FWUSOW - AGM Information 2021 | FinancialReports.eu

Stock Code ： 1219

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FWUSOW INDUSTRY CO., LTD.

2021 Annual Shareholders’ Meeting

Meeting Handbook

Date: June 22, 2021 Time: 9:00AM Place: No.658, Zhongshan Rd., Shalu District, Taichung City, (Taichung Shalu Labor Recreation Center)

I. Meeting Procedure…………………...……………………………1 II. Meeting A genda……………………………………………………2 III. Report I tems ………………………………………………………3 IV. Proposals ………………………………………..………………4 V. Questions a nd M otions ……………………………………………4 VI. Appendices 1. The 202 0 Business Report……………………………..…………5 2. 2020 Audit Co mmittee's Re view Re port…………...……………10 3. Amendment t o “ Employee C ode o f E thical C onduct Guidance”…11 4. 2020 Independent Auditors’ Report and Financial Statements……17 5. 2020 Earnings Dis tribution………………………………………40 6. The Articles of I ncorporation……………………………..………41 7. Rules and Procedures of Shareholders’ Meeting…………………47 8. The Minimum Number of Shares All Directors Are Required to Hold and the Number of Shares Actually Held by Individual and All Directors……………………………………………………..…50

I. Meeting Procedure

Fwusow Industry Co., Ltd

2021 Annual Shareholders’ Meeting Procedure

Call the Meeting to Order
Chairperson Remarks
Report Items
Proposals
Questions and Motions
Adjournment

II. Meeting Agenda

Fwusow Industry Co.,Ltd 2021 Annual Shareholders’ Meeting Agenda

Time: June 22, 2021 9:00AM

Place: No.658, Zhongshan Rd., Shalu District, Taichung City

(Taichung Shalu Labor Recreation Center)

Call the meeting to order and Chairperson’s remarks
Report Items
(1) 2020 Business Reports
(2) 2020 Audit Committee’s review report
(3) Report on the payment of employee compensation and director remuneration of 2020
(4) The Status of Endorsement and Guarantee of 2020
(5) Report on the amendment of “Employees of Code of Ethical Conduct Guidance”
Proposals
(1) 2020 Company’s business reports and financial statements
(2) Adoption of the proposal for distribution of 2020 profits
Questions and Motions
Adjournment

III. Report Items

2020 Business Reports

Explanatory Notes: Please refer to page 6

2020 Audit Committee’s review report

Explanatory Notes: Please refer to page 11

Report on the payment of employee compensation and director remuneration of

2020

Explanatory Notes: The company's net profit before tax for 2020 is

NT$694,451,996. In accordance to Article 26 of the Company’s Articles of Incorporation, the remuneration to employees, NT$14,934,451 and the

remuneration to directors, NT$37,336,129. The remuneration to employees and directors is allocated in cash uniformly.

The Status of Endorsement and Guarantee of 2020

Explanatory Notes: The company renders "Endorsement Guarantee Procedures" in accordance with the provisions. As of December 31, 2020, the amount of the endorsement guarantee to Charming Food was NT$580,000,000.

Amendment to “Employees Code of Ethical Conduct Guidance” Explanatory Note:
(1) Amend the title from “Employees Code of Ethical Conduct Guidance” to
“Code of Ethical Conducts”
(2) Applicable not only all employees but also include the board of directors and managing officers.
(3) Refer to page 12 for the amendments to “Employees Code of Ethical Conduct Guidance”

IV. Proposals

Motion 1: (Proposed by the Board)

2020 Company’s business reports and financial statements. Explanation:

1.2020 Company’s business reports and financial statements were audited and reviewed by Solomon & Co., CPAs. Audited financial report was issued.
2.Adoption of the 2020 Company’s business report and financial statements, which have been approved by the board of directors and examined by Audit Committee
3.Please refer to page 6 for the business reports & page18 for the financial statements

Resolution:

Motion 2: (Proposed by the Board)

Proposal for distribution of 2020 earnings.

Explanation:

Total allowable for distribution was NT$ 629,350,799; cash dividend is to be NT$1.00 per share which totaled to be NT$321,649,887. Cash dividends paid to each individual shareholder will be rounded down to the nearest dollar. Fractional shares with a value less than one dollar are accumulated and reported as the Company’s other income.
Upon the approval of the General Shareholders Meeting, it is proposed that the Chairperson be authorized to resolve the ex-dividend dates and adjust the dividends to be distributed to each share based on the number of actual shares outstanding on the record date for distribution.
Subsequent changes in the company’s share capital due to treasury stock trading and other factors, resulting in a change in the dividend per share, shall be calculated based on the actual number of shares outstanding on the ex-dividend date, and the chairman shall be authorized to make additional adjustments
Please refer to page 32 for The 2020 Earnings Distribution Proposal.

Resolution:

V. Questions & Motions

Adjournment

Appendix 1

Fwusow Industry Co., Ltd 2020 Business Report

Looking bac k in 2020, it w as a y ear f ull o f un certainties and un knowns as the COVID-19 pandemic impacted all aspects of our lives. Each and every country experienced an a ccelerated e conomic dow nturn, and Taiwan w as no ex ception. Due to the close proximity to China, Taiwan was in a state of panic as the world first learned of the spread of COVID-19. Our company business operation was affected as well so we adopted all the necessary preventive measures as Taiwan also rolled out the crucial policy in the prevention and control of COVID-19. The Taiwan model for combating COVID-19 is a success. Our company was able to operate as usual without any disruptions from the pandemic. With the COVID-19 crisis, fundamental changes to the market and consumer behavior are knocking companies off balance. We need to develop a rapid response to address current disruptions and to repurpose for the post-COVID era.

The pandemic brought upon a huge impact on the global supply chain. The food processing industry that imported all of its raw material bore the brunt as national lockdowns and po rt cl osures caused transportation di sruptions. M oreover, t he effects of climate change on raw materials increased the level of operational difficulty for the industry. In recent years, corporate risk management has been our focus. By examining risks and discovering opportunities, we timely adjust the company’s supply procurement model. In 2020, our grain commodity purchase price and t he existing inventory provided us some financial advantages to allow for higher product gross profit and meet our annual operational goals. In 2020, Fwusow Industry had a modest growth compared with the previous year; the operating revenue was NT$12,324,165,000; net income of NT$565,233,000.

I. 2020 Business Report

1. Operating Performance

Unit: NT$ Thousands

	2020	2019	Percent Change（%）
Net sales	12,324,165	12,259,254	0.5%
Operating Profit	331,428	33,435	891.3%
Pre-tax income	675,729	175,210	285.7%
Net income	565,233	141,379	299.8%

2. Finance Income and Costs and Profitability Analysis

(1) Finance Income and Costs
A. 2020 interest income was NT$1,038,000 which is from bank deposits.
B. 2020 interest expense was NT$42,249,000 which is from bank borrowings

& leases.

(2) Profitability Analysis

(2)ProfitabilityAnalysis
Item	2020	2019
Return on assets (%)	6.74	2.16
Return on owners’equity (%)	13.55	3.66
Ratio of profit before income tax to paid-in capital	20.98	5.44
Profitmargin(%)	4.59	1.15
Earnings Per Share (NT$)	1.91	0.63

Budget Implementation : In accordance with the regulations governing the publication of financial forecast of public companies, the company does not have to prepare financial forecasts to the public

4. Research and Development

From the market trends and feedback from the sales personnel, R&D are devoted to i nnovation and i mprovement o f i nternal t echnical ca pabilities. S trategic alliances with university-research and other institutions are ways to better serve the general public as to create products that meet their expectations and needs as we have access to more resources.

(1) Target t he needs a nd t rends for t he sm all and si ngle-serving pa ckaging products o f the cu rrent heal th and fitness popul ation to ex pand ou r business-to-consumer business model

(2) Develop new innovative products for providing more diversified and higher quality products to meet consumers’ versatile needs

(3) Expand and i ncrease the applications of agricultural waste to fully execute the agri-food circular economy model

(4) Expedite the research on microorganisms and raw materials used as food processing additives for the company's applications and operations

(5) Carry out various internal and external research tests to adjust and reach precise feed formula in a timely manner

(6) Establish a microbial cu lture ce nter t o pr ovide functional appl ications for various fields

II. 2021 Business Plan

1.Business Objectives

Closely m onitor the global eco nomic prospects, C OVID-19 t rends, and t he consumer market demands to adjust business strategies and policies dynamically. Continue to invest in our R&D, update and upgrade various software, hardware, and mechanical equipment maintenance. We have stringent control points from source m anagement t o pr oduction m onitoring to st orage t o transportation to ensure product quality and to increase production efficiency. Expand B2C business scale.

All in all, to implement the mission of "Provide safe and healthy food for all people”. In r ecent y ears, as w e i ntegrate a rtificial i ntelligence technology i nto ou r operations, t he use o f bi g dat a anal ytics facilitated t he pr ecise st rategic decision-making of "Building the smart factory", "Transforming to B2C business model", and " Developing green busi ness" t o increase ou r competitiveness. Moreover, align with environmental, social, and corporate governance strategies to take our company toward sustainable growth and operation.

2. Operations Strategy:

(1) Use various AI technologies for data collection and analysis to achieve smart production, precise decision-making, and build smart factories.
(2) Devote and ex pedite t he pr ocess of research and dev elopment i n t he consumer products, and effective use of social media and channel distributions to increase B2C and e-commerce sales.

(3) Continual certifications in the energy management system, greenhouse gas inventory verification, and product carbon footprint are the efforts to expand the scope of the agri-food circular economy. The effective use of materials and implementation of energy-saving and ca rbon-reduction programs will bring us closer to the dev elopment o f a green bu siness. T he co mpany publ ishes a corporate social responsibility ( CSR) r eport annual ly, and di scloses non-financial i nformation, adop ts and adh eres to co rporate governance, environmental and social policies (ESG), and embracing the opportunity for the company's sustainable growth.

3. Sales forecast and sales policy

In acco rdance w ith past per formance and m arket de mand ch anges, 2021 projected sales volume to be of 738,000 tons.

III. Development Strategy and Policy

Devote e fforts i n the r esearch and dev elopment o f i nnovative and di verse products to meet the needs of the consumer market.
Use AI technology to improve operational efficiency in breeding management, manufacturing process and order management.
Monitor t he global g rain commodity m arket and the prospective planting intentions; adjust the procurement strategies, and establish risk management mechanism accordingly to adapt to the market changes.
Improve laboratory anal ysis and R&D capability t o raise corporate competitiveness.
Incorporate risk management into the company’s business strategy, focus on sustainable pr ocurement, ci rcular eco nomy, ca rbon r eduction, and o ther green manufacturing concepts showing determination toward the sustainable environmental development.

IV. The Impact of the External Competitive Environment, Regulatory Environment, and Macroeconomic Conditions

In 2020, due to the US-China trade war, China-India skirmishes, and COVID-19, the global economy suffered a huge blow as countries were closing the borders or in various degrees of mandated lockdown and shelter in place. The shortage in cargo containers exacerbated t he condition as the demand f or bulk grain commodities shot up. Taiwan rolled out the effective policy in the prevention and control o f C OVID-19. Our company adopt ed stringent pr eventive m easures which enabl e us t o get bac k on t rack quickly. I n 2021, C OVID-19 p andemic slows down across the world as vaccination drives step up. The global economy starts to show modest recovery. However, in a time of global uncertainty, all industries in Taiwan also face challenges in adapting to the new normal. Through timely adj ustments in the operating strategy, business operation transformation, and innovative product creations, we can enhance the product value and improve sales performance to increase the company's profitability.
We continue t o pur sue various verifications, certifications and accr editations. In 2020 , w e obt ained Laboratory A ccreditation, ISO/IEC 17025, from Taiwan Accreditation Foundat ion, TAF, t o enhance our t esting, s ampling, o r calibration with r eliable r esults and t o o ffer quality and food sa fety i n hi gh s tandard. Furthermore, in a continuous effort in energy conservation and carbon reduction,

we obt ained accr editation v ia S GS for ISO 14064-1, Greenhouse G as – quantifying emission and removals and ISO 50001, Energy management system, to increase the effectiveness and efficiency of energy consumption, to minimize environmental i mpact, and t o ex pand ci rcular eco nomy model toward the development of a sustainable green business operation.

The integration o f AI boost s our production e fficiency and sh arpens our competitive edg e w ith faster dat a-driven deci sion-making; t hrough effective r isk assessment and controls, we will add value to the company and continue to grow in revenue and profits.

Board of Directors: Hung, Yau-Kuen General Manager: Hung, She-Pin Accounting Manager: Dai, Jen-Hui

Appendix 2 Audit Committee’s Review Report

The Board has submitted the Company’s 2020 business report, consolidated and individual financial statements and earnings distribution proposal, where consolidated and individual financial statements have been audited by Solomon & Co., CPAs through the appointment by the Board and an audit report has been issued accordingly.

The aforementioned proposal regarding Business Report, Financial Statements, and the Earnings Distribution Proposal have been reviewed and determined to be correct and accurate by the Audit Committee. Per Article 219 of the Company Act, we hereby submit this report.

To: 2021 General Shareholders’ Meeting of Fwusow Industry Co., Ltd

Fwusow Industry Co., Ltd

Audit Committee Convener: Tsun-Sun Huang

April 28, 2021

Appendix 3 Revision of Employees Code of Ethical Conduct Guidance

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Revised Version Before Revision Explanation
Procedure: Code of Ethical Conduct Procedure: Employees Code of Procedure name
Ethical Conduct Guidance change
1. Purpose: Amended part of the
In recognition of the necessity to content
1. Purpose of and basis for adoption:
assist the company in establishment
In recognition of the necessity to assist
of codes of ethical conduct, and to
and promote directors, managerial
help interested parties better
officers and all other employees of
understand the company’s ethical
Fwusow Industry to act in line with
standards.
ethical standards in their respective
Thus, following the Guidelines for the
capacities, and to help relevant
stakeholders better understand the adoption of Codes of Ethical Conduct
for TWSE or GTSM listed company to
ethical standards of Fwusow Industry;
develop respective codes of ethical
thus, this Code of Ethical Conduct is
established. conduct for our employees
Applicable persons
2. Applicable Persons: 2. Applicable Persons: extend to include
This Codes of Ethical Conduct is All employees refer only to all company’s Board of
applied to Fwusow Industry’s directors employees of our company and all Directors, managers
and managerial officers including subsidiaries (domestic & abroad) and all other employees
general managers or their equivalents,
assistant general managers or their
equivalents, deputy assistant general
managers or their equivalents, chief
financial and chief accounting officers,
and all other company employees of
Fwusow Industry to act in line with
ethical standards. Herein after
referred to “Fwusow Industry
employees”
3. Prevention of Conflicts of Newly Added
Interest
Fwusow Industry’s employees shall
perform their duties in an objective and
efficient manners and shall be
prohibited from taking advantage of
their position in Fwusow Industry to
obtain improper benefits for either
themselves or their spouse, parents,
children, or relatives within the second
degree of kinship. When
aforementioned persons engage in
loans of funds, provisions of guarantees
and major asset transactions or the
purchase or sale of goods involving the
affiliated companies at which
employees work, the employees shall
voluntarily explain whether there is any
potential conflict between them and
Fwusow Industry.
Amended parts of the
4. Minimize incentives to pursue
7. Avoid Conflict of interest and content
personal gain: T he company shall
opportunities to pursue personal gain:
prevent its employees from engaging in
Employees are responsible to
any of the following activities:
safeguard and maximize company’s
profit legitimately and should avoid:
(1) Seeking an opportunity to pursue
1. Use of company property,
personal gain by using company 11
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property or information or taking advantage of their positions. (2) Obtaining personal gain by using company property or information or taking advantage of their positions. (3) Competing with the company. When the company has an opportunity for profit, it is the responsibility of the employees to maximize the reasonable and proper benefits that can be obtained by the company	information or advantage of their positions to benefit themselves personally or allow a third party to obtain personal gain 2. Disclose confidential information to a third party without proper authorization or consent from the company. It is prohibited to use confidential information for personal gain or to favor or to harm others 3.Compete with the company
5.Confidentiality (1) Fwusow Industry’s employees shall be bound by the obligation to maintain the confidentiality of any information regarding Fwusow Industry itself or its suppliers and customers, except when authorized or required by law to disclose such information. Confidential information includes any undisclosed information that, if exploited by a competitor or disclosed, could result in damage to Fwusow Industry or its suppliers and customers. (2) Fwusow Industry’s employees shall abide by and sign the non-disclosure agreement, affidavit of employee integrity and other confidential regulations.	10. Confidentiality: Employees should respect each other's privacy and must not spread rumors or slander. Confidential information known to them in their duties, the employees should managed carefully, and they should not be disclosed to others or used for other than work purposes unless they are disclosed by the company or provided for the purpose of performing their duties. The same applies even after resignation/ termination. Above-mentioned confidential information included all personal information of our employees and our customers, inventions, trade secrets, technical data, product designs, manufacturing professional know-hows, finance and accounting information, intellectual property and other information if used by the competitors could result damage to the company or customers. Anyone associated with the trade secrets should sign a ‘Non-Disclosure Agreement’ (attachment 2) and the signed documents are kept with the Human Resource Department.	Confidentiality principle is included in the Non-Disclosure Agreement
6. Fair Trade Fwusow Industry’s employees shall treat all suppliers and customers, competitors, and employees fairly, and shall be prohibited from obtaining improper benefits through manipulation, nondisclosure, or misuse of the information learned by virtue of their positions, or through misrepresentation of important matters, or through other unfair transactional practices.	8. Fair & Integrity Trade Employees should treat business partners fairly; when dealing with related parties, there should be no special treatment. While executing the business activities, the employees shall not demand personal benefits or third party interests such as appointments, commissions, proportional percentage payments, agency fees, post-gratuities, acceptance of any form of gifts, entertainment, kickbacks, bribes, or other improper benefits. For specific high-risk positions, the company may require the employee to sign Employee Integrity Agreement (Attachment 1), whichshallbekept by theHuman	Included in the Employee Integrity Agreement
	12

	Resource Department. However, it does not limit those who disclose gifts or entertainment as social etiquette or permitted by the company. Employees accepting or arranging any business entertainment should comply with the usual business etiquette and should not be excessively luxurious or frequent, causing large or unnecessary expenditures
7. Safeguard and proper use of company assets: All employees have the responsibility to safeguard company assets and to ensure that they can be effectively and lawfully used for official business purposes; any theft, negligence, or waste of the assets shall be avoided to prevent directly impacting the company's profitability.	12. Safeguard and proper use of company assets: When performing their duties, employees should avoid data theft, interference, destruction and intrusion to the information systems, network equipment and other resources. The employees should protect the confidentiality, integrity and usability of the company’s information	Amended parts of the content
8.Legal Compliance All Fwusow Industry’s directors, managerial officers and employees shall act in compliance with the Securities and Exchange Act, and other applicable laws, regulations, and by law concerning Fwusow Industry’s business activities.	13. Copyright All employees should comply with intellectual property laws and regulations. Unlawful copying or duplicating copyrighted intellectual properties such as books, magazines, software, and others are strictly prohibited.	Included in the Non-Disclosure Agreement
9. Encouraging Reporting on illegal or unethical activities Fwusow Industry shall raise awareness of ethics internally and establish a dedicated reporting hotline and encourage employees to report to Fwusow Industry’s directors, managerial officers, chief audit executive, or other appropriate individual upon suspicion or discovery of any activity in violation of law or regulation or the code of ethical conduct and to provide sufficient information for Fwusow Industry to deal with such activity. Fwusow Industry shall ensure that information reported will be treated as confidential and take necessary measures to protect the safety of the good-faith informants.	14. Encourage reporting of any violations to this Employees Code of Ethical Conduct Guidance: Managers should advocate company’s ethics and encourage all employees to report any violations of laws or this guidance to the relevant supervisors/ managers. If needed, the reporting employees could reach out to the company spokesperson whose contact information, phone and email, is listed on MOPS and the annual report. The company shall make every effort to protect the identity of the informant from threats.	Amended parts of the content

10. Discipline and Remedy (1) If the company’s employees violate code of conduct, Fwusow Industry’s human resource department shall handle the matter in accordance with Fwusow Industry Rewards and Punishment Management Measures with relevant disciplinary measures. The violator’s title, name, date of violation, violation contents and disciplinary actions taken will be announced in accordance with the regulation. The violator is entitled to submit complaints based on applicable provisions he may report and appeal to the Human Resource Evaluation Committee for deliberation. (2) When a director or managerial officer violates this Code of Ethical Conduct, Fwusow Industry shall handle the matter in accordance with relevant disciplinary measures and shall without due delay disclose on the Market Observation Post System (MOPS) the date of the violation by the violator, reasons for the violation, the provisions of the code violated, and the disciplinary actions taken.	15. Disciplinary Actions: The following violations shall be disciplined: 1. Employees have violated the “Employees Code of Ethical Conduct Guidance” 2. The direct supervisor of the employees: 2.1 Inadequate supervision which caused the employees to violate the “Employees Code of Ethical Conduct Guidance” 2.2 Anyone knowingly allow for the violations to “Employees Code of Ethical Conduct Guidance” without reporting 3. Supervisors, certifiers or auditors of various business: 3.1 Negligence in management; did not notice of any violations to “Employees Code of Ethical Conduct Guidance” 3.2 Supervisors, certifiers or auditors are aware of the violations to “Employees Code of Ethical Conduct Guidance” yet knowingly not report the incidents. 4. Disciplinary policies: In the event of violating the “Employees Code of Ethical Conduct”, all illegitimate benefits gained should be recovered and returned to the respective negatively affected parties. The violators will be disciplined in accordance to “Fwusow Industry Rewards and Punishment Management Measures”.	Amended parts of the content
11. Procedures for Exemption Any exemption for directors or managerial officers from compliance with this Code of Ethical Conduct must be adopted by a resolution of the board of directors, and that information on the date on which the board of directors adopted the resolution for exemption, objections or reservations of independent directors, and the period of, reasons for, and principles behind the application of the exemption be disclosed without delay on the MOPS, in order that the shareholders may evaluate the appropriateness of the board resolution to forestall any arbitrary or dubious exemption from the code, and to safeguard the interests of the company by ensuring appropriate mechanisms for controlling any circumstance under which such an exemption occurs.	16. Procedures for Exemption: Under certain circumstances, the company may offer exemptions to some employees. The board of directors will only agree to the exemption under exceptional circumstances; immediate disclosure will be made to the shareholders providing the employee name and the reasons for the exemption. ~~14~~	Amended parts of the content

~~14~~

12. Method of Disclosure: Fwusow Industry shall disclose this Code of Ethical Conduct adopted herein, and any amendment to it, on Fwusow Industry’s official website, in its annual reports, and prospectuses and on the MOPS	17. Implementation, Revision & Disclosure Methods: 1. The company should immediately disclose any changes to this Guidance, and all employees are obligated to understand the revised content. 2. This Guidance shall be implemented after the board approval, and shall be disclosed in the annual report, the company’s website and MOPS. The same shall apply when amended.	Amended parts of the content
13. Enforcement This Code of Ethical Conduct, and any amendments to it, shall enter into force after it has been adopted by the board of directors, reviewed by commissioner of Fwusow Industry’s Audit Committee, and submitted to a shareholder meeting.	17. Implementation, Revision & Disclosure Methods: 2. This Guidance shall be implemented after the board approval, and shall be disclosed in the annual report, the company’s website and MOPS. The same shall apply when amended.	Amended parts of the content
	3.Integrity principle: Employees should uphold proactive and responsible attitude in performing their duties. Employees should focus on being team players, avoiding individualism, and abiding by the principle of integrity	Deleted Included in the Employee Integrity Agreement
	4.Fair principle: Employees shall not discriminate or exclude each other in respects to gender, race, religion, political belief, social ranking, nationality and age	Deleted
	5. Work Environment Employees shall maintain a healthy and safe workplace. Any form of sexual harassment or violence, threats, intimidation, and other illegal acts shall be prohibited.	Deleted
	6. Maintain company image: The employee behavior represents the company's image. When acting on behalf of the company, daily work attitude, and personal behavior, the employee should consider the consequences of negatively affecting the company's reputation.	Deleted

	9. Insider trading: Employees shall not disclose any confidential information that come through with their duties with the provisions of the Securities Exchange Law before disclosing any information that may materially affect the trading prices of the company's securities, and they should not use the information to engage in insider trading. In accordance to the provisions of the Securities Exchange Regulations, the shareholding changes of the employees and their relatives of second-kin (inclusive) shall be reported to the company.	Deleted
	11. Proper record documentations & reports: Employees should ensure the accuracy and completeness of the records or documents that they handle and the retention of these files.	Deleted Included in the Non-Disclosure Agreement

Appendix 4

INDEPENDENT AUDITORS’ REPORT

Translated from Chinese

The Board of Directors and Shareholders FWUSOW INDUSTRY CO., LTD.

Opinion

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

In our opinion and other auditors’ reports set forth in Major Accounting Items, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company’s parent company only financial statements for the year ended December 31 2021 are stated as follows:

Impairment of accounts receivable

The loss allowance for accounts receivable is measured by management’s simplified method in accordance with IFRS9 “Financial Instruments”, which appropriates a loss allowance at an amount equal to accounts receivable lifetime expected credit loss. The assessment of the loss allowance for accounts receivable is based on historical default records, current informed financial conditions as well as forward-looking economic conditions. Due to the fact that appropriateness of the allowance loss is significant management judgement, it is deemed to be one of the key audit matters.

The accounting policies are described in Note of the individual financial report. For book value of accounts receivable, please refer to the disclosures in note 6(4) and (20) of the individual financial report.

The main audit procedures carried out by the accountants include testing the effectiveness of internal control operations related to accounts receivable, carefully assessing the management’s classification of accounts receivable aging schedule and the reasonableness of the loss rate ratio, comparing current year’s aging distribution of accounts receivable with the year before, and analyzing whether there are any major abnormalities in the turnover rate of accounts receivable in the two periods. We also send out confirmation letters to clients which have outstanding balance by the end of the year and review its collection after this accounting year.

Inventory evaluation

The value of inventory is affected by market supply and demand. In addition, the allocation of inventory cost elements and the estimated amount of net realizable value are subject to the subjective judgment of the management. Therefore, the accountants pay special attention to the cost and net realizable value and the appropriateness of the loss of devaluation of inventories by management in accordance with the requirements of International Accounting Standards (IAS2).and the reasonableness of the management to appropriate allowance for inventory demmvaluation losses.

The principal audit procedure performed by the accountant is to obtain inventory entry data and perform detailed tests to verify that the raw material cost, labor input and manufacturing costs of the inventory have been reasonably allocated to the appropriate inventory items. The accountants compare the actual sales price of the inventory at the end of the period with its book value in a sampling manner to verify whether the inventory has been evaluated at the lower of cost or net realizable value. The accountants also compare the inventory quantity data obtained from annual inventory check with accounting record to test the existence and completeness of inventory in the end of year; By participating in and observing the annual perpetual inventory, accountants assess the appropriateness of allowance for inventory devaluation losses .

Other major accounting issue

The financial statements in year 2020 and 2019 of some investee companies accounted for using the equity method, were not audited by us but other accountants; therefore, the accountants’ opinions in the Company's financial statements and the relevant information disclosed in Note 13 are based on the audit reports of other accountants. The Company’s equity investment in the abovementioned investee companies as of December 31, 2020 and 2019, were NT$317,277 thousand and NT$250,531 thousand respectively, accounting for 4.19% and 3.19% of the total assets,. The comprehensive benefits recognized by the equity method in 2020 and 2019 were NT$40,025 thousand and NT$26,607 thousand, respectively, accounting for 6.48% and 13.28% of the total comprehensive benefits.

Responsibilities of management and governance units for Parent Company Only financial statements

The management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulation Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

When preparing parent company only financial statements, the management’s responsibilities also include assessing the company’s ability to continue as going concern, disclosure of related matters, and the adoption of the accounting basis as a going concern, unless the management either intends to liquidate the Company or to cease operations, or in addition to liquidation or there is no other practical and feasible plan but to do so.

The governing unit (including the audit committee) of the Company is responsible for supervising the financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are Sung-Yu Liu and Zi-Yu Chen

SOLOMON & CO., CPAs. Taichung, Taiwan Republic of China March 23, 2021

Notice to Readers

The accompanying standalone financial statements are intended only to present the standalone 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 standalone financial statements are those generally applied in the Republic of China. For the convenience of readers, the independent auditors’ report and the accompanying standalone 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 auditors’ report and standalone financial statements shall prevail.

FWUSOW INDUSTRY CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

*Year ended December 31*	*Year ended December 31*	*Year ended December 31*
*2020*	％ 10 － 4.5 2.4 9.7 4.1 0.6 － 18.8 1.3 0.2 － 51.5 9.4 37.6 0.3 0.2 0.3 0.6 0.1 － 48.5 100.0	*2019*
*Amount* 739,333 8,412 341,250 179,177 735,487 310,831 42,317 160 1,428,262 96,086 17,204 88 3,898,607 712,681 2,846,159 25,090 14,338 23,000 41,842 14,696 2,711 3,680,517 7,579,124		*Amount* 689,959 9,371 300,503 175,560 691,321 329,031 19,672 160 1,772,330 80,042 15,853 125,722 4,209,524 644,080 2,874,176 38,689 6,964 14,127 45,705 12,625 6,394 3,642,760 7,852,284	％
			9 － 3.8 2.2 8.8 4.2 0.3 － 22.6 1.0 0.2 1.6
			53.6
			8.2 36.6 0.5 0.1 0.2 0.6 0.1 0.1
			46.4
			100.0

The accompanying notes are an integral part of these parent company only financial statements.

(With Solomon & Co., audit report dated March 23, 2021)

FWUSOW INDUSTRY CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

*Year ended December 31*	*Year ended December 31*	*Year ended December 31*
*2020*	％ 4.9 － 0.1 1.7 2.9 3.6 0.9 0.1 5.5 － 19.7 12.7 5.5 0.2 0.1 － 3.6 22.1 41.8 42.5 0.2 15.7 (0.1) (0.1) 58.2 100.0	*2019*
*Amount* 372,414 $ － 6,062 128,653 216,716 274,189 67,864 6,747 415,000 4,675 1,492,320 960,000 416,032 18,609 5,774 1,553 271,804 1,673,772 3,166,092 3,220,139 14,358 1,191,228 (5,958) (6,735) 4,413,032 7,579,124 $		*Amount* 980,202 $ 1,604 4,574 133,273 225,666 160,419 16,816 10,912 580,000 3,256 2,116,722 1,075,000 416,032 28,019 6,812 1,473 277,006 1,804,342 3,921,064 3,220,139 14,358 704,042 (7,319) － 3,931,220 7,852,284 $	％
			12.5 － 0.1 1.7 2.9 2.0 0.2 0.1 7.4 －
			26.9
			13.7 5.3 0.4 0.1 － 3.5
			23.0
			49.9
			41.0 0.2 9.0 (0.1) －
			50.1
			100.0

The accompanying notes are an integral part of these parent company only financial statements.

(With Solomon & Co., audit report dated March 23, 2021)

FWUSOW INDUSTRY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

*2020*		*2019*
*Amount*	％	*Amount*	％
11,775,775 $ (10,400,050) 8,500	100.0 (88.3) 0.1	11,627,824 $ (10,551,902) (1,000)	100.0 (90.7) －
1,384,225	11.8	1,074,922	9.3
(577,400) (247,748) (35,865) (4,190)	(4.9) (2.1) (0.4) －	(558,378) (186,670) (39,552) (2,054)	(4.8) (1.6) (0.4) －
(865,203)	(7.4)	(786,654)	(6.8)
519,022	4.4	288,268	2.5
368 27,070 10,200 (24,935) 162,727	－ 0.2 0.1 (0.2) 1.4	883 25,494 (636) (38,441) (43,382)	－ 0.2 － (0.3) (0.4)
175,430	1.5	(56,082)	(0.5)
694,452 (79,175)	5.9 (0.7)	232,186 (29,072)	2.0 (0.3)
615,277	5.2	203,114	1.7
(1,108) 1,600 222 1,702 (341)	(0.1) －－－－	1,915 (649) (383) (4,559) 911	(0.1) －－－－
2,075	(0.1)	(2,765)	(0.1)
617,352 $	5.1	200,349 $	1.6
$	1.91	$	0.63

The accompanying notes are an integral part of these parent company only financial statements.

(With Solomon & Co., audit report dated March 23, 2021)

FWUSOW INDUSTRY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

*Shares*	*Capital* *Surplus*		*Retained Earnings*	*Retained Earnings*		*Other equity interest*	*Treasury Shares*	*Total Equity*
		*Legal reserve*	*Special Reserve*	*Earnings* *(Accumulated*	*Total*	*Foreign Currency* *Translation Reserve*
3,220,139 $ －－－－	32,946 $ －－－ (18,588)	246,604 $ －－－－	233,273 $ －－－－	56,000 $ (32,201) 203,114 883 (3,631)	535,877 $ (32,201) 203,114 883 (3,631)	(3,671) $ －－ (3,648) －	－ $ －－－－	3,785,291 $ (32,201) 203,114 (2,765) (22,219)
3,220,139 －－－－－	14,358 －－－－－	246,604 － 20,399 －－－	233,273 －－－－－	224,165 － (20,399) (128,805) 615,277 714	704,042 －－ (128,805) 615,277 714	(7,319) －－－－ 1,361	－ (6,735) －－－－	3,931,220 (6,735) － (128,805) 615,277 2,075
3,220,139 $	14,358 $	267,003 $	233,273 $	690,952 $	1,191,228 $	(5,958) $	(6,735) $	4,413,032 $

The accompanying notes are an integral part of the parent company only financial statements

(With Solomon & Co., audit report dated March 23, 2021)

FWUSOW INDUSTRY CO., LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments for Adjustments to reconcile profit (loss) Depreciation expense Expected credit loss Change in fair value less cost to sell of biological assets Allowance for inventory valuation and obsolescence loss Net loss (gains) on Financial Assets and Liabilities at Fair Value through profit or loss Interest expense Dividend income Interest income Share of loss (profit) of associates and joint ventures accounted for using equity method Loss (gain) on disposal of property, plant and equipment Reversal of impairment loss recognized in profit or loss, property, plant and equipment Property, plant and equipment transferred expences Gain of lease modification Gain on Sale of Investments Other adjustments to reconcile profit (loss) Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets Financial assets and liabilities at fair value through profit or loss Notes receivable ( include related parties) Accounts receivable ( include related parties) Other receivables ( include related parties) Inventories Biological assets Prepayments Overdue receivables ( include related parties) Changes in operating liabilities Notes payable ( include related parties) Accounts payable ( include related parties) Other payables ( include related parties) Contract liabilities Other current liabilities Net defined benefit liability Total changes in operating assets and liabilities Total adjustments Cash inflow (outflow) generated from operations Interest received Interest paid Dividend received Income tax refund (paid) Cash provided by (used in) operating activities	*2020* 694,452 $ 189,977 4,190 (8,500) － (2,753) 24,935 (444) (368) (162,727) (442) －－ (127) (145) 1,790 45,386 2,253 (44,364) (28,055) (22,645) 344,068 (33,012) 6,949 (2,101) (4,620) (8,950) 103,916 1,488 1,419 (2,146) 314,200 359,586 1,054,038 368 (25,768) 288,170 (24,383) 1,292,425	*2019*
		232,186 $ 195,575 2,054 1,000 3,730 1,054 38,441 (771) (883) 43,382 1,734 (1,187) 42 － (17) 3,545
		287,699
		17 (60,468) (55,683) 95,074 (459,886) 23,026 66,726 2,096 (102,543) 55,474 21,836 (61,114) (149) (3,357)
		(478,951)
		(191,252)
		40,934 883 (38,740) 33,525 24,522
		61,124

（Carried over）

（Brought forward）

（Brought forward）
Cash flows from investing activities: Decrease (increase) in financial assets Proceeds from disposal of property, plant and equipment Acquisitions of investments accounted for using equity method Acquisitions of property, plant and equipment Decrease (increase) in refundable deposits Net cash flows from (used in) investing activities Cash flows from financing activities: Increase (decrease) in short-term loans Proceeds from long-term debt Repayment of long-term debt Payment of lease liabilities Cash dividends paid Decrease in quarantee deposits received Payments to acquire treasury shares Net cash flows from (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year	*2020* 125,634 2,046 (195,500) (139,723) (2,071) (209,614) (607,788) 350,000 (630,000) (10,189) (128,805) 80 (6,735) (1,033,437) 49,374 689,959 739,333 $	*2019*
		(125,722) 4,497 (163,000) (168,484) 1,044
		(451,665)
		309,052 350,000 (450,000) (11,939) (32,201) (23) －
		164,889
		(225,652) 915,611
		689,959 $

The accompanying notes are an integral part of these parent company only financial statements.

(With Solomon & Co., audit report dated March 23, 2021)

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders FWUSOW INDUSTRY CO., LTD.

Opinion

We have audited the accompanying consolidated financial statements of FWUSOW INDUSTRY CO., LTD. and its subsidiaries (the “Company”), 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 the notes to the consolidated financial statements, including a summary of significant accounting policies.

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

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we are independent of the parent company and subsidiaries, fulfilling 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.

Key audit matters for the Company’s consolidated financial statements for the year ended December 31, 2020 are stated as follows:

Property, plant and equipment impairment assessment

The balance of the real property, plant and equipment of FWUSOW INDUSTRY CO., LTD. and its subsidiaries as of December 31, 2020 was NTD 3,877,047 thousand, accounting for 45% of the total assets, in accordance with the provisions of the International Accounting Standards Bulletin, when the real property, plant and equipment of each cash-generating unit show signs of impairment, it should assess whether the asset has been impaired. As mentioned in Notes 4 and 5 of the consolidated financial statements, the management adopts the value-in-use model to evaluate the recoverable amount. When determining the future operating cash flow, it will consider its future operating outlook to estimate the predicted sales growth and profit, etc., and estimate the weighting. The average cost of capital rate is used as the discount rate. As these assumptions involve subjective judgments and may be affected by the future market conditions, there is a high degree of uncertainty.

The main audit procedures carried out by the accountant include obtaining the asset impairment assessment form of the cash-generating unit self-assessed by the management of the subsidiary and the key assumptions used in the assessment of the future cash flow of the management of the subsidiary, including the comparison with the historical results to evaluate the estimated business. Check whether the discount rate used is appropriate.

Impairment of accounts receivable

The accounting policies are as described in Note 4 and 5 of the consolidated financial report. For the book value of accounts receivable, please refer to the disclosures in notes 6 (5) of the consolidated financial report.

Inventory evaluation

The value of inventory is affected by market supply and demand. In addition, the allocation of inventory cost elements and the estimated amount of net realizable value are subject to the subjective judgment of the management. Therefore, the accountants pay special attention to the cost and net realizable value and the appropriateness of the loss of devaluation of inventories by management in accordance with the requirements of International Accounting Standards (IAS2) and the reasonableness of the management to appropriate allowance for inventory demmvaluation losses.

The principal audit procedure performed by the accountant is to obtain inventory entry data and perform detailed tests to verify that the raw material cost, labor input and manufacturing costs of the inventory have been reasonably allocated to the appropriate inventory items. The accountants compare the actual sales price of the inventory at the end of the period with its book value in a sampling manner to verify whether the inventory has been evaluated at the lower of cost or net realizable value. The accountants also compare the inventory quantity data obtained from annual inventory check with accounting record to test the existence and completeness of inventory in the end of year. By participating in and observing the annual perpetual inventory, the accountants assess the appropriateness of allowance for inventory devaluation losses.

Other Matter

Listed in Fushou Group’s consolidated financial statements in 2020, the financial statements of some of the subsidiaries were checked by other accountants. Therefore, in the accountant’s opinion on the above consolidated financial statements, the amounts listed in the aforementioned subsidiary’s financial statements are based on the audit reports of other accountants. The total assets of the aforementioned subsidiary as of December 31, 2020 were NTD 50,001 thousand (the same below), accounting for 0.58% of the total consolidated assets; NTD 0 thousand, accounting for 0% of consolidated operating income. It is also included in the above-mentioned consolidated financial statements. Regarding the investee company evaluated by the equity method, its financial statements have not been checked by this accountant but by other accountants. Therefore, the accountant’s opinion on the above financial statements is related to this. The amounts listed in the company's financial statements and the relevant information disclosed in Note 13 are based on audit reports by other accountants. FWUSOW INDUSTRY CO., LTD. and its subsidiaries adopted equity method investment balances of NTD267,321 thousand and NTD250,531 thousand respectively for the above-mentioned investee companies on December 31, 2020 and 2019, respectively, accounting for 3.13% of the total consolidated assets and 2.80%, and the total consolidated profit and loss recognized using the equity method in 2020 and 2019 in the Republic of China were 40,069 thousand and 26,607 thousand, respectively, accounting for 7.06% and 19.30% of the total consolidated profit and loss.

We have also audited the parent company only financial statements of FWUSOW INDUSTRY

CO., LTD. As of and for the years ended December 31,2020 and 2019 on which we have issued an unmodified opinion.

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

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

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

Those charged with governance (including members of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company 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 the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinions.

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.

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

The engagement partners on the audit resulting in this independent auditors’ report are Sung-Yu Liu and Zi-Yu Chen.

SOLOMON & CO., CPAs. Taichung, Taiwan Republic of China March 23, 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.

For the convenience of readers, the independent auditors’ report and the accompanying 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 auditors’ report and consolidated financial statements shall prevail.

FWUSOW INDUSTRY CO., LTD.

AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

*2020*	*2019*
*Amount* 943,986 $ 30,342 109,649 344,939 805,844 244,623 23,505 207 1,517,090 96,086 22,946 8,987 4,148,204 332,027 3,877,047 26,415 34,744 23,000 79,842 17,766 11,018 4,401,859 8,550,063 $	*Amount* 970,228 $ 9,371 － 303,469 785,151 254,913 29,374 205 1,847,911 80,042 20,550 138,465 4,439,679 309,736 3,996,629 41,876 28,902 14,127 77,705 14,563 14,354 4,497,892 8,937,571 $	％
		10.9 0.1 － 3.4 8.8 2.9 0.3 － 20.7 0.9 0.2 1.5
		49.7
		3.5 44.7 0.5 0.3 0.2 0.9 0.1 0.1
		50.3
		100.0

The accompanying notes are an integral part of these parent company only financial statements.

(With Solomon & Co., audit report dated March 23, 2021)

FWUSOW INDUSTRY CO., LTD.

AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

*Year ended December 31*	*Year ended December 31*	*Year ended December 31*
`2020`	％ `7.9` `1.4` － `0.1` `1.4` `2.5` `3.7` `0.8` `0.1` － `5.4` － `23.3` `19.3` `4.9` `0.2` `0.1` － `24.5` `47.8` `37.7` `0.2` `13.9` －－ `51.8` `0.4` `52.2` `100.0`	`2019`
*Amount* `672,414` `$` `119,930` － `6,062` `129,272` `218,290` `315,863` `67,864` `7,189` `1,740` `463,816` `5,134` `2,007,574` `1,655,956` `416,032` `18,900` `5,774` `2,413` `2,099,075` `4,106,649` `3,220,139` `14,358` `1,191,228` `(5,958)` `(6,735)` `4,413,032` `30,382` `4,443,414` `8,550,063` `$`		*Amount* `1,300,202` `$` `89,821` `1,604` `4,574` `133,432` `244,952` `218,417` `27,557` `12,098` `35,190` `626,282` `3,488` `2,697,617` `1,808,757` `433,454` `28,987` `6,812` `2,654` `2,280,664` `4,978,281` `3,220,139` `14,358` `704,042` `(7,319)` `-` `3,931,220` `28,070` `3,959,290` `8,937,571` `$`	％
			`14.5` `1.0` － `0.1` `1.5` `2.7` `2.4` `0.3` `0.1` `0.4` `7.0` `0.1`
			`30.1`
			`20.2` `4.8` `0.3` `0.1` －
			`25.4`
			`55.5`
			`36.0` `0.2` `7.9` －－
			`44.1` `0.4`
			`44.5`
			`100.0`

The accompanying notes are an integral part of these parent company only financial statements.

(With Solomon & Co., audit report dated March 23, 2021)

FWUSOW INDUSTRY CO., LTD.

AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

*Year ended December 31*	*Year ended December 31*	*Year ended December 31*
*2020*	％ 100.0 (89.0) 0.1 11.1 (5.3) (2.7) (0.3) (0.1) (8.4) 2.7 － 0.4 2.3 (0.3) 0.4 2.8 5.5 (0.9) 4.6 －－－－－－ 4.6 4.9 (0.4) 4.5 5.0 (0.4) 4.6 1.91	*2019*
*Amount* 12,324,165 $ (10,974,663) 8,500 1,358,002 (648,934) (332,016) (35,870) (9,754) (1,026,574) 331,428 1,038 46,717 287,700 (42,249) 51,095 344,301 675,729 (110,496) 565,233 (1,108) 1,600 222 1,975 (341) 2,348 567,581 $ 615,277 $ (50,044) 565,233 $ 617,352 $ (49,771) 567,581 $ $		*Amount* 12,259,254 $ (11,262,328) (1,000) 995,926 (636,671) (282,613) (39,553) (3,654) (962,491) 33,435 1,225 22,794 140,495 (59,394) 36,655 141,775 175,210 (33,831) 141,379 1,915 (649) (383) (5,289) 911 (3,495) 137,884 $ 203,114 $ (61,735) 141,379 $ 200,349 $ (62,465) 137,884 $ $	％
			100.0 (91.9) －
			8.1
			(5.2) (2.3) (0.3) －
			(7.8)

			0.3
			－ 0.2 1.1 (0.5) 0.3
			1.1
			1.4 (0.3)
			1.1
			－－－－－
			－
			1.1
			1.6 (0.5)
			1.1
			1.6 (0.5)
			1.1
			0.63

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

(With Solomon & Co., audit report dated March 23, 2021)

FWUSOW INDUSTRY CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

*Shares*	*Capital* *Surplus*		*Equity attributable to owner*	*Equity attributable to owner*	*s of the parent*		*Treasury Stock*	*Non-* *controlling* *Interests*	*Total Equity*
			*Retained Earnings*			*Other equity interest*
		*Legal reserve*	*Special Reserve*	*Unappropriated* *Earnings* *(Accumulated* *Deficit)*	*Total*	*Foreign Currency* *Translation Reserve*
3,220,139 $ －－－－－－	32,946 $ －－ (18,588) －－－	246,604 $ －－－－－－	233,273 $ －－－－－－	56,000 $ － (32,201) (3,631) 203,114 883 －	535,877 $ － (32,201) (3,631) 203,114 883 －	(3,671) $ －－－－ (3,648) －	－ $ －－－－－	31,341 $ － (25) 22,219 (61,735) (730) 37,000	3,816,632 $ － (32,226) － 141,379 (3,495) 37,000
3,220,139 －－－－－－	14,358 －－－－－－	246,604 － 20,399 －－－－	233,273 －－－－－－	224,165 － (20,399) (128,805) 615,277 714 －	704,042 －－ (128,805) 615,277 714 －	(7,319) －－－－ 1,361 －	－ (6,735) －－－－－	28,070 －－ (2,417) (50,044) 273 54,500	3,959,290 (6,735) － (131,222) 565,233 2,348 54,500
3,220,139 $	14,358 $	267,003 $	233,273 $	690,952 $	1,191,228 $	(5,958) $	(6,735) $	30,382 $	4,443,414 $

The accompanying notes are an integral part of the parent company only financial statements (With Solomon & Co., audit report dated March 23, 2021)

FWUSOW INDUSTRY CO., LTD.

AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Profit before tax Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation expense Amortized expense Expected credit loss Allowance for inventory valuation and obsolescence loss Change in fair value less cost to sell of biological assets Loss (gains) on Financial Assets and Liabilities at Fair Value through profit or loss Finance costs Dividend income Interest income Share of loss (profit) of associates and joint ventures accounted for using equity method Loss (gain) on disposal of property, plant and equipment Reversal of impairment loss recognized in profit or loss, property, plant and equipment Property, plant and equipment transferred expences Loss (gain) on disposal of financial assets Gain on reversal of impairment loss of financial assets Loss of lease modification Other adjustments to reconcile profit (loss) Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Changes in operating assets Financial assets and liabilities at fair value through profit or loss Notes receivable ( include related parties) Accounts receivable ( include related parties) Other receivables ( include related parties) Inventories Biological assets Prepayments Other current assets Overdue receivables ( include related parties) Changes in operating liabilities Notes payable ( include related parties) Accounts payable ( include related parties) Other payables ( include related parties) Advance receipts Contract liabilities Other current liabilities Net defined benefit liability Total changes in operating assets and liabilities Total adjustments Cash inflow (outflow) generated from operations Interest received Dividend received Interest paid Income tax refund (paid) Cash provided by (used in) operating activities	*2020* 675,729 $ 261,150 1,966 9,754 (20,555) (8,500) (2,753) 42,249 (444) (1,038) (51,095) (277,904) － 64 641 (3,603) (128) 1,790 (48,406) (19,677) (41,470) (18,223) (3,034) 351,670 (33,012) 1,180 10,453 (1,701) (4,160) (26,662) 96,709 (33,450) 1,488 1,646 (2,146) 279,611 231,205 906,934 1,038 30,848 (43,082) (72,804) 822,934	*2019*
		175,210 $ 266,623 2,491 3,654 32,065 1,000 1,054 59,394 (771) (1,225) (36,655) (126,917) (17,322) 126 (17) － 6 3,545
		187,051
		17 114,700 (156,198) 12,378 (489,019) 23,026 72,745 10,175 2,393 (102,892) 56,956 35,646 35,190 (61,114) (5,873) (3,357)
		(455,227)
		(268,176)
		(92,966) 1,225 20,170 (62,466) 22,468
		(111,569)

（Carried over）

（Brought forward）

Cash flows from investing activities: Proceeds from disposal of property, plant and equipment Additions to property, plant and equipment Acquisition of financial assets at amortised cost Proceeds from disposal of investment properties Acquisition of intangible assets Decrease (increase) in other financial assets Decrease (increase) in other assets Decrease (increase) in refundable deposits Net cash flows from (used in) investing activities Cash flows from financing activities: Increase (decrease) in short-term loans Increase (decrease) in commercial paper payable Proceeds from long-term bank loans Repayment of long-term bank loans Cash dividends paid Decrease in quarantee deposits received Repayment of principal of lease liabilities Increase in non-controlling interests Payments to acquire treasury shares Net cash flows from (used in) financing activities Effects of exchange rate change on cash Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year	2020	2019
	333,908 (192,562) (109,649) 2,816 (391) 125,515 824 (3,203) 157,258 (627,789) 30,109 367,610 (682,877) (128,805) (241) (11,206) 52,083 (6,735) (1,007,851) 1,417 (26,242) 970,228 943,986 $	186,834 (213,622) －－ (392) (125,630) (1,060) 1,138
		(152,732)
		253,251 (19,992) 955,123 (930,879) (32,201) (24) (13,641) 36,975 －
		248,612
		(4,321)
		(20,010) 990,238
		970,228 $

The accompanying notes are an integral part of the consolidated financial statements (With Solomon & Co., audit report dated March 23, 2021)

Appendix 5 Fwusow Industry Co., Ltd Profit Allocation Proposal For the year ended December 31, 2020

Item	Unit(NTD$)
Net Income foryear 2020	615,276,691
Less：10% Legal Reserve	(61,599,023)
Less: An effort to ascertain the amount of remeasuring of the fringe benefitprograms	(886,269)
Add: Fair value through other comprehensive income	1,599,807
Less: Difference between actual subsidiary equity and book value	0

2020 Earnings Available for Distribution	554,391,206
Plus：Unappropriated Retained Earnings of Previousyears	74,959,593

Total Available for Distribution	629,350,799
Distribution Items
Cash D ividends to Common S hareholders (NTD$0.40 per share)	(321,649,887)
Unappropriated Distribution	307,700,912

Note: The total number of issued shares is 322,013,887 shares, excluding 364,000 shares of treasury shares, the number of allottable shares is 321,649,887 shares

Chairman: Hung, Yau-Kuen General Manager: Hung, She-Pin Accounting Manager: Dai, Jen-Hui

Appendix 6

Articles of Incorporation of Fwusow Industry Co.,Ltd

Chapter One: General Provisions

Article 1: The Company is duly incorporated under the provisions governing company limited by shares as set forth in the Company Act, and its name shall be 福壽實業股份有限公司 in the Chinese language, and Fwusow Industry Co., Ltd. in the English language. (hereinafter referred to as the Company).

Article 2: The businesses operated by the Company are as follow:

(1). C105010 Edible oil manufacturing industry

(2). F102020 Wholesale of Edible Oil

(3). C201010 Prepared Animal Feeds Manufacturing

(4). F103010 Wholesale of Animal Feeds

(5). F202010 Retail Sale of Animal Feeds

(6). A401010 Livestock Farm Management

(7). A401040 Livestock Service

(8). A401020 Raising of Livestock and Poultry

(9). F101040 Wholesale of Livestock and Poultry

(10).F101050 Wholesale of Fishery Products

(11).F201030 Retail Sale of Fishery Products

(12).F101990 Wholesale of Other Agricultural, Husbandry and Aquatic Products

(13).F201010 Retail Sale of Agricultural Products

(14).C101010 Slaughter

(15).F201020 Retail Sale of Livestock Products

(16).F107070 Wholesale of Veterinary Drugs

(17).F207070 Retail Sale of Veterinary Drugs

(18).C103050 Manufacturing of Canning, Freezing, Dehydration, Pickled of Food

(19).C109010 Manufacture of Seasoning

(20).C102010 Manufacture of Dairy Products

(21).F102170 Wholesale of Foods and Groceries

(22).F203010 Retail Sale of Food, Grocery and Beverage

(23).C110010 Beverage Manufacturing

(24).F399040 Retail Sale No Storefront

(25).C104010 Manufacturing of Sugar Confectionery

(26).C108010 Carbohydrate Manufacturing

(27).C106010 Grain Husking, Manufacture of Grain Mill Products, Starches and Starch Products

(28).C199040 Beans Processed Food Manufacturing

(29).A102060 Food Dealers

(30).C199990 Manufacture of Other Food Products Not Elsewhere Classified

(31).G801010 Warehousing

(32).F301020 Supermarkets

(33).IZ06010 Tally Packaging

(34).I501010 Product Designing

(35).I301030 Electronic Information Supply Services

(36).I301010 Information Software Services

(37).C801110 Fertilizer Manufacturing

(38).F107050 Wholesale of Fertilizer

(39).F207050 Retail Sale of Fertilizer

(40).C802070 Agro-pesticide Manufacturing

(41).F107040 Wholesale of Agro-pesticides

(42).F207040 Retail Sale of Agro-pesticides

(43).IG01010 Biotechnology Services

(44).F401010 International Trade

(45).A101020 Growing of Crops

(46).A102050 Crops Cultivation

(47).C201020 Pet Food Processing

(48).F106060 pet product wholesale industry

(49).F206050 pet product retail industry

(50).ZZ99999 other businesses not prohibited or restricted by law except any business requiring special approval

Article 3: The Company may provide mutual endorsements or guarantees with peer companies or affiliates for the purpose of catering for business needs

Total amount of reinvestment of the Company may exceed 40% of the Company’s paid-in capital. However, if the amount of investment to a single company exceeds 50% of the paid-in capital, it must be approved by the shareholders meeting.

Article 4:The Company is headquartered in Taichung City, and may establish branches or factories at other locations, if necessary, subject t o r esolution of t he Board of Directors.

Chapter Two: Shares

Article 5: Deleted

Article 6: The total capital stock of the Company shall be in the amount of NTD$5,000,000,000, di vided i nto 500 ,000,000 s hares, at a par v alue o f N TD$10. The Board of Directors is authorized to i ssue the shares that have not y et been issued in lots.

Article 7: The Company m ay be ex empted from printing s tock certificates for the shares issued. However, for the issuance of such shares, the Company shall appoint a centralized securities depository enterprise to make recordation

Article 7-1: In accordance with the company law, with certain conditions, the objects of transfer of the treasury stocks purchased by the company may include full-time employees of the co ntrolling or a ffiliated companies, and the co nditions and distribution methods are subject to the resolutions by the Board.

Article 8: Other than otherwise regulated, "Regulations Governing the Administration of Shareholder Services of Public Companies" is applied to all related matters to the company shareholders.

Article 9 : No transfer of sh ares sh all be han dled w ithin si xty day s prior to a shareholders' regular meeting, or w ithin t hirty day s prior t o a shareholders' extraordinary meeting, or within five days prior to allocation of dividend bonus or any other benefits.

Chapter Three: Shareholders’ Meeting

Article 10: The shareholders' meeting hereof is in two categories, the shareholders’ regular meeting and sh areholders’ extraordinary m eeting. Other t han ot herwise stated, T he shareholders’ regular meeting shall be co nvened by t he boar d of directors at least once per annum within six months from the closing of each fiscal year. However, additional shareholders’ meetings may be called when requested and approved by the regulation . The shareholders’ extraordinary meeting may be called whenever it is deemed necessary.

Article 11: Notices for the shareholders’ meeting shall be served to all shareholders in writing thirty days in advance. The shareholders’ extraordinary meeting notices shall be served to all shareholders in writing fifteen days in advance. An issuer to shareholders who own less than 1,000 shares of nominal stocks may be given in the form of a public announcement.

Article 12: The shareholders’ meetings shall be chaired by the Chairman of the Board. If the C hairman i s absent, the ch airperson o f the m eeting shall be appoi nted i n accordance with the provisions of Paragraph 3 Article 208 of the Company Act. If the shareholders' meeting is called by any convener other than the board of directors, he/she sh all ac t as t he C hairman o f t he sa id m eeting. If t here are two or m ore conveners, the chairperson of the meeting shall be elected from among themselves.

Article 13: U nless otherwise pr ovided f or i n the C ompany A ct, resolutions in t he shareholders’ meeting shall be r esolved by a m ajority vote in the meeting attended by shareholders representing a majority of the total issued shares.

Article 14: A shareholder of the Company shall have one voting power for each share in his possession. However, shares of the Company held by the Company pursuant to Article 179 of Company Act are not entitled to voting power. 43

Article 15 : I n the ev ent w here a sh areholder i s unabl e t o a ttend a sh areholders’ meeting for any cause, the shareholder may appoint a proxy to attend the meeting on behalf of the shareholder by executing a power of attorney printed by the Company. Other than measures specified in Article 177 of the Company Act, a shareholder may also appoi nt a pr oxy i n acco rdance w ith t he p rovisions set forth i n the “ Rules Governing Appointment of Proxy by the Power of Attorney to Attend a Shareholders Meeting of Public Companies” published by the competent authority.

Article 16: Resolutions adopted at a shareholders' meeting shall be recorded in the minutes of the meeting in accordance with the Company Act.

Chapter Four: Directors and the Audit Committee

Article 17: The Company shall establish the Board of Directors constituted by 9 to 11 directors, a t hree-year tenure of office, the election thereof adopts the candidate nomination system and el igible for reelection. If the tenure of office of directors expires before the time of final account closing of the year, the tenure of office may be extended until the newly elected directors take office. When the number of directors falls short by one-third of the total number prescribed by the ar ticles of incorporation, the company shall convene a special shareholders meeting within 60 days of the occurrence of that fact to hold a by-election for directors.

The total number of registered shares held by all of the directors shall not be less than a certain percentage of the total number of the Company’s outstanding shares. The rules governing the aforesaid shareholding percentage and the verification and execution thereof shall be est ablished in compliance with orders of the competent authority. Said di rectors shall i nclude three i ndependent di rectors and the independent di rectors shall be no l ess t han one -fifths of director se ats. T he qualification, shareholding, restrictions on part-time jobs, nomination and election of independent directors and other matters to be complied with shall be handled in accordance with the Company law and t he relevant requirements of the competent security aut hority. The el ection o f i ndependent di rectors and non -independent directors shall be held at the same time, while quota of the elected shall be calculated separately.

Article 18: The Company shall set up an Audit Committee, which shall be composed of all independent directors. The number of members, tenure, scope of power and duties of the Audit Committee shall be specified in the Audit Committee laws and regulations.

Article 19: The Company shall set up a Remuneration Committee. The number of members, tenure, scope of power and duties of the Remuneration Committee shall be specified in the Remuneration Committee laws and regulations.

Article 20: The r emuneration of the directors shall be de termined by t he Board of Directors taking i nto co nsiderations of their p articipation and co ntributions to the company’s operations; and referencing to the level of remuneration adopted by peer companies and listed companies.

The Company may purchase liability insurance for directors for which they may be held responsible according to law in the scope of exercising business operations. 44

Article 21: Board of Directors Meeting shall be convened at least once per quarter In calling a Board meeting, the convener shall send a notice to each director no later than seven (7) days prior to the scheduled meeting date. However, in the case of emergency, the Board meeting may be convened at any time. The meeting notice shall specify the subject of the meeting and may be delivered via postal mail, e-mail, or f acsimile. Apart f rom the first meeting of each term of newly el ected B oard of Directors, which shall be co nvened by the director with the most votes, the Board meeting shall be convened by the Chairman of the Board of Directors. Except otherwise specified in the Company Act, the Board meeting shall be held with at least half of the directors present and the resolutions shall be adop ted by consent of the majority of directors present at the meeting.

Article 22: The Company shall elect a chairman and a vice chairman. The chairman shall represent the Company. In case that the Chairman is absent or fails to perform his duties, a substitute shall be appointed to act on his behalf as pursuant to Article 208 of the Company Act. In the event where a director is unable to attend a meeting, he may appoint another director on his behalf by issuing a written proxy, stating therein the scope of authorization with reference to the subjects to be discussed at the meeting.

Article 23: All business of the Company will act on the resolutions by the Board of Directors except otherwise specified in the Company Act.

Chapter Five: Managerial Officers

Article 24: The Company may appoint one or more managerial personnel who shall manage all affairs of the Company in accordance with the Board resolutions. The managerial per sonnel a nd t he em ployment, di scharge and r emuneration t hereof shall be decided by a resolution to be adopted by the board of directors.

Chapter Six: Accounting

Article 25: The fiscal year of the Company starts on January 1 of each year and ends on December 31 of the same year. The Board of Directors shall prepare and submit the following docu ments to t he r egular sh areholders’ meeting for ratification according to legal procedures. 1. Annual business report 2. Financial statement 3. Surplus earnings distribution or loss make-up proposal.

Article 26: The Company shall allocate 2% of the profits earned during the current year for the purpose of employees’ compensation and no more than 5% of the same for directors’ remuneration; the payment of such compensation shall be decided by the B oard of D irectors. The di stribution pr oposal for e mployees’ and di rectors’ compensation sh all be su bmitted t o the shareholders’ m eeting for appr oval. Nevertheless, in case that the Company has an accumulated deficit, a sum to make up the losses shall be reserved from the said profit before it is allocated to pay for the employees’ compensation and directors’ remuneration pro rata as described.

Article 27: Dividend Policy

The C ompany i s operating am idst c apricious environments and a midst t he business cycle of steady growth. When proposing the distribution of earnings, the board of directors shall take into account the capital expenditure anticipated by the Company and the capital needs with consideration of the indispensability of taking the earnings t o back up t he capital needs to resolve ho w m uch earnings t o be reserved or to be allocated to shareholders in cash.

When the profits are earned as shown in the financial statements, the sum to pay all income taxes and make up the previous loss, if any, shall be first withheld, then 10% shall be reserved as the legal reserve, then the special reserve to be duly allocated or restored. The balance shall be the sum allocable in the present term and after being added with the undistributed retained earnings accumulated in the preceding year. The bonus to shareholders shall be 40%~90% of the accumulated allocable earnings. The cash dividend shall not be less than the minimum of 10% of the total amount of dividend allocable f or the year. If the cash dividend per share is less than NTD$0.1 then the stock dividend will be distributed.

The surplus distribution proposal as described above shall be formulated by the Board meeting and submitted to the shareholders’ meeting for approval. (OK)

Chapter Seven: Bylaws

Article 28: The organizational and operational rules shall be separately worked out by the board of directors

Article 29: Matters unspecified i n the Articles of I ncorporation sh all be handled i n accordance to the provisions of the Company Act

30: The Articles of Incorporation of the Company was formulated on	30: The Articles of Incorporation of the Company was formulated on	November 1, 1954 and duly amended on:
(1) July 8, 1956	(2) December 18, 1958	(3) April 1, 1960
(4) May 1, 1960	(5) November 1, 1960	(6) February 22,1962
(7) March 1, 1965	(8) May 15, 1965	(9) November 3,1966
(10) October 20, 1968	(11) September 19, 1969	(12) December 10, 1970
(13) April 18, 1971	(14) July 6, 1972	(15) July 16, 1973
(16) August 25,1974	(17) June 11, 1977	(18) July 25, 1977
(19) November 26, 1979	(20) September 23, 1983	(21) June 30, 1985
(22) August 5, 1985	(23) October 9, 1985	(24) August 16, 1986
(25) March 5,1987	(26) February 24, 1989	(27) May 16, 1989
(28) January 10, 1990	(29) March 18, 1990	(30) April 29, 1991
(31) April 11, 1992	(32) April 17, 1993	(33) April 13, 1996
(34) April 19, 1997	(35) May 6, 1999	(36) June 2, 2000
(37) June 7, 2001	(38) June 6, 2003	(39) June 4, 2004
(40) June 3, 2005	(41) June 9, 2006	(42) June 8, 2007
(43) June 11, 2008	(44) June 10, 2009	(45) June 15, 2010
(46) June 22, 2011	(47) June 13, 2012	(48) June 18, 2013
(49) June 23, 2016	(50) June 27, 2018	(51) June 17, 2020

Appendix 7 Fwusow Industry Co., Ltd Rules and Procedures of Shareholders’ Meeting

Adopted by Ordinary Resolution passed on June 27, 2018

Unless otherwise pr ovided by r elevant l aws and r egulations, the C ompany’s Shareholders’ Meeting (hereinafter referred to as “the Meeting”) shall be conducted in accordance with the Rules and Procedures of Shareholders’ Meeting (hereinafter referred to as “the Rules and Procedures”).
The Company shall provide a sign-in book to allow attending shareholders to sign in or else attending shareholders may also submit the attendance card in lieu of signing in. The number of shares represented by attending shareholders shall be calculated in accordance with the sign-in book and submitted attendance cards.
The attendance and voting of the Meeting shall be calculated based on shares of the Company.
The M eeting shall be held at t he l ocation o f t he C ompany or ot her v enues convenient for shareholders’ attendance and suitable for holding t he Meeting. The Meeting shall not begin earlier than 09:00 a.m. or later than 03:00 p.m. of the day.
If the Meeting is convened by the Board of Directors, it shall be presided over by the Chairman of the Board. In the event that the Chairman of the Board is on leave or unable to exercise his duties for some reason, the Vice Chairman shall act on his behalf. In case that there is no Vice Chairman in the Company or the Vice Chairman is also on leave or unable to exercise his duties for some reason, the Chairman of the Board shall designate one executive director to preside over the Meeting, or where there is no executive director in the Company, one of the directors shall be designated to preside over the Meeting. In the absence of such a designation by the Chairman, the executive directors or the directors shall elect one su bstitute from a mong themselves to pr eside ov er t he M eeting. If th e shareholders' meeting is called by any convener other than the board of directors, he/she shall act as the Chairman of the said meeting.
The C ompany m ay appoi nt i ts desi gnated co unsels, C PAs, or o ther r elevant personnel to attend the Meeting. Personnel handling affairs at the Meeting shall wear an identification card or a badge.
The whole process of the Meeting shall be audio recorded or videotaped from the beginning to the end, of which the files shall be kept for at least one (1) year.
The Chair of t he Meeting shall call t he Meeting t o or der at the scheduled t ime. Nevertheless, if the shares represented by the attending shareholders have not reached m ore t han half of the t otal sh ares issued, t he Chair m ay an nounce postponement of the Meeting. However, the postponement shall be limited to two (2) times and the Meeting shall not be postponed for more than one (1) hour in total. In case that after two postponements, the shares represented by the attending shareholders have not reached a quorum but have reached more than 47

one third (1/3) of the total shares issued, tentative resolutions may be passed in accordance with the first Paragraph of Article 175 o f the Company Act. In the event that the shares represented by the attending shareholders have reached more than half of the total share issued before the end of the Meeting, the Chair of t he M eeting may r esubmit p reviously passe d t entative r esolutions to t he Meeting for voting in accordance with Article 174 of the Company Act.

The a genda o f the M eeting sh all be established by t he Board if the M eeting i s convened by the Board of Directors. The Meeting shall proceed in accordance with the agenda which shall not be changed without a resolution of the Meeting. The provision set forth in the preceding paragraph shall apply in the event that a shareholders’ meeting is convened by a person beyond the board of directors. Except by a resolution o f the M eeting, t he C hair o f the M eeting must no t announce adjournment of the Meeting before completion of all scheduled items on the agenda (including provisional motions). Once the Meeting is adjourned, the shareholders cannot designate another person as the Chair and continue the Meeting at the same venue or other places. Nevertheless, in the event that the Chair adjourns the Meeting in violation of the Rules and Procedures, the attending shareholders may designate, by agreement of a majority of votes, one person as the Chair to continue the Meeting
In case that a shareholder wishes to make a speech at the Meeting, he/she shall fill out a speech note and remark the key subjects to be spoken, shareholder account number (or code of the participation certificate), and shareholder name. The sequence o f sp eeches shall be deci ded b y t he C hair o f t he M eeting. A shareholder who submits a speech note without actually making the speech is deemed that he/she not spoken up in the Meeting. In the event that the content of the speech made by a shareholder is not consistent with that specified on the speech note, the contents actually said shall prevail. Unless with the consent of the C hair o f the M eeting and the sh areholder m aking the sp eech, other shareholders must not interrupt the speech of the shareholder, otherwise the Chair of the Meeting shall ban such interruption.
Unless with the consent of the Chair of the Meeting, each shareholder shall not make a speech on the same discussion item more than two (2) times and each time sh all no t ex ceed five (5) minutes. In t he ev ent that the sp eech o f a shareholder v iolates the r ules as described i n t he pr eceding pa ragraph or exceeds the scope of the discussion item, the Chair of the Meeting may stop the speech of such shareholder.
Where a juridical (corporate) person is consigned to participate in a shareholders’ meeting, such juridical (corporate) person may appoint only one representative to participate in the meeting. Where a juridical (corporate) person shareholder appoints two or more representatives to participate in a shareholders’ meeting, only one representative may speak up for the same issue.
After t he sp eech o f an attending sh areholder, t he C hair o f the M eeting may respond in person or appoint an appropriate person to respond.
The chairman may announce discontinuation of the discussion process and

proceed with the voting process when the discussion is considered up t o the extent for resolution.

Upon voting for an i ssue, the chairman shall appoint the ballot examiner(s) and the t eller(s). The b allot ex aminers shall onl y be appoi nted f rom t he shareholders. Voting for a resolution or vote counting shall be conducted in public at the place of the shareholders meeting, and the voting results shall be reported on-site immediately and recorded in the minutes of the Meeting.
The chairman may announce a break as appropriate during the proceedings of a shareholders’ meeting
Unless otherwise prescribed in the Company Act and the Articles of Incorporation, a resolution shall be adopted by a majority of votes represented by the attending shareholders at t he M eeting. The v oting process shall be co nducted on a case-by-case basis (or by separation of cases) and the outcomes of the yea or nay and t he abs tentions should be i nput i nto t he M arket O bservation P ost System (MOPS)
In case that there is an amendment or a substitute for a proposed resolution, the Chair of the Meeting shall decide the order of voting for the original case and the amendment or the substitute. If any issue among them is resolved, other issues are deemed vetoed and no further voting process is required.
The chairman may command the disciplinary personnel (or security guards) to help safeguard and maintain the order of the meeting site. The disciplinary personnel ( or security guar ds) shall, while helping safeguard t he or der at site, wear a bad ge bearing the wording of “Disciplinary Personnel” for identification purpose.
The Rules and Procedures shall become effective after approval by the Meeting. The same applies in the case of an amendment.

Appendix 8 The Minimum Number of Shares All Directors Are Required to Hold a nd t he Num ber of S hares Actually Held b y I ndividual and All Directors

The company's paid-in capital is NTD $3,220,138,870; total of 322,013,887 shares issued.
As required under article 26 of the Securities and Exchange Law, t he m inimum number of shares held by all directors of Fwusow Industry Co., Ltd shall not be less than 12,880,555 shares.
As of the date on which the transfer of shareholdings is suspended for the present shareholders’ m eeting the nu mbers o f shares actually hel d by i ndividual and al l directors are enumerated below.

04/24/2021

Title	Name	Shareholding
Chairman	Hua Shao Investment Co Representative: Hung, Yau-Kuen	4,463,667
Vice Chairman	Hung , Yau-Hsin	7,089,183
Director	Hung , Yau-Chih	8,447,292
Director	Cheng-Rong Investment Co Representative：Hsiao, Min-Ju	149,627
Director	Ann Dar Hsin Investment Co. Representative: Yeh,Tzu-Ling	1,486,058
Director	Taisun Yuan Investment Co. Representative: Liu,Wei Chen	86,000
Independent Director	Huang , Tsun-Sun	0
Independent Director	Ren , Yao-Ting	0
Independent Director	Huang , Shi-Pin	0
Total		21,721,827

AI assistant

FWUSOW — AGM Information 2021

51750_rns_2021-08-13_8c6d1168-6ebc-4a68-a526-692d8a2f0c39.pdf

FWUSOW INDUSTRY CO., LTD.

2021 Annual Shareholders’ Meeting

Meeting Handbook

Table of Contents

I. Meeting Procedure

Fwusow Industry Co., Ltd

2021 Annual Shareholders’ Meeting Procedure

II. Meeting Agenda

Fwusow Industry Co.,Ltd 2021 Annual Shareholders’ Meeting Agenda

III. Report Items

IV. Proposals

Motion 1: (Proposed by the Board)

Motion 2: (Proposed by the Board)

V. Questions & Motions

Adjournment

Fwusow Industry Co., Ltd 2020 Business Report

I. 2020 Business Report

1. Operating Performance

2. Finance Income and Costs and Profitability Analysis

4. Research and Development

II. 2021 Business Plan

1.Business Objectives

2. Operations Strategy:

3. Sales forecast and sales policy

III. Development Strategy and Policy

IV. The Impact of the External Competitive Environment, Regulatory Environment, and Macroeconomic Conditions

Appendix 2

Audit Committee’s Review Report

Fwusow Industry Co., Ltd

Appendix 3

Revision of Employees Code of Ethical Conduct Guidance

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Impairment of accounts receivable

Inventory evaluation

Other major accounting issue

Responsibilities of management and governance units for Parent Company Only financial statements

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

FWUSOW INDUSTRY CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

FWUSOW INDUSTRY CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

FWUSOW INDUSTRY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

FWUSOW INDUSTRY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

FWUSOW INDUSTRY CO., LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Thousands of New Taiwan Dollars)

（Brought forward）

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Property, plant and equipment impairment assessment

Impairment of accounts receivable

Inventory evaluation

Other Matter

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

FWUSOW INDUSTRY CO., LTD.

AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

FWUSOW INDUSTRY CO., LTD.

AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

FWUSOW INDUSTRY CO., LTD.

AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FWUSOW INDUSTRY CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars, except for earnings per share amounts)

FWUSOW INDUSTRY CO., LTD.

AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FWUSOW AGM Information 2021