OPC — Annual Report 2020

Aug 3, 2021

Stock Code: 1321 http://mops.twse.com.tw/ http://www.opc.com.tw/

OCEAN PLASTICS CO., LTD.

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2020 Annual Report

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Printed on May 20, 2021

(I) Spokesperson and Deputy Spokesperson

Spokesperson

Spokesperson Deputy Spokesperson Name: WANG, YI-HO Name: CHIU, CHUN-FU Title: Manager Title: Senior Commissioner Tel: (02) 2306-2131 Tel: (02) 2306-2131 (02) 2308-1188 (02) 2308-1188 E-mail: andy@opc.com.tw E-mail: denny@opc.com.tw

(II) Headquarters, Branches and Plant

Name	Address	Tel
Headquarters	5F & 6F, No. 310, Juguang Rd., Taipei City	(02) 2306-2131 (02)2308-1188
Processing Dept.	No. 38-1, Xiapuding, Neghborhood 3, Xiapu Vil., Xinwu Dist.,Taoyuan City	(03) 486-1281
Building MaterialsDept.	No. 539, Longxing Rd., Zhongli Dist., Taoyuan City	(03) 438-4626~7
Raw Materials Dept.	No. 375, Haihu East Rd., Haihu Vil., Luzhu Dist., Taoyuan City	(03) 354-1626
Synthetic Leather Dept.	No. 375, Haihu East Rd., Haihu Vil., Luzhu Dist., TaoyuanCity	(03) 354-3080
Tainan Contact Office	No. 131, Jianping 14th St., Tainan City	(06) 297-4511~2

(III) Stock Transfer Agent

Name: Stock Transfer Agency Department, KGI Securities Co., Ltd. Address: 5F, No. 2, Sec. 1, Chongqing S. Rd., Taipei City

Tel: (02) 2389-2999 Website: http://www.kgieworld.com.tw/Agency/Agency_home.aspx

(IV) Auditors

Auditors: CPA CHEN, CHEN-CHIEN

CPA HUANG, YUNG-HUA

Name of Accounting Firm: KPMG Taiwan Address: 68F, No. 7, Sec. 5, Xinyi Rd., Taipei City 11049 Tel: (02) 8101-6666 Fax: (02) 8101-6667 Website: http://www.kpmg.com.tw/

(V) Overseas Securities Exchange : No.

(VI) Corporate Website : http://www.opc.com.tw

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Table of Contents
Contents	Page
I.Letter to Shareholders	1
II.Company Profile	2
1. Date of Incorporation	2
2. Company History	2
III.Corporate Governance Report	4
1. Organization	4
2. Directors, Supervisors, President, Vice President, Assistant Managers and Heads of Departments and Branch Organizations	6
3. Remuneration of Directors, Supervisors, President and Vice Presidents in the Most Recent Year	12
4. Implementation of Corporate Governance	16
5. Information Regarding the Company’s Audit Fee	44
6. Replacement of CPA	44
7. Where the company's chairperson, president, or any managerial officer in charge of
finance or accounting matters has in the most recent year held a position at the	44
accounting firm of its CPAs or at an affiliated enterprise of such accounting firm
8. Any transfer of equity interests and pledge and change in equity interests by a
director, supervisor, managerial officer, or shareholder with a stake of more than 10	44
percent
9. Relationship among the Top Ten Shareholders	46
10. The total number of shares and total equity stake held in any single enterprise by the
company, its directors and supervisors, managerial officers, and any companies	48
controlled either directly or indirectly by the company
IV.Capital Overview	49
1. Capital and Shares	49
2. Corporate Bonds	54
3. Preferred Shares	54
4. Global Depository Receipts	54
5. Employee Stock Options	54
6. Issuance of New Restricted Employee Shares	54
7. Status of New Shares Issuance in Connection with Mergers and Acquisitions	54
8. Financing Plans and Implementation	54
V.Operational Highlights	55
1. Business Activities	55
2. Market and Sales Overview	57
3. Human Resources	62
4. Environmental Protection Expenditure	63
5. Labor Relations	64
6. Important Contracts	67

VI.Financial Information	68
1. Five-Year Financial Summary	68
2. Five-Year Financial Analysis	74
3. Audit Committee’s Report for the Most Recent Year	77
4. Financial Statements for the Most Recent Year	78
5. Parent company only financial statements audited by CPAs for the most recent year	78
6. If the Company and its associates have experienced financial difficulties in the most
recent year and by the print date of the annual report, the impact on the financial	78
position of the Company shall be specified
VII.Review of Financial Conditions, Operating Results, and Risk Management	79
1. Financial Conditions	79
2. Financial Performance	80
3. Analysis of Cash Flows	81
4. Major Capital Expenditure Items	81
5. Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year	81
6. Analysis and Assessment of Risks	82
7. Other important matters	83
VIII.Special Disclosure	84
1. Information of the Associates	84
2. Private Placement Securities in the Most Recent Years	89
3. The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years	89
4. Other Necessary Items to Be Supplemented	89
5. Any event that had a material impact on the rights of sharholders or the prices of
securities provided in Clause 2, Paragraph 3, Article 36 of the Securities and	89
Exchange Act occurred
Appendix 1: Financial Statements in the Most Recent Year	90
Apoendix 2: Parent company only financial statements audited by CPAs for the most recent	164
year

I. Letter to Shareholders

Dear shareholders:

2020 was a very special year. The global economy was affected by the trade war between the U.S. and China and COVID-19. Fortunately, Taiwan's economic situation was the least affected compared to other countries. In terms of food, clothing, housing, transportation, and entertainment, the restrictions were also minimal, and the overall plastic industry was not affected much. Due to the change in the price of upstream petrochemical raw materials, there is a large price difference between VCM raw materials and PVC powder, which resulted in a significant benefit to the industry, and there was also benefit from the transfer of investments outside the industry and the disposal of long term investments. Therefore, in 2020, there was a significant growth in profit.

Through the consolidated financial statements for the year ended December 31, 2020, the Company reported a turnover of NT$4,980,018 thousand, and there was a 6.94% increase of NT$323,328 thousand from NT$4,656,690 thousand for the year ended December 31, 2019. The operating cost ratio for the year ended December 31, 2020 was 87.95%, which was a 7.55% decrease from the operating cost ratio of 95.5% for the year ended December 31, 2019. Gross profit for the year ended December 31, 2020 was NT$600,125 thousand, which was an increase of NT$390,424 thousand compared with the gross profit of NT$209,701 thousand for the year ended December 31, 2019, and gross profit margin increased from 4.5% to 12.05%. The operating expenses for the year ended December 31, 2020 were NT$367,431 thousand, which was an increase of NT$44,871 thousand compared with the operating expenses of NT$322,560 thousand for the year ended December 31, 2019. In 2020, the net operating income was NT$232,694 thousand, which was an increase of NT$345,553 thousand compared with the net operating loss of NT$112,859 thousand in 2019. A non-operating net income of NT$169,019 thousand was generated in 2020 from the shares of affiliates and joint ventures recognized under the equity method. The net income before tax for the year was NT$401,713 thousand, which was an increase of NT$266,250 thousand compared with the net income before tax of NT$135,463 thousand in 2019. After deducting the income tax expense of NT$27,616 thousand and the loss of NT$341,055 thousand from discontinued operations, the net income for the year was NT$715,152 thousand. Other comprehensive income for the period was NT$561,499, and the total comprehensive income for the period was NT$1,276,651 thousand.

In 2021, the COVID-19 epidemic has not yet stabilized and the political and economic situation around the world remains volatile, affecting the normal life and business activities of many people. Of course, it also affects the global economic development. We will carefully monitor the changes in the overall plastics industry. We will carefully observe the changes in the overall plastic industry. With the government's continued promotion of the economic revitalization program, the overall economic prosperity of the country will be boosted. We will continue to work hard to improve the revenue and profit of our reinvested subsidiaries. The revitalization of idle assets to increase profits has always been our goal. In the new year, in addition to increasing production capacity, reducing costs and improving quality, we will also strengthen new product development and research to develop high value-added products, and fully grasp the sources of raw material supply to ensure that there is no shortage of sources in order to achieve various production targets. In terms of sales, we should develop new customers and markets to increase revenue, especially to grasp international financial and economic information, keep an eye on price trends, increase market share, strengthen after-sales service, and cooperate with government regulations to fulfill our corporate responsibility of integrity. We hope that our shareholders will continue to provide assistance and support in the future, and we believe that with the hard work of all our employees, we will be able to overcome all obstacles and achieve our operational goals in order to meet the trust of our shareholders.

Sincerely

Chairperson TAN, KIN-MEN

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II. Company Profile

1. Date of Incorporation: June 7, 1965

2. Company History:

• Apr 1965: Ocean Plastics Co was founded by Yee Fong Chemical & Industrial Co and several entrepreneurs, including Chen Fang-chu, with a factory set up in Zhonghe City, Taipei County to initially produce PVC rigid plastic pipes and primary plastic processed products such as PVC plastic cloth, film and rubber.

• 1967: Increased production of secondary plastic processed products such as printed tape and wallpaper, and high-frequency processed products.

• 1970: Technical cooperation with Akimi Protective Film Co, Japan, to develop and produce high quality ru leather and PU synthetic leather.

• Sep 1976: In view of the trend of capital concentration in the petrochemical industry in the future, the Company merged its associate, Yee Fong Chemical & Industrial Co, in response to the government's policy of encouraging consolidation of small and medium-sized enterprises, while taking into consideration its future development by setting up a separate plant in Luzhu Township, Taoyuan County.

• 1977: Technical cooperation with Kaneka Corporation, Japan. Expansion of the Taoyuan plant to produce PVC molding powder.

• 1978: Due to the need for centralised production and management, the PVC powder production facilities at the Yee Fong factory were moved to the Taoyuan factory for expansion, and the Yee Fong factory was changed to specialise in the manufacture of PVC rigid pipes due to its proximity to the market, and a research institute was set up at the Ocean Plastics factory to step up production and research and development.

• Jan 1985: Increased production of PVC rigid plastic cloth.

1986: To cater for the operational needs of the Company, a factory was set up in Chungli City, Taoyuan County. Oct 1987: The Chungli plant officially commenced operation and the PVC rigid plastics pipes, which had been produced at the Ocean Plastics plant, was relocated to the Chungli plant, and a supplementary public offering of shares was approved by the Securities and Futures Commission of the Ministry of Finance. Nov 1987: Increase in paid-up capital to NT$543,717,330. Jul 1988: Increase in paid-up capital to NT$652,460,800. Sep 1989: Increase in paid-up capital to NT$796,002,180. Mar 1990: Increased production of PVC rigid plastic sheets and PVC foamed plastic sheets. May 1990: The head office was relocated to new premises on the 5th and 6th floors of No. 310 Juguang Road, Taipei City to meet the needs of business development. Jul 1991: To enhance organizational management, the Kaohsiung liaison office was closed and merged into the Tainan liaison office. Sep 1991: Increase in paid-in capital to NT$995,002,730. Sep 1992: Increase in paid-up capital to NT$1,094,503,020. Jul 1993: Readjusted the organization of the Company in line with the promotion of the responsibility center system.

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Sep 1993: Increase in paid-up capital to NT$1,236,788,430.

Dec 1994: Ocean Plastics factory received DNV ISO 9002 quality assurance certification. Sep 1995: Increase in paid-in capital to NT$1,360,467,280.

Jun 1996: Chungli factory obtained ISO 9002 quality assurance certification from the Bureau of Standards, Metrology and Inspection.

Oct 1996: Increase in paid-up capital to NT$1,623,060,660.

Jan 1997: Ocean Plastics factory was awarded ISO 9002 quality assurance certification from the Bureau of Standards, Metrology and Inspection.

Oct 1997: Taoyuan plant received RW-TUV ISO 9002 quality assurance certification. Jul 1998: Increase in paid-in capital to NT$1,981,757,070.

Jan 1999: The Company's shares are listed on the Taiwan Stock Exchange or the Taipei Exchange . Jan 1999: Chungli factory passed SGS ISO14001 environmental management system certification. Aug 2000: Increase in paid-in capital to NT$2,080,844,940.

Aug 2000: The operating organization was reorganized to form the Processing Division (formerly Ocean Plastics Plant), the Raw Materials Division (formerly Taoyuan Plant) and the Building Materials Division (formerly Chungli Plant).

Dec 2000: Hunan Ocean Wide Plastics Ltd was established to produce rigid plastic pipes and entered the Chinese building materials market.

Aug 2003: Ocean Plastics, Taoyuan and Chungli plants passed the 2000 version of ISO 9001 quality assurance certification.

Aug 2005: Increase in paid-in capital to NT$2,184,887,190.

Sep 2005: Dongguan Dayang Chuangxin Leather Products Co was established, mainly producing PU synthetic leather.

Aug 2006: Increase in paid-in capital to NT$2,272,282,680.

Oct 2006: Taoyuan plant received TUV NORD 14001 environmental management system certification. Dec 2007: Ocean Plastics (Huizhou) Co was established to produce soft plastic cloth.

Jan 2011: Restructured the operating organization to form the Synthetic Leather Division.

Jan 2016: Relocated Zhonghe factory to Sinwu in Taoyuan.

Nov 2019: Shareholding in Hunan Ocean Wide Plastics Ltd was for sale.

Mar 2020: The Investment Commission of the Ministry of Economic Affairs approved the cancellation of the investment in Hunan Ocean Wide plant.

At present, our Company is primarily engaged in the manufacture of PVC raw materials and processing and PU synthetic leather. Depending on the nature of the products, we have set up business divisions for processing, building materials, raw materials and synthetic leather, etc. Our factories are located in Sinwu, Luchu and Chungli in Taoyuan, and we have also opened a liaison office in Tainan to facilitate business expansion, making us one of the well-known listed plastics companies in Taiwan. In addition to its own operations, the Company also invests in domestic industries and indirectly in China. In response to the needs of urban development, the Ocean Plastics plant was relocated to the Sinwu plant in 2016, and the Company has rethought its future development by focusing the new compound on the green process and green products, and introducing reusable TPE CELLwood, while the Zhonghe plant is developing residential land in line with the urban plan, which is believed to be beneficial to the Company going forward.

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III. Corporate Governance Report

1. Organization:

2. (1) Organizational Chart:

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(2 ) Major Corporate Functions:

• (1) Audit Committee: assists the Board in overseeing the fair presentation of the Company's financial statements and the effective implementation of internal controls.

• (2) Remuneration Committee: assists the Board in the administration and evaluation of the overall remuneration and benefits of the Company and the remuneration of directors and managers.

• (3) President’s Office: carries out all the business of the Company by resolution of the Board.

• (4) Audit Office: performs internal auditing and keeps track of improvements to deficiencies identified in audits.

• (5) Planning Office: develops and analyzes business objectives and plans.

• (6) Shareholder Services Office: deals with matters relating to the shareholder services.

• (7) Environmental Safety Office: handles safety, health and environmental safety related matters.

• (8) Administration Dept.: deals with matters relating to personnel, general affairs, materials and contracting.

• (9) Finance Dept.: deals with matters relating to financial scheduling, budgeting, accounts, costs, cashier, taxation, etc.

• (10) Information Dept.: deals with the establishment of computer operation systems and the planning and design of software and hardware.

• (11) Research & Development Dept.: deals with R&D on production methods, technologies, raw materials, products, etc.

• (12) Raw Materials, Building Materials, Synthetic Leather and Processing Dept.: handle matters relating to the production, domestic and export sales, sales management, profit management and future development of each division.

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2. Directors, Supervisors and Management Team:

(1) Directors and Supervisors:

Directors and Supervisors (1)

April 24, 2021

Title	Nationality / Country of Origin	Name	Gender	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education）	Other Position	Executives, Directo or Supervisors who spouses or within t degrees of kinshi	Executives, Directo or Supervisors who spouses or within t degrees of kinshi	Executives, Directo or Supervisors who spouses or within t degrees of kinshi	w p i
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relat
Chairman	ROC	TAN, KIN-MEN	M	107.06.30	3	77.6.3	4,695,202	2.07	4,695,202	2.07	-	-	-	-	MA in Economics Meiji University	Note 2	None	None	Non
Director (Note 1)	ROC	Hsuan- Yang Investment Co.,Ltd.	F	107.06.30	3	92.6.30	1,440,247	0.63	1,440,247	0.63	-	-	-	-	Department of Accounting, Soochow University	Manager of Finance Dept., Yee Fong Chemical & Industrial Co., Ltd.	None	None	Non
		Represent ative WANG, HAI-LUN				107.6.30
Director (Note 1)	ROC	Want- Want Co., Ltd.	M	107.06.30	3	85.5.14	2,976,669	1.31	2,976,669	1.31	-	-	-	-	Want Want Group Investment Department Deputy General Manager	Vice President of Investment Department	None	None	Non
		Represent ative HSIEH, YU- CHIN				101.6.30
Director (Note 1)	ROC	Li-Hsiang Enterprise Co.,Ltd.	M	107.06.30	3	104.6.30	310,000	0.14	310,000	0.14	-	-	-	-	M.S. in Chemistry, University of Washington (Seattle), USA M.B.A., University of Massachusetts, USA	None	None	None	Non
		Represent ative CHU, TSUNG- PIN				101.6.30
Director	ROC	Peter Chen	M	107.06.30	3	74.6.3	3,943,860	1.74	3,943,860	1.74	-	-	-	-	Department of International Trade, University of California, USA	None	None	None	Non

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Title	Nationality / Country of Origin	Name	Gender	Date Elected	Term (Years)	Date First Elected	Shareholding when Elected	Shareholding when Elected	Current Shareholding	Current Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Experience (Education）	Other Position	Executives, Directo or Supervisors who spouses or within t degrees of kinshi	Executives, Directo or Supervisors who spouses or within t degrees of kinshi	Executives, Directo or Supervisors who spouses or within t degrees of kinshi	w p i
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relat
Director	ROC	WANG, JU- KENG	M	107.06.30	3	89.6.30	761,150	0.32	705,150	0.31	6,932	0.00 3	-	-	St. Dominic Catholic High School	None	None	None	Non
Independent Director	ROC	CHANG, YIE-YUN	F	107.06.30	3	104.6.30	-	-	-	-	-	-	-	-	University of Munich, Germany PhD	Vice President of Fu Jen Catholic University	None	None	Non
Independent Director	ROC	HOU, MING-LI	M	107.06.30	3	104.6.30	-	-	-	-	-	-	-	-	Department of Accounting, National Cheng KungUniversity	Partner, Risheng & Associates, Inc.	None	None	Non
Independent Director	ROC	LIN, CHAO- MIN	M	107.06.30	3	104.6.30	-	-	-	-	-	-	-	-	Taipei University Business Management Master of Business	Partner, Textron & Associates, Inc.	None	None	Non

Note 1: The major shareholders of corporate shareholders are listed in the attached table.

Note 2: A. Chairperson of Ocean Plastics Co., Ltd.; B. Director of Ocean Plastics (Huizhou) Co., Ltd. (Juristic person representative of SAGE HOLDINGS).

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Table 1: Major shareholders of the institutional shareholders

	April 24,2021 Major Shareholders Name % SHIH, CHIN-YUN 97 % CHEN, CHIN-WEN 20 % CHEN, CHIN-HSIN 20 % CHEN, CHIN-SHENG 20 % CHEN,LING-MEI 10 % CHEN,HUI-MEI 10 % CHEN, JUNG-JUNG 10 % CHEN-CHOU,TSAI-YU 10 % TSAI,YEN-MING 70.37 % PENG,YU-MAN 16.22% TSAI, SHAO-CHUNG 6.82% TSAI, WANG-CHIA 6.59 %	April 24,2021 Major Shareholders Name % SHIH, CHIN-YUN 97 % CHEN, CHIN-WEN 20 % CHEN, CHIN-HSIN 20 % CHEN, CHIN-SHENG 20 % CHEN,LING-MEI 10 % CHEN,HUI-MEI 10 % CHEN, JUNG-JUNG 10 % CHEN-CHOU,TSAI-YU 10 % TSAI,YEN-MING 70.37 % PENG,YU-MAN 16.22% TSAI, SHAO-CHUNG 6.82% TSAI, WANG-CHIA 6.59 %
Name of Institutional Shareholders	Major Shareholders
	Name	%
Li-HsiangEnterprise Co.,Ltd.	SHIH, CHIN-YUN	97 %
Hsuan-Yang Investment Co., Ltd.	CHEN, CHIN-WEN	20 %
	CHEN, CHIN-HSIN	20 %
	CHEN, CHIN-SHENG	20 %
	CHEN,LING-MEI	10 %
	CHEN,HUI-MEI	10 %
	CHEN, JUNG-JUNG	10 %
	CHEN-CHOU,TSAI-YU	10 %
Want-Want Co., Ltd.	TSAI,YEN-MING	70.37 %
	PENG,YU-MAN	16.22%
	TSAI, SHAO-CHUNG	6.82%
	TSAI, WANG-CHIA	6.59 %

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Professional qualifications and independence analysis of directors and supervisors (2)

	supervisors (2)	supervisors (2)	supervisors (2)	supervisors (2)	supervisors (2)	supervisors (2)	supervisors (2)	supervisors (2)	supervisors (2)
														April 24,2021
Criteria Name (Nope 1)	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience			Independence						Criteria (Note 2)						Number of Other Public Compani es in Which the Individu al is Concurre ntly Serving as an Independ ent Director
	An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College, College or University	A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who has Passed a National Examination and been Awarded a Certificate in a Profession Necessary for the Business of the Company	Have Work Experienc e in the Areas of Commerce , Law, Finance, or Accountin g, or Otherwise Necessary for the Business of the Company	1	2	3	4	5	6	7	8	9	10	11	12
TAN, KIN-MEN	-	-	V	V	-	-	-	V	V	V	V	V	V	V	V	0
WANG, JU- KENG	-	-	V	V	V	V	V	V	V	V	V	V	V	V	V	0
Peter Chen	-	-	V	-	V	-	V	V	V	-	V	V	V	V	V	0
WANG, HAI-LUN (Juristic person representative of Hsuan- Yang Investment)	-	-	V	-	V	V	V	-	V	V	-	V	V	V	-	0
HSIEH, YU- CHIN (Juristic person representative of Want- Want)	-	-	V	V	V	V	V	V	V	V	V	V	V	V	-	0
CHU, TSUNG-PIN (Juristic person representative of Li-Hsiang)	-	-	V	V	V	V	V	V	V	V	V	V	V	V	-	0

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HOU, MING-LI	-	V	V	V	V	V	V	V	V	V	V	V	V	V	V	0
LIN, CHAO-MIN	-	V	V	V	V	V	V	V	V	V	V	V	V	V	V	1
CHANG, YIE-YUN	V	-	V	V	V	V	V	V	V	V	V	V	V	V	V	0

• Note 1: The number of columns is adjusted according to the actual number.

• Note 2: Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office

• (1) Employees who are not employees of the Company or its affiliates.

• (2) Directors or supervisors who are not directors or supervisors of the Company or its affiliates (except in the case where the Company and its parent company, subsidiaries or subsidiaries of the same parent company are appointed as independent directors in accordance with this Act or local laws and regulations).

• (3) Natural shareholders who do not hold more than 1% of the total number of issued shares or the top 10 shareholdings in the name of themselves, their spouses, minor children or others.

• (4) The spouse, relative within the second degree of consanguinity or relative within the third degree of consanguinity of a person who is not a manager listed in (1) or a person listed in (2) or (3).

• (5) A director, supervisor or employee of a corporate shareholder who does not directly hold more than 5% of the total number of the Company's outstanding shares, or who holds the top five shares or who designates a representative as a director or supervisor of the Company in accordance with Article 27, Paragraph 1 or 2 of the Company Act (except in the case where the Company and its parent company, subsidiary, or subsidiary of the same parent company serve concurrently as independent directors established by law or by local law).

• (6) A director, supervisor or employee of another company who is not controlled by the same person as the Company in terms of directorships or more than half of the voting shares (except in the case of independent directors of the Company or its subsidiaries or subsidiaries of the same parent company established by law or by local laws and regulations, who serve concurrently with each other).

• (7) A director (director), supervisor (supervisor), or employee of another company or organization who is not the same person or spouse of the chairman, president, or equivalent of the company (except in the case where the independent directors of the company or its parent company, subsidiary, or subsidiary of the same parent company established under this Act or the laws of the local country are concurrently appointed to each other).

• (8) Directors (directors), supervisors (supervisors), managers or shareholders holding more than 5% of the shares of a specific company or organization that does not have financial or business dealings with the Company (except for a specific company or organization that holds more than 20% but not more than 50% of the total issued shares of the Company and is an independent director of the Company and its parent company, subsidiary or subsidiary of the same parent company established by law or local laws and regulations. ).

• (9) Professionals in business, legal, financial, accounting and other related services who do not provide auditing services for the company or its affiliates or who have received an accumulated amount of compensation of less than NT$500,000 in the last two years are sole proprietors, partners, directors (directors), supervisors (supervisors), managers, and their spouses of companies or organizations. However, members of the Salary and Compensation Committee, the Public Takeover Review Committee, or the Special Committee on Mergers and Acquisitions, who perform their duties and responsibilities in accordance with the Securities and Exchange Act or the relevant laws and regulations of the Business Mergers and Acquisitions Act, are excluded.

• (10)No spouse or relative within two degrees of kinship with other directors.

• (11)There is no one of the cases in Article 30 of the Company Act.

• (12)There is no Article 27 of the Company Act that provides for the election of the government, legal entities or their representatives.

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(2) Management Team:

Management Team

													April 24,2021	April 24,2021	April 24,2021	April 24,2021
Title	Nationality / Country of Origin	Name	Gender	Date Effective	Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience (Education）	Other Position	Managers who are Spouses or Within Two Degrees of Kinship			Remark
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
President	ROC	TAN, KIN- MEN	M	86.06.30	4,695,202	2.07	-	-	-	-	MA in Economics, Meiji University	Note 1	Note	Note	Note	Note 4
Assistant Manager	ROC	SHEN, CHAO- PIN	M	104.11.01	1,019	0.0004	-	-	-	-	Department of Chemistry, National Chung Hsing University	Note 2	Note	Note	Note
Financial Executive	ROC	WANG, YI-HO	M	91.01.01	88,938	0.04	3,439	0.002	-	-	Master of Business, Soochow University	Note 3	Note	Note	Note

Note 1: See the notes in Schedule I on P6.

Note 2: A. Executive director of OCEAN GROUP (Juristic person representative of Ocean Plastics Co., Ltd.)

• B.Chairperson of Ocean Plastics (Huizhou) Co., Ltd. (Juristic person representative of SAGE HOLDINGS)

。 Note 3: A. Supervisor of Chang-Hsin-Hsin-Yeh Co., Ltd. (Juristic person representative of Ocean Plastics Co., Ltd.)

• B. Chairperson of UNIVERSE ENTERPRISES (Juristic person representative of Ocean Plastics Co., Ltd.)

• C. Chairperson of FERMAT ENTERPRISES (Juristic person representative of Ocean Plastics Co., Ltd.)

• D. Executive director of SAGE HOLDINGS (Juristic person representative of Ocean Group)

• E. Executive director of RISE FUTURE INT’L LTD (Juristic person representative of Ocean Group)

• F. Chairperson of OPC HOLDINGS (Juristic person representative of Ocean Group)

• G. Supervisor of Dongguan Ocean Innovative Leather Products Co., Ltd. (Juristic person representative of RISE FUTURE INT’L LTD)

• Note 4: If the general manager or equivalent (top manager) and the chairman of the board are the same person, or are related to each other as spouses or first cousins, the reasons, reasonableness, necessity and response measures should be disclosed.

The Chairman of the Board of Directors also serves as the President of the Company. The Chairman of the Board of Directors directly supervises the

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operation of each department and communicates closely with the Directors to enhance operational efficiency and strengthen the execution of decisions.

1. Amend the Articles of Incorporation to plan for no less than three independent directors to enhance the functions of the Board of Directors and strengthen the supervisory function.

2. The three existing independent directors are specialized in the fields of finance, accounting and law respectively, and can effectively perform their supervisory functions.

3. Arranging for directors to attend professional director courses of external organizations such as the Securities and Futures Commission to enhance the operational effectiveness of the Board of Directors.

4. No more than half of the current directors are also employees or managers.

3. Remuneration of Directors, Supervisors, President, and Vice President:

(1-1) Remuneration of Directors (by way of disclosure of names at individual grade levels) Unit: NT$ thousands

	Title	Name	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Ratio of Total Remuneration (A+B+C+D) to Net Income (%)	Ratio of Total Remuneration (A+B+C+D) to Net Income (%)	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Relevant Remuneration Received by Directors Who are Also Employees	Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%)	Ratio of Total Compensation (A+B+C+D+E+F +G) to Net Income(%)	Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary
			Base Compensation (A)		Severance Pay (B)		Bonus to Directors (C)		Allowances (D)				Salary, Bonuses, and Allowances (E)		Severance Pay (F)		Profit Sharing- Employee Bonus (G)
			The compa ~~n~~y	All compani es in the consolid ated financial statemen ts	The compa ~~n~~y	All compani es in the consolid ated financial statemen ts	The compan ~~y~~	All compani es in the consolid ated financial statemen ts	The compa ~~n~~y	All compani es in the consolid ated financial statemen ts	The compan ~~y~~	All compani es in the consolid ated financial statemen ts	The compan ~~y~~	All compani es in the consolid ated financial statemen ts	The compa ~~n~~y	All compa nies in the consoli dated financi al statem ents	The company		Companie s in the consolidat ed financial statements		The compan ~~y~~	Compan ies in the consolid ated financial statemen ts
																	Cash	Stoc k	Cash	Stoc k

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Director	TAN, KIN-MEN	TAN, KIN-MEN	144	144	0	0	2,739	2,739	25	25	0.41	0.41	3,995	3,995	0	0	0	0	0	0	0.97	0.97	6,903
	Hsuan- Yang Investm ent Co., Ltd.	Represe ntative WANG, HAI- LUN	144	144	0	0	912	912	25	25	0.15	0.15	0	0	0	0	0	0	0	0	0.15	0.15	1,081
	Want- Want Co., Ltd.	Represe ntative HSIEH, YU- CHIN	144	144	0	0	912	912	25	25	0.15	0.15	0	0	0	0	0	0	0	0	0.15	0.15	1,081
	Li- Hsiang Enterpri se Co., Ltd.	Represe ntative CHU, TSUNG -PIN	144	144	0	0	912	912	25	25	0.15	0.15	0	0	0	0	0	0	0	0	0.15	0.15	1,081
	Peter Chen		144	144	0	0	912	912	25	25	0.15	0.15	1,033	1,033	0	0	0	0	0	0	0.30	0.30	2,114
	WANG, JU- KENG		144	144	0	0	912	912	25	25	0.15	0.15	0	0	0	0	0	0	0	0	0.15	0.15	1,081
Independ nt Director	CHANG, YIE-YUN		144	144	0	0	0	0	25	25	0.02	0.02	0	0	0	0	0	0	0	0	0.02	0.02	169
	~~e~~ HOU, MING-LI		144	144	0	0	0	0	25	25	0.02	0.02	0	0	0	0	0	0	0	0	0.02	0.02	169
	LIN, CHAO-MIN		144	144	0	0	0	0	25	25	0.02	0.02	0	0	0	0	0	0	0	0	0.02	0.02	169

(2-1) Remuneration of Supervisors: Not applicable.

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(3-1) Remuneration of the President and Vice President (names and remuneration disclosed separately ）

Unit: NT$ thousands

Title	Name	Salary(A)	Salary(A)	Severance Pay (B)	Severance Pay (B)	Bonuses and Allowances (C)	Bonuses and Allowances (C)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Ratio of total compensation (A+B+C+D) to net income (%)	Ratio of total compensation (A+B+C+D) to net income (%)	Compensation paid to the President and Vice President from an Invested Company Other Than the Company’s Subsidiary
		The company	Companies in the consolidate financial statements	The company	Companies in the consolidate d financial statements	The company	Companies in the consolidate d financial statements	The company		Companies in the consolidate financial statements		The company	Companies in the consolidate d financial statements
								Cash	Stock	Cash	Stock
President	TAN, KIN-MEN	3,442	3,442	0	0	553	553	0	0	0	0	0.56	0.56	3,995

(4-1) Remuneration of the top five highest paid executives of listed companies (names and remuneration disclosed separately ）

Unit: NT$ thousands

Title	Name	Salary(A)	Salary(A)	Severance Pay (B)	Severance Pay (B)	Bonuses and Allowances (C)	Bonuses and Allowances (C)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Profit Sharing- Employee Bonus (D)	Ratio of total compensation (A+B+C+D) to net income(%)	Ratio of total compensation (A+B+C+D) to net income(%)	Compensation paid to the President and Vice President from an Invested Company Other Than the Company’s Subsidiary
		The company	Companies in the consolidate financial statements	The company	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements	The company		Companies in the consolidate financial statements		The company	Companies in the consolidated financial statements
								Cash	Stock	Cash	Stock
President	TAN, KIN-MEN	3,442	3,442	-	-	553	553	-	-	-	-	0.56	0.56	3,995
Assistant Manager	SHEN, CHAO-PIN	1,708	1,708	-	-	318	318	62	-	62	-	0.29	0.29	2,088
Senior Manager	CHEN, YI- HSIUNG	1,492	1,492	-	-	207	207	55	-	55	-	0.25	0.25	1,754
Senior Manager	HSIEH, TAI-PENG	1,441	1,441	-	-	208	208	62	-	62	-	0.24	0.24	1,711
Manager	CHANG, YU-HUI	1,394	1,394	-	-	185	185	50	-	50	-	0.23	0.23	1,629

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Name of the managers who distributes employee compensation and how it is distributed

						Unit: NT$ thousands
	Title	Name	Stock	Cash	Total	Total to net income after tax (%)
Manager	President	TAN, KIN-MEN	-	107	107	0.01
	Assistant Manager	SHEN, CHAO-PIN
	Financial Executive	WANG, YI- HO

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

Presidents:
Title	2020 Ratio of total remuneration paid to directors, supervisors, presidents and vice presidents to net income (%)		2019 Ratio of total remuneration paid to directors, supervisors, presidents and vice presidents to net income (%)
	The compan y	Companies in the consolidated financial statements	The company	Companies in the consolidated financial statements
Directors	1.94	1.94	5.53	5.53
Presidents and Vice Presidents

(1) The ratio of total remuneration paid by the Company and by all companies included in the consolidated financial statements for the two most recent fiscal years to directors, supervisors, presidents and vice presidents of the Company, to the net income:

Total compensation as a percentage of net income after tax of 1.94% in 2020 decreased by 3.59% from 5.53% for 2019. In 2020, the selling price of some of the Company's products declined, but the gross margin improved significantly due to the lower input price of the bulk raw material VCM and the increase in sales volume of plastic powder by approximately 20%. The non-operating recognition of valuation gains on financial assets and equity method investment gains resulted in a significant increase in net income after tax in 2020 compared to the one in 2019.

• (2) The policies, standards, and portfolios for the payment of remuneration, the procedures for determining remuneration, and the correlation with business performance:

Compensation of directors includes compensation, directors' remuneration and business execution expenses. The policy of directors' remuneration is set out in the Company's Articles of Incorporation, and the Board of Directors shall resolve the distribution of directors' remuneration and report to the shareholders' meeting. The compensation of directors shall be submitted to the Compensation Committee and approved by the Board of Directors with reference to the Company's operating conditions. The directors may pay carriage fees as determined by the board of directors' meeting, regardless of the company's profit or loss. The directors who are also employees may be paid in the same manner as employees, and the board of directors is authorized to pay the fees as agreed in accordance with the usual standards of the industry.

The remuneration of the President and Vice President includes salary, bonus and employee compensation. Salary and bonus are determined based on the degree of participation in the Company's operations and the value of contributions.

The remuneration standards and policies of the directors, general manager and vice president of the Company have taken into consideration the impact of the Company's operational performance and control of future risks.

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4. Implementation of Corporate Governance:

(1) Board of Directors:

(1) Board of Directors

The most recent annual meeting of the Board of Directors was held five times (A) and the attendance of directors was as follows:

Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%) (B/A)	Remarks
Chairman	TAN,KIN-MEN	5	0	100%
Director	Hsuan-Yang Investment Co., Ltd.(Representative : WANG,HAI-LUN)	5	0	100%
Director	Want-Want Co., Ltd.(Representative : HSIEH,YU-CHIN)	4	1	80%
Director	Li-Hsiang Enterprise Co., Ltd.(Representative : CHU, TSUNG-PIN)	5	0	100%
Director	Peter Chen	5	0	100%
Director	WANG, JU-KENG	5	0	100%
Independent director	CHANG, YIE-YUN	5	0	100%
Independent director	HOU, MING-LI	5	0	100%
Independent director	LIN, CHAO-MIN	5	0	100%
Other mentionable items: 1. The Board of Directors shall state the date and time of the meeting, the content of the motion, the opinions of all independent directors and the Company's handling of the opinions of the independent directors if any of the following circumstances apply to the operation of the Board of Directors: (1) Matters set forth in Article 14-3 of the Securities and Exchange Act: The Company's Audit Committee is established by three independent directors, and the provisions of Article 14-3 are not applicable. The matters listed in Article 14-5 of the Securities and Exchange Act are referred to the Audit Committee for discussion, please refer to "(2) Operation of the Audit Committee". (2) Other than the foregoing, there were no other resolutions of the Board of Directors that were opposed or qualified by the independent directors and were recorded or stated in writing: None for the year ended December 31, 2020. 2. If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: There was no motion related to interest requiring recusal in 2020. 3. Listed companies shall disclose information on the periodicity and duration, scope, manner and content of the evaluation of the self- (or peer) evaluation by the board of directors: Board of Directors' Evaluation of Implementation Evalu ation Period Evaluatio n Period Evaluation Scope Evaluation Method Evaluation Content Evalua tion Result s Perfor med once a year 109/1/1 ~ 109/12/31 Board of Directors Self- assessment by Directors 1. The degree of participation in the company's operation 2. Quality of Board of Directors' decisions 4.3 4.1

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				3. Composition and Structure of the Board of Directors 4. Election of Directors and Continuing Education 5. Internal control	4.3 4.1 4.3
		Individual Board Members	Self- assessment by Directors	1. Mastery of company goals and tasks 2. Directors' Responsibilities Awareness 3. The degree of participation in the company's operation 4. Internal relationship management and communication 5. Professional and Continuing Education of Directors 6. Internal control	4.7 4.7 4.5 4.1 4.5 4.5
		Functional Committee - Audit Committee	Audit Committee Self- Assessment	1.The degree of participation in the company's operation 2. Functional committee responsibility recognition 3. Functional committee decision quality 4. Functional Committee Composition and Selection of Members 5. Internal control	5.0 4.6 5.0 4.9 4.8
		Functional Committee - Salary and Compensation Committee	Salary and Compensation Member Self- Assessment	1.The degree of participation in the company's operation 2. Functional committee responsibility recognition 3. Functional committee decision quality 4. Functional Committee Composition and Selection of Members 5. Internal control	5.0 4.8 4.9 5.0 4.8

Evaluation grades: 1 Very poor, 2 Poor, 3 Average, 4 Good, 5 Very good.

1. An evaluation of targets for strengthening the functions of the board of directors during the current and immediately preceding fiscal years (e.g. the establishment of an audit committee, the promotion of information transparency, etc.), and measures taken toward achievement thereof:

1) The board of the Company operates in accordance with the law, the provisions of the articles of incorporation and the resolutions of the shareholders' meetings. All directors, in addition to possessing the necessary expertise, skills and qualities to carry out their duties, shall act on the principles of honesty, integrity and due care for the best interests of all shareholders.

2) To build up a good board governance system, improve the supervisory function and strengthen the management function of the Company, the regular shareholders' meeting in June 2015 had re-elected the directors to form an audit committee with three independent directors, and in June 2020 the regular shareholders' meeting amended the articles of incorporation to change the number of directors from nine to 10, with no fewer than three independent directors.

3) In line with the amendment of the regulations, the board in Dec 2020 amended the Company’s "Procedure for Board of Directors Meetings," "Rules Governing the Scope of Powers of Independent Directors," "Audit Committee Charter" and "Remuneration Committee Charter," and laid down the "Self-Evaluation or Peer Evaluation of the Board of Directors," and in March 2021 amended the Company’s "Rules of Procedure of the Shareholders' Meeting" and "Procedures for Election of Directors" and implemented them in accordance with the revised regulationsin in an effort to enhance the transparency of information, with good implementation.

• 4) The board has strengthened its functions by self-evaluating its operations from FY2020. 5) The Company announces important resolutions of each board meeting on the Company's website and takes out liability insurance for directors and managers to enhance the transparency of the Company's operational information and to protect the interests of shareholders.

• Note 1: If the director or supervisor is a legal entity, the name of the legal shareholder and the name of the representative should be disclosed.

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Note 2:

• (1) The actual attendance rate (%) is calculated based on the number of meetings of the Board of Directors and the actual number of meetings attended during the term of office of the director.

• (2) If a director or supervisor is re-elected before the end of the year, both the new and old director or supervisor should be listed and the date of re-election should be indicated in the Remarks column. The actual attendance rate (%) is calculated based on the number of meetings of the Board of Directors and the actual number of attendance during the term of office.

(2) Audit Committee:

A total of 3 (A) Audit Committee meetings were held in 2020. The attendance of the independent directors was as follows:

Title	Name	Attendance in Person (B)	By Proxy	Attendance Rate (%) (B/A) (Note)	Remarks
Independent Director	HOU, MING-LI	3	0	100%
Independent Director	CHANG, YIE-YUN	3	0	100%
Independent Director	LIN, CHAO- MIN	3	0	100%
Other mentionable items: 1. If the Audit Committee operates in any of the following circumstances, it shall state the date and session numbers of the Board meeting, the content of the motion, the outcome of the Audit Committee's resolution and the Company's handling of the Audit Committee's opinion. 1) The matters listed in Article 14-5 of the Securities and Exchange Act. 1. 4th Audit Committee in the 2nd term on 2020/3/27: (1) A reduction in capital of US$10 million in Ocean Group Ltd. and OPC Holdings Ltd. which are 100% owned by the Company in connection with the sale of shares in Hunan Ocean Wide Plastics Ltd for review and approval. (2) Amendments to certain provisions of the Company's procedures for loaning of funds and making of endorsements/guarantees for review and approval. (3) The Company's "Statement of Internal Control” in compliance with the “Regulations Governing Establishment of Internal Control Systems by Public Companies” issued by the Financial Supervisory Commission for review and approval. (4) 2019 financial report and consolidated financial report for determination. (5) The Company's 2019 loss make-up proposal and 2019 business report for determination. The above five motions were approved by all Audit Committee members present at the meeting. The above five motions were approved by all board members present at the meeting. 2. 8th Audit Committee in the 2nd term on 2020/8/12: (1) Q2 2020 consolidated financial quarterly report for review and approval (2)The loaningof funds bythe Companyas of June 2020presented for discussion.

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The above two motions were approved by all Audit Committee members present at the meeting. The above two motions were approved by all board members present at the meeting.

1. 9th Audit Committee in the 2nd term on 2020/12/22:

2. (1) The loaning of funds by the Company as of Nov 2020 presented for recognition.

3. (2) Amendments to the Company’s "Procedure for Board of Directors Meetings," "Rules Governing the Scope of Powers of Independent Directors," "Audit Committee

Charter" and "Remuneration Committee Charter," and the formulation the "Self-Evaluation or Peer Evaluation of the Board of Directors” for review and approval.

The above two motions were approved by all Audit Committee members present at the meeting.

The above two motions were approved by all board members present at the meeting.

• 2) Other than the foregoing, any item not passed by the Audit Committee but approved by at least two-thirds of all the directors: There were no matters under 2) above in FY2020.

• If there are independent directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: There were no interested parties' motions requiring recusal in 2020.

• Communications between the independent directors, the Company's chief internal auditor and CPAs (e.g. the items, methods and results of audits of corporate finance or operations, etc.): The independent directors are allowed to express their opinions at the audit committee

and board of directors' meetings on the financial and business reports and the audit director's report on the results of internal audits.

The independent directors, two of whom are certified public accountants and one of whom is a law professor, have submitted their audited financial statements to the Audit Committee for discussion. When the independent directors review the financial statements, they should first seek clarification from the chief accounting officer and further communicate with the accountants.

• Note: * If an independent director vacates his or her position before the end of the year, the date of departure should be indicated in the Remarks column. The actual attendance rate (%) is calculated based on the number of Audit Committee meetings and the actual attendance during their employment.

• If there is a re-election of independent directors before the year-end, both new and existing independent directors should be listed, and the date of re-election should be indicated in the Remarks column. The actual attendance rate (%) is calculated based on the number of meetings of the Audit Committee and the actual attendance of the Audit Committee during the term of employment.

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(3) Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”:

Companies”:
Evaluation Item	ImplementationStatus (Note1)			Deviations from “the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
1. Does the company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?		V	The Company has not yet had such principles but has put in place practices relating to corporate governance, see page 28.	In the future, it will be determined according to the actual needs.
2. Shareholding structure & shareholders’ rights (1) Does the company establish an internal operating procedure to deal with shareholders’ suggestions, doubts, disputes and litigations, and implement based on the procedure? (2) Does the company possess the list of its major shareholders as well as the ultimate owners of those shares? (3) Does the company establish and execute the risk management and firewall system within its conglomerate structure? (4) Does the company establish internal rules against insiders trading with undisclosed information?	V V V V		1) The Company has a spokesperson and a deputy spokesperson to deal with issues such as shareholder proposals or disputes. 2) The Company's stock agency provides a register of shareholders, keeps up to date with a list of substantial shareholders and ultimate controllers of substantial shareholders and interacts well with the substantial shareholders. 3) The Subsidiary Management Regulations have been established to implement a mechanism for the supervision of subsidiaries. 4) The Company has in place the Codes of Ethical Conduct and the Procedures for Ethical Management and Guidelines for Conduct, which prohibit insiders from trading in securities using information notpubliclyavailable in the market.	None None None None

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Evaluation Item	ImplementationStatus (Note1)	ImplementationStatus (Note1)	ImplementationStatus (Note1)	Deviations from “the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
3. Composition and Responsibilities of the Board of Directors (1) Does the Board develop and implement a diversified policy for the composition of its members? (2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee? (3) Does the company establish a standard to measure the performance of the Board, and implement it annually? The results of the performance evaluation will be reported to the board of directors and used as reference for individual director's salary compensation and nomination for reappointment?	V V	V	1) In the nomination and selection of board members, the academic qualifications and experience of each member have been assessed and the "Procedures for Election of Directors and Supervisors" and the "Corporate Governance Best Practice Principles" have been complied with to ensure that pluralism, independence and stakeholder views are taken into consideration. The current directors have professional backgrounds, skills and industry experience, and the election of two CPAs and one JD (female) as independent directors has contributed to the Company's operational performance. 2) The Company has set up a remuneration committee and an audit committee as required by law and has not established committees of any other functions. 3) The Company has a Remuneration Committee, which is convened by an independent director, to assist the board of directors in formulating policies, systems, standards and structures pertaining to the evaluation of performance and remuneration of directors, and the related performance appraisal and distribution of remuneration to directors and managers.	None Other functional committees will be established in the future depending on actual needs. None

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Evaluation Item	ImplementationStatus (Note1)	ImplementationStatus (Note1)	ImplementationStatus (Note1)	Deviations from “the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
(4) Does the company regularly evaluate the independence of CPAs?	V		4) The Company evaluates the independence and competence of the CPA at least once a year, focusing on the number of years of audit services, fees, nature of non-audit services, legal proceedings, and whether there are any functional, relational or business interests with the management of the Company, which founds they are not interested parties. The results of the assessment for the last two years were approved by the board meeting on March 27, 2020 and March 26,2021 respectively.	None
4. Does the listed company have a suitable and appropriate number of corporate governance personnel and designate a corporate governance officer to be responsible for corporate governance-related matters (including but not limited to providing directors and supervisors with information necessary for the execution of their business, assisting directors and supervisors in complying with laws and regulations, conducting board and shareholders' meeting- related matters in accordance with the law, and preparing minutes of board and shareholders' meetings,etc.)?	V		The corporate governance function has been established under the auspices of the shareholder services office, in conjunction with the management department. The head of corporate governance will be in place by June 2021 in compliance with the law.	None

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Evaluation Item	ImplementationStatus (Note1)	ImplementationStatus (Note1)	ImplementationStatus (Note1)	Deviations from “the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
5. Does the company establish a communication channel and build a designated section on its website for stakeholders, as well as handle all the issues they care for in terms of corporate social responsibilities?	V		A stakeholder section has been set up on the website. Stakeholders may contact the relevant departments and units of the Company at any time when necessary, and the Company will assign dedicated staff to handle the matter as appropriate.	None
6. Does the company appoint a professional shareholder service agency to deal with shareholder affairs?	V		The Company has appointed KGI Securities Co to act for it in relation to shareholder affairs.	None
7. Information Disclosure (1) Does the company have a corporate website to disclose both financial standings and the status of corporate governance? (2) Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creating a spokesman system, webcasting investor conferences)? (3) Does the Company announce and report its annual financial statements within two months after the end of the fiscal year, and announce and report its first, second and third quarterly financial statements and its operations for each month well in advance of the prescribed deadline?	V V	V	1) A website has been set up and company information is regularly disclosed. 2) The Company has a spokesperson and a deputy spokesperson in place and discloses relevant information on the Market Observation Post System on a regular and occasional basis. 3) The Company's financial reports for the first, second and third quarters, as well as the announcement and reporting of operations for each month, were made within the deadlines set by the competent authorities, except for the announcement and reporting of annual financial reports within two months after the year-end.	None None Communicate with certified public accountants with the goal of early announcement and reporting of financial reports

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Evaluation Item	ImplementationStatus (Note1)	ImplementationStatus (Note1)	ImplementationStatus (Note1)	Deviations from “the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
8. Is there any other important information to facilitate a better understanding of the company’s corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ and supervisors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?	V		1) Employee rights, employee care: The Company is committed to providing a healthy and safe working environment in accordance with the law, and has followed the internal management rules on appointment, promotion, rewards and punishments, benefits, salaries, training and retirement to ensure fair opportunities and conduct guidelines. In addition to the establishment of the Employee Welfare Committee, the Sexual Harassment Complaint Handling Committee, the Award and Penalty Committee, and the Labor Pension Committee, the Company also holds labor-management meetings to protect the rights of employees, prevent accidents and injuries, and seek the welfare of employees. 2) Investor relations: The Company has set up a spokesperson system to provide a point of contact with shareholders and corporate investment institutions. 3) Supplier relations: The Company maintains equal and good relations with its suppliers. 4) Stakeholder rights: The Company has formulated the "Regulations on the Management of Subsidiaries" and "Regulations on Assignment in China," and regularly reviews transactions between related parties, in addition to making announcements and reports as required by law. 5) Directors' and independent directors' continuing education: Please refer to page 20 of the annual report (Schedule 1). 6) Implementation of risk management policies and risk measurement standards: Major operating policies,investmentproposals,	None

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Evaluation Item	ImplementationStatus (Note1)	ImplementationStatus (Note1)	ImplementationStatus (Note1)	Deviations from “the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
			endorsement and guarantees, and capital loans are evaluated by the responsible departments and implemented in accordance with the resolutions of the board of directors, while the audit office prepares annual audit plans and conducts audits based on the results of the risk assessment. 7) Implementation of customer policy: Through the ISO management system, we ensure product quality and reduce energy consumption. In case of customer complaint about quality, we follow the customer complaint handling process to address the complaints for review and improvement. 8) The articles of incorporation provide for the taking out of liability insurance for directors and essential officers and the Company has purchased directors' and managers' liabilityinsurance.
9. Please describe the improvements that have been made to the results of the latest annual corporate governance assessment issued by the Corporate Governance Center of the Taiwan Stock Exchange Corporation, and indicate the priorities and measures for improvement where improvements have not yet been made. (Not required for companies not included in the assessment) (1) Directors' hours of continuing education have been completed under the “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.” (2) The Company's annual report and website have simultaneously disclosed the various employee benefit initiatives, the retirement system and their implementation. (3) The annual report, meeting agenda handbook, and annual financial report will be disclosed in English. (4) Information on energy saving, carbon mitigation, greenhouse gas abatement, water reduction and other waste management policies from all divisions are being quantified and managed.

• (1) Directors' hours of continuing education have been completed under the “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.”

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(Schedule I)

Education/training for the Company's directors and independent directors in 2020: The term of office of the current directors started on June 30, 2018 and will end on June 29, 2021.

Title	Name	Progress Date	Organizer	Course Name	Advanced hours	Whether or not the repair meets the requirements (Note)
Director	TAN, KIN-MEN	109/11/30	Chinese Association of Accounting	The development of corporate governance in China has evolved to Corporate Governance 3.0.	3	Yes
		109/12/22	Chinese Association of Accounting	Analysis of legal practices related to corporate social responsibility.	3	Yes
Director	Peter Chen	109/11/30	Chinese Association of Accounting	The development of corporate governance in China has evolved to Corporate Governance 3.0.	3	Yes
		109/12/22	Chinese Association of Accounting	Analysis of legal practices related to corporate social responsibility.	3	Yes
Director	WANG, JU-KENG	109/11/30	Chinese Association of Accounting	The development of corporate governance in China has evolved to Corporate Governance 3.0.	3	Yes
		109/12/22	Chinese Association of Accounting	Analysis of legal practices related to corporate social responsibility.	3	Yes
Director	CHU, TSUNG- PIN	109/11/30	Chinese Association of Accounting	The development of corporate governance in China has evolved to Corporate Governance 3.0.	3	Yes
		109/12/22	Chinese Association of Accounting	Analysis of legal practices related to corporate social responsibility.	3	Yes

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Director	HSIEH, YU-CHIN	109/11/30	Chinese Association of Accounting	The development of corporate governance in China has evolved to Corporate Governance 3.0.	3	Yes
		109/12/22	Chinese Association of Accounting	Analysis of legal practices related to corporate social responsibility.	3	Yes
Director	WANG, HAI-LUN	109/11/30	Chinese Association of Accounting	The development of corporate governance in China has evolved to Corporate Governance 3.0.	3	Yes
		109/12/22	Chinese Association of Accounting	Analysis of legal practices related to corporate social responsibility.	3	Yes
Independent Director	HOU, MING-LI	109/08/14	CPA ASSOCIATIONS R.O.C. (TAIWAN)	2020 First half of the latest tax law and practice analysis.	7	Yes
Independent Director	CHANG, YIE-YUN	109/08/27	Securities & Futures Institute	Advanced Seminar for Corporate Governance Executives - 5G Key Technology and Application Opportunities.	3	Yes
		109/09/18	CPA ASSOCIATIONS R.O.C. (TAIWAN)	The role of institutional investors in improving corporate governance.	3	Yes
Independent Director	LIN, CHAO- MIN	109/09/23	CPA ASSOCIATIONS R.O.C. (TAIWAN)	Review of financial assets and investments	3	Yes
		109/10/21	CPA ASSOCIATIONS R.O.C. (TAIWAN)	Financial Statement Fraud Practices and Risk Management	3	Yes
		109/12/02	CPA ASSOCIATIONS R.O.C. (TAIWAN)	Update of the Business Tax Act and Notes for Filing Check	3	Yes

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		109/12/07	CPA ASSOCIATIONS R.O.C. (TAIWAN)	Post-APG era trends and outlook	3	Yes
		109/12/22	CPA ASSOCIATIONS R.O.C. (TAIWAN)	Case Study on Special Practices of Company Registration	4	Yes

• (4). Composition, Responsibilities and Operations of the Remuneration Committee:

• (1) Professional Qualifications and Independence Analysis of Remuneration Committee Members:

Title (Note 1)	Criteria Name	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Meets One of the Following Professional Qualification Requirements, Together with at Least Five Years’ Work Experience	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Number of Other Public Companies in Which the Individual is Concurrently Serving as an Remuneration Committee Member	Remarks
		An instructor or higher position in a department of commerce, law, finance, accounting, or other academic department related to the business needs of the Company in a public or private junior college, college or university	A judge, public prosecutor, attorney, Certified Public Accountant, or other professional or technical specialist who has passed a national examination and been awarded a certificate in a profession necessary for the business of the Company	Has work experienc e in the areas of commerc e, law, finance, or accountin g, or otherwise necessary for the business of the Company	1	2	3	4	5	6	7	8	9	10
Independent Director	HOU, MING-LI	-	�	�	�	�	�	�	�	�	�	�	�	�	0	Yes
Independent Director	LIN, CHAO- MIN	-	�	�	�	�	�	�	�	�	�	�	�	�	0	Yes
Independent Director	CHANG, YIE-YUN	�	-	�	�	�	�	�	�	�	�	�	�	�	1	Yes

Note 1: Please enter your status as a director, independent director or other.

• Note 2: Please tick the corresponding boxes that apply to the members during the two years prior to being elected or during the term of office

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

• (2) Directors or supervisors who are not directors or supervisors of the Company or its affiliates (except in the case where the Company and its parent company, subsidiaries or subsidiaries of the same parent company serve concurrently as independent directors under the Act or local laws).

• (3) Not a natural-person shareholder who holds shares, together with those held by the

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person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.

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

• (5) A director, supervisor or employee of a corporate shareholder who does not directly hold more than 5% of the total number of issued shares of the Company, or who holds the top five shares or who designates a representative as a director or supervisor of the Company in accordance with Article 27, Paragraph 1 or 2 of the Company Act (except in the case where the independent directors of the Company and its parent company, subsidiary or subsidiary of the same parent company established in accordance with this Act or the laws of the local country are concurrently appointed).

• (6) A director, supervisor, or employee of another company who is not controlled by the same person as the Company in terms of directorships or more than half of the voting shares (except in the case of independent directors of the Company or its parent company, subsidiaries, or subsidiaries of the same parent company established under this Act or the laws of the local country, who serve concurrently with each other).

• (7) A director (director), supervisor (supervisor), or employee of another company or organization who is not the same person or spouse of the chairman, president, or equivalent of the company (except in the case where the company and its parent company, subsidiary, or subsidiary of the same parent company serve concurrently as independent directors in accordance with this Act or the laws of the local country).

• (8) Directors (directors), supervisors (supervisors), managers or shareholders holding more than 5% of the shares of a specific company or organization that does not have financial or business dealings with the Company (provided that if the specific company or organization holds more than 20% but not more than 50% of the total issued shares of the Company and is an independent director of the Company and its parent company, subsidiary or subsidiary of the same parent company established in accordance with this Act or the laws of the local country that are concurrently appointed by each other (Except for the case where the company and its parent company, subsidiary or subsidiary of the same parent company hold more than 20% of the total number of shares issued by the company, and the company's independent directors are concurrently appointed under the Act or local laws and regulations.

• (9) Professionals, sole proprietors, partners, directors (directors), supervisors (supervisors), managers and their spouses who do not provide auditing services for the Company or its affiliates, or who have received remuneration of less than NT$500,000 in the last two years, including business, legal, financial, and accounting related services. However, members of the Salary and Compensation Committee, the Public Takeover Review Committee or the Special Committee on Mergers and Acquisitions who perform their duties and responsibilities in accordance with the Securities and Exchange Act or the relevant provisions of the Business Mergers and Acquisitions Act are excluded.

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

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(2) Attendance of Members at Remuneration Committee Meetings:

1. There are 3 members in the Remuneration Committee.

2. A total of 2 (A) Remuneration Committee meetings were held from June 30, 2018 to June 29, 2021.The attendance record of the Remuneration Committee members was as follows:

Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate (%) (B/A) (Note)	Remarks
Convener	LIN, CHAO- MIN	2	0	100%
Committee Member	HOU, MING-LI	2	0	100%
Committee Member	CHANG, YIE-YUN	2	0	100%
Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (eg., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): 1. The 5th meeting of the 4th Remuneration Committee on June 24, 2020: (1) 2020 annual salary adjustment was submitted for approval. Salary and Compensation Committee Resolution: Passed by all members present Board Meeting: Included in the report. 2. The 6th meeting of the 4th Remuneration Committee on on Dec. 22, 2020: (1) 2020 year-end bonus payments were submitted for approval. Salary and Compensation Committee Resolution: Approved by all members present. Resolution of the Board of Directors: Approved by all directors present. 2. Resolutions of the remuneration committee objected to by members or subject to a qualified opinion and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified: No.

• Note: (1) If a member of the Compensation Committee leaves the Company before the end of the year, he/she should indicate the date of departure in the Remarks column, and the actual attendance rate (%) is calculated based on the number of meetings of the Compensation Committee and the actual attendance during his/her employment. The actual attendance rate (%) is calculated based on the number of meetings of the Compensation Committee and their actual attendance during their employment.

• (2) If there is a re-election of the Compensation Committee before the end of the year, both the new and old members of the Compensation Committee should be listed, and the date of re-election should be indicated in the Remarks column. The date of re-election should be indicated in the Remarks column. The actual attendance rate (%) is calculated based on the number of meetings of the Compensation Committee and the actual attendance during the employee's employment.

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(5). Corporate Social Responsibility:

(5). Corporate Social Responsibility:
Evaluation Item	Implementation Status(Note 1)			Deviations from “the Corporate Social Responsibility Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation (Note 2)
1. Does the Company conduct risk assessment on environmental, social and corporate governance issues related to its operations in accordance with the principle of materiality and establish relevant risk managementpolicies or strategies?(Note 3)		V	The Company has not conducted a risk assessment of environmental, social and corporate governance issues relating to the Company's operations in alignment with the materiality principle.	To be determined.
2. Does the company establish exclusively (or concurrently) dedicated first-line managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reportingto the board?	V		The management department, the administration division and the environmental safety office are dedicated/part-time units to promote corporate social responsibility (CSR) in the Company.	None
3. Sustainable Environment Development (1) Whether the company has established appropriate environmental management system according to its industrial characteristics? (2) Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment?	V V		1) The Company is a plastic product processing industry, a low pollution industry, and its factories have established and obtained ISO14001 environmental management system and ISO45001 occupational safety and health management system certification, with continued care for the earth's ecology, prevention of environmental pollution, and protection of labor safety and health. 2) The Company is actively implementing the concept of remainder reuse, recycling and energy saving, industrial waste reduction, refuse sorting, paper reduction and paper reuse, and encouraging the use of eco-friendly chopsticks, cups and internal network operations to alleviate the impact on the environment.	None None

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Evaluation Item	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from “the Corporate Social Responsibility Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation (Note 2)
(3) Does the company assess the impact of climate change on its current and future operations? What are the potential risks and opportunities, and what are the measures to address climate related issues? (4) Does the company monitor the impact of climate change on its operations and conduct greenhouse gas inspections, as well as establish company strategies for energy conservation and carbon reduction?	V V		3) In view of the environmental pollution caused by thermal power generation, the Company in 2018 built solar power generation systems with a capacity of 2,110 kilowatts at its third Taoyuan plant and Sinwu plant, and expects to build a solar power generation system with a capacity of 380 kilowatts at its Taoyuan plant in 2021. 4) The Company has been promoting the habit of turning off the lights and air-conditioning as needed for employees from time to time, planting trees and greening the premises, and upholding its commitment to energy saving and carbon reduction. In addition to advancing the carbon reduction strategy, it is promoting remainder recovery, recycling and energy saving, industrial waste reduction, refuse sorting, lighting improvement and replacement of old equipment to boost the efficiency of air compressors to save energyconsumption.	None None
4. Preserving Public Welfare (1) Does the company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights? (2) Has the Company established and implemented reasonable employee benefit measures	V V		1) The Company protects the legal rights of its employees in accordance with labor laws and regulations, holds regular labor meetings and sets aside pensions as required by law, and prohibits child labor, forced labor, overtime work and other practices that are detrimental to the physical and mental health of workers. 2) The Company follows the minimum standards set out in the labor laws and regulations and,dependingon the operatingconditions,	None None

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Evaluation Item	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from “the Corporate Social Responsibility Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation (Note 2)
(including compensation, leave and other benefits) and appropriately reflected operational performance or results in employee compensation? (3) Does the company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis? (4) Does the company provide its employees with career development and training sessions? (5) Does the company advertise and label its goods and services according to relevant regulations and international standards? Has it established relevant policies and complaint procedures to protect consumer rights? (6) Does the company evaluate the records of suppliers’ impact on the environment and society before taking on business partnerships?	V V V V		establishes measures for performance and employee bonuses, such as business bonuses, management target bonuses, performance bonuses, etc. It also has leave regulations in place to achieve a balance between work and family, and a balance between mind and body. 3) The Company conducts orientation and in-service training courses on safety and health for employees and holds regular staff health checks. 4) The Company's personnel department has created a substitute staff mechanism through ranking and duties, and has established a system for the classification, promotion and transfer of staff, combined with staff education and training to provide effective career development opportunities for employees. 5) The Company complies with environmental standards and uses materials that are up to standard to maintain environmental health. 6) The Company has drawn up a "Contractor Evaluation Guideline," whereby the compliance of suppliers with occupational safety and health regulations is considered an important evaluation criterion.	None None None None

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Evaluation Item	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from “the Corporate Social Responsibility Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation (Note 2)
5. Has the Company made reference to international standards or guidelines for the preparation of reports, such as CSR reports, to disclose non- financial information about the Company? Has the Company obtained any assurance or guarantee from a thirdparty?	V		The Company has not prepared a CSR report by referring to internationally accepted standards or guidelines for the preparation of such reports.	In the future, it will be determined according to the actual needs.
6. If the Company has established the corporate social responsibility principles based on “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies”, please describe any discrepancy between the Principles and their implementation: The Company has not formulated the "Code of Practice on Corporate Social Responsibilityfor Listed Companies".
7. Other important information to facilitate better understanding of the company’s corporate social responsibility practices: 1. Environmental management: The Company complies with governmental environmental protection laws and ISO140001 environmental management system regulations to maintain environmental health, and its Taoyuan, Sinwu and Chungli plants have acquired certification. 2. Occupational health and safety management: The Company is committed to occupational safety and has a dedicated staff responsible for operations and inspections, with the Sinwu plant having received ISO 45001 certification. 3. Greenhouse gas emissions: The main sources of emissions are purchased electricity, purchased steam and indirect energy emissions. (1) GHG emissions statistics for 2019 were 32,720 metric tons of CO2e/year. (2) GHG emissions statistics for 2020 were 33,696 metric tons of CO2e/year. 4. Solar power system: with a capacity of 2,110 kilowatts. (1) Electricity generation of 2,567,999 kWh in 2019 resulted in a total carbon reduction of 2,593 tonnes, equivalent to an area of 174 hectares of afforestation. (2) Electricity generation of 2,691,510 kWh in 2020 resulted in a total carbon reduction of 2,718 tonnes, equivalent to an area of 182 hectares of afforestation. 5. Water consumption and waste declarations: (1) Water consumption: 33,172 metric tonnes in 2019 and 38,212 metric tonnes in 2020. (2)Waste: 487 tonnes in 2019 and 542 tonnes in 2020.

1. If the Company has established the corporate social responsibility principles based on “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies”, please describe any discrepancy between the Principles and their implementation: The Company has not formulated the "Code of Practice on Corporate Social Responsibility for Listed Companies".

2. Environmental management: The Company complies with governmental environmental protection laws and ISO140001 environmental management system regulations to maintain environmental health, and its Taoyuan, Sinwu and Chungli plants have acquired certification.

3. Occupational health and safety management: The Company is committed to occupational safety and has a dedicated staff responsible for operations and inspections, with the Sinwu plant having received ISO 45001 certification.

4. (1) Electricity generation of 2,567,999 kWh in 2019 resulted in a total carbon reduction of 2,593 tonnes, equivalent to an area of 174 hectares of afforestation.

5. (2) Electricity generation of 2,691,510 kWh in 2020 resulted in a total carbon reduction of 2,718 tonnes, equivalent to an area of 182 hectares of afforestation.

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Evaluation Item	Implementation Status(Note 1)	Implementation Status(Note 1)	Implementation Status(Note 1)	Deviations from “the Corporate Social Responsibility Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Explanation (Note 2)
6. Community involvement, social contribution, social services and social welfare: The Company is dedicated to the promotion of social welfare, which is why it founded the Yee Fong Charitable Foundation in 1972 in conjunction with affiliates such as Yee Fong Chemical & Industrial Co and Chin Yi Ho Hang Ltd. The purpose of the foundation is to organize or donate to social welfare and charitable causes, including medical aid, emergency relief, disaster relief and educational subsidies, and actively participate in social assistance for the underprivileged, sponsor community association activities and encourage the participation of employees in order to give back to the community. In Nov 2020, it was awarded by the Social Welfare Charitable Foundation of the Taipei City Government for its excellence in field evaluation In 2020, expenditure of N$14.61 million was allocated to 50 organizations to create a multiplier effect through the benevolence of each organization: (1) Medical subsidies: disease prevention education, elderly and dementia care, visual impairment care, hospice care, in-home bathing, dining together among seniors, etc. (2) Emergency assistance: medical treatment for the poor, emergency relief, medical care, etc. (3) Disaster relief: COVID-19 outbreak preparedness (giving bleach to the community, disinfecting hospitals, purchasing air-powered respiratory protective equipment for healthcare workers), disaster prevention in Taiwan, etc. (4) Educational subsidies: after-school tutoring for schoolchildren in rural areas, children's homes, education and nursing institutes, children's safety education, etc. 7. Consumer rights: The establishment, implementation, audit and improvement of our quality, environmental and occupational safety and health systems are not only required to comply with relevant laws and regulations, but are also expected to be in line with internationally recognized standards, and therefore the Company has been certified to ISO 9001 and ISO 14001 and honors its obligations under orders and contracts to ensure the rights of consumers. 8. Human rights: Our employees are equal in employment opportunities regardless of gender, religion or party affiliation, and we ensure that they are free from discrimination and harassment.

• In Nov 2020, it was awarded by the Social Welfare Charitable Foundation of the Taipei City Government for its excellence in field evaluation In 2020, expenditure of N$14.61 million was allocated to 50 organizations to create a multiplier effect through the benevolence of each organization:

• (1) Medical subsidies: disease prevention education, elderly and dementia care, visual impairment care, hospice care, in-home bathing, dining together among seniors, etc.

• (3) Disaster relief: COVID-19 outbreak preparedness (giving bleach to the community, disinfecting hospitals, purchasing air-powered respiratory protective equipment for healthcare workers), disaster prevention in Taiwan, etc.

• (4) Educational subsidies: after-school tutoring for schoolchildren in rural areas, children's homes, education and nursing institutes, children's safety education, etc.

• Consumer rights: The establishment, implementation, audit and improvement of our quality, environmental and occupational safety and health systems are not only required to comply with relevant laws and regulations, but are also expected to be in line with internationally recognized standards, and therefore the Company has been certified to ISO 9001 and ISO 14001 and honors its obligations under orders and contracts to ensure the rights of consumers.

• Human rights: Our employees are equal in employment opportunities regardless of gender, religion or party affiliation, and we ensure that they are free from discrimination and harassment.

• Note 1: If "Yes" is selected for operation, please explain the important policies, strategies and measures adopted and their implementation; if "No" is selected for operation, please explain the reasons and indicate the relevant plan of policies, strategies and measures to be adopted in the future.

• Note 2: If the company has prepared a CSR report, the operation of the report may be replaced by a reference to the CSR report and an index page. Note 3: Materiality refers to the environmental, social and corporate governance issues that have a significant impact on the Company's investors and other stakeholders.

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(6) Ethical Corporate Management:

(6) Ethical Corporate Management:
Evaluation Item	Implementation Status(Note)			Deviations from “the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
1. Establishment of ethical corporate management policies and programs (1) Does the company declare its ethical corporate management policies and procedures in its guidelines and external documents, as well as the commitment from its board to implement the policies? (2) Does the company establish appropriate precautions against high-potential unethical conducts or listed activities stated in Article 7, Paragraph 2 of the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies? (3) Does the company establish policies to prevent unethical conduct with clear statements	V V	V	1) As a business that abides by laws and ethics, the Company not only follows the Company Act, the Securities and Exchange Act and other relevant laws and regulations, but also upholds the spirit of "ethical corporate management" as a basis for running its business. In order to put the "ethical corporate management" policy into practice, we have established the "Ethical Corporate Management Best Practice Principles" and "Procedures for Ethical Management and Guidelines for Conduct" for our staff to follow. 2) The Company has established "Employee Work Rules" to regulate staff at all levels, and has a "Dedication and Confidentiality Agreement" with staff, which stipulates that all staff should not accept any inappropriate gifts, so as to prevent staff from sacrificing the Company's interests for their personal interests. All employees are required to keep the trade secrets of the Company or others confidential. The relevant precautions are set out in the "Procedures for Ethical Management and Guidelines for Conduct." 3) The Company has established a system of internal control and internal auditing,and the unitperformingthe audits shall focus	None None None

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Evaluation Item	Implementation Status(Note)	Implementation Status(Note)	Implementation Status(Note)	Deviations from “the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
regarding relevant procedures, guidelines of conduct, punishment for violation, rules of appeal, and the commitment to implement the policies?			on the key control points. In case of dishonest behavior of employees, depending on the seriousness of the case, it will be dealt with pursuant to the relevant provisions of the Company's rules and regulations.
2. Fulfill operations integrity policy (1) Does the company evaluate business partners’ ethical records and include ethics-related clauses in business contracts? (2) Does the company establish an exclusively (or concurrently) dedicated unit supervised by the Board to be in charge of corporate integrity? (3) Does the company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it? (4) Has the company established effective systems for both accounting and internal control to facilitate ethical corporate management, and are they audited by either internal auditors or CPAs on a regular basis? (5) Does the company regularly hold internal and external educational trainings on operational integrity?	V V V	V V	1) The legitimacy of dealings with suppliers and customers is considered before transactions are made and any record of dishonest behaviour is taken into account. 2) The Company's management department is responsible for the formulation of ethical management policies and preventive programs, and oversees the implementation thereof, and reports regularly to the board of directors for the purpose of sound ethical management. 3) The Company provides appropriate channels for employees to make complaints through a suggestion box or to the plant administration, plant affairs and management departments. Directors, supervisors or managers should recuse themselves from any matter in which they have an interest. 4) The audit department regularly audits the internal operations of the Company and reports the results to the board of directors. 5) The Company promotes and teaches the concept of ethical management at internal meetings and in-service training sessions.	None None None None None

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Evaluation Item	Implementation Status(Note)	Implementation Status(Note)	Implementation Status(Note)	Deviations from “the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
3. Operation of the integrity channel (1) Does the company establish both a reward/punishment system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up? 2) Does the company establish standard operating procedures for confidential reporting on investigating accusation cases? (3) Does the company provide proper whistleblowerprotection?	V V V		1) The Company has set up a suggestion box to facilitate reporting, and has established the "Employee Work Rules" and an award and penalty committee. If an employee reports a violation or is in breach of the rules, he/she will be sent to the committee for appropriate rewards or penalties, depending on the seriousness of the case. 2) The Company has "Employee Work Rules" and maintains a strict duty of confidentiality regarding the complainant and content of the complaint. 3) The Company protects the identity of the whistleblower from improper treatment and threats as a result of the whistleblowing.	None None None
4. Strengthening information disclosure (1) Does the company disclose its ethical corporate management policies and the results of its implementation on the company’s website and MOPS?	V		1) In addition to disclosing its ethical management of the business in the annual report, the policy has been uploaded to the Market Observation Post System and the Company's website.	None
5. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation: The Code of Conduct on Integrity of Over-the-Counter Companies is stipulated and enforced and does not differ from the operation of the Code of Conduct on Integrity of Listed Companies.

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Evaluation Item	Implementation Status(Note)	Implementation Status(Note)	Implementation Status(Note)	Deviations from “the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
6. Other important information to facilitate a better understanding of the company’s ethical corporate management policies (e.g., review and amend its policies): The company upholds the spirit of integrity management, complies with the Company Act, the Securities and Exchange Act and other laws and regulations, and promotes the implementation of the policy of integrity management by its vendors, directors, managers and employees, so that the companycan developtowards the concept of sustainable management.

Note: Regardless of whether the evaluation item is achieved or not, the company shall state an appropriate explanation.

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• (7) Corporate Governance Guidelines and Regulations:

• The Company has laid down the following rules and regulations, which can be found on the Company's website and the Market Observation Post System.

• Important rules approved at the shareholders' meeting:

• (1) Articles of Incorporation

• (2) Rules of Procedure for Shareholders Meetings

• (3) Procedures for Election of Directors

• (4) Procedures for the Acquisition and Disposal of Assets

• (5) Procedures for Loaning of Funds and Making of Endorsements/Guarantees

• Important rules approved at the board meeting:

• (1) Rules of Procedure for Board of Directors Meetings

• (2) Rules Governing the Scope of Powers of Independent Directors

• (3) Remuneration Committee Charter

• (4) Audit Committee Charter

• (5) Self-Evaluation or Peer Evaluation of the Board of Directors

• (6) Procedures for Handling Material Inside Information

• (7) Codes of Ethical Conduct

• (8) Ethical Corporate Management Best Practice Principles

• (9) Procedures for Ethical Management and Guidelines for Conduct

• (8) Other Important Information Regarding Corporate Governance: With a view to creating a good mechanism for handling and disclosing material internal information, avoiding improper revelation of information and ensuring consistency and correctness of information released by the Company to the outside world, the Company formulated the "Procedures for Handling Material Inside Information," which was approved by the board of directors on Dec 22, 2009 for implementation.

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(9) Internal Control Systems:

1. Statement of internal control

Ocean Plastics Co., Ltd. Statement of Internal Control

Date: March 26, 2021

Based on the results of the self-inspection of the internal control system of the Company for the year ended December 31, 2020, we hereby declare that:

1. The Company recognizes that it is the responsibility of the Board of Directors and the managers to establish, implement and maintain a system of internal control, and the Company has established such a system. The purpose of this system is to provide reasonable assurance regarding the effectiveness and efficiency of operations (including profitability, performance and safeguarding of assets), the reliability of financial reporting and compliance with relevant laws and regulations.

2. An effective internal control system, no matter how well designed, can only provide reasonable assurance that the above three objectives are achieved; moreover, the effectiveness of the internal control system may change as circumstances and conditions change. However, the Company's internal control system has a self-monitoring mechanism and once deficiencies are identified, the Company will take corrective action.

3. The Company determines the effectiveness of the design and implementation of the internal control system in accordance with the judgment items of the effectiveness of the internal control system stipulated in the "Guidelines Governing the Establishment of Internal Control Systems by Public Companies" (the "Guidelines"). The judgment items of the internal control system adopted in the "Guidelines" are divided into five components based on the management control process: 1. control environment, 2. risk assessment, 3. control operations, 4. information and communication, and 5. supervision. Each component includes a number of items. Please refer to the "Guidelines for Handling" for the aforementioned items.

4. The Company has adopted the judgment items in the above-mentioned internal control system to examine the effectiveness of the design and implementation of the internal control system.

5. Based on the results of the preceding examination, the Company concluded that its internal control system (including the supervision and management of subsidiaries) as of December 31, 2020, including the design and implementation of the internal control system relating to the knowledge of the extent to which operational effectiveness and efficiency objectives are achieved, the reliability of financial reporting and compliance with relevant laws and regulations, is effective and can reasonably ensure the achievement of the above objectives.

6. This statement will become the main content of the Company's annual report and public statement and will be made public. If any of the above-mentioned contents is disclosed in a false or concealed manner, the Company will be subject to legal liability under Articles 20, 32, 171 and 174 of the Securities and Exchange Act.

7. This statement was approved by the board of directors at the board meeting held on March 26, 2021. Of the 9 directors present, 0 held opposing views and all agreed to the contents of this statement.

Ocean Plastics Co., Ltd. Chairperson: TAN, KIN-MEN President: TAN, KIN-MEN

41

1. Accountant's review report on the internal control system of the project entrusted to the accountant: None.

2. (10) For the most recent year and up to the date of printing of the annual report, the Company and its internal personnel have been punished according to the law, or the Company has punished its internal personnel for violating the provisions of the internal control system, and the result of the punishment may have a significant impact on the shareholders' equity or the price of securities, the content of the punishment, the main deficiencies and the improvement situation should be listed: None.

3. (11) Major Resolutions of Shareholders’ Meeting and Board Meetings:

4. The content and implementation of the important resolutions of the 2020 Annual General Meeting of Shareholders:

Acknowledgements:

• (1) To approve the Company's 2019 Annual Report on Operations and Final Accounts.

• (2) To approve the appropriation of the Company's loss for 2019.

• (3) To approve the proposed amendments to certain provisions of the Company's Articles of Incorporation.

• (4) To approve the proposed amendments to certain provisions of the Company's capital lending and endorsement guarantee procedures.

Enforcement: The information is available on the Company's website.

1. Board Meetings:

Date	Major resolutions
2020/03/27	1. The retrospective recognition of loans of funds to subsidiaries as of Feb 2020 for recognition. 2. A reduction in capital of US$10 million in Ocean Group Ltd. and OPC Holdings Ltd. which are 100% owned by the Company in connection with the sale of shares in Hunan Ocean Wide Plastics Ltd for review and approval. 3. Amendments to certain provisions of the Company's procedures for loaning of funds and making of endorsements/guarantees for review and approval. 4. Amendments to certain provisions of the Company's articles of incorporation for review and approval. 5. The Company's "Statement of Internal Control” in compliance with the “Regulations Governing Establishment of Internal Control Systems by Public Companies” issued by the Financial Supervisory Commission for review and approval. 6. 2019 financial report and consolidated financial report for determination. 7. The Company's 2019 loss make-up proposal and 2019 business report for determination. 8. The time and venue of this year's (2020) regular shareholders’ meeting and the agenda thereof for determination.
2020/05/12	1. The retrospective recognition of loans of funds to subsidiaries as of Mar 2020 for recognition. 2. First Commercial Bank's financing facilities (to be renewed on expiry with no change to the facility)for determination.

42

Date	Major resolutions
2020/08/12	1. The Company's loans of funds as of June 2020 for discussion. 2. Chang Hwa Commercial Bank's financing facilities (increase in export negotiation limit) for determination. 3. Hua Nan Commercial Bank's financing facilities (to be renewed on expiry with no change to the facility)for determination.
2020/11/09	1. The Company's loans of funds as of Sept 2020 for recognition. 2. Chang Hwa Commercial's financing facilities (to be renewed on expiry with no change to the facility)for determination.
2020/12/22	1. The Company's loans of funds as of Nov 2020 for recognition. 2. The Company's 2021 capital expenditure budget and profit and loss budget for review and approval. 3. The Company’s 2021 audit plan for review and approval. 4. The Company's 2020 year-end bonus to be distributed by the chairman as delegated based on the Company’s performance and industry standards for review and approval. 5. Amendments to the Company’s "Procedure for Board of Directors Meetings," "Rules Governing the Scope of Powers of Independent Directors," "Audit Committee Charter" and "Remuneration Committee Charter," and the formulation the "Self-Evaluation or Peer Evaluation of the Board of Directors” for review and approval.
110/03/26	1. The Company's loans of funds as of Feb 2021 for recognition. 2. For operational and cash flow needs, application with KGI Commercial Bank for renewal of a medium-term guaranteed loan amount of NT$1 billion with a term of 3 years, of which NT$200 million is guaranteed by the Company as a joint guarantor for the use of Changhsin Hsinyeh Co. for determination. 3. Amendments to the Company's “Rules of Procedure for Shareholders Meetings” and “Procedures for Election of Directors” for review and approval. 4. Amendments to the Company's Remuneration Committee Charter for review and approval. 5. Amendments to the remuneration of independent directors of the Company for review and approval. 6. The Company's "Statement of Internal Control” in compliance with the “Regulations Governing Establishment of Internal Control Systems by Public Companies” issued by the Financial Supervisory Commission for review and approval. 7. 2020 financial report and consolidated financial report for determination. 8. The Company's 2020 employee remuneration and directors' remuneration for determination. 9. The Company's 2020 earnings distribution proposal and 2020 business report for determination. 10. The reelection of 10 directors, including 4 independent directors, for the 21st term at this year’s regular shareholders’ meeting for determination as the term of office of the directors of the Company would soon expire. 11. Proposed lifting of a non-compete clause in Article 209 of the Company Act on the directors in the 21st term of the Company for determination. 12. The time and venue of this year's (2021) regular shareholders’ meeting and the agenda thereof for determination.
(12) Major Issues of Record or Written Statements Made by Any Director or Supervisor Dissenting to Important Resolutions Passed by the Board of Directors: None.

• (13) Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, CEO, and Heads of Accounting, Finance, Internal Audit and R&D: None.

43

5. Information Regarding the Company’s Audit Fee and Independence:

(1) Audit Fee:

)Audit Fee:
Accounting Firm	Name of CPA		Period Covered by CPA’s Audit	Remarks
KPMG Taiwan	CHEN, CHENG- CHIEN	HUANG, YUNG- HUA	2020.01.01~2020.12.31	-

				Unit: NT$
Fee Items Fee Range		Audit Fee	Non-audit Fee	Total
1	Under NT$2,000,000	-	V	V
2	NT$2,000,001 ~NT$4,000,000	V	-	V
3	NT$4,000,001 ~NT$6,000,000	-	-	-
4	NT$6,000,001 ~NT$8,000,000	-	-	-
5	NT$8,000,001 ~NT$10,000,000	-	-	-
6	OverNT$100,000,000	-	-	-

• (2) If the non-audit fees paid to the certified public accountant, the certified public accountant's firm and its affiliates amount to more than one-fourth of the audit fees, the amount of audit and non-audit fees and the content of non-audit services shall be disclosed: None.

Unit: NT$ thousands

Accounting Firm	Name of CPA	Audit Fee		Non-audit Fee	Non-audit Fee	Non-audit Fee		Period Covered by CPA’s Audit	Remarks
			System of Design	Company Registrati on	Human Resource	Others (Note)	Subtotal
KPMG Taiwan	CHEN, CHENG- CHIEN	2,262	-	96	-	251	347	2020
	HUANG, YUNG- HUA

Note: Processing of the sale of the shares of the Mainland China Transferred Investment Corporation.

• (3) If you change your accounting firm and the audit fee paid in the year of change is less than the audit fee paid in the year before the change, you should disclose the amount of the audit fee before and after the change and the reasons for the change: None.

• (4) If the audit fee is reduced by 10% or more from the previous year, the amount, percentage and reason for the reduction of audit fee shall be disclosed: None.

• Replacement of CPA: Not applicable.

• The chairman, general manager, or manager in charge of financial or accounting affairs of the Company has worked in the firm of the certified public accountant or its affiliated companies within the last year: None.

• Changes in the shareholding of directors, supervisors, managers and shareholders holding more than 10% of the shares and changes in shareholding pledges for the most recent year and up to the date of printing of the annual report:

44

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

Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

	Title	Name	2020	2020	As of March 31, 2021	As of March 31, 2021
			Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
	Chairman	TAN, KIN-MEN	-	-	-	-
	Director	WANG, JU-KENG	(56,000)	-	-	-
	Director	Peter Chen	-	-	-	-
	Director	WANG, HAI- LUN(Juristic person representative of Hsuan-Yang Investment)	-	-	-	-
	Director	HSIEH, YU- CHIN(Juristic person representative of Want-Want)	-	-	-	-
	Director	CHU, TSUNG- PIN(Juristic person representative of Li-Hsiang)	-	-	-	-
	Independent Director	HOU, MING-LI	-	-	-	-
	Independent Director	LIN, CHAO-MIN	-	-	-	-
	Independent Director	CHANG, YIE-YUN	-	-	-	-
	Assistant Manager	SHEN, CHAO-PIN	-	-	-	-
	Financial Executive	WANG, YI-HE	-	-	-	-

(2) Shares Trading with Related Parties: None.

Name	Reason for Transfer	Date of Transaction	Transferee	Relationship between Transferee and Directors, Supervisors, Managers and Major Shareholders	Shares	Transactio n Price (NT$)
WANG, JU-KENG	Gifts and Transfers	2020/1/13	WANG, CHIN-MIN	lineal ascendant	56,000	-

• (3) Shares Pledge with Related Parties: None.

45

9. Relationship among the Top Ten Shareholders:

Relationship among the Top Ten Shareholders

							April 24,2021	April 24,2021	April 24,2021
Name	Current Shareholding		Spouse’s/minor’s Shareholding		Shareholding by Nominee Arrangement		Name and Relationship Between the Company’s Top Ten Shareholders, or Spouses or Relatives Within Two Degrees		Remarks
	Shares	%	Shares	%	Shares	%	Name	Relationship
Yee Fong Chemical & Industrial Co.,Ltd.	12,425,769	5.47	-	-	-	-	-	-	-
(Juristic person representative of Yee Fong Chemical & Industrial Co., Ltd.) CHEN, CHIN- WEN	2,050,788	0.90	337,897	0.15	-	-	-	-	-
Mercuries Life Insurance Co.,Ltd.	10,844,000	4.77	-	-	-	-	-	-	-
Pei-Hsun Enterprise Co., Ltd.	6,796,973	2.99	-	-	-	-	-	-	-
(Juristic person representative of Pei-Hsun Enterprise Co., Ltd.) YEH, WEN- HUNG	-	-	-	-	-	-	-	-	-
CHEN, CHIN- YUAN	5,669,128	2.49	412,000	0.18	-	-	CHEN, YEN- HUNG TAN, KIN- MEN	Brothers	-
							CHEN, YU-MEI	Siblings
Heng-Chih Investment Co., Ltd. Trust Account	5,447,771	2.40	-	-	-	-	-	-	-

46

(Juristic person representative of Heng-Chih Investment Co., Ltd.) CHEN, YU-MEI	397,677	0.18	-	-	-	-	CHEN, YEN- HUNG TAN, KIN- MEN CHEN, CHIN- YUAN	Siblings	-
CHEN, YEN- HUNG	5,180,762	2.28	-	-	-	-	TAN, KIN- MEN CHEN, CHIN- YUAN	Brothers	-
							CHEN, YU-MEI	Siblings
CHEN,FANG-FU	4,767,384	2.10	-	-	-	-	-	-	-
TAN, KIN-MEN	4,695,202	2.07	-	-	-	-	CHEN, YEN- HUNG CHEN, CHIN- YUAN	Brothers	-
							CHEN, YU-MEI	Siblings
CHEN, CHIN- CHUAN	4,359,243	1.92	-	-	-	-	Peter Chen	Brothers	-
Peter Chen	3,943,860	1.74	-	-	-	-	CHEN, CHIN- CHUAN	Brothers	-

47

10. Ownership of Shares in Affiliated Enterprises:

Ownership of Shares in Affiliated Enterprises

			As of March 31,	As of March 31,	2021 Unit: thousand shares;%	2021 Unit: thousand shares;%
Affiliated Enterprises (Note)	Ownership by the Company		Direct or Indirect Ownership by Directors, Supervisors, Managers		Total Ownership
	Shares	%	Shares	%	Shares	%
Chun Pin Enterprise Co., Ltd.	29,000	44.62	-	-	29,000	44.62
Chang-Hsin-Hsin-Yeh Co., Ltd.	290,086	100.00	-	-	290,086	100.00
Hung-Ta Investment Co., Ltd.	19,000	100.00	-	-	19,000	100.00
FERMAT ENTERPRISES,LTD.	450	100.00	-	-	450	100.00
UNIVERSE ENTERPRISES,LTD.	3,000	100.00	-	-	3,000	100.00
OCEAN GROUP,LTD.	32,900	100.00	-	-	32,900	100.00
Fine Environment Technologies Co., Ltd.	1,003	60.76	647	39.24	1,650	100.00

Note: Investments made by the Company and accounted for using equity method.

48

IV. Capital Overview

1. Capital and Shares:

(1) Source of Capital: May 20, 2021 Unit: Shares; NT$

Month/ Year	Par Value (NT$)	AuthorizedCapital	AuthorizedCapital	Paid-inCapital	Paid-inCapital	Remark	Remark
		Shares	Amount	Shares	Amount	Sources of Capital	Capital Increased by Assets Other thanCash	Other
54/6	100	300,000	30,000,000	300,000	30,000,000	Cash investment of NT$30,000,000	None
61/3	100	450,000	45,000,000	450,000	45,000,000	Transfer of surplus to capital of NT$15,000,000	〞
62/4	100	600,000	60,000,000	600,000	60,000,000	Transfer of surplus to capital of NT$15,000,000	〞
63/10	100	900,000	90,000,000	900,000	90,000,000	Transfer of surplus to capital of $30,000,000	〞
64/2	100	1,100,000	110,000,000	1,100,000	110,000,000	Capital reserve to increase capital by $20,000,000	〞
65/6	100	1,375,000	137,500,000	1,375,000	137,500,000	Transfer of surplus to capital of NT$27,500,000	〞
65/8	100	2,138,000	213,800,000	2,138,000	213,800,000	Merger of Yee Fong Plastics Co., Ltd. NT$76,300,000	〞
66/5	100	2,779,400	277,940,000	2,779,400	277,940,000	Transfer of surplus to capital of NT$21,380,000 Capital reserve to increase capital by $42,760,000	〞
67/8	100	3,168,516	316,851,600	3,168,516	316,851,600	Transfer of surplus to capital of $38,911,600	〞
68/6	100	3,802,219	380,221,900	3,802,219	380,221,900	Transfer of surplus to capital of $63,370,300	〞
69/7	100	4,182,441	418,244,100	4,182,441	418,244,100	Transfer of surplus to capital of $38,022,200	〞
76/11	10	54,371,733	543,717,330	54,371,733	543,717,330	Change of denomination and capitalization of surplus by $125,473,230	〞
77/7	10	65,246,080	652,460,800	65,246,080	652,460,800	Transfer of surplus to capital of $108,743,470	〞
78/9	10	79,600,218	796,002,180	79,600,218	796,002,180	Transfer of surplus to capital of $134,406,930 Capital reserve transferred to capital of$9,134,450	〞
80/9	10	99,500,273	995,002,730	99,500,273	995,002,730	Transfer of surplus to capital of $127,360,350 Capital reserve transferred to capital of$71,640,200	〞
81/9	10	109,450,302	1,094,503,020	109,450,302	1,094,503,020	Transfer of surplus to capital of $69,650,200 Capital reserve transferred to capital of$29,850,090	〞

49

Month/ Year	Par Value (NT$)	AuthorizedCapital	AuthorizedCapital	Paid-inCapital	Paid-inCapital	Remark	Remark
		Shares	Amount	Shares	Amount	Sources of Capital	Capital Increased by Assets Other thanCash	Other
82/9	10	123,678,843	1,236,788,430	123,678,843	1,236,788,430	Transfer of surplus to capital of $131,340,370 Capital reserve transferred to capital of$10,945,040	〞
84/9	10	136,046,728	1,360,467,280	136,046,728	1,360,467,280	Transfer of surplus to capital of $115,021,330 Capital reserve transferred to capital of$8,657,520	〞	Note 1
85/8	10	157,406,066	1,574,060,660	157,406,066	1,574,060,660	Transfer of surplus to capital of $204,070,100 Capital reserve transferred to capital of$9,523,280	〞	Note 2
85/10	10	162,306,066	1,623,060,660	162,306,066	1,623,060,660	Cash capital increase of NT$49,000,000	〞	Note 3
87/7	10	198,175,707	1,981,757,070	198,175,707	1,981,757,070	Capital surplus transferred to capital of $358,696,410	〞	Note 4
89/8	10	208,084,494	2,080,844,940	208,084,494	2,080,844,940	Transfer of surplus to capital of $79,270,290 Capital reserve to increase capital by $19,817,580	〞	Note 5
94/8	10	218,488,719	2,184,887,190	218,488,719	2,184,887,190	Transfer of surplus to capital of $104,042,250	〞	Note 6
95/8	10	227,228,268	2,272,282,680	227,228,268	2,272,282,680	Transfer of surplus to capital of $87,395,490	〞	Note 7

Note:

1 Approved by the Securities Commission of the Ministry of Finance (82.7.9), Taiwan Financial Services Commission (1) Letter No. 29506

2 Approved by the Securities Commission of the Ministry of Finance (84.6.30), Taiwan Financial Securities (I) No. 38156

3 Approved by the Securities Commission of the Ministry of Finance (85.7.3), Taiwan Financial Services Commission (1) Letter No. 41690

4 Approved by the Securities and Futures Commission, Ministry of Finance (87.6.26), Taiwan Financial Securities (I) No. 55942

5 Approved by the Securities and Futures Commission of the Ministry of Finance (89.7.7), Taiwan Financial Securities (I) No. 58829 6Approved by the Financial Supervisory Commission, Executive Yuan (94.7.12), Financial Supervisory Commission No. 0940128031 7Approved by the Financial Supervisory Commission, Executive Yuan (95.6.29), Financial Supervisory Commission No. 0950127211

Unit: Shares

				Unit: Shares
Share Type	Authorized Capital			Remarks
	Issued Shares	Un-issued Shares	Total Shares
Ordinary shares	227,228,268	172,771,732	400,000,000	Listed Company Stocks

Information about the master reporting system: None

(2) Status of Shareholders

Ordinary shares 227,228,268 172,771,732 400,000,000 Listed Company Stocks Information about the master reporting system: None (2) Status of Shareholders	Ordinary shares 227,228,268 172,771,732 400,000,000 Listed Company Stocks Information about the master reporting system: None (2) Status of Shareholders	Ordinary shares 227,228,268 172,771,732 400,000,000 Listed Company Stocks Information about the master reporting system: None (2) Status of Shareholders	Ordinary shares 227,228,268 172,771,732 400,000,000 Listed Company Stocks Information about the master reporting system: None (2) Status of Shareholders	Ordinary shares 227,228,268 172,771,732 400,000,000 Listed Company Stocks Information about the master reporting system: None (2) Status of Shareholders	Ordinary shares 227,228,268 172,771,732 400,000,000 Listed Company Stocks Information about the master reporting system: None (2) Status of Shareholders	Ordinary shares 227,228,268 172,771,732 400,000,000 Listed Company Stocks Information about the master reporting system: None (2) Status of Shareholders	Ordinary shares 227,228,268 172,771,732 400,000,000 Listed Company Stocks Information about the master reporting system: None (2) Status of Shareholders
April 24, 2021
~~Status~~ Item	Governm ent Agencies	Financial Institutions	Domestic Trust	Other Juridical Persons	Domestic Natural Persons	Foreign Institutions & Natural Persons	Total
Number of Shareholders	-	1	3	46	4,106	53	4,209
Shareholding (shares)	-	10,844,000	5,466,771	49,555,578	155,361,924	5,999,995	227,228,268
Percentage	-	4.77	2.41	21.81	68.37	2.64	100

50

(3) Shareholding Distribution Status (face value of $10 per share) April 24, 2021

Class of Shareholding (Unit: Share)	Number of Shareholders	Shareholding (Shares)	Percentage
1 ~ 999	1,333	130,301	0.06
1,000 ~ 5,000	1,624	3,607,352	1.59
5,001 ~ 10,000	356	2,999,026	1.32
10,001 ~ 15,000	135	1,776,370	0.78
15,001 ~ 20,000	103	1,917,439	0.84
20,001 ~ 30,000	111	2,859,168	1.26
30,001 ~ 40,000	80	2,867,813	1.26
40,001 ~ 50,000	60	2,803,639	1.23
50,001 ~ 100,000	139	10,373,527	4.57
100,001 ~ 200,000	108	15,513,308	6.83
200,001 ~ 400,000	69	19,742,164	8.69
400,001 ~ 600,000	26	12,368,638	5.44
600,001 ~ 800,000	14	9,892,596	4.35
800,001 ~ 1,000,000	6	5,440,508	2.39
1,000,001 or over	45	134,936,419	59.39
Total	4,209	227,228,268	100.00

Preferred Shares: None.

(4). List of Major Shareholders

April 24, 2021

Shares Shareholder's Name	Shareholding	Percentage
Yee Fong Chemical & Industrial Co., Ltd. Mercuries Life Insurance Inc.Pei-Hsun Enterprise Co., Ltd. CHEN, CHIN-YUAN Henchi Investment Trust Account CHEN, YEN-HUNG CHEN, FANG-FU TAN, KIN-MEN CHEN, CHIN-CHUAN Peter Chen	12,425,769 10,844,000 6,796,973 5,669,128 5,447,771 5,180,762 4,767,384 4,695,202 4,359,243 3,943,860	5.47 4.77 2.99 2.49 2.40 2.28 2.10 2.07 1.92 1.74

51

(5). Market Price, Net Worth, Earnings, and Dividends per Share

Unit: NT$

					Unit: NT$
Item	Year		2019	2020	As of March 31, 2021 (Note 8)
Market Price per Share (Note 1)	Highest Market Price		40.20	41.35	37.95
	Lowest Market Price		25.70	20.65	32.20
	Average Market Price		29.73	32.78	34.96
Net Worth per Share (Note 2)	Before Distribution		23.45	29.06	32.03
	After Distribution		-	28.06	31.03
Earnings per Share (Note 3)	Weighted Average Shares		220,685,552	220,685,552	220,685,552
	Earnings Per Share		0.53	3.24	1.13
Dividends per Share	Cash Dividends		-	1.00	-
	Stock Dividends	Dividends from Retained Earnings	-	-	-
		Dividends from Capital Surplus	-	-	-
	Accumulated Undistributed Dividends(Note 4)		-	-	-
Return on Investment	Price / Earnings Ratio (Note 5)		56.09	10.12	-
	Price / Dividend Ratio (Note 6)		-	32.78	-
	Cash Dividend Yield Rate (Note 7)		-	0.03	-

• Note 1: The highest and lowest market prices of common stock for each year are shown, and the average market price for each year is calculated based on the value and volume of transactions for each year.

• Note 2: Please use the number of shares issued at the end of the year as the basis for the distribution resolved at the following year's shareholders' meeting.

• Note 3: If retroactive adjustments are required due to the no-compensation stock allotment, etc., the earnings per share before and after the adjustments should be presented.

• Note 4: If the conditions of issuance of equity securities provide that dividends not paid in the current year may be accumulated and paid in the year of earnings, they should be paid separately.Disclosure of accumulated unpaid dividends for the year then ended.

• Note 5: Price / Earnings Ratio = Average Market Price / Earnings per Share

• Note 6: Price / Dividend Ratio = Average Market Price / Cash Dividends per Share

• Note 7: Cash Dividend Yield Rate = Cash Dividends per Share / Average Market Price

• Note 8: The net value per share and earnings per share should be presented as of the latest quarterly period audited (reviewed) by the accountants as of the date of printing of the annual report.

52

• (6). Dividend Policy and Implementation Status

• Dividend Policy:

The Company adopts a stable dividend payment policy based on the principle of profit sharing with shareholders, and the dividend policy set forth in the Company's Articles of Incorporation is as follows.

The Company's annual financial statements shall first make up for prior years' deficits if there is any after-tax profit, and then set aside 10% of the remaining balance as legal reserve. In addition, as required by law, after setting aside or reversing the special reserve, the accumulated undistributed earnings shall be added to the available-for-distribution earnings, and the Board of Directors shall, in accordance with the Company's dividend policy, prepare a proposal for distribution of earnings to the shareholders for resolution.

The former dividend policy is to distribute cash dividends, capitalization of earnings, and capitalization of capital reserves in three ways, depending on the profitability of the year, with no less than 20% of the dividends to be distributed. If the Company has investment plans or needs to improve its financial structure, cash dividends may be paid by transferring capital from earnings or capital surplus, provided that the minimum cash payout ratio shall not be less than 10% of the total dividends allotted.

  2. Proposed Distribution of Dividend: The proposed distribution at the shareholders' meeting is a cash dividend of NT$1 per share.

• (7). Effect of the proposed gratis allotment of shares at the shareholders' meeting on the Company's operating results and earnings per share: Not applicable

• ( 八 ). Employee Bonus and Directors' and Supervisors' Remuneration:

• Information Relating to Employee Bonus and Directors’ and Supervisors’ Remuneration in the Articles of Incorporation:

If the Company makes a profit in its annual accounts, it shall set aside not less than 1% for employees' remuneration and not more than 2% for directors' remuneration, but shall reserve the amount to cover any accumulated losses in advance. The foregoing is defined as income before income taxes before the distribution of employee compensation and director's compensation. The Company may distribute employee compensation to employees who meet certain criteria.

1. The Estimated Basis for Calculating the Employee Bonus and Directors’ and Supervisors’ Remuneration:

   1. In accordance with the Company's Articles of Incorporation, the Company's estimated compensation to employees and directors is first discussed and approved by the Compensation Committee and then submitted to the Board of Directors for approval and report to the shareholders' meeting. If the actual amount of appropriation differs from the amount approved by the board of directors, the difference is recorded as a change in accounting for the following year. If the actual amount of distribution differs from the amount approved by the Board of Directors, the change is recorded as profit or loss in the following year.

2. Profit Distribution for Employee Bonus and Directors’ and Supervisors’ Remuneration for This Year Approved in Board of Directors Meeting:

3. The amount of employee compensation and Director compensation distributed in cash or stock:: On March 26, 2021, the Board of Directors approved the proposed distribution of $9,545

53

thousand in cash compensation to employees and $7,299 thousand in cash compensation to directors.

1. The amount of employee compensation distributed in stock and its proportion to the aggregate of net income after tax and total employee compensation in the individual or individual financial statements for the period:

There is no proposed distribution of employee stock-based compensation.

1. Information of Earnings Set Aside for Employee Bonus and Directors’ and Supervisors’ Remuneration for Last Year:

2. Actual distributions: No directors' remuneration and no employees' remuneration.

3. Differences in compensation to employees, directors and supervisors, causes and treatment: No differences.

( 九 ). Buyback of Treasury Stock: None.

1. Corporate Bonds: None.

2. Special share: None.

3. Global Depository Receipts: None.

4. Employee Stock Options: None.

5. Issuance of New Restricted Employee Shares: None.

6. Status of New Shares Issuance in Connection with Mergers and Acquisitions: None.

7. Financing Plans and Implementation: None.

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V. Operational Highlights

1. Business Activities:

(1) Business Scope:

1. Main areas of business operations:

Manufacture and sale of plastic materials.

Manufacture and sale of plastic products.

Manufacture and sale of raw materials incidental to the plastic industry.

C801020 Manufacture of Petrochemical Materials

C801040 Synthetic Resin Manufacturing

C801990 Other chemical materials manufacturing (plastic alloys of mixed pellets, plastic steel of mixed pellets, concentrated materials)

H701010 Residential and building development for lease and sale.

H701020 Industrial plant development for lease and sale.

H703010 Factory for rent.

H703030 Office building for lease.

F401010 International Trade.

F301010 Department store business.

F301020 Super market industry.

F301030 General department store.

ZZ99999 All business items that are not prohibited or restricted by law, except those that are

subject to special approval.

2. Revenue distribution:

The Company is principally engaged in the manufacture and sale of plastic materials and products, and the operating weight of each business is as follows

Year Product	2019	2020
PE foam	0.17%	0.00%
Plastic Cloth	25.54%	18.07%
Syntheticleather	2.69%	1.66%
Plastic Building Materials	11.86%	13.62%
PlasticMaterials	59.74%	66.65%
Total	100.00%	100.00%

3. New products development:

Processing Dept.: Microcrystalline wood, transparent tape, general tape, rigid tape, printing tape, laminating tape and printing tape, etc. We also develop products for tent, ship windows and industrial curtain, and various printing and laminating materials for building materials and various ink-jet printing materials.

Synthetic Leather Dept.: Synthetic Leather Dept. produces DMF-Free eco-friendly PU products, which are divided into two major categories as follows:

1. Water-based PU resin & synthetic leather.

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• 2 . Solvent-free pre-polymerized PPU resin & synthetic leather. The resin is widely used in textile functional coating, laminating and synthetic leather processing, etc. Synthetic leather is used in furniture, various ball skins, wrapping materials, gloves, etc.

• Building Materials Dept.: PVC rigid plastic pipes, impact resistant pipes, PVC-DWV foam pipes, CD flexible pipes, connectors, general boards, impact resistant boards, foam pellets, bottle blowing pellets, injection pellets, line groove (press strip) pellets, WPC plastic wood composite materials, hanging tile strips, water leakage strips, PE foam park chair materials, PVC foam corner materials, etc.

Raw Materials Dept.: Plastic powder, plastic pellets, environmental pellets, medical pellets and large thick transparent tube pellets, etc.

(2 ) Industry Overview:

This year, the U.S. presidential election has come to an end, and the global economy trend has changed from free trade to protectionism under the influence of the trade war between the U.S. and China and the U.K.'s exit from the European Union. The Asian region is in the atmosphere of international political wrestling, and the cross-strait economic and trade policies are unclear, which affects the direction of the domestic economic situation. In addition to considering the southward investment to reduce the impact of trade tariff, the Company has been making flexible policies in the procurement of raw materials to adjust the production capacity to meet the market demand, speeding up the development of structural products, making efforts to change the cost, and making step-by-step efforts to integrate the manpower, material and resources to make the most effective use so that the Company can improve its operation.

Synthetic Leather Dept. has been dedicated to the production of environmentally friendly PU resins and synthetic leather for many years, which has replaced the traditional solvent-based PU, the new crown epidemic affects the border control of various countries, but even more for the professional production technology breakthroughs developed a number of unique products.

(1) Super soft and breathable foam

• (2) Ryan Suede and other functional materials, and actively promotes to the global market with the

application end; the resin combines with various fields of application, such as leather, textile and other processing.

In addition, in terms of pipes, Taiwan businessmen's return to Taiwan for investment has become an important driving force for the growth of domestic demand in recent years, and the progress rate of major public works construction has also reached a record high in recent years.

In addition to the existing products, the Xinwu Plant is developing products such as transparent adhesive sheeting for medical facilities and pool cloths, and we are introducing the planning and production of environmentally friendly products, with special emphasis on green manufacturing processes and green factories to save energy and reduce carbon, and we are also introducing our own environmentally friendly products in the planning of green areas in our factories, with the hope that we can become a "plastic" tourist factory in the future.

As for our mainland business, we have adopted a downsizing approach to the risky building materials industry, and our two innovative plants in Huizhou and Dongguan, Guangdong, can expand the export market in all aspects due to their proximity to our customers and strategic alliances. We pay close attention to the impact of the trade war between the United States and China to adjust the production capacity of the product lines on both sides of the Taiwan Strait, and provide the best combination of products to meet the needs of customers to create profit efficiency

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The company's main product raw material division, PVC powder, is vulnerable to the supply and demand situation of upstream raw materials and affects profits. The Company will improve the quality and efficiency of its production to maintain normal operations and to develop new products and markets to maintain optimal profitability. The focus of development is to meet the future needs of the market, while taking into account the environmental protection and the inherent characteristics.

• (3) Research and Development:

• Recent Annual Expenses:

。 NT$8,654 thousand for 2020

1. Technology or products successfully developed in 2020:

   • Completed batch production test of PVC anti-scaling agent Pilot

   • Development of TPE wood-like weathering material formulation and low density foam material formulation technology.

   • PVC highly flexible medical pellets: Development of NonP plasticizer compounded products.

2. (4) Long-term and Short-term Development:

3. Short-term Development:

4. In 2021, the world is still affected by the pandemic. It is more difficult to promote green products in Europe and the United States. The Company changed to video and internet marketing in response to the epidemic, cooperating with domestic manufacturers for mutual benefit and win-win situation and to reverse the unfavorable situation caused by the epidemic

5. In the past, it has been difficult to recruit talent, and in this period of pandemic, the company's solid image and future vision are attracting quality employees to apply.

6. We will use our existing products to meet the market demand and actively seek orders through the Internet, publicity and exhibitions to increase our market awareness and share.

7. In order to compete with our competitors, we need to effectively reduce our manufacturing and marketing costs.

8. 2 . Long -term Development:

9. New product development staff, together with sales staff, actively engage in technical service work to establish a good interactive relationship with customers.

10. We continue to develop high value-added and profitable products, and constantly pursue more environmentally friendly materials and more efficient manufacturing processes, with the goal of sustainable management with zero pollution, recyclable and biomass materials.

11. Effective management planning for the existing idle land assets, with the opening of the ring road to initiate the development of the residential and commercial area of the Zhonghe plant.

12. We work closely with our distributors to develop the market and continue to pursue new construction and public works projects to increase sales volume and profitability.

13. To avoid tariff barriers in international markets, to establish a shorter supply chain with customers, and to seek to establish a production base close to customers.

14. 2 . Market and Sales Overview:

(1). Market Analysis:

1. Sales (Service) Region:

2. Plastic cloth: Domestic sales 29.3%; export sales 70.7%, mainly in North America and the Middle East, etc.

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Plastic Building Materials: 100% domestic sales.

Synthetic leather: Domestic sales 69.2%; export sales 30.8%, mainly in China and other regions. Plastic Materials: Domestic sales 37.27%; export sales 62.73%, mainly in South Asia and other regions.

1. Market Share (%):

Market Share (%):	regions.
Product Name	Plastic cloth	Synthetic leather	Plastic Building Materials	Plastic Materials
Market share	6.05%	3.13%	6.34%	6.34%

1. The future supply and demand situation and growth of the market, competitive niche and development prospect, favorable and unfavorable factors and countermeasures::

The Company is a manufacturer of plastic secondary processing products, the main products are plastic cloth, plastic pipe, PU synthetic leather and plastic powder. Due to the lack of labor, high land cost, downstream manufacturers moving out of the country, and mainland China joining the production ranks, it is necessary to make a market segmentation with high value-added products, which are described below for each product:

Plastic cloth: Due to the high plasticity and low price of PVC products, they are used everywhere in daily life. Taiyo's products are of stable quality and have a complete line of soft and hard products, providing customers with a full range of supply services. In view of the trade war between the US and China, the Company and Huizhou factory have been adjusting their production lines to meet the needs of customers and to serve customers and create maximum benefits. The Xinwu factory has also been working hard to grasp the development timeline and to strive for change orders under the US-China trade war and the pandamic.

• Plastic Tubes: We mainly supply pipes for public utilities, construction, sewerage, fishery, wire and cable distribution, and water supply, and we have been able to maintain our growth over the years because of its wide coverage and its relationship with people's livelihood. In order to increase sales and improve production capacity, the company has made efforts to improve the manufacturing process towards automatic equipment, and has developed special impact and vibration resistant pipes, core layer foam pipes to reduce noise, and CD flexible pipe for electric wire to facilitate construction.

• Synthetic leather: The market for traditional high pollution solvent-based PU products is shrinking rapidly, while the cost of water-based PU and solvent-free PU synthetic leather is high and post-processing is not mature, but the cost of solvent-based PU is increasing year by year and the difference is getting closer, so we are inquiring about the degree of environmental PU and promoting samples in the market. Our company is in full control from resin synthesis to synthetic leather processing. The resin is used in textile coating and synthetic leather in various fields such as ball, furniture, shoes and bags, and apparel, etc. It has excellent physical and chemical properties and has been quantified in the market, and continues to expand market acceptance and usage.

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Plastic powder:In view of the oversupply of PVC powder, the Company will continue to focus on quality and production efficiency improvement, strengthen export business to diversify the market, and invest in warehousing companies to reduce overall costs in order to facilitate future market competition. We plan to reduce transportation costs, increase production lines in key markets, and develop customized plastic pellets to pave the way for future growth.

In the future, our parent company in Taiwan will aim at the domestic demand industry, and we will continue to invest in industrial transformation by developing high value-added and high technology products in the first phase. Our mainland plants will be flexible to meet the market demand and provide customers with the most rapid and best product combination options.

• (2 ). Production Procedures of Main Products:

• Plastic Fabric:Mainly used for medical equipment use, making file folder, stationery related supplies, ink jet use, double back use, advertising and trademark use, suit cover, wrapping cloth, packing cloth, leather case lining, umbrella cloth, raincoat, curtain cloth, tablecloth, shower curtain, blow-up toys, hovercraft, flocked bed, building materials, pool, industrial use fabrics and ships, tent transparent plastic cloth window use. The production of plastic fabric of our company is fully automatic, which is made by mixing PVC powder and other sub-materials with a weighing system, and then embossing and rolling them with a mixing machine, a 10,000horsepower machine, and a laminating machine.

• Synthetic leather: Water-based PU synthetic leather has been successfully used in ball, glove, shoe material, furniture, etc. Solvent-free pre-polymerized PPU synthetic leather is successfully used in mirror leather, shoe materials, electronic products, etc., and also with hand feeling agents to increase the added value of products such as apparel, bags, etc. The production process is to make various types of ecofriendly PU synthetic leather by coating the eco-friendly PU resin on the release paper, drying it, and then transferring it to various types of cloths.

• Plastic Building Materials: It is mainly used in electrical piping, water supply piping, drainage piping, construction and civil engineering, waterworks, sanitary sewerage, well drilling, traffic signs, chemical storage tanks, electroplating, dust shields, signboards, plastic injection, indoor and outdoor landscape applications. The production process is automated, using mixing systems, extruders, injection machines, and cold water tanks to form the finished products.

• Plastic Materials: PVC powder is mainly used as raw material for plastic cloth, plastic skin, plastic pipe, plastic film, electrical insulation material, blown bottle, floor tile, shaped extrusion, paint, ink, etc. Our PVC powder is produced by automatic process system, through polymerization tank, dewatering machine and other equipment, and finally dried into finished products.

  • Plastic pellets are mainly used for extrusion, blowing, film blowing, and medical grade plastic pellets; non-halogenated environmental pellets are also used for IC packaging tubes, and newly developed PVC extrusion pellets for large thick transparent tubes are used for corrosive material outer protection tubes.

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(3). Supply Status of Main Materials:

Supply Status of Main Materials:	Supply Status of Main Materials:	Supply Status of Main Materials:
	Main raw materials
Name	Source of Supply	Supply Situation
PVC powder	Self made	Long-term cooperation
Vinyl chloride monomer	Foreign import and domestic manufacturers	Long-term cooperation
Plasticizer	Foreign import and domestic manufacturers	Long-term cooperation
Adhesive	Domestic manufacturers	Long-term cooperation
Modifier	Foreign import	Long-term cooperation

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(4). Major Suppliers and Clients

1. Major Suppliers in the Last Two Calendar Years (Note1)

								Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands
		2019				2020			2021(As of March31) (Note2)
Item	Company Name	Amount	Percent	Relation with Issuer	Company Name	Amount	Percent	Relation with Issuer	Company Name	Amount	Percent	Relation with Issuer
1	A Company	1,589,163	48.72	Businesses	A Company	1,850,393	64.8	Businesses	A Company	801,187	63.26	Businesses
2	B Company	956,686	35.06	"	B Company	353,945	12.4	"	B Company	-	-	"
3	Others	432,913	16.22	"	Others	651,021	22.8	"	Others	465,310	36.74	"
	Purchase amount	2,978,762	100.00		Purchase amount	2,855,359	100.00		Purchase amount	1,266,497	100.00

Note 1: The names of suppliers who have purchased more than 10% of the total amount of goods in the last two years and the amounts and percentages of their purchases are listed, provided that the names of suppliers or the parties to whom the transactions are made are not disclosed due to contractual provisions.If the supplier's name is not a related party, the name may be used as the code.

• Note 2: As of the printing date of the annual report, financial information of companies whose shares are listed or traded on the stock exchange should be disclosed if they have been audited or reviewed by a certified public accountant most recently.

• Major Clients in the Last Two Calendar Years: No customer with more than 10% of total sales.

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(5). Production in the Last Two Years:

Year Output Major Products	Year Output Major Products		2019			2020
		Capacity	Quantity	Amount (NT$ thousands)	Capacity	Quantity	Amount (NT$ thousands)
Plastic(ton)		21,500	19,506	1,112,002	21,500	14,997	861,235
PE foam(ton)		1,032	27	6,357	0	0	0
Synthetic leather (thousandyards)		3,500	703	150,688	3,500	425	104,954
Plastic building materials (ton)		15,000	12,554	474,044	15,000	14,286	538,021
Plastic materials (ton)		125,000	108,399	2,961,261	125,000	125,904	3,048,884
Total	(t)	162,532	140,486	4,553,664	161,500	155,187	4,448,140
	(Thousan dyards)	3,500	703	150,688	3,500	425	104,954

(6). Sales for the last two years: Amount: NTD$1,000 dollars

Year Sales Product	Year Sales Product	2019	2019	2019	2019	2020	2020	2020	2020
		Domestic Sales		Export		Domestic Sales		Export
		Qty	Value	Qty	Value	Qty	Value	Qty	Value
Plastic(ton)		3,798	222,570	14,665	859,857	3,847	207,724	9,559	560,261
Plastic (Thousand yards)		293	38,792	148	18,162	414	31,044	129	16,010
PE foam(ton)		65	5,878	15	2,239	0	61	0	0
Synthetic leather (thousandyards)		341	75,555	352	44,145	236	51,754	170	23,033
Plastic building materials(ton)		11,982	528,562	0	0	13,775	614,313	0	0
Plastic materials (ton)		31,772	971,194	60,198	1,700,311	39,343	1,131,281	70,725	1,885,002
Total	(t)	47,617		74,878		56,965		80,284	2,484,306
	(Thousan dyards)	634	1,842,551	500	2,624,714	650	2,036,177	316

3. Human Resources:

				Mar.31,2021
Year		2019	2020	Current year ending March 31, 2021
Employee	Management Staff	63	61	61
	Directmanual	145	145	144
	Indirect manual	255	254	254
	Total	463	460	459
Averageage		43.84	44.05	44.2
Average senioriity		14.35	14.07	14.08

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	Education	-	-	-	-
		MA	7.99 %	8.26%	8.50%
		BA	43.85%	46.09%	45.97%
		High School	34.77%	32.83%	32.90%
		Below high school	13.39%	12.82 %	12.63%

4. Environmental Protection Expenditure:

(1). Losses and penalties suffered by the Company as a result of environmental pollution in the most recent year and up to the printing date of the annual report:

1. 2020:

. 2020:
Date	108.12.9		109.4.10	109.5.22
Order no.	20-108-120003		30-109-030048	20-109-050024
Violation	Air Pollution Prevention Act, Article 24, Paragraph 2.		Water Pollution Prevention Law, Article 28,Item 1.	Air Pollution Prevention Act, Article 22, Section 3.
Description	The fluidized bed dryer is equipped with a discharge hopper (including a discharge line and receiving equipment) to collect the products of the process (PVC powder), but none of them are listed in the foregoing permit, and they are not operated according to the permit.		The storage tank pipeline was accidentally broken by the factory's vehicle, causing the PAC coagulant to leak from the broken pipeline and pollute the water body in the ditch.	The sampling time does not meet the requirement of 20 minutes for each sample in the discharge pipe VCM concentration test report.
Penalties	�Fine of NT$200,000 �Environment lecture 2 hours		�Fine of NTD 136,500,000 �Environment lecture 2 hours	�Fine of 100,000 NTD �Environment lecture 2 hours
. As of March 31, 2021:
Date		110.3.2
Order no.		20-110-020003
Violation		Air Pollution Prevention Act,Article 23,Paragraph 2.
Description		The contact between the wastewater surface of the wastewater temporary storage pond and the atmosphere violates Article 10 of the "Air Pollutant Control and Emission Standards for Polyethylene and Polyvinyl Chloride ManufacturingIndustry".
Penalties		�Fine of 240,000 NTD �Environment lecture 2 hours

2. As of March 31, 2021:

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• (2 ). R:esponse: The plant has drawn up an improvement plan to include the downstream piping and receiving equipment in the permit documents and has obtained a permit from the Environmental Protection Bureau to set up the plant. The Company has completed the cleanup of polluted water bodies and the installation of overflow prevention dikes for storage tanks, and has added patrol sign-up sheets at wastewater treatment sites. We have commissioned a testing company to perform the sampling, and the testing results are all in accordance with the regulatory standards, and we are working towards a pollution-free workplace.

5. Labor Relations:

Since our company was founded, we have attached great importance to labor relations, and based on the management philosophy of "one employer, one employee" and "humane management". We have established a mechanism for consultation between employers and employees by participating in labor union meetings, management and supervisory meetings, and holding regular labor-management meetings; established a grievance system to smooth communication channels; and established various rules and regulations to establish the rights and obligations of both parties. The harmony between employers and employees can be maintained through mutual trust and understanding between management and employees.

(1). Employee benefit system.

We provide universal health insurance, labor insurance, annual festival bonus, living allowance in remote areas, scholarships for employees' outstanding children, and employee dividends from company surplus and Labor’s Day recognition activities. In addition, the Company has an employee welfare committee to coordinate the use of employee welfare funds and conduct various welfare activities, such as wedding and funeral subsidies, child education subsidies, medical subsidies for employees and their dependents, club activities, travel, and celebration activities are all included in the scope of welfare. In order to take care of both personal and family needs, and to enhance the physical and mental health of employees. In addition, the annual budget for each employee is approximately $10,000 to $11,000, and we also provide free health checkups for our employees. The company provides equal maternity and paternity leave and other leave entitlements for both men and women, which makes it easier for the organization to recruit and retain talented employees.

In 2019, according to the General Accounting Office of the Executive Yuan, there is a 14% difference between men's and women's salaries, but in our company, the ratio of men's to women's salaries is 1:1. In accordance with the Company's personnel management regulations, employees are selected and hired according to the initial appointment requirements for each grade, and are paid according to the standards set by the employee salary scale. The concept of gender workplace equality is truly implemented.

(2 ). Staff Development and Training:

1. Professional on-the-job training

Every year, the Company cooperates with the Plastic Industry Technology Development Center and the Industrial Association to systematically enhance the professional knowledge and skills of employees through various professional practical courses, and also adopts digital learning courses to provide a more flexible and convenient learning environment so that each

64

employee can quickly perform his or her duties.

1. Management Training

In order to help employees reserve their strengths for future career development and to train management personnel, the Company has established the rules for the classification, promotion and transfer of employees, and holds training courses and purchases digital training series every year in accordance with these rules to systematically assist supervisors and future supervisors to improve their management abilities in order to achieve the best management performance.

3. Encourage self-study

The Company encourages employees to study on the job to supplement the training provided by the Company. The Company has also established a program for in-service employees to further their studies by subsidizing the costs of their studies in colleges and universities and research classes. In addition, the Company has established a new incentive program for certified personnel to encourage employees to obtain relevant licenses, or to provide fees for the application of plastic materials for the certification of engineers held by the Plastic Industry Technology Development Center, in order to enhance their self-worth.

1. Training Quality Standards

In 2011, 2014, 2016 and 2019, our company passed the Training Quality Standard (TTQS) assessment by the Vocational Training Bureau of the Council of Labor Affairs, Executive Yuan, and the assessment result was Bronze (valid for 3 years).

5. 2020 Annual education training details

	Internal			External	External
Course	People	Hrs	Course	People	Hrs
149	929	2,473	147	245	1,311

(3). Code of conduct or ethics for employees:

Integrity, pragmatism, innovation and people-oriented are the management philosophy that we have insisted on since the beginning of our company, and it is also the highest standard that we expect all Taiyo employees to carry out their work tasks. In accordance with this management philosophy and relevant laws and regulations such as the Labor Standards Law, the Company has established work rules and various management systems to maintain employee discipline and order.

1. The "Work Rules for Employees" are established to regulate the hiring, firing, working hours, vacation, leave, rewards and punishments, performance appraisal, retirement, and benefits of employees.

2. Pre-employment training for new recruits includes basic education on ethics, environmental protection, occupational safety and health management.

3. We have signed a "Professional and Confidential Agreement", which stipulates that employees are obligated to maintain confidentiality of tangible and intangible business property information and prohibits them from infringing on the Company's interests.

4. (4). Work environment and employee safety protection measures

5. Regularly perform labor safety education training and health checks

The company conducts labor safety education and training for all new employees. In

65

accordance with the relevant domestic laws and regulations, we regularly implement health checks and operating environment inspections for general employees, as well as annual education and training for special operators and health checks for special operators, in order to grasp the health status of special operators and ensure the safety and health of employees.

  2. Regular fire training and emergency response training

     - In addition, the Company implements self-defense and fire-fighting team training,

     - notification, evacuation drills, first aid training, fire safety training and fire-fighting training every year in accordance with the law to implement disaster prevention and ensure employee safety.

• (5). Retirement System

• There are two types of retirement for the Company's employees: voluntarily retirement and ordered retirement.

  1. An employee of the Company may voluntarily retire under one of the following circumstances: 1.1.15 years of service or aged 55 or older

     • 1.2.25 years of service

     • 1.3.Aged 60

  2. 2.The Company may order the retirement of any employee of the Company under any of the following circumstances:

2.1.Aged 65

2.2.Mentally or physically incapacitated for work

The age specified in the first paragraph of the preceding paragraph may be adjusted by the Company for workers with special characteristics such as danger and physical strength, but not less than fifty-five years of age, upon request to the central competent authority.

In addition, in order to ensure the retirement life of our employees, the Company has established a retirement plan in full compliance with the Labor Standards Law and the Labor Pension Act. If the Labor Standards Law's pension plan is applicable, the Company will make monthly contributions at a rate of 2% of the total salary and deposit them in a special account at the Central Trust Bureau. The Company shall pay 6% of each employee's monthly salary to the individual pension account set up by the Labor Insurance Bureau, and the voluntary contribution rate shall be deducted from the employee's monthly salary to the individual pension account set up by the Labor Insurance Bureau, so that all eligible employees can receive their pensions in accordance with the law. The Company shall pay the employees' pensions within 30 days from the date of retirement.

Since the establishment of the Company in June 1965, 533 employees have retired under the Employees' Retirement Plan as of the end of 2009. As of December 31, 2020, the Company had deposited a total of NT$288,732,517 in the "Labor Retirement Fund" with the Bank of Taiwan.

(6). The Company's personnel involved in the transparency of financial information have obtained the relevant licenses specified by the competent authorities.:

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Dpt.		Organizer	Course	Hrs
Finance Department	WANG, YI-HO	ARDF	The latest tax laws in China and corporate strategies.	3
		ARDF	Analysis of the latest securities and financial tax laws and professional standards.	5
		ARDF	Analysis of international taxation trends and practical responses.	3
		ARDF	Corporate governance practices: setting up "independent directors" and "audit committee" in accordance with the law for listed companies - the way for enterprises to respond.	3
		ARDF	Analysis of the legal responsibilities of business contracts: review, negotiation, and dispute handling - Take the authorization contract as an example.	3
		ARDF	Analysis of IFRS 9, "Financial Instruments" sample interpretations.	3
		Chinese Association of Accounting	The development of corporate governance in China to corporate governance.	3
		Chinese Association of Accounting	Analysis of legal practices related to corporate social responsibility.	3
Accounting Section	CHIU, CHUN-FU	ARDF	Analysis of the latest corporate law amendments on employee compensation system and the latest securities and financial tax laws and professional standards.	4
		ARDF	The impact and response of the latest major income tax and business tax changes on corporate operation and the analysis of the latest securities and financial leasing law and professional standards.	4
		ARDF	IFRS 16 "Leasing" FAQ and practical analysis and the latest securities and financial leasing law and professional standards.	4
		Chinese Association of Accounting	The development of corporate governance in China to corporate governance.	3
		Chinese Association of Accounting	Analysis of legal practice related to corporate social responsibility.	3
Audit Office	LU, CHIEN-AN	Internal Audit Association	Practical analysis of auditing techniques.	6
		Internal Audit Association	Introduction to the Code of Conduct for Integrity and ISO 37001.	6
	CHENG, JUO- NAN	Internal Audit Association	Practical exercises on labor incident law.	6
		ARDF	Analysis of the policy of "assisting companies to enhance their ability to prepare financial reports" and internal control management practices.	6

Audit Office: 1 international internal auditor; 1 share officer designated by Securities and Futures Market Development Foundation.

Finance Department: 1 senior salesperson, 1 investment advisor, and 1 futures dealer salesperson of the

Securities and Futures Market Development Foundation; 1 salesperson of a securities dealer.

• (7)For the most recent year and up to the date of the annual report, the Company suffered losses due to labor disputes: None.

• Important Contracts: None

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VI. Financial Information

1. Five-Year Financial Summary:

(1). Condensed Balance Sheet and Condensed Consolidated Income Statement

Condensed Balance Sheet - Consolidated Financial Statements

Unit: TWD$1,000 dollars

Year Item	Year Item	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the year ended March 31, 2011 (Note 1)
		2016	2017	2018	2019	2020
Current Assets		1,518,457	1,535,650	1,825,538	1,857,147	2,006,284	2,539,872
Property, plant and equipment		4,230,533	4,082,282	3,822,843	3,595,365	3,522,618	3,507,375
and equipment		-	-	-	-	-	-
Intangible assets		5,169,720	5,261,036	5,998,554	6,122,994	6,646,260	7,119,126
Other Assets		10,918,710	10,878,968	11,646,935	11,575,506	12,175,162	13,166,373
Current liabilities	Before distribut ion	1,218,314	955,457	1,096,126	1,068,829	1,004,885	1,316,727
	After distribut ion	1,218,314	955,457	1,096,126	1,068,829	1,232,113	-
Non-Current liabilities		4,834,453	5,143,021	5,203,710	5,179,211	4,566,160	4,572,131
Total liabilities	Before distribut ion	6,052,767	6,098,478	6,299,836	6,248,040	5,571,045	5,888,858
	After distribut ion	6,052,767	6,098,478	6,299,836	6,248,040	5,798,273	-
Equity attributable to owners of the parent company		4,865,943	4,780,490	5,347,099	5,327,466	6,604,117	7,277,515
Share capital		2,272,283	2,272,283	2,272,283	2,272,283	2,272,283	2,272,283
Capital surplus		7,792	7,792	7,792	7,792	7,792	7,792
Retained Surplus	Before distribut ion	2,664,915	2,570,264	2,688,839	2,805,902	3,507,899	3,757,858
	After distribut ion	2,664,915	2,570,264	2,688,839	2,805,902	3,280,671	-

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Other Equity	Other Equity	(42,858)	(33,660)	414,374	277,678	852,332	1,275,771
Treasurystock		(36,189)	(36,189)	(36,189)	(36,189)	(36,189)	(36,189)
Non-controlling interests		0	0	0	0	0	0
Equity Total	Before distribut ion	4,865,943	4,780,490	5,347,099	5,327,466	6,604,117	7,277,515
	After distribut ion	4,865,943	4,780,490	5,347,099	5,327,466	6,376,889	-

• Note 1: The accompanying consolidated financial information for the years ended December 31, 2021 has been audited and cleared by our auditors.

• Note 2: The 2021 Annual General Meeting of Shareholders has not yet been held and the distribution of earnings has not yet been determined.

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Condensed Consolidated Statements of Income - Consolidated Financial Statements

Unit: TWD$1,000 dollars

Year Item	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the last five years (Note 1)	Financial information for the year ended March 31, 2011 (Note 1)
	2016	2017	2018	2019	2020
Operating Income	4,362,800	4,467,046	4,776,323	4,656,690	4,980,018	1,534,728
Gross profit	374,559	251,921	185,738	209,701	600,125	147,705
Operating Profit and Loss	23,789	(82,449)	(141,807)	(112,859)	232,694	20,206
Non-operating income and expenses	41,276	72,334	137,385	248,322	169,019	229,753
Income before income tax	65,065	(10,115)	(4,422)	135,463	401,713	249,959
Net income (loss) for the period from continuing operations	(14,626)	(81,431)	(26,411)	117,676	374,097	249,959
Loss from discontinued operations	0	0	(45,383)	(589)	341,055	0
Net income (loss) for the period	(14,626)	(81,431)	(71,794)	117,087	715,152	249,959
Other omprehensive income (net of tax) for the period	(81,697)	(4,022)	12,935	(136,720)	561,499	420,836
Total comprehensive income for the period	(96,323)	(85,453)	(58,859)	(19,633)	1,276,651	673,398
Net income attributable to owners of parent company	(14,626)	(81,431)	(71,794)	117,087	715,152	249,959
Net income attributable to noncontrolling interests	0	0	0	0	0	0
Total omprehensive income attributable to owners of the parent company	(96,323)	(85,453)	(58,859)	(19,633)	1,276,651	673,398
Total omprehensive income and loss attributable to noncontrolling interests	0	0	0	0	0	0
Earnings per share	(0.07)	(0.37)	(0.33)	0.53	3.24	1.13

Note 1: The accompanying consolidated financial information for the years ended December 31, 2021 has been audited and cleared by our auditors.

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Condensed Balance Sheet - Individual Financial Reports

Unit: TWD$1,000 dollars

		Unit: TWD$1,000 dollars	Unit: TWD$1,000 dollars	Unit: TWD$1,000 dollars	Unit: TWD$1,000 dollars	Unit: TWD$1,000 dollars
Year Item		Financial information for the last five years (Note 1)
		2016	2017	2018	2019	2020
Current Assets		1,071,480	1,173,817	1,401,081	1,328,403	1,341,590
Property, plant and equipment		3,942,457	3,851,937	3,645,994	3,458,318	3,367,983
Intangible assets		0	0	0	0	0
Other Assets		3,434,453	3,008,381	3,749,318	3,760,328	4,461,111
Total Assets		8,448,390	8,034,135	8,796,393	8,547,049	9,170,684
Current liabilities	Before distribution	1,048,753	872,729	1,020,905	993,074	939,739
	After distribution	1,048,753	872,729	1,020,905	993,074	1,166,967
Non-Current liabilities		2,533,694	2,380,916	2,428,389	2,226,509	1,626,828
Total liabilities	Before distribution	3,582,447	3, 253,645	3,449,294	3,219,583	2,566,567
	After distribution	3,582,447	3,253,645	3,449,294	3,219,583	2,793,795
Equity attributable to owners of the parent company		4,865,943	4,780,490	5,347,099	5,327,466	6,604,117
Share capital		2,272,283	2,272,283	2,272,283	2,272,283	2,272,283
Capital surplus		7,792	7,792	7,792	7,792	7,792
Retention Surplus	Before distribution	2,664,915	2,570,264	2,688,839	2,805,902	3,507,899
	After distribution	2,664,915	2,570,264	2,688,839	2,805,902	3,280,671
Other Equity		(42,858)	(33,660)	414,374	277,678	852,332
Treasurystock		(36,189)	(36,189)	(36,189)	(36,189)	(36,189)
Non-controlling interests		0	0	0	0	0
Total equity	Before distribution	4,865,943	4,780,490	5,347,099	5,327,466	6,604,117
	After distribution	4,865,943	4,780,490	5,347,099	5,327,466	6,376,889

Note 1: The financial information of the Company for the preceding year has been audited by CPA.

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Condensed Consolidated Income Statement - Individual Financial Reports

Unit: TWD$1,000 dollars

	Unit: TWD$1,000 dollars	Unit: TWD$1,000 dollars	Unit: TWD$1,000 dollars	Unit: TWD$1,000 dollars	Unit: TWD$1,000 dollars
Year Item	Financial information for the last five years (Note 1)
	2016	2017	2018	2019	2020
Operatingrevenue	3,766,874	3,858,689	4,365,960	4,456,187	4,408,155
Gross profit from operations	285,806	206,861	135,265	129,257	461,363
Operating profit or loss	28,612	(37,992)	(127,370)	(142,967)	151,313
Non-operating income and expenses	36,431	27,849	77,542	277,778	578,807
Netprofit before tax	65,043	(10,143)	(49,828)	134,811	730,120
Continuing business units	(14,626)	(81,431)	(71,794)	117,087	715,152
Net income (loss) for theperiod	0	0	0	0	0
Loss from iscontinued operations	(14,626)	(81,431)	(71,794)	117,087	715,152
Net income (loss) for theperiod	(81,697)	(4,022)	12,935	(136,720)	561,499
Other comprehensive income (net of tax) for theperiod	(96,323)	(85,453)	(58,859)	(19,633)	1,276,651
Total comprehensive income for theperiod	(14,626)	(81,431)	(71,794)	117,087	715,152
Net income attributable to owners of theparent company	0	0	0	0	0
Net income attributable to	(96,323)	(85,453)	(58,859)	(19,633)	1,276,651
Non-controlling interests	0	0	0	0	0
Total consolidated profit or loss attributable to owners of theparent company	(0.07)	(0.37)	(0.33)	0.53	3.24

Note 1: The financial information of the Company for the preceding year has been audited by CPA.

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(3). Name of accountant and audit opinion for the last five years:

Year	Name	Opinion
2016	YU, SHENG-HO/ LEE ,TZU-HUI	Unqualified opinion and description of other matters
2017	YU, SHENG-HO/ LEE ,TZU-HUI	Unqualified opinion and description of other matters
2018	YU, SHENG-HO/ LEE ,TZU-HUI	Unqualified opinion and description of other matters
2019	CHEN, CHENG-CHIEN HUANG, YUNG-HUA	Unqualified opinion and description of other matters
2020	CHEN, CHENG-CHIEN HUANG, YUNG-HUA	Unqualified opinion and description of other matters

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2 . Five-Year Financial Analysis:

Financial Analysis - Consolidated Financial Reporting

Item	Year (Note 1)	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years	Current year ended March 31, 2021	Note
		2016	2017	2018	2019	2020
Financial Structure％	Debt to assets ratio	55.43	56.06	54.09	53.98	45.76	44.73
	Long-term capital to property, plant and equipment	229.29	243.09	275.99	292.23	317.10	337.85
Solvency ％	Current Ratio	124.64	160.72	166.54	173.76	199.65	192.89
	Quick Ratio	56.58	92.18	108.30	115.99	133.80	134.50
	Interest coverage multiple	2.77	0.74	(0.76)	5.91	21.28	67.82	Note 1
Operating Capabilities	Receivables turnover rate (times)	10.42	8.20	6.87	7.06	7.93	7.65
	Average collection days	35.02	44.51	53.12	51.69	46.02	47.68
	Inventory turnover rate (times)	5.43	5.94	7.42	7.35	7.38	8.61
	Average sales days	67.21	61.45	49.19	49.65	49.45	42.38
	Turnover rate of accounts payable(times)	9.70	10.14	9.49	8.15	8.62	8.46
	Property, plant and equipment turnover rate (times)	1.03	1.09	1.25	1.30	1.41	1.75
	Total assets turnover rate (times)	0.40	0.41	0.41	0.40	0.41	0.48
Profitability	Return on Assets(%)	0.15	(0.46)	(0.43)	1.21	6.16	1.99	Note 2
	Return on equity (%)	(0.30)	(1.69)	(1.42)	2.19	11.99	3.60	Note 2
	Net income before income tax to paid-in capital (%)	2.86	(0.45)	(2.19)	5.96	17.68	11.00	Note 1
	Net Income Ratio(%)	(0.34)	(1.82)	(1.50)	2.51	14.36	16.29	Note 2
	Earningsper share(NT$)	(0.07)	(0.37)	(0.33)	0.53	3.24	1.13	Note 2
Cash Flow	Cash flow ratio (%)	(9.14)	3.60	19.83	34.15	43.34	3.80	Note 3
	Cash Flow Allowance Ratio (%)	7.24	8.66	8.95	33.14	106.47	189.46	Note 4
	Cash reinvestment ratio (%)	(0.90)	0.27	1.69	2.81	3.28	0.37
Leverag e	Operating leverage	34.28	(10.26)	(4.08)	(6.41)	4.28	0.50	Note 5
	Financial leverage	(1.83)	0.68	0.85	0.80	1.09	1.23	Note 5
Reasons for changes in financial ratios for the last two years. (The analysis is exempted if the change is less than 20%) Note 1: The Consolidated Company's net income before tax for the current year increased significantly compared with the net income before tax for 2019, so the positive ratio increased. Note 2: The Consolidated Company's net income for FY109 was after-tax and increased significantly compared with that of FY108, so the positive ratio increased. Note 3: Cash inflow from operating activities increased in 2020 compared to 2019, so the positive ratio increased slightly. Note 4: The Consolidated Company's cash flow from operating activities increased significantly and capital expenditures decreased in the last five years, so the positive ratio increased. Note 5: The Consolidated Company's operating income less variable costs increased in 2020 compared to 2019, and thepositive ratio increased slightlybecause of the operatingincome.

• Note 1: The Company's consolidated financial information for the preceding year and the first quarter of 2021 is based on information that was audited or reviewed by the accountants.

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Financial Analysis - Individual Financial Reports

Item	Year	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Financial analysis for the last five years (Note 1)	Note
		2016	2017	2018	2019	2020
Financial Structure ％	Debt to assets ratio	42.40	40.50	39.21	37.67	27.99	Note 1
	Long-term capital to property, plant and equipment	187.69	185.92	213.26	218.43	244.39
Solven cy％	Current Ratio	102.17	134.50	137.24	133.77	142.76
	Quick Ratio	42.02	78.42	89.24	87.76	96.06
	Interest coverage multiple	2.99	0.71	(0.79)	5.94	38.31	Note 2
Operating Capabilities	Receivables turnover rate (times)	10.04	7.59	6.45	6.89	7.34
	Average collectiondays	36.36	48.09	56.55	52.97	49.72
	Inventory turnover rate (times)	6.13	6.63	8.81	9.32	9.08
	Payables turnover rate (times)	9.35	9.75	9.54	8.12	8.05
	Average sales days	59.55	55.07	41.44	39.16	40.19
	Property, plant and equipment turnover rate (times)	0.96	1.00	1.20	1.29	1.31
	Total assets turnover rate (times)	0.45	0.48	0.50	0.52	0.48
Profitability	Returnon Assets (%)	0.14	(0.63)	(0.58)	1.61	8.26	Note 3
	Returnonequity (%)	(0.30)	(1.69)	(1.42)	2.19	11.99	Note 3
	Net income before income tax to paid-in capital (%)	2.86	(0.45)	(2.19)	5.93	32.13	Note 2
	NetIncomeRatio (%)	(0.39)	(2.11)	(1.64)	2.63	16.22	Note 3
	Earnings pershare (NT$)	(0.07)	(0.37)	(0.33)	0.53	3.24	Note 3
Cash Flow	Cash flow ratio (%)	(24.47)	(1.87)	18.59	31.39	42.77	Note 4
	Cash Flow Allowance Ratio (%)	3.44	3.01	0.58	15.61	75.00	Note 5
	Cash reinvestment ratio (%)	(2.69)	(0.17)	1.98	3.23	4.05	Note 4
~~L~~e ver ag ~~e~~	Operatingleverage	22.89	(19.82)	(5.27)	(6.86)	6.14	Note 6
	Financial leverage	(7.05)	0.52	0.82	0.84	1.15	Note 6
Reasons for changes in financial ratios for the last two years. (Analysis is waived if the change is less than 20%) Note 1: The ratio decreased due to the repayment of loans, which resulted in a decrease in the balance of long- term and short-term loans. Note 2: The positive ratio increased because the net income before tax increased significantly compared with the net income before tax in 2019. Note 3: The positive ratio increased because the Company's net income after tax increased significantly in 2020 compared to 2019. Note 4: The Company's cash inflow from operating activities increased significantly in 2020 compared to 2019, and although long-term investments and working capital increased slightly, the positive ratio still increased. Note 5: The Company's cash flow from operating activities increased significantly and capital expenditures decreased in the last five years, so the positive ratio increased. Note 6: Although the Company's operating income less variable costs decreased in 2020 compared to2019, the positive ratio increased slightlybecause of the operatingincome.

• Note 1: The calculation of the Company's financial information for the preceding year is based on information audited and certified by the accountants.

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The formula for calculating the financial analysis items is as follows.

1. Financial Structure

2. (1) Debt to asset ratio = Total liabilities / Total assets.

3. (2) Long-term capital to property, plant and equipment = (total equity + non-current liabilities) / net property, plant and equipment.

4. Solvency

5. (1) Current ratio = Current assets / Current liabilities.

6. (2) Quick ratio = (current assets - inventories - prepaid expenses) / current liabilities.

7. (3) Interest coverage = Net income before income tax and interest expense / Interest expense for the period.

8. Management capability

9. (1) Turnover rate of accounts receivable (including accounts receivable and notes receivable arising from operations) = Net sales / Average balance of accounts receivable (including accounts receivable and notes receivable arising from operations) for each period.

10. (2) Average collection days = 365/receivable turnover rate.

11. (3) Inventory turnover rate = Cost of goods sold / average inventory amount.

12. (4)Accounts payable (including accounts payable and bills payable arising from operations) turnover rate = Cost of goods sold / average accounts payable for each period

The balance of payments (including accounts payable and bills payable arising from operations).

• (5)Average sales days = 365 / Inventory turnover rate.

• (6)Turnover rate of property, plant and equipment = Net sales / Average net property, plant and equipment.

• (7) Total Asset Turnover = Net Sales / Average Total Assets.

• Profitability

• (1) Return on assets = [Profit and loss after tax + interest expense × (1 - tax rate)] / Average total assets.

• (2) Return on equity = Profit or loss after tax / average total equity.

• (3) Net profit margin = profit or loss after tax / net sales.

• (4) Earnings per share = (Profit or loss attributable to owners of the parent company - preferred stock dividends) / weighted-average number of shares outstanding.

5. Cash flow

• (1) Cash flow ratio = Net cash flow from operating activities / Current liabilities.

• (2) Net cash flow fair ratio = Net cash flow from operating activities for the last five years / (capital expenditures + increase in inventories + cash dividends) for the last five years.

• (3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividends) / (gross property, plant and equipment + long-term investments + other noncurrent assets + working capital).

• Leverage.

• (1) Operating leverage = (net operating revenues - variable operating costs and expenses) / operating income.

• (2) Financial leverage = Operating income / (Operating income - interest expense).

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

Ocean Plastic

Audit Report

This is to certify that the 2020 Business Report, Earning Distribution and certified 2020 Parent Company Only Nab consolidated Financial Statements are audited by the Committee accrding to article 14 of Security TransactionAct and Article 219 of Company Act.

To 2021 Shareholders’ Meeting

Convenor of Audit Committee: LIN, CHAO-MING

M a r c h 26 , 2 0 2 1

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1. Financial Statements in the Most Recent Year: Please refer to annex 1.

2. Parent company only financial statements audited by CPAs for the most recent year: Please refer to annex 2.

3. The effect on the financial position of the Company and its affiliates in the most recent year and as of the date of printing of the annual report, if there were any financial turnover difficulties: None

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VII. Review of Financial Conditions, Operating Results, and Risk Management

1. Analysis of Financial Status:

Comparative Analysis of Financial Position

Unit: TWD$1,000 dollars

			Unit: TWD$1,000 dollars	Unit: TWD$1,000 dollars
Year Item	2020	2019	Differences
			Amount	%
Current assets	2,006,284	1,857,147	149,137	8.03
Property, plant and equipment	3,522,618	3,595,365	(72,747)	(2.02)
Intangible assets	0	0	0	0
Other Assets	6,646,260	6,122,994	523,266	8.55
Total Assets	12,175,162	11,575,506	599,656	(5.18)
Current liabilities	1,004,885	1,068,829	(63,944)	(5.98)
Non-current liabilities	4,566,160	5,179,211	(613,051)	(11.84)
Total liabilities	5,571,045	6,248,040	(676,995)	(10.84)
Share Capital	2,272,283	2,272,283	0	0
Capital Fund	7,792	7,792	0	0
Retention Surplus	3,507,899	2,805,902	701,997	25.02
Other adjustments to shareholders' equity	816,143	241,489	574,654	237.96
Total shareholders' equity	6,604,117	5,327,466	1,276,651	23.96

The main reasons for the significant changes in assets, liabilities and equity in the last two years and their effects:

1. Retained earnings: The significant increase in net income in 2020 compared to 2019.

2. Other adjustments to stockholders' equity: As a result of the recognition of the fair value valuation gain on equity in 2020

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2 . Analysis of Operation Results:

(1)Comparative Analysis of Operating Results Unit: TWD$1,000 dollars

Year Item	2020	2019	Increase (decrease)	Variation％
Net Operating Income Operating Costs Gross Profit Operating Expenses Net operating income (loss) Non-operating income and expenses Income (loss) before income taxes Income tax expense Gain or loss on discontinued operations Net income (loss) for the period Other comprehensive income (net of tax) Total comprehensive income for theperiod	4,980,018 4,379,893 600,125 367,431 232,694 169,019 401,713 27,616 341,055 715,152 561,499 1,276,651	4,656,690 4,446,989 209,701 322,560 (112,859) 248,322 135,463 17,787 (589) 117,087 (136,720) (19,633)	323,328 (67,096) 390,424 44,871 345,553 (79,303) 266,250 9,829 341,644 598,065 698,219 1,296,284	6.94 (1.51) 186.18 13.91 (306.18) (31.94) 196.55 55.26 (58,004.07) 510.79 (510.69) (6,602.58)

The main reasons for the significant changes in operating income, net operating income and net income before income tax for the last two years:

1. Reasons for changes of 20% or more:

2. 1Increase in gross profit: In the second half of 2020, due to the strong international demand for PVC powder, although the average selling price declined slightly, the price of VCM raw materials decreased significantly and the sales volume increased, resulting in a significant increase in gross profit for the period compared to the same period last year.

3. 2Decrease in non-operating income and expenses: The decrease was mainly due to the decrease in valuation gain on financial assets and dividend income recognized in 2020, as well as the loss on disposal of property, plant and equipment in the current period.

4. 3Decrease in other comprehensive income or loss: The decrease was due to the recognition of fair value gain on equity interest in 2020.

5. The expected sales volume and its basis, the possible impact on the company's future financial operations, and the plan to deal with it:

The expected sales volume is evaluated based on the actual sales performance in recent years, the industry environment and market changes. Expected revenue to increase slightly in 2021, but global economy affected by unstabilized pneumonia outbreak. With the government's continued promotion of economic revitalization programs, the overall economic prosperity of the country has been boosted.

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In the future, we will strengthen the development of new products and research to develop high value-added products, and fully grasp the source of raw material supply to ensure that there is no shortage of sources in order to achieve the production goals. In terms of sales, we will develop new customers and markets to increase revenue, and in particular, we will keep abreast of international financial and economic information, keep an eye on price trends, increase our market share, and strengthen our after-sales services. In addition to revenue, it is the Company's goal to improve its operations and profits, to comply with government regulations, and to fulfill its corporate social responsibility.

3. Analysis of Cash Flow

(1) Liquidity analysis for the last two years

Year Item	2020	2019	Increase (decrease) ratio %
Cash Flow Ratio	43.34	34.15	26.91 %(Note 1)
Cash Flow Fair Ratio	106.47	33.14	221.27 %(Note 2)
Cash reinvestment ratio	3.28	2.81	16.73 %
Analysis of changes in the percentage of increase or decrease. Note 1: The cash inflow from operating activities of the Consolidated Company increased in 2020 ompared to2019, so the positive ratio increased slightly. Note 2: The Consolidated Company's cash flow from operating activities increased significantly and capital expenditures decreased in the last fiveyears,so thepositive ratio increased.

(2 ) Cash flow analysis for the coming year Unit: TWD$1,000 dollars

Beginning of the period Cash Balance	Year-round self- service Net cash flow from activities	Annual Cash Inflow	Cash surplus (Deficiency) Amount	Remedies for cash shortage	Remedies for cash shortage
				Investment Plan	Financial Plan
413,217	368,825	-18,511	763,531	-	-
Annual cash flow sex analysis. The net cash inflow of $368,825 thousand from operating activities in the coming year is based on the estimated profitability of the Consolidated Company in 2021 and capital expenditures for the purchase of equipment, resulting in a cash outflow of $18,511 thousand and a cash surplus of $763,531 thousand at the end of the period, which is used as working capital except for repayment of bank loans.

The net cash inflow of $368,825 thousand from operating activities in the coming year is based on the estimated profitability of the Consolidated Company in 2021 and capital expenditures for the purchase of equipment, resulting in a cash outflow of $18,511 thousand and a cash surplus of $763,531 thousand at the end of the period, which is used as working capital except for repayment of bank loans.

4. Major Capital Expenditure Items: None.

5. Investment Policy in Last Year, Main Causes for Profits or Losses, Improvement Plans and the Investment Plans for the Coming Year:

Last year, under the impact of the covid-19 epidemic, many Taiwanese companies thought of dispersing their production plants in China and the uncertainty of the entire upstream and downstream supply chain of raw materials. However, Raw Materials Dept. is making good profit under the balance

81

of VCM raw material procurement and sales, and Building Materials Dept. is also making stable profit under the domestic inflationary pressure of the real estate boom, except for the out-of-control environment of the epidemic situation in Europe and the U.S., which has not yet improved. However, we have adopted a conservative and prudent investment policy, with the industries related to the Company's core business as the main investment consideration, resulting in stable profits last year.

The Company will invest in the storage industry, investment companies and manufacturing industry, etc. The Company will invest in the future depending on the development status of the industry, and will hold the reinvestment business related to the industry for a long period of time, while the reinvestment of optoelectronic materials and idle land assets will be adjusted and developed in a timely manner depending on the general environment, in order to enrich the capital requirements for the future development and transformation of the Company's industry.

6. Analysis of Risk Management:

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

• Interest rates: the government to maintain a low interest rate environment to stimulate economic growth, the future depending on the level of interest rates to adjust the financing instruments.

• Exchange rate: The Company has a small shortage of U.S. dollars, so it is less affected by changes in the exchange rate and currently uses natural hedging and forward foreign exchange locking when the exchange rate is more volatile.

• Inflation: The Company has not experienced any significant impact on the Company's profit or loss due to inflation.

• (2 ) The policy of engaging in high-risk, highly leveraged investments, lending of funds to others, endorsement of guarantees and derivative transactions, the main reasons for profit or loss and future measures:

• The Company does not engage in high-risk, highly leveraged investments.

• The Company does not engage in hedging derivatives.

• The Company's loan of funds to others and endorsement of guarantees are handled in accordance with the "Procedures for Handling Loan of Funds and Endorsement of Guarantees" established by the Company.

• (3) Future research and development plans and estimated research and development costs:

• Future R&D plan :

  • 1PVC medical material pellet development (NonP plasticizer): cytotoxicity test and product application development test.

  • 2PVC foam pellets development.

  • 3Microcapsule material development and application testing.

  • 4TPE imitation wood combustion resistant material development.

• (4) Impact of significant domestic and foreign policy and legal changes on the Company's financial operations and measures taken in response: None

• (5) Impact of technological changes and industry changes on the Company's financial operations and measures to address them: None

82

• (6) Impact of corporate image change on corporate crisis management and response measures: None

• (7) Expected benefits, possible risks and contingencies of the merger and acquisition: None

• (8) Expected benefits, possible risks and contingency measures for plant expansion: None

• (9) Risks associated with concentrations of imports or sales and measures to address them: None

• (10) The impact, risk and response measures of a significant transfer or change in shareholding of directors, supervisors or substantial shareholders holding more than 10% of the shares of the Company: None

• (11) Impact of the change in operating right on the Company, risks and response measures: None

• (12 ) For litigation or non-litigation events, the Company and its directors, supervisors, general manager, persons in charge, substantial shareholders holding more than 10% of the shares, and affiliated companies should disclose the facts of the dispute, the amount of the subject matter, the date of commencement of the litigation, the principal parties involved in the litigation, and the price of the securities if the outcome of the litigation, non-litigation or administrative dispute is likely to have a significant impact on shareholders' equity or the price of the securities. Disposition as of the date of the annual report: None

• (13) Other significant risks and responses: None

• Other important matters: None

VIII. Special Disclosure

83

1. Summary of Affiliated Companies:

• (1). Report on Consolidated Operations of Affiliated Companies:

• Affiliate Organization Chart

==> picture [45 x 15] intentionally omitted <==

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

OPC
----- End of picture text -----

==> picture [422 x 523] intentionally omitted <==

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

100% 100%
HongDa Investment
UNIVERSE
Corp.
100% 60.76%
FINE
Changhsin Hsinye ENVIRONMENT
Co., Ltd. TECHNOLOGIES
CO., LTD.
100% 100%
Shengyang
FERMAT
Development Co.,
EnterPrises
Ltd.
100%
OCEAN
GROUP
100% 100% 100%
OPC SAGE RISE FUTURE
HOLDINGS HOLDINGS INT’L LTD.
OCEAN Dongguan Ocean
PLASTICS(Huizhou) Innovative Leather
CO., LTD. Products Co., Ltd.
100% 100%
----- End of picture text -----

84

2. Basic information of affiliated companies Mar.31, 2021

Unit: 10,000 dollars

Name	Established on	Address	Paid-in Capital	Business Scope
Changhsin Hsinye Co., Ltd.	87.12.24	5F, No. 310, Juguang Road, Taipei, Taiwan	290,086	Investment
HongDa Investment Corp.	87.12.14	5F, No. 310, Juguang Road, Taipei, Taiwan	1.9 million	Investment
FERMAT ENTERPRISES	89.6.27	P.O. BOX3321 Road Town, Trotola, British Virgin Islands	US$ 45	Investment
UNIVERSE ENTERPRISES	90.4.2	P.O. BOX3152 Road Town, Trotola, British Virgin Islands	US$ 300	Trade
OCEAN GROUP	93.3.8	Portcullis Chambers P.Q.Box1225 Apia Samoa	US$3,290	Investment
SAGE HOLDINGS	93.3.17	Portcullis Chambers P.Q.Box1225 Apia Samoa	US$ 2,500	Investment
RISE FUTURE INT’L LTD.	93.12.16	NO.4, Franky Building Providence Industrial Estate, Mahe, Seychelles	US$ 745	Investment
OPC HOLDINGS	89.8.25	P.O. BOX3152 Road Town, Trotola, British Virgin Islands	US$ 45	Investment
OCEAN PLASTICS(Huizhou )CO.,LTD.	93.11.8	Fulong Industrial Zone, Shatian Town, Huiyang District, Huizhou City, Guangdong Province	US$ 2,500	Manufacturin g
OCEAN PLASTICS(Donggu an) CO., LTD.	94.9.12	Weiya Industrial Zone, Lamma Village, Daojiao Town, Dongguan City, Guangdong Province	US$ 745	Manufacturin g
Shengyang Development Co., Ltd.	104.1.5	5F, No. 310, Juguang Road, Wanhua District, Taipei, Taiwan	100	Land Development
FINE ENVIRONMENT TECHNOLOGIES CO.,LTD.	92.5.7	6F, No. 310, Juguang Road, Taipei, Taiwan	1,650	Sales

1. Information on the same shareholders who are presumed to be in a controlling and subordinate relationship: None

85

4. The business of the affiliated companies and their relationship with each other

Industry	Name	Relationship
Investment Co.	Changhsin Hsinye Co.,Ltd.	None
	HongDa Investment Corp.	〞
	FERMAT ENTERPRISES	〞
	OCEAN GROUP	〞
	SAGE HOLDINGS	〞
	RISE FUTURE INT’L LTD.	〞
	OPC HOLDINGS	〞
Trading	UNIVERSE ENTERPRISES	〞
Manufacturing	Ocean Plastics(Huizhou)Co.,Ltd.	〞
	Dongguan Ocean Innovative Leather Products Co.,Ltd.	〞
Land Development	ShengyangDevelopment Co., Ltd.	〞
Sales	FINE ENVIRONMENT TECHNOLOGIES CO.,LTD.	〞

5. Information on Directors, Supervisors and General Managers of affiliated companies

Mar.31, 2021

			Mar.31,2021	Mar.31,2021
Name	Title	Representative	Shareholding
			Shares	Hodingratio
Changhsin Hsinye Co., Ltd.	Chairman	Ocean Plastics Co., Ltd. Rept.: CHENG, YU- FENG	290,086,000	100.00%
	Director	Ocean Plastics Co., Ltd. Rept.: CHEN, FANG- YAO
	Director	Ocean Plastics Co., Ltd. Rept.: LIN, CHIN-HUA
	Supervisor	Ocean Plastics Co., Ltd. Rept.: WANG, YI-HO
HongDa Investment Corp.	Chairman	Ocean Plastics Co., Ltd. Rept.: CHIU, CHUN-FU	19,000,000	100.00%
	Director	Ocean Plastics Co., Ltd. Rept.: CHEN, FAN- CHING
	Supervisor	Ocean Plastics Co., Ltd. Rept.: LEE, SHAN- HSUN
OCEAN GROUP	Managing Director	Ocean Plastics Co., Ltd. Rept.: SHEN, CHAO- PIN	32,900,000	100.00%
UNIVERSE ENTERPRISES	Chairman	Ocean Plastics Co., Ltd. Rept.: WANG, YI-HO	3,000,000	100.00%
	Director	Ocean Plastics Co., Ltd. Rept.: LU, CHIEN-AN
FERMAT ENTERPRISES	Chairman	Ocean Plastics Co., Ltd. Rept.: WANG, YI-HO	450,000	100.00%
	Director	Ocean Plastics Co., Ltd. Rept.: LU, CHIEN-AN

86

Name	Title	Representative	Shareholding	Shareholding
			Shares	Hodingratio
SAGE HOLDINGS	Managing Director	OCEAN GROUP Rept.: WANG, YI-HO	25,000,000	100.00%
RISE FUTURE INT’L LTD.	Managing Director	OCEAN GROUP Rept.: WANG, YI-HO	7,450,000	100.00%
OPC HOLDINGS	Chairman	OCEAN GROUP Rept.: WANG, YI-HO	450,000	100.00%
	Director	OCEAN GROUP Rept.: LU, CHIEN-AN
Dongguan Ocean Innovative Leather Products Co., Ltd.	Managing Director	RISE FUTURE INT’L LTD. Rept.: PENG, HONG-CHAN	7,450,000	100.00%
	Supervisor	RISE FUTURE INT’L LTD. Rept.: WANG, YI-HO
OCEAN PLASTICS(Huizhou ) CO., LTD.	Chairman	SAGE HOLDINGS Rept.: SHEN, CHAO-PIN	25,000,000	100.00%
	Director	SAGE HOLDINGS Rept.:TAN, KIN-MEN
	Director	SAGE HOLDINGS Rept.: CHEN, CHIN-HO
Shengyang Development Co., Ltd.	Chairman	Chang-Hsin-Hsin-Yeh Co., Ltd. Rept.: CHENG, YU-FENG	100,000	100.00%
	Director	Chang-Hsin-Hsin-Yeh Co., Ltd. Rept.: CHEN, JIEN-DA
	Director	Chang-Hsin-Hsin-Yeh Co., Ltd. Rept.: LEE, SHAN-HSUN
	Supervisor	Chang-Hsin-Hsin-Yeh Co., Ltd. Rept.: CHANG, YU-HUI
FINE ENVIRONMENT TECHNOLOGIES CO., LTD.	Chairman	Ocean Plastics Co., Ltd. Rept.: HSU, MING- LIEN	1,002,533	60.76%
	Director	Hung-Ta Investment Co., Ltd. Rept.: JIAN, RUEI-HSIANG	647,467	39.24%
	Supervisor	LU, JIEN-AN	-	-

87

6. Business Overview of Affiliates

De.31, 2020 Unit: TWD$1000 dolars

Company Name	Capitalizat ion	Assets Total Value	Liabilities Total amount	Net value	Business Revenue	Business Interests	Profit or loss for the period (after tax)	Earnings per share (after tax)/(NT$)
Changhsin Hsinye Co.,Ltd.	2,900,860	5,848,097	2,940,366	2,907,731	34,327	(661,165)	142	0.00
HongDa Investment Corp.	190,000	341,553	1,114	340,439	49,713	39,649	38,530	2.03
FERMAT ENTERPRISE	13,886	21,720	0	21,720	0	0	(689)	(1.53)
UNIVERSE ENTERPRISE	93,032	60,092	350	59,742	78,328	837	(2,946)	(0.98)
OCEAN GROUP	1,069,438	664,185	197,056	467,129	653,305	89,244	440,023	13.37
SAGE HOLDINGS	812,643	476,674	0	476,674	0	0	79,164	3.17
RISE FUTURE INT’L LTD.	242,168	(55,672)	0	(55,672)	0	0	(985)	(0.13)
OPC HOLDINGS	14,628	46,074	0	46,074	0	0	361,848	804.11
OCEAN PLASTICS(Huizh ou)CO.,LTD.	812,643	571,850	95,179	476,671	618,175	96,688	79,164	3.17
OCEAN PLASTICS(Dong guan)CO.,LTD.	242,168	46,203	101,877	(55,674)	35,131	(7,444)	(985)	(0.13)
FINE ENVIRONMENT TECHNOLOGIE S CO.,LTD.	16,500	15,297	667	14,630	3,405	8	(11)	(0.01)
Shengyang Development Co., Ltd.	1,000	535	0	535	0	0	0	0

(2). Consolidated financial statements of affiliated companies: None

(3). Relationship Report: None

88

2 . Private Placement Securities in the Most Recent Years: None

3. The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years

Unit: TWD$1000 dolars/Share/ ％

Subsidiaries	Received Capitalization	Funding Source	Our Company Sharehold ing ratio	Obtain or Disposition Date	Number of shares acquired and amount	Number of shares disposed of and amount	Investm ent Profit and Loss	Number and amount of shares held as of the date of printing of the annual report	Set the pledge situation	Our company is Subsidiary Endorsement Guaranteed Amount	Amount loaned by the Company to subsidiaries
Changhsin Hsinye Co., Ltd.	2,900,860	OCEAN PLASTIC S CO., LTD.	100﹪	-	-	-	-	2,939,062 shares 69,362 thousand	None	640,420	None
HongDa Investment Corp.	190,000	〃	100﹪	-	-	-	-	3,603,654 shares 85,046 thousand	〃	〃	〃

4. Other necessary supplementary items: None

1. For the most recent year and as of the printing date of the annual report, events that have a significant impact on shareholders' equity or the price of securities as defined in Article 36, Paragraph 2 of the Securities and Exchange Act: None

89

Stock Code:1321

Appendix 1

Ocean Plastics Co., Ltd. and Subsidiaries

Consolidated Financial Statements

With Independent Auditors’ Report

For the Years Ended December 31, 2020 and

2019

Address: 5、6F., No. 310, Juguang Rd., Wanhua Dist., Taipei City 108, Taiwan (R.O.C.) Telephone: (02)2308-2131

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

90

Table of contents

Contents 1. Cover Page 2. Table of Contents 3. Representation Letter 4. Independent Auditors’ Report 5. Consolidated Balance Sheets 6. Consolidated Statements of Comprehensive Income 7. Consolidated Statements of Changes in Equity 8. Consolidated Statements of Cash Flows 9. Notes to the Consolidated Financial Statements (1) Company history (2) Approval date and procedures of the consolidated financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses due to major disasters (11) Subsequent Events (12) Others (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information

Page

1 2 3 4 5 6 7 8 9 9 9～10 10～26 27 28～59 60 61 61 61 61 62 63～65 66 66～67 67 68～70

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Representation Letter

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

Company name: Ocean Plastics Co., Ltd. Chairman: Kim-Min Tan Date: March 26, 2021

92

Independent Auditors’ Report

To the Board of Directors of Ocean Plastics Co., Ltd.:

Opinion

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

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

Basis for Opinion

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

Other Matters

We did not audit the financial statements of Ocean Group Ltd., Fermat Enterprises Ltd. and Universe Enterprises Ltd., subsidiaries of the Group, nor Chun Pin Enterprise Co., Ltd., an associate of the Group, which represented investment in another entity accounted for using the equity method. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for Ocean Group Ltd., Fermat Enterprises Ltd., Universe Enterprises Ltd., and Chun Pin Enterprise Co., Ltd., is based solely on the reports of other auditors. The financial statements of Ocean Group Ltd., Fermat Enterprises Ltd. and Universe Enterprises Ltd. reflect total assets constituting 6% of consolidated total assets at December 31, 2020 and 2019, and total operating revenues constituting 12% and 5% of consolidated total operating revenues for the years then ended, respectively. The investment in Chun Pin Enterprise Co., Ltd. accounted for using the equity method constituting 3% and 4% of consolidated total assets at December 31, 2020 and 2019, respectively, and the related share of profit of associates and joint ventures accounted for using the KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member equity method constituting 19% and 61% of consolidated total profit (loss) before tax for the years then firms affiliated with KPMG International Limited, a private English company limited by guarantee. ended, respectively.

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

93

Key Audit Matters

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

1. Inventory valuation

2. Please refer to note 4(h) for the accounting policy on “ Inventory” and note 6(f) for components of inventories and expenses.

Description of key audit matter:

The Group's inventories are mainly midstream and downstream products of petrochemicals (PVC) and related products, and their criteria of obsolescence varies from type to type. Hence, there is a risk that the cost will exceed the net realizable value. The measurement of the net realizable value and obsolescence of inventories is uncertain because of involvement of management's subjective judgement. Therefore, we have considered inventory valuation to be a key audit matter. How the matter was addressed in our audit:

Our principal audit procedures in this area included, among others: understanding inventory valuation policies to ensure that the process of inventory valuation was in conformity with the accounting policies, which included sampling the sources of the market prices adopted in inventory valuation to ascertain the appropriateness, and sampling inventories to test the accuracy of the aging report; reviewing the estimate of allowance for inventory loss in prior periods, and comparing it with the method and assumption used in estimating allowance for inventory loss for the current period, so as to assess the reasonableness; inspecting the sales after the balance sheet date, in order to ensure that inventory valuation was appropriate.

• 2.Revenue recognition

• Please refer to note 4(o) for the accounting policy on “Revenue recognition” and note 6(v) for information about revenue recognition.

Description of key audit matter:

The Group engages in manufacturing and selling plastics materials and downstream plastic products (plastic construction tubing, plastic cloth, plasticized synthetic leather, etc.). Considering the high trade volume and decentral customers of the Group, the control of products transfers at different time points might impact the time of revenue recognition. Therefore, revenue recognition has been identified as a key matter in our audit.

How the matter was addressed in our audit:

Our principal audit procedures in this area included, among others: evaluating the reasonableness of revenue recognition; understanding and testing the internal control of sales and collection cycles to ascertain if the implement was operative; checking individual sales transactions, customer orders, shipping certificates, invoices and other documents; delving into the periods before and after the balance sheet date, in order to evaluate if the period of revenue recognition tallied with the trade condition and shipping documents.

94

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed 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 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 auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we 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.

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

95

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

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Cheng-Chien Chen and Yung-Hua Huang.

KPMG

Taipei, Taiwan (Republic of China) March 26, 2021

Notes to Readers

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

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

96

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

Ocean Plastics Co., Ltd. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) $ 1110 Current financial assets at fair value through profit or loss (note 6(b)) 1137 Current financial assets at amortized cost (note 6(d)) 1170 Notes and trade receivables, net (note 6(e)) 130X Inventories (note 6(f)) 1460 Non-current assets held for sale, net (note 6(g) and 12(b)) 1470 Other current assets (note 6(l)) Non-current assets: 1510 Non-current financial assets at fair value through profit or loss (note 6(b)) 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 1535 Non-current financial assets at amortised cost, net (note6(d)) 1550 Investments accounted for using equity method (note 6(h)) 1600 Property, plant and equipment (note 6(i) and 8) 1755 Right-of-use assets (note 6(j) and 7) 1760 Investments property, net (note 6(k) and 8) 1900 Other non-current assets (note 6(l)) Total assets $		December 31, 2020		December 31, 2019 Amount % December 31, 2020 Liabilities and Equity Amount % Current 460,375 4 2100 Short-term borrowings (note 6(n) and 8) $ 200,000 2 199,868 2 2170 Notes and trade payables 490,131 4 - - 2200 Other payables 223,654 2 559,707 4 2220 Other payables to related parties (note 7) 3,204 - 511,897 4 2260 Liabilities included in disposal groups classified as held for sale (note 6(g)) - - 47,048 - and 12(b)) 78,252 1 2300 Other current liabilities (note 6(m)(p) and 7) 33,729 - 1,857,147 15 2320 Long-term liabilities, current portion (note 6(o) and 8) 54,167 - 1,004,885 8 40,827 - Non-Current liabilities: 690,314 7 2540 Long-term borrowings (note 6(o) and 8) 2,981,931 24 2570 Deferred tax liabilities 1,428,647 12 21,600 - 2640 Net defined benefit liability, non-current (note 6(r)) 108,107 1 404,932 3 2670 Other non-current liabilities, others (note 6(p)(r) and 7) 47,475 - 3,595,365 32 4,566,160 37 79,956 1 Total liabilities 5,571,045 45 4,782,714 41 Equity attributable to owners of parent (note 6(t)): 102,651 1 3100 Capital stock 2,272,283 19 9,718,359 85 3200 Capital surplus 7,792 - 3300 Retained earnings 3,507,899 29 3400 Other equity 852,332 7 3500 Treasury shares (36,189 ) - Total equity 6,604,117 55 11,575,506 100 Total liabilities and equity $ 12,175,162 100	December 31, 2019 Amount % liabiliti 250,000 2 514,459 5 147,373 1 3,540 - 45,290 - 54,000 - 54,167 - 1,068,829 8 3,547,212 31 1,413,140 12 102,665 1 116,194 1 5,179,211 45 6,248,040 53 2,272,283 20 7,792 - 2,805,902 24 277,678 3 (36,189 ) - 5,327,466 47 11,575,506 100
		Amount %
		413,217 3 264,727 2 33,693 - 663,174 5 510,217 5 - - 121,256 2 2,006,284 17 16,237 - 1,251,957 10 21,585 - 407,945 3 3,522,618 30 51,513 - 4,850,298 40 46,725 - 10,168,878 83 12,175,162 100

97

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Ocean Plastics 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 Common Share)

4100 Operating revenues, net 5000 Operating costs (note 6(f) and 7) 5900 Gross profit from operation 6000 Operating expenses (note 6(e)(k)(l)(m)(p)(r) and 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Impairment gain and reversal of impairment loss determined in accordance with IFRS 9 (note) 6000 Total operating expenses 6900 Net operating income (loss) 7000 Non-operating income and expenses: 7100 Interest income (note 6(x)) 7010 Other income (note 6(x)) 7020 Other gains and losses, net (note 6(x)) 7050 Finance costs (note 6(x)) 7060 Share of profit of associates accounted for using equity method (note 6(h)) Total non-operating income and expenses Profit from continuing operations before income tax 7950 Less: Income tax expenses (note 6(s)) Profit from continuing operations Profit and loss of discontinued operations: 8101 Profit (loss) from discontinued operations after income tax (note 2(b)) Profit 8300 Other comprehensive income: 8310 Items that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that will be reclassified to profit or loss 8361 Exchange differences on translation 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income Total comprehensive income Earnings per share (NT dollars) (note 6(u)) 9750 Basic earnings per share Basic earnings per share from continuing operations Basic earnings per share from discontinued operations 9850 Diluted earnings per share Diluted earnings per share from continuing operations Diluted earnings per share from discontinued operations
	$ $
	$ $

98

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

Equity attributable to owners of parent

Balance at January 1, 2019 Appropriation and distribution of retained earnings: Profit Other comprehensive income Total comprehensive income Balance at December 31, 2019 Profit Other comprehensive income Total comprehensive income Other changes in capital surplus: Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2020	Share capital Ordinary shares	Share capital Ordinary shares	Capital surplus		Retained earnings	Retained earnings	Retained earnings		Total other equity interest	Total other equity interest	Total other equity interest	Total other equityinterest	Total other equityinterest	Treasury shares	Treasury shares	Total equity
									Exchange differences on translation of foreign financial statements		Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
					Special reserve	Unappropriated retained earnings	Total retained earnings
		$2,272,283 - - - 2,272,283 - - - - 2,272,283	7,792		2,978,245	(289,406	) 2,688,839		(31,983 ) - (12,141 ) (12,141 ) (44,124) - 4,717		446,357		414,374 - (136,696 ) (136,696 ) 277,678 - 569,513 569,513 5,141 852,332	(36,189 ) - - - (36,189) - -		5,347,099 117,087 (136,720 ) (19,633 ) 5,327,466 715,152 561,499
			- -		- -	117,087 (24					- (124,555	)
			-		-	117,063					(124,555	)
					2,978,245 - - - - 2,978,245						321,802 - 564,796 564,796 5,141 891,739
						707,138	707,138		4,717					-	1,276,651 - ) 6,604,117
						(5,141	) (5,141	)	-					-
	$					529,654 3,507,899			(39,407	)				(36,189

99

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Ocean Plastics Co., Ltd. and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit from continuing operations before tax Profit (loss) from discontinued operations, before tax Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Expected credit loss Net gain on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of associates and joint ventures accounted for using equity method Loss (gain) on disposal of property, plant and equipment Property, plant and equipment transferred to expenses Loss (gain) on disposal of non-current assets classified as held for sale Loss (gain) on disposal of investments Total adjustments to reconcile (loss) profit Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Trade receivable Inventories Other current assets Other financial assets Other operating assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Notes payable Trade payable Other payable Other payable to related parties Provisions Other current liabilities Net defined benefit liability Operating liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments	2020 $ 401,713 341,055 742,768 207,488 3,859 (70,562) 47,479 (4,475) (29,459) (77,137) 3,351 803 (341,054) 11,965 (247,742 ) 2,470 (109,795) 1,680 (64,039) (14,831) 69,571 (114,944 ) 14,970 (38,111) 13,783 66,758 (336) 1,057 (8,503) (1,789) (69,552 ) (21,723 ) (136,667 ) (384,409 )	2019
		135,463 (589 ) 134,874 212,998 299 (88,127) 57,397 (6,335) (45,948) (82,361) (18,642) 1,289 - (1,365 ) 29,205 1,302 169,093 8,967 (4,378) - (69,571 ) 105,413 8,732 66,096 (124,827) (41,471) (1,841) (1,496) 54,935 (902) 69,552 28,778 134,191 163,396

100

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(English Translation of Consolidated Financial Statements Originally Issued in Chinese) Ocean Plastics Co., Ltd. and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash inflow (outflow) generated from operations Interest received Dividends received Interest paid Income taxes refund (paid) Net cash flows from operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at amortised cost Acquisition of financial assets at fair value through profit or loss Proceeds from disposal of financial assets at fair value through profit or loss Proceeds from disposal of non-current assets classified as held for sale Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in refundable deposits Acquisition of investment properties Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Decrease in short-term loans Proceeds from long-term debt Repayments of long-term debt Payment of lease liabilities Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Cash and cash equivalents were present below: Cash and cash equivalents in the consolidated statement of balance sheets Cash and cash equivalents transferred to non-current assets held for sale (or disposal groups) Cash and cash equivalents at end of period		2020	2019
	$ $	358,359 4,475 103,584 (47,628) 16,725 435,515 (33,678) (12,729) 34,210 347,300 (114,591) 7,970 1,724 (74,614 ) 155,592 (50,000) 658,886 (1,224,167) (27,701 ) (642,982 ) 4,717 (47,158) 460,375 413,217	298,270 6,335 119,463 (58,749) (365 ) 364,954 (21,600) - 11,588 - (103,106) 103,352 497 (98,109 ) (107,378 ) (27,657) 752,210 (864,167) (26,442 ) (166,056 ) (12,141) 79,379 382,434 461,813
	$ $	413,217 - 413,217	460,375 1,438 461,813

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

Ocean Plastics Co., Ltd. and Subsidiaries

Notes to the Consolidated Financial Statements

For the years ended December 31, 2020 and 2019

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

(1) Company history

OCEAN PLASTICS CO., LTD. (hereinafter referred to as the “Company”) was incorporated in June 1965 as a company limited by shares under the Company Act of the Republic of China (R.O.C.), and merged with Yee Fong Chemical & Industrial Co., Ltd. The Company was registered in 5F & 6F., No. 310, Juguang Rd., Wanhua Dist., Taipei City. The consolidated financial statements of the Company as of the year ended December 31, 2020 comprise the Company and subsidiaries (together referred to as the “Group” and individually as the “Group entities”). Please refer to note 14 for related information on the Group entities’ main business activities.

The major business activities of the Company are the manufacture and sale of plastics.

The Company’s common shares were listed on the Taiwan Stock Exchange (TWSE) in January 1999.

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

These consolidated financial statements were authorized for issue by the Board of Directors on March 26, 2021.

(3) New standards, amendments and interpretations adopted:

• (a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2020:

• Amendments to IFRS 3 “Definition of a Business”

• Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”

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

• Amendments to IFRS 16 “COVID-19-Related Rent Concessions”

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

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its consolidated financial statements:

• Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”

• Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark －

• Reform Phase 2”

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

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

Standards or	Standards or				Effective date per
Interpretations				Content of amendment	IASB
Amendments	to	IAS	1	The amendments aim to promote consistency January 1,
“Classification	of Liabilities			2023 in applying the requirements by helping
as Current or Non-current”				companies determine whether, in the
				statement of balance sheet, debt and other
				liabilities with an uncertain settlement
				date should be classified as current (due
				or potentially due to be settled within one
				year) or non-current.
				The amendments include clarifying the
				classification requirements for debt a
				company might settle by converting it
				into equity.

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

The Group does not expect the other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

(4) Summary of significant accounting policies:

The significant accounting policies presented in the consolidated financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

• (a) Statement of compliance

• These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations” ) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, R.O.C.

• (b) Basis of preparation

• (i) Basis of measurement Except for the following significant accounts, the consolidated financial statements have been prepared on a historical cost basis:

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

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

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

• (ii) Functional and presentation currency

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

• (c) Basis of consolidation

• (i) Principles of preparation of the consolidated financial statements The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances. Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

• (ii) List of subsidiaries in the consolidated financial statements

Name of Name of Principal investor Subsidiary activity The Company Hong Da Investment Co., General investing Ltd. The Company Chang Xin Co., Ltd General investing The Company Fine Environment Technologies Co., Ltd Wholesale of plastic products The Company Universe Enterprises Ltd Trading Company The Company Fermat Enterprises Ltd Investment holding The Company Ocean Group Ltd Investment holding Ocean Group Ltd Sage Holdings Ltd Investment holding

Shareholding December December 31, 2020 31, 2019 Note

100 % 100 % 100 % 100 % 100 % 100 % (Note 1) 100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 %

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Name of Name of Principal investor Subsidiary activity Ocean Group Ltd OPC Holdings Ltd Investment holding Ocean Group Ltd Rise Future International Investment holding Ltd Sage Holdings Ltd Ocean Plastics (Hui Zhou) Plastic products Co., manufacturing OPC Holdings Ltd Hunan Ocean Wide Plastics Ltd Plastic products manufacturing Rise Future International Ocean Plastics (Dong Plastic products Ltd Guan) Co., Ltd manufacturing Chang Xin Co., Ltd Shen Yang Development Real estate Co., Ltd. development activities

Shareholding December December 31, 2020 31, 2019 Note

100 % 100 % 100 % 100 % 100 % 100 % - % 100 % (Note 2) 100 % 100 % 100 % 100 %

Note 1: The Company and Hong Da Investment Co., Ltd. hold 100% equity interest in Fine Environment Technologies Co., Ltd. Note 2: Disposal of the equity in Hunan Kunyuan Plastic Chemical Co., Ltd. on March 16, 2020.

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

• (d) Foreign currencies

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

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

  • 1) an investment in equity securities designated as at fair value through other comprehensive income;

  • 2) financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

  • 3) qualifying cash flow hedges to the extent that the hedges are effective.

• (ii) Foreign operations

  • The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

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

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

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

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

• (i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

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

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

• (iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

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

An entity shall classify a liability as current when:

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

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

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

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

• (f) Cash and cash equivalents

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

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(g) Financial Instruments

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

• (i) Financial assets

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

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

• 1) Financial assets measured at amortized cost A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

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

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

• These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Fair value through other comprehensive income (FVOCI) A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

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

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

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrumentby-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss. Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Group’s right to receive payment is established.

• 3) Fair value through profit or loss (FVTPL) All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. Trade receivables that the Group intends to sell immediately or in the near term are measured at FVTPL; however, they are included in the ‘ accounts receivables’ line item. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

• These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

• 4) Impairment of financial assets The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI and contract assets.

The Group measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

• ‧ debt securities that are determined to have low credit risk at the reporting date; and

• ‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment as well as forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

The Group considers a financial asset to be in default when the financial asset is more than 180 days past due or the debtor is unlikely to pay its credit obligations to the Group in full.

The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade which is considered to be BBB- or higher per Standard & Poor’ s, Baa3 or higher per Moody’ s or twA or higher per Taiwan Ratings’.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ credit- impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

• ‧ significant financial difficulty of the borrower or issuer;

• ‧ a breach of contract such as a default or being more than 180 days past due;

• ‧ the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• ‧ it is probable that the borrower will enter bankruptcy or other financial reorganization; or

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‧ the disappearance of an active market for a security because of financial difficulties. Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

• 5) Derecognition of financial assets

• The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

• (ii) Financial liabilities and equity instruments

• 1) Classification of debt or equity Debt and equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

• 2) Equity instrument An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

• 3) Treasury shares When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

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• 4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

• 5) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

• 6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

• (h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

• (i) Non-current assets held for sale & Discontinued operations

• (i) Non-current assets held for sale Non-current assets or disposal groups comprising assets and liabilities that are highly probable to be recovered primarily through sale rather than through continuing use, are reclassified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group’ s accounting policies. Thereafter, generally, the assets or disposal groups are measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is first allocated to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to assets not within the scope of IAS 36 – Impairment of Assets. Such assets will continue to be measured in accordance with the Group’s accounting policies.

  • Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortized or depreciated, and any equity-accounted investee is no longer equity accounted.

• (ii) Discontinued operations

  • A discontinued operation is a component of the Group’s business that either has been disposed, or is classifies as held for sale, and

  • 1) represents a separate major line of business or geographic area of operations;

  • 2) is part of a single coordinated plan to dispose of a separate major line of business or geographic area of operations; or

  • 3) is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held for sale.

• (j) Investment in associates Associates are those entities in which the Group has significant influence, but not control or joint control, over their financial and operating policies.

• Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

• The consolidated financial statements include the Group’ s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Group, from the date on which significant influence commences until the date on which significant influence ceases. The Group recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

Gains and losses resulting from transactions between the Group and an associate are recognized only to the extent of unrelated Group’s interests in the associate.

When the Group’ s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

• (k) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss. Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

• (l) Property, plant and equipment

• (i) Recognition and measurement

  • Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses. If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

• (ii) Subsequent expenditure

• Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

• (iii) Depreciation Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Land is not depreciated.

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The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

1) buildings 5~50 years 2) machinery equipment 3~20 years 3) other facility 2~20 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (iv) Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner occupied to investment property.

• (m) Leases

• (i) Identifying a lease

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

• 1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and

• 2) the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

• 3) the customer has the right to direct the use of the asset throughout the period of use only if either:

• the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or

• the relevant decisions about how and for what purpose the asset is used are predetermined and:

  • － the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions;

    • or

  • － the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.

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• (ii) As a lessee

• The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. Lease payments included in the measurement of the lease liability comprise the following:

• 1) fixed payments, including in substance fixed payments;

• 2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• 3) amounts expected to be payable under a residual value guarantee; and

• 4) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

• 1) there is a change in future lease payments arising from the change in an index or rate; or

• 2) there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or

• 3) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

• 4) there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or

• 5) there are any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

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When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

• (iii) As a lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease. If an arrangement contains lease and non-lease components, the Group applies IFRS15 to allocate the consideration in the contract.

• (n) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and investment properties and biological assets, measured at fair value, less costs) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

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Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

• (o) Revenue from contracts with customers

• Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below.

• (i) Sale of goods

  • The Group manufactures and sells plastic materials and products. The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied. A receivable is recognized when the goods are delivered as this is the point in time that the Group has a right to an amount of consideration that is unconditional.

• (ii) Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.

• (p) Employee benefits

• (i) Defined contribution plans Obligations for contributions to defined contribution plans are expensed as the related service is provided.

• (ii) Defined benefit plans

  • The Group’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

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The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

• (iii) Other long-term employee benefits

The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in which they arise.

• (iv) Short-term employee benefits

  • Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

• (q) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

• Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

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• (i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

• (ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• (iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

• (i) the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and

• (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

• 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date, and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

• (r) Earnings per share

• The Group discloses the Company’ s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

• (s) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

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• (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

• The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

• The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

• (a) Judgment of whether the Group has substantive control over its investees Holding 44.62% of the outstanding voting shares in Chun Pin Enterprise Co., Limited., the Group was not the largest shareholder. The Group obtained neither more than half of Chun Pin Enterprise’s Board seats, nor more than half of the voting rights at a shareholders’ meeting. Therefore, it was determined that the Group only had significant influence on Chun Pin Enterprise.

Information about assumptions and estimation uncertainties that has a significant risk of resulting in a material adjustment within the next financial year is as follows:

• (a) Inventory valuation

• Inventories are measured at the lower of cost or net realizable value. The Group assesses value of inventories that are worn, obsolete, and unmarketable at the reporting date, and writes down the cost of inventories to their net realizable value. Inventory valuation is based on expected market demand in a period of foreseeable future which may fluctuate by rapid change in industry. For the estimation of inventory valuation, please refer to note 6(f) for details.

The Group’s accounting policies include measuring financial and non-financial assets and liabilities at fair value through profit or loss.

The Company’ s financial instrument valuation group conducts independent verification on fair value by using data sources that are independent, reliable, and representative of exercise prices. This financial instrument valuation group also periodically adjusts valuation models, conducts back testing, renews input data for valuation models, and makes all other necessary fair value adjustments to assure the rationality of fair value. The Company strives to use market observable inputs when measuring assets and liabilities. Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

• (a) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

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

• (c) Level 3: inputs for the assets or liability that are not based on observable

market data. Please refer to Note 6(y) for assumptions used in measuring fair value.

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(6) Explanation of significant accounts:

• (a) Cash and cash equivalents

Revolving funds and cash on hand Demand deposits and check deposits Cash and cash equivalents in the consolidated statement of cash flows	December 31, 2020 $ 920 412,297 $ 413,217	December 31, 2020 $ 920 412,297 $ 413,217	December 31, 2019 733 459,642
		413,217	460,375

Please refer to note 6(y) for the exchange rate risk, interest rate risk, and sensitivity analysis of the financial assets and liabilities of the Group.

The cash and cash equivalents as of December 31, 2020 and 2019, including deposits held by subsidiaries in China, had amounted to $118,097 thousand, and $143,893 thousand, respectively. The deposit can only be remitted pursuant to the procedures prescribed by the foreign exchange control laws and regulations.

(b) Financial assets at fair value through profit or loss

(c) Financial assets at fair value through other comprehensive income December 31, 2020 Equity investments at fair value through other comprehensive income: Unlisted domestic stock－Taiwan VCM Corporation $ 1,130,019 Unlisted domestic stock－Others 115,048 Unlisted foreign stock 6,890 Total $ ~~1,251,957~~ December 31, 2020 Current financial assets designated at fair value through profit or loss: Listed domestic stock $ 244,032 Fund investment 20,695 Subtotal 264,727 Non-current financial assets designated at fair value through profit or loss Listed domestic stock 11,517 Fund investment 4,720 Subtotal 16,237 Total $ 280,964	December 31, 2019
	186,446 13,422
	199,868
	10,322 30,505
	40,827
	240,695
	December 31, 2019
	567,320 116,104 6,890
	~~690,314~~

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(d) Financial assets measured at amortized cost

Financial assets measured at amortized cost
Domestic and foreign time deposit-current Domestic and foreign time deposit-non-current			December 31, 2020 33,693 21,585	December 31, 2019
		$		-
		$		21,600

The Group has assessed that these financial assets are held-to-maturity to collect contractual cash flows, which consist solely of payments of principal and interest on principal amount outstanding. Therefore, these investments were classified as financial assets measured at amortized cost.

• (i) During 2020 and 2019, the Group held domestic and foreign time deposits, with the weighted- average interest rates of 0.41%~3.3% and 2.75%, which mature between March and November 2021, and on November 2022, respectively.

• (ii) The disclosure instruments were not pledged as collateral as of December 31, 2020 and 2019.

• (e) Notes and trade receivables

Notes receivable from operating activities Trade receivables Less: Loss allowance	December 31, 2020 $ 47,777 622,937 (7,540 ) $ 663,174	December 31, 2019
		50,247 513,142 (3,682 )
		559,707

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information, including macroeconomic and relevant industry information. The loss allowance provisions were determined as follows:

Current 1 to 180 days past due More than 180 days past due		December 31, 2020	December 31, 2020
			Weighted- average loss rate - 10% 100%	Loss allowance provision - 3,768 3,772 7,540

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Current 1 to 180 days past due More than 180 days past due	December 31, 2019	December 31, 2019	December 31, 2019
	Gross carrying amount $ 523,338 39,860 191 $ 563,389	Weighted- average loss rate - 7~13% 100%	Loss allowance provision
			- 3,491 191
			3,682

The movement in the allowance for notes and trade receivables were as follows:

Balance at January 1 Impairment losses recognized Impairment losses reversed Amounts written off Foreign exchange gains/(losses) Balance at December 31	2020	2019 11,074 299 - (7,377) (314 ) 3,682
	$ 3,682 5,460 (1,601) - (1 ) $ 7,540

The aforementioned notes and trade receivables of the Group were not pledged as collateral as of December 31, 2020 and 2019.

(f) Inventories

Raw materials Work in progress Finished goods	December 31, 2020 $ 244,165 28,285 237,767 $ 510,217	December 31, 2019
		275,822 28,042 208,033
		511,897

The Group’ s relevant inventory details recognized in operating costs in 2020 and 2019 are as follows:

Reversal of write downs Idle capacity Revenue from sale of scraps and others		2020 (4,460) 122,300 3,153 120,993	2019
	$		(8,021 159,856 1,461
			153,296

As of December 31, 2020 and 2019, the Group had not provided any inventories as collateral for its loans.

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• (g) Non-current assets held for sale (or disposal groups)

On November 7, 2019, the Board of Directors of the Group passed a resolution to sell Hunan Ocean Wide Plastics Ltd., thus the assets and the liabilities related to Hunan Ocean Wide Plastics Ltd. were reclassified as a disposal group held for sale, after which Hunan Ocean Wide Plastics was presented as a discontinued operation because it conformed to the definition thereof. The transaction was completed on March 16, 2020. As of December 31, 2019, assets and liabilities relating to the non current assets held for sale (or disposal groups) had amounted to $47,048 thousand and $45,290 thousand, respectively. The details were as follows:

Cash and cash equivalents Trade receivables Prepayments Property, plant and equipment Right-of-use asset Investment property Assets of disposal groups Other payables Other current liabilities Liabilities of disposal groups		December 31, 2019 $ 1,438 5,669 9 11,451 18,941 9,540 $ 47,048
		$ (29) (45,261 ) $ (45,290 )

• (h) Investments accounted for using equity method

A summary of the Group’ s financial information for investments accounted for using the equity method at the reporting date is as follows:

December 31, 2020 December 31, 2019 Associates $ 407,945 404,932 (i) Associates Associates which are material to the Group consisted of the followings: Main operating Proportion of shareholding location/ and voting rights Name of Associates ChunPin Enterprise Co., Ltd Nature of Relationship with the Group Wholesale of chemical feedstock and products Registered country of the Company Taiwan December 31, 2020 44.62 % December 31, 2019 44.62 %	December 31, 2020 December 31, 2019 Associates $ 407,945 404,932 (i) Associates Associates which are material to the Group consisted of the followings: Main operating Proportion of shareholding location/ and voting rights Name of Associates ChunPin Enterprise Co., Ltd Nature of Relationship with the Group Wholesale of chemical feedstock and products Registered country of the Company Taiwan December 31, 2020 44.62 % December 31, 2019 44.62 %	December 31, 2019 404,932	December 31, 2019 404,932
	December 31, 2020 44.62 %
			44.62 %

The following consolidated financial information of significant associates has been adjusted according to individually prepared IFRS financial statements of these associate.

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Chun Pin Enterprise Co., Ltd

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Operating revenue Profit from continuing operations Other comprehensive income Total comprehensive income Share of net assets of associates as of January 1 Comprehensive income attributable to the Group Dividends received from associates Share of net assets of associates as of December 31		December 31, 2020 $ 794,810 207,248 (86,914) (784 ) $ 914,360	December 31, 2020 $ 794,810 207,248 (86,914) (784 ) $ 914,360	December 31, 2019 734,569 268,791 (94,754) (1,001 ) 907,605
			2020 420,247 172,894 - 172,894	2019 426,507 184,602 - 184,602
		$ $
				2019 396,086 82,361 (73,515 ) 404,932

(ii) Guarantee

As of December 31, 2020 and 2019, the Group had not provided any investment accounted for using equity method as collaterals for its loans.

(i) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the years ended December 31, 2020 and 2019, were as follows:

Cost or deemed cost: Balance on January1, 2020 Additions Transfer from construction in progress and testing equip Disposal Transfer to expense Effect of movement in exchange rates Balance on December 31, 2020	Lands $ 1,483,366 - - - - - $ 1,483,366	Buildings and constructions 1,399,223 493 9,226 - - (117 )	Machinery and equipment Ot 2,430,913 791 20,913 (15,123	her facilities 1,476,738 716 41,598 ) (4,901) - ) (33 )	Construction in progress 22,217 115,230 (71,737) - (803) 144 65,051	Total 6,812,457 117,230 - (20,024)
		- (117	- (279			(803) (285 )
		1,408,825	2,437,215	1,514,118		6,908,575

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Lands Balance on January 1, 2019 $ 1,507,113 Additions - Transfer from construction in progress and testing equip - Reclassification to investment property - Transfer to non-current assets held for sale (or disposal groups) - Disposal (23,747) Transfer to expense - Effect of movement in exchange rates - Balance on December 31, 2019 $ 1,483,366 Depreciation and impairments losses: Balance on January 1, 2020 $ - Depreciation and impairment - loss for the year Disposal - Effect of movement in exchange rates - Balance on December 31, 2020 $ - Balance on January 1, 2019 $ - Depreciation and impairment loss for the year - Reclassification to investment property Transfer to non-current assets held - for sale (or disposal groups) - Disposal - Effect of movement in exchange rates - Balance on December 31, 2019 $ - Carrying amount: Balance on December 31, 2020 $ 1,483,366 Balance on January 1, 2019 $ 1,507,113 Balance on December 31, 2019 $ **1,483,366 **	Buildingsand constructions 1,490,801 - 1,692 (81,701) - (5,554) - (6,015 )	Machinery and equipment 2,452,738 83 66,011 - - (73,322) - (14,597 )	Other facilities 1,506,771 124 32,188 - (37,832) (21,335) - (3,178 )	Constructionin progress 54,605 89,160 (120,607) - - - (1,289) 348 22,217 - - - -	Total 7,012,028 89,367 (20,716) (81,701) (37,832) (123,958) (1,289) (23,442 ) 6,812,457
	1,399,223	2,430,913 1,785,022 76,513 (3,877) (246 )	1,476,738 1,058,244 69,501 (4,826) (37 )
	373,826 31,850 - (13 )				3,217,092 177,864 (8,703) (296 ) 3,385,957 3,189,185 180,278 (68,145) (26,381) (39,248) (18,597 ) 3,217,092 3,522,618 3,822,843 3,595,365
	405,663	1,857,412 1,743,600 77,409 - - (23,165) (12,822 )	1,122,882 1,028,592 69,851 - (26,381) (11,099) (2,719 )	- - - - - - -
	416,993 33,018 (68,145) - (4,984) (3,056 )
	373,826	1,785,022	1,058,244	-
	1,003,162 1,073,808 1,025,397	579,803 709,138 645,891	391,236 478,179 418,494	65,051 54,605 22,217

Part of the lands subjected to urban land readjustment plan or were agricultural land, which were not allowed to be held by the Group were held temporarily by third party and registered as mortgage to the Group. Part of the forementioned agricultural lands are held to earn rental income, therefore, the Group reclassified them to investment property. As of December 31, 2020 and 2019, carrying amount of above mentioned lands (including those been reclassified to investment property) were both $135,881 thousands and the Group is applying for alternation of land use and will transfer their title to the Group once the process of urban land readjustment and alternation of land use complete.

During 2019, one land and building was reclassified to investment property (see Note 6(k)). As of December 31, 2020 and 2019, the collateral details of long-term borrowings and credit agreements, please refer to note 8.

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(j) Right-of-use-assets

The Group leases many assets including land and buildings and vehicles. Information about leases for which the Group as a lessee was presented below:

Cost: A Balance at January 1, 2020 Effect of movement in exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Additions Transfer to non-current assets held for sale (or disposal groups) Effect of movement in exchange rates Balance at December 31, 2019 ccumulated depreciation: Balance at January 1, 2020 Depreciation for the year Effect of movement in exchange rates Balance at December 31, 2020 Balance at January 1, 2019 Depreciation for the year Transfer to non-current assets held for sale (or disposal groups) Effect of movement in exchange rates Balance at December 31, 2019 Carrying amount Balance at December 31, 2020 Balance at December 31, 2019		Lands $ 31,722 (20 ) $ 31,702 $ 52,940 - (19,548) (1,670 ) $ 31,722 $ 2,328 2,547 (2 ) $ 4,873 $ - 3,179 (607) (244 ) $ 2,328 $ 26,829 $ 29,394	Lands $ 31,722 (20 ) $ 31,702 $ 52,940 - (19,548) (1,670 ) $ 31,722 $ 2,328 2,547 (2 ) $ 4,873 $ - 3,179 (607) (244 ) $ 2,328 $ 26,829 $ 29,394	Buildings and constructions 41,308 (10 ) 41,298 41,096 - - 212 41,308 11,470 11,468 33 22,971 - 11,692 - (222 ) 11,470 18,327	Other facilities	Total 107,459 (30 ) 107,429
					34,429 - 34,429 31,026 3,403 - - 34,429 13,705 14,366 1 28,072 - 13,705 - - 13,705 6,357
						125,062 3,403 (19,548) (1,458 ) 107,459
						27,503 28,381 32 55,916
						- 28,576 (607) (466 ) 27,503
						51,513 79,956
			29,394	29,838	20,724
		$

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(k) Investment property

The cost, depreciation, and impairment of the property, plant and equipment of the Group for the years ended December 31, 2020 and 2019, were as follows:

Land Cost : Balance at January 1, 2020 $ 4,764,792 Purchases 74,614 Reclassification (5,787 ) Balance at December 31, 2020 $ 4,833,619 Balance at January 1, 2019 $ 4,664,358 Purchases 98,109 Reclassification from property, plant and equipment - Reclassification from construction in progress 2,325 Transferred to non-current assets held for sale - Effect of changes in foreign exchange rates - Balance at December 31, 2019 $ 4,764,792 Accumulated depreciation and impairment losses: Balance at January 1, 2020 $ - Depreciation for the year - Balance at December 31, 2020 $ - Balance at January 1, 2019 $ - Depreciation for the year - Reclassification from property, plant and equipment - Transferred to non-current assets held for sale - Effect of changes in foreign exchange rates - Balance at December 31, 2019 $ - C arrying amount: Balance at December 31, 2020 $ 4,833,619 Balance at January 1, 2019 $ 4,664,358 Balance at December 31, 2019 $ 4,764,792	Land Cost : Balance at January 1, 2020 $ 4,764,792 Purchases 74,614 Reclassification (5,787 ) Balance at December 31, 2020 $ 4,833,619 Balance at January 1, 2019 $ 4,664,358 Purchases 98,109 Reclassification from property, plant and equipment - Reclassification from construction in progress 2,325 Transferred to non-current assets held for sale - Effect of changes in foreign exchange rates - Balance at December 31, 2019 $ 4,764,792 Accumulated depreciation and impairment losses: Balance at January 1, 2020 $ - Depreciation for the year - Balance at December 31, 2020 $ - Balance at January 1, 2019 $ - Depreciation for the year - Reclassification from property, plant and equipment - Transferred to non-current assets held for sale - Effect of changes in foreign exchange rates - Balance at December 31, 2019 $ - C arrying amount: Balance at December 31, 2020 $ 4,833,619 Balance at January 1, 2019 $ 4,664,358 Balance at December 31, 2019 $ 4,764,792	Land	Land	Buildings	Total 4,783,182 74,614 (5,787 ) 4,852,009
				18,390 - - 18,390 - - 81,701 18,391 (78,893) (2,809 ) 18,390 468 1,243 1,711 - 4,144 68,145 (69,353) (2,468 ) 468 16,679
					4,664,358 98,109 81,701 20,716 (78,893) (2,809 ) 4,783,182 468 1,243 1,711 - 4,144 68,145 (69,353) (2,468 ) 468 4,850,298 4,664,358 4,782,714
	$		4,664,358 4,764,792	- 17,922
	$

Fair value
Balance at December 31, 2020	$	12,364,604
Balance at December 31, 2019	$	9,939,450

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Part of the lands were agricultural land, which's legal title were not allowed to be held by the Group were held temporarily by third party and registered as mortgage to the Group. The Group is applying for alternation of land use for above lands and their title will be transferred to the Group once the process of alternation of land use complete. Please refer to note 6(i) for further details.

As of December 31, 2020 and 2019, the capitalized borrowing costs related to the acquisition of investment real estate were $27,671 and $29,793 thousand, and the capitalization interest rates were 1.41% and 1.66%.

As of December 31, 2020 and 2019, investment property of the Group had been pledged as collateral for long-term borrowings and credit lines, please refer to note 8.

(l) Other current assets and other non-current assets

The other current assets others and other non-current assets of the Group were as follows:

Other current assets Other receivables Current tax assets Prepayments Others Other non-current assets Deferred tax assets Other non-current financial assets Others		December 31, 2020 $ 19,789 348 93,404 7,715 $ 121,256 $ 12,617 14,831 19,277 $ 46,725	December 31, 2019
			14,354 22,687 41,126 85
			78,252
			12,079 69,571 21,001
			102,651

As of December 31, 2020 and 2019, the Group had not provided any other current assets and other non-current assets as collateral for its loans.

• (m) Other current liabilities

The other current liabilities of the Group were as follows:

Lease liabilities-current Unearned sales revenue Others	December 31, 2020 $ 15,595 15,938 2,196 $ 33,729	December 31, 2019
		27,742 15,559 10,699
		54,000

Other current liabilities are expected to be settled within one year.

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(n) Short-term borrowings

The short-term borrowings of the Group were summarized as follows:

Unsecured bank loans Unused short-term credit line Range of interest rates		December 31, 2020 200,000 334,843 1.08~1.16%	December 31, 2019
	$		250,000
	$		295,656
			1.20~1.30%

For the collateral for short-term borrowings, please refer to note 8.

(o) Long-term borrowings

Secured bank loans Less: current portion Total Unused long-term credit lines Secured bank loans Less: current portion Total Unused long-term credit lines	December 31, 2020
	Currency Rate Maturity year	Amount
	TWD 0.95%~1.41% 110.03~120.06 December 31, 2019	$ 3,036,098 (54,167 ) $ 2,981,931
		$	2,873,902
	Currency Rate Maturity year		Amount
	TWD 1.14%~1.66% 109.10~120.06	$ 3,601,379 (54,167 ) $ 3,547,212 $ 2,658,621

For the collateral for short-term borrowings, please refer to note 8.

(p) Leases Liabilities

The lease liabilities of the Group’s were as follows:

Leases Liabilities The lease liabilities of the Group’s were as follows:
Current Non-current For maturity analysis, please refer to note 6 (y).			December 31, 2020 15,595 15,128	December 31, 2019
		$		27,742
		$		30,726

The amounts recognized in profit or loss was as follows:

Interest on lease liabilities

2020	2019 872
$ 798

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The amounts recognized in the statement of cash flows for the Group was as follows:

2020 Total cash outflow for leases $ 28,499	2020	2019
		27,314

The Group leases land, buildings, and raw material storage tanks. The leases run for four to five years. Some leases include an option to renew the lease for an additional period of the same duration at the end of the contract term.

Some leases provide for additional rent payments that are based on changes in local price indices. Some also require the Group to make payments that relate to the property taxes levied on the lessor and insurance payments made by the lessor; these amounts are generally determined annually.

(q) Operating lease

(i) Leases as lessor

The Group leases out its investment property and other facilities. The Group has classified these leases as operating leases.

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

Less than one year One and two years Two and three years Three and four years Four and five years More than five years Total undiscounted lease payment	December 31, 2020 $ 9,169 9,281 9,444 9,560 9,727 89,401 $ 136,582	December 31, 2019 9,070 9,169 9,281 9,444 9,560 104,384 150,908

Rental income from investment properties was $11,328 thousand and $21,491 thousand in 2020 and 2019, respectively.

(r) Employee benefits

• (i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

Present value of the defined benefit obligations $ Fair value of plan assets Net defined benefit liabilities	December 31, 2020 396,840 (288,733 ) $ 108,107	December 31, 2019 415,756 (313,091 )
		102,665

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The Group’s employee benefit liabilities were as follows:

Long-term vacation liability Cash-settled share-based payment liability Total employee benefit liabilities	December 31, 2020 $ 13,699 - $ 13,699	December 31, 2019
		12,784 -
		12,784

The Group makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

1) Composition of plan assets

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Group’ s Bank of Taiwan labor pension reserve account balance amounted to 288,732 thousand as of December 31, 2020. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor. 2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Company were as follows:

Defined benefit obligation at January 1 Current service costs and interest cost (income) Remeasurements loss(gain): －Demographic assumptions －Financial assumptions －Experience adjustment Benefits paid Defined benefit obligations at December 31	2020 $ 415,756 5,622 10,612 74 7,555 (42,779 ) $ 396,840	2019 423,982 7,185 1,066 295 8,019 (24,791 ) 415,756

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3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets as follows:

for the Group were

Fair value of plan assets at January 1 Interest cost (income) Remeasurements of defined benefit liabilities (assets): －Return on plan assets excluding interest income Contribution paid by employer Benefits paid Fair value of plan assets at December 31	2020 $ (313,091) (1,872) (11,010) (5,539) 42,779 $ (288,733 **) **	2019
		(317,596) (2,742) (12,200) (5,344) 24,791
		(313,091 )

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Group were as follows:

Current service costs Net interest of net liabilities for defined benefit obligations Operating cost Selling expenses Administration expenses Research and development expenses		2020 $ 3,125 625 $ 3,750 2020 $ 2,874 138 732 6 $ 3,750	2019
			3,535 908
			4,443
			2019
			3,471 265 695 12
			4,443

• 5) Remeasurement of net defined benefit liability (asset) recognized in other comprehensive income

The Group’ s remeasurements of the net defined benefit liability (asset) recognized in other comprehensive income for the years ended December 31, 2020 and 2019, were as follows:

Accumulated amount at January 1 Recognized during the period Accumulated amount at December 31	2020 $ 118,091 8,014 ~~$~~ ~~126,105~~	2019
		118,068 23
		~~118,091~~

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• 6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increase rate	2020 0.375 % 2.00 %	2019
		0.625 % 2.00 %

The expected allocation payment to be made by the Group to the defined benefit plans for the one-year period after the reporting date is $5,593 thousand. The weighted average lifetime of the defined benefits plans is 7.7 years.

• 7) Sensitivity analysis

When calculating and determining the present value of defined benefit obligations, the Company must use judgments and estimates to determine relevant actuarial assumptions on the balance sheet date, including discount rates, employee turnover rates, and future salary adjustments. Any change in actuarial assumptions may materially affect the amounts of the Company’s defined benefit obligations. If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation in the years 2020 and 2019 shall be as follows:

Impact on defined benefit

	obligation
	Increased Decreased
	0.25%	0.25%
December 31, 2020
Discount rate	7,555	(7,788)
Future salary increasing rate	(7,527)		7,341
December 31, 2019
Discount rate	8,020	(8,274)
Future salary increasing rate	(8,018)		7,813
Reasonably possible changes	at the reporting date to one of the relevant actuarial
assumptions, holding other assumptions constant, would have affected the defined
benefit obligation by the amounts shown above. The method		used	in the
sensitivity analysis is consistent with the calculation of pension liabilities			in the
balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2020 and 2019.

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(ii) Defined contribution plans

The Company and domestic subsidiaries allocates 6% of each employee’ s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act; subsidiaries located in Mainland China contributed to the labor pension personal account in accordance with local regulation. Under these defined contribution plans, the Group contributes a fixed amount without additional legal or constructive obligations.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $11,313 thousand and $10,859 thousand for the years ended December 31, 2020 and 2019, respectively.

(s) Income tax

The components of income tax in the years 2020 and 2019 were as follows:

(i) Income tax expense

The components of income tax in the years 2020 2019 were as follows: and

and
		2020	2019
Current tax expense
Current period	$	12,648	57
Adjustments for prior periods		(1 )	5
Subtotal		12,647	62
Deferred tax expense
Origination and reversal of temporary differences		14,969	17,725
Subtotal		14,969	17,725
Tax expense	$	27,616	17,787
Reconciliation of income tax and profit before tax for	2020	and 2019 is as follows:
		2020	2019
Profit excluding income tax	$	401,713	135,463
Income tax using the Company’s domestic tax rate		176,407	45,029
Tax-exempt income		(43,587)	(39,821)
Non-deductible expenses		2,606	699
Recognition of previously unrecognized tax losses		(21,492)	(9,655)
Current-year losses for which no deferred tax asset
was recognized		249	28,069
Changes in unrecognized temporary differences		(87,619)	(6,539)
Change in provision in prior periods		(1)	5
Additional tax on undistributed earnings		1,053	-
Income tax expense	$	27,616	17,787

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

• (ii) Deferred tax assets and liabilities

• 1) Unrecognized deferred tax assets

Deferred tax assets have not been recognized is respect of the following items:

Tax effect of deductible Temporary Differences The carryforward of unused tax losses Total	December 31, 2020 $ 405,917 51,128 $ 457,045	December 31, 2019
		493,536 93,674
		587,210

The deductible temporary differences are mainly the share of overseas investment losses and deferred benefits recognized by the equity method.

The R.O.C. Income Tax Act and P.R.C. Enterprise Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years and five years for local tax reporting purposes, respectively. Deferred tax assets have not been recognized in respect of these items because it is less than more likely that future taxable profit will be available against which the Group can utilize the benefits therefrom.

As of December 31, 2020, the Company and domestic subsidiaries have not recognized deferred tax asset. The deduction deadline are as follows:

Consolidated entities	Year of loss	Unused tax loss $ 56 760 351 468 856 66,936 128,746 41 16 $ 198,230	Expiry date
Fine Environment Technologies Co., Ltd FFine Environment Technologies Co., Ltd. Fine Environment Technologies Co., Ltd. Fine Environment Technologies Co., Ltd. Fine Environment Technologies Co., Ltd. Ocean Plastics Co., Ltd. Ocean Plastics Co., Ltd. Fine Environment Technologies Co., Ltd. Fine Environment Technologies Co., Ltd. Total	2012 (assessed amount) 2015 (assessed amount) 2016 (assessed amount) 2017 (assessed amount) 2018 (assessed amount) 2018 (assessed amount) 2019 (reported amount) 2020 (reported amount) 2020 (estimated amount)		2022 2025 2026 2027 2028 2028 2029 2030 2030
		$

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

As of December 31, 2020, the deduction period of the subsidiaries in Mainland China unused tax losses for which no deferred tax assets were recognized are as follows:

Year of loss	Unused tax loss	Unused tax loss	Expiry date
2016 2017 2018 2019 2020 Total	$ 2,703 19,988 14,308 7,967 962 $ 45,928		2021 2022 2023 2024 2025
		45,928

• 2) Recognized deferred tax assets and

liabilities Deferred tax assets:

Unrealized loss on inventory write-downs Balance at January 1, 2020 $ 11,404 Recognized in profit or loss (893 ) Balance at December 31, 2020 $ 10,511 Balance at January 1, 2019 $ 13,009 Recognized in profit or loss (1,605 ) Balance at December 31, 2019 $ 11,404		Others 675 1,431 2,106 169 506 675	Total 12,079 538 12,617
			13,178 (1,099 ) 12,079

Deferred tax liabilities:

Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020 Balance at January 1, 2019 Recognized in profit or loss Balance at December 31, 2019	Reserve for land value increment tax $ 1,350,538 - $ 1,350,538 $ 1,350,538 - $ 1,350,538	Difference in the useful life of property, plant, and equipment 62,602 15,507 78,109 45,976 16,626 62,602	Total
			1,413,140 15,507 1,428,647
			1,396,514 16,626 1,413,140

The tax returns of the Company and domestic subsidiaries for the years ended 2018 were assessed by the Taipei National Tax Administration, and the tax returns of the subsidiaries in China for the years ended 2019 have already reported to the local tax authority.

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(t) Capital and other equity

As of December 31, 2020 and 2019, the number of authorized ordinary shares were 4,000,000 thousand shares with par value of $10 per share, and 227,228 thousand ordinary shares were issued. All issued shares were paid up upon issuance.

(i) Capital surplus

The balances of capital surplus were as follows:

Share premium Treasury share transactions Total	December 31, 2020 $ 680 7,112 $ 7,792	December 31, 2019 680 7,112
		7,792

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(ii) Retained earnings

The Company's Articles of Incorporation stipulate that Company's net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, unless the amount of the legal reserve is already equal to or greater than the total paid-in capital. Additionally, the Company shall allocate special reserve taking into consideration the operating needs and statutory requirements. Any remaining profit, together with any prior-period undistributed retained earnings, shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

In accordance with the Company’ s dividend policy, if there is profitability for the year, dividends can be distributed in three forms—cash dividend, common stock dividend, or capital surplus transferred to common stock. Distribution shall not be less than 20 percent of the income after deducting legal reserve and special reserve, and only when the Company has significant investment plan or intends to improve financial structure can common stock dividends or capital surplus transferred to common stock substitute for cash dividend. However, cash dividends shall account for at least 10 percent of dividend distribution.

• 1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

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• 2) Special reserve

In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions. As of December 31, 2020 and 2019, the balance of special earnings reserve were $2,978,245 thousand.

• 3) Earnings distribution

The appropriations of earnings for 2019 and 2018 had been approved during the shareholders’ meeting on June 22, 2020 and June 29, 2019, respectively. The operating result showed net loss after tax; consequently, no surplus distribution is planned.

• (iii) Treasury shares

As of December 31, 2020. the company's treasury stock balance is $36,189 thousand. Before the amendment to the R.O.C. Company Act on November 2001, the Company’ s subsidiaries, Chang Xin Co., Ltd. and Hong Da Investment Co., Ltd., acquired $2,939 thousand and $3,604 thousand of the Company’s shares, respectively.

In accordance with the requirements of the Securities and Exchange Act, treasury shares held by the Company shall not be pledged, and no shareholder rights are granted before their transfer.

• (u) Earnings per share

• (i) Basic earnings per share

The details on the calculation of basic earnings per share and diluted earnings per share of the Company as follows:

Basic earnings per share Profit of the Company for the year－continuing operations Profit/(loss) of the Company for the year－ discontinued operations Profit attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (thousand share)	2020	2020	2019 117,676 (589 ) 117,087
	$ 374,097 341,055 $ 715,152 220,686
			220,286

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Basic earnings per share (NT dollars) 2020 From continuing operations $ 1.69 From discontinued operations 1.55 $ 3.24 Diluted earnings per share Profit of the Company for the year－continuing operations $ 374,097 Profit/(loss) of the Company for the year－ discontinued operations 341,055 Profit attributable to ordinary shareholders of the Company 715,152 Weighted average number of ordinary shares (thousand share) 220,686 Effects of dilutive potential ordinary shares (in thousands of shares) (i) Details of revenue 2020 Primary geographical markets: Taiwan China Taiwan $ 2,019,788 56,189 India 1,299,490 - United States 376,551 283,927 China 52,625 242,164 Others 636,588 12,696 $ 4,385,042 594,976 Major products: Plastic materials $ 2,683,721 - Plastic products 1,666,310 594,976 Stocks and funds 35,011 - $ 4,385,042 594,976 Effect of employee share bonus Weighted average number of ordinary shares (diluted) 235 (thousand share) 220,921 Diluted earnings per share (NT dollars) From continuing operations ~~$~~ ~~1.69~~ From discontinued operations 1.55 $ 3.24 (v)Revenue from contracts with customers	Basic earnings per share (NT dollars) 2020 From continuing operations $ 1.69 From discontinued operations 1.55 $ 3.24 Diluted earnings per share Profit of the Company for the year－continuing operations $ 374,097 Profit/(loss) of the Company for the year－ discontinued operations 341,055 Profit attributable to ordinary shareholders of the Company 715,152 Weighted average number of ordinary shares (thousand share) 220,686 Effects of dilutive potential ordinary shares (in thousands of shares) (i) Details of revenue 2020 Primary geographical markets: Taiwan China Taiwan $ 2,019,788 56,189 India 1,299,490 - United States 376,551 283,927 China 52,625 242,164 Others 636,588 12,696 $ 4,385,042 594,976 Major products: Plastic materials $ 2,683,721 - Plastic products 1,666,310 594,976 Stocks and funds 35,011 - $ 4,385,042 594,976 Effect of employee share bonus Weighted average number of ordinary shares (diluted) 235 (thousand share) 220,921 Diluted earnings per share (NT dollars) From continuing operations ~~$~~ ~~1.69~~ From discontinued operations 1.55 $ 3.24 (v)Revenue from contracts with customers	Basic earnings per share (NT dollars) 2020 From continuing operations $ 1.69 From discontinued operations 1.55 $ 3.24 Diluted earnings per share Profit of the Company for the year－continuing operations $ 374,097 Profit/(loss) of the Company for the year－ discontinued operations 341,055 Profit attributable to ordinary shareholders of the Company 715,152 Weighted average number of ordinary shares (thousand share) 220,686 Effects of dilutive potential ordinary shares (in thousands of shares) (i) Details of revenue 2020 Primary geographical markets: Taiwan China Taiwan $ 2,019,788 56,189 India 1,299,490 - United States 376,551 283,927 China 52,625 242,164 Others 636,588 12,696 $ 4,385,042 594,976 Major products: Plastic materials $ 2,683,721 - Plastic products 1,666,310 594,976 Stocks and funds 35,011 - $ 4,385,042 594,976 Effect of employee share bonus Weighted average number of ordinary shares (diluted) 235 (thousand share) 220,921 Diluted earnings per share (NT dollars) From continuing operations ~~$~~ ~~1.69~~ From discontinued operations 1.55 $ 3.24 (v)Revenue from contracts with customers	Basic earnings per share (NT dollars) 2020 From continuing operations $ 1.69 From discontinued operations 1.55 $ 3.24 Diluted earnings per share Profit of the Company for the year－continuing operations $ 374,097 Profit/(loss) of the Company for the year－ discontinued operations 341,055 Profit attributable to ordinary shareholders of the Company 715,152 Weighted average number of ordinary shares (thousand share) 220,686 Effects of dilutive potential ordinary shares (in thousands of shares) (i) Details of revenue 2020 Primary geographical markets: Taiwan China Taiwan $ 2,019,788 56,189 India 1,299,490 - United States 376,551 283,927 China 52,625 242,164 Others 636,588 12,696 $ 4,385,042 594,976 Major products: Plastic materials $ 2,683,721 - Plastic products 1,666,310 594,976 Stocks and funds 35,011 - $ 4,385,042 594,976 Effect of employee share bonus Weighted average number of ordinary shares (diluted) 235 (thousand share) 220,921 Diluted earnings per share (NT dollars) From continuing operations ~~$~~ ~~1.69~~ From discontinued operations 1.55 $ 3.24 (v)Revenue from contracts with customers		2019 0.53 - 0.53 117,676 (589 )
			715,152		117,087
			220,686 2020 235 220,921 ~~1.69~~ 1.55 3.24		220,286 Total 2,075,977 1,299,490 660,478 294,789 649,284 4,980,018 2,683,721 2,261,286 35,011 4,980,018 - 220,286 ~~0.53~~ - 0.53
	Taiwan $ 2,019,788 1,299,490 376,551 52,625 636,588 $ 4,385,042 $ 2,683,721 1,666,310 35,011 $ 4,385,042		China

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Primary geographical markets: Taiwan India United States China Other Major products/services lines: Plastic materials Plastic products Stocks and funds (ii) Contract balances Notes and trade receivables Less: allowance for impairment Total Contract liabilities				Taiwan	Taiwan		2019 China			Total 1,844,157 1,535,523 695,063 223,545 358,402 4,656,690 2,443,216 2,201,889 11,585 4,656,690
				$ 1,844,157 1,535,523 663,991 35,237 345,187 $ 4,424,095 $ 2,443,216 1,625,770 11,585 $ 4,080,571
		December 31, 2020 $ 670,836 (7,540 ) $ 663,296					December 31, 2019			January 1, 2019 746,830 (11,074 ) 735,756
		$	30,529				15,559			6,827

For details on trade receivables and allowance for impairment, please refer to note 6(e). Contract liabilities mainly arose from advance receipt of loans from customers and payments for real estate. The Group will record revenue when the product is delivered to the customer or when the property is completed and the ownership is transferred. The amount of revenue recognized for the years ended December 31 2020 and 2019 that was included in the contract liability balance at the beginning of the period were 15,559 thousand and 6,827 thousand, respectively.

(w) Employee compensation and directors' and supervisors' remuneration

Pursuant to the Company’s the Articles of Incorporation, it shall contribute no less than 1% of the profit as employee compensation and more than 2% as compensation to directors and supervisors when there is profit for the year. However, if the Company has accumulated deficits, the profit shall be reserved to offset the deficit. The persons who are entitled to receive cash or shares as employee stipulated in the preceding paragraph include the employees of the Company's affiliates who meet certain conditions.

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The estimated amount of compensation for employees of the Group in 2020 is 9,545 thousand, and the one for directors and supervisors is 7,299 thousand. The estimation is based on the pre-tax net profit of the company for each period before deducting the remuneration of employees, directors and supervisors multiplied by the amount of staff remuneration and the distribution of directors and supervisors which are stipulated in the company's articles of association. It is also reported as operating costs or operating expenses in 2020.

Since the Company had accumulated deficits in 2019, there was no need to estimate the compensation to employees, directors, and supervisors. Related information is available on the website of Market Observation Post System.

• (x) Non-operating income and expenses

• (i) Interest income

For the years ended December 31, 2020 and 2019, the details of other income were as follows:

follows:
		2020	2019
Interest income from bank deposits	$	4,475	6,335

• (ii) Other income

For the years ended December 31, 2020 and 2019, the details of other income were as follows:

follows:
Rent income Dividend income Other income, Others	2020 $ 11,328 29,459 19,167 $ **59,954 **	2019
		21,491 45,948 20,699
		88,138

(iii) Other gains and losses

For the years ended December 31, 2020 and 2019, the details of other gains and losses were as follows:

Gain (loss) on disposal of property, plant and equipment Foreign exchange losses Gains on financial assets at fair value through profit or loss Miscellaneous disbursements	2020 $ (3,352) (18,537) 70,562 (1,412 ) $ 47,261	2019
		18,642 (3,328)
		88,127 (4,349 )
		99,092

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(iv) Financial costs

For the years ended December 31, 2020 and 2019, the details of finance costs were as follows:

Interest expense Less：Interest capitalization	2020 $ 47,479 (27,671 ) $ 19,808	2019 57,397 (29,793 ) 27,604

(y) Financial instruments

• (i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets except for cash and cash equivalents, represents the maximum amount exposed to credit risk. As of December 31, 2020 and 2019, the maximum amount exposed to credit risk were 944,138 thousand and 781,175 thousand, respectively.

The sales of the Group are not significantly concentrated within a few customers. As of December 31, 2020 and 2019, the balance of accounts receivable due from the 10 largest customers were 38% and 42%.

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

December 31, 2020 Non-derivative financial liabilities Secured bank loans Unsecured bank loans Notes payables Trade payables Other payables (including related parties) Carrying amount $ 3,036,098 200,000 39,240 450,891 129,909 30,723 $ 3,886,861	Contractual cash flows 3,245,255 200,266 39,240 450,891 129,909 31,295 4,096,856	Within 6 months 46,398 200,266 39,240 450,891 129,909 11,525 878,229	6-12 months 1-2	years 2-5 years 281,776 2,535,562 - - - - - - - - 7,979 7,400 289,755 2,542,962	Over 5 years 334,801 - - - - -
			46,718 - - - - 4,391 51,109	281,776 - - - - 7,979 289,755
					334,801

Lease liabilities

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December 31, 2019 Non-derivative financial liabilities Secured bank loans Unsecured bank loans Notes payables Trade payables Other payables (including related parties) Lease liabilities		Carrying amount $ 3,601,379 250,000 77,351 437,108 95,058 58,468 $ 4,519,364	Contractual cash flows 3,904,663 250,040 77,351 437,108 95,058 59,839 4,824,059	Within 6 months 53,721 250,040 77,351 437,108 95,058 14,271 927,549	6-12 months 1-2	years 2-5 years 577,519 967,612 - - - - - - - - 15,918 15,379 593,437 982,991	Over 5 years 2,251,797 - - - - -
					54,014 - - - - 14,271 68,285	577,519 - - - - 15,918 593,437
							2,251,797

The Group does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Currency risk

• 1) Exposure to foreign currency risk

The Group’s significant exposure to foreign currency risk were as follows:

Financial assets: Monetary items JPY USD HKD Financial liabilities Monetary items USD		December 31, 2020	December 31, 2020	December 31, 2019	December 31, 2019
	Local currency $ - 20,864 845 14,726		Exchange rate TWD - - 28.10 586,278 3.63 3,063 28.10 413,797	Local currency 1,420 21,982 1,046 12,525	Exchange rate TWD 0.28 393 30.10 661,658 3.87 4,043 30.10 377,001

2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade receivables, loans and borrowings; and trade and other payables that are denominated in foreign currency.

A strengthening (weakening) of 1% of the TWD against the JPY, USD, and HKD as of December 31, 2020 and 2019, would have increased (decreased) the net profit after tax by $1,404 thousand and $2,313 thousand, respectively. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the reporting date. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases.The analysis is performed on the same basis for 2020 and 2019.

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• 3) Foreign exchange gain and loss on monetary items

Since the Group has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For years 2020 and 2019, foreign exchange gain (loss) (including realized and unrealized portions) amounted to (18,537) thousand and (3,328) thousand, respectively.

• (iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Group’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents the Group management's assessment of the reasonably possible interest rate change.

If the interest rate had increased / decreased by 0.25%, the Group’ s net income would have increased / decreased by $6,672 thousand and $7,203 thousand for the year ended December 31, 2020 and 2019 with all other variable factors remaining constant, respectively.

• (v) Other market price risk

For the years ended December 31, 2020 and 2019, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the profit and loss as illustrated below:

basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:
2020 2019 Price of securities Other comprehensive Other comprehensive at the reporting date income after tax Net income income after tax Net income Increasing 1% $ 12,520 2,810 6,903 2,407 Decreasing 1% $ (12,520 ) (2,810 ) (6,903 ) (2,407 )
Increasing 1% $ Decreasing 1% $
	12,520		2,810		6,903
	(12,520	)	(2,810	)	(6,903	)

(vi) Fair value of financial instruments

• 1) Fair value hierarchy

The carrying amount and fair value of the Group’ s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

Financial assets at fair value through profit or loss Designated at fair value through profit or loss–current Designated at fair value through profit or loss–non-current Subtotal Financial assets at fair value through other comprehensive income Domestic unlisted stock Total Financial assets at fair value through profit or loss Designated at fair value through profit or loss–current Designated at fair value through profit or loss–non-current Subtotal Financial assets at fair value through other comprehensive income Domestic unlisted stock Total		December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020
	Book Value $ 264,727 16,237 280,964 1,251,957 $ 1,532,921			Fair Value
		Level 1 264,727 16,237			Level 3 - -		Total
							264,727 16,237
		280,964			-		280,964
		-					1,251,957 1,532,921
		280,964
	Book Value $ 199,868 40,827 240,695 690,314 $ 931,009			Fair Value
		Level 1 199,868 40,527		Level 2 - - - - -	Level 3 - -		Total
							199,868 40,527
		240,395			-		240,395
		-					690,314
		240,395					930,709

2) Valuation techniques for financial instruments measured at fair value If quoted prices of financial instruments are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and the prices represent actual and regularly occurring market transactions on an arm’ s length basis, then the financial instrument is regarded as quoted in an active market.

If the condition above is not met, the market is inactive. If the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide.

If the financial instruments held by the Group are in active market, its fair value hierarchy and nature are as follows:

The stock of listed companies and domestic open end funds are financial

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instruments in active market, and the fair value thereof is decided by the market.

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

Measurements of fair value of financial instruments without an active market are based on a valuation technique or quoted price from a competitor. Fair value measured by a valuation technique can be extrapolated from similar financial instruments, the discounted cash flow method, or other valuation technique including a model using observable market data at the reporting date.

If the financial instruments held by the Group are in no active market, its fair value category and nature are as follows:

Unquoted equity instruments: except acquiring the latest transaction price as fair value, others adopt market approach of comparable business. This method mainly assumes price-book of investees, enterprise value, income after tax, and the stock price of comparable listed company to calculate price-book ratio, enterprise value ratio, and earnings per share as a measure basis. This estimated fair value is already adjusted for the lack of liquidity.

• 3) Reconciliation of Level 3 fair values

Opening balance, January 1, 2020 Total gains and losses recognized: In profit or loss In other comprehensive income Purchased Derecognized Ending Balance, December 31, 2020 Opening balance, January 1, 2019 Total gains and losses recognized In profit or loss In other comprehensive income Derecognized Transfers out of Level 3 Ending Balance, December 31, 2019			Fair value through other comprehensive income Unquoted equity instruments 690,314 - 564,796 - (3,153 ) 1,251,957	Fair value through other comprehensive income Unquoted equity instruments 690,314 - 564,796 - (3,153 ) 1,251,957	Total 690,314 (716) 564,796 3,954 (6,391 ) 1,251,957
		$ 105,547 81,121 - (222) (186,446 ) $ -		814,869 - (124,555) - - 690,314	920,416 81,121 (124,555) (222) (186,446 ) 690,314

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For the years ended December 31, 2020 and 2019, total gains and losses that were included in “ other gains and losses” and “ unrealized gains and losses from financial assets at fair value through other comprehensive income” were as follows:

Total gains and losses recognized In profit or loss, and presented in “other gains and losses” In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income”	2020 2019 $ (716) 81,121 564,796 (124,555)

• 4) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

Most of the fair value of the Group classified as level 3 is an equity instrument in no active market which has multiple significant unobservable inputs. Because the inputs are mutual independent, there is no relevance.

Inter relationship

between significant

Valuation Significant technique unobservable inputs Comparable ‧ P/E ratio (10.21~15.22 and Item company analysis 10.83~19.21 on December Financial assets at fair value 31, 2020 and 2019, through other comprehensive respectively) income equity investments ‧ Lack-of-Marketability without an active market Discount (17.71%~27.56% and 19.05%~27.96% on December 31, 2020 and 2019, respectively）

• ‧ P/B ratio (1.36~2.35 and 1.35~2.00 on December 31, 2020 and 2019, respectively)

unobservable inputs and fair value measurement The estimated fair value would increase (decrease) if:

• ‧ The P/E ratio and control premium were higher (lower);

• ‧ Lack-of-Marketability Discount were lower (higher);

• ‧ The P/B ratio and control premium were higher (lower).

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• 5) Fair value measurements in Level 3-sensitivity analysis of reasonably possible alternative assumptions

• The method to derive at the fair value of financial instruments is reasonable but could yield different outcomes when using different multipliers. For fair value measurements in Level 3, changing one or more of the assumptions to reflect reasonably possibilities of alternative assumptions would have the following effects:

December 31, 2020 Financial assets at fair value through other comprehensive income Equity investments without an active market December 31, 2019 Financial assets at fair value through other Inputs Variation P/E ratio 1% Discount rate 1% P/B ratio 1% comprehensive income Equity investments without an active P/E ratio 1% market Discount rate 1% P/B ratio 1%	F	Pro	fit or loss	Other comprehensive income Favourable Unfarourable 16,287 (16,287) 4,079 (4,079) 7,870 (7,870) 6,690 (6,990) 1,926 (1,926) 6,112 (6,112)
		avourable - - - - - -	Unfarourable - - - - - -	Favourable 16,287 4,079 7,870 6,690 1,926 6,112

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

• (z) Financial risk management

• (i) Overview

The Group have exposures to the following risks from its financial instruments:

• 1) credit risk

• 2) liquidity risk

• 3) market risk

This note expresses the risk exposure information of the above-mentioned risk of the Group, and the Group’s objectives, policies and processes for measuring and managing the risks. For more disclosures about the quantitative effects, please refer to the respective notes in the consolidated financial statements.

• (ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

(iii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’ s receivables from customers and investments in debt securities.

• 1) Trade and other receivables The Group’s credit risk exposure is mainly affected by individual customer’s conditions. However, management also takes into consideration the statistical data of the Group’ s customer, including the default risk of the customer's industry and country, as these factors may affect credit risk.

• The accounting Department has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Group’ s standard payment and delivery terms and conditions are offered. The Group’ s review includes external ratings, when available, and, in some cases, bank references. Purchase limits are established for each customer and represent the maximum open amount without requiring approval from the Risk Management Committee; these limits are reviewed quarterly. Customers that fail to meet the Group’ s benchmark creditworthiness may transact with the Group on a prepayment basis or by providing collateral.

• The company has set up allowances for bad debt accounts to reflect estimates of losses incurred in accounts receivable, other receivables and investments. The main components of the allowance account include specific loss components related to individual major risk insurance and combined loss components established for similar asset groups that have occurred but have not been identified. The combined loss allowance account is determined based on historical payment statistics of similar financial assets.

2) Investments The exposure to credit risk for the bank deposits and other financial instruments is measured and monitored by the Group’s finance department. The Group only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Group does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

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• 3) Endorsements and guarantees The Group’ s policy stipulates that providing financial guarantees are only between the parent company and subsidiaries. As of December 31, 2020 and 2019, endorsement and guarantee provided by the Group were both 668,553 thousand, respectively.

• (iv) Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’ s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

• Generally, the Group ensures that it has sufficient cash to support expected operating expenditure in a short term, including financial liabilities, but excludes potential impact which can not be predicted reasonably such as nature disasters. Moreover, as of December 31, 2020 and 2019, the Group’s unused credit line respectively were 3,208,745 thousand and 2,754,277 thousand.

• (v) Market risk Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

• 1) Currency risk The Group is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Group’s entities. The functional currency of group is mainly TWD, and the currencies used in these transactions are the TWD, HKD, JPY, and USD.

• 2) Interest rate risk The Group’ s interest risk arose from short term and long term borrowings. Since the short term borrowings are at floating rate, the fluctuation in interest rates will lead to movements in future cash flows.

• 3) Other market price risk The Group is exposed to equity price risk due to the investments in stocks listed on domestic markets, and fund investment on domestic and foreign markets. The equity investment is a strategic investment and is not held for trading. The Group does not actively trade in these investments as the management of the Group manages the risk by holding different investment portfolios. The Group assigned a specific team to supervise the equity price risk, so as to avoid or minimize the risk from the hedging position.

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

(aa) Capital management

The Board of Directors aims to keep a stable capital base to maintain the confidence of investors, creditors and the market, so as to support the development of future operations. Capital includes the share capital, capital reserve, retained earnings and non controlling interests of the Group. The Board of Directors controls the return on capital and at the same time controls the level of ordinary stock dividends.

As of December 31, 2020 and 2019, the Group’ s debt-to-equity ratio at the end of the reporting period, were as follows:

Total liabilities Less: cash and cash equivalents Net debt Total equity Debt-to-equity ratio at 31 December			December 31, 2020 5,571,045 (413,217 ) 5,157,828	December 31, 2019 6,248,040 (460,375 ) 5,787,665
		$ $
		$	6,604,117	5,327,466
			78.10 **% **	108.64 %

The method of capital management of the Group had not changed as of December 31, 2020 and 2019. The debt to equity ratio was reduced on December 31, 2020, due to the decrease in net debt caused by the repayment of long term borrowings.

(ab) Investing and financing activities not affecting current cash flow

The Group’ s investing and financing activities which did not affect the current cash flow in the years ended December 31, 2020 and 2019, were as follows:

(i) For right-of-use asset under lease, please refer to notes 6(j).

(ii) Reconciliation of liabilities arising from financing activities were as follows:

financing activities Long-term borrowings Short-term borrowings Lease liabilities Total liabilities from Long-term borrowings Short-term borrowings Lease liabilities Total liabilities from	January 1, 2019 $ 3,713,336 277,657 81,822 $ 4,072,815 January 1, 2020 $ 3,601,379 250,000 58,468 $ 3,909,847		Cash flows	Cash flows	Cash flows	Cash flows	s s Fair value changes - - ) - ) - Fair value ement changes - - - -	December 31, 2019 3,148,055 250,000 58,467 3,456,522 December 31, 2020 3,036,098 200,000 30,723 3,266,821
			(565,281) (50,000) (27,701 )
			(642,982	)
						Foreign exchange movement - - (315 (315
			(619,380	)	3,402

financing activities

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

(7) Related-party transactions:

• (a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in the consolidated financial statements:

Name of related party

Relationship with the Group

Chun Pin Enterprise Co., Ltd. An associate Chin Yi Ho Hang, Ltd. Same chairman with the Group Yee Fong Chemical and Industrial Co., Ltd. The director of this company is the president of the Group

• (b) Significant transactions with related parties

• (i) Other transactions with related parties

Account Relationship		2020 28,521	2019
Administrative expenses Associate			18,833

The Group commissioned its associate to operate oil storage tanks. The outstanding balances of management expenses on December 31, 2020 and 2019 were $3,204 thousand and $3,540 thousand, which are presented as “other payables to related parties”.

• (ii) Leases

In January 2019, the Group leased an high-pressure spherical tank from its associate. A six year lease contract was entered into, and the rent was determined based on the rental rates in the vicinity. The total value of the contract was $52,800 thousand. For 2020 and 2019, the interest expenses were $156 thousand and $332 thousand. As of December 31, 2020 and 2019, the lease liabilities had amounted to $4,388 thousand and $17,432 thousand.

In May 2017, the Group leased from other related parties an office building as its headquarter on Juguang Road, Taipei City, and the land in Zhongli Dist., Taoyuan City. A five year lease contract was signed, and the rent was determined based on land rental rates in the vicinity. The total value of the contract was $37,000 thousand. For 2020 and 2019, interest expenses were 367 thousand and 219 thousand. As of December 31, 2020 and 2019, lease liabilities had

amounted 21,681 and 28,714 thousand.

• (c) Key management personnel compensation

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefits Other long-term benefits Total	2020 2019
	$ 6,602 6,533 5 8 1 1 $ 6,608 6,542

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

(8) Pledged assets:

The carrying values of pledged assets were as follows:

December 31, December 31, Pledged assets Object 2020 2019 Property, plant and equipment Long-term and short-term loans $ 2,316,615 2,331,177 Investment property Long-term and short-term loans 3,663,301 3,669,088 Other financial assets Trust account - 14,831 $ 5,994,747 6,000,265

(9) Commitments and contingencies:

• (a) Significant Commitments and Contingencies were as follows: (i) The Group’s unrecognized contractual commitments are as follows:

Acquisition of property, plant and equipment	December 31, 2020		December 31, 2019 10,189
	$ 48,847

• (ii) The Group’s outstanding standby letter of credit are as follows:

December 31, December 31, 2020 2019 Outstanding standby letter of credit $ 15,157 4,344 The joint construction contract signed by the company for the sale of the built real estate is as follows: Joint construction method Project name Joint construction and allocation Xinglong Section, Wenshan District; of housing units Jiankang Section, Zhonghe District

• (iii) The joint construction contract signed by the company for the sale of the built real estate is as follows:

• (iv) The amounts of endorsement and guarantee provided by the Group for the borrowings and business of subsidiaries were as follows:

December 31, 2020 $ 668,553	December 31, 2019 668,553

• (b) Major contingent liabilities: None

• (10) Losses due to major disasters: None.

(11) Subsequent Events: None.

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Ocean Plastics Co., Ltd. and Subsidiaries Notes to the Consolidated Financial Statements

(12) Others:

(a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

s as follows:
By funtion By item		2020			2019
	Cost of Sale	Operating Expense	Total	Cost of Sale	Operating Expense	Total
Employee benefits
Salary	304,270	91,892	396,162	278,627	82,603	361,230
Labor and health insurance	26,043	7,328	33,371	27,242	7,654	34,896
Pension	11,651	4,125	15,776	13,089	4,580	17,669
Director’s remuneration	-	13,623	13,623	-	6,472	6,472
Others	16,831	5,825	22,656	16,913	5,955	22,868
Depreciation	190,107	17,381	207,488	192,993	14,268	207,261
Amortization	-	-	-	-	-	-

(b) Discontinued operation

The Group’s Board of Directors resolved on November 7, 2019 to sell the equity in Hunan Kunyuan Plastic Chemical Co., Ltd. The statutory procedures for equity transfer was completed on March 16, 2020, and the proceeds from disposal was US$ 11,500 thousand (approximately NT$ 347,300 thousand). Since this department was not a discontinued operation or an asset to be sold on June 30, 2019, the consolidated income statement of the previous period shall be restated, with the discontinued one and the continuing one presented separately.

Profit and loss, and cash flows from discontinued operations were summarized as follows:

Results from operating activities: Operating revenues Operating costs Gross profit from operations Operating expenses Non-operating income and expenses Profit before income tax Income tax expenses Net loss after tax of discontinued operation Gain on sale of asset or disposal groups of discontinued operation Income tax of discontinued operation Net income (loss) of discontinued operation Basic earnings per share (NT dollars) Diluted earnings per share (NT dollars) Cash inflow (outflow) from discontinued operation: Net cash from operating activities Net cash from investing activities Net cash from financing activities Effect in exchange rates Net cash inflow	2020 $ - - - - - - - - 341,055 - $ 341,055 ~~$~~ ~~1.55~~ ~~$~~ ~~1.55~~ $ - 347,300 - (4,488 ) $ 342,812	2019 12,100 - 12,100 (11,126) (1,563 ) (589) - (589) - - (589 ) ~~-~~ ~~-~~ 24,872 - (27,657) 1,330 (1,455 )

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Notes to the Consolidated Financial Statements

(13) Other disclosures:

• (a) Information on significant transactions:

• The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group:

(i) Loans to other parties:

(In Thousands of New Taiwan Dollars)

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period (note 4)	Ending balance (note 4)	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower (Note 2)	Transaction amount for business between two parties	Reasons for short- term financing	Allowance for bad debt	Colla	teral	Individual funding loan limits	Maximum limit of fund financing (Note 3
													Item	Value
0	The Company	Ocean Plastics (Dong Guan) Co., Ltd.	Other receivables and long- term receivables	Yes	99,408	91,352	91,352	-	1	12,474	Operation Capital	-		-	1,320,823	2,641,647

Note 1: The numbering is as follows:

1. “0” represents the parent company.

2. 2.Subsidiaries are sequentially numbered from 1.

Note 2: The method of filling out the capital loan and nature is as follows:

• 1 represents a trading counterparty.

• 2 indicates the necessity of short-term financing.

Note 3: The total loans to others shall not exceed 40% of the net value of the Company, and the loans to an individual party shall not exceed 20% of the net value of the Company. The net value is based on the amount disclosed the latest financial statements.

Note 4: The cumulative maximum balance of loans to others from the current year to the reporting month includes the amount transferred from overdue receivables.

Note 5: The highest amounts were approved by the Board of Directors.

Note 6: The transactions above have been written off in the preparation of the consolidated financial report. (ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Name of guarantor	Counter guaran endor	-party of tee and sement	Limitation on amount of guarantees and endorsement sfor a specific enterprise (Note 3)	Highest balance for guarantees and endorsements during the period (Note 4)	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements (Note 3)	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements /guarantees to third parties on behalf of parent company	Endorsements /guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company (Note 2)
0	The Company	UNIVERSE ENTERPRIS ES,LTD.	2	3,302,058	20,000	20,000	-	-	0.30 %	5,283,294	Y	N	N
0	The Company	Chang Xin Co., Ltd.	2	3,302,058	640,420	640,420 (Note 5)	198,425	-	9.70 %	5,283,294	Y	N	N
1	Fine Environment Technologies Co.,Ltd.	Chang Xin Co., Ltd.	4	7,315	2,999	2,999 (Note 5)	-	2,999	20.50 %	11,704	N	N	N
2	Hong Da Investment Co.,Ltd.	Chang Xin Co., Ltd.	4	68,088	5,134	5,134 (Note 5)	-	5,134	1.51 %	170,220	N	N	N

Note 1: The numbering is as follows:

1. “0” represents the parent company.

2. 2.Subsidiaries are sequentially numbered from 1.

Note 2: There are the following 7 types of relationship between the guarantee and the guarantor:

1. Trading counterparty.

2. The Company holds more than 50% of the voting shares in the entity, directly and indirectly.

3. The entity holds more than 50% of voting shares in the Company, directly and indirectly.

4. The Company holds more than 90% of voting shares in the entity, directly and indirectly

5. An entity in the construction industry mutually guaranteed pursuant to a project contract.

6. The stockholders of the Company provide guarantees or endorsements for the entity in proportion to percentage of ownership for joint investment.

7. Performance guarantees for presale contracts for entities in the same industry pursuant to the Consumer Protection Act.

8. Note 3: The endorsement and guarantee, provided by the Company and Fine environment Technology Co., Ltd. for a single entity, shall not exceed 50% of the guarantor’ s net worth, and the total shall not exceed 80% of the net worth of the guarantor. The endorsement and guarantee, provided by Changxin Xinye Co., Ltd. for a single party, shall not exceed 80% of the guarantor’s net worth, and the total shall not exceed 100% of the guarantor’s net worth. The endorsement and guarantee, provided by Hongda Investment Co., Ltd. for a single entity, shall not exceed 20% of the guarantor’s net worth, and the total amount shall not exceed 50% of the guarantor’s net worth.

9. Note 4: The highest balance of the endorsement guarantee for others in the current year.

10. Note 5: The company and its 100% direct or indirect subsidiaries pledged their jointly held land as collateral.

156

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Ocean Plastics Co., Ltd. and Subsidiaries

Notes to the Consolidated Financial Statements

(iii) Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title		Endingbalance	Endingbalance		Highest Percentage of ownership (%)	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Taiwan VCM Corporation	-	Equity instruments at fair value through other comprehensive income	34,317	1,130,019	12.46 %	1,130,019	12.46 %
〃	E'dale Technology Co., Ltd.	-	〃	630	21,087	3.38 %	21,087	3.38 %
〃	PAN OCEAN INC.	-	〃	152	6,890	15.07 %	6,890	15.07 %
〃	Ultra-Pak Industries Co., Ltd	-	〃	3,008	31,013	7.00 %	31,013	7.00 %
〃	Microcell Composite Company	-	〃	237	-	4.32 %	-	4.32 %
〃	Fuzetec Technology Co., Ltd.	-	Financial assets designated at fair value through profit or loss- current (stock)	2,591	122,404	8.25 %	122,404	8.25 %
Chang Xin Co., Ltd.	Ultra-Pak Industries Co., Ltd	-	Equity instruments at fair value through other comprehensive income	1,743	17,967	4.06 %	17,967	4.06 %
〃	Cosmactive Broadband Networks Co., Ltd.	-	〃	1	-	0.05 %	-	0.05 %
Hong Da Investment Co., Ltd.	Acer Incorporated	-	Financial assets designated at fair value through profit or loss-non current (stock)	119	2,808	- %	2,808	- %
〃	United Microelectronics Corporation	-	〃	29	1,364	- %	1,364	- %
〃	Capital SZSE SME Price Index Exchange Traded Fund -TWD	-	〃	400	7,345	- %	7,345	- %
〃	Fuh Hwa South Africa Short-Term Income ZAR Fund A	-	〃	149	4,720	- %	4,720	- %
〃	Ultra-Pak Industries Co., Ltd	-	Equity instruments at fair value through other comprehensive income	1,482	15,277	3.45 %	15,277	3.45 %
〃	E'dale Technology Co., Ltd.	-	〃	580	19,417	3.11 %	19,417	3.11 %
〃	Fuzetec Technology Co., Ltd.	-	Financial assets designated at fair value through profit or loss- current (stock)	2,574	121,628	8.20 %	121,628	8.20 %
Fine Environment Technologies Co., Ltd.	Minima Technology Co., Ltd.	-	Equity instruments at fair value through other comprehensive income	413	10,287	1.06 %	10,287	1.06 %
〃	Microcell Composite Company	-	〃	237	-	4.32 %	-	4.32 %
FERMAT ENTERPRISES, LTD.	Applied Wireless Indentifications Group, INC.	-	Equity instruments at fair value through other comprehensive income	500	-	- %	-	- %
〃	Ubique Polymers PtyLtd.	-	〃	10	-	- %	-	- %
〃	AB FCP I-Global High Yield Portfolio Class AT USD	-	Financial assets at fair value through profit or loss- current (funds)	135	20,695	- %	20,695	- %

157

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Ocean Plastics Co., Ltd. and Subsidiaries

Notes to the Consolidated Financial Statements

• (iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

• (v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

• (vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

• (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

• (viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

• (ix) Trading in derivative instruments: None.

• (x) Business relationships and significant intercompany transactions:

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Name of company	Name of counter-party	Nature of relationship (Note 2)		Inter ompanytransactions	Inter ompanytransactions
				Account name	Amount	Trading terms	Percentage of the consolidated net revenue or total assets
0	The Company	Fine Environment Technologies Co.,Ltd.	1	Trade receivables	303	Comparable to general company	-%
0	The Company	Fine Environment Technologies Co.,Ltd.	1	Notes receivables	325	Comparable to general company	-%
0	The Company	Fine Environment Technologies Co.,Ltd.	1	Operating revenue	3,263	Comparable to general company	0.07%
0	The Company	Ocean Plastics (Dong Guan)Co.,Ltd.	1	Trade receivables	5,465	Comparable to general company	0.04%
0	The Company	Ocean Plastics (Dong Guan) Co., Ltd.	1	Other receivables	6,380	Not comparable to general companies	0.05%
0	The Company	Ocean Plastics (Dong Guan) Co., Ltd.	1	Long-term receivables	84,972	Not comparable to general companies	0.70%
0	The Company	Ocean Plastics (Dong Guan)Co.,Ltd.	1	Operating revenue	12,474	Comparable to general company	0.25%
0	The Company	Ocean Plastics (Hui Zhou) Co.,Ltd.	1	Cost of goods sold	58,329	Comparable to general company	1.17%
0	The Company	Ocean Plastics (Hui Zhou) Co.,Ltd.	1	Trade receivables	17,430	Comparable to general company	0.14%
0	The Company	Ocean Plastics (Hui Zhou) Co.,Ltd.	1	Operating revenue	45,792	Comparable to general company	0.92%
1	Universe Enterprise,Ltd.	Ocean Plastics (Hui Zhou) Co.,Ltd.	3	Trade receivables	20,200	Comparable to general company	0.17%
1	Universe Enterprise,Ltd.	Ocean Plastics (Hui Zhou) Co.,Ltd.	3	Operating revenue	78,328	Comparable to general company	1.57%

Note 1: The numbering is as follows:

1. “0” represents the parent company.

2. 2.Subsidiaries are sequentially numbered from 1.

3. Note 2: The types of related-party transactions is as follows:

4. 1.Represents the transactions from parent company to subsidiary.

5. Represents the transactions from subsidiaries to parent company.

6. 3.Represents the transactions from between subsidiaries.

Note 3: Business relationships and significant intercompany transactions only disclosed the information of the Company's cost and accounts payable. Revenues and

account receivable of counterparty would not be disclosed again.

Note 4: Transaction within the Group were eliminated in the consolidated financial statements.

158

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Ocean Plastics Co., Ltd. and Subsidiaries

Notes to the Consolidated Financial Statements

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2020 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original inve	stment amount	Balance	as of December 31,	2020	Highest Percentage of wnership	Net income (losses) of investee	Share of profits/losses of investee (Note 1)	Note
				December 31, 2020	December 31, 2019	Shares (thousands)	Percentage of wnership	Carrying value
The Company	Chun Pin Enterprise Co., Ltd.	Taiwan	Warehousing industry	290,000	290,000	29,000	44.62 %	407,945	44.62 %	172,894	77,137	associate
The Company	Fine Environment Technologies Co., Ltd.	Taiwan	Wholesale of plastics product	44,792	44,792	1,003	60.76 %	9,098	60.76 %	(11	) (6)	Subsidiary
The Company	Chang Xin Co., Ltd.	Taiwan	General investing	2,900,860	2,900,860	290,086	100.00 %	1,451,178	100.00 %	142	142	Subsidiary
The Company	Hong Da Investment Co., Ltd.	Taiwan	General investing	190,000	190,000	19,000	100.00 %	208,921	100.00 %	38,530	38,530	Subsidiary
The Company	FERMAT ENTERPRISES, LTD.	British Virgin Islands	Investment holding	13,887	13,887	450	100.00 %	21,720	100.00 %	(689	) (689)	Subsidiary
The Company	UNIVERSE ENTERPRISES LTD.	British Virgin Islands	Investment holding	93,032	93,032	3,000	100.00 %	59,742	100.00 %	(2,946	) (2,946)	Subsidiary
The Company	OCEAN GROUP LTD.	Samoa	Investment holding	1,069,438	1,394,496	32,900	100.00 %	467,130	100.00 %	440,023	440,023	Subsidiary
Hong Da Investment Co., Ltd.	Fine Environment Technologies Co., Ltd.	Taiwan	Wholesale of plastics product	6,294	6,294	647	39.24 %	5,741	39.24 %	(11	) (5)	Subsidiary
Chang Xin Co., Ltd.	Shen Yang Development Co., Ltd.	Taiwan	Real estate development	535	535	1,000	100.00 %	535	100.00 %	-	-	Subsidiary
OCEAN GROUP LTD.	OPC HOLDINGS, LTD.	British Virgin Islands	Investment holding	27,850	352,908	450	100.00 %	46,074	100.00 %	361,848	361,848	Subsidiary
OCEAN GROUP LTD.	SAGE HOLDINGS LTD.	Samoa	Investment holding	800,217	800,217	25,000	100.00 %	476,674	100.00 %	79,164	79,164	Subsidiary
OCEAN GROUP LTD.	RISE FUTURE INTERNATIONAL LTD.	Seychelles	Investment holding	241,371	241,371	7,450	100.00 %	(55,672	) 100.00 %	(985	) (985)	Subsidiary

Note 1: All intragroup transactions were eliminated in the consolidated financial statements, except for Chunpin Industrial Co., Ltd.

• (c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)

Name of investee	Main businesse sand products	Total amount of paid-in capital (Note 3)	Method of investmen t (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2019 (Note 3)	Investm	ent flows	Accumulated outflow of investment from Taiwan as of December 31, 2020 (Note 3)	Net income (losses) of the investe e	Percentag eof ownership	Highest percentag eof ownership	Investment income (losses) (Note 2)	Book value	Accmulated remittance of earnings in current period
					Outflow	Inflow
Hunan Ocean Wide Plastics Ltd.	Production and sale of vin chloride polymer rigid pipe and other plastic pip fittings	yl s e 352,908 (USD10,450)	( 3 )	352,908 (USD10,450))	-	- (Note 5)	- (Note 5)	-	100.00%	100.00%	-	-	-
Ocean Plastics (Hui Zhou) Co., Ltd.	Production and sale of business general soft tape, foamed latex leather and rubber leather	800,217 (USD25,000)	( 3 )	800,217 (USD25,000)	-	-	800,217 (USD25,000))	79,164	100.00%	100.00%	79,164	476,671	-
Ocean Plastics (Dong Guan) Co., Ltd.	Production and sale of PU synthetic leather, foamed latex leather and rubber leather	241,371 (USD7,450)	( 3 )	241,371 (USD7,450)	-	-	241,371 (USD7,450)	(985)	100.00%	100.00%	(985)	55,674	-

159

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Ocean Plastics Co., Ltd. and Subsidiaries

Notes to the Consolidated Financial Statements

(ii) Limitation on investment in Mainland China:

==> picture [407 x 61] intentionally omitted <==

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

Accumulated Investment in Mainland China Investment Amounts Authorized by
as of December 31, 2020 Investment Commission, MOEA Upper Limit on Investment
(Note 3) (Note 3) (Note 4)
1,099,196 1,099,196 3,962,078
(USD32,900) (USD32,900)
----- End of picture text -----

Note 1: Indirect investment in Mainland China through entities registered in a third region.

Note 2: The investment income (loss) was based on the financial statements audited by the investee’s external accountant.

Note 3: The amount of accumulated outflow of investment from Taiwan was translated into New Taiwan dollars at the reporting date.

Note 4: The upper limit on investment, calculated based on the amendments to the Regulations Governing the Approval of Investment or Technical Cooperation in

Mainland China, is 60% of the net equity or consolidated net equity.

Note 5: In the first quarter of 2020, the Group sold the equity in Hunan Kunyuan Plastic Chemical Co., Ltd., OPC Holding Inc., and Ocean Group Ltd. to implement capital reduction and the capital returned amounted to $296,500 thousand.

Note 6: All intragroup transactions have been written off in the consolidated financial statements.

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of consolidated financial statements, are disclosed in “Information on significant transactions”.

(d) Major shareholders:

Shareholding Shareholder’s Name	Shares	Percentage
Yee Fong Chemical & Industrial Co., Ltd.	12,425,769	5.46 %

160

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Ocean Plastics Co., Ltd. and Subsidiaries

Notes to the Consolidated Financial Statements

(14) Segment information:

• (a) General information

The Group’ s reportable segments are located in Taiwan and China. They mainly engaged in manufacturing, selling, developing plastic clothes, plastic pipes, plastic leather, plastic powder, and plastic pellet. The real estate development segment engages in developing the Group’ s real estate business. Due to different technology and marketing strategies, the Group manages separately strategic operating units. The major operating decision maker shall review the internal management report of each strategic operating unit at least quarterly. There are other operating departments which have not reached quantifiable threshold and mainly engage in selling plastic products.

• (b) The information should report that the department’ s profit and loss, assets, liabilities and their measurement and reconciliations

The Group takes department pretax income (excluding unusual income and exchange income) in the management report, which is reviewed by main operating decision-maker, as a basis of management resource distribution and performance evaluation. Since income tax, unusual income, and exchange income are managed by the Group, the Group does not allocate the tax expense (income), unusual income, and exchange income into reportable segments. Moreover, not all incomes in the reportable segments include significant non-cash item except depreciation and amortization. Reporting amounts should consist with the report used by operating decision-maker.

The operating segment accounting policies are same with those described in note 4 “ significant accounting policies” except the recognition and measurement of pension cost, which is on a cash basis.

The Group treated intersegment sales and transfers as other transactions. They are measured at market price.

The Group’s operating segment information and reconciliation are as follows:

Revenue: Revenue from external customers Inter-segment revenue Interest income Total revenues Interest expense Depreciations and amortization Share of profit (loss) of associates and joint ventures accounted for using equity method Reportable segment profit or loss Asset: Investments accounted for using equity method Capital expenditure of non-current assets Reportable segment assets Reportable segment liabilities	Taiwan Business Division $ 4,385,042 61,529 504 $ 4,447,075 $ 19,569 190,145 552,186 $ 769,900 $ 2,631,474 88,494 $ 9,528,070 $ 2,568,329	China Business Department 594,976 58,329 2,803 656,108 239 17,343 - 110,498 - 26,095 664,184 197,055	Real Estate Development Department - - -	2020 Discontinue d operations - - -	Other - 78,328 1,168 79,496 - - - (3,636 )	Reconciliati on and elimination - (198,186) - (198,186 **) **	Total 4,980,018 - 4,475
			~~-~~	~~-~~			4,984,493
			- - - - 535 74,616 5,848,097 2,940,366	- - - 341,055 - - - -
						- - (475,049) (816,104 )	19,808 207,488 77,137 401,713
					- - 81,812 350	(2,224,064) 407,945 - 189,205 (3,947,001 ) 12,175,162 (135,075 ) 5,571,025
						(135,075

161

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Ocean Plastics Co., Ltd. and Subsidiaries

Notes to the Consolidated Financial Statements

Revenue: Revenue from external customers Inter-segment revenue Interest income Total revenues Interest expense Depreciations and amortization Share of profit (loss) of associates and joint ventures accounted for using equity method Reportable segment profit or loss Asset: Capital expenditures on non-current asset Capital expenditure of non-current Reportable segment assets Reportable segment liabilities							2019
	$ $		Taiwan Business Division 4,424,095 46,163 1,798 4,472,056 27,313 190,145 170,777 190,524 2,494,137 102,242 8,860,578 3,219,804	China Business Department 232,595 343,524 3,246 579,365 291 17,116 - 30,108 - 866 600,976 255,288		Real Estate Development Department - - - - - - 1 - 535 98,107 5,802,633 2,881,654	Discontinue d operations 12,100 - 69 12,169 223 5,737 - (589 )	Other - 137,226 1,291 138,517 - - - 3,248 - - 85,448 351	Reconciliati on and elimination - (526,913) - (526,913 **) **	Total 4,668,790 - 6,404 4,675,194 27,827 212,998 82,361 135,463 404,932 201,215 11,538,236 6,248,040
		$
	$ $						223 5,737 - (589		- - (88,417) (87,828 )
	$ $								(2,089,740) - (3,858,447 )
									~~(154,347~~ )
		$

The material reconciling items of the above reportable segment are as below: Total reportable segment revenue after deducting the intersegment revenue was $198,186 thousand and $526,913 thousand in 2020 and 2019, respectively.

• (c) Product and service information

Revenue from the external customers of the Group was as follows:

Products Plastic materials Plastic products Others Total	2020 $ 2,683,721 2,261,286 35,011 $ 4,980,018	2019
		2,710,173 1,934,932 11,585
		4,656,690

(d) Geographical

In presenting information on the basis of geography, segment revenue is based on the geographical location of customers and segment assets are based on the geographical location of the assets.

Geographical Information Revenue from external customers: Taiwan United States India China Other countries Total	2020 $ 2,075,977 660,478 1,299,490 294,789 649,284 $ 4,980,018	2019
		1,844,157 695,063 1,535,523 223,545 358,402
		4,656,690

162

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Ocean Plastics Co., Ltd. and Subsidiaries

Notes to the Consolidated Financial Statements

Geographical information Non-current assets: Taiwan China Total	December 31, 2020 $ 8,250,655 156,370 $ 8,407,025	December 31, 2019
		8,260,296 208,355
		8,468,651

Non-current assets include property, plant and equipment, investment property and other assets, not including financial instruments, deferred tax assets, assets of post-employment benefits, and non- current assets of rights arising from an insurance contract.

(e) Information on revenue from major customers

No individual clients constituting over 10% of total revenue in 2020 and 2019

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1

Stock Code:1321

Apoendix 2

Ocean Plastics Co., Ltd.

Parent Company Only Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2020 and 2019

Address: 5、6F., No. 310, Juguang Rd., Wanhua Dist., Taipei City 108, Taiwan (R.O.C.) Telephone: (02)2308-2131

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

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Table of contents

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Financial Statements (1) Company history (2) Approval date and procedures of the financial statements (3) New standards, amendments and interpretations adopted (4) Summary of significant accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses due to major disasters (11) Subsequent Events (12) Others (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information 9. List of major account titles

Page

1 2 3 4 5 6 7 8 8 8～9 10～25 25～ 26 26～55 56～58 58 59 59 59 59～60 61～63 63 64 64 64 65～75

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1

Independent Auditors’ Report

To the Board of Directors of Ocean Plastics Co., Ltd.:

Opinion

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

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

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Other Matter

We did not audit the financial statements of Ocean Group Ltd., Fermat Enterprises Ltd., Universe Enterprises Ltd. and Chun Pin Enterprise Co., Ltd., which represented investment in another entity accounted for using the equity method. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for Ocean Group Ltd., Fermat Enterprises Ltd., Universe Enterprises Ltd., and Chun Pin Enterprise Co., Ltd., is based solely on the reports of other auditors. The investment in Ocean Group Ltd., Fermat Enterprises Ltd. and Universe Enterprises Ltd. and Chun Pin Enterprise Co., Ltd. accounted for using the equity method constituting 10% of total assets at both December 31, 2020 and 2019, and the related share of profit of associates and joint ventures accounted for using the equity method constituting 70% and 85% of total profit before tax for the years then ended, respectively.

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Key Audit Matters

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

1. Inventory valuation

Please refer to note 4(g) for the accounting policy on “ Inventory” and note 6(e) for components of inventories and expenses.

Description of key audit matter:

The Company's inventories are mainly midstream and downstream products of petrochemicals (PVC) and related products, and their criteria of obsolescence varies from type to type. Hence, there is a risk that the cost will exceed the net realizable value. The measurement of the net realizable value and obsolescence of inventories is uncertain because of involvement of management's subjective judgement. Therefore, we have considered inventory valuation to be a key audit matter.

How the matter was addressed in our audit:

Our principal audit procedures in this area included, among others: understanding inventory valuation policies to ensure that the process of inventory valuation was in conformity with the accounting policies, which included sampling the sources of the market prices adopted in inventory valuation to ascertain the appropriateness, and sampling inventories to test the accuracy of the aging report; reviewing the estimate of allowance for inventory loss in prior periods, and comparing it with the method and assumption used in estimating allowance for inventory loss for the current period, so as to assess the reasonableness; inspecting the sales after the balance sheet date, in order to ensure that inventory valuation was appropriate.

2.Revenue recognition

Please refer to note 4(n) for the accounting policy on “Revenue recognition” and note 6(s) for information about revenue recognition.

Description of key audit matter:

The Company engages in manufacturing and selling plastics materials and downstream plastic products (plastic construction tubing, plastic cloth, plasticized synthetic leather, etc.). Considering the high trade volume and decentral customers of the Company, the control of products transfers at different time points might impact the time of revenue recognition. Therefore, revenue recognition has been identified as a key matter in our audit.

How the matter was addressed in our audit:

Our principal audit procedures in this area included, among others: evaluating the reasonableness of revenue recognition; understanding and testing the internal control of sales and collection cycles to ascertain if the implement was operative; checking individual sales transactions, customer orders, shipping certificates, invoices and other documents; delving into the periods before and after the balance sheet date, in order to evaluate if the period of revenue recognition tallied with the trade condition and shipping documents.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs, IASs, interpretation as well as related guidance endorsed 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 financial statements that are free from material misstatement, whether due to fraud or error.

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

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

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1. Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Cheng-Chien Chen and Yung-Hua Huang.

KPMG

Taipei, Taiwan (Republic of China) March 26, 2021

Notes to Readers

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

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

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

Ocean Plastics Co., Ltd.

Balance Sheets

December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Current financial assets at fair value through profit or loss (note 6(b)) 1170 Notes and trade receivables, net (note 6(d)(s) and 7) 130X Inventories (note 6(e)) 1470 Other current assets (note 7) Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 1550 Investments accounted for using equity method (note 6(f)) 1600 Property, plant and equipment (note 6(g) and 8) 1755 Right-of-use assets (note 6(h)) 1760 Investments property, net (note 6(i) and 8) 1840 Deferred tax assets (note 6(p)) 900 Other non-current assets (note 8) 942 Long-term accounts receivables due from related parties (note 7) Total assets $	December 31, 2020 Amount % $ 174,196 2 122,404 1 621,278 7 368,484 4 55,228 1 1,341,590 15 1,189,009 13 2,625,733 29 3,367,983 37 27,895 - 488,512 5 12,617 - 32,373 - 84,972 1 7,829,094 85 9,170,684 100	December 31, 2019 Amount % Liabilities and Equity Current liabilities: 230,133 3 2100 Short-term borrowings (note 6(k) and 8) 93,519 1 2171 Accounts payable 550,271 6 2200 Other payables 391,096 5 2300 Other current liabilities (note 6(j)(m) and 8) 63,384 1 2320 Long-term liabilities, current portion (note 6(l) and 8) 1,328,403 16 Non-Current liabilities: 624,817 7 2540 Long-term borrowings (note 6(l) and 8) 2,487,402 29 3,458,318 40 49,440 1 495,544 6 12,079 - 19,264 - 71,782 1 7,218,646 84 8,547,049 100 2570 Deferred tax liabilities (note 6(p)) 2640 Net defined benefit liability, non-current (note 6(o)) 2670 Other non-current liabilities, others (note 6(m)(o)) Total liabilities Equity attributable to owners of parent (note 6(q)): 3100 Capital stock 3200 Capital surplus 3300 Retained earnings 3400 Other equity 3500 Treasury shares Total equity Total liabilities and equity	$		December 31, 2020	December 31, 2019
					Amount %	Amount %
					200,000 2 454,723 5 198,879 2 31,970 - 54,167 1 939,739 10 1,064,583 12 406,661 4 108,107 1 47,477 1 1,626,828 18 2,566,567 28 2,272,283 25 7,792 - 3,507,899 38 852,332 9 (36,189 )- 6,604,117 72 9,170,684 100	250,000 3 515,041 6 133,722 2 40,144 - 54,167 1 993,074 12 1,688,750 20 391,154 4 102,665 1 43,940 - 2,226,509 25 3,219,583 37 2,272,283 27 7,792 - 2,805,902 33 277,678 3 (36,189 ) - 5,327,466 63 8,547,049 100
				$

See accompanying notes to parent company only financial statements.

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

Ocean Plastics Co., Ltd.

Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

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

4100 Operating revenues, net (note 6(s) and 7) 5000 Operating costs (note 6(e)(g)(o) and 7) 5900 Gross profit from operation 6000 Operating expenses (note 6(d)(g)(h)(n)(o) and 7): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Impairment gain and reversal of impairment loss determined in accordance with IFRS 9 Total operating expenses 6900 Net operating income (loss) 7000 Non-operating income and expenses: 7100 Interest income (note 6(u)) 7010 Other income (note 6(u)) 7020 Other gains and losses, net (note 6(u)) 7050 Finance costs 7070 Share of profit (loss) of associates and joint ventures accounted for using equity method, net (note6(f)) Total non-operating income and expenses Profit from continuing operations before income tax 7950 Less: Income tax expenses (note 6(p)) Profit and loss of discontinued operations: Profit 8300 Other comprehensive income: 8310 Items that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that will be reclassified to profit or loss 8361 Exchange differences on translation 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income Total comprehensive income Earnings per share (NT dollars) (note 6(r)) 9750 Basic earnings per share Diluted earnings per share
	$
	$

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

Ocean Plastics Co., Ltd.

Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Balance at January 1, 2019 Profit Other comprehensive income Total comprehensive income Balance at December 31, 2019 Profit Other comprehensive income Total comprehensive income Other changes in capital surplus: Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2020	Share capital Ordinary shares	Share capital Ordinary shares	Capital surplus		Retained earnings	Retained earnings	Retained earnings	Retained earnings		Total other equity interest	Total other equity interest	Total other equity interest		Total other equityinterest	Treasury shares	Treasury shares	Total equity
										Exchange differences on translation of foreign financial statements		Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income
					Special reserve	Unappropriated retained earnings		Total retained earnings
		$2,272,283 - - - 2,272,283 - - - - 2,272,283	7,792		2,978,245	(289,406	)	2,688,839		(31,983 ) - (12,141 ) (12,141 ) (44,124) - 4,717		446,357		414,374 - (136,696 ) (136,696 ) 277,678 - 569,513 569,513 5,141 852,332	(36,189 ) - - - (36,189) - -		5,347,099 117,087 (136,720 ) (19,633 ) 5,327,466 715,152 561,499
			- -		- -	117,087 (24	)					- (124,555	)
			-		-	117,063						(124,555	)
					2,978,245 - - - - 2,978,245	(172,343) 715,152 (8,014 )						321,802 - 564,796 564,796 5,141 891,739
						(8,014		(8,014		4,717					-
						707,138		707,138		4,717					-	1,276,651 - ) 6,604,117
						(5,141	)	(5,141	)	-					-
	$					529,654		3,507,899		(39,407	)				(36,189

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Ocean Plastics Co., Ltd.

Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Expected credit loss Net gain on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss (profit) of subsidiaries,associates and joint ventures accounted for using equity method Loss (gain) on disposal of property, plant and equipment Property, plant and equipment transferred to expenses Total adjustments to reconcile (loss) profit Changes in operating assets and liabilities: Changes in operating assets: Notes receivable Inventories Other current assets Other financial assets Total changes in operating assets Changes in operating liabilities: Contract liabilities Notes payable Other payable Provisions Other current liabilities Net defined benefit liability Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments	2020 $ 730,120 191,079 3,859 (28,885) 19,568 (399) (24,381) (552,191) 3,351 803 (387,196 ) (74,866) 22,612 (13,079) (14,831 ) (80,164 ) 23,812 (60,318) 63,585 1,057 (8,838) (1,789 ) 17,509 (62,655 ) (449,851 )	2019 134,81 1 190,146 299 (40,792) 27,313 (1,746) (37,630) (170,793) (18,642) 1,289 (50,556 ) 180,406 23,926 1,916 - 206,248 274 (31,457) (37,420) (1,484) 8,329 (902 ) (62,660 ) 143,588 93,032

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Ocean Plastics Co., Ltd.

Statements of Cash Flows

For the years ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Cash inflow (outflow) generated from operations Interest received Dividends received Interest paid Income taxes refund (paid) Net cash flows from operating activities Cash flows from (used in) investing activities: Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in refundable deposits Increase in other receivables due from related parties Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase in short-term loans Proceeds from long-term debt Repayments of long-term debt Payment of lease liabilities Net cash flows from (used in) financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period		2020	2019
	$ 280,269 399 118,505 (19,579) 22,340 401,934 325,057 (88,494) 7,970 1,722 (8,507 ) 237,748 (50,000) 600,000 (1,224,167) (21,452 ) (695,619 ) (55,937) 230,133 $ 174,196		227,843 1,746 111,145 (28,665) (317 ) 311,752 - (101,572) 103,352 436 17,143 19,359 ~~-~~ 620,000 (837,083) (20,851 ) (237,934 ) 93,177 136,956 230,133

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) Ocean Plastics Co., Ltd.

Notes to the Financial Statements

For the years ended December 31, 2020 and 2019

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

(1) Company history

OCEAN PLASTICS CO., LTD.(hereinafter referred to as the “Company”) was incorporated in June 1965, as a company limited by shares under the Company Act of the Republic of China (R.O.C.), and merged with Yee Fong Chemical & Industrial Co., Ltd.. The Company was registered in 5F & 6F., No. 310, Juguang Rd., Wanhua Dist., Taipei City. Please refer to note 14 for related information on the Group entities’ main business activities.

The major business activities of the Company are the manufacture and sale of plastics.

The Company’s common shares were listed on the Taiwan Stock Exchange (TWSE) in January 1999.

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

These consolidated financial statements were authorized for issue by the Board of Directors on March 26, 2021.

(3) New standards, amendments and interpretations adopted:

• (a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. (“FSC”) which have already been adopted.

• The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2020:

• Amendments to IFRS 3 “Definition of a Business”

• Amendments to IFRS 9, IAS39 and IFRS7 “Interest Rate Benchmark Reform”

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

• Amendments to IFRS 16 “COVID-19-Related Rent Concessions”

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

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2021, would not have a significant impact on its consolidated financial statements:

• Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”

• Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform－ Phase 2”

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Ocean Plastics Co., Ltd.

Notes to the Financial Statements

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

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

Standards or Effective date per Interpretations Content of amendment IASB Amendments to IAS 1 The amendments aim to promote consistency January 1, “Classification of Liabilities 2023 in applying the requirements by helping as Current or Non-current” companies determine whether, in the statement of balance sheet, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity.

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

The Company does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

• Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”

• IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”

• Amendments to IAS 16 “Property, Plant and Equipmentt－Proceeds before Intended Use”

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

• Annual Improvements to IFRS Standards 2018-2020

• Amendments to IFRS 3 “Reference to the Conceptual Framework”

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Ocean Plastics Co., Ltd.

Notes to the Financial Statements

• (4) Summary of significant accounting policies:

The significant accounting policies presented in the consolidated financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

• (a) Statement of compliance This individual financial statement has been prepared accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “ the Regulations”).

• (b) Basis of preparation

• (i) Basis of measurement

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

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

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

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

• (c) Foreign currencies

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

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

  • 1) an investment in equity securities designated as at fair value through other comprehensive income;

  • 2) financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

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Ocean Plastics Co., Ltd.

Notes to the Financial Statements

• 3) qualifying cash flow hedges to the extent that the hedges are effective.

(ii) Foreign operations

  - The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

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

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

• (d) Classification of current and non-current assets and liabilities An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

• (i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

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

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

• (iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

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

An entity shall classify a liability as current when:

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

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

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

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Ocean Plastics Co., Ltd.

Notes to the Financial Statements

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

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

• (f) Financial Instruments

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

• (i) Financial assets

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

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

• 1) Financial assets measured at amortized cost A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

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

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

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

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Ocean Plastics Co., Ltd.

Notes to the Financial Statements

• 2) Fair value through other comprehensive income (FVOCI)

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

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

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

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss. Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

3) Fair value through profit or loss (FVTPL) All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. Trade receivables that the Group intends to sell immediately or in the near term are measured at FVTPL; however, they are included in the ‘ accounts receivables’ line item. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

• These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

• 4) Impairment of financial assets The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI and contract assets.

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Ocean Plastics Co., Ltd.

Notes to the Financial Statements

The Company measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

• ‧ debt securities that are determined to have low credit risk at the reporting date; and

• ‧ other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’ s historical experience and informed credit assessment as well as forward- looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 180 days past due or the debtor is unlikely to pay its credit obligations to the Company in full.

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘ investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings’.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

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Ocean Plastics Co., Ltd. Notes to the Financial Statements

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘ credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

• ‧ significant financial difficulty of the borrower or issuer;

• ‧ a breach of contract such as a default or being more than 180 days past due;

• ‧ the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• ‧ it is probable that the borrower will enter bankruptcy or other financial reorganization;

• or

‧ the disappearance of an active market for a security because of financial difficulties. Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’ s procedures for recovery of amounts due.

• 5) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

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Ocean Plastics Co., Ltd.

Notes to the Financial Statements

• (ii) Financial liabilities and equity instruments

• 1) Classification of debt or equity

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

• 2) Equity instrument An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

• 3) Treasury shares When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

• 4) Financial liabilities Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

  • Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

• 5) Derecognition of financial liabilities The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

  • On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

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Notes to the Financial Statements

  - 6) Offsetting of financial assets and liabilities Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

• (g) Inventories

• Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

• Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

• (h) Investment in associates Associates are those entities in which the Company has significant influence, but not control or joint control, over their financial and operating policies. Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

• The financial statements include the Company’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

• Gains and losses resulting from transactions between the Company and an associate are recognized only to the extent of unrelated Company’s interests in the associate.

• When the Company’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

• (i) Investments in Subsidiaries On preparing individual financial reports, the Company adopts the equity method to evaluate investees who are under control. In equity method, current incomes and other comprehensive incomes in individual financial report are same with the ones attribute to the parent company in consolidated financial reports. Also, the equity in individual financial report is same with the one attribute to the parent company in consolidated financial reports.

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Notes to the Financial Statements

If the Company has change on the ownership equity of the subsidiary that does not result in the loss of control, it can be as the equity transaction between them.

• (j) Investment property

• Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss. Rental income from investment property is recognized as other revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

• (k) Property, plant and equipment

• (i) Recognition and measurement Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses. If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

• (ii) Subsequent expenditure Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

• (iii) Depreciation Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

• 1) buildings 5~50 years

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Notes to the Financial Statements

• 2) machinery equipment 3~20 years

• 3) other facility 2~20 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

• (iv) Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner occupied to investment property.

• (l) Leases

• (i) Identifying a lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether:

• 1) the contract involves the use of an identified asset – this may be specified explicitly or implicitly, and should be physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has a substantive substitution right, then the asset is not identified; and

• 2) the customer has the right to obtain substantially all of the economic benefits from use of the asset throughout the period of use; and

• 3) the customer has the right to direct the use of the asset throughout the period of use only if either:

• the customer has the right to direct how and for what purpose the asset is used throughout the period of use; or

• the relevant decisions about how and for what purpose the asset is used are predetermined and:

  • － the customer has the right to operate the asset throughout the period of use, without the supplier having the right to change those operating instructions; or

  • － the customer designed the asset in a way that predetermines how and for what purpose it will be used throughout the period of use.

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Notes to the Financial Statements

• (ii) As a lessee

• The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• 1) fixed payments, including in substance fixed payments;

• 2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• 3) amounts expected to be payable under a residual value guarantee; and

• 4) payments for purchase or termination options that are reasonably certain to be exercised. The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

• 1) there is a change in future lease payments arising from the change in an index or rate; or

• 2) there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or

• 3) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or

• 4) there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or

• 5) there are any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

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Notes to the Financial Statements

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

• (iii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease. If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

• (m) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and investment properties and biological assets, measured at fair value, less costs) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

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Notes to the Financial Statements

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

• (n) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’s main types of revenue are explained below.

• (i) Sale of goods

  • The Company manufactures and sells plastic materials and products. The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied. A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

• (ii) Financing components

  • The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the group does not adjust any of the transaction prices for the time value of money.

• (o) Employee benefits

• (i) Defined contribution plans Obligations for contributions to defined contribution plans are expensed as the related service is provided.

• (ii) Defined benefit plans

  • The Company’ s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

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Notes to the Financial Statements

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

• (iii) Other long-term employee benefits

The Company’ s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in which they arise.

• (iv) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

• (p) Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

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Notes to the Financial Statements

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

• (i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;

• (ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• (iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

• (i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

• (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

• 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date, and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

• (q) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

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Notes to the Financial Statements

• (r) Operating segments

  • An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Company). Operating results of the operating segment are regularly reviewed by the Company’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

• (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty: The preparation of the consolidated financial statements in conformity with the Regulations and the IFRSs endorsed by the FSC requires management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

• The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

• (a) Judgment of whether the Company has substantive control over its investees

• Holding 44.62% of the outstanding voting shares in Chun Pin Enterprise Co., Limited., the Company was not the largest shareholder. The Company obtained neither more than half of Chun Pin Enterprise’ s Board seats, nor more than half of the voting rights at a shareholders’ meeting. Therefore, it was determined that the Company only had significant influence on Chun Pin Enterprise.

Information about assumptions and estimation uncertainties that has a significant risk of resulting in a material adjustment within the next financial year is as follows:

• (a) Inventory valuation

• Inventories are measured at the lower of cost or net realizable value. The Company assesses value of inventories that are worn, obsolete, and unmarketable at the reporting date, and writes down the cost of inventories to their net realizable value. Inventory valuation is based on expected market demand in a period of foreseeable future which may fluctuate by rapid change in industry. For the estimation of inventory valuation, please refer to note 6(e) for details.

The Company’s accounting policies include measuring financial and non financial assets and liabilities at fair value through profit or loss.

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Notes to the Financial Statements

The Company’ s financial instrument valuation group conducts independent verification on fair value by using data sources that are independent, reliable, and representative of exercise prices. This financial instrument valuation group also periodically adjusts valuation models, conducts back testing, renews input data for valuation models, and makes all other necessary fair value adjustments to assure the rationality of fair value. The Company strives to use market observable inputs when measuring assets and liabilities. Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

(a) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

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

(c) Level 3: inputs for the assets or liability that are not based on observable market data.

Please refer to Note 6(v) for assumptions used in measuring fair value.

• (6) Explanation of significant accounts:

• (a) Cash and cash equivalents

		December 31,	December	31,
		2020	2019
Revolving funds and cash on hand	$	500		500
Demand deposits and check deposits		173,696	229,633
Cash and cash equivalents in the consolidated statement of $		174,196	230,133
cash flows
Please refer to note 6(v) for the exchange rate risk, interest rate risk, and			sensitivity a	naly
the financial assets and liabilities of the Company.
Financial assets at fair value through profit or loss
		December 31,	December	31,
		2020	2019
Current financial assets designated at fair value
through profit or loss:
Listed domestic stock	$	122,404	93,519

Please refer to note 6(v) for the exchange rate risk, interest rate risk, and sensitivity analysis of the financial assets and liabilities of the Company.

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Notes to the Financial Statements

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

December 31, 2020 Equity investments at fair value through other comprehensive income: Unlisted domestic stock－Taiwan VCM Corporation $ 1,130,019 Unlisted domestic stock－Others 58,990 Total $ 1,189,009	December 31, 2019 567,320 57,497
	624,817

• (i) Fair value through other comprehensive income financial assets

The Company holds this equity investment as long-term strategic investment without any trade purpose, so it is assigned to use fair value through other comprehensive income to evaluate. Hence, the Company recognized dividend revenues 20,496 thousand and 30,817 thousand in 2020 and 2019.

The Company did not dispose strategic investment in 2019 and 2020. The accumulated income and loss in the period did not transfer in equity.

• (ii) Credit risk and market risk information refers to note 6(w).

• (iii) On December 31 of 2020 and 2019, the financial assets which held by the Company did not offer any pledge and assurance.

(d) Notes and trade receivables

Notes receivable from operating activities Trade receivables Less: Loss allowance	December 31, 2020 $ 45,959 581,308 (5,989 ) $ 621,278	December 31, 2019 47,953 504,448 (2,130 )
		550,271

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information, including macroeconomic and relevant industry information. The loss allowance provisions were determined as follows:

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Notes to the Financial Statements

Current 1 to 180 days past due More than 180 days past due Current 1 to 180 days past due More than 180 days past due	December 31, 2020	December 31, 2020
	Gross carrying Weighted- average loss amount rate $ 602,112 - 21,383 10% 3,772 100% $ 627,267 December 31, 2019		Loss allowance provision
			- 2,217 3,772
			5,989
		Weighted- average loss rate - 7% 100%	Loss allowance provision
			- 1,939 191
			2,130

The movement in the allowance for notes and trade receivables were as follows:

Balance at January 1 Impairment losses recognized Impairment losses reversed Balance at December 31	2020	2019
	$ 2,130 5,460 (1,601 ) $ 5,989	1,831 299 -
		2,130

The aforementioned notes and trade receivables of the Company were not pledged as collateral as of December 31, 2020 and 2019.

(e) Inventories

Raw materials Work in progress Finished goods	December 31, 2020 $ 172,460 19,249 176,775 ~~$~~ ~~368,484~~	December 31, 2019
		205,128 24,356 161,612
		~~391,096~~

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Notes to the Financial Statements

The Company’ s relevant inventory details recognized in operating costs in 2020 and 2019 are as follows:

Reversal of write-downs Idle capacity Revenue from sale of scraps and others	2020 $ (4,464) 110,214 3,496 $ 109,246	2020 $ (4,464) 110,214 3,496 $ 109,246	2019
			(8,021 149,387 1,461
		$ 109,246
			142,827

As of December 31, 2020 and 2019, the Company had not provided any inventories as collateral for its loans.

• (f) Investments accounted for using equity method

A summary of the Company’s financial information for investments accounted for using the equity method at the reporting date is as follows:

Subsidiaries Associates (i) Subsidiary			December 31, 2020 2,217,788 2,625,733	December 31, 2019 2,082,470 2,487,402
		$ $

Please refer to consolidated financial report of 2020.

(ii) Associates

Associates which are material to the Company consisted of the followings:

Name of Associates ChunPin Enterprise Co., Ltd	Nature of Relationship with the Group Wholesale of chemical feedstock and products	Main operating location/ Registered country of the Company Taiwan	Proportion of shareholding and voting rights December 31, 2020 44.62 % December 31, 2019 44.62 %	Proportion of shareholding and voting rights December 31, 2020 44.62 % December 31, 2019 44.62 %
			December 31, 2020 44.62 %
				44.62 %

The financial information of the Associate which has materiality on the Company is as follows. It already adjusted the amount in the Associate’s IFRSs individual financial report to reflect the adjustments for fair values and for accounting policy difference:

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Notes to the Financial Statements

Chun Pin Enterprise Co., Ltd

Current assets Non-current assets Current liabilities Non-current liabilities Net assets Operating revenue Profit from continuing operations Other comprehensive income Total comprehensive income Share of net assets of associates as of January 1 Comprehensive income attributable to the Group Dividends received from associates Share of net assets of associates as of December 31		December 31, 2020 $ 794,810 207,248 (86,914) (784 ) $ 914,360	December 31, 2020 $ 794,810 207,248 (86,914) (784 ) $ 914,360	December 31, 2019 734,569 268,791 (94,754) (1,001 ) 907,605
			2020 420,247 172,894 - 172,894	2019 426,507 184,602 - 184,602
		$ $
				2019 396,086 82,361 (73,515 ) 404,932

(iii) Guarantee

As of December 31, 2020 and 2019, the Company had not provided any investment accounted for using equity method as collaterals for its loans.

(g) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company for the years ended December 31, 2020 and 2019, were as follows:

Cost or deemed cost: Balance on January 1, 2020 Additions Transfer from construction in progress and testing equip Disposal Transfer to expense Balance on December 31, 2020	Lands $ 1,483,366 - - - - $ 1,483,366	Buildings and constructions 1,227,362 - 9,225 - - 1,236,587	Machinery and equipment Ot 2,016,155 - 20,183 (15,123 -	her facilities 1,424,223 - 41,600 ) (4,901) - 1,460,922	Construction in progress 21,461 90,078 (71,008) - (803 )	Total 6,172,567 90,078 - (20,024) (803 )
			2,021,215			6,241,818

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Notes to the Financial Statements

Balance on January 1, 2019 Additions Transfer from construction in progress and testing equip Disposal Transfer to expense Balance on December 31, 2019 Depreciation and impairments losses: Balance on January 1, 2020 Depreciation and impairment loss for the year Disposal Balance on December 31, 2020 Balance on January 1, 2019 Depreciation and impairment loss for the year Disposal Balance on December 31, 2019 Carrying amount: Balance on December 31, 2020 Balance on January 1, 2019 l b	$ $ $ $	Lands	Lands	Buildings and constructions 1,232,916 - - (5,554) - 1,227,362 286,303 23,802 - 310,105 266,583 24,704 (4,984 )	Machinery and equipment 2,032,865 - 56,612 (73,322) - 2,016,155 1,420,630 75,167 (3,877 )	Other facilities 1,413,581 - 31,977 (21,335) - 1,424,223 1,007,316 69,320 (4,826 )	Constructionin progress 44,222 87,833 (109,305 - (1,289 ) 21,461 - - - - - - - - 39,728 44,222	Total 6,230,697 87,833 (20,716) (123,958) (1,289 ) 6,172,567
		1,507,113 - - (23,747) -
		1,483,36 - - -	6
								2,714,249 168,289 (8,703 ) 2,873,835
		-			1,491,920 1,367,889 75,906 (23,165 )	1,071,810 950,231 68,184 (11,099 )
	$ $ $	- - -						2,584,703 168,794 (39,248 ) 2,714,249
		-		286,303 926,482 966,333	1,420,630 529,295 664,976	1,007,316 389,112 463,350
								3,367,983
	$							3,645,994

Part of the lands subjected to urban land readjustment plan or were agricultural land, which were not allowed to be held by the Company were held temporarily by third party and registered as mortgage to the Company. As of December 31, 2020 and 2019, carrying amount of above mentioned lands (including investment property) were both $170,706 thousands and the Company is applying for alternation of land use and will transfer their title to the Company once the process of urban land readjustment and alternation of land use complete.

On the other hand, title of the land located in Zhonghe District, New Taipei City, has been transferred to subsidiary for urban land readjustment by the Company and the subsidiary compensated the Company according to related regulation. As of December 31, 2020 and 2019, cumulative carrying amount of lands in such transactions were both $1,346,304 thousands, which were deferred due to related-party transactions.

As of December 31, 2020 and 2019, the collateral details of long-term borrowings and credit agreements, please refer to note 8.

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Notes to the Financial Statements

(h) Right-of-use-assets

The Company leases many assets including land and buildings and vehicles. Information about leases for which the Group as a lessee was presented below:

Cost: Accumulated depreciation: Carrying amount: Balance at January 1, 2020 Balance at December 31, 2020 Balance at January 1, 2019 Additions Balance at December 31, 2019 Balance at January 1, 2020 Depreciation for the year Balance at December 31, 2020 Balance at January 1, 2019 Depreciation for the year Balance at December 31, 2019 Balance at December 31, 2020 Balance at December 31, 2019 Balance at January 1, 2019	Lands $ 9,701	Lands $ 9,701	Buildings and constructions 26,194	Other facilities 34,429	Total 70,324
	$		26,194 26,194 - 52,388 5,239 5,239 10,478 - 5,239 5,239 15,716	34,429 31,027 3,402 65,456 13,705 14,366 28,071 - 13,705 13,705 6,358	70,324
					66,922 3,402
					137,246
					20,884 21,545
					42,429
					- 20,884
					20,884
	$				27,895
	$	7,761 9,701	20,955 26,194	20,724 31,027	49,440
	$				66,922

(i) Investment property

Cost : Balance at January 1, 2020 Reclassification Balance at December 31, 2020 Balance at January 1, 2019 Reclassification from construction in progress Balance at December 31, 2019		Land $ 477,621 (5,787 ) $ 471,834	Buildings 18,391 - 18,391 - 18,391 18,391	Total 496,012 (5,787 ) 490,225
		$ 475,296 2,325 $ 477,621		475,296 20,716 496,012

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Notes to the Financial Statements

Accumulated depreciation and impairment losses: Balance at January 1, 2020 Depreciation for the year Balance at December 31, 2020 Balance at January 1, 2019 Depreciation for the year Balance at December 31, 2019 Carrying amount: Balance at December 31, 2020 Balance at January 1, 2019 Balance at December 31, 2019 Fair value Balance at December 31, 2020 Balance at December 31, 2019	Land $ - - $ - $ - - $ - $ 471,834 $ 475,296 $ 477,621	Buildings 468 1,245 1,713 - 468 468 16,678 - 17,923 $ $	Total
			468 1,245
			1,713
			- 468
			468
	$		488,512
	$		475,296
	$		495,544
			1,934,136
			1,932,501

Part of the lands were agricultural land, which's legal title were not allowed to be held by the Company were held temporarily by third party and registered as mortgage to the Company. The Company is applying for alternation of land use for above lands and their title will be transferred to the Company once the process of alternation of land use complete. Please refer to note 6(g) for further details.

The fair value stated above was according to the latest transaction data announced on the website of Department of Land Administration Ministry of the Interior.

Investment property comprises a number of lands that are leased to third parties. Each of the leases contains a 3 to 15 years non-cancellable period. Subsequent renewals are negotiated with the lessee and no contingent rents are charged. For further information, please refer to note 6(n).

As of December 31, 2020 and 2019, investment property of the Group had been pledged as collateral for long-term borrowings and credit lines, please refer to note 8.

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Notes to the Financial Statements

(j) Other current liabilities

The other current liabilities of the Company were as follows:

Lease liabilities-current Other payables-related parties Unearned Revenues Others Short-term borrowings The short-term borrowings of the Company were summarized Unsecured bank loans Unused short-term credit line Range of interest rates	December 31, 2020 $ 12,895 3,204 14,025 1,846 $ 31,970 as follows: December 31, 2020 $ 200,000 $ 334,843 1.08%~1.16%	December 31, 2020 $ 12,895 3,204 14,025 1,846 $ 31,970 as follows: December 31, 2020 $ 200,000 $ 334,843 1.08%~1.16%		December 31, 2019 21,450 3,540 4,805 10,349 40,144 December 31, 2019 250,000 295,656 1.20%~1.30%
	$
	$

(k) Short-term borrowings

For the collateral for short-term borrowings, please refer to note 8.

(l) Long-term borrowings

The long-term borrowing details and terms of the Company are as follows:

Secured bank loans Less: current portion Total Unused long-term credit lines Secured bank loans Less: current portion Total Unused long-term credit lines	December 31, 2020	December 31, 2020
	Currency Rate Maturity year		Amount
	TWD 0.95%~1.18% 2022.04.17~2031.06.29 December 31, 2019		$ 1,118,750 (54,167 ) $ 1,064,583
				$ 2,391,250
	Currency Rate Maturity year			Amount
	TWD 1.15%~1.43% 2021.12.27~2031.06.29		$ $	1,742,917 (54,167 ) 1,688,750 1,917,083
			$

For the collateral for short-term borrowings, please refer to note 8.

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Notes to the Financial Statements

(m) Leases Liabilities

The lease liabilities of the Company’s were as follows:

Leases Liabilities The lease liabilities of the Company’s were as follows:
Current Non-current	December 31, 2020 $ 12,895 $ 15,128	December 31, 2019
		21,450
		28,023

For maturity analysis, please refer to note 6 (v). The amounts recognized in profit or loss was as follows:

2020 2019 Interest on lease liabilities $ 559 581 The amounts recognized in the statement of cash flows for the Company was as follows: 2020 2019 Total cash outflow for leases $ 21,450 21,432	2020	2019
	559	581
	21,450 21,432

The Company leases land and buildings, and raw material storage tanks. The leases run for four to five years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Some leases provide for additional rent payments that are based on changes in local price indices. Some also require the Company to make payments that relate to the property taxes levied on the lessor and insurance payments made by the lessor; these amounts are generally determined annually.

(n) Operating lease

(i) Leases as lessor

The Company leases out its investment property and other facilities. The Group has classified these leases as operating leases, and please refer to Note 6(i) for the relevant information.

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

Less than one year One and two years Two and three years Three and four years Four and five years More than five years Total undiscounted lease payment	December 31, 2020 $ 9,169 9,281 9,444 9,560 9,727 89,401 $ 136,582	December 31, 2019
		9,070 9,169 9,281 9,444 9,560 104,384
		150,908

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Notes to the Financial Statements

Rental income from investment properties was $11,328 thousand and $21,491 thousand in 2020 and 2019, respectively.

(o) Employee benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

Present value of the defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2020 $ 396,840 (288,733 ) $ 108,107	December 31, 2019 415,756 (313,091 ) 102,665

The Company’s employee benefit liabilities were as follows:

Long-term vacation liability Cash-settled share-based payment liability Total employee benefit liabilities	December 31, 2020 $ 13,699 - $ 13,699	December 31, 2019
		12,784 -
		12,784

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company’ s Bank of Taiwan labor pension reserve account balance amounted to 288,732 thousand as of December 31, 2020. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

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Notes to the Financial Statements

2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Company were as follows:

Defined benefit obligation at January 1 Current service costs and interest cost (income) Remeasurements loss(gain): －Demographic assumptions －Financial assumptions －Experience adjustment Benefits paid Defined benefit obligations at December 31	2020 $ 415,756 5,622 10,612 74 7,555 (42,779 ) $ 396,840	2019 423,982 7,185 1,066 295 8,019 (24,791 )
		415,756

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company were as follows:

Fair value of plan assets at January 1 Interest cost (income) Remeasurements of defined benefit liabilities (assets): －Return on plan assets excluding interest income Contribution paid by employer Benefits paid Fair value of plan assets at December 31	2020 $ (313,091) (1,872) (11,010) (5,539) 42,779 $ (288,733 **) **	2019 (317,596) (2,742) (12,200) (5,344) 24,791
		(313,091 )

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

		2020		~~2019~~
Current service costs	$		3,125		3,535
Net interest of net liabilities for defined benefit
obligations			625		908
	$		**3,750 **		4,443

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Notes to the Financial Statements

Operating cost Selling expenses Administration expenses Research and development expenses	2020 $ 2,874 138 732 6 $ 3,750	2019
		3,471 265 695 12
		4,443

• 5) Remeasurement of net defined benefit liability (asset) recognized in other comprehensive income

The Company’s remeasurements of the net defined benefit liability (asset) recognized in other comprehensive income for the years ended December 31, 2020 and 2019, were as follows:

Accumulated amount at January 1 Recognized during the period Accumulated amount at December 31	2020	2019 118,068 24 118,092
	$ 118,091 8,014 $ 126,105

• 6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increase rate	2020 0.375 % 2.00 %	2019
		0.625 % 2.00 %

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date is $5,593 thousand.

The weighted average lifetime of the defined benefits plans is 7.7 years.

• 7) Sensitivity analysis

When calculating and determining the present value of defined benefit obligations, the Company must use judgments and estimates to determine relevant actuarial assumptions on the balance sheet date, including discount rates, employee turnover rates, and future salary adjustments. Any change in actuarial assumptions may materially affect the amounts of the Company’s defined benefit obligations.

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Notes to the Financial Statements

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation in the years 2020 and 2019 shall be as follows:

Impact on defined benefit

December 31, 2020 Discount rate Future salary increasing rate December 31, 2019 Discount rate Future salary increasing rate	obligation Increased Decreased 0.25% 0.25% 7,555 (7,788) (7,527) 7,341 8,020 (8,274) (8,018) 7,813
	Increased 0.25% 7,555 (7,527) 8,020 (8,018)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2020 and 2019.

• (ii) Defined contribution plans

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $11,313 thousand and $10,859 thousand for the years ended December 31, 2020 and 2019, respectively.

(p) Income tax

The components of income tax in the years 2020 and 2019 were as follows:

(i) Income tax expense

The components of income tax in the years 2020 and 2019 were as follows:

	2020	2019
Current period Deferred tax expense Tax expense $	~~$~~ ~~(1~~) 14,969 14,968	- 17,724
		17,724

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Notes to the Financial Statements

Reconciliation of income tax and profit before tax for 2020 and 2019 is as follows:

Profit excluding income tax Income tax using the Company’s domestic tax rate Tax-exempt income Non-deductible expenses Recognition of previously unrecognized tax losses Current-year losses for which no deferred tax asset was recognized Changes in unrecognized temporary differences Change in provision in prior periods Income tax expense	2020 $ 730,120	2020 $ 730,120	2019 134,811 26,962 (29,220) 656 - 25,865 (6,539) - 17,724
	$	146,024 (33,676) 476 (10,237) - (87,618) (1 ) 14,968

(ii) Deferred tax assets and liabilities

• 1) Unrecognized deferred tax assets

Deferred tax assets have not been recognized is respect of the following items:

Tax effect of deductible Temporary Differences The carryforward of unused tax losses Total	December 31, 2020 $ 405,328 39,136 $ 444,464	December 31, 2019
		492,946 49,896
		542,842

The deductible temporary differences are mainly the share of overseas investment losses and deferred benefits recognized by the equity method.

The R.O.C. Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years for local tax reporting purposes. Deferred tax assets have not been recognized in respect of these items because it is less than more likely that future taxable profit will be available against which the Company can utilize the benefits therefrom.

As of December 31, 2020, the deduction period of the subsidiaries in Mainland China unused tax losses for which no deferred tax assets were recognized are as follows:

Year of loss 2018 (assessed amount) $ 2019 (reported amount)) Total $	Year of loss 2018 (assessed amount) $ 2019 (reported amount)) Total $	Unused tax loss	Expiry date
		66,936 128,746	2028 2029
		195,682

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Notes to the Financial Statements

• 2) Recognized deferred tax assets and liabilities

Deferred tax assets:

Unrealized loss on inventory write-downs Balance at January 1, 2020 $ 11,404 Recognized in profit or loss (893 ) Balance at December 31, 2020 $ 10,511 Balance at January 1, 2019 $ 13,009 Recognized in profit or loss (1,605 ) Balance at December 31, 2019 $ 11,404 Deferred tax liabilities:		Others 675 1,431 2,106 169 506 675	Total 12,079 538 12,617
			13,178 (1,099 ) 12,079

Balance at January 1, 2020 Recognized in profit or loss Balance at December 31, 2020 Balance at January 1, 2019 Recognized in profit or loss Balance at December 31, 2019	Reserve for land value increment tax $ 328,553 - $ 328,553 $ 328,553 - $ 328,553	Difference in the useful life of property, plant, and equipment 62,601 15,507 78,108 45,976 16,625 62,601	Total
			391,154 15,507 406,661
			374,529 16,625 391,154

• (iii) Assessment of tax:

The Company’ s tax returns for the years through 2018 were assessed by the Taipei National Tax Administration.

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Notes to the Financial Statements

(q) Capital and other equity

As of December 31, 2020 and 2019, the number of authorized ordinary shares were 4,000,000 thousand shares with par value of $10 per share, and 227,228 thousand ordinary shares were issued. All issued shares were paid up upon issuance.

(i) Capital surplus

The balances of capital surplus were as follows:

Share premium Treasury share transactions Total	December 31, 2020 $ 680 7,112 $ 7,792	December 31, 2020 $ 680 7,112 $ 7,792	December 31, 2019 680 7,112
		7,792	7,792

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(ii) Retained earnings

The Company's Articles of Incorporation stipulate that Company's net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, unless the amount of the legal reserve is already equal to or greater than the total paid-in capital. Additionally, the Company shall allocate special reserve taking into consideration the operating needs and statutory requirements. Any remaining profit, together with any prior-period undistributed retained earnings, shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

In accordance with the Company’ s dividend policy, if there is profitability for the year, dividends can be distributed in three forms—cash dividend, common stock dividend, or capital surplus transferred to common stock. Distribution shall not be less than 20 percent of the income after deducting legal reserve and special reserve, and only when the Company has significant investment plan or intends to improve financial structure can common stock dividends or capital surplus transferred to common stock substitute for cash dividend. However, cash dividends shall account for at least 10 percent of dividend distribution.

1) Legal reserve

• When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

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Notes to the Financial Statements

• 2) Special reserve

In accordance with Ruling No. 1010012865 issued by the FSC on April 6, 2012, a portion of current-period earnings and undistributed prior-period earnings shall be reclassified as special earnings reserve during earnings distribution. The amount to be reclassified should equal the current-period total net reduction of other shareholders’ equity. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions. As of December 31, 2020 and 2019, the balance of special earnings reserve were $2,978,245 thousand.

• 3) Earnings distribution

  • The appropriations of earnings for 2019 and 2018 had been approved during the shareholders’ meeting on June 22, 2020 and June 29, 2019, respectively. The operating result showed net loss after tax; consequently, no surplus distribution is planned.

• (iii) Treasury shares

As of December 31, 2020. the company's treasury stock balance is $36,189 thousand. Before the amendment to the R.O.C. Company Act on November 2001, the Company’ s subsidiaries, Chang Xin Co., Ltd. and Hong Da Investment Co., Ltd., acquired $2,939 thousand and $3,604 thousand of the Company’s shares, respectively.

In accordance with the requirements of the Securities and Exchange Act, treasury shares held by the Company shall not be pledged, and no shareholder rights are granted before their transfer.

• (r) Earnings per share

• (i) Basic earnings per share

The details on the calculation of basic earnings per share and diluted earnings per share of the Company as follows:

Basic earnings per share Profit of the Company for the year－continuing operations Company for the year－ discontinued operations Profit attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (thousand share) Basic earnings per share (NT dollars)	Basic earnings per share Profit of the Company for the year－continuing operations Company for the year－ discontinued operations Profit attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (thousand share) Basic earnings per share (NT dollars)	2020 2019 $ 715,152 117,087 Profit/(loss) of the - - $ 715,152 117,087 220,686 220,686 $ 3.24 0.53
		$

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Notes to the Financial Statements

2020 Diluted earnings per share Profit of the Company for the year－continuing operations $ 715,152 Weighted average number of ordinary shares (thousand share) 220,686 Effects of dilutive potential ordinary shares (in thousands of shares) Effect of employee share bonus 235 Weighted average number of ordinary shares (diluted) (thousand share) 220,921 Diluted earnings per share (NT dollars) $ 3.24 (s) Revenue from contracts with customers (i) Details of revenue 2020 Main market area Taiwan $ 1,924,142 India 1,299,490 USA 376,551 China 110,891 Other country 697,081 $ 4,408,155 Main product/service line Plastic material $ 2,683,720 Plastic product 1,724,435 $ 4,408,155	2020	2020	2020			2019 117,087 220,686 - 220,686 0.53 2019
			715,152 220,686 235
			220,921
			3.24
			2020
						1,832,465 1,535,523 663,991 79,022 345,186
						4,456,187
						2,443,216 2,012,971
						4,456,187

(ii) Contract balances Notes and trade receivables Less: allowance for impairment Total Contract liabilities		December 31, 2020 $ 627,267 (5,989 ) $ 621,278	December 31, 2020 $ 627,267 (5,989 ) $ 621,278	December 31, 2019 552,401 (2,130 ) 550,271	January 1, 2019 732,807 (1,831 ) 730,976
		$	28,616	4,805	4,531

For details on trade receivables and allowance for impairment, please refer to note 6(d). Contract liabilities mainly arose from advance receipt of loans from customers and payments for real estate. The Company will record revenue when the product is delivered to the customer or when the property is completed and the ownership is transferred.

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Notes to the Financial Statements

The amount of revenue recognized for the years ended December 31 2020 and 2019 that was included in the contract liability balance at the beginning of the period were 2,342 thousand and 2,665 thousand, respectively.

• (t) Employee compensation and directors' and supervisors' remuneration

Pursuant to the Company’s the Articles of Incorporation, it shall contribute no less than 1% of the profit as employee compensation and more than 2% as compensation to directors and supervisors when there is profit for the year. However, if the Company has accumulated deficits, the profit shall be reserved to offset the deficit. The persons who are entitled to receive cash or shares as employee stipulated in the preceding paragraph include the employees of the Company's affiliates who meet certain conditions.

The estimated amount of compensation for employees of the Company in 2020 is 9,545 thousand, and the one for directors and supervisors is 7,299 thousand. The estimation is based on the pre-tax net profit of the company for each period before deducting the remuneration of employees, directors and supervisors multiplied by the amount of staff remuneration and the distribution of directors and supervisors which are stipulated in the company's articles of association. It is also reported as operating costs or operating expenses in 2020.

Since the Company had accumulated deficits in 2019, there was no need to estimate the compensation to employees, directors, and supervisors. Related information is available on the website of Market Observation Post System.

(u) Non-operating income and expenses

• (i) Interest income

• For the years ended December 31, 2020 and 2019, the details of other income were as follows:

Interest income from bank deposits

$	2020 2019
	399 1,746

(ii) Other income

For the years ended December 31, 2020 and 2019, the details of other income were as follows:

Rent income Dividend income Other income, Others	2020 $ 11,328 24,381 18,333 $ 54,042	2019
		21,491 37,630 19,546
		78,667

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Notes to the Financial Statements

• (iii) Other gains and losses

For the years ended December 31, 2020 and 2019, the details of other gains and losses were as follows:

			2020			2019	2019
Gain (loss) on disposal of property, plant and
equipment		$		(3,352)			18,642
Foreign exchange losses			(33,688)					(3,682)
Gains on financial assets at fair value through profit or
loss				28,885			40,792
Miscellaneous disbursements				(101 )			(1,867 )
		$		**(8,256) **			53,885
ncial instruments
Credit risk
1) Credit risk exposure
The carrying amount of financial assets except for cash and cash						equivalents,
represents the maximum amount exposed to credit risk.				As of December			31, 2020
and 2019, the maximum amount exposed to credit risk were 758,513 thousand and
643,790 thousand, respectively.
2) Concentration of credit risk
The sales of the Company are not significantly concentrated					within			a few
customers. As of December 31, 2020 and 2019,			the balance of accounts receivable
due from the 10 largest customers were 40% and 33%.
Liquidity risk
The following table shows the contractual maturities			of financial liabilities, including
estimated interest payments and excluding the impact			of netting agreements.
Carrying	Contractual	Within 6	6-12					Over
amount	cash flows	months	months 1-2 years 2-5 years					5 years
December 31, 2020
Non-derivative financial liabilities
Secured bank loans $ 1,118,750	1,199,571	33,075	33,174	215,242	583,279			334,801
Unsecured bank loans 200,000	200,266	200,266	-	-	-			-
Notes payables 454,723	454,723	454,723	-	-	-			-
Other payables (including related 115,418	115,418	115,418	-	-	-			-
parties) 28,023	28,575	8,805	4,391	7,979	7,400			-
$ 1,916,914	1,998,553	812,287	37,565	223,221	590,679			334,801
Lease liabilities

(v) Financial instruments

• (i) Credit risk

The carrying amount of financial assets except for cash and cash equivalents, represents the maximum amount exposed to credit risk. As of December 31, 2020 and 2019, the maximum amount exposed to credit risk were 758,513 thousand and 643,790 thousand, respectively.

The sales of the Company are not significantly concentrated within a few customers. As of December 31, 2020 and 2019, the balance of accounts receivable due from the 10 largest customers were 40% and 33%.

(ii) Liquidity risk

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Notes to the Financial Statements

December 31, 2019 Non-derivative financial liabilities Secured bank loans Unsecured bank loans Notes payables Other payables (including related parties) Lease liabilities		Carrying amount $ 1,742,917 250,000 515,041 84,383 49,473 $ 2,641,814	Contractual cash flows 1,880,146 250,040 515,041 84,383 50,585 2,780,195	Within 6 months 38,416 250,040 515,041 84,383 11,005 898,885	6-12 months 1-2	years 2-5 years 546,825 846,417 - - - - - - 13,196 15,379 560,021 861,796	Over 5 years 409,947 - - - -
					38,541 - - - 11,005 49,546	546,825 - - - 13,196 560,021
							409,947

The Company does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Currency risk

1) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk were as follows:

Financial assets: Monetary items JPY USD Financial liabilities Monetary items JPY	December 31, 2020 December 31, 2019	December 31, 2020 December 31, 2019	December 31, 2020 December 31, 2019
	Local currency $ 21,297 - 10,434	Exchange Local rate TWD currency 28.10 293,195 8,281 28.10 598,446 21,776 - - 1,420	Exchange rate TWD 30.10 249,258 30.10 655,458 0.28 393

2) Sensitivity analysis

The Company’ s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade receivables, loans and borrowings; and trade and other payables that are denominated in foreign currency.

A strengthening (weakening) of 1% of the TWD against the JPY, USD, and HKD as of December 31, 2020 and 2019, would have increased (decreased) the net profit after tax by $2,442 thousand and $3,253 thousand, respectively. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the reporting date. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases.The analysis is performed on the same basis for 2020 and 2019.

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Notes to the Financial Statements

• 3) Foreign exchange gain and loss on monetary items

  • Since the Company has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For years 2020 and 2019, foreign exchange gain (loss) (including realized and unrealized portions) amounted to (33,688) thousand and (3,682) thousand, respectively.

• (iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Company’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents the Company management's assessment of the reasonably possible interest rate change.

If the interest rate had increased / decreased by 0.25%, the Company’s net income would have increased / decreased by $2,237 thousand and $3,486 thousand for the year ended December 31, 2020 and 2019 with all other variable factors remaining constant, respectively.

• (v) Other market price risk

For the years ended December 31, 2020 and 2019, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the profit and loss as illustrated below:

basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:	basis for the profit and loss as illustrated below:
2020 2019 Price of securities Other comprehensive Other comprehensive at the reporting date income after tax Net income income after tax Net income Increasing 1% $ 11,890 1,224 6,248 935 Decreasing 1% $ (11,890 ) (1,224 ) (6,248 ) (935 )
Increasing 1% $ Decreasing 1% $
	11,890		1,224		6,248
	(11,890	)	(1,224	)	(6,248	)

(vi) Fair value of financial instruments

• 1) Fair value hierarchy

• The carrying amount and fair value of the Company’ s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

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Notes to the Financial Statements

Financial assets at fair value through profit or loss Designated at fair value through profit or loss–current Financial assets at fair value through other comprehensive income Fair value through other comprehensive income equity instrument Total Financial assets at fair value through profit or loss Designated at fair value through profit or loss– current Financial assets at fair value through other comprehensive income Domestic unlisted stock Total			December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020
	Book Value $ 122,404 1,189,009 $ 1,311,413				Fair Value
			Level 1 122,404					Total
		$						122,404
			-					1,189,009
		$	122,404					1,311,413
	Book Value $ 93,51 9 624,817 $ 718,336				Fair Value
			Level 1 93,519		Level 2 - - -	Level 3 - 624,817 624,817		Total
								93,519
			-					624,817
			93,519					718,336

2) Valuation techniques for financial instruments measured at fair value If quoted prices of financial instruments are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and the prices represent actual and regularly occurring market transactions on an arm’ s length basis, then the financial instrument is regarded as quoted in an active market.

If the condition above is not met, the market is inactive. If the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide.

If the financial instruments held by the Company are in active market, its fair value hierarchy and nature are as follows:

• The stock of listed companies and domestic open end funds are financial instruments in active market, and the fair value thereof is decided by the market.

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Notes to the Financial Statements

Measurements of fair value of financial instruments without an active market are based on a valuation technique or quoted price from a competitor. Fair value measured by a valuation technique can be extrapolated from similar financial instruments, the discounted cash flow method, or other valuation technique including a model using observable market data at the reporting date.

If the financial instruments held by the Company are in no active market, its fair value category and nature are as follows:

• Unquoted equity instruments: except acquiring the latest transaction price as fair value, others adopt market approach of comparable business. This method mainly assumes price-book of investees, enterprise value, income after tax, and the stock price of comparable listed company to calculate price-book ratio, enterprise value ratio, and earnings per share as a measure basis. This estimated fair value is already adjusted for the lack of liquidity.

• 3) Transfer between level 1 and level 3 The Company holds an investment in equity shares of Fuzetec Technology Co., Ltd., which is classified as fair value through other comprehensive income, with a fair value of 122,404 thousand as of December 31, 2020 (December 31, 2019: 93,519 thousand). The fair value of the investment was previously categorized as Level 3 as of December 31, 2019. This was because the shares were not listed on an exchange and there were no recent observable arm’ s length transactions in the shares. During 2019, Fuzetec Technology Co., Ltd. listed its equity shares on an exchange, management changed valuation technique to determine the fair value used a published price quotation in Taipei Exchange, the fair value measurement was transferred from Level 3 to Level 1 of the fair value hierarchy as of December 31, 2019. There were no transfers in 2020.

• 4) Reconciliation of Level 3 fair values

Opening balance, January 1, 2020 Total gains and losses recognized: In other comprehensive income Ending Balance, December 31, 2020 Opening balance, January 1, 2019 Total gains and losses recognized In profit or loss In other comprehensive income Transfers out of Level 3 Ending Balance, December 31, 2019			Fair value through other comprehensive income Unquoted equity instruments 624,817 564,192 1,189,009	Fair value through other comprehensive income Unquoted equity instruments 624,817 564,192 1,189,009	Total 624,817 564,192 1,189,009
		$ 52,727 40,792 - (93,519 ) $ -		750,489 - (125,672) - 624,817	803,216 40,792 (125,672) (93,519 ) 624,817

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Notes to the Financial Statements

For the years ended December 31, 2020 and 2019, total gains and losses that were included in “ other gains and losses” and “ unrealized gains and losses from financial assets at fair value through other comprehensive income” were as follows:

Total gains and losses recognized In profit or loss, and presented in “other gains and losses” In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income”	2020 2019 $ - 40,792 564,192 (125,672)

• 5) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

Most of the fair value of the Company classified as level 3 is an equity instrument in no active market which has multiple significant unobservable inputs. Because the inputs are mutual independent, there is no relevance.

• Inter-relationship

• between significant

• Valuation Significant unobservable inputs and

• Item technique unobservable inputs fair value measurement Comparable ‧ P/E ratio (10.21~15.22 and The estimated fair value company analysis 10.83~19.21 on December would increase 31, 2020 and 2019, (decrease) if: respectively) ‧ The P/E ratio and control premium were higher (lower);

Financial assets at fair value through other comprehensive income equity investments without an active market

• ‧ Lack-of-Marketability Discount were lower (higher);

• ‧ Lack-of-Marketability Discount were lower Discount (17.71%~27.56% (higher); and 19.05%~27.96% on December 31, 2020 and 2019, respectively） ‧ The P/B ratio and

• ‧ P/B ratio (1.36~2.35 and control premium were 1.35~2.00 on December 31, higher (lower).

• ‧ P/B ratio (1.36~2.35 and 1.35~2.00 on December 31, 2020 and 2019, respectively)

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Notes to the Financial Statements

• 6) Fair value measurements in Level 3-sensitivity analysis of reasonably possible alternative assumptions

• The method to derive at the fair value of financial instruments is reasonable but could yield different outcomes when using different multipliers. For fair value measurements in Level 3, changing one or more of the assumptions to reflect reasonably possibilities of alternative assumptions would have the following effects:

December 31, 2020 Financial assets at fair value through other comprehensive income Equity investments without an active market December 31, 2019 Financial assets at fair value through other Inputs Variation P/E ratio 1% Discount rate 1% P/B ratio 1% comprehensive income Equity investments without an active P/E ratio 1% market Discount rate 1% P/B ratio 1%	F	Pro	fit or loss	Other comprehensive income Favourable Unfarourable 16,121 (16,121) 3,873 (3,873) 7,212 (7,212) 6,577 (6,577) 1,763 (1,763) 5,422 (5,422)
		avourable - - - - - -	Unfarourable - - - - - -	Favourable 16,121 3,873 7,212 6,577 1,763 5,422

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

• (w) Financial risk management

• (i) Overview

The Company have exposures to the following risks from its financial instruments:

• 1) credit risk

• 2) liquidity risk

• 3) market risk

This note expresses the risk exposure information of the above-mentioned risk of the Company, and the Company’s objectives, policies and processes for measuring and managing the risks. For more disclosures about the quantitative effects, please refer to the respective notes in the consolidated financial statements.

(ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

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Notes to the Financial Statements

The Company’ s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

• (iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and investments in debt securities.

• 1) Trade and other receivables The Company’ scredit risk exposure is mainly affected by individual customer’ s conditions. However, management also takes into consideration the statistical data of the Company’ s customer, including the default risk of the customer's industry and country, as these factors may affect credit risk.

• The accounting Department has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’ s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, when available, and, in some cases, bank references. Purchase limits are established for each customer and represent the maximum open amount without requiring approval from the Risk Management Committee; these limits are reviewed quarterly. Customers that fail to meet the Company’ s benchmark creditworthiness may transact with the Company on a prepayment basis or by providing collateral.

• The company has set up allowances for bad debt accounts to reflect estimates of losses incurred in accounts receivable, other receivables and investments. The main components of the allowance account include specific loss components related to individual major risk insurance and combined loss components established for similar asset groups that have occurred but have not been identified. The combined loss allowance account is determined based on historical payment statistics of similar financial assets.

• 2) Investments The exposure to credit risk for the bank deposits and other financial instruments is measured and monitored by the Company’s finance department. The Company only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Company does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

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Notes to the Financial Statements

• 3) Endorsements and guarantees

  • The Company’s policy states that providing financial guarantees is only between parent company and subsidiaries. As of December 31, 2020 and 2019, endorsement guarantee provided by the Company were both 660,420 thousand, respectively.

• (iv) Liquidity risk

• Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’ s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’ s reputation.

• Generally, the Company ensures that it has sufficient cash to support expected operating expenditure in a short term, including financial liabilities, but excludes potential impact which can not be predicted reasonably such as nature disasters. Moreover, as of December 31, 2020 and 2019, the Company’ s unused credit line respectively were 2,726,093 thousand and 2,212,739 thousand.

• (v) Market risk

• Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Company’ s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

• 1) Currency risk The Company is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Company’s entities. The functional currency of group is mainly TWD, and the currencies used in these transactions are the TWD, USD and JPY.

• 2) Interest rate risk The Company’s interest risk arose from short term and long term borrowings. Since the short term borrowings are at floating rate, the fluctuation in interest rates will lead to movements in future cash flows.

• 3) Other market price risk The Company is exposed to equity price risk due to the investments in stocks listed on domestic markets, and fund investment on domestic and foreign markets. The equity investment is a strategic investment and is not held for trading. The Company does not actively trade in these investments as the management of the Company manages the risk by holding different investment portfolios. The Company assigned a specific team to supervise the equity price risk, so as to avoid or minimize the risk from the hedging position.

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Notes to the Financial Statements

(x) Capital management

The Board of Directors aims to keep a stable capital base to maintain the confidence of investors, creditors and the market, so as to support the development of future operations. Capital includes the share capital, capital reserve, retained earnings and non controlling interests of the Group. The Board of Directors controls the return on capital and at the same time controls the level of ordinary stock dividends.

As of December 31, 2020 and 2019, the Company’s debt-to-equity ratio at the end of the reporting period, were as follows:

Total liabilities Less: cash and cash equivalents Net debt Total equity Debt-to-equity ratio at 31 December			December 31, 2020 2,566,567 (174,196 ) 2,392,371	December 31, 2019 3,219,583 (230,133 ) 2,989,450
		$ $
		$	6,604,117	5,327,466
			36.23 %	56.11 %

The method of capital management of the Company had not changed as of December 31, 2020 and 2019. The debt to equity ratio was reduced on December 31, 2020, due to the decrease in net debt caused by the repayment of long term borrowings.

(y) Investing and financing activities not affecting current cash flow

The Group’ s investing and financing activities which did not affect the current cash flow in the years ended December 31, 2020 and 2019, were as follows:

• (i) For right-of-use asset under lease, please refer to notes 6(h).

• (ii) Reconciliation of liabilities arising from financing activities were as follows:

financing activities Long-term borrowings term borrowings Lease liabilities Total liabilities from financing activities Long-term borrowings Short-term borrowings Lease liabilities Total liabilities from	January 1, 2019 $ 1,960,000 250,000 66,922 $ 2,276,922 January 1, 2020 $ 1,742,917 250,000 49,473 $ 2,042,390	January 1, 2019 $ 1,960,000 250,000 66,922 $ 2,276,922 January 1, 2020 $ 1,742,917 250,000 49,473 $ 2,042,390	January 1, 2019 $ 1,960,000 250,000 66,922 $ 2,276,922 January 1, 2020 $ 1,742,917 250,000 49,473 $ 2,042,390		Cash flows	Cash flows	Non-cash changes	Non-cash changes	Non-cash changes	Non-cash changes	Fair value changes December 31, 2019 - 1,742,917 Short- - 250,000 -------------------- 49,473 - 2,042,390 Fair value ment changes December 31, 2020 - 1,118,750 - 200,000 - 28,023 - 1,346,773
							Acquisition - - -
					(624,167) (50,000) (21,450 )
					(695,617	)	-
				Cash flows
								Foreign exchange movement - - -------------------- -
			1,960,000 250,000 66,922 2,276,922
				(237,934

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Notes to the Financial Statements

(7) Related-party transactions:

(a) Names and relationship with related parties

ed-party transactions: Names and relationship with related parties
Name of related party	Relationship with the Company
Fine Environment Technologies Co., Ltd	The Company's
subsidiar Chang Xin Co., Ltd	The Company's
subsidiar
Hong Da Investment Co., Ltd.	The Company's subsidiar
Fermat Enterprises Ltd.	The Company's
subsidiar UNIVERSE ENTERPRISES, LTD. The Company's
subsidiar Ocean Group Ltd.	The Company's
subsidiar
Sage Holdings Ltd.	The Company's subsidiar
OPC Holdings Ltd.	The Company's subsidiar
Rise Future International Ltd.	The Company's subsidiar
Shen Yang Development Co., Ltd.	The Company's
subsidiar Ocean Plastics (Hui Zhou) Co., Ltd. The Company's
subsidiar HUNAN OCEAN WIDE PLASTICS LTD. The Company's
subsidiar Ocean Plastics (Dong Guan) Co., Ltd The Company's
subsidiar Chun Pin Enterprise Co., Ltd.	An associate
Chin Yi Ho Hang, Ltd.	Same chairman with the Group
Yee Fong Chemical & Industrial Co., Ltd.	The director of this company is the president of
the

Group

• (b) Significant transactions with related parties

(i) Operating revenues

ficant transactions with related parties Operating revenues
Subsidiaries		2020 2019
		$ 61,529 46,163

Except for sales to the parent company, the prices charged approximated the market price. The credit terms ranged from 60 to 180 days. Amounts receivable from related parties was uncollateralized, and no expected credit loss were required after the assessment by the management.

(ii) Purchase

Subsidiaries		2020 2019
	$	58,329 343,524

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Notes to the Financial Statements

(iii) Receivables from related parties

Account	Relationship	December	December	31,	December	December
			2020		**31, **	2019
Accounts payables		Subsidiaries		$		23,198
	12,048 Notes payables		Subsidiaries
			325			82
		$	23,523			12,130

The trade receivables from related parties over the credit terms should be recorded under other receivable to related parties and long-term accounts receivables due from related parties.

(iv) Payables to related parties

(v)	Account	Relationship		December 31, 020 -	December 31, 2019
			$ $		26,608
				2020 28,521	2019 18,833

The Companycommissioned its associate to operate oil storage tanks. The outstanding balances of management expenses on December 31, 2020 and 2019, were $3,204 thousand and

$3,540 thousand, which are presented as “other payables to related parties”.

(vi) Loans to related parties

Loans to related parties
Ocean Plastics (Dong Guan) Co., Ltd.		December 31, 2020 91,352	December 31, 2019
	$		82,845

The Company loans to Ocean Plastics (Dong Guan) Co., Ltd., because the trade receivable s from related parties are overdue, that it should be regarded as loans, and the amount was recorded under other receivable to related parties. There is no expected credit loss required after the management’s assessment.

(vii) Guarantees

As of December 31, 2020 and 2019, the Company had provided a guarantee for loans taken out by subsidiaries, the credit limit of the guarantee was $660,420 thousand. At December 31, 2020 and 2019, the Company and some of subsidiaries collectively provided lands as collaterals for its long-term and short-term loans, the credit limit of the guarantee was

$5,350,000 thousand and $5,420,000 thousand, respectively.

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Notes to the Financial Statements

(viii) Leases

In January 2019, the Company leased an high-pressure spherical tank from its associate. A six year lease contract was entered into, and the rent was determined based on the rental rates in the vicinity. The total value of the contract was $52,800 thousand. For 2020 and 2019, the interest expenses were $156 thousand and $332 thousand. As of December 31, 2020 and 2019, the lease liabilities had amounted to $4,388 thousand and $17,432 thousand.

In May 2017, the Company leased from other related parties an office building as its headquarter on Juguang Road, Taipei City, and the land in Zhongli Dist., Taoyuan City. A five year lease contract was signed, and the rent was determined based on land rental rates in the vicinity. The total value of the contract was $37,000 thousand. For 2020 and 2019, interest expenses were 367 thousand and 219 thousand. As of December 31, 2020 and 2019, lease liabilities had amounted 21,681 and 28,714 thousand.

(c) Key management personnel compensation

Key management personnel compensation comprised:

Key management personnel compensation comprised:
Short-term employee benefits Post-employment benefits Other long-term benefits Total	2020 $ 6,602 5 1 $ 6,608	2019
		6,533 8 1
		6,542

• (8) Pledged assets:

The carrying values of pledged assets were as follows:

December 31, Pledged assets Object 2020	December 31, 2019
Property, plant and equipment Long-term and short-term loans $ 2,316,615 Investment property Long-term and short-term loans 439,529 Other financial assets Trust account 14,831 Total $ 2,770,975	2,331,177 445,316 -
	2,776,493

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Notes to the Financial Statements

(9) Commitments and contingencies:

(a) Significant Commitments and Contingencies were as follows: (i) The Company’s unrecognized contractual commitments are as follows:

December 31, 2020 Acquisition of property, plant and equipment $ 48,847 The Company’s outstanding standby letter of credit are as follows: December 31, 2020 Outstanding standby letter of credit $ 15,157	December 31, 2020		December 31, 2019
			10,189
			December 31, 2019
			4,344

(ii) The Company’s outstanding standby letter of credit are as follows:

(iii) The joint construction contract signed by the Company for the sale of the built real estate is as follows:

follows:
Joint construction method Joint construction and allocation of housing units	Project name
	Xinglong Section, Wenshan District

(iv) The amounts of endorsement and guarantee provided by the Company for the borrowings and business of subsidiaries, please refer to note 7.

(b) Major contingent liabilities: None.

(10) Losses due to major disasters: None.

(11) Subsequent Events: None.

(12) Others:

(a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

By function By item		2020			2019
	Cost of Sale	Operating Expense	Total	Cost of Sale	Operating Expense	Total
Employee benefits
Salary	25,013	6,804	31,817	25,637	6,987	32,624
Labor and health insurance	11,192	3,870	15,062	11,435	3,865	15,300
Pension	-	13,623	13,623	-	6,472	6,472
Director’s remuneration	14,815	4,003	18,818	15,033	4,271	19,304
Others	181,539	9,539	191,078	182,041	8,105	190,146
Depreciation	-	-	-	-	-	-
Amortization	-	-	-	-	-	-

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Ocean Plastics Co., Ltd. Notes to the Financial Statements

For the years ended December 31, 2020 and 2019, additional information of number of employee and employee benefit were as follows:

Number of employees Number of directors who were not employees The average employee benefit The average salaries and wages Rate of change of the average salaries and wages Salaries of supervisor			2020 463 8 912 767 13.13 % -	2019
				474
				7
		$		822
		$		678
				- %
		$		-

The Company’s compensation policy (including directors, managers, and employees) is as follows:

Directors’ compensation include compensation, salaries and fees. The compensation policy in in Articles of Incorporation was determined based on operating condition. It was reported to the Compensation Committee, being approved in Board of Directors and being notified to shareholders. The fares for directors were determined in Board of Directors and should be paid regardless of its profit. The ones for the directors who double as employees would be determined in Board of Directors based on the peer industry standards.

In the compensation policy for the Company’s managers and employees, besides their education and experience, it should also consider the operating profit and prospects. The distribution standards depend on production achievement rate, yield rate and net operating profit of the month. Year- end bonus is based on the year profit and varies on each department which means the compensation system is related to the performance of the Company.

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Notes to the Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company:

(i) Loans to other parties:

(In Thousands of New Taiwan Dollars)

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period (Note 4)	Ending balance (Note 5)	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower (Note 2)	Transaction amount for business between two parties	Reasons for short- term financing	Allowance for bad debt	Colla	teral	Individual funding loan limits (Note 3)	Maximum limit of fund financing (Note 3
													Item	Value
0	The Company	OCEAN PLASTICS (DONG GUAN) CO.,LTD.	Other Receivables and long- term Receivables	Yes	99,408	91,352	91,352	-	1	12,474	Operation Capital	-		-	1,320,823	2,641,647

Note 1: The numbering is as follows: 1. “0” represents the parent company.

2.Subsidiaries are sequentially numbered from 1.

Note 2: Financing purposes:

• 1 represents a trading counterparty.

■ 2 indicates the necessity of short-term financing.

Note 3: The total loans to others shall not exceed 40% of the net value of the Company, and the loans to an individual party shall not exceed 20% of the net value of the Company. The net value is based on the amount disclosed the latest financial statements.

Note 4: The cumulative maximum balance of loans to others from the current year to the reporting month includes the amount transferred from overdue receivables. Note 5: The highest amounts were approved by the Board of Directors.

(ii) Guarantees and endorsements for other parties:

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Name of guarantor	Counter guaran endor	-party of tee and sement	Limitation on amount of guarantees and endorsement sfor a specific enterprise (Note 3)	Highest balance for guarantees and endorsements during the period (Note 4)	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements (Note 3)	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements /guarantees to third parties on behalf of parent company	Endorsements /guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company (Note 2)
0	The Company	UNIVERSE ENTERPRIS ES, LTD.	2	3,302,058	20,000	20,000	-	-	0.30 %	5,283,294	Y	N	N
0	The Company	Chang Xin Co., Ltd.	2	3,302,058	640,420	640,420 (Note 5)	198,425	-	9.70 %	5,283,294	Y	N	N
1	FINE ENVIRONME NT TECHNO LOGIES CO., LTD.	CHANG XIN CO., LTD.	4	7,315	2,999	2,999 (Note 5)	-	2,999	20.50 %	11,704	N	N	N
2	HONG DA INVESTMEN T CO., LTD.	CHANG XIN CO., LTD.	2	68,088	5,134	5,134 (Note 5)	-	5,134	1.51 %	170,220	N	N	N

Note 1: The numbering is as follows: 1. “0” represents the parent company.

2.Subsidiaries are sequentially numbered from 1.

Note 2: There are the following 7 types of relationship between the guarantee and the guarantor:

1. Trading counterparty.

2. The Company holds more than 50% of the voting shares in the entity, directly and indirectly.

3. The entity holds more than 50% of voting shares in the Company, directly and indirectly.

4. The Company holds more than 90% of voting shares in the entity, directly and indirectly.

5. An entity in the construction industry mutually guaranteed pursuant to a project contract.

6. The stockholders of the Company provide guarantees or endorsements for the entity in proportion to percentage of ownership for joint investment.

7. Performance guarantees for presale contracts for entities in the same industry pursuant to the Consumer Protection Act.

Note 3: The endorsement and guarantee, provided by the Company and Fine environment Technology Co., Ltd. for a single entity, shall not exceed 50% of the guarantor’ s net worth, and the total shall not exceed 80% of the net worth of the guarantor. The endorsement and guarantee, provided by Changxin Xinye Co., Ltd. for a single party, shall not exceed 80% of the guarantor’s net worth, and the total shall not exceed 100% of the guarantor’s net worth. The endorsement and guarantee, provided by Hongda Investment Co., Ltd. for a single entity, shall not exceed 20% of the guarantor’s net worth, and the total amount shall not exceed 50% of the guarantor’s net worth.

Note 4: The highest balance of the endorsement guarantee for others in the current year.

Note 5: The company and its 100% direct or indirect subsidiaries pledged their jointly held land as collateral.

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Notes to the Financial Statements

(iii) Securities held as of December 31, 2020 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title		Endingbalance	Endingbalance		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company	Taiwan VCM Corporation	-	Fair value through other comprehensive income equity instrument	34,317	1,130,019	12.46 %	1,130,019
〃	E'DALE TECHNOLOGY CO., LTD.	-	〃	630	21,087	3.38 %	21,087
〃	PAN OCEAN INC.	-	〃	152	6,890	15.07 %	6,890
〃	ULTRA-PAK INDUSTRIES CO., LTD.	-	〃	3,008	31,013	7.00 %	31,013
〃	MICROCELL COMPOSITE COMPANY	-	〃	237	-	4.32 %	-
〃	FUZETEC TECHNOLOGY CO., LTD.	-	Designated at fair value through profit or loss- current (stock)	2,591	122,404	8.25 %	122,404
CHANG XIN CO., LTD.	ULTRA-PAK INDUSTRIES CO., LTD.	-	Fair value through other comprehensive income equity instrument	1,743	17,967	4.06 %	17,967
〃	COSMACTIVE BROADBAND NETWORKS CO., LTD.	-	〃	1	-	0.80 %	-
HONG DA INVESTMENT CO., LTD.	ACER INCORPORATED	-	Designated at fair value through profit or loss- non- current (stock)	119	2,808	0.05 %	2,808
〃	UNITED MICROELECTRON ICS CORP.	-	〃	29	1,364	- %	1,364
〃	Capital SZSE SME Price Index Exchange Traded Fund -TWD	-	〃	400	7,345	- %	7,345
〃	Fuh Hwa South Africa Short-Term Income ZAR Fund A	-	Designated at fair value through profit or loss- current (fund)	149	4,720	- %	4,720
〃	ULTRA-PAK INDUSTRIES CO., LTD.	-	Fair value through other comprehensive income equity instrument	1,482	15,277	3.45 %	15,277
〃	E'DALE TECHNOLOGY CO., LTD.	-	〃	580	19,417	3.11 %	19,417
〃	FUZETEC TECHNOLOGY CO., LTD.	-	Designated at fair value through profit or loss- current (stock)	2,574	121,628	8.20 %	121,628
FINE ENVIRONMENT TECHNOLOGIES CO., LTD.	MINIMA TECHNOLOGY CO., LTD.	-	Fair value through other comprehensive income equity instrument	413	10,287	1.06 %	10,287
〃	MICROCELL COMPOSITE COMPANY	-	〃	237	-	4.32 %	-
FERMAT ENTERPRISES, LTD.	Applied Wireless Indentifications Group, INC.	-	〃	500	-	- %	-
〃	Ubique Polymers PtyLtd.	-	〃	10	-	- %	-
〃	FCP I-Global High Yield Portfolio Class AT USD.	-	Designated at fair value through profit or loss- non- current (fund)	135	20,695	- %	20,695

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Notes to the Financial Statements

• (iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

• (v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

• (vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None.

• (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

• (viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

• (ix) Trading in derivative instruments: None.

• (b) Information on investees:

The following is the information on investees for the years ended December 31, 2020 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original inve	stment amount	Balance	as of December 31,	2020	Net income (losses) of investee	Share of profits/losses of investee (Note 1)	Note
				December 31, 2020	December 31, 2019	Shares (thousands)	Percentage of ownership	Carrying value
The Company	CHUN PIN ENTERPRISE CO., LTD.	Taiwan	Storage business	290,000	290,000	29,000	44.62 %	407,945	172,894	77,137	Associate
The Company	FINE ENVIRONMENT TECHNOLOGIESCO., LTD.	Taiwan	Plastic product trade	44,792	44,792	1,003	60.76 %	9,099	(11)	(6)	Subsidiary
The Company	CHANG XIN CO., LTD.	Taiwan	Land development	2,900,860	2,900,860	290,086	100.00 %	1,451,176	142	142	Subsidiary
The Company	HONG DA INVESTMENT CO., LTD.	Taiwan	Normal investments	190,000	190,000	19,000	100.00 %	208,921	38,530	38,530	Subsidiary
The Company	FERMAT ENTERPRISES, LTD.	British Virgin Islands	Normal investments	13,887	13,887	450	100.00 %	21,720	(689)	(689)	Subsidiary
The Company	UNIVERSE ENTERPRISES LTD.	British Virgin Islands	Normal investments	93,032	93,032	3,000	100.00 %	59,742	(2,946)	(2,946)	Subsidiary
The Company	OCEAN GROUP LTD.	Samoa	Normal investments	1,069,438	1,394,496	32,900	100.00 %	467,130	440,023	440,023	Subsidiary
HONG DA INVESTMENT CO., LTD.	FINE ENVIRONMENT TECHNOLOGIESCO., LTD.	Taiwan	Plastic product trade	6,294	6,294	647	39.24 %	5,741	(11)	(5)	Subsidiary
CHANG XIN CO., LTD.	SHEN YANG DEVELOPMENTCO., LTD.	Taiwan	Land development	1,000	1,000	100	100.00 %	535	-	-	Subsidiary
OCEAN GROUP LTD.	OPC HOLDINGS, LTD.	British Virgin Islands	Normal investments	27,850	352,908	450	100.00 %	46,074	361,848	361,848	Subsidiary
OCEAN GROUP LTD.	SAGE HOLDINGS LTD.	Samoa	Normal investments	800,217	800,217	25,000	100.00 %	476,674	79,164	79,164	Subsidiary
OCEAN GROUP LTD.	RISE FUTURE INTERNATIONALLTD.	Seychelles	Normal investments	241,371	241,371	7,450	100.00 %	(55,672	) (985)	(985)	Subsidiary

Note 1: All intragroup transactions were eliminated in the consolidated financial statements, except for Chun Pin Industrial Co., Ltd.

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OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)

Name of investee	Main businesse sand products	Total amoun t of paid-in capital (Note 3)	Method of investmen t (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2019 (Note 3)	Investm	ent flows	Accumulated outflow of investment from Taiwan as of December 31, 2020 (Note 3)	Net income (losses) of the investee	Percentag eof ownership	Investment income (losses) (Note 2)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
Hunan Ocean Wide Plastics Ltd.	Production and sale of vinyl chloride polymer rigid pipes and other plastic pipe fittings	352,908 (USD10,450)	( 3 )	352,908 (USD10,450))	-	- (Note 5)	- (Note 5)	-	100.00%	-	-	-
Ocean Plastics (Hui Zhou) Co.,Ltd	Production and sale of business general soft tape, foamed latex leather and rubber leather	800,217 (USD25,000)	( 3 )	800,217 (USD25,000)	-	-	800,217 (USD25,000))	79,164	100.00%	79,164	476,671	-
Ocean Plastics (Dong Guan) Co., Ltd.	Production and sales of PU synthetic leather, foamed latex leather and rubber leather	241,371 (USD7,450)	( 3 )	241,371 (USD7,450)	-	-	241,371 (USD7,450)	(985	) 100.00%	(985)	55,674	-

(ii) Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as of December 31, 2020 (Note 3)	Investment Amounts Authorized by Investment Commission, MOEA (Note 3)	Upper Limit on Investment (Note 4)
1,099,196 (USD32,900)	1,099,196 (USD32,900)	3,962,078

Note 1: Indirect investment in Mainland China through entities registered in a third region.

Note 2: The investment income (loss) was based on the financial statements audited by the investee’s external accountant.

Note 3: The amount of accumulated outflow of investment from Taiwan was translated into New Taiwan dollars at the reporting date.

Note 4: The upper limit on investment, calculated based on the amendments to the Regulations Governing the Approval of Investment or Technical Cooperation in

Mainland China, is 60% of the net equity or consolidated net equity.

Note 5: In the first quarter of 2020, the Group sold the equity in Hunan Kunyuan Plastic Chemical Co., Ltd., OPC Holding Inc., and Ocean Group Ltd. to implement

capital reduction and the capital returned amounted to $296,500 thousand.

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of financial statements, are disclosed in “Information on significant transactions”.

• (d) Major shareholders:

Shareholding Shareholder’s Name	Shares	Percentage
Yee Fong Chemical & Industrial Co., Ltd.	12,425,769	5.46 %

(14) Segment information:

Please refer to the consolidated financial statements for the year ended December 31, 2020.

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Ocean Plastics Co., Ltd.

Statement of cash and cash equivalents

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Item Petty cash Description $ Cash in bank Check deposits Demand deposits Foreign demand deposits (USD$3,429 thousand) Subtotal $ Statement of notes and trade receivables Client name Non-related-parties Description Company A Sales Company B 〃 Company C 〃 Company D 〃 Others (individual amounts with less than 5% of the total amount) 〃 Less:Allowance for doubtful accounts Subtotal Related-party transactions Ocean Plastics (Huizhou) Co., Ltd. 〃 Ocean Plastics (Dong Guan) Co., Ltd 〃 Fine Environment Technologies Co., Ltd 〃 Less: Allowance for doubtful accounts Subtotal Total	Item Petty cash Description $ Cash in bank Check deposits Demand deposits Foreign demand deposits (USD$3,429 thousand) Subtotal $ Statement of notes and trade receivables Client name Non-related-parties Description Company A Sales Company B 〃 Company C 〃 Company D 〃 Others (individual amounts with less than 5% of the total amount) 〃 Less:Allowance for doubtful accounts Subtotal Related-party transactions Ocean Plastics (Huizhou) Co., Ltd. 〃 Ocean Plastics (Dong Guan) Co., Ltd 〃 Fine Environment Technologies Co., Ltd 〃 Less: Allowance for doubtful accounts Subtotal Total	Item Petty cash Description $ Cash in bank Check deposits Demand deposits Foreign demand deposits (USD$3,429 thousand) Subtotal $ Statement of notes and trade receivables Client name Non-related-parties Description Company A Sales Company B 〃 Company C 〃 Company D 〃 Others (individual amounts with less than 5% of the total amount) 〃 Less:Allowance for doubtful accounts Subtotal Related-party transactions Ocean Plastics (Huizhou) Co., Ltd. 〃 Ocean Plastics (Dong Guan) Co., Ltd 〃 Fine Environment Technologies Co., Ltd 〃 Less: Allowance for doubtful accounts Subtotal Total	Amount 500 37,994 39,336 96,366 173,696 174,196 Amount $ 78,611 47,349 39,088 30,536 408,160 (5,989 ) 597,755 17,430 5,465 628 - 23,523 $ 621,278
	Sales 〃 〃 〃 〃 〃 〃 〃

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Ocean Plastics Co., Ltd.

Statement of inventories

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Item Raw materials Work in progress Finished goods Subtotal Less: Allowance for inventory valuation and obsolescence losses Total	Amount	Amount
	Cost $ 192,082 34,164 194,794 421,040 (52,556 ) $ 368,484	Net Realizable Value
		172,460 19,249 176,775
		368,484

Statement of other current assets

Item Business tax refund receivable Other receivables–related parties Excess business tax paid Prepayment for purchases Prepaid expense Temporary payments Others (individual amounts with less than 5% of the total amount)	Description Business tax refund Loans to related parties Overpaid sales tax Prepayment of raw materials Prepayment of building sales agency expenses Advance payment of urban land consolidation	Amount	Amount
		$ 4,000 6,380 18,980 7,001 9,308 7,717 1,842 $ 55,228
			55,228

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Ocean Plastics Co., Ltd.

Statement of changes in investments accounted for using the equity method

For the year ended December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Name of investee Chun Pin Enterprises Co., Ltd. Fine Environment Technologies Co., Ltd Chang Xin Co., Ltd Hong Da Investment Co., Ltd. Fermat Enterprises Ltd Universe Enterprises Ltd Ocean Group Ltd Total	Beginning Balance	Incr	ease	Decr	ease ount 74,124 (Note2) - - 20,000 (Note2) - - 325,057 (Note3) 419,181	Investment income/(loss) recognized under equity method,net 77,137 (6) 142 38,530 (689) (2,946) 440,023 552,191	Exchange difference on translation - - - - - - 4,717 4,717	Unrealized gains (losses) on financial assets measured atfair value through other comprehen sive. - (1,532 (1,487) 3,623 - - - 604	Ending Balanc	e unt 407,945 9,099 1,451,176 208,921 21,720 59,742 467,130 2,625,733	Market Asse	Value or Net ts Value Total amount Collateral 407,945 None 9,099 〞 1,451,176 〞 208,921 〞 21,720 〞 59,742 〞 467,130 〞 2,625,733
	Number of shares Amount 29,000 $ 404,932 1,003 10,637 290,086 1,452,521 19,000 186,768 450 22,409 3,000 62,688 42,900 347,447 $ 1,11 7	Number of shares Am	ount - - - - - - - -	Number of shares Am					Number of shares Percentage Amo		Unit Price 14.07 9.07 5.00 11.00 48.27 19.91 14.20
		- - - - - - -		- - - - - - 10,000					29,000 44.62 % 1,003 60.76 % 290,086 100 % 19,000 100 % 450 100 % 3,000 100 % 32,900 100 %

Note1: There is no open market price for these investees, so expressed in net value per share. Note2: Paid cash dividends.

Note3: Capital reduction by cash.

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Ocean Plastics Co., Ltd.

Statement of financial assets measured at fair value through other

comprehensive income - non-current

For the year ended December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Client name Taiwan VCM Corporation E'dale Technology Co., Ltd. PAN OCEAN, INC Ultra Pak Industries Co., Ltd. Microcell Composite Company	Beginning Balance	Increase	Decrease Shares or units Amount - - - - - - - - - - -	Gain or loss on valuation 562,699 6,385 - (2,567) (2,325 ) 564,192	Ending Balance Shares or units Percentage Fair Value Collateral 34,317 12.46 % 1,130,019 None 630 3.38 % 21,087 None 152 15.07 % 6,890 None 3,008 7.00 % 31,013 None 237 4.32 % - None 1,189,009	Ending Balance Shares or units Percentage Fair Value Collateral 34,317 12.46 % 1,130,019 None 630 3.38 % 21,087 None 152 15.07 % 6,890 None 3,008 7.00 % 31,013 None 237 4.32 % - None 1,189,009	Accumulated impairment N/A N/A N/A N/A N/A
	Shares or units Fair Value 32,375 $ 567,320 630 14,702 152 6,890 3,008 33,580 237 2,325 $ 624,817	Shares or units Amount 1,942 - - - - - - - - - -
		1,942 - - - -	- - - - -		34,317 12.46 % 630 3.38 % 152 15.07 % 3,008 7.00 % 237 4.32 %

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Ocean Plastics Co., Ltd.

Statement of other non-current assets

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Item Refundable deposits Other financial assets	Description The refundable deposits of natural gas pipeline engineering Trust account of presold house and real estate development	Amount
		$ 17,542 14,831 $ 32,373

Statement of other current liabilities

Item Lease liabilities-current Unearned sales revenue Other payables to related parties Others(individual amounts with less than 5% of the total amount)	Description Lease obligations payable Unearned sales revenue from clients Oil groove operating expenses to related parties	Amount	Amount
		$ 12,895 14,025 3,204 1,846 $ 31,970
			31,970

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Ocean Plastics Co., Ltd.

Statement of short-term borrowings

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Creditor Type of loan First Commercial Bank Credit Loans Chang Hwa Commercial Bank, Ltd. Credit Loans Total	End balance $ 100,000 100,000 $ 200,000	Contract Period 2020.12.21~2021.03.21 2020.12.25~2021.01.04	Percentage 1.16% 1.08%	Loan 100,000 150,000 250,000	Collateral Note None 〞
	$

Statement of trade payables

Client name Notes payable Non-related-parties- operating activities Company E Company F Others (individual amounts with less than 5% of the total amount) Subtotal Accounts payable Non-related-parties Company G Company E Others (individual amounts with less than 5% of the total amount) Subtotal Total	Description Amount Purchases $ 26,808 〞 6,285 〞 6,142 39,235 Purchases 281,550 〞 40,804 〞 93,134 415,488 $ 454,723

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Ocean Plastics Co., Ltd.

Statement of other payables

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Item Non-related-parties Salaries payable Accrued import and export selling expenses Accrued repair and maintenance expense. Others(individual amounts with less than 5% of the total amount) Total	Description The employee benefits, year-end bonus and Amount pension $ 69,822 Cost of shipping for sales of goods 20,097 Equipment maintenance expense 39,432 (Packing expense, insurance expense and professional service fees) 69,528 ~~$~~ ~~198,879~~	Description The employee benefits, year-end bonus and Amount pension $ 69,822 Cost of shipping for sales of goods 20,097 Equipment maintenance expense 39,432 (Packing expense, insurance expense and professional service fees) 69,528 ~~$~~ ~~198,879~~
		~~198879~~
		~~,~~

Statement of long-term borrowings

Creditor Description Hua Nan Commercial Bank, Ltd. Yuanta Commercial Bank Co., Ltd. KGI Commercial collateral borrowing collateral borrowing collateral borrowing Bank Co., Ltd. Subtotal Less: current portion Total	Borrowings amount Contract Period Collateral Note
	$ 568,750 2016.06.29~2031.06.29, Monthly installments of interest and semiannually repayments of principal for a term of 24-month. 150,000 2019.04.17~2022.04.17, Monthly installments of interest and repayment of principal at maturity. 400,000 2018.02.27~2013.02.27, Monthly installments of interest and repayment of principal at maturity. Land Land Land 1,118,750 ~~(54,167~~ ) $ 1,064,583

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Statement of other non-current liabilities

December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Item	Description		Amount
Lease liabilities-non-current	Lease obligations payable	$	15,128
Advance real estate receipts	Receipts of presold land		14,592
Provisions for employee benefits-	Long-term compensated absences liabilities
non- current			14,453
Guarantee deposits received	Deposit for commissioned for goods production
	and deposit for land lease		3,303
		$	47,476

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Ocean Plastics Co., Ltd.

Statement of operating revenue

For the year ended December 31, 2020 (Expressed in thousands of New Taiwan Dollars)

Item Plastic raw materials Plastic products Less: Sales return and sales allowance Net sales revenue	Quantity 101,181tona 30,817tona/2,582thousand yard

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Statement of operating costs

For the year ended December 31, 2020

(Expressed in thousands of New Taiwan Dollars)

Item Raw materials at the beginning of the year Add: Net purchases Others Less: Raw materials at the end of the year Cost of material sold and others Raw materials used Direct labor Manufacturing expenses Total Manufacturing costs Add: Work-in-process at the beginning of the year Less: Work-in-process at the end of the year Transferred to expenses and others Cost of finished goods Add: Finished goods at the beginning of the year Less: Finished goods at the end of the year Transferred to expenses and others Cost of finished goods sold Merchandise at the beginning of the year Net purchases Less: Merchandise at the end of the year Transferred to manufacturing expenses Cost of merchandise sold Add: Cost of material sold Adjustment:( idle capacity) Others Gain from price recovery of inventory Added of cost of goods sold Cost of goods sold	Amount	Amount	Amount	Total 2,801,937 85,685 780,023 3,667,645 39,876 (34,164) (4,305 ) 3,669,052 179,037 (193,662) (8,770 ) 3,645,657 105,595 195,540 3,946,792
	Subtotal $ 228,122 2,855,359 100,186 (192,082) (189,648 ) 1,081 105,647 (1,132) (1 ) 86,294 110,214 3,496 (4,464)
			$

241

Item Export charges Salaries expense Salaries expense Commission expense Insurance expense for employee Professional service fees Depreciation expens Taxes Research and development expense Utilities expense Miscellaneous expense Others (individual amounts with less than 5% of the total amount) Total	Selling expenses $ 115,460 25,660 30,435 14,488 2,247 11 1,743 - - - 1,771 10,042 $ 201,857	Administrative expenses	Administrative expenses	Research and development expenses - 5,518 - - 523 - 393 - 402 - 308 1,510 8,654	Total
			- 58,210 5 - 4,034 5,019 7,403 5,247 - 294 5,909 9,559 95,680		115,460 89,388 30,440 14,488 6,804 5,030 9,539 5,247 402 294 7,988 21,111
					306,191

Statement of Changes in Property, Plant, and Equipment: Note (6(i)) Statement of Changes in Right-of-use-assets: Note (6(j))

Statement of Changes in Investment property : Note (6(k))

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Chairman: TAN, KIN-MEN

Ocean Plastics Co., Ltd.

243