ACBT - Annual Report 2021 | FinancialReports.eu

Stock Code 4148

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All Cosmos Bio-Tech Holding Corporation

ANNUAL REPORT 2020

Company website: http://www.allcosmos.com

Taiwan Stock Exchange Website: http://mops.twse.com.tw

Published on April 30, 2021

1.0 Name and Title of The Spokesman and Deputy Spokesman, Telephone and Email Address Spokesman Janice Cheow Telephone +607-252-3788 Title Chief Financial Officer Email address [email protected] Deputy Spokesman Janice Cheow (temporary) Telephone: (02)2712-0685 Title : Chief Financial Officer Email Address [email protected]

2.0 Name, Title, Telephone and Email Address of designated litigation and non-litigation agent within the territory of the Republic of China Spokesman Annie Peng Telephone (02)2712-0685 Title Director Email address [email protected]
3.0 Address and Telephone of The Head Office, Branch Office and Factory
3.1 Company name All Cosmos Bio-Tech Holding Corporation Website www.allcosmos.com Telephone +607-252-3788 Address One Nexus Way, Cayman Bay, Grand Cayman KY1-9005, Cayman Islands
3.2 Subsidiary in Malaysia

Company Name All Cosmos Industries Sdn. Bhd. Website www.allcosmos.com Telephone +607-252-3788 Address PLO 650, Jalan Keluli 7, Pasir Gudang Industrial Estate, 81700 Pasir Gudang, Johor, Malaysia.

Company Name Sabah Softwoods Hybrid Fertiliser Sdn. Bhd. Website www.sshf.com.my Telephone +608-986 3280 Address Lot 50 & 51, Phase 2, Jalan Tengah Nipah, 5.5KM, 91100 Lahad Datu, Sabah, Malaysia.

Company Name Arif Efektif Sdn. Bhd. Telephone +607-252-3788
Address PLO 539, Jalan Keluli, Pasir Gudang Industrial Estate, 81700 Pasir Gudang, Johor, Malaysia.
Company Name Kinabalu Life Sciences Sdn. Bhd. Telephone +6089-767600 Address Lot B12, Phase 1C, Portcity@POIC, KM5, Jalan Tengah Nipah, 91100 Lahad Datu, Sabah, Malaysia
Company Name Sawit Ecoshield Sdn. Bhd. Telephone +6088-235811
Address Jalan Kelapa Sawit, Off KM 4, Jalan Tuaran, 88300 Kota Kinabalu, Sabah, Malaysia.
Company Name Cosmos Biowood Sdn. Bhd. Telephone +607-3558833 Address 12A, Jalan Dedap 17, Taman Johor Jaya, 81100 Johor Bahru, Johor, Malaysia.

Company Name GK Bio International Sdn. Bhd. Telephone +603-61421139 Address 42-2, Jalan PJU 5/11, Dataran Sunway, Kota Damansara, 47810 Petaling Jaya, Selangor, Malaysia.

3.3 Subsidiary in Indonesia

Company Name PT All Cosmos Indonesia Telephone +6261-8201288 Address Ira Building Jl. Cactus Raya Blok J No.1 Komp. Perumahan Taman Setia Budi Indah Medan - 20131, Sumatera Utara – Indonesia

Company Name PT All Cosmos Biotek

Address Jalan Kelapa Sawit – Nomor 1, KEK Sei Mangkei, Kecamatan Bosar Maligas, Kabupaten Simalungun, Sumatera Utara, Indonesia.

3.4 Taiwan Branch

Address 7F-4, 181, Fuxing North Road, Taipei, Taiwan, R.O.C. Telephone (02)2712-0685

4.0 Name, Address, Website And Telephone Number of The Stock Transfer Institution Company Name SinoPac Securities Corporation Address 3F., No.17, Bo’ai Rd., ZhongZheng Dist., Taipei City 100, Taiwan, R.O.C. Website www.sinopacsecurities.com Telephone (02)2381-6288

5.0 Latest Annual Financial Report of CPA, Firm Name, Address, Website And Telephone Number

CPA’s Name Chen, Chiang-Hsun Ho, Jui Hsuan Firm Name Deloitte & Touche

Address 20F, No. 100, Songren Road, Xinyi District, Taipei City, Taiwan, R.O.C. Website www.deloitte.com.tw Telephone (02)2725-9988

6.0 Overseas Securities And Stock Exchange Enquiries : None.
7.0 Company Website www.allcosmos.com
8.0 List of Board of Directors

			April 30, 2021
Title	Name	Nationality or place of registration	Education and Professional Qualifications
Chairman	All Cosmos Investment Ltd	Republic of Seychelles	Ph.D candidate, Institute of Wood Science and Technology, University of Putra,
	Representative :	Republic of

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Peng Shih Hao China Malaysia
Master of Business Administration, Honolulu
University, Hawaii
Sheng Hua Ltd Republic of
Seychelles
Director Representative Republic of Kuan-Hsi High School
Peng Sheng China
Ching
Maxtrength Republic of
Shih Hsin College of Journalism and
Corporation Seychelles Communication
Director
Representative : Republic of
Peng Chia Lin China Director of Clinical Research, Quintiles
Chihlee College of Technology,
Republic of
Director Hsu Ken Tsai Department of Enterprise Management
China
General Manager of Tachong Gas Station
Republic of Bachelor of Finance and Taxation, National
Director Chang Lu Chang
China Chengchi University
Doctor of Forest Diseases, University of
Auckland
Director Chee Kheng Hoy Malaysia
Director of Malaysia Rubber Research
Institute
Institute of Law, National Chung Hsing
Independent Republic of
Lo Tzu Wu University
Director China
Weiyang Law Firm Lawyer
Master in Finance, Fu Jen Catholic
University
Independent Republic of
Yang Yung Cheng
Director China
Certified Accountant of higher examination
Accountant, Moores Rowland CPAs
Ph.D, Post Doctoral Research, Department of
Life Science, National Tsing Hua University
Post-Doctoral Research, UCLA
Independent Lee Wen Chuan Republic of Head of Agricultural Technology Research
Director China Institute
Principal of Reboot Agricultural
Technology., Ltd.
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1.0 Business Report…………………………………………………………... 1
2.0 Company Profile…………………………………………………………. 4
2.1 Date of incorporation………………………………………….…………………….
4
2.2 Company history……………………………………………….……………………
4
2.3 Risk Items……………………………………………………………………………
6
3.0 Corporate Governance Report………………………………………….. 7
3.1 Organization system……………………………………………….………………...
7
3.2 Information on directors, supervisors, president, vice presidents, and management
team………………………………………………………………..………………...
9
3.3 Remuneration paid to directors, supervisors, president and vice presidents for the
recent years…………………………………………………………………………. 13
3.4 Corporate governance operational situation………………………...………………. 17
3.5 Information on CPA professional fees……………………………………………… 45
3.6 Information on replacement of CPA: Announcement of accountants replacement
shall be made within these two years and thereafter…………….………………….. 46
3.7 Where the company's chairperson, general manager, or any managerial officer in
charge of finance or accounting matters has in the most recent year held a position
at the accounting firm of its certified public accountant or at an affiliated enterprise
of such accounting firm……………………………………..……………………… 47
3.8 Any transfer of equity interests and/or pledge of or change in equity interests (during
the most recent fiscal year or during the current fiscal year up to the date of printing
of the annual report) by a director, supervisor, managerial officer, or shareholder
with a stake of more than 10 percent during the most recent fiscal year or during the
current fiscal year up to the date of printing of the annual report…….…………….
47
3.9 Relationship information, if among the company's 10 largest shareholders any one
is a related party or a relative within the second degree of kinship of another…..….
48
3.10 The total number of shares held by the capital business, and the combined
calculation of the comprehensive shareholding ratio which involved companies,
company directors, supervisors, managers directly or indirectly………….……….
49
4.0 Capital Overview…………………………………………………………. 51
4.1 Capital and shares…………………………………………………………………... 51
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	4.2 Corporate bonds…………………………………………………………………….. 4.3 Preferred stocks……………………………………………………………………... 4.4 Overseas depositary receipts………………………………………………………... 4.5 Employee stock options…………………………………………………………….. 4.6 Restriction of employee’s rights on new shares status…………………………….... 4.7 Status of new shares issuance in connection with mergers and acquisitions………… 4.8 Financing plans and implementation………………………………………………...	55 55 55 56 57 57 57
5.0	Operational Overview……………………………………………………. 5.1 Business content…………………….......................................................................... 5.2 Overview of market, production and sales……………............................................... 5.3 The distribution ratio of number of employees, average service years, average age of employees, and education qualification who have been employed in the past two years and up to the date of publication .............................................................. 5.4 Distributed information of environmental protection................................................ 5.5 The relationship of employers and employees ......................................................... 5.6 Important contracts………………………................................................................	58 58 76 89 89 90 92
6.0	Financial Overview..................................................................................... 6.1 The Condensed Balance Sheets and Comprehensive Income Statements for the recent five years......................................................................................................... 6.2 Financial Analysis over the recent five years............................................................. 6.3 Audit Committee Review Report of the Most Recent Financial Report………..….. 6.4 Audited Consolidated Financial Statements of Parent and Subsidiary Companies in the most recent year ………………………………………………………………... 6.5 The company and its affiliates shall disclose the impact of financial difficulties on their financial status in the most recent year and up to and including the date of publication of the annual report..................................................................................	94 94 96 100 101 101
7.0	Financial Status, Review and Analysis of Financial Performance and Risks……………………………………………………………………….. 7.1 Financial status…………………………………....................................................... 7.2 Financial performance................................................................................................ 7.3 Cash flow.................................................................................................................... 7.4 Impact to finance and business by the significant capital expenditures in the most recent year............................................................................................................ 7.5 Investment policy in the most recent year, the main reason for its profit or loss,	102 102 103 104 105

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the improvement and investment plan for the following year……………………… 105
7.6 Analysis and assessment of risk factors in the most recent year and up to the
publication date of the annual report.......................................................................... 107
7.7 Other important matters……………………………………………………………. 114
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	7.7 Other important matters…………………………………………………………….	114

8.0	Special Records............................................................................................ 8.1 Affiliate Information ................................................................................................... 8.2 Private placements of securities in the most recent year and as of the publish date of the annual report ......................................................................................................... 8.3 Shares of the Company that are held or disposed by a subsidiary in the most recent year and as of the publish date of the annual report ................................................... 8.4 Other necessary descriptions....................................................................................... 8.5 Significant impact on shareholders' equity or securities prices matter incurred as per Article 36- 2- 2 of the Securities Exchange Law ................................................. 8.6 A statement of significant differences from the provisions of the shareholders' rights and interests of the Republic of China..............................................................	115 115 117 117 118 118 118

1.0 Business Report 2020

Dear Shareholders,

International Crude Palm Oil Price (CPO price) rised from the bottom of the fourth quarter of 2018, and continued to rise since May 2020, even reached a 10-year high by the end of 2020. However, Covid-19 pandemic has caused labor shortage in Malaysia oil palm industry. Meanwhile, La Nina phenomenon in 2019 resulted in insufficient fruit production. Unike the rapid rebound of CPO price, the oil palm industry takes steady steps of recovery and the fertilizer budget of plantations also shows a slow mode of adjustment.

The company’s strategy of expanding to different crop field is effective and helps to adjust revenue structure under current uncertain environemnt. In addition to losses in the first quarter due to the impact of the pandemic, the company resumed profitable from the second quarter of 2020 and achieves risk diversification and efficiency optimization by diversifying product types. In the mean time, our other mid- and long-term plans are still being steadily deployed, and we are highly confidient in the development of the company. It is our honor to present the company’s past year’s operating results and futures prospects to shareholders.

1. 2020 Operating Results

1.1 Business plan implementation results

Unit: NT$ in Thousand %

	2020	2019	Increase(Decrease) Amount	Change Ratio
Operating Revenue	1,642,783	1,767,699	(124,916)	-7.07%
Gross Profit	372,147	393,312	(21,165)	-5.38%
Net Profit For The Year	82,204	35,694	46,510	130.30%

In 2020, the company’s revenue decreased by 7.07% as compared with 2019. It is mainly because CPO price fluctuated in 2019 and resulted in late opening of 2020 first half bid, which further led to significant shipment decline in January and February. Coupled with the fact that the Malaysian government implemented “Movement Control Order” in mid-March in response to the spread of Covid-19, operations in the first quarter of 2020 fell to the bottom. The company resumed operation quickly as we belong to essential economic sectors, and operations gradually stabilized since the second quarter. As the environment has not yet stabilized, the plantation's 2020 fertilizer budget did not increase significantly with the rising CPO price, and plantations’ willingness to apply biochemical fertilizers is still more conservative than before. However, our long-standing research and development of microorganisms, plant vaccines, health foods and other diversified products started to contribute. Among them, microbial fertilizer N-bio booster for paddy has received a

two-year subsidy from the Malaysian government to provide sustainable revenue.

Considering the impact of the overall environment and the adjustment of product structure, although our 2020 revenue decreased in comparison with the previous year, our profit increase to 82,204 thousand by 130.30%.

1.2 Financial Revenue and Profitability

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Financial Ratio Item 2020 2019
Financial Debt to Asset Ratio 9.61 8.09
Structure Long-Term Capital to Fixed 456.30 443.34
(%) Assets Ratio
Solvency Current Ratio 825.24 1,019.57
(%) Quick Ratio 643.74 826.92
Return on Assets 3.26 1.53
Profitability
Return on Equity 4.08 1.69
(%)
Earning Per Share (NT$) 1.28 0.56
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2. 2021 Operation Plan Summary:

The Malaysian Palm Oil Council (MPOC) predicts that the export volume of Malaysian palm oil in 2021 will increase by 22.62% compared to 2020. However, under the influence of the climate, the overall supply of palm oil may shrink. Although the CPO price is at a relatively high point, the biochemical fertilizer market is still slowly recovering. Hence, in addition to stablizing our share in fertilizer market and develop new customers, the company takes further step to emphasize the expansion of diversifed business and to further optimize sales structure. With our long lasting relationship with customers, we use our key microbial technology to obtain organic materials or chemical raw materials to create a future prosperity.

According to the estimation of MPOC, CPO price will remain at MYR3,000 (approxmately US$747.29) per meteric ton in 2021. In addition to Malaysia, the company is also actively exploring new markets in Indonesia, and is ready to compelte the construction of the Indonesia plant to further expand operations once the Covid-19 pandemic slows down. As for Green Circular Economy, the company will continute to cooperate with plantaions to set up specialized treatment plants around their refineries, directly recyling remaining organic matters in the oil extraction process, put micoorgamisms according to different needs to produce plant vanccies to prevent Ganoderma and other plant disease. Futhermore, to reuse the remaining matters from recyling to make biochemical fertilizer which could not only improve soil pH, to effecitve protect the environment, but to improve the soil’s ability to absorb nutrients.

After 20 years of deep cultivation in the Malaysian biochemical fertilizer market, the company has grown in the past with higher average growth rate of the overall fertilizer industry and has become a pioneer in the global bio-compound fertilizer industry. The company has more than 600 kinds of

microbial strains and two patented technologies with high-end agricultural technology, including quantitative microbial technology and stabilzer technology platform. As global awarness on sustainable agriculture, improvement of soil degradation and ecological problems arise, the company’s advanced technology can hep to improve and maintain the environemnet moving towards the goal of green agricutre. Through continuous efforts to improve, research and development, we lay a soild foundation for future growth.

We hope that we can show our business results to our shareholders with our peers’ efforts and our dedication. We commit to the spirit of continuous improvement and would like to thank our partners, sharheolders and hardworking staffs for your long-standing support. Thank you for allowing me to express my sincere gratitude here!

All Cosmos Bio-Tech Holding Corporation Chairman Peng Shih Hao

2.0 Company Profile

2.1 Date of Incorporation : March 26, 2010

2.2 Company and Group History

All Cosmos Bio-Tech Holding Corporation (hereinafter referred to as the Company) was established in the Cayman Islands on March 26, 2010, and is one of the public listing company in Taiwan. The All Cosmos Group owns several subsidiary companies in Malaysia and Indonesia, the main product is biochemical compound fertilizer combined with organic matter, beneficial microorganisms and chemical raw materials. The sales market extends to South East Asia such as Malaysia, China, Indonesia, Vietnam and Taiwan.

The Group's products draw on the advantages of various unit fertilizers and strive to solve and replace the severe environmental pollution caused by traditional chemical fertilizers. Due to the high technical threshold, the Group is the first company in Malaysia to have beneficial microorganisms to be added into fertilizer. In addition, the Group cooperated with the Malaysian Palm Oil Board (MPOB) to develop the fertilizer MPOB F4, which is suitable for the local main agriculture crop oil palm tree, and was approved by the Malaysian Oil Palm Board and authorized to use its trademark. In addition to biochemical compound fertilizer, the Group's products were jointly developed with the Malaysian Oil Palm Bureau in 2012 to combat the treatment of the main disease of oil palm tree Ganoderma lucidum. The Group's products have been extended from crop production to pest control.

The important notes of the company are as follows:

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Year Items
Incorporation of All Cosmos Industries Sdn Bhd in Johor, Malaysia, and
1999
established a biochemical compound fertilizer plant
2003 Obtained ISO2001 and ISO2000 certification
Incorporation of Hybrid Generation Sdn. Bhd. in Sabah to develop the
2003
market in East Malaysia
Awarded 10 years tax exemption with BioNexus Status certification
Developed MPOB F4 three-in-one biochemical compound fertilizer in
2008
cooperation with Malaysia Oil Palm Bureau (MPOB)
Received Overseas Outstanding Enterprise Award from Golden Bull Award
Collaborated with the Malaysian University of Technology (UTM) to
develop a nitrogen-fixing bacteria production platform
Awarded the Product Innovation Award from the Malaysia International
2009
Commodities Exhibition (MICCOS), the Asia-Pacific International
Entrepreneur Elite Award 2008-2009, and the Nanyang Business Daily
Golden Bull Award
2010 Incorporation of All Cosmos Bio-Tech Holdings Corporation in Cayman
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Year Items
Islands
Awarded the Asia Pacific Bio Fertilizer Award from Frost & Sullivan
Incorporation of Sabah Softwoods Hybrid Fertiliser Sdn Bhd in Sabah,
Malaysia, for production and sales in Sabah and Indonesia markets
Co-developing microbial fertilizers containing phage with the Malaysian
Institute for Agricultural Research and Development (MARDI)
The company's products are certified as green fertilizer products by the
Malaysian Ministry of Science and Technology Innovation (MOSTI)
Appointed by the Ministry of Science and Technology of Malaysia as an
agricultural green consultant, which is also the only private enterprise
2011
consultant
Awarded the Best Product Innovation Award Card in Malaysia;
Double Gold Medal in International Consumption;
Model Award of Taiwan Overseas Chinese Enterprise;
Best International Overseas Enterprise Award in Taiwan;
and Individual Outstanding Product Award in China.
Joint development of 4-in-1 biochemical compound fertilizer with the
Malaysian Palm Oil Board (MPOB)
2012
Awarded the Outstanding Brand Award from the Asian Entrepreneurship
Alliance (AEA)
Awarded the top three companies of BioNexus and the BioNexus Excellence
Award from Biotech Corp.
Awarded the Sin Chew Business Excellence Award 2013 for outstanding
2013
product and service quality
Awarded the Gold Medal Best Agriculture Award and the Malaysian
Innovation Product Award (ITEX'13)
GanoEF products won the third place in the Patent Group Award
Co-developed MPOB F4 Premium Biochemical Compound Fertilizer with
Malaysia Palm Oil Board (MPOB)
2014
Won the 46th Outstanding Business Award from FMM
All Cosmos Industries Sdn Bhd established the Second Plant in Johor, West
Malaysia
2015 Awarded the 47th Outstanding Business Award from FMM
Awarded the 48th Outstanding Business Award from FMM and the
Outstanding Award for Quality of Fertilizer Products in Malaysia
2016 Granted the Patent for "Bio-Stabilized Fertilizer Technology" in Taiwan
Granted the Patent for "Endophytic Fungus Production Technology" in
Thailand
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Year Items
All Cosmos Bio-Tech-KY officially listed in Taiwan Stock Exchange on 8 [th]
of June
Awarded the Bioeconomic Excellence Award from Biotech Corp
2017 Subsidiary company of All Cosmos Industries Sdn Bhd and Sabah
Softwoods Hybrid Fertiliser Sdn Bhd have established a joint venture with
Sawit Kinabalu Group, a subsidiary of the East Malaysian government, to
establish a professional treatment plant to develop biological vaccines
Established an Indonesian joint venture with YPJ Plantations Sdn. Bhd., a
subsidiary of the Johor State Government of Malaysia, to produce and
engage sales for Indonesian market.
Signed the “Liquor Cellulose Depolymerization Patent and Technology
Licensing and Service Plan Contract” with the Industrial Technology
2018
Research Institute
Subsidiary Company Arif Efektif signed a technical sales contract with
MARDI Malaysian Agricultural Research and Development Agency to
obtain the use of induced resistant system for papaya seedlings to control
papaya disease
Signed a joint venture contract with Grape King Biotech Co., Ltd. to expand
2019
the health food biotechnology business in ASEAN countries
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Please refer to page 115 for corporate structure.

2.3. Risk Items

The Company’s internal auditors execute regular audit to control risk items and update to the board of directors on regular basis. For details please refer to page 107 to 114.

3.0 Corporate Governance Report

3.1 Organization System

3.1.1 Organizational Structure

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3.1.2 Business Operations of Major Departments

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Department name Operation
Board of Directors [Establish policy directives and target policies for the company's ]
business operations
Supervise the company's business and financial status, the company's
Audit Committee financial statements, and the effective implementation of internal
control
Remuneration Regularly review the policies, systems, standards and structures of
Committee directors and managers' performance, appraisal and salary
remuneration
Internal Audit Research, planning and implementation of internal control and
Department auditing systems, reporting of audit reports and tracking regularly for
improvements
Purchasing Responsible for general purchasing, raw material procurement, and
Department supply chain management
Quality Control Establish quality standards, execute quality control, ensure product
Department quality, and tracks corrective actions
Implement production planning, control production schedule and
Production
material status, maintain work safety and environmental requirements
Department
at production site, ensure product quality and production in progress
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Warehouse
Inventory management and goods receiving and delivery
Department
Administrative
Human resource management of the company
Department
Responsible for product selling, relationship management with
Sales Department customers and strategic partners, and the management of domestic and
international marketing channels and channel providers
Development Maintain customer relationships, expand new markets, and develop
Department the company's brand
Marketing Market promotion and increasing product exposure through various
Department means
Research
Develop research plan and new products
Department
Responsible for company finance, accounting, and cost related
Financial
matters, preparation and analysis of financial statements and reports,
Department
tax and other matters
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Father Sister Son
Daughter
Relationship
Peng Sheng Ching Lin Hao Lin
Peng Chia Peng Shih Peng Chia
Director Director Chairman Director
- - - -
Companies
The Company and/or Other
- ACI – Director and CEO - SSHF-Director - All Cosmos Investment Ltd.-Chairman - Kinabalu Life Sciences Sdn Bhd-Director - Sawit Ecoshield Sdn Bhd-Director - GK Bio International Sdn Bhd-Director - PT All Cosmos Biotek-Director - ACI-Chairman - Sheng Hua Ltd.-Chairman - YiChen International Pte Ltd-Director
Administration,
- - -
Business
of
Experience and Education
Ph.D candidate, Institute of Wood Master
- Science and Technology, University of Putra, Malaysia - Honolulu University, Hawaii - Kuan-Hsi High School - Chihlee College of Technology, Department of Enterprise Management- General Manager of Tachong Gas Station - Bachelor of Finance and Taxation, National Chengchi University
% - - - - -
35.13% 3.9%
- - - - -
No. of Shares 22,500 2,500
Shareholding by Nominee Arrangement
% - - - - - -
0.06%
- - - 40 - - -
No. of Shares
%
35.13% 0.38% 3.9% 0.04% 0.05% 0.05% 7.02%
No. of Shares 22,500 245 2,500 27 30 30 4,500
Current Shareholding
% - -
39.82% 4.42% 0.05% 0.05% 7.96%
- - 30 30
Shareholding When No. of Shares 22,500 2,500 4,500
First
Date of Election 2010.3.26 2010.3.26 2014.6.30 2012.9.29 2012.9.29 2012.9.29 2014.6.30
Terms 3yrs 3yrs 3yrs 3yrs 3yrs 3yrs 3yrs
2019.6.19 2019.6.19 2019.6.19 2019.6.19 2019.6.19 2019.6.19 2019.6.19
- - -
Male male male male
Sheng
Name
All Cosmos Investment Ltd Representative: Peng Shih Hao Sheng Hua Ltd Representative: Peng Ching Hsu Ken Tsai Chang Lu Chang Maxtrength Corporation
chellesy chellesy
Nationality Republic of Se R.O.C Republic of Se R.O.C R.O.C R.O.C Republic of Seychelles
Title Chairman Director Director Director Director
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Father Brother
Relationship
Peng Sheng Ching Hao
Peng Shih
Director Director
Companies Co., Ltd
gy
The Company and/or Other Enery
- Maxtrength Corporation - Director - GK Bio International Sdn Bhd -Director - AESB-Director - Director of Malaysia Rubber Research Institute - Seyi Machinery Industry Co., Ltd-Supervisor - Shiwei Technology -Supervisor - Hongsheng Investment Co., Ltd-Supervisor - Sea Wa - Yungchan Construction Co., Ltd-Supervisor - Han Yi Yuan Integrating Medical Technology Co., Ltd – Supervisor - Dan Jie Construction Co., Ltd – Supervisor - Reboot Agricultural Technology., Ltd – Principal - Taiwan Formosa Organic Association – Deputy Chairman - Taiwan Miadi Amla Cooperative – Consultant -Agricultural Bank of Taiwan – Consultant - Hsin Chu County Local Industry Development Association – Consultant - Tze Chiang Foundation - Consultant
Experience and Education
- Shih Hsin College of Journalism and Communication - Director of Clinical Research, Quintiles - Ph.D of Forest Diseases, University of Auckland - Researcher and Head of Rubber Research Institute - National Chung Hsing University Institute of Law - Weiyang Law Firm Lawyer - Master in Finance, Fu Jen Catholic University - Certified Accountant of higher examination - Accountant, Moores Rowland CPAs - Bachelor of Plant Pathology, National Chung Hsing University - Ph.D, Post-Doctoral Research, Department of Life Science, National Tsing Hua University - Post Doctoral Research, UCLA - Head of Agricultural Technology Research Institute
% - - - -
7.02%
- - - -
No. of Shares 4,500
Shareholding by Nominee Arrangement
% - - - -
0.06%
40 - - - -
No. of Shares
% - - - -
0.07%
45 - - - -
No. of Shares
Current Shareholding
% - - - -
0.02%
10 - - - -
Shareholding When No. of Shares
First
Date of Election 2014.6.30 2014.6.30 2012.9.29 2014.6.30 2019.6.19
Terms 3yrs 3yrs 3yrs 3yrs 3yrs
2019.6.19 2019.6.19 2019.6.19 2019.6.19 2019.6.19
male male male male
Name
Representative: Peng Chia Lin Chee Kheng Hoy Lo Tze Wu Yang Yung Cheng Lee Wen Chuan
Nationality R.O.C Malaysia R.O.C R.O.C R.O.C
ent
Title Director Independent Director Independent Director Independ Director
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3.2.1.2 The name of the corporate shareholder and the top ten shareholder name and its shareholding ratio:

tio:	tio:	tio:
April 30, 2021
Corporate Shareholder Name Major Shareholder of Corporate Shareholder Shareholding ratio (%)
All Cosmos Investment Ltd. PengShih Hao 100%
ShengHua Ltd. PengShengChing 100%
Maxtrength Corporation	PengChia Lin	100%

3.2.1.3 The major shareholders of the corporate shareholders are corporate shareholder: None.
3.2.1.4 Status of the professional knowledge and independency of the directors and supervisors (the

company does not have a supervisor)

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Condition Number of other public
companies in which the
More than 5-year Work Experience
Independency Criteria Individual is concurrently
and Professional Qualifications as Below
serving as an independent
director
Name
An Instructor or A Judge, Public
Higher Position in Prosecutor, Attorney, Have Work
a Department of Certified Public Experience in
Commerce, Law, Accountant, or Other the Areas of
Finance, Accounting, Professional or Technical Commerce,
or Other Academic Specialist Who has Law, Finance, 1 2 3 4 5 6 7 8 9 10 11 12
Department Approved a National or Accounting,
Related to the Examination and Been or Otherwise
Business Needs of Awarded a Certificate in a Necessary for
the Company in a Profession Necessary for the Business of
Public or Private the Business of the the Company
College Company
Peng Shih Hao - - -
Peng Sheng Ching - - -
Hsu Ken Tsai - - -
Chang Lu Chang - - -
Peng Chia Lin - - -
Chee Kheng Hoy - - -
Lo Tze Wu - -
Yang Yung Cheng - -
Lee Wen Chuan - - -
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Note : Please mark “ ” at the beginning of the following conditions that various directors and supervisors match in two years before appointment and during their tenure.

(1) Not an employee of the Company or any of its affiliates.
(2) Not a director or a supervisor of the Company or its affiliated company (However, the independent director that the Company or its parent company or subsidiary sets according to this law or local law is not subject to this limit).
(3) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
(4) Not a manager listed in (1), or spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship listed in (2) and (3) (5) Not directly holding 5% or more of the total number of outstanding shares of the Company, top 5 shareholders, or appoint representative as director, supervisor, or employee according to Article 27, item 1 or 2 of Company Act. (if the independent directors of the company and its parent company, subsidiary, or a subsidiary of the same parent company hold concurrent positions for each other by law are not limited to this)
(6) Not a director, supervisor, or officer of a company that is controlled by the same person with the Company’s director seats or more than half of the voting seats. (if the independent directors of the company and its parent company, subsidiary, or a subsidiary of the same parent company hold concurrent positions for each other by law are not limited to this)
(7) Not a director, supervisor, or officer of the same person or spouse with the Company’s chairman, CEO or equivalent job. (if the independent directors of the company and its parent company, subsidiary, or a subsidiary of the same parent company hold concurrent positions for each other by law are not limited to this)
(8) Not holding 5% or more of the total number of outstanding shares, or a director, supervisor, or management of a company or institution which has finance or business relationship with the Company. (Specific company or institution holds more than 20%, not exceeding 50% of the total number of outstanding shares, and the independent directors of the company and its parent company, subsidiary, or a subsidiary of the same parent company hold concurrent positions for each other by law are not limited to this)
(9) Owner, partner, director, supervisor, manager or their spouse of a company or affiliated company, not providing auditing service to the Company, or accumulated fee charge from providing business, legal, finance, accounting or related services to the Company not exceeding NT$500,000. Members of the Compensation Committee, Public Acquisition Review Committee, or M&A Special Committee who perform their functions in accordance with the Securities Exchange Act or the relevant laws and regulations of the Corporate Mergers and Acquisitions Act are not limited to this.
(10) Not spouse or 2[nd] degree relatives of kinship with other directors.
(11) Not a person of any conditions defined in Article 30 of the Company Act.
(12) Not a governmental body, juridical person or its representative as defined in Article 27 of the Company

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3.4 Corporate Governance Operation

3.4.1 Operation of The Board of Directors

In the most recent year (2020) the Board of Directors convened 6 meetings, the attendance was listed as follows:

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Title Name Actual Entrusted To Actual Remarks
Attendance Attend Attendance Rate
Frequency (%)
Chairman Peng Shih Hao 6 0 100.00
Peng Sheng
Director 5 1 83.33
Ching
Director Peng Chia Lin 6 0 100.00
Chee Kheng
Director 6 0 100.00
Hoy
Chang Lu
Director 6 0 100.00
Chang
Director Hsu Ken Tsai 6 0 100.00
Independent
Lo Tze Wu 6 0 100.00
Director
Independent Yang Yung
6 0 100.00
Director Cheng
Independent Lee Wen
6 0 100.00
Director Chuan
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Other matters to be recorded:

If the operation of the board of directors is in any of the following circumstances, the date, period, proposal content, all independent directors’ opinions and the company’s handling of independent directors’ opinions shall be stated:

(1) The matters listed in Article 14(3) of the Securities Exchange Act :

Session	Date	Meeting Content	All Independent Directors' opinions and companies handling of opinions of Independent Directors
5~~th ~~time of the 5th Board	24 March, 2020	Pass the Year 2020 remuneration for external auditors and assessment of its competence and independence	All independent directors approved.

(2) Other board resolutions that have been opposed or reserved by independent directors and have records or written statements in addition to previous matters: None
The implementation of directors' avoidance of the proposal of interest:

2020 year-end bonus proposal was passed on 18 December, 2020 board meeting. In addition to the directors that are the interested parties, all directors approved the proposal.

The listed company shall disclose the evaluation cycle, period, evaluation scope, method and evaluation content of the board of directors:

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Cycle Period Scope Method Content
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Cycle Period Scope Method Content	Cycle Period Scope Method Content	Cycle Period Scope Method Content	Cycle Period Scope Method Content	Cycle Period Scope Method Content

Execute annually	2020/01/01 2020/12/31	All directors, individual director, functional committee	Self evaluation of the board. Self evaluation of board members. Peer evaluation.	1. Board Evaluation 1.1 Level of participance to company operation 1.2 Improve quality of the board resolutions 1.3 Organization and structure of the board 1.4 Election and continuing education of board members 1.5 Internal control 2. Evaluation of individual board member 2.1 Mastery of company goals and tasks 2.2 Understanding of duties as board member 2.3 Level of participance to company operation 2.4 Internal relationship maintains and communication 2.5 Professionalism and continuing education of board members 2.6 Internal control 3. Evaluation of functional committee 3.1 Level of participance to company operation 3.2 Understanding of duties of functional committee 3.3 Improve quality of committee resolutions 3.4 Committee composition and member selection of functional committee 3.5 Internal control

Assessment of the objectives and performance of the Board of Directors for the current

and recent years:

(1) The Board of Directors of the company authorized the Audit Committee and the Remuneration Committee to assist the Board of Directors in performing their supervisory duties. The Committee consists entirely of three Independent Directors. The chairman of the committees reports their activities and resolutions to the Board of Directors on a regular basis.
(2) To implement corporate governance, improve the function of the company’s board of directors, build performance goals and improve efficiency of the board, the company has formulated the performance evaluation method of the board and reported evaluation result on 26 March, 2021 board meeting.
3.4.2 Information on the Operation of the Audit Committee:

In the most recent year (2020) and as of the printing date of the annual report, the

Audit Committee convened 5 meetings. The attendance of the Audit Committee is as follows:

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Title Name Actual Entrusted To Attend Attendance Rate Remarks
(%)
Attendance Frequency
Independent Lo Tze Wu 5 0 100.00
Director
Independent
Yang Yung Cheng 5 0 100.00
Director
Independent
Lee Wen Chuan 5 0 100.00
Director
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Other matters to be recorded

If the operation of the audit committee is in any of the following circumstances, the date, period, proposal content, resolution of audit committee and h the company’s handling of independent committee members ‘opinions shall be stated:
(1) The matters listed in Article 14(5) of Securities and Exchange Act:

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The results of the
Audit Committee's
resolution and the
Session Date Meeting Content
company's handling
of the Audit
Committee's opinions
1. Approval of 2019 consolidated All Independent
financial statements and business Directors approved
report
2. Approval of 2019 earnings
distribution
5 [th] time of 3. Approval of 2019 declaration of
the 4 [th] 2020.03.24 internal control system and internal
committee control review report
4. Approval of the change of
independent auditor
5. Approval of independent auditors’
competence, independence and
remuneration
6 [th] time of All Independent
Approval of consolidated financial
the 4 [th] 2020.05.11 Directors approved
statements for the first quarter of 2020
committee
7 [th] time of Approval of consolidated financial All Independent
the 4 [th] 2020.08.12 statements for the second quarter of Directors approved
committee 2020
8 [th] time of All Independent
Approval of consolidated financial
the 4 [th] 2020.11.11 Directors approved
statements for the third quarter of 2020
committee
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(2) Other resolutions that have not been approved by the Audit Committee but have been approved by more than two-thirds of all directors in addition to previous matters: None

The implementation of independent directors' avoidance of the proposal of interest, should state independent director’s name, contents of proposal, reasons for avoidance, participation and voting status: None
Communication between the Independent Directors and the Internal Audit

Supervisors and Accountants (including major issues, methods and results of communication on the company's financial and business conditions):

(1)The auditing unit of the company provides the audit report of the internal audit of the Independent Directors in accordance with the regulations, and reports the latest audit situation through the Board of Directors. The Independent Directors could check the financial and business execution status of the company at any time. If there are any doubts about the related operations of the company, it can be deal with the relevant unit Supervisor immediately for review and improvement. There is no such special situation in 2020. Audit committee communicated well with the internal auditors.

Session	Date of Audit Committee Meeting	Way of Communication	Communication Focus Point	Suggestions and Results
5th time of the 4th committee	2020.03.24	meeting	2019 “Declaration of Internal Control System” and “Internal Control System Review Report”	All the members present will submit it to the board of directors after deliberation and approval. There are no major items to be revised.
9th time of the 4th committee	2020.12.18	meeting	Discussion and communication of the 2021 audit plan	All the members present will submit it to the board of directors after deliberation and approval. There are no major items to be revised.

(2)In the case of communication with external auditors, if the Independent Director has any doubts about the financial and business conditions of the company, he/she must deal with the accountant of the company at any time and guide the relevant units of the company to conduct review and improvement. The company's external auditors were present at the Annual Audit Committee twice in 2020. During the meeting, the financial statements of the year and other related legal requirements are reported. If there are special circumstances, they will report to the members of the Audit Committee immediately. There is no such special situation in 2019. The audit committee of the company communicated well with the external auditors.

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with
Differences and its
companies and OTC
Reasons of the Code of Practice for Corporate
Governance as compared No major differences No major differences No major differences No major differences No major differences
Abstracts
eration circumstances
p
O
The Company has established relevant internal procedures and set up a spokesperson on to deal with matters such as shareholder suggestions, doubts or disputes. The company's shareholder register provided by the stock agent holds the list of shareholders and regularly tracks the list of final controllers. The Company has established a trading management method for the related enterprises and has implemented it in order to achieve the risk control mechanism. The company has established "insider trading prevention measures" to regulate all employees, managers and directors of the company, and anyone who knows the news of the company based on occupation or control relationship, to prohibit any possible insider trading, and regularly held internal training and promotion on this.
(i) (ii) (iii) (iv)
The company has established a code of practice for governance and disclosed it on the company's website.
No
Yes
anies?
p
Assessed Items
lement and control the risk
p
expose the Code of Practice for Corporate Governance in accordance with the Code of Practice for Corporate Governance in Listed Com structure and shareholders' equity internal operating procedures to deal with shareholders' suggestions, doubts, disputes and litigation matters, and implement them according to procedures? the ultimate controllers of the major shareholders and major shareholders of the actual control company? im
(1) Does the company formulate and (2) the company's shareholding (i) Does the company stipulate (ii) Does the company have a list of (iii) Does the company establish,
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with
Differences and its
companies and OTC
Reasons of the Code of Practice for Corporate
Governance as compared No major differences Future implementation as appropriate No major differences No major differences
Abstracts
eration circumstances
p
O
The members of the board of directors have
(i) The Company currently has nine directors, including one female director. professional backgrounds in agriculture, commerce, law and accounting, and all have the necessary qualifications to perform their duties. (ii) The Company will establish other various functional committees in due course according to the company's business development and legal requirements. (iii) The Company already formulated performance evaluation method to improve functions of the board of directors and implement corporate governance, set performance goals to facilitate the operation efficiency of the board of directors, and already completed performance evaluation in the first quarter of 2021 and reported to the board of directors. . (iv) On March 24, 2020 the Company reported the independency assessment of the appointment of External Auditors in 2020 to the Board of Directors and the Audit Committee for deliberation. All
No
Yes
and sell securities?
y
Assessed Items
control and firewall mechanism between the enterprises? internal regulations and prohibit insiders from using the undisclosed information on the market to bu board of directors formulate a diversified policy and implement it in terms of membership? up other functional committees in addition to the salary remuneration committee and the audit committee? performance appraisal methods of the board of directors and their assessment methods, and conduct performance evaluations every year and regularly?
(iv) Does the company stipulate (3) the composition and duties of the (i) Does the board of directors (ii) Does the company voluntarily set (iii) Does the company stipulate the
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Operation circumstances Differences and its	Assessed Items Reasons of the Code of Practice for Corporate Governance as compared with companies and OTC Yes No Abstracts	(iv) Does the company regularly assess the independence of the Chartered Accountant? the directors passed the resolution that Deloitte & Touche, Chen Chiang Hsun and Ho Jui Hsuan are in line with the company's independence and eligibility assessment criteria. The review is based on the “Chartered Accountant Review and Evaluation Form” prepared by the Company and the “Accountant's independence statement” issued by the accountant. The specific indicators and assessments of the review assessment form are as follows: 1. Accountant independency 2. Accountant's moral behavior 3. Financial report quality, timeliness 4. Auditor professionalism 5. Assess the various risks that exist or potential to monitor the company 6. Communication with management 7. Rationalityof Audit Fee	No major differences
			The company has stipulated "standard operating procedures for handling directors' requirements" in 2019, and the board of directors has designated the financial department as the deliberation unit. Although there is currently no corporate governance supervisor, there is full-time staff in the Finance Department to handle corporate governance related matters. (including providing directors with the information necessary for the execution of their business, assisting directors to complywith laws and regulations,handlingmatters


			4. Does the listing company has competent and adequate number of corporate governance personnel , and assign head of corporate governance to be responsible for corporate governance related matters (including but not limited to providinginformation required by

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with
Differences and its
companies and OTC
Reasons of the Code of Practice for Corporate
Governance as compared No major differences No major differences
website
y
an
p
Abstracts
the com
p
eration circumstances
p
O
has set u
y
an
p
The Com
)
i
related to board meeting, audit committee, remuneration committee and shareholders 'meeting in accordance with the law, producing board and shareholders' meeting minutes, etc. And arranging directors continuous training courses. The company instructs the departments including investor relations, stock affairs, human resources, customer service and procurement to communicate with stakeholders, and has contact information of spokesperson and relevant business departments on the company website to maintain good communication channels and provide timely and effective response to stakeholders. The company has appointed the stock affairs agent of SinoPac Securities Corporation to handle the affairs of the shareholders' meeting. (
No
Yes
?
)
etc.
g,
issues?
y
Assessed Items
?
g
onsibilit
p
directors and supervisors to conduct business,assit directors and supervisions in regulation compliance, and handling matters related to meetings of the board of directors and shareholders meeting in accordance with the law, making meeting minutes for board meeting and shareholders meetin communication channels with interested parties (including but not limited to shareholders, employees, customers and suppliers), set up stakeholder areas on the company's website, and respond appropriately to important corporate societies of concern to stakeholders? Res professional stock agency to handle the affairs of the shareholders' meetin
5. Does the company establish 6. Does the company appoint a 7. information disclosure
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Operation circumstances Differences and its	Assessed Items Reasons of the Code of Practice for Corporate Governance as compared with companies and OTC Yes No Abstracts	No major differences No major differences The company will make an early announcement on quarterly financial reports and monthly operating conditions based on practical needs
		(www.allcosmos.com) and disclosed financial business and corporate governance information for investors to understand the inquiry. (ii) The Company has assigned personnel to be responsible for information collection and disclosure, and has selected suitable personnel to serve as spokespersons and deputy spokespersons. (iii) The company complies with relevant laws and regulations to announce financial reports and monthly operating conditions within the prescribed time limit.


		(i) Does the company set up a website to expose financial business and corporate governance information? (ii) Does the company adopt other methods of information disclosure (such as setting up an English website, designating a person to be responsible for the collection and disclosure of company information, implementing the spokesperson system, and placing the company website during the legal person briefing process)? (iii) Does the company announce and declare the annual financial report within two months after the end of the fiscal year, and announce and declare the first, second and third quarter financial reports and the monthly operating situation within the prescribed deadline?

Operation circumstances Differences and its	Assessed Items Reasons of the Code of Practice for Corporate Governance as compared with companies and OTC Yes No Abstracts	No major differences
		(i) Employees' rights and interests: The company has established employee codes in accordance with the law, as the basis for the company and employees to protect the legitimate rights and interests of employees. (ii) Employee care: Establish an employee welfare system and an education and training system, and hold activities not on a regular basis. (iii) Investor Relationship: The Company has a spokesperson system and exposes or announces relevant information in accordance with regulations. (iv) Supplier relationship: The company maintains long-term good relations with suppliers. (v) Rights of interested parties: The company has a company website and a spokesperson to provide opinions to stakeholders to safeguard their rights and interests. (vi) The situation of directors and supervisors for further study: The directors of the Company have been regularly studied according to the regulations. (For details, please refer to pages37~39of this annual report) (vii) Implementation of risk management policies and risk measurement standards: Various internal regulations are formulated according to law to conduct various risk management and evaluation. (viii)Implementation of customerpolicy: The companymaintains a


		8. Does the company have other important information that helps to understand the operation of corporate governance (including but not limited to employee rights, employee care, investor relations, supplier relationships, stakeholder rights, directors and supervisors' training, the implementation of risk management policies and risk measurement standards, the implementation of customer policies, the company's purchase of liability insurance for directors and supervisors, etc.)?

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roved:
p
et im
with y
Differences and its
companies and OTC
Reasons of the Code of Practice for Corporate
Governance as compared
measures for those who have not
's articles of association. g
y
an
p
thenin ’s website.
g y
an
p
Improvement and Implementation Situation/Circumstances
stren
Abstracts y
Explained the audit committee's working summary and operation in 2020 annual report. The discussion and resolution results of the Remuneration Committee have been fully disclosed in the 2020 annual report. Corporate governance structure will be disclosed in the com
riorit
p
eration circumstances
p ose
O p
ro
p overnance?
and , g
orate
ear p
y
stable and good relationship with its customers.
supervisors: The company has purchased liability insurance for directors in accordance with the com
(ix) The company purchased liability insurance for directors and
No
If operation of the audit committee
oint.
Yes p business and cor,
Ltd. in the recent e Co.g, Corporate Governance Review Items 1 y
Does the company have an audit committee that meets the requirements? are disclosed in the annual report, the total score will be increased b Does the company disclose the discussion items and resolution in Remuneration Committee and the company’s comment on this? Does the company's website disclose information related to finance
Assessed Items
No. 2.10 2.11 3.17
Corporate Governance Evaluation
Please indicate the improvement of the corporate governance evaluation results of the Corporate Governance and Management Center of the Taiwan Securities Exchan
9.
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3.4.4 Composition, responsibilities and operation of the remuneration committee:

1. Remuneration Committee member information

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

Condition More than 5-year Work Experience
Independency Criteria
and Professional Qualifications as
(Note 2)
Below
An A Judge, Have Work
Instructor or Public Experience
Higher Prosecutor, in
Position in Attorney, the Areas of
a Certified Commerce,
Department Public Law,
of Accountant, Finance, Remarks
Commerce, or Other or Number of other
Law, Professional Accounting public companies
Finance, or Technical , in which the
Identity Accounting, Specialist or Individual is
(Note 1) or Who has Otherwise concurrently
Other Approved a Necessary 1 2 3 4 5 6 7 8 9 10 serving as an
Academic National for independent
Department Examination the director
Related to and Been Business of
the Awarded a the
Business Certificate in Company
Needs of a
the Profession
Company in Necessary
Name a for
Public or the Business
Private of the
College Company
Convener Lo Tze Wu No
Committee Yang Yung No
Cheng
Committee Lee Wen Chuan No
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Note 1: Please fill in the identity as a director, independent director or others.

Note 2: Please mark “ ” at the beginning of the following conditions that various directors and supervisors match in two years before appointment and during their tenure

(1) Not an employee of the Company or any of its affiliates.
(2) Not a director or a supervisor of the Company or its affiliated company (However, the independent director that the Company or its parent company or subsidiary sets according to this law or local law is not subject to this limit).
(3) Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the persons in the preceding three subparagraphs.
(5) Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of outstanding shares of the Company or that holds shares ranking in the top 5 in holdings.
(6) Not a director, supervisor, or employee of a company which the same person of the Company held more than half of seats in the board of directors or voting shares.
(7) Not the same person as the company's chairman, general manager or equivalent, or spouse, or director (director), supervisor
(supervisor) or employee of an institute.
(8) Not holding 5% or more of the total number of outstanding shares, or a director, supervisor, or management of a company or institution which has finance or business relationship with the Company. (Specific company or institution holds more than 20%, not exceeding 50% of the total number of outstanding shares, and the independent directors of the company and its parent company, subsidiary, or a subsidiary of the same parent company hold concurrent positions for each other by law are not limited to this)
(9) Owner, partner, director, supervisor, manager or their spouse of a company or affiliated company, not providing auditing service to the Company, or accumulated fee charge from providing business, legal, finance, accounting or related services to the Company not exceeding NT$500,000. Members of the Compensation Committee, Public Acquisition Review Committee, or M&A Special

Committee who perform their functions in accordance with the Securities Exchange Act or the relevant laws and regulations of the Corporate Mergers and Acquisitions Act are not limited to this.

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

In order to improve corporate governance and improve the company's directors and managers' salary and remuneration system, the company has taken into account the Republic of China “Stock Listing or The Establishment and Exercise of Powers and Responsibilities of The Company's Remuneration Committee for Securities Firms' Business Premises”, on September 28, 2012. After the resolution of the board of directors, the establishment of the salary compensation committee, and the establishment of the salary and remuneration committee organization rules, in order to facilitate compliance. Members of the Compensation and Remuneration Committee include Independent Director Lo Tze Wu, Independent Director Yang Yung Cheng and Independent Director Lee Wen Chuan.

2. Remuneration Committee duties

The Remuneration Committee faithfully performs the following functions and duties and submits the recommendations to the Board of Directors for discussion:

(1) Establish and regularly review the policies, systems, standards and structures for performance evaluation and remuneration of directors and managers.
(2) Regularly assess and determine the remuneration of directors and managers.

3.Remuneration Committee operation

(1) The company's remuneration committee has 3 members.
(2) The term of office of the current members: June 19, 2019 to June 18, 2022, in the most recent year (2020), the salary remuneration committee convened 3 times meeting. The attendance is as follows:

times meeting. The attendance is as follows:
Title Name Actual Attendance Entrusted To Attend Frequency	Actual attendance rate (%)	Remarks
Convener LoTze Wu 3 0	100.00	-
Committee YangYung Cheng 3 0	100.00	-
Committee Lee Wen Chuan 3 0	100.00	-
Other items to be recorded:
1. The board of directors should state the date of board meeting, session, contents of
proposals, resolution and company’s handling to Remuneration		Committee’s
opinion if the board does not adopt of modify the suggestions from
Remuneration Committee: None
2. The resolutions of the Salary and Remuneration Committee, if the members have
objections or reservationsandhavea record orwrittenstatement,the date, period,

content of the proposal, opinions of all members and comments on the members shall be stated: None.

Discussion items and resolutions of Remuneration Committee, company’s

handling to committee members’ opinions: None

Session	Date	Contents	Resolutions and the Company’s handling to Remuneration Committee members’ opinions
2nd time of the 4th committee	2020/03/24	Approved the 2019 employee compensation and director compensation distributionproposal	All presented members approved without objection and submitted to the board of directors for discussion
3rd time of the 4th committee	2020/06/16	Approval of the performance evaluation method of the board of directors	All presented members approved without objection and submitted to the board of directors for discussion
4th time of the 4th committee	2020/12/18	Approval of 2020 year -end bonus	All presented members approved without objection and submitted to the board of directors for discussion

3.4.5 Fulfilling Social Responsibility, differences and causes of differences with listed companies' corporate social responsibility practices

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Operational circumstances Differences and its
Reasons of the
Code of Practice
for Social
Responsibility as
Assessed Items
Yes No Abstracts compared with
other listed
companies and
OTC
companies
1. Does the company conduct The company has formulated and No major
risk assessments on passed the Corporate Social differences
environmental, social and Responsibility Code of Practice, and
corporate governance issues will fulfill its corporate social
related to the company's responsibilities and implement its
operations, and formulate code.
relevant risk management
policies or strategies based
on the principle of
materiality?
2. Does the company set up a In order to improve the management No Major
full-time (part-time) unit of corporate social responsibility, the differences
that promotes corporate promotion and implementation of
social responsibility, and if corporate social responsibility
the board of directors policies is performed by the
authorizes senior Company’s human resource
management to deal with it, department.
and report the situation to
the board of directors?
3. Environment Issues
(i) Does the company (i) The company obtained ISO No Major
establish an appropriate certifications and set up rules and differences
environmental regulations for safety, health and
management system environmental protection.
according to its industrial (ii) The company actively promotes No Major
characteristics? becoming a green enterprise, differences
(ii) Is the company committed reduces environmental pollution
to improve resource promotes e- operations, and reuse
utilization and use recycled of paper to reduce paper
materials with low impact consumption.
on environment? (iii)The company pays attention to and No Major
(iii) Does the company assess adjusts the temperature and differences
the potential risks and opening hours of air conditioners
opportunities of climate in the business premises in
change for now and in the response to the trend of energy
future, and take measures saving and carbon reduction.
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Operational circumstances Differences and its
Reasons of the
Code of Practice
for Social
Responsibility as
Assessed Items
Yes No Abstracts compared with
other listed
companies and
OTC
companies
to address related issues? (iv)The company has made various No Major
(iv) Has the company counted measures to reduce its impact on differences
greenhouse gas emissions, the environment and has made
water consumption and great progress. Through
total weight of waste in the manufacturing and process
past two years, and changes to help reduce 38% of
formulated policies for carbon dioxide emissions and
energy conservation and saves a lot of gas usage in
carbon reduction, operation
greenhouse gas reduction,
water use reduction or
other waste management?
4. Social Issues
(i) Does the company establish (i) The company complies relevant No Major
relevant management labor laws, formulates relevant differences
policies and procedures in personnel management regulations
accordance with relevant to protect the basic rights of
regulations and employees.
international human rights (ii) The Company has formulated No Major
conventions? reasonable salary and differences
(ii) Does the company remuneration policies with
formulate and implement reference to market practice, and
reasonable employee has established a clear and
welfare measures effective reward and punishment
(including compensation, system. Regularly organize
vacations and other employee activities, and have a
benefits), and appropriately bulletin board to timely release
reflect operating results in company information.
employee compensation? (iii) The company provides employees No Major
(iii) Does the company provide with a safe and healthy working differences
a safe and healthy working environment in accordance with
environment for employees, various safety regulations, and
and regularly implement regularly conducts employee
safety and health education training and health check.
for employees? (iv)The company provides external No Major
(iv)Does the company establish professional training subsidies and differences
an effective career internal education courses for
development training employees every year to enhance
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Assessed Items		Operational circumstances Differences and its Reasons of the Code of Practice for Social Responsibility as compared with other listed companies and OTC companies Abstracts	Operational circumstances Differences and its Reasons of the Code of Practice for Social Responsibility as compared with other listed companies and OTC companies Abstracts
	Yes No
program for employees? (v) Does the company comply with regulation and international standards in customer health and safety, customer privacy, marketing and labeling of products and services, and formulate relevant protection policies and appeal procedures for consumer rights? (vi)Does the company formulate and implement supplier management policies to require suppliers to follow regulations on environmental protection, occupational safety and health, and labor human rights?		the professional development. (v) The marketing and labeling of the company's main products are in compliance with relevant regulations and international standards. There is also a grievance system to provide customer service and adjust various processes in a timely manner. (vi)Before dealing with suppliers, the company will conduct an overall assessment, and if there is a record that affects the environment and society, the company will strengthen the prudent assessment. The suppliers have no record of influencing environmental protection, occupational safety and health or labour human rights. No Major differences No Major differences
5. Does the company refer to international reporting standards or guidelines for preparing reports like corporate social responsibility reports to disclose non-financial information? Did those reports obtain assurance or guaranteed opinion from third party?		The company has not yet compiled a corporate social responsibility report.	Future implementation

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Operational circumstances Differences and its
Reasons of the
Code of Practice
for Social
Responsibility as
Assessed Items
Yes No Abstracts compared with
other listed
companies and
OTC
companies
6. If the company has corporate social responsibility code in accordance with the "Code of
Practice for Corporate Social Responsibility of Listed Companies", please state the difference
between its operation and the established code: The company has formulated relevant measures
and implemented them accordingly, without major differences.
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Other important information that helps to understand the operation of corporate social responsibility
(1) The Company complies with environment protection related regulation and ensures environment management, and was recommended as the "Green Industry Consultant" by "Technology and Innovation Association" , which was personally led by the Prime Minister of Malaysia, and was the only private enterprise among the ten consultants.
(2) The company provides employee feedback channels, and convenes different meetings, such as labor meetings, employee forums, etc., so that staff at all levels and departments could fully express their opinions.
Note 1: If check "Yes" for the operation circumstances, please describe the important policies, strategies, measures and implementation conditions adopted; if is checked "No", please explain the reason and explain the plan to adopt relevant policies, strategies and measures in the future.
Note 2: For companies already prepared a corporate social responsibility report, operation circumstances may be replaced by referring to corporate social responsibility report with index number.
Note 3: The principle of materiality means that environmental, social and corporate governance issues that has a significant impact on the company’s investors and other stakeholders.

3.4.6 Implementation of integrity management and the difference with the listed company's code of integrity management

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Operation Circumstances Differences and
its Reasons of
the Conducts of
Integrity as
Assessed Items Yes No Abstracts compared with
other listed
companies and
OTC
companies
1. Establishing integrity (i) The Company has established an No Major
management policies and integrity management and conduct differences
programs publicity to implement it from time
(i) Does the company establish to time.
integrity management policy (ii) The Company complies with No Major
which is approved by the integrity management policy and differences
board of directors, and express forbids fraud and improper
its commitment in its acceptance, and has internal audit
regulations and external and control system to prevent
documents, as well as the dishonesty risk.
commitment of the board of (iii) The Company has established No Major
directors and management to relevant standards and penalties in differences
actively implement business the staff code, and conduct
policies? propaganda and education training
(ii) Does the company formulate a to implement the act of preventing
risk assessment mechanism to dishonesty from time to time.
prevent dishonesty, assess and
analyze high dishonesty risk
operation activities, and
formulate procedures to
prevent such activities which
at least in accordance with
seventh paragraph of Article 7
(2) of the “Code of Integrity of
Listed Companies”?
(iii) Does the company specify the
operating procedures, behavior
guidelines, disciplinary
penalties and grievance system
in the plan to prevent
dishonesty, and implement it,
and regularly review and
revise the plan?
2. The Implementation of Integrity (i) The company will conduct a credit No Major
Management report searching to evaluate its differences
(i) Does the company assess the records before trading with
integrity record of the object of important customers.
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Operation Circumstances Differences and
its Reasons of
the Conducts of
Integrity as
Assessed Items Yes No Abstracts compared with
other listed
companies and
OTC
companies
the transaction and specify the (ii) The Company has not yet set up a Future
terms of good faith in the special (concurrent) unit for the implementation
contract with the transaction promotion of corporate integrity as appropriate
partner? management under the Board of
(ii) Does the company set up a Directors, but it continues to
special unit that promotes the promote and follow relevant
integrity management of the policies.
company under the board of (iii) The Company has established a No Major
directors, and regularly reports code of good faith operation has a differences
(at least once a year) its system of directors' avoidance and
integrity policy, prevention on has a complaint mailbox to
dishonesty, and executation to provide a statement pipeline and
the board of directors? implement it.
(iii) Does the company formulate (iv) The Company has established an No Major
a policy to prevent conflicts of accounting system and an internal differences
interest, provide a proper control system, and implemented
presentation channel, and them, and entrusted independent
implement it? accountants to conduct regular
(iv) Has the company established checks.
an effective accounting system (v) The Company enhances No Major
and internal control system for employees' awareness of honesty differences
the implementation of credit and behavior through education
management, and the internal and training from time to time.
auditing unit or external
auditing team will establish
audit plan based on the
assessment of dishonesty
behavior risk, and audit the
compliance status of dishonesty
behavior.
(v) Does the company regularly
hold education training inside
and outside of integrity
management?
3. The Operation Of The (i) The company has a complaint No Major
Company's Reporting System mailbox. When employees find differences
(i) Does the company have a violations of laws and regulations,
specific reporting and reward they may report it at any time and
system, and establish a the company will report it to the
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Operation Circumstances Differences and
its Reasons of
the Conducts of
Integrity as
Assessed Items Yes No Abstracts compared with
other listed
companies and
OTC
companies
convenient reporting channel, relevant unit as soon as possible.
and assign appropriate (ii) The company has a complaint No Major
personnel to the respondents? mailbox to accept the report, and differences
(ii) Does the company stipulate the relevant materials are handled
the operational procedures for confidentially.
investigation, relevant actions (iii) The company takes protective No Major
and confidentiality mechanism measures against the informant differences
after investigation? and does not dispose of it due to
(iii) Does the company take the report.
measures to protect the
prosecutor from improper
handling due to the report?
4. Strengthen Information (i) The Company will disclose No Major
Disclosure information on the Code of Good differences
(i) Does the company exposes the Practice in the public information
contents of its integrity observatory and the annual report
management code and of the shareholders' meeting.
promotes its effectiveness on its
website and public information
observatories?
5. If the company has its own code of conduct in accordance with the Code of Conduct for the
Listing of Companies in the Listed Companies, please describe the difference between its
operation and the code: The company has established relevant measures and implemented them
accordingly. No major difference.ccordingly. No major difference.rdingly. No major difference.dingly. No major difference.ingly. No major difference.gly. No major difference.ly. No major difference.y. No major difference. No major difference.o major difference. major difference.jor difference.r difference.difference.ifference.erence.rence.ence.nce.ce.
6. Other important information that helps to understand the company's integrity operation: (If the
company reviews and amends its established code of conduct, etc.): None.
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If the company has its own code of conduct in accordance with the Code of Conduct for the Listing of Companies in the Listed Companies, please describe the difference between its operation and the code: The company has established relevant measures and implemented them accordingly. No major difference.ccordingly. No major difference.rdingly. No major difference.dingly. No major difference.ingly. No major difference.gly. No major difference.ly. No major difference.y. No major difference. No major difference.o major difference. major difference.jor difference.r difference.difference.ifference.erence.rence.ence.nce.ce.
If the company has established a corporate governance code and related regulations, it should disclose its inquiry method:

Company website http://allcosmos.com/zh/main/

MOPS http://mops.twse.com.tw

Other important information that is sufficient to enhance the understanding of the operation of corporate governance must be disclosed together:
Directors' training status

	Title	Name	Training Date	Organizer	Course taken	Credit hours	Total training hours as per report

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Total
Credit training
Title Name Training Date Organizer Course taken
hours hours as
per report
Responsibilities of
directors and
supervisors of
foreign-funded
2020.08.12 Taiwan 3
Corporate Peng enterprises in Taiwan
Corporate
Shareholder Shih and matters to be aware 6
Governance
Representative Hao of in corporate
Association
governance
Biotechnology
2020.11.11 enterprise authorization 3
and M&A practice
Responsibilities of
directors and
supervisors of
foreign-funded
2020.08.12 Taiwan 3
Corporate Peng enterprises in Taiwan
Corporate
Shareholder Sheng and matters to be aware 6
Governance
Representative Ching of in corporate
Association
governance
Biotechnology
2020.11.11 enterprise authorization 3
and M&A practice
Taiwan Corporate Governance
Academy of and Corporate
2020.07.22 3
Banking and Sustainability
Finance Workshop
Responsibilities of
directors and
Corporate Peng supervisors of
Shareholder Chia foreign-funded 9
2020.08.12 Taiwan 3
Representative Lin enterprises in Taiwan
Corporate
and matters to be aware
Governance
of in corporate
Association
governance
Biotechnology
2020.11.11 enterprise authorization 3
and M&A practice
Responsibilities of
directors and
supervisors of
foreign-funded
2020.08.12 Taiwan 3
Chang enterprises in Taiwan
Corporate
Director Lu and matters to be aware 6
Governance
Chang of in corporate
Association
governance
Biotechnology
2020.11.11 enterprise authorization 3
and M&A practice
Responsibilities of
directors and
supervisors of
foreign-funded
2020.08.12 Taiwan 3
Hsu enterprises in Taiwan
Corporate
Director Ken and matters to be aware 6
Governance
Tsai of in corporate
Association
governance
Biotechnology
2020.11.11 enterprise authorization 3
and M&A practice
Chee Taiwan Responsibilities of
Director 2020.08.12 3 6
Kheng Corporate directors and
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Total
Credit training
Title Name Training Date Organizer Course taken
hours hours as
per report
Hoy Governance supervisors of
Association foreign-funded
enterprises in Taiwan
and matters to be aware
of in corporate
governance
Biotechnology
2020.11.11 enterprise authorization 3
and M&A practice
Responsibilities of
directors and
supervisors of
foreign-funded
2020.08.12 Taiwan 3
enterprises in Taiwan
Independent Lo Tze Corporate
and matters to be aware 6
Director Wu Governance
of in corporate
Association
governance
Biotechnology
2020.11.11 enterprise authorization 3
and M&A practice
2020.08.21 2020 Discipline forum 3
2020 Company law and
2020.09.03 CPA company registration 3
Yang Associations practice seminar
Yung 15
2020.10.22 R.O.C. 2020 Tax seminar 3
Cheng
(Taiwan)
2020
2020.11.20 3
disciplinary seminar
2020.11.25 2020 Tax seminar 3
Independent
Responsibilities of
Director
directors and
supervisors of
foreign-funded
Lee 2020.08.12 Taiwan 3
enterprises in Taiwan
Wen Corporate
and matters to be aware 6
Quan Governance
of in corporate
Association
governance
Biotechnology
2020.11.11 enterprise authorization 3
and M&A practice
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2. Manager training status

Title Name	Training Date Organizer	Course taken Credit hours Total training hours as per report	Course taken Credit hours Total training hours as per report
	2020.11.24	Case analysis of false financial reports and how to see the key information of financial reports 3
Chief Financial Officer Janice Cheow	Taiwan Accounting Research and Development Foundation 2020.11.25	12 Investigation of "Fund Flow" in Financial Report Fraud Cases and Discussion of Related Legal LiabilityCases 3
	2020.12.03	Analysis of "Fake Foreign Investment Illegal Securities Trading" Case	3

				Analysis and Legal Liability
		2020.12.04		Common corporate governance deficiencies in enterprises and analysis of related laws and regulation	3
		2020.10.13		Common corporate governance deficiencies in enterprises and analysis of related laws and regulation	3
	i	2020.11.03	Taiwan Accounting	Compliance and audit practices of the company's "shareholders' meeting"	3
Audit Manager	Ta Hong Wen	2020.11.24	Research and Development Foundation	Case analysis of false financial reports and how to see the key information of financial reports	3	12
		2020.11.25		Investigation of "Fund Flow" in Financial Report Fraud Cases and Discussion of Related Legal LiabilityCases	3

(9) The implementation status of the internal control system should disclose the following matters
Company to the Public Declaration for Internal Control Statement

All Cosmos Bio-Tech Holding Corporation Public Declaration for Internal Control System

Date: March 26, 2021

With respect to the internal control system for 2020, based on the self inspection result, we hereby represent as follows:

I. The Company is aware that the establishment, implementation and maintenance of the internal control system are the responsibility of the board of directors and managers of the company. The Company has established this system. The purpose is to provide reasonable results in terms of operational effectiveness and efficiency (including profitability, performance and asset security, etc.), reporting reliability, timeliness, transparency, compliance with relevant regulations and compliance with relevant laws and regulations.

II. The internal control system has its inherent limitations. Regardless of how well the design is perfected, an effective internal control system can only provide reasonable assurance of the achievement of the above three objectives; and, due to changes in the environment and conditions, the effectiveness of the internal control system may change. However, the company's internal control system has a self-monitoring mechanism. Once the identification is missing, the company will take corrective action.

III. The Company judges whether the design and implementation of the internal control system is effective based on the judgment item of the effectiveness of the internal control system as stipulated in the “Guidelines for the Establishment of Internal Control System for Public Offering Companies” (hereinafter referred to as “Processing Guidelines”). The internal control system judgment project used in the “processing criteria” is based on the process of management control, and the internal control system is divided into five components: 1. Environment Control, 2. Risk assessment, 3. Operation control, 4. Information and communication, and 5. Operations Supervision. Each component also includes several items. Please refer to the “Handling Guidelines” for the above items.

IV. The company has adopted the above internal control system to judge the project and evaluate the effectiveness of the design and implementation of the internal control system.

V. Based on the results of the previous assessment, the Company believes that the internal control system (including supervision and management of subsidiaries) of the Company on December 31, 2020, including the understanding of the effectiveness and efficiency objectives of the operation, and reporting the design and implementation of the internal control system, which is reliable, timely, transparent and in compliance with relevant regulations and laws, is effective and can reasonably ensure the achievement of the above objectives.

VI. This statement will become the main content of the company's annual report and public statement, and will be made public. If the content of the above disclosure is illegal or concealed, it will involve legal liabilities such as Articles 20, 32, 171 and 174 of the Securities Exchange

Law.

VII. This statement was approved by the board of directors of the Company on March 26, 2021. Among the 9 directors present, there was 0 person holding dissent, and the others all agreed upon the contents of this Declaration.

All Cosmos Bio-Tech Holding Corporation

Chairman: Signature & seal

General Manager : Signature & seal

If the entrusted accountant project examines the internal control system, the CPA's review report shall be disclosed: None
(10) In the most recent year at the end of the annual report, the company and its internal personnel were punished according to law, and the company violated the internal control system for penalties, major defects and improvement of its internal personnel: None.
(11) Important resolutions of the shareholders' meeting and the board of directors in the most recent year at the end of the annual report:
Important resolutions and implementation of the shareholders' meeting and shareholders' temporary meeting

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March 31, 2021
Meeting Date Important resolutions Implementation situation
----- End of picture text -----

Meeting Date	Important resolutions	Implementation situation

2020.6.16	1. Recognized consolidated financial statements for 2019 2. Approved the amendment to the Articles of Association 3. Approved the amendment to the "Rules of Procedure of Shareholders' Meeting" 4. Approved the releasing prohibition on directors from competitive business	Has been implemented according to the resolution

Important Resolution of The Board of Directors

March 31, 2021

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Meeting Date Important resolutions
1. Approved the 2019 annual remuneration for employees and directors
2. Approved the company's 2019 consolidated financial statements and
business report
3. Approved the company's 2019 surplus distribution case
4. Approved the company's 2019 Internal Control System Statement and
Internal Control Review Report
5. Approved the company's change of external auditors
6. Approved the external auditor’s fee and its applicability and
independency assessment
2020.3.24 7. Approved the amendment to the Company's Articles of Association
8. Approved the amendment to the rules of procedure for shareholder
meetings
9. Approved the amendment to the rules of procedure for board meetings
10.Approved the proposal of releasing prohibition on management from
participation in competitive business
11. Approved the proposal of releasing prohibition on directors from
participation in competitive business
12. Approved the date, time, location and other related matters of
shareholders' meeting in 2020
1. Approved the company's first quarter of 2020 consolidated financial
2020.05.11
statements
1.Approved the proposal of finalizing 2020 Ex-dividend date
2020.6.16
2.Approved the " Board of Directors Performance Evaluation Method’'
----- End of picture text -----

Meeting Date Important resolutions	Meeting Date Important resolutions
2020.8.12 1.Approved the adoption of the company's consolidated financial statements for the second quarter of 2020 2. Approved surplus distribution proposal for the second quarter of 2020 3. Approved the assessment of if turning account receivable/other receivables/prepayments/deposited margin exceeds the normal credit line/transaction period for more than three months and the amount is significant to loan funds
2020.11.11 1. Approved the adoption of the company's consolidated financial statements for the third quarter of 2020 2.Passed the proposal to apply for USD2,000,000 with the International Financial Business Branch of Firs Bank 3.Passed the assessment of if turning account receivable/other receivables/prepayments/deposited margin exceeds the normal credit line/transaction period for more than three months and the amount is significant to loan funds
2020.12.18 1. Passed the adoption of the 2020 year-end bonus case of the Group 2. Passed the adoption of the Group's 2021 Budget 3. Passed the 2021 annual internal auditplan
2021.3.26	1. Passed the company's 2020 consolidated financial statements and business report 2. Passed the adoption of the company's external auditor’s compensation and its applicability and independence assessment 3. Passed 2020 annual distribution of remuneration for employee and director 4. Passed the company's 2020 surplus distribution case 5. Passed the company's 2020 "Internal Control System Statement" and “Internal Control System Review Report” 6. Passed the amendments of the Company's " Rules of Procedure for Shareholder Meetings” " 7. Passed the amendments of 2021 Budget 8. Passed the assessment of if turning account receivable/other receivables/prepayments/deposited margin exceeds the normal credit line/transaction period for more than three months and the amount is significant to loan funds 9. Passed theproposal of conveningshareholders’ meetingin 2021

(12) In the most recent year and at the date of publication of the annual report, the director or supervisor has different opinions on the board of directors through important resolutions and has a record or written statement. The main contents are: None.
(13) Summary of the resignation or dismissal of the company's chairman, general manager, accounting supervisor, financial supervisor, internal audit supervisor, corporate governance supervisor, and R&D supervisor in the most recent year and at the date of publication of the annual report: None.

3.5 Information on CPA Professional Fees

Information of Professional Fees to CPA By Fee

Information of Professional Fees to CPA By Fee	Information of Professional Fees to CPA By Fee	Information of Professional Fees to CPA By Fee	Information of Professional Fees to CPA By Fee	Information of Professional Fees to CPA By Fee
Name of CPA firm Name of CPA Duration of audit Remarks
Deloitte & Touche	Chen Chiang Hsun	Ho Jui Husan	2020.01.01-2020.12.31	-

Unit: NT$ in Thousand

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Fee category
Non-audit
Audit fee Total
fee
Range of amount
1 Below NT$2,000 – – –
2 NT$2,000 (inclusive) ~ NT$4,000 (exclusive) – – –
3 NT$4,000 (inclusive) ~ NT$6,000 –
4,080 4,080
(exclusive)
4 NT$6,000 (inclusive) ~ NT$8,000(exclusive) – – –
5 NT$8,000 (inclusive) ~ NT$10,000(exclusive) – – –
6 Above NT$10,000 (inclusive) – – –
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(1) When non-audit fee paid to the certified public accountant, to the accounting firm of the certified public accountant, and/or to any affiliated enterprise of such accounting firm is one quarter or more of the audit fees paid thereto, the amounts of both audit and non-audit fees as well as details of non-audit services shall be disclosed:

CPA’s Professional Fee Information

Unit: NT$ in Thousand

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Non-audit Fee
Name of CPA Name of Busine
Audit Fee Human Duration of audit [Remar]
firm CPA System ss Other Subto ks
Resour
Design Registr (note) tal
ces
ation
Chen
Chiang
Deloitte & Hsun 2020.01.01
- - - - -
4,080
Touche Ho -2020.12.31
Jui
Hsuan
----- End of picture text -----

Note: Service content is an internal control system review

(2) The replacement of the accounting firm and the audit public fee paid in the replacement year shall be disclosed as the reduction of the audit public fee and the reasons for the decrease of the audit public fee in the previous year: None
(3) If the audit public fee is reduced by more than 10% compared with the previous year, the amount, proportion and reason for the audit public fee reduction shall be disclosed: None.

3.6 Replacement of CPA information: If the company has changed the accountant in the last two years and after the period, it should disclose the matter:
(1) About previous CPA

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Date of Change 10 March, 2020
Explanation Internal adjustment from Deloitee & Touche
If the appointing
person or CPA Party
terminates or refuses
to accept the Situation CPA Appointing
appointment Person
Voluntary
suspension of NA NA
appointment
No longer accept
NA NA
appointment
Opinions and reasons
for the inspection
report other than
NA
unqualified opinions
issued within the
latest two years
-
Any Disagreement Accounting principles or practices
with the issuer
-
Disclosure of financial reports
Yes - Audit scope or steps
- Others
-
No V
Explanation: -
Other disclosures None
(Article 10,
paragraph 6, item 4
to item 7 of this
standard shall be
disclosed)
----- End of picture text -----

(2) About successor CPA

CPA Firm Deloitee & Touche	CPA Firm Deloitee & Touche
Name of CPA Chen Chiang Hsun Ho Jui Hsuan
Appointment Date	10 March, 2020

Accounting method or principle for specific transactions and consultation items and results of opinions on the None possible issuance of financial reports before appointment

Successor CPA’s Written opinions on matters of disagreement to previous None CPA

(3) Previous CPA’s reply to Article 10, paragraph 6, item 1 and item 2-3 of this standard: None

3.7 Where the company’s chairperson, general manager, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm: N/A
3.8 Any transfer of equity interests and/or pledge of or change in equity interests (during the most recent fiscal year or during the current fiscal year up the date of printing of the annual report) by a director, supervisor, managerial officer, or shareholder with a stake of more than 10 percent during the most recent fiscal year or during the current fiscal year up the date of printing of the annual report.
(1) Changes in the shareholding of Directors, Supervisors, Managers and major shareholders

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2020 As of April 30, 2021
Pledged
Title Name Holding Holding Holding Increase Pledged Holding
Increase Increase
Increase (Decrease)
(Decrease) (Decrease)
(Decrease)
All Cosmos
Investment Ltd
Chairman - - - -
(Representative:
Peng Shih Hao)
Sheng Hua Ltd
Director (Representative: - - - -
Peng Sheng Ching)
Director Hsu Ken Tsai - - - -
Director Chang Lu Chang - - - -
Maxtrength Corp
Director
- - - -
(Representative:
Peng Chia Lin)
Director Chee Kheng Hoy - - - -
Independent Lo Tze Wu - - - -
Director
Independent - - - -
Yang Yung Cheng
Director
Independent - - - -
Yeh Chung Chuan
Director
ACBT CEO Peng Shih Hao 106,000 - - -
ACBT CFO Janice Cheow - - - -
ACBT
Operation - - - -
Ling Sui Hung
General
Manager
----- End of picture text -----

		2020 As of April 30, 2021	2020 As of April 30, 2021	2020 As of April 30, 2021	2020 As of April 30, 2021
Title Name		Holding Increase (Decrease) Pledged Holding Increase (Decrease) Holding Increase (Decrease) Pledged Holding Increase (Decrease)
ACI Production General Manager Lai Chan Wai		- - - -
AESB CEO Wan Azha Bin Wan Mustapha - - - -
ACI R&D Manager Charles Then - - - -
ACI Sales & Technical Manager	Roslan Bin Arshad	-	-	-	-

  - (2) Directors, Supervisors, Managers and shareholders who hold more than 10% of the shareholdings are related persons: none.

(3) Changes in the pledge of shares of directors, supervisors, managers and shareholders holding more than 10% of the shares: None.
3.9. Shareholders who hold the top ten shareholdings, who are related to each other or relatives within the relationship of spouse, second parent, etc.

April 30, 2021; Unit of Shares in Thousand

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Relationship information, if among the
Spouse & Shareholding Remar
NAME Shareholding Minor ChildrenShareholding Arrangementby Nominee company's 10 largest shareholders any one is arelated party or a relative within the seconddegree of kinship ks
Shares % Shares % Shares % Name Relationship
All Cosmos Oil Palm Plantation Ltd Siblings
Investment Ltd Maxtrength Corp Siblings
22,500 35.13% - - - - -
(Representative: Peng Asia Win Development Ltd Sibling
Shih Hao) Sheng Hua Ltd Parents
Oil Palm Plantation All Cosmos Investment Ltd Siblings
Ltd Maxtrength Corp Siblings
(Representative: Peng 7,500 11.71% - - - - Asia Win Development Ltd Siblings -
Shih Chieh)
Sheng Hua Ltd Parents
All Cosmos Investment Ltd Siblings
Maxtrength Corp Oil Palm Plantation Ltd Siblings
(Representative: 4,500 7.02% - - - - Jade Field Holdings Inc Relatives -
Peng Chia Lin) Asia Win Development Ltd Siblings
Sheng Hua Ltd Parents
Phillip Securities
(H.K) investment 3,160 4.93% - - - - - - -
account hosted by
Cathay Bank
Merryard Ltd.
(Representative: 3,000 4.69% - - - - - - -
Peng Hsiu Lang)
----- End of picture text -----

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Relationship information, if among the
Spouse & Shareholding Remar
NAME Shareholding Minor ChildrenShareholding Arrangementby Nominee company's 10 largest shareholders any one is arelated party or a relative within the seconddegree of kinship ks
Shares % Shares % Shares % Name Relationship
All Cosmos Investment Ltd Siblings
Asia Win Oil Palm Plantation Ltd Siblings
Development Ltd 2,500 3.90% - - - - Maxtrength Corp Siblings -
((Representative: Peng Jade Field Holdings Inc Relatives
Yi Fen) Sheng Hua Ltd Parents
All Cosmos Investment Ltd Parents
Sheng Hua Ltd Oil Palm Plantation Ltd Parents
(Representative: Peng 2,500 3.90% - - - - -
Maxtrength Corp Parents
Sheng Ching)
Asia Win Development Ltd Parents
Lin Chun-Wen 1,350 2.11% - - - - - - -
First Venture Capital 1,115 1.74% - - - - - - -
Co., Ltd.
Innovative Industrial
Technology Transfer 800 1.25% - - - - - - -
Co., Ltd.
----- End of picture text -----

3.10 The number of shares held by the company, the company's directors, supervisors, managers and the company directly or indirectly controlled by the company for the same investment business, and the combined calculation of the comprehensive shareholding ratio

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December 31, 2020 Unit: Shares;%
Investments by
directors,
supervisors,
managerial
Reinvested Entities Investment by the officers and directly Total investment
Company or
indirectly controlled
enterprises
Shares % Shares % Shares %
ALL COSMOS
INDUSTRIES SDN 30,000,000 100 - - 30,000,000 100
BHD (“ACI”)
SABAH
SOFTWOODS
HYBRID 33,000,000 55 - - 33,000,000 55
FERTILISER SDN
BHD (“SSHF”)
PT ALL COSMOS
BIOTEK 28,280 83 - - 28,280 83
(“PTACB”)
PT ALL COSMOS
INDONESIA (“PT 79,200 99 800 1 80,000 100
ACI”)
GK BIO
INTERNATIONAL 1,800,000 60 - - 1,800,000 60
SDN BHD
ARIF EFEKTIF
- - 245,000 49 245,000 49
SDN BHD
----- End of picture text -----

(“AESB”)	(“AESB”)	(“AESB”)	(“AESB”)	(“AESB”)
KINABALU LIFE SCIENCES SDN BHD(“KLSSB”) - - 2,400,000 60 2,400,000 60
COSMOS BIOWOOD SDN BHD 400,000 80 400,000 80
SAWIT ECOSHIELD SDN BHD	2,000,000	40	2,000,000	40

4.0 Capital Overview

4.1 Capital and Shares

4.1.1 Source of equity

4.1.1.1 The formation of equity

April 30, 2021 Unit of Shares in Thousand, NT$ in Thousand

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Authorized Capital Paid-up Capital Remarks
Issued
Offset with
Price
Date
(NT$) Shares Amount Shares Amount Source of property Oth
capital other than ers
cash
2010.03 10 600,000 6,000.000 0.001 0.01 [Set up sh][are ] None
capital
Equity None
2010.06 10 600,000 6,000,000 30,000 300,000 conversion
(Note)
Convert None
Surplus to
2012.09 10 600,000 6,000,000 50,000 500,000
Capital
increase
Capital None
2014.08 10 600,000 6,000,000 55,000 550,000 increase by
Cash
Employee None
2015.05 10 600,000 6,000,000 56,500 565,000 stock option
conversion
Capital None
2017.06 10 600,000 6,000,000 64,034 640,340 increase by
Cash
----- End of picture text -----

Note: For the restructuring of the group, the company and the subsidiary ACI carry out a 100% equity conversion.

4.1.1.2 Type of shares

April 30, 2021 Unit of Shares: in Thousand

	April 30, 2021 Unit of Shares: in Thousand	April 30, 2021 Unit of Shares: in Thousand	April 30, 2021 Unit of Shares: in Thousand	April 30, 2021 Unit of Shares: in Thousand
Shareholding Category	Authorized Capital Remark Issued shares Un-issued shares Total
Common Stock	64,034	535,966	600,000	Listed stocks

4.1.1.3 General information on the general declaration system: not applicable

4.1.2 Structure of Shareholders

April 30, 2021 Unit of Shares : in Thousand

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Foreign
Other
Structure Governme Financial institutions
juridical Individuals Total
Amount nt body institutions &
persons
foreigners
Members - 3 14 2,447 24 2,488
Shares held - 16 2,210 15,542 46,266 64,034
Percentage (%) - 0.03% 3.45% 24.27% 72.25% 100.00%
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Note: The company has no Mainland China shareholders

4.1.3 Shareholding Distribution Status

April 30, 2021 Unit Shares, %

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Number of
Range of shares held Shares held Percentage (%)
shareholders
1 - 999 120 9,861 0.02
1,000 - 5,000 1,855 3,717,022 5.80
5,001 - 10,000 250 1,984,108 3.10
10,001 - 15,000 74 960,009 1.50
15,001 - 20,000 54 987,000 1.54
20,001 - 30,000 47 1,257,000 1.96
30,001 - 50,000 29 1,150,000 1.80
50,001 - 100,000 31 2,269,000 3.54
100,001 - 200,000 15 2,105,000 3.29
200,001 - 400,000 3 670,000 1.05
400,001 - 600,000 - - -
600,001 - 800,000 1 800,000 1.25
800,001 - 1,000,000 - - -
Above 1,000,001 9 48,125,001 75.15
Total 2,488 64,034,001 100.00
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4.1.4 List of major shareholders

April 30, 2021 Unit of Shares, in Thousand

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Shareholding Shares Percentage
Register Place
Major Shareholders held (%)
All Cosmos Investment Ltd Republic of Seychelles 22,500 35.14%
Oil Palm Plantation Ltd British Virgin Islands 7,500 11.71%
Maxtrength Corp. Republic of Seychelles 4,500 7.02%
Phillip Securities (H.K)
investment account hosted Hong Kong 3,160 4.93%
by Cathay Bank
Merryard Ltd. Republic of Seychelles 3,000 4.69%
Sheng Hua Ltd. Republic of Seychelles 2,500 3.9%
Asia Win Development Ltd. British Virgin Islands 2,500 3.9%
Lin Chun-Wen Republic of China 1,350 2.11%
First Venture Capital Republic of China 1,115 1.74%
Innovative Industrial
Republic of China 800 1.25%
Technology Transfer Co., Ltd.
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4.1.5 Market Price, Net Value, Earnings, Dividends Per Share of the Latest Two Fiscal Years, and Related Information

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Unit NT$ Thousand Shares
Year As of March 31,
2019 2020
Item 2021(Note)
Market Max. 64.80 49.35 37.55
price Min. 39.20 18.55 33.50
per share 50.88 35.82
Average 35.62
Net value Before distribution 31.95 31.02 29.46
per share After distribution 31.95 31.02 29.46
Weighted Average Shares 64,034 64,034 64,034
Before Retrospective 0.56 1.28 0.42
Earnings
Adjustment
per share
After Retrospective
Adjustment
Cash Dividend 1(Note) 1(Note)
Stock Dividend
from Retained
Free
Earnings
Dividends placeme Stock Dividend
per share nt
from Capital
Reserve
Accumulated
undistributed dividends
Price-earnings ratio 90.86 27.98
Return on
Price-dividend ratio 50.88 35.82
Investment
Cash dividend yield rate 1.97% 2.79%
analysis
(%)
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Note: The 2020 surplus distribution case was approved by the board of directors on March 26 2021.

4.1.6 Company Dividend Policy And Implementation Status

The Dividend policy as set forth in the company's articles of association

According to Article 129 of the Company's Articles of Association, the main provisions of the dividend policy are as follows:

Except as otherwise provided by the Listing Cabinet Act, if the company makes a profit before tax in the year, the company should make a profit before tax: (1) up to 10% (10%), the lowest is One (1%) as an employee's remuneration (including employees of the company and/or related employees) (hereinafter referred to as "employee remuneration"); and (2) up to 10% (10%) as director's remuneration (hereinafter referred to as " Director's remuneration"). Regardless of the above, if the company still has accumulated losses in previous years, the company should reserve the amount of remuneration before the employee's remuneration and directors' remuneration. Employees' remuneration and director's remuneration are available in cash and/or in accordance with the provisions of the laws of the British Cayman Islands, the provisions of the Listing Rules and the resolutions of the board of directors, which are more than two-thirds of the directors' attendance and the majority of the directors' consents. Employee remuneration and Director remuneration can be paid in cash and/or

stock. The above-mentioned resolutions on the issuance of employee remuneration and directors' remuneration shall be reported to the shareholders at the shareholders' meeting after the resolution of the board of directors is passed.

In addition, according to Article 130A of the company's articles of association, the company may handle surplus distribution or loss appropriation after the end of each half of the fiscal year.

Except as otherwise provided by the Company Law and the Listing Act, if the company's annual total final accounts have a surplus, the Board of Directors shall formulate the surplus distribution case and submit it to the shareholders' meeting in the following manner and order:

(1) The tax payable in accordance with the law;
(2) make up for the accumulated losses of previous years (if any);
(3) 10% of the provisions of the Listing Rules Act is the statutory surplus reserve, except when the statutory surplus reserve reaches the paid-up capital of the company;
(3) to make a special surplus reserve in accordance with the requirements of the Listing Cabinet Act or the Administration; and
(5) According to the amount of the current year's surplus after deducting the above items (1) to (4), the accumulated undistributed surplus in the previous period is the available surplus, and the available surplus can be distributed by the Board of Directors. The shareholders' meeting will be distributed according to the resolution of the listing cabinet law. Dividend distribution can be issued in cash dividends and/or stock dividends. Under the laws of the British Cayman Islands, the minimum dividend amount should be at least 10% of the current year's surplus minus items (1) to (4) above, and the proportion of cash dividend distribution shall not be less than 50% of the total shareholder's dividend.

2. Status of implementation

The Company's 2020 surplus distribution proposal was approved by the board of directors’ meeting on March 26, 2021 with a cash dividend of NT$1. The Company expects to hold shareholders’ meeting on June 28, 2021 to report on the distribution of cash dividends.

4.1.7 The impact of the proposed free share placement on the company's operating performance and earnings per share

The company did not have a free share placement this year, so this assessment is not applicable.

4.1.8 Remuneration for Employees, Directors and Supervisors
The employee's remuneration and the number or scope of remuneration of Directors

and Supervisors as set out in the company's articles of association: If there is any pre-tax profit in the year specified in the articles of association of the company, it should be paid in the pre-tax profit: (1) Maximum is 10%, minimum is 1% as employee remuneration; and (2) maximum 10% as Director's remuneration.

In the current period, the estimated basis of the remuneration for employees, directors and supervisors, is calculated based on the number of shares of employees paid by stocks and the actual distribution amount are accounted for when there is a difference between the estimated number of shares and the estimated number of shares.

The Company will estimate the remuneration amount of employees and directors and the allotment of shares according to the company's articles of association. If the actual amount of the allotment and the estimated number of shares are different, the accounting treatment will be included in the actual annual adjustment of the cost.

The Board of Directors through the distribution of remuneration:
- (1) In accordance with the articles of association of the company and approved on March 26, 2021 board of directors’ meeting, it is approved that the distribution of employees' remuneration of NT$2,695,756 and the directors' remuneration of NT$1,797,171, accounting for 3% and 2% net profit before tax. And there is no difference with the annual estimated amount of recognized expenses
- (2) The proportion of employees' remuneration paid by stocks to the total net profit after tax and the total amount of employees' remuneration: not applicable.
The actual allotment of the employee's dividends in the previous year and the directors' and supervisors' remuneration (including the number of shares, the amount and the share price), the difference with the amount, reason and handling situation between the employee's dividends, the director's, and the supervisor's remuneration shall be stated:
- (1) Remuneration for employees in 2019 is NT$1,128,122 and Directors' remuneration is NT$752,081
- (2) The above amount is different from the recognition of the remuneration of employees, directors and supervisors and should state the difference, cause and resolution: no difference.
4.1.9 The situation in which the company bought back the shares of the company: None.

4.2. the company debt (including overseas corporate bonds) handling situation: none

4.3. Preferred Stocks handling situation: None.

4.4. The situation of overseas depositary receipts: None.

4.5. Employee stock option certificate and restrictions on employee rights:

(1) Employee stock options certificate of the company that has not expired: None.
(2) The names, acquisitions and subscriptions of the top ten employees who have obtained the employee stock option certificate and the number of the top ten employees who can obtain the warrants:

Unit : Thousand Shares; NT$ in Thousand

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

Executed Not executed
The
number SubscriptionSubscriptionSubscription The Subs Subs Subs The
of Quantity price Amount number of cripticripticripti number
shares (NT$) shares on on on of
Number subscribedQuan PriceAmo shares
Designation Name shares of acquiredto the to the totalnumber of tity unt acquiredto the
total
acquired number issued total
shares number
of
of
issued
issued
shares
shares
CEO Peng
Shih
Hao
CFO Janice
Cheow
Senior Lim
manager Tau
Boon
ACI Peng
Chairman Sheng
Ching 961 64% 961 30 28,830 1.70%
ACI Lai
General Chan
Manager Wai
ROSLA
ACI N
Manager ARSHA
D
SSHF Pan Chi
manager Yang
(note)
Staff Tai
Hong
Wen
Staff Chun
Choon
Hong
Staff Peng Yi
Fen
Staff Tai
Fook
539 36% 539 30 16,170 0.95%
Leong
Staff Gan
Lee
Poh
Staff Tee
Hwee
Yin
Staff Kuek
Lee
Chin
M
a
n
a
g
e
r
E
m
p
l
o
y
e
e
----- End of picture text -----

	Staff Cheong Sit Lee Staff Choo LeeHia Staff Tan Teck Siong	Staff Cheong Sit Lee Staff Choo LeeHia Staff Tan Teck Siong
	Staff	Tan Teck Siong

The accumulated balance of employee stock option certificates issued by the Company until the date of publication of the annual report has not exceeded 15% of the total number of issued shares.

(3) The situation of private equity employee stock option certificates in the last three years and up to the date of publication of the annual report: None.

4.6 Restricting the rights of employees to deal with new shares: None.

4.7 New shares issuance in connection with mergers and acquisitions : None.

4.8 Implementation of the fund utilization plan:

As of the first quarter of the annual report, the previous issue or private placement of securities has not been completed or has been in the last three years.

Completed and the project benefits have not been revealed: not applicable

5.0 Operational Overview

5.1 Business content

5.1.1 Business scope

(1) Main contents of the business

The company is a professional biochemical compound fertilizer manufacturer, mainly engaged in the R&D, manufacturing and sales of bio-composite fertilizers of organic, microbial and chemical raw materials. The main business base is in Malaysia.

(2) Business share

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Unit NT$ in Thousand
2018 2019 2020
Year
Net Operating Net Operating Net Operating
Products revenue Proportion revenue Proportion revenue Proportion
Amount Ratio (%) Amount Ratio (%) Amount Ratio (%)
Biochemical
Compound 1,941,665 72.25 1,028,292 58.17 930,105 56.62
Fertilizer
Chemical
708,234 26.35 675,273 38.20 712,678 35.19
Fertilizer
Others 37,682 1.40 64,134 3.63 134,512 8.19
Total 2,687,581 100.00 1,767,699 100.00 1,642,783 100.00
----- End of picture text -----

(3) Current Commodity Items of The Company

3) Current Commodity Items of The Company	3) Current Commodity Items of The Company
Item Description
Biochemical Compound Fertilizer A three-in-one compound fertilizer of organic matter, microorganisms and chemical raw materials, mainly used in oil palm planting.
Chemical Fertilizer A single or compound fertilizer composed of chemical elements such as nitrogen, phosphorus and potassium can provide nutrients necessary for plant growth and development, and maintain high crop yield.
Microorganism	Development and production of beneficial microorganisms and disease prevention microorganisms

(4) New Products Planned To Be Developed

The company focuses on the importance of soil and environmental protection, and actively develops multi-functional fertilizer products to replace the environmental damage caused by traditional chemical fertilizers. At present, the new products planned

by the company are as follows:

Research Project Main Technique Application Note	Research Project Main Technique Application Note	Research Project Main Technique Application Note
Phage Biofertilizer	The phage which can control the R. solanacearum is screened in the	It can be used for the control of bacterial crop diseases caused by

Research Project Main Technique Application Note	Research Project Main Technique Application Note	Research Project Main Technique Application Note
wastewater, and the phage preparation is produced by using the transgenic Escherichia coli as a host for producing the phage, and then added to the fertilizer. R. solanacearum, and can be applied to a variety of peppers, tomatoes, ginger, potatoes and bananas which are often attacked byR. solanacearum.
Special nitrogen-fixin g biological fertilizer for rice and green leafy vegetables Three high-efficiency nitrogen-fixing bacteria were transferred from MARDI. After optimization of strain culture conditions and yield amplification, high-concentration bacterial liquid was produced and added to fertilizer to improve soil nitrogen fixation performance. High-efficiency nitrogen-fixing bacteria promote the growth of rice and short-term crops, reduce the use of chemical nitrogen fertilizer, and also use in the early stage of oil palm seedling emergence.
Anti-white root Disease Endophytic Trichoderma was screened from the roots of healthy plants, and spores were optimized by culture to control diseases. Trichoderma viride combines with other fertilizer ingredients to biologically control the common fungal disease of the rubber tree (Rigidoporus lignosus) and supplement its nutritional needs.
Oil palm by-product degradation A variety of indigenous degrading bacteria are mixed and processed for various by-products of the palm oil mill, and the finished product is organic fertilizer. The strain mixture is used to catalyze the degradation of oil palm empty fruit bunches and other organic raw materials, and to solve the excessive production of waste oil in the palm oil industryas organic fertilizer.
Value-added agricultural by-products	The addition of Trichoderma for different agricultural by-products produces a control agent for manufacturers/farmers in a more economical way, and also solves the problem of excess by-products. Different by-products and different Trichoderma products are paired with each other to debug a stable, suitable concentration and economical formula.	Excessive agricultural by-products cost farmers/vendors excessive waste disposal fees. By-products that return to the field without proper treatment may cause pathogens to breed. The value-added agricultural by-products are designed to add beneficial bacteria to different raw materials, ensuring that the product has the function of controlling disease when

Research Project Main Technique Application Note	Research Project Main Technique Application Note	Research Project Main Technique Application Note
recycled into the field. This program can be used in oil mills, vegetable orchards, flower beds, foodprocessing plants, etc.
Disease resistant seedling inoculation	Inoculate disease-resistant Trichoderma for different crop seedlings. The use of Trichoderma species is adjusted according to the crop and medium.	From the nursery stage to the field, the seedlings are subjected to multiple inoculation and root sampling tests to ensure that the roots are attached with endophytic fungus, and that they have sufficient disease resistance to the disease when entering the harsh field. Currently apply in palm (anti-ganoderma disease) and rubber markets (anti-white root disease).

5.1.2 Industry Overview

(1) Current Status And Development Of Industry
A. Industry Status

Among the agricultural materials, the use of fertilizers is the largest. According to the production process, the fertilizers can be roughly divided into chemical fertilizers, organic fertilizers and biological fertilizers. Each of the fertilizers has its advantages and disadvantages, and it needs to be integrated to exert the advantages of the fertilizers, so as to achieve uniform development of the industry and complement each other.

Chemical fertilizers generally have direct and rapid effects, and are more competitive in price than biological fertilizers and organic fertilizers, so they are easily accepted and adopted by users. However, chemical fertilizers often cause over-application per unit area due to ease of use, resulting in weak resistance of plant, high acidic and deterioration of soil fertility, and high concentrations of nitrate in agricultural products. It is more difficult to estimate the environmental pollution caused by long-term or improper application of chemical fertilizers. At present, agricultural production uses organic fertilizers, microbial fertilizers and mineral fertilizers to replace parts of chemical fertilizers, and the use of microbial fertilizers to promote the utilization efficiency of chemical fertilizers is a soil biotechnology that is currently worth of attention.

Organic fertilizers are made from the residues of animals, plants or microorganisms and their excreta. Although organic fertilizers often contain microorganisms in nature, they are naturally grown rather than artificially selected and cultured. It belongs to microbial fertilizer. If a specific artificially selected microorganism is added to the organic fertilizer, it may be referred to as an organic composite microbial fertilizer or a microbial composite organic fertilizer. The application advantage of organic fertilizer is that the effect is mild and less harmful to the soil, and the application is helpful to the ecological maintenance of the soil. Due to the volume is large, the application cost is high, and the production of compost requires a large area of land and plant equipment, which is time-consuming and labor-intensive. The production process needs to solve the odor and wastewater problems, and it is still necessary to avoid large or improper application.

Biological fertilizer refers to a specific preparation for cultivating active microorganisms or dormant spores, such as bacteria (including actinomycetes), fungi, algae, etc., and their metabolites, and is used in crop production to provide plant nutrients or promote nutrient utilization. Biological fertilizer has the advantages of low pollution, not harmful, low application rate and ecological friendly, but it has a certain shelf life, and the effect is more susceptible to environmental influences. The fertilizer efficiency is slower, sometimes it was applied together with chemical fertilizers and organic fertilizers. Through an effective management model, biological fertilizers can improve the availability of nutrients in the soil, improve soil properties, antagonize pathogens in soils or implants, reduce or replace chemical fertilizer application, and improve problems caused by excessive fertilization.

In recent years, with the increasing demand for global crops, the erratic weather, changes in soil and ecological problems, and the rising awareness of environmental protection, bio-fertilizers has become more important in agricultural-related markets. As the demand for bio-fertilizers increase rapidly, the company continues to deepen research and development in the field of beneficial micro-organisms, by having a wealth of useful microbiological data, it is able to develop and compound multi-functional intelligent biochemical compound fertilizers according to different soil and pest problems faced by each customer. Optimize and quantify core technologies for beneficial microbes as a competitive advantage in the industry. MarketsandMarkets market survey predicts that by 2025, the global biofertilizer market is estimated to reach 3.9 billion US dollars. According to “Current world fertilizer trends and outlook to 2022” from FAO, as of 2018, the world used about 189 million tons of fertilizers, an increase of 1.3% over 2017. Asia is the main fertilizer market, and Indonesia and Malaysia are the main fertilizer consumption countries.

According to the "2019-2023 Fertilizer Outlook" published by IFA in June 2019, the global fertilizer demand in 2019/2020 is about 195 million tons, and it is estimated that fertilizer demand will only slightly increase to 204 million tons in 2023/2024. In 2019-2023, the investment in the production equipment of the fertilizer industry is expected to exceed US$110 billion, and the newly added capacity is about 6,500 tons. In five years, the demand will increase by 1.3% annually, and the supply will increase by about 1.6%.

B. Industry Development

(A) Malaysia

According to the Malaysian Bureau of Statistics, the total planting area in Malaysia is about 7.8 million hectares. The amount of fertilizer used in 2013-2019 and the output of fertilizer in Malaysia have also grown steadily. In 2013, Malaysia produced 2.62 million tons of fertilizers. By 2019, the output has increased to 3.72 million tons. Malaysia's overall fertilizer production has grown year by year with the total area planted in Malaysia, indicating that the use of fertilizer is still an indispensable investment in Malaysian agricultural planting.

In recent years, with the increase in global crop demand and weather changes, soil and ecological damage, global environmental awareness has risen, although the impact of international oil palm price fluctuations and the Covid-19 epidemic in the past two years resulted in the tendency of rising usage of chemical fertilizers, however, plantations have a certain knowledge of the advantages of biochemical compound fertilizers, and gradually have the concept of crop disease prevention. The future market of compound fertilizers and plant vaccines is still promising.

The fertilizer market in Malaysia can be divided into two major items: unit fertilizer and compound fertilizer. According to Universiti Putra Malaysia, Malaysia's unit fertilizer production accounted for 55.62% of the Malaysian fertilizer market in 2014, but with the strict rules of the Malaysian governments to hire foreign workers, labor costs have increased, and the use of unit fertilizers is facing the dilemma of labor shortage and labor costs. The use of compound fertilizer by large-scale planting groups has gradually increased. The company has always in the leading position in Malaysia’s biochemical compound fertilizer market. .

Malaysian fertilizer market structure in 2014

==> picture [296 x 174] intentionally omitted <==

Source Universiti Putra Malaysia

(B) China

Mainland China is the world's largest fertilizer user, but under large-scale application, organic fertilizers are insufficient, which leads to the destruction of soil fertility structure and low fertilizer utilization. The Chinese government has announced that chemical fertilizers will be gradually replaced, and the goal of reducing chemical fertilizers is to use a combination of microbial fertilizers and chemical fertilizers. China has been engaging in developing microbial fertilizers for nearly 50 years, has more than 300 bio-fertilizer producers with an annual output of over 500,000 tons and bio-fertilizer used areas reaching 167 million hectares. recent years, the concept of microbial fertilizer management in mainland China has evolved from the past guarantee of ingredients and fertilizer effects to the safety control of microbial strains, as to whether the microbial fertilizer has the declared effectiveness, the market mechanism will eliminate the undesirable ones. In order to manage the microbial materials in the market, mainland China continues to develop and implement regulations, has a dedicated testing center to assist in the development of technologies and standards, and uses big data to obtain appropriate fertilizer formulations.

(C) Taiwan

Taiwan is located in a subtropical region, and the climate pattern of high temperature and rain has a great influence on the activities of soil microorganisms. In recent years, farmers have introduced more effective microorganisms in the production of crops, using microorganisms to promote production and improve soil. In order to cooperate with the new agricultural promotion plan, the Taiwan government promotes domestic organic and environmentally friendly farming. Since 2017, it has strengthened the promotion of organic fertilizers and added subsidies for microbial fertilizers and organic compound fertilizers, and further guided farmers to reduce the use of chemical fertilizers to promote domestic organic and friendly environmental development.

(2) Industrial Up stream, Middle And Downstream Relationship

The company is a professional fertilizer manufacturer, mainly producing compound fertilizers consisting of organic matter, microbes and chemical raw materials. The main raw materials of the products are nitrogen, phosphorus, potassium and other inorganic chemicals, organic raw materials and microbial strains. After the manufacturer processes, the finished products will deliver to downstream large-scale farms, dealers and farmers, the industrial relationship map is as follows:

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A. Upstream Raw Materials

(A) Chemical Fertilizer

Also known as inorganic fertilizer, mainly urea, ammonia sulfate main production plant, phosphate mine processing plant, potassium mine developer, magnesium oxide processing plant and boron supplier. Since there is no large-scale production or mining of inorganic chemical minerals such as nitrogen, phosphorus and potassium in Malaysia, the main source still relies on imports. Due to the limited natural resources of nitrogen, phosphorus and potassium, as the world's population grows and the demand for food and crops increases, the use of fertilizers by farmers is increasing, and the demand and prices of raw materials such as nitrogen, phosphorus and potassium are stable. According to the "World Fertilizer Trends and Outlook to 2022", the supply and demand of nitrogen, phosphorus and potassium raw materials remain minor changes. On the whole, the main raw materials for chemical fertilizers are nitrogen, phosphorus and potassium. Therefore, there is no supply shortage of the main raw material sources of the

company, which will affect the operational risks of production.

(B) Organic Fertilizer

The organic fertilizer raw materials are mainly waste residues of coffee processing plants, cocoa processing plants, palm oil processing plants or other organic raw materials. As Malaysia is a major palm oil exporter in the world, the large amount of waste residue after the refining of palm oil has caused the organic raw materials to fluctuate little over the years. Therefore, the organic fertilizer raw materials have no operational risks arising from insufficient supply or significant price changes.

(C) Microorganism

The fertilizer market in Malaysia is still dominated by chemical fertilizers, As microbial fertilizers are in the growth stage in Malaysia, more and more companies in Malaysia are beginning to invest in the microbial market. The main sources of microbial bacteria currently produced by the company are self-developed and cooperating with other academic or government organizations, such as the Malaysian University of Technology and the Malaysian Oil Palm Bureau (MPOB), the company has successfully developed and mass-produced microbial bacteria including nitrogen-fixing bacteria, nitrifying bacteria, phosphate-dissolving bacteria and yeast. Therefore, the microbiological sources required by the Company's products are not yet expose to the operational risks arising from insufficient supply or significant price changes.

B. Middle stream - Fertilizer Processing And Manufacturing

The Malaysian fertilizer manufacturing industry is a completely open market. In Malaysia, no biochemical compound fertilizer manufacturer is sufficient to monopolize the market. Therefore, the market price of biochemical compound fertilizer is determined by the market supply and demand mechanism. In recent years, with the increase in salary and the implementation of the Malaysian completion protection law, the manpower costs of fertilizer manufacturers have been rising, the gross profit has been compressed, and the price movements of inorganic chemicals such as nitrogen, phosphorus and potassium,, the appreciation of the US dollar exchange rate, and other factors will also affect the fertilizer manufacturing industry.

In recent years, the values of environmental protection and eco green industry have been advocated in the society, the environmental protection concept of farmers has continued to increase. In addition, the application of chemical fertilizers has caused the problem of soil deterioration becoming more serious, and the acidification of soil is not suitable for farming or the rapid decline of plant resistance has reduced farmer’s income. As a result, farmers began to accept the concept of “developing sustainable agriculture” that decrease the use of pure chemical fertilizers in hope of

maintaining ecological balance, reduces environmental pollution, and ultimately

reduces production costs and energy consumption. Therefore, the acceptance of biochemical compound fertilizers produced by the company has gradually increased in the market, and revenue has continued to grow.

C. Downstream - Fertilizer User

The domestic fertilizer users in Malaysia are mainly government or privately owned landowners, farmers' associations and general farmers. The company has long-term cooperation with government-related investment companies, large private enterprises or professional oil palm plantation companies. According to the Malaysian Bureau of Statistics, agricultural-related activities accounts for 7.5% of Malaysia’s GDP in 2018, in which 37.9% is from oil palm plantation. while Malaysia and Indonesia are the world's major palm oil producers, so the downstream fertilizer market should not be significantly changed.

(3) Various Development Trends Of Products

Traditional fertilizers are mainly made up of organic fertilizers, which are made from animal, plant or microbial residues and their excreta. For example, dead leaves, grass ash, rice bran, leftovers, leftovers, bean cakes and oilseeds are all sources of fertilizer. With the advancement of technology, chemical fertilizers made from chemical substances have become the main products in the market. Chemical fertilizers have the advantages of quick effect and low price, and are used by consumers for a long time. However, with the long-term use of chemical fertilizers, the plant resistance is weakened, the soil acidification is degraded, the agricultural products contain high concentrations of nitrates, and the environmental pollution is more serious. Therefore, consumers gradually replace the unit fertilizer with multifunctional fertilizers. In addition to providing nutrients, increasing production capacity and yield, biochemical compound fertilizers have fertilizers that prevent pests and diseases. For example, the company developed Anti-Ganoderma Lucidum product fertilizer as therapeutic for oil palm disease in 2012.

(4) Competitive Situation

Due to the low entry barriers for the production and sale of chemical fertilizers, the fertilizers used in the market are still dominated by chemical fertilizers. However, with the promotion of the company and the increase in customer use, the multi-functional compound fertilizer is gradually accepted by more consumers. The fertilizer produced by the company is mainly composed of organic, micro-organisms and chemical substances. Currently, there are only few manufacturers having the similar products in Malaysia, hence less competition; The Company ‘s direction is to strive for making more chemical fertilizer consumers to switch to multi-functional fertilizers.

5.1.3 Technology and R&D Overview

(1) Company Technology and R&D Overview

The company continues to focus on research and development and is one of the few companies that have successfully used beneficial microbiota (EM) in organic and bio-fertilizers. Besides her own research achievements, the company has also worked with other agencies such as the Malaysian Palm Oil Board and the Malaysian Rubber Board to develop effective microbial-based fertilizers. Follow by the MPOB F4 oil palm fertilizer being successfully produced, the GanoEF which specifically for prevention and treatment of Ganoderma Lucidum was developed.

The interaction between plants and microorganisms is an important issue in today's agricultural biotechnology. The company conducts research and product development for plant beneficial microorganisms, harmful microorganisms and nematodes on the basis of modern biology and the use of modern biotechnology. Beneficial microorganisms, such as the screening and application of growth-promoting bacteria, the improvement of the efficiency of phosphate-dissolving bacteria and nitrogen-fixing bacteria; the detection of harmful microorganisms, such as understanding the pathogenic mechanism of harmful microorganisms and increasing the resistance of plants themselves; Infection rules of important crops, screening and application of natural nematode resistance.

In order to enhance the understanding of the beneficial microbiota and to consider its potential and future development, the company established a research and development center in the Biotechnology Zone of the Malaysian University of Technology in Johor to develop and cultivate beneficial microorganisms. The company will also work with local and overseas companies to provide expertise and formulas to meet their demand. The company's research and development direction provides the development of microbial flora, biocontrol series, the production of single beneficial bacteria, the diversification of bacterial transport applications and field technical support.

The company has cooperated with the Malaysian University of Technology since 2009, and established the company's independent research and development team in 2011. The company now has mature facilities and skills, using the original ecological strain screening technology to separate, screen and preserve various bacteria. At present, more than 500 strains have been established. These strains can be accurately commercialized through identification tests and evaluation platforms for anti-antagonism, nutrient exchange, immune induction, and adversity protection for market positioning. In the fermentation production and cultivation of strains, we have developed quantification according to the growth characteristics and environmental requirements of each strain, optimized the fermentation production process, and cultivated a high concentration of bacterial liquid in a short time and cost savings.

The R&D team of the company often communicates with customers to understand the current needs of farmers and the problems to be solved in the field. For example, after the GanoEF product is launched into the market, the R&D team will go to different fields to collect sample the active substance of the roots and soil for laboratory quantitative tests. Test reports will be provided to the farmers, simultaneously increase the diversity of research samples in order to make the tests more accurate. Some customers required to do experiment in their own field before selecting a product. the R&D team will work with the customer to formulate the experimental design, present the performance of the product scientifically, and improve the customer’s trust and confidence towards to the product and company with perfect pre-sales and after-sales service.

The complete R&D and technical team can support the development of the company's products, from strain screening, preservation, optimization and quantification, productization, field trials, to customer after-sales service and other additional consulting services are the basis for the company's sustainable development. The R&D team established by the company can support the operation of microbial screening to production, and can also separate and purify the strains of soil, roots, fertilizers, etc. The company established a set of automated 5-50-500L fermentation tanks in 2015; this equipment platform can support more accurate quantitative production processes, develop culture parameters for the mass production needs of different strains, shorten fermentation time, reduce energy consumption and increase the concentration of bacteria, thus reducing production costs.

(2) Research Development Situation

The company always has great interest for research and development. Besides conducting new product research and development, it has also continuously improve the existing products and process adjustments to enhance the production efficiency and quality. The research results are as follows:

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Product Name Product Usage
Year
ACI was jointly developed with the Malaysian
Oil Palm Board (MPOB).
Specially used to increase the production of oil
palm trees.
Ingredients:
MPOB F4 Chemical nutrients: chemical nutrients such as
(Biochemical nitrogen, phosphorus, potassium, magnesium,
2008
Compound boron and some trace elements.
Fertilizer) Microorganisms: 8 microbial populations that
promote the absorption of chemical fertilizers
such as NPK and transform soil conditions.
Organic matter: Improve soil acidity and
alkalinity, increase chemical fertilizer utilization,
increase soil fertility and water retention.
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Product Name Product Usage
Year
ACI and the Malaysian Oil Palm Board (MPOB)
jointly developed.
Ingredients:
Chemical nutrients: a variety of chemical
components and the addition of micronutrients to
provide efficient growth and optimum yield of
plants.
Organic substances: improve soil acidity and
GANO EF alkalinity, increase chemical fertilizer utilization,
2012 Disease-resistant increase soil fertility and water retention.
fertilizer Effective microbial population: Improve soil
biological microbial species, fix plant nitrogen
nutrition, and promote phosphate fertilizer
dissolution.
Composite active agents: Hendersonia
(endophytic fungi) and chitin, a Ganoderma
lucidum biocontrol agent and plant protection
inducer to help control and prevent the spread of
oil palm Ganoderma lucidum.
ACI's fertilizer products developed for the water
soluble fertilizer market.
Low-temperature compaction technology, which does
Asacan not require granular fertilizers made of adhesive
Water Soluble components, so it can be formulated with high NPK
2013
Granular ratio products.
Fertilizer Energy-saving production systems reduce costs, price
is popular, and farmers are more economical.
A variety of customized formulations. (NPK + trace
elements or ASACAN NK + magnesium oxide)
Pepper special fertilizer jointly developed by ACI and
MPB15-5-14 Malaysian Pepper Board. (MPB)
2014 Pepper special Three-in-one compound fertilizer provides the best
fertilizer nutrients for pepper trees, combined with beneficial
bacteria and high quality organic matter.
ACI was jointly developed with the Malaysian Oil
Palm Board (MPOB).
Formulated specifically to increase the production of
oil palm trees, developed for palm planting in
MPOB F4
2014 Sarawak, East Malaysia.
Premium
MPOB F4 formula is added to Azomite, a mineral
powder containing A~Z trace elements, which gives
the plant a perfect growth element.
Suitable for high rainfall climate use.
Life control products containing endophytic fungus
According to the bacteria selected by the customer, it
can be divided into wet table powder and organic
Tricho Acti Plus
2015 medium.
Trichoderma
Effective control of fungal diseases.
Suitable for palm, rubber, banana and other crops.
Product content can be adjusted according to price.
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Product Name Product Usage
Year
Development of value-added technology for
by-products of non-empty fruit bunches.
Value-added
Convertible pomace is a low-cost soil improver,
agricultural
fertilizer and biocontrol agent.
by-products
2016 Better utilization of by-products of the farm and oil
(palm oil
mills.
industry)
Customized addition of different functional bacteria,
such as nutrient supply or biological control.
Add in Trichoderma to fight Ganoderma lucidum.
ACI is jointly developed with the Malaysian.
Agricultural Research and Development Agency
MARDI F1
(MARDI).
Special nitrogen-fixing biological fertilizer for rice
2017 and green leafy vegetables.
Develop soil conditions using German technology to
effectively increase soil pH and supplement K2O and
K Neutralizer
TE nutrients.
Suitable for palm, rubber, banana and other crops.
Fruit king durian launched with the technology of
biological compound fertilizer with application of
potassium sulfate.
2018 DUR 13-3-21 Specially used for the fruit period, which can greatly
improve the quality of the fruit and protect soil oil
acidification caused by excessive potassium sulfate
and decrease disease.
Co-developed by ACI and MARDI.
Use beneficial microorganisms to induce plant roots to
produce plant hormones, activate the disease-resistant
DIEBACK immune system, and enable plants to acquire or
BUSTER increase resistance to pathogens. Spray a certain
concentration of biological inducer on the planted soil
to effectively improve the resistance of papaya to
2019 disease.
Co-developed by ACI and MARDI.
The nitrogen-fixing bio-fertilizer specially used for
rice and green leafy vegetables, can increase the
N-Bio Booster nitrogen element in the soil and make the crop
healthier. Through 3 years of experiments, the output
can be increased by more than 12%. Relative diseases
are also reduced.
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(3) Research And Development Personnel And Their Academic Experience

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Unit Headcount %
Year
2018 2019 2020
Education Qualification
Master's Degree and above 4 4 4
College 5 4 6
High School And Below - - -
Total 9 8 10
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Year EducationQualification 2018 2019 2020	Year EducationQualification 2018 2019 2020	Year EducationQualification 2018 2019 2020	Year EducationQualification 2018 2019 2020
Numbers of Company Employee 460 374 350
Percentage of the Company Employee(%)	1.96	2.14	2.86

(4) R&D Expenses Invested In The Past Five Years

(4) R&D Expenses Invested In The Past Five Years	(4) R&D Expenses Invested In The Past Five Years	(4) R&D Expenses Invested In The Past Five Years	(4) R&D Expenses Invested In The Past Five Years	(4) R&D Expenses Invested In The Past Five Years	(4) R&D Expenses Invested In The Past Five Years
Unit: NT$in Thousand Year Item 2016 2017 2018 2019 2020 Research Development Costs 5,855 4,456 6,587 4,655 2,541 Operating Income 2,065,543 2,263,652 2,687,581 1,767,699 1,642,783 Proportion Of Revenue(%) 0.28 0.20 0.25 0.26 0.15
Research Development Costs 5,855 4,456 6,587 4,655 2,541
Operating Income 2,065,543 2,263,652 2,687,581 1,767,699 1,642,783
Proportion Of Revenue(%)	0.28	0.20	0.25	0.26	0.15

(5) Successfully Developed Technology Or Products In The Past Five Years

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Product
Year Product Usage
Name
Life control products containing endophytic fungus
According to the bacteria selected by the customer, it can
Tricho Acti be divided into wettable powder and organic medium.
2015
Plus Effective control of fungal diseases.
Suitable for palm, rubber, banana and other crops.
Product content can be adjusted according to price.
Development of value-added technology for by-products
of non-empty fruit bunches.
Value-added
Convertible pomace is a low-cost soil improver, fertilizer
agricultural
and biocontrol agent.
2016 by-products Better utilization of by-products of the farm and oil mills.
(palm oil
Customized addition of different functional bacteria, such
industry)
as nutrient supply or biological control.
Add in Trichoderma to fight Ganoderma lucidum.
ACI is jointly developed with the Malaysian Agricultural
Research and Development Agency (MARDI).
MARDI F1
Special nitrogen-fixing biological fertilizer for rice and
green leafy vegetables.
Designed to improve and regulate acid soil problems.
Rapidly improve nutrient absorption rate effectively.
2017 Increase soil activity and soil organic content.
Improved soil also supplies nitrogen, potassium, sulfur
K-NEUTR
and other elements to improve the color, fragrance, taste,
ALIZER
and quality of crops.
K Compared with traditional regulators, K-Neutralizer is
more effective and lasting. The experimental results
maintain the soil pH at around 6 for 9 months to a year.
Fruit king durian launched with the technology of
biological compound fertilizer with application of
potassium sulfate.
DUR
2018 13-3-21 Specially used for the fruit period, which can greatly
improve the quality of the fruit and protect soil oil
acidification caused by excessive potassium sulfate and
decrease disease.
Co-developed by ACI and MARDI.
Use beneficial microorganisms to induce plant roots to
produce plant hormones, activate the disease-resistant
DIEBACK
immune system, and enable plants to acquire or increase
BUSTER
resistance to pathogens. Spray a certain concentration of
biological inducer on the planted soil to effectively
2019 improve the resistance of papaya to disease.
Co-developed by ACI and MARDI.
The nitrogen-fixing bio-fertilizer specially used for rice
N-BIO and green leafy vegetables, can increase the nitrogen
BOOSTER element in the soil and make the crop healthier. Through
3 years of experiments, the output can be increased by
more than 12%. Relative diseases are also reduced.
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5.1.4 Long-Term And Short-Term Business Development Plans

(1) Short-Term Business Development Plans

A. Marketing Strategy

(A) Expanding The Mainstream Market

The company's main product is biochemical compound fertilizer. After nearly 20 years of continuous development, the expansion of the Malaysian market has achieved fruitful results in recent years and major local large plantations in Malaysia are mostly our customers. In addition to stabilizing the customer relationship of large plantations, we further promoted the sale to private plantations (open market), continued to improve product visibility, and assist local farmers to improve the soil environment while increasing production output.

(B) Deep Market Strategy

Through briefing sessions, the company will continue to educate agricultural technicians and use advertising marketing to expand sales channels to open up local markets and attract medium and large-scale planting companies, state-owned agricultural companies and distributors.

a. In the Indonesian market, the company will hold a product use briefing session in the first-line rural areas, and continue to educate the use of agricultural technicians and fertilizer knowledge.

b. In the Vietnamese market, the company will use advertising marketing to continue to expand sales channels.

B. Research direction

Through market research, the company is committed to developing functional, environmentally friendly customized products to provide better quality and cost saving to customers. It is also planned to continue to develop sophisticated market demand through efficient R&D management, and to enhance R&D technology and microbial bacteria libraries from marketing, R&D, production testing and other products to produce products that meet market needs.

C. Production Strategy

The company's current main operation is Malaysia. It plans to establish a cooperative distribution base in the ASEAN countries to expand the market quickly and effectively through the ASEAN national agent cooperation.

D. Operation Scale

The company has now become a major producer of biochemical compound fertilizers, and has achieved initial gains from the development of Malaysia as the main market structure. In the future, we will continue to expand overseas channels and market Southeast Asia with unique products to increase market share and increase overall operating scale.

E. Financial planning

Strengthen the financial and operational management of the Company, enhance risk control, effectively avoid exchange rate, interest rate and market risk; and through public offering, enhance the company's visibility and obtain long-term and low-cost funds.

(2) Company Long-Term Plan

A. Marketing strategy

(A) Expanding overseas markets

The company will penetrate the Asian market with strong foundation in Malaysia (such as Indonesia, Vietnam, Thailand, Taiwan, Cambodia, Laos, Myanmar, Philippines, South Korea and Japan), and build factories in the region to save freight, and enter the Middle East and Europe. The market is the company's long-term goal.

(B) Developed as the No. 1 brand in Asia

At present, the company operates under the brand name “RealStrong” in Malaysia. It uses advertising marketing and customer reputation to continuously expand its sales channels to overseas. Through its active participation in public relations marketing strategies, it has shaped the company and its product image and popularity in order to develop into Asia. The No. 1 brand, a stable and sustainable business foundation

B. Research direction

The company continues to develop products for overseas market demand and cooperates with overseas universities to develop education. According to different regions and different climates, soils, plants and other specific products, products with functions such as pest resistance and environmental protection are introduced to increase customers' willingness to purchase and reduce Purchase cost. In addition, under the concept of sustainable agriculture, the company continued to develop projects for the use and recycling of agricultural by-products, and practiced environmental protection while reducing the cost of waste disposal for the agricultural

industry. Microbial application platforms can develop different high-end cultivation materials, such as inoculation of disease-resistant strains for seedlings, which can reduce the disease resistance of plants, and then add company products to bring better disease resistance and yield increase.

C. Production strategy

In order to provide localized products and save transportation costs, the company will build factories in various sales regions to provide local consumers with nearby demand.

D. Operation Scale

The company adheres to the concept of sustainable management, expands its human resources, expands its equipment, etc., and strives to expand its market share and become the No. 1 brand in Asia.

E. Financial planning

Enhance the company's financial management and operational capabilities, and use operational tools and flexible use of financial instruments to reduce operational risks and enhance competitiveness. Through the capital market, it will enrich working capital and support the needs of future development.

5.2 Overview of Market, Production and Sales

5.2.1 Market Analysis

(1) Sales Area Of Major Commodities

	Unit: NT$in Thousand	Unit: NT$in Thousand	Unit: NT$in Thousand	Unit: NT$in Thousand	Unit: NT$in Thousand	Unit: NT$in Thousand
	2018 2019 2020
Year Region	Amount % Amount % Amount %
Domestic Sales 2,495,239 92.84 1,704,322 96.41 1,545,443 94.07
Export 192,342 7.16 63,377 3.59 97,340 5.93
Total	2,687,581	100.00	1,767,699	100.00	1,642,783	100.00

Note: Domestic sales refer to sales in Malaysia, Indonesia and Taiwan, and the rest of the regions such as Vietnam, Singapore and the Philippines are exported.

(2) Market share

According to the 2015 survey data of the Department of Statistics Malaysia, the fertilizer market in Malaysia is still dominated by chemical fertilizers. Because Malaysian oil palm is mainly a large-scale planting company, the current unit fertilizer market is still higher than compound fertilizer. Refer to Universiti Putra Malaysia. According to the report, Malaysia's total fertilizer production in 2014 was 4.7 million tons, and the company's market share in 2014 was about 4.25%. At present, although the Malaysian market is still dominated by chemical unit fertilizers, the company's products can adjust the soil pH and organic content, so the application effect is better than chemical fertilizers in the land with low productivity or poor long-term application of chemical fertilizer pollution. With the increase in environmental awareness and the increase in long-term land pollution, the company's market share is expected to increase.

(3) Market Supply And Demand Situation And Growth In The Future

A. Global population growth pushes up overall demand

The global fertilizer market is closely related to food demand. As the global population continues to grow, it will push up global food demand and crop prices. With limited global arable land, increasing unit production has become the most urgent way for countries to solve food problems. In addition to the use of various fertilizers to increase unit yield and improve production efficiency, fertilizers with low cost and versatility are more acceptable to consumers.

According to the information released by FAO on Current world fertilizer trends and outlook to 2022, the demand for nitrogen, phosphorus, and potassium for chemical

fertilizers is still rising, and Asia is the world's main fertilizer market region. With the continuous population growth and limited arable land, the application of high-efficiency and low-cost fertilizers is the main trend, and the global fertilizer market should not undergo major changes.

B. High-performance, low-application, low-toxic compound fertilizer trend

In the case of continuous population growth and limited arable land, the application of higher-efficiency and low-cost fertilizers is the main development trend. It is different from the large-scale application of general chemical fertilizers in the past. The current market demand is toward organic, micro-organisms with multifunctional and chemical compound fertilizer. Meaning, under the principle of reducing the use of chemical fertilizers and reducing the toxicity to the soil, appropriate compound fertilizer products are developed for the growth patterns and nutritional needs of different plants.

(4) Competitive Niche

A. Key Technology Threshold

Through the combination of chemical substances, organic fertilizers and microorganisms, the company has successfully developed biochemical compound fertilizers. By combining inorganic and organic to enhance soil pH and increase crop nutrient absorption, the company has improved its culture. Equipment and key patented technologies, the key beneficial microorganisms that are extracted and cultured from the soil, is to stabilize nitrogen in the air and soil, also contribute to the decomposition of phosphorus, acid, salt, potassium and organic matter, to allow plants to absorb directly, thereby increasing the fertilizers application, as well as the yield of crops compared with chemical fertilizers. The microbial flora can also enhance the immunity of crops against disease, make crops premature, antifreeze and increase water retention and drought resistance.

At present, the general compound fertilizers on the market are still dominated by chemical fertilizers. A few fertilizer manufacturers also produce chemical organic compound fertilizers. However, the production methods are to mix organic fertilizers with separately purchased chemical fertilizers to let the fertilizer contains organic and microbial components. This method of production is easy to cause microbial death. Therefore, how to combine chemical fertilizers, organic fertilizers and microbial fertilizers into appropriate configurations has become the threshold for entry into the industry. The company has been researched for many years. Stabilization technology can

effectively combine microorganisms with chemicals to successfully produce commercialized fertilizers.

Furthermore, even if the microbial death caused by chemical fertilizers is overcome, the oil palms need at least 2-3 years from plant, and when new products are to be introduced into the market, they must be planted in two rounds, with at least 5- 6 years of product testing. If successful, there are opportunities to win customers' willingness to adopt. The key technologies used by the company effectively combine chemical fertilizers, organic fertilizers and microbial fertilizers, and effectively prevent the contact of microorganisms and chemical fertilizers, so that microorganisms are not easily damaged, and the benefits of fertilizers are effectively maximized, so the key technology entry threshold is the company. An important competitive niche.

B. Product efficacy extends to pest control

Over the years, Malaysian oil palm tree has been seriously affected by ganoderma disease. Ganoderma lucidum is caused by Ganoderma fungus. The disease occurs at the base of the stem of the tree, so it is also called Basal Stem Rot. The infection rate of oil palm plantation About 20%, during the period of 10-12 years after planting the seedlings, it will lead to a significant reduction in production of more than 80%, which is a fatal disease of oil palm trees. In the early stage of Ganoderma lucidum, there are 1-3 pieces of Ganoderma lucidum fruit body in the stem base of the tree. The body shape is generally less than 3 cubic centimeters. The leaves are not drooping and dry, and the tree base condition is still hard. However, the plant vascular bundle is damaged and cannot be recovered. The Ganoderma lucidum fruiting body increased by 3-10 pieces, the leaves began to turn yellow and showed slight sagging, the tree body tissue began to soften, part of the Ganoderma lucidum body matured, the amount of the tree body became less and the fruit pieces became smaller; in the end stage, the Ganoderma lucidum fruiting body increased to more than 10 pieces, the body is hypertrophy, spread around the roots of the tree, the base of the stem can be easily excavated by sharp objects, the tree has no result, and the plant will be declared dead. According to statistics from the Federal Land Development Authority of Malaysia, ganoderma disease is happening in Malaysia annually. The damage is up to tens of billions of Taiwan dollars, which seriously jeopardizes the economic growth of the oil palm industry.

In order to effectively solve the harm of Ganoderma lucidum to oil palm trees, the company and the Malaysian Oil Palm Bureau have successfully developed Hendsonia, an endophytic fungus that controls Ganoderma lucidum in 2012, and launched a four-in-one

biochemical compound fertilizer containing endophytic fungi. And can reduce the incidence of 70% of Ganoderma lucidum disease. By successfully developing the control effect of Ganoderma lucidum disease, the company has extended the fertilizer to the field of pest control, and is far ahead of other competitors. The company will continue to strive to prevent pests and diseases in the future. In order to be ahead from competitors, the company's products will partially replace the farmers' demand for pesticides and increase the added value of fertilizer use.

C. Safe and reliable brand reputation

The fertilizer product is directly used in the soil, and the crop system absorbs the nutrients and elements in the soil through the roots. However, the fertilizer is not completely absorbed by the crop, and there are still residual substances in the soil, so it can improve the soil pH value and improve the crop. In addition to the effects of yield and quality, the impact of residues of fertilizer products on crops and the environment cannot be ignored. In an industry that needs to strengthen product safety, technical support and goodwill, a safe and reliable brand image is very important. The company understands the cost and product efficiency of farmers, prefers fertilizers certified by government units or recommended by the government, and once farmers are accustomed to using a certain product, in order to ensure the stability of their crops, it is not easy to replace other brands. Due to the habits of use, the company has been striving to develop R&D for many years, continuously improving product quality, and has been certified by government agencies. With the brand name “Real Strong”, the company actively expands her product sales market and carefully tests the soil conditions of the area in line with local needs. The right formula has obtained high added value in every link of the industrial chain. After years of hard work, the company has established a good reputation in the industry, providing farmers with stable product quality, sincere after-sales service and good technical support. Reliable products to increase farmers' brand loyalty.

D. Steady layout of production base and actively develop sales network

The company actively explores the sales market, based on Malaysia's stable layout, gradually sets up production bases, and actively establishes distribution networks in various places. The company plans to extend her products to the world. Her clients include government-to-investment companies and large private enterprises. Farmers' associations, regional distributors and end users-farmers. In the expansion of the market strategy, through the sales pipeline established after careful evaluation, the newly developed areas mainly through dealers, and hold public welfare briefings, to help and

teach farmers in various areas to improve soil, and improve production and quality, to brand the concept enters the pipeline to enhance the local farmers' understanding and acceptance of the company's brand; for the infiltrated areas, through the group subsidiaries or local agents, directly to the terminal market, and actively participate in the promotion activities, regularly send people to teach, educate and assist farmers in various districts to improve soil yield and quality, and set up experimental manor in each district to provide fertilizer for farmers to test and compare, and strengthen farmers' loyalty to the company's brand products. In addition, the company also provides market and technical support services, and is committed to providing growers with the highest quality products and after-sales service, providing comprehensive solutions and technical consultation, in order to achieve product awareness and brand recognition.

The Company's Market Development Process

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E. Cost advantage

Since the traders import raw materials from abroad to Malaysia for sale, the raw material prices will be higher. In order to reduce the procurement cost of raw materials, the company actively seeks cooperation with raw material producers that can directly trade to reduce indirect purchases through traders. We had business relationship with the major potassium chloride producers in Belarus and are directly trading with Chinese urea producers for another major raw material urea. The company directly and raw materials Producer transactions, to reduce the cost of raw materials, and make the company's product prices more competitive.

(5) Advantages, Disadvantages and Countermeasures of Developing Prospects
A. Favorable factors
- (A) Increased demand for plant fertilizers in the global foraging crisis

Global food demand is increasing due to population growth and economic development, but arable land for crops is difficult to increase due to the rise of environmental awareness, , but some areas will also be affected by desertification, resulting in a reduction in cultivated area.

Therefore, under the trend of increasing demand for crops and reducing the area of arable land, the method of increasing crop yield is to adopt measures to strengthen crop resistance and increase crop yield. For example, increase the amount of biochemical compound fertilizer and prevent insects through root protection. Or the damage of crops such as germs, on the other hand, the bio-based compound fertilizer provides plant root nutrients, so that crops can obtain various nutrients and increase the output per unit area. The aforementioned measures to increase crop yields will also drive the development of the overall crop biochemical compound fertilizer industry and expand the overall market size, which will be positive for the sales growth of All Cosmos's future business.

(B) Technical advantage

Various functional microorganisms can be mixed with each other, but when using mixed strains, it is necessary to consider the competition or the synergy between the strains to exert their positive effects. The company uses organic matter as a carrier of microorganisms, so that after the fermentation of the same organic matter is completed, the survival rate and effectiveness are improved through the compatibility test of the microorganism carrier.

In the fertilizer process, in addition to factors such as production cost of bacteria, mixed strains, and carrier stability, it is also necessary to add anti-antagonism test and survival test after adding stable carrier to ensure the affinity and timeliness of microbial flora and survivability. The company has developed and applied for a bio-stabilized fertilizer technology (A Bio-stabilized Fertilizer and a Method for Producing) patent, to effectively combine microorganisms with chemical fertilizers, organic matter, and block microorganisms and chemicals’ direct contact of fertilizers to avoid damages to microorganisms to ensure the effectiveness of microorganisms, thereby taking advantage of the technology to expand the company's development in the biochemical fertilizer industry.

institutions

Over the years, the company has carried out many cooperation and exchanges with professional institutions such as the Malaysian Oil Palm Bureau, the Academy of Agricultural Sciences and the National University of Technology, and has maintained good cooperative relations for a long time. In addition, the company was appointed by the Ministry of Science, Technology and Innovation (MOSTI) of the Federal Government of Malaysia in 2011 as a consultant for high-tech green agriculture. The Prime Minister of Malaysia personally leads the research and development, innovation and environmental protection as its main purpose and implementation strategy. Its members are only 10 companies. The company is the only private company. As the fertilizer industry is an industry that attaches great importance to product safety, technical support and goodwill, the fertilizer products developed in cooperation with academic institutions or certified by government agencies are more trusted and favored by farmers, so they cooperate well with government agencies and academic institutions. Relationships have positive benefits for the company.

B. Unfavorable factors

(A) The main raw materials depend on imports and are vulnerable to shortage of international raw materials or price increases.

The company's main chemical raw materials such as urea, phosphate fertilizer and potash fertilizer rely on imports. If there is a shortage of international raw materials or price increases, the company may be adversely affected. Response measures:

The company keeps abreast of market information. In order to fully grasp the source of supply, there are more than two suppliers of main raw materials, and maintain a good and stable cooperative relationship. A reasonable safety stock is prepared for the raw materials, and the sales price of the downstream is moderately adjusted when the price fluctuates. Follow the market to reduce the impact.

(B) Risk of sales concentration

Oil palm is the main cash crop in Malaysia. Therefore, the government attaches great importance to the development of oil palm industry. It has a number of related institutions and investment companies. Oil palm enterprises need to have the processing capacity of palm oil processing, transportation and storage and sales. Therefore, Malaysian oil palm industry is mainly based on public and large-scale

enterprises, which is the case where the company has sales of goods concentrated in large enterprises.

Response strategy:

In addition to its commitment to maintain relationships with her customers, the company regularly assigns technical personnel or sales personnel to the customer’s field to observe the use of fertilizers, and to produce research reports on its processes and achievements, to stabilize existing customers and actively expand new customers. The use of the company’s products by well-known large enterprises, establishes a brand image, and drives more farmers to buy and use, in order to reduce the risk of sales concentration.

5.2.2 Important use of the main products and production process

(1) Important uses of major products

Fertilizers can be roughly classified into chemical fertilizers, organic fertilizers and biological fertilizers according to the raw material categories. Various fertilizers have their own advantages and disadvantages. Chemical fertilizers have fast effects, but they are easy to cause environmental pollution and destroy soil structure. Organic fertilizers can change soil properties and increase nutrient, but large in volume and high in application cost; biological fertilizer is applied in small amount and low in cost, but it must be used in combination with other fertilizers. Here are the advantages and disadvantages listed below:

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Fertilizer category Advantages Disadvantages
Biological fertilizer No pollution problem Non-fast-acting needs to be
combined with organic or
chemical fertilizers
Not harmful Have a certain and shelf life
Less application Vulnerable to environmental
impact
Lower production costs Need to apply to the root
circle to be easy to express
Chemical fertilizer Rapid fertilizer efficiency Contaminated environment
Easy to adjust fertilizer ratio Improper use is easy to have
a fat injury
Supply sufficient nutrients Improper use of soil
degradation, acid
Less application Production consumes a lot of
energy
Organic fertilizer Good soil improvement Large volume and weight,
high application cost
----- End of picture text -----

	Utility mitigation Composting production has pollutionproblems	Utility mitigation Composting production has pollutionproblems
	Less harmful Production of compost takes time, labor, and land consumption
	Wide applicability	Improper organic matter is prone topests and diseases

Source: Taiwan Agricultural Biotechnology Industry Quarterly

Because fertilizer is a popular material, it is a relatively traditional industry, hence, it is very competitive especially with many large-scale chemical fertilizer plants in the market. Therefore, the company's main products are biochemical compound fertilizers that combine organic matter, beneficial micro-organisms and chemical raw materials. Its products mainly combine the advantages of each unit of fertilizer, improve the efficiency and effect of crop nutrient absorption, promote the growth of crop roots, enhance soil nutrients and improve water retention capacity, and clearly distinguish it from the chemical fertilizers that account for the majority of the market.

(2) Production process of major products

The company's 3-in-1 biochemical compound fertilizer is mainly composed of chemical fertilizer, organic fertilizer and microbial fertilizer. According to the theory of nitrogen balance and soil health, it is compounded by techniques such as bio-high nitrogen source fermentation technology and comprehensive extrusion granulation. It can be mainly divided into beneficial microbial culture process and three-in-one biochemical fertilizer production process:

A. Beneficial microbial culture process

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B. Biochemical fertilizer production process

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5.2.3 Supply status of major raw materials

The company's main raw materials are chemical raw materials such as urea, potassium chloride and phosphate rock. The company maintains a good and stable cooperative relationship with major raw material suppliers. In order to fully grasping the source of supply, it strictly controls quality and delivery. To ensure the supply of major raw materials is flawless. There was no supply shortage or interruption in the last three years and the application year, and the supply was stable.

5.2.4 Explanation of major changes in gross profit margin of major products or sectors in the last two years

Unit: NT$ in Thousand

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Year
2019 2020
Item
Operating Income 1,767,699 1,642,783
Operating Gross Profit 393,312 372,147
Gross Profit Margin 22.25% 22.65%
Gross Rate Of Change 22.8% 1.80%
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The company’s 2020 gross profit margin changes below 2%, mainly due to the fact that oil palm plantation customers have been affected by the weak international oil palm prices from the fourth quarter of 2018, which led to lower revenue or operational difficulties, which in turn reduced the willingness to apply fertilizers and delayed orders. In addition, the budget for fertilizer use in 2019 has been reduced by 30-50% compared with previous years. In the case of tight cash flow, most plantations switch to cheap and low-priced unit fertilizers or mixed fertilizers in terms of fertilizer selection. Since unit fertilizers or mixed fertilizers are all competing unit price markets, the company will choose not to take orders if there is no profit, which will affect the company's revenue and gross profit. The fluctuation of international oil palm prices in 2019 has delayed the bid opening schedule in the first half of 2020, and shipments in January and February have significantly decreased. Coupled with the fact that the Malaysian government implemented the "Movement Control Order" in mid-March in response to Covid-19,

operations in the first quarter of 2020 have fallen to the bottom. The Company is in necessities industry in Malaysia, therefore, even with the movement control order, work still quickly resumed after a short shipment shock, and operations gradually stabilized since the second quarter. In the unstable environment, the plantation’s 2020 fertilizer budget did not increase significantly with the crude palm oil price. Farmers’ willingness to apply biochemical compound fertilizers is still conservative compared to the past, and the fertilizer budget is still mainly in chemical fertilizer.

5.2.5 List of major customers and suppliers

(1) The name of the supplier who had accounted for more than 10% of the total purchase amount in any of the previous two years and the amount and proportion of the purchase amount

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Unit: NT$ in Thousand;%
2018 2020 March 31, 2021
Net Net
Re Net Re Re
annual annual
It lati annual lati lati
purchas purchas
e Name Amount on Name Amount purchase on Name Amount on
e of e of
m shi of goods shi shi
goods goods
(%) p (%) p (%) p
JSC JSC JSC
BELARUSIAN BELARUSIAN BELARUSIAN
1 POTASH 388,140 44.52No POTASH 241,873 22.83 [No] POTASH 172,526 37.59 [No]
COMPANY ne COMPANY ne COMPANY ne
(BPC) (BPC) (BPC)
ETG AGRI FERTART LAO
INPUTS FZE PTE LTD. KAIYUAN
(ETG) 77,776 8.92No (FERTART) MINING
2 ne 81,841 7.72 [No] ne SOLE CO LTD 58,236 12.69 [No] ne
(LAO
KAIYUAN)
HAPSENG HAPSENG AMEROPA
FERTILIZER FERTILIZER ASIA PTE LTD
3 RS SDN BHD 43,697 5.01No RS SDN BHD 76,811 7.25No (AMEROPA) 48,583 10.58No
(HAPSENG) ne (HAPSENG) ne ne
Others 362,154 41.55No Others Others
659,018 62.20 [No] 179,643 39.14 [No]
ne ne ne
Net purchase 871,767 100.00 Net purchase 1,059,543 100.00 Net purchase 458,988 100.00
----- End of picture text -----

The company is mainly engaged in the production and sales of biochemical composite fertilizers. The main raw materials of the products are urea, phosphate rock, potassium chloride, borax, ammonium phosphate, ammonium chloride, dolomite powder and organic matter (cocoa shell residue, coffee grounds or oil. Brown slag) and etc. Because raw materials such as urea, potassium chloride and phosphate rock are natural resources, only a few countries such as China, Arabia, Iran, Russia, Egypt and India have a large amount of reserves for mining, so the company avoids shortage of raw materials and reduces The

impact of major changes in purchase prices, with supply contracts with major purchase suppliers for long-term cooperation to reduce risk.

Supplier changes are mainly affected by fluctuations in the performance of the company and are also affected by fluctuations in the unit price of raw materials. To ensure source stability and avoid price fluctuation, the company's supplier of chemical raw material potassium chloride include Belarusian manufacturer BPC, LAO KAIYUAN, local fertilizer importer HAPSENG. Others such as WILMAR, DEEBAJ, and ETG are mainly engaged in the trading and marketing of unit chemical fertilizers, chemical raw materials and pesticides. The company will also purchase goods from local suppliers with competitive prices.

(2)The name of the customer who had accounted for more than 10% of the total sales in any of the previous two years and the amount and proportion of the sales

Unit: NT$ in Thousand;%

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2019 2020 March 31, 2021
Net Net Net
annual Relat annual annual Relati
Ite Relati
Name Amount sales of ionsh Name Amount sales of Name Amount sales of onshi
m onship
goods ip goods goods p
(%) (%) (%)
SABAH
RISDA AGRO SIME DARBY
SOFTWOODS
1 242,282 13.72 [Note] SDN 133,627 8.13None BERHAD 69,759 17.02 None
BERHAD 1
BHD(RASB) (SIME)
(SSB)
SIME DARBY
BORNEO SABAH
PLANTATION
2 SAMUDERA 161,530 9.14 [Note ] 126,046 7.67None SOFTWOODS 47,388 11.56 [Note ]
2 BERHAD 1
SDN BHD BERHAD (SSB)
(SIME)
RISDA FELDA LAPANDAY
VENTURES TECHNOPLA FOODS
3 133,729 7.57None 118,612 7.22None 22,377 5.46 None
SD N BHD NT SDN BHD CORPORATION
(RVSB) (FELDA) (LAPANDAY)
Others 1,229,958 69.57 Others 1,264,498 76.98 Others 270,335 65.96
Net Sales 1,767,699 100.00 Net Sales 1,642,783 100.00 Net Sales 409,859 100.00
----- End of picture text -----

Note 1: SSB holds a 45% stake in SSHF and is a substantial shareholder of the subsidiary. Note 2: BORNEO is an affiliate of Sawit Kinabalu Ecotech Sdn. Bhd.

The Company is principally engaged in the production and sales of biochemical composite fertilizers. The current sales area is South East Asia and Mainland China, and the main sales market is Malaysia. Sales customers are mainly state-owned enterprises, companies or individuals in oil palm planting and crop planting, including large enterprises, local distributors and grassroots farmers. The changes in sales volume of major customers of the Company are affected by global food demand.

FELDA is a Malaysian Federal Land Development Agency transfer company, one of the largest companies in the world, BORNEO is Sawit Kinabalu Sdn. Bhd. (Kota Kinabalu Oil Palm Co., Ltd., SWSB) 2nd tier subsidiary company with 100% shareholding. In order to optimize and promote economy of Sabah, SWSB is the investment company of the Sabah State Government. BORNEO mainly develops oil palm plantation and produces and sells palm oil products. SSB also invested by Sabah State Government and her main business activity is to operate oil palm plantations. RVSB is a 100% shareholding company of Rubber Industry Smallholders Develoment Authority (RISDA). Its parent company RISDA is the Ministry of Rural and Regional Development of the Federal Government of Malaysia in 1973 to assist local rubber in Malaysia. The small garden owners were established by using cultivating and new agricultural technologies to enhance the diversity and quality of crops, while RVSB was mainly responsible for sourcing and supplying compound fertilizers to various oil palm and rubber planting companies.

RASB is a 100% invested by RISDA ESTATES SDN BHD (also known as ESPEK SDN BHD (abbreviated as "ESPEK"). ESPEK is 100% invested by the Malaysian Rubber Industry Small Park Owners Development Bureau, which its parent companies RISDA and ESPEK were established by the Ministry of Rural and Regional Development of the Federal Government of Malaysia in 1973 to help local rubber garden owners in Malaysia to utilize seeding and new agricultural technologies to improve the diversification and quality of crops The company started business transactions with ESPEK since 2009 to mainly purchasing customized fertilizers for oil palm plantation.

Lapanday is a planter, supplier and exporter of fresh bananas and pineapples in the Philippines. It mainly exports to the international market. The company's orders with it are mainly customized fertilizer for banana.

5.2.6 Production Value Of The Last Two Years

Unit Ton NT$ in Thousand

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Annual year 2019 2020
Production value
Production Production Production Production Production Production
Major Products
Capacity Amount Value Capacity Amount Value
Biochemical
Compound 102,490 119,715
Fertilizer 327,260 1,233,394 327,260 1,108,897
Chemical
62,357 56,238
Fertilizer
Total 327,260 164,847 1,233,394 327,260 175,953 1,108,897
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Note 1: Capacity only lists the capacity of subsidiaries ACI and SSHF machines.

Note 2: The output does not include product packaging such as unit fertilizer packaging, manual mixing and small packaging.

5.2.7 Sales Volume In The Recent Two Years

Unit: Tons: NT$ in Thousand

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Year 2019 2020
Domestic sales Export Domestic sales Export
Product Amount Value Amount Value Amount Value Amount Value
Biochemical 89,418 978,651 4,573 56,536 95,885 833,406 8,849 96,699
Compound
Fertilizer
Chemical 80,341 669,601 501 6,842 92,774 578,166 - -
Fertilizer
Others 10,385 56,070 - - 9,871 133,871 - 641
Total 180,144 1,704,322 5,074 63,378 198,530 1,545,443 8,849 97,340
----- End of picture text -----

Note 1: The sales volume does not include other items such as bags and coffee grounds. Note 2: Chemical fertilizers contain raw materials for sale.

Note 3: Domestic sales are sold in Malaysia, Taiwan and Indonesia, and exported to the Philippines and Vietnam.

5.3 The number of employees, average service years, average age and academic distribution ratio of employees in the last two years and the year ended

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Unit Headcount
Year 2019 2020 End of March, 2021
Direct employee 218 195 200
Number of
Staff Indirect employee 156 155 155
Total 374 350 355
Average age 33.23 34.34 34.64
Average Service Years 4.12 4.99 5.16
Master's Degree
9 10 10
and above
Academic College 114 114 114
Distribution High school and
251 226 231
below
Total 374 350 355
----- End of picture text -----

5.4. Environmental Expenditure Information

According to the law, the applicant shall apply for a permit or a pollutant discharge permit or a pollution prevention and control fee or a person who should set up an environmental protection special unit. The claim, payment or establishment status: None.
The company's investment in the main facility for the prevention and control of environmental pollution and its use and possible benefits:

				December 31,2020 Unit RM	December 31,2020 Unit RM
Device name	Quant ity	Date Of Acquisition	Cost Of Investment	Unreduced Balance Use and anticipation may result in benefits
Dust collection chamber (14mx3mx2.8m)	1	2011.05.18	40,260.00	1,342Collect dust from the production of fertilizer
Dust collection chamber (8mx3mx2.8m)	1	2011.05.18	12,110.00	404Collect dust from the production of fertilizer
Dust recycling equipment system	1	2017.07.30	474,300.00	295,258	Collect dust from the production of fertilizer

The company has improved the environmental pollution in the last two years as per annual report, and the company has a pollution dispute, and should explain its treatment: None.
The total amount of damages (including compensation), the total amount of the company's losses (including compensation) and the future response measures (including improvement measures) and possible expenses (including possible counter measures may not be taken) due to environmental pollution losses (including compensation) in the last two years and the end of the annual report. The estimated amount of loss, disposition and compensation, if it cannot be reasonably estimated, should state the fact that it cannot be reasonably estimated): None.
The current pollution situation and its impact on the company's earnings, competitive position and capital expenditure and its estimated major environmental capital expenditures in the next two years: None.

5.5. The Relationship of Employers and Employees

The company's various employee welfare measures, training, retirement system and its implementation status, as well as the agreement between labor and management and the maintenance measures of various employee rights and interests
(1) Employee welfare measures
1. Give annual salary increases and pay year-end bonuses based on employee performance
2. Promotion and salary increase according to the performance of the administrative staff
3. Employee overtime allowance
4. Employee annual leave system
5. Employee medical assistance and health check
6. Employee flexible work system
7. Employee travel allowance

8. Employee leisure and club activity benefits

(2) Employee training and training situation

In line with the company's operating policies, departmental goals, personal work or tasks, and in-house training or external training, sponsor employees to participate in relevant knowledge, technology, attitude and other related courses.

In addition, the company allocates an additional 1% of the salary cost (1% of the statutory requirement) to the Development Human Resources Development Fund (HRDF) for employee training. Training courses such as leadership, project management, intensive technical training, interpersonal communication skills, work attitudes and safety knowledge.

(3) Retirement system

The Company has a retirement scheme and allocates a provident fund to a certain percentage of the total amount of wages paid in accordance with the local “Labor Law”, namely the EPF (locally referred to as EPF) rules and regulations on EPF contributions ratio.

The basis of the Malaysian Provident Fund Board (EPF) is as follows:

A. Non-employed employees: Can not be listed.

B. Non-Malaysian citizens: You may choose to option out from the scheme
C. Malaysian citizens: 11% for employees and 12% for companies.
(4) Agreement between labor and management

At present, employees of the company can express their opinions to the human resources department or department heads through e-mail, or meetings and meetings with employees. The communication channel is smooth and the labor relations are harmonious.

(5) Protection measures for various employee rights
The highest arbitration unit of the company's personnel evaluation committee for employees' problems and disputes
Company personnel regulations, national labor and employment regulations as a model for solving personnel problems
The company's personnel regulations electronic manual is widely distributed to each new employee, and explanation and guidance are given.
The company's personnel department gives immediate assistance and corrections to the employees on their problems and rights on daily basis.

. 2. In the past two years and up to the date of publication of the annual report, the company suffered losses due to labor disputes, and disclosed the estimated amount and corresponding measures that may occur in the current and future. If it cannot be reasonably estimated, which fact should be stated: None

5.6 Important Contracts

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

Contract
No Contract Holder Contract Validity Contains and Term & Conditions
Title
Fertilizer 1. MALAYSIAN PALM The licensed product is a compound fertilizer
Sept 1, 2017 till for use in oil palm, and its production is based
Formula
1 Licensing OIL BOARD, MPOB Aug 31, 2022 on the information, expertise or improvement
(Note) provided by MPOB in accordance with this
Agreement 2. All Cosmos Industries contract.
Joint 1. Sabah Softwoods Established a joint venture company (Sabah
Softwoods Hybrid Fertiliser Sdn Bhd) in Sabah
2 Venture Berhad (SSB) Jan 12, 2011 to operate a fertilizer manufacturing plant that
Agreement
2. All Cosmos Industries markets, trades and sells fertilizers.
Land Sales 1. Real Strong (M) Sdn Dec 31, 2009 Purchase of leased land at PLO 539, Jalan
Keluli, Pasir Gudang Industrial Estate, Johor
3 & Purchase Bhd (Valid till Jan 29, Bahru, Johor from Real Strong (M) Sdn Bhd
Agreement 2026)
2. All Cosmos Industries until January 29, 2026
July 18, 2011
Land Sales (effective from Johor Corporation (Perbadanan Johor) agreed to
1. Johor Corporation extend the lease of land at PLO 539, Jalan
4 & Purchase January 30, 2026, Kelui, Pasir Gudang Industrial Estate, Johor
Agreement 2. All Cosmos Industries until January 29,
Bahru, Johor.
2056)
Land Sales Johor Alumium (Perbadanan Johor) agreed to
1. Johor aluminum
5 & Purchase Oct 30, 2000 lease the land at PLO 442 Jalan Suasa, Pasir
Agreement 2. All Cosmos Industries Gugang Industrial Estate, Johor Bahru, Johor.
July 20, 2011
Land Sales (effective from Johor Corporation (Perbadanan Johor) agreed to
& Purchase 1. Johor Corporation September 24, extend the lease of the land at PLO 442 Jalan
6 Agreement 2023, until Suasa, Pasir Gugang Industrial Estate, Johor
2. All Cosmos Industries
Appendix September 23, Bahru, Johor
2053)
March 28, 2012
Land Sales Johor Corporation (Perbadanan Johor) agrees to
1. Johor Corporation (The period of use
7 & Purchase until December 26, lease the land at PLO 650, Zone 12, Pasir Gudan
Agreement 2. All Cosmos Industries Industrial Estate, Johor Bahru, Johor
2072)
Effective from
Fertilizer 1. MALAYSIAN PALM October 24, 2014, The licensed product is a compound fertilizer for use in oil palm, and its production is based
Formulatio within five years
8 n Licensing OIL BOARD, MPOB from the date of on the information, expertise or improvement
provided by MPOB in accordance with this
Agreement 2. SABAH SOFTWOODS signing the contract contract.
(Note)
Land Sales March 31, 2011 POIC Sabah Sdn Bhd agreed to lease the land at
1. POIC Sabah Sdn Bhd
10 & Purchase (Validity till Dec 31, No. 51 (217,800 square feet) of Phase 2, Jalan
Agreement 2. SABAH SOFTWOODS 2104) Tengah Nipah, POIC. Lahad Datu, Sabah
Established a joint venture company in Kinabalu
Joint 1. Sawit Kinabalu Ecotech
11 Feb 23, 2018 (Kinabalu Life Sciences Sdn Bhd), which is
Venture Sdn Bhd (SKESB) mainly responsible for the research and
----- End of picture text -----

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

Contract
No Contract Holder Contract Validity Contains and Term & Conditions
Title
Agreement production of bacterial cells for oil palm waste
2. All Cosmos Industries
disposal.
Joint 1. Sawit Kinabalu Ecotech Established a joint venture company in Sabah
(Sawit Ecoshield Sdn Bhd) to provide
12 Venture Sdn Bhd (SKESB) Feb 23, 2018 industrialized services for agricultural waste
Agreement
recycling.
2. All Cosmos Industries
1. YPJ Plantations Sdn
Joint Established a joint venture company (PT All
Bhd Cosmos Biotek) in Indonesia to operate a
13 Venture March 12, 2018 fertilizer manufacturing plant, which will
Agreement 2. All Cosmos Bio-Tech market, trade and sell fertilizers
Holding Corporation
1. Malaysian Agricultural
AESB signed a technical sales contract with
Technical Research And MARDI to obtain a liquid gun for the use of
induced system resistant papaya seedlings to
14 Sales Development Institute Oct 9, 2018 control papaya bacterial wilt, and adjustable
capacity.
Agreement (MARDI)
2. Arif Efektif Sdn Bhd
1. Grape King Bio. Ltd Established a joint venture company (GK Bio
Joint International Sdn Bhd) in Malaysia to promote
2. Chiu, Hsien Chih and sell healthy foods, food supplements and
Jan 9, 2019
15 Venture raw materials in member countries such as
3. All Cosmos Bio-Tech Malaysian Association of Southeast Asian
Agreement Nations.
Holding Corporation
PT Perkebunan Nusantara III agreed to lease the
Land Sales 1. PT Perkebunan Sept 17, 2018 land (40,000 square meters) at Sei Mangkei
16 & Purchase Nusantara III (Persero) (Validity till Sept Village, Bosar Malings Sub-District,
Agreement 16, 2048) Simalungun Recency, North Sumatera Province
2. PT All Cosmos Biotek Plot B-9
----- End of picture text -----

Note: The contract is extended with the written consent of both parties.

6.0 Financial Overview

6.1 Brief financial statements and comprehensive profit and loss statements for the recent five years

6.1.1 Information on brief financial statement and comprehensive profit and loss statements
Concise Balance Sheet

Unit : NT$ In Thousand

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Year
(Financial information for recent five years) As at March 31,
Item
2021
Financial Report
2016 2017 2018 2019 2020(note1)
Current assets 1,369,721 1,942,817 2,133,931 1,788,718 1,827,027 2,043,101
Real estate, plant
468,990 475,961 482,291 470,047 441,878 432,358
and equipment
Intangible assets 2,717 2,079 8,580 2,457 1,680 1,502
Other assets 271,722 266,653 356,068 378,289 343,785 220,456
Total assets 2,113,150 2,687,510 2,974,870 2,639,511 2,614,370 2,697,417
Before 458,041 263,052 390,855 175,438 221,393 417,384
Distributi
Current on
liabilities After 579,516 432,742 544,537 239,472 285,427 417,384
Distributi
on
Non-current 118,094 97,509 47,949 38,158 29,799 28,962
liabilities
Before 555,550 342,184 438,804 213,596 251,192 446,346
Distributi
Total on
liabilities After 677,025 511,874 592,486 277,630 315,226 446,346
Distributi
on
Attributable to the 1,332,857 2,038,955 2,172,389 2,045,734 1,986,510 1,886,644
owners of the parent
company
Share capital 565,000 640,340 640,340 640,340 640,340 640,340
Capital reserve 411,187 781,838 781,838 781,838 781,838 781,838
Before 725,813 927,211 1,062,310 943,876 962,046 925,132
Distributi
Retainin on
g surplus After 604,338 757,521 908,628 879,842 898,012 925,132
Distributi
on
Other rights (369,143) (310,434) (312,099) (320,320) (397,714) (460,666)
Treasury stock - - - - - -
Non-control interest 224,743 306,371 363,677 380,181 376,668 364,427
Total Before 1,557,600 2,345,326 2,536,066 2,425,915 2,363,178 2,697,417
equity Distributi
on
After 1,436,125 2,175,636 2,382,384 2,361,881 2,299,144 2,697,417
Distributi
on
----- End of picture text -----

Note 1: The 2020 cash dividend distribution case was approved by the board of directors of the company on March 26, 2021, and is expected to report to the shareholders meeting on June 28, 2021.

2. Brief Comprehensive Profit and Loss Statement

Unit : NT$ in Thousand

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

Year As at March 31,
(Financial information for recent five years)
2021
Items Financial
2016 2017 2018 2019 2020
Report
Operating income 2,065,543 2,263,652 2,687,581 1,767,699 1,642,783 409,859
Operating gross
655,420 751,521 774,594 393,312 372,147 81,662
profit
Operating profit and
324,598 406,721 356,769 73,231 102,711 29,169
loss
Non-operating
income 5,956 214 42,246 30,587 46,960 12,958
And expenditure
Net profit before tax 330,554 406,935 399,015 103,818 149,671 42,127
Continuing business
unit 292,264 396,423 348,687 38,678 98,168 28,559
Current net profit
Loss of business unit - - - - - -
Current net profit
292,264 396,423 348,687 38,678 98,168 28,559
(loss)
Other
comprehensive
(104,033) 66,787 (1,577) (10,165) (91,207) (74,853)
profit and loss of the
period (net after tax)
Current consolidated
profit and loss 188,231 463,210 347,110 28,513 6,961 (46,294)
lump sum
Net profit belongs to
Parent company 243,217 322,873 305,058 35,694 82,204 27,120
owner
Net profit belongs to
49,047 73,550 43,629 2,984 15,964 1,439
Non-control interest
The total profit and
loss is attributable to
154,711 381,582 303,393 27,473 4,810 (35,832)
the parent company
owner
Total consolidated
profit and loss is
attributable to 33,520 81,628 43,717 1,040 2,151 (10,462)
non-controlling
interests
Earnings per share 4.30 5.31 4.76 0.56 1.28 0.42
----- End of picture text -----

6.1.2 Significant events affecting the above-mentioned concised financial statements for consistency comparison, such as accounting changes, company mergers or suspension of business departments, etc. and their impact on the current year's financial statements: None.

6.1.3 Names and audit opinions of auditor in the past five years

Names and audit opinions of auditor in the past five years

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Year Name of Audit Firm Auditors Audit opinions
2016 Deloitte & Touche Yu Cheng Chuan and Unqualified Opinion
Zhang Gen Xi
2017 Deloitte & Touche Chen Chiang Hsun Unqualified Opinion
and Yu Cheng Chuan
2018 Deloitte & Touche Chen Chiang Hsun Unqualified Opinion
and Yu Cheng Chuan
2019 Deloitte & Touche Chen Chiang Hsun Unqualified Opinion
and Yu Cheng Chuan
2020 Deloitte & Touche Chen Chiang Hsun Unqualified Opinion
and Ho Jui Hsuan
----- End of picture text -----

If there are any changes of auditor in the last five years, the reason of replacement of the company, the predecessor and the successor auditor must be stated. The company passed the board of directors in March 2014 and appointed the auditor of Deloitte & Touche to conduct the audition. In the past four years, the two auditors of Deloitte & Touche, Yu Cheng Chuan and Zhang Gen Xi have conducted the audition. Due to the internal rotation mechanism of the accounting firm, in the third quarter of 2017, two auditors, Chen Chiang Hsun and Yu Cheng Chuan, were required to conduct the audit, and Chen Chiang Hsun and Ho Jui Hsuan were required to conduct the audit from the first quarter of 2020.
The local public listed company has been in last seven consecutive years since the public issuance, or the foreign public listed company is being audit by the same auditor for recent seven consecutive years. It should explain the reasons for not changing the auditor. The independency of current appointed auditor or the company has implemented any countermeasure to strengthen the independency of auditor: not applicable.

6.2 Financial Analysis over the Recent Five Years

Unit : NT$ in Thousand

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Year Financial Analysis over the Recent Five Years As at
March 31,
2021
2016 2017 2018 2019 2020
Analysis Items (Note 1) Financial
Report
Liabilities to assets ratio 26.29 12.73 14.75 8.09 9.61 16.55
Financial
structure Long-term capital fixed
assets ratio 352.91 444.78 460.25 443.34 456.30 443.06
(%)
Debt Current ratio 299.04 738.57 545.97 1,019.57 825.24 489.50
paying Quick ratio 240.31 592.35 368.88 826.92 643.74 334.77
ability
(%) Interest coverage ratio 1,460.25 3,110.54 2,237.66 1,198.84 3,470.97 3,424.94
Receivables turnover
4.22 4.86 3.96 2.76 3.12 3.10
rate (times)
Average number of days
86 75 92 132 117 118
Operation of cash receipt
capability Inventory turnover rate
6.04 6.26 4.45 2.91 4.15 3.38
(times)
Payable turnover rate
23.88 35.82 43.30 22.18 17.96 16.08
(times)
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Year Financial Analysis over the Recent Five Years As at
March 31,
2021
2016 2017 2018 2019 2020
Analysis Items (Note 1) Financial
Report
Average number of days
60 58 82 125 88 108
of goods sale
Total assets turnover rate
4.07 4.79 5.61 3.71 3.60 3.75
(times)
Total asset turnover rate
0.93 0.94 0.95 0.63 0.63 0.62
(times)
Asset return rate (%) 13.92 13.88 11.28 1.53 3.26 4.23
Shareholders’ equity
18.95 19.15 14.49 1.69 4.08 5.60
return rate (%)
Percentage Operating
57.45 63.52 55.72 11.44 16.04 18.22
of paid-up profit
Profitability
capital (%) Net income
58.53 63.55 62.31 16.21 23.37 26.32
before tax
Net income rate (%) 14.15 14.26 11.35 2.02 5.00 6.62
Earnings per share
4.30 5.31 4.76 0.56 1.28 0.42
(NT$)
Cash flow ratio (%) 110.77 66.95 (55.86) 503.63 (57.31) (6.93)
Cash flow Cash flow fair ratio (%) 83.60 107.87 58.22 125.60 106.28 53.59
Cash re-investment ratio
23.93 3.23 (21.95) 25.87 (8.21) (1.24)
(%)
Operation leverage 6.36 5.57 7.53 1.73 2.36 2.87
Leverage
Financial leverage 1.08 1.03 1.06 1.15 1.05 1.21
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Please indicate the reasons for the changes in the financial ratios in the last two years. (If the increase or decrease is less than 20%, it can be exempted from analysis)

Increase of liabilities to assets ratio: The main subsidiary, ACI, was affected by the epidemic in the first half of the year. Sales in the first half of the year were slow, the market did not recover until the third quarter when the epidemic has been controlled. Procurement from suppliers increases when demand increases, and the increase in procurement loans has increased the total debt at the end of the period.
Decrease in current ratio and quick ratio: In the first half of the year, sales of subsidiary ACI were affected by the epidemic. After the third quarter, the epidemic was more controlled and the price of crude palm oil recovered gradually to warm up the market. As demand increased, so did purchases from suppliers. The increase in short-term loans purchased from foreign supplier JSC by LC has led to a decline in the current ratio. Although the current ratio has fallen, it is still >200%. The company has no difficulties in repaying debts and the overall capital allocation is also healthy.
Increase in interest coverage ratio: The company’s interest coverage ratio continues to rise, and long-term borrowings have been amortized one after another, and interest expenses have also decreased. The profitability is sufficient to guarantee the repayment of due debts, and the company’s long-term debt solvency has no other concerns.
Decrease in inventory turnover rate (times): Affected by the fall in crude palm oil prices in 2019, many plantations cut orders or postponed shipments due to internal capital turnover and internal rectification factors, resulting in higher inventory at the end of 2019 and lowering the inventory turnover rate in 2020. Affected by the epidemic in 2020, normal production capacity gradually resumed after the third quarter, but the supply still cannot be completed in a short time, coupled with the rising freight rate of container bulk transportation and the transportation time has also been lengthened. In order to respond to customer demand orders for the economic recovery in 2021, the company also maintains the inventory at the end of the period, resulting in a decline in the overall inventory turnover rate, which is still at the industry average level, so there is no hidden worry.

Increase in average selling days: Affected by the fall in crude palm oil prices in 2019, many plantations cut orders or postponed shipments due to internal capital turnover and internal rectification factors, resulting in higher inventory at the end of 2019 and lowering the inventory turnover rate in 2020. Affected by the epidemic in 2020, normal production capacity gradually resumed after the third quarter, but the supply still cannot be completed in a short time, coupled with the rising freight rate and the transportation time has also been lengthened. In order to respond to customer demand orders for the economic recovery in 2021, the company also maintains the inventory at the end of the period, resulting in a decline in the overall inventory turnover rate, which is still at the industry average level, so there is no hidden worry. In addition, the company also regularly assesses the risk of inventory falling price, and makes an inventory allowance for the loss of falling price to reflect the actual inventory value.
Increase in return on assets: The rebounding crude palm oil price has resulted in revenue increase this year, most of the long-term borrowings that are closely related to interest expenses were repaid and there was no increase in borrowings, resulting in a significant increase in the return on assets compared with the previous year. Affected by the epidemic in 2020, the world is moving towards a zero-interest rate era. Compared with the excessively low return on assets in 2019, it is a stable performance that the return on assets in 2020 is higher than the market interest rate, and there are no other concerns that need to be vigilant. .
Increase in return on equity: The company focuses on the research and development of the industry, and strives to open up overseas markets and develop new products. Despite the impact of the epidemic in 2020, crude palm oil prices have stabilized, and after-tax profits and losses of some foreign orders have significantly increased. The return on equity has also increased by nearly 144% compared with 2019, reflecting the company’s influence in the industry.
Increase in operating profit: Despite the impact of the epidemic this year, the operating conditions in the first half of the year were poor, but the slowdown of the epidemic and the rebound in crude palm oil prices have increased overall profitability.
Increase in profit margin: Despite the impact of the epidemic this year, the operating conditions in the first half of the year were poor, but the slowdown of the epidemic and the rebound in crude palm oil prices have increased overall profitability.
Increase in EPS: The change in earnings per share was mainly due to the return of orders from major customers as a result of the stabilization of crude palm oil prices, and the stabilization of foreign subsidiaries' operations. In addition, affected by the political situation in Malaysia in 2019 which led to payment defaults from customers, more expected credit losses have resulted in a decline in the overall profitability of the group. The company has been actively negotiating to recover for payment receivable and thereby increased the company’s net profit.
Decrease in cash flow ratio, cash flow fair ratio and cash reinvestment ratio: The direct cause of the decrease in cash flow from operating activities is that the sales of this year are concentrated after the third quarter, and the company generally grants a credit period of about 3 months, which increases the receivables on the closing accounts compared with the previous period and reduces the cash flow. In addition, in order to meet customer demand for orders, the purchase volume at the end of the period has also increased. Bank borrowings arising from the purchase of raw materials also increased the debt ratio, and the overall cash flow fell. According to past experience, the company does not have any non-payment and with a good internal control system, it will actively collect overdue debts. In addition, the company's current asset ratio is high, so the company has no cash flow shortage or difficulty in repayment.

Note 1. Calculation formula for analysis items:

Financial structure
(1) Liabilities to assets ratio = total liabilities / total assets.
(2) Long-term capital to property, plant & equipment ratio = (total equity + non-current liabilities) / net
property, plant and equipment.
Debt paying ability
(1) Current ratio = current assets / current liabilities.
(2) Quick ratio = (current assets - inventory – prepaid expenses) / current liabilities.
(3) Interest coverage ratio = net income before tax and interest expense / interest expense for the current
period.
Operation capability
(1) Receivables (including accounts receivable and bills receivable arising from business operation) turnover
rate = net sales / average receivables for each period (including balance of accounts receivable and bills receivable arising from business operation).
(2) Average number of days cash receipt = 365 / receivables turnover rate.
(3) Inventory turnover rate = cost of goods sold / average inventory amount.

(4) Payables (including accounts payable and bills payable arising from business operation) turnover rate =
cost of goods sold / average payables for each period (including accounts payable and notes payable arising from business operation).
(5) Average number of days of goods sale= 365 / inventory turnover rate.
(6) Fixed assets turnover rate = net sales of goods / net fixed assets.
(7) Total asset turnover rate = net sales of goods / total assets.
Profitability
(1) Assets return rate = [Profit and loss after tax + interest expense × (1 - tax rate)] / average total assets.
(2) Shareholders’ equity return rate = Profit and loss after tax attributable to owners of the parent company / average attributable to owners of the parent company.
(3) Net income rate = profit and loss after tax/ net sales of goods.
(4) Earning per share = (profits and losses attributable to owners of the parent company - special dividends) / weighted average number of issued shares. (Note 3)
Cash flow
(1) Cash flow ratio = net cash flow from operating activities / current liabilities.
(2) Net cash flow fair ratio = net cash flow from operating activities over the current five years / increase in (capital expenditure + inventory + cash dividend) for the current five years.
(3) Cash re-investment ratio = (net cash flow from operating activities - cash dividends) / (gross fixed assets + long-term investment + other non-current assets + working capital). (Note 4)
Leverage:
(1) Operation leverage = (net operating income - variable operating costs and expenses) / operating profit (Note 5).
(2) Financial leverage = operating profit / (operating profit - interest expense).
Note 2: The calculation formula of the earnings per share of the preceeding paragraph should pay special attention to the following matters when measuring:
1. Based on the weighted average number of common shares, not based on the number of shares issued at the end of the year.
Anyone who has a cash increase or a treasury stock trader should consider the circulation period and calculate the weighted average number of shares.
Anyone who has transferred surplus or capital increase will be retrospectively adjusted according to the proportion of capital increase when calculating the earnings per share of the previous year and the semi-annual, and no consideration on period of issuance is needed for the capital increase.
If the special stock is a non-convertible accumulative of special stock, its annual dividend (whether or not it is paid) shall be the net profit reduction after tax or increase the net loss after tax. If the special stock is non-cumulative, in the event of net profit after tax, the special stock dividend shall be deducted from the net profit after tax; if it is a loss, it shall not be adjusted.

Note 3: The cash flow analysis should pay special attention to the following items when measuring:

 - 1.Net cash flow from operating activities refers to the cash inflow as per operating activities

statement.

 2. Capital expenditure refers to the number of cash outflows per year of capital investment.

 3. The increase in inventory is only included when the ending balance is greater than the opening balance. If the inventory is reduced at the end of the year, it is calculated as zero.

 4. Cash dividends include common shares and special shares cash dividends.

 5. Gross property, plant and facility are the total amount of real estate, plant and facility before deducting accumulated depreciation.

Note 4: The Issuer should classify various operating costs and operating expenses into fixed and variable properties. If there is an estimate or subjective judgment, attention should be paid to its rationality and consistency.
Note 5: If the company's stock is not denominated or the denomination is not NT$10, the calculation of the proportion of the paid-up capital in the former opening is calculated by the equity ratio of the balance sheet attributable to the owner of the parent company.

6.3 Audit Committee Review Report of the Latest Annual Financial Report

All Cosmos Bio-Tech Holding Corporation.

Audit Committee Review Report

The Board of Directors has prepared the 2020 Business Report, Financial Statement and Retained Earning Distribution Proposal, of which the financial statements have been audited by Chen Chiang Hsun and Ho Jui Hsuan, auditors of Deloitte & Touche, and unqualified opinion auditing report is issued. The above-mentioned business report, financial statement and earnings distribution proposal have been checked by the Audit Committee and it is considered that there is no discrepancy. A report will be issued in accordance with the Securities Exchange Law for reference.

All Cosmos Bio-Tech Holding Corporation

Audit committee convener

Yang Yung Cheng

March 26, 2021

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6.4 The consolidated financial statements of the parent company of the recent year by the accountant :
Please refer to pages 126 to 192 of this report.
6.5 If the company and its affiliate companies have encounter any financial turnover difficulty, the impact on the company financial condition should be listed in the latest annual report: None.

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7.0 Review and analysis of financial status and financial performance and risk issues

7.1 Financial status: The main reasons for the significant changes in assets, liabilities and shareholders' equity in the last two years and their impacts. If the impact is significant, the future countermeasure plan should be stated.

Unit : NT$ in Thousand

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Year/ Difference
2019 2020
Analysis Item Amount Ratio (%)
Current assets 1,788,718 1,827,027 38,309 2.14
Property, plant and
470,047 441,878 (28,169) (5.99)
equipment
Intangible assets 2,457 1,680 (777) (31.62)
Other assets 378,289 343,785 (34,504) (9.12)
Total assets 2,639,511 2,614,370 (25,141) (0.95)
Current liabilities 175,438 221,393 45,955 26.19
Long-term liabilities 3,359 - (3,359) -
Other Liabilities 34,799 29,799 (5,000) (14.37)
Total liabilities 213,596 251,192 37,596 17.60
Share capital 640,340 640,340 - -
Capital surplus 781,838 781,838 - -
Retained earnings 943,876 962,046 18,170 1.93
Other equity (320,320) (397,714) (77,394) 24.16
Total equity 2,425,915 2,363,178 (62,737) (2.59)
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The main reasons for the increase and decrease of the two phases are more than 20%, and the change amount is at least NT$10,000,000.

Current liabilities: Mainly due to the increase in bank borrowing for purchases of materials and other payables such as increase in royalties payable and freight expenses. The increase in above liabilities is related to operating expenses. Short-term bank borrowings for purchasing materials are also normal corporate borrowings and will not cause any significant impact.
Other equity: It is the result of exchange rate difference as the main operating point of the consolidated company is in Malaysia and the ringgit is the main functional currency, but the currency of the financial report is the new Taiwan dollar. Due to the large fluctuations in the foreign exchange market in 2020, there will be obvious differences and changes.

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7.2 Financial Performance:

(1) Financial performance analysis table

Unit : NT$ in Thousand

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Year Difference
2019 2020
Analysis Item Amount Ratio (%)
Operating revenue 1,767,699 1,642,783 (124,916) (7.07)
Operating costs 1,374,387 1,270,636 (103,751) (7.55)
Gross profit 393,312 372,147 (21,165) (5.38)
Operating expenses 320,081 269,436 (50,645) (15.82)
Profit from operations 73,231 102,711 29,480 40.26
Non-operating income 30,587 46,960 16,373 53.53
and expenses
Net profit before tax 103,818 149,671 45,853 44.17
Income tax expense 65,140 51,503 (13,637) (20.93)
Net profit after tax 38,678 98,168 59,490 153.81
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The main reasons for the increase or decrease of the two phases are more than 20%, and the change amount is at least NT$10,000,000.

Operating profit: The increase in operating profit was mainly due to the decrease in expected credit impairment losses. Also, benefited from the positive factors of the strong crude palm oil price, the revenue and profit performance of plantation customers in 2020 both increased, with the help of customers’ sufficient cash flow, expected credit loss decreased by 54,790 thousand NT dollars compared with the same period last year.
Non-operating income and expenses: mainly increased from other benefits, such as the increase in foreign currency exchange benefits and the increase in financial asset benefits.
Income tax expenses: the subsidiary of the company, ACI, obtained a 10-year tax exemption from the Ministry of Finance of Malaysia from March 2008 to March 2018. The preferential income tax rate of 20% is applicable to the company in the next 10 years after the expiration of the credit. However, since not having obtained the approval from the Ministry of Finance of Malaysia, the subsidiary is required to declare income tax at the original tax rate of 24%, hence increased in tax expenses.
(2) Expected sales volume and its basis, possible impact on the company's future business financial and countermeasure plan

As the fertilizer market in Malaysia is still dominated by chemical fertilizers, the company realized its excessive product concentration and actively developing microbial compound fertilizer products on other crops to reduce the operational risks caused product concentration. In addition, the strategic cooperation with the Grape King will enable us to expand into the biotechnology business of health products from agricultural biotechnology and expand the ASEAN market together. In addition, the expansion of the company's Indonesian plant is still actively underway, with a view to expanding the market and reducing the operational impact of excessive single market concentration.

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7.3 The analysis of cash flow changes

(1) Latest Analysis of changes in cash flow

Unit : NT$ in Thousand

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Year Difference
2019 2020
Analysis Item Amount Ratio (%)
Cash flow from
883,558 (126,878) (1,010,436) (114.36)
operating activities
Cash flow from
(284,319) 131,608 415,927 146.29
investing activities
Cash flow from
(344,349) (46,096) (298,253) (86.61)
financing activities
----- End of picture text -----

Changes analysis:

1. Cash flow from operating activities:

The cash flow ratio in 2020 decreased by 114.36% or 1,010,436 thousand from the previous period, mainly due to the following factors:

i. The net change of accounts receivable is -228,105 thousand, a decrease of 680,110 thousand or 150.47% from the previous period.

ii. The net change in inventory is 10,140 thousand, a decrease of 301,163 thousand or 96.74% over the previous period.

iii. The net change in prepayments is -86,913 thousand, a decrease of 106,509 thousand or 543.52% from the previous period.

The company's accounts receivable in 2020 were higher than in 2019, mainly due to shipments affected by Covid-19 in the first half of 2020. The company began to resume normal shipments in June. In addition to increasing customer demand, sales were concentrated in the second half of the year and were approximately NT$200 million more than the same period last year, so the receivables were also higher than last year.

The company’s inventory was affected by the setback of crude palm oil prices in 2019. Many plantations cut orders or delayed shipments due to internal capital turnover and internal rectification factors, which led to an increase in inventory at the end of 2019. Affected by Covid-19 in 2020, normal production capacity gradually resumed after the third quarter, but it was still unable to complete the supply in a short time. In addition, the epidemic caused the freight rate to rise and the transportation time to lengthen. In order to respond to customer demand orders for the economic recovery in 2021, the company maintains the inventory at the end of the period, so that the net change in the overall inventory turnover is reduced compared with the previous period.

The net change in prepayments in 2020 decreased by 106,509 thousand compared with the previous period. This was because the increase in the purchase due to the increase in order demand, and according to the payment terms agreed by the supplier.

Cash flow from investment activities: it is mainly the cash inflow of financial assets measured at amortized cost in 2020.
Cash flow from financing activities: mainly due to the increase of short-term borrowing for material purchasing.

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(2) Improvement plan for insufficient liquidity
Although the company continues to have operational capital turnover requirements in the coming year, it is expected that the company's revenue will be stable and the funds will be invested, so that the business activities will show a net cash inflow, and the cash flow of investment and financing activities should be available. Moreover, the company and the bank establish long-term good credit conditions, so there is no shortage of liquidity.
(3) Analysis of cash flow in the coming year (2021)

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Unit : NT$ in Thousand
Expected cash Remedies for estimated cash
Cash Balance At Estimated annual surplus shortage
The Beginning cash in/(out)flow (shortage)
Investment plan Financial plan
amount
761,806 68,548 830,354 - -
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Analysis of changes in cash flow in the coming year:

Business activities: Continue to expand the company's business, and strengthen cost control, to estimate incoming cash flow amount.
Investment activities: Having two new joint ventures in East Malaysia's Sabah state, to do research and produce industrialized services for oil palm waste treatment and agricultural waste recycling services; Indonesia's new joint venture company set up a factory to expand the Indonesian market.
Financing activities: None.

7.4 The significant impact of annual capital expenditures on financial operations in the most recent year:

Due to the good operating conditions of the company, the cash inflow from operating activities is stable and there is no significant capital expenditure in recent years, thus, there is no significant impact on the company's finances.

7.5 The most recent annual investment policy, the main reason for its profit or loss, the improvement plan and the investment plan for the following year

7.5.1 The company's investment policy:

The Company's main investment target is on the same industry and has not been engaged in non-related industries investment. In addition to the investment cycle regulation of the internal control system, the Company's Management enforced a standard of managing transfer investment business, such as “Relationship on Corporate Transaction Management Measures” and “The Measures for the Supervision and Management of Subsidiaries” are regulated for the investment in control. In addition, consider the various investment companies in the local laws and

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regulations and the actual operating conditions, and assist the transfer companies to establish appropriate internal control systems.

7.5.2 The main reasons for the profit or loss of investment in recent years and the improvement plan:

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Unit: NT$ in Thousand
2019
Re-invested Principal Business Gain/(Loss)
Main Reason for Gain/(Loss)
Entities Activities on
Investment
Manufacturing and sales of
biochemical organic
ACI 88,681Mainly from west Malaysia districts
high-performance
compound fertilizer
Manufacturing and sales of
biochemical organic
SSHF 590Mainly from east Malaysia districts
high-performance
compound fertilizer
Manufacturing and sales of
biochemical organic
PT ACB (4,316)No sales revenue yet
high-performance
compound fertilizer
Sales of biochemical
PT ACI compound fertilizer 9,976 [Increase of Indonesia market ]
revenue and profit
products
Research and production of
microorganisms into
AESB biochemical organic 11,931Increased sales of microorganisms
high-performance
compound fertilizer
Research and production of
KLSSB microorganisms into oil 974Supplying microorganisms to SESB
palm waste treatment
Forest planting and
CBSB 134No business income yet
research
GKB Probiotics for sale 3,363Increased sales of probiotics
Research and production of
SESB microorganisms into oil (1,296) [New business, need more time to ]
achieve regular production
palm waste treatment
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7.5.3 Investment plan for the coming year

After the pandemic slows down, the company expects new joint ventures in East Malaysia's Sabah state to do research and produce industrialized services for oil palm waste treatment and agricultural waste recycling in the coming year; Indonesia's new joint venture company will also set up a factory to expand the Indonesian market. The Company will continue to cooperate with the overall operation and development, observe the market sentiment trend and the Group's business strategy and other factors to invest in the appropriate time.

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7.6 Analysis and assessment of risk factors in the most recent year and till the publication date of annual report :
7.6.1 The impact of interest rate, exchange rate changes and inflation on the company's profit and loss and future countermeasures

(1) Interest rate changes

The Company's interest expenses for 2019 and 2020 were 9,448 thousands and 4,440 thousands respectively, accounting for 0.53% and 0.27% of the net operating income. The interest expense of the Company is mainly due to bank loans, and the ratio of operating income is not significant, so the interest rate changes have little impact on the Company. However, if there is a large fluctuation in the interest rate trend and the Company continues to have the demand for loans, the company will observe the interest rate trend and choose the fixed interest rate in addition to the other capital market financing tools. Loans by means of floating interest rates to reduce the risk of interest rate fluctuations.

(2) Exchange rate changes

Since the company's main sales locations are mainly in Southeast Asia such as Malaysia, basically most of the sales are denominated in Malaysian currency, while the purchases are mainly denominated in US dollars. Therefore, most of the exchange differences are pre-purchased in foreign currency, but there may still be insufficient of pre-purchased foreign exchange will may cause the appreciation of the RM position to the US dollar incurred risk of the foreign currency exchange loss to the Company.

The Company's foreign currency exchange gains in 2019 and 2020 were 9,533 thousands and 19,084 thousands respectively, accounting for 0.54% and 1.16% of net operating income, and there was no significant exchange rate fluctuation loss. The company has taken below countermeasures:

A. Continue to strengthen the concept of financial personnel's hedging, evaluate the pre-purchased foreign currency according to the company's purchase of raw material order amount and the exchange rate set by the sales order, and through the online exchange rate real-time system and strengthen the relationship with financial institutions and monitor international political status, etc. In order to judge the trend of exchange rate changes, it is used as a basis for pre-purchasing foreign currency.

B. Increasing the proportion of export sales against the expenses of the sales under the same currency of the cost of purchase and related expenses, in order to achieve natural hedging effect.

(3) Inflation

The global economic recession in 2020 is even worse than the 2009 financial crisis. It is mainly affected by the epidemic. The severe lockdown measures

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adopted by various countries have greatly weakened economic activities. In addition, the loose policies have limited economic revitalization and the global economic growth factors are uncertain, the market prices of the company's main raw materials such as chlorine, phosphorus and potassium have also fluctuated; however, the company has become a strategic partner with suppliers in recent years. During the period of inflation, suppliers are supplying raw material at the lower cost than the market price. In addition, the expansion of production capacity to achieve economical scale, continuous improvement of process capability to reduce production costs, and simultaneously to develop of high value-added products, etc., have achieved concrete results in improving gross profit and reducing inflation, while the dropping of raw material cost, the result is remarkable.

7.6.2 Engagement in high-risk, high-leverage investment, capital loan and others, endorsement guarantee and derivative commodity trading, profit or loss and future countermeasures

The Company has always focused on the industry and operated its business on a pragmatic basis. Apart from focusing on the company's business areas, the Company has not engaged in high-risk, highly leveraged investments. The Company is engaged in the main business of derivative products in response to the risk of exchange rate fluctuations, and the company's fund loan and endorsement guarantees are all inter-group companies or affiliate, and the company has “derivative commodity operating procedures”, “finance loan and endorsement guarantee operations”. Measures and "Acquisition or Disposition of Asset Processing Procedures" for compliance.

7.6.3 Research and development estimation expenses for future R&D projects

Research and development estimation expenses for future R&D projects	Research and development estimation expenses for future R&D projects
R&D Projects Projects Contents
4-in-1 phage biofertilizer Screening of phage that can control R. solanacearum in wastewater, using transgenic E. coli as a host for mass production of phage, production of phage preparations and application to fertilizerproducts
4-in-1 anti-white root disease control fertilizer Screening endophytic Trichoderma from roots of healthy plants, optimizing the production of spores through culture, and combiningfertilizers to control diseases
Oil palm by-product degradation A variety of Malaysian native degrading bacteria are mixed and degraded for by-products such as oil slag from palm oil mills to decompose the finished product into organic fertilizer.
Value-added agricultural by-products	The addition of Trichoderma for different agricultural by-products produces a control agent for farmers in a more economical way, and also solves the problem of excess by-products. Different by-products and different Trichoderma products are paired with each other, and the formula is stable, suitable concentration and economical formula

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R&D Projects Projects Contents	R&D Projects Projects Contents
Disease resistant seedling inoculation Inoculate disease-resistant Trichoderma for different crop seedlings. The use of Trichoderma species is adjusted accordingto the cropand medium.
Special nitrogen-fixing biological fertilizer for rice and green leafy vegetables	Develop high-efficiency nitrogen-fixing bacteria, optimize the breeding conditions and breed the strain, produce high-concentration bacterial liquid, and apply it to fertilizer products to improve soil nitrogen fixationperformance.

The company is expected to consider the actual needs of the future to upgrade the experimental equipment, to expand the development of functional strains and to have a backup microbial production line and increase the production speed, continue to commercialize the bacterial strain and to invest in research and development resources according to individual product development plans in the future. Currently, target to invest approximately RM5 million into the research and development.

7.6.4 The impact of important policies and legal changes at home and abroad on the company's financial business and the countermeasures

The country of registration of the company is at Cayman Islands. The Cayman Islands is mainly engaged in financial services. The economy is open and there is no exchange control, and the political and economic environment is stable. The main operating country is Malaysia. The main product produced and sold by the company is biochemical compound fertilizer, which required for the growth of oil palm tree, the most important economic crop in Malaysia. The company's biochemical compound fertilizer MPOB F4 is approved and licensed by the Malaysian Oil Palm Board (MPOB) and continues to introduce biochemical compound fertilizers that can treat and prevent diseases, such as Gano EF, which prevents oil palm tree ganoderma disease. The company has been long in cooperating with professional organizations and is always aware of the impact of important domestic and international policies and legal changes on the company's financial operations in order to take appropriate countermeasures. In recent year and till the date of publication of annual report, the company has not had any significant events affecting the company's financial business due to changes in important policies and laws in the above regions.

7.6.5 The impact of technological changes and industrial changes on the company's financial business and the countermeasures

The company's main products are biochemical compound fertilizers necessary for the growth of crops. With the increasing global population, the reduction of arable land and environmental awareness. The ratio of farmers using general chemical fertilizers has been declining year by year, and compound fertilizers mixed with various unit fertilizers have gradually replaced traditional fertilizers. With the advancement of science and technology, the multifunctional biochemical compound

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fertilizer is the main development trend. Demand in the fertilizer market is affected by crop production and food supply. According to the information published by the International Fertilizer Industry Association, in 2020, global fertilizer consumption will increase by 2% to 193.5 million tons, and global fertilizer use is expected to further increase by 1.1% in 2021.

The company continues to develop various types of fertilizers, using innovative technology to add biological species, green technology, pest control and other elements to the fertilizer manufacturing, not only can provide soil nutrients can change the soil's pH, viscosity, pest diseases, weeds and other issues. Therefore, technological changes and industrial changes have not had a major impact on the company's financial business.

7.6.6 The impact of corporate image change on corporate crisis management and countermeasures

The company is committed to be sustainable with business integrity, focusing on the development and production of various types of fertilizers, in order to meet the needs of various regions of climate, soil, crops, etc., The company has very good reputation and is well known among the industry in Malaysia. In the recent year, there has been no corporate crisis management due to changes in corporate image.

7.6.7 Expected benefits, possible risks and countermeasures for M&A

There have been no plans to acquire other companies in recent year of the company and till the publication date of the annual report.

7.6.8 Expected benefits, possible risks and countermeasures for the expansion of the plant

In the most recent year and as of the date of publication of the annual report, the company’s two new joint ventures in East Sabah have set up industrialization services for research and production of bacterial cells for oil palm waste treatment and agricultural waste recycling. Assist agricultural processing plants to convert wastes that originally required expensive processing fees into multi-functional and economically valuable agricultural products such as disease-resistant organic fertilizers, and use this biological control agent more widely in oil palm plantations. It effectively prevents the growth of oil palm ganoderma disease.

7.6.9 Risks and countermeasures in the concentration of purchase or sales

(1) Purchase

The purchase amount of the top ten Supplier Company in 2019 and 2020 accounted for 77.03% and 68.26% of the total annual net purchases, respectively, with a slight increase or decrease in the proportion. The procurement projects are mainly potassium chloride, urea and phosphate rock powder, of which potassium chloride is the main raw material exceeding 40% of the net purchase. Because JSC BELARUSIAN POTASH COMPANY (hereinafter referred to as BPC) is the main

110

direct manufacturer of potassium chloride, the company has a higher ratio of potassium chloride purchase from BPC. The Company's good business relationship with BPC and its products are substitutable. Therefore, the situation of concentrated purchases should not have a material adverse impact on the financial business of the Company.

The above-mentioned company's purchase concentration is caused by the industrial characteristics. In addition, the company continues to search for suitable urea, potassium chloride and phosphate rock suppliers around the world based on the diversification of sources to minimise the risk of concentrated purchases. Therefore, the company should not have encounter risk of major concentrated purchases.

(2) Sales

The sales of the top ten customers of the Company in 2019 and 2020 accounted for 55.37% and 52.41% of the annual operating income, mainly due to the fact that Malaysia is one of the key global oil palm production countries. The oil palm industry is owned by Malaysia government and large enterprises, which owned more than 80% of the total plantation space in Malaysia. Only approximately 10% of the oil palm plantation is owned by the small owner. As a result, the sales ratio of the top ten customers of the company is relatively high. However, the Company continues to strive to develop new customers in each region, and the sales ratio of each period to a single customer has not exceeded 20%. The company's operation has also shown stable profit for many years, so the risk of sales concentration should not be significant.

7.6.10 Directors, supervisors or major shareholders holding more than 10% of the shares, the impact of a large number of shares transferred or replaced on the company, risks and countermeasures

The Company's recent year and till the annual report published date, there is no operational risk to the company due to the substantial transfer or replacement of the directors or major shareholder equity.

7.6.11 The impact of changes in management rights on the company, risks and countermeasures

There has been no change in the Company's management rights in the recent year and till the date of publication of the annual report.

7.6.12 Litigation or non-litigation incidents, the company and the company's directors, supervisors, general managers, substantive personels, major shareholders holding more than 10% of the shares and subordinate companies have A major lawsuit that the subordinate company has decided to determine or is still in the system of litigation, non-litigation or administrative litigation, the result may have a significant impact on shareholders' equity or securities prices. The facts of the dispute, the amount of the subject matter, the commencement date of the litigation,

111

the main litigant and the annual report shall be disclosed.

(1) The company's recent two-year and up-to-date annual report stated cases of the litigation, non-litigation or administrative litigation that has been determined or currently in the system, and the results may have a significant impact on shareholders' equity or securities prices. The fact of the dispute, the amount of the subject matter, the commencement date of the lawsuit, the parties involved in the proceedings and the current situation should be disclosed:
The company itself has not litigated or a non-litigation situation in the last two years and up to the date of publication of the annual report.
(2) The company's directors, supervisors, general managers, substantive principals, major shareholders and subordinate companies with a shareholding ratio of more than 10% have been determined or currently in the company's last two years and up to the date of publication. In the event of litigation, non-litigation or administrative litigation, the outcome may have a significant impact on the company's shareholders' equity or securities price:

Peng Sheng Ching, a director of the company, was accused of committing a forgery in the Republic of China in 1992. However, the case has been filed by the Taiwan Taipei District Prosecutor’s Office No. 16236 for the non-prosecution of the case. Although Mr. Lin Qichun has raised an appeal later, but was dismissed by the Taiwan High Court Procuratorate's 104th Annual Speech No. 8590. Despite Lin Qichun’s 2nd appeals was being dismissed by the Taipei District Court’s 104 No.265. The plaintiff also filed a civil lawsuit against the director Peng Sheng Ching in the same incident. The case was judged by the Taiwan Taipei District Court's 101 No. 945 and the plaintiff was found to have lost the first instance appeal. The plaintiff then filed a second-instance appeal. The judgment (Case No.: No. 323, No. 323) was dismissed, and Lin Qichun was defeated. The plaintiff again submitted the third trial, which was already numbered by the Supreme Court in the 106th year of Taiwan Anti-Japanese No. 1028, No. 1029, No. 1030 and Taihang. No. 2319 ruled that the plaintiff’s protest was dismissed. However, in the case of the plaintiff Lin Qichun’s additional lawsuit in the second instance, (the case number: Taiwan High Court No. 103 No. 323), the High Court also ruled that the plaintiff’s additional lawsuit was dismissed by the judgment of March 27, 2007. On October 1, 108, the Supreme Court Civil Ruling 108 Annual Anti-Taiwan No. 679 ruled that the protest was dismissed and no further appeals were allowed, and the case was closed. The result has no significant impact on the company’s shareholders’ equity or securities prices.

(3) The company's directors, supervisors, managers and major shareholders with a shareholding ratio of more than 10% have stipulated in Article 157 of the Securities Exchange Law in the last two years and up to the date of publication of the annual report and the company's current handling Situation: None.

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7.6.13 Other important risks and countermeasures:

(1) Risk of research and development of new products

The company continues to improve its research and development capabilities to maintain its market competitiveness. However, biotechnology and technology are rapidly developing, and new products still need to be certified by government agencies and field experiments. Therefore, can the company timely research results? There is still a risk of uncertainty in commercial production and acceptance in the market.

(2) Main chemical fertilizer raw materials depend on import risks

Because Malaysia produces only a small amount of nitrogen, phosphorus and potassium, which are the main raw materials for chemical fertilizers, the raw materials are subject to imports. The import prices fluctuate due to the global economy. However, most of the orders of the company are obtained through competitive bidding. Therefore, before bidding, the company will refer to the quotation of the raw materials provided by the supplier to determine the bid price, in order to minimize the impact of the change of raw material price on the profit margin, also to control the import of raw material cost fluctuation risk effectively.

(3) Risk of horizontal competition

Due to the high technical threshold for the production of biochemical compound fertilizer, the microbial extraction, culture, quantification and compounding technology required for biochemical compounding are not easy to obtain. The company aimed to be ahead of the same industry competitors, thus, continuously invests in research and development of microbial related technologies, simultaneously apply for related patent rights to prevent peers from entering biochemistry compound fertilizer market. On the other hand, the company continues to develop new products to maintain competitive advantage and market share.

(4) Ten-year tax exemption does not meet the risk of recourse and maturity Subsidiary ACI obtained the ten-year tax exemption for Malaysian Biotechnology Corporation Sdn. Bhd. (hereinafter referred to as BNX) in March 2008. However, due to insufficient number of knowledge workers in 2008, it was inconsistent with the regulations of the competent authorities. Nevertheless, after the company applied to BNX in 2009 and obtained the consent to adjust the conditions of the knowledge workers, the company has been reviewed by the competent authorities every year so far, except for the case of non-conformity in 2008.

After consulting the lawyers and taking the relevant authorities' correspondence, BNX has issued an evaluation letter to the company in 2009 to inform that

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despite the company is not eligible due to case of non-conformity in 2008, however, considering the business model of the company, it agreed to reduce the proportion, and the company has been awarded with 10 years tax exemption. Since 2009 to 2013, the company has passed the BNX tax exemption qualification evaluation. In addition, due to the company's good compliance record, BNX advised that the company only required to report online in 2014 and 2015. The tax exemption is expected to expire in March 2018, and the preferential income tax rate of 20% will be applied to the company's business-related net profits in the next 10 years after the expiration of the original credit period. However, since it has not been approved by the Ministry of Finance of Malaysia, the subsidiary ACI needs to declare income tax at the original tax rate, and the company applies a tax rate of 24%.

In summary, despite the company was disqualified from the 10-year tax exemption previously. The risk of recourse to unqualified taxes is still low and should not have a material adverse effect on the Company.

7.7 Other important matters : None

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8.0: Special Records

8.1 Information about the affiliate companies:

8.1.1 Overview of affiliate companies
(1) Organization chart

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(2) Name of each company, date of establishment, address, amount of paid-in capital, main business items

Unit : in Thousand

Unit : in Thousand	Unit : in Thousand	Unit : in Thousand	Unit : in Thousand	Unit : in Thousand
Company Name Date of establishment Address Paid-up capital Main business activities or Production items
All Cosmos Industries Sdn. Bhd. Jul, 1999 PLO 650, Jalan Keluli 7, Pasir Gudang Industrial Estate,81700 Pasir Gudang, Johor, Malaysia. RM 30,000 manufacturing and sales of biochemical compound fertilizer products
Sabah Softwoods Hybrid Fertiliser Sdn Bhd Nov, 2010 Lot 50 & 51, Phase 2, Jalan Tengah Nipah, 5.5Km, 91100 Lahad Datu, Sabah. RM 60,000 Manufacturing and sales of biochemical compound fertilizer products
PT All Cosmos Indonesia	Aug, 2011	Ira Building Jl. Cactus Raya Blok J No.1 Komp. Perumahan Taman Setia Budi Indah Medan - 20131, Sumatera Utara - Indonesia	RP 4,000,000	Sales of biochemical compound fertilizer products

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Research and
production of
PLO 539, Jalan Keluli, Pasir
microorganisms into
Arif Efektif Sdn. Bhd Apr, 2012 Gudang Industrial Estate,81700 RM 500
biochemical organic
Pasir Gudang, Johor, Malaysia.
high-performance
compound fertilizer
12A, Jalan Dedap 17, Taman
Cosmos Biowood Sdn. Forest planting and
Oct, 2015 Johor Jaya, 81100 Johor Bahru, RM 500
Bhd. research
Johor, Malaysia.
Research and
Lot B12, Phase 1C,
production of
Kinabalu Life Sciences Portcity@POIC, KM5, Jalan
Dec, 2017 RM 4,000 microorganisms into
Sdn. Bhd. Tengah Nipah, 91100 Lahad
oil palm waste
Daty, Sabah
treatment
Jalan Kelapa Sawit, Off KM 4, Manufacturing and
Sawit Ecoshield Sdn.
Nov, 2017 Jalan Tuaran, 88300 Kota RM 5,000 sales of biological
Bhd.
Kinabalu, Sabah, Malaysia. vaccines
Jalan Kelapa Sawit – Nomor 1,
Manufacturing and
KEK Sei Mangkei, Kecamatan
sales of biochemical
PT All Cosmos Biotek Aug, 2018 Bosar Maligas, Kabupaten RP 33,880,000
compound fertilizer
Simalungun, Sumatera Utara,
products
Indonesia.
42-2, Jalan PJU 5/11, Dataran
GK Bio International Sunway, Kota Damansara, 47810 Wholesale of
Oct, 2018 RM 3,000
Sdn. Bhd. Petaling Jaya, Selangor, Probiotics
Malaysia.
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(3) Presumed to be the same shareholder information for those with control and affiliation: None
(4) Relationship between the company and the related company, mutual shareholding ratio, share and actual investment amount

March 31, 2021

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The company holds at the end of the period Holding the company
Name Shareholding Shares Unit Investment
Relationship Investment Ratio
proportion Holding Share Amount
Amount
Subsidiary
All Cosmos Industries
company 100% 30,000,000 RM 30,000,000
Sdn. Bhd.
Sabah Softwoods Subsidiary
Hybrid Fertiliser Sdn. company 55% 33,000,000 RM 33,000,000
Bhd.
Subsidiary
PT All Cosmos Rp.
company 100% 80,000
Indonesia 4,000,000,000
Subsidiary
Rp.
PT All Cosmos Biotek company 83% 28,280
28,280,000,000
2nd Tier
Arif Efektif Sdn. Bhd. Subsidiary 49% 245,000 RM 245,000
company
2nd Tier
Kinabalu Life Sciences
Subsidiary 60% 2,400,000 RM 2,400,000
Sdn. Bhd.
company
2nd Tier
Cosmos Biowood Sdn.
Subsidiary 80% 400,000 RM 400,000
Bhd.
company
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GK Bio International Sdn. Bhd. Subsidiary company 60% 1,800,000 RM 1,800,000	GK Bio International Sdn. Bhd. Subsidiary company 60% 1,800,000 RM 1,800,000	GK Bio International Sdn. Bhd. Subsidiary company 60% 1,800,000 RM 1,800,000	GK Bio International Sdn. Bhd. Subsidiary company 60% 1,800,000 RM 1,800,000	GK Bio International Sdn. Bhd. Subsidiary company 60% 1,800,000 RM 1,800,000	GK Bio International Sdn. Bhd. Subsidiary company 60% 1,800,000 RM 1,800,000	GK Bio International Sdn. Bhd. Subsidiary company 60% 1,800,000 RM 1,800,000	GK Bio International Sdn. Bhd. Subsidiary company 60% 1,800,000 RM 1,800,000
Sawit Ecoshield Sdn. Bhd.	Related company	40%	2,000,000	RM 2,000,000

8.1.2 Operation overview

Overview of the operations of various related companies

As at December 31,2020. Unit : in Thousand

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Current Earnings per
Current Current
Paid-up Total assets profit and share (yuan)
Company Name Total debt Net worth operating business
capital loss (after (after tax)
income profit
tax)
All Cosmos Industries RM 30,000 [RM ] RM 21,143 [RM ] RM RM 10,278 RM 12,906 RM 0.43
Sdn. Bhd. 230,310 209,167 181,369
Sabah Softwoods
Hybrid Fertiliser Sdn RM 60,000 [RM ] RM 10,891 [RM ] RM 44,145 RM (336) RM 152 RM 0.00
111,949 101,058
Bhd
PT All Cosmos Biotek RP 33,800,000 RP 29,873,708 [RP 21,106] [RP ] 29,852,602 [RP -] RP (2,665,210) RP (2,542,946) [RP (75.06)]
PT All Cosmos RP RP RP RP RP RP RP
RP 1.23
Indonesia 4,000,000 39,040,650 27,344,116 11,696,534 53,987,819 5,517,581 4,906,212
Arif Efektif Sdn. Bhd RM 500 RM 7,848 RM 1,635 RM 6,213 RM 8,763 RM 4,761 RM3,737 RM 7.47
Kinabalu Life Sciences
RM 4,000 RM 4,906 RM 670 RM 4,236 RM 1,110 RM 314 RM 231 RM 0.06
Sdn. Bhd.
Cosmos Biowood Sdn.
RM 500 RM 1 RM 336 RM (335) RM - RM (4) RM 24 RM 0.05
Bhd.
GK Bio International
RM 3,000 RM 4,225 RM 778 RM 3,447 RM 4,380 RM 1,035 RM 797 RM 0.27
Sdn. Bhd.
Sawit Ecoshield Sdn.
RM 5,000 RM 13,402 RM 8,921 RM 4,481 RM 2,304 RM (475) RM (460) RM (0.09)
Bhd.
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8.2 The most recent year and the end of the annual report, the date of published, private

equity securities processing : None.

8.3 The latest annual report, the date of publication, the company holds or disposes of the

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company's stock : None.

8.4 Other necessary supplementary notes : None.

8.5 The occurrence of significant impact on shareholders' equity or securities price as

stipulated in Article 36-2-2 of the Securities Exchange Law : None.

8.6 A statement of significant differences with the provisions of the shareholders' rights and interests of the Republic of China :

Due to the slight inconsistency between the British Cayman Islands Act and the Republic of China Act, the Taiwan Stock Exchange Co., Ltd. announced the “Registration Form for the Protection of Shareholders’ Rights of Foreign Issuer Registration Countries” (hereinafter referred to as “Shareholders’ Rights Protection Matters”). ) The following list shows the differences between the Company's current Articles of Association (the “Articles of Association”) and the protection of shareholders' interests due to the provisions of the British Cayman Islands Act, and the Articles of Association of the Company provisions.

Differences with the
		Articles of Association and
provisions on matters of	British Cayman Islands Act
		Description
protection of shareholders'	and Description

rights and interests

If a company buys its own shares and transfers it to employees, it may limit the employees from transferring within a certain period of time. However, the period may not exceed two years.	The treasury shares are subject to the terms and conditions of the company directors; the Cayman Company Law does not have provisions for employee reward programs.	According to Article 1 of the Articles of Association, Treasury Shares are shares issued in accordance with the Articles of Association, the Cayman CompaniesAct and the Listing Rules Act, which are bought back, redeemed or otherwise obtained by the company and have not been cancelled; This provision is set out in section 40D of the company's articles of association; however, according to Cayman's lawyers, the restrictions on the transfer are between the company and the employee's contractual relationship (the restrictions agreed between the company and the employee is a contractual matter between themselves.)
5. The following matters shall be listed and explained in the convening of the shareholders' meeting, and shall not be proposed by a provisional motion:	Regarding 5. The Cayman Company Law has no special provisions for the provisional motion. According to Cayman's lawyers, regarding the provisional motion, the notice of the shareholders'	The Cayman Company Law has no special provisions for the provisional motion; therefore, the item 5 is stipulated in Article 50 of the Articles of Association. According to Cayman's lawyers, regarding the provisional motion, the notice of the shareholders' meetingmust clearly

118

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Differences with the
Articles of Association and
provisions on matters of British Cayman Islands Act
Description
protection of shareholders' and Description
rights and interests
(1) Appointing or meeting must clearly state state the agenda of the meeting and
dismissing directors or the content of the meeting provide relevant information for the
supervisors; and provide relevant shareholders; however, in the notice
(2) Change the charter; information for the of the shareholders' meeting, the
(3) Dissolution, merger, shareholders; however, in "any other subject" agenda is usually
share conversion, and the notice of the added. Usually have an informal or
division of the shareholders' meeting, the insignificant nature, the chairman
company; "any other subject" agenda should not add any important events
(4) conclude, change or is usually added. Usually into this agenda; if there are any
terminate a contract for have an informal or important matters, the meeting
the lease of all insignificant nature, the should be convened to discuss the
business, entrusted chairman should not add resolution according to the
operations or joint any important events into procedure; if the matter is urgent, it
operations with others; this agenda; if there are any must be discussed in the next
(5) to transfer all or a important matters, the shareholders meeting, which agenda
major part of the meeting should be convened will be proposed and ratified in the
business or property; to discuss the resolution next meeting.
(6) Transferring all according to the procedure;
business or property to if the matter is urgent, it
others, which has a must be discussed in the
significant impact on next shareholders meeting,
the operation of the which agenda will be
company; proposed and ratified in the
(7) Private placement of next meeting. Although
securities of an equity Cayman’s law does not
nature; expressly prohibit an
(8) The director is engaged interim motion, Cayman’s
in the licensing of lawyers advise that it is not
non-competition appropriate to have a
activities; provisional motion at the
(9) Distribution of one or shareholders’ meeting.
all dividends by way of
issuing new shares;
(10) The statutory surplus
reserve and the capital
reserve due to the
issuance of shares or
the incentive of the
shares, and the
distribution of new
shares to the original
shareholder
3. When the company According to the opinion of The Cayman Company Law does not
exercises its voting the British Cayman Islands specifically stipulate the content of
rights in writing or lawyers, the chairman of the the preceding paragraph of Article 3.
electronically, its shareholders' meeting will Therefore, the first paragraph of
method of exercise be entrusted to vote on Article 3 is stipulated in Article 68 of
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Differences with the
Articles of Association and
provisions on matters of British Cayman Islands Act
Description
protection of shareholders' and Description
rights and interests
shall be stated in the behalf of the shareholders the Articles of Association.
notice convened by the whom voted in the form of According to the opinion of Cayman
shareholders' meeting. writing. Lawyers, Shareholders who exercise
Shareholders who their voting rights are deemed to
exercise their voting have entrusted the chairman of the
rights in writing or shareholders' meeting to vote on
electronically are behalf on the basis of the
deemed to be present in instructions in the written or
person at the electronic. In consideration of
shareholders' meeting. Cayman's lawyer's opinion, the third
However, the paragraph shall be stipulated in
provisional motion of Article 68 of the Articles of
the shareholders Association (that is, the shareholders
meeting and the who exercise the voting rights in
amendment of the writing or electronically shall be
original motion are deemed to have entrusted the
deemed to be waived. chairman of the shareholders'
meeting to act on behalf in the
shareholders' meeting in accordance
with the instructions in the written or
electronic documents. Its voting
rights, but the temporary motion of
the shareholders meeting and the
amendment of the original motion
are deemed to be waived, but the
above-mentioned entrustment shall
be deemed not to constitute the
principal of the listing cabinet law.
5. After the shareholder According to the opinion of The Cayman Company Law does not
has exercised the voting the British Cayman Islands specifically stipulate the content of
right in writing or lawyers, the chairman of the item 5; therefore, the item 5 is
electronically, if he shareholders' meeting will stipulated in Article 70 of the
wishes to attend the be entrusted to vote on Articles of Association. According to
shareholders' meeting in behalf of the shareholders Cayman's lawyer, under the
person, he shall revoke whom voted in the form of Common Law, the principal can
the initial exercise of writing. revoke its proxy by attending the
voting rights in the meeting in person, due to written or
preceding paragraph two electronic Shareholders who exercise
days before the their voting rights are deemed to
shareholders' meeting; have entrusted the chairman of the
the overdue revocation shareholders' meeting to vote on
shall be in writing or behalf on the basis of the
electronically. The voting instructions in the written or
right of the mode of electronic documents. Therefore, the
exercise shall prevail item 5 may not be enforceable (not
enforceable).
4. After the power of The Cayman Company Law The Cayman Company Law has no
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Differences with the provisions on matters of protection of shareholders' rights and interests British Cayman Islands Act and Description Articles of Association and Description	Differences with the provisions on matters of protection of shareholders' rights and interests British Cayman Islands Act and Description Articles of Association and Description	Differences with the provisions on matters of protection of shareholders' rights and interests British Cayman Islands Act and Description Articles of Association and Description
attorney has been served on the company, the shareholder who wishes to attend the shareholders' meeting in person or wishes to exercise his or her voting rights in writing or electronically; shall notify the company in writing of the cancellation of the entrustment two days before the shareholders' meeting; Any delay in cancellation of entrustment is subject to Proxyvotingrights. has no special provisions for the power of attorney or collection of powers. special provisions for the power of attorney or the collection of powers of attorney; therefore, the fourth item is specified in Article 62B of the Articles of Association. According to Cayman's lawyer, under the Common Law, the principal can revoke its proxy by attending the meeting in person, thus, the item 4 may not be enforceable.
The following resolutions relating to the interests of shareholders shall be attended by more than two-thirds of the total number of shareholders who have issued shares, and more than half of them shall agree to the voting rights of the shareholders. If the total number of shares of the attending shareholders is less than the above-mentioned quota, it is allowed to attend by proxy as long as the attendance are more than half of the total number of shareholders who have issued shares and to attend more than two-thirds of the voting rights of the shareholders: 1. The company concludes, alters or terminates the contract for the lease of all business, entrusted operations or co-operation with	Regarding 1., 4., and 5. (Segmentation), there are no special requirements or prohibitions in the Cayman Company Law. With regard to 2. and 3., Article 24 of the Cayman Companies Act stipulates that any changes to the Bylaws shall be subject to a special resolution. Regarding 5 (dissolved part). Article 116 of the Cayman Company Law stipulates that the company shall voluntarily dissolve by special resolution, and if it is unable to pay off the debt and voluntarily dissolve it, it shall be passed by the shareholders' meeting (the company In general meeting resolves...), Cayman’s lawyers believe that the aforementioned resolutions of the shareholders’ meeting can be resolved by ordinary resolutions, special resolutions or higher	(1) The Cayman Company Law does not specifically require or prohibit the division of paragraphs 1, 4 and 5; therefore, the divisions of paragraphs 1, 4 and 5 are separately specified in the company. Article 32(a)(b)(c)(d)(g) of the Bylaws must be adopted by a special resolution of the shareholders' meeting (i.e. “Supermajority Resolution Type A” or “Type B Special Resolution” (Supermajority Resolution Type B) (as defined above) (2) According to Article 24 of the Cayman Company Law, any change in the company's articles of association must be subject to a special resolution of the shareholders' meeting; therefore, paragraph 2 is stipulated in Article 157 of the Articles of Association, that is, the company may have a special resolution at any time ( Special Resolution) Change Memorandum and/or Bylaws. The shareholders' meetingwill be in accordance

121

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Differences with the
Articles of Association and
provisions on matters of British Cayman Islands Act
Description
protection of shareholders' and Description
rights and interests
others, the transfer of all resolutions as stipulated in with Article 51 of the Articles of
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Differences with the provisions on matters of protection of shareholders' rights and interests British Cayman Islands Act and Description Articles of Association and Description	Differences with the provisions on matters of protection of shareholders' rights and interests British Cayman Islands Act and Description Articles of Association and Description	Differences with the provisions on matters of protection of shareholders' rights and interests British Cayman Islands Act and Description Articles of Association and Description
others, the transfer of all	resolutions as stipulated in	with Article 51 of the Articles of
or a major part of the business or property, the transfer of all business or property of others, which has a significant impact on the company's operations. 2. Change charter 3. If the change of the articles of association will caused damage to the special shareholders, a special shareholder resolution meeting is required. 4. Distribution of one or all dividends by way of issuing new shares 5. Resolution of dissolution, merger or division	the company’s articles of association. Ordinary Resolution can be passed. In addition, regarding 5 (merger), according to Cayman's lawyer, Section 233(6) of the Cayman Company Law is subject to special resolution. If there are other resolutions in the company's articles of association, it shall be handled in accordance with the company's articles of association.	Association (that is, the voting shareholders who represent more than half of the total number of issued shares will be present in person or by proxy) (3) According to Article 24 of the Cayman Company Law, any change in the company's articles of association must be subject to a special resolution of the shareholders' meeting approval; therefore, paragraph 3 shall be stipulated in Article 18 of the Articles of Association, that is, if the company's articles of association are changed. The matters of the rights of the special shareholders shall be subject to the Special Resolution by the Special Shareholders' Meeting, in addition to the Special Resolution. The shareholders' meeting will be in accordance with Article 51 of the Articles of Association (that is, the voting shareholders who represent more than half of the total number of issued shares will be present in person or by proxy) (4) Regarding the dissolution of paragraph 5, according to Article 116 of the Cayman Company Law, the company shall voluntarily dissolve by special resolution, and if it is unsolvable, it should be passed through resolution of the shareholders' meeting (the Company in general meeting resolves...), Cayman's lawyers believe that the aforementioned resolution of the shareholders' meeting can be resolved by an Ordinary Resolution, a Special Resolution or a higher resolution as stipulated in the company's

122

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stipulated in Article 33 of the Articles of Association, in which if the company voluntarily disbands due to the inability to pay off the debts as scheduled, it should be approved by the shareholders meeting with a special resolution (i.e. “Supermajority Resolution Type A” or “Type B Special Resolution”. (Supermajority Resolution Type B) (as defined above) (Article 33(a)), if the company voluntarily disbands for other reasons, it shall be subject to a Special Resolution approval (Article 33(b) article). The shareholders' meeting will be in accordance with Article 51 of the Articles of Association (that is, the voting shareholders who represent more than half of the total number of issued shares will be present in person or by proxy). (5) Regarding the merger of paragraph 5, Cayman's lawyer stated that the merger part is subject to the special resolution approval (Special Resolution) in accordance with the provisions of Article 233(6) of the Cayman Company Law. If the company's articles of association have other resolutions, it is handled in accordance with the provisions of the company's articles of association; therefore, the merger of the fifth paragraph is stipulated in Article 31(c) of the Articles of Association. The shareholders' meeting will be in accordance with Article 51 of the Articles of Association (that is, the voting shareholders who represent more than half of the total number of issued shares will be present in

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Differences with the
Articles of Association and
provisions on matters of British Cayman Islands Act
Description
protection of shareholders' and Description
rights and interests
person or by proxy)
Supervisor regulations The Cayman Company Act As the company did not set up a
has no special rules for supervisor, the charter was not
supervisors. amended.
1. Shareholders who hold There are no special There are no special requirements or
more than three percent requirements or prohibitions prohibitions in the charter of the
of the total number of in the charter of the Cayman Cayman company, and the company
issued shares of the company. does not set up the supervisor, but
company for more than According to Cayman law, the audit committees are set up; refer
one year may request the in the event of a shareholder to the letter of the Board of Directors
supervisor to file a filed a lawsuit on behalf of a on July 27, 101, Taiwan letter No.
lawsuit against the company is: (A) the act is 1011702189 The independent
company through the illegal or exceeds the scope directors replaced the supervisors, so
Taipei District Court of of the company's the contents of items 1 and 2
Taiwan as first administer jurisdiction and cannot be regarding the supervisors were
court. ratified by the shareholders; replaced by independent board
2. Within 30 days after the or (B) the act constitutes a members of the audit committee,
shareholder made the fraud against the minority which was stipulated in Article 123
request, when the shareholder (i.e. The under the Articles of Association,
supervisor did not file a personnel of seeking relief that is, courts with jurisdiction
lawsuit, the shareholder in the lawsuit is the major (including Taipei, Taiwan) The
may file a lawsuit against shareholder, and the major District Court, if applicable, is the
the company and the shareholder will not allow court of jurisdiction; another
Taipei District Court of the company to let the Cayman lawyer stated that Article
Taiwan shall be the first plaintiff seek relief in the 123 under the Articles of Association
administer court. lawsuit. If the lawsuit is must comply with Cayman law.
filed on the grounds of this According to Cayman law, if the
paragraph, it is necessary to director believes that the lawsuit is
prove the case of fraud and not of interest to the company, the
the person engaged in the director is not liable for those
wrongful act. The company shareholders who hold more than 3%
has authority). of the shares to file a lawsuit against
Cayman's courts tend to not other directors.
interfere with the company's
internal behavior when the
conduct within the
company's jurisdiction, or
beyond the scope of
authority, which can be
ratified by shareholders and
in accordance with the will
of the majority shareholder.
1. The directors of the According to the Cayman As per Cayman's lawyers opinion
company shall manage Company Law, directors (see the left column), the contents of
the business with honesty have fiduciary duties on the items 1., 2. and 3. are stated in
and integrity. If there is company. If there is any Article 97B of the Articles of
any violation of the breach of such obligations, Association; However, Cayman's
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124

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Differences with the
Articles of Association and
provisions on matters of British Cayman Islands Act
Description
protection of shareholders' and Description
rights and interests
company interest, who the court shall hold the lawyers stated that although the
----- End of picture text -----

Differences with the provisions on matters of protection of shareholders' rights and interests British Cayman Islands Act and Description Articles of Association and Description	Differences with the provisions on matters of protection of shareholders' rights and interests British Cayman Islands Act and Description Articles of Association and Description	Differences with the provisions on matters of protection of shareholders' rights and interests British Cayman Islands Act and Description Articles of Association and Description
company interest, who	the court shall hold the	lawyers stated that although the
should be liable for the damage. If the act is committed by itself or by others, the shareholder reserved the rights to decide on the proceeds of the act as the company's income. 2. The director of the company acts on the execution of the company's operation, if there is any violation of the law and causes damage to others, the company shall be liable for compensation. 3. The manager and supervisor of the company shall be responsible for the same liability as the directors of the company within the scope of their duties.	director’s liability for compensation; if it is a breach of trust obligations for him or others on self-beneficial, the court shall decide to return such benefits. According to Cayman law, the director causes damage to a third party during the company's execution of the business operation. The third party may claim damages from the company, despite the company may request the director for the same liability of compensation to the third party under the joint and several liability terms. From the perspective of Cayman law, the third party is unable to make direct claim to the director.	company's articles of association stipulate directors and companies Joint and several liability, from the Cayman legal point of view, the third party still unable to claim directly from the director.

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The Board of Directors and Shareholders All Cosmos Bio-Tech Holding Corporation

Opinion

We have audited the accompanying consolidated financial statements of All Cosmos Bio-Tech which comprise the consolidated balance sheets as of December 31, 2020 and 2019 and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant

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 International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

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The key audit matters identified December 31, 2020 are stated as follows:

Occurrence of Sales Revenue from Major Customers

transactions that are significant. Sales revenue and accounts receivable turnover (days) from some of these major customers increased significantly compared to the previous year. Considering the higher inherent risk in revenue recognition and the potential pressure on management to achieve financial goals, we identified the occurrence of sales revenue from major customers with the abovementioned characteristics as a key audit matter.

Refer to Notes 4 (m) and 22 to the consolidated financial statements for details on the accounting policy and relevant disclosures on revenue recognition.

The main audit procedures that we performed in respect of sales revenue from major customers with the abovementioned characteristics included the following:

sales cycle, and we designed the corresponding audit procedures to test the effectiveness of the internal control associated with the risk mentioned above.
We performed substantive tests on sales revenue, selected samples from general ledger of sales revenue and vouched the records to external supporting documents to verify the occurrence of sales.
We performed analytical procedures, compared the differences in sales revenue, credit terms, and accounts receivable turnover (days) between the current and previous years, and assessed the reasonableness of such changes.
We examined significant sales returns or allowances after the balance sheet date and performed substantive procedures to confirm the occurrence of the sales revenue.

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 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 concern 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 the audit committee, are responsible for overseeing the

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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 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:

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.
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
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of m accounting and, based on the audit evidence obtained, whether a material uncertainty exists continue as a going concern. If we conclude that a material uncertainty exists, we are required statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are events or conditions may cause the Group to cease to continue as a going concern.
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.
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.

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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 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 audits resulting in this inde Hsun Chen and Jui Hsuan Ho.

Deloitte & Touche Taipei, Taiwan Republic of China

March 26, 2021

Notice to Readers

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

consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent audi prevail.

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ALL COSMOS BIO-TECH HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019

(In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4, 7 and 29) Financial assets at amortized cost - current (Notes 4, 8 and 31) Trade receivables, net (Notes 4, 9 and 22) Trade receivables from related parties (Notes 4, 22 and 30) Other receivables (Notes 4 and 9) Other receivables from related parties (Notes 4 and 30) Current tax assets (Notes 4 and 24) Inventories (Notes 4 and 10) Prepayments (Note 17) Other current assets (Note 17) Total current assets NON-CURRENT ASSETS Financial assets at amortized cost - non-current (Notes 4, 8 and 31) Investments accounted for using the equity method (Notes 4 and 12) Property, plant and equipment (Notes 4, 13 and 31) Right-of-use assets (Notes 4, 14, 30 and 31) Goodwill (Notes 4 and 15) Other intangible assets (Notes 4 and 16) Deferred tax assets (Notes 4 and 24) Other non-current assets (Note 17) Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 18 and 31) Contract liabilities - current (Notes 4 and 22) Trade payables Trade payables to related parties (Note 30) Other payables (Note 19) Other payables to related parties (Note 30) Current tax liabilities (Notes 4 and 24) Lease liabilities - current (Notes 4 and 14) Current portion of long-term borrowings (Notes 18 and 31) Other current liabilities (Note 19) Total current liabilities NON-CURRENT LIABILITIES Long-term borrowings (Notes 18 and 31) Deferred tax liabilities (Notes 4 and 24) Lease liabilities - non-current (Notes 4, 14 and 30) Guarantee deposits received (Note 19) Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Notes 4 and 21) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL		2020		2019
		Amount % $ 761,806 29 59,766 2 29,321 1 517,434 20 30,400 1 3,838 - 14,708 1 7,750 - 274,264 11 127,565 5 175 - 1,827,027 70 106,670 4 12,717 1 441,878 17 164,173 6 371 - 1,309 - 35,079 1 25,146 1 787,343 30 $ 2,614,370 100 $ 45,944 2 87 - 63,440 3 2,348 - 78,004 3 417 - 17,374 1 2,226 - 5,355 - 6,198 - 221,393 9 - - 29,128 1 671 - - - 29,799 1 251,192 10 640,340 24 781,838 30 167,204 7 320,320 12 474,522 18 962,046 37 (397,714) (15) 1,986,510 76 376,668 14 2,363,178 90 $ 2,614,370 100		Amount % $ 837,590 32 60,509 2 189,845 7 293,835 11 35,996 2 8,149 - 22,357 1 2,446 - 296,210 11 41,781 2 - - 1,788,718 68 128,257 5 14,539 - 470,047 18 177,760 7 385 - 2,072 - 39,944 1 17,789 1 850,793 32 $ 2,639,511 100 $ 9,204 1 1,532 - 75,687 3 - - 58,115 2 1 - 7,977 - 2,163 - 17,810 1 2,949 - 175,438 7 3,359 - 32,487 1 1,932 - 380 - 38,158 1 213,596 8 640,340 24 781,838 30 163,635 6 312,099 12 468,142 18 943,876 36 (320,320) (12) 2,045,734 78 380,181 14 2,425,915 92 $ 2,639,511 100

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

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ALL COSMOS BIO-TECH HOLDING CORPORATION 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)

OPERATING REVENUE (Notes 4, 22 and 30) Sales OPERATING COSTS (Notes 10, 23 and 30) Cost of goods sold GROSS PROFIT OPERATING EXPENSES (Notes 23 and 30) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit loss Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES (Notes 4, 23 and 30) Interest income Other income Other gains and losses Finance costs Share of loss of associates (Note 12) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 24) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE (LOSS) INCOME (Notes 4, 21 and 24) Items that will not be reclassified subsequently to profit or loss: Exchange differences on translation to the presentation currency		2020 Amount % $ 1,642,783 100 (1,270,636) (77) 372,147 23 (121,509) (8) (153,014) (9) (2,541) - 7,628 - (269,436) (17) 102,711 6 18,800 1 12,021 1 21,875 1 (4,440) - (1,296) - 46,960 3 149,671 9 (51,503) (3) 98,168 6 (89,204) (6)		2019
				Amount % $ 1,767,699 100 (1,374,387) (78) 393,312 22 (110,340) (6) (157,924) (9) (4,655) - (47,162) (3) (320,081) (18) 73,231 4 17,368 1 16,675 1 6,147 - (9,448) - (155) - 30,587 2 103,818 6 (65,140) (4) 38,678 2 (11,780) - (Continued)

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ALL COSMOS BIO-TECH HOLDING CORPORATION 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)

Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of the financial statements of foreign operations Income tax relating to items that may be reclassified subsequently to profit or loss Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owners of the Company Non-controlling interests TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Company Non-controlling interests EARNINGS PER SHARE (Note 25) From continuing operations Basic Diluted		2020 Amount % $ (2,531) - 528 - (91,207) (6) $ 6,961 - $ 82,204 5 15,964 1 $ 98,168 6 $ 4,810 - 2,151 - $ 6,961 - $ 1.28 $ 1.28		2019
				Amount % $ 2,029 - (414) - (10,165) - $ 28,513 2 $ 35,694 2 2,984 - $ 38,678 2 $ 27,473 2 1,040 - $ 28,513 2 $ 0.56 $ 0.56

		$		$
		$		$
		$		$
		$		$
		$		$

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

(Concluded)

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ALL COSMOS BIO-TECH HOLDING CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expense Amortization expense Expected credit loss (reversed) recognized on trade receivables Net gain on fair value change of financial assets at fair value through profit or loss Finance costs Interest income Share of loss of associates Gain on disposal of property, plant and equipment Write-downs of inventories Net unrealized loss on foreign currency exchange Impairment loss recognized on goodwill Changes in operating assets and liabilities Financial assets mandatorily classified as at fair value through profit or loss Trade receivables Trade receivables from related parties Other receivables Other receivables from related parties Inventories Prepayments Contract liabilities Trade payables Trade payables to related parties Other payables Other current liabilities Cash (used in) generated from operations Interest received Interest paid Income tax paid Net cash (used in) generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Purchase of financial assets at fair value through profit or loss Proceeds from sale of financial assets at fair value through profit or loss Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits	2020 $ 149,671 49,244 911 (7,628) (2,643) 4,440 (18,800) 1,296 (151) 908 1,530 - 117 (228,105) 6,429 3,226 7,263 10,140 (86,913) (1,380) (9,472) 2,457 22,232 (965) (96,193) 19,190 (4,355) (45,520) (126,878) - 169,488 - - (30,049) 274 (3,002)	2019 $ 103,818 52,265 980 47,162 (1,587) 9,448 (17,368) 155 (385) 6,699 4,435 5,329 - 452,005 (18,252) 13,809 (7,719) 311,303 19,596 (8,404) 27,582 - (51,203) (1,085) 948,583 15,792 (9,448) (71,369) 883,558 (195,669) - (37,321) 9,405 (39,064) 1,553 - (Continued)

134

ALL COSMOS BIO-TECH HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Decrease in refundable deposits Increase in other receivables from related parties Decrease in other receivables from related parties Payments for intangible assets Increase in prepayment for equipment Increase in prepayments Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short-term borrowings Repayments of short-term borrowings Repayments of long-term borrowings Proceeds from guarantee deposits received Increase in other payables to related parties Decrease in other payables to related parties Repayment of the principal portion of lease liabilities Dividends paid to owners of the Company Changes in non-controlling interests Dividends paid to non-controlling interests Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2020 $ - - 36 (228) (4,911) - 131,608 45,598 (8,865) (14,939) 3,927 412 - (2,531) (64,034) 5,750 (11,414) (46,096) (34,418) (75,784) 837,590 $ 761,806	2019 $ 1,531 (14,947) - (142) - (9,665) (284,319) 9,261 (148,134) (24,152) 363 - (5) (43,018) (153,682) 15,018 - (344,349) (8,805) 246,085 591,505 $ 837,590

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

(Concluded)

135

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

ALL COSMOS BIO-TECH HOLDING CORPORATION AND SUBSIDIARIES

1. GENERAL INFORMATION

All Cosmos Biohe Cayman Islands on March 26, 2010. The Company and its subsidiaries (collectively referred to as the June 1, 2010, the Company issued new shares for 100% equity interest in All Cosmos Industries Sdn. Bhd. and sales of Bio-organic and Bio-chemical fertilizers.

iwan Stock Exchange since June 2017.

The functional currency of the Company is Malaysian Ringgit. For greater comparability and consistency of financial reporting, the consolidated financial statements of the Group are presented in New Taiwan dollars sinc

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (FSC)

Except for the following, the initial application of the IFRSs endorsed and issued into effect by the FSC

-19 -

The Group elected to apply the practical expedient provided in the amendment to IFRS 16 with respect to rent concessions negotiated with the lessor as a direct consequence of the COVID-19. The related accounting policies are stated in Note 4. Prior to the application of the amendment, the Group shall determine whether or not the abovementioned rent concessions need to be accounted for as lease modifications.

The Group applied the amendment from January 1, 2020. Because the abovementioned rent concessions affect only in 2020, retrospective application of the amendment has no impact on the retained earnings as of January 1, 2020.

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b. The IFRSs endorsed by the FSC for application starting from 2021

New IFRSs Amendments to IFRS 4 Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 ate Benchmark Reform - Phase 2	Effective Date Announced by IASB
	Effective immediately upon promulgation by the IASB January 1, 2021

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards disclose the relevant impact when the assessment is completed.

c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

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Effective Date
New IFRSs Announced by IASB (Note 1)
-
January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
bution of Assets To be determined by IASB
January 1, 2023
Amendments to IFRS 17 January 1, 2023
January 1, 2023
Non-
January 1, 2023 (Note 6)
January 1, 2023 (Note 7)
- Proceeds January 1, 2022 (Note 4)
- Cost of Fulfilling a January 1, 2022 (Note 5)
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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 fair value measurements on or after the annual reporting periods beginning on or after -
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.

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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 assessing the possible impact that the application of other standards and interpretations impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers of Republic of China, and IFRSs as endorsed and issued into effect by the FSC.

b. 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.
c. 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.

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

d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those of the Group.

All intra-group 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 to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Refer to Note 11 and Table 6 for detailed information on subsidiaries (including percentages of ownership and main businesses).

e. Foreign currencies

In preparing the financial statements of each individual entity, transactions in currencies other than the 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 item denominated in a foreign currency and measured at historical cost is stated at the reporting currency as originally translated from the foreign currency.

For the purpose of presenting consolidated financial statements, the functional currencies of the Company and its foreign operations (including subsidiaries in other countries that use currencies which are different from the currency of the Company) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income attributed to the owners of the Company and non-controlling interests as appropriate.

f. Inventories

Inventories consist of raw materials, merchandise, finished goods and work in progress 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 the standard cost and adjusted thereafter to weighted-average cost on the balance sheet date.

g. Investments in associates

An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor an interest in a joint venture. The Group uses the equity method to account for its investments in associates.

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Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Gr associate.

includes any carrying amount of the investment accounted for using the equity method and long-term discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

When the Group transacts with its associate, profits and losses resulting from the transactions with the terests in the associate that are not related to the Group.

h. Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured 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. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.

The depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects 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 is recognized in profit or loss.

i. Goodwill

Goodwill arising from the acquisition of a business is measured at cost as established at the date of acquisition of the business less accumulated impairment loss.

For -generating - units or groups of cashbenefit from the synergies of the combination.

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A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently whenever there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then pro rata to the other assets of the unit based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. Any impairment loss recognized on goodwill is not reversed in subsequent periods.

j. Intangible assets
1) Intangible assets acquired separately

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 loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

2) Derecognition of intangible assets

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.

k. Impairment of property, plant and equipment, right-of-use asset and intangible assets other than goodwill

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, excluding goodwill, 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.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the assets may be impaired.

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, cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset, cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

l. Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instruments.

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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 fair value through profit or loss) 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 fair value through profit or loss (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.

i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such a financial asset is mandatorily classified as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, and any dividends earned on such financial assets are recognized in other income; any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is

ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
ii) 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, trade receivables at amortized cost and refundable deposits, 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:

i) 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

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ii) 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.

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 (ECLs) on financial assets at amortized cost (including trade receivables).

The Group always recognizes lifetime ECLs for trade receivables. 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 considers the following situations as indication that a financial asset is in default (without taking into account any collateral held by the Group):

i. Internal or external information show that the debtor is unlikely to pay its creditors.
ii. Financial asset is more than 270 days 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, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and the carrying amounts of such financial assets are not reduced.

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 eceived and receivable is recognized in profit or loss.

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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 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 unless the derivative is designated and effective as a hedging instrument, in which event, the timing of the recognition in profit or loss depends on the nature of the hedging relationship. 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.

m. 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

Revenue from the sale of goods comes from sales of Bio-organic and Bio-chemical fertilizers. Sales of fertilizers are recognized as revenue when the goods are delivered and shipped specific location because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized currently. The transaction price received is recognized as a contract liability until the good have been delivered to the customer.

n. 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.

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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 for by applying 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 borrowing rate will be used.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. Lease liabilities are presented on a separate line in the consolidated balance sheets.

The Group negotiates with the lessor for rent concessions as a direct consequence of the Covid-19 to change the lease payments originally due by June 30, 2021, that results in the revised consideration for the lease substantially less than the consideration for the lease immediately preceding the change. There is no substantive change to other terms and conditions. The Group elects to apply the practical expedient to all of these rent concessions and, therefore, does not assess whether the rent concessions are lease modifications. Instead, the Group recognizes the reduction in lease payment in profit or loss, in the period in which the events or conditions that trigger the concession occur, and makes a corresponding adjustment to the lease liability.

o. Borrowing costs

Borrowing costs directly attributable to an 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.

p. Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they are received.

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q. 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 the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

r. Taxation

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.

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 and unused loss carryforwards to the extent that it is probable that taxable profits will 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 and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that 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.

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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

ent 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

uncertain.

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalent Time deposits (with original maturities of 3 months or less)		December 31	December 31
		2020 $ 475 595,206 166,125 $ 761,806	2019 $ 440 716,581 120,569 $ 837,590

The market rate intervals of cash in bank at the end of the year were as follows:

Time deposits (with original maturities of 3 months or less)	December 31 2020 2019 1.70%-3.20% 2.95%-3.50%

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7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

Financial assets at fair value through profit or loss (FVTPL)- current Financial assets mandatorily classified as at FVTPL Derivative financial assets (not under hedge accounting) Foreign exchange forward contracts Non-derivative financial assets Mutual funds		December	31
		2020 $ - 59,766 $ 59,766	2019 $ 43 60,466 $ 60,509

At the end of the year, outstanding foreign exchange forward contracts not under hedge accounting were as follows:

					Notional Amount
			Currency	Maturity Date	(In Thousands)
December	31,	2019
Buy			USD/MYR	January 17, 2020	USD30/MYR124
			USD/MYR	January 24, 2020	USD50/MYR207
			USD/MYR	February 14, 2020	USD30/MYR124
			USD/MYR	February 21, 2020	USD30/MYR124
			USD/MYR	March 13, 2020	USD30/MYR124

The Group entered into foreign exchange forward contracts to manage exposures to exchange rate fluctuations of foreign currency denominated assets and liabilities.

8. FINANCIAL ASSETS AT AMORTIZED COST

Current Time deposits with original maturities of more than 3 months Restricted Bank Deposits (a) Non-current Restricted Bank Deposits (a) Market rate intervals Time deposits with original maturities of more than 3 months Restricted Bank Deposits		December 31
	2020 2019 $ 29,321 $ 180,641 - 9,204 $ 29,321 $ 189,845 $ 106,670 $ 128,257 2.00%-2.35% 3.00%-4.10% 1.60%-3.00% 2.80%-3.25%

a. Refer to Note 31 for information relating to the restricted assets are time deposits pledged as collateral for loans by the Group.

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b. The Group continuously tracks external credit rating information and monitors changes in credit risk of debt investments, and at the same time the Group reviews significant information on debtors, to assess whether credit risk on these debt investments have increased significantly since initial recognition. After the assessment, the Group estimates that there are no expected credit losses on the financial assets at amortized cost.

9. TRADE RECEIVABLES AND OTHER RECEIVABLES

Trade receivables At amortized cost Gross carrying amount Less: Allowance for impairment loss Other receivables GST refund receivables Interest receivable Others		December 31	December 31
		2020 $ 598,564 (81,130) $ 517,434 $ 174 1,837 1,827 $ 3,838	2019 $ 384,077 (90,242) $ 293,835 $ 4,022 2,725 1,402 $ 8,149

a. Trade receivables

The average credit period of sales of goods was 60 to 90 days. No interest was charged on trade receivables. The Group adopted a policy of only dealing with entities that are rated the equivalent of investment grade or higher and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group uses other publicly available financial information or its own trading records to rate its major customers.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix approach considering the past default experience of the customer a

customer segments, the provision for loss allowance based on past due status is not further dis

The Group writes off a trade receivable when there is evidence 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.

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The following table details the loss allowance of trade recei matrix.

December 31, 2020

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost December 31, 2019 Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	Not Past Due Less than 90 Days 0.07%- 4.10% 0.66%- 10.60% $ 413,549 $ 104,154 (14,591) (10,516) $ 398,958 $ 93,638 Not Past Due Less than 90 Days 0.58%- 1.57% 1.92%- 5.81% $ 171,219 $ 60,331 (1,670) (1,854) $ 169,549 $ 58,477	91 to 180 Days 23.89% $ 31,088 (7,427) $ 23,661 91 to 180 Days 5.29%- 20.87% $ 44,143 (2,266) $ 41,877	181 to 270 Days 16.67%- 41.38% $ 1,939 (762) $ 1,177 181 to 270 Days 14.06%- 40.42% $ 27,132 (3,200) $ 23,932	Over 270 Days 100.00% $ 47,834 (47,834) $ - Over 270 Days 100.00% $ 81,252 (81,252) $ -	Total $ 598,564 (81,130) $ 517,434 Total $ 384,077 (90,242) $ 293,835

The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance Less: Net remeasurement of loss allowance Less: Amounts written off Foreign exchange losses Balance at December 31	For the Year Ended December 31 2020 2019 $ 90,242 $ 47,088 - 44,998 (5,485) - (383) (970) (3,244) (874) $ 81,130 $ 90,242	For the Year Ended December 31 2020 2019 $ 90,242 $ 47,088 - 44,998 (5,485) - (383) (970) (3,244) (874) $ 81,130 $ 90,242	For the Year Ended December 31 2020 2019 $ 90,242 $ 47,088 - 44,998 (5,485) - (383) (970) (3,244) (874) $ 81,130 $ 90,242
		2020 $ 90,242 - (5,485) (383) (3,244) $ 81,130	2019 $ 47,088 44,998 - (970) (874) $ 90,242

b. Other receivables

Other receivables primarily included interest receivables, GST refund receivables and others. The Group continuously monitors past default experience of the counterparties and analyzes their current financial position. Based on the information above, the Group then assesses the expected credit loss and considers whether credit risk has been significantly increased since the last period to the reporting date. As of December 31, 2020 and 2019, the Group estimated the expected credit loss rate of other receivables to be 0%.

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10. INVENTORIES

Merchandise Finished goods Work in progress Raw materials		December 31	December 31
		2020 $ 14,433 24,696 19,566 215,569 $ 274,264	2019 $ 7,841 30,596 17,190 240,583 $ 296,210

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2020 and 2019 were $1,270,636 thousand and $1,374,387 thousand, respectively. The cost of goods sold for the years ended December 31, 2020 and 2019 included inventory write-downs of $908 thousand and $6,699 thousand, respectively.

11. SUBSIDIARIES

a. Subsidiaries included in the consolidated financial statements

Investor
Investee
Nature of Activities
The Company
All Cosmos Industries Sdn. Bhd.
(ACI)
Manufacturing and sales of Bio-organic
and Bio-chemical compound fertilizers
Sabah Softwoods Hybrid
Fertiliser Sdn. Bhd.
Manufacturing and sales of Bio-organic
and Bio-chemical compound fertilizers
PT All Cosmos Indonesia
Sales of Bio-organic and Bio-chemical
compound fertilizers
PT All Cosmos Biotek
Manufacturing and sales of Bio-organic
and Bio-chemical compound fertilizers
GK Bio International Sdn. Bhd.
Wholesale of probiotics
ACI
PT All Cosmos Indonesia
Sales of Bio-organic and Bio-chemical
compound fertilizers
Arif Efektif Sdn. Bhd.
Research and development of effective
microorganisms for Bio-organic and
Bio-chemical compound fertilizers
Kinabalu Life Sciences Sdn. Bhd.
Research and development of effective
microorganisms for waste disposal of
oil-palm
Cosmos Biowood Sdn. Bhd.
Forest plantation and research

Proportion of
Ownership (%)
December 31
2020
2019
Remark
100
100
55
55
99
99
83
83
Note 2
60
60
Note 3
1
1
49
49
Note 1
60
60
Note 4
80
80

Note 1: The Group and its substantive related party separately hold 49% and 26% interest in Arif Efektif Sdn. Bhd. Their combined holding exceed 50% of the total shares outstanding. Hence, the Group has substantive control over Arif Efektif Sdn. Bhd. and has included it as part of the Group.
Note 2: On August 23, 2019, the Company invested IDR19,880,000 thousand by subscribing additional new shares of PT All Cosmos Biotek at a percentage different from its existing ownership percentage, and its proportion of ownership increased from 60% to 83%. Refer to Note 26 for the relevant disclosures.

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Note 3: GK Bio International Sdn. Bhd. was established on October 11, 2018. On March 25, 2019, the equity interest of GK Bio International Sdn. Bhd. was transferred from All Cosmos Industries Sdn. Bhd. to the Company. At the same time, GK Bio International Sdn. Bhd. issued additional new shares for cash of MYR3,000 thousand, and the Group and the minority shareholders invested NT$13,594 thousand and NT$9,063 thousand at a percentage different from its existing ownership percentage, respectively. The equity interest of GK Bio International Sdn. Bhd. held by the Group decreased from 100% to 60%. Refer to Note 26 for the relevant disclosures.
Note 4: On September 25, 2019, Kinabalu Life Sciences Sdn. Bhd. issued new shares for cash of MYR2,000 thousand, and the Group and the minority shareholders invested NT$8,933 thousand and NT$5,955 thousand, respectively, in proportion to their original shareholdings. On February 25, 2020, Kinabalu Life Sciences Sdn. Bhd. issued additional new shares for cash of MYR2,000 thousand, and the Group and minority shareholders invested by NT$8,626 thousand and NT$5,750 thousand, respectively, in proportion to their original shareholdings.
b. Details of subsidiaries that have material non-controlling interests

Name of Subsidiary Sabah Softwoods Hybrid Fertiliser Sdn. Bhd.	Proportion of Ownership and Voting Rights Held by Non-controlling Interests
	December 31
	2020 2019 45% 45%

Refer to Table 6 for the information on the principal places of business and the countries of incorporation.

Profit Allocated to Non-controlling Interests For the Year Ended December 31 2020 2019 $ 482 $ 4,917	Accumulated Non-controlling Interests	Accumulated Non-controlling Interests

	December 31
2020 $ 482	2020 $ 322,657	2019 $ 345,911

Summarized financial information of the subsidiary that has material non-controlling interests is set out below. The summarized financial information below represents amounts before intragroup eliminations.

Sabah Softwoods Hybrid Fertiliser Sdn. Bhd.

Current assets Non-current assets Current liabilities Non-current liabilities Equity		December 31	December 31
		2020 $ 530,840 263,445 (62,067) (15,203) $ 717,015	2019 $ 538,644 292,590 (39,461) (23,082) $ 768,691 (Continued)

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Equity attributable to: The Company Non-controlling interests of Sabah Softwoods Hybrid Fertiliser Sdn. Bhd. Revenue Profit for the year Other comprehensive income for the year Total comprehensive income for the year Profit attributable to: The Company Non-controlling interests of Sabah Softwoods Hybrid Fertiliser Sdn. Bhd. Total comprehensive income attributable to: The Company Non-controlling interests of Sabah Softwoods Hybrid Fertiliser Sdn. Bhd. Cash (outflow) inflow from: Operating activities Investing activities Financing activities Effects of foreign currency exchange Net cash (outflow) inflow		December 31	December 31
	2020 $ 394,358 322,657 $ 717,015 For the Year Ended		2019 $ 422,780 345,911 $ 768,691 (Concluded) December 31
		2020 $ 310,606 $ 1,072 - $ 1,072 $ 590 482 $ 1,072 $ 590 482 $ 1,072 $ (20,827) (8,781) 4,233 (14,225) $ (39,600)	2019 $ 560,767 $ 10,926 - $ 10,926 $ 6,009 4,917 $ 10,926 $ 6,009 4,917 $ 10,926 $ 218,441 (23,036) (49,699) (3,245) $ 142,461

12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in Associates

Associate that is not individually material Sawit Ecoshield Sdn. Bhd.		December	31
		2020 $ 12,717	2019 $ 14,539

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Total comprehensive loss for the year the countries of incorporation of the associate.	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ (1,296)	2019 $ (155)

Investments were accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments were calculated based on financial statements which have not been audited. Management believes there is no material impact on the equity method accounting or the calculation of the share of profit or loss from the financial statements of Sawit Ecoshield Sdn. Bhd. which has not been audited.

13. PROPERTY, PLANT AND EQUIPMENT

Assets Used by the Group

Cost Balance at January 1, 2020 Additions Disposals Reclassified (Note) Effects of foreign currency exchange differences Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expense Disposals Reclassified (Note) Effects of foreign currency exchange differences Balance at December 31, 2020 Carrying amount at December 31, 2020 Cost Balance at January 1, 2019 Additions Disposals Reclassified (Note) Effects of foreign currency exchange differences Balance at December 31, 2019 Accumulated depreciation and impairment Balance at January 1, 2019 Depreciation expense Disposals Reclassified (Note) Effects of foreign currency exchange differences Balance at December 31, 2019 Carrying amount at December 31, 2019	Building $ 344,374 4,518 - - (12,153) $ 336,739 $ 58,702 6,386 - - (2,025) $ 63,063 $ 273,676 $ 342,252 3,959 - - (1,837) $ 344,374 $ 52,376 6,693 - - (367) $ 58,702 $ 285,672	Machinery and Equipment $ 359,899 5,670 (794) 1,794 (12,686) $ 353,883 $ 242,815 27,761 (794) 1,256 (8,359) $ 262,679 $ 91,204 $ 351,226 7,482 (2,707) 5,878 (1,980) $ 359,899 $ 216,917 29,458 (2,039) - (1,521) $ 242,815 $ 117,084	Transpor- tation Equipment $ 14,239 1,608 (1,449) 4,424 (465) $ 18,357 $ 8,474 2,089 (1,449) 4,424 (257) $ 13,281 $ 5,076 $ 16,822 1,525 (4,304) 248 (52) $ 14,239 $ 6,247 2,333 (3,946) 3,906 (66) $ 8,474 $ 5,765	Furniture, Fixture and Equipment $ 5,060 1,149 (600) - (176) $ 5,433 $ 3,160 581 (478) - (111) $ 3,152 $ 2,281 $ 4,899 189 (230) 229 (27) $ 5,060 $ 2,787 442 (174) 125 (20) $ 3,160 $ 1,900	Leasehold Improve- ments $ 542 124 - - (18) $ 648 $ 337 53 - - (11) $ 379 $ 269 $ 545 - - - (3) $ 542 $ 317 23 - - (3) $ 337 $ 205	Other Equipment $ 67,662 1,291 (9) 135 (2,383) $ 66,696 $ 31,759 5,843 (8) - (1,076) $ 36,518 $ 30,178 $ 66,928 1,513 (187) (229) (363) $ 67,662 $ 26,337 5,866 (101) (125) (218) $ 31,759 $ 35,903	Property under Construction $ 23,518 16,506 - (135) (695) $ 39,194 $ - - - - - $ - $ 39,194 $ 1,849 23,859 - (1,865) (325) $ 23,518 $ - - - - - $ - $ 23,518	Total $ 815,294 30,866 (2,852) 6,218 (28,576) $ 820,950 $ 345,247 42,713 (2,729) 5,680 (11,839) $ 379,072 $ 441,878 $ 784,521 38,527 (7,428) 4,261 (4,587) $ 815,294 $ 304,981 44,815 (6,260) 3,906 (2,195) $ 345,247 $ 470,047

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Note: The reclassification of property, plant and equipment included reclassification from right-of-use assets.

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

Building
Main buildings	50-52 years
Others	50 years
Machinery and equipment	3-10 years
Transportation equipment	5 years
Furniture, fixture and equipment	3-10 years
Leasehold improvements	3-25 years
Other equipment	5-10 years

Property, plant and equipment used by the Group pledged as collateral for bank borrowings are set out in Note 31.

14. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amount Land Buildings Machinery and equipment Transportation equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Machinery and equipment Transportation equipment		December 31	December 31
	2020 $ 161,171 2,640 - 362 $ 164,173 For the Year Ended		2019 $ 172,826 3,700 704 530 $ 177,760 December 31
		2020 $ 1,409 $ 3,930 2,330 135 136 $ 6,531	2019 $ 2,213 $ 4,192 2,067 191 1,000 $ 7,450

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b. Lease liabilities

Carrying amount Current Non-current		December	31
		2020 $ 2,226 $ 671	2019 $ 2,163 $ 1,932

Range of discount rates for lease liabilities was as follows:

Buildings Transportation equipment	December 31
	2020 2019 1.80%-5.84% 5.54%-5.84% 4.00% 4.00%

c. Material leasing activities and terms

The Group leases land for the use of plants and offices with lease terms of 30 to 93 years. The Group does not have bargain purchase options to acquire the leasehold land at the end of the lease terms.

d. Other lease information

Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,475 $ 885 $ (6,082)	2019 $ 3,279 $ 225 $ (46,841)

-term leases and certain offices qualify as

low-value asset leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

Right-of-use assets pledged as collateral for bank borrowings is set out in Note 31.

All lease commitments (the Group as a lessee) with lease terms commencing after the balance sheet dates are as follows:

Lease commitments		December	31
		2020 $ -	2019 $ 1,522

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15. GOODWILL

Cost Balance at January 1 Effects of foreign currency exchange differences Balance at December 31 Accumulated impairment losses Balance at January 1 Impairment losses recognized Effects of foreign currency exchange differences Balance at December 31 Carrying amounts at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 5,638 (200) $ 5,438 $ 5,253 - (186) $ 5,067 $ 371	2019 $ 5,667 (29) $ 5,638 $ - 5,329 (76) $ 5,253 $ 385

The Group recognized goodwill on the acquisition of Arif Efektif Sdn. Bhd. and Cosmos Biowood Sdn. Bhd. The cost of investment is higher than the fair value of the identifiable assets and liabilities assumed on the acquisition date.

f forest plantation was delayed, the

Group assessed the recoverable amount of goodwill at $0 in 2019 and recognized impairment loss on goodwill of Cosmos Biowood Sdn. Bhd. at $5,329 thousand.

16. OTHER INTANGIBLE ASSETS

Cost Balance at January 1 Additions Disposals Effects of foreign currency exchange differences Balance at December 31 Accumulated amortization Balance at January 1 Amortization expense Disposals Effects of foreign currency exchange differences Balance at December 31 Carrying amount at December 31	Computer Software	Computer Software	Computer Software
	For the Year Ended December 31
		2020 $ 4,990 228 - (175) $ 5,043 $ 2,918 911 - (95) $ 3,734 $ 1,309	2019 $ 8,086 142 (3,240) 2 $ 4,990 $ 5,173 980 (3,240) 5 $ 2,918 $ 2,072

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Computer software is amortized over 5 years on a straight-line basis.

An analysis of amortization by function General and administrative expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 911	2019 $ 980

17. OTHER ASSETS

Current Prepayments Prepayments for purchase Office supplies Input tax Others Refundable deposits Non-current Refundable deposits Prepayment for equipment Prepayments		December 31	December 31
		2020 $ 99,083 17,635 7,765 3,082 $ 127,565 $ 175 $ 11,004 4,952 9,190 $ 25,146	2019 $ 9,807 18,523 5,726 7,725 $ 41,781 $ - $ 8,262 - 9,527 $ 17,789

18. BORROWINGS

a. Short-term borrowings

Secured borrowings (Note 31) Bank loans		December 31	December 31
		2020 $ 45,944	2019 $ 9,204

The range of interest rates on bank loans was 1.43%-1.75% and 2.95% per annum as of December 31, 2020 and 2019, respectively.

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b. Long-term borrowings

Secured borrowings (Note 31) Bank loans (1) Unsecured borrowings Others (2) Less: Current portion Long-term borrowings		December	31
		2020 $ 3,226 2,129 5,355 (5,355) $ -	2019 $ 21,169 - 21,169 (17,810) $ 3,359

1) The details of the long-term bank loans are as follows:

Effective Rate Variable rate AmIslamic Bank medium-term bank loan with a total amount of MYR5,000 thousand, from May 22, 2014 to May 1, 2021, repayable in monthly installments of principal and interest, repaid in advance on June 1, 2020 3.70% AmIslamic Bank medium-term bank loan with a total amount of MYR3,580 thousand, from March 31, 2013 to May 1, 2020, repayable in monthly installments of principal and interest, repaid in advance on March 1, 2020 4.45% AmIslamic Bank medium-term bank loan with a total amount of MYR5,000 thousand, from March 31, 2013 to March 1, 2021, repayable in monthly installments of principal and interest 3.45% AmIslamic Bank medium-term bank loan with a total amount of MYR6,500 thousand, from March 31, 2013 to March 1, 2021, repayable in monthly installments of principal and interest 4.20%		December 31	December 31
		2020 $ - - 1,383 1,843 $ 3,226	2019 $ 3,662 1,127 7,037 9,343 $ 21,169

2) Other borrowing was fixed-rates loan from individuals. Such loan is due on December 31, 2021, and the effective interest rate was 4% per annum as of December 31, 2020.

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19. OTHER LIABILITIES

Current Other payables Payable for salaries and bonuses (including compensation of employees and remuneration of directors) Payable for pension fees Payable for professional service fees Payable for utilities Payable for purchase of equipment Payable for taxes Payable for royalties Payable for marketing expenses Payable for maintenance Payable for freight Payable for welfare Others Other liabilities Deferred revenue - from government grants (Note) Guarantee deposits received Non-current Guarantee deposits received		December	31
		2020 $ 16,214 2,327 2,633 1,994 951 2,038 3,071 9,864 5,894 18,595 5,434 8,989 $ 78,004 $ 1,872 4,326 $ 6,198 $ -	2019 $ 14,840 2,045 2,027 2,141 134 1,532 906 6,271 4,101 10,894 5,633 7,591 $ 58,115 $ 2,949 - $ 2,949 $ 380

Note: The Group applied for a research and development grant sponsored by the Malaysia government. The grant spans over a two-year period and divided into two payments, $2,715 thousand and $3,556 thousand in 2014 and 2016, respectively. The associated income was recognized proportionally according to the progress of the research and development project.

20. RETIREMENT BENEFIT PLANS

The subsidiaries are required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits in accordance with local regulation. Except for the abovementioned, the Group does not have any other retirement or pension plans for employees.

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21. EQUITY

a. Share capital

Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31	December 31
		2020 600,000 $ 6,000,000 64,034 $ 640,340	2019 600,000 $ 6,000,000 64,034 $ 640,340

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and carry a right to dividends.

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note) Issuance of ordinary shares May be used to offset deficit only Exercise of employee share options Forfeited employee share options May not be used for any purpose Others		December 31	December 31
		2020 $ 775,964 2,675 2,862 337 $ 781,838	2019 $ 775,964 2,675 2,862 337 $ 781,838

Note: Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital

c. Retained earnings and dividends policy

The shareholders of the Company held their regular meeting on June 19, 2019 and in that meeting, explicitly stipulate that the proposal for profit distribution or offsetting of losses should be made at the end of each six months of the fiscal year. The board of directors is authorized to adopt a special resolution to distribute dividends and bonuses in cash and a report of such distribution should be

Under the dividends policy as set forth in the amended Articles, where the Company made a profit each six months of the fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with

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proposing a distribution plan. For distribution of dividends and bonus in shares, the distribution plan board of directors is authorized to adopt a special resolution and a report of such distribution should be

Under the dividends policy as set forth in the Articles before the amendments, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with a dividends and bonus to shareholders. For the compensation of employees and remuneration of directors paid and the amounts recognized, refer to compensation of employees and remuneration of directors in Note 23 (g).

ash. Cash

dividends should be no less than 50% of the total dividends distributed.

Appropriation of earnings to the legal reserve shall be made until the legal reserve equals the -in capital. The legal reserve may be used to offset deficits. If the Company has no -in capital, the excess may be transferred to capital or distributed in cash.

The appropriations of earnings for 2019 and 2018, which were approved in the sharehol on June 16, 2020 and June 19, 2019, respectively, were as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share (NT$)	Appropriation of Earnings	Appropriation of Earnings	Appropriation of Earnings
	For the Year Ended		December 31
		2019 $ 3,569 $ 8,221 $ 64,034 $ 1.00	2018 $ 30,506 $ 1,665 $ 153,682 $ 2.40

March 26, 2021 were as follows:

	For the Year	For the Year
		Ended
	December 31,
		2020
Legal reserve	$	8,220
Special reserve	$	77,394
Cash dividends	$	64,034
Cash dividends per share (NT$)	$	1.00

other appropriations will be resolved by the shareholders in their meeting to be held on June 28, 2021.

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d. Special reserve

Balance at January 1 Appropriation in respect of Debit to other equity items Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2020 $ 312,099 8,221 $ 320,320	2019 $ 310,434 1,665 $ 312,099

According to the Articles, special reserve should be appropriated for the amount equal to the difference between net debit balance reserve of other equity items and the balance of special reserve appropriated on the reporting date. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and is thereafter distributed.

e. Other equity items

Exchange differences on translation of the financial statements of foreign operations

Balance at January 1 Exchange differences on translation to the presentation currency Exchange differences on translation of the financial statements of foreign operations Related income tax Balance at December 31 Non-controlling interests Balance at January 1 Share in profit for the year Other comprehensive income (loss) during the year Exchange differences on translation to the presentation currency Exchange differences on translation of the financial statements of foreign operations Cash dividends Non-controlling interests from issuance of ordinary shares Changes in proportions of ownership in subsidiaries (Note 26) Balance at December 31	For the Year Ended	For the Year Ended	December 31
	2020 $ (320,320) (75,721) (2,201) 528 $ (397,714) For the Year Ended		2019 $ (312,099) (9,529) 1,722 (414) $ (320,320) December 31
		2020 $ 380,181 15,964 (13,483) (330) (11,414) 5,750 - $ 376,668	2019 $ 363,677 2,984 (2,251) 307 - 15,018 446 $ 380,181

f. Non-controlling interests

22. REVENUE

Revenue from the sale of goods	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,642,783	2019 $ 1,767,699

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a. Contract information

Revenue from the sale of goods

-organic and bio-chemical compound fertilizers.

All goods are sold at agreed-upon prices.

b. Contract balances

	December 31,	December 31,	December 31,	December 31,
		2020		2019	January 1, 2019
Trade receivables (including related parties)
(Notes 9 and 30)	$	547,834	$	329,831	$	808,203
Contract liabilities - current	$	87	$	1,532	$	9,867

Revenue recognized in the current year that was included in the contract liability balance at the beginning of the year and from the performance obligations satisfied in the previous periods was summarized as follows:

From contract liabilities at the start of the year	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,532	2019 $ 9,867

c. Disaggregation of revenue

Refer to Note 36 for details of disaggregation of revenue.

23. NET PROFIT

a. Interest income

Bank deposits Financial assets at amortized cost Loans to related party (Note 30)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 13,388 4,914 498 $ 18,800	2019 $ 12,630 4,738 - $ 17,368

b. Other income

Rental income Others (Note 30)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 31 11,990 $ 12,021	2019 $ 33 16,642 $ 16,675

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c. Other gains and losses

Gain on disposal of property, plant and equipment Net foreign exchange gains (h) Fair values changes of financial assets Financial assets mandatorily classified as at FVTPL Impairment loss recognized on goodwill Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 151 19,084 2,643 - (3) $ 21,875	2019 $ 385 9,533 1,587 (5,329) (29) $ 6,147

d. Finance costs

Interest on bank loans Interest on lease liabilities (Note 30) Other interest expenses Depreciation and amortization An analysis of depreciation by function Operating costs Operating expenses An analysis of amortization by function Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2020 2019 $ 4,165 $ 9,129 191 319 84 - $ 4,440 $ 9,448 For the Year Ended December 31
		2020 $ 33,772 15,472 $ 49,244 $ 911	2019 $ 36,210 16,055 $ 52,265 $ 980

e. Depreciation and amortization

f. Employee benefits expense

Post-employment benefits Defined contribution plan Other employee benefits (Note) Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	For the Year Ended	For the Year Ended	December 31
		2020 $ 8,707 132,497 $ 141,204 $ 47,840 93,364 $ 141,204	2019 $ 8,844 142,909 $ 151,753 $ 50,765 100,988 $ 151,753

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Note: The Group received grants of $2,978 thousand related to COVID-19 epidemic in 2020, which was included in the reduction of other employee benefits in each reporting period.

g. Compensation of employees and remuneration of directors

According to the Articles, the Company accrues compensation of employees at rates of no less than 1% and no higher than 10% and remuneration of directors at rates of no higher than 10%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. The compensation of employees and the remuneration of directors for the years ended December 31, 2020 arch 26, 2021 and March 24, 2020, respectively, are as follows:

Accrual rate Compensation of employees Remuneration of directors	For the Year Ended December 31 2020 2019 3% 3% 2% 2%

Amount

Compensation of employees Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2020 Cash Shares $ 2,696 $ - 1,797 -	2019
		Cash Shares $ 1,128 $ - 752 -

If there is a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There is no difference between the actual amounts of compensation of employees and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2019 and 2018.

Information on the compensation of employees and remuneration of directors resolved by the website of the Taiwan Stock Exchange.

h. Gains and losses on foreign currency exchange

Foreign exchange gains Foreign exchange losses	For the Year Ended December 31 2020 2019 $ 49,239 $ 20,307 (30,155) (10,774) $ 19,084 $ 9,533	For the Year Ended December 31 2020 2019 $ 49,239 $ 20,307 (30,155) (10,774) $ 19,084 $ 9,533	For the Year Ended December 31 2020 2019 $ 49,239 $ 20,307 (30,155) (10,774) $ 19,084 $ 9,533
		2020 $ 49,239 (30,155) $ 19,084	2019 $ 20,307 (10,774) $ 9,533

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24. INCOME TAXES

a. Income tax recognized in profit or loss

Major components of income tax expense are as follow:

Current tax In respect of the current year Adjustments for prior year Deferred tax In respect of the current year Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 47,171 2,572 49,743 1,760 $ 51,503	2019 $ 71,222 (546) 70,676 (5,536) $ 65,140

A reconciliation of accounting profit and income tax expenses is as follows:

Profit before tax Income tax expense calculated at the statutory rate (24%) Nondeductible expenses in determining taxable income Tax-exempt income Unrecognized loss carryforwards Unrecognized deductible temporary differences Effects of different tax rate of entities in the Group operating in other jurisdictions Income tax expense recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2020 $ 149,671 $ 35,921 8,565 (678) 746 (140) 2,572 4,517 $ 51,503	2019 $ 103,818 $ 24,916 10,652 - 1,623 (265) (546) 28,760 $ 65,140

The applicable income tax rate used by the Group in Malaysia was both 24% in 2020 and 2019. Tax rates used by other entities operating in other jurisdictions are based on the tax laws in each jurisdiction.

b. Income tax recognized in other comprehensive income

Deferred tax In respect of the current year Exchange differences on translation of the financial statements of foreign operations	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ (528)	2019 $ 414

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c. Current tax assets and liabilities

Current tax assets Tax refund receivables Current tax liabilities Income tax payables		December	31
		2020 $ 7,750 $ 17,374	2019 $ 2,446 $ 7,977

d. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities are as follows:

For the year ended December 31, 2020

Deferred tax assets Temporary differences Exchange differences on translation of the financial statements of foreign operations Allowance for impaired receivables Allowance for impaired inventory Others Investments tax credits Deferred tax liabilities Temporary differences Depreciation of property, plant and equipment Unrealized exchange gains	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income Exchange Differences $ 177 $ - $ 528 $ (2) 24,192 (3,862) - (889) 3,109 (98) - (111) - 10 - - 12,466 - - (441) $ 39,944 $ (3,950) $ 528 $ (1,443) $ 32,451 $ (2,602) $ - $ (1,171) 36 412 - 2 $ 32,487 $ (2,190) $ - $ (1,169)	Closing Balance $ 703 19,441 2,900 10 12,025
		$ 35,079
		$ 28,678 450
		$ 29,128

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For the year ended December 31, 2019

Deferred tax assets Temporary differences Exchange differences on translation of the financial statements of foreign operations Unrealized exchange losses Allowance for impaired receivables Allowance for impaired inventory Investments tax credits Deferred tax liabilities Temporary differences Depreciation of property, plant and equipment Unrealized exchange gains	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income Exchange Differences $ 587 $ - $ (414) $ 4 107 (107) - - 13,489 10,930 - (227) 1,851 1,286 - (28) 12,530 - - (64) $ 28,564 $ 12,109 $ (414) $ (315) $ 25,742 $ 6,941 $ - $ (232) 401 (368) - 3 $ 26,143 $ 6,573 $ - $ (229)	Closing Balance $ 177 - 24,192 3,109 12,466
		$ 39,944
		$ 32,451 36
		$ 32,487

e. Deductible temporary differences and unused loss carryforwards for which no deferred tax assets have been recognized in the consolidated balance sheets

Deductible temporary differences Allowance for impaired inventory Loss carryforwards		December	31
		2020 $ 8,990 $ 8,329	2019 $ 7,943 $ 11,908

f. Income tax assessments

As of December 31, 2020, except for Sabah Softwoods Hybrid Fertiliser Sdn. Bhd., which filed for correction for its tax credit in 2016 but did not obtain approval, the Group did not have any claim or litigation regarding tax assessment.

25. EARNINGS PER SHARE

Basic earnings per share Diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1.28 $ 1.28	2019 $ 0.56 $ 0.56

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The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share calculation were as follows:

Net Profit for the Year

Profit for the year attributable to owners of the Company	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 82,204	2019 $ 35,694

Weighted Average Number of Ordinary Shares Outstanding (In Thousand Shares)

Weighted average number of ordinary shares used in the computation of basic earnings per share Effects of potentially dilutive ordinary shares Compensation of employees Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 64,034 82 64,116	2019 64,034 67 64,101

The Group may settle compensation of employees in cash or shares; therefore the Group assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

26. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

On March 25, 2019, the Group subscribed new shares issued by GK Bio International Sdn. Bhd. at a percentage different from its existing ownership percentage, which reduced its continuing interest from 100% to 60%. In addition, on August 23, 2019, the Company subscribed new shares issued by PT All Cosmos Biotek at a percentage different from its existing ownership percentage, which increased its continuing interest from 60% to 83%.

The above transactions were accounted for as equity transactions, since the Group did not cease to have control over these subsidiaries.

	GK Bio
	International	PT All Cosmos
	Sdn. Bhd.		Biotek
Cash consideration paid	$ (13,594)	$	(42,844)
The proportionate share of the carrying amount of the net assets of
the subsidiary	13,642		42,350
Differences recognized from equity transactions	$ 48	$	(494)
			(Continued)

170

	GK	Bio
	International		PT All Cosmos
	Sdn.	Bhd.		Biotek
Line items adjusted for equity transactions
Capital surplus - changes in percentage of ownership interests in
subsidiaries	$	48	$	(48)
Retained earnings		-		(446)
	$	48	$	(494)
			(Concluded)

27. CASH FLOWS INFORMATION

a. Non-cash transaction

For the years ended December 31, 2020 and 2019, the Group entered into the following non-cash investing and financing activities which were not reflected in the consolidated statements of cash flows:

As of December 31, 2020 and 2019, the payable for purchasing equipment (recognized as other payables) were $951 thousand and $134 thousand, respectively.

b. Changes in liabilities from financing activities

For the year ended December 31, 2020

Short-term borrowings Long-term borrowings Guarantee deposits received Lease liabilities Other payables to related parties	Opening Balance $ 9,204 21,169 380 4,095 1 $ 34,849	Cash Flows $ 36,733 (14,939 ) 3,927 (2,531 ) 412 $ 23,602		No	n-cash Changes Interest Expenses Exchange Differences $ - $ 7 - (875 ) - 19 191 (76 ) - 4 $ 191 $ (921 )	Others $ - - - (191 ) - $ (191 )	Closing Balance $ 45,944 5,355 4,326 2,897 417
				New Leases $ - - - 1,409 - $ 1,409
							$ 58,939

For the year ended December 31, 2019

Short-term borrowings Long-term borrowings Guarantee deposits received Lease liabilities Other payables to related parties	Opening Balance $ 146,785 45,212 22 43,458 7 $ 235,484	Cash Flows $ (138,873 ) (24,152 ) 363 (43,018 ) (5) $ (205,685 )		No	n-cashChanges Interest Expenses Exchange Differences $ - $ 1,292 - 109 - (5 ) 319 1,442 - - $ 319 $ 2,838	Others $ - - - (319 ) (1) $ (320 )	Closing Balance $ 9,204 21,169 380 4,095 1
				New Leases $ - - - 2,213 - $ 2,213
							$ 34,849

28. CAPITAL 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 stakeholders through the optimization of the debt and equity emains unchanged.

The management of the Group periodically reviews its capital structure. As part of the review, the management considers the cost of capital, and the risks associated with each borrowings and the financial ratio required to determine the reasonable scale of capital structure of the Group. The Group balances its overall capital structure by distributing dividend, issuing new shares and obtaining loans.

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29. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments not measured at fair value

that are not measured at fair value approximates the fair value.

b. Fair value of financial instruments measured at fair value on a recurring basis
1) Fair value hierarchy

December 31, 2020 Financial assets at FVTPL Mutual funds December 31, 2019 Financial assets at FVTPL Derivative financial assets Mutual funds	Level 1 $ 59,766 Level 1 $ - 60,466 $ 60,466	Level 2 $ - Level 2 $ 43 - $ 43	Level 3 $ - Level 3 $ - - $ -	Total $ 59,76
				Total $ 4 60,46
				$ 60,50

There were no transfers between Levels 1 and 2 for the years ended December 31, 2020 and 2019.

2) Valuation techniques and inputs applied for the purpose of measuring Level 2 fair value measurement

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Financial Instruments Valuation Techniques and Inputs
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Financial Instruments	Valuation Techniques and Inputs
Derivatives -foreign exchange	Fair values of foreign exchange derivative contracts are
forward contracts	measured on the basis of quotations provided by financial
	institutions.

c. Categories of financial instruments

Financial assets FVTPL Mandatorily classified as at FVTPL Financial assets at amortized cost (1) Financial liabilities Amortized cost (2)	December 31 2020 2019 $ 59,766 $ 60,509 1,475,182 1,520,269 173,678 141,977

1) The balances include financial assets at amortized cost, which comprise cash and cash equivalents, trade receivables, trade receivables from related parties, other receivables (excluding GST refund receivable), other receivables from related parties, financial assets at amortized cost and refundable deposits.

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2) The balances include financial liabilities at amortized cost, which comprise short-term borrowings, trade payables, trade payables from related parties, other payables (excluding payable for salaries and bonuses, payable for pension fees, payable for taxes, payable for welfare and insurance), other payables to related parties, current portion of long-term borrowings, long-term borrowings, and guarantee deposits received.

d. Financial risk management objectives and policies

trade receivables, trade payables, lease liabilities and access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Group seeks to minimize the effects of these risks by using derivative financial instruments to the board of directors, which provided written principles on foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Group did not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

1) Market risk

changes in foreign currency risk, interest risk and other price risk. The Group entered into forward foreign exchange contracts to hedge the foreign currency risk arising from the importations denominated in United States dollar.

a) Foreign currency risk

foreign exchange is within standard, utilizing derivative - foreign currency forward contract - to manage risks.

monetary liabilities (including those eliminated on consolidation) and of the derivatives exposed to foreign currency risk at the end of the year are set out in Note 34.

Sensitivity analysis

The Group is mainly exposed to the fluctuations of United States dollars (USD).

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functional currency against the relevant foreign currencies.

The sensitivity rate used when reporting foreign currency risk internally to key management exchange rates is 5%. The sensitivity analysis included only outstanding foreign currency denominated monetary items (e.g. trade receivables, trade payables and borrowing from external entities), and adjusts their translation at the end of the year for a 5% change in foreign currency rates. A positive number below indicates an increase in pre-tax profit and other equity associated with functional currency strengthened by 5% against the relevant foreign currency. For a 5% weakening of functional currency against the relevant foreign currency, there would be an equal and opposite impact on pre-tax profit and other equity, and the balances below would be negative.

Profit or loss	USD Impact For the Year Ended December 31 2020 2019 $ 6,452 * $ 3,925 *

The result was mainly attributable to the exposure on bank deposits, trade receivables and trade payables in USD that were not hedged at the end of the year.

increases of the foreign financial assets.

b) Interest rate risk

The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates.

l liabilities with exposure to

interest rates at the end of the year were as follows.

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31 2020 2019 $ 263,085 $ 428,566 50,441 13,299 84,492 61,250 3,755 21,169

Sensitivity analysis

for both derivatives and non-derivative instruments at the end of the year. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the year was outstanding for the whole year. Sensitivity rate of 1% increase or decrease was used when reporting interest rate risk internally to key management personnel and represents

174

If interest rates had been 1% higher/lower and all other variables were held constant, the -tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $807 thousand and $401 thousand, respectively, which was mainly a result of the change in floating rate bank borrowings and bank deposits.

The increases in net financial assets of cash flow interest rate risk.

c) Other price risk

The Group was exposed to price risk through its investments in money market fund instruments which were classified as financial assets at FVTPL. The investments are held for strategic purposes. The Group manages this exposure by maintaining a portfolio of investments with lower risks.

Sensitivity analysis

The sensitivity analysis below was determined based on the exposure to money market funds price risks at the end of the year.

If money market funds prices had been 1% higher/lower, pre-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $598 thousand and $605 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial los which would cause a financial loss to the Group due to the failure of the counterparty to discharge its obligations and due to financial guarantees provided by the Group, could be equal to the carrying amount of the respective recognized financial assets as stated in the balance sheets.

In order to minimize credit risk, the management of the Group has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue receivables.

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance 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 short-term bank loan facilities set out in (c) below.

a) Liquidity and interest rate risk tables for non-derivative financial liabilities

The following tables detail the Grou -derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The tables included both interest and principal cash flows.

175

Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed upon repayment dates.

To the extent that interest flows are at floating rates, the undiscounted amount was derived from the interest rate curve at the end of the year.

December 31, 2020

On Demand or Less than 1 Month Non-derivative financial liabilities Non-interest bearing $ 111,235 Lease liabilities 220 Floating interest rate liabilities 1,083 Fixed interest rate liabilities - $ 112,538	1-3 Months 3 Months to 1 Year $ 7,148 $ 3,996 427 1,657 2,693 - 45,554 2,299 $ 55,822 $ 7,952	1-5 Years $ - 682 - - $ 682	5+ Years $ - - - - $ -

Additional information about the maturity analysis for lease liabilities:

Less than 1 Year 1-5 Years 5-10 Years 10-15 Years Lease liabilities $ 2,304 $ 682 $ - $ - December 31, 2019 On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year Non-derivative financial liabilities Non-interest bearing $ 49,601 $ 58,659 $ 2,964 Lease liabilities 210 436 1,695 Floating interest rate liabilities 2,127 4,253 12,026 Fixed interest rate liabilities - - 9,338 $ 51,938 $ 63,348 $ 26,023	15-20 Years $ - 1-5 Years $ 380 1,994 3,383 - $ 5,757	20+ Years $ - 5+ Years $ - - - - $ -	20+ Years $ -

Additional information about the maturity analysis for lease liabilities:

Less than 1 Year Lease liabilities $ 2,341	1-5 Years 5-10 Years 10-15 Years 15-20 Years $ 1,994 $ - $ - $ -	20+ Years $ -

The amount included above for floating interest rate instruments for both non-derivative financial assets and liabilities were subject to change if changes in floating interest rates differ from those estimates of interest rates determined at the end of the year.

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b) Liquidity and interest rate risk tables for derivative financial liabilities

The instruments. The table is based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable is not fixed, the amount disclosed was determined by reference to the projected interest rates as illustrated by the yield curves at the end of the year.

December 31, 2019

On Demand or Less than 3 Months 1 Month 1-3 Months to 1 Year 1-5 Years 5+ Years Net settled Foreign exchange forward contracts $ 21 $ 22 $ - $ - $ - c) Financing facilities December 31 2020 2019 Secured bank loan facilities: Amount used $ 49,170 $ 30,373 Amount unused 865,916 987,706 $ 915,086 $ 1,018,079

c) Financing facilities

30. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed as follows.

a. Related party names and categories

Related Names

Related Party Categories

Sabah Softwoods Berhad Sawit Kinabalu Seeds Sdn. Bhd. Borneo Samudera Sdn. Bhd. Bongalio Development Sdn. Bhd. Kalabakan Plantation Sdn. Bhd. Oscar Kinabalu Sdn. Bhd. Bagahak Plantation Sdn. Bhd. Saplantco Sdn. Bhd. Sawit Ecoshield Sdn. Bhd. Grape King Bio Ltd. Peng Sheng Ching Tan Chek Yen Peng Shih Hao

Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Related party in substance Associate Related party in substance Related party in substance Related party in substance Key management personnel

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b. Operating revenue

Related Party For the Year Ended December 31 Line Items Categories/Name 2020 2019 Sales Related parties in substance Sabah Softwoods Berhad $ 110,405 $ 242,482 Borneo Samudera Sdn. Bhd. 78,939 161,530 Others 11,701 29,504 Associate 7,810 2,752 $ 208,855 $ 436,268 The selling price for related parties is calculated with reference to the applicable market price. The credit terms for the related parties are comparable to those for unrelated parties. Purchase of goods For the Year Ended December 31 Related Party Category/Name 2020 2019 Related parties in substance $ 14,198 $ -	For the Year Ended	For the Year Ended	December 31
		2020 $ 14,198	2019 $ -

The selling price for related parties is calculated with reference to the applicable market price. The credit terms for the related parties are comparable to those for unrelated parties.

c. Purchase of goods

Purchases of goods for related parties are calculated with reference to general market conditions. The payment term for the related parties are comparable to those of unrelated parties.

d. Receivables from related parties (excluding loans to related parties)

Related Party Line Items Categories/Name Trade receivables Related parties in substance Borneo Samudera Sdn. Bhd. Sabah Softwoods Berhad Others Associate Less: Allowance for impairment loss Other receivables Associate Sawit Ecoshield Sdn. Bhd. Key management personnel		December 31	December 31
		2020 $ 14,883 10,062 3,161 2,767 30,873 (473) $ 30,400 $ 518 - $ 518	2019 $ 7,589 23,849 4,577 2,713 38,728 (2,732) $ 35,996 $ 7,609 37 $ 7,646

The outstanding receivables from related parties are unsecured.

The Group measures the loss allowance for trade receivables from related parties at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix financial position. The following table details the loss allowance of trade receivables from related

178

Trade receivables from related parties

December 31, 2020

Not Past Due Less than 90 Days Expected credit loss rate 1.32% 4.04% Gross carrying amount $ 28,475 $ 2,398 Loss allowance (Lifetime ECL) (377) (96) Amortized cost $ 28,098 $ 2,302 December 31, 2019 Not Past Due Less than 90 Days Expected credit loss rate 1.47% 3.06% Gross carrying amount $ 25,870 $ 1,860 Loss allowance (Lifetime ECL) (380) (57) Amortized cost $ 25,490 $ 1,803	91 to 180 Days 181 to 270 Days - - $ - $ - - - $ - $ - 91 to 180 Days 181 to 270 Days 20.86% - $ 10,997 $ - (2,294) - $ 8,703 $ -	Over 270 Days 100.00% $ - - $ - Over 270 Days 100.00% $ 1 (1) $ -	Total $ 30,873 (473)
			$ 30,400
			Total $ 38,728 (2,732)
			$ 35,996

The movements of the loss allowance of trade receivables from related parties were as follows:

Balance at January 1 Add: Net remeasurement of loss allowance Less: Net remeasurement of loss allowance Foreign exchange losses Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,732 - (2,143) (116) $ 473	2019 $ 602 2,164 - (34) $ 2,732

e. Payables to related parties (excluding loans from related parties)

Related Party Line Items Categories/Name Trade payables Related parties in substance Other payables Related parties in substance Key management personnel		December	31
		2020 $ 2,348 $ - 417 $ 417	2019 $ - $ 1 - $ 1

The outstanding payables to related parties are unsecured.

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f. Lease arrangements - Group is lessee

Acquisition of right-of-use assets

For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
	2020 $ - December	2019 $ 422 31
2020 $ - For the Year Ended		2019 $ 127 December 31
	2020 $ - $ 172	2019 $ 16 $ -

thly.

g. Loans to related parties

Related Party Category/Name Associate Sawit Ecoshield Sdn. Bhd. Interest income Related Party Category/Name Associate Sawit Ecoshield Sdn. Bhd.		December 31	December 31
		2020 2019 $ 14,190 $ 14,711 December 31
		2020 $ 498	2019 $ -

The Group provided its associate with unsecured short-term loans at rates comparable to market interest rates.

h. Other transactions with related parties

In 2019, ACI entered into an agreement with its associate to purchase machinery on its behalf and provide related technical consulting. For the year ended December 31, 2019, the service revenue was $6,673 thousand (recognized as other income).

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i. Remuneration of key management personnel

Short-term employee benefits	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 27,459	2019 $ 32,492

The remuneration of directors and key executives, as determined by the remuneration committee, was based on the performance of individuals and market trends.

31. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings:

Right-of-use assets Financial assets at amortized cost- current Financial assets at amortized cost - non-current Buildings, net		December 31	December 31
		2020 $ 113,229 - 106,670 273,676 $ 493,575	2019 $ 119,464 9,204 128,257 285,672 $ 542,597

32. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant contingencies and unrecognized commitments of the Group at December 31, 2020 and 2019 were as follows:

Acquisition of property, plant and equipment		December	31
		2020 $ 13,260	2019 $ 12,131

33. OTHER ITEMS

The COVID-19 pandemic in January 2020 caused the Malaysian government to impose national prevention measures to prevent the spread of the pandemic, suspending all business and religion events from March 18, 2020 to April 14, 2020. However, All Cosmos Industries Sdn. Bhd. and Sabah Softwoods Hybrid Fertiliser Sdn. Bhd. were granted permission to continue their operations, and the overall operation of the Group was not significantly affected.

Sabah Softwoods Hybrid Fertiliser Sdn. Bhd. was notified by the Sabah State Government to suspend work for disinfection and to conduct screening of all employees from November 9, 2020 due to exposure of employees to confirmed cases of COVID-19. During the suspension, the Company coordinated with its customers on the timing of shipment and All Cosmos Industries Sdn. Bhd. assisted in the shipment of inventory and, therefore, there was no significant impact on the overall operation.

181

In January 2021, due to an employee's confirmed diagnosis of COVID-19, the production department of All Cosmos Industries Sdn. Bhd. was spontaneously suspended from January 21, 2021 to January 26, 2021. In response to the regulation of COVID-19 prevention issued by the health bureau, the production department extended the suspension of work and to resume work on January 29, 2021. During the suspension, the company conducted disinfection and comprehensive inspection. At the same time, All Cosmos Industries Sdn. Bhd. continued to ship products; therefore, there was no significant impact on the operations.

34. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

foreign currencies other than functional currencies of the entities in the Group and the related exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2020

		Foreign		Carrying	Carrying
	Currencies		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	4,859	4.13 (USD:MYR)	$	142,390
USD		9	14,441 (USD:IDR)		260
Financial liabilities
Monetary items
USD		464	4.13 (USD:MYR)		13,603
December 31, 2019
		Foreign		Carrying
	Currencies		Exchange Rate	Amount
Financial assets
Monetary items
USD	$	3,048	4.171 (USD:MYR)	$	93,506
USD		14	14,139 (USD:IDR)		425
Financial liabilities
Monetary items
USD		677	4.171 (USD:MYR)		20,756
The significant realized and unrealized foreign exchange gains			(losses) were as follows:
	For the Year Ended December 31, 2020		For the Year Ended December 31, 2019
		Net Foreign		Net	Foreign
Foreign		Exchange Gains		Exchange Gains
Currency	Exchange Rate	(Losses)	Exchange Rate	(Losses)
USD	4.1997 (USD:MYR)	$ 15,739	4.1409 (USD:MYR)	$	9,879

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35. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions:
1) Financing provided to others (Table 1)
2) Endorsements/guarantees provided (Table 2)
3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures) (Table 3)
4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital (None)
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital (None)
6) Disposal of individual real estate at prices of at least $300 million or 20% of the paid-in capital (None)
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital (Table 4)
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital (None)
9) Trading in derivative instruments (Notes 7 and 29)
10) Intercompany relationships and significant intercompany transactions (Table 5)
b. Information on investees (Table 6)
c. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the year, repatriations of investment income, and limit on the amount of investment in the mainland China area. (None)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses (None):
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the year.
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the year.
- c) The amount of property transactions and the amount of the resultant gains or losses.
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes.

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e) The highest balance, the ending balance, the interest rate range, and total current period interest with respect to the financing of funds.
f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services.
d. Information of 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 7)

36. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. Softwoods Hybrid Fertiliser Sdn. Bhd. (SSHF) and others.

llows:

a. Segment revenues and results

reportable segments.

ACI SSHF Others Continuing operations Interest income Other income Other gains and losses Finance costs Share of loss of associates General administration costs and remuneration of directors Profit before tax (continuing operations)		Segment Revenue For the Year Ended December 31 2020 2019 $ 1,172,851 $ 1,105,819 310,366 560,215 159,566 101,665 $ 1,642,783 $ 1,767,699		Segment Income	Segment Income
				For the Year Ended December 31
		2020 $ 1,172,851 310,366 159,566 $ 1,642,783		2020 $ 72,482 1,454 46,257 120,193 18,800 12,021 21,875 (4,440) (1,296) (17,482) $ 149,671	2019 $ 57,464 13,196 22,428 93,088 17,368 16,675 6,147 (9,448) (155) (19,857) $ 103,818

Segment revenue reported above represents revenue generated from external customers. The inter-segment sales for the years ended December 31, 2020 and 2019 have both been eliminated.

Segment profit represents the profit before tax earned by each segment without allocation of central administration costs and remuneration of directors, share of loss of associates, interest income, other income, other gains and losses, finance costs and income tax expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

184

b. Segment total assets and liabilities

Segment total assets and liabilities are not provided to the chief operating decision maker and thus not required to be disclosed.

c. Revenue from major products

The following i products.

Bio-chemical fertilizers Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,611,967 30,816 $ 1,642,783	2019 $ 1,766,668 1,031 $ 1,767,699

d. Geographical information

The Group operates mainly in Malaysia.

information about its non-current assets by location of assets is detailed below.

Malaysia Others	Revenue from External Customers For the Year Ended December 31 2020 2019 $ 1,434,500 $ 1,605,877 208,283 161,822 $ 1,642,783 $ 1,767,699	Revenue from External Customers For the Year Ended December 31 2020 2019 $ 1,434,500 $ 1,605,877 208,283 161,822 $ 1,642,783 $ 1,767,699		Non-current Assets	Non-current Assets
				December 31
		2020 $ 1,434,500 208,283 $ 1,642,783		2020 $ 571,349 50,524 $ 621,873	2019 $ 605,065 54,726 $ 659,791

Non-current assets exclude investments accounted for using the equity method, financial assets at amortized cost- non-current, deferred tax assets and refundable deposits.

e. Information about major customers

Group A Group B Group C	For the Year Ended December 31	For the Year Ended December 31
	2020 Amount % NA (Note) - NA (Note) - $ 255,996 16	2019
		Amount % $ 242,884 14 193,786 11 NA (Note) -

Note:

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TABLE 7

ALL COSMOS BIO-TECH HOLDING CORPORATION AND SUBSIDIARIES INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2020

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Shares
Name of Major Shareholder Number of Percentage of
Shares Ownership (%)
All Cosmos Investment Ltd. 22,500,001 35.13
Oil Palm Plantation Ltd. 7,500,000 11.71
Maxtrength Corp. 4,500,000 7.02
----- End of picture text -----

Note: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preference shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

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AI assistant

ACBT — Annual Report 2021

52387_rns_2021-07-23_2868e0f0-fe81-46b9-86a3-f34a59767692.pdf

All Cosmos Bio-Tech Holding Corporation

ANNUAL REPORT 2020

Published on April 30, 2021

Table of Contents

1.0 Business Report 2020

Dear Shareholders,

1. 2020 Operating Results

1.1 Business plan implementation results

1.2 Financial Revenue and Profitability

2. 2021 Operation Plan Summary:

2.0 Company Profile

2.1 Date of Incorporation : March 26, 2010

2.2 Company and Group History

2.3. Risk Items

3.0 Corporate Governance Report

3.1 Organization System

3.1.1 Organizational Structure

3.1.2 Business Operations of Major Departments

3.4 Corporate Governance Operation

3.4.1 Operation of The Board of Directors

3.4.4 Composition, responsibilities and operation of the remuneration committee:

1. Remuneration Committee member information

2. Remuneration Committee duties

3.Remuneration Committee operation

2. Manager training status

All Cosmos Bio-Tech Holding Corporation Public Declaration for Internal Control System

Law.

3.5 Information on CPA Professional Fees

4.0 Capital Overview

4.1 Capital and Shares

4.1.1 Source of equity

4.1.1.1 The formation of equity

4.1.1.2 Type of shares

4.1.2 Structure of Shareholders

4.1.3 Shareholding Distribution Status

4.1.4 List of major shareholders

4.1.5 Market Price, Net Value, Earnings, Dividends Per Share of the Latest Two Fiscal Years, and Related Information

4.1.6 Company Dividend Policy And Implementation Status

2. Status of implementation

4.2. the company debt (including overseas corporate bonds) handling situation: none

4.3. Preferred Stocks handling situation: None.

4.4. The situation of overseas depositary receipts: None.

4.5. Employee stock option certificate and restrictions on employee rights:

4.6 Restricting the rights of employees to deal with new shares: None.

4.7 New shares issuance in connection with mergers and acquisitions : None.

4.8 Implementation of the fund utilization plan:

5.0 Operational Overview

5.1 Business content

5.1.1 Business scope

(2) Business share

5.1.2 Industry Overview

(A) Malaysia

Malaysian fertilizer market structure in 2014

(B) China

(C) Taiwan

(2) Industrial Up stream, Middle And Downstream Relationship

A. Upstream Raw Materials

(A) Chemical Fertilizer

(B) Organic Fertilizer

(C) Microorganism

B. Middle stream - Fertilizer Processing And Manufacturing

C. Downstream - Fertilizer User

(3) Various Development Trends Of Products

(4) Competitive Situation

5.1.3 Technology and R&D Overview

(1) Company Technology and R&D Overview

(2) Research Development Situation

5.1.4 Long-Term And Short-Term Business Development Plans

A. Marketing Strategy

(B) Deep Market Strategy

B. Research direction

C. Production Strategy

D. Operation Scale

E. Financial planning

(2) Company Long-Term Plan

A. Marketing strategy

(A) Expanding overseas markets

ACBT Annual Report 2021