) - - - - (49,623) - - - (15,000) (15,000) - 15,000 15,000 - -
	$ 3,947,293 146,633 557,676 5,317,799 5,875,475 14,473 (40,549) (26,076) (681,835) 9,261,490

See accompanying notes to parent company only financial statements.

224

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

LONG BON INTERNATIONAL CO., LTD.

Statements of Cash Flows

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit loss (gain) / Provision (reversal of provision) for bad debt expense Net loss (gain) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of subsidiaries,associates and joint ventures accounted for using equity method Loss (gain) on disposal of property, plan and equipment Loss (gain) on disposal of investments Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets: Net loss (gain) on financial assets or liabilities at fair value through profit or loss Notes receivable Accounts receivable Other receivable In inventories Other current assets Total changes in operating assets Changes in operating liabilities: Accounts payable Other payable Other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow (outflow) generated from operations Interest received Dividends received Interest paid Income taxes refund (paid) Net cash flows from operating activities	2020 $ 1,120,432 14,954 1,026 (8,267) (644,797) 80,507 (32,411) (157,460) (454,275) (735) -	2019 1,046,628 15,085 1,791 (7,500) (2,681) 77,402 (37,543) (110,168) (95,626) - (1,085,707)
	(1,201,458)	(1,244,947)
	(761,750) 28 3 38,267 (90,607) (2,697)	(1,078,551) 189 49 (29,957) (52,475) (306)
	(816,756)	(1,161,051)
	- 13,659 62	(2,800) 48,191 (753)
	13,721	44,638
	(803,035)	(1,116,413)
	(2,004,493)	(2,361,360)
	(884,061) 36,169 254,021 (80,437) (96,328)	(1,314,732) 33,785 143,857 (73,733) (231,370)
	(770,636)	(1,442,193)

See accompanying notes to parent company only financial statements.

225

(English Translation of Financial Statements and Report Originally Issued in Chinese) LONG BON INTERNATIONAL CO., LTD.

Statements of Cash Flows (CONT ’ D)

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in other receivables Acquisition of investment properties Proceeds from disposal of investment properties Increase in other financial assets Decrease in other financial assets Increase in other non-current assets Net cash flows from (used in) investing activities Cash flows from financing activities: Increase in short-term loans Decrease in short-term notes and bills payable Increase in guarantee deposits received Payment of lease liabilities Cash dividends paid Capital reduction payments to shareholders Payments to acquire treasury shares Net cash flows from financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2020 (75,218) 69,552 (901,874) - (119) 1,644 1,080,000 (296,067) 51,593 190 430 (209)	2019 - 1,678,696 (1,275,915) 2,321,547 - - (1,072,500) (161) - 100,821 701,936 -
	(70,078)	2,454,424
	664,000 99,406 829 (5,711) - - (129,788)	784,000 (99,974) 683 (5,860) (126,478) (1,011,823) -
	628,736	(459,452)
	(211,978) 1,188,749	552,779 635,970
	$ 976,771	1,188,749

See accompanying notes to parent company only financial statements.

226

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

Long Bon International Co., Ltd. (the ‚Company‛) was established in January 22, 1988 in accordance with the Company Act of the Republic of China. The Company’s registered office address is located at 9F., No. 50, Sec. 1, Zhongxiao W. Rd., Zhongzheng Dist., Taipei City 100, Taiwan (R.O.C.). Originally known as Long Bon Construction Co., Ltd. with its common stock listed on the Taiwan Stock Exchange (TWSE) in September 1992, the Company was renamed Long Bon Development Co., Ltd. in 1997, and renamed Long Bon International Co., Ltd. anew in 2009. The major business activities of the Company are the commercial building rental service and property investment and development.

(2) Approval date and procedures of the financial statements

The accompanying parent company only financial statements were authorized for issue by the Board of Directors on March 23, 2021.

(3) New standards, amendments and interpretations adopted

• (a) Impact of adopting new, revised, or amended standards and interpretations endorsed by the Financial Supervisory Commission, R.O.C. (‚FSC‛)

The Company has initially adopted the following amendments to IFRS, from January 1, 2020 which do not have any material impact on its consolidated financial statements:

• Amendments to IFRS 3 ‚Definition of a Business‛

• Amendments to IFRS 9, IAS 39 and IFRS 7 ‚Interest Rate Benchmark Reform‛

• Amendments to IAS 1 and IAS 8 ‚Definition of Material‛

• Amendments to IFRS 16 ‚ Leases Regarding COVID-19-Related Rent Concessions‛

• (b) The impact of IFRS endorsed by the FSC but not yet effective

The Company assesses that the adoption of the amendments to IFRS effective from January 1, 2021 would not have any material impact on its consolidated financial statements.

• Amendments to IFRS 4 ‚Extension of the Temporary Exemption from Applying IFRS 9‛

• Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 ‚Interest Rate Benchmark － ‛

• Reform Phase 2

(Continued)

227

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

FSC:
New or Amended			Effective date per
Standards	Content of amendment		IASB
Amendments to IAS 1	The amendments aim to promote consistency		January 1, 2023
‚Classification of Liabilities as	in applying the requirements by helping
Current or Non-current‛	companies determine whether, in	the
	statement of balance sheet, debt and other
	liabilities with an uncertain settlement date
	should be classified as current (due	or
	potentially due to be settled within one year)
	or non-current.
	The amendments include clarifying	the
	classification requirements for debt	a
	company might settle by converting it	into
	equity.

The Company is evaluating the impact of its initial adoption of the abovementioned standards or interpretations on its financial position and financial performance. The results thereof will be disclosed when the Company completes its evaluation.

The Company expects no material impact of new and amended standards not yet endorsed by the FSC on the consolidated financial statements.

(4) Summary of significant accounting policies

The significant accounting policies applied in the preparation of these consolidated financial statements are set out as below. Except for changes in accounting policies indicated in note 3, the following accounting policies were adopted consistently throughout the presented periods in the consolidated financial statements.

• (a) Statement of compliance

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

• (b) Basis of preparation

• (i) Basis of measurement

The parent company only financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position:

• 1) Financial instruments measured at fair value through profit or loss are measured at fair value;

(Continued)

228

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• 2) Financial assets at fair value through other comprehensive income are measured at fair value;

• (ii) Functional and presentation currency

The functional currency of the Company is determined based on the primary economic ’ environment in which the entity operates. The Company s parent company only financial statements are presented in New Taiwan Dollars, which is the Company’s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

• (c) Foreign currency transactions and operations

Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Nonmonetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for the following, which are recognized in other comprehensive income:

• ‧ an investment in equity securities designated as at fair value through other comprehensive income.

• (d) Classification of current and non-current assets and liabilities

The Company’s primary business activities are construction projects and the leasing of real estate, and the operating cycles are normally more than one year. Assets and liabilities associated with construction projects were classified as either current or non-current according to operating cycle spanning between three to five years, and the other assets and liabilities were classified as either current or non-current. Assets that met one of the following conditions were recognized as current assets while all other assets that were not current were recognized as non-current assets:

• (i) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It expects to be realized within twelve months after the reporting date; or

• (iv) The asset is cash and cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.

(Continued)

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LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

• (i) It is expected to be settled in its normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is due to be settled within twelve months after the reporting date; or

• (iv) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. 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.

• (e) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents comprise short term highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in their fair value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes that should be recognized as cash equivalents.

(f) Financial instruments

Accounts receivable are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is an accounts receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue. An account receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at: amortized cost, fair value through other comprehensive income (FVOCI) –equity investment, or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

• 1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at measured at fair value through profit or loss:

• ‧ it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

(Continued)

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LONG BON INTERNATIONAL CO., LTD. Notes to the Financial Statements

• ‧ its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A financial asset measured at amortized cost is initially recognized amortized cost, plus/minus the cumulative amortization using the effective interest method, and the measurement of the amortized cost of any loss allowance is adjusted. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses, and impairment losses are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Financial assets at fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

• ‧ it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

• ‧ it is contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition, the Company is able to make an irrevocable election to present subsequent changes in the fair value of investments in equity instruments that is not held for trading in other comprehensive income. This election is made on an instrument-by- instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income derived from equity investments is recognized on the date that the Company’s right to receive dividends is established(usually the ex-dividend date).

• 3) Financial assets at fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

(Continued)

231

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• 4) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivables, guarantee deposit paid and other financial assets).

The Company measures loss allowances at an amount equal to lifetime expected credit loss (‚ECL‛), except for the following which are measured as 12 month ECL:

• ‧ debt securities that are determined to have low credit risk at the reporting date; and

• ‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

• Loss allowance for accounts receivable is always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company ’ s historical experience and informed credit assessment as well as forward-looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 90 days past due or the debtor is unlikely to pay its credit obligations to the Company in full.

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’ ’ s or twA or higher per Taiwan Ratings .

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

(Continued)

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LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

ECLs are a probability weighted estimate of credit losses over the expected life of financial assets. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost is credit impaired. A financial asset is -‘credit impaired’- when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit impaired includes the following observable data:

• ‧ significant financial difficulty of the borrower or issuer;

• ‧ a breach of contract such as a default or being more than 90 days past due;

• ‧ the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• ‧it is probable that the borrower will enter bankruptcy or other financial reorganization; or

• ‧ the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

• 5) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expired, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(Continued)

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LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• (ii) Financial liabilities and equity instruments

• 1) Classification of debt or equity

Debt or equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual agreement.

• 2) Equity instrument

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received less the direct issuing cost.

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

4) Financial liabilities

Financial liabilities are classified as measured at amortized cost. Subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

5) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations has been discharged, cancelled or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

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

• 6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(Continued)

234

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

(g) Inventories

The original costs of inventories shall comprise all necessary expenditure incurred in bringing the inventories to their present condition and location and for sale or construction. Besides, the cost of real estate development includes construction cost, land cost, borrowing cost, and project expense. Upon completion, the construction in progress was transferred to buildings and land held for sale, and the operating costs were recognized according to the ratio of sales to construction and development cost. Net realizable value is the balance that estimates the selling price, less, estimated costs of completion and the estimated costs of selling. The methods of determining the net realizable value are as follows:

• (i) Land held for development: the net realizable value is the replacement cost or estimated price (based on the market condition), less, the estimated selling expenses at the end of the period.

• (ii) Building construction in progress: the net realizable value is the estimated price (based on the market condition), less, the estimated costs of completion and selling expenses at the end of the period.

• (iii) Real estate held for sale: the net realizable value is the estimated price (based on the market condition), less, the estimated selling expenses at the end of the period.

(h) Investment in subsidiaries

The subsidiaries in which the Company holds controlling interest are accounted for under equity method in the parent company only financial statements. Under equity method, the net income, other comprehensive income and equity in the parent company only financial statement are the same as those attributable to the owners of parent in the consolidated financial statements.

The changes in ownership of the subsidiaries but not loss control is recognized as equity transaction.

• (i) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business use in the production or supply of goods or services or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful lives, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

(Continued)

235

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• (j) Property, plant and equipment

• (i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

• (ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

• (iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives for the current and comparative years of significant items of property, plant, and equipment are as follows:

==> picture [307 x 30] intentionally omitted <==

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (k) Leases

• (i) Identifying a lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:

• 1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and

• 2) the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

(Continued)

236

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• 3) the customer has the right to direct the use of the asset throughout the period of use only if either:

• the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or

• the relevant decisions about how and for what purpose the asset is used are predetermined and:

  • － the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or

  • － the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.

At the inception of the lease or when reassessing whether a contract contained a lease component, the Company allocated the consideration in the contract to each lease component on the basis of their relative standalone prices.

(ii) As a leasee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• －

• fixed payments, including in substance fixed payments;

• － variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• －

• amounts expected to be payable under a residual value guarantee; and

• － payments or penalties for purchase or termination options that are reasonably certain to be exercised.

(Continued)

237

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

The lease liability is subsequently amortized cost using the effective interest method. It is remeasured when:

• －

• there is a change in future lease payments arising from the change in an index or rate; or

• － ’ there is a change in the Company s estimate of the amount expected to be payable under a residual value guarantee; or

• － there is a change in its assessment of whether it will exercise an extension or termination option; or

• －

• there is any lease modifications in lease subject, scope of the lease, or other terms.

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize the difference in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company placed right of use assets and lease liabilities under the line item in the balance sheet.

If an arrangement contains lease and non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices. However, for the leases of land and buildings in which it is a lessee, the Company has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Company has elected not to recognize right of use assets and lease liabilities for leases that have a lease term of 12 months or less and leases of low value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight line basis over the lease term.

• (iii) As a leasor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

For operating lease, the Company recognizes rental income on a straight line basis over the lease term.

(Continued)

238

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• (l) Intangible assets

• (i) Recognition and measurement

Goodwill arising on the acquisition of subsidiaries is measured at cost, less accumulated impairment losses.

Other intangible assets, including computer software purchased by the Company, are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure was capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, was recognized in profit or loss as incurred.

• (iii) Amortization

Amortization was calculated over the cost of the asset, less its residual value, and was recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

1) Computer software 1~5 years

Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (m) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash generating units (‚CGUs‛). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or a CGU is the higher of its value in use and its fair value less costs to disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

(Continued)

239

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

An impairment loss in respect of goodwill is not reversed. For other non-financial assets, an impairment loss is reversed only to the extent that the asset’s carrying amount that would have been determined (net of depreciation or amortization), had no impairment loss been recognized for the assets in prior years.

(n) Revenue recognition

• (i) Revenue from contracts with customers

Revenue is measured based on the consideration that the Company expects to be entitled in the transfer goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The following is a description of the Company’s major revenues:

• 1) Land development and sale of real estate

The Company develops and sells residential properties and usually sales properties in advance during construction or before construction begins. Revenue is recognized when control over the properties has been transferred to the customer. The properties have generally no alternative use for the Company due to contractual restrictions. However, an enforceable right to payment does not arise until legal title of a property has passed to the customer. Therefore, revenue is recognized at a point in time when the legal title has passed to the customer.

The revenue is measured at the transaction price agreed under the contract. For sale of readily available house, in most cases, the consideration is due when legal title of a property has been transferred. While deferred payment terms may be agreed in rare circumstances, the deferral never exceeds twelve months. The transaction price is therefore not adjusted for the effects of a significant financing component. For pre selling properties, the consideration is usually received by installment during the period from contract inception until the transfer of properties to the customer. If the contract includes a significant financing component, the transaction price will be adjusted for the effects of the time value of money during the period, using the specific borrowing rate of the construction project. Receipt of a prepayment from a customer is recognized as contract liability. Interest expense and contract liability are recognized when adjusting the effects of the time value of money. Accumulated amount of contract liability is recognized as revenue when control over the property has been transferred to the customer.

Certain contracts include multiple deliverables, such as sale of residential properties and a decoration service. The Company accounts for the decoration service as a single performance obligation, and the transaction price is allocated to the decoration service on a relative standalone selling price basis. If a standalone selling price is not directly observable, it is estimated based on expected cost plus margin. Decoration services revenue are recognized upon the completion of service.

(Continued)

240

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• (o) Employee benefits

• (i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

• (ii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(p) Income taxes

Income taxes include both current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are measured using tax rates enacted or substantively enacted at the reporting date.

Deferred income taxes are recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred taxes are not recognized for the following exceptions:

• (i) Assets and liabilities that are initially recognized but are not related to the business combination and have no effect on net income or taxable gains (losses) during the transaction.

• (ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• (iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted on the reporting date.

Deferred tax assets and liabilities are offset against each other if the following criteria are met:

• (i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

• (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

(Continued)

241

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• 2) different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for unused tax losses, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

(q) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary equity holders. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholder of the Company divided by weighted average number of ordinary shares outstanding. The calculation of diluted earnings per share is based on the profit attributable to ordinary shareholders of the Company divided by weighted average number of ordinary shares ’ outstanding after adjustment for the effects of all dilutive potential ordinary shares. The Company s dilutive potential ordinary shares comprise employee stock options.

(r) Operating segments

Please refer to the consolidated financial report of the Group for the years ended December 31, 2020 and 2019 for operating segments information.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

The preparation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Management continues to monitor the accounting estimates and assumptions. Any changes in accounting estimates are recognized during the period and the impact of those changes in accounting estimates are recognized in the following period.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the parent company only financial statements is as follows:

• (a) Judgment of whether the Group has substantive control over its investees

The Company held 24.61% of Taisun Enterprise Co., LTD. (hereinafter referred to as ‚Taisun‛) outstanding voting shares. As the single largest shareholder of Taisun, the Group held 30.9% of its outstanding voting shares, but the Group did not obtain more than half of the voting rights. Although the remaining 69.1% shares of Taisun Company were not concentrated within certain shareholders, yet the Company needed to obtain a seat in Taisun’s Board of Directors in the next re election. Therefore, it was determined that the Company had no significant impact on Taisun and the investment in it was recognized as financial assets at fair value through profit or loss.

(Continued)

242

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows. Those assumptions and estimation have been updated to reflect the impact of COVID-19 pandemic: None.

Valuation process

The accounting policies and disclosures of the Company include that measure the financial and nonfinancial assets and financial liabilities. The Company establishes the relevant internal control system for the fair value measure. Including the establishment of an evaluation team to be responsible for reviewing all significant fair value measurements (including the third level of fair value) and reporting directly to the Chief Financial Officer. The evaluation team periodically reviews significant unobservable input and adjustments. If the input value used to measure the fair value is used from external third party information (such as broker or pricing service), the evaluation team will evaluate the evidence provided by the third party to support the input value to determine the rating and its fair value class is in compliance with the International Financial Reporting Standards. The evaluation team also reports on major issues to the audit committee of the Company. The investment property is appraised regularly either by the Company’s property development segment according to the valuation method and the parametric assumptions announced by FSC or by an external appraiser.

The Company strives to use market observable inputs when measuring assets and liabilities. Fair values are based on the degree to which the fair value can be observed and are grouped into Level 1 to Level 3 as follows:

Level 1: Public offer (unadjusted) of the same asset or liability in the active market.

• Level 2: In addition to the public quotation at the first level, the input parameters of the asset or liability are observed directly (i.e., price) or indirectly ((i.e. derived from the price).

• Level 3: Input parameters for assets or liabilities are not based on observable market data (non-observable parameters).

For assumptions used in measuring fair value

For any transfer within the fair value hierarchy, the impact of the transfer is recognized on the reporting date.

Further information on the assumptions used in measuring the fair value

Further information about the assumptions made in measuring fair values is included in the following notes:

• (a) Note 6(q) Financial instrument

(Continued)

243

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

(6) Explanation of significant accounts

• (a) Cash and cash equivalents

Cash Demand deposits	December 31, 2020 $ 20 976,751	December 31, 2019 20 1,188,729
	$ 976,771	1,188,749

Please refer Note 6(q) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Company.

• (b) Financial assets at fair value through profit or loss

Financial assets mandatorily measured at fair value through profit or loss: Non-derivative financial assets Domestic listed stocks Beneficiary certificate Total	December 31, 2020 $ 3,979,393 2,247	December 31, 2019 2,584,632 -
	$ 3,981,640	2,584,632

• (i) As of December 31, 2020 and 2019, the securities prices payable by the Company due to the purchase of equity securities amounted to zero and $9,539 thousand, respectively.

• (ii) As of December 31, 2020 and 2019, the financial assets at fair value through profit and loss of the Company pledged as collateral, please refer to Note 8.

• (c) Financial assets at fair value through other comprehensive income

Non current equity investments at fair value through other comprehensive income Domestic listed stocks in emerging market －Grand Green Energy Co., Ltd. Domestic unlisted stocks －The Reputation International Construction Co., Ltd. －M Radio Broadcasting Co., Ltd. －Widedoctor (International) Enterprise Co., Ltd. －Chia Ya Investment Co., Ltd. －New Image Medical Co., Ltd. －Chang Hong Energy Technology Co., Ltd. －J&V Energy Technology Co., Ltd. －J Metrics Technology Co., Ltd. －Horseshoe International Enterprise Co., Ltd. Total	December 31, 2020 - 6,664 181,689 4,191 4,255 70,077 19,761 26,556 - 10,085 75,468	December 31, 2019 - 10,752 150,463 7,302 5,127 58,392 17,445 36,930 31,561 20,042 -
	$ 398,746	338,014

(Continued)

244

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

(Continued)

245

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• (i) The Company holds these equity instruments as long term strategic instrument instead of trading purpose, and are accounted for under fair value through other comprehensive income.

• (ii) As of December 31, 2020 and 2019, the securities prices receivable by the Company due to the sell of equity securities amounted to zero and $27,053 thousand, respectively.

• (iii) During the years ended December 31, 2020 and 2019, the dividends related to equity investments at fair value through other comprehensive income held on the years then ended, were recognized, please refer to Note 6(p).

• (iv) Due to operational considerations, the Company sold the equity instrument investments listed above that were designated as fair value through other comprehensive gains and losses during 2020 and 2019. The sales situation is as follows:

Stock name	Sale date	Fair value	Cumulative disposal gains and losses (7,500) 4,330 233,662 237,992
For the Years Ended December 31, 2020 J&V Energy Technology Co., Ltd. For the Years Ended December 31, 2019 COTA Commercial Bank, Ltd. CTBC Financial Holding Co., Ltd.	June 30, 2020 July 19, 2019 and October 8, 2019 January 2,~January 30, 2019	$ 42,500 $ 39,530 1,453,148
		$ 1,492,678

The Company has transferred cumulative disposal gains from other equity interest to retained earnings.

• (v) Please refer to Note 6(q) for credit risk and market risk.

• (d) Inventories

Land held for construction site Building construction in progress Buildings and land held for sale Prepayment for land and buildings Less: Allowance for obsolete inventory	December 31, 2020 $ 1,400,902 438,630 15,727 - (4,151)	December 31, 2019 1,696,518 - 15,727 52,407 (4,151)
	$ 1,851,108	1,760,501

(i) The movement in the allowance for inventory for 2020 and 2019 were as follows:

Balance on December 31, 2020 (Equivalent to balance on January 1))	2020 $ 4,151	2019 4,151

• (ii) Details on inventory the Company had been pledged as collateral as of December 31, 2020 and 2019, please refer to Note 8.

(Continued)

246

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• (e) Investments accounted for using equity method

Subsidiaries Everwin Investment Co, Ltd. Long Bao Co., Ltd. Long Jee Holding(s) Pte Ltd. Long Fu Real Estate Development Co., Ltd. Rei Ju Construction Co., Ltd. Long De International Development Co., Ltd.	December 31, 2020 $ 2,798,689 615,904 10,075 694,835 796,504 975	December 31, 2019 2,620,422 605,506 10,412 818 489,872 - 3,727,030
	$ 4,916,982

• (i) Please refer to the consolidated financial statement for subsidiaries for the year ended December 31, 2020.

• (ii) In order to integrate the resources of the Group, the Company obtained the above-mentioned investment accounted for using the equity method in 2020 and 2019 .The acquisitions were as follows; please refer to Note 7 for details from related-party transactions.

Item For the Years Ended December 31, 2020 Rei Ju Construction Co., Ltd. Long Fu Real Estate Development Co., Ltd. Long De International Development Co., Ltd. For the Years Ended December 31, 2019 Rei Ju Construction Co., Ltd. Long Bao Co., Ltd. Long Fu Real Estate Development Co., Ltd.	Date of **acquisiton **	Amount $ 201,874 699,000 1,000	Changes inequity Capital surplus - - -
	2020.05 2020.02~11 2020.09 2019.06~07 2019.11 2019.12
		$ 901,874	-
		$ 670,665 604,250 1,000	(95,992) - -
		$ 1,275,915	(95,992)

• (iii) Due to the operation of the Company, the Company sold the investments accounted for using the equity method listed above in 2020 and 2019. Please refer to Note 6(p) for details of the sales situation.

• (iv) As of December 31, 2020 and 2019, the investments in aforesaid equity accounted investees were not pledged as collateral.

(Continued)

247

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

(f) Acquisition of subsidiary

On March 4, 2019, the Company obtained control of Rei Ju Construction Co., Ltd. through its subsidiary Everwin Investment Co., Ltd. acquiring 11.43% of its shares, increasing the equity interest in it from 48.81% to 60.24%. Rei Ju Construction Co., Ltd. is a grade A construction company specialized in architecture and civil engineering.

The following table summarizes the recognized amounts of assets acquired, liabilities assumed, and goodwill recognized on the acquisition date:

(i) Identifiable assets acquired and liabilities assumed

The following table summarized the carrying value of identifiable assets acquired and liabilities assumed on the acquisition date:

assumed on the acquisition date:
Cash and cash equivalents	$	741,932
Current financial assets at fair value through profit or loss		4,474
Notes receivable		240,444
Accounts receivables		671,374
Contract assets		1,926,139
Inventories		528,950
Other receivables		47,807
Current tax assets		1,477
Other current assets		171,223
Other current financial assets		604,734
Non-current financial assets at FVOCI		805,973
Investments accounted for using equity method		2,925
Property, plant and equipment		174,817
Investment property		225,170
Right-of-use assets		20,390
Intangible assets		20,264
Deferred tax assets		91,550
Net defined benefit assets－non-current		11,007
Other non-current financial assets		2,646
Short-term borrowings		(699,960)
Short-term notes and bills payable		(50,000)
Notes payable		(876,890)
Accounts payables		(1,539,887)
Contract liabilities		(1,185,896)
Other payables		(133,553)
Current tax liabilities		(5,406)
Lease liabilities		(20,416)

(Continued)

248

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

Other current liabilities Long-term borrowings Guarantee deposits received Non-controlling interests Total identifiable net assets acquired Goodwill Goodwill arising from the acquisition has been recognized as follows: Consideration transferred Add: Fair value of the equity interest held prior to the acquisition Less: Fair value of identifiable net assets (measured at percentage of ownership) Goodwill

(72,802) (450,070) (190) (122,360) $ 1,135,866 $ - 519,379 475,609 $ 43,770

(ii) Goodwill

The Company already held 41.87% of shares of Rei Ju Construction Co., Ltd. before the acquisition date, and $64,583 thousand was recognized as the gain on the equity interest at fair value. (The debit balance of equity relating to the investment under the line item of shareholder’s equity, amounting to $874 thousand, has been deducted. The benefit was recognized as ‚ gain on disposal of investments" in the consolidated statement of comprehensive income statement; other comprehensive income of $3,836 thousand relating to Rei Ju Construction Co., Ltd. recognized before the disposal was reclassified to retained earnings.)

Goodwill arises mainly from the profitability and the value of workforce of Rei Ju Construction Co., Ltd., and the combination is expected to result in synergies through vertical integration between it and the Company.

The purchase price allocation report of the subsidiary was based on the evaluation of independent evaluators who were recognized with relevant professional qualifications and relevant experience in the evaluated target.

(g) Investment Property

Investment property comprises proprietary assets of the Company leased to third parties. The original non-cancellable periods of the leased investment property ranges from one to five years, and some leases include an option to renew the lease for an additional period of the same duration at the end of the contract term.

(Continued)

249

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

The movements in investment property of the Company for 2020 and 2019 were as follows:

Cost: Balance on January 1, 2020 Addition Disposals Balance on December 31, 2020 Balance on January 1, 2019 Acquisitions Balance on December 31, 2019 Depreciation and impairment losses: Balance on January 1, 2020 Depreciation for the year Disposals and obsolescence Balance on December 31, 2020 Balance on January 1, 2019 Depreciation for the year Balance on December 31, 2019 Book value: Balance on December 31, 2020 Balance on January 1, 2019 Balance on December 31, 2019 Fair value: Balance on December 31, 2020 Balance on December 31, 2019	Land and improvements $ 348,399 247,484 (18,879)	Buildings 371,344 48,583 (23,146)
	$ 577,004	396,781
	$ 348,399 -	371,183 161
	$ 348,399	371,344
	$ 85,491 - -	190,499 7,324 (12,110)
	$ 85,491	185,713
	$ 85,491 -	183,513 6,986
	$ 85,491	190,499
	$ 491,513	211,068
	$ 262,908	180,845
	$ 262,908	187,670

• (i) Investment property comprises a number of commercial properties that are leased to third parties. Each of the leases contains an initial non-cancellable period that runs from 1 to 5 years. Subsequent renewals are negotiated with the lessee and no contingent rents are charged.

• (ii) Fair value of investment properties was determined based on the valuation of an independent appraiser (who had a recognized and relevant professional qualification, and recent experience in valuating similar items to the investment property being valued in location and type). The inputs used in the fair value valuation technique were market values classified as Level 3.

• (iii) As of December 31, 2020 and 2019, a portion of the Company’s investment property was pledged as collateral for bank loans; please refer to Note 8.

(Continued)

250

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

(h) Short-term borrowings

The details of short term borrowings were as follows:

Secured bank loans Unused credit lines Range of interest rates	December 31, 2020 $ 1,448,000	December 31, 2020 $ 1,448,000	December 31, 2019 178,000
	$ -		-
		1.35%~1.81%	1.16%~1.76%

For the collateral for bank loans, please refer to Note 8.

• (i) Bonds payable

• (i) The details of secured bonds issued by the Company were as follows:

Secured corporate bonds Unamortized discounted corporate bonds payable Corporate bonds issued balance at year end	December 31, 2020 $ 2,500,000 (30,270)	December 31, 2019 2,500,000 (33,865)
	$ 2,469,730	2,466,135

• (ii) As of December 31, 2020, the key terms and conditions of the outstanding bonds issued by the Company were as follows:

Item Total Amount Issue Date Coupon rate Duration LC Bank Entrusted Bank Redemption at Maturity	1st secured bonds issued in 2017 $2,500,000 thousand September 12,2017 1.02% September 12,2017 ~ September 12,2022 Taiwan Cooperative Bank, Ltd. Jih Sun International Bank, Ltd. The Company can repay the principal once the Company's bonds expire five years from the issuance date.

• (iii) For the collateral for bonds payable, please refer to Note 8.

(j) Operating lease

The Company leases out its investment property. The Company has classified these leases as operating leases, because it does not transfer substantially all of the risks and rewards incidental to the ownership of the underlying assets. Please refer to note 6(g) ‚Investment property‛ for details.

(Continued)

251

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date was as follows:

Less than one year 1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years Over five years Total undiscounted lease payments	December 31, 2020 $ 13,832 10,604 9,499 9,398 7,176 10,547	December 31, 2019 10,059 6,977 4,902 3,840 3,840 10,240
	$ 61,056	39,858

The rental income and related operating costs arised from investment estate in 2020 and 2019 were as follows:

Rental income Related operating costs	For the Years Ended December 31 2020 2019 $ 20,513 17,813 $ 18,712 16,475	For the Years Ended December 31 2020 2019 $ 20,513 17,813 $ 18,712 16,475
	2020 $ 20,513 $ 18,712
		16,475

• (k) Income tax

• (i) Income tax expense

The amounts of income tax expense for 2020 and 2019 were as follows:

Current income tax expense Current period Undistributed earnings additional tax Adjustment for prior years Land value increment tax Deferred tax expense Origination and reversal of temporary differences Income tax expense	For the Years Ended December 31 2020 2019 $ - 248,878 48,631 10,921 (25,107) (7,555) 606 - 24,130 252,244 (4,335) (70,869) (4,335) (70,869) $ 19,795 181,375
	2020 $ - 48,631 (25,107) 606 24,130
	(4,335)
	(4,335)
	$ 19,795

(Continued)

252

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

The amounts of income tax gains (expense) recognized in other comprehensive income for 2020 and 2019 is as follows.

Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign financial statements Share of profit (loss) of associates and joint ventures accounted for using equity method
	$ (24)	(5,770)

Reconciliation of income tax and profit before tax for 2020 and 2019 were as follows.

Profit before income tax Income tax using the Company’s domestic tax rate Effect of investment gain recognized using equity method Suspended levy of securities transaction income tax Taxable income from disposal of overseas securities Dividend income Non-taxable income from land transactions Land value increment tax Non-deductible expenses Undistributed earnings additional tax Change in unrecognized temporary differences Recognize unrecognized tax losses in the previous period Adjustment for prior years Income tax expense	For the Years Ended December 31 2020 2019 $ 1,120,432 1,046,628	For the Years Ended December 31 2020 2019 $ 1,120,432 1,046,628
	2020 $ 1,120,432
	$ 224,086 (90,855) (122,515) - (19,951) (1,569) 606 8,122 48,631 (1,653) - (25,107)	209,326 (19,126) 3,995 10,695 (20,986) - - 324 10,921 (1,500) (4,719) (7,555)
	$ 19,795	181,375

(Continued)

253

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• (ii) Deferred tax assets and liabilities

• 1) Unrecognized deferred tax assets

The Company’s unrecognized deferred income tax assets were composed of the following items:Deferred tax assets have not been recognized in respect of the following items:

Deductible temporary difference	December 31, 2020 $ 61,953	December 31, 2019 63,606

• 2) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2020 and 2019 were as follows:

Share of profit accounted for using equity method Deferred tax liabilities: Balance on January 1, 2019 $ 70,000 Debit (credit) on income statement (70,000) Balance on December 31, 2019 $ - Deferred tax assets: Balance on January 1, 2020 (Debit) credit on income statement Balance on December 31, 2020 Balance on January 1, 2019 (Debit) credit on income statement (Debit) credit on other comprehensive income Balance on December 31, 2019	Share of profit accounted for using equity method Deferred tax liabilities: Balance on January 1, 2019 $ 70,000 Debit (credit) on income statement (70,000) Balance on December 31, 2019 $ - Deferred tax assets: Balance on January 1, 2020 (Debit) credit on income statement Balance on December 31, 2020 Balance on January 1, 2019 (Debit) credit on income statement (Debit) credit on other comprehensive income Balance on December 31, 2019	Others 937 (937)	Others 937 (937)
	$ -	-

• (iii) The Company’s income tax return for the year 2018 had been approved by the R.O.C. tax authorities.

• (l) Capital and other equity

As of both December 31, 2020 and 2019, the Company’s authorized share capital amounted to $7,200,000 thousand, divided into 720,000 thousand shares, with a par value of $10 per share. The paid in capital was $3,947,293 thousand and $4,047,293 thousand, respectively. All issued shares were paid up upon issuance.

(Continued)

254

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

Reconciliation of shares outstanding for the years ended December 31, 2020 and 2019 were as follows:

Balance on January 1 Return of capital on capital reduction Retirement of treasury share Balance on December 31	(In thousands of shares) Ordinary Shares 2020 2019 404,729 505,911 - (101,182) (10,000) - 394,729 404,729
	394,729

(i) Ordinary shares

In order to increase the return on shareholders’ equity and maintain a stable earnings per share, the Company, pursuant to the resolution passed in a regular shareholders’ meeting held on June 27, 2019, approved capital reduction amounting to $1,011,823 thousand, representing a cancellation of 101,182 thousand shares and a capital reduction ratio of 20%; the capital reduction dated December 13, 2019 was approved in accordance with Order No. 1080332235 issued by the FSC on October 9, 2019, and the payment for the shares was refunded on December 16, 2019.

(ii) Capital surplus

The components of capital surplus were as follows:

Premium on convertible bond Treasury share transactions Generated by long term equity investment	December 31, 2020 $ 15,731 11,440 119,462	December 31, 2019 16,129 11,440 102,848
	$ 146,633	130,417

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. Capital surplus included the income was derived from the issuance of new shares at a premium and income from the endowments received by the Company. In accordance with the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the amount of capital reserves to be reclassified under share capital shall not exceed 10 percent of the actual share capital amount.

(iii) Retained earnings

The Company’s article of incorporation stipulate that Company’s net earnings should first be used to offset the prior years’ deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

(Continued)

255

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

The Company’s dividend policy is determined by the Board of Directors based on operating plans, investment plans, capital budgets and changes in internal and external environments. Because the Company is currently in its growing phase, retained earnings must be used to finance its operating growth and investment needs, it has adopted a residual dividend policy with the balance of dividends taken into consideration, wherein the cash dividends shall be no less than 10 percent of the total dividends.

• 1) Legal reserve

If the Company has no deficit and the legal reserve has exceeded 25% of the Company’ s paid in capital, the excess may, pursuant to a resolution reached at a shareholders’ meeting, be transferred to capital or distributed in cash.

2) Special reserve

In accordance with Permit No. 1010012865 as issued by the Financial Supervisory Commission on 6 April 2012, a special reserve equal to the contra account of other shareholders’ equity is appropriated from current and prior period earnings. When the debit balance of any of the contra accounts in the shareholders’ equity is reversed, the related special reserve can be reversed. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distribution.

In accordance with Permit No. 1010047490 issued by the FSC on November 21, 2012, a special reserve shall be retained at an amount equal to the proportionate share of the carrying value of the treasury stock held by subsidiaries in excess of the market value at the reporting date. The special reserve may be reversed when the market value recovers in subsequent periods.

3) Earnings distribution

The Company, pursuant to the resolution reached in shareholder’ meeting held on June 18, 2020, did not appropriate the earnings for 2019. The dividends, appropriated pursuant to the resolution reached in shareholder’ meeting held on June 27, 2019, were as follows:

Dividends distributed to ordinary shareholders: Cash	For the Years Ended December 31, 2018 Amount per share Total amount $ 0.25 126,478
	Amount per share $ 0.25

(Continued)

256

LONG BON INTERNATIONAL CO., LTD. Notes to the Financial Statements

• (iv) Treasury stock

• 1) The Company’s treasury shares, held by Rei Ju Construction Co., Ltd., a subsidiary as of December 31, 2020 and 2019, were as followed:

of December 31, 2020 and 2019, were as followed:
Shares held by subsidiaries (thousand) Acquisition cost Stock market price Amount of treasury shares	December 31, 2020 36,609	December 31, 2019 36,609
	$ 689,461	689,461
	$ 525,333	563,772
	$ 681,835	681,835

• 2) Pursuant to the requirements under section 28(2) of the Securities and Exchange Act, the Company repurchased 10,000 thousand treasury shares at the cost of $129,788 thousand, in order to protect its credit and shareholders' equity. Pursuant to Order No. 1090344919 issued by the FSC on May 25, 2020, the Company reported a repurchase of its own shares. Subsequent to that, the Company, according to a resolution made in a meeting of Board of Directors, retired 10,000 thousand treasury shares on June 19, 2020, which was recorded as the date of retirement. Consequently, the Company recognized a decrease of $100,000 thousand in ordinary shares, $398 thousand in capital surplus, and $29,390 thousand in undistributed earnings.

• (v) Oher comprehensive income accumulated in reserves, net of tax

Balance on January 1, 2020 Exchange differences on translation of net assets of foreign operations comprehensive income Unrealized gain (loss) on financial assets measured at fair value through other comprehensive income— the Company Unrealized gain (loss) on financial assets measured at fair value through other comprehensive income—subsidiaries Disposal of investments in equity instruments at fair value through other comprehensive income— the Company Disposal of investments in equity instruments at fair value through other comprehensive income—subsidiaries Balance on December 31, 2020	Exchange differences on translation of foreign financial statements $ 14,712 (239) - - - - $ 14,473	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income (85,507) - 28,014 1,944 7,500 7,500 (40,549)	Total (70,795) (239) 28,014 1,944 7,500 7,500 (26,076)

(Continued)

257

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

Balance on January 1, 2019 Associates accounted for using equity method–share of translation differences of net assets of foreign operations Liquidation of foreign operations–translation differences of net assets of foreign operations reclassified to profit or loss Disposal of equity accounted associates－translation differences of net assets of foreign operations reclassified to profit or loss — subsidiaries Disposal of equity accounted associates－translation differences of net assets of foreign operations reclassified to profit or loss — the Company Disposal of unrealized gains (losses) on financial assets at FVOCI of equity accounted associates— the Company Disposal of unrealized gains (losses) on financial assets at FVOCI of equity accounted associates— subsidiaries and associates Unrealized gain (loss) on financial assets measured at fair value through other comprehensive income— the Company Unrealized gain (loss) on financial assets measured at fair value through other comprehensive income—subsidiaries and associates Disposal of investments in equity instruments at fair value through other comprehensive income— the Company Disposal of investments in equity instruments at fair value through other comprehensive income—subsidiaries and associates Balance on December 31, 2020	Exchange differences on translation of foreign financial statements $ (22,674) 25,638 (3,608) 144 15,212 - - - - - - $ 14,712	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 112,601 - - - - 5,425 8,224 35,091 (4,500) (237,992) (4,356) (85,507)	Total 89,927 25,638 (3,608) 144 15,212 5,425 8,224 35,091 (4,500) (237,992) (4,356) (70,795)

• (m) Earnings per share

• (i) Basic earnings per share

The following table sets out the Company’s basic earnings per share calculated based on the profit attributable to the Company’s ordinary equity holders and the weighted average number of ordinary shares outstanding for 2020 and 2019:

• 1) Profit attributable to ordinary shareholders of the Company

Profit attributable to the Company	For the Years Ended December 31 2020 2019 $ 1,100,637 865,253
	2020 $ 1,100,637

(Continued)

258

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• 2) Weighted average number of ordinary shares outstanding

Weighted average number of ordinary shares outstanding Effect of capital reduction Effect of treasury shares Weighted average number of ordinary shares outstanding Earnings per share	For the Years Ended December 31 2020 2019 404,729 505,911 - (4,216) (44,314) (37,753) 360,415 463,942 $ 3.05 1.87
	2020 404,729 - (44,314)
	360,415
	$ 3.05

(ii) Diluted earnings per share

The calculation of the Company’s diluted earnings per share based on the profit attributable to the Company’s ordinary equity holders and the weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares is as follows:

• 1) Profit attributable to ordinary shareholders of the Company (diluted)

Profit attributable to ordinary shareholders of the Company (diluted)	For the Years Ended December 31 2020 2019 $ 1,100,637 865,253	For the Years Ended December 31 2020 2019 $ 1,100,637 865,253
	2020
	$ 1,100,637

• 2) Weighted average number of ordinary shares (diluted)

Weighted average number of ordinary shares(basic) Employee share bonus Weighted average number of ordinary shares outstanding (diluted) on December 31, 2020 Diluted earnings per share	For the Years Ended December 31 2020 2019 360,415 463,942 991 726 361,406 464,668 $ 3.05 1.86	For the Years Ended December 31 2020 2019 360,415 463,942 991 726 361,406 464,668 $ 3.05 1.86
	2020
	360,415 991 361,406 $ 3.05
		464,668
		1.86

• (n) Revenue from contracts with customers

• (i) Disaggregation of revenue

Primary geographical markets: Taiwan Major products: Rent revenue (Note)	For the Years Ended December 31 2020 2019 $ 20,513 17,813 $ 20,513 17,813
	2020 $ 20,513
	$ 20,513

Note: The Company recognized rental revenue from investment property for the years ended

December 31, 2020 and 2019 according to IFRS 16.

(Continued)

259

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

(ii) Contract balances

Contract balances
Notes and accounts receivable Less: allowance for impairment Total Current contract liabilities－advance sales receipts	December 31, 2020 $ 45 -	December 31, 2019 January 1, 2019 76 314 - - 76 314 590 737
	$ 45
	$ 711

(o) Remuneration to employees and directors

The Company’s Articles of Incorporation stipulate that if the Company nets a profit for the year, then a minimum of 1% shall be allocated as employee compensation and a maximum of 3.5% shall be allocated as directors’ remuneration. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The recipients of shares and cash may include the employees of the Company’s affiliated companies who meet certain conditions.

The Company estimated its remuneration to employees at $11,563 thousand and $10,919 thousand for 2020 and 2019, respectively; the Company also estimated its remuneration to directors at $40,471 thousand and $38,216 thousand for 2020 and 2019, respectively. The estimated amounts mentioned above were based on the profit before tax of each respective ending period, multiplied by the percentage of the remuneration to employees and directors, as specified in the Company’s article. The estimations were recognized as operating expenses. If the actual amounts differ from the estimated amounts, the differences shall be accounted as changes in accounting estimates and recognized as profit or loss in the following year. If the Board resolves to distribute stocks as employee compensation, the number of shares distributed as compensation is calculated based on the closing price of the common stock on the day before the Board’s resolution.

The Company estimated its remuneration to employees at $10,919 thousand and $1,096 thousand for 2019 and 2018, and remuneration to directors at $38,216 thousand and $3,838 thousand for 2019 and 2018, respectively. The actual amount of remuneration distributed to employees for 2019 and 2018 were $10,958 thousand and $1,135 thousand, reflecting an underestimation of $39 thousand for both years. The actual amount of remuneration distributed to directors for 2019 and 2018 were $38,352 thousand and $3,971 thousand, reflecting an underestimation of $136 thousand and $133 thousand for the respective years. The differences between the estimated amounts in the financial statements and the actual amounts distributed were accounted for as changes in accounting estimates, and were recognized as profit or loss for 2020 and 2019. Related information is available on the website of the Market Observation Post System.

(Continued)

260

LONG BON INTERNATIONAL CO., LTD. Notes to the Financial Statements

(p) Non-operating income and expenses

• (i) Interest income

The details of interest income were as follows:

Interest income from bank deposits Interest income from loans to other parties Other interest income Total interest income	For the Years Ended December 31 2020 2019 $ 879 29,997 31,532 3,758 - 3,788	For the Years Ended December 31 2020 2019 $ 879 29,997 31,532 3,758 - 3,788
	2020 $ 879 31,532 -
	$ 32,411	37,543

(ii) Other income

The details of the Company’s other income for 2020 and 2019 were as follows:

Dividend income Income from fines and penalties (Note) Remuneration to directors and supervisors Other income Total	For the Years Ended December 31 2020 2019 $ 157,460 110,168 12,645 - 4,350 3,584 1,329 4,519	For the Years Ended December 31 2020 2019 $ 157,460 110,168 12,645 - 4,350 3,584 1,329 4,519
	2020 $ 157,460 12,645 4,350 1,329
	$ 175,784	118,271

Note: The Company entered into a joint land development project with non-related parties. Since it was expected that the land transfer could not be completed by the agreed date specified in contract, both parties agreed to terminate the contract with compensation.

• (iii) Other gains and losses

The details of the Company’s other gains and losses for 2020 and 2019 were as follows:

Gains on disposal of property, plant, and equipment Gains on disposals of investments (Note) Foreign exchange losses Net gain (loss) on financial assets at fair value through profit or loss Others Other gains and losses, net	For the Years Ended December 31 2020 2019 $ 735 - - 1,085,707 (714) (90,894) 644,797 2,681 (4,356) (3,872) $ 640,462 993,622	For the Years Ended December 31 2020 2019 $ 735 - - 1,085,707 (714) (90,894) 644,797 2,681 (4,356) (3,872) $ 640,462 993,622
		993,622

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261

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

Note: The details of the Company’s gain on disposal in the year of 2019 were as follows:

For the Years Ended December 31, 2019	Date of **disposal **	Amount
Xiamen International Trade Financial Center Development Ltd. Long De Health Holding Hong Kong Ltd. XinyiInternational Co., Ltd. Rei Ju Construcation Co., Ltd. (Note 6(f))	2019.04 2019.05 2019.06 -
		$ 2,321,547 1,085,707

• (iv) Finance costs

The finance costs of the Company for 2020 and 2019 were detailed as follows:

Interest expense Interest expense on lease liabilities Finance related fee expense Finance costs, net	For the years ended December 31 2020 2019 $ 45,428 42,229 70 164 35,009 35,009 $ 80,507 77,402
	2020 $ 45,428 70 35,009
	$ 80,507

• (q) Financial instruments

• (i) Credit risk

  • 1) Maximum amount of credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

In respect of investment business, the Company conducts financial instrument transactions with banks with good credit standing and financial institutions which are graded above investment level. When the Company mostly engages in similar business activities and has similar economic characteristics, so that its ability to perform contracts is similarly affected by economic or other conditions, a significant concentration of credit risk occurs.

(Continued)

262

LONG BON INTERNATIONAL CO., LTD. Notes to the Financial Statements

3) Receivables and debt securities

The notes and accounts receivable are mainly rental income, the collection situations were well, and there was no credit risk.

Other financial assets at amortized cost includes other receivables and investments in domestic preferred shares. Except for fund loans and payments that provide with requested guarantees according to individual credit risk assessment, the rest are financial assets with low credit risk. Therefore, the 12 month expected credit loss amount is used to measure the loss allowance during the period(please refer to Note 4(f) for the explanation on how the company determines that the credit risk is low).

The loss allowance provision for 2020 and 2019 were determined as follows:

Balance on January 1, 2020 Reversal of impairment loss Balance on December 31, 2020 Balance on January 1, 2019 Reversal of impairment loss Balanace on December 31, 2019	Other receivable $ 8,267 (8,267) $ - $ 15,767 (7,500) $ 8,267

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

December 31, 2020 Nonderivative financial liabilities Fixed rate instruments Floating rate instruments Non-interest-bearing liabilities Lease liabilities December 31, 2019 Nonderivative financial liabilities Fixed rate instruments Floating rate instruments Non-interest-bearing liabilities Lease liabilities	Carrying amount	Contractual cash flows	Within **1year **	1-2 years	2-5 years	Over 5years
	$ 2,569,678 1,448,000 82,232 1,343	2,651,130 1,479,034 82,232 1,346	125,630 777,236 76,767 1,346	2,525,500 418,085 - -	- 283,713 - -	- - 5,465 -
	$ 4,101,253	4,213,742	980,979	2,943,585	283,713	5,465
	$ 2,466,135 784,000 81,350 7,110	2,568,779 825,667 81,350 7,183	25,500 190,227 76,714 5,837	25,500 11,562 - 1,346	2,517,779 623,878 - -	- - 4,636 -
	$ 3,338,595	3,482,979	298,278	38,408	3,141,657	4,636

The Company is not expecting the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(Continued)

263

LONG BON INTERNATIONAL CO., LTD. Notes to the Financial Statements

• (iii) Currency risk: The Company has no significant exposure to currency risk.

• (iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Company's financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.5% when reporting to management internally, which also represents the Company management's assessment of the reasonably possible interest rate change.

If the interest rate increased (decreased) by 0.5%, with all other variable factors remained constant the Company’s profit after tax would have decreased (increased) by $1,885 thousand and increased (decreased) by $1,619 thousand for the 2020 and 2019, respectively. This is mainly due to the Group’s borrowing and deposits at floating rates.

• (v) Other price risk

The securities price at the reporting date were performed using the same basis for the profit and loss as illustrated below:

Securities price at the reporting date 0.5% increase 0.5% decrease	For the Years Ended December 31 2020 2019 Other comprehensive income, net of tax Post-tax profit or loss Other comprehensive income, net of tax Post-tax profit or loss $ 1,994 19,908 1,690 12,923 $ (1,994) (19,908) (1,690) (12,923)	For the Years Ended December 31 2020 2019 Other comprehensive income, net of tax Post-tax profit or loss Other comprehensive income, net of tax Post-tax profit or loss $ 1,994 19,908 1,690 12,923 $ (1,994) (19,908) (1,690) (12,923)	For the Years Ended December 31 2020 2019 Other comprehensive income, net of tax Post-tax profit or loss Other comprehensive income, net of tax Post-tax profit or loss $ 1,994 19,908 1,690 12,923 $ (1,994) (19,908) (1,690) (12,923)	For the Years Ended December 31 2020 2019 Other comprehensive income, net of tax Post-tax profit or loss Other comprehensive income, net of tax Post-tax profit or loss $ 1,994 19,908 1,690 12,923 $ (1,994) (19,908) (1,690) (12,923)
	2020
	Other comprehensive income, net of tax $ 1,994	Post-tax profit or loss		Other comprehensive income, net of tax 1,690
		19,908
	$ (1,994)	(19,908)		(1,690)

• (vi) Fair value of financial instruments

• 1) Categories of financial instruments and fair value hierarchy

The fair value of financial assets at fair value through profit or loss, and financial assets at fair value through other comprehensive income is measured on a recurring basis. The following table sets out the carrying amount and fair value of the Company’s financial assets and liabilities, including the information on fair value hierarchy but excluding the optional information on financial instruments not measured at fair value with carrying amount reasonably close to their fair and lease liabilities.

(Continued)

264

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

Financial assets at fair value through profit or loss Non-derivative financial assets at fair value through profit or loss, mandatorily measured at fair value Financial assets at fair value through other comprehensive income Unquoted equity instruments at fair value through other comprehensive income Financial assets at fair value through profit or loss Non-derivative financial assets at fair value through profit or loss, mandatorily measured at fair value Financial assets at fair value through other comprehensive income Unquoted equity instruments at fair value through other comprehensive income		December 31, 2020	December 31, 2020	December 31, 2020	Total 3,981,640
	Book Value $ 3,981,640		FairValue
		Level 1 3,981,640	Level 2 -	Level 3 -
	$ 398,746	-	6,664	392,082	398,746
		December 31, 2019			Total 2,584,632
	Book Value $ 2,584,632		FairValue
		Level 1 2,584,632	Level 2 -	Level 3 -
	$ 338,014	-	10,752	327,262	338,014

• 2) Fair value valuation technique of financial instruments not measured at fair value

The assumptions and methods used in valuing financial instruments that are not measured at fair value are as follows:

• a) Financial assets and financial liabilities measured at amortized cost

If recent transaction prices or market maker quotes are available, the fair value is based on such information. If there is no quoted market price available, the fair value is determined by using valuation techniques and calculated as the present value of the estimated cash flows.

• 3) Fair value valuation technique of financial instruments measured at fair value

• a) Non-derivative financial instruments

Fair value measurement of financial instruments was based on quoted market prices if these prices were available in an active market. The quoted price of a financial instrument obtained from main exchanges and on the run bonds from Taipei Exchange can be used as a base to determine the fair value of the listed companies’ equity instrument and debt instrument of the quoted price in an active market.

(Continued)

265

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

A financial instrument is regarded as the quoted price in an active market if the quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency; and if those prices represent the actual and regularly occurring market transactions on an arm’s length basis. Otherwise, the market is deemed to be inactive. In general, market with low trading volume or high bid ask spreads is an indication of a non-active market.

The categories and nature of the fair value for the Company ’ s financial instruments which have active market are as below:

● Publicly traded stock, bank draft and bond with standard terms, conditions and traded in active market. The fair value is based on quoted market prices.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor. Fair value, measured by using valuation technique that can be extrapolated from either similar financial instruments or discounted cash flow method or other valuation techniques, including models, is calculated based on available market data at the reporting date. (For example, over the counter yield curve and Reuters Primary CP Rate average prices.)

The categories and nature of the fair value for the Group’s financial instruments which without an active market are as below:

● The main assumption behind this is that the estimated pre tax, pre depreciation, and pre amortization earnings of the investee company is added to the earnings multiplier derived from the comparable quoted price of the listed company. The estimate of the fair value of equity instruments has been adjusted due to the effect of the discount arising from the lack of market liquidity of the equity security.

• 4) Transfers between Level 1 and Level 2: None.

• 5) Reconciliation of Level 3 fair values

January 1, 2020 Total gains and losses Recognized in other comprehensive income Purchase Disposal December 31, 2020 January 1, 2019 Total gains and losses Recognized in other comprehensive income Disposal December 31, 2019	Fair value through other comprehensive income Unquoted equity instruments $ 327,262 32,102 75,218 (42,500)
	$ 392,082
	$ 324,163 42,629 (39,530)
	$ 327,262

(Continued)

266

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

The aforementioned total gains or losses were classified as ‚unrealized gains or losses from financial assets at fair value through other comprehensive income‛. The gains or losses attributable to the assets held as of December 31, 2020 and 2019, were as follows:

Total gains and losses Recognized in other comprehensive income (classified as‚unrealized gains or losses from financial assets at fair value through other comprehensive income‛)	2020 $ 21,163	2019 28,619

• 6) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Company’s financial instruments that use Level 3 inputs to measure fair value include fair value through other comprehensive income—equity investments.

Most of the Company’s financial instruments that use Level 3 inputs have only one significant unobservable input. Only equity investment with no active markets have multiple significant unobservable inputs. The significant unobservable inputs of the equity investments without an active market are independent, therefore, there is no correlation between them.

Quantified information on significant unobservable inputs was as follows:

Item Financial assets at fair value through other comprehensive income–equity investments without an active market Financial assets at fair value through other comprehensive income–equity investments without an active market	Valuation technique Comparable listed companies approach Asset Method	Significant unobservable input Inter-relationship between significant unobservable inputs and fair value measurement ‧Value multiple (0.4~8.4 and 0.74~15.41 as of December 31, 2020 and 2019 ) ‧Market liquidity discount rate (31.05%~32.28% and 31.06%~32.28% as of (December 31, 2020 and 2019) ‧The higher the multiple, the higher the fair value. ‧The higher the market liquidity discount rate, the lower the fair value. ‧Market liquidity discount rate (32.28% as of both (December 31, 2020 and 2019) ‧Control discount (6.45% and 13.64%~16.67% as of December 31, 2020 and 2019) ‧The higher the market liquidity discount rate, the lower the fair value. ‧The higher the control discount, the lower the fair value.	Inter-relationship between significant unobservable inputs and fair value measurement

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267

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• 7) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The Company’s measurement on the fair value of financial instruments is deemed reasonable despite different valuation models or parameters may lead to different results. For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects on profit or loss and other comprehensive income:

December 31, 2020 Financial assets fair value through other comprehensive income Equity investments without an active market Equity investments without an active market December 31, 2019 Financial assets fair value through other comprehensive income Equity investments without an active market Equity investments without an active market	Input	Upward or downward	Other comprehensive income Favorable effect Unfavorable effect 781 (770) 1,706 (1,675) 981 (3,721) 1,360 (1,338)
			Favorable effect
	Market liquidity discount Control discount Market liquidity discount Control discount	1% 1% 1% 1%	781 1,706 981 1,360

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

• (r) Financial risk management

• (i) Overview

The Company have exposures to the following risks from its financial instruments:

• 1) Credit risk

• 2) Liquidity risk

• 3) Market risk

This note expressed the information on risk exposure and objectives, policies and process of risk measurement and management of the Company. For more disclosures about the quantitative effects of these risk exposures, please refer to respective notes in the report.

• (ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The financial management department, which reports regularly to the Board of Directors on its activities to develop and monitor the Company’s risk management policies.

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LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Company Audit Committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and financial assets.

• 1) Accounts and other receivables

The Company’s policy requires client evaluation and credit verification prior to conducting transactions. In order to reduce credit risk, the Company continuously evaluated the recovery of accounts receivable and other receivables. The Company continuously evaluates the credit risk and credit ranking of customers. When necessary, the counterparty will be required to provide guarantees or others to avoid from credit risk.

2) Investment and securities payments receivable

The exposure to credit risk for the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Company’s finance department. The Company only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Company does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

• 3)

Guarantees

The Company’s policy is to provide financial guarantees only for subsidiaries with over 50% of their voting shares held by the Company. As of December 31, 2020 and 2019, the Company has not provided any endorsement or guarantee for any external party. For the endorsements and guarantees provided by the Company, please refer to Note 13 for details.

(Continued)

269

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

(iv) Liquidity risk

The Company manages and maintains sufficient cash and cash equivalents so as to cope with ’ its operations and mitigate the effects of fluctuations in cash flows. The Company s management supervises the banking facilities in compliance with the terms of loan agreements.

The loan was an important source of liquidity for the Company. As of December 31, 2020 and 2019, the Company had unused short term bank facilities both of zero.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable range, while optimizing the return.

• 1) Currency risk: None.

• 2) Interest rate risk

The policy of the Company is to adopt the best interest rate portfolio for financial liabilities to be reviewed and controlled by the management to control risk exposure to interest rate fluctuations.

(s) Capital management

The Company sets its objectives for managing capital to sustain the future development of the business , to continue to provide a return on shareholders, and other related parties, and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the dividend payment and reduce the capital for redistribution to shareholders, issue new shares or sell assets to settle any liabilities.

The Company use the debt to equity ratio to manage capital. This ratio is calculated by dividing the net liabilities by the total capital. The net debt from the balance sheet are derived from the total liabilities less cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, other equity and other equity interest plus net debt.

The strategies of capital management of the Company were the same between 2020 and 2019. Debt-to-equity ratios at December 31, 2020 and 2019 were as follows:

Total liabilities Less: Cash and cash equivalents Net debt Total equity Adjusted capital Debt-to-equity ratio	December 31, 2020 $ 4,167,393 (976,771)	December 31, 2020 $ 4,167,393 (976,771)	December 31, 2019 3,476,871 (1,188,749)
	3,190,622 9,261,490		2,288,122 8,310,586
	$ 12,452,112		10,598,708
		25.62%	21.59%

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LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

As of December 31, 2020, the debt-to-equity ratio of the Company increased, mainly due to the increased short-term borrowings for operating. There were no changes in the Company’s approach to capital management during the year.

• (t) Investing and financing activities not affecting current cash flow

The non cash transactions for investing and financing activities of the Company for 2020 was as follows:

• (i) For right-of-use assets under leases.

• (ii) There were not significantly on the non-cash transactions for investing and financing activities of the Company for 2020 and 2019.

(7) Related-party transactions:

• (a) Related party name and relationship

The followings are related parties and subsidiaries that have had transactions with the Company during the periods covered in the parent company only financial statements:

Related Parties Everwin Investment Co, Ltd. ( Everwin Investment) Long Jee Holding(s) Pte Ltd. ( Long Jee Holding(s)) Long Fu Real Estate Development Co., Ltd. ( Long Fu Real Estate) Long Bao Co., Ltd. ( Long Bao) Long De International Development Co., Ltd. ( Long De International) Long Fu Real Estate Development Co., Ltd. ( Long Fu Real Estate) San Jhih Cih An Yuan Ltd.( Cih An Yuan) Long Hui Development Co., Ltd.( Long Hui Development) Bao Hui Development Co., Ltd.( Bao Hui Development) (Note 3) North Bay Recreation Co., Ltd.( North Bay) Rei Ju Construction Co., Ltd. (Rei Ju Construction) ReiYu Green Energy Technology Co., Ltd. (ReiYu Green Energy) Ryan Development Co., Ltd. (Ryan Development) Rei Cheng Construction Co., Ltd. (Rei Cheng Construction) Xiamen Rei Ju Construction Engineer Co.(Xiamen Rei Ju) ReBio Green Innovation Co., Ltd. (ReBio) Sheng Ji Interior Decoration CO., LTD. (Sheng Ji) Rei Ying Construction Co, Ltd. (Rei Ying Construction) Rei Jhao Engineer Ltd. (Rei Jhao Engineer) Fortune Base Development Co., Ltd. (Fortune Base Development) Global Funeral Services Co., Ltd. (Global Funeral Services) Heng Fu Development Co., Ltd. ( Heng Fu Development) Heng Chuang Industrial Co., Ltd. ( Heng Chuang Industrial)

Relations with the Consolidated Group

Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Subsidiaries Associate of the Group (Note1) Associate of the Group (Note1) Associate of the Group (Note1) Associate of the Group (Note1) Associate of the Group (Note1) Associate of the Group (Note1) Associate of the Group (Note1) Associate of the Group Associate of the Group Legal person of ultimate parent (Note2) Legal person of ultimate parent (Note2) Substantive related party Substantive related party

(Continued)

271

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

Related Parties Han Yu Investment Co, Ltd. ( Han Yu Investment) You Long Construction Development Co., Ltd. (You Long Construction) Ming Jhu Investment Ltd. ( Ming Jhu Investment) Sung Gang Co., Ltd.(Sung Gang) Si Wang Investment Co., Ltd. (Si Wang Investment) Ontario Investment Co., Ltd. (Ontario Investment) North Bay Golf Sports Development Foundation (North Bay Foundation)	Relations with the Consolidated Group
	Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Its Chairman is the Chairman of the Company

• Note 1: It has been a consolidated subsidiary since March 4, 2019.

• Note 2: It has been the legal person of the ultimate parent since June 27, 2019.

• Note 3: It was renamed Dong Hua International of Golf Recreation Co., Ltd. on February 25, 2021.

• (b) Significant related party transactions

(i) Leases

• 1) The Company leases offices to related parties, and the rent collection are detailed as follows:

Associates Subsidiaries	For the Year Ended December 31 2020 2019 $ 11 276 1,676 1,494 $ 1,687 1,770
	2020
	$ 11 1,676 $ 1,687

• 2) On March 2016, the Company entered into lease contracts that ran for a period to five years with other related parties, Heng Fu Development Co., Ltd. The contract value, with reference to the office rental prices in the vicinity, totaled $27,453 thousand. The recognized interest expense for 2020 and 2019 amounted to $68 thousand and $151 thousand, respectively. As of December 31, 2020 and 2019, the balance of lease liabilities amounted to $1,343 thousand and $6,661 thousand, respectively.

(ii) Receivables from Related Parties

The receivables due related parties were as follows:

Account title Relationship	December 31, 2020 December 31, 2019 $ 3 13 - 3
Notes receivable Subsidiaries Accounts receivable Subsidiaries
	$ 3 16

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272

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

(iii) Loans to related parties

The loans to related parties were as follows:

			December 31,	December 31,
Account title	Relationship		2020	2019
Others receivable	Subsidiaries－Everwin Investment Co, Ltd.	$	-	881,230

The interest rates of loans to related-party was calculated based on the average interest rate of short term borrowings from financial institutions of the Company in the current year, and unsecured loans. The interest recognized interest income were $9,782 thousand and $1,230 thousand for 2020 and 2019. The receivables were zero on December 31, 2020.

(iv) Others

The other transactions to related parties were as follows:

Account title Related Parties	Account title Related Parties	December 31, 2020 December 31, 2019 $ 471 471 41 29 17,296 17,369 915 915 189 195 2020 2019 4,325 3,549 Date of the last transfer Basis of pricing Account title
Prepayments Other related parties Advance receipt Subsidiaries Other current financial liabilities Subsidiaries－Long Jee Holding(s) Refundable deposits Other related party－Heng Fu Development Guarantee deposits received Subsidiaries Other gains and losses Account title Related Parties Remuneration to employees and directors Subsidiaries $ Property transactions 1) Property, plant and equipment acquired Category of relatedparty Transaction item Date of transaction Transaction amount
For the Year Ended December 31, 2020 Other related partie －Si Wang Investment Land at Jyuguang, Wanhua District, Taipei City Other related partie －Fortune Base Development Land and buildings at Gongyuan, Jhongjheng Dist., Taipei City Other related partie －Ontario Investment Land and buildings at Rongxing, Jhongshan Dist., Taipei City	March 6, 2020 $ 32,000 March 6, 2020 $ 86,275 May 14, 2020 $ 208,366	May 9, 2018 Fairness opinionInventories September 8, 2011 Appraisal Report Investment property July 27, 1995 Appraisal Report Investment property

(v) Other gains and losses

(vi) Property transactions

(Continued)

273

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

==> picture [434 x 80] intentionally omitted <==

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

Category of Date of Transaction Date of the Basis of Account
related party Transaction item transaction amount last transfer pricing title
For the Year
Ended December
31, 2019
Other related partie Land at Zhixing, Wanhua November 12, $ 104,815 November 08, Appraisal Investment
－Fortune Base District, Taipei City 2019 2013 Report
(Note)
Development
----- End of picture text -----

• Note: As of December 31, 2019, the prepayments for the aforementioned transactions amounted to $52,407 thousand (recognized as inventories).

• 2) Sale of property, plant and equipment

The details of the company's sale of investment property to related parties are summarized as follows:

For the Year Ended December 31 2020 2019 Disposal of the price Gain on disposal Disposal of the price Gain on disposal $ 51,593 21,678 - -	For the Year Ended December 31 2020 2019 Disposal of the price Gain on disposal Disposal of the price Gain on disposal $ 51,593 21,678 - -
2020 Disposal of the price Gain on disposal $ 51,593 21,678
Disposal of the price $ 51,593	Disposal of the price -

• Note: It is a deduction of the unrealized interest account for the investments accounted for using equity method.

• 3) Financial assets acquired

The Company’s acquisition of ownership interests in subsidiaries were as follows:

Relationship	For the Year Ended December 31, 2020 Number of shares Purpose Acquisition price	For the Year Ended December 31, 2020 Number of shares Purpose Acquisition price
Subsidiary－Everwin Investment Relationship	12,319,762 Rei Ju Construction Co., Ltd.$ 201,874 For the Year Ended December 31, 2019 Number of shares Purpose Acquisition price	$ 201,874
Subsidiary－Everwin Investment Other related party－Fortune Base Development Other related party－Heng Chuang Industrial Other related party－Global Funeral Services Other related party－Han Yu Investment Other related party－Ming Jhu Investment Other related party－Sung Gang	600,000 Long Bao Co., Ltd. 269,500 Rei Ju Construction Co., Ltd. 502,000 Rei Ju Construction Co., Ltd. 694,000 Rei Ju Construction Co., Ltd. 339,040 Rei Ju Construction Co., Ltd. 11,735,854 Rei Ju Construction Co., Ltd. 5,197,000 Rei Ju Construction Co., Ltd. 19,337,394	$ 604,250 5,390 10,040 13,880 6,781 234,717 103,940
		$ 978,998

The price of equity interests acquired by the Company from the related parties was determined based on the appraisal report and the bilateral negotiations.

(Continued)

274

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• (c) Key management personnel compensation

Compensation to key management personnel comprised:

Short-term employee benefits Post-employment benefits	For the Years Ended December 31 2020 2019 $ 11,464 8,512 216 217	For the Years Ended December 31 2020 2019 $ 11,464 8,512 216 217
	2020
	$ 11,464 216
	$ 11,680	8,729

(8) Pledged assets:

The book value of the Consolidated the Company’s pledged assets is as follows:

Pledged assets	**Subject of collateral **	December 31, 2020 $ 3,352,432 1,015,487 359,288 - 567,733	December 31, 2019 2,024,424 910,673 - 190 568,163 3,503,450
Financial assets at fair value through profit or loss Inventories Investment property Other current financial assets Other non current financial assets	Bank borrowings, commercial papers and ordinary corporate bonds issued Bank borrowings Bank borrowings Bank borrowings Ordinary corporate bonds
		$ 5,294,940

(9) Commitments and contingencies:

• (a) Unrecognized contractual commitments

• (i) As of December 31, 2020, details on the co-development contracts entered into with landowners were as follows:

Forms of co-development

Name of construction project

Co-developments with landowners Chengde Road Project and Xiyuan Road Project

(10) Losses due to major disasters:None

(11) Significant subsequent events:None

(Continued)

275

LONG BON INTERNATIONAL CO., LTD. Notes to the Financial Statements

(12) Other:

(a) The summary of employee benefits, depreciation, and amortization, by function, was as follows:

By function By item	For the Years ended December 31	For the Years ended December 31	For the Years ended December 31	For the Years ended December 31	For the Years ended December 31	For the Years ended December 31
	2020			2019
	Operating cost	Operating Expense	Total	Operating cost	Operating Expense	Total
Employee benefits
Salary	-	37,008	37,008	-	38,261	38,261
Labor and health insurance	-	1,978	1,978	-	2,403	2,403
Pension	-	1,159	1,159	-	1,249	1,249
Remuneration to directors	-	44,027	44,027	-	41,242	41,242
Others	-	692	692	-	792	792
Depreciation	7,324	7,630	14,954	6,986	8,099	15,085
Depletion	-	-	-	-	-	-
Amortization	-	1,026	1,026	-	1,791	1,791

• (b) The extra information of number of employees and employee benefits for the years ended December 31, 2020 and 2019 were as follows:

31, 2020 and 2019 were as follows:
		2020	2019
Number of employees		27		33
Number of directors who were not employees		4		6
The average employee benefit	$	1,776		1,582
The average salaries	$	1,609		1,417
Adjustments of average employee salary expense		13.55%
Remuneration to supervisors	$	-	-

• (c) The Company’s salary and remuneration policy (including directors, managers and employees) is as follows:

• (i) The Company’s directors’ salary and remuneration policy is that when directors perform their duties in the Company, regardless of the Company’s profit or loss, the Company has to pay. The Company authorizes the Board of Directors to determine the remuneration in accordance with industry standards and relevant laws and regulations. In addition, please refer to Note 6 (o) for the remuneration of directors.

• (ii) The Company’s employee salary and remuneration policy is to refer to the performance appraisal sheet as the basis for approving salary, bonuses, annual salary adjustments or promotion every six months. Please note 6 (o) for the details of employee remuneration regulations.

(Continued)

276

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

(13) Other disclosures

• (a) Information on significant transactions

The following is the information on significant transactions required by the ‚Regulations Governing the Preparation of Financial Reports by Securities Issuers‛ for the Company for the as of December 31, 2020:

(i) Loans to other parties:

(In Thousands of New Taiwan Dollars)

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral	Collateral	Individual funding loan limits	Maximum limit of fund financing
													Item	Value
0	The Company	Sin Wei Jie Construction Co., Ltd.	Other Payables- Other	Yes	300,000	-	(Note 1)	10%	2 (Note 5)	-	Operating capital	-	None	-	926,149 (Note 3)	3,704,596 (Note 3)
0	The Company	Everwin Investment Co, Ltd.	Other Payables- Other	Yes	880,000	-	(Note 2)	1.5%	2 (Note 5)	-	Significant investment projects	-	None	-	926,149 (Note 3)	3,704,596 (Note 3)
1	Rei Ju Construction Co., Ltd.	Sheng Ji Interior Decoration Co., Ltd.	-	Yes	30,000	30,000	-	2.50%	2 (Note 5)	-	Operating capital	-	None	-	144,907 (Note 4)	579,628 (Note 4)
1	Rei Ju Construction Co., Ltd.	Rei Cheng Construction Co., Ltd.	-	Yes	30,000	30,000	-	2.50%	2 (Note 5)	-	Operating capital	-	None	-	144,907 (Note 4)	579,628 (Note 4)
1	Rei Ju Construction Co., Ltd.	ReBio Green Innovation Co., Ltd.	-	Yes	30,000	30,000	-	2.50%	2 (Note 5)	-	Operating capital	-	None	-	144,907 (Note 4)	579,628 (Note 4)
1	Rei Ju Construction Co., Ltd.	ReiYu Green Energy Technology Co., Ltd.	-	Yes	30,000	30,000	-	2.25%	2 (Note 5)	-	Operating capital	-	None	-	144,907 (Note 4)	579,628 (Note 4)
1	Rei Ju Construction Co., Ltd.	Ryan Developmen t Corp.	Other Payables- Other	Yes	136,000	136,000	60,000	2.25%	2 (Note 5)	-	Operating capital	-	None	-	144,907 (Note 4)	579,628 (Note 4)
2	Long Hui Development Co., Ltd.	North Bay Recreation Co., Ltd.	-	Yes	45,000	45,000	-	2%	2 (Note 5)	-	Short-term financing	-	None	-	57,563 (Note 4)	230,252 (Note 4)

• Note 1: The Company has recovered the principal amount of $200,000 thousand and the interest of $19,791 thousand on December 31, 2020.

• Note 2: The Company has recovered the principal amount of $880,000 thousand on November 26, 2020 and the interest of $9,782 thousand.

• Note 3: The total amount of loans provided by the Company to other parties and to a single party shall not exceed 40% and 10% of the Company’s net worth recognized in its latest financial statements, respectively.

• Note 4: The total amount of loans provided by this company to other parties and to a single party shall not exceed 40% and 10% of this company’s net worth recognized in its latest financial statements, respectively.

Note 5: Financing purposes:

1.Trading counterparty

• 2.Entities with short-term financing needs

Note 6: The aforementioned transactions have been eliminated when compiling the consolidated financial statements.

(Continued)

277

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

• (ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during theperiod	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationshi p with the Company
0	The Company	Long Bao Co.,Ltd.	2 (Note 6)	5,556,894 (Note 1)	100,000	-	-	-	- %	11,113,788 (Note 1)	Y	N	N
0	The Company	Everwin Investment Co,Ltd.	2 (Note 6)	5,556,894 (Note 1)	1,100,000	1,100,000	818,000	-	11.88%	11,113,788 (Note 1)	Y	N	N
1	Everwin Investment Co,Ltd.	The Company	3 (Note 6)	5,534,473 (Note 2)	2,600,000	2,600,000	-	-	93.96%	5,534,473 (Note 2)	N	Y	N
2	Rei Ju Construction Co.,Ltd.	Rei Cheng Construction Co.,Ltd.	2 (Note 6)	6,153,638 (Note 3)	692,800	464,630	-	-	32.06%	12,307,276 (Note 3)	Y	N	N
2	Rei Ju Construction Co., Ltd.	ReiYu Green Energy Technology Co.,Ltd.	2 (Note 6)	6,153,638 (Note 3)	1,948	1,948	-	-	0.13%	12,307,276 (Note 3)	Y	N	N
2	Rei Ju Construction Co.,Ltd.	Ryan Development Corp.	2 (Note 6)	4,347,207 (Note 3)	725,000	725,000	497,701	-	50.03%	7,245,345 (Note 3)	Y	N	N
3	ReiYu Green Energy Technology Co.,Ltd.	Rei Ju Construction Co., Ltd	3 (Note 6)	7,000,000 (Note 4)	1,346,622	24,557	-	-	30.51%	10,500,000 (Note 4)	N	Y	N
4	Rei Cheng Construction Co.,Ltd.	Rei Ju Construction Co.,Ltd.	3 (Note 6)	5,950,000 (Note 5)	3,955,050	3,955,050	-	-	7,032.25%	8,925,000 (Note 5)	N	Y	N

• Note 1: The total amount of guarantees and endorsements provided by the Company for external parties shall not exceed 120% of its net worth for the current period , and the guarantees and endorsements for a single entity shall not exceed 60% of its net worth for the period.

• Note 2: Limit on guarantees and endorsements provided by Everwin Investment Co, Ltd.: The total amount provided for a single subsidiary, whose ordinary shares of more than 90% are directly or indirectly held by the Company, shall not exceed 40% of the Company’s current net value. As for other entities, the total amount provided for any single one of them shall not exceed 25% of the Company’s current net value. For entity holding 100% ordinary share of Everwin Investment Co, Ltd. or companies of which Everwin Investment Co, Ltd. holds 100% ordinary shares, the limit on guarantees and endorsements provided for any single one of them shall not exceed 200% of the current net value of the Company.

• Note 3: The limit on guarantees and endorsements of Rei Ju Construction Co., Ltd.: The total amount provided for external construction projects and a single construction project shall not exceed 15 times and 7.5 times of the total value of the Company’s paid-in capital, respectively. The total amount of guarantees and endorsements shall not exceed 5 times of the net value of the Company, and the guarantees and endorsements for a single entity shall not exceed 3 times of the current net value of the Company.

• Note 4: The limit on guarantees and endorsements provided by ReiYu Green Energy Technology Co., Ltd.: The total amount guarantees for external construction projects and for the construction projects of a single entity shall not exceed 150 times and 100 times of the total value of the paid-in capital, respectively.

• Note 5: The limit on guarantees and endorsements provided by Rei Cheng Construction Co., Ltd.: The total amount guarantees for external construction projects and for the construction projects of a single entity shall not exceed 150 times and 100 times of the total value of the paid-in capital, respectively.

• Note 6: Seven categories of relationship with the endorser/guarantor:

• Trading counterparty

• The Company directly or indirectly holds more than 50% voting right.

• Other companies directly or indirectly hold more than 50% voting right of the Company.

• The Company directly or indirectly holds more than 90% voting right.

• A company that is mutually protected under contractual requirements based on the needs of the contractor.

• A company that is endorsed by all the contributing shareholders in accordance with their shareholding ratio due to joint investment relationship.

• Under the Consumer Protection Act, performance guarantees for presale contracts for companies in the same industry.

(Continued)

278

LONG BON INTERNATIONAL CO., LTD. Notes to the Financial Statements

(iii) Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of Shares and New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Endingbalance	Endingbalance	Endingbalance		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Stock:
〃	Ta Chen Stainless Pipe Co., Ltd.	－	Current financial assets at fair value throughprofit or loss	15,722	492,113	0.95%	492,113	Partial pledge
〃	Taisun Enterprise Co.,Ltd.	－	〃	123,030	3,395,628	24.61%	3,395,628	Partial pledge
	TatungCo.	－	〃	1,500	39,675	0.06%	39,675
〃	Right Way Industrial Co.,Ltd.	－	〃	4,813	51,977	2.95%	51,977
〃	Fund:
〃	Emerging Market Bond Fund at maturity	－	〃	200	2,247	- %	2,247
Everwin Investment Co,Ltd.	Stock:
〃	Ta Chen Stainless Pipe Co.,Ltd.	－	〃	9,541	298,621	0.58%	298,621	Partial pledge
〃	Right Way Industrial Co.,Ltd.	－	〃	3,385	36,558	2.07%	36,558
〃	Taisun Enterprise Co.,Ltd.	－	〃	31,434	867,578	6.29%	867,578	Partial pledge
	Corporate Bond:
〃	PKFOUN bond (US Dollar)	－	〃	-	1,919	- %	1,919
Rei Ju Construction Co.,Ltd.	Fund:
〃	Yuanta Asia Pacific (ex-Japan) Investment Grade Government Bond Index Fund	－	〃	500	4,822	- %	4,822	Pledged as colletral
〃	Invesco Quality Fixed Maturity Emerging Market Bonds 2023	－	〃	16	4,656	- %	4,656
The Company	Stock:
〃	The Reputation International Construction Co., Ltd.	－	Non-current financial assets at FVOCI	9,057	181,689	9.06%	181,689	Note 1
〃	M Radio Broadcasting CO., Ltd.	－	〃	1,009	4,191	12.32%	4,191	〃
〃	Widedoctor (International) Enterprise Co., Ltd.	－	〃	538	4,255	19.92%	4,255	〃
〃	J-Metrics Technology Co., Ltd.	－	〃	600	10,085	2.22%	10,085	〃
〃	Chia Ya Investment Co., Ltd.	－	〃	1,200	70,077	8.00%	70,077	〃
〃	New Image Medical Co.,Ltd.	－	〃	1,283	19,761	4.75%	19,761	〃
〃	Chang Hong Energy Technology Co., Ltd.	－	〃	3,982	26,556	3.24%	26,556	〃
〃	You Long Construction Development Co., Ltd.	Substant related party	i 〃	2,400	75,468	9.23%	75,468	〃
〃	Grand Green EnergyCo.,Ltd.	－	〃	560	6,664	1.35%	6,664	Note 2

(Continued)

279

LONG BON INTERNATIONAL CO., LTD. Notes to the Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title		Endingbalance	Endingbalance		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
Everwin Investment Co,Ltd.	Stock:
〃	J-Metrics Technology Co., Ltd	－	Non-current financial assets at FVOCI	600	10,085	2.22%	10,085	Note 1
〃	Linkou Recreation Co.,Ltd.	—	〃	-	14,425	- %	14,425	〃
〃	Grand Green EnergyCo.,Ltd.	－	〃	940	11,186	2.27%	11,186	Note 2
Rei Ju Construction Co.,Ltd.	Stock:
〃	Long Bon International Co., Ltd.	Ultimate parent	〃	36,609	525,333	9.27%	525,333	Note 3
〃	Chia Ya Investment Co., Ltd.	－	〃	300	17,519	2.00%	17,519	Note 1
〃	New Image Medical Co.,Ltd.	－	〃	321	4,943	1.19%	4,943	〃
〃	Taiwan Semiconductor Manufacturing Co.,Ltd.	－	〃	43	22,790	- %	22,790
North Bay Recreation Co., Ltd.	.Preferred Share of Horseshoe International Enterprise Co., Ltd.	－	Non-current financial assets at amortized cost	42	624	0.01%	624
〃	Preferred Share of Tashee Recreation Co.,Ltd.	－	〃	-	20	- %	20
Rei Ju Construction Co., Ltd.	Preferrec share of Tan Shi Construction Co., Ltd	－	〃	3,000	79,980	100.00%	79,980

Note 1: The stock is not publicly traded and quoted and was therefore presented according to the appraisal report as a reference.

Note 2: The emerging market stock is presented in its market value on December 31, 2020.

• Note 3: Pursuant to the clauses of the loan agreement, document related to the exercise of pledge of 35,680 thousand shares have been signed to the financial institution.

• (iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:

he capital stock:	he capital stock:	he capital stock:	he capital stock:	he capital stock:
					(In Thousands of Shares and New Taiwan Dollars)
Name of company	Category and name of security	Account name	Name of counter-part y	Relationship with the company	BeginningBalance		Purchases		Sales				EndingBalance
					Shares	Amount	Shares	Amount	Shares	Price	Cost	Gain (loss) on disposal	Shares	Amount
The Company	Taisun Enterprise Co., Ltd.	Current financial assets at fair value through profit or loss	Non-related party	-	90,909	2,009,089	32,121	749,454 (Note 2)	-	-	-	-	123,030	3,395,628
The Company	Long Fu Real Estate Development Co.,Ltd.	Investments accounted for using equity method	-	Subsidiary	100	818	69,900	694,017 (Note 1)	-	-	-	-	70,000	694,835
Everwin Investment Co, Ltd.	Long Hui Development Co., Ltd.	Investments accounted for using equity method	-	Subsidiary	-	-	56,000	575,630 (Note 1)	-	-	-	-	56,000	575,630
Long Hui Developmen Co., Ltd.	North Bay Recreation Co., Ltd.	Investments accounted for using equity method	Non-related party	Subsidiary	-	-	7,391	461,748 (Note 1)	-	-	-	-	7,391	461,748

Note 1: Including recognized profit or loss of equity-accounted investment, increase or decrease in capital, and adjustments to capital surplus.

Note 2: The purchase amounts for this period includes the valuation adjustments relating to financial assets recognized at fair value.

(Continued)

280

LONG BON INTERNATIONAL CO., LTD.

Notes to the Financial Statements

(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:

(In Thousands of New Taiwan Dollars)

Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter-part y	Relationship with the Company	If the counter-party is a related party, disclose theprevious transfer information	If the counter-party is a related party, disclose theprevious transfer information	If the counter-party is a related party, disclose theprevious transfer information	If the counter-party is a related party, disclose theprevious transfer information	References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationship with the Company	Date of transfer	Amount
Everwin Investment Co., Ltd.	Land and building	November 27, 2019	1,856,470	1,806,157 9	Dong Hua Recreation Co., Ltd.and persons	Non-related party	-	-	-	-	Court auction price	For future Operating needs	-
Long Fu Real Estate Development Co., Ltd.	Land	March 25, 2020	475,482	475,482 5	persons	Non-related party	-	-	-	-	Appraisa report	l For future Operating needs	-
Rei Ju Construction Co., Ltd.	Land and building	December 21, 2020	921,121	230,280 (Note)	Global Funeral Services Co., Ltd.	Relatedparty	Sin Cai International Development Co., Ltd.	Non-related party	April 28, 2011	-	Appraisa report	l For future Operating needs	-

Note: On March 22, 2021, the subsidiary rescinded a sale and purchase contract previously entered into with the Global Funeral Services Co., Ltd. due to capital adjustment.

• (vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None

• (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None

• (ix) Trading in derivative instruments: None

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2020 (excluding information on investees in Mainland China):

(In Thousands of Shares and New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original inve	stment amount	Balance a	s of December 31,	2020	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31,2020	December 31,2019	Shares (thousands)	Percentage of wnership	Carrying value
Long Bon International Co., Ltd.	Everwin Investment Co., Ltd.	Taiwan	Investment	1,	2 1,2	244,025	100.00%	2,798,689	178,204	168,427
〃	Long Bao Co., Ltd.	Taiwan	Funeral Service		6 6	60,000	100.00%	615,904	14,547	14,547
〃	Long Jee Holding(s) Pte Ltd	Singapore	Property investment and development		1	17,979	96.89%	10,075	-	-
〃	Rei Ju Construction Co., Ltd.	Taiwan	Architecture andcivil engineering	1,	9	73,928	90.10%	796,504	310,430	276,309
〃	Long Fu Real Estate Development Co., Ltd.	Taiwan	Funeral Service		7	70,000	100.00%	694,835	(4,983)	(4,983)
〃	Long De International Development Co., Ltd.	Taiwan	Investments		-	100	100.00%	975	(25)	(25)
Everwin Investment Co, Ltd.	Rei Ju Construction Co., Ltd.	Taiwan	Architecture andcivil engineering	-	2	-	- %	-	310,430	Exempt from disclosure
〃	Long Hui Development Co., Ltd.	Taiwan	Investments		5 -	56,000	100.00%	575,630	(1,327)	〃
〃	Bao Hui Development Co., Ltd.	Taiwan	Exercise facility and amenity		-	3,000	100.00%	31,294	1,294	〃
Long Fu Real Estate Development Co., Ltd.	San Jhih Cih An Yuan Ltd.	Taiwan	Funeral Service		-	-	100.00%	(42)	(61)	〃
Long Hui Development Co., Ltd.	North Bay Recreation Co., Ltd	Taiwan	Exercise facility and amenity		4 -	7,391	82.13%	461,748	(28,879)	〃
Rei Ju Construction Co., Ltd.	Rei Cheng Construction Co., Ltd.	Taiwan	Architecture andcivil engineering			5,950	100.00%	66,742	14,112	〃
〃	ReiYu Green Energy Technology Co., Ltd.	Taiwan	Architecture andcivil engineering			7,000	100.00%	80,501	8,281	〃
〃	Ryan Development Corp.	Taiwan	Property investment and development		3 1	25,000	100.00%	212,862	(13,667)	〃
〃	Rei Jhao Engineer Ltd.	Taiwan	Architecture andcivil engineering		-	99	19.80%	1,064	373	〃	Associate

(Continued)

281

LONG BON INTERNATIONAL CO., LTD. Notes to the Financial Statements

Name of investor	Name of investee	Location	Main businesses and products	Original inves	tment amount	Balance a	s of December 31,	2020	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31,2020	December 31,2019	Shares (thousands)	Percentage of wnership	Carrying value
Rei Ju Construction Co., Ltd.	Uhome Marketing Co., Ltd.	Taiwan	Integrated internet marketin	-		-	- %	-	(693)	Exempt from disclosure	Associate
〃	Rei Ying Construction Co., Ltd.	Taiwan	Property investment and development		-	390	39.00%	2,765	(2,910)	〃	〃
ReiYu Green Energy Technology Co., Ltd.	Sheng Ji Interior Decoration Co., Ltd.	Taiwan	Interior Decoration			2,000	100.00%	25,593	127	〃
〃	ReBio Green Innovation Co., Ltd.	Taiwan	Environmental Engineering			200	100.00%	255	(539)	〃

(c) Information on investment in Mainland China:

• (i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars and U.S. Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January1,2019	Investment flows Outflow Inflow	Investment flows Outflow Inflow	Accumulated outflow of investment from Taiwan as of December 31,2020	Net income (losses) of the investee	Percentage of ownership	Investment income (losses)	Book value	Accumu-lated remittance of earnings in currentperiod
					Outflow
Xiamen Rei Ju Construction Engineer Co.	Construction management consulting services	37,024 USD1,300	(Note 1)	33,037 USD1,160	-	-	33,037 USD1,160	(7,189)	89.23%	(6,415) (Note 2)	5,021	-

Note 1: Direct investment in Mainland China.

Note 2: The recognition of investment gains and losses was based on the financial statements audited by the parent’s certified public accountants.

(ii) Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as of December31,2020	Investment Amounts Authorized by Investment Commission,MOEA	Upper Limit on Investment
33,037 (USD 1,160 )	33,037 (USD 1,160 )	869,441 (Note 1)

Note 1: The limit is calculated as follows: net asset value of subsidiary×60%=NTD1,449,069 thousand×60%=NTD869,441 thousand.

(iii) Significant transactions: None.

• (d) Major shareholders:

Major shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Fortune Base Development Co., Ltd.	50,940,340	12.90%
Global Funeral Services Co., Ltd.	40,396,080	10.23%
Ontario Investment Co., Ltd.	37,933,600	9.61%
Rei Ju Construction Co., Ltd.	36,608,592	9.27%
Yi Fong Investment Co., Ltd.	34,542,100	8.75%

(14) Segment information:

Please refer to the consolidated financial statements for the year ended December 31, 2020.

282