Stock Code: 1604

==> picture [118 x 37] intentionally omitted <==

SAMPO CORPORATION

2020 Annual Report

Printed on: April 30, 2021 Visit the Taiwan Stock Exchange Market Observation Station System Website to query the annual report of SAMPO CORPORATION: https://mops.twse.com.tw

Company Website: http://www.sampo.com.tw

Notice to readers

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

I. Name, title, contact number and email address of company spokesperson and deputy spokesperson:

Spokesperson

pokesperson: Spokesperson
Name	Title	Contact Number	Email Address
CHIANG, CHUAN-TIEN	Assistant Vice President	(03)397-5151 Ext.1711	[email protected]

Deputy Spokesperson

Name	Title	Contact Number	Email Address
KAO, CHIH- CHENG	Director	(03)397-5151 Ext.1234	[email protected]

II. Address and telephone number of headquarters, branches and industrial factories:

Name	Address	Telephone Number
Headquarters	No. 26-3, Dinghu Rd., Gueishan Dist., Taoyuan City	(03)397-5151
Northern branch office	No.26, Dinghu Rd., Gueishan Dist., Taoyuan City	(03)397-5151
Taoyuan Hsinchu Miaoli branch office	2nd Floor, No. 135, Guangming 3rd Road, Zhubei City, Hsinchu County	(03)558-9090
Central part branch office	15th Floor, No. 360, Beitun Road, Beitun District, Taichung City	(04)2243-5188
Yunlin Chiayi Tainan branch office	No. 567, Section 2, Bo'ai Road, Chiayi City, Chiayi County	(05)235-7702
Kaohsiung Pingtung branch office	No. 198, Minquan 2nd Road, Qianzhen District, Kaohsiung City	(07)3318270
Eastern branch office	No. 7, Daoxing 1st Street, Ji'an Township, Hualien County	(03)851-3959
Home Appliances Division	No.26, Dinghu Rd., Gueishan Dist., Taoyuan City	(03)397-5151

III.The name, address, website and telephone number of the stock transfer agency:

Agency: Yuanta Securities Co., Ltd. Registrar & Transfer Agency Dept. Address: B1F.,No.210,Sec.3,Chengde Rd.,Taipei City 103 Website: http://agent.yuanta.com.tw/index.htm Telephone number: (02)2586-5859

IV. The name, firm name, address, website and phone number of the Certificated Public

Accountants (CPAs) of the financial report for the most recent year:

、 Names of CPAs: YOU,SU-HUAN LIN,YI-HUI

Accounting firm: DELOITTE AND TOUCHE Address: 20F, Taipei Nan Shan Plaza No. 100, Songren Rd., Xinyi Dist., Taipei City Website: http://www.deloitte.com.tw Telephone number: (02)2725-9988

V. The name of any exchanges where the company's securities are traded offshore and the

method by which to access information on said offshore securities:

Names of Overseas Securities Exchange: Luxembourg Stock Exchange Access method information: http://www.bourse.lu

VI. Company Website: http://www.sampo.com.tw

Table of Contents

Table of Contents	Table of Contents
One. Report to Shareholders ............................................................................................................. 1
Two. Company Profile ....................................................................................................................... 6
I.	Establishment date .............................................................................................................. 6
II.	Company history ................................................................................................................ 6
Three. Corporate governance ........................................................................................................... 7
I.	Organizational system ........................................................................................................ 7
II.	Profiles of Directors, Supervisors, President and Vice Presidents, Associate Vice
	Presidents, Heads of the Departments and Branches ......................................................... 9
III.	Remuneration paid to Directors, Supervisors, the President, and the Vice President in the
	most recent year ................................................................................................................ 14
IV.	The pursuit of Corporate Governance .............................................................................. 19
V.	Independent auditor’s fee ................................................................................................. 45
VI.	Change of CPAs ................................................................................................................ 46
VII.	The company’s chairman, President, or any manager involved in financial or accounting
	affairs being employed by the CPA Firm or any of its affiliates within the year ............. 47
VIII.	Shareholding transfers and share collateralization within the latest year, up till the
	publication date of this annual report, initiated by directors, supervisors, managers and
	shareholders with more than 10% ownership interest ...................................................... 47
IX.	Information on the top ten shareholders in shareholding ratio and are related parties or
	with a relationship of being a spouse or a relative within the 2nddegree of kinship ........ 49
X.	Investments jointly held by the company, the company’s directors, supervisors, managers,
	and enterprises directly or indirectly controlled by the company, with shareholding
	disclosed in aggregate of the said parties ......................................................................... 50
Four Capital Overview .................................................................................................................... 51
I.	Capital & Shares ............................................................................................................... 51
II.	Issuance of Corporate Bonds. ........................................................................................... 56
III.	Issuance of Preferred Stock .............................................................................................. 56
IV.	Issuance of Global Depository Receipts ........................................................................... 56
V.	Employee Stock Warrant and New Shares to Employees with Restricted Rights ............ 57
VI.	Issuance of New Shares in Connection with the Merger or Acquisition of Other
	Companies. ....................................................................................................................... 57
VII.	Financing Plans and Implementation:. ............................................................................. 57
Five. Operational Overview ............................................................................................................ 58
I.	Business Contents ............................................................................................................. 58
II.	Market and Sales Overview .............................................................................................. 63
III.	The information of employees within the last two years and up to the printing date of the
	annual report ..................................................................................................................... 75

IV.	Information on Environmental Protection Expenditure ................................................... 75
V.	Employer and employee relationships .............................................................................. 75
VI.	Major contracts ................................................................................................................. 76
Six. Financial Information .............................................................................................................. 78
I.	Condensed Balance Sheet and and Income Statement of the Most Recent Five Years .... 78
II.	Financial Analysis of the Most Recent Five Years ........................................................... 82
III.	Audit report on the most recent year financial statements by the Audit Committee ........ 84
IV.	Latest financial statements ............................................................................................... 85
V.	Individual financial statements of the Company audited and attested by CPAs in the most
	recent year....................................................................................................................... 169
VI.	Financial Difficulties Experienced by the Company and Its Affiliated Companies in the
	Most Recent Year up to the Date of Publication of This Annual Report, and Their Impact
	on the Company's Financial Position ............................................................................. 245
Seven. Review and Analysis of Financial Status and Performance and Risk Management ... 246
I.	Analysis of Financial Status ........................................................................................... 246
II.	Financial Performance .................................................................................................... 247
III.	Cash Flow ....................................................................................................................... 248
IV.	Impact of Major Capital Expenditures on Corporate Finances and Business for the Most
	Recent Year ..................................................................................................................... 248
V.	The major causes for profits or losses incurred by investments during the most recent
	year; rectifications and investment plans for the next year ............................................ 249
VI.	Risk analysis and evaluation and response ..................................................................... 249
VII.	Other aspects................................................................................................................... 254
Eight. Special Disclosures .............................................................................................................. 255
I.	Information on affiliated companies ............................................................................... 255
II.	Private Placement of Securities of the Most Recent Year up to the Publication Date of
	this Annual Report .......................................................................................................... 262
III.	Holding or Disposal of the Company's Shares by the Subsidiaries of the Most Recent
	Year up to the Date of Publication of this Annual Report .............................................. 262
IV.	Other Necessary Supplements ........................................................................................ 262
Nine. Events of Considerable Impact on Shareholders’ Equity or on Prices of Securities as
Specified	in Subparagraph 3, Paragraph 2 of Article 36 of the Securities and Exchange Act 263

Report to shareholders

One. Report to Shareholders

Dear Shareholders, Ladies and Gentlemen:

The world was severely affected by the COVID-19 pandemic and economic recession in 2020. The pandemic in Taiwan was properly controlled and the domestic market demand was with a stable momentum, added with the relevant stimuli measures provided by the government and the retaliatory consumption booms, resulting in home appliance sales growth. The company’s product sales are satisfactory owing to the proper internal resource integration and sales strategies. Also, the gains from the investment in other industries and the profits from the disposal of assets have helped make the overall operating income and profits better than expected.

SAMPO CORPORATION focuses not only on sales performance but also on developing brands and consumers in various ways to help make the brand name wellknown. In addition to receiving the Golden Merchant Awards this year, which is the highest honor in Taiwan’s business community, the company has not forgotten the benevolent spirit of the founder, Mr. Chen, Maobang, that is, “feedback to the society,” and continues to promote charity activities. The 2020 business operation and the 2021 business plan are as follows:

I. Business result in 2020

(I) Implementation of operational plan:

The company’s consolidated operating income was NT$7.67002 billion in 2020, an increase of 7.8% from the year of 2019. The consolidated operating net income was NT$527.31 million, an increase of NT$229.51 million from the year of 2019.The consolidated net income was NT$1.836 billion, an increase of NT$1.06314 billion from the year of 2019.

(II) Financial income and expenditure analysis:

The net cash inflow from the consolidated operating activities in 2020 was NT$377.24 million, the net cash inflow from investing activities was NT$1.22222 billion, and the net cash outflow from financing activities was NT$1.92789 billion. The ending cash and cash equivalents decreased by NT$330.49 million, and the balance of cash and cash equivalents wasNT$834.05 million.

(III) Profitability analysis:

million. Profitability analysis:
Item	2020	2019
Return on consolidated assets	14.83%	6.46%
Return on consolidated shareholders’equity	24.67%	11.69%
Consolidated net profit ratio	23.94%	10.86%
Consolidated earnings per share	NT$4.86/share	NT$2.00/share

Report to shareholders

(IV)Research and development status:

The company invested NT$99.32 million in consolidated research and development for the year of 2020. The company continued to conduct product research and development for an integrated design, such as, frequency conversion technology, sterilization technology, energy saving and carbon reduction, and the Internet of Things (IoT) for smart home appliances. Continue the innovation of products and technologies, such as, NANO-TI aurora titanium antibacterial refrigerator, Pico pure Nano water ion washing machine, smart inverter air conditioner, and quantum dot QLED display, etc.

The company had outperformed other local branding companies in Taiwan last year and was awarded with the “2020 Reader’s Digest Trusted Brands” three gold awards in the home appliance category (the “Sampo Washing Machine” and “Oven, Microwave” were awarded for two consecutive years). The “Sampo Big/Fresh Refrigerator” was awarded for the first time this year. The company intends to research, develop, and manufacture more MIT products to meet the needs of consumers.

II. Summary of business plan 2021

(I) Operating strategy:

SAMPO CORPORATION was incorporated in 1936 for the production and service of digital home appliance, and is committed to the research and development of high-quality and high-tech home appliances. At the same time, integrates marketing, logistics, after-sales service, and e-commerce platforms to provide consumers with one-stop service and to become the leading brand in Taiwan’s home appliance market.

SAMPO makes “sincerity,“ “team,“ and “innovation” its core value and truly believes that “talents” are the key to the sustainable operation of an enterprise. Base on the spirit of “humanity” to treat employees with sincerity and care, to form loyalty to the organization, and to create a harmonious working environment with harmonious labor-management relations.

(II) Expected sales volume:

The introduction of new products and a diversified sales model are the key to the sales growth of the company. In terms of products, the company believes in introducing innovative technology, popular cosmetic design, and tailor-made home appliances for Taiwanese consumers. Under the influence of the pandemic, consumers are becoming aware of home environment and health; therefore, the demand for clean and healthy home appliances is increasing significantly, which will also help increase the sales volume in the future.

The sales model is favorable to the young people. More comprehensive integrated marketing, such as, proprietary online sales, informercial programs, heterogeneous advertising cooperation, and experience sharing and recommendation, will successfully attract consumers’ attention, increase sales

Report to shareholders

momentum, and promote overall sales performance to grow.

(III) Important production and marketing policies:

The core competence of SAMPO is to stay “close to the market.” The completion of the Tainan plant allows Sampo to uphold the spirit of focusing more on “MIT” local operation, from product research and development, design and production, transportation and logistics, installation services, etc., and to provide a total solution starting from fulfilling local demands. The investment in new plants, new equipment and new products helps accelerate the balance of supplies and services to the North-South distributors, provide a faster and more complete sales network, and have SAMPO’s products distributed across Taiwan.

Current market demand is constantly diversified and fragmented. The company exercises its transformation ability to meet market demand differentiation in products and services. In terms of product innovation, observer market changes, adjust the pace of promoting product innovation and brand rejuvenation, and extend brand loyalty. In terms of sales channels, actively assists distributors to change and grow; also, expands other physical channels and virtual e-commerce platforms, fast-growing micro-channels, diversified marketing methods, and other sales channels.

(IV)The influence of the external competition environment, the legal environment, and the macroeconomic environment:
External competition environment: The third brand has been taking up market share in Taiwan with a very low price in the recent years, and major Chinese manufacturers, such as, Midea and Gree, have also actively participated in market competition. While facing severe external challenges, the company, on one hand, is more actively seeking external cooperation channels with the intention of jointly forming a national air-conditioning team in order to jointly develop a new generation of air-conditioning products. Actively acquire the resources related to the government’s policies of supporting local enterprises in order to strengthen the competitiveness of SAMPO’s air-conditioning business.

On the other hand, SAMPO continues to develop market in Taiwan that is different from the practice of competitors by increasing outsourcing to reduce costs. The completion of the Tainan factory that cost the company’s hundreds of millions of dollars is officially in service this year with new manufacturing equipment invested, production efficiency improved, and high value-added home appliances developed specially for Taiwan continuously.

Regulatory environment: The stimuli check campaign and goods tax relief and subsidies program were officially launched in the second half of the last year. SAMPO also responded to the government’s stimuli check policy with a lot of resources invested in publicity so to enhance consumer’s buying power with many activities arranged. The government urges the public to save power consumption that will continue to drive the rapid growth of energy-saving
3 -

Report to shareholders

home appliances.

Macroeconomic environment: The industry in Taiwan was seriously affected by the outbreak of COVID-19 pandemic last year. Fortunately, the demand for the air-conditioner and pandemic-related products of the home appliance industry was fueled by hot weather and the launch of stimuli checks. The sales major home appliances brands increased significantly from the same period of last year.

Although the COVID-19 pandemic remains severe worldwide, the relation of Sino-USA under the Biden administration is easing up along with the successful development of the vaccine. The economic activities in Taiwan continue to be active, and the domestic market remains promising under the precondition of no global traveling in the near future.

(V) The company’s future development strategy:
Deepen the development of distributors and form loyalty: Sampo and its distribution partners are a “unity” and an alliance. The company is able to generate more profits and expand market share only by continuing to work hard and grow together with distribution partners.
The Tainan plant starts production and improves operational efficiency: The Tainan plant is fully constructed, so the company will actively deploy production line relocation to balance north-south distribution services. The company has demonstrated its determination to operate with the deployment of production lines. At present, more than 90% of Sampo washing machines and refrigerators are awarded with the MIT Smile Mark. The “Made in Taiwan” effort demonstrates our commitments to quality, technology, and speed that provide more protections to consumers and distribution systems.
Grasp business opportunities and increase product values: The raw materials costs and sea and air freight charges have increased significantly since last year; therefore, all home appliances makers have been under the pressure of high costs. The price increase of commodities in this year is observable. Facing the price increase of international raw materials and freight, SAMPO will use its advantage in manufacturing to increase the value of products to feedback to consumers.
Develop market opportunities and improve company performance: The company uses SAP ERP system to fully promote the company’s digital transformation, hoping to create a high-efficiency and intelligent operation model in order to effectively improve personnel efficiency and decisionmaking quality. The company will continue to uphold the core values of “brand,” “access,” and “service” to integrate the Group’s resources and distribution channels, to deepen the domestic market, and develop new blue ocean strategic business opportunities. This is our opportunity to make SAMPO great again.
4 -

Report to shareholders

Although there remain many crises and variables in operation this year, the company continues to uphold a positive and optimistic attitude to work together conquering the difficulties and developing Taiwan in-depth and feedback to this beautiful place with love and care. Develop the science and technology park, logistics, catering, and senior citizen home along with the construction of the corporate headquarters to complete the business territory. Sampo aims to gradually achieve the goal of “leading the trend of home appliances and creating new trend for the industry” and truly achieve the goal of “2021, No. 1 in Taiwan” in order to live up to the expectations of all employees and investors.

Wish All shareholders Good health and happy life!

Chairman Chen Mao-Bang Industry and Commerce Development Foundation President HSU, CHING-CHAO Accounting officer CHIANG, CHUAN-TIEN

Company Profile

Two. Company Profile

I. Establishment date

September 11, 1962

II. Company history

1936 Chen Maobang and his brothers founded DONGZHENGTANG RADIO EQUIPMENT CO., LTD. that was the predecessor of Sampo Corporation.
1962 Established Dongxing Electric Co., Ltd., and planned to build a factory in Banqiao City, Taipei County.
1964 Merged DONJOY ELECTRIC CO., LTD. and DONGXING ELECTRIC CO., LTD. with Sampo Electric Co., Ltd. incorporated at the same time. Produced black-and-white TV sets, refrigerators, and other electrical appliances.
1965 Set up sales offices in Taichung, Chiayi, Tainan, and Kaohsiung, and set up service stations in major cities and towns of Taiwan.
1969 The specialized factory for electronic equipment, such as, capacitors in Tucheng Township, Taipei County (Tucheng Factory II) was in production. Technically cooperated with JAPAN SHARP CORPORATION in Japan to produce color TV sets. Preparing to set up a professional factory for export.
1970 Approved to trade on the stock market. 1971 Tucheng Factory III was officially in production. Tucheng Plant II cooperated with Ishii Manufacturing Co., Ltd. in Japan cooperated to produce aluminum terminals for electrolytic capacitors.
1973 Preparing to set up a TV plastic case manufacturing plant (Tucheng Factory IV). The head office was relocated to a new site at No. 217, Section 3, Nanjing East Road, Taipei City in December 1973.
1974 Expand the business scope and change the name to “Sampo Corporation.” 1974 Incorporated “AMIGO LOGISTICS CORPORATION.” 1980 Established a color TV manufacturing plant in Atlanta, Georgia, USA. 1989 Incorporated “RECHI PRECISION CO., LTD.” 2003 Successfully issued GDR (Global Depository Receipts) and was the first home appliance manufacturer in Taiwan to successfully raise funds overseas.
2015 Entered the e-commerce platform and set up e-Payless online shopping website.
2015 Incorporated “SAMPO HOME INC.” 2017 Incorporated “DONGGUAN SAMPO ELECTRONICS CO., LTD.” 2018 Constructed Tainan Plant 2018 Incorporated “SAMPO JAPAN Co., Ltd.” 2018 Incorporated “Sampo International Food Service Co., Ltd.”
6 -

Corporate governance

Three. Corporate governance

I. Organizational system

(I) Organizational structure

==> picture [317 x 371] intentionally omitted <==

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

Shareholders
Meetings
Remuneration
Committee
Audit Committee
Chairman of the
Board of Directors
Secretary of the
Board of Directors
Auditing Department
Constructional development
and management department
President
Appliances R&D
Domestic Sales & Resource
and Manufacture
Marketing Center Management Center Overseas Business
Center
Department
----- End of picture text -----

Corporate governance

(II) Business operations of main segments

Segment	Business operations
Auditing Department	Perform internal audits of the company and affiliates
Constructional development and management department	Manage the company’s land development, construction, operation management and control, and asset disposal matters.
Domestic Sales & Marketing Center	Responsible for brand promotion, the sales of new products, brown goods, white goods, and home appliances and product marketing planning in Taiwan; also, develop e-commerce platforms and develop online shopping market operations and marketing related operations. In addition, the respective customer service department is responsible for the company’s product maintenance services and customer consulting services.
Appliances R&D and Manufacture Center	Refrigerators, washing machines, air conditioners, displays, electronic signage, and various white goods and black goods R&D, planning, manufacturing, and purchasing matters.
Resource Management Center	Manage the company’s logistics resources management and control affairs, including: Accounting, finance, business management; implementation and
	maintenance of related information system development
	and information security; human resources, general affairs, and legal affairs management, supervision, implementation, and rule and regulations enactment (revision).
Overseas Business Department	Responsible for overseas sales of electronic products.

Corporate governance

II. Profiles of Directors, Supervisors, President and Vice Presidents, Associate Vice Presidents, Heads of the Departments and Branches

(I) Profiles of Directors and Independent Director

																	April 17,2021	April 17,2021	April 17,2021	April 17,2021
Title (Note 1)	Nationality or place of registration	Name	Gender	Date of (elected to) office	Tenure	Initial date of elected to office (Note 2)	Quantity of shareholding at the time of elected to office		Quantity of shareholding at present		Shareholding of spouse and dependents at present		Shareholding in the name of a third party		Major (academic degree) experience (Note 3)	Holding other positions of the Company and other companies at present	Other executive, director or supervisor who is a spouse or kindred within the 2nd tier underthe CivilCode			Remarks (Note 4)
							Shares	Shareholding percentage	Shares	Shareholding percentage	Shares	Shareholding percentage	Shares	Shareholding percentage			Title	Name	Relation
Chairman	R.O.C	Chen Mao-Bang Industry and Commerce Development Foundation	-	2020.06.12	3 years	2021.06.15	2,360,032	0.61%	2,360,032	0.61%	－	－	－	－	－	－	None	None	None	None
Institutional Director’s representative	R.O.C	Chen Mao-Bang Industry and Commerce Development Foundation Representative: CHEN, SHENG-TIEN	Male		3 years	－	－	－	319	0%	0	0%	0	0%	Department of Civil Engineering, Utah State University	Note (I)	Vice Chairman	Chen, Sheng- Chuan	Brother	None
Vice Chairman	R.O.C	Chen, Sheng-Chuan	Male	2020.06.12	3 years	2002.06.19	8,769,932	2.37%	7,000,932	1.81%	0	0%	0	0%	Master of Electrical Engineering, University of Cincinnati	Note (I)	None	CHEN, SHENG- TIEN	Brother	None
Institutional Director	R.O.C	Chen Zhang Xiu Ju Culture and Education Foundation	-	2020.06.12	3 years	2011.06.15	4,006,453	1.03%	4,006,453	1.03%	－	－	－	－	－	－	None	None	None	None
Institutional Director’s representative	R.O.C	Chen Zhang Xiu Ju Culture and Education Foundation Representative: HSU, CHING-CHAO	Male		3 years	－	－	－	474,000	0.12%	0	0%	0	0%	Department of Economics, Chinese Culture University	Note (I)	None	None	None	None
Director	R.O.C	Chen, Sheng-Wei	Male	2020.06.12	3 years	2009.06.22	8,122,698	2.10%	8,122,698	2.10%	0	0%	0	0%	Master of Business Administration, California State Univ. Stanislaus	Note (I)	None	None	None	None
Independent Director	R.O.C	Chian, Chen-Rong	Male	2020.06.12	3 years	2011.06.15	80,000	0.02%	80,000	0.02%	0	0%	0	0%	PhD, Department of Business Administration, University of Maryland School of Management	Note (I)	None	None	None	None
Independent Director	R.O.C	Lou, Yung-Chien	Male	2020.06.12	3 years	2014.06.16	0	0%	0	0%	0	0%	0	0%	PhD in Marketing, University of Illinois Urbana-Champaign	Note (I)	None	None	None	None
Independent Director	R.O.C	Huang, Chiu-Yung	Male	2020.06.12	3 years	2017.06.15	0	0%	0	0%	0	0%	0	0%	Chairman of ICHIA TECHNOLOGIES, INC.	Note (I)	None	None	None	None

Note 1: Institutional shareholders are to have the name of institutional shareholders and representatives presented separately (for the representative of institutional shareholders, the name of the institutional shareholders should be indicated) and fill in Table below.

Note 2: Fill in the date of being elected as the director or supervisor for the first time and with the discontinuity stated, if any.

Note 3: An experience relevant to the current position, such as, employed by the independent auditor’s firm or its affiliated companies throughout the time period referred to above, please state the job title and the job responsibilities. Note 4: The chairman of the company and the general manager or equivalent (the top manager) are the same person, are relatives of each other, such as spouse or one parent, should explain the reasons, rationality, necessity and corresponding measures (such as increasing the number of independent directors and should More than half of the directors have not served as employees or managers, etc.) related information

Note I: Directors and Independent Director also assuming a job position with the Company and other companies

Name ofdirector	Current job positionwiththe Company and othercompanies	Name ofdirector	Current job positionwiththe Company and othercompanies
Director: Chen Mao- Bang Industry and Commerce Development Foundation Representative: CHEN, SHENG TIEN	Chairman of RECHI PRECISION CO., LTD. Chairman of RECHI INVESTMENTS CO., LTD. Chairman of Rechi Holdings Co., Ltd Chairman of AMIGO LOGISTICS CORPORATION Chairman of SAMPO JAPAN INC. Chairman of SAMPO International Food Service Co., Ltd.	Independent director: Chian, Chen-Rong	Chairman of ISTRON INTERNATIONAL CO., LTD. Chairman of SMART BIOTECHNOLOGY CO., LTD. Chairman ofTAIWAN-ASAHI ENVIRONMENTAL TECHNOLOGY CO., LTD. Chairman of DIAMOND TECHNICAL & TRADING CORP. Independent Director of DIAMOND TECHNICAL & TRADING CORP. Independent Director of FIT HOLDING CO., LTD. Independent director, audit committee member, and remuneration committee member of ALPHA NETWORKS INC. Professional technician at a level of adjunct professor in the Department of Aerospace Engineering, Tamkang University
Director: Chen Zhang Xiu Ju Culture and Education Foundation Representative: Hsu, Ching-Chao	Director of AMIGO LOGISTICS CORPORATION Director of NISSIN GLOBAL LOGISTICS (TAIWAN) CO., LTD.	Independent director: Lou, Yung-Chien	Professor of Business Administration, National Chengchi Universit Director of Integrated Service Technology Inc.
Director: Chen, Sheng Chuan	Chairman of NUCOM INTERNATIONAL CORPORATION Director of RECHI PRECISION CO.,LTD. SAMPO CORPORATION Director of Sampo International Trade and Investment Co., Ltd. Director of AMIGO LOGISTICS CORPORATION Director of DongGuan Sheng Bo Electronics Co., Ltd. Director of YEASHIN INTER. DEVELOPMENT CO., LTD.	Independent director: Huang, Chiu-Yung	Chairman of ICHIA TECHNOLOGIES, INC. Chairman of CREATIVE INVESTMENT CO., LTD. Chairman of FERRARI INVESTMENT CO., LTD. Chairman of ICHIA UK LTD. Chairman of ICHIA HOLDINGS (H.K.)CO., LTD. Chairman of ICHIA HOLDINGS (B.V.I) CO., LTD. Chairman of ICHIA USA INC. Chairman of ICHIA INTERNATIONAL TRADING LTD. Director of ICHIA RUBBER INDUSTRY (M) SDN BHD Independent director, audit committee member, and remuneration committee member of ULTRA CHIP, INC. RemunerationCommitteememberof ISHENGELECTRIC WIRE& CABLECO.,LTD.
Director: Chen, Sheng Wei	Director of FUDY INVESTMENT CO., LTD. Director of TOKO UNIVERSITY MONET INVESTMENT CO.,LTD.

1. Corporate shareholders' main shareholders

1. Corporate shareholders' main shareholders	1. Corporate shareholders' main shareholders
April 17,2021
Name of corporate shareholder (Note 1)	Major shareholders of corporate shareholders(Note 2)
Chen Mao-Bang Industry and Commerce Development Foundation	Not applicable
Chen ZhangXiu Ju Culture and Education Foundation	Not applicable

Note 1: Where a director or supervisor is a representative of a institutional shareholder, the name of the institutional shareholder shall be entered.

Note 2: Fill out the name of main shareholders (with top ten shareholding rate) and the shareholding ratio of the legal entity shareholder.

Note 3: If the legal entity shareholder is not in the company organization, the name and shareholding ratio of the said shareholder shall be disclosed is the name of the investor or donor and the percentage of their fund or donation

10 -

Corporate governance

Professional qualifications and independence analysis of directors and supervisors

As of April 17, 2021

				As of April	As of April	As of April	As of April	As of April	As of April	As of April	As of April	As of April	As of April	As of April	As of April	17,2021
Criteria Name	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience			Independence Criteria (Note2)												Number of Other Public Companies in Which the Individual is Concurrently Serving as an Independent 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 Experience in the Areas of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company	1	2	3	4	5	6	7	8	9	10	11	12
CHEN, SHENG-TIEN (Note1)			V	V		V			V	V	V	V		V		None
Chen, Sheng- Chuan			V	V					V	V	V	V		V	V	1
HSU, CHING- CHAO (Note1)			V	V		V	V		V	V	V	V	V	V		None
Chen, Sheng- Wei			V	V	V			V	V	V	V	V	V	V	V	None
Chian, Chen- Rong	V		V	V	V	V	V	V	V	V	V	V	V	V	V	3
Lou, Yung- Chien	V			V	V	V	V	V	V	V	V	V	V	V	V	1
Huang, Chiu- Yung			V	V	V	V	V	V	V	V	V	V	V	V	V	1

Note 1: Mr. CHEN, SHENG-TIEN is the delegate appointed b “Chen Maobang Industry and Business Development Foundation.”

Mr. HSU, CHING-CHAO is the delegate appointed “Chen Zhang Xiu Ju Culture and Education Foundation.”

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.
Not an employee of the company or any of its affiliates.
Not a director or supervisor of the company or any of its affiliates. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate of one percent or more of the total number of issued shares of the company or ranking in the top 10 in holdings.
Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of a managerial officer under subparagraph 1 or any of the persons in the preceding two subparagraphs.
Not a director, supervisor, or employee of a corporate shareholder that directly holds five percent or more of the total number of issued shares of the company, or that ranks among the top five in shareholdings, or that designates its representative to serve as a director or supervisor of the company under Article 27, paragraph 1 or 2 of the Company Act. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
If a majority of the company's director seats or voting shares and those of any other company are controlled by the same person: not a director, supervisor, or employee of that other company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
If the chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses: not a director (or governor), supervisor, or employee of that other company or institution. Not apply to independent directors
11 -
appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent.
Not a director, supervisor, officer, or shareholder holding five percent or more of the shares, of a specified company or institution that has a financial or business relationship with the company. Not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent, if the specified company or institution holds 20 percent or more and no more than 50 percent of the total number of issued shares of the public company.
Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Act or to the Business Mergers and Acquisitions Act or related laws or regulations.
Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.
Not been a person of any conditions defined in Article 30 of the Company Law.
Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.
12 -

Corporate governance

(II) Background information of the President, Vice Presidents, Assistant Vice Presidents and heads of various departments and branches

various departments	various departments	various departments	various departments	various departments	and branches	and branches	and branches	and branches	and branches	and branches	and branches	and branches
													April 17,2021
Title (Note 1)	Nationality	Name	Gender	Date of (elected to) office	Shareholding		Shareholding of spouse and dependents at present		Shareholding in the name of a third party		Major work experience (education) (Note 2)	Current position at another company	Spouse or kin within the second pillar under the Civil Code and who is a manager			Remarks (Note 3)
					Shares	Shareholding percentage	Shares	Shareholding percentage	Shares	Shareholding percentage			Title	Name	Relation
President	R.O.C	HSU, CHING- CHAO	Male	2019.03.04	474,000	0.12%	0	0%	0	0%	DEPARTMENT OF ECONOMICS, CHINESE CULTURE UNIVERSITY	Director of AMIGO LOGISTICS CORPORATION Director of NISSIN GLOBAL LOGISTICS (TAIWAN) CO., LTD.	None	None	None	None
Vice President	R.O.C	PENG, CHUN- YEN	Male	2021.03.01	180,527	0.05%	354	0%	0	0%	DEPARTMENT OF BUSINESS MANAGEMENT, NATIONAL CENTRAL UNIVERSITY	Chairman of QUANBAO INVESTMENT CO., LTD. Chairman of SAMPO HOME INC. Chairman of SAMPO ASSET MANAGEMENT CO., LTD.Director of Sampo International Trade and Investment Co., Ltd. Director of NISSIN GLOBAL LOGISTICS (TAIWAN) CO., LTD. Director of SAMPO INTERNATIONAL FOOD SERVICE CO.,LTD.	None	None	None	None
Vice President	R.O.C	CHEN, YE- KWAN	Male	2021.03.01	262,004	0.07%	0	0%	0	0%	Department of Systems and Naval Mechatronic Engineering, National Cheng Kung University	Chairman of DEBAO HOME APPLIANCE CO., LTD. Chairman of DONGGUAN SAMPO ELECTRONICS CO., LTD. Director of NELONG ENTERPRISE CORPORATION LTD.	None	None	None	None
Assistant Vice President	R.O.C	CHIANG, CHUAN- TIEN	Male	2021.03.01	393,000	0.10%	0	0%	0	0%	DEPARTMENT OF ACCOUNTING, TUNGHAI UNIVERSITY	Supervisor of SAMPO INTERNATIONAL FOOD SERVICE CO.,LTD.	None	None	None	None
Assistant Vice President	R.O.C	Chang, Chiao- Wei	Female	2021.04.01	99,000	0.03%	0	0%	0	0%	EMBA, National Taiwan University	None	None	None	None	None

Note 1: It should include the information disclosure of the General Manager, Deputy General Manager, Associate Manager, department heads, and branch officers; also, the position equivalent to General Manager, Deputy General Manager or Associate Manager. Note 2: An experience relevant to the current position, such as, employed by the independent auditor’s firm or its affiliated companies throughout the time period referred to above, please state the job title and the job responsibilities.

Note 3: The general manager or equivalent (the top manager) and the chairman of the company are the same person, are relatives of each other, such as spouse or one parent, should explain the reasons, rationality, necessity and corresponding measures (such as increasing the number of independent directors and should More than half of the directors have not served as employees or managers, etc.) related information.

13 -

III. Remuneration paid to Directors, Supervisors, the President, and the Vice President in the most recent year

(I) Remuneration to general and independent directors (collective disclosure by name and range of remuneration):

Unit: NT$/ thousand shares/NT$ thousand/%

	Title	Name	Remunerationto directors	Remunerationto directors	Remunerationto directors	Remunerationto directors	Remunerationto directors	Remunerationto directors	Remunerationto directors	Remunerationto directors	The sum of A, B, C and D in proportion to Earnings (Note 10)	The sum of A, B, C and D in proportion to Earnings (Note 10)	Remuneration foremployees wi	Remuneration foremployees wi	Remuneration foremployees wi	Remuneration foremployees wi	thconcurrent positions	thconcurrent positions	thconcurrent positions	thconcurrent positions	The sum of A, B, C, D, E, F and G in proportion to Earnings (Note 10)	The sum of A, B, C, D, E, F and G in proportion to Earnings (Note 10)	Remuneration received from the invested companies other than the subsidiaries and the parent company (Note 11)
			Director fees (A) (Note 2)		Pension (B)		Remuneration to directors (C) (Note 3)		For services (Note 4)				Salaries, bonuses, special allowances etc (E) (Note 5)		Severance payment and pension (F)		Remuneration to employees (G) (Note 6)
			The Company	All companies mentioned in the financial statements (Note 7)	The Company	All companies mentioned in the financial statements (Note 7)	The Company	All companies mentioned in the financial statements (Note 7)	The Company	All companies mentioned in the financial statements (Note 7)	The Company	All companies mentioned in the financial statements	The Company	All companies mentioned in the financial statements (Note 7)	The Company	All companies mentioned in the financial statements (Note 7)	The Company		All companies mentioned in the financial statements (Note 7)		The Company	All companies mentioned in the financial statements
																	Amount in cash	Amount in stock	Amount in cash	Amount in stock
Director	Chairman	Chen Mao- Bang Industry and Commerce Development Foundation	0	0	0	0	16573	16573	140	140	0.9%	0.9%	14518	14645	594	594	0	0	0	0	1.8%	1.7%	4338
		Representative: CHEN, SHENG-TIEN
	Vice Chairman	Chen, Sheng- Chuan
	Consultant	Chen Zhang Xiu Ju Culture and Education Foundation
		Representative: CHEN, LIEN- CHUN (As of 6/11) Representative: HSU, CHING- CHAO (As of 6/12)
	President
	Director	Chen, Sheng- Wei
Independent director	Independent director	Chian, Chen- Rong	3,984	3,984,	0	0	0	0	105	105	0.2%	0.2%	0	0	0	0	0,	0	0	0	0.2%	0.2%	0
	Independent director	Huang, Chiu- Yung
	Independent director	Lou, Yung- Chien
1. Please specify the policy, system, standards, and structure of the remuneration paid to independent directors, and specify the relation between the amount of remuneration paid and their responsibilities, risks assumed, time contributed, and other factors: The remuneration paid to independent directors by the Company has been clearly stipulated in the Company's Articles of Association. 2. Pay for services (such as non-employee consultant) specified in the financial statements provided by directors in the previous year not specified above:０ Note: The salary of the chauffeur for Chairman Chen, Sheng-Tien was NT$1,336 thousand, that for Vice Chairman Chen, Sheng-Chuan was NT$787 thousand, that for Director Chen, Lien-Chun (as of June 11) was NT$370 thousand, that for Director Hsu, Ching-Chao (starting from June 12)was NT$322 thousand.

*Please specify the relevant information on directors (general directors) and independent directors separately.

14 -

Corporate governance

Payment scale

Payment scale	Corporate governance	Corporate governance	Corporate governance	Corporate governance
Payment scale of remuneration to the Directors of the Company	Name of director
	Sum of the said four types of remunerations (A+B+C+D)		Sum of the said seven types of remunerations (A+B+C+D+E+F+G)
	The Company (Note 8)	All companies mentioned in the financial statements (Note 9) H	The Company (Note 8)	All companies mentioned in the financial statements (Note 9) I
Less than NT$1 million	CHEN, SHENG-TIEN; CHEN, LIEN-CHUN; HSU, CHING- CHAO	CHEN, SHENG-TIEN; CHEN, LIEN-CHUN; HSU, CHING- CHAO	None	None
NT$1,000,000 (Incl.) – NT$2,000,000 (Excl.)	Chian Chen-Rong; Huang, Chiu Yung; Lou Yung Chien	Chian Chen-Rong; Huang, Chiu Yung; Lou Yung Chien	HSU, CHING-CHAO; Chian Chen-Rong; Huang, Chiu Yung; Lou Yung Chien	HSU, CHING-CHAO; Chian Chen-Rong; Huang, Chiu Yung; Lou Yung Chien
NT$2,000,000 (Incl.) – NT$3,500,000 (Excl.)	Chen Zhang Xiu Ju Culture and Education Foundation; Chen, Sheng Wei	Chen Zhang Xiu Ju Culture and Education Foundation; Chen, Sheng Wei	Chen Zhang Xiu Ju Culture and Education Foundation; Chen, Sheng Wei; CHEN, LIEN-CHUN	Chen Zhang Xiu Ju Culture and Education Foundation; Chen, Sheng Wei; CHEN, LIEN-CHUN
NT$3,500,000 (Incl.)–NT$5,000,000 (Excl.)	Chen, Sheng-Chuan	Chen, Sheng-Chuan	None	None
NT$5,000,000 (Incl.) – NT$10,000,000 (Excl.)	Chen Mao-Bang Industry and Commerce Development Foundation	Chen Mao-Bang Industry and Commerce Development Foundation	Chen Mao-Bang Industry and Commerce Development Foundation; CHEN, SHENG- TIEN	Chen Mao-Bang Industry and Commerce Development Foundation; CHEN, SHENG- TIEN
NT$10,000,000(Incl.)–NT$15,000,000(Excl.)	None	None	Chen,Sheng-Chuan	Chen,Sheng-Chuan
NT$ 15,000,000 (incl.)–NT$ 30,000,000 (Excl.)	None	None	None	None
NT$ 30,000,000 (Incl.)–NT$ 50,000,000 (Excl.)	None	None	None	None
NT$ 50,000,000 (incl.)–NT$100,000,000 (Excl.)	None	None	None	None
More than NT$100 million	None	None	None	None
Total	10	10	10	10

Note 1: Names of directors should be separately disclosed (Institutional shareholders should disclose the names of the institutional shareholders and representatives separately). The amount of remuneration should be disclosed in summary. If a director concurrently serves as the President or Senior Vice President, this Form and Form (3-2-1) or (3-2-2) must be filled out.
Note 2: It refers to the directors’ compensation received for the recent year (including salaries of the directors, special responsibility allowance, severance pay, various bonuses, incentives, etc.).
Note 3: It refers to the remuneration of directors to be distributed in accordance with the proposal for distributing the recent year’s earnings adopted at a meeting of board of directors and such proposal has not yet been submitted to the Shareholders’ Meeting for approval.
Note 4: It refers to the relevant expenses for business operations paid to directors for the recent year (including transportation allowance, special allowance, various allowances and the provision of dormitory and vehicle, etc.).When a car, house and other transportation or personal expense are provided, the nature and cost of the assets provided, the actual or estimated rental expense based on a fair market price, gas expense, and other payments should be disclosed. Further, if a chauffeur is assigned, please also disclose the relevant compensation paid to such chauffeur in the Note. However, such amount shall not be included in the remuneration.
Note 5: It refers to the salaries, special responsibility allowance, severance pay, various bonuses, incentives, transportation allowance, special allowance, and the provision of dormitory and vehicle received by the director(s) who concurrently serve(s) as employee(s) (includingPresident, Senior Vice President, and other managerial officers and employees) in the recent year. When a house, car, and other transportation or personal expense are provided, the nature and cost of the assets provided, the actual or estimated rental expense based on afair market price, gas expense, and other payments should be disclosed. Further, if a chauffeur is assigned, please also describe the relevant compensation paid to such chauffeur in the Note. However, such amount shall not be included in the remuneration. In addition, thesalary expense recognized in accordance with IFRS 2 “Share-based payment” includes the acquisition of employee stock warrant, employee restricted stock, and subscription of new shares from cash capitalization.
Note 6: It refers to the employee remuneration (including stock and cash) received by the directors who concurrently serve(s) as employee(s) (including concurrent President, Senior Vice President, and other managerial officers and employees) in the recent year. It is required to disclose the amount of employee remuneration to be distributed in accordance with the proposal for distributing the recent year’s earnings adopted at a meeting of board of directors and such proposal has not been submitted to the Shareholders’ Meeting for approval. Ifsuch amount is unable to be estimated, the amount can be determined in accordance with the actual distribution ratio for last year. Form 1-3 shall be filled out as well.
Note 7: Disclose the total amount of remuneration paid to the directors by all the companies included in the consolidated financial statements (including the Company).
Note 8: Disclose the name of the directors in the respective range of total remuneration received from the Company.
Note 9: Disclose the name of the directors in the respective range of total remuneration received from all the companies included in the consolidated financial statements (including the Company). Note 10: It refers to the net income of the recent year. After the adoption of IFRS.
15 -
Note 11: a. It is required to specify in this column the relevant remuneration amount the directors of the Company received from the reinvested companies other than the subsidiaries.
b. If the Company’s director has received the relevant remuneration from the reinvested companies other than the subsidiaries, the received amount should be included in Column J. In addition, the column title shall be revised as “All reinvested companies.”
c. Compensation shall mean the remuneration, reward, employee bonus, and expense for business operation paid to the Company’s director(s) by the reinvested companies other than the subsidiaries and such directors concurrently serve(s) as director(s), supervisor(s),or managerial officer(s) of the reinvested companies.

(II) Remuneration to Supervisor (name is disclosed in the respective column of the range of remuneration table according to the lump sum payment method): Not applicable.

(III) Remuneration to President and Vice President (name is disclosed in the respective column of the range of remuneration table according to the lump sum payment method):

Unit: Thousand shares/NTD thousand/%

Title	Name	Director fees (A) (Note 2)	Director fees (A) (Note 2)	Pension (B)	Pension (B)	Remuneration to directors (C) (Note 3)	Remuneration to directors (C) (Note 3)	Remuneration to employees (D) (Note 4)	Remuneration to employees (D) (Note 4)	Remuneration to employees (D) (Note 4)	Remuneration to employees (D) (Note 4)	The sum of A, B, C and D in proportion to Earnings (%) (Note 8)	The sum of A, B, C and D in proportion to Earnings (%) (Note 8)	Collect the remuneration from the reinvestment except the subsidiary or the remuneration from the parent company (Note 9)
		The Company	All companies included in the financial statements (Note 5)	The Company	All companies included in the financial statements (Note 5)	The Company	All companies included in the financial statements (Note 5)	The Company		All companies included in the financial statements (Note 5)		The Company	All companies included in the financial statements
								Amount in cash	Amount in stock	Amount in cash	Amount in stock
President	HSU, CHING- CHAO	2,801	2,810	54	54	4,743	4,743	0	0	0	0	0.4%	0.4%	0
Vice President (As of June 2020)	YANG, CHENG- MIN

Disregarding position titles. All such job positions including general manager, vice general managers (e.g., President, Chief Executive Officer (CEO), Superintendent….) shall be disclosed.
The salary of the chauffeur for President Hsu, Ching-Chao was NT$579 thousand.
16 -

Corporate governance

Payment scale

Payment scale
Payment scale of remunerations paid to the President and Vice Presidents of the Company	Names ofthePresident and VicePresidents
	The Company (Note 6)	All companies shown in the financial report (note 7)E
Less thanNT$1 million	None	None
NT$1,000,000 (Incl.)–NT$2,000,000 (Excl.)	None	None
NT$2,000,000 (Incl.)–NT$3,500,000 (Excl.)	YANG, CHENG-MIN	YANG, CHENG-MIN
NT$3,500,000 (Incl.)–NT$5,000,000 (Excl.)	HSU, CHING-CHAO	HSU, CHING-CHAO
NT$5,000,000 (Incl.)–NT$10,000,000 (Excl.)	None	None
NT$10,000,000 (Incl.)–NT$15,000,000 (Excl.)	None	None
NT$15,000,000 (Incl.)–NT$ 30,000,000 (Excl.)	None	None
NT$30,000,000 (Incl.)–NT$50,000,000 (Excl.)	None	None
NT$ 50,000,000 (Incl.)–NT$100,000,000 (Excl.)	None	None
More thanNT$100million	None	None
Total	2	2

Note 1: Names of General Manager and Deputy General Manager should be separately disclosed. The amount of remunerations should be disclosed in summary. If a director concurrently serves as the General Manager or Deputy General Manager, this Form and Form (1-2-1) or (1-2-2) must be filled out.
Note 2: It refers to the General Manager and Deputy General Manager’s salary, special responsibility allowance, and severance pay.
Note 3: It refers to the bonuses, incentives, transportation allowance, special allowance, the provision of dormitory and vehicle, and other compensations received by the General Manager and Deputy General Manager in the recent year. When a house, car, and other transportation or personal expense are provided, the nature and cost of the assets provided, the actual or estimated rental expense based on a fair market price, gas expense, and other payments should be disclosed. Further, if a chauffeur is assigned, please also describe the relevant compensation paid to such chauffeur in the Note. However, such amount shall not be included in the remuneration. In addition, the salary expense recognized in accordance with IFRS 2 “Share-based payment” includes the acquisition of employee stock warrant, employee restricted stock, and subscription of new shares from cash capitalization.
Note 4: It refers to the employee remuneration (including stock and cash) received by the General Manager and Deputy General Manager that is distributed in accordance with the proposal for distributing the recent year’s earnings adopted at a meeting of board of directors and such proposal has not been submitted to the Shareholders’ Meeting for approval. If such amount is unable to be estimated, the amount can be determined in accordance with the actual distribution ratio for last year. Form 1-3 shall be filled out as well.
Note 5: Disclose the total amount of remuneration paid to the General Manager and Deputy General Manager by all the companies (including the Company) included in the consolidated financial statements.
Note 6: Disclose the name of the the General Manager and Deputy General Manager in the respective range of total remuneration received from all the Company.
Note 7: Disclose the total amount of remuneration paid to the General Manager and Deputy General Manager by all the companies (including the Company) included in the consolidated financial statements. Disclose the name of the the General Manager and Deputy General Manager in the respective range of total remuneration received.
Note 8: It refers to the net income of the recent year. After the adoption of IFRS, it refers to the net income in the individual or independent financial statements of the recent year.
Note 9: a. It is required to specify in this column the relevant remuneration amount the the General Manager and Deputy General Manager of the Company received from the reinvested companies other than the subsidiaries.
b. If the General Manager and Deputy General Manager have received the relevant remuneration from the reinvested companies other than the subsidiaries, the received amount should be included in Column E. In addition, the column title shall be revised as “All reinvested companies.”
c. Remuneration shall mean the compensation, reward, employee bonus, and expense for business operation paid to the Company’s the General Manager and Deputy General Manager by the reinvested companies other than the subsidiaries and such the General Manager and Deputy General Manager concurrently serve(s) as director(s), supervisor(s), or managerial officer(s) of the reinvested companies.
17 -
(IV) The names of the managers who have been released with employee bonus and the status of distribution: Not applicable in 2020.
(V) Analysis of the ratio of total remuneration to directors, supervisors, President, and Vice President in the most recent two years by the company and all companies in the consolidated financial statements to the net income in the standalone or individual financial report, and explanation of the remuneration policy, standards and combinations, procedures for determining remuneration, and their correlation with business performance and future risks:
Analysis of the ratio of total remuneration to directors, supervisors, President, and Vice President in the most recent two years by the company and all companies in the consolidated financial statements to the net income in the standalone or individual financial report:

Unit: NT$ Thousand

Year Title	The Company	The Company	All companies in the consolidated financial statements	All companies in the consolidated financial statements
	2020	2019	2020	2019
Director	34,558	24,905	34,676	25,121
Supervisor	0	0	0	0
President and Vice President	7,616	14,105	7,625	14,136
Total	42,174	39,010	42,301	39,257
Ratio to net income	2.3%	5.3%	2.3%	5.3%

Note: The total amount after deducting the remuneration to directors who are also an employee paid in duplication

Remuneration policies, standards, and combinations; procedures for determining remuneration:
(1) Directors: According to Article 28 of the company’s Articles of Incorporation, if the company has profit generated (net income before tax before the appropriation of remuneration to employees and directors), the remuneration to directors and supervisors should be appropriated for an amount not more than 3% of the said profit. The proposal for the distribution of remuneration to directors and supervisors shall be resolved by the board of directors and reported to the shareholders’ meeting.
(2) Independent directors: According to Article 16 of the company’s Articles of Incorporation, independent directors receive an annual salary of NT$1.2 million.
(3) President and Vice President: The remuneration to President and
18 -

Corporate governance

Vice President is determined in accordance with the salary standard of the industry, their participation in operation, and their contribution in achieving the operational objective of the company. The appointment of a manager must be with the approval of the board of directors and the remuneration of the appointed manager is to be determined by the chairman.
Relevance to business performance and future risks: The total amount of remuneration paid to the Directors, President, and Vice President by the company and all companies in the consolidated financial statements in 2020 had increased from the year of 2019, but the ratio to net income had decreased, which was in compliance with the practice of paying reasonable remuneration according to the company’s overall operational performance, personal performance achievement rate, and contribution to company performance. The company will review the remuneration system in a timely manner according to the actual operating situation and changes in relevant laws and regulations in order to maintain a balance between the company’s sustainable operation and risk control.

IV. The pursuit of Corporate Governance

(I) Operation of the board of directors:
Information on the operation of the board of directors

The Board of Directors has convened nine times in the most recent year. The attendance of the directors and supervisors is shown below:

Title	Name (Note 1)	Actual attendance (B)	Attendance by proxy	Actual attendance rate (%) [B/A] (Note 2)	Remarks
Chairman	Chen, Sheng- Tien(Note 1)	9	0	100%	Reelected
Vice Chairman	Chen, Sheng- Chuan	9	0	100%	Reelected
Director	Chen, Sheng- Wei	9	0	100%	Reelected
Director	Chen, Lian- Chuan(Note 1)	3	0	100%	Former director
Director	Hsu, Ching- Chao(Note 1)	6	0	100%	Newly elected on 2020.6.12
Independent Director	Chian, Chen- Rong	9	0	100%	Reelected
Independent Director	Lou, Yung- Chien	9	0	100%	Reelected
Independent Director	Huang, Chiu- Yung	8	1	88.88%	Reelected
Additional information: I. For the operation of the Board of Directors in any of the following circumstances, please specify the date,term,the contents of theproposals,the opinions of all independent directors,and theprocess of the

I. For the operation of the Board of Directors in any of the following circumstances, please specify the date, term, the contents of the proposals, the opinions of all independent directors, and the process of the

19 -

opinions proposed by the independent directors: (I) The content of the particulars inscribed in Article14-3 of the Securities and Exchange Act. 1. The 19[th] meeting of the 25[th] Board of Directors on 2020.3.17. A. The company’s 2019 internal control system declaration Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. B. It is proposed to have the company’s real estate disposed (15 land lots and ground constructions at No. 620, Dinghu Section, Guishan District, Taoyuan City). Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. C. It is planned to handle the development of Sampo Tucheng factory; also, to donate land in accordance with the law and negotiate the purchase of land for public facilities that qualified for plot ratio incentive and transfer in Tucheng District. Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. 2. The 2[nd] meeting of the 26[th] Board of Directors on 2020.7.14. A. It is proposed to have the company’s real estate disposed (15 land lots and ground constructions at No. 620, Dinghu Section, Guishan District, Taoyuan City). Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. 3. The 4[th] meeting of the 26[th] Board of Directors on 2020.11.10. A. Independence and competence evaluation of the independent auditors appointed by the company in 2020. Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. B. The remuneration of the company’s independent auditor in 2020. Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. C. Drafted up the company’s 2021 audit plan. Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. 4. The 5[th] meeting of the 26[th] Board of Directors on 2021.01.25. A. Cooperate with the replacement of independent auditors inside the accounting firms and assess their independence and competency. Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. B. It is planned to have the warehouse building of Sampo Tainan Factory added, the 2[nd] phase project (1F-3F) with steel structure. Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. 5. The 6[th] meeting of the 26[th] Board of Directors on 2021.03.24. A. The company’s 2020 internal control system declaration Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. B. It is planned to build a corporate headquarters at No. 19, Dinghu Road, Guishan District, Taoyuan City. Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. C. It is planned to adjust the steel structure budget of the 2[nd] phase project (1F-3F) of the warehouse building of Sampo Tainan Plant. Opinion of independent director: None. Resolution result: Passed unanimously by all the directors present. (II) Except for the aforementioned matters, the resolutions reached by the Board of Directors with the objections or reservations of the independent directors documented or declared in writing: None II. With respect to the avoidance of conflicting interest agendas, describe the names of directors, details of the relevant agendas, reasons for avoiding conflicting interest, and the voting decisions:

20 -

Corporate governance

Nominated candidates for the company’s 2020 independent directors in the 19[th] meeting of the 25[th] Board of Directors on 2020.03.17. Except for Independent Director, Chian, Chen-Rong, Independent Director, Lou, Yung-Chien, and Independent Director, Huang, Chiu-Yung who did not participate in the voting to avoid conflict of interest, the proposal was approved by all directors present. Appointed the President of the company in the 1[st] extraordinary meeting of the 26[th] Board of Directors on 2020.06.12. Except for Director HSU, CHING-CHAO who did not participate in the voting to avoid conflict of interest, the proposal was approved by independent directors and other directors present. Director HSU, CHING-CHAO is to serve as the President of the company. Appointed three members of the “Audit Committee” lawfully in the 1[st] extraordinary meeting of the 26[th] board of directors on 2020.06.12. Except for Independent Director Chian, Chen-Rong, Independent Director Lou, Yung-Chien and Independent Director Huang, Chiu-Yung who did not participate in the voting to avoid conflict of interest, the proposal was approved by all directors present. Appointed three members of the “Remuneration Committee” lawfully in the 1[st] extraordinary meeting of the 26[th] board of directors on 2020.06.12. Except for Independent Director Chian, Chen-Rong, Independent Director Lou, Yung-Chien and Independent Director Huang, Chiu-Yung who did not participate in the voting to avoid conflict of interest, the proposal was approved by all directors present. Adjusted the 2020 remuneration to managers in the 3[rd] meeting of the 26[th] board of directors on 2020.08.11. Except for director HSU, CHING-CHAO who did not participate in voting to avoid conflict of interest, the proposal was approved by all independent directors and other directors present. Recognized retroactively the adjustment of remuneration to managers in the 6[th] meeting of the 26[th] board of directors on 2021.03.24. Except for director HSU, CHING-CHAO who did not participate in voting to avoid conflict of interest, the proposal was approved by all independent directors and other directors present. III. Disclose the self-evaluation (or peer evaluation) cycle and period, evaluation scope, method, and evaluation content of the board of directors of the TWSE/TPEx Listed Companies; also, fill in Attachment II “The implementation of the board of directors evaluation.” IV. The objectives (such as, setting up an Audit Committee, enhancing information transparency, etc.) of strengthening the functions of the board of directors in the current year and the most recent year and the evaluation of the implementation: The company has independent directors appointed and an Audit Committed established lawfully in line with the corporate governance policies promoted by the competent authority. The company’s board of directors is operated in accordance with the “Rules of Procedures for Board of directors’ meetings” truthfully. In addition, based on the principle of operational transparency to have all important resolutions posted on the Market Observation Post System (MOPS) immediately after each board meeting. Also, all information disclosures required by law and regulations is completed in a correct and timely manner to safeguard shareholders’ equity and to promote the healthy operation of the company.

Note 1: Mr. CHEN, SHENG-TIEN is the delegate appointed by the institutional director, the “Chen Maobang Industry and Business Development Foundation.”
Mr. CHEN, LIAN-CHUAN is the delegate appointed by the institutional director, the “Chen Zhang Xiu Ju Culture and Education Foundation.”
Mr. HSU, CHING-CHAO is the delegate appointed by the institutional director, the “Chen Zhang Xiu Ju Culture and Education Foundation.”
Note 2: (1) In the event that directors or supervisors leave before a year is completed, the date when they leave should be indicated in the remark column. The actual attendance (seated) rate (%), on the other hand, shall be calculated by the number of board of directors’ meetings held during service and the frequency number of attendance (being seated) in the meetings.
(2) Before a year is completed, upon any reelection of directors or supervisors, names of the said directors/supervisors, new and old, shall be listed and it shall be specified in the remark column that a specific director or supervisor is old, new, or reelected, and the date of reelection. The actual attendance (seated) rate (%), on the other hand, is to be calculated by the number of board of directors’ meetings held during service and the frequency number of attendance (being seated) in the meetings.
21 -

2. The Board of Directors evaluation performed

Evaluation cycle (Note 1)	Evaluation period (Note 2)	Evaluation scope (Note 3)	Evaluation method (Note 4)	Evaluation content (Note 5)
Evaluation performed once a year	January 1 – December 31, 2020	Board of directors	Internal self- evaluation of the board of directors	1. Compliance with relevant law and regulations 2. Level of participation in companyoperations

Note 1: It is to fill in the execution cycle of the self-evaluation of the board of directors, for example: once a year. Note 2: It is to fill in the self-evaluation period of the board of directors, for example: Evaluate the performance of the board of directors for the period from January 1, 2020 to December 31, 2020. Note 3: The scope of performance assessment covers the board of directors, individual directors and functional committees. Note 4: The methods of assessment include board internal self-assessment, director self-assessment, peer assessment, external institution assessment, external expert assessment, and other appropriate methods for performance assessment. Note 5: The evaluation content shall include at least the following items according to the evaluation scope:

(1) Board performance evaluation: It includes at least the level of participation in the company’s operations, the decisionmaking quality of the board, the composition and structure of the board, the selection and continuous study of directors, and internal control.
(2) Director performance evaluation: It includes at least the grasp of company goals and tasks, the responsibility recognition of directors, level of participation in the company’s operation, internal relationship management and communication, professionalism and continuous study of directors, and internal control.
(3) Functional committee performance evaluation: It includes the level of participation in the company’s operations, the responsibility recognition of the functional committee, the decision-making quality of the functional committee, the composition of the functional committee and the selection of members, and internal control.

The 2020 Board performance evaluation

Aspect	Item No.	Specific indicators	Weight	Average score
Compliance with relevant law and regulations (60%)	1	The matters required to be discussed by the board of directors accordingto law	10%	10
	2	Are there more than six board meetings held annually?	10%	10
	3	Compliance withtherule ofdirector’srecusal	10%	10
	4	Achieve the hours of advanced study required for directors annually	10%	10
	5	Board attendancerate	10%	10
	6	Shareholders’ meetingattendancerate	10%	10
Level of participation in company’s operation (40%)	7	Review the company’s accounting system, financial status and financial reports, audit reports, and thefollow-up.	10%	10
	8	Communicate and interact with the independent auditors of the company.	10%	10
	9	Assess and monitor the company’s existing or potential risks.	10%	10
	10	Communicate and interact with the company’s management.	10%	10
Total score			100%	100
Continuing board review results (good operation, aspects/projects to be improved, and the improvement plans or actions for the aforementioned projects in the next year, etc.): 1. In the aspects of the board’s complying with relevant law and regulations, communication internally and with the independent auditors, supervision of the company’s existing or potential risks, and level of participation in the company’s operations, the evaluation score is 10 points. The said evaluation score is close to a perfect score that shows the overall operation of the company’s board of directors is comprehensive and in line with the corporate governance. 2. The board of directors will continue to operate in 2021 the same wayas it was in thepreviousyear.

In the aspects of the board’s complying with relevant law and regulations, communication internally and with the independent auditors, supervision of the company’s existing or potential risks, and level of participation in the company’s operations, the evaluation score is 10 points. The said evaluation score is close to a perfect score that shows the overall operation of the company’s board of directors is comprehensive and in line with the corporate governance.
22 -

Corporate governance

(II) Information on the operation of the Audit Committee

The Audit Committee has convened seven times in the most recent year (A). The attendance of the independent directors is shown below:

Title	Name	Actual number of attendance (B)	Attendance by proxy	Attendance rate (%) (B/A) (Note)	Remarks
Independent Director	Chian, Chen- Rong	7	0	100%	Reelected
Independent Director	Lou, Yung- Chien	7	0	100%	Reelected
Independent Director	Huang, Chiu- Yung	6	1	85.71%	Reelected
Additional information: I. For the operation of the Audit Committee in any of the following circumstances, please specify the date, term, the contents of the proposals, the resolution of the Audit Committee, and the process of the opinions proposed by the Audit Committee: (I) The content of the particulars inscribed in Article14-5 of the Securities and Exchange Act. 1. The 12thmeeting of the 1stAudit Committee on 2020 03.17. A. The company’s 2019 financial statements The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. B. It is proposed to formulate the company’s 2019 earnings distribution plan. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. C. The company’s 2019 internal control system declaration The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. D. It is planned to handle the development of Sampo Tucheng factory; also, donate land in accordance with the law and negotiate the purchase of land for public facilities that qualified for plot ratio incentive and transfer in Tucheng District. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. 2. The 13thmeeting of the 1stAudit Committee on 2020.05.12. A. The company’s 2020 Q1 financial statements. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. 3. The 1stmeeting of the 2ndAudit Committee on 2020.07.14. A. It is proposed to have the company’s real estate disposed (15 land lots and ground constructions at No. 620, Dinghu Section, Guishan District, Taoyuan City). The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously.

23 -
The 2[nd] meeting of the 2[nd] Audit Committee on 2020.08.11. A. The company’s 2020 Interim financial statements. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. 5. The 3[rd] meeting of the 2[nd] Audit Committee on 2020.11.10. A. The company’s 2020 Q1–Q3 financial statements. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. B. The independence and competence evaluation of the independent auditors appointed by the company in 2020. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. C. The remuneration of the company’s independent auditor in 2020. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. D. Draft of the company’s 2021 audit plan. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. 6. The 4[th] meeting of the 2[nd] Audit Committee on 2021.01.25. A. Cooperate with the replacement of independent auditors inside the accounting firms and assess their independence and competency. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. B. It is planned to have the warehouse building of Sampo Tainan Factory added, the 2[nd] phase project (1F-3F) with steel structure. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. 7. The 5[th] meeting of the 2[nd] Audit Committee on 2021 03.24. A. The company’s 2020 financial statements. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. B. Draft of the company’s 2020 earnings distribution plan. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. C. The company’s 2020 internal control system declaration. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously.
24 -

Corporate governance

	Corporate governance	Corporate governance	Corporate governance
II. III.	D. It is planned to build a corporate headquarters at No. 19, Dinghu Road, Guishan District, Taoyuan City. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. E. It is planned to adjust the steel structure budget of the 2ndphase project (1F-3F) of the warehouse building of Sampo Tainan Plant. The resolution result of the Audit Committee: Approved by all the members present unanimously. The opinions of the Audit Committee handled by the company: Approved by all members present unanimously. (II) In addition to the aforementioned motions, other motions without the approval of the Audit Committee but approved by the Board with more than 2/3 of the Directors: None With respect to the avoidance of conflicting interest agendas, describe the names of independent directors, details of the relevant agendas, reasons for avoiding conflicting interest, and the voting decisions: None Performance of communications by and between independent directors, internal audit officer and Certified Public Accountant(s) (should include the company’s financial, business operation affairs, issued, methods and outcomes of communications among them): 1. The internal audit officer regularly submits audit reports and related financial business follow-up reports to independent directors; also, the other audit operations are reported in accordance with the operating procedures of the “Regulations Governing the Establishment of Internal Control Systems by Public Companies.” The Audit Committee depending on the situation will invite the independent auditors to attend the meeting to report and present the relevant worksheets in order to facilitate the understanding of necessary information. 2. The communication between independent directors and the internal audit officer is as follows: Meeting date (Term) Matters communicated with the internal audit officer Communication results 2020.03.17 (The 12thmeeting of the 1stterm) The company’s 2019 internal control system effectiveness report. No objection. 2020.11.10 (The 3rdmeeting of the 2nd term) The company’s 2021 audit plan. No objection. 2021.03.24 (The 5thmeeting of the 2nd term) The company’s 2020 internal control system effectiveness report. No objection. 3. Matters communicated between independent directors and independent auditors are as follows: Meeting date (Term) Matters communicated with the internal audit officer Communication results 2021.01.25 (The 4thmeeting of the 2nd term) 1. Discuss the audit of the 2020 individual financial statements and the 2020 consolidated financial statements of the company and its subsidiaries. 2. The replacement of independent auditors inside the accounting firms and assessment of their independence and competency No objection.
	Meeting date (Term)	Matters communicated with the internal audit officer	Communication results
	2021.01.25 (The 4thmeeting of the 2nd term)	1. Discuss the audit of the 2020 individual financial statements and the 2020 consolidated financial statements of the company and its subsidiaries. 2. The replacement of independent auditors inside the accounting firms and assessment of their independence and competency	No objection.

Note:

In the event that independent directors leave before the year is completed, the date when they leave should be indicated in the remark column. The actual attendance (seated) rate (%), on the other hand, shall be calculated by the number of board meetings held during service and the actual number of attendance (being seated) in the meetings.
Before a year is completed, upon any reelection of independent directors, names of the said independent directors, new and old, shall be listed and it shall be specified in the remark column that a specific director is old, new, or reelected, and the date of reelection. The actual attendance rate to committee session (%) shall be calculated on the basis of the number of sessions held by the Audit Committee in such period and the attendance in person in the sessions.
All supervisors of the company were dismissed in June 2017.
25 -

Corporate governance

(III) The corporate governance operation and the variation with the “Corporate Governance Best-Practice Principles for the TWSE/TPEx Listed Companies,” and the reasons for the variation:

Assessment Items	Operations (Note)	Operations (Note)	Operations (Note)	The variation with the “Corporate Governance Best-Practice Principles for TWSE or TPEx Listed Companies,” and the reasons forthe variation
	Yes	No	Summary
1. Will the company set up and disclose the company’s corporate governance best-practice principles based on the “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies”?	V		The company has formulated the “Corporate Governance Best-Practice Principles” to protect shareholders’ equity, strengthen the functions of the board of directors, respect the rights and interests of stakeholders, and enhance information transparency. Please refer to the corporate governance section on the “Market Observation Post System” and the corporate governance section on the company’s website for details, which are in compliance with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” without any material variation identified.	It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified.
2. The equity structure and shareholders’ equity of the company (1) Will the company have the internal procedures regulated to handle shareholders’ proposals, doubts, disputes, and litigation matters; also, have the procedures implemented accordingly? (2) Will the company possess the list of the company’s major shareholders and the list of the ultimate controllers of the major shareholders? (3) Will the company establish and implement the risk control and firewall mechanisms with the related parties? (4) Will the company set up internal norms to prohibit insiders from utilizing the undisclosed information to trade securities?	V V V V		The company has a spokesperson, an acting spokesperson, a public relation officer, and legal affair officer delegated to handle shareholders’ suggestions or disputes; also, the company’s website is designed with a “stakeholder” section. The company has had a list of major shareholders and their ultimate controllers lawfully, which is also reported lawfully. The company has established and implemented internal control mechanisms and firewalls, such as, the “Rules Governing the Supervision of Subsidiaries” and “Regulations Governing Long-term Investment” in accordance with the governing law. The company has formulated the “Procedures for Prevention of Insider Trade” and announced on the company’s internal website and official website to	It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified. It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified. It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified. It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed

26 -

Corporate governance

				Corporate govern
Assessment Items	Operations (Note)			The variation with the “Corporate Governance Best-Practice Principles for TWSE or TPEx Listed Companies,” and the reasons forthe variation
	Yes	No	Summary
			prohibit insiders using non-published information to trade securities.	Companies” with no major difference identified.
3. The Organization and Function of the Board of Directors (1) Will the board of directors have diversified policies regulated and implemented substantively according to the composition of the members? (2) Will the company, in addition to setting the Remuneration Committee and Audit Committee lawfully, have other functional committees set up voluntarily? (3) Has the company had the “Self-Evaluation or Peer Evaluation of the Board of Directors” and evaluation methods stipulated, the performance evaluation performed annually and regularly, the results of the performance evaluations reported to the board of directors, and the evaluation result applied as a reference for individual director’s remuneration and nomination for reelection? (4) Will the company have the independence of the public accountant evaluated regularly?	V V V V		The company considers the age, nationality, culture, and different professional knowledge and skills of the board members to have them evaluated. The company also has three independent directors appointed. The company has set up the “RBA (Responsible Business Alliance) Group,” dedicated to fulfilling corporate social responsibilities, and expected itself to exercise corporate social responsibilities as follows: “business ethics,” “corporate governance,” “shareholder feedback,” “environmental protection,” “promoting employee life balance,” and “providing a safe working environment;” also, substantiates various social responsibilities to give back to society. The Company formulated the Rules of the Performance Evaluation of the Board of Directors and the evaluation method on January 25, 2021, and performs evaluation regularly. For details, please refer to the operation of the board of directors 2. The implementation of the evaluation of the board of directors. The results will be used as a reference for determining the remuneration of individual directors and for director nomination and renewal of terms. The company assesses the independence and competence of the independent auditors at least once a year, focusing on direct or indirect material financial interests, independent from directors, supervisors, and managers, independent directors not holding positions that have significant influence on the company, and family members not violating independence requirements; also, the results are satisfactory.	It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified. It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified. It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified. It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified.

27 -

Corporate governance

				Corporate govern
Assessment Items	Operations (Note)			The variation with the “Corporate Governance Best-Practice Principles for TWSE or TPEx Listed Companies,” and the reasons forthe variation
	Yes	No	Summary
			The independent auditors and the CPA firm shall provide relevant information and declarations for the evaluation of the board of directors. The evaluations for the last two years were completed on November 11, 2019 and November 10, 2020, respectively. There is no violation of independence or unresolved conflicts of interest.
4. Have TWSE/TPEx-listed companies staffed eligible and an in appropriate number of personnel for corporate governance to take charge of corporate governance related issues (including but not limited to providing directors and supervisors with the data required for the performance of their duties, assisting directors and supervisors in law compliance, handling of the relevant issues in the board of directors’ and shareholders’ meeting, production of the minutes of board of directors’ meeting and shareholders’ meeting and the like)	V		Mr. PENG, CHUN-YEN, Vice President of the Resource Management Center, serves as the Corporate Governance Officer to establish a good corporate governance system, to protect shareholders’ equity, and to strengthen the functions of the board of directors. Mr. PENG, CHUN-YEN, Vice President, has more than three years of management experience in legal affairs, finance, accounting, auditing, and board meeting affairs, and is responsible for assisting directors in performing their duties, providing necessary information and continuing study, board of directors and shareholders’ meeting procedures and resolution compliance matters, implementation of ethical corporate management, protection of investor relations,and other related matters.	It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified.
5. Has the company established channels for communications with the stakeholders (including but not limiting to shareholders, employees, customers, and suppliers), and set up a section for stakeholders at the official website of the company with proper response to the concerns of the stakeholders on issues related to corporate social responsibility?	V		The company has assigned responsible units for each stakeholder and has set up a section for stakeholders at the official website of the company. The responsible unit of the company will respond to and deal with the problems of the stakeholders, which will also be reported to the senior executives for review on a regular basis.	It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified.
6. Has the company contracted a professional stock affairs agency to handle the shareholders’ meeting related affairs?	V		The company has contracted a professional stock affairs agency to handle the shareholders’ meeting related affairs. Please refer to the contents of the annual report.	It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified.
7. Disclosure of Information (1)Does the companyhave a website set upand the financial	V		The companydiscloses relevant information on the	It complies with the “Corporate

28 -

Corporate governance

				Corporate govern
Assessment Items	Operations (Note)			The variation with the “Corporate Governance Best-Practice Principles for TWSE or TPEx Listed Companies,” and the reasons forthe variation
	Yes	No	Summary
business and corporate governance information disclosed? (2) Has the company adopted other information disclosure methods (such as, establishing an English website, designating a responsible person for collecting and disclosing information of the company, substantiating the spokesman system, placing the juristic person seminar program on the company’s website, etc.)? (3) Will the company announce and declare the annual financial report within two months after the end of the fiscal year? Will the company announce and declare the Q1, Q2, and Q3 financial reports along with the monthly operatingreports before theprescribed deadline?	V V		corporate website (www.sampo.com.tw) at any time. Relevant departments have been designated to be responsible for the collection and disclosure of company information, a person who can speak on behalf of the company alone serves as the company’s spokesperson and acting spokesperson, and the process of the investor conference is uploaded to the official website The company has information announced and reported before the deadline in accordance with the regulations. In addition, the relevant information is disclosed in the annual report or at the Market Observation Post System (MOPS).	Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified. It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified. It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified.
8. Is there any further information that may help to understand the status of corporate governance operation of the company better (including but not limited to labor rights, employee care, investor relation, supplier relation, stakeholders’ rights, the continuing education of the Directors and Supervisors, risk management policy and risk assessment in action, the pursuit of customer policy, and the protection of the Directors and Supervisors with professional liabilityinsurance)?	V		The company has set up a section for stakeholders, a section for corporate governance, and a section for corporate social responsibility at the official website of the company to maintain relevant information and provide relevant information or responding to the needs of each stakeholder. In addition, relevant information is disclosed in the annual report or at the Market Observation Post System (MOPS).	It complies with the “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies” with no major difference identified.
9. Response to the corporate governance evaluation result released by the Corporate Governance Center of Taiwan Stock Exchange Corporation in the most recent year, and further effort shall be made on matters for improvement but still unaccomplished. 1. The company’s 7thcorporate governance evaluation score is 60.89 points, ranking range:51%~65%; also, enhances the disclosure of matters on the official website, annual report, and Market Observation Post System (MOPS) in accordance with the corporate governance evaluation results. 2. In order to establish a good corporate governance system, the company has Mr. PENG, CHUN-YEN, Vice President of the Resource Management Center, appointed as the Corporate Governance Officer to perform corporate governance-related businesses in accordance with his authority, and to report and handle tasks in accordance with the law and regulations.

Note: Whether the company selects “Yes” or “No” in operations, it should explain the situation in the summary space.

29 -

The advanced study of Directors (including juristic person’s representatives and independent directors) in 2020:

Title	Name	Date of (elected to) office	Training date	Organizer	Course name	Training hours
Institutional Director’s representative	CHEN, SHENG- TIEN	2020/06/12	2020/11/10	Taiwan Corporate Governance Association	5G key technologies and application opportunities	3 hours
			2020/12/08	Taiwan Corporate Governance Association	Red flag of false financial report	3 hours
Director	Chen, Sheng- Chuan	2020/06/12	2020/11/10	Taiwan Corporate Governance Association	5G key technologies and application opportunities	3 hours
Director	Chen, Sheng- Wei	2020/06/12	2020/10/16	Taiwan Securities Exchange Corporation	Corporate Governance and Ethical Corporate Management – Directors and Supervisors Conference	3 hours
			2020/11/10	Taiwan Corporate Governance Association	5G key technologies and application opportunities	3 hours
Institutional Director’s representative	HSU, CHING- CHAO	2020/06/12	2020/9/21	Taiwan Securities Exchange Corporation	Corporate Governance 3.0 – Blueprint for Sustainable Development	3 hours
			2020/11/10	Taiwan Corporate Governance Association	5G key technologies and application opportunities	3 hours
			2020/12/24	Taiwan Corporate Governance Association	Prevention of insider trading	3 hours
Independent Director	Chian, Chen- Rong	2020/06/12	2020/8/29	Zhong Dao Association of Leadership & Culture	Deepen corporate governance and corporate social responsibility culture	3 hours
			2020/11/10	Taiwan Corporate Governance Association	5G key technologies and application opportunities	3 hours
Independent Director	Lou, Yung- Chien	2020/06/12	2020/5/6	Taiwan Corporate Governance Association	Board operation and decision-making effectiveness	3 hours
			2020/11/10	Taiwan Corporate Governance Association	5G key technologies and application opportunities	3 hours
Independent Director	Huang, Chiu- Yung	2020/06/12	2020/9/21	Taiwan Securities Exchange Corporation	Corporate Governance 3.0 – Blueprint for SustainableDevelopment	3 hours
			2020/11/10	Taiwan Corporate Governance Association	5G key technologies and application opportunities	3 hours

30 -

Corporate governance

(IV) The composition and operation of the Remuneration Committee:

1. Information of the Remuneration Committee members:

By identity (Note 1)	Conditions Name	More than 5 years of work experience and thefollowing professionalqualification	More than 5 years of work experience and thefollowing professionalqualification	More than 5 years of work experience and thefollowing professionalqualification	Status of independence (Note 2)	Status of independence (Note 2)	Status of independence (Note 2)	Status of independence (Note 2)	Status of independence (Note 2)	Status of independence (Note 2)	Status of independence (Note 2)	Status of independence (Note 2)	Status of independence (Note 2)	Status of independence (Note 2)	Number of other public companies where the member is also a member of their remuneration committees	Remarks
		Lecturer or higher ranking at the business, legal affairs, financial affairs, or accounting department, or other departments relating to corporate operation of public and private colleges and universities	A professional or technician who has approved the national examination for professionals like court judge, prosecutor, lawyer, certified public accountant, or any other expertise required for the business operation of the company with the issuance of a certificate of completion	Work experience required for business, legal affairs, financial affairs, accounting, or corporate operation	1	2	3	4	5	6	7	8	9	10
Independent Director	Chian, Chen- Rong	V		V	V	V	V	V	V	V	V	V	V	V	3	Scope of job responsibilities “Note 3”
Independent Director	Lou, Yung- Chien	V			V	V	V	V	V	V	V	V	V	V	0
Independent Director	Huang, Chiu-Yung			V	V	V	V	V	V	V	V	V	V	V	2

Note 1: Identity is known as director, independent director or others.

Note 2: If each member meets the following conditions two years before the election and during the tenure, please tick (“V”) the box of each condition code.
(1) Non-employees of the company or its affiliates
(2) Not a director or supervisor of the company or its affiliates (except for independent directors of the company and its parent company, subsidiaries or the subsidiaries of the same parent company established in accordance with this Act or the local laws).
(3) Not the principal and the principal’s spouse, minor children, or other natural person shareholders who hold more than 1% of the total issued shares of the company or on the top-ten shareholders list
(4) Not the spouse, the kindred to the second tier under the Civil Code or the direct kin within the third tier under the Civil Code of the managers stated in (1) or other roles stated in (2), (3).
(5) Not a director, supervisor or employee of an institutional shareholder directly holding more than 5% of the outstanding shares issued by the company, or a director, supervisor or employee of an institutional shareholder who is among the top 5 shareholders, or a representative of an institutional shareholders appointed as the director or supervisor of the company according to Paragraph 1 or 2, Article 27, Company Act (except for independent directors of the company and its parent company, subsidiaries or the subsidiaries of the same parent company established in accordance with this Act or the local laws).
(6) Not a director, supervisor or employee of a company controlling over one half of the company’s director seats or voting shares under one person (except for independent directors of the company and its parent company, subsidiaries or the subsidiaries of the same parent company established in accordance with this Act or the local laws).
(7) Not a director of a company or institution whose chairman and president or equivalent role is the same person or its spouse (except for independent directors of the company and its parent company, subsidiaries or the subsidiaries of the same parent company established in accordance with this Act or the local laws).
(8) Directors, supervisors, managers or shareholders holding more than 5% of shares in specific companies or institutions that do not have financial or business dealings with the company (but independent directors appointed according to local laws and regulations holding other positions in possession of more than 20% and less than 50% of issued shares belonging to specific companies or institutions that are parent, subsidiary, or belonging to the same parent company are not applicable).
(9) Business owners, partners, directors (directors), supervisors (supervisors), managers and their spouses, or professionals, sole proprietorships, partnerships, companies or institutions involved in commercial, legal, financial, accounting services did not provide audits or accumulate NTD$ 500,000 compensation over the past 2 years. However, this restriction does not apply to a member of the Remuneration Committee, public tender offer review committee or special committee for merger and acquisition, who exercises powers pursuant to the “Securities and Exchange Act” or the “Business Mergers and Acquisition Act” and relevant law and regulations.
(10) Does not meet any descriptions stated in Article 30 of the Company Act.
Note 3: The scope of main job responsibilities of the Remuneration Committee is as follows:
The Committee should exercise due diligence to “set and regularly review the annual performance evaluation and remuneration policies of the company’s directors and managers” and “regularly evaluate the target achievement of the company’s directors and managers” with the proposed recommendations submitted to the board of directors for discussion. The performance evaluation and remuneration of directors and managers should be processed by referring to the payment standard of the industry, considering the responsibilities of individuals, the remuneration of others in the same job position, as well as evaluating the connection of personal performance, company operating performance, and future risks from the company’s financial status, which should not lead directors and managers, in pursuit of remuneration, to engage in acts exceeding the company’s risk tolerance.
31 -
Information on the operation of the Remuneration Committee:
(1) The Remuneration Committee of the company consists of 3 members.
(2) The office term of the current Committee members: From June 12, 2020 to June 11, 2023, the Remuneration Committee had convened four times (A) in the most recent year. The attendance of the committee members is shown below:

Title	Name	Actual number of attendance(B)	Attendance by proxy	Attendance rate (%) (B/A) (Note)	Remarks
Convener	Chian, Chen- Rong	4	0	100	Elected on 2020/6/12, reelection
Committee member	Lou, Yung- Chien	4	0	100	Elected on 2020/6/12, reelection
Committee member	Huang, Chiu- Yung	4	0	100	Elected on 2020/6/12, reelection
The 2020 committee meeting is convened as follows: 1. The 8thmeeting of the 3rdRemuneration Committee was convened on 2020/1/8. Proposal I: Review of the 2019 bonus distribution to the company’s managers Resolution of the Remuneration Committee: Approved by all members present unanimously. The opinions of the Remuneration Committee handled by the company: It was submitted to the board of directors and approved by the independent directors and all directors present. Proposal II: Review of the 2020 transfer of treasury stock to the company’s managers Resolution of the Remuneration Committee: Approved by all members present unanimously. The opinions of the Remuneration Committee handled by the company: It was submitted to the board of directors and approved by the independent directors and all directors present. 2. The 9thmeeting of the 3rdRemuneration Committee was convened on 2020/3/17 Cause of action: Review of the company’s 2019 remuneration to directors and employees Resolution of the Remuneration Committee: Approved by all members present unanimously. The opinions of the Remuneration Committee handled by the company: It was submitted to the board of directors and approved by the independent directors and all directors present. 3. The 1stmeeting of the 4thRemuneration Committee was convened on 2020/7/14 Cause of action: Review of the company’s 2019 remuneration to directors Resolution of the Remuneration Committee: Approved by all members present unanimously. The opinions of the Remuneration Committee handled by the company: It was submitted to the board of directors and approved by the independent directors and all directors present. 4. The 2ndmeeting of the 4thRemuneration Committee was convened on 2020/8/11 Cause of action: Review of the 2020 salary adjustment for the company’s managers Resolution of the Remuneration Committee: Approved by all members present unanimously. The opinions of the Remuneration Committee handled by the company: It was submitted to the board of directors and approved bythe independent directors and all directorspresent.

Note: 1. In the event that Remuneration Committee members leave before a year is completed, the date when they leave should be indicated in the remark column. The actual attendance rate (%), on the other hand, shall be calculated by the number of Remuneration Committee meetings held during service and the frequency number of attendance in the meetings.

Before a year is completed, upon any reelection of Remuneration Committee members, names of the said members, new and old, shall be listed and it shall be specified in the remark column that a specific member is old, new, or reelected, and the date of reelection. The attendance rate to committee session (%) shall be calculated on the basis of the number of sessions held in such period and the actual number in attendance in the sessions.
32 -

Corporate governance

(V) The pursuit of fulfilling social responsibilities and the deviation from the “Corporate Social Responsibility BestPractice Principals for TWSE/TPEx Listed Companies,” and the reasons for the variation:

Assessment Items	Operations(Note 1)	Operations(Note 1)	Operations(Note 1)	Deviation from the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies,” and the reasons for the variation
	Yes	No	Summarized explanation (Note 2)
1. Does the company assess the risk of environmental, social, and governance (ESG) issues in relation to corporate operations based on the materiality principles and establish policies or strategies in relation to risk management? (Note 3)	V		The company conducts various risk assessments in accordance with the regulations, and establishes related management mechanisms. The formulated internal risk management policies are to take precautionary measures in order to reduce losses due to risks. Identify, evaluate, handle, and monitor potential risks that may affect the company’s achievement ofgoals.	It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified.
2. Has the company set up a full-time (part-time) unit responsible for promotion of corporate social responsibility with the management authorized by the board of directors to handle related matters and report the results to the board?	V		The company’s Resource Management Center is the part-time unit responsible for the promotion of corporate social responsibility. The board of directors authorizes senior executives to implement environmental, social, and corporate governance operation, to formulate corporate sustainable development goals and plans, to effectively execute corporate social responsibility, and to report regularlyto the board of directors.	It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified.
3. Environmental issues (1) Has the company established an appropriate environmental management system according to its industrial characteristics? (2) Is the company committed to improving the utilization efficiency of various resources and using recycled materials that have a low impact on the environment?	V V		The company has qualified the ISO14001 environmental management system certification, and has established a management system in compliance with various environmental policies, such as, ISO14001 commitment to pollution prevention concepts, promotion of environmental improvement, research and development of green products, promotion of environmental protection education and training, restrictions on the use of hazardous substances, and strengthening waste recycling. The waste generated by the company is recycled and reused by a professional organization with a waste disposal permit, and environmentally friendly materials are developed and used by the research and development unit. The company has passed ISO14001 certification, and maintained the workingenvironment and natural	It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified.

33 -

Corporate governance

				Corporate governance
Assessment Items	Operations(Note 1)			Deviation from the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies,” and the reasons for the variation
	Yes	No	Summarized explanation (Note 2)
(3) Has the company assessed the potential risk or opportunity deriving from climate change and its effect on the company at present and in the future, and mapped out the response measures to climate- related issues? (4) Has the company kept statistics on the greenhouse gas emission volume, water consumption volume, and total weight of wastes over the last 2 years, and mapped out the policies for managing the reduction of carbon, greenhouse gas emission, water consumption, and the generation of wastes?	V V		environment and reported them in accordance with the Public Safety Building Act, Fire Service Act, Occupational Safety and Health Act, Waste Disposal Act, Energy-Saving and Carbon-Reduction Act, etc. The company has implemented Cycle-Pentane processing equipment in response to the Montreal Protocol. In addition, the company has the refrigerator cyclopentane foaming and R600A coolant equipment installed and constructed in response to the environmental protection policy. In response to the concept of green environment protection, product R&D and design have also been fully developed towards frequency conversion and energy saving. The entire series of displays will be certified with national energy- saving mark and qualified for ISO14001 environmental management certification every year. The company has qualified the ISO45001 occupational safety management system certification. It is necessary to define and summarize the inventory results and scope of all greenhouse gas emission sources in the organization by referring to the factory layout and process flowchart every year, and then document them in the “Environmental Information Verification Service Platform”(http://weeerohs.azurewebsites.net/).	It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified.
4. Social issues (1) Has the company established relevant management policies and procedures in accordance with applicable law and regulations and the “International Convention of Human Rights?”	V		The company promises to provide employees with a friendly working environment that allows them to exercise their talents; also, to comply with the “UN Universal Declaration of Human Rights,” “United Nations Global Compact, UNGC,” “International Labor Organization,” and other international human rights conventions, as well as domestic “Labor Standards Act,” “Act of Gender Equality in Employment,” “Occupational Safety and Health Act,” and other labor law and regulations. The company joined the RBA(Responsible Business	It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It does complywith the “Corporate Social

34 -

Corporate governance

				Corporate governance
Assessment Items	Operations(Note 1)			Deviation from the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies,” and the reasons for the variation
	Yes	No	Summarized explanation (Note 2)
(2) Has the company formulated and implemented reasonable employee welfare measures (including remuneration, vacations, and other benefits), and reflected operating performance or results on employee remuneration adequately? (3) Has the company provided a safe and healthy work environment for the employees and provided education on health and safety at regular intervals? (4) Has the company formed an effective career development training program for employees? (5) Has the company complied with applicable legal rules and international standard in marketing and labeling of products and services for the health and safety, and privacy of the customers, and mapped out the policies for the protection of consumer rights, and procedures for complaint?	V V V V		Alliance) in 2015 and implemented the “RBA Code of Conduct” to prevent any infringements and violations of human rights. The company has formulated various welfare measures, including remuneration, vacations, and other benefits; also, established the “Sampo Employees Welfare Committee” to formulate various related welfare matters for employees, and has reasonably reflected operating performance and results on remuneration to employees. The company’s industrial safety management principle is to construct a safe, comfortable, and healthy working environment, and to protect the safety of employees. Formulate labor safety and health work rules, establish and maintain a safe and healthy working environment, and achieve the safety goal of zero-disaster through effective management. The company’s factories have qualified ISO14001 environmental management certification, and separately or jointly obtained OSHMS, ISO45001, and other management system certifications. In addition, the company has arranged special employee health checkups annually and labor health checkups every two years according to law and regulations. The company arranges employee education and training annually, and plans and arranges professional and career development training for employees in accordance with employee’s job functions and career plan. The company has a customer service center (toll-free number 0800005438) set up to handle customer complaints about products, maintenance, services, and grievances. All customer information is protected in accordance with government regulations and will not be leaked or used illegally. The company has a quality inspection and quality assurance unit set up to check the products. The product inspection and labeling have passed the BSMI inspection by the Bureau of Standards, Metrologyand Inspection,MOEA,which is labeled and	Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified.

35 -

Corporate governance

				Corporate governance
Assessment Items	Operations(Note 1)			Deviation from the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies,” and the reasons for the variation
	Yes	No	Summarized explanation (Note 2)
(6) Has the company established the supplier management policy to demand suppliers to comply with applicable rules and regulations governing environmental protection, occupational safety and health, or labor rights, and the state of implementation?	V		implemented in accordance with the “Commodity Labeling Act.” The company has established a management policy that meets RBA standards, and regularly evaluates and requires suppliers to meet “IECQ QC080000 hazardous substance reduction and exemption management,” “RBA responsible business alliance code of conduct” and “ISO45001 occupational safety and health management standards.”	It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified.
5. Has the company referred to the internationally standards or guidelines for the preparation of reports to prepare corporate social responsibility reports and other reports that disclose the company’s non-financial information? Has the aforementioned reports obtained the confirmation or guarantee opinion of a third-party verification unit?		V	The company is not subject to the law currently that requires the preparation of a corporate social responsibility report. The company has included corporate social responsibility-related actions (such as, the concepts of environmental protection, energy conservation, and green energy) in the operating strategy or core business development, implemented the promotion of corporate governance, developed a sustainable environment, safeguarded social welfare and the rights and interests of stakeholders, and promoted corporate sustainable development.	It does comply with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified.
6. If the company has the “Corporate Social Responsibility Best-Practice Principles” established in accordance with the “Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies,” please specify the deviation between them: The company has formulated the “Corporate Social Responsibility Best-Practice Principles,” established the corporate social responsibility management system and mechanism, and implemented all key points of operation; therefore, it is in compliance with the “Corporate Social ResponsibilityBest-Practice Principles for TWSE/TPEx Listed Companies” without anymaterial variation identified.
7. Other important information that may help to understand the operation of corporate social responsibility: The company’s President agrees to have the corporate social responsibility policy published: The company complies with law and regulations; respects employees’ freedom of employment; employs no child labor or youth labor; and prohibits working overtime. Provides reasonable salary and benefits, and complies with humanity treatment. Prohibits discrimination in any form, and respects employees’ freedom of association, privacy, and personal data security. The company provides suitable workplaces and is committed to promoting employee health, safety, and hygiene. The company commits to protect environment and is committed to environmental protection and energy saving. The company upholds the principle of honesty and integrity, prohibits improper profits gaining, and promises not to use conflict minerals. Keep company information transparent, actively protect intellectual property rights, and comply with fair trade standards. Protect the identity of internal and external informants, participate in various community activities, and fulfill corporate social responsibilities. Strengthen the promotion through the website and internal and external publications, express the company’s determination to operate with integrity, and include corporate social responsibilityrelated courses in routine education and training.

Note 1: If you answer “Yes” to the operations related questions, please explain the important policies, strategies, measures, and implementations adopted; if you answer “No” to the operations related questions, please explain the reasons and explain the plan in adopting relevant policies, strategies, and measures in the future.

Note 2: If the company has prepared a corporate social responsibility report, in terms of “operations,” it can be replaced with the method of checking the corporate social responsibility report and page index indicated. Note 3: The principle of “materiality” refers to the environmental, social, and corporate governance issues that have a significant impact on the company’s investors and other stakeholders.

36 -

Corporate governance

(VI) The ethical corporate management operation and the deviation from the “Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies,” and the reasons for the variation:

Assessment Items	Operations(Note 1)	Operations(Note 1)	Operations(Note 1)	Deviation From the “Ethical Corporate Management Best- Practice Principles for TWSE or TPEx Listed Company” and the reasons for the variation
	Yes	No	Summary
1. Establishment of ethical corporate management policy and proposal (1) Has the company specified its policy and method for the implementation of ethical corporate management in its Article of Incorporation and external documents, and have the Board and the management of the company promised to pursue the policy of ethical corporate management? (2) Has the company established an assessment mechanism of risk from unethical behavior to regularly analyze and assess business activities with higher risk of involvement in unethical behavior and preventive programs for unethical behaviors containing at least the preventive measures stated in Paragraph 2, Article 7 of the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx-Listed Companies?” (3) Has the company established in the preventive programs the operating procedures for unethical behavior prevention, penalties and grievance systems of breaching the guidelines for conduct, and implemented and periodically reviewed them?	V V V		The company formulated the “Ethical Corporate Management Best-Practice Principles” on March 24, 2011 to substantiate the ethical corporate management policy and to actively prevent unethical conducts, which was approved by the board of directors; also, the amendments were approved and implemented by the board of directors on March 20, 2017, November 11, 2019, and January 8, 2020, and reported in the shareholders’ meetings on June 12, 2020. The newly elected directors and independent directors after the election of the 26thboard of directors issued a statement of non-violation of the principle of ethical corporate management to demonstrate the company’s commitment to actively implement the ethical corporate management strategy. According to the “Regulations Governing the Establishment of Internal Control Systems by Public Companies,” the controlling environment of the company’s internal control system constituents includes preventing the business activities with high risk of unethical conduct within the business scope, and evaluating the appropriateness and effectiveness of execution within the annual self-evaluation of the internal control system operation to prevent the risk of unethical corporate management accordingly. The company while implementing corporate social responsibility has formulated regulations for preventing unethical conducts in various operating procedures. Such as, formulate the “Informant Regulations” and the “Rules Governing the Control of Improper Gains” to conduct ethical corporate management and toprohibit anyform of bribery.	It complies with the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It complies with the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It complies with the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified.

37 -

Corporate governance

2. Implementation of Ethical Corporate Management (1) Has the company assessed the ethical management records of the counterparties and specified the ethical corporate management clauses in the contracts that it has signed with the counterparties? (2) Has the company set up a unit responsible for promotion of corporate ethical management under the Board? Does the company report its ethical corporate management policy, unethical conduct prevention plan, and relevant supervision and implementation regularly (at least once a year)? (3) Has the company made the policies for the prevention of the conflict of interest and provided appropriate channels for the proper pursuit of the avoidance of the conflict of interest? (4) Has the company established an effective accounting system and internal control system for the implementation of ethical corporate management; also, has the internal audit unit drafted up relevant audit plans according to the assessment results of unethical conducts in order to verify compliance with the plan to prevent unethical conducts, or to have the audits performed by independent auditors? (5) Has the company regularly organized internal and external education training on ethical corporate management?	V V V V V		The company has formulated relevant measures for implementation, and clearly stipulated the ethical conduct clauses in the contract, such as, having violations handled according to the agreements. The company has organized a part-time unit (corporate governance team) responsible for the promotion and operation of ethical corporate management, and has regularly reported its implementation to the board of directors. The company has had a complaint hotline and a grievance mailbox in service with the informant protected. The practice of recusal is exercised when there is a conflict of interest surfacing. The company has handled matters in accordance with the law and regulations. The audit unit assesses the risks and executes the audit in accordance with the prepared audit plan, and contracted the independent auditors to regularly check various systems, and regularly reports to the board of directors. The company regularly arranges the education and training programs for senior executives, existing employees, and new employees to explain the principles of ethical corporate management. The company had arranged the internal corporate social responsibility courses for the benefit of about 80 persons and a total of about 160 hours.	It complies with the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It complies with the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It complies with the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It complies with the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It complies with the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified.
3. The function of the reporting system of the company (1) Has the company established the system for reporting unethical practices with action plan and rewards to the informants, and relevant channels for reporting, and also the appointment of designated personnel for handling the report and the person being reported? (2)Has the companyestablished the standard operationprocedures for the	V V		The company has established a convenient, transparent, and smooth reporting channel, and has assigned a dedicated unit to accept and protect the informants. There has been no reporting event this year. The companyhas formulated the “Informant	It complies with the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It complies with the “Ethical

38 -

Corporate governance

investigation of complaints as reported, follow-up actions after the investigation, and related mechanisms for confidentiality? (3) Has the company taken appropriate measures for the protection of the informants from undue treatment after reporting?	V	Regulations” and “Regulations Governing the Reporting and Confidentiality of Informants,” and also standardized and implemented the relevant operating procedures for accepting and reporting matters. The company has formulated the “Regulations Governing the Reporting and Confidentiality of Informants” to protect informants from being punished unjustly.	Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified. It complies with the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformityidentified.
4. Intensification of Disclosure Has the company disclosed on its website and Market Observation Post System the content and promotion effect of its “Ethical Corporate management Best-Practice Principles?”	V	The relevant information has been disclosed on the company’s website and Market Observation Post System.	It complies with the “Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” without any material nonconformity identified.
5. If the company has the “Ethical Corporate Management Best-Practice Principles” formulated in accordance with the “Ethical Corporate management Best-Practice Principles for TWSE/TEPx Listed Companies,” please specify the operation and the deviation between them. The company has the “Ethical Corporate management Best-Practice Principles” formulated in accordance with the “Ethical Corporate management Best-Practice Principles for TWSE/TEPx Listed Companies.” The company has organized a part-time unit responsible for the promotion and operation of ethical corporate management and has regularly reported its implementation to the board of directors;also,the operatingstatus is disclosed in the annual report and there has been no difference in operation identified so far.
6. Other vital information that helps to understand the practice of business integrity of the company (e.g. the review and revision of the best-practice principles of the company in business integrity) The company strengthens the promotion to stakeholders through the website and internal and external publications, express the company’s determination to operate with integrity. The company formulated the “Ethical Corporate Management Best-Practice Principles” on March 24, 2011, which was approved by the board of directors; also, the amendments were approved and implemented by the board of directors on March 20, 2017, November 11, 2019, and January 8, 2020, and reported in the shareholders’ meetings on June 12, 2020.

Note: Whether the company selects “Yes” or “No” in operations, it should explain the situation in the summary space.

39 -

(VII) If the company has the “Corporate Governance Best-Practice Principles” and related regulations formulated, the inquiry method should be disclosed:

The company’s board of directors approved the “Corporate Governance Best-Practice Principles” on March 23, 2015; also, the amendments to the “Corporate Governance Best-Practice Principles” were approved by the board of directors on May 5, 2017, March 21, 2019, and January 25, 2021, which were issued and announced on the company’s website and Market Observation Post System – Corporate Governance section.

(VIII) Other important information that may help to understand the operation of corporate governance should also be disclosed.

The company has formulated the “Procedures for Handling Material Inside Information,” which was approved in the 25[th] meeting of the 22[nd] Board of Directors of the company; also, conducted education and propaganda to the company’s directors, supervisors, managers, and employees through the company’s internal website. The “Procedures for Handling Material Inside Information” has been uploaded to the company’s internal website and it is for the reference and compliance of colleagues; also, the relevant implementation status is disclosed in the annual report.

2. Managers’ participating corporate governance training:

Title	Name	Date of (elected to) office	Training date	Organizer	Course name	Training hours
President	HSU, CHING- CHAO	2019/3/4	2020/11/10	Taiwan Corporate Governance Association	5G key technologies and application opportunities	3 hours
Vice President	PENG, CHUN- YEN	2021/3/1	2020/11/10	Taiwan Corporate Governance Association	5G key technologies and application opportunities	3 hours
Vice President	CHEN, YE- KWAN	2021/3/1	2020/11/10	Taiwan Corporate Governance Association	5G key technologies and application opportunities	3 hours

(IX) The following matters related to the implementation of the internal control system should be disclosed:

Internal control statement: Please refer to next page for details.
Those who contract the independent auditors to review the internal control system should disclose the independent auditor’s report: None
40 -

Corporate governance

SAMPO CORPORATION Declaration of Internal Control System

Date: March 24, 2021

The company’s 2020 internal control system statement is as follows in accordance with the selfevaluation results:

The company is aware that the establishment, execution, and maintenance of the internal control policies are the responsibility of the company’s board of directors and managers. The company has such system established. The purpose is to provide reasonable assurance on the achievement of operating effectiveness and efficiency (including profits, performance, and assets safeguarding), reporting matters with reliability, timeliness, and transparency, and compliance with the relevant law and regulations.
Internal control policies are burdened with limitations. No matter how they are robustly designed, effective internal control policies merely provide reasonable assurance to the achievements of the aforementioned three goals. Furthermore, environmental and situational changes may affect the effectiveness of internal control policies. However, self-supervision mechanism was implemented within the company’s internal control policies to facilitate immediate rectification once procedural flaws have been identified.
The company has based on the criteria of the internal control system effectiveness in the “Regulations Governing the Establishment of Internal Control System by Public Companies” (referred to as the “Regulations” hereinafter) to determine the effectiveness of the internal control system design and implementation. The criteria stated in the “Regulations” consist of five major elements, each representing a different stage of internal control: 1. Control environment, 2. Risk evaluation, 3. Procedural control, 4. Information and communication, 5. Supervision. Each element further contains several items. Please refer to the “Regulations” for details.
The company has adopted the internal control system criteria in the preceding paragraph to evaluate the effectiveness of the company’s internal control system in both design and implementation.
The company, based on the evaluation results stated in the preceding paragraph, believes that the design and implementation of the company’s internal control system (including the supervision and management of subsidiaries) was effective as of December 31, 2020, which helped reasonably ensure the achievement of the following objectives: understanding the effectiveness of operations and the extent to which efficiency targets were achieved and a reliable, timeliness, and a transparent reporting system in place that complied with relevant requirements, law, and regulations.
This declaration forms part of the main contents of the company’s annual report and prospectus, and shall be disclosed to the public. Any misrepresentation or concealment of the aforementioned disclosures shall be liable to violation of Articles 20, 32, 171 and 174 of the Securities and Exchanges Act and the legal consequences thereof.
This declaration was approved by the company’s board of directors on March 24, 2021. None of the 7 directors present held objections to the content of this declaration.

SAMPO CORPORATION

Chairman: Chen Mao-Bang Industry and Commerce Development Foundation

President: HSU, CHING-CHAO

41 -
(X) In the most recent year and as of the annual report publication date, the company and its internal personnel had been punished in accordance with law, or the company had imposed penalties on its internal personnel for violations of the internal control system, and the results of the penalties may have a significant impact on shareholders’ equity and securities prices, then the punishment content, major nonconformities, and corrective actions should be specified: None

(XI) Major resolutions of the shareholder and board meetings in the most recent year to the day this Annual Report was printed:

Important resolutions of the shareholders’ meeting and the implementation:

Date	Major resolutions	Status of implementation:
2020.06.12	1. Ratified the company’s 2019 business report and financial statements. 2. Ratified the company’s 2019 earnings distribution proposal. 3. Amendments to the company’s “Ethical Corporate Management Best-Practice Principles.” 4. Amendments to the company’s “Rules of Procedures for Shareholders’ meetings.” 5. The reelection of all the directors; 6. Approved the lifting of the non-compete restrictions on the newly elected directors and their representatives.	Complied with the resolutions reached. The distribution base date was scheduled on July 7, 2020, and the distribution was completed on July 17, 2020 in accordance with the resolution of the shareholders’ meeting. (Distribution of cash dividends of NT$1.5 per share) ) It had been implemented in accordance with the amended regulations. It had been implemented in accordance with the amended regulations. It had been implemented in accordance with the election results. It was uploaded completely for announcement on June 12, 2020 in accordance with the resolutions of the shareholders’ meeting.

2. Major resolutions of the Board of Directors

Date	Major resolutions
2020.01.08	1. Approved the company’s 2020 business operation plan. 2. Approved the 2019 bonus distribution plan for the company’s managers. 3. Approved the 2020 transfer of treasury stock to the company’s managers. 4. Approved the amendments to the “Rules of Procedures for Board of directors’ meetings” 5. Approved the 2018 unappropriated earnings subject to the “substantive investment subject to unappropriated earnings reduction” proposal as stated in Article 23-3 of the“Statute for Industrial Innovation.”
2020.03.17	1. Approved the company’s 2019 remuneration to employees and directors. 2. Ratified the company’s 2019 financial statements. 3. Approved the company’s 2019 earnings distribution proposal. 4. Approved the company’s 2019 internal control system declaration. 5. Approved the 2019 unappropriated earnings subject to the “substantive investment

Date

Major resolutions

2020.01.08

1. Approved the company’s 2020 business operation plan.
2. Approved the 2019 bonus distribution plan for the company’s managers.
3. Approved the 2020 transfer of treasury stock to the company’s managers.
4. Approved the amendments to the “Rules of Procedures for Board of directors’
meetings”
5. Approved the 2018 unappropriated earnings subject to the “substantive investment
subject to unappropriated earnings reduction” proposal as stated in Article 23-3 of
the“Statute for Industrial Innovation.”

2020.03.17

1. Approved the company’s 2019 remuneration to employees and directors.
2. Ratified the company’s 2019 financial statements.
3. Approved the company’s 2019 earnings distribution proposal.
4. Approved the company’s 2019 internal control system declaration.
5. Approved the 2019 unappropriated earnings subject to the “substantive investment

42 -

Corporate governance

	Corporate governance
Date	Major resolutions
	subject to unappropriated earnings reduction” proposal as stated in Article 23-3 of the “Statute for Industrial Innovation.” 6. Approved the company’s deadline extension for the “16thTreasury Stock Transfer to Employee” proposal. 7. Approved the company’s disposal of real estate (15 land lots and ground constructions at No. 620, Dinghu Section, Guishan District, Taoyuan City). 8. Approved the development of Sampo Tucheng factory; also, the donation of land in accordance with the law and negotiating the purchase of land for public facilities that qualified for plot ratio incentive and transfer in Tucheng District. 9. Approved the amendments to the company’s “Rules of Procedures for Shareholders’ meetings.” 10. Approved having the shareholders’ nomination rights related matters handled by the regular shareholders’ meeting. 11. Approved having the shareholders’ proposing rights and electronic voting related matters handled by the regular shareholders’ meeting. 12. Approved the 2020 director reelection handled by the regular shareholders’ meeting. 13. Approved the nomination of candidates for the company’s 2020 independent directors. 14. Approved the lifting of the non-compete restrictions on the newly elected directors and their representatives. 15. Approved the proposed date, venue, and content of the 2020 regular shareholders’ meeting. 16. Approved the appointment of Mr. PENG, CHUN-YEN, Assistant Vice President, as the corporate governance officer. 17. Approved retroactively the dismissal of the company’s manager.
2020.05.12	1. Ratified the company’s 2020 Q1 financial statements. 2. Approved the company’s disposal of real estate (15 land lots and ground constructions at No. 620, Dinghu Section, Guishan District, Taoyuan City) and entrusting professional consultants to sell at the reserve price.
2020.06.12	1. Approved the election of chairman and vice chairman. 2. Approved the employment of the company’s President. 3. Approved the 3 members of the “Audit Committee” elected lawfully. 4. Approved the 3 members of the“Remuneration Committee”elected lawfully.
2020.07.14	1. Approved the company’s 2019 remuneration to directors. 2. Approved the company’s disposal of real estate (15 land lots and ground constructions at No. 620, Dinghu Section, Guishan District, Taoyuan City). 3. Approved having the board of directors agreed to authorize the institutional chairman, Chen Mao-Bang Industry and Commerce Development Foundation, to designate Mr. CHEN, SHENG-TIEN as the representative of the company to sign relevant contracts and supplementary agreements with financial institutions.
2020.08.11	1. Ratified the company’s 2020 interim financial statements. 2. Approved the 2020 salary adjustment for the company’s managers.
2020.11.10	1. Ratified the company’s 2020 Q1-Q3 financial statements. 2. Approved the independence and competence evaluation of the independent auditors appointed by the company in 2020. 3. Approved the remuneration of the company’s independent auditors in 2020. 4. Approved the company’s 2021 audit plan
2021.01.25	1. Approved the company’s 2021 business operation plan. 2. Approved the 2020 bonus distribution plan for the company’s managers.

43 -

Date	Major resolutions
	3. Approved the 2021 transfer of treasury stock to the company’s managers. 4. Approved the amendments to the company’s Remuneration Committee Charter. 5. Approved cooperating with the replacement of independent auditors inside the accounting firms and assessing their independence and competency. 6. Approved the amendments to the company’s “Articles of Incorporation.” 7. Approved the amendments to the company’s “Corporate Governance Best- Practice Principles.” 8. Approved the amendments to the company’s “Audit Committee Charter.” 9. Approved the enactment of the company’s “Rules Governing the Scope of Powers of Independent Directors.” 10. Approved the amendments to the company’s “Rules of Procedure for Board of directors’ meetings.” 11. Approved the enactment of the company’s “Procedures for Election of Directors.” 12. Approved the enactment of the company’s “Self-Evaluation or Peer Evaluation of the Board of Directors.” 13. Approved the amendments to the company’s “Rules of Procedures for Shareholders’ meetings.” 14. Approved the additional construction of the warehouse building of Sampo Tainan Plant, the 2ndphase project (1F-3F) with steel structure. 15. Approved retroactively the capital increase for NT$200 million in cash for the operation needs of the company’s subsidiary, Debao Home Appliances Co, Ltd.
2021.03.24	1. Approved the company’s 2020 remuneration to employees and directors. 2. Ratified the company’s 2020 financial statements. 3. Approved the company’s 2020 earnings distribution proposal. 4. Approved the company’s 2020 internal control system declaration. 5. Approved the 2020 unappropriated earnings subject to the “substantive investment subject to unappropriated earnings reduction” proposal as stated in Article 23-3 of the “Statute for Industrial Innovation.” 6. Approved the amendments to the company’s “Articles of Incorporation.” 7. Approved having the shareholders’ proposing rights and electronic voting related matters handled by the regular shareholders’ meeting. 8. Approved the proposed date, venue, and content of the 2021 regular shareholders’ meeting. 9. Approved the construction of the corporate headquarters at No. 19, Dinghu Road, Guishan District, Taoyuan City. 10. Approved the adjustment of the steel structure budget of the 2ndphase project (1F- 3F) of the warehouse building of Sampo Tainan Plant. 11. Approved retroactively the adjustment of remuneration to the company’s managers.

Date

Major resolutions

3. Approved the 2021 transfer of treasury stock to the company’s managers.
4. Approved the amendments to the company’s Remuneration Committee Charter.
5. Approved cooperating with the replacement of independent auditors inside the
accounting firms and assessing their independence and competency.
6. Approved the amendments to the company’s “Articles of Incorporation.”
7. Approved the amendments to the company’s “Corporate Governance Best-
Practice Principles.”
8. Approved the amendments to the company’s “Audit Committee Charter.”
9. Approved the enactment of the company’s “Rules Governing the Scope of Powers
of Independent Directors.”
10. Approved the amendments to the company’s “Rules of Procedure for Board of
directors’ meetings.”
11. Approved the enactment of the company’s “Procedures for Election of Directors.”
12. Approved the enactment of the company’s “Self-Evaluation or Peer Evaluation of
the Board of Directors.”
13. Approved the amendments to the company’s “Rules of Procedures for
Shareholders’ meetings.”
14. Approved the additional construction of the warehouse building of Sampo Tainan
Plant, the 2ndphase project (1F-3F) with steel structure.
15. Approved retroactively the capital increase for NT$200 million in cash for the
operation needs of the company’s subsidiary, Debao Home Appliances Co, Ltd.

2021.03.24

1. Approved the company’s 2020 remuneration to employees and directors.
2. Ratified the company’s 2020 financial statements.
3. Approved the company’s 2020 earnings distribution proposal.
4. Approved the company’s 2020 internal control system declaration.
5. Approved the 2020 unappropriated earnings subject to the “substantive investment
subject to unappropriated earnings reduction” proposal as stated in Article 23-3 of
the “Statute for Industrial Innovation.”
6. Approved the amendments to the company’s “Articles of Incorporation.”
7. Approved having the shareholders’ proposing rights and electronic voting related
matters handled by the regular shareholders’ meeting.
8. Approved the proposed date, venue, and content of the 2021 regular shareholders’
meeting.
9. Approved the construction of the corporate headquarters at No. 19, Dinghu Road,
Guishan District, Taoyuan City.
10. Approved the adjustment of the steel structure budget of the 2ndphase project (1F-
3F) of the warehouse building of Sampo Tainan Plant.
11. Approved retroactively the adjustment of remuneration to the company’s
managers.

(XII) In the most recent year and as of the annual report publication date, directors or supervisors who have different opinions on important resolutions passed by the board of directors with records or written statements filed: None

(XIII) Summary of the resignation and dismissal of the company’s chairman, President, accounting officer, financial officer, internal audit officer, corporate governance officer, and R&D officer in the most recent year and as of the annual report publication date: None

44 -

Corporate governance

V. Independent auditor’s fee

Unit: NT$ Thousand

									Unit: NT$Thousand
Name of CPA firm	Name of CPA	Auditing fee		Non-auditing fee				CPA audit period	Remarks
			System design	Industrial and commercial registration	Human resource	Others (Note 2)	Subtotal
Deloitte & Touche	Yu, Su- Huan	5,600				467	467	2020.01 – 2020.12	Non-audit service: financial asset appraisal, annual report review, business tax direct deduction method review, non-executive supervisor salary inspection, and special law report on remittance inward funds
	Lin, Yi- Hui

(I) If the non-audit fees paid to the independent auditors, the CPA Firm to which the independent auditors belong, and its affiliates are more than one-fourth of the audit fees, the amount of audit and non-audit fees and the content of non-audit services should be disclosed: Already disclosed in the above table
(II) If there is a change of Accounting Firm and the audit fee paid in the changing year is less than what was paid the year before, the amount, proportion, and reason for the reduction of audit fee shall be disclosed: None
(III) If the audit fee is decreased by more than 10% compared with the audit fee paid in previous year, the amount, proportion, and reason for the reduction of audit fee shall be disclosed: None
None
45 -

VI. Change of CPAs:

(I) Former CPA

(I) Former CPA
Date of replacement	January25,2021
Reason for replacement and note	Due to the internal adjustment needs of Deloitte & Touche, the independent auditors were changed from CPA Su, Yu-Shiou and CPA Lin,Yi-Huito CPA Yu, Su-Huanand CPA Lin,Yi-Hui.
Termination or appointment rejection by the appointer or CPAs	Interested party Condition			Certified Public Accountant	Appointer
	Active termination			Not applicable.	Not applicable.
	Appointment/reappointment rejection			Not applicable.	Not applicable.
Opinions in and reason for audit reports issued other than unqualified opinion in the last two years	None
Disagreement with the issuer (Yes/No)	Yes		Accounting principles or practices
			Disclosure of financial statements
			Audit scope or procedure
			Others

	None	V
	Notes Not applicable.
Other disclosures (Matters to be disclosed as set out in Sub-clause 10.6.1.4 through 10.6.1.7 of these Regulations)	None

(II) New CPAs:

(II) New CPAs:
Name ofCPA firm	Deloitte &Touche
Name of CPA	Yu, Su-Huan and Lin, Yi-Hui
Date ofappointment	January25,2021
Consultancy and result before appointment concerning the accounting practices or principles for specific transactions and the opinions possibly offered on financial statements	None
New CPA’s written opinion on the matters on which the former CPA had different opinions	None

(III) Former independent auditor’s replies relating to Item 1 and 2-3, Subparagraph 6, Article 10 of the “Regulations:” Not applicable

46 -

VII. The company’s chairman, President, or any manager involved in financial or accounting affairs being employed by the CPA Firm or any of its affiliates within the year: None

VIII. Shareholding transfers and share collateralization within the latest year, up till the publication date of this annual report, initiated by directors, supervisors, managers and shareholders with more than 10% ownership interest:

(I) Change in equity

		2020	2020	As of April 17 of theyear	As of April 17 of theyear
			Mortgaged		Mortgaged
		Shareholding		Shareholding
			shares		shares
Title	Name
			Share		Share
		Share increase		Share increase
			increase		increase
		(decrease)		(decrease)
			(decrease)		(decrease)

	Chen Mao-Bang Industry and
Chairman	Commerce Development	0	0	0	0
	Foundation
Vice Chairman	Chen, Sheng-Chuan	(1,769,000)	0	0	0
	Chen Zhang Xiu Ju Culture and
Director		0	0	0	0
	Education Foundation

Director	Chen, Sheng-Wei	0	0	0	0
Independent
	Chian, Chen-Rong	0	0	0	0
Director

Independent
	Lou, Yung-Chien	0	0	0	0
Director

Independent
	Huang, Chiu-Yung	0	0	0	0
Director

President	HSU, CHING-CHAO	110,000	0	180,000	0
Vice President	YANG, CHENG-MIN	70,000	0	0	0
Corporate
Governance
Officer, Vice	PENG, CHUN-YEN	80,000	0	100,000	0
President, and
FinancialOfficer
Vice President	CHEN,YE-KWAN	34,000		140,000
Assistant Vice
	LUO, WEI-HSU	80,000	0	0	0
President

Assistant Vice
President and
	CHIANG, CHUAN-TIEN	50,000	0	70,000	0
Accounting

Officer
Assistant Vice
	Chang, Chiao-Wei	0	0	0	0
President

Note 1: Handled the transfer of treasury stocks to employees in February 2020 and February 2021. Note 2: LUO, WEI-HSU stepped down from the position of Assistant Vice President in February 2020, and YANG, CHENG-MIN stepped down from the position of Vice President in July 2020.

Note 3: PENG, CHUN-YEN was promoted to the position of Vice President, CHEN, YE-KWAN was promoted to the position of Vice President, and CHIANG, CHUAN-TIEN was promoted to the position of Assistant Vice President in March 2021.

Note 4: Chang, Chiao-Wei was promoted to the position of Assistant Vice President in April 2021.

47 -

(II) Shares transfer information: None (III) Shares mortgaged information: None

48 -

Corporate governance

IX. Information on the top ten shareholders in shareholding ratio and are related parties or with a relationship of being a spouse or a relative within the 2[nd] degree of kinship:

	April 17,2021	April 17,2021	April 17,2021	April 17,2021	April 17,2021	April 17,2021	April 17,2021	April 17,2021	April 17,2021
Name	Own shareholdings		Shareholding by spouse or dependents		Shareholding in the name of a third party		For the top ten shareholders in shareholding ratio who are related parties or with a relationship of being a spouse or a relative within the 2nddegree of kinship as defined in Financial Accounting Standards Board No. 6, please state the tile or name andrelationship.		Remarks
	Shares	Shareholding percentage	Shares	Shareholding percentage	Shares	Shareholding percentage	Name	Relation
MACLADY INVESTMENT LTD.	32,545,800	8.41%	－	－	－	－	None	None
(Representative: WEI, CHIN-YI)	0	0%	0	0%	0	0%	None	None
FUDY INVESTMENT CO.,LTD.	18,000,000	4.65%	－	－	－	－	None	None
(Representative:YEN, CHENG-HSIUNG)	19,168	0.01%	0	0%	0	0%	None	None
STEFFILI INVESTMENT CO.,LTD.	17,818,000	4.60%	－	－	－	－	None	None
(Representative: WENG, CHIA-SHENG)	325,033	0.08%	0	0%	0	0	None	None
QUANBAO INVESTMENT CO.,LTD.	10,049,830	2.60%	－	－	－	－	None	None
(Representative: PENG, CHUN-YEN)	180,527	0.05%	354	0%	0	0	None	None
Chen, Sheng Wei	8,122,698	2.10%	0	0%	0	0%	None	None
Chen, Sheng Chuan	7,000,932	1.81%	0	0%	0	0%	None	None
MONTEREY DEVELOPMENT CO.,LTD.	6,230,000	1.61%	－	－	－	－	None	None
(Representative: CHEN, YI-HSIU)	0	0%	1,600,000	0.41%	0	0%	None	None
CITI (TAIWAN) COMMERCIAL BANK IS ENTRUSTED WITH THE CUSTODY OF THE INVESTMENT ACCOUNT OF THE NORWEGIAN CENTRAL BANK	5,761,409	1.49%	－	－	－	－	None	None
EMPLOYEE JOINT WELFARE COMMITTEE OFSAMPO CORPORATION	4,578,628	1.18%	－	－	－	－	None	None
(Representative: HSU, CHING-CHAO)	474,000	0.12%	0	0%	0	0%
JPMORGAN CHASE BANK N.A., TAIPEI BRANCH IN CUSTODY FOR VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND, A SERIES OF VANGUARD STAR FUNDS	4,557,800	1.18%	－	－	－	－	None	None

49 -

X. Investments jointly held by the company, the company’s directors, supervisors, managers, and enterprises directly or indirectly controlled by the company, with shareholding disclosed in aggregate of the said parties:

December 31, 2020 Unit: Shares

					December 31, 2020 Unit: Shares	December 31, 2020 Unit: Shares
Investee	Investment of the company		Investment of the directors,		Comprehensive investment
			supervisors, managers and
			business under direct or
			indirect control
	Shares	Shareholding ratio		Shareholding	Shareholding	Shareholding ratio
			Shareholding
				ratio

SAMPO INTERNATIONAL					1,000,000	100.00%
	1,000,000	100.00%	-	0.00%
TRADE& INVESTMENT Co., Ltd

QUANBAO INVESTMENT CO.,					114,325,000
	114,325,000	100.00%	-	0.00%		100.00%
LTD.

DEBAO HOME APPLIANCE CO.,					20,000,010
	20,000,010	100.00%	-	0.00%		100.00%
LTD.

SAMPO HOME INC.	50,000,000	100.00%	-	0.00%	50,000,000	100.00%
AMIGO LOGISTICS					31,599,629
	21,154,865	48.76%	10,444,764	24.07%		72.83%
CORPORATION

RECHI PRECISION CO., LTD.	135,610,160	26.86%	4,268,976	0.85%	139,879,136	27.70%
NELONG ENTERPRISE					3,660,000
	-	0.00%	3,660,000	61.00%		61.00%
CORPORATION LTD.

SAMPO JAPAN INC.	3,000	100.00%	-	0.00%	3,000	100.00%
Sampo International Food Service Co.,					10,000,000
	-	0.00%	10,000,000	100.00%		100.00%
Ltd.

DONGGUAN SAMPO ELECTRONICS CO.,LTD.					1,400,000
	-	0.00%	1,400,000	70.00%		70.00%

NISSIN GLOBAL LOGISTICS(TAIWAN) CO., LTD.					2,550,000
	-	0.00%	2,550,000	51.00%		51.00%

AMIGOHOME LIFECO.,LTD.	-	0.00%	2,100,000	100.00%	2,100,000	100.00%
SAMPO ASSET MANAGEMENT CO.,LTD.					1,000,000
	-	0.00%	1,000,000	100.00%		100.00%

Capital Overview

Four Capital Overview

I. Capital & Shares

(I) Sources of capital:

As of April 17, 2021

Unit: NT$ thousand/thousand shares

						As of April 17, 2021 Unit: NT$thousand/thousand shares	As of April 17, 2021 Unit: NT$thousand/thousand shares	As of April 17, 2021 Unit: NT$thousand/thousand shares
Month/Year	Issue Price	Authorized Capital		Paid-inCapital		Note
		Number of Shares	Amount	Number of Shares	Amount	Sources of Share Capital	Capital Increased by Assets Other than Cash	Others
2002.04	10	1,300,000	13,000,000	1,107,885.9	11,078,859	⚫ Handle of treasury stock of NT$868,390 thousand for the reduction in capital	None	-
2002.05	10	1,300,000	13,000,000	1,028,885.9	10,288,859	⚫ Handle of treasury stock of NT$790,000 thousand for the reduction in capital	None	-
2002.11	10	1,300,000	13,000,000	1,020,381.9	10,203,819	⚫ Handle of treasury stock of NT$85,040 thousand for the reduction in capital	None	-
2003.11	10	1,400,000	14,000,000	1,270,381.9	12,703,819	⚫ Issuance of overseas depositary receipts in cash and capital increase of NT$250,000,000 thousand ⚫ The official document No. 0920153978 issued bythe FSC	None	-
2004.08	10	1,500,000	15,000,000	1,340,000	13,400,000	⚫ Capital increase of NT$ 442,104.62 thousand by retained earnings (Including employee bonus 60,990.05 thousand) ⚫ Capital increase of NT$254,076.38 thousand from capital reserve ⚫ The official document No. 0930126400 issued bythe FSC	None	-
2004.11	10	1,500,000	15,000,000	1,310,000	13,100,000	⚫ Handle of treasury stock of NT$300,000 thousand for the reduction in capital	None	-
2006.08	10	1,500,000	15,000,000	876,390	8,763,900	⚫ Handle capital reduction of NT$ 4,336,100 thousand ⚫ The official document No. 0950129753 issued bythe FSC	None	-
2010.07	10	1,500,000	15,000,000	600,000	6,000,000	⚫ Handle capital reduction of NT$2,763,900 thousand ⚫ The official document No. 0990037548 issued bythe FSC	None	-
2011.01	10	1,500,000	15,000,000	591,473	5,914,731	⚫ Handle merger and capital reduction of NT$ 85,269.29 thousand ⚫ The official document No. 10001006950 issued bythe MOEA	None	-
2012.10	10	1,500,000	15,000,000	584,100	5,841,000	⚫ Handle of treasury stock of NT$73,731 thousand for the reduction in capital	None	-
2013.02	10	1,500,000	15,000,000	564,100	5,641,000	⚫ Handle of treasury stock of NT$200,000 thousand for the reduction in capital	None	-
2014.02	10	1,500,000	15,000,000	544,100	5,441,000	⚫ Handle of treasury stock of NT$200,000 thousand for the reduction in capital	None	-
2014.10	10	1,500,000	15,000,000	533,000	5,330,000	⚫ Handle of treasury stock of NT$111,000 thousand for the reduction in capital	None	-
2014.12	10	1,500,000	15,000,000	525,000	5,250,000	⚫ Handle of treasury stock of NT$80,000 thousand for the reduction in capital	None	-
2016.08	10	1,500,000	15,000,000	505,000	5,050,000	⚫ Handle of treasury stock of NT$200,000 thousand for the reduction in capital	None	-
2016.11	10	1,500,000	15,000,000	499,000	4,990,000	⚫ Handle of treasury stock of NT$60,000 thousand for the reduction in capital	None	-
2018.10	10	1,500,000	15,000,000	484,000	4,840,000	⚫ Handle of treasury stock of NT$150,000 thousand for the reduction in capital	None	-
2018.12	10	1,500,000	15,000,000	387,200	3,872,000	⚫ Handle of treasury stock of NT$968,000 thousand for the reduction in capital ⚫ The official document No. 1070332720 issued bythe FSC	None	-

Unit: Shares

Type of Shares	Authorized Capital Outstanding Shares (Note) Unissued shares Total	Authorized Capital Outstanding Shares (Note) Unissued shares Total	Authorized Capital Outstanding Shares (Note) Unissued shares Total	Remark
		Unissued shares	Total
Common stock	387,200,000	1,112,800,000	1,500,000,000	Listed Stock

Information for Shelf Registration: Not applicable.

(II) Shareholder Structure:

(II) Shareholder Structure:	(II) Shareholder Structure:	(II) Shareholder Structure:
			As of April 17,2021
Shareholder Structure Number of Shares	Government agencies	Financial institutions	Other Legal Persons	Individual	Foreign institutions and foreigners	Total
Number of shareholders	2	7	203	90,604	172	90,988
Shareholding (Shares)	2,101	135,180	126,357,392	213,020,266	47,685,061	387,200,000
Shareholding Ratio(%)	0.00%	0.03%	32.64%	55.01%	12.32%	100.00%

(III) Distribution Profile of Share Ownership:

(Par value of NT$10 per share)

(III) Distribution Profile of Share Ownership: (Par value of NT$10 per share)	(III) Distribution Profile of Share Ownership: (Par value of NT$10 per share)	(III) Distribution Profile of Share Ownership: (Par value of NT$10 per share)	(III) Distribution Profile of Share Ownership: (Par value of NT$10 per share)
As of April 17, 2021 Class of Shareholding (Unit: Share) Number of Shareholders Shareholding (Shares) Percentage 1 ~ 999 66,218 10,681,401 2.76% 1,000 ~ 5,000 19,390 38,755,375 10.01% 5,001 ~ 10,000 2,713 20,442,387 5.28% 10,001 ~ 15,000 759 9,423,244 2.43% 15,001 ~ 20,000 559 10,071,517 2.60% 20,001 ~ 30,000 426 10,777,226 2.78% 30,001 ~ 40,000 231 8,266,920 2.14% 40,001 ~ 50,000 130 6,033,865 1.56% 50,001 ~ 100,000 274 19,383,609 5.01% 100,001 ~ 200,000 121 16,618,516 4.29% 200,001 ~ 400,000 78 22,242,791 5.74% 400,001 ~ 600,000 21 10,368,280 2.68% 600,001 ~ 800,000 16 10,591,057 2.74% 800,001 ~ 1,000,000 10 8,904,268 2.30% 1,000,001 or more 42 184,639,544 47.68% Total 90,988 387,200,000 100.00%
Class of Shareholding (Unit: Share)	Number of Shareholders	Shareholding (Shares)	Percentage
1 ~ 999	66,218	10,681,401	2.76%
1,000 ~ 5,000	19,390	38,755,375	10.01%
5,001 ~ 10,000	2,713	20,442,387	5.28%
10,001 ~ 15,000	759	9,423,244	2.43%
15,001 ~ 20,000	559	10,071,517	2.60%
20,001 ~ 30,000	426	10,777,226	2.78%
30,001 ~ 40,000	231	8,266,920	2.14%
40,001 ~ 50,000	130	6,033,865	1.56%
50,001 ~ 100,000	274	19,383,609	5.01%
100,001 ~ 200,000	121	16,618,516	4.29%
200,001 ~ 400,000	78	22,242,791	5.74%
400,001 ~ 600,000	21	10,368,280	2.68%
600,001 ~ 800,000	16	10,591,057	2.74%
800,001 ~ 1,000,000	10	8,904,268	2.30%
1,000,001 or more	42	184,639,544	47.68%
Total	90,988	387,200,000	100.00%

Note: The company has not issued preferred stock.

Capital Overview

(IV) List of Major Shareholders:

(IV) List of Major Shareholders:	(IV) List of Major Shareholders:	(IV) List of Major Shareholders:	(IV) List of Major Shareholders:	(IV) List of Major Shareholders:
					As of April 17,2021
Shares Name of Major Shareholders					Shareholding (Shares)		Shareholding Ratio (%)
MACLADY INVESTMENT LTD.					32,545,800		8.41%
FUDY INVESTMENT CO., LTD.					18,000,000		4.65%
Steffili Investment Co., Ltd.					17,818,000		4.60%
QUANBAO INVESTMENT CO., LTD.					10,049,830		2.60%
Chen, Sheng-Wei					8,122,698		2.10%
Chen, Sheng-Chuan					7,000,932		1.81%
MONTEREY DEVELOPMENTCO.,LTD.					6,230,000		1.61%
Special Account for Investment of the Central Bank of Norway incustody ofCitibank(Taiwan)					5,761,409		1.49%
EMPLOYEE JOINT WELFARE COMMITTEE OF SAMPO CORPORATION					4,578,628		1.18%
JPMORGAN CHASE BANK N.A., TAIPEI BRANCH IN CUSTODY FOR VANGUARD TOTAL INTERNATIONAL STOCK INDEX FUND, A SERIES OF VANGUARD STAR FUNDS					4,557,800		1.18%
(V)	Market Price, Book Value, Earnings, and Dividends in Past 2 Years: Market Price,Book Value,Earnings,and Dividends
Item	Year		2020	2019		As of April 30, 2021（Note 8）
Market price per share (Note1)	Highest		27.15	20.85		32.70
	Lowest		15.70	13.45		25.10
	Average		21.68	17.47		29.13
Net value per share (Note 2)	Before distribution		20.99	17.58		17.37
	After distribution		-	16.03		-
Earnings per share	Weighted Average Shares (thousand shares)		369,885	368,802		371,235

	Earningsper share(Note 3)		4.86	2.00		0.5
Dividends per share	Cash dividend		2.5	1.5		-
	Stock dividends	Dividends from retained	-	-
		earnings
		Dividend for paid-in	-	-
		capital
	Accumulated Undistributed Dividends (Note4)		-	-		-
Return on Investments	Price/Earnings Ratio(Note5)		4.46	8.74		58.26
	Price/Dividend Ratio(Note6)		8.67	11.65		-
	Cash dividend yield (Note7)		11.53%	8.59%		-

Where stock dividends were paid from earnings or capital reserves, the information on the market price and cash dividends adjusted retroactively according to the number of shares issued shall also be disclosed.

Note 1: List the highest and lowest share price in each year, and calculate the average market price by weighing transacted prices against transacted volumes.

Note 2: Please calculate based on the number of outstanding shares at year-end, and detail the amount of distribution resolved in next year's shareholders meeting.
Note 3: If stock dividends are issued, make retrospective adjustments while disclosing EPS before and after the adjustments.
Note 4: If equity securities are issued with terms that allow dividends to be accrued and accumulated until the the year the company makes profit, then the amount of cumulative undistributed dividends up till the current year must
53-

be disclosed separately.

Note 5. Price/Earnings Ratio = Average closing share price of the period/Earnings per share.

Note 6: Price/Dividend Ratio = Average closing share price of the period/Cash dividend per share. Note 7: Cash dividend yield = Cash dividend per share/average closing share price of the year.

Note 8: Net worth per share and earnings per share should be based on audited (auditor-reviewed) data as at the latest quarter before the publishing date of this annual report. For all other fields, data should be provided as at the end of their respective years.

(VI) Company’s dividend policy and execution status:

1. Dividend Policy:

The net income, if any, shall be applied to make up for the accumulated losses, and appropriate 10% legal reserve. However, the appropriation of legal reserve should be ceased when it is equivalent to the company’s paid-in capital. The special reserve shall be appropriated or reversed according to the law and regulations. For the balance amount, if any, and the cumulative unappropriated earnings (including adjustment to the unappropriated amount), the board of directors shall draft an earnings distribution proposal to be resolved in the shareholders’ meeting for the distribution of dividends and bonuses to shareholder.

The company’s dividend policy takes into consideration the current and future development plan, investment environment, funding requirement and domestic and overseas competition. It also takes into consideration factors such as shareholder interest. Shareholder dividend and bonus may be paid in cash or by stock. Cash dividend shall represent at least 10% of total dividend amount.

The current distribution of dividends proposed by the shareholders’ meeting:
The board of directors approved the 2020 earnings distribution proposal lawfully with NT$2.5 per share in cash proposed and it is reported to the shareholders’ meeting for discussion and resolution.

(VII) Impacts of proposed stock dividends on the company’s business performance and earnings per share (EPS): Not applicable

Capital Overview

(VIII) Remuneration to employees and directors

The percentage or range of remuneration to employees and directors stated in the company’s Articles of Incorporation: According to the company’s current Articles of Incorporation, the company shall appropriate not less than 1% of the earnings (net income before tax and before deducting remuneration to employees and directors), if any, as remuneration to employees and not more than 3% of the earnings as remuneration to directors. Appropriate for covering carryforward loss, if applicable, followed by the remuneration to employees and remuneration to Directors as mentioned.

Employee remuneration under the previous paragraph may be paid by stock or in cash and the targets include employees of subsidiaries meeting certain conditions. Directors’ remuneration under the preceding section may only be paid in cash.

Employee and director remuneration distribution proposals shall be resolved by the board of directors and reported to the shareholders’ meeting.

Basis for the estimation of the remuneration to employees and directors in the current period, basis for the calculation of stock shares distributed to employees as remuneration, and accounting treatment for the difference between the actual distribution amount paid and the estimated amount:

The company’s shareholders’ meeting resolved to distribute remuneration to employees at an amount of NT$15,649,299 and remuneration to directors at an amount of NT$7,824,650 on June 12, 2020. The company had estimated and appropriated 2.2% of the earnings as remuneration to employees at an amount of NT$45,577,410 and 0.8% of the earnings as remuneration to directors at an amount of NT$16,573,604 in 2020. If there is a discrepancy between the actual amount resolved in the shareholders’ meeting and the estimated amount, it will be recognized as profit and loss in the year the resolutions reached by the shareholders’ meeting.

Employee remuneration resolved by the Board of Directors:
a. Pay remuneration to employees in the form of cash and stock dividend, and remuneration to directors. If it is different from the amount estimated in the year expense incurred, the amount of difference, causes, and treatment should be disclosed: The board of directors approved the proposed distribution of remuneration to employees of NT$45,577,410 and remuneration to directors of NT$16,573,604 on March 24, 2021, which is identical to the estimated amount in the year expense incurred.
b. The proposed distribution of stock dividend to employees and its proportion to the net income and total remuneration to employees in current period: Not applicable
c. The computed earnings per share after considering the proposed distribution of remuneration to employees and directors: Since there is no difference between the proposed distribution amount and the estimated amount, the computed earnings per share is NT$2.5/share after tax.
Distribution of remuneration to employees and directors with the retained earnings from the previous year:

The remuneration to employees of NT$15,649,299 and remuneration to directors of NT$7,824,650 in current year from the earnings of 2019 is identical to the estimated amount booked in the 2019 financial statements.

(IX) Share Repurchases by the Company:

Share Repurchases by the Company (Repurchases already completed)

hare Repurchases by the Company: . Share Repurchases by the Company (Repurchases already completed)	hare Repurchases by the Company: . Share Repurchases by the Company (Repurchases already completed)
As of April 17,2021 Treasury stocks: Batch Order 16th Batch Purpose of buy-back Transfershares to employees Timeframe of buy-back 2017/08/11 ~ 2017/10/06 Price range NT$14~16 Class, quantityof shares repurchased Common stock`／`11,000 thousand shares Value of shares repurchased (in NT$ thousands) NT$162,641thousand Quantity of repurchased shares as a percentage of total shares to be repurchased (%) 55% Shares sold/transferred 6,100 thousand shares Accumulated number of company shares held 4,900 thousand shares Percentage of total companyshares held(%) 1.27%
Treasury stocks: Batch Order	16th Batch
Purpose of buy-back	Transfershares to employees
Timeframe of buy-back	2017/08/11 ~ 2017/10/06
Price range	NT$14~16
Class, quantityof shares repurchased	Common stock`／`11,000 thousand shares
Value of shares repurchased (in NT$ thousands)	NT$162,641thousand
Quantity of repurchased shares as a percentage of total shares to be repurchased (%)	55%
Shares sold/transferred	6,100 thousand shares
Accumulated number of company shares held	4,900 thousand shares
Percentage of total companyshares held(%)	1.27%

Share Repurchases by the Company (Any repurchase still in progress): None.

II. Issuance of Corporate Bonds: None.

III. Issuance of Preferred Stock: None.

IV. Issuance of Global Depository Receipts:

Issue date Item	Issue date Item	Issue date Item	November 21, 2003
Issuance and listing			Luxembourg
Total amount			US$104,375,000
Unit issuing price			US$8.35
Units issued			12,500,000 units
Source of negotiable securities			The company increases capital by 250,000,000 shares in cash
Amount of negotiable securities			250,000,000 common shares of SAMPO CORPORATION
Rights and obligations of GDR holders			Except as otherwise provided in the depository agreement, the same as those of common share holders
Trustee			None
Depository bank			The Bank of New York
Custodian bank			The Hongkong and Shanghai Banking Corporation Limited
Outstanding balance			43 units
Treatment of expenses incurred at issuance and thereafter			Issue cost: as a deduction for the stock premium issuance. Expenses incurred after issuance: amortized by the issuing company.
Important conventions about depository and escrow agreement			Please see the Depository Agreement and the Escrow Agreement description for details
Market price per unit	2020 years (Note 1)	Highest	N/A
		Lowest	N/A
		Average	N/A

Note 1. The GDR program has been terminated on July 15, 2020

Capital Overview

V. Employee Stock Warrant and New Shares to Employees with Restricted Rights: None.
VI. Issuance of New Shares in Connection with the Merger or Acquisition of Other Companies: None.

VII. Financing Plans and Implementation: None.

Five. Operational Overview

I. Business Contents

(I) Business scope

1. Major businesses and existing commodities:

Type	Business scope	Products
Electronic products	1. R&D and make products described on the right hand side 2. Sell SAMPO branded commodities in domestic and global markets 3. Provide customers with OEM/ODMproducts	LED displays (Hongtianlei premium audio quality/multimedia displays, video conference displays, monitors, cash register system displays, car-mounted displays), security cameras (with recording features), network cameras, smart networking modules, IoT smart homes controller, digital signage, electronic whiteboard, and other digitalperipheralproducts.
Home appliances	1. R&D and make products described on the right hand side 2. Sell SAMPO branded commodities in domestic and global markets 3. Provide customers with OEM/ODMproducts	Refrigerators, freezers, cold storages, wine cabinets, washing machines, drum washing machines, dryers, air conditioners (window, package, split, vertical, multi-unit type), dehumidifier, microwave oven (residential, commercial), plastic parts for refrigerators, plastic plates, other plastic products, health products and varioushousehold appliances.

2. Share of business:

. Share of business:
Item	2020
Electronic/home appliance division	90.49%
Transportation division	9.51%
Total	100%

3. New products in development program:

Product type

New products in development program

Multimedia related
products

SAMPO smart home management system: smart home appliances,
IoT control system
AI smart commodities: AI voice-control smart TV, voice assistant
Smart sensor: environment status sensors and wireless transmission
devices
LED AV technology: quantum dot/ultra-high color gamut display,
dual Dolby decoding
Webcam: security camera with two-way AV recording
TV wall for ads: outdoor full-color LED display, panels with ultra-
thin bezel
Imaging technology: UHD image processing technology, HDR,
WCG, MEMC
Touch display, 15”/ 15.6”/ 21.5”/32”
Multi-touch display 50”/ 55”/ 65” large metal case
Industrial standard LED display, 50”/ 55”/ 65”
Digital signage (advertising machine/TV wall), floor-standing
advertising machine
65”/75”/86” electronic whiteboard for teaching,
2x20/APA ECR’s customer display, 18.5" dual display
Car onboard display, 27”/ 46”-65”multi-touch display for vessels

Air conditioner

1. Models of vary frequency, single-split, PICOPURE R32
refrigerant, and new looks
2. Models of multi-split,small multi-split VRV

Operational Overview

	Operational Overview
Product type	New products in development program
	3. PICOPURE series full heat exchanger providing comfortable and cleanenvironment
Refrigerator	1. Models of vary frequency, 610L capacity, 2-door/3-door, grade 1 energy efficiency, and new looks 2. Models of vary frequency, 610L capacity, 3-door, grade 1 energy efficiency, and new looks with glass enclosure 3. Models of vary frequency, 480L capacity, 3-door, grade 1 energy efficiency, and new looks with glass enclosure 4. Models of vary frequency, 250L capacity, 2-door, grade 1 energy efficiency, and new looks
Freezer	1. Models of fixed frequency, 216L capacity, air-cooling, frost-free 2. Models of fixed frequency, 445L capacity, air-cooling, frost-free
Washing machine	1. Models of large-capacity picopure ultra-thin body, single-slot, vary frequency, brand new control panel, flat top cover, and new looks with different colors 2. Models of large-capacity ultra-thin body, single-slot, vary frequency, brand new control panel, flat top cover, and new looks with different colors 3. Models of large-capacity, single-slot, fixed frequency, brand new flat top cover, and new looks with different colors
Household appliances	1. Dehumidifier of SAMPO brand, grade 1 energy-saving, 16/20L large capacity 2. Dehumidifier of SAMPO/SYNCO brand, grade 1 energy-saving, 8/10L capacity, and new looks 3. Dehumidifier of SYNCO brand, grade 1 energy-saving, 6L capacity,and new looks forpettybourgeoisie

(II) Industry overview

Industry status now and development in future:
(1) Electronic products

Amid soaring demands for displays with resolution rising from 2K to 4K, market share of the latter is expected to jump to 70% thanks to steadily advancing production technology. The markets of displays are set to trend into larger size and better definition. In addition, the COVID-19 pandemic is driving more people to adopt home entertainment by watching videos online with TV and remote work by networking computers. All these are boosting demands for display panels. Thanks to record breaking growth of global TV, the over demands for panels are driving costs of supply chains for panels, chips, and relevant materials in the second half of this year. Soaring prices of displays are set to come due to shortage in material inventory and containers. Forced to spend more time at home along with desire for better living conditions surely would lead to demands for smart home environment. Applications of AI technology and the IoT are set to keep on growing. The industry of smart life based on 5G speed communication is crowded by network and communication platform players and is to reshape the design and application of home appliances. Development of home appliances in the post-pandemic era should address the need of smart home, smart education, smart urban and rural and healthy life and target at healthy, clean, and smart home appliances.

(2) Home appliances
Slammed by COVID-19 pandemic everywhere around the world, manufacturing costs are boosted by sky rocketing maritime and material costs while the retailing prices remain sluggish due to fierce brand
59-

competition. The SAMPO is aimed to launch products with enhanced functions and price-competitiveness to raise the company's profitability and brand image.

Consumers are increasingly focusing on energy-saving and environmentalfriendly products including air conditioners, refrigerators, washing machines, dehumidifiers, and air purifiers. These household appliances must fully comply with the new energy-saving regulations set by the government.
Market demands for air purifiers are booming amid fast spreading COVID19 pandemic and expectation for a new standard to be released by the government in 2023. Following the market trend, the SAMPO is to continue developing models compliant with new standards and searching for and introducing new technology based air purifiers.
With increasingly less children born each year, more and more Taiwanese are raising dogs and cats instead. Addressing changing market demands, SAMPO is developing modular and inverter based mini air-conditioners to meet consumers’ personal or pet air-conditioning requirements， and to recreate SAMPO’ technology leadership with its exclusive PICOPURE water ion technology.
Addressing rising environmental awareness, SAMPO is adopting new environment friendly refrigerants in its home appliances to mitigate the global greenhouse effect. SAMPO is minimizing the use of environmentally hazardous substances like mercury to make the best friend with our planet, enhance brand image, and grow the company more quickly.
The relevance of the industry chain

Upstream Component supplier Panel manufacturer Electronic parts manufacturer Stamping parts manufacturer Injection molded parts manufacturer Compressor manufacturer Motor manufacturer Magnetron manufacturer Refrigerant supplier Foaming liquid supplier	Midstream Home appliance manufacturer Panel display manufacturer Digital set-top box manufacturer Air-conditioner manufacturer Refrigerator manufacturer Washing machine manufacturer Microwave oven manufacturer	Downstream Main customer groups OEM customers Traditional home appliance distributor 3C volume sales channel Warehousing channel E-commerce channel Government bids General consumers

Products’ trend of development and competitive profile:
(1) Electronic products

Watching soap opera on smart TV and viewing videos streamed online amid the trending economy of stay-at-home is boosting demands for displays (with the lion’s share goes to the household displays of larger size and 4K resolution) at the expense of fewer products differentiations. This mandates competition for market share of electronic goods in multiple directions.

Develop purchase preferences and increase the share of sales and production of displays of larger size and 4K resolution.
Smart TV focuses on features of enhanced compatibility with network AV platforms, users’ convenient installation and friendly operation interface, and provision of AI-based voice search and legitimate network AV services.
Build up cross-industry partnership to present premium AV contents and
60-

Operational Overview

expand channels with set-top boxes or karaoke machine centered promotion programs.

  4. Strengthen the team of commercial displays to provide dynamic and online contents editing software based on comprehensive logistic services and personalized training programs as well as professional and digital advertising machines, to continuously raise the share of advertising market. Extend the series of teaching tools (e.g. electronic whiteboards) and adapt to the development trend of smart home appliances to focus on R&D of new products targeting at convenient and smart family life. This is aimed to improve products quality and functions to penetrate the new markets dominated by leading Japanese and Korean manufacturers by making the most of the period of shrinking differentiation in display products. SAMPO will continue integrating the IoT cloud platform to keep pace with the fast changing era and facing the challenges in future.

(2) Home appliances
1. In spite of soaring costs of raw materials and maritime transportation, prices of end products remain sluggish thanks to fierce market competition. The focus now is to control costs and launch new products with price flexibility.
2. It is expected that the government is to release new energy consumption standard for refrigerators and air conditioners. This would drive the focus of competition and consumption toward grade 1 energy efficiency. Debut of full series of products with grade 1 energy efficiency could enhance the company's product image and market competitiveness.
3. It is now trending toward energy-saving (as well as power- and water-saving) and environment friendly consumption. Competing in the future markets of home appliances is nothing but raising their energy-saving and environment friendly standards and introducing more localized Japanese style high-end products.
4. Thanks to the impact of COVID-19 pandemic around the world, demands for antibacterial and antiviral products among others are booming. SAMPO is accelerating the introduction of Japanese-style air purifiers and create new business opportunities based on our own expertise in home appliances and abilities to search for new products compliant with Japanese specifications.
5. Air-conditioning products are flocking to adopt environment-friendly refrigerants. Addressing this trend, SAMPO is launching full range air conditioners featuring PICOPURE R32 refrigerant and grade 1 energyefficiency with the flagship models appealing for elaboration.
(III) Overview of technology and R&D

1. R&D expenses in latest years

Item/year	2020	2019	2021 (as of the date the annual report goes to press)
Operating revenues	7,670,020	7,116,009	2,792,331
R&D expenses	99,319	85,901	30,677
Share	1.29%	1.21%	1.10%

61-
Successful new technologies and commodities developed in recent years (as of the date the annual report goes to press for this year)

Product type	Technology describe
Display of 4K2K ultra- high resolution	“Chaoxuan light” image processing technology, Dolby Vision/Atmos AV decoding, dynamic backlight and micro zone light control, high-contrast imaging technology, MD Driver dynamic image optimization, quantum dots, KSF ultra-wide color gamut image quality processing, DVB-TV smart audio real-time adjustment, Google TV licensed smart display, USB 3.0 super high-speed AV transmission interface, smart energy-saving display
LED display	Programmable multimedia remotely scheduled playback, multi-screen interaction, ultra-thin bezel TV wall, advertising targeted display, touch display, cash register, super large-size electronic whiteboard for teaching. Multi-party instant video conference display.
Digital video conference system	Development of 24”/42”/50”/65”/75”/86” video conference system
IoT smart home system	TaiSEIA home appliance standard connection interface, smart air conditioner, smart sensor, handheld device APP, smart display with backend service system for cloud based information processing
Air conditioner	Development of new models with environment friendly R32 refrigerant, vary frequency, and CSPF grade1energy efficiency
Refrigerator	1. Successfully adopt the Nano-Ti Aurora antibacterial and deodorization technology in refrigerator products. 2. Development of new process technology for frameless glass door panels and refrigerators of new looks. 3. Environmental protection labeling standards compliance and development of technology for ROHS parts. 4. National grade 1 energy saving specification certified.
Washing machine	1. The technology of increasing the barrel and the development of a slim new appearance washing machine. 2. Development of new technology for dual filtration system of non-return flocculation box. 3. Technical development of parts that comply with environmental protection standards and RoHS specifications. 4. Development of new technologies for energy- saving and gold-level water-saving and cleaning.
Household appliances	1. Large capacity dehumidifier (20L) 2. Vary frequent micro air conditioner (air conditioner forpets)

Operational Overview

(IV) Long- and short-term business development plan

Short-term business development plan:
(1) Integrate SAMPO’s PC series vary frequent air conditioner with ARKDAN air purifier into IoT products to provide better consumer experience.
(2) Continue to provide energy-saving, environment-friendly, water-saving and MIT smile labeling home appliances to demonstrate the credibility of in-house developed products.
(3) Implement the SAP system to improve the management efficiency and integrate the company's core business processes and information. Optimize the development process and improve the total operation efficiency by big data analysis.
(4) Organize new product launch conferences and channel-aimed training programs, bridge market development and retailing, bring about products more adaptive to consumer needs.
(5) Provide better industry-school cooperation (Taipei City industry-in-school course) or corporate internship programs to strengthen the industry-school interaction, practice industry operation in school, and help the vocational students to get familiar with the industry ecology.
Long-term business development plan:
(1) Keep abreast of international and home appliance development trends, in line with emerging development models, brand to continue cultivating independent communities, and joint developing new products with consumers to launch products met consumer expectations.
(2) Amid consumers’ increasingly pursuing cost-effective products, SAMPO is proactively improve pre-sales, in-sales, and after-sales services, launch valueadded products, and ramp up quality service networks to meet consumer expectations and grow operating income.
(3) Integrate supplier management, product cost and other big data analysis to control supplier quality and procurement costs by making the most of the SAP system.

II. Market and Sales Overview

(I) Market analysis

Region of sales (provision) of major commodities (services)

Major products	Major sales region
Electronic products	Taiwan, America, Europe, Asia
Home appliances	Taiwan,Europe,Asia

Market share, status of supply and demand, and growth of markets in future
(1) Electronic products
- A. LED:

Values of display products are determined by consumers’ AV experiences. SAMPO has been the leader in sound processing technology. Plan and development of new products are Hongtianlei sound technology centered. The quantum dot ultra-high color gamut display launched last year has tied its counterparts made in Japan and South Korea and won consumer’ acceptance. It combines existing HDR highly dynamic image processing with auto image content detection for high-contrast imaging with dynamic backlight tuning and adopts the micro-zone light control technology for

much better imaging. This upgrades SAMPO’s “Chaoxuan light” image processing technology to almost perfect level and beat competitors’ samegrade AV goods. With the help of smart application, the SAMPO Hongtianlei has become the synonym of premier goods and won the recognition by professional magazine and dealers in the highly competitive LED markets with its unique smart application, full range of media streaming online, and powerful data processing capacity. All these are set to win trusts from the markets.

Eying the energy policy advocated by the government, the full series of SAMPO’s thin LCD displays remain conforming to the government’s energy-saving labeling and ROHS standards to balance consumers’ desire of using new high-tech products and wishes to contribute in environment protection.

In recent years, the LED market faced a decline on the total sales volume, largely due to a shift in the consumers’ viewing preferences, relying largely on their handsets and tablets as the main devices for viewing programming and dramas, wherein the total volume in 2020 has not seen a significant growth but still remained at around 900,000 units in sales, while the display devices see the functions stabilizing and also the market lacking long-term emerging mainstream applications to stimulate a device replacement trend, but later owing to the pandemic spread and the prevailing Internet audiovisual entertainment trend, it excels the market’s demand for display devices, which slightly escalates the demand for the 4K smart displays; yet due to the materials shortage and a steady rise in the pricing and costs, resulting in no significant growth in the total market sales volume, yet Sampo managed to secure its sales volume of the Sample brand alone at 10%, despite the fierce brand competition.

In 2021, Sample vies to make smart use of the home economy’s market trend, with an aim to prop up its market share, by continuing to win over the consumers’ recognition through its QLED high A/V quality, to excel its smart TV’s manufacturing and sales ratios and to embrace the shift in the market demand, with high-end models offering ultrawide color scale and the hi-fi home theater sound quality, vying to secure a foothold in the same high-end market, while the mid- and low-end models are hinged on a high C/P value doctrine by providing high picture and sound quality, to compete with other rival brands. On the 4K networking, there is a higher end audiovisual application that can be used as the sales focus, collaborating with media platform service providers and Internet merchants, to offer a wider array of Internet A/V services and to achieve differentiation to rival products. It is anticipated to tap into more opportunities and feature characteristics in excelling the display market to challenge the goal of achieving the annual sales of 120,000 units and to elevate the brand’s market share to outrun other rival brands.

(2) Home appliances
A. Air-conditioner:

In 2020, Sampo’s air-conditioners are forecast to account for roughly 10% of the market share. Of which, the inverter products’ sales structure will continue to excel by up to 75% or more.

Sampo’s air-conditioners vie to become deeply-rooted in Taiwan by emphasizing on its durability. The serial detached inverter air-conditioners fully comply with CSPF new-energy control level-I standards and the key inverter detached air-conditioner series has further been accredited with

Operational Overview

energy-saving and environmentally friendly duo insignia certifications. The high-end inverter detached series is coordinated with national patented ‘Pico Pure’ soluble ion function and has been certified by the national certification entity to effectively perform dehumidification, disinfectant, mildew prevention, deodorizing, allergy filtration and can further remove the harmful substance by up to PM2.5, as well as achieving the goal of a highefficiency filtration.

Besides the serial inverter products, Sampo has also launched the detached and window-mount serial products with affordable pricing that also meet the latest energy efficiency standards. To adapt to Taiwan’s climate, Sampo’s serial air-conditioners all adopt the stepped-up anticorrosion technology, enabling the consumers not only to enjoy convenient savings but also the wearability and durability, as it vies to strengthen the products and enhance the overall appearance quality; in addition, the Ministry of Education’s ongoing “classroom air-conditioning” policy for primary and junior-high schools is expected to propel the new year’s overall air-conditioner revenue to move upward.

B. Refrigerator:

In 2020, the brand accounts for roughly 18% in the market share. Although the subsidy to the commodity tax is staying, yet as impacted by the pandemic, the refrigerators’ total market growth remains moderate. The future calls for focusing on readjusting the product sales structure and the pricing maintenance strength, complete with developing a new series to increase the sales. The compact refrigerator market: to secure the specific sales projects’ closing ratio, through which to secure the basic sales volume. The middle market: the middle-capacity inverter high-end refrigerators vie to excel the inverter units’ market share. With narrow width, large capacity being the market demand, the brand will continue to put forth its best efforts. The glass-surface refrigerator series, which features the Japanese-grade glass appearance, offering a refined, deluxe look, easy to clean, attesting to Sampo’s strength for an ongoing progress. The European-flair beautified series provides an enhanced texture and fully caters to singles and small family needs. The series has applied for the MIT insignia to differentiate products imported and assembled across Southeast Asia.

C. Washer:

In 2020, its market share is at roughly 13% and many of the Sampo’s models have also been accredited with golden-level water saving, energysaving, water-conserving and MIT four insignias, to fully address the consumers’ needs of diverse shopping choices and water-saving and powersaving besides quietness and cleanliness. It offers a high-end DD inverter washer, equipped with Pico Pure disinfecting and rapid drum cleaning functions. To address the need of a humid environment, a series of stainless steel closures is also on offer. The brand has also lunched the 17kg and 19kg narrow-body, large-capacity inverter washers, offering a new choice for smaller family space. The MIT insignia series serves to difference products produced in the Mainland China and across Southeast Asia.

D. Microwave:

The RE microwave continues to receive the brand golden award in two consecutive years, boasting a leading role among the local brands, as the product range continues to excel in its appearance and functionality, offering a wide range of specifications, including the flat type, grilling,

microcomputer, mechanical and so forth, gearing to satisfy varied consumer demands, as it further expands into the classic series of microwaves for this year, with a versatile, decorative appearance to add a taste to the lifestyle, enabling the consumers to enjoy the microwave’s ‘practical and trendy” smart use at an affordable pricing. The future calls for the Sampo microwaves not only to embrace a wide range of choices, encompassing the entry-level market, up to the mid- and high-end products, offering a wide range of choices to the consumers, securing its leading role among the local microwave brands.

E. Dehumidifier:

In 2020, Sampo’s dehumidifiers are estimated to account for roughly 13% of the market share. The serial Sampo dehumidifiers continue to embrace “made in Taiwan,” “a seven-step safety production,” “a level-one energy consumption efficiency” in three major pursuits and in response to the evolving air environment in the recent years, coupled with the consumers’ demand for air-filtration function, Sampo has launched a serial product range coordinated with patented “Pico Pure” technology providing “filtration and dynamic dehumidification;” in addition, there are also highperformance quality products, paired with HEPA filtration mesh and ceramic-ball filtration mesh and coordinated with an appealing glass substrate appearance, through which to capture the high-end consumers.

F. Small household appliance products:

With Taiwan’s summer weather temperature rising and the duration prolonging over the years, the market demand for the DC energy-saving fans is rising, in anticipation of the summer energy-saving and the rising electricity billing this year, which is also poised to trigger a shift in the market structure. The brand has for this year launched a brand-new appearance DC energy-saving fan, designed with a trendy appeal in mind, materializing a fine product within and beyond (the functionality + appearance), notwithstanding that there is a line of AC revolving fan models for choice options, where the AC revolving fans not only provide dynamic volume and a 20% in fan speed, making them the best choice for consumers looking for dynamic fan volume.

This summer, Sampo continues to unveil a range of brand-new label Claire revolving fans, which features more than the Japanese minimalistic style and also the patented technology of a 360-degree sway-head for a wider propensity of distribution, making it more than ideal for the rainy season, but its adjustable revolving front mesh unveiled this year further propels the air to all corners, multiplying the airflow, as the rotating front mesh provides a wider air distribution, making the airflow more supple and comfortable. It can also be used as a desktop fan, for Sampo has thought of the appearance and economy for all consumers.

With a rising camping market in the recent years, the brand has also seized the opportunity by launching the icemaker, which provides rapid icemaking in just seven minutes, complete with a convenient portable handle, allowing you to experience at ease the fun of camping; in addition, it can be coordinated with Sampo juicer, providing dynamic horsepower and a high 23500RPM rotating speed, so that you can quickly whip up a slushy, your perfect companion to disperse of the summer heat.

With mosquito-transmitted Malaria and related diseases, i.e. , Dengue, Zika virus fatally decimating over 750,000 people worldwide yearly, it calls for more than maintaining the home environment’s sanitation, but also a

Operational Overview

good mosquito catcher appliance remains indispensable; this year, Sampo unveils a household and a portable mosquito light (which adopts 365nm wavelength of the UL LED visible to mosquito’s compound eyes and is recognized by U.S. Florida State University entomology professor Phil Koehler to provide dynamic mosquito-catching results, to truly materialize an all-encompassing result of mosquito-catching), for you can also tackle the annoyance of summer mosquito vector with ease outside the comfort of your home. In response to the longer duration of the summer, the household mosquito lamps have unveiled a new suction + electrocution dual model, featuring an all-encompassing 360 degree capture without any dead spots, combined with an ambience light to bring an extra warmth to your family living.

Sampo releases a wide range of trendy yet convenient small kitchen appliances: the dish dryers, with the entire series manufactured in Taiwan, featuring ultraviolet ray disinfecting function to safeguard your dietary safety at home; the microcomputer air-fired oven, which offers air-frying, grilling, baking, fruit drying whose versatile functions, enable you to produce a diverse range of cuisine with a single product, and being able to enjoy flavorful meals with ease; Sampo designs the made-in-Taiwan, appealing rice cooker, with one simple touch dial to churn out a wide range of gastronomic dishes, accentuated by the pastel color and a curvature design to appeal to the younger market; the multifunctional gourmet slow cooker and the electric hotplate offer easy cooking for single lodgers and with family; the hot water bottle is enhanced with thoughtful new feature, with the screen displaying the real-time bottle temperature, which also allows adding distilled water for heating to a specified temperature, achieving the true results of time-saving and power-saving. Catering to the healthcare products, it has unveiled washable, temperature-controlled electric blanket, to capture the niche opportunity in the senior market.

In the aspect of the distribution network, with its emerging distribution networks widening, including the influencers, podcast, bulk shopping and the like, the brand vies to continue launching new products with a high C/P value, and also with active management to explore potential consumer groups at all levels.

G. Representation products:

With Siroca being a household name in the automated American coffee grinders in Taiwan and also an indicator product, a brand-new coffee maker will be further introduced this year, featuring an exquisite, compact appearance that fully manifests the Japanese knowhow, as it precisely computes the most adequate amount of water, coffee grind, water temperature and timing. Noteworthy, the model has been upgraded with a microcomputer feature, equipped with a 24-hour reservation function, enabling you to enjoy the freshly ground coffee at a café right in the comfort of your own home!

One other newly unveiled product, the multipurpose non-stick cooking wok is also a popular-selling product in Japan, featuring a precise temperature control and a detachable configuration, coupled with the constantly updated Internet recipes, which it has collaborating with aroma companies in Taiwan to present a series of recipe videoclips, enabling the consumers to finish a dish with ease, in simple steps and with cognitive reflexes.

It vies to collaborate closely with Siroca by continuing to bring in critically-acclaimed, practical products from Japan, backed by Sampo’s dynamic quality control and after-sales team, reassuring the Taiwan consumers to operate the appliances with ease and peace of mind.

Competitive niche and the development vision’s favorable, unfavorable factors and countermeasures

	countermeasures
	Favorablefactors	Unfavorablefactors	Countermeasure strategies
Electronic products	a. The comprehensive serial products are poised to satisfy the consumers’ needs in functionality and dimension. b. It is backed by professional quality control personnel and a certification system, which under the circumstances of similar specifications offered by rival products, to better provide product safeguards and a comprehensive range of after-sale services. c. The expansive distribution network and outlets serve to excel the brand’s exposure, combined with the island- wide service delivery to provide an integrated performance. d. It commands a research and development team, which can respond to a product’s generational update, helping to enhance the brand’s competitiveness. e. It has taken the lead to delve into the logistics industry’s smart household appliance system, by offering the networking cloud service function.	a. The diverse sales modes are gradually altering the home appliances’ consumption mode, allowing the fast-food type brands to emerge quickly, which indirectly results in a negative pricing competition in the home appliance market and the scenario of varied quality. b. It is less prone to differentiate the products, resulting in conflict in the distribution network’s selling price. c. The high-end products have a lesser popularity than the imported brands, which affect the market share ratio and gross profit of the normal-size appliances. d. The key parts and components are less easy to grapple.	a. By adjusting the R&D process, it is anticipated to excel the compatibility between the product and the consumers, by launching products that address the anticipation and real needs of the local consumers in Taiwan. b. Actively developing the niche market, to secure revenue and profitability. c. Clearly defining the product, to effectively segregate the models in the distribution network. d. Excelling the IOT smart household appliances, to create a smart home environment through functionality and also to achieve product segregation. e. Stepping up new specifications for the products’ advertisement campaign and application acceptability.

Operational Overview

	Favorable factors	Unfavorable factors	Countermeasure strategies
Home appliances	a. A comprehensive voluntary research and development system, ranging from industrial design, product functionality testing to quality review, as it commands professionalism and a wealth of flexible R&D synergy. b. The initial manufacturer’s direct-run 26 service outlets, coupled with an excess of 1,000 sales outlets, boasting the brand as the only 24- hour, 365-day customer service system nationwide, manifesting the brand’s deep-rooting commitment in providing a comprehensive sales service system in Taiwan. c. Its home appliance product R&D has actively secured various latest government legal and regulatory standards, including the MIT smiley face insignia, energy- savings, environmental friendliness, water-saving insignias and the RoHS guideline, and has further obtained the insignias through a third-party certification, to provide a high level of quality credibility. d. With the local residents looking for more added functions on household appliances, the brand has not only voluntarily incorporated the patented Pico Pure soluble water ion technology, multilayer air filtration system into its home appliance products, the Nano-Ti disinfecting, deodorizing technology has also been inducted into the refrigerators, which are posed to provide a clear differentiation between the brand and other rival brands.	a. The diverse sales modes are gradually altering the home appliances’ consumption mode, allowing the Internet marketing brands to emerge quickly, which indirectly results in a negative pricing competition in the home appliance market and the scenario of varied quality. b. Household appliance brands from Europe, the U.S., Japan, Korea and so forth, flooding into the Taiwan market through various means, are backed by ample advertisement promotional resources to critically steer the household appliance market and severely compress the operating niche of local brands. c. The impact of the pandemic has significantly aggregated the manufacturing cost, causing enormous pressure to the in-house manufacturers’ production cost, while the consumer market’s selling price is forced to raise the price for being unable to adequately reflect the cost. d. The shifting and changeable international trade conflicts are causing an unstable fluctuation to the raw materials costs, driving the cost control to be extremely difficult, which in turn affects the product’s competitive niche.	a. By adjusting the R&D process, it is anticipated to excel the compatibility between the product and the consumers, by launching products that address the anticipation and real needs of the local consumers in Taiwan. b. By strengthening integrating the network resources and sales consolidation, through which to effectively excel the integrated management yields, enabling a maximized injection and utilization of company resources. c. By building on the brand’s solid reputation foundation, it aims to integrate the existing comprehensive sales network, to actively explore a diverse and flexible virtual sales network by delving into potential customer groups of varied inklings, which will add comprehensiveness and flexibility to the sales system. d. By expanding a multitude of vendor network, it aims to instill a positive-collaborating supplier relation and provide a professional and enriching R&D experience, which will elevate the suppliers’ component fabrication and R&D sophistication, through which to instill a mutually beneficial and co-dependent alliance, as part of the countermeasures to flexibly adjust to fluctuations in raw materials supply.

(II) Important use and production process of main products 1. The key products’ criticalpurposes Item Product name Purpose 1 Liquid crystal display (including for cash register use and monitoring use) Home entertainment, PC display, data display, 3D display, cash register touch control, advertisement signboard and the like 2 4K2K ultra high- definition display Home entertainment, PC display, audiovisual briefing, data display, 3D display and the like, UHD pixel quality, teaching briefing 3 Cloud network smart module Smart home, audiovisual entertainment, cloud data 4 Multimedia display Computer teaching, audiovisual conferencing system, data display and the like. 5 Smart display Smart networking, smart home, information intelligence, audiovisual entertainment, digital signboard 6 Touch control and large-size industrial displays Safety control, audiovisual conferencing, digital signboard 7 Air-conditioning (heater) device Providing a living space with a comfortable temperature 8 Refrigerator, freezer, cold storag For food storage, freshness 9 Washer Laundering the clothes 10 Microwave For food prepping, cooking 11 Dehumidifier Reducing the indoor humidity, providing a comfortable living space 12 Dryer For drying clothes 13 Household air cleaner For cleansing the family’s indoor air, providing clean air. Caring for the entire family’s respiratory health. 14 Physical-heating digital cooker Utilizing high-speed rotation + stainless steel wear-resistant blades to break down the cell walls, enabling a complete absorption of food nutrients 15 Dehumidifier, air- filtration dehumidifier Cleansing the air and also reducing the indoor humidity 16 The dual wall- mount/freestanding commercial air filtration device Cleansing the commercial venue’s air quality, providing a clean, comfortable space	(II) Important use and production process of main products 1. The key products’ criticalpurposes Item Product name Purpose 1 Liquid crystal display (including for cash register use and monitoring use) Home entertainment, PC display, data display, 3D display, cash register touch control, advertisement signboard and the like 2 4K2K ultra high- definition display Home entertainment, PC display, audiovisual briefing, data display, 3D display and the like, UHD pixel quality, teaching briefing 3 Cloud network smart module Smart home, audiovisual entertainment, cloud data 4 Multimedia display Computer teaching, audiovisual conferencing system, data display and the like. 5 Smart display Smart networking, smart home, information intelligence, audiovisual entertainment, digital signboard 6 Touch control and large-size industrial displays Safety control, audiovisual conferencing, digital signboard 7 Air-conditioning (heater) device Providing a living space with a comfortable temperature 8 Refrigerator, freezer, cold storag For food storage, freshness 9 Washer Laundering the clothes 10 Microwave For food prepping, cooking 11 Dehumidifier Reducing the indoor humidity, providing a comfortable living space 12 Dryer For drying clothes 13 Household air cleaner For cleansing the family’s indoor air, providing clean air. Caring for the entire family’s respiratory health. 14 Physical-heating digital cooker Utilizing high-speed rotation + stainless steel wear-resistant blades to break down the cell walls, enabling a complete absorption of food nutrients 15 Dehumidifier, air- filtration dehumidifier Cleansing the air and also reducing the indoor humidity 16 The dual wall- mount/freestanding commercial air filtration device Cleansing the commercial venue’s air quality, providing a clean, comfortable space	(II) Important use and production process of main products 1. The key products’ criticalpurposes Item Product name Purpose 1 Liquid crystal display (including for cash register use and monitoring use) Home entertainment, PC display, data display, 3D display, cash register touch control, advertisement signboard and the like 2 4K2K ultra high- definition display Home entertainment, PC display, audiovisual briefing, data display, 3D display and the like, UHD pixel quality, teaching briefing 3 Cloud network smart module Smart home, audiovisual entertainment, cloud data 4 Multimedia display Computer teaching, audiovisual conferencing system, data display and the like. 5 Smart display Smart networking, smart home, information intelligence, audiovisual entertainment, digital signboard 6 Touch control and large-size industrial displays Safety control, audiovisual conferencing, digital signboard 7 Air-conditioning (heater) device Providing a living space with a comfortable temperature 8 Refrigerator, freezer, cold storag For food storage, freshness 9 Washer Laundering the clothes 10 Microwave For food prepping, cooking 11 Dehumidifier Reducing the indoor humidity, providing a comfortable living space 12 Dryer For drying clothes 13 Household air cleaner For cleansing the family’s indoor air, providing clean air. Caring for the entire family’s respiratory health. 14 Physical-heating digital cooker Utilizing high-speed rotation + stainless steel wear-resistant blades to break down the cell walls, enabling a complete absorption of food nutrients 15 Dehumidifier, air- filtration dehumidifier Cleansing the air and also reducing the indoor humidity 16 The dual wall- mount/freestanding commercial air filtration device Cleansing the commercial venue’s air quality, providing a clean, comfortable space
Item	Product name	Purpose
1	Liquid crystal display (including for cash register use and monitoring use)	Home entertainment, PC display, data display, 3D display, cash register touch control, advertisement signboard and the like
2	4K2K ultra high- definition display	Home entertainment, PC display, audiovisual briefing, data display, 3D display and the like, UHD pixel quality, teaching briefing
3	Cloud network smart module	Smart home, audiovisual entertainment, cloud data
4	Multimedia display	Computer teaching, audiovisual conferencing system, data display and the like.
5	Smart display	Smart networking, smart home, information intelligence, audiovisual entertainment, digital signboard
6	Touch control and large-size industrial displays	Safety control, audiovisual conferencing, digital signboard
7	Air-conditioning (heater) device	Providing a living space with a comfortable temperature
8	Refrigerator, freezer, cold storag	For food storage, freshness
9	Washer	Laundering the clothes
10	Microwave	For food prepping, cooking
11	Dehumidifier	Reducing the indoor humidity, providing a comfortable living space
12	Dryer	For drying clothes
13	Household air cleaner	For cleansing the family’s indoor air, providing clean air. Caring for the entire family’s respiratory health.
14	Physical-heating digital cooker	Utilizing high-speed rotation + stainless steel wear-resistant blades to break down the cell walls, enabling a complete absorption of food nutrients
15	Dehumidifier, air- filtration dehumidifier	Cleansing the air and also reducing the indoor humidity
16	The dual wall- mount/freestanding commercial air filtration device	Cleansing the commercial venue’s air quality, providing a clean, comfortable space

Operational Overview

2. Manufacturing process

(1) The LED display (including the monitoring and cash register liquid-crystal display) production process

Panel	assembly		Assembly work		Movement check		Heating		Adjustment work	Adjustment work

			Admitting to the inventory		Complete product inspection		Packaging work		Electrical check process

(2) Air-conditioner (heater) production process diagram

Baseplate component assembly		Compressor assembly		Airduct and fan assembly		Heat ventilator assembly		Cooling system instillment
Admitting to the inventory		Packaging work		Closure box assembly		Functional and static testing		Electrical control system assembly

(3) Refrigerator production process diagram

Inner/outer closure assembly		Inner/outer closure assembly		Closure foaming work		Door assembly work	Door assembly work

Admitting to the inventory		Packaging work		Functional testing		Cooling system instillment

(4) Washer production process flow

Dehydration drum assembly		Motor assembly		Water drum assembly		Water drum closure assembly	Water drum closure assembly

Admitting to the inventory		Packaging work		Functional testing		Upper panel assembly and wiring schematics

(5) Microwave production process diagram

Control baseplate assembly		Transformer and capacitor assembly		Baseplate assembly		Control panel assembly	Control panel assembly

Admitting to the inventory		Packaging work		Functional testing		Light socket and rotation plate assembly

(III) The supply status on key raw materials

The key raw materials for the electronic product category show no signs of short supply of goods, with a table of supply status as follows:

. The key raw materials supplyofgoods,with a	for the electronic product category show no signs of table of supplystatus as follows:
Key raw materials	Supply status
Panel	Which is foreign imported and supplied by local vendor
Touch Panel	Which is foreign imported and supplied by local vendor
Glass substrate	Which is foreign imported and supplied by local vendor
Mechanical plasticized steel component	Which is foreign imported and supplied by local vendor
Wiring materials	Which is foreign imported and supplied by local vendor
Functional baseboard	Which is foreign imported and supplied by local vendor
INVERTER	Which is foreign imported and supplied by local vendor
Power supply	Which is foreign imported and supplied by local vendor
Scaler Chip	Which is foreign imported and supplied by local dealer
Active electronic components	Which is foreign imported and supplied by local dealer
Passive electronic components	Which is foreign imported and supplied by local dealer
Printed circuit board	Which is foreign imported and supplied by local vendor
Packing material, component	Which is foreign imported and supplied by local vendor

2. The household appliance product category:

Key raw materials	Supply status
Compressor	Which is foreign imported and supplied by local vendor
Motor	Which is foreign imported and supplied by local vendor
Plastic materials	Which are mainly supplied by local vendors
Metalwork	Which are mainly supplied by local vendors
Controller	Which are mainly supplied by local vendors
Inverter component	Which are mainly supplied by local vendors
Packing material, component	Which are mainly supplied by local vendors

A majority of the raw materials in 2020 Q1~Q3 appears to be in a more stable trend, except that Q4 sees a synchronous hike on raw materials, such as the plastics, copper, steel, aluminum components and the like, posing a more stringent challenge to the models’ cost control. The pricing of electronic parts and components, being highly fluctuating, bears a certain impact on the cost being that the market supply is greater than the demand, whereas the 2021 Q1 sees a probable disruption and shortage to the global supply chain still marred by the economic factor. There is a need to adopt countermeasures to ascertain a reliable source of supply and to develop other sources in the purchasing focus to ascertain a smooth production without any shortage to the supply of goods and in turn to strength the brand’s market competitiveness.

72 -

Operational Overview

(IV) List of customers contributing to at least 10% of the total purchases and sales in the last two years 1. List of major purchasers:

Unit: NT$ thousand

									Unit: NT$	Unit: NT$	Unit: NT$	thousand
Year									As of 2021 Q1
		2020				2019

Item	Name	Amount	Ratio to the annual net purchases amount [%]	Relation with the issuer	Name	Amount	Ratio to the annual net purchases amount [%]	Relation with the issuer	Name	Amount	Ratio to the net purchases amount up to the prior quarter of the year[%]	Relation with the issuer
1	CompanyA	420,261	14%	None	CompanyA	342,857	12%	None	CompanyA	127,268	9%	None
2	Others	2,530,599	74%		CompanyB	409,717	14%	None	Others	1,259,628	91%
					Others	2,118,052	74%
	Net purchase amount				Net purchase amount				Net purchase amount	1,386,896	100%
		2,950,860	100%			2,870,626	100%

Unit: NT$ thousand

List of major sellers:

Year		2020	2020			2019	2019	2019	As of 2021Q1	As of 2021Q1	As of 2021Q1	As of 2021Q1
Item	Name	Amount	Ratio to the annual net sales amount[%]	Relation with the issuer	Name	Amount	Ratio to the annual net sales amount[%]	Relation with the issuer	Name	Amount	Ratio to the annual net sales amount [%]	Relation with the issuer
1	CompanyA	1,528,624	20%	None	CompanyA	1,344,046	19%	None	CompanyA	373,975	18%	None
2	Others	6,141,396	80%		Others	5,771,963	81%		Others	1,734,595	82%

	Net sales	7,670,020	100%		Net sales	7,116,009	100%		Net sales	2,108,570	100%

73 -

(V) Production volume and value in the last 2 years

Unit: NT$ thousand; sets

Year Production volume & value Main Products (Bydepartment)
		2020			2019

	Production capacity	Yield	Production value	Production capacity	Yield	Production value
Electronic products	3,760,000	2,199,455	1,054,094	3,760,000	1,208,864	1,065,851
Home appliance products	860,000	339,093	2,209,632	860,000	228,545	1,832,771
Total	4,620,000	2,538,548	3,263,726	4,620,000	1,437,409	2,898,622

(VI) Sale volume and value in the last 2 years

Unit: NT$ thousand; sets

(VI) Sale volume	and value in the last 2 years	and value in the last 2 years	and value in the last 2 years	and value in the last 2 years	Unit: NT$thousand;sets	Unit: NT$thousand;sets	Unit: NT$thousand;sets	Unit: NT$thousand;sets
Year Sales volume and amount Main Products (By department)	2020				2019
	Domestic sales		Export sales		Domestic sales		Export sales
	Volume	Amount	Volume	Amount	Volume	Amount	Volume	Amount
ElectronicsBusiness	160,372	813,845	1,563,048	877,240	168,738	830,493	1,528,684	1,121,534
Home Appliances Business				15,301	1,256,596	4,498,825	8,088	15,943
	1,303,335	5,234,255	6,939


Transportation	-	729,379	-	-	-	649,214	-	-
Total	1,463,707	6,777,479	1,569,987	892,541	168,738	830,493	1,528,684	1,121,534

74 -

Operational Overview

III. The information of employees within the last two years and up to the printing date of the annual report

	April 30,2021	April 30,2021	April 30,2021	April 30,2021
	Year	2019	2020	As of April30,2021
Number of employees	Staff	741	741	742

	Operator	211	199	200

	Total	952	940	942

Average age		44.4	44.7	44.5
Average seniority		14.5	15	14.8
Proportion by educational levels	Doctoral Degree			0
		0	0

	Master's Degree	3.9%	4.3%	4.5%

	College	48.5%	50.1%	50.2%

	High school graduate	37.7%	36.2%	36%

	Below senior high school	9.9%	9.4%	9.3%

IV. Information on Environmental Protection Expenditure

The company was not fined for environmental protection issues in 2020 and as of the annual report publication date.

V. Employer and employee relationships

(I) The company’s various employee welfare measures, advanced study, training, retirement systems and the implementation status, the agreements between labor and management, and labor rights protection measures

Welfare measures:
(1) Provided with employee cafeteria, transportation, and free parking lot.
(2) Gift certificates or company products for birthdays and Dragon Boat Festival, Mid-Autumn Festival, Chinese New Year Holidays, etc.
(3) Wedding and funeral subsidy
(4) Employee travel allowance
(5) Children’s education scholarship and grants
(6) Various employee social activities
(7) Emergency relief fund application
(8) Employee group insurance
Advanced study and training:
(1) Sampo has training activities arranged at the Linkou headquarters and factories, and organizes management related courses in the central or southern branch. Sampo also has a large and professional training center at Shoupingding, Tamsui District, New Taipei City to provide the colleagues with high-quality training services.
75 -
(2) Sampo has an excellent training system and experience. Sampo has annual training planned with internal lecturers assigned to teach professional knowledge and technical experience, and also invites external lecturers to help employees grasp new knowledge and strengthen professionalism every year. The use of training budget remains basing on operation-related training needs.
(3) The relevant training resources are allocated as follows (2020):

Training items	Training shift	Number of trainees	Training hours	Training expense
Internal training courses	28	682	3,951	345,934
Expatriate training course	30	49	592	198,155
Total	58	731	4,543	544,089

Pension system:
It is handled in accordance with relevant law and regulations; or offers preferential retirement plans for the choices of employees with terms superior to those required by laws and regulations.
Agreement between labor and management:
The company has established an industrial union, and regularly holds labor– management meetings to handle the employee welfare committee operation in accordance with the law.
Labor rights protection measures: Implement the company’s systems in a timely manner in accordance with law and regulations, such as, the “Act of Gender Equality in Employment,” labor– management meetings, self-security inspection systems, the establishment of labor unions to protect labor rights, etc., and activate the operation of the employee welfare committee.

(II) Losses arising from labor disputes in the most recent year and as of the annual report publication date: The company has not suffered losses from labor disputes; also, the company maintains a good labormanagement relation.

VI. Major contracts

Contract nature	Interested party	Commencement date and deadline of a contract	Subject	Restrictions
Supply and Sales Contract	National distributors	--	Sampo product sales	--
	Well-known wholesale stores	2021/01/01 – 2021/12/31	Sampo product sales	--
Service contract	Taiwan Samsung Electronics Co., Ltd.	2020/08/01 – 2021/7/31	Samsung brand repair service	--
Energy- Saving Mark contract	Industry Technology Research Institute entrusted the Bureau of Energy, MOEA	2020/12/14 – 2022/12/13	Display products	EM-65ZT30D EM-55XT31A, etc.
	Industry	2019/10/29 –	Washingmachine	ES-E17B

76 -

Operational Overview

	Technology Research Institute entrusted the Bureau of Energy, MOEA	2021/10/28 2020/09/26 – 2022/09/25	products	ES-H11F
	Industry Technology Research Institute entrusted the Bureau of Energy, MOEA	2020/05/28 – 2022/05/27 2020/02/06 – 2022/02/05	Humidifier products	AD-Y816T DHY-GA18PC, etc.
	Industry Technology Research Institute entrusted the Bureau of Energy, MOEA	2021/02/21 – 2023/02/20	Windpipe-free air conditioner products	AM-QC36DC/AU-QC36DC, etc.
	Industry Technology Research Institute entrusted the Bureau of Energy, MOEA	2019/12/12 – 2021/12/11	Refrigerator products	SR-A53GDV SR-A53DV, etc.
	Industry Technology Research Institute entrusted the Bureau of Energy, MOEA	2020/04/26 – 2021/11/30	Electrical Fan products	SK-AC1812, etc.
Mid-term and long- term credit contract	Bank of Taiwan Corporation	2020/05/20 – 2023/05/20	Loan amount, interest payment method, and description of the rights and obligations of both parties	The rights and obligations of both parties in the sense of intended use, credit amount, period, the allocation and repayment methods, and the collateral are stipulated in the contract for compliance.
Constructio n Project Contract	Hwa Fong Construction Co., Ltd.	--	Sampo Tainan new factory construction	The contract starts from the date of bid awarded to the date the construction project is completed, the warranty period expires, and it is inspected and confirmed by both parties.
Constructio n Project Contract	KONG CHOU CONSTRUCTIO N	--	Sampo Corporate Headquarters new construction project	It is necessary to apply for a license for use within 345 calendar days from the commencement date of the contract construction.
Constructio n Project Contract	HH Tower Construction Co., Ltd.	--	Sampo Tucheng New Project (Zone C) Park and Underground ParkingLot	It is necessary to apply for a license for use on July 15, 2022 for the contract construction.

77 -

Six. Financial Information

I. Condensed Balance Sheet and and Income Statement of the Most Recent Five Years

(I) Condensed Balance Sheet - Consolidated

Unit: NT$ thousands

Year Item	Year Item	Financial Information in the Most Recent Five Years	Financial Information in the Most Recent Five Years	Financial Information in the Most Recent Five Years	Financial Information in the Most Recent Five Years	Financial Information in the Most Recent Five Years	Current year as of March 31, 2021 (Note 1)
		2020	2019	2018	2017	2016
Current Assets		3,548,411	3,625,681	4,429,447	4,191,003	4,247,699	3,542,003
Property, Plant, and Equipment		4,883,232	4,773,614	4,419,699	4,534,082	4,162,291	4,952,865
Intangible Assets		67,968	83,853	97,000	57,153	53,423	65,005
Other Assets		4,115,198	3,923,061	3,314,374	3,290,941	3,545,758	4,115,403
Total Assets		12,614,809	12,406,209	12,260,520	12,073,179	12,009,171	12,675,276
Current Liabilities	Before distribution	2,009,280	2,783,265	3,413,747	2,463,315	2,486,357	1,856,075
	After distribution	Note 2	3,353,865	3,944,907	2,557,915	3,161,157	Note 2
Non-Current Liabilities		2,511,458	2,834,552	2,411,202	2,843,682	2,200,624	2,498,375
Total Liabilities	Before distribution	4,520,738	5,617,817	5,824,949	5,306,997	4,686,981	4,354,450
	After distribution	Note 2	6,188,417	6,356,109	5,401,597	5,361,781	Note 2
Equity attributable to owners of parent company		7,765,297	6,485,335	6,158,865	6,504,682	7,070,122	7,977,965
Capital	Stock	3,872,000	3,872,000	3,872,000	4,990,000	4,990,000	3,872,000
Capital	surplus	171,699	151,374	132,933	129,903	78,581	189,787
Retained Earnings	Before distribution	4,457,091	3,241,243	3,103,229	2,521,275	2,906,789	4,725,224
	After distribution	Note 2	2,670,643	2,572,069	2,426,675	2,231,989	Note 2
Other Equity		(142,666)	(170,475)	(324,510)	(256,541)	(175,753)	(246,581)
Treasury Shares		(592,827)	(608,807)	(624,787)	(879,955)	(729,495)	(562,465)
Non-Controlling Equity		328,774	303,057	276,706	261,500	252,068	342,861
Total	Before distribution	8,094,071	6,788,392	6,435,571	6,766,182	7,322,190	8,320,826
Equity	After distribution	Note 2	6,217,792	5,904,411	6,671,582	6,647,390	Note 2

Note 1: The financial statements for the three months ended March 31, 2021 have been reviewed by CPAs.

Note 2: The amount after the distribution in 2020 will not be entered because the 2021 regular shareholder meeting has not yet been held.
78 -

Financial Information

(II) Condensed Statement of Comprehensive Income - Consolidated

Unit: NT$ thousands

Year Item	Financial Information in the Most Recent Five Years	Financial Information in the Most Recent Five Years	Financial Information in the Most Recent Five Years	Financial Information in the Most Recent Five Years	Financial Information in the Most Recent Five Years	Current year as of March 31, 2021 (Note 1)
	2020	2019	2018	2017	2016
OperatingRevenue	7,670,020	7,116,009	7,076,541	7,639,483	10,081,936	2,108,570
Gross Profit	1,402,023	1,119,981	1,091,866	1,202,800	2,567,689	415,158
OperatingProfit	527,310	297,795	135,758	105,081	286,050	191,409
Non-Operating Income and Expenses	1,557,296	514,010	627,433	266,299	570,017	46,233
Net Profit Before Tax	2,084,606	811,805	763,191	371,380	856,067	237,642
Income Tax Expense	248,611	38,943	78,484	39,995	43,876	36,722
Net income from continuing operations	1,835,995	772,862	684,707	331,385	812,191	200,920
Loss from discontinued operations	-	-	-	-	-	-
Net income (loss) of the period	1,835,995	772,862	684,707	331,385	812,191	200,920
Other comprehensive net income of the period (after tax)	19,210	83,371	(108,249)	(98,533)	(280,123)	(22,615)
Total Comprehensive Income	1,855,205	856,233	576,458	232,852	532,068	178,305
Net profit attributable to owners of the parent	1,795,993	738,963	661,816	312,404	789,485	186,698
Net income attributable to non-controlling interests	40,002	33,899	22,891	18,981	22,706	14,222
Total comprehensive income attributable to owners of the parent	1,814,257	824,399	554,260	213,931	513,062	164,218
Total comprehensive income attributable to non-controlling interests	40,948	31,834	22,198	18,921	19,006	14,087
Earningsper share	4.86	2.00	1.52	0.67	1.65	0.50

Note 1: The financial statements for the three months ended March 31, 2021 have been reviewed by CPAs.

79 -

(III) Condensed Balance Sheet - Individual

Unit: NT$ thousands

		Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands
Year Item		Financial Information in the Most Recent Five Years
		2020	2019	2018	2017	2016
Current Assets		2,524,777	2,759,231	2,898,668	2,651,898	2,640,930
Property, Plant, and Equipment		4,020,496	3,883,757	3,558,659	3,657,260	3,279,870
Intangible Assets		66,975	82,603	97,000	57,153	53,423
Other Assets		4,968,143	4,807,095	5,137,285	5,064,498	5,352,955
Total Assets		11,580,391	11,532,686	11,691,612	11,430,809	11,327,178
Current Liabilities	Before distribution	1,646,440	2,426,193	3,191,131	2,221,105	2,242,686
	After distribution	Note 1	2,996,793	3,722,291	2,315,705	2,917,486
Non-Current Liabilities		2,168,654	2,621,158	2,341,616	2,705,022	2,014,360
Total Liabilities	Before distribution	3,815,094	5,047,351	5,532,747	4,926,127	4,257,046
	After distribution	Note 1	5,617,951	6,063,907	5,020,727	4,931,846
Capital Stock		3,872,000	3,872,000	3,872,000	4,990,000	4,990,000
Capital surplus		171,699	151,374	132,933	129,903	78,581
Retained Earnings	Before distribution	4,457,091	3,241,243	3,103,229	2,521,275	2,906,789
	After distribution	Note 1	2,670,643	2,572,069	2,426,675	2,231,989
Other Equity		(142,666)	(170,475)	(324,510)	(256,541)	(175,753)
Treasury Shares		(592,827)	(608,807)	(624,787)	(879,955)	(729,495)
	Before distribution	7,765,297	6,485,335	6,158,865	6,504,682	7,070,122
Total Equity	After distribution	Note 1	5,914,735	5,627,705	6,410,082	6,395,322

Note 1: The amount after the distribution in 2020 will not be entered because the 2021 regular shareholder meeting has not yet been held.

80 -

Financial Information

(IV) Condensed Statement of Comprehensive Income - Individual

Unit: NT$ thousands

	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands
Year Item	Financial Information in the Most Recent Five Years
	2020	2019	2018	2017	2016
Operating Revenue	6,507,159	6,037,716	6,139,564	6,853,888	9,233,617
Gross Profit	1,344,083	1,191,301	1,140,679	1,257,381	2,529,221
Operating Profit	320,781	206,591	80,465	115,634	234,556
Non-Operating Income and Expenses	1,688,769	552,400	597,696	228,318	582,022
Net Profit Before Tax	2,009,550	758,991	678,161	343,952	816,578
Income Tax Expense	213,557	20,028	16,345	31,552	27,099
Net income from continuing operations	1,795,993	738,963	661,816	312,400	789,479
Loss from discontinued operations	-	-	-	-	-
Net income (loss) of the period	1,795,993	738,963	661,816	312,400	789,479
Other comprehensive net income of the period (after tax)	18,264	85,436	(107,556)	(98,473)	(276,424)
Total Comprehensive Income	1,814,257	824,399	554,260	213,927	513,055
Earningsper share	4.86	2.00	1.52	0.67	1.65

(V) Names and audit opinions of CPAs for the most recent five years

Year	Name of Accounting Firm	Name of CPA	Audit Opinion
2016	DELOITTE AND TOUCHE	SU,YU-SHIOU、 LIN,YI-HUI	Unqualified opinion
2017	DELOITTE AND TOUCHE	SU,YU-SHIOU、 LIN,YI-HUI	Unqualified opinion
2018	DELOITTE AND TOUCHE	SU,YU-SHIOU、 LIN,YI-HUI	Unqualified opinion (Emphasize matters or other matters)
2019	DELOITTE AND TOUCHE	SU,YU-SHIOU、 LIN,YI-HUI	Unqualified opinion (Emphasize matters or other matters)
2020	DELOITTE AND TOUCHE	YOU,SU-HUAN、 LIN,YI-HUI	Unqualified opinion (Emphasize matters or other matters)

Note: Description of replacement of CPAs in the last five years

Due to the internal adjustment of the CPA firm, the former CPA Su,Yu-Shiou was replaced with CPA Yu, Su-Huan by Deloitte & Touche as the Company’s CPA, implemented since Q4 of 2020.
81 -

II. Financial Analysis of the Most Recent Five Years

Item	Year	Financial Analysis of the Most Recent Five Years	Financial Analysis of the Most Recent Five Years	Financial Analysis of the Most Recent Five Years	Financial Analysis of the Most Recent Five Years	Financial Analysis of the Most Recent Five Years	Financial Analysis of the Most Recent Five Years	Financial Analysis of the Most Recent Five Years	Financial Analysis of the Most Recent Five Years	Financial Analysis of the Most Recent Five Years	Financial Analysis of the Most Recent Five Years	Current year as of March 31, 2021 (Note 1)
		2020 Consol idated	2020 Individ ual	2019 Consol idated	2019 Individ ual	2018 Consol idated	2018 Individ ual	2017 Consol idated	2017 Individ ual	2016 Consol idated	2016 Individ ual
Financial structure (%)	Debt ratio	35.84	32.94	45.28	43.77	47.51	47.32	43.96	43.10	39.03	37.36	34.35
	Long-term fund to property, plant and equipmentratio	171.55	215.53	154.28	194.02	163.60	195.41	173.49	207.93	183.61	225.35	186.17
Liquidity analysis (%)	Current ratio	176.6	153.35	131.68	115.14	129.75	90.84	170.14	119.40	170.84	116.34	190.83
	Quick ratio	86.72	63.04	74.09	53.71	65.63	32.61	93.74	61.63	90.57	65.44	90.57
	Times interest earned	86.87	96.66	28.05	28.09	37.94	34.06	19.37	18.14	64.20	62.64	66.99
Operating performance	Average collection turnover(times)	12.95	17.69	11.64	16.01	10.79	13.33	8.77	10.00	8.47	9.02	16.57
	Average collection days	28.19	20.63	31.36	22.80	33.83	27.38	41.62	36.50	43.10	40.48	22.03
	Inventory turnover (times)	4.68	4.5	3.88	3.59	3.64	3.86	4.60	5.31	5.33	5.76	4.61
	payment turnover (times)	8.04	7.93	8.87	8.45	8.63	8.06	8.37	8.09	9.27	8.63	8.57
	Average inventory turnoverdays	77.99	81.11	94.07	101.67	100.27	94.56	79.35	68.74	68.43	63.37	79.18
	Property, Plant and Equipment Turnover(Times)	1.59	1.65	1.55	1.62	1.58	1.70	1.76	1.98	2.40	2.81	1.71
	Total Asset Turnover(Times)	0.61	0.56	0.58	0.52	0.58	0.53	0.63	0.60	0.83	0.79	0.68
Profitability	Return on assets (%)	14.83	15.69	6.46	6.56	5.76	5.87	2.89	2.89	6.78	6.96	1.63
	Return on equity (%)	24.67	25.21	11.69	11.69	10.37	10.45	4.70	4.60	10.88	10.93	2.67
	Net income before income tax to paid-in capital ratio (%)	53.84	51.9	20.97	19.60	19.71	17.51	7.44	6.89	17.16	16.36	6.14
	Net income margin(%)	23.94	27.6	10.86	12.24	9.68	10.78	4.34	4.56	8.06	8.71	9.53
	Earnings per share (NT$)	4.86	4.86	2.00	2.00	1.52	1.52	0.67	0.67	1.65	1.65	0.50
Cash flow	Cash flow ratio (%)	18.77	21.97	18.66	20.68	(0.57)	(4.14)	4.81	8.44	37.52	41.04	(1.32)
	Cash flow adequacyratio (%)	38.09	37.03	40.24	37.07	54.31	59.43	74.93	87.69	94.78	107.27	21.18
	Cash flow reinvestment ratio (%)	(1.41)	(1.83)	(0.02)	(0.33)	(1.03)	(2.25)	(4.60)	(4.49)	3.75	3.73	(0.19)
Leverage	Operatingleverage	1.41	1.35	1.62	1.59	2.13	2.47	2.43	1.99	1.52	1.38	1.32
	Financial leverage	1.05	1.07	1.11	1.16	1.18	1.34	1.24	1.21	1.05	1.05	1.02
Reasons for	changes in financial ratios in the most recent two years (Analysis is not required if the change is within 20%).
1. The decrease in debt ratio was mainly due to an increase in property, plant and equipment, and a decrease in short-term bills payable, long-term borrowings due within one year or one operating cycle, and long-term borrowings.
2. The increase in current ratio was mainly due to a decrease in short-term bills payable and long-term borrowings due
within one year or one operating cycle. 3. The increase in interest coverage ratio was mainly due to an increase in the gains on the disposal of property plant and
, equipment. 4. The increase in inventory turnover was mainly due to an increase in operating costs. 5. The increase in return on assets was mainly due to an increase in operating income and the gains on the disposal of property, plant and equipment in the current period. 6. The increase in return on equity was mainly due to an increase in operating income and the gains on the disposal of property, plant and equipment in the current period. 7. The increase in ratio of pre-tax net income to paid-in capital was mainly due to an increase in operating income and the gains on the disposal of property, plant and equipment in the current period. 8. The increase in profit margin was mainly due to an increase in operating income and the gains on the disposal of property, plant and equipment in the current period. 9. The increase in earnings per share was mainly due to an increase in profit or loss after tax. 10. The decrease in cash reinvestment ratio was mainlydue to a decrease in net cash inflow from operatingactivities.

Note 1: The financial statements for the three months ended March 31, 2021 have been reviewed by CPAs.
82 -

Financial Information

Note 2: As of the publication date of the annual report, where any company, with its stock listed on the stock market for trading or traded over the counter of securities firms, have the latest financial data that has been audited or reviewed by a CPA, said data shall also be analyzed. Note 3: The following lists the formulas used for performing the financial analysis:

Financial structure
- (1) Debt ratio = Total liabilities / total assets.
- (2) Ratio of Long-term Capital to Property, Plant and Equipment = (Total Equity + Non-current Liabilities)/Net Property, Plant and Equipment.
Liquidity analysis
- (1) Current ratio = Current assets / Current liabilities.
- (2) Quick ratio = (Current assets - Inventories - Prepaid expenses) / Current liabilities.
- (3) Times interest earned = Earnings before interests and taxes / Interest expenses over this period.
Operating performance
- (1) Average collection turnover (including accounts receivable and notes receivable resulting from business operations) = Net sales / Average receivable of the period (including accounts receivable and notes receivable resulting from business operations).
- (2) Average collection days = 365 / Average collection turnover.
- (3) Inventory turnover = Cost of sales / Average inventories.
- (4) Payment turnover (including accounts payable and notes payable resulting from business operations) = Cost of sales Payable of the period (including accounts payable and notes payable resulting from business operations).
- (5) Average inventory turnover days = 365 / Inventory turnover.
- (6) Property, plant and equipment turnover = Net sale / Net property, factory and equipment.
- (7) Total assets turnover = Net sales / Total assets.
Profitability
- (1) Return on assets = (Net income (loss) + Interest expenses * (1 - Tax rate)) / Average total assets.
- (2) Return on equity = Net income (loss) / Average total equity.
- (3) Net income margin = Net income (loss) / Net sales.
(4) Earnings per share = (Net income - Preferred stock dividend) / Weighted average number of shares outstanding.
1. Cash flow
2. (1) Cash flow ratio = Net cash generated by operating activities / Current liabilities.
3. (2) Cash flow adequacy ratio = Net cash generated by operating activities in the most recent five years / (Capital expenditure + Inventory increase + Cash dividends) in the most recent five years.
(3) Cash flow reinvestment ratio = (Net cash generated by operating activities - Cash dividends) / (Gross property, plant and equipment + Long-term investments + Other assets + Working capital).
1. Leverage (1) Operation leverage = (Net operating revenue - Variable operating costs and expenses) / Operating income.
2. (2) Financial leverage = Operating income / (Operating income - Interest expenses).
Note 4: Special attention shall be paid to the following matters when using the formula of earnings per share above: (1) It shall be based on the weighted average number of common stocks rather than the number of outstanding shares at the end of the year.
(2) Where there is capital increase by cash or treasury share transaction, the circulation period shall be considered when calculating the weighted average number of shares.
(3) Where there is capital increase by earnings or by capital surplus, the annual and semi-annual earnings per share of previous years shall be retrospectively adjusted in accordance with the proportion of capital increase without considering the issuance period of such capital increase.
(4) If the preferred stocks are inconvertible cumulative preferred stocks, dividends of the year (whether paid or not) shall be deducted from net income or included in the net loss. If the preferred stocks are not cumulative, preferred stock dividends shall be deducted from the net income (if any), and no adjustment is required in the case of net loss.
Note 5: Special attention shall be paid to the following matters for cash flow analysis:
(1) Net cash generated by operating activities is the net cash inflow from operating activities in the statement of cash flows. (2) Capital expenditure is the annual cash outflow of capital investment.
(3) The increase in inventories is included only when the ending balance is greater than the beginning balance. If the year-end inventory balance decreases, it is counted as zero.
(4) Cash dividends include the cash dividends of common and preferred stocks.
(5) Gross property, plant and equipment shall refer to the balance of property, plant and equipment before deducting accumulated depreciation.
Note 6: The issuer shall classify operating costs and operating expenses as fixed or variable by their nature. If estimation or subjective judgment is involved, attention shall be paid to its reasonableness and consistency.
Note 7: When the company’s shares have no par value or the par value per share is not NT$10, the calculation of the ratio of paid-in capital is changed to the ratio of equity attributable to the owners of the parent company on the balance sheet.
83 -

III. Audit report on the most recent year financial statements by the Audit Committee

Audit Committee’s Audit Report

Approved

The board of directors prepared and presented the company’s 2020 business report, financial statements, and earnings distribution proposals, of which, the financial statements were audited by CPA Yu, Su-Huan and CPA Lin, Yi-Hui of Deloitte & Touche with an audit report issued.

The aforementioned business report, financial statements, and earnings distribution proposals were reviewed by the Audit Committee without any nonconformity identified; also, they are hereby presented for inspection according to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

2021 Regular Shareholders Meeting

Convener of the Audit Committee: Chian, Chen-Rong

March 26, 2021

84 -

IV. Latest financial statements

Statement of Affiliate’s Consolidated Financial Report

In 2020 (from January 1, 2020 to December 31, 2020), the companies that should be included in the consolidated financial reports of affiliated companies based on “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” and the companies that should be included in the consolidated financial reports of subsidiaries based on “Consolidated and separate financial statements” of Section 10 of International Financial Reporting Standards were the same. The related information that should be disclosed in the consolidated financial statements of affiliated companies is also already disclosed in the consolidated financial reports for subsidiaries, so the consolidated financial statements of affiliated companies will not be published separately. Hereby declare

Company name: SAMPO CORPORATION

Person in charge: Chen Mao-Bang Industry and Commerce Development Foundation

March 29, 2021

85 -

Independent Auditor’s Report

To SAMPO CORPORATION:

Auditor’s opinions

We have audited the consolidated balance sheet of SAMPO CORPORATION and its subsidiaries as of December 31, 2020 and 2019, and the consolidated comprehensive income statements, consolidated statement of changes in shareholders’ equity, consolidated statements of cash flows, and notes to the consolidated financial statements (including significant accounting policies) for the years then ended.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the SAMPO Group as at 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 the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis of an audit opinion

We concluded our 2020 audits in accordance with the regulations governing auditing and attestation of financial statements by certified public accountants and generally accepted auditing standards. We concluded our 2019 audits in accordance with the regulations governing auditing and attestation of financial statements by certified public accountants, Financial Supervisor Commission’s letter Jing-Guan-Zheng-Shen-Zi No. 1090360805 dated 25 February 2020, and generally accepted auditing standards. Our responsibilities under those standards are further described in the responsibilities of auditors for the audit of the consolidated financial statements. We are independent of SAMPO GROUP in accordance with the Code of Professional Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that our audit provides a reasonable basis for our opinion.

86 -

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 2020 consolidated financial statements of SAMPO GROUP. These matters were addressed in the content 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 those matters.

Key audit matters of the 2020 consolidated financial statements of SAMPO CORPORATION and its subsidiaries are as follows:

Key Audit Matter: Authenticity of sales to hypermarket channels

For 2020, SAMPO CORPORATION’s and its subsidiaries’ revenues from sales to major hypermarkets is a key indicator used by management to evaluate business performance, and the effect of the recognition of related revenues on the financial statements is material. Therefore, we have determined that the recognition of the aforementioned operating revenues is a key audit matter and the related accounting policies are described in Note 4(15) to the consolidated financial statements.

Our auditing procedures with respect to the above matter are as follows:

Understood, evaluated and tested the effectiveness of the design and implementation of the internal control system related to revenue recognition.
In order to confirm the authenticity of the revenue, we obtained the sales revenue details of the hypermarket channel in 2020, sampled and verified original sales orders, shipping documents and invoices of the relevant transactions, and reconciled them with the recorded amounts in the accounting books.
Obtained the details of sales returns and discounts for the subsequent period from the hypermarket channel, sampled and verified the relevant certificates of sales returns and discounts, and examined the reasonableness of the returns and discounts.

Other Matters

We have also audited the individual financial statements of SAMPO CORPORATION as of and for the year ended December 31, 2020 and 2019 on which we have issued an unqualified opinion.

Responsibilities of Management and Those in Charge of Governance of the Sale or Contribution of Assets between an Investor and its Affiliate or Joint Venture

The responsibility of management is to prepare fairly presented consolidated financial statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reports Standards, International Accounting Standards interpretations, and announcements of interpretations recognized and published by the Financial Supervisory Commission and maintain necessary internal control related to the preparation of consolidation of financial statements in order to ensure the material misstatement caused by fraud or error does not exist in the consolidated financial statements.

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

87 -

Those in charge of governance (including the Auditing Committee) are responsible for overseeing the reporting process of the financial statements of SAMPO GROUP.

Auditor’s Responsibilities for the Audit of the Sale or Contribution of Assets between an Investor and its Affiliate or Joint Venture

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 and auditor’s report. Reasonable assurance is a high level of assurance, but is not a guarantee that and audit conducted in accordance with the accounting principles generally accepted in the Republic of China will always detect a material misstatement when it exists. Material misstatement could arise from fraud or errors. If fraud or errors are considered materials, 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.

The independent auditors when conducting the audit in accordance with generally accepted auditing standards shall exercise professional judgment and maintain professional suspicion. The independent auditors also perform the following tasks:

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 risks, and obtain evidence that is sufficient and appropriate to provide a basis of our opinion. Fraud may involve conspiracy, forgery, deliberate omission, false declaration, or violation of internal control; therefore, the risk of material misstatement arising from fraud is higher than that caused by error.
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 internal control effective in SAMPO GROUP.
Assess the appropriateness of the accounting policies adopted by the management and the reasonableness of the accounting estimates and related disclosures made.
Conclude the appropriateness of the use of the going concern basis of accounting by the management, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on SAMPO GROUP to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inappropriate, to modify our opinion. The conclusion of the independent auditors is based on the audit evidence obtained as of the audit report date. However, future events or conditions may cause SAMPO GROUP to cease as a going concern.
Evaluate the overall presentation, structure, and content of the consolidated statements, including related notes, whether the consolidated statements represent the underlying transactions and events in a matter that achieves fair presentation.
Obtain sufficient and appropriate audit evidence on the financial information of business entities within the Group in order to express an opinion on the consolidated financial statements. The independent auditor is responsible for guiding, supervising, and implementing the audit of the Group; also, is responsible for forming an opinion on the audit of the Group.
88 -

We communicate with those in charge of 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 in charge of 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 in charge of governance, we determine those matters that were of most significance in the audit of the 2020 consolidated financial statements of SAMPO GROUP and are therefore the key audit matters. The independent auditors shall state the key audit matters in the audit report except for the specific matters prohibited from being disclosed by law and regulations, or, in rare cases, where the independent auditor decides not to have specific matters communicated in the audit report since the negative effect of such disclosure can be reasonably expected to be greater than the increase of public interest.

Deloitte and Touche Taiwan CPA Su-Huan Yu

CPA: Yi-Hui Lin

Securities and Futures Bureau Approval Document No. Tai-Cai-Zheng (6) Zi No. 0920123784

Financial Supervisory Commission approval no. Jin-Guan-Zheng-Liu-Zi No.: 0940161384

March 29, 2021

89 -

SAMPO CORPORATION and its Subsidiary

Consolidated balance sheet

December 31, 2020 and 2019

Unit: NT$1 thousand

Code 1100 1136 1150 1160 1170 1180 1200 1210 1220 130X 1479 11XX 1517 1535 1550 1600 1755 1760 1780 1840 1920 1990 15XX 1XXX Code 2100 2110 2150 2160 2170 2180 2219 2220 2230 2250 2280 2320 2399 21XX 2540 2550 2570 2580 2640 2670 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 31XX 36XX 3XXX	Asset Current asset Cash and cash equivalents (Note 6) Financial assets at amortized cost – current (Note 7) Notes receivable, net (Note 9) Notes receivable – related parties, net (Notes 9 and 29) Accounts receivable, net (Note 9) Accounts receivable – related parties, net (Notes 9 and 29) Other receivables (Note 9) Other receivables – related parties (Notes 9 and 29) Current tax assets (Note 24) Inventory (Note 10) Other current assets (Note 16) Total current assets non-current assets The financial assets measured for the fair values through other comprehensive income- non-current (Note 8) Financial assets based on cost after amortization-Non-current (Note 7) Investments accounted for using equity method (Note 12) Property, plant and equipment (Note 13) Right-of-use asset (Note 14) Investment Property (Note 15) Intangible asset Deferred tax assets (Note 24) Refundable deposits Other non-current assets (Note 16) Total non-current assets Total assets Liabilities and equity Current liability Short-term borrowings (Note 17) Short-term notes and bills payable (Note 17) Payable notes Notes payable – related party (Note 29) Accounts payable Accounts payable – related parties (Note 29) Other payables (Note 18) Other payables – related parties (Note 29) Current tax liabilities (Note 24) Provisions – current (Note 19) lease liabilities – current (Note 14) Long-term loans due within one year or one business cycle (Note 17) Other current liabilities (Note 18) Total of current liabilities non-current liabilities Long-term borrowings (Note 17) Provisions – Non-current (Note 19) Deferred tax liabilities (Note 24) Lease liabilities – Non-current (Note 14) Net defined benefit liability – Non-current (Note 20) Other non-current liabilities Total non-current liability Total liabilities Equity of the parent company (Note 21) Common stock capital Additional paid-in capital Retained earnings Statutory reserves Special reserves undistributed earnings Total retained earnings Other equity Treasury shares Total equity of the parent company non-controlling interest Total equity Total Liabilities and Equity		December 31, 2020	December 31, 2020	% 7 2 1 - 4 - - - - 11 3 28 3 - 23 39 2 3 1 1 - - 72 100 - - 1 - 5 - 4 - 1 1 1 - 3 16 7 1 7 2 3 - 20 36 31 1 4 12 19 35 1) 5) 61 3 64 100		December 31, 2019	December 31, 2019
			Amount $ 834,049 322,053 113,415 - 454,261 5,247 13,368 1 490 1,381,334 424,193 3,548,411 425,208 27,000 2,843,169 4,883,232 250,474 359,691 67,968 160,772 30,690 18,194 9,066,398 $ 12,614,809 $ - - 189,950 - 655,956 2,690 528,811 31 97,865 72,845 111,325 - 349,807 2,009,280 900,000 106,481 874,801 182,223 403,477 44,476 2,511,458 4,520,738 3,872,000 171,699 485,157 1,592,788 2,379,146 4,457,091 142,666) 592,827) 7,765,297 328,774 8,094,071 $ 12,614,809				Amount $ 1,164,536 249,467 107,906 4 502,806 955 14,395 26 493 1,295,605 289,488 3,625,681 521,384 27,000 2,584,292 4,773,614 257,587 307,056 83,853 144,621 62,198 18,923 8,780,528 $ 12,406,209 $ 60,000 489,785 212,971 782 496,465 65 445,042 - 16,173 69,589 58,215 575,000 359,178 2,783,265 1,050,000 106,390 965,922 202,292 444,838 65,110 2,834,552 5,617,817 3,872,000 151,374 411,261 1,688,706 1,141,276 3,241,243 170,475) 608,807) 6,485,335 303,057 6,788,392 $ 12,406,209		%
		( (		( (		( (		( (	9 2 1 - 4 - - - - 11 2 29 4 - 21 39 2 2 1 1 1 - 71 100 - 4 2 - 4 - 4 - - - - 5 3 22 8 1 8 2 4 - 23 45 31 1 3 14 9 26 1) 5) 52 3 55 100

The notes attached shall constitute an integral part of this Consolidated financial statement.

Chairman: Chen Mao-Bang Industry and Commerce Managerial officer: Hsu, Ching-Chao Accounting officer: Chiang, Chuan-Tien Development Foundation

90 -

SAMPO CORPORATION and its Subsidiary

Consolidated Income Statement

January 1 to December 31, 2020 and 2019

Unit: NTD thousand, except Earnings Per Share (NTD)

Code Operating income 4100 Sales revenue 4600 Labor revenue 4800 Other operating revenue 4000 Total operating revenues Operating cost 5110 Cost of sales 5600 Labor service cost 5800 Other operating cost 5000 Total operating costs 5900 Gross profit Operating expenses 6100 Marketing expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment loss (gain) 6000 Total operating expenses 6900 Net Operating Income Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other profits and losses 7050 Financial costs 7060 Share of profit or loss of affiliated companies accounted for using the equity method 7000 Total non-operating revenues and expenses (Continued on next page)		2020		% 87 13 - 100 70 12 - 82 18 5 5 1 - 11 7 - 1 17 - 2 20		2019
								%
								87 12 1 100 73 11 - 84 16 6 4 2 - 12 4 - 1 4 - 2 7

91 -

(Continued from previous page)

Code 7900 Profit before tax 7950 Income tax expense (Note 24) 8200 Net profits of the current year Other comprehensive income 8310 The items that are not reclassified as profit or loss 8311 Remeasurement of defined benefit plan 8316 Unrealized valuation gains or losses of equity instruments investments in financial assets measured at FVTOCI 8330 Share of other comprehensive income of affiliates accounted for under equity method 8349 Income tax related to titles not subject to reclassification 8360 Items that may be reclassified subsequently under profit or loss 8361 Exchange differences from the translation of financial statements of foreign operations 8370 Share of other comprehensive income of affiliates accounted for under equity method 8300 Other comprehensive income of the current year (net amount after taxation) 8500 Total amount of comprehensive income of the current year Profit attributable to: 8610 Shareholders of parent company 8620 Non-controlling interest net profits 8600 (Continued on next page)		2020

92 -

(Continued from previous page)

Code The total comprehensive income belongs to 8710 Owners of parent 8720 non-controlling interest 8700 EPS (Note 25) 9710 Basic 9810 Diluted		2020		% 24 - 24		2019
		Amount $ 1,814,257 40,948 $ 1,855,205 $ 4.86 $ 4.82				Amount $ 824,399 31,834 $ 856,233 $ 2.00 $ 2.00		%
								12 - 12

The notes attached shall constitute an integral part of this Consolidated financial statement.

Chairman: Chen Mao-Bang Industry and Commerce Development Foundation

Managerial officer: Accounting officer: Hsu, Ching-Chao Chiang, Chuan-Tien

93 -

January 1 to December 31, 2020 and 2019

SAMPO CORPORATION and its Subsidiary

Consolidated Statements of Changes in Shareholders’ Equity

Unit: NT$1 thousand

						Equity ofth	e co	mpany								Totalequity
Shares 387,200 - - - - - - - - - - - - 387,200 - - - - - - - - - - - 387,200	Share capital $ 3,872,000 - - - - - - - - - - - - 3,872,000 - - - - - - - - - - - $ 3,872,000		Additional paid-in capital $ 132,933 - - - 3,683 - - - - 14,824 66 ) - - 151,374 - - - 752 - - - 3,670 15,882 21 - $ 171,699			Retained earnings		undistributed earnings $ 840,989 228,454 66,181 ) 531,160 ) - 738,963 32,328) 706,635 1,190 ) - - - 36,271) 1,141,276 95,918 73,896 ) 570,600 ) - 1,795,993 9,545) 1,786,448 - - - - $ 2,379,146	Otherequity Exchange differences from the translation of financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive profit or loss ( $ 258,372 ) ( $ 66,138 ) - - - - - - - - - - ( 47,026) 164,790 ( 47,026) 164,790 - - - - - - - - - 36,271 ( 305,398 ) 134,923 - - - - - - - - - - 29,136 ( 1,327) 29,136 ( 1,327) - - - - - - - - ($ 276,262) $ 133,596			Treasury shares $ 624,787 ) - - - - - - - 15,980 - - - - 608,807 ) - - - - - - - 15,980 - - - $ 592,827)
									Exchange differences from the translation of financial statements of foreign operations ( $ 258,372 ) - - - - - ( 47,026) ( 47,026) - - - - - ( 305,398 ) - - - - - 29,136 29,136 - - - - ($ 276,262)
				Statutoryreserves $ 345,080 - 66,181 - - - - - - - - - - 411,261 - 73,896 - - - - - - - - - $ 485,157		Special reserves $ 1,917,160 228,454 ) - - - - - - - - - - - 1,688,706 95,918 ) - - - - - - - - - - $ 1,592,788
		(			( (		( ( ( ( ( ( ( (		( ( ( ( (	( ( (	( ( (		( ( (	( ( ( (	( ( ( (	$ 6,435,571 - - 531,160 ) 3,683 772,862 83,371 856,233 14,790 14,824 - 5,549 ) - 6,788,392 - - 570,600 ) 752 1,835,995 19,210 1,855,205 19,650 15,882 - 15,210) $ 8,094,071

Chairman: Chen Mao-Bang Industry and Commerce Development Foundation

The notes attached shall constitute an integral part of this Consolidated financial statement. Managerial officer: Hsu, Ching-Chao

Accounting officer: Chiang, Chuan-Tien

94 -

SAMPO CORPORATION and its Subsidiary

Consolidated Statements of Cash Flow

January 1 to December 31, 2020 and 2019

Unit: NT$1 thousand

Code Cash flow from operating activities A10000 Current year net profit before taxation A20010 Profits and loss A20100 depreciation expense A20200 Amortization expenses A20300 Expected credit impairment loss (gain on reversal) A20400 Gain (loss) on financial assets and liabilities at fair value through profit and loss A23800 Gain on reversal of decline in value of inventories A20900 Financial costs A21200 Interest income A21300 Dividend income A22300 Share of profit or loss of affiliated companies accounted for using the equity method A22500 Net income from the disposal and obsolescence of property, plant and equipment A23000 Gain on disposal of non-current assets held for sale A29900 Lease modification gain A30000 Net change in operating assets and liabilities A31115 Financial assets mandatorily measured at fair value through profit or loss A31130 Notes receivable A31140 Notes receivable – related party A31150 Trade receivable A31160 Accounts receivable – related parties A31180 Other receivables A31190 Other receivables – related parties A31200 Inventory A31240 Other current assets A32130 Payable notes A32140 Notes payable – related party A32150 Accounts payable A32160 Accounts payable – related parties A32180 Other payables	2020 $ 2,084,606 176,680 39,628 1,803 ( 906 ) ( 8,273 ) 24,275 ( 10,097 ) ( 8,708 ) ( 195,007 ) ( 1,371,906 ) - ( 92 ) 906 ( 5,709 ) 4 46,645 ( 4,292 ) 983 25 ( 135,697 ) ( 134,960 ) ( 23,021 ) ( 782 ) 159,491 2,625 84,200	2019
		$ 811,805 142,171 42,998 ( 3,025 ) ( 1,019 ) ( 673 ) 30,013 ( 24,059 ) ( 3,339 ) ( 181,341 ) ( 628 ) ( 361,486 ) ( 25 ) 1,019 57,260 ( 1 ) ( 53,727 ) ( 791 ) 4,163 ( 26 ) 153,435 ( 45,370 ) ( 39,085 ) ( 957 ) 107,939 65 23,883

(Continued on next page)

95 -

(Continued from previous page)

Code A32190 Other payables – related parties A32200 Liability reserve A32230 Other current liabilities A32240 Net defined benefit liability A33000 Cash inflow from operating activities A33100 Interest received A33300 Interest payment A33500 Income tax payment AAAA Net cash inflow from operating activities Cash flow from investing activities B00020 Sale of financial assets at fair value through other comprehensive income B00040 Financial assets acquired on the basis of cost after amortization B00050 Financial assets on the basis of cost after amortization B01800 Acquisition of investment under the equity method B02600 Disposal of non-current assets held for sale B02700 Purchase of property, plant, and equipment B02800 Proceeds from disposal of property, plant and equipment B03800 Decrease in Refundable deposits B04500 Purchase of intangible assets B06800 Decrease of other non-current assets B07600 Dividends received from the affiliated company B09900 Receive other dividends BBBB Net cash inflow (outflow) from investing activities Cash flow from financing activities C00200 Decrease in short-term loans C00600 Decrease in short-term notes payable C01600 Proceeds from long-term loan C01700 Repayments of long-term borrowings C04020 Lease principal repayment C04300 Increase in other non-current liabilities C04400 Decrease in other non-current liabilities C04500 Cash dividend released C05100 Treasury stock purchased by employees C05800 Change in non-controlling interest C09900 Payment of Non-controlling Equity Cash Dividends CCCC Net cash outflow from financing activities	2020 $ 31 3,347 ( 9,371 ) ( 49,791) 666,637 10,097 ( 24,706 ) ( 274,788) 377,240 - ( 72,586 ) - ( 6,255 ) - ( 579,022 ) 1,792,951 31,508 ( 23,743 ) 828 69,831 8,708 1,222,220 ( 60,000 ) ( 489,785 ) 900,000 ( 1,625,000 ) ( 82,194 ) - ( 20,634 ) ( 554,718 ) 19,650 ( 300 ) ( 14,910) ( 1,927,891)	2019
		$ - ( 3,195 ) ( 45,105 ) ( 53,161) 557,738 24,059 ( 30,187 ) ( 36,635) 514,975 16,536 ( 249,467 ) 48 - 481,835 ( 416,446 ) 2,752 855 ( 29,851 ) 2,415 167,251 3,339 ( 20,733) ( 350,000 ) ( 59,747 ) 650,000 ( 725,000 ) ( 38,613 ) 39,785 - ( 516,336 ) 14,790 11,296 ( 16,845) ( 990,670)

(Continued on next page)

96 -

(Continued from previous page)

Code DDDD Impact of changes in exchange rate on cash and cash equivalents EEEE Net decrease in cash and cash equivalents E00100 Cash and cash equivalents balance – beginning of year E00200 Cash and cash equivalents balance – end of year

The notes attached shall constitute an integral part of this Consolidated financial statement.

Chairman: Chen Mao-Bang Managerial officer: Accounting officer: Industry and Commerce Hsu, Ching-Chao Chiang, Chuan-Tien Development Foundation

97 -

SAMPO CORPORATION and its Subsidiary

Notes to consolidated financial statements

January 1 to December 31, 2020 and 2019

(In thousand New Taiwan dollars, unless otherwise specified)

1. Organization and operations

SAMPO CORPORATION. (hereinafter referred to as “SAMPO” or the “Company”), formerly known as “DONGXING ELECTRIC CO., LTD.,” was established in September 1962. In September 1964, DONGXING merged with DONJOY ELECTRIC CO., LTD. and changed its name to SAMPO ELECTRONICS CO., LTD. In 1970, its stock was publicly traded, and in 1974, the name was changed to SAMPO CORPORATION.

The Company engages in the manufacture, processing, contracting, wholesaling, retailing, repair services, and consignment of electronics, electrochemicals, telecommunications, electrical materials, information products, and audio products, and engages in the import and export business and investment in foreign related businesses.

The consolidated financial statements are presented in the Company’s functional currency – New Taiwan dollar.

2. Financial reporting date and procedures

The consolidated financial statements were approved by the Board of Directors on March 24, 2021.

3. Application of new and revised standards and interpretation

(1) First-time application of International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations (“IFRICs” and “SICs”) (hereinafter collectively referred to as the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (hereinafter referred to as the “FSC”).

The adoption of the IFRSs endorsed and issued into effect by the FSC will not result in significant changes in the Consolidated Company’s accounting policies, except as indicated below:

1. Amendment to “Definition of a business” in IFRS 3

This amendment shall apply to the Consolidated Company’s transactions occurring after January 1, 2020. This amendment requires that the business shall consist of at least inputs and significant processes that together make a significant contribution to the ability to generate output. The determination of whether the “process of acquisition” is material will vary depending on whether there is an output on the date of acquisition. In addition, a new and simplified way of assessing the consistency of the acquired activities and asset portfolio with the business – the concentration test – is available for companies to choose.

98 -
Amendments to IAS 1 and IAS 8 “Definition of Materiality”

Effective January 1, 2020, the Consolidated Company adopted the amendment to use “reasonably expected to affect users” as the threshold of materiality and adjusted the disclosure of consolidated financial statements to remove immaterial information that may obscure material information.

(2) IFRSs endorsed by the Financial Supervisory Commission (hereinafter referred to as “FSC”) applicable for 2021.

The new/amended/revised standards or interpretation Effective Date per IASB Amendment to IFRS 4 “Extension of Provisional Effective from the date of Exemption for Application of IFRS 9” publication Amendments to the IFRS 9, IAS 39, and IFRS 7, Effective for annual IFRS 4 and IFRS 16 “Interest Rate Benchmark reporting periods Reform – Phase II” beginning after January 1, 2021 Amendment to IFRS 16 “Rent Reduction associated Effective for annual with COVID-19 pandemic.” reporting periods beginning after June 1, 2020.

As of the date of publication of this financial report, the Company has evaluated that the amendments to the above standards and interpretations will not have a material impact on the financial position and financial performance.

(3) The IFRSs released by the IASB but not yet approved and announced effective by the Financial Supervisory Commission

IASB publication effective The new/amended/revised standards or interpretation date (Note 1) “2018-2020 IFRSs improvements” January 1, 2022 (Note 2) Amendment to IFRS 3 “Update the index of the January 1, 2022 (Note 3) conceptual framework.” Amendment to IFRS 10 and IAS 28, “Sale or Undefined Contribution of Assets between an Investor and its Affiliate or Joint Venture and Investment in Affiliates.” IFRS 17 “Insurance Contracts” January 1, 2023 Amendment to IFRS 17 January 1, 2023 Amendment to IAS 1 “Classification of Liabilities as January 1, 2023 Current or Noncurrent” Amendment to IAS 1 “Disclosure of Accounting January 1, 2023 (Note 6) Policies.” Amendment to IAS 8 “Definition of Accounting January 1, 2023 (Note 7) Estimates.” Amendment to IAS 16 “Property, plant and equipment: January 1, 2022 (Note 4) price before reaching the intended state of use” Amendment to IAS 37 “Onerous Contracts – Cost of January 1, 2022 (Note 5) Performing Contracts.”

Note 1: Unless otherwise stated, the aforementioned new/amended/revised standards or interpretation are effective for annual reporting periods beginning after the respective dates.
99 -
Note 2: The amendment to IFRS 9 applies to swaps or changes in the terms of financial liabilities that occur in annual reporting periods beginning after January 1, 2022; the amendment to IAS 41, “Agriculture,” applies to fair value measurements in annual reporting periods beginning after January 1, 2022; and the amendment to IFRS 1, “First-time Adoption of IFRSs,” applies retrospectively to annual reporting periods beginning after January 1, 2022.
Note 3: This amendment applies to business mergers for which the acquisition date falls within the annual reporting period after January 1, 2022.
Note 4: This amendment applies to plant, property and equipment that begins to operate in the manner such as location and condition expected by management after January 1, 2021.
Note 5: This amendment applies to contracts with unfulfilled obligations as of January 1, 2022.
Note 6: The application of this amendment is deferred for annual reporting periods beginning after January 1, 2023
Note 7: This amendment applies to changes in accounting estimates and changes in accounting policies that occur in annual reporting periods beginning after January 1, 2023.
Amendment to IFRS 10 and IAS 28, “Sale or Contribution of Assets between an Investor and its Affiliate or Joint Venture and Investment in Affiliates.”

The amendment provides that if the Consolidated Company sells or contributes an asset to an affiliated party (or joint venture), or if the Consolidated Company loses control of a subsidiary but retains significant influence (or joint control) over the subsidiary, the Consolidated Company recognizes all of the gains or losses resulting from such transactions if the aforementioned asset or former subsidiary meets the definition of “business merger” for “business” under IFRS 3.

In addition, if the Consolidated Company sells or contributes assets to affiliated companies (or joint ventures), or the Consolidated Company losses the control over a subsidiary but retains significant influence on the subsidiaries (or joint control), and if the aforementioned assets or subsidiary not in compliance with the definition of IFRS 3 “Business,” the Consolidated Company is to recognize the profit and loss of the transactions only within the equity scope of the affiliated companies (or joint ventures) irrelevant to the investors, in other words, the profit and loss attributable to the Consolidated Company should be offset.

Amendment to IAS 1 “Classification of Liabilities as Current or Noncurrent”

The amendment aims to clarify whether a liability is classified as noncurrent; the Consolidated Company should assess whether it has the right to defer settlement at the end of the reporting period for at least 12 months after the reporting period. If the Consolidated Company has such a right as of the end of the reporting period, the liability is classified as noncurrent whether or not the Consolidated Company exercises its right to defer settlement of a liability. The amendment aims to clarify if the Consolidated Company is required to comply with certain conditions in order to have the right to defer

100 -

settlement of a liability. The Consolidated Company must have complied with specific conditions as of the end of the reporting period, even if the lender tests whether the Consolidated Company has complied with those conditions at a later date.

The amendment provides the purpose to clarify that settlement refers to the transfer to the counterparty of cash, other economic resources or equity instruments of the Consolidated Company that results in the extinguishment of the liability. However, if the terms of the liability may result in transferring the Consolidated Company’s equity instruments at the option of the counterparty, and if the option is separately recognized in equity in accordance with IAS 32, “Financial Instruments: Presentation,” the above-mentioned provisions do not affect the classification of the liability.

3. Annual Improvements 2018 – 2020 Cycle

The amendment to IFRS 9, “Financial Instruments,” to assess whether there is a material difference between the exchange or modification of the terms of a financial liability and whether there is a 10% difference in the discounted cash flows (including the net fees received for entering into new or modified contracts) between the terms of the old and new contracts, should only include fees received by the borrower and the lender. The above fees shall only include fees received and paid between the borrower and the lender.

Amendment to IFRS 3 “Update the index of the conceptual framework.”

The amendment updates the index to the conceptual framework and adds a new requirement that the acquirer should apply IFRIC 21 “Levies” to determine whether there is an obligation to incur a levy payment liability at the date of acquisition.

Amendment to IAS 16 “Property, plant and equipment: price before reaching the intended state of use”

The amendment provides that the sale price of output items of property, plant and equipment produced to bring them to the location and condition necessary to meet management’s expectations for the manner in which they will be operated is not appropriate as a deduction to the cost of those assets. The aforementioned output items should be measured in accordance with IAS 2, “Inventories,” and the sales price and cost should be recognized in profit or loss in accordance with the applicable standards.

The amendment applies to plant, property and equipment in the locations and condition necessary to achieve management’s intended location mode of operation after January 1, 2021, and the information for the comparative period shall be restated when the amendment is first applied by the Consolidated Company.

Amendment to IAS 37 “Onerous Contracts – Cost of Performing Contracts.”

The amendment specifies that in assessing whether a contract is onerous, the “cost of performing the contract” should include the allocation of incremental costs of performing the contract (e.g. direct labor and raw materials) and other costs directly related to the performance of the contract (e.g. the allocation of depreciation expense for property, plant and equipment used to perform the contract).

101 -

When the amendment is first applied, the Consolidated Company will recognize the cumulative effect as retained earnings at the date of initial application.

Amendment to IAS 1 “Disclosure of Accounting Policies.”

The amendment specifies that the Consolidated Company shall determine the material accounting policy information to be disclosed based on the definition of materiality. Accounting policy information is considered material if it could reasonably be expected to affect the decisions of the primary users of the general-purpose financial statements based on those financial statements. The amendment also clarifies:

Accounting policy information related to immaterial transactions, other events or circumstances is immaterial and the Consolidated Company is not required to disclose such information.
The Consolidated Company may determine that related accounting policy information is material because of the nature of the transactions, other events or circumstances, even if the amount is not material.
Not all accounting policy information related to significant transactions, other events or circumstances is material.

In addition, the amendment provides examples of accounting policy information that may be material if it relates to significant transactions, other events or circumstances and under the following circumstances, the information may be material:

(1) A change in the Consolidated Company’s accounting policy during the reporting period that results in a material change in financial statement information;
(2) The Consolidated Company selects applicable accounting policies from among the options permitted by the standards;
(3) Due to the lack of specific standards, the Consolidated Company establishes accounting policies in accordance with IAS 8 “Accounting Policies, Changes and Errors in Accounting Estimates”;
(4) The Consolidated Company discloses the relevant accounting policies that require the application of significant judgments or assumptions; or
(5) that it involves complex accounting requirements when users of financial statements rely on such information to understand such significant transactions, other events or circumstances.

Amendment to IAS 8 “Definition of Accounting Estimates.”

The amendment explicitly specifies that accounting estimate represents the monetary amounts in the financial statements that are subject to measurement uncertainty. In applying accounting policies, the Consolidated Company may need to measure financial statement items using monetary amounts that are not directly observable but must be estimated, and therefore measurement techniques and input values are required to create accounting estimates for this purpose. The effect of changes in measurement techniques or input values on accounting estimates that are not corrections of prior period errors are accounted for as changes in accounting estimates.

102 -

Further to the aforementioned influence, the companies in the consolidated financial statements will continue to evaluate the effect of the amendment to other IFRSs on the financial positions and performance of the companies in the consolidated financial statements to the date this parent company only financial statement approved and released, and will make appropriate disclosure after the evaluation.

4. Summary of significant accounting policies

(1) Compliance Statement

The consolidated financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs approved and published by the FSC.

(2) Basis of preparation

Except for the financial instruments on the basis of fair value and the recognition of net defined benefit liabilities on the basis of the present value of net defined benefit obligation net of the fair value of planned assets, this consolidated financial statement was compiled on the basis of historical cost. The evaluation of fair value could be classified into Level 1 to Level 3 by the observable intensity and importance of related input value:

Level 1 input value: refers to the quotation of the same asset or liability in an active market as of the evaluation (before adjustment).
Level 2 input value: refers to the direct (the price) or indirect (inference of price) observable input value of asset or liability further to the quotation of Level 1.
Level 3 input value: the unobservable input value of asset or liability.
(3) Standards in differentiating current and non-current assets and liabilities. Current assets including:
Assets held mainly for trading purpose:
Assets expected to be realized within 12 months after the balance sheet date; and
Cash and cash equivalents (not including those that are limited to exchange or repay liabilities exceeding 12 months after the balance sheet date).
- Current liabilities include:
Liabilities held for trading purposes;
103 -
The liabilities to be liquidated upon due within 12 months after the balance sheet date (those with long-term refinancing or payment term rearrangement completed from the balance sheet date to the financial reports approved and published date are also classified as current liabilities), and
Liabilities with the repayment deadline that cannot be unconditionally deferred to at least 12 months after the balance sheet date.

For those that are not current assets or liabilities above are classified as noncurrent assets or liabilities.

The Consolidated Company is engaged in the construction business, and its operating cycle is longer than one year. Therefore, the assets and liabilities related to the construction business are classified as current or non-current based on the normal operating cycle.

(4) Basis of consolidation

The accompanying consolidated financial statements include the financial statements of SAMPO CORPORATION and the entities (subsidiaries) controlled by SAMPO The Consolidated Statement of Comprehensive Income already covered the operating profit and/or loss of the subsidiaries, which have been acquired or disposed of the current term, from the date of acquisition until the date of disposal. The subsidiaries’ financial statements have been properly adjusted to make the accounting policies consistent with the accounting policies of the consolidated company. In preparing these consolidated financial statements, the transactions, account balances, incomes and loss and expenses among the individual entities are written off in full amount. The total comprehensive incomes of the subsidiaries were non-controlling interest attributed to the Company’s owners and the non-controlling interest, to become the balance of loss even as the non-controlling interest.

When the changes of interest of the subsidiaries’ ownership by the Consolidated Company do not lead to the loss of control, it is disposed of as interest transactions. The book value of the Consolidated Company and non-controlling interest has been adjusted to reflect the changes of the relative interest of subsidiaries. The differential between the adjustment amount of non-controlling interest and the fair value of consideration received is directly recognized as interest and belongs to the owner of the Company.

For details of subsidiaries, shareholding and business items, see Note 11, “Subsidiaries” and Exhibit 4.

(5) Foreign currency

For the transactions conducted in a currency other than the business entity’s functional currency (foreign currency), it is to be translated to the functional currency in accordance with the exchange rate on the transaction date when preparing the individual financial statements.

104 -

Foreign currency monetary items are translated at the closing rate on each balance sheet date. The exchange differences arising from the settlement of monetary items or translating monetary items are recognized in the current profit or loss.

The foreign non-currency items measured at fair value are translated in accordance with the exchange rate on the fair value determination date and the exchange difference is booked as current profit or loss. However, for the changes in fair value recognized in the other comprehensive profit or loss, the exchange difference is recognized in the other comprehensive profit or loss.

The foreign non-currency items measured at historical cost are translated in accordance with the exchange rate on the transaction date without the need for a translation again.

Upon preparation of the consolidated financial reports, the assets and liabilities of overseas operating institutions (including the subsidiaries, affiliates in the countries of business operation or those using currencies different from the Company’s) were converted to NTD based on the exchange rate quoted on every balance sheet date. The profits and losses are translated in accordance with the current average exchange rates, and the exchange differences resulted is booked in other comprehensive income (and attributable to the Company’s shareholders and non-controlling equity respectively).

If the Consolidated Company disposes of all interests in a foreign operation, or disposes of a portion of an interest in a subsidiary of a foreign operation but loses control, or disposes of a retained interest in an affiliate of a foreign operation that is a financial asset and is accounted for under the accounting policy for financial instruments, all cumulative translation differences attributable to the Company’s owners and related to the foreign operations will be reclassified to profit or loss.

If the partial disposal of a foreign operating subsidiary does not result in a loss of control, the accumulated exchange differences are reattributed to the noncontrolling interest of the subsidiary on a pro rata basis and are not recognized in profit or loss. In any other event of partial disposal of an overseas operating institution, the accumulated difference in foreign exchange was reclassified to profit and/or loss pro rata to the percentage of disposal.

(6) Inventory

General Inventory

General Inventory includes raw materials, supplies, finished goods and work-inprocess. General Inventory is valued in accordance with the lower of cost or net cash value. When comparing cost and net cash value, except for the homogeneous inventories, it is based on the itemized lower of cost or net cash value. Net realizable value refers to the estimated sale price under normal circumstances net of the estimated cost needed to complete the project and the estimated expenses needed to complete the sale. The cost of general inventory is calculated using the weighted average method.

105 -

Land under construction

Land under construction is recorded at acquisition cost. Land under construction represents land that has been invested but not yet constructed, construction costs and interest capitalized prior to completion of construction, and the cost is allocated using the selling price ratio or the building ratio when the cost is carried forward after revenue is recognized from the sale of the property. Once selected, the method cannot be changed for the same project in the subsequent years.

Land under construction is measured at the lower of cost or net realizable value, and the net realizable value is based on management’s estimate according to the prevailing market conditions.

(7) Investments in Affiliates

The Consolidated Company has a significant influence on an affiliated company that is not a subsidiary.

The Consolidated Company adopts the equity method for investment in affiliates.

Under the equity method, investments in the affiliated companies were originally recognized at cost; the book value after the acquisition date fluctuates along with the distribution of profit or loss from the affiliated company and other comprehensive profit or loss by the consolidated company. Additionally, the change in the interests the Consolidated Company holds in the affiliates was recognized pro rata to the shareholding percentages.

Acquisition costs in excess of the Consolidated Company’s share of net identifiable assets and liabilities (i.e. fair value) in an affiliated company on the date of acquisition are recognized as goodwill. This goodwill includes book value of the investment and is not amortized. Share of net identifiable assets and liabilities (i.e. fair value) in an affiliated company that exceeds acquisition cost on the date of acquisition is recognized as gains for the current year.

When affiliates issue new shares, if the Consolidated Company fails to subscribe stock share proportionally to their shareholding, resulting in changes in shareholding ratio and thus causing changes in net equity investment, the increase or decrease amount should be adjusted to the additional paid-in capital – recognizing changes in net equity of affiliates under the equity method and investment under equity method. If the Consolidated Company’ did not subscribe to the new shares pro rata to the shareholding percentages and led to a decrease of the shareholding percentages subscribed to or obtained from the affiliate, nevertheless, the amount of other comprehensive income so recognized was reclassified pro rata to the decrease ratio in the affiliate. The accounting management was on the grounds same as the grounds the affiliate must comply with if it directly disposed assets or liabilities. If the aforementioned adjustment must be debited into capital reserve where the balance of capital reserve yielded by the investment in equity method, the difference was debited as retained earnings.

In the event that the Consolidated Company’s shares of loss in the affiliates equal to or exceed its equity in the affiliates (including the book value of investment in the affiliates in equity method and other long-term interest of the Consolidated Company’ in the investment composition of the affiliates), the Consolidated Company’ discontinued recognition of the further losses. The Consolidated Company

106 -

recognized extra losses and liabilities only in the event of occurrence of legal obligations, presumed obligations or within the scope that the Consolidated Company’ had made payment on behalf of the affiliate.

When assessing impairment, the consolidated company has the overall book value (including goodwill) of the investment deemed as a single asset when comparing the recoverable amount and the book amount in order to conduct impairment testing. The recognized impairment loss is an integral part of the book amount of the investment. Any reversal of the impairment loss can be recognized within the range of the recoverable amount of the subsequently increased investment.

The Consolidated Company ceases to adopt the equity method from the date its investment ceases to be an affiliate, and its retained interest in the former affiliate is measured at fair value. The difference between the fair value and the disposal price and the carrying amount of the investment on the date of cessation of the equity method is recognized in profit or loss for the current period. Furthermore, all relevant amounts relevant to the affiliates recognized in other comprehensive income were managed on the accounting grounds same as the grounds which it should comply with if the affiliates directly disposed the relevant assets or liabilities. If the investment in affiliates become an investment in the joint venture, or the investment in the joint venture becomes an investment in affiliates, the consolidated company will continue using the equity method and will not have the reserved equity remeasured.

The profit or loss resulting from the countercurrent, downstream and sidestream transactions between the consolidated company and the affiliated company is recognized in the consolidated financial statement within the range that is irrelevant to the consolidated company’s interest in the affiliated company.

(8) Property, Plant and Equipment

Real property, plant and equipment are recognized as costs, and they will be measured by the amount after the costs less the amount of accumulated depreciation and accumulated impairment losses afterwards.

Those real estate, plant buildings, equipment & facilities under construction were recognized at the amount of the costs after deducting the loss in the accumulated impairment. Costs include professional service expanses and loan costs that meet the capitalization conditions. When such assets are completed and reach expected use status, such assets will be classified to proper items under real property, plant and equipment and the provision of depreciation shall begin.

The depreciation of each material part of real estate, plants, and equipment should be appropriated independently in accordance with the useful year and a straight-line method. The Consolidated Company shall at least inspect the estimated service life, residual value and depreciation method by the day of the end of each fiscal year and postpone the effect of applying estimated accounting changes.

In the case of delisting real estate, plants, and equipment, the difference between the net disposal price and the book value of the asset is recognized in profit or loss.

107 -

(9) Investment Property

Investment property is real estate held to earn rentals or for capital appreciation or both (including property in the process of construction that meets the definition of investment property). Investment property also includes land held for future use that is currently undetermined.

Self-owned investment property is initially measured at cost (including transaction costs) and subsequently measured at cost less accumulated depreciation and accumulated impairment losses.

All investment property is depreciated on a straight-line basis.

In removing investment property, the difference between the net proceeds of disposal and the book value shall be recognized as income.

(10) Intangible asset
Acquired separately

The intangible asset with limited useful life acquired separately was originally measured at cost and subsequently measured at cost, net of accumulated amortization and accumulated impairment losses. Depreciation is recognized using the straight-line method for intangible asset. The estimated useful lives, residual values and depreciation method are reviewed at the end of each yearly reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Intangible asset with indefinite useful lives is measured at cost net of accumulated impairment losses.

2. Derecognition

In removing intangible assets, the difference between the net proceeds of disposal and the book value shall be recognized as income.

(11) Impairment of tangible and intangible assets (except for goodwill).

The consolidated company at each balance sheet date is to assess whether there is any indication of the impairment occurring to the tangible and intangible assets (except for goodwill). If there is any indication of impairment occurring, the recoverable amount of the asset should be estimated. If the recoverable amount of an individual asset cannot be estimated, the consolidated company is to estimate the recoverable amount of the respective cash-generating unit. The common asset is amortized to each cash-generating unit in accordance with a consistent and reasonable sharing basis.

The intangible asset with indefinite useful lives and not yet available for use should be tested for impairment at least annually or should be tested when there is an indication of impairment.

The recoverable amount is the fair value net of cost or the value in use whichever is higher. When the recoverable amount of an individual asset or cashgenerating unit is less than its book amount, the book amount of the asset or cashgenerating unit should be reduced to its recoverable amount. The impairment loss is recognized in the profit or loss.

108 -

generating unit without recognizing the impairment loss in prior periods (net of amortization or depreciation). The reversed impairment loss is recognized in the profit or loss.

(12) Non-current assets held for sale

The carrying amount of non-current assets is classified as held for sale when it is expected to be recovered primarily through a sale transaction rather than through continued use. The non-current assets complying with the classification must be available for immediate sale in the current state and the probability of the sale must be highly likely. When the appropriate level of the management commits to sell the plan asset and the sale is expected to be completed within one year from the date of classification, the probability of the sale is highly likely.

The classified held-for-sale non-current asset is measured at book amount or fair value net of the selling cost whichever is lower and stop the appropriate depreciation for such assets.

(13) Financial instrument

When the Consolidated Company has become a party to the instrument contract, the financial assets and financial liabilities are to be recognized in the consolidated balance sheet.

For the initial recognition of the financial assets and financial liabilities, if the financial assets or financial liabilities are not measured at fair value through profit or loss, it is measured at fair value plus transaction cost that is directly attributable to the acquisition or issuance of financial assets or financial liabilities. The transaction cost directly attributable to the acquisition or issuance of financial assets or financial liabilities that are measured at fair value through profit or loss is immediately recognized in the profit or loss.

1. Financial asset

The regular way of purchase or sale of financial assets are recognized and derecognized based on the accounting on the transaction date.

(1) Classification of measurement

The types of financial assets held by the Company are financial assets at fair value through profit or loss, financial assets at amortized cost, and investments in equity instruments at fair value through other comprehensive income.

109 -

A. Financial assets at fair value through profit and loss

Financial assets at fair value through income statement included mandatory fair value through income statement. Financial instruments designated at fair value through income statements included the investment of equity instruments not designated at fair value through other comprehensive income and those not conforming to the standard of debt instruments on the basis of cost after amortization or at fair value through other comprehensive income.

The financial assets measured at fair value though profit or loss is measured at fair value; also, the profit or loss of revaluation (including any dividend or interest arising from the financial asset) is recognized in the profit and loss. Fair value is determined in the manner described in Note 28.

B. Financial assets based on cost after amortization

If the financial assets of the Company met both of the following conditions, classify as financial assets on the basis of cost after amortization:

a. Financial assets held under particular mode of operation and the purpose of holding is for the collection of cash flow from contracts; and
b. Cash flow generated on particular dates deriving from the contacts and the cash flow is wholly for the payment of principal and interest accrued from the outstanding amount of the principal.

Financial assets on the basis of cost after amortization (including cash and cash equivalents and accounts receivable on the basis of cost after amortization) shall be determined for the total book value under the effective interest rate method after the initial recognition net of the cost of any impairment after amortization for measurement. Any exchange gains or loss will be recognized as income.

Interest income will be the product of effective interest rate and total book value of financial assets except under the following two conditions:

a. The interest income of financial assets procured or initiated under credit impairment will be the product of the effective interest rate after credit adjustment and the cost of financial assets after amortization.
b. Financial asset that has subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset.
110 -

Cash equivalents include time deposits that are highly liquid, readily convertible into fixed amount of cash with minimal risk of changes in value within 3 months from the acquisition date and are used to meet short-term cash commitments.

C. Investment of equity instruments at fair value through other comprehensive income

The Company may make an irrevocable choice at the time of initial recognition for designating the investment of equity instruments not available-for-sale and not recognized by the acquirer under business merger and acquisition or with consideration at fair value through other comprehensive income for measurement.

The investment of equity instruments at fair value through other comprehensive income is measured at fair value. Subsequent changes in fair value will be recognized as other comprehensive income and accumulated into other equity. In the disposal of assets, accumulated gains or loss shall be directly transferred to retained earnings without classification as income.

The dividend of the investment of equity instruments at fair value through other comprehensive income shall be recognized as income when the right of the Company in the collection of dividends is ascertained, unless the dividend is obviously representing the recovery of the cost of investment in part.

(2) Impairment of financial assets

The Company assesses financial assets (including accounts receivable) measured at amortized cost at each balance sheet date based on expected credit losses.

Allowance for loss is recognized for accounts receivable based on the expected credit loss over their life. Other financial assets shall be evaluated for any significant increase of risk from the day of initial recognition. If none is found, recognize for provision for anticipated credit loss along a period of 12 months. If it is, recognize for provision of anticipated credit risk within the perpetuity of the assets.

Anticipated credit loss is the weighted average loss of credit on the basis of the weight of the risk of default. Anticipated credit loss in a period of 12 months means the expected loss of credit from the financial instruments within 12 months due to default. Anticipated credit loss with the perpetuity of the financial instruments means the expected loss of credit from the financial instruments within the perpetuity of these financial instruments.

111 -

All impairment of financial assets is recognized through the reduction of the book value of the provisioned account. However, the provision for loss of investment of debt instruments at fair value through comprehensive income shall be recognized as other comprehensive income without the reduction of its book value.

(3) The derecognition of financial assets

The Company’s financial assets are derecognized only when the contractual rights from the cash flows of a financial asset becomes invalid, or when the financial assets are transferred and almost all the risks and rewards of the asset ownership have been transferred to other enterprises.

When a particular entry of financial assets measured at amortized cost is removed, the difference between its book value and consideration shall be recognized as income. When investments in debt instruments measured at fair value through other comprehensive income are derecognized as a whole, the difference between the carrying amount and the sum of the consideration received plus any cumulative gain or loss recognized in other comprehensive income is recognized in profit or loss. When particular equity instruments measured at fair value through comprehensive income are entirely derecognized, the accumulated gains of loss shall be directly transferred to retained earnings without being classified as profit or loss.

2. Equity instrument

The debt and equity instruments issued by the Company are classified as financial liabilities or equity pursuant to the contractual agreements and the definition of financial liabilities and equity instruments.

An equity instrument issued by the Company is recognized for an amount after deducting the direct issuing cost from the proceeds collected.

The Company’s equity retrieved is debited or credited to the equity. The Company’s equity purchased, sold, issued, or cancelled is not recognized in the profit or loss.

Financial liability
(1) Subsequent measurement

All financial liabilities are evaluated at the amortized cost using the effective interest method.

(2) Derecognition of financial liabilities

When derecognizing financial liabilities, the difference between the book amount and the consideration paid (including any transferred noncash assets or assumed liabilities) is recognized as profit or loss.

112 -

(14) Liability reserve

The recognized liability reserve amount is with the risk and uncertainty of the obligation considered, and it is the optimum estimate of the expenditure required to settle the obligations on the balance sheet date. Provision for liabilities shall be measured based on the discount value of the estimated cash flow for the settlement of obligation.

Warranty

Product warranties and warranties that promise to customers that the delivered product is as specified in the contract and will work as specified in the contract, shall be measured based on management’s best estimate on the cost to settle the consolidated company’s obligation, and such warranties shall be recognized upon recognition of revenue from the corresponding products.

(15) Recognition of revenue

The consolidated company, after identifying the performance obligations, had the transaction price amortized to each performance obligation and recognized as income when the performance obligations were fulfilled.

Commodity sales revenue

Revenue from merchandise sales is derived from sales of electronics, electrochemicals, telecommunications, electrical materials, information products. The Consolidated Company recognizes revenue and accounts receivable at the point of delivery of products and audio products to the customer’s designated location, at the time of shipment or at the time of pickup by the customer, when the customer has the right to set the price and use the products and has the primary responsibility for reselling the products and bears the risk of obsolescence of the products.

Labor revenue

Labor service income is recognized at the time the service is provided.

Revenues yielded by the labor services rendered in accordance with the contract were recognized based on the progress degrees set forth under the contract. The progress degrees set forth under the contract were determined in the following manners:

(1) Revenue from freight transportation is recognized when the trip is completed and the cargo is delivered to its destination.
(2) Rental income from warehousing is recognized on an accrual basis over the period in which the services are rendered.
Licensing revenues

Royalty received is determined based on the actual sales volume for trademark licensing transaction.

(16) Leases

The Company assesses whether or not the arrangement is (or includes) a lease arrangement on the agreement date

The Company is the lessor.
113 -

When the lease term is to have all risks and returns attached to the ownership of assets transferred to the lessee, it is classified as a financing lease. All other leases are classified as operating leases.

Lease payments for operating leases upon deduction of lease incentives are recognized as income on a straight-line basis in relevant lease periods. Initial direct costs generated in the acquisition of operating leases are added to the underlying asset carrying amount and recognized as expenses on a straightline basis in lease periods.

The Company is the lessee.

Except for recognizing low-value asset leases applying to exemption and lease payments for short-term leases being recognized as an expense on a straight-line basis over the lease term, other leases will be recognized as rightof-use assets and lease liabilities at the lease commencement date.

The right-of-use asset is measured at cost (including the amount equal to the lease liability at its initial recognition, lease payments made before the commencement of the lease less any lease incentives received, any initial direct costs incurred by the lessee, and an estimate of costs to be incurred by restoring the underlying asset to the condition required) less any depreciation and any accumulated impairment losses. Additionally, the cost is subsequently adjusted for any remeasurement of the lease liability.

Right-of-use assets are depreciated on a straight-line basis over the period from the commencement date of the lease to expiration of its useful life or expiration of the lease term, whichever date is earlier.

Lease liabilities are measured at the present value of the lease payments (including fixed payments). If the implied interest rate of the lease is easily determined, the lease payments will be discounted to their present value using that interest rate. If such interest rate is not easily determined, the incremental borrowing rate will be used.

Subsequently, the lease liabilities are measured at amortized cost using the effective interest method, and the interest expenses are amortized over the lease term. If changes in indices or rates utilized to determine lease payments lead to changes in future lease payments, the Company should remeasure lease liabilities and adjust right-of-use assets correspondingly. However, if right-ofuse asset carrying amounts have already dropped to zero, remaining remeasurement amounts are recognized as profit or loss. Lease liabilities are presented separately in the balance sheet.

(17) Borrowing costs

Borrowing costs directly belonging to acquiring, building or producing assets that meet the requirements are part of the costs of such assets until the completion of all necessary activities that the assets reaching the status of expected use or sale.

In addition to the transaction stated in the preceding paragraph, all other loan costs are recognized as profit and loss upon occurring.

114 -

(18) Employee welfare

Short-term employee benefits

Liabilities relating to short-term employee benefits are measured by the non-discounted amount of the expected payment in exchange for employee services.

2. Post-employment benefits

Under the defined contribution pension plan, the pension amount appropriated during the service years of the employees is recognized as an expense.

The determined cost of benefit for defined benefit retirement plan (including the cost of service, net interest, and reevaluation) is based on the actuary of projected unit method. The net interests of the service cost (including the service cost for the current period) and net defined benefit liability (asset) are recognized as employee benefit expenses when they occur. The value of second measurement (including the profits and loss under actuary and the return on assets of the plan net or interest) shall be recognized as other comprehensive incomes and as retained earnings, if realized. No reclassification as profits and loss in subsequent periods.

Net defined benefit liability (asset) is the appropriation deficit (surplus) of the defined benefit pension plan. Net defined benefit asset shall not exceed the refund of the appropriated fund or decrease the present value of appropriation of fund in the future.

3. Termination benefits

Consolidated company has resignation benefit liability recognized when the resignation benefit contract cannot be revoked or when recognizing the related reorganization cost (whichever is sooner).

(19) Share-based payment arrangement

- Equity Settled Share based Payment Agreement to Employees

For equity-settled share-based payment agreement, expenses are recognized on a straight-line basis over the vesting period based on the fair value of the equity instruments at the date of grant and the best estimate of the number of shares expected to be vested, with a simultaneous adjustment to capital surplus – employee stock options. If gain is realized as of the day of transfer, recognize as expenses in full amount as of the transfer day.

The Consolidated Company revises the estimated number of equity instruments expected to be vested at each balance sheet date. If the original estimate is revised, the effect is recognized in profit or loss so that the accrued expenses reflect the revised estimate, with a corresponding adjustment to capital surplus – employee stock options.

115 -

(20) Income tax

Income tax expense is the sum of the current income tax and deferred income

tax.

1. Income tax expenses in the current period

The Consolidated Company determines income (loss) for the period in accordance with the regulations enacted by the income tax reporting jurisdictions and calculates income tax payable (recoverable) accordingly.

Additional income tax on unappropriated earnings is calculated in accordance with the provisions of the Income Tax Act of the Republic of China, to be recognized in the year of the shareholder resolution meeting.

The adjustment to prior period income tax payable is booked as current income tax.

2. Deferred tax

Deferred tax is computed in accordance with the temporary differences between the book value of assets and liabilities and the tax bases of taxable income.

Deferred tax liabilities are generally recognized in accordance with all taxable temporary differences. Deferred tax assets are recognized when there are likely to have taxable income available for deductible temporary difference or loss credit.

All taxable provisional differences relevant to the investment in subsidiaries and affiliates were recognized as deferred income tax liabilities, except an event while the Consolidated Company’ could control the time point of recovery of the control over the provisional difference or while the said provisional difference would be very likely not recoverable in the foreseeable future. The deductible temporary differences related to such investments are recognized as deferred income tax assets when there is likely a sufficient taxable income available for realizing a temporary difference and within the expected reverse in the foreseeable future.

The book amount of deferred income tax asset must be reviewed at each balance sheet date. The book amount of those that no longer have any sufficient taxable income to recover all or part of the asset, should be adjusted down. Those that are not originally recognized as deferred income tax assets should also be reexamined at each balance sheet date. The book amount of those that are likely to generate taxable income in the future for the recovery of all or part of its assets should be adjusted up.

Deferred income tax assets and liabilities are measured in accordance with the expected liability liquidation or the tax rate in the period when the asset is realized. The tax rate is based on the tax rate and tax laws that are legislated or substantively legislated at the balance sheet date. The measurement of deferred income tax liabilities and assets reflects the tax consequence resulted from the book value of the assets or liabilities expected to be recovered or liquidated on the balance sheet date.

Current and deferred income tax for the year
116 -

Current and deferred income taxes are recognized in the profit or loss, except for the current and deferred income taxes related to the items recognized in other comprehensive profit or loss or directly included in the equity are recognized in the other comprehensive profit or loss or directly included in the equity.

5. Main source of significant accounting judgment, estimates and assumptions uncertainty

When adopting accounting policy, the management of the Company shall make related judgments, estimations, and assumptions for information that cannot be easily retrieved from other sources based on historical experiences and other relevant factors. Actual results may differ from the estimates.

The Company has taken the economic impact of the coronavirus pandemic into consideration for significant accounting estimates, and management will review the estimates and underlying assumptions on an ongoing basis. If the amendment affects only the current estimates, it is recognized in the current period. If the amendment of accounting estimates affects both current and future periods, it is recognized in the respective current and future periods.

6. Cash and cash equivalents

and future periods. Cash and cash equivalents
Cash on hand and working capital Bank checks and demand deposits Cash equivalents (Investment with the original maturity date within three months) Bank time deposit Bonds under repurchase agreement	December 31, 2020 $ 4,777 768,272 11,000 50,000 $ 834,049	December 31, 2019
			$ 3,163 505,753 595,660 59,960 $ 1,164,536

The interest rate ranges for bank deposits and bonds with repurchase agreements as of the balance sheet date were as follows:

the balance sheet date were as follows:
Bank time deposit Bonds under repurchase agreement	December 31, 2020 0.04%~0.41% 0.25%	December 31, 2019
		0.09%~2.47% 2.25%~2.50%

7. Financial assets based on cost after amortization

Current Domestic investment Time deposit with the original maturity date over three months Reserve account demand deposit	December 31, 2020 $ 312,907 9,146 $ 322,053	December 31, 2019	December 31, 2019
			$ 239,840 9,627 $ 249,467

(Continued on next page)

117 -

(Continued from previous page)

Non-current Domestic investment Mortgaged time deposit	December 31, 2020 $ 27,000	December 31, 2019	December 31, 2019
			$ 27,000

(1) As of December 31, 2020 and 2019, the interest rate ranges for time deposits with original maturities over 3 months were 0.52% to 0.72% and 2.55% to 2.75% per annum.
(2) As of December 31, 2020 and 2019, the interest rate range of pledged time deposits was 0.10% to 0.12% and 0.13% to 0.22% per annum, respectively.
(3) For information on pledges of financial assets measured at amortized cost, see Note 30.
Financial assets at fair value through other comprehensive profit or loss

Non-current Investment of equity instruments at fair value through other comprehensive income	December 31, 2020 $ 425,208	December 31, 2019	December 31, 2019
			$ 521,384

(1) Investment of equity instruments at fair value through other comprehensive income

Non-current Domestic investment Unlisted/OTC Common stock of Nucom International Corporation Common stock of Chinese Television System Inc. Common stock of WK ASSOCIATES LTD. Common stock of Pushi Venture Capital Co., Ltd. Common stock of WK VIII ASSOCIATES LTD. Common stock of MICROMAX INTERNATIONAL CORP. Common stock of A-KIN ALLIANCE LOGISTICS CO., LTD. Subtotal	December 31, 2020 $ 36,730 103,392 4,671 7,084 4,352 12,471 1,151 169,851	December 31, 2019	December 31, 2019
			$ 35,537 122,219 7,123 10,258 5,878 12,234 1,174 194,423

(Continued on next page)

118 -

(Continued from previous page)

Foreign investment Unlisted stocks Common stock of GRACE THW HOLDING Subtotal	December 31, 2020 $ 255,357 255,357 $ 425,208	December 31, 2019	December 31, 2019
			$ 326,961 326,961 $ 521,384

The consolidated company invested in the aforementioned common shares of companies in line with its long-term investment strategic objective with the anticipation of return from long-term investment. The management of the consolidated company holds that the short-term fluctuation in the fair value of these investments shall be recognized as income or loss and is not congruent with the aforementioned long-term investment plan, therefore they chose to designate these investments as financial assets at fair value through other comprehensive income.

9. Notes receivable, accounts receivable, and other accounts receivable

Notes receivable Measured on the basis of cost after amortization Total carrying amount – non- related parties Total carrying amount – related parties Less: Allowance for losses Trade receivable Measured on the basis of cost after amortization Total carrying amount – non- related parties Total carrying amount – related parties Less: Allowance for losses Other receivables Other receivables – non-related parties Other receivables – related parties Less: Allowance for losses Overdue receivables(Note 16) Overdue receivables Less: Allowance for losses	December 31, 2020 $ 117,529 - ( 4,114) $ 113,415 $ 498,301 5,437 ( 44,230) $ 459,508 $ 13,853 1 ( 485) $ 13,369 $ 32,713 ( 30,137) $ 2,576	December 31, 2019	December 31, 2019
	( ( ( (	( ( ( (	$ 111,820 4 3,914) $ 107,910 $ 543,520 989 40,748) $ 503,761 $ 14,835 27 441) $ 14,421 $ 32,812 30,236) $ 2,576

The average credit period for product sales ranges from 30 to 120 days, and no interest is charged on accounts receivable.

119 -

The Consolidated Company will recognize the lifetime expected credit losses as loss allowance for accounts receivable. The full lifetime expected credit losses are calculated using Provision Matrix, which considers the historical default records and current financial status, industry economic conditions, as well as GDP forecast and industry outlook. Due to the historical experience of credit losses of the consolidated companies, there is no significant difference in the loss patterns of different customer groups. Therefore, the provision matrix does not further distinguish the customer base, and only sets the expected credit loss rate based on the overdue days of receivables.

If there is evidence that the counterparty is facing serious financial difficulties and the consolidated company cannot reasonably expect the recoverable amount back, the consolidated company will directly write off the relevant accounts receivable, but will continue its recourses, and the amount recovered will be recognized in profit or loss.

Consolidated companies measure loss allowance of receivables based on provision matrix as follows:

December 31, 2020

Total book value Allowance for loss (expected credit loss of the given duration) Amortized cost	Not overdue	Not overdue	Overdue 1 to 30 days	Overdue 1 to 30 days		Overdue 31 to 60 days		Overdue 61 to 90 days	Overdue over 90 days $ 32,713 ( 30,137) $ 2,576	The counterparty has signs of default	The counterparty has signs of default		Total
	(	$ 596,529 26,656) $ 569,873	(	$ 14,155 2,783) $ 11,372	(	$ 6,715 2,478) $ 4,237	(	$ 1,742 932) $ 810	(	(	$ 15,980 15,980) $ -	(	$ 667,834 78,966) $ 588,868

December 31, 2019

Total book value Allowance for loss (expected credit loss of the given duration) Amortized cost	Not overdue	Not overdue	Overdue 1 to 30 days	Overdue 1 to 30 days		Overdue 31 to 60 days		Overdue 61 to 90 days	Overdue over 90 days $ 32,437 ( 29,861) $ 2,576	The counterparty has signs of default	The counterparty has signs of default		Total
	(	$ 622,865 27,342) $ 595,523	(	$ 30,147 1,378) $ 28,769	(	$ 2,179 534) $ 1,645	(	$ 399 244) $ 155	(	(	$ 15,980 15,980) $ -	(	$ 704,007 75,339) $ 628,668

The expected credit loss rate for each of the above-mentioned ranges is less than 50% for those who are not overdue and those who are less than 60 days overdue, and 50% to 100% for those who are more than 60 days overdue.

Loss allowance of receivables as follows:

Beginning retained earnings Add: Recovery of bad debts written off Add: Impairment loss appropriated in current period Less: Reversal of impairment loss in the period Written-off of the year Foreign currency translation differences Balance, ending		2020 $ 75,339 1,582 1,803 - - 242 $ 78,966	2019 $ 78,604 389 - ( 3,025 ) ( 6 ) ( 623) $ 75,339

120 -

10. Inventory

Inventory
Finished good Work in progress Material Merchandise Inventory in-transit Land under construction	December 31, 2020 $ 415,411 101,696 250,946 610,765 2,516 - $ 1,381,334	December 31, 2019
			$ 371,020 68,008 235,484 563,621 4,071 53,401 $ 1,295,605

Cost of goods sold related to inventories amounted to $5,374,635 thousand and $5,204,174 thousand for 2020 and 2019, respectively. Cost of goods sold included gains of $8,273 thousand and $673 thousand, respectively, on reversal of decline in value of inventories

As of December 31, 2020 and 2019, the allowance for decline in value of inventories and allowance for slow moving amounted to $63,718 thousand and $71,957 thousand, respectively.

The breakdown of land under construction is as follows.

December 31, 2020	December 31, 2020
Prepayment for superficies Construction cost $ - $ - December 31, 2019		Total
		$ -
Prepayment for superficies $ -	Construction cost $ 53,401	Total
		$ 53,401

In order to assist SAMPO CORPORATION in the revitalization of the Group’s assets, SAMPO HOME INC. acquired superficies from SAMPO CORPORATION in the amount of $108,408 thousand in Q2 2015.

The superficies were signed by SAMPO CORPORATION with the North District Office of the National Property Administration of the Ministry of Finance on October 19, 2014. The two parties agreed several superficies located in the Lilin Section of Linkou District, New Taipei City, to be assigned to the Company, and the duration was from October 19, 2014 to October 18, 2084, a total of 70 years.

SAMPO HOME INC. completed the constructions of buildings in the Lilin section of Linkou District in 2020 and 2019, and the management assessed that the purpose was to earn rental. Therefore, after the completion of the constructions, they were transferred from inventories to investment properties, which were $58,462 thousand and $347,360 thousand, respectively.

121 -

11. Subsidiary

(1) Subsidiaries included in the consolidated financial statements

The business entities of the consolidated financial statements are as follows:

Investor	Subsidiary name	Nature of the operation	December 31, 2020	December 31, 2019	Descript ion
SAMPO CORPORATION New Swell International QUANBAO INVESTMENT AMIGO LOGISTICS CORPORATION SAMPO HOME INC.	New Swell International Investment Co., Ltd. (New Swell International) QUANBAO INVESTMENT CO., LTD. (QUANBAO INVESTMENT) Debao Home Appliance Co., Ltd (Sampo Home Appliance) AMIGO LOGISTICS CORPORATION (AMIGO LOGISTICS) SAMPO HOME INC. (SAMPO HOME) SAMPO JAPAN INC. DONGGUAN SAMPO ELECTRONICS CO., LTD. (DONGGUAN SAMPO) AMIGO LOGISTICS CORPORATION NELONG ENTERPRISE CORPORATION LTD. (NELONG Company) SAMPO INTERNATIONAL FOOD SERVICE CO., LTD. (SAMPO FOOD SERVICE) NISSIN GLOBAL LOGISTICS (TAIWAN) CO., LTD. (NISSIN GLOBAL LOGISTICS) AMIGO HOME LIFE CO., LTD. (AMIGO HOME) SAMPO ASSET MANAGEMENT CO., LTD. (SAMPO ASSET MANAGEMENT)	General Investments General Investments Manufacturing of plastic products for home appliances and industrial use Warehousing and transportation Real estate trading, leasing Marketing and Promotion Manufacturing and sale of electrics and electrons equipment Warehousing and transportation Manufacturing and sale of electrics and electrons equipment Food & Beverage Warehousing and transportation Product installation and wholesale of electrics and electronic materials Real estate trading, leasing	100 100 100 49 100 100 70 24 61 100 51 100 100	100 100 100 49 100 100 70 24 61 100 51 100 100	- - - - - - - - - - (1) - -

Description

(1) In March 2019, the board of directors of NISSIN Company resolved to refund $3,100 thousand of share prices in cash in proportion to shareholding for capital reduction. In April 2019, the Board of Directors of NISSIN Company resolved to increase capital by $24,500 thousand and renamed the firm as NISSIN GLOBAL LOGISTICS (TAIWAN) CO., LTD. Since AMIGO LOGISTICS CORPORATION did not subscribe in accordance with the original shareholding percentage, AMIGO LOGISTICS CORPORATION’s shareholding was reduced to 51% after the capital increase.

12. Investment under the equity method

Investment under the equity method
Investments in Affiliates (1) Investments in Affiliates A major affiliated company RECHI PRECISION CO.,LTD.	December 31, 2020 $ 2,843,169 December 31, 2020 $ 2,843,169	December 31, 2019
		$ 2,584,292 December 31, 2019
			$ 2,584,292

122 -

Affiliates of significance

Company name December 31, 2020 December 31, 2019 Listed company RECHI PRECISION CO.,LTD. 28% 28%

For information on the business nature, principal place of business and country of registration of the aforementioned affiliated companies, please refer to Exhibit 4, “Information on Investees, Location, etc.”

Level 1 fair value information of affiliated companies with quoted prices in the open market is as follows.

open market is as follows.
Company name RECHI PRECISION CO.,LTD.	December 31, 2020 $ 2,920,690	December 31, 2019
			$ 3,198,677

The following summarized financial information is based on the consolidated financial report of all the affiliates in conformity with IFRSs and reflected the adjustments made due to the adoption of the equity method.

RECHI PRECISION CO.,LTD.

RECHI PRECISION CO.,LTD.
Current assets non-current assets Current liabilities non-current liabilities Equity Non-controlling interests The consolidated company’s shareholding ratio The equity attributed to the consolidated company Unrealized profits and losses in upstream transactions Goodwill Other adjustments Book value of investment Operating income Net profits of the current year Other comprehensive income Total comprehensive income Dividends received from RECHI PRECISION CO., LTD.	December 31, 2020 $ 20,343,375 9,083,696 ( 13,601,152 ) ( 5,546,112) 10,279,807 ( 1,441,564) $ 8,838,243 28% $ 2,446,349 ( 31 ) 402,671 ( 5,820) $ 2,843,169 2020 $ 19,338,213 $ 722,644 471,130 $ 1,193,774 $ 69,831	December 31, 2019
		$ 17,304,310 9,383,670 ( 10,982,594 ) ( 6,253,485) 9,451,901 ( 1,526,062) $ 7,925,839 28% $ 2,187,459 ( 18 ) 402,671 ( 5,820) $ 2,584,292 2019
		(	$ 20,193,662 $ 649,166 450,600) $ 198,566 $ 167,251

123 -

13. Property, Plant and Equipment

Cost Balance as of January 1, 2020 Additions Disposal Reclassification Net exchange differences Balance as of December 31, 2020 Accumulated depreciation and impairment Balance as of January 1, 2020 Disposal depreciation expense Reclassification Net exchange differences Balance as of December 31, 2020 Net as of December 31, 2020 Cost Balance as of January 1, 2019 Additions Disposal Reclassification Net exchange differences Balance as of December 31, 2019 Accumulated depreciation and impairment Balance as of January 1, 2019 Disposal depreciation expense Reclassification Net exchange differences Balance as of December 31, 2019 Net as of December 31, 2019		Proprietary land		Building		Machinery and equipment		Mold equipment		Transportation equipment		Leasehold improvement		Construction inprogress		Other equipment		Total
		$ 3,761,933 36,536 ( 287,519 ) 27,443 - $ 3,538,393 $ 32,518 - - - - $ 32,518 $ 3,505,875 $ 3,761,933 - - - - $ 3,761,933 $ 32,518 - - - - $ 32,518 $ 3,729,415	(	$ 1,331,165 2,318 ( 266,803 ) - - $ 1,066,680 $ 908,489 192,175 ) 31,730 704 - $ 748,748 $ 317,932 $ 1,284,998 11,280 - 34,887 - $ 1,331,165 $ 875,553 - 32,643 293 - $ 908,489 $ 422,676	(	$ 369,385 782 ( 199 ) - 76 $ 370,044 $ 343,318 199 ) 9,422 - 25 $ 352,566 $ 17,478 $ 365,558 4,043 - - ( 216) $ 369,385 $ 333,470 - 9,934 - ( 86) $ 343,318 $ 26,067	(	$ 422,538 25,268 ( 10,948 ) - - $ 436,858 $ 376,806 170 ) 25,511 - - $ 402,147 $ 34,711 $ 400,152 24,503 ( 2,117 ) - - $ 422,538 $ 346,308 - 30,498 - - $ 376,806 $ 45,732	( (	$ 123,671 14,160 ( 1,481 ) - 18 $ 136,368 $ 69,545 1,350 ) 12,338 - 8 $ 80,541 $ 55,827 $ 120,717 4,601 ( 1,608 ) - ( 39) $ 123,671 $ 58,918 1,608 ) 12,254 - ( 19) $ 69,545 $ 54,126		$ 38,707 2,030 - - 1 $ 40,738 $ 18,886 - 5,118 - ( 1) $ 24,003 $ 16,735 $ 18,124 17,596 - 2,990 ( 3) $ 38,707 $ 17,486 - 1,400 - - $ 18,886 $ 19,821		$ 442,633 488,029 - ( 27,699 ) - $ 902,963 $ - - - - - $ - $ 902,963 $ 103,127 339,506 - - - $ 442,633 $ - - - - - $ - $ 442,633	( (	$ 381,981 9,899 ( 20,532 ) 256 18 $ 371,622 $ 348,837 19,952 ) 11,020 - 6 $ 339,911 $ 31,711 $ 373,754 14,917 ( 6,644 ) - ( 46) $ 381,981 $ 344,411 6,637 ) 11,084 - ( 21) $ 348,837 $ 33,144	( (	$ 6,872,013 579,022 ( 587,482 ) - 113 $ 6,863,666 $ 2,098,399 213,846 ) 95,139 704 38 $ 1,980,434 $ 4,883,232 $6,428,363 416,446 ( 10,369 ) 37,877 ( 304) $ 6,872,013 $ 2,008,664 8,245 ) 97,813 293 ( 126) $ 2,098,399 $ 4,773,614

Depreciation expenses is appropriated in accordance with the straight-line method and the years of useful life illustrated below:

reciation expenses is appropriated in accordance with the of useful life illustrated below:	straight-line method
Building	2–60 years
Main structure	60 years
Mechanical and electrical power equipment	15 years
Engineering System	4 years
Others	2–10 years
Machinery and equipment	3–15 years
Transportation equipment	2–7 years
Mold equipment	2–3 years
Leasehold improvement	2–6 years
Other equipment	2–20 years

There was no indication of impairment of the above listed property, plant and equipment as assessed by the management in 2020 and 2019.

For the amount of property, plant and equipment pledged as collateral for loans, please refer to Note 30.

Please refer to Note 14 for a description of the sale and leaseback of land and buildings in 2020.

124 -

14. Lease agreement

(1) right-of-use asset

agreement right-of-use asset
Carrying amount of right-of- use assets Land Building Transportation equipment Addition of right-of-use assets Depreciation expense of right- of-use assets Land Building Transportation equipment lease liabilities Carrying amount of lease liabilities Current Non-current	December 31, 2020 $ 30,109 214,633 5,732 $ 250,474 2020 $ 70,982 $ 472 70,999 3,539 $ 75,010 2020 $ 111,325 $ 182,223	December 31, 2019
			$ 30,884 215,715 10,988 $ 257,587 2019
			$ 134,481 $ 476 37,499 3,663 $ 41,638 2019
			$ 58,215 $ 202,292

(2) lease liabilities

The range of discount rates for lease liabilities is as follows:

Land Building Transportation equipment	2020 1.50% 1.50% 1.50%	2019
		1.50% 1.50% 1.50%

(3) Important lease activities and terms

The Consolidated Company signed two contracts of superficies to 2 pieces of state-owned land, including land numbers 107 and 108, Lilin Section, Linkou District, New Taipei City, with the North District Office of the National Property Administration of the Ministry of Finance in August 2014. The contract duration is 70 years and the total royalties of $108,408 thousand was paid in full when the lease was signed. In addition to the aforementioned royalties, a monthly land rental calculated based on 3.5% of the announced land price must be paid.

125 -

The Consolidated Company leases certain buildings for plant and office use for a period of 2 to 6 years. Upon termination of the lease term, the Consolidated Company has no preferential right to acquire the leased building and the Consolidated Company shall not sublease or transfer all or part of the subject of the lease without the consent of the lessor.

In order to activate assets, SAMPO CORPORATION sold the land and aboveground buildings in the Dinghu Section of Guishan District, Taoyuan City to a nonrelated party, Genyi Construction Co., Ltd. in July 2020, for a total of $1,781,470 thousand after deducting business tax and intermediary commissions and other related expenses. Subsequently, due to the time required to vacate the original plant, it was leased back for a period of one year and three months. The leaseback transaction resulted in a right-to-use asset of $11,994 thousand and a lease liability of $59,403 thousand. Therefore, the transferred gain on disposal of land and aboveground buildings was $1,371,913 thousand, which was recorded under “Gain on disposal of property, plant and equipment.”

(4) Other lease information

Other lease information
Short-term lease expense Total cash (outflow) of leases		2020 $ 48,281 $ 130,475)		2019
	(		(	$ 96,306 $ 134,919)

The Consolidated Company has elected to apply the recognition exemption to building leases that qualify as short-term leases and does not recognize the related right-of-use assets and lease liabilities for such leases.

15. Investment Property

Investment Property
Cost Balance as of January 1, 2020 From Inventory Reclassification Balance as of December 31, 2020 Accumulated depreciation and impairment Balance as of January 1, 2020 depreciation expense Reclassification Balance as of December 31, 2020 Net as of December 31, 2020		Land $ 96,723 - - $ 96,723 $ 620 1,668 180) $ 2,108 $ 94,615		Building $ 212,760 58,462 - $ 271,222 $ 1,807 4,863 524) $ 6,146 $ 265,076		Total
	(		(		(	$ 309,483 58,462 - $ 367,945 $ 2,427 6,531 704) $ 8,254 $ 359,691

(Continued on next page)

126 -

(Continued from previous page)

Cost Balance as of January 1, 2019 From Inventory Reclassification Balance as of December 31, 2019 Accumulated depreciation and impairment Balance as of January 1, 2019 depreciation expense Reclassification Balance as of December 31, 2019 Net as of December 31, 2019		Land $ - 108,408 11,685) $ 96,723 $ - 695 75) $ 620 $ 96,103		Building $ - 238,952 26,192) $ 212,760 $ - 2,025 218) $ 1,807 $ 210,953		Total
	( (		( (		( (	$ - 347,360 37,877) $ 309,483 $ - 2,720 293) $ 2,427 $ 307,056

The Consolidated Company completed the constructions of buildings in the Lilin section of Linkou District in 2020 and 2019, and the management assessed that the purpose was to earn rental. Therefore, after the completions of the constructions, they were transferred from inventories to investment properties, which were $58,462 thousand and $347,360 thousand, respectively.

The amortized depreciation in on the straight-line basis for its investment in real

estate at 65-year useful life.

The fair values of $579,788 thousand and $603,946 thousand as of December 31, 2020 and 2019, respectively, have not been evaluated by an independent appraiser and are only measured by the Company’s management using Level 3 input values using valuation models commonly used by market participants. Since there was no significant change in real estate transaction prices in the region in 2020 and 2019, the evaluation was made with reference to market evidence of similar real estate transaction prices.

16. Other assets

reference to market evidence of similar real Other assets	estate transaction prices.
Current Prepayment for purchase Prepaid rent Tax credit Prepaid expenses and others Non-current Overdue receivables (Note 9) Prepaid expenses and others	December 31, 2020 $ 290,964 6,721 38,591 87,917 $ 424,193 $ 2,576 15,618 $ 18,194	December 31, 2019
			$ 132,724 8,665 40,651 107,448 $ 289,488 $ 2,576 16,347 $ 18,923

127 -

17. Loans

(1) Short-term borrowings

s Short-term borrowings
Unsecured loans Credit loan	December 31, 2020 $ -	December 31, 2019
			$ 60,000

The interest rate on bank loans for operating turnover was 1.043% in 2019.

(2) Short-term notes payable

Short-term notes payable
Commercial papers payable Less: Discount of short-term notes and bills payable	December 31, 2020 $ - - $ -	December 31, 2019
		(	$ 490,000 215) $ 489,785

The short-term bills payable but not yet due were enumerated below:

December 31, 2020: None

December 31, 2020:None
December 31, 2019 Guarantee/underwriting institutions Commercial papers payable (1) International Bills Finance Corporation Mega Bills Finance Co., Ltd. Mega Bills Finance Co., Ltd.		Face amount $ 200,000 180,000 110,000 $ 490,000	Discounted amount ( $ 115 ) ( 49 ) ( 51) ($ 215)	Carrying amount
					$ 199,885 179,951 109,949 $ 489,785

The interest rate range of short-term bills payable for 2019 was 1.038% to 1.58%.

(3) Long-term borrowings

Bank of Taiwan Bank of Taiwan	Loan Contents Total amount of loans: NTD600,000 thousand Nature of Borrowing: Medium and long-term mortgage loans Loan period: 2017.08.22–2022.07.20 Borrowing interest rate: 1.50% Repayment method: Each loan will be repaid in one lump sum on the agreed settlement date. Total amount of loans: NTD400,000 thousand Nature of Borrowing: Medium and long-term mortgage loans Loan period: 2019.11.25–2020.01.14 Borrowing interest rate: 1.06% Repayment method: Each loan will be repaid in one lump sum on the agreed settlement date.	December 31, 2020	December 31, 2019 $ 600,000 400,000
		$ - -

(Continued on next page)

128 -

(Continued from previous page)

Loan Contents Bank of Taiwan Total amount of loans: NTD100,000 thousand Nature of Borrowing: Medium and long-term mortgage loans Loan period: 2019.12.24–2020.02.04 Borrowing interest rate: 1.06% Repayment method: Each loan will be repaid in one lump sum on the agreed settlement date. Bank of Taiwan Total amount of loans: NTD600,000 thousand Nature of Borrowing. Medium and long-term mortgage loans Loan period: 2020.06.01–2023.05.20 Borrowing interest rate: 1.15% Repayment method: Each loan will be repaid in one lump sum on the agreed settlement date. KGI Bank Total amount of loans: NTD300,000 thousand Nature of Borrowing: Medium-term borrowings Loan period: 2019.1.25–2022.01.25 Borrowing interest rate. 1.22% Repayment method: From 2021.01.25, Repayment of 60 million every 3 months for a total of 5 installments. KGI Bank Total amount of loans: NTD300,000 thousand Nature of Borrowing: Medium-term borrowings Loan period: 2020.10.30–2023.10.30 Borrowing interest rate: 1.08656% Repayment method: From 2022.10.30, Repayment of 60 million every 3 months for a total of 5 installments. Hua Nan Bank Total amount of loans: NTD150,000 thousand Nature of Borrowing: Medium-term borrowings Loan period: 2019.06.21–2021.06.21 Borrowing interest rate. 1.25% Repayment method: Each loan will be repaid in one lump sum on the agreed settlement date. Chang Hwa Bank Total amount of loans: NTD100,000 thousand Nature of Borrowing: Medium-term borrowings Loan period: 2017.07.04–2020.07.03 Borrowing interest rate: 1.40% Repayment method: From 2019.10.04, repayment of 25 million every 3 months for a total of 4 installments. Less: Amount due in one year Long-term borrowings	December 31, 2020 $ - 600,000 - 300,000 - - 900,000 - $ 900,000	December 31, 2019	December 31, 2019
		(	$ 100,000 - 300,000 - 150,000 75,000 1,625,000 575,000) $ 1,050,000

The Consolidated Company provides property, plant and equipment to financial institutions as collaterals for long-term loans, please refer to Note 30 for details of the collaterals.

129 -

18. Others

December 31, 2020 December 31, 2019

Current Other payables Salary and bonus payables Pension benefits payable Insurance payable Advertising payable Electronics disposal expenses payable Expenses payable Others Refund liability (Note 22) Contract liability (Note 22) Others	$ 324,544 9,314 12,037 21,782 20,303 140,831 $ 528,811 $ 303,658 29,969 16,180 $ 349,807	$ 250,820 9,025 11,824 19,049 14,675 139,649 $ 445,042 $ 303,424 49,182 6,572 $ 359,178

19. Liability reserve

Liability reserve
Current Warranty (1) Non-current Warranty (1) Reserve for compensation (2)	December 31, 2020 $ 72,845 $ 7,265 99,216 $ 106,481	December 31, 2019
			$ 69,589 $ 7,174 99,216 $ 106,390

Balance as of January 1, 2020 Appropriated for the year Balance as of December 31, 2020 Balance as of January 1, 2019 Reversal in current year Balance as of December 31, 2019		Warranty $ 76,763 3,347 $ 80,110 $ 79,958 3,195) $ 76,763	Reserve for compensation $ 99,216 - $ 99,216 $ 99,216 - $ 99,216		Total
	(			(	$ 175,979 3,347 $ 179,326 $ 179,174 3,195) $ 175,979

(1) Warranty liabilities reserve is based on the sale of goods contract and it is the best estimated present value of the future economic outflow due to warranty liabilities estimated by the management of the consolidated company. The estimates are based on historical warranty experience and are subject to adjustment due to new raw materials, process changes or other events that affect product quality.
130 -

(2) Please refer to Note 31(2) for the description of reserve for compensation.

Post-employment benefit plans
(1) Defined contribution plans

For the Company, DEBAO HOME APPLIANCE, AMIGO LOGISTICS, NISSIN GLOBAL LOGISTICS, AMIGO HOME, NELONG Company, SAMPO HOME INC., and SAMPO FOOD SERVICE within the consolidated entities, the pension system under the Labor Pension Act is a government-administered defined contribution pension plan, for which 6% of employees’ monthly salaries are contributed to the individual accounts in the Bureau of Labor Insurance.

(2) Defined benefit plan

For the Company, DEBAO HOME APPLIANCE, AMIGO LOGISTICS, the pension system under the Labor Standards Act is a government-administered defined benefit pension plan Pension payment is calculated in accordance with the years of service and the average salary six months prior to the authorized retirement date. These companies have pensions appropriated for an amount equivalent to 4%–15% of the total monthly salary and the fund is deposited in the account with the Bank of Taiwan in the name of the Labor Pension Reserve Committee. If the estimated balance of the special account before the end of the year is not enough to pay for the workers who are expected to meet the retirement requirements in the following year, the difference will be appropriated in one lump sum by the end of March of the following year. The special account has been commissioned to the Bureau of Labor Fund of the Ministry of Labor Affairs for management. The Consolidated Company exercises no influence on the right of the bureau in its investment management strategy.

The amount of defined benefit plan recognized in the consolidated balance sheet is shown below:

is shown below:
Present value of the defined benefit obligations The fair value of plan assets Net defined benefit liability	December 31, 2020 $ 703,213 (299,736) $ 403,477	December 31, 2019
	(	(	$ 721,248 276,410) $ 444,838

Change in net defined benefit liability is shown below

Balance as of January 1, 2019 servicing costs Current service cost Interest expenses (revenues) Recognized in the profit or loss	Present value of the defined benefit obligations $ 716,713 6,077 7,989 14,066	The fair value of plan assets ($ 253,268) - ( 2,899) ( 2,899)	Net defined benefit liability	Net defined benefit liability
		( ( (		$ 463,445 6,077 5,090 11,167

(Continued on next page)

131 -

(Continued from previous page)

Reevaluation Planned ROE (except the amount of net interest) Actuarial (gains) losses – Changes in Demographic Assumptions Actuarial (gains) losses – Change in financial assumptions Actuarial gains – adjustment through experience Recognized in the other comprehensive profit of loss Employer appropriation Benefits paid Paid off Balance as of December 31, 2019 servicing costs Current service cost Interest expenses (revenues) Recognized in the profit or loss Reevaluation Planned ROE (except the amount of net interest) Actuarial (gains) losses – Changes in Demographic Assumptions Actuarial (gains) losses – Change in financial assumptions Actuarial gains – adjustment through experience Recognized in the other comprehensive profit of loss Employer appropriation Benefits paid Balance as of December 31, 2020	Present value of the defined benefit obligations $ - 4,911 27,691 9,717 42,319 ( 3,035) ( 44,936) ( 3,879) 721,248 5,399 5,410 10,809 - 285 17,597 ( 738) 17,144 - ( 45,988) $ 703,213	The fair value of plan assets ( $ 7,763 ) - - - ( 7,763) ( 23,956 ) 3,035 8,441 ( 276,410) - ( 2,163) ( 2,163) ( 8,714 ) - - - ( 8,714) ( 22,610 ) 10,161 ($ 299,736)	Net defined benefit liability
			( $ 7,763 ) 4,911 27,691 9,717 34,556 ( 26,991 ) ( 41,901 ) 4,562 444,838 5,399 3,247 8,646 ( 8,714 ) 285 17,597 ( 738) 8,430 ( 22,610 ) ( 35,827) $ 403,477

The pension fund system of the Consolidated Company contained in the consolidated financial statements is exposed to the following risks due to the “Labor Standards Act”:

Investment risk: The Bureau of Labor Fund of the Ministry of Labor Affairs uses the labor pension fund for investment in domestic and foreign equity securities and debt securities, and as bank deposits through proprietary trade or commissioned third parties. However, the amount attributable to the planned asset of the consolidated company shall not fall below the interest rate offered
132 -

by the banks in the regions or countries of investment for 2-year time deposit as return.

Interest rate risk: The decrease of the interest rate of government bonds and corporate bonds will cause the present value of the defined benefit obligations to go up; however, the return on the debt of the plan assets will go up too; therefore, they will mutually offset the impact on the net defined benefit liabilities.
Salary risk: the calculation of the present value of defined benefit obligation is based on the salaries of the members in the plan of the future. As such, an increase of the salaries of the members of the plan is bound to increase the present value of defined benefit obligation.

The defined benefit obligation of the Consolidated Company contained in the consolidated financial statements is based on the actuarial calculation of the actuary and the major assumption as of the evaluation day is shown below:

Discount rate The expected rate of increase in salaries	December 31, 2020 0.50% 2.00~2.50%	December 31, 2019
		0.75% 2.00~2.50%

In case of reasonable and possible change in the major actuarial assumptions, and other assumptions remained unchanged, the amount of increase (decrease) in the present value of defined benefit obligation will be:

Discount rate Increase by 0.25% Decrease by 0.25% The expected rate of increase in salaries Increase by 0.25% Decrease by 0.25%	December 31, 2020 ($ 17,598) $ 18,241 $ 17,586 ($ 17,060)	December 31, 2019	December 31, 2019
	( (	( (	$ 18,672) $ 19,379 $ 18,727 $ 18,143)

Actuarial assumptions may be inter-related. The possibility of change in specific assumption is not high. The aforementioned sensitivity analysis may not be able to reflect the actual change in the present value of defined benefit obligation.

Amount projected for appropriation in 1 year Average maturity of defined benefit obligation	December 31, 2020 $ 21,980 10–11 years	December 31, 2019
		$ 23,910 10–11 years

Equity
(1) Capital stock

Common share

Average maturity of defined benefit obligation y Capital stock Common share	10–11 years	10–11 years	10–11 years
Authorized number of shares (thousand shares) Authorized capital Number of shares issued with fully paid-in capital (thousand shares) Outstanding capital	December31,2020 1,500,000 $ 15,000,000 387,200 $ 3,872,000	December31,2019
			1,500,000 $ 15,000,000 387,200 $ 3,872,000

133 -
(2) Additional paid-in capital

Additional paid-in capital
For loss make-up, payment in cash or capitalization as equity (1) Treasury stock trade Gain on disposal of assets The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries. Only for loss make-up Changes in net equity in affiliated companies and joint ventures recognized under the equity method (2)	December 31, 2020 $ 34,376 50 2,090 135,183 $ 171,699	December 31, 2019
			$ 14,824 50 2,069 134,431 $ 151,374

Such additional paid-in capital can be used to make up for losses; also, when the Company is without any loss, it can be applied for cash distribution or capitalization. However, it is limited to a certain percentage of the annual paidin capital for the purpose of capitalization.
Such additional paid-in capital is the equity trade effect recognized due to the changes in the subsidiary’s equity when the Company has not actually acquired or disposed the equity of the subsidiary, or the amount of adjustment to the additional paid-in capital of the subsidiary recognized under the equity method.

A reconciliation of the balances of various types of capital surplus for 2020 and 2019 is as follows

2019 is as follows
Balance as of January 1, 2020 Transfer of treasury shares to employees Changes in affiliates and joint ventures recognized under the equity method Dividends distributed to the subsidiaries adjusted to the additional paid-in capital The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries. Balance as of December 31, 2020 Balance as of January 1, 2019 Changes in affiliates and joint ventures recognized under the equity method Dividends distributed to the subsidiaries adjusted to the additional paid-in capital The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries. Balance as of December 31, 2019		Treasury stock trade	Gain on disposal ofassets		Changes in affiliates and joint ventures recognized under the equity method		The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries.			Total
		$ 14,824 3,670 - 15,882 - $ 34,376 $ - - 14,824 - $ 14,824		$ 50 - - - - $ 50 $ 50 - - - $ 50		$ 134,431 - 752 - - $ 135,183 $ 130,748 3,683 - - $ 134,431	(	$ 2,069 - - - 21 $ 2,090 $ 2,135 - - 66) $ 2,069	(	$ 151,374 3,670 752 15,882 21 $ 171,699 $ 132,933 3,683 14,824 66) $ 151,374

134 -

(3) Retained earnings and Dividend Policy

According to the Articles of Incorporation, the policy for the distribution of earnings stated that if there is a surplus after account settlement of the fiscal year, SAMPO shall pay applicable taxes and cover loss carried forward, followed by the allocation of 10% of the remainder as legal reserve, and appropriate for special reserve or reverse special reserve. If there is still a balance, it will be pooled up with the undistributed earnings carried forward from previous years for distribution as shareholder dividend under a proposal prepared by the Board subject to the final approval of the General Meeting of Shareholders. See Note 23, “7. Remuneration to Employees and Directors” for SAMPO’s policy on the distribution of employee and director remuneration under the Articles of Incorporation.

SAMPO’s dividend policy is to distribute dividends to shareholders in cash or in stock, with cash dividends being no less than 10% of the total dividends, in accordance with current and future development plans and taking into account the investment environment, capital requirements and domestic and international competition, and the interests of shareholders.

Legal reserve shall be allocated up to the amount equivalent to the paid-in capital of the Company. Legal reserve could be allocated for covering loss carried forward. If there is no loss, the amount of legal reserve in excess of the paid-in capital by 25% could be allocated as capital stock and paid out as cash dividend.

SAMPO has special reserve appropriated and reversed in accordance with the Jin-Guan-Zhen-Fa-Zi No. 1010012865 Letter, Jin-Guan-Zhen-Fa-Zi No. 1010047490 Letter, Jin-Guan-Zhen-Fa-Zi No. 1030006415 Letter and “Appropriation of Special Reserve Q&A after the Adoption of International Financial Reporting Standards (IFRSs).”

At the shareholders’ meetings held on June 12, 2020 and June 19, 2019, SAMPO resolved to distribute the earnings for the years 2019 and 2018, respectively, as follows.

as follows.
Statutory reserves Cash dividend	Distribution of retained earnings 2019 2018 $ 73,896 $ 66,181 570,600 531,160	Dividend Per Share (NTD)
	2019 $ 73,896 570,600	2019 $ - 1.5	2018
			$ - 1.4

The Board of Directors proposed the following earnings distribution proposal for 2020 on March 24, 2021.

for 2020 on March 24, 2021.
Statutory reserves Cash dividend	Distribution of retained earnings $ 178,645 955,750	Dividend Per Share (NTD)
		$ - 2.5

The earnings distribution proposal for 2020 is pending the resolution of the shareholders’ meeting scheduled to be held in June 2021.

135 -

(4) Special reserves

Special reserves
Beginning retained earnings Reversal of special reserve Disposal of land Disposal of non-current assets held for sale Disposition of subsidiaries Balance, ending	2020 $ 1,688,706 ( 95,918 ) - - $ 1,592,788	2019
		$ 1,917,160 - ( 44,135 ) ( 184,319) $ 1,688,706

(5) Other equity

Exchange differences from the translation of financial statements of foreign operations

operations
Balance, beginning of year Generated in the year Translation differences of foreign operations The shares of profit and/or loss at equity method over the affiliates Other comprehensive income of the current year Balance, end of year	2020 ( $ 305,398 ) ( 2,572 ) 31,708 29,136 ($ 276,262)	2019
		( $ 258,372 ) 51,378 ( 98,404) ( 47,026) ($ 305,398)

Unrealized gain on financial assets at fair value through other comprehensive profit or loss

profit or loss
		2020			2019
Beginning retained earnings		$ 134,923		($	66,138)
Accrued in current year
Unrealized gain or loss
Equity instrument	(	96,170 )			159,073
The shares of profit and/or
loss at equity method
over the affiliates		94,843			5,717
Other comprehensive income of
the current year	(	1,327)			164,790
The accumulated gain/loss from
the disposition of equity
instruments will be
transferred to retained
earnings.			-		36,271
Balance, end of year		$ 133,596		$	134,923

136 -

(6) Non-controlling interests

Non-controlling interests
Beginning retained earnings Net profits for the year Other comprehensive income of the current year Exchange differences from the translation of financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive profit or loss Remeasurement of defined benefit plan The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries. Acquisition of non-controlling interests in subsidiaries Cash dividends paid by subsidiaries Cash capital reduction by subsidiaries Cash capital increase by subsidiaries Balance, end of year		2020 $ 303,057 40,002 296 6 ) 656 21 ) 300 ) 14,910 ) - - $ 328,774		2019
	( ( ( (		( ( ( ( (	$ 276,706 33,899 858 ) 17 ) 1,190 ) 66 - 16,845 ) 13,204 ) 24,500 $ 303,057

(7) Treasury shares

Unit: 1,000 shares/thousand

Cause Number of shares as of January 1, 2020 Decrease Number of shares as of December 31, 2020 Number of shares as of January 1, 2019 Decrease Number of shares as of December 31, 2019 Amount as of January 1, 2020 Decrease in the period: Stock transfer to employees Amount as of December 31, 2020 Amount as of January 1, 2019 Decrease in the period: Stock transfer to employees Amount as of December 31, 2019	Stock transfer to employees 7,800 ( 1,000) 6,800 8,800 ( 1,000) 7,800 $ 124,661 ( 15,980) $ 108,681 $ 140,641 ( 15,980) $ 124,661	Shares of parent company held by subsidiaries 10,432 - 10,432 10,432 - 10,432 $ 484,146 - $ 484,146 $ 484,146 - $ 484,146		Total
	( ( ( (		( ( ( (	18,232 1,000) 17,232 19,232 1,000) 18,232 $ 608,807 15,980) $ 592,827 $ 624,787 15,980) $ 608,807

137 -

In order to protect SAMPO’s credit and shareholders’ interests, the subsidiary held the Company’s shares as of the balance sheet date, and the related information is as follows.

follows.
Subsidiaryname December 31, 2020 QUANBAO INVESTMENT AMIGO LOGISTICS CORPORATION December 31, 2019 QUANBAO INVESTMENT AMIGO LOGISTICS CORPORATION	Shares (thousand shares) 10,050 382 10,050 382		Carrying amount $ 482,468 1,678 $ 484,146 $ 482,468 1,678 $ 484,146	Market price
					$ 261,798 9,945 $ 271,743 $ 202,504 7,693 $ 210,197

On January 8, 2020 and January 17, 2019, the Board of Directors resolved to transfer 1,000 thousand shares of treasury stock to employees in accordance with the measures for transferring treasury stock to employees. The above transfers were completed in February 2020 and February 2019, respectively, and the treasury stock of $15,980 thousand was written off.

SAMPO’s Treasury stock may not be pledged in accordance with the Security and Exchange Law; moreover, it is without the privilege of dividend and voting right. Sampo Corporation’s shares held by subsidiaries are treated as treasury stock and have the same rights as those of ordinary shareholders, except that they are not allowed to participate in the capital increase of Sampo Corporation and have no voting rights.

22. Income

voting rights. Income
Revenue from contracts with customer Commodity sales revenue Transportation Service revenues Licensing revenues Other income		2020 $ 6,639,970 729,374 21,977 278,699 $ 7,670,020		2019
				$ 6,213,094 647,741 17,365 237,809 $ 7,116,009

(1) Description of customer contracts

Commodity sales revenue

Home appliances and electronic products are sold to distributors or through SAMPO’s self-operated stores and online. The Consolidated Company gives price discounts to distributors when they meet the contractual

138 -

requirements. The amount of revenue is based on the most probable amount of the discount considering the distributor’s past orders, and the refund liability (recorded as other current liabilities) is recognized accordingly. Please refer to Note 18. The rest of the products are sold at a fixed price as agreed in the contract.

In accordance with commercial practice, the Consolidated Company accepts returns of home appliances and electronic products for full refund. Considering the experience accumulated in the past, the Consolidated Company estimated the return rate based on the most probable amount and recognized the refund liability (recorded as other current liabilities), please refer to Note 18. Please refer to Note 19 for the description of defective warranty obligations for home appliances and electronic products.

2. Transportation Service revenues

The contracts signed by the Transportation business include two performance obligations: freight transportation and storage rental. Since the time interval between the transfer of goods and services and the customer’s payment does not exceed one year, the significant financial components of the contract consideration are not adjusted. The individual selling prices for freight transportation and storage rentals are determined using the expected cost plus profit method and observable selling prices, respectively, and are used to allocate contractual consideration.

3. Licensing revenues

SAMPO’s trademark licensing is determined based on the actual sales volume for trademark licensing transaction.

(2) Contract balances

volume for trademark licensing Contract balances	transaction.
Accounts receivable (Note 9) Contract liabilities – current (Note 18) Product sales	December 31, 2020 $ 459,508 $ 29,969	December 31, 2019
			$ 503,761 $ 49,182

Revenue from customer contracts is mainly derived from merchandise sales. Under the contracts with customers, the Consolidated Company receives advance payments from customers in advance and records contract liabilities.

23. Net profits of the current year

The net income of the current year includes the following items:

(1) Interest income

Interest income
Bank deposits Financial assets measured at amortized cost Others		2020 $ 2,960 6,192 945 $ 10,097		2019
				$ 5,204 14,104 4,751 $ 24,059

139 -

(2)	Other income
				2020			2019
	Rent revenue		$ 7,235			$	6,652
	Dividend income			8,708			3,339
	Others			38,274			41,187
			$ 54,217			$	51,178
(3)	Other profits and losses
				2020			2019
	Gain (loss) on financial assets
	and liabilities at fair value
	through profit and loss		$	906		$	1,019
	Gain in disposal of real estate,
	plant buildings, equipment &
	facilities			1,371,906			628
	Gain on disposal of non-current
	assets held for sale			-			361,486
	Net foreign exchange loss	(		20,878 )	(		56,570 )
	Lease modification gain			92			25
	Others	(		29,776)	(		19,143)
			$	1,322,250		$	287,445
(4)	Financial costs
				2020			2019
	Interest from bank borrowings		$ 20,099			$	27,045
	Interest on lease liabilities			4,176			2,968
			$ 24,275			$	30,013
(5)	Depreciation and amortization
				2020			2019
	Property, Plant and Equipment		$ 95,139			$	97,813
	right-of-use asset			75,010			41,638
	Investment Property			6,531			2,720
	Intangible asset			39,628			42,998
	Total		$ 216,308			$	185,169
	Consolidation of depreciation
	expenses based on functions
	Operating cost		$ 112,580			$	89,290
	Operating expenses			64,100			52,881
			$ 176,680			$	142,171
	Consolidation of amortization
	expenses based on functions
	Operating expenses		$ 39,628			$	42,998

140 -

(6) Employee benefits expenses

Employee benefits expenses
Post-employment benefits (Note 20) Defined contribution plans defined benefit plan Termination benefits Other employee benefits Total employee benefits expenses Consolidation based on functions Operating cost Operating expenses		2020 $ 33,027 8,646 41,673 2,467 1,152,291 $ 1,196,431 $ 599,089 597,342 $ 1,196,431		2019
				$ 31,963 11,167 43,130 2,621 1,033,672 $ 1,079,423 $ 588,861 490,562 $ 1,079,423

(7) Remuneration to the employees and the directors

SAMPO appropriates no less than 1% and no more than 3% of the profits before tax and before the distribution of employees’ and directors’ remuneration for the year as Remuneration to employees and directors The remuneration to employees and directors for 2020 and 2019 was resolved on March 24, 2021 and March 17, 2020 by the board of directors as follows.

Estimate on ratio

the board of directors as follows. Estimate on ratio
Remuneration to employees Remuneration to directors Amount	2020 2.20% 0.80%	2019
		2% 1%

Amount
Remuneration to employees Remuneration to directors	2020 C a s h $ 45,577 16,574	2019
		C a s h
		$ 15,649 7,825

If there are still changes in the amount specified in the consolidated financial statement after announcement, proceed to the accounting of change and adjusted for booking in the next fiscal year.

There was no difference between the actual amount of employees’ and directors’ remuneration paid for 2019 and 2018 and the amount recognized in the consolidated financial statements in 2019 and 2018.

141 -

For information on remuneration to employees and directors as resolved by the Board of Directors in 2021 and 2020, please visit the Market Observation Post System of the Taiwan Stock Exchange.

24. Income tax

(1) The main composition items recognized as income tax expenses in income

2020 2019 Income tax expenses in the current period Accrued in current year $ 353,422 $ 24,865 Additional levy on undistributed earnings 1,464 2,301 Prior year adjustment 1,597 ( 11,887) 356,483 15,279 Deferred tax Accrued in current year (107,872) 23,664 Income tax expense recognized in the profit or loss $ 248,611 $ 38,943 Adjustment of accounting income and income tax expense are as follows: 2020 2019 Profit before tax $ 2,084,606 $ 811,805 Income tax expense of net income before tax at the statutory tax rate (20%) $ 416,921 $ 162,361 Non-deductible expenses and losses for tax purposes 604 10,783 Non-taxable income ( 310,265 ) ( 116,882 ) Additional levy on undistributed earnings 1,464 2,301 Unrecognized loss carryforward ( 7,417 ) 6,904 Unrecognized temporary differences 4,086 ( 22,687 ) Land revaluation increment tax 141,958 - The prior year’s income tax expenses adjusted in the current period 1,597 ( 11,887 ) Effect of variation in taxation rates on the consolidation of the group and individual entities. ( 337) 8,050 Income tax expense recognized in the profit or loss $ 248,611 $ 38,943		2019
	$ 811,805 $ 162,361 10,783 ( 116,882 ) 2,301 6,904 ( 22,687 ) - ( 11,887 ) 8,050 $ 38,943

The tax rate applicable to the subsidiaries in the China is 25%; the tax rates applicable to other subsidiaries are based on the tax rate applicable to the respective jurisdictions.

142 -

(2) Income tax recognized in the other comprehensive profit or loss

		2020		2019
Deferred tax
Generated in the year
- Remeasurement of
defined benefit plan	($	600)	$	1,086
Income tax recognized in the
other comprehensive profit
or loss	($	600)	$	1,086
Current income tax asset and liability
	December 31, 2020		December 31, 2019
Current income tax asset
Tax refund receivable	$	490	$	493
Current Tax Liability
Payable income tax	$	97,865	$	16,173

(3) Current income tax asset and liability

(4) Deferred income tax assets and liabilities

Changes in the deferred income tax assets and liabilities are as follows:

2020

2020
Deferred tax assets Temporary difference Loss allowance Inventory Investment under the equity method right-of-use asset Other payables Vacation benefit payable Liability reserve Net defined benefit liability Employee benefits payable Other non-current liabilities Exchange gain Others Total Deferred tax liabilities Temporary difference Land revaluation increment tax	Balance, beginning of year	Recognized in the profit or loss $ 506 ( 1,842 ) 15,200 ( 188 ) 15,130 ( 681 ) 669 ( 7,523 ) 7 ( 11 ) ( 4,605 ) 89 $ 16,751 ($ 91,121)	Recognized in the other comprehensive profit of loss $ - - - - - - - ( 600 ) - - - - ($ 600) $ -	Balance, end of year
	$ 9,971 11,943 ( 47,948 ) 188 137,313 5,794 35,196 ( 10,720 ) 101 13 2,236 534 $ 144,621 $ 965,922			$ 10,477 10,101 ( 32,748 ) - 152,443 5,113 35,865 ( 18,843 ) 108 2 ( 2,369 ) 623 $ 160,772 $ 874,801

143 -

2019

2019
Deferred tax assets Temporary difference Loss allowance Inventory Investment under the equity method right-of-use asset Other payables Vacation benefit payable Liability reserve Net defined benefit liability Employee benefits payable Other non-current liabilities Exchange gain Loss deduction Others Total Deferred tax liabilities Temporary difference Land revaluation increment tax	Balance, beginning of year $ 10,536 11,370 ( 73,983 ) - 143,694 4,932 35,835 ( 2,524 ) 43 14 ( 2,406 ) 39,276 412 $ 167,199 $ 991,474	Recognized in the profit or loss ( $ 565 ) 573 26,035 188 ( 6,381 ) 862 ( 639 ) ( 9,282 ) 58 ( 1 ) 4,642 ( 39,276 ) 122 ($ 23,664) ($ 25,552)	Recognized in the other comprehensive profit of loss $ - - - - - - - 1,086 - - - - - $ 1,086 $ -	Balance, end of year
				$ 9,971 11,943 ( 47,948 ) 188 137,313 5,794 35,196 ( 10,720 ) 101 13 2,236 - 534 $ 144,621 $ 965,922

(5) Unused loss carryforwards not recognized in the consolidated balance sheet as deferred income tax assets

deferred income tax assets
Loss deduction 2020 Annual dues 2021 Annual dues 2022 Annual dues 2023 Annual dues 2024 Annual dues 2025 Annual dues 2026 Annual dues 2027 Annual dues 2028 Annual dues 2029 Annual dues	December 31, 2020 $ - - 90,910 53,939 49,505 19,625 10,896 37,019 17,216 44,161 $ 323,271	December 31, 2019
			$ 111,819 944 95,611 53,939 49,505 19,625 10,896 37,019 17,216 - $ 396,574

(6) Income tax audit

The profit-seeking enterprise income tax returns for SAMPO CORPORATION, NELONG Company, DEBAO HOME APPLIANCE, AMIGO LOGISTICS, QUANBAO INVESTMENT, NISSIN GLOBAL LOGISTICS, QUANBAO INVESTMENT, SAMPO HOME INC. have been assessed by tax authorities through 2018.

144 -

25. Earnings per share (EPS)

The earnings and weighted average common stock shares used in calculating the earnings per share are as follows:

Net profits of the current year

earnings per share are as follows: Net profits of the current year
Net profit attributable to the company The earnings used to calculate diluted earnings per share (EPS) Shares Weighted average common stock shares used to calculate basic earnings per share Effect of dilutive potential common stock: Remuneration to employees Weighted average common stock shares used to calculate diluted earnings per share		2020 2019 $ 1,795,993 $ 738,963 $ 1,795,993 $ 738,963 Unit: shares in thousands 2020 2019 369,885 368,802 2,546 973 372,431 369,775

If the consolidated company may choose to have the employee compensation distributed via a stock or cash dividend, calculate the diluted earnings per share, assuming that the bonus to employees is with a stock dividend distributed, with the weighted average number of shares outstanding included when the potential common stock has a diluted effect. When diluted EPS is calculated in the next year resolves the number of share distribution for employee compensation, the dilution effect is also considered for such potential common shares.

26. Equity transactions with the non-controlling equity

In March 2020, the Consolidated Company acquired 0.04% of the shares of AMIGO LOGISTICS CORPORATION, resulting in an increase in shareholding from 72.61% to 72.65%.

In April 2019, the Consolidated Company subscribed for the cash capital increase of NISSIN GLOBAL LOGISTICS (formerly “NISSIN Company”) not in proportion to its shareholding, resulting in a reduction of its shareholding from 100% to 51%.

Since the transaction referred to above did not change the control of the Consolidated Company over the subsidiaries, the Consolidated Company has it processed as an equity transaction.

145 -

2020

2020
Payment of cash consideration The carrying amount of the subsidiary’s net assets should be (transferred in) transferred out of non-controlling interests based on the relative changes in equity. Equity transaction balance Adjustment of equity transaction balance Capital surplus – The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries. 2019 Payment of cash consideration The carrying amount of the subsidiary’s net assets should be (transferred in) transferred out of non-controlling interests based on the relative changes in equity. Equity transaction balance Adjustment of equity transaction balance Capital surplus – The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries.	NISSIN GLOBAL LOGISTICS ( $ 300 ) 321 $ 21 $ 21 NISSIN GLOBAL LOGISTICS $ - ( 66) ($ 66) ($ 66)	Total
		( $ 300 ) 321 $ 21 $ 21 Total

	( ( (	( ( (	$ - 66) $ 66) $ 66)

27. Capital risk management

The consolidated company manages capital to ensure the Group’s enterprises to maximize shareholder’s returns by optimizing the balance of debt and equity under the precondition of continuing operation.

The Consolidated Company’s capital structure consists of net debt (i.e. borrowings less cash and cash equivalents) and equity attributable to shareholders of SAMPO (i.e. capital stock, capital surplus, retained earnings and other equity items).

146 -

28. Financial instrument

(1) Information on fair value – financial instruments at fair value on repetition.
Fair value hierarchy

December 31, 2020

Fair value hierarchy December 31, 2020
Financial assets at fair value through other comprehensive profit or loss Equity investment - Domestic unlisted stocks - Foreign unlisted stocks Total		Level 1 $ - - $ -		Level 2 $ - - $ -		Level 3 $ 169,851 255,357 $ 425,208		Total
								$ 169,851 255,357 $ 425,208

December 31, 2019 Financial assets at fair value through other comprehensive profit or loss Equity investment - Domestic unlisted stocks - Foreign unlisted stocks Total		Level 1 $ - - $ -		Level 2 $ - - $ -		Level 3 $ 194,423 326,961 $ 521,384		Total
								$ 194,423 326,961 $ 521,384

There were no transfers between Level 1 and Level 2 fair value measurements in 2020 and 2019.

Financial instruments are adjusted according to Level 3 fair value.

January 1 to December 31, 2020

January 1 to December 31, 2020
Financial asset Beginning retained earnings Recognized in other comprehensive income (unrealized valuation gains or losses on financial assets measured at fair value through other comprehensive income) Balance, ending	Financial assets at fair value through other comprehensive profit or loss
	Equity instrument
	(	$ 521,384 96,176 ) $ 425,208

147 -

January 1 to December 31, 2019

January 1 to December 31, 2019
Financial asset Beginning retained earnings Recognized in other comprehensive income (unrealized valuation gains or losses on financial assets measured at fair value through other comprehensive income) Disposal Balance, ending	Financial assets at fair value through other comprehensive profit or loss
	Equity instrument
	(	$ 364,358 157,689 663 ) $ 521,384

Evaluation techniques and an input value of Level 3 fair value measurement

The fair value of unlisted (over-the-counter) equity instruments is estimated based on an analysis of the financial condition and results of operations of the investees, the quoted prices of the shares of companies with similar operations in active markets, the value multipliers implied by these prices and relevant transaction information, and the valuation of the subject by an appropriate multiplier, taking into account the financial performance of the subject.

(2) Categories of financial instruments

subject. Categories of financial instruments
Financial asset Financial assets based on cost after amortization (Note 1) Financial assets at fair value through other comprehensive profit or loss Equity investment Financial liability Based on cost after amortization (Note 2)	December 31, 2020 $ 1,769,394 425,208 2,277,438	December 31, 2019
		$ 2,067,095 521,384 3,330,110

Note 1: The balance consists of financial assets measured at amortized cost, including cash and cash equivalents, notes receivable, accounts receivable, notes and accounts receivable from related parties, other receivables, other receivables from related parties, time deposits with original maturities of more than three months and pledged time deposits.

148 -
Note 2: The balance consists of financial liabilities measured at amortized cost, including short-term borrowings, short-term notes payable, notes payable, accounts payable, notes and accounts payable to related parties, other payables, long-term loans due within one year, and long-term loans.
(3) Purpose and policy of financial risk management

The Consolidated Company’s major financial instruments include investments in equity and debt, accounts receivable, accounts payable and borrowings. Among the financial instruments held by the Consolidated Company mentioned above, the financial risks associated with operations include market risk (including exchange rate risk, interest rate risk and other price risks), credit risk and liquidity risk.

Market risk

Due to the operating activities, the major financial risk faced by the consolidated company is the foreign currency exchange rate risk (see (1) below) and interest rate risk (see (2) below).

(1) Exchange rate risk

Several subsidiaries of SAMPO engage in foreign currencydenominated sales and purchase transactions, which expose the Consolidated Company to exchange rate risk.

The carrying amounts of monetary assets and monetary liabilities denominated in non-functional currencies as of the balance sheet date are shown in Note 32.

Sensitivity analysis

The Consolidated Company is prone to the impact of changes in USD exchange rates.

The consolidated company’s sensitivity analysis for New Taiwan Dollar (functional currency) to each relevant foreign currency exchange rates that increased or decreased by 1% is illustrated in the following table. The 1% sensitivity is used internally for reporting the exchange rate risk to management and is the assessment by management regarding the reasonable and possible changes in foreign exchange rates. The sensitivity analysis includes only the outstanding monetary items in foreign currency; also, the translation at year-end is adjusted in accordance with the changes in exchange rates by 1%. The positive numbers in the following table represent the increase in net profits before tax if the NTD weakens by 1% against the respective currencies, and the negative numbers for the same amount represent the decrease in net profits before tax if the NTD strengthens by 1% against the respective currencies.

149 -

Profit or loss	Impact of USD (i)	Impact of USD (i)
	2020 $ 3,621	2019
		$ 9,669

(i) These receivables and payables are mainly due to the Consolidated Company’s outstanding USD-denominated receivables and payables that are not cash flow hedged as of the balance sheet date.
(2) Interest rate risk

Interest rate risk exposure is due to the entities within the consolidated company borrowing funds at floating interest rates.

The book value of the consolidated company’s financial assets and financial liabilities with interest rate exposure on the balance sheet date is as follows:

as follows:
With fair value interest rate risk Financial asset Financial liability Contain cash flow interest rate risk Financial asset Financial liability	December 31, 2020 $ 410,053 - 765,146 900,000	December 31, 2019
		$ 932,087 549,785 502,520 1,625,000

The Consolidated Company is exposed to cash flow interest rate risk as a result of holding floating rate bank loans. These circumstances are consistent with the Consolidated Company’s policy of maintaining floating rate borrowings to reduce interest rate fair value risk. The Consolidated Company’s cash flow interest rate risk is mainly due to fluctuations in benchmark interest rates related to NTD-denominated borrowings.

Sensitivity analysis

The following sensitivity analyses are based on the interest rate risk exposure of the derivative and non-derivative instruments on the balance sheet date. For liabilities with floating rate, it is analyzed by assuming the liabilities on the balance sheet date are outstanding throughout the reporting period. The rate of change used by the Group to report interest rates to management is increased or decreased by 0.25%, which also represents management’s assessment of the reasonably possible range of interest rates.

If interest rates had increased by 0.25%, with all other variables held constant, the Consolidated Company’s net profits before income tax would have decreased by $337 thousand and $2,806 thousand for 2020 and 2019, respectively, mainly due to the Consolidated Company’s exposure to fair value interest rate risk on its floating rate borrowings.

150 -

(3) Other price risk

The Consolidated Company has equity price risk exposure due to its investment in equity securities.

Sensitivity analysis

The following sensitivity analysis is based on the equity price risk at the balance sheet date.

If the equity price had increased by 1%, other comprehensive income after tax would have increased by $4,252 thousand in 2020, respectively, due to the increase in fair value of financial assets measured at fair value through other comprehensive income.

If the equity price had increased by 1%, other comprehensive income after tax would have increased by $5,214 thousand in 2019, respectively, due to the increase in fair value of financial assets measured at fair value through other comprehensive income.

2. Credit risk

Credit risk meant for the consolidated company’s risk of financial loss due to the counterparty’s failure in fulfilling contractual obligations. As of the balance sheet date, the Consolidated Company’s maximum exposure to credit risk of financial loss due to non-performance of counter-parties is mainly the carrying amount of financial assets recognized in the Consolidated Balance Sheet.

The Consolidated Company’s credit risk is mainly concentrated in the Consolidated Company’s top four customers. As of December 31, 2020 and 2019, the percentage of total accounts receivable from the aforementioned customers was 24% and 31%, respectively.

3. Liquidity risk

The consolidated company has supported the Group’s business operation and mitigated the impact of changes in cash flow by managing and maintaining sufficient cash and cash equivalent position. The consolidated company’s management monitors the use of banking facilities and ensures the compliance of loan agreement.

(1) Liquidity and interest rate risk table of non-derivative financial liabilities

Non-derivative financial liabilities remaining contract maturity analysis is prepared in accordance with the Consolidated Company’s undiscounted cash flow of financial liabilities on the possible earliest repayment date upon request. Therefore, the consolidated company may be required to immediately repay the bank loan is illustrated in the following table without considering the probability that the bank may immediately exercise such right. The other non-derivative financial liabilities maturity analysis is prepared in accordance with the agreed repayment date.

For the cash flow of the interest paid in accordance with the floating rate, the undiscounted interest amount is deduced from the yield rate curve on the balance sheet date.

151 -

December 31, 2020

Non-derivative financial liabilities Note and account payables Other payables lease liabilities Floating rate instruments Fixed interest rate	Weighted average effective interest rate (%) - - 1.5 1.08656~1.15 -	Less than 1 year $ 848,596 528,842 111,325 - -	2–3 years $ - - 102,109 900,000 -	4 to 5 years $ - - 80,114 - -	Total
					$ 848,596 528,842 293,548 900,000 -

December 31, 2019

Non-derivative financial liabilities Note and account payables Other payables lease liabilities Floating rate instruments Fixed interest rate	Weighted average effective interest rate (%) - - 1.5 1.06~1.50 1.038~1.58	Less than 1 year $ 712,083 445,042 58,215 575,000 549,785	2–3 years $ - - 85,561 390,000 -	4 to 5 years $ - - 116,731 660,000 -	Total
					$ 712,083 445,042 260,507 1,625,000 549,785

Floating interest rate for the above-mentioned non-derivative financial liabilities will vary due to the differences of the floating interest rate and the interest rate estimated on the balance sheet.

(2) Financing amount

December 31, 2020 December 31, 2019

Unsecured bank loan amount Amount utilized Amount unutilized Secured bank loan Amount utilized Amount unutilized	$ 611,000 3,199,000 $ 3,810,000 $ 600,000 870,000 $ 1,470,000	$ 1,313,000 2,067,000 $ 3,380,000 $ 1,100,000 370,000 $ 1,470,000

29. Related party transaction

The transactions, account balances, income, expenses and losses between the Company and subsidiaries (related party of the Company) are offset at the time of consolidation; therefore, it is not disclosed in this note. The transactions conducted between the consolidated company and other related parties are as follows:

152 -
(1) Name of related parties and the relations

Name Affiliation RECHI PRECISION CO.,LTD. Affiliate Dyna Rechi Co., Ltd. Other affiliate Nucom International Corporation Other affiliate SYNVISION TECHNOLOGY SERVICE Other affiliate CORPORATION CINCHY CORPORATION Other affiliate NISSIN CORPORATION Other affiliate Chen Zhang Xiu Ju Culture and Other affiliate Education Foundation Chen Mao-Bang Industry and Commerce Chairman of The Company Development Foundation

(2) Operating income

Operating income
Account titles in book Operating income	Related party classification Affiliate Other affiliate Chairman of The Company		2020 $ 929 6,087 928 $ 7,944		2019
					$ 809 1,549 - $ 2,358

The sales for related parties are based on the general distribution price, and the collection policy is the same as that for general customers, except for the 120-day collection period for some related parties.

(3) Purchase

Purchase
Related party classification Affiliate Other affiliate		2020 $ 2,966 3,294 $ 6,260		2019
				$ 2,630 1,925 $ 4,555

The terms of the transactions between the Company and its related parties are not significantly different from those of the transactions with non-related parties.

(4) Receivables from concerned parties (excluding loans borrowed from concerned parties)

parties)
Account titles in book Notes receivable Trade receivable Other receivables	Related party classification Other affiliate Other affiliate Other affiliate	December 31, 2020 $ - $ 5,247 $ 1	December 31, 2019
				$ 4 $ 955 $ 26

153 -

The outstanding receivables from the related party are without any guarantees collected.

(5) Payables to concerned parties (excluding loans borrowed from concerned parties)

Account titles in book Payable notes Accounts payable Other payables	Related party classification Affiliate Other affiliate Affiliate Other affiliate Other affiliate	December 31, 2020 $ - - $ - $ 1,278 1,412 $ 2,690 $ 31	December 31, 2019	December 31, 2019
				$ 8 774 $ 782 $ 65 - $ 65 $ -

For balance of payables to concerned parties outstanding, no guarantee has been provided.

(6) Operating expenses

provided. Operating expenses
Related party classification Affiliate		2020 $ 175		2019
				$ 18

(7) Remuneration to key management

Remuneration to key management
Short-term employee benefits Post-employment benefits		2020 $ 47,279 989 $ 48,268		2019
				$ 41,508 1,053 $ 42,561

The salaries and remunerations to directors and other key management were determined by the Salary Committee in accordance with the personal performances and trends in the markets:

154 -

30. Pledged assets

The following assets have been provided as collateral for various loans to financial institutions and for tariff guarantees.

Guarantee items and assets Long-term borrowings Property, Plant and Equipment Guarantee of imported raw materials for bank letter of credit transactions Restricted assets – current Fuel Guarantee Restricted assets-non-current Setting of Pledge for shipping Contract Transportation Restricted assets-non-current	Content	Book value	Book value	Book value
		December 31, 2020 $ 804,306 195,486 9,146 24,000 3,000 $ 1,035,938	December 31, 2019
	Land (including revaluation increment) Land (including revaluation increment) Demand deposits Time deposits Time deposits			$ 804,306 197,229 9,627 24,000 3,000 $ 1,038,162

31. Significant contingent liabilities and unrecognized contractual commitments

In addition to those described in other notes, the Consolidated Company had the following material commitments and contingencies as of the balance sheet date.

(1) As of December 31, 2020 and 2019, the Consolidated Company had unused letters of credit of US$11,738 thousand and US$6,961 thousand, respectively, for the purchase of goods and materials.
(2) During 2004, SAMPO CORPORATION sold a number of home appliances to dealer, one of which was sold by its parent company, to an end customer in the United States. The end customer later claimed that a fire caused by SAMPO’s appliances caused the damage caused by a fire in 2012 and sued dealer for compensations. Dealer and the customer had reached a settlement of their lawsuit, with paying compensation. Subsequently, Dealer filed an arbitration case with the American Arbitration Association, requesting SAMPO and Tianjin New Swell to compensate jointly and severally. The arbitration decision was rendered by the American Arbitration Association on February 3, 2016, which ruled that SAMPO and Tianjin New Swell should pay US$3,052 thousand in compensation for the relevant losses. The arbitration decision was approved by the U.S. Federal Court on January 17, 2018, which recognized the arbitration decision, but dealer has not yet done anything concrete as of September 30, 2020, and SAMPO has not yet received any documents such as notice of the arbitration ruling that dealer has filed with the court in Taiwan.

In accordance with Article 47 Paragraph 2 of the Arbitration Law of ROC, the foreign arbitral decision shall have the same effect among the parties involved as the final judgment of the R.O.C. court if it is recognized by the R.O.C. court upon dealer’s application. On October 27, 2016, SAMPO received the Taiwan Taoyuan District Court’s 2016 Letter Zhu-Zi No. 15 for dealer’s application for recognition of the U.S. Arbitration Judgment, and based on the principle of conservatism, the Consolidated Company has made a provision of $99,216 thousand for compensation in that year.

155 -

As a result of the aforementioned claim by dealer, SAMPO turned to its insurer, Chung Kuo Insurance Co., Ltd. (hereinafter referred to as Chung Kuo Insurance), to seek compensation. In accordance with the contents of the product liability insurance policy signed with Chung Kuo Insurance, SAMPO filed a lawsuit in the court, demanding Chung Kuo Insurance to fulfill the insurance contract and compensate for the delayed interest in this case. The result of the lawsuit was unfavorable as ruled by the Taipei District Court in 2019. In 2020, SAMPO filed an appeal for the second instance trial and the case is still pending at the Taiwan High Court.

32. Information of foreign currency assets and liabilities with significant effects

The following information is expressed in foreign currencies other than the functional currencies of each entity within the consolidated company; also, the exchange rate disclosed refers to the exchange rate used for having such foreign currency converted into the functional currency. Foreign currency assets and liabilities with significant influence as follows:

December 31, 2020

follows: December 31, 2020
Foreign currency assets Monetary items USD USD Foreign currency liabilities Monetary items USD USD JPY December 31, 2019 Foreign currency assets Monetary items USD USD Foreign currency liabilities Monetary items USD USD JPY	Foreign currency $ 12,599 2,683 2,072 496 13,646 Foreign currency $ 32,298 3,178 1,789 1,436 4,135	Ending exchange rate 28.48 (USD:NTD) 6.5249 (USD:RMB) 28.48 (USD:NTD) 6.5249 (USD:RMB) 0.2763 (JPY:NTD) Ending exchange rate 29.980 (USD:NTD) 6.9762 (USD:RMB) 29.980 (USD:NTD) 6.9762 (USD:RMB) 0.2760 (JPY:NTD)	Carrying amount
			$ 358,817 76,402 59,011 14,135 3,770 Carrying amount
			$ 968,288 95,285 53,630 43,038 1,141

The Consolidated Company is primarily exposed to foreign currency exchange rate risk in USD. The following information is presented in the functional currency of each entity possessing foreign currency. The disclosed exchange rate refers to the exchange rate of such functional currency converting into the presentation currency. Foreign currency gains/losses of material impact are as follows:

156 -

Foreign currency USD USD	2020 Average exchange rate Net exchange losses (gains) 31.26 (USD:NTD) ( $ 15,351 ) 7.1165 (USD:RMB) ( 5,527) ($ 20,878)	2019	2019
	Average exchange rate 31.26 (USD:NTD) 7.1165 (USD:RMB)	Average exchange rate 31.09 (USD:NTD) 6.9060 (USD:RMB)	Net exchange losses (gains)
			( $ 19,635 ) ( 36,935) ($ 56,570)

33. Notes of disclosure

(1) Material transactions (2) and transfer investment information:
Loans to others: none.
Endorsements/guarantees for others: none.
Marketable securities held at the end of the period (excluding investment in subsidiaries, affiliates and joint ventures): Exhibit 1
The cumulative purchase or sale of the same security for an amount exceeding NT$300 million or 20% of paid-in capital: None.
The acquisition of real estate for an amount exceeding NT$300 million or 20% of paid-in capital: None.
The disposal of real estate for an amount exceeding NT$300 million or 20% of paid-in capital: Exhibit 2
The purchase or sale with the related party for an amount exceeding NT$100 million or 20% of paid-in capital: Exhibit 3.
Receivables from related parties reaching $100 million or 20% of paid-in capital or more. None.
Engagement in derivative transactions: None.
Information on investees: Exhibit 4
Business relationships and significant intercompany transactions between parent and subsidiary and between subsidiaries: Exhibit 5
(3) Information regarding investment in the territory of Mainland China:
The name of the investees in Mainland China, principal business, paid-in capital, investment methods, capital outward and inward remittances, shareholding, investment gains and losses, investment carrying amount at the end of the period, repatriated investment gains and losses, and investment quota for Mainland China: Exhibit 6
The following significant transactions with investees in Mainland China, directly or indirectly through third regions, and their prices, payment terms, and unrealized gains or losses: Exhibit 7
- (1) Amounts and percentages of purchases and related payables at the end of the period.
- (2) Amounts and percentages of sales and related receivables at the end of the period.
- (3) Amount of property transaction and amount of the profit and/or loss so incurred.
157 -
(4) Balance and purposes of endorsements/guarantees or collateral provided at end of the term.
(5) The highest balance of fund financing balance at end of the term, range of interest rates and total amount of interest in the current term.
(6) Other transactions having significant effect upon profit and/or loss or financial standing of the current term, e.g. provision or acceptance of services.
(4) Name, number and percentage of shares held by shareholders with 5% or more of the shares: Exhibit 8

34. Segment information

The information provided to the major operating decision-maker for allocating resources and assessing segment performance is focusing on the type of product or service delivered or offered. The reportable segments of the Consolidated Company are as follows:

Electronics and Home Appliances Business

Transportation Business

(1) Segment revenues and operating results

The revenues and operating results of the Consolidated Company are analyzed by reportable segment as follows:

Electronics and Home Appliances Business Transportation Business Total amount Interest income Other income Other profits and losses Share of profit or loss of affiliated companies accounted for using the equity method Financial costs Profit before tax		Segment	re	venue 2019 $ 6,468,268 647,741 $ 7,116,009		segment profit or loss	segment profit or loss	segment profit or loss
		2020 $ 6,940,646 729,374 $ 7,670,020				2020 $ 381,312 145,998 527,310 10,097 54,217 1,322,250 195,007 24,275) $ 2,084,606		2019
					(		(	$ 180,071 117,724 297,795 24,059 51,178 287,445 181,341 30,013) $ 811,805

Revenues reported above are generated from transactions with external customers. There were no inter-segment sales in 2020 and 2019

Segment profit represents the profit earned by each segment, excluding interest income, other income, other gains and losses, share of affiliated companies using the equity method, finance costs and income tax expense. The measured figures are provided for main decision makers to allocate resources to segments and evaluate the performance of each segment.

158 -

(2) Main revenues from products and service

An analysis of the Consolidated Company’s revenue from major products and services is as follows

services is as follows
Electronics and home appliance products Transportation business and others		2020 $ 6,940,646 729,374 $ 7,670,020		2019
				$ 6,468,268 647,741 $ 7,116,009

(3) Information by areas

The Consolidated Company operates mainly in two areas – Taiwan and China

Information on the Consolidated Company’s revenue from external customers by area of operations and non-current assets by area of assets is presented below:

Taiwan Asia (excluding Taiwan)		Income from external customers 2020 2019 $ 7,284,498 $ 6,706,910 385,522 409,099 $ 7,670,020 $ 7,116,009	Income from external customers 2020 2019 $ 7,284,498 $ 6,706,910 385,522 409,099 $ 7,670,020 $ 7,116,009		non-current assets	non-current assets	non-current assets
		2020 $ 7,284,498 385,522 $ 7,670,020			December 31, 2020 $ 5,559,927 50,322 $ 5,610,249		December 31, 2019
							$ 5,441,030 62,201 $ 5,503,231

Non-current assets exclude investments accounted for using the equity method, financial instruments and deferred income tax assets.

(4) Information on key customers

Income generated from a single customer for more than 10% of the consolidated company’s total income is as follows:

Customer A		2020 $ 1,528,624		2019
				$ 1,344,046

159 -

Unit: Unless otherwise stated, NT$ thousand

SAMPO CORPORATION and its Subsidiary

Marketable securities held – end of year

December 31, 2020

Exhibit 1

Holding company	Types and names of securities	Relationship with the securities issuer	Account titles in book		End of the period	End of the period	End of the period			Remarks
				Number of shares/units (in thousands)	Carrying amount		Ratio of Shareholding		Market price
SAMPO CORPORATION QUANBAO INVESTMENT CO., LTD. AMIGO LOGISTICS CORPORATION QUANBAO INVESTMENT CO., LTD. AMIGO LOGISTICS CORPORATION	Nucom International Corporation Chinese Television System Inc. WK ASSOCIATES LTD. Pushi Venture Capital Co., Ltd. WK VIII ASSOCIATES LTD. GRACE THW HOLDING MICROMAX INTERNATIONAL CORP. Nucom International Corporation A-KIN ALLIANCE LOGISTICS CO., LTD. SAMPO CORPORATION SAMPO CORPORATION	Other affiliate - - - - - - Other affiliate - Parent and Subsidiary Parent and Subsidiary	Financial assets at fair value through other comprehensive income or loss – non-current - 〞〞〞〞〞〞〞 Financial assets at fair value through other comprehensive income or loss – non-current Financial assets at fair value through other comprehensive income or loss – non-current	882 7,581 299 899 867 2,178 3,380 144 250 10,050 538		$ 31,576 103,392 4,671 7,084 4,352 255,357 12,471 5,154 1,151 $ 425,208 $ 261,798 $ 14,030	4 4 1 2 2 1 19 1 7 3 -		$ 31,576 103,392 4,671 7,084 4,352 255,357 12,471 5,154 1,151 $ 425,208 $ 261,798 (Note 1) $ 14,030 (Note 1)	@35.79 @13.64 @15.62 @7.88 @5.02 @117.26 @3.69 @35.79 @4.61 @26.05 @26.05

Note 1: QUANBAO INVESTMENT CO., LTD. and AMIGO LOGISTICS CORPORATION held the shares of SAMPO, which were treated as treasury stock and transferred from investments accounted for using the equity method to treasury stock with carrying amounts of $482,468 thousand and $1,678 thousand, respectively.

160 -

SAMPO CORPORATION and its Subsidiary

The disposal of real estate for an amount exceeding NT$300 million or 20% of paid-in capital

2020

Exhibit 2

Unit: Unless otherwise stated, amounts in NT$ Thousand

Company disposing property	Asset title	Date of event	Original acquisition date	Carrying amount	Trade value	The collection of proceeds	Capital gain/loss from disposition	Counterparties	Relation	Purpose of disposition	Reference for price determination	Other stipulations of the transaction
SAMPO CORPORATION	606, 619, 628, 620, 621, 630, 625, 627, 636, 567, 631, 631-1, 636- 1, 636-2 and 636- 3 of Dinghu Section, Guishan District, Taoyuan City and their above-ground buildings	2020.7.14	1988.8.8	$ 362,289	$ 1,800,000	Full recovery	$ 1,371,913 (Note 1)	Gen Yi Construction Co., Ltd.	None	Revitalization of company assets and efficient use of capital	In accordance with the valuation reports of Eurasian Real Estate Appraisal Associates and DTZ Real Estate Appraisal Associates, the sale will be conducted by public tender and bargaining, and the board of directors will authorize the chairman to decide.	Note 2

Note 1: The contract price of $1,800,000 thousand (including business tax), net of business tax and brokerage commission, was $1,781,470 thousand. The carrying amount of the real estate was $362,148 thousand and the non-transferred gain of $47,409 thousand from the sale and leaseback, resulting in a gain of $1,371,913 thousand from the transferred portion.

Note 2: The Company entered into a plant lease with Gen Yi Construction Co., Ltd., which was recognized as a lease agreement in accordance with IFRS 16 Sale and Leaseback Transactions.

161 -

SAMPO CORPORATION and its Subsidiary

The purchase or sale with the related party for an amount exceeding NT$100 million or 20% of paid-in capital

2020

Exhibit 3

Unit: Unless otherwise stated, NT$ thousand

Purchase (sale) company	Counterparties	Relation		Transactions	Transactions		Trading terms different from general trade and reasons	Trading terms different from general trade and reasons	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Remarks
			Purchase (sale)	Amount	Percentage of total purchase (sale)	The credit period	Unit price	The credit period	Balance	Percentage of total notes and accounts receivable (payable)
SAMPO CORPORATION	DEBAO HOME APPLIANCE CO., LTD. NELONG ENTERPRISE CORPORATION LTD.	Parent and Subsidiary Parent and Sub- subsidiary	Purchase Purchase	$ 2,362,552 138,919	51% 3%	Same as general suppliers Same as general suppliers	Cost plus 1% to 6.5% Cost plus 1% to 6.5%	－－	－ Accounts payable ( $ 20,891 )	－ ( 2% )	Note 1

Note 1: As of December 31, 2020, SAMPO’s prepayment to NELONG ENTERPRISE CORPORATION LTD. was $73,288 thousand. Note 2: Related party transactions between consolidated entities have been adjusted and eliminated

162 -

Unit: Unless otherwise stated, NT$ thousand

SAMPO CORPORATION and its Subsidiary

Information regarding investee’s name and location, etc.

December 31, 2020

Exhibit 4

Investor	Name of investee	Location	Principal business	Sum of initial investment	Sum of initial investment	Ending shareholding	Ending shareholding	Ending shareholding	Current period profit/loss of the investee	Recognized investments for current period (loss) profit (Note 1)	Remarks
				Current period- end	Previous period- end	Number of Shares (in thousands)	Ratio	Carrying amount
SAMPO CORPORATION QUANBAO INVESTMENT CO., LTD. AMIGO LOGISTICS CORPORATION New Swell International Investment Co., Ltd. SAMPO HOME INC.	AMIGO LOGISTICS CORPORATION RECHI PRECISION CO.,LTD. New Swell International Investment Co., Ltd. QUANBAO INVESTMENT CO., LTD. DEBAO HOME APPLIANCE CO., LTD. SAMPO HOME INC. SAMPO JAPAN INC. AMIGO LOGISTICS CORPORATION RECHI PRECISION CO.,LTD. NELONG ENTERPRISE CORPORATION LTD. SAMPO INTERNATIONAL FOOD SERVICE CO., LTD. NISSIN GLOBAL LOGISTICS (TAIWAN) CO., LTD. AMIGO HOME LIFE CO., LTD. DONGGUAN SAMPO ELECTRONICS CO., LTD. SAMPO ASSET MANAGEMENT CO., LTD.	Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan Japan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan China Taiwan	Warehousing, transportation Compressor manufacturing, sales Investment holding Investment business Home appliance manufacturing and sales Real estate trading, leasing Marketing and Promotion Warehousing, transportation Compressor manufacturing, sales Electronics manufacturing and sales Food and beverage Warehousing, transportation Product installation and wholesale of electrics and electronic materials Manufacturing and sale of electrics and electrons equipment Real estate trading, leasing	$ 209,546 1,550,990 31,060 ( USD 1,000 ) 1,076,000 200,000 500,000 JPY 30,000 126,097 92,740 36,600 100,000 32,090 21,000 USD 1,400 10,000	$ 209,546 1,544,735 31,060 ( USD 1,000 ) 1,076,000 200,000 500,000 JPY 30,000 125,797 92,740 36,600 50,000 32,090 21,000 USD 1,400 10,000	21,155 135,610 1,000 114,325 20,000 50,000 3,000 10,365 4,136 3,660 10,000 2,550 2,100 1,400 1,000	49 27 100 100 100 100 100 24 1 61 100 51 100 70 100	$ 449,861 2,739,654 82,360 528,149 103,259 420,298 5,627 220,905 103,515 52,843 62,278 21,026 22,039 USD 1,993 7,753	$ 116,389 709,491 1,699 41,496 68,200 ( 10,113 ) ( 484 ) 116,389 709,491 19,193 ( 20,848 ) ( 6,096 ) 1,243 USD 390 ( 1,550 )	$ 55,943 189,203 1,699 25,533 51,794 ( 16,947 ) ( 484 ) 27,796 5,804 11,707 ( 20,848 ) ( 3,109 ) 1,243 USD 273 ( 1,550 )	Note 2 Note 3 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 3 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2

Note 1: The investment income or loss recognized by the Company includes investment income or loss recognized for upstream transactions recorded in the book, net of dividends paid by the parent company to its subsidiaries. Note 2: Subsidiary included in the consolidated entities.

Note 3: Equity-method investee included in the consolidated financial statements.

Note 4: For the equity-method subsidiaries included in the consolidated financial statements, investment income or loss recognized under the equity method, and the net equity of the investee are fully eliminated.

163 -

SAMPO CORPORATION and its Subsidiary

Business relationship and significant transactions between Parent Company and Subsidiaries

January 1 to December 31, 2020

Exhibit 5

Unit: Unless otherwise stated, NT$ thousand

Serial No. (Note 1)	Trader’s name	Counterparty	Relationship with trader (Note 2)			Transactions
				Title	Amount	Terms and conditions	Percentage in consolidated total revenue or total assets (Note 3)
0 2	SAMPO CORPORATION AMIGO LOGISTICS CORPORATION	DEBAO HOME APPLIANCE AMIGO LOGISTICS CORPORATION DONGGUAN SAMPO ELECTRONICS CO., LTD. NELONG Company AMIGO HOME	1 1 1 1 3	Purchase Other payables Accounts payable Rent revenue Rental expense Transportation expenses Purchase Accounts payable Purchase Accounts payable Prepayment for goods Transportation expenses Notes payable	$ 2,362,552 11,693 81,919 11,214 56,686 167,540 80,725 15,126 138,919 20,891 73,288 145,404 32,017	The purchase price is based on cost. Rentals are priced based on general rental level Rentals are priced based on general rental level Transportation expenses are based on general market level The purchase price is the cost, and the payment terms are the same as the general manufacturers. The purchase price is the cost, and the payment terms are the same as the general manufacturers. Transportation expenses are based on general market level	31 - 1 - 1 2 1 - 2 - 1 2 -

Note 1: The information of business operation between the parent company and its subsidiaries should be documented in the respectively numbered column as follows:

Fill in “0” for parent company.
The subsidiaries are sequentially numbered from 1 and so forth.

Note 2: The relationship with the traders is classified into three categories as follows:

Parent to Subsidiary.
164 -
Subsidiary to Parent
The Subsidiary to the Subsidiary.
Note 3: Calculate the ratio of the transaction amount to consolidate the total income or total assets. For the assets and liabilities account, calculate the ratio of the ending balance to the consolidated total assets. For the profits and losses account, calculate the ratio of the interim cumulated amount to the consolidated total income.
Note 4: The Company may determine discretionally whether to have the material transactions in the table illustrated according to its materiality.
165 -

2020

SAMPO CORPORATION and its Subsidiary

Information regarding investment in the territory of mainland china

Exhibit 6

Unit: Unless otherwise stated, NT$ thousand

Names of investees in China	Principal business	Paid-up capital	Mode of investments (Note 1)	Accumulated investment amount remitted at the beginning of the period	Amount of investment remitted or recoveredincurrent period	Amount of investment remitted or recoveredincurrent period	Accumulated investment amount remitted at the end of the period	Current period profit/loss of the investee	Ratio of shareholding of investment directly or indirectly made by the Company	Investment gain and loss recognized in current period (Note 2)	Book value of investment at ending	The investment income received at the end of the current period	Remark s
					Outward remittance	Recover
DONGGUAN SAMPO ELECTRONICS CO., LTD.	Manufacturing and sale of electrics and electrons equipment	USD 2 million	3	$ 42,180	$ -	$ -	$ 42,180	$ 12,204	70	$ 8,543 (Recognition basis B)	$ 56,769	$ -

Company name	Accumulated amount of investment from Taiwan to mainland China at the end of the period .	Amount of investment approved by Investment Commission of MOEA	Investment amount approved by the Investment Commission MOEAIC
SAMPO CORPORATION	$ 2,105,454	$ 2,437,870	$ 4,659,178

Note 1: The investment methods can be divided into the following 5 types:
To invest in Mainland China companies through remittance from a third area.
To invest in Mainland China companies through a company invested and established in a third area.
To invest in Mainland China companies through reinvesting in an existing company in a third area.
To invest in Mainland China companies directly.
Other ways.
Note 2: Recognized as gains or losses on investment in current period:
(1) Please mark out if there has no investment gain or loss yet because the investment is still under planning.
(2) The basis of recognition of investment income is classified into following three types, which should be marked out.
- A. The financial statements have been audited by an international CPA firm with which CPA firms in the ROC. has a cooperative relationship.
- B. Financial statements audited by the CPAs who audit the parent company in Taiwan.
- C. Others
Note 3: In accordance with the new regulations issued by the Investment Commission of the Ministry of Economic Affairs in August 2008, the Company’s investment limit in Mainland China is calculated as 60% of the net worth or consolidated net worth, whichever is higher.
166 -

SAMPO CORPORATION and its Subsidiary

Significant transactions with investees in Mainland China directly or indirectly through enterprises in third regions

2020

Exhibit 7

Unit: Unless otherwise stated, NT$ thousand

Purchase (sale) company	Counterparties	Relation	Transaction type	Purchase (sale)	Purchase (sale)	Terms and conditions	Terms and conditions	Terms and conditions	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Unrealized gain or loss
				Balance	Percentage (%)	Price	Payment term	Comparison with general transaction	Balance	Percentage (%)
SAMPO CORPORATION	DONGGUAN SAMPO ELECTRONICS CO., LTD.	Parent and Sub- subsidiary	Purchase	$ 80,725	2%	Cost or cost plus 1% to 6.5%	Same as general suppliers	Purchase price is better than general manufacturers	Accounts payable ( $ 15,126 )	( 2% )	$ -

Note 1: Related party transactions between consolidated entities have been adjusted and eliminated

167 -

SAMPO CORPORATION and its Subsidiary

Information on Dominant Shareholders

December 31, 2020

Exhibit 8

Names of Dominant Shareholders	Share	Share
	Shareholding	Shareholding percentage
MACLADY INVESTMENT LTD.	33,108,800	8.55%

Note 1: The information on major shareholders in this Exhibit is compiled by Taiwan Depository & Clearing Corporation based on the last business day of the quarter in which the shareholders held 5% or more of the Company’s common shares and preferred shares whose registration and delivery have been completed in nonphysical form (including treasury shares). The number of shares recorded in the Company’s consolidated financial statements and the actual number of shares registered and delivered in non-physical form may differ depending on the basis of preparation of the calculations.
Note 2: If a shareholder delivers his or her shares to a trust, the above information shall be disclosed by the individual trustor account opened by the trustee As for the shareholder’s declaration of insider’s equity in accordance with the Securities and Exchange Act, the shareholding of the shareholder includes his or her own shares plus the shares that he or she has delivered to a trust and has the right to decide the use of the trust property, etc. Please refer to the Market Observation Post System for information on insider’s equity declaration.
168 -
V. Individual financial statements of the Company audited and attested by CPAs in the most recent year,

Independent Auditor’s Report

To SAMPO CORPORATION:

Auditor’s opinions

We have audited the individual balance sheet of SAMPO CORPORATION as of December 31, 2020 and 2019, and the individual comprehensive income statements, individual statement of changes in shareholders’ equity, individual statements of cash flows, and notes to the individual financial statements (including significant accounting policies) for the years then ended.

In our opinion, the individual financial statements referred to above present fairly, in all material respects, the individual financial position of SAMPO CORPORATION as of December 31, 2020 and 2019, and its individual financial performance and cash flows for the years ended December 31, 2020 and 2019, in conformity with the requirements of regulations governing the preparation of financial statements by securities issuers.

Basis of an audit opinion

We concluded our 2020 audits in accordance with the regulations governing auditing and attestation of financial statements by certified public accountants and generally accepted auditing standards. We concluded our 2019 audits in accordance with the regulations governing auditing and attestation of financial statements by certified public accountants, Financial Supervisor Commission’s letter Jing-Guan-Zheng-Shen-Zi No. 1090360805 dated February 25, 2020, and generally accepted auditing standards. Our responsibilities under those standards are further described in the responsibilities of auditors for the audit of the separate financial statements. We are independent of SAMPO CORPORATION in accordance with the Code of Professional Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that our audit provides a reasonable basis for our opinion.

169 -

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the 2020 individual financial statements of SAMPO CORPORATION. These matters were addressed in the content of our audit of the individual financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on those matters.

Key audit matters of the 2020 individual financial statements of SAMPO CORPORATION are as follows:

Key Audit Matter: Authenticity of sales to hypermarket channels

For 2020, SAMPO CORPORATION’s revenues from sales to major hypermarkets is a key indicator used by management to evaluate business performance, and the effect of the recognition of related revenues on the financial statements is material. Therefore, we have determined that the recognition of the aforementioned operating revenues is a key audit matter and the related accounting policies are described in Note 4(14) to the individual financial statements.

Our auditing procedures with respect to the above matter are as follows:

Understood, evaluated and tested the effectiveness of the design and implementation of the internal control system related to revenue recognition.
In order to confirm the authenticity of the revenue, we obtained the sales revenue details of the hypermarket channel in 2020, sampled and verified original sales orders, shipping documents and invoices of the relevant transactions, and reconciled them with the recorded amounts in the accounting books.
Obtained the details of sales returns and discounts for the subsequent period from the hypermarket channel, sampled and verified the relevant certificates of sales returns and discounts, and examined the reasonableness of the returns and discounts.

Responsibilities of Management and Those in Charge of Governance of the Individual Financial Statements

Management is responsible for the preparation and fair presentation of the individual financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of individual financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the individual financial statements, the management is also responsible for assessing the ability of SAMPO CORPORATION as a going concern, disclosing as applicable, matters related to a going concern and using the going concern basis of accounting. Unless the management either intends to liquidate SAMPO CORPORATION or to cease operations, or has no other realistic alternative but to do so.

Those in charge of governance (including the Auditing Committee) are responsible for overseeing the reporting process of the financial statements of SAMPO CORPORATION.

170 -

Auditor’s Responsibilities for the Audit of the Individual Financial Statements

Our objectives are to obtain reasonable assurance about whether the individual financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue and auditor’s report. Reasonable assurance is a high level of assurance, but is not a guarantee that and audit conducted in accordance with the accounting principles generally accepted in the Republic of China will always detect a material misstatement when it exists. Material misstatement could arise from fraud or errors. If fraud or errors are considered materials, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these individual financial statements.

Identify and assess the risks of material misstatement of the individual financial statements, whether due to fraud or error, design, and perform audit procedures responsive risks, and obtain evidence that is sufficient and appropriate to provide a basis of our opinion. Fraud may involve conspiracy, forgery, deliberate omission, false declaration, or violation of internal control; therefore, the risk of material misstatement arising from fraud is higher than that caused by error.
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 internal control effective in SAMPO CORPORATION.
Assess the appropriateness of the accounting policies adopted by the management and the reasonableness of the accounting estimates and related disclosures made.
Conclude the appropriateness of the use of the going concern basis of accounting by the management, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on SAMPO CORPORATION to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the individual financial statements or, if such disclosures are inappropriate, to modify our opinion. The conclusion of the independent auditors is based on the audit evidence obtained as of the audit report date. However, future events or conditions may cause SAMPO CORPORATION to cease as a going concern.
Evaluate the overall presentation, structure, and content of the individual statements, including related notes, whether the individual statements represent the underlying transactions and events in a matter that achieves fair presentation.
Obtain sufficient and appropriate audit evidence on the financial information of business entities within SAMPO CORPORATION in order to express an opinion on the individual financial statements. The independent auditor is responsible for guiding, supervising, and implementing the audit and also is responsible for forming an opinion on the audit of SAMPO CORPORATION.
171 -

From the matters communicated with those in charge of governance, we determine those matters that were of most significance in the audit of the 2020 individual financial statements of SAMPO CORPORATION and are therefore the key audit matters. The independent auditors shall state the key audit matters in the audit report except for the specific matters prohibited from being disclosed by law and regulations, or, in rare cases, where the independent auditor decides not to have specific matters communicated in the audit report since the negative effect of such disclosure can be reasonably expected to be greater than the increase of public interest.

Deloitte and Touche Taiwan CPA Su-Huan Yu CPA: Yi-Hui Lin

Securities and Futures Bureau Approval Document No. Tai-Cai-Zheng (6) Zi No. 0920123784

Financial Supervisory Commission approval no. Jin-kwong-cheng-(6) No.: 0940161384

March 29, 2021

172 -

SAMPO CORPORATION

Individual Balance Sheet

December 31, 2020 and 2019

Unit: NT$ thousand

Code 1100 1136 1150 1160 1170 1180 1200 1210 1220 130X 1479 11XX 1517 1550 1600 1755 1780 1840 1990 15XX 1XXX Code 2100 2110 2150 2160 2170 2180 2230 2209 2219 2250 2280 2320 2399 21XX 2540 2550 2570 2580 2640 2670 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 3XXX	Assets Current assets Cash and cash equivalents (Note 6) Financial assets at amortized cost – current (Note 8) Notes receivable (Note 9) Notes receivable – related parties, net (Notes 9 and 26) Accounts receivable (Note 9) Accounts receivable – related parties, net (Notes 9 and 26) Other receivables (Note 9) Other receivables – related parties, net (Notes 9 and 26) Current tax assets (Note 22) Inventory (Note 10) Other current assets (Note 14) Total current assets Non-current assets Financial assets measured at fair value through other comprehensive income – non-current (Note 7) Investments accounted for using the equity method (Note 11) Property, plant and equipment (Note 12) Right-of-use assets (Note 13) Intangible assets Deferred tax assets (Note 22) Other non-current assets (Note 14) Total non-current assets Total assets Liabilities and equity Current liabilities Short-term borrowings (Note 15) Short-term bills payable (Note 15) Notes payable Notes payable -related parties (Note 26) Accounts payable Accounts payable – related parties (Note 26) Current tax liabilities (Note 22) Other payables (Note 16) Other payables – related parties (Note 26) Provisions for liabilities – current (Note 17) Lease liabilities – current (Note 13) Long-term loans due within one year or one business cycle (Note 15) Other current liabilities (Note 16) Total current liabilities Non-current liabilities Long-term borrowings (Note 15) Provisions for liabilities – non-current (Note 17) Deferred tax liabilities (Note 22) Lease liabilities – non-current (Note 13) Defined benefit liabilities – non-current (Note 18) Other non-current liabilities (Note 16) Total non-current liabilities Total liabilities Equity (Note 19) Share capital Common stock capital Additional paid-in capital Retained earnings Statutory reserves Special reserves undistributed earnings Total retained earnings Other equity Treasury shares Total equity Total Liabilities and Equity		December 31, 2020	December 31, 2020	% 4 2 1 - 2 - - - - 9 4 22 4 37 35 - 1 1 - 78 100 - - 1 - 4 1 1 3 - 1 - - 3 14 8 1 6 - 3 1 19 33 33 1 4 14 21 39 1) 5) 67 100		December 31, 2019	December 31, 2019
			Amount $ 431,790 217,907 110,406 - 261,533 437 11,417 4,437 490 1,079,490 406,870 2,524,777 418,903 4,329,208 4,020,496 51,344 66,975 155,823 12,865 9,055,614 $ 11,580,391 $ - - 135,551 - 480,236 120,473 74,251 363,344 11,693 72,845 62,322 - 325,725 1,646,440 900,000 106,481 729,313 27,615 368,389 36,856 2,168,654 3,815,094 3,872,000 171,699 485,157 1,592,788 2,379,146 4,457,091 142,666) 592,827) 7,765,297 $ 11,580,391				Amount $ 717,639 179,880 104,909 9 257,951 249 9,182 17,285 490 1,215,831 255,806 2,759,231 515,225 4,043,703 3,883,757 59,921 82,603 139,571 48,675 8,773,455 $ 11,532,686 $ 60,000 489,785 163,410 68,267 305,986 28,652 - 297,853 11,754 69,589 15,440 575,000 340,457 2,426,193 1,050,000 106,390 820,434 44,919 395,801 203,614 2,621,158 5,047,351 3,872,000 151,374 411,261 1,688,706 1,141,276 3,241,243 170,475) 608,807) 6,485,335 $ 11,532,686		%
		( (		( (		( (		( (	6 2 1 - 2 - - - - 11 2 24 4 35 34 1 1 1 - 76 100 - 4 1 1 3 - - 3 - 1 - 5 3 21 9 1 7 - 4 2 23 44 34 1 3 15 10 28 2) 5) 56 100

The notes attached shall constitute an integral part of this individual financial statement.

Chairman: Chen Mao-Bang Industry and Commerce Managerial officer: Hsu, Ching-Chao Development Foundation

Accounting officer: Chiang, Chuan-Tien

173 -

SAMPO CORPORATION

Individual Comprehensive Income Statement

January 1 to December 31, 2020 and 2019

Unit: NTD thousand, except Earnings Per Share (NTD)

Code Operating revenues 4100 Sales revenues 4600 Service revenues 4800 Other operating revenues 4000 Total operating revenues 5000 Operating costs 5900 Gross profits Operating expenses 6100 Marketing expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment loss (gain on reversal) 6000 Total operating expenses 6900 Net Operating profits Non-operating income and expenses 7100 Interest income (Note 21) 7010 Other income (Note 21) 7020 Other gains and losses (Note 21) 7050 Financial costs 7070 Share of subsidiaries, affiliates and joint ventures accounted for using the equity method 7000 Total non-operating income and expenses		2020		% 96 4 - 100 79 21 9 6 1 - 16 5 - 1 20 - 5 26		2019
								%
								96 4 - 100 80 20 10 5 2 - 17 3 - 1 5 - 3 9

(Continued on next page)

174 -

(Continued from previous page)

Code 7900 Net profits before tax 7950 Income tax expense (Note 22) 8200 Net profits for the year Other comprehensive income 8310 Items not to be reclassified as profit or loss: 8311 Remeasurement of defined benefit plan 8316 Unrealized gains or losses on investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries, affiliates and joint ventures accounted for under equity method 8360 Items that may be reclassified subsequently under profit or loss 8380 Share of other comprehensive income of subsidiaries, affiliates and joint ventures accounted for under equity method 8300 Other comprehensive income of the current year (net amount after taxation) 8500 Total amount of comprehensive income of the current year Earnings per share (Note 23) 9750 Basic 9850 Diluted		2020

The notes attached shall constitute an integral part of this individual financial statement.

Chairman: Chen Mao-Bang Managerial officer: Accounting officer: Industry and Commerce Hsu, Ching-Chao Chiang, Chuan-Tien Development Foundation

175 -

SAMPO CORPORATION

Individual Statements of Changes in Shareholders’ Equity

January 1 to December 31, 2020 and 2019

Unit: NT$ thousand

				Equity attributable to shareholders ofthe company							Total equity
Capital	stock Capital stock $ 3,872,000 - - - - - - - - - - - 3,872,000 - - - - - - - - - - $ 3,872,000		Retained earnings Capital surplus Legal reserve Special reserve Unappropriated earnings $ 132,933 $ 345,080 $ 1,917,160 $ 840,989 - - ( 228,454 ) 228,454 - 66,181 - ( 66,181 ) - - - ( 531,160 ) 3,683 - - - - - - 738,963 - - - ( 32,328) - - - 706,635 - - - ( 1,190 ) 14,824 - - - 66 ) - - - - - - ( 36,271) 151,374 411,261 1,688,706 1,141,276 - - ( 95,918 ) 95,918 - 73,896 - ( 73,896 ) - - - ( 570,600 ) 752 - - - - - - 1,795,993 - - - ( 9,545) - - - 1,786,448 3,670 - - - 15,882 - - - 21 - - - $ 171,699 $ 485,157 $ 1,592,788 $ 2,379,146 The notes attached shall constitute an integral part of this individual financial statement.	Retained earnings	Otherequity Exchange differences on translation of financial statements of foreignoperations Unrealized gain or loss on financial assets measured at fair value through other comprehensive income ( $ 258,372 ) ( $ 66,138 ) - - - - - - - - - - ( 47,026) 164,790 ( 47,026) 164,790 - - - - - - - 36,271 ( 305,398 ) 134,923 - - - - - - - - - - 29,136 ( 1,327) 29,136 ( 1,327) - - - - - - ($ 276,262) $ 133,596			Treasury shares $ 624,787 ) - - - - - - - 15,980 - - - 608,807 ) - - - - - - - 15,980 - - $ 592,827)
					Exchange differences on translation of financial statements of foreignoperations ( $ 258,372 ) - - - - - ( 47,026) ( 47,026) - - - - ( 305,398 ) - - - - - 29,136 29,136 - - - ($ 276,262)
Number of Shares 387,200,000 - - - - - - - - - - - 387,200,000 - - - - - - - - - - 387,200,000
		(			( ( ( ( (	( ( (	( ( (		( ( (	( ( (	$ 6,158,865 - - 531,160 ) 3,683 738,963 85,436 824,399 14,790 14,824 66 ) - 6,485,335 - - 570,600 ) 752 1,795,993 18,264 1,814,257 19,650 15,882 21 $ 7,765,297

Chairman: Chen Mao-Bang Industry and Commerce Development Foundation

Managerial officer: Hsu, Ching-Chao

Accounting officer: Chiang, Chuan-Tien

176 -

SAMPO CORPORATION

Individual Statements of Cash Flow

January 1 to December 31, 2020 and 2019

Unit: NT$ thousand

Code Cash flow from operating activities A10000 Current year net profit before taxation A20010 Profits and loss A20100 depreciation expense A20200 Amortization expenses A29900 Expected credit impairment loss (gain on reversal) A20900 Financial costs A21200 Interest income A21300 Dividend income A22400 Share of profit or loss of subsidiaries, affiliates and joint ventures accounted for using the equity method A22500 Gain on disposal of property, plant and equipment A23000 Gain on disposal of non-current assets held for sale A23700 Loss on decline in value of inventories and slow moving (gain on reversal) A22800 Lease modification gain A30000 Net change in operating assets and liabilities A31130 Notes receivable A31140 Notes receivable – related party A31150 Accounts receivable A31160 Accounts receivable – related parties A31180 Other receivables A31190 Other receivables – related parties A31200 Inventory A31240 Other current assets A32130 Notes payable A32140 Notes payable – related party A32150 Accounts payable A32160 Accounts payable – related parties A32180 Other payables A32190 Other payables – related parties A32200 Provision for liabilities	2020 $ 2,009,550 72,353 39,545 1,841 21,007 ( 7,651 ) ( 7,738 ) ( 306,741 ) ( 1,371,915 ) - ( 9,209 ) ( 92 ) ( 5,696 ) 12 ( 6,887 ) ( 196 ) ( 1,858 ) 12,848 145,550 ( 151,064 ) ( 27,859 ) ( 68,267 ) 174,655 91,821 67,322 ( 61 ) 3,347	2019
		$ 758,991 78,658 42,979 ( 3,024 ) 28,018 ( 23,564 ) ( 2,662 ) ( 175,213 ) ( 561 ) ( 361,486 ) 4,903 ( 25 ) 54,902 254 ( 29,864 ) 1,656 1,004 3,399 263,153 ( 28,596 ) ( 42,880 ) ( 5,131 ) 29,684 4,633 15,935 ( 16 ) ( 3,195 )

(Continued on next page)

177 -

(Continued from previous page)

Code A32230 Other current liabilities A32240 Net defined benefit liabilities A33000 Cash generated from operating activities A33100 Interest received A33300 Interest paid A33500 Income tax paid AAAA Net cash inflow from operating activities Cash flow from investment activities B00200 Disposal of financial assets at fair value through other comprehensive income B00040 Acquisition of financial assets measured at amortized cost B01800 Acquisition of investment accounted for using the equity method B02400 Refund of share price for capital reduction of subsidiaries accounted for using the equity method B02600 Disposal of non-current assets held for sale B02700 Purchase of property, plant, and equipment B02800 Proceeds from disposal of property, plant and equipment B03700 Decrease in Refundable deposits B04200 Decreased in other receivables – related parties B04500 Purchase of intangible assets B06800 Decrease in other non-current assets B07600 Receipt of dividends from subsidiaries, affiliates and joint ventures B07600 Receipt of other dividends BBBB Net cash inflow from investment activities Cash flow from financing activities C00200 Decrease in short-term loans C00500 Short-term bills payable C01600 Borrowing of long-term loans C01700 Repayments of long-term borrowings C04300 Increase (decrease) in other non-current liabilities C04500 Payment of dividends C05100 Treasury stock purchased by employees C04020 Lease principal repayment CCCC Net cash outflow from financing activities	2020 ( $ 14,732 ) ( 37,620) 622,265 7,651 ( 21,437 ) ( 246,679) 361,800 - ( 38,027 ) ( 206,255 ) - - ( 564,476 ) 1,792,250 34,099 - ( 23,917 ) 1,810 221,625 7,738 1,224,847 ( 60,000 ) ( 489,785 ) 900,000 ( 1,625,000 ) ( 19,443 ) ( 570,600 ) 19,650 ( 26,704) ( 1,871,882)	2019
		( $ 52,359 ) ( 46,410) 513,183 23,564 ( 28,284 ) ( 11,609) 496,854 11,672 ( 179,880 ) ( 206,441 ) 578,895 481,835 ( 389,886 ) 2,677 498 120,000 ( 28,582 ) 1,262 301,770 2,662 696,482 ( 350,000 ) ( 59,747 ) 650,000 ( 725,000 ) 39,322 ( 531,160 ) 14,790 ( 15,523) ( 977,318)

(Continued on next page)

178 -

(Continued from previous page)

Code DDDD Impact of changes in exchange rate on cash and cash equivalents EEEE Current cash and cash equivalents increase (decrease) E00100 Cash and cash equivalents balance – beginning of year E00200 Cash and cash equivalents balance – end of year

The notes attached shall constitute an integral part of this individual financial statement.

Chairman: Chen Mao-Bang Industry and Commerce Development Foundation

Managerial officer: Accounting officer: Hsu, Ching-Chao Chiang, Chuan-Tien

179 -

SAMPO CORPORATION

Individual Notes to financial statements

January 1 to December 31, 2020 and 2019

(Unless otherwise provided, Unit: NTD thousand)

1. Company History

The individual financial statements are presented in the Company’s functional currency – NTD.

2. Financial reporting date and procedures

The individual financial statements were approved by the Board of Directors on March 24, 2021.

3. Application of new and revised standards and interpretation

(1) First-time application of International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations (“IFRICs” and “SICs”) (hereinafter collectively referred to as the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (hereinafter referred to as the “FSC”).

The adoption of the IFRSs endorsed and issued into effect by the FSC will not result in significant changes in the Company’s accounting policies, except as indicated below:

Amendment to “Definition of a business” in IFRS 3

This amendment shall apply to the Company’s transactions occurring after January 1, 2020. This amendment requires that the business shall consist of at least inputs and significant processes that together make a significant contribution to the ability to generate output. The determination of whether the “process of acquisition” is material will vary depending on whether there is an output on the date of acquisition. In addition, a new and simplified way of assessing the consistency of the acquired activities and asset portfolio with the business – the concentration test – is available for companies to choose.

180 -
Amendments to IAS 1 and IAS 8 “Definition of Materiality”

Effective January 1, 2020, the Company adopted the amendment to use “reasonably expected to affect users” as the threshold of materiality and adjusted the disclosure of consolidated financial statements to remove immaterial information that may obscure material information.

(2) IFRSs endorsed by the Financial Supervisory Commission (hereinafter referred to as “FSC”) applicable for 2021.

Effective Date per IASB The new/amended/revised standards or interpretation publication Amendment to IFRS 4 “Extension of Provisional Effective from the date of Exemption for Application of IFRS 9” publication Amendments to the IFRS 9, IAS 39, and IFRS 7, IFRS Effective for annual 4 and IFRS 16 “Interest Rate Benchmark Reform – reporting periods Phase II” beginning after January 1, 2021 Amendment to IFRS 16 “Rent Reduction associated Effective for annual with COVID-19 pandemic.” reporting periods beginning after June 1, 2020.

(3) The IFRSs released by the IASB but not yet approved and announcement effective by the Financial Supervisory Commission

IASB publication effective The new/amended/revised standards or interpretation date (Note 1) “2018-2020 IFRSs improvements” January 1, 2022 (Note 2) Amendment to IFRS 3 “Update the index of the conceptual framework.” January 1, 2022 (Note 3) Amendment to IFRS 10 and IAS 28, “Sale or Undefined Contribution of Assets between an Investor and its Affiliate or Joint Venture and Investment in Affiliates.” IFRS 17 “Insurance Contracts” January 1, 2023 Amendment to IFRS 17 January 1, 2023 Amendment to IAS 1 “Classification of Liabilities as January 1, 2023 Current or Noncurrent” Amendment to IAS 1 “Disclosure of Accounting January 1, 2023 (Note 6) Policies.” Amendment to IAS 8 “Definition of Accounting January 1, 2023 (Note 7) Estimates.” Amendment to IAS 16 “Property, plant and January 1, 2022 (Note 4) equipment: price before reaching the intended state of use” Amendment to IAS 37 “Onerous Contracts – Cost of January 1, 2022 (Note 5) Performing Contracts.”

181 -
Note 1: Unless otherwise stated, the aforementioned new/amended/revised standards or interpretation are effective for annual reporting periods beginning after the respective dates.
Note 2: The amendment to IFRS 9 applies to swaps or changes in the terms of financial liabilities that occur in annual reporting periods beginning after January 1, 2022; the amendment to IAS 41, “Agriculture,” applies to fair value measurements in annual reporting periods beginning after January 1, 2022; and the amendment to IFRS 1, “First-time Adoption of IFRSs,” applies retrospectively to annual reporting periods beginning after January 1, 2022.
Note 3: This amendment applies to business mergers for which the acquisition date falls within the annual reporting period after January 1, 2022.
Note 4: This amendment applies to plant, property and equipment that begins to operate in the manner such as location and condition expected by management after January 1, 2021.
Note 5: This amendment applies to contracts with unfulfilled obligations as of January 1, 2022.
Note 6: The application of this amendment is deferred for annual reporting periods beginning after January 1, 2023
Note 7: This amendment applies to changes in accounting estimates and changes in accounting policies that occur in annual reporting periods beginning after January 1, 2023.
Amendment to IFRS 10 and IAS 28, “Sale or Contribution of Assets between an Investor and its Affiliate or Joint Venture and Investment in Affiliates.”

The amendment provides that if the Company sells or contributes an asset to an affiliated party (or joint venture), or if the Company loses control of a subsidiary but retains significant influence (or joint control) over the subsidiary, the Company recognizes all of the gains or losses resulting from such transactions if the aforementioned asset or former subsidiary meets the definition of “business merger” for “business” under IFRS 3.

In addition, if the Company sells or contributes assets to affiliated companies (or joint ventures), or the Company losses the control over a subsidiary but retains significant influence on the subsidiaries (or joint control), and if the aforementioned assets or subsidiary not in compliance with the definition of IFRS 3 “Business,” the Company is to recognize the profit and loss of the transactions only within the equity scope of the affiliated companies (or joint ventures) irrelevant to the investors, in other words, the profit and loss attributable to the Company should be offset.

Amendment to IAS 1 “Classification of Liabilities as Current or Noncurrent”

The amendment aims to clarify whether a liability is classified as noncurrent; the Company should assess whether it has the right to defer settlement at the end of the reporting period for at least 12 months after the reporting period. If the Company has such a right as of the end of the reporting period, the liability is classified as noncurrent whether or not the Company exercises its right to defer settlement of a liability. The amendment aims to

182 -

clarify if the Company is required to comply with certain conditions in order to have the right to defer settlement of a liability. The Company must have complied with specific conditions as of the end of the reporting period, even if the lender tests whether the Company has complied with those conditions at a later date.

The amendment provides the purpose to clarify that settlement refers to the transfer to the counterparty of cash, other economic resources or equity instruments of the Company that results in the extinguishment of the liability. However, if the terms of the liability may result in transferring the Company’s equity instruments at the option of the counterparty, and if the option is separately recognized in equity in accordance with IAS 32, “Financial Instruments: Presentation,” the above-mentioned provisions do not affect the classification of the liability.

3. Annual Improvements 2018 – 2020 Cycle

Amendment to IFRS 3 “Update the index of the conceptual framework.”

Amendment to IAS 16 “Property, plant and equipment: price before reaching the intended state of use”

183 -
Amendment to IAS 37 “Onerous Contracts – Cost of Performing Contracts.”

When the amendment is first applied, the Company will recognize the cumulative effect as retained earnings at the date of initial application.

Amendment to IAS 1 “Disclosure of Accounting Policies.”

The amendment specifies that the Company shall determine the material accounting policy information to be disclosed based on the definition of materiality. Accounting policy information is considered material if it could reasonably be expected to affect the decisions of the primary users of the general-purpose financial statements based on those financial statements. The amendment also clarifies:

Accounting policy information related to immaterial transactions, other events or circumstances is immaterial and the Company is not required to disclose such information.
The Company may determine that related accounting policy information is material because of the nature of the transactions, other events or circumstances, even if the amount is not material.
Not all accounting policy information related to significant transactions, other events or circumstances is material.

(1) A change in the Company’s accounting policy during the reporting period that results in a material change in financial statement information;
(2) The Company selects applicable accounting policies from among the options permitted by the standards.
(3) Due to the lack of specific standards, the Company establishes accounting policies in accordance with IAS 8 “Accounting Policies, Changes and Errors in Accounting Estimates”;
(4) The Company discloses the relevant accounting policies that require the application of significant judgments or assumptions; or
(5) That it involves complex accounting requirements when users of financial statements rely on such information to understand such significant transactions, other events or circumstances.
184 -

8. Amendment to IAS 8 “Definition of Accounting Estimates.”

The amendment explicitly specifies that accounting estimate represents the monetary amounts in the financial statements that are subject to measurement uncertainty. In applying accounting policies, the Company may need to measure financial statement items using monetary amounts that are not directly observable but must be estimated, and therefore measurement techniques and input values are required to create accounting estimates for this purpose. The effect of changes in measurement techniques or input values on accounting estimates that are not corrections of prior period errors are accounted for as changes in accounting estimates.

Further to the aforementioned influence, the Company will continue to evaluate the effect of the amendment to other IFRSs on the financial positions and performance of the Company to the date this parent company only financial statement approved and released, and will make appropriate disclosure after the evaluation.

4. Summary of significant accounting policies

(1) Compliance Statement

The individual financial statements were prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers.”

(2) Basis of preparation

The evaluation of fair value could be classified into Level 1 to Level 3 by the observable intensity and importance of related input value:

Level 1 input value: refers to the quotation of the same asset or liability in an active market as of the evaluation (before adjustment).
Level 2 input value: refers to the direct (the price) or indirect (inference of price) observable input value of asset or liability further to the quotation of Level 1.
Level 3 input value: the unobservable input value of asset or liability.

In preparing its financial statements, the Company uses the equity method to account for its investment in subsidiaries, affiliates and joint ventures. In order to make the profit or loss for the year, other comprehensive income and equity in the individual financial statements the same as the profit or loss for the year, other comprehensive income and equity attributable to the owners of the Company in the consolidated financial statements, certain accounting differences between the standalone basis and the consolidated basis are adjusted for “investments accounted for using the equity method,” “share of profit or loss of subsidiaries and affiliates accounted for using the equity method,” “share of other comprehensive income and loss of subsidiaries and affiliates accounted for using the equity method” and related equity items. Other comprehensive income of subsidiaries and affiliates using the equity method” and related equity items.

185 -
(3) Standards in differentiating current and non-current assets and liabilities. Current assets including:
Assets held mainly for trading purpose:
Assets to be realized within 12 months after the balance sheet date; and
Cash and cash equivalents (not including those that are limited to exchange or repay liabilities exceeding 12 months after the balance sheet date).

Current liabilities include:

Liabilities held for trading purposes;
The liabilities to be liquidated upon due within 12 months after the balance sheet date (those with long-term refinancing or payment term rearrangement completed from the balance sheet date to the financial reports approved and published date are also classified as current liabilities), and
Liabilities with the repayment deadline that cannot be unconditionally deferred to at least 12 months after the balance sheet date. Where the liabilities might be paid off at the discretion of the other party through the tools of the issuance equity, the classification would remain unaffected.

For those that are not current assets or liabilities above are classified as noncurrent assets or liabilities.

(4) Foreign currency

For the transactions conducted in a currency other than the Company’s functional currency (foreign currency), it is to be translated to the functional currency in accordance with the exchange rate on the transaction date when preparing the individual financial statements.

The foreign non-currency items measured at historical cost are translated in accordance with the exchange rate on the transaction date without the need for a translation again.

186 -

Upon preparation of the individual financial reports, the assets and liabilities of overseas operating institutions (including the subsidiaries, affiliates and joint ventures in the countries of business operation or those using currencies different from the Company’s) were converted to NTD based on the exchange rate quoted on every balance sheet date. Income and expense items are translated in accordance with the current average exchange rates and the exchange differences are booked in the other comprehensive profit or loss.

If the Company disposes of all interests in a foreign operation, or disposes of a portion of an interest in a subsidiary of a foreign operation but loses control, or disposes of a retained interest in a joint venture or affiliate of a foreign operation that is a financial asset and is accounted for under the accounting policy for financial instruments, all cumulative translation differences related to the foreign operation are reclassified to profit or loss.

If the partial disposal of a foreign operating subsidiary does not result in a loss of control, the accumulated exchange differences are included in equity transactions on a pro rata basis, but are not recognized in profit or loss. In any other event of partial disposal of an overseas operating institution, the accumulated difference in foreign exchange was reclassified to profit and/or loss pro rata to the percentage of disposal.

(5) Inventory

Inventory includes raw materials, supplies, finished goods and work-in-process. Inventory is valued in accordance with the lower of cost or net cash value. When comparing cost and net cash value, except for the homogeneous inventories, it is based on the itemized lower of cost or net cash value. Net realizable value refers to the estimated sale price under normal circumstances net of the estimated cost needed to complete the project and the estimated expenses needed to complete the sale. The cost of inventory is calculated using the weighted average method.

(6) Investment in subsidiaries

The Company has the investment in subsidiaries handled in accordance with the equity method.

Subsidiaries are the entities controlled by the Company.

Under the equity method, investments were originally recognized at cost; the book value after the acquisition date fluctuates along with the distribution of profit or loss from the subsidiaries and other comprehensive profit or loss. In addition, for the changes in the affiliated company’s equity, the Company is entitled to have it recognized proportionately to the shareholding.

When the Company’s change in the ownership of the subsidiary does not result in loss of control, it is treated as an equity transaction. The difference between the book amount of the investment and the fair value of the consideration paid or received shall be directly recognized as equity.

When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary (including the carrying amount of the subsidiary under the equity method and other long-term interests that are in substance a component of the

187 -

Company’s net investment in the subsidiary), the Company continues to recognize losses in proportion to its equity in the subsidiary.

Acquisition costs in excess of the Company’s share of net identifiable assets and liabilities (i.e. fair value) in a subsidiaries on the date of acquisition are recognized as goodwill. This goodwill includes book value of the investment and is not amortized. Share of net identifiable assets and liabilities (i.e. fair value) in subsidiaries that exceeds acquisition cost on the date of acquisition is recognized as gains for the current year.

In assessing impairment, the Company based on the cash drivers of the financial statements and compared the recoverable amount and book value. If the amount of recoverable assets increased in the future, the reversal of impairment shall be recognized as income. The book value of the reversal of impaired assets shall not exceed the book value before recognition for impairment net of amortization. Subsequent reversal of impairment loss is not allowed.

In the event of loss of control over the subsidiary, the Company shall measure the fair value of the residual investment in the subsidiary on the date loss of control over the subsidiary. The difference between the fair value of the residual investment and the amount of disposal and the book amount of the investment on the date loss of control over the subsidiary is recognized in the profit and loss of the year. In addition, the accounting treatment for the amounts recognized in the other comprehensive income that are related to the subsidiary is same as the accounting principle to be complied with while the Company directly disposing the relevant assets or liabilities.

The unrealized concurrent trade between the company and the subsidiaries stated in the financial statement of individual entities shall be removed. The profit or loss resulting from the countercurrent, and side-stream transactions between the Company and the subsidiary are recognized in the individual financial statement within the range irrelevant with the Company’s interest in the subsidiary.

(7) Investments in affiliates

The company has a significant influence on an affiliated company that is not a subsidiary or joint venture.

The Company adopts the equity method for investment in affiliates.

Under the equity method, investments in the affiliated companies were originally recognized at cost; the book value after the acquisition date fluctuates along with the distribution of profit or loss from the affiliated company and other comprehensive profit or loss. In addition, the changes in the equity of affiliates shall be recognized in proportion to the proportion of shareholding.

Acquisition costs in excess of the Company’s share of net identifiable assets and liabilities (i.e. fair value) in an affiliated company on the date of acquisition are recognized as goodwill. This goodwill includes book value of the investment and is not amortized. Share of net identifiable assets and liabilities (i.e. fair value) in an affiliated company that exceeds acquisition cost on the date of acquisition is recognized as gains for the current year.

When affiliates issue new shares, if the Company fails to subscribe stock share proportionally to their shareholding, resulting in changes in shareholding ratio and thus causing changes in net equity investment, the increase or decrease amount should be adjusted to the additional paid-in capital – recognizing changes in net

188 -

equity of affiliates, and joint under the equity method and investment under equity method. If the Consolidated Company’ did not subscribe to the new shares pro rata to the shareholding percentages and led to a decrease of the shareholding percentages subscribed to or obtained from the affiliate, nevertheless, the amount of other comprehensive income so recognized was reclassified pro rata to the decrease ratio in the affiliate. The accounting management was on the grounds same as the grounds the affiliate must comply with if it directly disposed assets or liabilities. If the aforementioned adjustment must be debited into capital reserve where the balance of capital reserve yielded by the investment in equity method, the difference was debited as retained earnings.

In the event that the Company’s shares of loss in the affiliates equal to or exceed its equity in the affiliates (including the book value of investment in the affiliates in equity method and other long-term interest of the Company’ in the investment composition of the affiliates), the Company’ discontinued recognition of the further losses. The Company’ recognized extra losses and liabilities only in the event of occurrence of legal obligations, presumed obligations or within the scope that the Company’ had made payment on behalf of the affiliate.

When assessing impairments, the Company treats the entire account (including goodwill) as a single asset and tests for impairment by comparing it with recoverable amount and book value. Any impairment losses recognized are presented as part of the book value of the investment. Any reversal of the impairment loss can be recognized within the range of the recoverable amount of the subsequently increased investment.

The Company ceases to adopt the equity method from the date its investment ceases to be an affiliate, and its retained interest in the former affiliate is measured at fair value. The difference between the fair value and the disposal price and the carrying amount of the investment on the date of cessation of the equity method is recognized in profit or loss for the current period. Furthermore, all relevant amounts relevant to the affiliates recognized in other comprehensive income were managed on the accounting grounds same as the grounds which it should comply with if the affiliates directly disposed the relevant assets or liabilities. If the investment in affiliates become an investment in the joint venture, or the investment in the joint venture becomes an investment in affiliates, the Company will continue using the equity method and will not have the reserved equity remeasured.

The profit or loss resulting from the countercurrent, downstream and sidestream transactions between the Company and the affiliated company is recognized in the individual financial statement within the range that is irrelevant to the Company’s interest in the affiliated company.

(8) Property, Plant and Equipment

Property, plant and equipment are recognized as costs, and they will be measured by the amount after the costs less the amount of accumulated depreciation and accumulated impairment losses afterwards.

189 -

Those real estate, plant buildings, equipment & facilities under construction were recognized at the amount of the costs after deducting the loss in the accumulated impairment. Cost includes professional service fees and loan costs that qualify for capitalization. When such assets are completed and reach expected use status, such assets will be classified to proper items under real property, plant and equipment and the provision of depreciation shall begin.

The depreciation of each material part of real estate, plants, and equipment should be appropriated independently in accordance with the useful year and a straight-line method. The Company shall review the estimation of life span, residual value and depreciation method at least once a year and extend the effect of changes in applicable accounting policy.

In the case of delisting real estate, plants, and equipment, the difference between
the net disposal price and the book value of the asset is recognized in profit or loss.
(9) Intangible assets
Acquired separately

Derecognition

In removing intangible assets, the difference between the net proceeds of disposition and the book value shall be recognized as income.

(10) Impairment of tangible and intangible assets (except for goodwill).

The Company at each balance sheet date is to assess whether there is any indication of impairment occurring to the tangible and intangible assets (except for goodwill). If there is any indication of impairment occurring, the recoverable amount of the asset should be estimated. If the recoverable amount of an individual asset cannot be estimated, the Company is to estimate the recoverable amount of the respective cash-generating unit. The community assets are amortized to the minimum cash generating unit cluster reasonably and consistently.

The intangible asset with indefinite useful lives and not yet available for use should be tested for impairment at least annually or should be tested when there is an indication of impairment.

190 -

When the impairment loss was reversed subsequently, the book amount of the asset or cash-generating unit is increased to the adjusted recoverable amount, but the increased book amount may not exceed the book value of the asset or cashgenerating unit or Contract cost-related assets without recognizing the impairment loss in prior periods (net of amortization or depreciation). The reversed impairment loss is recognized in the profit or loss.

(11) Non-current assets held for sale

(12) Financial instrument

When the Company has become a party to the instrument contract, the financial assets and financial liabilities are to be recognized in the individual balance sheet.

1. Financial asset

The regular way of purchase or sale of financial assets are recognized and derecognized based on the accounting on the transaction date.

(1) Classification of measurement

A. Financial assets at fair value through profit and loss

191 -

B. Financial assets based on cost after amortization

If the financial assets of the Company met both of the following conditions, classify as financial assets on the basis of cost after amortization:

a. Financial assets held under particular mode of operation and the purpose of holding is for the collection of cash flow from contracts; and
b. Cash flow generated on particular dates deriving from the contacts and the cash flow is wholly for the payment of principal and interest accrued from the outstanding amount of the principal.

Interest income will be the product of effective interest rate and total book value of financial assets except under the following two conditions:

a. The interest income of financial assets procured or initiated under credit impairment will be the product of the effective interest rate after credit adjustment and the cost of financial assets after amortization.
b. Financial asset that has subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset.

192 -
C. Investment of equity instruments at fair value through other comprehensive income

The Company may make an irrevocable choice at the time of initial recognition for designating the investment of equity instruments not available-for-sale and not recognized by the acquirer under corporate merger and acquisition or with consideration at fair value through other comprehensive income for measurement.

The investment of equity instruments at fair value through other comprehensive income is measured at fair value. Subsequent changes in fair value will be recognized as other comprehensive income and accumulated into other equity. In the disposition of assets, accumulated gains or loss shall be directly transferred to retained earnings without classification as income.

(2) Impairment of financial assets

The Company assesses financial assets (including accounts receivable) measured at amortized cost at each balance sheet date based on expected credit losses.

193 -

(3) The derecognition of financial assets

2. Equity instrument

An equity instrument issued by the Company is recognized for an amount after deducting the direct issuing cost from the proceeds collected.

The Company’s equity retrieved is debited or credited to the equity. The Company’s equity purchased, sold, issued, or cancelled is not recognized in the profit or loss.

Financial liability
(1) Subsequent measurement

All financial liabilities are evaluated at the amortized cost using the effective interest method.

(2) Derecognition of financial liabilities

(13) Provision for liabilities

194 -

Warranty

Product warranties and warranties that promise to customers that the delivered product is as specified in the contract and will work as specified in the contract, shall be measured based on management’s best estimate on the cost to settle the Company’s obligation, and such warranties shall be recognized upon recognition of revenue from the corresponding products.

(14) Recognition of revenue

The Company, after identifying the performance obligations, had the transaction price amortized to each performance obligation and recognized as income when the performance obligations were fulfilled.

Commodity sales revenue

Revenue from merchandise sales is derived from sales of electronics, electrochemicals, telecommunications, electrical materials, information products and audio products. The Company recognizes revenue and accounts receivable at the point of delivery of electronics, electrochemicals, telecommunication, electrical materials, information products and audio products to the customer’s designated location, at the time of shipment or at the time of pickup by the customer, when the customer has the right to set the price and use the products and has the primary responsibility for reselling the products and bears the risk of obsolescence of the products. Revenue from the sale of products in self-operated stores is recognized when the products are purchased by customers. Revenue from Internet sales is recognized when the products arrive at the customer’s designated location. Advanced receipts for Internet sales are recognized as contract liabilities until the products arrive.

When the material is supplied for processing, the ownership of the processed product is not transferred; therefore, the income is not recognized when the material is supplied.

2. Licensing revenue

The licensing revenue is determined based on the actual sales volume for trademark licensing transaction.

(15) Leases

The Company assesses whether or not the arrangement is (or includes) a lease arrangement on the agreement date

The Company is the lessor.

195 -

2. The Company is the lessee.

(16) Borrowing costs

In addition to the transaction stated in the preceding paragraph, all other loan costs are recognized as profit and loss upon occurring.

(17) Employee welfare
Short-term employee benefits

Liabilities relating to short-term employee benefits are measured by the non-discounted amount of the expected payment in exchange for employee services.

196 -

2. Post-employment benefits

Under the defined contribution pension plan, the pension amount appropriated during the service years of the employees is recognized as an expense.

The defined cost of benefit for defined benefit retirement plan (including the cost of service, net interest, and reevaluation) is based on the actuary of projected unit method. The net interests of the service cost (including the service cost for the current period) and net defined benefit liability (asset) are recognized as employee benefit expenses when they occur. The value of second measurement (including the profits and loss under actuary and the return on assets of the plan net or interest) shall be recognized as other comprehensive incomes and as retained earnings, if realized. No reclassification as profits and loss in subsequent periods.

Termination benefits

The Company has termination benefit liability recognized when the termination benefit contract cannot be revoked or when recognizing the related reorganization cost (whichever is sooner).

(18) Share-based payment arrangement

- Equity Settled Share based Payment Agreement to Employees

The Company revises the estimated number of equity instruments expected to be vested at each balance sheet date. If the original estimate is revised, the effect is recognized in profit or loss so that the accrued expenses reflect the revised estimate, with a corresponding adjustment to capital surplus – employee stock options.

(19) Income tax

Income tax expense is the sum of the current income tax and deferred income

tax.

Income tax expenses in the current period

The adjustment to prior period income tax payable is booked as current income tax.

197 -

2. Deferred tax

Deferred tax is computed in accordance with the temporary differences between the book value of assets and liabilities and the tax bases of taxable income.

All taxable provisional differences relevant to the investment in subsidiaries and affiliates were recognized as deferred income tax liabilities, except an event while the Company’ could control the time point of recovery of the control over the provisional difference or while the said provisional difference would be very likely not recoverable in the foreseeable future. The deductible temporary differences related to such investments are recognized as deferred income tax assets when there is likely a sufficient taxable income available for realizing a temporary difference and within the expected reverse in the foreseeable future.

Deferred income tax assets and liabilities are measured in accordance with the expected liability liquidation or the tax rate in the period when the asset is realized. The tax rate is based on the tax rate and tax laws that are legislated or substantively legislated at the balance sheet date. The measurement of deferred income tax liabilities and assets reflects the tax effect resulting from the book amount of the assets and liabilities expected to be recovered or liquidated at the balance sheet date.

3. Current & deferred income taxes

If the current income tax or deferred income tax is resulting from a business merger, the income tax effect is included in the accounting process for business merger

198 -

5. Main source of significant accounting judgment, estimates and assumptions uncertainty

6. Cash and cash equivalents

and future periods. Cash and cash equivalents
Cash on hand and working capital Bank checks and demand deposits Cash equivalents (Investment with the original maturity date within three months) Bonds under repurchase agreement Bank time deposit	December31,2020 $ 2,885 378,905 50,000 - $ 431,790	December31,2019
			$ 2,260 235,699 59,960 419,720 $ 717,639

The interest rate ranges for bank deposits and bonds with repurchase agreements as of the balance sheet date were as follows:

the balance sheet date were as follows:
Bank time deposit Bonds under repurchase agreement	December31,2020 - 0.25%	December31,2019
		2.25%~2.47% 2.25%~2.50%

7. Financial assets at fair value through other comprehensive profit or loss

Non-current Investment of equity instruments at fair value through other comprehensive income	December 31, 2020 $ 418,903	December 31, 2019	December 31, 2019
			$ 515,225

199 -

Investment of equity instruments at fair value through other comprehensive income

Non-current Domestic investment Unlisted stock Common stock of Nucom International Corporation Common stock of Chinese Television System Inc. Common stock of WK ASSOCIATES LTD. Common stock of Pushi Venture Capital Co., Ltd. Common stock of WK VIII ASSOCIATES LTD. Common stock of MICROMAX INTERNATIONAL CORP. Subtotal Foreign investment Unlisted stock Common stock of GRACE THW HOLDING	December 31, 2020 $ 31,576 103,392 4,671 7,084 4,352 12,471 163,546 255,357 $ 418,903	December 31, 2019	December 31, 2019
			$ 30,552 122,219 7,123 10,258 5,878 12,234 188,264 326,961 $ 515,225

The Company invested in the aforementioned common shares of companies in line with its long-term investment strategic objective with the anticipation of return from longterm investment. The management of the Company holds that the short-term fluctuation in the fair value of these investments shall be recognized as income or loss and is not congruent with the aforementioned long-term investment plan, therefore they chose to designate these investments as financial assets at fair value through other comprehensive income.

8. Financial assets based on cost after amortization

Current Domestic investment Time deposit with the original maturity date over three months	December 31, 2020 $ 217,907	December 31, 2019	December 31, 2019
			$ 179,880

As of December 31, 2020 and 2019, the interest rate ranges for time deposits with original maturities over 3 months were 0.57% to 0.72% and 2.55% to 2.75% per annum.

200 -

9. Notes receivable, accounts receivable, and other accounts receivable

Notes receivable Measured at amortized cost Total carrying amount – non-related parties Total carrying amount – related parties Less: Allowance for losses Accounts receivable Measured at amortized cost Total carrying amount – non-related parties Total carrying amount – related parties Less: Allowance for losses Other receivables Other receivables – non-related parties Other receivables – related parties Less: Allowance for losses Overdue receivables (Note 15) Overdue receivables Less: Allowance for losses	December31,2020 $ 114,410 - ( 4,004) $ 110,406 $ 288,132 453 ( 26,615) $ 261,970 $ 11,831 4,598 ( 575) $ 15,854 $ 32,713 ( 30,137) $ 2,576	December31,2019	December31,2019
	( ( ( (	( ( ( (	$ 108,714 9 3,805) $ 104,918 $ 280,848 258 22,906) $ 258,200 $ 9,515 17,912 960) $ 26,467 $ 32,812 30,236) $ 2,576

The average credit period for product sales ranges from 30 to 120 days, and no interest is charged on accounts receivable.

The Company will recognize the lifetime expected credit losses as loss allowance for accounts receivable. The full lifetime expected credit losses are calculated using Provision Matrix, which considers the historical default records and current financial status, industry economic conditions, as well as GDP forecast and industry outlook. Due to the historical experience of credit losses of the Company, there is no significant difference in the loss patterns of different customer groups. Therefore, the provision matrix does not further distinguish the customer base, and only sets the expected credit loss rate based on the overdue days of receivables.

If there is evidence that the counterparty is facing serious financial difficulties and the Company cannot reasonably expect the recoverable amount back, the Company will directly write off the relevant accounts receivable, but will continue its recourses, and the amount recovered will be recognized in profit or loss.

201 -

The Company measures loss allowance of receivables based on provision matrix as follows:

December 31, 2020

Not overdue	Overdue 1 to 30 days	Overdue 31 to 60 days	Overdue 61 to 90 days	Overdue for more than 90 days	Overdue for more than 90 days	Overdue for more than 90 days		Total
$ 397,102 ( 25,108) $ 371,994 Not overdue	$ 14,155 ( 2,783) $ 11,372 Overdue 1 to 30 days	$ 6,425 ( 2,371) $ 4,054 Overdue 31 to 60 days	$ 1,742 ( 932) $ 810 Overdue 61 to 90 days	$ 32,713 ( 30,137) $ 2,576 Overdue for more than 90 days			(	$ 452,137 61,331) $ 390,806 Total
					$ 60,541 390 - ( 3,024 ) $ 57,907 December31,2019
						$ 159,457 13,473 476,168 566,733 $ 1,215,831

10. Inventory

Cost of goods sold related to inventories amounted to $5,163,076 thousand and $4,846,415 thousand for 2020 and 2019, respectively. Cost of goods sold includes losses of $(9,209) thousand and $4,903 thousand for the decline in value of inventories (gain on reversal).

202 -

As of December 31, 2020 and 2019, the allowance for decline in value of inventories and allowance for slow moving amounted to $50,504 thousand and $59,713 thousand, respectively.

11. Investment under the equity method

respectively. Investment under the equity method
Investment in subsidiaries Investments in affiliates (1) Investment in subsidiaries Non-public/non-OTC companies AMIGO LOGISTICS CORPORATION New Swell International Investment Co., Ltd. QUANBAO INVESTMENT CO., LTD. DEBAO HOME APPLIANCE CO., LTD. SAMPO HOME INC. SAMPO JAPAN INC. Add: Long-term investment credited to other liabilities Less: Transfer to treasury stock	December31,2020 $ 1,589,554 2,739,654 $ 4,329,208 December31,2020 $ 451,538 82,360 1,010,618 103,259 420,298 5,627 2,073,700 - ( 484,146) $ 1,589,554	December31,2019
		$ 1,555,449 2,488,254 $ 4,043,703 December31,2019
	(	$ 414,784 215,947 965,514 ( 147,315 ) 437,245 6,105 1,892,280 147,315 ( 484,146) $ 1,555,449

The Company’s ownership and voting rights in the equity of the subsidiary at the balance sheet date is as follows:

the balance sheet date is as follows:
Subsidiaryname AMIGO LOGISTICS CORPORATION New Swell International Investment Co., Ltd. QUANBAO INVESTMENT CO., LTD. DEBAO HOME APPLIANCE CO., LTD. SAMPO HOME INC. SAMPO JAPAN INC.	Percentage of ownership interest and voting rights
	December 31, 2020 49% 100% 100% 100% 100% 100%	December 31, 2019
		49% 100% 100% 100% 100% 100%

In August 2019, the board of directors of AMIGO LOGISTICS CORPORATION resolved to reduce the capital by $48,209 thousand in proportion to shareholding, and the Company recovered $23,505 thousand in proportion to the Company’s shareholding, resulting in a 49% shareholding after the capital reduction.

203 -

In May 2019, the board of directors of New Swell International Investment Co., Ltd. resolved to reduce the capital and return the share price of $555,390 thousand in cash, after which the Company’s shareholding was 100%.

In August 2020, the Board of Directors of Sampo Home Appliance Co., Ltd. resolved to increase the capital by $200,000 thousand in cash, and the Company’s shareholding was 100% after the increase.

Please refer to Exhibit 4 for the details of the Company’s indirect investment in subsidiaries.

The shares of profit or loss and other comprehensive income of the subsidiaries using the equity method for the years ended December 31, 2020 and 2019 were recognized based on the audited financial statements of each subsidiary for the same period.

(2) Investments in affiliates

December 31, 2020 December 31, 2019 A major affiliated company RECHI PRECISION CO.,LTD. $ 2,739,654 $ 2,488,254

A major affiliated company Company name December 31, 2020 December 31, 2019 Listed companies RECHI PRECISION CO.,LTD. 27% 27%

Level 1 fair value information of affiliated companies with quoted prices in the open market is as follows.

Company name December 31, 2020 December 31, 2019 RECHI PRECISION CO.,LTD. $ 2,834,252 $ 3,103,762

The Company measures all of the above affiliates using the equity method.

RECHI PRECISION CO.,LTD.

RECHI PRECISION CO.,LTD.
Current asset Non-current assets Current liability Non-current liabilities Equity Non-controlling interests	December 31, 2020 $ 20,343,375 9,083,696 ( 13,601,152 ) ( 5,546,112) 10,279,807 ( 1,441,564) $ 8,838,243	December 31, 2019
		$ 17,304,310 9,383,670 ( 10,982,594 ) ( 6,253,485) 9,451,901 ( 1,526,062) $ 7,925,839

(Continued on next page)

204 -

(Continued from previous page)

from previous page)
The Company’s shareholding percentage The Company’s interests Unrealized profits and losses in upstream transactions Goodwill Book value of investment Operating revenues Net profits for the year Other comprehensive income Total comprehensive income Dividends received from RECHI PRECISION CO., LTD.	December 31, 2020 27% $ 2,373,952 ( 31 ) 365,733 $ 2,739,654 $ 19,338,213 $ 722,644 471,130 $ 1,193,774 $ 67,763	December 31, 2019
		27% $ 2,122,539 ( 18 ) 365,733 $ 2,488,254 $ 20,193,662 $ 649,166 ( 450,600) $ 198,566 $ 162,288

12. Property, Plant and Equipment

Cost Balance as of January 1, 2020 Addition Disposal Reclassification Balance as of December 31, 2020 Accumulated depreciation and impairment Balance as of January 1, 2020 Disposal depreciation expense Balance as of December 31, 2020 Net as of December 31, 2020 Cost Balance as of January 1, 2019 Addition Disposal Reclassification Balance as of December 31, 2019 Accumulated depreciation and impairment Balance as of January 1, 2019 Disposal depreciation expense Balance as of December 31, 2019 Net as of December 31, 2019		Proprietaryland		Building		Machinery equipment		Mold equipment		Transportation equipment		Other equipment		Construction in progress		Total
	(	$ 3,219,383 36,536 287,519 ) 27,443 $ 2,995,843 $ 32,518 - - $ 32,518 $ 2,963,325 $ 3,219,383 - - - $ 3,219,383 $ 32,518 - - $ 32,518 $ 3,186,865	( (	$ 940,885 2,168 266,804 ) - $ 676,249 $ 763,828 192,175 ) 22,624 $ 594,277 $ 81,972 $ 929,605 11,280 - - $ 940,885 $ 739,743 - 24,085 $ 763,828 $ 177,057	( ( ( (	$ 144,576 - 199 ) - $ 144,377 $ 142,017 199 ) 382 $ 142,200 $ 2,177 $ 144,499 177 100 ) - $ 144,576 $ 141,691 100 ) 426 $ 142,017 $ 2,559	( ( (	$ 500,980 25,268 10,948 ) - $ 515,300 $ 455,248 170 ) 25,511 $ 480,589 $ 34,711 $ 478,594 24,503 2,117 ) - $ 500,980 $ 424,750 - 30,498 $ 455,248 $ 45,732	( (	$ 22,339 4,862 750 ) - $ 26,451 $ 20,053 750 ) 1,048 $ 20,351 $ 6,100 $ 22,339 - - - $ 22,339 $ 18,144 - 1,909 $ 20,053 $ 2,286	( ( ( (	$ 240,954 780 17,554 ) 256 $ 224,436 $ 222,954 17,554 ) 5,246 $ 210,646 $ 13,790 $ 239,701 5,795 4,542 ) - $ 240,954 $ 221,743 4,543 ) 5,754 $ 222,954 $ 18,000	(	$ 451,258 494,862 - 27,699) $ 918,421 $ - - - $ - $ 918,421 $ 103,127 348,131 - - $ 451,258 $ - - - $ - $ 451,258	( ( ( (	$ 5,520,375 564,476 583,774 ) - $ 5,501,077 $ 1,636,618 210,848 ) 54,811 $ 1,480,581 $ 4,020,496 $ 5,137,248 389,886 6,759 ) - $ 5,520,375 $ 1,578,589 4,643 ) 62,672 $ 1,636,618 $ 3,883,757

The Company depreciates its property, plant and equipment on a straight-line basis over the following useful lives.

following useful lives.
Building	2–60 years
Main structure	60 years
Mechanical and electrical power equipment	15 years
Engineering System	4 years
Others	2–10 years
Machinery equipment	5–15 years
Transportation equipment	5–7 years
Mold equipment	2–3 years
Other equipment	2–20 years

205 -

There was no indication of impairment of the above listed property, plant and equipment as assessed by the management in 2020 and 2019.

Please refer to Note 13 for a description of the sale and leaseback of land and buildings in 2020.

For the amount of property, plant and equipment pledged as collateral for loans, please refer to Note 27.

13. Lease agreement

(1) Right-of-use assets

refer to Note 27. agreement Right-of-use assets
Carrying amount of right-of- use assets Building Transportation equipment Addition of right-of-use assets Depreciation expense of right- of-use assets Building Transportation equipment	December 31, 2020 $ 46,314 5,030 $ 51,344 2020 $ 19,297 $ 14,653 2,889 $ 17,542	December 31, 2019
			$ 50,284 9,637 $ 59,921 2019
			$ 4,974 $ 12,918 3,068 $ 15,986

(2) Lease liabilities

December 31, 2020 December 31, 2019 Carrying amount of lease liabilities Current $ 62,322 $ 15,440 Non-current $ 27,615 $ 44,919

The range of discount rates for lease liabilities is as follows:	The range of discount rates for lease liabilities is as follows:
	December 31, 2020	December 31, 2019
Building	1.50%	1.50%
Transportation equipment	1.50%	1.50%

206 -

(3) Important lease activities and terms

The Company leases certain buildings for plant and office use for a period of 1 to 5 years. Upon termination of the lease term, the Company has no preferential right to acquire the leased building and the Company shall not sublease or transfer all or part of the subject of the lease without the consent of the lessor.

In order to activate assets, the Company sold the land and above-ground buildings in the Dinghu Section of Guishan District, Taoyuan City to a non-related party, Genyi Construction Co., Ltd. in July 2020, for a total of $1,781,470 thousand after deducting business tax and intermediary commissions and other related expenses. Subsequently, due to the time required to vacate the original plant, it was leased back for a period of one year and three months. The leaseback transaction resulted in a right-to-use asset of $11,994 thousand and a lease liability of $59,403 thousand. Therefore, the transferred gain on disposal of land and above-ground buildings was $1,371,913 thousand, which was recorded under “Gain on disposal of property, plant and equipment.”

(4) Other lease information

property, plant and equipment.” Other lease information
Short-term lease expense Total cash (outflow) of leases		2020 $ 53,004 $ 79,708)		2019
	(		(	$ 51,299 $ 66,822)

The Company has elected to apply the recognition exemption to building leases that qualify as short-term leases and does not recognize the related right-of-use assets and lease liabilities for such leases.

14. Other assets

and lease liabilities for such leases. Other assets
Current Prepayment of foreign letters of credit loan Prepayment for goods Prepaid rental Prepaid lease payments Temporary payments Prepaid expenses and others Non-current Overdue receivables (Note 9) Prepaid expenses and others Refundable deposits	December31,2020 $ 170,310 139,583 2,157 15,086 3,363 76,371 $ 406,870 $ 2,576 380 9,909 $ 12,865	December31,2019
			$ 82,112 53,200 3,930 17,923 37,681 60,960 $ 255,806 $ 2,576 2,092 44,007 $ 48,675

207 -

15. Loans

(1) Short-term borrowings

s Short-term borrowings
Unsecured loans - Credit facility borrowings	December31,2020 $ -	December31,2019
			$ 60,000

The interest rate on bank loans for operating turnover was 1.043% in 2019.

(2) Short-term bills payable

Short-term bills payable
Commercial papers payable Less: Discount of short-term notes and bills payable	December31,2020 $ - - $ -	December31,2019
		(	$ 490,000 215) $ 489,785

The short-term bills payable but not yet due were enumerated below:

December 31, 2020: None

December 31, 2019 Guarantee/underwritin g institutions Commercial papers payable (1) International Bills Finance Corporation Mega Bills Finance Co., Ltd. Mega Bills Finance Co., Ltd.		Face amount $ 200,000 180,000 110,000 $ 490,000	Discounted amount ( $ 115 ) ( 49 ) ( 51) ($ 215)	Carrying amount	Carrying amount
					$ 199,885 179,951 109,949 $ 489,785

The interest rate range of short-term bills payable for 2019 was 1.038% to 1.058%.

(3) Long-term borrowings

Bank of Taiwan Bank of Taiwan	Borrowing Contents Total amount of loans: NTD600,000 thousand Nature of Borrowing: Medium and long-term mortgage loans Loan period: 2017.8.22–2022.7.20 Borrowing interest rate: 1.46% Repayment method: Each loan will be repaid in one lump sum on the agreed settlement date. Total amount of loans: NTD400,000 thousand Nature of Borrowing.: Medium and long-term mortgage loans Loan period: 2019.11.25–2020.01.14 Borrowing interest rate: 1.06% Repayment method: Each loan will be repaid in one lump sum on the agreed settlement date.	December31,2020	December31,2019 $ 600,000 400,000
		$ - -

(Continued on next page)

208 -

(Continued from previous page)

Bank of Taiwan Bank of Taiwan KGI Bank KGI Bank Hua Nan Commercial Bank Chang Hwa Bank Less: Long-term loans due within one year	Borrowing Contents Total amount of loans: NTD100,000 thousand Nature of Borrowing: Medium and long-term mortgage loans Loan period: 2019.12.24–2020.02.04 Borrowing interest rate: 1.06% Repayment method: Each loan will be repaid in one lump sum on the agreed settlement date. Total amount of loans: NTD600,000 thousand Nature of Borrowing: Medium and long-term mortgage loans Loan period: 2020.06.01–2023.05.20 Borrowing interest rate: 1.15% Repayment method: Each loan will be repaid in one lump sum on the agreed settlement date. Total amount of loans: NTD300,000 thousand Nature of Borrowing. Medium-term borrowings Loan period: 2019.01.25–2022.01.25 Borrowing interest rate: 1.22% Repayment method: From 2021.01.25, Repayment of 60 million every 3 months for a total of 5 installments. Total amount of loans: NTD300,000 thousand Nature of Borrowing: Medium-term borrowings Loan period: 2020.10.30–2023.10.30 Borrowing interest rate: 1.08656% Repayment method: From 2022.10.30, Repayment of 60 million every 3 months for a total of 5 installments. Total amount of loans: NTD150,000 thousand Nature of Borrowing: Medium-term borrowings Loan period: 2019.06.21–2021.06.21 Borrowing interest rate: 1.25% Repayment method: Each loan will be repaid in one lump sum on the agreed settlement date. Total amount of loans: NTD100,000 thousand Nature of Borrowing: Medium-term borrowings Loan period: 2017.07.04–2020.07.03 Borrowing interest rate: 1.40% Repayment method: From 2019.10.04, repayment of 25 million every 3 months for a total of 4 installments.		December31,2020 $ - 600,000 - 300,000 - - 900,000 - $ 900,000		December31,2019
				(	$ 100,000 - 300,000 - 150,000 75,000 1,625,000 575,000) $ 1,050,000

The Company provides property, plant and equipment to financial institutions as collaterals for long-term loans, please refer to Note 27 for details of the collaterals.

209 -

16. Other Liabilities

Other Liabilities
Current Other payables Salaries and bonuses payable (including employee profit sharing remuneration) Pensions payable Advertising expenses payable Electronics disposal expenses payable Other accrued expenses Other Liabilities Contract liability Refund liability Non-current Other Liabilities Credit balance of investment accounted for using the equity method Temporary receipts Deposits received Others	December31,2020 $ 212,508 2,332 21,782 20,303 106,419 $ 363,344 $ 22,067 303,658 $ 325,725 $ - 35,826 300 730 $ 36,856	December31,2019
			$ 155,183 2,143 19,049 14,675 106,803 $ 297,853 $ 37,033 303,424 $ 340,457 $ 147,315 55,065 300 934 $ 203,614

For a description of the nature of the Company’s refund liability, see Note 20.

17. Provision for liabilities

Provision for liabilities
Current Warranty (1) Non-current Warranty (1) Reserve for compensation (2)	December31,2020 $ 72,845 $ 7,265 99,216 $ 106,481	December31,2019
			$ 69,589 $ 7,174 99,216 $ 106,390

Balance as of January 1, 2020 Provision for the year Balance as of December 31, 2020 Balance as of January 1, 2019 Reversal for the year Balance as of December 31, 2019		Warranty $ 76,763 3,347 $ 80,110 $ 79,958 3,195) $ 76,763		Reserve for compensation $ 99,216 - $ 99,216 $ 99,216 - $ 99,216		Total
	(				(	$ 175,979 3,347 $ 179,326 $ 179,174 3,195) $ 175,979

210 -
(1) Warranty liabilities reserve is based on the sale of goods contract and it is the best estimated present value of the future economic outflow due to warranty liabilities estimated by the management of the Company. The estimates are based on historical warranty experience and are subject to adjustment due to new raw materials, process changes or other events that affect product quality.
(2) Please refer to Note 28(2) for the description of reserve for compensation.

18. Post-employment benefit plans

(1) Defined contribution plans

The pension system of the “Labor Pension Act” that is applicable to the Company is a defined contribution pension plan subject to government management with an amount equivalent to 6% of the monthly salary appropriated and contributed to the personal account with the Bureau of Labor Insurance.

(2) Defined benefit plans

The company within the Company has a pension plan arranged in accordance with the “Labor Standard Law” of the Republic of China that was a defined benefit pension plan. Pension payment is calculated in accordance with the years of service and the average salary six months prior to the authorized retirement date. The Company has pension appropriated for an amount equivalent to 15% of the total monthly salary and the fund is deposited in the account with the Bank of Taiwan in the name of the Labor Pension Reserve Committee. If the estimated balance of the special account before the end of the year is not enough to pay for the workers who are expected to meet the retirement requirements in the following year, the difference will be appropriated in one lump sum by the end of March of the following year. The special account has been commissioned to the Bureau of Labor Fund of the Ministry of Labor Affairs for management. The Company contained in the financial statements exercises no influence on the right of the bureau in its investment management strategy.

The amount of defined benefit plan recognized in the individual balance sheet is shown below:

shown below:
Present value of the defined benefit obligations The fair value of plan assets Net defined benefit liabilities	December 31, 2020 $ 572,624 (204,235) $ 368,389	December 31, 2019
	(	(	$ 580,240 184,439) $ 395,801

211 -

Change in net defined benefit liability is shown below

Balance as of January 1, 2019 service costs Service cost for the period Interest expenses (income) Recognized in profit or loss Reevaluation Planned ROE (except the amount of net interest) Actuarial (gains) losses – Changes in Demographic Assumptions Actuarial (gains) losses – Change in financial assumptions Actuarial (gains) losses – adjustment through experience Recognized in other comprehensive income Employer appropriation Benefits paid Balance as of December 31, 2019 service costs Service cost for the period Interest expenses (income) Recognized in profit or loss Reevaluation Planned ROE (except the amount of net interest) Actuarial (gains) losses – Changes in Demographic Assumptions Actuarial (gains) losses – Change in financial assumptions Actuarial (gains) losses – adjustment through experience Recognized in other comprehensive income Employer appropriation Benefits paid Balance as of December 31, 2020	Present value of the defined benefit obligations $ 578,091 4,361 6,503 10,864 - 4,808 21,287 7,272 33,367 - ( 42,082) 580,240 3,763 4,352 8,115 - 214 13,735 2,076 16,025 - ( 31,756) $ 572,624	The fair value of plan assets ( $ 163,959 ) - ( 1,929) ( 1,929) ( 5,288) - - - ( 5,288) ( 13,263 ) - (184,439) - ( 1,433) ( 1,433) ( 5,817) - - - ( 5,817) ( 12,546 ) - ($ 204,235)	Net defined benefit liabilities
	( (		$ 414,132 4,361 4,574 8,935 ( 5,288) 4,808 21,287 7,272 28,079 ( 13,263 ) ( 42,082 ) 395,801 3,763 2,919 6,682 ( 5,817) 214 13,735 2,076 10,208 ( 12,546 ) ( 31,756 ) $ 368,389

212 -

The pension fund system of the company contained in the financial statements is exposed to the following risks due to the “Labor Standards Act”:

Investment risk: The Bureau of Labor Fund of the Ministry of Labor Affairs uses the labor pension fund for investment in domestic and foreign equity securities and debt securities, and as bank deposits through proprietary trade or commissioned third parties. However, the amount attributable to the planned asset of the Company contained in the financial statements shall not fall below the interest rate offered by the banks in the regions or countries of investment for 2-year time deposit as return.
Interest rate risk: The decrease of the interest rate of government bonds and corporate bonds will cause the present value of the defined benefit obligations to go up; however, the return on the debt of the plan assets will go up too; therefore, they will mutually offset the impact on the net defined benefit liabilities.
Salary risk: the calculation of the present value of defined benefit obligation is based on the salaries of the members in the plan of the future. As such, an increase of the salaries of the members of the plan is bound to increase the present value of defined benefit obligation.

The defined benefit obligation of the company contained in the financial statements is based on the actuarial calculation of the actuary and the major assumption as of the evaluation day is shown below:

Discount rate The expected rate of increase in salaries	December 31, 2020 0.50% 2.50%	December 31, 2019
		0.75% 2.50%

Discount rate Increase by 0.25% Decrease by 0.25% The expected rate of increase in salaries Increase by 0.25% Decrease by 0.25%	December31,2020 ($ 13,735) $ 14,230 $ 13,714 ($ 13,310)	December31,2019	December31,2019
	( (	( (	$ 14,362) $ 14,898 $ 14,389 $ 13,947)

Amount projected for appropriation in 1 year Average maturity of defined benefit obligation	December 31, 2020 $ 12,580 10.2years	December 31, 2019	December 31, 2019
			$ 13,200 10.6years

213 -

19. Equity

(1) Capital stock

Common share

(1)	Capital stock Common share
(2)	Authorized number of shares (thousand shares) Authorized capital Number of shares issued and fully paid (in thousands) Capital stock issued Capital surplus For loss make-up, payment in cash or capitalization as equity (1) Treasury stock transaction Gain on disposal of assets The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries. Only for loss make-up Changes in net equity in affiliated companies and joint ventures recognized under the equity method (2)	December31,2020 1,500,000 $ 15,000,000 387,200 $ 3,872,000 December 31, 2020 $ 34,376 50 2,090 135,183 $ 171,699	December31,2019
			1,500,000 $ 15,000,000 387,200 $ 3,872,000 December 31, 2019
				$ 14,824 50 2,069 134,431 $ 151,374

Such additional paid-in capital can be used to make up for losses; also, when the company is without any loss, it can be applied for cash distribution or capitalization. However, it is limited to a certain percentage of the annual paidin capital for the purpose of capitalization.
Such additional paid-in capital is the equity trade effect recognized due to the changes in the subsidiary’s equity when the Company has not actually acquired or disposed the equity of the subsidiary, or the amount of adjustment to the additional paid-in capital of the subsidiary recognized under the equity method.

A reconciliation of the balances of various types of capital surplus for 2020 and 2019 is as follows

2019 is as follows
Balance as of January 1, 2020 Transfer of treasury shares to employees Changes in affiliates and joint ventures recognized under the equity method	Treasury stock transaction	Gain on disposal of assets	Changes in affiliates and joint ventures recognized under the equity method	The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries.	Total
	$ 14,824 3,670 -	$ 50 - -	$ 134,431 - 752	$ 2,069 - -	$ 151,374 3,670 752

(Continued on next page)

214 -

(Continued from previous page)

Adjustment of capital surplus by dividends paid to subsidiaries The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries. Balance as of December 31, 2020 Balance as of January 1, 2019 Changes in affiliates and joint ventures recognized under the equity method Adjustment of capital surplus by dividends paid to subsidiaries The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries. Balance as of December 31, 2019	Treasury stock transaction	Treasury stock transaction	Gain on disposal of assets	Gain on disposal of assets	Changes in affiliates and joint ventures recognized under the equity method	Changes in affiliates and joint ventures recognized under the equity method	The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries.	The differences between carrying amount and market price of actual acquisition or disposal of shares in subsidiaries.		Total
		$ 15,882 - $ 34,376 $ - - 14,824 - $ 14,824		$ - - $ 50 $ 50 - - - $ 50		$ - - $ 135,183 $ 130,748 3,683 - - $ 134,431	(	$ - 21 $ 2,090 $ 2,135 - - 66) $ 2,069	(	$ 15,882 21 $ 171,699 $ 132,933 3,683 14,824 66) $ 151,374

(3) Retained earnings and Dividend Policy

According to the Articles of Incorporation, the policy for the distribution of earnings stated that if there is a surplus after account settlement of the fiscal year, the company shall pay applicable taxes and cover loss carried forward, followed by the allocation of 10% of the remainder as legal reserve, and appropriate for special reserve or reverse special reserve. If there is still a balance, it will be pooled up with the undistributed earnings carried forward from previous years for distribution as shareholder dividend under a proposal prepared by the Board subject to the final approval of the General Meeting of Shareholders. See Note 21, “7. Remuneration to Employees and Directors” for the Company’s policy on the distribution of employee and director remuneration under the Articles of Incorporation.

The Company’s dividend policy is to distribute dividends to shareholders in cash or in stock, with cash dividends being no less than 10% of the total dividends, in accordance with the Company’s current and future development plans and taking into account the investment environment, capital requirements and domestic and international competition, and the interests of shareholders.

Legal reserve shall be allocated up to the amount equivalent to the paid-in capital of the company. Legal reserve could be allocated for covering loss carried forward. If there is no loss, the amount of legal reserve in excess of the paid-in capital by 25% could be allocated as capital stock and paid out as cash dividend.

215 -

The Company has special reserve appropriated and reversed in accordance with the Jin-Guan-Zhen-Fa-Zi No. 1010012865 Letter, Jin-Guan-Zhen-Fa-Zi No. 1010047490 Letter, Jin-Guan-Zhen-Fa-Zi No. 1030006415 Letter and “Appropriation of Special Reserve Q&A after the Adoption of International Financial Reporting Standards (IFRSs).

At the shareholders’ meetings held on June 12, 2020 and June 19, 2019, the Company resolved to distribute the earnings for the years 2019 and 2018, respectively, as follows.

Legal reserve Cash dividend	Earnings Distribution Proposal 2019 2018 $ 73,896 $ 66,181 570,600 531,160	DividendPerShare (NTD)	DividendPerShare (NTD)
	2019 $ 73,896 570,600	2019 $ - 1.5	2018
			$ - 1.4

The Board of Directors proposed the following earnings distribution proposal for 2020 on March 24, 2021.

for 2020 on March 24, 2021.
Legal reserve Cash dividend	Earnings Distribution Proposal $ 178,645 955,750	Dividend Per Share (NTD)
		$ - 2.5

The earnings distribution proposal for 2020 is pending the resolution of the shareholders’ meeting scheduled to be held in June 2021.

(4) Special reserve

Special reserve
Beginning retained earnings Reversal of special reserve Disposal of land Disposal of non-current assets held for sale Disposition of subsidiaries Balance, ending	2020 $ 1,688,706 ( 95,918 ) - - $ 1,592,788	2019
		$ 1,917,160 - ( 44,135 ) ( 184,319) $ 1,688,706

(5) Other equity
Exchange differences on translation of financial statements of foreign operations

operations
Balance, beginning of year Generated in the year Translation differences of foreign operations Share of affiliated companies accounted for using the equity method Other comprehensive income of the current year Balance, end of year	2020 ( $ 305,398 ) ( 2,572 ) 31,708 29,136 ($ 276,262)	2019
		( $ 258,372 ) 51,378 ( 98,404) ( 47,026) ($ 305,398)

216 -
Unrealized valuation gains or losses on financial assets measured at fair value through other comprehensive income

Beginning retained earnings Accrued in current year Unrealized gain or loss Equity instrument Share of affiliated companies accounted for using the equity method Other comprehensive income of the current year The accumulated gain/loss from the disposition of equity instruments will be transferred to retained earnings. Balance, end of year	2020 $ 134,923 ( 96,322 ) 94,995 ( 1,327) - $ 133,596	2019
		( $ 66,138 ) 157,170 7,620 164,790 36,271 $ 134,923

(6) Treasury shares

Unit: 1,000 shares/thousand

Reason for recovery Number of shares as of January 1, 2020 Decrease in the period Number of shares as of December 31, 2020 Number of shares as of January 1, 2019 Decrease in the period Number of shares as of December 31, 2019 Amount as of January 1, 2020 Decrease in the period: Stock transfer to employees Amount as of December 31, 2020 Amount as of January 1, 2019 Decrease in the period: Stock transfer to employees Amount as of December 31, 2019	Stock transfer to employees 7,800 ( 1,000) 6,800 8,800 ( 1,000) 7,800 $ 124,661 ( 15,980) $ 108,681 $ 140,641 ( 15,980) $ 124,661	Shares of parent company held by subsidiaries 10,432 - 10,432 10,432 - 10,432 $ 484,146 - $ 484,146 $ 484,146 - $ 484,146		Total
	( ( ( (		( ( ( (	18,232 1,000) 17,232 19,232 1,000) 18,232 $ 608,807 15,980) $ 592,827 $ 624,787 15,980) $ 608,807

217 -

In order to protect the Company’s credit and shareholders’ interests, the subsidiary held the Company’s shares as of the balance sheet date, and the related information is as follows.

as follows.
Subsidiaryname December 31, 2020 QUANBAO INVESTMENT AMIGO LOGISTICS CORPORATION December 31, 2019 QUANBAO INVESTMENT AMIGO LOGISTICS CORPORATION	Number of shares held (thousand shares) 10,050 382 10,050 382		Carrying amount $ 482,468 1,678 $ 484,146 $ 482,468 1,678 $ 484,146	Market price
					$ 261,798 9,945 $ 271,743 $ 202,504 7,693 $ 210,197

The company’s Treasury stock may not be pledged in accordance with the Security and Exchange Law; moreover, it is without the privilege of dividend and voting right. Sampo Corporation’s shares held by subsidiaries are treated as treasury stock and have the same rights as those of ordinary shareholders, except that they are not allowed to participate in the capital increase of Sampo Corporation and have no voting rights.

20. Income

Income
Revenue from contracts with customer Merchandise sales revenue Licensing revenue Service revenues Other income		2020 $ 6,249,376 21,977 234,822 984 $ 6,507,159		2019
				$ 5,795,612 17,365 224,674 65 $ 6,037,716

(1) Description of customer contracts

Merchandise sales revenue

Home appliances and electronic products are sold to distributors or through the Company’s self-operated stores and online. The Company gives price discounts to distributors when they meet the contractual requirements. The amount of revenue is based on the most probable amount of the discount

218 -

considering the distributor’s past orders, and the refund liability (recorded as other current liabilities) is recognized accordingly. Please refer to Note 16. The rest of the products are sold at a fixed price as agreed in the contract.

In accordance with commercial practice, the Company accepts returns of home appliances and electronic products for full refund. Considering the experience accumulated in the past, the Company estimated the return rate based on the most probable amount and recognized the refund liability (recorded as other current liabilities), please refer to Note 16. Please refer to Note 17 for the description of defective warranty obligations for home appliances and electronic products.

2. Licensing revenue

The Company’s trademark licensing is determined based on the actual sales volume for trademark licensing transaction.

(2) Contract balances

Contract balances
Accounts receivable (Note 9) Contract liabilities – current (Note 16) Merchandise sales		2020 $ 261,970 $ 22,067		2019
				$ 258,200 $ 37,033

Revenue from customer contracts is mainly derived from merchandise sales. Under the contracts with customers, the Company receives advance payments from customers in advance and records contract liabilities.

21. Net profits for the year

(1) Interest income

ofits for the year Interest income
Bank deposits Financial assets measured at amortized cost Others		2020 $ 545 6,187 919 $ 7,651		2019
				$ 1,835 14,101 7,628 $ 23,564

(2) Other income

Other income
Rental income Dividend income Others		2020 $ 21,609 7,738 34,251 $ 63,598		2019
				$ 22,239 2,662 30,420 $ 55,321

219 -

(3) Other gains and losses

Other gains and losses
Gain on disposal of property, plant and equipment Gain on disposal of non-current assets held for sale Net foreign currency exchange loss Lease modification gain Miscellaneous expenses		2020 $ 1,371,915 - 14,117 ) 92 26,104) $ 1,331,786		2019
	( (		( (	$ 561 361,486 19,637 ) 25 16,115) $ 326,320

(4) Financial costs Interest on bank borrowings Interest on lease liabilities (5) Depreciation and amortization Property, Plant and Equipment Right-of-use assets Intangible assets Total Summary of depreciation expenses by function Operating costs Operating expenses Summary of amortization expenses by function Operating expenses (6) Employee benefits expenses Post-employment benefits (Note 18) Defined contribution plans Defined benefit plans Termination benefits Other employee benefits Total employee benefits expenses		2020 $ 20,019 988 $ 21,007 2020 $ 54,811 17,542 39,545 $ 111,898 $ 28,001 44,352 $ 72,353 $ 39,545 2020 $ 18,973 6,682 25,655 1,871 665,444 $ 692,970		2019
				$ 26,954 1,064 $ 28,018 2019
				$ 62,672 15,986 42,979 $ 121,637 $ 33,299 45,359 $ 78,658 $ 42,979 2019
				$ 18,861 8,935 27,796 2,579 606,808 $ 637,183

(Continued on next page)

220 -

(Continued from previous page)

Summary by function Operating costs Operating expenses		2020 $ 225,329 467,641 $ 692,970		2019
				$ 222,166 415,017 $ 637,183

(7) Remuneration to employees and directors

In accordance with the Company’s Articles of Incorporation, the Company appropriates no less than 1% and no more than 3% of the profits before tax and before the distribution of employees’ and directors’ remuneration for the year as Remuneration to employees and directors The estimated remuneration to employees and directors for 2020 and 2019 was resolved on March 24, 2021 and March 17, 2020 by the board of directors as follows.

Estimate Percentage

Estimate Percentage
Remuneration to employees Remuneration to directors Amount Remuneration to employees Remuneration to directors	2020 2.20% 0.80% 2020 Cash $ 45,577 16,574	2019
		2% 1% 2019
		Cash
		$ 15,649 7,825

If there are still changes in the amount specified in the individual financial statement after announcement, proceed to the accounting of change and adjusted for booking in the next fiscal year.

There was no difference between the actual amount of employees’ and directors’ remuneration paid for 2019 and 2018 and the amount recognized in the individual financial statements in 2019 and 2018.

For information on remuneration to employees and directors as resolved by the Board of Directors in 2021 and 2020, please visit the Market Observation Post System of the Taiwan Stock Exchange.

221 -

22. Income tax

(1) The main composition items recognized as income tax expenses in income:

Income tax (1) The main composition items recognized as income tax expenses in income:	in income:	in income:
2020 2019 Income tax expenses in the current period Accrued in current year $ 318,892 $ - Additional levy on undistributed earnings - 1,306 Prior year adjustment 2,038 ( 4,654 ) Deferred tax Accrued in current year (107,373) 23,376 Income tax expense recognized in the profit or loss $ 213,557 $ 20,028 Adjustment of accounting income and income tax expense are as follows: 2020 2019 Net profits before tax $ 2,009,550 $ 758,991 Income tax expense of net income before tax at the statutory tax rate $ 401,910 $ 151,798 Non-deductible expenses and losses for tax purposes 30 10,293 Non-taxable income ( 338,380 ) ( 118,165 ) Additional levy on undistributed earnings - 1,306 Land revaluation increment tax 141,958 - Unrecognized loss carryforwards/deductible temporary differences 6,001 ( 20,550 ) Income tax expense of prior years adjusted in the current year 2,038 ( 4,654) Income tax expense recognized in the profit or loss $ 213,557 $ 20,028 (2) Current income tax asset and liability December31,2020 December31,2019 Current income tax asset Tax refunds receivable from prior years $ 490 $ 490 Current Tax Liability Income tax payables $ 74,251 $ -	2019
	$ 758,991 $ 151,798 10,293 ( 118,165 ) 1,306 - ( 20,550 ) ( 4,654) $ 20,028 December31,2019
		$ 490 $ -

222 -

(3) Deferred income tax assets and liabilities

Changes in the deferred income tax assets and liabilities are as follows:

2020

2020
Deferred taxassets	Balance, beginningofyear	Recognized in profit or loss $ 506 ( 1,842 ) 15,200 ( 88 ) 14,620 ( 681 ) 669 ( 7,523 ) 7 ( 11 ) ( 4,605) $ 16,252 $ 91,121 Recognized in profit or loss ( $ 463 ) 981 26,035 88 ( 6,381 ) 862 ( 639 ) ( 9,282 ) 58 ( 1 ) 4,642 ( 39,276) ($ 23,376)	Balance, end of year
	$ 9,901 11,943 ( 47,948 ) 88 137,313 5,794 35,196 ( 15,066 ) 101 13 2,236 $ 139,571 ($ 820,434) Balance, beginningofyear		$ 10,407 10,101 ( 32,748 ) - 151,933 5,113 35,865 ( 22,589 ) 108 2 ( 2,369) $ 155,823 ($ 729,313) Balance, end of year
Temporary difference Loss allowance Inventory Investment accounted for under the equity method Right-of-use assets Other payables Vacation benefit payable Provision for liabilities Defined benefit pension plans Employee benefits payable Other non-current liabilities Exchange gain Total Deferred tax liabilities
Temporary difference Reserve for land revaluation increment tax (“LRIT”) 2019 Deferred taxassets
	$ 10,364 10,962 ( 73,983 ) - 143,694 4,932 35,835 ( 5,784 ) 43 14 ( 2,406 ) 39,276 $ 162,947		$ 9,901 11,943 ( 47,948 ) 88 137,313 5,794 35,196 ( 15,066 ) 101 13 2,236 - $ 139,571
Temporary difference Loss allowance Inventory Investment accounted for under the equity method Right-of-use assets Other payables Vacation benefit payable Provision for liabilities Defined benefit pension plans Employee benefits payable Other non-current liabilities Exchange gain Loss carryforward Total

(Continued on next page)

223 -

(Continued from previous page)

Deferred tax liabilities	Balance, beginningofyear	Balance, beginningofyear	Recognized in profit or loss $ 25,552	Balance, end of year	Balance, end of year
	(	$ 845,986)		(	$ 820,434)
Temporary difference Reserve for land revaluation increment tax (“LRIT”)

(4) The status of income tax assessment

The Company’s profit-seeking enterprise income tax returns have been assessed by the tax authorities through 2018.

23. Earnings per share

The earnings and weighted average common stock shares used in calculating the earnings per share are as follows:

Net profits for the year

earnings per share are as follows: Net profits for the year
Net profit attributable to shareholders of parent company Net profits for the calculation of diluted earnings per share Number of shares Weighted average common stock shares used to calculate basic earnings per share Effect of dilutive potential common stock: Remuneration to employees Weighted average common stock shares used to calculate diluted earnings per share		2020 2019 $ 1,795,993 $ 738,963 $ 1,795,993 $ 738,963 Unit: shares in thousands 2020 2019 369,885 368,802 2,546 973 372,431 369,775

If the Company may choose to have the employee compensation distributed via a stock or cash dividend, calculate the diluted earnings per share, assuming that the bonus to employees is with a stock dividend distributed, with the weighted average number of shares outstanding included when the potential common stock has a diluted effect. When diluted EPS is calculated in the next year resolves the number of share distribution for employee compensation, the dilution effect is also considered for such potential common shares.

24. Capital risk management

Under the premise of capital management for assuring sustainable operation, the Company seeks to maximize return to shareholders through the optimization of debts and equity balance.

224 -

The Company’s capital structure consists of net debt (i.e. borrowings less cash and cash equivalents) and equity (i.e. capital stock, capital surplus, retained earnings and other equity items).

25. Financial instrument

(1) Information on fair value – financial instruments at fair value on repetition.
Fair value hierarchy

December 31, 2020

Fair value hierarchy December 31, 2020
Financial assets at fair value through other comprehensive profit or loss Investment in equity instruments - Domestic unlisted stocks - Foreign unlisted stocks Total December 31, 2019 Financial assets at fair value through other comprehensive profit or loss Investment in equity instruments - Domestic unlisted stocks - Foreign unlisted stocks Total	Level 1 $ - - $ - Level 1 $ - - $ -	Level 2 $ - - $ - Level 2 $ - - $ -	Level 3 $ 163,546 255,357 $ 418,903 Level 3 $ 188,264 326,961 $ 515,225	Total
				$ 163,546 255,357 $ 418,903 Total
				$ 188,264 326,961 $ 515,225

There were no transfers between Level 1 and Level 2 fair value measurements in 2020 and 2019.

Financial instruments are adjusted according to Level 3 fair value.

2020

Financial assets at fair value through other comprehensive profit or loss Financial asset Equity instrument Beginning retained earnings $ 515,225 Recognized in other comprehensive income (unrealized valuation gains or losses on financial assets measured at fair value through other comprehensive income) ( 96,322 ) Balance, ending $ 418,903

225 -

2019

2019
Financial asset Beginning retained earnings Recognized in other comprehensive income (unrealized valuation gains or losses on financial assets measured at fair value through other comprehensive income) Disposal Balance, ending	Financial assets at fair value through other comprehensive profit or loss
	Equity instrument
	(	$ 358,967 156,921 663) $ 515,225

Evaluation techniques and an input value of Level 3 fair value measurement

(2) Categories of financial instruments

subject. Categories of financial instruments
Financial asset Financial assets based on cost after amortization (Note 1) Financial assets at fair value through other comprehensive profit or loss Investment in equity instruments Financial liability Measured at amortized cost (Note 2)	December 31, 2020 $ 1,037,927 418,903 2,011,297	December 31, 2019
		$ 1,287,104 515,225 3,050,707

Note 1: The balance consists of financial assets measured at amortized cost, including cash and cash equivalents, notes receivable, accounts receivable, notes and accounts receivable from related parties, other receivables, other receivables from related parties, time deposits with original maturities of more than three months and pledged time deposits.
Note 2: The balance consists of financial liabilities measured at amortized cost, including short-term borrowings, short-term notes payable, notes payable, accounts payable, notes and accounts payable to related parties, other
226 -

payables, other payables to related parties, long-term loans due within one year, and long-term loans.

(3) Purpose and policy of financial risk management

The Company’s major financial instruments include investments in equity and debt instruments, accounts receivable, accounts payable and borrowings. The Company’s financial management department provides services to each business unit, coordinates the operation of access to domestic and international financial markets, and monitors and manages financial risks associated with the Company’s operations through internal risk reports that analyze risk exposures based on risk degree and breadth. These risks include market risk (including exchange rate risk, interest rate risk and other price risk), credit risk and liquidity risk.

1. Market risk

Due to the operating activities, the major financial risk faced by the Company is the foreign currency exchange rate risk (see (1) below) and interest rate risk (see (2) below).

(1) Exchange rate risk

The Company engages in foreign currency-denominated sales and purchase transactions, which expose the Company to exchange rate risk.

The carrying amounts of monetary assets and monetary liabilities denominated in non-functional currencies as of the balance sheet date are shown in Note 29.

Sensitivity analysis

The Company is prone to the impact of changes in USD exchange rates.

The Branch’s sensitivity analysis for the exchange rate of NT dollar (the functional currency) to each relevant foreign currency increased or decreased by 1% is detailed as follows. The 1% sensitivity is used internally for reporting the exchange rate risk to management and is the assessment by management regarding the reasonable and possible changes in foreign exchange rates. The sensitivity analysis includes only the outstanding monetary items in foreign currency; also, the translation at year-end is adjusted in accordance with the changes in exchange rates by 1%. The positive numbers in the following table represent the increase in net profits before tax if the NTD weakens by 1% against the respective currencies, and the negative numbers for the same amount represent the decrease in net profits before tax if the NTD strengthens by 1% against the respective currencies.

227 -

Profit or loss	Impact of	USD(i)
	2020 $ 2,238	2019
		$ 8,651

(i) These receivables and payables are mainly due to the Company’s outstanding USD-denominated receivables and payables that are not cash flow hedged as of the balance sheet date.

(2) Interest rate risk

Interest rate risk exposure is due to the entities within the company borrowing funds at floating interest rates.

The carrying amount of financial assets and liabilities of the Company under interest rate exposure on balance sheet date is as follows:

December 31, 2020 December 31, 2019

With fair value interest
rate risk
Financial asset	$	267,907	$ 659,560
Financial liability		-	549,785
Contain cash flow
interest rate risk
Financial asset		378,743	235,699
Financial liability		900,000	1,625,000

The Company is exposed to cash flow interest rate risk as a result of holding floating rate bank loans. These circumstances are consistent with the Company’s policy of maintaining floating rate borrowings to reduce interest rate fair value risk. The Company’s cash flow interest rate risk is mainly due to fluctuations in benchmark interest rates related to NTDdenominated borrowings.

Sensitivity analysis

The following sensitivity analyses are based on the interest rate risk exposure of the derivative and non-derivative instruments on the balance sheet date. For liabilities with floating rate, it is analyzed by assuming the liabilities on the balance sheet date are outstanding throughout the reporting period. The rate of change used by the Company to report interest rates to management is increased or decreased by 0.25%, which also represents management’s assessment of the reasonably possible range of interest rates.

228 -

If interest rates had increased by 0.25%, with all other variables held constant, the Company’s net profits before income tax would have decreased by $1,303 thousand and $3,473 for 2020 and 2019, respectively, mainly due to the Company’s exposure to fair value interest rate risk on its floating rate borrowings.

(3) Other price risk

The Company has equity price risk exposure due to its investment in listed equity securities. The Company’s management command risk by holding a diverse portfolio of risky investments. The Company’s equity price risk is concentrated in the equity instruments of the TWSE and TPEx.

Sensitivity analysis

The following sensitivity analysis is based on the equity price risk at the balance sheet date.

If the equity price had increased by 1%, other comprehensive income after tax would have increased by $4,189 thousand and $5,152 thousand in 2020 and 2019, respectively, due to the increase in fair value of financial assets measured at fair value through other comprehensive income.

2. Credit risk

Credit risk refers to the risk that the counter party delays the contractual obligation resulting in the financial loss of the Company. As of the balance sheet date, the Company’s maximum exposure to credit risk (without regard to collateral or other credit enhancement instruments and the maximum amount of irrevocable exposure) that could result in financial loss due to the counterparty’s failure to perform its obligations and the Company’s provision of financial guarantees was primarily attributable to.

(1) The carrying amount of financial assets recognized in the individual balance sheets.
(2) The maximum amount that the Company may be required to pay for the provision of financial guarantee without considering the probability.

The Company’s credit risk is mainly concentrated in the Company’s top four customers. As of December 31, 2020 and 2019, the percentage of total accounts receivable from the aforementioned customers was 43% and 46%, respectively.

3. Liquidity risk

The company has supported the Group’s business operation and mitigated the impact of changes in cash flow by managing and maintaining sufficient cash and cash equivalent position. The Company’s management monitors the use of banking facilities and ensures the compliance of loan agreement.

(1) Liquidity and interest rate risk table of non-derivative financial liabilities

Non-derivative financial liabilities remaining contract maturity analysis is prepared in accordance with the Company’s undiscounted cash flow of financial liabilities on the possible earliest repayment date

229 -

upon request. The following table shows the earliest times that the Company may be demanded to make immediate repayment of bank loans, without considering the likelihood of such demands. Maturity analysis of other non-derivative financial liabilities is prepared based on the agreed repayment date.

December 31, 2020

Non-derivative financial liabilities Note and account payables Other payables lease liabilities Floating rate instruments Fixed interest rate	Weighted average effective interest rate (%)	Less than 1 year	2–3 years	4to 5 years	Total
	- - 1.5 1.08656~1.15 -	$ 736,260 375,037 62,322 - -	$ - - 26,111 900,000 -	$ - - 1,504 - -	$ 736,260 375,037 89,937 900,000 -

December 31, 2019

Non-derivative financial liabilities Note and account payables Other payables lease liabilities Floating rate instruments Fixed interest rate	Weighted average effective interest rate (%)	Less than 1 year	2–3 years	4to 5 years	Total
	- - 1.5 1.06~1.46 1.038~1.058	$ 566,315 309,607 15,440 575,000 549,785	$ - - 28,267 1,050,000 -	$ - - 16,652 - -	$ 566,315 309,607 60,359 1,625,000 549,785

(2) Financing limit

Financing limit
Unsecured bank credit facility, pay upon request, is revisited annually Amount utilized Amount unutilized	December31,2020 $ 611,000 3,089,000 $ 3,700,000	December31,2019
			$ 1,313,000 1,957,000 $ 3,270,000

(Continued on next page)

230 -

(Continued from previous page)

us page)
Secured bank loan limit Amount utilized Amount unutilized	December31,2020 $ 600,000 600,000 $ 1,200,000	December31,2019
			$ 1,100,000 100,000 $ 1,200,000

26. Related party transaction

Except for those disclosed in other notes, the transactions between the Company and its related parties are as follows

(1) Name of related parties and the relations

Related Party Name Relation with the Company AMIGO LOGISTICS CORPORATION (AMIGO LOGISTICS) Subsidiary New Swell International Investment Co., Ltd. Subsidiary DEBAO HOME APPLIANCE CO., LTD. (DEBAO HOME APPLIANCE) Subsidiary SAMPO HOME INC. Subsidiary SAMPO JAPAN INC. Subsidiary NISSIN GLOBAL LOGISTICS (TAIWAN) CO., Sub-subsidiary LTD. DONGGUAN SAMPO ELECTRONICS CO., LTD. Sub-subsidiary NELONG ENTERPRISE CORPORATION LTD. Sub-subsidiary (NELONG Company) SAMPO INTERNATIONAL FOOD SERVICE Sub-subsidiary CO., LTD. RECHI PRECISION CO.,LTD. Affiliate Dyna Rechi Co., Ltd. Other affiliate Nucom International Corporation Other affiliate SYNVISION TECHNOLOGY SERVICE Other affiliate CORPORATION CINCHY CORPORATION Other affiliate Chen Zhang Xiu Ju Culture and Education Other affiliate Foundation Chen Mao-Bang Industry and Commerce Chairman of The Company Development Foundation

(2) Operating revenues

Operating revenues
Accountinbook Operating revenues	Related party classification Subsidiary Sub-subsidiary Affiliate Other affiliate Chairman of The Company		2020 $ 2,258 245 929 6,087 928 $ 10,447		2019
					$ 4,696 570 805 414 - $ 6,485

231 -

The sales policy for related parties is based on the general distribution price, and the collection policy is the same as that for general customers, except for the 120-day collection period for some related parties.

(3) Purchase

Purchase
Account in book Purchase	Type and Name of related party Sampo Home Appliance Co., Ltd Sub-subsidiary Affiliate Other affiliate		2020 $ 2,362,552 219,644 2,966 3,294 $ 2,588,456		2019
					$ 1,802,558 174,724 2,630 1,925 $ 1,918,837

The purchase terms for the related parties are cost or cost plus 1% to 6.5% (including handling fee), while the rest of the raw materials and merchandises are better than the general manufacturers because the Company still needs to outsource the maintenance.

The Company’s collection and payment policy for DEBAO HOME APPLIANCE CO., LTD. is to settle at the end of each month other receivables arising from the purchase of materials or the advance of expenses on its behalf, accounts payable for finished goods purchased from it, and prepayments made in support of its operations, which are expressed as net accounts receivable.

(4) Receivables from related party

Account in book Notes receivable Accounts receivable Other receivables	Related party classification Subsidiary Other affiliate Subsidiary Sub-subsidiary Other affiliate Sampo Home Appliance Co., Ltd Subsidiary Sub-subsidiary	December 31, 2020 $ - - $ - $ 8 429 - $ 437 $ 1,494 343 2,600 $ 4,437	December 31, 2019	December 31, 2019
				$ 5 4 $ 9 $ 22 225 2 $ 249 $ 15,732 344 1,209 $ 17,285

The outstanding receivables from the related party are without any guarantees collected.

232 -

(5) Payables to concerned parties (excluding loans borrowed from concerned parties)

Account in book Notes payable Accounts payable Other payables	Type and Name of related party AMIGO LOGISTICS CORPORATION Affiliate Other affiliate AMIGO LOGISTICS CORPORATION Sub-subsidiary Affiliate Other affiliate AMIGO LOGISTICS CORPORATION	December 31, 2020 $ - - - $ - $ 81,919 36,017 1,277 1,260 $ 120,473 $ 11,693	December 31, 2019	December 31, 2019
				$ 67,485 8 774 $ 68,267 $ 11,659 16,928 65 - $ 28,652 $ 11,754

For balance of payables to concerned parties outstanding, no guarantee has been provided.

(6) Prepayments

provided. Prepayments
Type and Name of related party NELONG Company Sub-subsidiary	December 31, 2020 $ 73,288 416 $ 73,704	December 31, 2019
			$ 13,167 - $ 13,167

(7) Loans to related parties

Loans to related parties
Related Party Name SAMPO HOME INC. Related party classification Interest income SAMPO HOME INC.	December 31, 2020 $ - 2020 $ -	December 31, 2019
			$ - 2019
			$ 2,893

(8) Operating expenses (including freight, rental and other expenses, etc.)

Related party classification Subsidiary Sub-subsidiary Affiliate		2020 $ 235,266 8,321 175 $ 243,762		2019
				$ 185,008 8,777 18 $ 193,803

233 -

(9) Other income

Other income
Related party classification Subsidiary Affiliate		2020 $ 17,582 3 $ 17,585		2019
				$ 16,546 - $ 16,546

(10) Remuneration to key management

Total remuneration to directors and other key management for 2020 and 2019 was as follows.

was as follows.
Short-term employee benefits Pension benefits		2020 $ 47,215 989 $ 48,204		2019
				$ 41,427 1,053 $ 42,480

The salaries and remunerations to directors and other key management were defined by the Salary Committee in accordance with the personal performances and trends in the markets:

27. Pledged assets

The following assets had been provided as collateral for financing loans:

Guarantee items and assets Long-term borrowings Fixed asset	Content Land	Bookvalue	Bookvalue	Bookvalue
		December 31, 2020 $ 518,816	December 31, 2019
				$ 518,816

28. Significant contingent liabilities and unrecognized contractual commitments

In addition to those described in other notes, the Company had the following material commitments and contingencies as of the balance sheet date.

(1) As of December 31, 2020 and 2019, the Company had unused letters of credit of US$9,177 thousand and US$6,132 thousand, respectively, for the purchase of goods and materials.
(2) During 2004, SAMPO CORPORATION sold a number of home appliances to dealer, one of which was sold by its parent company, to an end customer in the United States. The end customer later claimed that a fire caused by SAMPO’s appliances caused the damage caused by a fire in 2012 and sued dealer for compensations. Dealer and the customer had reached a settlement of their lawsuit, with paying compensation. Subsequently, Dealer filed an arbitration case with the American Arbitration Association, requesting SAMPO and Tianjin New Swell to compensate jointly and severally. The arbitration decision was rendered by the American Arbitration Association on February 3, 2016, which ruled that SAMPO and Tianjin New Swell should pay US$3,052 thousand in compensation for the relevant losses. The arbitration decision was approved by the U.S. Federal Court on January 17, 2018, which recognized the arbitration decision, but dealer has not yet done anything
234 -

concrete as of September 30, 2020, and SAMPO has not yet received any documents such as notice of the arbitration ruling that dealer has filed with the court in Taiwan.

29. Information of foreign currency assets and liabilities with significant effects

The following information is expressed in foreign currencies other than the functional currencies of each entity within the Company; also, the exchange rate disclosed refers to the exchange rate used for having such foreign currency converted into the functional currency. Foreign currency assets and liabilities with significant influence as follows:

December 31, 2020 Foreign currency assets Monetary items USD JPY Foreign currency liabilities Monetary items USD JPY	Foreign currency $ 9,929 5,288 2,072 13,646	Unit: (Foreign currency/NT$1,000) Ending exchange rate Carrying amount 28.480 $ 282,765 0.2763 1,461 28.480 59,011 0.2763 3,770

235 -

December 31, 2019

December 31, 2019
Foreign currency assets Monetary items USD JPY Foreign currency liabilities Monetary items USD JPY	Foreign currency $ 30,644 20,223 1,789 4,135	Ending exchange rate 29.980 0.2760 29.980 0.2760	Carrying amount
			$ 918,720 5,581 53,630 1,141

The foreign exchange gains and losses (realized and unrealized) with significant impact are as follows:

Foreign currency USD	2020	Net exchange gain or loss ($ 14,117)	2019
	Average exchange rate 31.26 (USD:NTD)		Average exchange rate 31.09 (USD:NTD)	Net exchange gain or loss
		(		(	$ 19,637)

30. Notes of disclosure

(1) Material transactions (2) and transfer investment information:
Loans to others: none.
Endorsements/guarantees for others: none.
Marketable securities held at the end of the period (excluding investment in subsidiaries, affiliates and joint ventures): Exhibit 1.
The cumulative purchase or sale of the same security for an amount exceeding NT$300 million or 20% of paid-in capital: None.
The acquisition of real estate for an amount exceeding NT$300 million or 20% of paid-in capital: None.
The disposal of real estate for an amount exceeding NT$300 million or 20% of paid-in capital: Exhibit 2
The purchase or sale with the related party for an amount exceeding NT$100 million or 20% of paid-in capital: Exhibit 3.
Receivables from related parties reaching $100 million or 20% of paid-in capital or more. None.
Engagement in derivative transactions: None.
Information on investees: Exhibit 4
236 -
(3) Information regarding investment in the territory of Mainland China:
The name of the investees in Mainland China, principal business, paid-in capital, investment methods, capital outward and inward remittances, shareholding, investment gains and losses, investment carrying amount at the end of the period, repatriated investment gains and losses, and investment quota for Mainland China: Exhibit 5.
The following significant transactions with investees in Mainland China, directly or indirectly through third regions, and their prices, payment terms, and unrealized gains or losses: Exhibit 6.
- (1) Amounts and percentages of purchases and related payables at the end of the period.
- (2) Amounts and percentages of sales and related receivables at the end of the period.
- (3) Amount of property transaction and amount of the profit and/or loss so incurred.
- (4) Balance and purposes of endorsements/guarantees or collateral provided at end of the term.
- (5) The highest balance of fund financing balance at end of the term, range of interest rates and total amount of interest in the current term.
- (6) Other transactions having significant effect upon profit and/or loss or financial standing of the current term, e.g. provision or acceptance of services.
(4) Name, number and percentage of shares held by shareholders with 5% or more of the shares: Exhibit 7.
237 -

SAMPO CORPORATION

Marketable securities held – end of period

December 31, 2020

Exhibit 1

Unit: Unless otherwise stated, NT$ thousand

Holding company	Types and names of securities	Relationship with the securities issuer	Account in book		End ofthe period	End ofthe period	End ofthe period			Remarks
				Number of shares/units (in thousands)	Carrying amount		Shareholding %		Fair value
SAMPO CORPORATION QUANBAO INVESTMENT CO., LTD. AMIGO LOGISTICS CORPORATION	Nucom International Corporation Chinese Television System Inc. WK ASSOCIATES LTD. Pushi Venture Capital Co., Ltd. WK VIII ASSOCIATES LTD. GRACE THW HOLDING MICROMAX INTERNATIONAL CORP. SAMPO CORPORATION Nucom International Corporation SAMPO CORPORATION A-KIN ALLIANCE LOGISTICS CO., LTD.	Other affiliate －－－－－－ Parent and Subsidiary Other affiliate Parent and Subsidiary －	Financial assets at fair value through other comprehensive income or loss – non-current 〞〞〞〞〞〞 Financial assets at fair value through other comprehensive income or loss – non-current 〞 Financial assets at fair value through other comprehensive income or loss – non-current 〞	882 7,581 299 899 867 2,178 3,380 10,050 144 538 250		$ 31,576 103,392 4,671 7,084 4,352 255,357 12,471 $ 418,903 $ 261,798 $ 5,154 $ 14,030 $ 1,151	4 4 1 2 2 1 19 3 1 - 7		$ 31,576 103,392 4,671 7,084 4,352 255,357 12,471 $ 418,903 $ 261,798 (Note 1) $ 5,154 $ 14,030 (Note 1) $ 1,151	@35.79 @13.64 @15.62 @7.88 @5.02 @117.26 @3.69 @26.05 @35.79 @26.05 @4.61

238 -

SAMPO CORPORATION

The disposal of real estate for an amount exceeding NT$300 million or 20% of paid-in capital

2020

Exhibit 2

Unit: Unless otherwise stated, amounts in NT$ Thousand

Company disposing property	Asset title	Date of event	Original acquisition date	Carrying amount	Trade value	The collection of proceeds	Capital gain/loss from disposition	Counterparties	Relation	Purpose of disposition	Reference for price determination	Other stipulations of the transaction
SAMPO CORPORATION	606, 619, 628, 620, 621, 630, 625, 627, 636, 567, 631, 631-1, 636- 1, 636-2 and 636- 3 of Dinghu Section, Guishan District, Taoyuan City and their above-ground buildings	2020.7.14	1988.8.8	$ 362,289	$ 1,800,000	Full recovery	$ 1,371,913 (Note 1)	Gen Yi Construction Co., Ltd.	None	Revitalization of company assets and efficient use of capital	In accordance with the valuation reports of Eurasian Real Estate Appraisal Associates and DTZ Real Estate Appraisal Associates, the sale will be conducted by public tender and bargaining, and the board of directors will authorize the chairman to decide.	Note 2

Note 2: The Company entered into a plant lease with Gen Yi Construction Co., Ltd., which was recognized as a lease agreement in accordance with IFRS 16 Sale and Leaseback Transactions.

239 -

SAMPO CORPORATION

Purchase from or sale to related parties for an amount exceeding NT$100 million or 20% of paid-in capital

2020

Exhibit 3

Unit: Unless otherwise stated, NT$ thousand

Purchase (sale) company	Counterparties	Relation		Transactions	Transactions		Trading terms different from general trade and reasons	Trading terms different from general trade and reasons	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Remarks
			Purchase (sale)	Amount	Percentage of total purchase (sale)	The credit period	Unit price	The credit period	Balance	Percentage of total notes and accounts receivable (payable)
SAMPO CORPORATION	DEBAO HOME APPLIANCE CO., LTD. NELONG ENTERPRISE CORPORATION LTD.	Parent and Subsidiary Parent and Sub- subsidiary	Purchase Purchase	$ 2,362,552 138,919	51% 3%	Same as general suppliers Same as general suppliers	Cost plus 1% to 6.5% Cost plus 1% to 6.5%	－－	－ Accounts payable ( $ 20,891 )	－ ( 2% )	Note 1

240 -

SAMPO CORPORATION

Information regarding investee’s name and location, etc.

December 31, 2020

Exhibit 4

Unit: Unless otherwise stated, NT$ thousand

Investor	Name of investee	Location	Principal business	Sumof initial investment	Sumof initial investment	Ending shareholding	Ending shareholding	Ending shareholding	Ending shareholding	Current period profit/loss of the investee	Recognized investments for current period (loss) profit (Note 1)	Remarks
				Current period- end	Previous period- end	Number of Shares (in thousands)	Percentag e	Carrying amount
SAMPO CORPORATION QUANBAO INVESTMENT CO., LTD. AMIGO LOGISTICS CORPORATION New Swell International Investment Co., Ltd. SAMPO HOME INC.	AMIGO LOGISTICS CORPORATION RECHI PRECISION CO.,LTD. New Swell International Investment Co., Ltd. QUANBAO INVESTMENT CO., LTD. DEBAO HOME APPLIANCE CO., LTD. SAMPO HOME INC. SAMPO JAPAN INC. Total AMIGO LOGISTICS CORPORATION RECHI PRECISION CO.,LTD. NELONG ENTERPRISE CORPORATION LTD. SAMPO INTERNATIONAL FOOD SERVICE CO., LTD. NISSIN GLOBAL LOGISTICS (TAIWAN) CO., LTD. AMIGO HOME LIFE CO., LTD. DONGGUAN SAMPO ELECTRONICS CO., LTD. SAMPO ASSET MANAGEMENT CO., LTD.	Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan Japan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan China Taiwan	Warehousing, transportation Compressor manufacturing, sales Investment holding Investment business Home appliance manufacturing and sales Real estate trading, leasing Marketing and Promotion Warehousing, transportation Compressor manufacturing, sales Electronics manufacturing and sales Food & Beverage Warehousing, transportation Product installation and wholesale of electrics and electronic materials Manufacturing and sale of electrics and electrons equipment Real estate trading, leasing	$ 209,546 1,550,990 31,060 ( USD 1,000 ) 1,076,000 200,000 500,000 JPY 30,000 126,097 92,740 36,600 100,000 32,090 21,000 USD 1,400 10,000	$ 209,546 1,544,735 31,060 ( USD 1,000 ) 1,076,000 200,000 500,000 JPY 30,000 125,797 92,740 36,600 50,000 32,090 21,000 USD 1,400 10,000	21,155 135,610 1,000 114,325 20,000 50,000 3,000 10,365 4,136 3,660 10,000 2,550 2,100 1,400 1,000	49 27 100 100 100 100 100 24 1 61 100 51 100 70 100		$ 449,861 2,739,654 82,360 528,149 103,259 420,298 5,627 $ 4,329,208 $ 220,905 103,515 52,843 62,278 21,026 22,039 USD 1,993 7,753	$ 116,389 709,491 1,699 41,496 68,200 ( 10,113 ) ( 484 ) 116,389 709,491 19,193 ( 20,848 ) ( 6,096 ) 1,243 USD 390 ( 1,550 )	$ 55,943 189,203 1,699 25,533 51,794 ( 16,947 ) ( 484) $ 306,741 $ 27,796 5,804 11,707 ( 20,848 ) ( 3,109 ) 1,243 USD 273 ( 1,550 )	Note 2 Note 3 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 3 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2

Note 3: Equity-method investee included in the consolidated financial statements.

241 -

Unit: Unless otherwise stated, NT$ thousand

SAMPO CORPORATION

Information regarding investment in the territory of mainland china

2020

Exhibit 5

Names of investees in China	Principal business	Paid-up capital	Mode of investments (Note 1)	Accumulated investment amount remitted at the beginning of the period	Amount of investment remitted or recoveredincurrent period	Amount of investment remitted or recoveredincurrent period	Accumulated investment amount remitted at the end of the period	Current period profit/loss of the investee	Ratio of shareholding of investment directly or indirectly made by the Company	Investment gain and loss recognized in current period (Note 2)	Book value of investment at ending	The investment income received at the end of the current period	Remark s
					Outward remittance	Recover
DONGGUAN SAMPO ELECTRONICS CO., LTD.	Manufacturing and sale of electrics and electrons equipment	USD 2 million	3	$ 42,180	$ -	$ -	$ 42,180	$ 12,204	70	$ 8,543 (Recognition basis B)	$ 56,769	$ -

Company name	Accumulated investment from Taiwan to Mainland China at ending	Amount of investment approved by Investment Commission of MOEA	Investment amount approved by the Investment Commission MOEAIC
SAMPO CORPORATION	$ 2,105,454	$ 2,437,870	$ 4,659,178

Note 1: The investment methods can be divided into the following 5 types:
To invest in Mainland China companies through remittance from a third area.
To invest in Mainland China companies through a company invested and established in a third area.
To invest in Mainland China companies through reinvesting in an existing company in a third area.
To invest in Mainland China companies directly.
Other methods.
Note 2: For the field of recognized investment Income:
(1) Please mark out if there has no investment gain or loss yet because the investment is still under planning.
(2) The basis of recognition of investment income is classified into following three types, which should be marked out.
- A. The financial statements have been audited by an international CPA firm with which CPA firms in the ROC. has a cooperative relationship.
- B. Financial statements audited by the CPAs who audit the parent company in Taiwan.
- C. Others
Note 3: In accordance with the new regulations issued by the Investment Commission of the Ministry of Economic Affairs in August 2008, the Company’s investment limit in Mainland China is calculated as 60% of the net worth or consolidated net worth, whichever is higher.
242 -

SAMPO CORPORATION

The following significant transactions with investees in Mainland China, directly or indirectly through third regions, and their prices, payment terms, and unrealized gains or losses and other related information.

2020

Exhibit 6

Unit: Unless otherwise stated, NT$ thousand

Purchase (sale) company	Counterparties	Relation	Transaction type	Purchase (sale)	Purchase (sale)	Terms and conditions	Terms and conditions	Terms and conditions	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)	Unrealized gain or loss
				Balance	Percentage (%)	Price	Payment term	Comparison with generaltransaction	Balance	Percentage (%)
SAMPO CORPORATION	DONGGUAN SAMPO ELECTRONICS CO., LTD.	Parent and Sub- subsidiary	Purchase	$ 80,725	2%	Cost or cost plus 1% to 6.5%	Same as general suppliers	Purchase price is better than general manufacturers	Accounts payable ( $ 15,126 )	( 2% )	$ -

Note 1: Related party transactions between consolidated entities have been adjusted and eliminated

243 -

SAMPO CORPORATION and its Subsidiary

Information on Dominant Shareholders

December 31, 2020

Exhibit 7

Names of Dominant Shareholders	Share	Share
	Number of shares held	Shareholding ratio
MACLADY INVESTMENT LTD.	33,108,800	8.55%

Note 1: The information on major shareholders in this Exhibit is compiled by Taiwan Depository & Clearing Corporation based on the last business day of the quarter in which the shareholders held 5% or more of the Company’s common shares and preferred shares whose registration and delivery have been completed in nonphysical form (including treasury shares). The number of shares recorded in the Company’s consolidated financial statements and the actual number of shares registered and delivered in non-physical form may differ depending on the basis of preparation of the calculations.
Note 2: If a shareholder delivers his or her shares to a trust, the above information shall be disclosed by the individual trustor account opened by the trustee. As for the shareholder’s declaration of insider’s equity in accordance with the Securities and Exchange Act, the shareholding of the shareholder includes his or her own shares plus the shares that he or she has delivered to a trust and has the right to decide the use of the trust property, etc. Please refer to the Market Observation Post System for information on insider’s equity declaration.
244 -
VI. Financial Difficulties Experienced by the Company and Its Affiliated Companies in the Most Recent Year up to the Date of Publication of This Annual Report, and Their Impact on the Company's Financial Position: None.
245 -

Seven. Review and Analysis of Financial Status and Performance and Risk Management

I. Analysis of Financial Status

Unit: NT$ thousands

			Unit: NT$ thousands	Unit: NT$ thousands
Year Item	2020	2019	Difference
			Amount	Ratio (%)
Current Asset	3,548,411	3,625,681	(77,270)	-2%
Long-term investment	3,268,377	3,105,676	162,701	5%
Property, Plant and Equipment	4,883,232	4,773,614	109,618	2%
Other Assets	914,789	901,238	13,551	2%
Total Asset	12,614,809	12,406,209	208,600	2%
Current Liabilities	2,009,280	2,783,265	(773,985)	-28%
Non-Current Liabilities	900,000	1,050,000	(150,000)	-14%
Other Liabilities	1,611,458	1,784,552	(173,094)	-10%
Total Liabilities	4,520,738	5,617,817	(1,097,079)	-20%
Capital Stock	3,872,000	3,872,000	0	0%
Capital Surplus	171,699	151,374	20,325	13%
Retained Earnings	4,457,091	3,241,243	1,215,848	38%
Other Equity	(406,719)	(476,225)	69,506	15%
Total Shareholders' Equity	8,094,071	6,788,392	1,305,679	19%

Analysis of changes in the ratio of increase/ decrease of current/previous periods:

Current liabilities decreased by 28% compared with the prior period, which was mainly due to a decrease in short-term bills payable and long-term borrowings due within one year or one operating cycle.
Total liabilities decreased by 20% compared with the prior period, which was mainly due to a decrease in current liabilities.
Retained earnings increased by 38% compared with the prior period, which was mainly due to an increase in profit or loss after tax in the current period.
246 -

Review and Analysis of Financial Status and Performance and Risk Management

II. Financial Performance

(I) Comparison and Analysis of Operating Results in the last two years

		Unit:NT$thousands	Unit:NT$thousands	Unit:NT$thousands
Year Item	2020	2019	Amount Increase (decrease)	Difference
				Ratio (%)
Operating Revenue	7,670,020	7,116,009	554,011	8%
Operating Cost	6,267,997	5,996,028	271,969	5%
Gross Profit	1,402,023	1,119,981	282,042	25%
Operating Expenses	874,713	822,186	52,527	6%
Operating Profit	527,310	297,795	229,515	77%
Non-Operating Income and Expenses	1,557,296	514,010	1,043,286	203%
Net Profit Before Tax	2,084,606	811,805	1,272,801	157%
Income Tax Expense	248,611	38,943	209,668	538%
Net Income	1,835,995	772,862	1,063,133	138%
Other Comprehensive Net Income After Tax	19,210	83,371	(64,161)	-77%
Total Comprehensive Income	1,855,205	856,233	998,972	117%

Analysis of changes in the ratio of increase/ decrease of current / previous periods:

Operating gross margins in the current period increased by NT$282,042 thousand compared with the prior period, which was mainly due to an increase in operating income.
Operating income in the current period increased by NT$229,515 thousand compared with the prior period, which was mainly due to an increase in operating income.
Non-operating income and expenditure in the current period increased by NT$1,043,286 thousand compared with the prior period, which was mainly due to an increase in the gains on the disposal of property, plant and equipment.
Income tax expense in the current period increased by NT$209,668 thousand compared with the prior period, which was mainly due to the reclassification of the land revaluation increment tax on the disposal of property, plant and equipment.
Other comprehensive income in the current period decreased by NT$64,161 thousand, which was mainly due to a decrease in the unrealized gains or losses on investments in equity instruments measured at fair value through other comprehensive income and the exchange differences on translation of financial statements of foreign operations, and an increase in the share of other comprehensive income of associates accounted for using the equity method.
247 -
(II) The potential impact of the expected sales and its basis on the Company's future financial business and response plans: The Company did not publish financial forecasts, and only set revenue targets based on the industrial environment, market supply and demand, and its operating conditions. The Company is financially robust and has sufficient funds to support all of its operations, research and development, and other relevant activities. It is estimated that there will be no adverse effects arising from the financial business in the coming year.

III. Cash Flow

(I) Liquidity analysis of cash flow in the last two years

Unit: NT$ thousands

			Unit: NT$thousands	Unit: NT$thousands
Year Item	2020	2019	Difference
	Amount Increase (decrease)	Amount Increase (decrease)	Amount	Ratio (%)
Cash flow from operating activities	377,240	514,975	(137,735)	-27%
Cash flow from investment	1,222,220	(20,733)	1,242,953	5,995%
Cash flow from financing activities	(1,927,891)	(990,670)	(937,221)	-95%
Exchange rate gains and losses	(2,056)	49,778	(51,834)	-104%
Net cash flow	(330,487)	(446,650)	116,163	26%

Cash flow analysis：

Decrease in cash inflow from operating activities was mainly due to an increase in inventories and in income tax paid.
Increase in cash inflow from investing activities was mainly due to an increase in the proceeds from the disposal of property, plant and equipment.
Increase in cash outflows from financing activities was mainly due to repayment of long- and short-term borrowings.
(II) Improvement Plan for Insufficient Liquidity : The Company does not suffer from insufficient liquidity.

(III) Liquidity Analysis for the Coming Year:

Unit: NT$ thousands

Balance of cash-beginning	Estimated net cash flow from operating activities	Estimated net cash flow from investment and financing activities	Cash Surplus (Deficit)	Remedyfor Cash Inadequacy	Remedyfor Cash Inadequacy
				Investment activities	Financing activity
834,049	361,910	(606,762)	589,197	-	-

IV. Impact of Major Capital Expenditures on Corporate Finances and Business for the Most Recent Year: N/A

248 -

Review and Analysis of Financial Status and Performance and Risk Management

V. The major causes for profits or losses incurred by investments during the most recent year; rectifications and investment plans for the next year

(I) Investment policy

The company’s investment policy is to focus on the development of core businesses, take advantage of the vertical integration of the supply chain, and carefully evaluate various investment plans in order to strengthen the strategic objectives of the company’s investment deployment.

(II) The main reason for profit or loss and its improvement plan

The investment income recognized under the equity method in 2020 was NT$195,007 thousand, which was mainly due to the investment in core businesses with a focus on product research and development and to actively develop new customers.

(III) Investment plan for the coming year

The company’s long-term investment plan for the next year will continue to uphold the spirit of the investment policy to strengthen the competitiveness of the core business and try to explore a diversified business operation.

VI. Risk analysis and evaluation and response

(I) The impact of interest rate, exchange rate changes, and inflation on the company’s profit and loss and future response measures:
Impact on the company’s profit and loss:

Impact on the company’s profit and loss:
Item	2020 (NT$ Thousand; %)
Interest income and expenses, net	-14,178
Exchange gains and losses, net	-20,878
Ratio of net interest income and expenditure to net operating income	-0.18 %
Ratio of net interest income and expenditure to net income before tax	-0.68 %
Ratio of net exchange gains and losses to net operating income	-0.27 %
Ratio of net exchange gains and losses to net income before tax	-1.00 %

(1) Interest rate changes

The company’s liabilities are mainly loans in New Taiwan dollars. The company has signed mid-term and long-term loan contracts with the Bank of Taiwan and other banks with the loan interest rate evaluated at any time; therefore, the risk is controllable.

(2) Exchange rate changes

The company’s exchange rate risk is mainly from the exports of goods and imports of raw materials. The company has hedged the risk of exchange rate by making loans with letters of credit.

(3) Inflation

The inflation rate has been stable in Taiwan in recent years; therefore, the

249 -

impact of inflation rate on the company’s operations or profits is minimal.

Future response measures:
(1) Response measures for changes in interest rates

The interest rate in money market is relatively low currently. In terms of lowering the risk of interest rate changes; the company had signed long-term loans agreements with the Bank of Taiwan and other banks in 2020, and also negotiated with financial institutions in response to changes in market interest rates; therefore, the risk is controllable.

(2) Response measures for changes in exchange rate

In terms of changes in exchange rate, hedge the risk of exchange rate changes by buying foreign exchange in advance at a better exchange rate, making loans with letters of credit, etc.

(3) Response measures for inflation

The company observes the fluctuation of market prices at any time and maintains a good relationship with suppliers to avoid a major impact of inflation on the Group.

(II) Policies on high-risk and highly leveraged investments, loaning of funds, endorsements/guarantees, and trading of derivatives; the main causes of any profit or loss incurred and future response measures:

The company did not engage in any high-risk or highly leveraged investment in the most recent year.
The company has formulated the “Procedures for Loaning of Funds” and “Procedures for Making of Endorsements/Guarantees” in accordance with the relevant law and regulations of the Financial Supervisory Commission. Such operation will be handled in accordance with the Procedures and reported in accordance with the regulations of the competent authority.
The company did not engage in derivatives transactions in the most recent year.

(III) Future research and development plans, and the projected expenses:

1. Future R&D plan

The current R&D for electronic products is moving towards “smart home appliances,” which is also the mainstream of home appliance development in the future. In particular, how to cooperate with the arrival of the Internet age and provide a convenient smart home appliance is a research and development task for us to tackle. In response to the government’s promoting a smart country, smart communities, smart education, and smart homes have been able to integrate across fields through increasingly mature smart technologies, such as, artificial intelligence, the Internet of Things, and big data analysis. Under the circumstance, smart home appliances have a fundamental advantage to quickly enter families to connect various services and applications, which is the foundation for creating a smart country. In addition, in response to the government’s needs for smart education, Sampo continues to create a smart teaching environment needed for network applications, such as, electronic white boards, smart signage, AI information query, home smart networking displays, etc., especially when the lifestyle is affected by the COVID-19 pandemic, in response to the needs of digital online learning in the future and the implementation of smart teaching on campus, smart home appliances and displays

250 -

Review and Analysis of Financial Status and Performance and Risk Management

are indispensable basic equipment.

In the development of home ultra-thin wide color gamut displays, technical research and development is still focusing on higher imaging technology, and strengthens the sound effect technology of Sampo’s unique Thunderbolt, continues the 4KHDR display and dual Dolby decoding application, and adds Google TV series. In addition to the original Dolby decoding, DBX-TV audio tuning technology has been introduced in the audio processing, which greatly improves the sound effects of Thunderbolt. In addition, large size 4K ultra-high resolution and dedicated video conferencing monitors are well recognized in the professional market and continue to gain market share. In terms of exporting ODM, the company focuses on R&D investment in video conference systems to meet customer needs for large-scale networked digital signage products, cash registers, advertising machines, vessel displays, and other LED LCD control panels so to continue to cooperate with wellknown international brands.

In terms of home appliances, the main products are: full series of Level 1 energy efficiency inverter system upgrade, R32 air-conditioning series lineup extension development, one-to-multiple inverter separation model research and development, Nano-Ti Aurora titanium Nano antibacterial refrigerator lineup extension, 610L large-capacity refrigerator development, development of a full range of AI smart energy-saving home appliances, research and development of Level 1 energyefficiency air cleaning humidifiers, etc.

Estimated R&D expenditure:

The estimated R&D expenditure this year is approximately NT$82,221 thousand.

(IV) The impact of major domestic and foreign policy and changes in law on the company’s financial business and response measures: The company has taken appropriate measures to respond to major domestic and foreign policies and changes in law in the most recent years; therefore, there will be no significant impact on the company’s financial business.
(V) Effects of technological and industrial changes to the company’s financial and business performance, and the response measures:

The company always observes the technical development of digital electronics and home appliance industry and the evolution of information security technology with appropriate protective measures adopted. Up to now, the impact of technological changes and industrial changes on the company’s financial business is minimal.

(VI) The impact of corporate image change on corporate crisis management and response measures: None.

(VII) Expected benefits, possible risks, and response measures of merger and acquisition: No M&A is planed currently.

(VIII) The expected effect and possible risk of the plant expansion, and the response measures:

Expected benefits: The license for use is obtained for Tainan plant, and the production line relocation plan is in progress. The expected benefits include having the production efficiency increased by 15% and the freight charges saved by 20%.
Possible risks and response measures:
251 -
A. Equipment depreciation and amortization: Improve production efficiency to reduce labor costs.
B. Personnel issues in early stage: Train reserve personnel early and strengthen recruitment in southern Taiwan.
C. Material supply chain: Develop the supplier of materials in southern Taiwan.

(IX) The risk of concentrated purchase or sales and the response measures:

Except for the company’s in-house production or transfer investment, there is no concern of over concentrated suppliers and customers comparing to the general practice of the industry.

(X) The impact and risks of the massive transfer or replacement of shares by the directors, supervisors, or major shareholders with more than 10% shareholdings on the company and the response measures: None
(XI) The impact and risks of the change in management on the company and the response measures: None

(XII) Major litigation, non-litigation, or administrative disputes of the company and the directors, supervisors, President, substantive persons in charge, major shareholders with more than 10% shareholdings, and subsidiaries that are closed or in pending with a result possibly influential to the shareholders’ equity or the securities prices:

Refrigerator accident case of home appliances

The company sold a batch of home appliances to dealer in 2004, one of which was sold by its parent company to end user in the United States. The said end user subsequently claimed that a fire was caused by the company’s home appliances in 2012 with damages resulted; therefore, a lawsuit was filed against dealer for compensation. dealer and the said end user reached a settlement for the litigation with a compensation paid by dealer. dealer then filed an arbitration application to American Arbitration Association, requesting the company and Tianjin Xinbao to jointly compensate dealer. The American Arbitration Association made an arbitration judgment on February 3, 2016 and ruled that the company and Tianjin Xinbao should pay dealer US$3,052 thousand for related losses.

Regarding this foreign arbitration judgment, according to Paragraph 2, Article 47 of The Arbitration Law of ROC, if dealer applies for recognition to the court of Taiwan, it will have the same effect to both parties as a ruling delivered by the courts in Taiwan. dealer after obtaining the aforementioned arbitration judgment had applied to the U.S. District Court for the Southern District of New York to approve the arbitration judgment, and the Taoyuan District Court of Taiwan had served relevant judicial documents to the company in accordance with the provisions of reciprocal judicial assistance. The U.S. District Court for the Southern District of New York had delivered a ruling to recognize the arbitration judgment on January 17, 2018. However, as of the financial report issuance date, dealer had not yet applied to the courts in Taiwan to have the said arbitration judgment recognized, or requested the courts in Taiwan to rule for recognizing the ruling of the U.S. District Court for the Southern District of New York in accordance with Article 4-1 of the Compulsory Enforcement Act of Taiwan. Therefore, the time schedule of dealer’s claim for damages and the actual amount and scope of claims involved is expected to be postponed after the aforementioned date.

252 -

Review and Analysis of Financial Status and Performance and Risk Management

In addition, the company had made claims to Chung Kuo Insurance Co., Ltd. (hereinafter referred to as “Chung Kuo”) for the aforementioned dealer’s claim for compensation. Chung Kuo Insurance Co., Ltd. refused to perform the insurance responsibility related to the said claim. The company had filed a lawsuit to the court based on the product liability insurance policy signed with Chung Kuo Insurance Co., Ltd., claiming that Chung Kuo Insurance Co., Ltd. should be liable for statutory claims and requiring Chung Kuo Insurance Co., Ltd. to pay the insurance settlement in this case. The company had appointed a lawyer to fully and adequately provide the court with the case’s claims and related supporting materials in favor of the company. According to the assessment of the legal consultant, there remained room for the company to claim after the ruling in the first instance of Taipei District Court. Therefore, an appeal has been filed in accordance with the law (Case No: 2020.Insurance.Sun.Zi No. 1 of the High Court), which is currently being processed by the Taiwan High Court. As of recently, the High Court had resumed the trial on November 9, 2020. In response to the replication of Chung Kuo Insurance Co., Ltd. and the court’s notice, the company continued to reiterate the relevant favorable explanations and the relevant evidence (i.e. U.S. arbitration judgments, certification of fire assessment and business appraisal reports, etc.); and also ensured the continuation of litigation and the company’s rights and interests. The judge ruled to have the certification and other procedures carried out. Therefore, it is estimated that there remains relevant court and case trial procedures to be carried out.

253 -

(XIII) Other important risks and response measures:

Information security risk assessment and analysis:

Most users use information systems to handle daily accounting operations along with the digitalized business operations; therefore, all data is stored in the computer system. The development of technology causes the company operations facing cyberattacks, data theft, virus threats, database intrusion or destruction, and other information security risks that are detrimental to the company’s business operations.

The company for minimizing possible losses adopts the following response measures for the information system according to the degree of impact caused by the damage occurred:

(1) Formulate various information security related policies and regulations, and have them implemented accordingly.
(2) Install a firewall to prevent outsiders from intruding into the system through the network.
(3) Install anti-virus software in the system server and terminal equipment used by colleagues to reduce the risk of virus infection and attack.
(4) General inquiry and printing have been masked for sensitive personal data to reduce the risk of personal data leakage.
(5) Install a host backup system and data backup mechanism, and send the backup media to a location different from the computer room for safekeeping.
(6) Perform annual system recovery drills to get familiar with having the operations resumed as quickly as possible when information system damage occurs.
(7) Promote information security annually to remind colleagues of information security awareness at any time. And reexamine the possible risks; also, upgrade appropriate hardware and software equipment resources.

As of the annual report publication date, the company did not have any major information security incidents occurred causing the company’s business and operations interrupted.

VII. Other aspects: There is currently no other material risk.

254 -

Special Disclosures

Eight. Special Disclosures

I. Information on affiliated companies

(I) Organizational chart of affiliated companies

As of December 31st, 2020

==> picture [456 x 311] intentionally omitted <==

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

100% QUANBAO 61%
NELONG ENTERPRISE
INVESTMENT CO., 銓寶投資有限公司年隆企業股份有限公司CORPORATION LTD.
LTD.
23.89%
48.76% AMIGO LOGISTICS 東源物流事業股份有 100% 頑味國際餐飲股份有限SAMPO INTERNATIONAL
CORPORATION FOOD SERVICE CO., LTD.
限公司公司
100% 盛寶建設股份有限公SAMPO HOME INC. 100% 東源居家生活股份有限AMIGO HOME LIFE CO.,
SAMPO聲寶 LTD.
司公司
100% 德寶家電股份有限公DEBAO HOME 51% 日新日茂國際物流股份NISSIN GLOBAL
APPLIANCE CO., LTD. LOGISTICS (TAIWAN) CO.,
司有限公司LTD.
100% SAMPO 100%
INTERNATIONAL SAMPO ASSET 聚寶資產管理股份有限
TRADE& INVESTMENT MANAGEMENT CO., LTD. 公司
Co., Ltd
100% 70%
SAMPO JAPAN 株 DONGGUAN SAMPO
式會社SAMPO JAPAN INC. 東莞聖柏電子有限公司ELECTRONICS CO., LTD.
----- End of picture text -----

255 -

Special Disclosures

(II) The basic Information about affiliated companies:
Information of direct investment companies:

Unit: NT$ thousands /US$ thousands/JPY thousands

Name of Company	Date of incorporation	Address	Paid-in capital	Main business or products
SAMPO INTERNATIONAL TRADE& INVESTMENT Co., Ltd	1993.11.22	Omar Hodge Building, Wickhams Cay I, P.O. Box 362, Road Town, Tortola, British Virgin Islands	US$1,000	Holding Company
QUANBAO INVESTMENT CO., LTD.	1998.09.21	9F.-1, No. 374, Sec. 2, Bade Rd., Songshan Dist., Taipei City	NT$ 1,143,250	Investment business
DEBAO HOME APPLIANCE CO., LTD.	1999.10.25	No.26, Dinghu Rd., Gueishan Dist., Taoyuan City	NT$ 200,000	Household appliances manufacturing
AMIGO LOGISTICS CORPORATION	1974.12.26	No.18-1, Dinghu 5th St., Guishan Dist., Taoyuan City	NT$ 433,885	Transportation, Warehousing, Logistics Services
SAMPO HOME INC.	2015.3.10	10f.-2, No.203, Gongyuan Rd., Linkou Dist., New Taipei City	NT$500,000	Building construction and development
SAMPO JAPAN INC.	2018.1.10	Iwatani Daini Bld.11f, 3-2-14, Azuchimachi, Chuo-Ku, Qsaka-City,Osaka,541-0052,Japan.	JPY30,000	Trading

Reinvestment information of affiliated companies:

Unit: NT$ thousands /US$ thousands

Name of Company	Date of incorporation	Address	Paid-in capital	Main business or products
NELONG ENTERPRISE CORPORATION LTD.	2014.10.17	5f, No.15, Ziyou St., Tucheng Dist., New Taipei City	NT$ 60,000	Household appliances and audio- visual products manufacturing
DONGGUAN SAMPO ELECTRONICS CO., LTD.	2017.7.26	Building B, Sintave Industrial Park, Lundu Road, Qisha Village, Shatian Town, Dongguan City, China	US$ 2,000	Electronic product manufacturing and sales
NISSIN GLOBAL LOGISTICS (TAIWAN) CO., LTD.	1991.01.03	No.18-1, Dinghu 5th St., Guishan Dist., Taoyuan City	NT$50,000	Forwarder, Warehousing
AMIGO HOME LIFE CO., LTD.	2004.12.02	No.18-1, Dinghu 5th St., Guishan Dist., Taoyuan City	NT$21,000	Transportation, Warehousing, Logistics Services
SAMPO INTERNATIONAL FOOD SERVICECO.,LTD.	2018.10.26	No.26, Dinghu Rd., Gueishan Dist., Taoyuan City	NT$100,000	Catering industry
SAMPO ASSET MANAGEMENT CO.,LTD.	2018.12.03	10f.-1, No.203, Gongyuan Rd., Linkou Dist., New Taipei City	NT$10,000	Real estate and asset management

256 -

Special Disclosures

(III) For companies defined as holding company and its subordinate, relevant Information on shareholders shall be listed: None.

(IV) Directors, Supervisors and Presidents of Affiliated Companies
Information about directors, supervisors and managers of direct investment companies:

			Unit: shares/US$/JPY;%	Unit: shares/US$/JPY;%
Name of Company	Title	Name or Representative	Shareholding/Investment
			Shares/Investment Amount	Shareholding Ratio
SAMPO INTERNATIONAL TRADE & INVESTMENT Co., Ltd	Director	Legal Representative of SAMPO CORPORATION- PENG, CHUN-YEN	US$1,000,000	100.0%
	Director	Legal Representative of SAMPO CORPORATION- CHEN, SHENG-CHUAN
QUANBAO INVESTMENT CO.,LTD.	Chairman	Legal Representative of SAMPO CORPORATION- PENG, CHUN-YEN	114,325,000 Shares	100.0%
DEBAO HOME APPLIANCE CO.,LTD.	Chairman	Legal Representative of SAMPO CORPORATION- CHEN, YE-KWAN	20,000,010 Shares	100.0%
SAMPO HOME INC.	Chairman	Legal Representative of SAMPO CORPORATION- CHEN, SHENG-TIEN	50,000,000 Shares	100.0%
	Director	Legal Representative of SAMPO CORPORATION- CHEN, SHENG-CHUAN
	Director	Legal Representative of SAMPO CORPORATION- HSU, CHING-CHAO
	Supervisor	Legal Representative of SAMPO CORPORATION- PENG, CHUN-YEN
	General Manager	YANG,MAO-SHEN	-	-
AMIGO LOGISTICS CORPORATION	Chairman	Legal Representative of SAMPO CORPORATION- CHEN, SHENG-TIEN	21,154,865 Shares	48.76%
	Director	Legal Representative of SAMPO CORPORATION- HSU, CHING-CHAO
	Director	Legal Representative of SAMPO CORPORATION- LUO, WEI-HSU

257 -

			Special Disclosures	Special Disclosures
Name of Company	Title	Name or Representative	Shareholding/Investment
			Shares/Investment Amount	Shareholding Ratio
	Director/ General Manager	Legal Representative of SAMPO CORPORATION - CHAN, I- JUI
	Director	Legal Representative of FUDY INVESTMENT CO., LTD - CHEN, SHENG-CHUAN	2,349,206 Shares	5.41%
	Supervisor	Legal Representative of QUANBAO INVESTMENT CO., LTD - LU,TSE-AN	10,365,643 Shares	23.89%
	Supervisor	CHEN, SHENG-AN	436,216 Shares	1.01%
SAMPO JAPAN INC.	Chairman	Legal Representative of SAMPO CORPORATION- CHEN, SHENG-TIEN	JPY30,000,000	100%

258 -

Special Disclosures

2. Information about directors, supervisors and managers of affiliated reinvestment companies:

Unit: shares/US$; %

			Unit: shares/US$;%	Unit: shares/US$;%
Name of Company	Title	Name or Representative	Shareholding/Investment
			Shares/ Investment Amount	Shareholding Ratio
DONGGUAN SAMPO ELECTRONICS CO., LTD.	Chairman	Legal Representative of SAMPO INTERNATIONAL TRADE& INVESTMENTCo.,Ltd-CHEN,YE-KWAN	US$1,400,000	70%
	Director	Legal Representative of SAMPO INTERNATIONAL TRADE& INVESTMENTCo.,Ltd-CHEN, SHENG-CHUAN
	Director	Legal Representative of SAMPO INTERNATIONAL TRADE& INVESTMENTCo.,Ltd- LU,TSE-AN
	Director	YUEH,PAI-CHUAN	US$480,000	24%
	Director	CHEN, JU-CHENG	US$120,000	6%
	Supervisor	PENG, CHUN-YEN	-	-
SAMPO INTERNATIONAL FOOD SERVICE CO., LTD.	Chairman	Legal Representative of QUANBAO INVESTMENT CO., LTD - CHEN, SHENG-TIEN	10,000,000 Shares	100%
	Director	Legal Representative of QUANBAO INVESTMENT CO., LTD - LUO, WEI-HSU
	Director	Legal Representative of QUANBAO INVESTMENT CO., LTD - PENG, CHUN-YEN
	Supervisor	Legal Representative of QUANBAO INVESTMENT CO., LTD - CHIANG, CHUAN-TIEN
SAMPO ASSET MANAGEMENT CO.,LTD.	Chairman	Legal Representative of SAMPO HOME INC - YANG, MAO-SHEN	1,000,000 Shares	100%
NELONG ENTERPRISE CORPORATION LTD.	Chairman	WU, TSUNG-LI	201,400 Shares	3.36%
	Director	Legal Representative of QUANBAO INVESTMENT CO., LTD - CHEN, YE-KWAN	3,660,000 Shares	61%
	Director	Legal Representative of QUANBAO INVESTMENT CO., LTD - CHANG, HONG

259 -

Special Disclosures

Name of Company	Title	Name or Representative	Shareholding/Investment	Shareholding/Investment
			Shares/ Investment Amount	Shareholding Ratio
	Supervisor	Legal Representative of MACLADY INVESTMENT LTD - LU, TSE-AN	600,000 Shares	10%
NISSIN GLOBAL LOGISTICS (TAIWAN) CO., LTD.	Chairman	Legal Representative of AMIGO LOGISTICS CORPORATION - CHAN, I- JUI	2,550,000 Shares	51%
	Director	Legal Representative of AMIGO LOGISTICS CORPORATION - HSU, CHING-CHAO
	Director	Legal Representative of AMIGO LOGISTICS CORPORATION - PENG, CHUN-YEN
	Director	Legal Representative of NISSIN TRANSPORTATION & WAREHOUSING(H.K.) LTD.-KIMURA, KUNIO	2,450,000 Shares	49%
	Director	Legal Representative of NISSIN TRANSPORTATION & WAREHOUSING(H.K.)LTD.-KIKKAWA,YOSHIKI
	Director / General Manager	Legal Representative of NISSIN TRANSPORTATION & WAREHOUSING(H.K.)LTD.-YOKOYAMA,TOSHIYUKI
	Supervisor	LU, TSE-AN	-	-
	Supervisor	MORITA, HAJIME	-	-
AMIGO HOME LIFE CO., LTD.	Chairman	Legal Representative of AMIGO LOGISTICS CORPORATION - CHAN,I- JUI	2,100,000 Shares	100%

260 -

Special Disclosures

(V) Operational Highlight of Affiliated Companies

Operational highlights of direct investment companies in 2020

Unit: NT$ thousands

Name of Company	Name of Company	Capital	Capital	Total Assets	Total Assets	Total Liabilities	Total Liabilities	Net Value	Net Value	Operating Revenue	Operating Profit	Net Income (after Tax)	EPS (after Tax)
QUANBAO INVESTMENT CO., LTD.		1,143,250		797,388		200		797,188		41,410	39,509	41,496	N/A
SAMPO INTERNATIONAL TRADE& INVESTMENT Co., Ltd													N/A
		31,060		82,910		550		82,360		-	(8,594)	(1,699)

DEBAO HOME APPLIANCE CO.,LTD.		200,000		402,918		282,951		119,967		2,362,555	67,946	68,200	3.41
AMIGO LOGISTICS CORPORATION		433,885		1,386,228		450,583		935,645		903,896	149,524	116,389	2.68
SAMPO HOME INC.		500,000		474,730		32,244		442,486		16,433	(8,294)	(10,113)	(0.20)
SAMPO JAPAN INC.		8,547		5,627		-		5,627		871	(1,469)	(484)	N/A
Operational highlights of affiliated reinvestment companies in 2020												Unit: NT$thousands
Name of Company	Capital		Total Assets		Total Liabilities		Net Value		Operating Revenue		Operating Profit	Net Income (after Tax)	EPS (after Tax)
DONGGUAN SAMPO ELECTRONICS CO.,LTD.	58,369		228,201		147,102		81,099		465,376		18,949	12,204	N/A
AMIGO HOME LIFE CO.,LTD.	21,000		38,956		16,917		22,039		146,720		1,238	1,243	0.59
NISSIN GLOBAL LOGISTICS (TAIWAN) CO., LTD.
	50,000		45,441		4,213		41,228		8,668		(6,304)	(6,096)	(1.22)

SAMPO INTERNATIONAL FOOD SERVICE CO.,
	100,000		101,842		39,564		62,278		31,799		(20,819)	(20,848)	(2.08)
LTD.

SAMPO ASSET MANAGEMENT CO.,LTD.	10,000		9,875		2,122		7,753		11,399		(1,807)	(1,550)	(1.55)
NELONG ENTERPRISE CORPORATION LTD.	60,000		241,972		155,343		86,629		169,856		21,563	19,193	3.20

Unit: NT$ thousands

261 -
(VI) The overall business scope and cooperation status of the affiliated companies
A. The overall business scope of the affiliated companies:
- a. Electronics industry: manufacturing and sales of computer peripheral products and technology products
- b. Household appliance industry: manufacture and sale of household appliances
- c. Construction industry: building construction, development and asset management
B. Status of business cooperation between the affiliated companies

Name of Company	Business cooperation status
DEBAO HOME APPLIANCE CO., LTD.	Manufacturing of household appliances
SAMPO JAPAN INC.	Household appliance trading business
NELONG ENTERPRISE CORPORATION LTD.	Household appliances and electronic parts manufacturing
AMIGO LOGISTICS CORPORATION	Logistics services, such as warehousing and transportation of household appliances
DONGGUAN SAMPO ELECTRONICS CO., LTD.	Manufacturing and sales of electronic products
SAMPO HOME INC.	Building development and asset management、Promotion of smart household appliances

(VII) Consolidated Financial Statements of Affiliated Companies: Please refer to Statement of Affiliate’s Consolidated Financial Report

(VIII) Affiliation Report: Not applicable.

II. Private Placement of Securities of the Most Recent Year up to the Publication Date of this Annual Report: None.

III. Holding or Disposal of the Company's Shares by the Subsidiaries of the Most Recent Year up to the Date of Publication of this Annual Report:

As of April 30, 2021 Unit: NT$ thousands; shares; %

Name of affiliated companies	Capital	Source of funds	Our company's shareholding ratio	Date of holding or disposal	Number and amount of shares held	Number and amount of shares sold	Investment profit and loss	The number and amount of shares held by the subsidiary on the date of publication of this annual report	Pledge setting status	Our company's endorsement and guarantee amount for subsidiaries	The amount our company loaning funds to the subsidiaries
QUANBAO INVESTMENT CO., LTD.	1,143,250	-	100%	-	-	-	-	10,049,830 Shares 482,468 thousand	None	None	None
AMIGO LOGISTICS CORPORATION	433,885	-	72.65%	-	-	-	-	538,576 Shares 10,846 thousand	None	None	None

IV. Other Necessary Supplements: None.

262 -

Special Disclosures

Nine. Events of Considerable Impact on Shareholders’ Equity or on Prices of Securities as Specified in Subparagraph 3, Paragraph 2 of Article 36 of the Securities and Exchange Act: None.

263 -

SAMPO CORPORATION CHAIRMAN ： CHEN MAO-BANG INDUSTRY AND COMMERCE DEVELOPMENT FOUNDATION

AI assistant

SAMPO — Annual Report 2020

51876_rns_2021-09-07_8d05e56d-197e-4d93-8bc7-3602ca3ba4e1.pdf

SAMPO CORPORATION

2020 Annual Report

Notice to readers

I. Name, title, contact number and email address of company spokesperson and deputy spokesperson:

II. Address and telephone number of headquarters, branches and industrial factories:

III.The name, address, website and telephone number of the stock transfer agency:

IV. The name, firm name, address, website and phone number of the Certificated Public

Accountants (CPAs) of the financial report for the most recent year:

VI. Company Website: http://www.sampo.com.tw

Table of Contents

Report to shareholders

One. Report to Shareholders

Dear Shareholders, Ladies and Gentlemen:

I. Business result in 2020

(III) Profitability analysis:

Report to shareholders

(IV)Research and development status:

II. Summary of business plan 2021

Report to shareholders

(III) Important production and marketing policies:

Report to shareholders

Two. Company Profile

I. Establishment date

II. Company history

Three. Corporate governance

I. Organizational system

(I) Organizational structure

(II) Business operations of main segments

Corporate governance

II. Profiles of Directors, Supervisors, President and Vice Presidents, Associate Vice Presidents, Heads of the Departments and Branches

(I) Profiles of Directors and Independent Director

1. Corporate shareholders' main shareholders

Corporate governance

(II) Background information of the President, Vice Presidents, Assistant Vice Presidents and heads of various departments and branches

III. Remuneration paid to Directors, Supervisors, the President, and the Vice President in the most recent year

(I) Remuneration to general and independent directors (collective disclosure by name and range of remuneration):

Corporate governance

Payment scale

(II) Remuneration to Supervisor (name is disclosed in the respective column of the range of remuneration table according to the lump sum payment method): Not applicable.

(III) Remuneration to President and Vice President (name is disclosed in the respective column of the range of remuneration table according to the lump sum payment method):

Corporate governance

Payment scale

Corporate governance

IV. The pursuit of Corporate Governance

Corporate governance

2. The Board of Directors evaluation performed

The 2020 Board performance evaluation

(II) Information on the operation of the Audit Committee

Corporate governance

Corporate governance

Corporate governance

(IV) The composition and operation of the Remuneration Committee:

1. Information of the Remuneration Committee members:

Corporate governance

Corporate governance

Corporate governance

Corporate governance

Corporate governance

Corporate governance

Corporate governance

(VII) If the company has the “Corporate Governance Best-Practice Principles” and related regulations formulated, the inquiry method should be disclosed:

(VIII) Other important information that may help to understand the operation of corporate governance should also be disclosed.

2. Managers’ participating corporate governance training:

(IX) The following matters related to the implementation of the internal control system should be disclosed:

Corporate governance

SAMPO CORPORATION Declaration of Internal Control System

SAMPO CORPORATION

(XI) Major resolutions of the shareholder and board meetings in the most recent year to the day this Annual Report was printed:

2. Major resolutions of the Board of Directors

Corporate governance

V. Independent auditor’s fee

VI. Change of CPAs:

(I) Former CPA

(II) New CPAs:

VII. The company’s chairman, President, or any manager involved in financial or accounting affairs being employed by the CPA Firm or any of its affiliates within the year: None

(I) Change in equity

Corporate governance

SAMPO Annual Report 2020