SAN FU — Annual Report 2021

Dec 14, 2021

Stock Code ： 4755

San Fu Chemical Co., Ltd. and Subsidiaries

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

Address ： 5F., No. 21, Zhongshan North Road, Zhongshan District, Taipei City Telephone ： (02) 25426789

1

REPRESENTATION LETTER

The entities that are required to be included in the consolidated financial statements of San Fu Chemical 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 consolidated financial statements is included in the consolidated financial statements of parent and subsidiary companies. Consequently, San Fu Chemical Co., Ltd. and Subsidiaries do not prepare a separate set of consolidated financial statements.

Very truly yours,

SAN FU CHEMICAL CO., LTD.

By

==> picture [173 x 40] intentionally omitted <==

_______ SIMON WU Chairman

Dated: March 04, 2022

2

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders San Fu Chemical Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of San Fu Chemical Co., Ltd. and its subsidiaries (collectively referred to as 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 (collectively referred to as the “consolidated financial statements”).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 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, International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the 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 have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion based on our audits and the report of other auditors.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Company’s 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.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

3

The key audit matter of the Company’s consolidated financial statements for the year ended December 31, 2021 is as follow:

Measurement of Inventories

Inventories amounted to 11% (NT$ 719,825 thousand) of the Company’s consolidated total assets as of December 31, 2021. Please refer to Notes 4 and 10 for the accounting policies and the related disclosures of inventories. The inventories could be slow-moving or outdated due to the fluctuation in the demand market and the advancement in technology, which may result in impairment loss on inventories. The Company estimated the impairment loss of inventories based on the assessed net realized value and the evaluated aging of inventories quarterly. The estimation of net realized value and inventories aging assessment mainly depended on subjective management judgments and may affect the amount of impairment loss. As a result, the evaluation of inventories for impairment loss is determined to be a key audit matter.

We performed the following procedures to evaluate the measurement of inventories:

1. We obtained an understanding of the Company’s accounting policies related to inventory write-down and the characteristics of inventory.

2. We obtained a summary table of net realizable value of inventory prepared by the management, inspected the supporting document of the latest market price, and re-calculated the net realizable value of inventory to evaluate the basis and reasonableness of the net realizable value estimated by the management.

3. We obtained the inventory aging table prepared by the management, and inspected supporting documents of recent sales, purchases and picking lists of selected samples to evaluate the accuracy of the inventory aging table.

Other Matter

We have also audited the standalone financial statements of San Fu Chemical Co., Ltd. as of and for the years ended December 31, 2021 and 2020 on which we have issued an unmodified opinion.

Responsibilities of Management and Those Charged with Governance for the 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, International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, 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.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

4

In preparing the consolidated financial statements, 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 supervisors, are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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.

5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the Company audit. We remain solely responsible for our audit opinion.

This is the translation of the financial statements. CPAs do not audit or review on this translation.

5

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 Shiow-Ming Shue and Ya-Ling Wong.

Deloitte & Touche Taipei, Taiwan Republic of China

March 04, 2021

Notice to Readers

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

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

This is the translation of the financial statements. CPAs do not audit or review on this translation.

6

SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan Dollars)

Code		2021	2020
ASSETS CURRENT ASSETS 1100 Cash and cash equivalents（Notes 4 and 6） 1136 Financial assets at amortized cost-current（Notes 4 and 8） 1140 Contract asset - current（Notes 4 and 20） 1150 Notes receivable, net（Notes 4 and 9） 1170 Accounts receivable, net (Notes 4 and 9) 1180 Receivable from related parties（Notes 4 and 30） 130X Inventories（Notes 4 and 10） 1410 Prepayments 1470 Other current assets 11XX Total current assets NONCURRENT ASSETS 1517 Financial asset at fair value through other comprehensive income - noncurrent（Notes 4 and 7) 1550 Investments accounted for using the equity method （Notes 4 and 12) 1560 Contract asset - noncurrent（Notes 4 and 20） 1600 Property, plant and equipment（Notes 4 and 13） 1755 Right-of-use asset（Notes 4 and 14） 1840 Deferred tax assets（Notes 4 and 22） 1915 Prepayments for equipment 1920 Refundable deposits 15XX Total noncurrent assets 1XXX TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES 2100 Short-term borrowings（Note 15） 2130 Contract liabilities - current（Notes 4 and 20） 2170 Notes and accounts payable（Note 16） 2180 Accounts payable - related parties（Note 30） 2200 Other payables（Note 17） 2230 Current tax liabilities（Notes 4 and 22） 2280 Lease liabilities-current（Notes 4 and 14） 2320 Long-term liabilities due within one year（Note 15） 2399 Other current liabilities 21XX Total current liabilities	$ $	Amount ％ Amount ％ 552,766 8 $ 794,606 15 233,472 4 233,792 4 8,200 - 8,730 - 56,633 1 43,521 1 1,504,822 23 1,050,565 20 19,627 - 9,590 - 719,825 11 393,477 7 268,126 4 87,893 2 99,005 2 25,846 - 3,462,476 53 2,648,020 49 86,912 1 157,471 3 456,327 7 405,083 8 - - 5,941 - 2,278,099 35 1,776,610 33 137,211 2 141,430 3 34,784 - 26,916 - 113,951 2 218,384 4 5,816 - 4,569 - 3,113,100 47 2,736,404 51 6,575,576 100 $5,384,424 100 930,000 14 $ 590,000 11 203,231 3 156,922 3 502,080 8 250,795 5 3,770 - 2,047 - 340,986 5 185,114 4 108,570 2 64,497 1 22,427 - 19,611 - 90,572 1 38,072 1 4,762 - 3,391 - 2,206,398 33 1,310,449 25 (Continued)
	$

7

NONCURRENT LIABILITIES 2540 Long-term borrowings（Note 15） 2570 Deferred tax liabilities（Notes 4 and 22） 2580 Lease liabilities-noncurrent（Notes 4 and 14） 2640 Net defined benefit liabilities – noncurrent（Notes 4 and 18） 2670 Other noncurrent liabilities 25XX Total noncurrent liabilities 2XXX Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY（Notes 4 and 19） Capital Stock 3110 Ordinary shares 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated earnings 3300 Total retained earnings 3410 Exchange differences on translating foreign operations 3420 Unrealized evaluation gains and losses of the Equity instrument investment benefit measured at fair value through other comprehensive gains and losses 3400 Total other equity 31XX Total Equity of the Business Owner 36XX Non-controlling interests 3XXX Total equity TOTAL	$	103,930 2 8,474 - 49,940 1 27,791 - 2,454 - 192,589 3 2,398,987 36 1,007,060 15 960,750 15 291,281 4 103,348 2 1,907,058 29 2,301,687 35 (90,099) (1) (34,695) (1) (124,794) (2) 4,144,703 (63) 31,886 1 4,176,589 64 6,575,576 100	$	194,501 4 108 - 59,806 1 24,538 - 2,363 - 281,316 5 1,591,765 30 1,007,060 19 1,056,191 19 250,297 5 56,293 1 1,526,166 28 1,832,756 34 (127,821) (2) 24,473 - (103,348) 2 3,792,659 70 - - 3,792,659 70 5,384,424 100

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

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SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Except Earnings per Share)

Code		2021			2020
		Amount	％		Amount	％
4000	OPERATING REVENUE（Notes 4, 20 and 30）	$ 4,779,885	100		$ 3,818,716	100
5000	OPERASTING COST（Notes 10, 21 and 30）	3,584,780	75		2,957,612	78
5900	GROSS PROFIT	1,195,105	25		861,104	22
	OPERATING EXPENS（Notes 21and 30）
6100	Selling and marketing expenses	256,706		5	204,119		5
6200	General and administrative expenses	172,582		4	145,175		4
6300	Research & Development Expenses	38,615		1	40,907		1
6450	Expected credit impairment losses	5,710		-	-		-
6000	Total operating expenses	473,613	10		390,201	10
6900	PROFIT FROM OPERATIONS	721,492	15		470,903	12
	NON-OPERATING INCOME AND EXPENSES
7010	Other income（Notes 21and 30）	30,763		-	41,941		1
7020	Other gains and losses（Note 21）
		2,536		-	(11,086)		-
7050	Financial Cost（Note 21）
		(9,141)		-	(6,930)		-
7060	Share of profit or loss of associates and joint ventures
	Recognized by Equity Method（Notes 4 and 12）	82,237		2	6,126		-
7100	Interest income	1,141		-	1,266		-
7140	Bargain purchase gain- acquiring a subsidiary (Note
	25)	372		-	-		-
7000	Total non-operating income and expenses	107,908		2	31,317		1
7900	PROFIT BEFORE INCOME TAX	829,400	17		502,220	13
7950	INCOME TAX EXPENSE（Note 22）
		(156,690)	(3)		(102,747)	(3)
8200	NET PROFIT FOR THE YEAR	672,710	14		399,473	10
					(Continued)

9

SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

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

	OTHER COMPREHENSIVE GAIN/(LOSS)
8310	ITEMS THAT WILL NOT BE RECLASSIFIED
	SUBSEQUENTLY TO PROFIT OR LOSS:
8311	Re-measured quantity of defined benefit plan	( $ 4,125)	-	( $ 2,183)	-
8316	Unrealized loss on financial assets at fair value through
	other comprehensive income (Note 7)	( 69,029)	( 1)	10,836	-
8349	Income tax related to items that are not reclassified	10,686	-	1,716	-
		(62,468)	(1)	10,369	-
8360	Items that may be reclassified to profit and loss in the
	future
8370	Share of the other comprehensive loss of associates and
	joint ventures using the equity method	( 3,193)	-	2,829	-
8361	Exchange differences on translating the financial
	statements of foreign operations	40,915	1	(61,999)	(1)
		37,722	1	(59,170)	(1)
8300	Other comprehensive loss for the year, net of income tax	(24,746)	-	(48,801)	(1)
8500	TOTAL COMPREHENSIVE INCOME FOR THIS
	PERIOD	$ 647,964	14	$ 350,672	9
	NET PROFIT ATTRIBUTABLE TO:
8610	Owners of the Company	$ 673,643	14	$ 399,473	10
8620	Non-controlling interests	(933)	-	-	-
8600		$ 672,710	14	$ 399,473	10
	TOTAL COMPREHENSIVE INCOME
	ATTRIBUTABLE TO:
8710	Owners of the Company	$ 648,897	14	$ 350,672	9
8720	Non-controlling interests	(933)	-	-	-
8700		$ 647,964	14	$ 350,672	9
	EARNINGS PER SHARE（Note 23）
	From continuing business units
9750	Basic	$ 6.69		$ 4.36
9850	Diluted	$ 6.68		$ 4.36

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

10

SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan Dollars

A1 BALANCE AT JANURAY 1, 2020 Appropriation of 2019 Earnings B1 Recognized Legal Reserve B3 Recognized Special Reserve B5 Cash Dividend Distributed to Shareholders Other Changes in Equity: C3 Donations from Shareholders E1 Cash Capital Increase N1 Share-based Payment D1 NET PROFIT FOR 2020 D3 Other Comprehensive Profit & Loss After Tax for 2020 D5 Total Comprehensive Income for 2020 Z1 BALANCE AT DECEMBER 31, 2020 Distribution of Available Earnings for 2020 B1 Recognized Legal Reserve B3 Recognized Special Reserve B5 Cash Dividend Distributed to Shareholders M7 Changes in Equity of Subsidiaries O1 Employee stock options issued to subsidiaries Other Changes in Capital Surplus C3 Donations from Shareholders D1 Net Income in 2021 D3 Other comprehensive income (loss) in 2021 D5 Total Comprehensive Income (loss) in 2021 O1 Non-Controlling interest Z1 BALANCE DECEMBER 31, 2021	Capital Stock（Note 19） Shares (In Thousands) Amount 90,706 90,706 - - - - - - - - 10,000- 10,000- - - - - - - - - 100,706 1,007,060 - - - - - - - - - - - - - - - - - - - - 100,706 $ 1,007,060	Capital Stock（Note 19） Shares (In Thousands) Amount 90,706 90,706 - - - - - - - - 10,000- 10,000- - - - - - - - - 100,706 1,007,060 - - - - - - - - - - - - - - - - - - - - 100,706 $ 1,007,060	Capital Stock（Note 19） Shares (In Thousands) Amount 90,706 90,706 - - - - - - - - 10,000- 10,000- - - - - - - - - 100,706 1,007,060 - - - - - - - - - - - - - - - - - - - - 100,706 $ 1,007,060	Capital Surplus （Note 19） $ 670,626 - - ( 27,212) - 6,746 387,000 19,031 - - - 1,056,191 - - ( 100,706) ( 859) - 6,124 - - - - $ 960,750	Equity attributable to the Owners of the Company Retained Earnings（Note 19） Other equity Legal Capital Reserve Special Capital Reserve Unappropriated Earnings Exchange Differences on Translating Foreign Operations Unrealized Gains (Losses) On Financial Assets at Fair Value Through Other Comprehensive Income $ 217,850 $ 6,442 $1,410,290 ( $ 68,651) $ 12,358 32,447 49,851 ( 32,447 ) - - - - ( 49,851 ) - - - - ( 199,553 ) - - - - - - - - - - - - - - - - - - - - - - 399,473 - - - ( 1,746) (59,170) 12,115 - 397,727 (59,170) 12,115 250,297 56,293 1,526,166 ( 127,821) 24,473 40,984 - ( 40,984 ) - - - 47,055 ( 47,055 ) - - - - ( 201,412 ) - - - - - - - - - - - - - - - - - - - 673,643 - - - ( 3,300) 37,722 (59,168) - 670,343 37,722 (59,168) - - - - $ 291,281 $ 103,348 $ 1,907,058 ($ 90,099) ( $ 34,695)	Sub-Total Non-controlling interests (Notes 19 & 26) $ 3,155,975 $3,155,975 $ - $3,155,975 - - - - - - ( 226,765 ) - ( 226,765 ) 6,746 - 6,746 487,000 - 487,000 19,031 - 19,031 399,473 - 399,473 ( 48,801) - ( 48,801) 350,672 - 350,672 3,792,659 - 3,792,659 - - - - - - ( 302,118 ) - ( 302,118 ) ( 859 ) 15,859 1,752 - 1,752 1,752 6,124 - 6,124 673,643 ( 933) 672,710 ( 24,746) - ( 24,746) 648,897 ( 933) 647,964 - 15,208 15,208 $ 4,144,703 $ 31,886 $4,176,589
	Shares (In Thousands) 90,706 - - - - 10,000- - - - - 100,706 - - - - - - - - - - 100,706
						( ( ( ( (

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

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SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan Dollars)

C o d e			2021	2020	2020
	CASH FLOWS FROM OPERATING ACTIVITIES
A10000	Net income before income tax	$ 829,400			$ 502,220
A20010	Adjustments for:
A20100	Depreciation expenses		284,073		262,851
A20300	Expected credit impairment losses		5,710		-
A20900	Finance costs		9,141		6,930
A21200	Interest income	(	1,141 )	(	1,266 )
A21300	Investment Income - Dividend	(	1,593 )	(	1,092 )
A21900	Shared-based compensation Cost		1,752		19,031
A22300	Gain/Loss of associates and joint ventures using
	equity method	(	82,237 )	(	6,126 )
A22500	Loss from disposal of property, plant and
	equipment	(	274 )		40
A22600	Transfer fee from property, plant and equipment		142		-
A22900	Profit gained from disposal of subsidiaries	(	424 )		-
A23200	Disposal of investment interest recognized by
	equity method of accounting	(	22,797 )		-
A23800	Loss for market price decline and obsolete and
	slow-moving inventories		60	(	5,961 )
A24100	Unrealized foreign currency exchange (gain) loss		635	(	2,242 )
A29900	Bargain purchase Gain	(	372 )		-
A29900	Lease modification benefits	(	6 )		-
A30000	Change in operating assets and liabilities
A31125	Contract Assets - Current		530	(	2,108 )
A31130	Notes receivable	(	13,112 )	(	4,692 )
A31150	Accounts receivable	(	459,741 )	(	125,082 )
A31160	Accounts receivable – related parties	(	10,133 )		12,027
A31200	Inventories	(	326,087 )		66,917
A31230	Prepayments	(	179,684 )	(	39,142 )
A31240	Other current assets	(	74,341 )		11,944
A31260	Contract asset－noncurrent		5,941		8,676
A32125	Contract liability		46,309		146,667
A32150	Accounts receivable		246,824		36,555
A32160	Accounts payable - related parties		64	(	2,696 )
A32180	Other payables		143,764		23,211
A32230	Other current liabilities		1,359	(	29 )
A32240	Net defined benefit liabilities - noncurrent	( $	872 )	( $	15,559 )
A32990	Other noncurrent liabilities		91	(	497)
A33000	Cash generated from operations		402,981		890,577
A33100	Interest received		1,141		1,266
A33200	Dividend received		1,593		13,597
A33300	Interest paid	(	9,047 )	(	6,963 )
					（Continued）

12

SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020

(Expressed in thousands of New Taiwan Dollars)

C o d e		2021	2020.
33500	Income tax paid	(109,907)	(43,470)
AAAA	Net cash generated from operating activities	286,761	855,007
	CASH FLOWS FROM INVESTING ACTIVITIES
B00010	Purchase of financial assets at fair value through
	other comprehensive income	-	( 30,466)
B00040	Purchase of financial assets at amortized cost	-	( 227,769)
B02200	Net cash outflow acquired from the subsidiaries	( 56,777)	-
B02700	Payments for property, plant and equipment	( 541,472)	( 390,166)
B02800	Gain on Disposal of property, plant and equipment	543	472
B03700	Increase or Loss in refundable deposits	( 1,230)	( 1,609)
B07100	Increase in prepayments for equipment	50,525	( 166,646)
B07600	Dividend received	21,804	-
BBBB	Net cash used in investing activities	(526,607)	(816,184)
	CASH FLOWS FROM FINANCING ACTIVITIES
C00100	Increase in short-term borrowings	340,000	103,000
C01600	Long-term borrowings	-	240,000
C01700	Repayment of long-term borrowings	( 38,071)	( 7,427)
C04020	Repayment of the principal portion of lease liabilities	( 24,332)	( 24,499)
C04500	Payment – Owners’ Dividend	( 02,118)	( 226,765)
C04600	Cash capital increase	-	487,000
C05800	Changes in equity of non-controlling interests	15,000	-
C09900	Cash outflow from financing activities by associates
	held for sale	6,124	6,746
CCCC	NET CASH GENERATED FROM (USED IN)
	FINANCING ACTIVITIES	(3,397)	578,055
DDDD	EFFECTS OF EXCHANGE RATE CHANGES ON
	THE BALANCE OF CASH HELD IN FOREIGN
	CURRENCIES	1,403	(38,091)
EEEE	NET INCREASE (DECREASE) IN CASH AND
	CASH EQUIVALENTS	( 241,840)	578,787
E00100	CASH AND CASH EQUIVALENTS AT
	BEGINNING OF THE PERIOD	794,606	215,819
E00200	CASH AND CASH EQUIVALENTS AT END OF
	THE PERIOD	$ 552,766	$ 794,606
	The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

13

SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2021 AND 2020 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

1. GENERAL INFORMATION

San Fu Chemical Corporation (the “Company”) was incorporated in the Republic of China (“ROC”) on March 17, 2003. The Company is engaged mainly manufactures and sales of various chemical products. The major shareholders as follow: San Fu Global Co., Ltd. (owned 23.89%), Pilot Keymark SDN. BHD. (owned 19.78%), and other individual shareholders.

The consolidated financial statements comprise the company and its subsidiaries as described in Note 11 (collectively referred to as “the Company”). The Company is engaged mainly in the production and sale of industrial gases, chemical materials and food additives.

The Company’s shares started to be traded on the Taiwan Stock Exchange (“TWSE”) on November 27, 2013.

The consolidated financial statements are presented in the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company’s board of directors on February 26, 2021.

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

• a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the amended “Interest Rate Benchmark Reform - Phase 2” (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16) and the Amendment to the IFRS 16 “Covid-19-Related Rent Concessions after June 30, 2021” endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies.

• b. The International Financial Reporting Standards (IFRS) recognized by FSC applicable in 2022

	Effective Date
New, Amended and Revised Standards and Interpretations	Issued by IASB
“Annual Improvements to IFRS Standards 2018-2020” Cycle	January 1, 2022 (Note 1)
Amendments to IFRS 3 “Reference to the Conceptual Framework”	January 1, 2022 (Note 2)
Amendments to IAS 16 “Property, Plant and Equipment - Proceeds	January 1, 2022 (Note 3)
before Intended Use”
Amendments to IAS 37 “Onerous Contracts - Cost of Fulfilling a	January 1, 2022 (Note4)
Contract ”

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

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• Note 2: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.

• Note 3: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.

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

As of the date the consolidation financial statements were authorized for issue, the Company are continuously assessing the possible impact that the application of other standards and interpretations will have on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

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

	Effective Date
New, Amended and Revised Standards and Interpretations	Issued by IASB (Note 1)
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets	To be determined by IASB
between an Investor and its Associate or Joint Venture”
IFRS 17 “Insurance Contracts”	January 1, 2023
Amendments to IFRS 17	January 1, 2023
Amendments to IFRS 17 ”Comparison information between initial	January 1, 2023
application of IFRS 17 and IFRS 9”
Amendments to IAS 1 “Classification of Liabilities as Current or	January 1, 2023
Non-current”
Amendments to IAS 1 “Disclosure of Accounting Policies”	January 1, 2023 (Note 2)
Amendments to IAS 8 “Definition of Accounting Estimates”	January 1, 2023 (Note 3)
Amendments to IAS 12 “Deferred Tax related to Assets and	January 1, 2022 (Note 4)
Liabilities arising from a Single Transaction”

• Note 1: Unless Specified Otherwise, the above New, Amended and Revised Standards and Interpretations of the IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

• Note 3: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

• Note 4: Except for the recognition of deferred income tax on temporary differences between lease and decommissioning obligations on January 1, 2022, the amendment is applicable to transactions that occur after January 1, 2022. The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.

As of the date the accompanying consolidated financial statements were authorized for issue, the Company continues in evaluating the impact on its financial position and financial performance from the initial adoption of the aforementioned standards or interpretations and related applicable period. The related impact will be disclosed when the Company completes its evaluation .

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

• a. Statement of Compliance

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”).

b. Basis of Preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities,

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices), and

• 3) Level 3 inputs are unobservable inputs for an asset or liability.

• c. Classification of Current and Noncurrent Assets and Liabilities

Current assets include:

• 1) Assets expected to be realized within 12 months after the reporting period; and

• 2) Cash and cash equivalents unless the assets are restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• 1) Liabilities due to be settled within 12 months after the reporting period; and

• 2) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period.

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

The Company is engaged in the construction business, which has an operating cycle of over 1 year. The normal operating cycle applies when considering the classification of the Company’s construction-related assets and liabilities.

• d. Basis of consolidation

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

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

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

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

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. The carrying amounts of the interests of the Company and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

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

e. Business combinations

Acquisitions of businesses are accounted for using the acquisition method. Acquisition-related costs are generally recognized in profit or loss as they are incurred.

Goodwill is measured as the excess of the sum of the consideration transferred and the fair value of the acquirer’s previously held equity interests in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net amount of identifiable assets acquired and liabilities assumed on acquisition date still exceeds the aggregate of the consideration for transfer and the fair value of the acquirer's previously held interest in the acquiree on the acquisition date, the difference is a bargain purchase benefit and immediately recognized as profit or loss.

When a business combination is achieved in stages, the Company’s previously held equity interest in an acquiree is remeasured to fair value at the acquisition date, and the resulting gain or loss is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are recognized on the same basis as would be required if those interests were directly disposed of by the Company.

f. Foreign Currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional currency (i.e. foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income; in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items denominated in a foreign currency and measured at historical cost is stated at the reporting currency as originally translated from the foreign currency.

For the purpose of presenting consolidated financial statements, the functional currencies of the Company and the Company entities (including subsidiaries, associates, joint ventures and branches in other countries that use currencies which are different from the currency of the Company) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in

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other comprehensive income.

On the disposal of a foreign operation (i.e. a disposal of the Company’s entire interest in a foreign operation, or a disposal involving the loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Company losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to the non-controlling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

g. Inventories

Inventories consist of raw materials, supplies, semi-finished goods, work-in-process, finished goods and merchandise and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.

h. Investments in associates and joint ventures

An associate is an entity over which the Company has significant influence and which is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Company and other parties that have joint control of the arrangement have rights to the net assets of the arrangement. The Company uses the equity method to account for its investments in associates and joint ventures.

Under the equity method, investments in an associate and a joint venture are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate and joint venture. The Company also recognizes the changes in the Company’s share of the equity of associates and joint ventures attributable to the Company.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of an associate or a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

When the Company subscribes for additional new shares of an associate and joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the associate and joint venture. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Company’s ownership interest is reduced due to its additional subscription of the new shares of the associate and joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When the Company’s share of losses of an associate and a joint venture equals or exceeds its interest in that associate and joint venture (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the associate and joint venture), the Company discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Company has incurred legal

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obligations, or constructive obligations, or made payments on behalf of that associate and joint venture.

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

The Company discontinues the use of the equity method from the date on which its investment ceases to be an associate and a joint venture. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment’s fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate and the joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate and the joint venture. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate and joint venture on the same basis as would be required had that associate directly disposed of the related assets or liabilities. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Company continues to apply the equity method and does not remeasure the retained interest.

When a group entity transacts with its associate and joint venture, profits and losses resulting from the transactions with the associate and joint venture are recognized in the Company’s consolidated financial statements only to the extent that interests in the associate and the joint venture are not related to the Company.

• i. Property, plant and equipment

Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are measured at cost less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. If a lease term is shorter than the assets’ useful lives, such assets are depreciated over the lease term. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

• j. Impairment of property, plant and equipment, right-of-use asset, and assets related to contract costs

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, and right-of-use asset to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units/the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

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Before the Company recognizes an impairment loss from assets related to contract costs, any impairment loss on inventories, property, plant and equipment and intangible assets related to the contract. Then, impairment loss from the assets related to the contract costs is recognized to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Company expects to receive in exchange for related goods or services less the costs which relate directly to providing those goods or services and which have not been recognized as expenses. The assets related to the contract costs are then included in the carrying amount of the cash-generating unit to which they belong for the purpose of evaluating impairment of that cash-generating unit.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset, cash-generating unit or assets related to contract costs is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset, cash-generating unit or assets related to contract costs in prior years. A reversal of an impairment loss is recognized in profit or loss.

• k. Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

• a) Measurement categories

Financial assets are classified into the following categories: Financial assets at amortized cost and investments in equity instruments at FVTOCI.

• i. Financial assets at amortized cost

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

• i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

• ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, financial assets at amortized cost - current, notes and accounts receivable, and receivable from related parties, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

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

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• i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

• ii) Financial assets that are not credit-impaired on purchase or origination but have subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

• ii. Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

• b) Impairment of financial assets and contract assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including accounts receivable), as well as contract assets.

The Company always recognizes lifetime expected credit losses (i.e. ECLs) for accounts receivable and contract assets. For all other financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and the carrying amounts of such financial assets are not reduced.

• c) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows

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from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

• 2) Financial liabilities

• a) Subsequent measurement

Financial liabilities measured at amortized cost are measured at amortized cost using the effective interest method except the interest from accounts payable and other payables which measured at amortized cost using the effective interest method is not significant.

• b) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

• l. Revenue recognition

The Company identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

• 1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of fine chemicals and basic chemicals. Sales of fine chemicals and basic chemicals are recognized as revenue when the goods are delivered to the customer’s specific location or the goods are shipped because it is the time when the customer [has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers. Accounts receivable are recognized concurrently.

The Company does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

• 2) Revenue from the rendering of services

Revenue from the rendering of services comes from the operating management consulting services and is recognized when services are complete.

• 3) Construction contract revenue

Customers control properties while they are construction in progress, and thus, the Company recognizes revenue over time. The Company measures the progress on the basis of costs incurred relative to the total expected costs as there is a direct relationship between the costs incurred and the progress of satisfying the performance obligations. Contract assets are recognized during the construction and are reclassified to accounts receivable at the point at which the customer is invoiced. If the milestone payments exceed the revenue recognized to date, then the Company recognizes contract liabilities for the difference. Certain payments, which are retained by the customer as specified in the contract, are intended to ensure that the Company adequately completes all of its contractual obligations. Such retention receivables are recognized as contract assets until the Company satisfies its performance obligations.

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When it is not able to reasonably measure the Company’s progress toward satisfaction of the performance obligation but expects to recover costs, the Company recognizes revenue only to the extent of costs incurred.

m. Leasing

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease.

The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses the lessee’s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

n. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

o. Employee benefits

1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees

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have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost, as well as past service cost) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which 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 liabilities represent the actual deficit in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

• p. Share-based payment arrangements

• 1) Employee stock options granted to employees and others providing similar services

The fair value at the grant date of the employee stock options is expensed on a straight-line basis over the vesting period, based on the Company’s best estimates of the number of shares or options that are expected to ultimately vest, with a corresponding increase in capital surplus - employee stock options. It is recognized as an expense in full at the grant date if vested immediately. The grant date of issued ordinary shares for cash which are reserved for employees is the date on which the board of directors approves the transaction.

At the end of each reporting period, the Company revises its estimate of the number of employee stock options expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to capital surplus - employee stock options.

• 2) Issuance ordinary shares for cash which retains portion for employee stock options

The fair value of the stock option is calculated on the date of the grant, and is recognized as an increase in salary expenses and capital surplus. If the employee stock options do not reach the original share reserved for employee to subscribe, the Company will only makes adjustment to the capital surplus since the share option has been vested.

• q. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

• 1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Law in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

• 2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

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Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

• 3) Current and deferred taxes for the year

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity; in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies, management is required to make judgments, estimations, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Company considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

Key Sources of Estimation Uncertainty

Write-down of inventories

The net realizable value of inventories is the estimated selling price in the ordinary course of business less the estimated costs of completion and disposal. The estimation of net realizable value is based on current market conditions and historical experience with product sales of a similar nature. Changes in market conditions may have a material impact on the estimation of the net realizable value.

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6. CASH AND CASH EQUIVALENTS

Cash on hand Demand deposits Cash equivalents (investments with original maturities of less than 3 months) Time deposits	December 31	December 31	December 31
	2021 $ 437 552,329 - $ 552,766		2020 $ 370 524,236 270,000
			$ 794,606

The market rate intervals of cash in the bank, at the end of the reporting period were as follows:

Demand deposits Time deposits	December 31
	2021 2020 0.001%-0.3% 0.001%-0.3% - 0.06%

7. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT

Domestic investments Listed shares Unlisted shares Foreign investments Unlisted shares		December 31	December 31
		2021 $ 27,297 6,698 33,995 52,917 $ 86,912	2020 $ 47,020 6,698 53,718 103,753 $ 157,471

These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Company’s strategy of holding these investments for long-term purposes. These investments of equity instruments were classified as financial assets at fair value through other comprehensive income.

The Company holds 1.42% of the ordinary shares of Global Graphene Group, whose main operating activity is the research and development of graphene-related product technologies. The management of the merged company assessed the delay in the commercialization of Global Graphene Group's graphene technology and the failure to improve its profitability, and recognized the unrealized evaluation loss of financial assets measured at fair value through other comprehensive gains and losses of RMB 49,307,000.

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8. FINANCIAL ASSETS AT AMORTIZED COST

Current Time deposits with original maturities of more than 3 months Restricted demand deposits		December 31	December 31
		2021 $ 11,072 222,400 $ 233,472	2020 $ 11,392 222,400 $ 233,792

The ranges of interest rates for time deposits with original maturities of more than 3 months were approximately 0.06% ~ 0.28% and 0.06 ~ 0.7% per annum as of DECEMBER 31, 2021 AND 2020, respectively.

Refer to Note 31 for information related to investments in financial assets at amortized cost pledge as security.

9. NOTES AND ACCOUNTS RECEIVABLE

Notes receivable Notes receivable - operating Accounts receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss			December 31	December 31	December 31
		$	2021 56,633 $ 1,511,022 6,200 $ 1,504,822	$	2020 43,521 $ 1,051,136 571
		(		(
					$ 1,050,565

The average credit period of sales of goods was 30 to 120 days. In order to minimize credit risk, the management of the Company 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 Company 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 Company’s credit risk was significantly reduced.

The Company measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on accounts receivable are estimated by reference to past default experience of the debtor and an analysis of the debtor’s current financial position.

The Company writes off an accounts receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has declared bankruptcy and also reported to the court. For accounts receivable that have been written off, the Company 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 aging of receivables was as follows:

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December 31, 2021

Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost December 31, 2020 Expected credit loss rate Gross carrying amount Loss allowance (Lifetime ECL) Amortized cost	Not Past Due - $1,494,329 - $1,494,329 Not Past Due - $1,048,944 - $1,048,944	1 to 90 Days - $ 10,447 - $ 10,447 1 to 90 Days - $ 1,621 - $ 1,621	90 to 180 Days 181 to 365 Days - 50% $ 46 $ 5,710 - ( 5,710) $ 46 $ - 90 to 180 Days 181 to 365 Days - 50% $ - $ - - - $ - $ -	Over 365 Days 100% $ 490 ( 490) $ - Over 365 Days 100% $ 571 ( 571) $ -	Indicatio n of Default 100% $ - - $ - Indicatio n of Default 100% $ - - $ -	Total - $1,511,022 ( 6,200) $1,504,822 Total - $1,051,136 ( 571) $1,050,565

The movements of the loss allowance of accounts receivable were as follows:

Balance, Beginning of year Add：Impairment losses for the year Less：Actual write-offs for the year Balance, Ending of year	For the Year Ended December 31
	2021 2020 $ 571 $ 571 5,710 - ( 81) - $ 6,200 $ 571

10. INVENTORIES

INVENTORIES
Merchandise Finished goods Work in progress Semi-finished goods Supplies and Spare Parts Raw materials		December 31
		2021 $ 13,851 208,272 11,032 1,988 26,541 458,141 $ 719,825	2020 $ 6,393 126,398 11,261 1,883 20,742 226,800 $ 393,477

The cost of inventories recognized as cost of goods sold (including construction cost) for the years ended DECEMBER 31, 2021 AND 2020 was $3,584,780 thousand and $2,957,612 thousand, respectively.

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The cost of goods sold included inventory write-downs reserved $60 thousand and inventory write-downs $5,961 thousand for the years ended DECEMBER 31, 2021 AND 2020, respectively.

11. SUBSIDIARIES

Subsidiaries included in the consolidated financial statements

Investor Investee Nature of Activities San Fu Chemical Co., Ltd. San Fu Specialty Chemicals Investments Limited Investment San Fu Food Additives Investments Limited (Note 1) Investment VinaSanFu Industrial Gas Company Limited Production of industrial gases VinaSanFu Material Company Limited Production of industrial materials San Fu Biotech Co., Ltd. (Note 3) Sales and production of food additives International Nitto Technology Co., Ltd. Lifu Carbonate Co., Ltd. (Note 2) Sales and production of electronic components Production of chemicals San Fu Specialty Chemicals Sino Star Holding Limited Investment Investments Limited	Proportion of Ownership (%)
	December 31
	2021 2020 100 100 - 100 100 100 100 100 93 100 100 87 100 25 100 100

Note 1: It was liquidated and dissolved in May 2021.

• Note 2: On May 5, 2021, the board of directors of the Company resolved to acquire 62% equity of Lifeng Carbon Co., Ltd. originally held by Lifong Carbon Dioxide Co., Ltd., and the merged company completed the relevant transactions in the second quarter of 2021. Since May 10, 2021, the Company's shareholding ratio in Lifu Carbonic Acid Co., Ltd. has increased from 25% to 87%. Therefore, the investment-related enterprises that were originally evaluated by the equity method were converted into subsidiaries and recognized as disposal investments. The benefit was RMB 22,797,000.

• Note 3: On December 20, 2021, the Company did not subscribe for the cash capital increase of Sanfu Biotech Co., Ltd. in proportion to its shareholding, resulting in a decrease in the shareholding ratio from 100% to 93%.

12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates Investments in joint ventures		December 31	December 31
		2021 $ 51,488 404,839 $ 456,327	2020 $ 58,949 346,134 $ 405,083

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The share of total comprehensive income for the years ended December 31, 2021 and 2020 was $82,237 thousand and $6,126 thousand, respectively.

a. Investments in associates

Associates that are not individually material		December	31
		2021 $ 51,488	2020 $ 58,949

Aggregate information of associates that are not individually material

The Company’s share of: Net profit for the year Other comprehensive (loss) income Total comprehensive income for the year	For	the Year Ended December 31	the Year Ended December 31
	(	2021 $ 749 ) ( 1,709 ( $ 960 (	2020 $ 2,590 ) 1,563) $ 4,153)

Except for one associate that are not individually material, other investments of associates that are not individually material accounted for using equity method and the Company’s share of profit or loss and other comprehensive income of those investments were calculated based on financial statements which have not been audited. The Company’s management believes there will be no material impact on the equity method accounting or the calculation of the share of profit or loss and other comprehensive income from the financial statements of those investments which have not been audited.

b. Investments in joint ventures

December 31 2021 2020 Material joint ventures Sanfuming Electronic Material Co., Ltd. $ 404,839 $ 346,134 Proportion of Ownership and Voting Rights Principal Place of December 31 Name of Associate Nature of Activities Business 2021 2020 Sanfuming Electronic Material Co., Ltd. International trading Shanghai, China 50% 50%		December 31	December 31
			2020 $ 346,134 Proportion of Ownership and Voting Rights
			December 31
			2021 2020 50% 50%

All the joint ventures are accounted for using the equity method.

The financial information in respect of each of the Company’s material joint ventures is summarized as follows. The summarized financial information below represents the amounts shown in the joint ventures’ financial statements prepared in accordance with IFRSs adjusted by the Company for equity accounting purposes.

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Sanfuming Electronic Material Co., Ltd.

Cash and cash equivalents Current assets Non-current assets Current liabilities Non-current liabilities Equity Proportion of the Company’s ownership Equity attributable to the Company Other adjustments (gain of losing control in subsidiaries) Other adjustments (exchange rate affect) Carrying amount Operating revenue Depreciation expenses and amortizatin expenses Interest income Income tax expenses Net profit for the year Other comprehensive income (loss) Total comprehensive income for the year			December 31
	2021 2010 $ 111,141 $ 111,217 $ 759,414 $ 503,171 206,139 213,670 ( 215,675) ( 87,881) (1,728) - $ 748,150 $ 628,960 50% 50% $ 374,075 $ 314,480 $32,643 $32,643 (1,879) (989) $ 404,839 $ 346,134 For the Year Ended December 31
			2021 2020 $ 1,359,034 $ 934,624 $ 21,786 $ 21,490 $ 384 $ 379 $ 54,536 $ 6,105 $ 165,972 $ 17,432 ( 5,540) 5,656 $ 160,432 $ 23,088
			$
			$

13. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2021 Reclassifications Additions Disposals Acquisition from business combination Effect of foreign currency exchange differences Balance at December 31, 2021		Land Buildings	Land Buildings	Equip- ment Transpor - tation	Equip- ment Transpor - tation	Other Equip- ment Property under Construc - tion	Other Equip- ment Property under Construc - tion	Total $ 4,157,393 61,809 553,130 37,175 ) 112,426 32,247 $ 4,879,830 (Continued)
		$ 63,707 - - - 98,993 - $ 162,700	$ 1,069,711 7,182 65,962 - ( 697 2,054 $ 1,145,606	$ 1,970,226 69,819 144,063 33,615 ) ( 8,195 3,398 $ 2,162,086	$ 348,403 - 4,714 359 ) ( 6 69 $ 352,833	$ 373,247 8,905 ( 33,837 3,201 ) 4,535 - $ 417,323	$ 332,099 24,097 ) 304,554 - ( - 26,726 $ 639,282

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Accumulated depreciation and impairment Balance at January 1, 2021 Depreciation expenses Disposals Effect of foreign currency exchange differences Balance at December 31, 2021 Carrying amounts at December 31, 2021 Cost Balance at January 1, 2020 Reclassifications Additions Disposals Reclassify to held for sale Effect of foreign currency exchange differences Balance at December 31, 2020 Accumulated depreciation and impairment Balance at January 1, 2020 Depreciation expenses Disposals Reclassify to held for sale Balance at December 31, 2020 Carrying amounts at December 31, 2020

Land Buildings Equipme nt Transpor tation Other Equipme nt Property under Construc tion Total $ - $ 408,606 $1,420,700 $ 286,058 $ 265,419 $ - $2,380,783 - 55,940 135,681 19,222 46,953 - 257,796 - - ( 33,341 ) ( 359 ) ( 3,206 ) - ( 36,906 ) - 22 36 - - - 58 $ - $ 464,568 $1,523,076 $ 304,921 $ 309,166 $ - $2,601,731 $ 162,700 $ 681,038 $ 639,010 $ 47,912 $ 108,157 $ 639,282 $2,278,099 $ 63,707 $ 894,469 $1,968,749 $ 348,431 $ 318,465 $ 79,832 $3,673,653 - 11,826 40,968 55 37,358 ( 24,815 ) 65,392 - 7,965 36,002 2,211 25,592 286,958 358,728 - - ( 81,238 ) ( 2,294 ) ( 8,489 ) - ( 92,021 ) - 155,451 5,745 - 321 - 161,517 - - - - - ( 9,876) ( 9,876) $ 63,707 $1,069,711 $1,970,226 $ 348,403 $ 373,247 $ 332,099 $4,157,393 $ - $ 345,218 $1,371,162 $ 267,430 $ 242,863 $ - $2,226,673 - 56,214 128,670 20,482 30,854 - 236,220 - - ( 81,238 ) ( 1,854 ) ( 8,417 ) - ( 91,509 ) - 7,174 2,106 - 119 - 9,399 $ - $ 408,606 $1,420,700 $ 286,058 $ 265,419 $ - $2,380,783 $ 63,707 $ 661,105 $ 549,526 $ 62,345 $ 107,828 $ 332,099 $1,776,610 (Concluded)

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

Buildings Main building 3-45 years Employee dormitory 25-50 years Firefighting, air-conditioning and other systems 1-8 years Engineering system 3-38 years Transportation 1-8 years Equipment 1-27 years Other equipment 1-25 years

Property, plant and equipment pledged as collateral for bank borrowings is set out in Note 31.

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14. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amounts Land Buildings Transportation equipment		December 31	December 31
		2021 $ 122,939 6,687 7,585 $ 137,211	2020 $ 130,851 2,101 8,478 $ 141,430

Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Transportation equipment	For	the Year Ended December 31	the Year Ended December 31
		2021 $ 19,718 $ 16,875 5,821 3,581 $ 26,277	2020 $ 12,196 $ 17,028 5,755 3,848 $ 26,631

b. Lease liabilities

Carrying amounts Current Non-current		December 31	December 31
		2021 $ 22,427 49,940 $ 72,367	2020 $ 19,611 59,806 $ 79,417

Range of discount rates for lease liabilities are as follows:

Land Buildings Transportation equipment	December 31
	2021 2020 1.03%～2.5% 1.03%～2.5% 1.03% 1.03% 1.03% 1.03%

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c. Other lease information

Expenses relating to short-term leases Expenses relating to low-value asset leases Total cash outflow for leases	For	the Year Ended December 31	the Year Ended December 31
	(	2021 $ 2,996 $ 941 $ 22,889) (	2020 $ 2,490 $ 1,054 $ 29,335)

The Company leases certain transportation equipment and buildings which qualify as short-term leases and certain photocopiers which qualify as low-value asset leases. The Company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

15. BORROWINGS

a. Short-term borrowings

Secured borrowings (Note 31) Bank loans Unsecured borrowings Bank loans		December 31	December 31
		2021 $ 280,000 650,000 $ 930,000	2020 $ 250,000 340,000 $ 590,000

The range of weighted average effective interest rates on bank loans was 0.78%-1.02% and 0.83%-1.1% per annum as of December 31, 2021 and 2020, respectively.

b. Long-term borrowings

Unsecured borrowings Bank loans Less: Current portion matured within a year Long-term borrowings		December 31	December 31
	(	2021 $ 194,502 90,572) ( $ 103,930	2020 $ 232,573 38,072) $ 194,501

The range of weighted average effective interest rates on bank loans was 1.175%-1.25% per annum as of December 31, 2021 and 2020, respectively.

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16. NOTES AND ACCOUNTS PAYABLE

Notes payable Accounts payable		December 31	December 31
		2021 $ 479 501,601 $ 502,080	2020 $ 479 250,316 $ 250,795

The average payment period of purchasing raw materials and supplies was two months. The Company has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

17. OTHER PAYABLES

Other payables Payable for accrued expenses Payable for constructions Payable for purchases of equipment		December 31	December 31
		2021 $ 301,200 16,935 22,851 $ 340,986	2020 $ 156,986 16,512 11,616 $ 185,114

18. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company, San Fu Biotech Co., Ltd., and International Nitto Technology Co., Ltd. have adopted a pension plan under the Labor Pension Act (the “LPA”), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

b. Defined benefit plans

The defined benefit plans adopted by the Company in accordance with the Labor Standards Law is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contribute amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (“the Bureau”); the Company has no right to influence the investment policy and strategy.

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The amounts included in the consolidated balance sheets in respect of the Company’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities	Years Ended December 31	Years Ended December 31	Years Ended December 31
	(	2021 $ 132,399 104,608) ( $ 27,791	2020 $ 127,837 103,299) $ 24,538

Movements in net defined benefit liabilities were as follows:

Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Balance at January 1, 2020 $ 125,533 ( $ 87,619 ) Service cost Current service cost 666 - Net interest expense (income) 941 ( 711) Recognized in profit or loss 1,607 ( 711) Remeasurement Return on plan assets (excluding amounts included in net interest) - ( 2,679 ) ( Actuarial loss Changes in financial assumptions 3,812 - Experience adjustments 1,050 - Recognized in other comprehensive income 4,862 ( 2,679) Contributions from the employer - ( 16,455 ) ( Benefits paid ( 4,165) 4,165 Balance at December 31, 2020 $ 127,837 ($ 103,299) Balance at January 1, 2021 $ 127,837 ( $ 103,299 ) Service cost Current service cost 621 Net interest expense (income) 475 ( 385) Recognized in profit or loss 1,096 ( 385) Remeasurement Return on plan assets (excluding amounts included in net interest) 2,993 ( 1,419 ) Actuarial loss Changes in financial assumptions ( 2,458 ) - ( Experience adjustments 5,009 - Recognized in other comprehensive income 5,544 ( 1,419) Contributions from the employer - ( 1,583 ) ( Benefits paid ( 2,078) 2,078 Balance at December 31, 2021 $ 132,399 ($ 104,608)

Net Defined Benefit Liabilities $ 37,914 666 230 896 2,679 ) 3,812 1,050 2,183 16,455 ) - $ 24,538 $ 24,538 621 90 711 1,574 2,458 ) 5,009 4,125 1,583 ) - $ 27,791

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An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

Operating costs Selling and marketing expenses General and administrative expenses Research and development expenses	Years Ended December 31	Years Ended December 31	Years Ended December 31
		2021 $ 431 76 196 8 $ 711	2020 $ 539 109 236 12 $ 896

Through the defined benefit plans under the Labor Standards Law, the Company is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans’ debt investments.

• 3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rates Long-term averaged pay rates	December 31
	2021 2020 0.625% 0.375% 2.000% 2.000%

If possible reasonable changes in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease		December 31	December 31
	( (	2021 $ 2,426) ( $ 2,501 $ 2,423 $ 2,363) (	2020 $ 2,561) $ 2,645 $ 2,556 $ 2,489)

The sensitivity analysis presented above may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

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Expected contributions to the plans for the next year Average duration of the defined benefit obligation		December 31	December 31
		2021 $ 1,583 7.4 years	2020 $ 16,455 8.1 years

19. EQUITY

• a. Capital stock

Ordinary shares

Ordinary shares
Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		December 31
		2021 120,000 $ 1,200,000 100,706 $ 1,007,060	2020 120,000 $ 1,200,000 100,706 $ 1,007,060

On August 6, 2020, the Company’s board of directors resolved to issue 10,000 thousand ordinary shares with a par value of $10, for a consideration of $48.7 per share which increased the Capital stock issued and fully paid to $1,007,060 thousand. On October 8, 2020, the above transaction was approved by the FSC, and the subscription base date was determined by the board of directors to be December 1, 2020.

• b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to Capital stock (1) Issuance of ordinary shares Donations (Note 30) May be used to offset a deficit only Exercised employee stock options (2) Expire employee stock options (2) Recognition of changes in ownership interests in subsidiaries (3)		December 31	December 31
	(	2021 $ 870,611 34,043 54,804 2,151 859 $ 960,750	2020 $ 971,317 27,919 54,804 2,151 -
			$ 1,056,191

1. Capital surplus in excess of par or from donations may be used to offset a deficit. When the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred once a year to Capital stock within a certain percentage of the Company’s paid-in capital.

2. The capital surplus resulting from exercised or expired employee stock options shall only be used to offset a deficit.

3. This type of capital surplus is the amount of equity transaction impact recognized due to changes in the Company’s equity when the company has not actually acquired or disposed of equity in a subsidiary company, or the adjusted amount recognized by the company as a subsidiary's capital surplus using the equity method.

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c. Retained earnings and dividends policy

The shareholders of the Company held their regular meeting on June 13, 2019 and in that meeting, resolved the amendments to the Company’s Articles of Incorporation (the “Articles”). The amendments explicitly stipulate that the proposal for profit distribution or offsetting of losses should be made on a quarterly basis after close of each quarter. The board of directors is authorized to adopt a special resolution to distribute dividends and bonuses in cash and a report of such distribution should be submitted in the shareholders’ meeting.

Under the dividends policy as set forth in the amended Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve of 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be the basis for proposing the dividend distribution plan. The board of directors is authorized to adopt a special resolution to distribute dividends and bonuses in cash and a report of such distribution should be submitted in the shareholders’ meeting. For the policies on the distribution of employees’ compensation and remuneration of directors and supervisors after the amendment, refer to employees’ compensation and remuneration of directors and supervisors in Note 21-e.

The distribution of the Company's dividends depends on the current year's surplus and the principle of distribution is to keep dividends stable. As the Company is currently growing, the Company takes into consideration of the its future capital demand and long-term financial planning while allocating dividends. In principle, cash dividends should be no less than 5% of the total dividends distributed. However, shareholders may adjust the percentage of appropriation depending on the Company’s actual profit and capital situation.

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. The legal reserve may be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865, and Rule No. 1010047490 issued by the FSC and in the directive titled “Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs” should be appropriated to or reversed from a special reserve by the Company. For the subsequent reversal of the other shareholders' equity deductions, the Company may distribute the surplus limited to the reversal.

The appropriations of earnings for 2020 and 2019 were approved in the shareholders’ meetings on July 5, 2021 and June 16, 2020, respectively, were as follows:

Legal reserve Special reserve Cash dividends Cash dividends per share	For	the Year Ended December 31	the Year Ended December 31
		2020 $ 40,984 $ 47,055 $ 201,412 $ 2.0	2019 $ 32,447 $ 49,851 $ 199,553 $ 2.2

The appropriations of 2020quarterly earnings have been approved by the Company’s Board of Directors in its meeting, respectively. The appropriations and cash dividends per share were as follows:

Resolution Date of the Company’s Board of Directors in its Meeting Cash dividends to shareholders Cash dividends per share (NT$)	Fourth Quarter of 2020 February 26, 2021 $ 201,412 $ 2.0	Third Quarter of 2020 November 8, 2020 $ - $ -		Second Quarter of 2020 August 9, 2020 $ - $ -	First Quarter of 2020	First Quarter of 2020
						May 5, 2020 $ - $ -

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The Company's shareholders’ meeting approved distributing cash dividends $100,706 thousand and 27,212 thousand ($ 1.0 and $0.3 dollars per share) with capital reserves on July 5, 2021 and June 16, 2020 respectively.

The appropriation of earnings for 2021 had been approved by the Company’s Board of Directors on February 25, 2022 were as follows:

	For the Year
	Ended
	December 31,
	2021
Legal reserve	$ 67,034
Special reserve	$ 21,446
Cash dividends	$ 302,118
Cash dividends per share	$ 3.0

The appropriations of 2021 quarterly earnings have been approved by the Company’s Board of Directors in its meeting, respectively. The appropriations and cash dividends per share were as follows:

Resolution Date of the Company’s Board of Directors in its Meeting Cash dividends to shareholders Cash dividends per share (NT$)	Fourth Quarter of 2021 February 25, 2022 $ 302,118 $ 3.0	Third Quarter of 2021 November 5, 2021 $ - $ -		Second Quarter of 2021 August 6, 2021 $ - $ -	First Quarter of 2021	First Quarter of 2021
						May 5, 2021 $ - $ -

• d. Special reserve

Beginning at January 1 Appropriations in respect of Debits to other equity items Balance at December 31	For	the Year Ended December 31	the Year Ended December 31
		2021 $ 56,293 47,055 $ 103,348	2020 $ 6,442 49,851 $ 56,293

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e. Non-Controlling Interests

For the Year Ended December 31, 2021 $ - ( 933 )

Balance 1t January 1, 2021 $ - Share attributable to non-controlling interests Net profit for the current period ( 933 ) Acquire increased non-controlling interests of the Company's Subsidiaries （ Note 25 ） 15,208 Non-controlling interests subscribed for cash capital increase of the Company's Subsidiaries （ Note 26 ） 15,000 Changes in ownership interests in subsidiaries （ Note 26 ） 859 Employee stock options of the Company's Subsidiaries 1,752 Balance 31, 2021 $ 31,886

The board of directors meeting of the Company held on May 5, 2021 has approved to obtain 62% of share owned by Lifu Carbonate Co., Ltd., originally held by Li Fong Carbon Dioxide Co., Ltd. at NT$70,060,000 on May 10, 2021

20. REVENUE

Revenue from sale of goods Construction contract revenue	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2021 $ 4,641,307 138,578 $ 4,779,885	2020 $ 3,394,693 424,023
			$ 3,818,716

Contract Balances

Contract assets Properties construction - current Properties construction - non-current Contract liabilities Properties construction - current Sale of goods- current		December 31	December 31
		2021 $ 8,200 - $ 8,200 $ 182,441 20,790 $ 203,231	2020 $ 8,730 5,941 $ 14,671 $ 154,478 2,444 $ 156,922

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21. NET PROFIT

a. Other income

Dividends Rendering of services Subsidies Others	For	the Year Ended December 31	the Year Ended December 31
		2021 $ 1,593 14,492 3,500 11,178 $ 30,763	2020 $ 1,092 26,535 - 14,314 $ 41,941

b. Other gains and losses

(Losses) gains from disposal of property, plant and equipment Gains from disposal of subsidiaries Gains from disposal of investment using equity method Net foreign exchange losses Others	For	the Year Ended December 31	the Year Ended December 31
	( (	2021 $ 274 ( 424 22,797 14,875 ) ( 6,084) ( $ 2,536 (	2020 $ 40 ) - - 10,847 ) 199) $ 11,086)

• c. Depreciation

Properties, plants and equipment Right-of-use assets An analysis of depreciation by function Operating costs Operating expenses	For	the Year Ended December 31	the Year Ended December 31
		2021 $ 257,796 26,277 $ 284,073 $ 253,310 30,763 $ 284,073	2020 $ 236,220 26,631 $ 262,851 $ 239,733 23,118 $ 262,851

d. Employee benefits expense

Post-employment benefits Defined contribution plans Defined benefit plans (Note 18) Share-based payments compensation costs Short-term benefits Salaries Labor and health insurance Others Total employee benefits expense	For	the Year Ended December 31	the Year Ended December 31
		2021 $ 12,035 711 1,752 $ 333,613 28,270 53,227 $ 429,608	2020 $ 11,186 896 19,031 $ 296,892 24,366 46,924 $ 399,295

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An analysis of employee benefits expense by function Operating costs Operating expenses	$ 210,296 219,312 $ 429,608	$ 191,284 208,011 $ 399,295

• e. Employees’ compensation and remuneration of directors and supervisors

The Company accrued employees’ compensation and remuneration of directors and supervisors at rates of 1%-3% and no higher than 3%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors and supervisors. The employees’ compensation and the remuneration of directors and supervisors for the years ended December 31, 2021 and 2020, which were approved by the Company’s board of directors on February 25, 2022 and February 26, 2021, respectively, are as follows:

Accrual rate

Employees’ compensation Remuneration of directors and supervisors Amount Employees’ compensation Remuneration of directors and supervisors	For the Year Ended December 31	For the Year Ended December 31
	2021 2020 1.95% 1.90% 1.95% 1.90% For the Year Ended December 31
	2021 Cash $ 16,600 16,600	2020
		Cash $ 9,800 9,800

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

The Company held board of directors’ meetings on February 25, 2022, February 26, 2021 and February 25, 2020, and those meetings resulted in the actual amounts of the employees’ compensation and remuneration of directors and supervisors paid for 2021, 2020 and 2019 to differ from the amounts recognized in the consolidated financial statements for the years ended December 31, 2021, 2020 and 2019, respectively. The differences were adjusted to profit and loss for the years ended December 31, 2022, 2021 and 2020, respectively.

Amounts approved in the board of directors’ meeting Amounts recognized in the annual consolidated financial statements	For	the Year Ended December 31	the Year Ended December 31
	2021 Employees, Compensation Remuneration of Directors and Supervisors $ 16,588 $ 16,588 $ 16,600 $ 16,600	2020 Employees, Compensation Remuneration of Directors and Supervisors $ 10,547 $ 10,547 $ 9,800 $ 9,800	2019
			Employees, Compensation Remuneration of Directors and Supervisors $ 9,424 $ 9,424 $ 7,540 $ 7,540

Information on the employees’ compensation and remuneration of directors and supervisors approved by the Company’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

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f. Finance costs

Interest on bank loans Interest on lease liabilities	For	the Year Ended December 31	the Year Ended December 31
		2021 $ 8,060 1,081 $ 9,141	2020 $ 5,638 1,292 $ 6,930

• g. Gains or losses on foreign currency exchange

Foreign exchange gains Foreign exchange losses Net losses	For	the Year Ended December 31	the Year Ended December 31
	( (	2021 $ 21,884 36,759) ( $ 14,875) (	2020 $ 16,875 27,722) $ 10,847)

22. INCOME TAX

• a. Income tax recognized in profit or loss

Major components of income tax expense are as follows:

Current tax In respect of the current period Adjustments for prior periods ( Deferred tax In respect of the current period Income tax expense recognized in profit or loss	Years Ended December 31 2021 2020 $ 157,572 $ 94,913 3,592) ( 1,410) 153,980 93,503 2,710 9,244 $ 156,690 $ 102,747

Adjustments of accounting profit and income tax expense are as follows:

Profit before tax Income tax expense calculated at the statutory rate (20%) Nondeductible expenses in determining taxable income Tax-exempt income Additional income for tax purpose Unrecognized deductible temporary differences Adjustments for prior years’ tax Income tax expense recognized in profit or loss	Years Ended December 31	Years Ended December 31	Years Ended December 31
		2021 $ 829,400 $ 165,880 1,213 ($ 747) 1,225 (7,291) ( 3,590) $ 156,690	2020 $ 502,220 $ 100,444 1,341 ($ 218) 1,349 1,241 ( 1,410) $ 102,747
		$ $

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b. Income tax expense recognized in other comprehensive income

Deferred Income Tax

eferred Income Tax
Related to unrealized gain/loss on investments in equity instruments at FVTOCI Related to remeasurement of defined benefit plan		Years Ended December 31
			2021 $ 9,861 825 $ 10,686	2020 $ 1,279 437 $ 1,716

c. Current tax liabilities

Current tax liabilities
Current tax liabilities Income tax payable		Years Ended December 31
			2021 $ 108,570	2020 $ 64,497

Prepaid income tax of $46,851 thousand and $28,530 thousand has been deducted from the income tax payable for 2021 and 2020, respectively.

• d. Deferred income tax assets and liabilities

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

For the year ended December 31, 2021

							Acquired
					Recognized		from
	Balance,		Recognized		in Other		business
	Beginning		in Profit or		Comprehens		combination		Balance,
	of Year		Loss		ive	Income	取得		End of Year
Deferred income tax assets
Temporary differences
Defined benefit plan	$	4,907	( $	174 )	$	825	$	-	$ 5,558
Property, plant and
equipment		3,804	(	773 )		-		-	3,031
Investments
accounted for using the
equity method		3,460	(	3,460 )		-		-	-
Payables for annual
leave		1,165		194		-		-	1,359
Allowance for
impairment loss	$	1,429	$	221	$	-	$	-	$ 1,650
Unrealized exchange
loss		994		127		-		-	1,121
FVOCI financial
assets		2,544		-		9,861		-	12,405
Others		8,613		1,047		-		-	9,660
	$	26,916	( $	2,818 )	$	10,686	$	-	$ 34,784
Deferred income tax liabilities
Temporary differences
Property, plant and
equipment	$	-	$	-	$	-	$ 8,474		$ 8,474
Others		108	(	108 )		-		-	-
	$	108	( $	108 )	$	-	$ 8,474		$ 8,474
									(Continued)

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For the year ended December 31, 2020

					Recognized in	Recognized in
		Balance,				Other
	Beginning of		Recognized in		Comprehensive		Balance, End of
		Year	Profit or Loss			Income	Year
Deferred income tax assets
Temporary differences
Defined benefit obligations	$	7,582	( $	3,112 )	$	437	$	4,907
Property, plant and equipment		7,000	(	3,196 )		-		3,804
Investments accounted for using
the equity method		3,460		-		-		3,460
Payables for annual leave		1,049		116		-		1,165
Allowance for impairment loss		1,627	(	198 )		-		1,429
Unrealized exchange loss		1,442	(	448 )		-		994
FVOCI financial assets		1,265		-		1,279		2,544
Others		10,911	(	2,298)		-		8,613
	$	34,336	($	9,136)	$	1,716	$ 26,916
Deferred tax liabilities
Temporary differences
Others	$	-	$	108	$	-	$	108
								(Concluded)

• e. The aggregate amount of temporary differences associated with investments for which deferred tax liabilities have not been recognized

As of December 31, 2021 and 2020, the taxable temporary differences associated with investments in subsidiaries and associates for which no deferred tax liabilities have been recognized were $46,851 thousand and $53,318 thousand, respectively.

• f. Income tax assessments

Income tax returns of the Company, San Fu Biotech Co., Ltd., International Nitto Technology Company Limited and Lifu Carbonate Co., Ltd. through 2019 have been assessed by the tax authorities.

23. EARNINGS PER SHARE (EPS)

Basic earnings per share Basic earnings per share Diluted earnings per share Diluted earnings per share	Unit: NT$ Per Share Years Ended December 31 2021 2020 $ 6.69 $ 4.36 $ 6.68 $ 4.36	Unit: NT$ Per Share Years Ended December 31 2021 2020 $ 6.69 $ 4.36 $ 6.68 $ 4.36
		2021 $ 6.69 $ 6.68

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

Net Profit for the Year

Profit for the year		Years Ended December 31	Years Ended December 31
		2021 $ 673,643	2020 $ 399,473

The weighted average number of ordinary shares outstanding (in thousand shares) is as follows:

Number of ordinary shares Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares Employees’ compensation Weighted average number of ordinary shares used in the computation of diluted earnings per share		Years Ended December 31	Years Ended December 31
		2021 100,706 121 100,827	2020 91,553 151 91,704

If the Company offered to settle the compensation or bonuses paid to employees in cash or shares, the Company assumed that the entire amount of the compensation or bonuses will be settled in shares, and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

24. SHARE-BASED PAYMENT ARRANGEMENTS

a. Employee restricted stock awards

The compensation costs due to issuance of ordinary shares for cash granted by employee in October 2020 were priced using the Black-Scholes pricing model, and the inputs to the model are as follows:

Grant-date share price Exercise price Expected volatility Expected life (in days) Expected dividend yield Risk-free interest rate	October 2021
	$69.00 $48.70 39.75% 29 - 0.14%

Expected volatility is based on the back calculation of the grant-date which uses the Company’s daily annualized standard deviation of returns as hypotheses.

Compensation costs recognized were $19,031 thousand for the year ended December 31, 2020.

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b. Cash-settled share-based payment arrangements

On October 12, 2021, the board of directors’ meeting of Sanfu Biotech Co., Ltd. passed the resolution to issue new shares in 2021. According to the Company Law, 1,500,000 shares of 15% of the total number of new shares were reserved for subscription by employees of the merged company who met certain conditions. If employees have undersubscribed or given up the subscribed shares, the chairman shall be authorized to contact a specific person to subscribe for them.

The compensation costs due to issuance of ordinary shares for cash granted by employee in November 2021 were priced using the Black-Scholes pricing model, and the inputs to the model are as follows:

Grant-date share price Exercise price Expected volatility Expected life (in days) Expected dividend yield Risk-free interest rate	November 2021
	$11.43 $ 10 8.02% 0.03 - 0.177%

The expected volatility used in the evaluation of stock options for employees is based on the average volatility of the Company’s stock price by reversing the duration of the period as the basis for forecasting.

Compensation costs recognized were $1,752 thousand for the year ended December 31, 2021.

25. MERGER (BUSINESS COMBINATION)

• a. Acquisition of Subsidiary

Lifu Carbon Acid Co., Ltd.	Major Operating Activity Acquisition Date Ownership with Voting Rights/ Acquisition Ratio (%) Transfer Consideration	Major Operating Activity Acquisition Date Ownership with Voting Rights/ Acquisition Ratio (%) Transfer Consideration
	Carbon dioxide manufacturing plant May 10, 2021 62%	$ 70,060

The main purpose of this acquisition is to increase the Company’s customer base and operate carbon dioxide business, which will bring performance growth, increase profits and create more value to the Company’s merger.

• b. Assets Acquired and Liabilities Assumed on the Acquisition Date

Current assets Cash and cash equivalents Other Non-current assets Real estate, plant and equipment Other Current liabilities Other Non-current liabilities Deferred income tax liabilities	Lifu Carbon Acid Co., Ltd.	Lifu Carbon Acid Co., Ltd.	Lifu Carbon Acid Co., Ltd.
	( (		$ 13,283 59 112,426 17 323 ) 8,474) $ 116,988

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c. Non-controlling Interests (Minority Interests)

The non-controlling interest (13% ownership interest) of Lifu Carbon Acid Co., Ltd. was measured at the fair value of the identifiable net assets at the acquisition date of NT$ 116,988 thousand

• d. Bargain Purchase Gain Arising from Acquisitions

argain Purchase Gain Arising from Acquisitions
	Lifu Carbon Acid Co.,	Ltd.
Transfer consideration	$	70,060
Add: Measure the original equity of Lifu Carbonic Acid
based on fair value (*Note)		31,348
Add: Non-controlling interests		15,208
Less: The fair value of the identifiable net assets obtained	(	116,988)
Cheap purchase benefits arising from acquisitions	($	372)

The bargain purchase gain arising from the acquisition of Lifu Carbonic Acid Co., Ltd. was the difference between the transfer consideration and the fair value of the identifiable net assets obtained from the acquisition, and this bargain purchase gain was recognized as the current profit and loss.

• *Note : The fair value was estimated using the income method, and the main assumptions used to determine the fair value were as follows:

  1. The discount rate was 7.2%;

  2. The long-term sustained growth rates were 4.2% to 5.5%; and

  3. Make adjustments to factors considered by market participants (including the lack of market liquidity of the stock, etc.).

• e. Net Cash Outflow from Acquiring Subsidiaries

Cash payment consideration Less: cash obtained and cash equivalent balance	Lifu Carbon Acid Co., Ltd.
	( $ 70,060 ) 13,283 ($ 56,777)

• f. The impact of business mergers on business results

Since the acquisition date, the operating results from the acquired company were as follows:

Operating revenue Net loss for the period	Lifu Carbon Acid Co., Ltd.	Lifu Carbon Acid Co., Ltd.
	(	$ -
		$ 6,498)

If business combinations occurred on the beginning of the fiscal year to which the acquisition date belongs, the proposed operating revenue and proposed net profit of the Company from January 1 to December 31, 2021 will be NT$4,776,980 thousand and NT$ 671,572 thousand respectively. Such amounts cannot reflect the actual revenue and operating results of the Company if the business combination was completed on the start date of the acquisition year, and should not be used to predict future operating results.

26. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

Sanfu Biotech Co., Ltd. increased its capital in cash on December 20, 2021 and allowed its employees to subscribe for shares, resulting in a decrease in the shareholding ratio of the Company from 100% to 93.48%.

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	Sanfu Biotech	Sanfu Biotech	Co., Ltd.
Cash consideration received		$	15,000
Carrying amount of the subsidiary's net assets calculated based
on the change in relative equity and the amount to be
transferred out of non-controlling interests	(		15,859)
Equity trade difference	(	$	859)
Adjustment of Equity trade difference
Capital reserve - recognition of changes in ownership equity of
subsidiaries	(	$	859)

27. NON-CASH TRANSACTION

For the years ended December 31, 2021 and 2020, the Company entered into the following non-cash investing and financing activities which were not reflected in the consolidated statements of cash flows:

The Company reclassified and paid for property, plant and equipment partly during 2021 and 2020 (Notes 13 and 17).

Prepayments for equipment transferred (reclassification) Acquisition of assets from subsidiaries Purchase of property, plant and equipment (Increase)/Decrease in payable of construction payment and purchases of equipment Paid in cash by acquiring property, plant and equipment	Years Ended December 31	Years Ended December 31
	2021 $ 61,809 $ 112,426 $ 553,130 ( 11,658) $ 541,472	2020 $ 65,392 $- $ 358,728 31,438 $ 390,166

28. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

As for the strategy of the Company’s capital structure management, the Company sets its suitable market share according to its industry scale, the growth of the industry and the blueprint of the product development. The Company estimates the required capacity, the equipment and related capital expenditure to be used. Then the Company calculates working capitals and cash on the basis of the industry character to support a complete plan for its long-term development. Finally, the Company estimates not only the possible contribution margin, operating profit ratio and cash flows according to the product competitiveness but also risk factors such as the fluctuation of the business circle and the life circle of the product to decide the suitable capital structure. The management inspects capital structures periodically and considers the possible costs and risks taken by different capital structures. In general, the Company adopts a prudent risk management strategy.

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29. FINANCIAL INSTRUMENTS

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

The Company considers that the carrying amounts of financial assets and liabilities not measured at fair value approximate their fair values or the fair values cannot be reliable estimated.

• b. Fair value of financial instruments measured at fair value on a recurring basis

• 1) Fair value hierarchy

December 31, 2021 Financial assets at FVTOCI Investments in equity instruments at FVTOCI Domestic listed shares Domestic unlisted shares Foreign unlisted shares December 31, 2020 Financial assets at FVTOCI Investments in equity instruments at FVTOCI Domestic listed shares Domestic unlisted shares Foreign unlisted shares	Level 1 $ 27,297 - - $ 27,297 Level 1 $ 47,020 - - $ 47,020	Level 2 $ - - - $ - Level 2 $ - - - $ -	Level 3 $ - 6,698 52,917 $ 59,615 Level 3 $ - 6,698 103,753 $ 110,451	Total $ 27,297 6,698 52,917
				$ 86,912
				Total $ 47,020 6,698 103,753
				$ 157,471

There were no transfers between Levels 1 and 2 for the years ended December 31, 2021 and 2020.

• 2) Financial Instruments Applied for Level 3 Adjustment at FVTOCI

Financial assets－Equityinstrument Beginning balance Purchase Recognized in other comprehensive profit or loss (unrealized appraisal profit or loss of financial assets measured at fair value through other comprehensive profit or loss) Foreign exchange difference Ending balance	Financial assets at FVTOCI Through other comprehensive income 2021.1.1-12.31 2020.01.01.-12.31	Financial assets at FVTOCI Through other comprehensive income 2021.1.1-12.31 2020.01.01.-12.31	Financial assets at FVTOCI Through other comprehensive income 2021.1.1-12.31 2020.01.01.-12.31	Financial assets at FVTOCI Through other comprehensive income 2021.1.1-12.31 2020.01.01.-12.31
	(	$ 110,451 - (49,307) 1,529) ( 59,615	$	89,251 30,466 (6,398) 2,868) 110,451

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• 3) Valuation Techniques and Assumptions Used in Fair Value Measurement

• a) The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active markets are determined with reference to quoted market prices.

• b) Valuation techniques and inputs applied for Level 3 fair value measurement

  • i. The fair values of unlisted equity securities in Taiwan were determined using the income approach. Under this approach, the discounted cash flow method was used to capture the present value of the expected future economic benefits to be derived from the ownership of these investees. The significant unobservable inputs are listed in the table below. Decrease in discount for the lack of marketability or non-controlling interests discount would result in increase in the fair value.

Discount for lack of marketability Non-controlling interests discount	2021.12.31 2020.12.31
	25% 25% 20% 20%

If the inputs to the valuation model were changed to reflect reasonably possible alternative assumptions while all the other variables were held constant, the fair value of the shares would increase (decrease) as follows:

Discount for lack of marketability 1% decrease Non-controlling interests discount 1% decrease	2021.12.31 $ 77 $ 73	2020.12.31	2020.12.31
			$ 81 $ 76

• ii. The foreign unlisted (over the counter) equity investment adopts the market method, and its fair value is mainly assessed with reference to the recent financing activities of the invested target or the market transaction price and market conditions of similar targets. The evaluation method chosen by the Company after careful evaluation, therefore, the fair value measurement is reasonable, but the use of different evaluation models or fair value may lead to different evaluation results.

• c. Categories of Financial Instruments

		2021.12.31	2020.12.31
Financial	assets
Financial	assets at amortized cost (*1)	$ 2,367,320	$ 2,132,074
Financial	assets at FVTOCI	86,912	157,471
Financial	liabilities
Financial	liabilities at amortized cost (*2)	1,971,338	1,260,529

• *1) The balances include loans and receivables at amortized cost, which comprise cash and cash equivalents, financial assets at amortized cost - current, account and notes receivables, and receivables from related parties. Those reclassified to held-for-sale disposal groups are included.

• *2) The balances include financial liabilities at amortized cost, which comprise short-term borrowings, notes payables, account payables - related parties, long-term liabilities due within one year, others payable and long-term borrowings. Those reclassified to held-for-sale disposal groups are included.

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d. Financial Risk Management Objectives and Policies

The Company’s major financial instruments include financial assets at amortized cost, equity investments, short-term loans, notes and account payables, account payables - related parties, others payable, long-term loans due within one year, and long-term loans. The Company’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 exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Board of Directors is solely responsible for established and monitored the framework of risk management of the Company, the Board of Directors authorized the chairman develop and monitored the risk management policy of the Company with the operation center of the Company, and regularly reported the situation to the Board of Directors.

The Company’s financial risk management policies are developed for identifying and analyzing the financial risks to the Company, evaluating the impacts of the financial risks, and executing the financial-risk aversion policies. The financial risk management is periodically reviewed to reflect changes to the market and the operations. Through the internal controls, such as training and setting up managing requirements and procedures, the Company are engaged in developing a disciplined and constructive control environment, in order to have all employees understand own responsibilities.

The Company’s Board of Directors monitors the management on managing the compliance to the financial risk management policies and procedures and reviews the appropriateness of risk management structure.

1) Market Risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see a) below), interest rates (see b) below), and another price risk (see c) below).

a) Foreign Currency Risk

The Company has assets and liabilities not recorded in the same functional currency as that of the Company, thus, it is exposed to risks due to exchange rate fluctuation.

To manage risks within an acceptable level, the Company use the natural hedge against its currency risk. The Company monitor and evaluate the movements of exchange rates and the weakness or strength of a currency’s performance in line with natural hedging.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities which were not in the same functional currency as the Company’s entity at the end of the reporting period are shown in Note 32.

Sensitivity Analysis

The Company was mainly exposed to the U.S. dollar.

The following table shows the Company’s sensitivity to a 5% increase and decrease in New Taiwan dollars (the functional currency of the Company) against the relevant foreign currencies. A 5% sensitivity rate is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and was adjusted at the end of the reporting period for a 5% change in foreign currency rates. The number in the table indicates the change in pretax profit associated with the 5% appreciation of the New Taiwan dollar against the relevant currency. For a 5% weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on pre-tax profit and other equity, and the balances below would be positive.

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Profit or loss	Unit: Thousand NT$ Currency USD Impact Years Ended December 31 2021 2020 $ 15,731(i) $ 11,074(i)	Unit: Thousand NT$ Currency USD Impact Years Ended December 31 2021 2020 $ 15,731(i) $ 11,074(i)
		$ 15,731(i)

(i) This was mainly attributable to the exposure on outstanding receivables and payables in Currency USD which were not hedged at the end of the reporting period.

b) Interest Rate Risk

The Company are exposed to interest rate risk because entities in the Company borrow funds at both fixed and floating interest rates. The financial costs for the period from January 1 to December 31 in the fiscal years 2021 and 2020 were NT$9,141 thousand and NT$ 6,930 thousand respectively, which only constitute 0.19% and 0.18% of consolidated net sales revenue. Therefore, the interest rate risk has no significant impact on the Company.

The carrying amounts of the Company’s financial liabilities with exposure to interest rates at the end of the balance sheet reporting period were as follows:

Fair value interest rate risk Financial liabilities Cash flow interest rate risk Financial liabilities	Unit: Thousand NT$ Currency USD Impact Years Ended December 31 2021 2020 $ 967,367 $ 589,417 229,502 312,573

Sensitivity Analysis

The sensitivity analysis was determined based on the Company’s exposure to interest rate changes for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period had been outstanding for the whole period. If interest rates had been five basis points higher/lower and all other variables were held constant, the Company’s pre-tax profit for the one-year period from January 1 to December 31 in the fiscal years 2021 and 2020 would decrease/increase by NT$ 115 thousand and NT$ 156 thousand, respectively.

c) Other Price Risks

The Company are exposed to price risk due to equity securities investment of domestic listed companies. The Company has established an immediate control mechanism and are therefore not expected to have significant price risk.

Sensitivity Analysis

If equity prices had been 5% higher/lower, pre-tax other comprehensive income for the one-year period from January 1 to December 31 in the fiscal years 2021 and 2020 would have increased/decreased by NT$ 4,346 thousand and NT$ 7,874 thousand respectively, because of the changes in fair value of financial assets at FVTOCI.

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2) Credit Risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the Company. As of the end of the reporting period, the Company’s maximum exposure to credit risk, which will cause a financial loss to the Company because of the counterparties’ failure to discharge their obligations, could arise from the carrying amount of the financial assets recognized in the balance sheets. The policies adopted by the Company are to trade with reputable objects only, and continue to supervise the credit risk insurance and the credit rating of the counterparty

Apart from the companies A, B and C of the Company, the Company has no significant credit risk exposure from any single counterparty or any group of counterparties with similar characteristics. Apart from the companies A, B and C, the concentration of credit risk to other clients did not exceed 10% of total accounts receivable. The credit risk is expected to be immaterial as the companies A, B and C are all reliable and trustworthy counterparties.

3) Liquidity Risk

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the Company’s short-, medium- and long-term funding and liquidity management requirements. The Company manage liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, and continuously monitoring forecasted and actual cash flows as well as matching the maturity profiles of financial assets and liabilities. As of December 31, 2021, and 2020, the Company had available unutilized short-term bank loan facilities in the amount of NT$ 746,415 thousand, NT$ 996,147 thousand, respectively.

The following table shows the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed-upon repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay.

December 31, 2021

On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years Lease liabilities $ 2,154 $ 4,201 $ 17,288 $ 29,592 $ 21,938 Variable interest rate liabilities - 57,643 67,929 103,930 - Fixed interest rate liabilities 595,000 280,000 20,000 - - $ 597,154 $ 341,844 $ 105,217 $ 133,522 $ 21,938 Additional information about the maturity analysis for lease liabilities Less than 1 Year 1-5 Years 5-10 Years Lease liabilities $ 23,643 $ 29,592 $ 21,938	On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years Lease liabilities $ 2,154 $ 4,201 $ 17,288 $ 29,592 $ 21,938 Variable interest rate liabilities - 57,643 67,929 103,930 - Fixed interest rate liabilities 595,000 280,000 20,000 - - $ 597,154 $ 341,844 $ 105,217 $ 133,522 $ 21,938 Additional information about the maturity analysis for lease liabilities Less than 1 Year 1-5 Years 5-10 Years Lease liabilities $ 23,643 $ 29,592 $ 21,938	On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years	On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years	On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years	On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years
				$ 29,592 103,930 - $ 133,522	$ 21,938 - - $ 21,938
Lease liabilities	Less than 1 Year $ 23,643		1-5 Years $ 29,592

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December 31, 2020

On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years Lease liabilities $ 1,887 $ 3,773 $ 14,552 $ 35,539 $ 26,117 Variable interest rate liabilities - 85,143 20,429 207,001 - Fixed interest rate liabilities 330,000 180,000 - - - $ 331,887 $ 268,916 $ 34,981 $ 242,540 $ 26,117 Additional information about the maturity analysis for lease liabilities Less than 1 Year 1-5 Years 5-10 Years Lease liabilities $ 20,212 $ 35,539 $ 26,117	On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years Lease liabilities $ 1,887 $ 3,773 $ 14,552 $ 35,539 $ 26,117 Variable interest rate liabilities - 85,143 20,429 207,001 - Fixed interest rate liabilities 330,000 180,000 - - - $ 331,887 $ 268,916 $ 34,981 $ 242,540 $ 26,117 Additional information about the maturity analysis for lease liabilities Less than 1 Year 1-5 Years 5-10 Years Lease liabilities $ 20,212 $ 35,539 $ 26,117	On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years	On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years	On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years	On Demand or Less than 1 Month 1-3 Months 3 Months to 1 Year 1-5 Years More than 5 Years
				$ 35,539 207,001 - $ 242,540	$ 26,117 - - $ 26,117
Lease liabilities	Less than 1 Year $ 20,212		1-5 Years $ 35,539

30. TRANSACTIONS WITH RELATED PARTIES

The transaction, account balance, income and expenses between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Besides information disclosed elsewhere in the other notes, details of transactions between the Company and the other related parties are disclosed below.

a. Related Party Name and Category

Related Party Name Related Party Category

San Fu Global Ltd. Investors with significant influence over the Company Zhang Chun Ming Investors with significant influence over the Company Shian Yun Joint Stock Company (Vietnam) Associates Lifu Carbonate Co., Ltd. Associates (Acquisition Subsidiary on May 10, 2021) Hongchong Enterprise Co., Ltd. Associates China Fangda (International) Investment Associates Development Corporation Sanfuming Electronic Material Co., Ltd. Joint venture Fulu Cultural Foundation Other related partiess

b. Sales of Goods

Sales Joint ventures Associate Purchase Joint ventures Associates	Years Ended December 31	Years Ended December 31	Years Ended December 31
		2021 $ 23,527 60 $ 23,587 $ 1,024 10,975 $ 11,999	2020 $ 11,744 63 $ 11,807 $ 88 13,216 $ 13,304

56

Service expense (recognized as other income) Joint ventures Sanfuming Electronic Material Co., Ltd. Associates Service expense (recognized as other expense) Investors with significant influence over the Company Donation expense Others Fulu Cultural Foundation	Years Ended December 31 2021 2020 $ 3,962 $ 6,017 - 367 $ 3,962 $ 6,384 $ 1,143 $ 1,279 $ - $ 1,000	Years Ended December 31 2021 2020 $ 3,962 $ 6,017 - 367 $ 3,962 $ 6,384 $ 1,143 $ 1,279 $ - $ 1,000	Years Ended December 31 2021 2020 $ 3,962 $ 6,017 - 367 $ 3,962 $ 6,384 $ 1,143 $ 1,279 $ - $ 1,000	Years Ended December 31 2021 2020 $ 3,962 $ 6,017 - 367 $ 3,962 $ 6,384 $ 1,143 $ 1,279 $ - $ 1,000
		$	2021 $ 3,962 - $ 3,962 1,143 -	$
		$		$

Transactions with related parties of the Company were not materially different from those non-related parties with third parties unless otherwise agreed.

Accounts receivable-related party Joint ventures Other receivable-related party Joint ventures Accounts payable-related party Investors with significant influence over the Company Associates		Years Ended December 31	Years Ended December 31	Years Ended December 31
			2021 $ 15,935 3,692 $ 19,627 $ 300 3,470 $ 3,770	2020 $ 3,573 6,017 $ 9,590 $ - 2,047 $ 2,047

The outstanding accounts payable from related parties are unsecured and the outstanding accounts receivable from related parties are unsecured. For the years ended December 31, 2021 and 2020, no impairment loss was recognized for accounts receivable from related parties.

c. Lease arrangements - Group is lessee

Line Item Related Party Category/Name Lease liabilities Investors with significant influence over the Company Sanfu Global Co., Ltd. Others Interest expense Investors with significant influence over the Company Sanfu Global Co., Ltd. Others	Years Ended December 31 2021 2020 $ 43,159 $ 45,387 1,019 - $ 44,178 $ 45,387 Years Ended December 31 2021 2020 $ 453 $ 518 16 6 $ 469 $ 524	Years Ended December 31 2021 2020 $ 43,159 $ 45,387 1,019 - $ 44,178 $ 45,387 Years Ended December 31 2021 2020 $ 453 $ 518 16 6 $ 469 $ 524
		2021 $ 453 16 $ 469

57

d. Others

Investors with significant influence signed a trust agreement of marketable securities with CTBC Bank on September 29, 2016. The Company is a beneficiary of interest. The trust interest revenue was $6,124 thousand and $6,746 thousand in 2021 and 2020, respectively, and the revenue was credited in capital surplus-donations.

e. Compensation of key management personnel

The compensation to directors and other key management personnel were as follows:

Short-term employee benefits Post-employment benefits	Years Ended December 31	Years Ended December 31	Years Ended December 31
		2021 $ 33,882 1,718 $ 35,600	2020 $ 33,795 1,402 $ 35,197

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

31. PLEDGED ASSETS

The following assets were provided as collateral for bank borrowings and obligations under the sales agreement:

Pledged deposits (classified as financial assets at amortized cost) Land Buildings, net	Years Ended December 31	Years Ended December 31	Years Ended December 31
		2021 $ 222,400 40,349 45,443 $ 308,192	2020 $ 222,400 40,349 49,054 $ 311,803

32. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The significant financial assets and liabilities of each individual group entity of the Company denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

December 31, 2021

December 31, 2021
		Foreign
	Currencies		Exchange Rate		Carrying Amount
Foreign Currency Assets
Monetary items
USD	$	13,099	27.630	(USD: NTD)	$	361,925
JPY		656,637	0.239	(JPY: NTD)		156,608
Non-monetary items
Investments in associates and joint
ventures using the equity method
CNY		93,249	0.157	(CNY: USD)		404,839
VND		30,943,933	0.0012	(VND: NTD)		36,978
Foreign Currency Liabilities
Monetary items
USD	$	1,706	27.730	(USD: NTD)	$	47,307
JPY		149,248	0.243	(JPY: NTD)		36,193

58

December 31, 2020

December 31, 2020
		Foreign
	Currencies		Exchange Rate	Carrying	Amount
Foreign Currency Assets
Monetary items
USD	$	10,162	28.430 (USD: NTD)	$	288,906
Non-monetary items
Investments in associates and joint
ventures using the equity method
CNY		79,301	0.153 (CNY: USD)		346,134
VND		32,239,640	0.0011 (VND: NTD)		35,786
Foreign Currency Liabilities
Monetary items
USD		2,363	28,530 (USD: NTD)		67,416

The significant unrealized foreign exchange gains (losses) were as follows:

Foreign Currencies USD JPY	For the Year Ended December 31, 2021 Exchange Rate Net Foreign Exchange Losses 27.800 (USD: NTD) $ 1,366 0.247 (JPY: NTD) ( 2,001)	For the Year Ended December 31, 2020
	Exchange Rate 27.800 (USD: NTD) 0.247 (JPY: NTD)	Exchange Rate Net Foreign Exchange Losses 28.430 (USD: NTD) $ 2,242 0.274 (JPY: NTD) -

33. ADDITIONAL DISCLOSURES

• a. Information about significant transactions and investees:

• 1) Financing provided to others: See Table 1 attached;

• 2) Endorsements/guarantees provided: See Table 2 attached;

• 3) Marketable securities held (excluding investments in subsidiaries, associates and joint ventures: See Table 3 attached;

• 4) Marketable securities acquired and disposed of at costs or prices of at least NT$ 300 million or 20% of the paid-in capital See Table 4 attached;

• 5) Acquisition of individual real estate at costs of at least NT$ 300 million or 20% of the paid-in capital: None;

• 6) Disposal of individual real estate at prices of at least NT$ 300 million or 20% of the paid-in capital: None;

• 7) Total purchases from or sales to related parties amounting to at least NT$ 100 million or 20% of the paid-in capital: None;

• 8) Receivables from related parties amounting to at least NT$ 100 million or 20% of the paid-in capital: None;

• 9) Information about the derivative financial instrument transaction: None;

59

• 10) Others: The business relationship between the parent and the subsidiaries and significant transactions between them: See Table 5 attached;

• b. Information on investees: See Table 6 attached;

• c. Information on investments in Mainland China

• 1) Information on any investee company in Mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the Mainland China area: See Table 7 attached;

• 2) Any of the following significant transactions with investee companies in Mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: None

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period

  • c) The amount of property transactions and the amount of the resultant gains or losses

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes

  • e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds

  • f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receipt of services

• d. Information of major shareholders

List all shareholders with ownership of 5% or greater showing the name of the shareholder and the number of shares and percentage of ownership held by of each shareholder: See Table 8 attached;

34. OPERATING SEGMENT INFORMATION

Information reported to the chief operating decision maker for resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. Specifically, the Company’s reportable segments were as follows:

• Fine (high precision) chemicals

• Basic chemicals

• a. Operating segments, segment revenue and operating results

The following was an analysis of the Company’s revenue and results from continuing operations by reportable segments:

60

Fine Chemicals For the one-year period from January 1 to December 31, 2021 Revenue of general customers $ 3,647,671 Revenue of segment - Total $ 3,647,671 Profit from operations $ 672,578 Other income Other gain and losses Financial cost Investments using equity method Interest income Bargain purchase gain- Acquiring a subsidiary Income before income tax For the one-year period from January 1 to December 31, 2020 Revenue of general customers $ 2,903,964 Revenue of segment - Total $ 2,903,964 Profit from operations $ 561,105 ( Financial cost Investments using equity method Interest income Other income Other gain and losses Income before income tax	Basic Chemicals $ 1,132,214 61,425 ( $ 1,193,639 ( $ 48,914 $ 914,752 72,075 ( $ 986,827 ( $ 90,202)	Write off by Segment $ - 61,425) $ 61,425) $ - ( $ - 72,075) $ 72,075) $ - ( (	Total $ 4,779,885 - $ 4,779,885 $ 721,492 30,763 2,536 9,141 ) 82,237 1,141 372 $ 829,400 $ 3,818,716 - $ 3,818,716 $ 470,903 6,930 ) 6,126 1,266 41,941 11,086) $ 502,220
		$
		$
		$
		$
		$

Segment profit refers to the profit before tax earned by each segment, excluding other income, other gains and losses, financial costs, carrying amount of profit or loss of investments of affiliate companies and joint ventures using equity method of accounting, income tax expense, bargain purchase gain and tax expenses etc. The measured amount serves as a basis for the chief operating decision maker to allocate resources and assess segment performance.

b. Segment Total Assets and Liabilities

	2021.12.31	2020.12.31
Segment assets
Continuing operations
Fine chemicals	$ 4,430,791	$ 2,751,020
Basic chemicals	1,368,074	1,837,058
Investment	776,711	796,346
Consolidated total assets	$ 6,575,576	$ 5,384,424

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c. Major customers representing at least 10% of net revenue

		Years	Ended	December 31
		2021		2020
		Amount	%	Amount	%
Customer A	$	1,585,864	33	$ 1,088,535	29
Customer B		533,955	11	478,761	13

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SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2021

(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

TABLE 1

No. (Note 1)	Financing Company	Counter- party	Financial Statement Account	Related Party	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Interest Rate (%)	Nature of Financing	Transaction Amounts	Reason for Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limits for Each Borrowing Company (Note 2)	Financing Company’s Total Financing Amount Limits (Note 2)	Note
													Item	Value
0 0 0 0	San Fu Chemical Co., Ltd. San Fu Chemical Co., Ltd. San Fu Chemical Co., Ltd. San Fu Chemical Co., Ltd.	San Fu Biotech Co., Ltd. International Nitto Technology Co., Ltd. VinaSanFu Industrial Gas Company Limited VinaSanFu Material Company Limited	Other receivables Other receivables Other receivables Other receivables	Y Y Y Y	$ 250,000 250,000 300,000 300,000	$ 250,000 250,000 300,000 300,000	$ - - 49,824 (USD 1,800,000) (Note 4) -	- - 1% -	The need for Short-term financing The need for Short-term financing The need for Short-term financing The need for Short-term financing	$ - - - -	Operating capital Operating capital Operating capital Operating capital	$ - - - -	- - - -	$	$ 414,470 414,470 414,470 414,470	$ 1,657,881 1,657,881 1,657,881 1,657,881	（Note 3） （Note 3） （Note 3） （Note 3）

Note 1: The items are numbered as follows:

• a. Issuer is numbered as “0”.

• b. Investee companies are numbered from “1”.

Note 2: The maximum amount for financing provided to others:

• a. The maximum amount of financing provided by the Company shall not exceed 40% of the Company’s net worth.

• b. The maximum amounts of financing provided by the Company and its subsidiaries are as follows:

• i. The maximum amount of financing provided to all businesses shall not exceed 10% of the Company’s net worth. The maximum amount of financing provided to an individual shall not exceed 10% of the Company’s net worth, and the gross transaction amount (the higher of purchase amount or sales amount between the two parties) for the past year.

• ii. In the case of financing companies with short-term financing needs, the maximum amount of financing provided to such companies shall not exceed 30% of their net worth, the maximum amount of financing provided to an individual shall not exceed 10% of the Company’s net worth.

Note 3: Other receivables have been eliminated when preparing the consolidated financial statements.

Note 4: Calculated based on the foreign currency exchange rate dated December 31, 2021 (USD$1 = NT$ 27.68)

63

SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

ENDORSEMENTS/GURANTEES PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

TABLE 2

No. (Note 1)	Endorsement/ Guarantee Provider	Guaranteed Party	Guaranteed Party	Limit on Endorsement/ Guarantee Provided to Each Guaranteed Party (Note 2)	Maximum Balance for the Period	Ending Balance	Amount Actual Drawn	Amount of Endorsement /Guarantee Collateralize d by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Equity per Latest Financial Statements (%)	Maximum Endorsement/ Guarantee Amount Allowable (Note 2)	Guarantee Provided by Parent Company	Guarantee Provided by Subsidiary	Guarantee Provided to Subsidiaries in Mainland China	Note
		Name	Nature of Relationship
0 0 0	San Fu Chemical Co., Ltd. San Fu Chemical Co., Ltd. San Fu Chemical Co., Ltd.	San Fu Biotech Co., Ltd. VinaSanFu Industrial Gas Company Limited VinaSanFu Material Company Limited	A subsidiary in which the Parent Company holds directly and indirectly over 90% of an equity interest. A subsidiary in which the Parent Company holds directly and indirectly over 90% of an equity interest. A subsidiary in which the Parent Company holds directly and indirectly over 90% of an equity interest.	$ 414,470 414,470 414,470	$ 250,000 300,000 300,000	$ 250,000 300,000 300,000	$ 140,000 83,040 166,080	$ - - -	6.03% 7.24% 7.24%	$ 1,657,881 1,657,881 1,657,881	Y Y Y	N N N	N N N

Note 1: The items are numbered as follows:

a. Issuer is numbered as “0”.

• b. Investee companies are numbered from “1”.

Note 2: The maximum amount for guarantees provided to others:

• a. The maximum amount of guarantee provided by the Company shall not exceed 40% of the Company’s net worth.

b. The maximum amount of guarantee provided to all subsidiaries not exceeds 10% of the Company’s net worth. The maximum amount of guarantee provided to an individual shall not exceed 10% of the Company’s net worth.

64

SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD

FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

TABLE 3

Holding Company Name	Marketable Securities Type and Name	Nature of Relationship	Financial Statement Account		As of December 31, 2021	As of December 31, 2021		Note
				Number of Shares (in Thousands)	Carrying Amount	Percentage of Ownership (%)	Fair Value
San Fu Chemical Co., Ltd. Sino Star Holding Limited	E’Dale Technology Co., Ltd. Savior Lifetec Corporation Global Graphene Group Hubei Xingfu Electronic Material Co., Ltd.	- - - -	Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income	642,060 1,356,989 18,490 -	$ 6,698 27,297 - 52,917	3.45% 0.45% 1.42% 2.40%	$ 6,698 27,297 - 52,917	Note 2

Note 1: The information for investments in subsidiaries, associates and joint venture is included in Tables 6 and 7.

Note 2: The fair value is calculated based on closing prices on December 31, 2021.

65

SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$ 300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

TABLE 4

Securities Purchased/ Sold by	Marketable Securities Type & Name	Line Item	Trading Purpose	Nature of Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition	Adjustment （Note 1）		Sale	Sale		Ending	Balance
					Shares/Units	Amount	Shares/Units	Amount		Shares/Units	Selling Price	Carrying costs	Gain (Loss) of Disposal	Shares/Units	Amount
San Fu Chemical Co., Ltd.	International Nitto Technology Co., Ltd.	Investments accounted for using Equity Method	Cash Capital Increase	Subsidiary	15,000,000	$ 148,365	25,000,000	$ 250,000	($ 15,173)	-	$ -	$ -	$ -	-	$ 383,192

Note 1: Including the carrying amount of profits and losses of subsidiaries recognized by the equity method and shareholder adjustment items.

Note 2: The above subjects have been written off when preparing the consolidated financial statements.

66

SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

THE BUSINESS RELATIONSHIP BETWEEN THE PARENT AND THE SUBSIDIARIES AND SIGNIFICANT TRANSACTIONS BETWEEN THEM FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

TABLE 5

No.	Investee Company	Counterparty	Relationship (Note 1)		Transaction Details
				Financial Statement Accounts	Amount	Payment Terms	% of Total Sales or Assets
0	San Fu Chemical Co., Ltd.	San Fu Biotech Co., Ltd.	1	Accounts receivable - related parties, net Other receivables - related parties, net Sales revenue Accounts payable - related parties, net Purchase	$ 18,260 9,301 44,158 4,391 17,434	90 days after invoice date According to the contract 90 days after invoice date 90 days after invoice date 90 days after invoice date	0.28% 0.14% 0.92% 0.07% 0.36%

Note 1: “1” represents the transactions between the parent company and subsidiaries.

Note 2: When the consolidated financial statements are prepared, they were all written off.

67

SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

NAMES. LOCATIONS, AND RELATED INFORMATION OF INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2021

(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

TABLE 6

Investor Company	Investee Company (Note 2)	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of December 31, 2021	As of December 31, 2021	As of December 31, 2021	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2021	December 31, 2020	Number of Shares (Thousands)	%	Carrying Amount
San Fu Chemical Co., Ltd. San Fu Specialty Chemicals Investments Limited San Fu Food Additives Investments Limited	San Fu Specialty Chemicals Investments Limited San Fu Food Additives Investments Limited VinaSanFu Industrial Gas Company Limited VinaSanFu Material Company Limited San Fu Biotech Co., Ltd. International Nitto Technology Co., Ltd Hongchong Enterprise Co., Ltd. Lifu Carbonate Co., Ltd. Shian Yun Joint Stock Company Sanfuming Electronic Material Co., Ltd. Sino Star Holding Limited Fangda International （SAMOA）Ltd.	Samoa Samoa Vietnam Vietnam Taiwan Taiwan Taiwan Taiwan Vietnam Shanghai, China Samoa Samoa	Investment activities Investment activities Engaged in industrial gas production Engaged in the production of chemical materials Engaged in the manufacture and sale of food additives Engaged in electronic component manufacturing business Liquid oxygen, oxygen, liquid nitrogen and other gas trading business Engaged in carbon dioxide gas, carbonic acid fire extinguisher, dry ice manufacturing and its sales and marketing Engaged in industrial gas production Engaged in the operation of international trade business Investment activities Investment activities	$2,351 thousand 552 thousand 13,650 thousand 12,200 thousand 210,000 477,904 10,527 7,7,253 1,232 thousand 2,151 thousand 1,868 thousand 1,300 thousand	$2,351 thousand 552 thousand 12,285 thousand 10,700 thousand 125,000 227,904 10,527 7,193 1,232 thousand 2,151 thousand 1,868 thousand 1,300 thousand	2,350,840 552,198 - - 21,500,000 40,000,000 1,200,000 2,240 2,659,974 - 1,867,838 1,300,000	100% 100% 100% 100% 100% 100% 50% 87% 33.33% 50% 100% 41.94%	$ 489,631 - 354,117 312,691 251,151 383,192 14,510 96,127 36,978 404,839 53,876 -	$ 81,326 - ( 17,443 ) ( 17,883 ) 31,585 ( 15,173 ) 2,051 ( 9,837 ) ( 2,820 ) 165,972 - -	$ 81,326 - ( 17,443 ) ( 17,883 ) 31,674 ( 15,173 ) 1,026 ( 6,488 ) ( 940 ) 82,986 - -	Note 1 Note 4 Note 1 〃 Notes 1 and 5〃 〃 Notes 1 and 3 Note 1 Note 4

Note 1: When the consolidated financial statements are prepared, they were all written off.

Note 2: Information of investments in Mainland China is included in Table 7.

Note 3: Lifu Carbonic Acid Co., Ltd. began to be included as an entity affiliated to the Company for preparing the consolidated financial report since the acquisition date, May 10, 2021

Note 4: The company “San Fu Food Additives Investments Limited” was dissolved and deregistered after liquidation is completed in May 2021.

Note 5: On December 20, 2021, the company did not subscribe for the cash capital increase of Sanfu Biotech Co., Ltd. according to the shareholding ratio, so the shareholding ratio dropped from 100% to 93.48%

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SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2021

In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

TABLE 7

Investee Company	Main Businesses and Products	Paid-in Capital	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2021 (Note 1)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2021 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2021 (Note 1)	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 3 and)	Carrying Amount as of December 31, 2021 (Note 1)	Accumulated Repatriation of Investment Income as of December 31, 2021
							Outward	Inward
Sanfuming Electronic Material Co., Ltd. Hubei Xingfu Electronic Material Co., Ltd.	Engaged in the operation of international trade business Engaged in manufacturing and selling chemical products	$ 249,120 ( US$ 9,000,000) （Notes 1 and 4） $ 2,250,560 ( CNY 520,000,000) （Note 2）		Through the third company reinvest in mainland companies Through the third company reinvest in mainland companies	$ 18,020 ( US$ 651,000) $ 51,651 ( US$ 1,866,000)		$ - -	$ - -	$ 18,020 ( US$ 651,000) $ 51,651 ( US$ 1,866,000)	$ 165,972 294,820	50 2.4	$ 82,986 -	$ 404,839 ( US$14,626,000) $ 52,917 ( US$ 1,912,000)	$ - -
Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2021			Investment Amount Authorized by Investment Commission, MOEA			Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$161,485 （US$5,834,000）（Notes 5 and 6）			$264,593 （9,559,000）			$2,486,822

Note 1: The exchange rate on December 31, 2021 was USD$1=NT$ 27.68

Note 2: The exchange rate on December 31, 2021 was RMB$1=NT$ 4328

Note 3: The average exchange rate was based on the USD$1=NT$ 28.009 for the 12-month period from January 1, 2021 to December 31, 2021.

• Note 4: In April 202l, the company raised US$ 651,000 of capital (all new shares were subscribed by Hubei Xingfu Electronic Materials Co., Ltd.). In October 2012, the Company converted US$ 1,698,000 of retained earnings into capital stock. In April 2013, the Company increased its capital by US$3,000,000, and in July 2018, the Company transferred US$3,000,000 of retained earnings into capital.

Note 5: This includes accumulated outward remittance for investments in Keyron Top Chemical (Shanghai) Co., Ltd. (US$ 2,017,000). The company was liquidated in August 2006.

Note 6: The investment in Shandong Fangda Jinke Additive Co., Ltd. was remitted from Taiwan (US$1,300,000). The company was liquidated in January 2017.

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SAN FU CHEMICAL CO., LTD. AND SUBSIDIARIES

INFORMATION OF MAJOR SHAREHOLDERS

BASED ON THE INFORMATION REPORTED AS OF DECEMBER 31, 2021

TABLE 8

Name of Major Shareholder		Shares
	Number of Shares	Percentage of Ownership (%)
Sanfu Global Co., Ltd. Pilot Keymark SDN. BHD.	24,067,315 19,929,000	23.89% 19.78%

• Note 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the consolidated financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

• Note 2: If a shareholder delivers the shareholdings to the trust, the above information will be disclosed by the individual trustor who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Security and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, please refer to the MOPS (Market Observation Post System) of Taiwan Stock Exchange.

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