WANHWA — Annual Report 2020

Sep 3, 2021

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Stock Code
2701
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the information of this annual report on the following website (http://mops.twse.com.tw)

Wan Hwa Enterprise Company Ltd.

2021 Annual Report

12F., No. 41, Sec. 1, Zhonghua Rd., Taipei City

(02)23813737

Printing Date:May 20, 2021

Notice to Readers

Where any discrepancy arises between the English translation and the original Chinese version of this annual report, the Chinese version shall prevail.

I. Contact Information of Spokesperson and Deputy Spokesperson

Spokesperson: Mao-Chang Tsai

Title:Chairman Tel:(02)23753211(Switchboard) E-mail: NA Deputy Spokesperson: Shih-Yu Huang

Title: Vice President Tel:(02)23753211(Switchboard) E-mail: NA

II. Contact Information of the Head Office

Head Office: No. 52, Emei St., Taipei City Tel:(02)23814307

III. Contact Information of the Share Transfer Agency

Name: Wan Hwa Enterprise Company Ltd. Add: 11F., No. 41, Sec. 1, Zhonghua Rd., Taipei City Tel: (02)23753211

IV.Contact Information of the Certified Public Accountants for the Latest Financial Report

Auditors: Hsu-Jan Cheng and Tung-Ju Hsieh

CPAFirm:Deloitte&Touche

Add:20F, No. 100, Songren Rd., Xinyi Dist., Taipei City Tel:(02)2725-9988

Website:http://www.deloitte.com.tw

V. Overseas Trade Places for Listed Negotiable Securities: NA

VI. Company Website:www.wanhwa.com.tw

Annual Report Table of Contents

I. Letter to Shareholders --------------------------------------------------------------------- 1 II. Company Profile -------------------------------------------------------------------------- 4 III. Corporate Governance Report ---------------------------------------------------------- 8 1. Organization System ------------------------------------------------------------- 8 2. Directors, President, Vice President, Assistant Vice President, Executives of Each Division and Branch -------------------------------- 10 3. Implementation of Corporate Governance ---------------------------------- 18 4. Audit Fees to CPA -------------------------------------------------------------- 29 5. Information of CPA replacement --------------------------------------------- 29 6. Where the Company’s chairman, president, managerial officers in charge of financial or accounting affairs having served with the CPA firm or the affiliates over the past year, it shall disclose the name, title and the duration of those served with the CPA firm. ----- 29 7. Facts of Equity Transfer and Change in Equity Pledge by the Directors, Managerial Officers, and Shareholders holdings over 10% of outstanding shares in the most recent year and up to the Publication of this Annual Report----------------------------------------- 30 8. Related party relationship in accordance with SFAS No. 6 among shareholders with top 10 shareholdings. --------------------------------- 30 9. Shares of Invested Company Held by the Company, Directors, Managerial Officers, and Enterprises Directly or Indirectly Controlled by the Company and Shareholding Ratio in Aggregate of the Above Parties ------------------------------------------- 31 IV. Capital Overview ----------------------------------------------------------------------- 32

1. Capital and Shares -------------------------------------------------------------- 32 2. Issuance of Corporate Bonds -------------------------------------------------- 38 3. Issuance of Preferred Shares -------------------------------------------------- 38 4. Issuance of Global Depositary Receipts ------------------------------------- 38 5. Issuance of Employee Stock opinion ---------------------------------------- 38 6. New Shares Issued for Merger or Acquisitions ---------------------------- 38 7. Implementation of the Capital Allocation Plan----------------------------- 38 V. Operational Highlights ----------------------------------------------------------------- 39 1. Business Activities ------------------------------------------------------------- 39 2. Market and Production Overview -------------------------------------------- 39 3. Employee Profile of the Most Recent Two Years up to the Publication of this Annual Report----------------------------------------- 41 4. Environment Cost --------------------------------------------------------------- 41 5. Labor-Management Relationship --------------------------------------------- 42 6. Important Contracts ------------------------------------------------------------ 43 VI. Financial Information ------------------------------------------------------------------ 44 1. Five-year Financial Summary ----------------------------------------------- 44 2. Financial Ratio Analysis for Recent Five Years --------------------------- 46 3. Audit Report from the Auditing Committee on the Latest Financial Statements -------------------------------------------------------------------- 48 4. Latest financial statements ---------------------------------------------------- 49 5. Latest Audited Consolidated Financial Statements of the Parent and Subsidiaries------------------------------------------------------------- 105 6. Whether the Company and its subsidiaries have financial difficulties in the most recent year up to the publication of this annual report ---------------------------------------------------------------- 105 VII. Review and Analysis of Financial Status and Financial Performance, and Risk Management --------------------------------------------------------------- 106

2. Financial Status ---------------------------------------------------------------- 106 2. Analysis of Financial Performance ------------------------------------------ 107 3. Analysis of Cash Flow -------------------------------------------------------- 108 4. Major Capital Expenditures and Impact on Financial and Business in the Most Recent Year --------------------------------------------------- 109 5. Main Causes for Profits or Losses of the Investment Strategy in the Most Recent Year, the Improvement Plans and the Investment Plans for the Coming Year ------------------------------------------------ 109 6. Risk Management Analysis and Assessment ------------------------------ 109 7. Other important matters. ------------------------------------------------------ 110 VIII. Other Special Notes ----------------------------------------------------------------- 111 1. Information on Affiliates ----------------------------------------------------- 111 2. Private Placement of Securities in the Most Recent Year up to the Publication of this Annual Report---------------------------------------- 111 3. The Shares of the Company Held or Disposed of by Subsidiaries in the Most Recent Year up to the Publication of this Annual Report ------------------------------------------------------------------------ 111 4. Other important supplementary information ------------------------------- 111 IX. Events occurred in the most recent year and up to the publication of this annual report, which significantly affects shareholders' equity or price of shares pursuant to Article 36, Paragraph 3, Subparagraph 2, of the Securities and Exchange Act ------------------------------------------------------- 112

I. Letter to Shareholders

Dear Shareholders: Thank you for attending the 2021 general shareholders meeting of the Company.

In 2020, due to the impact of the COVID-19 epidemic, the global economy had a severe recession. The Company was also affected by the outbreak, with theater revenues and foreign investments accounted for under the equity method being affected more. Since several vaccines are now available and most countries have started the vaccination, we expect the epidemic to gradually stabilize and return to normal. The following is a report of the Company's operating condition in 2020:

• （ 1 ） The Company's total operating revenue for year 2020 was NT$264,691 thousand, a decrease of 24.06% compared to 2019 of NT$348,551 thousand, including a decrease of 11.14% in rental revenue and a decrease of 43.50% in recreation revenue. Profit before income tax was NT$209,608 thousand, a decrease of 57.14% compared to NT$489,104 thousand in 2019, and the net profit after tax was NT$174,120 thousand, a decrease of 56.42% compared to NT$399,559 thousand in 2019.

• （ 2 ） Domestic and foreign investees of the Company:

• Foreign investees:

• Share of the net loss after tax of investees accounted for using equity method (in 2020) was NT$25,383 thousand.

• Other domestic investees:

• Gains from the Company's investments under the policy of diversification included cash dividends of NT$44,550,226 from First Hotel Co., Ltd., cash dividends of NT$7,925,464 from Capital Securities Corp., cash dividends of NT$23,273,316 from Dah Chung Bills Finance Corp. and cash dividends of NT97,883 and stock dividends of 442 shares from other investees.

• （ 3 ） Business outlook:

• Leasing:

The Company's lessees include Eslite Corporation, Flower Lounge Restaurant, Green World Zhonghua Hotel, Formosa International Hotels, Elta Technology Corporation, Chienyen Restaurants, Sushiro Taiwan, Co, Ltd., and President Chain Store Corporation. all of which have signed lease agreements.

1. Entertainment:

2. (1) The Company's cinemas commissioned its screening schedule to Showtime Cinemas Inc. Its operating revenue in 2020 decreased by 46.83%, compared to 2019 due to the impact of

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the epidemic and fewer new film releases in 2020. The

operations of other peers were all affected more.

• (2) The amusement park of the Company was also impacted by the epidemic. Its operating revenues decreased by 21.44% in 2020 compared to 2019.

Finally, we hope that all shareholders can continue to support the Company as you have in the past and provide us with the encouragement and guidance. Once again, thank you and wish you good health and all the best, ladies and gentlemen.

※Attach the business report (please refer to page 8)

Chairman: Mao-Chang Tsai

President: Ya-Chen Wu

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Table 1

Comparison of the Company's income and expenses for 2020 and 2019

					Unit: NT$ thousands	Unit: NT$ thousands
Item	2020	%	2019	%	Increase (decrease) amount	Changes in %
Operating income	264,691	100	348,551	100	-83,860	-24.06
Income from rent	186,054	70	209,368	60	-23,314	-11.14
Education and entertainment	78,637	30	139,183	40	-60,546	-43.50
Operating cost	96,349	36	142,814	41	-46,465	-32.54
Gross Margin	168,342	64	205,737	59	-37,395	-18.18
Operating expenses	30,402	12	30,814	8	-412	-1.34
Operating profit	137,940	52	174,923	51	-36,983	-21.14
Non-operating income	72,466	27	316,941	90	-244,475	-77.14
Non-operating expenses	798	-	2,760	-	-1,962	-71.09
Profit before taxation	209,608	79	489,104	141	-279,496	-57.14
Profit after taxation	174,120	66	399,559	115	-225,439	-56.42

Year Analysis item	Year Analysis item	2020	2019
Profitabilit y	Return on assets(%)	1.95	4.53
	Return on equity (%)	2.27	5.26
	Pre-tax Income to Paid-in Capital Ratio(%)	4.66	10.87
	Net Margin(%)	65.78	114.63
	Earningsper Share(NT$)	0.39	0.89

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II. Company Profile

1. Date of incorporation: February 26, 1958.

2. Address and telegraph no. of the head office and second office:

Unit	Address	TEL
Head office	No. 52,EmeiSt.,TaipeiCity	02-23814307
Second office	12F., No. 41, Sec. 1, Zhonghua Rd., Taipei City	02-23813737

3. Company history

February 1958	The Company was founded with an initial capital of NT$1.2 million.
	Business scope: wholesale trade
May 1962	Capital was increased to $50 million, and added business items to
	operate the First Hotel Taipei.
August 1964	Purchased 1,873 square meters of land in Jieshou Section,
	Zhongzheng District, Taipei City and built the Wan Hwa Enterprise
	Building (No. 41, Sec. 1, Zhonghua Road, Taipei City). Completed in
	1965, the building was leased out as department stores, restaurants,
	nightclubs and offices.
January 1965	Purchased 2,331 square meters of land in a diamond area of
	Ximending and planned to build the Wanhwa Education and
	Recreation Building.
March 1965	The Company's stock was publicly listed on March 22, 1965 and
	became available for public investment. It was then classified as a
	Class II stock.
October 1968	Wanhwa Education and Recreation Building was completed (No. 52,
	Emei Street, Taipei City), part of which is leased out as department
	stores and restaurants. The rest of the building was directly operated
	by the Company in the entertainment business, such as cinema and
	amusement park.
December 1983	The assets (including buildings and land) were reevaluated with a total
	appreciation of NT$366,044,217.48, which was then recognized as
	capital reserves. Since 1984, the Company has allocated 10% annually
	to increase capital and issue new shares by law.
June 1988	The Company leased two publicly-owned supermarkets, Minrong and
	Hougang, from the city government for a three-year term expired on
	June 16, 1991.
July 1988	The Company completed the demolition of the original four-story
	building on Lane 84, Yanping South Road, Taipei City, and rebuilt it
	into a ten-story building connected to the former Wan Hwa Enterprise
	Building, No. 41, Sec. 1, Zhonghua Road.
	The Company operated its own department store and supermarket in
	the Wan Hwa Enterprise Building at Zhonghua road, from the
	basement to the ninth floor, with a business area of 4,000 pings.
May 1989	In order to expand its overseas business, the Company invested in
	“Wan Hwa International Investment Co., Ltd.” to conduct real estate

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	business.
April 1990	Due to the business needs, Article 2 of the Articles of Incorporation
	was amended to add: “Commissioning construction companies to
	build residential or commercial buildings for lease or sale.
July 1991	Reinvested in “Today's Hotel Corporation” in the U.S. to operate the
	hotel business.
	In November of the same year, a lease agreement was signed with
	Daan Commercial Bank for a total of seven-year term, until October
	1998.
July 1992	Signed a lease agreement with the Environmental Protection
	Administration of the Executive Yuan for the third to fourteenth floors
	of the Wan Hwa Enterprise Building on Zhonghua Road for the period
	from July 1992 to June 1997.
June 1994	The shareholders' meeting approved the company's capital at NT$1.8
	billion, which were to be divided into 180 million shares with NT$10
	per share and to be issued in installments.
October 1994	Invested in “Dah Chung Bills Finance Corporation” and
	“Entie Securities Finance Co.”
September 1995	The assets (land) were reevaluated with a total appreciation of
	NT$422,432 thousand which was then recognized as capital reserves.
	Since 1986, the Company has allocated 10% annually to increase
	capital and issue new shares by law.
December 1995	The Company reinvested in “Forward Time International Ltd.”
May 1997	The shareholders' meeting approved the capital of the Company at
	NT$1.95 billion in 1997, which were to be divided into 195 million
	shares with NT$10 per share and to be issued in installments.
	In September of the same year, the department store was leased by
	Eslite Corporation.
	Renewed a lease agreement with the Environmental Protection
	Administration of the Executive for the period from July 1997 to June
	2002.
June 1998	The shareholders' meeting approved the company's capital at NT$2.05
	billion in 1998, which were to be divided into 205 million shares with
	NT$10 per share and to be issued in installments.
	In November of the same year, Renewed the lease agreement with
	Daan Commercial Bank for the period from November 1, 1998 to
	October 31, 2005.
January 1999	In January 1999, the Company invested in redecorating the
	amusement park to enhance
	the image of the amusement park and leisure fun, as well as
	redecorating the cinema,
	with six halls, named “Carnival Cinemas.”
June 1999	The shareholders' meeting approved the company's capital at NT$2.17
	billion, which were to be divided into 217 million shares with NT$10
	per share and to be issued in installments.

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May 2000	A NT$64,333,480 of capitalization of retained earnings and the
	issuance of new shares were approved in order to enrich the working
	capital.
June 2001	A NT$215,214,440 of capitalization of retained earnings and the
	issuance of new shares were approved in order to enrich the working
	capital.
	In December of the same year, renewed a lease agreement with the
	Environmental Protection Administration of the Executive for the
	period in five years from July 2002 to December 2007.
June 2002	A NT$108,585,460 of capitalization of retained earnings and the
	issuance of new shares were approved in order to enrich the working
	capital.
June 2003	The shareholders’ meeting approved to distribute cash dividends and
	the capital remained at NT$2,280,294,820.
June 2004	A NT$68,408,840 of capitalization of retained earnings and the
	issuance of new shares were approved in order to enrich the working
	capital. After the capital increase, the total paid-in capital was
	NT$2,348,703,660.
	On July 6, 2004, renewed the lease agreement with Eslite Corporation
	for a 6-year term from September 1, 2006 to August 31, 2012.
June 2005	A NT$46,974,070 of capitalization of retained earnings and the
	issuance of new shares were approved in order to enrich the working
	capital. After the capital increase, the total paid-in capital was
	NT$2,395,677,730.
March 2006	On March 8, 2006, contracted with Showtime Cinemas Inc. to
	commission the screening schedule for a term of 5 years and 8
	months, from January 1, 2007 to August 31, 2012.
October 2006	A NT$215,610,990 of capitalization of retained earnings and special
	reserve and the issuance of new shares were approved in order to
	enrich the working capital. After the capital increase, the total paid-in
	capital was NT$2,611,288,720.
October 2007	A NT$261,128,870 of capitalization of retained earnings and the
	issuance of new shares were approved in order to enrich the working
	capital. After the capital increase, the total paid-in capital was
	NT$2,872,417,590.
October 2008	A NT$100,534,610 of capitalization of retained earnings and the
	issuance of new shares were approved in order to enrich the working
	capital. After the capital increase, the total paid-in capital was
	NT$2,972,952,200.
October 2009	A NT$104,053,320 of capitalization of retained earnings and the
	issuance of new shares were approved in order to enrich the working
	capital. After the capital increase, the total paid-in capital was
	NT$3,077,005,520.
October 2010	A NT$153,850,270 of capitalization of retained earnings and the
	issuance of new shares were approved in order to enrich the working
	capital. After the capital increase, the total paid-in capital was

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NT$3,230,855,790.

October 2011 A NT$161,542,790 of capitalization of retained earnings and the issuance of new shares were approved in order to enrich the working capital. After the capital increase, the total paid-in capital was NT$3,392,398,580. October 2012 A NT$118,733,950 of capitalization of retained earnings and the issuance of new shares were approved in order to enrich the working capital. After the capital increase, the total paid-in capital was NT$3,511,132,530. September 2013 A NT$140,445,300 of capitalization of retained earnings and the issuance of new shares were approved in order to enrich the working capital. After the capital increase, the total paid-in capital was NT$3,651,577,830. September 2014 A NT$138,759,950 of capitalization of retained earnings and the issuance of new shares were approved in order to enrich the working capital. After the capital increase, the total paid-in capital was NT$3,790,337,780. September 2015 A NT$189,516,880 of capitalization of retained earnings and the issuance of new shares were approved in order to enrich the working capital. After the capital increase, the total paid-in capital was NT$3,979,854,660. September 2016 A NT$198,992,730 of capitalization of retained earnings and the issuance of new shares were approved in order to enrich the working capital. After the capital increase, the total paid-in capital was NT$4,178,847,390. September 2017 A NT$208,942,360 of capitalization of retained earnings and the issuance of new shares were approved in order to enrich the working capital. After the capital increase, the total paid-in capital was NT$4,387,789,750. June 2018 On June 19, 2018, the shareholders' meeting elected the new term of the board of directors and set up an audit committee in accordance with the Securities and Exchange Act to replace the supervisory system. September 2018 A NT$111,888,630 of capitalization of retained earnings and the issuance of new shares were approved in order to enrich the working capital. After the capital increase, the total paid-in capital was NT$4,499,678,380.

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III. Corporate Governance Report

1. Organization System

2. (1). Organization structure

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Shareholder’s Meeting
Audit Committee Board of directors
Remuneration
Chairman
Committee
General Manager Audit Department
Vice Manager
’
Planning Finance Affairs General Business
Department Department Department Department
Entertainment
Today
Finance Affairs Cinema
Advertising Repairing Stock Affairs Accounting Motorized Golden Horse
Safety (security) Human Resource amusement park s Cinema Phoenix Cinema
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(2). Department responsibilities

. Department	responsibilities
Department	Main Responsibilities
Entertainment Business Department	Operation and management of the cinema business. Operation and management of the motorized amusement park.
General Affairs Department	Personnel administration, and training and education. General affairs and property management. Management of safety and security guarding affairs.
Finance Department	Accounting treatments related to bookkeeping and tax affairs. Preparing and analyzing financial statements. Fund dispatching and planning, and stock operations.
Planning Department	Repairing activities and leasing business. Marketing activities such as planning, advertising, etc.

(3). Risk management: The Company takes the board of directors as the highest decision-making unit for risk management. The audit department directly under the board of directors is responsible for the implementation of financial and operational risk control.

• (4). Industry: Tourism services, mainly on leasing and entertainment business.

• (5). Region: The Company's revenues are derived from its home country, so no region information is available.

(6). Exportation: The Company engages in the service industry without any exportation business.

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1. Director, President, Vice President, Assistant Vice President, Executives of Each Division and Branch

(1). Directors information (I)

Title	Nationalit y or place of incorporat ion	Name	Gender	Date Elected	Office Term	Date First Elected	Shareholding When Elected	Current Shareholding	Spouse & Minor Current Shareholding	Sharehold ing in the Name of Others	Selected Past Positions And Education	Other Concurren t Positions in the Company or Other Companie s	Other Executives, Directors who are Spouses or Relatives Within the Second Degree of Kinship	Other Executives, Directors who are Spouses or Relatives Within the Second Degree of Kinship	Other Executives, Directors who are Spouses or Relatives Within the Second Degree of Kinship
							Shares	Shares	Shares	Shares			Posi tion	Na me	Rel atio n
							Shareholding ratio	Shareholding ratio	Shareholding ratio	Sharehold ing ratio
Chairman	R.O.C.	Tsai, Mao- Chang Legal representative of Today's Department Store Company Ltd.	Male	2018.06.19	3 years	2009.06.19	87,576,499	89,809,699	－	None	Chairman of Wan Hwa Enterprise Company Ltd.	None	Non e	Non e	Non e
							19.96%	19.96%	－	None
Director	R.O.C.	Wu,Ya-Chen Legal representative of Te-Jung Hsu Social Welfare Charitable Foundation	Female	2018.06.19	3 years	1997.05.31	1,824	1,870	－	None	~~D~~irector of Wan Hwa Enterprise Company Ltd.	General Manager of Wan Hwa Enterprise Company Ltd.	Non e	Non e	Non e
							－	－	－	None
Independe nt director	R.O.C.	Hsu, Chang- Lung	Male	2018.06.19	3 years	2015.06.03	－	－	－	None	Former ~~G~~eneral Manager of Wan Hwa Enterprise Company Ltd.	None	Non e	Non e	Non e
							－	－	－	None
Independe nt director	R.O.C.	Tang, Chao-Chin	Male	2018.06.19	3 years	2015.06.03	－	－	－	None	Chairman ~~o~~f Tang Dynasty Communi cation Co., Ltd.	None	Non e	Non e	Non e
							－	－	－	None
Independe nt director	R.O.C.	Chang, Jo-Hu	Male	2018.06.19	3 years	2018.06.19	－	－	－	None	Chairman of Guoyi Communi cation Co., Ltd.	None	Non e	Non e	Non e
							－	－	－	None
							－	－	－	None

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Chart I: Major Shareholders of Institutional Shareholders

Today's Department Store Company Ltd.	First Hotel Company Ltd.(19.8%) Wan Hwa Enterprise Company Ltd. (19.8%)
Te-Jung Hsu Social Welfare Charitable Foundation	Consortium legal entity
First Hotel Company Ltd.	Kubo Investment Corporation (19.8%) Wan Hwa Enterprise Company Ltd. (19.8%) Mandarin Investment Corporation (14.72%) Zen Fong Investment Corporation (8.15%) Overseas Investment Corporation (3.56%) Kusen International Co., Ltd. (3.11%) Today's Department Store Company Ltd. (3.03%) Su, Kun-Yu (2.26%) Standard Chartered Custody Royal Bank Singapore Limited (1.64%) Shengwei Investment Co.,Ltd (1.31%)

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Directors information (II)

Criteria Name (Note 1)	Has at Least F Experience	ive Years of Relev and the Following P Qualifications	ant Working rofessional	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Independence Criteria (Note 2)	Number of Other Public Companies Currently Serves 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 Specialists Who Has Passed a National Examination and Awarded a Certificate in a Profession Necessary for the Business of the Company	Have Work Experience in the Area of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company	1	2	3	4	5	6	7	8	9	1 0	1 1	12
Tsai, Mao- Chang	－	－	V	V	－	V	V	V	V	－	V	V	V	V	－	0
Wu,Ya- Chen	－	－	V	－	－	V	V	V	V	－	V	V	V	V	－	0
Hsu, Chang- Lung	－	－	V	V	－	V	V	V	V	V	V	V	V	V	V	0
Tang, Chao- Chin	－	－	V	V	－	V	V	V	V	V	V	V	V	V	V	0
Chang, Jo-Hu	－	－	V	V	V	V	V	V	V	V	V	V	V	V	V	0

Note 1: The number of columns is adjusted according to the actual situation. Note 2: Directors, during the two years before being elected and during the term of office, meet any of the following situations. Please tick the appropriate corresponding boxes.

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

(2) Not a director or supervisor of the Company or any of its affiliates (the same does not apply, however, in cases where the person concurrently serves as an independent director of the Company, its parent company or subsidiaries, or affiliates under the same parent, as appointed in accordance with the Act or with 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 issued shares of the Company or ranks as one of its top ten shareholders.

• (4) Not a managerial officer listed in subparagraph (1), nor 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 subparagraphs (2) and (3)

(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of issued shares of the company or ranks as of its top five shareholders, or a corporate shareholder who appoints a representative to act as a director or supervisor of the Company in accordance with Article 27, Paragraph 1 or Paragraph 2 of the Company Act (the same does not apply, however, in cases where the person concurrently serves as an independent director of the Company, its parent company or subsidiaries, or affiliates under the same parent, as appointed in accordance with the Act or with local laws and regulations)

(6) Not a director, supervisor, or employee of a company which controlled by the same person, by whom more than half of the directors or of voting shares of the Company are held, as the Company (the same does not apply, however, in cases where the person concurrently serves as an independent director of the Company, its parent company or subsidiaries, or affiliates under the same parent, as appointed in accordance with the Act or with local laws and regulations). (7) Not a director, supervisor or employee of another company or organization who is the same person as, or the spouse of, the Company's chairman, president or equivalent (the same does not apply, however, in cases where the person concurrently serves as an independent director of the Company, its parent company or subsidiaries, or affiliates under the same parent, as appointed in accordance with the Act or with 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 (the same does not apply, however, in cases where that specified company or institution holds 20% to 50% of the Company’s outstanding shares, and the person concurrently serves as an independent director of the Company, its parent company or subsidiaries, or affiliates under the same parent, as appointed in accordance with the Act or with local laws and regulations).

(9) Not a professional individual, or an owner, partner, director, supervisor, a managerial officer of a sole proprietorship, partnership, company or institution that provides the Company or its affiliates with auditing services, or commercial, legal, financial, accounting and other related services for which the cumulative amount of compensation received in the last two years did not exceed NT$500,000, or a spouse thereof. This excludes roles as remuneration, public acquisition or merger committee members appointed in accordance with the Securities and Exchange Act or Business Mergers And Acquisitions Act.

• (10) Not a relative within the second degree of kinship to any other director.

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

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

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(2). President, Vice President, Assistant Vice President, Executives of Each

Division and Branch

Position (Note 1)	Natio nality	Name	Gender	Date Elected	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding in the Name of Others	Shareholding in the Name of Others	Education and Selected Past Positions (Note 2)	Other Concu rrent Positi ons in Other Comp anies	Managerial Officers who are Spouses or Relatives Within the Second Degree of Kinship	Managerial Officers who are Spouses or Relatives Within the Second Degree of Kinship	Managerial Officers who are Spouses or Relatives Within the Second Degree of Kinship	Remarks (Note 3)
					Shares	Shareholding ratio	Shares	Shareholding ratio	Shares	Shareholding ratio			Position	Name	Relation
President	ROC	Wu,Ya- Chen	Female	2006 06 23	-	-	-	-	-	-	Wan Hwa Enterprise Company Ltd. Chief Auditor	None	None	None	None	None
Vice President	ROC	Huang, Shih- Yu	Male	2015. 07 01	3,103	-	-	-	-	-	Wan Hwa Enterprise Company Ltd. Assistant Vice President	None	None	None	None	None
Accountin g Officer	ROC	Liang, Yu- Wen	Female	2020. 09. 01	-	-	-	-	-	-	Deloitte & Touche Assistant Manager	None	None	None	None	None

Note 1: This should include the President, Vice President, Assistant Vice President, and those who hold the equivalent positions, as well as executives of each division and branch, must be disclosed.

Note 2: Experience related to the current position. Detailed job title and the working responsibilities should be described if previously worked for the auditing accounting firm or its affiliated company.

Note 3: Where the President or equivalent (top managerial officer) and the Chairman are the same person, spouse, or relatives within the first degree of kinship of one another, the reasons, reasonableness, necessity and countermeasures (such as increasing the number of independent directors and not having more than half of the directors as employees or managerial officers, etc.) shall be disclosed.

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Remuneration Paid to Directors, President and Vice President:

(i) Remuneration paid to directors and independent directors

																					De U	cember 31, 2020 nit: NT$/ Shares
Position	Name			R	emuneration	Paid to Dir	ectors			Sum of A as a Perc In	, B, C and D entage of Net come	Relev	ant Remuner	ation Rece	ived byDirec	tors Who are Also Employees				Sum of E, F a Percen In	A, B, C, D, nd G as a tage of Net come	Compensation Received by Directors from Affiliates Not under the Group or from the Parent Company
		Compe	nsation (A)	Pens Retir	ion upon ement (B)	Remun	eration (C)	Service	Expenses (D)			Base Co Bon Allow	mpensation, uses, and ances(E)	Pens Retir	ion upon ement (F)	Employee Remuneration (G)
		The Company	Consolidated Companies	The Company	Consolidated Companies	The Company	Consolidated Companies	The Company	Consolidated Companies	The Company	Consolidated Companies	The Company	Consolidated Companies	The Company	Consolidated Companies	The Company		Consolidated Companies		The Company	Consolidated Companies
																Cash Amount	Stock Amount	Cash Amount	Stock Amount
Director Representative of Today's Department Store Company Ltd.	Tsai, Mao- Chang	826,000	Note	-	Note	2,400,000	Note	4,000	Note	1.86%	Note	-	Note	-	Note	-	-	Note	Note	1.86%	Note	None
Director Representative of Te-Jung Hsu Social Welfare Charitable Foundation	Wu,Ya- Chen	-		-		600,000		4,000		0.35%		719,800		49,368		125,979	-			0.86%
Independent director	Hsu, Chang- Lung	-		-		240,000		12,000		0.14%		-		-		-	-			0.14%
Independent director	Tang, Chao- Chin	-		-		240,000		72,000		0.18%		-		-		-	-			0.18%
Independent director	Chang, Jo-Hu	-		-		240,000		22,000		0.15%		-		-		-	-			0.15%

1. Please describe the policy, system, standard and structure for the remuneration of independent directors, as well as indicate the relevance of the amount of remuneration to their responsibilities, risks, time commitment, etc: According to the Company's Articles of Incorporation, the remuneration of independent directors shall be submitted annually to the Remuneration Committee for discussion and the Board of Directors for resolution, based on the profitability of the year. In addition, the directors’ performance evaluation and the policies, systems, standards and structure for the remuneration of directors are in accordance with the Company's “Regulations Governing the Organization of the Remuneration Committee.”

2. In addition to the disclosures in the above table, the remuneration received by the Company's directors for services rendered to all consolidated companies in the financial statements (e.g. as non-employee consultants, etc.) in the most recent year. Note: The Company does not have consolidated financial statements.

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(ii) Remuneration Paid to President and Vice Presidents:

												Dec Un	ember 31, 2 it: NT$/ Sha	020 res
Position	Name	Sal	ary (A)	Pens Retire	ion upon ment (B)	Bon Allow	uses, and ances (C)	Amount of Employee Remuneration (D)				Sum of A as a Perc Income (%	, B, C and D entage of Net )	Compensation Received by Directors from Affiliates Not under the Group or from the Parent Company
		The Company	Consolidated Companies	The Company	Consolidated Companies	The Company	Consolidated Companies	The Company		Consolidated Companies		The Company	Consolidated Companies
								Cash Amount	Stock Amount	Cash Amount A	Stock mount
President	Wu,Ya-Chen	1,438,800	Note	93,144	Note	-	Note	231,958	None	Note	Note	1.01	Note	None
Vice President	Huang, Shih-Yu

Note: The Company does not have consolidated financial statements.

Remuneration Range Table

Range of the Remuneration Paid to President and Vice Presidents	Name of President	and VicePresidents
	Sum of A, B, C a	nd D (A+B+C+D)
	The Company	Consolidated Companies
Under NT$1,000,000	Wu,Ya-Chen, Huang, Shih-Yu	-
NT$1,000,000 (inclusive)~NT$2,000,000	-	-
NT$2,000,000 (inclusive)~NT$3,500,000	-	-
NT$3,500,000 (inclusive)~NT$5,000,000	-	-
NT$5,000,000 (inclusive)~NT$10,000,000	-	-
NT$10,000,000 (inclusive)~NT$15,000,000	-	-
NT$15,000,000 (inclusive)~NT$30,000,000	-	-
NT$30,000,000 (inclusive)~NT$50,000,000	-	-
NT$50,000,000 (inclusive)~NT$100,000,000	-	-
Over NT$100,000,000	-	-
Total	2	-

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(iii) Remuneration of the top five highest paid executives in a listed company

Position	Name	Sal	ary (A)	Pens Retire	ion upon ment (B)	Bonu Allo	ses, and wances (C)	Amount of Employee Remuneration (D)	Amount of Employee Remuneration (D)	Amount of Employee Remuneration (D)	Amount of Employee Remuneration (D)	Sum of A as a Perc Income (%	, B, C and D entage of Net )	Compensation Received by Directors from Affiliates Not under the Group or from the Parent Company
		The Company	Consolidated Companies	The Company	Consolidated Companies	The Company	Consolidated Companies	The Company		Consolidated Companies		The Company	Consolidated Companies
								Cash Amount	Stock Amount	Cash Amount	Stock Amount
President	Wu,Ya-Chen	723,800	Note	49,368	Note	-	Note	125,979	None	Note	Note	0.52%	Note	None
Vice President	Huang, Shih-Yu	715,000		43,776		-		105,979				0.50%
Chief Account	Liang, Yu-Wen	570,267		34,980		-		51,779				0.38%

• (iv) Respectively compare and analyze the total remuneration paid to the Company’s directors, president and vice presidents in the last two years as a percentage of net income in the parent company only financial reports or individual financial reports, the remuneration policy, standard and package of remuneration payment, the procedure for the determination of remuneration and the relevance of the remuneration to the operating performance and future risk.

risk.
Year Position	2019		2020
	The Company	All Consolidated Companies	The Company	All Consolidated Companies
Directors	1.61%	Note1	3.19%	Note1
The remuneration of directors ispaid in accordance with the Company’s Article of Incorporation.
Year Position	2019		2020
	The Company	All Consolidated Companies	The Company	All Consolidated Companies
President and VicePresidents	0.45%	Note1	1.01%	Note1
The remuneration of the president and vice president is based on the approved principles of the Company's payment by grade.
Note: 1. The Company does not have consolidated financial statements.

1. The remuneration of the directors, president, vice presidents and managerial officers is determined with reference to the operating results of previous years.

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(v) Employee Remuneration Distributed to Managerial Officers and Distribution Situation

Situation
					December 31, 2020 Unit: NT$/ Shares
	Position	Name	Stock Amount	Cash Amount	Total	Total as a Percentage of Net Income (%)
Managerial Officer	President	Wu,Ya- Chen	-	283,737	283,737	0.16%
	Vice President	Huang, Shih-Yu
	Accounting Officer	Liang, Yu-Wen

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3. Implementation of Corporate Governance

(1-1). Board of directors meeting status

A total of 4 meetings were held in the most recent year, and below are the directors’ attendance records:

Position	Name	Attendance in Person	Attendance by Proxy	Attendance Rate in Person	Remarks
Chairman	Tsai, Mao-Chang. Representative of Today's Department Store CompanyLtd.	4	0	100%
Director	Wu, Ya-Chen. Representative of Te-Jung Hsu Social Welfare Charitable Foundation.	4	0	100%
Independent director	Hsu, Chang-Lung	4	0	100%
Independent director	Tang, Chao-Chin	4	0	100%
Independent director	Chang, Jo-Hu	4	0	100%
Other items to be stated: I. Where the operation of the Board meets any of the following circumstances, the minutes concerned shall clearly state the meeting date, term, contents of motions, opinions of all independent directors, and the Company’s resolution of said opinions: None. (I) Matters specified in Article 14-3 of the Securities and Exchange Act: (II) Other BOD resolutions to which objections or qualified opinions for the record or in writing are expressed by independent directors. II. For the recusals of directors due to conflicts of interests, the minutes shall clearly state the director’s name, contents of the motion, the reason for not voting and actual voting counts: None. III. An evaluation of targets (such as establishing an audit committee, improving information transparency and others) and performance for strengthening the functional competencies of the board during the current and the most recent years: The Company's board approved amendments to the "Provisions of the Articles of Incorporation," "Provisions of Regulations Governing Procedure for Board of Directors Meetings," "Provisions of the Organizational Charters of the Audit Committee," "Provisions of the Organizational Charters of the Salary and Remuneration Committee" and "Provisions of the Shareholder Meeting Rules of Procedures" on March 19, 2020; the "Internal Control of Shareholder Services" on May5, 2020, and the "Performance Appraisal of the Board of Directors" on November 3, 2020.

(1-2). Board of Directors’ Performance Evaluation Implementation Status

Evaluation Cycles	Evaluation Period	Evaluation Scope	Evaluation Method	Evaluation Aspects
The Company conducts the board performance evaluation once a year.	From January 1, 2020 to December 31, 2020	The scope includes the Board of Directors as a whole, the individual directors, and the Audit Committee.	Methods include internal assessment of the Board and self- assessments by each board member.	The Board of Directors are assessed on the following five aspects: 1. Involvement in the Company’s operation 2. Enhancement of the quality of the board’s decision-making 3. Makeup and structure of the board 4. Election of board members and continuing knowledge development 5. Internal controls The individual directors are assessed on the following six aspects: 1. Understanding of the Company’s goals and mission 2. Awareness of director’s duties 3. Involvement in the Company’s operations 4. Internal relationship and communication 5. Director’s professionalism and continuing knowledge development 6. Internal controls The Audit Committee is assessed on the following five aspects: 1. Involvement in the Company’s operation 2. Awareness of the audit committee’s duties 3. Enhancement of the quality of the audit committee’s decision-making 4. Makeup of the audit committee and election of its members 5. Internal controls

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(2). Audit committee meeting status

A total of 4 meetings were held in the most recent year, and below are the independent directors’ attendance records:

Position	Name	Attendance in Person (B)	Attendance Rate in Person (%) (B/A) (Note)	Remarks
Independent director	Hsu, Chang- Lung	4	100%
Independent director	Tang, Chao- Chin	4	100%
Independent director	Chang, Jo-Hu	4	100%
Other items to be stated: I. Where the operation of the Audit Committee meets any of the following circumstances, the minutes concerned shall clearly state the meeting date, term, contents of motions, opinions of all Audit Committee members and the Company’s resolution of said opinions: None. (I) Conditions described in Article 14-5 of the Securities and Exchange Act. (II) Except for the preceding conditions, other resolutions not approved by the Audit Committee but approved by two- thirds or more of the directors. II. For the recusals of independent directors due to conflicts of interests, the minutes shall clearly state the independent director’s name, contents of the motion, the reason for not voting and actual voting counts: None. III. Communication between independent directors and internal auditors and CPA (e.g. discussions concerning the Company’s financial and business affairs, the method of communication used, and the outcome): 1. The Company submits the audit status summary report in writing to the independent directors for their review quarterly. 2. The Company quarterly holds board meetings at which the audit supervisor reports on internal audit activities. 3. Audit supervisor, CPA and the independent directors may, from time to time, contact each other on a needed basis. The communication is smooth.

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(3). Corporate governance status, the difference(s) from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and reason(s) for such difference(s)

Assessment Item			Implementation Status	Difference(s) from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies and Reason(s) for Such Difference(s)
	Yes	No	Summary
I. Does the Company follow the “Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” to establishand discloseits corporate governance practices?		No	Not yet available.	Compliant.
II. Shareholding Structure & Shareholders’ Rights (I) Does the Company have internal operating procedures for handling shareholders’ suggestions, concerns, disputes and litigation matters. If yes, has these procedures been implemented accordingly? (II) Does the Company possess the list of major shareholders who actually control the Company and the beneficial owners of these major shareholders? (III) Has the Company built and executed a risk management system and “firewall” between the Company and its affiliates? (IV) Has the Company established internal rules prohibiting insider trading securities on undisclosed information?	Yes Yes Yes Yes		(I) The Company has a spokesperson and deputy spokesperson to deal with shareholders’ suggestions or disputes. (II) The Company controls bythe shareholder registry provided by Taiwan Depository & Clearing Corporation. (III) The Company has no affiliated companies. (IV) The Company has internal rules and strengthens the promotion with the relevant documents and information fromthe competent authorities.	(I) Compliant. (II) Compliant. (III) No affiliated companies. (IV) Compliant.
III. Composition and Responsibilities of the Board of Directors (I) Does the Company establish a diversification policy for the composition of its Board of Directors and has it been implemented practically? (II) Other than the Remuneration Committee and the Audit Committee which are required by law, does the Company set up other functional committees? (III) Does the Company establish a methodology for evaluating the performance of its board of directors, implemented it on an annual basis, and submit the evaluation result to the board meeting and use it as a reference for individual director's remuneration and nomination for reappointment? (IV) Does the Company regularly evaluate the CPAs’ independence?	Yes Yes	No No	(I) The Company has one female director and three independent directors. (II) The Company conducts it in accordance with the regulations of the competent authorities. (III)The Company has not yet formulated a board of directors'performance evaluation policy, but the administration department regularly reports the operating performance to the board of directors. (IV) The Company's CPAs are not related parties of the Company andmeet theindependencerequirement.	(I) Compliant. (II) Compliant. (III) Compliant. (IV) Compliant.
IV. Does a TWSE/TPEx listed company has a suitable and appropriate number of corporate governance personnel and designate a corporate governance officer to be responsible for corporate governance affairs (including but not limited to providing directors with the information needed to perform their duties, assist the directors with compliance, convention of board meetings and shareholder meetings, preparation of boardmeeting and shareholders’ meetingminutes, etc)?	Yes		The Company has established a position of head of governance in accordance with regulations.	Compliant.
V. Does the Company establish a means of communicating with its stakeholders (including but not limited to shareholders, employees, customers, suppliers, etc.) or created a Stakeholders Section on its Company website? Does the Company respond to stakeholders’ concerns on corporate social responsibilities?	Yes		The Company’scorporate website: www.wanhwa.com.tw. The Company has set up a stakeholder section on its website,and relevant information is announced on the Market Observation Post System (hereinafter referred to as MOPS) and the Company's website in accordance with the regulations to provide a good communication channel.	Compliant.
VI. Does the Company appoint a professional stock agent to handle its shareholders’ meeting affairs?		No	The Company conducts its stock and shareholders' meeting affairs on its own.	Compliant.
VII. Information Disclosure (I) Does the Company establish a corporate website to disclose information regarding its financials, business and corporate governance status? (II) Does the Company use other information disclosure channels (e.g. maintaining an English-language website, designating staff to handle information collection and disclosure, implementing the spokesperson system, webcasting investors conference etc.)? (III) Does the Company announce and file its annual financial statements within two months after the end of the fiscal year, and announce and file the first, second and third quarters and the monthly operating status in advance of the specified deadline?	Yes Yes Yes		(I) The Company’swebsite: www.wanhwa.com.tw. (II) The Company timely discloses relevant information on the MOPS andthe Company's website, and collects news reports and information from various parties in accordance with regulations. (III) The Company timely files the quarterly financial statements and operation status in accordance with the regulations.	(I) Compliant. (II) Compliant. (III) Compliant.
VIII. Does the Company disclose other information to facilitate a better understanding of its corporate governance practices (e.g. including but not limited to employee rights, employee wellness, investor relations, supplier relations, stakeholders' rights, directors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurancefordirectors)?	Yes		The Company, from time to time, understands the critical information of the corporate governance implementation status through various competent authorities and their websites.	Compliant.
IX. Describe the improvement status for the result of the Corporate Governance Evaluation announced by the Taiwan Stock Exchange and propose priorities and measures to enhance those that have not yet been improved. (Not required for those who are not listed in the evaluated companies): The Company operates in accordance with relevantregulations currently.

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(4). Describe the composition, duties and operations of the remuneration committee established by the Company, if any:

(i) Information about remuneration committee members

Position (Note 1)	Criteria Name	Has at Least Five Years of Relevant Working Experience and the Following ProfessionalQualifications	Has at Least Five Years of Relevant Working Experience and the Following ProfessionalQualifications	Has at Least Five Years of Relevant Working Experience and the Following ProfessionalQualifications			Independence Criteria	Independence Criteria	Independence Criteria	Independence Criteria	(Note 2)	(Note 2)			Number of Positions as a Remuneration Committee Member in Other Public Listed Companies	Remarks (Note 3)
		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 Specialists Who Has Passed a National Examination and Awarded a Certificate in a Profession Necessary for the Business of the Company	Have Work Experience in the Area of Commerce, Law, Finance, or Accounting, or Otherwise Necessary for the Business of the Company	1	2	3	4	5	6	7	8	9	10
Independent director	Tang, Chao-Chin			V	V		V	V	V	V	V	V	V	V	0
Independent director	Chang, Jo- Hu			V	V	V	V	V	V	V	V	V	V	V	0
Others	Chiang, Kuang- Hui			V	V	V	V	V	V	V	V	V	V	V	0

Note 1: Please specify director, independent director or others.

• Note 2: Members, during the two years before being elected and during the term of office, meet any of the following situations, please “ ✓ “ the appropriate corresponding boxes. （ 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 (the same does not apply, however, in cases where the person concurrently serves as an independent director of the Company, its parent company or subsidiaries, or affiliates under the same parent, as appointed in accordance with the Act or with 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 issued shares of the Company or ranks as one of its top ten shareholders.

• （ 4 ） Not a managerial officer listed in subparagraph (1), nor 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 subparagraphs (2) and (3)

• （ 5 ） Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of issued shares of the company or ranks as of its top five shareholders, or a corporate shareholder who appoints a representative to act as a director or supervisor of the Company in accordance with Article 27, Paragraph 1 or Paragraph 2 of the Company Act (the same does not apply, however, in cases where the person concurrently serves as an independent director of the Company, its parent company or subsidiaries, or affiliates under the same parent, as appointed in accordance with the Act or with local laws and regulations)

• （ 6 ） Not a director, supervisor, or employee of a company which controlled by the same person, by whom more than half of the directors or of voting shares of the Company are held, as the Company (the same does not apply, however, in cases where the person concurrently serves as an independent director of the Company, its parent company or subsidiaries, or affiliates under the same parent, as appointed in accordance with the Act or with local laws and regulations).

• （ 7 ） Not a director, supervisor or employee of another company or organization who is the same person as, or the spouse of, the Company's chairman, president or equivalent (the same does not apply, however, in cases where the person concurrently serves as an independent director of the Company, its parent company or subsidiaries, or affiliates under the same parent, as appointed in accordance with the Act or with 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 (the same does not apply, however, in cases where that specified company or institution holds 20% to 50% of the Company’s outstanding shares, and the person concurrently serves as an independent director of the Company, its parent company or subsidiaries, or affiliates under the same parent, as appointed in accordance with the Act or with local laws and regulations).

• （ 9 ） Not a professional individual, or an owner, partner, director, supervisor, managerial officer of a sole proprietorship, partnership, company or institution that provides the Company or its affiliates with auditing services, or commercial, legal, financial, accounting and other related services for which the cumulative amount of compensation received in the last two years did not exceed NT$500,000, or a spouse thereof. This excludes roles as remuneration, public acquisition or merger committee members appointed in accordance with the Securities and Exchange Act or Business Mergers And Acquisitions Act.

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

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• (ii) Remuneration Committee Meeting Status

• There are three members in the remuneration committee.

• The term of office of current members: August 6, 2018 to June 18, 2021. A total of 2 meetings were held in the most recent two years, and below are the members’ qualification and attendance records:

Position	Name	Attendance in Person	Attendance by Proxy	Attendance Rate in Person %	Remarks
Convener	Tang,Chao-Chin	2	0	100%
Member	Chiang, Kuang- Hui	2	0	100%
Member	Chang,Jo-Hu	2	0	100%
Other items to be stated: 1. If the board of directors does not adopt or amend the remuneration committee’s suggestions, please specify the meeting date, term, contents of motion, resolution of the board meeting, and the Company’s handling of the remuneration committee’s opinions (if the remuneration approved by the board of directors is superior than that suggested by the remuneration committee, please specify the deviation and reason(s)): None. 2. For resolution(s) made by the remuneration committee with the committee members have dissenting or qualified opinions on the record or in writing, please state the meeting date, term, contents of motion, opinions of all members and the company’s handlingof the said opinions: None.

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(5). Implementation of the corporate social responsibilities (CSR) and difference(s) from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies, and the reason(s) for such difference(s):

Companies, and thereason(s)forsuchdifference(s):
Assessment Item			ImplementationStatus	Difference(s) from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies, and the Reason for Such Difference(s)
	Yes	No	Summary
I. Does the Company conduct risk assessment on environmental, social and corporate governance issues related to its operations in accordance with the principle of materiality, and establish relevant risk management policies or strategies?(Note 3)		No	None	Compliant
II. Does the Company established a full- (or part-) time unit to promote corporate social responsibility, which is authorized by the board of directors to be handled by senior executives, and to report to the board of directors on the handlingof the situation?		No	None	Compliant
III. Environmental Issues (I) Does the Company establish environmental policies suitable for the Company’s industrial characteristics? (II) Does the Company endeavor to improve the utilization efficiency of various resources and use recycled materials with low impact on the environment? (III) Does the Company assess the potential risks and opportunities of climate change for now and the future and adopt countermeasures for climate change issues? (IV) Does the Company compile statistics on greenhouse gas emissions, water consumption and the total weight of waste for the past two years and formulated policies for energy saving and carbon reduction, greenhouse gas reduction, water use reduction or other waste management?	Yes Yes	No No	(I) With respect to promoting environmental protection, safety and hygiene activities, the Company not only complies with domestic laws and regulations related to environmental protection, safety and hygiene but also devotes itself to conserve energy. (II) The Company endeavors to environmental protection resources recycling and reuse to enhance the utilization efficiency of various resources to achieve the goal of waste reduction so as to reduce the impact on the environment. (III) The Company has not assessed the potential risks and opportunities of climate change for now and future. However, the Company understands that climate change may not only lead to natural disasters that directly affect the Company's daily operations, but may also lead to indirect effects such as higher raw material prices and even supply disruptions, and therefore actively pays attention to various energy-saving and carbon-reduction and greenhouse gas- reduction issues, as well as follows the relevant regulations. . (IV) The Company did not compile statistics on greenhouse gas emissions, water consumption and the total weight of waste for the past two years. However, the Company endeavors to promote the policies of conservation of water and electricity consumption and resource recycling to achieve energy saving and carbon reduction.	(I) Compliant. (II) Compliant. (III) Compliant. (IV) Compliant.
IV. Social Issues (I) Does the Company establish related management policies and procedures in accordance with the relevant laws and the International Bill of Human Rights? (II) Does the Company establish and implement reasonable employee benefit measures (including remuneration, leaves and other benefits) and adequately reflect its operating performance or result to the employee remuneration?	Yes Yes		(I) The Company complies with relevant laws and regulations and respects the internationally recognized basic labor rights principles. The appointment, dismissal, and remuneration of employees are managed according to the Company's internal control system to protect the basic rights of employees. (II) The Company has a sound mechanism and channel for employee grievances, which allows to understand and communicate level by level for timely handling.	(I) Compliant. (II) Compliant.

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Assessment Item	ImplementationStatus	ImplementationStatus	ImplementationStatus	Difference(s) from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies, and the Reason for Such Difference(s)
	Yes	No	Summary
(III) Does the Company provide employees with a safe and healthy working environment and conduct safety and health education for employees regularly? (IV) Does the Company establish effective career development training plans for employees? (V) With respect to customer health and safety, customer privacy, marketing and labeling of products and services, does the company comply with relevant laws and international standards and have a policy and complaint procedure to protect consumer rights? (VI) Does the Company formulate a vendor management policy that requires vendors to comply with relevant regulations on environmental protection, occupational safety and health or labor human rights issues, and how is it implemented?	Yes Yes Yes	No	(III) Only physically and mentally healthy employees can perform with high efficiency and quality in work. Therefore, the Company devotes to a safe and healthy working environment for the employees in accordance with relevant regulations. It also promotes physical and mental health and health education information. It develops employees' emergency response ability and safety concepts and cognitive ability through continuous education training and promotion so as to reduce the occurrence of accidents caused by unsafe behavior. (IV) Every year, The Company offers courses in various fields for the employees to attend. There were 50 hours in total for 2019. (V) Complies with relevant laws and regulations and international standards. (VI) Not applicable.	(III) Compliant. (IV) Compliant. (V) Compliant. (VI) Not applicable.
V. Does the company prepare any reports that disclose non-financial information about the Company with reference to international standards or guidelines, such as the Corporate Social Responsibility Report? Does the Company obtain a third-party verification or assurance opinion on the aforementioned reports?		No	Not applicable.	Not applicable.
VI. If the Company has established its own corporate social responsibility principles based on “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies.” Please describe their implementation and differences from theprinciples: None.
VII. Other significant information that is better to realize the implementation of CSR: None.

• (6). Business integrity and adopted measures of the Company: The Company implements the ethical management policies in accordance with the relevant regulations of the competent authorities and the Procedures for Ethical Management and Guidelines for Conduct and approved the formulation of a “Code of Ethical Conduct” in the board meeting on March 10, 2015 to actively prevent dishonest behavior.

• (7). Where the Company formulated the corporate governance principles and relevant rules, does it disclose the ways of inquiry: the Company established its corporate website in 2015 (www.wanhwa.com.tw). all corporate governance codes and relevant rules are disclosed in the MOPS and our corporate website.

(8). Other information material to the understanding of corporate governance within the Company: None.

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• (9). Implementation of ethical corporate management and the difference(s) from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and the reason(s) for such difference(s).

Assessment Item			Implementation Status	Difference(s) from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and the Reason for Such Difference(s)
	Yes	No	Summary
I. Formulate ethical management policies and programs (I) Does the Company formulate ethical management policies approved by the board of directors and specify the policies, measures and the board of directors and senior managements’ commitment on actively implementing the policies in the rules and external documents? (II) Does the Company establish a risk assessment mechanism for unethical conduct, assess the risks of unethical conduct within the business scope on a regular basis, and accordingly adopt programs to prevent unethical conduct, which at least include the prevention measures stipulated in Article 7, Paragraph 2 of the “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies”? (III) Does the Company stipulate proper procedures, behavioral guidelines, disciplinary actions and complaint systems in the programs to prevent unethical conduct, implement practically and regularly review and revise the said programs?	Yes Yes Yes		(I)The Company specifies in its rules and external documents that the ethical management policies are in compliance with relevant regulations, and the board of directors and senior management all have to abide by relevant regulations to implement the policies. (II)The Company strictly requires compliance with corporate ethics, upholds a corporate culture of integrity and honesty, and creates a sustainable development business environment. (III)The status of the Company's unethical conduct prevention programs and the procedures, behavior guidelines and education and training in the relevant programs are handled in accordance with regulations and internalcontroland otheroperating procedures.	(I) Compliant. (II) Compliant. (III) Compliant.
II. Implementation of ethical management (I) Does the Company assess a trading counterpart’s ethical management record and expressly states the ethical management clause in the contract to be signed with the trading counterpart? (II) Does the Company have a unit that specializes in business integrity, and this unit report regularly (at least once a year) to the board of directors on the ethic management policies and unethical conduct prevention programs and on the monitoring of their implementation? (III) Does the Company formulate any policy against conflict of interest, provide adequate channel thereof, and implement it practically? (IV) Does the Company implement ethical management by establishing an effective accounting system and internal control system, and have an internal audit unit to plan and conduct periodic audits on the compliance status of the programs that prevent the unethical conduct according to the unethical conduct risk assessment result, or appoint a CPA to perform the audit? (V) Does the Company organize internal/external education training programs for ethical management regularly?	Yes Yes Yes Yes Yes		(I) The Company, in accordance with relevant rules and upholding the ethical principles, assesses a trading counterpart’s ethical management record prior to establishing trading relationships. (II) The promotion and audit on corporate ethic management of the Company are handled by the audit department, which also makes relevant reports in the board meetings. (III) In accordance with the internal control procedures and related regulations, the Company's audit department performs the prevention of conflict of interest and provides reporting channels. (IV) The Company operates in accordance with the established accounting system and internal control system and is audited by internal auditors in accordance with the rules. (V) Whenever there is an external training of ethical management, the Company would arrange personnel to attend. It would often promote ethical management internallyas well.	(I) Compliant. (II) Compliant. (III) Compliant. (IV) Compliant. (V) Compliant.
III. Status of the Company’s complaint system (I)Does the Company establishspecific complaint andreward procedures, set	Yes		(I)The Company appoints the chief internalauditoras the complaint	(I) Compliant.

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Assessment Item	Assessment Item	Assessment Item	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Difference(s) from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, and the Reason for Such Difference(s)
			Yes	No	Summary
up conveniently accessible complaint channels, and designate responsible individuals to handle the complaint received? (II) Does the Company establish standard operating procedures for investigating the complaints received and ensuring such complaints are handled confidentially? (III) Does the Company adopt proper measures to prevent a complainant from retaliation for his/her filing a complaint?			Yes Yes		channel, and the complaint matters are evaluated and sent to the Company's regular supervisory meeting for discussion and handling. (II) The Company handles in accordance with relevant rules. (III) The Company handles in accordance with relevant rules.			(II) Compliant. (III) Compliant.
IV. Strengthen the Information Disclosure Does the Company disclose the established ethical management principles as wellasitsimplementationstatus onthe corporate website andMOPS?			Yes		The Company discloses ethical management related information on MOPS inaccordance with relevantregulations.			Compliant.
V. If the Company has established its own ethical management principles based on “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies,” please describe their implementation and differences from theprinciples: None.
VI. Other important information to facilitate a better understanding of the company’s corporate conduct and ethics compliance practices (e.g., review the company’s corporate conduct and ethics policy): None.
(10). Summary of resignation or dismissal of personnel:							Reason for Resignation or Termination No concurrent position as the principal financial officer
Title	Name	Starting date				Termination date	Reason for Resignation or Termination
Vice president and principal financial officer	Huang, Shih-Yu	2006.02.27				2020.8.31	No concurrent position as the principal financial officer

Note: The interested persons of the Company refer to the chairman, president, principal accounting officer, principal financial officer, chief internal auditor, and principal research and development officer.

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(11). Items that shall be disclosed with respect to the implementation of internal control system:

• (i) Statement on internal control

Wan Hwa Enterprise Company Ltd. Statement on Internal Control

March 23, 2021

Based on the findings of a self-assessment, the Company states the following with regard to its internal control system during the year of 2020:

• I. The Company’s board and management are responsible for establishing, implementing and maintaining a proper internal control system. Our internal control is a process designed to provide reasonable assurance over the effectiveness and efficiency of our operations (including profitability, performance and safeguarding of assets), reliability of our financial repor ting and compliance with applicable laws and regulations.

• II. An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing its stated objectives. Moreover, the effectiveness of an internal control system may be subject to changes due to extenuating circumstances beyond our control. Nevertheless, our internal control system contains self-monitoring mechanisms, and we take immediate remedial actions in response to any identified deficiencies.

• III. We evaluate the design and operating effectiveness of the internal control system based on the criteria provided in the Regulations Governing Establishment of Internal Control Systems by Public Companies (herein blow, the “Regulations”). The criteria adopted by the Regulations identify five key components of managerial internal control: 1. Control environment. 2. Risk assessment. 3. Control activities. 4. Information and communication. 5. Monitoring. E ach component has its own items. Please see the Regulations for details.

• IV. We have evaluated the design and operating effectiveness of our internal control system according to the aforementioned Regulations.

• V. Based on the findings of such evaluation, we believe that on December 31, 2020, it has maintained, in all material respects an effective internal control system to provide reasonable assurance over our operational effectiveness and efficiency, reliability of financial reporting and compliance with applicable laws and regulations.

• VI. This Statement will be an integral part of the Company’s annual report, and will be made public. Any falsehood, concealment or other illegality in the content made public will entail legal liability under Article 20, 32, 171 and 174 of the Securities and Exchange Act.

• VII. This Statement has been approved by the board in the meeting held on March 23, 2021, with none of the five attending directors expressing dissenting opinions, and the remainder all affirming the content of this Statement.

Wan Hwa Enterprise Company Ltd.

Chairman: Mao-Chang Tsai. Signature

President: Ya-Chen Wu Signature

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• (ii) Where a CPA has been hired to carry out a special audit of the internal control system, furnish the CPA audit report: None.

• (12). If there has been any legal penalty against the company or its internal personnel, or any disciplinary penalty by the company against its internal personnel for violation of the internal control system during the most recent fiscal year or during the current fiscal year up to the publication date of the annual report, where the result of such penalty could have a material effect on shareholder equity or securities prices, the annual report shall disclose the penalty, the main shortcomings, and condition of improvement: None.

• (13). Material resolutions of a shareholders meeting or board of directors meeting during the most recent fiscal year or the current fiscal year up to the date of publication of the annual report.

• (I) Shareholder meeting

Date: 2020/06/10

Key resolutions and their implementation:

• (1) Ratification of 2019 year-end report. (in accordance with the rules)

• (2) Ratification of 2019 profit distribution. (in accordance with the rules)

• (3) Approved 2019 profit distribution in cash dividends. (Has been announced on the Market Observation Post System, and released starting October 5, 2020)

• (4) Approved amendment of some provisions of the Articles of Incorporation (Information has been sent to the Market Observation Post System and placed on the Company's website)

• (5) Approval of the amendments to provisions of the Shareholder Meeting Rules of Procedures. (Information has been sent to the Market Observation Post System and placed on the Company's website)

• (II) Board of directors

Date: 2020/03/19

Important resolutions:

• (1) Approved distribution of employee compensation and director compensation for 2019. (in accordance with the rules)

• (2) Ratification of 2019 year-end report. (Has been submitted to the 2020 shareholders’ meeting for ratification)

• (3) Ratification of the 2019 Statement on Internal Control. (Information has been sent to the Market Observation Post System)

• (4) Ratification of 2019 profit distribution. (Has been submitted to the 2020 shareholders’ meeting for ratification)

• (5) Approved amendment of some provisions of the Articles of Incorporation (Has been submitted to the 2020 shareholders’ meeting for approval)

• (6) Approval of the amendments to provisions of the Board Meeting Rules of Procedures. (Information has been sent to the Market Observation Post System)

• (7) Approval of the amendments to provisions of the Audit Committee Charter. (Information has been sent to the Market Observation Post System)

• (8) Approval of the amendments to provisions of the Remuneration Committee Organizational Charter. (Information has been sent to the Market Observation Post System)

• (9) Approval of the amendments to provisions of the Shareholder Meeting Rules of Procedures. (Information has been sent to the Market Observation Post System)

• (10) Determine the date, place and agenda of the 2020 AGM. (Has been submitted to the 2020 AGM)

• (III) Board of directors

Date: 2020/05/05

Important resolutions:

• (1) Discussion of the Q1 2020 financial statements.

• (2) Approved amendment to the internal control of shareholder services. (in accordance with the rules)

• (IV) Board of directors

Date: 2020/08/04

• (1) Discussion of the Q2 2020 financial statements.

• (2) Set the dividend record date and ex-dividend date. (Has been announced on the Market Observation Post System, and released)

• (3) Approved the change of principal financial officer. (Information has been sent to the Market Observation Post System)

• (V) Board of directors

Date: 2020/11/03

Important resolutions:

• (1) Discussion of the Q3 2020 financial statements.

• (2) Approved the 2021 annual audit plan. (Been implemented by the audit department in accordance with the plan)

• (3) Approved to adjust the amounts of pay grades for employees. (Implemented by the salary and remuneration committee in accordance with the regulations of the Ministry of Labor)

• (4) Approval of the establishment of the Performance Appraisal of the Board of Directors. (Information has been sent to the Market Observation Post System)

• (VI) Board of directors

Date: 2021/03/23 Important resolutions:

• (1) Approved distribution of employee compensation and director compensation for 2020. (in accordance with the rules)

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• (2) Ratification of 2020 year-end report. (Has been submitted to the 2021 shareholders’ meeting for ratification)

• (3) Ratification of the 2020 Statement on Internal Control. (Information has been sent to the Market Observation Post System)

• (4) Ratification of 2020 profit distribution. (Has been submitted to the 2021 shareholders’ meeting for ratification)

• (5) Approval of the amendments to provisions of the Shareholder Meeting Rules of Procedures. (To be submitted to the 2021 shareholders’ meeting for approval)

• (6) Approval of the amendments to provisions of the Remuneration Committee Organizational Charter. (in accordance with the rules)

• (7) Approved the re-election of directors. (Propose re-election at the 2021 shareholders’ meeting)

• (8) Approved to lift restrictions on the non-compete clause of the board of directors. (To be submitted to the 2021 shareholders’ meeting for approval)

• (9) Approved to propose nomination of two director and three independent director nominees of the Company. (Propose re-election at the 2021 shareholders’ meeting)

• (10) Approved the routine change of CPAs in accordance with regulations. (in accordance with the rules)

• (11) Determine the date, place and agenda of the 2021 AGM. (Has been submitted to the 2021 AGM)

• (14). Where, during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, a director has expressed a dissenting opinion with respect to a material resolution passed by the board of directors, and said dissenting opinion had been recorded or prepared as a written declaration, disclose the principal content thereof: None.

• (15). A summary of resignations and dismissals, during the most recent fiscal year or the current fiscal year up to the date of publication of the annual report, of the Company's chairman, president, chief accounting officer, chief finance officer, chief internal auditor, chief corporate governance officer, and chief research and development officer:

Title	Name	Starting date	Termination date	Reason for Resignation or Termination
Vice president and principal financialofficer	Huang, Shih-Yu	2006.02.27	2020.8.31	No concurrent position as the principal financialofficer

4. Professional Fees to CPA:

	AccountingFirm	AccountingFirm	Name of CPA	Name of CPA	CPA’s Audit Period	CPA’s Audit Period		Remark
	Deloitte & Touche		Hsu-Jan Cheng		01/01/2020 - 12/31/2020
			Tung-Ju Hsieh
	Item of Professional Fee Range of Amount			Audit Fee		Non-audit Fee		Total
	1	Under NT$2,000 thousand
	2	NT$2,000 thousand (inclusive) ~ NT$4,000 thousand		2,142		-		2,142
	3	NT$4,000 thousand (inclusive) ~ NT$6,000 thousand
	4	NT$6,000 thousand (inclusive) ~ NT$8,000 thousand
	5	NT$8,000 thousand (inclusive) ~ NT$10,000 thousand
	6	NT$10,000 thousand and above

1. Where non-audit fees paid to the CPA, the accounting firm of the CPA, and/or any of its affiliated enterprise are one quarter or more of the audit fees paid thereto, the amounts of both audit and non-audit fees, as well as details of non-audit services, shall be disclosed: None.

2. Where the Company changes the accounting firm and the audit fees paid for the fiscal year in which such change took place are lower than those for the previous fiscal year, the amounts of the audit fees before and after the change and the reason(s) shall be disclosed: None.

3. Where the audit fees paid for the current fiscal year are lower than those for the previous fiscal year by 10% or more, the reduction in the amount of audit fees, reduction percentage, and reason(s) therefor shall be disclosed: None.

5. Information of CPA replacement: Not Applicable.

1. Where the Company’s Chairman, President, Managerial Officers in Charge of Financial or Accounting Affairs Having Served with the CPA Firm or the Affiliates Thereof over the Past Year, It Shall Disclose Name, Position and the Duration of those Served with the CPA Firm: None.

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1. Facts of Equity Transfer and Change in Equity Pledge by the Directors, Managerial Officers, and Shareholders with 10% Shareholdings in the Most Recent Year up to the Publication of this Annual Report:

Net Change in Shareholding by Directors, Management and Major Shareholders

	Position (Note 1)	Name	Name	Name	Name	2020	2020	2020	2020	2020	CurrentYearup to	CurrentYearup to	CurrentYearup to	CurrentYearup to
						Increase (Decrease) inShareholding		Increase (Decrease) inSharesPledged			Increase (Decrease) in Shareholding		Increase (Decrease) in SharesPledged
	Chairman	Today's Department Store Company Ltd. Representative:Tsai,Mao-Chang				0 0		0 0			0 0		0 0
	Director	Te-Jung Hsu Foundation Representative: Wu,Ya-Chen				0 0		0 0			0 0		0 0
	Independent director	Hsu, Chang-Lung				0		0			0		0
	Independent director	Tang, Chao-Chin				0		0			0		0
	Independent director	Chang, Jo-Hu				0		0			0		0
	President	Wu,Ya-Chen				0		0			0		0
	Vice President	Huang, Shih-Yu				0		0			0		0
	Major Shareholder	First Hotel Taipei				0		0			0		0
	Major Shareholder	Zen Fong Investment Corporation				0		0			0		0
	Name (Note 1)		Shareholding		Spouse & Minor Shareholding				Shareholding in the Name of Others			Name(s) of and Relationship among the Company's 10 Largest Shareholders where any One is a Related Party, Spouse or a Relative within the Second Degree of Kinship of another. (Note 3)		Remarks
			Shares	Shareholding ratio	Shares		Shareholding ratio		Shares	Shareholding ratio		Name	Relation
	Today's Department Store Company Ltd. Representative: Chiang, Kuang-Hsia		89,809,699	19.96	None		None		None	None		None	None	None
	Representative of First Hotel Co., Ltd.: Ku, An- Sheng		89,809,699	19.96	None		None		None	None		None	None	None
	Representative of Zen Fong Investment Corporation: Chen, Mei- Chen		52,258,768	11.61	None		None		None	None		None	None	None
	Representative of Lee Ming Investment Corporation:Hsu,Li-Chu		39,503,789	8.78	None		None		None	None		None	None	None
	Representative of Mandarin Investment Corporation: Cheng, Chien-Chung		21,667,790	4.82	None		None		None	None		None	None	None
	Representative of Carnival Investment Corporation: Ni, Ssu-Wei		19,801,196	4.40	None		None		None	None		None	None	None
	Su, Kun-Yu		13,219,000	3.00	None		None		None	None		None	None	None
	Representative of Zenith Investment Corporation: Lin,Tsung-Ming		12,398,779	2.75	None		None		None	None		None	None	None
	Kusen International Co., Ltd. Representative: Lin, Chia- Chih		11,313,000	2.51	None		None		None	None		None	None	None

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Name (Note 1)	Shareholding	Shareholding	Spouse & Minor Shareholding	Spouse & Minor Shareholding	Shareholding in the Name of Others	Shareholding in the Name of Others	Name(s) of and Relationship among the Company's 10 Largest Shareholders where any One is a Related Party, Spouse or a Relative within the Second Degree of Kinship of another. (Note 3)	Name(s) of and Relationship among the Company's 10 Largest Shareholders where any One is a Related Party, Spouse or a Relative within the Second Degree of Kinship of another. (Note 3)	Remarks
	Shares	Shareholding ratio	Shares	Shareholding ratio	Shares	Shareholding ratio	Name	Relation
Representative of Wiseman Investment Corporation: Chen, Tsung- Tse	6,617,573	1.47	None	None	None	None	None	None	None

Note 1: All top ten shareholders should be enumerated in full. In case of juristic person shareholders, the names of all such juristic person shareholders and their representatives should be enumerated respectively.

Note 2: The shareholding ratios should be calculated based on the own names, names of spouses, minor children respectively.

Note 3: On the aforementioned shareholders, including juristic persons and natural persons, the relationship among them shall be disclosed.

1. Shares of Invested Businesses Jointly Held by the Company, Its Directors, Managerial Officers, and Enterprises Directly or Indirectly Controlled by the Company and Shareholding Ratio in Aggregate of the Above Parties:

					December 31, 2020. Unit: Shares.	December 31, 2020. Unit: Shares.
Invested Enterprise	Held by the	Company	Held by Directors, Managerial Officers, and Directly/ Indirectly Controlled Businesses		Total Investment
	Shares	Shareholding Ratio	Shares	Shares Ratio	Shares	Shares Ratio
Today's Hotel Corporation and Subsidiaries (Note)	10,200,000	30.36	-	-	10,200,000	30.36
Wan Hwa International Investment Co., Ltd (Note)	497,347	49.87	-	-	497,347	49.87

Note: Investments accounted for using the equity method.

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IV. Capital Overview

1. Capital and Shares

(1). Capital source

Year/ Month	Issue Price	Registered capital	Registered capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks	Remarks
		Shares	Amount	Shares	Amount	Capital Source	Capital Increase by Assets Other than Cash	Others
2018/9	10	450,000,000	4,500,000,000	449,967,838	4,499,678,380	Capitalization of retained earnings for NT$111,888,630.	None

Note: September 17, 2018 Letter No. Economic-Authorized-Commerce10701116690

Share Type

Share Type
Share Type	Registered capital			Remarks
Common Stock	Outstanding Shares (Note)	Unissued Shares	Total
	449,967,838	32,162	450,000,000

Note: Listed stocks.

(2). Shareholder structure

2021.04.25

Shareholder Structure Quantity	Governm ent Agencies	Financial institution	Other Juristic Persons	Domestic Natural Persons	Foreign Institutions and Natural Persons	Total
Number of Shareholders	4	11	37	29,289	40	29,381
No. of Shares Held	403	982,774	354,405,103	91,083,734	3,495,824	449,967,838
Shares Ratio	-	0.22%	78.76%	20.24%	0.78%	100%

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(3). Distribution profile of share ownership

			2021.04.25
Shareholding Levels	Number of Shareholders	No. of shares held	Shareholding Ratio (%)
1~ 999 1,000~ 5,000 5,001~ 10,000 10,001~ 15,000 15,001~ 20,000 20,001~ 30,000 30,001~ 40,000 40,001~ 50,000 50,001~ 100,000 100,001~ 200,000 200,001~ 400,000 400,001~ 600,000 600,001~ 800,000 800,001~ 1,000,000 Over 1,000,001	21,469 5,603 1,218 358 188 187 94 50 90 60 30 7 3 4 20	5,198,666 11,789,334 8,273,369 4,366,360 3,298,972 4,610,467 3,258,507 2,310,891 6,341,081 8,137,992 8,071,652 3,334,421 2,075,091 3,482,990 375,418,045	1.16 2.62 1.84 0.97 0.73 1.03 0.73 0.51 1,41 1.81 1.79 0.79 0.46 0.77 83.43
Total	29,381	449,967,837	100.00

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(4). List of major shareholders

2021.04.25

(4). List of major shareholders		2021.04.25
Share Name of major shareholder	No. of shares held	Shares Ratio
Today's Department Store CompanyLtd.	89,809,699	19.96
First Hotel Co.,Ltd.	89,809,699	19.96
Zen FongInvestment Corporation	52,258,768	11.61
Lee MingInvestment Corporation	39,503,789	8.78
Mandarin Investment Corporation	21,667,790	4.82
Carnival Investment Corporation	19,801,196	4.40
Su,Kun-Yu	13,219,000	3.00
Zenith Investment Corporation	12,398,779	2.75
Kusen International Co.,Ltd.	10,458,000	2.32
Wiseman Investment Corporation	6,617,573	1.47

(5). Share prices for the past 2 fiscal years, together with the Company's net worth per share, earnings per share, dividends per share, and related information.

Unit: NT$

					Unit: NT$
Item	Year		2020	2019	As of March 31, 2021(Note 8)
Market Price Per Share (Note 1)	Highest		13.45	13.70	12.35
	Lowest		9.92	12.60	11.65
	Average		12.07	13.06	11.95
Net Worth Per Share(Note 2)	Before Distribution		16.74	17.34	-
	After Distribution			16.94	-
Earnings per Share (Note 3)	Weighted Average		449,967,838	449,967,838	449,967,838
	Earnings per Share		0.38	0.89	0.10
Dividends Per Share	Cash dividends		0.25(Note9)	0.40	-
	Stock Dividend	From Retained Earnings	-	-	-
		From Capital Surplus	-	-	-
	Accumulated Unpaid Dividend (Note 4)		-	-	-
ROI Analysis	Price/Earnings Ratio(Note 5)		30.95	14.67	-
	Price/Dividend Ratio(Note 6)		48.28(Note 9)	32.65	-
	Cash Dividend Yield(Note 7)		0.02(Note 9)	0.03	-
＊If shares are distributed in connection with a capital increase out of earnings or capital r

Note 1: List the market share prices, including the highest, lowest and average for the year. The average market share price should be calculated by applying the turnover value and the total turnover volume for the year.

Note 2: Please use the number of the issuing shares in the year-end as the base with the distribution decision resolved at the shareholders’ meeting held in the following year.

Note 3: For retroactive adjustment made for stock dividends, both before and adjustments earnings per share

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should be disclosed.

• Note 4: For securities issued with terms that entitle the holder to accumulate the unpaid dividend during the current year, for receiving in an earnings-generating fiscal year, the accumulated unpaid amount shall also be disclosed.

• Note 5: Price/Earnings Ratio = average share market price / earnings per share. Note 6: Price/Dividend Ratio = average market price / cash dividends per share. Note 7: Cash Dividend Yield = cash dividends per share / average share market price. Note 8: Net worth per share and earnings per share shall be filled in with the data audited (reviewed) by CPAs as of the most recent quarter; the remaining fields shall be filled in with the data of the current year up to the publication date of this annual report.

• Note 9: Earnings distribution of 2020 is pending for the resolution of 2019 shareholders meeting.

(6). The Company’s dividend policy and implementation

• (i) Dividend Policy Adopted in the Company's Articles of Incorporation Article 26-1: Where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit (however, provided the legal reserve has reached the amount of the Company's paid-in capital, this may not apply), setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution of dividends and bonus to shareholders.

  • The Company is a stable and growing company. In order to meet the operational development plan and achieve the goal of the diversified operation, and to consider the Company's future capital needs and long-term financial planning, incase shareholder dividend is distributed, the cash dividend portion should be no less than 10% of the shareholder dividend distributed that year.

• (ii) Dividends Distribution Status

• The Company's board proposed the 2020 profit distribution plan shown as follows:

  • Cash dividends: Proposed to distribute NT$112,491,960. Based on the 449,967,838 outstanding shares, NT$0.25 per share will be distributed. Upon the approval of the 2021 general shareholders’ meeting, the board of directors is authorized to set the "ex-dividends date" and announce it by law.

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2020 Earnings Distribution Table

Undistributed earnings - beginning Net profit of 2020 Remeasurements of defined benefit plan recognized in retained earnings Net profits for the period plus the items other than net profits for the period included in unappropriated earnings for the year Provision of legal reserve ( 10%) Distributable earnings for the period Distribution items: Dividends to shareholders Cash dividends - NT$ 0.25 per share Undistributed earnings at the end of the period	174,120,247 233,484 (112,491,960)	1,039,936,123
		174,353,731 (17,435,373)
		1,196,854,481 (112,491,960)
		1,084,362,521

Note: 1. The proposed distribution in this table for 2020 will be effective upon approval at the 2021 annual shareholders’ meeting.

1. The registration is subject to the regulations of the Ministry of Economic Affairs.

2. (iii) The impact of bonus shares proposed by the shareholders' meeting on the Company's operating performance and earnings per share: Not applicable. The Company does not have bonus shares for 2020.

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• (iv) Remuneration of Employees and Directors

• The percentages or ranges with respect to employee and director compensation, as set forth in the Company's Articles of Incorporation. Article 26: Where the Company made a profit in a fiscal year, it shall set aside NT$ 1 million as remuneration of employees; the Company may set aside up to 3% of the said profit as remuneration of directors; the aforementioned remuneration of employees and directors shall be resolved by the board meeting and submitted to the shareholders meeting. However, the Company’s accumulated losses shall have been covered prior to setting aside remuneration of employees and directors in accordance with the previous paragraph.

• Remuneration distribution approved by the Board:

  • (1) NT$1 million for employee remuneration and NT$3.72 million (1.74% of profit) for director remuneration are distributed in accordance with the Company's Articles of Incorporation, all paid in cash.

• (2) Number of shares as stock dividends for employees and the its percentage of the recapitalization of profit: None

• The distribution of employees and directors, supervisor remuneration for the previous fiscal year: The 2019 NT$1 million for employee remuneration and NT$3.72 million for director remuneration actually paid in 2020 were consistent with the amount originally approved by the board.

• (v) Buyback of Common Stock: None.

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1. Issuance of Corporate Bonds:[None]

2. Issuance of Preferred Shares:[None]

3. Issuance of Global Depositary Receipts:[None]

4. Issuance of Employee Share Subscription Warrants:[None]

5. Merger and Acquisitions or Transfers of Other Company’s Newly Issued Shares:[None]

6. Implementation of the Capital Utilization Plan:

7. (1) Description of the plans: With respect to each uncompleted public issue or private placement of securities, or to such issues and placements that were completed in the most recent 3 years but have not yet fully yielded the planned benefits: (None).

8. (2) Implementation Status: (Not Applicable)

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V. Operational Highlights

1. Business Activities

• (1). Business scope

Core businesses and their proportion of the overall business:

The Company mainly engages in leasing, movies and entertainment businesses.

The lease income was NT$186,054 thousand, accounting for 70% of the operating income, and income of education and recreation (movies and amusement) was $78,637 thousand, accounting for 30% of operating income.

• (2). Industry highlights

A listing of the Company's research and development expenditures, as well as technologies and/or products, successfully developed during the current fiscal year up to the date of publication of the annual report, and an overview of the research and development plan for the coming year. [None]

• (3). R&D highlights: (None)

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

• (i) Short-term: Expiring lease contracts will have renewal or new tenants. In terms of education and entertainment, improvements will be made to amusement facilities. (ii) Long-term: Diversify domestic investment and seek investment opportunities overseas.

2. Market and Production Overview:

• (1). Market analysis:

• (i) Leases:

The Company’s Wan Hwa Enterprise Building on the Zhonghua Road is on a leisurely and cozy street, faces a wide and clean boulevard, and is located at the exit of the MRT station and a few minutes' drive from the Taipei Main Station, which is convenient for transportation. This sky blue building stands among the high-end commercial buildings in the heart of Zhonghua Road business district, has great potential. Current rental targets are business hotels, restaurants and supermarkets.

Another building of the Company is Wanhwa Education and Recreation Building which is located on Emei Street in Ximending. Being a longestablished and new recreational area, Ximending has always been a

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center of recreation and shopping for young people, with visitors from all over the world. This building shares the prosperity with the development of Ximending. Current rental targets are commercial complexes and restaurants.

• (ii) Recreational activities (cinema and amusement park)

In addition to the Company, there are several cinemas in Ximending, such as the Ambassador, in89 Digital, LUX, and Cinemark, all of which provide excellent services with digital projection equipment and quality audio and video effects.

Since Ximending is mainly a leisure activity area for young people, there are mostly small-scale amusement parks with motorized rides. Amusement parks with larger scale are the Company, Wannian Mansion, and Cinemark Building, but only the Company has a baseball batting cage and a shooting gallery.

• (2). Main businesses

• (i) Leasing:Lease out the commercial complex to department stores, bookstores, restaurants, supermarkets, business hotels, etc.

• (ii) Recreation: Amusement park located on the 8th floor and roof of the Education and Recreation Building on Emei Street, including motorized rides, sports and educational activities.

• (iii) Cinema:Today’s Showtime Cinema located on the 4th, 6th and 8th floors of the Education and Recreation Building on Emei Street.

• (3). Supply situation for major raw materials. [None]

• (4). A list of major suppliers and clients of the Company in either of the two most recent fiscal years, the amounts bought from (sold to) each, the percentage of total procurement (sales) accounted for by each. [None]

• (5). An indication of the production volume for the two most recent fiscal years. [The Company is in the service industry with no production value]

• (6). An indication of the sales volume for the two most recent fiscal years.

• (i) In 2020, the lease income was NT$186,054 thousand, accounting for 70% of the operating income, and income of education and recreation (movies and amusement) was $78,637 thousand, accounting for 30% of operating income.

• (ii) In 2019, the lease income was NT$209,368 thousand, accounting for 60.07% of the operating income, and income of education and recreation (movies and amusement) was $139,183 thousand, accounting for 39.93% of operating income.

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3. Employee Profile of the Most Recent Two Years up to the Publication of this Annual Report

	Year	2020	2019	As of March 31, 2021 (Note)
Number of Employees	Managerial Personnel	5	4	5
	Technical Personnel	2	3	2
	Service Personnel	11	13	11
	Total	18	20	18
	Average Age	51	46	51
Average Years of Services		15	12	15
Highest Education Attainment	Doctorate	0	0	0
	Master	0	0	0
	Bachelor	11	11	11
	High School	7	9	7
	Below High School	0	0	0

Note: Fill in the information of the current year up to the publication date of this annual report.

4. Environment Cost

Description: The Company is in the tourism and recreation industry. In order to comply with the government's measures to promote “energy saving and carbon reduction,” the Company asks employees and tenants to turn off the power or water that is not needed at all times. It also asks the tenants to cooperate by keeping the temperature in the public areas at approximately 26°C and by adjusting the number of elevators open for use depending on the number of people on weekdays and holidays in order to save electricity. The Company has always attached great importance to environmental protection measures and has not suffered any losses due to environmental pollution in recent years.

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1. Labor-Management Relationship

2. (1).Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests:

3. (i)Employees of the Company are provided with labor and national health insurance coverage and retirement pension. For the pension based on the Labor Standards Act, the Company appropriates 2% of the total monthly wages of employees and deposits such amount in a designated account for pension reserve fund with Bank of Taiwan; for the pension based on the Labor Pension Act, the Company appropriates 6% of the total monthly wages of employees as their pension fund.

4. (ii)In 2020, the Company’s employees attended a total of 59 hours of training and refresher courses organized by the Securities and Futures Institute of the Republic of China.

5. (iii)Status of labor-management agreements: The Company has harmonious labor-management relations.

6. (2).In view of the importance of the working environment and employee safety protection measures, our company maintains the fire protection, public facilities and equipment in the workplace on a regular basis and conducts building safety and fire protection inspections in accordance with the regulations of the competent authorities. The Company also arranges for relevant managerial officers to attend the class C safety and health education and training specified for supervisors in charge of occupational safety and health held by the China Productivity Center and obtain a certificate of completion.

7. (3).For personnel related to the transparency of financial information, the status of obtaining the relevant licenses designated by the competent authority: None.

8. (4).List any losses suffered by the company in the most recent fiscal years and up to the annual report publication date due to labor disputes and disclose an estimate of possible expenses that could be incurred currently and in the future and countermeasures being or to be taken: The Company has always had a sound system and related benefits (labor insurance and national health insurance) for employees, so the labor-management relationship remains good. Everything is conducted in accordance with laws and regulations, so that both the Company and employees surely are able to cooperate harmoniously.

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6. Important Contracts

(1). Lease contracts

Subject of Lease	Lessee	Lease term	Remarks	Restriction Clause
Ground floor, 1st to 3rd floor and 3A floor of the Education and Recreation Building, Emei Street, Taipei	Eslite Spectrum Corporation	2010.11.01~2024.08.31	All plus a 5% maintenance fee	None
Part of the 5th to 6th floor of the Education and Recreation Building,Emei Street,Taipei	Flower Lounge Restaurant Co Ltd	2012.01.01~2021.12.31		None
7th floor of the Education and Recreation Building, Emei Street,Taipei,	Ming Heng Limited	2019.06.01~2024.08.31		None
10th to 14th floor of the Wanhwa Enterprise Building,Zhonghua Road,Taipei	Green World Zhonghua Hotel Co.,Ltd.	2013.07.20~2027.07.19		None
3rd floor of the Wanhwa Enterprise Building, Zhonghua Road,Taipei	Green World Zhonghua Hotel Co.,Ltd.	2016.07.20~2027.07.19		None
2nd floor of the Wanhwa Enterprise Building, Zhonghua Road,Taipei	Green World Hotels Co., Ltd.	2019.11.20~2027.7.19		None
5th to 9th floor of the Wanhwa Enterprise Building, Zhonghua Road,Taipei	Formosa International Hotels Corporation	2009.04.20~2027.04.19		None
4th floor of the Wanhwa Enterprise Building, Zhonghua Road,Taipei	Elta Technology Co., Ltd.	2014.09.01~114.08.31		None
Part of the 1st floor of the Wanhwa Enterprise Building,Zhonghua Road,Taipei	President Chain Store Corporation	2015.02.15~2027.02.14		None
Other part of the 1st floor of the Wanhwa Enterprise Building,Zhonghua Road,Taipei	Sushiro Taiwan Co., Ltd.	2018.05.13~2024.07.27		None

(2). Contracts of the movie screening schedule

Cinema	SchedulingCompany	Term	Remarks(Personnel Administration)
4th, 6th and 8th floors of Today’s Showtime Cinema	Showtime Cinemas Inc.	2018.9.1~2024.8.31	The staff inside and outside the cinema are in charge of the scheduling company

(3). Contract for rental of recreational equipment

The Company's amusement park is set up by a well-known amusement equipment manufacturer, which places various kinds of motorized rides in our amusement park through revenue sharing. That manufacturer is responsible for onsite personnel administration and safety:

Equipment Manufacturer	Content	Term	Remarks
Tian Ding Limited	Motorized amusement park	2018.5.1~2024.4.30	That manufacturer is responsible for onsite management personnel.

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VI. Financial Information

1. Condensed Balance Sheet and comprehensive Income Statement

(1) Condensed Balance Sheet

Year Item	Year Item		Financial Data within the last 5 years	Financial Data within the last 5 years	Financial Data within the last 5 years		Financial data up to March 31, 2021 (Note2)
		2020	2019	2018	2017	2016
Current asset		1,527,565	1,499,937	1,444,999	1,330,545	1,217,244	1,572,163
Property, plant and equipment		350,906	353,059	356,253	360,095	364,094	350,307
Realestateinvestments		1,341,352	1,347,071	1,353,062	1,359,433	1,365,826	1,340,223
Intangible assets		-	-	-	-	-	-
Other assets		5,560,301	5,853,830	5,446,718	5,076,106	4,954,168	5,520,480
Totalassets		8,780,124	9,053,897	8,601,032	8,126,179	7,901,332	8,783,173
Current liability	Before distribution	144,242	141,651	141,971	116,753	107,341	155,125
	After distribution	(Note 3)	321,638	321,958	224,254	211,812	(Note 3)
Non-current libilities		1,103,592	1,110,082	1,066,573	934,844	913,545	1,095,874
Total libilities	Before distribution	1,247,834	1,251,733	1,208,544	1,051,597	1,020,886	1,250,999
	After distribution	(Note 3)	1,431,720	1,388,531	1,159,098	1,125,357	(Note 3)
Shareholder’s equity attributable to parent company		-	-	-	-	-	-
Common stock		4,499,678	4,499,678	4,499,678	4,387,790	4,178,848	4,499,678
Additionalpaid-incapital		-	-	-	-	-	-
Retained earnings	Before distribution	2,495,620	2,501,253	2,2891,176	2,158,964	2,071,790	2,496,562
	After distribution	(Note 3)	2,321,266	2,101,189	2,051,463	1,967,319	(Note 3)
Otherequity		536,992	80,233	611,634	527,828	629,808	535,934
Treasury stock		-	-	-	-	-	-
Non-controlling equity		-	-	-	-	-	-
Total equity	Before distribution	7,532,290	7,802,164	7,392,488	7,074,582	6,880,446	7,532,174
	After distribution	(Note 3)	7,622,177	7,212,501	6,967,081	6,775,975	(Note 3)

Note 1：The proposal for the distribution of the 2020 earnings is yet to be resolved in the shareholders’ meeting. Note 2：The 2021Q1 financial data were reviewed by the CPA.

Note 3：The proposal for the distribution of the 2020 earnings is yet to be resolved in the shareholders’ meeting

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(2) Condensed Comprehensive Income Statement

Year Item		Financial Data within the last 5 years	Financial Data within the last 5 years	Financial Data within the last 5 years		Financial data up to March 31, 2021 (Note 2)
	2020	2019	2018	2017	2016
6689Operatingrevenue	264,691	348,551	364,536	370,680	377,865	70,386
Gross profit	168,342	205,737	201,823	193,323	191,510	42,056
Operating profit	137,940	174,923	171,257	163,126	161,082	35,436
Non-operatingincome and expenses	71,668	314,181	330,424	311,457	267,355	(34,263)
Profit before income tax	209,608	489,104	501,681	474,583	428,437	1,173
Net income of continuing operation	174,120	399,559	329,239	400,421	360,253	942
Netincome	174,120	399,559	329,239	400,421	360,253	942
Other comprehensive income (loss) for the year, net income tax	(264,007)	190,104	25,447	(101,814)	(146,023)	(1,058)
Total comprehensive income	(89,887)	589,663	354,686	298,607	214,230	(116)
Earnings per share	0.39	0.89	0.73	0.91	0.86	0.00

Note 1：The proposal for the distribution of the 2020 earnings is yet to be resolved in the shareholders’ meeting. Note 2：The 2021Q1 financial data were reviewed by the CPA.

(3) The name and opinion of the independent auditor within the last 5 year

Year	Name of CPA Firm	Name of CPAs	Auditor’s opinions
2016	Deloitte & Touche	Cheng Shiuh-Ran, Huang Jui-Chan	Unqualified opinion
2017	Deloitte & Touche	Cheng Shiuh-Ran, Huang Jui-Chan	Unqualified opinion
2018	Deloitte & Touche	Cheng Shiuh-Ran, Huang Jui-Chan	Unqualified opinion
2019	Deloitte & Touche	Cheng Shiuh-Ran, Chen Li-Chi	Unqualified opinion
2020	Deloitte & Touche	Cheng Shiuh-Ran, Hsieh Tung-Ju	Unqualified opinion

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2. Financial Ratio Analysis

Year (Note 1) Items for Analysis (Note 3)	Year (Note 1) Items for Analysis (Note 3)	Financial Analysis for the Most Recent Five Years	Financial Analysis for the Most Recent Five Years	Financial Analysis for the Most Recent Five Years	Financial Analysis for the Most Recent Five Years	Financial Analysis for the Most Recent Five Years	Financial data up to March 31, 2021 (Note 2)
		2020	2019	2018	2017	2016
Financial Structure	Debt-asset ratio	14.21	13.83	14.05	12.94	12.92	14.24
	Ratio of long-term capital to property, plant and equipment	2,461.02	2,524.29	2,374.45	2,224.25	2,140.65	2,463.00
Solvency	Current ratio	1,059.03	1,058.90	1,017.81	1,139.62	1,134.00	1,013.48
	Quick ratio	1,058.36	1,058.21	1,017.12	1,138.76	1,132.87	1,013.01
	Interest coverage ratio	-	-	-	-	-	-
Operating Ability	Receivables turnover rate (times)	4.21	5.45	5.77	5.89	6.10	4.62
	Average collection days for receivables	86.69	66.97	63.25	61.96	59.80	79.00
	Inventory turnover rate (times)	-	-	-	-	-	-
	Payables turnover rate (times)	-	-	-	-	-	-
	Average daysforsale	-	-	-	-	-	-
	Property, plant and equipment turnover rate (times)	0.75	0.98	1.02	1.02	1.03	0.80
	Totalasset turnover rate (times)	0.03	0.04	0.04	0.05	0.05	0.03
Profitability	Returnonassets (%)	1.95	4.53	3.94	5.00	4.61	0.04
	Return on equity (%)	2.27	5.26	4.43	5.74	5.29	0.05
	Ratio of income before tax to paid-in capital(Note 7)	4.66	10.87	11.15	10.82	10.25	0.10
	Profitmarginbefore tax(%)	65.78	114.63	90.32	108.02	95.34	1.34
	Earnings pershare (NT$)	0.39	0.89	0.73	0.91	0.86	0.00
Cash Flow	Cash flow ratio (%)	77.77	94.1	107.71	129.65	131.03	28.24
	Cash flow adequacyratio (%)	112.14	145.39	223.34	223.34	200.67	109.33
	Cash flow reinvestment ratio (%)	-0.69	-0.47	0.72	0.78	0.99	0.48
Leveraging	Operating leverage	1.46	1.50	1.56	1.64	1.67	1.49
	Financial leverage	1.00	1.00	1.00	1.00	1.00	1.00

Note 1：The proposal for the distribution of the 2020 earnings is yet to be resolved in the shareholders’ meeting. Note 2：The 2021Q1 financial data were reviewed by the CPA.

Note 3：The following calculation formulas shall be listed at the end of this Table in the annual report:

1. Financial Structure

2. (1) Debt-asset ratio = total liabilities / total assets

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

4. Solvency

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

6. (2) Quick ratio = (current assets – inventory – prepaid expenses) / current liabilities

7. (3) Interest coverage ratio = income before income tax and interest expenses / current interest expenses

8. Operating ability

9. (1) Receivables (including accounts receivable and notes receivable arising from business oeprations) turnover rate = net sales / average receivables (including accounts receivable and notes receivable arising from business operations) for each period

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• (2) Average collection days for receivables = 365 / receivables turn over rate

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

• (4) Payables (including accounts payable and notes payable arising from business operations) turnover rate = cost of sale / average payables (including accounts payable and notes payable arising from business operations) for each period

• (5) Average days of sale = 365 / inventory turnover rate

• (6) Property, plant and equipment turnover rate = net sales / average net worth of property, plant and equipment

• (7) Total asset turnover rate = net sales / average total assets

• Profitability

• (1) Return on assets = [net income + interest expenses (1- tax rate)] / averate total assets

• (2) Return on equity = net income / averate total equity

• (3) Profit margin before tax = net income / net sales

• (4) Earnings per share = (profit and loss attributable to owners of the parent – dividends on preferred shares) / weighted average number of issued shares (Note 4)

• Cash flow

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

• (2)Net cash flow adequacy ratio = Net cash flow from operating activities for the most recent five years / (capital expenditures + inventory increase + cash dividend)

• (3) Cash flow reinvestment ratio = (Net cash flow from operating activities – cash dividend) / gross property, plant and equipment value + long-term investment + other non-current assets + working capital) (Note 5)

• Leveraging:

• (1) Operating leverage = (net operating revenue – variable operating costs and expenses) / operating income (Note 6)

• (2) Financial leverage = operating income / (operating income / interest expenses)

• Note 4: When the above formula for calculation of earnings per share is used during measurement, give special attention to the following matters:

• Measurement should be based on the weighted average number of common shares, not the number of issued shares at year end.

• In any case where there is a cash capital increase or treasury stock transaction, the period of time in circulation shall be considered in calculating the weighted average number of shares.

• In the case of capital increase out of earnings or capital surplus, the calculation of earnings per share for the past fiscal year and the fiscal half-year shall be retrospectively adjusted based on the capital increase ratio, without the need to consider the issuance period for the capital increase.

• If the preferred shares are non-convertible cumulative preferred shares, the dividend of the current year (whether issued or not) shall be substracted from the net profit after tax, or added to the net loss after tax. In the case of non-cumulative preferred shares, if there is net profit after tax, dividend on preferred shares shall be substracted from the net profit after tax; if there is loss, then no adjustment need be made.

• Note 5: Give special attention to the following matters when carrying out cash flow analysis:

• Net cash flow from operating activities means net cash in-flow amounts from operating activities listed in the statement of cash flows.

• Capital expenditures means the amounts of cash out-flows for annual capital investment.

• Inventory increase will only be entered when the ending balance is larger than the beginning balance. An inventory decrease at year end will be deemed zero for calculation.

• Cash dividend includes cash dividends from both common shares and preferred shares.

• Gross property, plant and equipment value means the total value of property, plant and equipment prior to the subtraction of accumulated depreciation.

• Note 6: Issuers shall separate operating costs and operating expenses by their nature into fixed and variable categories. When estimations or subjective judgments are involved, give special attention to their reasonableness and to maintaining consistency.

• Note7: The percentage of paid-in capital for the abovementioned foreign companies is changed to the calculation based on the percentage of net value.

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1. Audit Report from the Auditing Committee on the Latest Financial Statements

Audit Committee's Review Report

The Board of Directors has submitted the Company's 2020 business report, financial statements and earnings distribution proposal, among which the financial statements for 2020 have been audited by CPA Hsu-Jan Cheng and Tung-Ju Hsieh of Deloitte Taiwan who have issued an unqualified opinion audit report thereon.

The Business Report, Financial Statements and earnings allocation proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of the Company. According to Article 219 of the Company Act and Article 14-4 of the Securities and Exchange Act, we hereby submit this report.

Wan Hwa Enterprise Company Ltd. Audit Committee Convener: Chang-Lung Hsu

March 29, 2021

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4. Latest financial statements

INDEPENDENT AUDITORS’ REPORT

Wan Hwa Enterprise Company Ltd.

Opinion

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

In our opinion, based on our audits and the report of other auditors (refer to the other matter paragraph), the accompanying financial statements present fairly, in all material respects, the financial position of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

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

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the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter of the Company’s financial statements for the year ended December 31, 2020 is stated as follows:

Rental Revenue Recognition

The main business of the Company includes the rental of commercial buildings. As individual lease terms vary, the inclusion of payment adjustments and other agreed terms relating to the rights and obligations of the leasing parties, if the terms contained in the contract are not properly identified may result in the risk of incorrectly recognizing income. Please refer to Note 4 for related accounting policies.

In response to the above risks, we understand and evaluate the effectiveness of the Company's internal controls and obtained all lease contracts, reviewed the terms of the contracts and verified whether the accounting treatment of rental revenue was consistent with the accounting policy on revenue recognition, summarizes the rental revenue to be recognized based on the terms of the contracts, and reconciled with the accounting rental revenue to confirm that there are significant differences.

Other Matters

Among the affiliated companies accounted for under the equity method in the financial statements of Wan Hwa Enterprise Company Ltd. the 2020 and 2019 financial statements of Forward Time Corporation, Today's V, Inc. and Today's VI, LLC, accounted for under the equity-method by Today's Hotel Corporation, and the financial reports of Wan Hwa International Investment Company Ltd. for the years ended 2020 and 2019, were performed by other auditors. Hence, the opinion on the financial statements referred to above, which relates to the balance of investments accounted for using the equity method and the share of income or loss of affiliated companies recognized using the equity method, was based on other auditors' report. As of December 31, 2020 and 2019, the above balance audited by other accountants under the equity method amounted to NT$978,999 thousand and NT$ 980,637 thousand, respectively, each represents 11% of total assets, and the shares of these investments accounted for affiliated companies from January 1 to December 31, 2020 and 2019 were NT$ 49,234 thousand and NT$ 16,161 thousand, respectively, representing 23% and 3% of the profit before income tax.

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

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

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

Those charged with governance (including members of the Audit Committee) are

responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

5. 51 -

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

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

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

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

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

Deloitte & Touche CPA: Hsu-Jan Cheng CPA: Tung-Ju Hsieh Financial Supervisory Commission Approval Financial Supervisory Commission Approval Jin-Kuan-Zheng-Shen-Zi No. 1010028123 Jin-Kuan-Zheng-Shen-Zi No. 1090347472

Notice to Readers

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

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

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Wan Hwa Enterprise Company Ltd.

Balance sheet

December 31, 2020 and 2019

Unit: NTD thousand

			December 31,	2020				December 31, 2019
Asset			Amount		%			Amount	%
Current assets
Cash and cash equivalents (Notes 4 and 6)		$	167,685		2		$	190,391	2
Financial assets at fair value through profit or loss - current
(Notes 4 and 7)			111,308		1			110,856	2
Financial assets at amortised cost - current (Notes 4 and 8)			1,241,517		14			1,191,059	13
Other receivables (Notes 4)			5,376		-			5,940	-
Other current assets			1,679		-			1,691	-
Total current assets			1,527,565		17			1,499,937	17
Non-current assets
Financial assets at fair value through other comprehensive
income or loss - non-current (Notes 4 and 9)			2,601,934		30			2,746,219	30
Investments accounted for using equity method (notes 4 and
10)			2,857,136		33			3,033,370	33
Property, plant and equipment (Notes 4 and 11)			350,906		4			353,059	4
Real estate investments (Notes 4 and 12)			1,341,352		15			1,347,071	15
Deferred tax assets (Notes 4 and 16)			39,904		-			9,802	-
Refundable deposits			28		-			31	-
Long-term receivables (Notes 4 and 12)			61,299		1			64,408	1
Total non-current assets			7,252,559		83			7,553,960	83
Total assets		$	8,780,124		100		$	9,053,897	100
Liabilities and Equity
Current liabilities
Accounts payable		$	3,229		-		$	2,589	-
Other payables			120,231		2			113,429	1
Current tax liabilities (Note 4)			20,619		-			25,408	1
Other current liabilities			163		-			225	-
Total current liabilities			144,242		2			141,651	2
Non-current liabilities
Deferred tax liabilities (Notes 4 and 16)			996,052		11			1,002,476	11
Net defined benefit liabilities (Notes 4 and 13)			274		-			440	-
Guarantee deposits received (Note 12)			107,266		1			107,166	1
Total non-current liabilities			1,103,592		12			1,110,082	12
Total liabilities			1,247,834		14			1,251,733	14
Equity
Share capital
Common stock			4,499,678		51			4,499,678	50
Retained earnings
Legal reserves			594,787		7			554,831	6
Special reserves			686,543		8			686,543	7
unappropriated earnings			1,214,290		14			1,259,879	14
Total retained earnings			2,495,620		29			2,501,253	27
Other equities
Exchange differences on translating the financial
statements of foreign operations	(		158,579 )	(	2 )	(		37,898 )	-
Unrealized gain or loss on financial assets at fair value
through other comprehensive income			695,571		8			839,131	9
Total other equities			536,992		6			801,233	9
Total equities			7,532,290		86			7,802,164	86
Total liability and equity		$	8,780,124		100		$	9,053,897	100

The accompanying notes are an integral part of the financial statements. (Please refer to the Deloitte Taiwan audit report dated on March 29, 2021)

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Wan Hwa Enterprise Company Ltd.

Statement of comprehensive income

From January 1st to December 31st, 2020 and 2019

Units: NTD thousand, except earnings per share

Operating Revenue (Notes 4 and 12) Rental revenue Entertainment revenue Total operating revenue Operating cost (Note 15) Rental cost Entertainment cost Total operating cost Gross Profit Operating expenses (Notes 11, 12, 13, 15, and 20) Operating profit Non-operating income and expenses Share of gain (loss) of affiliated enterprise accounted for using the equity method (Notes 4 and 10) Interest income (Note 4) Dividends income (Notes 4 and 9) Other income (Notes 4 and 22) Gain on financial assets at fair value through profit or loss Other gains and losses Total non-operating income and expenses Profit before income tax Income tax expense (Notes 4 and 16) Net profit		2020		% 70 30 100 13 23 36 64 12 52 9 ) 5 29 - 1 - 27 79 13 66		2019
		Amount $ 186,054 78,637 264,691 35,615 60,734 96,349 168,342 30,402 137,940 25,383 ) 12,212 75,847 9,338 452 798) 71,668 $ 209,608 35,488 174,120				Amount $ 209,368 139,183 348,551 38,458 104,356 142,814 205,737 30,814 174,923 221,997 13,170 72,548 8,637 589 2,760) 314,181 $ 489,104 89,545 399,559		%
	( (		(		(			60 40 100 11 30 41 59 8 51 64 4 21 - 1 - 90 141 26 115

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Other comprehensive income (Notes 4, 13, 14 and 16) Items that are not reclassified to profit or loss: Re-measurement of defined benefit plans Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income Income tax related to compoment of ther comprehensive income that are not reclassified to profit or loss Items that may be reclassified to profit or loss later: Exchange differences on translation of financial statements of foreign operations of affiliated enterprises recognized under the equity method Income tax related to items that may be reclassified to profit or loss Other comprehensive income (loss) for the year (net after tax) Total comprehensive income (loss) for the year Earnings per share (Note 17) Basis		2020		% - 54 ) - 54) 57 ) 11 46) 100) 34)		2019
		Amount 234 144,285 ) 725 143,326) 150,851 ) 30,170 120,681) 264,007) $ 89,887) $ 0.39				Amount 505 250,199 25 250,729 75,782 ) 15,157 60,625) 190,104 $ 589,663 $ 0.89		%
	( ( ( ( ( (		( ( ( ( ( (		( (		( (	- 72 - 72 22 ) 4 18) 54 169

The accompanying notes are an integral part of the financial statements. (Please refer to the Deloitte Taiwan audit report dated on March 29, 2021)

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Wan Hwa Enterprise Company Ltd.

Statement of changes in equity

From January 1st to December 31st, 2020 and 2019

Unit: NTD thousand

Balance as of January 1, 2019 Appropriation and distribution of 2018 earnings: Legal reserve Cash dividends - NTD 0.4 per share Net profit in 2019 2019 Other comprehensive income (loss) after tax Total comprehensive income(loss) in 2019 Balance at December 31, 2019 Appropriation and distribution of 2019 earnings: Legal reserve Cash dividends - NTD 0.4 per share Net profit in 2020 2019 Other comprehensive income (loss) after tax Total comprehensive income(loss) in 2020 Balance at December 31, 2020		Capital (Note 14) $ 4,499,678 - - - - - 4,499,678 - - - - - $ 4,499,678		Retained earnings (Note 14) Legal reserves Special reserves Unappropriated earnings $ 521,907 $ 686,543 $ 1,072,726 32,924 - ( 32,924 ) - - ( 179,987 ) - - 399,559 - - 505 - - 400,064 554,831 686,543 1,259,879 39,956 - ( 39,956 ) - - ( 179,987 ) - - 174,120 - - 234 - - 174,354 $ 594,787 $ 686,543 $ 1,214,290	Retained earnings (Note 14) Legal reserves Special reserves Unappropriated earnings $ 521,907 $ 686,543 $ 1,072,726 32,924 - ( 32,924 ) - - ( 179,987 ) - - 399,559 - - 505 - - 400,064 554,831 686,543 1,259,879 39,956 - ( 39,956 ) - - ( 179,987 ) - - 174,120 - - 234 - - 174,354 $ 594,787 $ 686,543 $ 1,214,290	Retained earnings (Note 14) Legal reserves Special reserves Unappropriated earnings $ 521,907 $ 686,543 $ 1,072,726 32,924 - ( 32,924 ) - - ( 179,987 ) - - 399,559 - - 505 - - 400,064 554,831 686,543 1,259,879 39,956 - ( 39,956 ) - - ( 179,987 ) - - 174,120 - - 234 - - 174,354 $ 594,787 $ 686,543 $ 1,214,290	Other shareholders’equities (Notes 4 and 14) Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income $ 22,727 $ 588,907 - - - - - - ( 60,625) 250,224 ( 60,625) 250,224 ( 37,898 ) 839,131 - - - - - - ( 120,681) ( 143,560) ( 120,681) ( 143,560) ($ 158,579) $ 695,571	Other shareholders’equities (Notes 4 and 14) Exchange differences on translating the financial statements of foreign operations Unrealized gain or loss on financial assets at fair value through other comprehensive income $ 22,727 $ 588,907 - - - - - - ( 60,625) 250,224 ( 60,625) 250,224 ( 37,898 ) 839,131 - - - - - - ( 120,681) ( 143,560) ( 120,681) ( 143,560) ($ 158,579) $ 695,571		Total equities
							Exchange differences on translating the financial statements of foreign operations $ 22,727 - - - ( 60,625) ( 60,625) ( 37,898 ) - - - ( 120,681) ( 120,681) ($ 158,579)
				Legal reserves $ 521,907 32,924 - - - - 554,831 39,956 - - - - $ 594,787	Special reserves $ 686,543 - - - - - 686,543 - - - - - $ 686,543
						( ( ( (	( ( ( ( ( (	( (	( ( ( (	$ 7,392,488 - 179,987 ) 399,559 190,104 589,663 7,802,164 - 179,987 ) 174,120 264,007) 89,887) $ 7,532,290

The accompanying notes are an integral part of the financial statements. (Please refer to the Deloitte Taiwan audit report dated on March 29, 2021)

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Wan Hwa Enterprise Company Ltd. Statement of cash flows January 1 through December 31, 2020 and 2019

Unit: NTD thousand

Cash flow from operating activities Profit before income tax Adjustments for: Depreciation expense Net gain on financial assets at fair value through profit or loss Interest income Dividends income Share of profit (loss) of associates and joint ventures accounted for using the equity method Changes in operating assets and liabilities Accounts receivable Other receivables Other current assets Accounts payable Other payables Other current liabilities Net defined benefit liabilities Cash generated from operation Income tax paid Net cash flows from operating activities Cash flow from invesing Acquisition of financial assets at amortized cost Acquisition of property, plants and equipment Decrease on refundable deposits Interests received Dividends income received Net cash inflow through investment Cash flow through fundraising Increase on deposits received Cash dividends distributed Net cash outflow through fundraising	2020 $ 209,608 8,520 ( 452 ) ( 12,212 ) ( 75,847 ) 25,383 - 3,109 12 640 ( 684 ) ( 62 ) 68 158,083 ( 45,908) 112,175 ( 50,458 ) ( 648 ) 3 12,776 75,847 37,520 100 ( 172,501) ( 172,401)	Fiscal year of 2019
		$ 489,104 9,185 ( 589 ) ( 13,170 ) ( 72,548 ) ( 221,997 ) 81 ( 393 ) ( 93 ) ( 715 ) ( 160 ) ( 60 ) 102 188,747 ( 55,454) 133,293 ( 53,765 ) - - 13,121 72,548 31,904 5,040 ( 169,211) ( 164,171)

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(continued from previous page)

Code EEEE Net increase (decrease) in cash and cash equivalents E00100 Cash and cash equivalents at the beginning of the year E00200 Cash and cash equivalents at the end of the year	2020 ( $ 22,706 ) 190,391 $ 167,685		2019
			$ 1,026 189,365 $ 190,391

The accompanying notes are an integral part of the financial statements. (Please refer to the Deloitte Taiwan audit report dated on March 29, 2021)

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Wan Hwa Enterprise Company Ltd.

Notes to the financial statements

January 1 through December 31 of 2020 and 2019

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

• I. Company history

The Company's shares have been listed and traded on the Taiwan Stock Exchange since March 22, 1965. The Company is mainly engaged in the rental of commercial buildings and the operation of cinemas and amusement arcades.

• II. Date and procedures for approval of financial statements

This financial statements were approved by the Board of Directors on March 23, 2021.

• III. Application of Newly Issued and Revised Standards, and their Interpretations

• (I) First-time application of International Financial Reporting Standards ("IFRSs"), International Accounting Standards ("IASs"), Interpretations ("IFRICs") and Announcement on Interpretations ("SICs") (herein after "IFRSs") endorsed by the Financial Supervisory Commission ("FSC") and issued into effect in 2020.

The revised IFRSs approved and issued by the FSC effective in 2020 did not result in significant changes in the Company's accounting policies.

• (II) The Company has not yet applied the IFRSs recognized by the FSC, which will be applicable in 2021.

applicable in 2021.
Newly issued/revised/amended standards and interpretation Amendment on IFRS 4 "Extension of Temporary Exemption to IFRS 9 Amendments on IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 "Interest Rate Indicator Change - Phase II" Amendment on IFRS 16 "Reduction of rent associated with COVID-19.”	International Accounting Standards Board (IASB) Effective date of issuance
	Effective as of the date of issuance Effective for annual reporting periods beginning after January 1, 2021 Effective for annual reporting periods beginning after June 1, 2020

As of the date of publication of this financial statements, the Company has assessed that the above amendments have no material impact on the Company. However, the Company continues to assess the impact of the Amendments on other standards and interpretations on the financial position and financial performance. The related impact will be disclosed upon completion of the assessment.

• (III) IFRSs published by the IASB but not yet recognized by the FSC and issued into effect

Newly issued/revised/amended standards and Effective date of issuance by interpretation IASB (Note 1)

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Annual Improvements Plan 2018-2020 January 1, 2022 (Note 2) Amendment on IFRS 3 "Update the indexing of the January 1, 2022 (Note 3) conceptual framework" Amendment on IFRS 10 and IAS 28 "Sale or contribution To be determined of assets between an Investor and its associates or joint venture" IFRS 17 "Insurance contract" January 1, 2023 Amendment on IFRS 17 January 1, 2023 Amendment on IAS 1 "Classification of liabilities as January 1, 2023 current or non-current" Amendment on IAS 1 "Disclosure of Accounting January 1, 2023 (Note 6) Policies" Amendments on IAS 8 "Definition of Accounting January 1, 2023 (Note 7) Estimates" Amendment on IAS 16 "Property, plant and equipment: January 1, 2022 (Note 4) price before reaching intended use"

IFRS 17 "Insurance contract" January 1, 2023 Amendment on IFRS 17 January 1, 2023 Amendment on IAS 1 "Classification of liabilities as January 1, 2023 current or non-current" Amendment on IAS 1 "Disclosure of Accounting January 1, 2023 (Note 6) Policies" Amendments on IAS 8 "Definition of Accounting January 1, 2023 (Note 7) Estimates" Amendment on IAS 16 "Property, plant and equipment: January 1, 2022 (Note 4) price before reaching intended use" Amendment on IAS 37 "Loss-making Contracts - Cost of January 1, 2022 (Note 5) executing contracts"

Note 1: Unless otherwise stated, the above new/amended/revised standards or interpretations are effective for annual reporting periods beginning after the respective dates.

• Note 2: The Amendments on IFRS 9 apply to exchanges or modifications of the terms of financial liabilities that occur in annual reporting periods beginning after January 1, 2022; the Amendments on IAS 41, "Agriculture,” apply to fair value measurements in annual reporting periods beginning after January 1, 2022; the Amendments on IFRS 1," First-time Adoption of IFRSs,” apply retroactively to annual reporting periods beginning after January 1, 2022.

• Note 3: This amendment applies to business mergers for which the acquisition date begins after January 1, 2022 in the annual reporting period.

• Note 4: This amendment applies to plant, property and equipment in the location and condition necessary to achieve management's intended mode of operation after January 1, 2021.

• Note 5: This amendment applies to contracts with all obligations outstanding as of January 1, 2022.

Note 6: Effective for annual reporting periods beginning after January 1, 2023.

• Note 7: This amendment applies to changes in accounting estimates and accounting policies that occur in annual reporting periods beginning after January 1, 2023.

As of the date of publication of this financial statements, the Company has assessed that the above amendments have no material impact on the Company. However, the Company continues to evaluate the impact of IFRSs issued by the IASB but not yet recognized by the FSC and issued into effect on each period's financial position and financial performance, which will be disclosed when the evaluation is completed.

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IV. Summary of significant accounting policies

• (I) Compliance announcement

The financial statements are in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the IFRSs recognized by the Financial Supervisory Commission.

• (II) Preparation basis

The financial statements have been prepared on a historical cost basis, except for financial instruments measured at fair value and net defined benefit liabilities recognized at the present value of the defined benefit obligation less the fair value of plan assets.

Fair value measurements are classified into Levels 1 to 3 based on the degree of observability and significance of the relevant inputs.

1. Level 1 inputs: Quoted prices (unadjusted) in active markets for identical assets or liabilities available at the measurement date.

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

3. Level 3 inputs: Unobservable inputs of assets or liabilities.

4. (III) Criteria for distinguishing the standard between current and non-current assets and liabilities Total current assets include:

5. Assets held primarily for transaction purposes;

6. Assets expected to be realized within 12 months of the date on the balance sheet; and

7. Cash and cash equivalents (other than those restricted for exchange or settlement of liabilities more than 12 months after the date on the balance sheet).

8. Total current liabilities include:

9. Liabilities held primarily for transaction purposes;

10. liabilities expected to be settled within 12 months of the date on the balance sheet; and

11. Liabilities whose maturity cannot be unconditionally deferred to at least 12 months after the date on the balance sheet.

Assets or liabilities other than those mentioned above are classified as non-current assets or non-current liabilities.

• (IV) Foreign currencies

When the Company prepares financial statements, transactions in currencies other than the Company's functional currency (foreign currencies) are recorded in the functional currency based on the transaction date's exchange rate. Monetary items denominated in foreign currencies are translated at the closing rate at each balance sheet date. Exchange differences arising from the settlement of foreign exchange or the translation of foreign currencies are recognized in profit or loss in the period in which they occur.

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Non-monetary items measured at fair value in foreign currencies are translated at the exchange rates prevailing on the date when the fair value was determined, and the resulting exchange differences are recorded in profit or loss for the period, except for those arising from changes in fair value recognized in 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.

In preparing the financial statements, the assets and liabilities of the Company's foreign entities are translated into New Taiwan Dollars using the exchange rate at each balance sheet date. Income and expense items are translated at the average exchange rate for the period, and the resulting exchange differences are recognized in other comprehensive income.

If all interests in a foreign entity are disposed of, or part of an interest in a foreign operation is disposed of, but control over the cumulative translation differences associated with that foreign operation is lost, the difference is reclassified to profit or loss.

(V)

In the case of any other partial disposal of a foreign operation (i.e., a reduction in the Company's ownership interest in an affiliate without a significant loss), the cumulative translation difference is reclassified to profit or loss in proportion to the disposal. Investments in Associates

An associate is an entity over which the Company has significant influence but is not a subsidiary or a joint venture.

The Company applies the equity method to its investments in the associates.

Under the equity method, investments in associates are initially recognized at cost. The carrying amount of the investment after the acquisition date increases or decreases in accordance with the Company's share of profit or loss of the associates and other comprehensive income or loss profit distribution. In addition, changes in equity in associates are recognized on a proportional basis to shareholdings.

The excess of the acquisition cost over the Company's share of the net fair value of the identifiable assets and liabilities of the affiliated companies at the date of acquisition is recorded as goodwill, which is included in the carrying amount of the investment and is not amortized; the excess of the Company's share of the net fair value of the identifiable assets and liabilities of the affiliated companies at the date of acquisition over the acquisition cost is recorded as profit or loss for the period.

If the Company does not subscribe for new shares of a related company in proportion to its shareholding, resulting in a change in the Company's shareholding and an increase or decrease in the net equity of the investment, the increase or decrease is adjusted to capital surplus - change in net equity of the related company recognized under the equity method and the investment under the equity method. However, if the ownership interest in an

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associate is reduced as a result of not subscribing for or acquiring shares in proportion to the ownership interest, the amount recognized in other comprehensive income or loss related to the associate is reclassified to the same basis of accounting as that required for the direct disposal of the related assets or liabilities of the associate. If the former adjustment is charged to capital surplus, the balance of capital surplus from investments accounted for using the equity method is not sufficient, the difference is debited to retained earnings.

The recognition of further loss ceases when the Company's share of loss in an associate equals or exceeds its interest in the associate (including the carrying amount of its investment in the associate under the equity method and other long-term interests that are in substance a component of the Company's net investment in the associate). The Company recognizes additional loss and liabilities only to the extent that legal obligations, constructive obligations or payments on behalf of associates have been incurred.

In assessing impairment, the Company treats the entire carrying amount of an investment as a single asset, compares the recoverable amount with the carrying amount, and performs an impairment test. The impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the investment's carrying amount. Any reversal of impairment loss is recognized to the extent that the investment's recoverable amount subsequently increases.

The Company ceases to adopt the equity method from the date its investment ceases to be an associate and its retained interest in the associate is measured at fair value. The difference between the fair value and the disposal price and the carrying amount of the investment on the date of cessation of the equity method is recognized in profit or loss for the current period. In addition, all amounts recognized in other comprehensive income are accounted for on the same accounting treatment, as if such assets or liabilities have been directly disposed of by the associate.

Profit or loss resulting from counter-flow, downflow and side-flow transactions between the Company and its associates are recognized in the financial statements only to the extent that they are not related to the Company's interest in the associates.

• (VI) Property, Plant and Equipment

Property, plant and equipment are recognized at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

No depreciation is provided for owned land.

Property, plant and equipment are depreciated on a straight-line basis over their useful life, with separate depreciation for each material component. The Company reviews the estimated useful life, residual values and depreciation methods at least once at the end of each year. It defers the effect of changes in applicable accounting estimates.

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

• (VII) Real estate investment

Real estate investment is real estate property held to earn rental income or for capital appreciation, or both. Real estate investment also includes land held for future use and the purpose is yet to be determined.

Real estate investment is measured initially at cost (including transaction costs) and subsequently at cost less accumulated depreciation and accumulated impairment loss. The Company applies a straight-line basis for depreciation.

When real estate investments are derecognized, the difference between the net disposal proceeds and the carrying amount of the assets is recognized in profit or loss.

• (VIII) Impairment of property, plant and equipment, and real estate investment

The Company assesses at each balance sheet date whether there is any indication that property, plant and equipment and real estate investment may have been impaired. If any indication of impairment exists, the recoverable amount of the asset is estimated. If the recoverable amount of an individual asset cannot be estimated, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Shared assets are allocated to individual cash-generating units on a reasonable and consistent basis.

The recoverable amount is higher because the fair value has less costs to sell and its value in use. If the recoverable amount of an asset or cash-generating unit is less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, and the impairment loss is recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cashgenerating unit is increased to the revised recoverable amount, provided that the increased carrying amount does not exceed the carrying amount (net of amortization or depreciation) that would have been determined if the impairment loss had not been recognized in prior years for that asset or cash-generating unit. Reversal of impairment loss is recognized in profit or loss.

• (IX) Financial Instruments

Financial assets and financial liabilities are recognized in the balance sheet when the Company becomes a party to the instrument's contractual provisions.

When the original recognition of financial assets and financial liabilities that are not measured at fair value through profit or loss are measured at fair value plus transaction costs directly attributable to the acquisition or issuance of the financial assets or financial liabilities. Transaction costs directly attributable to the acquisition or issuance of financial assets or financial liabilities measured at fair value through profit or loss are recognized immediately in profit or loss.

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1. Financial asset

Regular transactions of financial assets are recognized and derecognized using trade date accounting.

• (1) Type of measurement

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

• A. Financial asset measured at fair value through profit or loss

  • Financial assets measured at fair value through profit or loss are financial assets that are mandatorily measured at fair value through profit or loss. Financial assets that are mandatorily measured at fair value through profit or loss include investments in equity instruments that the Company has not designated as measured at fair value through other comprehensive income or loss, and investments in debt instruments that do not qualify for classification as measured at amortized cost or measured at fair value through other comprehensive income or loss.

Financial assets measured at fair value through profit or loss are measured at fair value. The profit or loss arising from their re-measurement (including any dividends or interest generated from the financial assets) is recognized in profit or loss. Please refer to note 19 for the determination of fair value.

• B. Financial assets measured at amortized cost

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

• a. Held under a business model whose objective is to hold financial assets to collect contractual cash flows; and

• b. The terms of the contracts give rise to cash flows at specified dates that are solely for the payment of principal and interest on the outstanding principal amount.

Financial assets measured at amortized cost (including cash and cash equivalents, accounts receivable and other receivables) are measured at their total carrying amount determined using the effective interest method less the amortized cost of any impairment loss after initial recognition, with any foreign currency translation profit or loss recognized in profit or loss. Cash equivalents include time deposits that are highly liquid, readily convertible into fixed amounts of money with minimal risk of changes in

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value within three months from the date of acquisition. They are used to meet short-term cash commitments.

• C. Investments in equity instruments measured at fair value through other comprehensive income or loss

On initial recognition, the Company has an irrevocable option to designate investments in equity instruments that are not held-for-trading and not acquired in a business combination with contingent consideration 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. Upon disposal of investments, the accumulated profit and loss are transferred directly to retained earnings and are not reclassified to profit or loss.

Dividends from investments in equity instruments measured at fair value through other comprehensive income or loss are recognized in profit or loss when the Company's right to receive them is established unless the dividend clearly represents a partial recovery of the cost of the investment.

• (2) Impairment of financial assets

The Company assesses impairment on financial assets, lease receivables, and contract assets measured at amortized cost at each balance sheet date based on expected credit loss.

Accounts receivable, lease receivables, and contract assets are recognized as an allowance for loss based on expected credit loss over the period of their existence. Other financial assets are first evaluated to determine whether there is a significant increase in credit risk since initial recognition. If there is no significant increase, an allowance for loss is recognized based on the 12-month expected credit loss. If there is a significant increase, an allowance for loss is recognized based on the expected credit loss over the remaining period.

Expected credit loss is a weighted average credit loss weighted by the risk of default. The 12-month expected credit loss represents the expected credit loss arising from possible defaults of the financial instruments within 12 months after the reporting date. The ongoing expected credit loss represents the expected credit loss arising from all possible defaults of the financial instruments during the financial instruments' expected life.

All impairment on financial assets is reversed by reducing the carrying amount through an allowance account.

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• (3) Derecognizing 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.

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

1. Financial liability

2. (1) Subsequent measurement

Financial liabilities measured at amortized cost are measured using the effective interest method, except for short-term accounts payable, where interest recognition is not material.

• (2) Derecognizing of financial liabilities

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

• (X) Revenue Recognition

After the Company identifies performance obligations in customer contracts, the transaction price is apportioned to each performance obligation and revenue is recognized when each performance obligation is satisfied.

1. Rental income

2. Rental income is recognized in accordance with IFRS 16, "Leases,” and is recognized monthly for the realized portion.

3. Education and entertainment

The income from Education and entertainment revenue is recognized when the services are rendered, and is measured at the transaction price agreed between the Company and the contracting parties.

• (XI) Leasing

The Company is the lessor

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

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A lease is classified as a finance lease when the terms of the lease transfer substantially all the risks and rewards incidental to the ownership of the asset to the lessee. All other leases are classified as operating leases.

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 cost incurred in acquiring an operating lease is added to the subject asset's carrying amount and recognized as an expense on a straight-line basis over the lease term.

Rentals under leases that do not depend on changes in indices or rates are recognized as income in the period in which they are incurred.

• (XII) Government grants

Government grants are recognized only when there is reasonable assurance that the Company will comply with the conditions attached to the government grant and that the grant will be received.

Government grants related to revenue are recognized in other income on a systematic basis over the period in which the related costs intended to be reimbursed are recognized as expenses by the Company.

Government grants are recognized in profit or loss in the period in which they become receivable if they are intended to compensate for expenses or loss already incurred or to provide immediate financial support to the Company and have no future related costs.

• (XIII) Employee benefits

• Short-term employee benefits

Short-term employee benefit-related liabilities are measured at the non-discounted amount expected to be paid in exchange for employee services.

1. Post-employment benefits

The defined contribution pension plan is an expense that recognizes the amount of pension benefits to be contributed during the employees' service period.

The defined benefit cost (including service cost, net interest and re-measurement) of the defined benefit pension plan is actuarially determined using the projected unit benefit method. Service cost and net interest on net defined benefit liabilities (assets) are recognized as employee benefit expenses as incurred. Re-measurements (including actuarial profit and loss and return on planned assets, net of interest) are recognized in other comprehensive income and included in retained earnings as incurred and are not reclassified to profit or loss in subsequent periods.

The net defined benefit liabilities (assets) represent the deficit (remaining) of the defined benefit pension plan contribution. The net defined benefit assets may not exceed the present value of refunds of contributions from the plan or reductions in future contributions.

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(XIV) Income tax

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

1. Current income tax

The Company determines the current income in accordance with the Income Tax Act and calculates the income tax payable accordingly.

Income tax on undistributed earnings calculated in accordance with the Income Tax Act is recognized in the year when the shareholders resolve to retain the earnings. Adjustments to prior years' income tax payable are included in the current period's income tax.

1. Deferred income tax

Deferred income tax is calculated on temporary differences between the carrying amounts of assets and liabilities and the tax bases used to compute taxable income. Deferred income tax assets and liabilities are not recognized for temporary differences arising from the initial recognition of assets and liabilities that have no impact on either taxable income or accounting profit.

Deferred income tax liabilities are generally recognized for all taxable temporary differences, while deferred income tax assets are recognized to the extent that it is probable that taxable profit will be available against which income tax credits can be utilized.

Deferred income tax liabilities are recognized for taxable temporary differences associated with investments in associates, except where the Company can 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 a reversal is expected in the foreseeable future.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient tax assets will be available to allow recovery of all or part of the asset. Deferred income tax assets that were not recognized as such are reviewed at each balance sheet date. The carrying amount is increased to the extent that it is probable that future taxable income will be available to recover all or part of the asset.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the liability is settled or the asset is realized, which are based on tax rates and tax laws that have been legislated or substantively legislated at the balance sheet date. The measurement of deferred income tax liabilities

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and assets reflects the tax consequences of the manner in which the Company expects to recover or settle the carrying amounts of its assets and liabilities at the balance sheet date.

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

2. V. Significant accounting judgments, estimations, and assumptions, and other major sources of estimation uncertainty

When the Company adopts accounting policies, management must make judgments, estimates, and assumptions based on historical experience and other relevant factors when relevant information is not readily available from other sources. Actual results may be different from the estimates.

Management will continue to review estimates and underlying assumptions. If a revision to an estimate affects only the current period, it is recognized in the period in which the revision is made. If a revision of an accounting estimate affects both the current and future periods, it is recognized in the period in which the revision is made and in the future period.

VI.Cash and cash equivalents

h and cash equivalents
Cash on hand and working capital Bank checks and demand deposits	December 31, 2020 $ 439 167,246 $ 167,685	December 31, 2019
			$ 524 189,867 $ 190,391

VII. Financial instruments at fair value through profit or loss

Mandatory financial assets measured at fair value through profit or loss Fund beneficiary certificate Financial assets at amortized cost-current Fixed-term deposits with an original maturity of more than 3 months Deposit Range of the interest rate	December 31, 2020 $ 111,308 December31,2020 $ 1,241,517 0.38%～1.70%	December 31, 2019
		$ 110,856 December31,2019
		$ 1,191,059 0.63%～2.45%

VIII. Financial assets at amortized cost - current

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IX. Financial assets measured at fair value through other comprehensive income or loss - non-

current

current
Investment in equity instruments - Domestic Publicly traded stocks Non-Publicly traded stock Investment in equity instruments – Foreign Non-Publicly traded stock	December 31, 2020 $ 1,527,000 976,001 2,503,001 98,933 $ 2,601,934	December 31, 2019
			$ 1,662,674 980,985 2,643,659 102,560 $ 2,746,219

The Company invests for long-term and expects to make a profit from its investments over the long term. The Company's management believes 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 has therefore elected to designate these investments as measured at fair value through other comprehensive income.

The Company recognized dividend income of $75,847 thousand and $72,548 thousand for 2020 and 2019, respectively. The amount related to those who still held the shares was $75,847 thousand and $72,548 thousand for the years ended December 31, 2020 and 2019, respectively.

X. Investments accounted for using the equity method

Investments in Affiliated enterprise Investments in Affiliated enterprise Significant associates Today's Hotel Corporation Individually insignificant associates Wan Hwa International Investment Company Ltd.	December 31, 2020 $ 2,857,136 December 31, 2020 $ 2,591,004 266,132 $ 2,857,136	December 31, 2019	December 31, 2019
		$ 3,033,370 December 31, 2019
			$ 2,759,636 273,734 $ 3,033,370

(I) Significant affiliated

Significant affiliated
Company Name Today's Hotel Corporation	Shareholding and voting rights
	December31,2020 30.36%	December31,2019
		30.36%

For the business nature, the main location of business and country information of the above affiliated, please refer to Appendix II, "Name of Investee Company, Location, and Other Related Information.”

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Aggregate financial information of significant affiliated is as follows:

Today's Hotel Corporation

Today's Hotel Corporation
Current asset Non-current assets Current liabilities Non-current liabilities Equity The Company’s shareholding ratio Rights and interests the Company holds Operating income Net profit (loss) of the year Other comprehensive income Total comprehensive income	December 31, 2020 $ 3,840,646 7,952,384 ( 507,843 ) ( 2,750,917) 8,534,270 30.36% $ 2,591,004 2020 $ 1,926,647 ( $ 104,429 ) - ($ 104,429)	December 31, 2019 $ 4,511,374 8,249,806 ( 989,446 ) ( 2,682,024) 9,089,710 30.36% $ 2,759,636 2019 $ 5,999,886 $ 734,342 - $ 734,342
			$ 5,999,886 $ 734,342 - $ 734,342

(II) Information on individually insignificant affiliated

Equities the Company holds Net profit (loss) of the year Other comprehensive income Total comprehensive income		2020 $ 6,322 - $ 6,322	2019 ( $ 949 ) - ($ 949)

The equity-method investments' share of profit or loss and other comprehensive income or loss for 2020 and 2019 were recognized in accordance with the audited financial statements.

XI.Property, Plant and Equipment

										Plumbing and	Plumbing and
							Machinery				electrical
	Ownedland				Building			equipment			equipment	Other	equipment			Total
Cost
Balance at January 1, 2019	$	343,662		$	56,326		$	18,225		$	5,144	$	3,435		$	426,792
Disposal		-	(		1,352)	(		2,483)			-	(	1,465)	(		5,300)
Balance at December 31, 2019		343,662			54,974			15,742			5,144		1,970			421,492
Accumulated depreciation
Balance at January 1, 2019		-			50,271			14,733			3,318		2,217			70,539
Disposal		-	(		1,352 )	(		2,483 )			-	(	1,465 )	(		5,300 )
Depreciation expense		-			1,417			1,197			328		252			3,194
Balance at December 31, 2019		-			50,336			13,447			3,646		1,004			68,433
Net balance at December 31, 2019	$	343,662		$	4,638		$	2,295		$	1,498	$	966		$	353,059
Cost
Balance at January 1, 2020	$	343,662		$	54,974		$	15,742		$	5,144	$	1,970		$	421,492
Addition		-			-			648			-		-			648
Disposal		-			-	(		3,714)	(		110)		-	(		3,824)
Balance at December 31, 2020		343,662			54,974			12,676			5,034		1,970			418,316
Accumulated depreciation
Balance at January 1, 2020		-			50,336			13,447			3,646		1,004			68,433
Disposal		-			-	(		3,714 )	(		110 )		-	(		3,824 )
Depreciation expense		-			1,318			935			325		223			2,801
Balance at December 31, 2020		-			51,654			10,668			3,861		1,227			67,410
Net balance at December 31, 2020	$	343,662		$	3,320		$	2,008		$	1,173	$	743		$	350,906

The Company applies a straight-line basis for depreciation over the useful life of property, plant and equipment:

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Building
Main building	37 to 55 years
Main renovation work	32 to 37 years
Machinery equipment
Fire-fighting equipment	8 to 10 years
Elevators	10 to 17 years
Air conditioning equipment	5 to 10 years
Plumbing and electrical equipment	10 to 15 years
Other equipment
Property, plant and equipment	5 to 10 years

XII. Real estate investment

Real estate investment
Cost Balance at January 1, 2019 Disposal Balance at December 31, 2019 Accumulated depreciation Balance at January 1, 2019 Disposal Depreciation expense Balance at December 31, 2019 Net balance at December 31, 2019 Cost January 1, 2020, and Balance at December 31 Accumulated depreciation Balance at January 1, 2020 Depreciation expense Balance at December 31, 2020 Net balance at December 31, 2020		Land $ 1,328,167 - 1,328,167 $ - - - - $ 1,328,167 $ 1,328,167 - - - $ 1,328,167		Building $ 237,561 3,658) 233,903 $ 212,666 3,658 ) 5,991 214,999 $ 18,904 $ 233,903 214,999 5,719 220,718 $ 13,185		Total
			( (		( (	$ 1,565,728 3,658) 1,562,070 $ 212,666 3,658 ) 5,991 214,999 $ 1,347,071 $ 1,562,070 214,999 5,719 220,718 $ 1,341,352

In 2020, the global economy was severely affected by COVID-19, and the Company calculated rental income based on turnover for some months of partial leases.

The Company applies a straight-line basis for depreciation on real estate investment:

Building Main building 37 to 55 years Main renovation work 32 to 37 years

As of December 31, 2020 and 2019, the net carrying amount of the Company's real estate investment was $130,552 thousand. The Company's real estate investments are located in Longtan District, Taoyuan City, which is not a general residential or commercial land use. Hence comparable market transactions are infrequent and reliable alternative fair value estimates are not available. The remaining real estate investment are commercial buildings in Taipei City with a net book value of $1,210,800 thousand and $1,216,519 thousand as of December 31, 2020 and 2019, respectively, and a fair value of $6,864,157 thousand and $6,979,553 thousand, respectively, which were evaluated by the Company's management with

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reference to market evidence of similar real estate transaction prices and are classified as Level 3 input values.

The leases of real estate investment owned by the Company are operating leases, which will all be expired by the end of July 2027. The rent is calculated by reference to the neighboring shopping mall's rent and adjusted according to the lease agreement. The rent is collected monthly. The lessee does not have a preferential right to acquire the real estate at the end of the lease term.

As of December 31, 2020 and 2019, the Company had received $95,266 thousand and $95,166 thousand (recorded as deposits received) as security deposits for operating lease contracts.

The total future rental income receivable by the Company for real estate investment leased under operating leases are as follows:

under operating leases are as follows:
Year one Year two Year three Year four Year five After year five	December 31, 2020 $ 212,695 205,890 207,609 175,599 110,288 152,640 $ 1,064,721	December 31, 2019
			$ 208,860 212,378 205,561 207,526 175,599 262,910 $ 1,272,834

In addition to the aforementioned rental income receivables, the Company's real estate leasing contracts also contain contingent rental clauses that allow the lessee to pay contingent rentals based on a specified percentage of its monthly sales in excess of the contracted amount. The Company’s contingent rental income of $3,588 thousand and $6,731 thousand was recognized in 2020 and 2019, respectively.

The Company’s assets recognized for lease incentives granted under operating leases are as follows:

follows:
Lease incentives Long-term receivables	December 31, 2020 $ 61,299	December 31, 2019
			$ 64,408

XIII. Post-employment benefit plans

• (I) Defined contribution plans

The Company applies the pension system under the Labor Pension Act, which is a government-administered defined contribution pension plan that contributes 6% of employees' monthly salaries to the individual accounts of the Bureau of Labor Insurance. For the years 2020 and 2019, the Company recognized $353 thousand and $325 thousand, respectively, as operating expenses in the consolidated statements of income in accordance with the proportionate share of the defined contribution plan.

• (II) Defined benefit plan

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The Company has implemented the Labor Standards Act (the "Labor Standards Act") since April 1, 1998. When the seniority of the Company's employees prior to the implementation of the Labor Standards Act is calculated in accordance with the "Regulations Governing the Implementation of Retirement and Resignation" under the "Personnel Management Regulations" implemented on January 1, 1989, applies for retirement or is being laid off, its seniority is divided into two parts to calculate pension or severance pay as the following: (1) Seniority prior to the implementation of the Labor Standards Act shall be paid in accordance with the provisions of the Regulations Governing Retirement and Resignation of the Company's Personnel Management Regulations effective January 1, 1989. (2) The seniority after the implementation of the Labor Standards Act shall be in accordance with the provisions of the Labor Standards Act.

Under the Labor Standards Act (before the amendment), the pension plan is a defined benefit pension plan administered by the government. Since August 2003, a monthly pension contribution of 2% of salaries and wages has been paid to the Labor Retirement Reserve Fund Supervisory Committee and deposited in the same name in a special account at the Bank of Taiwan. If the estimated balance of the special account before the end of the year is not enough to pay for the workers who are expected to meet the retirement requirements in the following year, the difference will be withdrawn in one lump sum by the end of March of the following year. The account is entrusted to the Bureau of Labor Fund of the Ministry of Labor, and the Company has no right to influence the investment strategy.

The amounts included in this balance sheet for defined benefit plans are shown below:

Present value of a defined benefit obligation Fair value of planned assets Shortfall of appropriation (net defined benefit liabilities)	December31,2020 $ 8,729 ( 8,455) $ 274	December31,2019	December31,2019
	(	(	$ 9,392 8,952) $ 440

Changes in the net defined benefit liabilities are as follows:

January 1, 2019 Servicing costs Current servicing cost Interest expenses (income) Recognition in profit or loss	Present value of a defined benefit obligation $ 10,273 231 90 321	Fair value of planned assets ($ 9,430) - ( 83) ( 83)		Net defined benefit liabilities
		( ( (		$ 843 231 7 238

(continued from next page)

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(continued from previous page)

Re-measurement Return on planned assets (other than amounts included in net interest) Actuarial loss - financial assumptions Changes Actuarial benefit - experience adjustment Other comprehensive income recognized Contribution by the employer Payment of benefits December 31, 2019 January 1, 2020 Servicing costs Current servicing cost Interest expenses (income) Recognition in profit or loss Re-measurement Return on planned assets (other than amounts included in net interest) Actuarial loss - financial assumptions Changes Actuarial benefit - experience adjustment Other comprehensive income recognized Contribution by the employer Payment of benefits December 31, 2020	Present value of a defined benefit obligation $ - 148 ( 315) ( 167) - ( 1,035) $ 9,392 $ 9,392 202 59 261 - 140 ( 61) 79 - ( 1,003) $ 8,729	Fair value of planned assets ( $ 338 ) - - ( 338) ( 136) 1,035 ($ 8,952) ($ 8,952) - ( 56) ( 56) ( 313 ) - - ( 313) ( 137) 1,003 ($ 8,455)	Net defined benefit liabilities
	( ( ( ( (		( $ 338 ) 148 ( 315) ( 505) ( 136) - $ 440 $ 440 202 3 205 ( 313 ) 140 ( 61) ( 234) ( 137) - $ 274

The Company is exposed to the following risks due to the pension system under the Labor Standards Act:

1. Investment risk: The Bureau of Labor Fund of the Ministry of Labor invests the Labor Pension Fund in domestic and foreign equity securities, debt securities and bank deposits through its own and entrusted operations, but the Company's plan assets are distributed at an amount not less than the interest rate of a two-year time deposit in a local bank.

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1. Interest rate risk: A decrease in interest rates will increase the present value of the defined benefit obligation, but the investment return on plan assets will also increase, which will have a partially offsetting effect on the net defined benefit liabilities.

2. Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salary of the members in the plan. Therefore, increases in plan members' salaries will result in an increase in the present value of the defined benefit obligation.

A qualified actuary actuarially determined the present value of the Company's defined benefit obligation and the significant assumptions at the measurement date were as follows:

Discount rate Expected rate of salary increase	December 31, 2020 0.375% 1.00%	December 31, 2019
		0.625% 1.00%

The amount by which the present value of the defined benefit obligation would increase (decrease) if there were possible changes in significant actuarial assumptions, respectively, with all other assumptions held constant, is as follows:

with all other assumptions held constant,	is as follows:
Discount rate 0.25% increase 0.25% decrease Expected rate of salary increase 0.25% increase 0.25% decrease	December 31, 2020 ($ 140) $ 144 $ 141 ($ 137)	December 31, 2019
	( (	( (	$ 148) $ 153 $ 150 $ 146)

The sensitivity analysis above may not reflect actual changes in the defined benefit obligation's present value because the actuarial assumptions may be correlated and changes in only one assumption are not probable.

	in only one assumption are not probable.
V. (I)	Amount expected to be contributed within 1 year Average period of defined benefit obligation until its withdrawal Equity Share capital - common shares Registered shares (in thousands) Registered capital Number of issued and fully paid shares (in thousands) Issued capital	December31,2020 $ 140 6.4 years December31,2020 450,000 $ 4,500,000 449,968 $ 4,499,678	December31,2019
			$ 136 6.4 years December31,2019
				450,000 $ 4,500,000 449,968 $ 4,499,678

XIV. Equity

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(II)

The issued common share has a par value of NTD10 per share and each share is entitled to one vote and the right to receive dividends.

Policies on earnings retention and dividend

In accordance with the Company's Articles of Incorporation, 10% of the Company's annual earnings, if any, shall be set aside as legal reserves after the Company has paid tax and made up for the accumulated loss in accordance with the law. However, when the legal reserves have reached the Company's paid-in capital, no further provision is necessary. The remainder shall be set aside or reversed as a special reserves in accordance with the law. If there is any remaining balance, it shall be retained together with the accumulated undistributed earnings. Except for business needs and tax consideration, the Board of Directors shall prepare a proposal for the appropriation of earnings and submit it to the shareholders' meeting for resolution on the distribution of dividends to shareholders.

The Company is a stable and growing company. In order to meet the operational development plan and achieve the goal of the diversified operation, and to consider the Company's future capital needs and long-term financial planning, incase shareholder dividend is distributed, the cash dividend portion should be no less than 10% of the shareholder dividend distributed that year.

The Company has provided for and reversed the special reserves in accordance with JinKuan-Zheng-Fa-Zi No. 1010012865 and the "Questions and Answers on the Application of International Financial Reporting Standards (IFRSs) to the Provision of Special Reserve.” If there is a subsequent reversal of the balance of the other shareholders' equity reduction, the reversed portion of the surplus may be distributed.

The legal reserve should be appropriated until the remaining balance reaches the Company's total paid-in capital. The legal reserves may be used to make up loss. If the Company has no deficit, the excess of legal reserves over 25% of the paid-in capital may be distributed in cash in addition to capitalization.

At the annual shareholders' meetings held on June 10, 2020 and June 10, 2019, the Company resolved the following distribution of earnings for fiscal years 2019 and 2018, respectively:

Legal reserves Cash dividends	Proposalofearnings distribution 2019 2018 $ 39,956 $ 32,924 179,987 179,987	Dividends pershare (yuan)	Dividends pershare (yuan)
	2019 $ 39,956 179,987	2019 $ 0.40	2018
			$ 0.40

On March 23, 2021, the Board of Directors proposed the following distribution of earnings for FY2020:

for FY2020:
Legal reserves Cash dividends	Proposal of earnings distribution $ 17,435 112,492	Dividends per share (yuan)
		$ 0.25

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(III)Other equities items

1. Exchange differences on translation of financial statements of foreign operating entities

entities
Balance at the beginning of the year Generated in the current year Exchange differences arising from the translation of net assets of foreign operating entities Income tax generated out of exchange differences arising from the translation of net assets of foreign operating entities Balance at the end of the year	2020 ( $ 37,898 ) ( 150,851 ) 30,170 ($ 158,579)	2019
		$ 22,727 ( 75,782 ) 15,157 ($ 37,898)

1. Unrealized valuation profit or loss on financial assets measured at fair value through other comprehensive income or loss

Balance at the beginning of the year Generated in the current year Unrealized profit or loss Equity instrument Income tax effects Balance at the beginning of the year	2020 $ 839,131 ( 144,285 ) 725 $ 695,571		2019
			$ 588,907 250,199 25 $ 839,131

XV. Employee benefits and depreciation expenses

Employee benefit expense Salary expenses Labor and health insurance expenses Pension scheme expenses Remuneration Paid to Directors Others Depreciation expense			2020		Total $ 9,986 908 558 3,720 1,000 $ 16,172 $ 8,520			2019
	Under operating costs $ 1,597 107 - - - $ 1,704 $ 8,000		Under operating expenses $ 8,389 801 558 3,720 1,000 $ 14,468 $ 520			Under operating costs $ 1,282 158 - - - $ 1,440 $ 8,626		Under operating expenses $ 8,573 760 563 3,720 1,000 $ 14,616 $ 559		Total
										$ 9,855 918 563 3,720 1,000 $ 16,056 $ 9,185

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The Company contributes a fixed amount of $1,000 thousand to employees' remuneration and no more than 3% to directors' remuneration based on the Company's profit for the year (profit is defined as earnings before deduction of employee and director's remuneration).

On March 23, 2021 and March 19, 2020, the Board of Directors resolved to allocate the following compensation to employees and directors for the years 2020 and 2019:

Number of allotments resolved by the Board of Directors Recognition of financial statements	2020 Employees’ cash remuneration Director remuneration $ 1,000 $ 3,720 $ 1,000 $ 3,720	2020 Employees’ cash remuneration Director remuneration $ 1,000 $ 3,720 $ 1,000 $ 3,720	2019	2019	2019
	Employees’ cash remuneration $ 1,000 $ 1,000		Employees’ cash remuneration $ 1,000 $ 1,000	Director remuneration
					$ 3,720 $ 3,720

If there is any change in the amount of the annual financial report after its issuance, the change in accounting estimate is treated as an adjustment in the following year.

There was no difference between the actual amount of employees' and directors' remuneration allotted in 2019 and 2018 and the amount recognized in the financial statements of 2019 and 2018.

For information on the remuneration of employees and directors as resolved by the Board of Directors in 2020 and 2019, please visit the Market Observation Post System of the Taiwan Stock Exchange.

XVI. Income tax

(I) Income tax expense recognized in profit or loss

Income tax expense is mainly composed by:

Current income tax Generated in the current year Tax on undistributed earnings Adjustments to prior years Deferred income tax Generated in the current year Income tax expense recognized in profit or loss		2020 $ 32,113 9,006 - 41,119 5,631) $ 35,488		2019
	(		(	$ 38,957 6,434 98) 45,293 44,252 $ 89,545

The reconciliation of accounting income to income tax expense is as follows:

Net profit before tax Income tax expense on net income before income tax at the statutory rate (20%)		2020 $ 209,608 $ 41,922		2019
				$ 489,104 $ 97,821

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(II) (III)	Non-deductible expenses for tax purposes 13 17 Tax exempted income ( 15,453 ) ( 14,629 ) Tax on undistributed earnings 9,006 6,434 Adjustments to current income tax expense in prior years - ( 98) Income tax expense recognized in profit or loss $ 35,488 $ 89,545 Income tax expense (profit) recognized in other comprehensive income 2020 2019 Deferred income tax Generated in the current year －Exchange differences on translation of financial statements of foreign operating entities ( $ 30,170 ) ( $ 15,157 ) －Unrealized valuation profit or loss on financial assets measured at fair value through other comprehensive income or loss ( 725) ( 25) ($ 30,895) ($ 15,182) Deferred income tax assets and liabilities Change on deferred income tax assets and liabilities: 2020	Non-deductible expenses for tax purposes 13 17 Tax exempted income ( 15,453 ) ( 14,629 ) Tax on undistributed earnings 9,006 6,434 Adjustments to current income tax expense in prior years - ( 98) Income tax expense recognized in profit or loss $ 35,488 $ 89,545 Income tax expense (profit) recognized in other comprehensive income 2020 2019 Deferred income tax Generated in the current year －Exchange differences on translation of financial statements of foreign operating entities ( $ 30,170 ) ( $ 15,157 ) －Unrealized valuation profit or loss on financial assets measured at fair value through other comprehensive income or loss ( 725) ( 25) ($ 30,895) ($ 15,182) Deferred income tax assets and liabilities Change on deferred income tax assets and liabilities: 2020
		( $ 15,157 ) ( 25) ($ 15,182)

2020
Deferred income tax assets Temporary difference Unrealized exchange difference Exchange differences on translation of financial statements of foreign operating entities	Balance at the beginning of the year $ 326 9,476 $ 9,802	Recognition in profit or loss ( $ 68 ) - ($ 68)	Other comprehensive income recognized $ - 30,170 $ 30,170	Balance at the beginning of the year
		( (			$ 258 39,646 $ 39,904

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Balance at the beginning of the year Deferred income tax liabilities Temporary difference Investment profit or loss recognized under the equity method $ 539,985 Financial assets measured at fair value through other comprehensive income or loss 9,692 Lease incentives 12,882 Land value increment tax 439,917 $ 1,002,476 2019 Balance at the beginning of the year Deferred income tax assets Temporary difference Unrealized exchange difference $ - Exchange differences on translation of financial statements of foreign operating entities - $ - Deferred income tax liabilities Temporary difference Investment profit or loss recognized under the equity method $ 495,586 Exchange differences on translation of financial statements of foreign operating entities 5,681 (continued from next page)	Recognition in profit or loss ( $ 5,077 ) - ( 622 ) - ($ 5,699) Recognition in profit or loss $ 326 - $ 326 $ 44,399 -	Other comprehensive income recognized $ - ( 725 ) - - ($ 725) Recognition in others Consolidated profit or loss $ - 9,476 $ 9,476 $ - ( 5,681 )	Balance at the beginning of the year	Balance at the beginning of the year
			$ 534,908 8,967 12,260 439,917 $ 996,052 Balance at the beginning of the year
		(		$ 326 9,476 $ 9,802 $ 539,985 -

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(continued from previous page) Balance at the beginning of the year Deferred income tax liabilities Financial assets measured at fair value through other comprehensive income or loss 9,717 Lease incentives 12,703 Land value increment tax 439,917 $ 963,604	Recognition in profit or loss - 179 - $ 44,578	Recognition in others Consolidated profit or loss ( 25 ) - - ($ 5,706)	Balance at the beginning of the year	Balance at the beginning of the year
		( (		9,692 12,882 439,917 $ 1,002,476

(IV) The Company's income tax returns for 2018 have been examined by the tax authorities. XVII. Earnings per share

Earnings per share
Basic earnings per share		2020 $ 0.39	Unit: NTD per share 2019 $ 0.89

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

per share were as follows:
Net profit for the period (numerator) Weighted average common shares (denominator)		2020 $ 174,120 2020 449,968

XVIII. Capital risk management

The Company conducts capital management to ensure that the Company can maximize shareholder returns by optimizing debt and equity balances while continuing to operate.

The capital structure of the Company consists of the Company's equity (i.e., capital stock, retained earnings, and other equity items).

The Company's management regularly reviews the capital structure and considers the cost of capital and the risks associated with each type of capital. The Company may balance its overall capital structure by adjusting dividend distribution and issuing new shares.

XIX. Financial instruments

• (I) Fair value information - financial instruments not measured at fair value

The Company's management considers the carrying amounts of financial assets and liabilities that are not measured at fair value to approximate their fair values.

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• (II) Fair value information - financial instruments measured at fair value on a recurring basis

• Fair value hierarchy

Fair value hierarchy
December 31, 2020 Financial asset measured at fair value through profit or loss Fund beneficiary certificate Financial assets measured at fair value through other comprehensive income or loss Investment in equity instruments －Domestic listed (over-the-counter) equities －Equities not-listed (over-the counter) in the domestic or foreign markets December 31, 2019 Financial asset measured at fair value through profit or loss Fund beneficiary certificate Financial assets measured at fair value through other comprehensive income or loss Investment in equity instruments －Domestic listed (over-the-counter) equities －Equities not-listed (over-the counter) in the domestic or foreign markets		Level 1 $ 111,308 $ 1,527,000 - $ 1,527,000 Level 1 $ 110,856 $ 1,662,674 - $ 1,662,674		Level 2 $ - $ - - $ - Level 2 $ - $ - - $ -		Level 3 $ - $ - 1,074,934 $ 1,074,934 Level 3 $ - $ - 1,083,545 $ 1,083,545		Total
								$ 111,308 $ 1,527,000 1,074,934 $ 2,601,934 Total
								$ 110,856 $ 1,662,674 1,083,545 $ 2,746,219

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

84

1. Reconciliation of financial instruments measured at fair value in Level 3

2. 2020

2020
Financial asset Balance at the beginning of the year Recognized in other comprehensive income (unrealized valuation profit or loss on financial assets measured at fair value through other comprehensive income) Balance at the beginning of the year 2019 Financial asset Balance at the beginning of the year Recognized in other comprehensive income (unrealized valuation profit or loss on financial assets measured at fair value through other comprehensive income) Balance at the beginning of the year	Investments in equity instruments measured at fair value through other comprehensive income or loss
	$ 1,083,545 ( 8,611) $ 1,074,934 Investments in equity instruments measured at fair value through other comprehensive income or loss
		$ 994,996 88,549 $ 1,083,545

1. Valuation basis and assumptions used to measure fair value

2. (1) The fair values of financial instruments with standard terms and conditions and traded in active markets are determined by reference to quoted market prices (including listed (over-the-counter) equities and beneficiary certificates of openend funds, etc.).

3. (2) The Company's financial assets measured at fair value in Level 3 are unlisted stocks measured at fair value using the income, market and asset methods. The major unobservable inputs include 19.68% and 21.45% of discount for lack of control as of the year end of December 31, 2020 and 2019, respectively, and 16.54% to 26.10% and 16.58% to 22.67% of discount for the year ended December 31, 2020 and 2019, respectively, for the lack of marketability risk. The fair value of the investments would decrease by $10,403 thousand and $10,551 thousand, respectively, when the discount for the absence of control increases by 1%, and by $13,094 thousand and $13,040 thousand, respectively, when the discount for the lack of marketability increases by 1%.

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(III) Types of financial instruments

Types of financial instruments
Financial asset Financial asset measured at fair value through profit or loss Financial assets measured at amortized cost (Note 1) Financial assets measured at fair value through other comprehensive income or loss Financial liability Measured at amortized cost (Note 2)	December 31, 2020 $ 111,308 1,475,905 2,601,934 226,258	December 31, 2019
		$ 110,856 1,451,829 2,746,219 218,054

• Note 1: The balance consists of cash and cash equivalents, financial assets measured at amortized cost, other receivables, refundable deposits and long-term receivables measured at amortized cost.

• Note 2: The balance includes financial liabilities measured at amortized cost, such as accounts payable, certain other payables and deposits received.

• (IV) Financial risk management objectives and policies

The Company's major financial instruments include equity investments, cash and cash equivalents, time deposits with original maturities of more than three months, accounts receivable, other receivables, notes payable, accounts payable and other payables. The Company's management manages all operations and is responsible for identifying, evaluating and hedging the financial risks associated with the Company's operations to ensure that appropriate measures are taken in a timely and effective manner. Such risks include market risk (including interest rate risk and other price risks), credit risk and liquidity risk.

1. Market risk

2. (1) Interest rate risk

The time deposits held by the Company are mainly fixed-rate deposits; therefore, the impact of interest rate risk on financial assets is limited.

• (2) Other price risk

The Company incurs price risk as a result of investing in the Fund's beneficial certificates and equities. If the investment price increases/decreases by 2%, the Company's after-tax income and loss will increase/decrease by NTD2,226 thousand and NTD2,217 thousand for 2020 and 2019, and the after-tax other comprehensive income or loss will increase/decrease by NTD52,039 thousand and NTD54,924 thousand, respectively.

1. Credit risk

86

Credit risk refers to the risk of financial loss resulting from the counter-party's default on contractual obligations. As of the balance sheet date, the Company's maximum exposure to the credit risk of financial loss due to non-performance by counter-parties is mainly from the carrying amount of financial assets recognized in the balance sheet. The Company's policy is to deal only with creditworthy counterparties and collect sufficient security deposits from lessees when signing operating lease agreements to mitigate the risk of financial loss arising from default.

The credit risk of bank deposits is limited because most of the counterparties are banks with certain credit ratings assigned by international credit rating agencies.

1. Liquidity risk

The Company manages and maintains sufficient cash and cash equivalents to support its operations and mitigate the impact of cash flow fluctuations. The Company also maintains some line of credit and continuously monitors expected and actual cash flows to manage liquidity risk.

As of December 31, 2020 and 2019, the Company has a line of credit to issue commercial paper financing of NTD400,000 thousand.

The following table details the analysis of the remaining contractual maturities of the Company's non-derivative financial liabilities with contractual repayment periods, based on the earliest possible date on which the Company could be required to make repayments and the undiscounted cash flows of the financial liabilities.

Accounts payable Other payables Deposits received Accounts payable Other payables Deposits received					December31,2020	December31,2020
	Immediate to within 1 month $ 3,181 107,525 - $ 110,706		1 to 6 months $ - 7,460 - $ 7,460		6 to 12 months 1 to 5 years $ 48 $ - 5,246 - - 40,002 $ 5,294 $ 40,002 December 31, 2019		More than 5 years $ - - 67,264 $ 67,264	Total undiscounte d cash flows
									$ 3,229 120,231 107,266 $ 230,726
	Immediate to within 1 month $ 2,529 100,430 - $ 102,959		1 to 6 months $ - 7,751 - $ 7,751		6 to 12 months $ 60 5,248 - $ 5,308	1 to 5 years $ - - 38,118 $ 38,118	More than 5 years $ - - 69,048 $ 69,048	Total undiscounte d cash flows
									$ 2,589 113,429 107,166 $ 223,184

87

XX. Related party transaction

(I) Names of related parties and their relationships Related Party Disclosures Relationship with the Company Others Chairman, Directors, and Key Management Personnel of the Company

(II) There were no significant transactions between the Company and its related parties in 2020 and 2019.

(III) Key Management Compensation Short-term employee benefits Post-employment benefits		2020 $ 6,633 106 $ 6,739		2019
				$ 6,388 95 $ 6,483

XXI. Information on foreign currency assets and liabilities with significant effect The following information is expressed in aggregate in foreign currencies other than the Company's functional currency. The exchange rates disclosed represent the rates at which such foreign currencies were converted to the functional currency. The foreign currency assets and liabilities with significant effect are as follows:

December 31, 2020 Foreign currency assets Monetary items Financial assets measured at amortized cost CNY Non-monetary items Financial assets measured at fair value through other comprehensive income or loss USD Investments accounted for using the equity method USD Foreign currency liability None	Foreign currency $ 4,596 3,474 $ 100,321	Exchange rate 4.377(CNY: NTD) 28.48(USD: NTD) 28.48(USD: NTD)	Carrying amount
			$ 20,117 98,933 $ 2,857,136

88

December 31, 2019 Foreign currency assets Monetary items Financial assets measured at amortized cost CNY Non-monetary items Financial assets measured at fair value through other comprehensive income or loss USD Investments accounted for using the equity method USD Foreign currency liability None	Foreign currency $ 4,497 3,421 101,180	Exchange rate 4.305(CNY: NTD) 29.98(USD: NTD) 29.98(USD: NTD)	Carrying amount
			$ 19,359 102,560 3,033,370

XXII. Other Matters

The Company received a government subsidy of $952 thousand (recorded as other income) in accordance with the "Regulations of the Ministry of Economic Affairs for the Relief and Revitalization of Industries Affected by COVID-19 and Experiencing Operational Difficulties.” Due to the impact of COVID-19, the global economic situation is in severe recession as widescale lockdown were performed everywhere, which also affected the Company’s business, especially the education and entertainment and its related revenues took great hits. The situation has improved since the situation with COVID -19 has normalized. Also, please refer to note 12 for the effect on lease income.

89

XXIII. Other disclosures

• (I) Information on major transactions and (II) re-investment:

• Loan of funds to others: None.

• Endorsement and guarantee for others: None.

• Securities held at the end of the period (excluding investment in subsidiaries, associates and joint venture): Appendix I.

• Cumulative purchase or sale of the same securities amounting to at least NTD300 million or more than 20% of the paid-in capital: None.

• Acquisition of real estate amounting to at least NTD300 million or more than 20% of the paid-in capital: None.

• Disposal of real estate amounting to at least NTD300 million or more than 20% of the paid-in capital: None.

• Purchase or sale of goods with related parties amounting to at least NTD100 million or more than 20% of the paid-in capital: None.

• Receivables from related parties amounting to at least NTD100 million or more than 20% of the paid-in capital: None.

• Derivative transactions: None.

• Name of investee company, location, etc. (excluding Mainland China investee company): Appendix II.

• (III) Information on Mainland China investment: None.

• (IV) Information on major shareholders: Please refer to Appendix III for the names, amounts and percentages of shares held by shareholders with 5% or more shares.

XXIV.Information on the departments

The information provided to the chief operating decision maker for allocating resources and measuring departmental performance focuses on the type of product or service delivered or provided. The departments of the Company to be reported are as follows:

Leasing department - engaged in the leasing of commercial buildings.

Education and entertainment department - engaged in the operation of movie theaters and amusement arcades.

90

(I) Revenue of each department and operating results

Revenue from external customers Depreciation expense segment profit or loss Interest income General income and benefits of the Company General expenses and loss of the Company Profit before taxation			2020
		Lease department $ 186,054 $ 7,380 $ 150,439	Education and entertainment department $ 78,637 $ 620 $ 17,903		Total
				(	$ 264,691 $ 8,000 $ 168,342 12,212 85,637 56,583) $ 209,608

Revenue from external customers Depreciation expense Segment profit or loss Interest income General income and benefits of the Company General expenses and loss of the Company Profit before taxation			2019
		Lease department $ 209,368 $ 7,945 $ 170,910	Education and entertainment department $ 139,183 $ 681 $ 34,827		Total
				(	$ 348,551 $ 8,626 $ 205,737 13,170 303,771 33,574) $ 489,104

The revenue reported above is generated from transactions with external customers. There were no inter-department sales for 2020 and 2019.

Profit or loss of each department represents department revenues less costs and expenses; department costs and expenses represent costs and expenses related to the generation of department revenues, excluding investment loss and general expenses. This measure is provided to the chief operating decision maker to allocate resources to departments and measure their performance.

(II) Total assets across departments

Total assets across departments
Segment assets Investment The Company’s general assets Total assets		December 31, 2020
		Lease department $ 1,210,800	Education and entertainment department $ 120,663		Total
					$ 1,331,463 5,459,070 1,989,591 $ 8,780,124

91

Segment assets Investment The Company’s general assets Total assets		December 31, 2019	December 31, 2019
		Lease department $ 1,216,519	Education and entertainment department $ 121,283		Total
					$ 1,337,802 5,779,589 1,936,506 $ 9,053,897

• (III) Regional information

The Company's 2020 and 2019 revenues were derived from its home country, so no regional information is available.

(IV) Information on important customer

Customers (all of which are in the leasing business) representing more than 10% of the Company's operating income are as follows:

Customer Customer A Customer B Customer C	2020	% of operating income 27 16 13	2019
	Amount $ 71,040 42,092 35,099		Amount $ 78,480 48,258 41,238	% of operating income
				23 14 12

92

Unit: NTD thousand

Wan Hwa Enterprise Company Ltd.

Securities held at the end of the period

December 31, 2020

Appendix I

Companies held	Types and names of securities	Relationships with the securities issuers	Account categories		End of period	End of period		Remarks
				Thousands of shares/Thousands of units	Carrying amount	Shareholding ratio	Fair value
Wan Hwa Enterprise Company Ltd.	Equities and fund beneficiary certificate First Hotel Company Ltd. Capital Securities Corp. Mega Financial Holding Co., Ltd. Taishin Financial Holdings Co., Ltd Chunghwa Telecom Co., Ltd Prudential Financial Money Market Fund SinoPac TWD Money Market Fund Today's Department Store Company Ltd. Dah Chung Bills Finance Corp. Kubo Investment Corporation Forward Time International, Ltd Mandarin Investment Corporation	－ － － － － － － The Chairman of the Company is the legal representative of the Company. － － － －	Financial assets measured at fair value through other comprehensive profit or loss - non-current Financial assets measured at fair value through other comprehensive profit or loss - non-current Financial assets measured at fair value through other comprehensive profit or loss - non-current Financial assets measured at fair value through other comprehensive profit or loss - non-current Financial assets measured at fair value through other comprehensive profit or loss - non-current Financial asset measured at fair value through profit or loss - current Financial asset measured at fair value through profit or loss - current Financial assets measured at fair value through other comprehensive profit or loss - non-current Financial assets measured at fair value through other comprehensive profit or loss - non-current Financial assets measured at fair value through other comprehensive profit or loss - non-current Financial assets measured at fair value through other comprehensive profit or loss - non-current Financial assets measured at fair value through other comprehensive profit or loss-non-current	99,001 9,907 50 19 1 3,557 3,890 5,082 33,248 1,985 1,962 377	$ 1,390,957 134,238 1,484 259 62 56,755 54,553 496,699 238,193 218,412 98,933 22,697	19.80 0.46 - - - - - 19.80 7.38 9.93 16.21 1.89	$ 1,390,957 134,238 1,484 259 62 56,755 54,553 496,699 238,193 218,412 98,933 22,697

93

Wan Hwa Enterprise Company Ltd. Name of investee company, location, etc. January 1 through December 31 of 2020

Appendix II

Units: except for USD, which is in dollar, NTD is in thousands.

Name of investor	Name of investee	Locations	Main business activities	Initial amount of investment	Initial amount of investment	Holding	at the end of the period	at the end of the period	Profit or loss of the investee company for theperiod	Investment profit or loss recognized by the Company	Remarks
				End of the period	End of the previous period	Numbers of shares (in thousands)	%	Carrying amount
Wan Hwa Enterprise Company Ltd. Wan Hwa Enterprise Company Ltd.	Today's Hotel Corporation Wan Hwa International Investment Company Ltd.	U.S.A British Virgin Islands	Tourist Hotel Mainly focused on overseas real estate investment	US$ 10,200,000 US$ 4,973,470	US$ 10,200,000 US$ 4,973,470	10,200 497	30.36 49.87	$ 2,591,004 266,132	( $ 104,429 ) 12,677	( $ 31,705 ) 6,322	Note Note

Note: Recognized on the basis of the financial statements audited by the accountants for year 2020.

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Wan Hwa Enterprise Company Ltd.

Name of major Shareholders

December 31, 2020

Appendix III

Unit: Shares

Name of major shareholder	Share	Share
	No. of Shares Held	Shares Ratio
First Hotel Company Ltd. Today's Department Store Company Ltd. Zen Fong Investment Corporation LeeMingInvestment Corporation	89,809,699 89,809,699 52,258,768 39,503,789	19.95% 19.95% 11.61% 8.77%

• Note 1: The information on major shareholders in this table is based on the last business day of the quarter of Taiwan Depository & Clearing Corporation in which the shareholders held 5% or more of the Company's common shares and preferred shares that had been delivered without physical registration (including treasury shares). The share capital recorded in the Company's financial statements and the actual number of shares delivered without physical registration may differ from the basis of preparation of the calculation.

• Note 2: The above information is revealed by the trustees' individual subaccounts of the trustees opened by the trustees if the stockholders deliver their holdings to the trust. As for shareholders who hold more than 10% of insider shares in accordance with the Securities and Exchange Act, their shareholdings include their own shares plus the shares they hold in trust and have the right to decide the use of the trust property, etc. Please refer to the Market Observation Post System for information on insider shareholdings.

95

Wan Hwa Enterprise Company Ltd.

Financial assets measured at fair value through profit or loss - detail table on the current account December 31, 2020

Detail table I

Units: except for unit price which is in New Taiwan Dollar, the rest is in thousand of New Taiwan Dollars.

Names of the financial instruments Prudential Financial Money Market Fund SinoPac TWD Money Market Fund Total	Number of shares or units (Thousands of shares/Thous ands of units) 3,557 3,890	Acquisition costs $ 50,000 47,842 $ 97,842	Fair value	Fair value	Fair value
			Unit price (dollar) 15.9549 14.0236	Total amount
					$ 56,755 54,553 $ 111,308

96

Unit: NTD thousand

Wan Hwa Enterprise Company Ltd.

Financial assets measured at fair value through other comprehensive income - detail table of the non-current changes

2020

Detail table II

Name Listed (over-the-counter) equities First Hotel Company Ltd. Capital Securities Corp. Mega Financial Holding Co., Ltd. Taishin Financial Holdings Co., Ltd Chunghwa Telecom Co., Ltd Not-listed (over-the-counter) equities Today's Department Store Company Ltd. Dah Chung Bills Finance Corp Kubo Investment Corporation Forward Time International, Ltd Mandarin Investment Corporation Total	Balance at the beginning of the year Numbers of shares (in thousands) Fair value 99,001 $ 1,549,358 9,907 111,452 50 1,525 19 277 1 62 1,662,674 5,082 494,764 33,248 249,876 1,985 212,875 1,962 102,560 377 23,470 1,083,545 $ 2,746,219	Balance at the beginning of the year Numbers of shares (in thousands) Fair value 99,001 $ 1,549,358 9,907 111,452 50 1,525 19 277 1 62 1,662,674 5,082 494,764 33,248 249,876 1,985 212,875 1,962 102,560 377 23,470 1,083,545 $ 2,746,219	Increase during the year (Note 1) Numbers of shares (in thousands) Amount - $ - - 22,786 - - - - - - 22,786 - 1,935 - - - 5,537 - - - - 7,472 $ 30,258	Increase during the year (Note 1) Numbers of shares (in thousands) Amount - $ - - 22,786 - - - - - - 22,786 - 1,935 - - - 5,537 - - - - 7,472 $ 30,258	Decrease during the year (Note 1) Numbers of shares (in thousands) Amount - $ 158,401 - - - 41 - 18 - - 158,460 - - - 11,683 - - - 3,627 - 773 16,083 $ 174,543	Decrease during the year (Note 1) Numbers of shares (in thousands) Amount - $ 158,401 - - - 41 - 18 - - 158,460 - - - 11,683 - - - 3,627 - 773 16,083 $ 174,543	Balance at the beginning of the year Numbers of shares (in thousands) Fair value 99,001 $ 1,390,957 9,907 134,238 50 1,484 19 259 1 62 1,527,000 5,082 496,699 33,248 238,193 1,985 218,412 1,962 98,933 377 22,697 1,074,934 $ 2,601,934	Balance at the beginning of the year Numbers of shares (in thousands) Fair value 99,001 $ 1,390,957 9,907 134,238 50 1,484 19 259 1 62 1,527,000 5,082 496,699 33,248 238,193 1,985 218,412 1,962 98,933 377 22,697 1,074,934 $ 2,601,934	Provision of guarantees or pledges (Note 2)	Remarks
	Numbers of shares (in thousands) 99,001 9,907 50 19 1 5,082 33,248 1,985 1,962 377		Numbers of shares (in thousands) - - - - - - - - - -		Numbers of shares (in thousands) - - - - - - - - - -		Numbers of shares (in thousands) 99,001 9,907 50 19 1 5,082 33,248 1,985 1,962 377

Note 1: The change in the current year's amount is a valuation adjustment based on the fair value measurement.

Note 2: None of the pledges were provided as collaterals.

97

Wan Hwa Enterprise Company Ltd.

Detail table of changes in investments accounted for by the equity method

2020

Detail table III

Unit: NTD thousand

Name Today's Hotel Corporation and Subsidiaries Wan Hwa International Investment Company Ltd. Total	Balance at the beginning of the year Numbers of shares (in thousands) Amount 10,200 $ 2,759,636 497 273,734 $ 3,033,370	Balance at the beginning of the year Numbers of shares (in thousands) Amount 10,200 $ 2,759,636 497 273,734 $ 3,033,370	Increase during the year Numbers of shares (in thousands) Amount - $ - - - $ -	Increase during the year Numbers of shares (in thousands) Amount - $ - - - $ -	Decrease during the year Numbers of shares (in thousands) Amount (Note 2) - $ 136,927 - 13,924 $ 150,851	Decrease during the year Numbers of shares (in thousands) Amount (Note 2) - $ 136,927 - 13,924 $ 150,851	Profit or loss in investment ( $ 31,705 ) 6,322 ($ 25,383)	Balance at the beginning of	Balance at the beginning of	Balance at the beginning of	the year Amount $ 2,591,004 266,132 $ 2,857,136	Market value or net equity (Note 3) Unit priceTotalamount $ 2,591,004 266,132 $ 2,857,136	Market value or net equity (Note 3) Unit priceTotalamount $ 2,591,004 266,132 $ 2,857,136	Provision of guarantees or pledges (Note4)	Remarks
								Numbers of shares (in thousands) 10,200 497	Shares Ratio (%) 30.36 49.87
	Numbers of shares (in thousands) 10,200 497		Numbers of shares (in thousands) - -		Numbers of shares (in thousands) - -							Unit price
															Note 1 Note 1

Note 1: Recognized on the basis of the financial statements audited by the accountants for the year 2020. Note 2: The decrease in the current year is due to the recognition of translation differences on the financial statements of foreign operating companies. Note 3: The net equity in the investees was calculated based on the financial statements of the investees and the Company's percentage of ownership. Note 4: None of the pledges were provided as collaterals.

98

Wan Hwa Enterprise Company Ltd. Other payables detail table December 31, 2020

Detail table IV Unit: NTD thousand

Item Dividends Employees’ remuneration and compensation and Directors’ compensation Others (Note) Total		Amount
		$ 105,596 8,884 5,751 $ 120,231

Note: The balance of each item did not exceed 5% of the balance of this category.

99

Wan Hwa Enterprise Company Ltd.

Deposits received detail table

December 31, 2020

Detail table V Unit: NTD thousand

Name of the customers Formosa International Hotels Green World Hotels Showtime Cinemas Inc. Flower Lounge Restaurant Eslite Spectrum Corporation Others (Note)		Amount
		$ 33,980 32,759 12,000 10,948 10,100 7,479 $ 107,266

Note: The balance of each item did not exceed 5% of the balance of this category.

100

Wan Hwa Enterprise Company Ltd.

Details table of the operating income

2020

2020
Detail table VI Item Rental income Income from rent Income from maintenance Education and entertainment Income from theater ticket sales Income from the arcade centers Income from advertisement Total	Unit: NTD thousand Amount $ 176,014 10,040 186,054 65,486 12,293 858 78,637 $ 264,691

101

Wan Hwa Enterprise Company Ltd.

Operating cost breakdown detail table

2020

Detail table VII

Unit: NTD thousand

Name Tax donation Depreciation Cleaning and sanitation service fee Maintenance fee Performance fee Rental expenses for arcade centers Others (Note)		Rental cost $ 18,578 7,380 3,392 3,648 - - 2,617 $ 35,615	Education and entertainment cost $ 1,945 620 485 292 48,328 8,591 473 $ 60,734		Total
					$ 20,523 8,000 3,877 3,940 48,328 8,591 3,090 $ 96,349

102

Wan Hwa Enterprise Company Ltd.

Operating Expense detail table

2020

2020
Detail table VIII Item Wages Miscellaneous expenses Tax donation Employees’ and Directors’ compensation Labor costs Others (Note) Total	Unit: NTD thousand Amount $ 8,389 8,579 2,752 4,720 2,227 3,735 $ 30,402

Note: The balance of each item did not exceed 5% of the balance of this category.

103

Wan Hwa Enterprise Company Ltd.

Table of employee benefits, depreciation and amortization expenses

2020 and 2019

Detail table IX

Unit: NTD thousand

Employee benefit expense Salary expenses Labor and health insurance expenses Pension scheme expenses Remuneration Paid to Directors Others Depreciation expense				2020		Total $ 9,986 908 558 3,720 1,000 $ 16,172 $ 8,520				2019
		Under operating costs $ 1,597 107 - - - $ 1,704 $ 8,000		Under operating expenses $ 8,389 801 558 3,720 1,000 $ 14,468 $ 520				Under operating costs $ 1,282 158 - - - $ 1,440 $ 8,626		Under operating expenses $ 8,573 760 563 3,720 1,000 $ 14,616 $ 559		Total
												$ 9,855 918 563 3,720 1,000 $ 16,056 $ 9,185

1. The average number of employees for both 2020 and 2019 was 25, of which the three directors were not also employees.

2. The average employee benefit expenses were $566 thousand and $561 thousand for 2020 and 2019, respectively.

3. The average employee’s compensation was $454 thousand and $448 thousand for 2020 and 2019, respectively. Change in Average Employee Salary Expense is 1.3%.

4. The performance evaluation and salary compensation of Directors and Managerial Officer are submitted to the Compensation Committee for discussion and resolution of the Board of Directors based on their individual performance and the Company's operating results for the current year. The remuneration of employees is based on the salary scale of the Company's employees and submitted to the Compensation Committee for discussion and resolution by the Board of Directors.

104

1. Latest Audited Consolidated Financial Statements of the Parent and Subsidiaries:[None]

2. Whether the Company and its subsidiaries have financial difficulties in the most

recent year up to the publication of this annual report:[None]

105

VII. Review and Analysis of Financial Position and Operating Performance, and Risk Management

I. Financial position:

I. Financial position:	I. Financial position:	I. Financial position:	I. Financial position:	I. Financial position:
Year Item	2020	2019	Difference
			Amount	%
Current asset	$ 1,527,565	$ 1,499,937	$27,628	1.84
Property, Plant and Equipment	350,906	353,059	（2,153）	（0.61）
Real estate investment -- Net	1,341,352	1,347,071	(5,719)	(0.42)
Other assets	5,560,301	5,853,830	(293,529)	(5.01)
Total assets	8,780,124	9,053,897	(273,773)	(3.02)
Current liabilities	144,242	141,651	2,591	1.83
Long-term liabilities	1,103,592	1,110,082	(6,490)	(0.58)
Total liabilities	1,247,834	1,251,733	(3,899)	(0.31)
Equity attributable to shareholders of the parent company	-	-	-	-
Share capital	4,499,678	4,499,678	-	-
Capital surplus	-	-	-	-
Retained earnings	2,495,620	2,501,253	(5,633)	(0.23)
Other adjustments to shareholders' equity	536,992	801,233	(264,241)	(32.98)
Total shareholders equity	7,532,290	7,802,164	(269,874)	(3.46)
Explanation: 1. The decrease in other assets was mainly due to the decrease in financial assets at fair value through other comprehensive income and valuation of period-end fair value using the equity method. 2. The decrease in other adjustment items of shareholders' equity was mainly due to the decrease in the exchange differences on translation of financial statements of foreign operations and unrealized valuation profit or loss on financial assets measured at fair value through other comprehensive income.

106

2. Financial performance

(1). Comparative analysis of financial performance

Unit: NTD thousand

Item	2020	2020	2019	2019	Increase/Decrease Amount	Increase/Decrease Amount	Change in % (%)
Operating income Operating cost Gross Margin Operating expenses Operating profit Non-operating income and expenditures Profit before taxation Income tax expense Net profit		$264,691 96,349 168,342 30,402 137,940 71,668 209,608 35,488 $174,120		$348,551 142,814 205,737 30,814 174,923 314,181 489,104 89,545 $399,559		$ (83,860) (46,465) (37,395) (412) (36,983) (242,513) (279,496) (54,057) $ (225,439)	(24.06) (32.54) (18.18) (1.34) (21.14) (77.19) (57.14) (60.37) (56.42)
Description of analysis: Operating income, costs and gross profit decreased over 2019 mainly due to the impact of the novel coronavirus pandemic in 2020. The global economy was in a severe decline, and the Companywas also affected.

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3. Cash flow

(1) Liquidity analysis in the past two years

Year Item	2020	2019	Increase (decrease) percentage (%)
Cash flow ratio (%)	77.77	94.10	-17.35
Cash flow adequacy ratio (%)	112.14	145.39	-22.87
Cash flow re-investment ratio (%)	-0.69	-0.47	-0.22
Analysis of percentage increase / decrease: Mainly due to the decrease over 2019in net cash flowfromoperating activities.

(2) Cash flow analysis for the coming year:

Unit: NTD thousand

				Unit: NTD thousand	Unit: NTD thousand
Opening cash balance Balance ○1	Estimated cash flow from operating activities of the year Net Cash Flow ○2	Estimated cash outflow for the year ○3	Estimated amount of cash surplus (shortfall) ○1＋○2－○3	Remedy for insufficient cash
				Investment plan	Financial plan
167,685	291,460	262,744	196,401	-	-

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1. impact of major capital expenditures on financial operations: [None]

2. Main Causes for Profits or Losses of the Investment Strategy in the Most Recent

Year, the Improvement Plans and the Investment Plans for the Coming Year:

[None]

1. Risks should be analyzed and assessed for the most recent years and as of the

publication date of the annual report:

• (1).Impact of interest rate, exchange rate fluctuation and inflation on the Company's profit and loss and the future responsive measures: The impact of interest rate, exchange rate change and inflation have little impact on the Company's income for 2020 and up to the date of publication of the annual report.

• (2).The Company's policy regarding high-risk investments, highly leveraged investments, loans to other parties, endorsements, guarantees and derivatives transactions is the main reason contributing to its profits and losses and the response measures to be taken in the futur e: The company does not engage in high-risk or high-leverage investment, capital loans to others, endorsement guarantees, and derivative transactions.

• (3).R&D projects and the projected R&D expenses. [None]

• (4).Effect on the Company's financial operatio ns of important policies adopted and changes in the legal environment at home and abroad, and measures to be taken in response. [None]

• (5).Effect on the Company's financial operations of developments in science and technology as well as industrial change, and measures to be taken in response. [None]

• (6).Effect on the Company's crisis management from changes in the Company's corporate image, and measures to be taken in response. [None]

• (7).Expected benefits and possible risks associated with any merger and acquisitions. [None]

• (8).Expected benefits and possible risks associated with any

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  - plant expansion. [Not applicable]

• (9).Risks associated with any consolidation of sales or purchasing operations, and mitigation measures being or to be taken. [Not applicable]

• (10).Effect upon and risk to the Company in the event a major quantity of shares belonging to a director or shareholder holding greater than a 10% stake in the Company has been transferred or has otherwise changed hands, and mitigation measures being or t o be taken. [None]

• (11).Effect upon and risk to Company associated with any change in governance personnel or top management. [None]

• (12).Litigation or non-litigation incidents. [None]

• (13).Other important risks, and mitigation measures being or to be taken. [None]

• Other important matters. [None]

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VIII. Special Matters to be Included

1. Information on Affiliates [None]

2. Private Placement of Securities in the Most Recent Year up to the Publication of this Annual Report: [None]

3. The Shares of the Company Held or Disposed of by Subsidiaries in the Most Recent Year up to the Publication of this Annual Report: [None]

4. Other important supplementary information:

5. (1). The appraisal basis for recognizing the assets and liabilities of the financial statements:

6. (i) The allowance for bad debts is recognized based on the assessment of recovery possibility of notes and accounts receivable. The Company's accounts receivable days are relatively short, and has received deposits, so no allowance for bad debts has been recognized.

7. (ii) As for the loss from allowance for obsolete inventory, the Company is not a production business, and has no inventory balance, and no loss from allowance for obsolete inventory has been recognized.

8. (2). The Company is in the service industry and therefore values fire protection, public safety, environmental sanitation, and customer service greatly and provides maintenance on time. The Company complies with the inspections of building safety and fire protection specified by the competent authority, and in addition to purchasing public liability insurance policies, there are accessibility facilities and film preview screens.

9. (3). The Company informs employees, executives and directors in accordance with the "Procedures for Handling Material Inside Information", and distributes relevant written information to them.

10. (4). The Company's key performance indicators: The company uses operating income as the key performance indicator. The operating income in 2020 was NT$264,691 thousand, which was 24.06% less than that of NT$348,551 thousand n 2019. Among them, rental income decreased by 11.14% and education and entertainment income decreased by 43.50%.

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IX. Events with material impact in accordance with Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act: [None]

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