Stock Code : 2542 Printed on April 13, 2020 The Annual Report is available at http://mops.twse.com.tw/ https://www.highwealth.com.tw/ Dream City, Taichung HighwealthHighwealth CConstructiononstruction CorporationCorporation 2019 Annual Report I.Spokesperson Deputy Spokesperson Name：Liao-Zhaoxiong Name：Wang-Suyue Title：Development Dept. Vice President Title：Finance Dept. Vice President Tel：(02)2755-5899 Tel：(02)2755-5899 E-mail：[email protected] E-mail：[email protected] II.Headquarters and Branches Headquarters Address：10F., No.267, Lequn 2nd Rd., Zhongshan Dist., Taipei Tel：(02)2755-5899 Taichung Branches Address：25F., No.213, Chaofu Rd., Xitun Dist., Taichung Tel：(04)2252-6886 Kaohsiung Branches Address：19F., No.1507-1, Yucheng Rd., Gushan Dist., Kaohsiung Tel：(07)552-6199 III.Stock Transfer Agent Name：Registrar Agency Department of Capital Securities Corporation Address：B2, No.97, Sec.2, Dunhua S. Rd., Da’an Dist., Taipei Tel：(02)2702-5000 Website：http://www.capital.com.tw/agency/ IV.Auditors in the most recent year KPMG Auditors：Jian-Dinuan；Zeng-Guoyang Address：68F, Taipei 101 Tower, No. 7, Sec. 5, Xinyi Road, Taipei Tel：(02)8101-6666 Website：http://www.kpmg.com.tw V.Overseas Securities Exchange N/A VI.Corporate Webisite http://www.highwealth.com.tw Table of Contents Page I. Letter to the Shareholders ............................................................................................................. 1 II.Company Profile ............................................................................................................................ 8 1. Date of Establishment ............................................................................................................. 8 2. Company History ............................................................................................................8 III. Corporate Governance Report .................................................................................................. 11 1.Company Organization .................................................................................................... 11 2. Information of directors, supervisors, president, vice presidents, associates, department and branch directors ..................................................................................... 14 3. Remuneration of Directors, Supervisors, President, and Vice Presidents in latest year .................................................................................................................................. 20 4. Implementation of Corporate Governance ...................................................................... 26 5. Accountant Public Fee Information ................................................................................ 64 6. Accountant Replacement Information ............................................................................ 64 7. The company's chairman, president, manager of financial or accounting affairs, has worked in the accountant's affiliated firm or its related business in the past year .................................................................................................................................. 64 8. In most recent year and as of the end of this annual report is printed out, the directors, supervisors, managers and shareholders holding more than 10% of the equity transfer and equity pledge changes ................................................................ 65 9. Information of shareholders who hold the top ten shareholdings, who are related to each other or relatives within the relationship of spouse, and second degree kinship ................................................................................................................. 66 10. The number of shares held by the company, the company's directors, supervisors, managers and the company directly or indirectly controlled by the company in the same investment business, and combined to calculate the comprehensive shareholding ratio................................................................................... 68 IV. Capital Overview ............................................................................................................. 69 1. Capital and Shares ....................................................................................................... 69 2. Corporate Bonds .......................................................................................................... 75 3. Preferred Shares .......................................................................................................... 77 4. Overseas Depositary Receipts ..................................................................................... 77 Highwealth Construction 5. Employee Stock Options ............................................................................................. 77 6. New Shares Issuance in Connection with Mergers and Acquisitions ......................... 77 7. Financing Plans and Implementation .......................................................................... 77 V. Operational Highlights ..................................................................................................... 78 1. Business Activities ...................................................................................................... 78 2. Market and Sales Overview ........................................................................................ 83 3. Human Resources Information in the Last Two Years ................................................ 93 4. Environmental Protection Expenditure ....................................................................... 93 5. Labor Relations ........................................................................................................... 94 6. Important Contracts ..................................................................................................... 98 VI. Financial Profile .............................................................................................................. 99 1. Condensed Balance Sheet, Consolidated Income Statement and Audit Opinion in the Past Five Years ..................................................................................... 99 2. Financial Analysis in the Past Five Years .................................................................... 103 3. Audit Committee’s Review Report of the Latest Financial Report ............................. 108 4. Latest Financial Report ............................................................................................... 109 5. Lastest Financial Statements of the Audited and Certified by CPAs .......................... 194 6. If the Company and Its Affiliates Encounter Any Financial Difficulties in the Past Year and as of the Date of Publication of the Annual Report, the Impact on the Company's Financial Status Shall Be Listed ..................................................... 268 VII. Review and Analysis of Financial Status and Business Results and Risk Management ................................................................................................................... 269 1. Financial Status ........................................................................................................... 269 2. Financial Performance ................................................................................................. 270 3. Cash Flow .................................................................................................................... 271 4. Impact of Major Capital Expenditure in the Past Year on the Financial Status .......... 272 5. Re-investment Policy in the Past Year, the Main Reason for Its Profit or Loss, the Improvement Plan and Investment Plan in the Next Year...................................... 272 6. Analysis and Assessment of Risk Issues in the Past Year and as of the Date of Publication of the Annual Report ................................................................................. 273 7. Other Important Matters .............................................................................................. 277 Table of Contents VIII. Special Notes ................................................................................................................. 278 1. Information about the Company’s Affiliates ............................................................... 284 2. Private Securities in the Past Year and as of the Date of Publication of the Annual Report .............................................................................................................. 284 3. Holding or Disposal of the Company’s Shares by Affiliates in the Past Year and as of the Date of Publication of the Annual Report ............................................... 284 4. Other Necessary Supplementary Notes ....................................................................... 284 5. Matters in the Past Year and as of the Date of Publication of the Annual Report Which Have a Substantial Impact on Owner’s Equity as Stipulated in Item 2, Paragraph 3 of Article 36 of the Securities Exchange Law ............................. 284 Letter to the Shareholders I Letter to the Shareholders Hello, ladies and gentlemen, On behalf of all my colleagues in Highwealth Construction Corporation, I would like to thank all shareholders again for your support and care over the past year! 2019 marks the 50th anniversary of the first humans landing on the Moon. Humans have always gazed into the vast sky and dreamed