Stock Code: 2616 Annual Report Inquiry URL: Market Observation Post System http://mops.twse.com.tw/ Company Website http://www.slc.com.tw/

Shan-Loong Transportation Co., Ltd. 2021 Annual Report

Shan-Loong Transportation Co., Ltd. SHAN-LOONG TRANSPORTION CO., LTD

Date of Publication: May 26, 2022

I. Name, job title and contact phone number and email of the Company's spokesperson and acting spokesperson

Spokesperson's name: Lan-Hui Yu Title: Vice Chairman Telephone: (02)2959-9611 Email: [email protected]

Acting Spokesperson Name: Min-Peng Hsu Title: Chief Operating Officer Telephone: (02)2959-9611 Email: [email protected]

II. Addresses and Phone Numbers of Corporate Headquarter, Subsidiaries, and Plants

General Management Office 2F, No. 1-2, Sec. 1, Minsheng Rd., Banqiao Dist., New Taipei City Telephone: (02)2959-9611 Fax: (02)2959-9441 Eastern Area Operations Office No.1, Ziqiang Road, Su'ao Township, Yilan County Telephone: (03)990-8582 Fax: (03)990-8585 Northern Area Operations Office No. 2-10, Chaoyin Road, Beigang Village, Daoyuan District, Taoyuan City Telephone: (03)386-8833 Fax: (03)386-6375 Central Area Operations Office No. 568, Zili Rd., Wuqi Dist., Taichung City Telephone: (04)2639-0283 Fax: (04)2639-8192 Mailiao Operations Office No. 222-24, Hou'an Road, Hou'an Village, Mailiao Township, Yunlin County Telephone: (05)691-0283 Fax: (05)691-0631

Southern Area Operations Office No. 26-3, Yanhai 3rd Rd., Fengmingli, Xiaogang Dist., Kaohsiung City Telephone: (07)871-6691~5 Fax: (07)871-7958

For gas station locations, please refer to the "II Company Profile".

III. Name, address, website, and telephone of the stock transfer handling institution

Name: Shan-Loong Transportation Co., Ltd. Stock Affairs Division 2F, No. 3, Sec. 1, Minsheng Rd., Banqiao Dist., New Taipei City Website: http://www.slc.com.tw/ Telephone: (02)2222-5131 extension 260-265

IV. Names of certified public accountants, address, website, and telephone number of the accounting firm

auditing the Company's latest financial report:

Certified Public Accountant Name: Lo, Jui-Lan and Au, Yiu Kwan CPA Firm: KPMG Taiwan Address: 68F., Taipei 101 Tower, No. 7, Sec. 5,. Xinyi Road, Taipei City Website: http://www.kpmg.com.tw/ Telephone: (02)8101-6666

V. Overseas Listing: None
VI. Website:

http ： //www.slc.com.tw/

Page

Chapter 1. Letter to Shareholders .................................................................................................... 1

Chapter 2. Company Profile ................................................................................................................... 3

Chapter 3. Corporate Governance Report ........................................................................................... 9

I. Organization II. Information on the Company's Directors, President, Vice Presidents, Associate Managers, and the Supervisors of all the Company's Divisions and Branch Units
III. Implementation of Corporate Governance
IV. Information Regarding the Company's Audit Fee and Independence
V. Replacement of CPA
VI. The Company's chairman, general manager, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm:
VII. Equity transfer or changes to equity pledge of directors, managerial officers, or shareholders holding more than 10% of company shares
VIII. Information on Concerned Relationship of Top Ten Major Shareholders
IX. Consolidated Shareholding Percentage

Chapter 4. Capital Overview .................................................................................................................. 54

I. Capital and Shares
II. Implementation of capital utilization plans

Chapter 5. Operations Overview ........................................................................................................... 60

I. Business Activities II. Market and Sales Overview III. Employee Profile IV. Environmental Protection Expenditures
V. Protective Measures for Working Environment and Personal Safety of Employees
VI. Labor Relations VII. Important Contracts

Chapter 6. Financial Overview ............................................................................................................... 76

I. Abbreviated Balance Sheets and Income Statements, Name of CPA and Auditing Opinion for the Past Five Fiscal Years
II. Financial analysis in the most recent five years III. 2020 Audit Committee's Review Report IV. Financial Report of the Most Recent Year
V. The Parent Company-only Financial Statements for the Most Recent Fiscal Year, Certified by the CPA

Chapter 7. Financial Status and Operating Results Review and Risk Matters ................................. 221

I. Financial Status
II. Financial Performance
III. Analysis of Cash Flow
IV. Major Capital Expenditures and Impact on Financial and Business in the most recent year:
V. Investment policy in the past year, the main reasons for profit/loss, improvement plan, and investment plan for the upcoming fiscal year:
VI. Risk Analysis and Assessment for the Most Recent Fiscal Year and as of the Publication Date of the Annual Report
VII. Other important items:

Chapter 8. Special Disclosure .................................................................................................................. 226

I. Summary of Affiliated Companies
II. Handling of Private Placement Securities in the Most Recent Year
III. Holding or Disposal of Shares in the Company by the Company's Subsidiaries during the Most Recent Fiscal Year or the Current Fiscal Year up to the Publication Date of the Annual Report
IV. Other Necessary Supplementary Information

Chapter 9. Any of the Matters that Have a Significant Impact on Shareholders' Equity or Securities Prices under Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange law ................................................................................................................................................. 230

Chapter 1. Letter to Shareholders

Dear Shareholders,

In 2021, the global economy gradually recovered from the "COVID-19" epidemic, and international oil prices were generally on an upward trend. Although the Company’s container transportation was affected by global port congestion and significant delays in shipping schedules, which led to increase in operating income and transportation costs for oil products, with the efforts of all staff and partners, its annual performance still showed steady growth and continued success.

The report on the consolidated operating results of the Company and its subsidiaries for the year 2021 is as follows:

Transportation: The consolidated revenue in 2021 was NT$5.65678 billion (the same below), an increase of NT$236.24 million and a 4.36% increase from the NT$5.42054 billion in 2020.

Oil products: The consolidated revenue in 2021 was NT$13.15538 billion, which was a increase of NT$2.62042 billion and a 24.87% increase from the NT$10.53496 billion in 2020.

In 2021, the overall consolidated revenue was NT$18.81216 billion, which was a increase of NT$2.85666 billion and a 17.90% increase from the NT$15.95550 billion in 2020.

The annual after-tax net profit reached NT$424.56 million, and the after-tax earnings per share (EPS) reached NT$3.06 per share.

Looking ahead to 2022, it is expected that advanced countries, such as the U.S. and European countries, will increase their unlock down efforts and relax border controls due to the increased vaccine coverage and the shift to "living with COVID-19" in their epidemic prevention strategies, which will lead to an increase in business, tourism, and other transportation mobility, resulting in growth in demand for crude oil. We still need to take one step at a time, with enthusiasm, positive and enterprising attitude, pragmatic approach, and a relentless spirit, so that Shan-Loong can continue to grow and progress.

In Thousands of New Taiwan Dollars

	FY2021	FY2020	Increase (Decrease) Amount	Increase (Decrease)
Operating Revenue	18,812,163	15,955,500	2,856,663	17.90
Operating profit	1,410,146	1,356,527	53,619	3.95
Net Profit After Tax	424,560	379,889	44,671	11.76

	Item	FY2021	FY2020
Financial Structure	Liabilities to Assets Ratio	47.29	47.47
	Long-term Capital to Fixed Assets Ratio (%)	190.02	206.33
Solvency	Current ratio	82.06	97.12
	Quick Ratio	74.37	87.11
Profitability	Return on Assets	4.41	4.28
	Return on Equity	7.91	8.02
	Profit margin	2.26	2.38
	Basic earnings per share (NT$)	3.06	2.73

We hereby present the following outline of the Company’s annual Business Plan for 2022:

(I) Lean Management:

Start talent management and optimize human resources; Strengthen data collection and analysis to improve work efficiency; Integrate land in each district to enhance utilization efficiency; Integrate administrative resources and optimize operational processes.

(II) Lean Transportation:

Strengthen dispatching flexibility to meet customer needs; Implement administrative operations to achieve management targets; Cultivate professional talents to enhance professional capabilities.

(III) Lean Logistics:

Micro-manage and optimize processes, improve distribution efficiency and on-time rate performance, meet customer needs, and broaden sources of income and reduce expenditure.

(IV) Innovative Oil Products:

Build full self-service gas stations, member APP pre-storage and vehicle identification system, and enter into environmental detection, to lead the new business model in the market.

(V) Deeply cultivated in Vietnam:
Create a container transferring yard, improve the efficiency of transfers, strengthen vehicle dispatching, and provide high-quality services.
(VI) Grand Auto:

Combine sales of new vehicles with maintenance to create stable and sustainable business volume, maintain the service level of the original manufacturer, and promote various services with the Internet of vehicles as the core.

(VII) Shipping to the World:

Actively explore global routes, improve service quality, and strengthen customer recognition.

Finally, we would like to express our sincere thanks to all shareholders for their long-term support and encouragement, and wish you all good health, peace and all the best!

Chairman

Sincerely,

Chapter 2. Company Profile

I. Date of establishment : 6 April 1976.

Location of Gas Stations

Area	Station	Address	Telephone
Northern Area	Chongqing Station	No. 456 Chongqing Road, Hualien City	03-8331482
Northern Area	Jichang Station	No. 121, Zhongxing Rd., Ji’an Township, Hualien County	03-8546115
Northern Area	Fuxing Station	No. 259, Sec. 3, Chunjing Rd., Luodong Township, Yilan County	03-9544677
Northern Area	Longde Station	No. 1-1, Ziqiang Rd., Su’ao Township, Yilan County	03-9909633
Northern Area	Fuxing Station	No. 252, Sec. 3, Wujie Rd., Wujie Township, Yilan County	03-9605494
Northern Area	Wanda Station	No. 207, Wanda Rd., Taipei City	02-23375690
Northern Area	Huazhong Station	No. 388, Wanda Rd., Taipei City	02-23378460
Northern Area	Guangxing Station	No. 776, Jianguo Rd., Bade Dist., Taoyuan City	03-3712497
Northern Area	Bade Station	No. 669, Guangfu Rd., Bade Dist., Taoyuan City	03-3664565
Northern Area	Dayuan Station	No. 79, Minsheng Rd., Dayuan Dist., Taoyuan City	03-3850738
Northern Area	Daxi Station	No. 105, Yongchang Rd., Daxi Dist., Taoyuan City	03-3074683
Northern Area	Puding Station	No. 191, Sec. 2, Puding Rd., Daxi Dist., Taoyuan City	03-3070668
Northern Area	Zhongli Station	No. 5-3, Jilin Rd., Zhongli Dist., Taoyuan City	03-4617151
Northern Area	Longxing Station	No. 693, Longxing Rd., Zhongli Dist., Taoyuan City	03-4375828
Northern Area	Fufeng Station	No. 1110 Kuaisu Road, Pingzhen Dist., Taoyuan City	03-4598126
Northern Area	Luzhu Station	No. 532, Sec. 2, Nankan Rd., Luzhu Dist., Taoyuan City	03-3229609
Northern Area	Guanyin Station	No. 258, Sec. Guangxing, Binhai Rd., Guanyin Dist., Taoyuan City	03-4736060
Northern Area	Xinsheng Station	No. 228, Xinsheng Road, Zhongli Dist., Taoyuan City	03-4275107
Northern Area	Linkou Station	No. 553, Sec. 2, Wenhua 2nd Rd., Linkou Dist., New Taipei City	02-86011805
Northern Area	Yingge Station	No. 28 Yonghe 2nd Street, Yingge Dist., New Taipei City	02-26709799
Northern Area	Xinglong Station	No. 628, Sec. 5, Chongxin Rd., Sanchong Dist., New Taipei City	02-29995499
Northern Area	Futai Station	No. 76, Sec. 1, Chengtai Rd., Wugu Dist., New Taipei City	02-22953510
Northern Area	Guanxi Station	No. 138, Shiliuzhang, Dongguangli, Guanxi Township, Hsinchu County	03-587-6713
Central Area	Dadu Station	No. 247, Sec. 3, Shatian Rd., Dadu Dist., Taichung City	04-26997315
Central Area	Dali Station	No. 71, Sec. 1, Guoguang Rd., Dali Dist., Taichung City	04-24078672
Central Area	Daya Station	No. 259, Sec. 4, Zhongqing Rd., Daya Dist., Taichung City	04-2568-9565
Central Area	Wuquan Station	No. 105, Wuquan Rd., West Dist., Taichung City	04-22027088
Central Area	Shalu Station	No. 600, Sec. 7, Xiangshang Rd., Shalu Dist., Taichung City	04-26366189

Area	Station	Address	Telephone
Central Area	Dongshi Station	No. 706, Sec. 6, Dongguan Rd., Dongshi Dist., Taichung City	04-25771655
Central Area	Dingnan Station	No. 536-32, Zhongshan Rd., Qingshui Dist., Taichung City	04-26220166
Central Area	Wuqi Station	No. 725, Sec. 4, Gangbu Rd., Qingshui Dist., Taichung City	04-26276328
Central Area	Qingshui Station	No. 286, Sec. 6, Lingang Rd., Qingshui Dist., Taichung City	04-26276328
Central Area	Taichung Station	No. 571, Zili Rd., Wuqi Dist., Taichung City	04-26307220
Central Area	Zhukeng Station	No. 38, Sec. 1, Zhonghua Rd., Longjing Dist., Taichung City	04-2635-9009
Central Area	Zhongxing Station	No. 386, Shengfu Rd., Caotun Township, Nantou County	049-2371040
Central Area	Caotun Station	No. 642, Bo’ai Rd., Caotun Township, Nantou County	049-2304685
Central Area	Puli Station	No. 172, Sec. 4, Zhongshan Rd., Puli Township, Nantou County	049-2915022
Central Area	Pingshan Station	No. 16, Nangang 3rd Rd., Nantou City, Nantou County	049-2252513
Central Area	Tongluo Station	No. 35-1, Zhuwei, Tongluo Township, Miaoli County	037-980809
Central Area	Miaoli Station	No. 1-1, Zhonglong 1st Rd., Tongluo Township, Miaoli County	037-234529
Central Area	Toufen Station	No. 25, Sec. 1, Yongzhen Rd., Toufen City, Miaoli County	037-613101
Central Area	Wenshan Station	Miaoli County Miaoli City to Highway 596 No. 1	037-363901
Central Area	Mailiao Station	No. 651, Gongye Rd., Mailiao Township, Yunlin County	05-6910118
Central Area	Linnei Station	No. 3-5 Dapu Rd., Linnei Township, Yunlin County	05-5890850
Central Area	Guilin Station	No. 399, Sec. 1 Zhongshan Rd., Yuanlin Township, Changhua County	04-8008080
Central Area	Zhangxing Station	No. 928, Sec. 2, Zhangshui Rd., Pitou Township, Changhua County	04-8922011
Central Area	Changhua Station	No. 66, Sec. 1, Zhongshan Rd., Changhua City, Changhua County	04-7120616
Central Area	Quanxing Station	No. 262-2, Xinggong Rd., Hemei Township, Changhua County	04-7978633
Central Area	Beitun Station	No. 211, Beitun Rd., Beitun Dist., Taichung City	04-22334437
Central Area	Wenxin Station	No. 891, Sec. 4, Wenxin Rd., Beitun Dist., Taichung City	04-22412981
Central Area	Baozhong Station	No. 3, Zhongzheng Rd., Zhongzheng Village, Baozhong Township, Yunlin County	05-697-3626
Southern Area	Liujia Station	No. 21, Guizigang, Guigang Village, Liujia Dist., Tainan City	06-6988940
Southern Area	Yongkang Station	No. 995-1, Zhonghua Rd., Yongkang Dist., Tainan City	06-2818655
Southern Area	Anding Station	No. 304-8, Sucuo, Anding Dist., Tainan City	06-5976971
Southern Area	Shanhua Station	No. 361, Xiaoxinying, Shanhua Dist., Tainan City	06-5115048
Southern Area	Gaoren Station	No. 135, Sec. 2, Zhongzheng S. Rd., Guiren Dist., Tainan City	06-2782899
Southern Area	Jiafeng Station	No. 770, Fuxing Rd., Xinying Dist., Tainan City	06-6528797
Southern Area	Qingxi Station	No. 451, Sec. 2, Hesheng Rd., Pingtung City	08-7521685

Area	Station	Address	Telephone
Southern Area	Pingtung Station	No. 202, Sec. 3, Ruiguang Rd., Pingtung City	08-7362562
Southern Area	Zhutian Station	No. 15, Zhongyi Rd., Zhutian Township, Pingtung County	08-7712688
Southern Area	Fengming Station	No. 27, Liancheng Rd., Zhutian Township, Pingtung County	08-7896225
Southern Area	Zhongshan Station	No. 33, Sec. 4, Zhongshan Rd., Fangshan Township, Pingtung County	08-8761533
Southern Area	Donggang Station	No. 75-49, Chuantou Rd., Donggang Township, Pingtung County	08-8006178
Southern Area	Chaozhou Station	No. 583, Siwei Rd., Chaozhou Township, Pingtung County	08-7892222
Southern Area	Kaohsiung Station	No. 26-3, Yanhai 3rd Rd., Xiaogang Dist., Kaohsiung City	07-8716691
Southern Area	Dafa Station	No. 201, Daliao Rd., Daliao Dist., Kaohsiung City	07-7822196
Southern Area	Renwu Station	No. 153, Renlin Rd., Renwu Dist., Kaohsiung City	07-3742562
Southern Area	Benzhou Station	No. 11, Benzhou Rd., Gangshan Dist., Kaohsiung City	07-9585482
Southern Area	Military Academy Station	No. 100, Shitan Rd., Gangshan Dist., Kaohsiung City	07-6253965
Southern Area	Gangshan Station	No. 500, Gangyan Rd., Gangshan Dist., Kaohsiung City	07-6163078
Area	Station	Address
Southern Area	Linyuan Station	No. 1038, Sec. 2, Fenglin Rd., Linyuan Dist., Kaohsiung City	07-6415596
Southern Area	Xiongyuan Station	No. 1-29 Zhongmen Road, Linyuan District, Kaohsiung City	07-6415389
Southern Area	Puya Station	No. 69, Ziqi Rd., Lingya Dist., Kaohsiung City	07-7610048
Southern Area	Gangshan Station	No. 683, Anzhao Rd., Yanchao Dist., Kaohsiung City	07-6163078
Southern Area	Yanchao Station	No. 730, Anzhao Rd., Yanchao Dist., Kaohsiung City	07-9585623
Southern Area	Yongfa Station	No. 160, Yancheng Avenue, Mituo Dist., Kaohsiung City	07-6106682
Southern Area	Dalin Station	No. 1-8, Linzitou, Dalin Township, Chiayi County	05-2951325
Southern Area	Jiatai Station	No. 508, Sec. 2, Beigang Rd., Taibao City, Chiayi County	05-3005199
Southern Area	Jiayi Station	No. 136, Sec. 1, Shixian Rd., Beixin All., West Dist., Chiayi City	05-2911692
Southern Area	Minxiong Station	No. 27, Minxin Rd., Minxiong Township, Chiayi County	05-226-0423

II. Company	History
1976	Trump Transportation Co., Ltd., the Company's predecessor, was founded.
1982	The Company changed its name into Shan-Loong Transportation Co., Ltd., mainly engaged
	in container transportation and bulk cargo business.
1984	Taichung Plant, which engaged in the transportation and automobile repair business, was
	established in Taichung Harbor Related Industrial Park, covering an area of 14,869 square
	meters.
1987	Kaohsiung Plant, which engaged in the transportation and automobile repair business, was
	established in Xiaogang District, Kaohsiung, covering an area of 15,950 square meters.
1990	Additional plant land in Miaoli Zhongxing Industrial Park was acquired, covering an area
	of 9,547 square meters.
1991	Shares were publicly offered.
1993	Dayuan Plant, which engaged in the transportation business, was established in Taoyuan
	Dayuan Industrial Park, covering an area of 15,838 square meters.
1994	Passed ISO 9002 International Quality Management System certification.
1996	Highly rated by SQAS, the European Road Transport Safety and Quality Assessment
	System.
1997	Shares were listed in TWSE.
1998	The Company's first gas station was established in Kaohsiung Plant.
1999	Zhongli Plant was established, covering an area of 15,384 square meters. Gas stations and
	vehicle supervision and inspection business were established in Zhongyi Plant and Miaoli
	Plant, separately.
2001	Gas stations were established in Taichung Plant and Pingdong Chaozhou, respectively.
2002	A logistics warehouse was established in Taoyuan County. Gas stations were respectively
	established in Yilan, Luodong, Yingge, Dayuan, Guanyin, Houli, Daya, Longjing, Zhukeng,
	Caotun, Dalin and Zhutian. Passed ISO9001: 2000 Rev. certification. Annual turnover
	reached NT $3 billion.
2003	Passed ISO 14001, International Environmental Management System certification. Annual
	revenue reached NT $4.9 billion.
2004	Shanghai Shantong Storage and Transportation Co., Ltd. Shan-Loong Customs Reporting
	Co., Ltd changed its name into Shan-Loong International & Customs Broker Co., Ltd.
	Shan-Loong Quarterly was published. Annual revenue reached NT $6.6 billion. The
	Company's first domestic convertible corporate bonds of NT $300 million was issued.
2005	Passed ISO14001: 2004 Revision certification. Annual revenue reached NT $8.6 billion.
2006	Passed OHSAS 18001 Occupational Health and Safety Assessment System certification.
	A GPS Transportation Management System was established. Rebanded the gas stations.
	Gas stations amounted to 55. Annual turnover reached NT $9.9 billion.
2007	The Company's second domestic convertible corporate bonds of NT $300 million and chip

	membership cards of gas stations were issued. Annual turnover reached NT $10.9 billion.
2008	Introduced TPM (Total Production Management) system and established E-Learning
	(Electronic Learning) system.
	Engaged in the Ministry of Economy's “Intelligent Unmanned Store Construction and
	Expansion Plan” as a sponsored vendor.
	Engaged in the TTQS (Taiwan Training Quality System) guidance and human resource
	upgrading individual program subsidy. Annual turnover reached NT $11.8 billion.
	Passed and highly rated by Taiwan Chemical SQAS Cargo Container and Flat Cart
	Appraisal System (82%).
2009	Passed OHSAS 18001: 2007 Rev. and ISO 9001: 2008 Rev. certification.
	Received a $1 million subsidy from the Works Council Vocational Training Bureau's
	"Immediate Charge Program". Introduced ECTS (Enterprise Functional Training System).
	The E-Learning system was awarded the “Learning& Service Dual-A Certification” of the
	Digital Collection Quality Assurance Center and received government subsidy.
2010	Passed and highly rated by the Formosa Plastic SQAS Chemical Tank Car Assessment
	System (88%).
	A daily checkout operation system was established. Mailiao Operation Location and gas
	station were established.
	Application for the "Enterprise Deepening Digital Application Textbook Project Subsidy
	Plan" through the Small and Medium Enterprises Branch of the Ministry of Economic
	Affairs was approved.
2011	Awarded the Silver Medal in the TTQS Training Quality Review for Year 2011.
	Passed the SQAS assessment for Year 2011.
	Awarded as the Insured Unit with the Best Performance in Convenience Services. Shan-
	Loong adopted the online Declaration of Data Change in March 2007, with an E-rate of
	99.74%, ranking among the top three insured units with the highest E-rate.
2012	The first electronic receipt was issued by Shan-loong gas station in the industry, setting a
	new model for energy saving and carbon reduction.
	Obtained the Healthy Workplace Autonomous Certification - Hazard Control Mark and the
	“Premium Healthy Workplace” Award.
2013	Completed the first Corporate Social Responsibility Report.
	Self-refueling service by swiping cards was introduced in Shulin Station, the Company's
	first self-refueling station.
2014	Donated the second-hand books to primary schools and established a Green Paper Library
	to promote the knowledge.
	Passed the SQAS assessment consecutively.
	Diversified business was launched in Shan-Loong gas stations and Lingya Convenience
	Store was officially opened.

2015	The Company established Shantong Oil Products Co., Ltd, and the first overseas gas station
	was built in Anhui.
	Shan-Loong Gas Station won the 3rd place in the 12th Service Industry Award of Weekly
	2015.
2016	Passed the “RSQAS” Road Safety Quality and “AEO” Quality Safety Enterprise System
	certification.
2017	Acquired a land in Haigan, Dauyuan District, Taoyuan City to build a logistics park.
2018	Won 89th place in service industry in the World's magazine's top 2000 Corporate Survey.
	Won the "Bronze Medal" in TTQS Talent Development Quality Management Review for
	Year 2018.
2019	Passed three-year-calibration with Safety Certified Quality Enterprise (AEO).
	Passed Aural Assessment Road Transport Safety Quality Assessment System (SQAS) of
	Formosa Plastics General Management Office.
	Honored by 1111 Job Bank as a superior place to work.
	Ranked 7th place in the warehousing and cargo transportation industry of "Top 5000 Large
	Enterprises in Taiwan".
2020	Completed ISO 45001: 2018 shift.
	Donated 5 Firefighting clothes and trousers each to the Yunlin County Fire Department.
	Awarded the TFCA Toxicity Prevention Organization Live Rehearsal Excellence Award
	and Honor Award.
	Awarded with the Excellent Customs-declaration Achievement.
	The Lab of Environment Protection Department passed and obtained the Permit to
	Competence Mechanism of Environmental testing and measuring.
2021	Honored by the National Taxation Bureau for presenting the Achievement Excellent
	Operator Award.
	Awarded the “Authorities (Institution) and Manufacturers Who Employ Indigenous People
	Excessively Award” Special Merit Award.
	Jiatai Station, Shan-Loong's first fully self-service gas station, was put into operation in
	Southern Area.
	Plant in Taichung Logistics Park (Beidi Automobile Plant) was relocated to Zili Road,
	Wuqi District and renamed as "Taichung Second Plant".
	Minxiong gas station was established and put into operation. At present, the total number
	of gas stations in Taiwan has reached 80.

Chapter 3. Corporate Governance Report

I. Organization

(I) Organization Chart

==> picture [414 x 657] intentionally omitted <==

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

Corporate Social
Responsibility Team
Best Practice
Operation Team
Audit Committee Management Office
Head Office of
Operations
Remuneration and
Compensation
Committee
Financial and
Accounting
Department
Industry
Department
Transportation
Department Logistics
Department
Oil Products
Oil Business Department
Department
Environmental
Protection
Overseas Business
Department
Development
Department
Information Office
Planning
Department
Purchasing
Department
Secretariat of the
Board
Audit Department
Shareholders' Meeting Board of Directors Chairman Vice Chairman President
----- End of picture text -----

(II) Business Activities of Main Divisions

Head Office of Operations	1. Plans and executes affairs related to human resources, education and training. 2. Plans and executes accounting, and prepares, compilation and analysis financial statements and implements related team operation. 3. Coordinates the planning and management of the source and use of funds as well as the handling of share-related affairs. 4. Supervises plants and gas stations to carry out labor safety and health affairs, and establishes a company-wide safety and health prevention system. 5. Formulates the company's pollution prevention and control policies and improves plans and emergency handling standards for plants and gas stations. 6. Occupational healthand safetymanagement.
Transportation Department	1. In charge of business such as container transportation, shipboard bulk operations, etc. 2. In charge of bulk cargo handling, warehousing and logistics delivery, and other business.
Oil Business Department	In charge of oil sales business.
Planning Department	In charge of the planning and execution of the Company's marketing plans and team business, and provide improvement and advice.
Purchasing Department	In charge of price enquiry and quotation for each product.
Information Office	1. In charge of management planning and maintenance of the Company's computer systems, equipment and data base, as well as the construction and integration of information system. 2. In charge of the Company's information security, virus protection and the maintenance ofcomputer hardware
Audit Department	In charge of the evaluation of the Company's internal control system deficiencies and measure operational efficiency, and provide recommendations for improvement in a timely manner to ensure the effective implementation of the internal control system and assist managementin fulfillingitsresponsibilities.
Overseas Business Department	1. In charge of the proposal of the business target and promote the supervision of the overseas business. 2. Tracks, evaluates and improves the performance of overseas business operations. 3. Assists, assesses and improves various management operations of overseas undertakings. 4. In charge of the business coordinations of overseas companies with their parent company. 5. Learns and responses to important local financial laws and regulations of overseas companies. 6. Examines and evaluates overseas investment targets and new plant sites.
Secretariat of the Board of Directors	Related affairs of convening the meeting of the Board of Directors

II. Information on the Company's Directors, President, Vice Presidents, Associate Managers, and the Supervisors of all the Company's Divisions and Branch Units

(I) Director

	(I) Director	(I) Director	(I) Director
																	March 28, 2022
				Date Electe d	Term (Years)		Shareholding		Shares Currently		Spouse & Minor						Other	Supervisors or		Remark
													Shareholding		P	Titles	Director	s who ar	e spouses or
							When	Elected	Hel	d	Shareholding		by n arra	ominee ement	rimary work or academic experiences	also held at the Company and other companies	within t kinship	he secon	d degree of
														g
	Ntilit/
Job Title	aonay Place of	Name	Gender			Date First	Number of Shares	Shareholding ratio	Number of Shares	Shareholding ratio	Number of Shares	Shareholding ratio	Number of Shares	Shareholding ratio			Title	Name	Relationship
	Incorporation		Age			Elected


Chi f	Rbli f	H	Ml	2020 05 29	3 years		4,328,876	3.15	4,328,876	3.15	- -	-	-	-			Director	Su- Yun Cheng		None

															Vice Chairman				Brother and Sister
															of Ta-Yuan
						2014									Cogen Co., Ltd. Master of	Chairman of K L
arman o the Board	epuc o China	Jen-ao Cheng	ae 41-50 y.o			06									Commerce,	o oong Industry Co.,
						26									Waseda University	Ltd.	Director	Chuan- Chuan Lu
															Graduate School,
																			Parent
															Japan


				2020 05 29	3 years		304,691	0.22	304,691	0.22	16,312	0.01	-	-			None	None		None
															Shan-Loong	Shine Far
Deputy Chairman of	Republic of	Lan-Hui	Male 61-70			2005 06									Transportation President	Construction			None
the Board	China	Yu	y.o			17									Yung-Ta	Co., Ltd. Chairman
															Institute


							12,690,010	9.24	12,690,010	9.24	-	-	-	-			Ch	Jen-		None

																			Brother
		Cheng															ai
															Cheng Loong	Cheng	rma	Hao Ch	and Sister
		Loong Corporati		2020 05 29	3 years										Corporation	Loong Corporation	n	eng
Director	Republic of Chi	on Rt	Female 41-50			2020 05									Vice Chairman Waseda	Chairman Dit f
	na	epresen ative: Su- Yun	y.o			29	-	-	-	-	-	-	-	-	University Graduate School, Japan	recor o GemTech Optoelectron	Director	Chuan- Chuan Lu	Mother
		Cheng														ics Corp.			and

																			daughter

							6,743,227	4.91	6,743,227	4.91	-	-	-	-			Ch	Jen-		None

		Shine Far															airm	Hao	Parent
		Constructi													Ming Fong		an	Cheng
		on Co.,		2020 05 29	3 years	2002									Plastic Co., Ltd.	Shine Far
	Republic of	Ltd.	Female 71-												Chairman	Co., Ltd.
Director	China	Represent	80 y.o			06 21	866,450	0.63	866,450	0.63	68,000	0.05	-	-	Shih Chien	Managing	Director	Su- Yun Cheng
		ative: Chuan-													College of Home Economics	Director			Mother
		Chuan Lu																	and
																			daughter

				2020 05 29	3 years		8,367,944	6.10	8,367,944	6.10	-	-	-	-			None	None		None
		Shine Far													Northrop	Shan-Loong
		Co., Ltd.				2014									University,	Transportatio
Director	Republic of China	Representa	Male 51-60 y.o			06									Deputy General Manager, Shan-	n			None
		tive: Ken- Pei Cheng				26	85,986	0.06	85,986	0.06	-	-	-	-	Loong Transportation	Vice President


				2020 05 29	3 years		1,800,000	1.31	1,800,000	1.31	181,733-	0.13	-	-		Chien Shin	None	None		None
															Chien Shing
	Republic	Yen-Ming	Male 41-50			2020									Harbour Service Co., Ltd.	g Harbour
Director	of China	Chen	y.o			05 29									President	Service Co., Ltd.			None
															MBA, Columbia University	President

				2020 05 29	3 years		-	-	-	-	-	-	-	-		Member of	None	None		None
																Audit
																Committee
																and
																Remuneratio
															National Taiwan
															University,	n and
Independent	Republic of	Yao-Ming	Male 61-70			2017 06									Business	Compensatio n Committee			None
Director	China	Huang	y.o			22									Department, Accounting	of the
															Division	Company Retired
																Certified
																Public
																Accountant,
																KPMG
				2020 05 29	3 years		-	-	-	-	-	-	-	-		Member of	None	None		None
															Vice President	Audit
															of Cheng Loong	Committee d
Independent	Republic of	Hsu-Feng	Male 71-80			2020									Corporation,	an Remuneratio
Director	China	Ho	y.o			05 29									Chung Yuan Christian College	n and			None
															of Science and	Compensatio n Committee
															Engineering	of the

																Company
				2020 05 29	3 years		50,506	0.04	50,506	0.04	-	-	-	-		Member of	None	None		None
																Audit
															Vice President,	Committee
						2017									Shan-Loong	and
Independent	Republic of	Mao-Chun	Male 71-80												Transportation	Remuneratio
Director	China	Wang	y.o			06 22									Zhongli	n and			None
															Commercial	Compensatio
															School	n Committee
																of the
																Company

Disclosure of the professional qualifications of directors and supervisors and the information on independence of independent directors:

Criteria Name	Professional Qualification and Work Experience	Independence Criteria (Notes)	Independence Criteria (Notes)	Independence Criteria (Notes)	Independence Criteria (Notes)	Independence Criteria (Notes)	Independence Criteria (Notes)	Independence Criteria (Notes)	Independence Criteria (Notes)	Independence Criteria (Notes)	Independence Criteria (Notes)	Independence Criteria (Notes)	Independence Criteria (Notes)	Number of Other Public Companies in Which the Individual Is Concurrently Serving as An Independent Director
		1	2	3	4	5	6	7	8	9	10	11	12
Jen-Hao Cheng	Vice Chairman of Ta-Yuan Cogen Co., Ltd.							v		v		v	v
Lan-Hui Yu	President of Shan-Loong Corporation			v	v	v	v	v	v	v	v	v	v
Cheng Loong Corporation Representative: Su- Yun Cheng	Vice Chairman of Cheng Loong Corporation							v		v		v	v
Shine Far Construction Co., Ltd. Representative: Chuan-Chuan Lu	Chairman of the Board of Directors of Ming Fong Plastic Co., Ltd.							v		v		v	v
Shine Far Co., Ltd. Representative: Ken- Pei Cheng	Vice President of Shan-Loong Transportation			v		v	v	v	v	v	v	v	v
Yen-Ming Chen	President of Chien Shing Harbour Service Co., Ltd.	v	v		v	v	v	v	v	v	v	v	v
Yao-Ming Huang	Retired Certified Public Accountant, KPMG	v	v	v	v	v	v	v	v	v	v	v	v	1
Hsu-Feng Ho	Vice President of Cheng Loong Corporation	v	v	v	v	v	v	v	v	v	v	v	v
Mao-Chun Wang	Vice President, Shan-Loong Transportation	v	v	v	v	v	v	v	v	v	v	v	v

Note: Please tick the corresponding boxes that apply to the members during the two years prior to being elected or during the term of office.

(I) Not employed by the Company or any of its related companies.
(II) Not a Director or Supervisor of the Company or any of its affiliates. (Not applicable in cases where the person is an Independent Director of the Company, its parent company, or any subsidiary as appointed in accordance with the Act or with the laws of the country of the parent or subsidiary).

(III) Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of one percent or ranking in the top 10 in holdings.
(IV) Not a spouse, or a relative within the second degree of kinship or lineal relative of third degree of kinship of manager or (2), (3) personnel listed in (1).
(V) Not serving as a Director, Supervisor or Employee of Judicial Person Shareholder holding a five percent of total issued shares of the Company, holding the top five shares or appointing representatives to assume Director or Supervisor according to Subparagraph 1 and 2, Article 27, Company Act (this does not apply in cases where the person is an Independent Director of the Company, its parent or subsidiary, or subsidiary belonging to the same parent company established in pursuant to this law or local laws).
(VI) Not serving as a Director, Supervisor or Employee of the other companies that their board seats of the Company or more than half of shares that owns voting rights controlled by the same person (this does not apply in cases where the person is an Independent Director of the Company, its parent or subsidiary, or subsidiary belonging to the same parent company established in pursuant to this law or local laws).
(VII) Not serving as a Director, Supervisor or Employee of other companies or agencies that are the same person, or spouse of a Director, GM or Person holding equivalent position of the Company (this does not apply in cases where the person is an Independent Director of the Company, its parent or subsidiary, or subsidiary belonging to the same parent company established in pursuant to this law or local laws).
(VIII) Not a Director, Supervisor, Manager or shareholder holding over five percent shares of special company or agency that has financial or business interactions with the Company (this does not apply in cases where the person that special company or agency holding more than twenty percent, less than fifty percent of the total issued shares, and is an Independent Director of the Company, its parent or subsidiary, or subsidiary belonging to the same parent company established in pursuant to this law or local laws).
(IX) Not a Professional, Business Owner, Partner, Director, Supervisor, Manager and Spouse of Sole proprietorship, partnership, company or institution in terms of relevant service including commercial, legal, financial, accounting affair providing audit to the Company or affiliated enterprises or whose accumulative amount being no more than NTD 500,000 in recent two years. However, members of the special committee on remuneration, public acquisition review, or merger and acquisition who perform their functions and powers in accordance with the provisions of the Securities Trading Act or Business Mergers and Acquisitions Act and other relevant regulations shall not be subject to this provision.
(X) Not having a martial relationship, or a relative with the second degree of kinship to other directors.
(XI) Not been a person of any conditions defined in Article 30 of the Company Act.
(XII) Not a governmental, juridical person or its representative elected as defined in Article 27 of the Company Act.

Table 1: Major shareholders of legal entity shareholders

March 28, 2022 Major shareholders of the institutional shareholders Sun Favourite Co., Ltd. 52.81% Jen Yun Co., Ltd. 23.71% Shine Far Construction Co., Ltd. 17.23% Chuan-Chuan Lu 1.53% Hsing-Jui Li 1.00% Yu-Ching Su 0.98% Shan-Loong Transportation Co., Ltd. 0.87% Tung-Han Tsai 0.59% Ai-Ling Chi 0.51% Ming-Chuan Hsieh 0.43% Cheng-Lung Cheng 19.53% Shine Far Construction Co., Ltd. 19.31% Chuan-Chuan Lu 13.91% Cheng Loong Corporation 8.14% Sun Favourite Co., Ltd. 4.64% Wen-Ming Cheng 4.13% Shine Far Co., Ltd 3.91% Chin-Chung Lin 3.57% Lu-Chu-Erh Lin 3.57% Yu-Ching Su 2.93% Ai-Ling Chi 22.39% Jen-Ming Cheng 20.90% Chiao-Yun Cheng 17.53% Su-Yun Cheng 17.53% Cheng-Lung Cheng 12.24% Chuan-Chuan Lu 8.96% Jen Yun Co., Ltd. 0.45%

Name of institutional shareholders	Major shareholders of the institutional shareholders
Shine Far Co., Ltd	Sun Favourite Co., Ltd. 52.81%
	Jen Yun Co., Ltd. 23.71%
	Shine Far Construction Co., Ltd. 17.23%
	Chuan-Chuan Lu 1.53%
	Hsing-Jui Li 1.00%
	Yu-Ching Su 0.98%
	Shan-Loong Transportation Co., Ltd. 0.87%
	Tung-Han Tsai 0.59%
	Ai-Ling Chi 0.51%
	Ming-Chuan Hsieh 0.43%
Ming Fong Plastic Co., Ltd.	Cheng-Lung Cheng 19.53%
	Shine Far Construction Co., Ltd. 19.31%
	Chuan-Chuan Lu 13.91%
	Cheng Loong Corporation 8.14%
	Sun Favourite Co., Ltd. 4.64%
	Wen-Ming Cheng 4.13%
	Shine Far Co., Ltd 3.91%
	Chin-Chung Lin 3.57%
	Lu-Chu-Erh Lin 3.57%
	Yu-Ching Su 2.93%
Sun Favourite Co., Ltd.	Ai-Ling Chi 22.39%
	Jen-Ming Cheng 20.90%
	Chiao-Yun Cheng 17.53%
	Su-Yun Cheng 17.53%
	Cheng-Lung Cheng 12.24%
	Chuan-Chuan Lu 8.96%
	Jen Yun Co., Ltd. 0.45%

Table 2: Major Shareholders of Legal Entities in Table 1

Name of legal entity shareholder	Major shareholders of legal entity shareholder
Cheng Loong Corporation	Sun Favourite Co., Ltd. 4.92%
	Shine Far Construction Co., Ltd. 4.25%
	Wenjing Development Co., Ltd. 3.91%
	Fubon Life Insurance Co., Ltd. 3.78%
	Jen Yun Co., Ltd. 3.77%
	Employee Welfare Committee of Cheng Loong Corporation 3.11%
	Shan-Loong Investment Co., Ltd. 2.87%
	Special ESOP account of Cheng Loong Corporation entrusted in CTBC Bank 2.47%
	Shine Far Co., Ltd 2.46%
	Chunghwa Post Co., Ltd. 2.04%
Shan-Loong Transportation Co., Ltd.	Cheng Loong Corporation 6.16%
	Special ESOP account of Shan-Loong Transportation Co., Ltd entrusted in CTBCBank6.88%
	Shine Far Co., Ltd 6.10%
	Shine Far Construction Co., Ltd. 4.91%
	Jen-Ming Cheng 4.77%
	Cheng Loong Investment Co., Ltd. 3.55%
	Chengshi Investment Co., Ltd. 3.38%
	Jen-Hao Cheng 3.15%
	Chiung-Miao Yeh 3.07%
	Wen-Ming Cheng 1.59%
Jen Yun Co., Ltd.	Chung Win Investments Limited 23.53%
	Jen-Ming Cheng 14.12%
	Ai-Ling Chi 14.12%
	Su-Yun Cheng 14.12%
	Chuan-Chuan Lu 14.12%
	Chiao-Yun Cheng 11.76%
	Chu-Chun Hsiung 5.88%
	Cheng-Lung Cheng 2.35%

Name of legal entity shareholder	Major shareholders of legal entity shareholder
Shine Far Construction Co., Ltd.	Jen-Ming Cheng 26.49%
	Ai-Ling Chi 26.49%
	Su-Yun Cheng 15.00%
	Chuan-Chuan Lu 13.26%
	Chiao-Yun Cheng 10.27%
	Cheng-Lung Cheng 8.13%
	Wenjing Development Co., Ltd. 0.36%
Shine Far Co., Ltd	Please refer to P.13
Sun Favourite Co., Ltd.

(II) Information of the President, Vice President, associate, and the chiefs of various departments and branches

March 28, 2022

Title	Nationality	Name	Gender	Date Elected	Shareholding	Shareholding	Spouse's/Minor's Shareholding	Spouse's/Minor's Shareholding	Shareholding by nominee arrangement	Shareholding by nominee arrangement	Primary Work or Academic Experiences	Position Held with Other Companies	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Managers who are Spouses or Within Two Degrees of Kinship	Remark Note 7
					Number of Shares	Shareho lding ratio	Number of Shares	Sharehol ding ratio	Number of Shares	Sharehold ing ratio			Title	Name	Relatio nship
President (Note 1)	Republic of China	Jen- Hao Cheng	Male	2021. 09.16	4,328,876	3.15	-	-	-	-	Vice Chairman of Ta-Yuan Cogen Co., Ltd. Master of Commerce, Waseda University Graduate School, Japan	None	None	None	None
President (Note 1)	Republic of China	Tsai- Yuan Lin	Male	2021. 01.01	214,627	0.16	-	-	-	-	Vice President of the Company Engineering and Management Department, National Kaohsiung University of Applied Sciences	None	None	None	None	None
Vice President (Note 2)	Republic of China	Ching- Feng Yang	Male	2021. 01.01	-	-	-	-	-	-	Manager of the Company Oriental Institute of Technology	None	None	None	None	None
Associat e	Republic of China China	Cheng Ken- pei	Male	2016. 01.01	85,986	0.06	-	-	-	-	Associate of the Company Northrop University	None	None	None	None	None
Director of Oil Products	Republic of China	Yung- Lung Lin	Male	2019. 12.01	-	-	-	-	-	-	Manager and Associate of the Company Electrical Engineering Department, Far East Institute of Technology	None	None	None	None	None
Audit Director (Note 3)	Republic of China	Kun- Lin Wu	Male	2021. 09.01	-	-	1	-	-	-	Manager of the Company Department of Industrial Management, Vanung University	None	None	None	None	None
Audit Director (Note 3)	Republic of China	Kan- Kuan Ling	Male	2021. 01.01	44,750	0.03	－	-	-	-	Deputy Manager and Manager of the Company Department of Business Administration, Tunghai University	None	None	None	None	None
Finance Manager (Note 4)	Republic of China	Wei- Teng Hsiao	Male	2021. 11.11	-	-	-	-	-	-	Manager of the Company Department of Accounting, Tamkang University	None	None	None	None	None
Finance Manager (Note 4, 5)	Republic of China	Mei- Ling Chuang	Female	2021. 05.10	-	-	-	-	-	-	Department of Enterprise Management, Ming Chuan University	None	None	None	None	None

Finance Manager (Note 5)	Republic of China	Chia- Feng Yang	Male	2020 .06.09	-	-	-	-	-	-	Manager and Associate of the Company Master of Arts in Accounting, Fu Jen Catholic University	None	None	None	None	None
Accounti ng Manager (Note 6)	Republic of China	Yu- Cheng Yao	Male	2021. 11.11	-	-	-	-	-	-	Associate of the Company Department of Accounting Information, National Taichung University of Science and Technology	None	None	None	None	None
Accounti ng Manager (Note 6)	Republic of China	Mei- Ling Chuang	Female	2020. 08.11	-	-	-	-	-	-	Manager and Associate of the Company Department of Enterprise Management, Ming Chuan University	None	None	None	None	None

Note 1. Tsai-Yuan Lin, Former President, retired in September 2021, and Chairman Jen-Hao Cheng was appointed as Acting President in September 2021.
Note 2. Ching-Feng Yang, Vice President, was reassigned in December, 2021.
Note 3. Kuan-Ling Kan, the Audit Manager, retired in August 2021 and Kun-Lin Wu succeeded as the new Audit Manager in September 2021.
Note 4. Mei-Ling Chuang, the Financial Manager was reassigned in November 2021 and Wei-Tung Hsiao succeeded as the new Financial Manager in November 2021.
Note 5. Chia-Feng Yang, the Financial Manager, was reassigned in May 2021, and Mei-Ling Chuang succeeded as the new Financial Manager in May 2021.
Note 6. Mei-Ling Chuang, the Accounting Manager was reassigned in November 2021, and YuCheng Yao succeeded as the new Accounting Manager in November 2021.
Note 7. In case of the President or equivalent (top manager) and the Chairman of the Board of Directors are the same person, be a couple or first-degree kinship, the reasons, reasonableness, necessity and response measures shall be stated: to date, the Chairman of the board of directors and the President of the Company are the same person, which is due to operational needs of improving the efficiency of decision execution and operation. However, in corporate governance, matters falling within the decision-making powers of the Board of Directors are fully communicated and discussed with all members of the Board of Directors, and the Management is only empowered to plan, execute and control such matters once the relevant proposal has been approved by the Board of Directors. In the future, the Company will increase the number of independent directors within the time limit prescribed by the relevant Decree (before the end of 2023) or select suitable candidates in the management to serve as the President so as to avoid the situation that the Chairman of the Board is the same person as the President.

(III) Remuneration of general Directors, Independent Directors, President and Vice President

1. Remuneration of Directors and Independent Directors

																Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021
Title	Name	Remuneration Paid to Directors								Total Amount of A, B, C and D and Ratio of it to Net Income After Tax		Relevant Remuneration Received byDirectors Who are				Also Employees				Total Amount of A, B, C, D, E, F and G and Ratio of it to Net Income After Tax		Compensation Paid to Directors from an Invested Company Other than the Company ’ s Subsidiary
		Base Compe nsation (A)		Severance Pay and Pension (B)		Directors (C)		Business Execution Expenses (D)				Salary, Bonuses, and Allowances (E)		Severance Pay and Pension (F)		Employee Compensation (G)
		The Company ~~t t~~ ~~t~~	Companies in the consolidated financial	The Company ~~t t~~ ~~t~~	Companies in the consolidated financial	The Company ~~t t~~ ~~t~~	Companies in the consolidated financial	The Company	Companies in the consolidated financial statements	The Company The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company		Companies in the consolidated financial statements		The Company	Companies in the consolidated financial statements
																Cash	Stock Amount	Cash	Stock Amount
Chairman	Jen-Hao Cheng	-	-	-	-	-	-	11,520	11,520	2.77	2.71	13,091	14,531	182	182	98	-	98	-	5.99	6.20	6,648
Director	Lan-Hui Yu
Director	Yen-Ming Chen
Director	Shine Far Co Ltd Representative: Ken-Pei Cheng
Director	Cheng Loong Corporation Representative: Su-Yun Cheng
Director	Shine Far Construction Co., Ltd. Representative: Chuan-Chuan Lu
Independent Director	Yao-Ming Huang	-	-	-	-	-	-	5,760	5,760	1.39	1.36	-	-	-	-	-	-	-	-	1.39	1.36	-
Independent Director	Hsu-Feng Ho
Independent Director	Mao-Chun Wang
Note 1. Please clarify the remuner of independent directors o The compensationofalld		ation payment policy, system, standards and structure for independent directors, and clarify the correlation between the responsibilities, risks, time spent and other factors assumed and the amount of remuneration paid: the remuneration f the Company shall be paid by the Company in accordance with the provisions of Article 16 of the Company's Articles of Incorporation when the directors carry out the business of the Company, regardless of the operating profit or loss. irectors shallbe determined by theBoard of Directors according to the degree oftheirparticipation inthe operations ofthe Company and the value oftheircontribution, takinginto account thelevelofthe sameindustry.
Note 2. In addition to the disclosures in the table above, the remuneration received for services rendered by directors of the Company in the most recent year (e.g. acting as consultants to non-employees of the parent company/all companies in the financial statements/reinvestment business, etc.): 0.

Table of Range of Remuneration

Table of Range of Remuneration
Range of Remuneration		Name of Directors
	Total remuneration	of the first four items	Total remuneration of the first seven items
	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements
Less than NT$1,000,000	-	-	-	-
NT$1,000,000 (inclusive) to 2,000,000 (not inclusive)	Jen-Hao Cheng, Lan-Hui Yu, Yen- Ming Chen, Shine Far Co Ltd Representative: Ken-Pei Cheng, Cheng Loong Corporation Representative: Su-Yun Cheng, Shine Far Construction Co., Ltd. Representative: Chuan-Chuan Lu, Yao-Ming Huang, Hsu-Feng Ho, Mao-Chun Wang.	Jen-Hao Cheng, Lan-Hui Yu, Yen- Ming Chen, Shine Far Co Ltd Representative: Ken-Pei Cheng, Cheng Loong Corporation Representative: Su-Yun Cheng, Shine Far Construction Co., Ltd. Representative: Chuan-Chuan Lu, Yao-Ming Huang, Hsu-Feng Ho, Mao-Chun Wang.	Yen-Ming Chen, Cheng Loong Corporation Representative: Su- Yun Cheng, Shine Far Construction Co., Ltd. Representative: Chuan- Chuan Lu, Yao-Ming Huang, Hsu- Feng Ho, Mao-Chun Wang.	Yen-Ming Chen, Cheng Loong Corporation Representative: Su- Yun Cheng, Shine Far Construction Co., Ltd. Representative: Chuan- Chuan Lu, Yao-Ming Huang, Hsu- Feng Ho, Mao-Chun Wang.
NT$2,000,000 (inclusive) to 3,500,000 (not inclusive)	-	-	-	-
NT$3,500,000 (inclusive) to 5,000,000 (not inclusive)	-	-	Ken-Pei Cheng	Ken-Pei Cheng
NT$5,000,000 (inclusive) to 10,000,000 (not inclusive)	-	-	Jen-Hao Cheng, Lan-Hui Yu.	Jen-Hao Cheng, Lan-Hui Yu.
NT$10,000,000 (inclusive) to 15,000,000 (not inclusive)	-	-	-	-
NT$15,000,000 (inclusive) to 30,000,000 (not inclusive)	-	-	-	-
NT$30,000,000 (inclusive) to 50,000,000 (not inclusive)	-	-	-	-
NT$50,000,000 (inclusive) to 100,000,000 (not inclusive)	-	-	-	-
Over NT$100,000,000	-	-	-	-
Total	9	9	9	9

2. Remuneration of the President and Vice Presidents

								Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021	Unit: NT $1,000 December 31, 2021
Title	Name	Salary (A)		Severance Pay and Pension (B)		Bonuses and Allowances (C)		Employee Compensation (D)				Total Amount of A, B, C and D and Ratio of it to Net Income After Tax		Compensation Paid to Directors from an Invested Company Other than the Company’s Subsidiary -
		The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company		Companies in the consolidated financial statements		The Company	Companies in the consolidated financial statements
								Cash	Stock Amount	Cash Amount	Stock Amount
President (Note 1)	Tsai- Yuan Lin	4,941	6,921	260	260	7,028	7,388	87	-	87	-	2.96	3.45
Chief Operating Officer	Min- Peng Hsu
Vice President	Yung- Lung Lin
Vice President	Ching- Feng Yang

Note 1. Tsai-Yuan Lin, Former President, retired in September 2021

Note 2.

Table of Range of Remuneration

Vice President Feng Yang Note 1. Tsai-Yuan Lin, Former President, retired in September 2021 Note 2. Table of Range of Remuneration
Range of remuneration paid to the President and Vice Presidents of the Company	Name of President	and Vice Presidents
	The Company	Companies in the consolidated financial statements
Less than NT$1,000,000
NT$1,000,000(inclusive)to 2,000,000(not inclusive)	Tsai-Yuan Lin
NT$2,000,000(inclusive)to 3,500,000(not inclusive)	Min-PengHsu, Ching-FengYang	Tsai-Yuan Lin, Min-PengHsu
NT$3,500,000(inclusive)to 5,000,000(not inclusive)	Yung-LungLin	Ching-FengYang
NT$5,000,000(inclusive)to 10,000,000(not inclusive)		Yung-LungLin
NT$10,000,000 (inclusive) to 15,000,000 (not inclusive)
NT$15,000,000 (inclusive) to 30,000,000 (not inclusive)
NT$30,000,000 (inclusive) to 50,000,000 (not inclusive)
NT$50,000,000 (inclusive) to 100,000,000 (not inclusive)
Over NT$100,000,000
Total	4	4

Remuneration of Management Team

Unit: NT $1,000 December 31, 2021


						Ratio of Total
	Title	Name	Stock Amount	Cash	Total	Compensations
						to NIAT

Managerial Personnel	President (Part- time)	Jen-Hao Cheng	－	199	199	0.05
	Vice Chairman	Lan-Hui Yu
	Chief Operating Officer	Min-Peng Hsu
	Vice President	Yung-LungLin
	Audit Director	Kun-Lin Wu
	Accounting Supervisor	Yu-Cheng Yao
	Finance Manager	Wei-Teng Hsiao

(IV) Comparison of the analysis of the ratio of total remuneration paid to directors, president and vice president of the Company in the last two fiscal years to the net income after tax of individual or individual financial statements, and the relationship between the policies, standards and combinations for the payment of remuneration, the procedures for determining remuneration, and the operational performance of the Company and all consolidated reports, respectively

Payee	Percentage of total compensations paid to NIAT	Percentage of total compensations paid to NIAT	Percentage of total compensations paid to NIAT	Percentage of total compensations paid to NIAT	Percentage of total compensations paid to NIAT	Percentage of total compensations paid to NIAT
	2021		2020		Difference
	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements	The Company	Companies in the consolidated financial statements
Director	7.38%	7.56%	9.72%	10.43%	(2.34)%	(2.87)%
President and Vice President	2.96%	3.45%	3.37%	3.75%	(0.41)%	(0.30)%

The fare to the directors shall be paid by the Company in accordance with the Company's Articles of Incorporation; In addition, concerning the remuneration of the president and vice president, the salary portion is paid in accordance with the "Peer Salary Management Method", according to the rank and position. The bonus portion is paid in accordance with the "Peer Bonus Payment Method" of the Company, as well as the salary, allowance and the operating performance of the Company in the previous year.

III. Implementation of Corporate Governance

(I) Board of Directors

A total of 8 meetings of the Board of Directors were held in 2021, and director and independent director

attendance was as follows:

Title	Name	Actual Attendance	Attendan ce by proxy	Percentage of Actual Attendance
Chairman	Jen-Hao Cheng	8	0	100
Vice Chairman	Lan-Hui Yu	8	0	100
Director	Cheng Loong Corporation	8	0	100
	Su-Yun Cheng
	Shine Far Construction Co.,Ltd.	5	0	63
	Chuan-Chuan Lu
	Shine Far Co.,Ltd.	8	0	100
	Ken-Pei Cheng
	Yen-Ming Chen	8	0	100
Independent Director	Yao-MingHuang	8	0	100
	Hsu-FengHo	8	0	100
	Mao-Chun Wang	8	0	100
Other mentionable items: I. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all Independent Directors’ opinions and the Company’s response should be specified: (I) Matters referred to in Article 14-3 of the Securities and Exchange Act: please refer to Page 29-31. (II) Other than the matters mentioned above, other resolutions that are objected and reserved by the Independent Directors and are documented or stated. II. If there are Directors’ avoidance of motions in conflict of interest, the Directors’ names, contents of motion, causes for avoidance and voting should be specified. The Company has in place the Rules of Procedure of the Board of Directors, Article 14 of which stipulates that a director who has an interest in the matters of the meeting with himself or a legal person on his behalf that is detrimental to the interests of the Company may make representations and answer questions, may not participate in the discussion and vote, and shall avoid the discussion and vote, and may not exercise his voting rights on behalf of other directors. III. TWSE/TPEx Listed Companies shall disclose information including the evaluation period and duration, evaluation scope, method and evaluation content of self (or peer) evaluation of the Board of Directors, and fill in the execution of the assessment by the board of directors. Frequency Period Scope Method Content Once a year Assessment of performance for the period from January 1 to December 31, 2021 Includes board of directors, individual board members and functional committees Internal evaluation and directors' self- assessment As described below In accordance with the Performance Appraisal Methodology of the Board of Directors of the Company, the Board of Directors shall perform an annual internal performance appraisal of the Board of Directors in accordance with the appraisal metrics and appraisal procedures. The performance evaluation of the Board shall be performed by an external professional body or a team of external expert scholars every three years. (1) External evaluation: second internal boardperformance evaluation is done in 2021,so no external

	professional review is required. (2) Internal Assessments: 1. Overall Assessment of Board of Directors According to the performance evaluation results of the Board of Directors, the average score of 45 indicators in five aspects is 4.89, and each aspect is between 4.59 and 4.95. Among them, the scores of "Composition and Structure of the Board of Directors" and "Selection and Continuous Improvement of Directors" are relatively low. There is still room for improvement in the setting of functional committees and the diversification of the composition of the Board of Directorsand the selection process. Assessment Aspect Rating A. Participation in the operation of the Company (12 indicators) 4.89 B. Improvement on the quality of the Board's decisions (12 indicators) 4.95 C. Composition and structure of the Board of Directors (7 indicators) 4.63 D. Election of Directors and Continuous Improvement (7 Indicators) 4.59 E. Internal controls (7 indicators) 4.95 2. Audit Committee According to the performance evaluation results of the Audit Committee, the average score of 22 indicators in five aspects is 4.94, and each aspect is between 4.89 and 5. Among them, the scores of "Improvement of Decision Quality of Functional Committees" and "Composition and Selection of Members of Functional Committees" are relatively low and it is recommended that the selection of members of the Audit Committee should take the performance evaluationresults into consideration. Assessment Aspect Rating A. Participation in the operation of the Company (4 indicators) 5.00 B. Awareness of the duties of the functional committee (5 indicators) 4.91 C. Improvement of quality of decisions made by the functional committee (7 indicators) 4.94 D. Makeup of the functional committee and election of its members. (3 indicators) 4.89 E. Internal controls (3 indicators) 4.93 3. Remuneration and Compensation Committee According to the performance evaluation results of the Remuneration Committee, the average score of 22 indicators in five aspects is 4.93, and each aspect is between 4.91 and 5. Among them, the scores of "Awareness of the duties of the functional committee", "Improvement of quality of decisions made by the functional committee" and "Composition of the functional committee and election of its members." are relatively low. It is recommended that the performance evaluation of directors be included as a reference basis for compensation, and that the performance evaluation results be included in the consideration of the selection of the members of the Remuneration Committee. Assessment Aspect Rating A. Participation in the operation of the Company (4 indicators) 5.00 B. Awareness of the duties of the functional committee (5 indicators) 4.91 C. Improvement of quality of decisions made by the functional committee (7 indicators) 4.92 D. Makeup of the functional committee and election of its members. (3 indicators) 4.93 E. Internal controls (3 indicators) N/A 4. Individual Director Assessment Aspect Rating	professional review is required. (2) Internal Assessments: 1. Overall Assessment of Board of Directors According to the performance evaluation results of the Board of Directors, the average score of 45 indicators in five aspects is 4.89, and each aspect is between 4.59 and 4.95. Among them, the scores of "Composition and Structure of the Board of Directors" and "Selection and Continuous Improvement of Directors" are relatively low. There is still room for improvement in the setting of functional committees and the diversification of the composition of the Board of Directorsand the selection process. Assessment Aspect Rating A. Participation in the operation of the Company (12 indicators) 4.89 B. Improvement on the quality of the Board's decisions (12 indicators) 4.95 C. Composition and structure of the Board of Directors (7 indicators) 4.63 D. Election of Directors and Continuous Improvement (7 Indicators) 4.59 E. Internal controls (7 indicators) 4.95 2. Audit Committee According to the performance evaluation results of the Audit Committee, the average score of 22 indicators in five aspects is 4.94, and each aspect is between 4.89 and 5. Among them, the scores of "Improvement of Decision Quality of Functional Committees" and "Composition and Selection of Members of Functional Committees" are relatively low and it is recommended that the selection of members of the Audit Committee should take the performance evaluationresults into consideration. Assessment Aspect Rating A. Participation in the operation of the Company (4 indicators) 5.00 B. Awareness of the duties of the functional committee (5 indicators) 4.91 C. Improvement of quality of decisions made by the functional committee (7 indicators) 4.94 D. Makeup of the functional committee and election of its members. (3 indicators) 4.89 E. Internal controls (3 indicators) 4.93 3. Remuneration and Compensation Committee According to the performance evaluation results of the Remuneration Committee, the average score of 22 indicators in five aspects is 4.93, and each aspect is between 4.91 and 5. Among them, the scores of "Awareness of the duties of the functional committee", "Improvement of quality of decisions made by the functional committee" and "Composition of the functional committee and election of its members." are relatively low. It is recommended that the performance evaluation of directors be included as a reference basis for compensation, and that the performance evaluation results be included in the consideration of the selection of the members of the Remuneration Committee. Assessment Aspect Rating A. Participation in the operation of the Company (4 indicators) 5.00 B. Awareness of the duties of the functional committee (5 indicators) 4.91 C. Improvement of quality of decisions made by the functional committee (7 indicators) 4.92 D. Makeup of the functional committee and election of its members. (3 indicators) 4.93 E. Internal controls (3 indicators) N/A 4. Individual Director Assessment Aspect Rating
	Assessment Aspect	Rating
	A. Participation in the operation of the Company (4 indicators)	5.00
	B. Awareness of the duties of the functional committee (5 indicators)	4.91
	C. Improvement of quality of decisions made by the functional committee (7 indicators)	4.92
	D. Makeup of the functional committee and election of its members. (3 indicators)	4.93
	E. Internal controls (3 indicators)	N/A
	4. Individual Director
	Assessment Aspect	Rating

	A. Alignment of the goals and missions of the Company (3 Indicators)	4.89
	B. Awareness of the duties of the Directors (3 Indicators)	4.96
	C. Participation in the operation of the Company (8 Indicators)	4.90
	D. Management and communication of the internal relations (3 Indicators)	4.85
	E. The director's professionalism and continuing improvement. (3 Indicators)	4.63

Audit Committee Operations

A total of 7 Audit Committee meetings were held in 2021. Independent Director attendance was as follows:

Title	Name	Actual Attendance	Percentage of Actual Attendance
Convener of the Audit Committee	Yao-Ming Huang	7	100
Member of the Audit Committee	Hsu-Feng Ho	7	100
Member of the Audit Committee	Mao-Chun Wang	7	100

Other mentionable items:

I. With regard to the operation of the Audit Committee, if any of the following circumstances occurs, the dates, terms of the meetings, contents of motions, all Audit Committee resolutions, and the Company’s handling of such resolutions shall be specified.
(I) Matters listed in Article 14 (5) of the Securities and Exchange Act: refer to page 34-35
(II) Except as otherwise disclosed above, any other proposals which failed to obtain the approval of the Audit Committee, but were approved by two-thirds of the directors: None.
II. If there were independent directors who abstained from voting due to conflict of interest, the independent directors' names, contents of the proposal, and causes of abstention should be specified: For the proposals involving the interests of independent directors, the relevant independent directors adhered to a high degree of self-discipline and did not participate in the discussion and voting, nor did they participate in the voting on behalf of other independent directors.

II. If there were independent directors who abstained from voting due to conflict of interest, the independent directors' names, contents of the proposal, and causes of abstention should be specified: For the proposals involving the interests of independent directors, the relevant independent directors adhered to a high degree of self-discipline and did not participate in the discussion and voting, nor did they participate in the voting on behalf of other independent directors.	II. If there were independent directors who abstained from voting due to conflict of interest, the independent directors' names, contents of the proposal, and causes of abstention should be specified: For the proposals involving the interests of independent directors, the relevant independent directors adhered to a high degree of self-discipline and did not participate in the discussion and voting, nor did they participate in the voting on behalf of other independent directors.	II. If there were independent directors who abstained from voting due to conflict of interest, the independent directors' names, contents of the proposal, and causes of abstention should be specified: For the proposals involving the interests of independent directors, the relevant independent directors adhered to a high degree of self-discipline and did not participate in the discussion and voting, nor did they participate in the voting on behalf of other independent directors.
III. The communication between the independent directors and the manager of internal audit and the CPA (including the major matters, methods and results of communication on the company's financial and business conditions): (I) Communication between independent directors and the manager of internal audit: Date of the meeting Communication matters Results March 25, 2021 The manager of internal audit explains the internal audit to be carried out according to the audit plan from January to March 2021, and the audit items include 1. Stock Affairs 2. Derivative Commodity Operations 3. Lending Funds to Other Parties 4. Endorsement and Guarantee 5. Operations for Prevention of Insider Trading 6. Transfer of treasury shares to employees All independent directors are informed and have no comments. May 10, 2021 The manager of internal audit explains the internal audit to be carried out according to the audit plan for April 2021, and the audit items include 1. Stock Affairs 2. Derivative Commodity Operations 3. Lending Funds to Other Parties 4. Endorsement and Guarantee 5. Access Control Operation 6. Best Practice Operation 7. Data Input/Output Management 8. Consignment Processing All independent directors are informed and have no comments. September 28, 2021 I. The manager of internal audit explains the internal audit to be carried out according to the audit plan for August to September 2021, and the audit items include 1. Stock Affairs 2. Derivative Commodity Operations 3. Receiving Operation 4. Operation Management II. Explained 37 internal audit reports from January to September, 2021 All independent directors are informed and have no comments. November 11, 2021 I. The manager of internal audit explains the internal audit to be carried out according to the audit plan for September to October 2021, and the audit items include 1. Stock Affairs 2. Derivative Commodity Operations 3. Acquisition and Disposal of Assets 4. Review of Compliance with Laws and Regulations 5. Petty Cash Management 6. Repair and Maintenance Management 7. Endorsement and Guarantee 8. LendingFunds to Other Parties All independent directors are informed and have no comments.
Date of the meeting	Communication matters	Results
March 25, 2021	The manager of internal audit explains the internal audit to be carried out according to the audit plan from January to March 2021, and the audit items include 1. Stock Affairs 2. Derivative Commodity Operations 3. Lending Funds to Other Parties 4. Endorsement and Guarantee 5. Operations for Prevention of Insider Trading 6. Transfer of treasury shares to employees	All independent directors are informed and have no comments.
May 10, 2021	The manager of internal audit explains the internal audit to be carried out according to the audit plan for April 2021, and the audit items include 1. Stock Affairs 2. Derivative Commodity Operations 3. Lending Funds to Other Parties 4. Endorsement and Guarantee 5. Access Control Operation 6. Best Practice Operation 7. Data Input/Output Management 8. Consignment Processing	All independent directors are informed and have no comments.
September 28, 2021	I. The manager of internal audit explains the internal audit to be carried out according to the audit plan for August to September 2021, and the audit items include 1. Stock Affairs 2. Derivative Commodity Operations 3. Receiving Operation 4. Operation Management II. Explained 37 internal audit reports from January to September, 2021	All independent directors are informed and have no comments.
November 11, 2021	I. The manager of internal audit explains the internal audit to be carried out according to the audit plan for September to October 2021, and the audit items include 1. Stock Affairs 2. Derivative Commodity Operations 3. Acquisition and Disposal of Assets 4. Review of Compliance with Laws and Regulations 5. Petty Cash Management 6. Repair and Maintenance Management 7. Endorsement and Guarantee 8. LendingFunds to Other Parties	All independent directors are informed and have no comments.

	9.Logistics Operations II. Explained 48 internal audit reports from January to October, 2021
December 28, 2021	I. The manager of internal audit explains the internal audit to be carried out according to the audit plan for November to December 2021, and the audit items include 1. Stock Affairs 2. Derivative Commodity Operations 3. Acquisition and Disposal of Assets 4. Review of Compliance with Laws and Regulations 5. Petty Cash Management 6. Repair and Maintenance Management 7. Endorsement and Guarantee 8. Lending Funds to Other Parties 9. Logistics Operations II. Explained 59 internal audit reports from January to December, 2021	All independent directors are informed and have no comments.
(II) Communication between independent directors and CPAs:
March 25, 2021	1.Independence 2. Responsibility of auditors to audit financial statements 3. Audit Scope 4. Audit Findings 5. Matters of Concern from the Competent Authorities 6.Important Securities Act Updates	All independent directors are informed and have no comments.
November 11, 2021	Key Audit Matters 1. Preliminary identification of key audit matters for 2021 2. Update of major audit procedures and important laws and regulations in response to key audit matters: 1. Revised Q&A set of procedures of the Board of Directors 2. Amendment to the Standards for Corporate Governance Supervisors for TWSE/TPEx listed Companies 3. Added requirements for TWSE/TPEx listed Companies to declare their own financial information for the reporting year 4. Major Information Standards for TWSE/TPEx listed Companies and companies listed at emerging stock market 5. Notice of Amendment to the Manual of Proceedings of the General Meeting of Shareholders of the Public Offering Company (Draft) 6. Notice of Amendments to the Annual Report of the Public Offering Company (Draft)	All independent directors are informed and have no comments.

(II) Corporate Governance Implementation Status and Deviations from the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies and Reasons thereof

			Implementation Status	Deviations from the
				Cororate
				p Governance Best-
Evaluation Item				Practice Principles for
	Yes	No	Abstract Illustration	TWSE/TPEx Listed
				Companies and
				reasons thereof
I. Does the Company establish and disclose	V		In accordance with the Code of Practice on Corporate	In compliance with
the "Corporate Governance Best-Practice			Governance for Listed Companies, the Company adopted the	the Corporate
Principles" based on “Corporate			Code of Practice on Corporate Governance at the Board of	Governance Best
Governance Best-Practice Principles for			Directors on November 10, 2016, which has been disclosed to	Practice Principles for
TWSE/TPEx Listed Companies”?			the Market Observation Post System and the Company's	TWSE/TPEx Listed
			website for reference.	Companies

II. Shareholding structure & shareholders’	V			In compliance with
rights			The Company has a Spokesperson, an Acting Spokesperson and	the Corporate
(I) Does the Company establish an			a Stock Affairs Division to serve the Shareholders and to deal	Governance Best
internal operating procedure to deal			with matters such as shareholders' advice, doubts or disputes.	Practice Principles for
with shareholders’ suggestions,				TWSE/TPEx Listed
doubts, disputes and litigations, and				Companies
implement based on the procedure?

(II) Does the company possess the list of	V		The Company has stock affairs unit that is fully knowing the	In compliance with
its major shareholders as well as the			list of major shareholders who actually control the company and	the Corporate
ultimate owners of those shares?			the ultimate controllers of the major shareholders.	Governance Best
				Practice Principles for
				TWSE/TPEx Listed
				Companies

(III) Does the Company establish and	V		The Company defines the norms of the Code of Ethical Conduct	In compliance with
execute the risk management and			and the Guide to Business Procedures and Conduct for Best	the Corporate
firewall system within its			Practice and the execution of business among Affliates.	Governance Best
conglomerate structure?				Practice Principles
				for TWSE/TPEx
				Listed Companies
(IV) Does the Company establish internal	V		The Company has agreed on the "Measures for the	In compliance with
rules against insiders trading with			Administration of Preventive Insider Trading" and the	the Corporate
undisclosed information?			"Guidelines for the Operation Procedures and Conduct of Best	Governance Best
			Practice", which regulate that insider of the Company may not	Practice Principles
			use unpublished information on the market to buy and sell	for TWSE/TPEx
			marketable securities. The relevant measures have been	Listed Companies
			disclosed on the Company's website for reference.
III. Composition and Responsibilities of the
Board of Directors			In the Code of Best Practice on Corporate Governance, the	In compliance with
(I) Does the Board of Directors have a	V		Company has established a diversification policy for the	the Corporate
diversification policy, specific			composition of the Board of Directors. Through a rigorous	Governance Best
			selection and nomination process the Company has established
management objectives and			, 9 directors according to the scale of the Company's business	Practice Principles for
implementation plan?			development and the shareholding of its major shareholders,	TWSE/TPEx Listed
			taking into account the practical operational needs. Of the	Companies
			current 9 directors, about 33% are employees, about 33% are
			independent directors, and about 22% are female directors. Of
			these, 2 are independent directors who have been re-elected for
			a term of office of three years or more. Of the Number of
			directors of the Company, 5 directors are aged between 60 and
			79 years old, and the remaining 4 are aged under 60 years old.
			Please refer to Note 1 for the diversification policy of all Board
			members.

(II) Does the Company voluntarily		V	The Company has not set up any functional committees other	In compliance with
establish other functional committees			than the Remuneration Committee and the Audit Committee.	the Corporate
in addition to the Remuneration				Governance Best
Committee and the Audit				Practice Principles for
Committee?				TWSE/TPEx Listed
				Companies

			Implementation Status	Deviations from the
				Cororate
				p Governance Best-
Evaluation Item				Practice Principles for
	Yes	No	Abstract Illustration	TWSE/TPEx Listed
				Companies and
				reasons thereof
(III) Does the Company establish	V		The Company has agreed on the “Method for Performance	In compliance with
evaluation measures and methods,			Evaluation of the Board of Directors and the Functional	the Corporate
conduct performance evaluation			Committee”. At the end of each year, the members of the Board	Governance Best
regularly every year, and submit			of Directors shall assess their own performance and that of the	Practice Principles for
the result of performance			Board as a whole in the form of a questionnaire, which shall	TWSE/TPEx Listed
evaluation to the Board, and use it			serve as a reference for the selection or nomination of directors,	Companies
in individual director remuneration			and the results of the assessment and recommendations for
and nominating successors for			improvement are reported to the Board of Directors on March
reference?			7,2022.
(IV) Does the Company regularly	V		Once a year, the General Management Office of the Company	In compliance with
evaluate the independence of			self-assesses the independence of the certified public	the Corporate
CPAs?			accountants, and it is discussed by the Audit Committee and	Governance Best
			approved by the Board of Directors on March 7, 2022. The	Practice Principles for
			Company has appointed CPA Lo, Jui-Lan and CPA Samuel, Au	TWSE/TPEx Listed
			Yiu Kwan from KPMG Taiwan, who satisfy the Company's	Companies
			independence assessment criteria (Note 2) and are sufficient to
			act as the Company's certified public accountants and CPA firm
			with a letter of representation (Note 3).

IV. Does the TWSE/TPEx Listed	V		The Company has a Secretariat of Border to be in charge of	In compliance with
Companies assign appropriate number			matters related to corporate governance. Its responsibility	the Corporate
of administrators and designate			includes providing information necessary for the directors to	Governance Best
corporate governance director to take			carry out their business, handling matters related to the	Practice Principles for
charge of corporate governance affairs			meetings of the Board of Directors and the Shareholders'	TWSE/TPEx Listed
(including but not limited to providing			Meeting in accordance with the law, handling the registration	Companies
data required by directors, supervisors			of the company and the registration of changes, and preparing
implementing business, assistance of			the minutes of the meetings of the Board of Directors and the
directors, supervisors in complying			Shareholders' Meeting, etc.
with laws, handling relevant matters of
the board meeting and shareholders'
meeting, and preparing minutes of
Board of Directors and shareholders'
meeting)?

V. Does the Company establish a	V		The Company agreed the Code of Best Practice on Corporate	In compliance with
communication channel and build a			Social Responsibility to implement the social responsibility.	the Corporate
designated section on its website for			The Company would strengthen communication with	Governance Best
stakeholders (including but not limited			stakeholders, and make information open and transparent in	Practice Principles for

to shareholders, employees, customers,			order to safeguard the interests of stakeholders. A stakeholder	TWSE/TPEx Listed

and suppliers), as well as handle all the			section is set in the Company's website.	Companies
issues they care for in terms of
corporate social responsibilities?
VI. Does the Company appoint a		V	The Company has a stock affairs unit and will run the	In compliance with
professional shareholder service			shareholders' meeting by the Company itself.	the Corporate
agency to deal with shareholder				Governance Best

affairs?				Practice Principles for

				TWSE/TPEx Listed
				Companies
VII. Information Disclosure				In compliance with
(I) Does the Company have a corporate	V		The Shareholder Services Section discloses information	the Corporate
website to disclose both financial			relating to the financial affairs and corporate governance of	Governance Best

standings and the status of corporate			the Company. Company website www.slc.com.tw.	Practice Principles for
governance?				TWSE/TPEx Listed
				Companies

			Implementation Status	Deviations from the
				Cororate
				p Governance Best-
Evaluation Item				Practice Principles for
	Yes	No	Abstract Illustration	TWSE/TPEx Listed
				Companies and
				reasons thereof
(II) Does the Company have other	V		1. The Company has designated a staff to be responsible for	In compliance with
information disclosure channels (e.g.			disclosing material information of the Company to the	the Corporate
building an English website,			Exchange's website.	Governance Best
appointing designated people to			2. The Company has a Spokesperson and an Acting	Practice Principles for
handle information collection and			Spokesperson for the Shareholders or Stakeholders at any	TWSE/TPEx Listed
disclosure, creating a spokesman			time.	Companies
system, webcasting investor			3. On August 20, 2021, the Company held a corporate briefing
conferences)?			through telephone conference, and the presentation and
			audio-visual files were placed on the Company's website.

(III) Does the Company publicize and		V	The Company publicizes and declares the annual financial	In compliance with
declare the annual financial report			report within two months upon the end of the fiscal year, and	the Corporate
within two months upon the end of			Q1, Q2 and Q3 Financial Report and operation status of each	Governance Best
the fiscal year, and Q1, Q2 and Q3			month prior to the scheduled period.	Practice Principles for
Financial Report and operation status				TWSE/TPEx Listed
of each month prior to the scheduled				Companies
period?

VIII. Is there any other important	1. Employee rights and interests: The Company intends to	In compliance with
information to facilitate a better	put people first, regarding employees as important assets	the Corporate
understanding of the Company’s	of the Company, and establishes and implements a	Governance Best
corporate governance practices (e.g.,	complete system approach for employee working	Practice Principles for
including but not limited to employee	environment, family care, education and training, etc., so	TWSE/TPEx Listed
rights, employee wellness, investor	that employees can work under safe and secure	Companies
relations, supplier relations, rights of	prerequisites. There are employee appeal channels on the
stakeholders, Directors’ and	intranet.
Supervisors’ training records, the	2. Employee Care: The Company has established the
implementation of risk management	Employee Benefits Committee to provide various benefits
policies and risk evaluation measures,	and subsidies, paying attention to the safety and health of
the implementation of customer	employees.
relations policies, and purchasing	3. Investor Relations: The Company operates in a decent
insurance for directors and	manner in the spirit of excellence, technology, integrity
Supervisors)?	and quality. It established Investors' Sections on the
	Company's website, providing sufficient information for
	investors to refer to, and has a communication platform for
	investors to contact the Company. The Company discloses
	the Company's financial and business-related information
	at the MOPS in a correct and timely manner.
	4. Supplier Relationships: The Company has a Purchasing
	Department, which is dedicated to managing supplier-
	related affairs and creating a win-win relationship based on
	the principle of reciprocity. In addition to a toll-free
	service line, there is a stakeholder section on the
	company's website.
	5. Rights of Stakeholders: The Company has a spokesperson
	and an acting spokesperson for the Company's external
	communication channels. Stakeholders may communicate
	and advise with the Company to safeguard their legitimate
	rights and interests, as well as a platform on the
	Company's website for stakeholders to contact the
	Company.
	6. Advanced training of directors:
	The Directors and Independent Directors of the Company
	have professional background and operational and
	management experience.
	7. Implementation of risk management policies and risk
	measurement standards: The Company determines various
	internal control systems and related measures, and various
	specialists carry out various risk management and
	assessment. There is an Audit Office to supervise the
	company and report the relevant information directly to the
	Audit Committee.
	8. Implementation of the Customer Policy: The Company
	implements the Customer Policy in accordance with the
	Code of Best Practice on Corporate Social Responsibility.
	The Company has a Business Department that manages
	customer-related business and maintains stable and good
	relationships with customers to generate company profits.
	9. Buying liability insurances for directors:
	The Company has purchased liability insurance for the
	directors on May 1, 2021.
	10. In order to strengthen corporate governance, the Board
	of Directors of the Company shall be convened at least
	once a quarter, and the directors shall avoid participating
	in the voting on the interested parties' proposals in
	accordance with the law.

Evaluation Item			Implementation Status	Deviations from the
				Cororate
				p Governance Best-
				Practice Principles for
	Yes	No	Abstract Illustration	TWSE/TPEx Listed
				Companies and
				reasons thereof
IX. Please describe the improved situation regarding the results of the recent corporate governance appraisal issued by the Taiwan Stock
Exchange Co., Ltd. Corporate Governance Center, and propose the priority enhancements and measures for those which have not yet
improved:
(I) For the results of the 7th Corporate Governance Appraisal issued in 2021, the Company's improvement is as follows:
1. The Company has uploaded the English version of the notice of meeting and the minutes handbook 30 days prior the opening of the
Annual Shareholders' Meeting for year 2021.
2. The amount and nature of non-audited fees paid to the Affiliates of CPAs and their firm are disclosed in the Company's annual
report.
3. The Company has set up an English website with financial, business and corporate governance information.
(II) Priorities and measures proposed regarding those not having improved:
1. The Company will report on the operation of its risk management policies and procedures at the meeting of the Board of Directors
in 2022.
2. The Company will begin to publish key messages in English simultaneously in 2022.
3. The Company will upload the English version of its annual financial report 7 days prior to the opening of the Annual Shareholders'
Meeting for 2022.
4. The Company will disclose the interim financial report in English within two months after the deadline for filing the Chinese version
of the financial report in 2022.

Note 1: Diversity and independence of directors

Disclosure of the professional qualifications of directors and supervisors and the information on independence of independent directors:

(1) Diversity of the Board of Directors: The Company has established a diversification policy for the composition of the Board of Directors in the "Code of Practice on Corporate Governance", and through a rigorous selection and nomination process, we have taken into account the practical operational needs of the Company in terms of the size of its business development and the shareholding of its major shareholders.

Implementation of the Company's directors' diversity policy:

Title	Name	Nationality	Gender	Age	Age	Length of service of independent directors	Length of service of independent directors	Operational judgment capability	Accounting and financial analysis capabilities	Business management capability	Crisis management capability	Industrial Knowledge	Global market viewpoint	Leadership skills	Decision- making capability
				49 or less	50 or more	Within 3 years	4 to 6 years
Chairman	Jen-Hao Cheng	Republic of China	Male	V				V	V	V	V	V	V	V	V
Vice Chairman	Lan-Hui Yu	Republic of China	Male		V			V	V	V	V	V	V	V	V
Director	Cheng Loong Corporation Representative: Su-YunCheng	Republic of China	Female	V				V	V	V	V	V	V	V	V
Director	Shine Far Construction Co., Ltd. Representative: Chuan-Chuan Lu	Republic of China	Female		V			V	V	V	V	V	V	V	V
Director	Shine Far Co., Ltd. Representative: Ken-PeiCheng	Republic of China	Male		V			V	V	V	V	V	V	V	V
Director	Yen-Ming Chen	Republic of China	Male	V				V	V	V	V	V	V	V	V
Independent Director	Yao-Ming Huang	Republic of China	Male		V		V	V	V	V	V	V	V	V	V
Independent Director	Hsu-Feng Ho	Republic of China	Male		V	V		V	V	V	V	V	V	V	V
Independent Director	Mao-Chun Wang	Republic of China	Male		V		V	V	V	V	V	V	V	V	V

(II) Board Independence: 3 of the current 9 directors are independent directors, accounting for about 33%.

The Board of Directors of the Company guides the company's strategy, supervisory management and accountability to the Company and its shareholders. In all operations and arrangements of the corporate governance system, the Board of Directors exercises its functions and powers in accordance with laws and regulations, the Articles of Association or the resolutions of the Shareholders' Meeting, etc. The Board of Directors of the Company emphasizes the function of independent operation and transparency, and the directors and independent directors are independent individuals and exercise their powers independently. The three independent directors have also complied with the relevant statutory provisions, combined with the powers of the Audit Committee to review the management and control of the Company's existence or potential risks, etc., to ensure the supervision of the effective implementation of the Company's internal controls, the selection (dismissal) of visa accountants, and the preparation of independence and financial statements. In addition, in accordance with the "Directors' Election Method" of the Company, the cumulative voting system and the candidate nomination system for the election of directors and independent directors shall be adopted to encourage the participation of shareholders. Shareholders holding a certain number of shares or more shall submit a list of candidates. The qualification conditions for such candidates and the confirmation of whether or not there is any violation of the provisions of Article 30 of the Company Act shall be reviewed and announced in accordance with the law to protect the rights and interests of shareholders, so as to avoid the nomination rights being cut off or too flooded and to maintain independence.

The Company has established a performance evaluation system for the Board of Directors, which performs an internal self-assessment of the Board of Directors and an assessment of the self-assessment of the members of the Board of Directors once a year. The performance assessment of the Board of Directors includes five major aspects: (1) participation in the operation of the Company, (2) quality of decisions made by the Board of Directors, (3) composition and structure of the Board of Directors, (4) selection and continuing improvement of directors, and (5) internal control. The self-assessment of the members of the Board of Directors includes six major aspects: (1) mastery of the objectives and tasks of the Company, (2) recognition of directors' duties, (3) participation in the operation of the Company, (4) operation and communication of internal relations, (5) professionalism and continuous improvement of directors, and (6) internal control. The above relevant assessment results are disclosed in the annual report of the Company and on the official website after being reported to the Board of Directors.

Note 2: Evaluation Form for Accountants Independence

Note 2: Evaluation Form for Accountants Independence
Evaluation Item	Rating
(I) Self-interest (Note: refers to financial interests obtained through audit clients or conflicts of interest with audit clients due to other interests)
1. Any direct or significant indirect financial interest between the members of the CPAs and Audit Services Team and the Company	None
2. There are financing or assurance actions between the members of the team of accountants and audit services and the Company or its directors	None
3. Any close business relationship between the members of the CPAs and Audit Services Team and the Company	None
4. Any a potential employment relationship between the members of the CPAs and Audit Services team and the Company	None
(II) Self-assessment (Note: refers to the report or judgment issued by a CPA in the execution of a non-audit service, as an important basis for the conclusion of the audit in the process of auditing or reviewing financial information; or a member of the audit service team has served as a director or supervisor of an audit client, or has served in a position that directly and materially affects the audit
1. Members of the team of accountants and audit services currently or in the last two years have served as directors, managers or positions that have had a significant impact on audit cases of the Company	None
2. Any provision of non-audit services by CPAs directly affects the important items of the audit	None
(III) Defense (Note: refers to a member of the Audit Services Team who is a defender of the audit client's position or opinion, resulting in questioning of their objectivity)
1. Any members of the CPAs and Audit Services Team advertised or brokered any shares or other securities issued by the Company	None
2. Any member of the CPAs or Audit Service Team act as the defender of the Company or coordinates conflicts with other third parties on behalf of the Company	None
(IV) Familiarity (Note: refers to the close relationship between audit clients, directors, supervisors and managers, which causes the CPAs or Audit Services Team to focus excessively on the interests of the same-gender audit clients)
1. The members of the team of accountants and audit services have a kinship relationship with the directors, managers or other persons whose duties have a significant impact on the audit cases of the Company	None
2. Co-practicing accountants within one year of their retirement to serve as directors, managers or positions that have a significant impact on the Company or its audit cases	None
3. Accountants and audit services team members receive gifts or gifts of significant value from the Company or its directors or managers	None
(V) Threats (Note: refers to members of the Audit Service Team to suffer or feel threatened by the Company and cause the members to be unable to maintain objectivity and clarify professional doubts.
1. Disclosure of the Company's requirement on the members of the Accountants and Audit Services Team to accept inappropriate selection of accounting policies by management or inappropriate on the financial statements	None
2. In order to reduce expenses, does the Company exert pressure on the CPAs or Audit Service Team, which improperlyreduces the audit work	None

Note 3: Statement issued by KPMG Taiwan

To: Shan-Loong Transportation Co., Ltd

Subject: It is to state that the Certified Public Accountants have been entrusted to audit and certify the financial statements for 2022 of your Company, and it has met the relevant independence requirements of the code of professional ethics.
Note: The firm's independence standards include policies and procedures for the personal independence of all members (financial interests, financing guarantees, employment, etc.), business relationships with customers, CPAs' rotation, and non-audit services. The important specifications and compliance matters are stated as follows:
I. Important specifications for Independence Requirements
- (I) It requires the firm, its employees and other persons subject to independence requirements (including affiliates) to maintain their independence in accordance with the Code of Professional Ethics.
- (II) The firm prohibits its employees from engaging in (directly or indirectly) insider trading, misusing inside information, or any actions that could mislead the stock or capital markets. In addition, the firm should obtain written confirmation of compliance with its policies and procedures on independence from all firm's personnel every year.
- (III) In the cases of auditing financial statements of listed companies at stock exchange market, over-the-counter market and emerging stock market, when the undertaking period of the leading CPA, certified CPA, quality control & review accountant and audit CPA of subsidiaries meeting certain conditions has reached the deadline specified in the Code of Professional Ethics of accountants or the laws and regulations, rotations are required.
- (IV) For the identification and evaluation of services provided that may affect the independence, appropriate measures shall be taken to eliminate the impact or reduce it to an acceptable level. If necessary, the engagement of the cases shall be terminated.
II. Supervision of compliance with the independence policy
- (I) All auditors are required to sign a declaration of independence in all cases in which they are assigned to and to request confirmation of compliance through an online declaration of independence.
- (II) Compliance of individual members with independence shall be checked by means of regular random inspection, and check whether personnel at or above the level of deputy manager (including) report personal investment changes in accordance with the regulations through the personal investment declaration system.
- (III) The rotation of the certified public accountant in the case and the appropriateness of providing non audit services shall be supervised and randomly checked, including the certified period of the CPA and the prior approval of non-audit services provided.
- (IV) In case of violation of the Independence Policy, the members (including partners) who violate the policy will be handed over to the Risk and Independence Committee for handling in accordance with the independence discipline policy. Appropriate penalties will be imposed depending on the seriousness of the violation.

In summary, the certified public accountant has been entrusted to perform the audit of the financial statements of the Company for 2022 and has maintained a serious and impartial attitude and a spirit of independence without violation of the provisions of No. 10 Bulletin of Professional Ethics.

KPMG Taiwan Lo, Jui-Lan Certified Public Accountant: Au, Yiu-Kwan

January 28, 2022

(III) Profile of members of Remuneration Committee and its operation

1. Professional Qualifications and Independence Analysis of Remuneration Committee Members

		Professional Qualification and Work Experience	Independence criteria	Number of Other Public Companies in Which the Individual is Concurrently Serving as a Remuneration Committee Member
Criteria
Identity
(Note 1). Name

Independent		Retired certified public account, KPMG	Note	1
	Yao-Ming
Director
	Huang
(Convenor)

Independent Director	Hsu-Feng Ho	Vice President, Cheng Loong	Note	None
Independent Director	Mao-Chun Wang	Remuneration Committee, Shan-Loong	Note	None

Note: Disclosure of the professional qualifications of directors and supervisors and the information on independence of Independent Directors, please refer to Page 11.
Attendance of Members at Remuneration Committee Meetings
(1) There are 3 members in the Remuneration Committee.
(2) Term of office of the members of the Fourth Remuneration Committee: From May 29, 2020 to May 28, 2023. Three Meetings of the Fourth Remuneration Committee of the Company were held.
(3) The qualifications and attendance of members are as follows:

Title	Name	Actual Attendance	Attendance by proxy	Percentage of Actual Attendance
Convener	Yao-Ming Huang	3	0	100
Committee Member	Hsu-Feng Ho	3	0	100
Committee Member	Mao-Chun Wang	3	0	100
Other mentionable items: I. If the board meeting does not adopt or revise the Remuneration Committee's proposals, the board meeting's date, period, motion contents, and resolution decisions as well as the method in which the Company handles the Remuneration Committee's opinions shall be disclosed in detail (e.g. if the salary rate adopted by the board committee is superior to that proposed by the Remuneration Committee, the differences and reasons shall be explained): None. II. Where resolutions of the Remuneration Committee include dissenting or qualified opinion which is on record or stated in a written statement, the date, session, proposal contents, opinions from every member, and actions in response to the opinions of the members shall be stated: None.

(IV) Implementation of the Code of Best Practice for the Promotion of Sustainable Development and the Circumstances and Reasons for Differences from the Code of Practice for the Sustainable Development of Listed Companies

Listed Companies
Promoted Items	Implementation			Deviations from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof
	Yes	No	Abstract Illustration
I. Has the company established a governance structure that promotes sustainable development, and set up a dedicated (part- time) dedicated unit to promote the sustainable development, and the Board of Directors authorized the senior management to handle the situation, and the Board of Directors supervised the promotion status?	V		"Sustainable Development Project Team" of the Company is composed of members of the relevant units of the General Management Office and is responsible for promoting and handling various sustainable development work, and reporting on the status of the work at the business executive meetings on a regular basis.	No material difference
II. Does the Company conduct risk assessment of environmental, social and corporate governance issues related to the Company's operations in accordance with the materiality principle, and formulate relevant risk management policies or strategies?	V		In accordance with the "Code of Best Practice on Corporate Social Responsibility", the Company adheres to the dedication and efforts on corporate social responsibility, and takes the four orientations of "responsible to shareholders, attention to employees, strive to be environmentally friendly, and care to the community" as its basic policy. 1. Responsible to shareholders: it is to implement a good corporate governance system to create best operating profit. 2. Attention to employees: it is to protect employees' rights and interests and improve the working environment, with emphasis on talent and employee development. 3. Strive to be environmentally friendly: it is to combine business and environmental practices to improve energy efficiency and reduce impact on the environment. 4. Care to the Community: it is to participate in various social welfare activities and be responsible for the operation of the service.	No material difference
III. Environmental Issues (I) Does the company establish proper environmental management systems based on the characteristics of their industries?	V		The environmental policy of the Company is "All Employees Participation, Valuing Resources, and Protecting the Environment", and "Environmental Protection Management Rules" are stipulated to implement the environmental protection. In addition, the Company has passed ISO 14001 Environmental Management System Certification and will regularly collect information on the company's operating environment, establish environmental management objectives, and regularly review the effectiveness and implementation improvement.	No material difference
(II) Has the company committed to improve the energy efficiency and use the renewable materials with low impact on the environment?	V		The Company's various resource utilization efficiency improvement practices are as follows: 1. Resource recycling areas are set up at each operating location. 2. Full replacement of LED lighting equipment at General Management Office, gas stations, etc. 3. Qualified remanufactured tires are used on some operational vehicles. 4. Qualified professional processing facilities are engaged to recycle or remove business waste.	No material difference

Promoted Items	Implementation	Implementation	Implementation	Deviations from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof
	Yes	No	Abstract Illustration
(III) Does the Company evaluate the potential risks and chances of climate change at present and in the future and take response measures?	V		The Company's actions related to energy conservation, carbon reduction and water resource protection are as follows: 1. More environmentally friendly and fuel- efficient models are purchased to replace old business tractor vehicles regularly, so as to reduce waste gas emissions and fuel consumption. 2. Electronic invoicing is used at gas stations to reduce paper usage and storage costs. 3. New vehicle washing machines that reduces the water consumption will be installed in the gas stations. 4. Accessible toilets that have been renovated in accordance with the law by gas stations shall be equipped with water-saving faucets and urinal buckets. 5. Replacement of LED lighting at each gas stations to reduce power consumption. 6. Virtual meetings will be held in various locations to cut business trips and reduce exhaust emissions and oil consumption.	No material difference
(IV) Has the Company calculated the greenhouse gas emissions, water consumption, and total weight of waste over the past two years and established the policies with regard to energy conservation and carbon reduction, greenhouse gas reductions, water consumption, and waste management?	V		Although the Company does not have statistics on the total weight of greenhouse gas emissions, water consumption, and total weight of waste over the past two years, the following is an explanation of the related actions for energy conservation, carbon reduction and water resource conservation: 1. More environmentally friendly and fuel- efficient models are purchased to replace old business tractor vehicles regularly, so as to reduce waste gas emissions and fuel consumption. 2. Electronic invoicing is used at gas stations to reduce paper usage and storage costs. 3. New vehicle washing machines that reduces the water consumption will be installed in the gas stations. 4. Accessible toilets that have been renovated in accordance with the law by gas stations shall be equipped with water-saving faucets and urinal buckets. 5. Replacement of LED lighting at each gas stations to reduce power consumption. 6. Virtual meetings will be held in various locations to cut business trips and reduce exhaust emissions and oil consumption. 7. Turn off the lights and computers during noon breaks or when leaving the office is advocated.	No material difference
IV. Social Issues (I) Does the Company formulate appropriate management policies and procedures according to relevant regulations and the International Bill of Human Rights? (II) Has the Company established and offered proper employee benefits (including compensation, leave, and other benefits) and reflected the business performance or results in employee compensation appropriately?	V V		The Company strictly complies with the labor laws and regulations and has full personnel management rules, which have been announced in public to protect the legitimate rights and interests of employees. The Company determines the salary, bonus and performance bonus methods, and the compensation of each salary shall be handled in accordance with the relevant personnel management rules.	No material difference No material difference

Promoted Items	Implementation	Implementation	Implementation	Deviations from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof
	Yes	No	Abstract Illustration
(III) Does the Company provide a healthy and safe working environment and organize training on health and safety for its employees on a regular basis?	V		The Company regularly offers medical examination to employees throughout the Company every year, which is superior to the laws and regulations, and regularly inspects each workplace to maintain a good and safe working environment. In addition, regular safety education and training for new and ongoing employee will be proceeded in accordance with the laws.	No material difference
(IV) Does the company provide its employees with career development and training sessions? (V) Does the company comply with relevant laws, regulations and international standards, and formulate relevant consumer or customer rights protection policies and appeal procedures for issues such as customer health and safety, customer privacy, marketing and labeling of products and services? (VI) Has the Company established the supplier management policies requesting suppliers to comply with laws and regulations related to environmental protection, occupational safety and health or labor rights and supervised their compliance?	V V V		The Company has a dedicated vocational training unit, which defines the employee career development training sessions according to the relevant indicators of the "Training Quality System TTQS". Hazard labels for transport vehicles carrying chemical substances, as well as relevant safety labels for gas stations, are posted and set in accordance with the relevant laws and international standards. The Company has purchasing management procedures and supplier management procedures, and the newly cooperating suppliers will be evaluated first to confirm whether they meet the Company's needs and whether there are any bad records. The Company has signed contracts with suppliers and contractors for long-term cooperation, and has provisions that may terminate or cancel the contract at any time in case of violation of relevant laws and regulations that affects the rights and interests of the Company or laws and regulations.	No material difference No material difference No material difference
V. Does the Company adopt internationally widely recognized standards or guidelines when producing corporate social responsibility report and other reports that disclose non-financial information of the Company? Has the Company received assurance or certification of the aforesaid reports from a third-party accreditation institution?		V	The Company has not yet adopted internationally recognized standards or guidelines when producing corporate social responsibility report and other reports that disclose non-financial information of the Company.	To be evaluated
VI. If a company has its own rules for the sustainable development in accordance with the Code of Practice for the Sustainable Development of Listed Counter Companies, please clarify the difference between its operation and the rules: None.

Promoted Items	Implementation	Implementation	Implementation	Deviations from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and Reasons Thereof
	Yes	No	Abstract Illustration
VII. Other important information assists to understand what drives sustainable development execution: 1. In order to enhance the company's image, comply with international trends and improve the effectiveness of self-safety control, the Company introduced the relevant control measures of the "Quality Enterprise Safety Certification (AEO)", and obtained the approval of the Ministry of Finance Keelung Pass in June 2016, as well as the AEO certificate. 2. In order to improve the safety mechanism for the transportation of chemical products, the Company passed the "European Road Transport Quality Safety Assessment System" (RSQAS) in June 2016, effectively improving the Company's transportation management system. 3. For transportation drivers, the Company requires that preventive measures such as alcohol testing and blood pressure measurement be carried out before driving the vehicle, and that GPS, vehicle image recorders and other equipment be used to understand the driving dynamics of vehicles, and strengthen control over personnel and vehicles to reduce the occurrence of traffic accidents. 4. In order to undertake the transportation business of Formosa Plastics Group, the Company strengthened its ability in corporate governance, driver training and vehicle maintenance through the assessment of the "Road Transport Quality and Safety Assessment System" (SQAS) of the Group to achieve the purpose of win-win in both transportation services and transportation safety. 5. The Company cooperates with the Environmental Protection Bureau in the control of diesel vehicle smoke exhaust. Transportation plants in each district signs the vehicle independent management report with the local environmental protection bureau, and regularly detects the smoke exhaust of its business vehicles in accordance with the regulations, which is beneficial to others, self-interest and environmental protection. 6. The Company has set up a driving safety bonus system for its transportation drivers, and provided incentives for driving within a certain period of time without traffic violations and accidents, so as to shape good driving habits. 7. The Company uses the driver management system supervised by the Ministry of Transportation to periodically check the driver violation of its own drivers on a monthly basis, and strengthen the follow-up education and control of drivers with abnormalities. 8. For the gas recovery equipment of the gas stations, the gas recovery rate shall be tested every three months, which is prevail over the statutory provisions. The employees are trained to refuel in accordance with the provisions of the Five Don'ts & Five Does. The Company is awarded the Outstanding Unit of the Air Pollution Detection of the Environmental Protection Agency. 9. The Company introduced the ISO 9001 Quality Management System, the ISO 14001 Environmental Management System, and the ISO 45001 Safety and Health Management System. Every year, the Company conducts an external audit by the British Standards Institute (BSI) to ensure that the quality and safety objectives are achieved, and continuously strives to protect the environment, improve personnel, equipment and the potential risks of the environment, and promote the competitive advantage based on corporate social responsibility. 10. The Company has set up the Security Department under the General Operation Office to implement a Company-wide safety and health policy of "All Employees Participation, Safety First, Disaster Zeroing" and the environmental policy of "All Employees Participation, Valuing Resources, Protecting the Environment", to ensure the personal safety of employees, improve the awareness and performance of employees, so as to achieve the goal of sustainable operation of the Company. 11. Together with Cheng Loong Co., Ltd and Ta-yuan Cogeneration, the Company established the 21st "Paper Library" in primary schools in remote rural areas in Taiwan, to seed the awareness of sustainous-recycle, and continue to promote actions such as Used-forest and Paper-reading Friendly Community.

In order to enhance the company's image, comply with international trends and improve the effectiveness of self-safety control, the Company introduced the relevant control measures of the "Quality Enterprise Safety Certification (AEO)", and obtained the approval of the Ministry of Finance Keelung Pass in June 2016, as well as the AEO certificate.
In order to improve the safety mechanism for the transportation of chemical products, the Company passed the "European Road Transport Quality Safety Assessment System" (RSQAS) in June 2016, effectively improving the Company's transportation management system.
For transportation drivers, the Company requires that preventive measures such as alcohol testing and blood pressure measurement be carried out before driving the vehicle, and that GPS, vehicle image recorders and other equipment be used to understand the driving dynamics of vehicles, and strengthen control over personnel and vehicles to reduce the occurrence of traffic accidents.
In order to undertake the transportation business of Formosa Plastics Group, the Company strengthened its ability in corporate governance, driver training and vehicle maintenance through the assessment of the "Road Transport Quality and Safety Assessment System" (SQAS) of the Group to achieve the purpose of win-win in both transportation services and transportation safety.
The Company cooperates with the Environmental Protection Bureau in the control of diesel vehicle smoke exhaust. Transportation plants in each district signs the vehicle independent management report with the local environmental protection bureau, and regularly detects the smoke exhaust of its business vehicles in accordance with the regulations, which is beneficial to others, self-interest and environmental protection.
The Company has set up a driving safety bonus system for its transportation drivers, and provided incentives for driving within a certain period of time without traffic violations and accidents, so as to shape good driving habits.
The Company uses the driver management system supervised by the Ministry of Transportation to periodically check the driver violation of its own drivers on a monthly basis, and strengthen the follow-up education and control of drivers with abnormalities.
For the gas recovery equipment of the gas stations, the gas recovery rate shall be tested every three months, which is prevail over the statutory provisions. The employees are trained to refuel in accordance with the provisions of the Five Don'ts & Five Does. The Company is awarded the Outstanding Unit of the Air Pollution Detection of the Environmental Protection Agency.
The Company introduced the ISO 9001 Quality Management System, the ISO 14001 Environmental Management System, and the ISO 45001 Safety and Health Management System. Every year, the Company conducts an external audit by the British Standards Institute (BSI) to ensure that the quality and safety objectives are achieved, and continuously strives to protect the environment, improve personnel, equipment and the potential risks of the environment, and promote the competitive advantage based on corporate social responsibility.
The Company has set up the Security Department under the General Operation Office to implement a Company-wide safety and health policy of "All Employees Participation, Safety First, Disaster Zeroing" and the environmental policy of "All Employees Participation, Valuing Resources, Protecting the Environment", to ensure the personal safety of employees, improve the awareness and performance of employees, so as to achieve the goal of sustainable operation of the Company.
Together with Cheng Loong Co., Ltd and Ta-yuan Cogeneration, the Company established the 21st "Paper Library" in primary schools in remote rural areas in Taiwan, to seed the awareness of sustainous-recycle, and continue to promote actions such as Used-forest and -

Paper reading Friendly Community.

(V) Ethical Corporate Management and Deviations from “The Ethical Corporate Management Best-Practice Principles for TWSE/TPEx Listed “Companies” and Reasons

Evaluation Item			Implementation Status	Deviations from “the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
I. Establishment of ethical corporate management policies and programs (I) Has the Company established the integrity management policies approved by the Board of Directors and specified in its rules and external documents the ethical corporate management policies and practices and the commitment of the board of directors and senior management to rigorous and thorough implementation of such policies? (II) Has the Company established a risk assessment mechanism against unethical conduct, analyze and assess on a regular basis business activity within its business scope which are at a higher risk of being involved in unethical conduct, and establish prevention programs accordingly, which shall at least include the preventive measures specified in Paragraph 2, Article 7 of the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"? (III) Has the Company specified in its prevention programs the operating procedures, guidelines, punishments for violations, and a grievance system and implemented them and review the prevention programs on a regular basis?	V V V		The Company has established the "Procedure and Conduct Guidelines for Best Practice" and disclosed it on the Company's website to honor its commitment to the Best Practice Policy. The Company has established the Procedure and Conduct Guidelines for Best Practice and the Code of Ethical Conduct, and has established relevant programmers for the prevention of bad practice, covering at least the precautionary measures for each of the paragraphs of Article 7 (2) of the Code of Business Conduct for TWSE and TPEx Listed companies. The Company has clearly stipulated the relevant operational procedures, appeal system and other relevant provisions in the "Procedure and Conduct Guidelines for Best Practice" and the "Code of Ethical Conduct" regulations, and has disclosed them on the Company's website. The Company will review and revise the pre-revelation regulations in due time, depending on the revision of the positive and negative decrees and the practical needs, so as to implement the prevention of dishonest behavior.	No significant differences yet No significant differences yet No significant differences yet
II. Fulfillment of Integrity Management (I) Does the Company evaluate business partners’ ethical records and include ethics- related clauses in business contracts? (II) Does the Company establish an exclusively (or concurrently) dedicated unit supervised by the Board to be in charge of corporate integrity and regularly report the implementation of the ethical corporate management policies and prevention programs against unethical conduct to it? (III) Does the Company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement it? (IV) Has the Company established effective systems for both accounting and internal control to facilitate ethical corporate management, based on the results of assessment of the risk of involvement in unethical conduct, devise relevant audit plans and audit the compliance with the prevention programs accordingly or entrusted a CPA to conduct the audit? (V) Does the Company regularly hold internal and external educational trainings on operational integrity?	V V V V V		The Company evaluates the recipient's record of good practice in accordance with Procedure and Conduct Guidelines for Best Practice and include it in the contract the terms on which good practice should be conducted. The Company's Audit Office is a dedicated unit for the Company's best practice and reports regularly to the Board of Directors. The Company clarifies and implements the norms in accordance with the Code of Ethical Conduct. In order to conduct the business in a best practice manner, the Company has effectively established an accounting system and an internal control system, which are implemented by the Audit Office as the authorized unit. The Company regularly conducts internal education and training to fully understand the Company's determination to best practice and the consequences of bad practice.	No significant differences yet

Evaluation Item	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Ethical Corporate Management Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
	Yes	No	Abstract Illustration
III. Operation of the integrity channel (I) Has the company established a concrete whistleblowing and rewarding system, and set up accessible methods for whistleblowers, and designate appropriate and dedicated personnel to investigate the accused? (II) Has the Company established the standard operating procedures for investigating reported misconduct, follow-up measures to be adopted after the investigation, and related confidentiality mechanisms? (III) Does the Company provide proper whistleblower protection?	V V V		The Company has a 0800 complain line and a mailbox for complain on the website, and has a dedicated unit to handle relevant business. If there is a violation of the best practice principles and proves to be true, the violation party will be punished immediately in accordance with the working rules. Relevant operating procedures are not established, but there is a dedicated unit to handle them. Relevant operating procedures are not established, but there is a dedicated unit to handle them.	No significant differences yet
IV. Strengthening information disclosure Does the company disclose the ethical corporate management policies and the results of its implementation on the Company website and MOPS?	V		The Company has established Procedure and Conduct Guidelines for Best Practice and the Code of Ethical Conduct, which are disclosed on MOPS and the Company's website.	No significant differences yet
V. Where the Company has stipulated its own ethical corporate management best practices according to the Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies, please describe any differences between the prescribed best practices and the actual activities taken by the Company: None.
VI. Other important information that facilitates the understanding of the implementation of the Company's best practice (such as review and amendment of the company's Ethical Corporate Management Best Practice Principles) None.

(VI) Regulations of Governance and Their Disclosure:

The relevant rules of corporate governance established by the Company have been placed on the website of the Company: under the "Investor" - important internal regulations of corporate governance, for shareholders' inquiries, please refer to the website

https://w3.slc.com.tw/investor/download/investorCompRule.

(VII) Other material information that can enhance the understanding of the state of corporate governance at the Company:

Material information from the Company has all been announced on the MOPS pursuant to regulations from the competent authority.

(VIII) Implementation of Internal Control

1. Internal Control System Statement

	Shan-Loong Transportation Co., Ltd.
	Internal Control System Statement
	Date: March 7, 2022
According to the examination on internal control system done by the Company itself in 2021, we hereby state as follows:
I.	The Company is fully aware that establishing, operating, and maintaining an internal control system are the responsibility of its
	Board of Directors and management. The purpose of establishing the internal control system is to reasonably assure the
	following objectives: (a) The effectiveness and efficiency of business operation (including earnings, operation performance and
	the safeguard of company assets); (b) Achieve the reliability, timeliness, transparency, and compliance objectives according to
	the relevant laws and regulations in order to provide reasonable assurances.
II.	An internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can
	provide only reasonable assurance of accomplishing the three goals mentioned above. Furthermore, the effectiveness of an
	internal control system may change along with changes in environment or circumstances. The internal control system of the
	Company contains self-monitoring mechanisms, however, and the Company takes corrective actions as soon as a deficiency is
	identified.
III.	The Company judges the design and operating effectiveness of its internal control system based on the criteria provided in the
	Regulations Governing the Establishment of Internal Control Systems by Public Companies (hereinbelow, the “Regulations”).
	The Guidelines are made to examine the following five factors during the management and control process: (1) control
	environment, (2) risk assessment and response, (3) control activities, (4) information and communication, and (5) supervision.
	Each element further contains several items. Please refer to the Regulations for details.
IV.	The Company has assessed the design and operating effectiveness of its internal control system according to the aforesaid
	criteria.
V.	The examination result indicated that the Company's internal control system (including subsidiary governance) dated December
	31, 2021 has effectively assured that the following objectives have been reasonably achieved during the assessing period: (a)
	The degree that effectiveness and efficiency of business operation; (b) The reliability of the financial and related reports; (c)
	The compliance of the relevant laws/regulations and company policies.
VI.	This Statement will become a major part of the content of the Company's Annual Report and Prospectus, and will be made
	public. Any falsehood, concealment, or other illegality in the content made public will entail legal liability under Articles 20,
	32, 171, and 174 of the Securities and Exchange Act.
VII.	This statement was adopted by the Board of Directors of the Company on March 7, 2022, and 0 of the 8 directors presents had
	objections. The rest of the directors agreed with this statement and made this statement.
	Shan-Loong Transportation Co., Ltd.
	Chairman: Jen-Hao Cheng Signet
	President: Jen-Hao Cheng Signet

Certified Public Accountant Team's Review Report on Internal Control: None.
(IX) Any penalty on the Company and its internal personnel according to law, and any penalty from the Company on its internal personnel for violating the provisions of the internal control system. The main defects and improvement situations: None.
(X) Major resolutions of Shareholders' Meeting, the Board of Directors and the Audit Committee
Implementation Status of Resolutions from the 2021 Annual Shareholders’ Meeting (July, 2021)

	Matters to be resolved	Implementation
1	Approved the Company's final accounts for year 2020.	Approved the Annual Business Report and Financial Statements for 2020: Relevant statements and books have been filed with the competent authority for future reference, announcement and declaration in accordance with the Company Law and other relevant laws and regulations.

2	Approved the Company's 2020 Earnings Distribution Plan.	The Company's 2020 Earnings Distribution Plan was approved through voting by the Shareholders' Meeting. It is determined that July 23, 2021 is the date of ex dividend and August 24, 2011 is the date of cash dividend distribution. The cash dividend is NT $2.2 per share, with a total amount of NT $ 302,020,000.
3	Approved the amendment of part of the Articles of Incorporation of the Company.	The Company amended part of the Articles of Incorporation of the Company in accordance with the resolution of the Shareholders' Meeting.
4	Approved the amendment of part of the Directors' Election Practice of the Company.	The Company amended part of the Directors' Election Practice of the Company in accordance with the resolution of the Shareholders' Meeting.
5	Approved the amendment of part of "Rules of Procedure for Shareholders' Meetings."	The Company amended part of the "Rules of Procedure for Shareholders' Meetings." of the Company in accordance with the resolution of the Shareholders' Meeting.

2. Major Resolutions of Board of Directors

Date of the meeting	Term of meeting	Matters to be resolved	Resolution
2021.03. 25	14th 6th	1. Approved the Company's 2020 Annual Employee Compensation Distribution Plan 2. Approved Parent Company Only Financial Statements, Consolidated Financial Report and Business Report for the Year 2020 3. Recognized the amount of external endorsement guarantee and funds lent to others as of the end of December 2020 4. Approved the Allocation Plan of Remuneration and Year-end bonus for the Management for 2020. 5. Proposed amendments to part of the Rules of Procedure of the Board of Directors of the Company 6. Proposed endorsement guarantees for the subsidiary of the Company 7. Proposed the application of comprehensive credit line and commercial promissory note line with relevant financial institutions 8. Proposed to issue a statement of internal control system for 2020 9. Proposed to assess the independence of certified public accountants 10. Approved 2020 Earnings Distribution Proposal 11. Proposed discussion of the time, venue and convening of the Annual Shareholders' Meeting for 2021	Approved by all attending directors and submitted to the Annual Shareholders' Meeting Approved by all attending directors and submitted to the Annual Shareholders' Meeting Approved by all attending directors and submitted to the Annual Shareholders' Meeting Approved by all attending directors Approved by all attending directors and submitted to the Annual Shareholders' Meeting Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors and submitted to the Annual Shareholders' Meeting
2021.05. 10	14th 7th	1. Approved the Consolidated Financial Statements for Q1, 2021 2. Proposed the appointment of certified public accountants and their remuneration 3. Proposed amendments to part of the Articles of Incorporation of the Company 4. Proposed amendments to the Company's " Internal Control System for Stock Affairs Unit" 5. Proposed replacement of the Company's Financial Manager and Acting Spokesperson 6. Reviewed the shareholders' proposals 7. Proposed discussion of the time, venue and convening of the Annual Shareholders ‘Meeting for 2021 (new proposal)	Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors

2021.06. 10	14th 8th	1. Proposed to discuss the re-selection of the time and venue of the Company's Annual Shareholders' Meeting for 2021 2. Proposed the application of comprehensive credit line with E.Sun Bank	Approved by all attending directors Approved by all attending directors
2021.07. 01	14th 9th	1. Scheduled the ex-dividend date for cash dividend distribution for 2020	Approved by all attending directors
2021.08. 09	14th 10th	1. Approved the Consolidated Financial Statements for Q2, 2021 2. Approved the Manager's Employee Compensation Allocation Proposal for 2020 3. Proposed provision for Employee Compensation of NT $22 million for year 2022 4. Proposed disposal of land use rights assets of North Embankment of Taichung Port Industrial Development Park 5. Proposed amendments to the part of the Company's Code of Best Practice on Corporate Governance	Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors
2021.09. 28	14th 11th	1. Change of the Company's President 2. Change of the Company's Internal Audit Supervisor	Approved by all attending directors Approved by all attending directors
2021.11. 11	14th 12th	1. Proposed to replace the Accounting Manager, Financial Manager and Acting Spokesperson 2. Approved the Consolidated Financial Report for Q3, 2021 3. Proposed to the application of comprehensive credit line with Taishin International Commercial Bank 4. Use Plan of the Company's land and its above-ground building located as Land No. 843-2 Dayuan District Taoyuan City 5. The Company's proposal to donate to the "Cheng Huo-Tien Charity Foundation"	Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors
2021.12. 28	14th 13th	1. Proposal on Policy of the Company for the Year 2022 2. Annual Audit Plan of the Company for the Year 2022 3. Proposed amendments to part of the Code of Corporate Governance of the Company 4. Year-end bonus plan for the Company's managers for the Year 2021 5. The Company's cash capital increase proposal for "Shan-Loong Automobile Co., Ltd.", a subsidiary with 100% shareholding 6. Proposed retirement of Vice President of the Company	Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors
2022.03. 07	14th 14th	1. Proposed discussion of the Company's Distribution Plan of Employees Compensation for the Year 2021 2. Allocation Plan of Managers' Remuneration and Year-End Bonus for Year 2021 3. Approved Parent Company Only Financial Statements, Consolidated Financial Report and Business Report for the Year 2021 4. Recognized the amount of external endorsement guarantee and funds lent to others as of the end of December 2021 5. Proposed the application of comprehensive credit line and commercial promissory note line with relevant financial institutions 6. Proposed to provide endorsement guarantee for the Company's subsidiaries 7. Proposed to issue a statement of internal control system for 2021 8. Proposed to assess the independence and suitability of the Company's CPAs.	Approved by all attending directors and submitted to the Annual Shareholders' Meeting Approved by all attending directors Approved by all attending directors and submitted to the Annual Shareholders' Meeting Approved by all attending directors and submitted to the Annual Shareholders' Meeting Approved by all attending directors Approved by all attending directors Approved by all attending directors Approved by all attending directors

Proposed discussion of the Earnings Distribution Plan for 2021 Approved by all attending directors and 10. Discussed the time, venue and convening of the Annual Shareholders' submitted to the Annual Shareholders' Meeting Meeting for Year 2022 Approved by all attending directors 11. Proposed amendments to part of the Articles of Incorporation of the Approved by all attending directors and Company submitted to the Annual Shareholders' Meeting 12. Proposed amendments to part of the "Procedures for Acquisition or Approved by all attending directors and Disposal of Assets" of the Company submitted to the Annual Shareholders' Meeting

3. Major resolutions of the Audit Committee

Date of the meeting	Term of meeting	Content of motion	Resolution	The Company's response to the opinion of the Audit Committee
2021.03.2 5	2nd 6th	1. Approved Parent Company Only Financial Statements, Consolidated Financial Report and Business Report for the Year 2020 2. Recognized the amount of external endorsement guarantee and funds lent to others as of the end of December 2020 3. Proposed to provide endorsement guarantee for the Company's transferred investment subsidiaries 4. Proposed the application of comprehensive credit line and commercial promissory note line with relevant financial institutions 5. Proposed to issue a statement of internal control system for 2020 6. Proposed to assess the independence of certifiedpublic accountants	Approved by all attending Committee members	Reported to the Board of Directors of the Company for approval
2021.05.1 0	2nd 7th	1. Approved the Consolidated Financial Report for Q1, 2021 2. Proposed the appointment of certified public accountants and their remuneration 3. Proposed amendments to the Company's " Internal Control System for Stock Affairs Unit" 4. Proposed replacement of the Company's Financial Manager and Acting Spokesperson	Approved by all attending Committee members	Reported to the Board of Directors of the Company for approval
2021.06.1 0	2nd 8th	1. Proposed the application of comprehensive credit line with E.Sun Bank	Approved by all attending Committee members	Reported to the Board of Directors of the Company for approval
2021.08.0 9	2nd 9th	1. Approved the Consolidated Financial Report for Q2, 2021 2. Proposed Early Termination of land lease in North Embankment of Taichung Industrial Development Park	Approved by all attending Committee members	Reported to the Board of Directors of the Company for approval
2021.09.2 8	2nd 10th	1. Approved the Change of the Company's President 2. Approved the Change of the Company's Internal Audit Supervisor	Approved by all attending Committee members	Reported to the Board of Directors of the Company for approval
2021.11.1 1	2nd 11th	1. The Company proposed to replace the Accounting Manager, Financial Manager and Acting Spokesperson 2. Approved the Consolidated Financial Report for Q3, 2021 3. The Company's proposal to the application of comprehensive credit line with Taishin International Commercial Bank	Approved by all attending Committee members	Reported to the Board of Directors of the Company for approval
2021.12.2 8	2nd 12th	1. Annual Audit Plan of the Company for the Year 2022 2. Approved the proposed retirement of Vice President of the Company	Approved by all attending Committee members	Reported to the Board of Directors of the Company for approval

2022.03.0 7	2nd 13th	1. Approved Parent Company Only Financial Statements, Consolidated Financial Report and Business Report for the Year 2021 2. Recognized the amount of external endorsement guarantee and funds lent to others as of the end of December 2021 3. Proposed the application of comprehensive credit line and commercial promissory note line with relevant financial institutions 4. Proposed to provide endorsement guarantee for the Company's transferred investment subsidiaries 5. Proposed to issue a statement of internal control system for 2021 6. Proposed to assess the independence and suitability of the Company's CPAs. 7. Proposed amendments to part of the "Procedures for Acquisition or Disposal of Assets" of the Company	Approved by all attending Committee members	Reported to the Board of Directors of the Company for approval

4. Major resolutions of the Remuneration Committee

Date of the meeting	Term of meeting	Content of motion	Resolution	The Company's response to the opinion of the Remuneration Committee
2021.03.25	4th 5th	1. Proposed discussion of the Company's distribution plan of employee remuneration for the Year 2020 2. Approved Manager's Employee Compensation and Year-End Bonus for 2020	Approved by all attending Committee members	Report to the Board of Directors of the Company for approval
2021.08.09	4th 6th	1. Proposed discussion of the Manager's Employee Remuneration Allocation Proposal for 2020 2. Proposed provision for Employee Compensation of NT $22 million foryear 2022	Approved by all attending Committee members	Report to the Board of Directors of the Company for approval
2021.12.28	4th 7th	1. Year-end bonus plan for the Company's managers for the Year 2021	Approved by all attending Committee members	Report to the Board of Directors of the Company for approval
2022.03.07	4th 8th	1. Proposed discussion of the Company's Distribution Plan of Employees Compensation for the Year 2021 2. Manager's Employee Compensation and Year-End Bonus for 2021	Approved by all attending Committee members	Reported to the Board of Directors of the Company for approval

(XI) Where a director or supervisor has different opinions on an important resolution adopted by the Board of Directors and has a record or written statement, state the major content: None.
(XII) Resignation or Dismissal of the Company's Key Individuals, Including the Chairman, President, Accounting Manager, Financial Manager, Internal Audit Supervisor, R&D and Chief Governance Officer of the most recent year and as of the Date of this Annual Report:

Title	Name	Date of Assumption of Duty	Date of Dismissal	Reasons for Resignation or Dismissal
President	Tsai-Yuan Lin	2021.01.01	2021.09.15	Retirement
Vice President	Ching-Feng Yang	2021.04.01	2021.12.28	Job adjustment
Audit Director	Kan-Kuan Ling	2016.01.01	2021.08.31	Retirement
Finance Manager	Chia-Feng Yang	2020.06.09	2021.05.31	Job adjustment
Finance Manager	Mei-Ling Chuang	2021.05.10	2021.11.11	Job adjustment
Accounting Supervisor	Mei-Ling Chuang	2020.08.11	2021.11.11	Job adjustment

IV. Information on CPA Professional Fees

					Unit ofamount: NT$1,000	Unit ofamount: NT$1,000
Accounting Firm	Name of CPA		Audit fee	Non-audit fee	Audit period	Notes
KPMG Taiwan	Lo, Jui-Lan	Au, Yiu-Kwan	3,240	30	2021/1/1~2021/12/ 31

Note: non audit fees - others are provided for the audit and analysis of full-time employees who are not in charge of the position, NT $ 30,000.

(I) Where the proportion of non-audit fees paid to the endorsing CPAs, the firm to which the endorsing accountant belongs and its Affiliates accounts for more than one fourth of the audit fees: as explained in the above table.
(II) Where the CPA firm is changed and the audit fee paid in the year of change is lower than that in the year before the change: None.
(III) Audit fees decreased by more than 15% compared with the previous year: None.

V. Replacement of CPA:

None.

VI. The Company's chairman, general manager, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm:

None.

VII. Any transfer of equity interests and/or pledge of or change in equity interests by a director, managerial officer, or shareholder with a stake of more than ten percent


		2021		Current year as of March 31, 2022

Title	Name			Shareholding	Pledged Holding
		Shareholding	Pledged Holding
				Increase	Increase
		Increase (Decrease)	Increase (Decrease)
				(Decrease)	(Decrease)

Chairman		－	－	－	－
	Jen-Hao Cheng
President(Note 1)

Director and Vice		－	－	－	－
	Lan-Hui Yu
Chairman

	Cheng Loong	－	－	－	－
	Corporation
Director
	Representative: Su-Yun	－	－	－	－

	Cheng
	Shine Far Construction	－	－	－	－
	Co.,Ltd.
Director		－	－	－	－
	Representative: Chuan-

	Chuan Lu


		2021		Current year as of March 31, 2022

Title	Name			Shareholding	Pledged Holding
		Shareholding	Pledged Holding
				Increase	Increase
		Increase (Decrease)	Increase (Decrease)
				(Decrease)	(Decrease)

	Shine Far Co.,Ltd.	－	－	－	－
Director	Representative: Ken-	－	－	－	－
	Pei Cheng
Director	Yen-Ming Chen	－	－	－	－
Independent		－	－	－	－
	Yao-Ming Huang
Director

Independent		－	－	－	－
	Hsu-Feng Ho
Director

Independent		－	－	－	－
	Mao-Chun Wang
Director

		－	－	－	－
President (Note 1)	Tsai-Yuan Lin


Vice President (Note	Ching-Feng Yang	(13,000)	－	(23,000)	－
2)
Director of Oil		－	－	－	－
	Yung-Lung Lin
Products

Financial Manager		－	－	－	－
	Wei-Teng Hsiao
(Note 3)

Financial Manager		－	－	－	－
	Mei-Ling Chuang
(Note 3.4)

Financial Manager		－	－	－	－
	Chia-Feng Yang
(Note 4)

Accounting Manager		－	－	－	－
	Yu-Cheng Yao
(Note 5)

Accounting Manager		－	－	－	－
	Mei-Ling Chuang
(Note 5)

Supervisor of Audit		－	－	－	－
	Kun-Lin Wu
(Note 6)

Supervisor of Audit		－	－	－	－
	Kan-Kuan Ling
(Note 6)

Note 1. Tsai-Yuan Lin, Former President, retired in September 2021, and Chairman Jen-Hao
Cheng was appointed as Acting President in September 2021.
Note 2. Ching-Feng Yang, Vice President, was reassigned in December, 2021.
Note 3. Mei-Ling Chuang, the Financial Manager was reassigned in November 2021 and WeiTung Hsiao succeeded as the new Financial Manager in November 2021.
Note 4. Chia-Feng Yang, the Financial Manager, was reassigned in May 2021, and Mei-Ling Chuang succeeded as the new Financial Manager in May 2021.
Note 5. Mei-Ling Chuang, the Accounting Manager was reassigned in November 2021, and Yu-Cheng Yao succeeded as the new Accounting Manager in November 2021.
Note 6. Kuan-Ling Kan, the audit supervisor, retired in August 2021 and Kun-Lin Wu succeeded as the new audit supervisor in September 2021.

Information on the counterparty of the equity transfer as a related party: None.

Information on the counterparty of the equity pledge as a related party: None.

VIII. Information on Concerned Relationship of Top Ten Major Shareholders

March 28, 2022

Name	Current Shareholding	Current Shareholding	Spouse's/Minor's Shareholding	Spouse's/Minor's Shareholding	Shareholding by Nominee Arrangement	Shareholding by Nominee Arrangement	Title or name and relationships of the 10 largest shareholders where they are related parties, spouses, or relatives within the second degree of kinship	Title or name and relationships of the 10 largest shareholders where they are related parties, spouses, or relatives within the second degree of kinship
	Number of Shares	Shareholding ratio	Number of Shares	Shareh olding ratio	Numbe r of Shares	Shareh olding ratio	Name	Relationship
Cheng Loong Corporation Representative: Su- Yun Cheng	12,690,010 -	9.24 -	- -	- -	- -	- -	Cheng Loong Investment Co., Ltd. Shine Far Co., Ltd. Shine Far Construction Co., Ltd. Cheng Loong Investment Co., Ltd.	Legal representative Director Director Director Representative of Institutional Director
Special ESOP account of Shan- Loong Transportation Co., Ltd entrusted in CTBC Bank Representative: Kun-Lin Wu	8,455,927 -	6.16 -	- -	- -	- -	- -	- -	- -
Shine Far Co., Ltd.	8,367,944	6.10	-	-	-	-	Cheng Loong Corporation	Legal representative Director
Representative: Ken-Pei Cheng	85,986	0.06	-	-	-	-	-	-
Shine Far Construction Co., Ltd. Representative: Chuan-Chuan Lu	6,743,227 866,450	4.91 0.63	- 68,000	- 0.05	- -	- -	- Shine Far Co., Ltd. Shine Far Construction Co., Ltd.	- Managing Director Director Director
Jen-Ming Cheng	6,552,421	4.77	9,000	-	-	-	Cheng Loong Corporation Shine Far Construction Co., Ltd. Shine Far Co., Ltd. Cheng Loong Investment Co., Ltd.	Vice Chairman Director Director Representative of Institutional Director
Chiung-Miao Yeh	6,027,000	4.39	-	-	-	-	Chengguan Investment Co., Ltd.	Chairman
Cheng Loong Investment Co., Ltd. Representative: Cheng-Lung Cheng	4,871,034 68,000	3.55 0.05	- 866,450	- 0.63	- -	- -	- Shine Far Construction Co., Ltd. Shine Far Co., Ltd.	- Director Chairman
Jen-Hao Cheng	4,328,876	3.15	-	-	-	-	Shine Far Co., Ltd. Shine Far Construction Co., Ltd.	Managing Director Director
Chengguan Investment Co., Ltd. Representative: Wen-Lin Lin	3,351,000 -	2.44 -	- 6,027,000	- 4.39	- -	- -	Chiung-Miao Yeh Chiung-Miao Yeh	Director Spouse
Hsan Fhu Investment Co., Ltd. Representative: Cheng-Lung Cheng	1,906,697 68,000	1.39 0.05	- 866,450	- 0.63	- -	- -	- Shine Far Construction Co., Ltd. Shine Far Co.,Ltd.	- Director Chairman

December 31, 2021

IX. Consolidated Shareholding Percentage

Reinvestment business (Note 1)	By Company	By Company	Investments by the Directors, managers, and companies directly or indirectly controlled by the Company	Investments by the Directors, managers, and companies directly or indirectly controlled by the Company	Consolidated Investment	Consolidated Investment
	Number of Shares (Shares)	Percentage of Ownership	Number of Shares (Shares)	Percentage of Ownership	Number of Shares (Shares)	Percentage of Ownership
Shan-Loong Investment Co., Ltd.	40,000,000	100.00	-	-	40,000,000	100.00
Cheng Loong Corporation	19,376,137	1.75	146,404,846	13.21	165,780,983	14.96
Shan-Loong International Holdings Co., LTD	10,046,508	100.00	-	-	10,046,508	100.00
GemTech Optoelectronics Corp.	3,644,000	19.29	13,138,000	69.56	16,782,000	88.85
Ko Loong Industrial Co., Ltd.	2,014,000	19.75	3,200,000	31.37	5,000,000	49.02
Cheng Loong Investment Co., Ltd.	600,000	4.62	7,500,000	57.69	8,100,000	62.31
Shan-Loong Shipping Customs Declaration Co., Ltd.	13,100,000	100.00	-	-	13,100,000	100.00
Shan-Long Automotive Co., Ltd.	20,000,000	100.00	-	-	20,000,000	100.00
Shin Loong Life Co., Ltd.	350,000	5.83	3,000,000	50.00	3,350,000	55.83
Shine Far Co., Ltd	269,752	0.87	6,010,222	19.39	6,279,974	20.26
Yueh Loong Co., Ltd.	323,278	10.78	1,409,592	50.34	1,711,318	61.12

Note: The Company's long-term investment

Chapter 4. Capital Overview

I. Capital and Shares

(I) Source of capital


		Authorized capital				Paid-in capital			Remark

	Issue
											Capital
Year	price
	(NT)	Number of		Amount (NT		Number of	Amount (NT				increased
		Shares (in				Shares (in			Source of capital		by assets	Others
				$1,000)			$1,000)
		Thousands)				Thousands)					other

											than cash
									Conversion of corporate bonds in the second
2021	-	1,500,000		150,000		137,282	1,372,818		quarter of 2019 (JSSZ No. 10801094770,		None
									August,1,2019)
(In thousands)

			Authorized capital
Type of Stock										Remark

			Issued shares		Unissued shares			Total


Common stock			137,282		12,718			150,000

		Authorized capital
Type of Stock				Remark
	Issued shares	Unissued shares	Total
Common stock	137,282	12,718	150,000

(II) Shareholder Structure

March 28, 2022

Shareholder Structure Number	Government agencies	Financial institutions		Domestic natural persons	Foreign institutions and individual shareholders	Total
			Other
			institutional
			shareholders

Number of shareholders	0	9		95,276	99	95,665
			281

Shares	0	8,546,027		79,051,084	4,606,579	137,281,827
			45,078,137

Shareholding (%)	0	6.23		57.58	3.35	100.00
			32.84

Note: The first TWSE/TPEx listed companies and the emerging market listed companies should disclose their shareholding ratio of capital from mainland area; capital from mainland area refers to the people, legal entities, groups, other institutions in the mainland or their companies investing in the third region as stipulated in Article 3 of the Measures Governing Investment Permit to the People of Mainland Area.

(III) Shareholding Distribution Status

1. Common stock

Common shares/par value per share NT $10

March 28, 2022

	Number of
			Percentage of
Shareholding range	shareholders	Shares
			Ownership (%)
	(persons)

1~ 999	85,345	958,688	0.70
1,000~ 5,000	8,607	15,061,697	10.97
5,001~ 10,000	872	6,810,835	4.96
10,001~ 15,000	282	3,560,509	2.59
15,001~ 20,000	142	2,599,855	1.89
20,001~ 30,000	126	3,189,732	2.32
30,001~ 40,000	56	1,948,336	1.42
40,001~ 50,000	44	2,043,554	1.49
50,001~ 100,000	83	6,119,154	4.46
100,001~ 200,000	54	8,216,670	5.99
200,001~ 400,000	29	7,890,500	5.75
400,001~ 600,000	4	2,035,455	1.48
600,001~ 800,000	1	700,000	0.51
800,001~ 1,000,000	3	2,685,245	1.96
over 1,000,001	17	73,461,597	53.51
Total	95,665	137,281,827	100

Preferred shares: None.

(IV) List of Major Shareholders

March 28, 2022

Shareholding Name of Major Shareholders	Shares	Shareholding (%)
ChengLoongCorporation	12,690,010	9.24
Special ESOP account of Shan-Loong Transportation Co., Ltd entrusted in CTBC Bank	9,442,751	6.88
Shine Far Co., Ltd	8,367,944	6.10
Shine Far Construction Co.,Ltd.	6,743,227	4.91
Jen-MingCheng	6,552,421	4.77
Chiung-Miao Yeh	6,027,000	4.39
Chengshi Investment Co., Ltd.	4,871,034	3.55
Jen-Hao Cheng	4,328,876	3.15
Chengguan Investment Co.,Ltd.	3,351,000	2.44
Sun Favorite Co., Ltd.	1,906,697	1.39

(V) Information on market price, net worth, earnings and dividends per share in the last two years

					Current year as of
	Year
			2020	2021	March 31 (Note
Item
					8)

	Highest		32.40	39.95	40.05
Market price
per share	Lowest		26.25	31.00	37.25
(Note 1)	Average		29.97	35.20	39.69

Net worth per	Before distribution		37.05	38.29	-
share
	After distribution		36.23	-	-
(Note 2)

	Weighted average shares
			135,928	135,928	135,928
	(thousand shares)

Earnings per	Earnings per share before
			2.73	3.06	-
Share	adjustment (Note 3)

	Adjusted earnings per share
			-	-	-
	(Note 3)

	Cash dividends		2.2	2.5	-
		-	-	-	-
	Free
Dividends per
	allotment	-	-	-	-
share
	Accumulated undistributed
			-	-	-
	dividend (Note 4)

	P/E Ratio(Note 5)		10.98	11.50	-
Return on	P/D Ratio(Note 6)		14.27	14.08	-
investment	Yield on cash dividend (Note
			7.01%	7.10%	-
	7)

Note 1. List the highest and lowest market prices of ordinary shares in each year, and calculate the average market price of each year according to the transaction value and trading volume of each year. Note 2. Please refer to the number of shares issued at the end of the year and fill in the distribution according to the resolution of the Board of Directors or the next Annual Shareholders' Meeting.

Note 3. If retroactive adjustment is required due to the situation of free allotment, etc., the earnings per share before and after adjustment shall be listed.

Note 4. If the conditions for the issuance of equity securities stipulate that the dividends not paid in the current year can be accumulated until the surplus year, the accumulated and unpaid dividends up to the current year shall be disclosed respectively.

Note 5. P/E Ratio = Average market price/earnings per share.

Note 6. Price/dividend ratio = Average market price/cash dividends per share.

Note 7. Cash dividend yield rate = Cash dividends per share/average market price.

Note 8. The data reviewed by the CPA for the most recent quarter of the Company is the first quarter of 2022.

(VI) Dividend Policy and Implementation Status

The Company's industrial can be combined with national economic growth, and its life cycle is in the stage of stable growth. On the basis of the Company's future capital needs and long-term financial planning, as well as the shareholders' needs for cash inflow, if the Company has any surplus after the final accounts of each year, in addition to paying profit-making enterprise income tax according to law and making up for the losses of previous years, it shall first allocate 10% of the legal surplus reserve for the balance and special surplus reserve for the amount of shareholder's equity deduction in the current year, and allocate more than

30% of the rest to shareholders, of which the cash dividend shall not be less than 10% of the total dividend. However, if the cash dividend per share is less than NT $ 0.1, it will not be paid, but a stock dividend. If there is a reduction in shareholders' equity accumulated in the previous year or occurred in the current year but the after-tax surplus of the current year is insufficient to be set aside, a special surplus reserve of the same amount shall be set aside from the accumulated undistributed surplus of the previous year and deducted before allocation and distribution. If the dividend and bonus per share are less than NT $0.5, the surplus distribution in the preceding paragraph may be exempted.

The Company proposed cash dividend of NT $2.5 per share of dividend distribution for 2021 and is pending for resolution of the Annual Shareholders' Meeting.

(VII) The impact of the free allotment proposed at the Shareholders' Meeting on the Company's operating performance and earnings per share

There is no proposed allotment of stock dividends in this year, so it is not applicable.

(VIII) Remuneration for employees and Directors

The number or scope of the remuneration of employees and Directors contained in the Company's Articles of Incorporation:
According to Article 19 of the Articles of Incorporation, the Company shall allocate no less than 1% of the pretax profit for the current period before deducting the employee's remuneration. But the Company shall reserve a portion of profit to make up for accumulated losses, if any. Employees’ compensation may be distributed in shares or cash, and the counterparty to whom shares or cash are distributed as employees’ compensation may include the employees of its controlled or subordinate companies that meet certain criteria. The allocation and ration of Employee remuneration must be approved by the Board of Directors in a meeting attended by more than two-thirds of all Board members, where half of the attending Directors approve. The remuneration resolution shall be reported in the Annual Shareholders' Meeting. Where the Board of Directors has adopted a resolution in the preceding paragraph to pay remuneration to employees in the form of shares, it may adopt the same resolution to issue new shares or buy its own shares.
The basis for estimating the amount of employee and director remuneration listed in the valuation, the basis for calculating the number of employee remuneration distributed by shares, and the accounting treatment when the actual amount of distribution differs from the estimated amount.
- (1) The basis for estimating the amount of employee remuneration listed in the valuation, the basis for calculating the number of employee remuneration distributed by shares, and the accounting treatment when the actual amount of distribution differs from the estimated amount:
  - The basis of the valuation is based on the actual operating results of the current year, in accordance with the provisions of the Articles of Incorporation and taking into account the actual distribution situation of previous years. However, if there is a difference between the amount of distribution decided by the subsequent Shareholders' Meeting and the estimated amount, it shall be regarded as a change in accounting estimation and listed as the profit and loss of the actual distribution year.
- (2) The basis for the valuation of Directors' remuneration amounts and the basis for the calculation of the number of shares distributed by shares: not applicable.
The approval of distribution of remuneration by the Board of Directors:
- (1) The amount of employee remuneration and directors' remuneration distributed in cash or shares. If there is any discrepancy between that amount and the estimated figure for the fiscal year these expenses are recognized, the discrepancy, its cause, and the status of treatment shall be disclosed: The remuneration for employees proposed by the Board of Directors: cash of NT $22,000,000; the remuneration for Directors: NT $0 and no discrepancy with the estimated amount of recognized expenses.

(2) The amount of employee remuneration to be paid in stocks out of the current company-level financial report in terms of the sum of net profit after tax and employee remuneration: the Company didn't pay any employee remuneration in stocks.
The actual distribution of remuneration of employees and directors in the previous year:
- The actual distribution of remuneration to employees and directors of the Company in the previous year did not differ from the recognized amount.
- Employee remuneration - cash of NT $22,000,000, distributed on August 24, 2021; Directors' remuneration: None.
(IX) Repurchase of shares of the Company: None.
(X) Status of Corporate Bonds: None.
(XI) Status of Preferred Stocks: None.
(XII)Issuance of GDR/ADR: None.
(XIII) Employee Stock Options None.
(XIV) Issuance of New Restricted Employee Shares: None.
(XV)Status of Issuance of New Shares in Connection with Mergers and Acquisitions: None.

II. Finance Plans and Implementation: None.

Chapter 5. Operations Overview

I. Business Activities

(I) Business Scope
Major business of the Company
(1) G101061 Automobile Cargo Transportation Business
(2) G101081 Automobile Container Transport
(3) CD01030 Automobiles and Parts Manufacturing
(4) JA01010 Automotive Repair and Maintenance
(5) F114010 Wholesale of Automobiles
(6) F114030 Wholesale of Motor Vehicle Parts and Supplies
(7) F214010 Retail Sale of Automobiles
(8) F214030 Retail Sale of Motor Vehicle Parts and Supplies
(9) G801010 Warehousing and Storage
(10) F112010 Wholesale of Gasoline and Diesel Fuel
(11) F112040 Wholesale of Petrochemical Fuel Products
(12) F212011 Gas Stations
(13) F212050 Retail Sale of Petroleum Products
(14) J101090 Waste Disposal
(15) J101030 Waste clean-up
(16) E599010 Pipe Lines Construction
(17) F107170 Wholesale of Industrial Catalyst
(18) F113100 Wholesale of Pollution Controlling Equipment
(19) F213100 Retail Sale of Pollution Controlling Equipment
(20) F401010 International Trade
(21) I103060 Management Consulting Services
(22) I301010 Information Software Services
(23) I301020 Data Processing Services
(24) J101040 Waste management
(25) J101050 Environmental Testing Services
(26) J101060 Wastewater (Sewage) Treatment
(27) JA02051 Weights and Measuring Instruments Repair
(28) F113060 Wholesale of Measuring Instruments
(29) F213050 Retail Sale of Metrological Instruments
(30) F401181 Measuring Instruments Import

(31) I301040 Third-Party Payment Services
(32) ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject

to special approval.

Operating Percentage (FY2021)


Main Business Activities	% Of turnover


Automobile Transportation	30%


Gas Stations	70%


Total	100%

Main products and services

The Company is engaged in container transportation, bulk transportation, dangerous goods transportation, oil transportation, vehicle sales,

Vehicle repair, vehicle inspection and petrol station business.

New products or services planned for development

Plan mobile payments and promote cloud vehicles, add self-propelled refuellers, and provide customers with convenient services.

(II) Development status of the industry
Overview of the Gas Stations

According to the Oil Price Information Management and Analysis System of the Energy Bureau of the Ministry of Economy, the comparison of crude oil month trends in North Sea Brent, Dubai, and West Texas from January 2021 to December 2021.

==> picture [524 x 252] intentionally omitted <==

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

Monthly Comparison of International Oil Price Trends (USD/bbl)
North Sea Dubai West
Brent Texas
USD/bbl
Year and month
----- End of picture text -----

The Company engages in the gas stations in the oil and gas industry. It provides retail of gasoline and diesel, manual car washing and automobile inspection services, etc., and is located downstream of the oil market. In recent years, after the liberalized competition in the domestic oil market, the gas station industry, which was originally profitable and stable, is affected by the changes in the current economic climate and the changes in international oil prices, and it is difficult to find gas station locations with development potential. The competition for renewal and lease of new stations among linked gas stations becomes more intense, which pushes up the rent level, forms operating pressure, erodes the profits of gas station peers, and the operation becomes more and more difficult. In addition, due to the issue of climate change, with reducing carbon emissions in the transport sector as one of the important objectives, governments of various countries actively promote the development of electric vehicles and invest a lot of resources in building charging station equipment, and provide subsidies for the purchase of electric vehicles to replace fuel vehicles. The overall business environment and external competition are unfavorable to the operation of gas stations.

In 2020, Wuhan pneumonia (novel coronavirus disease, COVID-19) struck the world and the crude oil market was hit hard. At present, crude oil futures still have not returned to their pre-pandemic prices. Due to the restrictions of governments on travel and commercial activities, oil demand fell like a cliff in early 2020, with a huge amount of oil surplus and tight crude oil storage facilities everywhere. However, with the good news of vaccine research and development, people are full of hope for the future, which also makes the oil price rise irrationally. According to the International Energy Agency (IEA), inventory will be 625 million barrels higher in 2021 than before the pandemic. The emergence of overcapacity makes the oil market face the threat of oversupply, and the oil price will face the threat of decline.

Due to the continuous rise of basic salary and the increasing burden of personnel salary, in view of the impact of unprofitable operation caused by the shortage of labor force and the sharp increase of labor cost, the company has fully set up self-service refueling equipment and system to improve the utilization ratio of self-service refueling through marketing promotion, so as to reduce the rising personnel cost year by year. A user-friendly self-service refueling interface, diverse payment options, and a rich and interesting marketing campaign boost customers to use self-service refueling more. Various marketing methods have been introduced and members and teams are actively recruited. Companies are to increase marketing strength, strive to improve sales volume and strengthen inventory management to cope with the positive and negative benefits brought about by oil price changes.

Overview of Automobile Freight

According to the operating data for year 2020 and 2021 from the Statistical Office of the Ministry of Transportation, the total carriage in 2021 was 579.01 million tons, an increase of 4.1% over the same period in 2020. The freight revenue in 2021 was NT $182.4 billion, an increase of 7.42% over the same period in

Automobile freight is the most important mode of transportation in Taiwan. The container transportation and storage industry are mainly engaged in the business of container terminal and container maintenance. The container terminal refers to the site registered by the Customs for the distribution and storage of containers and container goods. It is also engaged in the storage, movement and processing of import and export, transshipment goods and containers in the terminal. Affected by the Sino-US trade friction, Taiwan businessmen returned to Taiwan. In addition to Covid-19, it is estimated that all industries will change in the future. In order to reduce risks, enterprises will move some production capacity out of China, and reorganize the industrial chain to build diversified demand and supply. It is expected to drive a large increase in the transportation demand of the cargo contracting industry, a large increase in the loading and unloading volume of container transportation and warehousing operators, and an increase in the rental volume of factory offices and warehousing in the port area; With the huge demand for plant leasing and storage brought by the return of Taiwan businessmen, the business opportunities in the future cannot be underestimated. After all, in the post-pandemic era, the traditional pattern needs to be changed. Only by adding high technology and artificial intelligence, combining with the Internet of Things and automation, can the competitiveness and irreplaceability of the industry be improved.

The irregular and flexible adjustment mechanism of oil price makes the business environment of the transportation industry still full of challenges. In the face of this impact, the Company is committed to improving service quality to consolidate customers, and strive to reduce operating costs. The Company will also seize the bidding opportunity in various large-scale transportation projects to stabilize the source of customers.

In the process of national economic growth, cargo transportation and distribution has always played an important role. Due to the rise of internet economy and the rapid development of e-commerce logistics services, the traditional transportation industry must change rapidly to meet the market demand. The transportation industry, freight forwarding industry, freight collection and distribution yard, container yard, airlines, shipping, customs declaration business, storage center, delivery center, express industry and contracting industry shall be effectively integrated and strengthened. The development of automobile freight industry is facing external changes such as the change of global logistics type, the rapid development of information network and the development of cross-strait direct shipping. In addition, the deterioration of industrial operation environment, the trend of industrial development transformation and the rigidity of operation and management system make the operation of automobile container freight industry increasingly difficult. Due to the development trend of international logistics for transportation enterprises in recent years, it is emphasized to provide integrated transportation services. International supply chain members include international cargo transportation industry, international cargo logistics industry, international cargo contracting industry, international cargo declaration industry and third-party international logistics companies.

Facing the development trend of global logistics management, the company has established a joint venture Shanghai Shantong Storage and Transportation Co., Ltd. in Shanghai to provide one-stop services of customs declaration, solicitation and transportation. In addition, in line with the Southward Policy, the Company has made investment in Vietnam in 2018 for transportation business so as to develop new overseas locations.

The development of world trade towards liberalization and globalization is becoming faster and faster, and the importance of cross-border logistics is increasing day by day. International commercial logistics center has become the primary goal of land transportation operators' active transformation. The development of logistics center can effectively integrate the circulation process, with ground transportation, warehousing, loading and unloading, packaging, circulation processing and information integrated through management procedures to create value and meet customer needs. In order to integrate the future development needs, the Company actively purchased land and built its own storage facilities. In addition to the current logistics business, the Company will expand towards the logistics and storage business with high added value, effectively utilize the transportation and customs declaration capabilities distributed in all locations in the province, and connect the market demand for various logistics businesses in the future.

With the industrial transformation in Taiwan, the online shopping market driven by e-commerce is growing rapidly. Therefore, the transportation and distribution demand of 3C electronic goods, clothing, cosmetics and other commodities with small size has increased significantly. In the name of logistics companies, industrial forms that only run transportation and distribution have sprung up one after another. The small scale of transportation companies and the outsourced vehicles have become the two features of Taiwan's road freight transportation industry.

The upstream, midstream and downstream correlations of the gas station sector and the automobile container and freight transport sector are shown as follows:

(1) Gas Stations

Upstream Midstream Downstream

(Petroleum Refining Industry) (Sales of Oil Products) (Oil Products users)

CPC Oil Refinery General Formosa Plastics Oil public/vehicle or Gas station Refinery power machine users Others

(2) Automobile Transportation

Upstream Midstream Downstream Transportation Agriculture, Forestry, Equipment Leasing Automobile Fisheries and Animal Automobile Husbandry Transportation Manufacturing and Manufacturing Construction Automobile Repair and Wholesale and Retail Trade Maintenance Those in need of 64 Gas Stations transportation

(III) Technology and R&D Overview

The company's main business is the operation of land freight and gas stations, and there is no dedicated R & D unit. In order to achieve the goal of electronation and mobilization, with the driving GPS data communication and satellite positioning real-time monitoring system, and using the latest network technology and digital technology integration, the Company reduces customers' waiting time, improves safety and fully controls the transportation process. The Company purchased vehicles that comply with environmental protection laws and regulations to increase the carrying capacity. The Company also coordinates the software and hardware of transportation business to enable customers with faster and convenient services.

(IV) Long-term and Short-term Development Plan

1. Short-term:

(1) Lean Management:

The Company is to launch talent management and optimize human resources; strengthen data collection and analysis to improve work performance; integrate the land of each district and strengthen the use performance; integrate administrative resources and optimize operation process.

(2) Lean Transportation:

The Company is to strengthen flexibility of scheduling to meet customer needs, implement administrative operations to achieve management indicators, cultivate professionals and improve professional capabilities.

(3) Refine Logistics:

The Company is to optimize the micro-management and process, improve delivery efficiency and punctuality, meet customer needs, increase revenue and reduce expenditure.

(4) Innovate Oil Products:

The Company is to build full self-service gas station, membership APP storage and vehicle identification system and engage in environmental monitoring, being a leader in the new commercial model in the market.

(5) Further development in Vietnam:

The Company is to build a freight yard to create container-transfer benefits and enhance vehicle scheduling, thus providing quality service.

(6) Boost Automobile:

The new cars are to be sold with maintenance service package to create a stable and continuous business volume. The original-factory-level service shall be maintained and various services centered on the Internet of vehicles will be promoted.

(7) Shipping Worldwide:

The Company will actively explore global routes, improve service quality, and strengthen customer acceptance.

2. Long-term:

(1) The Company is to diversify its business, enrich service scope and expand profit sources.
(2) The Company is to expand the operation locations. After entry into WTO, Taiwan's industry is facing the pressure of international competition. The vision of the industry will no longer be limited to the Taiwan market. We should have a broad pattern of global thinking, expand the operation scale, and take improving profitability as the main goal.
(3) The Company is to further customer service and enhance customer loyalty. By adhering to the customer-oriented attitude, it will be conducive to the long-term operation of the Company.
(4) The Company is to sign long-term oil supply contracts with suppliers, and actively strive for sales incentives given by suppliers to increase the benefits of oil sales.
(5) The Company is to improve the quality of human resources and continue its talent training plan. Regular education and training will be held every year. With human training system and business development plan, the Company will improve service quality and efficiency.
(6) The Company is to cooperate with banks in marketing. The gas stations will promote selfrefueling service, offering diversified choices for customers.

II. Market and Sales Overview

(I) Market Analysis
The Company mainly provides transportation services such as in-island cargo containers, bulk, logistics and gas station services, all of which are domestic sales.
With the liberalization of competition in the domestic oil market, price reduction and promotion and the rise of the rental cost of gas stations, the operation of gas stations has entered into an era of low profits. The gas station operators have changed their marketing strategies, strengthened the alliance of different industries and issued joint gas cards to create more revenue. At present, CPC still enjoys the highest share in the domestic gas station industry. In terms of oil brands, the top ones are CPC and Formosa Petrochemical Corporation. Since the first Shan-Loong gas station established in 1998, through continuous efforts, the Company has 80 gas stations now, which are located all over the province. The oil distribution volume and market share are growing steadily. In view of the falling price loss of the inventory caused by oil price fluctuation, which is beyond the capacity of ordinary service station channel providers, the Company has implemented inventory management to cope with the positive and negative benefits brought by oil price changes.

The Company has been engaged in transportation services for a long time. From the initial freight and container transportation to the current logistics warehousing and shipping customs declaration, the Company provides

one-stop services of customs declaration, solicitation and transportation. The Company has obtained ISO14001 certification, and the scope of certification includes automobile repair and gas station business in addition to the existing transportation and logistics business.

Competitive niches, favorable and unfavorable factors for future development, response measures
(1) Award History
a. The Company has strict self-requirements for quality, and has passed ISO9001 International Quality Management System Verification, SQAS Road Transportation Safety and Quality Evaluation System Verification, ISO14001 International Environmental Management System Verification, OHSAS18001 Occupational Safety and Health Evaluation System Verification and TTQS Training Quality Talent Development Quality Management System Appraisal for 2018 Bronze Medal.
b. The Winner of World Magazine's Top 2000 Survey 2018: 89th in the Service Industry
c. In 2019, the Company passed the annual assessment of the Road Transportation Safety Quality Assessment System (SQAS) of the General Management Office of Formosa Plastics Co., Ltd. and won the seventh place in the warehousing and cargo industry of "Taiwan's Large Enterprise Ranking Top 5000".
d. In 2020, the Company's Environmental Remediation Lab passed the Qualification Permit of the Environmental Inspection and Measurement Organization, and Shan-Loong Customs Declaration, the subsidiary, also won the recognition of Excellent Customs Declaration.
e. In 2021, the Company was honored by the Internal Revenue Service with the "Outstanding Operator" award.
(2) Favorable factors
a. There are operation locations in north, central, and south of Taiwan, which provide customer service over a wide area, improve the vehicle availability, and create dual-effect travel.
b. Gas stations are located throughout the province, providing transportation oil for the same industry is also better for customer base development than other operators. By careful evaluation, the Company establishes operation locations on the basis of profit priority.
(3) Unfavorable Factors

The rise in the price of various raw materials, the increase in procurement and employment costs, as well as the increase in the cost of input equipment that should meet the standards of various environmental protection laws and regulations of the government. Moreover, due to the rising awareness of environmental protection and climate change issues, governments of various countries take reducing carbon emissions in the transportation sector as one of the important objectives, actively promote the development of electric vehicles, invest a lot of resources in building charging station equipment, and provide subsidies for the purchase of electric vehicles to replace fuel vehicles, all of which are unfavorable to the operation of gas stations.

(4) Response Measures

Looking forward to the future, more attentions will be paid to environmental protection. The company will improve vehicle maintenance and replace the old with the new, introduce low pollution models, and set up a special unit of the environmental protection department to deal with the environmental protection business of the oil department, so as to comply with the provisions of relevant laws and regulations on environmental protection. In addition to price and sales promotion, the gas stations are also engaged in diversified commodity sales and services, such as car washing service, establishing charging (replacing) power station, etc.

(II) Important Uses of the Main Products and the Production Process
(1) Container transportation: the Company is specialized in import and export container transportation, from the terminal container yards to the customer factories, cooperate with the dispatching yard and hanging container operation in each district, integrate the transportation network all over the province and provide high-quality services.
(2) Bulk transportation: the Company is engaged in carrying raw materials and finished goods, including flat and dump trucks as well as dumping operations, providing professional services for in-island transportation.
(3) Dangerous goods transportation: the Company provides chemical tanks and various dangerous goods transportation services, and passed the SQAS European Transportation Safety and Quality Assessment Certification (Chemical Storage and Transportation).
(4) Oil transportation: the Company has built new oil tank trucks to carry the transportation For CPC Oil and Formosa Plastic Oil, expanding the new business.
(5) Sales of automobiles: Sales of DAF Vehicles.
(6) Automobile Repair and Inspection: auto repair plants are established in north, central and south of Taiwan, and inspection services are launched, too.
- In addition, each of Shan-Loong's automobile is equipped with advanced equipment such as GPS, image recording DVRs, etc., which provides multiple protection to achieve the customers' mission.
(7) Gas station business: Shan-Loong has set up direct-operated gas stations on all major transportation routes and nearby densely populated areas to provide consumers with high-quality oil products and services. The Company focuses on “pure, adequate, satisfactory, and safe” oil service for customers.
(III) Supply of Primary Raw Materials

The Company's oil products are mainly for gas station operations. The oil products are from two major domestic suppliers, CPC and Formosa Plastics, both of which have signed supply contracts. The supplies are in good condition.

(IV) List of customers who accounted for more than 10% of total sales in the last two years

1. Information of major suppliers in the most recent two years

Unit: NT $1,000

	2020	2020	2020	2020	2021	2021	2021	2021
Item	Name	Amount	% Of annual net purchase	Relationship with the Issuer	Name	Amount	% Of annual net purchase	Relationship with the Issuer
1	CPC	7,448,680	76.99	None	CPC	9,287,220	76.01	None
2	Formosa Petrochemical	2,226,028	23.01	None	Formosa Petrochemical	2,930,924	23.99	None
	Net purchase	9,674,708	100.00		Net purchase	12,218,144	100.00

The Major Customers in the Last Two Years

Unit: NT $1,000

		2020	2020	2020		2021	2021	2021
Item	Name	Amount	Percentage in Total Net Sales (%)	Relationship with the Issuer	Name	Amount	Percentage in Total Net Sales (%)	Relationship with the Issuer
1	Cheng Loong and its subsidiaries, etc.	1,396,849	9.30	The company is a legal entity director of the Company	Cheng Loong and its subsidiaries, etc.	1,476,881	7.85	The company is a legal entity director of the Company
2	Others	14,558,651	90.70	－	Others	17,335,282	92.15	－
	Net sales	15,955,500	100.00		Net sales	18,812,163	100.00

The reasons for the increase or decrease: None

(V) Production value table of the last two years: the company is specialized in transportation and oil service, which is not applicable.
(VI) Sales in the Last Two Years
The Company's transportation business: Not applicable.
The Company's oil products business is as follows

Unit: KL: NT $1,000

Yea	r 2020	r 2020	r 2020	r 2020
					2021


Production	t Domestic
			Overseas		Domestic		Overseas
amoun


Major products	Quantity	Value	Quantity	Value	Quantity	Value	Quantity	Value


Premium Diese	l 406,693	7,046,758	－	－	410,038	9,448,440	－	－

Unleaded	35,831
		665,087	－	－	33,489	771,671	－	－
Gasoline 92

Unleaded	128,878
		2,597,624	－	－	117,669	2,711,417	－	－
Gasoline 95

Unleaded	10,020
		218,731	－	－	9,164	211,171	－	－
Gasoline 98

Secondary	-
		6,761	－	－	-	12,683	－	－
Products


Totals	581,422	10,534,961	－	－	570,360	13,155,382	－	－

III. Employee Profile

Number of Employees, Average Years of Services, Average Age and Employee Academic Background in the Previous Two Years Before the Publication of the Annual Report

Year	Year	2020	2021	As of the end of the current year ended As of March31,2022
Number of employees				101
	Management Staff	122	121

				506
	Administrative Staff	484	511

				1,152
	Field Staff	1,284	1,254

	Total	1,890	1,886	1,759
Average Age		34.64	34.62	36.61
Average year of services		5.90	6.05	6.47
% Education				-
	PhD	-	-

				1.31%
	Master	0.85%	0.74%

				41.62%
	University	39.21%	40.03%

				43.15%
	High school	46.46%	46.61%

				13.92%
	Below high school	13.48%	12.62%

IV. Environmental Protection Expenditures

(I) Losses in recent years due to environmental protection: None

(II) Response Measures

The Company's security department and environmental protection department are responsible for dealing with the requirements of various environmental protection laws and regulations. The fuel dispenser is equipped with an oil and gas recovery system to reduce the oil and gas at the gas station as well as reduce the concentration of harmful substances; And the Company regularly monitors the soil gas of the gas station and the liquid tightness of the oil basin of the fuel dispenser, and sets up sewage treatment and recovery equipment for the car washing machine, which can effectively prevent the occurrence of air, soil and water pollution.

The tractors used by the transportation department and logistics department are inspected by the environmental protection unit and the road supervision unit at the time of purchase, and can be licensed for operation only after the exhaust emission meeting the specified standards. All transportation equipment of the company shall be maintained regularly. When the driver finds any abnormal, it shall be immediately handed over to the maintenance unit for complete repair. After the inspection and meets the specified standards, it can be handed over to the dispatching department for operation. Looking forward to the future, great importance is attached on environmental protection. The Company will strengthen automobile repair and replace old vehicles with new ones, and introduce low-pollution vehicles to comply with the relevant laws and regulations on environmental protection.

The Company has passed the ISO14001 International Environmental Management System Certification and the OHSAS18001 Occupational Health and Safety Assessment System Certification. In order to comply with environmental protection laws and regulations and sustainable operation, the Company is committed to the continuous improvement on the principle of energy conservation, carbon reduction and environmentally friendly.

V. Protective Measures for Working Environment and Personal Safety of Employees

The Company is committed to providing a safe and healthy working environment for its employees, and has established the Department of Safety and Security to promote the integration of various businesses. It has obtained the OHSAS18001 certification, and has used various items to manage the working environment to provide employee health and safety, and regularly inspected related equipment to prevent occupational hazards.

In order to ensure the safety and health of employees, the Company has established the Employee Service Safety and Health Manual, in accordance with the quality policy of "safety, economy, promptness and responsibility" and the safety and health policy of "all employees participating, safety first and disaster

zeroing". The Company will continue to promote safety and health management activities, create a good working environment and provide employees with a safe, comfortable and healthy working environment.

The Company has established relevant regulations and measures and has consistently implemented them to ensure the safety of employees and maintain a good working environment.

The Company has established safety and health policy management procedures.
The Company has established the implementation measures for staff safety and health education and training.
The Company has established the management methods for employee health protection.
The Company has established the management methods for maternity health protection of female employees.
The Company has established the methods for the investigation and handling of occupational hazards and accidents
The Company strictly controls the entry and exit of personnel, and has a monitoring system and gated facilities to ensure the personal safety of employees.
The company conducts an annual medical examination, providing hygiene education information, personal health guidance, and follow-up check-ups

VI. Labor Relations

(I) The Company's employee benefits for studying, training, pension systems and its implementation status as well as labor agreements and measures for preserving employee rights and interests
Employee Benefits Measures and Implementation Situation

The Company attaches considerable importance to the welfare of its employees. It has established an Employees' Benefits Committee in accordance with the regulations, and has various preferential employee welfare measures, including catering, wedding celebrations, funeral rites, birth celebrations, travel and recreation, accident relief, medical assistance for family members, recognition of exemplary employees, birth celebration funds, public service disability compensation, labor insurance, winter and summer uniforms, children's academic scholarships, etc. On January 1, 2018, the Measures for Enforcing the Preferential Benefits for Colleagues was amended to increase the number of preferential benefits applied for such as the wedding ceremony for colleagues, the wedding ceremony for colleagues' children, the birth celebration fund for colleagues, and the funeral rites funds.

Employee development, training and implementation

The Company has a vocational training team, which is responsible for arranging the Company's education and training plan and promoting the digital learning system. Regardless of the new personnel, administrators, operators and supervisors, they participate in further training on schedule.

Retirement system and implementation

The Company's retirement pension system is handled in accordance with the relevant provisions of the Labor Standard Act. The Company makes defined benefit plan contributions to the pension fund account at the Bank of Taiwan that provides pensions for employees upon retirement. Actuaries are also appointed every year to actuary the pension.

The new system of retirement was implemented since July 1, 2005. Under the new system, the Company allocates at least 6% of each employee’s (who select the new system) monthly wages to the labor pension personal account.

Situation of Labor and Management Relations

All rules and regulations regarding labor and management of the Company are in accordance with the Labor Standard Act. Various meetings are held to pay attention to employees' opinions, stabilize employees' lives and establish relatively harmonious labor and management relations through the welfare system.

Measures to safeguard the rights and interests of employees

The Company passed the OHSAS 18001 Occupational Safety and Health Assessment System verification in 2006.

The Company has well-established management rules that specify the rights and obligations of colleagues and the items of benefits, and the specialized personnel unit regularly reviews and revises the benefits in order to safeguard the rights and interests of all employees.

(II) The Company's employee education and training planning and implementation for 2021

In 2021, in accordance with the TTQS training mechanism and PDDRO process plan, taking advantage of the epidemic alleviation, the Company timely held the "micro-behavior and performance execution" course for managers and on-the-job education training for drivers. Unfortunately, the epidemic had been getting worse since May, relevant training courses were pending for in line with remote work and work from home policy of the government and the Company. In the second half of the year, it was better again. Priority was given to the courses that were more urgent to laws, regulations and verifications. In addition to subsidies in combination with the manpower improvement plan, employees were also sent to receive professional courses.

In the prevention of driving accident, 1. the Company actively uses the technology of mobile instant messaging software (Line) to strengthen the real-time processing, combined with itinerant case education and posting announcements of major accidents, so as to teach colleagues the correct law and regulation concept of pedestrian and vehicles. 2. The Company continuously holds ISO and AEO core courses, refine the content and methods of education and training every year, and prepare for the AEO field verification for 2022. 3. In order to accelerate the big data of the operation process system, the Company handles the ERP refined course teaching, followed by epidemic prevention as a peaceful coexistence way with the epidemic. The Company also accelerates the startup meetings and professional courses, by way of combing actual teaching and virtual meeting teaching.

According to the needs of each district, SQAS, AEO and other project verification courses and external training courses for the growth of financial and accounting executives were held. In addition to helping business departments to pass the renewal of certificates, in terms of taxation affairs, the Company was also awarded the "Excellent Business Operator Award" by the National Taxation Bureau. Although the training was affected by the ups and downs of the epidemic, the Company still invested in the training of laws and regulations licenses, and obtained 190 valid initial and re training licenses, with a total cost of NT $1,223,400, 936 trainings and 5573 training hours. The Company made preparations for the business expansion.

Statistics of the Company's Employee Education and Training for Year 2021


Functional Category	Target	Course	Total	Total hours	Total Fee

Operational		1	14	42	33,100
	Senior and middle-level supervisors
management function

Core Professional		10	12	92	66,000
	Intermediate, Grassroots Colleagues
Functions

Grass-roots	Mid-level, grass-roots management	24	261	776	169,600
management functions	colleagues
Functions by		7	189	378	195,000
	Grassroots, management colleagues
Assignment

Regulatory Certificate	Grassroots Supervisors, Drivers,	49	357	4,244	758,500
Functions	Gas Workers
Digital Learning		10	103	41	1,200
	Intermediate, Grassroots Colleagues
Functions

Total		101	936	5,573	1,223,400

(III) The loss caused by labor and management disputes (including labor inspection results in violation of the labor standards, the date of disciplinary action, disciplinary action number, disciplinary action in violation of laws and regulations, content of violation of laws and regulations, content of disciplinary action), during the latest year and up to the printing date of this annual report. The Company shall also disclose the estimated

amount of current and future events and the measures to be taken, and if it cannot be reasonably estimated, it shall state the fact that it cannot be reasonably estimated.

Date of Punishment	Number of Punishment	Violation of the Provisions of the Law	Violation of the Content of the Law	Content of the Punishment
January 22, 2020	GA Labor No. 10900113031	Paragraph 2, Article 59 of the Labor Standards Act	Failure to compensate workers for their original wages due to occupational accidents in accordance with the law	Penalty of NT $20,000
August 26th, 2020	LVA No. 1090203575	Item 1 of Article 6 and Paragraph 2 of Article 43 of Occupational Safety and Health Act	Failure to take necessary facilities to prevent collapse of materials such as bundles in accordance with the law, resulting in occupational injuries caused to employees injured by collapse of the upper layer of paperboard	Penalty of NT $60,000
September 24th, 2020	KCLR No. 10938898200	Article 24 and Article 30 (6) of the Labor Standards Act	Extension hours were not paid in payroll	Penalty of NT $100,000
January 26th 2021	TSC No. 92 Civil Ruling	Paragraph 5, Article 11 of the Labor Standards Act	Request confirmation of the existence of an employment relationship, etc.	Salary of NT $2,290,000
March 20, 2021	Kaohsiung District Court No. 6 Conciliation Record of 2021	Articles 24, 39 and 40 of the Labor Standards Act	Payment for overtime	Settlement of NT $200,000
August 18, 2021	KCLR No. 11036485500	Article 59 of the Labor Standards Act Labor Standards Act Labor Standards Act Labor Standards Act Labor Standards Act	Failure to compensate workers for occupational accidents in accordance with regulations	Penalty of NT $20,000

Response Measures

Shan-Loong has always attached importance to the welfare and interests of employees and actively promoted the relationship between labor and management. It has indeed established working rules and various management regulations in accordance with the Labor Standard Act and relevant laws and regulations. So far, the maintenance of employee rights and interests are good. It is expected that the two parties will continue to maintain their labor relations with good communication and interaction.
The Company has a HR department specializing in labor standard matters, and the estimated amount that may occur in the future is 0.
VII. Information Security Management

VIII. Important Contract

Type of
	Party	Contract Duration	Main content	Restrictions
Contract


			Automobile Gas Station Supply
Oil Contract	CPC Oil	2021.08.01~2028.07.31		None
			Alliance Contract



			Purchase and Sales Contract of
Oil Contract	Formosa Plastics	2021.08.01~2028.07.31		None
			Oil Products for Gas Station

Chapter 6. Financial Summary

I. Five-Year Financial Summary

(I) Condensed Balance Sheet and Comprehensive Income Statement

Abbreviated Balance Sheets

(In Thousands of New Taiwan Dollars)

FY Item	FY Item	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	As of the end of the current year ended March 31, 2022 Financial Information
		2017	2018	2019	2020	2021
Current Assets		2,091,682	2,375,638	2,408,667	2,288,526	2,867,370	Not Applicable
Property, plant, and equipment		3,165,536	3,243,356	3,498,819	3,725,365	3,609,511
Intangible assets		1,812	-	-	-	-
Other assets		1,910,473	1,818,049	3,030,250	4,029,108	3,876,316
Total assets		7,169,503	7,437,043	8,937,736	10,042,999	10,353,197
Current Liabilities	Before distribution	2,319,852	2,444,247	2,398,301	2,356,421	3,494,290
	After distribution	2,662,932	2,663,898	2,645,408	2,658,441	3,545,861
Non-current liabilities		696,902	907,535	2,337,928	2,410,834	1,402,124
Liabilities Total	Before distribution	3,016,754	3,351,782	4,736,229	4,767,255	4,896,414
	After distribution	3,359,834	3,571,433	4,983,336	5,069,275	4,842,123
Equity attributable to shareholders of the parent company		3,988,691	3,955,437	4,021,250	5,086,188	5,256,110
Share Capital		1,337,913	1,371,389	1,372,818	1,372,818	1,372,818
Capital Surplus		540,446	573,902	577,945	580,381	583,359
Retained Earnings	Before distribution	1,722,054	1,610,021	1,676,640	1,790,142	1,944,149
	After distribution	1,378,974	1,390,370	1,429,533	1,488,122	1,600,945
Other equity		420,141	431,988	425,710	1,374,710	1,387,647
Treasury shares		(31,863)	(31,863)	(31,863)	(31,863)	(31,863)
Non-controlling Interests		164,058	129,824	180,257	189,556	200,673
Equity Total	Before distribution	4,152,749	4,085,261	4,201,507	5,275,744	5,456,783
	After distribution	3,809,669	3,865,610	3,954,400	4,973,724	4,912,906

Note: As of the printing date of the annual report, it has not been approved by the Board of Directors and audited by CPAs, so it is not applicable.

Abbreviated Consolidated Income Statement

(In Thousands of New Taiwan Dollars)

Year Item	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	As of the end of the current year ended March 31 Financial Information
	2017	2018	2019	2020	2021
Operating income	17,028,718	19,016,293	18,012,657	15,955,500	18,812,163	Not Applicable
Grossoperating profit	1,488,973	1,464,241	1,480,489	1,743,676	1,785,757
Operating profitand loss	295,554	216,218	173,547	387,149	375,611
Non-operating income and expenses	347,303	97,454	281,577	75,992	138,456
Net profitbeforetax	642,857	313,672	455,124	463,141	514,067
Current netprofitof continuing business unit	551,147	236,102	347,900	379,889	424,560
Loss from discontinued operations	-	-	-	-	-
Net profit for the current period	551,147	236,102	347,900	379,889	424,560
OtherComprehensive Income
	335147	38989	13119	939019	55521
	,	(,)	(,)	,	,
Totalcomprehensive income for the period	886,294	197,113	334,781	1,318,908	480,081
Net income attributable to shareholders of the parent company	542,477	236,467	290,953	371,334	415,507
Net income attributable to non- controllinginterests	8,670	(365)	56,947	8,555	9,053
Total comprehensive income attributable to owners of the parent	879,287	204,021	284,348	1,309,609	468,964
Totalcomprehensive income attributable to non-controlling interests	7,007	(6,908)	50,433	9,299	11,117
Earningsper share	4.24	1.76	2.14	2.73	3.06

Note: As of the printing date of the annual report, it has not been approved by the Board of Directors and audited by CPAs, so it is not applicable.

Abbreviated Balance Sheet for Parent Company Only

(In Thousands of New Taiwan Dollars)

FY Item	FY Item	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	Financial information for the last five years	As of the end of the current year ended March 31 Financial Information (Reviews)
						2021
		2017	2018	2019	2020

Current Assets		1,448,609	1,749,284	1,586,592	1,329,513	1,564,227
Property, plant, and equipment		3,121,109	3,214,769	3,476,428	3,706,229	3,577,741
Intangible assets		-	-	-	-	-
Other assets		2,279,232	2,183,324	3,497,550	4,590,309	4,652,061
Total assets		6,848,950	7,147,377	8,560,570	9,626,048	9,794,029
Current Liabilities	Before distribution	2,175,968	2,306,109	2,236,706	2,195,190	3,202,657
	After distribution	2,519,048	2,525,760	2,483,813	2,497,219	-
Non-current liabilities		684,291	885,831	2,302,614	2,344,670	1,335,262
Liabilities Total	Before distribution	2,860,259	3,191,940	4,539,320	4,539,860	4,537,919	Not Applicable
	After distribution	3,203,339	3,411,591	4,786,427	4,841,880	-
Total equity		3,988,691	3,955,437	4,021,250	5,086,188	5,256,110
Share Capital		1,337,913	1,371,389	1,372,818	1,372,818	1,372,818
Capital Surplus		540,446	573,902	577,945	580,381	583,359
Retained Earnings	Before distribution	1,722,054	1,610,021	1,676,640	1,790,142	1,944,149
	After distribution	1,378,974	1,390,370	1,429,533	1,488,122	-
Other equity		420,141	431,988	425,710	1,374,710	1,387,647
Treasury shares		(31,863)	(31,863)	(31,863)	(31,863)	(31,863)
Equity Total	Before distribution	3,988,691	3,955,437	4,021,250	5,086,188	5,256,110
	After distribution	3,645,611	3,735,786	3,774,143	4,784,168	-

Abbreviated Comprehensive Income Statements, Parent Company only

(In Thousands of New Taiwan Dollars)

Year Item	Financial information in the most recent five years	Financial information in the most recent five years	Financial information in the most recent five years	Financial information in the most recent five years	Financial information in the most recent five years	Financial information for the current year ended March 31 (reviewed)
	2017	2018	2019	2020	2021
Operating revenue	15,905,976	18,063,949	16,981,871	15,076,884	17,237,755	Not Applicable
Gross profit	1,392,315	1,417,458	1,426,004	1,661,456	1,664,787
Operating profit (loss)	227,020	196,841	151,100	325,986	292,996
Non-operating revenue and expenses	389,864	109,472	198,903	111,920	190,003
Net income before tax	616,884	306,313	350,003	437,906	482,999
Net income from continuing operations	542,477	236,467	290,953	371,334	415,507
Loss from discontinued operations	-	-	-	-	-
Net profit for the period	542,477	236,467	290,953	371,334	415,507
Other Comprehensive Income	336,810	(32,446)	(6,605)	938,275	53,457
Total comprehensive income for the period	879,287	204,021	284,348	1,309,609	468,964
Net income attributable to shareholders of the parent company	N/A	N/A	N/A	N/A	N/A
Net income attributable to non-controlling interests	N/A	N/A	N/A	N/A	N/A
Total comprehensive income attributable to owners of the parent	N/A	N/A	N/A	N/A	N/A
Total comprehensive income attributable to non-controlling interests	N/A	N/A	N/A	N/A	N/A
Earnings per Share	4.24	1.76	2.14	2.73	3.06

(II) Names of auditing CPAs of the most recent five years and their audit opinions


Item	2017	2018	2019	2020	2021


	Lo, Jui-Lan	Lo, Jui-Lan	Lo, Jui-Lan	Lo, Jui-Lan	Lo, Jui-Lan
Certifying CPAs

	Wang, I-WEN	Wang, I-WEN	Wang, I-WEN	Au, Yiu-Kwan	Au, Yiu-Kwan

			An Unmodified
			Opinion with a
Opinions on the	Unqualified	Unqualified		Unqualified	Unqualified
			Paragraph of
accounts	opinion	opinion		opinion	opinion
			Other Stressed

			Matters

II. Financial analysis in the most recent five years

(I) Financial analysis of Shan-Loong Company and its subsidiaries

	FY	Financial information in the most recent five years	Financial information in the most recent five years	Financial information in the most recent five years	Financial information in the most recent five years	Financial information in the most recent five years	As of the end of the
							current year ended

Item		2017	2018	2019	2020	2021	March 31

	Ratio of liabilities to assets	42	45	53	47	47
Financial

structure	Ratio of long-term capital to
		153	154	187	206	190
	property,plant, and equipment


	Current ratio	90	97	100	97	82


Solvency	Quick ratio	76	88	89	87	74


	Times interest earned ratio	45	27	15	15	18


	Receivables turnover (times)	17.09	19.68	19.13	18.03	20.69


	Average days for cash receipts	21	19	19	20	18


	Inventory turnover ratio (times)	59.20	81.59	79.05	50.15	58.62

Operation
	Payables turnover ratio (times)	10.27	10.53	10.12	9.78	11.54
performance


	Average days for sale of goods	6	4	5	7	6

	Property, plant and equipment
		6.25	5.93	5.34	4.42	5.13
	turnover rate (times)						Not

							Applicable
	Total asset turnover ratio (times)	2.38	2.56	2.02	1.59	1.82



	Return on assets (%)	8	3	5	4	4


	Return on equity (%)	15	6	8	8	8

	Ratio of income before tax to
Profitability		48	23	33	33	37
	paid-incapital(%)


	Net profit ratio (%)	3	1	2	2	2


	Earnings per share (NT$)	4.24	1.76	2.14	2.73	3.06


	Cash flow ratio (%)	24	25	(2)	53	38
Cash


flows	Cash flow adequacy ratio	81	73	61	84	102
from:

	Cash re-investment ratio (%)	6	6	(5)	18	20



	Degree of operating leverage	9.02	11.72	14.98	7.00	9.44
Leverage

Degree	Degree of financial leverage
		1.05	1.06	1.22	1.09	1.09
	(DFL)

Please explain the reasons for the changes in the financial ratios in the last two years: (increase or decrease up to 20%) 1. Cash flow ratio: due to the increase in net cash flow from operating activities in the current period. 2. Operatingleverage: Mainlydue to the increase in operatingincome in the currentperiod.

(II) Financial analysis of Shan-Loong Company

Year	Year						Financial
		Financial information in the most recent five years
							information
							for the current
							year ended
Item		2017	2018	2019	2020	2021
							March 31
							(reviewed)

	Ratio of liabilities to assets	42	45	53	47	46
Financial

structure	Ratio of long-term capital to
		150	151	182	200	184
	property,plant, and equipment


	Current ratio	67	76	71	61	49


Solvency	Quick ratio	52	67	59	50	41


	Times interest earned ratio	43	26	12	15	17


	Receivables turnover (times)	19.99	23.36	22.39	20.95	23.40


	Average days for cash receipts	18	16	16.30	17.42	15.60


	Inventory turnover ratio (times)	60	103	100	69	78

Operation	Payables turnover ratio (times)	10.06	10.16	9.56	9.25	11
performance

	Average days for sale of goods	6.10	3.56	3.65	5.32	4.68


	PP&E turnover ratio (times)	5.95	5.70	5.08	4.20	4.73
							N/A


	Total asset turnover ratio (times)	2.32	2.53	1.98	1.57	1.76


	Return on Assets	8	4	4	4	5


	Return on equity	15	6	7	8	8

	Ratio of income before tax to
Profitability		46	22	26	32	35
	paid-in capital


	Profit margin	3	1	2	2	2


	Earnings per share (NT$)	4.24	1.76	2.14	2.73	3.06


	Cash Flow Ratio	22	33	7	53	28


Cash flow	Cash flow adequacy ratio	73	72	68	90	94


	Cash re-investment ratio	4	7	(1)	13	9


	Degree of operating leverage	6.79	8.03	10.38	5.62	6.73
Leverage
	Degree of financial leverage
		1.07	1.07	1.26	1.11	1.12
	(DFL)

Please explain the reasons for the changes in the financial ratios in the last two years: (increase or decrease up to 20%) 1. Turnover rate of accounts payable (times): due to the increase of sales cost in the current period. 2. Cash flow ratio: Due to decrease in net cash flow from operating activities in the current period.

Financial structure

(1) Liability to asset ratio = Total liabilities/total assets.

(2) Long-term capital as a proportion of PP&E = (Total equities + non-current liabilities)/ Net value of PP&E.

Solvency
(1) Current ratio = Current assets/current liabilities
(2) Quick ratio = (Current assets - inventory - prepaid expenditures)/current liabilities.
(3) Times interest earned ratio = Income before income tax and interest expenditure/interest expenditures for the period.
Operation performance
(1) Receivables turnover rate (including notes receivable resulting from accounts receivable and business operations) = Net sales/average accounts receivable in various periods (including notes receivable resulting from accounts receivable and business operations).
(2) Average collection days = 365/receivables turnover ratio.
(3) Inventory turnover = Sales expense/average inventory value.
(4) Payables turnover ratio (including notes payable resulting from accounts payable and business operations) = Cost of sales/average accounts payable in various periods (including notes payable resulting from accounts payable and business operations).
(5) Average sales days = 365/inventory turnover ratio.
(6) PP&E turnover ratio = Net sale/average PP&E value.
(7) Total asset turnover ratio = Net sales/average total PP&E value.
Profitability
(1) Return on assets ＝ [Net profit after taxes + interest expense (1– Tax rate)]/average total assets.
(2) Return on equity = Net gain (loss) after tax/average equity value.
(3) Net profit ratio = Net gain (loss) after tax/net sales.
(4) Earnings per share = (Gain (loss) attributable to the shareholders of the parent company - dividend for preferred shares)/weighted average of issued shares
Cash flows from:
(1) Cash flow ratio = Net cash from business activities/current liabilities.
(2) Net cash flow adequacy ratio = Net cash flow for business activities for the last 5 years/ (Capital expenses + Additional inventory sum + Cash dividend) for the past 5 fiscal years.
(3) Cash re-investment ratio = (Net cash flow from business activities - cash dividend)/ (gross amount of PP&E + long-term investments + other non-current assets + business capital).
Leverage
(1) Degree of operating leverage (DOL) = (Net sales - variable operating cost and expense)/operating income
(2) Degree of Financial Leverage (DFL) = Operating profit/ (operating profit - interest expenditures).

III. 2021 Audit Committee's Review Report

Shan-Loong Transportation Co., Ltd. Audit Committee's Review Report

The Board of Directors prepared and reported the Company's Annual Financial Statements for Year 2021, including the Business Report, Parent Company Only Financial Report, Consolidated Financial Report and Earnings Distribution Proposal, etc., which were reviewed together by the Audit Committee and found to be true. The Parent Company Only Financial Report and the Consolidated Financial Report have also been jointly verified by Lo, Jui-Lan and Au, Yiu-Kwan, two certified public accountants of KPMG, Taiwan. In accordance with the provisions of paragraph 4, Article 14 of the Securities and Exchange Law and Article 219 of the Company Act, please examine together with the audit report.

Sincerely

Annual Meeting of Shareholders of the Company

Shan-Loong Transportation Co., Ltd. Convener of the Audit Committee: Yao-Ming Huang March 7, 2022

IV. Financial Report of the Most Recent Year

Independent Auditors’ Report

To the Board of Directors of Shan-Loong Transportation Co., Ltd.:

Opinion

We have audited the consolidated financial statements of Shan-Loong Transportation Co., Ltd. and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2021 and 2020, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2021 and 2020, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“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 Certification of Financial Statements by Certified Public Accountants, and the 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 Group in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. 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. The key audit matters we judged shall be presented in the financial report as follows:

1. Revenue recognition

Please refer to note (4)(n) of the consolidated financial statements for the accounting policy of revenue recognition. Information regarding the revenue are shown in note (6)(q) of the consolidated financial statements.

4-1

Description of key audit matter:

The main activities of the Group include freight transportation, container trucking, truck repair and maintenance, gas station, and import and export agent. Revenue recognition is one of the significant matters of the consolidated financial statements. The amounts and changes of sales revenue may affect the users' understanding of the entire financial statements. Therefore, the revenue recognition test is one of the significant assessment items in our audit procedures.

Audit Procedures:

Our main audit procedures for the aforementioned key audit matters include testing the Group's controls surrounding revenue recognition in the sale and receipt cycle, including reconciliations between the general ledger and sales system; performing the detailed test of relevant vouchers, as well as assessing whether the Group’s timing on revenue recognition and the amounts recognized are in accordance with the related standards.

Other Matter

Shan-Loong Transportation Co., Ltd. has prepared its parent-company-only financial statements 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 Consolidated Financial Statements

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

In preparing the consolidated financial statements, management is responsible for assessing the Group’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 Group or to cease its operations, or has no realistic alternative but to do so.

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’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.

4-2

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

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

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

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.

4-3

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 of the current period 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 Jui-Lan Lo and Yiu-Kwan Au.

KPMG

Taipei, Taiwan (Republic of China) March 7, 2022

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance, and cash flows in accordance with the 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 accepted and applied in the Republic of China.

The independent auditors ’ audit report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors ’ audit report and consolidated financial statements, the Chinese version shall prevail.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2021 and 2020

(expressed in thousands of New Taiwan Dollars)

December 31, 2021 Amount % $ 1,553,286 15 - - 649,969 6 316,727 3 78,793 1 223,277 2 45,318 -	December 31, 2021	December 31, 2021	December 31, 2021
	Amount	%	Amount
2,867,370 27
2,446,133 24 71,325 1 3,609,511 35 1,075,528 10 37,052 - 246,278 3
	3,494,290 33 2,356,421 23
	227,049 2 1,024,700 10 164,292 2 168,288 2 890,087 9 1,102,605 11 102,434 1 97,904 1 18,262 - 17,337 -
	1,402,124 14 2,410,834 24
7,485,827 73
	4,896,414 47 4,767,255 47
$ 10,353,197 100
	1,372,818 13 1,372,818 14 583,359 6 580,381 6 1,944,149 19 1,790,142 18 1,387,647 13 1,374,710 14 (31,863) - (31,863) (1)
	5,256,110 51 5,086,188 51
	200,673 2 189,556 2
	5,456,783 53 5,275,744 53
	$ 10353197 100 10042999 100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Consolidated Statement of Comprehensive Income

For the years ended December 31, 2021 and 2020

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

2021	% 100 91	2020	% 100 89
Amount $ 18,812,163 17,026,406		Amount 15,955,500 14,211,824
1,785,757	9	1,743,676	11
535,529 874,617 -	3 4 -	540,683 815,859 (15)	3 5 -
1,410,146	7	1,356,527	8
375,611	2	387,149	3
66,468 4,993 (30,987) 2,601 4,829 105,030 343 (14,821)	- - - - - 1 - -	59,642 (3,145) (32,587) - 4,519 70,560 (7,376) (15,621)	- - - - - - - -
138,456	1	75,992	-
514,067 89,507	3 1	463,141 83,252	3 1
424,560	2	379,889	2
(5,890) 64,685 (10,329) (3,699)	- - - -	(13,406) 1,021,041 - 70,912	- 6 - -
52,165	-	936,723	6
3,679 323	- -	2,684 388	- -
3,356	-	2,296	-
55,521	-	939,019	6
$ 480,081	2	1,318,908	8
$ 415,507 9,053	2 -	371,334 8,555	2 -
$ 424,560	2	379,889	2
$ 468,964 11,117	2 -	1,309,609 9,299	8 -
$ 480,081	2	1,318,908	8
$	3.06		2.73
$	3.04		2.72

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Consolidated Statement of Changes in Equity

For the years ended December 31, 2021 and 2020

(expressed in thousands of New Taiwan Dollars)

						Equity	attributable to owners of parent	attributable to owners of parent	attributable to owners of parent
									Other equity
									Unrealized gains
									(losses) on
								Exchange	financial assets
								differences on	measured at fair
					Retained earnings			translation of	value			Total equity
					Unappropriated			foreign	through other			attributable to
		Ordinary	Capital	Legal	retained	Total retained		financial	comprehensive	Total other	Treasury	owners of	Non-controlling
		shares	surplus	reserve	earnings	earnings		statements	income	equity	shares	parent	interests	Total equity
Balance on January 1, 2020	$	1,372,818	577,945	415,917	1,260,723	1,676,640		(24,781)	450,491	425,710	(31,863)	4,021,250	180,257	4,201,507
Appropriation and distribution of retained earnings:
Legal reserve appropriated		-	-	29,096	(29,096)	-		-	-	-	-	-	-	-
Cash dividends on ordinary share		-	-	-	(247,107)	(247,107)		-	-	-	-	(247,107)	-	(247,107)
		-	-	29,096	(276,203)	(247,107)		-	-	-	-	(247,107)	-	(247,107)
Profit (loss) for the year ended December 31, 2020		-	-	-	371,334		371,334	-	-	-	-	371,334	8,555	379,889
Other comprehensive income (loss) for the year ended December 31, 2020		-	-	-	(10,725)		(10,725)	1,552	947,448	949,000	-	938,275	744	939,019
Total comprehensive income (loss) for the year ended December 31, 2020		-	-	-	360,609		360,609	1,552	947,448	949,000	-	1,309,609	9,299	1,318,908
Adjustments of capital surplus for company's cash dividends received by
subsidiaries		-	2,436	-	-	-		-	-	-	-	2,436	-	2,436
Balance on December 31, 2020		1,372,818	580,381	445,013	1,345,129	1,790,142		(23,229)	1,397,939	1,374,710	(31,863)	5,086,188	189,556	5,275,744
Appropriation and distribution of retained earnings:
Legal reserve appropriated		-	-	36,061	(36,061)	-		-	-	-	-	-	-	-
Cash dividends on ordinary share		-	-	-	(302,020)	(302,020)		-	-	-	-	(302,020)	-	(302,020)
		-	-	36,061	(338,081)	(302,020)		-	-	-	-	(302,020)	-	(302,020)
Profit (loss) for the year ended December 31, 2021		-	-	-	415,507		415,507	-	-	-	-	415,507	9,053	424,560
Other comprehensive income (loss) for the year ended December 31, 2021		-	-	-	(4,712)		(4,712)	1,292	56,877	58,169	-	53,457	2,064	55,521
Total comprehensive income (loss) for the year ended December 31, 2021		-	-	-	410,795		410,795	1,292	56,877	58,169	-	468,964	11,117	480,081
Adjustments of capital surplus for company's cash dividends received by
subsidiaries		-	2,978	-	-	-		-	-	-	-	2,978	-	2,978
Disposal of investments in equity instruments designated at fair value
through other comprehensive income		-	-	-	45,232		45,232	-	(45,232)	(45,232)	-	-	-	-
Balance on December 31, 2021	$	1,372,818	583,359	481,074	1,463,075	1,944,149		(21,937)	1,409,584	1,387,647	(31,863)	5,256,110	200,673	5,456,783

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Consolidated Statement of Cash Flows

For the years ended December 31, 2021 and 2020

(expressed in thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Expected credit losses (gains) Net profit on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of loss of associates and joint ventures accounted for using equity method Loss (gain) on disposal of property, plant and equipment and others Changes in operating assets and liabilities: Decrease (increase) in financial assets mandatorily measured at fair value through profit or loss Decrease (increase) in notes and accounts receivable Decrease (increase) in inventories Decrease (increase) in other current financial assets Decrease (increase) in other current assets Increase (decrease) in notes and accounts payable Increase (decrease) in provisions Increase (decrease) in other payables and other current liabilities Increase (decrease) in net defined benefit liabilities Increase (decrease) in contract liabilities Total adjustments Cash inflow (outflow) generated from (used in) operations Dividends received Interest paid Interest received Income taxes paid Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Increase (decrease) in short-term borrowings Proceeds from long-term borrowings Repayments of long-term borrowings Increase (decrease) in guarantee deposit received Payment of lease liabilities Cash dividends paid Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2021 $ 514,067	2020 463,141
	491,023 - (6,487) 30,987 (4,829) (105,030) (2,601) (6,330)	492,953 (15) (6,090) 32,587 (4,519) (70,560) - 7,367
	396,733	451,723
	355,541 (115,099) (29,672) (10,675) (11,063) 221,628 (7,129) 30,455 (1,360) 8,238	327,652 66,808 (1,373) (14,451) 46,442 (177,048) 12,897 77,711 (19,659) 455
	440,864	319,434
	837,597	771,157
	1,351,664 105,633 (30,987) 4,829 (105,361)	1,234,298 70,560 (32,587) 4,519 (22,026)
	1,325,778	1,254,764
	(7,939) - (232,627) 86,125 (15,003)	- 66,880 (514,409) 12,264 (1,861)
	(169,444)	(437,126)
	40,000 200,000 (100,000) 925 (234,156) (299,042)	(10,000) 949,000 (989,300) (999) (229,063) (244,671)
	(392,273)	(525,033)
	2,817	3,344
	766,878 786,408	295,949 490,459
	$ 1,553,286	786,408

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese) SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

Shan-loong Transportation Co., Ltd. (the “Company”) was incorporated in April 6, 1976 as a company limited by shares and registered under the Ministry of Economic Affairs, R.O.C. The address of the Company’s registered office is 1F, No. 1-2, Sec. 1, Minsheng Rd., Banqiao Dist., New Taipei City. The consolidated financial statements comprise the Company and its subsidiaries (together referred to as the "Group"). The major business activities of the Group are freight transportation, container trucking, truck repair and maintenance, gas station, and import and export agent, etc. Furthermore, one of the Group entities engages in the investing activities. Please refer to note 4(c)(ii) for related information.

(2) Approval date and procedures of the consolidated financial statements

These consolidated financial statements were authorized for issue by the Board of Directors on March 7, 2022.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2021:

Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”
Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”
(b) The impact of IFRS issued by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its consolidated financial statements:

Amendments to IAS 16 “Property, Plant and Equipment － Proceeds before Intended Use”
Amendments to IAS 37 “Onerous Contracts － Cost of Fulfilling a Contract”
Annual Improvements to IFRS Standards 2018–2020
Amendments to IFRS 3 “Reference to the Conceptual Framework”

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group does not expect the following new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting Estimates”
Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(4) Summary of significant accounting policies:

The significant accounting policies presented in the consolidated financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the consolidated financial statements.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, R.O.C. (hereinafter referred to as “IFRS endorsed by the FSC”).

(b) Basis of preparation

(i) Basis of measurement Except for the following significant accounts, the consolidated financial statements have been prepared on a historical cost basis:
1) Financial instruments at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value; and
3) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in note (4)(p).
(ii) Functional and presentation currency The functional currency of each Group entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollar, which is the Company’s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Basis of consolidation
(i) Principles of preparation of the consolidated financial statements
- The consolidated financial statements comprise the Company and subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

(ii) List of subsidiaries in the consolidated financial statements:

Name of investor	Name of subsidiary	Principal activity	Shareholding	Shareholding	Note
			December 31, 2021	December 31, 2020
The Company The Company The Company The Company Shan-Loong International 〃 Long Yun Loong De	Shan Loong Investment Co., Ltd. (Shan-Loong Investment) Shan Loong International & Customs Broker Co., Ltd. (Shan Loong Customs Broker) Shan Loong Motors Co., Ltd. (Shan Loong Motors) Shan-Loong International holdings Co., Ltd. (Shan-Loong International) Long Yun Investment Holding Co, Ltd. (Long Yun) Loong De Investment Co., Ltd. (Loong De) Shanghai Shan Tong Logistic Co., Ltd. (Shanghai Shan Tong) Shan-Loong Logistics Co., Ltd.	Investing activities Import and export agent services Truck repair, maintenance and sales Investing activities Investing activities Investing activities Truck freight transportation and warehousing Warehousing, freight transportation and related agent	100% 100% 100% 100% 100% 100% 60% 51%	100% 100% 100% 100% 100% 100% 60% 51%	Note1

Note 1: The subsidiary was incorporated in September 2020.

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Foreign currencies

(i) Foreign currency transaction

Transactions in foreign currencies are translated into the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of translation. Exchange differences are recognized in profit or loss except for an investment in equity securities designated as at fair value through other comprehensive income, which are recognized in other comprehensive income.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(e) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

(i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

(i) It is expected to be settled in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.
(f)
Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the consolidated statement of cash flows.

(g) Financial instruments

Accounts receivable and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A accounts receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

‧it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
‧its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

‧it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
‧its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Group’s right to receive payment is established.

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

4) Business model assessment

The Group makes an assessment of the objective of the business model in which a financial asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

‧the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;
‧how the performance of the portfolio is evaluated and reported to the Group’s management;
‧the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
‧the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, and are consistent with the Group’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

5) Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial assets on initial recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:

‧contingent events that would change the amount or timing of cash flows;
‧terms that may adjust the contractual coupon rate, including variable rate features;
‧prepayment and extension features; and
‧terms that limit the Group’s claim to cash flows from specified assets (e.g. non-recourse features)
6) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivables, guarantee deposit paid and other financial assets), and contract assets.

The Group measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

‧bank balances and other receivables for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for accounts receivable and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment as well as forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 60 days past due.

The Group considers a financial asset to be in default when the financial asset is more than 90 days past due or the debtor is unlikely to pay its credit obligations to the Group in full.

100

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings’. The counterparties of the time deposits held by the Group are the financial institutions with investment grade credit ratings. Therefore, the credit risk is considered to be low.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

‧significant financial difficulty of the borrower or issuer;

‧a breach of contract such as a default or being overdue;
‧the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
‧it is probable that the borrower will enter bankruptcy or other financial reorganization; or
‧the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

101

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

7) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(ii) Financial liabilities and equity instruments

1) Classification of debt or equity

Debt and equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

4) Compound financial instruments

Compound financial instruments issued by the Group comprise convertible bonds that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value.

102

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The liability component of compound financial instruments is initially recognized at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognized at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured.

Interest related to the financial liability is recognized in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognized.

5) Financial liabilities Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

6) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

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

7) Offsetting of financial assets and liabilities Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes other costs incurred in bringing them to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

103

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Investment in associates

Associates are those entities in which the Group has significant influence, but not control or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method and are recognized initially at cost, whose investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition, less any accumulated impairment losses.

The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the associates, after adjustments, in order to be consistent with the Group’s accounting policies, from the date on which significant influence commences until the date on which significant influence ceases.

Gains and losses resulting from transactions between the Group and its associate are recognized only to the unrelated Group’s interests in the associate. When the Group’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

(j) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

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

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

(iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

104

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

1) Buildings: 31~56 years
2) Building improvements: 1~27 years
3) Gasoline equipment: 1~21 years
4) Transportation equipment: 5~19 years
5) Miscellaneous equipment: 1~21 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(k) Lease

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a lessee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

1) fixed payments, including in-substance fixed payments;
2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

105

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

1) there is a change in future lease payments arising from the change in an index or rate; or
2) there is a change of its assessment on whether it will exercise an extension or termination option; or
3) there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

As a practical expedient, the Group elects not to assess whether all rent concessions that meets all the following conditions are lease modifications or not:

1) the rent concessions occurring as a direct consequence of the covid-19 pandemic;
2) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
3) any reduction in lease payments that affects only those payments originally due on, or before, June 30, 2021; and
4) there is no substantive change into other terms and conditions of the lease.

In accordance with the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

106

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) As a lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

(l) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

107

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(m) Provisions

A provision is recognized if, as a result of a past event, the Group has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

In accordance with the Company’s applicable legal requirements, a provision for site restoration in respect of contaminated land and the related expense are recognized when the land is contaminated.

(n) Revenue recognition
(i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below.

1) Sale of goods

The Group sells gas to clients and consumers. The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.

A receivable is recognized when the goods are delivered as this is the point in time that the Group has a right to an amount of consideration that is unconditional.

2) Truck repair, freight transportation and customs broker services

The Group provides truck repair, freight transportation and customs broker services. Revenue from providing services is recognized in the accounting period in which the services are rendered.

3) Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

(o) Government grants

The government grants are recognized as a deduction of the cost of assets if there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant; they are then recognized in profit of loss over the life of a depreciable asset as a reduced depreciation expense.

108

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(p) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plans

The Group’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Termination benefits

Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer of those benefits and when the Group recognizes costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

(iv) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

109

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(q) Income taxes

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

The Group has determined that interest and penalties related to income taxes, including uncertain tax treatment, do not meet the definition of income taxes, and therefore accounted for them under IAS37.

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

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

(i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
(ii) temporary differences related to investments in subsidiaries and joint arrangements and it is probable that they will not reverse in the foreseeable future; and
(iii) taxable temporary differences arising on the initial recognition of goodwill.

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

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

110

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

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

(r) Earnings per share

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

(s) Operating segments

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

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

In preparing these consolidated financial statements, management has made judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

There are no critical judgments in applying accounting policies that have significant effects on the amounts recognized in the consolidated financial statements.

Furthermore, there are no assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

111

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Cash on hand Checking accounts and demand deposits Time deposits	December 31, 2021 $ 13,287 1,384,489 155,510	December 31, 2020 19,268 634,877 132,263 786,408
	$ 1,553,286

Please refer to note (6)(s) for the exchange rate risk, interest rate risk, and sensitivity analysis of the financial assets of the Group.

(b) Financial assets at fair value through profit or loss

Mandatorily measured at fair value through profit or loss: Non-derivative financial assets Structured deposits	December 31, 2021 $ -	December 31, 2020 349,054

(i) Financial products (structured deposits) held by the Group, which were recognized as financial assets mandatorily measured at fair value through profit or loss, because the financial assets are held within a business model whose objective is not achieved by collecting contractual cash flows.

As of December 31, 2020, the Group held the financial products issued by the Agricultural Bank of China Limited.

(ii) For market risk of the Group, please refer to note (6)(s).

(iii) The Group had not been pledged any financial assets as collateral for its borrowings.

Equity investments at fair value through other comprehensive income: Stocks listed on domestic markets Stocks unlisted on domestic markets Stocks unlisted on foreign markets	December 31, 2021 $ 2,059,749 181,579 204,805	December 31, 2020 1,983,893 211,322 255,068
	$ 2,446,133	2,450,283

112

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) The Group designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term strategic purposes.
(ii) Base on the resolution of the stockholders' meeting held on April 20, 2020, Chung Loong Paper Holdings Limited, which the Group holds as equity investments at fair value through other comprehensive income, decided to reduce 40% capital by cash. In April, 2020, the Group received all the refund capital amounting to $66,880 (US$2,232 thousand) in proportion to the percentage of ownership in the investment. The Group assessed the transaction mentioned above was the return of the original investment cost and decreased the carrying amount of the investment.
(iii) In April, 2021, the Group acquired some part of shares of Ko Loong Industry Co., Ltd. (Ko Loong), and the percentage of ownership increased to 19.75%. The Group assessed that it had significant influence over Ko Loong. Therefore, the Group derecognized the assets, which were accounted for under the financial assets measured at fair value through other comprehensive income, at the fair value amounted to $76,774. The gain on disposal of the investments amounting to $45,232 was transferred to retained earnings from other equity. There were no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments as of for the year ended December 31, 2020.
(iv) For market risk of the Group, please refer to note (6)(s).
(v) The Group had not been pledged any financial assets as collateral for its borrowings.
(d) Notes and accounts receivable (including related parties)

Notes receivable Accounts receivable Less: allowance for impairment Notes and accounts receivable, net Notes and accounts receivable due from related parties, net	December 31, 2021 $ 47,348 922,417	December 31, 2020 32,545 822,121
	969,765 (3,069)	854,666 (3,069)
	$ 966,696	851,597
	$ 649,969	546,632
	$ 316,727	304,965

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information, including the reasonable prediction of historical credit loss experience and the future economic situation. As of December 31, 2021 and 2020, the loss allowance provisions were determined as follows:

113

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2021	December 31, 2021	December 31, 2021	Loss allowance provision - 76 124 - - 2,145 664
Gross carrying amount Notes receivable Accounts receivable $ 37,957 902,916 6,804 3,296 2,587 3,733 - 27 - 23 - 2,381 - 10,041	Weighted-average loss rate
	Notes receivable - 1% 5% 10% 10% 10% 100%	Accounts receivable
		- 1% 60% 60% 80% 90% 100%
$ 47,348 922,417			3,009

December 31, 2020	December 31, 2020	December 31, 2020	Loss allowance provision - 79 99 57 1,481 513 664
Gross carrying amount Notes receivable Accounts receivable $ 21,943 807,673 8,043 253 1,984 1 575 - - 1,851 - 10,690 - 1,653	Weighted-average loss rate
	Notes receivable	Accounts receivable
	-% 1% 5% 10% 10% 10% 100%	-% 1% 60% 60% 80% 90% 100%
$ 32,545 822,121			2,893

The movements in the allowance for notes and accounts receivable were as follows:

Balance on January 1 Amounts written off Impairment losses reversed Balance on December 31	2021 $ 3,069 - - $ 3,069	2020
		3,310 (226) (15)
		3,069

As of December 31, 2021 and 2020, the Group did not pledge any notes and accounts receivable as collateral for its borrowings.

(e) Other current financial assets

Other receivables Less: loss allowance Refundable deposits-current	December 31, 2021 $ 89,478 (13,100)	December 31, 2020 78,803 (13,100) 65,703 - 65,703
	76,378 2,415
	$ 78,793

For further credit risk information, please refers to note (6)(s).

114

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Inventories

Premium Diesel Unleaded Gasoline #92 Unleaded Gasoline #95 Unleaded Gasoline #98 By-product and other	December 31, 2021 $ 64,801 48,328 67,696 28,427 14,025	December 31, 2020 52,877 44,618 58,360 28,151 9,599 193,605
	$ 223,277

The Group recognized as cost of sales amounted to $12,258,636 and $9,706,790, respectively, for the years ended December 31, 2021 and 2020.

The gain on physical inventory amounted to $40,492 and $32,082, respectively, which was recorded as cost of sales for the years ended December 31, 2021 and 2020.

As of December 31, 2021 and 2020, the Group did not pledge any inventories as collateral for its borrowings.

(g) Investments accounted for using the equity method

The components of investments accounted for using the equity method at the reporting date were as follows:

Associates	December 31, 2021 $ 71,325	December 31, 2020 -

(i) The Group originally held certain portion of the common shares of Ko Loong, which was accounted for under the financial assets at fair value through other comprehensive income. In April 2021, the Group acquired additional shares of Ko Loong, resulting in its percentage of ownership to increase to 19.75%. Hence, the Group assessed that it had significant influence over Ko Loong, which led the Group to remeasure the fair value of its assets of the acquisition date, and account it for using the equity method.
(ii) The Group’s financial information on investments accounted for using the equity method that are individually insignificant was as follows:

are individually insignificant was as follows:
Attributable to the Group: Profit (loss) Other comprehensive income (loss) Comprehensive income (loss)	2021 $ 2,601 (10,329)
	$ (7,728)

(iii) The Group did not provide any investment accounted for using the equity method as collateral for its loans.

115

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Property, plant and equipment

The movements in the property, plant and equipment of the Group were as follows:

Cost: Balance on January 1, 2021 Additions Disposals Reclassifications Effect of movements in exchange rates Balance on December 31, 2021 Balance on January 1, 2020 Additions Disposals Reclassifications Effect of movements in exchange rates Balance on December 31, 2020 Depreciation: Balance on January 1, 2021 Depreciation Disposals Effect of movements in exchange rates Balance on December 31, 2021 Balance on January 1, 2020 Depreciation Disposals Effect of movements in exchange rates Balance on December 31, 2020 Carrying amounts: Balance on December 31, 2021 Balance on January 1, 2020 Balance on December 31, 2020	Land Buildings Gasoline equipment Transportatio nequipment Miscellaneous equipment Unfinished construction and equipment under installation Total
	$ 2,008,967 810,856 152,190 2,047,790 514,087 - 5,533,890 - 73,701 3,312 59,125 53,214 13,296 202,648 - (224) - (88,988) (118,889) - (208,101) (2,426) 18,983 - - - 615 17,172 - - - 1,125 - - 1,125
	$ 2,006,541 903,316 155,502 2,019,052 448,412 13,911 5,546,734
	$ 1,853,346 732,247 135,032 1,960,968 457,743 - 5,139,336 155,621 103,008 17,298 157,066 67,946 - 500,939 - (24,399) (140) (68,932) (11,602) - (105,073) - - - (631) - - (631) - - - (681) - - (681)
	$ 2,008,967 810,856 152,190 2,047,790 514,087 - 5,533,890
	$ - 335,278 98,318 1,070,002 304,927 - 1,808,525 - 33,471 13,042 157,711 46,530 - 250,754 - (48) - (80,358) (41,913) - (122,319) - - - 262 1 - 263
	$ - 368,701 111,360 1,147,617 309,545 - 1,937,223
	$ - 323,810 83,802 970,514 262,391 - 1,640,517 - 28,747 14,656 158,612 51,447 - 253,462 - (17,279) (140) (59,103) (8,911) - (85,433) - - - (21) - - (21)
	$ - 335,278 98,318 1,070,002 304,927 - 1,808,525
	$ 2,006,541 534,615 44,142 871,435 138,867 13,911 3,609,511
	$ 1,853,346 408,437 51,230 990,454 195,352 - 3,498,819
	$ 2,008,967 475,578 53,872 977,788 209,160 - 3,725,365

116

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) The Group is restricted by the law and cannot acquire agricultural land in the name of the Group. As of December 31, 2020, some pieces of agricultural land located in Mailiao and Taoyuan amounting to $939,227, which were accounted under property, plant and equipment, were registered in the name of the former chairman of the Company, Wen-Ming Cheng (the chairman at the time of the transaction), and other individuals. In the first quarter of 2021, some part of the abovementioned land had been completed the transfer procedures after the change of land category. As of December 31, 2021, some pieces of agricultural land located in Mailiao and Taoyuan amounting to $228,581, which were accounted under property, plant and equipment, were registered in the name of the chairman of the Company, Jen-Hao Cheng, the former chairman of the Company, Wen-Ming Cheng (the chairman at the time of the transaction) and other individuals. The Group has the “Other rights certificate” of the land or has an agreement with both parties to verify that the Group is the actual owner of the land.
(ii) In September 2020, the Group entered into a contract with a related party, Cheng Loong Corporation to purchase the land and building for office space located in Banqiao District, New Taipei City amounting to $169,189 (excluding tax). The registration has been completed in December 2020. Please refer to note (7)(b)(iv)(1) for the details.
(iii) As of December 31, 2021 and 2020, the portion of property, plant and equipment of the Group had been pledged as collateral for its credit lines of the bank. Please refer to note (8).
(i) Right-of-use assets

The Group leases many assets including land and buildings. Information about leases for which the Group as a lessee is presented below:

Land	Others 14,281 290 -	Total 1,764,210 189,335 (281,529)
$ 264,408 1,393,037	14,571	1,672,016
$ 406,780 1,075,601 46,175 224,276 - (2,903)	14,281 - -	1,496,662 270,451 (2,903)
$ 452,955 1,296,974	14,281	1,764,210
$ 101,509 342,194 52,662 184,934 (84,928) (6,441)	3,885 2,673 -	447,588 240,269 (91,369)
$ 69,243 520,687	6,558	596,488
$ 44,571 164,449 56,938 179,899 - (2,154)	1,231 2,654 -	210,251 239,491 (2,154)
$ 101,509 342,194	3,885	447,588
$ 195,165 872,350	8,013	1,075,528
$ 362,209 911,152	13,050	1,286,411
$ 351,446 954,780	10,396	1,316,622

117

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Group’s right-of-use assets increased resulting from the new lease contracts including gas stations, parking space and container yard. The decrease mainly came from terminating the lease contract with Cheng Loong which is located in Qingshui District, Taichung City.

(j) Short-term borrowings

Short-term borrowings Unused short-term credit lines Range of interest rates	December 31, 2021 $ 40,000	December 31, 2021 $ 40,000	December 31, 2021 $ 40,000	December 31, 2020 -
	$ 544,000			764,000
		1.63%		-

For information on interest rate risk and liquidity risk of the Group, please refer to note (6)(s).

(k) Long-term borrowings

Currency	Maturity year	December 31, 2021 $ 1,274,700 1,047,651	December 31, 2021 $ 1,274,700 1,047,651	December 31, 2020 1,174,700 150,000
NTD	2022~2025
		$ 227,049		1,024,700
		$ 254,300		324,300
			0.97%~1.3%	0.97%~1.45%

(i) Issuance and repayment of the loans
The Group’s additional amounts in loans for the years ended December 31, 2021 and 2020, were $200,000 and $949,000, respectively; and the repayments, including prepaying the loans, were $100,000 and $989,300, respectively.
(ii) As of December 31, 2021, the repayment schedule for the long-term borrowings was as follows:

Period 2022.01.01~2022.12.31 2023.01.01~2023.12.31 2024.01.01~2024.12.31 2025.01.01~2025.12.31	Amount $ 1,047,651 154,015 54,666 18,368 $ 1,274,700

(iii) Please refer to note (6)(s) for the interest rate risk and liquidity risk information of the Group. (iv) Please refer to note (8) for the collateral for the long-term borrowings.

118

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(l) Lease liabilities

The lease liabilities of the Group were as follows:

Lease liabilities The lease liabilities of the Group were as follows:
Current Non-current	December 31, 2021 $ 209,461	December 31, 2020 235,389
	$ 890,087	1,102,605

For the maturity analysis, please refer to note (6)(s).

The amounts recognized in profit or loss were as follows: Interest on lease liabilities Expenses relating to short-term leases Lease modification gains (recorded as other gains and losses) COVID-19-related rent concessions (recognized as deduction of rent expenses)	2021 $ 16,593	2020 18,241
	$ 18,865	15,435
	$ (3,465)	(9)
	$ -	(803)

The amount recognized in the statement of cash flows for the Group was as follows:

Total cash outflow for leases	2021 $ 269,614	2020 261,936

(i) Leases of land and buildings

The Group leases a number of office space, gas stations, warehouses and land. These leases typically run for a period of 3 to 10 years.

(ii) Other leases

The Group leases a number of stackers with short-term contract terms. The Group has chosen not to recognize right-of-use assets and lease liabilities for these leases.

(m) Employee benefits
(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value is as follows:

Present value of the defined benefit obligations Fair value of plan assets Net defined benefit liabilities	December 31, 2021 $ (247,658) 147,473	December 31, 2020 (305,270) 209,165
	$ (100,185)	(96,105)

119

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

1) Composition of plan assets The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company’s Bank of Taiwan labor pension reserve account balance amounted to $171,756 as of December 31, 2021. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movements in present value of the defined benefit obligations for the Company were as follows:

Defined benefit obligations at January 1 Benefits paid Pensions for employees who are transferred from affiliated companies Current service costs and interest cost Remeasurement in net defined benefit liabilities (assets) Defined benefit obligations at December 31	2021 $ (305,270) 72,920 (1,301) (5,704) (8,303) $ (247,658)	2020 (306,942) 27,605 - (7,620) (18,313) (305,270)

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company were as follows:

Fair value of plan assets at January 1 Expected return on plan assets Remeasurement of net defined benefit liabilities (assets) Contributions paid by the employer Benefits paid Fair value of plan assets at December 31	2021 $ 209,165 1,297 2,413 7,518 (72,920)	2020 204,184 2,003 4,907 22,714 (24,643)
	$ 147,473	209,165

120

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

4) Movements of the effect of the asset ceiling

In 2021 and 20220, there were no movements on the effect of the Company’s defined benefit plans asset ceiling.

5) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

Current service costs Interest cost Expected return on plan assets Operating cost Administration expenses	2021 $ 3,829 1,875 (1,297)	2020 4,623 2,997 (2,003)
	$ 4,407	5,617
	$ 2,318 2,089	2,643 2,974
	$ 4,407	5,617

6) Remeasurement of net defined benefit liabilities (assets) recognized in other comprehensive income

The Company’s remeasurement of the net defined benefit liability (asset) recognized in other comprehensive income, was as follows:

Accumulated amount at January 1 Recognized during the period Accumulated amount at December 31	2021 $ (156,557) (5,890)	2020 (143,151) (13,406)
	$ (162,447)	(156,557)

7) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increase rate	December 31, 2021 0.625% 1.000%	December 31, 2020
		0.625% 1.000%

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date is $5,732.

The weighted average lifetime of the defined benefits plans is 12.93 years.

121

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

8) Sensitivity analysis

In determining the present value of the defined benefit obligation, the Company’s management makes judgements and estimates in determining certain actuarial assumptions of the balance sheet date, which includes discount rate and future salary increase rate. Changes in actuarial assumptions may have significant impact on the amount of defined benefit obligation.

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31, 2021 Discount rate Future salary increasing rate December 31, 2020 Discount rate Future salary increasing rate	Influences of defined benefit obligations Increased 0.25% Decreased 0.25% $ (5,964) 6,182 6,074 (5,887) (7,360) 7,648 7,499 (7,262)
	Increased 0.25% $ (5,964) 6,074 (7,360) 7,499

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2021 and 2020.

(ii) Defined contribution plans

The Group allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Group allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The Group recognized the pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $53,354 and $50,946 for the years ended December 31, 2021 and 2020, respectively.

The other subsidiaries recognized the pension expense, basic endowment insurance expenses, and social welfare expenses amounting to $938 and $707 for the years ended December 31, 2021 and 2020, respectively.

122

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Income taxes

(i) Income tax expenses
1) The components of income tax in the years 2021 and 2020 were as follows:

Current tax expenses Current period Land value increment tax Adjustment for prior periods Deferred tax expenses Origination and reversal of temporary differences Under (over) provision in prior periods Income tax expenses	2021 $ 86,038 2,426 181	2020 87,246 - (3,480)
	88,645	83,766
	1,069 (207)	(3,016) 2,502
	862	(514)
	$ 89,507	83,252

2) The amounts of income tax recognized directly in other comprehensive income for 2021 and 2020 were as follows:

Items that will not be reclassified subsequently to profit or loss: Remeasurement from defined benefit plans Unrealized gains (losses) on equity instruments at fair value through other comprehensive income Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign financial statements	2021 $ (1,178) (2,521)	2020 (2,681) 73,593
	$ (3,699)	70,912
	$ 323	388

123

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Reconciliation of income tax and profit before tax for 2021 and 2020 is as follows:

Income tax on pre-tax financial income calculated at the domestic rates applicable to profits in the country concerned Net gains or losses on domestic investments accounted for using equity method Tax-exempt income Land value increment tax Under (over) provision in prior periods Non-deductible expenses and others Income tax expenses	2021 $ 132,519 (26,629) (21,600) 2,426 (26) 2,817	2020 111,859 (17,606) (14,649) - (978) 4,626
	$ 89,507	83,252

(ii) Deferred tax assets and liabilities
1) Unrecognized deferred tax assets: None.
2) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2021 and 2020 were as follows:

Defined benefit plans	Exchange differences on translation	Others 11,496 (1,975) -	Total 38,534 (2,337) 855
$ 15,816 (362) 1,178	11,222 - (323)
$ 16,632	10,899	9,521	37,052
$ 17,147 (4,012) 2,681	11,610 - (388)	10,622 874 -	39,379 (3,138) 2,293
$ 15,816	11,222	11,496	38,534

124

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Unrealized gains (losses) on financial assets $ 104,097 - (2,521)	Overseas investment income accounted under the equity method	Others 4,581 (890) -	Total 168,288 (1,475) (2,521)
	59,610 (585) -
$ 101,576	59,025	3,691	164,292
$ 30,504 - 73,593	60,147 (537) -	7,696 (3,115) -	98,347 (3,652) 73,593
$ 104,097	59,610	4,581	168,288

(iii) Assessment of tax

The tax returns of the Company and its R.O.C. subsidiaries for the years through 2019 were assessed by the Taipei National Tax Administration.

(o) Capital and other equity
(i) Ordinary shares

As of December 31, 2021 and 2020, the number of authorized ordinary shares were both $1,800,000 with a par value of $10 per share, and of which $1,372,818 were issued. All issued shares were paid up upon issuance.

(ii) Capital surplus

The balances of capital surplus were as follows:

Additional paid-in capital Treasury share transactions Other	December 31, 2021 $ 520,206 61,912 1,241	December 31, 2020 520,206 58,934 1,241
	$ 583,359	580,381

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

125

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Retained earnings

1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2) Special reserve

A portion of current period earnings and undistributed prior period earnings shall be reclassified as a special earnings reserve during earnings distribution. The amount to be reclassified should equal to the current-period total net reduction of other shareholders’ equity. For the year 2019 earnings distribution in 2020, the amount to be reclassified to special reserve shall be a portion of current-period earnings and undistributed prior-period earnings. As for the year 2020 earnings distribution in 2021, the amount to be reclassified to special reserve shall be a portion of current-period earnings plus other line items in the retained earnings movements and undistributed prior-period earnings. A portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

3) Retain earnings-earnings distribution and dividend policy

Based on the Company’s article of incorporation amended before July 1, 2021, if there is any profit after tax after closing of books in a given year, the Company shall first offset the accumulated deficits, if any, and set aside 10% of it as legal reserve. Where such legal reserve amounts to the total paid-in capital, this provision shall not apply. Moreover, Company shall set aside or reserve a special reserve in accordance with laws and regulations. And then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

Based on the Company’s article of incorporation amended after July 1, 2021, if there is any profit after tax after closing of books in a given year, the Company shall first offset the accumulated deficits, if any, and set aside 10% of it as legal reserve. The legal reserve shall be based on after-tax net income for the period and other profit items adjusted to the current year's undistributed earnings other than after-tax net income for the period. Where such legal reserve amounts to the total paid-in capital, this provision shall not apply. Moreover, the Company shall set aside or reserve a special reserve in accordance with laws and regulations. And then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

126

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The abovementioned distribution shall be declared more than 30% to shareholders. The cash dividends shall not be lower than 10% of the total cash and stock dividends. However, stock dividends instead of cash dividends are declared if the cash dividends per share are less than NT$0.1 (dollars). When there is a deduction from shareholders’ equity, an amount equal to the deduction item is set aside as a special reserve (which does not qualify for earnings distribution). If the dividends per share are less than NT$0.5 (dollars), they can be decided not to distribute.

Base on the resolutions of the annual stockholders’ meeting held on July 1, 2021 and May 29, 2020, the appropriations of dividends from the distributable retained earnings of 2020 and 2019, respectively, were as follows:

Dividends distributed to ordinary shareholders: Cash	2020		2019 Amount per share Total amount 1.8 247,107
	Amount per share		Amount per share
	$ 2.2		1.8

On March 7, 2022, the Company’s Board of Directors resolved to appropriate to 2021 earnings. These earnings were appropriated as follows:

Dividends distributed to ordinary shareholders: Cash	2021 Amount per share Total amount $ 2.5 343,204
	Amount per share
	$ 2.5

(iv) Treasury shares

In accordance with Securities and Exchange Act requirements, the number of shares repurchased should not exceed 10% of all shares outstanding. Also, the value of the repurchased shares should not exceed the sum of the Company’s retained earnings, share premium, and realized capital reserves.

In accordance with the requirements of Securities and Exchange Act, treasury shares held by the Company should not be pledged, and do not hold any shareholder rights before their transfer.

As of December 31, 2021 and 2020, since the subsidiary of the Group, Shan-Loong Investment, held a number of the ordinary shares of the Company, the Group accounted it under the treasury stock. The total shares and amounts were as follows:

Shan-Loong Investment Fair value	December 31, 2021 Shares (thousands) Amount 1,353 $ 31,863	December 31, 2021 Shares (thousands) Amount 1,353 $ 31,863	December	December	31, 2020 Amount 31,863
			Shares (thousands) 1,353
		$ 49,401			43,514

For the years ended December 31, 2021 and 2020, Shan-Loong Investment, received the cash

127

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

dividend which were distributed by the Company, amounting to $2,978 and $2,436, respectively, which were recorded as capital surplus - treasury share transactions.

(p) Earnings per share

The Group’s basic and diluted earnings per share were calculated as follows:

Basic earnings per share: Profit attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (thousands) Basic earnings per share (dollars) Diluted earnings per share: Profit attributable to ordinary shareholders of the Company (after adjustment the influence of potential ordinary shares) Weighted average number of ordinary shares (thousands) Dilutive effect of potential ordinary shares (thousands): Employee share bonus Weighted average number of ordinary shares (after adjustment the influence of potential ordinary shares) Diluted earnings per share (dollars)	2021 $ 415,507	2020 371,334
	135,928	135,928
	$ 3.06	2.73
	$ 415,507	371,334
	135,928 707	135,928 567
	136,635	136,495
	$ 3.04	2.72

(q) Revenue from contracts with customers (i) Disaggregation of revenue

Primary geographical markets: Taiwan China Vietnam			2021	2021	Total 18,563,000 8 249,155
	Transportation segment $ 3,649,042 8 249,155		Gasoline station segment 13,155,382 - -	Other segment 1,758,576 - -
	$ 3,898,205		13,155,382	1,758,576	18,812,163

128

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Primary geographical markets: Taiwan China Vietnam			2020	2020	Total 15,689,572 37,213 228,715
	Transportation segment $ 3,595,373 37,213 228,715		Gasoline station segment 10,534,961 - -	Other segment 1,559,238 - -
	$ 3,861,301		10,534,961	1,559,238	15,955,500

(ii) Contract balances

Notes and accounts receivable Less: allowance for impairment Contract liabilities – Unearned revenue	December 31, 2021 $ 969,765 (3,069)	December 31, 2020 854,666 (3,069)	January 1, 2020 921,700 (3,310)
	$ 966,696	851,597	918,390
	$ 21,815	13,577	13,122

For details on accounts receivable and allowance for impairment, please refer to note (6)(d).

The major change in the balance of contract assets and liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received.

(r) Employee compensation and directors' and supervisors' remuneration

Based on the Company’s articles of incorporation, if there is any profit in a fiscal year, the Company’s pre-tax profits in such fiscal year, prior to deduction of compensations to employees, shall be distributed to employees as compensations in an amount of not less than one percent (1%) of such profits. In the event that the Company has accumulated losses, the Company shall reserve an amount to offset accumulated losses. The compensations to employees as mentioned above may be distributed in the form of stock or cash. Employees who are entitled to receive the above-mentioned employee remuneration, in shares or cash, include the employees of the Company’s controlling and subordinate companies pursuant to the Company Act. A company may, by a resolution adopted by a majority vote at a meeting of board of directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation ; and in addition thereto a report of such distribution shall be submitted to the shareholders’ meeting. A company which has the profit distributed to employees in the form of shares by a resolution of the meeting of board of directors in accordance with the provision of the preceding paragraph may resolve, at the same meeting of the board of directors, to distribute the shares by way of new shares to be issued by the company or existing shares to be re-purchased by the company.

129

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The Company's remuneration to employees were $22,000 and $15,000, respectively, and the remuneration to directors were $0 for the years ended December 31, 2021 and 2020. The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employees and directors of each period, multiplied by the percentage of the remuneration to employees and directors as specified in company's articles. The remuneration were expensed under operating costs or operating expenses during 2021 and 2020.

The amounts, as stated in the consolidated financial statements, are identical to those of the actual distributions in 2021 and 2020. Related information would be available at the Market Observation Post System Website.

(s) Financial instruments

(i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

As of December 31, 2021 and 2020, the accounts receivable amounted to $316,669 and $304,452, respectively, comes from one of the Group’s significant customer, whose main activities is the manufacturing and sale of paper products.

3) Receivables credit risk

For credit risk exposure of notes and accounts receivable, please refer to note 6(d). Other financial assets measured at amortized cost include other receivables, please refer to note (6)(e).

The abovementioned other receivables are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12 months expected losses. Regarding how the financial instruments are considered to have low credit risk, please refer to note (4)(g).

The loss allowance provision of other receivables was determined as follows:

Balance on January 1 (same as balance on December 31)	2021 $ 13,100	2020 13,100

130

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments.

Carrying amount $ 40,000 1,586,129 507,468 1,099,548 1,274,700 18,262	Contractual cash flows	Within a year	1~2years	Over 2years - - - (737,079) (75,637) (18,262)
	(40,240) (1,586,129) (507,468) (1,151,949) (1,290,233) (18,262)	(40,240) (1,586,129) (507,468) (223,091) (1,057,512) -	- - - (191,779) (157,084) -
$ 4,526,107	(4,594,281)	(3,414,440)	(348,863)	(830,978)
$ 1,364,501 484,046 1,337,994 1,174,700 17,337	(1,364,501) (484,046) (1,403,578) (1,200,915) (17,337)	(1,364,501) (484,046) (251,917) (162,480) -	- - (231,694) (906,154) -	- - (919,967) (132,281) (17,337)
$ 4,378,578	(4,470,377)	(2,262,944)	(1,137,848)	(1,069,585)

The Group does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Currency risk

1) Exposure to foreign currency risk

The Group’s significant exposure to foreign currency risk was as follows:

Financial assets Monetary items USD Non-Monetary items CNY	D	ecember 31, 2021		D	ecember 31, 2020	TWD 165,156 255,068
	Foreign currency	Exchange rate	TWD	Foreign currency	Exchange rate
	$ 6,127 47,147	USD/TWD =27.680 CNY/TWD =4.344	169,595 204,805	5,799 58,275	USD/TWD =28.480 CNY/TWD =4.377

131

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Sensitivity analysis

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents and financial assets at fair value through other comprehensive income. A strengthening (weakening) of 5% of the TWD against the USD and CNY for the years ended December 31, 2021 and 2020, would have increased or decreased the profit before tax by $8,480 and $8,258, respectively; and would have increased or decreased the other comprehensive income by $10,240 and $12,753, respectively. The analysis is performed on the same basis for both periods.

Since the Group has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For the years ended December 31, 2021 and 2020, the foreign exchange gains (losses) (including both realized and unrealized) were as follows:

Foreign exchange gain (loss) (recorded as other gains and losses)	2021 $ (4,959)	2020 (9,235)

(iv) Interest rate analysis

The details of financial assets and liabilities exposed to interest rate risk were as follows:

Variable rate instruments (Carrying amount): Financial assets Financial liabilities	December 31, 2021 $ 1,348,100 40,000	December 31, 2020 595,057 -

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets and liabilities with variable interest rates, the analysis is based on the assumption that the amount of assets and liabilities outstanding at the reporting date were outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents the Group’s management’s assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 0.25%, the Group’s net profit before tax would have increased or decreased by $3,270 and $1,488, respectively, for the years ended December 31, 2021 and 2020, which would be mainly resulted from the bank deposits and short-term borrowings.

132

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Other market price risk

For the years ended December 31, 2021 and 2020, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the profit and loss as illustrated below:

Prices of securities at the reporting date Increasing 5% Decreasing 5%	2021	Profit before tax -	2020 Other comprehensive income before tax 122,514	Profit before tax 17,453
	Other comprehensive income before tax $ (122,307)
	$ 122,307	-	(122,514)	(17,453)

(vi) Fair value of financial instruments
1) Procedure of valuation and Fair value hierarchy

The Group’s accounting policies and disclosure include fair value method on financial assets and financial liabilities. The Group’s management is responsible in performing independent test on fair value by using independent source of information to obtain the fair value which is close to the market status. The management also confirms the independence, reliability and matching of the information source, and regularly test the valuation model, update the input and other information, and make necessary adjustment to ensure the output of valuation is reasonable.

The Group uses observable market data to evaluate its assets and liabilities when it is possible. The different inputs of levels of fair value hierarchy in determining the fair value are as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices ） or indirectly （ i.e. derived from prices).
Level 3: inputs for assets or liabilities that are not based on observable market data (unobservable inputs).
2)
The categories and the fair value of financial instruments

The carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

133

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

	December 31, 2021	December 31, 2021	December 31, 2021
Carrying amount $ 2,059,749 386,384		Fair Value
	Level 1 2,059,749 - - - - - - - - - - - -	Level 2 - - - - - - - - - - - - -	Level 3 - 386,384 - - - - - - - - - - -
2,446,133
1,553,286 649,969 316,727 78,793 216,299
2,815,074
$ 5,261,207
$ 40,000 1,586,129 507,468 1,099,548 1,274,700 18,262
$ 4,526,107

134

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	December 31, 2020	December 31, 2020	December 31, 2020
Carrying amount $ 349,054		Fair Value
	Level 1 - 1,983,893 - - - - - - - - - - -	Level 2 349,054 - - - - - - - - - - - -	Level 3 - - 466,390 - - - - - - - - - -
1,983,893 466,390
2,450,283
786,408 546,632 304,965 65,703 203,711
1,907,419
$ 4,706,756
$ 1,364,501 484,046 1,337,994 1,174,700 17,337
$ 4,378,578

135

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Valuation techniques for financial instruments not measured at fair value

The Group’s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

Unquoted liability instruments and financial liabilities measured at amortized cost: If there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

4) Valuation techniques for financial instruments measured at fair value

Non-derivative financial instruments

Financial instruments trade in active markets is based on quoted market prices. The quoted price of a financial instrument obtained from main exchanges and on-the-run bonds from Taipei Exchange can be used as a base to determine the fair value of the listed companies’ equity instrument and debt instrument of the quoted price in an active market.

If a quoted price of a financial instrument can be obtained in time and often from exchanges, brokers, underwriters, industrial union, pricing institute, or authorities and such price can reflect those actual trading and frequently happen in the market, then the financial instrument is considered to have a quoted price in an active market. If a financial instrument is not in accord with the definition mentioned above, then it is considered to be without a quoted price in an active market. In general, market with low trading volume or high bid-ask spreads is an indication of a non-active market.

Measurements of fair value of financial instruments without an active market are based on a valuation technique or quoted price from a competitor. Fair value measured by a valuation technique can be extrapolated from similar financial instruments or other valuation technique including a model using observable market data at the reporting date.

The measurement of fair value of a non-active market financial equity instruments held by the Group which do not have quoted market prices are based on the comparable market approach, with the use of key assumptions of EV/EBIT or price-to-book ratio of comparable listed companies as its basic measurement. These assumptions have been adjusted for the effect of discount for lack of marketability of the equity securities.

The fair value of the structured deposits held by the Group is measured at observable prices other than market prices. The used estimates and assumptions are based on the quoted prices of the financial institutions.

5) There were no transfers from one level to another of the Group for the years ended December 31, 2021 and 2020.

136

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

6) Reconciliation of Level 3 fair values

Balance on January 1, 2021 Total gains and losses recognized: In other comprehensive income Purchase Derecognized Balance on December 31, 2021 Balance on January 1, 2020 Total gains and losses recognized: In other comprehensive income Proceeds of capital reduction of investment Balance on December 31, 2020
	$ 386,384
	$ 369,971 163,299 (66,880)
	$ 466,390

For the years ended December 31, 2021 and 2020, the total gains and losses that were included in “unrealized gains and losses from financial assets at fair value through other comprehensive income” were as follows:

2021 Total gains and losses recognized: In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income” $ (44,230)	2020 163,299

7) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Group’s financial instruments that use Level 3 inputs to measure fair value include "fair value through other comprehensive income – equity investments".

Most of fair value measurements of the Group which are categorized as equity investment instruments into level 3 have several significant unobservable inputs. Significant unobservable inputs of equity instruments without quoted price are independent of each other.

137

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Quantified information of significant unobservable inputs was as follows:

Item	Valuation technique Comparable transaction method 〃〃 Net asset value method	Significant unobservable inputs ‧Lack-of-Marketability discount rate (20%~35% and 20%~30%, respectively, on December 31, 2021 and 2020) ‧EV/EBIT ratio (8.91~19.36 and 14.85, respectively, on December 31, 2021 and 2020) ‧Price-Book ratio (0.91~1.6 and 0.98~2.82, respectively, on December 31, 2021 and 2020) ‧Net Asset Value	Inter-relationship between significant unobservable inputs and fair value measurement
Financial assets at fair value through other comprehensive income －unquoted equity instruments 〃〃〃			‧The higher the Lack-of-Marketabilit y discount rate is, the lower the fair value will be. ‧The higher the multiple is, the higher the fair value will be. 〃 ‧Not applicable

8) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The Group’s fair value measurement on financial instruments is reasonable. However, the measurement would be different if different valuation models or valuation parameters are used. For financial instruments using level 3 inputs, if the valuation parameters changed, the impacts on other comprehensive income or loss are as follows:

Input	Move up or down	Other comprehensive income Favorable change Unfavorable change $ 4,616 (4,686)	Other comprehensive income Favorable change Unfavorable change $ 4,616 (4,686)
			Unfavorable change
Lack-of-Mark etability discount rate EV/EBIT Price-to-Book Ratio Lack-of-Mark etability discount rate EV/EBIT Price-to-Book Ratio	5% 5% 5% 5% 5% 1%		(4,686)
		$ 3,376	(3,443)
		$ 7,616	(7,684)
		$ 6,066	(5,981)
		$ 6,463	(6,429)
		$ 12,859	(12,771)

The favorable and unfavorable impacts reflect the movement of the fair value, in which the fair value is calculated by using the significant unobservable inputs in the valuation technique. The table above shows the effects of one unobservable input, without considering the inter-relationships with another unobservable input for financial instrument, if there are one or more unobservable inputs.

138

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(t) Financial risk management
(i) Overview

The Group have exposures to the following risks from its financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

The following likewise discusses the Group’s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks exposures, please refer to the respective notes in the accompanying consolidated financial statements.

(ii) Structure of risk management

The Board of Directors has overall responsibility for the control and oversight of the risk management framework. The financial department proposes the evaluation plan and benefit analysis and reports to management for approving. The transactions are authorized to the chairman of the Company to operate, and will be approved by the Board of Directors at the most recent board meeting.

The internal auditors of the Group perform the regularly or irregularly risk management control and operating activity audit in accordance with the internal audit plans. The result will be reported to the Audit Committee periodically. The Group has no transactions in financial instruments for the purpose of speculation.

(iii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s cash at bank, receivables from customers and investments in securities.

1) Accounts receivable and other receivables

The Group has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. Purchase limits are established for each customer, these limits are reviewed periodically. Customers that fail to meet the Group’s benchmark creditworthiness may transact with the Group only on a prepayment basis.

In order to mitigate account receivable credit risk, the Group constantly assesses the financial status of the customers, and requests the customers to provide guarantee or security if necessary. The Group regularly accesses the collectability of accounts receivable and recognizes allowance for accounts receivable. The impairment losses are always within management’s expectation.

139

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Investments

The exposure to credit risk for the bank deposits and other financial instruments is measured and monitored by the Group’s finance department. The Group only deals with banks, corporate organization and financial institutions with good credit rating. The Group does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

3) Guarantees

Pursuant to the Group’s policies, it is only permissible to provide financial guarantee to the entities listed in the policies. As of December 31, 2021 and 2020, the Group did not provide any guarantees to other companies besides its subsidiaries.

(iv) Liquidity risk

The Group manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Group’s management supervises the banking facilities to ensures they are in compliance with the terms of loan agreements.

The loans and borrowings from the bank form an important source of liquidity for the Group. Please refer to note 6(j) and 6(k) for the unused credit lines of short-term and long-term loans as of December 31, 2021 and 2020.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Group is exposed to currency risk on sales, cost of goods sold, and expenses that are denominated in a currency other than the respective functional currencies of the Group’s entities, primarily the NTD, CNY and VND. The currencies used in these transactions are the NTD, USD, CNY and VND.

As for other monetary assets and liabilities denominated in other foreign currencies, when short-term imbalance takes place and the amount is significant, the Group buys or sells foreign currencies at spot rate to ensure that the net exposure is kept on an acceptable level.

2) Interest rate risk

The subsidiaries of the Group borrow funds on floating interest rate, therefore, the Group has the risk of cash flow.

140

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

3) Other market price risk
- The Group is exposed to equity price risk due to the investments in listed stock investments and non-listed stock investments. This is a strategic investment and is not held for trading. The Group does not actively trade in these investments. The material investments of investment portfolio are managed individually and their purchase decision are all approved by the finance department.
(u) Capital management

The policy of capital management made by the Board of Directors is to maintain a strong capital base so as to stabilize the confidence of the investors, creditors and the public market and to sustain future development of the business. Capital consists of ordinary shares, capital surplus, retained earnings and non-controlling interests. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shares.

The Group monitors capital structure through the regular review of the asset-debt ratio. As of December 31, 2021 and 2020, the debt ratios of the Group were as follows:

Total liabilities Total assets Debt-to-asset ratio	December 31, 2021 $ 4,896,414 10,353,197 47 %	December 31, 2020 4,767,255 10,042,999 47 %

As of December 31, 2021, there were no changes in the Group’s approach of capital management.
(v) Investing and financing activities not affecting current cash flow

The Group’s investing and financing activities which did not affect the current cash flow for the years ended December 31, 2021 and 2020, were as follows:

(i) The acquisition of right-of -use assets by lease, please refer to notes (6)(i) and (6)(l).
(ii) Reconciliation of liabilities arising from financing activities was as follows:

Short-term borrowings Long-term borrowings Guarantee deposits Lease liabilities Total liabilities from financing activities	January 1, 2021 Cash flows $ - 40,000 1,174,700 100,000 17,337 925 1,337,994 (234,156)	Non-cash changes Changes in lease payments and others December 31, 2021 - 40,000 - 1,274,700 - 18,262 (4,290) 1,099,548
	$ 2,530,031 (93,231)	(4,290) 2,432,510

141

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Short-term borrowings Long-term borrowings Guarantee deposits Lease liabilities Total liabilities from financing activities	January 1, 2020 Cash flows $ 10,000 (10,000) 1,215,000 (40,300) 18,336 (999) 1,297,364 (229,063)	Non-cash changes Changes in lease payments and others December 31, 2020 - - - 1,174,700 - 17,337 269,693 1,337,994
	$ 2,540,700 (280,362)	269,693 2,530,031

(7) Related-party transactions:

(a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in consolidated financial statements:

Name of related party Relationship with the Group This Company is the corporate director of the Company

Cheng Loong Corporation (Cheng Loong)

This Company is the corporate director of the Company

Shine Far Construction Co., Ltd.

Its parent company is the corporate director of the Company

Shine Far Property Co., Ltd. Gemtech Optoelectronics Corp.

The same chairman of the Board with Cheng Loong
It has the same chairman as that of the Board of the Company and became an associate of the Company since April 2021

Ko Loong Industry Co., Ltd.

Half of the directors of this company are the directors of the Company

Sun Favorite Co., Ltd.

Its ultimate parent company is the corporate director of the Company

Shanghai Chung Hao Paper Co., Ltd.

Its ultimate parent company is the corporate director of the Company

Suzhou Cheng Loong Paper Co., Ltd.

Its ultimate parent company is the corporate director of the Company

Shan Fu Paper (Kunsan) Co., Ltd.

Its ultimate parent company is the corporate director of the Company

Cheng Loong (Gwangtung) Paper Co., Ltd.

Its ultimate parent company is the corporate director of the Company

Dongguan Ming Loong Paper Co., Ltd.

142

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Name of related party

Relationship with the Group

Zhangzhou Cheng Loong Paper Co., Ltd.

Qingdao Chung Loong Paper Co., Ltd.

Cheng Loong (Hangzhou) Investment Co., Ltd.

Chung Ming International Limited Taiwan Branch Wen Gin Development Co., Ltd. (Wen Gin Development)

Chung Ming International Limited

Cheng Loong Binh Duong Container Co., Ltd. Vina Tawana Container Co., Ltd. Cheng Loong Long An Container Co., Ltd. Cheng Loong Binh Duong Paper Co., Ltd.

Tsai-Yuan Lin

Its ultimate parent company is the corporate director of the Company Its ultimate parent company is the corporate director of the Company Its ultimate parent company is the corporate director of the Company Its ultimate parent company is the corporate director of the Company

The relationship between the chairman of the Company and of this company is within second degree of kinship

Its ultimate parent company is the corporate director of the Company

Its ultimate parent company is the corporate director of the Company Its ultimate parent company is the corporate director of the Company

The manager of the Company before September 15, 2021

(b) Significant transactions with related parties

(i) Sales

The amounts of significant sales transactions between the Group and related parties were as followings:

Other related parties Associates	Sales 2021 2020 $ 2,013,113 1,823,138 78 -	Sales 2021 2020 $ 2,013,113 1,823,138 78 -
	2021 $ 2,013,113 78
	$ 2,013,191	1,823,138

Sales prices and other transaction terms for related parties were similar to those of the third-party customers.

143

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Receivables from related parties

The receivables from related parties were as follows:

Account Related-party categories	December 31, 2021 December 31, 2020 $ 266,188 257,039 50,524 47,926 15 - 1,439 425
Accounts receivables Other related parties —Cheng Loong Accounts receivables Other related parties Accounts receivables Associates Other receivables (recorded as other current financial assets) Other related parties
	$ 318,166 305,390

(iii) The costs and expenses paid to related parties

The costs and expenses paid to related parties were as follows:

Account	Relationship	2021 $ 42,143 2,245 $ 44,388	2020 48,274 -
Operating costs and operating expenses 〃	Other related parties Associates
			48,274

(iv) Purchases of property, plant and equipment

1) In December 2020, the Group purchased the land and building located in Banqiao District, New Taipei City amounting to $169,189 (excluding tax) from a related party, Cheng Loong. Pricing of the above land and building was based on the valuation report from CCIS Real Estate Joint Appraisers Firm and Zhonglian Real Estate Appraiser Firm. As of December 31, 2020, the process for transferring the property has been completed and the above payable had been fully paid.
2) The Group purchased the transportation equipment from the related parties and engaged related parties to engineer the facilities on the leased land. The total price was as follows:

Other related parties Associates	Total price 2021 2020 $ 14,868 8,932 18,969 - $ 33,837 8,932

144

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Payable to related parties

The payables to related parties resulting from the above transactions were as follows:

Account Relationship Accounts payable Other related parties Other payables Other related parties Other payables Associates	December 31, 2021 December 31, 2020 $ 1,008 2,121 2,659 1,241 3,421 -
	$ 7,088 3,362

(vi) Disposal of transportation equipment

The total disposal price and unreceived balance of transportation equipment sold to related parties were as follows:

Other related parties	Total price	Other receivables from related parties December 31, 2021 December 31, 2020	Other receivables from related parties December 31, 2021 December 31, 2020
	2021 2020	December 31, 2021
	$ 1,262 994	-	-

For the years ended December 31, 2021 and 2020, the losses on disposal of transportation equipment amounted to $483 and $50, respectively.

(vii) Lease
1) Lessee

The Group rented several office spaces and lands from Cheng Loong and other related parties. The rental fee is determined based on nearly office rental rates. The details of the above lease transactions are as follows:

Lease liabilities	Lease liabilities	Interest expense 2021 2020 2,643 4,129 1 2
December 31, 2021	December 31, 2020
$ 65,663 280,171 - 141
$ 65,663 280,312		2,644 4,131

2) Lessor

The Group rented out the office building to other related parties. The details of the above lease transactions are as follows:

Other related parties	Rental income (recorded as other income)	Rental income (recorded as other income)	Other receivables from related parties December 31, 2021 December 31, 2020 - -
	2021 $ 3,000	2020
		3,000

145

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefits

2021 $ 46,321 442	2020 40,194 652
$ 46,763	40,846

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2021 $ 90,562 17,532 72,332	December 31, 2020 90,562 20,026 66,776
Property, plant and equipment－land Property, plant and equipment－buildings Refundable deposits (deposit certificate)	Long-term borrowings 〃 Deposits for performance guarantee
		$ 180,426	177,364

(9) Significant commitments and contingencies:

(a) As of December 31, 2021 and 2020, the Group’s unrecognized contractual commitments for gas station engineering and office renovation amounted to $2,671 and $18,394, respectively.
(b) As of December 31, 2021 and 2020, the Group had outstanding stand-by letters of credit provided by the banks totaling $2,026,000 and $1,776,000, respectively, for purposes of gasoline purchase, transportation and customs guarantee, etc.

(10) Losses due to major disasters: None

(11) Subsequent events: None

(12) Others:

A summary of current-period employee benefits and depreciation, by function, is as follows:

By function By item	2021	2021	2021	2020	2020	2020
	Operating cost	Operating Expenses	Total	Operating cost	Operating Expenses	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	488,880 43,529 24,418 3,219 224,050 -	763,981 73,541 34,281 23,112 266,973 -	1,252,861 117,070 58,699 26,331 491,023 -	478,721 40,209 23,636 2,749 238,337 -	745,394 66,771 33,634 22,077 254,616 -	1,224,115 106,980 57,270 24,826 492,953 -

146

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(13) Additional disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the year ended December 31, 2021.

(i) Loans to other parties: None
(ii) Guarantees and endorsements for other parties:

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0	The Company	Shan-Loong Motors	Note 2	2,628,055	150,000	150,000	-	-	2.85%	5,256,110	Y	-	-

Note 1: The total amount of endorsements shall not exceed the Company's net assets, and the endorsements for a single company shall not exceed 50% of the Company's net assets.

Note 2: Subsidiary whose over 50% common stock is directly or indirectly owned.

Note 3: The above counter-party of guarantee and endorsement is one of the entities in the consolidated financial statements.

(iii) Securities held as of December 31, 2021 (excluding investment in subsidiaries, associates and joint ventures):

joint ventures):	joint ventures):	joint ventures):	joint ventures):
				(In thousands of shares)
Name of holder	Category and name of security	Relationship with company	Account title	Ending balance				Highest balance during the year		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value	Shares/Units (thousands)	Percentage of ownership (%)
The Company The Company The Company The Company The Company	Stock: Cheng Loong Corporation stock Gemtech Optoelectronics Corp. stock Cheng Loong investment Co., Ltd. stock Shin Loong Lifecare Corp. stock Yueh Loong Co., Ltd. stock	Cheng Loong is the corporate director of the Company The same chairman of the Board with Cheng Loong - - -	Non current financial assets at fair value through other comprehensive income Non current financial assets at fair value through other comprehensive income Non current financial assets at fair value through other comprehensive income Non current financial assets at fair value through other comprehensive income Non current financial assets at fair value through other comprehensive income	19,376 3,644 600 350 323	683,977 72,734 29,214 2,317 5,379	1.75% 19.29% 4.62% 5.83% 10.78%	683,977 72,734 29,214 2,317 5,379	19,376 3,644 600 350 323	1.75% 19.29% 4.62% 5.83% 10.78%

147

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Name of holder	Category and name of security	Relationshi p with company	Account title		Ending balance	Ending balance	Ending balance	Highest ba the y	lance during ear	Note
				Shares/Uni ts (thousands)	Carrying value	Percentage of ownership (%)	Fair value	Shares/Uni ts (thousands)	Percentag e of ownership (%)

The Company Shan Loong Investment Co., Ltd. 〃〃〃 Shan Loong Customs Broker Shan Loong International	Shine Far Co., Ltd. stock Stocks: Cheng Loong Corporation stock Shan Loong Transportation Co., Ltd. stock Cheng Loong investment Co., Ltd. stock Yueh Loong Co., Ltd. stock Stocks: Cheng Loong Corporation stock Chung Loong Paper Holdings Limited	- - Parent company - - - -	Non current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non current financial assets at fair value through other comprehensive income Non current financial assets at fair value through other comprehensive income Non current financial assets at fair value through other comprehensive income Non current financial assets at fair value through other comprehensive income Non current financial assets at fair value through other comprehensive income	270 31,819 1,353 1,200 29 7,155 3,349	13,097 1,123,200 49,401 58,362 476 252,572 204,805	0.87% 2.87% 0.99% 9.23% 0.95% 0.65% 5.00%	13,097 1,123,200 49,401 58,362 476 252,572 204,805	270 31,819 1,353 1,200 29 7,155 3,349	0.87% 2.87% 0.99% 9.23% 0.95% 0.65% 5.00%	Note 1

Note 1: The transactions have been eliminated in the consolidated financial statement.

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None
(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None

148

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/Trade receivables (payable)	Notes/Trade receivables (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/trade receivables (payable)
The Company Shan Loong Motors Shan Loong international & Customs Broker Co., Ltd. Shan Loong international & Customs Broker Co., Ltd. Shan-Loong Logistics Co., Ltd.	Cheng Loong The Company Cheng Loong Chung Ming International Limited Cheng Loong Binh Duong Paper Co., Ltd	Cheng Loong is the corporate director of the Company Parent company This Company is the corporate director of the Company Its ultimate parent company is the corporate director of the Company Its ultimate parent company is the corporate director of the Company	Freight and gas revenue Revenue from truck sales, maintenance and repair Customs agent revenue Customs agent revenue Freight transportation revenue	(1,476,881) (162,469) (101,649) (168,000) (118,969)	(8.60)% (29.71)% (10.57)% (17.47)% (47.75)%	20-80 days 25 days 60 days 25 days 60 days	There is no difference to those of the third-party 〃〃〃〃	No difference 〃〃〃〃	Accounts receivable 250,020 Accounts receivable 17,442 Accounts receivable 16,168 Accounts receivable 8,553 Accounts receivable 17,297	32.36% 62.06% 11.15% 5.90% 56.02%	Note 1

Note 1: The transactions have been eliminated in the consolidated financial statement.

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of company	Related-party	Nature of relationship	Ending balance	Turnover rate	Overdue	Overdue	Amounts received in subsequent period	Loss allowance
					Amount	Action taken
The Company	Cheng Loong	Cheng Loong is the corporate director of the Company	250,020	5.88	-		Accounts receivable 242,146	-

Note 1: Information as of February 28, 2022.

(ix) Trading in derivative instruments: None.

149

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(x) Business relationships and significant intercompany transactions:

==> picture [432 x 155] intentionally omitted <==

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

Intercompany transactions (Note 3)
Nature of Percentage of the
No. Name of relationship Account consolidated net revenue
(Note1) Name of company counter-party (Note 2) name Amount Trading terms or total assets
1 Shan Loong The Company 2 Operating 162,469 The selling price and 0.86%
Motors revenue payment conditions
are not significantly
different from other
customers
1 Shan Loong The Company 2 Accounts 17,442 The selling price and 0.17%
Motors receivable payment conditions
are not significantly
different from other
customers
----- End of picture text -----

Note 1: The numbers filled in as follows:

1 .0 represents in the Company.
Subsidiaries are sorted in a numerical order starting from 1.

Note 2: Relationship with the transactions labeled as follows:

represents the transactions from the parent company to its subsidiaries.
represents the transactions from the subsidiaries to its parent company.
represents the transactions between subsidiaries.

Note 3: The transactions above have been eliminated in the consolidated financial statement.

(b) Information on investees:

The following is the information on investees (excluding information on investees in Mainland China):

											(In thousands of shares)	(In thousands of shares)	(In thousands of shares)
Name of investor	Name of investee	Location	Main businesses andproducts	Original investment amount		Balance as ofending ofthe period			Net income (losses) of investee (Note 2)	Share of profits /losses of investee (Note 2)	Highest balance during the year		Note
				December 31, 2021 (Note 1)	December 31, 2020 (Note 1)	Shares	Percentage of ownership	Carrying value (Note 1)			Shares	Percentage of ownership
The Company The Company The Company The Company The Company Shan-Loong International Shan-Loong International	Shan-Loong Investment Shan Loong Customs Broker Shan-Loong International Shang Loong Motors Ko Loong Industry Long Yun Loong De	New Taipei City Keelung British Virgin Islands New Taipei CIty New Taipei CIty Samoa Samoa	Investing activities Import and export agent services Investing activities Truck repair, maintenance and sales Synthetic resin and plastic manufacturin g Investing activities Investing activities	400,000 131,000 278,101 (USD10,047 thousand) 200,000 28,655 22,725 (USD821 thousand) 28,234 (USD1,020 thousand)	400,000 131,000 278,101 (USD10,047 thousand) 36,000 - 22,725 (USD821 thousand) 28,234 (USD1,020 thousand)	40,000 13,100 10,047 20,000 2,014 821 1,020	100.00% 100.00% 100.00% 100.00% 19.75% 100.00% 100.00%	1,200,089 410,023 611,081 216,477 71,325	57,057 60,933 (2,924) 19,384 13,174 1,938 8,029	54,079 60,933 (2,924) 15,533 2,601	40,000 13,100 10,047 20,000 2,014 821 1,020	100.00% 100.00% 100.00% 100.00% 19.75% 100.00% 100.00%	Subsidiary company (Note3) 〃〃〃 - Subsidiary company (Note3) 〃
								2,508,995		130,222
								231,173 48,427		Investment gains and losses recognized by its parent company 〃

150

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

==> picture [493 x 38] intentionally omitted <==

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

Loong De Shan-Loong Vietnam Warehousing 28,234 28,234 - 51.00% 48,451 15,742 〃 - 51.00% 〃
Logistics Co., , freight (USD1,020 (USD1,020
Ltd. transportatio thousand) thousand)
n and related
agent
----- End of picture text -----

Note 1: The amounts of New Taiwan Dollars were exchanged by the closing rates on the reporting date. Note 2: The amounts of New Taiwan Dollars were exchanged by the average rates on the reporting date. Note 3: The transactions above have been eliminated in the consolidated financial statement.

(c) Information on investment in mainland China:
(i) The names of investees in Mainland China, the main businesses and products, and other information:

Name of investee	Main businesses and products	Total amount of capital surplus	Method of investment	Accumulated outflow of investment from Taiwan as of beginning of theperiod	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of ending of theperiod	Percentage of ownership	Highest percentage of ownership	Net income (losses) of the investee (Note 6)	Investmen t income (losses) (Note 6)	Book value (Note 5)	Accumulated remittance of earnings in current period
					Outflow	Inflow (Note 5)
Shanghai Chung Loong Paper Co., Ltd. (Shanghai Chung Loong) Shanghai Shan Tong Loong Fu Paper (Kunsan) Co., Ltd. Cheng Loong (Gwangtung) Paper Co., Ltd. Zhangzhou Cheng Loong Paper Co., Ltd. Qingdao Chung Loong Paper Co., Ltd. Tianjin Chung Loong Paper Co., Ltd. Suzhou Cheng Loong Paper Co., Ltd. Chong Qing Cheng Loong Paper Co., Ltd.	Corrugated medium and kraft linerboard Warehousing, freight transportation and related agent Corrugated paper boxes, cardboard and paper products Cardboard, paper boxes, paper products and packing decoration printing Cardboard, paper boxes and paper products Cardboard, paper boxes and paper products Corrugated cardboard, paper boxes, paper pallets and paper products Cardboard Corrugated, cardboard, corrugated boxes, display boxes, paper pallets and paper products	(Note 8) 21,720 (RMB5,000 thousand) (Note 7) 276,800 (USD10,000 thousand) 858,080 (USD31,000 thousand) 353,750 (USD12,780 thousand) (Note 8) (Note 8) 512,080 (USD18,500 thousand) 373,680 (USD13,500 thousand)	(Note1) (Note1) (Note1) (Note1) (Note1) (Note1) (Note-) (Note1) (Note1)	160,046 (USD 5,782 thousand) 40,721 (USD812 thousand and RMB4,200 thousand) 30,863 (USD1,115 thousand) 23,500 (USD849 thousand) 17,660 (USD638 thousand) 4,152 (USD150 thousand) 13,868 (USD501 thousand) 4,844 (USD175 thousand) 4,678 (USD169 thousand)	- - - - - - - - -	- - - - - - - - -	160,046 (USD 5,782 thousand) 40,721 (USD812 thousand and RMB4,200 thousand) 30,863 (USD1,115 thousand) 23,500 (USD849 thousand) 17,660 (USD638 thousand) 4,152 (USD150 thousand) 13,868 (USD501 thousand) 4,844 (USD175 thousand) 4,678 (USD169 thousand)	-% 60.00% 5.00% 5.00% 5.00% -% -% 5.00% 5.00%	-% 60.00% 5.00% 5.00% 5.00% -% -% 5.00% 5.00%	- 3,348 (Note 4) (Note 4) (Note 4) - - (Note 4) (Note 4)	- 2,009 (Note 4) (Note 4) (Note 4) - - (Note 4) (Note 4)	- 231,183 (Note 4) (Note 4) (Note 4) - - (Note 4) (Note 4)	- - - - - - - - -

151

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

==> picture [488 x 203] intentionally omitted <==

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

Chengdu Corrugated 111,993 (Note1) 3,460 - - 3,460 5.00% 5.00% (Note 4) (Note 4) (Note 4) -
Cheng Loong cardboard, paper (USD4,046 (USD125 (USD125
Packing boxes, paper thousand) thousand) thousand)
Products Co., pallets and paper
Ltd. products
Henan Cheng Corrugated 276,523 (Note1) 11,598 - - 11,598 5.00% 5.00% (Note 4) (Note 4) (Note 4) -
Loong Packing cardboard and (USD9,990 (USD419 (USD419
Products Co., packaging thousand) thousand) thousand)
Ltd. products
(ii) Limitation on investment in Mainland China:
Investment Amounts Authorized
Accumulated Investment in Mainland by Investment Commission,
China as of December 31, 2021 MOEA Upper Limit on Investment
315,390 315,390 3,153,666
(USD10,735 thousand and RMB4,200 (USD10,735 thousand and
thousand) RMB4,200 thousand)
----- End of picture text -----

Note1: Indirectly investment in Mainland China through companies registered in the third region. Note2: The amounts of New Taiwan Dollars were exchanged by the rates at the reporting date. Note3: The recognition of investment profit and loss of Shanghai Shan Tong was based on the financial report which was reviewed by Taiwan accountants. The remaining invested companies did not use the equity method to invest, so there was no profit or loss recognized in this period.

Note4: Indirectly investment in Mainland China through Chung Loong Paper Holdings Limited. Note5: The amounts of New Taiwan Dollars were exchange by the closing rates on the reporting date. Note6: The amounts of New Taiwan Dollars were exchange by the average rates on the reporting date. Note7: Shanghai Shan Tong performed capital reduction RMB32,000 thousand in 2018, and Shan Loong International received capital reduction RMB19,200 thousand. As of the reporting date, the funds have not come back to Taiwan yet.

Note8: Indirectly investment in Mainland China through Chung Loong Paper Holdings Limited. These companies had been disposed in previous years. As of the reporting date, the investment amounts have not been repatriated yet.

(iii) Significant transactions: None
(d) Major shareholders:

Unit: shares

		Unit: shares
Shareholding Shareholder’s Name	Shares	Percentage
Cheng Loong Corporation	12,690,010	9.24%
CTBC comprehensive trust account for employees of Shan-Loong Transportation	8,602,899	6.26%
Shine Far Co., Ltd.	8,367,944	6.09%

152

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(14) Segment information:

(a) General information

The Group has two reportable segments: freight segment and gas station segment. The reportable segments are the Group’s strategic divisions. They offer different products and services, and are managed separately because they require different marketing strategies. Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance.

(i) Segment revenues included revenues from external customers and revenues from intersegment sales and transfers, which is pricing based on the market value.
(ii) Operating segment profit or loss is measured based on profit or loss before tax and used as the basis for performance evaluation.
(iii) The accounting policies of the operating segments are the same as those described in the significant accounting policies as stated in note (4).
(b) Information about reportable segments and their measurement and reconciliation

The Group’s operation segment information and reconciliation are as follows:

		2021		Total 18,812,163 -
Freight segment $ 3,898,205 -	Gas station segment 13,155,382 249,420	Others 1,758,576 183,750	Reconciliation and elimination
			- (433,170)
$ 3,898,205	13,404,802	1,942,326	(433,170)	18,812,163
$ 194,089	376,449	154,234	(210,705)	514,067
$ 189,889	228,189	74,427	(1,482)	491,023
		2020		$ 10,353,197

Freight segment $ 3,861,301 -	Gas station segment 10,534,961 200,937	Others 1,559,238 104,367	Reconciliation and elimination	Total 15,955,500 -
			- (305,304)
$ 3,861,301	10,735,898	1,663,605	(305,304)	15,955,500
$ 268,457	234,888	100,801	(141,005)	463,141
$ 202,196	221,326	69,431	-	492,953
				$ 10,042,999

153

(Continued)

(c) Geographic information

In presenting information on the basis of geography, segment revenue is based on the geographical location of customers and segment assets are based on the geographical location of the assets.

(i) Revenue from external customers:

Geographical information Taiwan China Vietnam	2021 $ 18,563,000 8 249,155	2020 15,689,572 37,213 228,715
	$ 18,812,163	15,955,500

(ii) Non-current asset:

Geographical information Taiwan China Vietnam	December 31, 2021 $ 4,919,031 1,457 10,829	December 31, 2020 5,252,836 852 11,968
	$ 4,931,317	5,265,656

Non-current assets include property, plant and equipment, right-of-use assets, intangible assets and other assets, excluding financial instruments and deferred tax assets.

(d) Information about major customers

The revenues from transactions with a single external customer amount to 10 percent or more of the operating revenues in the consolidated statements of comprehensive income for the years ended December 31, 2021 and 2020, are as follows:

A customer of freight segment and gas station segment	2021 $ 2,004,040	2020 1,817,126

154

V. The Parent Company-only Financial Statements for the Most Recent Fiscal Year, Certified by the

CPA

Independent Auditors’ Report

To the Board of Directors of Shan-Loong Transportation Co., Ltd.:

Opinion

We have audited the financial statements of Shan-Loong Transportation Co., Ltd. (“the Company”), which comprise the balance sheets as of December 31, 2021 and 2020, the statements of comprehensive income, changes in equity and cash flows for the years then ended and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters we judged shall be presented in the financial report as follows:

1. Revenue recognition

Please refer to note (4)(n) of the financial statements for the accounting policy of revenue recognition. Information regarding the revenue are shown in note (6)(p) of the financial statements.

Description of key audit matter:

The main activities of the Company include freight transportation, container trucking, truck repair and maintenance, and gas station. Revenue recognition is one of the significant matters of the financial statements. The amounts and changes of sales revenue may affect the users' understanding of the entire financial statements. Therefore, the revenue recognition test is one of the significant assessment items in our audit procedures.

155

3-1

Audit Procedures:

Our main audit procedures for the aforementioned key audit matters include testing the Company's controls surrounding revenue recognition in the sale and receipt cycle, including reconciliations between the general ledger and sales system; performing the detailed test of relevant vouchers, as well as assessing whether the Company’s timing on revenue recognition and the amounts recognized are in accordance with the related standards.

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

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

In preparing the 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 its operations, there is no realistic alternative but to do so.

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

156

3-2

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period 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 Jui-Lan Lo and Yiu-Kwan Au.

KPMG

Taipei, Taiwan (Republic of China) March 7, 2022

Notes to Readers

The accompanying financial statements are intended only to present the financial position, financial performance, and cash flows in accordance with the 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 financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’audit report and the accompanying financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and financial statements, the Chinese version shall prevail.

157

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) SHAN-LOONG TRANSPORTATION CO., LTD.

Balance Sheets

December 31, 2021 and 2020

(expressed in thousands of New Taiwan Dollars)

December 31, 2021 Assets Amount % Current assets: 1100 Cash and cash equivalents (note (6)(a)) $ 513,998 5 1170 Notes and accounts receivable, net (note (6)(c)) 520,683 5 1180 Notes and accounts receivable due from related parties, net (notes (6)(c) and (7)) 251,985 3 1476 Other current financial assets (notes (6)(d) and (7)) 28,350 - 1300 Inventories, net (note (6)(e)) 209,587 2 1470 Other current assets 39,624 1 1,564,227 16 Non-current assets: 1517 Non-current financial assets at fair value through other comprehensive income (note (6)(b)) 806,718 8 1550 Investments accounted for using the equity method, net (note (6)(f)) 2,508,995 26 1600 Property, plant and equipment (notes (6)(g)、(7) and (8)) 3,577,741 36 1755 Right-of-use assets (note (6)(h)) 1,067,859 11 1840 Deferred income tax assets (note (6)(m)) 36,360 - 1990 Other non-current assets (note (8)) 232,129 3 8,229,802 84 Total assets $ 9,794,029 100	December 31, 2020 Amount % 377,475 4 445,160 5 255,593 3 28,192 - 184,618 2 38,475 - 1,329,513 14 816,536 8 2,220,372 23 3,706,229 39 1,305,262 14 38,002 - 210,134 2 8,296,535 86 9,626,048 100	December 31, 2020 Amount % 377,475 4 445,160 5 255,593 3 28,192 - 184,618 2 38,475 - 1,329,513 14 816,536 8 2,220,372 23 3,706,229 39 1,305,262 14 38,002 - 210,134 2 8,296,535 86 9,626,048 100


		8,296,535
		9,626,048

December 31, 2021	December 31, 2021	December 31, 2021
Amount	%	Amount
$ 1,449,850 420,053 32,647 206,661 21,594 18,863 5,338 1,047,651	15 4 - 2 - - - 11 32 3 1 9 1 - 14 46 14 6 20 14 - 54 100	1,314,377 394,695 62,512 231,817 13,286 25,992 2,511 150,000
3,202,657		2,195,190
227,049 105,780 885,136 100,185 17,112		1,024,700 113,495 1,094,694 96,105 15,676
1,335,262		2,344,670
4,537,919		4,539,860
1,372,818 583,359 1,944,149 1,387,647 (31,863)		1,372,818 580,381 1,790,142 1,374,710 (31,863)
5,256,110		5,086,188
$ 9,794,029		9,626,048

158

See accompanying notes to financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) SHAN-LOONG TRANSPORTATION CO., LTD.

Statement of Comprehensive Income

For the years ended December 31, 2021 and 2020

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

2021	% 100 90 10 3 5 - 8 2 - - - - - - 1 - 1 3 - 3 - - - - - - - - - 3 3.06	2020	% 100 89 11 4 5 - 9 2 - - - - - - 1 - 1 3 - 3 - 2 4 - 6 - - - 6 9 2.73
Amount $ 17,237,755 15,572,968		Amount 15,076,884 13,415,428

1,664,787		1,661,456
543,308 828,483 -		540,940 794,530 -
1,371,791		1,335,470
292,996		325,986
64,601 3,267 (30,488) 1,853 34,877 283 130,222 (14,612)		55,633 134 (32,359) 1,954 23,791 (7,376) 85,346 (15,203)
190,003		111,920
482,999 67,492		437,906 66,572
415,507		371,334
(5,890) 59,284 (8,647) (7,418)		(13,406) 339,770 645,775 35,416
52,165		936,723
1,615 323		1,940 388
1,292		1,552
53,457		938,275
$ 468,964		1,309,609
$
$	3.04		2.72

159

See accompanying notes to financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) SHAN-LOONG TRANSPORTATION CO., LTD.

Statement of Changes in Equity

For the years ended December 31, 2021 and 2020

(expressed in thousands of New Taiwan Dollars)

Ordinary shares		Retained earnings	Retained earnings		Other equity
				Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Total other equity
	Legal reserve	Unappropriat ed retained earnings	Total retained earnings
$ 1,372,818 577,945 415,917 1,260,723 1,676,640 (24,781) 450,491 425,710 (31,863) 4,021,250
- - 29,096 (29,096) - - - - - - - - - (247,107) (247,107) - - - - (247,107)
- - 29,096 (276,203) (247,107) - - - - (247,107)
- 2,978 - - - - - - - 2,978
- - - 45,232 45,232 - (45,232) (45,232) - -
$ 1,372,818 583,359 481,074 1,463,075 1,944,149 (21,937) 1,409,584 1,387,647 (31,863) 5,256,110

160

See accompanying notes to financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) SHAN-LOONG TRANSPORTATION CO., LTD.

Statement of Cash Flows

For the years ended December 31, 2021 and 2020

(expressed in thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Net profit on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Dividend income Share of profit of subsidiaries, associates and joint ventures accounted for using the equity method Loss (gain) on disposal of property, plant and equipment and others Changes in operating assets and liabilities: Decrease (increase) in financial assets mandatorily measured at fair value through profit or loss Decrease (increase) in notes and accounts receivable Decrease (increase) in inventories Decrease (increase) in other current financial assets Decrease (increase) in other current assets Increase (decrease) in notes and accounts payable Increase (decrease) in contract liabilities Increase (decrease) in provisions Increase (decrease) in other payables and other current liabilities Increase (decrease) in net defined benefit liabilities Total adjustments Cash inflow (outflow) generated from (used in) operations Dividends received Interest paid Interest received Income taxes paid Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Acquisition of investments accounted for using the equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Proceeds from long-term borrowings Repayments of long-term borrowings Increase (decrease) in guarantee deposits received Payment of lease liabilities Cash dividends paid Net cash flows from (used in) financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2021 $ 482,999	2020 437,906
	483,523 - 30,488 (1,853) (34,877) (130,222) (6,566)	485,116 (165) 32,359 (1,954) (23,791) (85,346) 7,367
	340,493	413,586
	- (71,915) (24,969) 2,257 (8,988) 135,473 8,308 (7,129) 28,185 (1,810)	300,210 38,026 7,614 (14,816) 46,064 (165,101) 460 12,897 60,755 (20,059)
	59,412	266,050
	399,905	679,636
	882,904 116,078 (30,488) 1,853 (86,070)	1,117,542 83,747 (32,359) 1,954 (15,700)
	884,277	1,155,184
	(7,672) (164,000) (216,776) 86,025 (14,389)	- (36,000) (512,351) 12,264 5,159
	(316,812)	(530,928)
	200,000 (100,000) 1,436 (230,358) (302,020)	949,000 (989,300) 475 (225,309) (247,107)
	(430,942)	(512,241)
	136,523 377,475	112,015 265,460
	$ 513,998	377,475

161

See accompanying notes to financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

(2) Approval date and procedures of the financial statements

These financial statements were authorized for issue by the Board of Directors on March 7, 2022.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2021:

Amendments to IFRS 4 “Extension of the Temporary Exemption from Applying IFRS 9”
Amendments to IFRS 9, IAS39, IFRS7, IFRS 4 and IFRS 16 “Interest Rate Benchmark Reform— Phase 2”
Amendments to IFRS 16 “Covid-19-Related Rent Concessions beyond June 30, 2021”
(b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a significant impact on its financial statements:

Amendments to IAS 16 “Property, Plant and Equipment － Proceeds before Intended Use”
Amendments to IAS 37 “Onerous Contracts － Cost of Fulfilling a Contract”
Annual Improvements to IFRS Standards 2018–2020
Amendments to IFRS 3 “Reference to the Conceptual Framework”

162

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

The Company does not expect the following new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its financial statements:

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”
Amendments to IAS 1 “Disclosure of Accounting Policies”
Amendments to IAS 8 “Definition of Accounting Estimates”
Amendments to IAS 12 “Deferred Tax related to Assets and Liabilities arising from a Single Transaction”

(4) Summary of significant accounting policies:

The significant accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the parent-company-only financial statements.

(a) Statement of compliance

These financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(b) Basis of preparation
(i) Basis of measurement Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:
- 1) Financial instruments at fair value through profit or loss are measured at fair value;
- 2) Financial assets at fair value through other comprehensive income are measured at fair value; and
- 3) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in note (4)(p).
(ii) Functional and presentation currency
- The functional currency of the Company is determined based on the primary economic environment in which the Company operates. The financial statements are presented in New Taiwan Dollar, which is the Company’s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

163

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(c) Foreign currencies

(i) Foreign currency transaction

Transactions in foreign currencies are translated into the respective functional currencies of the Company at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of translation. Exchange differences are recognized in profit or loss except for an investment in equity securities designated as at fair value through other comprehensive income, which are recognized in other comprehensive income.

(ii) Foreign operations

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

(d) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

(i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or
(iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

164

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

(i) It is expected to be settled in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.
(e) Cash and cash equivalents

Bank overdrafts that are repayable on demand and form an integral part of the Company’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

(f) Financial instruments

Accounts receivable and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at: amortized cost; Fair value through other comprehensive income – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

165

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

‧it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
‧its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

‧it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
‧its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

166

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

4) Business model assessment

The Company makes an assessment of the objective of the business model in which a financial asset is held at portfolio level because this best reflects the way the business is managed and information is provided to management. The information considered includes:

‧the stated policies and objectives for the portfolio and the operation of those policies in practice. These include whether management’s strategy focuses on earning contractual interest income, maintaining a particular interest rate profile, matching the duration of the financial assets to the duration of any related liabilities or expected cash outflows or realizing cash flows through the sale of the assets;
‧how the performance of the portfolio is evaluated and reported to the Company’s management;
‧the risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed;
‧the frequency, volume and timing of sales of financial assets in prior periods, the reasons for such sales and expectations about future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, and are consistent with the Company’s continuing recognition of the assets.

Financial assets that are held for trading or are managed and whose performance is evaluated on a fair value basis are measured at FVTPL.

5) Assessment whether contractual cash flows are solely payments of principal and interest

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers:

‧contingent events that would change the amount or timing of cash flows;
‧terms that may adjust the contractual coupon rate, including variable rate features;

167

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

‧prepayment and extension features; and
‧terms that limit the Company’s claim to cash flows from specified assets (e.g. non-recourse features)

6) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes and accounts receivable, other receivables, guarantee deposit paid and other financial assets), and contract assets.

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

‧bank balances and other receivables for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for accounts receivable and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment as well as forward-looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 60 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 90 days past due or the debtor is unlikely to pay its credit obligations to the Company in full.

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings’. The counterparties of the time deposits held by the Company are the financial institutions with investment grade credit ratings. Therefore, the credit risk is considered to be low.

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

168

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

The maximum period considered when estimating ECLs is the maximum contractual period over which the Company is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

‧significant financial difficulty of the borrower or issuer;
‧a breach of contract such as a default or being overdue;
‧the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
‧it is probable that the borrower will enter bankruptcy or other financial reorganization; or
‧the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

7) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

169

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(ii) Financial liabilities and equity instruments
1) Classification of debt or equity

Debt and equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Equity instrument

3) Treasury shares

4) Compound financial instruments

Compound financial instruments issued by the Company comprise convertible bonds that can be converted to ordinary shares at the option of the holder, when the number of shares to be issued is fixed and does not vary with changes in fair value.

Interest related to the financial liability is recognized in profit or loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognized.

170

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

5) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss.

6) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

7) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(g) Inventories

(h) Investment in associates

Associates are those entities in which the Company has significant influence, but not control or joint control, over their financial and operating policies.

The parent-company-only financial statements include the Company’s share of the profit or loss and other comprehensive income of the associates, after adjustments, in order to be consistent with the Company’s accounting policies, from the date on which significant influence commences until the date on which significant influence ceases.

171

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

Gains and losses resulting from transactions between the Company and its associate are recognized only to the unrelated Company’s interests in the associate. When the Company’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(i) Investment in subsidiaries

When preparing the parent-company-only financial statements, investment in subsidiaries which are controlled by the Company is accounted for using the equity method. Under the equity method, the amounts of net income, other comprehensive income and equity attributable to shareholders of the Company in the parent-company-only financial statements are equal to those in the consolidated financial statements.

Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

(j) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

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

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) Depreciation

Land is not depreciated.

172

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

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

1) Buildings: 31~56 years
2) Building improvements: 1~27 years
3) Gasoline equipment: 1~21 years
4) Transportation equipment: 5~19 years
5) Miscellaneous equipment: 1~21 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(k) Lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

1) fixed payments, including in-substance fixed payments;
2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

173

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

1) there is a change in future lease payments arising from the change in an index or rate; or
2) there is a change of its assessment on whether it will exercise an extension or termination option; or
3) there is any lease modifications

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

As a practical expedient, the Company elects not to assess whether all rent concessions that meets all the following conditions are lease modifications or not:

1) the rent concessions occurring as a direct consequence of the covid-19 pandemic;
2) the change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;
3) any reduction in lease payments affects only those payments originally due on, or before, June 30, 2021; and
4) there is no substantive change into other terms and conditions of the lease.

174

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

(ii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

(l) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

175

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(m) Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

(n) Revenue recognition

(i) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’s main types of revenue are explained below.

1) Sale of goods

The Company sells gas to clients and consumers. The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

2) Truck repair and freight transportation services

The Company provides truck repair and freight transportation services. Revenue from providing services is recognized in the accounting period in which the services are rendered.

3) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

(o) Government grants

The government grants are recognized as a deduction of the cost of assets if there is reasonable assurance that they will be received and the Company will comply with the conditions associated with the grant; they are then recognized in profit of loss over the life of a depreciable asset as a reduced depreciation expense.

176

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(p) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Termination benefits

Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of those benefits and when the Company recognizes costs for a restructuring. If benefits are not expected to be settled wholly within 12 months of the reporting date, then they are discounted.

(iv) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

177

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(q) Income taxes

The Company has determined that interest and penalties related to income taxes, including uncertain tax treatment, do not meet the definition of income taxes, and therefore accounted for them under IAS37.

(i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profits (losses) at the time of the transaction;
(ii) temporary differences related to investments in subsidiaries and joint arrangements and it is probable that they will not reverse in the foreseeable future; and
(iii) taxable temporary differences arising on the initial recognition of goodwill.

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

(i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and
(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

178

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
(r) Earnings per share

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

(s) Operating segments

The operating segment information is disclosed in the consolidated financial statements. Therefore, the Company will not disclose the operating segment information in the parent-company-only financial statements.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

In preparing these parent-company-only financial statements, management has made judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

There are no critical judgments in applying accounting policies that have significant effects on the amounts recognized in the financial statements.

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

Cash on hand Checking accounts and demand deposits		December 31, 2021 $ 6,674 507,324		December 31, 2020 6,012 371,463

		$ 513,998		377,475

Please refer to note (6)(r) for the interest rate risk and sensitivity analysis of the financial assets of the Company.

179

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(b) Financial assets at fair value through other comprehensive income

Equity investments at fair value through other comprehensive income: Stocks listed on domestic markets Stocks unlisted on domestic markets		December 31, 2021 $ 683,977 122,741		December 31, 2020 658,788 157,748

		$ 806,718		816,536

(i) The Company designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Company intends to hold for long-term strategic purposes.
(ii) In April, 2021, the Company acquired some part of shares of Ko Loong Industry Co., Ltd. (Ko Loong), and the percentage of ownership increased to 19.75%. The Company assessed that it had significant influence over Ko Loong. Therefore, the Company derecognized the assets, which were accounted for under the financial assets measured at fair value through other comprehensive income, at the fair value amounted to $76,774. The gain on disposal of the investments amounting to $45,232 was transferred to retained earnings from other equity. There were no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments as of for the year ended December 31, 2020.

(iii) For market risk of the Company, please refer to note (6)(r).

(iv) The Company had not been pledged any financial assets as collateral for its borrowings.
(c) Notes and accounts receivable (including related parties)

Notes receivable Accounts receivable Less: allowance for impairment Notes and accounts receivable, net Notes and accounts receivable due from related parties, net		December 31, 2021 $ 34,899 740,262		December 31, 2020 27,822 675,424

		775,161 (2,493)		703,246 (2,493)
		$ 772,668		700,753
		$ 520,683		445,160
		$ 251,985		255,593

180

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, notes and accounts receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information, including the reasonable prediction of historical credit loss experience and the future economic situation. As of December 31, 2021 and 2020, the loss allowance provisions were determined as follows:

December 31, 2021	December 31, 2021	December 31, 2021	December 31, 2021	Loss allowance provision - 76 124 - - 2,145 88
Gross carrying amount Notes receivable Accounts receivable $ 26,878 735,679 5,533 2,114 2,488 - - - - - - 2,381 - 88 $ 34,899 740,262		Weighted-average loss rate
Notes receivable		Notes receivable -% 1% 5% 10% 10% 10% 100%	Accounts receivable
$ 26,878 5,533 2,488 - - - - $ 34,899			-% 1% 60% 60% 80% 90% 100%
	740,262			2,433

December 31, 2020	December 31, 2020	December 31, 2020	December 31, 2020	Loss allowance provision - 79 99 57 1,481 513 88
Gross carrying amount Notes receivable Accounts receivable $ 17,442 671,143 7,821 111 1,984 - 575 - - 1,851 - 2,231 - 88 $ 27,822 675,424		Weighted-average loss rate
Notes receivable		Notes receivable	Accounts receivable
$ 17,442 7,821 1,984 575 - - - $ 27,822		-% 1% 5% 10% 10% 10% 100%	-% 1% 60% 60% 80% 90% 100%
	675,424			2,317

The movements in the allowance for notes and accounts receivable were as follows:

Balance on January 1 (same as balance on December 31)

	2021 $ 2,493		2020 2,493

As of December 31, 2021 and 2020, the Company did not pledge any notes and accounts receivable as collateral for its borrowings.

181

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

(d) Other current financial assets

Other receivables Less: loss allowance Refundable deposits-current		December 31, 2021 $ 39,035 (13,100) 25,935 2,415 $ 28,350		December 31, 2020 41,292 (13,100)

				28,192 -
				28,192

For further credit risk information, please refers to note (6)(r).

(e) Inventories

Premium Diesel Unleaded Gasoline #92 Unleaded Gasoline #95 Unleaded Gasoline #98 By-product and other		December 31, 2021 $ 64,801 48,328 67,696 28,427 335		December 31, 2020 52,877 44,618 58,360 28,151 612

		$ 209,587		184,618

The Company recognized as cost of sales amounted to $12,258,636 and $9,706,790, respectively, for the years ended December 31, 2021 and 2020.

The gain on physical inventory amounted to $40,492 and $32,082, respectively, which was recorded as cost of sales for the years ended December 31, 2021 and 2020.

As of December 31, 2021 and 2020, the Company did not pledge any inventories as collateral for its borrowings.

(f) Investments accounted for using the equity method

The components of investments accounted for using the equity method at the reporting date were as follows:

Subsidiaries Associates	December 31, 2021 $ 2,437,670 71,325 $ 2,508,995		December 31, 2020 2,220,372 -

			2,220,372

182

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(i) Subsidiaries

Please refer to the consolidated financial statements for the year ended December 31, 2021.

(ii) Associates
1) The Company originally held certain portion of the common shares of Ko Loong, which was accounted for under the financial assets at fair value through other comprehensive income. In April 2021, the Company acquired additional shares of Ko Loong, resulting in its percentage of ownership to increase to 19.75%. Hence, the Company assessed that it had significant influence over Ko Loong, which led the Company to remeasure the fair value of its assets of the acquisition date, and account it for using the equity method.
2) The Company’s financial information on investments accounted for using the equity method that are individually insignificant was as follows:

Attributable to the Company: Profit (loss) Other comprehensive income (loss) Comprehensive income (loss)		2021 $ 2,601 (10,329)
		$ (7,728)

(iii) As of December 31, 2021 and 2020, the Company did not provide any investment accounted for using the equity method as collateral for its loans.

(g) Property, plant and equipment

The movements in the property, plant and equipment of the Company were as follows:

Land	Buildings Gasoline equipment	Buildings Gasoline equipment	Transportati on equipment Miscellane ous equipment Unfinishe d construction and equipment under installation	Transportati on equipment Miscellane ous equipment Unfinishe d construction and equipment under installation	Transportati on equipment Miscellane ous equipment Unfinishe d construction and equipment under installation	Total
$ 2,008,967 - - (2,426) $ 2,006,541 $ 1,853,346 155,621 - - $ 2,008,967	810,856 71,680 (224) 18,983 901,295 732,247 103,008 (24,399) - 810,856	152,190 3,312 - - 155,502 135,032 17,298 (140) - 152,190	2,022,782 51,581 (86,218) - 1,988,145 1,935,933 155,781 (68,932) - 2,022,782	501,787 47,288 (118,889) - 430,186 446,216 67,173 (11,602) - 501,787	- 13,296 - 615	5,496,582 187,157 (205,331) 17,172
					13,911	5,495,580
					- - - -	5,102,774 498,881 (105,073) -
					-	5,496,582

183

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

Land	Buildings Gasoline equipment	Buildings Gasoline equipment	Transportati on equipment Miscellane ous equipment Unfinishe d construction and equipment under installation	Transportati on equipment Miscellane ous equipment Unfinishe d construction and equipment under installation	Transportati on equipment Miscellane ous equipment Unfinishe d construction and equipment under installation	Total
$ - - - $ - $ - - - $ - $ 2,006,541 $ 1,853,346 $ 2,008,967	335,278 33,405 (48) 368,635 323,810 28,747 (17,279) 335,278 532,660 408,437 475,578	98,318 13,042 - 111,360 83,802 14,656 (140) 98,318 44,142 51,230 53,872	1,059,219 155,953 (77,628) 1,137,544 961,967 156,355 (59,103) 1,059,219 850,601 973,966 963,563	297,538 44,675 (41,913) 300,300 256,767 49,682 (8,911) 297,538 129,886 189,449 204,249	- - -	1,790,353 247,075 (119,589)
					-	1,917,839
					- - -	1,626,346 249,440 (85,433)
					-	1,790,353
					13,911	3,577,741
					-	3,476,428
					-	3,706,229

(i) The Company is restricted by the law and cannot acquire agricultural land in the name of the Company. As of December 31, 2020, some pieces of agricultural land located in Mailiao and Taoyuan amounting to $939,227, which were accounted under property, plant and equipment, were registered in the name of the former chairman of the Company, Wen-Ming Cheng (the chairman at the time of the transaction), and other individuals. In the first quarter of 2021, some part of the abovementioned land had been completed the transfer procedures after the change of land category. As of December 31, 2021, some pieces of agricultural land located in Mailiao and Taoyuan amounting to $228,581, which were accounted under property, plant and equipment, were registered in the name of the chairman of the Company, Jen-Hao Cheng, the former chairman of the Company, Wen-Ming Cheng (the chairman at the time of the transaction) and other individuals. The Company has the “Other rights certificate” of the land or has an agreement with both parties to verify that the Company is the actual owner of the land.
(ii) In September 2020, the Company entered into a contract with a related party, Cheng Loong Corporation to purchase the land and building for office space located in Banqiao District, New Taipei City amounting to $169,189 (excluding tax). The registration has been completed in December 2020. Please refer to note (7)(b)(iv)(l) for the details.
(iii) As of December 31, 2021 and 2020, the portion of property, plant and equipment of the Company had been pledged as collateral for its credit lines of the bank. Please refer to note (8).

184

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

(h) Right-of-use assets

The Company leases many assets including land and buildings. Information about leases for which the Company as a lessee is presented below:

Land	Buildings 1,279,117 102,765 (3,065)	Others 14,281 - -	Total 1,746,353 184,927 (273,774)
$ 452,955 82,162 (270,709) $ 264,408 $ 406,780 46,175 - $ 452,955 $ 101,509 52,662 (84,928) $ 69,243 $ 44,571 56,938 - $ 101,509 $ 195,165 $ 362,209 $ 351,446
	1,378,817	14,281	1,657,506
	1,057,744 224,276 (2,903)	14,281 - -	1,478,805 270,451 (2,903)
	1,279,117	14,281	1,746,353
	335,697 181,132 (2,964)	3,885 2,654 -	441,091 236,448 (87,892)
	513,865	6,539	589,647
	161,767 176,084 (2,154)	1,231 2,654 -	207,569 235,676 (2,154)
	335,697	3,885	441,091
	864,952	7,742	1,067,859
	895,977	13,050	1,271,236
	943,420	10,396	1,305,262

The Company’s right-of-use assets increased resulting from the new lease contracts including gas stations, parking space and container yard. The decrease mainly came from terminating the lease contract with Cheng Loong which is located in Qingshui District, Taichung City.

(i) Short-term borrowings

December 31, 2021 $ -	December 31, 2021 $ -	December 31, 2020 -

$ 515,000		695,000
	-%	-%

For information on interest rate risk and liquidity risk of the Company, please refer to note (6)(r).

185

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(j) Long-term borrowings

Currency	Maturity year	December 31, 2021	December 31, 2021	December 31, 2021
NTD	2022~2025	$ 1,274,700 1,047,651 $ 227,049 $ 254,300 0.97%~1.3 %	$ 1,274,700 1,047,651
			$ 227,049
			$ 254,300
				0.97%~1.3

(i) Issuance and repayment of the loans

The Company’s additional amounts in loans for the years ended December 31, 2021 and 2020, were $200,000 and $949,000, respectively; and the repayments, including prepaying the loans, were $100,000 and $989,300, respectively.

(ii) As of December 31, 2021, the repayment schedule for the long-term borrowings was as follows:

Period 2022.01.01~2022.12.31 2023.01.01~2023.12.31 2024.01.01~2024.12.31 2025.01.01~2025.12.31		Amount $ 1,047,651 154,015 54,666 18,368

		$ 1,274,700

(iii) Please refer to note (6)(r) for the interest rate risk and liquidity risk information of the Company.

(iv) Please refer to note (8) for the collateral for the long-term borrowings.

(k) Lease liabilities

The lease liabilities of the Company were as follows:

Current Non-current		December 31, 2021 $ 206,661		December 31, 2020 231,817

		$ 885,136		1,094,694

For the maturity analysis, please refer to note (6)(r).

186

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

The amounts recognized in profit or loss were as follows: Interest on lease liabilities Expenses relating to short-term leases Lease modification gains (recorded as other gains and losses) COVID-19-related rent concessions (recognized as deduction of rent expenses)		2021	2020
		$ 16,453 $ 16,754 $ (3,401) $ -	18,060
			13,169
			(9)
			(803)

The amount recognized in the statement of cash flows for the Company was as follows:

Total cash outflow for leases		2021 $ 263,565		2020 255,735

(i) Leases of land and buildings

The Company leases a number of office space, gas stations, warehouses and land. These leases typically run for a period of 3 to 10 years.

(ii) Other leases

The Company leases a number of stackers with short-term contract terms. The Company has chosen not to recognize right-of-use assets and lease liabilities for these leases.

(l) Employee benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value is as follows:

Present value of the defined benefit obligations Fair value of plan assets Net defined benefit liabilities		December 31, 2021 $ (247,658) 147,473		December 31, 2020 (305,270) 209,165

		$ (100,185)		(96,105)

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

187

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

2) Movements in present value of the defined benefit obligations

The movements in present value of the defined benefit obligations for the Company were as follows:

Defined benefit obligations at January 1 Benefits paid Pensions for employees who are transferred from affiliated companies Current service costs and interest cost Remeasurement in net defined benefit liabilities (assets) Defined benefit obligations at December 31		2021 $ (305,270) 72,920 (1,301) (5,704) (8,303)		2020 (306,942) 27,605 - (7,620) (18,313)

		$ (247,658)		(305,270)

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company were as follows:

Fair value of plan assets at January 1 Expected return on plan assets Remeasurement of net defined benefit liabilities (assets) Contributions paid by the employer Benefits paid Fair value of plan assets at December 31		2021 $ 209,165 1,297 2,413 7,518 (72,920)		2020 204,184 2,003 4,907 22,714 (24,643)

		$ 147,473		209,165

4) Movements of the effect of the asset ceiling

In 2021 and 2020, there were no movements on the effect of the Company’s defined benefit plans asset ceiling.

188

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

5) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

Current service costs Interest cost Expected return on plan assets Operating cost Administration expenses		2021 $ 3,829 1,875 (1,297)		2020 4,623 2,997 (2,003)

		$ 4,407		5,617
		$ 2,318 2,089		2,643 2,974
		$ 4,407		5,617

6) Remeasurement of net defined benefit liabilities (assets) recognized in other comprehensive income

The Company’s remeasurement of the net defined benefit liability (asset) recognized in other comprehensive income, was as follows:

Accumulated amount at January 1 Recognized during the period Accumulated amount at December 31		2021 $ (156,557) (5,890)		2020 (143,151) (13,406)

		$ (162,447)		(156,557)

7) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increase rate	December 31, 2021 0.625% 1.000%	December 31, 2020
		0.625% 1.000%

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date is $5,732.

The weighted average lifetime of the defined benefits plans is 12.93 years.

8) Sensitivity analysis

189

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31, 2021 Discount rate Future salary increasing rate December 31, 2020 Discount rate Future salary increasing rate	Influences of defined benefit obligations Increased 0.25% Decreased 0.25% $ (5,964) 6,182 6,074 (5,887) (7,360) 7,648 7,499 (7,262)
	Increased 0.25% $ (5,964) 6,074 (7,360) 7,499

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2021 and 2020.

(ii) Defined contribution plans

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The Company recognized the pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $49,276 and $47,533 for the years ended December 31, 2021 and 2020, respectively.

190

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

(m) Income taxes
(i) Income tax expenses
- 1) The components of income tax in the years 2021 and 2020 were as follows:

2021 Current tax expenses Current period $ 63,947 Land value increment tax 2,426 Adjustment for prior periods 97 66,470 Deferred tax expenses Origination and reversal of temporary differences 1,226 Under (over) provision in prior periods (204) 1,022 Income tax expenses $ 67,492 The amounts of income tax recognized directly in other comprehensive and 2020 were as follows: 2021 Items that will not be reclassified subsequently to profit or loss: Remeasurement from defined benefit plans $ (1,178) Unrealized gains (losses) on equity instruments at fair value through other comprehensive income 3,813 Share of other comprehensive income of subsidiaries, associates, and joint ventures accounted for using the equity method (10,053) $ (7,418) Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign financial statements $ 323		2021 $ 63,947 2,426 97		2020 71,406 - (4,367)
		66,470		67,039
		1,226 (204)		(2,957) 2,490
		1,022		(467)
		$ 67,492		66,572

		$ (7,418)		35,416
		$ 323		388

2) The amounts of income tax recognized directly in other comprehensive income for 2021 and 2020 were as follows:

191

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

3) Reconciliation of income tax and profit before tax for 2021 and 2020 is as follows:

Profit before tax Income tax calculated based on local tax rate Net gains or losses on domestic investments accounted for using the equity method Tax-exempt income Land value increment tax Under (over) provision in prior periods Non-deductible expenses and others Income tax expenses		2021 $ 482,999		2020 437,906

		96,600 (26,629) (6,975) 2,426 (107) 2,177		87,581 (17,606) (4,800) - (1,877) 3,274
		$ 67,492		66,572

(ii) Deferred tax assets and liabilities
1) Unrecognized deferred tax assets: None.
2) Recognized deferred tax assets and liabilities

Changes in the amount of deferred tax assets and liabilities for 2021 and 2020 were as follows:

Defined benefit plans	Exchange differences on translation	Others 10,964 (2,135) -	Total 38,002 (2,497) 855
$ 15,816 (362) 1,178	11,222 - (323)
$ 16,632	10,899	8,829	36,360
$ 17,147 (4,012) 2,681	11,610 - (388)	10,137 827 -	38,894 (3,185) 2,293
$ 15,816	11,222	10,964	38,002

192

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

Unrealized gains (losses) on financial assets	Share of other comprehensive income accounted for using the equity method	Overseas investment income accounted under the equity method	Others 4,580 (890) -	Total 113,495 (1,475) (6,240)
$ 31,244 - 3,813	18,061 - (10,053)	59,610 (585) -
$ 35,057	8,008	59,025	3,690	105,780
$ 11,208 - 20,036	- - 18,061	60,147 (537) -	7,695 (3,115) -	79,050 (3,652) 38,097
$ 31,244	18,061	59,610	4,580	113,495

(iii) Assessment of tax

The tax returns of the Company for the years through 2019 were assessed by the Taipei National Tax Administration.

(n) Capital and other equity
(i) Ordinary shares

(ii) Capital surplus

The balances of capital surplus were as follows:

Additional paid-in capital Treasury share transactions Other	December 31, 2021 $ 520,206 61,912 1,241 $ 583,359	December 31, 2021 $ 520,206 61,912 1,241 $ 583,359		December 31, 2020 520,206 58,934 1,241

		$ 583,359		580,381

193

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

(iii) Retained earnings

1) Legal reserve

2) Special reserve

－ 3) Retained earnings earnings distribution and dividend policy

194

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

Based on the resolutions of the annual stockholders’ meetings held on July 1, 2021 and May 29, 2020, the appropriations of dividends from the distributable retained earnings of 2020 and 2019, respectively, were as follows:

2020 Amount per share Total amount Dividends distributed to ordinary shareholders: Cash $ 2.2 302,020	2020	2020	2020		2019 Amount per share Total amount 1.8 247,107	2019 Amount per share Total amount 1.8 247,107
			Total amount		Amount per share 1.8
			302,020

On March 7, 2022, the Company's Board of Directors resolved to appropriate the 2021 earnings. These earnings were appropriated as follows:

Dividends distributed to ordinary shareholders: Cash	2021 Amount per share Total amount $ 2.5 343,204

(iv) Treasury shares

In accordance with the requirements of Securities and Exchange Act, treasury shares held by the Company should not be pledged, and do not hold any shareholder rights before their transfer. As of December 31, 2021 and 2020, since the subsidiary of the Company, Shan-Loong Investment, held a number of the ordinary shares of the Company, the Company accounted it under the treasury stock. The total shares and amounts were as follows:

December 31, 2021 Shares (thousands) Amount 1,353 $ 31,863 $ 49,401	December 31, 2020 Shares (thousands) Amount 1,353 31,863 43,514	December 31, 2020 Shares (thousands) Amount 1,353 31,863 43,514
Shares (thousands) 1,353	Shares (thousands) 1,353

		43,514

195

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

For the years ended December 31, 2021 and 2020, Shan-Loong Investment, received the cash dividend which were distributed by the Company, amounting to $2,978 and $2,436, respectively, which were recorded as capital surplus - treasury share transactions.

(o) Earnings per share

The Company’s basic and diluted earnings per share were calculated as follows:

Basic earnings per share: Profit attributable to ordinary shareholders of the Company Weighted average number of ordinary shares (thousands) Basic earnings per share (dollars) Diluted earnings per share: Profit attributable to ordinary shareholders of the Company (after adjustment the influence of potential ordinary shares) Weighted average number of ordinary shares (thousands) Dilutive effect of potential ordinary shares (thousands): Employee share bonus Weighted average number of ordinary shares (after adjustment the influence of potential ordinary shares) Diluted earnings per share (dollars)		2021 $ 415,507		2020 371,334
		135,928		135,928
		$ 3.06		2.73
		$ 415,507		371,334
		135,928 707		135,928 567
		136,635		136,495
		$ 3.04		2.72

(p) Revenue from contracts with customers (i) Disaggregation of revenue

	2021	2021	Total 17,237,755
Transportati on segment $ 3,649,042	Gasoline station segment 13,155,382	Other segment 433,331

			Total 15,076,884
Transportati on segment $ 3,595,373	Gasoline station segment 10,534,961	Other segment 946,550

196

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

(ii) Contract balances

December 31, 2021 $ 775,161 (2,493) $ 772,668 $ 21,594	December 31, 2020 703,246 (2,493)	January 1, 2020 741,272 (2,493)

$ 772,668	700,753	738,779
$ 21,594	13,286	12,826

For details on accounts receivable and allowance for impairment, please refer to note (6)(c).

The major change in the balance of contract assets and liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received.

(q) Employee compensation and directors' and supervisors' remuneration

The amounts, as stated in the financial statements, are identical to those of the actual distributions in 2021 and 2020. Related information would be available at the Market Observation Post System Website.

197

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

(r) Financial instruments
(i) Credit risk
- 1) Credit risk exposure

The carrying amount of financial assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

As of December 31, 2021 and 2020, the accounts receivable amounted to $250,633 and $252,845, respectively, comes from one of the Company’s significant customer, whose main activities is the manufacturing and sale of paper products.

3) Receivables credit risk

For credit risk exposure of notes and accounts receivable, please refer to note 6(c). Other financial assets measured at amortized cost include other receivables, please refer to note (6)(d).

The loss allowance provision of other receivables was determined as follows:

Balance on January 1 (same as balance on December 31)

	2021 $ 13,100		2020 13,100

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments.

December 31, 2021 Non-derivative financial liabilities Notes and accounts payable Other payables Lease liabilities (including current and non-current) Long-term borrowings (including current portion) Guarantee deposits received		Carrying amount	Contractu al cash flows	Contractu al cash flows		Within a year		1~2years		Over 2 years - - (733,957) (75,637) (17,112)
		$ 1,449,850 420,053 1,091,797 1,274,700 17,112		(1,449,850) (420,053) (1,143,075) (1,290,233) (17,112)		(1,449,850) (420,053) (220,008) (1,057,512) -		- - (189,110) (157,084) -
		$ 4,253,512		(4,320,323)		(3,147,423)		(346,194)		(826,706)

198

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

December 31, 2020 Non-derivative financial liabilities Notes and accounts payable Other payables Lease liabilities (including current and non-current) Long-term borrowings (inculding current portion) Guarantee deposits received		Carrying amount	Contractu al cash flows	Contractu al cash flows		Within a year		1~2years		Over 2 years - - (915,522) (132,281) (15,676)
		$ 1,314,377 394,695 1,326,511 1,174,700 15,676		(1,314,377) (394,695) (1,391,845) (1,200,915) (15,676)		(1,314,377) (394,695) (248,215) (162,480) -		- - (228,108) (906,154) -
		$ 4,225,959		(4,317,508)		(2,119,767)		(1,134,262)		(1,063,479)

The Company does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Currency risk

As of December 31, 2021 and 2020, the Company’s financial assets and liabilities were not exposed to significant foreign currency risks.

(iv) Interest rate analysis

The details of financial assets and liabilities exposed to interest rate risk were as follows:

Variable rate instruments (Carrying amount): Financial assets Financial liabilities	December 31, 2021 $ 503,014 -	December 31, 2020 363,080 -

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets and liabilities with variable interest rates, the analysis is based on the assumption that the amount of assets and liabilities outstanding at the reporting date were outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents the Company’s management’s assessment of the reasonably possible interest rate change.

If the interest rate had increased or decreased by 0.25%, the Company’s net profit before tax would have increased or decreased by $1,258 and $908, respectively, for the years ended December 31, 2021 and 2020, which would be mainly resulted from the bank deposits.

199

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

(v) Other market price risk

2021	2021	Profit before tax -	2020 Other comprehensive income before tax 40,827 (40,827)	Profit before tax -
Other comprehensive income before tax $ 40,336 $ (40,336)

	$ (40,336)	-	(40,827)	-

(vi) Fair value of financial instruments
1) Procedure of valuation and Fair value hierarchy

The Company’s accounting policies and disclosure include fair value method on financial assets and financial liabilities. The Company’s management is responsible in performing independent test on fair value by using independent source of information to obtain the fair value which is close to the market status. The management also confirms the independence, reliability and matching of the information source, and regularly test the valuation model, update the input and other information, and make necessary adjustment to ensure the output of valuation is reasonable.

The Company uses observable market data to evaluate its assets and liabilities when it is possible. The different inputs of levels of fair value hierarchy in determining the fair value are as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly (i.e. as prices ） or indirectly （ i.e. derived from prices).
Level 3: inputs for assets or liabilities that are not based on observable market data (unobservable inputs).
2)
The categories and the fair value of financial instruments

The carrying amount and fair value of the Company’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

200

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

	December 31, 2021	December 31, 2021	December 31, 2021
Carrying amount $ 683,977 122,741		Fair	Value
	Level 1 683,977 - - - - - - - - - - -	Level 2 - - - - - - - - - - - -	Level 3 - 122,741 - - - - - - - - - -

806,718
513,998 520,683 251,985 28,350 202,150
1,517,166
$ 2,323,884
$ 1,449,850 420,053 1,091,797 1,274,700 17,112
$ 4,253,512

201

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

	December 31, 2020	December 31, 2020	December 31, 2020
Carrying amount $ 658,788 157,748		Fair	Value
	Level 1 658,788 - - - - - - - - - - -	Level 2 - - - - - - - - - - - -	Level 3 - 157,748 - - - - - - - - - -

816,536
377,475 445,160 255,593 28,192 190,176
1,296,596
$ 2,113,132
$ 1,314,377 394,695 1,326,511 1,174,700 15,676
$ 4,225,959

3) Valuation techniques for financial instruments not measured at fair value

The Company’s valuation techniques and assumptions used for financial instruments not measured at fair value are as follows:

202

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

4) Valuation techniques for financial instruments measured at fair value

Non-derivative financial instruments

The measurement of fair value of a non-active market financial equity instruments held by the Company which do not have quoted market prices are based on the comparable market approach, with the use of key assumptions of price-to-book ratio of comparable listed companies as its basic measurement. These assumptions have been adjusted for the effect of discount for lack of marketability of the equity securities.

5) There were no transfers from one level to another of the Company for the years ended December 31, 2021 and 2020.
6) Reconciliation of Level 3 fair values

Balance on January 1, 2021 Total gains and losses recognized: In other comprehensive income Purchase Derecognized Balance on December 31, 2021		Financial assets at fair value through other comprehensive income Unquoted equity instruments $ 157,748 34,095 7,672 (76,774) $ 122,741	Financial assets at fair value through other comprehensive income Unquoted equity instruments $ 157,748 34,095 7,672 (76,774) $ 122,741


			$ 122,741

203

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

Balance on January 1, 2020 Total gains and losses recognized: In other comprehensive income Balance on December 31, 2020		Financial assets at fair value through other comprehensive income Unquoted equity instruments $ 102,807 54,941 $ 157,748	Financial assets at fair value through other comprehensive income Unquoted equity instruments $ 102,807 54,941 $ 157,748


			$ 157,748

Total gains and losses recognized: In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income”	2021 $ 1,036	2020
		54,941

7) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Company’s financial instruments that use Level 3 inputs to measure fair value include "fair value through other comprehensive income – equity investments".

Most of fair value measurements of the Company which are categorized as equity investment instruments into level 3 have several significant unobservable inputs. Significant unobservable inputs of equity instruments without quoted price are independent of each other.

Quantified information of significant unobservable inputs was as follows:

Item	Valuation technique Comparable transaction method 〃 Net asset value method	Significant unobservable inputs ‧Lack-of-Marketability discount rate (30%~35% and 30%, respectively, on December 31, 2021 and 2020) ‧Price-Book ratio (0.91~1.6 and 1.13~2.82, respectively, on December 31, 2021 and 2020) ‧Net Asset Value	Inter-relationship between significant unobservable inputs and fair value measurement ‧The higher the Lack-of-Marketabilit y discount rate is, the lower the fair value will be. ‧The higher the multiple is, the higher the fair value will be. ‧Not applicable
Financial assets at fair value through other comprehensive income － unquoted equity instruments 〃〃

204

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

8) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The Company’s fair value measurement on financial instruments is reasonable. However, the measurement would be different if different valuation models or valuation parameters are used. For financial instruments using level 3 inputs, if the valuation parameters changed, the impacts on other comprehensive income or loss are as follows:

Input	Move up or down	Other comprehensive income Favorable change Unfavora ble change $ 2,061 (2,097) $ 1,964 (1,999) $ 2,837 (2,786) $ 12,961 (12,873)	Other comprehensive income Favorable change Unfavora ble change $ 2,061 (2,097) $ 1,964 (1,999) $ 2,837 (2,786) $ 12,961 (12,873)
		Favorable change
Lack-of-M arketability discount rate Price-to-Bo ok Ratio Lack-of-M arketability discount rate Price-to-Bo ok Ratio	5% 5% 5% 1%	$ 2,061
		$ 1,964	(1,999)
		$ 2,837	(2,786)
		$ 12,961	(12,873)

(s) Financial risk management
(i) Overview

The Company have exposures to the following risks from its financial instruments:

1) Credit risk
2) Liquidity risk
3) Market risk

The following likewise discusses the Company’s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks exposures, please refer to the respective notes in the accompanying financial statements.

205

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(ii) Structure of risk management

The internal auditors of the Company perform the regularly or irregularly risk management control and operating activity audit in accordance with the internal audit plans. The result will be reported to the Audit Committee periodically. The Company has no transactions in financial instruments for the purpose of speculation.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s cash at bank, receivables from customers and investments in securities.

1) Accounts receivable and other receivables

The Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. Purchase limits are established for each customer, these limits are reviewed periodically. Customers that fail to meet the Company’s benchmark creditworthiness may transact with the Company only on a prepayment basis.

In order to mitigate account receivable credit risk, the Company constantly assesses the financial status of the customers, and requests the customers to provide guarantee or security if necessary. The Company regularly accesses the collectability of accounts receivable and recognizes allowance for accounts receivable. The impairment losses are always within management’s expectation.

2) Investments

The exposure to credit risk for the bank deposits and other financial instruments is measured and monitored by the Company’s finance department. The Company only deals with banks, corporate organization and financial institutions with good credit rating. The Company does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

3) Guarantees

Pursuant to the Company’s policy, it is only permissible to provide financial guarantees to the entities listed in the policy. As of December 31, 2021 and 2020, the guarantees provided to the subsidiaries amounted to $150,000 and $0, respectively.

206

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(iv) Liquidity risk

The Company manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Company’s management supervises the banking facilities to ensures they are in compliance with the terms of loan agreements.

The loans and borrowings from the bank form an important source of liquidity for the Company. Please refer to note 6(i) and 6(j) for the unused credit lines of bank loans as of December 31, 2021 and 2020.

(v) Market risk

Market risk is the risk that changes in market prices, such as interest rates, and equity prices, will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Interest rate risk

The Company borrows funds on floating interest rate, therefore, the Company has the risk of cash flow.

2) Other market price risk

The Company is exposed to equity price risk due to the investments in listed stock investments and non-listed stock investments. This is a strategic investment and is not held for trading. The Company does not actively trade in these investments. The material investments of investment portfolio are managed individually and their purchase decision are all approved by the finance department.

(t) Capital management

The policy of capital management made by the Board of Directors is to maintain a strong capital base so as to stabilize the confidence of the investors, creditors and the public market and to sustain future development of the business. Capital consists of ordinary shares, capital surplus and retained earnings. The Board of Directors monitors the return on capital as well as the level of dividends to ordinary shares.

The Company monitors capital structure through the regular review of the asset-debt ratio. As of December 31, 2021 and 2020, the debt ratios of the Company were as follows:

Total liabilities Total assets Debt-to-asset ratio	December 31, 2021 $ 4,537,919 9,794,029 46 %	December 31, 2020 4,539,860 9,626,048 47 %

As of December 31, 2021, there were no changes in the Company’s approach of capital management.

207

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(u) Investing and financing activities not affecting current cash flow

The Company’s investing and financing activities which did not affect the current cash flow for the years ended December 31, 2021 and 2020, were as follows:

(i) The acquisition of right-of -use assets by lease, please refer to notes (6)(h) and (6)(k).
(ii) Reconciliation of liabilities arising from financing activities was as follows:

Long-term borrowings Guarantee deposits Lease liabilities Total liabilities from financing activities Long-term borrowings Guarantee deposits Lease liabilities Total liabilities from financing activities		January 1, 2021 $ 1,174,700 15,676 1,326,511 $ 2,516,887 January 1, 2020 $ 1,215,000 15,201 1,282,127 $ 2,512,328	Cash flows 100,000 1,436 (230,358)		Non-cash changes Changes in lease payments - - (4,356) (4,356) Non-cash changes Changes in lease payments - - 269,693 269,693	December 31, 2021 1,274,700 17,112 1,091,797


			(128,922)			2,383,609
			Cash flows (40,300) 475 (225,309)			December 31, 2020 1,174,700 15,676 1,326,511


			(265,134)			2,516,887

(7) Related-party transactions:

(a) Names and relationship with related parties

The followings are entities that have had transactions with related party during the periods covered in parent-company-only financial statements:

Name of related party

Cheng Loong Corporation (Cheng Loong)

Shine Far Construction Co., Ltd.

Shine Far Property Co., Ltd.

Gemtech Optoelectronics Corp.

Relationship with the Company This Company is the corporate director of the Company

This Company is the corporate director of the Company
Its parent company is the corporate director of the Company
The same chairman of the Board with Cheng Loong

208

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

Name of related party

Relationship with the Company

It has the same chairman as that of the Board of the Company and became an associate of the Company since April 2021

Ko Loong Industry Co., Ltd.

Half of the directors of this company are the directors of the Company

Sun Favorite Co., Ltd.

Chung Ming International Limited Taiwan Branch

Its ultimate parent company is the corporate director of the Company

Wen Gin Development Co., Ltd. (Wen Gin Development)

The relationship between the chairman of the Company and of this company is within second degree of kinship A subsidiary of the Company.

Shan Loong Investment Co., Ltd. (Shan Loong Investment)

Shan Loong International & Customs Broker Co., Ltd. (Shan Loong Customs Broker) Shan Loong Motors Co., Ltd. (Shan Loong Motors)

A subsidiary of the Company.

Shang-Loong International Holdings Co., Ltd. A subsidiary of the Company. (Shang-Loong International) Long Yun Investment Holding Co., Ltd. A subsidiary of the Company. (Long Yun) Loong De Investment Co., Ltd. (Loong De) A subsidiary of the Company. Shanghai Shan Tong Logistic Co., Ltd. (Shanghai A subsidiary of the Company. Shan Tong ) Shan-Loong Logistics Co., Ltd. A subsidiary of the Company.

A subsidiary of the Company.

A subsidiary of the Company. A subsidiary of the Company.

(b) Significant transactions with related parties

(i) Sales

The amounts of significant sales transactions between the Company and related parties were as followings:

Other related parties Subsidiaries Associates		Sales 2021 2020 $ 1,483,344 1,402,439 15,697 11,376 78 - $ 1,499,119 1,413,815	Sales 2021 2020 $ 1,483,344 1,402,439 15,697 11,376 78 - $ 1,499,119 1,413,815	Sales 2021 2020 $ 1,483,344 1,402,439 15,697 11,376 78 - $ 1,499,119 1,413,815
		2021 $ 1,483,344 15,697 78

		$ 1,499,119		1,413,815

Sales prices and other transaction terms for related parties were similar to those of the third-party customers.

209

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(ii) Receivables from related parties

The receivables from related parties were as follows:

Account Related-party categories	December 31, 2021 $ 250,020 656 1,294 15 296 101 94 $ 252,476	December 31, 2020
Accounts receivables Other related parties—Cheng Loong 〃 Other related parties 〃 Subsidiaries 〃 Associates Other receivables (recorded as other current financial assets) Other related parties 〃 Subsidiaries—Shan Loong Motors 〃 Subsidiaries		252,332 513 2,748 - 425 8,394 29
		264,441

(iii) The costs and expenses paid to related parties

The costs and expenses paid to related parties were as follows:

Account	Relationship		2021		2020 46,275 6,956 4,323 - 57,554
			$ 40,553 127,864 5,255 2,245
Operating costs and operating expenses Other related parties 〃 Subsidiaries—Shan Loong Motors 〃 Subsidiaries 〃 Associates
			$ 175,917

(iv) Purchases of property, plant and equipment

1) In December 2020, the Company purchased the land and building located in Banqiao District, New Taipei City amounting to $169,189 (excluding tax) from a related party, Cheng Loong. Pricing of the above land and building was based on the valuation report from CCIS Real Estate Joint Appraisers Firm and Zhonglian Real Estate Appraiser Firm. As of December 31, 2020, the process for transferring the property has been completed and the above payable had been fully paid.

210

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

2) The Company purchased the transportation equipment from the related parties and engaged related parties to engineer the facilities on the leased land. The total price was as follows:

Other related parties Subsidiaries—Shan Loong Motors Associates		Total price	Total price
		2021	2020
		$ 14,868 34,605 18,969 $ 68,442	8,932 440 -
			9,372

(v) Payable to related parties

The payables to related parties resulting from the above transactions were as follows:

Account Relationship Accounts payable Other related parties 〃 Subsidiaries Other payables Other related parties 〃 Subsidiaries 〃 Associates	December 31, 2021 $ 1,008 649 2,618 17,981 3,421 $ 25,677	December 31, 2020 2,121 268 1,238 7,766 -

		11,393

(vi) Disposal of transportation equipment

The total disposal price and unreceived balance of transportation equipment sold to related parties were as follows:

Other related parties		Total price	Total price	Other receivables from related parties	Other receivables from related parties
		2021	2020	December 31, 2021	December 31, 2020
		$ 1,262	994	-	-

For the years ended December 31, 2021 and 2020, the losses on disposal of transportation equipment amounted to $483 and $50, respectively.

211

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

(vii) Lease

1) Lessee

The Company rented several office spaces and lands from Cheng Loong. The rental fee is determined based on nearly office rental rates. The details of the above lease transactions are as follows:

Other related parties － Cheng Loong		Lease liabilities	Lease liabilities	Lease liabilities		Interest expense	Interest expense	Interest expense
		December 31, 2021		December 31, 2020		2021		2020
		$ 50,424		274,504		2,586		4,042

2) Lessor

The Company rented out the office building to other related parties and its subsidiaries. The details of the above lease transactions are as follows:

Rental income (recorded as other income)	Rental income (recorded as other income)	Other receivables from related parties December 31, 2021 December 31, 2020	Other receivables from related parties December 31, 2021 December 31, 2020
2021 $ 3,000 1,103	2020	December 31, 2021
	3,000 -	- - -	- -
$ 4,103	3,000		-

(viii) Guarantees

As of December 31, 2021 and 2020, the guarantees provided to subsidiaries were $150,000 and $0, respectively.

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefits		2021 $ 42,541 442		2020 37,509 652

		$ 42,983		38,161

212

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD. Notes to the Financial Statements

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2021 $ 90,562 17,532 71,414 $ 179,508	December 31, 2021 $ 90,562 17,532 71,414 $ 179,508		December 31, 2020 90,562 20,026 65,859
Property, plant and equipment－land Property, plant and equipment－buildings Refundable deposits (deposit certificate)	Long-term borrowings 〃 Deposits for performance guarantee
			$ 179,508		176,447

(9) Significant commitments and contingencies:

(a) As of December 31, 2021 and 2020, the Company’s unrecognized contractual commitments for gas station engineering and office renovation amounted to $2,671 and $18,394, respectively.
(b) As of December 31, 2021 and 2020, the Company had outstanding stand-by letters of credit provided by the banks totaling $2,005,000 and $1,755,000, respectively, for purposes of gasoline purchase and transportation, etc.

(10) Losses due to major disasters: None

(11) Subsequent events: None

(12) Others:

(a) A summary of current-period employee benefits and depreciation, by function, is as follows:

By function By item	2021	2021	2021	2020	2020	2020
	Operatin g cost	Operatin g Expenses	Total	Operatin g cost	Operatin g Expenses	Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation	402,086 36,544 20,918 - 209 217,114	718,151 71,959 32,765 17,280 22,320 266,409	1,120,237 108,503 53,683 17,280 22,529 483,523	392,787 33,913 20,153 - 253 230,539	719,439 66,456 32,997 18,320 21,913 254,577	1,112,226 100,369 53,150 18,320 22,166 485,116

213

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

For the years ended December 31, 2021 and 2020, the information about number of employees and employee benefit expenses of the Company is as follows:

employee benefit expenses of the Company is as follows:
Number of employees Number of directors (non-employees) Average employee benefit expenses Average salary expenses Percentage of change in average salary expense of employees Remuneration for supervisors	2021 1,740		2020 1,777

	7		7
	$ 753		728
	$ 646		628
	2.87% $ -	2.87%	-

The Company's salary and remuneration policy (including directors, managers and employees) is as follows:

(i) The remuneration to managers and employees is divided into fixed and variable salaries. Fixed salary is paid monthly regardless of profit or loss. On the other hand, variable salary is employee remuneration, development bonus, and year-end performance bonus, which are determined based on the contribution of the Company, the overall environment, and market standards that reflect the performance of the job.
(ii) The directors who conduct the Company's business shall receive the remuneration regardless of the operating profit or loss. The Board approves the directors’ remuneration, which is determined based on the extent and value of the service provided for the management of the Company and the peer industry level.

(13) Additional disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company for the year ended December 31, 2021.

(i) Loans to other parties: None
(ii) Guarantees and endorsements for other parties:

N o.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during theperiod	Balance of guarantees and endorsements as of reportingdate	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximu m amount for guarantees and endorsem ents	Parent company endorsement s/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorseme nts/guarantees to third parties on behalf of companies in Mainland China
		Name	Relation ship with the Company
0	The Company	Shan-Loo ng Motors	Note 2	2,628,055	150,000	150,000	-	-	2.85%	5,256,110	Y	-	-

Note 1: The total amount of endorsements shall not exceed the Company's net assets, and the endorsements for a single company shall not exceed 50% of the Company's net assets.

Note 2: Subsidiary whose over 50% common stock is directly or indirectly owned.

214

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(iii) Securities held as of December 31, 2021 (excluding investment in subsidiaries, associates and joint ventures):

				(In thousands of shares)	(In thousands of shares)	(In thousands of shares)	(In thousands of shares)	(In thousands of shares)
Name of holder	Category and name of security	Relationshi p with company	Account title	Ending balance				Note
				Shares/Uni ts (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company 〃〃〃〃〃 Shan Loong Investment Co., Ltd. 〃〃〃 Shan Loong Customs Broker Shan-Loon g Internationl	Stock: Cheng Loong Corporation stock Gemtech Optoelectronics Corp. stock Cheng Loong Investment Co., Ltd. stock Shin Loong Lifecare Corp. stock Yueh Loong Co.,Ltd. Stock Shine Far Co., Ltd. Stock Stocks: Cheng Loong Corporation stock Shan Loong Transportation Co., Ltd. Stock Cheng Loong investment Co., Ltd. Stock Yueh Loong Co., Ltd. stock Stocks: Cheng Loong Corporation stock Chung Loong Paper Holdings Limited	Cheng Loong is the corporate director of the Company The same chairman of the Board with Cheng Loong - - - - - Parent company - - - -	Non current financial assets at fair value through other comprehensive income 〃〃〃〃〃 Non-current financial assets at fair value through other comprehensive income 〃〃〃 Non-current financial assets at fair value through other comprehensive income 〃	19,376 3,644 600 350 323 270 31,819 1,353 1,200 29 7,155 3,349	683,977 72,734 29,214 2,317 5,379 13,097 1,123,200 49,401 58,362 476 252,572 204,805	1.75% 19.29% 4.62% 5.83% 10.78% 0.87% 2.87% 0.99% 9.23% 0.95% 0.65% 5.00%	683,977 72,734 29,214 2,317 5,379 13,097 1,123,2 00 49,401 58,362 476 252,572 204,805

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock: None
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None
(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock: None

215

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of company	Related party	Nature of relationship	Transactiondetails	Transactiondetails	Transactiondetails	Transactiondetails	Transactions with terms different from others	Transactions with terms different from others	Notes/Trade receivables (payable)	Notes/Trade receivables (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Paymen t terms	Ending balance	Percentage of total notes/trade receivables (payable)
The Company Shan Loong Motors Shan Loong international & Customs Broker Co., Ltd. Shan Loong international & Customs Broker Co., Ltd. Shan-Loo ng Logistics Co., Ltd.	Cheng Loong The Company Cheng Loong Chung Ming International Limited Cheng Loong Binh Duong Paper Co., Ltd	Cheng Loong is the corporate director of the Company Parent company This Company is the corporate director of the Company Its ultimate parent company is the corporate director of the Company Its ultimate parent company is the corporate director of the Company	Freight and gas revenue Revenue from truck sales, maintenance and repair Customs agent revenue Customs agent revenue Freight transportation revenue	(1,476,8 81) (162,469 ) (101,649 ) (168,000 ) (118,969 )	(8.60)% (29.71)% (10.57)% (17.47)% (47.75)%	20-80 days 25 days 60 days 25 days 60 days	There is no difference to those of the third-party 〃〃〃〃	No difference 〃〃〃〃	Accou nts receivable 250,020 Accou nts receivable 17,442 Accou nts receivable 16,168 Accou nts receivable 8,553 Accou nts receivable 17,297	32.36% 62.06% 11.15% 5.90% 56.02%

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of company	Related-party	Nature of relationship	Ending balance	Turnover rate	Overdue	Overdue	Amounts received in subsequent period	Loss allowan ce
					Amou nt	Action taken
The Company	Cheng Loong	Cheng Loong is the corporate director of the Company	250,020	5.88	-		Accounts receivable 242,146	-

Note 1: Information as of February 28, 2022.

(ix) Trading in derivative instruments: None.

216

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

(b) Information on investees:

The following is the information on investees (excluding information on investees in Mainland China):

				(In thousands of shares)	(In thousands of shares)	(In thousands of shares)	(In thousands of shares)	(In thousands of shares)	(In thousands of shares)	(In thousands of shares)	(In thousands of shares)	(In thousands of shares)	(In thousands of shares)
Name of investor	Name of investee	Location	Main businesses and products	Original investment amount		Balance as of endingof theperiod				Net income (losses) of investee (Note2)	Share of profits /losses of investee (Note2)		Note
				December 31, 2021 (Note1)	December 31, 2020 (Note1)	Shares	Percent age of ownership	Carrying value (Note1)
The Company The Company The Company The Company The Company Shan-Loon g International Shan-Loon g International Loong De	Shan-Loong Investment Shan Loong Customs Broker Shan-Loong International Shang Loong Motors Ko Loong Industry Long Yun Loong De Shan-Loong Logistics Co., Ltd.	New Taipei City Keelung British Virgin Islands New Taipei CIty New Taipei CIty Samoa Samoa Vietnam	Investing activities Import and export agent services Investing activities Truck repair, maintenance and sales Synthetic resin and plastic manufacturing Investing activities Investing activities Warehousin g, freight transportation and related agent	400,000 131,000 278,101 (USD10,047 thousand) 200,000 28,655 22,725 (USD821 thousand) 28,234 (USD1,020 thousand) 28,234 (USD1,020 thousand)	400,000 131,000 278,101 (USD10,047 thousand) 36,000 - 22,725 (USD821 thousand) 28,234 (USD1,020 thousand) 28,234 (USD1,020 thousand)	40,000 13,100 10,047 20,000 2,014 821 1,020 -	100.00 % 100.00 % 100.00 % 100.00 % 19.75 % 100.00 % 100.00 % 51.00 %	9 5	1,200,08 410,023 611,081 216,477 71,325	57,057 60,933 (2,924) 19,384 13,174 1,938 8,029 15,742	54,079 60,933 (2,924) 15,533 2,601 130,222 Investme nt gains and losses recognized by its parent company 〃〃	54,079 60,933 (2,924) 15,533 2,601	Subsidi ary company 〃〃〃 - Subsidi ary company 〃〃
									2,508,99			130,222

									231,173 48,427 48,451

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

Name of investee	Main businesses and products	Total amount of capital surplus	Method of investment	Accumulated outflow of investment from Taiwan as of beginning of the period	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of ending of theperiod	Percentage of ownership	Net income (losses) of the investee (Note6)	Investme nt income (losses) (Note6)	Book value (Note5)	Accumulat ed remittance of earnings in current period
					Outflo w	Inflow (Note5)
Shanghai Chung Loong Paper Co., Ltd. (Shanghai Chung Loong) Shanghai Shan Tong	Corrugated medium and kraft linerboard Warehousing, freight transportation and related agent	(Note 8) 21,720 (RMB5,000 thousand) (Note 7)	(Note1) (Note1)	160,046 (USD 5,782 thousand) 40,721 (USD812 thousand and RMB4,200 thousand)	- -	- -	160,046 (USD 5,782 thousand) 40,721 (USD812 thousand and RMB4,200 thousand)	-% 60.00%	- 3,348	- 2,009	- 231,18 3	- -

217

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

Name of investee	Main businesses and products	Main businesses and products	Total amount of capital surplus	Method of investment	Accumulated outflow of investment from Taiwan as of beginning of the period	Inves	Inves	tment flows	Accumulated outflow of investment from Taiwan as of ending of the period	Percentage of ownership	Net income (losses) of the investee (Note 6)	Investme nt income (losses) (Note 6)	Book value (Note 5)	Accumulat ed remittance of earnings in current period
						Outflo w		Inflow (Note 5)

Loong Fu Paper (Kunsan) Co., Ltd. Cheng Loong (Gwangtung) Paper Co., Ltd. Zhangzhou Cheng Loong Paper Co., Ltd. Qingdao Chung Loong Paper Co., Ltd. Tianjin Chung Loong Paper Co., Ltd. Suzhou Cheng Loong Paper Co., Ltd. Chong Qing Cheng Loong Paper Co., Ltd. Chengdu Cheng Loong Packing Products Co., Ltd. Henan Cheng Loong Packing Products Co., Ltd.	Corrugated paper boxes, cardboard and paper products Cardboard, paper boxes, paper products and packing decoration printing Cardboard, paper boxes and paper products Cardboard, paper boxes and paper products Corrugated cardboard, paper boxes, paper pallets and paper products Cardboard Corrugated, cardboard, corrugated boxes, display boxes, paper pallets and paper products Corrugated cardboard, paper boxes, paper pallets and paper products Corrugated cardboard and packaging products		276,800 (USD10,000 thousand) 858,080 (USD31,000 thousand) 353,750 (USD12,780 thousand) (Note 8) (Note 8) 512,080 (USD18,500 thousand) 373,680 (USD13,500 thousand) 111,993 (USD4,046 thousand) 276,523 (USD9,990 thousand)	(Note1) (Note1) (Note1) (Note1) (Note1) (Note1) (Note1) (Note1) (Note1)	30,863 (USD1,115 thousand) 23,500 (USD849 thousand) 17,660 (USD638 thousand) 4,152 (USD150 thousand) 13,868 (USD501 thousand) 4,844 (USD175 thousand) 4,678 (USD169 thousand) 3,460 (USD125 thousand) 11,598 (USD419 thousand)	- - - - - - - - -		- - - - - - - - -	30,863 (USD1,115 thousand) 23,500 (USD849 thousand) 17,660 (USD638 thousand) 4,152 (USD150 thousand) 13,868 (USD501 thousand) 4,844 (USD175 thousand) 4,678 (USD169 thousand) 3,460 (USD125 thousand) 11,598 (USD419 thousand)	5.00% 5.00% 5.00% -% -% 5.00% 5.00% 5.00% 5.00%	(Note 4) (Note 4) (Note 4) - - (Note 4) (Note 4) (Note 4) (Note 4)	(Note 4) (Note 4) (Note 4) - - (Note 4) (Note 4) (Note 4) (Note 4)	(Note 4) (Note 4) (Note 4) - - (Note 4) (Note 4) (Note 4) (Note 4)	- - - - - - - - -
(ii)		Limitation on investment in Mainland China:
		Accumulated Investment in Mainland China as of December 31, 2021					Investment Amounts Authorized by Investment Commission, MOEA					Upper Limit Investment		on
		315,390 (USD10,735 thousand and RMB4,200 thousand)					315,390 (USD10,735 thousand and RMB4,200 thousand)					3,153,666

218

(Continued)

SHAN-LOONG TRANSPORTATION CO., LTD.

Notes to the Financial Statements

Name of investee	Main businesses and products	Total amount of capital surplus	Method of investment	Accumulated outflow of investment from Taiwan as of beginning of the period	Inves	tment flows	Accumulated outflow of investment from Taiwan as of ending of the period	Percentage of ownership	Net income (losses) of the investee (Note 6)	Investme nt income (losses) (Note 6)	Book value (Note 5)	Accumulat ed remittance of earnings in current period
					Outflo w	Inflow (Note 5)

(iii) Significant transactions: None

report which was reviewed by Taiwan accountants. The remaining invested companies did not use the equity method to invest, so there was no profit or loss recognized in this period.

219

(Continued)

(d) Major shareholders:

Unit: shares

		Unit: shares
Shareholding Shareholder’s Name	Shares	Percentage
Cheng Loong Corporation	12,690,010	9.24%
CTBC comprehensive trust account for employees of Shan-Loong Transportation	8,602,899	6.26%
Shine Far Co., Ltd.	8,367,944	6.09%

(14) Segment information:

Please refer to the consolidated financial statements for the year ended December 31, 2021.

220

Chapter 7. Evaluation of Financial Status and Operating Results Review and Risk Matters

I. Financial position

Units: NT$ Thousand; %

Year
			Difference
Item	2021	2020

			Amount
Current Assets			578,844
	2,867,370	2,288,526		25.29


Property, plant, and equipment	3,609,511	3,725,365	(115,854)	(3.11)
Intangible assets	0	0	0	0
Other non-current assets	3,876,316	4,029,108	(152,792)	(3.79)
Total asset value	10,353,197	10,042,999	310,198	3.09
Currentliabilities	3,494,290	2,356,421	1,137,869	48.29
Non-currentliabilities	1,402,124	2,410,834	(1,008,710)	41.84
Total liabilities	4,896,414	4,767,255	129,159	2.71
Capitalstock	1,372,818	1,372,818	0	0
Capitalsurplus	583,359	580,381	2,978	0.51
Retained earnings	1,944,149	1,790,142	154,007	8.60
Otherequityinterest	1,387,647	1,374,710	12,937	0.94
Treasury stock	(31,863)	(31,863)	0	0
Equity attributable to
shareholders of the parent	5,256,110	5,086,188	169,922	3.34
company
Non-controlling Interests	200,673	189,556	11,117	5.86
Total equity	5,456,783	5,275,744	181,039	3.43
Explanation of major changes: (changes in previous and subsequent periods up to 20% and the amount of
changes up to NT $10 million)
(I) Increase in current assets: due to increase in cash and cash equivalents in the current period.
(II) Increase in current liabilities: Due to increase in long-term liabilities due within one year of the
current period.
(III) Decrease in other non-current liabilities: due to decrease in long-term borrowings.

221

II. Financial performance

Units: NT$ Thousand; %

Year			Increase	% Change

Item	2021	2020	(Decrease)
			Amount
Operating revenue			2,856,663
	18,812,163	15,955,500		17.90


Operating costs			2,814,582
	17,026,406	14,211,824		19.82


Gross profit			42,081
	1,785,757	1,743,676		2.41


Operating expenses			53,619
	1,410,146	1,356,527		3.95


Net operating profit			(11,538)
	375,611	387,149		(2.98)


Non-operating income and			62,464
	138,456	75,992		82.80
expenses

Net income before tax			50,926
	514,067	463,141		11.00


Income tax expense			6,255
	89,507	83,252		7.51


Net profit for the period			44,671
	424,560	379,889		11.76


Other comprehensive income
	55,521	939,019	(883,498)	(94.09)
(loss)

Total comprehensive income
	480,081	1,318,908	(838,827)	(63.60)
for the period

(If the increase or decrease amounts to 20%, and the change amounts			to NT $10 million, please
analyze and explain)
(I) Increase in non-operating income and expenses: increase in dividend income in the current
period.
(II) Increase and decrease in other comprehensive profits and losses: This is due to the
decrease in unrealized evaluation profits and losses of equity instrument investment
measured at fair value-added through other comprehensive profits and losses in the current
period.
(III) Decrease in total comprehensive profit or loss in the current period: Due to decrease in
other comprehensive profit or loss in the current period.

222

III. Analysis of Cash Flow

(I) Analysis of the clash flow difference of the most two recent years

Year Item	2021	2020	Increasing (Decreasing) Percentage
Cash Flow Ratio	37.94%	53.25%	(15.31)%
Cash flow adequacy ratio	101.57%	84.50%	17.07%
Cash re-investment ratio	19.82%	17.71%	2.11%

If the increase or decrease ratio changes by more than 20%, the analysis and explanation are as

follows: None.

(II) Analysis of the Cash Flow Difference of the Next Year:

lysis of the Cash Flow Difference of the Next Year:	lysis of the Cash Flow Difference of the Next Year:	lysis of the Cash Flow Difference of the Next Year:	lysis of the Cash Flow Difference of the Next Year:	lysis of the Cash Flow Difference of the Next Year:	lysis of the Cash Flow Difference of the Next Year:
In Thousands of New Taiwan Dollars
Cash balance at the beginning of the period	Annual net cash flow Net cash flow from operating activities	Annual Cash outflows	Cash Remaining Surplus	Remedy for cash inadequacy
				Investment plan	Financing plan
563,141	800,000	700,000	663,141	－	－

Cash Flow Analysis for the Year of the current year:
- (1) Operating activities: Based on the development direction of the company's main business, the sales and profits are stable, and the cash flow of operating activities is expected to increase in the next year.
- (2) Investment activities: it is expected to increase investment in fixed assets, distribute cash dividends and other activities.
Remedy action for estimated cash inadequacy: Not Applicable.
IV. Major Capital Expenditures and Impact on Financial and Business in the most recent year: None.
V. Investment policy in the past year, the main reasons for profit/loss, improvement plan, and investment plan for the upcoming fiscal year

There are no other reinvestment plans for the Company in the most recent year.

VI. Risks

223

(I) Effects of Changes in Interest Rates, Foreign Exchange Rates and Inflation on Corporate Finance, and Future Measures
Interest rate change: the Company has sufficient working capital and maintains good relationship with banks. The company has sound finance and good debt credit. It is expected that future interest rate changes will not have a significant impact on the company's profits and losses.
Exchange rate changes: the Company mainly focuses on domestic transportation and oil sales, and exchange rate fluctuations have little impact on the company; However, the financial department of the general management office also keeps abreast of the market information on the trend of exchange rate, and may take specific countermeasures when necessary to avoid the risk caused by the change of exchange rate.
Inflation: the company is engaged in domestic transportation and oil sales, and has not been affected by costs and profits and losses due to inflation.
(II) The policies to engage in high-risk, highly-leverage investments, lending, endorsements and guarantees, and the transactions of financial derivative products in the most recent year, the main reasons for gains and losses, and the future countermeasures
Neither the Company nor its subsidiaries are engaged in high-risk and high-profile investments but operation of its business.
For endorsements and guarantees and fund loans to others engaged by the company and its subsidiaries due to business needs, in addition to careful evaluation, and in accordance with the relevant laws and regulations of the FSC and the provisions of the "operating procedures for endorsements and guarantees" and "operating procedures for fund loans to others" formulated by the company, the company shall timely and correctly announce all information.
(III) Future R&D Projects and Estimated R&D Expenditure
The Company continues to build an environmental-friendly fleet, and it is expected to purchase 20 tractors and 10 trucks.
The Company is to purchase of self-service fuel dispenser equipment.
The Company is to build the logistics system to upgrade the dispatch system.

The investment in research and development for the above plan is expected to be approximately NT $140 million.

(IV) Effects of and Response to Changes in Policies and Regulations Relating to Corporate Finance and Business
Important policy and legal changes at home and abroad in the most recent year had no significant impact on the company's financial business. Look forward to the future, the Company will collect relevant information from time to time and discuss necessary countermeasures to meet the needs of the Company's operation.
(V) Effects of and Response to Changes in Technology and the Industry Relating to Corporate Finance and Business

The company's businesses are mainly transportation, gas stations and other service. The competitiveness of the industry mainly depends on the quality of transportation equipment, oil

224

supply and operators' familiarity and service attitude. Therefore, there was no impact on the company due to major technical changes in the last year.

(VI) The Impact of Changes in Corporate Image on Corporate Risk Management, and the Company’s Response Measures

The Company values resources, protects the environment, complies with laws and regulations, strives to establish a good corporate image, and effectively reduces and eliminates the impact of environmental issues on the Company.

(VII) Expected Benefits and Risks Relating to Merger and Acquisition Plans and Response Measures

The company has no plans for mergers and acquisitions in the most recent year and up to the date of publication of the annual report.

(VIII) Expected Benefits and Risks Relating to Plant Expansion Plans and Response Measures: None.
(IX) The risk and future mitigation efforts to risks associated with purchase concentration and sales concentration
In terms of Purchase The company's main oil suppliers are CPC and Formosa Plastics, the two largest domestic oil manufacturers, and there should be no risk of centralized purchase.
In terms of sales The company's sales target is the general consumers and many domestic companies and firms, so there is no risk of centralized sales.
(X) Impacts, risks, and response measures resulting from major equity transfer or replacement of directors, or substantial shareholders holding more than 10% of the Company's shares: None.
(XI) Impact, risk, and response measures related to any change in the administrative authority towards the Company's operations: None.
(XII) Litigation or Non-litigation Events: None.
(XIII) Other significant matters and response measures: None.

VII. Other important items: None.

225

Chapter 8. Special Disclosure

I. Summary of Affiliated Companies

(I) Consolidated Business Report - Overview of Affiliates
Organizational Structure of Affiliated Companies

Shan-Loong Transportation Co., Ltd.

Shan-Loong Investment Co., Shan-Loong International & Shan-Loong Automotive Co., Shan-Loong International Ltd. Customs Broker Co., Ltd. Ltd. Holdings Co., Ltd. Consolidated shareholding Consolidated shareholding Consolidated shareholding Consolidated shareholding percentage: 100% percentage: 100% percentage: 100% percentage: 100%

Long Yun Investment Loong De Investment Co., Ltd. Holding Co., Ltd Consolidated shareholding Consolidated shareholding percentage: 100% percentage: 100% Shanghai Shantong Storage and Shan-Loong Logistics Co., Ltd. Transportation Co., Ltd. Comprehensive shareholding Comprehensive shareholding ratio: 51% ratio: 60%

226

2. Basic information of affiliates

	Date of		Paid-in capital
Enterprise Name		Address		Main Business or Products
	incorporation		(NT $1,000)


Shan-Loong Investment		1F, No. 1-2, Sec. 1, Minsheng Rd., Banqiao Dist.,	NTD
	1998.12.07			General investment business
Co., Ltd.		New Taipei City	400,000


				1. Customs Declaration
Shan-Loong International
		5F., No. 133-7, Yi 1st Rd., Zhongzheng	NTD	industry.
& Customs Broker Co.,	1997.11.21
		Dist., Keelung City	131,000	2. Sea freight forwarding
Ltd.
				industry.


Shan-Loong Automotive		1F, No. 1-2, Sec. 1, Minsheng Rd., Banqiao Dist.,	NTD	Automotive repair, wholesale
	2020.09.02
Co., Ltd.		New Taipei City	200,000	and retail trade



Shan-Loong International		P.O.BC3321 Road Town,Tortda,British Virgin	USD
	2002.06.05			General investment business
Holdings Co., Ltd		Islands	10,047



Long Yun Investment			USD
	2002.09.03	Level 2, Lotemau Centre,Vaea Street, Apia, samoa		General investment business
Holding Co., Ltd			821



Loong De Investment Co.,			USD
	2007.04.13	Level 2,Lotemau Centre,Vaea Street,Apia,samoa		General investment business
Ltd.			1,020


Shanghai Shantong Storage
		Room B210, Floor 2, Building 2, No. 2250, Pudong	RMB
and Transportation Co.,	2004.03.19			Transportation
		South Road, Shanghai	5,000
Ltd.


Shan-Loong Logistics Co.,			USD
	2018.06.05	Ho Chi Minh City		Transportation
Ltd.			2,000

227

Information of the directors, supervisors and president of each affiliated enterprise

In shares

Enterprise Name	Position	Name and Representative	Current shareholding
			Number of shares at the end of the year(thousand shares)	Shareholdi ngratio
Shan-Loong Investment Co., Ltd.		Shan-Loong Transportation Co., Ltd.	40,000	100%
	Chairman	Representative: Jen-Hao Cheng
	Director	Representative: Chen-Te Wang
	Director	Representative: Wei-Liang Chang
	Director	Representative: Yu-Cheng Yao
	Director	Representative: Yi-Li Chen
	Supervisor	Representative: Wei-TengHsiao
Shan-Loong International & Customs Broker Co., Ltd.		Shan-LoongTransportation Co., Ltd.	13,100	100%
	Chairman	Representative: Jen-Hao Cheng
	Director	Representative: Min-Peng Hsu
	Director	Representative: Chien-Hsin Wang
	Director	Representative: Ming-Chuan Hsieh
	Director	Representative: Yi-Nuo Chen
	Supervisor	Representative: Yung-Lung Chen
Shan-Loong Automotive Co., Ltd.		Shan-Loong Transportation Co., Ltd.	20,000	100%
	Chairman	Representative: Jen-Hao Cheng
	Director	Representative: Kun-Lin Wu
	Director	Representative: Ming-Chuan Hsieh
	Director	Representative: San-Yu Chang
	Director	Representative: Chun-Yi Ho
	Supervisor	Representative: Yi-Hsin Chen
Shan-Loong International Holdings Co., Ltd	Director	Shan-Loong Transportation Co., Ltd.	Contributed USD $10,050,000	100%
		Representative: Jen-Hao Cheng
Long Yun Investment Holding Co., Ltd	Director	Shan-Loong International Holdings Co., Ltd	Contributed USD $820,000	100%
		Representative: Jen-Hao Cheng
Loong De Investment Co., Ltd.	Director	Shan-Loong International Holdings Co., Ltd	Contributed USD $1,020,000	100%
		Representative: Jen-Hao Cheng
Shanghai Shantong Storage and Transportation Co., Ltd.		Long Yun Investment HoldingCo.,Ltd	Contributed RMB 5 million Yuan	60%
	Director	Representative: Jen-Hao Cheng, Lan-Hui Yu
	Director	Wen-Ming Cheng, Hui Hsiung, Hua Chou
Shan-Loong Logistics Co., Ltd.		Loong De Investment Co., Ltd.	Contributed US $1.02 million	51%
	Director	Representative: Jen-Hao Cheng, Lan-Hui Yu, Ken-Pei Cheng
	Director	Representative: Pham Thi TUYETLOUNG Kien Giang Thi

228

4. Status of operations of affiliates

					In Thousands of New Taiwan Dollars Operating revenue Operating profit Net Income (Loss) (after tax) Earnings per share (NT$) (after tax) — (3,203) 57,057 NA 961,876 59,041 60,933 NA 546,877 23,784 19,384 NA — (10,021) (2,924) NA — (78) 1,938 NA — (279) 8,029 NA 8 (2,676) 3,348 NA 249,155 17,541 15,742 NA	In Thousands of New Taiwan Dollars Operating revenue Operating profit Net Income (Loss) (after tax) Earnings per share (NT$) (after tax) — (3,203) 57,057 NA 961,876 59,041 60,933 NA 546,877 23,784 19,384 NA — (10,021) (2,924) NA — (78) 1,938 NA — (279) 8,029 NA 8 (2,676) 3,348 NA 249,155 17,541 15,742 NA	In Thousands of New Taiwan Dollars Operating revenue Operating profit Net Income (Loss) (after tax) Earnings per share (NT$) (after tax) — (3,203) 57,057 NA 961,876 59,041 60,933 NA 546,877 23,784 19,384 NA — (10,021) (2,924) NA — (78) 1,938 NA — (279) 8,029 NA 8 (2,676) 3,348 NA 249,155 17,541 15,742 NA	In Thousands of New Taiwan Dollars Operating revenue Operating profit Net Income (Loss) (after tax) Earnings per share (NT$) (after tax) — (3,203) 57,057 NA 961,876 59,041 60,933 NA 546,877 23,784 19,384 NA — (10,021) (2,924) NA — (78) 1,938 NA — (279) 8,029 NA 8 (2,676) 3,348 NA 249,155 17,541 15,742 NA
							Net	Earnings
		Total asset	Total		Operating	Operating	Income	per share
Name of Company	Capital			Net Worth
		value	liabilities		revenue	profit	(Loss)	(NT$)

							(after tax)	(after tax)
Shan-Loong Investment
	400,000	1,298,676	49,186	1,249,490	—	(3,203)	57,057	NA
Co., Ltd.

Shan-Loong
International & Customs	131,000	573,208	163,185	410,023	961,876	59,041	60,933	NA
Broker Co., Ltd.
Shan-Loong Automotive
	200,000	335,969	115,641	220,328	546,877	23,784	19,384	NA
Co., Ltd.

Shan-Loong
International Holdings	302,822	611,081	—	611,081	—	(10,021)	(2,924)	NA
Co., Ltd
LongYun Investment
	12,370	231,231	58	231,173	—	(78)	1,938	NA
Holding Co., Ltd

LoongDe Investment
	30,643	48,500	74	48,426	—	(279)	8,029	NA
Co.,Ltd.

Shanghai Shantong
Storage and	35,514	394,224	8,919	385,305	8	(2,676)	3,348	NA
Transportation Co., Ltd.
Shan-Loong Logistics
	60,810	152,010	57,008	95,001	249,155	17,541	15,742	NA
Co.,Ltd.

229

(II) Consolidated Financial Statement of Affiliates

Declaration of Consolidated Financial Statements of Affiliates

Written statement

Year 2021 (from January 1 to December 31, 2021) In accordance with the "Standards for the Preparation of Consolidated Business Reports of Affiliates, Consolidated Financial Statements of Affiliates and Relationship Reports" The companies that should be included in the preparation of consolidated financial statements of affiliates are the same as

those that should be included in the preparation of consolidated financial reports of parent and subsidiary companies in accordance with international accounting and Financial Reporting Standards No. 10 approved by the Financial Regulatory Commission, and the relevant information that should be disclosed in the consolidated financial statements of affiliates has been disclosed in the previous consolidated financial reports of parent and subsidiary companies, so the consolidated financial statements of affiliated will not be prepared separately. Sincerely,

Name: Shan-Loong Transportation Co., Ltd. Chairman: Jen-Hao Cheng Date: March 7, 2022

II. Status of private placement of marketable securities: None.

III. Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Year and as of the Publication Date of the Annual Report: None

IV. Other Necessary Statements: None.

Chapter 9. Matters that Have a Significant Impact on Shareholders' Equity or Securities Prices Under Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange law: None.

230

AI assistant

SLC — Annual Report 2021

52170_rns_2022-06-15_64543d67-2b2a-49e5-b5c4-cfb5be945c63.pdf

Shan-Loong Transportation Co., Ltd. 2021 Annual Report

Table of Contents

Chapter 7. Financial Status and Operating Results Review and Risk Matters ................................. 221

Chapter 1. Letter to Shareholders

(I) Lean Management:

(II) Lean Transportation:

(III) Lean Logistics:

(IV) Innovative Oil Products:

Chapter 2. Company Profile

I. Date of establishment : 6 April 1976.

Location of Gas Stations

Chapter 3. Corporate Governance Report

I. Organization

(II) Business Activities of Main Divisions

II. Information on the Company's Directors, President, Vice Presidents, Associate Managers, and the Supervisors of all the Company's Divisions and Branch Units

(I) Director

(III) Remuneration of general Directors, Independent Directors, President and Vice President

1. Remuneration of Directors and Independent Directors

2. Remuneration of the President and Vice Presidents

III. Implementation of Corporate Governance

(I) Board of Directors

attendance was as follows:

Audit Committee Operations

Other mentionable items:

To: Shan-Loong Transportation Co., Ltd

1. Professional Qualifications and Independence Analysis of Remuneration Committee Members

(VIII) Implementation of Internal Control

1. Internal Control System Statement

2. Major Resolutions of Board of Directors

3. Major resolutions of the Audit Committee

4. Major resolutions of the Remuneration Committee

IV. Information on CPA Professional Fees

V. Replacement of CPA:

None.

None.

VIII. Information on Concerned Relationship of Top Ten Major Shareholders

IX. Consolidated Shareholding Percentage

Chapter 4. Capital Overview

I. Capital and Shares

(I) Source of capital

(II) Shareholder Structure

(III) Shareholding Distribution Status

1. Common stock

(IV) List of Major Shareholders

(VI) Dividend Policy and Implementation Status

(VIII) Remuneration for employees and Directors

II. Finance Plans and Implementation: None.

Chapter 5. Operations Overview

I. Business Activities

(2) Automobile Transportation

(III) Technology and R&D Overview

1. Short-term:

2. Long-term:

II. Market and Sales Overview

(IV) List of customers who accounted for more than 10% of total sales in the last two years

1. Information of major suppliers in the most recent two years

III. Employee Profile

IV. Environmental Protection Expenditures

(II) Response Measures

V. Protective Measures for Working Environment and Personal Safety of Employees

VI. Labor Relations

VIII. Important Contract

Chapter 6. Financial Summary

I. Five-Year Financial Summary

Abbreviated Balance Sheets

Abbreviated Consolidated Income Statement

II. Financial analysis in the most recent five years

(II) Financial analysis of Shan-Loong Company

III. 2021 Audit Committee's Review Report

IV. Financial Report of the Most Recent Year

Independent Auditors’ Report

Opinion

Basis for Opinion

Key Audit Matters

1. Revenue recognition

Description of key audit matter:

Audit Procedures:

SLC Annual Report 2021