SANITAR - Annual Report 2021 | FinancialReports.eu

sStock Code: 1817

SANITAR Co., Ltd.

2020 Annual Report

Notice to readers

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

Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw

SANITAR’s Annual Report is available at: http://www.caesar.com.tw Printed on April 27th, 2021

I. Name, title, contact telephone number and e-mail address of the spokesperson and spokesperson-in-charge

Name of Spokesperson ： Chen Yu Cuan

Title: Deputy General Manager of Finance

Contact number: (02)8512-3712

E-mail address: [email protected]

Name of Proxy Spokesperson: Lee Ching Rong

Title: Special Assistant to the General Manager Contact number: (02)8512-3712

E-mail address: [email protected]

II. Address and number of head office, branch and factory

Head Office Address: 7F, No. 111-8, Xingde Road, Sanchong District, New Taipei City, Taiwan

Tel: (02)8512-3712

Addresses and telephone numbers of branch offices and factories: Not applicable

III. Name, address, website and telephone number of the transfer agent

Name: Stock Agency Department of Fubon Securities Co.

Address: 6F, No. 6, Sec. 1, Zhongxiao West Road, Zhongzheng District, Taipei City, Taiwan

Website: http://www.gfortune.com.tw Telephone: (02)2371-1658

IV. Name, address, website and telephone number of the accountant who issued the most recent annual financial report

Name of Accountant: Connie Y. Su, CPA, and Bo-Jen Weng, CPA

Name of Firm: Deloitte Taiwan

Address: 20F, No. 100, Songren Road, Xinyi District, Taipei City, Taiwan Website: http://www.deloitte.com.tw

Tel: (02)2725-9988

V. The name of the exchange where the overseas marketable securities are listed and

the way to inquire the information of the overseas marketable securities

None

VI. Company website

http://www.caesar.com.tw

I. Report to Shareholders ................................................................................................................ 1 II. Company Profile ......................................................................................................................... 6 1. Date of Incorporation ........................................................................................................... 6 2. Company History.................................................................................................................. 6 III. Corporate Governance Report ................................................................................................ 8 1. Organization .......................................................................................................................... 8 2. Directors, Supervisors, President, Vice President, Assistant Managers and Heads of Departments and Branch Organizations .................................................... 11 Note 1: Passed by the Board in the board meeting held on Dec. 24, 2020. 3.3. Remuneration of Directors, Supervisors, President, and Vice President in the Most Recent Fiscal Year ........................................................................................... 17 4. Implementation of Corporate Governance ..................................................................... 31 5. Information Regarding the Company’s Audit Fee and Independence .................... 122 6. Replacement of CPA ......................................................................................................... 123 7. Where the company's chairperson, president, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its CPAs or at an affiliated enterprise of such accounting firm .................................................................................................... 123 8. Any transfer of equity interests and/or pledge of or change in equity interests (during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report) by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report ................................................... 124 9. Relationship information, if among the 10 largest shareholders any one is a related party, or is the spouse or a relative within the second degree of kinship of another ......................................................................................................... 126 10. The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managerial officers, and any companies controlled either directly or indirectly by the company ......................................................................................................................... 128 IV. Capital Overview................................................................................................................... 129 1. Capital and shares ............................................................................................................. 129 2. Corporate Bonds ............................................................................................................... 136 3. Preferred Shares ................................................................................................................ 136

4. Global Depository Receipts............................................................................................. 136
5. Employee Stock Options.................................................................................................. 136
6. Status of New Shares Issuance in Connection with Mergers and Acquisitions...... 136
7. Financing Plans and Implementation............................................................................ 136
V. Operational Highlights .......................................................................................................... 138
1. Business Activities............................................................................................................ 138
2. Market and Sales Overview............................................................................................ 149
3. The Number, Average Years of Service, Average Age and Educational
Attainment of the Employees of the Company in the Last Two Years and
by the Print Date of the Annual Report..................................................................... 158
4. Environmental Protection Expenditure......................................................................... 158
5. Labor Relations.................................................................................................................. 159
6. Important Contracts.......................................................................................................... 161
VI. Financial Information ........................................................................................................... 162
1. Condensed Balance Sheet and Statement of Comprehensive Income of the
Last Five Years............................................................................................................... 162
2. Five-Year Financial Analysis........................................................................................... 169
3. Audit Committee’s Report for the Most Recent Year.................................................. 177
4. Financial statements for the most recent year.............................................................. 179
Sanitar Co., Ltd. ....................................................................................................................... 195
(1) Right-of-use assets—Buildings .............................................................................. 225
(2) Lease liabilities ........................................................................................................... 225
(VI) Treasury shares ................................................................................................... 232
§DETAIL TABLES OF MAJOR ACCOUNTING ITEMS§ ....................................... 259
Sanitar Co., Ltd. and Its Subsidiaries ............................................................................. 293
(1) First-time application of IFRSs recognized and announced
effectiveness by FSC................................................................................................. 293
(2) Lease liabilities ........................................................................................................... 323
(6) Treasury shares ........................................................................................................... 330
5. Parent company only financial statements audited by CPAs for the most
recent year...................................................................................................................... 362
(6) If the Company and its associates have experienced financial difficulties in
the most recent year and by the print date of the annual report, the impact
on the financial position of the Company shall be specified.................................. 363
VII. Review of Financial Conditions, Financial Performance, and Risk Management . 364
1. Financial Conditions......................................................................................................... 364
2. Financial Performance...................................................................................................... 365

Analysis of Cash flow ....................................................................................................... 366 4. The Impact of Major Capital Expenditures on Financial Operations ........................ 367 5. Investment Policy in the Most Recent Year, Main Causes for Profits or Losses, Improvement Plans and Investment Plans for the Coming Year .......................... 367 6. Analysis and Assessment of Risks.................................................................................. 369 7. Other Important Matters .................................................................................................. 374 VIII. Special Disclosure .............................................................................................................. 375 1. Information of the Associates .......................................................................................... 375 2. Private Placement Securities in the Most Recent Years ............................................... 378 3. Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Year .................................................................................................................... 379 4. Other Necessary Items to Be Supplemented ................................................................. 379 IX. Matters that Have Significant Effect on Shareholders' Equity or the Price of Securities ................................................................................................................................ 380

I. Report to Shareholders

Dear shareholders,

We would like to thank you for attending our annual shareholders' meeting and would like to express our sincere welcome on behalf of Caesar Sanitary Ware. The following is a report of the Company's operating results for the year ended December 31, 2020 and its operating plan for the year ended December 31, 2021.

1. Operating Performance in 2020

(1) Business Plan Implementation Results

For the year ended December 31, 2020, the Company's consolidated operating revenues were NT$2,306,521 thousand, a decrease of 1.22% compared to NT$2,334,926 thousand for the year ended December 31, 2009; consolidated net income was NT$220,056 thousand, an increase of 22.35% compared to NT$179,852 thousand for the year ended December 31, 2009; consolidated earnings per share was NT$3.04. Consolidated operating income remained at the same level as the same period last year. Many retail stores in Vietnam were temporarily closed due to the impact of the epidemic, which affected operating income and gross profit. In Taiwan, Taichung and Kaohsiung sales offices were established to further develop the local market, resulting in an increase in consolidated net income compared to the same period last year.

(2) Budget implementation

The Company did not publicly disclose its financial forecast in 2020.

(3) Financial situation and profitability analysis

Unit: NT$ thousands

Item	Fiscal year	Fiscal year	FY2019	FY2020	Percentage increase (decrease)
Financial situation	Operating revenue		2,334,926	2,306,521	-1.22
	Gross operating profit		701,683	734,168	4.63
	Net operating profit		246,713	289,046	17.16
	Net profit before tax		245,543	289,575	17.93
Profitability	Return on assets (%)		7.73	8.92	15.39
	Return on equity (%)		10.60	12.91	21.79
	Ratio to paid-in capital (%)	Operating profit	33.98	39.81	17.16
		Pretax profit margin	33.82	39.89	17.95

	Profit margin (%)	7.70	9.54	23.90
	Earnings per share (NT$)	2.48	3.04	22.58

(4) Research and development status

Our research and development can be divided into two main areas, one is the improvement of production process and the other is the development of new products.

Production process improvement
(1) The single toilet and medium and large toilets are glazed inside the lead-in pipe to make the inside of the pipe less dirty and to improve the flushing efficiency.
(2) Optimize the glaze of porcelain to improve the surface anti-pollution efficiency and the brightness of porcelain glaze.
(3) Complete automatic embryo feeding system from high pressure production to oil inspection section.
New Product Development
(1) For example, the toilet combines the new generation of intelligent ion sensor technology, ozone sterilization and deodorization technology, Microbubble micro bubble shower to achieve deep skin cleansing and moisturizing effect, and the development of computer toilet and computer toilet cover with advanced functions. In the future, we will work together with Biophysical to develop a series of long-lasting germ-killing and cleaning related products for the development of technological sanitary ware.
(2) In response to the development of the epidemic and the improvement of people's quality of life, we have developed a series of ozone sterilization products (toilet flush and sensor faucet) for public spaces to improve the quality of public hygiene.
(3) The product design is developing towards the concept of serialization and overall bathroom space supporting, and the product items are streamlined, eliminating old styles and moving towards a fashionable and simple style.
(4) In response to the mainstream market trend of bathroom storage and basin cabinet set in the future, our company has developed various new FFC cabinet basins with FFC technology in 2018. After the production of the bath cabinet factory, the modular design has the advantage of lowering the cost and speeding up the development of styles and speed. The development of new products will continue to develop new products that meet the needs of the market through the concepts of color diversification, combination and matching, and space expansion.

Business Plan for 2021
(1) Business objectives
1. We continue to refine our production technology and actively develop new products and innovative designs to enhance product quality and value.
2. To increase customer satisfaction, we combine product advantages, flexible combination solutions and prompt service to become the best choice for consumers.
3. We attach importance to talent training, create a good working environment and development system, and cultivate talents as the cornerstone of sustainable management.
4. We care about environmental protection, use green technology to reduce the consumption of electricity and water resources, improve the product manufacturing process to reduce the impact on the environment, protect the health of consumers, and do our part for the earth.
5. The company operates with integrity and pragmatism, and upholds the business philosophy of "quality first and customer satisfaction", continuously investing in product development and innovation to bring consumers affordable luxury bathing experience, and sharing the business results with shareholders, employees and the public, gradually enhancing corporate value.
(2) Sales forecast and its basis

The Company did not publicly disclose its financial forecast for FY2021.

(3) Important Production and Marketing Policies
1. The bath cabinet factory and the faucet factory have been completed and opened. When the production capacity is gradually put in place, the benefits are expected to ferment and further increase the sales revenue of the porcelain and water categories.
2. By utilizing FFC's technological advantages, we are able to manufacture high-end technology products and increase the price range of our products in order to position ourselves in the high-priced market.
3. We also set up production plans, coordinate with sales policies and sales forecasts, effectively control the quantity and amount of inventory, provide sufficient safe inventory, and eliminate ineffective and stagnant inventory in a timely manner.
4. Through media advertisements and the establishment of physical showrooms, the Company has been able to showcase its achievements in manufacturing technology in recent years and has developed a wide range of high quality basins, custom-made bath cabinets and technological bath products to boost consumers' desire to purchase Caesar bath products and stimulate the growth of sales revenue.
Future development strategy for the Company

The Company has been developing its production, sales and research and development capabilities in a stable and sound manner under the important premise of risk control. Vietnam is a member of the non-tariff organization of the Association of Southeast Asian Nations (ASEAN) and has actively signed economic cooperation agreements with other countries around the world. The ASEAN Free Trade Area has gradually entered into zero tariff since 2014.

We will continue to expand into the Southeast Asian market. Currently, we have local agents in Cambodia, the Philippines and Malaysia to operate our brand business, and we will continue to develop agents in Singapore, Indonesia and Myanmar, and we are planning to expand our OEM business in Europe and the U.S., so that we can develop our brand and OEM business in a dual way to gain a larger market share.

The impact of the external competitive environment, regulatory environment and macroeconomic conditions

Although the VND has been depreciated in recent years due to the influence of the U.S. monetary policy, the international political and economic situation is expected to become more stable in the future, and the VND will slowly appreciate slightly, which is expected to reduce the impact of exchange rate differences. The Vietnamese government has also been actively promoting regional economic integration in recent years, and the overall economic environment has been improving year by year, and the national income has been increasing year by year.

Looking at the overall environment in Taiwan, real estate sales are growing steadily, and the recovery of the construction industry is driving demand for bathroom equipment and the momentum of the repair market.

In recent years, the Company has continued to focus on the development of energy-saving and carbon-reducing green energy products and long-lasting anti-bacterial cleaning technologies, increasing the number of products in the environmental protection and technology categories, and applying innovative technologies in the field of life, in order to increase business revenue and fulfill social responsibility.

In view of the increasingly fierce competition in the bathroom industry, enterprises that fail to keep up with the changes of the times will certainly face elimination. Therefore, the company will always respond to changes in the environment, laws and regulations, and the overall economy by pursuing more rapid response capabilities, strengthening the development of high-value products, improving product quality, reducing competition from inferior products at reduced prices, and deepening customers' trust in the brand image so that Caesar will become a sustainable enterprise, and strive to achieve a sustainable business in 2021.

Finally, we would like to thank our shareholders once again for their support and encouragement to Sanitar Co., Ltd. and send our best wishes.

Best wishes

Good health, all the best

Chairperson HSIAO, CHUN-HSIANG

II. Company Profile 1. Date of Incorporation

Jan. 26, 1988

2. Company History

1988  Established as San Yuh Industrial Co., Ltd., the former company of Sanitar Co., Ltd., with a paid-in capital of NT 1,200 thousand.
1996  Investment in 18.75% of Vietnam Caesar Sanitary Wares Joint Stock Company’s shares, with the main businesses on the production and sales of sanitary equipment.
1997  Establishment and operation commencement of Porcelain Phase I of Vietnam Caesar Sanitary Wares Joint Stock Company.
1999  Establishment of the Ho Chi Minh branch and Hanoi branch of Vietnam Caesar Sanitary Wares Joint Stock Company.
Attainment of ISO-9001 certification.
Cash capital increase of NT$105,000 thousand, amounting paid-in capital to NT$160,000 thousand after the capital increase.
2002  Establishment of Da Nang Branch of Vietnam Caesar Sanitary Wares Joint Stock Company.
2003  Name changed to Sanitar Co., Ltd.  Establishment of the Bathtub Plant of Vietnam Caesar Sanitary Wares Joint Stock Company.
2004  Establishment of Bronze Plant of Vietnam Caesar Sanitary Wares Joint Stock Company.
2007  Transfer of surplus to the capital increase of NT 40,000 thousand amounting paid-in capital to NT$160,000 thousand after the capital increase.
2008  Inauguration of the new office building of Ho Chi Min Head Office.  Inauguration of the new office building of Da Nang Branch Office.
2009  Cash capital increase of NT 300,000 thousand amounting paid-in capital to NT 500,000 thousand after the capital increase.
Investment in 99.99% of Vietnam Caesar Sanitary Wares Joint Stock Company’s shares, with the main businesses on the production and sales of sanitary equipment.
2010  Transfer of surplus to the capital increase of NT 145,000 thousand amounting paid-in capital to NT 645,000 thousand after the capital increase.
2011  The Financial Supervisory Commission of the Executive Yuan approved the first public offering of stocks and the listing on the Taiwan Stock OTC market.
Vietnam Caesar Sanitary Wares Joint Stock Company had a capital increase of about NT 101,219 thousand, amounting paid-in capital to NT 476,419thousand after the capital increase.
2012  Vietnam Caesar Sanitary Wares Joint Stock Company had a capital

increase of about NT 96,721 thousand, amounting paid-in capital to NT 573,140 thousand after the capital increase.

Establishment of the Porcelain Phase II Plant of Vietnam Caesar Sanitary Wares Joint Stock Company, with German energy-saving and environmentally friendly furnaces as the main equipment.
2013  Cash capital increase of NT 81,000 thousand amounting paid-in capital to NT 726,000 thousand after the capital increase.
Stock listed approved by Taiwan Stock Exchange Corporation.
2014  Vietnam Caesar Sanitary Wares Joint Stock Company had a capital increase of about NT 90,090 thousand, amounting paid-in capital to
2018 NT 663,230 thousand after the capital increase.
2019  Inauguration of Zaoqiao Logistics Center.
Expansion of Bronze Plant of Vietnam Caesar Sanitary Wares Joint Stock Company.
Establishment of Wardrobe Plant of Vietnam Caesar Sanitary Wares Joint Stock Company.
Inauguration of the new office building of Hanoi Branch Office.
2020  Investment in 18.20% of shares of Amsalp Biomedical Corporation, with main business on the authorization of sterilization technology for sanitary equipment.
Investment in 51% of shares of Kaisheng Sanitary Ware Co., Ltd., with main business on the sales of various sanitary ware.

III. Corporate Governance Report

1. Organization

(1) Organizational Structure

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Shareholders' Meeting
Monitor
Salary and Compensation
Committee
Board of Directors
Audit Office Nominating Committee
Chairman of the Board
Corporate Social
Responsibility Group
General Manager
Administration Office Research and Sales Management Financial Management
Development Division Office Division
8
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(2) Major Corporate Functions

Department	Main businesses
Auditing Office	1. To help the Board and management to inspect and review the deficiencies of the internal control system and to measure the effectiveness and efficiency of operations. 2. To offer suggestions regarding the improvement of the internal control system so that the system can be implemented effectively. 3. To conduct annual audit plans, internal control self-assessment, andproject auditing.
Research & Development Department	1. To have a comprehensive understanding of the applications of new technologies and to assist with the updates of process technology and product optimization. 2. To collect and analyze market and product tendencies and to plan and develop related new products according to the company's brand positioning. 3. To coordinate product design, management, and development. 4. To execute and maintain various patents, certifications, labels, etc. 5. To develop and assess the new suppliers, and to assist in finding products with advantageouspricing.
Business Management Department	1. To formulate and execute the annual business goals and policies for the domestic and foreign markets. 2. To develop domestic and foreign markets and promote business. 3. To formulate product sets, product profit rate, and sales pricing. 4.To build brand reputation, formulate advertisement plans, and prepare marketing copywriting and catalogs for the domestic and foreign markets.To establish online business strategies and set the overall planning for the e-commerce cash flow, logistics, and after-sales service.
Financial Management Department	1. Budget preparation and management. 2. Accounting affairs, as well as the preparation and analysis of the consolidated financial statements. 3. Financial management, capital planning and control, and foreign exchange operation management. 4. Tax affairs and operations. 5. Stocks, corporate governance, announcement, declaration, and major information release. 6. Relationship maintenance between the Company spokespersons and investors. 7. Information security planning and execution, information system writing and maintenance, and computer software/hardware purchase and maintenance.

Administrative Management Department	1. Product quality evaluation, as well as enhancement, suggestion, and tracking of deficiencies. 2. Control and management of the procurement, sales, delivery, etc., and inventory record management. 3. Product maintenance services, maintenance data collection, and data statistical analysis. 4. Personnel andgeneral affairs.

2. Directors, Supervisors, President, Vice President, Assistant Managers and Heads of Departments and Branch Organizations

(1) Directors and Supervisors 1. Information of Directors and Supervisors

																	March 29,2021	March 29,2021	March 29,2021	March 29,2021
Title	Nati onali ty/ Cou ntry of Orig in	Name	Sex	Date Elected	Ter m	Date First Elected	Shareholding when Elected		Current Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience (Education)	Other Positions	Executives, Directors or Supervisors who are spouses or within two degrees of kinship			Note
							Shares	%	Shares	%	Shares	%	Shares	%			Title	Name	Relat ion
Chairper son	ROC	HSIAO, CHUN- HSIANG	Male	107.06.13	3 year s	78.06.05	5,013,581 (Note 1)	6.91	5,013,581	6.91	1,010,069	1.39	0	0	Bachelor of International Business, Tunghai University	Chairman of the Board, legal representative of Vietnam Caesar Sanitary Wares Joint Stock Company. Chairman of the Board, legal representative of Kaisheng Sanitary Ware Co., Ltd. Director, legal representative of Amsalp Biomedical Corporation Representative Director of the Board of Slide Mei Yao International Co., Ltd.	Director	TSAI, MING-H SI	wife' s youn ger brot her	No
Director	ROC	CHANG , YUNG- NAN	Male	107.06.13	3 year s	88.06.30	2,881,975	3.97	2,881,975	3.97	174,491	0.24	0	0	Owner of Zhan-xin Ceramic Co., Ltd.	None	No	No	No	No

Director	ROC	TSAI, MING-H SI	Male	107.06.13	3 year s	104.06.17	1,336,195	1.84	1,573,195	2.17	495,067	0.68	Master of Applied Statistics, Fu Jen Catholic University	None	Chairper son	HSIAO, CHUN- HSIANG	elder siste r's husb and	No
Director	ROC	YU, CHIH-H SIN	Male	107.06.13	3 year s	101.06.20	41,000	0.06	25,000	0.03	0	0	Banking and Insurance Division, Takming Business School	Chairman of the Board of Yu’s Electric Co., Ltd.	No	No	No	No
Indepen dent Director	ROC	CHEN, SHIH-H SIUNG	Male	107.06.13	3 year s	101.06.20	0	0	0	0	0	0	Master of Accounting, Shanghai University of Finance and Economics Department of Electrical Engineering, Provincial Taipei Institute of Technology	Associate Accountant of Quancheng Accounting & Associates	No	No	No	No
Indepen dent Director	ROC	HSU, FENG-Y UAN	Male	107.06.13	3 year s	101.06.20	0	0	0	0	0	0	Bachelor of Law, National Taiwan University	Director of Fa-yu Law Firm	No	No	No	No
Supervis or	ROC	LI, WEN-Y AO	Male	107.06.13	3 year s	90.06.30	193,302	0.27	193,302	0.27	135,745	0.19	Business Administration Division of Tamsui Institute of Business Administration	Owner of Wen-yao Land Administration Agency	No	No	No	No
Supervis or	ROC	LIN, KUO-H UA	Male	107.06.13	3 year s	96.06.30	2,572,574	3.54	2,572,574	3.54	685,409	0.94	Ph. D. of Law, East China University of Political Science and Law Master of Science, Chinese Culture University	General Manager of Shanghai Archie Industrial Co., Ltd.	No	No	No	No
Supervis or	ROC	LIANG, HSIN-Y UNG	Male	107.06.13	3 year s	92.06.30	1,504,159	2.07	1,504,159	2.07	0	0	Civil Engineering Division of Nanya Institute of Technology	None	No	No	No	No

Note 1: 2,000,000 shares of "HSIAO, CHUN-HSIANG Trust Property Account", a delivery trust with reserved application rights. Note 2: As of the printing date of the annual report, none of the above-mentioned persons have been terminated.

March 29, 2020

The major shareholders of corporate shareholders

Not applicable.

The major shareholders of the corporate shareholders of which the major shareholders are corporations Not applicable.
Professional qualifications and independence analysis of directors and supervisors

Criteria Name	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience	Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience				Independence	Independence	Independence	Criteria (Note)	Criteria (Note)	Criteria (Note)	Criteria (Note)			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
HSIAO, CHUN-H SIANG			✓	✓				✓	✓	✓	✓	✓		✓	✓	0
CHANG, YUNG-N AN			✓				✓	✓	✓	✓	✓	✓	✓	✓	✓	0
TSAI, MING-HS I			✓	✓				✓	✓	✓	✓	✓		✓	✓	0
YU, CHIH-HSI N			✓	✓		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	0
CHEN, SHIH-HSI UNG		✓	✓	✓		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	0
HSU, FENG-YU AN		✓	✓	✓		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	0
LI, WEN-YA O			✓	✓		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	0
LIN, KUO-HU A			✓	✓			✓	✓	✓	✓	✓	✓	✓	✓	✓	0

LIANG, HSIN-YU NG			✓	✓			✓	✓	✓	✓	✓	✓	✓	✓	✓	0

Note: Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office. （ 1 ） Not an employee of the Company or any of its affiliates.
（ 2 ） Not a director or supervisor of the Company or any of its affiliates (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director) Not a director or supervisor of the Company or any of its affiliates (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these companies mentioned above in accordance with the Act or local laws and regulations).
（ 3 ） Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
（ 4 ） Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three subparagraphs.
（ 5 ） Not a director, supervisor, or employee of a corporate shareholder who directly holds 5% or more of the total number of outstanding shares of the Company, or who holds shares ranking in the top five holdings, or who appoints a representative to be outstanding shares of the Company, or who holds shares ranking in the top five holdings, or who appoints a representative to be the director or supervisor of the Company in accordance with Paragraph 1 or 2, Article 27 of the Company Act (not applicable in cases where the person is an independent director) cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these companies mentioned above in accordance with the Act or local laws and regulations). regulations).
(6) A majority of the Company's director seats or voting shares are not controlled by the same person: a director, supervisor, or employee of any other company (not applicable in cases where the person is an independent director of the Company, its parent employee of any other company (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these companies mentioned) (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these companies mentioned above) in accordance with the Act or local laws and regulations).
(7) The chairperson, president, or person holding an equivalent position of the Company are not the same person or spouses: a director (or governor), supervisor, or employee of any other company or institution (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these companies mentioned above in accordance with the Act or local laws and regulations).
(8) Not a director, supervisor, managerial officer, or shareholder holding 5% or more of the shares, of a specified company or institution that has a financial or business relationship with the Company (this limit does not apply to where a specified company or institution holds 20% or more but not more than 50% of the total number of issued shares of or institution holds 20% or more but not more than 50% of the total number of issued shares of the Company nor 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, the Company and its parent or subsidiary or a subsidiary of the same parent.)
(9) Not a professional individual who, or an owner, partner, director, supervisor, or managerial 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 provider in the past 2 years has received cumulative compensation not more than NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition for merger/consolidation and acquisition, who exercises powers pursuant to the Securities and Exchange Act or to the Business Mergers and Acquisitions Act or related laws or regulations.

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

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

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

(2) President, Vice President, Senior Manager, Heads of Departments

March 29, 2021

													March 29,	March 29,	March 29,	202
Title	Nationa lity/ Countr y of Origin	Name	Sex	Date Elected	Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience (Education)	Other Positions	Managers who are Spouses or Within Two Degrees of Kinship			Not e
					Shares	%	Shares	%	Shares	%			Title	Na me	Rela tion
President	ROC	CHEN, WEI-CHI H	Mal e	105.01.01	866,489	1.19	314,000	0.43	0	0	Deputy General Manager of Vietnam Caesar Sanitary Wares Joint Stock Company (subsidiary). Bachelor of Physics, Tamkang University	General Manager of Vietnam Caesar Sanitary Wares Joint Stock Company (subsidiary). Director, legal representative of Kaisheng Sanitary Ware Co., Ltd. Director of Bodok Trading Co., Ltd.	No	No	No	No
Vice President	ROC	YEN, WEN-HU NG	Mal e	96.01.01	345,000	0.48	114,419	0.16	0	0	Manager of Material Department of Sanitar Co., Ltd. High school	None	No	No	No	No
COO	ROC	KU, FENG-K UEI	Mal e	97.03.10	115,892	0.16	0	0	0	0	Associate Manager of STG Bachelor of Chinese Language, Fu Jen Catholic University	None	No	No	No	No
CFO and Senior Corporate Governance Officer	ROC	CHEN, YU-CHU AN	Fem ale	104.03.18 108.11.08	143,222	0.20	0	0	0	0	Manager of Finance Department of Sanitar Co., Ltd. Master of Advanced Management Graduate Schol,National	None	No	No	No	No

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

Chengchi University
Certified accountant in
Taiwan
Audit
Audit Supervisor of
supervisor of
AC&C International
Vietnam Caesar
Chief internal CHEN, Co., Ltd.
auditor ROC CHIEN- Mal 2020.12.2 0 0 0 0 0 0 Investment Associate Sanitary Wares No No No No
(Note 1) HSUN e 4 Manager of AC&C Joint Stock
Company
International Co., Ltd.
(subsidiary).
Audit Manager of
Louisa Professional
Coffee Ltd.
----- End of picture text -----

Note 1: Passed by the Board in the board meeting held on Dec. 24, 2020. 3.

3. Remuneration of Directors, Supervisors, President, and Vice President in the Most Recent Fiscal Year

(1) Remuneration of Directors and Independent Directors

Unit: NT$ thousands

Title	Name	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Remuneration of Directors	Ratio of Total Remuneration (A+B+C+D) to Net Income (%)	Ratio of Total Remuneration (A+B+C+D) to Net Income (%)	Relevant Remuneration Received by Directors Who are Al Employees	Relevant Remuneration Received by Directors Who are Al Employees	Relevant Remuneration Received by Directors Who are Al Employees	Relevant Remuneration Received by Directors Who are Al Employees	Relevant Remuneration Received by Directors Who are Al Employees	Relevant Remuneration Received by Directors Who are Al Employees	Relevant Remuneration Received by Directors Who are Al Employees	Relevant Remuneration Received by Directors Who are Al Employees	s Ratio of Total Compensation (A+B+C+D+E+ F+G) To Net Income (%)	s Ratio of Total Compensation (A+B+C+D+E+ F+G) To Net Income (%)	Co mp ens atio n Pai d to Dire ctor s fro m an Inv este d Co mp any Oth er tha n the Co mp any' s Sub sidi ary
		Base Compensation (A)		Severance Pay (B)		Bonus to Directors (C)		Allowances (D)				Salary, Bonuses, and Allowances (E)		Severance Pay (F) (Note)		Employee Bonus(G)
		The company	All companies in the consolidated financial statements	The company	All companies in the consolidate d financial statements	The company	All companies in the consolidate d financial statements	The company	All companies in the consolidate d financial statements	The company	All companies in the consolidate d financial statements	The company	All companies in the consolidate d financial statements	The company	All companies in the consolidate d financial statements	The Company		Companies in the consolidated financial statements		The Comp any	All compa nies in the consoli dated financi al statem ents
																Cash	Stock	Cash	Stock
Chairpers on	HSIAO, CHUN-HSI ANG	3,361	4,024	0	0	1,167	1,167	70	70	2.09	2.39	0	0	0	0	0	0	0	0	2.09	2.39	No
Director	CHANG, YUNG-NA N	240	240	0	0	583	583	60	60	0.40	0.40	0	0	0	0	0	0	0	0	0.40	0.40	No

Director	TSAI, MING-HSI	240	240	0	0	583	583	70	70	0.41	0.41	0	0	0	0	0	0	0	0	0.41	0.41	No
Director	YU, CHIH-HSIN	240	240	0	0	583	583	70	70	0.41	0.41	0	0	0	0	0	0	0	0	0.41	0.41	No
Independ ent Director	CHEN, SHIH-HSIU NG	240	240	0	0	583	583	90	90	0.41	0.41	0	0	0	0	0	0	0	0	0.41	0.41	No
Independ ent Director	HSU, FENG-YUA N	240	240	0	0	583	583	90	90	0.41	0.41	0	0	0	0	0	0	0	0	0.41	0.41	No
Please describe the policy, system, criteria and structure for the remuneration of independent directors, and the relevance to the amount of remuneration based on the responsibilities, risks and time commitment: please refer to pages 10~16 of this annual report. 2. In addition to the above table, the remuneration received by the directors of the Company for services rendered to all companies in the financial statements (such as servingas consultants to non-employees)in the most recentyear: 0

Note: This is the amount provided for retirement pension expense.

(2) Remuneration of Supervisors

Unit: NT$ thousands

(2) R	emunerati	on of Supervisors	on of Supervisors	on of Supervisors	on of Supervisors					Unit: NT$thousands
Title	Name	Remuneration of Supervisor						Ratio of Total Remuneration (A+B+C) to Net Income (%)		Compensation Paid to Directors from an Invested Company Other than the Company's Subsidiary
		Salary (A)		Bonus (B)		Income from Professional Practice(C)
		The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements
Supervisor	LI, WEN-YAO	240	240	583	583	70	70	0.41	0.41	No
Supervisor	LIN, KUO-HUA	240	240	583	583	70	70	0.41	0.41	No
Supervisor	LIANG, HSIN-YUNG	240	240	583	583	70	70	0.41	0.41	No

(3) Remuneration of the President and Vice President

Unit: NT$ thousands

Title	Name	Salary (A)	Salary (A)	Severance Pay (B)	Severance Pay (B)	Bonuses and Allowances (C)	Bonuses and Allowances (C)	Employee Bonus (D)	Employee Bonus (D)	Employee Bonus (D)	Employee Bonus (D)	Ratio of Total Compensation (A+B+C+D) To Net Income(%)	Ratio of Total Compensation (A+B+C+D) To Net Income(%)	Compensation Paid to Directors from an Invested Company Other than the Company's Subsidiary
		The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The company	All companies in the consolidated financial statements	The co	mpany	All companies in the consolidated financial statements		The company	All companies in the consolidated financial statements
								Cash	Stock	Cash	Stock
President	CHEN, WEI-CHIH	1,909	2,644	108	108	1,511	1,572	385	0	385	0	1.78	2.14	No
Vice President	YEN, WEN-HUNG	1,650	1,650	108	108	535	535	274	0	274	0	1.17	1.17	No
COO	KU, FENG-KUEI	1,590	1,590	95	95	582	582	285	0	285	0	1.16	1.16	No
CFO	CHEN, YU-CHUAN	1,398	1,398	97	97	505	505	281	0	281	0	1.04	1.04	No

Note: This is the amount provided for retirement pension expense.

(4) Name of the Managers Who Distribute the Employee Bonus and the Situation of Distribution

Unit: NT$ thousands; March 9, 2021

	Title	Name	In Stock	In Cash	Total	Ratio of Total Amount to Net Income(%)
Manager	President	CHEN, WEI-CHIH	0	1,225	1,225	0.56
	Vice President	YEN, WEN-HUNG
	COO	KU, FENG-KUEI
	CFO	CHEN, YU-CHUAN

Note: The scope of application of the Manager, as stipulated by the Securities and Futures Commission, Ministry of Finance, Taiwan, March 27, 2003, letter order No. 0920001301, is as follows.

  - (1) General Manager and equivalent

  - (2) Vice President and equivalent

  - (3) Associate and equivalent

  - (4) Head of Finance Department

  - (5) Accounting department head

  - (6) Other persons who have the right to manage and sign for the company

(5) This is the analysis of the ratio of total remuneration paid by the Company and by all companies included in the consolidated financial statements for the two most recent fiscal years to directors, supervisors, president and vice presidents of the Company The relationship among of the policy, The relationship among of the policy, standard and combination for remuneration payment, remuneration determining process, operating performance and future risk is The relationship among of the policy, standard and combination for remuneration payment, remuneration determining process, operating performance and future risk is explained.
The ratio of total remuneration for the two most recent fiscal years to directors, supervisors, president and vice presidents of the Company to the net income after tax on the parent company only or individual financial statements

Fiscal year	2019	2019	2020	2020
	The ratio of total remunerationpaid by	The ratio of total remunerationpaid by	The ratio of total remunerationpaid by	The ratio of total remunerationpaid by

Title	the Company to the net income after tax on the parent company only or individual financial statements (%)	all companies included in the consolidated financial statements to the net income after The ratio of total remuneration by all companies included in the consolidated financial statements to the net income after tax on the parent company only or individual financial statements (%)	the Company to the net income after tax on the parent company only or individual financial statements (%)	all companies included in the consolidated financial statements to the net income after The ratio of total remuneration by all companies included in the consolidated financial statements to the net income after tax on the parent company only or individual financial statements (%)
Director	4.51	4.89	4.13	4.43
Supervisor	1.32	1.32	1.22	1.22
President and Vice President	4.62	5.09	5.14	5.50

The policies, standards, and portfolios for the payment of remuneration (1) Directors' and supervisors' remuneration

The Company may pay remuneration to the directors and supervisors for the performance of their duties, regardless of operating profit or loss, in accordance with the Company's Articles of Incorporation, which authorize the Board of Directors to determine the value of their participation in and contribution to the Company's operations, taking into account the market rate in the industry. In addition, if the Company has a pre-tax profit for the year, the remuneration shall be distributed in accordance with the Company's Articles of Incorporation. The remuneration package for directors and supervisors consists of salary, remuneration to directors and supervisors and attendance fees.

(2) Remuneration for General Manager and Deputy General Manager

The President and Vice President shall be appointed and compensated in accordance with the Company's Articles of Incorporation and the Board of Directors' resolution. The compensation standards for managers are based on their individual performance, contribution to work, annual operating results, hard work, and compliance with company policies, as well as on market standards in the industry. The manager's compensation package consists of salary, bonus and employee compensation.

Procedures for fixing remuneration

The remuneration policies and systems of the Company's directors and supervisors are evaluated by the Company's Nomination Committee and Remuneration Committee in accordance with the Company's "Performance Evaluation Method", and recommendations are made to the Board of Directors for approval by the Board of Directors. The Company's Nomination Committee and Compensation Committee also regularly review the performance and compensation of directors and supervisors.

Correlation with operating performance and future risks

The remuneration of the Company's directors, supervisors and managers shall be determined with reference to market standards in the industry, taking into account individual performance, contribution to work and the Company's operating results, and therefore the Company's operating results and changes in market conditions are related to remuneration. The content and amount of compensation for directors, supervisors and managers will not deviate from financial performance and will not induce directors and managers to engage in behavior that exceeds the Company's risk appetite in pursuit of compensation.

The correlation between performance evaluation results and compensation for directors, supervisors and managers is as follows.

(1) Performance Evaluation Method

Target	Criteria	Description
Directors and Supervisors	1. The Company has established the "Board of Directors' Performance Evaluation Method", and individual directors and supervisors will complete self-assessment questionnaires for internal evaluation after the end of the year	The self-assessment self-evaluation questionnaire covers the following six major aspects, with a total of 23 indicators. A. Mastery of the company's objectives and tasks B. Awareness of Directors' Duties C. Degree of participation in the company's operations D. Internal Relationship Management and Communication E. Professional and Continuing Education of Directors F. Internal control
	2. The Company has established a Nominating Committee, which shall be evaluated in accordance with the "Nominating Committee Organizational Procedures".	After the year-end, the Nomination Committee will evaluate the performance of each director and supervisor and report to the Board of Directors in accordance with the "Nomination Committee Organizational Procedures".
Managers	1. Annual operating results of the Company	The year-end bonus is determined by the president with reference to the annual operatingresults of the company.
	2. Personal annual performance	The manager's performance will be evaluated by the manager's supervisor in accordance with the annual work performance, and the evaluation items are as follows. A. Mastery of the company's objectives and tasks B. Leadership C. Judgment D. Manager'sprofessional and continuingeducation

(2) Performance Evaluation Results

A. Directors and Supervisors (Level 1 to 5, 5 being the best)

Title	Name	A. Mastery of the company's objectives and tasks	B. Awareness of Directors' Duties	C. Degree of participation in the company's operations	D. Internal Relationship Management and Communication	E. Professional and Continuing Education of Directors	F. Internal control
Chairperson	HSIAO, CHUN-HSIANG	5	5	5	5	5	5
Director	CHANG, YUNG-NAN	5	4	5	5	5	5
Director	TSAI, MING-HSI	5	5	5	4	5	5
Director	YU, CHIH-HSIN	5	5	4	5	5	5
Independent Director	CHEN, SHIH-HSIUNG	5	5	5	4	5	5
Independent Director	HSU, FENG-YUAN	5	5	5	5	5	4
Supervisor	LI, WEN-YAO	5	4	5	5	5	5

Supervisor	LIN, KUO-HUA	5	5	5	4	5	5
Supervisor	LIANG, HSIN-YUNG	5	4	5	5	5	5

B. Manager (Level 1 to 5, 5 being the best)

Title	Name	A. Mastery of the company's objectives and tasks	B. Leadership	C. Judgment	D. Manager's professional and continuing education
President	CHEN, WEI-CHIH	5	5	5	5
Vice President	YEN, WEN-HUNG	5	5	4	4
COO	KU, FENG-KUEI	5	5	4	5
CFO	CHEN, YU-CHUAN	5	5	4	5

(3) Relevance and reasonableness of performance evaluation results and salary and compensation
A. Directors and Supervisors
a. Compensation: The compensation is based on the degree of participation and value of contribution to the Company's operations and the market rate in the industry. Based on the results of the performance evaluation, the directors and supervisors of the Company have performed their relevant functions and their compensation is reasonable.
b. Compensation: In accordance with the Company's Articles of Incorporation, if the Company has a pre-tax net profit for the year, no more than 2% shall be set aside as remuneration to directors and supervisors. 2 percent of the remuneration to directors and supervisors for 2020 is NT$5,833,000, and the remuneration to individual directors and supervisors shall be allocated in proportion to their individual income bases, with one base for each of outstanding performance and special contribution to the Company's business. Except for the Chairman of the Board of Directors who makes special contributions to the Company's business due to his management position, who is allocated two bases, the other directors and supervisors are allocated one base each.
The average attendance rate of the Board of Directors (excluding supervisors) for 2020 was 97.62%, and the average attendance rate of supervisors on the Board of Directors for 2020 was 100%.

B. Manager

a. Salary: The salary is determined based on the length of service, contribution and hard work, and with reference to the market standard in the industry. All of our managers have management, business, and financial experience, and have a certain level of performance in each of the performance indicators, so their salaries are reasonable.
b. Bonuses: mainly year-end bonuses and operating bonuses. The President is entitled to an operating bonus based on 0.5% of the annual consolidated net income before tax; managers other than the President are entitled to a year-end bonus based on monthly salary, payment base and performance evaluation base. The operating performance of the Company and the performance of individuals are related to the bonus for managers.
(c) Employee compensation: According to the Company's Articles of

Incorporation, 2% to 5% of the Company's annual net income before tax should be set aside as employee compensation, and the amount of individual manager's compensation will be granted according to the annual performance. 3% of employee compensation amounting to NT$8,749 thousand was set aside in 2020. The remuneration to managers was 0.56% and 0.59% of net income after tax for 2020 and 2019, respectively, which is still within a reasonable range.

4. Implementation of Corporate Governance

(1) Board of Directors

A total of 7 (A) meetings of the Board of Directors were held in FY2020. The attendance of directors and su ervisors was as follows: p

Title	Name	Attendance in Person(B)	By Proxy	Attendance Rate(%) [B/A]	Attendance Rate(%) [B/A]	Remarks
Chairperson	HSIAO, CHUN-HSI ANG	7	0	100		No
Director	CHANG, YUNG-NA N	6	0	85.71		No
Director	TSAI, MING-HSI	7	0	100		No
Director	YU, CHIH-HSIN	7	0	100		No
Independent Director	CHEN, SHIH-HSIU NG	7	0	100		No
Independent Director	HSU, FENG-YUA N	7	0	100		No
Supervisor	LI, WEN-YAO	7	0	100		No
Supervisor	LIN, KUO-HUA	7	0	100		No
Supervisor	LIANG, HSIN-YUN G	7	0	100		No
Other mentionable items: 1. If there are circumstances referred to in Article 14-3 of the Securities and Exchange Act and resolutions of the directors ' meetings objected to by independent directors or subject to qualified opinion and recorded or declared in writing, If there are circumstances referred to in Article 14-3 of the Securities and Exchange Act and resolutions of the directors ' meetings objected to by independent directors or subject to qualified opinion and recorded or declared in writing, the dates of the meetings, sessions, contents of motion, all independent directors' opinions and the company's response should be specified. Board of Directors Motions and follow-ups Item listed in Article 14-3 Objections orqualified
Board of Directors	Motions and follow-ups				Item listed in Article 14-3	Objections orqualified

		of Securities Exchange Act
The thirteenth meeting of the 14th Board of Directors on 2020.02.27	1. Revision of the provisions of the “Articles of Association”.	V
	2. Revision of the provisions of the " Shareholders' Meetings Regulations".	V
	3. Revision of the provisions of “Ethical Operating Procedures and Conduct Guideline”.	V
	4. 2019 Remuneration distribution for the employees, the directors, and the supervisors.	V
	5. 2019 Business report and financial report	V
	6. 2019 Surplus distribution	V
	7. Formulation of “Internal Control System Announcement”.	V
	8. Assessment of the independence and competence of the public certified accountants.	V
	9. Review of the directors and supervisors’ 2019 continuing education status and 2020 continuingeducationplans.	V
	10. Convention of 2020 shareholders’ general meeting.	V
	Opinions of independent directors: None
	The Company’s response towards the opinions of the independent directors: None
	Resolution: As consulted by the Chairman, all proposals were approved by the directorspresent without objection.
The fourteenth meeting of the 14th Board of Directors on 2020.03.27	1. Revision of the provisions of the “Articles of Association”.	V
	2. Formulation of implementation of the first repurchase of the Company’s shares.	V
	3. Convention of 2020 shareholders’ general meeting.	V
	4. Kaohsiung business location housing lease.	V
	Opinions of independent directors: None
	The Company’s response towards the opinions of the independent directors: None
	Resolution: As consulted by the Chairman, all proposals were approved by the directorspresent without objection.
The fifteenth meeting of the 14th Board of Directors on 2020.05.06	1.Revision of the provisions of “Measures for the Transfer of the First-time Repurchase of the Shares to Employees”.	V
	2.Revision of the provisions of the “Guideline of Corporate Governance Practices”.	V
	3.Revision of theprovisions of “Regulations	V

	of Corporate Social Responsibility Practices”.
	4.Liability Insurance for the Directors, Supervisors,and KeyEmployees.	V
	5.Financial institutions’ credit limit.	V
	6.Endorsement guarantee for Vietnam Caesar Sanitary Wares Joint Stock Company (subsidiary).	V
	7.Revision of the Company’s internal control system and internal audit practice rules.	V
	Opinions of independent directors: None
	The Company’s response towards the opinions of the independent directors: None
	Resolution: As consulted by the Chairman, all proposals were approved by the directorspresent without objection.
The sixteenth meeting of the 14th Board of Directors on	1. Establishment of the cash dividend distribution base date and cash dividend payment date for theyear 2020.	V
	2. Revision of the 2019 remuneration payment of the directors and supervisors.	V
	3. Revision of the 2019 remuneration payment for the employees.	V
	4. Revision of the 2019 operating bonus payment.	V
	5. Revision of CFO’s salaryadjustment.	V
	Opinions of independent directors: None
	The Company’s response towards the opinions of the independent directors: None
2020.06.09	Resolution: Motion 2 & 4: Except for the directors and supervisors whose personal
	interests are involved in the motion who withdrew during the discussion and resolution, the other directors present at the meeting approved the proposals without objection after being consulted by the Chairman. The rest of the proposals, after being consulted by the Chairman, were approved byall directorspresent.
The seventeenth meeting of the 14th Board of Directors on 2020.08.05	1.Revision of the provisions of “Board MeetingRegulations”.	V
	2.Revision of the provisions of “Ethical Conducts and Behaviors Guideline for the Directors,Supervisors,and Managers”.	V
	Revision of the provisions of “Measures for the Transfer of the First-time Repurchase of the Shares to Employees”.	V
	4.Endorsement guarantee for Vietnam Caesar Sanitary Wares Joint Stock Company (subsidiary).	V
	5.Kaohsiungexhibition center construction	V

	and decoration.
	6.Recruitment of a manager for Product R&D Center.	V
	7.Financial institutions’ credit limit.	V
	Opinions of independent directors: None
	The Company’s response towards the opinions of the independent directors: None
	Resolution: As consulted by the Chairman, all proposals were approved by
	the directorspresent without objection.
The eighteenth meeting of the 14th Board of Directors on 2020.11.04	1.Revision of the provisions of the " Shareholders' Meetings Regulations".	V
	2.Revision of the provisions of “Director and Supervisor Election Guideline”.	V
	3.Revision of the provisions of “Regulations for the Scope of Duties of Independent Directors”.	V
	4.Establishment of “Risk Management Policyand Procedures”.	V
	Investment in a newly established subsidiaryin Taoyuan.	V
	6. Organizational structure adjustment.	V
	Opinions of independent directors: None
	The Company’s response towards the opinions of the independent directors: None
	Resolution: As consulted by the Chairman, all proposals were approved by the directorspresent without objection.
The nineteenth meeting of the 14th Board of Directors on 2020.12.24	1.Revision of the provisions of the “Articles of Association”.	V
	2. Revision of the provisions of “Procedures for Asset Acquisition and Processing”.	V
	3.Revision of the provisions of “Procedures for LoaningFunds to Third Party”.	V
	4. Revision of the provisions of “Operating Procedures for Endorsement Guarantee”.	V
	Revision of the provisions of “Board Performance Assessment Rules”.	V
	Revision of the provisions of “Manager’s Remuneration Rules”.	V
	Land and real-estate asset sales in Toufen City,Miaoli County.	V
	Removal of the non-competition clause for managers.	V
	Cash increase for Kaisheng Sanitary Ware Co.,Ltd.(subsidiary).	V
	Change of internal audit supervisor.	V
	11.Review of the Company’s directors’ and supervisors’ performance in 2020 and their performance goals and remuneration in 2021.	V
	12.`審`Review of the Company’s managers’	V

	performance in 2020 and their performance goals and remuneration in 2021.	performance in 2020 and their performance goals and remuneration in 2021.	performance in 2020 and their performance goals and remuneration in 2021.
	13. Review of the 2020 year-end bonus distribution.			V
	14.Financial institutions’ credit limit.			V
	15. Formulation of the Company’s 2021 annual operationplan and budgeting.			V
	16.Formulation of the Company’s 2021 auditplans.			V
	17.Special bonus distribution.			V
	Opinions of independent directors: None
	The Company’s response towards the opinions of the independent directors: None
	Resolution Motion 11: Except for the directors and supervisors whose personal interests are involved in the motion who withdrew during the discussion and resolution, the other directors present at the meeting approved the proposals without objection after being consulted by the Chairman. The rest of the proposals, after being consulted by the Chairman, were approved byall directorspresent.

Name of Director		Contents of Motion	Causes for Avoidance of Conflict of Interest		Situation of Voting
HSIAO, CHUN-HSIANG , CHANG, YUNG-NAN, TSAI, MING-HSI, YU, CHIH-HSIN, CHEN, SHIH-HSIUNG, HSU, FENG-YUAN		Review of the remuneration plan for directors and supervisors in 2019	The content of the motion concerns the individual directors listed on the left		The directors listed on the left are individually recused from the discussion and resolution, and the remaining directors present will vote on the resolution.

HSIAO, CHUN-HSIANG	HSIAO, CHUN-HSIANG	Review of the Management Bonus Plan for 2019	Review of the Management Bonus Plan for 2019	The content of the motion concerns the individual directors listed on the left	The content of the motion concerns the individual directors listed on the left	The directors listed on the left are individually recused from the discussion and resolution, and the remaining directors present will vote on the resolution.
HSIAO, CHUN-HSIANG , CHANG, YUNG-NAN, TSAI, MING-HSI, YU, CHIH-HSIN, CHEN, SHIH-HSIUNG, HSU, FENG-YUAN		Reviewed the performance of directors and supervisors in 2009 and the performance targets and remuneration for 2020		The content of the motion concerns the individual directors listed on the left		The directors listed on the left are individually recused from the discussion and resolution, and the remaining directors present will vote on the resolution.
Assessm ent cycle	Assessment period		Assessment scope	Assessment method	Assessment content
Once every year	From 2020.01.01 to 2020.12.31		1.Assessment of Board performance. 2.Director individual performance assessment. 3.Functional committee (Salary and Remuneratio n Committee and Nomination Committee) performance assessment.	1.Board internal self-assessme nt. 2.Director’s self-assessme nt.	1. Board performance assessment” `（`1`）` The degree of participation in the Company’s operations. `（`2`）` The quality of the Board’s decision making. `（`3`）` The composition and structure of the Board. `（`4`）` The election and continuing education of the directors. `（`5`）` Internal control. 2.Director’s performance assessment: `（`1`）` Mastering of the Company’s goals and missions. `（`2`）` Acknowledgement of the director’s duties. `（`3`）` The degree of

participation in the Company’s operations. （ 4 ） Operation and communication in internal relationships. （ 5 ） Director’s professionalism and continuing education. （ 6 ） Internal control 1. Functional committees (Remuneration and Salary Committee and Nomination Committee)’ performance assessment: （ 1 ） The degree of participation in the Company’s operations. （ 2 ） Acknowledgement of the duties of the functional committees. （ 3 ） The quality of decision-making of the functional committees. （ 4 ） The constitution of the functional committees and the election of the members. （ 5 ） Internal control.

Targets of enhanced functions of board of directors of the year and in the most recent year (e.g. establishing an audit committee, enhancing information transparency, etc.) and evaluation of implementation

Targets of enhanced functions of board of directors of the year and i n the most recent year (e.g. establishing an audit committee, The Board of Directors has been working on the establishment of an audit committee, enhancing information transparency, etc.) and progress assessment:

(1) The Company's board of directors' meeting regulations are established in accordance with the "Rules Governing the Meetings of the Board of Directors of Public Companies", approved by the board of directors and presented to the shareholders' meeting. The board of directors operates in accordance with the "Rules Governing the Meetings of the Board of Directors" to implement corporate governance, improve supervisory functions and strengthen management functions.
(2) All important resolutions of the Board of Directors are announced and reported on the Market Observation Post System in accordance with the law, and are simultaneously disclosed on the Investor Zone of the Company's website to provide investors with relevant information through the Internet in order to protect shareholders' rights and interests. The disclosure of financial and corporate governance information is an important responsibility of the Company, and the Company faithfully fulfills its

obligations in accordance with the regulations of the stock exchange and relevant laws and regulations. (3) The Company regularly arranges continuing education programs for its directors and supervisors each year in order to continuously enrich their knowledge and maintain their core values and professional strengths and capabilities. (4) The Company's Board of Directors approved the "Standard Operating Procedures for Handling Directors' Requests" on March 21, 2019 to help directors make informed decisions and perform their duties as directors and to enhance the effectiveness of the Board of Directors. (5) The Company's Board of Directors approved the purchase of liability insurance for the Company's directors, supervisors and key employees on May 6, 2020, to reduce and diversify the risk of material damage to the Company and its shareholders that may result from errors or negligent acts, and the insurance coverage was completed on June 1, 2020, in accordance with the law. (6) On November 8, 2019, the Board of Directors approved the "Board of Directors' Performance Evaluation Plan" to implement corporate governance and enhance the functions of the Board of Directors and functional committees (Salary and Compensation Committee and Nominating Committee) to establish performance targets to enhance the efficiency of the Board of Directors' operations. The report of the Board of Directors was submitted on March 9, 2021 and was disclosed in the Investor Zone of the Company's website. (7) The Board of Directors approved the establishment of the Nomination Committee on November 8, 108, to improve the functions of the Board of Directors, functional committees (Salary and Compensation Committee and Nomination Committee) and strengthen the management mechanism of the Company. (8) On November 8, 2019, the Board of Directors approved the designation of CHEN, YU-CHUAN as the Senior Corporate Governance Officer, who has more than three years of experience in financial, accounting and stock management of public companies, to protect shareholders' rights and interests and strengthen the functions of the Board of Directors. (9) The Company has established and implemented a spokesperson system, with a spokesperson and a proxy spokesperson to speak to the public, and has established a standardized speaking procedure, and requires the Company's internal employees to keep financial and business secrets and not to disseminate information to the public at will. In the event of any change in the spokesperson or proxy spokesperson, the information will be disclosed immediately.

(2) The Operation of the Audit Committee or the Participation of Supervisors in the Board
The Company has not yet established an Audit Committee.
A total of 7 (A) meetings of the Board of Directors were held in FY2020.

The attendance of su ervisors was as follows: p

Title	Name	Attendance in Person(B)	Attendance Rate (%) (B/A)	Remarks
Supervisor	LI, WEN-YAO	7	100	No
Supervisor	LIN, KUO-HUA	7	100	No
Supervisor	LIANG, HSIN-YUNG	7	100	No
Other mentionable items: 1. Composition and responsibilities of supervisors: (1) Communications between supervisors and the Company's employees and shareholders (e.g. communication channels and methods, etc.): The Supervisor may contact the Company's employees and shareholders by telephone or e-mail at any time if necessary. The Company invites the Supervisor to attend the Board of Directors' meetings and shareholders' meetings, and the Supervisor may request the Company's officers or employees to explain the business they are managing, if necessary. (2) Communications between supervisors and the Company's chief internal auditor and CPA (e.g., items, methods and results of the audits of corporate finance or operations, etc.): The Company's supervisors regularly review the audit reports and may ask the Company's Chief internal auditor and discuss them at any time. During the annual report audit, the Company's supervisors communicate with the accountant regarding the key audit matters (KAM). 2. If a supervisor expresses an opinion during a meeting of the Board of Directors, the dates of the meetings, sessions, contents of motion, resolutions of the directors' meetings and the company's response to the supervisor If a supervisor expresses an opinion during a meeting of the Board of Directors, the dates of the meetings, sessions, contents of motion, resolutions of the directors' meetings and the company's response to the supervisor The Board of Directors shall be responsible for the preparation of the Board's report and the Board's report: None.

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

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
1. Does the company establish and disclose the Corporate Governance Best-Practice Principles based on "Corporate Does the company establish and disclose the Corporate Governance Best-Practice Principles based on the "Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies"?	✓		In order to establish a good corporate governance system, the Company has established a "Code of Corporate Governance Practices" in accordance with the "Code of Corporate Governance Practices for Listed Companies", which is disclosed on the Market Observation Post System and the Company's website.	No material difference was found.
2. Shareholding structure & shareholders' rights (1) Does the company establish	✓		(1) As regulated by the “Guideline of Corporate Governance Practices”, there is an “Investor Section” that provides the information of which	No material difference was

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
an internal operating procedure to deal with shareholders' suggestions, doubts, disputes (1) Does the company establish an internal operating procedure to deal with shareholders' suggestions, doubts, disputes and litigations, and implement based on the procedure? (2) Does the company possess the list of its major shareholders as well as the ultimate owners of those	✓ ✓ ✓		the shareholders are concerned and the contact channels with the Company in the Company’s official website. A spokesperson and an acting spokesperson are established to deal with shareholders’ suggestions and doubts. Lawyers shall be appointed to deal with matters that involve legal issues or other disputes. (2) The Company has gotten hold of the list of major shareholders who has the actual control over the company and their ultimate controllers, and regularly discloses the relevant pledges and changes in equity changes of directors and shareholders holding more than 10% of the shares in accordance with the laws and regulations. (3) The Company has established the “Subsidiary Supervision Operating Measures” and “Group Enterprise, Specific Company and Interest Party Transaction Operating Measures” in the internal control system. The financial, operational, and accounting of the affiliated enterprises are all working independently with a dedicated staff, and are all under the	found. No material difference was found. No material difference was found. No material difference was

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
shares? (3) Does the company establish and execute the risk management and firewall system within its conglomerate structure? (4) Does the company establish internal rules against insiders trading with undisclosed information?			control and audit of the parent company. (4) The Company has established and implemented the“Operating Procedures for the Prevention of Insider Trading” in the internal control system.	found.
3. Composition and Responsibilities of the Board of Directors (1) Does the Board develop and implement a diversified policy for the composition of its members?	✓		`（`1`）` The Company has established a “Nomination Committee” and adopted the “Candidate Proposal System”. The director candidates shall be nominated and evaluated by the “Nomination Committee”, then approved by the Board of Directors, and submitted to the Shareholders’ Meeting for election. According to Article 20 of the “Guideline of Corporate Governance Practices”, the Board members shall be	No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
(2) Does the company voluntarily establish other functional committees in addition to the Remuneration Committee and the Audit Committee? Committee? (3) Does the company establish a standard to measure the performance of the Board, and implement it annually? (3) Does the company establish a standard to measure the performance of the Board, and implement it annually? (4) Does the company regularly evaluate the independence of			equipped with the necessary knowledge, skills, and competencies to perform their duties. To achieve this ideal goal of corporate governance, the Board shall possess the following abilities: 1. Operation judgment ability 2. Accounting and financial analysis ability 3. Operation management ability 4. Crisis management ability 5. Industrial knowledge 6. Internaional market perspective 7. Leadership ability 8. Decision-making ability To strengthen the corporate governance and promote the integrated development of the Board’s constitution and structure, it is indicated in Article 20 of the “Guideline of Corporate Governance Practices”: The constitution of the Board of Directors shall be diversified; however, directors who are also managers of the companyshall not exceed one three of the total seats of

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
CPAs?	✓ ✓		directors. Diversified planning shall be formulated regarding the operations, business models, and development needs. It shall include but not be limited to the following standards in terms of two main aspects: 1. Basic conditions and values: gender, age, nationality, culture, etc. 2. Professional knowledge and skills: Professional background (such as law, accounting, industry, finance, marketing, or technology), professional skills, industrial background, and others. The current Board of Directors is composed of six directors, including four non-executive directors and two independent directors. All members have abundant experiences and professionalism in finance, law, industrial knowledge, and management. The Company pays attention to gender equality in the constitution of the Board, so thegoal for the female director	No material difference was found. No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			seat ratio is 12.5%. It is estimated to add a female director seat in the next election of directors in order to achieve the goal. To enhance the directors’ professionalism and independence, the ratio for independent directors is aimed to be 50%. It is estimated to increase the seats of independent directors in the next election of directors in order to achieve this goal. Currently, none of the directors works as the manager of the Company.Please refer to Note 1 of this table for further information on the achievement of Board member diversification (Pag. 36). `（`2`）` In addition to the Salary and Remuneration Committee as set in accordance with the laws and regulations, a Nomination Committee has been set voluntarily. The “Nomination Committee Organization Rules” was approved in the Board’s meeting on Nov 8th, 2019. The Company is planning to establish an Audit Committee in 2021. The Company has already established the “Board Performance Assessment Rules” and shall execute the assessment at the end of everyaccounting year, which shall then

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
	✓		be submitted to the Board. Reviewed in the form of a survey, the operation performance of the Directors in the Board of Directors, the directors’ self-assessment, and the operational assessment of the functional committees to themselves (the Salary and Remuneration Committee and the Nomination Committee) shall be conducted. The assessment results of the Board’s performance assessment shall be used as a reference for the individual director’s performance, salary, and remuneration, as well as nomination and re-election. Regarding the item(s) with the lowest scores, it shall be submitted to the Nomination Committee and the Board for a briefing as they shall be taken as items for improvement. The assessment items of the Board performance assessment include the following five main aspects: 1. The degree of participation in the Company’s operations. 2. The quality of the Board’s decision making. 3. The composition and structure of the Board.	No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			4. The election and continuing education of the directors. 5. Internal control. The assessment items of the directors’ self-assessment of performance shall include the following six main aspects: 1. Mastering of the Company’s goals and missions. 2. Acknowledgement of the director’s duties. 3. The degree of participation in the Company’s operations. 4. Operation and communication in internal relationships. 5. Director’s professionalism and continuing education. 6. Internal control The assessment items of the functional committee’ assessment of performance shall include the following five main aspects: 1. The degree of participation in the Company’s operations. 2. Acknowledgement of the duties of the functional committees. 3. Thequalityof decision-makingof the functional committees.

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			4. The constitution of the functional committees and the election of the members. 5. Internal control. The results of the Board’s and the Remuneration and Salary Committee’s performance assessment in 2020 were good, and the results were reported to the Board on March 9th, 2021. The Investor Section on the company’s official website was also disclosed at the same time. `（`3`）` According to Article 29 of the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies”, a regular (at least once a year) assessment on the independence and competence of the employed public certified accountant shall be conducted, and the declaration of independence issued by certified public accountants shall be obtained and submitted to the Board for the approval of the appointment. In 2020, after evaluating the independence of accountants by the Company, the accountant Su Yu-xiu and WengBo-ren of Deloitte

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			Taiwan have their independence and competence in compliance with the Company's independence assessment standards (Note 2 of this table, Pag. 34), and the declaration of independence was issued by the accountants and given to the Company. The results of the assessment were submitted to the Board on March 9th, 2021, and were approved.
4.Do Exchange-listed and OTC-listed companies appoint an adequate number of corporate governance personnel with appropriate Do Exchange-listed and OTC-listed companies appoint an adequate number of corporate governance personnel with appropriate qualifications and appoint a chief corporate	✓		(1) According to Article 3-1 of the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies”, the Finance Department shall be in charge of the Company’s corporate governance unit, responsible for all matters related to corporate governance. The duties include the following: 1. To handle all matters related to the Board’s and the Shareholders’ meetings in accordance with the laws and regulations. 2. To prepare the Board’s and the Shareholders’ meeting minutes. 3. To assist the directors and supervisors to take office and pursue continuingeducation.	No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
governance officer in charge of corporate governance affairs (including but not limited to Do Exchange-listed and OTC-listed companies appoint an adequate number of corporate governance personnel with appropriate qualifications and appoint a chief corporate governance officer in charge of corporate governance affairs (including but not limited to providing information necessary for directors and supervisors to carry out their business, assisting directors and supervisors in complyingwith			4. To provide the necessary information for the directors and supervisors to execute their duties. 5. To assist the directors and supervisors to comply with the laws and regulations. 6. Other matters established of the Articles of Association or Deeds. (2) As approved by the Board’s meeting on Nov 8th, 2019, the CFO Chen Yu-chuan will take the office of corporate governance supervisor as she has been working in the financial, accounting, and share-matters in public listed companies, with management experience for more than three years. She has worked to guarantee the shareholders’ rights and benefits and fortify the Board. (3) 2020 business operations: 1. To assist directors and supervisors to perform their duties, provide the necessary information, and arrange further studies:

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
the law, conducting board meetings and shareholders' meetings in accordance with the law, taking minutes of board meetings and shareholders' meetings, etc.)?			(1) To provide the board members with the latest information of the statutory amendments related to corporate governance, as well as their updates from time to time. (2) To review the degree of confidentiality of the relevant information and provide the board members with the necessary information to keep the communication between the directors/supervisors and the supervisors of all departments smooth. (3) To make meeting arrangements for the independent directors based on theGuideline of Corporate Governance Practices and to understand and discuss company relevant businesses with the internal audit supervisors and public certified accountants. (4) To assist the Board members to arrange a continuing education plan of at least six credits according to the Company's industrial characteristics, and the directors' and supervisors' academic background.

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			2. To assist the Board meeting and Shareholders’ meeting procedures and resolutions to be in compliance with the laws and regulations: (1) To report the Company’s corporate governance status to the Board, independent directors, and supervisors, making sure that the relevant legality of the convention of the Board and Shareholders’ meetings and corporate governance rules and regulations. (2) To assist and remind the Board members to comply with the laws and regulations when making an official resolution in the Board meeting. (3) To announce important information in the Chinese and English version at the Public Information Post System as a reference for the investors after making important resolutions in the Board meetings. 3. To maintain the relationships with the investors, convene at least two legalperson briefings every year, and make

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			arrangements for the directors to have exchanges and communication with the main shareholders, institutional investors, or general shareholders so that the investors can obtain sufficient information to assess and determine the reasonable capital market value and to have shareholders’ rights well protected. 4. To formulate Board meeting agenda and notify the Board members seven days prior to the meeting, offering them the relevant information for the motions. If avoidance is needed due to interest conflicts, they shall be reminded beforehand. Board meeting minutes shall be completed twenty days after the Board Meeting. 5. To handle the pre-registration of the date of the shareholders meeting in accordance with the laws and regulations, prepare meeting notices, meeting manuals, annual reports, and meeting records within the statutory time limit, and make announcements on the Public Information Post System; to

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			handle the relevant change registration after any amendment of the Articles of Association or re-election of the Board. 6. To assess and insure suitable liability insurance for the directors and supervisors, and remind them of the latest Board report after the completion of the issuance. (4) Please refer to Pag. 54 of the Annual Report for further information of the management’s corporate governance continuing education in 2020.
5. Does the company establish a communication channel and build a designated section on its website for stakeholders (including but not limited to shareholders, employees, customers and suppliers), as well as handle all the issues theycare for in terms of does	✓		(1) An Interest Party Section is established in the Company’s official website, which includes Shareholders Section, Customer Section, Supplier Section, and Staff Section. The complaint channels and contact information are all disclosed in the various sections. The information of interest parties can be found in the Interest Party Section on the Company’s website. (2) A Shareholder Section is established on the Company’s website together with the spokesperson and the acting spokesperson who are responsible for the communication channels. An Investor	No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
the company establish a communication channel and build a designated section on its website for stakeholders (including but not limited to shareholders, employees, customers and suppliers), as well as handle all the issues they care for in terms of corporate social responsibilities?			Section is also established on the Company’s official website, where the financial and share related information is disclosed. (3) A Customer Section is established on the Company’s website which provides customer service e-mail and customer service hotline, serving as the channels of communication for the consumers. (4) A Staff Section is established on the Company’s website which provides a staff hotline, e-mail, and staff e-mail, facilitating the communication between the staff. (5) The Company’s official website also provides a Supplier Platform for the suppliers to submit their quotations and the Company to manage the suppliers’ quality. It is served as a communication channel with the suppliers. The above-mentioned sections will respond promptly and appropriately to important corporate social responsibility issues which are concerned bythe interestparties.
6. Does the company appoint a professional shareholder	✓		The Company has entrusted a professional stock affairs agency, the “Stock Affairs AgencyDepartment of Grand Fortune Securities” to	No material difference was

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
service agency to deal with shareholder affairs?			handle various stock affairs on behalf of the Company.	found.
7. Information Disclosure (1) Does the company have a corporate website to disclose both financial standings and the status of corporate governance? (2) Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to (2) Does the company have other information disclosure channels (e.g. building an English website, appointing designated people to handle information collection and disclosure, creatinga spokesman	✓ ✓ ✓		(1) The Company has established an exclusive website: http://www.caesar.com.tw,where the financial affairs and corporate governance information are revealed in the Investor Section, serving as a reference for the shareholders and interested party. Information will be updated on a regular basis, facilitating the investors to take it as reference. (2) The company has appointed a dedicated staff to take charge of the collection and disclosure of the Company’s information and has established a spokesperson and an acting spokesperson to speak on behalf of the Company. The management and employees are requested to keep the financial business confidential, not to disseminate information arbitrarily in order to fully implement the spokesperson system. The process of the Company’s legal person briefings has been uploaded to the Company’s official	No material difference was found. No material difference was found. No material

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
system, webcasting investor conferences)? 3) Does the Company publicly announce and file its annual financial reports within two months after the end of the fiscal year, and announce and file its first, second and third quarter financial reports as well as its operations for each month well in advance of the prescribed deadline? Does the Company publicly announce and file its annual financial reports within two months after the end of the fiscalyear, and announce and			website, making sure that all information that may affect the shareholders and the interested parties’ decision-making can be disclosed in a timely and fair manner. (3) The annual financial report must be announced and declared by the Company within two months after the end of the accounting year. The 2020 individual financial report and consolidated financial report were submitted to the Board for approval on March 9, 2021 and were then announced on the Public Information Post System. The financial report of Q1 – Q3 of 2020 and the monthly operating conditions of 2020 have been announced on the Public Information Post System before the prescribed deadline.	difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
file its first, second and third quarter financial reports as well as its operations for each month well in advance of the prescribed deadline?
8. Is there any other important information to facilitate a better understanding of the company's corporate governance (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors' and supervisors' training records, the implementation of risk	✓		(1) Employee’s rights and benefits and care of the employees Please refer to Pag. 82 – 3 “Employee-management relationship” of the annual report. (2) Relationship with the investors The Company has implemented the spokesperson and acting spokesperson system, which is served as a communication channel between the Company and the shareholders, investors, and interested parties. The Company shall provide the various information that may affect the investors’ decision-making in accordance with the competent authority’s regulations related to the information announcement and declaration. (3) Relationshipwith the suppliers	No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
management (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors' and supervisors' training records, the implementation of risk management and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?			The Company has established “Supplier Management Measures”, ensuring the delivery, quality, and pricing of the suppliers to be in compliance with the Company’s needs and to establish good communication and coordination. (4) Interested parties’ rights Please refer to the Interested Parties Section under the Investor Section on the Company's official website (http://www.caesar.com.tw) and to the "Communication with Interested Parties" on Pag. 48 of this annual report. (5) Directors and supervisors’ continuing education Please refer to the “2020 Directors and Supervisors' Continuing Education on Corporate Governance" on Pag. 53 of this annual report. (6) Implementation of risk management policy and risk measurement standards Please refer to the risk management policies and procedures under the Corporate Governance Section of the Investor Section

Evaluation Item			Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			of the Company's official website and refer to Pag. 37 - 39 of this annual report. (7) Implementation of customer policy The Company has established a Sales Department and a Customer Service Department that offer channels of product consultation and after-sales services and maintenance, keeping a smooth contact channel with the customers. (8) Liability insurance purchased by the Company for the Directors and Supervisors The purchase of liability insurance for the directors, supervisors, and important employees was approved by the Board on May 6th, 2020 in order to reduce and disperse the risk of major damages to the Company and shareholders that may be caused by mistakes or negligence. The insurance was issued on June 1st, 2020 in accordance with the laws and regulations.

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
9.please provide information on the improvements made based on the results of the latest annual corporate governance assessment Please provide information on the improvements made based on the results of the latest annual corporate governance assessment published by the Taiwan Stock Exchange Corporate Governance Center and suggest priorities and measures for improvement where (a company which was not a target of assessment has no need to fill in this column.) 1. Improved situation (1) The Company has convened a regular meeting of shareholders by the end of May. (2) The Company has disclosed the specific management objectives and implementation of the Board of Directors' diversity policy on the Company's website and annual report. (3) The Company has established risk management policies and procedures approved by the Board of Directors to disclose the scope of risk management, organizational structure and its operations. (4) The Company has established an information security risk management framework, formulated information security policies and specific management plans, and disclosed them on the Company's website or in the annual report. (5) The Company has formulated an intellectual property management plan that is linked to its operational objectives, and discloses the implementation status on the Company's website or in its annual report, and reports to the Board of Directors at least once a year. (6)The Companyhas synchronized the release of material information in English.

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Im lementation Status Deviations from the
p
Corporate
Governance
Best-Practice
Evaluation Item
Yes No Abstract Illustration Principles for
TWSE/TPEx Listed
Companies and
Reasons
(7) The Company has been approved by the Board of Directors or submitted to the Board of Directors 7 days prior to the
announcement deadline, and the financial report will be published within 1 day after the approval date or submission date.
(8) The Company has disclosed a specific dividend policy in its annual report.
(9) The Company has been invited to hold at least two (2) corporate meetings in 2020, and the first two corporate meetings of
the year under review are held at least three months apart.
2. Prioritization and Enhancement Measures
(1) The Company plans to upload the annual financial report in English, the English annual report, the English handbook
and the supplementary information of the meeting at 2021 Annual General Meeting of Shareholders.
(2) The Company plans to include at least one female director in the 2021 general election of directors.
(3) The Company plans to voluntarily establish more independent directorships than those required by the Act in 2021 year
of the general election of directors.
(4) The Company will revise the "Code of Corporate Governance Practices" in 2021 to provide for the appointment,
evaluation and remuneration of internal auditors to be reported to the Board of Directors or approved by the Chairman of the
Board of Directors through the Chief internal auditor's signature, and to be disclosed on the Company's website.
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Note 1: Diversified Core Competency of the members of the Board

Core Competency	1. Basic	1. Basic	2. Background	2. Background	2. Background	2. Background	2. Background	3. Industrial Experience	3. Industrial Experience	3. Industrial Experience	3. Industrial Experience	3. Industrial Experience	4. Expertise	4. Expertise	4. Expertise	4. Expertise	4. Expertise	4. Expertise	4. Expertise	4. Expertise
	Composition
			La w	Accounti ng	Indust ry	Finan ce	Marketin g or Technolo gy	Lawy er	Account ant	Ban k	Business Administrat ion	Manufactur ing and Sale		Accounti				Internatio
													Business
														ng,		Crisis	Industry	nal
	Nationali												Judgem		Managem				Leaders	Decision-ma
		Sex												Financial		Managem	Knowle	Market
	ty												ent		ent Skills				hip	king Skills
														Analytica		ent Skills	dge	Perspecti
Name
													Skills
														l skills				ve


HSIAO,
CHUN-HSIA	ROC	Male			V		V				V	V	V	V	V	V	V	V	V	V
NG
CHANG,
	ROC	Male			V							V	V		V	V	V	V
YUNG-NAN

TSAI,										V
	ROC	Male				V								V	V				V	V
MING-HSI

YU,
	ROC	Male				V	V				V		V	V	V				V	V
CHIH-HSIN

CHEN,
SHIH-HSIU	ROC	Male		V					V				V	V	V				V	V
NG
HSU,			V
FENG-YUA	ROC	Male						V							V	V			V	V
N
The average age of the members of the Board was 56.7 years.

Note 2: Accountant inde endence evaluation criteria p

Item	Item	Company Self-Assessment	Accountants' Statement
1	The certifying accountant, his or her spouse, and dependent relatives have not (1) The Company has a direct or indirect material financial interest in the Company. (2) The Company has a business relationship with the Company or its directors, supervisors or managers that affects independence.	Yes	Yes
2	During the audit period, the certified public accountants, their spouses and dependents did not hold any positions as directors, supervisors, managers, or positions that directly and materially affected the audit of the Company.	Yes	Yes
3	The certifying accountant does not currently hold any position as a director, supervisor, or manager of the Company or any position that has significant influence on the Company within the last two years, and has not undertaken to hold any such position.	Yes	Yes
4	The certifying accountant is not related to the directors, supervisors or officers of the Company by consanguinity, consanguinity, affinity or consanguinity within two degrees.	Yes	Yes
5	The certifying accountant has not received any gift or present of significant value from the Company or from any of the Company's directors, supervisors, managers or major shareholders (the value of which does not exceed the normal standards of social etiquette)	Yes	Yes

(4) If a company has established a remunearation committee, then it shall disclose the composition, responsibilities and operation of the If a company has established a remuneration committee, then it shall disclose the composition, responsibilities and operation of the committee:

1. Information of the Remuneration Committee Members:

Title	Criteria Name	Meets One of the Following Professional Qualification Requirements,Together with at Least Five Years' Work Experience	Meets One of the Following Professional Qualification Requirements,Together with at Least Five Years' Work Experience	Meets One of the Following Professional Qualification Requirements,Together with at Least Five Years' Work Experience	Independence Criteria(Note 1)	Independence Criteria(Note 1)	Independence Criteria(Note 1)	Independence Criteria(Note 1)	Independence Criteria(Note 1)	Independence Criteria(Note 1)	Independence Criteria(Note 1)	Independence Criteria(Note 1)	Independence Criteria(Note 1)		Number of Other Public Companies in Which the Individual is Concurrently Serving as a Remuneration Committee Member	Remarks
		An Instructor or Higher Position in a Department of Commerce, Law, Finance, Accounting, or Other Academic Department Related to the Business Needs of the Company in a Public or Private Junior College, College or University	A Judge, Public Prosecutor, Attorney, Certified Public Accountant, or Other Professional or Technical Specialist Who has passed a National Examination and been Awarded a Certificate in a Profession Necessary for the Business of the Company	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
Independ ent Director	CHEN, SHIH-HS IUNG		✓	✓	✓		✓	✓	✓	✓	✓	✓	✓	✓	0	No
Independ ent Director	HSU, FENG-Y UAN		✓	✓	✓		✓	✓	✓	✓	✓	✓	✓	✓	0	No
Other	HO, CHENG- WEI		✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	✓	0	No

Note 1: Please tick the corresponding boxes that apply to a member during the two years prior to being elected or during the term(s) of office. Please check the corresponding boxes that apply to a member during the two years prior to being elected or during the term( s) of office.

(1) Not an employee of the Company or any of its affiliates.
(2) Not a director or supervisor of the Company or any of its affiliates (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the (2) Not a director or supervisor of the Company or any of its affiliates (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these companies mentioned above in accordance with the Act or local laws and regulations).
(3) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons (4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three subparagraphs.
(5) Not a director, supervisor, or employee of a corporate shareholder who directly holds 5% or more of the total number of outstanding shares of the Company, or who holds shares ranking in the top five holdings , or who appoints a representative to be outstanding shares of the Company, or who holds shares ranking in the top five holdings , or who appoints a representative to be the director or supervior of the Company in accordance with Paragraph 1 or 2, Article 27 of the Company Act (not applicable in cases where the person is an independent director) cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these companies mentioned above in accordance with the Act or local laws and regulations). regulations).
(6) A majority of the Company's director seats or voting shares are not controlled by the same person: a director, supervisor, or employee of any other company (not applicable in cases where the person is an independent director of the Company, its parent employee of any other company (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these companies mentioned) (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these companies

mentioned above) in accordance with the Act or local laws and regulations).

(7) The chairperson, president, or person holding an equivalent position of the Company are not the same person or spouses: a director (or governor), supervisor, or employee of any other company or institution (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the (not applicable in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which an independent director can also be the independent director these companies mentioned above in accordance with the Act or local laws and regulations).
(8) Not a director, supervisor, managerial officer, or shareholder holding 5% or more of the shares, of a specified company or institution that has a financial or business relationship with the Company (this limit does not apply to where a specified company has a financial or business relationship with the Company) institution that has a financial or business relationship with the Company (this limit does not apply to where a specified company or institution holds 20% or more but not more than 50% of the total number of issued shares of the Company) or institution holds 20% or more but not more than 50% of the total number of issued shares of the Company nor 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, the Company and its parent or subsidiary or a subsidiary of the same parent.)

(9) Not a professional individual who, or an owner, partner, director, supervisor, or managerial 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 provider in the past 2 years has received cumulative compensation not more than NT$500,000, or a spouse thereof; provided, this restriction does not apply to a member restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition for merger/consolidation and acquisition, who exercises powers pursuant to the Securities and Exchange Act or to the Business Mergers and Acquisitions Act or related laws or regulations.
(10) Not been a person of any conditions defined in Article 30 of the Company Act.
Operation of the Remuneration Committee
(1) There are totally 3 members in the Remuneration Committee of the Company.
(2) The term of the current committee members is from June 13, 2018 to June 12, 2021. A total of 2 (A) Remuneration Committee meetings were held in FY2020; the qualification and the attendance record of the Remuneration Committee members were as follows A total of 2 (A) Remuneration Committee meetings were held in FY2020; The qualification and the attendance record of the Remuneration Committee members were as follows:

Title	Name	Attendance in Person (B)	Attendance Rate (%) (B/A)	Remarks
Convener	CHEN, SHIH-HSIUNG	2	100	No
Committee Member	HSU, FENG-YUAN	2	100	No
Committee Member	HO, CHENG-WEI	2	100	No

	Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company's response to the recommendation. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company's response to the remuneration committee's opinion (e.g. the remuneration passed by the Board of Directors exceeds the (eg., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected to by members or subject to a qualified opinion and recorded or declared in writing, the date of the meeting, session, content of the motion, all members' opinions and the response to members writing, the date of the meeting, session, content of the motion, all members' opinions and the response to members'opinion should be specified: Salary and Remuneration Committee Motions and follow-ups Resolution Result The company's handling of the salary and compensation committee's opinion The Fourth Fifth 2020.06.09 1. Revision of the 2019 remuneration payment of the directors and supervisors. 2. Revision of the 2019 remuneration payment for the employees. 3. Revision of the 2019 operating bonus payment. 4. Revision of CFO’s salary adjustment. Motion 1: Except for the directors and supervisors whose personal interests are involved in the motion who withdrew during the discussion and resolution, the other directors present at the meeting approved the proposals without objection after being consulted by the Chairman. The rest of the proposals, after being consulted by the Chairman, were approved by all As consulted by the Chairman in the Board Meeting, all proposals were approved by the directors present without objection.	Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company's response to the recommendation. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company's response to the remuneration committee's opinion (e.g. the remuneration passed by the Board of Directors exceeds the (eg., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected to by members or subject to a qualified opinion and recorded or declared in writing, the date of the meeting, session, content of the motion, all members' opinions and the response to members writing, the date of the meeting, session, content of the motion, all members' opinions and the response to members'opinion should be specified: Salary and Remuneration Committee Motions and follow-ups Resolution Result The company's handling of the salary and compensation committee's opinion The Fourth Fifth 2020.06.09 1. Revision of the 2019 remuneration payment of the directors and supervisors. 2. Revision of the 2019 remuneration payment for the employees. 3. Revision of the 2019 operating bonus payment. 4. Revision of CFO’s salary adjustment. Motion 1: Except for the directors and supervisors whose personal interests are involved in the motion who withdrew during the discussion and resolution, the other directors present at the meeting approved the proposals without objection after being consulted by the Chairman. The rest of the proposals, after being consulted by the Chairman, were approved by all As consulted by the Chairman in the Board Meeting, all proposals were approved by the directors present without objection.	Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company's response to the recommendation. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company's response to the remuneration committee's opinion (e.g. the remuneration passed by the Board of Directors exceeds the (eg., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected to by members or subject to a qualified opinion and recorded or declared in writing, the date of the meeting, session, content of the motion, all members' opinions and the response to members writing, the date of the meeting, session, content of the motion, all members' opinions and the response to members'opinion should be specified: Salary and Remuneration Committee Motions and follow-ups Resolution Result The company's handling of the salary and compensation committee's opinion The Fourth Fifth 2020.06.09 1. Revision of the 2019 remuneration payment of the directors and supervisors. 2. Revision of the 2019 remuneration payment for the employees. 3. Revision of the 2019 operating bonus payment. 4. Revision of CFO’s salary adjustment. Motion 1: Except for the directors and supervisors whose personal interests are involved in the motion who withdrew during the discussion and resolution, the other directors present at the meeting approved the proposals without objection after being consulted by the Chairman. The rest of the proposals, after being consulted by the Chairman, were approved by all As consulted by the Chairman in the Board Meeting, all proposals were approved by the directors present without objection.	Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company's response to the recommendation. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company's response to the remuneration committee's opinion (e.g. the remuneration passed by the Board of Directors exceeds the (eg., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected to by members or subject to a qualified opinion and recorded or declared in writing, the date of the meeting, session, content of the motion, all members' opinions and the response to members writing, the date of the meeting, session, content of the motion, all members' opinions and the response to members'opinion should be specified: Salary and Remuneration Committee Motions and follow-ups Resolution Result The company's handling of the salary and compensation committee's opinion The Fourth Fifth 2020.06.09 1. Revision of the 2019 remuneration payment of the directors and supervisors. 2. Revision of the 2019 remuneration payment for the employees. 3. Revision of the 2019 operating bonus payment. 4. Revision of CFO’s salary adjustment. Motion 1: Except for the directors and supervisors whose personal interests are involved in the motion who withdrew during the discussion and resolution, the other directors present at the meeting approved the proposals without objection after being consulted by the Chairman. The rest of the proposals, after being consulted by the Chairman, were approved by all As consulted by the Chairman in the Board Meeting, all proposals were approved by the directors present without objection.
	Salary and Remuneration Committee	Motions and follow-ups	Resolution Result	The company's handling of the salary and compensation committee's opinion
	The Fourth Fifth 2020.06.09	1. Revision of the 2019 remuneration payment of the directors and supervisors. 2. Revision of the 2019 remuneration payment for the employees. 3. Revision of the 2019 operating bonus payment. 4. Revision of CFO’s salary adjustment.	Motion 1: Except for the directors and supervisors whose personal interests are involved in the motion who withdrew during the discussion and resolution, the other directors present at the meeting approved the proposals without objection after being consulted by the Chairman. The rest of the proposals, after being consulted by the Chairman, were approved by all	As consulted by the Chairman in the Board Meeting, all proposals were approved by the directors present without objection.

			directors present.
	The Fourth Sixth 2020.12.24	1. Revision of the provisions of “Board Performance Assessment Rules”. 2. Revision of the provisions of “Manager’s Remuneration Rules”. 3. Review of the Company’s directors’ and supervisors’ performance in 2020 and their performance goals and remuneration in 2021. 4. Review of the Company’s managers’ performance in 2020 and their performance goals and remuneration in 2021. 5. Review of the distribution of compensations for the directors and supervisors, as well as the employees, in 2020. 6. Review of the 2020 operating bonus distribution. 7. Review of the 2020 year-end bonus distribution. 8. Discussion of the Company’s Salary and Remuneration Committe’s 2021 work plan.	Except for the committee members whose personal interests are involved in the motion who withdrew during the discussion and resolution, the other committee members present at the meeting approved the proposals without objection after being consulted by the Chairman. Motion 3: Except for the directors and supervisors whose personal interests are involved in the motion who withdrew during the discussion and resolution, the other directors present at the meeting approved the proposals without objection after being consulted by the Chairman. The rest of the proposals, after being consulted by the Chairman, were approved by all directors present.	As consulted by the Chairman in the Board Meeting, all proposals were approved by the directors present without objection.

(5) Implementation of Corporate Social Responsibility and the Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
1. Does the company conduct risk assessment on environmental, social and corporate governance issues related to its operations in accordance with the principle of materiality, and formulate relevant risk management policies or strategies? Does the company conduct risk assessment on environmental, social and corporate governance issues related to its operations in accordance with the	✓		(1) The Company has established the “Regulations of Corporate Social Responsibility Practices” which stipulates the performance of relevant risk assessments on key issues based on the principle of the importance of corporate social responsibility and set the relevant risk management policies or strategies after conducting the relevant assessments. The “Risk Management Policy and Procedures” was approved by the Board on Nov 4th, 2020, which will be served as the highest instruction principle for risk management. The Company will conduct a regular annual risk assessment and formulate risk management policies targeting various risks. It will cover the management goals, management scope and basis, organizational structure and duties, risk measurement mechanism, and risk management implementation, in order to identify, measure, and control the various risks in an effective manner. All risks arisingfrom the business activities	No material difference was found.

Evaluation Item			Implementation Status	Implementation Status
	Yes	No	Abstract Illustration
principle of materiality, and formulate relevant risk management policies or strategies?			shall be controlled within an acceptable scope. (2) The Company’s risk management scope is as the following: Risk management scope Risk management description (1) Market 1. Politics and economy: Risk factors related to domestic and foreign politics and economies that may influence the Company’s finance and/or business. 2. Industry: Risk factors consist of the domestic and foreign industries that have direct and/or indirect relationships with the Company’s industry, impacting our finance and/or business. (2) Operation s 1. Operations: Risks arising from the change of business and operation models, organizational
			Risk management scope	Risk management description
			(1) Market	1. Politics and economy: Risk factors related to domestic and foreign politics and economies that may influence the Company’s finance and/or business. 2. Industry: Risk factors consist of the domestic and foreign industries that have direct and/or indirect relationships with the Company’s industry, impacting our finance and/or business.
			(2) Operation s	1. Operations: Risks arising from the change of business and operation models, organizational

Evaluation Item					Implementation Status	Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No			Abstract Illustration
					structure adjustment, product elimination, product and service design, quality management, and business contracts related to major risk management. 2. Finance: Risks arising from asset evaluation, credit and solvency, liquidity risks, and accounting policies, that may affect the Company. 3. Supply chain: Risks arising from supplier quality, pricing, and delivery, corporate social responsibility related issues, that may affect the Company. 4. Information security: Risks arising from digital information security, general information protection regulations, etc. that may affect the Company. 5. Public relations: Risks arisingfrom issues

			Implementation Status
Yes	No		Abstract Illustration
			related to public relations, such as brand management, shaping, and maintenance of the business image, etc. that may affect the Company. 6. Intellectual property rights: Such as patent application and maintenance, intellectual propertyrightprotection, etc.
		(3) Investmen t	For example, risks due to the intensive concentration of reinvestment subjects, high-risk and high-leverage operations, trading of derivative financial products, financial management, and other short-term investment market price fluctuations, or risks arising from the operation scope management from long-term invested companies caused to the Company.
		(4) Statutory regulation	Legal risks arising from the various possible infringement of the Company’s rights and benefits

			Implementation Status
Yes	No		Abstract Illustration
			arising from the incompliance of the relevant laws and regulations, including but not limited to laws and regulations related to labor, company, securities exchange, import and export, industrial conduct standard, requests of the competent authorities, etc.
		(5) Environm ent	1. Risks arising from greenhouse gases management, carbon right management, energy management, and other relevant issues in response to climate change and natural disasters. 2. Risks arising from the compliance with international and local environmental laws and regulations, such as air pollution, water/toxic water discharge, noise management, environmental assessment requests, etc. 3. Risks arising from the safety of the employees’ and suppliers’ workingenvironment, and

Evaluation Item				Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No		Abstract Illustration
				occupational sanitation and health, chemical management, safety protection, and contingencyresponses.
			(6) Human resources	1. Human resources: Risks arising from human rights issues of employees or suppliers, including but not limited to the employee-management relationship, child labor, forced labor, etc. 2. Risks arising from talent development management, such as the recruitment and retention of talents, talent development mechanism, etc.

2. Does the company establish exclusively (or concurrently) dedicated first-line managers authorized bythe	✓		3. The Company has set a “corporate social responsibility team” that is in charge of the promotion of corporate governance, the development of a sustainable environment, maintenance of social charityworks, and other corporate social responsibilities.		No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
board to be in charge of proposing the corporate social responsibility policies and reporting to the board? Does the company establish exclusively (or concurrently dedicated first-line managers authorized by the board to be in charge of proposing the corporate social responsibility policies and reportingto the board?			The Chair of the Board shall be the Chairman and the convener, leading all senior management of all the department. A monthly meeting shall be conducted with the convention for major issue discussion on an irregular basis every year. In 2020, the corporate social responsibility team convened 4 meetings for the preparation and regular revision of goals, performance, and progress in terms of the corporate social responsibilities, the directions for corporate governance, and sustainable development. All executed plans and results of the 2020 corporate social responsibilities were submitted to the Board on Dec 24th, 2020.
3. Environmental Issues (1) Does the company establish proper environmental management systems based on the characteristics of their	✓		(1) The Company shall establish a suitable environmental management system based on the features of the industry, including the following: 1. Access security: Dayand night access management, and	No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
industries? (2) Does the company endeavor to utilize all resources more efficiently and use renewable materials which have low impact on the environment? (3) Does the company assess the potential risks and opportunities of climate change for the business now and in the future, and (3) Does the company assess the potential risks and opportunities of climate change for the business now and in the future, and has it taken measures to address			office and factory safety maintenance contract with Taiwan Secom. 2. Labor safety promotion and disability injury: There were no work-related deaths in the Company from 2019 to 2020. During the daily morning meetings in the factory, promotions of safety concepts are conducted to strengthen the staff’s ability to identify hazards so that everyone can work safely in a safe workplace. The implementations are registered every day in the notebook. 3. Maintenance and inspection of the equipment: A. Forklifts: Dedicated custodians shall check daily the inspection items when they go to work and fill the results in the daily checklist table. B. Generator: It is turned on every Friday to ensure that it is usable when an emergency occurs. C. Hydraulic trucks: Each hydraulic truck has a

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
climate related issues? (4) Has the Company compiled statistics on greenhouse gas emissions, water consumption and total weight of waste for the past two years, and developed policies to save energy and reduce carbon emissions, greenhouse gas emissions, water consumption or manage (4) Has the Company compiled statistics on greenhouse gas emissions, water consumption and total weight of waste for thepast	✓		dedicated custodian who shall conduct regular inspections every two months. The results shall be filled in the equipment maintenance and inspection form. D. Water dispenser: Regular water quality inspection shall be conducted and the filter shall be replaced at the beginning of every month in order to ensure the safety of the drinking water. E. Freight elevator: The freight elevator maintenance contractor shall conduct freight elevator maintenance and inspection at the end of every month. F. Computers: Each computer has a dedicated custodian who shall conduct a regular inspection every two months. The results shall be filled in the equipment maintenance and inspection form. 4. Safety protection measures for the office in Taipei: a fire	No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
two years, and developed policies to save energy and reduce carbon emissions, greenhouse gas emissions, water consumption or manage waste?	✓ ✓		drill and an audit inspection shall be conducted every half a year in the office in Taipei. Fire alarms shall be installed at all sections of the office. (2) The company is committed to the improvement of the utilization efficiency of the different resources and to the usage of recycled materials with lower impacts on the environment. The practices are as the following: 1. To save the raw materials and energy consumed during the production process and to reduce unnecessary external packaging and internal cushioning materials in order to improve the re-utilization efficiency of the resources. 2. To launch water-free toilets and a series of water kinetic energy products that have energy-saving, anti-pollution, and water-saving features, which can reduce the impact on the environment. 3. To reduce the use ofphotocopy papers byelectronizing	No material difference was found. No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			parts of the documents of the Company and the official documents. Photocopy papers are recycled for repetitive usage. The internal documents can be transmitted with recycled envelopes. 4. To implement trash categorization and set up a recycling station to regularly recycle waste toner cartridges, waste paper, and old computers so that they can be recycled and reprocessed. 5. Waste treatment fees and other fees for the recycled items (e.g. alkaline batteries) or containers are paid to the Environmental Protection Bureau every two months. 6. A professional cleaning and processing institution is entrusted to conduct quarterly waste removal operations, such as scrap porcelains. 7. A solar power generation system is installed in Zaoqiao Logistics Center to increase the use of renewable

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			energy. (3) The Company has set up a Corporate Social Responsibility Team that will conduct assessments and inspections regarding the potential risks and opportunities of the different departments’ businesses and climate change issues in the meetings, promote various environmental protection measures, such as water-saving, energy-saving, carbon reduction, etc., and proactively develop eco-friendly products that are in compliance with the national standards. (4) The Company pays attention to the greenhouse gas emissions, water consumption, and total waste weight in the past two years and formulates policies for energy saving and carbon reduction, greenhouse gas reduction, water reduction, or other waste management. The practices are as the following: 1. All illumination fixtures of the offices are replaced with LED lighting fixtures, which could reduce about 430 kWhper month.

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			2. Since September 2019, in accordance with the e-invoice policy of the Ministry of Finance, papers used to print invoices with the electronic computers were reduced. About 90,000 pieces of electronic computer invoice paper can be saved every year. 3. The ACs of the Company are set at a fixed temperature and are used together with circulation ventilators, which can reduce the power consumption. Circulation ventilators were installed in the second half of 2020, reducing an accumulated 257 kWh. 4. The Management Department conducts irregular promotions and implementations of the turning-off of the ACs, lighting, and electronic appliances when not using them. 5. The Vietnam Caesar Sanitary Wares Joint Stock Company continues promoting the rectification of hydropower and oilgas, and thegas equipment has been replaced with a

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			natural gas system to reduce the burden on the environment. 6. Climbing the stairs is encouraged to replace the elevators, which can reduce power consumption. 7. The Company’s energy saving and carbon reduction management plan aims to reduce 5% of paper usage, 2% of carbon emission, and 2% of power consumption within five years. 8. Based on the Company’s statistics, the greenhouse gas emission in the past two years was 228,678.81 kg in 2019 and 195,048.98 kg in 2020; the water consumption in the past two years was 282,000 liters in 2019 and 378,000 liters in 2020; the total weight of waste ceramics in the past two years was 62,950 kg in 2019 and 79,384 kg in 2020.
4. Social Issues (1)Does the companyformulate	✓		(1)The Company’s "Human Rights Protection Policy" complies with	No material

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights? (2) Has the company established and implemented reasonable employee benefits (including pay, leave and other benefits, etc.) and (2) Has the company established and implemented reasonable employee benefits (including pay, leave and other benefits, etc.) and appropriately reflected operational	✓		the internationally recognized human rights standards, such as The United Nations Global Compact, the United Nations’ Universal Declaration of Human Rights, and the International Labor Organization’s Declaration of Fundamental Principles and Rights at Work. Based on them, the Company formulates and implements various policies to protect and guarantee human rights. Relevant management policies and procedures, such as work rules, management methods for attendance and absences, sexual harassment, and preventive methods have been formulated. The legal rights and benefits of the employees are guaranteed, whereas the basic labor human rights principles are respected, with the absence of any endangerment of laborers’ basic rights. (2) The Company has established and implemented appropriate employee welfare measures (including salary, leaves, and others), which are stated in the following:	difference was found. No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
performance or results in employee compensation? (3) Does the company provide a healthy and safe working environment and organize training on health and safety for its employees (3) Does the company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis? (4) Does the company provide its employees with career development and training			1. The Company has established employee attendance and leave management based on the Labor Standard Act which explicitly stipulates the working hour standards and the salary payment rules of the different types of leaves. Off-days, holidays, national holidays, and special holidays regulated by the Labor Standards Act are all included within the salary payment scope. 2. The assistance and welfares offered to the employees based on the Labor Standard Act and Act of Gender Equality in Employment are stated in the following: `（`1`）`Maternity leave, pre-maternity leaves, and family care leaves are provided. `（`2`）`Approval for the leaves without pay for childcare. `（`3`）`Discount contract signed with childcare institutions offered for the staff. `（`4`）`The Employee Welfare Committee of our Company offers holidayallowances, birthdaybonuses, marriage

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
sessions? (5) Does the company comply with relevant legislation and international standards on customer health and safety, customer privacy, (5) Does the company comply with relevant legislation and international standards on customer health and safety, customer privacy, marketing and labeling of its products and services, and has it developed relevant consumer protection policies and complaint procedures? (6)Does the companyhave a	✓		allowances, maternity allowances, first home purchase allowances, funeral allowances, injury and sickness allowances, child education grants, annual employee trips, and monthly birthdays parties. The Company makes appropriate reflections of the operating performance or results on the employees’ payment with the following practices: 1. The establishment of a Salary and Remuneration Committee that sets and reviews regularly the performance assessment of the directors and supervisors and review periodically the policies, systems, standards, and structures of the salaries and remuneration. 2. The establishment of “Salary Management Measure” and “Regulations of the Rewards and Punishments for the Employes”,policies related to the employees’	No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
supplier management policy that requires suppliers to comply with relevant regulations on issues such as environmental protection, occupational safety and health or labor human rights, and how is this implemented? (6) Does the company have a supplier management policy that requires suppliers to comply with relevant regulations on issues such as environmental protection, occupational safety and health or labor human rights, and how is this implemented?	✓		performance evaluation, and clear and explicit reward and punishment system. 3. To attract and retain the outstanding talents and to share the operating results of the Company with the employees, the Company has a comprehensive salary structure that includes the monthly base salary, monthly performance bonus, and year-end bonus. Every year, a budget is allocated to make annual promotions and adjust the salaries based on the employees’ performance. Based on the percentage of the operating performance, a performance goal bonus is given every month. Based on the Company’s business performance and the employee’s performance, the year-end bonus is given, with a minimum of one month. According to Article 20 of the Company’s “Articles of Association”, 2% to 5% of the Company’s annual netprofit before tax before deductingemployee	No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
	✓		remuneration, and no more than 2% for the directors and supervisors. However, when the Company still has accumulated losses (including adjustments to the amount of undistributed surplus), the budget shall be reserved as compensation in advance. 4. To periodically promote continuing training and other advocacies, which shall be integrated with the employee performance evaluation system, in order to facilitate the implementation of a clear and effective reward and punishment system. (3) The Company is already offering the employees healthy and safe workplaces with regular safety and health education for the employees. The operations are the following: 1. Disinfection of the various workplaces. 2. Regular inspection of the firefighting equipment and sanitation equipment.	No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
	✓		3. A centralized AC system is installed in the office with sufficient lighting and regular elevator maintenance. 4. Security guards are hired to control the access of personnel. 5. The employees are insured with the Labor Insurance and National Health Insurance as in accordance with the laws. Additional employer’s accident liability insurance, employer’s compensation liability insurance, and group insurance are also provided. 6. Being equal before the laws, the Company has formulated measures to prevent sexual harassment and disciplinary measures. Explicit regulations are set for the investigation and trials for the accused or the suspects, providing the opportunity of defense of the parties. The investigation shall be conducted in a fair manner, and appropriate disciplinary actions shall be given based on the evidence and “Regulations of the Rewards and Punishments for the Employes”.

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			7. Personal data protection policy and management measures are established. Unless it is for a specific purpose, the Company shall not collect, process, and use the personal data. (4) To establish an effective career development and training plan, the Company uses the following methods: 1. To create a good environment for the career development of the employees, the Company has set a “Personnel Management Regulations and Measures” that evaluates the performance and promotion based on the work performance and development potentials, regardless the race, class, language, mind, religion, political party, nationality origin, place of birth, gender, sexual orientation, age, marriage, appearance, and physical and mental disabilities. 2. In compliance with the Employment Service Act, the “Personnel Management Regulations and Measures” is	No material difference was found.

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			established to implement employee recruitment criteria based on their professionalism, talents, ethics, and work experiences, offering everyone fair competition for employment. 3. Plans are made based on long-term talent cultivation and on the needs of the departments and of the personnel. Employees’ competitiveness, professional skills, knowledge, and attitude are enhanced via internal and external educational training. Subsidies for educational training can be applied so that the employees can grow together with the Company’s performance. 4. Good promotional channels are given. The Company conducts annual evaluations and performance assessments on a regular basis, promoting outstanding talents to become junior to senior management of the Company. 5. Successionplans are established for the Board members

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			and important management and shall be disclosed in the Investor Section of the Company's official website. (5) The company complies with relevant laws and regulations and international standards on customer health and safety, customer privacy, marketing and labeling of products and services, which are as listed in the following: 1. CNS mark. 2. Water-saving mark. 3. Golden mark for water-saving. 4. Anti-fouling mark. 5. Load stamp. 6. Nano-label. 7. Eco-friendly mark. 8. SGS certification. 9. Japan’s SIAA antibacterial certification. 10. Lead-free faucet. The Companyhas formulatedpolicies and complaints

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			procedures related to the protection of consumers’ rights and benefits. They are stated as in the following: 1. All product information is completely disclosed on the Company’s official website so that the customers can read it at any time. 2. “Customer Complaint Measures” is established, providing a comprehensive sales service, review, and enhancement procedures in order to avoid any repetition of the complaint. 3. A Customer Service Department is established for the customers to make service consultation or to propose any need or inquiry. 4. A free 0800 hotline is set for the consumers, and dedicated staff is assigned to handle all related matters. 5. All products are insured with product liability insurance. (6) The Company has established “Supplier Management Measures”, which is the basis for the regular and/or irregular

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			review of the suppliers. The items of the assessment standard shall include the corporate social responsibility policies. If the supplier is involved with the violation of its corporate social responsibility policies, causing significant impact to the environment and/or society, the Company may terminate the contract(s) at any time. Before having any trading with the suppliers, the Company shall make an appropriate evaluation of the suppliers. The items of the assessment standard include: 1. Any records of environmental impact. 2. Ethical suppliers are prioritized. 3. The “Supplier Management Measures” is established, which is the basis for the regular and/or irregular review of the suppliers.
5. Does the company make reference to international standards or guidelines for thepreparation of reports,		✓	The Company has not prepared a corporate social responsibility report.	It is not mandatory for the Company to prepare a Corporate Social Responsibility

Evaluation Item			Implementation Status	Deviations from the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
such as corporate Does the company make reference to international standards or guidelines for the preparation of reports, such as corporate social responsibility reports, which disclose non-financial information about the company? Does the company make reference to international standards or guidelines for the preparation of reports, such as corporate social responsibility reports, which disclose				Report.

Evaluation Item	Implementation Status	Implementation Status	Implementation Status
	Yes	No	Abstract Illustration
non-financial information about the company?
If the Company has established the corporate social responsibility principles based on "the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies," please describe any discrepancy between the corporate social responsibility principles and the corporate social responsibility principles. If the Company has established the corporate social responsibility principles based on "the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies", please describe any discrepancy between the Principles and the implementation: The Companyhas a "Code of Practice on Corporate Social Responsibility" and has implemented it accordingly.
7. Other important information to facilitate better understanding of the company's corporate social responsibility Other important information to facilitate better understanding of the company's corporate social responsibility practices: (i) Social welfare. The Company participated in charitable donations and philanthropic activities, and the related donations in 2020 amounted to approximately NT$296,000, as listed below. The Interior Design Association of the Republic of China, the Love Sharing Charity Association, Tunghai University, the Friends of the Taoyuan City Police Association, and the Taoyuan Renyou Love Home. (2) Industry-academic cooperation. Each year, we provide summer internship opportunities for university students to accumulate work experience in the society, practice interpersonal interaction, and learn practical knowledge and work skills. 2020 internships were arranged for one student from the Department of International Business and Trade of Tunghai University to study in the Research and Development Division of the head office. The intern will be placed in the Research and Development Division of the Head Office. (3) Stakeholder communication channels and response methods.

Evaluation Item	Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Implementation Status
		Yes		No	Abstract Illustration
The Company has established communication channels with stakeholders and set up a stakeholder area on the Company's website to publicize various stakeholder contact information and e-mails, and to respond appropriately to important CSR issues of concern to stakeholders. Stakeholder communication reports are disclosed as follows. Interested parties Prioritizedissues Communicationchannels,responses, and communication frequency Shareholders and investors 1.Corporate governance 2.Sustainable development strategies 3. Risk management 4.Participation of shareholders 5.Operation performance 1.Suitable contact window(s) for the investors and relevant interested parties, and exclusive e-mail of the spokesperson, acting spokesperson, and investors. 2.Disclosure of the financial information on the Public Information Post System and the Company’s official website on time in accordance with the competent authority’s laws and regulations. 3.At least two legal person briefings per year with an interval of more than three months in between, offering sufficient financial information for the investors. 4.Contact window: Spokesperson (e-mail:[email protected]) Employees 1.Employee welfare 2.Employee evaluation mechanism 3.Operation performance 4.Employee-mana 1.Announcement via the internal website or internal e-mail: Announcement of the various employee welfare (health check-us, group insurance, etc.), welfare committee information, important operation information, educational training information, annual performance management operations, etc. on an irregular basis. 2.The Company’s employees can contact the supervisors or General Manager directly via e-mail, phone call, or in person. An employee complaint email is provided. 3.A labor-management meeting is convened every three months in order to promote and coordinate labor-management relationship, achieve labor-management cooperation, and
Interested parties	Prioritizedissues		Communicationchannels,responses, and communication frequency
Shareholders and investors	1.Corporate governance 2.Sustainable development strategies 3. Risk management 4.Participation of shareholders 5.Operation performance		1.Suitable contact window(s) for the investors and relevant interested parties, and exclusive e-mail of the spokesperson, acting spokesperson, and investors. 2.Disclosure of the financial information on the Public Information Post System and the Company’s official website on time in accordance with the competent authority’s laws and regulations. 3.At least two legal person briefings per year with an interval of more than three months in between, offering sufficient financial information for the investors. 4.Contact window: Spokesperson (e-mail:[email protected])
Employees	1.Employee welfare 2.Employee evaluation mechanism 3.Operation performance 4.Employee-mana		1.Announcement via the internal website or internal e-mail: Announcement of the various employee welfare (health check-us, group insurance, etc.), welfare committee information, important operation information, educational training information, annual performance management operations, etc. on an irregular basis. 2.The Company’s employees can contact the supervisors or General Manager directly via e-mail, phone call, or in person. An employee complaint email is provided. 3.A labor-management meeting is convened every three months in order to promote and coordinate labor-management relationship, achieve labor-management cooperation, and

Evaluation	Item	Implementation Status	Implementation Status	Implementation Status	Implementation Status
		Yes		No	Abstract Illustration
	gement relationship		prevent various labor problems. 4.Contact window: Ms. Yang, Management Deparmtent (e-mail:[email protected])
Customers	1.Product quality 2.After-sales services		1. A dealer meeting is held every half a year to establish a good interactive relationship with the dealers. Product and consumers’ feedbacks are collected in the dealer meeting. 2.The Sales Department establishes a timely feedback mechanism of the customers and collects all feedbacks. 3.Diversified communication channels and customer satisfaction survey on the website are provided. 4.“Sanitar Helper” service for repair is provided to the consumers 360 days, from 9 AM to 9PM. As long as the defect is not caused by human factors, Sanitar Helper will provide on-site service during the warranty term of the product. 5. Contact window: Ms. Yang, Sales Department (e-mail: [email protected])`、` Mr. Tu, Customer Service Department (e-mail:[email protected]) Customer service hotline 0800-001-885 & 0800-655-088
Suppliers	1.Supplier management 2.Stable supply		1.A supplier meeting is held every half a year. The “Supplier Management Measure” is set for a bidirectional dialogue with the suppliers. 2.Contact window: Ms.Huang, Material Department (e-mail:[email protected])

(6) Implementation of Ethical Corporate Management and Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons

Evaluation Item			Implementation Status	Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
1. Establishment of ethical corporate management policies and programs (1) Does the company establish the ethical corporate management policies approved by the Board and declare the policies and procedures in its guidelines and external documents, as well as the commitment from its board to implement the policies? (1) Does the company establish the ethical corporate managementpolicies	✓ ✓		(1) The Company has established the “Ethical Operating Procedures and Conduct Guideline” which was approved by the Board. It is explicitly stated in this operating procedures and conduct guideline that the Board and the management shall proactively implement the ethics policies and shall execute them in internal management and external business activities. The ethical operation policies shall be explicitly disclosed in the Company’s official website and the annual report, allowing the suppliers, customers, and other business-related institutions and/or personnel can clearly understand the Company’s ethical operation ideals. It has specific regulations for the Company’s employees when executing their operations. When signing contracts, whether by the Company or its subsidiaries, it shall be based on the principles of ethics and mutual benefits. The contract shall be fulfilledproactively.	No material difference was found. No material difference was found.

100

Evaluation Item			Implementation Status	Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
approved by the Board and declare the policies and procedures in its guidelines and external documents, as well as the commitment from its board to implement the policies? (2) Does the company establish assessment mechanism for the risk of unethical conducts, regularly analyze and assess the operating activities with higher risk of unethical conducts in its business scope, and establish appropriate precautions against high-risk(2)Does the	✓		(2) The Company has assigned the Finance Department to be the unit in charge (hereinafter referred to as the “Unit”) under the Board of Directors. Sufficient resources and suitable staff shall be allocated to conduct the revision, execution, explanation, and consultation of the “Ethical Operating Procedures and Conduct Guideline”, as well as the archiving of the reports and other supervisions. Preventive measures for the following behaviors and conducts shall be covered: 1.Bribery and bribery acceptance. 2. Illegal political contributions. 3. Unappropriate charity donation or sponsor. 4.Provision or acceptance of inappropriate gifts, treatment, or other inappropriate benefits. 5. Infringement of trade secrets, trademark rights, patent rights, copyrights, and other intellectual property rights. 6. Engagement in acts of unfair competition.	No material difference was found.

101

Evaluation Item			Implementation Status	Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
company establish assessment mechanism for the risk of unethical conducts, regularly analyze and assess the operating activities with higher risk of unethical conducts in its business scope, and establish appropriate precautions against high- potential unethical conducts or listed activities stated in Article 2, Paragraph 7 of the Ethical Corporate Management Best potential unethical conducts or listed activities stated in Article 2, Paragraph 7 of the Ethical			7.Direct or indirect damages of the products and services caused to the rights, health and safety of consumers or other interested parties in the stage of R&D, procurement, manufacturing, supply, or sales. (3) In addition to the establishment of the “Ethical Operating Procedures and Conduct Guideline”, an audit mechanism is set by the internal audit unit to establish an effective internal control system. The Company’s dedicated unit shall prepare a report of ethical operations every year and submit it to the Board for review and modification in order to prevent business activities with risks of unethical behavior.

102

Evaluation Item			Implementation Status	Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
Corporate Management Best-Practice Principles for TWSE/TPEx Practice Principles for TWSE/TPEx Listed Companies? (3) Does the company establish policies to prevent unethical conduct with clear statements regarding relevant procedures, (3) Does the company establish policies to prevent unethical conduct with clear statements regarding relevant procedures, guidelines of conduct, punishment for violation, rules of appeal, and the

103

Evaluation Item			Implementation Status	Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
commitment to implement the policies?
2. Fulfill operations integrity policy (1) Does the company evaluate business partners' ethical records and include ethics-related clauses in business contracts? contracts? (2) Does the company have a dedicated unit under the Board of Directors to promote ethical business practices and report regularly (at least once a year)to the Board of	✓ ✓ ✓		(1) Before any business activities with important customers or suppliers, an assessment is needed on the first hand. The engagement of any business activities shall be conducted in a fair and transparent manner, and contracts shall be complied with. The rights and obligations of both parties shall be stated in the contract in order to prevent any unethical behaviors or conducts. (2) The responsible unit for the promotion of ethical operations is the Finance Department. It is in charge of the formulation and revision of the ethical operation guideline and the supervision of the implementation of ethical operation policies. It shall report the execution status to the Board on a regular basis every year. The execution status of	No material difference was found. No material difference was found. No material difference was found.

104

Evaluation Item			Implementation Status	Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
Directors on its ethical business policies and programs to prevent unethical practices and (at least once a year) to the Board of Directors on its ethical business policies and programs to prevent unethical practices and Supervisor their implementation? (3) Does the company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it? (4)Has the company put inplace	✓ ✓		2020 was reported to the Board on Dec 24th, 2020. (3) It is explicitly indicated in the “Ethical Operating Procedures and Conduct Guideline”, the “Board Meeting Rules”, and the “Ethical Conducts and Behaviors Guideline for the Directors, Supervisors, and Managers” the rules of avoidance and description when there is a conflict of interest of the directors, supervisors, managers, and other interested parties. (4) The Company shall establish an effective accounting system and internal control system based on the regulations stipulated by the competent authority and shall make appropriate reviews and revisions on a regular basis depending on the necessities in order to ensure the effectiveness of the system design and continuous operations. The audit unit shall formulate audit plans based on the self-assessment of the internal audits and internal controls and shall check the compliance with the plan toprevent unethical behaviors. An audit report shall	No material difference was found. No material difference was found.

105

Evaluation Item			Implementation Status	Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
an effective accounting system and internal control system for the implementation of ethnical (4) Has the company put in place an effective accounting system and internal control system for the implementation of ethnical management, and has the internal audit unit prepared an audit plan based on the assessment results of the risk of unethical (4) Has the company put in place an effective accounting system and internal control system for the implementation of			be prepared and submitted to the Board with an internal control system statement. (5) Regarding the 2020 internal educational training of ethical operations, the Chairman of the Board conducted advocacy training to all primary supervisors of every department, with a total of 30 attendees. Regarding the external training, it was entrusted to Futures and Securities Exchange in which a lecture was conducted to the Board members and the managers, with a total of 36 attendees.

106

Evaluation Item			Implementation Status	Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
ethnical management, and has the internal audit unit prepared an audit plan based on the assessment results of the risk of unethical conduct, and checked compliance with the unethical conduct prevention program accordingly, or appointed a CPA to carry out the audit? (5) Does the company regularly hold internal and external educational trainings on operational integrity?
3. Operation of Company's Integrity Channel (1) Does the company establish both a reward/punishment	✓		(1) To implement ethical operation policies and to prevent any unethical behaviors, the Company has established a “whistle-blower system” that encourages internal and	No material difference was found.

107

Evaluation Item			Implementation Status	Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
system and an integrity hotline? Can the accused be reached by an appropriate person for follow-up? Can the accused be reached by an appropriate person for follow-up? (2) Does the company establish standard operating procedures for confidential reporting on investigating accusation cases? (3) Does the company provide proper whistleblower protection?	✓ ✓		external personnel to report unethical or inappropriate behaviors. The reporting and reward system is explicitly stated in the “Ethical Operating Procedures and Conduct Guideline”. Exclusive personnel will be assigned to the reported subject. Reports made in the following ways: TEL for Reporting: 02-8512-3712 Reporting e-mail:[email protected] Mail address: 7th Floor, No. 111-8, Xingde Road, Sanchong District, New Taipei City, ReportingMailbox, Finance Department of Sanitar Co., Ltd. The Company has also established an Interested Party Section in the Company’s official website where complaint and response channels for different interested parties can be found. (2) In the “Ethical Operating Procedures and Conduct Guideline”, the Company has established the standard operating procedures of the investigation when receivinga report,	No material difference was found.

108

Evaluation Item			Implementation Status	Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
			the subsequent measure after the investigation is completed, and the relevant confidentiality mechanism. An appropriate report channel is provided, and the reporter’s identity and the content shall be kept confidential. (3) The Company shall keep the reporter’s identity and the subject being reported confidential, as well as the content of the reporting, during the investigation period. It shall guarantee and protect the reporter not to be mistreated due to the action.	No material difference was found.
4. strengthening information disclosure Does the company disclose its ethical corporate management policies and the results of its implementation on the company's website and MOPS? Does the company disclose its ethical corporate	✓		An “Investor Section” is established on the Company’s official website. The content of the ethical operations and other relevant information are disclosed. Corporate governance information can also be found in the Public Information Post System.	No material difference was found.

109

==> picture [746 x 469] intentionally omitted <==

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

Im lementation Status Deviations from the
p
Ethical Corporate
Management
Evaluation Item Best-Practice Principles
Yes No Abstract Illustration
for TWSE/TPEx Listed
Companies and
Reasons
management policies and the
results of its implementation
on the company's website and
MOPS?
If the company has its own code of ethics in accordance with the "Code of Conduct for Listed Companies", please describe the differences
between its operation and the code.
The Company has established and implemented the "Procedures and Conduct Guidelines for Integrity Management" and the
o eration is no different from the established uidelines.
p g
Other important information to help understand the company's integrity operation: (e.g., the company reviews and amends its code of
conduct for integrity management, etc.)
1. The Company strictly follows the Company Act, the Securities and Exchange Act, the regulations related to listing on the stock exchange, or
other laws and regulations related to business practices as the basis for honest management.
The "Rules of Procedures of the Board of Directors" of the Company provides for a system of recusal of directors' interests. Any person who has
an interest in a proposal listed by the Board of Directors or the legal entity he/she represents, which may be harmful to the Company's
interests, may present his/her opinion and answer questions, but may not join the discussion or vote.
3. The Company has a "Code of Ethical Conduct for Directors, Supervisors and Managers" to guide the ethical conduct of the Company's
directors, supervisors and managers and to enhance the understanding of the Company's ethical standards among the Company's
stakeholders.
The Company's "Regulations for the Prevention of Insider Trading" stipulate that directors, supervisors, managers and employees shall not
disclose material internal information known to them to others, nor shall they ask for or collect material internal information not related to their
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110

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from the Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed Companies and Reasons
	Yes	No	Abstract Illustration
duties from those who know material internal information of the Company, nor shall they disclose to others material internal information of the Companynot known to them for thepurpose of conductingbusiness.

111

(7) If a company has a code of corporate governance and related regulations, it should disclose how to inquire about them
The Company has established a code of corporate governance and related
regulations, which are disclosed in the "Corporate Governance" and Public Information Observation Post System in the "Investor Zone" of the Company's website.
(8) Other important information that may be disclosed to enhance understanding of corporate governance operations
2020 Directors and Supervisors for Corporate Governance Related Education

Job title	Name	Date	Organizer	Course	Hours
Chairman of Board	Shaw Jin-Siang	2020.03.16	Taiwan Listed Company Association	Environmental Protection in Taiwan	2.0
		2020.06.09	Securities and Futures Institute	The Latest Practical Development of Insider Trading in our Country and Countermeasures for Corporate Prevention and Control	3.0
		2020.06.16	Taiwan Listed Company Association	Taiwan’s Corporate Governance in the Post-pandemic Period	2.0
		2020.07.15		The Legal Environment Faced by Taiwanese Enterprises’ Business Operations in the American Market	2.0
		2020.08.05	Securities and Futures Institute	How to Strengthen Corporate Governance and Create Value-addition for the Enterprises through Corporate Governance Assessment	3.0
Director	Chang Yon-Nang	2020.06.09	Securities and Futures Institute	The Latest Practical Development of Insider Trading in our Country and Countermeasures for Corporate Prevention and Control	3.0
		2020.09.04		An Exploration of the Remuneration of Employees and Directors – from the Revised Article 14 of Securities and Exchange Act	3.0
Director	Tsai Min-Shi	2020.06.09	Securities and Futures Institute	How to Strengthen Corporate Governance and Create Value-addition for the Enterprises through Corporate Governance Assessment	3.0
		2020.08.05		The Latest Practical Development of Insider Trading in our Country and Countermeasures for Corporate Prevention and Control	3.0
Director	Yu Orry	2020.06.09	Securities and Futures Institute	How to Strengthen Corporate Governance and Create Value-addition for the Enterprises through Corporate Governance Assessment	3.0
		2020.08.05		How to Strengthen Corporate Governance and Create Value-addition for the Enterprises through Corporate Governance Assessment	3.0
Independent Director	Chen Shih-Xiong	2020.03.16	Republic of China	3/16 (Taipei) Declaration tips for Income Tax for Profitable Businesses and FAQ	7.0

112

			Certified Public Account Association
Independent Director	Hsu Fayu	2020.06.09	Securities and Futures Institute	The Latest Practical Development of Insider Trading in our Country and Countermeasures for Corporate Prevention and Control	3.0
		2020.08.05		How to Strengthen Corporate Governance and Create Value-addition for the Enterprises through Corporate Governance Assessment	3.0
Supervisor	Lee Wen-yao	2020.06.09	Securities and Futures Institute	The latest practical development of China's insider trading and the way to prevent and respond to enterprises	3.0
		2020.08.05		How to Strengthen Corporate Governance and Create Value-addition for the Enterprises through Corporate Governance Assessment	3.0
Supervisor	Lin Guo-Hua	2020.06.09	Securities and Futures Institute	The Latest Practical Development of Insider Trading in our Country and Countermeasures for Corporate Prevention and Control	3.0
		2020.08.05		How to Strengthen Corporate Governance and Create Value-addition for the Enterprises through Corporate Governance Assessment	3.0
Supervisor	Liang Hsin-yong	2020.06.09	Securities and Futures Institute	The Latest Practical Development of Insider Trading in our Country and Countermeasures for Corporate Prevention and Control	3.0
		2020.08.05		How to Strengthen Corporate Governance and Create Value-addition for the Enterprises through Corporate Governance Assessment	3.0

2. 2020 Senior Corporate Governance Officer's Corporate Governance Related Education

Jon title	Name	Date	Organizer	Course	Hours
Corporate Governance Supervisor	Chen Yu-chuan	From 2020.03.24 to 2020.03.25	Securities and Futures Institute	Corporate Governance Executive Practice Seminar for Directors, Supervisors (Including Independent Directors) - Taipei Class	12.0
		2020.06.09		The Latest Practical Development of Insider Trading in our Country and Countermeasures for Corporate Prevention and Control	3.0

113

		2020.08.05		How to Strengthen Corporate Governance and Create Value-addition for the Enterprises through Corporate Governance Assessment	3.0

3. 2020 Manager's further education on corporate governance

Jon title	Name	Date	Organizer	Course	Hours
General Manager	Chen Wei-chi	2020.06.09	Securities and Futures Institute	The Latest Practical Development of Insider Trading in our Country and Countermeasures for Corporate Prevention and Control	3.0
Deputy General Manager	Yan Wen-hong	2020.06.09	Securities and Futures Institute	The Latest Practical Development of Insider Trading in our Country and Countermeasures for Corporate Prevention and Control	3.0
CEO	Gu Fon-guei	2020.06.09	Securities and Futures Institute	The Latest Practical Development of Insider Trading in our Country and Countermeasures for Corporate Prevention and Control	3.0
CFO	Chen Yu-chuan	From 2020.08.13 to 2020.08.14	Accounting Research and Development Foundation	Continuing Education Course for Accounting Supervisors of the Issuer's Securities Firms and Stock Exchanges	12.0

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(9) Internal control system implementation status
Statement of Internal Control

Sanitar Co., Ltd.

Statement of Internal Control System

Date: March 9, 2021

Based on the results of our self-assessment, we declare that our internal control system for the year ended December 31, 2020 is as follows.
The Company recognizes that it is the responsibility of the Board of Directors and the Manager to establish, implement and maintain an internal control system, and that the Company has established such a system. The purpose of the system is to provide reasonable assurance of the effectiveness and efficiency of operations (including profitability, performance and safety of assets), reliability of reporting, timeliness, transparency and compliance with relevant regulations and relevant laws and regulations.
No matter how well designed, an effective internal control system can only provide reasonable assurance that the above three objectives will be achieved; moreover, due to changes in circumstances and conditions, the effectiveness of the internal control system may change accordingly. However, the Company's internal control system has a self-Supervisoring mechanism and once deficiencies are identified, the Company will take corrective action.
The Company determines the effectiveness of the design and implementation of the internal control system in accordance with the judgment items of the effectiveness of the internal control system stipulated in the "Guidelines Governing the Establishment of Internal Control Systems by Public Companies" (hereinafter referred to as the "Guidelines"). The judgment items of the internal control system adopted in the "Guidelines" are divided into five components based on the management control process: 1. control environment, 2. risk assessment, 3. control operations, 4. information and communication, and 5. Supervisoring operations. Each component includes a number of items. Please refer to the "Guidelines for Handling" for the aforementioned items.
The Company has adopted the above internal control system judgment items to evaluate the effectiveness of the design and implementation of the internal control system.
Based on the results of the preceding evaluation, the Company believes that the design and implementation of the Company's internal control system (including supervision and management of subsidiaries) as of December 31, 2020, including the understanding of the extent to which operational

115

effectiveness and efficiency objectives are achieved, and the reporting of such internal control system is reliable, timely, transparent and in compliance with relevant regulations and relevant laws and regulations, is effective, and that it can reasonably ensure The Company's internal control system is designed and implemented in a manner that reasonably ensures the achievement of the above objectives.

This statement will become the main content of the Company's annual report and public statement, and will be made public. If any of the above-mentioned contents are disclosed in a false or concealed manner, the Company will be subject to legal liability under Article 20, Article 32, Article 171 and Article 174 of the Securities and Exchange Act.
This statement was approved by the Board of Directors' Meeting held on March 09, 2021. Of the 6 directors present, 0 held opposing views and the rest agreed to the contents of this statement.

Sanitar Co., Ltd.

Chairperson: HSIAO, CHUN-HSIANG Signature

Signed CHEN, WEI-CHIH General Manager

116

If an accountant is engaged to review the internal control system, the accountant's review report shall be disclosed.

Not applicable.

(10) In the most recent year and as of the date of the annual report, the company and its internal personnel have been punished by law, or the company has punished its internal personnel for violating the provisions of the internal control system, and the result of the punishment may have a significant impact on the shareholders' equity or securities price, the content of the punishment, the main deficiencies and improvements should be listed.
- No such case.
(11) Significant resolutions of the shareholders' meeting and the board of directors for the latest year and up to the date of printing of the annual report
Si nificant Resolutions of Shareholders' Meetin and Im lementation g g p

Meeting Date	Cause	Important Resolutions	Execution
2020.05.28	Acknowledgment: 1. 2019 Business report and financial report 2. 2019 Surplus distribution Motions of discussion: 1. Revision of the provisions of the “Articles of Association”. 2. Revision of the provisions of the " Shareholders' Meetings Regulations".	All proposals were approved by the shareholders present. All proposals were approved by the shareholders present.	1. All relevant forms and tables were submitted to the competent authority in accordance with the Company Act and other relevant laws for revision and announcement declaration. 2. July 7th, 2020 is set as the dividend base date and July 31st, 2020 as the dividend payment date. As the Company has repurchased the treasury shares, it has affected the number of outstanding shares. The surplus was adjusted, resulting in a distribution of cash dividend of NT 1.71235917 per share. 1.Registration approved by the MOEA on July 3rd, 2020, and disclosed on the Company’s official website.

117

2.Announced on the Public Information Post System and the Company’s official website on May 28[th] , 2020, and executed by following the revised provisions.

2. Im ortant Resolutions of the Board of Directors p

Meeting date	Motion	Important resolutions
2020.02.27	1.Revision of the provisions of the “Articles of Association”. 2. Revision of the provisions of the " Shareholders' Meetings Regulations". 3. Revision of the provisions of “Ethical Operating Procedures and Conduct Guideline”. 4. 2019 Remuneration distribution for the employees, the directors, and the supervisors. 5. 2019 Business report and financial report 6. 2019 Surplus distribution 7. Formulation of “Internal Control System Announcement”. 8. Assessment of the independence and competence of the public certified accountants. 9. Review of the directors and supervisors’ 2019 continuing education status and 2020 continuing education plans. 10. Convention of 2020 shareholders’ general meeting.	As consulted by the Chairman, all proposals were approved by the directors present without objection.
2020.03.27	1. Revision of the provisions of the “Articles of Association”. 2. Formulation of implementation of the first repurchase of the Company’s shares. 3. Convention of 2020 shareholders’ general meeting. 4. Kaohsiungbusiness location housinglease.	As consulted by the Chairman, all proposals were approved by the directors present without objection.
2020.05.06	1. Revision of the provisions of “Measures for the Transfer of the First-time Repurchase of the	As consulted by the Chairman, allproposals were approved

118

Meeting date	Motion	Important resolutions
	Shares to Employees”. 2. Revision of the provisions of the “Guideline of Corporate Governance Practices”. 3. Revision of the provisions of “Regulations of Corporate Social Responsibility Practices”. 4. Liability Insurance for the Directors, Supervisors, and Key Employees. 5. Financial institutions’ credit limit. 6. Endorsement guarantee for Vietnam Caesar Sanitary Wares Joint Stock Company (subsidiary). 7. Revision of the Company’s internal control system and internal auditpractice rules.	by the directors present without objection.
2020.06.09	1. Establishment of the cash dividend distribution base date and cash dividend payment date for the year 2020. 2. Revision of the 2019 remuneration payment of the directors and supervisors. 3. Revision of the 2019 remuneration payment for the employees. 4. Revision of the 2019 operating bonus payment. 5. Revision of CFO’s salary adjustment.	Except for the directors and supervisors whose personal interests are involved in the motion who withdrew during the discussion and resolution, the other directors present at the meeting approved the proposals without objection after being consulted by the Chairman. The rest of the proposals, after being consulted by the Chairman, were approved by all directorspresent.
2020.08.05	1. Revision of the provisions of “Board Meeting Regulations”. 2. Revision of the provisions of “Ethical Conducts and Behaviors Guideline for the Directors, Supervisors, and Managers”. 3. Revision of the provisions of “Measures for the Transfer of the First-time Repurchase of the Shares to Employees”. 4. Endorsement guarantees for Vietnam Caesar Sanitary Wares Joint Stock Company (subsidiary). 5. Kaohsiungexhibition center construction and	As consulted by the Chairman, all proposals were approved by the directors present without objection.

119

Meeting date	Motion	Important resolutions
	decoration. 6. Recruitment of a manager for Product R&D Center. 7. Financial institutions’ credit limit.
2020.11.04	1. Revision of the provisions of the " Shareholders' Meetings Regulations". 2. Revision of the provisions of “Director and Supervisor Election Guideline”. 3. Revision of the provisions of “Regulations for the Scope of Duties of Independent Directors”. 4. Establishment of “Risk Management Policy and Procedures”. 5. Investment in a newly established subsidiary in Taoyuan. 6. Organizational structure adjustment.	As consulted by the Chairman, all proposals were approved by the directors present without objection.
2020.12.24	1. Revision of the provisions of the “Articles of Association”. 2. Revision of the provisions of “Procedures for Loaning Funds to Third Party”. 3. Revision of the provisions of “Procedures for Loaning Funds to Third Party”. 4. Revision of the provisions of “Operating Procedures for Endorsement Guarantee”. 5. Revision of the provisions of “Board Performance Assessment Rules”. 6. Revision of the provisions of “Manager’s Remuneration Rules”. 7. Land and real-estate asset sales in Toufen City, Miaoli County. 8. Removal of the non-competition clause for managers. 9. Cash increase for Kaisheng Sanitary Ware Co., Ltd. (subsidiary). 10. Change of internal audit supervisor. 11. Review of the Company’s directors’ and supervisors’ performance in 2020 and their performance goals and remuneration in 2021. 12. Review of the Company’s managers’	Motion 11: Except for the directors and supervisors whose personal interests are involved in the motion who withdrew during the discussion and resolution, the other directors present at the meeting approved the proposals without objection after being consulted by the Chairman. The rest of the proposals, after being consulted by the Chairman, were approved by all directors present.

120

Meeting date	Motion	Important resolutions
	performance in 2020 and their performance goals and remuneration in 2021. 13. Review of the 2020 year-end bonus distribution. 14. Financial institutions’ credit limit. 15. Formulation of the Company’s 2021 annual operation plan and budgeting. 16. Formulation of the Company’s 2021 audit plans. 17. Special bonus distribution.
2021.03.09	1. 2020 Remuneration distribution for the employees, the directors, and the supervisors. 2. 2019 Business report and financial report 3. 2020 Surplus distribution 4. Formulation of the “Regulations on the Audit Committee Organization”. 5. Revision of the provisions of “Regulations on the Salary and Remuneration Committee Organization”. 6. Revision of the provisions of the “Nomination Committee Organization Rules” 7. Formulation of “Internal Control System Announcement”. 8. Re-election of directors. 9. Establishment of the nomination period, number of nominations, and responsible unit to handle the matters related to the candidates of directors (including independent directors). 10. Nomination of candidates for director (including independent director) 11. Removal of the non-competition clause for new managers. 12. Convention of 2020 shareholders’ general meeting. 13. Assessment of the independence and competence of the public certified accountants. 14. Revision of the 2020 remuneration payment of the directors and supervisors.	Motion 8/14/16: Except for the directors and supervisors whose personal interests are involved in the motion who withdrew during the discussion and resolution, the other directors present at the meeting approved the proposals without objection after being consulted by the Chairman. As consulted by the Chairman, all proposals were approved by the directors present without objection.

121

Meeting date	Motion	Important resolutions
	15. Revision of the 2020 remuneration payment for the employees. 16. Revision of the 2020 operating bonus payment. 17. Review of the directors and supervisors’ 2020 continuing education status and 2021 continuing education plans. 18. Financial institutions’ credit limit.

(12) For the most recent year and up to the printing date of the annual report, if the directors or supervisors have dissenting opinions on important resolutions passed by the board of directors and there are records or written statements, the main contents of which are:

No such case.

(13) Summary of the resignations and dismissals of the Company's Chairperson, General Manager, Accounting Officer, Treasurer, Chief internal auditor, Senior Corporate Governance Officer, and Head of Research and Development for the most recent year and up to the date of printing of the annual report

				March 31, 2021
Job Title	Name	Date of arrival	Termination Date	Reasons for resignation or dismissal
Internal Chief internal auditor	Mr. Jiang Zhengchang	2021.03.15	2020.12.18	Career Planning Resignation

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

Unit: NT$ thousands

Name of Accountin g Firm Deloitte Taiwan	Accou ntant's Last Name	Audit Public expens e	Non-audit fee	Non-audit fee	Non-audit fee	Non-audit fee	Non-audit fee	During the accounting audit	Remark
			System Design	Business Registrati on	Human Resource s	Other	Subtot al
	Connie So	2,400	0	0	0	200	200	2020.01.0 1	The non-audit public

122

	Weng Bo Ren							Until 2020.12.3 1	expense represents the establishment transfer pricing report public expense.

(1) If the amount of non-audit fees paid to the certified public accountant, the certified public accountant's firm and its affiliates is more than one-fourth of the audit fees, the amount of audit and non-audit fees and the content of non-audit services shall be disclosed.

No such case.

(2) If you change your accounting firm and the audit fee paid in the year of change is less than the audit fee paid in the year before the change, you should disclose the amount of the audit fee before and after the change and the reasons for the change.

No such case.

(3) If the audit fee is reduced by 10% or more from the previous year, the amount, percentage and reasons for the reduction shall be disclosed. No such case.
Replacement of CPA No such case.
Where the company's chairperson, president, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its CPAs or at an affiliated enterprise of such accounting firm No such case.

123

Any transfer of equity interests and/or pledge of or change in equity interests (during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report) by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report
(1) Changes in shareholdings of directors, supervisors, managers and substantial shareholders

Job Title	Name	2020	2020	For the year ended March 29, 2021	For the year ended March 29, 2021
		N u m b e r o f s h a re s h el d I n c r e a s e ( d e c r e a s e )	N u m b e r o f pledged shares I n c r e a s e ( d e c r e a s e )	N u m b e r o f s h a re s h el d I n c r e a s e ( d e c r e a s e )	N u m b e r o f pledged shares I n c r e a s e ( d e c r e a s e )
Chairperson	HSIAO, CHUN-HSIANG	0	0	0	0
Directors	CHANG, YUNG-NAN	0	0	0	0
Directors	TSAI, MING-HSI	2,000	0	0	0
Directors	YU, CHIH-HSIN	0	0	0	0
Independent Directors	CHEN, SHIH-HSIUNG	0	0	0	0
Independent Directors	HSU, FENG-YUAN	0	0	0	0
Supervisor	LI, WEN-YAO	0	0	0	0
Supervisor	LIN, KUO-HUA	0	0	0	0
Supervisor	LIANG, HSIN-YUNG	0	0	0	0
General Manager	CHEN, WEI-CHIH	1,000,000 (1,134,000)	0	0	0
Deputy General Manager	YEN, WEN-HUNG	3,238	0	0	0
Chief Operating Officer	KU, FENG-KUEI	0	0	0	0
Treasurer	CHEN, YU-CHUAN	0	0	0	0

2 The erson to whom the e uit is transferred is a related art . ( ) p q y p y

First Name	Reasons for Transfer of Equity Interests	Transaction Date	Trading Relatives	Relationship between the counterparty and the company, directors, supervisors, managers and shareholders holding more than 10 percent of the shares	Number of shares	Trading Price
CHEN, WEI-CHIH	Gift	2020.12.11	Mei-Lin Yip	Couples	68,000	31.80
CHEN, WEI-CHIH	Gift	2020.12.11	Yu-Yuan Chen	Father and Son	66,000	31.80

124

(3) If the pledgor is a related party

No such case.

125

Relationship information, if among the 10 largest shareholders any one is a related party, or is the spouse or a relative within the second degree of kinship of another

Name	I SHAREHOLDI NG	I SHAREHOLDI NG	SHARES HELD BY SPOUSE, MINOR CHILDREN	SHARES HELD BY SPOUSE, MINOR CHILDREN	TOTAL SHAREHOLDI NG IN THE NAME OF OTHERS	TOTAL SHAREHOLDI NG IN THE NAME OF OTHERS	THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED TO EACH OTHER OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES.	THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED TO EACH OTHER OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES.	REM ARK
	Num ber of share s	Shareho lding Ratio	Num ber of share s	Shareho lding Ratio	Nu mbe r of shar es	Shareho lding Ratio	Name (or name)	Relation ships
HSIAO, CHUN-H SIANG	5,013 ,581	6.91	1,010 ,069	1.39	0	0	Tsai Tzu-chun	husban d and wife	None
							Cai Jieling	wife and sister
							TSAI, MING-HS I	wife's younge r brother
Tsai Tzu-chun	3,600 ,247	4.96	1,001 ,140 (Not e 1)	1.38	0	0	HSIAO, CHUN-H SIANG	husban d and wife	None
							Cai Jieling	Father and Daught er	None
							TSAI, MING-HS I	Father and Son	None
CHANG, YUNG-N AN	2,881 ,975	3.97	174,4 91	0.24	0	0	Zhang Yixin	Father and Son	None
LIN, KUO-HU A	2,572 ,574	3.54	685,4 09	0.94	0	0	None	None	None

126

Name	I SHAREHOLDI NG	I SHAREHOLDI NG	SHARES HELD BY SPOUSE, MINOR CHILDREN	SHARES HELD BY SPOUSE, MINOR CHILDREN	TOTAL SHAREHOLDI NG IN THE NAME OF OTHERS	TOTAL SHAREHOLDI NG IN THE NAME OF OTHERS	THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED TO EACH OTHER OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES.	THE NAMES AND RELATIONSHIPS OF THE TOP TEN SHAREHOLDERS WHO ARE RELATED TO EACH OTHER OR WHO ARE RELATED TO EACH OTHER AS SPOUSES OR SECOND DEGREE RELATIVES.	REM ARK
	Num ber of share s	Shareho lding Ratio	Num ber of share s	Shareho lding Ratio	Nu mbe r of shar es	Shareho lding Ratio	Name (or name)	Relation ships
Lee Kwok On	2,250 ,000	3.10	Data not available				None	None	None
Huang Yuezhao	2,243 ,538	3.09	0	0	0	0	None	None	None
Shinzon Lim	1,997 ,875	2.75	0	0	0	0	None	None	None
Cai Jieling	1,707 ,597	2.35	0	0	0	0	HSIAO, CHUN-H SIANG	elder sister's husban d	None
							Tsai Tzu-chun	Father and Daught er	None
							TSAI, MING-HS I	Siblings	None
TSAI, MING-HS I	1,573 ,195	2.17	495,0 67	0.68	0	0	HSIAO, CHUN-H SIANG	elder sister's husban d	None
							Tsai Tzu-chun	Father and Son	None
							CaiJieling	Siblings	None
Xinli Developm ent Co.	1,566 ,000	2.16	0	0	0	0	None	None	None

127

==> picture [483 x 394] intentionally omitted <==

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

THE NAMES AND
RELATIONSHIPS
OF THE TOP TEN
SHAREHOLDERS
TOTAL WHO ARE
SHARES HELD
I SHAREHOLDI RELATED TO
BY SPOUSE, REM
SHAREHOLDI NG IN THE EACH OTHER OR
MINOR ARK
NG NAME OF WHO ARE
CHILDREN
OTHERS RELATED TO
Name
EACH OTHER AS
SPOUSES OR
SECOND DEGREE
RELATIVES.
Num Num Nu
ber Shareho ber Shareho mbe Shareho
Name Relation
of lding of lding r of lding
(or name) ships
share Ratio share Ratio shar Ratio
s s es
Xinli
Developm
ent Co.,
CHANG,
Ltd. 1,300 Father
1.79 0 0 0 0 YUNG-N None
represent ,000 and Son
AN
ative:
Yixin
Zhang
----- End of picture text -----

Note 1: 950,000 shares of the delivery trust with reserved exercise rights.

The total number of shares and total equity stake held in any single enterprise by the company, its directors and supervisors, managerial officers, and any companies controlled either directly or indirectly by the company

	Units: Shares;%;December 31,2020	Units: Shares;%;December 31,2020	Units: Shares;%;December 31,2020	Units: Shares;%;December 31,2020	Units: Shares;%;December 31,2020	Units: Shares;%;December 31,2020
Investment Business (Note)	The Company invests		Directors, Supervisors, Managers and Investments in Direct or Indirectly Controlled Businesses		Integrated Investment
	Number of shares	Shareholdi ng ratio	Number of shares	Shareholdi ng ratio	Number of shares	Shareholdi ng ratio
Vietnam Caesar Sanitary Wares Joint Stock Co.	41,877,700	99.99	200	0	41,877,900	99.99
Kaisheng Sanitary Co., Ltd.	1,326,000	51.00	0	0	1,326,000	51.00

Note: Long-term investments accounted for by the equity method.

128

IV. Capital Overview

1. Capital and shares

(1) Source of Equity

Unit: NT$ thousands; thousands of shares

						Unit: NT$ thousands; thousands of shares	Unit: NT$ thousands; thousands of shares	Unit: NT$ thousands; thousands of shares
Year Month	Issue Price	Authorized share capital		Paid-in capital		Remark
		Number of shares	Amount	Numb er of shares	Amount	Share Capital Source	The use of property other than cash to offset the payment of shares	Others
Dec. 88	10	16,000	160,000	16,000	160,000	Cash capital increase of $105,000 thousand	None	Note 1
Oct 96	10	50,000	500,000	20,000	200,000	Surplus capital increase $40,000 thousand	None	Note 2
Dec. 98	10	50,000	500,000	50,000	500,000	Cash capital increase of $300,000 thousand	None	Note 3
Aug. '99	10	100,000	1,000,000	56,500	565,000	Cash capital increase $15,000 thousand Surplus capital increase $50,000 thousand	None	Note 4
Dec 99	25	100,000	1,000,000	64,500	645,000	Cash capital increase $80,000 thousand	None	Note 5
Oct. 102	27	100,000	1,000,000	72,600	726,000	Cash capital increase $81,000 thousand	None	Note 6

Note 1: Approval number: Ministry of Economic Affairs, January 04, 2000 (089) Business 148081 Note 2: Approval No.: Ministry of Economic Affairs, October 25, 2007, Economic and Social Affairs No. 09632946040

Note 3: Approval No.: Ministry of Economic Affairs, January 18, 2010, Economic and Commercial Affairs No. 09901011600

Note 4: Approval No.: Ministry of Economic Affairs, September 06, 2010, Economic and Commercial Affairs No. 09901201140

Note 5: Approval No.: Ministry of Economic Affairs, January 28, 2011, Economic and Commercial Affairs No. 10001021530

Note 6 ： Approval No.: FSC, September 11, 2013, FSC Certificate No. 1020037401, Ministry of Economic

129

Affairs, November 06, 2013, 10201226950

	Unit: Unit	Unit: Unit	Unit: Unit	Unit: Unit
Shares Species	Authorized Share Capital			R e m a r k
	Outstandingshares	Unissued shares	Total
Ordinary shares	72,600,000	27,400,000	100,000,000	Listing

Information about the Omnibus Reporting System: Not applicable.

(2) Shareholder Structure

		March 29, 2021	March 29, 2021	March 29, 2021	March 29, 2021	March 29, 2021
Shareholder Structure Quantity	Government Agencies	Financial Institutions	Other Legal Entities	Individuals	F o r e i g n Institutions and outsiders	Total
Number of people	0	3	26	4,236	27	4,292
Number of shares held	0	1,314,000	5,150,000	65,123,000	1,013,000	72,600,000
Shareholding Ratio	0.00	1.81	7.09	89.70	1.40	100.00

130

(3) Diversification of shareholding

Ordinary shares

March 29, 2021

Ordinary shares			March 29, 2021
Shareholding Classification	Number of Shareholders	Number of shares held	Shareholding ratio
1 to 999	333	40,021	0.06
1,000 to 5,000	3,092	6,177,193	8.51
5,001 to 10,000	436	3,517,176	4.85
10,001 to 15,000	103	1,355,000	1.87
15,001 to 20,000	70	1,298,542	1.79
20,001 to 30,000	68	1,762,046	2.43
30,001 to 50,000	65	2,540,275	3.50
50,001 to 100,000	30	2,038,877	2.81
100,001 to 200,000	38	5,197,101	7.15
200,001 to 400,000	30	8,078,084	11.12
400,001 to 600,000	4	1,933,950	2.66
600,001 to 800,000	2	1,344,409	1.85
800,001 to 1,000,000	4	3,630,107	5.00
1,000,001 or more	17	33,687,219	46.4
Total	4,292	72,600,000	100.00

2. Special Unit

The Company has not issued any preferred shares.

(4) List of major shareholders

Name, amount and percentage of shareholding of the top ten shareholders with a shareholding ratio of 5% or more.

Shares Name of Major Shareholders	Number of shares held	Shareholding Ratio
HSIAO,CHUN-HSIANG	5,013,581	6.91
Tsai Tzu-chun	3,600,247	4.96
CHANG,YUNG-NAN	2,881,975	3.97
LIN,KUO-HUA	2,572,574	3.54
Lee Kwok On	2,250,000	3.10
HuangYuezhao	2,243,538	3.09
Shinzon Lim	1,997,875	2.75
CaiJieling	1,707,597	2.35
TSAI,MING-HSI	1,573,195	2.17
Xinli Development Co.	1,566,000	2.16

131

(5) Stock price, net worth, earnings, dividends and related information per share for the last two years

for the last twoyears	for the last twoyears	for the last twoyears
Annual Project			108 years	2020s	Current year ending March 31, 110
per shar e Mar ket Price	Highest		40.45	35.70	35.70
	Min.		33.90	23.60	31.80
	Average		36.92	31.21	34.18
per shar e Net valu e	Before distribution		23.32	23.56	Not applicable (Note 2)
	After distribution		21.62	(Note 1)
per shar e Surp lus	Weighted average number of shares (in thousands)		72,600	72,290
	Earnings per share		2.48	3.04
per shar e Divi dend s	Cash dividends		1.7	2.0(Note 1)
	Grati s Issue	Surplus allotment of shares	0	0
		Capital Provident Fund Share Allotment	0	0
	Accumulated unpaid dividends		0	0
Inve stme nt Com pens ation Anal ysis	Principal to Benefit Ratio(Note 3)		14.89	10.27
	Principal-to-profit ratio(Note 4)		21.72	15.61
	Cash Dividend Yield (Note 5)		4.60%	6.41%

132

Note 1: The proposed distribution of earnings for 2020 has not yet been resolved by the shareholders' meeting.
Note 2: The financial information as of March 31, 2021 has not been reviewed by the accountants.
Note 3: Capital gain ratio = average closing price per share for the year / earnings per share.
Note 4: Principal-to-profit ratio = Average closing price per share for the year / Cash dividends per share.

Note 5: Cash dividend yield rate = Cash dividend per share / Average closing price per share for the year.

(6) Dividend Policy and Implementation Status
Company Dividend Policy

In addition to the Company Law and the Company's Articles of Incorporation, the Company shall distribute dividends to shareholders at a rate of not less than 50% of the current and future development plans, taking into account the investment environment, capital requirements and domestic and international competition, and taking into account the interests of shareholders; provided, however, that if the current after-tax profit is less than the current after-tax profit, the Company shall distribute dividends to shareholders at a rate of not less than 50% of the current after-tax profit. In addition, the Company shall distribute dividends to shareholders at a rate of not less than 50% of its net income for the current year, unless the distributable earnings for the current period is less than the net income for the current period. Dividends may be distributed in cash or in stock, with cash dividends not less than 10% of the total stock dividends, except when the stock dividends are less than $1 per share.

Circumstances of the proposed dividend distribution at the shareholders' meeting

The appropriation of the Company's 2020 earnings has been resolved by the Board of Directors on March 9, 2021, and it is proposed to distribute cash dividends to shareholders in the amount of NT$144,152,000, or NT$2.0 per share, and the Board of Directors will be authorized to set the basis date for dividend distribution after the shareholders' meeting.

If there is a significant change in the dividend policy, it should be stated No such case.
(7) Effect of the proposed gratis allotment of shares at the shareholders' meeting on the Company's operating results and earnings per share

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There is no plan to allocate shares without compensation during the year.

(8) Remuneration for employees, directors and supervisors
The percentage or range of remuneration for employees, directors and supervisors as set out in the Articles of Association

The Company should appropriate 2% to 5% of its annual net income before employees' compensation and directors' and supervisors' compensation to employees' compensation and not more than 2% to directors' and supervisors' compensation. However, if the Company still has accumulated losses (including the amount of adjustment to undistributed earnings), the amount of compensation should be reserved in advance.

The basis for estimating the amount of compensation for employees, directors and supervisors, the basis for calculating the number of shares for employee compensation distributed by stock, and the accounting treatment if the actual amount of distribution differs from the estimated amount.
The amount of compensation to employees, directors and supervisors is
estimated in accordance with the Company's Articles of Incorporation and the "Regulations Governing the Remuneration of Directors and Supervisors" and is calculated based on past experience and the amount that may be paid in the future. Any difference between the actual distribution amount and the estimated amount is accounted for as a change in accounting estimate and recorded as profit or loss in the following year.
The Board of Directors approved the distribution of remuneration
(1) The amount of employees' compensation and directors' and supervisors' compensation distributed in cash or stock. If the amount differs from the estimated amount of recognized expenses, the amount of the difference, the reason for the difference and the treatment of the difference should be disclosed.

Unit: NT$; shares

	be disclosed.	be disclosed.	be disclosed.	be disclosed.		Unit: NT$; shares	Unit: NT$; shares	Unit: NT$; shares
Date approve d by the Board	Employee Compensation				Director s' and Supervis ors' Remune ration	Whether there is a difference between the amount estimated in the year of expense recognition
	Cash Amount	Stock Amount	Number of Stocks	Total	Cash Amount	Differe nce	Reaso n	Handling situations
110.03.09	8,749,416	0	0	8,749,416	5,832,943	No difference	Not applicable	Not applicable

(2) The amount of employee compensation distributed in stock and its proportion to the aggregate of net income after tax and total employee

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compensation in the individual or individual financial statements for the period

Not applicable.

The actual distribution of compensation to employees, directors and supervisors in the previous year (including the number of shares distributed, the amount and the price of the shares), the difference between the distribution and the recognition of compensation to employees, directors and supervisors, and the amount of the difference, the reasons for the difference and the handling of the situation

Unit: NT$; shares

==> picture [482 x 165] intentionally omitted <==

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

Directors'
and
Whether there is a difference
Supervis
Employee Compensation in the recognition of
ors'
remuneration
Remuner
ation
Cash Differenc Handling situations
Cash Amount Stock Amount Number of Stocks Total Reason
Amount e
7,303,408 0 0 7,303,408 4,868,939 No difference Not applicable Not applicable
----- End of picture text -----

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(9) Buyback of the Company's shares

March 31, 2021

) Buyback of the Company's shares	March 31, 2021
Buyback period	First time
Purpose of buying back	Transfer of shares to employees
Buy Back Period	April 21, 2020 to May 26, 2020
Buyback interval price	NTD 19.00 to NTD 46.05
Type and number of shares bought back	Ordinary shares 524,000 shares
Amount of shares bought back	NT$15,674,348
Number of repurchases made as a percentage of the number of scheduled repurchases(%)	52.4%
Number of shares cancelled and transferred	-
Cumulative number of shares held bythe Company	Ordinary shares 524,000 shares
The cumulative number of shares held by the Company represents Total ratio of issued shares(%)	0.72%

Corporate Bonds

None.

Preferred Shares

None.

4. Global Depository Receipts

None.

5. Employee Stock Options

None.

Status of New Shares Issuance in Connection with Mergers and Acquisitions None.
Financing Plans and Implementation

As of the quarter ended the publication date of the annual report, the

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Company had not issued or private placement of marketable securities to obtain funds and had no plans to use such funds.

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V. Operational Highlights

1. Business Activities

(1) Business Scope
The main contents of the company's business
- (1) Ceramics and ceramic products manufacturing industry
- (2) Ceramic glassware wholesale industry
- (3) Kitchen, bathroom equipment installation engineering industry
- (4) Waterware material wholesale industry
- (5) Wholesale of furniture, bedding, kitchen appliances, and furnishings
- (6) Retailing of furniture, bedding, kitchenware and furnishings
- (7) Building Materials Retail
- (8) Copper rolling, wire drawing and extrusion industry
- (9) Building materials wholesale industry

2. Operating weight

Unit: NT$ thousands

			Unit: NT$	Unit: NT$
Annual Product Items	2019		2020
	Amount	Proportion (%)	Amount	Proportion (%)
Porcelain	1,142,763	48.94	1,124,375	48.76
Discharge Type	494,716	21.19	463,194	20.08
Electronic Automation	210,305	9.01	245,240	10.63
Bathroom Type	84,606	3.62	62,383	2.70
Other categories	402,536	17.24	411,329	17.83
Total	2,334,926	100.00	2,306,521	100.00

3. Current products (services) of the company

The company's main products are basins, toilets, water supply appliances, bathtubs, bath cabinets, and all kinds of bathroom peripherals and accessories, as well as providing bathroom equipment repair services.

New products (services) planned to be developed

The Company is a professional manufacturer of porcelain, faucets and bathtubs, with a diversified and complete product line, and expects to develop new products in the future as follows.

(1) Short-term plans

In response to the increasing shortage of water resources and the requirements of water conservation regulations, the Company has

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focused on the redesign and development of the toilet water circuit and continuously revised its online products so that they can meet the regulations of the Gold Level Water Conservation Label. In order to enhance product differentiation, we have (1) introduced ozone technology into our products to create an antibacterial and deodorizing bathroom environment by making use of the characteristics of ozone; (2) developed micro bubble function products to clean the skin deeply through micro bubbles smaller than capillary pores in the water, bringing users a different added value and experience; (3) introduced smart ion sensor technology, which is different from the general infrared (4) computer toilet seat series products and in the bathroom space, the use of plastic parts and accessories (hand-held shower, handrails ... etc.), gradually to the antibacterial certification application planning; product differentiation strategy, the introduction of more technology to enhance the added value of the product, through simple installation and use, fashionable and simple design, combined with the green and green technology. Through simpler installation and use, fashionable and simple design, combining the market trend of green energy, environmental protection and silver hair, and catering to the use habits of the consumer public, the product features are more layered and humane temperature. The projects currently under development cover the following

Water-saving toilets with no water ring encapsulated monobloc and split type
Toilet items that meet the needs of the construction site market
Urinal development of the characteristic shape
A variety of different characteristics of the faucet series
Public Health Products Combining Ozone Function
Bathroom products that meet the needs of silver-haired people
Lead-free frontier product development
Overall bathroom space storage, product design and planning
Bathroom & Cabinet Products
Long-lasting germicidal bath products
(2) Medium and long term plans

Using our existing process technology and experience, we will develop other bathroom-related products for other applications, and the products we plan to develop include

Green energy products for energy saving and environmental protection
Strengthen the silver hair family and electronic bathing equipment,

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and develop intelligent health care related products

  - Deepening Caesar Technology's bath and health management aspirations related products

  - High-end products for the middle and high-end market

(2) Industry Overview
Industry Status and Development

Although vaccine research and development is accelerated in various countries and vaccination is expected to commence in the second half of 2020, the initial number of vaccines is limited, virus mutations are frequent, and it will still take some time to achieve compliance with herd immunity. In the construction industry, there is an influx of rush jobs, and the completion rate of major public construction projects has exceeded a new high in more than a decade. In New Taipei City, Taoyuan City, Taichung City, Tainan City, and Kaohsiung City, there was a wave of home deliveries one after another, making the housing market transactions appear hot at the end of 2020. The sanitary porcelain manufacturing process has more than 30 stages, all of which have their own difficulties, any errors in any of the stages will produce defective products, yield control is extremely difficult, so the sanitary porcelain industry barriers to entry remain. At present, in addition to China, few new brands of sanitary equipment have been born in the past two decades, and almost no new equipment has been put into the domestic sanitary industry, which shows that the threshold for entry into the industry is still high.

The following is a description of the domestic and international industry environment:

(1) Business Environment Situation

Countries responded to the epidemic with unprecedented fiscal, monetary and regulatory measures to maintain household disposable income, protect corporate cash flow and support credit availability. The negative growth of advanced economies in Q2 was not as severe as expected, while the economic recovery in mainland China was stronger than expected. 2020 The global economic recession in the second half of the year is expected to moderate compared to the first half. Taiwan businesses are returning to Taiwan, and international companies such as Google and Microsoft are setting up R&D or innovation centers in Taiwan, which is expected to boost the domestic smart manufacturing and innovation energy and enhance the added value of the industry. The newly amended regulations on production and innovation, the corporate law and the action plan to optimize the investment environment for new and innovative businesses, and the three major programs to accelerate investment in Taiwan are all helpful to stimulate investment and adjust the industrial structure of Taiwan.

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According to the preliminary statistics from the Office of the Comptroller of the Executive Yuan, the GDP growth rate for 2020 was 3.11%, with an average GDP of US$28,383 per person, and the forecast for 2021 is 4.64%, with a GDP of US$30,981 per person.

Unit: NT$ million.

	GDP and Economic Growth Rate	GDP and Economic Growth Rate
Year(Quarter)	Real GDP (Using 105 years as the reference year of the chain value)	Economic growth rate (%)
	Not seasonally adjusted	Year-over-year(yoy)
2019	19,194,635	2.96
2020 (p)	19,791,301	3.11
2021 (f)	20,709,885	4.64
Explanation: 1. (p) shows the preliminary statistics, (f) shows the predicted statistics, and (r) shows the corrected statistics. Source: Office of the Comptroller, Executive Yuan

(2) Domestic Market Changes

According to the votes of the Taiwan Housing Group Trend Center, the representative word for the housing market in Taiwan in 2020 is "prosperous", and the reason for this is that "owner-occupants are in charge and the housing market is in demand. From "hope" in 2017 to "turn" in 2018, "back" in 2019 to "prosperous" in 2020, the housing market has left the shadow of tax reform and entered an era of "more hot money, lower interest rates, and thinner bills", leading to a "prosperous" buying trend in 2020. According to the Ministry of the Interior, 474,579 buildings were registered for transfer in 2020, of which 326,589 buildings were transferred, representing an annual increase of 8.76%, and the threshold of 300,000 buildings was maintained for the second consecutive year, representing a stead rowth in the momentum of Taiwan's re air market. y g p

Year			Transfer Registration	Transfer Registration
	Total	Buy and Sell	Auction	Inheritance	Gift	Other
			Number of buildings
2018	418,546	277,967	5,234	56,315	43,025	36,005
2019	456,234	300,275	5,117	57,677	43,956	49,209

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2020	474,579	326,589	5,269	59,109	43,759	39,853
Source: Ministryof the Interior MonthlyStatistical Report

According to the statistics of building construction licenses, the total floor area of building construction licenses reached 41,521 thousand square meters in 2020, an increase of 12.4% compared to 2019. The total floor area of building construction licenses reached 28,247 thousand square meters, an increase of 6.6% from 2019, and the total floor area of construction licenses reached 32,403 thousand square meters, an increase of 16.4% from 2019. This shows that the demand for new construction in Taiwan will grow steadily.

Construction License, User License and Start-up Profile

	Construction License, User License and Start-up Profile	Construction License, User License and Start-up Profile	Construction License, User License and Start-up Profile	Construction License, User License and Start-up Profile	Construction License, User License and Start-up Profile	Construction License, User License and Start-up Profile
Year	License to build license		License to use		Start-up license
	Number of pieces	Main floor Surface area	Number of pieces	Main floor Surface area	Number of pieces	Main floor Surface area
2018	27,344	33,984	22,860	28,366	18,469	26,262
2019	27,143	36,927	22,026	26,489	17,792	27,843
2020	25,980	41,521	22,370	28,247	18,523	32,403
Source:	Department of Construction

(3) Factory Operation Overview

With the increasing liberalization of free trade, international bathroom brands and suppliers are entering the market one after another to compete, especially in China, where the competition is shifting from low-price to quality products, making the overall industry more competitive in the future. Therefore, the company is promoting a brand enhancement and reengineering program to strengthen the communication channels and methods with consumers, so that the company's philosophy can penetrate the market and gain recognition. In response to competition, Caesar will continue to adopt the concept of "fashionable simplicity" in product design, reduce product categories, increase purchasing advantages and reduce management costs, and adjust products to meet different market needs. Caesar's long-established brand promotion, comprehensive sales channels, diversified product lines, and flexible operation model, coupled with the "Bath Housekeeping" approach to strengthen sales and service, have been widely recognized by consumers and have been one of the top three brands preferred by domestic consumers for years.

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Upstream, midstream and downstream industry linkages

The Company is a manufacturer and seller of sanitary equipment such as basins, toilets, water supply devices, bathtubs and other peripheral products. The relationship between the industry, from the supply of raw materials, production and assembly to the sale of finished products, midstream and downstream, is described as follows.

(1) Upstream: Suppliers of raw materials such as copper, porcelain clay, glaze, gas, etc., faucets and plastic products for finished sanitary equipment, as well as manufacturers who forge, glaze and shape the above raw materials. (i.e. the business of Vietnam Caesar Bath Co.
(2) Midstream: Sales of bathroom equipment and its peripheral products under its own brand name marketers, distributors and dealers. (i.e., the Company's business)
(3) Downstream: the construction industry, hardware and sanitary building materials companies and the end-consumer public that actually use sanitary equipment and its peripheral products.

The following is a summary of the above-, mid- and downstream linkages of the bathroom equipment industry to which the Company belongs.

==> picture [462 x 353] intentionally omitted <==

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

Brasswar Porcelain Glaze Gas Water Plastics
on
Tour
Bathroom
Medium
Tour
Bathroom Bathroom Bathroom
Down
Tour Construction Bathroom Hardware Hardware,
----- End of picture text -----

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3. Various trends of product development

The development trend of the bathroom industry has gradually expanded from a simple toilet area to a home living space, and how to plan a comfortable and pleasant sanitary environment from an aesthetic base is the goal of research and development that major bathroom brands are competing for. The creation of thoughtful products to strengthen the connection and dependence of their customers will further enhance the brand.

Today's bathroom products are mostly integrated with electronic technology, the overall industry development has gradually transformed from the traditional industry to the technology industry, and towards the following trends.

(1) Bathroom space furnishing

Traditional designers focus on living areas such as living rooms and bedrooms, but Caesar gradually promotes the planning and design of the whole bathroom. The value of furnishing the bathroom space is to combine aesthetics and functionality under the limited space planning. Through the clever combination of mirror cabinet, main cabinet and tall cabinet, the fashionable design and simple style meet the flexible needs of each home space and create more storage possibilities.

(2) Silver hair family bathroom products

In response to the aging population, how to design and plan the bathroom space in order to provide silver-haired people and caregivers with more labor-saving, comfortable and safe bathroom space, and through the perspective of universal design, to design products for all ages to meet the needs of every user in the home. Caesar has noticed this trend of population development and has designed and planned the silver-haired toilet products, including the raised digital toilet and the raised general toilet, so that silver-haired people can easily get up after using the toilet; and has also integrated the planning of the silver-haired toilet series products to take care of the needs of silver-haired people in using the toilet.

(3) Seeking strategic cooperation to develop intelligent bathing products Through strategic cooperation, bathroom products can break out of the traditional mold. Combining the advantages of Taiwan's high-tech industry to create a safe and comfortable bathroom space, in the fall detection, to do a warning and early warning, the traditional bathroom manufacturers, technology has its limitations. In addition to the continuous improvement in water conservation and

144

environmental protection, appearance and function, the use of big data and information technology is a step forward in intelligent products, through data to know the daily life information, such as use habits, and even integration of health management-related elements into product development, through the Internet of Things management and connection, so that the product is closer to human nature, and closer to the consumer connection.

(4) Systematic management of production lines

The barcode system is integrated into the production of product histories, linking the first line of sales with the back office of the factory, and integrating anti-counterfeiting, identification and after-sales service. Combined with the electronic system, we can improve the efficiency and quality of service and provide an extended warranty mechanism. We also provide barcodes on the product and on the outer box to gradually improve its electronic system.

Competition situation

Almost all of the products sold by Taiwanese sanitary ware brands rely on imports. In Taiwan, due to high land costs, labor shortage, and high labor and material costs, almost no new production capacity has been invested in factory construction. 2020 total imports of sanitary ware grew 9.5% from 2019 (Source: Ministry of Finance). Among them, mainland China accounted for 42.3% of the total imports, is the main source of Taiwan's sanitary ware imports, the proportion of the first than still maintained, followed by Vietnam imports accounted for 31.3% of the total, the third is Japan, accounting for 13.2% of the total imports. The three regions together accounted for 86.8% of the total, mainly due to the high manufacturing difficulty of sanitary ware, manufacturing yield control is not easy, the technical threshold is very high, coupled with the huge capital required to build factories, not many companies have the ability to invest in the sanitary ware industry in Taiwan. 2020 of total imports of water faucets increased by 18.7% over 2019, of which, China accounted for 55.8% of the total imports, followed by Germany imports accounted for The total imports from China accounted for 55.8% of the total imports, followed by Germany at 12.6%, and Vietnam at 5.3%, representing a 21.7% increase from 2019. (Source: Ministry of Finance). Caesar's own factory in Vietnam covers an area of nearly 15 hectares, including porcelain factory, faucet factory, bathtub factory and bath cabinet factory, and invests hundreds of millions of dollars in equipment and technology every year. We will be more competitive in the market.

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(3) Technology and R&D Overview

For the most recent year and up to the printing date of the annual report, research and development expenses and technologies or products successfully developed.

Unit: NT$ thousands

developed.		Unit: NT$ thousands
Annual Project	2020	For the year ended March 31, 2021
Research and development expenses	17,706	4,481
Development of successful technologies or products	Ozone sterilization deodorization sensor faucet Smart Ion Sensor Water Flush Micro Bubble micro bubble shower	New monoblock toilet Ozone sterilization deodorization sensor faucet Medium and low level faucet series Baked faucet series

(4) Long- and short-term business development plans
Short-term business development plan

In 2020, the Group's operations focused on new markets, functional products, network marketing and ERP system integration.

(1) Newly built markets and strengthening existing markets: We are actively working to develop new markets and make our name known in the public works market. In recent years, our company has been actively developing the new construction and public works markets. At the same time, we continue to deepen our efforts in the existing repair market and strengthen the professional skills of our sales staff. In terms of service quality, the Bath Housekeeping service team has been recognized by consumers to achieve the benefits of word-of-mouth marketing and B2C customer satisfaction.
(2) Functional products: The launch of the germ elimination faucet series and the new generation of Aquajet instant flush toilets have greatly improved our competitiveness. At the same time, the bath and mirror cabinets are modularized with various sizes and combinations to meet different needs. CAESAR SPACE", which allows the bathroom to be used as you wish, increases the ping effect and maximizes the use of the bathroom. We hope to win more consumers' recognition and adoption, and increase our competitiveness in the market.
(3) Internet marketing: Since 2020, we have gradually increased the proportion of budget for internet marketing, developed a precise

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advertising strategy, and developed a new type of brand communication field in response to the new digital dividend brought about by the epidemic, and developed a new type of purchasing process to master the last mile of channel retailing.

(4) ERP system: Since 2020, we have started planning to update our ERP system. We expect to integrate Taiwan and Vietnam production into the same system starting from FY110, and we plan to establish a systematic management idea based on information technology through the integration of Taiwan-Vietnam system to provide a faster and more accurate management platform for decision making and operation for corporate decision makers and employees.
Long-term Business Development Plan
Caesar will continue to focus on the development of the Asian market and aim to become one of the top three international brands in Asia. We will continue to invest in key technologies and develop functional products, complemented by simple and fashionable design concepts and affordable prices, in order to compete with international brands through product differentiation strategies.
(1) Expanding into the ASEAN market: We will continue to strengthen our development efforts in Vietnam to increase our market share. In line with the ASEAN Zero Tariff Agreement, we have established sales agents in Malaysia, the Philippines and Cambodia, and will continue to strengthen our distribution channels and further establish sales agents in Indonesia.
(2) Layout of China market: Strategic alliance with Taiwan-invested enterprises in mainland China to open up the China market steadily, so that the brand awareness of Caesar Bath began to ferment in all parts of China.
(3) Development of OEM/ODM market: With new product lines, we are expected to steadily increase our sales by securing orders from well-known US distributors.
(4) Establishment of simple and fashionable brand image: Caesar Sanitary Ware will continuously inject new vitality into the brand, renovate the CIS corporate identity system, and establish a new brand image among the consumer public with simple and fashionable as the main brand concept.
(5) Vietnam cabinet market: The newly established cabinet factory in Vietnam designs and produces cabinets that meet the needs of Vietnam. It actively expands and creates business opportunities through

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exhibition stores and distribution mode, and has systematic development to serve the construction projects and home decoration upgrades, which will become an important development project for the company in the future.

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2. Market and Sales Overview

(1) Market Analysis
Sales (provision) of major goods (services) by region

Unit: NT$ thousands

Annual Sales Area	2019	2019	2020	2020
	Amount	Proportion (%)	Amount	Proportion (%)
Taiwan	1,284,658	55.02	1,456,489	63.15
Vietnam	1,029,155	44.08	840,325	36.43
Others	21,113	0.90	9,707	0.42
Total	2,334,926	100.00	2,306,521	100.00

2. Market share

Our company is marketing under the brand name of CAESAR, which focuses on porcelain toilets, basins, faucets, shower cabinets and bathtubs, and is not yet available in the market as there are no reliable commercial or academic institutions or government agencies that can provide reliable market size statistics to show the market share of our company in the bathroom equipment market. The Company is the third largest bathroom equipment manufacturer and seller in Taiwan, with a market share of about 20% in Taiwan, and the third largest brand in Vietnam, with an estimated market share of 20%.

Future market supply and demand and growth

In recent years, the family and demographic structure of Taiwan has gradually changed from large families to small families, reaching 8.73 million households in 2018, 8.83 million in 108, and 8.93 million in 2019. The population will drop to 14.49~17.16 million in 2070, which is about 6~70% of the population in 2020. Therefore, with the change of population age structure, the demand for barrier-free and universally designed bathrooms from the middle and upper age groups is expected to increase gradually, and Caesar will make the necessary product combinations in advance according to the characteristics of the industry. In addition to Taiwan, Caesar also focuses its development on Asia, which accounts for over 60% of the world's population and is also the region with the fastest economic growth. Although the epidemic was well controlled, the tourism and physical service industries were still greatly affected. It is expected that after the gradual liberalization of international tourism, the Vietnamese market will continue to grow due to the population dividend. Vietnam's economy grew at a rate of 2.91% in 2020, slowing down to the slowest pace in 30 years. Foreign investors were unable to enter Vietnam, resulting in a slight

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rebound in real estate prices. Since Caesar's production base is in Vietnam and it is one of the top three brands in Vietnam in terms of sales volume, the growth of Vietnam market in the post-epidemic era will be an important driving force for Caesar's sustainable growth.

Competitive Niche
(1) Competitive product cost: Bathroom equipment is a labor-intensive industry, and our production base is located in Vietnam, enjoying relatively low production cost, with automatic production line equipment to improve the yield rate, supplemented by the ASEAN tariff-free base, making the product cost relatively competitive.
(2) Copper and Bath Cabinet Plant Capacity: With the expansion of copper gravity casting production, we can meet the demand of new construction and public works: With the bath cabinet plant, Caesar becomes one of the few integrated sanitary ware companies in Taiwan with a complete production base.
(3) High self-production rate and stable quality: We have self-production lines for major products such as sanitary ware, faucets, bathtubs, and bath cabinets, which allow us to bring out the combined effect of matching product design and strict quality control.
(4) Continued investment in core technology: Caesar FFC porcelain production technology is the best in Asia, and we continue to maintain our competitive edge with innovative technology.
(5) Focused online marketing: We flexibly adjust our effective online marketing strategy to match online advertising and brand positioning.
(6) Perfect pre-sales and after-sales service system: the first to provide pre-sales service with full product configuration, delivery to the house and porcelain 10-year warranty, and year-round after-sales service by bathroom butlers.
(7) Taiwan's 15,000-square-meter distribution center speeds up logistics operations while reducing the chance of out-of-stocks and providing effective distribution services throughout the province.
(8) Robust financial structure: The company has good profitability, low debt ratio, stable cash flow and is able to cope with various crises.
Favorable and unfavorable factors of development prospect and countermeasures
(1) Favorable factors
- A.Vietnam production base, Taiwan and Vietnam complement each other, with competitive advantage
  - With a total population of 98 million, the average age of Vietnam
  - is only about 32 years old. Vietnam has a demographic dividend and

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the labor force accounts for about 70% of the total population, labor costs are relatively low compared to Taiwan and labor costs are two-thirds of those in China, the "world factory".

B.ASEAN Tariff Advantage

In 1985, our company chose Vietnam as our production base with an eye on the ASEAN market. Since 104, the whole region has been exempted from tariffs, which is favorable to the development of the market of ASEAN countries, and at the same time, there are still tariff barriers in some of the bathroom items exported from China to Vietnam, which is favorable to us and has a relative competitive advantage over competitors from other countries.

C.Four major business plants to facilitate the expansion of OEM

business

Since the completion of the Vietnam plant expansion, the Company has four major manufacturing businesses: porcelain, faucets, cabinets and bathtubs. In addition to supplying Caesar's brand development in Asia, the Company has the opportunity to expand its international OEM business and provide one-stop services. The porcelain business has been receiving orders from a well-known distributor in the U.S. since 2009 and has the opportunity to further expand into other projects in the future to diversify its business risks. D.Proactive management team

Compared with our competitors, our management team is relatively young, excellent, active and energetic, and has a precise grasp of the trending products, which enables us to close the gap with our strong competitors year by year. In Vietnam and Taiwan markets, we have made significant achievements.

E.Technical Advantages

The Company continues to invest in core technologies, in addition to the European porcelain Fine Fireclay technology and green energy hydropower technology, and will further invest in anti-bacterial technology for application in the kitchen and bathroom which is to enhance the overall brand space, expected competitiveness.

F.Private Label Advantage

After 35 years of development, CAESAR is now the second most popular brand in Taiwan and one of the top three ideal brands for designers and the top three brands in Vietnam, competing with international manufacturers. Although there is still a gap between the company's scale of operation and that of the major international

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manufacturers, the company's strong local operation ability and flexible strategy have brought the market share of sanitary equipment in Taiwan and Vietnam closer.

(2) Adverse factors and countermeasures
A.Professionals are not easy to find, and the training time is long Countermeasures.
- a. We provide summer internship opportunities for interested university students to work in our head office or factories to nurture industrial talents.
- b. We offer better salaries and benefits than our competitors, a friendly working environment and a comprehensive welfare system to attract professional talents.
- c. We have planned a comprehensive professional skills training and internal and external education training for our employees to enhance their professionalism and ensure the accumulation of professional skills and experience.
B.The quality of labor is slightly poor, we must eliminate the weak and keep the strong

Countermeasures.

a. We continue to introduce new automated equipment to reduce the number of workers in the factory to stabilize production yields.
b. Continuously promote six standard deviations to improve management efficiency and effectiveness.
c. Increase employee salaries, benefits and performance bonuses, and enhance on-the-job training to improve staff quality and productivity.
C.The quality of local raw materials supply in Vietnam is unstable, so we have to rely on imports.
Countermeasures.
a. Some of the raw materials are in the nature of temporary goods, and prices and exchange rates fluctuate greatly. Therefore, the parent company is centrally responsible for the procurement of key raw materials to control the price and exchange rate risks.
b. Develop local mineral sources in Vietnam to assist manufacturers to improve washing technology and reduce the risk of imported raw material supply chain.

(2) Important applications and production process of major products 1. Im ortant a lications of the main roducts p pp p

Main Products Important Uses

152

Porcelain	It is a necessity for daily use, such as toilets, water tanks, basins, porcelain feet, squatting toilets, buckets and ceramic accessories.
Water	It is used in general bathroom water supply apparatus, including basin faucets, showerheads, shower heads and hardware fittings, etc.
Bathtub	As a necessity for daily bathing, we develop bathtubs of different materials, functions and designs according to market demand, including acrylic bathtubs, massage bathtubs, classical freestanding bathtubs and shower columns, etc.
Other (Electronic Automation)	It is the spare parts for daily bathroom equipment, such as automatic toilet flush, automatic toilet flush, automatic water supply faucet, automatic soap dispenser, automatic hand dryer, computerized toilet cover, etc.

2. Production process of major products

The Company mainly purchases various sanitary products from Vietnam Caesar Sanitary Ware Co.

(1) Porcelain

==> picture [360 x 116] intentionally omitted <==

==> picture [23 x 24] intentionally omitted <==

==> picture [362 x 108] intentionally omitted <==

153

(2) Water

Casting Process

==> picture [361 x 41] intentionally omitted <==

Processes

==> picture [134 x 42] intentionally omitted <==

Polishing process

==> picture [291 x 42] intentionally omitted <==

Electroplating Process

==> picture [290 x 43] intentionally omitted <==

Assembly and quality inspection process

==> picture [214 x 43] intentionally omitted <==

(3) Bathtub

==> picture [372 x 116] intentionally omitted <==

154

(3) Supply of major raw materials

The Company mainly purchases various finished sanitary products from Vietnam Caesar Sanitary Ware Company Limited, and the current supply of ma or raw materials for each of its finished sanitar roducts is as follows. j y p

Raw materials	SupplySources	SupplyStatus
Washed clay	China Manufacturers	Stable supply
Clay	Vietnam and Thailand Manufacturers	Stable supply
Raw mineral clay	Vietnam Manufacturers	Stable supply
Washed kaolin	Vietnam Manufacturers	Stable supply
Nagashi	Indian and Vietnamese manufacturers	Stable supply
Roasted Powder	German and Italian manufacturers	Stable supply
Copper Bar	Taiwan and Korean manufacturers	Stable supply
65 copper scrap	Vietnam Manufacturers	Stable supply
Acrylic sheet	China Manufacturers	Stable supply

(4) The names of customers who have accounted for more than 10% of the total purchase (sales) in any of the last two years and the amount and proportion of their purchase (sales), together with the reasons for the increase or decrease 1. Information of major suppliers in the last two years

The Company has no supplier that accounts for more than 10% of the total purchase price in the last two years, therefore, Not applicable.

Major customers in the last two years

Unit: NT$ thousands

					Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
	2019				2020
Projec t	Name	Amount	As a percentag e of net sales for the year [%].	Relationshi p with the Issuer	Name	Amount	As a percentag e of net sales for the year [%].	Relationshi p with the Issuer
1	Kai Zhuan g	403,343	17.27	None	Kai Zhuan g	422,146	18.30	None
	Other	1,931,58 3	82.73		Other	1,884,37 5	81.70

155

	Net sales	2,334,92 6	100.00		Net sales	2,306,52 1	100.00

Note: The financial information as of March 31, 2020 has not been reviewed by the accountants.

The reason for the change: The Company mainly sells through distributors, and Kai Zhuang is the distributor of the Company in the Greater Taipei area, and its sales area is the main residential area of the population in Taiwan, so the sales amount is relatively high.

156

(5) Production volume for the last two years

Unit: NT$ thousands;

(5) Production	volume for the last two years	volume for the last two years	volume for the last two years	Unit: NT$ thousands;	Unit: NT$ thousands;	Unit: NT$ thousands;
Year Production Measurements Main Commodities	2019			2020
	Productivity	Production	Product Value	Productivity	Production	Product Value
P o r c e l a i n	1,980	952	768,526	1,980	900	507,413
W a t e r	500	456	360,316	500	562	283,547
B a t h t u b	12	7	67,389	12	6	27,959
Total	2,492	1,415	1,196,231	2,492	1,468	818,919

(6) Sales volume for the last two years

Unit: NT$ thousands;

(6) Sales	volume for the last two years	volume for the last two years	volume for the last two years	volume for the last two years	Unit: NT$ thousands;	Unit: NT$ thousands;	Unit: NT$ thousands;	Unit: NT$ thousands;
Year Sales Measurements Main Products	2019				2020
	Inside Sales		External Sales		Inside Sales		External Sales
	Quantity	V a l u e	Quantity	V a l u e	Quantity	V a l u e	Quantity	V a l u e
P o r c e l a i n	958	1,128,134	13	14,629	902	1,100,917	14	23,458
W a t e r	636	492,137	3	2,579	559	462,244	1	950
Electronic Automation	67	209,930	0	375	72	244,760	0	480
B a t h t u b	13	83,626	0	980	10	61,860	0	523
O t h e r	(Note)	399,986	(Note)	2,550	(Note)	409,498	(Note)	1,831
Total	(Note)	2,313,813	(Note)	21,113	(Note)	2,279,279	(Note)	27,242

Note: Other items are not counted because there are many items with different unit prices.

157

The Number, Average Years of Service, Average Age and Educational Attainment of the Employees of the Company in the Last Two Years and by the Print Date of the Annual Report

March 31, 2021

				March 31, 2021
	Year	2019	2020	Current year ending March 31, 2021
Staff Work People Number	Sales	173	256	250
	Management	261	272	274
	Research and Development	12	9	10
	Production Line	984	976	877
	Total	1,430	1,513	1,411
Average annual age		36.4	37.3	36.7
Average Length of Service		6.4	5.7	6.3
Learning History Score Cloth than Rate	Dr.	0	0	0
	Master	0.49	0.36	0.39
	Large Commissioner	13.27	14.24	15.90
	High Medium	14.56	11.64	11.35
	Below High School	71.68	73.75	72.36

4. Environmental Protection Expenditure

For the most recent year and up to the date of publication of the annual report, the losses suffered as a result of pollution of the environment (including compensation and environmental protection audit results for violations of environmental protection laws and regulations, the date of sanction, the sanction number, the provisions of the violation, the content of the violation, and the content of the sanction should be listed), and the estimated amount of current and potential future losses and measures to deal with them should be disclosed, and if the amount cannot be reasonably estimated, the facts that cannot be reasonably estimated should be stated.

No such case.

158

Labor Relations
(1) Employee welfare measures, further education, training and retirement systems and their implementation, as well as agreements between employers and employees and measures to protect the rights and interests of employees
1. Employee Benefit Measures

In order to enhance the welfare of employees, the Company has established an employee welfare committee in accordance with the law to make regular contributions to the welfare fund, and the main points of the Company's welfare measures are as follows.

(1) Statutory welfare measures: universal health insurance, labor insurance, and contribution to labor pensions.
(2) The company specially provides: employee bonus, performance bonus, employee education and training program, and group accident insurance.
(3) The Employee Welfare Committee provides: three festivals gift, birthday gift, marriage allowance, maternity allowance, first home purchase allowance, funeral allowance, injury and illness compensation, children's education scholarship, annual staff trip, and monthly birthday celebration party.

Caesar Vietnam (a subsidiary) has established a labor union

organization in accordance with the law and has paid the union dues on a regular basis, and has implemented the following welfare measures.

(1) Statutory benefit measures: medical insurance, social insurance, unemployment insurance
(2) The company provides: performance bonuses, employee education and training programs, and group accident insurance.
(3) The labor union provides: three festivals gift, wedding and funeral subsidy, injury and sickness compensation, maternity allowance, and various other convenient and preferential activities, etc.
Further training and training situation

The Company holds internal training courses from time to time to cultivate employees' professional knowledge and skills in accordance with the needs of each department and their individual functions.

When new employees report to work, the management department selects the appropriate time and considers giving centralized or individual lectures according to the actual number of employees. The total number of employees participating in the training in 2020 was 10, and the total number of training hours was 60.

Retirement System

159

In accordance with the Labor Pension Act, the Company contributes 6% of monthly wages to a personal pension account established by the Bureau of Labor Insurance.

The Company's retirement system is governed by the Labor Standards

and Labor Pension Act, and the relevant regulations are as follows.

(1) Employees who meet one of the following conditions may apply for retirement.
- A. Those who have served for more than 15 years and are at least 55
- years old.
- B. Those who have completed 25 years of service or more.
- C. Those who have served for more than 10 years and have reached the age of 60.
(2) Employees shall not be compulsorily retired unless one of the following circumstances applies.
- A. Aged 65 or older.
- B. Mentally or physically incapacitated for work.
Agreements between labor and management and various measures to protect employees' rights and interests

Our company holds regular labor-management meetings to provide a channel of communication between employees and employers. Since its establishment, all regulations and measures regarding labor relations have been handled in accordance with relevant laws and regulations, and based on the management philosophy of coexistence and mutual prosperity and clear management policies, we attach great importance to employees' opinions and provide various channels for responding to opinions to maintain a good and harmonious labor relations.

(2) For the most recent year and up to the printing date of the annual report, the losses suffered as a result of labor disputes (including labor inspection results in violation of the Labor Standards Law, the date of the sanction, the sanction number, the provisions of the law violated, the content of the law violated, and the content of the sanction), and the estimated amount of current and potential future losses and measures to address them, and if the amount cannot be reasonably estimated, the fact that it cannot be reasonably estimated No such case.

160

6. Important Contracts

Nature of Contracts	Person(s) involved	Deed of Commencement Date	Main Content	Restricted Terms
Credit Facility	Shanghai Commercial Savings Bank	2020.05.07~2021.05.07	Short-term Loans	None
Credit Facility	Citi (Taiwan) Commercial Bank	2020.05.15~2021.05.15	Short-term Loans	None
Credit Facility	South China Commercial Bank	2020.06.25~2021.06.25	Short-term Loans Short Term Guaranteed Loans	None
Credit Facility	Taipei Fubon Bank	2020.08.15~2021.08.15	Short-term Loans	None
Credit Facility	Chinatrust Commercial Bank	2020.08.31~2021.08.31	Short-term guaranteed loans Material Purchase Loan	None
Credit Facility	First Commercial Bank	2020.07.24~2021.07.24	Short-term Loans	None
Credit Facility	Bank of Taiwan	2020.12.18~2021.12.17	Short-term Loans	None
		2020.12.18~2025.12.17	Medium-term guaranteed borrowings	Collateral: 80% guaranteed by the ECF
Credit Facility	Mega International Commercial Bank	2020.01.30~2021.01.30	Short-term Loans Short-term Purchase Loan	Maintain 10% of live performance at average utilization balance
Credit Facility	Chang Hwa Commercial Bank	2021.02.28~2022.02.28	Short-term Loans	None

161

VI. Financial Information

Condensed Balance Sheet and Statement of Comprehensive Income of the Last Five Years
(1) Condensed Balance Sheet and Consolidated Income Statement Information - Consolidated Financial Statements
1. Condensed Balance Sheet - Consolidated Financial Statements

Unit: NT$ thousands

Year Item	Year Item	Year Item	Last five years' financial information (Note 1)	Last five years' financial information (Note 1)	Last five years' financial information (Note 1)	Last five years' financial information (Note 1)	Last five years' financial information (Note 1)
			2016	2017	2018	2019	2020
C u r r e n t a s s e t s			1,167,111	1,228,552	1,107,492	1,075,425	1,173,183
Propert y, pl ant a nd e q u i p m e n t			702,730	700,255	1,032,041	1,189,276	1,096,721
I n t a ngi b l e a s s e t s			2,340	4,299	3,021	6,634	5,474
O t h e r A s s e t s			133,771	170,010	149,349	256,670	273,635
T o t a l A s s e t s			2,005,952	2,103,116	2,291,903	2,528,005	2,549,013
Current liabilities		Pre-assignment	337,342	384,353	429,693	594,590	600,040
		After distribution	497,062	551,333	596,673	718,010	(Note 2)
Non-current liabilities			86,380	110,275	162,470	240,158	233,446
Total liabilities		Pre-assignment	423,722	494,628	592,163	834,748	833,486
		After distribution	583,442	661,608	759,143	958,168	(Note 2)
Equity attributable to owners of the parent c o m p a n y			1,582,222	1,608,479	1,699,730	1,693,246	1,702,815
S h a r e C a p i t a l			726,000	726,000	726,000	726,000	726,000
C a p i t a l F u n d			277,452	277,452	277,452	277,452	277,452
Reserved Surplus		Pre-assignment	656,009	755,922	842,953	855,824	952,496
		After distribution	496,289	588,942	675,973	732,404	(Note 2)
O t h e r i n t e r e s t s			(77,239)	(150,895)	(146,675)	(166,030)	(237,459)
T r e a s u ryS t o c k s			0	0	0	0	15,674
Non-controllinginterests			8	9	10	11	12,712
R i g h t s a n d Benefits T o t a l	Pre-assignment		1,582,230	1,608,488	1,699,740	1,693,257	1,715,527
	After distribution		1,422,510	1,441,508	1,532,760	1,569,837	(Note 2)

Note 1: Audited and certified by the accountant.

162

Note 2: The proposed distribution of earnings for 2020 has not yet been resolved by the shareholders' meeting.

163

2.Condensed Consolidated Statements of Income - Consolidated Financial Statements

Unit: NT$ thousands, but earnings per share was NT$

Year Item	Last five years' financial information (Note)	Last five years' financial information (Note)	Last five years' financial information (Note)	Last five years' financial information (Note)	Last five years' financial information (Note)
	2016	2017	2018	2019	2020
Operatingincome	2,222,489	2,269,977	2,293,113	2,334,926	2,306,521
G r o s s P r o f i t	707,655	756,392	751,639	701,683	734,168
Operating profit o r l o s s	330,609	330,995	348,253	246,713	289,046
Non-operating i n c o m e a n d e x p e n s e s	8,283	10,937	9,015	(1,170)	529
N e t i n c o m e b e f o r e t a x	338,892	341,932	357,268	245,543	289,575
C o n t i n u i n g B u s i n e s s U n i t Net profit for the p e r i o d	247,111	259,634	254,012	179,852	220,056
Loss of closed u n i t s	0	0	0	0	0
Net income (loss) for theperiod	247,111	259,634	254,012	179,852	220,056
O t h e r comprehensive income or loss for t h e p e r i o d (Net after tax)	(13,412)	(73,656)	4,220	(19,355)	(71,431)
T o t a l c o n s o l i d a t e d profit or loss for t h e p e r i o d	233,699	185,978	258,232	160,497	148,625
Net profit vested i n Parent Company O w n e r	247,110	259,633	254,011	179,851	220,092

164

N e t i n c o m e attributable to noncontrolling i n t e r e s t s	1	1	1	1	(36)
T o t a l c o n s o l i d a t e d p r o f i t o r l o s s attributable to owners of the parent company	233,698	185,977	258,231	160,496	148,663
T o t a l c o n s o l i d a t e d p r o f i t o r l o s s attributable to noncontrolling i n t e r e s t s	1	1	1	1	(38)
E a r n i n g s p e r s h a r e	3.40	3.58	3.50	2.48	3.04

Note: Audited and certified by the accountant.

165

(2) Condensed Balance Sheet and Consolidated Income Statement Information - Individual Financial Reports
Condensed Balance Sheet - Individual Financial Reports

Unit: NT$ thousands

		Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands	Unit: NT$ thousands
Year Item		Last five years' financial information (Note 1)
		2016	2017	2018	2019	2020
C u r r e n t a s s e t s		420,180	412,277	342,259	417,800	451,053
Property, plant and e q u i p m e n t		309,192	338,872	473,814	503,335	500,848
I n t a ngi b l e a s s e t s		1,733	940	66	261	1,009
O t h e r	A s s e t s	1,109,579	1,176,482	1,339,107	1,424,834	1,341,991
T o t a l	A s s e t s	1,840,684	1,928,571	2,155,246	2,346,230	2,294,901
Current liabilities	Pre-assignment	172,425	210,116	293,349	449,677	395,520
	After distribution	332,145	377,096	460,329	573,097	(Note 2)
Non-current liabilities		86,037	109,976	162,167	203,307	196,566
Total liabilities	Pre-assignment	258,462	320,092	455,516	652,984	592,086
	After distribution	418,182	487,072	622,496	776,404	(Note 2)
Equity attributable to owners of the parent c o m p a n y		1,582,222	1,608,479	1,699,730	1,693,246	1,702,815
S h a r e	C a p i t a l	726,000	726,000	726,000	726,000	726,000
C a p i t	a l F u n d	277,452	277,452	277,452	277,452	277,452
Reserved Surplus	Pre-assignment	656,009	755,922	842,953	855,824	952,496
	After distribution	496,289	588,942	675,973	732,404	(Note 2)
O t h e r	i n t e r e s t s	(77,239)	(150,895)	(146,675)	(166,030)	(237,459)
T r e a s u ryS t o c k s		0	0	0	0	(15,674)
Non-controllinginterests		0	0	0	0	0
Rights and B e n e f i t s T o t a l	Pre-assignment	1,582,222	1,608,479	1,699,730	1,693,246	1,702,815
	After distribution	1,422,502	1,441,499	1,532,750	1,569,826	(Note 2)

Note 1: Audited and certified by the accountant. Note 2: The proposed distribution of earnings for 2020 has not yet been resolved by the shareholders' meeting.

166

Condensed Consolidated Income Statement - Individual Financial Reports Unit: NT$ thousands, but earnings per share was NT$

	Unit: NT$ thousands, but earningsper share was NT$	Unit: NT$ thousands, but earningsper share was NT$	Unit: NT$ thousands, but earningsper share was NT$	Unit: NT$ thousands, but earningsper share was NT$	Unit: NT$ thousands, but earningsper share was NT$
Year Item	Last five years' financial information (Note)
	2016	2017	2018	2019	2020
Operatingincome	1,268,229	1,283,895	1,319,087	1,300,183	1,471,396
Gross Profit	330,205	362,116	362,825	343,548	445,898
Operating profit or loss	168,249	178,832	189,075	159,522	222,516
Non-operating income and expenses	138,394	141,822	156,286	71,753	54,549
Net income before tax	306,643	320,654	345,361	231,275	277,065
Continuing Business Unit Net profit for the period	247,110	259,633	254,011	179,851	220,092
Loss of closed units	0	0	0	0	0
Net income (loss) for theperiod	247,110	259,633	254,011	179,851	220,092
Other comprehensive income or loss for the period (Net after tax)	(13,412)	(73,656)	4,220	(19,355)	(71,429)
Total consolidated profit or loss for theperiod	233,698	185,977	258,231	160,496	148,663
Net profit vested in Parent Company Owner	247,110	259,633	254,011	179,851	220,092
Net income attributable to noncontrolling interests	0	0	0	0	0

167

Total consolidated profit or loss attributable to owners of the parent company	233,698	185,977	258,231	160,496	148,663
Total consolidated profit or loss attributable to noncontrolling interests	0	0	0	0	0
Earnings per share	3.40	3.58	3.50	2.48	3.04

Note: Audited and certified by the accountant.

(3) Name of the accountant and his checking opinion for the last five years

Year	Accounting Firm	Accountant's Name	Verification Comments
2016	Deloitte Taiwan	Yusuhuan Ming-ChungHsieh	No reservations
2017	Deloitte Taiwan	Yusuhuan WengBo Ren	No reservations
2018	Deloitte Taiwan	Weng Bo Ren Connie So	No reservations
2019	Deloitte Taiwan	Connie So WengBo Ren	No reservations
2020	Deloitte Taiwan	Connie So WengBo Ren	No reservations

168

2. Five-Year Financial Analysis

(1) Financial Analysis - Consolidated Financial Statements

Year Analysis Items (Note)	Year Analysis Items (Note)	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years
		2016	2017	2018	2019	2020
Financial Structure(%)	Debt to assets ratio	21.12	23.51	25.83	33.02	32.69
	Long-term capital to property, plant and equipment ratio	237.44	245.44	180.43	162.57	177.70
Solvency %	Mobility Ratio	345.97	319.64	257.74	180.86	195.51
	Quick Ratio	203.16	161.97	115.29	92.09	80.12
	Interest cover multiplier	233.43	226.25	128.09	31.43	36.64
Operating Capabilities	Receivables turnover rate (times)	9.78	9.26	9.32	9.65	9.29
	Average number of days of receipt	37.32	39.41	39.16	37.82	39.28
	Inventory turnover rate (times)	3.22	2.69	2.44	2.76	2.54
	Turnover rate of accounts payable (times)	13.51	11.34	12.96	16.22	19.44
	Average number of sales days	113.35	135.68	149.59	132.24	143.70
	Property, plant and equipment turnover rate (times)	3.07	3.23	2.64	2.10	2.01
	Total Asset Turnover (Times)	1.15	1.10	1.04	0.96	0.90
Profitability	Return on Assets (%)	12.90	12.69	11.66	7.73	8.92
	Return on Equity (%)	16.06	16.27	15.35	10.60	12.91
	Net income before income tax as a percentage of paid-in capital (%)	46.67	47.09	49.21	33.82	39.88
	Net Profit Rate (%)	11.11	11.43	11.07	7.70	9.54
	Earnings per share (NT$)	3.40	3.58	3.50	2.48	3.04
Cash Flow	Cash flow ratio (%)	76.41	47.31	84.87	58.43	28.43
	Cash Flow Fair Ratio (%)	98.74	77.30	67.14	74.97	69.79
	Cash reinvestment ratio (%)	6.02	1.15	9.34	8.42	2.14
Leverage	Operating leverage	1.88	2.02	1.94	2.55	2.30
	Financial leverage	1.00	1.00	1.00	1.03	1.02
Change of 20% or more in each financial ratio for the last two years. 1. The changes in return on equity, net income ratio and earnings per share were mainly due to thegrowth in profitability.

Change of 20% or more in each financial ratio for the last two years.

The changes in return on equity, net income ratio and earnings per share were mainly due to the growth in profitability.

169

The changes in cash flow ratio and cash reinvestment ratio were mainly due to the decrease in operating income due to the epidemic in Vietnam.

170

Note: The financial analysis is calculated as follows.

Financial Structure
(1) Debt to asset ratio = Total liabilities / Total assets.
(2) Long-term capital to property, plant and equipment = (total equity + non-current liabilities) / net property, plant and equipment.
Solvency
(1) Current ratio = Current assets / Current liabilities.
(2) Quick ratio = (current assets - inventories - prepaid expenses) / current liabilities.
(3) Interest coverage = Net income before income tax and interest expense / Interest expense for the period.
Management capability
(1) Turnover rate of accounts receivable (including accounts receivable and notes receivable arising from operations) = Net sales / Average balance of accounts receivable (including accounts receivable and notes receivable arising from operations) for each period.
(2) Average collection days = 365/receivable turnover rate.
(3) Inventory turnover rate = Cost of goods sold / average inventory amount.
(4) Turnover rate of accounts payable (including accounts payable and notes payable arising from operations) = Cost of goods sold / Average balance of accounts payable (including accounts payable and notes payable arising from operations) for each period.
(5) Average sales days = 365 / Inventory turnover rate.
(6) Turnover rate of property, plant and equipment = net sales / average net property, plant and equipment.
(7) Total Asset Turnover = Net Sales / Average Total Assets.
Profitability
(1) Return on assets = [Profit and loss after tax + interest expense × (1 - tax rate)] / Average total assets.
(2) Return on equity = Profit or loss after tax / average total equity.
(3) Net profit margin = profit or loss after tax / net sales.

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

Cash flow
(1) Cash flow ratio = Net cash flow from operating activities / Current liabilities.
(2) Net cash flow fair ratio = Net cash flow from operating activities for the last five years / (capital expenditures + increase in inventories + cash dividends) for the last five years.
(3) Cash reinvestment ratio = (net cash flow from operating activities - cash

171

dividends) / (gross property, plant and equipment + long-term investments + other noncurrent assets + working capital).

Leverage.

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

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

172

(2) Financial Analysis - Individual Financial Reports

Year Analysis Items (Note)	Year Analysis Items (Note)	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years
		2016	2017	2018	2019	2020
Financial Structure(%)	Debt to assets ratio	14.04	16.59	21.13	27.83	25.80
	Long-term capital to property, plant and equipment ratio	539.55	507.11	392.95	376.79	379.23
Solvency %	Mobility Ratio	243.68	196.21	116.67	92.91	2025.04
	Quick Ratio	184.85	146.27	69.48	60.33	68.84
	Interest cover multiplier	1,704.57	784.99	340.92	80.80	69.52
Operating Capabilities	Receivables turnover rate (times)	8.07	7.57	7.94	8.12	8.35
	Average number of days of receipt	45.22	48.21	45.96	44.95	43.71
	Inventory turnover rate (times)	8.66	8.03	7.16	6.26	6.08
	Turnover rate of accounts payable (times)	14.63	11.41	12.36	16.57	27.91
	Average number of sales days	42.14	45.45	50.97	58.30	60.03
	Property, plant and equipment turnover rate (times)	4.09	3.96	3.24	2.66	2.93
	Total Asset Turnover (Times)	0.71	0.68	0.64	0.57	0.63
Profitability	Return on Assets (%)	14.01	13.79	12.47	8.09	9.62
	Return on Equity (%)	16.06	16.27	15.35	10.60	12.96
	Net income before income tax to paid-in capital (%)	42.23	44.16	47.57	31.85	38.16
	Net Profit Rate (%)	19.48	20.22	19.25	13.83	14.95
	Earnings per share (NT$)	3.40	3.58	3.50	2.48	3.04
Cash Flow	Cash flow ratio (%)	93.31	58.39	53.40	13.39	40.98
	Cash Flow Fair Ratio (%)	99.72	81.00	70.09	54.61	60.64
	Cash reinvestment ratio (%)	0.93	-2.15	-0.55	-5.71	2.06
Leverage	Operating leverage	1.88	1.95	1.85	2.08	1.95
	Financial leverage	1.00	1.00	1.00	1.01	1.01
Change of 20% or more in each financial ratio for the last two years. 1. The change in current ratio was mainly due to the decrease in short-term borrowings. 2. The change in the turnover rate of accounts payable was mainly due to the increase in cost of goods sold as a result of the growth in operating revenue, while the average balance of accounts payable for each period remained at the same level as the same

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period last year.

The changes in return on equity and earnings per share were mainly due to the growth in profitability.
The changes in cash flow ratio and cash reinvestment ratio were mainly due to the increase in net cash inflow from operating activities as a result of the growth in operating revenues.

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Note: The financial analysis is calculated as follows.

Financial Structure
(1) Debt to asset ratio = Total liabilities / Total assets.
(2) Long-term capital to property, plant and equipment = (total equity + non-current liabilities) / net property, plant and equipment.
Solvency
(1) Current ratio = Current assets / Current liabilities.
(2) Quick ratio = (current assets - inventories - prepaid expenses) / current liabilities.
(3) Interest coverage = Net income before income tax and interest expense / Interest expense for the period.
Management capability
(1) Turnover rate of accounts receivable (including accounts receivable and notes receivable arising from operations) = Net sales / Average balance of accounts receivable (including accounts receivable and notes receivable arising from operations) for each period.
(2) Average collection days = 365/receivable turnover rate.
(3) Inventory turnover rate = Cost of goods sold / average inventory amount.
(4) Turnover rate of accounts payable (including accounts payable and notes payable arising from operations) = Cost of goods sold / Average balance of accounts payable (including accounts payable and notes payable arising from operations) for each period.
(5) Average sales days = 365 / Inventory turnover rate.
(6) Turnover rate of property, plant and equipment = net sales / average net property, plant and equipment.
(7) Total Asset Turnover = Net Sales / Average Total Assets.
Profitability
(1) Return on assets = [Profit and loss after tax + interest expense × (1 - tax rate)] / Average total assets.
(2) Return on equity = Profit or loss after tax / average total equity.
(3) Net profit margin = profit or loss after tax / net sales.
(4) Earnings per share = (Profit or loss attributable to owners of the parent company - preferred stock dividends) / weighted-average number of shares outstanding.
Cash flow
(1) Cash flow ratio = Net cash flow from operating activities / Current liabilities.
(2) Net cash flow fair ratio = Net cash flow from operating activities for the last five years / (capital expenditures + increase in inventories + cash dividends) for the last five years.
(3) Cash reinvestment ratio = (net cash flow from operating activities - cash

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dividends) / (gross property, plant and equipment + long-term investments + other noncurrent assets + working capital).

Leverage.
(1) Operating leverage = (net operating revenues - variable operating costs and expenses) / operating income.
(2) Financial leverage = Operating income / (Operating income - interest expense).

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3. Audit Committee’s Report for the Most Recent Year

Supervisory Review Report

The Board of Directors has audited the individual financial statements and the consolidated financial statements of the Company for the year ended December 31, 2020, together with the report on operations and the statement of appropriation of earnings, which have been audited and certified by Connie Su and Bo-Jen Weng, Certified Public Accountants, and have been examined by our supervisors and found to be in order.

Yours sincerely

The Company's 2021 Annual General Meeting of Shareholders

Supervisors: LI, WEN-YAO

Supervisors: LIN, KUO-HUA

Supervisors: LIANG, HSIN-YUNG

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March 9, 2021

178

Stock Code: 1817

4. Financial statements for the most recent year

Sanitar Co., Ltd.

Parent Company Only Financial Statements and Independent Auditors’ Report

For the Years Ended December 31, 2020 and 2019

Address: 7F., No. 111-8, Xingde Rd., Sanchong Dist., New Taipei City Tel: (02)85123712

179

Accountant's Audit Report

To Sanitar Co., Ltd.:

Audit opinion

I have audited the financial statements of Sanitar Co., Ltd., which comprise the Parent Company Only Statements of Financial Position as as of Dec. 31, 2020 and Dec. 31, 2019, the Parent Company Only Statements of Comprehensive Income from Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019, Parent Company Only Statement of Change in Equity, Parent Company Only Statement of Cash Flows, and Parent Company Only Financial Statement Notes (including a summary of significant accounting policies).

In my opinion, the accompanying Parent Company Only Financial Statements are properly drawn up in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers so as to give a true and fair view of the Parent Company Only Financial Position of the Sanitar Co., Ltd. as of December 2020 and 2019 and of the Parent Company Only Financial Performance and Cash Flows of Sanitar Co., Ltd. from January 1 to December 31, 2020 and 2019.

Basis for audit opinion

I conducted my audit in accordance with Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Generally Accepted Auditing Standards. My responsibilities under those standards are further described in the 'Accountant's responsibilities for the audi t of the Parent Company Only Financial Statements' section of my report. I am independent of Sanitar Co., Ltd. in accordance with the Accounting and Corporate Regulatory Authority Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities, and I have fulfilled my other ethical

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responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Key Audit Matter

The key auditing matter is which that, in my professional judgment, is most significant to my review of the Parent Company Only Financial Statements of Sanitar Co., Ltd. for 2020. Such matter has been considered in the process of examining the Parent Company Only Financial Statements taken as a whole and forming an opinion thereon, and I do not express an opinion on the matter individually.

The following is the description of the key audit matter in the Parent Company Only Financial Statements of Sanitar Co., Ltd. for 2 020:

Key Audit Matter: Authenticity in Sales to Specific Customers

Due to the significant audit risk associated with the revenue recognition under auditing standards, Sanitar Co., Ltd. are mainly dealing with distributors and have added significant sales from specific non-distributor customers, therefore, based on the consideration of the materiality of the financial statements, the authenticity in sales revenue from specific customers with high order amounts and significant new sales in the current year is considered as a key audit matter. Please refer to Notes 4(11) and 19 to the Parent Company Only Financial Statements.

In connection with the above key matter, I conducted the following principal audit procedures:

To understand, evaluate and test the effectiveness of the design and implementation of the internal control system related to revenue recognition.
To obtain a detailed sales breakdown from specific customers in fiscal 2020, verify the original orders, delivery notes, invoices and other related documents of the relevant transactions, and verify with the recorded amounts to confirm the authenticity of the revenues.
To obtain a breakdown of subsequent sales returns from specific customers, verify the related documents and examine the reasonableness of the returns.

Responsibilities of management and directors for the Parent Company Only

Financial Statements

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Management is responsible for the preparation of Parent Company Only Financial Statements that give a true and fair view in accordanc e with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition.

In preparing the Parent Company Only Financial Statements, management is responsible for assessing the ability of Sanitar Co., Ltd. to continue as going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate Sanitar Co., Ltd. or to cease operations, or has no realistic alternative, but to do so.

The responsibilities of the governing body (including supervisors) i nclude overseeing the financial reporting process of Sanitar Co., Ltd. Auditors’ responsibilities for the audit of the Parent Company Only Financial Statements

My objectives are to obtain reasonable assurance about whether the Parent Company Only Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes my opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken in the basis of these Parent Company Only Financial Statements.

As part of an audit in accordance with GAAS, I exercise professional judgment and maintain professional skepticism throughout the audit. I also:

Identify and assess the risks of material misstatement of the Parent Company Only Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for audit opinions. Because fraud may be related to conspiracy, forgery, deliberate omission, false statement or breach of internal control, the risk of a material

182

misstatement caused by fraud which is not identified is higher than th e risk of a material misstatement caused by any error.

Obtain an understanding of internal controls 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 internal control effectiveness of Sanitar Co., Ltd.
Assess the appropriateness of management’s use of accounting policies and the reasonability of the accounting estimate and relevant disclosure.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of Sanitar Co., Ltd. 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 Parent Company Only Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause Sanitar Co., Ltd. to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the Parent Company Only Financial Statements (including the relevant notes), and whether the Parent Company Only Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.
I have obtained sufficient and appropriate evidence to audit the Parent Company Only Financial Information of Sanitar Co., Ltd. to express an opinion on the Parent Company Only Financial Statements. I am responsible for the guidance, supervision and execution of the audit an d for forming an audit opinion on Sanitar Co., Ltd.
I communicate with the governing body regarding, among other matters, the
planned scope and timing of the audit and significant audit findings (including any significant deficiencies in internal controls that we identify during our audit).

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I have also provided the governing body with a statement that the independence-regulated personnel of the firm to which I am affiliated have complied with the Code of Ethics for Professional Accountants with respect to independence, and communicate with the governing body about all relationships and other matters (including related protective measures) that may be considered to affect the accountant's independence.

I have determined the key audit matter for the audit of the Parent Company Only Financial Statements of Sanitar Co., Ltd. for the year ended December 31, 2020 from the communications I have had with the governing body. I identified such matter in my auditor's report, except for those matters that are not p ermitted by law to be disclosed publicly or, in the rarest of circumstances, I decided not to communicate those matters in my auditor's report because I reasonably could expect the negative effect of such communication to outweigh the public interest.

Deloitte & Touche Accountant SU, YU-XIU Accountant WENG, BO-REN

FSC Approval Number: Jin-Guan-Zheng-Shen-Zi No.1040024195

FSC Approval Number: Jin-Guan-Zheng-Shen-Zi No. 1010028123

March 9, 2021

184

Sanitar Co., Ltd.

Parent Company Only Statement of Financial Position As of Dec. 31, 2020 and Dec. 31, 2019

Unit: NT$ thousands

C o d e 1100 1150 1170 1180 1200 1210 130X 1419 1421 1479 11XX 1517 1550 1600 1755 1780 1840 1915 1920 1990 15XX 1XXX Code 2100 2130 2170 2180 2200 2230 2280 2399 21XX 2570 2580 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 3XXX	Assets Current assets Cash and cash equivalents (Note IV, VI and XXIV) Notes receivable, net (Note IV, VIII and XXIV) Net value of accounts receivable (Note IV, VIII, XIX and XXIV) Accounts receivable`－`Related parties, net (Note IV, VIII, XIX, XXIV and XXV) Other receivables (Note IV and XXIV) Other receivables`－`related parties (Note IV, XXIV and XXV) Inventory (Note IV and IX) Other prepaid expenses Prepayments Other current assets`－`Other (Note XIV) Total current assets Non-current assets Financial assets measured at fair value through other comprehensive income - non-current (Note VII and XXIV) Investment accounted for using the equity method (Note IV and X) Property, plant and equipment (Note IV, XI and XXVI) Right-of-use assets (Note IV and XII) Intangible assets (Note IV and XIII) Deferred income tax assets (Note IV and XXI) Prepayments for business facilities (Note XXVII) Refundable deposits Other non-current assets`－`other (Note VIII and XIV) Total non-current assets Total assets Liabilities and Equity Current liabilities Short-term loans (Note XV and XXIV) Contract liabilities - current (Note IV and XIX) Accounts payable (Note XVI and XXIV) Accounts payable`－`related parties (Note XVI, XXIV and XXV) Other payables (Note XVII and XXIV) Current income tax liabilities (Note IV, XXI and XXIV) Lease liabilities - current (Note IV, XII and XXIV) Other current liabilities`－`other (Note XXIV) Total current liabilities Non-current liabilities Deferred income tax liabilities (Note IV and XXI) Lease liabilities - non-current (Note IV, XII and XXIV) Non-Total current liabilities Total liabilities Equity (Note IV, XVIII and XXI) Share capital Common shares Additional paid-in capital Retained earnings Legal reserve Special reserve Unappropriated retained earnings Total retained earnings Other equity Treasury shares Total liabilities Total liabilities and equity		Dec. 31, 2020		`％` 2 1 7 1 - 1 7 - 1 - 20 - 54 22 1 - 3 - - - 80 100 10 - 2 - 3 2 - - 17 8 1 9 26 32 12 9 7 25 41 10) 1) 74 100		Dec. 31, 2019
			Amount $ 53,805 13,804 163,618 8,373 304 30,251 164,705 2,185 11,848 2,160 451,053 262 1,238,720 500,848 35,636 1,009 62,653 - 4,720 - 1,843,848 $ 2,294,901 $ 233,000 2,492 33,542 - 61,886 46,972 10,095 7,533 395,520 170,766 25,800 196,566 592,086 726,000 277,452 220,568 166,030 565,898 952,496 237,459) 15,674) 1,702,815 $ 2,294,901				Amount $ 82,077 14,519 142,382 3,419 305 28,037 142,131 2,130 2,237 563 417,800 - 1,340,484 503,335 35,007 261 44,555 458 4,330 - 1,928,430 $ 2,346,230 $ 325,000 826 39,931 1 55,953 16,409 8,282 3,275 449,677 176,544 26,763 203,307 652,984 726,000 277,452 202,583 146,675 506,566 855,824 166,030) - 1,693,246 $ 2,346,230		`％`
		( (		( (		(		(	4 1 6 - - 1 6 - - - 18 - 57 21 2 - 2 - - - 82 100 14 - 2 - 2 1 - - 19 8 1 9 28 31 12 9 6 21 36 7) - 72 100

The notes to the parent company only financial statements are part of the parent company only financial statements and should be read together.

Chairperson: HSIAO, CHUN-XIANG

Manager: CHEN, WEI-CHIH

Accounting Supervisor: CHEN, YU -CHUAN

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Sanitar Co., Ltd.

Parent Company Only Statements of Comprehensive Income From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019

Unit: NT$ thousands, Except the earnings per share are in NT$

C o d e Operating revenue (Note IV, XIX and XXV) 4110 Sales revenue 4170 Sales return 4190 Sales allowances 4800 Other operating revenue 4000 Total operating revenue Operating costs (Note VIII, XX and XXV) 5110 Cost of sales 5800 Other operating costs 5000 Total operating costs 5900 Gross operating profit Operating expenses (Note XX) 6100 Marketing expenses 6200 Management expenses 6300 R&D expenses 6450 Expected credit losses 6000 Total operating expenses 6500 Other income and expenses, net (Note XX) 6900 Net operating profit Non-operating income and expenses (Note IV) 7070 Share of the profit or loss of subsidiaries and associates accounted for using the equity method 7100 Interest income 7110 Rental income 7190 Other income	2020	`％` 100 ( 1 ) ( 1 ) 2 100 ( 67 ) ( 3) (70) 30 ( 8 ) ( 6 ) ( 1 ) - (15) - 15 4 - - -	2019
	A m o u n t $ 1,466,621 ( 7,017 ) ( 17,284 ) 29,076 1,471,396 ( 979,919 ) ( 45,579) (1,025,498) 445,898 ( 125,529 ) ( 86,758 ) ( 8,003 ) ( 2,270) ( 222,560) ( 822) 222,516 58,949 40 530 5		A m o u n t $ 1,303,656 ( 24,112 ) ( 6,976 ) 27,615 1,300,183 ( 914,074 ) ( 42,561) ( 956,635) 343,548 ( 97,883 ) ( 77,265 ) ( 7,083 ) ( 1,794) ( 184,025) ( 1) 159,522 71,890 73 2,286 1	`％`
				100 ( 2 ) - 2 100 ( 71 ) ( 3) (74) 26 ( 7 ) ( 6 ) ( 1 ) - (14) - 12 6 - - -

(Continued on the next page)

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(Continued from the previous page)

C o d e 7510 Interest expense 7230 Foreign exchange gain 7630 Foreign exchange loss 7000 Non-operating Total income and expenses 7900 Net profit before tax 7950 Income tax expense (Note IV and XXI) 8200 Net income in the fiscal year Other comprehensive income (Note IV, XVIII and XXI) 8310 Items that will not be reclassified to profit or loss: 8316 Investment in equity instruments measured at Unrealized gains or losses measured at FVTOCI 8360 Amount of items that may be reclassified subsequently to profit or loss`：` 8380 Share of the other comprehensive income of subsidiaries, associates and joint ventures accounted for using the equity method 8399 income tax related to the items that may be reclassified 8300 Other comprehensive income in the fiscal year (net value after tax) 8500 Total comprehensive income in the fiscal year	2020
	A m o u n t ( $ 4,043 ) - 932 54,549 277,065 ( 56,973) 220,092 ( 2,738 ) ( 85,864 ) 17,173 ( 68,691) ( 71,429) $ 148,663

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Earnings per share (Note XX) 9750 Basic 9850 Diluted	$ 3.04 $ 3.03	$ 2.48
		$ 2.47

The notes to the parent company only financial statements are part of the parent company only financial statements and should be read together.

Chairperson: HSIAO,CHUN-XIANG Manager:CHEN, WEI-CHIH Accounting Supervisor: CHEN, YU-CHUAN

188

O t h e r e q u i t y

Sanitar Co., Ltd. Parent Company Only Statement of Changes in Equity From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019

Unit: NT$ thousands

Code A1 Balance as of Jan. 1, 2019 Appropriation and distribution of earnings in 2018 B1 Legal reserve B3 Special reserve B5 Cash dividends D1 Net income for 2019 D3 Other comprehensive income after tax, 2019 D5 2019The total comprehensive income Z1 Balance as of Dec. 31, 2019 Appropriation and distribution of earnings in 2019 B1 Legal reserve B3 Special reserve B5 Cash dividends D1 Net income for 2020 D3 Other comprehensive income after tax, 2020 D5 The total comprehensive income in 2020 L1 Purchase of treasury shares	S h a r e c a p i t a l N u m b e r o f shares (1,000 s h a r e s ) Share capital 72,600 $ 726,000 - - - - - - - - - - - - 72,600 726,000 - - - - - - - - - - - - - -	S h a r e c a p i t a l N u m b e r o f shares (1,000 s h a r e s ) Share capital 72,600 $ 726,000 - - - - - - - - - - - - 72,600 726,000 - - - - - - - - - - - - - -	A d d i t i o n a l paid-in capital $ 277,452 - - - - - - 277,452 - - - - - - -	R e t a i n	e d e a r n i n g s Special reserve Unappropriate d retained earnings $ 150,895 $ 514,876 - ( 25,401 ) ( 4,220 ) 4,220 - ( 166,980 ) - 179,851 - - - 179,851 146,675 506,566 - ( 17,985 ) 19,355 ( 19,355 ) - ( 123,420 ) - 220,092 - - - 220,092 - -	Exchange difference arising from translation of foreign operation financial statements ( $ 146,675 ) - - - - ( 19,355) ( 19,355) ( 166,030 ) - - - - ( 68,691) ( 68,691) -	Unrealized gains or losses on financial assets at fair value through other comprehensive income $ - - - - - - - - - - - - ( 2,738) ( 2,738) -	T r e a s u r y s h a r e s $ - - - - - - - - - - - - - - ( 15,674)	Total equity
	N u m b e r o f shares (1,000 s h a r e s ) 72,600 - - - - - - 72,600 - - - - - - -			Legal reserve $ 177,182 25,401 - - - - - 202,583 17,985 - - - - - -	Special reserve $ 150,895 - ( 4,220 ) - - - - 146,675 - 19,355 - - - - -
							( (	(	$ 1,699,730 - - ( 166,980 ) 179,851 ( 19,355) 160,496 1,693,246 - - ( 123,420 ) 220,092 ( 71,429) 148,663 ( 15,674)

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Z1 Balance as of Dec. 31, 2020 72,600 $ 726,000 $ 277,452 $ 220,568 $ 166,030 $ 565,898 ( $ 234,721 ) ( $ 2,738 ) ( $ 15,674 ) $ 1,702,815

The notes to the parent company only financial statements are part of the parent company only financial statements and should be read together. Manager: CHEN, WEI-CHIH Accounting Supervisor: CHEN, YU-CHUAN

Chairperson: HSIAO, CHUN-XIANG

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Sanitar Co., Ltd.

Parent Company Only Statements of Cash Flows From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019

Unit: NT$ thousands

C o d e Cash flow from operating activities A10000 Net profit before tax in the current period A20010 Income charges (credits) A20100 Depreciation expense A20200 Amortization expense A20300 Expected credit losses A20900 Financial costs A21200 Interest income A22400 Share of the profit or losses of the subsidiaries, associates and joint ventures accounted for using the equity method A22500 Gain on the disposal of property, plant and equipment A23800 Loss from market price decline and obsolete and slow-moving inventory (gain from price recovery) A29900 Profit from lease modification A30000 Net changes in operating assets and liabilities A31130 Notes receivable A31150 Accounts receivable A31160 Accounts receivable `－`Related parties A31180 Other receivables A31190 Other receivables `－`Related parties A31200 Inventory A31220 Other prepaid expenses A31230 Prepayments A31240 Other current assets A32125 Contract liabilities - current A32150 Accounts payable A32160 Accounts payable `－`Related parties A32180 Other payables A32230 Other current liabilities A33000 Cash from operating activities A33100 Interests received	2020 $ 277,065 32,805 282 2,270 4,043 ( 40 ) ( 58,949 ) ( 41 ) 2,786 ( 103 ) 715 ( 23,506 ) ( 4,954 ) ( 1 ) ( 2,214 ) ( 25,360 ) ( 55 ) ( 9,611 ) ( 1,597 ) 1,666 ( 6,389 ) ( 1 ) 6,190 4,258 199,259 42	2019
		$ 231,275 22,479 879 1,794 2,898 ( 73 ) ( 71,890 ) ( 146 ) ( 2,500 ) - 13,886 ( 17,212 ) ( 1,063 ) ( 226 ) ( 13,198 ) ( 6,620 ) 468 570 163 826 ( 32,736 ) ( 2,837 ) ( 21,845 ) 495 105,387 73

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A33300	Interests paid	(	4,100 )	(	2,519 )
A33500	Income tax paid	(	33,113)	(	42,688)
AAAA	Net cash inflow from operating
	activities		162,088		60,253
(Continued	on the next page)

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(Continued from the previous page)

C o d e Cash flow from investing activities B00010 Acquisition of financial assets measured at fair value through other comprehensive income B01800 Acquisition of long-term equity investment accounted for using the equity method B02700 Purchase of property, plant and equipment B02800 Price for the disposal of property, plant and equipment B03700 Increase in refundable deposits B03800 Decrease in refundable deposits B04500 Acquisition of intangible assets B07100 Decrease (increase) in prepayments for business facilities B07600 Dividends from subsidiaries BBBB Net cash flow from investing activities (outflow) Cash flow from financing activities C00100 Increase in short-term loans C00200 Decrease in short-term loans C04020 Repayment of lease principal C04500 Issuance of cash dividends C04900 Redemption cost for treasury shares CCCC Cash inflow (outflow) from financing activities EEEE Increase (decrease) in cash and cash equivalents E00100 Beginning balance of cash and cash equivalents E00200 Ending balance of cash and cash equivalents	2020 ( $ 3,000 ) ( 13,260 ) ( 19,931 ) 270 ( 630 ) 240 ( 1,030 ) 458 88,109 51,226 433,000 ( 525,000 ) ( 10,492 ) ( 123,420 ) ( 15,674) (241,586) ( 28,272 ) 82,077 $ 53,805	2019
		$ - - ( 39,675 ) 216 ( 1,952 ) - ( 359 ) ( 3,248 ) - ( 45,018) 210,000 - ( 6,652 ) ( 166,980 ) - 36,368 51,603 30,474 $ 82,077

The notes to the parent company only financial statements are part of the parent company only financial statements and should be read together.

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Chairperson: HSIAO, CHUN-XIANG Manager:CHEN, WEI-CHIH Accounting Supervisor: CHEN, YU-CHUAN

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Sanitar Co., Ltd.

Parent Company Only Financial Statement Notes

From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019

(Unless otherwise specified, the basic unit for any amount shall be NT$ 1,000.)

I. Company history

Sanitar Co., Ltd. was established in 1985as a sanitary ware manufacturer and seller, and was reorganized and established on January 26, 1988 s San Yu Xing Ye Co, Ltd. And was renamed as Sanitar Co., Ltd. in 2003. The company is mainly engaged in the sales of bathtubs, toilets and other sanitary equipment, and water supply brassware.

In August 2011, the Company was approved by TPEX for trading on the stock exchange and was listed and traded on the Taiwan Stock Exchange on October 24, 2013.

The parent company only financial reports were expressed with the functional currency, New Taiwan Dollar, adopted by the Company. II. The date when the financial reports were authorized for issuance and the process involved

The parent company only financial reports were approved by Board of Directors on March 9, 2021.

III. Applicability of new issuing & revised standards and interpretation

(I) First-time application of IFRSs recognized and announced effectiveness by FSC.

Except for the following statements, the application of IFRSs that are recognized and announced as effective by FSC won’t cause any major changes to the accounting policies of the Merged company:

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

The amendment applied to the Company from January 1, 2020, switching to ''it could reasonably be expected to influence users'' as the materiality threshold and adjusting the disclosure in the Parent Company Only Financial Statements to remove immaterial information that could obscure material information.

195

(II) IFRSs recognized by the FSC applicable in 2021

New/amended/revised standards and interpretations Amendments to IFRS 4 “Extension of Temporary Exemption from Applying IFRS 9 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform - Phase II” Amendments to IFRS 16 “Covid-19 Related Rent Concessions”	Effective date published by I A S B
	Effective from the date of publication Effective for annual reporting periods beginning on or after January 1, 2021 Effective for annual reporting periods beginning on or after June 1, 2020

Amendments to IFRS 16 “Covid -19 Related Rent Concessions”

The amendment to IFRS 16, "Lease reductions related to novel coronavirus," provides that if the Company enters into a lease negotiation with a lessor directly related to coronavirus, the Company may, at its option and when certain conditions are met, recognize a reduction in lease payments in profit or loss upon the occurrence of the reduction event or condition and reduce Lease liabilities accordingly. Lease liabilities are reduced accordingly.

The Company has not yet negotiated rent in connection with the foregoing in 2020, but will elect to apply the foregoing if such negotiation occurs in 2021.

(III) IFRSs announced by IASB but have not been approved as effective by the FSC

Effective date published by I A S B ( N o t e 1 ) Jan. 1, 2022 (Note 2)

New/amended/revised standards and interpretations “Annual Improvements for 2018-2020” Amendments to IFRS 3 “Updating a Reference to the Conceptual Framework” Amendments to IFRS 10/IAS 28 “Sales or Contributions of Assets Between an Investor and Its Associate/Joint Venture IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

Jan. 1, 2022 (Note 3) TBD

IFRS 17 “Insurance Contracts” Jan. 1, 2023 Amendments to IFRS 17 Jan. 1, 2023 Amendments to IAS 1 “Classification of Liabilities Jan. 1, 2023 as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Jan. 1, 2023 (Note 6) Policies”

Amendments to IAS 8 “Definition of Accounting Jan. 1, 2023 (Note 7) Estimates”

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Amendments to IAS 16 “Property, Plant and Jan. 1, 2022 (Note 4) Equipment: Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts—Cost Jan. 1, 2022 (Note 5) of Fulfilling a Contract”

Note 1: Other than being special specified, the above new issued/ amended/ revised standards or interpretation will be effective from the fiscal year after the dates for above.
Note 2: The amendments to IFRS 9 apply to swaps or changes in the terms of financial liabilities occurring in annual reporting periods beginning after Jan. 1, 2022; the amendments to IAS 41 “Agriculture” apply to fair value measurements in annual reporting period
Note 3: The amendments apply to business combinations for which the acquisition date begins on or after Jan. 1, 2022 in the annual reporting period.
Note 4: The amendments apply to the plant, property and equipment that will be in the location and condition necessary to achieve management’s intended mode of operation beginning on or after Jan. 1, 2021.
Note 5: The amendments apply to contracts with all obligations outstanding as at Jan. 1, 2022.
Note 6: The amendments apply prospectively to annual reporting periods beginning on or after Jan. 1, 2023.
Note 7: The amendments apply to changes in accounting estimates and changes in accounting policies that occur in annual reporting periods beginning on or after Jan. 1, 2023.
Amendments to IFRS 10 and IAS 28 "Sale or contribution of assets between an investor and its associates or joint ventures The amendment provides that if the Company sells or invests

an asset to an associate (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

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aforementioned asset or former subsidiary meets the definition of "business combination" for "business" under IFRS 3.

In addition, if the Company sells or invests in an asset to an Associate (or joint venture), or if the Company loses control of a subsidiary in a transaction with an Associate (or joint venture) but retains significant influence (or joint control) over the subsidiary, the Company recognizes the gain or loss resulting from the transaction only to the extent that it is not related to the investor's interest in the asset or former subsidiary within the meaning of IFRS 3, "Business". If the aforementioned asset or former subsidiary does not meet the definition of a "business" under IFRS 3, the Company recognizes the gain or loss from the transaction only to the extent of the investor's interest not related to the Associates (or joint venture), i.e., the Company's share of the gain or loss is eliminated.

Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

The amendments clarify that in determining whether a liability is classified as non-current, an assessment should be made as to whether the Company has the right to defer settlement at the end of the reporting period until at least 12 months after the reporting period. If the Company has such a right at the end of the reporting period, the liability is classified as non-current, regardless of whether the Company expects to exercise the right. The amendments also clarify that if required to comply with certain conditions in order to have the right to defer settlement of its liabilities, the Company must have followed the specified conditions as at the end of the reporting period, even if the lender tests whether the Company has adhered to those conditions at a later date.

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the counterparty. However, if the terms of a liability may, at the option of the counterparty, result in the settlement of an equity instrument of the Company, and if the option is separately recognized in equity in accordance with IAS 32 "Financial Instruments: Presentation," the foregoing terms do not affect the classification of the liability.

Amendments to IAS 1 “Disclosure of Accounting Policies”

The amendments specify that the Company shall determine the material accounting policy information to be disclosed based on the definition of material. Accounting policy information is material if it could reasonably be expected to influence the decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

(1) accounting policy information relating to immaterial transactions, other events or conditions is immaterial and that the Company is not required to disclose such information.
(2) the Company may judge relevant accounting policy information to be material because of the nature of the transactions, other events or conditions, even if the sums are not material.
(3) not all accounting policy information relating to significant transactions, other events or conditions is material.

In addition, the amendments cite examples of accounting policy information that may be material if it relates to significant transactions, other events or conditions and if:

(1) the Company changes its accounting policy during the reporting period and the change results in a material change in financial statement information;
(2) the Company selects its applicable accounting policy from the options permitted by the standard;
(3) the Company, due to the absence of a specific standard, establishes an accounting policy pursuant to IAS 8

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"Accounting Policies, Changes in Accounting Estimates and Errors";
(4) the Company discloses a relevant accounting policy that requires the application of significant judgement or assumptions; or
(5) involve complex accounting requirements and users of the financial statements rely on such information to understand those significant transactions, other events or conditions.

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4. Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments expressly state that the accounting estimates represent the monetary amounts in the financial statements that are subject to measurement uncertainty. In applying accounting policies, the Company may need to measure items in the financial statements using monetary amounts that are not directly observable but must be estimated, and therefore measurement techniques and inputs are used to create accounting estimates for this purpose. The effect of changes in measurement techniques or inputs on accounting estimates that are not corrections of prior period errors are accounted for as changes in accounting estimates.

In addition to the impact described above, the Company is continuing to evaluate the impact of amendments to other standards and interpretations on its financial position and financial performance as of the date of adoption and publication of these parent company only financial reports, which will be disclosed when the evaluation is completed.

IV. Summary and explanation of material accounting policies

(I) Compliance statement

The Parent Company Only Financial Statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(II) Basis of preparation

The Parent Company Only Financial Statements have been prepared on the historical cost basis, except for financial instruments measured at fair value.

Fair value measurement can be classified as level 1 to level 3 according to the observable degrees and importance of the relevant input values:

Level 1 input value: It refers to the quoted price at the active market on the same asset or liability available on the measurement day (unadjusted).

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Level 2 input value: It refers to the direct (that is the price) or indirect (inferred from the price) observable input values on asset or liability other than the level 1 quoted price.
Level 3 input value: Unobservable input value of asset or liability. In preparing the Parent Company Only Financial Statements, the Company uses the equity method of accounting for its investee subsidiaries. In order to make the profit or loss for the year, other comprehensive income or loss and equity in the Parent Company Only Financial Statements the same as the profit or loss for the year, other comprehensive income or loss and equity attributed to the owners of the Company in the Parent Company Only Financial Statements, certain accounting differences between the parent company only basis and the consolidated basis are adjusted for "investments accounted for using the equity method", "share of the profit or loss of subsidiaries and associates accounted for using the equity method" and "share of other comprehensive income or loss of subsidiaries, affiliates and joint ventures accounted for under the equity method" and related equity items.
(III) Standard in determining whether the asset or liability are current or non-current

Current assets include:

assets held mainly for transaction purposes;
assets to be realized within 12 months of the asset balance sheet; and
cash and cash equivalents (but not including cash used to exchange or clear liability within 12 months of the asset balance sheet).

Current liabilities include:

liabilities held mainly for transaction purposes;
liabilities due for payment within 12 months after the balance sheet date (a liability with long-term refinancing done or payment agreement rearranged also belongs to the current liabilities); and
the business entity does not have an unconditional right to defer settlement of the liability for at least 12 months after the balance

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sheet date. However, where the terms of the liabilities may, at the option of the counterparty, lead to the settlement by issuing an instrument of equity, the classification will not be affected.

Assets or liabilities not classified within the above definitions will be classified as non-current assets and liabilities.

(IV) Foreign Currency

The Company prepares financial statements in currencies other than the Company's functional currency (foreign currencies) and translates them into the functional currency at the exchange rate on the transaction date.

Monetary items denominated in foreign currencies are translated at the closing rate at each balance sheet date. Exchange differences arising from the settlement of monetary items or the translation of monetary items are recognized in profit or loss in the period in which they occur.

Non-monetary items measured at fair value in foreign currencies are translated at the exchange rates prevailing on the date the fai r value was determined, and the resulting exchange differences are recognized in profit or loss for the current period, except for changes in fair value recognized in other comprehensive income, in which case the resulting exchange differences are recorded in other comprehensive income. The exchange differences arising from changes in fair value recognized in other comprehensive income are recorded as other comprehensive income.

Non-monetary items denominated in foreign currencies that are measured at historical cost are translated at the exchange rates prevailing on the dates of transactions and are not retranslated.

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(V) Inventory

Inventories refer to commodity inventories. Inventories are measured at the lower of cost or net realizable value. Comparisons between cost and net realizable value are made on an item-by-item basis, except for similar inventories. Net realizable value is the estimated selling price under normal circumstances less the estimated cost to complete the sale. The weighted-average method is used to calculate the cost of inventories.

(VI) Investment accounted for using the equity method

The Company accounts the equity method for the investment of the subsidiaries.

A subsidiary is an individual unit under the control of the Company.

The original investment under the equity method is recognized by cost. The carrying amount obtained shall increase or decrease based on the distribution of the income of the subsidiary, and the shares and profits of other comprehensive income. The change of equity of the subsidiary is recognized based on the shareholding ratio.

When the change in the Company's ownership interest in a subsidiary does not result in a loss of control, it is treated as an equity transaction. The difference between the carrying amount of the investment and the fair value of the consideration paid or received is recognized directly in 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 substantially a component of the Company's net investment in the subsidiary), the loss continues to be recognized in proportion to the Company's equity in the subsidiary.

If the acquisition cost exceeds the identifiable asset and the fair value of net indebtedness of the subsidiary on the acquisition date, it shall be counted as the goodwill. The goodwill is included in the carrying amount of the investment and shall not be amortized. If the identifiable asset and the fair value of net indebtedness of the

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subsidiary exceeds the acquisition cost on the acquisition date, it shall be listed as the current yield.

The overall assessment on the impairment of assets is based on th e cash generating unit of the financial statement, and to compare the recoverable amount with the carrying amount. If the recoverable amount increases afterwards, the impairment loss shall be reversed as profit, only the carrying amount of the assets after reversal of impairment loss shall not be more than the carrying amount after subtracting the amortization when the impairment loss has not yet been recognized. The impairment loss attributing to the goodwill shall not be reversed subsequently.

When control over a subsidiary is lost, the Company measures its remaining investment in the former subsidiary at the Fair value at the date of loss of control. The difference between the Fair value of the remaining investment and any disposal price and the Carryin g amount of the investment at the date of loss of control is recognized in profit or loss for the period. In addition, all Amounts recognized in Other comprehensive income related to the subsidiary are accounted for on the same basis as the Company's direct disposal of the related assets or liabilities.

The downstream transaction between the Company and the subsidiary shall be eliminated on the financial statement of the Parent Company when the income is not realized. The income of the upstream and side stream transactions between the Company and the subsidiary shall be recognized in the financial statement of the Parent Company within the realm that is unrelated to the subsidiary’s interests from the Company.

(VII) Property, plant and equipment

Property, plant, and equipment are recognized by cost, and then measured by cost less accumulated depreciation and accumulated impairment loss.

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These assets are classified into the appropriate categories of property, plant and equipment and depreciation commences when they are completed and in their intended state of use.

The property, plant, and equipment are depreciated separately for each major part by the straight-line basis method over the life of service. The Company reviews the estimated useful lives, residual values and depreciation methods at least at each year-end and defers the effect of changes in applicable accounting estimates.

The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss when property, plant, and equipment are derecognized.

(VIII) Intangible assets
Individual acquisition

Intangible assets with limited duration acquired separately were initially measured at cost and subsequently at cost less accumulated amortization and accumulated impairment losses. Intangible assets are amortized over their useful lives on a straight-line basis and the estimated useful lives, residual values and amortization method are reviewed at least at each year -end and the effect of changes in applicable accounting estimates is deferred. Intangible assets with indefinite useful lives are stated at cost less accumulated impairment losses.

Derecognition

The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss of the year when intangible assets are derecognized.

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(IX) Impairment of property, plant and equipment, right-of-use assets and intangible assets

The Company assesses at each balance sheet date whether there is any indication that property, plant and equipment, right -of-use assets and intangible assets may have been impaired. If any sign of impairment exists, the recoverable amount of the asset is estimated. If it is impossible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the asset at the cash generating unit.

Intangible assets with indefinite useful lives and not yet available for use are tested for impairment at least annually and whenever there is an indication of impairment.

The recoverable amount is the higher fair value less selling cost and use value. If the recoverable amount of an individual asset or cash generating unit is less than its carrying amount, the carrying amount of the asset or cash generating unit shall be reduced to its recoverable amount, with the impairment loss recognized in profit or loss.

When the following recoverable amount increases, the carrying amount of the asset or cash generating unit increases to the amount that can be recovered after the revision. However, the increased c arrying amount shall not exceed that (minus amortization or depreciation) determined by the asset or cash generating unit where the impairment loss was not recognized in the previous year. The reversal of impairment loss is recognized in profit or loss.

(X) Financial instruments

Financial assets and financial liabilities are recognized in the Parent Company Only Statement of Financial Position when the Company becomes a party to the contractual provisions of the instrument.

On initial recognition, financial assets and financial liabilities that are not measured at fair value through profit or loss are measured at fair value plus transaction costs that are directly attributable to the acquisition or issuance of the financial assets or financial liabilities. Transaction costs directly attributable to the acquisition or issue of

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financial assets or financial liabilities measured at fair value thr ough profit or loss are recognized immediately in profit or loss.

Financial assets

The transaction practice of the financial assets adopts accounting recognition and de-recognition on the transaction day. (1) Measurement types

The types of financial assets held by the Company are investment in equity instruments measured at FVTOCI and financial assets measured at amortized cost.

A. Financial assets measured at amortized cost

The Company's investments in financial assets are classified as financial assets measured at amortized cost if both of the following conditions are met:

a. they are held within an operating model whose objective is to hold the financial assets to collect the contractual cash flows; and
b. the contractual terms give rise to cash flows at a specific date, which are solely payments of principal and interest on the principal amount outstanding.

Financial assets measured at amortized cost (including cash and cash equivalents, notes receivable, accounts receivable and other receivables measured at amortized cost) are measured at amortized cost using the effective interest method to determine the total carrying amount less any impairment loss after initial recognition, with any foreign currency exchange gain or loss recognized in profit or loss.

Interest income is calculated by multiplying the effective interest rate by the total carrying amount of the financial assets, except in the following two cases:

a. Interest income on credit-impaired financial assets acquired or created is calculated by multiplying the credit-adjusted effective interest rate by the amortized cost of the financial assets.

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b. Interest income is calculated by multiplying the effective interest rate by the amortized cost of the financial asset for financial assets that are not acquired or originated as credit-impaired but subsequently become credit-impaired.

Credit-impaired financial assets means that the issuer or the debtor has experienced significant financial difficulties, defaulted, there is a high probability that the debtor will file for bankruptcy or other financial reorganization or that an active market for financial assets will disappear due to financial difficulties.

Cash equivalents include time deposits that are highly liquid, readily convertible into known amounts of cash and subject to a low risk of changes in value within 3 months from the date of acquisition and are used to meet short-term cash commitments.

B. Investment in equity instruments measured at FVTOCI

At initial recognition, the Company has an irrevocable option to designate investments in equity instruments that are not held for trading and for which there is contingent consideration recognized by the acquirer of the business combination to be measured at fair value through other comprehensive income.

Investments in equity instruments measured at fair value through other comprehensive income are measured at fair value, with subsequent changes in fair value reported in other comprehensive income and accumulated in other equity. On disposal of investments, the cumulative gain or loss is transferred directly to retained earnings and is not reclassified to profit or loss.

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it is clear that the dividend represents a partial recovery of the cost of the investment.

(2) The impairment of financial assets

The Company assesses the impairment losses of financial assets (including notes receivable, accounts receivable and other receivables) measured at amortized cost at each balance sheet date based on expected credit losses.

Accounts receivable are recognized as an allowance for loss based on expected credit losses during the period of duration. Other financial assets are first evaluated to determine whether there is a significant increase in credit risk since initial recognition. If not, they are recognized as an allowance for loss based on expected credit losses over 12 months, and if so, based on expected credit losses over the duration period.

Expected credit losses are the average credit losses weighted by the risk of default. The 12-month expected credit loss represents the expected credit loss arising from default events on a financial instrument that are possible within the 12 months after the reporting date, while the expected credit loss over the life of the instrument represents the expected credit loss resulting from all default events on a financial instrument that are possible over the expected life.

For internal credit risk management purposes, the Company determines, without regard to its collateral holdings, that a default on financial assets has occurred in the following circumstances.

A. There is internal or external information indicating that the debtor is unlikely to be able to pay its debts.
B. If the date is more than a certain number of days past due, unless there is reasonable and supportable information indicating that a delayed default basis is more appropriate.

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The impairment loss on all financial assets is reduced by the Carrying amount of the allowance account and does not reduce the Carrying amount of the financial assets.

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(3) Derecognition of financial assets

The Company derecognizes financial assets only when the contractual rights to the cash flows from the financial assets have lapsed or when the financial assets have been transferred and substantially all the risks and rewards of ownership of the assets have been transferred to other enterprises.

When financial assets are derecognized in their entirety at amortized cost, the difference between the carrying amount and the consideration received is recognized in profit or loss. When investments in equity instruments measured at fair value through other comprehensive income are derecognized as a whole, the cumulative gain or loss is transferred directly to retained earnings and is not reclassified to profit or loss.

Financial liability
(1) Subsequent measurement

All of the financial liability should be measured at the amortized costs through effective interest rate.

(2) Derecognition of financial liability

When derecognizing the financial liability, the difference between its book value amount and the consideration (including any non-cash asset transferred or the liability borne) paid will be recognized as income.

(XI) Income recognition

The Company allocates the transaction price to each performance obligation after the performance obligation is identified in the customer contract and recognizes revenue when each performance obligation is satisfied.

If the interval between the transfer of merchandises or services and the receipt of consideration is less than one year, no adjustment is made to the transaction price for the significant financing component of the contract.

Sales revenue

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Sales revenue is derived from the sale of porcelain toilets, faucets, and other sanitary equipment products. The Company recognizes revenue and accounts receivable at the point of shipment because the customer has the right to set the price and use the products and has the primary responsibility for re-selling the products and bears the risk of obsolescence of the products.

(XII)
Lease

The Company assesses whether a contract is (or contains) a lease at the contract inception date.

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1. The Company as lessor

If the lease clauses transfer nearly all risks and Compensation associated with the assets to the lessee, the lea se shall be classified as finance lease. All other leases shall be classified as business lease.

Under operating leases, lease payments, net of lease incentives, are recognized as income on a straight-line basis over the term of the relevant lease. The original direct costs incurred in acquiring an operating lease are added to the carrying amount of the subject asset and recognized as an expense on a straight-line basis over the lease term.

2. The Company as lessee

Right-of-use assets and lease liabilities are recognized at the inception date of the lease, except for leases of low-value subject assets to which a recognition exemption applies and short -term leases where lease payments are recognized as an expense on a straight-line basis over the lease term.

Right-of-use assets are measured initially at cost (comprising the original measurement of the lease liability, lease payments made prior to the commencement date of the lease less lease incentives received, original direct cost and estimated cost to reinstate the subject asset) and subsequently at cost less accumulated depreciation and accumulated impairment losses, with adjustments for remeasurement of the lease liability. Right-of-use assets are presented separately on Parent Company Only Statement of Financial Position.

Right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease to the earlier of the end of the useful life or the end of the lease term.

Lease obligations are measured initially at the present value of the lease payments (comprising fixed payments, effective fixed payments, variable lease payments dependent on indices or rates). If the implied interest rate of the lease is readily determinable, the lease payments are discounted using that rate. If the rate is not

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readily determinable, the lessee's incremental borrowing rate is used.

Subsequently, lease liabilities are measured on an amortized cost basis using the effective interest method and interest expense is amortized over the lease term. If there is a change in future lease payments as a result of a change in the lease term, or in the index or rate used to determine the lease payments, the Company remeasures the lease liability and adjusts the right-of-use asset accordingly, except that if the carrying amount of the right -of-use asset is reduced to zero, the remaining remeasurement amount is recognized in profit or loss. Lease liabilities are presented separately on the Parent Company Only Statement of Financial Position.

Lease agreements that do not depend on changes in indices or rates are recognized as expenses in the period in which they are incurred.

(XIII) Income tax

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

Current income tax

The additional income tax on the undistributed surplus calculated in accordance with the Income Tax Act shall be included in the income tax expense for the year of resolution of the shareholders’ meeting.

The adjustment of income tax payable in the previous year shall be included in the current income tax.

2. Deferred income tax

Deferred income tax is calculated based on the temporary differences between the carrying amount of assets and liabilities on the books and the basis for the calculation of taxable income.

Deferred tax liabilities are generally recognized for all temporary differences in taxable income, while deferred tax assets are recognized when there is a high likelihood that the taxable

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income will be used as a tax deduction for deductible temporary differences.

Deferred tax liabilities are recognized for taxable temporary differences associated with investee subsidiaries, except where the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets are recognized for deductible temporary differences associated with such investments only to the extent that it is probable that sufficient taxable income will be available to allow the temporary differences to be realized and to the extent that reversal is expected in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced for those where it is no longer probable that there will be sufficient taxable income to allow all or part of the assets to be recovered. Deferred tax assets not previously recognized as such are also reviewed at each balance sheet date and the carrying amount is increased for those where it is probable that taxable income will be available to recover all or part of the assets.

Deferred tax assets and liabilities are measured by the tax rate of the expected liabilities settlement or assets realization in the current period, according to the tax rate and the tax law which have been legalized or substantively legalized on the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences of the way in which the Company is expected to recover or pay off the carrying amount of its assets and liabilities on the balance sheet date.

3. Current and deferred tax

The current and deferred tax are recognized in profit or loss, provided that the current and deferred tax in relation to the items recognized in other comprehensive income or directly included in equity are recognized in other comprehensive income or directly included in equity, respectively.

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V. Primary sources of uncertainty in major accounting judgments, estimates,

and assumptions

When the Company adopts an accounting policy, management must make relevant judgments, estimates, and assumptions of relevant information that is difficult to obtain from other sources based on historical experience and other relevant factors.

The Company has included the economic impact of the COVID -19 outbreak in the consideration of significant accounting estimates and the management will review the estimates and underlying assumptions on an ongoing basis. If an amendment to an estimate affects only the current period, the amendment is recognized in the period in which it is made. If an amendment to an accounting estimate affects both the current and future periods, the amendment is recognized in both the current and future periods.

VI. Cash and cash equivalents

Cash and cash equivalents
Cash on hand and working capital Checks and demand deposits	Dec. 31, 2020 $ 242 53,563 $ 53,805	Dec. 31, 2019
			$ 175 81,902 $ 82,077

VII. Financial assets measured at fair value through other comprehensive

income - non-current

income-non-current
Investment in equity instruments measured at FVTOCI Stock of unlisted companies Amsalp Biomedical Corporation	Dec. 31, 2020 $ 262	Dec. 31, 2019
			$ -

The Company invests in the above-mentioned items for medium- to long-term strategic purposes and expects to make profits from these investments over the long term. The Company's management believes that it is inconsistent with the aforementioned long-term investment plan to include short-term fluctuations in fair value of these investments in profit or loss, and therefore has chosen to designate these investments as fair value through Other comprehensive income.

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The Investment in equity instruments measured at FVTOCI were not 。 being pledged

VIII. Notes receivable and accounts receivable

Notes receivable Generated from operating activities Non-related parties Accounts receivable Non-related parties Minus: Allowance for bad debts Related parties	Dec. 31, 2020 $ 13,804 $ 167,803 ( 4,185) $ 163,618 $ 8,373	Dec. 31, 2019	Dec. 31, 2019
	(	(	$ 14,519 $ 144,175 1,793) $ 142,382 $ 3,419

The average credit period for merchandise sales ranges is from 30 to 90 days, and no interest is charged on Accounts receivable. To mitigate credit risk, the management of the Company assigns a dedicated team to ensure that appropriate actions are taken to collect overdue receivables. In addition, the Company reviews the recoverable amounts of receivables on a case-by-case basis at the balance sheet date to ensure that appropriate impairment losses are recorded for uncollectible receivables. Accordingly, the Company's management believes that the Company 's credit risk has been significantly reduced.

The lifetime expected credit losses are calculated using an provision matrix, which takes into account the customer's past default history and current financial position, the economic situation of the indust ry, as well as the GDP forecast and industry outlook, and classifies customers into different risk groups and recognizes an allowance for losses based on the expected loss rate of each group.

If there is evidence that the counter-party is in serious financial difficulty and the Company cannot reasonably expect to recover the amount, such as when the counter-party is in liquidation, the Company will directly write off the related accounts receivable, but will continue to conduct recourse actions and recognize the amount recovered in profit or loss as a result of the recourse.

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The Company's allowance for losses on accounts receivable and overdue receivables based on the provision matrix is summarized as follows:

Dec. 31, 2020

Dec. 31, 2020
Total carrying amount Allowance for loss (Expected credit loss in the duration) Amortized cost	Within a normal credit period $ 172,891 ( 1,852) $ 171,039		Overdue 1-180 days $ 1,877 1,111) $ 766	Overdue Over 180 days $ 1,408 ( 1,222) $ 186		Total
	(	(		(	(	$ 176,176 4,185) $ 171,991

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Dec. 31, 2019

Dec. 31, 2019
Total carrying amount Allowance for loss (Expected credit loss in the duration) Amortized cost	Within a normal credit period $ 146,677 ( 1,231) $ 145,446		Overdue 1-180 days	Overdue Over 180 days $ 330 ( 265) $ 65		Total
	(	(	$ 587 297) $ 290		(	$ 147,594 1,793) $ 145,801

Information on the changes in allowance for losses on notes receivable, accounts receivable and overdue receivables is as follows:

	2020
Notes receivable $ - - - $ -	Accounts receivable $ 1,793 2,392 - $ 4,185 2019		Overdue receivables
		(	$ 1,101 - 122) $ 979
Notes receivable $ - - $ -	Accounts receivable $ 303 1,490 $ 1,793		Overdue receivables
			$ 797 304 $ 1,101

The Company's notes receivable, accounts receivable and overdue receivables are not pledged.

IX. Inventory

Merchandise inventory

Dec. 31, 2020 $ 164,705	Dec. 31, 2019	Dec. 31, 2019
		$ 142,131

The allowance for loss for market price decline and obsolete inventories was $16,604 thousands and $13,818 thousands as of December 31, 2020 and 2019, respectively.

Cost of sales related to inventories for fiscal 2020 and 2019 are as follows:

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Loss from market price decline and obsolete and slow-moving inventory (gain from price recovery) Inventory short (over) Loss on inventory obsolescence Income from the sale of leftover materials		2020 $ 2,786 106 421 11) $ 3,302	2019
	(		( $ 2,500 ) ( 38 ) 7,910 ( 115) $ 5,257

The increase in the net realizable value of the Company's inventories in 2019 was due to an increase in the selling price of inventories.

X. Investment accounted for using the equity method

Investee subsidiaries Vietnam Caesar Sanitary Wares Joint Stock Company (VIETNAM CAESAR SANITARY WARES JOINT STOCK COMPANY) Kai-Sheng Sanitary Wares Co., Ltd. N a m e o f S u b s i d i a r y Vietnam Caesar Sanitary Wares Joint Stock Company (VIETNAM CAESAR SANITARY WARES JOINT STOCK COMPANY) Kai-Sheng Sanitary Wares Co., Ltd.	Dec. 31, 2020 $ 1,225,499 13,221 $ 1,238,720 Percentage of owner’s r i g	Dec. 31, 2019
		$ 1,340,484 - $ 1,340,484 equity and voting h t s
	Dec. 31, 2020 99.9993% 51%	Dec. 31, 2019
		99.9993% -

On November 4, 2020, the Board of Directors resolved to establish Kai-Sheng Sanitary Wares Co., Ltd. as a distribution point in Taoyuan with a total capital of NT$50,000 thousands, divided into 5,000,000 shares at NT$10 per share. The remaining 49% of the shares are held by non-Related parties. After considering the voting rights held by other shareholders, the Company has the right to dominate Kai-Sheng Sanitary Wares. After considering the voting rights held by the other shareholders,

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the Company determined that it has the ability to direct the relevant activities of Kai-Sheng Sanitary Wares Co. Since Kai-Sheng Sanitary Wares Co., Ltd. was established in December 2020 and does not have significant operating activities, the financial statements prepared by Kai-Sheng Sanitary Wares Co., Ltd. were used to recognize the share of profit or loss of the subsidiary under the equity method and the share of other comprehensive income. The financial statements of Kai-Sheng Sanitary Wares Co.

Proportion in 2020 and 2019 were recognized as the share of profit or loss of subsidiaries using the equity method and the share of other comprehensive income based on the audited financial statements of Vietnam Caesar Sanitary Wares Joint Stock Company for the same period.

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XI. Property, plant and equipment

Cost Balance as of Jan. 1, 2020 Addition Disposal Reclassification Balance as of Dec. 31, 2020 accumulated depreciation Balance as of Jan. 1, 2020 Depreciation expense Disposal Balance as of Dec. 31, 2020 Net worth as of Dec. 31, 2020 Cost Balance as of Jan. 1, 2019 Addition Disposal Reclassification Balance as of Dec. 31, 2019 accumulated depreciation Balance as of Jan. 1, 2019 Depreciation expense Disposal Balance as of Dec. 31, 2019 Net worth as of Dec. 31, 2019		Self-owned land		Buildings	Transportation equipment	Other equipment	Leasehold improvement		Construction inprogress	Total
		$ 243,280 - - - $ 243,280 $ - - - $ - $ 243,280 $ 243,280 - - - $ 243,280 $ - - - $ - $ 243,280	(	$ 253,536 801 - 200) $ 254,137 $ 30,472 9,120 - $ 39,592 $ 214,545 $ 231,694 9,017 - 12,825 $ 253,536 $ 23,091 7,381 - $ 30,472 $ 223,064	$ 28,497 6,744 ( 235 ) - $ 35,006 $ 18,860 4,040 ( 6) $ 22,894 $ 12,112 $ 22,396 2,506 ( 443 ) 4,038 $ 28,497 $ 15,330 3,903 ( 373) $ 18,860 $ 9,637	$ 9,058 - ( 137 ) - $ 8,921 $ 3,626 2,159 ( 137) $ 5,648 $ 3,273 $ 3,557 4,376 - 1,125 $ 9,058 $ 1,711 1,915 - $ 3,626 $ 5,432	$ 15,303 5,750 ( 380 ) 10,572 $ 31,245 $ 3,953 6,670 ( 380) $ 10,243 $ 21,002 $ 14,003 1,300 - - $ 15,303 $ 984 2,969 - $ 3,953 $ 11,350	( (	10,572 6,636 - 10,572) $ 6,636 $ - - - $ - $ 6,636 $ - 22,476 - 11,904) $ 10,572 $ - - - $ - $ 10,572	$ 560,246 19,931 ( 752 ) ( 200) $ 579,225 $ 56,911 21,989 ( 523) $ 78,377 $ 500,848 $ 514,930 39,675 ( 443 ) 6,084 $ 560,246 $ 41,116 16,168 ( 373) $ 56,911 $ 503,335

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

Depreciation expense is calculated through straight-line basis according to the following years:

Buildings Main building of the office 55 years Other 3 to 50 years Transportation equipment 3 to 5 years Office equipment 3 to 5 years Leasehold improvement 5 years

Please refer to Note 26 for the amount of property, plant and equipment pledged as collaterals for loans.

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The Company leases the roof of its factory in Zaoqiao Township for the installation and operation of a solar photovoltaic system to generate electricity for sale to Taiwan Power Company. The lessee does not have a preferential right to purchase the asset at the end of the lease period. The lease period is from the commercial operation date of the solar power system on March 14, 2019 to the end of 20 years. At the end of the lease term, the lessee does not have a preferential right to acquire the asset.

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The total future lease payments to be received under operating leases are as follows:

are as follows:
2020 2019 The 1st year $ 530 $ 530 The 2nd year 530 530 The 3rd year 530 530 The 4th year 530 530 The 5th year 530 530 Over 5 years 6,890 7,420 $ 9,540 $ 10,070 I.Lease agreement (1) Right-of-use assets—Buildings 2020 2019 Cost Beginning balance $ 41,243 $ - Effect of the first-time application of IFRS16 - 41,318 Addition 18,700 - Disposal ( 9,842) ( 75) Ending balance $ 50,101 $ 41,243 accumulated depreciation Beginning balance $ 6,236 $ - Depreciation expense 10,816 6,311 Disposal ( 2,587) ( 75) Ending balance $ 14,465 $ 6,236 Net worth at the end of the current period $ 35,636 $ 35,007 (2) Lease liabilities Dec. 31, 2020 Dec. 31, 2019 Carrying amount of lease liabilities Current $ 10,095 $ 8,282 Non-current $ 25,800 $ 26,763 The discount rate range for Lease liabilities is as follows: 2020 2019 Buildings 1.66%~1.89% 1.79%~1.89%		2019
		$ 530 530 530 530 530 7,420 $ 10,070 2019
	$ - 41,318 - ( 75) $ 41,243 $ - 6,311 ( 75) $ 6,236 $ 35,007 Dec. 31, 2019
	1.79%~1.89%

XII. Lease agreement (1) Right-of-use assets—Buildings

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(III) Other leasing information

Other leasing information
Lease expenses of low-value assets Changed lease payment expenses not considered in the measurement of lease liabilities Total cash outflow from lease		2020 $ 337 $ - ($ 10,829)		2019
				$ 754 $ 3 ($ 7,409)

The Company has elected to apply the exemption from recognition to leases of Office equipment that qualify as short-term leases and leases of Office equipment that qualify as low-value asset leases and not to recognize the related right-of-use assets and lease liabilities for these leases.

XIII. Intangible assets

Intangible assets
Cost Balance as of Jan. 1, 2020 Individual acquisition Disposal Balance as of Dec. 31, 2020 Accumulated amortization Balance as of Jan. 1, 2020 Amortization expense Disposal Balance as of Dec. 31, 2020 Net worth as of Dec. 31, 2020 Cost Balance as of Jan. 1, 2019 Individual acquisition Disposal Balance as of Dec. 31, 2019 Accumulated amortization Balance as of Jan. 1, 2019 Amortization expense Disposal Balance as of Dec. 31, 2019 Net worth as of Dec. 31, 2019	Trademark rights $ 8,572 - ( 8,572) $ - $ 8,572 - ( 8,572) $ - $ - $ 8,572 - - $ 8,572 $ 8,572 - - $ 8,572 $ -		Cost of computer software $ 2,596 1,030 2,200) $ 1,426 $ 2,335 282 2,200) $ 417 $ 1,009 $ 2,332 1,074 810) $ 2,596 $ 2,266 879 810) $ 2,335 $ 261		Total
	( (	( ( ( (		( ( ( (	$ 11,168 1,030 10,772) $ 1,426 $ 10,907 282 10,772) $ 417 $ 1,009 $ 10,904 1,074 810) $ 11,168 $ 10,838 879 810) $ 10,907 $ 261

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Amortization expense is accrued on a straight-line basis over the following number of durable years.

Trademark rights 20 years Computer software 1-3 years

XIV. Other assets

Other assets
Current Input tax Other Non-current Overdue receivables Minus: allowance for loss	Dec. 31, 2020 $ 1,966 194 $ 2,160 $ 979 ( 979) $ -	Dec. 31, 2019
	(	(	$ 505 58 $ 563 $ 1,101 1,101) $ -

XV. Short-term loans

Short-term loans
Secured loan(Note XXVI) Bank borrowings	Dec. 31, 2020 $ 233,000	Dec. 31, 2019
			$ 325,000

The interest rates on revolving bank loans ranged from 0.95% to 1.10% and 1.07% to 1.20% in 2020 and Dec. 31, 2019, respectively.

XVI. Accounts payable

Accounts payable
Non-related parties Related parties	Dec. 31, 2020 $ 33,542 $ -	Dec. 31, 2019
			$ 39,931 $ 1

XVII. Other payables

Other payables
Salaries and bonuses payable Compensation of employees payable Compensation of directors and supervisors payable Freight charges payable Advertising expenses payable Other	Dec. 31, 2020 $ 27,339 8,749 5,833 2,364 3,092 14,509 $ 61,886	Dec. 31, 2019
			$ 21,636 7,303 4,869 2,003 3,528 16,614 $ 55,953

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XVIII. Equity

(I) Share capital for common stock

Authorized shares (1,000 shares) Authorized share capital Number of outstanding shares that had been paid (1,000 shares) Share capital of issued shares	Dec. 31, 2020 100,000 $ 1,000,000 72,600 $ 726,000	Dec. 31, 2019	Dec. 31, 2019
			100,000 $ 1,000,000 72,600 $ 726,000

The issued common stock has a par value of $10 per share and each share is entitled to one vote and the right to receive dividends.

(II) Additional paid-in capital

Additional paid-in capital
Can be used to make up losses, to issue cash dividends or to add into share capital(Note) Share premium Premium on capital stock due to merger Cannot be used for any purpose Cost of employee stock options	Dec. 31, 2020 $ 254,700 9,481 13,271 $ 277,452	Dec. 31, 2019
			$ 254,700 9,481 13,271 $ 277,452

Note: Such additional paid-in capital may be used to cover losses or, when the company has no losses, to distribute cash or to capitalize share capital, provided that the capitalization of share capital is limited to a certain percentage of paid-in share capital each year.

(III) Retained earnings and dividend policy

In accordance with the Company's policy on the distribution of earnings, the Company shall first make up for any after-tax net income in its annual budget (including adjustment of the Unappropriated retained earningsAmount) and set aside 10% of the total l egal reserve in accordance with the law; however, except when the legal reserve has reached the Company's total paid-in capital. The Company shall not set aside 10% of the accumulated losses (including adjustment of the Unappropriated retained earningsAmount) as legal reserve, except when the legal reserve has reached the Company's paid-in capital. The Board of Directors shall prepare a proposal for the distribution of the

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remaining earnings, together with the Unappropriated retained earnings (including adjustments to the Unappropriated retained earningsAmount) at the beginning of the period. The Board of Directors shall prepare a proposal for the distribution of earnings and submit it to the shareholders' meeting for resolution on the distribution of dividends to shareholders.

The Company's dividend policy is in line with its current and future development plans, taking into account the investment environment, capital requirements, domestic and international competition, and the interests of shareholders. Dividends may be distributed to shareholders in cash or in stock, with cash dividends not less than 10% of total stock dividends, except when stock dividends are less than $1 per share.

The legal reserve shall be set aside until the balance reaches the total paid-up capital of the Company. The statutory reserve may be applied to make up losses. If the Company is not in deficit, the excess of the legal reserve over 25% of the total paid-in capital may be distributed in cash in addition to capitalization.

The Company has appropriated and reversed the special reserve in accordance with Jin-Guan-Zheng-Fa-Zi Letter No. 1010012865, Jin-Guan-Zheng-Fa-Zi Letter No. 1010047490, Jin-Guan-Zheng-Fa-Zi Letter No. 1030006415 and the “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs.”

The Company held its regular shareholders' meetings on May 28, 2020 and June 20, 2019, and resolved to approve the earnings distribution for fiscal 2019 and 2018, respectively, as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)		2019 $ 17,985 $ 19,355 $ 123,420 $ 1.71		2018
			(	$ 25,401 $ 4,220) $ 166,980 $ 2.30

The Company proposed the following distribution of earnings for fiscal 2020 at the Board of Directors' meeting on March 9, 2021:

2020

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Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	$ 22,009 $ 71,429 $ 144,152 $ 2.00

The distribution of earnings for fiscal 2020 is subject to the resolution of the shareholders' meeting scheduled to be held on May 27, 2021.

(IV) Special reserve

Special reserve
Beginning balance Reversal of special reserve Provision of special reserve Allowances for deductions in other equity interest items Ending balance		2020 $ 146,675 - 19,355 $ 166,030	2019
			$ 150,895 ( 4,220 ) - $ 146,675

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(V) Other equity interest items
Exchange differences on translation of foreign financial statements

statements
Beginning balance Share of the translation differences of the subsidiaries, associates and joint ventures accounted for using equity method Relevant income tax Ending balance	2020 ( $ 166,030 ) ( 85,864 ) 17,173 ($ 234,721)	2019
		( $ 146,675 ) ( 24,194 ) 4,839 ($ 166,030)

Unrealized gains or losses on financial assets measured at fair

value through other comprehensive income

Beginning balance Generated in the current period Unrealized gains or losses Equity instrument Ending balance Treasury shares Reasons for the retirement of shares Number of shares as of Jan. 1, 2020 Increase in the current period Number of shares as of Dec. 31, 2020		2020 $ - 2,738) $ 2,738)		2019
	( (		$ - - $ - Transfer of shares to employees (1,000 shares)
				- 524 524

(VI) Treasury shares

Treasury shares held by the Company are not pledged under the Securities and Exchange Act and are not entitled to dividend distribution or voting rights.

XIX. Income

Income
Income from customer contracts Porcelain Water use equipment Automated equipment Bathtubs Other		2020 $ 709,649 232,305 204,018 27,849 297,575 $ 1,471,396		2019
				$ 643,288 196,326 162,885 33,912 263,772 $ 1,300,183

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Contract balance

Contract balance
Accounts receivable Contract liabilities Payment for goods collected in advance	Dec. 31, 2020 $ 171,991 $ 2,492	Dec. 31, 2019
			$ 145,801 $ 826

Re-recognized income from Contract from customer contracts in 2020 and 2019 are$ 0 thousands.

IIX. Net income from continuing operations

Net income from continuing operations includes the following items: (I) Other income and expenses, net

Compensation for losses Net income from the disposal and obsolescence of property, plant and equipment Profit from lease modification	2020 ( $ 966 ) 41 103 ($ 822)	2019
		( $ 147 ) 146 - ($ 1)

(II) Depreciation, amortization and employee benefit expenses

Employee benefit expenses Salary expenses Premium for the insurance of employees Benefits after retirement Defined contribution plan Compensation of directors Other employee benefit expenses Total of employee benefit expenses Depreciation expense Property, plant and equipment Right-of-use assets Amortization expense			2020	2020				2019	2019
	Belonging to operating costs		Belonging to operating expenses			Total	Belonging to operating costs $ 31,698 2,786 1,509 - 977 $ 36,970 $ - - $ - $ -	Belonging to operating expenses			Total
		$ 34,037 3,001 1,590 - 987 $ 39,615 $ - - $ - $ -		$ 87,606 7,321 3,732 9,094 3,543 $ 111,296 $ 21,989 10,816 $ 32,805 $ 282		$ 121,643 10,322 5,322 9,094 4,530 $ 150,911 $ 21,989 10,816 $ 32,805 $ 282			$ 67,549 6,199 2,989 8,104 2,891 $ 87,732 $ 16,168 6,311 $ 22,479 $ 879		$ 99,247 8,985 4,498 8,104 3,868 $ 124,702 $ 16,168 6,311 $ 22,479 $ 879

The respective numbers of employees of the Company calculated until December 31 of 2020 and 2019 are 146 and 131, while the number of directors who do not serve as employees is 6. The average fees of employee benefit of this year and last year respectively are $1,013 thousands and $933 thousands. The average compensations

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respectively are $869 thousands and $794 thousands, and the average adjustment of compensation is 9%. The supervisors' remuneration for the current year and the previous year were $2,679,882 and $2,380,682, respectively.

Compensation Policy

Directors' and supervisors' remuneration

The Company may pay remuneration to the directors and supervisors for their duties, regardless of operating profit or loss, in accordance with the Company's Articles of Incorporation, which authorize the Board of Directors to determine the value of their participation in and contribution to the Company's operations, taking into account the market rate in the industry. In addition, if the Company has Net profit before tax, the remuneration shall be distributed in accordance with the Company's Articles of Incorporation.

Managers

The managers are appointed and compensated in accordance with the Company's Articles of Incorporation and are subject to the Board of Directors' approval. The standards of compensation for managers are based on their personal performance, contribution to work, annual operating results, hard work, and cooperation with company policies, as well as on market standards in the industry.

Employees

Employees are paid monthly in the spirit of equal pay for equal work according to their academic experience and job level, and performance bonuses are paid according to the company's monthly operating performance. If the company has Net pro fit before tax, the compensation will be distributed according to the company's articles of incorporation.

(III) Compensation to employees and compensation to directors and supervisors

In compliance with the Articles of Incorporation, the Company contributes 2% to 5% of the pre-tax benefit before compensation to

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employees and directors and supervisors as compensation to employees and no more than 2% as compensation to directors and supervisors for the year.

The compensation to employees and compensation to directors and supervisors for the years 2020 and 2019 were resolved by the Board of Directors on March 9, 2021 and February 27, 2020, respectively, as follows:

Estimated listing ratio

Estimated listing ratio
Compensation of employees Compensation of directors and supervisors	2020 3% 2%	2019
		3% 2%

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Compensation of employees Compensation of directors and supervisors	2020 Cash $ 8,749 5,833	2019
		Cash
		$ 7,303 4,869

If there is any change in the annual Parent Company Only Financial Statements after the date of adoption, the change in accounting estimate will be treated as an adjustment in the following year.

There was no difference between the actual amount of compensation to employees and compensation to directors and supervisors for fiscal 2019and 2018 and the amount recognized in the 2019 and 2018 Parent Company Only Financial Statements.

For information on the compensation to employees and compensation to directors and supervisors resolved by the Board of Directors of the Company, please visit the Market Observation Post System (MOPS) of the Taiwan Stock Exchange.

III. Income tax of continuing operations

(I) Income tax recognized in profit or losses

Main components of income tax expenses recognized in profit or losses:

					2020	2019
Current income tax
	Generated in the fiscal
	year				$ 62,180	$ 31,975
	Surtax on unappropriated
	retained earnings				954	3,292
	Adjustments for	the	prior
	year			(	950)	11
					62,184	35,278
Deferred income tax
	Generated in the fiscal
year				(	6,703 )	14,593
The	tax paid in	foreign
	countries cannot		be
	deducted				1,492	1,553
Income tax expense recognized
in	profit or losses				$ 56,973	$ 51,424

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The reconciliations of accounting income and income tax expenses are as follows:

are as follows:
	2020			2019
Net income before tax	$ 277,065		$	231,275
Income tax expense of the net
income before tax calculated
with statutory tax rate	$ 55,413		$	46,255
Non-deductible expenses in the
tax		64		313
Surtax on unappropriated
retained earnings	954			3,292
The tax paid in foreign
countries cannot be deducted	1,492			1,553
Adjustments to the income tax
expenses in the past years in
the current period (	950)			11
Income tax expense recognized
in profit or losses	$ 56,973		$	51,424
Income tax recognized in other comprehensive income
	2020			2019
Deferred income tax
Generated in the current period
`－`Share of the other
comprehensive income
of subsidiaries
accounted for using
equity method	$ 17,173		$	4,839

(II) Income tax recognized in other comprehensive income

(III) Current income tax liabilities

Current income tax liabilities
Current income tax liabilities	Dec. 31, 2020 $ 46,972	Dec. 31, 2019
			$ 16,409

(IV) Deferred income tax assets and liabilities

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

2020

2020
Deferredincome taxassets Temporary differences Unrealized loss from market price decline and obsolete and	Beginning balance	Recognized in profit or losses $ 557	Recognized in other comprehensi ve income $ -	Ending balance
	$ 2,764			$ 3,321

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slow-moving inventory Allowance for bad debts Exchange difference on translation of the financial statements of foreign operations Unrealized foreign exchange losses Deferredincome tax liabilities Temporary differences Investment income recognized using equity method Unrealized foreign exchange gains 2019 Deferred income tax assets Temporary differences Unrealized loss from market price decline and obsolete and slow-moving inventory Allowance for bad debts Exchange difference on translation of the financial statements of foreign operations Unrealized foreign exchange losses		253 41,508 30 $ 44,555 $ 176,544 - $ 176,544 Beginning balance $ 3,263 - 36,669 - $ 39,932	398 - ( 30) $ 925 ( $ 5,825 ) 47 ($ 5,778) Recognized in profit or losses ( $ 499 ) 253 - 30 ($ 216)	- 17,173 - $ 17,173 $ - - $ - Recognized in other comprehensi veincome $ - - 4,839 - $ 4,839		651 58,681 - $ 62,653 $ 170,719 47 $ 170,766 Ending balance
						$ 2,764 253 41,508 30 $ 44,555

(Continued on the next page)

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(Continued from the previous page)

Deferred income tax liabilities Temporary differences Investment income recognized using equity method Unrealized foreign exchange gains	Be g i n n i n g b a l a n c e	Be g i n n i n g b a l a n c e	Recognized in profit or l o s s e s $ 14,378 ( 1) $ 14,377	Recognized i n o t h e r comprehensi ve income $ - - $ -	E n d i n g b a l a n c e	E n d i n g b a l a n c e
		$ 162,166 1 $ 162,167				$ 176,544 - $ 176,544

(V) Deductible temporary differences of deferred income tax assets which were not recognized in the statement of financial position

Deductible temporary differences	Dec. 31, 2020 $ 729	Dec. 31, 2019	Dec. 31, 2019
			$ 729

(VI) Income tax assessment

The income tax returns of the Company have been assessed and approved by the tax authorities through fiscal 2018.

IIII. Earnings per share

(I) Basic earnings per share

The earnings and weighted-average number of common stocks used to calculate basic earnings per share were as follows:

Net income in the fiscal year Weighted average number of common shares used in the calculation of basic earnings per share (1,000 shares) Basic earnings per share (NT$)		2020 $ 220,092 72,290 $ 3.04		2019
				$ 179,851 72,600 $ 2.48

(II) Diluted earnings per share

The earnings and weighted-average number of common stocks used to calculate diluted earnings per share were as follows:

Net income in the fiscal year Weighted average number of common shares used in the calculation of basic earnings		2020 $ 220,092 72,290		2019
				$ 179,851 72,600

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per share (1,000 shares) Influence of dilutive potential common shares Compensation of employees (1,000 shares) Weighted average number of common shares used in the calculation of diluted earnings per share (1,000 shares) Diluted earnings per share (NT$)	376 72,666 $ 3.03	352 72,952 $ 2.47

If the Company has the option of paying employees in stock or cash, it is assumed that employee compensation will be paid in stock and is included in the weighted-average number of shares outstanding for the purpose of calculating diluted earnings per share when the potential ordinary share has a dilutive effect. The dilutive effect of these potential ordinary shares shall also continue to be considered in the calculation of diluted earnings per share before the following year's resolution by shareholders’ meeting on the number of employee compensation shares to be distributed.

IIIII. Capital risk management

The Company is currently in a stable operating phase and the objective of capital risk management is to ensure that it can maximize shareholder returns by optimizing debt and equity balances while continuing to operate and grow.

The Company adopts a prudent risk management strategy and conducts regular reviews to determine the most appropriate capital structure for itself based on its business development strategy and overall planning of operational needs.

IIIV. Financial instruments

(I) Fair value information
Financial instruments not at Fair value

The Company considered that Carrying amount of Financial assets and Financial liability not at Fair value is close to Fair value.

Financial instruments at Fair value

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(1) Fair value hierarchy

Dec. 31, 2020

Level 1 Level 2 Level 3 Total Non-current financial assets – measured at the fair value of other comprehensive income Investments in equity instruments － Stocks of domestic companies which are not listed or traded over the counter $ - $ - $ 262 $ 262

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

(2) Valuation techniques and inputs for level 3 fair value

measurements

Category of financial instruments Valuation technique and input value Investment in the stocks of Net book value per share: Based on the domestic companies Company's financial information, the which are not listed or net book value per share is calculated traded over the counter as the present value of the expected gain or loss from holding the investment.

(II) Types of financial instruments

Types of financial instruments	investment.
Financial assets Financial assets measured at amortized cost Cash and cash equivalents Notes receivable, net Net value of accounts receivable Net accounts receivable`－` related parties Other receivables Other receivables`－`related parties Financial assets measured at fair value through other comprehensive income	Dec. 31, 2020 $ 53,805 13,804 163,618 8,373 304 30,251	Dec. 31, 2019
		$ 82,077 14,519 142,382 3,419 305 28,037

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Investments in equity
instruments -
non-current	262	-
Financial liability
Financial liabilities measured at
amortized cost
Short-term loans	233,000	325,000
Accounts payable	33,542	39,931
Accounts payable`－`related
parties	-	1
Other payables	61,886	55,953

(III) Financial risk management objectives and policies

The Company is committed to ensuring that it has sufficient and cost-effective working capital to meet its operating requirements. The Company carefully manages market risk (including foreign currency exchange rate risk, interest rate risk and other price risks), credit risk and liquidity risk associated with its operations to reduce the potential adverse effects of market uncertainties on the Company's financial condition.

Market risk management
(1) Exchange Rate Risk

The Company is mainly engaged in the domestic market, and all foreign sales and purchases are quoted in foreign currencies. The Company adopts a natural hedge of foreign currency offsetting, and the net foreign currency position is relatively small. Fluctuations in foreign exchange rates do not have a significant impact on the Company's financial operations, and the Company has been paying attention to exchange rate fluctuations for a long time to minimize the impact on the Company due to exchange rate fluctuations.

The Company's foreign-currency-denominated monetary assets and monetary liabilities as of the balance sheet date Carrying amount can be found in Note XXVIII.

The sensitivity analysis of foreign currency exchange rate risk was calculated for foreign currency monetary items as of the end of the financial reporting period. If the New

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Taiwan dollar depreciates/strengthens by 5% against the U.S. dollar, the Company's net income before tax would decrease/increase by $1,664 thousands and $1,346 thousands for the years ended December 31, 2020 and 2019, respectively.

(2) Interest rate risk

The Company continues to reduce its borrowing with financial institutions and the Company's management believes that fluctuations in borrowing rates will have little impact on the Company.

(3) Other price risk

The equity risk arises mainly from Financial assets measured at fair value through other comprehensive income (Investment in the stocks of domestic companies which are not listed or traded over the counter).

Sensitivity analysis

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

If the equity price increases/decreases by 0.5%, other comprehensive income will increase/decrease by $1 thousand from Jan. 1, 2020 to Dec. 31, 2020 due to the change in Fair value of financial assets measured at Fair value through other gains or losses.

2. Credit risk

Credit risk refers to the risk of financial loss resulting from the default of contractual obligations by the counter-parties. As of the balance sheet date, the Company's maximum exposure to credit risk due to non-performance by counter-parties is the carrying value of financial assets recognized in the Parent Company Only Statement of Financial Position. As of the balance sheet date, the Company's maximum exposure to credit risk arising from counter-parties' failure to meet their obligations is the carrying value of financial assets recognized in the Parent Company Only Statement of Financial Position.

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In order to mitigate credit risk and maintain the quality of Accounts receivable, the Company has established procedures to manage credit risk associated with its operations, and the Company also uses certain credit enhancement tools, such as payment for goods collected in advance and margin acquisition, at appropriate times to reduce customers' credit risk. The Company also uses certain credit enhancement tools, such as payment for goods collected in advance and margin, to reduce customers' credit risk. In addition, the Company reviews the recoverable amounts of receivables on a case-by-case basis at the balance sheet date to ensure that appropriate impairment losses have been recorded for uncollectible receivables.

In 2020 and 2019, except for Company A, the Company's concentration of credit risk to other customers does not exceed 10% of the total Accounts receivable, and these companies have a long history and good repayment status, so the Company's related credit risk is not significant.

The credit risk is limited because the counter-parties of liquidity are financial institutions with good credit ratings, and therefore no significant credit risk is expected.

Liquidity risk

The Company copes with the operation and reduces the influence of cash flow fluctuations through the management and maintenance of sufficient amount of cash and cash equivalents. The Company's management monitors the use of banking facilities and ensures compliance with the terms of borrowing contracts. The Company meets its contractual obligations by maintaining appropriate capital and banking facilities. The Company's working capital is sufficient to meet its obligations and there is no liquidity risk that the Company will not be able to raise funds to meet its contractual obligations.

The unused funds of the credit agreements from the bank until December 31[st] , 2020 and 2019 respectively are $573,130 thousands and $354,940 thousands.

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The following table is based on the earliest possible period for which the Company may be required to make repayments and is based on the undiscounted cash flows from financial liabilities, which include cash flows from interest and principal. The Company's working capital is sufficient to meet the demand. Dec. 31, 2020

Dec. 31, 2020
Non-derivative financial liabilities Short-term loans Accounts payable Other payables Current income tax liabilities Lease liabilities - current Other current liabilities`－`other Lease liabilities - non-current Dec. 31, 2019 Non-derivative financial liabilities Short-term loans Accounts payable Accounts payable`－` related parties Other payables Current income tax liabilities Lease liabilities - current Other current liabilities`－`other Lease liabilities - non-current	Less than 1 year	1-2 years	2-3 years	More than 3 years	Total
	$ 233,000 33,542 61,886 46,972 10,095 7,533 - Less than 1 year	$ - - - - - - 11,111 1-2 years	$ - - - - - - 8,828 2-3 years	$ - - - - - - 6,450 More than 3 years	$ 233,000 33,542 61,886 46,972 10,095 7,533 26,389 Total
	$ 325,000 39,931 1 55,953 16,409 8,282 3,275 -	$ - - - - - - - 10,277	$ - - - - - - - 10,277	$ - - - - - - - 14,482	$ 325,000 39,931 1 55,953 16,409 8,282 3,275 35,036

246

IIV. Transaction with related parties

The transactions between the Company and related parties (aside from those revealed in notes) are listed below:

(I) Names of related parties and their relationships with the Company

N a m e o f r e l a t e d p a r t y Rel at ionshi p wit h the Com pany Vietnam Caesar Sanitary Wares Subsidiaries Joint Stock Company － Chia-Ta-Hang Co., Ltd. Substantive related party the chairperson of that company was the spouse of a relative within second degree of kinship of the chairperson of the Company

(II) Operating revenue

Accounting item Sales revenue Other operating revenue	Type of related party Substantive related party Chia-Ta-Hang Co., Ltd. Subsidiary Vietnam Caesar Sanitary Wares Joint Stock Company		2020 $ 43,655 $ 14,907		2019
					$ 36,330 $ 15,525

There are no significant exceptions to the Terms of Transaction between the Company and other Non-related parties.

In 2018 and 2017, the Company entered into an agreement with Vietnam Caesar Sanitary Wares Joint Stock Company to amend the technical contract for the production of ceramics and entered into a management services contract with the Company to license and assist Vietnam Caesar Sanitary Wares Joint Stock Company in the marketing of the "Caesar Sanitary Wares" brand, market development and technical support services in Vietnam. Vietnam Caesar Sanitary Wares Joint Stock Company shall pay the Company's management service fee, which shall be calculated in accordance with the terms of the Vietnam Caesar Sanitary Wares Joint Stock Company Agreement. Caesar Sanitary Wares Joint Stock Company shall pay the Company a management service fee of 2.5% of Vietnam Sanitary Wares Joint Stock Company's annual sales amount (net of the amount sold to the Company)

247

on a quarterly basis, subject to a maximum annual amount of US$500,000; the Company shall receive payment within two months after the end of each quarter, subject to adjustment of capital requirements. The effective period of the aforementioned rate is one year, which is reviewed and revised by the parties upon annual renewal. 2020 and 2019 are recognized under Other operating revenue.

(III) Purchase

Purchase
Type of related party/Name Subsidiary Vietnam Caesar Sanitary Wares Joint Stock Company		2020 $ 402,339		2019
				$ 408,381

The Company's purchase from Vietnam Caesar Sanitary Wares Joint Stock Company is a purchase of sanitary equipment products, and the purchase price is Discussed by both parties in the transaction with reference to the market price and gross profit of products. The purchase price is discussed by both parties in the transaction with reference to the market price and gross profit of products, and the payment terms are within 30 days after the shipment from Vietnam Caesar Sanitary Wares Joint Stock Company, subject to adjustment of capital requirements. The payment terms are within 30 days of shipment by Vietnam Caesar Sanitary Wares Joint Stock Company, subject to adjustment of capital requirements. The unrealized gross profit on sales of $16,479 thousands and $12,216 thousand were recorded in 2020 and 2019, respectively, for the subsidiaries, associates and joint ventures recognized under the equity method.

(IV) Related party receivables (not including loans for related parties)

Accounting item Type of related party Dec. 31, 2020 Dec. 31, 2019 Accounts Subsidiary － receivable Related parties Vietnam Caesar $ 4,172 $ - Sanitary Wares Joint Stock Company Substantive related party Chia-Ta-Hang Co., $ 4,201 $ 3,419 Ltd.

248

(V) Other receivables

Accounting item Type of related party Dec. 31, 2020 Dec. 31, 2019 Other accounts Substantive related party receivable － Related parties Chia-Ta-Hang Co., $ 5 $ 5 Ltd.

(VI) Related party payables (not including loans for related parties)

Accounting item Type of related party Dec. 31, 2020 Dec. 31, 2019 Accounts payable Subsidiary － related parties

Vietnam Caesar $ - $ 1 Sanitary Wares Joint Stock Company

(VII) Endorsement

T y p e o f r e l a t e d p a r t y Dec. 31, 2020 Dec. 31, 2019 Subsidiary Vietnam Caesar Sanitary $ 142,400 $ 194,870 Wares Joint Stock (USD5,000 仟元 ) (USD6,500 仟元 ) Company

249

(VIII) Others

The Company and Vietnam Caesar Sanitary Wares Joint Stock Company mutually agreed that the Company purchases raw materials on behalf of Vietnam Caesar Sanitary Wares Joint Stock Company, and the amount of raw materials purchased on behalf of Vietnam Caesar Sanitary Wares Joint Stock Company was $61,990 thousands and $67,738 thousands for 2020 and 2019, respectively, and the balances of Other receivables were $30,246 thousands and $28,032 thousands, respectively.

(IX) Key management compensation

Key management compensation
Short-term employee benefits Benefits after retirement		2020 $ 22,678 408 $ 23,086		2019
				$ 20,391 399 $ 20,790

The remuneration of directors and other key management personnel is determined by the Compensation Committee based on individual performance and industry average.

IIVI. Pledged assets

The following assets have been provided as collateral to secure loans or lines of credit with banks

or lines of credit with banks
Property, plant and equipment`－` land Property, plant and equipment`－` buildings	Dec. 31, 2020 $ 61,652 35,728 $ 97,380	Dec. 31, 2019
			$ 61,652 36,622 $ 98,274

IIVII. 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:

(I) As of Dec. 31, 2020, the Company has entered into construction contracts with various vendors for a total price of NT$9,481 thousands and has paid NT$6,636 thousands, recognized as Construction in progress.

250

(II) As of Dec. 31, 2020 and 2019, the Company has issued unused letters of credit amounting to US$0 thousand and US$414 thousands, respectively.
(III) As of Dec. 31, 2020 and 2019, the Company has guaranteed the financing loans of Vietnam Caesar Sanitary Wares Joint Stock Company in the amount of NT$142,400 thousands (US$5,000 thousands) and NT$194,870 thousands (US$6,500 thousands), respectively.

251

IIVIII. Exchange rate information of foreign currency financial assets and

liabilities

Information on the Company's financial assets and liabilities in foreign currencies of significant influence is as follows.

Financial assets Monetary items USD RMB Financial liabilities Monetary items USD	Dec. 31, 2020 Foreign currency Exchange rate NT$ $ 1,169 28.48 $ 33,279 10 4.37 44 - - -	Dec. 31, 2020 Foreign currency Exchange rate NT$ $ 1,169 28.48 $ 33,279 10 4.37 44 - - -	Dec. 31, 2019	Dec. 31, 2019	Dec. 31, 2019
	Foreign currency $ 1,169 10 -	Exchange rate 28.48 4.37 -	Foreign currency $ 1,997 - 1,098	Exchange rate 29.980 - 29.980	NT$
					$ 59,857 - 32,931

IIIX. Other matters

The Company was affected by the global pandemic, but the impact was relatively insignificant due to the well-controlled outbreak in Taiwan, and the cumulative Operating revenue increased by approximately 13% as of Dec. 31, 2020 compared to the same period last year, indicating that the outbreak did not have a serious impact on the Company's operations. Although the recent epidemic in Europe and the United States is on the rise, the Company's operating revenue is concentrated in Taiwan and is not expected to be significantly affected.

The Company's working capital, salaries, interest, rent and other expenses have remained normal, and there are no applications for relief from the government.

IIIX. Disclosures

(I) Information on significant transactions and (II) information on investees:
Lending to others: None.
Endorsement and guarantee for others: (Schedule 1).
Marketable securities held at the end of the period (excluding investments in subsidiaries, associates and joint ventures): (Schedule 2).
The cumulative amount of securities purchased or sold reaches NT$300 million or 20% of the paid-in capital: None.

252

Acquisition of real estate amounting to at least NT$300 million or 20% of the paid-in capital: None.
Disposal of real estate amounting to at least NT$300 million or 20% of the paid-in capital: None.
The amount of purchase or sale of goods with related parties reaches NT$100 million or 20% of the paid-in capital: (Schedule 3).
Related party receivables amounting to at least NT$100 million or 20% of the paid-in capital: None.
Engage in derivative transactions: None.
Information of investee companies: (Schedule 4).
(III) Information of investment from Mainland China: None.
(IV) Information of Major Shareholders: The name of shareholders who hold 5% of the Company’s shares and the number and ratio of the shares held by them (Schedule 5).

253

Unit: NT$ thousands (unless otherwise specified)

Sanitar Co., Ltd.

Endorsement and Guarantee for Others

From Jan. 1 to Dec. 31, 2020

Schedule 1

No.	Name of the endorser/guarantor	Guaranteedparty	Guaranteedparty	Limits on endorsement/guar antee amount provided to each guaranteed party	Maximum balance for the period	Ending balance	Amount actually drawn	Amount of endorsement/guar antee collateralized by properties	Ratio of accumulated endorsement/gu arantee to net equity per latest financial statements (%)	Maximum endorsement/guar antee amount allowable	Guarantee provided by parent company	Guarantee provided by a subsidiary	Guarantee provided to entities in Mainland China	Note
		Company name	Relationships
1	Sanitar Co., Ltd.	Vietnam Caesar Sanitary Wares Joint Stock Company	Investment accounted for using the equity method	$ 340,563	$ 196,625	$ 142,400	$ 59,680	$ -	8.36	$ 681,126	Y	N	N	(Note)

Note: The endorsement/guarantee limit is based on the endorsement/guarantee procedures approved by the shareholders' meeting and stipul ated by the Bureau of Securities and Futures of the Financial Supervisory Commission, Executive Yuan on December 18, 2002, by Order no.(91)-Tai-tsai-zhen-(6)-0910161919. The total amount of the Company's endorsement and guarantee shall not exceed 40% of the Company's net worth and the amount of endorsement and guarantee for subsidiaries directly holding more than 50% of the common stock shall not exceed 20% of the Company's net worth for the period.

254

Sanitar Co., Ltd.

Marketable Securities Held at the End of the Period

Dec. 31, 2020

Schedule 2

Unit: NT$ thousands (unless otherwise specified)

Holding Company	Type and Name of Marketable Securities	Relationship with the issuer of the marketable securities	Financial statement account		End of the period	End of the period	End of the period			Note
				Number of shares	Carrying amount		Shareholding percentage		Fair value
Sanitar Co., Ltd.	Stock Amsalp Biomedical Corporation	-	Non-current financial assets measured at the fair value through other comprehensive income	154,700		$ 262	18.20%		$ 262	`－`

255

Sanitar Co., Ltd.

The amount of purchase or sale of goods with related parties reaches NT$100 million or 20% of the paid -in capital From Jan. 1 to Dec. 31, 2020

Schedule 3

Unit: NT$ thousands (unless otherwise specified)

Company name	Transaction counterparty	Relationships		Transaction	Transaction		Situation and reason of why trading conditions are different from general trading	Situation and reason of why trading conditions are different from general trading	Notes/ accounts receivable or payable	Notes/ accounts receivable or payable	Note
			Purchases (Sales)	Amount	Ratio to total purchases/sales amount(`％`)	Loan period	Unit price	Loan period	Balance	Ratio to total amount of notes/accounts receivable or payable (%)
Sanitar Co., Ltd.	Vietnam Caesar Sanitary Wares Joint Stock Company	Investment accounted for using the equity method	Purchase	$ 402,339	39%	Vietnam Caesar Sanitary Wares Joint Stock Company should pay within 30 days after the delivery, but this can be adjusted regarding the demand for funds.	Discussed by both parties in the transaction with reference to the market price and gross profit of products	Vietnam Caesar Sanitary Wares Joint Stock Company should pay within 30 days after the delivery, but this can be adjusted regarding the demand for funds.	Accounts payable $ -	-	Note

Note: Transaction with related parties on the consolidated and parent company only statements were all adjusted and amortized .

256

Sanitar Co., Ltd.

Name, Location, and Other Related Information of Investees From Jan. 1 to Dec. 31, 2020

Schedule 4

Unit: NT$ thousands (unless otherwise specified)

Name of the Investment Company	Name of the Investee Company	Location	Main businesses	Original investment amount	Original investment amount	Sharesheld as ofthe end ofthe period	Sharesheld as ofthe end ofthe period	Sharesheld as ofthe end ofthe period	Net income (loss) of the investee	Gain (loss) on investment recognized in theperiod	Note
				End of the period	End of last period	Number of shares (1,000 shares)	Ratio (`％`) (Note 3)	Carrying amount
Sanitar Co., Ltd. Sanitar Co., Ltd.	Vietnam Caesar Sanitary Wares Joint Stock Company Kai-Sheng Sanitary Wares Co., Ltd.	Vietnam Taiwan	Manufacturing and sale of sanitary equipment and water supply equipment Manufacturing and sale of sanitary equipment and water supply equipment	$ 665,303 13,260	$ 665,303 -	41,878 1,326	100 51	$ 1,225,499 13,221	$ 63,253 ( 76 )	$ 58,988 ( 39 )	Note 1, 2, 3 Note 2

Note 1: The difference between the comprehensive income of Vietnam Caesar Sanitary Wares Joint Stock Company and the gain on investment recognized by Sanitar Co., Ltd. was the net change of the unrealized gains or losses from upstream sale, which was NT$4,264,000.

Note 2: The gain (loss) on investment on the consolidated and parent company only statements were adjusted and amortized.

。 Note 3: The ratio of shares held as of the end of the period was 99.9993%

257

Sanitar Co., Ltd. Dec. 31, 2020

Information of Major Shareholders

Schedule 5

Name of Major Shareholder	Shares	Shares
	Number of shares held by the person	Shareholding percentage
HSIAO, CHUN-HSIANG	5,013,581	6.90%

Note 1: Information of Major Shareholders is calculated based on the last business day of the quarter in which the shareholders held 5% or more of the Company's common and preferred shares (including Treasury shares). The number of shares in the consolidated financial statements may differ from the actual number of shares delivered due to different bases of computation.
Note 2: The above information is revealed by the trustee's opening of a trust account with individual subaccounts of the principal if the shareholder has delivered the shares to the trust. As for the shareholder's shareholding of more than 10% of insider shares reported under the Securities and Exchange Act, the shareholding includes the shareholding of the shareholder himself/herself plus the shareholding of the shareholder delivered to the trust and has the right to decide the use of the trust property, etc. Please refer to the Market Observation Post System for the information on insider shareholding reporting.

258

§DETAIL TABLES OF MAJOR ACCOUNTING ITEMS§

ITEM		NO.
Detail Tables of Assets, Liabilities and Equity
Detail Table of Cash and Cash Equivalents		Detail Table 1
Detail Table of Notes Receivable		Detail Table 2
Detail Table of Accounts Receivable		Detail Table 3
Detail Table of Inventory		Detail Table 4
Detail Table of Prepayments		Detail Table 5
Detail Table of the Changes in Non-current		Detail Table 6
Financial Assets Measured at Fair Value
through Other Comprehensive Income
Detail Table of the Changes in Investment		Detail Table 7
Accounted for Using Equity Method
Detail Table of the Changes in Property, Plant		Note XI
and Equipment
Detail Table of the Changes in	the	Note XI
Accumulated Depreciation of Property,
Plant and Equipment
Detail Table of the Changes in Right-of-use		Note XII
Assets
Detail Table of the Changes in	the	Note XII
Accumulated Depreciation of Right-of-use
Assets
Detail Table of the Changes in Intangible		Note XIII
Assets
Detail Table of Refundable Deposits		Detail Table 8
Detail Table of Other Non-current Assets		Note XIII
Detail Table of Accounts Payable		Detail Table 9
Detail Table of Other Payables		Note XVI
Detail Table of Other Current Liabilities`－`		Detail Table 10
Other
Detail Table of Lease Liabilities		Detail Table 11
Detail Tables of Profit and Loss Items
Detail Table of Operating Revenue		Detail Table 12
Detail Table of the Cost of Sales		Detail Table 13
Detail Table of Other Operating Costs		Detail Table 14
Detail Table of Operating Expenses		Detail Table 15
Chart of Accounts for the Employee Benef	its,	Note XX

Chart of Accounts for the Employee Benefits, Depreciation, Depletion and Amortization Expenses in the Period

259

Sanitar Co., Ltd.

Detail Table of Cash and Cash Equivalents

Dec. 31, 2020

Detail Table 1 Unit: NT$ thousands unless otherwise specified

Item Cash on hand and working capital Bank deposits Checking deposit Demand deposit	Summary		Amount
			$ 242 53,171 392 $ 53,805

260

Sanitar Co., Ltd.

Detail Table of Notes Receivable

Dec. 31, 2020

Detail Table 2

Unit: NT$ thousands

Name of Customer Non-related parties Pu`Ｏ`Sanitary Ware and Building Materials Co., Ltd. Han`Ｏ`Construction Co., Ltd. Feng`Ｏ`Enterprise Co., Ltd. Yong`Ｏ`Energy Co., Ltd. Other (Note)	Summary Payment for goods `〃` `〃` `〃` `〃`		Amount
			$ 3,940 2,285 1,661 701 5,217 $ 13,804

Note: The balance of each account did not exceed 5% of the balance of the subject.

261

Sanitar Co., Ltd.

Detail Table of Accounts Receivable

Dec. 31, 2020

Detail Table 3

Unit: NT$ thousands

Name of Customer Related parties Chia-Ta-Hang Co., Ltd. Vietnam Caesar Sanitary Wares Joint Stock Company Non-related parties A Company B Company C Company Other (Note) Minus: Allowance for bad debts	Summary Payment for goods `〃` Payment for goods `〃` `〃` `〃`		Amount
		(	$ 4,201 4,172 $ 8,373 $ 46,323 14,867 10,737 95,876 167,803 4,185) $ 163,618

Note: The balance of each account did not exceed 5% of the balance of the subject.

262

Sanitar Co., Ltd.

Detail Table of Inventory

Dec. 31, 2020

Detail Table 4

Unit: NT$ thousands

Item Merchandise inventory Minus: Loss on the provision for obsolete stocks Dead Stock Merchandise inventory Minus: Loss on the provision for dead stock		Cost $ 165,403 698) 164,705 15,906 15,906) - $ 164,705	Lower of Cost or Market	Lower of Cost or Market	Lower of Cost or Market
			Price drop ( $ 698 ) - ( 698) ( 15,906 ) - ( 15,906) ($ 16,604)		Premium
	( (				$ 88,139 - 88,139 - - - $ 88,139

Note: The market price of inventory was based on net realizable value.

263

Sanitar Co., Ltd.

Detail Table of Prepayments

Dec. 31, 2020

Detail Table 5

Unit: NT$ thousands

Item Other prepaid expenses Prepayment for goods	Summary Prepayment of insurance premium, etc. Inventory of supply K Company Z Company Other		Amount
			$ 1,204 981 $ 2,185 $ 8,688 1,665 1,495 $ 11,848

264

Sanitar Co., Ltd.

Detail Table of Non-current Financial Assets Measured at Fair Value through Other Comprehensive Income

Dec. 31, 2020s

Detail Table 6 Name of Security Stock of domestic unlisted companies Amsalp Biomedical Corporation	Number of shares `／`unit 154,700	Carrying amount (NT$) 10	Unit: NT$ thousands (unless otherwise specified) Fair value Unit price (NT$) Total Provided as collateral or pledge 1.69 $ 262 No	Unit: NT$ thousands (unless otherwise specified) Fair value Unit price (NT$) Total Provided as collateral or pledge 1.69 $ 262 No
			Unit price (NT$) 1.69

265

Sanitar Co., Ltd.

Detail Table of the Changes in Investment Accounted for Using Equity Method From Jan. 1 to Dec. 31, 2020

Detail Table 7

Unit: NT$ thousands (unless otherwise specified)

Name of the Investee Company Foreign unlisted company Vietnam Caesar Sanitary Wares Joint Stock Company Kai-Sheng Sanitary Wares Co., Ltd.	Beginning balance Number of shares Amount 41,877 $ 1,340,484 - - $ 1,340,484	Beginning balance Number of shares Amount 41,877 $ 1,340,484 - - $ 1,340,484	Increase in the fiscal year Number of shares Amount - $ - 1,326 13,260 $ 13,260	Increase in the fiscal year Number of shares Amount - $ - 1,326 13,260 $ 13,260	Decrease in the fiscal year Number of shares Amount Decrease -Note - ( $ 173,973 ) (Note 2) - - ($ 173,973)	Decrease in the fiscal year Number of shares Amount Decrease -Note - ( $ 173,973 ) (Note 2) - - ($ 173,973)	Share of the profit or loss of subsidiaries, associates and joint ventures accounted for using equity method $ 58,988 ( 39) $ 58,949		Ending balance		Amount $ 1,225,499 13,221 $ 1,238,720	Net value of equity (Note 1) Unit price (NT$) Total - $ 1,241,978 - 13,221 $ 1,255,199	Net value of equity (Note 1) Unit price (NT$) Total - $ 1,241,978 - 13,221 $ 1,255,199	Provided as collateral or pledge
	Number of shares 41,877 -		Number of shares - 1,326		Number of shares - -			Number of shares 41,877 1,326	Shareholding percentage 100 (Note 3) 51			Unit price (NT$) - -
						( (	(							No No

Note 1: Calculated with the net value of the equity on the financial statements of the investee companies audited by CPAs, an d the shareholding percentage of the Company .

Note 2: This was composed of the exchange differences on translation of foreign financial statements of NT$85,864, 000 and the distribution of earnings by Vietnam Caesar Sanitary Wares Joint Stock Company , which was NT$88,109,000.

Note 3: The shareholding percentage was 99.993%.

Note 4: The difference between the net value and the carrying amount came from the unrealized gain on the upstream sale at the end of year, which was NT$16,479,000.

266

Sanitar Co., Ltd.

Detail Table of Refundable Deposits

Dec. 31, 2020

Detail Table 8 Item Refundable deposits	Unit: NT$ thousands Summary Amount Security deposits for warehouses, offices, etc. $ 1,099 Notes of refundable deposits 3,253 Other 368 $ 4,720

267

Sanitar Co., Ltd.

Detail Table of Accounts Payable

Dec. 31, 2020

Detail Table 9

Unit: NT$ thousands

Name Non-related parties A Company B Company C Company D Company E Company Other (Note)	Summary Payment for goods `〃` `〃` `〃` `〃` `〃`		Amount
			$ 4,946 4,496 3,783 2,030 1,770 16,517 $ 33,542

Note: The amount of each account did not exceed 5% of the balance of the subject.

268

Sanitar Co., Ltd.

`－` Detail Table of Other Current Liabilities Other

Dec. 31, 2020

Detail Table 10 Item Tax payable Advance received Collections	Unit: NT$ thousands Summary Amount Sales tax $ 7,077 79 Deduction of premium for the insurance of employees, etc. 377 $ 7,533

269

Detail Table 11 Item Buildings	Sanitar Co., Ltd. Detail Table of Lease Liabilities Dec. 31, 2020 Summary Lease period Exhibition center 107/4/4~114/6/30	Discount rate 1.66%~1.89%	Ending balance $ 35,895	Unit: NT$ thousands Remarks

270

Sanitar Co., Ltd.

Detail Table of Operating Revenue

2020

Detail Table 12

Unit: NT$ thousands

Name Porcelain Water use equipment Automated equipment Bathtubs Other Other operating revenue	Summary Toilet bowls, water tanks, basin stands and urinal bowls, etc. Taps, shower heads, shower pillars, etc. Computer toilet seat covers, etc. Mirrors and accessories, etc. Income from management services Income from maintenance	Quantity 532,000 pcs 151,000 pcs 54,000 pcs 6,000 pcs		Amount
				$ 709,649 232,305 204,018 27,849 268,499 1,442,320 14,907 14,169 29,076 $ 1,471,396

271

Sanitar Co., Ltd.

Detail Table of the Cost of Sales

2020

2020
Detail Table 13	Unit: NT$ thousands
Item		Amount
Merchandise inventory at the beginning of the
period		$ 155,949
Plus: net value of purchase in the period		1,006,521
Minus: Inventory short	(	106 )
Minus: Inventory obsolescence	(	421 )
Minus: Transferred into other operating costs
`－`maintenance material fees	(	3,999 )
Minus: Transferred into sales expenses`－`
advertising fee	(	18 )
Minus: Inventory at the end of the period	(	181,309 )
Income from the sale of leftover materials	(	11 )
Loss on inventory obsolescence		421
Inventory short		106
Loss from market price decline and obsolete
and slow-moving inventory		2,786
Cost of sales		$ 979,919

272

Sanitar Co., Ltd.

Detail Table of Other Operating Costs

2020

2020	2020	2020
Detail Table 14 Unit: NT$ thousands Item Amount Salary expenses $ 34,307 Insurance premium 3,080 Maintenance fees 3,999 Other (Note) 4,193 $ 45,579
		$ 34,307 3,080 3,999 4,193 $ 45,579

Note: The amount of each account did not exceed 5% of the balance of the subject.

273

Sanitar Co., Ltd.

Detail Table of Operating Expenses

2020

Detail Table 15

Unit: NT$ thousands

Item Salary expenses Transportation fee Insurance premium Advertising fee Depreciation expense Other (Note) Expected credit losses		Marketing expenses $ 43,832 11,913 4,336 26,699 22,850 15,899 $ 125,529	Management expenses $ 53,994 22 4,360 30 9,895 18,457 $ 86,758		R&D expenses $ 5,286 70 403 - 60 2,184 $ 8,003		Total
							$ 103,112 12,005 9,099 26,729 32,805 36,540 220,290 2,270 $ 222,560

Note: The amount of each account did not exceed 5% of the balance of the subject.

274

275 -

Stock Code: 1817

Sanitar Co., Ltd. and Its Subsidiaries

Consolidated Financial Statements and Accountant’s Audit Report 2020 & 2019

Address: 7F., No. 111-8, Xingde Rd., Sanchong Dist., New Taipei City Tel: (02)85123712

276 -

Accountant's Audit Report

To Sanitar Co., Ltd.:

Audit opinion

I have audited the financial statements of Sanitar Co., Ltd. and Its Subsidiaries, which comprise the Consolidated Statements of Financial Position as as of Dec. 31, 2020 and Dec. 31, 2019, the Consolidated Statements of Comprehensive Income from Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019, Consolidated Statement of Change in Equity, Consolidated Statement of Cash Flows, and Consolidated Financial Statement Notes (including a summary of significant accounting policies).

In my opinion, the accompanying consolidated financial statements are properly drawn up in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), International Financial Reporting Interpretations Committee (IFRIC), and Standing Interpretations Committee (SIC) (hereinafter referred to as IFRSs) recognized and announced effectiveness by Financial Supervisory Commission (hereinafter referred to as FSC) so as to give a true and fair view of the consolidated financial position of the Sanitar Co., Ltd. and Its Subsidiaries as of December 2020 and 2019 and of the financial performance, changes in equity and cash flows of Sanitar Co., Ltd. and Its Subsidiaries from January 1 to December 31, 2020 and 2019.

Basis for audit opinion

I conducted my audit in accordance with Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and

277 -

Generally Accepted Auditing Standards. My responsibilities under those standards are further described in the 'Accountant's responsibilities for the audit of the financial statements' section of our report. I am independent of Sanitar Co., Ltd. and Its Subsidiaries in accordance with the Accounting and Corporate Regulatory Authority Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that t he audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Key Audit Matter

The key auditing matter is which that, in my professional judgment, is most significant to my review of the Consolidated Financial Statements of Sanitar Co., Ltd. and Its Subsidiaries for 2020. Such matter has been considered in the process of examining the consolidated financial statements taken as a whole and forming an opinion thereon, and I do not express an opinion on the matter individually.

The following is the description of the key audit matter in the Consolidated Financial Statements of Sanitar Co., Ltd. and Its Subsidiaries for 2020:

Key Audit Matter: Authenticity in Sales to Specific Customers

Due to the significant audit risk associated with the revenue recognition under auditing standards, Sanitar Co., Ltd. and Its Subsidiaries are mainly dealing with distributors and have added significant sales from specific non-distributor customers, therefore, based on the consideration of the materiality of the financial statements, the authenticity in sales revenue from specific customers with high order amounts and significant new sales in the current year is considered as a key audit matter. Please refer to Notes 4(11) and 20 to the Parent Company Only Financial Statements.

In connection with the above key matter, I conducted the following principal audit procedures:

To understand, evaluate and test the effectiveness of the design and implementation of the internal control system related to revenue recognition.
To obtain a detailed sales breakdown from specific customers in fiscal 2020, verify the original orders, delivery notes, invoices and other related
278 -

documents of the relevant transactions, and verify with the recorded amounts to confirm the authenticity of the revenues.

To obtain a breakdown of subsequent sales returns from specific customers, verify the related documents and examine the reasonableness of the returns.

Other Matters

Sanitar Co., Ltd. has prepared its Parent Company Only Financial Statements for the years ended December 31, 2020 and 2019, and I have provided my unqualified opinion on those statements for reference.

Responsibilities of management and directors for the consolidated financial

statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs recognized and announced effectiveness by FSC, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorized use or disposition.

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

The responsibilities of the governing body (including supervisors) include overseeing the financial reporting process of Sanitar Co., Ltd. and Its Subsidiaries

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Auditors’ responsibilities for the audit of the consolidated financial

statements

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

As part of an audit in accordance with GAAS, I exercise professional judgment and maintain professional skepticism throughout the audit. I also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for audit opinions. Because fraud may be related to conspiracy, forgery, deliberate omission, false statement or breach of internal control, the risk of a material misstatement caused by fraud which is not identified is higher than the risk of a material misstatement caused by any error.
Obtain an understanding of internal controls 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 internal control effectiveness of Sanitar Co., Ltd. and Its Subsidiaries.
Assess the appropriateness of management’s use of accounting policies and the reasonability of the accounting estimate and relevant disclosure.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of Sanitar Co., Ltd. and Its Subsidiaries 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
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disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause Sanitar Co., Ltd. and Its Subsidiaries to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the consolidated financial statements (including the relevant notes), and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
I have obtained sufficient and appropriate evidence to audit the consolidated financial information of Sanitar Co., Ltd. and Its Subsidiaries to express an opinion on the Consolidated Financial Statements. I am responsible for the guidance, supervision and execution of the audit and for forming an audit opinion on Sanitar Co., Ltd. and Its Subsidiaries.

I communicate with the governing body regarding, among other matters, the planned scope and timing of the audit and significant audit findings (including any significant deficiencies in internal controls that we identify during our audit).

I have determined the key audit matter for the audit of the Consolidated Financial Statements of Sanitar Co., Ltd. and Its Subsidiaries for the year ended December 31, 2020 from the communications I have had with the governing body. I identified such matter in my auditor's report, except for those matters that are not permitted by law to be disclosed publicly or, in the rarest of circumstances, I decided not to communicate those matters in my auditor's report because I reasonably could expect the negative effect of such communicati on to outweigh the public interest.

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Deloitte & Touche Accountant SU, YU-XIU

FSC Approval Number: Jin-Guan-Zheng-Shen-Zi No.1040024195

Accountant WENG, BO-REN

FSC Approval Number: Jin-Guan-Zheng-Shen-Zi No. 1010028123

March 9, 2021

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Sanitar Co., Ltd. and Its Subsidiaries

Consolidated Statement of Financial Position

Dec. 31, 2020 & 2019

Unit: NT$ thousands

Code 1100 1136 1150 1170 1180 1200 1210 1220 130X 1419 1421 1479 11XX 1517 1600 1755 1780 1840 1915 1920 1990 15XX 1XXX Code 2100 2130 2170 2200 2230 2280 2399 21XX 2570 2580 2645 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 31XX 36XX 3XXX	Assets Current assets Cash and cash equivalents (Note IV, VI and XXV) Financial assets measured at amortized cost – current (Note IV, VIII and XXV) Notes receivable, net (Note IV, IX and XXV) Net value of accounts receivable (Note IV, IX, XX and XXV) Accounts receivable`－`Related parties, net (Note IV, IX, XX, XXV and XXVI) Other accounts receivable (Note IV and XXV) Other accounts receivable`－`Related parties (Note XXV and XXVI) Income tax assets in the current period (Note XXII) Inventory (Note IV, X and XXVII) Other prepaid expenses Prepayments for goods Other current assets`－`other (Note XV) Total of current assets Non-current assets Financial assets measured at fair value through other comprehensive income - non-current (Note IV, VII and XXV) Property, plant and equipment (Note IV, XII, XXVII and XXVIII) Right-of-use assets (Note IV and XIII) Intangible assets (Note IV and XIV) Deferred income tax assets (Note IV and XXII) Prepayments for business facilities (Note XXVIII) Refundable deposits Other non-current assets`－`other (Note XV) Total of non-current assets Total assets Liabilities and Equity Current liabilities Short-term loans (Note XVI and XXV) Contract liabilities - current (Note IV and XX) Accounts payable (Note XVII and XXV) Other payables (Note XVIII and XXV) Current income tax liabilities (Note IV, XX and XXV) Lease liabilities - current (Note IV and XIII) Other current liabilities`－`other (Note XXV) Total of current liability Non-current liabilities Deferred income tax liabilities (Note IV and XXII) Lease liabilities - non-current (Note IV and XIII) Deposits received Total of non-current liability Total liability Equity attributable to the owners of the Company (Note IV, XIX and XXII) Share capital Common shares Additional paid-in capital Retained earnings Legal reserve Special reserve Unappropriated retained earnings Total retained earnings Other equity Treasury shares Total liabilities of the owners of the Company Non-controlling interests Total liabilities Total of liability and equity		Dec. 31, 2020		% 6 2 1 9 - - - - 26 - 1 1 46 - 43 5 - 3 2 - 1 54 100 14 - 3 4 2 1 - 24 7 2 - 9 33 29 11 9 6 22 37 9) 1) 67 - 67 100		Dec. 31, 2019
			Amount $ 164,816 56,199 13,804 226,984 4,201 2,257 5 - 652,151 9,505 30,751 12,510 1,173,183 262 1,096,721 136,307 5,474 63,646 45,474 7,754 20,192 1,375,830 $ 2,549,013 $ 344,442 5,412 70,200 107,290 51,373 12,919 8,404 600,040 170,786 62,402 258 233,446 833,486 726,000 277,452 220,568 166,030 565,898 952,496 237,459) 15,674) 1,702,815 12,712 1,715,527 $ 2,549,013				Amount $ 238,566 46,888 14,519 226,806 3,419 2,836 5 7,486 512,549 7,824 7,484 7,043 1,075,425 - 1,189,276 146,625 6,634 46,335 41,565 7,119 15,026 1,452,580 $ 2,528,005 $ 346,140 8,714 91,510 113,451 16,409 14,915 3,451 594,590 176,566 63,316 276 240,158 834,748 726,000 277,452 202,583 146,675 506,566 855,824 166,030) - 1,693,246 11 1,693,257 $ 2,528,005		%
		( (		( (		(		(	10 2 1 9 - - - - 20 1 - - 43 - 47 6 - 2 2 - - 57 100 14 - 4 4 1 1 - 24 7 2 - 9 33 29 11 8 6 20 34 7) - 67 - 67 100

The notes attached are part of the consolidated financial report.

Chairperson: HSIAO, JUN-XIANG

Manager: CHEN, WEI-CHIH

Accounting Supervisor:CHEN, YU-CHUAN

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Sanitar Co., Ltd. and Its Subsidiaries

Consolidated Statement of Comprehensive Income

From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019

Unit: NT$ thousands Except the earnings per share are in NT$

Code Operating revenue (Note IV, XX and XXVI) 4110 Sales revenue 4170 Sales return 4190 Sales allowances 4800 Other operating revenue 4000 Total operating revenue Operating costs (Note X and XXI) 5110 Cost of sales 5800 Other operating costs 5000 Total operating costs 5900 Gross operating profit Operating expenses (Note XXI) 6100 Marketing expenses 6200 Management expenses 6300 R&D expenses 6450 Expected credit losses 6000 Total operating expenses 6500 Other income and expenses, net (Note XXI) 6900 Net operating profit Non-operating income and expenses (Note IV) 7100 Interest income 7110 Rental income 7190 Other income 7230 Foreign exchange gain 7510 Interest expense 7590 Miscellaneous expenses 7000 Non-operating Total income and expenses	2020	% 102 ( 1 ) ( 2 ) 1 100 ( 66 ) ( 2) ( 68) 32 ( 11 ) ( 8 ) ( 1 ) - ( 20) - 12 - - - - - - -	2019
	Amount $ 2,347,987 ( 9,273 ) ( 46,362 ) 14,169 2,306,521 ( 1,522,765 ) ( 49,588) ( 1,572,353) 734,168 ( 255,241 ) ( 169,215 ) ( 17,706 ) ( 2,329) ( 444,491) ( 631) 289,046 4,779 530 1,733 1,740 ( 8,125 ) ( 128) 529		Amount $ 2,389,950 ( 28,829 ) ( 38,285 ) 12,090 2,334,926 ( 1,588,252 ) ( 44,991) ( 1,633,243) 701,683 ( 270,248 ) ( 165,849 ) ( 17,223 ) ( 1,860) ( 455,180) 210 246,713 4,654 2,286 1,261 2,035 ( 8,067 ) ( 3,339) ( 1,170)	%
				102 ( 1 ) ( 2 ) 1 100 ( 68 ) ( 2) ( 70) 30 ( 11 ) ( 7 ) ( 1 ) - ( 19) - 11 - - - - - - -

(Continued on the next page)

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(Continued from the previous page)

C o d e 7900 Net income before tax 7950 Income tax expense (Note IV and XXII) 8000 Net income in the term Other comprehensive income (Note IV, XIX and XXII) Items that will not be reclassified to profit or loss: 8316 Investment in equity instruments measured at Unrealized gains or losses measured at FVTOCI 8360 Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences on translation of foreign financial statements 8399 income tax related to the items that may be reclassified 8300 Other comprehensive income in the term (net value after tax) 8500 Total comprehensive income in the term Net income attributable to: 8610 The owners of the Company 8620 Non-controlling interests 8600 The total comprehensive income attributed to: 8710 The owners of the Company 8720 Non-controlling interests 8700 Earnings per share (Note XXIII) 9750 Basic 9850 Diluted	2020
	A m o u n t $ 289,575 ( 69,519) 220,056 ( 2,738 ) ( 85,866 ) 17,173 ( 71,431) $ 148,625 $ 220,092 ( 36) $ 220,056 $ 148,663 ( 38) $ 148,625 $ 3.04 $ 3.03

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The notes attached are part of the consolidated financial report.

Chairperson: HSIAO, JUN-XIANG Manager: CHEN, WEI-CHIH Accounting Supervisor:CHEN, YU-CHUAN

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E q u i t	y a t t	Sanitar Co., Ltd. and Its Subsidiaries Consolidated Statement of Change in Equity From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019 r i b u t a b l e t o t h e o w n e r s	Sanitar Co., Ltd. and Its Subsidiaries Consolidated Statement of Change in Equity From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019 r i b u t a b l e t o t h e o w n e r s	Sanitar Co., Ltd. and Its Subsidiaries Consolidated Statement of Change in Equity From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019 r i b u t a b l e t o t h e o w n e r s	Sanitar Co., Ltd. and Its Subsidiaries Consolidated Statement of Change in Equity From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019 r i b u t a b l e t o t h e o w n e r s	Sanitar Co., Ltd. and Its Subsidiaries Consolidated Statement of Change in Equity From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019 r i b u t a b l e t o t h e o w n e r s	o f t h	e C o m		Unit: NT$ thousands Non-controlling interests Total equity $ 10 $ 1,699,740 - - - - - ( 166,980 ) 1 179,852 - ( 19,355) 1 160,497 11 1,693,257 - - - - - ( 123,420 ) ( 1 ) ( 1 ) ( 36 ) 220,056 ( 2) ( 71,431) ( 38) 148,625 12,740 12,740 - ( 15,674) $ 12,712 $ 1,715,527	Unit: NT$ thousands Non-controlling interests Total equity $ 10 $ 1,699,740 - - - - - ( 166,980 ) 1 179,852 - ( 19,355) 1 160,497 11 1,693,257 - - - - - ( 123,420 ) ( 1 ) ( 1 ) ( 36 ) 220,056 ( 2) ( 71,431) ( 38) 148,625 12,740 12,740 - ( 15,674) $ 12,712 $ 1,715,527	Unit: NT$ thousands Non-controlling interests Total equity $ 10 $ 1,699,740 - - - - - ( 166,980 ) 1 179,852 - ( 19,355) 1 160,497 11 1,693,257 - - - - - ( 123,420 ) ( 1 ) ( 1 ) ( 36 ) 220,056 ( 2) ( 71,431) ( 38) 148,625 12,740 12,740 - ( 15,674) $ 12,712 $ 1,715,527
S h a r e	c a p i t a l A m o u n t $ 726,000 - - - - - - 726,000 - - - - - - - - - $ 726,000	A d d i t i o n a l paid-in capital $ 277,452 - - - - - - 277,452 - - - - - - - - - $ 277,452	R e t a i n	e d e a r	n i n g s Unappropriated retained earnings $ 514,876 ( 25,401 ) 4,220 ( 166,980 ) 179,851 - 179,851 506,566 ( 17,985 ) ( 19,355 ) ( 123,420 ) - 220,092 - 220,092 - - $ 565,898	O t h e r	e q u i t y Unrealized gains or losses on financial assets at fair value through other comprehensive income $ - - - - - - - - - - - - - ( 2,738) ( 2,738) - - ($ 2,738)	Treasury shares $ - - - - - - - - - - - - - - - - ( 15,674) ($ 15,674)
						Exchange difference arising from translation of foreign operation financial statements ( $ 146,675 ) - - - - ( 19,355) ( 19,355) ( 166,030 ) - - - - - ( 68,691) ( 68,691) - - ($ 234,721)
N u m b e r o f shares (1,000 s h a r e s ) 72,600 - - - - - - 72,600 - - - - - - - - - 72,600			Legal reserve $ 177,182 25,401 - - - - - 202,583 17,985 - - - - - - - - $ 220,568	Special reserve $ 150,895 - ( 4,220 ) - - - - 146,675 - 19,355 - - - - - - - $ 166,030
				(	( ( ( ( (	( ( ( ( ( ( (	( ( (	( (	( ( ( ( (	( ( ( (	( ( ( ( ( (	$ 1,699,740 - - 166,980 ) 179,852 19,355) 160,497 1,693,257 - - 123,420 ) 1 ) 220,056 71,431) 148,625 12,740 15,674) $ 1,715,527

Unit: NT$ thousands

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The notes attached are part of the consolidated financial report.

Chairperson: HSIAO, JUN-XIANG

Manager: CHEN, WEI-CHIH Accounting Supervisor:CHEN, YU-CHUAN

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Sanitar Co., Ltd. and Its Subsidiaries

Consolidated Statement of Cash Flows

From Jan. 1 to Dec. 31, 2020 and from Jan’. 1 to Dec. 31, 2019

Unit: NT$ thousands

Code Cash flow from operating activities A10000 Net income before tax in the term A20010 Income charges (credits) A20100 Depreciation expense A20200 Amortization expense A20300 Expected credit losses A20900 Interest expense A21200 Interest income A22500 Net income from the disposal and obsolescence of property, plant and equipment A23700 Loss for market price decline and obsolete and slow-moving inventory A23800 Gains on inventory value recoveries A29900 Profit from lease modification A30000 Net changes in operating assets and liabilities A31130 Notes receivable A31150 Accounts receivable A31160 Accounts receivable `－`Related parties A31180 Other receivables A31190 Other receivables `－` related parties A31200 Inventory A31220 Other prepaid expenses A31230 Prepayments A31240 Other current assets A32125 Contract liabilities - current A32150 Accounts payable A32180 Other payables A32230 Other current liabilities A33000 Cash from operating activities A33100 Interests received A33300 Interests paid A33500 Income tax paid AAAA Net cash inflow from operating activities	2020 $ 289,575 107,789 2,004 2,329 8,125 ( 4,779 ) ( 91 ) 2,427 - ( 244 ) 715 ( 2,512 ) ( 782 ) 580 - ( 142,029 ) ( 1,681 ) ( 23,267 ) ( 5,467 ) ( 3,302 ) ( 21,310 ) ( 5,904 ) 4,953 207,129 4,778 ( 8,182 ) ( 33,113) 170,612	2019
		$ 245,543 86,579 1,681 1,860 8,067 ( 4,654 ) ( 357 ) - ( 1,085 ) - 13,886 ( 22,837 ) ( 1,063 ) ( 1,208 ) ( 5 ) 83,050 1,897 ( 1,180 ) 10,895 6,209 ( 18,355 ) ( 9,708 ) 619 399,834 4,654 ( 4,083 ) ( 52,965) 347,440

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(Continued on the next page)

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(Continued from the previous page)

Code Cash flow from investing activities B00010 Acquisition of financial assets measured at fair value through other comprehensive income B00040 Increase in financial assets measured at amortized cost B02700 Purchase of property, plant and equipment B02800 Price for the disposal of property, plant and equipment B03700 Increase in refundable deposits B03800 Decrease in refundable deposits B04500 Acquisition of intangible assets B06700 Increase in other non-current assets B07100 Increase in prepayments for business facilities BBBB Net cash outflow from investing activities Cash flow from financing activities C00100 Increase in short-term loans C00200 Decrease in short-term loans C03100 Return of deposits received C04020 Repayment of lease principal C04500 Payment of dividends for the owners of the Company C04900 Redemption cost for treasury shares C05800 Payment of cash dividends for non-controlling interests C09900 Increase in non-controlling interests CCCC Net cash outflow from financing activities DDDD Effect of the changes in exchange rate on cash and cash equivalents EEEE Increase (decrease) in cash and cash equivalents E00100 Beginning balance of cash and cash equivalents E00200 Ending balance of cash and cash equivalents	2020 ( $ 3,000 ) ( 9,311 ) ( 38,484 ) 348 ( 875 ) 240 ( 1,197 ) ( 5,166 ) ( 4,676) ( 62,121) 523,302 ( 525,000 ) - ( 15,747 ) ( 123,420 ) ( 15,674 ) ( 1 ) 12,740 ( 143,800) ( 38,441) ( 73,750 ) 238,566 $ 164,816	2019
		$ - ( 31,148 ) ( 164,355 ) 492 ( 1,924 ) - ( 5,431 ) ( 5,795 ) ( 95,979) ( 304,140) 177,074 - ( 5 ) ( 16,277 ) ( 166,980 ) - - - ( 6,188) ( 10,488) 26,624 211,942 $ 238,566

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The notes attached are part of the consolidated financial report.

Chairperson: HSIAO, JUN-XIANG

Manager: CHEN, WEI-CHIH Accounting Supervisor:CHEN, YU-CHUAN

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Sanitar Co., Ltd. and Its Subsidiaries

Consolidated Financial Statement Notes

From Jan. 1 to Dec. 31, 2020 and from Jan. 1 to Dec. 31, 2019 (Unless otherwise specified, the basic unit for any amount shall be NT$ 1,000.)

I. Company history

Sanitar Co., Ltd. (hereinafter referred to as "the Company") was established in 1985 as Lian Tuo Co., Ltd. as a porcelain sanitary ware manufacturer and distributor, and was reorganized as San Yu Co., Ltd. on January 26, 1988. The Company was renamed Sanitar Co., Ltd. in 2003 and is mainly engaged in the sales of bathing equipment such as bathtubs, toilets, and copper water supply fittings.

In August 2011, the Company was approved by the Taipei Exchange (TPEx) to trade on the emerging stock market, and has been listed and traded on the Taiwan Stock Exchange (TWSE) since October 24, 2013.

The consolidated financial reports were expressed with the functional currency, New Taiwan Dollar, adopted by the Company. II. The date when the financial reports were authorized for issue and the process involved

The consolidated financial reports were approved by Board of
Directors on March 9, 2021.
III. Applicability of new issuing & revised standards and interpretation (1) First-time application of IFRSs recognized and announced effectiveness by FSC.

III. Applicability of new issuing & revised standards and interpretation

Except for the following statements, the application of IFRSs that are recognized and announced as effective by Financial Supervisory won’t cause any major changes to the accounting policies of the Consolidated Company:

Amendments to IAS 1 and IAS 8 —Definition of Material

The amendment applied to the Consolidated Company from January 1, 2020, switching to ''it could reasonably be expected to influence users'' as the materiality threshold and adjusting the disclosure in the consolidated financial statements to remove immaterial information that could obscure material information.

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(2) IFRSs recognized by the Financial Supervisory Commission ("FSC")
applicable in 2021

New/amended/revised standards and interpretations Amendments to IFRS 4 "Extension of Temporary Exemption from Applying IFRS 9 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 "Interest Rate Benchmark Reform - Phase II”

Amendments to IFRS 16 “Covid-19 Related Rent Concessions”

Effective date published by IASB

Effective from the date of publication Effective for annual reporting periods beginning on or after January 1, 2021 Effective for annual reporting periods beginning on or after June 1, 2020

Amendments to IFRS 16 “Covid-19 Related Rent Concessions”

The amendment to IFRS 16, "Covid-19 Related Rent Concessions," provides that if the Consolidated Company enters into a rental agreement with a lessor directly related to Covid-19, when certain conditions are met, the Consolidated Company may elect the practical expedient of recognizing a reduction in lease payments in profit or loss upon the occurrence of the concession and reducing the lease liability accordingly.

The Consolidated Company has not yet entered into any rental agreements in connection with the foregoing in 2020, but will elect to apply the foregoing if such agreements occur in 2021.

(3) IFRSs announced by IASB but have not been approved as effective by the FSC

Effective date published by New/amended/revised standards and interpretations IASB (Note 1) “Annual Improvements for 2018-2020” Jan. 1, 2022 (Note 2) Amendments to IFRS 3 “Updating a Reference to the Conceptual Framework” Jan. 1, 2022 (Note 3) Amendments to IFRS 10/IAS 28 “Sales or TBD Contributions of Assets Between an Investor and Its Associate/Joint Venture IFRS 17 “Insurance Contracts” Jan. 1, 2023 Amendments to IFRS 17 Jan. 1, 2023 Amendments to IAS 1 “Classification of Liabilities Jan. 1, 2023 as Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting Jan. 1, 2023 (Note 6) Policies”

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Amendments to IAS 8 “Definition of Accounting Jan. 1, 2023 (Note 7) Estimates” Amendments to IAS 16 “Property, Plant and Jan. 1, 2022 (Note 4) Equipment: Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts—Cost Jan. 1, 2022 (Note 5) of Fulfilling a Contract”

Note 1: Other than being special specified, the above new issued/ amended/ revised standards or interpretation will be effective from the fiscal year after the dates for above.
Note 2: The amendments to IFRS 9 apply to swaps or changes in the terms of financial liabilities occurring in annual reporting periods beginning after Jan. 1, 2022; the amendments to IAS 41 “Agriculture” apply to fair value measurements in annual reporting periods beginning after Jan. 1, 2022; and the amendments to IFRS 1 “First-time Adoption of IFRSs” apply retrospectively to annual reporting periods beginning after 1 January 2022. The amendment to IFRS 1 "First-time Adoption of IFRSs" apply retrospectively to annual reporting periods beginning on or after Jan. 1, 2022.
Note 3: The amendments apply to business combinations for which the acquisition date begins on or after Jan. 1, 2022 in the annual reporting period.
Note 4: The amendments apply to the plant, property and equipment that will be in the location and condition necessary to achieve management's intended mode of operation beginning on or after Jan. 1, 2021.
Note 5: The amendments apply to contracts with all obligations outstanding as at Jan. 1, 2022.
Note 6: The amendments apply prospectively to annual reporting periods beginning on or after Jan. 1, 2023.
Note 7: The amendments apply to changes in accounting estimates and changes in accounting policies that occur in annual reporting periods beginning on or after Jan. 1, 2023.
Amendments to IFRS 10/IAS 28 “Sales or Contributions of Assets Between an Investor and Its Associate/Joint Venture
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The amendments provide that if the Consolidated Company sells or contributes assets to an associate/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 the full amount of the gain or loss arising from those transactions if the aforementioned assets or subsidiary meet the definition of ''business'' under IFRS 3 ''Business Combinations.”

Moreover, where the Consolidated Company sells or contributes assets to an associate/joint venture, or the Consolidated Company loses control of a subsidiary in a transaction with the associate/joint venture, but retains significant influence (or joint control) over the subsidiary, if the foregoing assets or subsidiary do not fall within the definition of "business" in IFRS 3, the Consolidated Company recognizes gains or losses arising from the transaction only to the extent that they are not related to the investor's interest in the associate/joint venture, i.e., the Consolidated Company's share of such gains or losses should be eliminated.

Amendments to IAS 1 “Classification of Liabilities as Current or
Non-current”

The amendments clarify that in determining whether a liability is classified as non-current, an assessment should be made as to whether the Consolidated Company has the right to defer settlement at the end of the reporting period until at least 12 months after the reporting period. If the Consolidated Company has such a right at the end of the reporting period, the liability is classified as non-current, regardless of whether the Consolidated Company expects to exercise the right. The amendments also clarify that if required to comply with certain conditions in order to have the right to defer settlement of its liabilities, the Consolidated Company must have followed the specified conditions as at the end of the reporting period, even if the lender

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tests whether the Consolidated Company has adhered to those conditions at a later date.

The amendments provide that for the purpose of liability classification, the aforementioned settlement means the extinguishment of a liability resulting from the transfer of cash, other economic resources or equity instruments of the Consolidated Company to the counterparty. However, if the terms of a liability may, at the option of the counterparty, result in the settlement of an equity instrument of the Consolidated Company, and if the option is separately recognized in equity in accordance with IAS 32 "Financial Instruments: Presentation," the foregoing terms do not affect the classification of the liability.

Amendments to IAS 1 “Disclosure of Accounting Policies”

The amendments specify that the Consolidated Company shall determine the material accounting policy information to be disclosed based on the definition of material. Accounting policy information is material if it could reasonably be expected to influence the decisions that the primary users of general -purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

(1) accounting policy information relating to immaterial transactions, other events or conditions is immaterial and that the Consolidated Company is not required to disclose such information.
(2) the Consolidated Company may judge relevant accounting policy information to be material because of the nature of the transactions, other events or conditions, even if the sums are not material.
(3) not all accounting policy information relating to significant transactions, other events or conditions is material.
In addition, the amendments cite examples of accounting
policy information that may be material if it relates to significant transactions, other events or conditions and if:
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(1) the Consolidated Company changes its accounting policy during the reporting period and the change results in a material change in financial statement information;
(2) the Consolidated Company selects its applicable accounting policy from the options permitted by the standard;
(3) the Consolidated Company, due to the absence of a specific standard, establishes an accounting policy pursuant to IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors";
(4) the Consolidated Company discloses a relevant accounting policy that requires the application of significant judgement or assumptions; or

(5) involve complex accounting requirements and users of the financial statements rely on such information to understand those significant transactions, other events or conditions.

Amendments to IAS 8 “Definition of Accounting Estimates”

The amendments expressly state that the accounting estimates represent the monetary amounts in the financial statements that are subject to measurement uncertainty. In applying accounting policies, the Consolidated Company may need to measure items in the financial statements using monetary amounts that are not directly observable but must be estimated, and therefore measurement techniques and inputs are used to create accounting estimates for this purpose. The effect of changes in measurement techniques or inputs on accounting estimates that are not corrections of prior period errors are accounted for as changes in accounting estimates.

In addition to the impact described above, the Consolidated Company is continuing to evaluate the impact of amendments to other standards and interpretations on its financial position and financial performance as of the date of adoption and publication of these consolidated financial statements, which will be disclosed when the evaluation is completed.

IV. Summary and explanation of important accounting policies

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(1) Compliance statement

This consolidated financial report is prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS approved by the FSC.

(2) Basis of preparation

Except for the financial instruments evaluated at the fair price, the consolidated financial reports were prepared according to the historical costs.

Fair value measurement can be classified as level 1 to level 3 according to the observable degrees and importance of the relevant input values:

Level 1 input value: It refers to the quoted price at the active market on the same asset or liability available on the measurement day (unadjusted).
Level 2 input value: It refers to the direct (that is the price) or indirect (inferred from the price) observable input values on asset or liability other than the level 1 quoted price.
Level 3 input value: Unobservable input value of asset or liability.
(3) Standard in determining whether the asset or liability are current or
non-current

Current assets include:

Assets held mainly for transaction purposes;
Assets to be realized within 12 months of the asset balance sheet; and
Cash and cash equivalents (but not including cash used to exchange or clear liability within 12 months of the asset balance sheet).

Current liabilities include:

Liabilities held mainly for transaction purposes;
Liabilities due for payment within 12 months after the balance sheet date (a liability with long-term refinancing done or payment agreement rearranged also belongs to the current liabilities); and
The business entity does not have an unconditional right to defer settlement of the liability for at least 12 months after the balance
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sheet date. However, where the terms of the liabilities may, at the option of the counterparty, lead to the settlement by issuing an instrument of equity, the classification will not be affected. Assets or liabilities not classified within the above definitions will be classified as non-current assets and liabilities.

(4) Consolidation basis

The consolidated financial reports include the financial reports of the Company’s and the individual entity (subsidiary company) that is controlled by the Company. The subsidiary company’s financial reports have been adjusted to be consistent with its accounting policies and the accounting policies for the Consolidated Company. When preparing the consolidated financial reports, the transaction, account balance, income and expense among each individual have been eliminated. The total comprehensive income of the subsidiary company is attributing to the owners of the company and non-controlling interests even though the non-controlling interests become balance account of loss. The total comprehensive income of the subsidiary company belongs to the owner of the Company and non-controlling equity, even though it may cause the non-controlling equity to become the balance of total loss.

For details, shareholding ratio, and business items of the subsidiary, please refer to Note 11 and Schedule 4.

(5) Foreign currency

When financial reports are prepared by each company, currency (foreign currency) other than individual functional currencies used for transactions is translated into a functional currency record at the exchange rate on the trading day.

Foreign currency monetary items are translated at the closing rate on each balance sheet date. The exchange difference arising from the delivery of monetary items or the conversion of monetary items should be recognized in profit or loss in the current year.

The foreign currency non-monetary items measured at fair value are translated at the exchange rate of the day on which the fair value is determined. The resulting exchange differences are recognized in profit or loss of the year. However, when the change in fair value is

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recognized in other comprehensive income, the exchange differences arising therefrom should be recognized in other comprehensive income.

Foreign currency non-monetary items as measured at historical cost are translated at the exchange rate of the trading day and are not retranslated.

In preparing the consolidated financial statements, the assets and liabilities of foreign operators (including subsidiaries that operate in countries or currencies different from those of the Company) are translated into New Taiwan dollars at the exchange rate at each balance sheet date. Income and expense items are translated at average exchange rates for the period, with the resulting exchange differences included in other comprehensive income and attributed to the Company's owners and non-controlling interests, respectively.

(6) Inventory

Inventory includes raw materials, supplies, work in process, finished goods and merchandise inventory and is to be assessed by the cost and market value, except for inventory of same kind, the separate items shall be listed individually. The calculation of market value is the sales price minus the cost and the cost of inventory is calculated by weighted average method.

(7) Property, plant and equipment

Property, plant, and equipment are recognized by cost, and then measured by cost less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment under construction are recognized at cost less accumulated impairment losses. Cost includes fees for professional services and borrowing costs eligible for capitalization. These assets are classified into the appropriate categories of property, plant and equipment and depreciation commences when they are completed and in their intended state of use.

The property, plant, and equipment are depreciated separately for each major part by the straight-line basis method over the life of service. The Consolidated Company reviews the estimated useful lives,

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residual values and depreciation methods at least at each year-end and defers the effect of changes in applicable accounting estimates.

The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss when property, plant, and equipment are derecognized.

(8) Intangible assets
Acquired separately

Intangible assets with limited duration acquired separately were initially measured at cost and subsequently at cost less accumulated amortization and accumulated impairment losses. Intangible assets are amortized over their useful lives on a straight-line basis and the estimated useful lives, residual values and amortization method are reviewed at least at each year-end and the effect of changes in applicable accounting estimates is deferred. Intangible assets with indefinite useful lives are stated at cost less accumulated impairment losses.

Derecognition

The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss of the year when intangible assets are derecognized.

(9) Impairment of property, plant and equipment, right-of-use assets and intangible assets

The Consolidated Company assesses at each balance sheet date whether there is any indication that property, plant and equipment, right-of-use assets and intangible assets may have been impaired. If any sign of impairment exists, the recoverable amount of the asset is estimated. If it is impossible to estimate the recoverable amount of an individual asset, the Consolidated Company estimates the recoverable amount of the asset at the cash generating unit. Corporate assets are allocated to the smallest groups of cash-generating unit on a reasonable and consistent basis.

Intangible assets with indefinite useful lives and not yet available for use are tested for impairment at least annually and whenever there is an indication of impairment.

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When the following recoverable amount increases, the carrying amount of the asset or cash generating unit increases to the amount that can be recovered after the revision. However, the increased carrying amount shall not exceed that (minus amortization or depreciation) determined by the asset or cash generating unit where the impairment loss was not recognized in the previous year. The reversal of impairment loss is recognized in profit or loss.

(10) Financial instruments

Financial assets and financial liabilities are recognized in the Consolidated Statement of Financial Position when the Consolidated Company becomes a party to the contractual provisions of the instrument.

1. Financial assets

The transaction practice of the financial assets adopts accounting recognition and de-recognition on the transaction day. (1) Measurement types

The types of financial assets held by the Consolidated Company are equity instruments measured at fair value through other comprehensive income and financial assets measured at amortized cost.

A. Financial assets measured at amortized cost
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The Consolidated Company's investments in financial assets are classified as financial assets carried at amortized cost if both of the following conditions are met:

a. they are held within an operating model whose objective is to hold the financial assets to collect the contractual cash flows; and
b. the contractual terms give rise to cash flows at a specific date, which are solely payments of principal and interest on the principal amount outstanding.

Interest income is calculated by multiplying the effective interest rate by the total carrying amount of the financial assets, except in the following two cases:

a. Interest income on credit-impaired financial assets acquired or created is calculated by multiplying the credit-adjusted effective interest rate by the amortized cost of the financial assets.
b. Interest income is calculated by multiplying the effective interest rate by the amortized cost of the financial asset for financial assets that are not acquired or originated as credit-impaired but subsequently become credit-impaired.
Credit-impaired financial assets are those for which
the issuer or the debtor has experienced significant financial difficulty, default, a probability that the debtor may declare bankruptcy or other financial reorganization,
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or the disappearance of an active market for the financial asset as a result of financial difficulty.

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B. Investments in equity instruments measured at fair value through other comprehensive income

At initial recognition, the Consolidated Company has an irrevocable option to designate investments in equity instruments that are not held for trading and for which there is contingent consideration recognized by the acquirer of the business combination to be measured at fair value through other comprehensive income.

Dividends on investments in equity instruments measured at fair value through other comprehensive income are recognized in profit or loss when the right to receive payments from the Consolidated Company is established, unless it is clear that the dividend represents a partial recovery of the cost of the investment.

(2) The impairment of financial assets

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

Accounts receivable are recognized as an allowance for loss based on expected credit losses during the period of duration. Other financial assets are first evaluated to

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determine whether there is a significant increase in credit risk since initial recognition. If not, they are recognized as an allowance for loss based on expected credit losses over 12 months, and if so, based on expected credit losses over the duration period.

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For internal credit risk management purposes, the Company determines, without regard to the collateral held, that a default on a financial asset has occurred if:

A. there is internal or external information indicating that the debtor is unlikely to meet its obligations.
B. it is more than a certain number of days past due, unless there is reasonable and supportable information indicating that a deferred default basis is more appropriate.

All impairment losses on financial assets are reversed through an allowance account and do not reduce the carrying amount of the financial assets.

(3) Derecognition of financial assets

When financial assets are derecognized in their entirety at amortized cost, the difference between the carrying amount and the consideration received is recognized in profit or loss.

When investments in equity instruments measured at fair value through other comprehensive income are derecognized as a whole, the cumulative gain or loss is transferred directly to retained earnings and is not reclassified to profit or loss.

Financial liabilities
(1) Subsequent measurement

All of the financial liabilities should be measured at the amortized costs through effective interest rate.

(2) Derecognition of financial liabilities
When derecognizing the financial liabilities, the
difference between its book value amount and the consideration (including any non-cash asset transferred or the liability borne) paid will be recognized as income.
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(11) Income recognition

The Consolidated Company allocates the transaction price to each performance obligation after the performance obligation is id entified in the customer contract and recognizes revenue when each performance obligation is satisfied.

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Merchandise sales revenue

Merchandise sales revenue is derived from the sale of sanitary ware products such as porcelain toilets and water faucets. The Consolidated Company recognizes revenue and accounts receivable at the shipping point because the customer has the right to set the price and use the products and has the primary responsibility for re-selling the products and bears the risk of obsolescence of the products from that point onwards.

(12) Lease

The Consolidated Company assesses whether a contract is (or contains) a lease at the contract inception date.

Consolidated Company as lessor

If the lease clauses transfer nearly all risks and Compensation associated with the assets to the lessee, the lease shall be classified as finance lease. All other leases shall be classified as business lease.

Consolidated Company as lessee

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with adjustments for remeasurement of the lease liability. Right-of-use assets are presented separately on individual balance sheets.

Right-of-use assets are depreciated on a straight-line basis from the commencement date of the lease to the earlier of the end of the useful life or the end of the lease term.

Lease obligations are measured initially at the present value of the lease payments (comprising fixed payments, effective fixed payments, variable lease payments dependent on indices or rates, amounts expected to be paid by the lessee under residual guarantees, exercise prices of purchase options where there is reasonable assurance that they will be exercised, and lease termination penalties reflected in the term of the lease, less lease incentives received). If the implied interest rate of the lease is readily determinable, the lease payments are discounted using that rate. If the rate is not readily determinable, the lessee's incremental borrowing rate is used.

Subsequently, lease liabilities are measured on an amortized cost basis using the effective interest method and interest expense is amortized over the lease term. If there is a change in the lease term, future lease payments as a result of variations in the expected payments under the residual guarantee, the evaluation of the purchase option on the subject asset, or changes in the index or rate used to determine lease payments, the Consolidated Company remeasures the lease liability and adjusts the right-of-use asset accordingly, except that if the carrying amount of the right -of-use asset is reduced to zero, the remaining remeasurement amount is recognized in profit or loss. Lease liabilities are presented separately on the Consolidated Statement of Financial Position.

Rentals under leases that do not depend on changes in indices or rates are recognized as an expense in the period in which they are incurred.

(13) Income tax

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

Current income tax

The adjustment of income tax payable in the previous year shall be included in the current income tax.

Deferred income tax

Deferred income tax is calculated based on the temporary differences between the carrying amount of assets and liabilities on the books and the basis for the calculation of taxable income.

Deferred tax liabilities are generally recognized for all temporary differences in taxable income, while deferred income tax assets are recognized when there is a high likelihood that the taxable income will be used as a tax deduction for deductible temporary differences.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Consolidated Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognized for deductible temporary differences associated with such investments only to the extent that it is probable that sufficient taxable income will be available to allow the temporary differences to be realized and to the extent that reversal is expected in the foreseeable future.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced for those where it is no longer probable that there will be sufficient taxable income to allow all or part of the assets to be recovered. Deferred income tax assets not previously recognized as such are also reviewed at each balance sheet date and the carrying amount is increased for

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those where it is probable that taxable income will be available to recover all or part of the assets.

Deferred income tax assets and liabilities are measured by the tax rate of the expected liabilities settlement or assets realization in the current period, according to the tax rate and the tax law which have been legalized or substantively legalized on the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences of the way in which the Consolidated Company is expected to recover or pay off the carrying amount of its assets and liabilities on the balance sheet date.

3. Current and deferred tax

V. Primary sources of uncertainty in major accounting judgments, estimates, and assumptions

When the Consolidated Company adopts an accounting policy, management must make relevant judgments, estimates, and assumptions of relevant information that is difficult to obtain from other sources based on historical experience and other relevant factors.

The Consolidated Company has included the economic impact of the COVID-19 outbreak in the consideration of significant accounting estimates and management will review the estimates and underlying assumptions on an ongoing basis. If an amendment to an estimate affects only the current period, the amendment is recognized in the period in which it is made. If an amendment to an accounting estimate affects both the current and future periods, the amendment is recognized in both the current and future periods.

VI. Cash and cash equivalents

==> picture [425 x 26] intentionally omitted <==

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Checks and fixed deposit Cash equivalents Time deposits with original maturity within three months	145,480 17,513 $ 164,816	188,512 48,179 $ 238,566

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VII. Financial assets measured at fair value through other comprehensive

income - non-current

income-non-current
Investments in equity instruments measured at fair value through other comprehensive income Stock of unlisted companies Amsalp Biomedical Corporation	Dec. 31,2020 $ 262	Dec. 31,2019
			$ -

The Consolidated Company invests in the above-mentioned subjects for medium- and long-term strategic purposes and expects to make profits from the long-term investments. The management of the Consolidated Company considers that it would be inconsistent with the aforementioned long-term investment plan to include short-term fair value fluctuations of these investments in profit or loss, and therefore chooses to designate these investments as measured at fair value through other comprehensive income.

The Consolidated Company's investments in equity instruments measured at fair value through other comprehensive income are not pledged.

VIII. Financial assets measured at amortized cost

Current Time deposits with original maturity over three months Notes and accounts receivable Notes receivable Generated from operating activities Accounts receivable Non-related parties Minus: allowance for loss Related parties	Dec. 31,2020 $ 56,199 Dec. 31,2020 $ 13,804 $ 231,415 ( 4,431) $ 226,984 $ 4,201	Dec. 31,2019	Dec. 31,2019
		$ 46,888 Dec. 31,2019
	(	(	$ 14,519 $ 228,834 2,028) $ 226,806 $ 3,419

IX. Notes and accounts receivable

The average credit period for the Consolidated Company's merchandise sales ranges from 30 to 90 days, and no interest is charged

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on accounts receivable. To mitigate credit risk, the management of the Consolidated Company assigns a dedicated team to ensure that appropriate actions are taken to collect overdue receivables. In addition, the Consolidated Company reviews the recoverable amounts of receivables on a case-by-case basis at the balance sheet date to ensure that appropriate impairment losses are recorded for uncollectible receivables. Accordingly, the Consolidated Company's management believes that the Consolidated Company's credit risk has been significantly reduced.

The Consolidated Company uses the simplified approach of IFRS 9 to recognize an allowance for losses on accounts receivable based on lifetime expected credit losses. The lifetime expected credit losses are calculated using an provision matrix, which takes into account the customer's past default history and current financial position, the economic situation of the industry, as well as the GDP forecast and industry outlook, and classifies customers into different risk groups and recognizes an allowance for losses based on the expected loss rate of each group.

If there is evidence that the counter-party is in serious financial difficulty and the Consolidated Company cannot reasonably expect to recover the amount, such as when the counter-party is in liquidation, the Consolidated Company will directly write off the related accounts receivable, but will continue to conduct recourse actions and recognize the amount recovered in profit or loss as a result of the recourse.

The Consolidated Company's allowance for losses on accounts receivable based on the provision matrix is summarized as follows: Dec. 31, 2020

Dec. 31, 2020
Total carrying amount Allowance for loss (Expected credit loss in the duration) Amortized cost	Within normal credit period $ 228,043 ( 1,986) $ 226,057		Overdue 1-180 days $ 6,101 1,159) $ 4,942	Overdue Over 180 days $ 1,472 ( 1,286) $ 186		Total
	(	(		(	(	$ 235,616 4,431) $ 231,185

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Dec. 31, 2019

Dec. 31, 2019
Total carrying amount Allowance for loss (Expected credit loss in the duration) Amortized cost	Within normal credit period $ 227,608 ( 1,308) $ 226,300	O 1	v e r d u e -1 8 0 d a y s	O v e r d u e Over 180 days $ 406 ( 326) $ 80		Total
	(	(	$ 4,239 394) $ 3,845		(	$ 232,253 2,028) $ 230,225

Information on the changes in allowance for losses on notes receivable, accounts receivable and overdue receivables is as follows:

Beginning balance Plus: Impairment losses recognized in the period Minus: Reversal of impairment losses in the current period Differences from translation of foreign currencies Ending balance			2020
	notes receivable $ - - - - $ -		accounts receivable $ 2,028 2,429 - 26) $ 4,431	overdue receivables
		(		$ 1,445 - ( 100 ) ( 21) $ 1,324

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Beginning balance Plus: listed impairment losses in the period Differences from translation of foreign currencies Ending balance			2019
	notes receivable $ - - - $ -		accounts receivable $ 516 1,521 9) $ 2,028		overdue receivables
		(			$ 1,112 339 ( 6) $ 1,445

The Consolidated Company's notes receivable, accounts receivable and overdue receivables are not pledged.

X. Inventory

Inventory
Raw materials Work in progress Finished goods Merchandise inventory	Dec. 31,2020 $ 146,386 52,044 256,052 197,669 $ 652,151	Dec. 31,2019
			$ 118,754 28,558 188,714 176,523 $ 512,549

The allowance for loss for market price decline and obsolete inventory was $36,660 thousand and $35,658 thousand as of December 31, 2020 and 2019, respectively.

Cost of sales related to inventory for fiscal 2020 and 2019 are as follows:

follows:
Loss for market price decline and obsolete and slow-moving inventory (gain from price recovery) Inventory short (over) Loss on inventory obsolescence Income from the sale of leftover materials	2020 $ 2,427 ( 873 ) 470 ( 11) $ 2,013	2019
		( $ 1,085 ) 3,489 8,352 ( 115) $ 10,641

Please refer to Note 27 for the amount of inventory set by the Consolidated Company as collateral for the loan facility.

The increase in the net realizable value of the Consolidated Company's inventory in fiscal 2019 was due to the increase in the selling price of inventory.

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XI. Subsidiaries

(1) Subsidiaries included in the consolidated financial statements

The principal structure of the preparation of the Consolidated Financial Statements is as follows:

Name of the Investment Company Sanitar Co., Ltd. Sanitar Co., Ltd.	Name ofSubsidiary Vietnam Caesar Sanitary Wares Joint Stock Company Kai Sheng Sanitary Ware Co., Ltd.	Nature of Business Manufacturing and sale Manufacturing and sale	Shareholding percentage	Shareholding percentage
			2020 Dec. 31 99.9993% 51%	2019 Dec. 31
				99.9993% -

On November 4, 2020, the Board of Directors resolved to establish Kai Sheng Sanitary Ware Co., Ltd. as a distribution base in Taoyuan through investment by the Sanitar Co., Ltd. of the Consolidated Company. The total capital is $50,000 thousand, divided into 5,000,000 shares at NT$10 per share, and authorized to be issued by the Board of Directors in several installments. Sanitar Co., Ltd. invested $13,260 thousand and holds 51% of the shares, while the remaining 49% o f the shares are held by non-affiliated parties. After considering the voting rights held by other shareholders, the Consolidated Company was considered to have the actual ability to direct the relevant activities of Kai Sheng Sanitary Ware Co., Ltd. Since Kai Sheng Sanitary Ware Co., Ltd. was established in December 2020 and has no significant operating activities, Kai Sheng Sanitary Ware Co., Ltd.'s own financial statements were adopted for the preparation of the Consolidated Financial Statements.

(2) Subsidiaries not included in the consolidated financial statements: None.

XII. Property, plant and equipment

Cost Balance on Jan. 1, 2020 Increment Disposal Recategorized Net exchange differences Balance on Dec. 31, 2020 Accumulated depreciation Balance on Jan. 1, 2020	S	elf-owned land		Buildings		Machinery equipment	Transportation equipment	Transportation equipment		Other equipment	Leasehold improvements	Leasehold improvements	C	onstruction-in- progress		Total
		$ 243,280 - - - - $ 243,280 $ -	(	$ 797,729 6,063 - 2,344 35,920) $ 770,216 $ 147,188	(	$ 491,947 8,594 - 767 32,567) $ 468,741 $ 261,715	( (	$ 59,416 9,679 1,073 ) - 2,108) $ 65,914 $ 32,052	( (	$ 23,573 52 266 ) - 947) $ 22,412 $ 10,844	( (	$ 15,303 7,046 380 ) 10,572 53) $ 32,488 $ 3,953	( (	$ 13,780 7,050 - 13,116 ) 124) $ 7,590 $ -	( (	$ 1,645,028 38,484 1,719 ) 567 71,719) $ 1,610,641 $ 455,752

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Depreciation expense Disposal Net exchange differences Balance on Dec. 31, 2020 Net on Dec. 31, 2020 Cost Balance on Jan. 1, 2019 Increment Disposal Recategorized Net exchange differences Balance on Dec. 31, 2019	- - - ( $ - $ 243,280 $ 243,280 - - ( - - ( $ 243,280	31,731 - 8,556) ( $ 170,363 $ 599,853 $ 515,618 9,555 163 ) ( 284,076 11,357) ( $ 797,729	39,563 - ( 18,731) ( $ 282,547 $ 186,194 $ 432,975 8,149 1,069 ) ( 61,012 9,120) ( $ 491,947	7,222 844 ) ( 958) ( $ 37,472 $ 28,442 $ 49,217 7,091 3,228 ) ( 6,911 575) ( $ 59,416	3,072 238 ) ( 506) ( $ 13,172 $ 9,240 $ 12,519 5,487 327 ) 6,188 294) $ 23,573	6,798 380 ) 5) $ 10,366 $ 22,122 $ 14,003 1,300 - - ( - $ 15,303	- - ( - ( $ - $ 7,590 $ 161,424 132,773 - ( 281,389 ) 972 ( $ 13,780	88,386 1,462 ) 28,756) $ 513,920 $ 1,096,721 $ 1,429,036 164,355 4,787 ) 76,798 20,374) $ 1,645,028

(Continued on the next page)

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(Continued from the previous page)

Accumulated depreciation Balance on Jan. 1, 2019 Depreciation expense Disposal Net exchange differences Balance on Dec. 31, 2019 Net on Dec. 31, 2019	S	elf-owned land		Buildings		Machinery equipment	Transportation equipment	Transportation equipment		Other equipment	Leasehold improvements	Leasehold improvements	C	onstruction-in- progress		Total
		$ - - - - $ - $ 243,280	( (	$ 128,090 21,410 163 ) 2,149) $ 147,188 $ 650,541	( (	$ 230,676 36,957 1,069 ) 4,849) $ 261,715 $ 230,232	( (	$ 28,930 6,447 3,093 ) 232) $ 32,052 $ 27,364	( (	$ 8,315 2,987 327 ) 131) $ 10,844 $ 12,729		$ 984 2,969 - - $ 3,953 $ 11,350		$ - - - - $ - $ 13,780	( (	$ 396,995 70,770 4,652 ) 7,361) $ 455,752 $ 1,189,276

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

Depreciation expense is calculated through straight-line basis according to the following years:

to the following years:
Buildings
Main office building	50-55 years
Factory building	50 years
Distribution center	35 years
Others	2-50 years
Machinery equipment	1-25 years
Transportation equipment	4-25 years
Other equipment	1-10 years
Leasehold improvements	5 years

Please refer to Note 27 for the amount of property, plant and equipment pledged as collateral for the loan amount.

The total future lease payments to be received under operating leases are as follows

are as follows
The 1st year The 2nd year The 3rd year	2020 $ 530 530 530	2019
		$ 530 530 530

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	The 4th year	The 4th year				530			530
	The 5th year					530			530
	Over 5 years					6,890			7,420
					$	9,540		$	10,070
XIII.	Lease agreement
	(1)
					Lands	Buildings			Total
		Cost
		Balance on Jan. 1, 2020		$	119,583	$	55,391	$	174,974
		Increment			-		25,746		25,746
		Disposal			-	(	16,612 )	(	16,612 )
		Net exchange differences	(		7,825)	(	938)	(	8,763)
		Balance on Dec. 31, 2020		$	111,758	$	63,587	$	175,345
		Accumulated depreciation
		Balance on Jan. 1, 2020		$	16,046	$	12,303	$	28,349
		Depreciation expense			3,124		16,279		19,403
		Disposal			-	(	7,101 )	(	7,101 )
		Net exchange differences	(		1,178)	(	435)	(	1,613)
		Balance on Dec. 31, 2020		$	17,992	$	21,046	$	39,038
		Net on Dec. 31, 2020		$	93,766	$	42,541	$	136,307
		Cost
		Balance on Jan. 1, 2019		$	-	$	-	$	-
		Effect of the first-time
		application of IFRS 16			121,693		32,494		154,187
		Increment			-		23,222		23,222
		Disposal			-	(	75 )	(	75 )
		Net exchange differences	(		2,110)	(	250)	(	2,360)
		Balance on Dec. 31, 2019		$	119,583	$	55,391	$	174,974
		Accumulated depreciation
		Balance on Jan. 1, 2019		$	-	$	-	$	-
		Effect of the first-time
		application of IFRS 16			13,066		-		13,066
		Depreciation expense			3,284		12,525		15,809
		Disposal			-	(	75 )	(	75 )
		Net exchange differences	(		304)	(	147)	(	451)
		Balance on Dec. 31, 2019		$	16,046	$	12,303	$	28,349
		Net on Dec. 31, 2019		$	103,537	$	43,088	$	146,625

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(2) Lease liabilities

			Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2019
Carrying	amount	of	lease
liabilities
Current			$ 12,919	$	14,915
Non-current			$ 62,402	$	63,316
Discount rate		ranges of lease liabilities are as follows:
			2020		2019
Lands			8.37%		8.37%
Buildings			1.66%~8.37%	1.79%~8.37%

(3) Other leasing information

Other leasing information
Lease expenses of low-value assets Changed lease payment expenses not considered in the measurement of lease liabilities Total cash outflow from lease		2020 $ 706 $ 508 $ 17,339)		2019
	(		(	$ 1,804 $ 164 $ 18,486)

The Consolidated Company has elected to apply the exemption from recognition to leases of Office equipment that qualify as short-term leases and leases of Office equipment that qualify as low-value asset leases and not to recognize the related right-of-use assets and lease liabilities for these leases.

XIV. Intangible assets

Intangible assets
Cost Balance on Jan. 1, 2020 Acquired separately Disposal Net exchange differences Balance on Dec. 31, 2020 Accumulated amortization Balance on Jan. 1, 2020 Amortization expense Disposal Net exchange differences Balance on Dec. 31, 2020	T r a d e m a r k r i g h t s $ 8,572 - ( 8,572 ) - $ - $ 8,572 - ( 8,572 ) - $ -	C o s t o f c o m p u t e r s o f t w a r e $ 14,239 1,197 ( 2,200 ) ( 769) $ 12,467 $ 7,605 2,004 ( 2,200 ) ( 416) $ 6,993	T o t a l
			$ 22,811 1,197 ( 10,772 ) ( 769) $ 12,467 $ 16,177 2,004 ( 10,772 ) ( 416) $ 6,993

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Net on Dec. 31, 2020 $

$ 5,474 $ 5,474

(Continued on the next page)

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(Continued from the previous page)

Cost Balance on Jan. 1, 2019 Acquired separately Disposal Net exchange differences Balance on Dec. 31, 2019 Accumulated amortization Balance on Jan. 1, 2019 Amortization expense Disposal Net exchange differences Balance on Dec. 31, 2019 Net on Dec. 31, 2019	T r a d e m a r k r i g h t s $ 8,572 - - - $ 8,572 $ 8,572 - - - $ 8,572 $ -	C o s t o f c o m p u t e r s o f t w a r e $ 9,852 5,431 ( 810 ) ( 234) $ 14,239 $ 6,831 1,681 ( 810 ) ( 97) $ 7,605 $ 6,634	T o t a l
			$ 18,424 5,431 ( 810 ) ( 234) $ 22,811 $ 15,403 1,681 ( 810 ) ( 97) $ 16,177 $ 6,634

Amortization expenses were calculated and recognized using straight line basis with the following service lives:

Trademark rights 20 years Computer software 1-8 years

XV. Other assets

Other assets
Current Input tax Others Non-current Long-term prepaid expenses Overdue receivables Minus: Allowance for bad debts	Dec. 31,2020 $ 11,922 588 $ 12,510 $ 20,192 1,324 ( 1,324) $ 20,192	Dec. 31,2019
	(	(	$ 6,641 402 $ 7,043 $ 15,026 1,445 1,445) $ 15,026

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XVI. Short-term loans

Short-term loans
Secured loan(Note XXVII) Bank borrowings	Dec. 31,2020 $ 344,442	Dec. 31,2019
			$ 346,140

The interest rates on revolving bank loans ranged from 0.85% to 1.25% and 1.07% to 3.10% in 2020 and Dec. 31, 2019, respectively. XVII. Accounts payable

Accounts payable
Accounts payable Generated from operating activities	Dec. 31,2020 $ 70,200	Dec. 31,2019
			$ 91,510

XVIII. Other payables

Other payables
Salaries and bonuses payable Employee bonuses payable Compensation of directors and supervisors payable Gas bills payable Freight charges payable Advertising expenses payable Other	Dec. 31,2020 $ 54,587 8,749 5,833 5,388 3,565 3,092 26,076 $ 107,290	Dec. 31,2019
			$ 52,337 7,303 4,869 7,775 4,277 3,528 33,362 $ 113,451

XIX. Equity

(1) Share capital

Share capital
Rated number of shares (1,000 shares) Rated share capital Paid-in shares (1,000 shares) Issued shares	Dec. 31,2020 100,000 $ 1,000,000 72,600 $ 726,000	Dec. 31,2019
			100,000 $ 1,000,000 72,600 $ 726,000

The issued common stock has a par value of $10 per share and each share is entitled to one vote and the right to receive dividends.

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(2) Additional paid-in capital

Additional paid-in capital
	Dec. 31,2020	Dec. 31,2019
Can be used to make up losses,
to issue cash dividends or to
add into share capital(Note)
Share premium	$ 254,700	$ 254,700
Premium on capital stock due
to merger	9,481	9,481
Cannot be used for any purpose
Cost of employee stock options	13,271	13,271
	$ 277,452	$ 277,452
Note: Such additional paid-in capital may be used to cover losses
or, when the company is not losing money, to make cash payments
or to capitalize share capital, provided that the capitalization is
limited to a certain percentage of paid-in share capital each year.

(3) Retained earnings and dividend policies

In accordance with the distribution policy of the Consolidated Company's Articles of Incorporation, if there is any after-tax net income in the annual consolidated financial statements, the accumulated deficit (including the adjustment of the Unappropriated retained earnings Amount) shall first be offset and 10% shall be set aside as legal reserve in accordance with the law. However, the legal reserve shall not be used when the accumulated legal reserve has reached the total paid-in capital of the Consolidated Company. The Board of Directors shall prepare a resolution for the distribution of the remaining earnings, together with the Unappropriated retained earnings (including the adjustment of the Unappropriated retained earnings Amount) at the beginning of the period. The Board of Directors shall prepare a resolution on the appropriation of earnings and submit it to the shareholders for resolution on the distribution of dividends to shareholders.

The dividend policy of the Consolidated Company is based on current and future development plans, consideration of the inves tment environment, capital requirements and domestic and international competition, as well as the interests of shareholders. Dividends may be distributed to shareholders in cash or in stock, with cash dividends not

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less than 10% of the total stock dividends, except when the stock dividends are less than one dollar per share.

The Company of Consolidated Company held its regular shareholders' meetings on May 28, 2020 and June 20, 2019, and resolved to approve the earnings distribution for fiscal 2019 and 2018, respectively, as follows:

respectively, as follows:
Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)		2019 $ 17,985 $ 19,355 $ 123,420 $ 1.71		2018
			(	$ 25,401 $ 4,220) $ 166,980 $ 2.30

The Company proposed the following distribution of earnings for fiscal 2020 at the Board of Directors' meeting on March 9, 2021:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)		2020
		$ 22,009 $ 71,429 $ 144,152 $ 2.00

The distribution of earnings for fiscal 2020 is subject to the resolution of the shareholders' meeting scheduled to be held on May 27, 2021.

(4) Special reserve

Special reserve
Beginning balance	2020 $ 146,675	2019
		$ 150,895

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	Reversal of special reserve					(		4,220 )	4,220 )
	Provision of special reserve
	Allowances for deductions
	in other equity interest
	items			19,355					-
	Ending balance			$ 166,030			$	146,675
(5)	Other equity interest items
	1. Exchange differences	on	translation		of	foreign		financial
	statements
				2020				2019
	Beginning balance		(	$ 166,030 )		(	$	146,675 )
	Exchange difference on
	translation of the
	financial statements of
	foreign operations		(	85,864 )		(		24,194 )
	Relevant income tax of
	the loss on translation
	of the financial
	statements of foreign
	operations			17,173				4,839
	Ending balance		(	$ 234,721)		(	$	166,030)

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Unrealized gains or losses on financial assets measured at fair

value through other comprehensive income

2020 2019 Beginning balance $ - $ - Generated in the period Unrealized gains or losses Equity instrument ( 2,738 ) - - Ending balance ( $ 2,738 ) $

(6) Treasury shares

Treasury shares
Reasons for the retirement of shares Number of shares as of Jan. 1, 2020 Increase in the current period Number of shares as of Dec. 31, 2020	Transfer of shares to employees (1,000 shares)
		- 524 524

Treasury shares held by the Company are not pledged under the Securities and Exchange Act and are not entitled to dividend distribution or voting rights.

(7) Non-controlling interests

Non-controlling interests
Beginning balance Share belonging to non-controlling interests Increase in non-controlling interests because of the establishment of Kai-Sheng (Note XI) Net income (loss) in the period Exchange differences on translation of foreign financial statements Cash dividends of subsidiaries Ending balance	2020 $ 11 12,740 ( 36 ) ( 2 ) ( 1) $ 12,712		2019
			$ 10 - 1 - - $ 11

XX. Income

2020

2019

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Income from customer contracts Porcelain Water use equipment Automated equipment Bathtubs Others	$ 1,124,375 463,194 245,240 62,383 411,329 $ 2,306,521	$ 1,142,763 494,716 210,305 84,606 402,536 $ 2,334,926

Contract balance Accounts receivable Contract liabilities Payment for goods collected in advance	Dec. 31, 2020 $ 231,185 $ 5,412	Dec. 31, 2019	Dec. 31, 2019
			$ 230,225 $ 8,714

2020 and 2019 Income from customer contracts, of which $373,583 thousands and $447,502 thousands were reclassified from contract liabilities, respectively.

XXI. Net income from continuing operations

Net income from continuing operations includes the following items:

(1) Other income and expenses, net

Compensation for losses Net income from the disposal and obsolescence of property, plant and equipment Other	2020 ( $ 966 ) 91 244 ($ 631)	2019
		( $ 147 ) 357 - $ 210

(2) Depreciation and amortization, employee benefit expenses

Employee benefit expenses Salary expenses Premium for the insurance of employees Benefits after retirement Defined contribution plan Other employee benefit expenses Total of employee benefit expenses Depreciation expense			2020			2019	2019
	Belonging to operating costs		Belonging to operating expenses $175,305 15,963 3,732 7,563 $ 202,563	Total	Belonging to operating costs $ 165,934 19,334 1,509 7,841 $ 194,618	Belonging to operating expenses			Total
		$ 191,317 18,968 1,590 9,178 $ 221,053		$ 366,622 34,931 5,322 16,741 $ 423,616			$ 152,820 14,839 2,989 8,531 $ 179,179		$ 318,754 34,173 4,498 16,372 $ 373,797

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Property, plant and equipment Right-of-use assets Amortization expense	$ 56,767 949 $ 57,716 $ 743	$ 31,619 18,454 $ 50,073 $ 1,261	$ 88,386 19,403 $ 107,789 $ 2,004	$ 44,790 1,050 $ 45,840 $ 69	$ 25,980 14,759 $ 40,739 $ 1,612	$ 70,770 15,809
						$ 86,579
						$ 1,681

(3) Compensation to employees and compensation to directors and supervisors

The Consolidated Company contributes 2% to 5% of the pre-tax benefit before compensation to employees and directors and supervisors as compensation to employees and no more than 2% as compensation to directors and supervisors for the year.

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Estimated listing ratio

Compensation of employees Compensation of directors and supervisors	2020 3% 2%	2019 3% 2%

Amount

Amount
Compensation of employees Compensation of directors and supervisors	2020 C a s h $ 8,749 5,833	2019
		C a s h
		$ 7,303 4,869

If there is any change in the annual Consolidated Financial Statements after the date of adoption, the change in accounting estimate will be treated as an adjustment in the following year.

For information on the compensation to employees and compensation to directors and supervisors resolved by the Board o f Directors of the Company, please visit the Market Observation Post System (MOPS) of the Taiwan Stock Exchange.

XXII. Income tax of continuing operations

(1) Major items of income tax expenses recognized in profit or losses :

Main components of income tax expenses recognized in profit or losses:

losses:
Current income tax Generated in the period Surtax on unappropriated retained earnings Adjustments for the prior year		2020 $ 74,029 954 950)		2019
	(			$ 46,378 3,292 11

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74,033 Deferred income tax Generated in the period ( 6,006 ) The tax paid in foreign countries cannot be deducted 1,492 Income tax expense recognized in profit or losses $ 69,519	49,681 14,457 1,553 $ 65,691

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The reconciliations of accounting income and income tax expenses are as follows:

are as follows:
		2020		2019
Net income before tax		$ 289,575		$ 245,543
Income tax expense of the net
income before tax calculated
with statutory tax rate		$ 58,004		$ 49,109
Non-deductible expenses in the
tax	(	2,654 )	(	2,169 )
Surtax on unappropriated
retained earnings		954		3,292
Temporary differences which
were not recognized		12,673		13,895
The tax paid in foreign
countries cannot be deducted		1,492		1,553
Adjustments to the income tax
expenses in the past years in
the current period	(	950)		11
Income tax expense recognized
in profit or losses		$ 69,519		$ 65,691

According to the document 512/CT-TTHT of the Dong Nai Provincial Tax Office of the General Administration of Taxation of the Socialist Republic of Vietnam, the Vietnam Caesar Sanitary Wares Joint Stock Company is subject to a preferential corporate income tax rate of 15% for the initial investment projects with more than 50% of exported products. The tax rate is 15% for the initial investment and 20% for the expanded investors who are not in the area of tax incentives.

(2) Income tax recognized in other comprehensive income

Deferred income tax Generated in the period `－`Translation of the financial statements of foreign operations		2020 $ 17,173		2019
				$ 4,839

(3) Income tax assets and liabilities in the current period

Income tax assets in the current period Current income tax liabilities	Dec. 31,2020 $ - $ 51,373	Dec. 31,2019	Dec. 31,2019
			$ 7,486 $ 16,409

335 -
336 -

(4) Deferred income tax assets and liabilities

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

2020

2020
Deferred income tax assets Temporary differences Allowance for bad debts Unrealized loss for market price decline and obsolete and slow-moving inventory Exchange difference on translation of the financial statements of foreign operations Amortization of prepaid rent Unrealized foreign exchange losses Others Deferred income tax liabilities Temporary differences Investment income recognized using equity method (foreign investment) Unrealized foreign exchange gains 2019 Deferred income tax assets Temporary differences Allowance for bad debts Unrealized loss for market price	Beginning balance $ 679 3,494 41,508 282 30 342 $ 46,335 $176,544 22 $176,566 Beginning balance $ 749 3,721	Recognized in profit or losses $ 380 485 - ( 275 ) ( 30 ) ( 333) $ 227 ( $ 5,825 ) 46 ($ 5,779) Recognized in profit or losses ( $ 64 ) ( 213 )	Recognized in other comprehensive income $ - - 17,173 - - - $ 17,173 $ - - $ - Recognized in other comprehensive income $ - -		Exchange difference $ 28 ) 45 ) - 7 ) - 9) $ 89) $ - 1) $ 1) Exchange difference $ 6 ) 14 )	Ending balance
				( ( ( ( ( ( (		$ 1,031 3,934 58,681 - - - $ 63,646 $170,719 67 $170,786 Ending balance
				( (		$ 679 3,494

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decline and obsolete and slow-moving inventory Exchange difference on translation of the financial statements of foreign operations Amortization of prepaid rent Unrealized foreign exchange losses Others Deferred income tax liabilities Temporary differences Investment income recognized using equity method (foreign investment) Unrealized foreign exchange gains	36,669 470 ( - - $ 41,609 ( $162,166 23 ( $162,189	- 183 ) 30 350 $ 80) $ 14,378 1) $ 14,377	4,839 - ( - - ( $ 4,839 ( $ - - $ -	- 5 ) - 8) $ 33) $ - - $ -	41,508 282 30 342 $ 46,335 $176,544 22 $176,566

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(5) Deductible temporary differences of deferred income tax assets which were not recognized in the statement of financial position

Deductible temporary differences	Dec. 31,2020 $ 4,299	Dec. 31,2019	Dec. 31,2019
			$ 4,762

(6) Income tax assessment

The income tax returns of the Company have been assessed and approved by the tax authorities through fiscal 2018.

XXIII. Earnings per share

(1) Basic earnings per share

The earnings and weighted-average number of common stocks

used to calculate basic earnings per share were as follows:

Net income attributable to the owners of the company Weighted average number of common shares used in the calculation of basic earnings per share (1,000 shares) Basic earnings per share (NT$)		2020 $ 220,092 72,290 $ 3.04		2019
				$ 179,851 72,600 $ 2.48

(2) Diluted earnings per share

The earnings and weighted-average number of common stocks

used to calculate diluted earnings per share were as follows:

Net income attributable to the owners of the company Weighted average number of common shares used in the calculation of basic earnings per share (1,000 shares) Influence of dilutive potential common shares on employee bonuses or Compensation of employees (1,000 shares) Weighted average number of common shares used in the calculation of diluted earnings per share (1,000 shares) Diluted earnings per share (NT$)		2020 $220,092 72,290 376 72,666 $ 3.03		2019
				$ 179,851 72,600 352 72,952 $ 2.47

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If the Consolidated Company has the option of paying employees in stock or cash, it is assumed that employee compensation will be paid in stock and is included in the weighted-average number of shares outstanding for the purpose of calculating diluted earnings per share when the potential ordinary share has a dilutive effect. The dilutive effect of these potential ordinary shares shall also continue to be considered in the calculation of diluted earnings per share before the following year's resolution on the number of employee compensation shares to be distributed.

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IIIV. Capital risk management

The Consolidated Company is currently in a stable operating phase and the objective of capital risk management is to ensure that it is able to maximize shareholder returns by optimizing debt and equity balances while continuing to operate and grow.

The Consolidated Company adopts a prudent risk management strategy and conducts regular reviews to determine the most appropriate capital structure for itself based on its business development strategy and overall planning of operational needs.

XXV. Financial instrument

(1) Fair value information
Financial instruments not measured at fair value

The Consolidated Company considered that the carrying amounts of financial assets and liabilities which were not measured at fair value were close to their fair values.

Financial instruments measured at fair value
(1) Fair value levels

December 31, 2020

Level 1 Level 2 Level 3 Total Non-current financial assets measured at fair value through other comprehensive income Investments in equity instruments － Stocks of domestic companies which are not listed or traded over the counter $ - $ - $ 262 $ 262

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

(2) Valuation techniques and Inputs for level 3 fair value measurements

Category of financial instruments Valuation technique and input value

341 -

Investment in the stocks of	Price-to-book ratio method: The net book
domestic companies	value per share can be calculated
which are not listed or	based on the financial information of
traded over the counter	the Company, and the current value of
	gain or loss from holding an item of
	investment can thus be calculated.

342 -
(2) Types of financial instruments

Types of financial instruments
Financial assets Financial assets measured at amortized cost Cash and cash equivalents Financial assets measured at amortized cost - current Notes receivable, net Net value of accounts receivable Accounts receivable`－` Related parties, net Other receivables Other receivables`－`related parties Financial assets measured at fair value through other comprehensive income Investments in equity instruments Financial liabilities Measured at amortized cost Short-term loans Accounts payable Other payables	Dec. 31,2020 $ 164,816 56,199 13,804 226,984 4,201 2,257 5 262 344,442 70,200 107,290	Dec. 31,2019
		$ 238,566 46,888 14,519 226,806 3,419 2,836 5 - 346,140 91,510 113,451

(3) Purpose and policy of financial risk management

The Consolidated Company is committed to ensuring that the Company has adequate and cost effective working capital for its operations. The Consolidated Company carefully manages market risk (including foreign currency exchange rate risk, interest rate risk and other price risk), credit risk and liquidity risk associated with its operating activities to reduce the potential adverse effects of market uncertainties on the Company's finances.

Market risk management
(1) Exchange rate risk

The Consolidated Company mainly focuses on the domestic market, and all foreign sales and purchase transactions are quoted in foreign currencies. The Consolidated Company adopts the natural hedging method of

343 -

offsetting foreign currency receipts and expenditures, and the net foreign currency portion is relatively small.

Please refer to Note XXIX for the Carrying amount of foreign-currency-denominated monetary assets and monetary liabilities of the Consolidated Company as of the balance sheet date.

The sensitivity analysis of the foreign currency exchange rate risk is based on foreign currency monetary items as of the end of the financial reporting period. If the New Taiwan dollar depreciates/strengthens by 5% against the U.S. dollar, the Consolidated Company's net income before tax would decrease by $4,383 thousands and $3,858 thousands for the years ended December 31, 2020 and 2019, respectively.

(2) Interest rate risk

The Consolidated Company continues to reduce the level of borrowings from financial institutions and the Consolidated Company's management believes that fluctuations in borrowing rates will have little impact on the Consolidated Company.

(3) Other price risk

The price risk of the Consolidated Company’s equity came from the investment of financial assets measured at fair value through other comprehensive income (mainly invested in the stocks of domestic companies which are not listed or traded over the counter).

Sensitivity Analysis

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

If the equity price increases/decreases by 0.5%, other comprehensive income will increase/decrease by $1 thousand from Jan. 1, 2020 to Dec. 31, 2020 due to the change in fair value of financial assets measured at fair value through other gains or losses.

344 -

2. Credit risk

Credit risk represents the risk of financial loss to the Group due to default on contractual obligations by the counter-parties. As of the balance sheet date, the Consolidated Company's maximum exposure to credit risk due to non-performance of counter-parties' obligations is the carrying value of financial assets recognized in the Consolidated Statement of Financial Position. As of the balance sheet date, the Consolidated Company's maximum exposure to credit risk arising from the counter-party's failure to meet its obligations is the carrying value of financial assets recognized in the Consolidated Statement of Financial Position.

To mitigate credit risk and maintain the quality of Accounts receivable, the Consolidated Company has established operating-related credit risk management procedures, and the Consolidated Company also uses certain credit enhancement tools, such as payment for goods collected in advance and the acquisition of security deposits, at appropriate times to reduce customers' credit risk. The Consolidated Company also uses certain credit enhancement tools, such as payment for goods collected in advance and margin acquisition, at appropriate times to reduce customers' credit risk. In addition, the Consolidated Company reviews the recoverable amounts of receivables on a case-by-case basis at the balance sheet date to ensure that appropriate impairment losses have been recorded for uncollectible receivables.

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In 2020 and 2019, except for Company A, the Consolidated Company's concentration of credit risk to other customers does not exceed 10% of the total Accounts receivable, and these companies have a long history and good repayment status, so the Consolidated Company's related credit risk is not significant.

The credit risk is limited because the counter-parties of liquidity are financial institutions with good credit ratings, and therefore no significant credit risk is expected.

Liquidity risk

The Consolidated Company copes with the operation and reduces the influence of cash flow fluctuations through the management and maintenance of sufficient amount of cash and cash equivalents. The management of the Consolidated Company monitors the use of banking facilities and ensures compliance with the terms of borrowing contracts. The Consolidated Company is able to meet its contractual obligations by maintaining appropriate capital and banking facilities. The Consolidated Company's working capital is sufficient to meet its obligations, and therefore there is no liquidity risk that the Consolidated Company will not be able to raise funds to meet its contractual obligations.

The unused funds of the credit agreements from the bank until December 31, 2020 and 2019 respectively are $725,189 thousands and $758,412 thousands.

The following table is based on the earliest possible period for which the Consolidated Company may be required to make repayments and is prepared using undiscounted cash flows of financial liabilities, which include cash flows of interest and principal. The Consolidated Company's working capital is sufficient to meet the demand.

Dec. 31, 2020

Dec. 31, 2020
Non-derivative financial liabilities Short-term loans Accounts payable	Less than 1 year	1-2 years	2-3 years	More than 3 years	Total
	$ 344,442 70,200	$ - -	$ - -	$ - -	$ 344,442 70,200

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Other payables Current income tax liabilities Lease liabilities - current Other current liabilities`－`other Lease liabilities - non-current Dec. 31, 2019	107,290 51,373 12,919 8,404 - Less than 1 year	- - - - 15,641 1-2 years $ - - - - - - 11,618	- - - - 13,377 2-3 years	- - - - 72,117 More than 3 years	107,290 51,373 12,919 8,404 101,135 Total
Non-derivative financial liabilities Short-term loans Accounts payable Other payables Current income tax liabilities Lease liabilities - current Other current liabilities`－`other Lease liabilities - non-current
	$ 346,140 91,510 113,451 16,409 14,915 3,451 -		$ - - - - - - 14,171	$ - - - - - - 88,595	$ 346,140 91,510 113,451 16,409 14,915 3,451 114,384

XXVI. Related party transaction

The transactions, balances in accounts, income and expenses between the Company and the subsidiary (a related party of the Company) were all written off at the time of the merger, so they were not disclosed in the Notes. The transactions between the Consolidated Company and related parties (aside from those revealed in notes) are listed below:

(1) Names of related parties and their relationships

Name of related party Relationship with the Company － Chia-Ta-Hang Co., Ltd. Substantive related party The chairperson of that company was the spouse of a relative of the chairperson of the Company within second degree of kinship

(2) Operating income

Operating income
Accounting item Sales revenue	Type of related party		2020 $ 43,655		2019
	Substantive related party Chia-Ta-Hang Co., Ltd.				$ 36,330

There was no material difference between the terms of transaction for the purchase and sale transactions between the Consolidated Company and related parties and those for other non-related parties.

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(3) Accounts receivable from related parties (excluding loans to related parties)

Type of related Accounting item party/Name Dec. 31, 2020 Dec. 31, 2019 Accounts Substantive related party － receivable Related parties Chia-Ta-Hang Co., $ 4,201 $ 3,419 Ltd.

(4) Other accounts receivable from related parties

Type of related Accounting item party/Name Dec. 31, 2020 Dec. 31, 2019 Other receivables Substantive related party Chia-Ta-Hang Co., $ 5 $ 5 Ltd.

(5) Compensation of key management personnel

Short-term employee benefits Benefits after retirement		2020 $ 24,138 408 $ 24,546		2019
				$ 21,923 399 $ 22,322

The remuneration of directors and other key management personnel is determined by the Compensation Committee based on individual performance and market trends.

XXVII. Pledged assets
(1) The following assets have been provided as collateral to secure loans or lines of credit with banks:

nes of credit with banks:
Property, plant and equipment `－`land Property, plant and equipment `－`buildings	Dec. 31,2020 $ 61,652 35,728 $ 97,380	Dec. 31,2019
			$ 61,652 36,622 $ 98,274

(2) As of Dec. 31, 2020 and 2019, in addition to the collaterals mentioned above, Vietnam Caesar Sanitary Wares Joint Stock Company provided to Bank of Vietnam as collaterals with the Bank's borrowings with a credit guarantee value of US$0 thousand and US$450 thousands,
348 -

respectively, and inventory value of not less than US$1,500 thousand and US$1,050 thousand.

XXVIII. Material contingent liabilities and unrecognized contractual commitments
- In addition to those described in other notes, the Consolidated
- Company had the following significant commitments and contingencies as of the balance sheet date:
(1) As of Dec. 31, 2020, the Consolidated Company's Vietnam Caesar Sanitary Wares Joint Stock Company had entered into contracts with various manufacturers for the purchase of machinery and equipment or construction work and related taxes for a total amount of $39,972,806 thousands, of which $38,674,656 thousands (equivalent to $46,428 thousands) had been paid in VND, which was listed under Prepayments for business facilities and Construction in progress, depending on their nature.
(2) As of Dec. 31, 2020, the Consolidated Company had entered into construction contracts with various manufacturers for a total amount of NT$9,481 thousands, and the price paid was NT$6,636 thousands, which was recognized under Construction in progress.
(3) As of Dec. 31, 2020 and 2019, the Consolidated Company had unused letters of credit amounting to US$0 thousand and US$414 thousands, respectively.
(4) As of Dec. 31, 2020 and 2019, the Consolidated Company's guarantee for the financing loans of Vietnam Caesar Sanitary Wares Joint Stock Company amounted to NT$142,400 thousands (US$5,000 thousands) and NT$194,870 thousands (US$1,870 thousands), respectively. (US$6,500,000).
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XXIX. Foreign-currency-denominated assets and liabilities that have significant influence

The following information is presented in the aggregate in foreign currencies other than the functional currency of each of the consolidated companies, and the exchange rates disclosed represent the rates at which these foreign currencies were translated into the functional currency. Assets and liabilities denominated in foreign currencies that have a significant effect are as follows.

Assets in foreign currencies Monetary items USD RMB Liabilities in foreign currencies Monetary items USD	Dec. 31, 2020 Foreign currency Exchange rate NT$ $ 1,533 28.48 $ 43,672 10 4.37 44 4,611 28.48 131,326	Dec. 31, 2020 Foreign currency Exchange rate NT$ $ 1,533 28.48 $ 43,672 10 4.37 44 4,611 28.48 131,326	Dec. 31, 2019	Dec. 31, 2019	Dec. 31, 2019
	Foreign currency $ 1,533 10 4,611	Exchange rate 28.48 4.37 28.48	Foreign currency $ 1,383 - 3,956	Exchange rate 29.980 - 29.980	NT$
					$ 41,455 - 118,611

XXX. Others

The Consolidated Company was affected by the global pandemic of novel coronavirus pneumonia, but the impact was relatively insignificant because the epidemic was well controlled in Taiwan. As of Dec. 31, 2020, the cumulative consolidated operating revenue decreased by approximately 1.2% compared to the same period last year, indicating that the epidemic did not have a serious impact on the Consolidated Company's operations. Although the recent epidemic in Europe and the United States is on the rise, the Consolidated Company's operating revenue is concentrated in Taiwan and Vietnam, and is not expected to be significantly affected.

The Consolidated Company has maintained normal working capital, salaries, interest, rent and other expenses, and has not applied to the government for relief.

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XXXI. Disclosures

(I) Information on significant transactions and (II) information on investees:
Lending to others: None.
Endorsement for other parties: Schedule 1.
Marketable securities held at the end of the period (excluding investments in subsidiaries, associates and joint ventures): None.
The cumulative amount of securities purchased or sold reaches NT$300 million or 20% of the paid-in capital: None.
Acquisition of real estate amounting to at least NT$300 million or 20% of the paid-in capital: None.
Disposal of real estate amounting to at least NT$300 million or 20% of the paid-in capital: None.
The amount of purchase or sale of goods with related parties reaches NT$100 million or 20% of the paid-in capital: (Schedule 2)
Related party receivables amounting to at least NT$100 million or 20% of the paid-in capital: None.
Engage in derivative transactions: None.
Other: the business relationships among the parent company and subsidiaries and the significant amounts and conditions of transaction: (Schedule 3).
Information of investee companies: (Schedule 4).
(III) Information of investment from Mainland China: None.
(IV) Information of Major Shareholders: The names of shareholders who held more than 5% of the Company’s shares and the number of shares held by them and the ratio to all the outstanding shares: (Schedule 5).

XXXII. Department details

The Consolidated Company is an independent operating segment that provides information to the decision maker for the purpose of allocating resources and evaluating segment performance, with emphasis on each type of product or service delivered or provided. The reportable segments of the Consolidated Company are as follows.

Financial information by region

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The Consolidated Company's business units are divided into two reportable segments: the Taiwan Sanitary Equipment segment and the Vietnam Sanitary Equipment segment, which are mainly engaged in the design, manufacturing and trading of sanitary equipment and copper water supply products, but the two reportable segments are treated separately because they have their own independent strategies.

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The Consolidated Company does not allocate income tax expense (benefit) or extraordinary gain or loss to reportable segments. In addition, not all reportable segments include significant non-cash items other than depreciation and amortization.

The accounting policies of each operating segment are the same as the summary of significant accounting policies described in Note IV. The Consolidated Company's operating profit and loss in the sector is measured on a pre-tax basis (excluding extraordinary gain or loss) and is used as the basis for evaluating performance.

The Consolidated Company considers intersegment sales and transfers as transactions with third parties, which are measured at the current market.

Financial information of the Consolidated Company by region is as follows.

follows.
2020 Revenue Revenue from external customers Revenue from other segments Total revenue Profit and loss in the sector Total assets of the segment Total liabilities of the segment 2019 Revenue Revenue from external customers Revenue from other segments Total revenue Profit and loss in the sector Total assets of the segment Total liabilities of the segment	Segment of Sanitary Wares in Taiwan $ 1,456,489 14,907 $ 1,471,396 $ 276,989 $ 2,320,902 $ 592,162 $ 1,284,658 15,525 $ 1,300,183 $ 231,275 $ 2,346,230 $ 652,984	Segment of Sanitary Wares in Foreign Countries $ 850,032 402,339 $ 1,252,371 $ 75,796 $ 1,517,729 $ 275,743 $ 1,050,268 408,381 $ 1,458,649 $ 83,619 $ 1,562,509 $ 209,797		Adjustment and Write-off $ - 417,246) $ 417,246) $ 63,210) $ 1,289,618) $ 34,419) $ - 423,906) $ 423,906) $ 69,351) $ 1,380,734) $ 28,033)		Total
			( ( ( ( ( ( ( ( ( (			$ 2,306,521 - $ 2,306,521 $ 289,575 $ 2,549,013 $ 833,486 $ 2,334,926 - $ 2,334,926 $ 245,543 $ 2,528,005 $ 834,748

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Sanitar Co., Ltd. and Its Subsidiaries

Endorsement for Other Parties

From Jan. 1 to Dec. 31, 2020

Schedule 1

Unit: NT$ thousands (unless otherwise specified)

No.	Name of the endorser/guarantor	Guaranteedparty	Guaranteedparty	Limits on endorsement/guar antee amount provided to each guaranteed party	Maximum balance for the period	Ending balance	Amount actually drawn	Amount of endorsement/guar antee collateralized by properties	Ratio of accumulated endorsement/gu arantee to net equity per latest financial statements (%)	Maximum endorsement/guar antee amount allowable	Guarantee provided by parent company	Guarantee provided by a subsidiary	Guarantee provided to entities in Mainland China	Remark
		Company Name	Relationships
1	Sanitar Co., Ltd.	Vietnam Caesar Sanitary Wares Joint Stock Company	Investment accounted for using the equity method	$ 340,563	$ 196,625	$ 142,400	$ 59,680	$ -	8.36	$ 681,126	Y	N	N	(Note)

Note: The endorsement/guarantee limit is based on the endorsement/guarantee procedures approved by the shareholders' meeting and stipulated by the Bureau of Securities and Futures of the Financial Supervisory Commission, Executive Yuan on December 18, 2002, by Order no.(91)-Tai-tsai-zhen-(6)-0910161919. The total amount of the Company's endorsement and guarantee shall not exceed 40% of the Company's net worth and the amount of endorsement and guarantee for subsidiaries directly hol ding more than 50% of the common stock shall not exceed 20% of the Company's net worth for the period.

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Sanitar Co., Ltd. and Its Subsidiaries

Marketable Securities Held at the End of Period

Dec. 31, 2020

Schedule 2

Unit: NT$ thousands (unless otherwise specified)

Holding Company	Type and Name of Marketable Securities	Relationship with the issuer of the marketable securities	Financial statement account		End of the period	End of the period	End of the period			Remark
				Number of shares	Carrying amount		Shareholding percentage		Fair value
Sanitar Co., Ltd.	Stock Amsalp Biomedical Corporation	-	Non-current financial assets measured at the fair value through other comprehensive income	154,700		$ 262	18.20%		$ 262	`－`

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Sanitar Co., Ltd. and Its Subsidiaries

The amount of purchase or sale of goods with related parties reaches NT$100 million or 20% of the paid -in capital

From Jan. 1 to Dec. 31, 2020

Schedule 3

Unit: NT$ thousands (unless otherwise specified)

Company name	Transaction counterparty	Relationships		Transaction	Transaction		Situation and reason of why trading conditions are different from general trading	Situation and reason of why trading conditions are different from general trading	Notes/ accounts receivable or payable	Notes/ accounts receivable or payable	Remark
			Purchases (Sales)	Amount	Ratio to total purchases/sales amount(%)	Loan period	Unit Price	Loan period	Balance	Ratio to total amount of notes/accounts receivable or payable (%)
Sanitar Co., Ltd.	Vietnam Caesar Sanitary Wares Joint Stock Company	Investment accounted for using the equity method	Purchase	$ 402,339	39%	Vietnam Caesar Sanitary Wares Joint Stock Company should pay within 30 days after the delivery, but this can be adjusted regarding the demand for funds.	Discussed by both parties in the transaction with reference to the market price and gross profit of products	Vietnam Caesar Sanitary Wares Joint Stock Company should pay within 30 days after the delivery, but this can be adjusted regarding the demand for funds.	Accounts payable $ -	-	Note

Note: Transaction with related parties on the consolidated and parent company only statements were all adjusted and amortized .

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Sanitar Co., Ltd. and Its Subsidiaries

The Business Relationships among the Parent Company and Subsidiaries and the Significant Amounts and Conditions of Transactions

From Jan. 1 to Dec. 31, 2020

Unit: NT$ thousands (unless otherwise specified)


Schedule 4				Unit: NT$ thousands (unless otherwise specified)
No. (Note 1)	Name of the Trader	Name of the transaction counterparty	Relationship with the Trader (Note 2)	Conditions of Transactions
				Accounting Item	Amount	Terms of Transaction	Ratio to the total consolidated operating revenue or the total consolidated assets (Note 3)
0	Sanitar Co., Ltd.	Vietnam Caesar Sanitary Wares Joint Stock Company	1 1 1 1	Other operating revenue Accounts receivable `－` Related parties Other receivables`－`related parties Purchase	$ 14,907 4,172 30,246 402,339	The payment will be collected within 2 months after the end of each quarter. However, this can be adjusted according to the demand for funds. `－` `－` The prices of goods purchased by Sanitar Co., Ltd. from Vietnam Caesar Sanitary Wares Joint Stock Company were discussed by both parties in the transaction with reference to the market price and gross profit of products. The payment shall be made within 30 days after the delivery, and this can be adjusted according to the demand for funds.	- - 1% 17%

Note 1: Information on business transactions between the parent company and subsidiaries should be indicated in the numbered column respectively, and the number should be filled in as follows.

(1) Enter 0 for the parent company.

(2) Subsidiaries are numbered in order by company, starting from the Arabic numeral 1.

Note 2: Relationship with the Trader has the following three types, just label the type.

(1) Parent company to subsidiary company.

(2) Subsidiary to parent company.

(3) Subsidiary to Subsidiary

Note 3: The calculation of the ratio of transaction amount to consolidated total revenue or total assets is calculated as Ending balance to consolidated total assets in the case of assets and liabilities, or as cumulative amount to consolidated total revenue in the case of profit and loss.

Note 4: Significant Conditions of Transactions in this table may be presented at the Company's discretion based on the principle of materiality.

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Sanitar Co., Ltd.

Name, Location, and Other Related Information of Investees

From Jan. 1 to Dec. 31, 2020

Schedule 5

Unit: NT$ thousands (unless otherwise specified)

Name of the Investment Company	Name of the Investee Company	Location	Main businesses	Original investment amount	Original investment amount	Sharesheld as ofthe end ofthe period	Sharesheld as ofthe end ofthe period	Sharesheld as ofthe end ofthe period	Net income (loss) of the investee	Gain (loss) on investment recognized in theperiod	Remark
				End of the period	End of last period	Number of shares (1,000 shares)	Ratio (%) (Note 3)	Carrying amount
Sanitar Co., Ltd. Sanitar Co., Ltd.	Vietnam Caesar Sanitary Wares Joint Stock Company Kai Sheng Sanitary Ware Co., Ltd.	Vietnam Taiwan	Manufacturing and sale of sanitary equipment and water supply equipment Sale of sanitary equipment and water supply equipment	$ 665,303 13,260	$ 665,303 -	41,878 1,326	100 51	$ 1,225,499 13,221	$ 63,253 ( 76 )	$ 58,988 ( 39 )	Note 1, 2 and 3 Note 2

Note 1: The difference between the comprehensive income of Vietnam Caesar Sanitary Wares Joint Stock Company and the gain on investment recognized by Sanitar Co ., Ltd. was the net change of the unrealized gains or losses from upstream sale, which was NT$4,264,000.

Note 2: The gain (loss) on investment on the consolidated and parent company only statements were adjusted and amortized.

Note 3: The ratio of shares held as of the end of the period was 99.9993% 。

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Sanitar Co., Ltd. and Its Subsidiaries

Information of Major Shareholders

Dec. 31, 2020

Schedule 6

Name of Major Shareholder	Shares	Shares
	Number of shares held by the person	Shareholding percentage
XIAO, JUN-XIANG	5,013,581	6.90%

Information of Major Shareholders is calculated based on the last business day of the quarter in which the shareholders hold 5% or more of the Company's common shares and preferred shares that have been delivered without physical registration (including Treasury shares). The number of shares in the consolidated financial statements may differ from the actual number of shares delivered due to different bases of computation.

The above information is revealed by the trustee's opening of a trust account with individual subaccounts of the principal if the shareholder has delivered the shares to the trust. As for the shareholder's shareholding of more than 10% of insider shares reported under the Securities and Exchange Act, the shareholding includes the shareholding of the shareholder himself/herself plus the shareholding of the shareholder delivered to the trust and has the right to decide the use of the trust property, etc. Please refer to the Market Observation Post System for the information on insider shareholding reporting.

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360 -
361 -

5. Parent company only financial statements audited by CPAs for the most recent

year

Please post the accountant's personal financial report (pages 151 to 220)

Total 70 pages

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(6) If the Company and its associates have experienced financial difficulties in the most recent year and by the print date of the annual report, the impact on the financial position of the Company shall be specified

The Company and its affiliates have not experienced any financial difficulties in the most recent year or as of the date of the annual report.

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VII. Review of Financial Conditions, Financial Performance, and Risk Management

1. Financial Conditions

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

Unit: NT$ thousands

			Unit:	NT$ thousands
Annual Project	2019	2020	Amount of increase (decrease)	Change ratio (%)
Current assets	1,075,425	1,173,183	97,758	9.09
Property, plant and equipment	1,189,276	1,096,721	-92,555	-7.78
Intangible assets	6,634	5,474	-1,160	-17.49
Other Assets	256,670	273,635	16,965	6.61
Total Assets	2,528,005	2,549,013	21,008	0.83
Current liabilities	594,590	600,040	5,450	0.92
Non-current liabilities	240,158	233,446	-6,712	-2.79
Total liabilities	834,748	833,486	-1,262	-0.15
Equity attributable to owners of the parent company	1,693,246	1,702,815	9,569	0.57
Share Capital	726,000	726,000	0	0
Capital Fund	277,452	277,452	0	0
Retention Surplus	855,824	952,496	96,672	11.30
Other interests	(166,030)	(237,459)	-71,429	-43.02
TreasuryStocks	0	(15,674)	(15,674)	0
Non-controlling interests	11	12,712	12,701	115,463.64
Total equity	1,693,257	1,715,527	22,270	1.32
Change of 20% or more in the last two years due to 1. Other changes in equity were mainly due to the translation differences arising from the translation of the financial statements of foreign operating companies. 2. The change in noncontrolling interest was mainly due to the investment in 51% shares of KaishengBath Co.

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2. Financial Performance

(1) Reasons for significant changes in operating income, net operating income and net income before income tax for the last two years

Unit: NT$ thousands

Annual Project	2019	2020	Amount of increase (decrease)	Change ratio (%)
Operatingincome	2,334,926	2,306,521	-28,405	-1.22
OperatingCosts	1,633,243	1,572,353	-60,890	-3.73
Gross Profit	701,683	734,168	32,485	4.63
OperatingExpenses	455,180	444,491	-10,689	-2.35
Other gains and losses, net	210	(631)	(841)	-400.48
Operating profit or loss	246,713	289,046	42,333	17.16
Non-operating income and expenses	(1,170)	529	1,699	-145.21
Net income before tax	245,543	289,575	44,032	17.93
Net income (loss) for theperiod	179,852	220,056	40,204	22.35
Other comprehensive income or loss for the period (Net after tax)	(19,355)	(71,431)	-52,076	269.06
Total consolidated profit or loss for the period	160,497	148,625	-11,872	-7.40
Change of 20% or more in the last two years due to 1. The change in other gains and losses, net was mainly due to the increase in compensation losses. 2. The changes in non-operating income and expenses were mainly due to the back taxes paid by the Vietnam subsidiary in 2008, but not in 2009. 3. The change in net income for the period was mainly due to the increase in profit. 4. The change in other comprehensive income for the period was mainly due to the exchange differences arising from the translation of the financial statements of foreign operatingcompanies.

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(2) Expected sales volume and its basis

For the year ended December 31, 2020, the Company did not disclose its financial forecast to the public.

(3) Possible impact on the Company's future financial operations and plans for response

Not applicable.

3. Analysis of Cash flow

(1) Analysis of recent annual cash flow changes

Unit: NT$ thousands

					Unit: NT$ thousands	Unit: NT$ thousands
Opening Cash Balance	Net cash flow from operating activities for the year	Net cash flow from investing and financing activities for theyear	Effect of exchange rate changes	Excess (shortfall) of cash	Remedies for cash shortage
					Investment Plan	Financial Plan
238,566	170,612	(205,921)	(38,441)	164,816	Not applicable	Not applicable
Operating activities: Cash inflows from operating income. Investing activities: The net cash outflow of $62,121 thousand was mainly due to the acquisition of property, plant and equipment. Financing activities: The net cash outflow of $143,800 was mainly due to the payment of cash dividends and treasurystock buyback costs.

(2) Improvement plan for lack of mobility

There is no cash flow shortage.

(3) Cash flow analysis for the coming year

Unit: NT$ thousands

				Unit: NT$ thousands	Unit: NT$ thousands
Opening Cash Balance	Estimated full-year net cash flows from operating activities	Expected full-year net cash flow from investing and financing activities	Estimated remaining (shortfall) cash amount	Remedies for cash shortage
				Investment Plan	Financial Plan
164,816	179,143	(200,501)	143,458	Not	Not

366 -

a licable a licable pp pp

Operating activities: The estimated operating income for 2021 plus depreciation and amortization expenses.

Investing activities: Mainly capital expenditures for 2021 are estimated.

Financin activities: The estimated cash dividends and re a ment of short-term loans. g p y

4. The Impact of Major Capital

Expenditures on Financial Operations

(1) Use of significant capital expenditures and sources of funds

Unit: NT$ thousands

		Unit: NT$
Project	FundingSources	Amount of expenses
Purchase of property, plant and equipment	Working Capital	38,484

(2) Expected benefits (such as product quality, pollution prevention, cost reduction, etc.)

Expanding the manufacturing capacity of Vietnam plant to increase porcelain and water production revenue and increase the competitiveness of domestic, Vietnam and Southeast Asia markets.

5. Investment Policy in the Most Recent

Year, Main Causes for Profits or Losses, Improvement Plans and Investment Plans for the Coming Year

(1) Latest Annual Reinvestment Policy

The Company's reinvestment policy is based on factors such as expansion of operating scale and reduction of production costs, and seeks appropriate targets for reinvestment. In addition to consolidating the existing core business, the Company expects to explore business opportunities in peripheral markets and enhance profitability.

(2) The main reasons for profit or loss from investment in the most recent year, and improvement plans

Unit: NT$ thousands

Transfer End of Held at Investment Main reasons for Improvement

367 -

Investment Company	period original Investment amount	the end of the period Carrying amount	income (loss) recognized in the period	gain or loss	Plan
Vietnam Caesar Bath Joint Stock Company Limited	665,303	1,225,499	58,988	It is one of the top three local bathroom brands in Vietnam. We have made profits in the last threeyears.	None
Kaisheng Sanitary Co., Ltd.	13,260	13,221	(39)	A new subsidiary was established in December 109 and began operations in January2021.	None

(3) Investment plan for the coming year

The Company has no significant investment plans for the coming year.

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6. Analysis and Assessment of Risks

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

Unit: NT$ thousands

Annual Project	2019	2019	2020	2020
	Amount	Ratio of net income before tax(%)	Amount	Ratio of net income before tax(%)
Interest income	4,654	1.90	4,779	1.65%
Interest expense	8,067	3.29	8,125	2.81%
Foreign currency exchange (gain) or loss	2,035	0.83	1,740	0.60%

Future Measures
(1) Interest Rate Change

The Company's working capital is still sufficient and its dependence on finance is relatively low, and market interest rates have been hovering at a low level in recent years. The Company's finance department will pay close attention to changes in interest rates and maintain good credit relationships with banks to actively seek the best interest rates and reduce the impact of interest rate changes on the Company's profit and loss.

(2) Exchange rate changes

The Company's foreign exchange policy is based on the principle of conservatism and prudence, and foreign sales and purchases are quoted in foreign currencies, so that foreign currency revenues and expenses are offset to produce a natural hedging effect. The Company's finance department will pay close attention to the changes in foreign exchange rates and adjust the level of foreign exchange holdings and the timing of conversion in order to reduce the impact of exchange rate changes on the Company's profit and loss.

(3) Inflation

In order to reduce this risk, the Company adopts a strategy of decentralizing its purchases to obtain relatively lower costs, and adjusts its selling prices in a timely manner to maintain stable profits. In addition, the Company actively strengthens its corporate management by improving production efficiency, personnel quality and inventory management in order to reduce the impact of inflation on its operations.

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

For the most recent year and as of the date of the annual report, the Company has not engaged in high-risk, highly leveraged investments.

Lending of funds to others

The Company follows the Company's "Procedures for Lending Funds to Others" and the Board of Directors' approval is required before the Company can lend funds to others. For the most recent year and as of the printing date of the annual report, the Company has not loaned any funds to others.

Endorsement Guarantee

The Company follows the "Procedures for Endorsements and Guarantees" and the Board of Directors' approval before the endorsement and guarantee are made. For the most recent year and as of the date of the annual report, the Company's endorsement/guarantee recipients are all subsidiaries.

Derivative Commodity Trading

The Company enters into derivative transactions in accordance with the Company's "Procedures for Handling Derivative Transactions", and the authorized amount is approved by the president or the board of directors before the transaction is made. The Company has not engaged in any derivative transactions in the latest year and up to the date of the annual report.

(3) Future research and development plans and estimated investment in research and development

In response to the environmental protection policy and the use of water resources, our company focuses on the development and design of the water circuit, and constantly revises and adjusts our products to meet not only the general water label, but also the gold level water label. In terms of consumer health, we have been developing lead-free copper and stainless steel faucets and shower de-chlorinators, as well as de-chlorinating showerheads to reduce the health hazards of toxic substances (lead and chlorine) to consumers and to contribute to the water safety of the nation. In addition, the development of differentiated technologies is also the focus of our company, such as the integration and application of ozone technology, the research and development of micro bubble shower technology, and the development of electric automation and intelligent technology-related product categories.

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On the factory side, we have introduced the automatic production process and continue to increase the proportion of mechanical mold production to reduce the labor-intensive reliance on manual molds; and the development of high pressure grouting molds is gradually entering the harvesting period. Since March 2017, the Vietnam factory has gradually introduced the production history, which is under continuous testing and improvement, linking the front-end production line, quality control, logistics, and even maintenance and after-sales service information together to provide real-time management information and strengthen the quality and service management. As a result of the above, the estimated investment in R&D in 2021 is approximately NT$13,262,000.

In the past, porcelain products had to be prototyped, manually reshaped, tested for mass production, and then tested in water before they could be marketed. However, with the introduction of the latest 3D light-curing resin molding technology, from 3D appearance and correction to printing and molding, water testing can be conducted directly, significantly reducing the product development time and shortening the time required for introduction to market. The time required to bring the product to market is greatly reduced.
With the production of the bath cabinet factory, we have introduced automatic production lines and advanced panel processing machines to prepare for the subsequent development of new series and diversified bath cabinet styles, cabinet system development, and whole house customization, and we have also developed and introduced the latest pressed pop-up and cushioned thin drawer hardware to enhance the product power of cabinet and bath cabinet products.
We will continue to refine our porcelain high pressure grouting technology and strengthen the capability of high pressure grouting technology, which will not only greatly increase the production speed, but also effectively improve the production yield and capacity, and will give priority to this high pressure grouting technology for products with high market demand and easy to apply porcelain structure.
Porcelain injection molding technology and related machine purchase, continue to refine the mold design and production capacity, reduce the number of pieces of mold, increase production efficiency and reduce the labor and error rate of workers, effectively improve product yields, the current porcelain plant two semi-automatic injection molding machine has been built, continue to refine and improve the new product mold design, the number of pieces of mold to reduce the design and production capacity.
We continue to introduce robotic glazing arms, introducing the world's
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advanced intelligent robotic glazing arms, which can simulate the glazing master's glazing gestures and speed to achieve the realm of robotic glazing, significantly improving production speed and quality stability. We continue to optimize and optimize the path design to reduce production hours and glaze consumption, increase production capacity and save costs.

The barcode management system will be introduced in the porcelain factory as a priority, so that the detailed information of the entire production process, from sizing to firing, can be recorded to facilitate product quality control and statistical yield of each production line, and can be used for big data analysis in the future. In the future, it can be applied to the analysis of big data to strengthen the product development energy, and the production history management was officially launched in 2018 to analyze and continuously improve the process based on the feedback collected.
(4) The impact of significant domestic and international policy and legal changes on the Company's financial operations and measures to address them

The Company operates in compliance with the relevant domestic and foreign laws and regulations, and keeps an eye on important domestic and foreign policies and legal changes to assess their impact on the Company and provide management with the necessary information for relevant decisions. The Vietnamese government increases the basic wage every year, resulting in an increase in operating costs. The Company continues to carry out automation and machinery improvements to maintain gross profit and to negotiate with customers on the pass-through mechanism. There were no material adverse effects on the Company's financial operations due to significant domestic and foreign policy and legal changes in the most recent year and up to the date of printing of the annual report.

(5) Impact of technological changes and industry changes on the Company's financial operations and measures to address them

The Company has a research and development department, which specializes in tracking and analyzing industry dynamics, research and innovation of technology. Therefore, at this stage, the Company's financial business has not been significantly affected by technological changes and industry changes. However, the Company has assessed that the bathroom industry has been moving towards the trend of green energy, technology, environmental protection and health.

(6) Impact of corporate image change on corporate crisis management and response measures

Our company is committed to provide excellent products and services, "good quality but better, fast service but faster" is our constant goal. In recent years, we have continued to cultivate the Taiwan market with a steady pace,

372 -

and we have returned our business results to all shareholders, employees and the public, fulfilling our corporate social responsibility. In the recent year and as of the printing date of the annual report, no corporate crisis has occurred due to the change of corporate image.

(7) Expected benefits, possible risks and responses to the merger and acquisition For the most recent year and as of the date of the annual report, the Company has no plans for mergers and acquisitions, and will carefully evaluate the benefits and risks of such plans, if any, in the future.

(8) Expected benefits, possible risks and measures for plant expansion

The Company has no plans to expand its plants in the latest year and as of the date of the annual report. If there are any such plans in the future, the benefits and risks will be carefully evaluated.

(9) Risks associated with the concentration of inbound and outbound shipments and measures to address them

The Company has no suppliers accounting for more than 10% of the total sales, and each product has more than two sources of purchase, so there is no risk of concentration of sales. There is no concern of excessive concentration.

We have the trademark right of "Caesar Bath" brand, so we can select the best customers for purchase or sale at any time to avoid the risk of concentrated purchase or sale.

(10) The impact, risk and response measures of a substantial shift or change in shareholding of directors, supervisors or substantial shareholders holding more than 10% of the shares of the Company

For the most recent year and as of the date of the annual report, there has been no significant transfer or change of ownership of the Company's directors, supervisors or substantial shareholders holding more than 10% of the shares.

(11) Impact of the change in management rights on the Company, risks and measures

For the most recent year and as of the date of the annual report, there has been no change in the Company's management rights.

(12) For litigation or non-litigation events, the Company and its directors, supervisors, general manager, persons in charge, substantial shareholders holding more than 10% of the shares, and affiliated companies should disclose the material litigation, non-litigation or administrative dispute that has been determined or is still in progress, and the outcome of which may have a significant impact on shareholders' equity or securities prices, the facts of the dispute, the amount of the subject matter, the commencement date of the litigation, the principal parties involved and the The Company shall disclose the facts of the dispute, the amount of the subject matter, the
373 -

commencement date of the litigation, the principal parties involved and the status of the litigation as of the date of the annual report.

For the most recent year and as of the date of the annual report, the Company has not been involved in litigation or non-litigation matters.

(13) Other important risks and countermeasures

None.

7. Other Important Matters

None.

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VIII. Special Disclosure

1. Information of the Associates

(1) Organizational Chart of Affiliated Companies (December 31, 2020)

Sanitar Co., Ltd.

99.99% 51.00% Kaisheng Sanitary Co., Ltd.

Vietnam Caesar Sanitary Wares Joint Stock Co.

Note: The above affiliates do not hold shares of the Company.

(2) Basic information of each affiliated company

Unit: NT$ thousands

				Unit: NT$ thou
Company Name	Date of Establishment	Address	Paid-in capital	Main business or production items
Vietnam Caesar Sanitary Wares Joint Stock Co.	March 20, 1996	Inchai Industrial Zone, Inchai District, Dong Nai Province, Vietnam	663,230	Manufacture and sale of bathroom equipment and water supply brassware
Kaisheng Sanitary Co., Ltd.	December 2, 2020	No. 258, Chung Hsing 5th Street, Lu Chu District, Taoyuan City	26,000	Sales of bathroom equipment and copper water supply

(3) Information on the same shareholders who are presumed to be in a controlling or subordinate relationship

No such case.

(4) The industries covered by the business of the overall affiliated company The main contents of the company's business.
Ceramics and ceramic products manufacturing industry
Ceramic glassware wholesale industry
Kitchen, bathroom equipment installation engineering industry
Waterware material wholesale industry
Wholesale of furniture, bedding, kitchen appliances, and furnishings
Retailing of furniture, bedding, kitchenware and furnishings
Building Materials Retail
Copper rolling, wire drawing and extrusion industry
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9. Building materials wholesale industry

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(5) The names of the directors, supervisors and general managers of each related company and their shareholdings or capital contributions to the company

			December 31,2020 Shareholding Number of shares Shareholdin gratio 41,877,700 99.99% 41,877,700 99.99% 41,877,700 99.99% 41,877,700 99.99% 1,326,000 51.00% 1,326,000 51.00% 520,000 20.00% 520,000 20.00% 234,000 9.00%	December 31,2020 Shareholding Number of shares Shareholdin gratio 41,877,700 99.99% 41,877,700 99.99% 41,877,700 99.99% 41,877,700 99.99% 1,326,000 51.00% 1,326,000 51.00% 520,000 20.00% 520,000 20.00% 234,000 9.00%
Company Name	Job Title	Name or representative	Shareholding
			Number of shares	Shareholdin gratio
Vietnam Caesar Sanitary Wares Joint Stock Co.	Chairperson	Caesar Bath & Shower (Stock) Co. Representative: HSIAO, CHUN-HSIANG	41,877,700	99.99%
	Director and General Manager	Caesar Bath & Shower (Stock) Co. Representative: CHEN, WEI-CHIH	41,877,700	99.99%
	Directors	Caesar Bath & Shower (Stock) Co. Representative: Yat-Sen Chang	41,877,700	99.99%
	Supervisor	Caesar Bath & Shower (Stock) Co. Representative: Lin Lingzhi	41,877,700	99.99%
Kaisheng Sanitary Co., Ltd.	Chairperson	Caesar Bath & Shower (Stock) Co. Representative: HSIAO, CHUN-HSIANG	1,326,000	51.00%
	Directors	Caesar Bath & Shower (Stock) Co. Representative: CHEN, WEI-CHIH	1,326,000	51.00%
	Directors	Henrong Investment Co. Representative: P.Y. Wang	520,000	20.00%
	Supervisor	Zhang Zhangxi	520,000	20.00%
	General Manager	Wen-Hsiung Wu	234,000	9.00%

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(6) Business Overview by Associates

Unit: NT$ thousands, but earnings per share was NT$; December 31, 2020

Company Name	Capitali zation	Total Asset Value	Total liabilities	Net value	Operating income	Operating profit or loss	Profit or loss for the period (after tax)	Earni ngs per share
Vietnam Caesar Sanitary Wares Joint Stock Co.	663,230	1,517,728	275,741	1,241,987	1,252,370	70,867	63,252	1.51
Kaisheng Sanitary Co., Ltd.	26,000	26,000	76	25,924	0	-76	-76	-0.03

(7) Consolidated Financial Statements of Affiliated Companies

For the year ended December 31, 2020 (January 1, 2020 to December 31, 2020), the companies that should be included in the consolidated financial statements of affiliated companies in accordance with the "Regulations Governing the Preparation of Consolidated Financial Statements of Affiliated Companies and Related Party Reports" are the same as those that should be included in the consolidated financial statements of parent and subsidiary companies in accordance with IFRS 10, and the information required to be disclosed in the consolidated financial statements of affiliated companies has already been disclosed in the aforementioned consolidated financial statements of parent and subsidiary companies. The information required to be disclosed in the consolidated financial statements has been disclosed in the preceding consolidated financial statements of the parent and subsidiary.

(8) Relationship Report

The Company is not a subordinate company under Article 369-2 is of the Company Law, therefore, Not applicable.

2. Private Placement Securities in the Most

Recent Years

No such case.

378 -

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

No such case.

4. Other Necessary Items to Be Supplemented

None.

379 -

IX. Matters that Have Significant Effect on Shareholders' Equity or the Price of Securities

For the most recent year and up to the date of publication of the annual report, events that have a significant impact on shareholders' equity or the price of securities as defined in Article 36, Paragraph 3, Clause 2 of the Securities and Exchange Act have occurred:

No such case.

380 -

AI assistant

SANITAR — Annual Report 2021

51930_rns_2021-07-23_e98421ca-7914-4660-b003-03fccc2aec08.pdf

SANITAR Co., Ltd.

Notice to readers

I. Name, title, contact telephone number and e-mail address of the spokesperson and spokesperson-in-charge

II. Address and number of head office, branch and factory

III. Name, address, website and telephone number of the transfer agent

IV. Name, address, website and telephone number of the accountant who issued the most recent annual financial report

V. The name of the exchange where the overseas marketable securities are listed and

the way to inquire the information of the overseas marketable securities

VI. Company website

Table of Contents

I. Report to Shareholders

1. Operating Performance in 2020

(1) Business Plan Implementation Results

(2) Budget implementation

(4) Research and development status

II. Company Profile 1. Date of Incorporation

2. Company History

III. Corporate Governance Report

1. Organization

(1) Organizational Structure

(2) Major Corporate Functions

2. Directors, Supervisors, President, Vice President, Assistant Managers and Heads of Departments and Branch Organizations

(2) President, Vice President, Senior Manager, Heads of Departments

3. Remuneration of Directors, Supervisors, President, and Vice President in the Most Recent Fiscal Year

(1) Remuneration of Directors and Independent Directors

(2) Remuneration of Supervisors

(3) Remuneration of the President and Vice President

(2) Performance Evaluation Results

B. Manager

4. Implementation of Corporate Governance

(1) Board of Directors

1. Information of the Remuneration Committee Members:

2. 2020 Senior Corporate Governance Officer's Corporate Governance Related Education

3. 2020 Manager's further education on corporate governance

Statement of Internal Control System

2. Im ortant Resolutions of the Board of Directors p

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

2 The erson to whom the e uit is transferred is a related art . ( ) p q y p y

IV. Capital Overview

1. Capital and shares

(1) Source of Equity

(2) Shareholder Structure

(3) Diversification of shareholding

2. Special Unit

(4) List of major shareholders

(9) Buyback of the Company's shares

4. Global Depository Receipts

5. Employee Stock Options

V. Operational Highlights

1. Business Activities

2. Operating weight

3. Current products (services) of the company

(2) Domestic Market Changes

(3) Factory Operation Overview

3. Various trends of product development

(3) Technology and R&D Overview

2. Market and Sales Overview

2. Market share

2. Production process of major products

(1) Porcelain

(3) Supply of major raw materials

(5) Production volume for the last two years

(6) Sales volume for the last two years

4. Environmental Protection Expenditure

6. Important Contracts

VI. Financial Information

2.Condensed Consolidated Statements of Income - Consolidated Financial Statements

2. Five-Year Financial Analysis

(1) Financial Analysis - Consolidated Financial Statements

3. Audit Committee’s Report for the Most Recent Year

Supervisory Review Report

4. Financial statements for the most recent year

Sanitar Co., Ltd.

Parent Company Only Financial Statements and Independent Auditors’ Report

Accountant's Audit Report

Audit opinion

Basis for audit opinion

SANITAR Annual Report 2021