NOTE: This English Translation Is for Reference Purposes Only and Not a Legally Definitive Translation of the Original Chinese Texts

NOTE: This English translation is for reference purposes only and not a legally definitive translation of the original Chinese texts. In the event a difference arises regarding the meaning herein, the original Chinese version shall prevail as the official authoritative version.

I. The Company’s spokesperson and acting spokesperson’s names, titles, phone numbers, and email addresses Spokesperson's name: Benjamin Title: Special Assistant to the Chairman David Metcalf Telephone: (886)4-2258-5388 Email address: [email protected] Name of Acting Spokesperson: Fu- Title: Corporate Governance Manager Sheng Ku Telephone: (886)4-2258-5388 Email address: [email protected] II. Name, title, phone number, and email address of litigation and non- litigation agents in the Republic of China Name: Wei-Chia Chen Title: Chairman and President Telephone: (886)4-2258-5388 Email address: [email protected] III. Address and phone number of head office, branches, and factories (I) The Company Name: Sports Gear Co., Ltd. Address: The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208 Telephone: (886)4-2258-5388 (II) Subsidiaries and branches Samoa Subsidiary Name: Sports Gear Co., Ltd. Address: Portcullis Chambers, P.O. Box 1225, Apia, Samoa Telephone: (886)4-2258-5388 British Virgin Islands Subsidiary Name: All Wells International Co., Ltd. Address: 3rd Floor, J&C Building Road Town, Tortola British Virgin Islands, VG1110 Telephone: (886)4-2258-5388 Seychelles Subsidiaries Name: Elephant Step Co., Ltd. Address: F20, 1st Floor, Eden Plaza, Eden Island, Seychelles. Telephone: (886)4-2258-5388 Name: Fongyuan International Co., Ltd.

Address: F20, 1st Floor, Eden Plaza, Eden Island, Seychelles. Telephone: (886)4-2258-5388 Taiwan Branch Name: Sports Gear Co., Ltd. Taiwan Branch Address: 3F, No. 266, Shizheng N. 5th Road, Xitun District, Taichung City Telephone: (886)4-2258-5388 Taiwan Subsidiary Name: Silk Invest International Co., Ltd. Address: 1F, No. 266, Shizheng N. 5th Road, Xitun District, Taichung City Telephone: (886)4-2258-5388 Vietnam Subsidiaries Name: Chi Hung Co., Ltd. Address: My Phuoc Industrial Park, Thoi Hoa Ward, Tân Uyên, Bình Dương Province, Vietnam Telephone: (84)2743-625022 Name: All Wells International Co., Ltd. Address: Road 81, Thuan Hoa Hamlet, Truong Mit Commue, Duong Minh Chau District, Tay Ninh Province, Vietnam Telephone: (84)2543-948427 Name: Can Sports Vietnam Co., Ltd. Address: Shun Ho Eup, Zhong Mi She, Dương Minh Châu District, Tây Ninh Province, Vietnam Telephone: (84)2763-721111 Name: Dai Hoa Co., Ltd. Address: Quarter 7, Uyen Hung Ward, Tan Uyen Town, Binh Duong Province, Vietnam Telephone: (84)2743-642773 Name: August Sports Co., Ltd. Address: No. 8 Road, Industrial Park, San Phuoc Industrial Zone, San Phuoc Fang, Bien Hoa City, Dong Nai Province, Vietnam Telephone: (84)2513-686850 Cambodian Subsidiaries Name: Can Sports Shoes Co., Ltd. Address: National Road No.5, Chamkar Svay Village, Sethey Commune, Samaky Meanchey District, Kampong Chhnang Province, Cambodia Telephone: (855)26777666

Name: Fireman Factory Co., Ltd. Address: National Road No.5, Chamkar Svay Village, Sethey Commune, Samaky Meanchey District, Kampong Chhnang Province, Cambodia Myanmar Subsidiary Name: Sports Gear (Myanmar)Co., Ltd Address: Lot No.(BA-1+2), Thilawa SEZ Zone B, Yangon Region, Myanmar. Indonesia Subsidiary Name: PT Can Sports Industrial Indonesia Address: Jalan Raya Kasokandel Km, Kel., Kec., Kab. Majalengka, Prop.Jawa Barat Portuguese Subsidiaries Name: SGP-Sports Gear Portugal, S.A. Address: Rua de Beduído nº8, Lote 9 | Eco Parque Empresarial de Estarreja | 3860-529 Estarreja | Portugal Telephone: (351)234 570 000 IV. The name, address, website, and telephone number of the stock transfer agency Name: Stock Agency Department, Yuanta Securities Co., Ltd. Website: http://www.yuanta.com.tw Address: B1F, No. 210, Section 3, Chengde Road, Taipei City Telephone: (886)2-2586-5859 V. Names, accountant firm name, addresses, websites, and telephone numbers of the accountants for the most recent financial statement Names of accountants: Accountant Amy Chiang, Accountant Rock Tseng CPA firm name: Deloitte Taiwan Website: http://www.deloitte.com.tw Address: 22nd Floor, No. 88, Section 1, Huizhong Road, Xitun District, Taichung City Telephone: (886)4-3705-9988 VI. The name of the exchange on which overseas securities are listed for trading and the method of inquiring for overseas securities information: Not applicable VII. Company Website: http://www.sportsgear.com.tw VIII. Profile of Board of Directors: Nationality Title Name or place of Primary experience (educational background) registration Chairman and Wei-Chia Chen Republic of Department of Business Administration, Fu Jen Catholic President China University

Nationality Title Name or place of Primary experience (educational background) registration Director of Sports Gear Samoa, Elephant, Fongyuan, and All Wells Chairman and CEO of Silk Invest, Chi Hung, All Wells, Can Sports Cambodia, Can Sports Vietnam, Dai Hoa Vietnam, August Sports Vietnam, Fireman, Sports Gear (Myanmar) Supervisor of PT Can Sports Industrial Indonesia SGP Director Chairman of Spread Idea Co., Ltd. Director of Chin Chin Human Resource Consulting Ltd. Director of X Man Footwear International Co., Ltd. Legal person director's representative of Match Sports International Co., Ltd. Director of Mu Mu Sports International Limited Director of Lu Lu Sports International Limited Director of Lesson 1 Company Limited Director of Power Rich International Ltd. Legal Person Director’s Representative of Huang Geun Construction Corp. Director of Nanshan Senior High School Chairman of Sports Gear Social Welfare Foundation Director Jialai Development Republic of Legal Person Director of Interactive Digital Technologies Inc. Co., Ltd. China Department of Economics, National Taiwan University Legal Person Director's Representative of Interactive Digital Republic of Thomas Wang Technologies Inc. China Director of Hitron Technologies Co., Ltd. President of Sanli International Investment Company Director Pure-Xu Real Estate Republic of Advertising Co., China Ltd. Executive Master of Business Administration (EMBA), Peking University Director of Pure-Burg General Contractors Co., Ltd. Chairman of Puquan Advertising Co., Ltd. Chairman of Puqun Advertising Co., Ltd. Chairman of Pure-Xu Real Estate Advertising Co., Ltd. Chairman of Pauian Archiland Advertising Co., Ltd. Chairman of Puhou Advertising Co., Ltd. Chairman of Puxin Advertising Co., Ltd. Chairman of Pauian Archiland Development Co., Ltd. Chairman of Huang Geun Construction Corp. Director of Puyuan Construction Co., Ltd. Republic of Chairman of Puchang Construction Co., Ltd. Thomas Lee China Director of Yinyan Creative Consulting Co., Ltd. Chairman of Park Group Investment Co., Ltd. Chairman of Pumeng Investment Co., Ltd. Chairman of Pu Ying Investment Co., Ltd. Chairman of Puyi Development Co., Ltd. Chairman of Puyi Construction Co., Ltd. Chairman of Pauian Real Estate Co., Ltd. Director of Zhuguan Construction Co., Ltd. Chairman of Sant Law International Corporation Supervisor of Ruxin Construction Co., Ltd. Supervisor of Dongdacheng Construction Co., Ltd. Director of Nanshan Senior High School Director of China University of Technology Department of Electrical Engineering, National Taipei Institute of Technology (renamed to National Taipei University of Technology) Chairman of Interactive Digital Technologies Inc. Chairman of Innoauto Technologies Inc. Republic of Director Davis Cheng Chairman of Artmo Inc. China Manager of Haitian Company Chairman and President of Hitron Technologies Co., Ltd. (2419) Chairman of Hitron Technologies Co., Ltd. Chairman of Hitron Technologies (Samoa) Co., Ltd.

Nationality Title Name or place of Primary experience (educational background) registration Chairman of Hitron Technologies (Suzhou Industrial Park) Co., Ltd. Chairman of Huaqi Communications Equipment (Shanghai) Co., Ltd. Chairman of Jieqi Trading (Suzhou) Co., Ltd. Chairman of Hitron Technologies (Vietnam) Co., Ltd. Chairman of Hitron Technologies (Netherlands) Co., Ltd. Master of Business, Graduate School of Business and Finance, Waseda University, Japan Manager, Yuanlin Branch, Mega International Commercial Bank Manager, Fengyuan Branch, Mega International Commercial Independent Republic of Bank Leo Hong Director China Senior VP, Mega International Commercial Bank Headquarters; Director of the Central Region Credit Management Center. Senior VP, Mega International Commercial Bank Headquarters; Manager of International Business Group Chief Auditor of Mega International Commercial Bank Bachelor’s Degree in Economics, National Taiwan University Director of China Development Asset Management Co., Ltd. Independent Republic of President of First Bank Long-I Liao Director China Chairman of the Trust Association of the Republic of China Director of China Development Financial Holding Corporation Independent Director of TCI Co., Ltd. Bachelor’s Degree in Law, National Taiwan University Director General of the Judicial Yuan Judge and President of Taiwan Shilin District Court Independent Tzung-Chen Chen Republic of Judge and President of the Taichung Branch of the Taiwan Director (Note) China High Court Judge and President of the High Court of Taiwan Judge and President of the Supreme Court Note: Independent director Mr. Dawn Ray Bean resigned on September 22, 2020. According to Article 14-2 of the Securities and Exchange Act, an independent director shall be elected to fill the vacancy. The term of office of the newly elected independent director shall be from the election at the extraordinary shareholders meeting on October 15, 2020 until November 7, 2022.

Table of Contents A. Letter to Shareholders ...... 1 B. Company Profile ...... 5 I. Date of Establishment ...... 5

II. Company History ...... 5 C. Corporate Governance Report ...... 6 I. Organizational system ...... 6

II. Information on directors, supervisors, presidents, vice presidents, senior vice presidents, managers of various departments and branch agencies ...... 11

III. Remuneration paid to directors, supervisors, presidents and vice presidents in the most recent year ...... 28

IV. Corporate governance operations ...... 36

V. Accountant fee ...... 70

VI. Information on change of accountant: No such situation...... 70

VII. The Company’s chairman, president, manager in charge of financial or accounting affairs, and those individuals who have worked at the firm of the CPA or its affiliate within the most recent year: No such situation...... 70

VIII. Changes to shareholding of directors, supervisors, managers, and major shareholders whose shareholding ratio exceeds 10% of the equity transfer and pledge loan in the most recent year and up to the printing date of the annual report ...... 70

IX. Information disclosing where there are related parties, spouses, or relationships of kinship within second degree among any of the top ten shareholders, and the relationship between them: ...... 73

X. The number of shares held by the Company, its directors, supervisors, managers, and businesses directly or indirectly controlled by the Company in the same investee company, and calculate the comprehensive shareholding ratio together ...... 74 D. Fundraising situation ...... 76 I. Capital and shares ...... 76

II. Profile of corporate bonds...... 81

III. Handling situation of preferred shares: No such situation...... 81

IV. Status of participation in the issuance of overseas depository receipts: No such situation...... 81

V. Handling situation of employee subscription right certificates: No such situation. .. 81

VI. Status of new restricted employee shares: No such situation...... 81

VII. M&A handling situation ...... 81

VIII. Processing for the issuance of new shares by transfer of shares of other companies: None 81

IX. Financing Plans and Implementation ...... 81 E. Operation Overview ...... 83 I. Business Activities ...... 83

II. Market, production, and sales overview ...... 92

III. Number of employees ...... 102

IV. Environmental protection expenditure information ...... 103

V. Employer-employee Relations ...... 105

VI. Important Contracts ...... 111 F. Financial overview ...... 115 I. Condensed financial information for the most recent five years ...... 115

II. Financial analysis ...... 118

III. Audit Committee Review Report of the Most Recent Financial Statement ...... 122

IV. Most recent annual report ...... 123 G. Financial Condition and Financial Performance Review and Risk Analysis. 178 I. Financial Condition ...... 178

II. Financial Performance ...... 178

III. Cash Flow ...... 180

IV. Effect of major capital expenditures on financial operations in the most recent year 182

V. 2013 investment policy, main causes for profits or losses, improvement plans and the investment plans for the most recent year ...... 182

VI. Risk analysis ...... 184

VII. Other important matters: None ...... 192

H. Special records ...... 193 I. Affiliate information ...... 193

II. In the most recent year and up to the printing date of the annual report, the status of private placement securities: No such situation...... 197

III. Status of holding or disposing of the Company’s stocks by subsidiaries in the most recent year and up to the printing date of the annual report: No such situation...... 197

IV. Other necessary supplementary explanations: No such situation...... 197

I. Matters that have significantly affected shareholders' equity and prices of securities pursuant to Article 36, Paragraph 2, Subparagraph 2 of the Securities and Exchange Act in the most recent year and up to the printing date of the annual report: None ...... 197 J. Significant discrepancies with Taiwan’s provisions on the protection of shareholder equity ...... 199

A. Letter to Shareholders

Dear shareholders, ladies, and gentlemen, hello!

2020 was a challenging year for Sports Gear KY; it was also a crucial year for transformation. Even in the most severe year of the COVID-19 pandemic, due to our solid corporate management capabilities, we still generated NT$13,514,535 thousand in operating revenue and a gross profit of NT$2,509,509 thousand. At the same time, we were also approved for overseas Taiwanese businesses seeking primary listing on the TWSE on December 15, 2020.

Although operating performance in 2020 is not as good as previous years, according to the World Economic Outlook announced by the International Monetary Fund in October 2020, the negative impact of the COVID-19 pandemic on global economic activities is greater than expected, and the pace of recovery will be slower than previously predicted. It predicts that the global economy will continue to go deeper into a recession in 2020, and global economic growth is projected to be –4.4%. However, since the beginning of 2021, the downward trend in global economic activities has gradually slowed. Countries are actively developing and administering vaccines, adopting emergency financial measures to maintain financial stability, and endeavoring to keep the supply chain open, all to avoid the breakdown of the global trade network. It is estimated that the global growth rate will reverse to 5.2% by 2021. In addition, Sports Gear KY focuses on manufacturing sports shoes, and sports events are often one of the important factors that stimulate consumption for sports products. Various sports events will resume starting in 2021: the UEFA European Football Championship will start in June; the Tokyo 2020 Summer Olympics will begin in July; and the Qatar FIFA World Cup is set for 2022. Sports Gear KY is cautious yet optimistic about its performance in 2021, and hopes to continue to engage in satisfactory business performance for all its shareholders.

Sports Gear KY will have primary listing on the TWSE on April 22, 2021. Although we are listed as a KY company, our operating headquarters is in Taiwan and orders are taken in Taiwan. The funds raised from the public offering will also be deposited in Taiwan’s financial institutions; the seven directors (including three independent directors) of our Board are all based in Taiwan. I believe that this makes Sports Gear KY worthy of the trust of every one of its shareholders. At the same time,

the listing is also the beginning of Sports Gear KY’s corporate social responsibility. We will further strengthen corporate governance in the future, and we will continue to unremittingly devote ourselves especially to the ESG areas of our latest version (3.0) of corporate governance, in order to achieve the sustainable development of Sports Gear KY.

On behalf of Sports Gear KY, I offer thanks to all of our shareholders for their continued support.

We wish you and your families peace and prosperity

Chairman: Sincerely, Wei-Chia Chen [Chapter]

I. 2020 Business Results Looking back on the past year, we see that governments around the world have adopted lockdowns and other social distancing measures due to the impact of the pandemic; the response measures have led to declines in brand retail sales volume, and consequently have reduced demand for manufacturing, resulting in idle factory production capacity and affecting production efficiency, and thereby leading to a decline in revenue. The net operating revenue in 2020 was NT$13.5 billion, a decrease of NT$3.7 billion from NT$17.2 billion in 2019. The report on the Company's operations in 2020 is as follows: (I) Business results: Unit: Thousands NT$ Amount of Accounting Change 2020 2019 increase items ratio (%) (decrease) Net operating 17,208,037 13,514,535 -3,693,502 -21.46% revenue Gross profit 2,509,509 3,705,062 -1,195,553 -32.27% Net profit 789,718 1,609,061 -819,342 -50.92% Net profit before 1,454,503 581,687 -872,816 -60.01% tax Net profit after 1,048,586 409,107 -639,479 -60.98% tax

(II) Financial Status and Profitability Analysis: Analysis item 2020 2019 2

Ratio of liabilities to assets 37.55 33.83 (%) Financial Ratio of long-term capital to 327.01 structure real estate properties, plants 339.56 and equipment (%) Current ratio (%) 279.01 263.72 Liquidity Quick ratio (%) 234.52 212.98 ROA (%) 2.51 5.87 ROE (%) 3.79 9.40 Profitability Net profit margin (%) 3.03 6.09 EPS (NT$) 2.35 6.02

(III) Production overview: The Group's production volume of finished shoes in 2020 was 32,749 thousand pairs, a decrease of 24.28% compared to 2019. Vietnam region accounted for 65.53%, and Cambodia accounted for 34.47%. The main production strategies for each region in 2021 are as follows:  21,459 pairs produced in Vietnam: In the future, it will continue to be the main production base of the Group; it will continue to improve production management and increase the proportion of automated equipment used.  11,290 pairs produced in Cambodia: By engaging process improvement, we will continue to improve our production technology capabilities and gradually expand production capacity.  In response to the global layout, we will establish a new production base in Indonesia in addition to the new production base in Myanmar. (IV) Research and development The Company continues to invest in the innovation of various processes. In 2020, our R&D investment amount was NT$404,900 thousand, accounting for 3.0% of the consolidated revenue, which is equivalent to 3.1% of that in 2019. The main investment is in the improvement of direct injection technology and improvement of various processes to improve innovation in production efficiency and production technology. In addition to setting up exclusive R&D centers in cooperation with major brands, the Company also closely interacts with brands from the product development phase, improves sample quality completion and sample delivery speed, and provides its brand customers with superior services and solutions. In order to enhance the ability of its direct injection production technology, the Company will set up a DI distribution center in Portugal for the development and trial-production of high-unit-price direct-injection shoes. 3

(V) Corporate Responsibility The Company continues to uphold humanistic care and love for sports, and cooperates with the operation of the Sports Gear Social Welfare Foundation to fulfill its social responsibilities through such social welfare activities as the 2020 Seeds of Hope—Sending Love to Rural Areas, medical and pandemic prevention equipment subsidies for National Taiwan University, free oral clinics for rural tribes, and Cross- Educational Talent—Dream Project. In addition, overseas factories have taken specific actions to implement energy-saving, waste-reduction, and resource-recycling, all to care for the earth.

II. Outlook and Development Strategy for 2021 With the resumption of various sports events in 2021, including the Tokyo Olympics, although orders have not fully recovered due to the resurgence of the pandemic in the first half of 2021, the effects of the Olympics in the second half of 2021 and the 2022 FIFA World Cup, which is expected to be held in November, will restore orders to pre-pandemic levels.

B. Company Profile I. Date of Establishment The Company was established on March 28, 2017 II. Company History Year Major events Established in Binh Duong Province, Vietnam, Chi Hung became the 2000 area’s first manufacturing base; it develops and manufactures all types of sports and casual shoes for Group A. Recognized by the Group A brand, Chi Hung became the first factory 2003 development center of Group A in Vietnam. Established in Vung Tau Province, Vietnam, All Wells entered into the 2005 field of football and American football OEMs, and introduced Group A and Group B ball manufacturing Established in Kampong Chhnang Province, Cambodia, Can Sports 2009 Cambodia began to implement multinational production layout, and introduced Group A into Cambodia for production. Established in Tây Ninh Province, Vietnam, Can Sports Vietnam became 2011 the OEM partner of Group B, and also set up a development center. Signed a production development agreement with Group D, established 2015 a development center in Vietnam, and started mass production at the Can Sports Cambodia plant in Cambodia Established in 2011 in Binh Duong Province, Vietnam, Dai Hoa Vietnam 2015 began development and production of Group E shoe products. Signed a manufacturing agreement with Group C, established a Group C 2015 development center, and became Group C's OEM partner. 2017 The annual output of the Group officially exceeded 40 million pairs. After reorganizing the Group following its return to Taiwan for listing, 2017 Sports Gear Co., Ltd. (hereinafter referred to as: Sports Gear-KY) was established. Sports Gear-KY purchased land for the Group headquarters in Taiwan 2018 and is expected to establish the Group operating headquarters in Taiwan. 2019 Established Group A core development center in Vietnam 2019 Won the CORE Innovation Cup award from Group A customers. Won the Shoe Dog Award of Process Innovation from Group B 2019 customers. 2020 Established Group B R&D center in Portugal. Consecutively won the CORE Innovation Cup award from Group A 2020 customers. TWSE review passed in December; gained approval for overseas 2020 Taiwanese businesses seeking primary listing on the TWSE.

C. Corporate Governance Report I. Organizational system (I) Organizational structure of the Company

Shareholders’ Meeting Audit Committee

Board of Remuneration Directors Committee

Audit Office

President's Office (CEO's President (CEO) Office)

Oversea Production Group Units Headquarters

Engineering Human Business Finance Accounting Management Resource IT Center Planning Center Center Center Center Center

(II) Business of major departments

Department Business duty

 Execute the resolutions of the shareholders' meeting, decide Board of Directors the Company's business plans and investment plans within the scope of authorization of the shareholders' meeting.  Formulate and regularly review the performance evaluation and remuneration policies, systems, standards, and Remuneration structures for directors and managers. Regularly assess and Committee determine the content and amount of remuneration for directors and managers and make recommendations to the Board of Directors.  Supervise the business and finances of the Group; Audit Committee responsible for the proper expression of financial statements and the effective implementation of internal controls.  Planning, implementation and revision of the internal control system.  The formulation and implementation of the Group's annual audit plan and other matters to be implemented in accordance with laws and regulations. Audit Office  Responsible for the supervision of the management and auditing of the subsidiaries of the Group.  Responsible for the improvement proposal and tracking of deficiencies in the Company's internal control, and planning and promoting the corporate governance system.  Define the functions and powers of each department of the business unit, as well as the appointment of department and project managers.  Externally handle relevant business on behalf of the President's Office Company. (CEO's Office)  Responsible for the integration of group resources and operational planning.  Provide legal advice, handle legal cases, and related legal matters for the Group.  Coordinate and calculate the actual costs of each brand of

Department Business duty

the Group; set group standards, and approve the Group's final quotation price.  New business evaluation and planning for the Group.  Formulate the Company's business strategy, set operational goals, and supervise and evaluate the implementation and performance of those operational goals.  Maintain relationships with investors.  Group stock affairs and reporting operations announced by competent authorities.  Coordinate development for the Group's new technologies, new materials, and automation.  Assist in technical consultation and implementation for the Group's new business.  Coordinate compliance and implementation of corporate governance regulations for companies that issue stock and are listed/OTC-traded in Taiwan.  Budget summary and control of monthly budget execution status and deviation analysis.  Coordinate development, inquiry, and price comparison/negotiation of various types of suppliers of the Group.  Review the purchase prices of mass-produced materials and Business Planning development materials of each plant of the Group. Center  Development of new customers for the Group and maintenance of relationships with existing customer.  Tracking and management of group accounts receivable and accounts payable.  Establishment and promotion of various engineering projects within the Group. Engineering  Handling of group factory expansion matters and Management Center engineering operations.  Coordinate the contracting and procurement of domestic and overseas projects, machinery and equipment, and 8

Department Business duty

general affairs of the Group.  General planning of the Group's human resources strategy and compliance with labor laws.  Establish and promote the Group’s recruitment and appointment system. Human Resource Center  The formulation, implementation, evaluation, and assessment of training methods used by the Group.  Responsible for confirming the effectiveness of human resource management and cultivation work of each department of the Group.  Overseeing the planning, design, and management of the computerized information system of the Group-the evaluation and purchase of information software and hardware.  Planning and establishment of the Group's overall information environment and management information system.  Development and management of the Group’s information system. IT Center  Information security control and supervision.  Education, training, and troubleshooting for information use.  Coordinate allocation of Company computer resources.  Maintenance of information equipment/Internet software and hardware equipment.  Import and maintenance of ERP and other application systems.  Web page planning and maintenance.  General financing of the Group's financial scheduling, capital utilization and management, financial planning, and Finance Center risk management for assets and liabilities.  Assist in the promotion and handling of the administrative orders of the competent authority. 9

Department Business duty

 In charge of general affairs at the Taiwan headquarters.  The preparation and analysis of financial statements and budgets of the business units of the Group which are provided for management and policy formulation of decision-making units.  Establishment, evaluation and implementation of the overall accounting system of the Group; conduct research on improvement.  Providing guidance and supervising the accounting policies and accounting principles of the reinvestment company.  Tax planning and reporting for the Group.  Responsible for discussion of the Group's financial policies and tax regulations in other countries. Accounting Center  Responsible for the analysis, design, evaluation, and planning of the investment structure of the Group's domestic and overseas investment businesses.  Oversee the Company's account processing, including collection and analysis of cost data.  The preparation of financial statements and the establishment, analysis, and interpretation of management- related financial data.  Review monthly operating results and provide management accounting information.  Comprehensively manage the Company's tax plans and implementation; compliance with tax laws and regulations.  Management and execution of production, procurement, Oversea Production sales, R&D, finance, administration, and other operations of Units overseas subsidiaries.

(III) Group Structure: See page 147: 8. Special Matters of Record. (IV) Risk Matters: See pages 142-146: G. Financial Status and Financial Performance Review and Risk Analysis.

II. Information on directors, supervisors, presidents, vice presidents, senior vice presidents, managers of various departments and branch agencies (I) Information on directors and supervisors 1. Director April 8, 2021 Unit: shares;%

Primary Spouse & Minor Shareholding by Nominee experience Concurrent Positions Held at Managers, Directors or Supervisors who are Nationality Shareholding when Elected Current shareholding Remarks Date First Date Term Shareholding Arrangement (educational Company or Other Companies spouses or within two degrees of kinship Title Name Gender or place of Elected Elected (Years) background) registration Shareholding Shareholding Shareholding Shares Shareholding ratio Shares Shares Shares Title Name Relationship ratio ratio ratio Department of Chairman of the Company The chairman Business Director of Sports Gear Samoa, concurrently serving as Administration, Elephant, Fongyuan, and All president of the Fu Jen Catholic Wells Company is mainly to University Chairman and CEO of Silk simplify the Invest, Chi Hung, All Wells, Can management Sports Cambodia, Can Sports organizational structure Vietnam, Dai Hoa Vietnam, and shorten the August Sports Vietnam, decision-making Fireman, Sports Gear process, and thereby to (Myanmar) quickly respond and Supervisor of PT Can Sports grasp market and Chairman Republic of 127,465,924 Industrial Indonesia customer demand, and, and Wei-Chia Chen Male 2017.3.28 2019.11.8 3 years 2,000,000 1.15 2,000,000 1.15 - - 73.15 - - - China (Note 1) SGP Director subsequently, respond President Chairman of Spread Idea Co., to the development of Ltd. the Company into a Director of Chin Chin Human group as well as its Resource Consulting Ltd. operational Director of X Man Footwear management needs. International Co., Ltd. The establishment of a Legal person director's chief operating officer, representative of Match Sports and establishment of a International Co., Ltd. vice president for each Director of Mu Mu Sports subsidiary, as well as International Limited the major operating Director of Lu Lu Sports decisions of the

Primary Spouse & Minor Shareholding by Nominee experience Concurrent Positions Held at Managers, Directors or Supervisors who are Nationality Shareholding when Elected Current shareholding Remarks Date First Date Term Shareholding Arrangement (educational Company or Other Companies spouses or within two degrees of kinship Title Name Gender or place of Elected Elected (Years) background) registration Shareholding Shareholding Shareholding Shares Shareholding ratio Shares Shares Shares Title Name Relationship ratio ratio ratio International Limited Company, all require Director of Lesson 1 Company discussion by the Limited Board. The Board has Director of Power Rich the power to elect the International Ltd. chairman, appoint and Legal Person Director’s dismiss the president, Representative of Huang Geun effect checks and Construction Corp. balances where Director of Nanshan Senior appropriate, and High School implement a Chairman of Sports Gear Social supervisory function. Welfare Foundation The Company will actively cultivate successor candidates for the President. If there are qualified professionals, succession will be enacted by election of qualified candidates, or the number of independent directors will be increased in accordance with the law. Jialai Legal Person Director of Republic of Development - 100,000 0.06 100,000 0.06 - - - - - Interactive Digital Technologies - - - - China Co., Ltd. Inc. Department of Legal Person Director's Director 2018.12.24 2019.11.8 3 years Economics, Representative of Interactive Republic of Thomas Wang Male ------National Taiwan Digital Technologies Inc. - - - - China University Director of Hitron

Primary Spouse & Minor Shareholding by Nominee experience Concurrent Positions Held at Managers, Directors or Supervisors who are Nationality Shareholding when Elected Current shareholding Remarks Date First Date Term Shareholding Arrangement (educational Company or Other Companies spouses or within two degrees of kinship Title Name Gender or place of Elected Elected (Years) background) registration Shareholding Shareholding Shareholding Shares Shareholding ratio Shares Shares Shares Title Name Relationship ratio ratio ratio Technologies Co., Ltd. President of Sanli International Investment Company Pure-Xu Real Estate Republic of 1,793,37 1,793,3 - 1.03 1.03 ------Advertising China 1 71 Co., Ltd. Executive Master Director of Pure-Burg General of Business Contractors Co., Ltd. Administration Chairman of Puquan (EMBA), Peking Advertising Co., Ltd. University Chairman of Puqun Advertising Co., Ltd. Chairman of Pure-Xu Real Estate Advertising Co., Ltd. Chairman of Pauian Archiland Director 2018.12.24 2019.11.8 3 years Advertising Co., Ltd. Chairman of Puhou Advertising Republic of 1,274,697 Thomas Lee Male 718,964 0.41 718,964 0.41 - - 0.73 Co., Ltd. - - - - China (Note 2) Chairman of Puxin Advertising Co., Ltd. Chairman of Pauian Archiland Development Co., Ltd. Chairman of Huang Geun Construction Corp. Director of Puyuan Construction Co., Ltd. Chairman of Puchang Construction Co., Ltd. Director of Yinyan Creative

Primary Spouse & Minor Shareholding by Nominee experience Concurrent Positions Held at Managers, Directors or Supervisors who are Nationality Shareholding when Elected Current shareholding Remarks Date First Date Term Shareholding Arrangement (educational Company or Other Companies spouses or within two degrees of kinship Title Name Gender or place of Elected Elected (Years) background) registration Shareholding Shareholding Shareholding Shares Shareholding ratio Shares Shares Shares Title Name Relationship ratio ratio ratio Consulting Co., Ltd. Chairman of Park Group Investment Co., Ltd. Chairman of Pumeng Investment Co., Ltd. Chairman of Pu Ying Investment Co., Ltd. Chairman of Puyi Development Co., Ltd. Chairman of Puyi Construction Co., Ltd. Chairman of Pauian Real Estate Co., Ltd. Director of Zhuguan Construction Co., Ltd. Chairman of Sant Law International Corporation Supervisor of Ruxin Construction Co., Ltd. Supervisor of Dongdacheng Construction Co., Ltd. Director of Nanshan Senior High School Director of China University of Technology Department of Chairman and CEO of Electrical Interactive Digital Technologies Engineering, Inc. Republic of National Taipei Chairman of Huaqi Director Davis Cheng Male 2019.11.8 2019.11.8 3 years ------China Institute of Communications Equipment Technology (Shanghai) Co., Ltd. (renamed to Chairman of Hitron National Taipei Technologies (Netherlands) Co.,

Note 2: Thomas Lee holds shares in Park Group Investment Co., Ltd., in which he has controlling interest.

Note 3: Former independent director Mr. Dawn Ray Bean resigned on September 22, 2020. According to Article 14-2 of the Securities and Exchange Act, an independent director must be elected to fill a vacancy. The term of office of the new independent director, Mr. Tzung-Chen Chen, begins on the day of the election at the extraordinary shareholders meeting on October 15, 2020, and will end on November 7, 2022.

2. Supervisor: The Company has established an audit committee, so there are no supervisors. 3. Major shareholders of corporate shareholders: April 8, 2021 Name of corporate Major shareholders of corporate shareholders shareholder Jialai Development Co., Mu-jia Wang (50%), Yan-hui Wang (20%), Mei-yin Guo Ltd. (13.24%), Bing-hong Guo (8.53%), Mei-yu Guo (8.23%) Pure-Xu Real Estate Puquan Advertising Co., Ltd. 100% Advertising Co., Ltd. 4. Major shareholders of a corporate shareholder are representatives of the corporate shareholder April 8, 2021

Corporate name Major shareholder of a corporation Pumeng Investment Co., Ltd. (19.96%), Chunfu Investment Co., Ltd. (12.39%), Purui Investment Co., Ltd. (11.09%), Yangzhe Investment Co., Ltd. (8.42%), Pukuan Investment Co., Ltd. ( 11.38%), Hezhong Investment Co., Ltd. (6.12%), Puying Investment Co., Ltd. (10.45%), Puguan Investment Co., Puquan Advertising Co., Ltd. (3.71%), Jingxiang Investment Co., Ltd. (3.32%), Puqing Ltd. Investment Co., Ltd. Company (2.88%), Pusheng Investment Co., Ltd. (1.50%), Li-chen Fei (1.98%), Ai-lun Guo (1.28%), Pucheng Investment Co., Ltd. (1.26%), Puguang Investment Co., Ltd. (1.18%) , Purui Investment Co., Ltd. (1.18%), Purui Investment Co., Ltd. (1.18%), Wei-chen Wei (0.72%) 5. Professional Knowledge and Independence of Directors and Supervisors April 8, 2021

Conditions Does the individual possess more than five years Number of Independence Status of work experience and the following professional Other Public (Note) qualifications? Companies

Lecturer (or Certified Commercial, legal, in Which the above) of judge, financial, Individual is commerce, prosecutor, accounting or Concurrently law, finance, lawyer, other work Serving as an accounting, or accountant, or experiences Independent any subject holder of required to Director Name relevant to the professional perform the 1 2 3 4 5 6 7 8 9 10 11 12 Company's qualification assigned duties operations in relevant to the a public or Company's private operations tertiary institution Wei-Chia Chen - -  - - - -   -      - Jialai Development Co., Ltd. - -   -          - - Representative: Thomas Wang Pure-Xu Real Estate Advertising Co., Ltd. - -   -          - - Representative: Thomas Lee Davis Cheng - -   -           - Leo Hong - -              - Long-I Liao - -              - Tzung-Chen Chen -  -             - Note: Mark "" in the space below each condition code for directors and supervisors who meet the following conditions two years before their appointment and during their tenure.

(1) Non-employees of the Company or its affiliates. (2) Not a director or supervisor of the Company or its affiliates (does not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent). (3) Does not hold more than 1% of the Company's outstanding shares in their own names or under the name of spouse, underage children, or proxy shareholder; nor is a top-10 natural-person shareholder of the Company. (4) Not a spouse, relative within the second degree, or direct blood relative within the third degree of the managers listed in (1) or the personnel listed in (2) and (3). (5) Not a director, supervisor, or employee of a corporate shareholder who directly holds more than 5% of the total issued shares of the Company, who are among the top five shareholders, or who have designate a representative as a director or supervisor of the Company in accordance with Article 27, Paragraph 1 or Paragraph 2 of the Company Act (does not apply to independent directors appointed in accordance with the Act or the laws and

regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent). (6) Not a director, supervisor, or employee of another company where a majority of the company's director seats or voting shares and those of any other company are controlled by the same person (does not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent) (7) Not a director, supervisor, or employee of another company or institution where a chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses (does not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent). (8) Not a director, supervisor, 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 (does not apply to independent directors if a specific company or institution holds 20% of the Company’s total issued shares but no more than 50% and the independent director is appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent). (9) Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof. However, this does not apply to the Remuneration Committee, Public Acquisition Review Committee, or M&A Special Committee who perform their duties in accordance with the Securities and Exchange Act or the relevant laws and regulations of the Business Mergers and Acquisitions Act. (10) Does not have a spousal or second-degree kinship relationship with other directors. (11) Does not fulfil criteria of Article 30 of the Company Act. (12) Does not fulfil the criteria of Article 27 of the Company Act which stipulates that where a government agency

or a juristic person acts as a shareholder of a company, its authorized representative may also be elected.

(II) President, Vice President, Senior VP, and Managers of Various Departments and Branches April 8, 2021 Unit: shares;% Managers with Spouse & Minor Shareholding by Nominee Managers who are spouses or Date Shareholding Primary experience Concurrent Positions employee Remarks Shareholding Arrangement within two degrees of kinship Title Name Gender Nationality Appointe (educational Held at Other subscription d background) Companies rights Shareholding Shareholding Shareholding Shares Shares Shares Title Name Relationship ratio ratio ratio Department of Chairman of the - - - - The chairman Business Company concurrently Administration, Fu Jen Director of Sports Gear serving as Catholic University Samoa, Elephant, president of the Fongyuan, and All Company is Wells mainly to simplify Chairman and CEO of the management Silk Invest, Chi Hung, organizational All Wells, Can Sports structure and Cambodia, Can Sports shorten the Vietnam, Dai Hoa decision-making Vietnam, August Sports process, and Vietnam, Fireman, thereby to quickly Sports Gear (Myanmar) respond and grasp Chairman Wei-Chia Republic of 127,465,924 Supervisor of PT Can market and and Male 2000/8/31 2,000,000 1.15 - - 73.15 Chen China (Note) Sports Industrial customer demand, President Indonesia and, subsequently, SGP Director respond to the Chairman of Spread development of Idea Co., Ltd. the Company into Director of Chin Chin a group as well as Human Resource its operational Consulting Ltd. management Director of X Man needs. The Footwear International establishment of a Co., Ltd. chief operating Legal person director's officer, and representative of Match establishment of a Sports International vice president for Co., Ltd. each subsidiary, as

Managers with Spouse & Minor Shareholding by Nominee Managers who are spouses or Date Shareholding Primary experience Concurrent Positions employee Remarks Shareholding Arrangement within two degrees of kinship Title Name Gender Nationality Appointe (educational Held at Other subscription d background) Companies rights Shareholding Shareholding Shareholding Shares Shares Shares Title Name Relationship ratio ratio ratio Director of Mu Mu well as the major Sports International operating Limited decisions of the Director of Lu Lu Company, all Sports International require discussion Limited by the Board. The Director of Lesson 1 Board has the Company Limited power to elect the Director of Power Rich chairman, appoint International Ltd. and dismiss the Legal Person Director’s president, effect Representative of checks and Huang Geun balances where Construction Corp. appropriate, and Director of Nanshan implement a Senior High School supervisory Chairman of Sports function. The Gear Social Welfare Company will Foundation actively cultivate successor candidates for the President. If there are qualified professionals, succession will be enacted by election of qualified candidates, or the number of independent directors will be increased in accordance with

Managers with Spouse & Minor Shareholding by Nominee Managers who are spouses or Date Shareholding Primary experience Concurrent Positions employee Remarks Shareholding Arrangement within two degrees of kinship Title Name Gender Nationality Appointe (educational Held at Other subscription d background) Companies rights Shareholding Shareholding Shareholding Shares Shares Shares Title Name Relationship ratio ratio ratio the law. Chief Shalu High-tech Director of All Wells, - - - - - Operating Machinery Division Can Sports Cambodia, Officer and Chief Operating Officer Dai Hoa Vietnam, Vice Republic of of Sports Gear Fireman Nick Lin Male 2000/8/31 ------President China of Can Sports Cambodia Vice Department of Chairman of PT Can - - - - - President Chemistry, Tunghai Sports Industrial of Can University Indonesia Sports Director of Feng Tay Vietnam, LF Business All Wells Department and August Jack Republic of Senior VP of Ching Male 2011/7/20 ------Sports Wang China Luh Indonesian Factory Vietnam; Chairman of PT Can Sports Industrial Indonesia University of Warwick ------Vice MSC Engineering President Business Management of Chi Republic of Senior VP of Apache Jason Liu Male 2016/12/1 ------Hung and China Footwear Dai Hoa Deputy International Vietnam Senior VP, Baocheng Industrial Co., Ltd.

Managers with Spouse & Minor Shareholding by Nominee Managers who are spouses or Date Shareholding Primary experience Concurrent Positions employee Remarks Shareholding Arrangement within two degrees of kinship Title Name Gender Nationality Appointe (educational Held at Other subscription d background) Companies rights Shareholding Shareholding Shareholding Shares Shares Shares Title Name Relationship ratio ratio ratio Bournemouth Director of PT Can - - - - Vice University MAIBA Sports Industrial President President of Feng Tay Indonesia of PT Can Danis Republic of Vietnam Business Male 2019/9/26 ------Sports Chang China Department Industrial President of Goang Indonesia Shuoh Co. Indonesia Plant On-Job Training as ------Sport Shoe Technician: ADIDAS Apprenticeship as Sports Shoe Maker: PUMA Staatliche Realschule, Vice Herzogenaurach, President Germany" of Business Juergen Director of global Developme 2021/01/0 Hans Male Germany ------footwear developer and nt and 1 Wormser supplier World Cat Footwear Vietnam Innovation Sourcing&Developmen Technology t Services Company Ltd. (PUMA) President of Chi Hung Co., Ltd. Adidas Group Football Shoes-Senior Project Manager Special Department of - - - - - Assistant to Benjamin Communications/Sport United the David Male 2020/9/29 ------s Management, George States Chairman Metcalf Washington University and Head Coach of

Managers with Spouse & Minor Shareholding by Nominee Managers who are spouses or Date Shareholding Primary experience Concurrent Positions employee Remarks Shareholding Arrangement within two degrees of kinship Title Name Gender Nationality Appointe (educational Held at Other subscription d background) Companies rights Shareholding Shareholding Shareholding Shares Shares Shares Title Name Relationship ratio ratio ratio Spokespers Taoyuan Pauian on Archiland Basketball Team Master of Laws, School Executive Manager, - - - - of Law, Indiana Legal University Affairs/Compliance Bachelor’s Degree in Department, Sports Corporate Law, College of Law, Gear Co., Ltd. Taiwan Governanc Tunghai University Branch e Manager Fu-Sheng Republic of Secretary of the Board Male 2020/9/29 ------and Acting Ku China of Directors of Global Spokespers Union Co., Ltd. on (Corporate Governance Manager) Manager of Legal Department, Global Union Co., Ltd. Department of Director of Sports Gear - - - - - Business Social Welfare Administration, Foundation Tunghai University Institute of Finance, Chung Cheng Accounting University Supervisor Vincent Republic of Daan/Taishin Bank and Male 2018/3/1 ------Kang China Corporate Finance Financial Assistant Manager Officer Deputy Planning Officer, Pou Chen Corporation Director of Overseas Business Center of 361 China Co., Ltd.

III. Remuneration paid to directors, supervisors, presidents and vice presidents in the most recent year (I) Remuneration of general directors and independent directors December 31, 2020, Unit: shares;% Remuneration Ratio of total Ratio of total from Non- remuneration compensation consolidated (A+B+C+D) to (A+B+C+D+E+ F+G) Affiliates or Director Remuneration Remuneration to concurrent employees net profit after to net profit after tax Parent tax (%) Company, not (Note 1) (Note 1) Including Subsidiaries Title Name Business Salary, bonuses, Severance pay Director Severance pay Employee compensation Remuneration Implementation and special and pension Remuneration and pension (G) (A) Expenses allowances (B) (C) (F) (Note 3) (D) (E) All All All All All All All All companies in the All The Company companies companies companies companies companies companies companies Financial Statement companies The The The The The The The in the in the in the in the in the in the in the The Company in the Company Company Company Company Company Company Company Cash Stock Cash Stock Financial Financial Financial Financial Financial Financial Financial Financial amount amount amount amount Statement Statement Statement Statement Statement Statement Statement Statement Chairman and Wei-Chia Chen President Jialai Development Director Co., Ltd. Representative: Thomas Wang - - - - 6,343 6,343 270 270 1.62 1.62 11,317 16,017 - - 1,522 - 1,522 - 4.76 5.90 - Pure-Xu Real Estate Advertising Director Co., Ltd. Representative: Thomas Lee Davis Cheng Director (Note 1) Independent Leo Hong 3,580 3,580 - - - - 270 270 0.94 0.94 ------0.94 0.94 - Director (Note 1)

Independent Long-I Liao Director (Note 1) Dawn Ray Independent Bean Director (Notes 1 & 2) Tzung-Chen Independent Chen Director (Note 2) Note 1: Elected during re-election of directors at the extraordinary shareholders meeting on November 8, 2019. Note 2: Former independent director Mr. Dawn Ray Bean resigned on September 22, 2020. According to Article 14-2 of the Securities and Exchange Act, an independent director must be elected to fill a vacancy. The term of office of the new independent director, Mr. Tzung-Chen Chen, begins on the day of the election at the extraordinary shareholders meeting on October 15, 2020, and will end on November 7, 2022. Note 3: According to Article 121 of the Company’s Articles of Incorporation, the Company pays employee compensation while the Company’s shares are traded on the designated securities market. Although the Company has not been officially listed, it is sympathetic to the hard work of its employees, and so it planned to apply the regulations of the Articles of Incorporation in advance to have the Board of Directors approve on March 12, 2021, the appropriation of NT$12,686 thousand in employee compensation for 2020. The amount allocated to individual managers is expected to be reviewed by the Board of Directors before distribution. Currently, this is the provisional amount to be distributed. Range of remuneration chart Director's name Remuneration range paid to each director of the Total remuneration for first four amounts Total remuneration for first seven amounts Company (A+B+C+D) (A+B+C+D+E+F+G) The Company All companies in the Financial The Company All companies in the Financial St t t St t t Dawn Ray Bean, Tzung-Chen Dawn Ray Bean, Tzung-Chen Dawn Ray Bean, Tzung-Chen Dawn Ray Bean, Tzung-Chen Less than NT$1,000,000 Chen Chen Chen Chen Jialai Development Co., Ltd. Jialai Development Co., Ltd. Jialai Development Co., Ltd. Jialai Development Co., Ltd. (represented by Thomas Wang), (represented by Thomas Wang), (represented by Thomas Wang), (represented by Thomas Wang), NT$1,000,000 (inclusive) – NT$2,000,000 (non Pure-Xu Real Estate Advertising Pure-Xu Real Estate Advertising Pure-Xu Real Estate Advertising Pure-Xu Real Estate Advertising inclusive) Co., Ltd. (represented by Co., Ltd. (represented by Co., Ltd. (represented by Co., Ltd. (represented by Thomas Lee), Davis Cheng, Leo Thomas Lee), Davis Cheng, Leo Thomas Lee), Davis Cheng, Leo Thomas Lee), Davis Cheng, Leo Hong, Long-I Liao Hong, Long-I Liao Hong, Long-I Liao Hong, Long-I Liao NT$2,000,000 (inclusive) – NT$3,500,000 (not Wei-Chia Chen Wei-Chia Chen - - inclusive) NT$3,500,000 (inclusive) – NT$5,000,000 (not - - - - inclusive) NT$5,000,000 (inclusive) – NT$10,000,000 (not - - - - inclusive)

NT$10,000,000 (inclusive) – NT$15,000,000 (not - - - - inclusive) NT$15,000,000 (inclusive) – NT$30,000,000 (not - - Wei-Chia Chen Wei-Chia Chen inclusive) NT$30,000,000 (inclusive) – NT$50,000,000 (not - - - - inclusive) NT$50,000,000 (inclusive) – NT$100,000,000 - - - - (not inclusive) NT$100,000,000 (inclusive) and above - - - - Total 8 people 8 people 8 people 8 people Note: The names of the directors should be listed separately (corporate shareholders should list the names of the corporate shareholders and their representatives separately), and the payment amounts should be disclosed in a summary manner.

(II) Supervisor remuneration: The Company does not have supervisors, so it is not applicable.

(III) Remuneration of the president and vice presidents December 31, 2020, Unit: shares;% Remuneration from Non- Severance pay and Employee compensation amount Bonuses and special Ratio of total remuneration consolidated Salary pension allowances, etc. (D) (A+B+C+D) to net profit after tax Affiliates or Parent (A) (%) Company, not (B) (C) (Note 3) Including Subsidiaries

Title Name All All All All companies in All companies companies companies companies The Company the Financial The The The Company in the Financial in the in the The Company in the Statement Company Company Statement Financial Financial Financial Cash Stock Cash Stock

Statement Statement Statement amount amount amount amount

Wei-Chia President Chen Chief Operating Officer and Vice President of Can Nick Lin Sports Cambodia (Note 1) Vice President of Can Sports Vietnam, All Wells and August Sports Jack 12,556 32,147 - 587 16,750 18,489 2,791 - 2,791 - 7.85 13.20 - Vietnam; Chairman of PT Wang Can Sports Industrial Indonesia Vice President of Chi Hung and Dai Hoa Jason Liu Vietnam Vice President of PT Can Danis Sports Industrial Indonesia Chang

Can Sports Cambodia Stella Senior VP (Note 1) Chang

Special Assistant to the Benjamin Chairman and David Spokesperson (Note 2) Metcalf Corporate Governance Manager and Acting Fu-Sheng Spokesperson Ku (Note 2)

Accounting Supervisor Vincent and Financial Officer Kang

Audit Manager Meg Hu Note 1: Senior VP Stella Chang, the top executive of Can Sports Cambodia (similar level to vice president), was approved by the Board of Directors on June 30, 2020, with respect to her personal career plan and positional adjustments at the Company, for temporary replacement by Chief Operating Officer Nick Lin. Note 2: The special assistant to the chairman and spokesperson Benjamin David Metcalf and the corporate governance manager and acting spokesperson Fu-Sheng Ku were appointed by the Board of Directors on September 29, 2020. Note 3: According to Article 121 of the Company’s Articles of Incorporation, the Company pays employee compensation while the Company’s shares are traded on the designated securities market. Although the Company has not been officially listed, it is sympathetic to the hard work of its employees, and so it planned to apply the regulations of the Articles of Incorporation in advance to have the Board of Directors approve on March 12, 2021, the appropriation of NT$12,686 thousand in employee compensation for 2020. The amount allocated to individual managers is expected to be reviewed by the Board of Directors before distribution. Currently, this is the provisional amount to be distributed.

Range of remuneration chart

Remuneration range paid to each President and Vice Names of president and vice presidents President of the Company The Company All companies in the consolidated report Danis Chang, Benjamin David Metcalf, Fu- Less than NT$1,000,000 - Sheng Ku, Vincent Kang, Meg Hu NT$1,000,000 (inclusive) – NT$2,000,000 (non Stella Chang, Benjamin David Metcalf, Fu-Sheng Jack Wang, Jason Liu inclusive) Ku, Meg Hu NT$2,000,000 (inclusive) – NT$3,500,000 (not inclusive) - Danis Chang, Vincent Kang NT$3,500,000 (inclusive) – NT$5,000,000 (not inclusive) - - NT$5,000,000 (inclusive) – NT$10,000,000 (not - Jack Wang, Jason Liu inclusive) NT$10,000,000 (inclusive) – NT$15,000,000 (not Wei-Chia Chen, Nick Lin Nick Lin inclusive) NT$15,000,000 (inclusive) – NT$30,000,000 (not - Wei-Chia Chen inclusive) NT$30,000,000 (inclusive) – NT$50,000,000 (not - - inclusive) NT$50,000,000 (inclusive) – NT$100,000,000 (not - - inclusive) Over NT$100,000,000 - - Total 9 people 10 people

(IV) The name of the manager who distributes employee compensation and state of distribution:

Raito of total Stock Cash amount amount to net Title Name Total profit after tax amount (Note) (%)

Wei-Chia President Chen

Chief Operating Officer and Vice President of Can Sports Nick Lin Cambodia

Vice President of Can Sports Vietnam, All Wells and August Sports Vietnam; Chairman of PT Can Sports Industrial Jack Wang Indonesia

Vice President of Chi Hung and Dai Hoa Vietnam Jason Liu

Manager Vice President of PT Can Sports Industrial Indonesia Danis Chang - 4,313 4,313 1.05% Can Sports Cambodia Senior VP Stella Chang

Benjamin Special Assistant to the Chairman and Spokesperson David Metcalf

Corporate Governance Manager and Acting Spokesperson Fu-Sheng Ku

Vincent Accounting Supervisor and Financial Officer Kang

Audit Manager Meg Hu Note: According to Article 121 of the Company’s Articles of Incorporation, the Company pays employee compensation while the Company’s shares are traded on the designated securities market. Although the Company has not been officially listed, it is sympathetic to the hard work of its employees, and so it planned to apply the regulations of the Articles of Incorporation in advance to have the Board of Directors approve on March 12, 2021, the appropriation of NT$12,686 thousand in employee compensation for 2020. The amount allocated to individual managers is expected to be reviewed by the Board of Directors before distribution. Currently, this is the provisional amount to be distributed.

(V) Analysis of the ratio of the total remuneration paid to the directors, supervisors, president, and vice presidents of the Company to the net profit after tax of only individual financial statements or separate financial statements in the most recent two years by the Company and all companies in the consolidated report, and explanation of the policies, standards, and combinations, as well as procedures for determining remuneration and its correlation with business performance and future risks 1. Analysis of the total remuneration paid by the Company and all companies in the consolidated report to the Company’s directors, supervisors, presidents, and vice presidents in the most recent two years as a percentage of the net profit after tax of only individual financial statements or separate financial statements The ratio of total remuneration The ratio of total remuneration to net profit after tax in 2020 to net profit after tax in 2019 (%) (%) Title All companies in The All companies in the The the consolidated Company consolidated report Company report Director 1.32 1.32 2.56 2.56 President and Vice 3.68 5.61 7.85 13.20 President 2. Remuneration policies, standards, and combinations, as well as procedures for determining remuneration and its correlation with business performance and future risks A. Directors, supervisors The Company has a Remuneration Committee which is responsible for formulating and reviewing the policies, systems, standards and structure of directors and managers' performance evaluation and salary compensation. At the same time, it regularly evaluates and determines the compensation of directors and managers with reference to industry standards. B. President and Vice President Managers’ remuneration includes salary, bonuses, employee bonuses, and severance pay and pension, which are based on the position held, the responsibilities assumed, and the contribution to the Company, and are negotiated with reference to industry standards.

IV. Corporate governance operations

(I) Operations of the Board of Directors

In 2020 and up to the printing date of the annual report, the Board of Directors met 7 times (A), and the attendance (or attendance as non-voting participant) of directors and independent directors is as follows: Attendance in person Attendance in Number (or person (or of attendance attendance as non- Title Name delegates Remarks as non- voting participant) who voting rate attended participant) [B/A] [B] Chairman Independent and Wei-Chia Chen 7 - 100.00% director Dawn Ray President Bean resigned on Jialai Development Co., September 22, 2020 Ltd. and was required to Director 7 - 100.00% Representative: Thomas have participated in Wang two Board of Pure-Xu Real Estate Directors meetings; Advertising Co., Ltd. the newly Director 4 3 57.14% Representative: Thomas appointed Lee independent Director Davis Cheng 7 - 100.00% director Tzung- Independent Chen Chen is Leo Hong 7 - 100.00% Director required to Independent participate in four Dawn Ray Bean 2 - 66.67% Director Board of Directors Independent meetings after his Tzung-Chen Chen 4 - 100.00% Director appointment on Independent October 15, 2020. Long-I Liao 6 1 85.71% Director Other disclosures: I. If the operation of the Board of Directors has any of the following circumstances, the date, period, content of the proposal, all independent directors’ opinions and the Company’s handling of independent directors’ opinions must be stated. (I) Relating to the provisions of Article 14-3 of the Securities and Exchange Act: The Company has set up an audit committee; see the operation status of the audit committee. (II) In addition to the previous issues, other board resolutions to which there is opposition or qualified opinions from independent directors and for which there exist records or written statements. The operation of the Company's Board of Directors does not have the any of the above-mentioned circumstances. II. As for director’s recusals in proposals where there exists a stakeholder interest, the name of the director, the content of the proposal, the reason for the recusal due to stakeholder interest, and the circumstances of participation in voting must be stated: Board Recused Director's Proposal content Reasons for Participation in voting meeting date Name recusal April 16, Wei-Chia Chen The Company's Director is a Except for the recusal of

2020 Thomas Wang, Director Remuneration stakeholder in the directors mentioned in the preceding, the acting representative of for 2019 the chairman passed the Jialai Development compensation proposal without objection after consultation with the Co., Ltd. case remaining directors present Thomas Lee, Representative of Pure-Xu Real Estate Advertising Co., Ltd. Davis Cheng Wei-Chia Chen Proposal for the Director is a Except for Mr. Wei-Chia Chen, the chairman and Taiwan branch of the stakeholder in president, who recused Company's subsidiary the donation himself from discussion and voting in accordance Samoa Business Sports case with the law, the acting Gear International chairman passed the Enterprise Co., Ltd. to proposal without objection after consultation with the donate to the “Sports remaining directors Gear Social Welfare present. Foundation,” ratification of the 2019 donation, and resolution of the 2020 donation plan. June 30, Wei-Chia Chen Manager's 2019 bonus Director is a Except for Mr. Wei-Chia Chen, the chairman and 2020 distribution for annual stakeholder in president, who recused performance. the himself from discussion and voting in accordance compensation with the law, the acting case chairman passed the proposal without objection after consultation with the remaining directors present. Wei-Chia Chen Salary reduction for Director is a Except for Mr. Wei-Chia Chen, the chairman and managers above the stakeholder in president, who recused deputy general level. the himself from discussion and voting in accordance compensation with the law, the acting case chairman passed the proposal without objection after consultation with the remaining directors present. September Wei-Chia Chen Proposed appointment Director is a Except for Mr. Wei-Chia Chen, the chairman and 29, 2020 of Mr. Wei-Chia Chen stakeholder in president, who recused as the Company’s the appointment himself from discussion and voting in accordance litigation and non- case

litigation agent in the with the law, the acting chairman passed the territory of the proposal without objection Republic of China after consultation with the remaining directors present. Wei-Chia Chen Review the scope of Director is a Except for Mr. Wei-Chia Chen, the chairman and managers that the stakeholder in president, who recused Company should the manager himself from discussion and voting in accordance submit to the scope case with the law, the acting Remuneration chairman passed the Committee for proposal without objection after consultation with the remuneration pre- remaining directors review in 2020. present. Wei-Chia Chen In response to the Director is a Except for Mr. Wei-Chia Chen, the chairman and Group's restructuring, stakeholder in president, who recused sub-subsidiary the Group himself from discussion and voting in accordance Company Can Sports restructuring with the law, the acting Vietnam intends to sell case chairman passed the its equity in SGP to proposal without objection after consultation with the subsidiary Elephant. remaining directors present. December Wei-Chia Chen Review the Company's Director is a Except for Mr. Wei-Chia Chen, the chairman and 16, 2020 2020 director and stakeholder in president, who recused manager salary and the manager himself from discussion and voting in accordance remuneration policies, scope case with the law, the acting systems, standards, and chairman passed the structures, and review proposal without objection after consultation with the the Company's 2020 remaining directors director and manager present. salary and remuneration proposals. March 12, Wei-Chia Chen The Company's Director is a Except for the recusal of the directors mentioned in 2021 Thomas Wang, employee stakeholder in the preceding, the acting representative of compensation and the chairman passed the proposal without objection Jialai Development director remuneration compensation after consultation with the Co., Ltd. for 2020 case remaining directors present Thomas Lee, Representative of Pure-Xu Real Estate Advertising Co., Ltd. Davis Cheng

Wei-Chia Chen The Taiwan branch of Director is a Except for Mr. Wei-Chia Chen, the chairman and the subsidiary Sports stakeholder in president, who recused Gear Co., Ltd. intends the donation himself from discussion and voting in accordance to donate to the "Sports case with the law, the acting Gear Social Welfare chairman passed the Foundation," and proposal without objection after consultation with the proposes to resolve the remaining directors 2021 donation plan. present. Wei-Chia Chen Issue manager 2020 Director is a Except for Mr. Wei-Chia Chen, the chairman and year-end bonus and stakeholder in president, who recused performance bonus. the manager himself from discussion and voting in accordance scope case with the law, the acting chairman passed the proposal without objection after consultation with the remaining directors present. Wei-Chia Chen Manager salary Director is a Except for Mr. Wei-Chia Chen, the chairman and adjustment. stakeholder in president, who recused the manager himself from discussion and voting in accordance scope case with the law, the acting chairman passed the proposal without objection after consultation with the remaining directors present. III. A TWSE/TPEx Listed company shall disclose the evaluation cycle and period, evaluation scope, method and evaluation content of the self- (or peer) evaluation of the Board of Directors, and complete the attached Table 2 (2) board evaluation implementation status: Not applicable. I V. The goals of improving the professional competencies of the Board of Directors (e.g., establishing an audit committee and improving the transparency of information) in the current year and recent years and assessment of implementation: (I) The Company has formulated the "Rules of Procedure for the Board of Directors' Meetings" of the Company in accordance with the "Regulations Governing Procedure for Board of Directors Meetings of Public Companies" for compliance. In addition, the Company has set up a compensation committee that is responsible for implementing recommendation, evaluation, and supervision of the Company's overall compensation policy, manager compensation standards, employee compensation, and other employee incentive plans. (II) In order to strengthen corporate governance, improve the supervisory responsibilities of the Board of Directors, and strengthen the management of the Board of Directors, the Board of Directors has formulated the "Audit Committee Organizational Rules" and established an audit committee. (III) In the future, the Company will be required by law to disclose relevant information on the Company's website and Market Observation Post System (MOPS) to enhance information transparency.

(II) The operation of the audit committee or the participation of the supervisor in the operations of the Board of Directors

The Company has three independent directors serving as members of the audit committee. In 2020 and up to the printing date of the annual report, the audit committee has held a total of 6 meetings (A), and the attendance (or attendance as non-voting participant) of independent directors is as follows: Number of Attendance in Attendance in person Title Name delegates person rate Remarks [B] who [B/A] attended Independent director Independent Long-I Liao 5 1 83.33% Dawn Ray Bean Director resigned on September 22, 2020 and was Independent Leo Hong 6 - 100.00% required to have Director participated in three audit committee Independent Dawn Ray 2 - 66.67% meetings; the newly Director Bean appointed independent director Tzung-Chen Chen is required to Independent Tzung-Chen participate in four audit 3 - 100.00% Director Chen committee meetings after his appointment on October 15, 2020. Other disclosures: I. If the operation of the audit committee has any of the following circumstances, the date, period, content of the proposal, results of the audit committee’s resolution, and the Company’s handling of the audit committee’s opinions must be stated: (I) Matters listed in Article 14-5 of the Securities and Exchange Act: Matters listed in Article 14-5 of the Securities and Exchange Act shall be reported to the Board of Directors after the approval of the Audit Committee. The Company's handling of the Board meeting date Audit committee Proposal content audit and period resolution results committee's opinions The third meeting of (1) The Statement on Internal Control for Approved by all Proposal the first term on April 2019. members in passed. 16, 2020 (2) Business report and consolidated attendance. financial statement for 2019. (3) Earnings distribution proposal for 2019. (4) Capital surplus issuance of cash dividends. (5) Recognize the acquisition or disposal of machinery and equipment among the Company's affiliates in 2019. (6) Revision to the Company's internal control system. (7) Revision to the Company's "Procedures for the Acquisition or Disposal of Assets," "Procedures for Endorsements and Guarantees," "Guidelines for Fund Loans to Others," "Operational

Guidelines for Supervision and Management of Subsidiaries" and "Procedures for Engaging in Financial Derivative Transactions." (8) Revision to the Company’s “Audit Committee Organizational Rules.” (9) Revision of the Company’s "Rules and Procedures for Board of Directors Meetings" and "Rules of Procedure for Shareholders' Meetings.” (10) Revision to relevant regulations on corporate governance. (11) "Preparation of the financial statement evaluation form and plan by the Company" project. (12) The Company intends to increase capital in cash in overseas subsidiary SPORTS GEAR CO., LTD. (SAMOA). (13) The Company's inter-affiliate fund loan case. (14) Application for loan limit renewal from banks and financial institutions. The fourth meeting of (1) Proposed to increase capital in cash in Approved by all Proposal the first term on June Can Sports Vietnam Co., Ltd. through members in passed. 30, 2020 ELEPHANT STEP CO., LTD. attendance. (Seychelles), an investment holding company in which the Company directly holds 100%. (2) Cancellation of the investment and purchase of land use rights in Bà Rịa- Vũng Tàu Province, Vietnam. (3) Cancellation of the sub-subsidiary Can Sports Shoes Co., Ltd. providing endorsement and guarantee to Sports Gear Co., Ltd. Taiwan Branch. (4) The Company's inter-affiliate fund loan case. (5) Apply for loan limit and contract renewal from banks and financial institutions. The fifth meeting of (1) Consolidated financial statement for the Approved by all Proposal the first term on second quarter of 2020. members in passed. September 29, 2020 (2) Approved the “Financial Forecast for attendance. the Q4 2020 and Q1 2021.” (3) Proposed the Statement on Internal Control for July 1, 2019 to June 30, 2020 (4) Amendment to the Company’s "Rules of Procedure for Shareholders' Meetings" (5) Amendment to the Company's "Regulations Governing the Election of Directors" (6) Amendment to the Company's "Rules and Procedures for Board of Directors Meetings" (7) Amendment to the Company's "Rules Governing the Scope of Powers of Independent Directors" (8) Revision to the Company's "Audit Committee Organizational Rules"

(9) Amendment to the Company's "Regulations on Financial Operations between Affiliates" Proposal (10) Amendment to the Company's "Code of Ethics". (11) The Company's inter-affiliate fund loan. (12) Apply for loan renewal from banks and financial institutions. (13) In response to the Group's restructuring, sub-subsidiary Company Can Sports Vietnam intends to sell its equity in SGP to subsidiary Elephant. The sixth meeting of (1) Consolidated financial statement for the Approved by all Proposal the first term on third quarter of 2020. members in passed. November 13, 2020 (2) The Company's inter-affiliate fund loan attendance. case. (3) Silk Invest International Co., Ltd., the sub-subsidiary of the Company, intends to obtain two pieces of real estate. The seventh meeting (1) 2021 financial budget. Approved by all Proposal of the first term on (2) 2021 audit plan. members in passed. December 16, 2020 (3) Appraisal of the independence and attendance. competence of CPAs. (4) In order to cooperate with the application for listing in Taiwan, it is planned issue 21,785 thousand new shares by capital increase by cash before listing. (5) The subsidiary Samoa Sports Gear intends to increase capital by cash in sub-subsidiary Silk Invest. (6) Subsidiary FONGYUAN capital increase by cash. (7) The subsidiary ELEPHANT capital increase by cash. (8) Subsidiaries ELEPHANT and FONGYUAN made capital increase by cash in sub-subsidiary PT Can Sports Industrial Indonesia, an Indonesian company. (9) Subsidiary ELEPHANT made capital increase by cash in Portuguese sub- subsidiary company SGP. (10) The subsidiary Samoa Sports Gear Taiwan Branch intends to apply to financial institutions for exchange- traded derivative transactions. (11) Authorize the Chairman of the Board of Directors to carry out USD-NTD forward exchange hedging for the Taiwan branch of Sports Gear Co., Ltd. within a monthly limit of US$2 million. (12) Sub-subsidiary Silk Invest application to the bank for loan limit. (13) The Company's inter-affiliate fund loan. (14) Increasing the amount of land purchased by sub-subsidiary PT Can Sports Industrial Indonesia to US$4 million. The eighth meeting of (1) The Statement on Internal Control for the first term on 2020.

March 12, 2021 (2) Business report and consolidated financial statement for 2020. (3) The 2020 surplus distribution case. (4) Capital surplus allocation of cash dividends. (5) The Taiwan branch of the subsidiary Sports Gear Co., Ltd. intends to donate to the "Sports Gear Social Welfare Foundation," and proposes to resolve the 2021 donation plan. (6) Ratification of acquisition or disposition of assets among the related parties in 2020. (7) Ratification of the acquisition or disposal of assets by Can Sports Cambodia and sub-subsidiary Chi Hung. (8) Inter-affiliate fund loan. (9) Application to financial institution for loan limit increase and contract renewal. (10) Subsidiary ELEPHANT and sub- subsidiary Silk Invest intend to make a capital increase by cash in Portuguese sub-subsidiary SGP. (11) Change to the personnel of the Company and its subsidiaries who are responsible for the daily administration of the audit unit and review of audit reports. (12) Formulation of the Company's "Application for Suspension and Resumption of Trading Procedures.” (13) Amendment to the "Rules of Procedure for Shareholders' Meetings.” (14) Amendment to the "Procedures for the Acquisition or Disposal of Assets" and "Procedures for Engaging in Financial Derivative Transactions.” (II) Except for the preceding matters, other matters that have not been approved by the Audit Committee but have been approved by more than two-thirds of all directors: The operation of the Audit Committee of the Company does not entail the foregoing. II. As for independent director’s recusals in proposals where there exists a stakeholder interest, the name of the independent director, the content of the proposal, the reason for the recusal due to stakeholder interest, and the circumstances of participation in voting must be stated: No such situation. III. Communication status between independent directors and internal audit managers and accountants (should include major matters, methods, and results of communication on the Company’s financial and business conditions): The audit manager reported the actual implementation of the audit plan according to plan, and communicated well with the independent directors. Accountants participated as non-voting delegates in the Board of Directors to express their review opinions on matters such as financial statements and internal control review, and fully communicated with independent directors.

(III) Corporate Governance Execution Status and Deviations from Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies.

Operating status Discrepancies from the Corporate Governance Best Practice Principles Evaluation items Yes No Summary description for TWSE/TPEx Listed Companies and reasons therefor I. Does the Company abide The Company formulated the "Corporate by the Corporate Governance Best Practice Principles" on September 20, 2019, and all governance will Governance Best Practice operate in accordance with the Corporate Principles for TWSE/TPEx Governance Best Practice Principles. No major Listed Companies in the  discrepancies. establishment and disclosure of its Corporate Governance Best Practice Principles? II. Company shareholding structure and shareholders' equity (I) Has the Company (I) In addition to the Company’s Articles of No major established internal  Incorporation and internal rules, the discrepancies. operating procedures to Company has stipulated matters for the handle shareholder protection of shareholders’ interests, and suggestions, doubts, also has a dedicated unit responsible for disputes, and litigation handling matters related to the Company’s matters, and does the  investor relations, so as to properly handle Company implement shareholder suggestions, doubts, and them in accordance with disputes. the procedures? (II) Does the Company  (II) The Company understands the changes in No major possess a list of major the list of major shareholders and ultimate discrepancies. shareholders and ultimate owners of these major shareholders through owners of these major investor relations maintenance and insider shareholders? reporting systems.

(III) Has the Company (III) The Company and its affiliates have No major established a risk established the "internal control system," discrepancies. management mechanism "Management Guidelines for the and "firewall" against its Authorization of Duties and Agents," affiliates and "Management Guidelines for Related-party implemented it?  Transactions," "Regulations Governing Financial Business Among Affiliates," "Guidelines for the Supervision of Subsidiaries," "Procedures for the Acquisition or Disposal of Assets," "Procedures for Extending Loans to Others," and "Procedures for Endorsements and Guarantees" to standardize the management of its personnel, assets, and

Operating status Discrepancies from the Corporate Governance Best Practice Principles Evaluation items Yes No Summary description for TWSE/TPEx Listed Companies and reasons therefor finances, and shall be able to effectively assess risks and establish appropriate firewalls (IV) Has the Company (IV) The Company has established the No major formulated internal "Management Guidelines for the Prevention discrepancies. regulations to prevent its of Insider Trading" to regulate insiders from trading confidentiality of the Company's material securities based on insider information and the prohibition of information yet to be trading procedures, and thereby to prevent made public? insider trading and educate insiders about the relevant laws and regulations. III. The composition and responsibilities of the Board of Directors (I) Has the Board of (I) The Company has established the No major Directors established and "Regulations Governing the Election of discrepancies. implemented a Directors," which requires the composition

diversification policy for of the Board of Directors to emphasize  its composition? diversity and requires Board members to

generally possess the knowledge, skills, and

literacy necessary for performing their

duties, and has implement the Regulations.

(II) In addition to the (II) The Company has established a Set according to  Remuneration Committee Remuneration Committee and an Audit future need.

and the Audit Committee Committee in accordance with the law. In

set up according to law, the future, other functional committees will

does the Company have be established at appropriate times and  other types of functional according to operational needs.

committees in place that

it set up at its own

discretion?

(III) Has the Company (III) The Company has formulated the "Board of It is planned to be

formulated guidelines and Directors Performance Evaluation implemented after

methods for board of Guidelines” for the purpose of listing.

directors performance implementing corporate governance and  evaluation, does it enhancing the functions of the Company's conduct annual and Board of Directors, as well as establishing regular performance performance targets to enhance the evaluations, and does it operational efficiency of the Board of report the results of such Directors. The Board of Directors will evaluations to the Board gradually improve the evaluation method.

Operating status Discrepancies from the Corporate Governance Best Practice Principles Evaluation items Yes No Summary description for TWSE/TPEx Listed Companies and reasons therefor of Directors and use them as a reference for remuneration and nomination for re- election of individual directors? (IV) Does the Company (IV) The Company regularly evaluates the No major regularly assess the professional qualifications and discrepancies. independence of its independence of appointed accountants. In CPAs? addition, the CPA firm itself also has strict requirements for the independence of accountants. For example, certification for a listed company cannot be performed by the same accountant for seven consecutive years. If the certification accounting firm changes accountants due to internal organizational considerations, the Company fully assesses the professionalism, integrity, and independence of the newly appointed accountants and submits them to the Board of Directors for resolution. IV Has the TWSE/TPEx On September 29, 2020, the Company's Board of No major Listed company allocated Directors approved the establishment of a discrepancies. corporate governance manager who is an appropriate number of responsible for handling corporate governance- competent corporate related matters to fulfil the Company's governance personnel and governance needs in accordance with Company appointed a corporate regulations. governance manager to be responsible for corporate governance related matters (including but not limited to providing directors and  supervisors with information required to perform business, assisting directors and supervisors in complying with laws and regulations, handling matters related to the Board of Directors and shareholders' meetings, handle company

Operating status Discrepancies from the Corporate Governance Best Practice Principles Evaluation items Yes No Summary description for TWSE/TPEx Listed Companies and reasons therefor registration and changes to registration, and making minutes for the Board of Directors and shareholders' meetings in accordance with the law)? V Has the Company (I) The Company has spokespersons and acting No major established communication spokespersons that act as channels through discrepancies. channels with stakeholders which the Company expresses opinions to (including but not limited the public, and it handles related response in to shareholders, employees, accordance with its internal control system. customers and suppliers) (II) The Company has set up a convenient and a special area for website on the Internet on which company stakeholders on the  financial business information and Company website, and corporate governance information may be does it respond found for the reference of shareholders and appropriately to important stakeholders. The aforementioned website is CSR issues of stakeholder maintained by dedicated personnel, and the concern? information listed is full and accurate and up-to-date, thus avoiding the possibility of misleading its readers. VI Does the Company hire The Company has appointed Yuanta Securities as No major professional stock agencies a stock affairs agency to handle the affairs of the discrepancies.  shareholders' meeting. to handle shareholders’ meetings affairs? VII Information disclosure (I) Has the Company  (I) The Company has established a corporate No major established a website on website to disclose the Company’s financial discrepancies. which to disclose financial business information and corporate business and corporate governance information for the reference of governance information?  shareholders and stakeholders.

(II) Does the Company adopt (II) Company-related questions are answered by No major other methods of the spokesperson or acting spokesperson, discrepancies. information disclosure while the relevant business department, the (such as setting up an spokesperson or acting spokesperson is English website,  responsible for the collection and disclosure appointing a special of company information; and a corporate person to be responsible website has been established on which to for the collection and place Company information. disclosure of Company information, implementing

Operating status Discrepancies from the Corporate Governance Best Practice Principles Evaluation items Yes No Summary description for TWSE/TPEx Listed Companies and reasons therefor a spokesperson system, placing the Company’s investor seminars on the Company website)? (III) Does the Company (III) The Company is a foreign issuing company, In the future, after it announce and report the and thus there is no need to announce and has become listed, it annual financial statement report a financial statement in accordance will report in within two months after with the requirements of a TWSE/TPEx accordance with the end of the fiscal year, Listed company. regulations and and announce and report continue to improve the financial statement for its financial the first, second and third statement quarters and the operating preparation conditions of each month capabilities. before the prescribed deadlines? VIII. Does the Company have 1. Employee rights: The Company's employer- other important employee relations are harmonious, and the information to facilitate legitimate rights and interests of employees are better understanding of its guaranteed in accordance with labor laws and corporate governance local regulations. The Company has not had practices (including any major labor disputes, and has not been without limitation penalized by the competent authority due to employee rights, employee major labor issues or major violations of labor care, investor relations, laws. supplier relations, rights of 2. Employee care: The Company provides stakeholders, directors' and employees with reasonable remuneration and supervisors' training various bonuses. Factories have established records, the labor unions in accordance with local state No major  implementation of risk laws and organizes various employee benefits. discrepancies. management policies and The factories distribute gifts for important risk evaluation measures, festivals (Lunar New Year, Dragon Boat the implementation of Festival, and Mid-Autumn Festival). customer relations policies, Colleagues are given birthday gifts on their and purchasing insurance birthdays, and there are various welfare for directors and measures, such as various activities, irregular supervisors)? group health activities or group dinners, travel subsidies, wedding and funeral subsidies, and emergency relief subsidies. Establish a good relationship of mutual trust and dependence between employees and employers. 3. Investor Relations: The Company has set up a

Operating status Discrepancies from the Corporate Governance Best Practice Principles Evaluation items Yes No Summary description for TWSE/TPEx Listed Companies and reasons therefor corporate website and spokesperson system, and has established a smooth communication channel to ensure the rights and interests of investors. 4. Supplier relations: The Company upholds ethical corporate management, conducts fair transactions with suppliers, and maintains long-term good relationships of cooperation. 5. Stakeholder Rights: In order to protect the rights and interests of stakeholders, the Company has established a variety of favorable communication channels that are clear and unobstructed, upholds the principle of integrity and a responsible attitude when handling such matters, and fulfills its corporate social responsibilities. 6. Continuing education of the Company’s directors and supervisors: The Company has set up an audit committee to replace the function of supervisors. All directors of the Company have professional backgrounds, and they all engage in courses covering securities laws and regulations and corporate governance, and meet the requirements for training hours, in accordance with the "Guidelines for the Implementation of Continuing Education Directors and Supervisors of Listed Companies." 7. Implementation of risk management policies and risk measurement standards: The Company formulates various internal regulations in accordance with the law and conducts various types of risk management and assessment. 8. The implementation of customer-related policies: The Company has a dedicated department responsible for customer inquiry and appeal channels, and creates profit for the Company through its maintenance of stable and good relationships with customers. 9. Purchase of liability insurance by the Company for its directors and supervisors: The

Operating status Discrepancies from the Corporate Governance Best Practice Principles Evaluation items Yes No Summary description for TWSE/TPEx Listed Companies and reasons therefor Company has stipulated regulations on directors’ liability insurance in the “Corporate Governance Best Practice Principles” and has purchased liability insurance for directors to reduce and diversify the risk of material damage to the Company’s shareholders resulting from director error or negligence. IX. Explain the improvements made for corporate governance evaluation results announced by the Corporate Governance Center of the Taiwan Stock Exchange Corporation in the most recent year, and propose priority items for betterment and measures for those items which have not yet improved (companies not included in the evaluated do not need to complete this): The Company was not included in the evaluation, so there is no need to complete it.

(IV) If the Company has a Remuneration Committee, it should disclose its composition and operations

1. Profile of Remuneration Committee Members Does the individual possess more than five Independence Status Conditions years of work experience and the following (Note 2) professional qualifications? Lecturer (or Certified Possesses Number of above) of judge, work other public commerce, prosecutor, experience companies in law, finance, lawyer, required for which the accounting, accountant, business, Identity committee or any subject or holder of legal affairs, Remarks (Note 1) member also relevant to professional finance, 1 2 3 4 5 6 7 8 9 10 serves as a the qualification accounting, remuneration Company's relevant to or corporate committee operations in the business member a public or Company's private operations Name tertiary institution Independent Leo Hong            - Director Independent Long-I            - Director Liao Dawn Ray Independent Bean             - Director (Note)

Tzung- Independent Chen Chen            - Director (Note) Note: Independent director Mr. Dawn Ray Bean resigned on September 22, 2020. According to Article 14-2 of the Securities and Exchange Act, an independent director shall be elected to fill the vacancy. The term of office of the newly elected independent director Tzung-Chen Chen shall be from his election at the extraordinary shareholders meeting on October 15, 2020, until November 7, 2022. Note 1: Fill in as director, independent director, or other. Note 2: Mark "" in the space below each condition code for members who meet the following conditions two years before their appointment and during their tenure. (1) Non-employees of the Company or its affiliates. (2) Not a director or supervisor of the Company or its affiliates (does not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent). (3) Does not hold more than 1% of the Company's outstanding shares in their own names or under the name of spouse, underage children, or proxy shareholder; nor is a top-10 natural-person shareholder of the Company. (4) Not a spouse, relative within the second degree, or direct blood relative within the third degree of the managers listed in (1) or the personnel listed in (2) and (3). (5) Not a director, supervisor, or employee of a corporate shareholder who directly holds more than 5% of the total issued shares of the Company, who are among the top five shareholders, or who have designate a representative as a director or supervisor of the Company in accordance with Article 27, Paragraph 1 or Paragraph 2 of the Company Act (does not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent). (6) Not a director, supervisor, or employee of another company where a majority of the company's director seats or voting shares and those of any other company are controlled by the same person (does not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent) (7) Not a director, supervisor, or employee of another company or institution where a chairperson, general manager, or person holding an equivalent position of the company and a person in any of those positions at another company or institution are the same person or are spouses (does not apply to independent directors appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent). (8) Not a director, supervisor, 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 (does not apply to independent directors if a specific company or institution holds 20% of the Company’s total issued shares but no more than 50% and the independent director is appointed in accordance with the Act or the laws and regulations of the local country by, and concurrently serving as such at, a public company and its parent or subsidiary or a subsidiary of the same parent). (9) Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides auditing services to the company or any affiliate of the company, or that provides commercial, legal, financial, accounting or related services to the company or any affiliate of the company for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or a spouse thereof. However, this does not apply to the Remuneration Committee, Public Acquisition Review Committee, or M&A Special Committee who perform their duties in accordance with the Securities and Exchange Act or the relevant laws and regulations of the Business Mergers and Acquisitions Act. (10) Does not fulfil criteria of Article 30 of the Company Act.

2. Operation of the Remuneration Committee (1) There are 3 members of the Company's Remuneration Committee. (2) Terms of the current members: From November 8, 2019 to November 7, 2022, the Remuneration Committee met 6 times in 2020 and up to the date of publication of the annual report [A]. The qualifications and attendance of the members are as follows: Attendance in Number of Attendance in Title Name person delegates who person rate Remarks [B] attended [B/A] Member Dawn Convener Leo Hong 6 - 100.00% Ray Bean resigned on

Attendance in Number of Attendance in Title Name person delegates who person rate Remarks [B] attended [B/A] September 22, Committee Long-I Liao 5 1 83.33% 2020 and was Member required to have participated in Committee Dawn Ray four remuneration 3 - 75.00% Member Bean committee meetings; the newly appointed member Tzung- Chen Chen is Committee Tzung-Chen 2 - 100.00% required to Member Chen participate in two remuneration committee meetings. Other disclosures: I. If the Board of Directors does not adopt or amend the recommendations of the Remuneration Committee, it shall state the date of the Board of Directors meeting, period, proposal content, results of resolutions of the Board of Directors, and the Company's handling of the opinions of the Remuneration Committee (if the compensation approved by the Board of Directors is better than the recommendations of the Remuneration Committee, such differences and reasons for which should be stated): No such situation. II. As to the resolutions of the Remuneration Committee, if there is opposition or qualified opinions from members for which there exist records or written statements, the Remuneration Committee meeting date, period, proposal content, all members’ opinions, and the handling of opinions should be stated: No such situation.

(V) Performance of corporate social responsibility and discrepancies with Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons therefor Operating status Discrepancies with the Corporate Social Responsibility Best Practice Evaluation items Yes No Summary description Principles for TWSE/TPEx Listed Companies and reasons therefor I. Does the Company perform In order to emphasize a corporate culture of No major assessments of risks in environmental, integrity and ethics, the Company has discrepancies. social, and corporate governance  formulated the "Corporate Social

issues relevant to its business activities Responsibility Best Practice Principles" to

and devise risk management policies regulate compliance of the management and and strategies based on the principle employees. The Company will fulfill its of materiality? corporate social responsibilities and implement its Principles. II. Has the Company established  The Company has formulated the "Corporate No major

exclusive (or concurrent) dedicated Social Responsibility Best Practice discrepancies.

units to be in charge of proposing and Principles.” Currently, the Company’s CR

Operating status Discrepancies with the Corporate Social Responsibility Best Practice Evaluation items Yes No Summary description Principles for TWSE/TPEx Listed Companies and reasons therefor enforcing corporate social Department promotes CSR and reports to the responsibilities and does the Board of Board of Directors. In the future, full-time Directors authorize the upper social responsibility units will be set up based management with implementation and on need. reporting to the Board of Directors on their implementation? III. Environmental issues (I) Has the Company built proper  (I) In response to the issue of No major environmental management environmentally sustainable discrepancies. systems based on the development, each factory has a CR characteristics of their department responsible for handling industries in place? such matters at the factory, and keeps abreast of the market’s environmental- related regulatory requirements, so as to  understand the future trends in shoemaking to ensure that it accurately and timely launches product technologies that comply with environmental regulations and customer needs. (II) Does the Company endeavor to (II) The factory will gradually move towards No major utilize all resources more  the use of clean energy (such as solar discrepancies efficiently and use renewable power) in accordance with materials which have a low environmental protection and customer impact on the environment? development strategies. At the same time, shoe-related equipment mostly relies on sources of power. In terms of  reducing carbon emissions, we will strive to improve the energy efficiency of machinery and equipment and reduce the power consumption per unit of production capacity. (III) Does the Company evaluate the (III) Regarding the issue of climate change, No major potential risks and opportunities each factory has a CR department each discrepancies of climate change with regard factory has a CR department responsible to the present and future of its for handling such matters at the factory, business, and take appropriate keeping up-to-date on the potential risks action to counter climate and opportunities posed by climate change issues? change to the Company now and in the future, so as to ensure that the correct response measures are introduced at the

Operating status Discrepancies with the Corporate Social Responsibility Best Practice Evaluation items Yes No Summary description Principles for TWSE/TPEx Listed Companies and reasons therefor right times. (IV) Has the Company taken (IV) The Group's greenhouse gas inventory is No major inventory of its greenhouse gas conducted in accordance with ISO discrepancies emissions, water consumption, 14064-1. The Group's factories have and the total weight of waste in established “Management Procedure for the last two years, and drawn Water Pollution Prevention.” With up policies on energy efficiency regard to the goals of water resource and carbon reduction, management, the Procedure is expected greenhouse gas reduction, water to achieve conservation and reduction, reduction, or waste recycling and reuse, and legally management? compliant treatment. Waste management is carried out in accordance with local government laws and regulations and customer needs; reduction, legally compliant disposal and recycling and reuse are achieved, in order to reduce the impact on the environment. I V. Social issues (I) Does the Company comply  (I) The Company’s factories have No major with relevant laws and formulated various management systems discrepancies. regulations and internationally and standards in accordance with local recognized covenants on human labor laws and regulations, including rights, and does it have relevant personnel management rules and work management policies and rules. The Company has also formulated procedures in place? internal control systems for the payroll cycle in accordance with regulations,  abides by relevant labor laws and basic labor human rights principles, and protects the legitimate rights and

interests of employees. The factories have established labor unions in  accordance with local laws and regulations, and will organize various employee benefits to ensure employee- employer harmony. (II) Does the Company establish  (II) The Company has stipulated reasonable No major and implement reasonable salary and remuneration combined with discrepancies. employee benefits (including the employee performance appraisal compensation, leave, and other system and company policies, and benefits), and ensure business  makes a clear difference between performance or results are rewards and punishments to achieve the

Operating status Discrepancies with the Corporate Social Responsibility Best Practice Evaluation items Yes No Summary description Principles for TWSE/TPEx Listed Companies and reasons therefor reflected adequately in principle of fairness and reasonableness. employee compensation? (III) Does the Company provide its (III) The Company provides employees with No major employees with safe and a safe and healthy work environment, discrepancies. healthy workplaces, and  and provides various professional organize training on safety and courses for employees when needed health for its employees on a inside and outside of the factory to regular basis? enhance awareness of environmental safety and health education in employees. (IV) Does the Company offer its (IV) The Company implements internal and No major employees effective external education and training each discrepancies. occupational empowerment year in accordance with the annual training programs? education and training plan to establish effective professional training plans for employees to enhance their career development capabilities. (V) Does the Company comply (V) The Company's product sales and No major with relevant laws and services are in compliance with relevant discrepancies. international standards in laws and regulations and international relation to customer health and standards, and its products are clearly safety, customer privacy, marked. There are also customer marketing, and labeling of complaint handling operations to protect products and services, and does the rights and interests of consumers. it establish relevant consumer protection policies and grievance procedures? (VI) Has the Company established (VI) The Company implements semiannual No major supplier management policies audits on labor conditions, discrepancies. which require suppliers to environmental safety, and anti-terrorism observe relevant regulations on safety, and randomly selects suppliers. If environmental protection, the audit finds deficiencies, those occupational safety and responsible are required to improve hygiene, or labor and human within the deadline. If improvement is rights? If so, describe the continuously not achieved, they will be implementation results. listed on the supply chain black list, and the partnership will be terminated. V. Does the Company refer to The Company has formulated various The Company internationally accepted standards or corporate social responsibility systems and has not yet  prepared a guidelines for the preparation of discloses relevant information on its website corporate reports that disclose the Company's for the public’s inspection at any time. responsibility

Operating status Discrepancies with the Corporate Social Responsibility Best Practice Evaluation items Yes No Summary description Principles for TWSE/TPEx Listed Companies and reasons therefor non-financial information, such as report, and plans corporate social responsibility (CSR) to prepare such a report after reports? Does the Company obtain listing according third-party assurance or qualified to the opinion for the reports above? Company's development needs and in accordance with laws and regulations. VI. If the Company has established corporate social responsibility principles based on the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies,” describe any discrepancies between the principles and their implementation: The Company has formulated a corporate social responsibility code, and currently the Company's internal operations continue to be handled in accordance with the provisions of that code; there are no major discrepancies between the content of the code and its implementation. VII. Other important information helpful to understanding corporate social responsibility operations: In addition to emphasizing the importance of compliance with laws and regulations to protect all stakeholders, the Company also demands the social responsibility of companies under social scrutiny. The Company actively promotes public welfare activities through specific monetary and in-kind donations, participates in elementary school adoption plans and medical subsidy plans in rural areas, as well as other activities. It cares for disadvantaged groups and promotes talent cultivation plans to help people realize their dreams

(VI) Implementation of ethical management and discrepancies with Ethical Corporate Management Best Practice Principles for TWSE/TPEX-Listed Companies and reasons therefor Operating status Discrepancy with industry standards in ethical Evaluation items Yes No Summary description corporate management and reasons therefor I. Establishment of ethical corporate management policy and approaches  (I) Has the Company formulated an (I) The Company has established No major ethical corporate management its "Ethical Corporate discrepancies. policy that has been passed by its Management Best Practice board of directors in its internal Principles," "Ethical Corporate rules and external documents, as Management Operating well as the commitment of the Procedures and Code of board of directors and upper  Conduct" and "Code of Ethics" management to actively implement to regulate the Company's management polices? ethical management policies. In

Operating status Discrepancy with industry standards in ethical Evaluation items Yes No Summary description corporate management and reasons therefor order to ensure that employees, managers, and directors are aware of, comply with, and implement it. (II) Has the Company established  (II) The Company follows the No major mechanisms to assess the risk of principle of ethical discrepancies. unethical conduct and perform management, prohibits the regular analysis and assessment of offering and accepting of business activities with a higher bribes, and clearly stipulates risk of unethical conduct within the that illegal donations are not scope of business? Does the allowed; it also promotes Company implement programs to corporate ethics and corporate prevent unethical conduct based on governance education and the above and ensure the programs training for employees from cover at least the matters described time to time. in Article 7, Paragraph 2 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies? (III) Does the Company clearly define (III) The Company has formulated No major operating procedures, behavioral plans to prevent unethical discrepancies. guidelines, punishment and appeal behavior, it has formulated systems for violations of the operating procedures and program to prevent unethical behavior guidelines in each conduct? And does the Company plan, and has promulgated implement the program and professional ethics and legal regularly review before compliance to the Company's amendment? employees, managers, and directors. II. Implementation of ethical corporate management  (I) The Company evaluates its No major (I) Does the Company evaluate the counterparties in accordance discrepancies. credit records of its counterparties with the internal control and specify good faith terms and system, and agreements signed conditions in the contracts it enters with cooperating partners into? prohibit both parties from  accepting bribes and engaging in other unethical business practices. (II) Does the Company have a unit (II) The Company designates the No major responsible for ethical corporate  Audit Office as the full-time discrepancies. management on a full-time basis unit in charge of promoting the

Operating status Discrepancy with industry standards in ethical Evaluation items Yes No Summary description corporate management and reasons therefor under the Board of Directors which ethical corporate management reports the ethical corporate of the Company and regularly management policy and programs reporting to the Board of against unethical conduct regularly Directors. (at least once a year) to the Board of Directors while overseeing such  operations? (III) Has the Company formulated (III) Those who have a stakeholder No major policies that help prevent against interest in business dealings discrepancies. conflict of interests and has it should inform their managers established appropriate channels for and recuse themselves in filing related complaints in place advance to avoid conflicts of and does it implement them?  interest; directors may state their opinions and answer inquiries with respect to those matters in which the directors themselves or their representatives have stakeholder interest which may harm the Company’s interests, but are not allowed to participate in discussion and voting. (IV) Has the Company established (IV) The Company has established No major effective accounting and internal an effective accounting system discrepancies. control systems to implement and internal control system. ethical corporate management? Internal audit personnel check Does the internal audit unit follow the compliance of the system in the results of unethical conduct risk accordance with the audit plan assessments and devise audit plans and regularly report to the to audit the systems accordingly to Board of Directors. prevent unethical conduct, or engage CPAs to perform such audits? (V) Does the Company periodically (V) The Company organizes No major organize internal and external internal and external education discrepancies. education and training to help and training that include ethical enforce ethical operations? management content according to the situation. III. The operation of the Company whistleblowing system  (I) The Company has an internal No major (I) Has the Company established a independent reporting mailbox. discrepancies.

Operating status Discrepancy with industry standards in ethical Evaluation items Yes No Summary description corporate management and reasons therefor substantial reporting and reward When employees discover system as well as a convenient violations of laws and reporting channel with appropriate regulations, the Company will personnel to be assigned to assist have a dedicated person who the reported party?  will accept and handle the report. Reports involving directors or senior management must be reported to the audit  committee. (II) Has the Company formulated (II) The Company has established a No major standard operating procedures for specific whistleblowing system discrepancies. the investigation of the reported and complaint channels to keep matters, follow-up measures for the identity of the after the investigation has been whistleblower and the content completed, and confidentiality of the report secret, and allows mechanisms? anonymous whistleblowing. (III) Does the Company take measures (III) The Company has established a No major to protect whistleblowers from specific whistleblowing system discrepancies. being improperly handled due to and complaint channels to whistleblowing? protect whistleblowers. The personnel who handle reports shall declare in writing that the identity of the whistleblower and the content of the whistleblower will be kept confidential to ensure that the whistleblower is not improperly handled due to the report. IV. Improving Information Disclosure (I) The Company has formulated No major Does the Company disclose the various systems for the Ethical discrepancies. content of its Ethical Corporate Corporate Management Best Management Best Practice Principles  Practice Principles and and implementation status on its discloses relevant information website or Market Observation Post on its website for public System (MOPS)? reference. V. If the Company has established Ethical Corporate Management Best Practice Principles in accordance with the “Ethical Corporate Management Best Practice Principles for TWSE/TPEX-Listed Companies,” describe any discrepancies between the principles and their implementation. The Company has formulated Ethical Corporate Management Best Practice Principles, and currently the Company's internal operations continue to be handled in accordance with the provisions of those principles; there are no major discrepancies between the content of the code and its implementation.

Operating status Discrepancy with industry standards in ethical Evaluation items Yes No Summary description corporate management and reasons therefor VI. Other important information helpful to understanding the Company’s ethical management operations: In addition to the Ethical Corporate Management Best Practice Principles, the Company also stipulates other internal regulations (such as: prevention of insider trading). In addition, the Company arranges for directors to participate in corporate governance courses, and from time to time promulgates the ethical management policy to employees.

(VII) If the Company has established a corporate governance code of conduct and guidelines, the means of accessing its information should be disclosed: The Company has formulated its Corporate Governance Best Practice Principles and discloses corporate governance in the investor section of the Company's website http://www.sportsgear.com.tw.

(VIII) Other important information that is sufficient to enhance the understanding of corporate governance and operational conditions must be disclosed together: No such situation.

60 Sports Gear Co., Ltd. Statement on Internal Control Date: March 12, 2021 Based on the results of self-assessment of the Company's internal control system for 2020, the Company hereby declares as follows:

I. The Company acknowledges and understands that the establishment, implementation and maintenance of the internal control system are the responsibility of the Board and managerial officers, and that the Company has already established such a system. The purpose of which is to achieve the objectives of operational effectiveness and efficiency (including profit, performance and asset security, etc.), reporting reliability, timeliness, transparency, and conformity with relevant regulations and compliance with relevant laws and regulations, and to provide reasonable assurance with regard to the preceding. II. There are inherent limitations to even the most well designed internal control system. As such, an effective internal control system can only reasonably ensure the achievement of the aforementioned goals. Moreover, the operating environment and situation may change, impacting the effectiveness of the internal control system. The internal control system of the Company features a self-monitoring mechanism. Once identified, any deficiency will be rectified immediately. III. The Company judges whether the design and implementation of the internal control system are effective based on the judgment items of the effectiveness of the internal control system stipulated in the "Regulations Governing Establishment of Internal Control Systems by Public Companies" (hereinafter referred to as the "Regulations"). The Regulations are instituted for judging the effectiveness of the design and implementation of the internal control system. There are five components of effective internal control as specified in the Regulations with which the procedure for effective internal control is measured, namely: 1. Control Environment, 2. Risk Assessment, 3. Control Operations, 4. Information and Communication, and 5. Supervisory Operations. Each of the elements in turn contains certain audit items. Refer to the Regulations for details. IV. The Company has adopted the above-mentioned internal control system judgment items to assess the effectiveness of the design and implementation of the internal control system. V. Based on the aforementioned assessment findings, the Company holds that it has reasonably preserved the achievement of the aforementioned with the internal control system as of December 31, 2020 (including the monitoring and management of the subsidiaries), including the effectiveness and efficiency in operation, reliability, timeliness, and transparency in reporting, conformity with relevant regulations and compliance with relevant laws and regulations, and that the design and enforcement of internal control are effective. VI. This Statement constitutes part of the Company’s annual report and prospectus, and shall be disclosed to the public. Any illegal misrepresentation or omission relating to the public statement above is subject to the legal consequences under Articles 20, 32, 171, and 174 of the Securities and Exchange Act. VII. This Statement was approved by the Board on March 12, 2021 in the presence of 7 directors, who concurred unanimously.

Sports Gear Co., Ltd.

Chairman: Wei-Chia Chen Signature/Seal

President: Wei-Chia Chen Signature/Seal

(X) Where in the most recent year and up to the printing date of the annual report, the Company and its internal personnel have been penalized in accordance with the law, or the Company has imposed penalties on its internal personnel for violations of its internal control system, and the results of the penalties may have a significant impact on shareholders’ rights and securities prices, the penalization content, main deficiencies, and improvement situation shall be specified: No such situation.

(XI) Important resolutions of the shareholders’ meeting and Board of Directors in the most recent year and up to the printing date of the annual report:

1. Resolutions of the 2020 shareholders’ meeting Item Meeting Important resolution date Annual 2020.06.18 Acknowledgements shareholders' 1. Acknowledge the Company's business report and meeting consolidated financial statement for 2019. Implementation: The shareholders’ meeting resolved to pass the matter as proposed. 2. Acknowledge the Company's 2019 surplus distribution case. Implementation: The shareholders’ meeting resolved to pass the matter as proposed. Discussion items 1. Amendment to part of the text of the Company’s "Articles of Incorporation.” Implementation: The shareholders’ meeting resolved to pass the matter as proposed. 2. Capital surplus issuance of cash dividends Implementation: The shareholders’ meeting resolved to pass the matter as proposed. 3. Amendment to the Company’s "Procedures for the Acquisition or Disposal of Assets," "Procedures for Endorsements and Guarantees," "Guidelines for Fund Loans to Others" and "Procedures for Engaging in Financial Derivative Transactions.” Implementation: The shareholders’ meeting resolved to pass the matter as proposed. 4. Amendment to some of the provisions of the Company’s "Rules of Procedures for Shareholders' Meetings". Implementation: The shareholders’ meeting resolved to pass the matter as proposed. The first 2020.10.15 Discussion items extraordinary 1. Amendment to part of the text of the Company’s "Articles shareholders’ of Incorporation.” meeting Implementation: The shareholders’ meeting resolved to pass the matter as proposed. 2. Amendment to some of the provisions of the Company's "Rules of Procedure for Shareholders’ Meetings."

Item Meeting Important resolution date Implementation: The shareholders’ meeting resolved to pass the matter as proposed. 3. Amendment to some of the provisions of the Company's "Regulations Governing the Election of Directors.” Implementation: The shareholders’ meeting resolved to pass the matter as proposed. Election items A proposal for the by-election of an independent director of the second term of the Board of Directors. Election results: List of independent directors elected Account number or Account Number of identity card name votes No. N1020***** Tzung- 156,833,052

Chen Chen 2. 2020 board resolutions Item Meeting Important resolution date Third 2020.04.16 1. Approved the amendment to some articles of the meeting of Company's "Articles of Incorporation.” the second 2. Approved the Company’s Statement on Internal term Control for 2019 3. Approved the Company's business report and consolidated financial statement for 2019. 4. Approved the Company's 2019 surplus distribution. 5. Approved the Capital surplus issuance of cash dividends. 6. Approved the Company's 2019 director remuneration. 7. Approved the promotion of Can Sports Vietnam and All Wells Plant Vice President Jack Wang to Executive Vice President of Can Sports Vietnam, All Wells, Indonesia, and August Sports Vietnam Plants. 8. Approved the acquisition or disposal of machinery and equipment among the Company's affiliates in 2019. 9. Approved the amendment to the Company's internal control system. 10. Approved the amendment to the Company's "Procedures for the Acquisition or Disposal of Assets," "Procedures for Endorsements and Guarantees," "Guidelines for Fund Loans to Others," "Guidelines for the Supervision and Management of Subsidiaries" and "Procedures for Engaging in Financial Derivative Transactions.” 11. Approved the amendments to the Company’s

Item Meeting Important resolution date "Remuneration Committee Organization Rules" and "Audit Committee Organizational Rules.” 12. Approved the amendments to the Company’s "Rules and Procedures for Board of Directors Meetings" and "Rules of Procedures for Shareholders Meetings.” 13. Approved amendments to relevant regulations on corporate governance. 14. Approved the Company's "Preparation of the financial statement evaluation form and plan by the Company.” 15. Approved the Company's capital increase by cash in overseas subsidiary Sports Gear Co., Ltd. (Samoa). 16. Approved the Company's inter-affiliate fund loan case. 17. Approved application to banks and financial institutions for loan limit increase and contract renewal. 18. Approved the proposal of the Taiwan branch of the Company's subsidiary Samoa Business Sports Gear International Enterprise Co., Ltd. to donate to the "Sports Gear Social Welfare Foundation"; proposal to ratify the donation in 2019 and resolution for the donation in 2020. 19. Convene 2020 shareholders' meeting and related matters. Fourth 2020.06.30 1. Approved manager's 2019 bonus distribution for meeting of annual performance. the second 2. Approved salary adjustment for Chi Hung, Dai Hoa term Vietnam Factory Vice President Jason Liu, and Audit Manager Meg Hu. 3. Approved salary reduction case for management above the vice president level. 4. Approved the transfer of personnel at the same level as vice president of sub-subsidiary company Can Sports Shoes Co., Ltd. 5. Approved capital increase by cash in Can Sports Vietnam Co., Ltd. through Elephant Step Co., Ltd. (Seychelles), an investment holding company in which 100% is held directly by the Company. 6. Approved cancellation of investment in the purchase of land use rights in Bà Rịa-Vũng Tàu Province, Vietnam. 7. Approved cancellation of the endorsement and guarantee provided by the sub-subsidiary Can Sports Shoes Co., Ltd. to the Taiwan branch of Sports Gear Co., Ltd. 8. Approved the Company's inter-affiliate fund loan case.

Item Meeting Important resolution date 9. Approved application to banks and financial institutions for loan limit increase and contract renewal. Fifth 2020.09.29 1. Approved the consolidated financial statement for meeting of the second quarter of 2020. the second 2. Approved the “Financial Forecast for the Q4 2020 term and Q1 2021.” 3. Approved entrustment of the Taiwan branch of Samoa Business Sports Gear International Enterprise Co., Ltd. to process tax payment and information disclosure. 4. Approved the proposed appointment of Mr. Wei-Chia Chen as the Company's litigation and non-litigation agent within the territory of the Republic of China. 5. Approved the appointment of managers and spokespersons. 6. Approved the appointment of managers and acting spokespersons. 7. Approved the proposal for the Statement on Internal Control for July 1, 2019 to June 30, 2020 8. Approved the signing of the "Over-allotment and Lock-up Period Agreement for Specific Shareholders" between the Company and Yuanta Securities Co., Ltd. 9. Approved the signing of the "Sponsor Appointment Contract" between the Company and Yuanta Securities Co., Ltd. 10. Approved the amendment to the Company's "Rules of Procedure for Shareholders' Meetings.” 11. Approved the amendment to the Company's "Regulations Governing the Election of Directors.” 12. Approved the amendment to the Company's "Rules and Procedures for Board of Directors Meetings." 13. Approved the amendment to the Company's "Rules Governing the Scope of Powers of Independent Directors." 14. Approved the amendment to the Company’s “Audit Committee Organizational Rules.” 15. Approved the amendment to the Company’s “Remuneration Committee Organization Rules.” 16. Approved the amendment to the Company's "Regulations on Financial Operations between Affiliates.” 17. Approved the amendment to the Company’s “Board of Directors Performance Evaluation Guidelines.” 18. Approved the amendment to the Company's "Code of Ethics.” 19. Approved amendments to some of the articles of the

Item Meeting Important resolution date Company’s "Articles of Incorporation.” 20. Approved the establishment of a corporate governance manager. 21. Approved the review of the scope of managers that the Company should submit to the Remuneration Committee for remuneration pre-review in 2020. 22. Approved the Company's inter-affiliate fund loan case. 23. Approved application for loan contract renewal from banks and financial institutions. 24. In response to the adjustment of the Group's organizational structure, the sub-subsidiary CAN SPORTS VIETNAM CO., LTD. (Can Sports Vietnam) intends to sell its equity in SGP to subsidiary Elephant step Co., Ltd. 25. Approved the by-election of the second independent director. 26. Approved the convening of the first extraordinary shareholders’ meeting in 2020. Sixth 2020.10.23 1. Approved appointment of Tzung-Chen Chen as an meeting of independent director member of the first term of the the second Company’s remuneration committee. term Seventh 2020.11.13 1. Approved the consolidated financial statement for meeting of the third quarter of 2020. the second 2. Approved the Company's inter-affiliate fund loan term case. 3. Approved sub-subsidiary Silk Invest International Co., Ltd. (hereinafter referred to as: Silk Invest International) to obtain two pieces of real estate. Eighth 2020.12.16 1. Approved the appointment of Juergen Hans meeting of Wormser, vice president of business development the second and footwear innovation technology. term 2. Approved the review of the Company's 2020 director and manager salary and remuneration policies, systems, standards, and structures, and review of the Company's 2020 director and manager salary and remuneration proposals. 3. Approved the 2021 financial budget. 4. Approved the 2021 audit plan. 5. Approved the appraisal of the independence and competence of CPAs. 6. Approved in order to coordinate with the application for listing in Taiwan; it is proposed to issue 21,785 thousand new shares by cash capital increase before listing. 7. Approved the details of the Company's guidelines for capital increase by cash for employee share

Item Meeting Important resolution date subscription and manager subscription before the Company's initial listing. 8. Approved subsidiary SPORTS GEAR CO., LTD. ("SPG Samoa") to make a capital increase by cash in the Company's sub-subsidiary Silk Invest International Co., Ltd. 9. Approved the capital increase by cash of the subsidiary FONGYUAN INTERNATIONALCO., LTD. 10. Approved the capital increase by cash of the subsidiary ELEPHANT STEP CO., LTD. 11. Approved subsidiaries ELEPHANT STEP CO., LTD. and FONGYUAN INTERNATIONAL CO., LTD. to make capital increase by cash in Indonesian sub-subsidiary PT CAN SPORTS INDUSTRIAL INDONESIA. 12. Approved subsidiary ELEPHANT STEP CO., LTD. to make capital increase by cash in Portuguese sub- subsidiary SGP-SPORTS GEAR PORTUGAL, S.A. 13. Approved the Taiwan branch of Sports Gear Co., Ltd., a subsidiary branch organization, to apply to financial institutions for foreign exchange derivative transactions. 14. Approved authorization of the Chairman of the Board of Directors to carry out USD-NTD forward exchange hedging for the Taiwan branch of Sports Gear Co., Ltd. within a monthly limit of US$2 million. 15. Approved sub-subsidiary Silk Invest International Co., Ltd. to apply for loan limit increase from the bank. 16. Approved the Company's inter-affiliate fund loan case. 17. Approved increase of sub-subsidiary PT CAN SPORTS INDUSTRIAL INDONESIA’s land purchase quota to US$4 million.

(XII) In the most recent year and up to the printing date of the annual report, if there is opposition or qualified opinions from directors or supervisors on major resolutions passed by the Board of Directors for which there exist records or written statements, the main contents are: No such situation.

(XIII) A summary of the resignation and dismissal of the Company’s chairman, president, accounting supervisor, financial officer, internal audit manager, corporate governance manager, and R&D manager in the most recent year and up to the printing date of the annual report: No such situation.

V. Accountant fee

(I) Accountant Fee Information Bracket Table Duration of audit by Name of accounting firm Names of accountants Remarks accountants Deloitte Taiwan Amy Rock 2020.1.1~2020.12.31 None Chiang Tseng

Unit: Thousands NT$ Fee item Amount bracket Auditing fee Non-auditing fee Total

1 Less than NT$2,000 thousand 2 NT$2,000 thousand (inclusive) – NT$4,000 thousand 3 NT$4,000 thousand V (inclusive) – NT$6,000 thousand 4 NT$6,000 thousand V (inclusive) – NT$8,000 thousand 5 NT$8,000 thousand (inclusive) – NT$10,000 thousand 6 NT$10,000 thousand V (inclusive) and above

(II) If the Company has one of the following circumstances, the accountant fee must be disclosed: 1. The non-auditing fees paid to the CPAs, the CPAs' firm, and its affiliates account for more than one-fourth of the auditing fees: Unit: Thousands NT$ Name of Non-auditing fee Duration of Names of Auditing accounting System Business Human audit by Remarks accountants fee Other Subtotal firm design registration resources accountants Non-audit report system comprises a Deloitte Amy Chiang 7,700 - 547 3,600 4,147 2020 year transfer Taiwan Rock Tseng pricing report and internal control review 2. If the accounting firm is replaced and the auditing fees paid during the year of replacement are less than the auditing fees of the previous year, the amount and reasons for the difference in auditing fees must be disclosed: No such situation. 3. If the auditing fees are reduced by more than 10% from the previous year, the amount, proportion, and reasons for the reduction in auditing fees must be disclosed: No such situation. VI. Information on change of accountant: No such situation. VII. The Company’s chairman, president, manager in charge of financial or accounting affairs, and those individuals who have worked at the firm of the CPA or its affiliate within the most recent year: No such situation. VIII. Changes to shareholding of directors, supervisors, managers, and major shareholders whose shareholding ratio exceeds 10% of the equity transfer and pledge loan in the most recent year and

up to the printing date of the annual report

(I) Changes in equity of directors, supervisors, managers and major shareholders whose shareholding ratio exceeds 10% Unit: Shares

2020 up to the printing date 2020 of the annual report

Increase Increase Title Name Increase (decrease) in Increase (decrease) in (decrease) in the number (decrease) in the number shareholding of pledged shareholding of pledged shares shares Chairman and Wei-Chia Chen - - - - President Jialai Development - - - - Co., Ltd. Director Representative - - - - Thomas Wang Pure-Xu Real Estate - - - - Advertising Co., Ltd. Director Representative - - - - Thomas Lee Director Davis Cheng - - - - Independent Director Leo Hong - - - - Independent Director Long-I Liao - - - - Independent Director Tzung-Chen Chen - - - - Shareholder who MATCH SPORTS holds more than 10% INTERNATIONAL - - - - of the Company’s CO., LTD. shares Shareholder who holds more than 10% Mu Mu Sports - - - - of the Company’s International Limited shares Shareholder who holds more than 10% Lu Lu Sports - - - - of the Company’s International Limited shares Shareholder who Preferred Grand Fund holds more than 10% SPC-Stone Wall Fund - - - - of the Company’s Segregated Portfolio shares Chief Operating Officer and Vice Nick Lin - - - - President of Can Sports Cambodia Vice President of Can Sports Vietnam, All Wells and August Sports Vietnam; Jack Wang - - - - Chairman of PT Can Sports Industrial Indonesia

2020 up to the printing date 2020 of the annual report

Increase Increase Title Name Increase (decrease) in Increase (decrease) in (decrease) in the number (decrease) in the number shareholding of pledged shareholding of pledged shares shares Vice President of Chi Hung and Dai Hoa Jason Liu - - - - Vietnam Vice President of PT Can Sports Industrial Danis Chang - - - - Indonesia Special Assistant to Benjamin David the Chairman and - - - - Metcalf Spokesperson Corporate Governance Manager Fu-Sheng Ku - - - - and Acting Spokesperson Accounting Supervisor and Vincent Kang - - - - Financial Officer Audit Manager Meg Hu - - - -

(II) Where counterparties of the equity transfer by directors, supervisors, managers, and major shareholders whose shareholding ratio exceeds 10% are related parties: No such situation.

(III) Where counterparties of the pledge loan by directors, supervisors, managers, and major shareholders whose shareholding ratio exceeds 10% of the pledge loan are related parties: No such situation.

IX. Information disclosing where there are related parties, spouses, or relationships of kinship within second degree among any of the top ten shareholders, and the relationship between them:

April 8, 2021; Unit: Thousand shares: % Titles, names, and relationships where there Total combination of are related parties, The individual holds Spouse & Minor shares by nominee spouses, or relationships Remarks shares Shareholding Name arrangement of kinship within second degree among any of the top ten shareholders Shareholding Shareholding Shareholding Name (or Shares Shares Shares Relationship ratio ratio ratio full name) MATCH SPORTS 62,225,185 35.71 ------INTERNATION AL CO., LTD. Responsible person/corporate representative: 2,000,000 1.15 - - 127,465,924 73.15 - - - Wei-Chia Chen (Note 1) Mu Mu Sports International 30,055,555 17.25 ------Limited Responsible person/corporate representative: 2,000,000 1.15 - - 127,465,924 73.15 - - - Wei-Chia Chen (Note 1) Lu Lu Sports International 18,518,518 10.63 ------Limited Responsible person/corporate representative: 2,000,000 1.15 - - 127,465,924 73.15 - - - Wei-Chia Chen (Note 1) Preferred Grand Fund SPC-Stone Wall Fund 18,518,518 10.63 ------Segregated Portfolio Responsible person/corporate ------representative: Lun-Chun Yeh Lesson 1 Company 16,666,666 9.56 ------Limited Responsible person/corporate representative: 2,000,000 1.15 - - 127,465,924 73.15 - - - Wei-Chia Chen (Note 1) Li-Yang Lai 12,252,962 7.03 ------Wei-Chia Chen 127,465,9 2,000,000 1.15 - - 73.15 - - - (Note 1) 24 Pure Huang 1,957,570 1.12 ------

Titles, names, and relationships where there Total combination of are related parties, The individual holds Spouse & Minor shares by nominee spouses, or relationships Remarks shares Shareholding Name arrangement of kinship within second degree among any of the top ten shareholders Shareholding Shareholding Shareholding Name (or Shares Shares Shares Relationship ratio ratio ratio full name) Investment Co.,Ltd. Responsible person/corporate 63,425 0.04 ------representative: Yue-Hu Yang CHEN BAU 1,957,570 1.12 ------Limited Responsible person/corporate ------representative: Li-Feng He Pure-Xu Real Estate 1,793,371 1.03 ------Advertising Co., Ltd. Responsible person/corporate representative: 718,964 0.41 - - 1,274,697 0.73 - - - Thomas Lee (Note 2) Note 1: Wei-Chia Chen holds 100% equity interest in MATCH SPORTS INTERNATIONAL CO., LTD., Mu Mu Sports International Limited, Lu Lu Sports International Limited and Lesson 1 Company Limited. Note 2: Thomas Lee holds shares in Park Group Investment Co., Ltd., in which he has controlling interest. X. The number of shares held by the Company, its directors, supervisors, managers, and businesses directly or indirectly controlled by the Company in the same investee company, and calculate the comprehensive shareholding ratio together

December 31, 2020; Unit: Thousand shares: % Investment of directors, supervisors, managers and Total comprehensive The Company's investment businesses that are directly or investment Investee company indirectly controlled Shareholding Shareholding Shareholding Shares Shares Shares ratio ratio ratio Samoa Sports Gear 5,036 100% - - 5,036 100% All Wells 12,500 100% - - 12,500 100% Elephant 43,000 100% - - 43,000 100% Fongyuan 31,850 100% - - 31,850 100% Silk Invest (Note) 100% - - (Note) 100% Chi Hung (Note) 100% - - (Note) 100% All Wells (Note) 100% - - (Note) 100% Can Sports (Note) 100% - - (Note) 100%

Investment of directors, supervisors, managers and Total comprehensive The Company's investment businesses that are directly or investment Investee company indirectly controlled Shareholding Shareholding Shareholding Shares Shares Shares ratio ratio ratio Cambodia Can Sports Vietnam (Note) 100% - - (Note) 100% Dai Hoa Vietnam (Note) 100% - - (Note) 100% August Sports - - (Note) 100% (Note) 100% Vietnam Fireman (Note) 100% - - (Note) 100% Sports Gear - - (Note) 100% (Note) 100% (Myanmar) PT Can Sports - - (Note) 100% (Note) 100% Industrial Indonesia SGP (Note) 100% - - (Note) 100% Note: It is a limited company and has no shares issued.

D. Fundraising situation

I. Capital and shares (I) Sources of capital 1. Capital formation process Unit: Thousand shares; NT$ thousand Authorized capital Paid-in capital Remarks Year, Issue price Capital increased Amount Amount Sources of month (NT$) Shares Shares by assets other Other (USD) (USD) capital than cash Establish share 2017.03 1 500,000 500,000 2,000 2,000 - - capital Debt converted to 2017.07 1 500,000 500,000 4,000 4,000 capital increase (Note 1) New shares issued by 2017.12 1 500,000 500,000 174,261 174,261 organizational restructuring (Note 2) Face value converted to NT$10 Authorized capital Paid-in capital Remarks Year, Issue price Capital increased Amount Amount Sources of month (NT$) Shares Shares by assets other Other (NTD) (NTD) capital than cash 2018.12 10 500,000 5,000,000 174,261 1,742,606 - - - Note 1: Chairman Wei-Chia Chen used his personal 100%-owned investment company to remit investment funds totaling US$4,000,000 at the establishment of the Company. The Company was established in March 2017 and registered with a capital of US$2,000,000. The difference is accounted for in the accounting treatment of temporary receipts. The item was re-registered as capital in July 2017, and the accounting treatment was regarded as a debt-to-capital increase. Note 2: The Company's Board of Directors resolved on December 27, 2017 to enact 100% share conversion with INsport International Co., Ltd. (Samoa) (share conversion ratio 0.0054: 1 share), and signed a share subscription agreement with the shareholders of Elephant and Fongyuan; where Elephant’s (share exchange ratio 1.0983: 1 share) and Fongyuan’s (share conversion ratio 3.6402: 1 share) equity was used to purchase new shares issued by the company.

2. Shareholding type April 8, 2021; Unit: Shares Authorized capital Shareholding type Shares issued and Remarks Un-issued shares Total outstanding Common shares 174,260,617 325,739,383 500,000,000 Note Note: The Company's stock has not been listed on the TWSE, nor has it been traded in the business premises of a securities firm.

(II) Shareholder structure April 8, 2021; Unit: shares;%

Shareholder Foreign structure Governme Financial Other legal institutions and Individual Total nt agency institution persons foreigner

individuals Quantity Number of 9 15 9 33 - - people Number of 6,108,216 18,234,943 149,917,458 174,260,617 - - shares held Shareholding 3.51 10.46 86.03 100.00 - - ratio The total shareholding ratio of people, legal persons, organizations, other institutions or companies investing in other regions from Mainland China as stipulated in Article 3 of the Regulations Governing the Permission of Investment by Nationals in Mainland Area is 0%.

(III) Shareholding Distribution Status April 8, 2021; Unit: shares;% Number of Class of shareholding Number of shares held Shareholding ratio shareholders 1 to 999 - - - 1,000 to 5,000 - - - 5,001 to 10,000 - - - 10,001 to 15,000 - - - 15,001 to 20,000 - - - 20,001 to 30,000 - - - 30,001 to 50,000 4 182,578 0.11 50,001 to 100,000 5 423,425 0.24 100,001 to 200,000 4 696,221 0.40 200,001 to 400,000 3 950,000 0.55 400,001 to 600,000 2 992,418 0.57 600,001 to 800,000 3 2,201,992 1.26 800,001 to 1,000,000 - - - 1,000,001 or more 12 168,813,983 96.87 Total 33 174,260,617 100.00

(IV) List of major shareholders: Shareholders holding more than 5% of the shares or the names, shareholding ratios, amounts, and proportions of shares held of the top ten shareholders April 8, 2020; Unit: Shares Shares Main nationality Number of Shareholding or place of shares held ratio registration Name of major shareholder MATCH SPORTS INTERNATIONAL CO., LTD. 62,225,185 35.71 Samoa Mu Mu Sports International Limited 30,055,555 17.25 Samoa Lu Lu Sports International Limited 18,518,518 10.63 Samoa Preferred Grand Fund SPC-Stone Wall Fund Segregated Portfolio The Cayman 18,518,518 10.63 Islands Lesson 1 Company Limited 16,666,666 9.56 Samoa Li-Yang Lai 12,252,962 7.03 Republic of China Wei-Chia Chen 2,000,000 1.15 Republic of China Pure Huang Investment Co.,Ltd. 1,957,570 1.12 Republic of China CHEN BAU Limited 1,957,570 1.12 Hong Kong Pure-Xu Real Estate Advertising Co., Ltd. 1,793,371 1.03 Republic of China

(V) Share price, net worth per share, earnings per share, dividends per share, and related information for the past two fiscal years Unit: New Taiwan Dollars (NT$)/thousand shares The current

year and up to Year 2019 2020 March 31, 2021 Item (Note 4) Not yet Not yet Not yet listed/OTC- Highest listed/OTC- listed/OTC-traded traded traded (Note 4) Not yet Not yet Market price per Not yet listed/OTC- Lowest listed/OTC- share listed/OTC-traded traded traded (Note 4) Not yet Not yet Not yet listed/OTC- Average listed/OTC- listed/OTC-traded traded traded (Note 4) Before distribution 64.00 61.87 (Note 5) Net value per share After distribution 62.00 (Note 3) - Weighted average 174,261 174,261 (Note 5) shares (thousand shares) Earnings per share Earnings per share 6.02 2.35 (Note 5) (Note 1) 2 (Note 3) - Cash dividend (Note 2) Stock Dividend per share Stock dividends - - - dividend from retained

The current

year and up to Year 2019 2020 March 31, 2021 Item (Note 4) earnings Capital - - - surplus Accumulated - - - undistributed dividends Not yet Not yet Price-earnings (PE) Not yet listed/OTC- listed/OTC- ratio listed/OTC-traded traded traded (Note 4) Not yet Not yet Return on Price-dividend (PD) Not yet listed/OTC- listed/OTC- investment analysis ratio listed/OTC-traded traded traded (Note 4) Not yet Not yet Not yet listed/OTC- Cash dividend yield rate listed/OTC- listed/OTC-traded traded traded (Note 4) Source: Consolidated financial statements verified by an accountant. Note 1: Basic EPS after tax. Note 2: On June 18, 2020, the shareholders' meeting resolved to distribute cash dividends of NT$1 per share and a cash dividend of NT$1 per share with the capital surplus. Note 3: On March 12, 2021, the Company's Board of Directors resolved to distribute a cash dividend of NT$1.6875 per share and a cash dividend of NT$1.6875 per share with capital surplus (proposals relating to dividend distribution are expected to be approved for distribution by the resolution of the shareholders' meeting on June 11, 2021). Note 4: It is expected to be primary listed on the Taiwan Stock Exchange Corporation on April 22, 2021. Note 5: The financial statements for the first quarter of 2021 have yet to be audited by accountants.

(VI) Company's Dividend Policy and Implementation 1. Dividend policy stipulated in the Company's Articles of Incorporation According to the Company's Articles of Incorporation, the Company's business is in a growth stage. The Board of Directors must consider the Company's earnings, overall development, financial planning, capital needs, industry prospects, and the Company's future prospects for each fiscal year to ensure shareholder equity and profit; and in addition to the provision of employee compensation and director remuneration in accordance with Article 121 of the Articles of Incorporation, the following shall be included in the net profit for the current period: (I) Payment of tax reserves for the respective fiscal year; (ii) Covering losses; (iii) Statutory surplus reserve (unless the statutory surplus reserve has reached the Company’s paid-up capital), and (iv) The special surplus reserve required by the competent authority for securities in the Republic of China issued by the Board of Directors, or the reserve determined by Article 128 of the Articles of Incorporation. The Board of Directors shall allocate no less than 10% of the fiscal year’s distributable surplus (excluding the cumulative surplus of the previous year) as shareholder dividends. The paid cash dividend shall not be less than 10% of the total dividend. 2. Dividend distribution discussed in the current year The Company’s 2020 dividend distribution proposal was passed by the Board of Directors on March 12, 2021. In accordance with the Company’s Articles of Incorporation, a shareholders’ cash dividend of NT$294,068 thousand, NT$1.6875 per share, and Capital

surplus issuance of cash dividends of NT$294,068 thousand, NT$1.6875 per share are provided from the surplus; proposals relating to dividend distribution are expected to be approved for distribution by the shareholders' meeting on June 11, 2021.

(VII) The impact of the proposed stock dividend this year on the Company's operating performance and earnings per share: The Company has not allocated stock dividends, so there is no impact.

(VIII) Remuneration of employees, directors, and supervisors: (The Company does not have supervisors) 1. The amount or scope of the remuneration of employees, directors, and supervisors stated in the Articles of Incorporation During the trading period of the Company’s shares in the designated securities market, unless otherwise provided by the Cayman Company Law, the Public Offering Company Act or the articles of association, if the Company makes a profit during the year, it shall allocate no less than 2% of the profit. Employee compensation (hereinafter referred to as "employee compensation"), the payment object of employee compensation includes employees of the Company and affiliated companies who meet certain conditions, and the conditions are determined by the Company's Board of Directors. The Company can allocate no more than 2% of the preceding profit as remuneration of directors (excluding independent directors) (hereinafter referred to as "director remuneration"). Employee compensation and directors’ remuneration distribution proposal shall be carried out by the resolution of two-thirds or more of the directors of the Board of Directors in attendance and more than half of the attending directors, and shall be reported to the shareholders’ meeting. However, when the Company still has accumulated losses, it shall reserve the amount for compensating such losses in advance, and then allocate employee compensation and director remuneration in accordance with the aforementioned proportions. The term "profit" in this item refers to the profits before tax from which employee compensation and director remuneration have not yet been deducted. 2. Basis for estimating the amount of remuneration of employees, directors, and supervisors for calculating the number of shares to be distributed as employee compensation, and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated amount, for the current period The remuneration of the Company’s employees, directors, and supervisors is based on the estimated distributable amount stated in the Company’s Articles of Incorporation. If there is a difference between the estimated cost of the current period and the resolution of the shareholders’ meeting, it will be adjusted and recorded in the year of the resolution. 3. Remuneration distribution approved by the Board of Directors (1) Employee, director, and supervisor remuneration will be distributed in cash or stock. In case of any discrepancy between the amounts and the amortized estimates for the year, the differences, reasons, and processing should be disclosed. Although the Company was not officially listed on the market in 2020, it appreciates the hard work of directors and employees. Thus, it is proposed to apply the provisions of the Articles of Incorporation in advance. On March 12, 2021, the Board of Directors resolved to pay director remuneration and employee bonuses, respectively, of NT$6,343 thousand and NT$12,686 thousand in cash; there are no differences in the amounts of director remuneration and employee bonuses between the 2020 assessment and consolidated financial statement. (2) The ratio of the amount of employee compensation distributed in stock to the total net profit after tax and total employee compensation for the current period: No such

situation. 4. Shareholders’ meeting reports on the status and results of the remuneration distribution The 2020 director remuneration and employee dividend distribution plan are expected to be approved for distribution by the shareholders' meeting on June 11, 2021. 5. The actual distribution of remuneration for employees, directors, and supervisors in the previous year (2019) (including the number of shares distributed, amount, and price per share), and discrepancies with the remuneration of employees, directors, and supervisors, and the reasons and processing The Company's 2019 director remuneration distribution proposal was passed by the shareholders' meeting on June 18, 2020, and there are no discrepancies with the amount proposed by the Board of Directors, so this assessment is not applicable.

(IX) Buyback of treasury stock: No such situation.

II. Profile of corporate bonds The handling of corporate bonds (including overseas corporate bonds): No such situation.

III. Handling situation of preferred shares: No such situation.

IV. Status of participation in the issuance of overseas depository receipts: No such situation.

V. Handling situation of employee subscription right certificates: No such situation.

VI. Status of new restricted employee shares: No such situation.

VII. M&A handling situation

(I) In ongoing mergers or acquisitions, the following matters should be disclosed: No such situation.

(II) In ongoing spin-offs, the following matters should be disclosed: No such situation.

VIII. Processing for the issuance of new shares by transfer of shares of other companies: None

IX. Financing Plans and Implementation (I) In order to cooperate with the public underwriting before the initial listing, the Company has made a capital increase by cash of NT$217,850,000, and issued 21,785,000 common shares, each with a face value of NT$10. The Company was approved by the Taiwan Stock Exchange Corporation on January 19, 2021, in letter Tai-Zheng-Shang-Er-Zi No. 11017001621, and was approved for extension of the fundraising period on February 26, 2021, in letter Tai-Zheng-Shang-Er-Zi No. 1100003334. 1. Plan content (1). Amount of funds required for the plan: NT$1,448,542 thousand (2). Sources of funds: By cash capital increase, a total of 21,785 thousand new shares were issued, each having a face value of NT$10, and the lowest underwriting price for bid auction is NT$42.61 per share. The highest bid price is given priority to win the bid, and each successful bidder is able to subscribe according to the price at which the bid was won. The public underwriting price is based on the price of each winning bid and the weighted average price of NT$73.30; however, the average price is higher than 1.15 times the minimum underwriting price, so the public underwriting price was issued at a premium of NT$49 per share, and the total funds raised amounted to NT$1,448,542 thousand.

(3). Project and progress Unit: Thousand NT$ Scheduled fund utilization Scheduled completion Project Total funds required progress date Second quarter of 2021 Enrich working Second quarter of 2021 1,448,542 1,448,542 capital Note: The Company was approved by the Taiwan Stock Exchange Corporation for extension of the fundraising period on February 26, 2021, in letter Tai-Zheng-Shang-Er-Zi No. 1100003334. (4). Expected benefits The Company's current capital increase by cash is used to enrich working capital, which is expected to improve the Company's financial structure and reduce the use of bank borrowing to support operating expenses that could create a situation that deteriorates the Company’s profits. On the whole, this capital increase by cash will have a positive effect on the Company's future operations and development. (5). The content of the change plan, the source and use of funds, the reason for the change, comparison of the benefits before and after the change, and the report to the shareholders’ meeting of the change plan: No such situation. (6). Date of entrance onto the designated information reporting website of the FSC: April 8, 2021

(II) Implementation status and benefit analysis Unit: Thousand NT$ Scheduled fund utilization Scheduled completion Project Total funds required progress date Second quarter of 2021 Enrich working capital Second quarter of 2021 1,448,542 1,448,542 The use of working capital to enrich the working capital will increase the current ratio and improve the financial structure, make working capital scheduling more flexible, and reduce the use of bank borrowing to support operating expenses Expected benefits and dependence on financial institutions that can create a situation that deteriorates the Company’s profits. This action will consolidate the Company’s market competitiveness, thereby reducing business risks and benefiting the overall development of operations.

E. Operation Overview I. Business Activities (I) Business Scope 1. The main activities of the Company's business The Company's main business is the manufacturing of OEM footwear products; footwear includes sports shoes, casual shoes, and custom shoes, with sports shoes being the bulk of production; it is also engaged in the manufacturing of soccer balls and volleyballs. The main business is serving as OEM for international brands such as Group A, Group B, Group C, and Group D. 2. Business sources Unit: Thousand NT$; % 2019 2020 Product name Proportion of Proportion of Sales Amount Sales Amount revenue revenue Sports shoes 11,924,106 69.29 7,726,189 57.17 Casual footwear 4,549,616 26.44 5,478,316 40.54 Balls 455,520 2.65 177,599 1.31 Other 278,795 1.62 132,431 0.98 Total 17,208,037 100.00 13,514,535 100.00 3. The Company's current product (service) items A. Soccer shoes B. Footwear for jogging, hiking, and general leisure C. Baseball shoes, American football shoes D. Balls produced are mainly for rugby, soccer, and volleyball 4. New products (services) planned to be developed At this stage, global OEM/ODM for sports shoes is mostly concentrated in Asia, China, Vietnam, and Indonesia. The Company's main clients are major international brand manufacturers. It is a pure OEM, and it has actively set up exclusive R&D teams and development centers for its major brand clients. The Company works closely with brand clients from product development to product prototypes. With its professional technical competence and years of industry experience, combined with innovative elements and materials, the Company continues to develop new footwear technologies and new formulas, and introduces automated and semi- automated machinery to provide its brand clients with high-quality footwear products, as well as innovative services and solutions, with the purpose of enhancing the Company's competitiveness in the footwear industry and becoming a long-term partner of international brands.

(II) Industry Overview The footwear industry is a labor-intensive industry. Global footwear manufacturing centers have undergone many transformations as manufacturing costs have changed. Although machinery is widely used in the shoemaking process, there are still many processes that cannot be replaced by automated equipment. Therefore, production in the footwear industry still employs the rich and high-quality labor pools of Asian countries including China, Vietnam, India, Indonesia, and Thailand as its main production areas, which provides more than 90% of the global market’s footwear products. The European and American footwear industries, for contrast, put brand maintenance and management at the top of their priorities, and emphasize attention to brand value enhancement and market promotion; they use their advantages in accurately grasping international fashion trends and brand management capabilities to conduct product design and R&D, and use the OEM model to commission and develop shoe producers for production, and then sell the finished products through their own marketing network. 1. Industry status and development According to the World Economic Outlook announced by the International Monetary Fund in October 2020, the negative impact of the COVID-19 pandemic on global economic activities is greater than expected, and the pace of recovery will be slower than previously predicted. It predicts that the global economy will continue to go deeper into a recession in 2020, and global economic growth is projected to be –4.4%. However, since the beginning of this year, the unprecedented downward trend in global economic activities has begun to gradual improve. Countries are actively developing and administering vaccines, adopting emergency financial measures to maintain financial stability, and endeavoring to keep the supply chain open, all to avoid the breakdown of the global trade network. It is estimated that the global growth rate will reverse to 5.2% in 2021.

Source: International Monetary Fund (2020/10)

The Company is mainly engaged in OEM shoemaking. With the rise of sports and leisure trends, sports shoes have become fashionable necessities for daily wear in addition to professional wear. In response to consumption patterns, various types of sports wear, shoes, and clothing with different functions have become the trend; as a result, market demand is still optimistic. According to the statistics of Plunkett Research, an international survey agency, the global sports and leisure industry has grown at an annual rate of 5.7% since 2005. According to Statista, revenue of the footwear market in 2019 was US$439,022 million. Affected by the COVID-19 pandemic, footwear market revenue has been estimated at US$432,108 million in 2020. Nevertheless, it is forecast to generate US$564,994 million by 2025, with the overall footwear market expected to grow at an annual rate of 5.5% (compound annual growth rate for 2020-2025). Growth of the footwear industry is steady and optimistic.

Source: Statista 2. Connections to the industry's up-, mid-, and downstream industry

Upstream Midstream Downstream

Textile industry

Leather industry Shoe materials

Plastic industry

Footwear production Brand manufacturer Petrochemical industry

Rubber industry

The shoe industry can be divided into the upstream supply of raw materials, such as textiles, leather, chemicals, etc. Materials for different parts of the show need to be produced with different raw materials. Because the shoe industry has a long developmental history, shoe material types are very diverse, and the market is huge. Show materials have developed into a specialized application field; materials for different parts of the shoe require different raw materials to be produced, such as: The rubber soles of sports shoes are made by thermo-compression molding or Ethylene-Vinyl Acetate (EVA) formed soles; the uppers are made of synthetic leather, mesh cloth, or leather (artificial leather or genuine leather). Shoe manufacturers are responsible for the development of shoe shapes and the production of finished shoes. After multiple production processes, shoe materials are combined to make a pair of shoes. Downstream brand plants are responsible

for product development and design, either solely on their own or jointly with shoe plants; they then commission the footwear plants to produce the designed shoes before selling them to consumers through the brand manufacturers’ own channels or agents. The Company is a mid-stream footwear manufacturer. The Company's main clients are major international brand manufacturers. It is a pure OEM, and in recent years, it has continuously advanced its shoemaking technology and increased production efficiency. It also provides exclusive development centers for its major brand clients, thus securing its client relationships and establishing a good competitive advantage for the Company. 3. Various development trends of products (1). Green industry and environmental production In view of the rising awareness of environmental protection in recent years, domestic and foreign industry operators have gradually oriented their R&D towards environmentally-friendly footwear or shoe materials. Whether it is the reuse of waste materials, such as the use of old newspapers and magazines, discarded tires and PET bottles, etc., they are processed and manufactured into shoe materials or shoes (such as: Adidas’ EQT line). Or, there are innovative materials used in Nike's FlyLeather Earth Day Pack line. The Flyleather can increase the material’s "sustainability" while also reducing the waste of the earth’s resources. In addition, the production process is resource-saving. Adidas also launched its first 100% recyclable running shoes FUTURECRAFT.LOOP. The shoe is made of the same Thermoplastic Urethane (TPU): whether it is the upper, sole, or the laces; and the process also avoids the use of glue used in traditional shoemaking. Shoes are assembled using thermo-compression molding technology; so after the shoes are scrapped, they can be washed, pulverized into small pellets, and then melted into materials for manufacturing new shoes, making the entire process more environmentally friendly. (2). Product technology upgrades are moving toward development of smart shoes The main function of sports shoes is to enhance performance and reduce injuries. The continuous innovations made in shoe-making technology and sports technology have allowed sports shoes to perform better in terms of protection, shock absorption, anti-slippage, comfort, light weight, and elasticity. Unibody shoe upper technology not only reduces material waste in upper cutting, but also eliminates the stitching

step, effectively saving on manual labor and materials. For 3D printed sports shoes, the shoe’s parts are accurately “drawn,” and the proprietary layering technology can be used to create completely unique shoes without the use of traditional molds. It can reduce the time to develop footwear and meet consumption patterns in this “fast fashion” society. Smart shoes that combine various technological functions, such as automatic strapping and linking with running software through mobile app, allow the wearer to see detailed data such as stride length, rhythm, distance, and running shoe lifespan. It allows sports shoes to have a diversified product appearance and creates new added value. Consumer preferences are changing rapidly, and innovation has always been part of core competitiveness; this has opened up more possibilities and opportunities for the sports shoe market. (3). Process automation In the past, the shoe industry was limited by processes that were not easy to standardize, so it relied heavily on manual labor. These facts led to it being regarded as a traditional labor-intensive industry, and it was generally seen as difficult to achieve automation. However, as labor costs continued to rise and technological development has reached maturity, automation and intelligence in the shoe industry have become development trends. Current Industry 4.0 has opened up a new direction for the shoe industry. With the support of smart equipment and innovative shoe materials, the application of technologies such as the Internet of Things, cloud computing and big data, as well as the advancement of operation management help optimize production resources. In the shoe production process, if a large number of robotic arms can be used and an automated control system introduced for procedures with high repetitiveness and requirements for precise actions, the quality of shoe production can be made more stable, and the plant will achieve higher production efficiency, more effective plant management, and lower manufacturing costs. 4. Product competitiveness The Company manufactures sports shoes and casual shoes for international brands. In order to meet their high standards for product delivery, quality, price, and service, we continue to invest resources in the development of core technologies and improvement of production processes. We also continues to accumulate our own R&D capabilities, actively shifting to OEM design and manufacturing. In addition, the Company has

decentralized production bases, ample experience in plant management, and attaches importance to and specifically responds to corporate sustainability issues, thus maintaining its competitiveness in the shoe industry. (III) Technology and R&D Overview 1. Technical levels, research and development of the business Since its establishment, the Company has continued its R&D in pursuit of its goal of producing high-quality products. R&D projects include the development and application of new shoe materials and the introduction and improvement of manufacturing technology. And the establishment of SGP in Portugal will specialize in automated production processes. In addition, it promotes the collection of production data through the Real Time System, and improves the stability, speed, and flexibility of production through big data analysis applications and cloud computing. The Company continues to invest in automation, innovative technology, process improvement, and shoe material development to meet brand client needs for high-quality products and services and quick market response. In this way, it will deepen cooperation with brand clients, increase mutual business dependence, and solidify the Company’s status in the shoe industry. 2. R&D personnel and their academic experience

Unit: Number of people Education 2018 2019 2020 February 26, 2021 PhD 0 0 0 0 Master's degree 3 1 0 0 College (Technical 240 242 332 340 school)/University Below high school 469 447 280 276 (inclusive) Total 712 690 612 616 Total 712 690 612 616 3. Annual R&D expenditure invested in the most recent five years

Unit: Thousand NT$; % Item 2016 2017 2018 2019 2020

R&D expenses Note 289,906 462,847 536,244 404,900 Net operating Note 16,017,946 17,318,360 17,208,037 13,514,535 revenue Percentage of net Note 1.81% 2.67% 3.12% 3.00% operating revenue Note: The Company only issues consolidated financial statements for the most recent three years. 4. Successfully developed technologies or products in the most recent five years

Year R&D results 2015 Introduction of silicone printing production technology Introduction of foam printing production technology Water-based three-dimensional printing production technology Rubber outsole 3D PUR 2016 Introduction of automated printing technology Introduction of RFID technology Sublimation printing process for upper 1st-gen soccer shoes used direct injection into TPU molding Shoe upper stitch-less technology 2017 1.5-gen soccer shoes used direct injection into TPU molding Shoe upper vacuum adsorption technology Transparent rubber outsole High wear-resistant IP midsole 2018 Automatic injection directly into TPU molding for soccer shoes 7VG Online Real-Time Inspection Record System V1.0 High-speed cloud point visual identification and detection system 2019 Expansion of automatic direct injection technology Smart toe box High automatic board lasting machine 7VG Online Real-time Inspection Record System V1.2 High-speed cloud point visual identification and detection system High-speed tag identification information integration system 2020 System protection and product safety upgrade Automatic direct injection technology application upgrade Shoe upper line drawing device assembly Mechanical arm (IV) Long-term and short-term business development plans 1. Short-term development plan (1). Marketing strategy A. Improve structure of product and customer base to increase profitability and reduce competitive pressures. B. Actively develop new markets and new customers to diversify risks. C. In addition to continuing to cultivate professional sports shoe technologies, actively enter the general sports shoes market to increase economic scale. D. Through research and development capabilities, we closely cooperate with clients to develop models and deepen trust and relationships. (2). Production policy

A. Implement continuous improvement of quality policy. B. Continuously improve efficiency and productivity of employee teams. (3). Financial strategy Under the premise that profitability is not affected and in order to cooperate with the expansion of the business, capital increase or bank borrowing is performed to meet capital needs. 2. Long-term development plan (1). Marketing strategy A. The Company has set up exclusive R&D teams and development centers for major brand clients. With its professionalism, ample technical strengths, and industry experience, the Company provides brand clients with high-quality, innovative footwear products and services. B. The Company works closely with brand clients from product development to product prototypes, with the aim of developing core plants for long-term cooperation with international brands to gain market share. C. Actively invest in Industry 4.0. Use big data analysis and cloud technology to establish various analysis modules, share real-time information with clients for quick reaction time, with the aim of reducing overall supply chain costs and increasing profits. D. By having control over data from big data analysis, we formulate standardized process parameters and develop towards a high degree of semi-automation; in the future, we can quickly set up bases in various locations according to client needs. (2). Production policy A. Implement lean production to effectively control costs, strive to promote lean production, reduce unnecessary waste in the production process, effectively control costs and increase gross profit margins, and actively expand plants in Indonesia; expand production units internationally in response to the rapidly changing international situation; expand the Company's operating scale; timely utilize production capacity of each plant to maximize the Group's benefits. B. Improve production and R&D capabilities; establish SGP in Portugal to focus on automated production processes. In addition, implement the Real Time System in various manufacturing plants

to collect production data, which is used to improve the stability of production. Continue to invest in automation, innovative technology, process improvement, and development of shoe materials to meet brand client needs for high-quality products and services and quick market response. (3). Financial strategy A. Make full use of capital market financing tools to obtain lower- cost funds as a resource for company operations. B. Based on the principle of sound monetary policy, use financial management tools to gain efficiency in capital utilization and creation of added value. II. Market, production, and sales overview (I) Market analysis 1. Sales (Provided) Regions of Main Products (Services) The sales market of the Company in the last two years has been dominated by Europe and the Americas; the continents accounted for about 80% of the Company's revenue. The ratios by sales region for the last two years are shown in the following table:

Unit: Thousand NT$; % Year 2019 2020 Sales regions Amount Ratio Amount Ratio Domestic sales (Note) - - - - Europe 6,618,480 38.46 5,336,584 39.49 The 7,594,957 44.14 4,636,315 34.31 Exports Americas Asia 2,599,266 15.10 3,264,893 24.16 Other 395,334 2.30 276,743 2.04 Total 17,208,037 100.00 13,514,535 100.00 Note: “Domestic sales” refers to sales in Taiwan.

2. Market share With its professional technical competence and years of industry experience, combined with innovative elements and materials, the Company continues to provide brand clients with high-quality footwear products, innovative services, and solutions, and continues to be a long- term partner of international brands. The Company sells approx. 40 – 43 million pairs of shoes each year, the bulk of which being soccer shoes—the Company sold approximately 20,949 thousand pairs of soccer shoes in 2019. According to the research organization QYReserch, the global soccer shoe market in 2019 amounted to approximately 99,616 thousand pairs; and the Company and its subsidiaries accounted for about 21.03% of that market.

3. The market's future supply, demand status, and growth The center of global shoe manufacturing moves by its own laws. Early shoe manufacturing centers were in Italy and Spain; in 1991, they moved to Japan, Taiwan, South Korea, and other places where manufacturing costs were relatively low; and in 2001, they moved to such lower-cost areas as Guangdong and Wenzhou; at present, the center has moved to Southeast Asian countries like Vietnam and Malaysia. According to 2018 research by the Asia Footwear Association, global footwear production is mainly concentrated in Asia, where footwear production accounts for 86.8% of the global total. With the development of China's economy and rising labor costs, the shoe industry has tended to move to countries with cheaper labor, such as Vietnam, India, and Pakistan.

Source: Asia Footwear Association; Forward Business and Intelligence Co., Ltd. (2018)

Source: Statista

Footwear is a consumer staple. With the growth of population, increases in disposable income, the rise of health awareness and prevalence of exercise and athletics, consumer demand for sports shoes continues to increase. In addition to continuing to add to the functionality of sports shoes, major sports brands also continue to innovate and diversify their products to expand target markets of sports shoes to non-sports groups. The sports shoe market is expected to maintain steady growth going forward. According to Statista, revenue of the footwear market in 2019 was US$439,022 million. Affected by the COVID-19 pandemic, footwear market revenue has been estimated at US$432,108 million in 2020. Nevertheless, it is forecast to generate US$564,994 million by 2025, with the overall footwear market expected to grow at an annual rate of 5.5% (compound annual growth rate for 2020-2025). 4. Competitive niche (1). Professional management team The Company has been in the shoe industry for 20 years, and its management team has long been immersed in the industry. It has extensive professional knowledge and ample practical experience. Through its clear organizational structure and keen market observation, its management has efficiently integrated the resources of each department, from product development, manufacturing, and production to sales, and operations can be implemented step by step according to plan. The exceptional tacit understanding and business philosophy of the management team form the core value of the Company; its accumulated professional services and technical capabilities have made the Company an indispensable important partner for clients, thereby creating a competitive niche for the Company in the industry. (2). Stable quality that accords with international brand standards The Company is committed to becoming a world-class professional manufacturer of sporting goods. It insists on product quality inspection and testing to enhance its competitiveness. The Company supplies OEM services for clients, who are all outstanding international sports and outdoor recreation brands. Its market share and R&D technology are second to none, giving the footwear products manufactured by the

Company a competitive edge and high growth momentum in the sports and outdoor footwear market, thereby enhancing the Company's advantages in the OEM footwear industry. (3). Possess R&D capabilities moving towards automation In the past, the Company invested a large amount of annual R&D resources in material research and development and process improvements. R&D projects include the development and application of new shoe materials and the introduction and improvement of manufacturing technology. At present, it has developed direct injection technology and expects to establish SGP in Portugal to focus on automated production processes. In addition, it promotes the collection of production data through the Real Time System, and improves the stability, speed, and flexibility of production through big data analysis applications and cloud computing. Continue to invest in automation, innovative technology, process improvement, and development of shoe materials to meet brand client needs for high-quality products and services and quick market response. In this way, the Company will deepen cooperation with brand clients, increase mutual business dependence, and solidify the Company’s status in the shoe industry. (4). Multi-country production advantage The Company actively expands its overseas production units. Its main production force is located in Southeast Asia, and currently, it has four production plants and one processing plant in Vietnam and one production plant in Cambodia, which are cost competitive when compared to China’s high labor costs. In addition, under EU tariff regulations, under- developed countries can enjoy tariff-free, duty-free benefits for goods other than military items (Everything But Arms, EBA) exported to the EU; Cambodia can enjoy this benefit. The European Commission (EC) officially announced on June 30, 2020, that the EU–Vietnam Free Trade Agreement (EVFTA) will take effect on August 1, 2020. After the agreement comes into effect, import tariffs on 65% of EU products exported to Vietnam will be abolished, and tariffs on other products will be gradually eliminated in the next 10 years; tariffs on 71% of Vietnam’s products exported to Europe will also be abolished immediately after EU– Vietnam Free Trade Agreement (EVFTA) takes effect. Other product tariffs will be gradually abolished over the next 7 years. The EVFTA, with its various broad-reaching commitments, is expected to help promote Vietnam-Europe bilateral investment and economic relations, and at the

same time accelerate the integration of Vietnam into the international economy, which is conducive to Vietnam's innovation and modernization. In addition, in view of increasing global economic uncertainty, it is actively expanding its plants in Indonesia to effectively diversify political and economic risks in various regions. 5. Favorable and unfavorable factors of the Company's vision of development and their response measures (1). Favorable factors A. Global sports trends are on the incline, and market demand is growing steadily In recent years, with the improvement of living standards, consumption patterns and ideas have also changed over time. More and more people are beginning to pay attention to physical and mental health activities, such as sports and “back to nature” tourism. The increase in global sports awareness has led to the expansion of the global sports industry market; public demand for fitness and entertainment, competitive sports, and sporting goods are becoming ever more popular. According to Statista, the overall footwear market is forecast to generate US$564,994 million by 2025, of which sports shoes will account for 30.50%. It is expected that the sports and casual footwear market can grow in the future. B. Sports events stimulate consumption Ever since the beginning of the 20th century, there has been a wave of global sports. With frequent large-scale international sports events such as the Olympics and FIFA World Cup, professional sports have developed to high levels of sophistication and sports health concepts have grown ever more ubiquitous, leading to the rapid growth of the global sports consumer market. The Company's main products are divided into sports shoes, casual shoes, balls, and other. Its sports shoes account for about 70% of revenue, and sports shoes are primarily soccer shoes, accounting for about 50% of the revenue. The annual GDP of the soccer industry has reached US$500 billion, surpassing the national GDPs of Switzerland, Belgium and other countries and regions. It is known as the “17th largest economy in the world.” Therefore, soccer is the sport with the world’s highest production value, the widest audience, and the most influence, and it has the largest single events in the sports industry—the FIFA World Cup, which is held every

four years, the annual UEFA Champions League (UCL), as well as the English Premier League, Spanish LaLiga, Italian Serie A, German Bundesliga, French Ligue 1, and others, all with massive audiences. Popular events and players' demand for soccer equipment drive the development of soccer, which in turn is beneficial to the soccer shoe industry. C. The Company provides customer-specific services, and most of its clients are internationally known brands According to the data from Sporting Goods Intelligence and the Forward Business and Intelligence, the top five sports shoe brand companies (Nike, Adidas, VF Corp., Asics, and New Balance) in the global sports shoe market in 2019 have a global market share of more than 76%, among which sports shoes revenue from Nike and Adidas accounted for 23% and 16%, respectively. The two giants Nike and Adidas are in an absolute leading position. The Company mainly manufactures for international brands such as Group A, Group B, Group C and Group D. It can serve multiple international brands simultaneously, and can provide brand clients with diversified high- quality products, from mass production to customized and diversified production. Its flexible production methods can meet the specific needs of brand clients. In addition, the Company has actively set up exclusive R&D teams and development centers for major brand clients. From product development to product prototypes, we work closely with brand clients. With our professional technical competence and years of industry experience, the Company was bestowed with the CORE Innovation Cup award from Group A clients and the Process Innovation award from Group B clients in 2019. (2). Unfavorable factors A. Strict environmental standards With the rising awareness of environmental protection, both governments and foreign institutions have gradually raised the threshold for environmental protection in laws and regulations. Solvents and volatile gases used in the shoe-making process can harm human health. The synthetic rubber used to make shoe soles does not easily decompose naturally. Discarding of these materials carelessly causes considerable impact on the environment. In order to cope with the development of trends and comply with laws and regulations, funds must be actively invested, pollution prevention equipment and

personnel education and training must be expanded, and effective strategies for reducing the effects of environmental pollution must be formulated, all to ensure that employees can work in a safe and sound environment, and to make the surrounding environment pollution-free. Countermeasures: In response to the issue of sustainable environmental development, each plant has a social responsibility department responsible for handling plant-side environmental safety and health, socio- environmental affairs, energy and greenhouse gas management, and other matters; the department stays up-to-date on the environmental protection regulatory requirements on the market, and endeavors to understand future shoe production trends; it procures and updates pollution prevention equipment, promotes waste reduction plans, and develops new manufacturing processes, so that its product technologies meet environmental protection regulations and client demand. B. Labor and manpower costs continue to rise The industry in which the Company works is labor-intensive, requiring a significant amount of human resources in the production process. In recent years, labor wages have increased, resulting in a substantial increase in production costs; and labor awareness in production bases in Vietnam and Cambodia has gradually increased. Due to the China-US trade war, manufacturing industries that have established plants in China are preparing to move to other areas. Vietnam has become the first choice because of its young human capital and competitive wages. This has resulted in the tightening of labor supply in Vietnam and continuous increase in labor costs related to basic yearly salary, employee benefits, and pensions, causing companies to face the pressures of rising costs and shrinking revenue growth and profitability. Countermeasures: The Company actively expands its overseas production units. In addition to production plants in Vietnam and Cambodia, it also plans to add production bases in Indonesia and Myanmar to diversify labor costs throughout various regions. In addition, the Company continues to promote supply chain integration and various production capacity optimization measures to continue to improve its manufacturing processes and strengthen its plant automation process capabilities, while flexibly adjusting its capacity allocation and production mode to

continuously improve overall production efficiency. Continuous improvements through the optimization of production line staff will improve production efficiency and reduce production costs. C. Footwear products are consumed quickly With the expansion of the sporting goods market, competition among various manufacturers has become increasingly heated. Internationally renowned manufacturers need to continue to introduce new products to cater to the changing preferences of consumers. Thus, each brand has shifted to a customer value-oriented mindset. For one single brand, there may be hundreds or even thousands of shoe models. If a manufacturer cannot respond to market changes immediately and launch new products, or does not have strong R&D capabilities to launch popular products, it will most likely be eliminated by the market. Countermeasures: The Company actively sets up exclusive R&D teams and development centers for its major brand clients. From product development to product prototypes, we work closely with brand clients. With professional technical competence and years of industry experience, combined with innovative elements and materials, the Company continues to provide brand clients with high-quality footwear products, innovative services, and comprehensive solutions, with the aim of becoming a long-term partner of international brands. It also evaluates increasing the number of OEM brands and shoe types, focusing on high-end and high-value-added shoes. For internationally renowned brands, it strengthens and maintains customer brand relationships to conserve while also increasing market share in footwear OEMs and reducing risk from significant impact that a single upstream brand will have on the Company's operations. (II) Important applications and production process of main products 1. Important applications of main products

Main Applications products Sports shoes Mainly suitable for sports activities such as soccer, baseball, and jogging Casual Does not require the elasticity, support, shock absorption, and durability footwear for sports activities Balls Ball products are mainly rugby balls, soccer balls, and volleyballs, with soccer balls accounting for the bulk

2. Production process of main products

(III) Supply status of main raw materials

Main raw materials Main suppliers Supply status Artificial leather Group A Good Outsole Group B, Group C, Group D, Group E Good Packaging M Group, N Company Good Textiles H Group, I Group, E Group, J Group Good Glue L Group, N Company Good (IV) List of main procurement and sales clients 1. The names of suppliers that accounted for more than 10% of the total purchases in any of the last two years, their procurement amounts and proportions, and the reasons for changes Unit: Thousand NT$ 2019 2020 Percentage of Percentage of Relationshi Relationsh annual net annual net Item Name Amount p with the Name Amount ip with the purchases purchases issuer issuer (%) (%) 1 Group A 784,668 10.68 None Group A 394,934 7.55 None Other 6,562,279 89.32 None Other 4,836,425 92.45 None Net Net 7,346,947 100.00 5,231,359 100.00 purchases purchases Description of changes: The business of the Company's major customers is stable; its main raw materials are supplied by more than two suppliers; and a good cooperative relationship has been maintained. There have been no major changes in major suppliers in the last two years, and no major changes in amounts. 2. The names of customers who have accounted for more than 10% of total sales in any of the last two years, their sales amount and proportion, and the reasons for increase or decrease Unit: Thousand NT$

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2019 2020 Percentage Percentage of total Relationshi of total Relationship Item Name Amount annual net p with the Name Amount annual net with the sales issuer sales issuer (%) (%) 1 Group A 9,101,762 52.89 None Group A 7,888,699 58.37 None 2 Group B 5,106,173 29.67 None Group B 3,849,477 28.48 None Other 3,000,102 17.44 None Other 1,776,359 13.15 None Net sales 17,208,037 100.00 Net sales 13,514,535 100.00 Description of changes: The Company's main sales targets are primarily internationally renowned brand manufacturers. Its two major customers have not changed significantly in the last two years, and their amounts have not significantly changed, indicating that the Company has maintained a stable cooperative relationship with its major customers. (V) Production value table for the most recent two years

Unit: Thousand pairs of shoes; Thousand balls; Thousand NT$ Year 2019 2020

Production Production Output Production Output value Yield Yield capacity value capacity value

Major products Sports shoes 28,511 28,072 10,850,656 19,985 16,503 7,491,923 Casual footwear 15,417 15,180 4,094,837 18,781 16,246 5,357,955 Balls 4,800 3,162 405,983 2,800 1,137 154,822 Other - - 259,078 - - 583,266 Total - - 15,610,554 - - 13,587,966 Description of changes: In 2020, due to the impact of the COVID-19 pandemic, brand clients have reduced orders due to the conservative market outlook. The Company has reduced production in response to the decrease in orders.

(VI) Sales volume value table for the most recent two years Unit: Thousand NT$ Year 2019 2020

Domestic sales Exports Domestic sales Exports

Quantity and value of sales Quantity Value Quantity Value Quantity Value Quantity Value

Main merchandise (or sector) 26,618 16,759 Sports shoes - - thousand 11,924,106 - - thousand 7,726,189 pairs pairs 14,394 16,312 Casual footwear - - thousand 4,549,616 - - thousand 5,478,316 pairs pairs

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3,379 1,317 Balls - - thousand 455,520 - - thousand 177,599 balls balls Other - - - 278,795 - - - 132,431 Total - - - 17,208,037 - - - 13,514,535 Description of changes: In 2020, due to the impact of the COVID-19 pandemic, brand clients have reduced orders due to the conservative market outlook, resulting in a decline in sales volume and amounts. III. Number of employees Number of employees in the most recent two years and up to the printing date of the annual report Unit: People Year 2019 2020 February 26, 2021 Manager 17 17 17 Number of General staff 37,243 30,038 29,983 employees Total 37,260 30,055 30,000 Average age 32.75 36.23 32.93 Average years of service 3.10 3.23 3.04 PhD - - - Master's 0.12 0.16 0.15 degree Education Undergraduate distribution ratio or technical 4.96 5.91 5.79 (%) degree High school 19.66 15.01 14.67 diploma Below high 75.26 78.92 79.39 school

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IV. Environmental protection expenditure information (I) For those who are required to apply for a pollution facility installation permit or pollution discharge permit, or pay pollution prevention and control fees, or set up a dedicated unit of environmental protection personnel in accordance with laws and regulations, an explanation of their application, payment, or establishment: The Company’s Vietnamese subsidiaries Chi Hung, Can Sports Vietnam, All Wells, Dai Hoa Vietnam, and August Sports Vietnam have respectively obtained sewage installation permits, sewage discharge licenses, waste discharge permits, or have appointed qualified third-party professional organizations for cleaning and transportation of waste, and have set up a dedicated unit of environmental protection personnel, and have paid sewage discharge environmental protection fees on schedule. In addition, Cambodian subsidiary Can Sports Cambodia has obtained a waste water permit, a solid waste permit, a sludge permit, a hazardous liquid waste permit, and a hazardous solid waste permit, and has established a dedicated unit of environmental protection personnel, and has paid the sewage discharge environmental maintenance fee as scheduled. (II) List the Company's investments in major pollution prevention equipment, its applications, and possible benefits:

December 31, 2020; Unit: Thousand NT$ Un- Equipment Cost of Applications and Quantity Date acquired discounted name investment expected benefits balance Wastewater Industrial treatment 5 2011/11~2020/5 12,316 5,651 wastewater/sewage equipment and treatment systems Wastewater Industrial treatment 1 2020/5/31 1,314 1,172 wastewater/sewage equipment and treatment systems (III) In the last two years and up to the publication date of the annual report, the Company's process of improving environmental pollution; if it has had a pollution-related dispute, it should also explain the handling process: No such situation. (IV) Explain the losses suffered by the Company due to environmental pollution in

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the last two years and up to the publication date of the annual report (including compensation and environmental protection audit results that have found violations of environmental protection laws or regulations, the date of disciplinary action, the name of the disciplinary action, the violation of laws or regulations, the content of violations, and the disciplinary action should be listed), and disclose the estimated amount and corresponding measures that may occur at present and in the future. If it cannot be reasonably estimated, the fact that it cannot be reasonably estimated must be explained Factory Deficiencies Improvements types Chi Hung The Binh Duong Provincial The wastewater of the Chi Government took a sample of the Hung office area was not wastewater from the sewage treated because the drainage discharge channel in the Chi pipelines did not pass through Hung office area and the waste wastewater treatment samples processed by the equipment, and the water wastewater treatment system on quality was not up to the 2019/08/13. After testing, it was standards due to it being found that the content of nitrogen directly discharged into the and ammonia exceeded stormwater drain. Chi Hung standards. The competent has immediately improved authority issued a the pipelines and paid the fine 3673/QDXPVPHC fine of VND 975,000 on notification, and a fine of VND 2019/12/26. At present, the 975,000 was imposed on wastewater in the December 9, 2019. administrative area is now being treated by wastewater treatment equipment before being discharged. The Company has actively cooperated for improvements of the aforementioned deficiencies, and there have been no losses that cannot be reasonably estimated; such losses should have no significant impact on the finances or business of the Company or its subsidiaries. (V) The current pollution situation and the impact of improvement on the Company's earnings, competitive position, and capital expenditures, and expected major environmental capital expenditures in the next two years The Company and its subsidiaries do not have any major environmental capital expenditure plans for the next two years. Each of its subsidiaries has responded

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to the competent authorities for the improvement of the current pollution situation. All relevant environmental pollution cases have been rectified in accordance with the requirements of the competent authorities. The Company's earnings, competitive position, and capital expenditures were not significantly impacted. V. Employer-employee Relations (I) List the Company's various employee welfare measures, continuing studies, training, retirement systems, and implementation status, as well as the agreements between labor and management and various employee rights protection measures 1. Employee welfare measures In addition to fixed salaries and annual holiday gifts, the Company and its subsidiaries pay production bonuses based on monthly production status and personal performance. In addition, there are also childbirth allowances for employees and child education subsidies for employees to encourage employees to make long-term contributions and grow together with the Company, as well as to improve personal performance and talent retention. The plants have set up labor unions in accordance with local laws and regulations, and organize various employee benefits. Gifts are given to employees for important holidays (Spring Festival, Dragon Boat Festival, and Mid-Autumn Festival), and birthday gifts are provided to colleagues on their birthdays. There are also various activities, group activities or dinners held from time to time, travel subsidies, wedding and funeral subsidies, as well as emergency relief and other welfare measures. 2. Continuing studies and training of employees The goal of training and development of the Company and its subsidiaries is to continuously improve the quality of human resources and their work skills, so as to create higher corporate value and achieve operational goals and future development. In order to achieve this goal, and in response to the rapid growth of the scale of operations, the Company and its subsidiaries have established a complete education and training structure in conjunction with the functional system, planning appropriate training for new recruits, professional training, management training at all levels, environmental safety and health training, and corporate culture courses to strengthen employees’ comprehensive training and continuing education channels, and enhance employees’ professional capabilities and core competitiveness through courses taught in physical classrooms. In addition to professional training, the Company and its subsidiaries

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coordinate with employee career planning to arrange job rotations, encourage employees to learn and educate themselves in various ways, and strive to improve the overall quality of employees, as well as improve talent cultivation and development. 3. Retirement plan The Company and its subsidiaries have established retirement management measures in accordance with the Labor Standards Act and Labor Pension Act to help stabilize the life of employees after their retirement. The Company and its subsidiaries, in accordance with local government labor law, withdraw amounts according to the new labor pension system to the employee's individual retirement account on a monthly basis. After the employee meets the retirement conditions in accordance with the law, the Company helps the employee to apply for retirement pension from the government. 4. Employer-employee agreements The labor policy of the Company and its subsidiaries adhere to the principle of honest communication, and at the same time, through the following actions, create a beneficial situation for both the Company and its employees. (1). Abide by the labor laws and relevant laws and regulations, so that employees can are given the maximum protection. (2). Employee communication channels are open and diverse, and opinions can be fully expressed and given proper response. (3). If there are operating situations and major measures of the Company and its subsidiaries, they are fully publicized in advance, so that employees can clearly understand them and so that they can obtain full support and cooperation. (II) In the last two years and up to the publication date of the annual report, whether the Company has suffered losses due to labor disputes (including labor inspection results that have found violations of the Labor Standards Act, the date of disciplinary action, the name of the disciplinary action, the violation of laws or regulations, the content of violations, and the disciplinary action should be listed); also, disclose the estimated amounts and corresponding measures that may occur at present and in the future. If it cannot be reasonably estimated, the fact that it cannot be reasonably estimated must be explained: Factory types Deficiencies Improvements Samoa Sports The job seeker Wang ○○ The Taichung District

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Factory types Deficiencies Improvements Gear (Taiwan (hereinafter referred to as Court in Taiwan Branch) “Employee Wang”) in a civil dismissed the complaint on December 18, 2019 plaintiff’s lawsuit and (2020-Bu-Zi No. 131) claimed that claim, and Samoa Samoa Sports Gear Taiwan Branch Sports Gear Taiwan unilaterally changed the content of Branch did not incur the labor contract after the two losses, nor was it parties had already agreed to ruled against. establish an employment relationship. Employee Wang refused to perform the labor obligations and requested that the Company pay NT$379,710. The Taichung District Court in Taiwan dismissed the plaintiff’s lawsuit and claim on December 11, 2020, and the plaintiff’s litigation costs were borne by the plaintiff. Chi Hung The resigned employee Xiong ○ Chi Hung paid the ○ (hereinafter referred to as employee VND “Employee Xiong”) was punished 113,546 thousand on for violating the Company’s October 11, 2019 in disciplinary requirements and his accordance with the labor contract was terminated in court's judgment. 2015. He held that Chi Hung had illegally terminated the labor contract and requested the Company to pay salaries after said termination. From 2016 to 2018, Employee Xiong did not response to the court’s summons. Chi Hung held that the Company's management rules as cited by Employee Xiong had been reviewed by the Vietnamese government and complied with procedural norms. Binh Duong

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Factory types Deficiencies Improvements Provincial People's Court ruled on September 17, 2019 that Chi Hung only needed to pay VND 113,546 thousand in unpaid salary before Employee Xiong had left his job in October 2015, and dismissed the remaining claims of the plaintiff. Chi Hung Due to the decrease in orders as a The reason for the result of the COVID-19 pandemic, strike was the feeling Chi Hung was approved by the local competent authority, the of instability among Illegal Conduct and Social Affairs employees under the Department of the Binh Duong influence of the Ministry of Labor for four possible proposed policies (including (1) COVID-19 employees being scheduled to take pandemic, and was special leave in 2020 in response not caused by a to work reductions, (2) after the employees’ special leave is used violation of local up, if the order volume does not labor laws. The strike return to normal levels, Chi Hung ended within five will initiate the work suspension days and did not system in accordance with the law, but will still pay the local cause significant minimum wage, (3) suspend labor adverse effects. The contracts with the employees, and Company did not (4) unilateral termination of the labor contracts). Chi Hung had incur any additional originally notified some losses as a result of employees that the Company this incident; and to would adopt policy (2), but did not mention the individual rights and reduce labor costs, interests of employees, resulting in the Company actively the incomplete information controls the received by the employee and scheduling of causing them to misunderstand that the Company will adopt production line policy (3) (i.e., suspension of labor personnel and contracts with employees). endeavors to obtain Therefore, an illegal strike began on May 26, 2020. As of May 29, the employees’ 2020, approximately 8,000 understanding and employees have participated in the consideration for the strike. After the Company communicated with the employees impact of the

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Factory types Deficiencies Improvements for several days, the strike ended COVID-19 on May 30, 2020. pandemic. It was The Company has subsequently negotiated and communicated with decided to suspend the labor union on several labor contracts occasions, and, following the through discussion instructions of the government department, has reached a with production line consensus with the labor union. (a) employees, and only From July 1, 2020, the Company the basic salary will will arrange production orders according to the situation, and in be paid to employees accordance with the official as long as plant document 1064/LĐTBXH- production capacity QHLĐTL issued by the has not returned to government on March 25, 2020, "Guidance on Suspension of Work normal levels. and Salary Payment Practices in Factories in Response to the COVID-19 Pandemic." VND 4,420,000 (approximately NT$5,667) will be taken as the salary calculation basis (minimum monthly salary) for suspension leave; (b) If the Company needs to reduce production due to lack of orders, it will unilaterally terminate labor contracts with some employees in accordance with Article 38(c) of the Labor Code of 2012, Article 12(a) of No. 05/2015/NĐ-CP issued by the government, and official document 1716/SLĐTBXH-CSLĐ issued by the Binh Duong Ministry of Labor on May 22, 2020. All Wells Resigned employee Wu ○○ Employer-employee (hereinafter referred to as representatives “Employee Wu”) claimed in a reached a settlement. petition to the People’s Court on Management paid December 24, 2018 that All Wells VND 313,175 had illegally terminated the labor thousand, and labor contract, so Employee Wu withdrew the petition requested that the termination of on March 14, 2019. the labor contract be revoked, that

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Factory types Deficiencies Improvements he return to work, and that salary after the termination of the labor contract be paid. Employer and employees established mediation in March 2019. All Wells paid VND 313,175 thousand (approximately NT$416 thousand) on March 13, 2019, and Employee Wu withdrew the petition on March 14, 2019. Can Sports In the most recent two years and Can Sports Cambodia Cambodia up to the printing date of the appreciates its prospectus, the various unions to employees, conforms which Can Sports Cambodia to local conditions, employees belonged have lodged a respects the results of total of seven labor arbitrations labor arbitration with the Cambodian Arbitration judgments, and Council . Arbitration included continues to negotiate having a single employee being with the union. required to only operate a single piece of machinery, appropriate union dues, set up specific entrances and exits for pregnant and disabled employees, and increase the frequency of salary payments to once a week. In order to avoid the recurrence of the above situation, the Company has requested that its subsidiaries strictly abide by the local laws and regulations when handling the termination of labor contracts, and requires the Company's internal disciplinary and disciplinary procedures to be formulated and implemented in accordance with local laws and regulations; it requires that the subsidiaries follow local labor laws and regulations, hold employer-employee meetings regularly in accordance with the law, draw up employer-employee agreements, notify the local labor authorities of such agreements, and conduct business in accordance with employer-employee agreements; it also requires subsidiaries to comply with local laws and procedural regulations where there are policies that entail changes in labor rights and clearly announce them to

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employees, and ensure that if there is a need to stop work due to the pandemic or other force majeure, the salary or working conditions of the affected employees shall also be handled in accordance with local laws and regulations, and agreement should be reached with the employees. VI. Important Contracts Commencement Contract type Parties date/expiration Main items covered Restriction clauses date 1. Confidential information must not be disclosed or used by third parties Manufacturing and Manufacturing 2008/10/1- 2. Information on the Group A supplying branded Agreement present client’s technical products secrets shall not be used for other purposes or leaked to any third party 1. Confidential information must not be disclosed or used by third parties Manufacturing and Supply 2. Information on the Group B 2017/9/8-present supplying branded Agreement client’s technical products secrets shall not be used for other purposes or leaked to any third party 1. Confidential information must not be disclosed or used by third parties Manufacturing and Manufacturing 2. Information on the E Group 2017/7/6-present supplying branded Agreement client’s technical products secrets shall not be used for other purposes or leaked to any third party 1. Confidential information must not be disclosed or used by third parties Manufacturing Manufacturing and 2. Information on the and Supply Group D 2017/8/2-present supplying branded client’s technical Agreement products secrets shall not be used for other purposes or leaked to any third party

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Commencement Contract type Parties date/expiration Main items covered Restriction clauses date 1. Confidential information must not be disclosed or used by third parties Manufacturing and Manufacturing 2018/11/1- 2. Information on the C Group supplying branded Agreement present client’s technical products secrets shall not be used for other purposes or leaked to any third party 1. Confidential information must not be disclosed or used by third parties Manufacturing and Manufacturing Beginning on 2. Information on the Company F supplying branded Agreement 2017/9/1 client’s technical products secrets shall not be used for other purposes or leaked to any third party 1. Confidential information must not be disclosed or used by third parties Manufacturing and Manufacturing Beginning on 2. Information on the G Group supplying branded Agreement 2018/9/1 client’s technical products secrets shall not be used for other purposes or leaked to any third party Taichung Branch, Mega Loan 2020/8/22- Short-term borrowing International Commercial - agreement 2021/8/21 TWD400,000,000 Bank Loan E. SUN BANK, 2020/7/28- Short-term borrowing - agreement Taichung Branch 2021/7/28 TWD390,000,000 Loan Taipei Fubon Bank, 2020/11/23- Short-term borrowing - agreement Fengyuan Branch 2021/10/22 USD8,000,000 Issued a negative pledge promising that Sports Gear Loan E. SUN BANK, Hong 2020/8/12- Short-term borrowing (Myanmar)’s land and agreement Kong Branch 2021/8/4 USD18,000,000 plant may not be mortgaged to a third party Taichung Branch, Mega Medium and long-term Loan 2017/7/18- International Commercial borrowing - agreement 2025/7/9 Bank USD4,000,000 Taichung Branch, Mega Medium and long-term Loan 2017/7/18- International Commercial borrowing - agreement 2026/4/1 Bank USD4,000,000 Medium and long-term Loan E. SUN BANK, 2018/11/27- borrowing - agreement Taichung Branch 2021/12/20 TWD341,000,000 Ho Chi Minh Branch, Loan 2020/6/12- Short-term borrowing Mega International - agreement 2021/6/11 USD5,000,000 Commercial Bank

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Commencement Contract type Parties date/expiration Main items covered Restriction clauses date Ho Chi Minh Branch, Medium and long-term Loan 2016/9/9- Mega International borrowing - agreement 2023/9/8 Commercial Bank USD10,000,000 Loan Taipei Fubon Bank, Ho 2020/12/1- Short-term borrowing - agreement Chi Minh Branch 2021/10/22 USD3,500,000 Medium and long-term Loan Taipei Fubon Bank, Ho 2017/11/22- borrowing - agreement Chi Minh Branch 2022/11/21 USD1,000,000 Medium and long-term Loan Taipei Fubon Bank OBU 2016/8/3- borrowing - agreement Branch 2023/8/2 USD3,000,000 Taipei Fubon Bank, Ho Medium and long-term Loan 2016/11/3- Chi Minh Branch & borrowing - agreement 2021/11/2 Hanoi Branch USD10,000,000 Loan 2020/5/15- Short-term borrowing Vietcombank - agreement 2021/5/15 VND250,000,000,000 Loan Taipei Fubon Bank, Binh 2020/11/30- Short-term borrowing - agreement Duong Branch 2021/10/22 USD4,500,000 Loan E. SUN BANK, Dong 2020/7/28- Short-term borrowing - agreement Nai Branch 2021/7/27 USD6,000,000 Medium and long-term Loan E. SUN BANK, Dong 2017/7/1- borrowing - agreement Nai Branch 2022/8/10 USD3,000,000 Forward E. SUN BANK, 2020/12/18- Forward exchange exchange - Taichung Branch 2021/10/28 USD1,000,000 contract Forward Taichung Branch, Mega 2020/12/25- Forward exchange exchange International Commercial - 2021/12/24 USD3,625,000 contract Bank Lease 2020/10/1- Samoa Sports Gear Spread Idea Co., Ltd. - agreement 2023/9/30 Taiwan Branch Office Lease Binh Duong Provincial 2000/8/31- Chi Hung's land use - agreement Government 2050/8/31 rights Ministry of Natural Lease 2000/8/31- Chi Hung's land use Resources and - agreement 2050/8/31 rights Environment Lease Binh Duong Provincial 2000/8/31- Chi Hung's land use - agreement People's Committee 2050/8/31 rights Binh Duong Province Lease Ministry of Natural 2015/1/13- Chi Hung's land use - agreement Resources and 2050/8/31 rights Environment Ba Ria Vung Tau Lease 2005/1/28- All Wells's land use Province People's - agreement 2055/1/28 rights Committee Lease 2014/11/1- Can Sports Cambodia's Much More Co.,Ltd. - agreement 2039/10/31 land use rights Lease TAING SRY UY and 2019/1/1- Can Sports Cambodia's - agreement Chen Wei Chia 2025/12/31 land and plant Lease TAING SRY UY and 2019/6/1- Can Sports Cambodia’s - agreement Chen Wei Chia 2033/5/31 plant Lease 2019/6/1- Can Sports Cambodia TAING SRY UY - agreement 2033/5/31 Office

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Commencement Contract type Parties date/expiration Main items covered Restriction clauses date Can Sports Vietnam Lease Tây Ninh Province 2011/4/15- Xining plant’s land use - agreement People's Committee 2061/4/15 rights Can Sports Vietnam Lease Tây Ninh Province 2016/1/07- Xining plant’s land use - agreement People's Committee 2061/4/15 rights Can Sports Vietnam Lease Tây Ninh Province 2019/3/5- Xining plant’s land use - agreement People's Committee 2061/4/15 rights Lease 2018/1/1- Can Sports Vietnam LUC DUNG Co., Ltd. - agreement 2027/12/31 Janpeng Factory Lease 2018/1/2- Dai Hoa Vietnam’s Vietnam Ya Hu, LLC - agreement 2033/1/1 plant Lease Tnhh High Point 2018/1/2- Dai Hoa Vietnam’s - agreement Furniture Global (VN) 2033/1/1 plant Lease Tnhh High Point 2016/1/1- Dai Hoa Vietnam’s - agreement Furniture Global (VN) 2030/12/31 plant Lease Tnhh High Point 2019/1/1- Dai Hoa Vietnam’s - agreement Furniture Global (VN) 2033/12/31 plant Tianna Industrial Park August Sports Development Union Co., 2018/1/1- Lease contract Vietnam's land use - Ltd., Bien Hoa City, 2053/6/10 rights Dong Nai Province Lease 2016/1/15- Land on which Fireman Much More Co., Ltd. - agreement 2041/1/14 expects to build a plant Land on which Sports Lease Myanmar Japan Thilawa 2017/2/10- Gear (Myanmar) - agreement Development Ltd. 2067/2/9 expects to build a plant 2020/12/1- PT Can Sports Lease 2021/11/30 HENRI GUNAWAN Industrial Indonesia - agreement (Short-term Office lease)

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F. Financial overview I. Condensed financial information for the most recent five years (I) Condensed profit and loss statement and statement of comprehensive income 1. Concise Consolidated Balance Sheet-International Financial Reporting Standards

Unit: Thousand NT$ Year Financial information for the most recent five years (Note 1)

2017 2018 2019 2020 Item Current assets 9,561,548 11,119,813 11,442,911 10,538,173 Property, plant, and 3,495,713 3,995,819 4,134,722 3,686,510 equipment Right-of-use asset - - 1,923,757 1,768,029 Intangible assets 11,257 24,831 27,060 12,652 Other assets 354,740 748,961 331,650 289,503 Total assets 13,423,258 15,889,424 17,860,100 16,294,867 Before 3,299,231 3,909,361 4,339,103 3,777,034 Current distribution liabilities After 3,473,492 4,606,403 4,687,625 (Note 3) distribution Non-current liabilities 630,296 1,021,722 2,368,133 1,735,825 Before 3,929,527 4,931,083 6,707,236 5,512,859 distribution Total liabilities After 4,103,788 5,628,125 7,055,758 (Note 3) distribution Equity attributable to parent 9,492,242 10,958,341 11,152,864 10,782,008 company shareholders Share capital 5,216,060 1,742,606 1,742,606 1,742,606 (Note 2) Before 4,368,742 7,667,935 7,667,935 7,493,674 Capital distribution surplus After 4,194,481 7,667,935 7,493,674 (Note 3) distribution Retained Before 99,902 1,509,128 1,860,672 2,095,518 earnings distribution

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(not yet made After 99,902 812,086 1,686,411 (Note 3) up for losses) distribution Other rights (192,462) 38,672 (118,349) (549,790) Treasury stock - - - - Non-controlling interests 1,489 - - - Before 9,493,731 10,958,341 11,152,864 10,782,008 Equity distribution Total After 9,319,470 10,261,299 10,804,342 (Note 3) distribution Note: Consolidated financial statements for 2017–2020 verified by an accountant. Note 1: The Company is a foreign issuing company, and thus, according to regulations, it may only present consolidated financial statements that have been verified and certified by accountants for the most recent three years. Note 2: On December 24, 2018, the shareholders' meeting of the Company resolved to change the face value of common shares from US$1 to NT$10 per share. Note 3: On March 12, 2021, the Company's Board of Directors resolved to distribute a cash dividend of NT$1.6875 per share and a cash dividend of NT$1.6875 per share with capital surplus (proposals relating to dividend distribution are expected to be approved for distribution by the resolution of the shareholders' meeting on June 11, 2021).

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2. Condensed Consolidated Statement of Comprehensive Income-International Financial Reporting Standards (IFRS)

Unit: Except for EPS, which is in NT$, the rest is in thousand NT$ Financial information for the most recent five years Year (Note 1) Item 2017 2018 2019 2020 Operating revenue 16,017,946 17,318,360 17,208,037 13,514,535 Gross profit 4,059,372 3,822,174 3,705,062 2,509,509 Operating profit and loss 2,561,456 1,919,568 1,609,061 789,718 Non-operating revenue 24,697 (33,865) (154,558) (208,031) and expenses Net profit (loss) before 2,586,153 1,885,703 1,454,503 581,687 tax Net profit (loss) from 2,416,520 1,409,226 1,048,586 409,107 continuing operations Loss from discontinued - - - - operations Net profit (loss) for the 2,416,520 1,409,226 1,048,586 409,107 period Other comprehensive income/losses for the (626,214) 231,134 (157,021) (431,441) current period (net, after- tax) Total comprehensive income for the current 1,790,306 1,640,360 891,565 (22,334) period Net profit (loss) attributable to parent 2,279,518 1,409,226 1,048,586 409,107 company Net profit (loss) attributable to non- 137,002 - - - controlling interests Total comprehensive profit and loss attributable 1,652,279 1,640,360 891,565 (22,334) to the operators of the parent company

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Total comprehensive profit and loss attributable 138,027 - - - to non-controlling interests Earnings per share 12.37 8.09 6.02 2.35 Note: Consolidated financial statements for 2017–2020 verified by an accountant. Note 1: The Company is a foreign issuing company, and thus, according to regulations, it may only present consolidated financial statements that have been verified and certified by accountants for the most recent three years. (II) Important matters that affect the consistency comparison of the above- mentioned concise financial statements, such as accountant changes, company mergers, or business department shutdowns, as well as their occurrence’s effect on the financial statements of the current year: No such situation. (III) Names and audit opinions of CPAs in the most recent five years 1. The names of the CPAs in the most recent five years and their audit opinions Year Name of accounting firm Names of CPAs Auditing opinions Amy Chiang, Rock Unqualified 2018 Deloitte Taiwan Tseng opinion Amy Chiang, Rock Unqualified 2019 Deloitte Taiwan Tseng opinion Amy Chiang, Rock Unqualified 2020 Deloitte Taiwan Tseng opinion

Note: The Company is a foreign issuing company, and thus, according to regulations, it may only present consolidated

financial statements that have been verified and certified by accountants for the most recent three years. 2. If there is a change of accountant in the most recent five years, the reasons for the change should be given by the Company and the previous and successor accountants: No such situation. 3. If the audit has been performed by the same CPA for the last seven consecutive years, the reasons for not changing the CPA, the current independence of the CPA, and the specific measures taken by the issuing company to strengthen the independence of the CPA should be given: No such situation. II. Financial analysis (I) Annual Financial Analysis for the Most Recent Five Years-International Financial Reporting Standards (Consolidated) Year Annual Financial Analysis for the Most Recent Five

Years (Notes 1 and 3)

Analysis item 2017 2018 2019 2020

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Ratio of liabilities 29.27 31.03 37.55 33.83 to assets Financial Ratio of long-term structure capital to real estate (%) 289.61 299.81 327.01 339.56 properties, plants, and equipment Current ratio 289.81 284.44 263.72 279.01 Liquidity Quick ratio 227.50 241.36 212.98 234.52 (%) Interest protection 58.35 33.46 11.63 6.05 multiples Receivables turnover 4.93 5.23 5.56 5.28 (Times) Average collection 75 70 66 70 period Inventory turnover 6.97 7.22 6.95 5.67 (Times) Payables turnover 6.60 7.70 7.43 6.87 Operating Average days in ability 53 51 53 65 sales Property, plant, and equipment 4.52 4.62 4.23 3.46 Turnover (Times) Total assets turnover 1.23 1.18 1.02 0.79 (Times) Return on assets (ROA) 18.82 9.93 6.86 2.94 (%) Return on equity (ROE) 28.03 13.78 9.48 3.73 (%) Pre-tax profit to Profitability paid-in capital ratio 49.58 108.21 83.47 33.38 (%) Net profit ratio 15.09 8.14 6.09 3.03 (%) Earnings per share (NT$) 12.37 8.09 6.02 2.35 (Note 2) Cash flow ratio 74.19 61.30 57.00 33.39 (%) Cash flow adequacy ratio (Note 3) (Note 3) (Note 3) (Note 3) Cash Flow (%) Cash reinvestment ratio 18.25 14.09 9.95 5.29 (%) Operational 1.26 1.37 1.54 2.18 Leverage leverage Financial leverage 1.02 1.03 1.09 1.17 Explanation of changes in various financial ratios in the last two years that have increased or decreased by 20%: 1. Interest protection multiples in 2020 are lower than in 2019, which is mainly due

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to the decline in performance in 2020 due to the impact of the COVID-19 pandemic, resulting in a decrease in the net profit before tax and interest expenses compared with the previous year. 2. The return on total assets in 2020 is lower than that in 2019, mainly due to the decline in performance in 2020 resulting from the impact of the COVID-19 pandemic, which caused the decline in net sales. 3. The return on assets in 2020 is lower than that in 2019, mainly due to the increase in average asset amount compared with the previous year and the decrease in net income after tax compared with the previous year. 4. Shareholder ROE in 2020 was lower than that in 2019, mainly due to the decrease in net income after tax compared with the previous year. 5. The net income before tax as a percentage of paid-up capital, net profit ratio, and earnings per share in 2020 are all lower than those in 2019, which is mainly due to the impact of the COVID-19 pandemic in 2020. Europe and the United States have adopted lockdown measures, various brands’ sporting events have been suspended, and brand retail stores have ceased operations and closed, resulting in a decrease in revenue and net income after tax compared with the previous year. 6. The 2020 cash flow ratio and cash reinvestment ratio were lower than those in 2019, mainly due to the decline in performance in 2020 resulting from the impact of the COVID-19 pandemic, resulting in a decline in net profit before tax and a decrease in cash generated from operating activities. 7. The operational leverage in 2020 was higher than that in 2019, due to the decline in performance resulting from the impact of the COVID-19 pandemic in 2020, which has caused a decline in operating revenue and operating profit; the large decline in operating profit has increased operating leverage. Note 1: The 2017–2020 annual financial analysis ratio information is based on the consolidated financial statements verified by an accountant. Note 2: Refers to basic earnings per share. Note 3: The Company is a foreign issuing company. According to regulations, only the consolidated financial statements of the most recent three years that have been verified and certified by accountants are listed. Since there is no relevant information on net cash flow from operating activities and capital expenditure in the most recent five years, it is not included in the calculation. Note 4: The formulas used to make calculations in this table are as follows: 1. Financial structure: (1) Ratio of liabilities to assets = Total liabilities/Total assets (2) Ratio of long-term capital to real estate properties, factories, and equipment=(Total equity+Non- current liabilities)/net amount of real estate properties, factories, and equipment 2. Liquidity: (1) Current ratio=Current assets/Current liabilities (2) Quick Ratio=(Current assets-Inventories-Prepaid expenses)/Current liabilities (3) Interest Protection Multiples= PBIT/Interest expenses for this period 3. Operating ability: (1) Receivables turnover (including accounts receivable and notes receivable generated from operation) = net sales/remaining sum of average receivables (including accounts payable and notes payable generated from operation) for every period (2) Average collection period = 365/receivables turnover (3) Inventory turnover = cost of sales/average inventory (4) Payables turnover (including accounts payable and notes payable generated from operation) = cost of sales/remaining sum of average payables (including accounts payable and notes payable generated from operation) for every period (5) Average days in sales = 365/Inventory turnover (6) Turnover of real estate properties, factories, and equipment = net sales/average net amount of real estate properties, factories, and equipment (7) Total assets turnover = net sales/average total assets

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4. Profitability: (1) ROA = [income after tax + interest expense x (1-tax rate)]/average total assets (2) ROE = income after tax/net average equity (3) Net profit ratio = income after tax/net sales (4) EPS = (income belonging to parent company - stock dividend of preferred stocks)/weighted average number of issued shares 5. Cash flow: (1) Cash flow ratio = net cash flow of operating activities/current liabilities (2) Cash flow adequacy ratio = net cash flow from operating activities in the most recent five years/(capital expenditure + inventory increase + cash dividends) for the most recent five years. (3) Cash reinvestment ratio = (net cash flow from operating activities-cash dividends) / (gross real estate, plant and equipment + long-term investment + other non-current assets + working capital). 6. Leverage: (1) Operating leverage = (net operating income - current operating cost and expense)/operating profit (2) Financial leverage = operating profit/(operating profit - interest expense)

121 審計委員會查核報告書

本公司民國109年度營業報告書、合併財務報表及盈餘分醚議案等各項表冊，其中合併財務報表業經勤業眾信聯合會計師事務所蔣淑菁會計師及曾棟鎏會計師查核完竣，並出具無保留意見之查核赧告。上述營業報告書、合併財務報表及盈餘分配議案經本審計委員會查核，認為尚無不合，爰依證券交易法第十四條之四及公司法第二百一十九條之規定報告如上，

敬請鑒核。

此致

志強國際企業股份有限公司民國110年股柬當會

審計委員會召集人洪慶隆

Z失走呤

民國。年 3 月 2 日

Sports Gear Co., Ltd., and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019 and Independent Auditors’ Report

Address： The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208, Cayman Island. Telephone： 04-22585388

Table of contents

Note number of financial Contents Page statements 1.Cover Page 1 - 2.Table of Contents 2 - 3.Independent Auditors’ Reports 3～ 6 - 4.Consolidated Balance Sheets 7 - 5.Consolidated Statements of Comprehensive 8～ 9 - Income 6.Consolidated Statements of Changes in Equity 10 - 7.Consolidated Statements of Cash Flows 11～ 12 - 8.Notes to the Consolidated Financial Statements (1) Company history 13 1 (2) Approval date and procedures of the 13 2 consolidated financial statements (3) New standards, amendments and 13～ 16 3 interpretations adopted (4) Summary of significant accounting 16～ 26 4 policies (5) Critical accounting judgements and key 26 5 sources of estimation uncertainty (6) Summary of significant accounting 26～ 44 6～ 25 policies (7) Transactions with related parties 45～ 46 26 (8) Assets Pledged as collateral or for 46 27 security (9) Significant contingent liabilities and 46 28 unrecognized commitments (10) Losses dues to major disasters - - (11) Significant subsequent events - - (12) Others 47 29 (13) Separately disclosed items 1. Information about significant 47～ 48 30 transactions 2. Information on investees 47～ 48 30 3. Information on investments in 48 30 mainland China 4. Information on major shareholders 48 30 (14) Segment information 48～ 49 31

Independent Auditors’ Report

The Board of Directors and Shareholders Sports Gear Co., Ltd.

Opinions We have audited the accompanying consolidated financial statements of Sports Gear Co., Ltd. and its subsidiaries (collectively referred to as the "Group"), which comprise the consolidated balance sheets as of December 31, 2020, and 2019, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020, and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the 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 ("ROC").

Basis for Opinion We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors'

Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matter of the Group's consolidated financial statements for the year ended December 31, 2020, is as follows: Inventory valuation As of the date of the balance sheet, the Group’s inventory was NT$1,680,349 thousand, accounting for 10% of the total consolidated assets, which is significant to the overall consolidated financial statements. Refer to Notes 4, 5, and 8 to the consolidated financial statements for accounting policies and disclosures related to inventory. Inventories are stated at the lower of cost or net realizable value. As the determination of the net realizable value and estimation of the consumption of inventory based on aging is involved with subjective estimation and judgment, inventory valuation was identified as a key audit matter. Our main audit procedures performed in respect of the key audit matter were as follows: 1. We assessed the process and appropriateness that the management used in estimating the net realizable value and the inventory obsolescence. 2. We assessed the reasonableness of estimated selling prices, the variable selling expense ratio, and the inventory obsolescence aging ratio. 3. We sampled the calculation of inventory aging and the calculation of the net realizable value and checked the correctness of the inventory valuation.

Responsibilities of Management and Those Charged with Governance for the

Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and the IFRS, IAS,IFRIC and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concerned and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations or has no realistic alternative but to do so. Those charged with governance, including members of the audit committee, are responsible for overseeing the Group’s financial reporting process. Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: 1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. 3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern. 5. Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the

direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2020, and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. The engagement partners on the audit resulting in this independent auditors’ report are Shu-Chin, Chiang and Done-Yuin Tseng.

March 12, 2021

Sports Gear Co., Ltd., And Subsidiaries CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars) December 31, 2020 December 31, 2019 CODE ASSETS Amount ％ Amount ％ CURRENT ASSETS 1100 Cash and cash equivalents (Notes 6) $ 4,901,399 30 $ 5,465,906 31 1170 Accounts receivable, net (Notes 7) 2,546,049 16 2,566,224 14 1200 Other receivables 15,782 - 20,753 - 1220 Current income tax assets (Notes 19) 12,269 - 3,934 - 130X Inventories (Notes 8) 1,680,349 10 2,201,399 12 1476 Other financial assets - current (Notes 6) 934,701 6 787,861 5 1479 Other financial assets 447,624 3 396,834 2 11XX Total current assets 10,538,173 65 11,442,911 64

NON-CURRENT ASSETS 1600 Property, plant, and equipment (Notes 10 and 24) 3,686,510 23 4,134,722 23 1755 Right-of-use assets (Notes 11) 1,768,029 11 1,923,757 11 1780 Intangible assets (Notes 12) 12,652 - 27,060 - 1840 Deferred income tax assets (Notes 19) 60,088 - 66,445 - 1920 Refundable deposits 73,887 - 79,553 - 1980 Other financial assets - non-current (Notes 6 and 24) 97,711 1 99,240 1 1990 Other non-current assets 57,817 - 86,412 1 15XX Total non-current assets 5,756,694 35 6,417,189 36

1XXX TOTAL $16,294,867 100 $17,860,100 100

CODE LIABILITIES AND EQUITY CURRENT LIABILITIES 2100 Short-term loans (Note 13 and 24) $ 823,677 5 $ 1,069,593 6 2150 Notes payables 22,362 - 21,293 - 2170 Account payables (Note 23) 1,388,370 9 1,770,769 10 2200 Other payables (Note 14) 679,464 4 923,979 5 2230 Current income tax liabilities (Notes 19) 242,673 1 270,338 2 2280 Lease liabilities-current (Notes 11 and 23) 93,835 1 91,743 1 2320 Current portion of long-term bank loans (Notes 13 and 24) 522,396 3 185,163 1 2399 Other current liabilities - others 4,257 - 6,225 - 21XX Total current liabilities 3,777,034 23 4,339,103 25

NON-CURRENT LIABILITIES 2541 Long-term bank loans (Notes 13 and 24) 363,883 2 930,005 5 2560 Current income tax liabilities - non-current (Notes 19) 81,425 1 - - 2570 Deferred income tax liabilities (Notes 19) 10,874 - 3,370 - 2580 Lease liabilities - non-current (Notes 11 and 23) 1,279,643 8 1,432,808 8 2612 Long-term payables - - 1,950 - 25XX Total non-current liabilities 1,735,825 11 2,368,133 13

2XXX Total liabilities 5,512,859 34 6,707,236 38

EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION 3110 Common shares 1,742,606 11 1,742,606 10 3211 Capital surplus 7,493,674 46 7,667,935 43 Retained earnings 3310 Legal reserve 104,859 1 - - 3320 Special reserve 118,349 1 - - 3350 Unappropriated earnings 1,872,310 11 1,860,672 10 3400 Other equity ( 549,790 ) ( 4 ) ( 118,349 ) ( 1 )

3XXX Total equity 10,782,008 66 11,152,864 62

TOTAL $16,294,867 100 $17,860,100 100

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

Chairman: Wei-Chia Chen Manager: Wei-Chia Chen Accounting Supervisor: Vincent Kang

Sports Gear Co., Ltd., And Subsidiaries CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

2020 2019 CODE Amount ％ Amount ％ 4000 OPERATING REVENUE (Notes 17) $ 13,514,535 100 $ 17,208,037 100

5000 OPERATING COSTS (Notes 8,18 and 23) 11,005,026 81 13,502,975 79

5900 GROSS PROFIT 2,509,509 19 3,705,062 21

OPERATING EXPENSES (Notes 18 and 23) 6100 Selling and marketing expenses 303,546 2 398,909 2 6200 General and administrative expenses 1,014,639 8 1,157,823 7 6300 Research and development expenses 404,900 3 536,244 3 6450 Expected credit losses (Reversal gains) ( 3,294 ) - 3,025 - 6000 Total operating expenses 1,719,791 13 2,096,001 12

6900 PROFIT FROM OPERATIONS 789,718 6 1,609,061 9

NON-OPERATING INCOME AND EXPENSES (Notes 18 and 23) 7010 Other income 25,773 - 36,880 - 7020 Other gains and losses ( 168,951 ) ( 1 ) ( 105,157 ) - 7050 Finance costs ( 115,296 ) ( 1 ) ( 136,859 ) ( 1 ) 7100 Interest income 50,443 - 50,578 - 7000 Total non-operating income and expenses ( 208,031 ) ( 2 ) ( 154,558 ) ( 1 )

7900 PROFIT BEFORE INCOME TAX 581,687 4 1,454,503 8

7950 INCOME TAX EXPENSE (Notes 19) 172,580 1 405,917 2

8200 NET PROFIT FOR THE YEAR 409,107 3 1,048,586 6

(Continued)

2020 2019 CODE Amount ％ Amount ％

OTHER COMPREHENSIVE INCOME (LOSS) 8310 Items that will not be reclassified subsequently to profit or loss: 8340 Exchange difference of translation to the presentation currency ( $ 600,651 ) ( 4 ) ( $ 225,101 ) ( 1 ) 8360 Items that may be reclassified subsequently to profit or loss: 8361 Exchange differences on translating the financial statements of foreign operations 169,210 1 68,080 - 8300 Other comprehensive income (loss) ( 431,441 ) ( 3 ) ( 157,021 ) ( 1 )

8500 TOTAL COMPREHENSIVE INCOME FOR THE YEAR ( $ 22,334 ) - $ 891,565 5

EARNINGS PER SHARE (Note 20) 9750 Basic $ 2.35 $ 6.02

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

(Concluded)

Sports Gear Co., Ltd., And Subsidiaries STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Equity Attributable to Owners of the Company (Notes 16) Other Equity

Retained Earnings Exchange Differences on Translating Foreign Operations CODE Share Capital Capital Surplus Legal Reserve Special Reserve Unappropriated Total Equity Earnings A1 Balance at January 1, 2019 $ 1,742,606 $ 7,667,935 $ - $ - $ 1,509,128 $ 38,672 $ 10,958,341

Appropriation of 2018 earnings B5 Cash dividends to shareholders - - - - ( 697,042 ) - ( 697,042 )

D1 Net profit for 2019 - - - - 1,048,586 - 1,048,586

D3 Other comprehensive income (loss) for 2019, net - - - - - ( 157,021 ) ( 157,021 ) of income tax

D5 Total comprehensive income for 2019 - - - - 1,048,586 ( 157,021 ) 891,565

Z1 Balance at December 31, 2019 1,742,606 7,667,935 - - 1,860,672 ( 118,349 ) 11,152,864

Appropriation of 2019 earnings B1 Legal Reserve - - 104,859 - ( 104,859 ) - - B3 Special Reserve - - - 118,349 ( 118,349 ) - - B5 Cash dividends to shareholders - ( 174,261 ) - - ( 174,261 ) - ( 348,522 )

D1 Net profit for 2020 - - - - 409,107 - 409,107

D3 Other comprehensive income (loss) for 2020, net - - - - - ( 431,441 ) ( 431,441 ) of income tax

D5 Total comprehensive income (loss) for 2020 - - - - 409,107 ( 431,441 ) ( 22,334 )

Z1 Balance at December 31, 2020 $ 1,742,606 $ 7,493,674 $ 104,859 $ 118,349 $ 1,872,310 ( $ 549,790 ) $ 10,782,008

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

Sports Gear Co., Ltd., And Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CODE 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES A10000 Profit before income tax $ 581,687 $ 1,454,503 A20010 Adjustments for: A20100 Depreciation expenses 914,986 857,312 A20200 Amortization expenses 15,872 14,526 A20300 Expected credit losses (Reversal gains) ( 3,294 ) 3,025 A20400 Net gain on financial assets and liabilities at fair value through profit or loss - ( 1,780 ) A20900 Interest expenses 115,296 136,859 A21200 Interest income ( 50,443 ) ( 50,578 ) A22500 Losses (gain) on disposal of property, plant, and equipment ( 1,887 ) 8,809 A23700 Impairment loss (gains) on non- financial assets 5,369 ( 17,929 ) A24100 Net loss (gain) on foreign currency exchange 25,760 26,383 A30000 Changes in operating assets and liabilities A31130 Notes receivable - 461 A31150 Accounts receivable 30,700 1,027,038 A31180 Other accounts receivable ( 11,950 ) 16,618 A31200 Inventories 417,491 ( 549,584 ) A31240 Other current assets ( 72,970 ) 28,373 A32150 Accounts payable ( 318,902 ) 110,236 A32180 Other payables ( 225,673 ) 109,817 A32230 Other current liabilities ( 1,873 ) 3,639 A33000 Cash generated from operations 1,420,169 3,177,728 A33100 Interest received 66,802 38,889 A33300 Interest paid ( 116,526 ) ( 135,160 ) A33500 Income tax paid ( 109,407 ) ( 608,380 ) AAAA Net cash generated from operating activities 1,261,038 2,473,077

CASH FLOWS FROM INVESTING ACTIVITIES B00200 Proceeds from disposal of financial assets at fair value through profit or loss - 13,168 B02700 Payments for acquisitions of property, plant, and equipment ( 521,004 ) ( 1,011,208 ) (Continued)

CODE 2020 2019 B02800 Proceeds from disposal of property, plant, and equipment 15,988 54,875 B03700 Decrease (Increase) in refundable deposits 1,533 ( 3,066 ) B04500 Payments for acquisitions of intangible assets ( 1,083 ) ( 16,615 ) B05350 Payments for acquisitions of right-of- use assets ( 62,607 ) ( 21,292 ) B06500 Increase in other financial assets ( 197,943 ) ( 457,624 ) B06700 (Decrease) Increase in other non- current assets 35,484 ( 11,810 ) BBBB Net cash used in investing activities ( 729,632 ) ( 1,453,572 )

CASH FLOWS FROM FINANCING ACTIVITIES C00100 Proceeds (Repayments) from short- term loans ( 208,857 ) 342,386 C01600 Proceeds from long-term loans - 284,285 C01700 Repayments of long-term loans ( 195,408 ) ( 339,162 ) C04020 Repayment of the principal portion of lease liabilities ( 89,624 ) ( 88,252 ) C04500 Dividends paid to shareholders ( 348,522 ) ( 697,042 ) CCCC Net cash used in financing activities ( 842,411 ) ( 497,785 )

DDDD EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS ( 253,502 ) ( 53,065 )

EEEE NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS OF THE YEAR ( 564,507 ) 468,655

E00100 CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 5,465,906 4,997,251

E00200 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 4,901,399 $ 5,465,906

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

Sports Gear Co., Ltd., And Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1.COMPANY HISTORY Sports Gear Co., Ltd. (the "Company") was established in the British Cayman Islands on March 28, 2017, mainly for organization structure reengineering of applying for the listing to the Taiwan Stock Exchange Corporation. On December 27, 2017, the Company completed the reorganization with Insport International Co., Ltd. (hereinafter referred to as "Insport") by exchanging shares and became the ultimate holding company. The above-mentioned exchanging shares is a reorganization under common control. The Company is a continuation of Insport. It is regarded as a merger from the beginning and the preparation of financial statements for the comparison period is not limited by the date of establishment. The company and its subsidiaries (collectively as the "Group") are mainly engaged in the manufacture and sales of various sports shoes and supplies. The functional currency is the US dollar. As the Company will be listed on TWSE, to enhance the comparability and consistency of financial statements, the consolidated financial statements are presented in the New Taiwan dollar. 2.APPROVAL DATE AND PROCEDURES OF THE CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements were approved by the board of directors and authorized for issue on March 12, 2021. 3.NEW STANDARDS, AMENDMENTS, AND INTERPRETATIONS ADOPTED: (1) Initial application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), Interpretations of IFRS (IFRIC), and Interpretations of IAS (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission(FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC would not have a significant effect on the Group’s accounting policies. (2) IFRSs endorsed by the Financial Supervisory Commission (FSC) with an effective date starting 2021 New, Amended or Revised Standards and Interpretations Effective Date (the “New IFRSs”) Announced by IASB Amendments to IFRS 4 “Extension of the Temporary Effective immediately Exemption from Applying IFRS 9” upon promulgation Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4, and January 1, 2021 IFRS 16“Interest Rate Benchmark Reform - Phase 2” Amendment to IFRS 16 “Covid-19-Related Rent June 1, 2021 Concessions”

As of the date the consolidated financial statements were authorized for issue, the Group is continuously evaluating the impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance. The related impact will be disclosed when the Group completes the evaluation. (3) The IFRSs issued by IASB in issue but not yet endorsed and issued into effect by the FSC New, Amended, or Revised Standards and Effective Date Interpretations nnounced by IASB (Note 1) “Annual Improvements to IFRS Standards 2018- 2020” January 1, 2022 (Note 2) Amendments to IFRS 3 “Reference to the Conceptual Framework” January 1, 2022 (Note 3) Amendments to IFRS 10 and IAS 28 “Sale or To be determined Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IAS 1 “Classification of Liabilities as January 1, 2023 Current or Non-current” Amendments to IAS 1 “Disclosure of Accounting January 1, 2023 (Note 6) Policies” Amendments to IAS 8 “Definition of Accounting January 1, 2023 (Note 7) Estimates” Amendments to IAS 16 “Property, Plant and January 1, 2022 (Note 4) Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts - Cost of January 1, 2022 (Note 5) Fulfilling a Contract”

Note 1： Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates. Note 2： The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied prospectively to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022. Note 3： The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022. Note 4： The amendments are applicable to property, plant, and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021. Note 5： The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022. Note 6： The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023. Note 7： The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023. As of the date the consolidated financial statements were authorized for issue, the Group is continuously evaluating the impact that the application of other standards and interpretations will have on the Group’s financial position and financial performance. The related impact will be disclosed when the Group completes the evaluation.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Statement of compliance The consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

(2) Basis of preparation The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value. The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows: 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities; 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and 3) Level 3 inputs are unobservable inputs for an asset or liability.

(3) Classification of current and non-current assets and liabilities Current assets include: 1) Assets held primarily for the purpose of trading; 2) Assets expected to be realized within 12 months after the reporting period; and 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. Current liabilities include: 1) Liabilities held primarily for the purpose of trading; 2) Liabilities due to be settled within 12 months after the reporting period; and 3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting

period. Assets and liabilities that are not classified as current are classified as non-current.

(4) Basis of consolidation The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (its subsidiaries). Adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. All intra-company transactions, balances, income, and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and the non-controlling interests even if this results in the non-controlling interests having a deficit balance Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the interests of the Group and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company. Refer to Note 9 and Table 7 for detailed information on subsidiaries (including the percentages of ownership and main businesses).

(5) Foreign currencies In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise. Non-monetary items measured at fair value that are denominated in

foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the year. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction and are not retranslated. For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group and its foreign operations (including subsidiaries in other countries that use currencies different from the Company) are translated into the New Taiwan dollar using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income (attributed to the owners of the Company and non-controlling interests as appropriate). The exchange difference arising from the conversion of a functional currency into a presentation currency is not subsequently reclassified to profit or loss.

(7) Inventories Inventories consist of raw materials, supplies, work-in-progress, and finished goods and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at their weighted-average costs on the balance sheet date. (8) Property, plant, and equipment Property, plant, and equipment are stated at cost less accumulated depreciation and accumulated impairment loss. Property, plant, and equipment in the course of construction are measured at cost less any recognized impairment loss. Costs include professional fees and borrowing costs eligible for capitalization. Such properties are depreciated and classified to the appropriate categories of property, plant, and equipment

when completed and ready for their intended uses. Depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. If a lease term is shorter than the assets’ useful lives, such assets are depreciated over the lease term. The estimated useful lives, residual values, and depreciation methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis. On derecognition of an item of property, plant, and equipment, the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss. (9) Intangible assets Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis. On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss. (10) Impairment of property, plant and equipment, right-of-use asset, and intangible assets At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use asset, and intangible assets, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The recoverable amount is the higher of fair value less costs to sell and

value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss. When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount (less amortization and depreciation) that would have been determined had no impairment loss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss. (11) Financial instruments Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss. 1) Financial assets All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. A. Measurement categories Financial assets are classified into the following categories: Financial assets at FVTPL and financial assets at amortized cost. Financial assets at amortized cost Financial assets that meet the following conditions are subsequently measured at amortized cost:

a. The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and b. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, financial assets at amortized cost, notes and accounts receivable (net), and other receivables at amortized cost, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss. Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for: a. Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit adjusted effective interest rate to the amortized cost of such financial assets; and b. Financial assets that are not credit impaired on purchase or origination but have subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods. A financial asset is credit-impaired when one or more of the following events have occurred: i) Significant financial difficulty of the issuer or the borrower; ii) Breach of contract, such as a default; iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or iv) The disappearance of an active market for that financial

asset because of financial difficulties. Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash, and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments. B. Impairment of financial assets The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable). The Group always recognizes lifetime expected credit losses (ECLs) for accounts receivable. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs. Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. For internal credit risk management purposes, the Group determines that the following situations indicate that a financial asset is in default (without taking into account any collateral held by the Group): a. Internal or external information shows that the debtor is unlikely to pay its creditors. b. When a financial asset is more than 1 day past due unless

the Group has reasonable and corroborative information to support a more lagged default criterion. The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account. C. Derecognition of financial assets The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. 2) Financial liabilities A. Subsequent measurement All financial liabilities are measured at amortized cost using the effective interest method. B. Derecognition of financial liabilities The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss. 3) Derivative financial instruments The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts. Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is

negative, the derivative is recognized as a financial liability. (12) Revenue recognition The Group identifies contracts with customers, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied. Revenue from the sale of goods is recognized as revenue when the goods are delivered to the customers’ specified location or when the goods are shipped because it is the time when the customer has full discretion over the manner of distribution and bears the risks of obsolescence. Sales revenue and accounts receivables are recognized at the point in time. The Group does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control. (13) Leases At the inception of a contract, the Group assesses whether the contract is, or contains a lease. 1) The Group as lessor Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms. 2) The Group as lessee The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short- term leases and low-value asset leases accounted to applying for a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms. Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments

made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets. Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms. Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments. The lease payments are discounted using the interest rate implicit in a lease if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee’s incremental borrowing rate. Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in future lease payments resulting from a change in a lease term the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets. (14) Borrowing costs Borrowing costs directly attributable to the acquisition, construction, or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

(15) Employee benefits 1) Short-term employee benefits Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for services rendered by employees. 2) Retirement benefits Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions. (16) Taxation The income tax expense represents the sum of the tax currently payable and deferred tax. 1) Current tax Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction. According to the Income Tax Act in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings. Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision. 2) Deferred tax Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that taxable profits will probably be available against which those deductible temporary differences can be utilized. Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Group is able to control the reversal of the temporary difference and, probably, the temporary difference will not reverse

in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are recognized only to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. If investment properties measured using the fair value model are non-depreciable assets or are held under a business model whose objective is not to consume substantially all of the economic benefits embodied in the assets over time, the carrying amounts of such assets are presumed to be recovered entirely through a sale. 3) Current and deferred taxes Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity; in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

5.CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Group’s accounting policies, management is required to make judgments, estimations, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates. The Group considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods. Key Sources of Estimation Uncertainty - Write-down of inventories The net realizable value of inventories is the estimated selling price in the ordinary course of business less the estimated costs of completion and disposal. The estimation of net realizable value is based on current market conditions and historical experience with product sales of a similar nature. Changes in market conditions may have a material impact on the estimation of the net realizable value.

6.CASH AND CASH EQUIVALENTS December 31, 2020 December 31, 2019 Cash on hand and petty cash $ 13,663 $ 10,857 Checking accounts and demand deposits 2,955,538 5,276,422 Time deposits 2,964,610 1,065,728 5,933,811 6,353,007 Less: Pledge time deposits ( 111,720 ) ( 99,240 )

Time deposits with original maturities of less than 3 months ( 920,692 ) ( 787,861 ) $ 4,901,399 $ 5,465,906

The term time deposits and pledge time deposits with original maturities of more than 3 months are listed under other financial assets - current and non-current items. The interest rate range of deposits on the balance sheet date is as follows: December 31, 2020 December 31, 2019 Demand deposits 0.005%-3.75% 0.01%-5% Time deposits 0.12%-7% 0.02%-8%

7、 ACCOUNTS RECEIVABLES December 31, 2020 December 31, 2019 Accounts receivables $ 2,546,128 $ 2,569,598 Less: Allowance for impairment loss ( 79 ) ( 3,374 ) $ 2,546,049 $ 2,566,224

The average credit period of the sale of goods was 30-75 days. No interest was charged on accounts receivables. The Group uses other publicly available financial information or its trading records to rate its customers. The Group set up the decision of dealing with creditworthy counterparties and obtaining sufficient collaterals, where appropriate, as a means of mitigating the risk of financial loss from defaults. In order to minimize credit risk, the management of the Group has been delegated for determining credit limits, credit approvals, and other monitoring procedures to ensure that follow-up actions are taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Group’s credit risk was significantly reduced. The Group applies the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all accounts receivables. The expected credit loss on trade receivables is based on the past default experience and the current

financial position of the debtor, and the economic situation of the industry, as well as the GDP forecast and the industry outlook. The expected credit losses on trade receivables are estimated using a provision matrix by reference to the past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the customer groups are not further differentiated, and the expected credit loss rate is determined only by the overdue days of receivables. The Group writes off accounts receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivables of the Group: Past Due Past Due 91 to 180 Past Due December 31, 2020 Not Past Due 1 to 90 days days over 181 days Total Expected credit loss rate 0% 1% 20% 100% Gross carrying amount $ 2,538,707 $ 7,392 $ 29 $ - $ 2,546,128 Loss allowance (Lifetime ECL) - ( 74 ) ( 5 ) - ( 79 ) Amortized cost $ 2,538,707 $ 7,318 $ 24 $ - $ 2,546,049

December 31, 2019 Expected credit loss rate 0% 1% 20% 100% Gross carrying amount $ 2,537,348 $ 26,165 $ 3,716 $ 2,369 $ 2,569,598 Loss allowance (Lifetime ECL) - ( 262 ) ( 743 ) ( 2,369 ) ( 3,374 ) Amortized cost $ 2,537,348 $ 25,903 $ 2,973 $ - $ 2,566,224

The movements of the loss allowance of accounts receivables were as

follows: 2020 2019 Balance at January 1 $ 3,374 $ 348 Net remeasurement of loss allowance(Reversal gains) ( 3,294 ) 3,025 Foreign exchange gains and losses ( 1 ) 1 Balance at December 31 $ 79 $ 3,374

8. INVENTORIES December 31, 2020 December 31, 2019 Finished goods $ 879,784 $ 962,765 Work in progress 297,457 465,152 Raw materials and supplies 503,108 773,482 $ 1,680,349 $ 2,201,399

The nature of the cost of goods sold is as follows: 2020 2019 Cost of inventories sold $ 10,876,596 $ 13,525,009 Losses on inventory valuation loss(Gains Recoveries) 5,369 ( 17,929 ) Unallocated production overheads 110,301 63,835 Others ( 12,530 ) ( 67,940 ) $ 10,979,736 $ 13,502,975

The unallocated production overheads include the costs related to the fact that the actual production is lower than the normal production due to the COVID-19 in 2020 and the adjustment of the production line in 2019. 9. SUBSIDIARIES Subsidiaries included in the consolidated financial statements were summarized as follows: Proportion of Ownership 2020 2019 Nature of December December Rem Investor Investee Activities 31 31 ark The Company Sports Gear Co., Ltd. (Samoa) Sporting goods 100% 100% (Sports Gear Co., Ltd. (Samoa)) trading and international investment Elephant Step Co., Ltd.(Elephant) International 100% 100% investment Fongyuan International Co., International 100% 100% Ltd.(Fongyuan) investment All Wells International Co., Ltd(All International 100% 100% Wells) investment SPG (Samoa) Silk Invest International Co., Investment and 100% 100% Ltd.(Silk Invest) real estate development, rental, and sales Elephant Can Sports Vietnam Co., Ltd. Manufacturing, 100% 100% (VG) processing, and trading of sporting goods PT Can Sports Industrial Manufacturing, 90% 90% Indonesia(SPG Indonesia) processing, and trading of sporting goods SGP Sports Gear Portugal S.A Research center 100% - note (SGP) for sporting goods VG SGP Research center - 100% note for sporting goods Fongyuan All Wells International Co., Ltd. Manufacturing, 90% 90% (AW) processing, and trading of sporting goods All Wells Chi Hung Co., Ltd. (SPG) Manufacturing, 100% 100% processing, and trading of sporting goods Dai Hoa Co., Ltd. (DH) Manufacturing, 100% 100% processing, and trading of sporting goods AW Manufacturing, 10% 10% processing, and trading of sporting goods Fireman Factory Co., Ltd(Fireman) Manufacturing, 100% 100% processing, and trading of

sporting goods Can Sports Shoes Co., Ltd. Manufacturing, 100% 100% (SGC) processing, and trading of sporting goods Sports Gear (Myanmar) Co., Ltd. Manufacturing, 100% 100% (SPG Myanmar) processing, and trading of sporting goods August Sports Co., Ltd. (ASP) Manufacturing, 100% 100% processing, and trading of sporting goods SPG Indonesia Manufacturing, 10% 10% processing, and trading of sporting goods

Note:： In 2019, SGP was established and registered as a shareholder and was not belong to the Group. It was established by appointment and already signed an equity interest transfer agreement. Considering the substantial relationship between the Group and SGP, it is listed as a subsidiary and the equity interest transfer has been completed from January 1 to December 31, 2020. In September 2020, the board of directors considered the future development of the Group and passed the transfer of SGP equity interest from Can Sports Vietnam to Elephant. The equity interest transfer agreement has been signed in October 2020 and the procedure is still in progress. 10.PROPERTY, PLANT, AND EQUIPMENT Effect of foreign currency Balance at Increase of Decrease of Reclassificati exchange Balance at 2020 January 1 the year the year ons difference December 31 Cost Land $ 502,228 $ 90 $ - $ - $ 368 $ 502,686 ( 26,239 ( 144,073 Buildings 2,708,538 1,096 ) 226,451 ) 2,765,773 Machinery and ( 76,811 ( 124,253 ( 206,333 equipment 4,051,015 228,978 ) ) ) 3,872,596 Transportation ( 2,626 ( 517 ( 2,416 equipment 63,252 2,265 ) ) ) 59,958 ( 24,760 ( 1,024 ( 5,109 Office equipment 128,619 3,010 ) ) ) 100,736 Miscellaneous ( 13,075 ( 36,041 equipment 596,164 71,737 ) 151,730 ) 770,515 Construction in ( 260,292 ( 14,743 progress 411,010 213,828 - ) ) 349,803 ( $ 143,511 ( $ 7,905 ( $ 408,347 Total cost 8,460,826 $ 521,004 ) ) ) 8,422,067

Accumulated depreciation

( $ 25,819 ( $ 19 ( $ 59,703 Buildings 1,120,106 $ 135,609 ) ) ) 1,170,174 Machinery and ( 64,734 ( 80,051 ( 150,835 equipment 2,756,640 500,324 ) ) ) 2,961,344 Transportation ( 2,626 ( 60 ( 1,806 equipment 38,336 7,060 ) ) ) 40,904 ( 24,032 ( 963 ( 3,831 Office equipment 87,597 13,347 ) ) ) 72,118 Miscellaneous ( 12,199 ( 21,919 equipment 323,425 121,422 ) 80,288 ) 491,017 Total accumulated ( $ 129,410 ( $ 805 ( $ 238,094 depreciation 4,326,104 $ 777,762 ) ) ) 4,735,557 Net amount $ 4,134,722 $ 3,686,510

2019 Cost ( $ 190 Land $ 490,536 $ 11,882 $ - $ - ) $ 502,228 ( 63 ( 60,357 Buildings 2,679,369 18,762 ) 70,827 ) 2,708,538 Machinery and ( 125,196 ( 90,729 equipment 3,766,063 499,707 ) 1,170 ) 4,051,015 Transportation ( 4,897 ( 1,089 equipment 57,214 8,751 ) 3,273 ) 63,252 ( 562 ( 15,950 Office equipment 125,602 6,804 ) 12,725 ) 128,619 Miscellaneous ( 17,402 equipment 474,616 72,807 ) 65,905 238 596,164 Construction in ( 163,569 ( 9,439 progress 191,523 392,495 - ) ) 411,010 ( $ 148,120 ( $ 9,669 ( $ 177,516 Total cost 7,784,923 $ 1,011,208 ) ) ) 8,460,826

Accumulated depreciation ( $ 9 ( $ 3,862 ( $ 25,199 Buildings 1,007,059 $ 142,117 ) ) ) 1,120,106 Machinery and ( 76,480 ( 308 ( 61,762 equipment 2,412,995 482,195 ) ) ) 2,756,640 Transportation ( 2,289 ( 771 equipment 34,894 6,135 ) 367 ) 38,336 ( 322 ( 264 ( 1,911 Office equipment 74,434 15,660 ) ) ) 87,597 Miscellaneous ( 5,336 ( 7,068 equipment 259,722 72,040 ) 4,067 ) 323,425 Total accumulated ( $ 84,436 ( $ 96,711 depreciation 3,789,104 $ 718,147 ) $ - ) 4,326,104 Net amount $ 3,995,819 $ 4,134,722

The items of property, plant and equipment are depreciated on a straight- line basis over their estimated useful lives as follows:

Buildings 4 to 30 years Machinery and equipment 2 to 25 years Transportation equipment 4 to 12 years Office equipment 2 to 9 years Miscellaneous equipment 2 to 10 years

Property, plant, and equipment pledged as collateral for bank borrowings are set out in Note 24.

11.LEASE ARRANGEMENTS (1) Right-of-use assets December 31, 2020 December 31, 2019 Carrying amount Land $ 592,190 $ 556,502 Buildings 1,175,839 1,367,255 $ 1,768,029 $ 1,923,757

2020 2019 Additions to right-of-use assets $ 77,898 $ 965,051 Depreciation expenses for right-of-use assets Land $ 12,771 $ 13,308 Buildings 124,453 125,857 $ 137,224 $ 139,165

Except for the addition and depreciation listed above, there is no significant sublease or impairment of the right-of-use assets of the Group in 2020 and 2019. (2) Lease liabilities December 31, 2020 December 31, 2019 Carrying amounts Current $ 93,835 $ 91,743 Non-current $ 1,279,643 $ 1,432,808

The range of discount rate for lease liabilities was as follows:

December 31, 2020 December 31, 2019 Land 4.94%-5.12% 4.94%-5.12% Buildings 1.7%-4.85% 1.7%-4.85%

(3) Material lease-in activities and terms The Group leases buildings for office uses in Taiwan with lease terms of 3 years. The Group has priority to renew the lease of the buildings at the end of the lease terms. The Group leases certain, land and buildings, for plant and office uses in Cambodia with lease terms of 7 to 25 years. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms.

The Group also promises certain, land and buildings, for plant and office uses in Vietnam and Myanmar with lease terms of 10 to 50 years. Part of the land lease payment was paid at that time. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. (4) Other lease information The Group leases certain buildings which qualify as short-term leases. The Group has elected to apply for the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases. 12.INTANGIBLE ASSETS 2020 2019 Balance at January 1 $ 27,060 $ 24,831 Additions for the year 1,083 16,615 Amortization of the year ( 15,872 ) ( 14,526 ) Reclassified 597 251 Effect of foreign currency exchange difference ( 216 ) ( 111 ) Balance at December 31 $ 12,652 $ 27,060 Computer software is depreciated using the straight-line method over their estimated useful lives of 2 to 5 years. 13.LOANS (1) Short-term loans December 31, 2020 December 31, 2019 Line of credit loans $ 367,997 $ 391,138 Secured loans 455,680 678,455 $ 823,677 $ 1,069,593 Interest Rates (%) Line of credit loans 1.15-1.7 1.54-3.41 Secured loans 1.25 2.90-3.34 (2) Long-term loans December 31, 2020 December 31, 2019 Mortgaged loans - due from January 2021 to April 2026 $ 783,751 $ 994,848 Line of credit loans - Due in July 2025, capital repay in installments 102,528 120,320 886,279 1,115,168 Less: Current portion ( 522,396 ) ( 185,163 ) $ 363,883 $ 930,005 (Continued)

(Concluded)

December 31, 2020 December 31, 2019 Interest Rates (%) Mortgaged loans 1.58-4.40 1.85-4.49 Line of credit loans 1.79 3.40

14.OTHER PAYABLES

December 31, 2020 December 31, 2019 Payables for salaries and bonuses $ 481,890 $ 611,181 Others 197,574 312,798 $ 679,464 $ 923,979

15.RETIREMENT BENEFIT PLANS Sports Gear Co., Ltd. Taiwan Branch and Silk Invest International Co., Ltd. of the Group adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages. The employee of the Group subsidiaries in Vietnam, Cambodia, and Myanmar are members of the retirement benefit plans operated by the respective governments. The subsidiaries are required to fund a pension benefit plan with a specific proportion of salary. The obligation of the Group to the government-operated retirement benefit plan is only to allocate a specific amount, and the relevant expenses are recorded under other employee benefits.

16.EQUITY (1) Common shares December 31, 2020 December 31, 2019 Number of shares authorized (in thousands) 500,000 500,000 Shares authorized $ 5,000,000 $ 5,000,000 Number of shares issued and fully paid (in thousands) 174,261 174,261 Shares issued $ 1,742,606 $ 1,742,606

(2) Capital surplus December 31, 2020 December 31, 2019 May be used to offset a deficit, distributed as cash dividends, or transferred to share capital Additional paid-in capital (Note) $ 7,217,472 $ 7,391,733 From differences between the equity purchase price and carrying amount arising from actual acquisition or disposal of subsidiaries 276,202 276,202 $ 7,493,674 $ 7,667,935 Note: Including the amount of issued share capital during the reorganization, which exceeds the amount in equity obtained, and the difference between the denomination of the Company's value per share changed from US dollars to New Taiwan dollars. When the Company has no deficit, such capital surplus may be distributed as cash dividends or stock dividends up to a certain

percentage of the paid-in capital. (3) Retained earnings and dividend policy On November 8, 2019, the Company resolved to amend the articles of association in accordance with the earnings distribution policy. Under the dividends policy as set forth in the amended articles, 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 a legal reserve 10% of the remaining profit, 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 Corporation’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for the distribution of dividends to shareholders. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors after the amendment, refer to Note 18(6). According to the articles of association of the company, shareholders' dividends can be distributed by cash dividends or stock dividends, and the proportion of cash dividends shall not be less than 10%.

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Corporation’s paid-in capital. The legal reserve may be used to offset deficits. If the Corporation has no deficit and the legal reserve has exceeded 25% of the Corporation’s paid-in capital, the excess may be transferred to capital or distributed in cash. Items referred to under Rule No. 1010012865 issued by the FSC and the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs”, should be appropriated to or reversed from a special reserve by the Company. According to the provisions of the articles of association before the amendment, the Company shall not pay dividends or make other distributions except for the Company's realized or unrealized benefits, share issuance premium account, or other payments permitted by the Cayman Company Law to pay dividends or other distributions. The appropriations of earnings for 2019 and 2018 approved in the shareholders’ meetings in June 2020 and May 2019, respectively, were as follows: Appropriation of Earnings Dividends Per Share (NT$) 2019 2018 2019 2018 Legal Reserve $ 104,859 $ - Special Reserve 118,349 - Cash dividends 174,261 697,042 $ 1 $ 4

In June 2020, the meeting of shareholders also decided to distribute NT$ 1 per share with NT$ 174,261 of capital reserve. The appropriation of 2020earnings had been proposed by the Company’s board of directors on March 12, 2021. The appropriations and dividend per share were as follows: Appropriation Dividends Per of Earnings Share (NT$) Legal Reserve $ 40,911 Special Reserve 431,441 Cash dividends 294,068 $ 1.6875

The above-mentioned board of directors also proposed to allocate cash of NT$ 1.6875 per share with a capital reserve of NT$ 294,068. The appropriation of 2020 earnings is subject to the resolution of the

shareholders in the regular shareholders’ meetings to be held on June 11, 2021.

17.REVENUE 2020 2019 Revenue from contracts with customers Revenue from the sale of goods $ 13,399,032 $ 17,057,793 Others 115,503 150,244 $ 13,514,535 $ 17,208,037

(1) Contract balances December 31, 2020 December 31, 2019 Accounts receivables (Note 7) $ 2,546,128 $ 2,569,598

(2) Disaggregation of revenue Refer to Note 29 for information about the disaggregation of revenue. 18.NET PROFIT (LOSS) FROM CONTINUING OPERATIONS

(1) Interest income 2020 2019 Revenue from bank interests $ 50,443 $ 50,578

(2) Other income 2020 2019 Others $ 25,773 $ 36,880

(2) Other gains and losses 2020 2019 Net foreign exchange gain (loss) ( $ 160,264 ) ( $ 78,246 ) Others ( 8,687 ) ( 26,911 ) ( $ 168,951 ) ( $ 105,157 )

(3) Finance costs 2020 2019 Interest expenses $ 46,154 $ 64,841 Interest on lease liabilities 69,142 72,018 $ 115,296 $ 136,859

(4) Depreciation and amortization 2020 2019 An analysis of depreciation by function Operating costs $ 702,984 $ 706,257 Operating expenses 212,002 151,055 $ 914,986 $ 857,312 An analysis of amortization by function Operating costs $ 658 $ 421 Operating expenses 15,214 14,105 $ 15,872 $ 14,526

(5) Employee benefits expense 2020 2019 Short-term benefits $ 3,482,953 $ 4,260,114 Post-employment benefits 10,260 11,390 Other employee benefits 1,034,234 1,158,001 Total employee benefits expense $ 4,527,447 $ 5,429,505

An analysis of employee benefits expense by function Operating costs $ 3,668,364 $ 4,434,914 Operating expenses 859,083 994,591 $ 4,527,447 $ 5,429,505

(6) Compensation of employees and remuneration of directors According to the amended Company’s Articles of Incorporation, the Company accrued employees’ compensation and remuneration of directors at rates of no less than 2% and no higher than 2%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors. 19.INCOME TAXES (1) Income tax recognized in profit or loss Major components of income tax expense are as follows: 2020 2019 Current tax In respect of the current year $ 168,928 $ 416,232 Adjustments for prior years ( 7,229 ) 2,775 161,699 419,007 Deferred tax

In respect of the current year 10,881 ( 13,090 ) Income tax expense recognized in profit or loss $ 172,580 $ 405,917

A reconciliation of accounting profit and income tax expense is as follows: 2020 2019 Profit before tax $ 581,687 $ 1,454,503

Income tax expense calculated at the statutory rate $ 149,025 $ 337,611 Nondeductible expenses in determining taxable income 9,145 43,081 Unrecognized loss carryforwards and deductible temporary differences 21,639 22,450 Adjustments for prior years’ tax ( 7,229 ) 2,775 Income tax expense recognized in profit or loss $ 172,580 $ 405,917

The Group applies to the individual of the Income Tax Act of the R.O.C, the rate for profit-seeking enterprise income tax is 20%; the tax amount generated from other districts are calculated by the tax rates applicable in each relevant district. (2) Deferred tax assets and liabilities The movements of deferred tax assets and deferred tax liabilities are as follows: Foreign Recognized currency Balance at Balance at in Profit or exchange December 2020 January 1 Los differences 31 Deferred tax assets Temporary differences Property, plant, and equipment $ 15,944 $ 4,191 ( $ 1,000 ) $ 19,135 Expenses payable 15,426 2,138 ( 652 ) 16,912 Provision for loss on inventory 10,950 2,526 ( 645 ) 12,831 Others 4,896 6,790 ( 476 ) 11,210 47,216 15,645 ( 2,773 ) 60,088 Loss carryforwards 19,229 ( 18,890 ) ( 339 ) - $ 66,445 ( $ 3,245 ) ( $ 3,112 ) $ 60,088 (Continued)

(Concluded)

Foreign Recognized currency Balance at Balance at in Profit or exchange December 2020 January 1 Los differences 31 Deferred tax liabilities Temporary differences Unrealized foreign currency $ 1,625 $ 8,762 ( $ 80 ) $ 10,307 Others 1,745 ( 1,126 ) ( 52 ) 567 $ 3,370 $ 7,636 ( $ 132 ) $ 10,874 2019 Deferred tax assets Temporary differences Property, plant, and equipment $ 21,504 ( $ 5,244 ) ( $ 316 ) $ 15,944 Expenses payable 16,683 ( 911 ) ( 346 ) 15,426 Provision for loss on inventory 7,875 3,327 ( 252 ) 10,950 Others 9,565 ( 4,628 ) ( 41 ) 4,896 55,627 ( 7,456 ) ( 955 ) 47,216 Loss carryforwards - 19,727 ( 498 ) 19,229 $ 55,627 $ 12,271 ( $ 1,453 ) $ 66,445 Deferred tax liabilities Temporary differences Unrealized foreign currency $ 2,848 ( $ 1,185 ) ( $ 38 ) $ 1,625 Others 1,419 366 ( 40 ) 1,745 $ 4,267 ( $ 819 ) ( $ 78 ) $ 3,370

(3) The information of the unused operating loss carries forward for which

no deferred tax assets have been recognized December 31, 2020 December 31, 2019 Loss carryforwards Due in 2020 $ - $ 27,798 Due in 2021 - 238,937 Due in 2022 - 32,899 Due in 2023 9,101 25,434 Due in 2024 40,635 115,793 Due in 2025 81,920 - Due in 2028 149 149 Due in 2029 1,557 7,508 Due in 2030 1,485 - $ 134,847 $ 448,518

(4) Unused operating loss carry forward information As of December 31, 2020, operating loss carryforward consisted of the following: Remaining creditable amount Last creditable year $ 9,101 2023 40,635 2024 81,920 2025 149 2028 1,557 2029 1,485 2030 $ 134,847

(5) Income tax examination The tax authorities have examined the income tax returns of Sports Gear Co., Ltd. Taiwan Branch and Silk Invest International Co., Ltd. through 2018. 20.EARNINGS PER SHARE Net profit attributable to Number of owners of the shares Earnings per Company (thousands) share(NT$) 2020 Profit for the year attributable to owners of the Company $ 409,107 174,261 $ 2.35

2019 Profit for the year attributable to owners of the Company $ 1,048,586 174,261 $ 6.02

21.CAPITAL RISKS MANAGEMENT The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance. The overall strategy has not changed. The capital structure of the Group consists of net debt (loans offset by cash and cash equivalents) and equity attributable to owners of the Corporation (comprising issued capital, reserves, retained earnings, and other equity). The Group is not subject to other external capital requirements. Key management personnel of the Group reviews the capital structure on

an annual basis. As part of this review, the key management personnel considers the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Group may adjust the number of dividends paid to shareholders, the number of new shares issued or repurchased, and the amount of new debt issued or existing debt redeemed. 22.FINANCIAL INSTRUMENTS (1) Fair value of financial instruments not measured at fair value The carrying amounts of the Group’s financial assets and liabilities that are not measured at fair value approximated their fair values. (2) Categories of financial instruments December 31, 2020 December 31, 2019 Financial assets At amortized cost (Note 1) $ 8,569,529 $ 9,019,537

Financial liabilities At amortized cost (Note 2) 3,800,152 4,902,752

Note 1: The balances, which comprise cash and cash equivalents, notes and accounts receivables, other receivables, and refundable deposits. Note 2: The balances, which comprise short-term and long-term loans, notes and accounts payables, other payables, and current portion of long-term loans. (3) Financial risk management objectives and policies The Group’s major financial instruments include equity investments, trade receivables, trade payables, borrowings, and lease liabilities. The Group’s corporate treasury function provides services to the business, coordinates access to financial markets, and monitors and manages the financial risks relating to the operations of the Group through internal risk reports that analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk and interest rate risk), credit risk, and liquidity risk. The Group sought to minimize the effects of these risks by maintaining a flexible portfolio of financial instruments and using limited derivative

financial instruments to hedge risk exposures. The use of financial derivatives was governed by the Group’s policies approved by the board of directors and compliance with policies and exposure limits was reviewed according to the internal control policies on a continuous basis. 1) Market risk The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates and interest rates. By maintaining a flexible portfolio of financial instruments and using limited derivative financial instruments, the Group can avoid the risk of some foreign currency net assets or liabilities arising from exchange rate or interest rate fluctuations. There is no change in the exposure of the Group to market risks of financial instruments and the management and measurement of such exposure. The main financial risks are as follows: A. Foreign currency risk The Group has foreign currency denominated sales and purchase, which expose the group to foreign currency risk. The carrying amounts (includes monetary items denominated in non-functional currencies that have been written off in the consolidated financial statements) of the Group’s foreign currency denominated monetary assets and liabilities at the end of the reporting period are set out in Note 27. Sensitivity analysis Assuming a 1% change in the NTD against the USD, the pre- tax profit for the years ended December 31, 2020, and 2019 would have changed by $20,423 thousand and $29,077 thousand, respectively. B. Interest rate risk The Group is exposed to interest rate risk mainly caused by deposits and loans with floating interest rates. The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the day of the balance sheet were as follows:

December 31, 2020 December 31, 2019 Fair value interest rate risk Financial assets $ 2,964,610 $ 1,065,728 Financial liabilities 1,373,478 1,524,551

Cash flow interest rate risk Financial assets 2,955,538 5,276,422 Financial liabilities 1,709,956 2,184,761

Sensitivity analysis For the Group's financial assets and liabilities with floating interest rates, if interest rates had been 4 quarter percentage points (1%) higher or lower and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2020, and 2019 would have changed by $12,456 thousand and $30,917 thousand, respectively. 2) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. As at the end of the reporting period, the Group’s maximum exposure to credit risk which would cause a financial loss to the Group due to the failure of counterparties to discharge an obligation and financial guarantees provided by the Group could arise from the carrying amount of the respective recognized financial assets as stated in the balance sheets. The Group’s concentration of credit risk was mainly from the major customer, which accounted for 68% and 63% of the total trade receivables as of December 31, 2020, and 2019, respectively. 3) Liquidity risk The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants. The Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2020, and 2019, the Group had

available unutilized bank loan facilities of $1,487,923 thousand and $1,554,185 thousand, respectively. The liquidity and interest rate risk table below illustrates the maturity analysis of financial liabilities of the Group within the repayment period. Non-derivative financial liabilities are prepared in terms of undiscounted cash flow on the earliest date when the Group may be required to satisfy the liabilities. Less than 3 3 months to 1 Classification months year 1+ years December 31, 2020 Non-interest bearing liabilities $ 2,090,196 $ - $ - Lease liabilities 37,697 118,662 1,730,865 Variable interest rate liabilities 561,710 784,362 363,883 $ 2,689,603 $ 903,024 $ 2,094,748

Less than 3 3 months to 1 Classification months year 1+ years December 31, 2019 Non-interest bearing liabilities $ 2,716,041 $ - $ 1,950 Lease liabilities 39,103 122,374 1,953,042 Variable interest rate liabilities 740,844 513,912 930,005 $ 3,495,988 $ 636,286 $ 2,884,997

Additional information about the maturity analysis for lease liabilities: Less than 11-50 16-20 5 Years 5-10 Years Years Years 20+ years December 31, 2020 Lease liabilities $ 791,816 $ 631,791 $ 321,907 $ 41,981 $ 99,729

December 31, 2019 Lease liabilities $ 824,074 $ 694,192 $ 458,701 $ 40,822 $ 96,730

(4) Transfer of Financial Assets Information on the sale of accounts receivable of the Group which is not yet due at the end of the year is as follows: December 31, 2019 Counterpart Sale amount Advance Advanced Advanced

y amount amount amount available interest rates (%) Citibank $ 128,137 $ - $ 128,137 2.84

According to the concession agreement, the losses arising from commercial disputes (such as sales return or discount) shall be borne by the Group, and the losses arising from credit risk shall be borne by the bank. 23.TRANSACTIONS WITH RELATED PARTIES Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been disclosed on consolidation and are not disclosed in this note. (1) Related party name and relationship Related Party Name Relationship with the Group Much More Co., Ltd(Much More) The key management is the same person Spread Idea Co., Ltd. (Spread Idea) The key management is the same person Sports Gear Social welfare foundation(SPG The key management is the Foundation) same person Wei-Chia Chen The key management Sunyin (Vietnam) Co. Ltd.( Sunyin) The key management is the same person Power Rich International Ltd.( Power Rich) The key management is the same person

(2) Purchase of goods Related Party Category/Name 2020 2019 The key management is the same person $ 2,707 $ 4,344

There is no significant difference in the purchase price and conditions between related parties and non-related parties. (3) Payables to related parties Related Party December 31, December 31, Line Item Category/Name 2020 2019 Accounts payables The key management is the same person $ 296 $ 4,164

(4) Other transactions with related parties

Related Party Line Item Category/Name 2020 2019 Donation expense SPG Foundation $ 4,517 $ 4,000

The key management is the Rental income same person $ 229 $ 248

(5) Lease arrangements Related Party December 31, December 31, Line Item Category/Name 2020 2019 The key management is the Lease liabilities same person $ 37,938 $ 45,007 The key management 120,418 143,032 $ 158,356 $ 188,039

Related Party Line Item Category/Name 2020 2019 The key management is the Interest expense same person $ 1,277 $ 1,337 The key management 6,248 6,076 $ 7,525 $ 7,413

(6) Remuneration of key management personnel 2020 2019 Short-term employee benefits $ 61,099 $ 72,124 Post-employment benefits 587 503 $ 61,686 $ 72,627

24.ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY The following assets were provided as collateral for bank loans: December 31, 2020 December 31, 2019 Pledged time deposits (classified as other financial assets - non- current) $ 111,720 $ 99,240 Property, plant, and equipment 1,332,800 1,556,904 $ 1,444,520 $ 1,656,144

25.SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED

COMMITMENTS The unrecognized commitments of the Group are as follows: December 31, 2020 December 31, 2019 Purchase of property, plant, and equipment $ 58,402 $ 202,603

26.OTHERS In 2020, affected by the COVID-19 (epidemic), governments around the world took measures of city closure and other social alienation, which decreased the brand terminal retail sales and the production capacity demand of the manufacturing end. As a result, the production lines of some plants of the Group were idle, which affected the production efficiency and lead to the decline of operating revenue and gross profit margin. The Group has actively carried out personnel scheduling and cost control, and strictly controlled capital expenditure items to minimize the impact of the epidemic. In the second half of 2020, with all kinds of sports activities gradually returning to normal, the demand for production capacity from the brand side to the manufacturing side has gradually picked up. Since September, some plants’ idle production lines of the Group have resumed production. On December 4, 2020, the Company reviewed the initial application for the first listing of shares through the Securities Listing Review Committee convened by the Taiwan Stock Exchange Corporation. In addition, the Company issued 21,785,000 common shares with a par value of NT $10 per share and a total amount of NT$ 217,850,000 to cooperate with the public underwriting before the initial listing to act the cash capital increase through effective registration by Taiwan Stock Exchange Corporation on January 19, 2021, Rule No. 11017001621.

27.SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES The group entities’ significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows: December 31, 2020 December 31, 2019 Financial assets Foreign Excha Carrying Foreign Excha Carrying Currency nge Amount Currency nge Amount Rate Rate Monetary items USD(USD: TWD) $ 151,612 28.48 $ 4,480,123 $ 206,964 30.08 $ 6,225,482 USD(USD: VND) 63,955 23,100 1,821,452 67,841 23,178 2,040,662

Financial liabilities Monetary items USD (USD: TWD) 80,955 28.48 2,305,599 91,465 30.08 2,751,272 USD (USD: VND) 68,599 23,100 1,953,712 86,674 23,178 2,607,152

The Group is mainly exposed to the USD. The following information was aggregated by functional currencies of group entities, and the exchange rates between respective functional currencies and the presentation currency are disclosed. The significant (realized and unrealized) foreign exchange gains (losses) were as follows: 2020 2019 Net Foreign Net Foreign Functional Functional Currencies to Exchange Functional Currencies to Exchange Currencies Express currencies Gain (Loss) Express currencies Gain (Loss) TWD 1(TWD: TWD) ( $ 169,127 ) 1(TWD: TWD) ( $ 83,561 ) VND 0.0013(VND: TWD) ( 1,219 ) 0.0013(VND: TWD) 5,923 USD 0.0338(USD: TWD) 9,801 0.0324(USD: TWD) ( 131 ) IDR 0.0020(IDR: TWD) 281 0.0021(IDR: TWD) ( 477 ) ( $ 160,264 ) ( $ 78,246 )

28.SEPARATELY DISCLOSED ITEMS (1) Information about significant transactions: A. Financing provided to others. (Table1) B. Endorsements/guarantees provided. (Table 2) C. Marketable securities held (excluding investments in subsidiaries). (None) D. Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital. (None) E. Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital. (Table 3)

F. Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital. (None) G. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 4) H. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 5) I. Trading in derivative instruments. (None) J. Intercompany relationships and significant intercompany transactions. (Table 6) (2) Information on investees. (Table 7) (3) Information on investments in mainland China. (None) (4) Information on major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder. (Table 8); 29.SEGMENTS INFORMATION Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the location of operations. The Group’s reportable segments are as follows: A. Footwear manufacturing business; B. Other business. (1) Segment revenue and results The following was an analysis of the Group’s revenue and results by reportable segments: Footwear manufacturing 2020 business Other business Total Revenue from external customers $ 13,336,936 $ 177,599 $ 13,514,535 Segment profit and loss $ 413,023 ( $ 3,916 ) $ 409,107

2019 Revenue from external customers $ 16,752,517 $ 455,520 $ 17,208,037 Segment profit and loss $ 1,001,022 $ 47,564 $ 1,048,586

Segment profit represented the profit earned by each segment including

non-operating income and expenses and income tax expenses. This was the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance. (2) Geographical information The Group’s revenue from continuing operations from external customers by location of customers and information about its non- current assets by location of assets are detailed below: Revenue from External Customers Non-current Assets December 31, December 31, 2020 2019 2020 2019 America $ 4,636,315 $ 7,594,957 $ - $ - Europe 5,336,584 6,618,480 75,886 40,613 Asia 1,535,820 1,680,187 4,554,628 5,543,859 China 1,729,073 919,079 - - Taiwan - - 549,236 541,402 Other 276,743 395,334 345,258 46,077 $ 13,514,535 $ 17,208,037 $ 5,525,008 $ 6,171,951

Non-current assets include real estate, plant and equipment, right-of- use assets, intangible assets, and other non-current assets. (3) Information about major customers Revenue from any individual customer exceeded 10% of the Group’s revenue is detailed below: 2020 2019 Customer name Amount ％ Amount ％ Customer A $ 7,888,699 58 $ 9,101,762 53 Customer B 3,849,477 28 5,106,173 30

Sports Gear Co., Ltd., and Subsidiaries FINANCING PROVIDED TO OTHERS January 1 to December 31, 2020 Table 1 (In Thousands of New Taiwan Dollars)

Financing Actual Reasons Allowance Collateral Aggregate Business Limit for Financial Statement Related Highest Balance Ending Amount Interest Nature of for for Financing No. Lender Borrower Transaction Each Account Party for the Period Balance Borrowed Rate Financing Short-term Impairment Limits Amounts Item Value Borrower (Note 3) Financing Loss (Note 2) (Note 1) 1 Sports Gear DH Other receivables - Yes $ 199,360 $ - $ - - Necessary for $ - Operating $ - － $ - $ 17,936,854 $ 23,915,806 Co., Ltd. Related parties USD 7,000 short-term capital USD 629,805 USD 839,740 Taiwan financing Branch AW Other receivables - Yes 854,000 - - - Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 30,000 short-term capital USD 629,805 USD 839,740 financing SGC Other receivables - Yes 712,000 - - - Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 25,000 short-term capital USD 629,805 USD 839,740 financing Fongyuan Other receivables - Yes 113,920 - - - Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 4,000 short-term capital USD 629,805 USD 839,740 financing VG Other receivables - Yes 1,269,496 - - - Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 44,575 short-term capital USD 629,805 USD 839,740 financing Elephant Other receivables - Yes 284,800 - - - Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 10,000 - short-term capital USD 629,805 USD 839,740 financing ASP Other receivables - Yes 128,160 - - - Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 4,500 short-term capital USD 629,805 USD 839,740 financing SPG Indonesia Other receivables - Yes 142,400 - - - Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 5,000 short-term capital USD 629,805 USD 839,740 financing SGP Other receivables - Yes 142,400 85,440 85,440 4% Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 5,000 USD 3,000 USD 3,000 short-term capital USD 629,805 USD 839,740 financing Silk Invest Other receivables - Yes 200,000 200,000 100,000 2.5% Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 7,022 USD 7,022 USD 3,511 short-term capital USD 629,805 USD 839,740 financing 1 Sports Gear SPG Other receivables - Yes 284,800 284,800 - - Necessary for - Operating - － - 17,936,854 23,915,806 Co., Ltd. Related parties USD 10,000 USD 10,000 short-term capital USD 629,805 USD 839,740 (Samoa) financing SGC Other receivables - Yes 1,139,400 1,139,400 740,480 2.5%-3% Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 40,000 USD 40,000 USD 26,000 short-term capital USD 629,805 USD 839,740 financing AW Other receivables - Yes 427,200 427,200 299,040 2.5% Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 15,000 USD 15,000 USD 10,500 short-term capital USD 629,805 USD 839,740 financing

DH Other receivables - Yes 284,800 284,800 - - Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 10,000 USD 10,000 short-term capital USD 629,805 USD 839,740 financing All Wells Other receivables - Yes 85,440 85,440 - - Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 3,000 USD 3,000 short-term capital USD 629,805 USD 839,740 financing Fongyuan Other receivables - Yes 142,400 142,400 56,960 2.5% Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 5,000 USD 5,000 USD 2,000 short-term capital USD 629,805 USD 839,740 financing SPG Indonesia Other receivables - Yes 142,400 142,400 28,480 2.5% Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 5,000 USD 5,000 USD 1,000 short-term capital USD 629,805 USD 839,740 financing

(Continued)

Financing Actual Reasons Allowance Aggregate Business Collateral Limit for Financial Statement Related Highest Balance Ending Amount Interest Nature of for for Financing No. Lender Borrower Transaction Each Account Party for the Period Balance Borrowed Rate Financing Short-term Impairment Limits Amounts Item Value Borrower (Note 3) Financing Loss (Note 2) (Note 1) 1 Sports Gear ASP Other receivables - Yes $ 56,960 $ 56,960 $ 42,720 2.5% Necessary for $ - Operating $ - － $ - $ 17,936,854 $ 23,915,806 Co., Ltd. Related parties USD 2,000 USD 2,000 USD 1,500 short-term capital USD 629,805 USD 839,740 (Samoa) financing VG Other receivables - Yes 569,600 569,600 256,320 2.5% Necessary for - Operating - － - 17,936,854 23,915,806 Related parties USD 20,000 USD 20,000 USD 9,000 short-term capital USD 629,805 USD 839,740 financing

Note 1: The individual amount for lending to a company or a firm having a business relationship with the Company shall not exceed the total transaction amount between the parties during the period of lending and shall not exceed 10% of the net worth of the Company’s financial statements of the issuing company for the most recent period, audited and attested or reviewed by a certified public accountant (CPA). The “transaction amount” shall mean the purchasing or sales amount between the parties during the period of twelve (12) months prior to the time of lending, whichever is higher; The individual amount for lending to a company in need of funds for a short-term period shall not exceed 10% of the net worth of the Company’s financial statements of the issuing company for the most recent period, audited and attested or reviewed by a certified public accountant (CPA). For fund-lending between offshore companies whose voting shares are 100% owned, directly or indirectly, by the Company, the total amount for such fund-lending shall not be subject to the limit of short-term financing. Unless there are other relevant laws and regulations in the place where the subsidiary is established. The limit of the transaction amount to individual objects shall not exceed three times of the net worth of the latest financial statements of the company. Note 2: The total amount for lending to a company or a firm having a business relationship with the Company shall not exceed the total transaction amount between the parties during the period of lending and shall not exceed 40% of the net worth of the Company’s financial statements of the issuing company for the most recent period, audited and attested or reviewed by a certified public accountant (CPA); The total amount for lending to a company in need of funds for a short-term period shall not exceed 40% of the net worth of the Company’s financial statements of the issuing company for the most recent period, audited and attested or reviewed by a certified public accountant (CPA). For fund-lending between offshore companies whose voting shares are 100% owned, directly or indirectly, by the Company, the total amount for such fund-lending shall not be subject to the limit of short-term financing. Unless there are other relevant laws and regulations in the place where the subsidiary is established. The limit of the transaction amount to individual objects shall not exceed four times of the net worth of the latest financial statements of the company. Note 3: The transactions within the Group were eliminated in the consolidated financial statements. (Concluded)

Sports Gear Co., Ltd., and Subsidiaries ENDORSEMENTS/GUARANTEES PROVIDED January 1 to December 31, 2020 Table 2 (In Thousands of New Taiwan Dollars)

Endorsee/Guaranteed Party Endorsem Endorsem Ratio of Endorsem ent/ ent/ Limits on Accumulated ent/ Maximum Guarantee Guarantee Endorsement/ Outstanding Endorsement/ Aggregate Guarantee Amount Amount Given by Given On Guarantee Endorsement/ Actual Guarantee to Endorsement/ Given by Endorser/ Relations Endorsed/ Endorsed/ Subsidiari Behalf of Rema No. Given on Guarantee at Amount Net Equity In Guarantee Parent on Guarantor Name hip Guaranteed Guaranteed by es Companie rk Behalf of the End of the Borrowed Latest Limit Behalf of (Note 1) During the Collateral on Behalf s in Each Party Period Financial (Note 2) Subsidiari Period of Mainland (Note 2) Statements es Parent China (%) (Note 3) (Note 3) (Note 3) 1 SGC All Wells 3 $ 505,438 $ 227,840 $ 227,840 $ 216,448 $ 216,448 21 $ 854,103 N N N USD 17,747 USD 8,000 USD 8,000 USD 7,600 USD 7,600 USD 29,990 SPGTW 4 505,438 427,200 - - - - 854,103 N N N USD 17,747 USD 15,000 USD 29,990

Note 1: The relationship between endorser and endorsee: (1) A company with which it does business. (2) A company in which the public company, directly and indirectly, holds more than 50 percent of the voting shares. (3) A company that directly and indirectly holds more than 50 percent of the voting shares in the public company. (4) Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares for each other. Note 2: The total amount of external endorsement/guarantee shall not exceed 80% of the net worth of the Company. The amount of endorsement/guarantee rendered to any single company shall not exceed 50% of the net worth of the Company; In the event that an endorsement/guarantee is made due to needs arising out of businesses, the amount of endorsement/guarantee shall not exceed the amount of the purchasing or sales between the parties in the most recent year whichever is higher. Note 3: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by the listed parent company to subsidiary and provision by the subsidiary to the listed parent company, and provision to the party in Mainland China.

Sports Gear Co., Ltd., and Subsidiaries ACQUISITION OF INDIVIDUAL REAL ESTATE AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL 2020 Table 3 (In Thousands of New Taiwan Dollars)

Information on Previous Title Transfer If Counterparty Is Transaction Relati A Related Party Purpose of Buyer Property Event Date Amount Payment Status Counterparty onshi Pricing Reference Other Terms Property Transactio Acquisition (Note) p Relationship Amount Owner n Date SGC Plant, facilities, 2018/4/6- $ 370,500 Payment BRANCH OF PHUOC － Not Not applicable Not Not According to For production None and additional 2020/8/20 according to THANH CONSTRUCTION applicable applicable applicable contract terms developments contract terms CORPORATION GENESIS HOME BUILDING CO., LTD PEB STEEL BUILDINGS CO., LTD CONG TY CO PHAN FULL POWER ECO SAVING CO., LTD MINH MAN CONSTRUCTION COMPANY LIMITED FULIAN CONSTRUCTION CO., LTD DINGJIA CO., LTD. LONG KIMPECH TRADING CO., LTD

Note: Part of the transactions are based on the expected transactions of the capital budget approved by the board of directors, and the actual transaction information shall be subject to the actual contract.

Sports Gear Co., Ltd., and Subsidiaries TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL January 1 to December 31, 2020 Table 4 (In Thousands of New Taiwan Dollars)

Transaction Details Abnormal Transaction Notes/Accounts Payable or Receivable Remar Company Name Related Party Nature of Relationship Purchases/S Payment Payment Amount % to Total Unit Price Ending Balance % of Total k ales Terms Terms Sports Gear Co., Ltd. SPG Refer to Notes 9 of the Sale $ 418,213 3 － $ - － $ 120,464 4 Taiwan Branch consolidated financial statements SPG Refer to Notes 9 of the Purchase 3,678,930 25 － - － ( 636,467 ) 28 consolidated financial statements VG Refer to Notes 9 of the Sale 203,583 1 － - － 37,486 1 consolidated financial statements VG Refer to Notes 9 of the Purchase 2,377,164 16 － - － ( 238,505 ) 11 consolidated financial statements AW Refer to Notes 9 of the Sale 127,027 1 － - － 41,546 1 consolidated financial statements AW Refer to Notes 9 of the Purchase 1,226,376 8 － - － ( 147,182 ) 7 consolidated financial statements DH Refer to Notes 9 of the Sale 241,065 2 － - － 62,034 2 consolidated financial statements DH Refer to Notes 9 of the Purchase 1,049,664 7 － - － ( 156,302 ) 7 consolidated financial statements SGC Refer to Notes 9 of the Sale 1,401,120 9 － - － 306,428 10 consolidated financial statements SGC Refer to Notes 9 of the Purchase 3,981,566 27 － - － ( 733,906 ) 33 consolidated financial statements SPG SPGTW Refer to Notes 9 of the Sale VND 2,879,049,774 93 － - － VND 516,235,463 94 consolidated financial statements SPGTW Refer to Notes 9 of the Purchase VND 326,828,582 24 － - － ( VND 97,706,058 ) 21 consolidated financial statements

SGC Refer to Notes 9 of the Sale VND 205,868,958 7 － - － VND 33,290,121 6 consolidated financial statements VG SPGTW Refer to Notes 9 of the Sale VND 1,855,027,858 94 － - － VND 204,032,075 87 consolidated financial statements SPGTW Refer to Notes 9 of the Purchase VND 168,962,705 23 － - － ( VND 30,402,703 ) 13 consolidated financial statements AW Refer to Notes 9 of the Sale VND 109,248,111 6 － - － VND 29,453,455 13 consolidated financial statements AW SPGTW Refer to Notes 9 of the Sale VND 964,559,219 95 － - － VND 119,379,002 88 consolidated financial statements SPGTW Refer to Notes 9 of the Purchase VND 105,575,754 28 － - － ( VND 33,697,438 ) 24 consolidated financial statements VG Refer to Notes 9 of the Purchase VND 109,248,111 29 － - － ( VND 29,453,455 ) 21 consolidated financial statements DH SPGTW Refer to Notes 9 of the Sale VND 825,362,775 83 － - － VND 126,775,918 77 consolidated financial statements SPGTW Refer to Notes 9 of the Purchase VND 189,650,118 37 － - － ( VND 49,648,413 ) 30 consolidated financial statements VG Refer to Notes 9 of the Sale VND 87,390,076 9 － - － ( VND 28,005,977 ) 17 consolidated financial statements SGC SPGTW Refer to Notes 9 of the Sale USD 133,882 100 － - － USD 25,769 100 consolidated financial statements SPGTW Refer to Notes 9 of the Purchase USD 46,848 68 － - － ( USD 10,541 ) 56 consolidated financial statements SPG Refer to Notes 9 of the Purchase USD 8,871 13 － - － ( USD 1,441 ) 8 consolidated financial statements DH Refer to Notes 9 of the Purchase USD 3,781 5 － - － ( USD 1,212 ) 6 consolidated financial statements

Note: The transactions within the Group were eliminated in the consolidated financial statements.

Sports Gear Co., Ltd., and Subsidiaries RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL December 31, 2020 Table 5 (In Thousands of New Taiwan Dollars)

Overdue Amounts Received Turnover Allowance for Company Name Related Party Nature of Relationship Ending Balance Actions in Subsequent Rate Amount Impairment Loss Taken Period SPGTW SGC Refer to Notes 9 of the Accounts TWD 306,428 4.04 consolidated financial receivables $ - － $ 189,970 $ - statements SPG Refer to Notes 9 of the Accounts TWD 120,464 2.42 consolidated financial receivables - － 109,264 - statements Sports Gear Co., Ltd. SGC Refer to Notes 9 of the Other USD 26,000 - (Samoa) consolidated financial receivables - － USD 6,500 - statements AW Refer to Notes 9 of the Other USD 10,500 - consolidated financial receivables - － - - statements VG Refer to Notes 9 of the Other USD 9,000 - consolidated financial receivables - － - - statements SPG SPGTW Refer to Notes 9 of the Accounts VND 516,235,463 7.57 consolidated financial receivables - － VND516,235,463 - statements VG SPGTW Refer to Notes 9 of the Accounts VND 204,032,075 8.86 consolidated financial receivables - － VND193,450,072 - statements AW SPGTW Refer to Notes 9 of the Accounts VND 119,379,002 9.15 consolidated financial receivables - － VND119,379,002 - statements DH SPGTW Refer to Notes 9 of the Accounts VND 126,775,918 7.92 consolidated financial receivables - － VND126,775,918 - statements SGC SPGTW Refer to Notes 9 of the Accounts USD 25,769 8.03 consolidated financial receivables - － USD 25,769 - statements

Note: The transactions within the Group were eliminated in the consolidated financial statements.

Sports Gear Co., Ltd., and Subsidiaries THE BUSINESS RELATIONSHIP BETWEEN THE PARENT AND THE SUBSIDIARIES AND BETWEEN EACH SUBSIDIARY, AND THE CIRCUMSTANCES AND AMOUNTS OF ANY SIGNIFICANT TRANSACTIONS BETWEEN THEM January 1 to December 31, 2020 Table 6 (In Thousands of New Taiwan Dollars)

Intercompany Transactions Percentage to Nature of Consolidated No. Company Name Counterparty Relationship Financial Statement Account Amount Terms Net Revenue or (Note 1) Total Assets (%) 0 Sports Gear Co., Ltd. Taiwan AW 3 Cost of goods sold Open account 60 days 9 Branch $ 1,226,376 SPG 3 Cost of goods sold 3,678,930 Open account 60 days 27 SPG 3 Accounts payables 636,467 Open account 60 days 4 SPG 3 Revenue of goods sold 418,213 Open account 60 days 3 DH 3 Cost of goods sold 1,049,664 Open account 60 days 8 DH 3 Revenue of goods sold 241,065 Open account 60 days 2 SGC 3 Accounts receivables 306,428 Open account 60 days 2 SGC 3 Cost of goods sold 3,981,566 Open account 60 days 29 SGC 3 Accounts payables 733,906 Open account 60 days 5 SGC 3 Revenue of goods sold 1,401,120 Open account 60 days 10 VG 3 Cost of goods sold 2,377,164 Open account 60 days 18 VG 3 Accounts payables 238,505 Open account 60 days 1 VG 3 Revenue of goods sold 203,583 Open account 60 days 2 1 Sports Gear Co., Ltd. (Samoa) SGC 3 Other receivables 768,300 － 5 AW 3 Other receivables 310,275 － 2 VG 3 Other receivables 265,950 － 2 2 SPG SGC 3 Revenue of goods sold 261,810 Open account 60 days 2 3 VG AW 3 Revenue of goods sold 138,934 Open account 60 days 1

Note 1: The relationships: (1) Represents the transactions from the parent company to subsidiary. (2) Represents the transactions from subsidiary company to parent. (3) Represents the transactions between subsidiaries. Note 2: For balance sheet accounts, transactions exceeding 1% of the consolidated total assets should be disclosed; for income statement accounts, transactions exceeding 1% of the consolidated total revenue should be disclosed. The transactions within the Group were eliminated in the consolidated financial statements.

Sports Gear Co., Ltd., and Subsidiaries INFORMATION ON INVESTEES January 1 to December 31, 2020 Table 7 (In Thousands of New Taiwan Dollars)

Original Investment Amount Balance as of December 31, 2020 Percentage Net Income Investor Main Businesses and Investment Investee Company Location December 31, December 31, of Carrying (Losses) of the Remark Company Products Shares Income (Losses) 2020 2020 Ownership Amount Investee (%) Shares The Company Sports Gear Co., Samoa Sporting goods trading and USD 101,400 USD 51,400 5,035,579 100 USD 208,905 USD 17,619 USD 17,569 First-tier Ltd. (Samoa) international investment subsidiary Fongyuan Seychelles International investment USD 29,109 USD 29,109 31,850,000 100 USD 11,561 USD 932 USD 932 First-tier subsidiary Elephant Seychelles International investment USD 42,035 USD 42,035 43,000,000 100 USD 43,469 USD 855 USD 855 First-tier subsidiary All Wells The British International investment USD 12,500 USD 12,500 12,500,000 100 USD 114,330 USD 738 USD 738 First-tier Virgin Islands subsidiary Sports Gear Silk Invest Taiwan Investment and real estate USD 6,482 USD 6,482 - 100 USD 6,501 ( $ 7,144 ) (Note 1) Second- Co., Ltd. development, rental, and tier (Samoa) sales subsidiary Elephant VG Vietnam Manufacturing, processing, USD 56,000 USD 40,000 - 100 USD 41,236 VND 27,411,478 (Note 1) Second- and trading of sporting tier goods subsidiary SPG Indonesia Indonesia Manufacturing, processing, USD 2,250 USD 2,250 - 90 USD 2,132 ( IDR 649,588 ) (Note 1) Second- and trading of sporting tier goods subsidiary SGP Portugal Research center for sporting EUR 50 - - 100 ( USD 225 ) ( EUR 215 ) (Note 1) Second- goods tier subsidiary VG SGP Portugal Research center for sporting - EUR 50 - - VND - ( EUR 215 ) (Note 1) Third-tier goods subsidiary Fongyuan AW Vietnam Manufacturing, processing, USD 36,000 USD 36,000 - 90 USD 12,699 VND 25,965,748 (Note 1) Second- and trading of sporting tier goods subsidiary SPG Indonesia Indonesia Manufacturing, processing, USD 250 USD 250 - 10 USD 237 ( IDR 649,588 ) (Note 1) Second- and trading of sporting tier goods subsidiary All Wells SPG Vietnam Manufacturing, processing, USD 12,700 USD 12,700 - 100 USD 49,495 VND 68,779,304 (Note 1) Second- and trading of sporting tier goods subsidiary AW Vietnam Manufacturing, processing, USD 4,000 USD 4,000 - 10 USD 1,411 VND 25,965,748 (Note 1) Second- and trading of sporting tier goods subsidiary DH Vietnam Manufacturing, processing, USD 21,600 USD 21,600 - 100 USD 15,462 ( VND 100,933,172 ) (Note 1) Second- and trading of sporting tier goods subsidiary

Fireman Cambodia Manufacturing, processing, USD 3,750 USD 3,750 - 100 USD 3,981 USD 67 (Note 1) Second- and trading of sporting tier goods subsidiary SPG Myanmar Myanmar Manufacturing, processing, USD 20,000 USD 20,000 - 100 USD 19,109 ( USD 248 ) (Note 1) Second- and trading of sporting tier goods subsidiary ASP Vietnam Manufacturing, processing, USD 7,000 USD 5,000 - 100 USD 4,613 ( VND 12,744,406 ) (Note 1) Second- and trading of sporting tier goods subsidiary SGC Cambodia Manufacturing, processing, USD 25,000 USD 25,000 - 100 USD 37,487 USD 3,138 (Note 1) Second- and trading of sporting tier goods subsidiary

Note 1: Not required to fill in. Note 2: The transactions within the Group were eliminated in the consolidated financial statements.

Sports Gear Co., Ltd., and Subsidiaries INFORMATION ON MAJOR SHAREHOLDERS December 31, 2020 Table 8

Shares Name of Major Shareholder Percentage of Number of Shares Ownership (%) MATCH SPORTS INTERNATIONAL CO LTD. 62,225,185 36 Mu Mu Sports International Limited 30,055,555 17 Lu Lu Sports International Limited 18,518,518 11 Preferred Grand Fund SPC-Stone Wall Fund Segregated Portfolio 18,518,518 11 Lesson 1 Company Limited 16,666,666 10 LAI Li-Yang 12,252,962 7

G. Financial Condition and Financial Performance Review

and Risk Analysis.

I. Financial Condition

Unit: Thousand NT$; % Year Discrepancy 2020 2019 Item Amount % Current assets 10,538,173 11,442,911 (904,738) (7.91) Property, plant, and equipment 3,686,510 4,134,722 (448,212) (10.84) Right-of-use asset 1,768,029 1,923,757 (155,728) (8.09) Intangible assets 12,652 27,060 (14,408) (53.24) Other assets 289,503 331,650 (42,147) (12.71) Total assets 16,294,867 17,860,100 (1,565,233) (8.76) Current liabilities 3,777,034 4,339,103 (562,069) (12.95) Non-current liabilities 1,735,825 2,368,133 (632,308) (26.70) Total liabilities 5,512,859 6,707,236 (1,194,377) (17.81) Share capital 1,742,606 1,742,606 - - Capital surplus 7,493,674 7,667,935 (174,261) (2.27) Retained surplus (loss not yet 2,095,518 1,860,672 234,846 12.62 made up) Other rights (549,790) (118,349) (431,441) 364.55 Non-controlling interests - - - - Total shareholder equity 10,782,008 11,152,864 (370,856) (3.33) If the change between the early and late period exceeds 20%, and the amount of change is more than NT$10 million, the main analysis and explanation are as follows: (1) The decrease in intangible assets was mainly due to the fact that fewer intangible assets were purchased in 2020 and continued to be amortized. (2) The decrease in non-current liabilities was mainly due to the decrease in long-term bank borrowing and lease liabilities-non-current amounts. (3) The decrease in other equity was mainly due to fluctuations in the exchange rate.

II. Financial Performance (I) Financial performance comparison analysis table

Unit: Thousand NT$; % Year Amount of Change ratio 2020 2019 Item change (%) Operating revenue 13,514,535 17,208,037 (3,693,502) (21.46)

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Year Amount of Change ratio 2020 2019 Item change (%) Operating costs 11,005,026 13,502,975 (2,497,949) (18.50) Gross profit 2,509,509 3,705,062 (1,195,553) (32.27) Operating expenses 1,719,791 2,096,001 (376,210) (17.95) Net profit 789,718 1,609,061 (819,343) (50.92) Non-operating revenue and (208,031) (154,558) (53,473) (34.60) (expenses) Net profit before 581,687 1,454,503 (872,816) (60.01) tax Income tax 172,580 405,917 (233,337) (57.48) expenses Net profit for the 409,107 1,048,586 (639,479) (60.98) period Other comprehensive income/losses for (431,441) (157,021) (274,420) 174.77 the current period (net, after-tax) Total comprehensive (22,334) 891,565 (913,899) (102.51) income Net profit attributable to the 409,107 1,048,586 (639,479) (60.98) parent company Net profit attributable to non- - - - - controlling interests Comprehensive profit and loss (22,334) 891,565 (913,899) (102.51) attributable to the parent company Comprehensive profit and loss - - - - attributable to non- controlling interests

If the change between the early and late period exceeds 20%, and the amount of change is

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Year Amount of Change ratio 2020 2019 Item change (%) more than NT$10 million, the main analysis and explanation are as follows: (1) The decreases in operating revenue, gross profit, and net profit were mainly due to the impact of the pandemic and the decrease in orders. (2) The increase in non-operating expenses was mainly due to the increase in foreign exchange losses. (3) The decrease in net profit before tax was mainly due to the decline in performance in 2020 resulting from the impact of the COVID-19 pandemic, which caused the decline in net profit before tax; income tax expenses fell due to the decrease in net profit before tax; net profit of the current period and net profit attributable to the parent company decreased, which was due to the decline in net profit before tax and the increase in exchange losses caused by exchange rate fluctuations. (4) Other comprehensive income (net, after-tax) was mainly caused by the currency translation difference in presentation currency and exchange differences arising from the translation of the financial statements of foreign operations. (5) The decrease in the total comprehensive income and comprehensive income attributable to the parent company was mainly due to the decline in net profit in 2020 and fluctuations in the exchange rate. (II) Expected sales volume and its basis, possible impact on the Company's future financial operations and the response plan: Overall sales revenue of the Company and its subsidiaries in 2020 will be affected by the COVID-19 pandemic. However, after the pandemic has abated and the economy recovers, major sports events will be reorganized and the public's participation in sports and leisure activities will also rise. Indirectly driven by the steady increase in the scale of the consumer market for sports shoes and apparel, the Company and its subsidiaries expect that there will be room for growth in future sales, which will drive the Company's overall consolidated revenue performance. In addition, the Company and its subsidiaries will continue to invest in development of product automation and continue to improve product quality, and continue to strengthen cooperative relationships with brand clients and thereby enhance the Company's competitive advantage.

III. Cash Flow (I) Analysis of cash flow change in most recent year Unit: Thousand NT$

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Year 2020 Item Net cash inflow (outflow) from operating 1,261,038 activities Net cash inflow (outflow) from investing (729,632) activities Net cash inflow (outflow) from financing (842,411) activities Analysis of proportion of changes: (1) Changes in net cash inflow (outflow) from business activities are mainly due to the decline in performance in 2020 resulting from the impact of the COVID-19 pandemic, which led to a decline in net profit before tax and a decrease in cash generated from joint operations. (2) Changes in net cash inflow (outflow) of capital activities were mainly due to the purchase of more machinery and equipment as a result of the adjustment of the plant's production line brand in 2019, and fewer purchases in 2020, resulting in a decrease in the purchase of real estate, plants, and equipment. (3) Changes in net cash inflow (outflow) from investing activities were mainly due to the repayment of short-term and long-term borrowings, which led to a decrease in borrowings. (II) Improvement plan for insufficient liquidity The Company expects to continue to make profits, and there is no danger of insufficient liquidity. (III) Analysis of cash liquidity for the coming year (2021) Unit: Thousand NT$

Estimated net Net cash Estimated capital Estimated Cash balance cash inflow inflow from resources for insufficient cash surplus at beginning from operating investment cash (insufficiency of period activities for the and financing Investment Financing ) amount whole year: activities plans plans 4,901,399 512,521 (210,690) 5,203,230 - - (1) Analysis of cash flow changes in the next year: Operating activities: Mainly due to cash inflows from operating profits, and net changes in accounts receivable, inventories, and payables. Investment and financing activities: Mainly due to factors such as the purchase of equipment and the increase of long-term financing for the renewal of production processes and improvement of the operational efficiency of the production line, as well as the distribution of cash dividends. (2) Remedial measures and liquidity analysis for expected cash insufficiency: There is no expected cash insufficiency, so it is not applicable.

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IV. Effect of major capital expenditures on financial operations in the most recent year

No such situation.

V. Investment policy, main causes for profits or losses, improvement plans and the investment plans for the most recent year (I) Reinvestment policy The Company's takes its own business as the core consideration for its reinvestment policy, and does not engage in industries outside of its own business. The Company has formulated the "Investment Cycle," "Regulations on the Supervision and Management of Subsidiaries," "Management Guidelines for Related-party Transactions," "Regulations Governing Financial Business Among Affiliates" and the Company's "Procedures for the Acquisition or Disposal of Assets"; relevant investment plans made in the future will be processed in accordance with the aforementioned regulations. (II) The main reason for the profit or loss of reinvestment in the most recent year, and the improvement plan Unit: Thousand NT$

Income on Direct investment Name of (indirect) recognized invested sharehol Reason for profit or loss Improvement plan by the company ding ratio Company in (%) 2020 Samoa Sports The holding company 100% 519,167 recognizes income on Not applicable Gear investment The holding company All Wells 100% 27,541 recognizes income on Not applicable investment The holding company Elephant 100% 25,262 recognizes income on Not applicable investment The holding company Fongyuan 100% 21,812 recognizes income on Not applicable investment The headquarters design plan has The Group holds land been completed. through Silk Invest for the However, due to construction of a future the impact of the headquarters, and losses COVID-19 were mainly due to Silk Invest 100% (242) pandemic, the management expenses and Company has financial costs being decided to suspend incurred while operations the construction of have not yet begun. the headquarters, and will review the 182

Income on Direct investment Name of (indirect) recognized invested sharehol Reason for profit or loss Improvement plan by the company ding ratio Company in (%) 2020 plant expansion plan when the pandemic abates. Chi Hung 100% 87,376 Good operations Not applicable All Wells 100% 33,175 Good operations Not applicable Can Sports 100% 92,728 Good operations Not applicable Cambodia Can Sports 100% 35,167 Good operations Not applicable Vietnam In line with the brand's future order Due to the second phase of scale, the the expansion of the plant, production scale the recruitment of workers will be reduced, the did not meet expectations, Dai Hoa second phase lease and the cost of educating 100% (128,364) will be cancelled, Vietnam employees for the line and development production brand and production will switching, resulting in high be concentrated on overall costs and expenses. the first phase of the plant. Accommodate with the Group's recovery of At the beginning of the inhouse work from plant construction, worker outsourcing and August Sports proficiency was poor and increase the order 100% (16,043) Vietnam the orders did not reach volume to August economic scale, leading to Sports Vietnam, in losses. order to maintain the economic scale of August Sports Vietnam. Fireman 100% 1,966 Good operations Not applicable Currently, the Company is The Group is expecting to actively build a plant in negotiating with consideration of its future the brand on the operation and production plan, development, which is still Sports Gear and continues to in the construction 100% (7,324) follow the plant (Myanmar) planning stage; expansion plan. management expenses Production is have been incurred while expected to begin operations have not yet after completion of begun. construction in 2023.

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Income on Direct investment Name of (indirect) recognized invested sharehol Reason for profit or loss Improvement plan by the company ding ratio Company in (%) 2020 Currently, the Company is actively negotiating with the brand on the production plan, but due to the impact of the The Group is expecting to COVID-19 build a plant in pandemic, the consideration of its future Company has operation and decided to suspend PT Can Sports development, which is still its expansion plan in the construction Industrial 100% (1,359) in Indonesia. planning stage; and Indonesia However, because management expenses and the acquisition of financial costs have been land is not easy, the incurred while operations land has been have not yet begun. purchased according to the original plan. The Company will re- table the plant expansion plan for review after the pandemic abates. The brand has been approved to The Group is expecting to establish a plant, build a plant in and construction is consideration of its future expected to be operation and completed by the development, which is still end of 2022. After SGP 100% (6,857) in the construction the installation of planning stage; and machinery and management expenses and equipment and marketing costs have been personnel training, incurred while operations R&D and have not yet begun. production will formally begin in the middle of 2023. (III) Investment Plans for the Coming Year: None

VI. Risk analysis (I) Effects of fluctuations in interest rate and exchange rate and inflation on the Company's finances, and future response measures 1. The impact of rate fluctuations on the Company’s profit and loss and future response measures

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The interest income of the Company and its subsidiaries is mainly due to the interest on bank deposits; the interest expenses are mainly the interest expenses resulting from financial institution borrowing and lease liabilities recognized by the effective interest method. The interest incomes of the Company and its subsidiaries in 2020 were, respectively, NT$50,578 thousand and NT$50,443 thousand, accounting for 0.29% and 0.37% of the current consolidated net operating revenue; interest expenses were, respectively, NT$136,859 thousand and NT$115,296 thousand, accounting for 0.80% and 0.85% of the current consolidated net operating revenue, indicating that fluctuations in interest rates have no significant impact on the operation of the Company and its subsidiaries. Response measures: If there is a trend of significant fluctuations in interest rates in the future, the Company and its subsidiaries will make appropriate fund utilization plans based on changes in interest rates in the financial market, assess bank borrowing rates from time to time, and strive for more favorable interest rates to achieve the maximum cost-effectiveness of funds. 2. The impact of rate fluctuations on the Company’s profit and loss and future response measures The main purchases and sales of the Company and its subsidiaries are denominated in US dollars, so the receivables and payables of purchases and sales transactions can be mutually offset, resulting in a natural hedging effect. The net exchange (profit) and loss for the Company and its subsidiaries for 2019 and 2020 were, respectively, (NT$78,246) thousand and (NT$160,264) thousand, accounting for (0.45)% and (1.19)% of the net operating revenue of the current period, indicating that the impact of fluctuations in exchange rates on the Company’s profits is still limited. Response measures: In order to avoid excessive exchange rate risks arising from exchange rate fluctuations on foreign sales and purchases, the Company adopts the following measures to deal with the impact of exchange rate fluctuations on its profits and losses: (1) Utilizing the characteristics of natural hedging, the sales revenue of the same currency is used to cover the purchase expenditure to reduce the impact of exchange rate fluctuations. (2) Financial units monitor the fluctuations in international exchange rates in real time and maintain close contact with major correspondent banks. Financial specialists continuously collect

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information about exchange rate fluctuations, endeavor to fully grasp international exchange rate trends and fluctuations, and actively respond to the impact of exchange rate fluctuations; and, to meet the Company's capital needs, conduct foreign exchange in a timely manner to reduce risk. (3) Financial units continuously collect information on fluctuations in the foreign exchange market to understand exchange rate trends, use cash flow forecasts to maintain an appropriate net foreign exchange position, and when necessary, perform forward exchange transactions, foreign exchange transactions, or currency options in accordance with the "Management Procedures for the Acquisition or Disposal of Assets" based on foreign currency positions and exchange rate fluctuations, to hedge the net foreign currency positions after natural hedging, so as to reduce the exchange rate risk generated by the Company's business operations. 3. The impact of inflation on the Company's profits and losses and future response measures Under the rapid changes in the global economic environment, the Company has not suffered a major impact on profit or loss due to inflation or deflation crises up to the printing date of the annual report. Response measures: The Company continuously pays attention to market price fluctuations and continues to maintain close and good interactions with suppliers to avoid the adverse effects of inflation on the Company's profits and losses. (II) Policies, main causes of profit or loss, and future response measures with respect to high-risk, high-leveraged investments, fund loans to others, or endorsements and guarantees, and derivatives transactions 1. Main reasons for profit or loss with respect to high-risk, high-leveraged investments and future response measures The Company has not engaged in high-risk, high-leverage investments in the most recent year and up to the printing date of the annual report. 2. The main reasons for the profit or loss with respect to fund loans to others and future response measures The Company engages in fund loans to others, mainly between the Company and its subsidiaries, or between the Company and foreign subsidiaries in which it directly or indirectly holds 100% of the voting shares,

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where there is a need for business transactions or fund needs, and it proceeds in accordance with the Company’s "Procedures for Extending Loans to Others." 3. The main reasons for profit or loss with respect to endorsements and guarantees and future response measures The Company engages in endorsements and guarantees, mainly for mutual guarantees between the Company and its subsidiaries or between bank financing accounts of subsidiaries in which 100% of the voting rights are held directly or indirectly; endorsements and guarantees are handled in accordance with the relevant provisions of the Company's "Procedures for Endorsements and Guarantees.” 4. Policy for engaging in derivative commodity trading, main reasons for profit or loss, and future response measures The Company has not engaged in derivative commodity trading investments in the most recent year and up to the printing date of the annual report. (III) Future R&D plans and estimated R&D expenses The Company’s R&D unit is led by the Samoa Sports Gear Taiwan Branch, with support from Chi Hung, Can Sports Vietnam, Dai Hoa Vietnam, August Sports Vietnam, and SGP. The Company and its subsidiaries invested NT$404,900 thousand in R&D in 2020. In addition to the Company and its subsidiaries’ R&D units developing new shoe models, mold development, and sample trial production testing, the Company and its subsidiaries actively engage in technological innovation and enhancement of production processes. Future R&D plans include new direct injection technologies and new product development, automation of production processes, establishment of an online real-time inspection record system, a high-speed visual point cloud identification and inspection system, and a cloud control management system. (IV) The impact of important domestic and foreign policy and legal changes on the Company's financial business and response measures The Company's execution of its various businesses is in accordance with the laws and regulations and related policies of the countries of registration and the countries of main operation; it continuously pays attention to changes and development trends; and it immediately responds to changes in the market environment and takes appropriate response measures. Important domestic and foreign policies and legal changes have not had a significant impact on the Company's finances or business in the most recent year and up to the printing date of the annual report.

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(V) The impact of technological changes and industrial changes on the Company's financial business and response measures The Company continuously pays attention to the technologies, developments, and updates related to the industry in which it operates, and quickly grasps industry dynamics; it continuously improves its production capacity, evaluates the impact of production capacity on the Company's operations, and understands technological or industrial changes in a timely manner to adjust its developmental direction. Technological changes and industrial changes have not had a significant impact on the Company's financial business in the most recent year and up to the printing date of the annual report. (VI) The impact of changes to the corporate image on corporate crisis management and response measures The Company adheres to the philosophy of honesty, trust, and sustainable management. Since its establishment, it has focused on its business operations. It has a good corporate image, abides by relevant laws and regulations, and continues to maintain its good corporate image. There has been no change in its corporate image or corporate crisis management in the most recent year and up to the printing date of the annual report. (VII) Expected benefits, possible risks, and response measures with respect to mergers and acquisitions As of the printing date of the annual report, there is no plan to acquire other companies. If there is a plan for merger and acquisition in the future, the Company will assess the plan with caution and fully consider the synergies of the merger to truly protect shareholder equity. (VIII) Expected benefits, possible risks and response measures with respect to plant expansion The Company communicated with major brands before plant expansion, and after reaching a preliminary consensus, it worked out a three-to-five-year plant expansion plan and future production plan. The Company plans to add an S3 plant in the Can Sports Cambodia plant and an additional footwear plant through the Myanmar subsidiary Sports Gear (Myanmar) since the current production plant of Group A reached full capacity in 2019; and to meet the supply needs brought about by future expansion of the plant, the Company established subsidiary Fireman in Cambodia and plans to build an outsole production plant to cope with the outsole demand brought about by future expansion of the plant, and to improve product quality and management efficiency through self-production; the Company also plans to establish a

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subsidiary SGP in Portugal and build a research and development center to engage in the development and R&D of B Group brand footwear products and production process research; and establish a B Group footwear plant through the Indonesian subsidiary PT Can Sports Industrial Indonesia. In addition to the above-mentioned plant expansion plan for which a consensus was reached with the major brand manufacturers, the Company also plans to build a headquarters through its subsidiary Silk Invest. However, due to the impact of the COVID-19 pandemic, the Company has decided to suspend its headquarters construction and expansion plan in the Group B footwear plant. However, because the acquisition of land is not easy, the land has been purchased according to the original plan. The Company will re-table the Silk Invest and Indonesia's plant expansion plan for review after the pandemic abates, and the follow-up of the plant expansion will be discussed with brand clients. If, after evaluation, it is decided to re-start the plant expansion plan, the plant expansion plan and investment evaluation report will be drawn up in accordance with internal procedures, and then approved in accordance with proper authorization and the approval of the Board of Directors before implementation. The Company is currently carrying out expansion plans for the Can Sports Cambodia S3 plant, Sports Gear (Myanmar) plant, SGP R&D center, and Fireman outsole plant. The Can Sports Cambodia S3 plant is expected to be completed by the end of 2020. Depending on orders, it is expected to be put into mass production in 2021. The Sports Gear (Myanmar) plant and Fireman outsole plant are continuing to follow the plant expansion plan and are expected to go into production after completion in 2023. The SGP R&D center is expected to be completed by the end of 2022. After the installation of machinery and equipment and training of personnel, it will formally go into production in the middle of 2023. The Company currently has no major risks in plant expansion. It is expected that investment in the expansion will help expand the Company's capacity and improve flexibility in scheduling, as well as increase the Company's operating scale and competitiveness. (IX) Risks and response measures with respect to concentration in purchases or sales 1. Sales In both 2019 and 2020, the Company and its subsidiaries sold more than 30% of the net revenue for each period to a single client of Group A. This is mainly due to the Company's cooperation with the Group A brand client for more than 20 years, and because the brand client has approved of the quality

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of the products produced by the Company. And as the performance of the Group A brand clients has grown, so has its demand for Company’s products, resulting in concentrated sales. In addition to retaining its existing clients, the Company maintains good cooperative relationships with clients, and adjusts the product lines of each plant in response to trends of various brands around the world, leading to changes in order amounts from each brand and reduction in the risk of the Company's sales being concentration on a single client. 2. Purchases In the most recent year and up to the printing date of the annual report, there has not been a situation for the Company or its subsidiaries where supply has reached 30% or more from a single supplier, so there is no risk of concentration of purchases. (X) The impact, risks, and response measures of the Company where there are massive transfers or replacements of shares with respect to the directors, supervisors, or major shareholders holding more than 10% of shares Up to the printing date of the annual report, the Company’s directors or major shareholders holding more than 10% of the shares have not had a major transfer or replacement of equity that affects the Company’s operations. (XI) The impact, risks, and response measures of the change of operation rights on the Company Up to the printing date of the annual report, the Company has no changes to operation rights that affect the Company's operations. (XII) Litigation or non-litigation events in which the Company, its directors, supervisors, presidents, substantial persons-in-charge, major shareholders holding more than 10% of shares, or subordinate companies are involved that have been determined by verdict of the court or are still pending in a major litigation, non-litigation, or administrative litigation, the outcome of which may have a significant impact on shareholder equity or securities prices There are no major litigations, non-litigations or administrative litigations in which the Company, its directors, presidents, substantive persons in charge, major shareholders holding more than 10% of the shares, or subordinate companies are involved. (XIII) Other important risks and response measures 1. Risk from Pandemic Since December 2019, the novel coronavirus (COVID-19) pandemic has continued to spread around the world, China's economy

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being the first to bear the brunt of the impact. The virus has successively affected countries around the world, putting heavy pressure on global economic growth in 2020. The impact of the pandemic has also caused many big sporting events to cancel or delay. In addition, since the outbreak of the virus, sports brand stores in China, the core stores of the global sports brands consumer market, have been closed. Immediately after those closures, the pandemic began to intensify in Europe and the United States in March 2020, forcing many large-scale European and American markets to suspend operation of retail channels and many brand owners to postpone the launch date of new shoes, curbing consumption in the sneaker market, and dragging down the performance of the sports industry. Response measures: The Company and its subsidiaries still actively maintain good relationships with clients, continue to track subsequent changes in the overall sports industry, and closely contact clients and suppliers to understand order requirements and raw material supply status. The Company and its subsidiaries continue to cooperate in the subsequent development of products in response to client needs. As the pandemic abates throughout Europe and America, sports events have gradually been resumed, and the global sports footwear and apparel market is expected to gradually recover. 2. Risks in protection of shareholders' equity There exist many discrepancies between the laws and regulations in the Cayman Islands and the Company Act of the Republic of China. Although the Company has revised its Articles of Incorporation in accordance with the "Checklist for the Protection of Shareholder Equity in the Place of Registration of Foreign Issuers" stipulated by the Taiwan Stock Exchange, there still exist many discrepancies in the standards of company operation between the laws of the two places, and investors still need to understand and consult experts on differences in the protection of shareholders' equity in the investment of Cayman Islands companies. 3. The overall economy, political-economic environment, foreign exchange, and legal risks The Company is registered in the Cayman Islands, and its main operating locations are Samoa, British Virgin Islands, Seychelles, Vietnam, Cambodia, and Taiwan. Explain the risks of changes in the

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overall economic and political environment and foreign exchange fluctuations. The foreign issuing company should state in detail the risk measures related to the general economy, political and economic environment changes, foreign exchange controls, taxation and related laws and regulations of the country where the foreign issuing company is registered and the main countries in which it is operated, and whether those countries recognize the validity of the civil judgments of the courts of Taiwan. In addition, it should explain the response measures taken. 4. Company’s management team faced the challenge of becoming a listed company for the first time The Company’s management have ample experience in the operation of the industry. However, after becoming listed, they will still need to face the external investment public and professional investment institutions, and foreign companies must also adapt to and understand the laws and regulations of Taiwan. Part of the management focus will be on maintaining investor relations and becoming and remaining familiar with the relevant provisions of securities laws and regulations in Taiwan. In order to prevent this from distracting management from the operation of the industry, the Company has successively recruited qualified personnel required by each operating base before applying for listing and has formed an excellent staff team, which will be a strong support for the management and which will help meet the challenges of its becoming a listed company. The Company has also commissioned accountants, lawyers, securities dealers, and other professionals to provide guidance and consultation to the Company, and to enhance by a certain degree the Company’s understanding of the relevant laws and regulations in Taiwan, so that the Company will be better able to cope with the challenges of becoming a listed company. VII. Other important matters: None

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H. Special records I. Affiliate information (I) Affiliate diagram Date: February 26, 2021

Sports Gear Co., Ltd. Date of establishment: March 2017 Registration: The British Cayman Islands

100% 100% 100% 100%

Sports Gear Co., Ltd. All Wells International Co., Ltd. Fongyuan International Co., Ltd. Elephant Step Co., Ltd. Date of establishment: April 2017 Date of establishment: June 2000 Date of establishment: October Date of establishment: June 2011 Registration: Samoa Registration: The British Virgin 2006 Registration: Seychelles Il d R i i S h ll

100% 100% 100% 100% 100% 100% 100% 100% 100% 100%

10% 90% 10% 90%

Sports Gear Co., Silk Invest Fireman Factory Sports Gear August Sports Chi Hung Co., Can Sports Dai Hoa Co., All Wells PT Can Sports Can Sports SGP Sports Ltd. Taiwan International Co., Co., Ltd. (Myanmar) Co., Ltd. Ltd. Shoes Co., Ltd. Ltd. International Industrial Vietnam Co., Gear Portugal, Branch Ltd. Date of Co., Ltd Date of Date of Date of Date of Co., Ltd. Indonesia Ltd. S.A. Date of Date of establishment: Date of establishment: establishment: establishment: establishment: Date of Date of Date of Date of establishment: June establishment: August 2016 establishment: January 2018 August 2000 December 2009 April 2011 establishment: establishment: establishment: establishment: 2017 October 2018 Registration: February 2018 Registration: Registration: Registration: Registration: January 2005 October 2019 April 2011 June 2019 Registration: Registration: Cambodia (Note) Registration: Vietnam Vietnam Cambodia Vietnam Registration: Registration: Registration: Registration: Republic of China Republic of China Myanmar (Note) Vietnam Indonesia (Note) Vietnam Portugal (Note)

Note: In order to continue to expand its domain and expand its production capacity, the Group is currently expanding its Fireman and Sports Gear (Myanmar) plants, SGP is setting up a research and development center, and PT Can Sports Industrial Indonesia is planning to expand its plant.

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(II) Basic Information of Each Affiliate

December 31, 2020;Unit: Thousand US$ Date of Company Name Location Paid-in capital Main business establishment Sports Gear Co., International April 2017 Samoa 5,036 Ltd. investment business All Wells The British Virgin International International Co., June 2000 12,500 Islands investment business Ltd. Elephant Step Co., International June 2011 Seychelles 43,000 Ltd. investment business Fongyuan International International Co., October 2006 Seychelles 31,850 investment business Ltd Silk Invest General investment International Co., October 2018 Republic of China 6,482 Ltd. business Manufacturing, processing, and Chi Hung Co., Ltd. August 2000 Vietnam 12,700 trading of sporting goods Manufacturing, All Wells processing, and International Co., January 2005 Vietnam 40,000 Ltd. trading of sporting goods Manufacturing, Can Sports Shoes processing, and December 2009 Cambodia 25,000 Co., Ltd. trading of sporting goods Manufacturing, Can Sports Vietnam processing, and April 2011 Vietnam 56,000 Co., Ltd. trading of sporting goods Manufacturing, processing, and Dai Hoa Co., Ltd. April 2011 Vietnam 21,600 trading of sporting goods Manufacturing, August Sports Co., processing, and January 2018 Vietnam 7,000 Ltd. trading of sporting goods

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Date of Company Name Location Paid-in capital Main business establishment Manufacturing, Fireman Factory processing, and August 2016 Cambodia 3,750 Co., Ltd. trading of sporting goods Manufacturing, Sports Gear processing, and (Myanmar) February 2018 Myanmar 20,000 Co., Ltd (SPG) trading of sporting goods Manufacturing, PT Can Sports processing, and Industrial October 2019 Indonesia 2,500 trading of sporting Indonesia(SPG) goods SGP Sports Gear Sporting Goods June 2019 Portugal 54 Portugal, S.A. Research Center

(III) The information of identical shareholders presumed to have control and subsidiary relationship: Not applicable. (IV) Overall industries covered by the business of affiliates: 1. Industry: Footwear production, sales and reinvestment, and other related businesses 2. Other: Distribution agency business, etc. For the main business or production items of each affiliate, refer to (2) Overview of Basic Information of Each Affiliate for details. (V) Information on directors, supervisors, and presidents of affiliates Shareholding Name or Company Name Title Number of shares representative Shareholding ratio (shares) Sports Gear Co., Wei-Chia Director - - Ltd. Chen Sports Gear Co., Wei-Chia Manager - - Ltd. Taiwan Branch Chen All Wells Wei-Chia International Co., Director - - Chen Ltd. Elephant Step Co., Wei-Chia Director - - Ltd. Chen Fongyuan Wei-Chia International Co., Director - - Chen Ltd Silk Invest Wei-Chia International Co., Director - - Ltd. Chen Wei-Chia Chi Hung Co., Ltd. Director - - Chen

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Shareholding Name or Company Name Title Number of shares representative Shareholding ratio (shares) Supervisor An-De Wu - - Wei-Chia Director - - All Wells Chen International Co., Ltd. Vice President Jack Wang - - Supervisor An-De Wu Wei-Chia Director - - Can Sports Shoes Chen Co., Ltd. Director and Vice Nick Lin - - President Wei-Chia Can Sports Vietnam Director - - Chen Co., Ltd. Supervisor An-De Wu - - Wei-Chia Director - - Chen Michael Dai Hoa Co., Ltd. Director Huang Director Stella Chang Director Nick Lin Wei-Chia Director - - August Sports Co., Chen Ltd. Michael Director Huang Wei-Chia Fireman Factory Director - - Chen Co., Ltd. Director Nick Lin Wei-Chia Director - - Sports Gear Chen (Myanmar) Co., Ltd (SPG) Michael Director - - Huang Director Jack Wang - - PT Can Sports Director Suartin Industrial Director Danis Chang Indonesia(SPG) Wei-Chia Supervisor Chen SGP Sports Gear Wei-Chia Director - - Portugal, S.A. Chen

196 (VI) Overview of operations of affiliates Unit: Except for the capital amount in thousands of U.S. dollars (US$), the rest is in thousands of New Taiwan dollars (NT$) Net Paid-in Total Total Operating Operating income Company Name Net worth capital assets liabilities revenue profit (loss) (after tax)

Sports Gear Co., Ltd. 5,036 8,895,692 2,916,741 5,978,951 15,703,300 737,662 520,648 All Wells International Co., Ltd. 12,500 3,928,380 672,259 3,256,121 0 (172) 21,812 Elephant Step Co., Ltd. 43,000 1,238,010 5 1,238,005 0 (109) 25,262 Fongyuan International Co., Ltd 31,850 386,312 57,054 329,258 0 (93) 27,541 Silk Invest International 626,288 441,145 185,143 0 (1,217) (7,169) Co., Ltd. 6,482

Chi Hung Co., Ltd. 12,700 2,168,116 758,502 1,409,614 3,927,942 86,736 87,374 All Wells International 1,061,173 659,334 Co., Ltd. 40,000 401,839 1,322,801 56,054 33,170 Can Sports Shoes Co., 2,731,271 1,663,642 Ltd. 25,000 1,067,629 3,956,207 137,158 92,728 Can Sports Vietnam Co., 2,134,772 960,360 Ltd. 56,000 1,174,412 2,545,882 70,969 35,131

Dai Hoa Co., Ltd. 21,600 1,806,781 1,366,445 440,336 1,264,787 (129,311) (128,340)

August Sports Co., Ltd. 7,000 245,839 114,453 131,386 29,999 (10,111) (16,039) Fireman Factory 115,481 2,097 Co., Ltd. 3,750 113,384 0 (264) 1,966 Sports Gear (Myanmar) 20,000 544,373 142 544,231 0 (10,042) (7,324) Co., Ltd (SPG) PT Can Sports Industrial Indonesia(SPG) 2,500 96,099 28,625 67,474 0 (5,056) (1,359) SGP Sports Gear 54 89,163 95,570 (6,407) 0 (14,979) (7,740) Portugal, S.A. (VII) Consolidated financial and business statements of affiliates: Same as the consolidated financial statements; see pages 123 to 191. II. In the most recent year and up to the printing date of the annual report, the status of private placement securities: No such situation. III. Status of holding or disposing of the Company’s stocks by subsidiaries in the most recent year and up to the printing date of the annual report: No such situation. IV. Other necessary supplementary explanations: No such situation.

(VIII) Matters that have significantly affected

shareholders' equity and prices of securities pursuant

to Article 36, Paragraph 2, Subparagraph 2 of the

Securities and 197

Exchange Act in the most recent year and up to the printing date of the annual report: None

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J. Significant discrepancies with Taiwan’s provisions on the protection of shareholder equity The related laws Relevant regulations of Important Matters for the and regulations of company law of the country Reasons and explanations for Protection of Shareholder the “Company where the foreign issuer is discrepancies Equity Act” or “Securities registered and Exchange Act” A. The formation and change of company capital 1. The Company may not cancel its Article 168 of the 1. Article 14 of Cayman Islands Article 15(a), 47(a)(xii), and Article 59 of shares unless it reduces its capital Company Act company law allows a company the Company's Articles of Incorporation in accordance with the resolution to reduce its issued capital, but stipulate that the Company may reduce its of the shareholders' meeting; in only after a special resolution of capital after a special resolution of the which case, the reduction of the shareholders’ meeting and shareholders’ meeting. However, it is still capital shall be based on the confirmation by a Cayman slightly different from the Important proportion of shares held by the court. Matters for the Protection of Shareholder shareholders. 2. Except for Article 14 of Cayman Equity listed in the preceding. According 2. When the Company reduces its Islands company law, the issued to the provisions of Cayman Islands capital, it can return the share capital of a company can only be company law, the reduction of issued money with property other than cancelled when the Company shares must go through the process of cash; the property returned and the purchases, returns, or recovers share buy-back before cancelation, and amount of the offset shall be the issued capital in accordance the company does not have the unilateral resolved by the shareholders' with the provisions of Article 37 right to cancel shares still held by

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The related laws Relevant regulations of Important Matters for the and regulations of company law of the country Reasons and explanations for Protection of Shareholder the “Company where the foreign issuer is discrepancies Equity Act” or “Securities registered and Exchange Act” stock option certificates. option contracts or procedures for accordance with the Important Matters 2. Employee stock option issuing employee stock option for the Protection of Shareholder Equity, certificates may not be certificates. if there is an intent to transfer employee transferred, however this does not subscription rights, it must be stipulated apply for inheritors. in the employee stock option contract or employee stock option certificate. B. Convening and Resolution Method for Shareholders' Meetings 1. The annual shareholders' meeting 1. Article 170 of the 1. Except for exempted The Company is an exempted company must be convened at least once a Company Act companies, the Company under Cayman law. Although it is not year; it shall be convened within 2. Article 172-1 of the shall hold a shareholders’ necessary to hold a general shareholders' six months after the end of each Company Act meeting at least once a year meeting according to Cayman Islands fiscal year. The shareholders’ 3. Article 173, (Article 58). company law, it is stipulated in Article 38 meeting shall be convened by the Paragraph 1 and 2. Unless otherwise provided in of the Articles of Incorporation: "The Board of Directors. Paragraph 2; the Articles of Incorporation, Company shall have its Board of 2. The shareholders' meeting shall Article 173-1 of the the notice of convening the Directors convene an annual be held in the territory of the Company Act shareholders' meeting shall shareholders' meeting within six months Republic of China. If the 4. Article 172 of the be delivered to all after the end of each fiscal year, and shall

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The related laws Relevant regulations of Important Matters for the and regulations of company law of the country Reasons and explanations for Protection of Shareholder the “Company where the foreign issuer is discrepancies Equity Act” or “Securities registered and Exchange Act” shareholders' meeting is held Company Act; shareholders five days in specify in the meeting notice that the outside the Republic of China, the Article 26-1 and advance; shareholders' meeting is an annual shareholders' reporting to the stock exchange Article 43-6 of the meetings may be convened meeting." shall be performed within two Securities and with the attendance of three Other matters are stipulated in Articles days after the resolution of the Exchange Act shareholders; the 39, 40, 43, and 51 of the Company's Board of Directors or from the shareholders' meeting may be Articles of Incorporation. shareholders obtaining chaired by the person However, there are slight discrepancies permission from the competent selected by the shareholders between Article 40 of the Company’s authority to convene the meeting. in attendance (Article 61). Articles of Incorporation and the 3. Shareholders who hold more than 3. The Company may adopt the Important Matters for the Protection of one percent of the total number of provisions of Schedule A to Shareholder Equity listed in the issued shares may submit explicitly require the preceding, which are explained below: proposals to the Company for an convening of the annual According to the TWSE Letter No. annual shareholders' meeting in shareholders' meeting in its 0991701319 dated April 13, 2010: writing or electronically. Except Articles of Incorporation; the "Description: 2. (3) While not where the item in question is not shareholders’ meeting may be contravening the laws and regulations of a resolution obtained by the convened by the Board of the place of registration, the foreign

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The related laws Relevant regulations of Important Matters for the and regulations of company law of the country Reasons and explanations for Protection of Shareholder the “Company where the foreign issuer is discrepancies Equity Act” or “Securities registered and Exchange Act” shareholders’ meeting, the Directors, or shareholders issuer shall stipulate in its articles of proposing shareholder’s may request the Board of incorporation the right of minority shareholding has not reached 1%, Directors to convene in shareholders to request the convening of the item is proposed outside the writing in accordance with an extraordinary shareholders’ meeting, announced acceptance period, the the method prescribed in the and the part authorizing the competent item exceeds 300 words, or the Articles of Incorporation authority to convene should be deleted." items exceed one in number, the (Article 22 (1); Article 38 of Therefore, Article 40 of the Company's Board of Directors shall classify it Schedule A ). Articles of Incorporation stipulates: “...If as a proposal. Where a 4. Except as otherwise provided the Board of Directors fails to make shareholder proposal is a in the Company's Articles of notification of the extraordinary suggestion to urge the Company Incorporation, a shareholder shareholders’ meeting within fifteen days to promote the public interest or meeting may be convened after the aforementioned shareholder's fulfill its social responsibilities, when one shareholder is in request, the shareholder who made the the Board of Directors may still attendance (Article 57). request may convene the extraordinary include it in the proposal. 5. There are no similar shareholders’ meeting at its own 4. Shareholders holding more than provisions in Cayman Islands discretion in accordance with the 3% of the total issued shares for company law regarding the Company Act for public offerings.” The

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The related laws Relevant regulations of Important Matters for the and regulations of company law of the country Reasons and explanations for Protection of Shareholder the “Company where the foreign issuer is discrepancies Equity Act” or “Securities registered and Exchange Act” that May Use Electronic Voting" provisions of Schedule A and have entrusted the chairman of that promulgated by the competent stipulate the relevant provisions meeting as their agent." Although securities authority of the of the power of attorney in Cayman law holds that shareholders who Republic of China as well as for shareholders’ meetings in the exercise their voting rights in this way primary listed companies whose Articles of Incorporation will not be deemed as attending the shares are newly listed. (Article 22, Article 59, Article shareholders' meeting in person, the 2. If the Company holds a 60 of Schedule A). shareholder substantially has the right to shareholders’ meeting outside of exercise all the rights of shareholders the borders of the Republic of with voting rights in writing or China, it shall provide that electronically in accordance with the laws shareholders can exercise their of the Republic of China, thus there voting rights in writing or should be no adverse impact on the equity electronically. of the Company's shareholders. 3. The Company must state in its shareholders' meeting notice the methods through which shareholders may exercise voting

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The related laws Relevant regulations of Important Matters for the and regulations of company law of the country Reasons and explanations for Protection of Shareholder the “Company where the foreign issuer is discrepancies Equity Act” or “Securities registered and Exchange Act” the Company's shareholder equity. The following proposals involving 1. Article 185 of the 1. Cayman Islands company law 1. Article 2 of the Company's Articles of major shareholder equity must be Company Act stipulates in Article 60 that a Incorporation provides a definition of raised at a meeting attended by 2. Article 277 of the special resolution refers to (1) a supermajority resolution, which shareholders representing more than Company Act Where a vote is taken at a refers to (i) a resolution passed by two-thirds of the total number of 3. Article 159 of the shareholders’ meeting, the shareholders representing two-thirds issued shares, and may only be Company Act shareholders with voting or more of the total issued shares of approved by a majority of the voting 4. Article 240 of the rights at the shareholders’ the Company at the shareholders’ rights of the shareholders in Company Act meeting shall, in person or meeting, and more than half of the attendance. If the total number of 5. Article 316 of the through an agent (if permitted) voting rights of the shareholders shares of the shareholders in Company Act reach a resolution with a present; or (ii) where the total number attendance is less than the majority of at least two-thirds of shares represented by the aforementioned quota, approval may of the voting rights of the shareholders attending the be obtained by the shareholders in shareholders in attendance at shareholders’ meeting is less than attendance representing more than the Company’s shareholders’ two-thirds of the total issued shares of half of the total number of issued meeting (the meeting notice the Company but exceeds half of the shares and more than two-thirds of states that the proposal is to be total issued shares of the Company,

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The related laws Relevant regulations of Important Matters for the and regulations of company law of the country Reasons and explanations for Protection of Shareholder the “Company where the foreign issuer is discrepancies Equity Act” or “Securities registered and Exchange Act” the voting rights of the shareholders passed as a special resolution). the shareholders' meeting shall in attendance: The Company may, in its express its approval for a resolution 1. The Company concludes, Articles of Incorporation, by two-thirds or more of the voting changes, or terminates the lease depending on the importance rights of the shareholders in of the entire business; of the matter, set a higher attendance at the meeting. commissions business or regular number of votes than the (Shareholders who have attended but joint business contract with special resolution stipulated in have not exercised their voting rights others, transfers of the whole or Cayman Islands company law; will be deemed to have abstained any essential part of the or (2) if the Articles of from exercising their voting rights, Company's business or assets; or Incorporation clearly provide but they will still be counted in the acceptance of the transfer of as such, the special resolution number of voting rights in attendance another complete business or may also be signed-off and at the meeting.) assets that has significant impact approved in writing by all 2. The Company has listed the on the business operation of the shareholders with voting preceding regulations in Article 60 of Company. rights. the Articles of Incorporation, and 2. Change to the Articles of 2. According to the provisions of shall obtain the approval by Incorporation Cayman Islands company law, supermajority resolution of the

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The related laws Relevant regulations of Important Matters for the and regulations of company law of the country Reasons and explanations for Protection of Shareholder the “Company where the foreign issuer is discrepancies Equity Act” or “Securities registered and Exchange Act” 3. If the amendment to the articles of the following matters are shareholders. In addition, changes to incorporation damages the rights subject to special resolutions: the Articles of Incorporation and of the shareholders of preferred (1) Change of company mergers in accordance with Cayman shares, a resolution of the name (Article 31);(2) Islands company law are made in shareholders’ meeting of the Amendment to the accordance with a special resolution preferred shares shall also be Memorandum of as stipulated in Article 59 of the required. Incorporation (Article 10);(3) Company’s Articles of Incorporation. 4. Distribution of all or part of Amendment to the Articles of 3. Explanation on the number of votes dividends and bonuses by issuing Incorporation (Article 24);(4) on the relevant proposals of the new shares Reduction of capital (Article shareholders’ meeting: According to 5. Resolution of dissolution, merger, 14);(5) Dissolved the provisions of Cayman Islands or demerger voluntarily by a special company law and items that are resolution where it is not subject to special resolutions in because the Company cannot accordance with Cayman Islands pay off its debts at maturity company law, the shareholders shall (Article 116(c)); (6) Merger make special resolutions in under Cayman Islands accordance with the Articles of

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The related laws Relevant regulations of Important Matters for the and regulations of company law of the country Reasons and explanations for Protection of Shareholder the “Company where the foreign issuer is discrepancies Equity Act” or “Securities registered and Exchange Act” shareholder equity. 1. The directors of the Company Article 8, Paragraph 2 1. Cayman Islands company law Article 104 of the Company’s Articles of shall conduct business in good and Paragraph 3; does not specify the obligations Incorporation stipulates that when a faith and exercise the due care of Article 23, Paragraph of directors. According to the director of the Company conducts a good administrator, and shall be 3 of the Company Act common law principles business operations, if a violation of a law held liable if there is a violation applicable in the Cayman or order causes the Company to be liable that causes damages to the Islands, directors shall bear (1) for any compensation or damages to any Company. If the act is done by fiduciary duties and (2) duty of person, that director shall be liable for oneself or another, the care. The Company may joint and several compensation for shareholders' meeting may decide request compensation from damages with the Company; and if for to treat the proceeds of the act as directors who violate the any reason the director is not required to the Company’s income. above-mentioned obligations. be jointly and severally liable for 2. The directors of the Company In addition, if a director violates compensation with the Company, that shall be jointly and severally the obligations and benefits as a director shall compensate the Company liable for compensation to others result, the Company may for the losses suffered by the Company as if they cause damages to others by attribute such benefits to the a result of the breach of responsibilities. violating the law in the execution Company. However, under the principles of Cayman

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The related laws Relevant regulations of Important Matters for the and regulations of company law of the country Reasons and explanations for Protection of Shareholder the “Company where the foreign issuer is discrepancies Equity Act” or “Securities registered and Exchange Act” of the Company's business. 2. According to the principles of laws and orders and common law, the 3. The managers and supervisors of common law, the actions third party may not necessarily have a the Company shall have the same performed by the directors in basis for the claim against the director, liability for damages as the the course of managing the but can directly appeal for compensation, directors of the Company within business of the Company on even if the Company’s Articles of the scope of the performance of behalf of the Company will be Incorporation stipulate that the director their duties. regarded as the Company's own shall be jointly and severally liable to actions. If the actions cause others; and liability for compensation damage to any third party, the cannot be used to create a basis for the Company and not the director claim. In addition, although Article 104 of shall be held responsible to the the Company's Articles of Incorporation third party for its actions. A have stipulated that this obligation is also third party requesting applicable to managers, if there is an compensation for damages may intent to implement protection of not make a request in shareholders' equity as a responsibility of accordance with the Company's this department for managers, the Articles of Incorporation. Company and the managers should

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