FWUSOW - Annual Report 2021 | FinancialReports.eu

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FWUSOW INDUSTRY CO., LTD. and Subsidiaries

Consolidated Financial Statements for the Years Ended
December 31, 2021 and 2020 and Independent Auditors’Report

FWUSOW INDUSTRY CO., LTD. and Subsidiaries

Index to Financial Statements

Index to Financial Statements
1. Cover 2. Index 3. Representation Letter 4. Independent Auditors’ Report 5. Consolidated balance sheet 6. Consolidated Statements of Comprehensive Income 7. Consolidated Statements of Changes in Equity 8. Consolidated Statements of Cash Flows 9. Notes to the Consolidated Financial Statements	P A G E
	1 2 3 4-9 10-11 12 13 14-15 16-70

REPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of FWUSOW INDUSTRY CO., LTD. as of and for the year ended December 31, 2021, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10, “Consolidated Financial Statements.” In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, FWUSOW INDUSTRY CO., LTD. and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

FWUSOW INDUSTRY CO., LTD.

Yau Kuen Hung Chairman

March 21, 2022

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, 2021 and 2020, 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 and other auditors’ reports set forth in Major Accounting items, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2021 and 2020, 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, 2021.

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, 2021 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, 2021 was NTD 3,706,430 thousand, accounting for 40% 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 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 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.

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, the accountants assess the appropriateness of allowance for inventory devaluation losses.

Other Matter

Listed in Fushou Group’s consolidated financial statements in 2021, 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, 2021 and 2020 were NTD 228,550 thousand (the same below) and NTD 50,001 thousand, accounting for 2.50% and 0.58% of the total consolidated assets; NTD 273,109 thousand and NTD 0 thousand, accounting for 1.85% and 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 NTD276,418 thousand and NTD267,321 thousand respectively for the above-mentioned investee companies on December 31, 2021 and 2020, respectively, accounting for 3.02% of the total consolidated assets and 3.13%, and the total consolidated profit and loss recognized using the equity method in 2021 and 2020 in the Republic of China were 40,136 thousand and 40,069 thousand,

respectively, accounting for 14.38% and 7.06% 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 31,2021 and 2020 on which we have issued an unmodified opinion plus other matter paragraph.

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.

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 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.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2021 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 21, 2022

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)

*Year ended December 31*	*Year ended December 31*	*Year ended December 31*
*2021*	`％` 9.5 0.4 1.2 5.0 － 10.9 4.1 0.3 － 20.7 1.1 0.2 0.1 53.5 3.8 40.5 0.9 0.3 0.1 0.7 0.2 － 46.5 100.0	*2020*
*Amount* 870,863 $ 32,790 108,166 455,139 2,869 997,584 377,685 21,677 36 1,896,705 96,727 19,465 11,193 4,890,899 346,558 3,706,430 78,722 30,816 7,797 68,343 16,102 4,528 4,259,296 9,150,195 $		*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 $	`％`
			11.1 0.4 1.3 4.0 － 9.4 2.9 0.3 － 17.7 1.1 0.3 0.1
			48.6
			3.9 45.3 0.3 0.4 0.3 0.9 0.2 0.1
			51.4
			100.0

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

(With Solomon & Co., audit report dated March 21, 2022)

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*
*2021*	`％` 11.2 2.1 0.1 2.7 2.9 3.0 0.3 0.3 － 6.3 0.1 29.0 17.0 4.5 0.6 －－ 22.1 51.1 35.2 0.2 13.0 (0.1) (0.1) 48.2 0.7 48.9 100.0	*2020*
*Amount* 1,025,620 $ 189,909 11,689 242,916 269,906 275,138 24,984 25,486 1,862 573,394 5,045 2,645,949 1,554,001 416,032 53,348 4,266 2,422 2,030,069 4,676,018 3,220,139 14,358 1,191,180 (6,765) (6,735) 4,412,177 62,000 4,474,177 9,150,195 $		*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 $	`％`
			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

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

(With Solomon & Co., audit report dated March 21, 2022)

FWUSOW INDUSTRY CO., LTD.

AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

*2021*	*2020*
*Amount* 14,778,782 $ (13,413,278) (4,456) 1,361,048 (714,729) (319,394) (35,998) 11,785 (1,058,336) 302,712 3,348 30,857 499 (36,994) 53,315 51,025 353,737 (72,381) 281,356 (744) (620) 149 (1,170) 202 (2,183) 279,173 $ 322,817 $ (41,461) 281,356 $ 320,795 $ (41,622) 279,173 $ $	*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 $ $	`％`
		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

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

(With Solomon & Co., audit report dated March 21, 2022)

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

(Expressed in thousands of New Taiwan dollars)

*Shares*	*Capital* *Surplus*		*Equity attributable to owner*	*Equity attributable to owner*	*s of theparent*		*Treasury Stock*	*Non-* *controlling* *Interests*	*Total Equity*
			*Retained Earnings*		*Total* 704,042 $ －－ (128,805) 615,277 714 － 1,191,228 － (321,650) 322,817 (1,215) － 1,191,180 $	*Other equity interest*
		*Legal reserve*	*Special Reserve*	*Unappropriated* *Earnings* *(Accumulated* *Deficit)*		*Foreign Currency* *Translation Reserve*
3,220,139 $ －－－－－－	14,358 $ －－－－－－	246,604 $ － 20,399 －－－－	233,273 $ －－－－－－	224,165 $ － (20,399) (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 61,599 －－－－	233,273 －－－－－	690,952 (61,599) (321,650) 322,817 (1,215) －		(5,958) －－－ (807) －	(6,735) －－－－－	30,382 － (334) (41,461) (161) 73,574	4,443,414 － (321,984) 281,356 (2,183) 73,574
3,220,139 $	14,358 $	328,602 $	233,273 $	629,305 $		(6,765) $	(6,735) $	62,000 $	4,474,177 $

The accompanying notes are an integral part of the parent company only financial statements (With Solomon & Co., audit report dated March 21, 2022)

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 (gains) 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 Reversal of impairment loss recognized in profit or loss, non-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 paid Cash provided by (used in) operating activities	*2021* 353,737 $ 281,088 2,212 (11,785) 4,100 4,456 (442) 36,994 (353) (3,348) (53,315) 420 4,000 490 (687) － 10,432 (22) 3,486 277,726 (1,935) (113,069) (324,809) 13,783 (383,715) (11,007) 45,262 (2,263) 11,792 113,644 51,616 (31,546) 122 5,627 (89) (2,252) (628,839) (351,113) 2,624 918 31,392 (37,080) (103,315) (105,461)	*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

（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 in commercial paper payable Proceeds from long-term bank loans Repayment of long-term bank loans Cash dividends paid Increase (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	2021	2020
	419 (126,256) (17) － (1,280) (129) － 1,664 (125,599) 353,206 69,979 490,000 (482,377) (321,650) 9 (23,277) 73,240 － 159,130 (1,193) (73,123) 943,986 870,863 $	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 $

The accompanying notes are an integral part of the consolidated financial statements (With Solomon & Co., audit report dated March 21, 2022)

FWUSOW INDUSTRY CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

1. Organization

FWUSOW INDUSTRY CO., LTD. (the Company) was incorporated in February, 1955. Its shares were listed on Taiwan Stock Exchange (TSE) in December, 1990. FWUSOW INDUSTRY CO., LTD. and its subsidiaries (collectively referred to as the “Group” or the “Company”). The main operating activities of the Company are

I. Animal and vegetable oil refining and processing business.
II. Manufacturing, processing and trading of feed and general feed additives.
III. The breeding and processing business of livestock and poultry (except goat milk and mutton).
IV. Manufacturing, processing, and trading of processed agricultural foods, milled foods, and baked processed foods such as rice, beans, and wheat.
V. Canned food, frozen food, beverages, condiments (bonito flavor, chicken flavor), dairy products (except goat milk), sugar and sugar products and other food manufacturing, processing and trading business.
VI. Manufacturing, processing, and trading of organic fertilizers.
VII. Warehousing and labor transportation supply industry, refrigeration industry and supermarket operation
VIII.Warehousing industry.
IX. Meat slaughtering and processing industry

2. The Date and Procedure for the Authorization Of Financial Statements

The accompanying consolidated financial statements were approved and authorized for issue by the Board of Directors on March 21, 2022.

3. Application Of New And Revised International Financial Reporting Standards

A. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

The initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have a significant effect on the Company’s accounting policies.

B. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2022 are as follows:

from 2022 are as follows:
New IFRSs Annual Improvements to IFRS Standards 2018– 2020 Amendments to IFRS 3 “Reference to the Conceptual Framework” Amendments to IAS 16 “Property, Plant and Equipment - Proceeds before Intended Use” Amendments to IAS 37 “Onerous Contracts–Cost of Fulfilling a Contract”	Effective Date Announced byIASB
	January 1, 2022(Note 1) January 1, 2022(Note 2) January 1, 2022(Note 3) January 1, 2022(Note 4)

Note 1: The amendments to IFRS 9 will be applied to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IAS 41 “Agriculture” will be applied to the fair value measurements on or after the annual reporting periods beginning on or after January 1, 2022. The amendments to IFRS 1 “First-time Adoptions of IFRSs” will be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.

Note 2: The amendments are applicable to business acquisition after January 1, 2022.

Note 3: The amendments are applicable to property, plant and equipment that are expected to be operated by management on or after January 1, 2021.

Note 4: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

C. The IFRSs issued by IASB but not yet endorsed and issued into effect by the FSC

New IFRSs Effective Date Announced by IASB Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its To be determined by IASB Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IFRS 17 “Initial Application of January 1, 2023 IFRS 9 and IFRS 17 - Comparative Information” Amendments to IAS 1 “Classification of Liabilities January 1, 2022 as Current or Noncurrent” Amendments to IAS 1 “Disclosure of Accounting January 1, 2023(Note 2) Policies” Amendments to IAS 8 “Definition of Accounting January 1, 2023(Note 3) Estimates” Amendments to IAS 12 “Deferred Tax Related to January 1, 2023(Note 4) Assets and Liabilities arising from a Single Transaction”

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

Note 2: The amendments are applicable to postpone for the annual reporting period beginning after 1 January 2023.

Note 3: This amendment are applicable to changes in accounting estimates and changes in

accounting policies that occur during the annual reporting period commencing on 1 January 2023.

Note 4: Except for the recognition of deferred income tax on 1 January 2022 for temporary differences in lease and ex-duty obligations, the amendment are applicable to transactions occurring after 1 January 2022.

4. Summary Of Significant Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

I. Compliance statement

The accompanying consolidated financial statements have been prepared in conformity with the

Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed by the FSC with the effective dates (collectively, “Taiwan-IFRSs”).

II. Basis of Preparation

A. Measurement Bases

Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

(a) Financial instruments that are measured at fair values
(b) Biological assets measured at fair value less costs to sell.
(c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.
B. Functional Currency and Presentation Currency

The company uses the currency of the main economic environment in which it operates as its functional currency. The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional currency. All financial information expressed in New Taiwan Dollars are in units of New Taiwan Dollars Thousands.

III. Basis of Consolidation

A. The basis for the consolidated financial statements

The consolidated financial statements incorporate the financial statements of FWUSOW INDUSTRY CO., LTD. and entities controlled by FWUSOW INDUSTRY CO., LTD. (its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the shareholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing control over the subsidiaries are accounted for as equity transactions.

B. The subsidiaries in the consolidated financial statements

Name of Investor FWUSOW INDUSTRY CO., LTD. WONDERFUL INVESTMENT CO. ZILLION HOLDING CO.	Name of Investee FWUSOW NEW INDUSTRY CO., LTD. CHARMING FOOD INTERNATIONAL MARKETING CO., LTD. ZILLION HOLDING CO. WONDERFUL INVESTMENT CO. WANJISHENG AGRICULTURAL TECHNOLOGY CO., XIAMEN FWUSOW INDUSTRY CO., LTD. XIAMEN FWUSOW TRADING CO., LTD	Main Businesses and Products Leasing and Retail Trade Electric poultry slaughter, poultry meat processing, cutting, trading Investment holding company Investment holding company Livestock breeding, etc. Manufacturing and sales Buying and selling pet food, supplies, etc.	Percentage of	Ownership December 31, 2020 99.07% 72.75% 100.00% 85.70% 100.00%Note (1) 100.00% 100.00%
			December 31, 2021 99.07% 72.75% 100.00% 85.70% 100.00% 100.00% 100.00%

Note 1 ： The company invested in the establishment of WANJISHENG AGRICULTURAL TECHNOLOGY CO., in December 2020, with the main purpose of vertical integration of the group's business, which has been approved by the competent authority.

IV. Foreign Currency

A. Foreign currency transaction

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are

remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise. Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

B. Translation of foreign operations

Assets and liabilities of foreign operations, including the goodwill and fair value adjustment generated at the time of acquisition, shall be converted into the presentation currency of the parent company only financial statements on the reporting date. Income and expenses are converted into presentation currency of the parent company only financial statements at the average exchange rate in the current period, and the exchange different generated therefore shall be stated as other comprehensive profit or loss.

When the disposal of a foreign operation causing a loss of control, loss of joint control, or significant influence, the cumulative exchange difference related to the foreign operation is entirely reclassified as profit or loss. If the disposal involves any subsidiary of the foreign operations, the relevant accumulated exchange difference shall be reclassified into the non-controlling interests on a pro rata basis. If the disposal involves any affiliate or joint venture of the foreign operations, the relevant accumulated exchange difference shall be reclassified into income or loss on a pro rata basis.

If no repayment program is defined with respect to monetary item receivable or payable of the foreign operations and it is impossible to settle in the foreseeable future, the foreign currency exchange gain or loss generated therefor shall be held as a part of the net

investment of the foreign operations and recognized as other comprehensive profit or loss.

V. Classification of current and non-current items

Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

(a) Assets held mainly for trading purposes;
(b) Assets that are expected to be realized within twelve months from the balance sheet date;
(c) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

Liability that meet one of the following criteria are classified as current liability; otherwise they are classified as non-current liability:

(a) Liabilities arising mainly from trading activities;
(b) Liabilities that are to be settled within twelve months from the balance sheet date;
(c) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

VI. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Time deposits with maturities less than 3 months and held for the purpose of meeting short-term cash commitments rather than for investment or other purpose are classified as cash equivalents.

VII. Financial Instruments

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

Financial assets and liabilities are initially recognized at fair value with transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities, when the financial assets and liabilities are not measured at fair value but through profit or loss.

Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

A. Financial Assets

Measurement category

On regular way purchases or sales of financial assets, the derivate are recognized and derecognized on settlement date basis, the other financial assets are recognized and derecognized on trade date basis.

Financial assets held by the Company are classified into financial assets at fair value through profit or loss and financial assets at amortized cost.

(1) Financial assets at fair value through profit or loss (Financial asset at FVTPL)

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

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any dividend or interest earned on the financial asset. Fair value is determined in the manner described in Note 6(22).

(2) Financial assets at amortized cost

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

(a) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
(b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Subsequent to initial recognition, financial assets at amortized cost, including cash and
cash equivalents, and trade receivables at amortized cost, are measured at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for:

(a) For purchased or created credit-impaired financial assets, interest income is calculated by multiplying the credit-adjusted effective interest rate by the amortized cost of the financial asset.
(b) For financial assets that are not purchased or initiated credit impairment, but subsequently become credit impairment, interest income is calculated by multiplying the effective interest rate by the cost of financial assets amortization.

Impairment of financial assets

The company assesses financial assets (including accounts receivable) measured at amortized cost based on expected credit losses on each balance sheet date.

Accounts receivable shall be recognized as an allowance loss based on the expected credit loss during the duration. For other financial assets, first assess whether there is a significant increase in credit risk since the initial recognition. If there is no significant increase, the allowance loss is recognized based on the 12-month expected credit loss; if it has increased significantly, it is recognized based on the duration of the expected credit loss Allowance for losses.

Expected credit loss is the weighted average credit loss based on the risk of default. The 12-month expected credit loss refers to the expected credit loss caused by the possible default

event of the financial instrument within 12 months after the reporting date, and the lifetime expected credit loss represents the expected credit loss caused by all possible default events during the expected lifetime of the financial instrument.

The impairment loss of all financial assets is reduced by the allowance account.

B. Financial liabilities and equity instruments
(1) Classification of liabilities or equity

The debt and equity instruments issued by the company are classified as financial liabilities or equity based on the substance of the contractual agreement and the definition of financial liabilities and equity instruments.

An equity instrument refers to any contract that recognizes the remaining equity of the company after deducting all its liabilities from its assets.

The equity instruments issued by the company are recognized at the amount obtained after deducting the cost of direct issuance.

Interests and losses or benefits related to financial liabilities are recognized as profit and loss and listed under non-operating income and expenses.

Financial liabilities are reclassified into equity at the time of conversion, and the conversion does not generate profit or loss.

(2) Financial liabilities measured at fair value through profit and loss

Such financial liabilities are measured at fair value at the time of initial recognition, and transaction costs are recognized as profit or loss when incurred; subsequent evaluations are measured at fair value, and then the resulting benefits or losses (including related interest expenses) are recognized as profit or loss. It is also reported under non-operating income and expenses.

(3) Other financial liabilities

Financial liabilities are not held for trading and are not designated as those measured at fair value through profit and loss (including long-term and short-term borrowings, accounts payable and other payables). The original recognition is measured at fair value plus directly attributable transaction costs; The subsequent evaluation adopts the effective interest rate method to measure the cost after amortization. Interest expenses that have not been capitalized as the cost of assets are reported under non-operating income and expenses.

(4) Derecognition of financial liabilities

The company derecognizes financial liabilities when contractual obligations have been fulfilled, cancelled or expired.

When derecognizing financial liabilities, the difference between the book value and the total consideration paid or payable (including any transferred non-cash assets or liabilities) is recognized as gain and loss which is reported under non-operating income and expenses.

(5) Mutual offset of financial assets and liabilities

Financial assets and financial liabilities are only offset when the company has the statutory right to offset and intend to settle on a net amount or to realize assets and settle liabilities at the same time, and then financial assets and liabilities are offset and expressed on the balance sheet as a net amount.

VIII. Inventories

Inventories are stated at the lower of cost or net realizable value. When comparing lower of cost and net realizable value, except for the comparison of same inventory, it shall be made item by item. The cost of inventories, using weighted average method, includes expenditures incurred in acquiring the inventories, production cost and other costs incurred in bringing them to their existing location and condition. The cost of finished goods and work in process will be allocated production costs based on normal production. Net realized value is the estimated by the difference of the selling price in the ordinary course of business and the estimated cost of completion and applicable variable selling expenses.

IX. Biological assets

Biological assets are initially recognized and measured at their fair value less costs to sell at each report date. The selling cost means that any additional cost can be directly attributed to the disposal assets except for the financial cost and income tax. Gains or losses from initial recognition of biological assets and subsequent changes in fair value less costs to sell are recognized profit or loss in current period.

X. Investment in related enterprises

Affiliated company refers to the company that has significant influence on its financial and operating policies but has not reached the control capacity. When the company holds 20% to 50% of the voting rights of the invested company, it is assumed to have significant influence. Under the equity method, the original acquisition is recognized based on cost, and investment costs include transaction costs. The book value of the investment in the related company includes the goodwill identified at the time of the original investment, minus any accumulated impairment losses.

The individual financial report includes from the date of significant influence to the date of loss of significant influence. After making adjustments to the company’s accounting policy consistency, the company recognizes the profit and loss of each investment related company and other related companies based on the proportion of equity. The amount of comprehensive profit and loss.

Unrealized benefits arising from transactions between the company and affiliated companies have been eliminated within the scope of the company's equity in the investee company. The method of eliminating unrealized losses is the same as that of unrealized benefits, but only when there is no evidence of impairment.

When the company shall recognize the loss of the affiliated company in proportion to or exceed its equity in the affiliated company, it shall stop recognizing its losses, and only when legal obligations, constructive obligations or payments have been made on behalf of the invested company have occurred. Within the scope, additional losses and related liabilities are recognized.

XI. Property, Plant and Equipment

A. Recognition and Measurement

Property, plant and equipment are measured at cost less accumulated depreciation and impairment. Cost includes expenditures that can be directly attributable to the acquisition of assets. The cost of self-built assets includes raw materials and direct labor, any cost to bring the asset to the usable state for its intended use, the cost of dismantling and removing and restoring the location, and the borrowing cost of the capitalized assets that meet the requirements. The software purchased to integrate the functions of the related equipment is also capitalized as part of the equipment.

When property, plant and equipment are in different categories and the difference is significant to the total cost, it would be appropriate to adopt different depreciation rate or method as separate item.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in net profit or loss in other income or loss.

B. Subsequent cost

Subsequent expenditure is capitalized, only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the expenditure can be measured reliably. The carrying amount of the replacement is derecognized. Ongoing repairs and maintenance are expensed when incurred.

C. Depreciation

The property, plant and equipment were depreciated on straight-line basis over the estimated useful life. Depreciation of property, plant and equipment is evaluated by major identical category. Only when the useful lives of the assets in that category are different from the rest. Thus that different category shall be depreciated separately. Depreciation is recognized as profit or loss.

Land is not depreciated.

The estimated useful lives of property, plant and equipment in current and comparative period are as follows:

～
(1)Buildings 3 50 years
～
(2)Machinery and equipment 3 25 years
～
(3)Transportation equipment 3 12 years
～
(4)Office and Other equipment 3 40 years
(5)Leased assets 16 years

The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If the expected value is different from original estimation, it will be adjusted appropriately when necessary. Such adjustment shall be accounted for a change in accounting estimation.

XII. Intangible assets

The computer software is recorded based on the acquisition cost, and the subsequent measurement is processed according to the cost model. After the initial recognition, the amortization expense is calculated based on the amortizable amount, and the amortization expense is averaged for 3-16 years from the month of acquisition.

XIII. Lease

The company assesses whether the contract belongs to (or includes) a lease on the date of contract establishment.

A. The company is the lessor

When the lease clause transfers almost all the risks and rewards attached to the ownership of the asset to the lessee, it is classified as a financial lease. All other leases are classified as operating leases.

Under finance leases, lease payments include fixed payments and variable lease payments that depend on an index or rate. The net lease investment is measured by the sum of the present value of the lease payment receivable and the unguaranteed residual value plus the original direct cost and expressed as a financial lease receivable. Finance income is allocated to each accounting period to reflect the fixed rate of return that the combined company's unexpired net lease investment can obtain in each period.

Under operating leases, lease payments after deducting lease incentives are recognized as income on a straight-line basis during the relevant lease period. The original direct cost incurred in obtaining an operating lease is added to the book value of the underlying asset and recognized as an expense during the lease period on a straight-line basis.

B. The company is the lessee

Except for the lease payments of low-value underlying asset leases and short-term leases that are subject to the applicable recognition exemption, the lease payments are recognized as expenses on a straight-line basis during the lease period, and other leases are recognized as right-of-use assets and lease liabilities on the lease start date.

The right-of-use asset is initially measured at cost (including the original measured amount

of the lease liability and the lease payment paid before the lease start date), and subsequently measured at the cost after deducting accumulated depreciation and accumulated impairment losses, and the remeasured amount of the lease liability is adjusted. Right-of-use assets are separately expressed on the balance sheet.

Right-of-use assets are depreciated on a straight-line basis from the lease start date to the end of the service life or the expiration of the lease term, whichever is earlier.

Lease liabilities were originally measured by the present value of lease payments (including fixed payments and substantive fixed payments). If the implicit interest rate of the lease is easy to determine, the lease payment is discounted using that interest rate. If the interest rate is not easy to determine, use the lessee's incremental borrowing interest rate.

Subsequently, the lease liability is measured on the amortized cost basis using the effective interest method, and the interest expense is amortized during the lease period. If changes in the lease period lead to changes in future lease payments, the company will re-measure the lease liabilities and relatively adjust the right-of-use asset. However, if the book value of the right-of-use asset has been reduced to zero, the remaining remeasured amount is recognized in profit and loss. Lease liabilities are separately expressed on the balance sheet.

The variable rent in the lease agreement that is not dependent on the index or rate is recognized as an expense in the period in which it occurs.

XIV. Impairment of Non-financial Assets

The Company measures whether impairment occurred in non-financial assets, except for inventories, deferred income tax assets, employee benefits and biological assets at the end of every reporting date, and estimates the recoverable amount. If it is not possible to determine the recoverable amount (fair value less cost to sell and value in use) for the individual asset, then the Company will evaluate the impairment based on the recoverable amount from the asset’s cash-generating unit.

The recoverable amount is determined by the higher value of an individual asset or a cash-generating unit less costs to sell or its value in use. If, and only if, the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset shall be reduced to its recoverable amount and recognized an impairment loss. An impairment loss shall be recognized immediately in current period.

The Company should assess at the end of each reporting period whether there is any indication that an impairment loss recognized in prior periods for an asset other than

goodwill may no longer exist or may have decreased. If any such indication exists, the entity shall estimate the recoverable amount of that asset. An impairment loss recognized in prior periods for an asset other than goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized. If this is the case, the carrying amount of the asset shall be increased to its recoverable amount. That increase is a reversal of an impairment loss. An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Regarding inventory, deferred income tax assets, assets generated from employee benefits, and non-financial assets other than biological assets, the company assesses whether impairment has occurred at the end of each reporting period, and estimates the recoverable amount of assets with signs of impairment. If the recoverable amount of an individual asset cannot be estimated, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs to assess the impairment.

XV. Treasury Stock

The Company acquires its outstanding shares, the acquisition cost is debited to the treasury stock account (including any directly attributable costs). When treasury stock is sold, the excess of the selling price over the carrying amount is credited to the capital surplus from treasury stock transactions account. If the carrying amount exceeds the selling price, the excess is first offset against capital surplus from the same class of treasury stock transactions, and the remainder, if any, is debited to retained earnings. The carrying amount of treasury stock is calculated by using the weighted-average approach according to the same class of treasury stock (common stock or preferred stock).

When the Company's treasury stock is the capital surplus - premium on stock account and capital stock account should be debited proportionately according to the share ratio. The carrying value of treasury stock in excess of the sum of its par value and premium on stock should first be offset against capital surplus from the same class of treasury stock transactions, and the remainder, if any, debited to retained earnings. The sum of the par value and premium on treasury stock in excess of its carrying value should be credited to capital surplus from the same class of treasury stock transactions.

XVI. Revenue recognition

A. Sales of goods
(1) The Company manufactures and sells animal feeds, cooking oil, agricultural livestock products and related consumer food. Sales are recognized when control of the products has transferred, which also means that the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customers, and either the customers have accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.
(2) Revenue from sales of goods is recognized based on the price specified in the contract, net of the estimated volume discounts, sales discounts and allowances. The volume discount or sales allowance is usually offered by client’s purchase volume. Based on historical experience of sales discounts offered, revenue is only recognized to the extent that it is highly probable that no significant reversal will occur. The estimation is reassessed at each reporting date. The credit term of 30 to 60 days after shipment is consistent with market practice, which is deemed not involved major financial arrangement in the sales contracts. The down payment receiving from selling products is deemed as contractual liability to fulfill the Company’s obligation.
(3) A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

B. Financing components

The contract between the Company and client is the obligation to transfer goods or services to the client and payment term is within one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

XVII. Employee benefits

A. Defined contribution plans

Obligations for contributions to defined contribution plans are recognized as pension expense in the period when employees render service.

B. Defined benefit plans

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the Projected Unit Credit Method. Service cost (including current service cost) and net interest on the net defined benefit liability (asset) are recognized as employee benefit expense in the period they occur. Remeasurement, comprising actuarial gains and losses, and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liability (asset) represents the actual deficit (surplus) in the Company’s defined benefit plan. Net defined benefit asset is recognized to the extent of a contribution refund to the plan or deduction in future payments.

C. Short-term employee benefits

Short-term employee benefits are expensed at the undiscounted amount in exchange for service rendered by employees. A liability is reliably estimated and recognized for the amount of short-term cash bonus or employee dividend plan expected to be paid when the Company has a present legal or constructive obligation as a result of past service provided by the employee.

XVIII. Income taxes

Income taxes comprise current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for

the year, and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases. Deferred taxes are recognized except for the following:

A. temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
B. temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
C. taxable temporary differences arising on the initial recognition of goodwill.
Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

A. the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
B. the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:
(1) The same taxable entity; or
(2) Different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable

profits improves.

XIX. Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share are calculated as the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding. Diluted earnings per share are calculated as the profit attributable to ordinary shareholders of the Company, divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares, such as employee bonus.

XX. Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of the consolidated financial statements in conformity with “International Financial Reporting Standards by The Financial Supervisory Commission” requires management to make judgments, estimations and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimations.

The Group has considered the economic implications of COVID-19 on critical accounting estimates and will continue evaluating the impact on its financial position and financial performance as a result of the pandemic. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimate is revised if the revision affects only that year, or in the year of the revision and future years if the revision affects both current and future years. The following are the key

assumptions concerning the future, and other key sources of estimation ：

，
1. Note 6(5) Assessment of impairment of accounts receivable
，
1. Note 6(6) Valuation of Inventory
，
1. Note 6(8) Assessment of impairment of property, plant and equipment
Note 6(13) ， Measurement of net definite benefit liabilities
Note 6(14) ， Realization of Deferred Income Tax Assets 。

6. Details of Significant Accounts

(1) Cash and cash equivalents

	December 31,2021	December 31,2020
Cash on hand	$ 1,465	$ 1,463
Checking accounts	5,829	5,392
Demand deposits	841,173	920,253
Foreign currency deposit	22,396	16,878
	$870,863	$ 943,986
Other current assets
	December 31,2021	December 31,2020
Time deposits (the original expiry date is
more than three months)	$ 8,551	$ 8,608
Restricted deposit	－	188
	$8,551	$8,796
Interest rate risk and sensitivity analysis details of the consol Group’s		financial asset and liability in
Note 6(22)

(2) Current financial asset and liability at fair value through profit or loss

Listed OTC stock and fund Unquoted shares Open-end fund Adjustments for change	December 31,2021 $ 4,849 83,373 28,247 (83,679) $32,790	December 31,2020 $ 9,160 83,373 21,930 (84,121) $30,342

(3) Financial assets amortized cost

(3)Financial assets amortized cost
Bank debenture Interest rate range Maturity year (4)Notes receivable Notes receivable Less: Loss allowance	December 31,2021 $108,166 2.45% 2022.1 December 31,2021 $ 455,397 (258 ) $455,139	December 31,2020 $109,649 1.11% 2021.4 December 31,2020 $ 345,169 (230 ) $344,939

(5) Accounts receivable (including overdue receivables)

Current: Accounts receivable Less: Loss allowance	December 31,2021 $ 1,001,684 (4,100 ) $ 997,584	December 31,2020 $ 815,051 (9,207 ) $805,844

Non-current： overdue receivables Less: Loss allowance	December 31,2021 $ 15,369 (15,369 ) $－	December 31,2020 $ 25,597 (25,597 ) $－

The average credit period for sales of goods was 30-60 days. No interest was charged on accounts receivable. In determining the recoverability of a trade receivable, the Group considered any change in the credit quality of the trade receivable since the date credit was initially granted to the end of the reporting period. The group will first review the credit rating of customers for new transactions, and obtain sufficient guarantees if necessary to reduce the risk of financial losses due to defaults. The group will use other publicly available financial information and historical transaction records to rate major customers. The Group’s credit exposures and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty credit limit that are reviewed and approved by the accounting department annually.

In order to minimize credit risk, the management of the Group has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is

made for possible irrecoverable amounts. In this regard, the management believes the Group’s credit risk was significantly reduced.

。 The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on accounts receivable are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date. The Group estimates expected credit losses based on past due days. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished between the Group’s different customer base.

The Group writes off accounts receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For accounts receivable that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of accounts receivable based on the Group’s provision matrix.

December 31, 2021

Expected Credit Loss Carrying amount lifetime expected credit losses Amortized cost December 31, 2020 Expected Credit Loss Carrying amount lifetime expected credit losses Amortized cost	Current 0%~3% $1 ,802,513 (2,183 ) $ 1,800,330 Current 0%~0.2% $1 ,212,258 (5,496 ) $ 1,206,762	1 to 30 days 0%~30% $ 25,068 (696 ) $ 24,372 1 to 30 days 0%~10% $ 161,887 (213 ) $ 161,674	31 to 60 days 0%~66% $ 9,018 (511 ) $ 8,507 31 to 60 days 0%~50% $ 23,378 (2,296 ) $ 21,082	61 to 120 days 0%~100% $ 1,418 (1,350 ) $ 68 61 to 120 days 0%~100% $ 7,702 (1,814 ) $ 5,888	Over 120 days 100% $ 15,369 (15,369 ) $－ Over 120 days 100% $ 25,597 (25,597 ) $－	Total $1,853,386 (20,109 ) $1,833,277 Total $1,430,822 (35,416 ) $1,395,406

Change information of loss allowance：

Opening balance Overdue credit impairment loss Non recoverable receivable Effect of exchange rate changes Ending balance (6) Inventories Raw materials Materials Semi-manufactures Manufactures Commodity Inventory in transit - materials Less: allowance for inventory write-down Net inventories	2021 $ 35,416 (11,785 ) (3,443 ) (79 ) $20,109 December 31,2021 $ 416,287 66,472 28,551 569,850 7,030 848,425 1,936,615 (39,910) $1,896,705	2020 $ 31,837 9,754 (6,175 ) `－` $35,416 December 31,2020 $ 612,616 54,271 25,642 464,948 4,475 390,948 1,552,900 (35,810) $1,517,090

The cost of inventories recognized as expense for the year:

Cost of goods sold Costs of conversion Loss on decline in market value Net loss on physical inventory Income from disposal of leftover and scraps Others	2021 $ 13,367,364 2,965 4,100 28,280 (749 ) 11,318 $13,413,278	2020 $ 10,943,524 3,082 (20,555 ) 28,125 (914 ) 21,401 $10,974,663

Write-down of inventories to net realizable value and reversal of write-down of inventories resulting

from the increase in net realizable value were included in the cost of revenue, as illustrated below:

Inventory losses (reversal of write-down of inventories)	2021 $ (4,100 )	2020 $20,555

As of December 31, 2021 and 2020, the Group's inventories were not provided as pledged assets.

(7) Investments accounted for under equity method

Details of investments accounted for using equity method-subsidiaries are provided as follows:

Investee CENTRAL UNION OIL CORP. CHIATON INTERNATIONAL CO., LTD.	December 31, 2021 Carrying amount Share holding ratio % $ 276,418 32.33 70,140 37.50 $346,558	December 31, 2020 Carrying amount Share holding ratio % $ 267,321 32.33 64,706 37.50 $332,027

The Group’s investments accounted for its subsidiaries were unquoted.
Details of Share of Profit or Loss of Joint Ventures Accounted:

The Group's share of the net profit of the associated companies for the current period The group's share of other comprehensive profits and losses of associated companies	2021 $53,315 $ (620 )	2020 $51,095 $1,600

Details of financial information of Joint Ventures Accounted:

Total assets Total liability Net assets	December 31,2021 $ 3,249,718 2,207,735 $1,041,983	December 31,2020 $ 2,955,556 1,956,200 $ 999,356

Revenues Net profit Share of profit (loss) of associates and joint ventures accounted for using equity method	2021 $10,571,559 $159,543 $ (1,916 )	2020 $7,542,697 $152,652 $4,948

The financial information is not adjusted according to the percentage of ownership.

The investment gains and losses recognized by the equity method in 2021 and 2020 were calculated based on the financial statements of the investee company verified by accountants.

As of December 31, 2021 and 2020, the Group did not provide any investment accounted for using equity method as collaterals for its loans.

(8) Property, plant and equipment

1. Capitalization amount and interest rate range of borrowing costs for property, plant and equipment:

Capitalization amount Capitalization interest rate	2021 $ 393 1.03%	2020
		$－
		－

2. Details of property, plant and equipment

Cost： At January 1, 2021 Additions Reclassifications Disposals December 31, 2021 At January 1, 2020 Additions Reclassifications Disposals December 31, 2020 Accumulated depreciation and impairment At January 1, 2021 Additions Gain on reversal of impairment loss Disposals At December 31, 2021 At January 1, 2020 Additions Gain on reversal of impairment loss Disposals At December 31, 2020 Book Value: December 31, 2021 December 31, 2020	Land $ 1,450,919 － 4,000 － $1,454,919 $ 1,489,953 4,229 17,850 (61,113 ) $1,450,919 $ (26,643 ) `－` `－` － $ (26,643 ) $ (26,643 ) `－` `－` － $ (26,643 ) $1,428,276 $1,424,276	Buildings $ 2,539,246 4,644 8,676 (647 ) $2,551,919 $ 2,470,035 6,132 63,079 － $2,539,246 $ (1,385,280 ) (90,005 ) `－` 646 $ (1,474,639 ) $ (1,294,396 ) (90,884 ) `－` － $ (1,385,280 ) $1,077,280 $1,153,966	Machinery and Equipment $ 2,924,883 8,746 21,027 (1,311 ) $2,953,345 $ 2,853,171 9,626 69,138 (7,052 ) $2,924,883 $ (1,851,818 ) (99,666 ) (4,000 ) 1,277 $ (1,954,207 ) $ (1,746,352 ) (110,453 ) `－` 4,987 $ (1,851,818 ) $999,138 $1,073,065	Transportation equipment $ 125,561 4,218 663 (7,164 ) $123,278 $ 126,286 2,288 2,623 (5,636 ) $125,561 $ (100,465 ) (8,230 ) `－` 7,105 $ (101,590 ) $ (95,584 ) (9,591 ) `－` 4,710 $ (100,465 ) $21,688 $25,096	Other equipment $ 334,579 24,892 21,980 (4,355 ) $377,096 $ 298,753 5,492 32,506 (2,172 ) $334,579 $ (191,962 ) (41,539 ) `－` 3,612 $ (229,889 ) $ (170,460 ) (23,617 ) `－` 2,115 $ (191,962 ) $147,207 $142,617	Construction in progress and equipment to be inspected $ 58,027 69,985 (95,171 ) － $32,841 $ 91,866 166,365 (200,204 ) － $58,027 $`－` － `－` － $`－` $`－` － `－` － $`－` $32,841 $58,027	Total $ 7,433,215 112,485 (38,825 ) (13,477 ) $7,493,398 $ 7,330,064 194,132 (15,008 ) (75,973 ) $7,433,215 $ (3,556,168 ) (239,440 ) (4,000 ) 12,640 $ (3,786,968 ) $ (3,333,435 ) (234,545 ) `－` 11,812 $ (3,556,168 ) $3,706,430 $3,877,047

The consolidated Company recognized a loss of $4,000 in 2021 for the reduction in future cash inflows of machinery and equipment producing the product, resulting in a recoverable amount less than the book amount. The consolidated Company uses the use value as the recoverable amount of this machinery and equipment, and the discount rate adopted is 1.35% of the weighted average cost of funds. The loss of impairment has been shown under other income and loss of expense in the consolidated income statement.
The land and building in Zhuzi Douliu City, Yunlin County owned by the Company was in agriculture and animal husbandry category, which was registered under personal name. The Company had agreement to pledge the property to the Company as collateral.
The information about the property, plant and equipment is pledged as collateral is disclosed in Note8.

(9)Lease arrangements

(a)Right-of-use assets

Cost`：` Balance at January 1, 2021 Addition Lease Modifying Balance at December 31, 2021 Accumulated depreciation and impairment: Balance at January 1, 2021 Depreciation Decrease Balance at December 31, 2021 Book value: Balance at December 31, 2021	Land $ 13,599 － (1,060 ) $12,539 $ (3,342 ) (1,585 ) 258 $ (4,669 ) $7,870	Building $ 3,878 7,474 － $11,352 $ (1,331 ) (1,608 ) `－` $ (2,939 ) $8,413	Machinery and Equipment $ 3,303 `－` `－` $3,303 $ (1,618 ) (809 ) `－` $ (2,427 ) $876	Transportation equipment $ 23,063 69,372 (3,306 ) $89,129 $ (11,137 ) (19,735 ) 3,306 $ (27,566 ) $61,563	Total $ 43,843 76,846 (4,366 ) $116,323 $ (17,428 ) (23,737 ) 3,564 $ (37,601 ) $78,722

Cost`：` Balance at January 1, 2020 Addition Lease Modifying Balance at December 31, 2020 Accumulated depreciation and impairment: Balance at January 1, 2020 Depreciation Decrease Balance at December 31, 2020 Book value: Balance at December 31, 2020	Land $ 13,847 － (248 ) $13,599 $ (1,790 ) (1,789 ) 237 $ (3,342 ) $10,258	Building $ 13,194 － (9,316 ) $3,878 $ (2,548 ) (1,783 ) 3,000 $ (1,331 ) $2,546	Machinery and Equipment $ 3,303 `－` `－` $3,303 $ (809 ) (809 ) `－` $ (1,618 ) $1,685	Transportation equipment $ 25,856 2,667 (5,460 ) $23,063 $ (9,177 ) (7,419 ) 5,459 $ (11,137 ) $11,927	Total $ 56,200 2,667 (15,024 ) $43,843 $ (14,324 ) (11,800 ) 8,696 $ (17,428 ) $26,415

For the years ended December 31, 2021 and 2020, the Company did not undergo major sub-leases and impairments.

(b)Lease liabilities

Book value of lease liabilities current non-current	December 31,2021 $25,486 $53,348	December 31,2020 $7,189 $ 18,900

Discount rate for lease liabilities under the Group's 2021 is 1.03%~1.36% and 2020 is 1.21%～1.88%.

(c)Material lease-in activities and terms

The Group leases buildings for the use of warehouse and offices with lease terms of 1 to 9 years. The

Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of

the lease terms. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor’s consent.

(d)Other lease information

Expenses relating to short-term leases Low-value asset lease expenses Expenses relating to variable lease payments not included in the measurement of lease liabilities Total cash (outflow) for leases	2021 $3,762 $27 $17,911 $46,677	2020 $13,784 $1,297 $11,304 $44,208

The Group applies the recognition exemption to leases of transportation equipment qualifying as

short-term leases and certain photocopier qualifying as low-value asset leases and does not recognize

right-of-use assets and lease liabilities for these leases.

(10) Intangible assets

December 31, 2021

Project Cost Software $ 50,528 December 31, 2020 Project Cost Software $ 39,411	Additions $2,302 Additions $11,117	Amortization $ (6,230) Amortization $ (5,275)	Accumulated amortization $ (22,014) Accumulated amortization $ (15,784)	Carrying amounts $ 30,816 Carrying amounts $ 34,744

(11)SHORT-TERM LOANS

(a) Short-term borrowings

Nature of loan Bank loans Purchase loans Credit loans Nature of loan Bank loans Purchase loans Credit loans	December 31, 2021 $ 220,620 805,000 $1,025,620 December 31, 2020 $ 92,414 580,000 $672,414	interest rates range from 0.76%～0.99% 0.90%～1.45% interest rates range from 0.78%～1.10% 0.90%～1.45%	Maturity year 2022.02～2022.08 2022.01 ~ 2022.09 Maturity year 2021.03～2021.06 2021.01 ~ 2021.10	Collateral NONE NONE Collateral NONE NONE

(b) Short-term commercial paper payable

	December 31,2021 December 31,	2020,
Commercial paper payable	$ 190,000 $ 120,000
Discount	(91 )	(70 )
	$189,909 $119,930
Interest rate range	0.89%~1.30% 1.30%
Maturity year	2022.01~2022.02 2021.01

Short-term commercial paper payable pledged as collateral are set out in Note 8.
The above short-term bills payable are guaranteed by financial institutions.

(12)Long-term loans

Collateralize loans Credit loans Less:Current portion of long-term loans payable Long-term debt payable Interest rate range Maturity year Unspent amount	December 31,2021 $ 778,803 1,348,592 (573,394 ) $1,554,001 0.88%～1.61% 2026.2～2039.8 $742,000	December 31,2020 $ 911,966 1,207,806 (463,816 ) $1,655,956 0.88%～1.61% 2021.6～2039.8 $1,387,000

(13)Plan of post-retirement benefits

A. Defined benefit plans

Total present value of obligations Fair value of project assets Recognized definite benefit obligation liabilities	December 31,2021 $ 15,212 (10,946 ) $4,266	December 31,2020 $ 14,929 (9,155 ) $5,774

The Group's employee retirement plan based on the Labor Standards Law is a definite benefit plan. According to the plan, a monthly retirement reserve fund is allocated at 10% of the total salary of the employees, which is managed by the Labor Retirement Reserve Supervision Committee, and deposited in the special retirement reserve account of the Trust Department of Bank of Taiwan in the name of the committee. The retirement payment of each employee subject to the Labor Standards Law is calculated based on the base number of years of service and the average salary of the six months before retirement.

(a)Statement of changes present value of a defined benefit obligation

present value of a defined benefit employee benefits expense Current service cost and interest Recognition of other comprehensive income present value of a defined benefit	2021 2020 $ 14,929 $ 13,566 (636 ) － 74 119 845 1,244 $15,212$14,929

(b)Composition of project asset composition

The retirement fund allocated by the group in accordance with the Labor Standards Law is coordinated and managed by the Labor Retirement Fund Supervisory Committee of the Labor Committee of the Executive Yuan. According to the provisions of the "Labor Retirement Fund Revenue and Expenditure and Utilization Measures", the use of the fund and its annual final accounting distribution of the lowest income, shall not be lower than the income calculated based on the two-year fixed deposit interest rate of the local bank.

Details of employee benefit plan bank account:

Fair value of planned assets at the beginning of the period Allocated amount Interest income Plan asset payment Plan asset return Fair value of plan assets at the end of the period	2021 2020 $ 9,155 $ 6,754 2,274 2,191 51 74 (636 ) － 102 136 $10,946 $9,155

(c)Recognition as an profit and loss

Current service cost Interest cost Interest income Employee retirement benefits	2021 $－ 74 (51 ) $23	2020 $－ 119 (74 ) $45

(d)Actuarial gains and losses recognized as other comprehensive gains and losses (before tax)

Accumulated balance on January 1 Current Accumulated balance on December 31	2021 $ 159,074 744 $159,818	2020 $ 157,966 1,108 $159,074

(e) Actuarial assumptions

The Group is exposed to the following risks due to the pension system of the "Labor Standards Law":

1). Investment risk: The Labor Fund Utilization Bureau of the Ministry of Labor invests labor retirement funds in domestic (foreign) equity securities, debt securities, and bank deposits through its own use and entrusted operations, but the group’s planned assets can be allocated to

the amount of The income calculated based on the interest rate not lower than the local bank's 2-year fixed deposit rate.

2). Interest rate risk: The decline in the interest rate of government bonds will increase the present value of defined welfare obligations, but the return on debt investment of planned assets will also increase, and the impact of the two on the net defined welfare liabilities will partially offset the effect.
3). Salary risk: The calculation to determine the present value of the benefit obligation refers to the future salary of the plan members. Therefore, the increase in the salary of the plan members will increase the present value of the determined benefit obligation.

The present value of the group's determined welfare obligations is actuarially calculated by qualified actuaries. The major assumptions on the measurement date are as follows:

Discount rate Expected salary increase rate	2021 0.75% 2.25%	2020 0.50% 2.00%

(f)When calculating and determining the present value of welfare obligations, the group must use judgments and estimates to determine relevant actuarial assumptions on the balance sheet date, including employee turnover rates and future salary changes. Any change in actuarial assumptions may materially affect the amount of the group's determined welfare obligations.

Assuming that the discount rate changes by 0.25%, there will be the following effects:

Net defined benefit liability Net defined benefit liability	2021 Increase Decrease $494 $ (517 ) 2020 Increase Decrease $490 $ (514 )
	Increase $490

The group expects to allocate 2,400 thousand dollar to the determined benefit plan within one year after December 31, 2021.

B. Defined contribution plans

The group's definite allocation plan is based on the labor pension regulations, and is allocated to the labor insurance bureau's labor pension individual account at a rate of 6% of the labor's monthly salary.

After the fixed amount is allocated to the Labor Insurance Bureau under this plan, there is no statutory or constructive obligation to pay additional amounts.

The pension expenses under the Group's 2021 and 2020 pension plans are 24,689 thousand dollar and

23,074 thousand dollar respectively, which have been transferred to the Labor Insurance Bureau.

(14)Income tax

1. Income tax expense recognized in profit or loss：

Income tax expense calculated at the statutory rate Amount of tax impact of income tax adjustment items Permanent differences Temporary differences Effect of loss carryforwards Adjustments for prior years Investment tax credits Land Value Increment Tax Undistributedretainedearnings Deferred income tax expenses adjusted this year Income tax expense	2021 $ 82,302 (46,660 ) (14,484 ) 29,552 (2,576 ) (220 ) － 12,617 11,850 $72,381	2020 $ 154,871 (114,630 ) (4,856 ) 34,847 10,971 － 25,549 － 3,744 $110,496

2. Deferred income tax

The analysis of deferred income tax assets (liabilities) is as follows：

Temporary differences Deferred Bad Debt Losses Inventory Valuation Losses Unrealized Gain or Loss Net changes in equity of investment accounted for using equity method Impairment loss recognized under the cost method Fixed asset impairment loss Others Loss carryforwards Defined benefit plans actuarial loss Conversion difference in the conversion of financial statements of foreign operating organizations		2021	2021	Balance as of December 31 $ 4,954 3,803 (163) 19,273 7,218 (468) (3,521) 38,000 (12) (741) $68,343
	Balance on January1 $ 3,050 2,212 7 32,455 7,218 (468 ) (1,528 ) 38,000 (161 ) (943) $79,842	Profit and loss $ 1,904 1,591 (170) (13,182) －－ (1,993) －－－ $ (11,850)	Other comprehensiv e income $－－－－－－－ `－` 149 202 $351

2020

Temporary differences Deferred Bad Debt Losses Inventory Valuation Losses Unrealized Gain or Loss Net changes in equity of investment accounted for using equity method Impairment loss recognized under the cost method Fixed asset impairment loss Others Loss carryforwards Defined benefit plans actuarial loss Conversion difference in the conversion of financial statements of foreign operating organizations	Balance on January1 $ 2,250 3,912 (311 ) 34,266 7,218 (468 ) (177 ) 32,000 (383 ) (602 ) $77,705	Profit and loss $ 800 (1,700 ) 318 (1,811 ) －－ (1,351 ) 6,000 －－ $2,256	Other comprehensiv e income $－－－－－－－ `－` 222 (341 ) $ (119)	Balance as of December 31 $ 3,050 2,212 7 32,455 7,218 (468 ) (1,528 ) 38,000 (161 ) (943 ) $79,842

Deductible temporary differences and unused taxable loss balances that are not recognized as

deferred income tax assets:

Allowance for uncollectible accounts Net investment income or loss accounted for using equity method Net investment income or loss accounted for using cost method Inventory Valuation Losses Loss on Disposal of Investment and Impairment Loss Loss carryforwards Foreign exchange gain	2021 $ 360 41,296 7,690 3,161 1,300 246,810 2 $300,739	2020 $ 360 44,859 7,690 3,161 500 216,978 (4 ) $273,544

The income tax settlement declaration of the group's for-profit business has been approved by the auditing agency until 2018.

(15)Capital and other equity

A. Issuance of ordinary shares

In 2021 and 2020, the total amount of the group's rated share capital is 500,000 dollar , each with a par value of 10 dollars, and the issued shares are all 322,014 thousand ordinary shares.

B. Additional paid-in capital

Details of capital reserve balance:

Treasury stock trading Others	December 31,2021 $ 5,996 8,362 $ 14,358	December 31,2020 $ 5,996 8,362 $ 14,358

According to the provisions of the Company Law, the capital reserve must be given priority to make up for the losses before it can be issued to new shares or cash in proportion to the shareholders’ original shares based on the realized capital reserve. The “realized capital reserve” mentioned in the preceding paragraph includes the excess of the issuance of stocks in excess of the par value and the income received from donations. In accordance with the issuer’s guidelines for the handling of securities raised and issued, the total amount of the capital reserve that can be allocated for replenishment each year shall not exceed 10% of the paid-in capital.

C. Retained earnings

If the company makes a profit in the year, it shall allocate 2% for employee remuneration, and the remuneration of directors and supervisors shall be no more than 5%. After review and approval by the Salary and Remuneration Committee, it shall be submitted to the board of directors for resolution. Employee compensation and the distribution of directors and supervisors' compensation shall be reported to the shareholders meeting. However, when the company still has accumulated losses, it shall retain the amount of the loss to be made up before the allocation, and then allocate the compensation for employees and directors and supervisors in proportion to the preceding paragraph. If the company has surpluses after its annual accounts, in addition to paying income tax and making up previous losses in accordance with the law, it should first set aside 10% of the statutory surplus reserve, and deduct the shareholders’ equity (including foreign operating institutions). The balance of the conversion difference in the conversion of financial statements, unrealized gains and losses of financial assets available for sale, and the cumulative balance of hedging tool benefits and losses that are the effective hedging part of cash flow hedging) shall be set to special surplus reserve. If there is a subsequent reduction in the amount of deductions for shareholders’ equity, the reduced amount can be transferred from the special surplus reserve back to the undistributed surplus. If there is a balance available for the current period, the shareholder’s dividend will be based on the current period’s distributable amount and the accumulated undistributed surplus in the previous year. The allocated surplus and the undistributed surplus adjustment amount of the current year shall be allocated 40% to

90%, of which the cash dividend shall not be less than 10% of the total dividend. If the cash dividend per share is less than 0.1 dollar, the payment shall be made as a stock dividend.

(a)Legal reserve

According to the company law, the company shall allocate 10% of its net profit after tax as a statutory surplus reserve until it is equal to the total capital. When the company has no losses, it may be approved by the shareholders' meeting to issue new shares or cash with the statutory surplus reserve, but only if the reserve exceeds 25% of the paid-in capital.

(b)Appropriated Retained Earnings

When the company first adopted the International Financial Reporting Standards recognized by the FSC, it chose to apply the IFRS No. 1 "First-time Application of International Financial Reporting Standards" exemption item, and accounted for the unrealized revaluation increase and accumulation under shareholders’ equity Conversion adjustments (benefits), and the fair value on the conversion date is used as the recognized cost to increase the retained surplus amount to 243,814 thousand dollars. The same amount is set forth in accordance with the FCA’s April 6, 2012 Jin Guan Zheng Fa Zi Order No. 1010012865 When using, disposing of, or reclassifying related assets, the proportion of the special surplus reserve that was originally set aside may be converted to distribute the surplus. As of December 31, 2021, the balance of this special surplus reserve is 233,273 thousand dollars.

In accordance with the provisions of the letter and order mentioned in the previous paragraph, when the company distributes distributable surplus, the difference between the net deduction of other shareholders’ equity in the current year and the balance of the special surplus reserve mentioned in the previous paragraph shall be calculated from the current profit and loss The undistributed surplus in the previous period shall be added to the special surplus reserve; the amount of other shareholder equity deductions accumulated in the previous period will not be distributed to the special surplus reserve from the undistributed surplus in the previous period. If there is a subsequent reversal of the deduction of other shareholders’ equity, the reversal part of the surplus may be distributed.

(c)Disposition of net income

Details of the company passed the 2020 and 2019 annual earnings distribution proposal and dividend distribution on July 29, 2021 and June 17, 2020 through the resolutions of the

shareholders' meeting

shareholders' meeting
Legal reserve Cash dividends	Surplus distribution 2020 2019 $ 61,599 $ 20,399 321,650 128,805 $383,249 $149,204	Dividendper share(dollar) 2020 2019 －－ 1.00 0.40
	2020 $ 61,599 321,650 $383,249	2020 － 1.00

D. Other equity

The items listed under other equity are the cumulative amount of net after-tax in the financial statements of the company's foreign operating organizations.

(16)Treasury stock

(16)Treasury stock
Reason Transfer shares to employees		2021
	Beginning －	Increase 364,000	Decrease －	The end
				364,000

A. Ordinary Stock

(a)The company's board of directors resolved on April 7, 2020 to buy back 10,000,000 common shares in order to transfer shares to employees. The price per share is scheduled to be between 13.00 dollars and 26.00 dollars, and the total amount of shares to be repurchased is expected to be capped at 476,765 Thousand dollars. As of June 6, 2020, 364,000 shares have been executed, accounting for 0.11% of the total issued shares of the company. The average repurchase price is 18.50 dollars, and the repurchase cost is 6,735 thousand dollars.
(b)Treasury stock shall not be pledged, nor does it entitle voting rights or receive dividends, in compliance with Securities and Exchange Law of the ROC.

(17) Earnings Per Share

(17)Earnings Per Share
Consolidated net income attributed to stockholders of the company $ Number of issued shares at the beginning of the period (thousand) Stock repurchase Number of shares outstanding at the end of the period(thousand)(B) Basic(A/B)(dollar) $ (18)Customer contract revenue A. Customer contract revenue Animal Feeds Food Meat processing Others B. Contract balance Current contract liabilities Advance sales receipts Contract liabilities from the beginning of the year Merchandise sales (19)Other revenue Rent revenue Investment revenue Income from subsidies and tax refunds Income from subsidies Others revenue		2021 After tax 322,817 2021 322,014 (364 ) 321,650 1.00 2021			2020 After tax 615,277 2020 322,014 (273 ) 321,741 1.91 2020 $ 3,810,187 5,315,113 1,263,805 1,935,060 $12,324,165 December 31,2020 $ 6,062 2020 $4,562 2020 $ 7,956 444 7,193 20,141 10,983 $46,717

	$			$



	$			$




			$ 11,689
			2021
			$6,062
			2021 $ 11,724 353 8,140 `－` 10,640 $30,857

(20) Other benefits and losses

Foreign currency exchange gains and losses financial asset at fair value through profit or loss Gain on disposal of financial assets Gain on disposal of property plant and equipment Reversal of impairment loss Investments accounted for using equity method lease modify income Impairment loss on property, plant and equipment Impairment loss on other non-financial assets other (21)Financial costs Interest on bank loans Interest on lease liabilities Minus：Capitalization of interest	2021 $ 18,736 442 687 (420 ) `－` 22 (4,000 ) (10,432 ) (4,536 ) $ 499 2021 $ 35,823 1,564 393 $ 36,994	2020 $ 9,312 2,753 (641 ) 277,904 3,603 128 `－` `－` (5,359 ) $ 287,700 2020 $ 42,222 27 `－` $ 42,249

(22) Financial Instruments

A. Credit risk

The carrying amount of financial assets represents the maximum credit explosure. Requirement credit risk comes from cash and cash equivalents, derivative financial instruments, and deposits in banks and financial institutions. There are also credit risks from wholesale and retail customers, including unpaid receivables and promised transaction.

The Group’s customers are significantly concentrated in a few customers. The Group's customers are significantly concentrated in a few customers. In 2021 and 2020, a small number of companies accounted for 18.8% and 17.1% of accounts receivable, both of which were composed of two customers.

B. Liquidity risk

The following table is an analysis of the contractual maturity date of financial liabilities, including estimated interest, but does not include the impact of the net agreement. December 31, 2021

non-derivative financial liability Short-term loans and finance bills Notes payable and account payable Lease liability Long-term loans December 31, 2020 non-derivative financial liability Short-term loans and finance bills Notes payable and account payable Lease liability Long-term loans	Book value $ 1,215,529 512,822 78,834 2,127,395 $3,934,580 Book value $ 792,344 347,562 26,089 2,119,772 $3,285,767	cash flow $1,215,529 512,822 80,427 2,127,395 $3,936,173 cash flow $ 792,344 347,562 54,952 2,119,772 $3,314,630	under one year $ 1,215,529 512,822 26,179 573,394 $2,327,924 under one year $ 792,344 347,562 12,144 463,816 $1,615,866	1~5years $`－` `－` 54,248 1,157,009 $1,211,257 1~5years $`－` `－` 27,838 1,330,241 $1,358,079	five years and above $`－` `－` `－` 396,992 $396,992 five years and above $`－` `－` 14,970 325,715 $340,685

The Group does not expect the cash flow analysis on the due date to occur significantly earlier, or the actual amount will be significantly different.

C. Foreign currency risk

(a)The Group undertook transactions denominated in foreign currencies; consequently,

exposures to exchange rate fluctuations arose.

December 31,2021 Foreign currency exchange rate New Taiwan dollar 1,808 27.68 50,045 34,207 4.34 148,458	December 31,2021 Foreign currency exchange rate New Taiwan dollar 1,808 27.68 50,045 34,207 4.34 148,458	December 31,2020	December 31,2020	December 31,2020
Foreign currency 1,808 34,207	exchange rate 27.68 4.34	Foreign currency 1,679 33,037	exchange rate 28.48 4.38	New Taiwan dollar
				47,818 144,702

December 31,2021 Foreign currency exchange rate New Taiwan dollar 7,970 27.68 220,609	December 31,2021 Foreign currency exchange rate New Taiwan dollar 7,970 27.68 220,609	December 31,2020	December 31,2020	December 31,2020
Foreign currency 7,970		Foreign currency 3,245	exchange rate 28.48	New Taiwan dollar
	27.68 220,609			92,418

The group's monetary items have a significant impact due to exchange rate fluctuations, and the total exchange gains and losses for 2021 and 2020 respectively are 18,736 thousand dollars and 9,312 thousand dollars.

(b)Sensitivity analysis

The group's exchange rate risk mainly comes from foreign currency denominated cash and cash equivalents, accounts receivable, other receivables, loans, accounts payable, expenses payable and other payables, etc., resulting in foreign currency exchange gains and losses during conversion. In December 31, 2020, when the new Taiwan dollar depreciated or appreciated by 1% relative to the U.S. dollar, and all other factors remained unchanged, the net profit after tax in 2021 and 2020 would increase 221 thousand or decrease 1,001 thousand

4. Interest rate analysis

The group's analysis method for floating interest rate liabilities assumes that the amount of liabilities out of circulation at the reporting date is in circulation throughout the year. The rate of change used by the group when reporting interest rates internally to key management is an increase or decrease of 1% in interest rates, which also represents management's assessment of the reasonably possible range of changes in interest rates.

If interest rates increase or decrease by 1% on the reporting date, and all other variables remain unchanged, the company’s net profit for 2021 and 2020 will decrease or increase by 33,429 thousand and 29,121 thousand, mainly due to the group’s floating interest rate loan.

5. Fair value

A. Fair value and book amount

The management of the group believes that the financial assets and financial liabilities measured by the group's amortized cost in the financial statements are close to their fair value.

B. Fair value measurement

The determination of the fair value of the company's financial assets and financial liabilities is based on the following methods and assumptions:

(1)The stocks of listed (counter) companies are financial assets and financial liabilities that have standard terms and conditions and are traded in an active market, and their fair values are determined with reference to market quotes
(2)The fair value of stocks of unlisted (counter) companies without an active market is estimated by the market method, and the judgment is made with reference to recent fund-raising activities, evaluations of similar companies, company technological development, market conditions and other economic indicators.
(3)The fair value of other financial assets and financial liabilities is determined by the generally accepted evaluation model based on discounted cash flow analysis.
C. level of fair value

The following table analyzes financial instruments measured by fair value. The fair value levels are defined as follows:

Level 1: Public quotation of the same asset or liability in an active market.
Level 2: Except for the public quotes included in the first level, the input parameters of assets or liabilities are directly or indirectly observable.
Level 3: Input parameters of assets or liabilities are not based on observable market data.

December 31, 2021 Current Financial Assets at Fair Value through Profit or Loss December 31, 2020 Current Financial Assets at Fair Value through Profit or Loss	Level 1 $ 32,790 $ 30,342	Level 2 $`－` $`－`	Level 3 $`－` $`－`	Total
				$ 32,790
				$ 30,342

(a) Fair value evaluation for measuring financial instruments

Non hedge Derivative financial instruments

It is based on evaluation models that are widely accepted by market users, such as discount method and option pricing model. Forward foreign exchange contracts are

usually evaluated based on the current forward exchange rate.

(b)Transfer between the first level and the second level

There was no transfer of the second-tier financial assets to the first-tier situation in 2021 and 2020.

(c)List of changes in the third level: None

The company's favorable and unfavorable changes refer to the fluctuation of fair value, and the fair value is calculated based on the evaluation technology based on the unobservable input parameters of different degrees. The above table only reflects the impact of a single input value change, and does not take into account the correlation and variability between input values.

(d)Classification of Financial Instruments

(d)Classification of Financial Instruments
Financial asset Amortized cost Cash and Cash equivalents Accounts receivable and notes receivable other receivable other financial asset Refundable Deposits Current Financial Assets at Fair Value through Profit or Loss Financial liability Amortized cost Short-term loans Accounts payable and notes payable other payable Long-term loans deposits received	December 31,2021 $ 870,863 1,833,277 21,677 116,717 16,102 32,790 1,215,529 512,822 275,138 2,127,395 2,422	December 31,2020
		$ 943,986 1,395,406 23,505 118,445 17,766 30,342 792,344 347,562 315,863 2,119,772 2,413

(23) Financial risk management

The Group's main financial instruments include accounts receivable and accounts payable. The Group’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze the exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk.

1. Market risk

The purpose of the group's financial derivative transactions is to avoid the risks of foreign currency net assets or net liabilities due to exchange rate or interest rate fluctuations, because the profits and losses arising from exchange rate and interest rate fluctuations will generally offset the profits and losses of hedging projects. Therefore, the market price risk should not be significant.

2. Credit risk

Financial assets are potentially affected by the group's counterparty's failure to perform contractual obligations. Financial assets with positive fair values at the balance sheet date are evaluated for credit risk. The Corporation only transacts with financial institutions and companies with good credit ratings. Therefore, no significant credit risk is anticipated.

3. Liquidity Risk

The group has obtained sufficient loan credit lines from financial institutions and the working capital is still sufficient to cover it, so there is no liquidity risk due to the inability to raise funds to fulfill contractual obligations

Cash flow risk from changes in interest rates

If the long-term and short-term bank borrowings undertaken by the company are debts with floating interest rates, changes in market interest rates will cause the effective interest rates of the long-term and short-term bank borrowings to change accordingly, which will cause fluctuations in future cash flows.

The company manages interest rate risk by maintaining an appropriate combination of fixed and floating interest rates and using interest rate exchange contracts. The company regularly evaluates hedging activities to make them consistent with the interest rate view and established risk appetite to ensure that the most cost-effective hedging strategy is adopted.

(24) Capital risk management

The Company manages its capital to ensure its ability to continue as a going concern while maximizing the returns to shareholders. The capital structure of the Company consists of its net debt (loan after deduction of cash and cash equivalents) and equity. The Company is not subject to any externally imposed capital requirements.

The main management of the company regularly reviews the capital structure, and its review includes consideration of the cost of various types of capital and related risks. The company will balance its overall capital structure by paying dividends and issuing new shares based on the recommendations of the main management.

7 `、` Related Party Transaction

(1) Parent and ultimate controlling party:

The company is the ultimate controller of the combined company.

(2) Compensation of key management personnel

short-term employee benefits Post-employment benefits	2021 $ 24,344 496 $ 24,840	2020
		$ 13,281 305
		$ 13,586

(3) Related Party Transactions

Names of related parties

Relationship with the Group

CENTRAL UNION OIL CORP. Associates CHIATON INTERNATIONAL CO., LTD. Associates CHIA FHA HSING AGRICULTURAL SCIENCE AND Substantive Related Parties TECHNOLOGY CO., LTD CHIA YUH TRADING CO., LTD. Substantive Related Parties CHIA FA INDUSTRY CO., LTD. Substantive Related Parties CHIA LI ENTERPRISE CO., LTD. Substantive Related Parties CHIA YOU ENTERPRISE CO., LTD. Substantive Related Parties ALWAYS FOOD RESTAURANT CO., LTD. Substantive Related Parties Tsung Lin Hung Substantive Related Parties Substantive Related Parties

Cing Yue Chen

(4) The significant transactions between the Company and its related parties, other than those

disclosed in other notes, are summarized as follows:

1. Net revenue

1.Net revenue
Related Parties CENTRAL UNION OIL CORP. Associates Substantive related parties	2021 Amount $ 2,814,378 1,450 200,977 $3,016,805	2020
		Amount
		$ 1,899,057 `－` 2,472
		$1,901,529

The sales transaction conditions are as follows:

(1)sales price：According to current prices and products individually negotiated.

(2)Payment terms：The average collection period is about 60-90 days, which is not

significantly different from the average company.

2. Purchases

2.Purchases
Related Parties CENTRAL UNION OIL CORP. Associates	2021 Amount $ 315,514 72 $315,586	2020
		Amount
		$ 125,603 `－`
		$125,603

The purchase transaction conditions are as follows:

(1) Purchases price：According to current prices and products individually negotiated.

(2) Payment terms ： The average payment period is about 15-30 days, which is not

significantly different from the average company.

3. Receivables from related parties

Item Notes receivable Accounts receivable Less: allowance for loss NET Other receivable	Company Substantive related parties CENTRAL UNION OIL CORP. Associates Substantive related parties Associates	December 31,2021 Amount $2,869 $ 348,038 31 29,998 (382) $377,685 $7,125	December 31,2020 Amount $`－` $ 244,218 27 760 (382) $244,623 $7,125

4. Payables to related parties

Item Company Notes payable Associates Accounts payableAssociates Substantive related parties Other payable Associates Substantiverelated parties 5.Manufacturing expenses and Operating Item Manufacturing expenses CENTRAL UNION Substantive related parties Operating cost－Other expenses Associates Substantive related parties	December 31,2021 Amount $58 $ 32,843 `－` $32,843 $ 5,829 564 $6,393 cost 2021 $ 224,161 1,353 102 5,936 $231,552	December 31,2020 Amount $`－` $ 7,264 73 $7,337 $`－` 4,629 $4,629 2020 $ 223,547 913 21 8,831 $233,312

The above-mentioned processing fees and other expenses are the processing expenses of entrusting CENTRAL UNION and Fats and Qiafaxing, and the production and management expenses of seconded personnel from Qiafaxing enterprises to engage in the production and management of compound feed. They are settled once a month and the payment period is one month.

6.Lease agreement Related PartyCategories Right-of-use asset Substantive related parties Lease obligations Substantive related parties Interest expense Substantive related parties	2021 2020 $2,9903 $4,665 $ 3,1262 $4,570 $42 $63	2020

7. Non- operating income

7.Non-operating income
Rent revenue Associates Substantive related parties Other revenue Associates	2021 $ 1,753 131 $1,884 2021 $531	2020
		$`－` 131
		$131
		2020
		$`－`

The group collects rental income from CENTRAL UNION OIL CORP. and CHIA YUH TRADING CO., LTD. Trading based on the lease price.

8. Consignment

8.Consignment
Substantive Related Parties Other related parties	2021		2020
	Consignment	Commissions Expense	Consignment	Commissions Expense
	$ 7,207	$ 137	$ 6,505	$ 127

The merged company entrusts CHIA YUH TRADING CO., LTD. Trading to sell pet feed and

supplies, and pay a commission of 2% each month based on the amount of agency sales.

9. Acquisition/Disposal of property, plant and equipment

	Acquisition Price 2021 2020 `－`$ 4,000 `－` 504 `－`$ 4,504 Book value Disposal of gains and losses $1$18 Book value Disposal of gains and losses $1,049$ (49)	Acquisition Price 2021 2020 `－`$ 4,000 `－` 504 `－`$ 4,504 Book value Disposal of gains and losses $1$18 Book value Disposal of gains and losses $1,049$ (49)
	2021 `－` `－` `－` Book value
$		$
$		$
	$
	Book value

The group endorses and guarantees information for related parties：Refer to Chinese

financial statements.

8 `、` Mortgage Assets

The consolidated company provides its own assets as a guarantor, and its book value is as follows:

Items Property, plant and equipment Land Buildings, net Machinery equipment, net Restricted assets－Bank savings (Fixed deposit) Restricted assets－Bank savings (Demand Deposits)	property Bank loan Bank loan Bank loan Bank loan Reserve Account	December 31, 2021 $ 423,151 520,109 147,407 `－` `－` $1,090,667	December 31, 2020 $ 423,151 555,616 162,771 100 88 $1,141,726

9 `、` Commitments And Contingent Liabilities

1. The Company had outstanding usance letters of credit amounting to USD 2.The balance of guaranteed bills issued for borrowing and developing letters of credit NTD USD 3.Equipment and engineering contracts that have been signed but not fulfilled, Promised to pay the project payment in the future NTD USD	December 31, 2021 $ 20,365 7,130,000 390,000 19,804 `－`	December 31, 2020 $ 22,001 3,950,000 24,000 22,983 58

10 、 Significant Losses From Disasters ： NONE

11 、 Significant Subsequent Events ： NONE

12 、 Others ：

1. Statement of labor, depreciation and amortization by function:

	2021	2021	2021	2020	2020	2020
	Classified as Cost of Revenue	Classified as Operating Expenses	Total	Classified as Cost of Revenue	Classified as Operating Expenses	Total
Labor cost Salary and bonus Labor and health insurance Pension Board compensation Others Depreciation-PPE Depreciation-Biological assets Amortization	$ 225,638 23,736 9,857 `－` 9,071 197,823 17,911 `－`	$ 316,917 26,655 14,855 22,814 20,431 65,354 `－` 2,212	$ 542,555 50,391 24,712 22,814 29,502 263,177 17,911 2,212	$ 225,153 21,909 9,446 `－` 9,283 194,876 14,805 `－`	$ 342,061 26,523 13,673 39,016 18,721 51,469 `－` 1,966	$ 567,214 48,432 23,119 39,016 28,004 246,345 14,805 1,966

As of December 31, 2021 and 2020, the group had 867 and 860 employees, There were 10 non-employee directors, respectively.

There is no difference between the actual allotment of employee compensation and directors' compensation in the year 2020 and the amount of employee compensation and directors' compensation recognized in the 2020 individual financial report.

The estimated amount of remuneration for employees and directors and supervisors of the company in 2021 is 21,134 thousand, which is based on the deduction of pre-tax benefits before the distribution of employees and directors’ and supervisors’ remuneration at a rate of 2% and under 5% respectively. The remuneration of directors and supervisors shall be reported as operating costs or operating expenses in 2021. If there is a difference between the actual distribution amount and the estimated amount, it shall be dealt with according to the change in accounting estimates, and the difference shall be recognized as the operating cost in 2021 profit and loss.

13 、 Additional Disclosures

(A) Following are the additional disclosures required by the Securities and Futures Bureau for the

Company:

Financings provided: NONE
Endorsement/guarantee provided: Refer to Chinese financial report.
Marketable securities held (excluding investments in subsidiaries and associates): Refer to Chinese financial report.
Marketable securities acquired and disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: NONE
Acquisition of individual real estate properties at costs of at least NT$300 million or 20% of the paid-in capital: NONE
Disposal of individual real estate properties at prices of at least NT$300 million or 20% of the paid-in capital: NONE
Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital: Refer to Chinese financial report.
Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Refer to Chinese financial report.
Information about the derivative financial instruments transaction: Refer to Chinese financial report.
10.Other ： Business relations and important transactions and amounts between parent and subsidiary companies and between subsidiaries ： Refer to Chinese financial report.
11.Names, locations, and related information of investees over which the Company exercises significant influence (excluding information on investment in mainland China): Refer to Chinese financial report.

(B) Information on investment in mainland China

The name of the investee in mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: See Table 7 attached.
Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: None

3.The balance of negotiable instrument endorsements or guarantees or pledges of collateral at

the end of the period and the purposes：NONE

List of all shareholders with ownership of 5 percent or greater showing the names and the

number of shares and percentage of ownership held by each shareholder: NONE.

14 、 Operating Segments Information

For the purpose of management, the merged company divides the operating units according to different products and services, which are mainly divided into the food department, the food department and the meat processing department:

一
( ) Industry-specific financial information

The management individually monitors the operating results of their business units to make decisions on resource allocation and performance evaluation. The department’s performance is evaluated based on the department’s profit and loss and measured in a manner consistent with the department’s profit and loss in the consolidated financial report.

2021:

Departmental revenue of non-enterprise customers Departmental revenue of other departments in the enterprise Total net operating income Departmental profit and loss Non-operating income and expenses General management office expenses Pre-tax benefits Identifiable assets 2020`：` Departmental revenue of non-enterprise customers Departmental revenue of other departments in the enterprise Total net operating income Departmental profit and loss Non-operating income and expenses General management office expenses Pre-tax benefits Identifiable assets	Feed Division $3,736,694 2,059 $3,738,753 $202,888 $1,625,187 Feed Division $3,810,163 24 $3,810,187 $371,092 $1,639,791	Food Division $6,484,680 413,482 $ 6,898,162 $ 344,248 $2,005,158 Food Division $ 4,931,626 383,487 $ 5,315,113 $365,022 $1,784,013	Meat Processing Department $1,188,311 `－` $1,188,311 $ (48,129 ) $1,381,824 Meat Processing Department $1,263,805 `－` $1,263,805 $ (94,687) $1,363,808	Other Department $2,953,547 9 $2,953,556 $123,099 $1,507,942 Other Department $1,935,060 `－` $1,935,060 $22,017 $1,462,052	Adjustment $ 415,550 (415,550) $`－` Adjustment $ 383,511 (383,511) $`－`	Consolidated $14,778,782 `－` $14,778,782 $ 622,106 51,025 (319,394) $ 353,737 $6,583,111 Consolidated $ 12,324,165 `－` $12,324,165 $ 663,444 344,301 (332,016 ) $675,729 $6,249,664

The merged company is mainly engaged in three types of businesses including feed, food and meat processing. The departmental income listed in the above table refers to the department’s sales income to customers outside the enterprise and the transfer income to other departments within the enterprise (both including sales of goods and The income from processing is the same below). But departmental income does not include non-operating income and benefits. For the transfer income between departments, the transfer pricing basis shall be calculated according to the following methods.
(1) Raw material part:

Depending on the nature of the raw materials, mergers or market price transfers are used.

(2) Finished part

According to the nature of the finished product, the combined addition or market price transfer is adopted.

Departmental profit and loss is the balance of departmental revenue minus departmental consolidation and expenses. The term “departmental integration and expenses” refers to the integration and expenses related to the income of the product department. Purchases between departments and transfers between departments use the same transfer pricing basis. If the business integration and expenses cannot be directly attributable, the relative operating income ratio will be allocated to each department. However, the departmental consolidation and expenses do not include the following items:
(1) General company expenses not related to the department.
(2) Non-operating expenses and losses.
Departmental identifiable assets refer to tangible assets that can be directly identified as belonging to the department, but departmental identifiable assets do not include the following items:
(1) General assets of the company held not for the business use of any particular department.

(2) External equity investment evaluated in accordance with the equity method.

(2) Region-specific information

egion-specific information
Item Taiwan Operating income from export America Asia Other Net operating income mportant customer information Customer CENTRAL UNION OIL CORP.	2021 total $ 14,565,486 45,573 162,039 5,684 $14,778,782 2021 Food Division `％` $2,814,378 19.0	2020 total $ 12,128,283 60,059 127,079 8,744 $12,324,165 2020 Food Division `％` $1,899,057 15.4
	2021	2020
	Food Division $2,814,378	Food Division $1,899,057

AI assistant

FWUSOW — Annual Report 2021

51750_rns_2021-11-11_3c03fc74-c558-4d03-a9f5-017c919babae.pdf

FWUSOW INDUSTRY CO., LTD. and Subsidiaries

FWUSOW INDUSTRY CO., LTD. and Subsidiaries

Index to Financial Statements

REPRESENTATION LETTER

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)

FWUSOW INDUSTRY CO., LTD.

AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in Thousands of New Taiwan Dollars)

（Brought forward）

FWUSOW INDUSTRY CO., LTD. and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2021 and 2020

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

1. Organization

2. The Date and Procedure for the Authorization Of Financial Statements

3. Application Of New And Revised International Financial Reporting Standards

4. Summary Of Significant Accounting Policies

I. Compliance statement

II. Basis of Preparation

B. The subsidiaries in the consolidated financial statements

A. Foreign currency transaction

B. Translation of foreign operations

VII. Financial Instruments

A. Financial Assets

(4) Derecognition of financial liabilities

(5) Mutual offset of financial assets and liabilities

VIII. Inventories

IX. Biological assets

X. Investment in related enterprises

XI. Property, Plant and Equipment

A. Recognition and Measurement

B. Subsequent cost

C. Depreciation

XII. Intangible assets

XIII. Lease

A. The company is the lessor

B. The company is the lessee

XIV. Impairment of Non-financial Assets

XV. Treasury Stock

XVI. Revenue recognition

B. Financing components

XVII. Employee benefits

A. Defined contribution plans

B. Defined benefit plans

C. Short-term employee benefits

XVIII. Income taxes

XIX. Earnings per share

XX. Operating segments

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

6. Details of Significant Accounts

(3) Financial assets amortized cost

(5) Accounts receivable (including overdue receivables)

December 31, 2021

(7) Investments accounted for under equity method

(8) Property, plant and equipment

1. Capitalization amount and interest rate range of borrowing costs for property, plant and equipment:

2. Details of property, plant and equipment

(9)Lease arrangements

FWUSOW Annual Report 2021

7 `、` Related Party Transaction

8 `、` Mortgage Assets

9 `、` Commitments And Contingent Liabilities