Longchen P&P - AGM Information 2021

Stock Code: 1909

Longchen Paper & Packaging Co., Ltd.

2021 Annual Shareholders’ Meeting Meeting Agenda (Translation)

June 17, 2021 at No.1-1, Guangxing Lane, Guangxing Village, Erlin Township, Zhanghua County, Taiwan, ROC at Conference Room of Longchen P&P Erlin Mill

Meeting Agenda ........................................................................................................................ 2 Report Items 1. 2020 Annual Business Overview ........................................................................................ 4 2. Audit Committee’s Review Report of 2020 ....................................................................... 8 3. 2020 Annual Employee’s Bonus Distribution Report ........................................................ 9 4. 2020 Cash Dividends Distribution Report ........................................................................ 10 Ratification Items 1. 2020 Business Report and Financial Statements .............................................................. 12 2. 2020 Disposition of Net Earnings ..................................................................................... 29 Discussion Items Amendment of “Rules of Procedure for Shareholders Meeting” ......................................... 32 Extemporaneous motions ...................................................................................................... 34 Appendixes 1. Articles of Incorporation ................................................................................................... 36 2. Rules of Procedure for Shareholder Meeting ................................................................... 42 3. Directors' Shareholding .................................................................................................... 49

Longchen Paper & Packaging Co., Ltd. 2021 Annual Shareholders’ Meeting Agenda (Translation)

Time: Tuesday, June 17[th] , 2021, 9:00AM.
Place: No. 1-1, Guangxing Ln., Erlin Township, Changhua County, Taiwan (Will be held at the meeting room of Longchen P&P Erlin Mill)
Meeting Agenda
I. Announcing Meeting in Session.
II. Welcome Speech by the Chairman.
III. Report Items
- i. 2020 Annual Business Overview.
- ii. Audit Committee’s Review Report of 2020.

iii. 2020 Annual Employee’s Bonus Distribution Report.

iv 2020 Cash Dividends Distribution Report.

Ratification Items
I. 2020 Business Report and Financial Statements.
II. 2020 Disposition of Net Earnings.
Discussion Items

Amendment of “Rules of Procedure for Shareholders Meeting”.

Extemporaneous Motions
Adjournment
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Report Items

Report One: Business Report of 2020

Longchen Paper & Packaging Co., Ltd. Business Report of 2020

The Company's revenue in 2020 was NT$41,600,592 thousand, with a decrease by 12.8% compared with that in 2019, the operating profit was NT$2,300,166 thousand, with an increase by NT$517,644 thousand as compared with that in 2019. In 2020, the profit before tax was NT$1,107,356 thousand and the profit for the period after tax was NT$927,510 thousand; the profit for the period after tax charged to the parent company was NT$945,893 thousand, and the net earnings per share after tax was NT$0.77. The Company's operation performance in 2020 is stated below:

I. 2020 Business Report

Incomes, expenses, profits and losses
1.1 Incomes:
- (1) In 2020, the net operating revenue was NT$41,600,592 thousand, with a decrease by 12.8% compared with NT$47,715,121 thousand in 2019.
- (2) In 2020, the non-operating income was NT$533,746 thousand, including NT$69,677 thousand as share of profit of associates accounted for equity method, NT$18,271 thousand as interest income, NT$2,469 thousand as dividend income, NT$257,326 thousand as government subsidy income, NT$14,621 thousand as sublease income, NT$132,687 thousand as net foreign exchange gain and NT$38,695 thousand as others.

1.2 Expenses:

(1) In 2020, the operating cost was NT$35,078,972 thousand, with a decrease by 14.8% compared with NT$41,163,583 thousand in 2019. The operating expenses in 2020 was NT$4,221,454 thousand, with a decrease by 11.5% compared with NT$4,769,016 thousand in 2019.
(2) In 2020, the non-operating expense was NT$1,726,556 thousand, including NT$1,525,766 thousand as financial expenses, NT$43,757 thousand as loss on the disposal of property, plant and equipment, NT$ 153,776 thousand as Gain on financial assets at fair value through profit or loss and NT$3,257 thousand as others.

1.3 Profits and losses (P/L):

(1) The profit for the period in 2020 was NT$927,510 thousand, with increase by NT$425,118 thousand compared with NT$502,392 thousand in 2019.

(2) In 2020, the profit for the period charged to the parent company was NT$945,893 thousand, with increase by NT$412,120 thousand compared with NT$533,773 thousand in 2019.

2. Operations

Comparison of Business Performance between 2019 and 2020

Unit: NT$1,000

Item	Year 2020	Year 2019	Difference in amount	Variation (%)
Operating Revenue	41,600,592	47,715,121	(6,114,529)	(12.8)
Operating costs	35,078,972	41,163,583	(6,084,611)	(14.8)
Operating margin	6,521,620	6,551,538	(29,918)	(0.5)
Operating expenses	4,221,454	4,769,016	(547,562)	(11.5)
Operating profit	2,300,166	1,782,522	517,644	29.0
Non-operating income/expenses	(1,192,810)	(1,410,005)	217,195	15.4
Profit before income tax	1,107,356	372,517	734,839	197.3
Profit for the period	927,510	502,392	425,118	84.6
Net income attributable to owners of the parent	945,893	533,773	412,120	77.2

3. Research and development status

The R&D expense in 2020 was NT$1,211 thousand,000, although with a decrease by NT$1,290 thousand,000, compared with that in 2019, R&D expenses had an increase by 0.1% with operating revenue share. The Company has attached much importance to the coexistence and co-prosperity of enterprises and the environment, and is always dedicated to further improving the five advanced environment friendly techniques below with to the goal of having sustainable operations and core competitiveness, based on efficient resource utilization: utilization of regenerated fiber, energy-efficient production, water-saving production, treatment of air and water pollution and disposal of wastes, and space utilization. We are committed to research, development and continuous innovation. Each production step is constantly improved to ensure environmental benefits, quality and efficiency, and strive for low carbon papermaking and eco packaging.

II. Business policies and major production and marketing strategies

Business policies

Low carbon papermaking:

(1) Strengthen the Company's competitiveness in low carbon papermaking, and constantly improve the structure of materials, advance the transformation and upgrade of products, and improve energy conservation and emission reduction solutions.
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(2) Commence the Erlin Paper Mill Construction and Machine Upgrade Project as scheduled to increase the market share.

Eco packaging:

(1) Develop high-end eco packaging products and satisfy customers' needs with high quality carton products and the solution of complete product packaging.
(2) Decommission and renew obsolete equipment of carton plants and carry out automatic and intelligent upgrading to improve the company’s competitiveness.
Estimated sales volume and basis
(1) Estimated sales volume

The subsidiary in mainland China is affected by the COVID-19 pandemic, but the group estimated that containerboard sales volume in 2021 will increase as compared to the sales volume in 2020. With the effect of waste prohibition in mainland China and the COVID-19 pandemic, waste paper materials in short supply in mainland China will increase thereby containerboard production cost and product price. The estimated business income in 2021 will increase, compared with the business income in 2020.

(2) Basis of estimated sales volume

Develop feasible plans based on the Company's business strategies and specific demands of corrugated box packaging markets in sales areas.

Major production and marketing strategies
(1) Taiwan

Based on the current production capacity of 650 thousand ton containerboard, we will respond to the "Welcome Taiwanese Entrepreneurs Back to Invest in Taiwan Program" sponsored by the Ministry of Economic Affairs (MOEA) in 2021, and support Taiwanese entrepreneurs in their local investments that will increase the demands in the product packaging market. Furthermore, we will carry out the Erlin Paper Mill Construction and Machine Upgrade Project, decommission and renew obsolete equipment of carton plants and carry out automatic and intelligent upgrading in the field of eco packaging to increase the market share.

(2) Mainland China

Further reinforce our business in East China and energetically explore the local market in Central China. Based on target customers’ needs, continuously introduce the portfolio of niche products. Steady and expand purchase channels of waste paper materials to ensure that the production cost is more competitive. Continue further research, development and innovation and promote product optimization and upgrading. Offer premium customized services to increase the market share in the field of containerboard and obtain optimal returns.

As a model enterprise, Longchen Paper & Packaging Co., Ltd. implements the concept of a "Circular Economy" in the long term and concentrates on low carbon papermaking and eco packaging. The Company adopts the business model of efficient resource utilization, participates in and promotes the further growth of a circular economy. Guided by this concept, the Company pursues zero waste and system balance, and establishes a production system with resource recovery and regeneration. This is also the Company’s business mission that we persistently strive for. The Company accomplished the "Salmon Return to Taiwan" investment plan totaling NT$4.3 billion in 2015, established a good foundation for its longterm development and competitive edge in Taiwan. In 2020, the Company will continuously respond to the "Welcome Taiwanese Entrepreneurs Back to Invest in Taiwan Program" sponsored by MOEA; its total capital expenditure on investment in Taiwan between2019and 2021 will exceed NT$6.0 billion as expected. After this action plan of localized investment in Taiwan is accomplished, the Company’s market share will increase in the Asian containerboard market, and create more interests for the shareholders.

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer: Wu, Kuo-Shan

Report Two: Audit Committee’s Review Report

Longchen Paper & Packaging Co., Ltd. Audit Committee’s Review Report

The board of directors prepared the business report, financial statements and the net earnings disposition proposal of 2020; BDO Taiwan is authorized to review the financial statements, and issued the review report. The audit committee has reviewed all the foregoing business report, financial statements and the net earnings disposition proposal and identified nothing inappropriate. This report is hereby issued for examination pursuant to Article 14.4 of the "Securities and Exchanges Act" and Article 219 of the "Company Act".

Longchen Paper & Packaging Co., Ltd.

Chairman of the Audit Committee: Chiu, Shean-Bii

March 11, 2021

Report Three: 2020 Annual Employee’s Bonus Distribution Report

I. The Company's profit before income tax in 2020 was NT$1,071,201,799. At least two percent (2%) of its profit before income tax shall be allocated in cash as employees' bonuses as per Article 22-1 of the Articles of Incorporation, i.e. NT$21,861,261.
II. The Chairman will be authorized to determine the distribution amount and time of such employees' bonuses based on individual performance, overall contribution or special achievements, as well as employees' qualifications and other related factors.
III. This report is hereby presented for mutual supervision.
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Report Four: 2020 Cash Dividends Distribution Report

I. Net income of the Company in 2020 was NT$945,892,812, the amount of outstanding stocks was 1,277,685,727, basic earnings per share was NT$0.77. After approved by the board of director’s resolution, cash dividend per share of common stocks was NT$0.6, and the amount was NT$766,611,436.
II. The Company drew up the baseline date of dividend payout on July 8th, 2021. In response to the baseline date and the shareholding ratio recorded in the register of shareholders, the Company distributes to the nearest dollar, with less than NT$1 unconditionally rounded down, the odd amount of less than NT$1 shall be included as other revenue; hereafter as share repurchase or treasury stock transfer and cancelation, cash increase, they affect the amount of outstanding stocks, and cause to change payout ratio for shareholders, the chairman will be authorized to amend the related matters of the payout ratio.
III. This report is hereby presented for mutual supervision.
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Ratification Items

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[Ratification Items]

Case 1

(proposed by the Board of Directors)

Summary: Business Report and Financial Statements of 2020are hereby presented for ratification.

Note: The Company's business report, separate and consolidated financial statements in 2020 have been prepared. (See Page4-7 and 13-28.)

Resolution:

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INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholders of Longchen Paper & Packaging Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Longchen Paper & Packaging Co., Ltd and its subsidiaries ( the “Group”). which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to the "Other matterMaking Reference to the Audits of Component Auditors section of our report) the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years ended December 31, 2020 and 2019 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2020. 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.

Key audit matters for the Group’s consolidated financial statements for the year ended December 31, 2020 are stated as follows:

Major transactions with related parties

The Group strive for creating a vertically-integrated management system throughout the whole industry chain. Subsidiaries of different nature within the group are responsible for all the operational processes, from overseas procurement of waste paper or local waste paper recycling, to production and marketing of industrial paper and cartons. As the amounts of transactions with related are considerable, the corporate incomes of such subsidiaries in different countries have to be recognized in different times. Moreover, transactions with upstream-downstream related parties and the evaluation on unrealized gross margin exclusion have effect on the recognition of sales revenue, cost of goods sold and gross profit on sales. Therefore, major transactions with related parties should be considered as key review issues. The information on such transactions with related parties is provided in Footnotes accompanying the consolidated financial statements.

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Generally, we have reviewed and audited the aforesaid matters by following the procedures below:

Understand and verify the design and execution effectiveness of the internal control system for the administration of transactions with related parties;
Understand and evaluate the rationality of assumptions and methods adopted by the management to eliminate estimated unrealized gross profit of companies of different nature;
Perform random inspection and verification on the quantity and amount of such transactions with related parties not put into production;
Repeat the combination and consolidated elimination of transactions with related parties, and assess whether any calculation formula used are correct; and
Perform analytical review procedures. In consideration of the previous actual operating results and the influence of the production capacity expansion this year, assess whether the financial information by departments is consistent with the expectation.

Government subsidy income

In 2020, the non-operating incomes of the Group from government subsidies were about NT$ 257,326 thousand, accounting for27.74% of the consolidated net income in 2020. Accordingly, such government subsidy income was considered as a key audit issue. The information on government subsidies is provided in Footnotes 4(19) and 6(26) of the consolidated financial statements.

Generally, we have audited the aforesaid matters by following the procedure below:

Understand and evaluate the rationality of methods used by the management to recognize such government subsidy income;
Perform random inspection and verification on agreements for government subsidies, and confirm that: 1) whether or not to comply with additional conditions for government subsidies; and 2) such subsidy can be obtained; and
Perform random inspection and verification on whether the government subsidy income this year is recognized as deferred income or other income based on the subsidy nature pursuant to the general accounting principle. Analyze and challenge the management's assessment conditions to verify the rationality of income recognition.

Other matter - Making Reference to the Audits of Component Auditors

Among the subsidiaries listed in the consolidated financial statements above, the financial statements of Long Chen Paper (China) Holdings Co., Ltd. and its subsidiaries were audited by other auditors rather than us. Thus, the amounts listed in the financial statements of such subsidiaries included in our audit opinions towards the consolidated financial statements above were based on the audit reports issued by other auditors. For Long Chen Paper (China) Holdings Co., Ltd. and its subsidiaries: 1) the total assets as at December 31, 2020 and 2019 were respectively NT$51,045,426 thousand and NT$51,660,894 thousand, accounting for69.28% and 74.29% of the consolidated total assets; and 2) the net revenue for 2020 and 2019 was respectively NT$33,217,325 thousand and NT$39,089,877 thousand, accounting for79.85% and 81,92% of the consolidated net revenue.

Other matter –Parent company only financial reports

We have also audited the parent company only financial statements of Longchen Paper & Packaging Co., Ltd. as of and for the years ended December 31, 2020 and 2019 which we have issued an unqualified opinion.

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

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Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS, IAS, IFRIC, and 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.

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

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

Identify and assess 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.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 conclude 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.
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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.
Obtain sufficient and appropriate audit evidence regarding the financial information of 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.

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

The engagement partners on the audit resulting in this independent auditors’ report are Mu Fan Wang and Hong Wen Tao.

BDO Taiwan Republic of China March 12, 2021

Notice to Readers

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

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

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

Longchen Paper & Packaging Co., Ltd. and subsidiaries

CONSOLIDATED BALANCE SHEETS

December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

Code	Assets	December 31,2020	December 31,2020	December 31,2019 Code Amount % $2,354,915 3.39 2100 46,872 0.07 2110 4,370,279 6.28 2130 5,837,107 8.39 2150 110,540 0.16 2170 266,021 0.39 2200 51,427 0.07 2230 3,048,660 4.38 2280 2,745,582 3.95 2300 60,692 0.09 2322 18,892,095 27.17 2365 21xx 144,620 0.21 2530 3,737,580 5.37 2540 42,679,361 61.38 2570 1,609,869 2.31 2580 7,508 0.01 2600 63,178 0.09 2640 631,669 0.91 2645 1,776,605 2.55 25xx 50,650,390 72.83 2xxx 3100 3110 3200 3300 3310 3320 3350 3400 3410 3420 31xx 36xx 3xxx $69,542,485 100.00	Liabilities and Equity	December 31,2020 Amount % $8,859,010 12.04 - - 243,046 0.33 20,958 0.03 35,017 0.05 4,408,646 5.98 120,476 0.16 2,784,043 3.78 413,238 0.56 61,145 0.08 142,391 0.19 8,538,151 11.58 2,500,000 3.39 19,402,800 26.33 59,569 0.08 124,245 0.17 92,705 0.13 353,854 0.48 48,120 0.07 32,455 0.04 22,613,748 30.69 12,776,857 17.34 4,019,363 5.46 1,688,201 2.29 626,639 0.85 5,271,064 7.16 (1,311,493) (1.78) 2,283,891 3.10 25,354,522 34.42 68,524 0.09 25,423,046 34.51 $73,676,851 100.00	December 31,2019	December 31,2019
		Amount $1,381,535 7,043 4,119,797 6,277,607 94,537 237,680 73,282 3,709,242 2,725,199 22,978 18,648,900 83,086 5,716,623 43,221,897 1,602,196 7,398 53,410 566,773 3,776,568 55,027,951 $73,676,851	%	Amount		Amount $8,859,010 - 243,046 20,958 35,017 4,408,646 120,476 2,784,043 413,238 61,145 142,391 8,538,151 2,500,000 19,402,800 59,569 124,245 92,705 353,854 48,120 32,455 22,613,748 12,776,857 4,019,363 1,688,201 626,639 5,271,064 (1,311,493) 2,283,891 25,354,522 68,524 25,423,046 $73,676,851	Amount $10,259,335 1,148,552 137,536 90 3,605,900 3,452,135 151,930 57,880 12,275 9,214,312 14,818 28,054,763 2,500,000 16,040,760 382,003 94,957 322,999 54,277 32,205 19,427,201 47,481,964 12,176,857 3,684,266 1,629,967 626,639 4,756,823 (1,549,054) 386,837 21,712,335 348,186 22,060,521 $69,542,485	%
1100 1110 1150 1170 1180 1200 1220 130x 1410 1470 11xx 1510 1550 1600 1755 1760 1780 1840 1900 15xx	Current assets Cash and cash equivalents Financial assets at fair value through profit or loss Notes Receivable , net Accounts receivable, net Accounts receivable from related parties, net Other receivables Current income tax assets Inventories Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss - non-current Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Intangible assets Deferred Income tax assets Other non-current assets Total non-current assets Total assets		1.88 0.01 5.59 8.52 0.13 0.32 0.10 5.03 3.70 0.03	$2,354,915 46,872 4,370,279 5,837,107 110,540 266,021 51,427 3,048,660 2,745,582 60,692	Current liabilities Short-term loans Short-term notes and bills payable Contract liabilities - current Notes payable Accounts payable Other payables Current income tax liabilities Lease liabilities`－`current Other current liabilities Current protion of long-term loans Refund liability - current Total current liabilities Non-current liabilities Corporate bonds payable Long-term loans Deferred income tax liabilities Lease liabilities - non-current Other non-current liabilities Net defined benefit liabilities - non-current Guarantee deposits Total non-current liabilities Total liabilities Equity attributable to owners of the parent Capital stock Common stock Capitalsurplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity interest Exchange differences on translation of foreign operations Unrealized gain (loss) on FVTOCI Total equity attributable to owners of the parent company Non-controlling interesteests Total equity Total liabilities and equity			14.75 1.65 0.20 - 5.19 4.96 0.22 0.08 0.02 13.25 0.02
			25.31	18,892,095
			0.11 7.76 58.68 2.17 0.01 0.07 0.77 5.12	144,620 3,737,580 42,679,361 1,609,869 7,508 63,178 631,669 1,776,605				40.34
								3.59 23.07 0.55 0.14 0.46 0.08 0.05
								27.94
			74.69	50,650,390				68.28
			100.00	$69,542,485				17.51 5.30 2.34 0.90 6.84 (2.23) 0.56
								31.22 0.50
								31.72
								100.00

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

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Longchen Paper & Packaging 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)

2020		2019
Amount	% 100.00 (84.32) 15.68 15.68 (4.28) (2.97) (2.91) 0.02 (10.14) 5.54 0.04 0.75 (0.16) (3.67) 0.16 (2.88) 2.66 (0.43) 2.23 (0.02) 4.56 - 0.63 0.10 (0.14) 5.13 7.36 2.27 (0.04) 2.23 7.39 (0.03) 7.36	Amount $47,715,121 (41,163,583) 6,551,538 6,551,538 (2,112,512) (1,333,305) (1,340,845) 17,646 (4,769,016) 1,782,522 41,923 270,862 (155,250) (1,695,831) 128,291 (1,410,005) 372,517 129,875 502,392 2,618 124,302 (524) (670,994) (10,509) 132,504 (422,603) $79,789 $533,773 (31,381) $502,392 $130,005 (50,216) $79,789 $0.45 $0.45	%
$41,600,592 (35,078,972)			100.00 (86.27)
6,521,620			13.73
6,521,620			13.73
(1,782,580) (1,236,518) (1,211,463) 9,107			(4.43) (2.79) (2.81) 0.04
(4,221,454)			(9.99)
2,300,166			3.74
18,271 312,863 (67,855) (1,525,766) 69,677			0.08 0.57 (0.33) (3.55) 0.27
(1,192,810)			(2.96)
1,107,356 (179,846)			0.78 0.27
927,510			1.05
(10,140) 1,898,799 2,028 260,382 40,501 (59,390)			0.01 0.25 - (1.41) (0.02) 0.28
2,132,180			(0.89)
$3,059,690			0.16
$945,893 (18,383)			1.12 (0.07)
$927,510			1.05
$3,072,396 (12,706)			0.27 (0.11)
$3,059,690			0.16
$0.77
$0.77

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

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

Longchen Paper & Packaging 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)

		Equityattributable to	Equityattributable to	owners of theparent	owners of theparent	Non-controlling interests	Total Equity
Common stock $11,676,857 - - - - - - 500,000 - - - - - $12,176,857 $12,176,857 - - - - - - 600,000 - - - $12,776,857	Capital surplus $3,512,955 - - (270) - - - 155,000 14,583 444 - 1,554 - $3,684,266 $3,684,266 - - 262 - - - 288,000 26,411 - 20,424 $4,019,363		Retained earnings	Unappropriated earnings $4,851,789 (93,469) (583,843) - 533,773 2,094 535,867 - - - - - 46,479 $4,756,823 $4,756,823 (58,234) (365,306) - 945,893 (8,112) 937,781 - - - - $5,271,064	Other equityitems Exchange differences on translation of foreign operations Unrealized gain (losses) from financial assets measured at fair value through other comprechtnsive income $(1,019,040) $309,164 - - - - - - - - (530,014) 124,152 (530,014) 124,152 - - - - - - - - - - - (46,479) $(1,549,054) $386,837 $(1,549,054) $386,837 - - - - - - - - 237,561 1,897,054 237,561 1,897,054 - - - - - - - - $(1,311,493) $2,283,891
		Legal reserve $1,536,498 93,469 - - - - - - - - - - - $1,629,967 $1,629,967 58,234 - - - - - - - - - $1,688,201	Special reserve		Exchange differences on translation of foreign operations $(1,019,040) - - - - (530,014) (530,014) - - - - - - $(1,549,054) $(1,549,054) - - - - 237,561 237,561 - - - - $(1,311,493)
			$626,639 - - - - -			$552,958 - (21,130) - (31,381) (18,835)	$22,047,820 - (604,973) (270) 502,392 (422,603)
			-			(50,216)	79,789
			- - - - - -			- (199) (4) (133,223) - -	655,000 14,384 440 (133,223) 1,554 -
			$626,639			$348,186	$22,060,521
			$626,639 - - - - -			$348,186 - (10,248) - (18,383) 5,677	$22,060,521 (375,554) 262 927,510 2,132,180
			-			(12,706)	3,059,690
			- - - -			- (776) (255,932) -	888,000 25,635 (255,932) 20,424
			$626,639			$68,524	$25,423,046

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

19 -

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

Longchen Paper & Packaging 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)

Item	2020	2019
Cash flow from operating activities: Profit before income tax for the period Adjustments for: The profit or loss items which did not affect cash flows: Depreciation expense (including investment property) Amortization expense Excepted credit recovery gains Net (gains) losses on financial assets and liabilities at fair value through profit and loss Interest expense Interest income Dividend income Compensation cost arising from share-based payments Share of profit of subsidiaries and associates accounted for recognized by equity method (Gain) losses on disposal of property, plant and equipment Property, plant and equipment reclassified as expenses Reversal of impairment loss of property, plant and equipment Gain from lease modification Other item - donation expense Subtotal Change in operating assets and liabilities: Change in operating assets Decrease (increase) in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in accounts receivable from related parties Decrease (increase) in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Total net change in operating assets Change in operating liabilities Increase (decrease) in contract liabilities - current Increase (decrease) in notes payable Increase (decrease) in accounts payable Increase (decrease) in accounts payable from related parties Increase (decrease) in other payables Increase (decrease) in other current liabilities Increase (decrease) in refund liability - current Increase (decrease) in net defined benefit liability - non-current Total net change in operating liabilities Total net change in operating assets and liabilities Total adjustments Cash generated from operating activities Interests received Dividends received Interests paid Income tax paid Net cash provided by operating activities Cash flow from investing activities: Disposal (acquisition) of financial assets/liabilities at fair value through profit or loss Acquisition of investment accounted for under the equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Acquisition of right-of-use assets Acquisition of intangible assets Increase/decrease in other non-current assets - prepayments for equipment Decrease (increase) in other non-current assets - refundable deposits Decrease (increase) in other non-current assets - others Net cash used in investing activities Cash flow from financing activities: Increase (decrease) in short-term loans Increase (decrease) in short-term notes and bills payable Payments of long-term loans Repayments of long-term loans Payment of lease liabilities Increase (decrease) in guarantee deposits received Repayment of the principal portion of lease liabilities Cash dividends paid Increase cash capital Cash received from investment of non-controlling interest Change in non-controlling interests Net cash provided by (used in) financing activities Effect of changes in exchange rate on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year	$1,107,356 2,432,457 19,846 (9,107) 153,776 1,474,438 (18,271) (2,469) 20,424 (69,677) 43,757 58,593 - (248) -	$372,517 2,389,996 23,061 (17,646) (35,080) 1,623,084 (41,923) (4,999) 1,554 (128,291) 110,469 82,092 (32,577) (70) 84,551
	4,103,519	4,054,221
	250,482 (446,072) 16,003 27,419 (660,582) 31,479 37,714	1,576,347 715,102 37,306 66,997 1,092,071 283,307 42,366
	(743,557)	3,813,496
	(116,578) 34,927 802,746 120,476 43,519 130,116 (882) (16,297)	(37,071) (4,698) (389,757) - 242,574 (1,525) (1,469) (3,246)
	998,027	(195,192)
	254,470	3,618,304
	4,357,989	7,672,525
	5,465,345 18,278 29,524 (1,490,907) (131,048)	8,045,042 44,645 32,054 (1,583,281) (770,256)
	3,891,192	5,768,204
	110,687 (21,466) (2,185,360) 67,812 (5,256) (5,547) (3,061,407) 41,294 14,895	14,112 - (4,034,724) 67,755 - (94) (902,006) (943) 30,711
	(5,044,348)	(4,825,189)
	(1,400,325) (1,148,552) 8,540,321 (5,854,442) (71,210) 250 30,855 (365,306) 888,000 (10,248) (251,031)	(1,172,830) (150,879) 8,675,928 (8,639,835) (58,277) (17,332) 20,932 (583,843) 655,000 (21,130) (152,261)
	358,312	(1,444,527)
	(178,536)	686,816
	(973,380) 2,354,915	185,304 2,169,611
	$1,381,535	$2,354,915

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

20 -

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors and Shareholders of Longchen Paper & Packaging Co., Ltd.

Opinion

We have audited the accompanying parent company only financial statements of Longchen Paper & Packaging Co., Ltd(the “Company”). which comprise the parent company only balance sheets as of December 31, 2020 and 2019, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to the "Other matterMaking Reference to the Audits of Component Auditors section of our report), the accompanying parent company only financial statements present fairly, in all material respects, the accompanying parent company only financial position of the Company as of December 31, 2020 and 2019, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2020. 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

Key audit matters for the Company’s parent company only financial statements for the year ended December 31, 2020 are stated as follows:

Major transactions with related parties

Longchen Paper & Packaging Co., Ltd. strives for creating a vertically-integrated management system throughout the whole industry chain. Subsidiaries of different nature within the group are responsible for all the operational processes, from overseas procurement of waste paper or local waste paper recycling, to production and marketing of industrial paper and cartons. As the amounts of transactions with related parties are considerable, the corporate incomes of such subsidiaries in different countries have to be recognized in different times. Moreover, transactions with upstream-downstream related parties and the evaluation on unrealized gross margin exclusion have effect on the recognition of sales revenue, cost of goods sold and gross profit on sales. Therefore, major transactions with related parties should be considered as key review issues. The information on such transactions with related parties is provided in Footnotes VII accompanying the parent company only financial statements.

Generally, we have reviewed and audited the aforesaid matters by following the procedure below:

Understand and verify the design and execution effectiveness of the internal control system for the administration of transactions with related parties;
Understand and evaluate the rationality of assumptions and methods adopted by the management to eliminate estimated unrealized gross profit of companies of different nature;
Perform inspection and verification on the quantity and amount of such transactions with related
21 -

parties not put into production yet;

Reassess whether it is appropriate to eliminate unrealized gain or loss regarding investments accounted for using the equity method; and
Perform analytical review procedures. In consideration of the previous actual operating results and the influence of the production capacity expansion this year, assess whether the financial information by departments is consistent with the expectation.

Subsidy income from Government

Longchen Paper& Packaging Co., Ltd. and its Subsidiary's non-operating income from government's subsidy program in 2020 was NT$257,326 thousand (same currency below), accounting for 27.74% of consolidated net profit for 2020; as such, subsidy income from Government is recognized as key audit matter. Please refer to Note 4 (19) and 6 (26) on the consolidated financial statement for information regarding government's subsidy program

Generally, we have reviewed and audited the aforesaid matters by following the procedure below:

Understand and evaluate the rationality of methods adopted by the management to recognize the subsidy income from the government;
Perform sampled checks on major subsidy contract entered with the government, reaffirming (1) the conditions supplemented for government's subsidy program, and (2) will receive the subsidy.
Perform inspection and verification within accounting scope of recognizing government's subsidy income, checking if it is recognized as deferred income or other income pursuant to the nature of subsidy and analyze, also doubt criteria for Top management's evaluation to validate the rational degree of income recognition.

Other matter -Making Reference to the Audits of Component Auditors

Among the subsidiaries listed in the consolidated financial statements above, the financial statements of Long Chen Paper & Packaging Co., Ltd. and its Subsidiary were audited by other auditors rather than us. Thus, among opinions that we have expressed for above consolidated financial statements, the amounts listed in the financial statements of such subsidiaries included in our audit opinions towards the separate financial statements above were based on the audit report issued by other auditors. The total assets as at December 31, 2020 and 2019 was respectively NT$ (hereinafter inclusive) 51,045,426 thousand and NT$51,660,894 thousand, accounting for69.28% and 74.29% of the separate total assets. For 2020 and 2019: 1) the gains and losses of related subsidiaries were respectively NT$(33,217,325,000)and NT$($39,089,877,000),accounting for (79.85%) and (81.92%) of the separate pre-tax net profit margin.

Other matter - Audit for the accompanying financial statements

Long Chen Paper & Packaging Co., Ltd. has prepared the accompanying financial statements for the years ended December 31, 2020 and 2019 and we have presented audit report without unqualified opinions containing other matters for your reference.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and 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.

22 -

In preparing the consolidated financial statements, management is responsible for assessing the Company and its subsidiary’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 and its subsidiary or to cease operations, or has no realistic alternative but to do so.

Those charged with governance( including members of the Audit Committee) for Long Chen Paper & packaging Co., Ltd. and its Subsidiary are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the Company's 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 auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

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:

Identify and assess 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.
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.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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.
Evaluate the overall presentation, structure and content of the parent company financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the Company and its Subsidiary's consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

23 -

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

The engagement partners on the audit resulting in this independent auditors’ report are Mu Fan Wang and Hong Wen Tao.

BDO Taiwan Republic of China March 12, 2021

Notice to Readers

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

24 -

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY BALANCE SHEET December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

Code	Assets	December 31,2020 Amount % $91,264 0.23 382 - 263,380 0.67 1,263,957 3.23 94,537 0.24 127,334 0.32 240,992 0.61 71,699 0.18 525,348 1.34 378,894 0.96 22,443 0.06 3,080,230 7.84 83,086 0.21 22,797,378 58.03 9,600,831 24.44 90,518 0.23 7,398 0.02 398,715 1.02 3,223,905 8.21 36,201,831 92.16 $39,282,061 100.00	December 31,2019 Code Amount % $1,188,345 3.44 2100 376 - 2110 279,639 0.81 2150 861,011 2.50 2170 110,540 0.32 2180 119,392 0.35 2200 - - 2230 49,943 0.15 2280 631,271 1.84 2300 160,361 0.47 2322 60,537 0.18 2365 3,461,415 10.06 21xx 2530 144,620 0.42 2540 2570 20,769,787 60.39 2580 8,210,701 23.87 2600 93,549 0.27 2640 7,508 0.02 25xx 469,160 1.36 2xxx 1,240,343 3.61 30,935,668 89.94 3100 3110 3200 3300 3310 3320 3350 3400 3410 3420 3xxx $34,397,083 100.00	Liabilities and Equity	December 31,2020 Amount % $80,000 0.20 - - - - 638,138 1.62 92,779 0.24 926,086 2.35 383,584 0.98 37,915 0.10 6,693 0.02 410,000 1.04 13,936 0.04 2,589,131 6.59 2,500,000 6.36 8,504,688 21.66 59,569 0.15 116,614 0.30 55,448 0.14 53,969 0.14 48,120 0.12 11,338,408 28.87 12,776,857 32.52 4,019,363 10.23 1,688,201 4.30 626,639 1.60 5,271,064 13.41 (1,311,493) (3.34) 2,283,891 5.82 25,354,522 64.54 $39,282,061 100.00	December 31,2019	December 31,2019
		Amount $91,264 382 263,380 1,263,957 94,537 127,334 240,992 71,699 525,348 378,894 22,443 3,080,230 83,086 22,797,378 9,600,831 90,518 7,398 398,715 3,223,905 36,201,831 $39,282,061	Amount		Amount $80,000 - - 638,138 92,779 926,086 383,584 37,915 6,693 410,000 13,936 2,589,131 2,500,000 8,504,688 59,569 116,614 55,448 53,969 48,120 11,338,408 12,776,857 4,019,363 1,688,201 626,639 5,271,064 (1,311,493) 2,283,891 25,354,522 $39,282,061	Amount	%
1100 1110 1150 1170 1180 1200 1210 1220 130x 1410 1470 11xx 1510 1550 1600 1755 1760 1840 1900 15xx	Current assets Cash and cash equivalents Financial assets at fair value through profit or loss Notes receivable , net Accounts receivable,net Accounts receivable related parties, net Other receivables Other receivables from related parties Current income tax assets Inventories Prepayments Other current assets Total current assets Non-current assets Financial assets at fair value through profit or loss - non-current Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Deferred Income tax assets Other non-current assets Total non-current assets Total assets		$1,188,345 376 279,639 861,011 110,540 119,392 - 49,943 631,271 160,361 60,537	Current liabilities Short-term loans Short-term notes and bills payable Notes payable Accounts payable Accounts payable from related parties Other payables Current income tax liabilities Lease liabilities - current Other current liabilities Current portion of long-term loans Refund liability - current Total current liabilities Non-current liabilities Corporate bonds payable Long-term loans Deferred income tax liabilities Lease liabilities - non-current Other non-current liabilities Net defined benefit liabilities - non-current Total non-current liabilities Total liabilities Equity Capital stock Common stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity interest Exchange differences on translation of foreign operations Unrealized gain (loss) on FVTOCI Total equity Total liabilities and equity		$700,000 1,148,552 89 607,330 38,551 645,040 120,246 36,008 5,025 1,175,000 14,818	2.04 3.34 - 1.77 0.11 1.88 0.35 0.10 0.01 3.42 0.04
			3,461,415			4,490,659	13.06
			144,620 20,769,787 8,210,701 93,549 7,508 469,160 1,240,343			2,500,000 5,152,000 373,805 60,038 53,969 54,277	7.27 14.98 1.09 0.17 0.15 0.16
						8,194,089	23.82
						12,684,748	36.88
						12,176,857 3,684,266 1,629,967 626,639 4,756,823 (1,549,054) 386,837	35.40 10.71 4.74 1.82 13.83 (4.50) 1.12
			30,935,668
			$34,397,083
						21,712,335	63.12
						$34,397,083	100.00

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

25 -

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY 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)

2020	2019
Amount $9,618,903 (6,795,766) 2,823,137 (42,991) 22,695 2,802,841 (495,460) (495,295) (22,245) 281 (1,012,719) 1,790,122 6,438 10,540 39,942 (115,467) (660,373) (718,920) 1,071,202 (125,309) 945,893 (10,140) 1,897,054 2,028 286,327 10,624 (59,390) 2,126,503 $3,072,396 $0.77 $0.77	Amount $9,732,951 (7,073,170) 2,659,781 (22,695) 55,651 2,692,737 (520,680) (561,156) (15,422) 119 (1,097,139) 1,595,598 28,565 18,989 (85,427) (167,698) (998,034) (1,203,605) 391,993 141,780 533,773 2,618 124,152 (524) (655,212) (7,306) 132,504 (403,768) $130,005 $0.45 $0.45	%
		100.00 (72.67)
		27.33 (0.23) 0.57
		27.67
		(5.35) (5.77) (0.16) -
		(11.28)
		16.39
		0.29 0.20 (0.88) (1.72) (10.25)
		(12.36)
		4.03 1.46
		5.49
		0.03 1.28 (0.01) (6.73) (0.08) 1.36
		(4.15)
		1.34

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

26 -

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

	Retained earnings	Otherequityitems Exchange differences on translation of foreign operations Unrealized gain(losses) from financial assets measured at fair value through other comprechtnsive income $(1,019,040) $309,164 - - - - - - - - (530,014) 124,152 (530,014) 124,152 - - - - - - - - - (46,479) $(1,549,054) $386,837 $(1,549,054) $386,837 - - - - - - - - 237,561 1,897,054 237,561 1,897,054 - - - - - - $(1,311,493) $2,283,891	Total Equity
Legal reserve $1,536,498 93,469 - - - - - - - - - - $1,629,967 $1,629,967 58,234 - - - - - - - - $1,688,201	Special reserve $626,639 - - - - - - - - - - - $626,639 $626,639 - - - - - - - - - $626,639	Exchange differences on translation of foreign operations $(1,019,040) - - - - (530,014) (530,014) - - - - - $(1,549,054) $(1,549,054) - - - - 237,561 237,561 - - - $(1,311,493)
			$21,494,862 - (583,843) (270) 533,773 (403,768)
			(130,005)
			655,000 14,583 444 1,554 -
			$21,712,335
			$21,712,335 - (365,306) 262 945,893 2,126,503
			3,072,396
			888,000 26,411 20,424
			$25,354,522

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

27 -

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

For the years ended December 31, 2020 and 2019

(Expressed in thousands of New Taiwan Dollars)

Item Cash flow from operating activities: Profit before income tax for the period Adjustments for: The profit or loss items which did not affect cash flows: Depreciation expense (including investment property) Amortization expense Excepted credit recovery gains Net (gains) losses on financial assets and liabilities at fair value through profit and loss Interest expense Interest income Dividend income Compensation cost arising from share-based payments Share of profit of subsidiaries and associates accounted for using the equity method (Gain) losses on disposal of property, plant and equipment Reversal of impairment loss of property, plant and equipment Property, plant and equipment reclassified to expenses Unrealized (gain) loss on sale Realized (gain) loss on sale Lease modification gain Other item - donation expense Subtotal Change in operating asset and liabilities: Change in operating assets Decrease (increase) in notes receivable Decrease (increase) in accounts receivable Decrease (increase) in accounts receivable from related parties Decrease (increase) in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Total net change in operating assets Change in operating liabilities Increase (decrease) in notes payable Increase (decrease) in accounts payable Increase (decrease) in accounts payable from related parties Increase (decrease) in other payables Increase (decrease) in refund liability - current Increase (decrease) in other current liabilities Increase (decrease) in net defined benefit liability - non-current Total net change in operating liabilities Total net change in operating assets and liabilities Total adjustments Cash generated from operating activities Interests received Dividends received Interests paid Income tax paid Net cash provided by operating activities Cash flow from investing activities: Decrease (increase) in other receivables from related parties’ Disposal (acquisition) of financial assets at fair value through profit or loss Acquisition of Investments accounted for using equity method Disposal of Investments accounted for using equity method Acquisition of property, plant and equipment Disposal of property, plant and equipment Decrease (increase) in other non-current assets - prepayments for equipment Decrease (increase) in other non-current assets - refundable deposits Decrease (increase) in other non-current assets - others Net cash used in investing activities Cash flow from financing activities: Increase (decrease) in short-term loans Increase (decrease) in short-term notes and bills payable Payments of long-term loans Repayments of long-term loans Repayment of the principal portion of lease liabilities Cash dividends paid Increase cash capital Net cash provided by (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year	2020	2019
	$1,071,202 486,583 3,710 (281) (47,597) 94,207 (6,438) (2,360) 20,424 660,373 (304) - 58,594 42,991 (22,695) (41) - 1,287,166 16,259 (402,665) 16,003 (7,942) 105,923 (141,700) 38,094 (376,028) (89) 30,808 54,228 281,615 (883) 1,669 (16,297) 351,051 (24,977) 1,262,189 2,333,391 6,181 600,454 (91,788) (68,266) 2,779,972 (240,735) 109,125 (1,085,676) - (965,177) 15,719 (2,996,686) (6,987) (6,551) (5,176,968) (620,000) (1,148,552) 7,015,688 (4,428,000) (41,915) (365,306) 888,000 1,299,915 (1,097,081) 1,188,345 $91,264	$391,993 456,548 5,106 (119) 20,903 143,392 (28,565) (4,999) 1,554 998,034 42,742 (23,000) 82,093 22,695 (55,651) - 84,551
		1,745,284
		153,412 115,053 37,306 (667) (16,376) 149,136 (51,754)
		386,110
		- (142,799) 38,551 122,386 (1,469) (904) (3,246)
		12,519
		398,629
		2,143,913
		2,535,906 30,639 1,227,523 (135,976) (620,349)
		3,037,743
		1,609,920 3,560 (1,211,080) 81,887 (492,170) 4,525 (1,249,018) 2,442 (5,184)
		(1,255,118)
		(1,080,000) (150,879) 2,367,000 (1,830,000) (33,733) (583,843) 655,000
		(656,455)
		1,126,170 62,175
		$1,188,345

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

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Case 2(proposed by the Board of Directors)

Summary: 2020 Earnings Distribution Proposal is hereby presented for ratification.

Note: 1. The Company's 2020 statement of surplus allocation has been prepared, the details are presented as follows.
This case was approved by Audit Committee and the board of directors, is hereby presented for ratification.

Resolution:

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Longchen Paper & Packaging Co., Ltd. Earnings Distribution Proposal 2020

Unit: NT$

	Unit: NT$
I. Distributable Items	Amount
Accumulated undistributed earnings in the beginning of 2020	4,333,282,282
Net income of 2020	945,892,812
Other comprehensive income	(8,111,906)
Less: 2020 Interim earning distribution	0
2020Earnings available for distribution	5,271,063,188
II. List legal reserve
1. 2020Interim legal reserve provision	0
2. 2020 Legal reserve provision	93,778,091
III. Distribution
1. 2020 Interim cash dividends to common shareholders (common stock per share)	0
2. 2020Cash dividends to common shareholders(NT$0.6cash dividend per share)	766,611,436
Total	860,389,527
Ending accumulated undistributed earnings	4,410,673,661

Chairman: Cheng, Ying-Pin Manager: Cheng, Ying-Pin Chief Accounting Officer: Wu, Kuo-Shan

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Discussion Items

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[Discussion Items]

Case 1(proposed by the Board of Directors)

Summary: The amendment to the Company's "Rules of Procedure for Shareholders Meeting" is presented for discussion.

Note: In response to the related laws and regulations and actual operational needs, the clauses of the original "Rules of Procedure for Shareholders Meeting" shall be amended. The clauses thereof before and after the amendment are presented as follows.

follows.
Amended clauses	Existing clauses	Remarks
Article 3 Paragraph 1, 2, 3 (omitted) . Director election or dismissal, change of the Articles of Incorporation, capital decrease, applying for stopping IPO, approval of director non-competition, Stock dividends of Common Stock, capital increase by reserve, company dissolution, merger, division or subject matter covered among Paragraph 1, Article 185 of the Company Act shall be listed with focus points in the meeting notice, instead of provisional motion. (Omitted below)	Article 3 Paragraph 1, 2, 3 (omitted) . Director election or dismissal, change of the Articles of Incorporation, capital decrease, applying for stopping IPO, approval of director non-competition, Stock dividends of Common Stock, capital increase by reserve, company dissolution, merger, division or subject matter covered among Paragraph 1, Article 185 of the Company Act shall be listed with focus points in the meeting notice, instead of provisional motion; such focus points shall be on the website designated by the securities competent authority or the Company, and the website link shall be specified in the meeting notice. (Omitted below)	The way of post is adjusted pursuant to the regulation.
Article 9 (First paragraph is omitted.) The Chairman shall call to order timely and announce information	Article 9 (First paragraph is omitted.) The Chairman shall call to order timely; however, whenever none of	Amendments were made to comply with practice.

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Amended clauses	Existing clauses	Remarks
related with the number without voting right and the number of share presenting in the meeting. however, whenever none of representatives attending in the meeting for shareholders holding a majority of total issued number of shares, the Chairman shall announce extension; the number is limited to be 2 times with total not over 1 hour. The Chairman shall announce adjournment in case that the number of representatives for shareholders holding more than one third of total issued shares not enough. (The following is omitted.)	representatives attending in the meeting for shareholders holding a majority of total issued number of shares, the Chairman shall announce extension; the number is limited to be 2 times with total not over 1 hour. The Chairman shall announce adjournment in case that the number of representatives for shareholders holding more than one third of total issued shares not enough. (The following is omitted.)
Article 14 Any election of directors in the Shareholders' Meeting shall be subject to related election guideline formulated by the Company, and the result shall be announced on site, including the elected Directors List and their numbers of voting right, Directors Concession List and the number of voting right for the election. (Omitted below)	Article 14 Any election of directors in the Shareholders' Meeting shall be subject to related election guideline formulated by the Company, and the result shall be announced on site. (Omitted below)	Paragraph 1 is revised to enhance corporate governance and maintain shareholders' rights and interests.
Article 20 (First paragraph is omitted.) These rules were amended on June 17th, 2021.	Article 20 (First paragraph is omitted.)	Add the date of amendments.

Resolution:

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[Extemporaneous Motions]

[Adjournment]

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Appendixes

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Articles of Incorporation of Longchen Paper & Packaging Co., Ltd.

Chapter One: General Provisions

Article 1: The Company is incorporated in accordance with the "Company Act", under the name of Longchen Paper & Packaging Co., Ltd., same as English name of the company.
Article 2: The Company's business activities comprise the following:
2.1 C601020 Paper Manufacturing;
2.2 C601030 Paper Containers Manufacturing;
2.3 C701010 Printing;
2.4 C801110 Fertilizer Manufacturing;
2.5 CB01030 Pollution Controlling Equipment Manufacturing;
2.6 D101050 Steam and Electricity Paragenesis;
2.7 E604010 Machinery Installation Construction;
2.8 J101030 Waste disposal;
2.9 G801010 Warehousing and Storage;
2.10 I103060 Management Consulting Services;
2.11 JE01010 Rental and Leasing Business; and
2.12 ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.
Article 2.1: Mutual guarantees shall be externally made between the Company and its affiliates for business needs.
Article 2.2: The Company's total reinvestment amount shall exceed 40% of its paid-up capital.
Article 3: Headquartered in Zhanghua County, Taiwan (ROC), the Company can set up branches, factories and business offices at home and abroad with the resolution of the board of directors, if necessary.
Article 4: The Company's announcements shall be subject to Article 28 of the "Company Act".

Chapter Two: Shares

Article 5: The Company has the authorized share capital of Fifteen Billion New Taiwan Dollars (NT$15 000,000,000), which is divided into 1,500,000 units to issue common or preferred shares, with NT$10 per share; wherein the board of directors is authorized to issue unissued shares in installments as needed.
Article 6: The Company issues its shares to registered owners only. Share certificates are issued with the signatures or authorized seals of at least three directors, subject to certification by the operation of the laws.
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The Company is not required to print non-physical stock certificates for its shares. The Company shall communicate with a centralized securities depository enterprise for registration.

Article 7: The Company's shareholders shall provide their real names and residence addresses for recording in the register of shareholders.
Article 7.1: Shares purchased by the Company pursuant to the "Company Act" can be transferred only to the employees of the Company and any domestic and overseas companies controlled or affiliated to the Company; specific subscription conditions and qualified transferee shall be decided by the board of directors according to the "Company Act”.
In issuing new shares, subscribing new shares shall be made by the employees of the Company and any domestic and overseas companies controlled or affiliated to the Company; specific subscription conditions and qualified transferee shall be decided by the board of directors according to the "Company Act”.
Issuance of new restricted shares for subscription by the employees of the Company and any domestic and overseas companies controlled or affiliated to the Company; specific subscription conditions and qualified transferee shall be decided by the board of directors according to the "Company Act”.
Article 8: All share-related affairs of the Company shall proceed according to the “Regulations Governing the Administration of Shareholder Services of Public Companies” promulgated by the competent authority.
Article 9: The shareholders' signatures shall be retained in the Company, so that they can subsequently exercise shareholders' rights accordingly.

Chapter Three: Shareholder Meetings

Article 10: The Company convenes two types of shareholder meeting: the annual general meeting and extraordinary shareholder meetings. Annual general meetings (AGMs) are convened by the board of directors by law once a year within six months after the end of each fiscal year. Extraordinary shareholder meetings may be held by law whenever deemed necessary. The shareholder meeting advice and announcement shall state clearly the agenda to be discussed during the meeting, and can be issued in electronic form if consented by the recipient. Distribution of the shareholder meeting agenda can be made in the form of announcement.
Article 11: If a shareholder is unable to attend the shareholder meeting in person, a proxy can be appointed to attend on behalf of such shareholder by completing the Company's proxy form and by specifying the scope of delegated authority. Unless otherwise regulated in Article 177 of the "Company Act", shareholders shall delegate their proxy attendants in compliance with "Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies."
Article 12: The Company's shareholders are entitled to one vote per share, except for shares that are subject to voting restrictions or situations outlined in Paragraph 2, Article 179 of the "Company Act".
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Article 13: Except otherwise regulated by law, a shareholder meeting resolution is passed when more than 50% of all outstanding shares are represented in the meeting, and voted in favor by more than 50% of all voting rights represented at the meeting.

Chapter Four: Directors

Article 14: The board shall consist of 9 directors elected from persons of adequate capacity during the shareholder meeting, including at least three independent directors, who shall not be less than one-fifth of total director seats. Directors are elected to serve a term of 3 years, which can be renewed if re-elected. Directors' total shareholding shall comply with the rules of the securities authority.
The candidate nomination system shall be adopted during election of directors. Shareholders shall elect directors from the list of candidates thereof in accordance with the "Company Act", the "Securities and Exchange Act", and other related laws and regulations.
Independent and non-independent directors shall be elected at the same shareholder meeting. The number of elected independent and non-independent directors shall be calculated separately.
Article 15: The directors shall organize the board of directors to elect a chairman and a deputy chairman among directors during a board meeting with more than twothirds of directors present, and with the support of more than half of attending directors. The Chairman serves as the Company's representative to the outside world and shall take centralized control over all its businesses.
Article 16: If the Chairman is unable to perform duties due to leave of absence or any reason, delegation shall be performed in accordance with Article 208 of the "Company Act".
Article 16.1: If a director wishes to seek proxy attendance by another director, a separate proxy letter shall be issued for every board meeting, with the extent of delegated authority specified separately for each agenda item. Each proxy attendant may only represent the presence of one absent director.
Article 17: The Company's business policies and other important matters shall be decided by the board of directors, including acquisition and disposal of its important properties and real property.
Article 18: The Company shall assemble an audit committee, which shall consist of all independent directors, in accordance with Article 14.4 of the "Securities and Exchange Act".
The number of committee members, terms of service, responsibilities, rules of procedure, and other matters shall be separately specified in the "Audit Committee Charter" in accordance with the "Regulations Governing the Exercise of Powers by Audit Committees of Public Companies".
Article19: The Company's board meetings shall be convened and communicated to directors seven (7) days in advance with detailed agenda; however, board meetings may be convened in case of emergency.
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A notice of such board meeting may be communicated to the Company's directors in writing or via facsimile or email.

Article 20: The remunerations of all directors shall be based on individual participation and contribution to the Company's operations. The monthly remuneration of each director shall range between NT$50 thousand and NT$150,000. Besides, each director will be separately paid the aforesaid monthly remunerations for 2-6 months as their annual bonuses at the end of each year, regardless of the Company's profits or losses. Specific monthly remuneration ranges of all directors shall be recommended by the Remuneration Committee and submitted to the board of directors for discussion and ratification by law.

The Charter of such Remuneration Committee and its regulations governing the exercise of powers shall be separately formulated by the board of directors in accordance with Article 14.6 of the "Securities and Exchange Act", other laws and regulations, and the provisions issued by the competent authority.

For travel expenses of all directors, each director is entitled to the traveling subsidy equal to NT$5 thousand per meeting based on actual attendance as appropriate.

The Company shall cover the "Directors and Officers Liability Insurance" for directors regarding their legitimate liabilities of compensation within their term of office and scope of duties.

Chapter Five: Managers

Article 21: The Company shall have one general manager, whose appointment, removal and remuneration shall be subject to Article 29 of the "Company Act".
The Company shall cover the "Directors and Officers Liability Insurance" for the general manager regarding his/her legitimate liabilities of compensation within his/her term of office and scope of duties.

Chapter Six: Accounting

Article 22: The board of directors is responsible for preparing and submitting the following statements and reports according to the legal procedures at the annual meeting of shareholders for ratification at the end of each fiscal year.
1) Business report;
2) Financial statements; and
3) Earnings appropriation or loss reimbursement proposals

The board of directors is authorized to distribute all or part of dividends and bonuses in cash based on the resolution of over half of attending directors and report at the annual meeting of shareholders, where more than two thirds of all directors shall be present, at the end of each fiscal year.

Article 22.1: The Company is required to allocate at least 2% of its annual profit before income tax (if any) in the form of cash or stock for employees' bonuses as ratified by over half of attending directors and as reported at the shareholders
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meeting, where more than two thirds of all directors shall be present.

However, in case of previous losses, the reimbursement amount shall be retained, discussed and approved by the board of directors, and then reported at the shareholders meeting. Only the employees of the Company and any domestic and overseas companies controlled or affiliated to the Company are entitled to the bonuses in the form of stock or cash; specific conditions and qualified employees shall be decided by the board of directors according to the "Company Act".

Article 23: After the final settlement at the end of each year, annual surpluses concluded by the Company are first subject to taxation and reimbursement of previous losses by law, followed by a 10% provision or reversal of special reserve as required by law. Subsequently, if there are some surpluses, they shall be combined with cumulative undistributed earnings and subject to the proposal for the distribution of earnings issued by the board of directors; a request for distribution shall be put forward at the shareholder meeting for distribution.
According to the Company's dividend policy and in consideration of its current and future development plans, investment environment, capital requirements, domestic and overseas competition, and shareholders' interest, at least 20% of its annual distributable earnings shall be distributed as shareholders' dividends and bonuses in the form of cash or stock, among which cash dividends shall amount to at least 50%, and the rest shall be stock dividends. Such proposal shall be implemented upon approval during the shareholder meeting.

Chapter Seven: Supplementary Provisions

Article 24: Any matters not addressed herein shall be governed by the "Company Act" and other related laws and regulations.
Article 25: The Articles of Incorporation was established on January 25, 1978.
The 1st amendment was made on April 24, 1978; The 2nd amendment was made on July 6, 1978; The 3rd amendment was made on April 7, 1980; The 4th amendment was made on April 7, 1982; The 5th amendment was made on March 7, 1982; The 6th amendment was made on April 18, 1982; The 7th amendment was made on March 20, 1983; The 8th amendment was made on April 14, 1984; The 9th amendment was made on March 17, 1985; The 10th amendment was made on March 27, 1986; The 11th amendment was made on March 29, 1987; The 12th amendment was made on March 12, 1988; The 13th amendment was made on March 2, 1989; The 14th amendment was made on March 18, 1990;
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The 15th amendment was made on March 27, 1991; The 16th amendment was made on April 15, 1992; The 17th amendment was made on April 2, 1993; The 18th amendment was made on April 22, 1994; The 19th amendment was made on May 18, 1995; The 20th amendment was made on April 22, 1996; The 21st amendment was made on April 26, 1997; The 22nd amendment was made on April 23, 1998; The 23rd amendment was made on May 19, 1999; The 24th amendment was made on May 30, 2000; The 25th amendment was made on April 27, 2001; The 26th amendment was made on May 23, 2002; The 27th amendment was made on May 23, 2003; The 28th amendment was made on May 11, 2004; The 29th amendment was made on May 20, 2005; The 30th amendment was made on June 8, 2007; The 31st amendment was made on August 14, 2009; The 32nd amendment was made on June 9, 2010; The 33rd amendment was made on June 13, 2012; The 34th amendment was made on June 11, 2014; The 35th amendment was made on August 25, 2014; The 36th amendment was made on June 7, 2016; The 37th amendment was made on June 12, 2019; The 38th amendment was made on June 12, 2020.

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Rules of Procedure for Shareholder Meeting of Longchen Paper & Packaging Co., Ltd.

Article 1: The Rules of Procedure are formulated in accordance with the "Corporate Governance Best Practice Principles for TWSE or TPEx Listed Companies" to set up a good shareholder meeting and corporate governance system, assist the board in supervising and managing the Company's operations.
Article 2: The Company's "Rules of Procedure for Shareholder Meeting" shall proceed according to the following rules unless otherwise specified by law or the Articles of Incorporation.
Article 3: Unless otherwise specified by law, shareholder meetings are to be convened by the board of directors.
Before a shareholder meeting is convened, a meeting agenda shall be prepared and communicated to each shareholder thirty (30) days in advance; for each shareholder holding less than 1 thousand inscribed shares, the meeting agenda shall be uploaded onto MOPS thirty (30) days in advance. Before an extraordinary shareholder meeting is convened, shareholders shall be informed fifteen (15) days earlier; for each shareholder holding less than 1 thousand inscribed shares, the meeting agenda shall be uploaded onto MOPS fifteen (15) days in advance.
The meeting advice and announcement shall state clearly the agenda to be discussed during the meeting, and can be issued in electronic form if consented by the recipient.
Election or dismissal of directors, amendments to the articles of incorporation, reduction of capital, application for the approval of ceasing its status as a public company, approval of competing with the company by directors, surplus profit distributed in the form of new shares, reserve distributed in the form of new shares, the dissolution, merger, or demerger of the corporation, or any matter under Article 185, paragraph 1hereof shall be itemized in the causes or subjects to be described and the essential contents shall be explained in the notice to convene a meeting of shareholders, and shall not be brought up as extemporary motions; the essential contents may be posted on the website designated by the competent authority in charge of securities affairs or the company, and such website shall be indicated in the above notice.

Extraordinary motion. The reason of holding shareholders' meeting shall specify shareholder’s election, and the date of assumption. After the election of shareholders' meeting, the same meeting shall not amend the date of assumption by extemporaneous motions or other methods.

A shareholder holding 1 percent or more of the total number of issued shares may submit to this Corporation a written proposal for discussion at a regular shareholders meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda.

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In addition, when the circumstances of any subparagraph of Article 1721,paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda. However, shareholder proposed for urging a company to promote public interests or fulfill its social responsibilities may still be included in the list of proposals to be discussed at a regular meeting of shareholders by the board of directors.

Prior to the book closure date before a regular shareholders meeting is held, this Corporation shall publicly announce that it will receive shareholder proposals, and the location and time period for their submission; the period for submission of shareholder proposals in written or means of electronic transmission may not be less than 10 days.

Each proposal shall be limited to three hundred words. Any proposal more than three hundred words shall not be included in the meeting agenda. Such shareholder with a proposal shall, in person, or appoint a proxy to, attend the shareholder meeting and participate in discussions thereof. The shareholder with a proposal shall be informed of the result prior to the date of shareholder meeting advice, which shall include the proposals complying with this article. The board of directors shall give reasons for exclusion of shareholder proposals from the agenda during the shareholder meeting.

Article 4: Shareholders may appoint proxies to attend shareholder meetings on their behalf by completing the Company's proxy form and specifying the scope of delegated authority.

Each shareholder may issue one proxy form and delegate one proxy only. All proxy forms shall be received by the Company at least 5 days before the shareholder meeting. In cases where multiple proxy forms are issued, the one that arrives first shall prevail. However, this excludes situations where the shareholder has issued a proper declaration to withdraw the previous proxy arrangement.

Should the shareholder decide to attend shareholder meeting personally or exercise voting rights in writing or using electronic means after a proxy form has been received by the Company, a written notice shall be sent to the Company by no later than two days before the meeting commences to withdraw the proxy arrangement. If the shareholder fails to withdraw proxy arrangement before the due date, the vote of the proxy attendant shall prevail.

Article 5: Shareholder meetings shall be held at locations that are suitable and convenient for shareholders to attend. Meetings shall not commence anytime earlier than AM9 or later than PM3.
Article 6: Attendance logs shall be signed by attending shareholders or proxies (hereinafter collectively referred to as "Shareholders"); alternatively, attendance cards shall be presented by shareholders in presence.

The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors, pre-printed ballots shall also be

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furnished.

Shareholders shall attend shareholder meetings by presenting valid conference pass, attendance card or other document of similar nature. Proxy form acquirers are required to bring identity proof for verification.

Where the shareholder is a government agency or corporate entity, more than one representative may attend shareholder meetings on their behalf. Corporate entities that have been designated as proxy attendants can only appoint one representative to attend shareholder meeting.

Article 7: If the shareholder meeting is convened by the board of directors, the Chairman shall act as chairperson. If the Chairman is unable to perform duties due to leave of absence or any reason, the Deputy Chairman shall perform duties on behalf of the absent Chairman. Where there is no position of deputy chairman, or such Deputy Chairman is also unable to perform duties due to leave of absence or any reason, the Chairman shall designate an executive director as proxy; if there is no position of executive director, a director shall be designated as proxy. If the Chairman fails to designate a proxy, either the executive director or a director shall be elected on behalf of the Chairman.

For shareholder meetings that are convened by any authorized party other than the board of directors, the convener shall chair the meeting. If there are two or more eligible conveners at the same time, one shall be appointed among themselves to chair the meeting.

The Company may summon its lawyers, certified public accountants, and any relevant personnel to be present at shareholder meetings.

Article 8: The Company's shareholder meeting shall be recorded in both video and audio, and kept for at least one year. However, if a shareholder raises a litigious claim against the Company according to Article 189 of the "Company Act", the aforesaid documents shall be retained until the end of the litigation.
Article 9: Attendance during shareholder meetings shall be calculated based on number of shares held. The number of attending shareholders shall be based on the attendance logs or such card presented by shareholders in presence as well as the number of shareholders who have exercised written or electronic votes.

The chairperson should announce the commencement of meeting as soon as it is due. However, if current attendants represent less than half of the Company's outstanding shares, the chairperson may announce to postpone the meeting up to two times, for a period totaling no more than one hour. If the attending shareholders represent more than one-thirds but less than half of outstanding shares after two postponements, the chairperson shall announce adjournment.

If the attending shareholders represent more than one-thirds but less than half of outstanding shares after such two postponements, the attending shareholders may reach a tentative resolution according to Paragraph 1, Article 175 of the "Company Act". This tentative resolution shall then be communicated to every shareholder and another shareholder meeting shall be held within the next month.

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If the number of shares represented accumulate to more than half of all outstanding shares as the meeting progresses, the chairperson may propose the tentative resolutions for final vote according to Article 174 of the "Company Act".

Article 10: If a shareholders' meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors, related cases shall be decided by a vote. The meeting shall proceed in the order set by the agenda, which may not be changed without are solution of the shareholders meeting.

The above rule also applies if the shareholder meeting is convened by any authorized party other than the board of directors.

In the arrangements described above, the chairperson cannot dismiss the meeting while two agenda items (including extemporaneous motions) are thru in progress. If the chairperson is found to have dismissed the meeting in violation of the conference rules, other board members shall immediately assist the attending shareholders according to the legal procedure in electing a separate chairperson who has the support of more than half of voting rights represented at the meeting; as a result, the meeting may continue.

The chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call for a vote, and arrange a proper time of a vote.

Article 11: Shareholders who wish to speak during the meeting shall first produce an opinion slip detailing the topic and shareholder account number (or conference pass serial number). The order of shareholders' comments shall be determined by the chairperson.

Shareholders who submit an opinion slip without actually speaking are considered to have remained silent. If the shareholder's actual comments differ from those stated in the opinion slip, the actual comments expressed shall be taken into record.

Shareholder cannot speak for more than two times, for 5 minutes each, on the same topic without the consent of the chairperson. The chairperson may restrain shareholders in violation of the above rule or interrupt any comments that are irrelevant to the topics discussed.

While a shareholder is speaking, other shareholders cannot speak simultaneously or interfere in any way unless agreed by the chairperson and the person speaking. Any violators shall be restrained by the chairperson.

Where a corporate shareholder has appointed two or more representatives to attend the shareholder meeting, only one representative may speak for each discussed topic.

After a shareholder has finished speaking, the chairperson may answer the shareholder's queries personally or appoint any relevant personnel to do so.

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Article 12: Voting rights in a shareholder meeting are calculated based on the number of shares represented.

Shares that do not carry voting rights are excluded from the calculation of outstanding shares when voting for the final resolution.

Shareholders may not vote on decisions that pose a conflicting interest between them and the Company, and neither shall they exercise voting rights on behalf of other shareholders.

The number of shares held by shareholders who are not permitted to vote shall be excluded from the calculation of total voting rights.

With the exception of trust enterprises and certain share administration agencies approved by the competent securities authority, a proxy may not represent more than 3% of total voting rights in aggregate when representing two or more shareholders during the meeting. Voting rights that exceed this threshold shall be excluded from calculation.

Article 13: Shareholders are entitled to one vote per share, except for shares that are subject to voting restrictions or situations outlined in Paragraph 2, Article 179 of the "Company Act".

When this Corporation holds a shareholders' meeting, it may allow the shareholders to exercise voting rights by electronic means and correspondence. When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting right by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting.

When a shareholder meeting is held, voting rights can be exercised using the electronic method or in writing. Instructions for exercising voting rights in writing or using the electronic form shall be clearly stated on the shareholder meeting advice. Shareholders who have voted in writing or using the electronic method are considered to have attended shareholder meeting in person. However, they are considered to have waived their rights to participate in any extemporaneous motions or amendments to the original discussions that may arise during the shareholder meeting.

Instructions to exercise written and electronic votes shall be delivered to the Company at least 2 days before the shareholder meeting. In the event of duplicate submissions, the earliest submission shall be taken into record. However, exception is granted if the shareholder issues a proper declaration to withdraw the previous instruction. Shareholders who wish to attend the shareholder meeting in person after exercising their voting rights in writing or using electronic methods are required to withdraw their votes using the same method by which the vote was cast in the first place, and by no later than two days before the day of shareholder meeting. The written/electronic vote shall prevail if not withdrawn before the

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cutoff time. If the shareholder has exercised written or electronic votes and at the same time delegated proxy to attend the shareholder meeting, then the voting decision exercised by the proxy shall prevail.

Unless otherwise specified in the "Company Act" or the Articles of Incorporation, a decision is passed with the consent of shareholders representing more than half of total voting interests in the meeting. When voting, the chairperson or delegate thereof shall announce the total number of voting rights represented by attending shareholders for every agenda item discussed. A motion is considered passed if the chairperson receives no objection from any attending directors; in case of any objection, voting by ballot shall be adopted as stated above.

In cases where several amendment or alternative solutions have been proposed at the same time, the chairperson shall determine the order in which the proposals are noted. However, if any solution is passed, all other proposals shall be deemed rejected and no further voting is necessary.

The chairperson will appoint a ballot examiner and a ballot counter; the ballot examiner shall be a shareholder.

Votes are to be counted openly at the shareholder meeting. Results of the vote, including the final tally, shall be announced on-site and recorded in minutes.

Article 14: The election of directors at a shareholders' meeting shall be held in accordance with the applicable election and appointment rules adopted by this Corporation, and the voting results shall be announced onsite immediately.
All ballots used in the above election shall be sealed, signed and held in proper custody for at least one year. However, if a shareholder raises a litigious claim against the Company according to Article 189 of the "Company Act", the aforesaid documents shall be retained until the end of the litigation.
Article 15: Shareholder meeting resolutions shall be compiled into detailed minutes, and signed or sealed by the chairperson, and disseminated to each shareholder by no later than 20 days after the meeting.

Distribution of the aforesaid detailed minutes can be made in the form of announcement.

The meeting minutes shall accurately record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be retained for the duration of the existence of the Company.

The minutes herein shall contain accurate day/month/year that the meeting is held, place, the name of Chairman, resolution method, meeting agenda and voting result (included the number of voting rights); the number of voting rights for every candidate in the election of directors, if any, shall be disclosed and maintained permanently during the period the Company survives.

Article 16: During the shareholder meeting, the Company shall publish information regarding the number of shares acquired by proxy form acquirers and the number of shares represented by proxies using the prescribed format.
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The Company shall disclose on MOPS any shareholder meeting resolutions that constitute material information as defined by law or the rules of Taiwan Stock Exchange Corporation.

Article 17: Organizers of the shareholder meeting shall wear proper identification or arm badges.

The chairperson may appoint picketers or security staff to help maintain order in the meeting. While maintaining order in the meeting, all picketers or security staff shall wear arm badges that identify their role as "Picketer" or proper identification. The chairperson may stop anyone who attempts to speak using instruments that are not provided by the Company.

The chairperson may instruct picketers or security staff to remove shareholders who continue to violate the meeting policy despite being warned by the chairperson.

Article 18: The chairperson may put the meeting in recess at appropriate times. In the occurrence of force majeure event, the chairperson may suspend the meeting temporarily and resume at another time.
If the shareholder meeting is unable to conclude all agenda items (including extemporaneous motions) before the venue is due for return, participants may resolve to continue the meeting at an alternative location.

Shareholders may also resolve to postpone or resume the meeting within the next 5 days, according to Article 182 of the "Company Act".

Article 19: The chairperson shall be authorized to decide other matters not addressed herein.
Article 20: The above rules shall take effect immediately once approved during shareholder meeting; the same applies to all subsequent revisions.

These rules were amended on June2nd, 2020.

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Directors' Shareholding of Longchen Paper & Packaging Co., Ltd.

The board shall consist of 9 directors. Directors are elected to serve a term of 3 years, which can be renewed if re-elected.
Minimum shares held by all the directors: 32,000,000 units
Number of shares held by individual and all the directors:

Book closure date for the Company's all outstanding shares of 1,277,685,727

2. Minimum shares held by all the directors: 32,000,000 units 3. Number of shares held by individual and all the directors:	2. Minimum shares held by all the directors: 32,000,000 units 3. Number of shares held by individual and all the directors:	2. Minimum shares held by all the directors: 32,000,000 units 3. Number of shares held by individual and all the directors:	2. Minimum shares held by all the directors: 32,000,000 units 3. Number of shares held by individual and all the directors:
Book closure date for the Company's all outstanding shares of 1,277,685,727					Book closure date: April 19, 2021
Occupational title	Name	Date of elected to office	Tenure	Shareholding	when elected	Number of shares held as at the book closure date
				Number of shares	Proportion of shareholding (`％`)	Number of shares	Proportion of shareholding (`％`)
Chairman	Qian Jiang Investment Co., Ltd. Representative: Cheng,Ying-Pin	June 2, 2020	3 years	90,559,731	7.43	96,129,508	7.52
Director	Qian Jiang Investment Co., Ltd. Representative: Wang, Cho-Chiun	June 2, 2020	3 years	90,559,731	7.43	96,129,508	7.52
Director	Baolong International Co., Ltd. Representative: Wu,Chi-Wei	June 2, 2020	3 years	236,444,363	19.41	245,790,467	19.23
Director	Long Sheng Investment Co., Ltd. Representative: Lee, Ji-Ren	June 2, 2020	3 years	108,329,706	8.89	108,924,706	8.52
Director	Long Sheng Investment Co., Ltd. Representative: Guo,Ming-Jian	June 2, 2020	3 years	108,329,706	8.89	108,924,706	8.52
Director	Yuema International Co., Ltd. Representative: Chiang, chun-Te	June 2, 2020	3 years	15,417,427	1.26	15,417,427	1.20
Independent Director	Chiu, Shean-Bii	June 2, 2020	3 years	0	0.00	0	0.00
Independent Director	Lee, Tsun-Hsiu	June 2, 2020	3 years	0	0.00	0	0.00
Independent Director	Wu, Chie-Fuh	June 2, 2020	3 years	0	0.00	0	0.00
Total				450,751,227	37.02	466,262,108	36.49

Note: The Company has set up the Audit Committee. The rule for the legal number of shares held by supervisors is not applicable.

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AI assistant

Longchen P&P — AGM Information 2021

51936_rns_2021-07-15_57dcdfee-27ac-42ca-91b9-570c435eacd4.pdf

2021 Annual Shareholders’ Meeting Meeting Agenda (Translation)

Table of Contents

Longchen Paper & Packaging Co., Ltd. 2021 Annual Shareholders’ Meeting Agenda (Translation)

Report Items

Report One: Business Report of 2020

Longchen Paper & Packaging Co., Ltd. Business Report of 2020

I. 2020 Business Report

2. Operations

3. Research and development status

II. Business policies and major production and marketing strategies

Report Two: Audit Committee’s Review Report

Longchen Paper & Packaging Co., Ltd. Audit Committee’s Review Report

Report Three: 2020 Annual Employee’s Bonus Distribution Report

Report Four: 2020 Cash Dividends Distribution Report

Ratification Items

[Ratification Items]

Case 1

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Major transactions with related parties

Government subsidy income

Other matter - Making Reference to the Audits of Component Auditors

Other matter –Parent company only financial reports

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

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

Longchen Paper & Packaging Co., Ltd. and subsidiaries

CONSOLIDATED BALANCE SHEETS

December 31, 2020 and 2019

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Longchen Paper & Packaging Co., Ltd. and subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2020 and 2019

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

Longchen Paper & Packaging Co., Ltd. and subsidiaries

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2020 and 2019

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

Longchen Paper & Packaging Co., Ltd. and subsidiaries

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2020 and 2019

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Major transactions with related parties

Subsidy income from Government

Other matter -Making Reference to the Audits of Component Auditors

Other matter - Audit for the accompanying financial statements

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

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Notice to Readers

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY BALANCE SHEET December 31, 2020 and 2019

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2020 and 2019

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2020 and 2019

(English Translation of Parent Company Only Financial Statements and Report Originally Issued in Chinese)

Longchen Paper & Packaging Co., Ltd.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

For the years ended December 31, 2020 and 2019

Case 2(proposed by the Board of Directors)

Longchen Paper & Packaging Co., Ltd. Earnings Distribution Proposal 2020

Discussion Items

[Discussion Items]

Case 1(proposed by the Board of Directors)

[Extemporaneous Motions]

[Adjournment]

Appendixes

Longchen P&P AGM Information 2021